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Fitch assigns X5 ‘BB’ Rating – Outlook stable

February 09, 2015. TAG: Retail Trade

Amsterdam, 9 February 2015 - X5 Retail Group N.V. (‘X5’ or the ‘Company’), a leading Russian food retailer (LSE ticker: ‘FIVE’), announced today that Fitch Ratings (‘Fitch’) has assigned the Company Long-term foreign and local currency Issuer Default Ratings of 'BB' and a National Long-term Rating of ‘AA-(rus)’. The Outlooks for both ratings are Stable.

As stated in the rating agency’s press-release, ‘the ratings reflect X5’s strong market position and healthy operating performance in 2014, which we expect to continue in the medium term.

The ratings are supported by moderate leverage together with adequate financial flexibility thanks to limited FX risks, capex scalability and adequate near-term liquidity profile’. Fitch also noted that ‘X5 is well positioned to retain and improve its market position in the medium term.

The Company’s revenues and operating margins will not be negatively affected by consumers’ purchasing power erosion as a potential decrease in supermarket and hypermarket traffic will be offset by more frequent purchases at proximity stores. We also expect accelerated traffic migration to the largest retail chains, including X5, thanks to their better price proposition in comparison with traditional stores and small retailers.’

X5 Retail Group

X5 Retail Group is the leading multi-format food retailer in Russia. X5 shares are listed on the London Stock Echange (LSE) and Moscow Exchange in the form of Global Depositary Receipts under the ticker "FIVE". The Company operates several retail formats, including the chain of conveniently located proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand.