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Ladies and gentlemen, thank you for standing by and welcome to the X5 Q2/H1 2019 Financial Results Call. [Operator Instructions] And I also must advise you that this conference is being recorded today, Thursday, the 15th of August, 2019. And I would now like to hand the conference over to your first speaker today, Natalia Zagvozdina. Thank you. Please go ahead.
Good morning, good afternoon, ladies and gentlemen. On behalf of X5, let me welcome you to our call today dedicated to our second quarter and first half 2019 financials. Please refer to our website in the Investors section for the results. We disclosed the press release as well as the financial statements this morning via all the usual means of communications.We present the results according to IFRS 16 as well as IAS 17 accounting standards. We'd like to remind you that some of the information announced during this call may contain projections and forward-looking statements regarding future events or future financial performance of X5. Please refer to Page 9 of our results release for the full disclaimer. Without further delay, let me pass the floor to X5's CEO, Igor Shekhterman, please.
Thank you, Natalia. Good morning and good afternoon, ladies and gentlemen. Thank you for joining us in the call today. I would like to begin by highlighting some of the company's main achievements in the first half of this year and the key initiatives we are focusing on at the moment. I will also say a few words about our future plans. After that, our CFO, Svetlana Demyashkevich, will discuss the external environment and provide more details about our financial results. Following our presentation, we will be happy to answer all your questions.Let's start with our key achievements. About a year ago, we had to make significant improvement in the company because our proximity format had been showing disappointing results. Around the same time, we approved the new midterm strategy, which is concentrated on boosting efficiency in our business with a focus on returns. I'm pleased with the operational and financial performance we were able to achieve over the last year by executing on our strategy. Hence, I'm proud of our team as these are the results of the teamwork, certainly.We continue digital transformation of our company. 80% of our growth in this area is aimed at improving efficiency of the existing business, while the remaining 20% goes to building the platform for our clients' omnichannel journey.We sustained growth in like-for-like sales at the group level. Our like-for-like traffic growth accelerated at the highest pace since Q1 2017, which, in our view, reflects the growing trends towards more frequent grocery shopping as well as X5's leading position in our proximity and supermarket segments. The company gross profit margin in Q2 2019 increased due to lower levels of shrinkages and improved logistic efficiency. Commercial margins remained flat year-to-year, helped by balanced promotions. We have improved levels of activity in our stores and significantly reduced turnover of our personnel. Our adjusted EBITDA margin increased to 8.2% (sic) [ 8.4% ] in Q2 2019, the highest level since Q2 2017.In Q2 2019, we opened pilot Pyaterochka and Perekrestok stores, which will test elements of the format's new concept. The new concept should be finalized by the end of the current year.The company continued to develop its loyalty card programs. In total, at the moment, retail format of our company had almost 40 million active loyalty card users as of end of the June of the current year.In line with our strategy of balanced growth, the company opened 22 [indiscernible] stores in the first half of the current year against the year ago. These had a positive effect on our [ width ] which is one the -- our key priority.In July, we paid dividends for the last year in the amount of RUB 25 billion, which is 87% of X5 Retail Group's 2018 net profit.Now I would like to discuss some of the key achievements across X5 format, starting with Pyaterochka proximity format. I am very pleased with the results the current Pyaterochka team has been able to achieve over the past year, as our numbers clearly show. We are continuing to optimize the organizational structure of Pyaterochka to make it more sustainable. Over the past year, the number of direct reports for the proximity format CEO reduced to 12 from 20. The 3 new executive directors now supervise the format's directions, while the CEO of Pyaterochka focuses more on the company's strategic development. Of the 3 new executive directors, 2 were internal promotions in accordance with our strategy to develop internal talent.Staff turnover decreased by more than 10 percent points in first half of the past -- of the current year. This is a result of improved working conditions for in-store personnel, optimization of business process and change in the compensation and motivation system of our employees. This has reflected positively on the level of service in our store, which is a high importance given increased -- increase in competition, especially in Moscow. Decrease in shrinkages level is one of the core indicator of operational efficiency and a key priority for the management. We still see a positive trend in shrinkage, which declined by 1 percent point of revenue since the current Pyaterochka team took the lead. However, shrinkage remains above the target level, and we will continue to reduce it at a steady pace. We aim to invest the savings from the