22 March 2018

X5 streamlines logistics operations in Volga Federal District

Ufa, 22 March 2018 – X5 Retail Group N.V. ("X5" or the "Company"), a leading Russian food retailer (LSE and MOEX ticker: "FIVE"), announces the development of its logistics infrastructure in the Volga Federal District and the opening of its first distribution centre (DC) in Ufa, Republic of Bashkortostan.

The 24,500 sq m logistics facility will cover all Pyaterochkas in the Republic of Bashkortostan (currently 260 stores). Featuring five storage zones, each with a specific temperature band, the Ufa DC is designed to accommodate nearly all categories of goods.

With the new multi-category logistics facility, products will always be fresh and available as Pyaterochka continues its active expansion, and local producers will have new opportunities. The Ufa DC will be the focal point for them as it helps to ramp up their sales and bring their products to other regions. At its full capacity, the DC will be able to process and handle products from more than 360 local suppliers.

Local suppliers account for 17% of the product mix in Pyaterochka stores in Bashkortostan, with this share due to increase to 25% in the coming months. At present, Pyaterochka sells products from over 50 suppliers from Bashkortostan. Last year, the product mix of X5 Retail Group was enhanced with products from 166 new suppliers from the Volga Federal District, including 11 new producers from Bashkortostan.

After the opening ceremony, the Ufa DC played host to the X5 Dialogue Forum, which brought together over 70 suppliers. They listened to X5 Retail Group representatives, who shared X5’s best practices in dealing with local suppliers and food producers. Local manufacturers received valuable advice on how to build relationships with retail chains, including information on product quality controls and requirements for transportation, storage, sales and disposal of food products set out in the Customs Union’s and X5’s applicable technical regulations.

The new logistics facility increased the number of jobs offered by the Pyaterochka retail format in Bashkortostan to 3,000. Non-stop operation of the Ufa DC will be supported by 140 local residents.