OREANDA-NEWS. January 20, 2011. 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 fourth quarter and full year of 2010.

Q4 2010 Highlights

FY 2010 Highlights

•           Consolidated net retail sales increased 35% year-on-year in RUR terms to RUR 106,265 mln or 32% in USD terms to USD 3,470 mln;

•           LFL sales up 10% on healthy discounter and improving supermarket trends;

•           Kopeyka December sales contributed RUR 6,589 mln or approx. 8% of X5's Q4 consolidated net retail sales growth;

•           Record 179 stores added organically in Q4 2010, including 160 soft discounters, 12 supermarkets, six hypermarkets and one convenience store;

•           Kopeyka transaction added a net 660 acquired stores, including 22 stores opened in December 2010. That excluded 27 stores closed to comply with FAS requirements and rights to about 20 Kopeyka stores in planning phase;

•           Net addition of 378,357(3' sq. m. of selling space;

•           FY 2010 RUR consolidated net retail sales grew 24% to RUR 341,596 mln or 30% in USD terms to USD 11,248 mln;

•           Kopeyka's December sales contributed

approx. 2% to X5's consolidated FY 2010 RUR net retail sales growth;

•           On a pro-forma basis, net retail sales of X5 and Kopeyka totaled RUR 396,221 mln or USD 13,047 mln for the year;

•           X5's LFL sales grew 7% in RUR terms year- on-year on 3% traffic growth;

•           1,097 stores added on net basis organically and through Kopeyka acquisition, including 353 soft discounters, 26 supermarkets, 13 hypermarkets, 45 convenience stores and 660 Kopeyka stores;

•           Net addition of 492,12213' sq. m. of selling

space for soft discounters, supermarkets, hypermarkets, convenience stores and Kopeyka stores;

X5 reiterates its 2011 Outlook as announced on 23 December 2010. The Company plans to open a record 540 new stores in 2011 to deliver gross sales in excess of RUR 500 billion, representing top- line growth of approx. 40%. We expect this increase to be driven by organic RUR net sales growth in the low 20 percent range on a higher base compared to 2010, with the remainder contributed by the Kopeyka acquisition.

Lev Khasis, X5 Retail Group CEO, commented:

"Q4 2010 was a milestone quarter for X5 marked by a 35% increase in RUR net sales. Growth was driven by a recovery in consumer spending, record store openings and the acquisition of Kopeyka to reinforce X5's number one position and complement our organic growth strategy. As a result, we successfully delivered on the Company's FY 2010 Outlook with consolidated net retail sales growth of 24% in ruble terms, or 22% excluding initial Kopeyka sales contribution.

"Soft discounters delivered healthy LFL sales growth of 13% in Q4 2010 against a very strong base last year. Supermarkets improved significantly with 11% LFL growth and a 9% year-on-year increase in basket supported by recovery in consumer spending. Supermarkets performance was boosted by surging LFL sales of acquired Paterson stores, following successful integration and rebranding earlier in the year. We continue to win customers by enhancing our assortment and restraining price growth to well below the level of official inflation.

"For the year we opened a record 437 stores organically, exceeding the Company's plan for 2010 while remaining below our CapEx limit. Only 12 stores were closed due to uneconomic performance, underscoring the quality and discipline of X5's expansion program to date.

"X5 begins 2011 in an excellent position to accelerate growth. We plan to significantly increase the pace of organic expansion with some 540 new store openings this year. This together with the Kopeyka acquisition should enable X5 to deliver in excess of RUR 500 billion in gross sales, representing top-line growth of approximately 40%."