​​​​​​​​​​​​​​Private Investor's Guide​

A global depositary receipt& (GDR) is a security certifying the right of its holder to own a certain number of shares in a company. GDRs are issued by a depositary bank that owns the shares directly. If a company issues GDRs, it is these GDRs that are sold to investors on a stock exchange. A single GDR may represent ownership of several shares or fractions thereof.

X5 Group GDRs trade on the London Stock Exchange (LSE), Moscow Exchange (MOEX) and the St Petersburg Stock Exchange (SPBEX) under the ticker FIVE. Each GDR represents 0.25 of an ordinary share in X5. BNY Mellon acts as the depositary bank and the issuer of GDRs for X5. All of the above means that shares in X5 cannot be purchased directly. The only way to invest in the Company's equity is to acquire GDRs.

X5 GDRs can be bought and sold on Moscow Exchange as easily as shares in any other Russian companies. GDR trading is regulated by Russian legislation, and the process is similar to buying shares. GDR holders have the right to receive dividends and participate in General Meetings of Shareholders.

X5 Group GDRs trade on the London Stock Exchange (LSE), Moscow Exchange (MOEX) and the St Petersburg Stock Exchange (SPBEX) under the ticker FIVE. Most trading of GDRs takes place on Moscow Exchange. It is worth noting that GDRs that trade on different stock exchanges are the same; they are not different financial instruments. Whatever platform GDRs are purchased on, the amounts of dividends their holders are entitled to are the same.

Quotations for X5 GDRs on the LSE are available on the Company's website and the LSE website. Quotations for X5 GDRs on the MOEX are available on the MOEX website.

Dividends are paid twice a year – for nine months of the year and at year end. For the Company's dividend policy, dividend history and payout dates, please see the Dividends section on the X5 website. All investors that hold GDRs on the record date are entitled to dividend payments no matter what platform the GDRs were purchased on.

Dividends can be paid in roubles or dollars – depending on your broker. X5 Group declares dividends in roubles and pays them to BNY Mellon (the depositary bank) in roubles. The latter converts roubles to dollars and transfers the money to brokers. The brokers can either convert the dividends back to roubles or pay them to GDR holders in dollars.

Dividends are paid to investors who hold GDRs on the record date. It should be borne in mind, however, that the settlement period on Moscow Exchange is T+2 (the trade date plus two business days). This means that when you purchase a GDR, you become the holder of that GDR two business days later, after all relevant settlements have occurred. So, to receive dividends, you should buy X5 GDRs at least two business days before the record date. You can get detailed information about the dividend schedule in the Dividends section.

Since X5 Group is incorporated in the Netherlands, X5 shareholders (tax residents of Russia)​  are required, in accordance with Dutch laws, to pay a 15% tax until the end of 2021. GDR holders receive net dividends, free of all taxes. There is a depositary bank fee of USD 0.02 per GDR that is automatically deducted when dividends are paid.

In Russia, no taxes have to be paid on X5 dividends, at least in 2021. In 2021, however, Russia terminated its Double Taxation Treaty with the Netherlands. X5 is now waiting for the government to provide clarifications in respect of taxation of dividends paid by Russian public companies incorporated in the Netherlands from 2022 onwards.

If a private investor is not a tax resident of Russia, the tax and payment procedure may differ.​

Yes, you have to file a tax return in accordance with applicable laws.

X5 publishes key quarterly operational and financial results in the Results Centre section on its website. Its annual reports include, among other things, the Company's annual consolidated financial statements and the independent auditor's assurance report.

Operational results (trading updates) include X5's net sales of offline and online businesses, LFL sales, the number of stores and selling space, the average ticket and the number of customer visits and more.

Financial results include revenue; gross, operating and net profit; EBITDA; profit margins; leverage; operating costs; etc. Financial results are reported after the operational results have been disclosed.

X5 reports its operational and financial results on a quarterly basis. Check the Financial Calendar to see the dates on which the Company plans to publish its results.

X5 Group is required to convene a General Meeting of Shareholders within six months after the end of each financial year. The Annual General Meeting is usually held in May. The date is announced on the day X5's annual financial results are reported. The agenda, outcome and procedures of general meetings are available on the Company's website.

Here are the most important metrics that can help you get a better picture of the performance of a retail company:

• Revenue: proceeds the company receives from sales. Revenue can help you get a clearer idea of the size of the business.
• Like-for-like (LFL) sales: sales in the same stores on certain dates. This metric compares sales generated only by the stores that were operational on both the first date and the second date. LFL sales allow you to see the change in sales, without taking into account the growth of the chain.
• Number of new store openings: indicative of the pace at which the retailer is expanding.
• Number of new store openings: indicative of the pace at which the retailer is expanding.
• Net profit: particularly important for estimating the potential dividend payments and analysing the dividend history.
• EBITDA: earnings before interest, taxes, depreciation and amortisation. This metric allows investors to compare companies in the same sector.
• Profit margin metrics: EBITDA margin, net profit margin, gross profit margin.
• Leverage: reflected by the net debt / EBITDA ratio.

The Company has adopted a strategy to 2023. X5 Group aims to grow its share to 15% of the grocery market and 20% of the e-grocery market by 2023. As outlined in the strategy, X5 will stay with its customers at all stages of their shopping journey. More information about X5's strategy to 2023 is available here (English version).

ESG-driven activities (responsible practices towards the environment, society and corporate governance) play a very important role for X5 Group. In 2020, Forbes named X5 one of Russia's three most eco-friendly companies and No. 1 in the retail industry. X5 has in place a sustainable development strategy to 2030 with interim goals to be achieved by 2023. The sustainable development strategy was adopted in 2019 and remains an integral part of the Company's general strategy.

For more information on all X5's sustainable development projects, see the dedicated page on its website. X5 has also published its first GRI-compliant and independently audited sustainability report, which offers insight into the Company's ESG initiatives and achievements in sustainable development.

X5 is No. 1 in Russian food retail in terms of revenue and market share. In 2020, the Company's net revenue amounted to RUB 1.97 trillion, with a market share of 12.6%.

You can read X5 investor presentations (in English) where we provide comprehensive information on X5's business and performance. X5 also publishes annual reports containing extensive information on its activities.

Transcripts of presentations for private investors with updates on X5 and its plans are also available on the Company's website.

In addition, X5 holds conference calls for private investors. If you would like to be notified of such calls, please let us know at iro@x5.ru.

X5 Group has official blogs on Smartlab and Tinkoff Pulse where it posts regular updates on its work.

Please send your questions to our investor relations team at iro@x5.ru.

X5 Group has official blogs on Smartlab and Tinkoff Pulse, where you can also post questions in the comments.​​