Slide 1: Investor Presentation: 9M 2016 Operational Results
INVESTOR PRESENTATION 9M 2016 OPERATIONAL RESULTS published on October 21, 2016
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance As of September 30, 2016 2 436 13 364 Total Number 4 825 5 779 33 Cities & Towns thous.sq.m. Trucks DCs of Stores Selling Space As of September 30, 2016 №1 $20 bn >7% Retailer in Europe Market Share in Russian in Market Capitalization Grocery Sector Capitalizati
Slide 3: Key Metrics
Magnit at a Glance Key Metrics Figures for 9M 2016 =P 790bn 14,4 % Revenue growth Revenue growth 9M 2016 Y-o-Y Net EBITDA Net debt/ Margin Margin LTM EBITDA 5,18% 10,16% 1,1* Guidance for FY2016 New Hypermarkets New Drogerie Stores New Convenience Stores 1 000-1 100 80 1 200 Sales Growth Rub EBITDA
Slide 4: Strategy
Magnit at a Glance Strategy Growth Multi-format Organic Geographic Density of Store Store Growth Scope Coverage Value Efficiency Low High Assortment Cost Vertical Centralization Prices Quality Management Integration 4
Slide 5: Russian Food Retail Market
Magnit at a Glance Russian Food Retail Market bn RUB 13 410 65 % Market Modern Size Retail FY 2015 Penetration Market Composition by Format Non-Modern 35% 65% Modern Open Markets 7% Top-7 Retail Chains 22,5% Traditional Trade 28% Other chains Modern Non-Chain 26% Stores 16,5% Source: INFOLine, as of
Slide 6: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number Revenue Market Cap Market Share thous. sq.m., eop of Stores, eop 2015 RUB bn, eop 2015 US$ bn, eop 2015 %, eop 2015 2015 Magnit 12 089 4 414 950,6 19,0 7 X5 7 020 3 333 808,8 5,1 6 Dixy 2 708 908 272,3 0,5 2 Lenta 172 882 252,8 3,3 2 Okey 146 5
Slide 7: Geographical Coverage
Operational Overview Geographical Coverage 2 436 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 362 380 Convenience Stores 1 698 2 754 3 016 1 009 919 10 138 8 Hypermarkets 8 64 38 66 14 30 228 Magnit Family 6 44 34 53 15 15 12 179 119 Drogerie Stores
Slide 8: Logistics System
Operational Overview Logistics System 33 1 335 13 364 5 779 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 448,415 3 856 Centralization Ratio Central 9 % Volga 8 283,871 4 082 9M2016 Future Targets Convenience Stores Southern 8 310,387 2 340 Delivered from DC 90 92 Urals 3 142,533 1
Slide 9: Suppliers
Operational Overview Suppliers 5 800 Domestic Suppliers 1 200 Federal Suppliers 4 600 Local Suppliers 55% 45% Assortment Source: Company, as of December 31, 2015 9
Slide 10: Direct Import and Private Label
Operational Overview Direct Import 9 % 757 International Open Direct Import Contracts Private Label 621 10 % 82% PL Share Food SKUs of Revenue Items M Source: Company, Direct Import – as of December 31, 2015; Private Label – as of September 30, 2016 10
Slide 11: Employees
Operational Overview Employees 261 148 Employees 191 550 In-store 35 539 21 021 People in Regional 10 598 People Employed 2 440 Other People Engaged Personnel in Distribution Branches by Head Office 1000 employees P 31 650 11% Wage Rate = Average Monthly Increase* Salary* Source: Company, as of Sept
Slide 12: Competitive Attributes and Sales Catchment Area
Operational Overview Competitive Attributes Location Prices Quality Assortment Reliability Atmosphere (of Products) Sales Catchment Area 5 000 People — Minimum Population Competitor #1 Competitor #2 (1 500–1 600 Families) 500m Magnit #1 P4 000-9 500 = Monthly Family Food Budget Overlap “Good” 43-45
Slide 13: Convenience Store
Convenience Store
Slide 14: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 464 P 241,7 sq.m. Total = 327 Selling Space sq.m. $3,5 3 years Traffic tickets/sq.m./day If Owned Sales Mix 89 % Food 2,7 4-6 years Sales Density 11% Non-fo
