OREANDA-NEWS. On July 19, 2007 Moody’s Investors Service changed the outlook on the B1 corporate family rating of X5 Retail Group N.V. (LSE:FIVE), Russia’s leading food retailer in terms of sales, to positive from stable, reported the press-centre of X5 Retail Group N.V.

The change in outlook recognizes.

X5’s strengthened positions in the Russian food retail market as reflected in the company’s 2006 strong operating results, following the swift execution of the merger last year of Perekrestok and Pyaterochka

its improved ability to benefit from this rapidly growing market

the company’s intention to de-leverage its business starting from this year as planned.

In its report Moody’s stated “…X5’s ambitious growth plans should strengthen its leading position in the discount and supermarket markets amidst a still very fragmented Russian market. Given its strong positions in Moscow and St. Petersburg and good presence in promising regional markets supported by a competitive product offering and a tightly controlled efficient supply chain, the company plans to grow without a significant deterioration in margins and increase its operating cash flow generation ability.”

Moody’s also states that further upward rating pressure could result from the company’s ability to de-leverage its balance sheet while maintaining its planned growth rate.

Commenting on the Moody’s report Vitaliy Podolskiy, Group CFO, said:

“We are delighted to see another upgrade in our credit rating outlook. This is the second upgrade in two weeks, following the recent announcement by Standard & Poor’s.  These ratings’ reviews reflect our excellent operating results and demonstrate the confidence of the investment community in the quality of our management in this period of rapid growth and changes.”