Magnit

Earnings Release • Jul 29, 2021

National Storage Mechanism | Additional information

MAGNIT PJSC (MGNT)

Magnit reports 9.6% total sales growth, 5.2% LFL sales growth and 7.1% EBITDA margin in 2Q 2021

29-Jul-2021 / 09:59 MSK

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.

The issuer is solely responsible for the content of this announcement.

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Magnit Reports 9.6% total sales growth, 5.2% LFL Sales Growth and 7.1% EBITDA margin in 2Q 2021

Krasnodar, Russia (July 29, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, announces its 2Q and 1H 2021 operational and unaudited financial results.

9.6% TOTAL REVENUE growth	2Q 2021 Key Operational and Financial Highlights - Total revenue increased by 9.6% y-o-y to RUB 424.3 billion; - Net retail sales reached RUB 413.7 billion increasing 9.1% y-o-y; - LFL[1] sales growth of 5.2% driven by 10.0% traffic growth and 4.4% reduction in average ticket;
5.2% lfl sales growth	- The Company opened 519 stores on gross basis (308 convenience stores, one supermarket and 210 drogeries). As part of the Company's ongoing efficiency improvement campaign, 75 stores were closed resulting in a net store addition of 444. As of June 30, 2021 the total store base was 22,344; - Selling space increase of 142 thousand sq. m. bringing total selling space to 7,748 thousand sq. m. (6.3% y-o-y growth); - The Company redesigned 143 stores (131 convenience stores and 12 supermarkets). As at June 30, 2021, 74% of convenience stores, 34% of supermarkets and 59% of drogeries are either new or refurbished; - Gross profit increased by 5.5% y-o-y to RUB 99.5 billion with a margin of 23.4% as a result of better promo margin, lower shrinkage and favorable format mix partially offset by slightly higher supply chain costs and promotional share;
7.1% EBITDA margin	- EBITDA was RUB 30.3 billion with a 7.1% margin driven by gross margin dynamics and strict cost control; - Net income of RUB 12.1 billion with a margin of 2.8%.

« ### Jan Dunning Magnit's President and CEO »	"Despite the strong comparable performance last year we delivered a very good set of results for the second quarter. Sales growth accelerated across all formats, underpinned by further growth in LFL sales and rapid expansion. I am pleased to see mature stores as a key driver of these improvements. Consumer behavior and shopping patterns are now normalizing. Since June we have seen healthy LFL performances, with positive ticket and traffic development. Magnit continues gaining market share, and our engagement with existing customers is positive, reflected by increased frequency, increased spend per visit and 'trading up' behaviours. In delivering a 7.1% EBITDA margin with sustainable q-o-q improvement we are on track to perform in line with our strategy both this year and beyond, having already made excellent progress as evidenced by improvements across margin and working capital cycle as well as very comfortable levels of leverage already achieved. Continuous improvement of sales densities, sustainable margins, better cash generation and flexible financial position allowed us to speed up organic expansion and take advantage of a unique and value-accretive M&A opportunity through the acquisition of Dixy. This is a strategically important transaction for Magnit that dramatically changes our market positioning. Integration of such large business and extraction of synergies will, of course, take time and effort, however, our ambitious long-term targets remain unchanged and may be achieved even a bit earlier".
~50 RUB billion total amount of dividends announced for 2020 76 hard disounters in operation	### Key events in 2Q 2021 and after the Reported Period - Magnit completed its strategic acquisition of the DIXY retail chain comprising 2,477 stores in Russia significantly strengthening competitive positions in the Moscow and St. Petersburg markets; - A new Board of Directors consisting of nine members, including five independent non-executive directors, were elected at the Company's AGM. For the fourth consecutive year Charles Ryan was elected a Chairman of the Board of Directors; - The Board called an EGM with a view to increasing the size of the Board of Directors from 9 to 11 members; - Magnit announced FY 2020 dividends of c. RUB 25 billion or RUB 245.31 per one ordinary share bringing the total dividend payment to RUB 50 billion (RUB 490.62 per ordinary share), which is 61% higher than in the previous year; - Two issues of the exchange-traded bonds in a value of RUB 10 billion each with an interest rate of 7.05% per annum were placed on MoEx. Analytical Credit Rating Agency ACRA assigned credit rating AA (RU) to each bond issue; - Magnit increased its discounter pilot to 76 stores and reported 20-30% LFL sales growth across discounter stores converted from convenience stores; - Magnit continued developing its super app and became the first retailer in Russia to introduce a Credit Broker online service; - Magnit launched its own delivery service from Magnit Cosmetic stores and superstores across numerous regions; - Magnit and Wildberries launched express delivery partnership.

