X5 maintains leadership in the online food retail market

X5 Retail Group's online food sales more than quadrupled.

Online food sales by X5 Retail Group in Q3 2020 and in the first nine months of 2020 increased by more than four times compared to the same periods last year.

X5 Retail Group, the leading grocery retailer in Russia, announces that during the first nine months of 2020 the company was able to maintain its first place in the Russian online food retail market, according to data from Infoline for the corresponding period.

The total turnover of online businesses for the nine months of 2020 amounted to 12.7 billion rubles. (including VAT), of which 9.6 billion rubles were accounted for by the online hypermarket Perekrestok Vprok, and 3.1 billion rubles made up the share of express delivery services.

Online food sales by X5 Retail Group in Q3 2020 and in the first nine months of 2020 increased by more than four times compared to the same periods last year.

In the third quarter of 2020, online sales accounted for 0.8% of X5's turnover, while in Moscow and the Moscow region this figure for this period was 1.9%. It is expected that by the end of 2020 the share of online businesses will exceed 1% of X5 Group’s total sales and will amount to more than 2% of sales in Moscow and the Moscow region. In 2021, revenue from digital businesses should be at least 2% of X5's total revenue.

In the third quarter of 2020, X5 online platforms processed more than 1.7 million orders, with 846,000 orders being completed by the online hypermarket Perekrestok Vprok and 855,000 by express delivery services. In the third quarter of 2020, the average bill for an online hypermarket was RUB 3,791, and the average bill for express delivery services from convenience stores and supermarkets was RUB 1,540. In the third quarter of 2020, the average number of orders per day completed by Perekrestok Vprok and express delivery services amounted to 9,200 and 9,300, respectively.

In express shipping, X5 uses two types of operating models: delivery from existing stores and from mini dark stores in nearby areas. Both models are showing strong operating results above expectations.

X5 expanded its online presence in July-November 2020 to 13 more cities. Express delivery is now available in Nizhny Novgorod, Voronezh, Yekaterinburg, Novosibirsk, Chelyabinsk, Samara, and Ufa. Perekrestok Vprok has begun delivering orders to Tver, Tula, Ryazan, Vladimir, Cheboksary, Kazan, Veliky Novgorod, and Vyborg. X5's online services are currently available in 18 cities.

On peak days in November 2020, the number of orders per day filled by both online platforms reached 42,000, with further growth expected during the high pre-holiday season. The expected number of orders per day in December is over 50,000. The average check for Perekrestok Vprok in November was 4,008 rubles, in express delivery it was 1,542 rubles.

To support strong financial results and rapid growth in digital businesses, X5 uses an internal digital transformation program that enables redesign and automation of internal processes to achieve new levels of speed and efficiency. The expected positive effect of the strategic digital transformation of X5 in 2020 on the EBITDA of the Company is 6.7 billion rubles.

X5 Retail Group’s Q3 2020 EBITDA margin increased by 116 bp. y-o-y (under IAS 17) up to 8.0%, and one of the company's strategic priorities is to ensure the profitable growth of its online businesses. Perekrestok Vprok achieved positive EBITDA during the lockdown in May 2020, and, according to management estimates, it will generate positive EBITDA in 2021. The express delivery business is expected to achieve positive EBITDA in 2023.

X5 expects the Russian online food market to continue to grow and is committed to ensuring that the Company's online market share continues to grow in 2020 and beyond.