Magnit

Investor Presentation • Feb 17, 2022

Magnit
Capital Markets
Day

17th February 2022

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Magnit 2021 Highlights

$\mathcal{Z}$

Top Russian ¶☆D retailer One of the largest retail chains with multi-format offering	Geographical coverage Presence in all highly populated Russian regions	Serving 977 consumers Wide coverage in offline and online	Unique capabilities $-\frac{1}{2}$ $\mathbb{R}$ Largest private employer in Russia with vertically integrated structure
26,077 8,997 4 Core offline Total number Selling space, ths. sq. $m1$ of stores 1 formats	3,898 7 Cities & Towns Federal Regions	5.1 bn Tickets per year 1	~1/357,000 Employees 8
A convenient & affordable 18,602 store for everyday shopping	Drogerie Food stores stores 1 6,232 1,787 Central	$>87\%$ Households make purchases in Magnit stores 6	17 Own production facilities and agricultural complexes
A full-feature family supermarket for everyday and major shopping 阿 509	1,762 4,429 Volga 2,647 1,290 Southern	$>60$ mn Registered loyalty	>4,800
Superstore for all the family with assortment covering all missions	2,481 680 North West 1,793 775 Urals	cardholders 1 >62,000	Private label SKUs 9 45
Store for women allowing to keep care about $\times$ 6,966 herself, her home and beloved ones so they appreciate it	1,034 431 Siberian North 241 495 Caucasus	Avg. number of online orders per day 7	Distribution centers 8 5,435
E-commerce covering 阿 4,500+ express & stock-up missions			Vehicles

As of December 31, 2021.

1. Including Magnit new ventures, Dixy and Megamart I 2. Including Magnit new ventures and Dixy I 3. Including Megamart I 4. Closest competitors operate >900 and >600 stores based on Magnit team analysis I 5. Number of
   sto

Russian Economic Environment

Current market challenges

Available workforce decline and nominal salary level increase

E-commerce growth boosted demand for couriers 1.3-3.5 times with additional pressure on wage level

Our response to changing market reality

• Strong inflation cycle creates pressure on costs and CAPEX:
• Negotiation campaigns with suppliers to hold purchasing prices and sourcing differentiation
• Smart inflation transfer on the shelf maintaining price competitiveness and limitations on socially important goods
• Focus on Private label ensuring value-for-money offering
• Structured approach to redesigns including "light" approach
• E2E NCP¹ optimization

Linear personnel staffing issues coupled with pressure on
staff costs forced by pandemic and economy changes: $\infty$

• Increase recruiting funnel by introducing digital recruiting services and advertisements
• Elaborate models of working with new employee groups temporary staff such as part-timers and retirees
• Enhance EVP² to drive employee retention by working conditions improvement, HR digitalization and non-material benefits
• Focus on stores, warehouses and transportation productivity increase through processes optimization and automation

Source: Federal State Statistics Service, Ministry of Economic Development of the Russian Federation, Brokers consensus 1. Non-commercial purchases | 2. Employee Value Proposition

Consumer Behavior

Current market challenges

29

Our response to changing market reality

Increased consumer demands around safety, experience, quality, assortment etc.:

• Continuous improvement of retail experience in the stores to satisfy evolving consumer needs
• Loyalty program evolution as a foundation of Magnit multiformat proposition keeping consumers within family of stores
• Focus on safety in every store e.g. extra cleaning, control of mask usage, etc.

Prices growth became the most growing concern

Accelerating inflation and growing consumer concerns around pricing:

• Extend private label assortment allowing to decrease shelf-prices in certain units-of-need while gaining more margin
• Develop effective promo campaigns supported by suppliers
• Constantly elaborate pricing methodology ensuring best proposition for KVIs¹ on local level
• Scaling discounter concept as a separate format

Source: Sberbank CIB investment research; Retail monitor by GFK 1. Key Value Items

Current market challenges

Food retail channel split dynamic, %

Our response to changing market reality

Convenience remains a winning model: 睡

• Continue lucrative organic openings and redesigns
• Transformational M&As of Top players (e.g. Dixy) and regional market leaders (e.g. Radezh and Edelweiss)

Supermarkets and Hypermarkets tend to be declining formats:

