Karina chernikova. x5. crm

Х5 Retail GroupLoyalty Programs

Karina ChernikovaMarketing Director

June 3, 2010.

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Disclaimer

This presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or invitation to sell or issue or the solicitation of an offer to buy or acquire or subscribe for securities of X5 Retail Group N.V. or any of its subsidiaries or any depositary receipts representing such securities in any jurisdiction or an invitation or inducement to engage in investment activity in relation thereto. In particular, this presentation does not constitute an advertisement or an offer of securities in the Russian Federation.

No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.

No representation, warranty or undertaking, express or implied, is given by or on behalf of X5 Retail Group N.V. or any of its directors, officers, employees, shareholders, affiliates, advisers, representatives or any other person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or any other material discussed at the presentation. Neither X5 Retail Group N.V. nor any of its directors, officers, employees, shareholders, affiliates, advisors, representatives or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or any other material discussed at the presentation or their contents or otherwise arising in connection with the presentation.

This presentation includes statements that are, or may be deemed to be, “forward-looking statements”, with respect to the financial condition, results, operations and businesses of X5 Retail Group N.V. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as” anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal” believe”, or other words of similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond X5 Retail Group N.V’s control. As a result, X5 Retail Group N.V’s actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements. X5 Retail Group N.V. assumes no responsibility to update any of the forward looking statements contained in this presentation.

This presentation is not for distribution in, nor does it constitute an offer of securities for sale, or the solicitation of an offer to subscribe for securities in Australia, Canada, Japan or in any jurisdiction where such distribution, offer or solicitation is unlawful. Neither the presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions or to, or viewed by any U.S. person as defined in Regulation S under the US Securities Act 1933 (the "Securities Act”). Any failure to comply with these restrictions may constitute a violation of United States, Australian, Canadian or Japanese securities laws. The distribution of this presentation in certain jurisdictions may be restricted by law and persons into whose possession this document or any other document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdiction.

For Russian law purposes, the securities mentioned in this presentation (the "Securities") represent foreign securities. It is not permitted to place or publicly circulate the Securities on the territory of the Russian Federation at present. No prospectus for the issue of the Securities has been or is intended to be registered with the Federal Service for Financial Markets of the Russian Federation. The information provided in this presentation is not intended to advertise or facilitate the offer of the Securities in the territory of the Russian Federation. This presentation does not represent an offer to acquire the Securities or an invitation to make offers to acquire the Securities.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. Some of the information is still in draft form and neither X5 Retail Group N.V. nor any other party is under any duty to update or inform recipients of this presentation of any changes to such information or opinions. In particular, it should be noted that some of the financial information relating to X5 Retail Group N.V. and its subsidiaries contained in this document has not been audited and in some cases is based on management information and estimates.

Neither X5 Retail Group N.V. nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the statements contained in this presentation.

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Information about the Company

X5 Retail Group N.V.Russia's largest retailer in terms of sales. May 2006 The Company was created as a result of a merger between Pyaterochka (soft

discounter chain) and Perekrestok (supermarket chain).

June 2008 X5 acquired Karusel hypermarket chain and substantially strengthened its position in hypermarket format.

As at 31 March 2010, X5 had 1,399 Company-managed stores located in Moscow, St. Petersburg and other regions of European Russia, Urals and Ukraine, including:

1,063 soft discounters 60 hypermarkets276 supermarkets

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X5 Retail Group Today

X5 Retail Group N.V. in 2009

Nearly 1 billion Customer Visits

USD 8.7 billion in Net Sales

25% Pro-Forma Sales Growth in RUR

33% Consolidated Sales Growth in RUR

Industry-leading LFL Sales Growth of 10%

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Magic card Club Perekrestok Club Perekrestok Green

Personalized accumulative bonus loyalty programs.

Prepared to launch

Structure of the Loyalty Programs of Х5 Retail Group

Being considered

Promotional cards Allow to collect points for purchasing the PROMO-goods

► to obtain the detailed statistics, which will allow to increase the forecasting and planning accuracy, and as a result to improve the operational efficiency

► to investigate deeply the customer insight and to become customer-oriented

The objective is to gather the customer information:

Stable competitivene

ss

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Value Proposition of the Formats, Operating the Loyalty Programs

Business model

THE STRATEGY OF MULTI-FORMAT DEVELOPMENT AND FORMAT DEFERINCIATION:

Value proposition

Basket generation Attraction and retention of the Target AudienceFront margin control («to gain on the assortment»)EBITDA cow

