I believe X5's strongest qualities are its long-term strategic focus, consistent delivery of results and ability to manage and respond to change. These qualities were prominently on display this year as the Company met its growth targets and emerged from the economic downturn as the unrivalled number one leader in the Russian retail market.
X5's continued investment in customer value during the downturn was rewarded with increased traffic and a healthy surge in sales as consumer confidence recovered toward the end of 2010. X5 also learned to be a more efficient retail operator and further strengthened its logistics, IT infrastructure and business processes to enhance its competitive advantages and manage growth effectively for the future.
The Board oversaw the execution of X5's stepped-up growth plans in 2010, including a record organic expansion programme and the acquisition of Kopeyka. We expect these investments to generate substantial value for shareholders. The Board also monitored X5's efforts to refinance the balance sheet, maintain CapEx discipline and implement efficiency measures.
In March 2011 Lev Khasis resigned as CEO after a successful five-year tenure during which the Company more than quadrupled in size. We would like to thank Lev for his hard work and outstanding contributions to X5's organisation, shareholders and customers and we wish him great success in his future endeavors.
The Board elected Andrei Gusev as successor with immediate effect and recommended his appointment as Chief Executive Officer to the Annual General Meeting of Shareholders. Andrei Gusev has been part of X5's executive team for five years. The Board is confident that X5 will sustain its growth as the dominant player in Russian retail under his leadership.
X5 is also delighted to welcome Kieran Balfe as our Company's new Chief Financial Officer with effect from February 2011. He has almost two decades of management experience in Russia, and will contribute invaluable global consumer industry expertise and operational best practice knowledge. He succeeds Evgeny Kornilov, who prior to stepping down as CFO in October, continuously demonstrated the value and importance of this position for X5.
Finally, I would especiable like to thank the nearly 90,000 associates of X5 without whom last year's performance could have never been achieved.
Russia is one of the world's most promising consumer markets. Macro-economic conditions have clearly improved and consumers are trading up, although inflation remains a concern. X5 has successfully navigated the changing environment and is positioned to remain the dominant player in the Russian retail sector.
Hervé Defforey