• Focus on CVP improvement to capture big potential for efficiencies
• Maintain / redesign current stores and restrain opening pace
• Geo exposure with >60% of stores in cities <300 ths. citizens allows to capture mission not vanishing especially in the regions

Discounters grow leveraging on economical instability: हिं

My Price pilots showed positive results allowing to consider discounters as a separate format and start scaling from 2022

Triple-digit sales growth in e-grocery with increasing penetration in the regions:

Recently launched online channel already showing significant progress processing from 7,300 average number of orders per day in January up to 74,500 in December 2021

Expected changes in people behavior leading to changes in consumer portrait

	Trend	Past	Future
RAN	Behavior rationalization - price, quality and usability balance	Price	Superior service + best price
ခြံု	Cross-channel unified experience	Store browsing, limited online	Interaction often starts digitally
$\sum_{n=1}^{n} \sum_{k=1}^{n} a_k$	Focusing on individual identity - personalized experience	Traditional mass channels	Expect relevant and entertaining content in digital
विद	Power of feedback – more ability to influence and being heard	Ability to get compensation or express negative reaction	Ability to influence
௹ஂௐ	Always online - growing dependency on online content	Influenced by brands / retailers	Decision depends on friends, influencers, brands
$\lim_{n}$	Avoidance of mental effort - minimize effort and thinking	Mass product offering / push	Seeking for personalised content
	Fast consumption and decision making	Used to wait	Access whenever / wherever
AB	Conscious consumption - product transparency	No view on sustainability	Care where / how produced and utilized
Asset	Healthy living - demand for proper nutrition	No real care about nutrition influencing health	Readiness to pay for healthy products in certain categories

2021 Strategic Priorities - We Deliver What We Promise

Strategic priorities	Achievements 2021 vs 2020
Improvement of LFL sales growth	LFL sales growth of 7.0% in 2021 – second consecutive year of market-leading LFL sales growth
Accelerate smart organic expansion	2,281 gross new stores of core formats opened 1 in 2021 vs 1,292 in 2020
Proactive and opportunistic return driven 땋 consolidation play	3 M&As – strategic acquisition of Dixy business and two bolt-on । पुँज acquisitions of Edelweiss and Radezh
E-grocery platform development	Full year GMV 2 of Rub 11.2 bn with more than 62,000 orders daily 3
Margin regain	EBITDA margin improvement to 7.2% in 2021 from 7.0% in 2020 on the back of gross margin gains and strict cost control
Improvements in the working capital cycle	>7 days optimization of WC with Rub 18 bn cash release and working capital turning negative RAN
High returns leading to strong dividend payment	ROIC4 growth to 15.7% in 2021 vs 13.8% in 2020 vs 7.9% in 2019 and 20% y-o-y increase in dividend payment 5 圓

Management accounts under IAS 17

1. Including 2021 M&As stores reformatted to Magnit until 31.12.2021 | 2. Gross Merchandizing Value including VAT | 3. Average number for 4Q 2021 | 4. ROIC = NOPLAT / (Avg. Net debt + Avg. Equity) | 5. Based on the first tranche of dividend payment - for 9M2021 of Rub 30 bn vs 9M2020 of Rub 25 bn

Magnit
Capital Markets
Day KEY 2021 RESULTS

Operating Highlights

Net retail sales¹, bn Rub

Number of stores¹, EOP

Selling space¹, ths. sq. m

Net retail sales YoY growth, % $\overline{\phantom{a}}$

LFL sales, %

LFL traffic, %

LFL ticket, %

Core achievements

• Improvement of sales densities $\uparrow$ $\circledcirc$ $\overline{\phantom{a}}$ across all formats
• Sustainable margin and further 嗣言 improvement
• $\bigg|_{\mathbf{0} \, \mathbf{0} \, \mathbf{0}}$

Strict cost control

r ٠

NWC¹ turned to negative driven by significant inventory days improvement

Strong cash generation

Healthy financial position leading $B^{\uparrow\downarrow}$ ( 3 ) to leverage below 1.5x

