X5 Retail : Quarterly Earnings Document

X5.RU 01

X5 reports 19.2% revenue growth in Q2 2023

7.8% adj. EBITDA margin pre-IFRS 16

+19.2% y-o-y		+83.7% y-o-y
Revenue growth in Q2 2023		Digital business (express
driven by solid like-for-like (LFL)1 sales		delivery, Vprok.ru, 5Post and
and selling space expansion		Mnogo Lososya) net sales
		growth in Q2 2023
		Digital business net sales amounted to
		RUB 27.0 billion, which comprised 3.5% of
		consolidated Q2 2023 revenue.

24.4% -137 b.p.

Gross margin under IFRS 16 in Q2 2023

(-139b.p. to 24.1% pre-IFRS 162)

driven by the aggressive expansion of the Chizhik hard discounter format into regional markets, the consolidation of Krasny Yar and Slata, as well as the transformation of Pyaterochka's CVP

11.9%	-212 b.p.		3.4%	-72 b.p.	2.71x
Adjusted EBITDA3 margin	Net profit margin under		Net debt/EBITDA ratio under
under IFRS 16 in Q2 2023	IFRS 16 in Q2 2023				IFRS 16 as of 30 June 2023
(-179b.p. to 7.8% pre-IFRS 16)	(-11b.p. to 3.8% pre-IFRS 16)				(vs. 2.58x as of 31 December
						2022)

(1.10х as of 30 June 2023 vs. 1.02х as of 31 December 2022 pre-IFRS 16 )

Amsterdam

15 August 2023

X5 Retail Group N.V. ("X5" or the "Company", LSE and MOEX ticker: FIVE), a

leading Russian food retailer that operates the Pyaterochka, Perekrestok and Chizhik retail chains, today released its interim report for the three months (Q2) and six months (H1) ended 30 June 2023, in accordance with IAS 34

"Interim Financial Reporting" as adopted by the European Union. The interim report has been reviewed by the Company's independent auditor but has not

been audited.

Igor Shekhterman

X5 Chief Executive Officer

During the first half of 2023, X5 focused on adapting its customer value proposition while continuing to pursue its dynamic expansion on the domestic grocery market. Our current priority is developing and expanding our Pyaterochka proximity stores and Chizhik hard discounters as well as improving efficiency and transforming the existing store base of our Perekrestok supermarket format to increase like-for-like sales. In Q2 2023, X5 demonstrated strong revenue growth of 19.2%, driven both by organic development and M&A.

We continued to develop our Pyaterochka proximity store network and adapt its CVP to changing market conditions, including by expanding the low-price segment that has proven attractive to our customers. This and other measures have resulted in traffic gains, with Pyaterochka's like-for- like traffic increasing by 7.2% year-on-year in Q2 2023.

1. LFL comparisons of retail sales between two periods are comparisons of retail sales in local currency (including VAT) generated by the relevant stores. The stores that are included in LFL comparisons are those that have operated for at least 12 full months. Their sales are included in LFL calculations starting from the day of the store's opening. We include all stores that fit our LFL criteria in each reporting period. Express delivery sales from stores and dark stores that have operated for less than 12 full months are also included in LFL calculations.
2. Pre-IFRS16 financial measures are calculated by adjusting the applicable IFRS measures to include fixed lease expenses and fixed non-lease components of lease contracts, and to exclude any gain on derecognition of right-of-use assets and lease liabilities, depreciation of right-of-use assets and interest on lease liabilities, and gain/loss from asset sale and leaseback operations for the proportion of rights retained as recognised under IFRS 16.
3. Adjusted EBITDA is EBITDA before costs related to the LTI programme, share-based payments, other one-off remuneration payment expenses and the impact of the Karusel transformation.

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In a major milestone during the reporting period, Pyaterochka launched operations in the Russian Far East, becoming the first nationwide food retailer to establish a presence in this territory.

In line with our strategy, we continued the active expansion of our Chizhik hard discounter format. The expansion of this format serves an important social function by providing a wide range of customers with access to affordable, high-quality food, while creating new jobs and expanding opportunities for local suppliers. At the end of Q2 2023, Chizhik had 809 stores across 27 regions of Russia, with plans to accelerate the rate of new store openings in H2 2023.

Our strategic priorities for Perekrestok include revamping our CVP to focus on the supermarket's unique assortment and presence in large cities, and prioritising LFL growth over new store openings. Perekrestok is particularly attractive to customers on the go thanks to its varied assortment of fresh and ultra-fresh products, take-out and dine-in meal options, and basics covering all customer needs through both private labels and branded products. Our new store formats also feature a high level of service and a pleasant ambiance that transform the shopping experience. We aim to drive sales growth by focusing on Perekrestok's online services, particularly express delivery.

