Х5 Retail Group Is a Leading Multi-Format Modern Retailer That Is Developing and Managing a Portfolio of Retail Brands, Each with a Distinct Value Proposition

Х5 Retail Group today

Х5 Retail Group is a leading multi-format modern retailer that is developing and managing a portfolio of retail brands, each with a distinct value proposition

Moscow 2018 Х5 RETAIL GROUP TODAY 02 History

Issuance of Eurobonds with the X5 buys a network of hypermarkets total value of RUB 20 bln "Karusel” (2008), supermarket chain "Paterson” (2009) and store chain Approval of dividend policy with Listing of Pyaterochka GDRs "Kopeyka” (2010) a target payout ratio of at least on London Stock Exchange 25% of the Group’s consolidated net profit Alfa Group founds chain The launch of ambitious “Perekrestok” (the first renovation programmes at X5 reaches market share of store opened in Moscow) “Pyaterochka” and "Perekrestok” 9.5% in 2017

1995 1999 2005 2006 2008–2010 2013 2016 2018

“Pyaterochka” and "Perekrestok” Strategic milestone of merge, the new company is market leadership reached named X5 Retail Group

The chain Start of transformation "Pyaterochka” is founded (the transition to a balanced Listing on Moscow Exchange (the first store opened in multi-format operating St. Petersburg) model) Х5 RETAIL GROUP TODAY 03 Key highlights

over

13,685 20 years

stores on the food retail as of 30 September 2018 market in Russia

ths. 6,155 sq. m 1.18 bn

total selling space customer visits in Q3 2018 as of 30 September 2018

RUB RUB 372.9 bn 1,286.9 bn USD USD 5.7 bn 22.1 bn net retail sales in Q3 2018 net retail sales in 2017

Average dollar in 2017 : 1USD = 58.3529 RUB Average dollar in Q3 2018: 1USD = 65.5323 RUB Х5 RETAIL GROUP TODAY 04 Financial highlights

Revenue dynamics, RUB bn Gross profit & gross margin

CAGR 2012—2017: 21.4% CAGR 2012—2017: 21.7% CAGR 2015—2017: 26.5% 1,295.0 (+25.3%) CAGR 2015—2017: 24.8% 24.5% 24.2% 1,033.7 23.9% 24.4% 24.5% 808.8 23.6% 633.9 308.9 (+23.6%) 491.1 534.6 250.0 198.4 115.8 130.3 155.0

2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017

Gross profit, RUB bn Gross margin, %

Adjusted EBITDA & adjusted EBITDA margin* Capital expenditure, RUB bn 98.6 (+22.3%) CAGR 2012—2017: 23.1% CAGR 2012—2017: 27.6% 80.7 CAGR 2015—2017: 29.2% CAGR 2015—2017: 17.8% 71.1 7.7% 7.7% 7.1% 7.2% 7.3% 7.3% 34.4 99.1 (+24.7%) 29.2 79.5 22.6 59.4 35.1 38.4 46.4

2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017

Adjusted EBITDA, RUB bn Adjusted EBITDA margin, %

* Adjusted for accrued LTI payment Source: X5 data Х5 RETAIL GROUP TODAY 05 Shareholders’ highlights

Ownership structure

40.6% 47.9% 48% 11% 41% 0.1% CTF Holdings S.A. Intertrust Trustees Free Float X5’s Directors and Treasury shares 11.4%

Market capitalisation

mln LSE 67.9 shares 6 431 and equivalent to mln MOEX 271.6 GDRs 3 366 dual listing of share capital Jan-15 Oct-15 Jul-16 Apr-17 Jan-18 GDRs Market capitalisation, USD mln Х5 RETAIL GROUP TODAY 06 Federal scale of operation

St Petersburg 64 40 Vologda Moscow regions DCs of presence Nizhny Novgorod

Voronezh

Kazan Tyumen

Ekaterinburg Krasnoyarsk Rostov-on-Don Samara * Novosibirsk ths. 3,293 255.6 Abakan

company-owned employees trucks

* Including outstaffing * As of 30 September 2018 Х5 RETAIL GROUP TODAY 07 Regional presence

• Multi-format presence in seven Federal Districts • Total stores – 13,685, including: ─ 12,822 Pyaterochka ─ 712 Perekrestok ─ 92 Karusel ─ 59 Express stores

North North Format Unit Southern Central Volga Ural Siberian Total Caucasus Western

208 1,047 5,085 3,506 1,477 1,075 424 12,822

Number of 9 37 418 117 89 42 0 712 stores, #

1 5 37 24 18 7 0 92

Distribution Number of 0 3 16 9 5 6 1 40 centres centres, # Net retail sales 0.9% 5.3% 53.2% 18.7% 14.4% 6.2% 1.2% 100.0% (9M 2018), %

* As of 30 September 2018 Х5 RETAIL GROUP TODAY 08 Impressive growth rates

Revenue growth y-o-y,%

30.7% 27.8% 30 27.5% 26.7% 26.8% 25.9% 26.5% X5 Retail Group 24.7% 25 Russian food retail market 23.0% 20 19.9% 19.3%

17.6% 15

5 6.0% 5.6% 3.8% 5.1% 5.1% 3.5% 3.6% 3.6% 3.4% 3.1% 0 1.9% 1.3% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2015 2016 2017 2018

