OREANDA-NEWS. July 13, 2010. X5 Retail Group N.V., Russia's largest retailer in terms of revenue (LSE ticker: “FIVE”), announced its retail sales and operational performance for the second quarter and first half of 2010.

Q2 2010 Highlights

H1 2010 Highlights

Net retail sales increased 18% year-on-year in RUR terms to RUR 79,757 mln or 26% in USD terms to USD 2,638 mln;

X5’s LFL sales grew 4% in RUR terms year-on-year, supported by 2% traffic growth;

Discounters’ customer traffic increased 6%, driving Pyaterochka’s LFL sales growth of 11% year-on-year;

73 stores added on net basis in Q2 2010, including 72 soft discounters, two hypermarkets and one net store closure for supermarkets; in addition 42 convenience stores added via gaining operational control of Express Retail;

Net addition of 29 thousand sq. m. of selling space for discounters, supermarkets and hypermarkets; convenience stores added up another nine thousand sq.m. of selling space;

Net retail sales increased 19% year-on-year in RUR terms to RUR 155,510 mlnor 31% in USD terms to USD 5,172 mln;

X5’s LFL sales grew 5% in RUR termsyear-on-year on the back of 2% traffic growth;

Discounters’ customer traffic increased7%, driving Pyaterochka’s LFL sales growth of 14% year-on-year;

100 stores added on net basis in H1 2010,including 96 soft discounters and four hypermarkets; in addition 42 convenience stores added via gaining operational control of Express Retail;

Net addition of 51 thousand sq. m. of selling space for discounters, supermarkets and hypermarkets;

convenience stores added up another

As at 30 June 2010 X5 operated 1,514 stores (1,123 thousand sq. m.), including 1,135 soft discounters, 275 supermarkets, 62 hypermarkets and 42 convenience stores;

 2010 sales growth outlook as provided on 27 May 2010 reiterated. Actual top line performance will be largely dependent on inflationary trends and the timing of a recovery in the consumer spending.

(1) Numbers provided in this press-release are preliminary and unaudited.

Lev Khasis, X5 Retail Group CEO, commented:

“We are pleased that X5’s discounters once again delivered the strongest performance in the format. Double-digit LFL growth of 11% amid drastically lower food inflation exceeded our expectations, especially when compared to the strong second quarter last year driven by the tremendous success of Pyaterochka’s new pricing policy. Discounters also delivered commendable LFL sales growth of 16% in the regions in Q2 2010 as Pyaterochka made significant progress in attracting consumers outside of Moscow and St. Petersburg.

During current uneasy economic environment X5 is keeping its focus on constant enhancement through targeted price campaigns, promotions featuring unique offerings, continuous assortment improvement, and upgrades to loyalty card programs. Hypermarkets are already demonstrating positive LFL sales growth and we believe supermarkets upturn is coming, fuelled by our actions and expected economic recovery. Paterson stores have been successfully integrated and re-launched, which led to positive LFL growth closer to the end of the second quarter. All of these factors, coupled with increasing new store openings and solid momentum demonstrated by discounters, make us confident in our outlook for 2010 top line growth.”