X5 Digital

Performance indicators

2024: Revenue of digital services X5 for the year soared by 61.9% and exceeded 200 billion rubles

At the end of 2024, the revenue of digital services X5 Group (manages the retail chains Pyaterochka, Perekrestok and Chizhik) reached 200.07 billion rubles. This is 61.9% more compared to 2023, when the figure was 123.59 billion rubles. Such data are provided in the financial report published on January 27, 2025.

It is noted that Kh5, in order to increase efficiency and reduce costs, is engaged in the digitalization of processes and the active introduction of innovative solutions in all areas of activity. In 2024, the staff of the company's technological divisions exceeded 5 thousand people. Kh5 began building its own data center, which is expected to help reduce operating costs by three times, as well as provide flexible scalability and will allow for improved cybersecurity. The company continues to consistently migrate older IT solutions to the cloud, including the necessary system upgrades.

X5 is implementing hundreds of digital projects across key lines of business, the report said. As of the end of 2024, 15 products based on artificial intelligence are used. Unification of mobile application technologies is underway. Units have been created for the introduction of AI and robotization: it is planned that such systems will partially be able to perform up to 30% of operations in stores and distribution centers by 2028. And by 2027, X5 intends to automate a number of its distribution centers, which will long-term reduce the need for personnel by 20%.

The X5 Digital division, which is developing an online delivery service, in 2024 demonstrated the GMV (Gross Merchandise Value) indicator at the level of 217.3 billion. This is 61% more in relation to 2023. The number of orders for the 5Post delivery service for the year increased by 53.8%.^[1]

2022: Revenue growth of digital services by 46.6%, to 70.35 billion rubles

The revenue of digital businesses (Vprok.ru, express delivery, 5Post, "A lot of salmon") of the X5 group in 2022 reached 70.35 billion rubles, an increase of 46.6%, or 22.4 billion rubles, in comparison with 2021. The retailer announced this in its statements published in January 2023.

According to the document, the digital business accounted for 2.7% of X5's revenue in 2022, as well as + 0.6 pp of growth to the dynamics of consolidated revenue. X5 notes that express delivery, online hypermarket Vprok.ru and ready-to-eat service "Many Salmon" have demonstrated a steady increase in GMV (total turnover) in 2022.

Express delivery in 2022 broke the record for the number of orders among all X5 online services - 29.04 million, which is 10 million more than in 2021. The cost of delivered orders increased by 20 billion rubles, or up to 50 billion rubles.

The number of orders from the Vprok.ru and express delivery service reached 235 thousand on peak days of December 2022, which is 73% more than in the same period a year earlier. Revenue of the e-com delivery service 5Post decreased by 30% year-on-year in the fourth quarter of 2022. Company representatives attribute this to a reduction in the number of parcels from international suppliers. The number of orders in the fourth quarter of 2022 decreased by 5.5 million year-on-year. For 2022, this figure reached 25.9 million, which is 1 million less than in 2021.

The service for the delivery of ready-made food "A lot of salmon" in 2022 was in higher demand than a year earlier: the number of orders doubled. Also, the cost of delivered service orders increased by almost 3 million rubles. The average check of the service on an annualized basis increased by 16.8%, to 1915 rubles. The total number of digital business orders reached approximately 62 billion in 2022.

X5 2022 Financial Results

History

2022: Separate from X5 Group

On July 18, 2022, X5 Group announced the completion of the process of separating online businesses into a separate structure, which it announced a year ago. The X5 Digital business unit will manage the express delivery technology platform, the infrastructure of small darkstores that provide delivery within 40 minutes of the Pyaterochka and Perekrestka assortments, as well as the infrastructure of large darkstores with an expanded assortment under the brand Vprok.ru. The combined structure of the e-grocery Kh5 will be headed by Larisa Romanovskaya.

Separating online divisions into a combined structure, we discussed various scenarios for the development of online businesses Kh5 both independently and with the involvement of partners actively growing in related areas of e-commerce. In particular, the possibility of monetization through partial sale and the creation of additional shareholder value was analyzed. As a result, it was decided to keep X5 Digital in the X5 structure. Reliance on its own infrastructure and commercial capabilities will Kh5 give maximum flexibility and speed of development of online businesses in the current market conditions. The efficiency of the online economic model provides new growth opportunities, while the monetization model through market capitalization in the market for July 2022 in our opinion is not promising. Completing the creation of our own delivery infrastructure and building a stable remote communication channel with the client allows us to start working with external sales channels, including connecting delivery aggregators, which we plan to do in the near future, "said Vladimir Salakhutdinov, director of strategy and business development at X5 Group.

The combined structure of X5 Digital will ensure the growth of digital sales of X5 due to meeting the full range of customer needs in the e-grocery segment - from a small purchase with quick delivery within the city, to a large purchase in an online hypermarket, which can be delivered anywhere, including suburban and summer cottages. Managing these services within a single business unit will ensure a seamless transition between all X5 channels and mobile applications, as well as maximum business operational efficiency.

For customers of the online hypermarket and express delivery, the system for issuing and receiving orders will remain the same. Mobile applications of retail chains and the site will Vprok.ru work as usual.

The total GMV Vprok.ru Perekrestok and express delivery services in 2 square meters. 2022 reached 15.9 billion rubles, which is 34.1% more than G-K, including VAT, promo codes and bonuses. In April 2022, on peak days, the number of orders in the online hypermarket and express delivery reached 100 thousand. As of June 30, 2022, the express delivery service was available from 1,718 stores (1007 Pyaterochka stores, 711 Perekrestok supermarkets) and 45 darkstores in 54 regions. In 2 sq. 2022 the average number of orders for express delivery amounted to 58.9 thousand per day, with a delivery time of about 60 minutes and an average check of 1,675 rubles. in Pyaterochka and 1,888 rubles. in Perekrestok. The online hypermarket Vprok.ru Perekrestok is presented on the territory of 82 constituent entities of the Russian Federation, in 8 of which it works in the format of courier delivery, and in another 74 - in the format of pickup.

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