process into our customer by offering better price as well as more competitive salary to our employees in stores. We continued working on the new Pyaterochka CVPs. The main objective is to gain our guests' trust through convenience, freshness and quality customer care and, of course, low price. We are currently piloting a new Pyaterochka concept store with an improved CVP. We look forward to present it to you at our Capital Markets Day in October 23 in London. Now I will talk about achievements at Perekrestok supermarket. Perekrestok continued to demonstrate outstanding performance with the highest like-for-like growth among X5 Retail Group formats. Its like-for-like traffic growth is higher with an average size [ check ] for the 11th quarter in a row, while also leaving competitors far behind.The chain launched a series of pilot stores under the new concept, opening retail supermarkets under the new basic concept as well as large-format supermarket in the capital and in other regions. The basic concept was developed to address the latest trend in customer preferences. Perekrestok is implementing the so-called promotional design in -- at each store. Half of the new supermarket selling space is developed for the fresh assortment and ready-to-eat foods. Our large-format supermarket has bigger selling space and a wider offering of ready-to-eat fruit and vegetables, meat products, fresh fish and bakery product as well as [indiscernible] fruits. This supermarket [indiscernible] to the self-checkout as well as dedicated zones for customer to pick up via Click & Collect orders made online. Ready-to-eat is one of the key category for X5, especially for our supermarket, and we are expanding our offering accordingly. In May, we launched the smart kitchen in Moscow region. It has been -- it has a design capacity of 120 tons of ready-made products today. In September, it will start supplying Pyaterochka stores in Moscow. Today, the sale of ready-to-eat product in our stores is 4% and we plan to bring it to around 9% by 2021. We intend to build another smart kitchen in St. Petersburg. Construction is set up to begin in October of this year and scheduled for completion in 2021. We are also happy with the development of our regional supermarket model. In Q2 of this year, like-for-like sales and EBITDA margin of stores in the regional model improved year-to-year basis.We are piloting the lean store project in Perekrestok at the moment. The project focuses on implementing a new storage technology, including the use of product key as well as simplified process of accepting products from [ the ship ]. In pilot store, product acceptance efficiency improved by 25% to 30%. We continue to actively develop the Perekrestok Online business, which is a separate business unit within Perekrestok. It has its own strategy, its own e-mail, logistics and infrastructure. Its aim is to gain leadership in the online food retail space by 2020 and achieve positive EBITDA by 2021 in accordance with the business plan. Perekrestok Online has successfully leveraged partnerships with other market players to expand its product range to include pet products, [ farmers-produced ] [ healthcare foods ] and [indiscernible]. By late 2019, we plan to achieve 8,000 orders per day, more than tripling year-on-year revenue. The average [ ship ], including VAT, reached RUB 3,500 in August. Finally, a few words about Karusel. The hypermarket segment has been under pressure in the recent years. In Q2 of the current year, like-for-like sales growth was positive thanks to like-for-like ticket improvements while sales density was stable. In off-line retail, we plan to focus on X5's 2 largest formats, proximity stores and supermarkets, where the company has market-leading position. We are currently discussing the future for our Karusel store network. Some Karusel stores could grow, some transferred -- transformed to our supermarket division to become larger supermarket while others could be reformed to completely new concept in partnership with other companies. I would like to add that we value our loyal Karusel customers, so we will begin offering our Perekrestok Online service to them as we see customers increasingly shopping online rather than at hypermarket.And now let me update you on the digital transformation, which is our strategic priority. Innovation and omnichannel development are integral parts of this. As I have mentioned earlier, our company is undertaking a digital transformation. We are doing it to improve the quality of our decision-making, gain greater speed and reduce errors in active operational process, improve efficiency and technological solutions for better customer understanding with a view to increase the company project and value, diverting on changing our IT architecture and our approach to IT product management in order to ensure we can complete them faster and more efficiently. In addition, we are changing our corporate culture to encourage continuous innovation. We have expanded the geography of our Perekrestok scouting to include Israel and sales in the Baltic regions, Europe and China. The second pilot store of Perekrestok supermarket is under construction and should be opened by the end of October.Key projects that we piloted at X5 stores included a self-storage checkout developed fully in-house in preparation [indiscernible], electronic price tags, video monitoring and product availability on shelves, customer loyalty terminals providing personalized focus, remote fruit and vegetables quality control at