Source: X5 data, Rosstat Х5 RETAIL GROUP TODAY 09 Strategic goal

Strategic Х5 seeks to maintain its priorities: — New level of customer-centricity market leadership in the based on a deeper knowledge of the client, using big data and a new Russian food retail market level of service — Cost optimisation and process in terms of revenue and to efficiency — Balanced organic growth achieve sector-leading — Implementation of modern technologies and innovations valuation metrics — Development of self-regulation practices among participants of the Russian consumer market Х5 RETAIL GROUP TODAY 10 Fair partnership

The company seeks to over 5,000 build long-term and 1,050 trust-based relations with all of its suppliers new suppliers business partners From Russia, CIS, Europe, in 2017 Asia, Africa, Latin America

Support of Russian Relying on the Code of manufacturers Interaction with Business Partners, which sets forth through the placement the market's best fair play of private label orders practices and principles of ethical cooperation Х5 RETAIL GROUP TODAY 11 Focus on Customer loyalty

Number of mln mln mln customers 2,881 365 97 in 9М 2018 in 9М 2018 in 9М 2018

• Over 56 mln cards issued • Over 18 mln cards issued • Over 7 mln cards issued Loyalty • Over 24 mln active users • Over 4 mln active users • Over 2 mln active users program • 42% traffic penetration • 45% traffic penetration • 72% traffic penetration • 57% retail sales penetration • 60% retail sales penetration • 89% retail sales penetration

• Understanding of motivations, buying behaviors and purchase histories creates an ability to provide a more NPS satisfying customer experience - Personalized promo - Optimization of assortment

LFL • Increasing foot traffic though improved offers and promotions • Increasing number of repeat visitors by maintaining loyalty memberships and consistently creating value for traffic customers

LFL • Building transaction size by deeper engagement and increasing share of wallet ticket - Engaging customers across multiple channels, including email, SMS messages, mobile applications and social media Our retail formats Х5 RETAIL GROUP TODAY 13 Our retail formats: “Pyaterochka”

Proximity store with convenient location for ~79.9% daily shopping Share of X5's Q3 2018 net retail sales

Unique loyalty programme with personalised offers, attractive weekly promotions and reasonable prices Attractive promotions to encourage proximity customers to save stores more Constant adaptation of CVP to local demand

* as of 30 September 2018 Х5 RETAIL GROUP TODAY 14 “Pyaterochka” today: key highlights

ths. 12,822 5,035 sq. m 393 sq. m stores selling space avg. selling space

as of 30 September 2018 as of 30 September 2018 Formats: 250–330 sq. m, 22.3% increase y-o-y 21.5% increase y-o-y 330–430 sq. m, 430–620 sq.m, over 620 sq. m

RUB 297.9 bn 333.2 RUB Q3 2018 USD LFL Results 4.5 bn 5.1 USD net retail sales in Q3 2018 average check in Q3 2018 –Sales: 0.1% –Traffic: 0.5% 18.4% increase y-o-y 0.9% decrease y-o-y –Basket: (0.4) %

Average dollar in Q3 2018: 1USD = 65.5323 RUB Our retail formats Х5 RETAIL GROUP TODAY 16 Our retail formats: “Perekrestok”

Russia’s leading high- quality fresh products supermarket ~14.3% Share of X5's Q3 2018 net retail sales

Prime central locations in big cities, expansion into smaller cities Successful launch and roll out of Perekrestok Online in Moscow

Excellent customer service and loyalty programme supermarkets Adaptation of CVP to the needs of regional customers outside of core regions

* as of 30 September 2018 Х5 RETAIL GROUP TODAY 17 “Perekrestok” today: key highlights

ths. 712 728.5 sq. m 1,021 sq. m stores selling space avg. selling space as of 30 September 2018 as of 30 September 2018 Formats: up to 800 sq. m, 21.9% increase y-o-y 24.4% increase y-o-y 800 - 1,200 sq. m, over 1,600 sq. m

RUB 53.2 bn 481.2 RUB Q3 2018 USD LFL Results 0.8 bn 7.3 USD –Sales: 4.7% net retail sales in Q3 2018 average check in Q3 2018 –Traffic: 6.7% –Basket: (1.8)% 25.5% increase y-o-y 1.9% decrease y-o-y

Average dollar in Q3 2018: 1USD = 65.5323 RUB Our retail formats Х5 RETAIL GROUP TODAY 19 Our retail formats: “Karusel”

Focus of compact hypermarkets with convenient location ~5.5% Share of X5's Q3 2018 net retail sales

Modern and convenient shopping experience with a wide choice of food products and a smart selection of non-food Convenient shopping in one place at fair prices in convenient city hypermarkets locations New CVP and branding

* as of 30 September 2018 Х5 RETAIL GROUP TODAY 20 “Karusel” today: key highlights

ths. 92 382.1 sq. m 4,153sq. m stores selling space avg. selling space

as of 30 September 2018 as of 30 September 2018 1.1% increase y-o-y 0.4% increase y-o-y

RUB 20.6 bn 745.6 RUB Q3 2018 USD LFL Results 0.3 bn 11.4 USD net retail sales in Q3 2018 average check in Q3 2018 –Sales: (2.5)% –Traffic: (4.8)% 0.3% decrease y-o-y 2.7% increase y-o-y –Basket: 2.4%

Average dollar in Q3 2018: 1USD = 65.5323 RUB