X5's digital businesses posted solid growth in Q2

2023, with net sales increasing by 83.7 % year-on-year and accounting for 3.5% of consolidated revenue for the quarter. We continue to actively develop our express delivery services, both internally through our retail stores and dark stores, and externally through partnerships with leading delivery aggregators. The number of online orders increased 2.8x year-on-year in Q2 2023. During this period, we launched a joint

pilot project between Avito Delivery, a leading Russian online classified ads platform, and X5's e-commerce

delivery service 5Post to offer parcel drop-off and pick-up options at select 5Post locations. The pilot may be scaled up in the future to enable customers to drop off and collect Avito orders at more than 13,000

additional pickup points and more than 5,000 multi- parcel lockers located in X5's Pyaterochka and

Perekrestok retail chain stores.

A key driver of customer engagement is our unified loyalty programme, X5 Club, which enables customers

to earn and redeem bonus points for various X5 Group

services on a single platform. In Q2 2023, X5 Club was expanded to include X5's express delivery services,

the ready-to-eat digital service Mnogo Lososya, and the online media platform Food.ru. As of June, our loyalty programme counted more than 72 million members, while its sales penetration reached 76%. We plan to further develop the loyalty programme as part of our aim to drive new efficiency gains, create a highly tailored customer experience and offer better insights into customer needs.

In parallel to pursuing business expansion through organic growth, in Q2 2023 X5 secured an agreement to acquire Tamerlan, the operator of three retail chains in southern Russia. This acquisition will enable us to expand our presence in this region, while giving local customers more opportunities to benefit from the wide selection and affordable prices at X5 stores. We will maintain our strategy of seeking attractive inorganic growth opportunities as market conditions continue to evolve.

Throughout this time, X5 has remained committed to its sustainability strategy as guided by the UN Sustainable Development Goals, with food security becoming a primary focus. In June 2023, the Company

published its third annual Sustainability Report. Among the report's key highlights, X5 collected and

distributed more than 518 tonnes of food to approximately 199,000 people in need through the Basket of Kindness food drive in 2022. And in July of this year, X5 marked the one-year anniversary of its food-sharing initiative, which saw the Company donate

more than 13 tonnes of food to more than 26,000 people in the project's first 12 months of operation.

Moving forward, we plan to scale up our food assistance programmes while continuing our work to reduce the environmental impact of our operations.

I would like to express my gratitude to our partners and investors for their continued trust and cooperation during the current challenging

environment. I would also like to extend my appreciation to all of X5's employees, who have shown

flexibility and dedication as we work to adjust quickly

to meet customers' needs. This effort forms the

foundation of our customer-focused approach, and drives our continued success as the domestic food retailer of choice.

X5.RU 03

Profit and loss statement highlights4

		IFRS 16			Pre-IFRS 16
			change,			change,
RUB mln	Q2 2023	Q2 2022	y-o-y, % or	Q2 2023	Q2 2022	y-o-y, % or
		multiple			multiple
Revenue	772,043	647,950	19.2	772,043	647,950	19.2
incl. net retail sales5	768,609	646,164	18.9	768,609	646,164	18.9
Pyaterochka (incl. express delivery)	616,986	534,319	15.5	616,986	534,319	15.5
Perekrestok (incl. express delivery)	100,401	95,345	5.3	100,401	95,345	5.3
Chizhik	26,586	6,818	4x	26,586	6,818	4x
Gross profit	188,394	167,016	12.8	185,835	164,957	12.7
Gross profit margin, %	24.4	25.8	(137) b.p.	24.1	25.5	(139) b.p.
Adj. EBITDA	92,086	91,013	1.2	60,512	62,376	(3.0)
Adj. EBITDA margin, %	11.9	14.0	(212) b.p.	7.8	9.6	(179) b.p.
EBITDA	92,446	90,152	2.5	60,872	61,515	(1.0)
EBITDA margin, %	12.0	13.9	(194) b.p.	7.9	9.5	(161) b.p.
Operating profit	52,700	51,578	2.2	41,169	41,519	(0.8)
Operating profit margin, %	6.8	8.0	(113) b.p.	5.3	6.4	(108) b.p.
Net profit	26,307	26,762	(1.7)	29,489	25,442	15.9
Net profit margin, %	3.4	4.1	(72) b.p.	3.8	3.9	(11) b.p.