2Q and 1H 2021 Operating Results

Retail Sales

	2Q 2021	2Q 2020	Change	Change, %	1H 2021	1H 2020	Change	Change, %
Total Net Retail Sales, million RUB	413,693	379,174	34,519	9.1%	801,592	743,959	57,634	7.7%
Convenience Stores[2]	324,476	295,796	28,680	9.7%	624,418	575,591	48,827	8.5%
Supermarkets[3]	51,513	49,992	1,521	3.0%	101,628	100,955	673	0.7%
Drogerie Stores	35,240	30,876	4,365	14.1%	70,252	62,282	7,970	12.8%
Other Formats[4]	2,464	2,511	-47	-1.9%	5,295	5,131	163	3.2%
Number of Tickets, mln	1,243	1,092	151	13.8%	2,346	2,287	59	2.6%
Convenience Stores	1,051	920	132	14.3%	1,974	1,922	52	2.7%
Supermarkets	86	78	8	10.0%	164	168	-3	-2.0%
Drogerie Stores	99	87	12	14.4%	193	181	12	6.5%
Other Formats	7	7	-1	-10.6%	14	16	-1	-9.3%
Average Ticket[5], RUB	333	347	-14	-4.2%	342	325	16	5.0%
Convenience Stores	309	322	-13	-4.0%	316	300	17	5.6%
Supermarkets	602	643	-41	-6.4%	618	602	17	2.8%
Drogerie Stores	356	356	-1	-0.2%	364	344	20	5.9%
Other Formats	356	326	30	9.2%	357	315	42	13.3%

Stores and Selling Space

	2Q 2021	2Q 2020	Change	Change, %	1H 2021	1H 2020	Change	Change, %
Number of Stores (EOP)	22,344	20,894	1,450	6.9%	22,344	20,894	1,450	6.9%
Convenience Stores	15,348	14,581	767	5.3%	15,348	14,581	767	5.3%
Supermarkets	469	472	-3	-0.6%	469	472	-3	-0.6%
Drogerie Stores	6,527	5,841	686	11.7%	6,527	5,841	686	11.7%
Store Openings (Net)	444	34	410	n/a	780	169	611	361.5%
Convenience Stores	250	-13	263	n/a	437	-41	478	n/a
Supermarkets	-2	0	-2	n/a	-1	-1	0	0.0%
Drogerie Stores	196	47	149	317.0%	344	211	133	63.0%
Total Selling Space (EOP), th. sq.m	7,748	7,290	458	6.3%	7,748	7,290	458	6.3%
Convenience Stores	5,275	4,956	320	6.4%	5,275	4,956	320	6.4%
Supermarkets	943	944	-1	-0.1%	943	944	-1	-0.1%
Drogerie Stores	1,500	1,350	151	11.2%	1,500	1,350	151	11.2%
Other formats	30	41	-11	-26.9%	30	41	-11	-26.9%
Selling Space Addition (Net), th. sq.m	142	14	129	n/a	252	52	200	n/a
Convenience Stores	106	4	102	n/a	186	4	182	n/a
Supermarkets	-1	-3	3	n/a	1	-5	6	n/a
Drogerie Stores	40	11	29	n/a	72	47	25	n/a
Other formats	-4	2	-5	n/a	-8	5	-13	n/a

2Q and 1H 2021 LFL Results

	2Q 2021			1H 2021
	Average Ticket	Traffic	Sales	Average Ticket	Traffic	Sales
Total	-4.4%	10.0%	5.2%	4.7%	0.0%	4.7%
Convenience Stores	-4.4%	10.5%	5.7%	5.1%	0.2%	5.3%
Supermarkets	-6.5%	9.1%	2.0%	2.5%	-1.8%	0.7%
Drogerie Stores	-0.7%	6.2%	5.5%	5.5%	-0.6%	4.9%

