2) When considering a dividend proposal to the General Meeting of Shareholders, the Supervisory Board will be guided by a target consolidated net debt/EBITDA ratio of below 2.0x, in line with the Company’s financing strategy.

[32][33][34] Each of the Company’s brands offers a unique customer value proposition and targets key parts of the Russian consumer population.

On top of that, the rebranded Pyaterochka sells a wide assortment of foods to go and ready-to-eat meals and has a special area where customers can have coffee or fresh orange juice and charge their gadgets.

In May 2019, Russia’s biggest and most up-to-date smart kitchen was launched for producing semi-prepared foods for stores, allowing a 2.5-fold increase in the ready-to-eat and ready-to-cook range under the Perekrestok Chef brand in the company’s supermarkets and also boosted quality.

The IT system is integrated into the Х5 Retail Group infrastructure, allowing new stores to be hooked up to the service in just a few hours and goods balances to be monitored virtually in real time.

There is a patented system operating for collecting orders at a store; this cuts assembly time considerably and optimises staff work.

In June 2019, X5 Retail Group and the Unitrade customs broker developed an end-to-end service for foreign online stores.

Partners pick up orders from the online store warehouses in China, bring them to Russia, clear them through customs and deliver them to the X5 distribution centre in Novosibirsk.

[49] At the end of 2019, 5Post was managing 12 sorting facilities at Х5 Retail Group distribution centres and 8,000 postamats and order collection points.

More than 3,000 of them are farmers and small and medium-sized enterprises selling food and children’s goods and providing everyday services near the cash desks outside Pyaterochka’s shopping area or inside as a shop-in-shop.

In April 2017, X5 Retail Group launched a cooperation project with the Central Union of Consumer Societies of the Russian Federation (Centrosoyuz).

Х5 considers technological solutions for four key retail spheres: customer experience, operations in stores, supply chain and back office.

Х5 is focusing particularly on smart shelving projects, flexible pricing systems, robotisation, automation of quality and freshness control for foodstuffs, and goods tracking.

[84] In June 2019, X5 Retail Group, together with the Israel-Russia Chamber of Commerce (IRCC), launched the X5 Retail-Tech Challenge start-up competition.

[76] In October 2019, X5 Retail Group summed up the results of a competition of start-ups held jointly with the Spanish Institute for Foreign Trade (ICEX).

[87] In December that year, X5 Retail Group and start-up accelerator Orange Fab started a joint programme for seeking and introducing innovations in Russia.

[91][92] In December 2017, Mail.Ru Group and X5 launched a partnership in online advertising targeting and assessing its impact on offline sales in certain stores.

[93][94] In June 2018, X5 started implementing video analytics and computer vision technology based on neural networks and artificial intelligence.

[95][96] In May 2018, X5 successfully completed a large-scale project to automate the processes of demand and replenishment planning at both stores and at Perekrestok and Karusel distribution centres.

To this end, the Company redesigned its core logistics, marketing and sales processes, and introduced an end-to-end system of supply chain management, boosting forecast accuracy by 17% and increasing on-shelf availability of products by 5%.

The company developed the device and the software itself: the machines are equipped with a multi touch screen, 2D barcode scanner, stereo speakers, a microphone for audio apps and voice services, and a 3D camera.

At the second stage, X5 added a goods weighing platform and there are plans for a rapid payment system using QR codes and Face ID technology.

[100] In February 2018, X5 launched an online service that helps real estate owners to calculate the average rent at any location where Pyaterochka has a presence.