X5 Retail group – MOODY’S CHANGES OUTLOOK TO POSITIVE
Amsterdam, 19 July 2007 – Moody’s Investors Service today 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.
The change in outlook recognises
- X5’s strengthened positions in the Russian food retail market as reflected in the company’s 2006 strong operating results, following the
- 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.”
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Enquiries to:
X5 Retail Group N. V.
Gennady Frolov
Head of Corporate Communications
Office +7 ext. 10130
Mobile +7
Email gennady. frolov@*****
Note to Editors:
X5 Retail Group N. V. is Russia's largest food retailer in terms of sales. As of 30 June 2007, the Group had 539 company-managed "Pyaterochka" soft discount stores located in the Moscow (241), St. Petersburg (223) and other Russian areas (75), and 170 company managed "Perekrestok" supermarkets across Central Russia and Ukraine, including 98 stores in Moscow.
As of 30 June 2007, franchisees operated 591 Pyaterochka branded stores across Russia and Kazakhstan. Perekrestok had 10 stores operated by franchisees in the Moscow area.
Pyaterochka and Perekrestok have merged their operations as of 18 May 2006 to create the clear leader in the Russian food retail market.
The Group’s audited pro-forma net sales for the FY 2006 were US $3,551 million, up +50% vs. 2005. Pyaterochka chain provided US $1,973 million of net sales, the Perekrestok chain contributed US $1,496 million of net sales, and Merkado chain contributed US $ 82 million.
Forward looking statements:
This announcement includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as” anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal” believe”, or other words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N. V.'s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.
Any forward-looking statements made by or on behalf of X5 Retail Group N. V. speak only as at the date of this announcement. Save as required by any applicable laws or regulations, X5 Retail Group N. V. undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.