Traffic generation Basket generation Price leader image

All in one place – in low cost – for the whole family

Purchasing in the atmosphere of celebration

Focus on the local surroundings

FRESH LEADER

Best-in-service

PEREKRESTOK – is the federal supermarket chain for the people who appreciate the quality of food, comfort and their personal time. The leader in providing FRESH food of the highest quality at the best price among the supermarkets. Grants the high quality of service and the best conditions for the comfortable and fast purchasing not far from home/ on the way. Means to grant the above: Customer oriented personal Assortment policy based on the investigation of the current

demand and future needs of the target audience. Fast reaction to market changes

Implementing the innovative technologies and the best world practices in food retail

Best store location

KARUSEL – is the best hypermarket chain for the wide range of customers focused on family values - makes the positive mood available for everybody by offering: Wide and deep NON FOOD assortment, focus on interesting and

profitable seasonal offers Wide range of fresh food and prepared meals Wide range of healthy lifestyle goods, focus on NON FOOD Wide and deep range of goods for children (FOOD, NON-FOOD) Additional services in and outdoor – the number of tenants, with the

business matching the target audience of the hypermarket Achieved by the means of: Purchasing power of X5 Retail Group Constant investigation of the current demand and the future needs

of the target audience. Fast reaction to market changes Implementing the best world practices in food retail

Loyalty programs can stimulate

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Value proposition SUPERMARKETS

Value propositionHYPERMARKETS

Value Proposition & the Loyalty Programs

Magic card Positioning of the program aimed to create the

atmosphere of the family holiday. Positioning is reflected in all promotional materials of the program and the marketing campaigns

Club Perekrestok


Positioning

Positioning of the program as a Club for the people who appreciate the quality of food, comfort and their personal time. The partners of the program are the businesses with the same target audience

Program rules

2 bonuses for every full 10 RUR, spent with the Perekrestok Club Card +4 bonuses for every full 10 RUR, for the purchase made on Birthday

MAIN BONUS RULE:

СПИСАНИЕ БАЛЛОВ ПО ПРАВИЛУ:

+1 bonus for every full 10 RUR, with every increase of the receipt value for 1000 RUR (works for the receipts value 2000-9000 RUR)

1 bonus for every full 10 RUR, spent with the Magic Card +1 bonus for every full 10 RUR, for the purchase made on weekdays

(Monday-Thursday), except holidays;+ 3 bonuses for every full 10 RUR of the purchased

non-food goods+ 4 bonuses for every full 10 RUR, for the purchase

made on Birthday and 2 days before and after the birth date

ADDITIONAL BONUS RULES: additional bonuses (+0.5 bonus, +1 bonus, +2 bonuses, +4 bonuses) if the

threshold limit of the aggregate turnover for the 3 months is reached (threshold limits: 20000 RUR, 30000 RUR, 50000 RUR, 100000 RUR)

1 bonus for every 0.1 RUR of the purchase paid with the bonuses

TO JOIN THE PROGRAM:

The customer can pay the entrance fee – 49 RUR since 1st July 2010 Making the purchase for more than the campaign limit (vary by region)

Only by paying the entrance fee – 199 RUR


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Club Perekrestok


Positioning


Program rules


MAIN BONUS RULE:














Different basic rule due to the different margin

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Club Perekrestok


Positioning


Program rules


MAIN BONUS RULE:














Progressive rule for every receipt as the frequency of purchases is more than once a week

Progressive rule for the aggregate turnover for the period, as the frequency of purchases is less than once a week

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Club Perekrestok


Positioning


Program rules


MAIN BONUS RULE:














Different Birthday rules due to the different frequency of purchasing

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Club Perekrestok


Positioning


Program rules


MAIN BONUS RULE:














Additional stimulation of the purchases on weekdays for the flattening of the traffic fluctuation during the week

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Club Perekrestok


Positioning


Program rules


MAIN BONUS RULE:














Additional stimulation of the assortment categories defined as strategic

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Plans to develop the Perekrestok Club: Theme Sub-clubs

Mediterranean Club The sub club for the participants fond of Italian cuisine. The promoted categories: olives and olive oil, balsamaceous, pastas, rice, Italian salads, wine, cheese (e.g. Parmigiano, Gorgonzola, Mozzarella) and meat delicacies (e.g. Pepperoni, Parma ham), vegetables (most typical for Italy: tomatoes, eggplants, zucchinis, etc.), fish and seafood, etc.

French RivieraThe sub club for the participants fond of French cuisine. The promoted categories: wine, champagne, french dressings, chocolates and other deserts, croissants, cheeses, pates, duck, fish, typical meat: veal and lamb, typical vegetables (potatoes, asparagus, artichokes, carrots, beans, truffles, cauliflower) etc.