4.6% LTM sales density[6] improvement y-o-y	### Trading Performance Total sales in 2Q 2021 grew by 9.6% y-o-y to RUB 424.3 billion. Net retail sales grew by 9.1% y-o-y, driven by a combination of 6.3% selling space growth and 5.2% LFL sales growth. Net retail sales growth continued to outpace selling space growth on further improvement of sales densities. Overall sales densities in 2Q 2021 improved by 1.0% q-o-q and 4.6% y-o-y while in the Company's main convenience store format these improved by 5.9% y-o-y.
93% of selling space is already matured 10.0% lfl traffic growth in 2Q 2021	LFL sales growth accelerated from 4.1% in the previous quarter to 5.2% in 2Q 2021 predominantly driven by the strong performance of mature stores. 107 stores entered LFL in 2Q (including 41 convenience stores, 65 drogeries and 1 supermarket). Only 7% of Magnit's selling space is currently in the 'ramp-up' phase with 93% already matured. In the reported quarter the structure of LFL sales growth has changed compared to five previous consecutive quarters. Strong LFL traffic growth driven by firstly inflow of new unique customers and then by rising visit frequency, became the main contributor. Magnit continued gaining customers from traditional retail and other market players. This comparable performance peaked in end-March and started easing since April, resulting in 10.0% LFL traffic growth vs 9.4% decline in 1Q 2021. LFL average ticket decreased by 4.4% due to the strong comparable performance. The only contributor to the reduction in average ticket was a reduction of the average number of items per basket as consumer behavior started normalizing after abnormal patterns and strong forward buying during periods of lockdown. After its peak in February, on-shelf price inflation corrected slightly and stabilised in the second quarter. Ongoing trading up was another positive driver of the ticket growth. These effects were observed in the beginning of the reported quarter with gradual normalization month-on-month, leading to both positive LFL traffic and ticket development in June supported by trading up and healthy inflation. A decline in the overall average ticket in April-May was again a result of a strong performance during the prior period, however from June growth returned combined with positive y-o-y growth of customer visits (see Appendix). Acceleration of revenue and LFL sales growth versus the previous quarter was delivered despite promotional share as a % of sales remaining flat compared to the previous quarter and was up y-o-y due to weaker comparatives, normalizing shopping patterns and efficient seasonal promotional campaigns supported by favorable weather conditions and the timing of the domestic tourist season.
50 mln of loyalty program active users	During the reported quarter the number of active loyalty card users exceeded 50 million. Company-wide, the share of tickets using the loyalty card was 50% with sales penetration of 65%. The loyalty program continues to deliver positive cross-format gains with sustainable growth of customers visiting 2+ store formats (41% of Magnit customer base at the end of the reporting period).

78.4% of total net retail sales generated by convenience segment	### Store Network Development and Performance by Format The convenience segment generated 78.4% of total net retail sales in the reported quarter. In 2Q 2021 Magnit accelerated its expansion program both q-o-q and y-o-y and opened (gross) 308 convenience stores (94 in 2Q 2020). The Company continued its efficiency campaign and closed 58 convenience stores vs 107 store closures in 2Q 2020. As a result, Magnit added 250 stores (net) during the reported quarter. The selling space growth of convenience stores accelerated to 6.4% y-o-y. Sales in the convenience format grew by 9.7% driven by LFL sales growth of 5.7% and selling space growth of 6.4%. LFL average ticket growth was negative and stood at -4.4% against strong comparatives. LFL traffic increased 10.5%, overcompensating negative LFL average ticket growth.
12.5% of total net retail sales generated by supermarkets	Supermarkets generated 12.5% of the Group's net retail sales in the reported quarter. During 2Q 2021 the Company opened one supermarket and closed three stores. Redesign program is gaining traction with 24 supermarkets being refurbished in 1H 2021 vs 5 in 1H 2020. The pace of redesign in the 2H 2021 is expected to remain intact. Selling space across this format remained almost flat y-o-y. LFL sales growth reached 2.0% vs -0.7% in the previous quarter, driven by strong LFL traffic recovery to 9.1%. As a result, net retail sales growth of supermarkets improved to 3.0% in the reported quarter.
8.5% of total net retail sales generated by drogerie 7.6 RUB billion annual GMV runrate	The share of drogerie format as a proportion of the total net retail sales increased to 8.5% in the reported quarter vs 8.1% a year ago. During 2Q 2021 Magnit opened (net) 196 cosmetics stores and added 40 thousand sq. m. of selling space, delivering a 11.2% y-o-y increase in selling space, the highest across all formats. Driven by this increase in selling space and LFL sales growth of 5.5%, sales grew 14.1% representing again the strongest performance across all Magnit's store formats. LFL average ticket growth was slightly negative at -0.7% well compensated by 6.2% LFL traffic growth. During 2Q 2021 Magnit continued its renovation program and redesigned 131 convenience stores and 12 supermarkets resulting in the combined share of refurbished and new stores at: 74% for convenience stores, 34% for supermarkets and 59% for the drogerie format. ### E-commerce Magnit has been testing e-commerce services since the second half of 2020. The Company currently runs a number of online delivery projects, both independently and in cooperation with partners (express delivery, regular delivery, e-pharma, cosmetics and partnerships). Magnit fulfils around 15,000 orders a day. The run rate for Magnit's online channel stands at RUB 7.6 billion based on the last week of June. Average ticket for Magnit's own delivery service is c. RUB 1,200 including VAT which is approx. 3.4 times higher than in the convenience stores (RUB 353 including VAT in 2Q 2021). This is mostly due to a larger number of items per basket. Magnit's e-commerce services today cover over 2,000 stores in 62 regions and 106 cities, with 61% of the current revenue generated outside Moscow and St. Petersburg. By the end of 2021, the Company plans to have over 4,000 stores across all formats covered by e-commerce services including Magnit's own delivery and partnerships in more than 50 regions across Russia.