Slide 15: Hypermarket
Hypermarket
Slide 16: Hypermarket
Operational Overview Hypermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 6 491 P 592,2 sq.m. Total = 6-9 years 2 892 Selling Space sq.m. $8,7 Traffic Cost of New Store S: up to 3 000 tickets/sq.m./day per sq.m. of Total Space, thousand RUB M: 3
Slide 17: Magnit Family
Magnit Family
Slide 18: Magnit Family
Operational Overview Magnit Family Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 2 135 P 442,3 sq.m. Total = 6-9 years 1 097 Selling Space sq.m. $6,5 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 1,9 Owne
Slide 19: Drogerie Store
Drogerie Store
Slide 20: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 291 P 305,6 sq.m. Total = 231 Selling Space sq.m. $4,5 3 years Traffic tickets/sq.m./day If Owned Sales Mix 100 % Non-food 0,9 4-6 years Sales Density sales/sq
Slide 21: Format Summary
Operational Overview Format Summary Size Average Traffic Density Sales LFL 9M2016- Store Owner- Payback Cost of New Time of the Store Ticket Tickets/ Sales/ Mix 9M2015 ship Structure Years Store to Maturity sq.m. sq.m./day sq.m./year % per sq.m. Months of Total Space • Total • Food • Av.ticket • Own
Slide 22: Summary P&L
Financial Overview Summary P&L 1H2015 / 1H2016 RUB MN 1H2015 1H2016 Y-o-Y Growth Net sales 454,808.63 521,527.57 14.7% Cost of sales (327,748.22) (379,464.58) 15.8% Gross profit 127,060.41 142,062.99 11.8% Gross margin, % 27.94% 27.24% SG&A (79,406.25) (92,661.97) 16.7% Other income, net 937.45 2,13
Slide 23: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Sales Growth, RUB Net Income Dynamics RUB bn RUB bn Sales Growth, RUB +14,7% +3,3% +29,0% +30,3% 26 25 522 20 455 349 LFL LFL 11,5% -0,5% 1H2014 1H2015 1H2016 1H2014 1H2015 1H2016 SG&A Expense Structure Margin Dynamics Revenue — 522 RUB bn in SG&A,
Slide 24: Gross Margin Bridge and EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales -70 b.p. 33 +11 b.p. 31 27,83 -0,42 0,64 -0,11 27,94 -0,60 0,06 27,24 29 -0,16 27 25 23 21 19 17 15 GM Trading Margin Transport Losses GM Trading Margin Transport Losses GM 1H2014 1H2015 1H2016 EBITDA Margin Bridge % of Sales +22 b.p. -80 b.p. 12 10,
Slide 25: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 1H 2015 49 065 -2 239 -5 735 Working Capital Analysis -4 755 36 336 -24 434 The Average Days Payable to Suppliers is 38 Days. -351 11 551 -19 299 1 972 -5 777 Inventory Management Days is 57 Days 1H 2016 51 182 -16 964 Working Capital: RUB 34 258 mn as of -6
Slide 26: Balance Sheet
Financial Overview Balance Sheet RUB MN 2014 2015 1H2016 ASSETS Property plant and equipment 232,968.80 265,995.94 275,088.83 Other non-current assets 6,043.82 6,380.79 6,102.59 Cash and cash equivalents 17,691.54 8,390.90 4,885.52 Inventories 81,475.66 116,471.59 123,665.09 Trade and other receivab
Slide 27: Capex Analysis
Financial Overview Capex Analysis Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 2015 (Actual) 1 36 231 15 750 541 1 753 RUB 54 bn RUB 500 mn Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 2016 (Estimates) 2 41 000 23 000 1 00
Slide 28: Debt Burden
Financial Overview Debt Burden Debt Level Dynamics Credit Metrics Credit Profile RUB mn Net Debt EBITDA / Finance Expenses The Company Has Short-term Debt Long-term Debt 14,0 12,9 an Impeccable Credit History % 120 167 115 282 12,0 Collaboration with 104 228 34 960 95 667 95 837 10,0 the Largest Ban
Slide 29: Contact Information
Contact Information Contact Information Timothy Post Head of Investor Relations post@ir.magnit.com http://ir.magnit.com 15/2 Solnechnaya Street Krasnodar, 350072 Russian Federation 29