Magnit

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MAGNIT PJSC (MGNT)

Magnit reports 7.7% total sales growth and 7.0% EBITDA margin in 1H 2021

19-Aug-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.

Magnit Reports 7.7% total sales growth and 7.0% EBITDA margin in 1H 2021

Krasnodar, Russia (August 19, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, announces its reviewed 1H 2021 financial results prepared in accordance with IFRS.


7.7% TOTAL REVENUE growth	1H 2021 Key Operational and Financial Highlights - Total revenue increased by 7.7% y-o-y to RUB 822.2 billion; - Net retail sales reached RUB 801.6 billion increasing 7.7% y-o-y; - LFL[1] sales growth of 4.7% driven by 4.7% average ticket growth;
7.0% EBITDA margin	- The Company opened 926 stores[2] on gross basis (549 convenience stores, two supermarkets and 375 drogeries). As part of the Company's ongoing efficiency improvement campaign, 146 stores were closed resulting in a net store addition of 780. As of June 30, 2021 the total store base was 22,344; - Selling space increase of 252 thousand sq. m. bringing total selling space to 7,748 thousand sq. m. (6.3% y-o-y growth); - The Company redesigned 243 stores (219 convenience stores and 24 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 7.3% y-o-y to RUB 192.6 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; - Cash SG&A[3] expenses as a percentage of sales increased by 16 bps to 17.6% on higher marketing costs and negative impact of stores in the 'ramp-up' phase partially offset by lower rent costs.
1.2x net debt / ebitda ratio	- EBITDA was RUB 57.9 billion with a 7.0% margin driven by gross margin dynamics and strict cost control; - Net income of RUB 22.9 billion with a margin of 2.8%; - As of June 30, 2021 Net Debt was RUB 136.1 billion. Net Debt / EBITDA ratio was 1.2x.


BBB Magnit's rating by MSCI	### Key events after the reported period - Magnit started making ready-to-eat products for its convenience stores in Magnit Family supermarkets; - Magnit rented a new distribution center in Moscow region to improve the efficiency of its logistics in the region; - MSCI increased Magnit's ESG rating score up to the BBB level; - The Board considered shareholders' proposals regarding the nomination of candidates to be elected to the PJSC Magnit Board of Directors at the upcoming EGM of PJSC Magnit to be held on September 9, 2021 and approved the list of candidates;

BBB

Magnit's rating by MSCI

### Key events after the reported period

- Magnit started making ready-to-eat products for its convenience stores in Magnit Family supermarkets;
- Magnit rented a new distribution center in Moscow region to improve the efficiency of its logistics in the region;
- MSCI increased Magnit's ESG rating score up to the BBB level;
- The Board considered shareholders' proposals regarding the nomination of candidates to be elected to the PJSC Magnit Board of Directors at the upcoming EGM of PJSC Magnit to be held on September 9, 2021 and approved the list of candidates;

Financial Results for 1H 2021


	IAS 17			IFRS 16
RUB mln	1H 2021	1H 2020	Change	1H 2021	1H 2020	Change
Total Revenue	822,230	763,361	7.7%	822,230	763,361	7.7%
Retail	801,592	743,959	7.7%	801,592	743,959	7.7%
Wholesale	20,638	19,403	6.4%	20,638	19,403	6.4%
Gross Profit	192,571	179,522	7.3%	192,586	179,522	7.3%
Gross Margin, %	23.4%	23.5%	-10 bps	23.4%	23.5%	-9 bps
SG&A, % of Sales	-20.4%	-20.5%	4 bps	-18.9%	-19.1%	15 bps
EBITDA pre LTI[4]	58,603	53,570	9.4%	95,038	88,194	7.8%
EBITDA Margin pre LTI, %	7.1%	7.0%	11 bps	11.6%	11.6%	1 bps
EBITDA	57,928	53,220	8.8%	94,363	87,845	7.4%
EBITDA Margin, %	7.0%	7.0%	7 bps	11.5%	11.5%	-3 bps
EBIT	34,695	30,137	15.1%	49,107	42,772	14.8%
EBIT Margin, %	4.2%	3.9%	27 bps	6.0%	5.6%	37 bps
Net Finance Costs	-5,371	-7,274	-26.2%	-20,601	-22,994	-10.4%
FX Gain/ (Loss)	444	-824	-153.9%	454	-920	-149.4%
Profit before Tax	29,768	22,039	35.1%	28,959	18,858	53.6%
Taxes	-6,820	-4,995	36.5%	-6,660	-4,359	52.8%
Net Income	22,948	17,044	34.6%	22,300	14,500	53.8%
Net Income Margin, %	2.8%	2.2%	56 bps	2.7%	1.9%	81 bps


