2022
ANNUAL REPORT
UNAUDITED
Contents
Focus on customer | ||
X5 Club | ||
Paket | ||
2022 key highlights | 7 | |
Business model | 9 | Digital businesses |
Our formats | 11 | |
Russia's food retail market | 14 | X5 Digital |
Mnogo Lososya | ||
Strategic review | 5Post | |
26 | Food.ru | |
45 | Sustainable development | 77 |
45 | Sustainability strategy | 77 |
46 | Sustainability management | 83 |
Stakeholder engagement | 86 | |
Community | 88 | |
47 | Planet | 89 |
47 | Health | 100 |
50 | Employees | 102 |
51 | ||
54 |
02 Corporate Governance
Letter from the Chair | 109 | Supervisory and | 127 |
of the Supervisory Board | Management Boards | ||
Governance structure | 111 | Report of the | 130 |
How we manage risk | 119 | Supervisory Board | |
Remuneration Report | 137 |
03 Financial Statements
CEO and President's statement | 26 | |
Our strategy | 28 | Retail infrastructure |
Geography of operations | 29 | |
Leadership team | 31 | Logistics and transport |
56
56
Consolidated financial statements
Notes to the consolidated financial statements
150 | Notes to the Сompany | 222 |
financial statements | ||
155 | Other information | 240 |
Direct imports | ||
Review by formats | 32 | X5 Technologies |
Innovations | ||
Pyaterochka | 32 | |
Perekrestok | 36 | |
Chizhik | 40 | Financial review |
Karusel | 42 | |
Krasny Yar and Slata | 43 | Information on alternative |
performance measures |
60
61
63
64
73
Company financial statements 220
Annex
TCFD compliance | 242 |
statement and index |
2
01 Strategic Report
STRATEGIC REPORT | OVERVIEW | ABOUT THIS REPORT |
Overview
ABOUT THIS REPORT
X5 Group's 2022 Annual Report complies with UK and Russian Federation listing requirements, as well as the Dutch Corporate Governance Code. This report looks at our performance on a number of different aspects. It provides an analysis of our financial and operating performance, states our strategic goals and gives an overview of our ESG performance and priorities, which are discussed in greater detail in the 2022 Sustainability Report.
Report boundary and scope
This report covers the period from 1 January 2022 to 31 December 2022 and looks at X5 Group's business model and strategy, market and consumer trends, operating and financial performance, environmental, social and governance (ESG) achievements, and the results of key business units.
Key business units include Pyaterochka proximity stores, Perekrestok supermarkets and Chizhik hard discounter stores, as well as Krasny Yar and Slata, two chains in which X5 acquired a 70% stake in 2022. Our key digital businesses include express delivery and Vprok.ru, which operate under the X5 Digital business unit, as well as 5Post, Mnogo Lososya and Food.ru media platform. X5 Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). IFRS financial results in this report are presented according to IFRS 16 as well as old pre-IFRS 16 standards. Significant events after the reporting date are also covered in this report.
Alternative performance measures
Alternative performance measures (APMs) that are not defined or specified under IFRS requirements are also used in this report. These APMs provide important insights into our business performance. A glossary with explanations of how each APM is calculated, why we use it and how it can be reconciled to a statutory measure is provided on pages 73-76.
Assurance
The Supervisory Board, with the support of the Audit and Risk Committee, is responsible for X5 Group's internal controls to provide reasonable assurance against material misstatement and loss.
Materiality
The management of X5 Group determined the material issues to address in this report based on its understanding of stakeholder interests, the economic and competitive landscape in Russia, our business model, risks, and opportunities. Significant financial matters and material non-financial topics are all considered material issues.
The tools used to inform decisions about the material issues facing the Company include internal analysis and reporting mechanisms, market research, external polling and research, as well as feedback received directly from key stakeholders. X5's sustainability strategy, which was developed in line with the United Nations Sustainable Development Goals (UN SDGs) and was approved in 2019, was also used to select the Company's material issues.
Management believes that this report accurately covers how X5 Group interacts with and creates value for its stakeholders.
Financial and non-financial information
X5 Group's financial, operating and ESG performance is reviewed on a regular basis by the Company's management and Supervisory Board. Key areas of the Company's non-financial performance include innovation, consumer safety, environmental impact, investments in local communities, the provision of a safe and enriching workplace for our employees, business conduct, and supplier relationships.
Supervisory Board approval
The Supervisory Board of X5 Group has confirmed it believes this report provides a balanced overview of all material issues concerning the Company's performance for the reporting period, as well as an accurate reflection of its updated strategic goals. The Supervisory Board approved the 2022 Annual Report for publication on 31 May 2023.
4
STRATEGIC REPORT
OVERVIEW
OUR APPROACH, MISSION AND GOALS
Our approach, values and goals
Approach
We are confident that X5 Group can create value for a wide range of stakeholders by continuing to grow as a profitable, sustainable business. We believe that the key to success lies in always putting the customer at the centre of our decision-making, and in offering
Values
Our values provide guidance in our professional life and give us a road map for our decision-making. They help us to better understand one another, achieve success and derive satisfaction from working together. All of X5's business divisions share the same values.
high-quality modern food retail services both online and offline.
We are the market leader by size, and we aim to use this to drive positive change, strengthening and adapting our offline food retail formats, introducing innovative technologies to power digital services, and promoting good practices such as implementing сompany-wide programmes to support local communities, creating sustainable packaging standards and increasing the use of renewable energy.
Our sustainability strategy is aligned with the UN SDGs that we have identified as being most relevant to our business: Zero Hunger, Good Health and Well-being, Decent Work and Economic Growth, as well as Responsible Consumption and Production.
Respect
What does respect mean to us? It means acceptance of different opinions and the ability to establish dialogue and cooperation even when we disagree. It means mutual support and gratitude for assistance and effort.
WHAT THIS MEANS | We show respect when we are |
IN PRACTICE | involved in discussions, solving |
problems or providing feedback | |
We take into account the | |
interests, opinions and feelings | |
of our colleagues when making | |
decisions and when interacting | |
with one another | |
We help our colleagues, going | |
beyond the scope of our | |
responsibilities if necessary |
Customer-centric approach
This reflects a sincere desire to help, the ability to put oneself in the place of another person and the willingness to ask what would be better for them, what they would like to receive. We look out for one another, and that helps us do our job right the first time.
We look for solutions that meet the customer's¹ needs
In any situation, we put ourselves in the position of the customer
We build long-term relationships with customers
Honesty and integrity
When we speak openly and from the heart. We talk about problems and challenges honestly. We're not afraid to make mistakes; instead, we learn from them. We protect our reputation and that of the Company.
We abide by our agreements
We give our co-workers information in full
We have zero tolerance for corruption
Desire for achievement
When we see new opportunities and new growth points in everything we do. When we derive satisfaction from bold, ambitious goals.
We set ambitious goals for ourselves that require a substantial effort to achieve
We take responsibility for our actions and do not shift blame onto others
We commend our co-workers for their achievements and allow them to make mistakes
1 Customers are not just patrons at our stores but also our co-workers. | 5 |
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X5 Retail Group NV published this content on 31 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 May 2023 15:49:18 UTC.