Financial Results for 2Q and 1H 2021 (IAS 17)

RUB mln	2Q 2021	2Q 2020	Change	1H 2021	1H 2020	Change
Total Revenue	424,341	387,323	9.6%	822,230	763,361	7.7%
Retail	413,693	379,174	9.1%	801,592	743,959	7.7%
Wholesale	10,648	8,149	30.7%	20,638	19,403	6.4%
Gross Profit	99,501	94,337	5.5%	192,571	179,522	7.3%
Gross Margin, %	23.4%	24.4%	-91 bps	23.4%	23.5%	-10 bps
SG&A, % of Sales	-20.4%	-20.4%	-2 bps	-20.4%	-20.5%	4 bps
EBITDA pre LTI[7]	30,600	30,482	0.4%	58,603	53,570	9.4%
EBITDA Margin pre LTI, %	7.2%	7.9%	-66 bps	7.1%	7.0%	11 bps
EBITDA	30,250	30,476	-0.7%	57,928	53,220	8.8%
EBITDA Margin, %	7.1%	7.9%	-74 bps	7.0%	7.0%	7 bps
EBIT	17,739	18,676	-5.0%	34,695	30,137	15.1%
EBIT Margin, %	4.2%	4.8%	-64 bps	4.2%	3.9%	27 bps
Net Finance Costs	-2,790	-3,497	-20.2%	-5,371	-7,274	-26.2%
FX Gain/ (Loss)	634	1,005	-36.9%	444	-824	-153.9%
Profit before Tax	15,583	16,185	-3.7%	29,768	22,039	35.1%
Taxes	-3,509	-3,342	5.0%	-6,820	-4,995	36.5%
Net Income	12,073	12,843	-6.0%	22,948	17,044	34.6%
Net Income Margin, %	2.8%	3.3%	-47 bps	2.8%	2.2%	56 bps