Concise Profit & Loss

2019	2020	2021	YoY
1,368.7	1,553.8	1,856.1	$+19.5%$
22.8	23.5	23.7	$+0.1$ pp
21.3	20.5	20.6	$0.2$ pp
83.1	109.4	133.1	$+21.7%$
6.1	7.0	7.2	$+0.1$ pp
17.1	37.8	51.7	+36.8%
1.2	2.4	2.8	$+0.4$ pp
193	206	222	$+7.9%$
58.9	25.8	(11.8)	(145.7%)
175.3	121.4	197.0	$+62.3%$
2.1x	1.1x	1.5x	$+0.4x$
58.6	32.1	65.9	$+105%$
(1.3)	84.9	(3.9)	(88.8)
(1.3)	84.9	64.2	(20.7)
7.9%	13.8%	15.7%	$+1.9$ pp

Management accounts under IAS 17, including Dixy

1. Net working capital | 2. FCF incl. Dixy purchase | 3. ROIC = NOPLAT / (Avg. Net debt + Avg. Equity)

Magnit
Capital Markets
Day

STRATEGY EXECUTION UPDATE

Russian Grocery Retail - Sizeable, Rather Mature, Potential for Further Consolidation

$J_{\rm M}$

Market growth is slowing with moderate rates expected

Grocery retail, tn Rub

Russian market offers further growth potential

Modern retail share in grocery retail 2021, %

The market has potential for further consolidation

Share of Top-5 players in grocery retail 2021, $\%$

Our Strategic Goal

Cement current leading Federal retail positions growing market share significantly and profitably

How we get there $-$ at a glance

Keep improving CVP as a key driver of density and profitability

Enhancing ways of working to improve profitability and cash generation

Keep focus on smart organic expansion implying high return targets for new openings while piloting new concept & niches

Continue looking for M&A opportunities for active consolidation play with the aim to selectively (based on strategic and value accretive approach) strengthen our overall positioning

Multi-format OMNI proposition via partners and own services

Process automation, building modern cloud based platform and creating product centric technology organization

1. Net promoter score / consumer satisfaction index | 2. Employee engagement and satisfaction survey | 3. Private label

Key Development Results

Consumers first

• 7.0% LFL sales for 2021 market leader among Russian public food retailers
• Sales density improvement highest growth among Russian public food retailers:

Sales density, ths. Rub per sq. m.

Positive NPS dynamics y-o-y growth $(2021 \text{ vs } 2020)^1$

Convenience	Supermarkets & Superstores	Cosmetics
$+2.5$ pp	$+0.7$ pp	$+0.8$ pp

30 quality awards of our unique own production in 2021

Employer of Choice

• 82% Engaged employees² above average food retail results

• 67% Loyal employees above average food retail results

• 72% Satisfied employees above average food retail results

• +2.6 pp y-o-y growth of eNPS
• Reinforced HR strategy and proactive initiatives helped to offset market pressure on PEX and staffing level

#1 Choice for Investors

• 4.8x EV/EBITDA multiple for 2022⁴
• ~11% dividend yield highest among EEMEA food retailers⁵
• +20% dividend growth in 2021 vs 2020⁶
• 19.5% upbeat sales growth above expectations
• New store openings payback with ROI c.47%

• Store redesigns yield lucrative sales uplift +18%

• Average for four quarters | 2. Share of Magnit employees with good perception of all company life spheres - 50 metrics; assessment via Happy Job platform | 3. MSCI Europe Retailing Index | 4. As of 04.02.2022 | 5. According to investment banks estimates for 2022 | 6. Based on the first tranche of dividend payment - for 9M2021 of Rub 30bn vs 9M2020 of Rub 25bn

Achievements to Date - CVP Evolution

Redesigns

• 611 redesigns of Convenience and 74 of Supermarkets & Superstores
• New Cosmetic redesign concept piloted in 5 stores in Moscow, St. Petersburg and Krasnodar with sales uplift of >20%

Category management

Commercial processes

Partnership with suppliers

• Significant progress with assortment harmonization matryoshka principal led to matrixes reduction by 25%+ y-o-y
• "Best in local" ambition supported via local catman and marketing (e.g. +27% local milk products suppliers y-o-y)
• CVP clusters implementation started based on difference in consumer behavior and needs for all key formats
• Updated category review methodology analytics, goal setting and schedule led to +60% category reviews y-o-y
• Novelties listings sped up by 25% y-o-y thanks to lean processes of assortment management
• Successful pricing pilots to secure best positioning on KVIs and profitability on Back Basket within complex competition
• Deep cooperation across various functions, e.g. SRM¹ 2.0 development, implants and joint business planning
• Magnit assessment by suppliers showed significant improvement of c.50% y-o-y²