Bavarian The sub club for the participants fond of bear and meat. The promoted categories: bear, sausages and frankfurters, gourmet snacks, cabbage, typical meat (e.g. gubernaculum) etc.

Healthy Eating The promoted categories: breakfast cereals, juices, salads, vegetables, fruit, any other goods, positioned as ecological or organic (e.g. «without soy») etc.

Healthy Eating The promoted categories: caviar, vodka, gourmet snacks, pelmeni, Russian pancakes, etc

In each Theme Sub-club there are extra-bonus rules for the selected range of goods for the subscribers of the sub-club. The selected theme range of goods is being revised once a month

The participant of the Perekrestok Club can subscribe to the first Theme sub-club on his own choice free of charge. To subscribe to the each subsequent sub-club the participant will be charged 5000 bonuses.

The most active subscribers of the sub-club can become the moderators of this sub-club. For the moderation job the participants earns extra bonuses

Prepared to launch

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Geographical Presence

Volgo-Vyatsky18 Perekrestok stores

6 Karusel stores

Volgo-Vyatsky18 Perekrestok stores

6 Karusel stores

South 14 Perekrestok stores

4 Karusel stores

South 14 Perekrestok stores

4 Karusel stores

Sredne-Volzhsky 22 Perekrestok stores

5 Karusel stores

Sredne-Volzhsky 22 Perekrestok stores

5 Karusel stores

Center 152 Perekrestok stores

14 Karusel stores

Center 152 Perekrestok stores

14 Karusel stores

North - West31 Perekrestok stores

17 Karusel stores

North - West31 Perekrestok stores

17 Karusel stores

Centralno-Chernozemny 9 Perekrestok stores

6 Karusel stores

Centralno-Chernozemny 9 Perekrestok stores

6 Karusel stores

Privolzhsky15 Perekrestok stores

6 Karusel stores

Privolzhsky15 Perekrestok stores

6 Karusel stores

Urals5 Perekrestok stores

3 Karusel stores

Urals5 Perekrestok stores

3 Karusel stores

In Moscow and suburbs the program was launches in 2006г. Rest of the regions were launched in 2009.

The program is launched in all regions in April 2010.

As for the 30 of April 2010

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Main efficiency indicators of the Perekrestok Club


More than 1 500 000 of participants

Number of participantsgrowth for the last year (30.04.09 – 30.04.10)

Redemption rate: 87,6%

Operates in more than 260 stores

The program basket exceeds the chain basket 68,9%

The share of the program in the chain turnover 33,9%

The share of the program in the traffic 20,1%

Since the launch of the program bonuses in the Perekrestok chain redeemed for the amount of

1 billion RUR

78,3%663 500 people

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More than 320 000 of participants

Operates in more than 61 stores

Redemption rate: N/A (can not be calculated as the program is just launched )

The program basket exceeds the chain basket 81%

The share of the program in the chain turnover 26%

The share of the program in the traffic 14%

Main efficiency indicators of the Magic Card


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Development Plans

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X5 CLUB – stable technical infrastracture

The program operates on the stable technical infrastructure:

On-line processing system from ComArch, which allows the store continuous detailed data about the participants’ purchasing activity since the launch of the program with the highest standards of data protection.

Contactor servicing hotlines of the programs – the Synterra company. One of the TOP 3 of the Russian market of contact centers. Licensed Operator of the personal data in accordance with the Federal Law 152 «About the Personal Data».

We have launched the project and now are tendering the contractor for CRM-analytical job. The CRM analytics will allow : - to apply the data driven segmentation of the customers;- to investigate the customer insights and to align the pricing, promotional and assortment strategy to the

customer needs;- to use the gathered detailed statistics to improve the accuracy of forecasting and planning; - to use the possibilities of personalized marketing in full strength: apply the micro-segmentation

for targeted marketing campaigns, to use widely personalized communication channels, such as SMS, e-mailing, etc.

X5 Loyalty Programs will grow and develop

(technical aspects)

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What’s next?

Bank co-brand project for both of the Loyalty programs, in order to give the customers the opportunity to use the card as a normal mean of payment: debit or credit

MVNO – Mobile Virtual Network Operator as a partner of the Loyalty Programs Partnerships with other brands and chains to allow our participants to collect

even more bonuses for any purchases Corporate program for our partners Charity cards in our Loyalty Programs, which will collect all the bonuses in in

favor of charity programs «Karusel to the Children» and «Perekrestok of Life» Internet-shop of the unique products, which will be available for the participants only if

paid by bonuses

X5 Loyalty Programs will grow and develop

In 2010-2011 we aim to implement:

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Bank co-brand

In the end of 2009 we’ve started the project with CITY-bank on the launching the co-brand program for our participants.