For 2Q and 1H 2021 financial results in accordance with IFRS 16 - see Appendix
23.4% Gross margin in 2Q 2021 26 bps y-o-y reduction of shrinkage 7.1% ebitda margin in 2Q 2021 2.8% Net income margin in 2Q 2021	Total revenue in 2Q 2021 increased by 9.6% driven by net retail sales growth by 9.1% and wholesale revenue increase by 30.7%. Wholesale operations accounted for 2.5% of total sales on the back of recovery of HORECA consumption. Gross Profit in 2Q 2021 increased by 5.5% y-o-y to RUB 99.5 billion with a margin of 23.4% as a result of better promotional margin, lower shrinkage and favorable format mix. This was partially offset by slightly higher supply chain costs and higher penetration of Magnit's loyalty program. Format mix positively impacted gross margin, with the share of Magnit's high-margin drogerie business growing to 8.5% in 2Q 2021 partly offset by the increase of wholesale operations. Promotional intensity was slightly higher y-o-y due to weal comparatives and normalizing shopping patterns, with different consumption trends (including forward buying of dry food) in the same quarter of the last year. This resulted in a gross profit margin reduction of 91 bps y-o-y, reflecting a strong comparative performance during the prior year, and one-off effects of the last year comparable period. Supply chain costs grew y-o-y due to a continued increase of on-shelf availability and higher transportation costs driven by the increase in container shipping tariffs in the international and domestic markets. Alongside the growing share of fresh products and overall improvement of on-shelf availability, shrinkage as a proportion of sales decreased further by 26 bps y-o-y. This was driven by ongoing optimization of supply chain processes, renegotiation of quality standards with suppliers and other initiatives. SG&A costs were controlled and remained almost flat y-o-y as a percent of sales (20.4%). This was achieved as a result of lower rent costs and depreciation, partially offset by higher marketing costs and negatively impacted by stores in the 'ramp up' phase. Advertising expenses increased by 26 bps y-o-y on higher marketing activities including digital marketing and loyalty campaigns. Rental costs as a percent of sales decreased by 15 bps y-o-y driven by higher sales density, improved lease terms with landlords and the closing of inefficient stores. This was achieved despite the increased share of leased selling space to 78.7% in 2Q 2021 vs 77.4% a year ago. Despite the acceleration in store openings (which started in 4Q last year) and their 'ramp-up' period, depreciation as a percent of sales reduced by 10 bps y-o-y as most of the newly opened stores were leased. Personnel costs as a percent of sales decreased by 7 bps y-o-y thanks to continued productivity improvements and on-going automation of business processes. Repair and maintenance costs as a percent of sales increased by 6 bps y-o-y driven by acceleration of the store refurbishment program (143 stores were refurbished in 2Q 2021 vs 19 in 2Q 2020) Other costs including utilities, packaging and raw materials, bank and tax expenses remained broadly flat as a percent of sales y-o-y. As a result, EBITDA was RUB 30.3 billion with a 7.1% margin, driven by gross margin dynamics and strict cost control. LTI expenses in the reported period stood at 0.08% of sales - as a result EBITDA margin pre-LTI was 7.2%. EBITDA margin for the 1H 2021 was 7.0% with y-o-y improvement of 7 bps. The Company increased its total debt by 97.3 billion in the reported quarter by means of long-term bank loans and bond issuance to finance accelerated expansion and the upcoming acquisition of the Dixy retail chain. This increase happened during the period of growing market rates. As a result, average cost of debt increased to 6.4% (12 bps y-o-y or 49 bps q-o-q). Higher cost of debt and total amount of borrowings were netted by the increase in interest income. This led to the decrease of net finance costs in 2Q 2021 by 20.2% (or 25 bps) y-o-y to RUB 2.8 billion. The Company's debt profile improved further through an increased share of long-term borrowings and record long debt maturity of 24 months (vs 21 months a quarter ago). In 2Q 2021 the Company reported FX gain in the amount of RUB 0.6 billion related to direct import operations. Income tax in 2Q 2021 was RUB 3.5 billion. Effective tax rate stood at 22.5%. As a result, net income in 2Q 2021 decreased by 6.0% y-o-y and stood at RUB 12.1 billion. Net income margin decreased by 47 bps y-o-y to 2.8%. Net income for 1H 2021 grew by 34.6% with a margin improvement of 56 bps to 2.8%.

Financial Position Highlights (IFRS 16)

RUB mln	30.06.2021	31.12.2020	30.06.2020
Inventories	199,744	205,949	219,236
Trade and other receivables	12,329	8,564	9,949
Cash and cash equivalents	129,370	44,700	21,149
Long-term borrowings	222,930	147,695	117,389
Trade and other payables	165,973	184,325	138,461
Short-term borrowings and short-term portion of long-term borrowings	42,560	18,392	91,204

11.2 DAYS y-o-y optimisation of inventories[8]

Despite ongoing improvement to on-shelf availability, the 38 bps increase of share of drogerie format as a percent of net retail sales, supplier inflation and total sales growth of 9.6%, inventories decreased by RUB 19.5 billion vs June 30, 2020 and stood at 199.7 billion. This was driven by a number of projects launched in 2020 including the reduction of slow-moving items, assortment harmonization and IT solutions aimed at better on-shelf availability and promotion forecasting. Trade and other payables grew by RUB 27.5 billion vs June 30, 2020 and stood at RUB 166.0 billion driven by higher sales and increased payment days. Accounts receivables increased by RUB 2.4 billion vs June 30, 2020 and stood at RUB 12.4 billion due to higher sales and improved commercial terms with suppliers.