stores, virtual reality training for in-store personnel working at fresh product counters, a new technological solution aimed at reducing electricity cost, smart scale that can automatically identify product and detect real wage. In addition, in a number of Perekrestok and Pyaterochka stores, we are testing solutions based on computer digital technology, which in the future should help us improve in-store operational efficiency. I want to highlight the progress we have achieved so far using big data. We have advanced to a new stage. From pilot, we have moved to implementing big data solution in our business and understanding the benefits they bring to us. A new pricing system based on big data technology is already operating in the Moscow region for more than 1,700 stores. For these pilot stores, we see increase in both revenue and gross margin. We feel confident that the new pricing system will deliver very positive results when rolled out across the entire store network. Our next big task is to leverage big data tools for our consumer demands for customers as well as management of assortment and promo campaign. The Supervisory Board in June approved the establishment of 5 stores as a separate business unit within X5. In this project, we'll make our infrastructure in the last-mile delivery service to our proximity store available to all domestic and cross-border [indiscernible] players. We are currently partnering with a number of companies, including OZON, Lamoda, Ali Express and Unitrade. There are currently over 2,500 lockers available in our stores. By 2020, we expect our share of the last-mile delivery market in Russia to reach 5%.To conclude, let me highlight our priorities for the second half of the current year. We continue to deliver on the strategy that was approved in 2018 in 3 core stream of activity. Short-term measures to improve the current business, medium-term initiatives to create new innovation capability and our long-term goal transforming X5 into Russia's leading next-gen retailor. To improve the current business, we will focus on -- towards enhancing operational efficiency on smart and bulk expansion as well as on the update of our former CVP to changing consumer needs.We will continue to implement innovative technologies and omnichannel business model. This will help us to increase sales by expanding our audience and increasing the share of wallet among our customers.Now I would like to pass the floor to our CFO, Svetlana Demyashkevich. Thank you for your attention.
Thank you, Igor. Good morning and good afternoon, ladies and gentlemen. Let me start with external environment, after which I will give an overview on our financials and provide you with some highlights on our quarter-to-date results. Well, food inflation continued to accelerate in the second quarter 2019 and averaged 5.9% year-on-year after 5.8% in the first quarter. In June and July, we observed relatively sharp slowdown in food CPI to 5.5% versus 6.4% in May. This can be explained by the early harvest of 2019 as well as the overall high domestic supply of greenhouse-produced vegetables. In fourth quarter, food inflation may slow down to less than 5% due to harvest-related seasonality.Demand for food products remained positive in the second quarter of 2019 and stood at 1.6% year-on-year in real terms. Despite increased inflationary pressure, demand was supported by moderately positive real wage dynamics with real wages rising 2.3% in the second quarter. Real disposable income continued to show a negative trend in the second quarter of 2019 as negative 0.2% year-on-year, but the decline moderated after minus 2.5% drop in the first quarter.The unemployment rate fell to a record low of 4.5% in the second quarter 2019. The consumer confidence index continued its slow improvement, edging up to minus 15% in the second quarter from minus 16% in the first quarter. While consumer behavior during this period remained pragmatic and sensitive to promo, no trading downtrends were detected.Before we move on to financial results, I would like to say a few words about return on investment. Moscow and St. Pete continue to demonstrate the highest return on investment levels, ahead of our regional operations. ROIC in this period began to increase in first quarter of 2019 following a period of decline and remained above our target levels. The main drivers behind ROIC improvement are higher labor productivity and improvements of operational efficiency, especially in shrinkage and logistics. Return on investments and profitability trends in the regions also remained in [ cohesion ] as we continue to focus on the quality of new store openings in the regions.Moving on to financial performance in the second quarter. Revenue increased by 14.3% year-on-year in the second quarter 2019 on the back of positive like-for-like sales of 5% and 14.1% rise in selling space. Like-for-like sales growth was positive for all X5 formats. Like-for-like traffic made a greater contribution due to changing customer behavior, more frequent visits to stores with lower purchases. In our proximity format, we are also seeing an inflow of customers from other proximity and hypermarket peers. Our offer in the supermarket segment remains very competitive on prices and assortment, which allows Perekrestok to retain old customers and attract new ones.Looking at the margins in the second quarter. The gross profit margin increased by 105 basis points to 25%. The increase was driven primarily by successful measures to decrease shrinkage levels