1. Please note that, in this and other tables and in the text of this press release, immaterial deviations in the calculation of % changes, subtotals and totals are due to rounding.
2. Net retail sales represent revenue from the operations of X5-managed stores net of VAT. This number differs from revenue, which includes proceeds from wholesale operations, direct franchisees (royalty payments) and other revenue. Including Mnogo Lososya, Vprok.ru, Krasny Yar and Slata

X5.RU 04

		IFRS 16			Pre-IFRS 16
			change,			change,
RUB mln	H1 2023	H1 2022	y-o-y, % or	H1 2023	H1 2022	y-o-y, % or
		multiple			multiple
Revenue	1,468,407	1,252,180	17.3	1,468,407	1,252,180	17.3
incl. net retail sales6	1,462,090	1,247,940	17.2	1,462,090	1,247,940	17.2
Pyaterochka (incl. express delivery)	1,165,898	1,023,512	13.9	1,165,898	1,023,512	13.9
Perekrestok (incl. express delivery)	201,843	191,910	5.2	201,843	191,910	5.2
Chizhik	45,330	10,917	4x	45,330	10,917	4x
Gross profit	355,625	317,446	12.0	350,784	313,429	11.9
Gross profit margin, %	24.2	25.4	(113) b.p.	23.9	25.0	(114) b.p.
Adj. EBITDA	163,009	161,192	1.1	100,748	104,908	(4.0)
Adj. EBITDA margin, %	11.1	12.9	(177) b.p.	6.9	8.4	(152) b.p.
EBITDA	162,637	159,708	1.8	100,376	103,424	(2.9)
EBITDA margin, %	11.1	12.8	(168) b.p.	6.8	8.3	(142) b.p.
Operating profit	83,216	77,768	7.0	60,501	58,625	3.2
Operating profit margin, %	5.7	6.2	(54) b.p.	4.1	4.7	(56) b.p.
Net profit	36,003	29,261	23.0	41,661	30,464	36.8
Net profit margin, %	2.5	2.3	12 b.p.	2.8	2.4	40 b.p.

6. Net retail sales represent revenue from the operations of X5-managed stores net of VAT. This number differs from revenue, which includes proceeds from wholesale operations, direct franchisees (royalty payments) and other revenue. Including Mnogo Lososya, Vprok.ru, Krasny Yar and Slata

X5.RU 05

Revenue

Revenue growth reached 19.2% year-on-year in Q2 2023. Net retail sales increased by 18.9%, driven by a combination of 10.4% selling space growth and 7.8% LFL sales growth, while X5's digital business sales grew by 83.7% y-o-y.

Selling space by format, square metres (sqm)

			CHANGE		CHANGE Y-O-Y, %
	AS AT 30-JUN-23	AS AT 31-DEC-22	VS 31-DEC-22, %	AS AT 30-JUN-22
	OR MULTIPLE
			OR MULTIPLE
Pyaterochka	7,899,872	7,497,056	5.4	7,271,291	8.6
Perekrestok	1,067,171	1,085,496	(1.7)	1,107,702	(3.7)
Chizhik	239,559	152,370	57.2	44,129	5x
Joint dark stores	10,258	8,087	26.8	5,358	91.5
X5 Group7	9,541,021	9,107,479	4.8	8,643,579	10.4

Q2 and H1 2023 LFL store performance by format, % change y-o-y

In Q2 2023, LFL sales increased by 7.8% year-on-year,supported by Pyaterochka's and Perekrestok's solid LFL results of 8.5% and 4.6%, respectively.

LFL traffic was the main driver of LFL sales in Q2 2023, with the LFL basket in positive territory at 1.1% year-on-year.

		Q2 2023			H1 2023
	SALES	TRAFFIC	BASKET	SALES	TRAFFIC	BASKET
Pyaterochka	8.5	7.2	1.2	7.8	5.6	2.0
Perekrestok	4.6	2.3	2.3	4.3	1.8	2.5
X5 Group8	7.8	6.6	1.1	7.2	5.2	1.9

For more details on net retail sales performance, please refer to X5's Q2 2023 TradingUpdate.

Gross profit margin

Gross profit margin under IFRS 16 decreased by 137 b.p. year-on-year to 24.4% (down 139 b.p. year-on-year to 24.1% pre-IFRS 16) in Q2 2023, mainly due to the aggressive expansion of the Chizhik hard discounter format into regional markets, the consolidation of Krasny

Yar and Slata, as well as the transformation of Pyaterochka's CVP.

Gross profit margin for H1 2023 decreased by 113 b.p. under IFRS 16 (down 114 b.p. pre-IFRS 16) due to the increasing share of the hard discounter format in revenue, the consolidation of Krasny Yar and Slata, as well as the transformation of Pyaterochka's CVP.

1. Including Vprok.ru dark stores, Mnogo Lososya dark kitchens, and Krasny Yar and Slata stores.
2. Excluding Krasny Yar and Slata, Vprok.ru and Mnogo Lososya; including Chizhik.