Debt Composition and Leverage

	June 30, 2021	March 31, 2021	December 31, 2020	June 30, 2020
IAS 17
Total Debt, RUB billion	265.5	168.2	166.1	208.6
Long-Term Debt	222.9	144.0	147.7	117.4
Short-Term Debt	42.6	24.2	18.4	91.2
Net Debt, RUB billion	136.1	161.7	121.4	187.4
Net Debt/EBITDA	1.2x	1.4х	1.1х	2.0х
IFRS 16
Net Debt, RUB billion	498.9	522.8	479.0	538.8
Net Debt/EBITDA	2.7x	2.8x	2.7x	3.3

1.2x net debt/ebitda as of June 30, 2021 (IAS 17)

Gross Debt increased by 57.8% within the reported quarter on the back of additional borrowings to finance accelerated expansion and the acquisition of the Dixy retail chain and reached RUB 265.5 billion as at June 30, 2021. Cash position substantially increased to RUB 129.4 billion as at June 30, 2021 compared to RUB 6.6 billion as at March 31, 2021. As a result, Net Debt decreased by 15.8% q-o-q to RUB 136.1 billion as at June 30, 2021. The Company's debt is fully RUB denominated, matching revenue structure. The Net Debt to EBITDA ratio was 1.2x as at June 30, 2021 vs 1.4x as at March 31, 2021. Capex in 2Q 2021 more than tripled y-o-y and stood at RUB 17.2 billion. This was driven by the acceleration of expansion program (519 store openings on gross basis in 2Q 2021 vs 177 in 2Q 2020). Total capital expenditures for the first six months of 2021 stood at RUB 25.6 billion vs RUB 12.3 billion in 1H 2020 (up 2.0x y-o-y). Capex is expected to increase further in the second half of the year in line with the calendarization of the store opening and redesign process with the latter accelerating further in the second half of the year.

DIXY Acquisition

2,477 stores added after dixy acquisition

On July 22, 2021 Magnit completed the acquisition of DIXY retail chain with 2,477 stores in Russia (2,438 convenience stores under the DIXY brand and 39 superstores under the Megamart brand). The majority of the convenience stores are located in Moscow and the Moscow region (1,319 outlets) and in St. Petersburg and the Leningrad region (438 outlets). As part of the transaction Magnit has also acquired five distribution centers and a fleet of approx. 700 trucks. The purchase price at closing amounted to Rub 87.6 bn. The acquisition of the DIXY retail business is expected to significantly strengthen Magnit's competitive position in the Russian food retail sector. Strong exposure to the strategically important Moscow and St.Petersburg regions will lead to a sharp increase in the Company's market positions in both capitals, including more than two-fold market share growth in both Moscow and St.Petersburg. Strong physical presence in Moscow and St.Petersburg will provide substantial support to further development of Magnit's e-grocery initiatives. Potential synergies in procurement, category management and various business processes are expected to benefit the Company's customers and provide value accretion for its shareholders. The transaction has been approved by Magnit's Board of Directors on May 18, 2021[9]. Russia's Federal Antimonopoly Service announced its clearance to the transaction on July 15, 2021.

More information is available at https://www.magnit.com/en/media/press-releases/magnit-completes-acqusition-of-dixy/

FY 2021 Guidance

2,000 stores on gross basis to be opened by magnit organically in 2021

Magnit confirms its full year store opening, redesign and capex guidance published on February 4th, 2021. In 2021 Magnit plans to open around 2,000 stores of different format on a gross basis as part of its organic expansion and redesign about 700 stores. Capital expenditures is expected to be approximately RUB 60-65 billion[10]. Based on further detailed analysis of the performance of newly acquired Dixy stores, respective instruction of the Federal Antimonopoly Service[11] and overlap with existing network, the Company may potentially take a decision to slightly adjust its organic store opening program in the respective regions. It is expected that any adjustment will not lead to material impact on the Company's development plans.