This will allow our Partners :• to expand the number of customers by attracting new customers

from the partner• to increase the competitiveness of products and services by

providing additional benefits for consumers• to achieve greater advertising effect by combing forces of

brands, to attract more attention to advertising campaigns• to handle cross-marketing activities, joint actions• According to the available banking statistics in the world and

Russia, the owners of co-branded cards rarely "leave" the bank, and keep more money on card accounts than other clients

Bonus account

Bank account

Credit limits, deposit and other banking products on special conditionsExtra bonus points for purchases with the program card outside the chain, the removal of ATMs

All opportunities of X5 Loyalty Programs

0000 0000 0000 0000One card

Prepared to launch

Prepared to launch

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MVNO (Mobile Virtual Network Operator) — a mobile operator , using thу existing technical infrastructure of the other operator, but selling the services under its’ own brand

MVNO

Advantages of the new service :

- Low-cost mobile communication (the service is nearly 20% lower the market price )

- Integration with the X5 Loyalty Programs, which allows to collect bonus bonus package of communications services: minutes of voice traffic and/or SMS messages free of charge for the purchases made in X5 chains

- Special offers

X5 RETAIL GROUP is launching an additional service for it’s customers in July 2010 – MVNO «ALLO» on the technical basis of Mobile TeleSystems!

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Partner of MVNO X5 «ALLO» – BRAND (supplier)

MVNOPartnership with suppliers

The size and duration of the service packages (minutes of voice traffic and/or SMS) are defined in the partnership agreement.

The possibility of selling service packages by suppliers, and partners of X5 :

•Boosting sales of the specific brand or product by awarding the customers subscribed to «ALLO» with free service packages: minutes of voice traffic and/or SMS for the purchasing of the specific products / group of products

•A significant discount on the price of the service packages can be offered to strategic and long-term Partners.

The benefits for Partner:

• The most active audience in terms of promotions

• The payment will be charged only for the service packages accrued to the subscribers

• Synergy from the integration with the telecom projects

• Practical and therefore actually an interesting incentive to buy goods for buyers

• Measured results, reporting

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Partner Programs from the customer point of view

Being a Partner of the X5 Loyalty Programs, the company gets: Ability to simultaneously attract a wide audience of payable customers Increased frequency of visits by accelerating the accumulation of points from traffic-maker (retailer) The constant presence of the brand in front of consumers (high frequency of card use in grocery retail

chain) Promotion of the opportunities and privileges in the partner companies through mass communication Access to the aggregate information about his customers Access to the analytical information about the purchasing activity of his customers The possibility of customer segmentation, defining and researching the target audience and its

preferences The possibility to use the personalized communication channels, such as SMS, e-mail mailings,

hotlines The possibility of cross researching, cross and up selling

Romir, Marketing research among the Club Perekrestok partisipants

51,9

44,9

33,9

32,9

30,6

23,7

22,4

21,5

16,5 0,2

0,2

7,212,1

14,1

Mobile operators

Pharmacies

Clothes

Cinemas & Theatres

Gas stations

Active sports

Restaurants & cafes & clubs

Transport Intertainment

Banking & Finanse

Different

All of the above

Nither

No answer

92,8 % of the Club Perekrestok participants would like to collect/redeem points in other companies.

****

*

*

* Partnership agreements have been concluded

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Partner Programs

X5 loyalty programs can offer 2 options of partnership:

Option 1Full interaction of the X5 Loyalty Program and Partner

Option 2"Easy" Partnership with X5 Loyalty Program

The Partner has his own Loyalty Program The participants of the Partner's Loyalty Program can

convert privileges (bonuses, points, miles, etc.) of one program to another with the defined exchange-rate

The Partners share information on participants who make exchange

The Partners make the transaction clearing at the end of the period and clarify the bills and payments

There is no need to integrate the POS equipment with multiple processing. Only the processing systems are integrated

The Partner issues the bonuses of X5 Loyalty Programs Partner independently defines rules for calculating bonus points In the end of the period, The Partner shall pay issued bonus

points to X5 at the agreed cost per 1 bonus point X5 provides aggregated information about the Partner’s Clients The X5 handles the communications with participants on the

Partner’s assignments Online and off-line integration of technical systems is acceptable

Prepared to launch

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http://www.bolero.ru/

http://www.003.ru/

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Examples of the existing Partner Programs

Partnership with the SELA clothing store

Federal

Any customer of the SELA store collect 5 bonuses for 10 RUR spent in SELA with the

Perekrestok Club card.