and improve logistics efficiency, while the commercial margins remained flat due to balanced promo. As planned, the level of promo remained at around 35%. Our efforts to further reduce shrinkage will continue, but the impact on our gross margin will not be as visible as it was in the beginning of the year because our CVP update in core formats is increasing the share of fresh, which has the highest shrinkage level among all categories. We will have to mitigate the structural change with high efficiency in our assortment planning, product quality tracking, marketing and logistics. In second quarter, SG&A expenses, excluding depreciation, amortization, impairment, LTI and share-based payments, as a percentage of revenue increased by 36 basis points mainly due to higher staff costs and other expenses. In today's disclosure, we have provided extensive details about all the factors affecting SG&A, so I would prefer not to spend time on that.Adjusted EBITDA in second quarter increased by 24.2% year-on-year. Our adjusted EBITDA margin rose by 67 basis points to 8.3% mainly due to like-for-like sales growth faster than the number of operating cost items and also supported by gross margin improvements, which I already commented on.In second quarter, we continued to accrue LTI expenses, covering the old LTI and new LTI programs. LTI expenses for the old program totaled RUB 128 million. For the new program, LTI expenses targeting revenue leadership among listed Russian retail peers amounted to RUB 306 million. We are still not accruing LTI expenses targeting leadership on our -- the EBITDA multiple over any of our listed Russian food retail peers.Depreciation and amortization and impairment costs decreased as a percentage of revenue by 15 basis points to 3.2% versus 3.3% for the same period for the second quarter of last year. This was due to revenue growth outpacing the growth of gross book value of assets.In second quarter, net finance was decreased by 6.5% year-on-year due to a low level of gross debt and a decrease in weighted average effective interest rate of our debt. The rate decreased from 8.59% in first half of 2018 to 8.14% in first half of 2019 as a result of actions undertaken by X5 to minimize interest expenses and reflecting the trend of declining key policy rate in Russia. In First half 2019, X5 achieved its lowest ever weighted average effective interest rate since fully switching to ruble-denominated borrowing. X5 effective tax rate for the quarter totaled 26%, including the accrual of deferred tax associated with potential dividend payments. It increased due to the low base effect of second quarter of 2018 impacted by the amended tax returns in the past comparable periods.The company's net profit in the reporting period increased by 55.5% year-on-year to RUB 13.5 billion, while net profit margin reached 3.1%.Turning to our financial leverage. At the end of second quarter, our net debt-to-EBITDA ratio remained at 1.6x under IAS 17. Going forward, we seek to maintain this ratio below 1.8x by paying dividends in line with our dividend policy.Turning to the cash flow now. Net cash flow generated from operating activities in second quarter was RUB 31.8 billion, up from RUB 13.9 billion a year ago driven by business growth, improved profitability and stronger results in working capital management. The change in working capital in the second quarter of 2019 was positive RUB 1.9 billion compared with negative RUB 8.1 billion reported in second quarter 2018. This was mainly due to an increase in accounts payable and a smaller increase in inventories year-on-year due to better inventory management. Net cash used in investment activities increased to RUB 18.2 billion in second quarter 2019 compared with RUB 23.8 billion in second quarter 2018. The decline was mainly due to slow pace of new openings and greater discipline in capital allocation.Now a few words about CapEx. X5's total capital expenditure amounted to RUB 21.8 billion in second quarter compared to RUB 20.4 billion last year. Approximately 54% of CapEx in second quarter of this year went to expansion of our store base. The remaining CapEx includes refurbishments, around 6%; logistics, 14%; IT, 8%; maintenance, 8%; and other investments. Our CapEx in first half of this year totaled RUB 34.2 billion, which is below our budget for the first half of this year. We have left our guidance of RUB 80 billion, RUB 90 billion for total CapEx of '19 unchanged, and we'll provide further details at our Capital Markets Day in October.Finally, I will give a short update on the quarter-to-date results before we go to the Q&A session. Total turnover, including VAT, grew by 14.2% year-on-year, and net retail sales growth, excluding VAT, was around 13.6%. Like-for-like sales rose by 4.1%. With that, I would like to conclude the discussion of our results. Thank you for your attention, and of course, we are ready for all your questions.
Yes. Operator, please open the call for the questions. [Operator Instructions]
[Operator Instructions] And we do have questions that came through. Your first question comes from the line of Nikolay Kovalev.
I have one question but with 2 parts. You mentioned flat commercial margin and lower shrinkages on a gross level, but my question is how your pressuring terms changed? And if so, did you see a sizable improvement? And also, you mentioned quite good improvement in employee turnover and shrinkage, and can you comment this year room for further optimization or the low-hanging fruits are pretty much over?