23.4% Gross margin in 1H 2021 44 bps y-o-y reduction of shrinkage	Total revenue in 1H 2021 increased by 7.7% driven by net retail sales growth by 7.7% and wholesale revenue increase by 6.4%. Wholesale operations accounted for 2.5% of total sales. Gross Profit in 1H 2021 increased by 7.3% y-o-y to RUB 192.6 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 8.8% in 1H 2021 and 2.5% share of wholesale operations (flat y-o-y). Promotional intensity was slightly higher y-o-y due to weak comparatives and normalizing shopping patterns, with different consumption trends (including forward buying of dry food) in the same period of the last year. This resulted in a gross profit margin reduction of 10 bps y-o-y, reflecting a strong comparative performance during the prior year, and one-off effects of the last year comparable period. During the 1H 2021 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 reported period). Transportation expenses grew by 13 bps 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 44 bps y-o-y. This was driven by ongoing optimization of supply chain processes, renegotiation of quality standards with suppliers and other initiatives.

23.4%

Gross margin

in 1H 2021

44 bps

y-o-y reduction of shrinkage

Total revenue in 1H 2021 increased by 7.7% driven by net retail sales growth by 7.7% and wholesale revenue increase by 6.4%. Wholesale operations accounted for 2.5% of total sales.

Gross Profit in 1H 2021 increased by 7.3% y-o-y to RUB 192.6 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 8.8% in 1H 2021 and 2.5% share of wholesale operations (flat y-o-y). Promotional intensity was slightly higher y-o-y due to weak comparatives and normalizing shopping patterns, with different consumption trends (including forward buying of dry food) in the same period of the last year. This resulted in a gross profit margin reduction of 10 bps y-o-y, reflecting a strong comparative performance during the prior year, and one-off effects of the last year comparable period.

During the 1H 2021 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 reported period).

Transportation expenses grew by 13 bps 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 44 bps y-o-y. This was driven by ongoing optimization of supply chain processes, renegotiation of quality standards with suppliers and other initiatives.


	IAS 17			IFRS 16
RUB mln	1H 2021	1H 2020	Change	1H 2021	1H 2020	Change
Staff costs	75,429	70,255	7.4%	75,429	70,255	7.4%
as a % of sales	9.2%	9.2%	-3 б.п.	9.2%	9.2%	-3 б.п.
Rent	35,348	33,636	5.1%	863	896	-3.7%
as a % of sales	4.3%	4.4%	-11 б.п.	0.1%	0.1%	-1 б.п.
Deprecitation & amortization	23,234	23,083	0.7%	45,256	45,072	0.4%
as a % of sales	2.8%	3.0%	-20 б.п.	5.5%	5.9%	-40 б.п.
Utilities	15,420	14,112	9.3%	15,420	14,112	9.3%
as a % of sales	1.9%	1.8%	3 б.п.	1.9%	1.8%	3 б.п.
Advertising	3,934	2,316	69.8%	3,934	2,316	69.8%
as a % of sales	0.5%	0.3%	18 б.п.	0.5%	0.3%	18 б.п.
Other expenses	3,521	2,831	24.4%	3,521	2,831	24.4%
as a % of sales	0.4%	0.4%	6 б.п.	0.4%	0.4%	6 б.п.
Bank Services	3,891	3,653	6.5%	3,891	3,653	6.5%
as a % of sales	0.5%	0.5%	-1 б.п.	0.5%	0.5%	-1 б.п.
Repair & maintenance	3,299	2,895	13.9%	3,299	2,895	13.9%
as a % of sales	0.4%	0.4%	2 б.п.	0.4%	0.4%	2 б.п.
Taxes, other than income tax	1,447	1,579	-8.4%	1,447	1,579	-8.4%
as a % of sales	0.2%	0.2%	-3 б.п.	0.2%	0.2%	-3 б.п.
Packaging & raw materials	2,523	1,966	28.3%	2,523	1,966	28.3%
as a % of sales	0.3%	0.3%	5 б.п.	0.3%	0.3%	5 б.п.
Total SG&A	168,045	156,327	7.5%	155,583	145,576	6.9%
as a % of sales	20.4%	20.5%	-4 б.п.	18.9%	19.1%	-15 б.п.
Cash SG&A (excl. D&A)	144,811	133,244	8.7%	110,327	100,504	9.8%
as a % of sales	17.6%	17.5%	16 б.п.	13.4%	13.2%	25 б.п.