Note:

1. This announcement contains inside information disclosed in accordance with the Market Abuse Regulation effective from July 3, 2016.
2. Please note that there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals.

	### For further information, please contact: Dina Chistyak Director for Investor Relations  dina_chistyak@magnit.ru Office: +7 (861) 210 9810 x 15101 Media Inquiries                    Twitter press@magnit.ru                    @MagnitIR

### Note to editors Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2021, Magnit operated 39 distribution centers and 22,344 stores (15,348 convenience, 469 supermarkets and 6,527 drogerie stores) in 3,802 cities and towns throughout 7 federal regions of the Russian Federation. In accordance with the unaudited IFRS 16 management accounts results for 1H 2021, Magnit had revenues of RUB 822.2 billion and an EBITDA of RUB 94.4 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.

### Forward-looking statements This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and/or store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.

APPENDIX

2Q and 1H 2021 Store Openings

	2Q 2021	2Q 2020	Change	Change, %	1H 2021	1H 2020	Change	Change, %
Store Openings (Gross)	519	177	342	193.2%	926	498	428	85.9%
Convenience Stores	308	94	214	227.7%	549	239	310	129.7%
Supermarkets	1	1	0	0.0%	2	1	1	100.0%
Drogerie Stores	210	82	128	156.1%	375	258	117	45.3%
Store Closures	75	143	-68	-47.6%	146	329	-183	-55.6%
Convenience Stores	58	107	-49	-45.8%	112	280	-168	-60.0%
Supermarkets	3	1	2	200.0%	3	2	1	50.0%
Drogerie Stores	14	35	-21	-60.0%	31	47	-16	-34.0%
Store Openings (Net)	444	34	410	n/a	780	169	611	361.5%
Convenience Stores	250	-13	263	n/a	437	-41	478	n/a
Supermarkets	-2	0	-2	n/a	-1	-1	0	0.0%
Drogerie Stores	196	47	149	317.0%	344	211	133	63.0%

2Q 2021 Monthly Operating Results

	April	Change	May	Change	June	Change
Total net retail sales, RUB million	135,377	8.4%	139,472	9.3%	138,844	9.6%
Convenience Stores	106,195	7.8%	109,283	10.1%	108,998	11.2%
Supermarkets	17,315	4.1%	17,423	3.4%	16,774	1.6%
Drogerie Stores	10,954	22.3%	11,972	12.7%	12,314	9.0%
Other formats	913	5.1%	794	-3.0%	758	-8.1%
Number of tickets, million	401	19.2%	421	14.4%	421	8.6%
Convenience Stores	339	19.3%	356	15.1%	356	9.2%
Supermarkets	28	18.0%	29	10.3%	28	2.8%
Drogerie Stores	31	21.3%	34	12.9%	34	10.0%
Other formats	2.4	-4.4%	2.2	-10.7%	2.1	-16.8%
Average ticket[12], RUB	337	-9.1%	332	-4.4%	330	0.9%
Convenience Stores	313	-9.6%	307	-4.4%	306	1.8%
Supermarkets	613	-11.8%	601	-6.2%	593	-1.2%
Drogerie Stores	351	0.8%	357	-0.2%	359	-0.9%
Other formats	354	6.2%	353	9.3%	360	12.3%
Number of Stores (EOP)	21,981	n/a	22,099	n/a	22,344	n/a
Convenience Stores	15,159	n/a	15,218	n/a	15,348	n/a
Supermarkets	469	n/a	469	n/a	469	n/a
Drogerie Stores	6,353	n/a	6,412	n/a	6,527	n/a
Store Openings (Gross)	107	n/a	141	n/a	271	n/a
Convenience Stores	77	n/a	78	n/a	153	n/a
Supermarkets	0	n/a	1	n/a	0	n/a
Drogerie Stores	30	n/a	62	n/a	118	n/a
Store Closures	26	n/a	23	n/a	26	n/a
Convenience Stores	16	n/a	19	n/a	23	n/a
Supermarkets	2	n/a	1	n/a	0	n/a
Drogerie Stores	8	n/a	3	n/a	3	n/a
Store Openings (Net)	81	n/a	118	n/a	245	n/a
Convenience Stores	61	n/a	59	n/a	130	n/a
Supermarkets	-2	n/a	0	n/a	0	n/a
Drogerie Stores	22	n/a	59	n/a	115	n/a
Total Selling Space (EOP), th. sq. m.	7,631	4.7%	7,669	5.2%	7,748	6.3%
Convenience Stores	5,194	4.8%	5,220	5.3%	5,275	6.4%
Supermarkets	941	-0.2%	943	0.0%	943	-0.1%
Drogerie Stores	1,465	9.0%	1,477	9.4%	1,500	11.2%
Other formats	31	-23.2%	30	-26.4%	30	-26.9%
Selling Space Added (Net), th. sq. m.	24.9	n/a	38.1	n/a	79.4	n/a
Convenience Stores	24.8	n/a	25.5	n/a	55.9	n/a
Supermarkets	-2.1	n/a	1.6	n/a	0.0	n/a
Drogerie Stores	4.9	n/a	12.0	n/a	23.5	n/a
Other formats	-2.8	n/a	-0.9	n/a	0.0	n/a

