Slide 1: Investor Presentation: 1H 2017 Financial Results
INVESTOR PRESENTATION 1H 2017 FINANCIAL RESULTS published on August 25, 2017
Slide 2: Magnit at a Glance
Magnit at a Glance Magnit at a Glance As of June 30, 2017 2 567 14 844 Total Number 5 320 5 630 35 Cities & Towns Selling Space Trucks DCs of Stores (thous.sq.m.) As of June 30, 2017 №3 $16 bn 8 % Market Share in Russian Retailer in Europe Capitalization Grocery Sector in Market Capitalization (As o
Slide 3: Key Metrics
Magnit at a Glance Key Metrics Figures for 1H 2017 Total Revenue 1H 2017 Revenue Growth Y-o-Y P = 555 bn 6,42 % Net EBITDA Net Debt/ Margin Margin LTM EBITDA 3,74% 8,79% 1,3 Guidance for FY 2017 New Convenience Stores New Hypermarkets New Magnit Family Stores 2 000+ 13 15 New Drogerie Stores Sales G
Slide 4: Russian Food Retail Market
Magnit at a Glance Russian Food Retail Market trillion RUB 13,7 69 % Market Modern Size Retail FY 2016 Penetration FY 2016 Market Composition by Format Non-Modern 31% 69% Modern Open Markets 7% Top-7 Retail Chains 26% Traditional Trade 24% Other chains 28% Modern Non-Chain Stores 15% Source: INFOLin
Slide 5: Magnit vs Peers
Magnit at a Glance Magnit vs Peers Selling Space Number Revenue Market Cap Market Share thous. sq.m., of Stores, eop 2016 RUB bn, eop 2016 US$ bn, eop 2016 %, eop 2016 eop 2016 Magnit 14 059 5 068 1 074,8 20,9 8 X5 9 187 4 302 1 033,7 8,8 8 Dixy 2 802 953 311,2 0,6 2 Lenta 240 1 146 306,4 4,0 2 Auch
Slide 6: Geographical Coverage
Operational Overview Geographical Coverage 2 567 Cities & Towns 7 Federal Regions North Southern Central Volga North Urals Siberia Caucasus West 366 471 Convenience Stores 1 754 3 104 3 241 1 147 1 031 11 114 9 Hypermarkets 9 68 39 68 15 32 240 Magnit Family 9 50 36 51 16 16 12 190 148 Drogerie Stor
Slide 7: Logistics System
Operational Overview Logistics System 35 1 571 14 844 5 630 Trucks DCs thous.sq.m. Total Number Warehousing Space of Stores 4 175 Centralization Ratio Central 9 477 % 4 747 Volga 9 435 1H2017 Future Targets Delivered from DC 2 478 87 Southern 8 308 88 1 318 Delivered from supplier Urals 3 141 13 12
Slide 8: Suppliers
Operational Overview Suppliers 5 800 Domestic Suppliers 1 200 Federal Suppliers 4 600 Local Suppliers 55% 45% Assortment Source: Company, as of June 30, 2017 8
Slide 9: Direct Import and Private Label
Operational Overview Direct Import 8 % 751 International Open Direct Import Contracts (Annual Average) Private Label 600 10 % 82% PL Share Food SKUs of Revenue Items M Source: Company, Direct Import – as of December 31, 2016; Private Label – as of June 30, 2017 9
Slide 10: Employees
Operational Overview Employees 280 138 Employees 206 084 36 134 23 017 Regional 12 420 2 483 Head Office Other In-store Distribution Branches 1000 employees P 33 475 = Average Monthly Salary Source: Company, as of June 30, 2017 10
Slide 11: Competitive Attributes and Sales Catchment Area
Operational Overview Competitive Attributes Location Price Quality Assortment Reliability Atmosphere 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 % of Family Can
Slide 12: Convenience Store
Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 464 P 251,8 sq.m. Total = 329 Selling Space sq.m. $4,3 3 years Traffic tickets/sq.m./day If Owned Sales Mix 89 % Food 2,5 4-6 years Sales Density 11% Non-fo