17.6% Cash SG&A expenses in 1H 2021 7.0% ebitda margin in 1H 2021 2.8% Net income margin in 1H 2021	SG&A costs were controlled and remained almost flat y-o-y as a percent of sales (20.4%). Cash SG&A expenses as a percentage of sales increased by 16 bps to 17.6% on higher marketing costs and negative impact by stores in the 'ramp-up' phase partially offset by lower rent costs. Advertising expenses increased by 18 bps y-o-y to 0.5% as a percent of sales on higher marketing activities including digital marketing and loyalty campaigns. Rental costs as a percent of sales decreased by 11 bps y-o-y to 4.3% 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 1H 2021 vs 77.4% a year ago. Staff costs as a percent of sales remained flat y-o-y at 9.2%. Higher productivity of in-store personnel, especially in convenience and drogerie formats, on-going automation of business processes partially offset additional pressure from new stores in the 'ramp-up' phase and slightly higher staff rotation due to pandemic last year. Packaging and raw materials expenses increased by 5 bps y-o-y to 0.3% as a percent of sales reflecting the ongoing provision of means of sanitary protection to customers and employees during the COVID-19 pandemic. Utilities, repair and maintenance, bank and tax expenses remained broadly flat as a percent of sales y-o-y. Other costs increased by 6 bps y-o-y to 0.4% as a percent of sales on higher advisory services and software maintenance. As a result, EBITDA was RUB 57.9 billion with a 7.0% 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 7.1%. 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 20 bps y-o-y to 2.8% as most of the newly opened stores were leased. As a result, operating profit in 1H 2021 stood at RUB 34.7 billion with 4.2% EBIT margin. The Company increased its total debt by RUB 99.4 billion in the reported period by means of long-term bank loans and bond issuance to finance accelerated expansion and the 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). Higher cost of debt and the total amount of borrowings were netted by the increase in interest income. This led to the decrease of net finance costs in 1H 2021 by 26.2% (or 30 bps) y-o-y to RUB 5.4 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 1H 2021 the Company reported FX gain in the amount of RUB 0.4 billion related to direct import operations. Income tax in 1H 2021 was RUB 6.8 billion with effective tax rate of 22.9%. As a result, net income in 1H 2021 increased by 34.6% y-o-y and stood at RUB 22.9 billion. Net income margin increased by 56 bps y-o-y to 2.8%.

17.6%

Cash SG&A expenses

in 1H 2021

7.0%

ebitda margin in 1H 2021

2.8%

Net income margin

in 1H 2021

SG&A costs were controlled and remained almost flat y-o-y as a percent of sales (20.4%).

Cash SG&A expenses as a percentage of sales increased by 16 bps to 17.6% on higher marketing costs and negative impact by stores in the 'ramp-up' phase partially offset by lower rent costs.

Advertising expenses increased by 18 bps y-o-y to 0.5% as a percent of sales on higher marketing activities including digital marketing and loyalty campaigns.

Rental costs as a percent of sales decreased by 11 bps y-o-y to 4.3% 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 1H 2021 vs 77.4% a year ago.

Staff costs as a percent of sales remained flat y-o-y at 9.2%. Higher productivity of in-store personnel, especially in convenience and drogerie formats, on-going automation of business processes partially offset additional pressure from new stores in the 'ramp-up' phase and slightly higher staff rotation due to pandemic last year.

Packaging and raw materials expenses increased by 5 bps y-o-y to 0.3% as a percent of sales reflecting the ongoing provision of means of sanitary protection to customers and employees during the COVID-19 pandemic.

Utilities, repair and maintenance, bank and tax expenses remained broadly flat as a percent of sales y-o-y.

Other costs increased by 6 bps y-o-y to 0.4% as a percent of sales on higher advisory services and software maintenance.