Financial Results for 2Q and 1H 2021 (IFRS 16)

RUB mln	2Q 2021	2Q 2020	Change	1H 2021	1H 2020	Change
Total Revenue	424,341	387,323	9.6%	822,230	763,361	7.7%
Retail	413,693	379,174	9.1%	801,592	743,959	7.7%
Wholesale	10,648	8,149	30.7%	20,638	19,403	6.4%
Gross Profit	99,513	94,337	5.5%	192,586	179,522	7.3%
Gross Margin, %	23.5%	24.4%	-91 bps	23.4%	23.5%	-9 bps
SG&A, % of Sales	-18.8%	-19.0%	15 bps	-18.9%	-19.1%	15 bps
EBITDA pre LTI[13]	49,586	48,138	3.0%	95,038	88,194	7.8%
EBITDA Margin pre LTI, %	11.7%	12.4%	-74 bps	11.6%	11.6%	1 bps
EBITDA	49,236	48,133	2.3%	94,363	87,845	7.4%
EBITDA Margin, %	11.6%	12.4%	-82 bps	11.5%	11.5%	-3 bps
EBIT	25,947	25,365	2.3%	49,107	42,772	14.8%
EBIT Margin, %	6.1%	6.5%	-43 bps	6.0%	5.6%	37 bps
Net Finance Costs	-10,438	-11,118	-6.1%	-20,601	-22,994	-10.4%
FX Gain/ (Loss)	666	1,097	-39.3%	454	-920	-149.4%
Profit before Tax	16,175	15,344	5.4%	28,959	18,858	53.6%
Taxes	-3,629	-3,174	14.3%	-6,660	-4,359	52.8%
Net Income	12,546	12,170	3.1%	22,300	14,500	53.8%
Net Income Margin, %	3.0%	3.1%	-19 bps	2.7%	1.9%	81 bps

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[1] LFL calculation base includes stores, which have been operating for 12 months since its first day of sales. LFL sales growth and average ticket growth are calculated based on sales turnover including VAT.

[2] Convenience Stores include convenience stores and small pilots such as Magnit City and My Price

[3] Supermarkets include Magnit Family supermarkets and Magnit Extra superstores

[4] Other Formats include pharmacies and stores located at Russian Post offices

[5] Excluding VAT

[6] Net retail sales of the last four quarters divided by the average selling space at the end of the last five quarters

[7] LTI - Long-Term Incentive Program

[8] Inventory turnover days = ((inventories as of 31.03.2021 + inventories as of 30.06.2021)/2/cost of goods sold for 2Q 2021) x 91

[9] https://www.magnit.com/en/disclosure/regulatory-news/#tabs-Disclosure

[10] Does not include RUB 87.6 billion spent on DIXY acquisition

[11] FAS prescription to one-time reduce market share limit of 35% in 22 municipalities in the North-West and Central regions till 1st July 2022

[12] Excluding VAT

[13] LTI - Long-Term Incentive Program

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ISIN:	US55953Q2021
Category Code:	MSCU
TIDM:	MGNT
LEI Code:	2534009KKPTVL99W2Y12
OAM Categories:	2.2. Inside information
Sequence No.:	118703
EQS News ID:	1222530

End of Announcement	EQS News Service

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