Thank you for your question. So yes, the commercial margin remained flat. At the same time, within that, we did have our regular improvement in terms with suppliers, which was also partially offset by investments in place, which we regularly do. You know that we usually pass inflation to our shelf. Not in full amount, but usually it's from 50% to 70% of food CPI, which is transferred into the prices on our shelves. And that's why, every year, it's important for us to have successful renegotiations of terms with suppliers to be able to invest more in our clients.In regards to shrinkages. Yes, we had the very good trend for the last year. Actually, it started from August, September last year and continued in the first half of this year. We have sizable improvement of around 1% in shrinkages. At the same time, we still see the space for further improvement, but it will not be that sizable. But of course, the format in Pyaterochka especially still has a target to fill the improved level of shrinkages. We also continuously see improvements in logistics cost due to economy of scale due to our developments in the regions, and that also helps us with improvements in our efficiency in logistics. Personnel turnover decreased around 10%, actually, in all formats. So it was part of our strategy. It's one of key KPIs for top management and the management in the formats. So we do implement programs not only in terms of investments of personnel, which you do see in our numbers of the staff cost, but also we are doing a lot of nonmonetary motivational programs working with personnel trainings; new forms of trainings, electronic trainings; even in Perekrestok, virtual reality trainings; and of course, working with people. I think in Pyaterochka especially, we have new approach to our HR processes and new approach to working with our middle management in regards of approach to personnel. So that all gives sizable results and you can see it also in our numbers in terms of efficiency.
Okay. That's pretty much clear. But to complete the answer, can you mention the levels of shrinkage and turnover this year at the moment? And also if improvements are applicable for both convenience and Perekrestok format or only in Pyaterochka?
We don't give guidance regarding the number of shrinkages, I just can repeat what Svetlana already mentioned. We did a lot of efforts to improve the shrinkages, but still, shrinkage remains above the target level and will continue to reduce. And at the moment, we are in the process of a big project in Pyaterochka, it is called freshness, yes? And we already started the rollout of this -- the result of this project in Moscow, and we have plan to finish this project in the end of the year. And so we are planning to roll out the new element of our local freshness in all Pyaterochka during last -- next year, and we are going to have some more improving of the shrinkages level.
And your next question comes from the line of Maria Kolbina.
Congratulations on the numbers. So the first question is on your promo activity in the third and, I believe, in the fourth quarter this year. So you achieved a very decent level of margins in the second quarter. Do you think you will be more promo-driven in the third quarter as you've already created quite a strong profitability cushion for the year-end? And if so, are you already doing -- are you already more promo-driven in July and August? And how much of your profitability, if you can indicate, is already invested into price?
Thank you for congratulations on our results, we're also quite happy. And yes, as I said, we believe that we are ahead of our budget for the first half of the year in terms of our financial results. We do have the ability to invest more not only in prices but also in our personnel and marketing, and we do see that it gives very positive results in terms of like-for-like revenue and overall NPS level, which is also very important for us. I would say that in terms of metrics, we -- of course, financial metrics are very important for us, but the client centricity is really in place so -- and centricity on our employees. So I would say that increase of our Net Promoter Scores and our decrease in turnover of our in-store personnel is very important, and we'll be looking forward to see the further trends.In terms of investments into prices, we had it for this year in our budget. As I said we usually are quite active in terms of promo activities and investments in third quarter and first quarter. This year will not be an exception. We will probably see the same trends as we see every year. So we do expect EBITDA margin levels pretty much be flat comparing with last year levels. So we are quite sure that we'll be able to continue our operations with EBITDA margin above 7%, which we are happy with. And of course, we think that we'll be able to remain leaders in food retail at the market, to grow faster than the market and to develop new capabilities in -- to attract new customers, which is also very important, through our new offerings.
Okay. So do I get to derive that July and August was not promo-driven than, in general, the second quarter of the year? And what is the current share of promo, and how does it compare to the second quarter?
Well, I wouldn't say that the level -- we didn't have a significant increase in levels of promo. I would not be ready to disclose the number now, actually. As you know, we're just disclosing like-for-like sales, which I was commenting on. We have very positive results of minus 1%, up to date. And as I said, of course, usually, beginning of September, our usual promo activities related to beginning of the school year, fourth quarter, as usual. So I would say that we're working in the normal environment.
Okay. And my second question is on your store formatting. So you opened like a role model for Pyaterochka and Perekrestok recently. I think there were a few in openings in both formats since the beginning of the year. So do you consider them like as a role model for you? Or you're still working on the concept? If you can share the results that you see, and do you plan to implement them on like a company scale than you're looking for Pyaterochka and Perekrestok? So can you share some information on the recent openings?