• 870 or 19% y-o-y new federal and local suppliers products presented on the shelves

Private Label and Sourcing

• +2pp PL³ share growth y-o-y driven by portfolio optimization (cross-category brands focus) and launch of 746 new SKUs⁴
• Own production revenue growth by 32% y-o-y due to demand increase
• +291 new Direct Import contracts signed incl. suppliers from 10+ new countries

Marketing & Communication

As of 31.12.2021

• Execution of new Magnit Cosmetic positioning "To Care Means to Love"
• Launch of three thematic clubs with valuable offers and content in the Magnit App (Zoo, Beauty & healthy club, Mom's)
• The loyalty program delivered positive cross-format gains with 55% of consumers visiting 2+ store formats⁵

Achievements to Date - Growth Points and Transformation

• Gross organic openings of $1,450$ Magnit¹, 825 Cosmetics¹ and 6 Supermarkets meaning 77.6% growth y-o-y
• Dixy strategic acquisition and successful extraction of synergies planned for the 1st phase
• Successful track record of bolt-on acquisitions
• Successful My Price discounter pilots of 190 stores showing returns of >50%² followed by rollout decision
• Concept tailoring of new promising ventures City and GO and launch of updated pilots

• Multi-format e-commerce rollout (incl. dark stores scaling) leading to >62,000 average daily orders³ and Rub 11.2 bn GMV⁴

• 80%+ y-o-y Super App MAU⁶ growth thanks to significant progress in user experience, features and content management
• Gastronom acquisition to enhance ecosystem and omni CJ⁵ with 18 mn MAU and > 600 ths. unique content articles

Digital Transformation

Development

Intensive

Growth

OMNI

• New principles of modern cloud based technology platform and product centric technology organization
• Big Data & Machine Learning use cases with 2021 EBITDA influence of Rub 1.5 bn and improved decision making
• IT landscape upgrade on track incl. SAP-based ERP integration and Supply Chain related big box solutions (e.g. F&R, TMS)

Organizational Design & HR

• Updated HR strategy uniting all efforts on Corporate culture, Employer brand, Organizational design, Talents and EVP

• 82% share of engaged employees and growing eNPS +2.6pp y-o-y

• New dedicated functional leaders to strengthen finance, marketing, e-commerce and technology capabilities

ESG & Sustainability

As of 31.12.2021

• Enhanced Health & Wellness part of Sustainability Strategy 2025
• Continued development of international partnerships and enhanced dialog with key stakeholders

Clear Strategy Execution Plan (1/2)

Strategic pillar	Short-term 2022-2023		Mid-to-long term 2024-2025
	Continuous evolution of CVP incl. new redesign concepts
	Store clustering		Advanced multi clustering
	Big Data, ML and Al
Consumer first	Marketing efforts digitalization - econometrics, loyalty 2.0, SMM, bloggers
	CVM pilots	Deep personalization
	New brand positioning	Business efforts synchronization around brand values
	Continuous return driven expansion of core formats
	Discounter scaling and concept tailoring		Discounter as a full featured Magnit format
Most efficient &	Extended pilots of promising new formats
promising	Dixy integration finished Opportunistic M&A deals
ways to market	Multi-format online channel development
	Super App development and transition to the omni-channel consumer journey
	New Private Label, Direct Import and Own Production strategy execution			Target 25%+ share in sales

Clear Strategy Execution Plan (2/2)

Strategic pillar	Short-term 2022-2023	Mid-to-long term 2024-2025
	Functional strategies synchro	Constant format & functional strategies update
Modern & efficient	Continuous E2E processes re-engineering SAP Enterprise Resource Planning (ERP) system integration until 2025
platform	Core systems roll-out: TMS, WMS, F&R	Cloud technology platform
		Product approach and agile practices continuous integration to drive business and technology cooperation and reduce TTM 1
Organizational design evolution to reflect focus / additional complexity
	Maintaining staffing level via advanced recruiting technologies
	New corporate culture Further values implementation into day-to-day working routine
Employer of choice	Constant feedback collection to drive changes: HR brand in social networks and employee engagement and satisfaction survey
	Updated pay policy & benefits Constant work on EVP enhancement
	Continuous training program improvement & learning process automation
	Continuous HR processes optimization and digitalization