As a result, EBITDA was RUB 57.9 billion with a 7.0% 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 7.1%.

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 20 bps y-o-y to 2.8% as most of the newly opened stores were leased.

As a result, operating profit in 1H 2021 stood at RUB 34.7 billion with 4.2% EBIT margin.

The Company increased its total debt by RUB 99.4 billion in the reported period by means of long-term bank loans and bond issuance to finance accelerated expansion and the 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). Higher cost of debt and the total amount of borrowings were netted by the increase in interest income. This led to the decrease of net finance costs in 1H 2021 by 26.2% (or 30 bps) y-o-y to RUB 5.4 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 1H 2021 the Company reported FX gain in the amount of RUB 0.4 billion related to direct import operations.

Income tax in 1H 2021 was RUB 6.8 billion with effective tax rate of 22.9%.

As a result, net income in 1H 2021 increased by 34.6% y-o-y and stood at RUB 22.9 billion. Net income margin increased by 56 bps y-o-y to 2.8%.

Balance Sheet and Cash Flows

Financial Position Highlights (IFRS 16)


RUB mln	30.06.2021	31.12.2020	30.06.2020
Non-current assets	684,767	678,461	679,086
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
Other current assets	6,735	7,718	5,851
Assets	1,032,945	945,392	935,272
Equity	181,798	182,889	188,030
Long-term borrowings	222,930	147,695	117,389
Other long-term liabilities	335,431	330,535	330,867
Trade and other payables	163,443	184,325	138,461
Short-term borrowings and short-term portion of long-term borrowings	42,560	18,392	91,204
Other short-term liabilities	86,783	81,557	69,320
Equity and liabilities	1,032,945	945,392	935,272


11.2 DAYS y-o-y optimisation of inventories[5]	Despite ongoing improvement to on-shelf availability, the 39 bps increase of share of drogerie format as a percent of net retail sales, supplier inflation and total sales growth of 7.7%, 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 25.0 billion vs June 30, 2020 and stood at RUB 163.4 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 12.3 billion due to higher sales and improved commercial terms with suppliers.

11.2

DAYS

y-o-y optimisation of inventories[5]

Despite ongoing improvement to on-shelf availability, the 39 bps increase of share of drogerie format as a percent of net retail sales, supplier inflation and total sales growth of 7.7%, 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 25.0 billion vs June 30, 2020 and stood at RUB 163.4 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 12.3 billion due to higher sales and improved commercial terms with suppliers.

Debt Composition and Leverage


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


1.2x net debt/ebitda as of June 30, 2021 (IAS 17)	Gross Debt increased by RUB 56.9 billion or by 27.3% compared to the end of 1H 2020 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 21.1 billion as at June 30, 2020. As a result, Net Debt decreased by 27.4% y-o-y 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 2.0x as at June 30, 2021.

1.2x

net debt/ebitda

as of June 30, 2021

(IAS 17)

Gross Debt increased by RUB 56.9 billion or by 27.3% compared to the end of 1H 2020 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 21.1 billion as at June 30, 2020. As a result, Net Debt decreased by 27.4% y-o-y 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 2.0x as at June 30, 2021.

Cash Flow Statement for 1H 2021


	IAS 17			IFRS 16
million RUB	1H 2021	1H 2020	Change	1H 2021	1H 2020	Change
Operating cash flows before working capital changes	59,079	53,993	9.4%	93,578	86,733	7.9%
Changes in working capital	-14,864	-28,777	-48.3%	-14,516	-28,014	-48.2%
Net Interest and income tax paid	-12,462	-10,781	15.6%	-27,693	-26,501	4.5%
Net cash from operating activities	31,753	14,434	120.0%	51,370	32,217	59.4%
Net cash used in investing activities	-22,259	-11,312	96.8%	-21,945	-11,393	92.6%
Net cash generated / (used) from/(in) financing activities	75,170	9,126	723.7%	55,238	-8,576	-744.1%
Effect of exchange rate changes on cash & cash equivalents	7	0	n/a	7	0	n/a
Net cash increase / (decrease)	84,670	12,248	591.3%	84,670	12,248	591.3%