We are still experimenting with the new elements opportunity, I would say. And there are a number of stores in Moscow, which are opened for Pyaterochka, for example, with new elements. But if you visit them, you will see that they sometimes even look slightly differently with trial of different elements. So we are still in the process of developing this new model. As we -- as Igor already mentioned, we will talk about it in more details at our Capital Markets Day in London end of October. And I think you will be able to see the stores by the end of the year for both Pyaterochka and Perekrestok.
We will finally approve the new facility of Pyaterochka in the end of September, beginning of October. And as I already mentioned, in our Capital Markets Day, we'll be able to present to you the new concept in our Capital Markets Day. But some of new elements will be included, some change in our assortment, another approach to our private label as well as some of a more bigger range of ready-to-eat, which is a very important trend in the market. Regarding the Perekrestok, you can visit some of the piloting store we just opened. It's [indiscernible] where some new element of the CVP already exist, but -- as well as the final element of Perekrestok CVP will be at the end of the year. We're still in progress.
But for this month, we are...
Will you share like-for-like and also impact on the...
Sorry. Can you repeat, please?
And you share like-for-like data on these stores or sales [indiscernible] for this [indiscernible].
No. It's just a pilot in stores, and we exist several months, we will be not able to say any like-for-like or financial indicator of this pilot in store because of a very short period of time.
But of course, when we are taking new elements of this CVP concept, the only elements which stay in the existing stores are the ones which give positive results. So of course, we would say that all the changes that will stay in the final format are giving positive results in terms of like-for-likes and margins.
[Operator Instructions] Okay. We now have our next question, and this comes from the line of Yulia Gerasimova.
Congratulations on the very strong results. I also have a question on the dividends because what we are seeing currently is that you're behind your CapEx budget, though you have not adjusted the guidance yet, and your free cash flow has improved very strongly in the second quarter. So that all points to the better dividend payout, but your current dividend policy is only minimum 25%. So -- which kind of offers a lot of the room for maneuver, actually, and for us as well to think how -- what's going to be the payout for the next year. Maybe can you just please comment for us how should we think about the dividend for the next year in the context of the good result that you have shown?
Yulia, thank you also for feedback. So on dividends, as I said, we are not changing our guidance for CapEx. It will depend, of course, on M&A activities. As you remember, last year, our final CapEx was less than budgeted also because of less of M&A activities. And to be honest, we see less and less targets in the markets, which could be interesting for us. So at the same time, we think that CapEx for the year will stay in the range from RUB 80 billion to RUB 90 billion. Usually, the -- it cease up -- the pace of spending cease up in the third and fourth quarter when all the projects are closer to the finishing stage. Talking about our dividend policy, yes, you're right that we only have this minimum requirement of 25% net profit. But as we already explained before, we will be looking at our debt-to-EBITDA situation and ratios. Now as we see, it's quite conservative, it's 1.6x, we think that we will not be willing to decrease it further. So we'll be able to pay higher, probably, dividends than 25% of net profit. As you remember, last -- well, this year, dividend for last year payout ratio was 87%, plus when we were discussing the argumentation for the amount of dividend, we were also looking at the trend for absolute amounts of dividends, both in rubles and dollars. So our intention, at least, is to demonstrate steady growth of absolute number in -- both in terms of rubles and dollar amount. That's probably the guidance I will give.
Okay. And my second question will be to Igor. In his presentation, he commented about the new pricing system based on the big data tools. I just wanted to understand what's the plan for the rollout of this new pricing system to all of the stores because currently it's only on 1,700 stores, and if you can quantify what kind of uplift you're seeing in terms of the revenues, if it's possible.
Regarding the rollout, we are planning to roll out in all our Moscow stores in this year, and next year, it will be rolled out in all our stores. Regarding the number of uplift, unfortunately, we couldn't talk on this information.
No further questions have come through at this time. Please continue.
Ladies and gentlemen, if there are no further questions at this point, we'd like to thank you for participation in our call today. Let me remind you that X5 Retail Group will hold the Capital Markets Day on October 23 in London. The registration link will be distributed via e-mail tomorrow. We look forward to seeing you at our event. Have a good day. Good afternoon. Thank you, and goodbye.
Thank you.
Thank you. And that concludes our conference for today. Thank you all for participating. You may now disconnect. Speakers, please stand by.