Growth Highlights

Speeding up organic growth

Active consolidation play

1. Including 2021 M&As stores reformatted to Magnit until 31.12.2021 | 2. Planned number of stores to be opened on the acquired premises

Dixy Acquisition

Strategic rationale:

Market share boost in Moscow and Moscow region by 2.1x and St. Petersburg and Leningrad region by 1.7x

Significant synergetic effect

$2,477$ stores		Moscow	Central (ex. Moscow)	St. Petersburg	North West (ex. St. Petersburg)	Urals	Total
	Convenience Stores	406	1,367	332	238	95 1	2,438
Operating DCs	Supermarkets & METAMAPT Superstores			$\equiv$	$\blacksquare$	39	39
North West	Distribution Centers		2 1	$\mathbf{I}$	$\blacksquare$	$\mathbf{I}$	5
Central Urals	Region share in Russian food retail, %	15%	20%	5%	6%	8%

Dixy: Realized Quick Wins and Continue Roll-out Synergies Extraction [M]

	Phase 1 Learning & Quick Wins	Phase 2 Capturing Value	Phase 3 New Organization
Timing	Until 01 Jan 2022	Until 01 Jan 2023	After 2H'22-1H'23
	Phase completed	In progress	To be started
	• Launch IMO & establish governance structure	Continue roll-out of efficiency projects aimed at synergies	• Integration process is over - business runs as usual with all
	• Identify, assess and prepare plans for synergies extraction	extraction and profitability uplift	changes becoming common practice
Key steps	• Alignment in every integration area on strategic questions, functional design, target operating model and prepare robust plan	Best practices implementation both to Dixy and Magnit Introduce aligned HR fundamentals-organizational and corporate culture
	Learning (incl. team assessment) and approach development
Synergies	Quick Wins implementation
		All synergies implementation

Key achievements to date

Smooth integration

allowing not to lose pace and meet targets: Revenue, Sales Density and EBITDA

■■

All FAS requirements are timely met

in terms of store base optimization

95 Dixy stores in Urals¹

are in process of transferring to Magnit formats

1.5 pp commercial margin uplift
driven by joint procurement conditions

Benefits from scale on SG&A side

Magnit's tariffs for bank guaranties, acquiring, cash collection, banking services, noncommercial procurement, marketing etc.

$(39.3)$ % TMMA² staff turnover decrease

Next steps

• O Further profitability uplift for Dixy via synergies execution
• 2 Magnit's Direct Import and Private Label categories implementation started and being executed
• $\bullet$ Backward upside for Magnit Dixy's category expertise in Moscow
• Extra synergies via joint marketing efforts
• Rent negotiation campaign for Dixy stores
• Megamart stores in Urals to be transferred to Magnit supermarkets and superstores
• Agile approach towards functional cooperation, organizational structure and SG&A optimization

>25% EBITDA increase in 2022

We have successfully expanded our presence in the regions

1. Presence increase is based on number of stores I 2. Part of Magnit cosmetics stores are together with convenience in the same location 13.30 stores (24 convenience stores, 3 discounters, 3 drogeries) already operate und Magnit brand and 34 stores will be opened in 2022 and 3 stores in 2023+14. 42 stores (39 convenience stores; 3 drogeries) already operate under Magnit brand and 14 stores will be opened in 2022

$\mathbb{T}^\infty$

INVESTORS

FOCUS ON DELIVERING THE BEST PROPOSITION TO OUR CONSUMERS

Magnit Umbrella Brand - Consumer Missions and Formats

		Core offline formats incl. pharmacies in grocery and drogerie stores					New promising ventures
٠		Mj		l x j	$\sqrt{1 + \frac{1}{2}}$		JMJ
• Focus	Near home Convenience	Family Supermarket	Extra Superstore	Cosmetic Drogerie	Apteka Pharmacy	My price Discounter	City Food-to-go	GO Kiosk
Additional			+ e-commerce covering all missions with broad assortment offering
On-the-go
Core missions Food for tonight 1			œ
Regular shopping
Major stock-up			$\blacksquare$
Special need / occasion
Size, sq.m	348	700-2,350	2,351-5,000	130-350	20-90	150-250	100-160	$15 - 50$
Avg. active assortment, SKU	5,076	14,703	22,697	7,403	5,000	2,000	3,200	300

Differentiating pillars

Multi-format model

One Magnit brand

One loyalty program

Emotional touch

Own production facilities

1. Including Ready-to-eat

Mj

Magnit Convenience

Concise CVP

O Positioning

Everything you need for better today

Store with all the goods that you need here and now for people who search for shopping experience which fits their daily needs

2 Missions

• Food for tonight • Ready-to-eat
• Regular shopping

8 Locations & Size

Residential and business areas. shopping malls

348 avg. selling space, sq. m.