32 RUB billion net Cash generated by operations	The Company's cash flows from operating activities before changes in working capital in 1H 2021 equaled to RUB 59.1 billion, which was RUB 5.1 billion or 9.4% higher y-o-y. The change in working capital improved to RUB -14.9 billion from RUB -28.8 billion in 1H 2020 as a result of a decrease in inventory and higher y-o-y trade and other payables. Net interest and income tax paid in 1H 2021 increased by RUB 1.7 billion or 15.6% to RUB 12.5 billion. Net interest expenses decreased by 19.1% y-o-y to RUB 5.3 billion in 1H 2021 due to lower average-weighted amount of borrowings and higher average amount of cash on bank accounts during the reported period. Income tax paid for 1H 2021 increased to RUB 7.2 billion. With this net cash flow from operating activities in 1H 2021 increased by 120.0% to RUB 31.8 billion as a result of positive movement of working capital and lower interest paid. Net cash used in investing activities predominantly composed of capital expenditures increased by 96.8% to RUB 22.3 billion in 1H 2021 due to acceleration of expansion program. 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. In 1H 2021 net cash generated from financing activities was RUB 75.2 billion vs RUB 9.1 billion generated in 1H 2020 driven by dynamics of proceeds from borrowings. In 1H 2021 the Company paid dividends in the amount of RUB 24.1 billion[6]. As a result of factors mentioned above net cash position in 1H 2021 increased by RUB 108.2 billion to RUB 129.4 billion as of June 30, 2021.

32

RUB billion

net Cash generated by operations

The Company's cash flows from operating activities before changes in working capital in 1H 2021 equaled to RUB 59.1 billion, which was RUB 5.1 billion or 9.4% higher y-o-y. The change in working capital improved to RUB -14.9 billion from RUB -28.8 billion in 1H 2020 as a result of a decrease in inventory and higher y-o-y trade and other payables.

Net interest and income tax paid in 1H 2021 increased by RUB 1.7 billion or 15.6% to RUB 12.5 billion. Net interest expenses decreased by 19.1% y-o-y to RUB 5.3 billion in 1H 2021 due to lower average-weighted amount of borrowings and higher average amount of cash on bank accounts during the reported period. Income tax paid for 1H 2021 increased to RUB 7.2 billion.

With this net cash flow from operating activities in 1H 2021 increased by 120.0% to RUB 31.8 billion as a result of positive movement of working capital and lower interest paid.

Net cash used in investing activities predominantly composed of capital expenditures increased by 96.8% to RUB 22.3 billion in 1H 2021 due to acceleration of expansion program.

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.

In 1H 2021 net cash generated from financing activities was RUB 75.2 billion vs RUB 9.1 billion generated in 1H 2020 driven by dynamics of proceeds from borrowings. In 1H 2021 the Company paid dividends in the amount of RUB 24.1 billion[6].

As a result of factors mentioned above net cash position in 1H 2021 increased by RUB 108.2 billion to RUB 129.4 billion as of June 30, 2021.

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[7]. Based on further detailed analysis of the performance of newly acquired Dixy stores, respective instruction of the Federal Antimonopoly Service[8] 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.

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[7].

Based on further detailed analysis of the performance of newly acquired Dixy stores, respective instruction of the Federal Antimonopoly Service[8] 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:

This announcement contains inside information disclosed in accordance with the Market Abuse Regulation effective from July 3, 2016.
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_chisty [email protected] Office: +7 (861) 210 9810 x 15101 Media Inquiries Twitter [email protected] @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 reviewed IFRS 16 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.

### 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 reviewed IFRS 16 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.

### 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.

[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] The number of stores does not include pharmacies

[3] Selling, general and administrative expenses excluding depreciation and amortization

[4] LTI - Long-Term Incentive Program

[5] 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

[6] Excluding intercompany transactions between PJSC Magnit and JSC Tander

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

[8] 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



ISIN:	US55953Q2021
Category Code:	MSCU
TIDM:	MGNT
LEI Code:	2534009KKPTVL99W2Y12
OAM Categories:	2.2. Inside information
Sequence No.:	120316
EQS News ID:	1227553



End of Announcement	EQS News Service

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Krasnodar, Russia (August 19, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, announces its reviewed 1H 2021 financial results prepared in accordance with IFRS.

Financial Results for 1H 2021

Financial Position Highlights (IFRS 16)

FY 2021 Guidance

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