Travel Agency "Favorable tour"

Volgo-Vyatsky branch

Discount on any tour for the Club Perekrestok participants.

Discount is granted in bonuses

The chain of the ticket offices «Theater – Show»

Sredne-Volzhsky branch

Buying the tickets at the Theatre-Show ticket office the participant of the Perekrestok Club

collect 1 point for every 10 RUR .

Travel Agency“Vivat"

North-West branch

Discount on any tour for the Club Perekrestok participants

Discount is granted in bonuses.

Internet-shops BOLERO & 003.ru

Federal

1 bonus for every 1 RUR spent on books and media products in the store Bolero.

1 point for every 5 RUR spent on electronics and home appliances in the store 003.ru

Franchising chain «Perekrestok-Express»

Federal

Purchasing in the franchising stores the participant collects the same bonuses as in the

regular Perekrestok store. No redemption of the bonuses available

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Partner of the Loyalty Program – BRAND (supplier)

Partnership with suppliers

The benefits for Partner:

Stimulation of the sales by providing additional discounts in points on the Partner’s products

Opportunity to attract attention to the Partner’s product through all channels of communication available in X5 Loyalty Programs :

The partnership agreement is signed with the brand. The price, size and the validity of the additional discount (in bonuses) for the customers is defined in the supplementary agreement. The partner pays only the bonuses issued to the participants

The discount can be applied :• to all products of the BRAND• only to the defined range of products

The discount can be valid for:• full year • half year • quarter of the year • one or several month • combined program

The size of the discount can vary:• 2%...100%

The discount can be granted :• only in X5 chain(s)• both, in X5 and among the Partners

(the additional tools for accounting of goods purchased by participants are required)

X5

Lo

yalt

y P

rog

ram

s A

ud

ien

ce

SMS–SERVICE

HOTLINE

WEB и PERSONAL WEB-PAGE

INDOOR EDVERTISING

ADDITIONAL SLIP AT THE POS

www.x5club.ru

8-800-200-95-55 8-800-200-56-66

Targeted SMS-mailings

Posters, stoppers, leaflets, etc.

Info-slip with each transaction

IN-PACK: Perekrestok Club Card or Magic Card as "a gift" for the purchase of the products of the Partner.

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Partnership with suppliers Examples of the edvertising

Posters in the

salerooms

Special display of goods in the salerooms

Stoppers, rubricators,

etc.

Information on the

web-page

Information in the PROMO-

catalogue SMS

mailings

Info-slip at POS

Leaflets

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Loyalty programs for Corporate clients

Corporate cards differ from standard cards: The Corporate Card gives the unique conditions of obtaining benefits / discounts to its owners:

• The possibility to increase the discount depending on the turnover• Additional bonuses on the Company’s Birthday are possible • Additional bonuses on the Company’s professional holiday are possible• Additional bonuses for the range of goods, if the company is a supplier of the X5 Retail Group

The card can be of a unique design or just branded with the Partner’s logo

Corporate Card is intended only for

corporate clients and partners of X5

Retail Group

The amount of discount (number of points) can increase monthly depending on the average and total turnover on the pool of cards

Basic level Corporation: twice more bonuses (2% off the purchase price)• Available within first 2 months if the card were pre-filled with more than 10 000 points • After the first 2 months if the average turnover on the pool of cards is more than 3,500 RUR per month• If the average turnover on the pool of cards is less than 3,500 RUR a month, all the cards are transferred into a standard

mode of accumulation of points, according to the rules of the programMiddle level Corporation mid: 5 times more bonuses (5% off the purchase price)

• If the average turnover on the pool of cards is not less than 3,500 RUR per month • The total turnover on the pool of cards exceeds 15 million RUR per month

Higher middle level Corporation mid+: 7 times more bonuses (7% off the purchase price)• If the average turnover on the pool of cards is not less than 3,500 RUR per month • The total turnover on the pool of cards exceeds 30 million RUR per month

Premium level Corporation top: 10 times more bonuses (10% off the purchase price)• If the average turnover on the pool of cards is not less than 3,500 RUR per month• The total turnover on the pool of cards exceeds 50 million RUR per month

&

&

&

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Charity Cards

X5 Loyalty Programs support for charity programs of a chains

The holders of "charity" loyalty cards, can collect bonuses without redemption opportunities. All the collected bonuses are automatically transferred in favor of the charity programs «Perekrestok of Life» and «Karusel for Children».

Thank you for your attention

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