About X5 Retail Group N.V.

X5 Retail Group N.V., a holding company, engages in the development and operation of grocery retail stores. The company operates a retail chain of soft-discount and supermarket stores under the brand names ‘Pyaterochka’ and ‘Perekrestok’ in major population centers in Russia, including Moscow, St. Petersburg, Nizhniy Novgorod, Krasnodar, Kazan, Samara, Chelyabinsk, Ekaterinburg and Kiev, Ukraine. As of December 31, 2007, the company operated 868 stores, including 674 soft discount stores, 179 supermarkets and 15 hypermarkets located primarily in the European part of Russia and the Urals, with total net selling space of approximately 609,210 square meters. Its franchisees operated 688 stores in Russia and Kazakhstan. The company’s soft discount stores offer, on average, 3,500 food and non-food SKUs. Its supermarkets offer, an average, 15,000 different food and non-food products. Its hypermarkets are divided into two segments: compact hypermarkets and full size hypermarkets. Compact hypermarkets offer, on average, 30,000 different food and non-food SKUs, while full size hypermarkets offer between 40,000 and 60,000 SKUs. The company operates 14 compact hypermarkets and one full size hypermarket. The company contracts with third parties to produce private label goods, which it then sells through its soft discount stores, supermarkets and hypermarkets. Significant Events The company and Aptechka Shopping Chain have reached an agreement to establish a JV for promotion of a pharmacy chain on commercial sites of Pyaterochka and Perekrestok stores. In April 2009, X5 Retail Group N.V. announced that it has opened a new hypermarket Karusel in the Moscow district Teply Stan. Area of the store reaches 7,000 square metres. The assortment includes 25,000 names and 70% of them fall at foodstuffs. In July 2009, X5 Retail Group N.V. announced the opening of its first national non-food distribution center (DC). The distribution center is located in the Moscow area and has storage capacity of 23 thousand square meters. In September 2009, X5 Retail Group N.V. has opened the Perekrestok supermarket in Ekvator TTS in Reutov (the Moscow region). Its total area is 1,600 square meters, sales area - about 900 square meters. On October 14, 2009, X5 Retail Group N.V. announced that it has launched a project to develop the company's online platform. X5 has entered into a joint venture agreement with experienced Internet retailers and owners of online stores www.bolero.ru and www.003.ru. Bolero.ru and 003.ru are major Internet stores that have been building their presence in the Russian E-commerce market. In December 2009, X5 Retail Group N.V. and Swiss chain Perfumes Planet Switzerland (PPS) has signed a partnership agreement. In accordance with the agreement, PPS and X5 would set up a joint venture that would develop perfume selling points adjacent to X5's food retail stores in Moscow, Saint-Petersburg, Nizhny Novgorod and respective regions. Competition The company identifies competition from Metro; Magnit; Auchan; Lenta; Kopeyka; Dixy Megamart; Minimart; Seventh Continent; Viktoria; O’Key; Ramstore; Karusel; and Mosmart.