Pharmacy pick-up points to open at Pyaterochka stores

Moscow, 3 June 2019 – X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: "FIVE"), announces the signing of an agreement between X5 OMNI, developing the Group's parcel delivery technology platform, and Medexport – Severnaya Zvezda and Zdravservis, members of the Integrated Retail Investment Strategies (IRIS) pharmacy partnership.

The parties have agreed to open 950 pharmacy pick-up points at Pyaterochka stores by the end of 2025. X5 will offer long-term lease agreements to Medexport – Severnaya Zvezda and Zdravservis to open pharmacies that will enable the pick-up of packages. Pharmacy orders will be delivered to pick-up points through X5's sorting centres using the company's extensive logistics network.

Oleg Milyutin, CEO of Medexport – Severnaya Zvezda: "This partnership between regional pharmacy chains and X5 Retail Group is an excellent opportunity to create a superior value proposition for our customers. By opening pharmacy pick-up points at Pyaterochka stores we respond to major demands of today's marketplace. First of all, the pharmacies and stores will be conveniently located in one place. Secondly, drawing on the strengths of regional players we are able to offer the best value and product range at each location, and supplement these by providing access to the endless shelf of e-commerce."

Dmitry Sokol, Chairman of the Board of Directors at Zdravservis: "The new value proposition benefits from the terms of partner lease agreements offered by X5 Retail Group. As part of the project, we are planning to relocate a great number of our existing pharmacies to nearby Pyaterochka stores. We have also agreed that X5 will extend similar preferential terms to all IRIS members."

Igor Pletnev, Director for Strategic Business Development at X5 Retail Group: "While opening our own pharmacies is not part of the Group's business strategy, we nevertheless believe that having pharmacies at the stores provides extra convenience to our customers. To this end, the agreement with IRIS is an opportunity to greatly increase the number of pharmacies available to our customers while also boosting the development of our parcel delivery platform."

X5 OMNI seeks to build a nationwide package delivery network by leveraging the potential of X5 retail stores and logistics capabilities. Some 2,400 stores already have pick-up points with about 7,000 parcels received by customers on a daily basis. One of the key objectives is to employ X5's extensive logistics infrastructure for deliveries from small-scale regional producers and online stores. Local businesses will be able to ship orders to customers at the nearest X5 store. By the end of 2020, parcel delivery services will be available at most X5 stores.

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