Slide 13: Hypermarket
Operational Overview Hypermarket Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 6 401 P 585,0 sq.m. Total = 6-9 years 2 879 Selling Space sq.m. $10,1 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 14: Magnit Family
Operational Overview Magnit Family Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback 2 116 P 442,8 sq.m. Total = 6-9 years 1 100 Selling Space sq.m. $7,6 Traffic Cost of New Store tickets/sq.m./day per sq.m. of Total Space, thousand RUB Sales Mix 1,7 Owne
Slide 15: Drogerie Store
Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback If Leased 291 P 305,8 sq.m. Total = 233 Selling Space sq.m. $5,3 3 years Traffic tickets/sq.m./day If Owned Sales Mix 100 % Non-food 0,9 4-6 years Sales Density sales/sq
Slide 16: Format Summary
Operational Overview Format Summary Size Average Traffic Density Sales LFL 1H2017- Store Owner- Payback Cost of New Time of the Store Ticket Tickets/ Sales/ Mix 1H2016 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 17: Summary P&L
Financial Overview Summary P&L 1H2016 / 1H2017 RUB MN 1H2016 1H2017 Y-o-Y Growth Net sales 521,527.57 555,024.83 6.4% Cost of sales (379,464.58) (402,478.35) 6.1% Gross profit 142,062.99 152,546.49 7.4% Gross margin, % 27.24% 27.48% SG&A (92,661.97) (106,643.26) 15.1% Other income, net 2,138.69 2,78
Slide 18: Revenue & Costs
Financial Overview Revenue & Costs Revenue Dynamics Net Income Dynamics RUB bn Sales Growth, RUB Sales Growth, RUB RUB bn +14,7% +6,4% +3,3% -20,5% 25 26 522 555 21 455 LFL LFL -0,5% -3,1% 1H2015 1H2016 1H2017 1H2015 1H2016 1H2017 SG&A Expense Structure 1H 2017 Margin Dynamics Revenue — 555 RUB bn i
Slide 19: Gross Margin Bridge and EBITDA Margin Bridge
Financial Overview Gross Margin Bridge % of Sales 33 -70 b.p. +24 b.p. 31 27,94 27,24 -0,21 29 -0,76 0,06 0,45 27,48 27 25 23 21 19 17 15 GM Trading Margin Transport GM Trading Margin Transport GM 1H2015 1H2016 1H2017 EBITDA Margin Bridge % of Sales -80 b.p. -110 b.p. 12 10,69 -0,70 0,43 -0,75 0,09
Slide 20: Free Cash Flow
Financial Overview Free Cash Flow RUB mn 1H 2016 51 182 Working Capital Analysis -16 964 -6 796 -3 903 -21 018 Average Days Payable to Suppliers is 23 519 35 Days. -127 2 374 -20 982 15 102 -3 505 Adjusted Change in Net Interest Taxes OCF Capex Other Cash FCF Payment of Other Cash CF Inventory Manag
Slide 21: Balance Sheet
Financial Overview Balance Sheet RUB MN 2015 2016 1H2017 ASSETS Property plant and equipment 265,995.94 289,945.35 300,106.95 Other non-current assets 6,380.79 6,080.58 6,346.18 Cash and cash equivalents 8,390.90 16,559.27 5,607.38 Inventories 116,471.59 134,915.71 150,360.84 Trade and other receiva
Slide 22: Capex Figures
Financial Overview Capex Figures Buildings: Complete & under Machinery & Equipment Other Assets Land Construction FY 20161 31 691 16 326 373 1 455 RUB 50 bn RUB 500 mn 1CAPEX for 1H2017 amounts to RUB 26,549 mn Source: Company’s calculations based on IFRS accounts for 2016 22
Slide 23: 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 127 606 144 558 138 951 14,0 an Impeccable Credit History % 111 047 32 976 12,0 Collaboration with 104 228 95 837 10,0 the Largest
Slide 24: 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 24