4 Sales mix, %

Key 2021 achievements

16,190 store base with +9% growth y-o-y

|||||||||||||||||||||||||||||||||||||||

+12.8%

Net retail sales growth $y$ -o-y

$+8.2\%$ الكبي

Solid LFL sales growth supported by positive ticket and traffic

across the geography

Commercial strategy update

$+8.3%$	31.5% or +1.5pp y-o-y	Matrixes harmonized	Coffee corner
Target categories LFL growth	Share of novelties in target assortment	Dry shelf matrixes unification to secure efficiency in the system	Extended bakery pilot with dedicated leadership
$+1.7$ pp	Clustering started	Assortment rationalization Ready-to-Eat
Private Label share	>20% of stores in 6 months	Smart offering premiumization to	>30% assortment extension

address more units-of-need

in sales growth y-o-y without additional CAPEX

Operational excellence

Magnit Supermarket and Superstore

Concise CVP

Supermarket

O Positioning

Food Experience Matters

in a full-feature supermarket with an extended assortment, improved experience and reasonable prices

2 Missions

• Food for tonight • Ready-to-eat
• Regular shopping
• Minor stock-up

8 Locations & Size

Residential and business areas. shopping malls

1.994

Rub 570

avg. ticket¹

14.703

avg. # of SKUs

avg. selling space, sq.m

40% 4% 56% Fresh Non-Food Dry

Superstore

O Positioning

Shopping as valuable in-store experience for all the family with extended assortment for all consumer missions with articular focus on value for money

2 Missions

• Food for tonight • Ready-to-eat
• Regular shopping • Major stock-up
• Seasonal purchases

8 Locations & Size

3.675 Residential areas and highways avg. selling space, sg.m.

Key 2021 achievements

Marketing strategy update

Specific front signs	Tailored media mix
Specific dedicated promo activities	Focus on OOH 2 & TV for Magnit Family and OOH 2 , radio and digital drive traffic for seasonal offering in Extra
Commercial strategy update

$+2.3$ pp

Private Label share

30.5% or +7pp y-o-y

Share of novelties in target in sales growth y-o-y assortment

New clusters Seasonal offers

Premium stores and stores tailored for village locations

Development of new seasonal assortment to drive store visiting

Focus on fresh

Fresh assortment extension including culinary and F&V3

More units-of-need

Wider coverage of consumer demand (e.g. farmer corner, health)

Portfolio average figures

Magnit Cosmetic

Concise CVP

O Positioning

To care means to love

Store for women allowing to keep care about herself, her home and beloved ones so they appreciate it

2 Missions

• Regular shopping of personal care and household goods

		3 Locations & Size
--	--	---------------------------	--	--	--

Residential areas. malls and traffic streets

230 avg. selling space, sq. m

4 Sales mix, %

Key 2021 achievements

||
||秋| 6,966 store base with +13% growth y-o-y

4% +13.4% Net retail sales growth $y$ -o-y

Updated marketing

Commercial strategy update

$+6.9%$	$+0.9$ pp	31.7% or +9pp y-o-y	Brand positioning
Target categories LFL growth	Private Label share in sales growth y-o-y	Share of novelties in target assortment	New campaign execution - "To Care Means to Love"
Rezoning started	Trendy offering	Exclusive brands
>30% of stores in 12 month enabling new clustering	Novelties to capture modern trends in target categories	Expansion to create emotional connection in 'For Her' and 'For Beloved Ones' worlds	Digital & SMM2 +78% audience reach in social media thanks to influencers
Operational excellence
$+2pp$	Trainings in Beauty	Updated SC 3 strategy	Magnit APP Promotion
Mystery shopper assessment growth meeting 95% level	Dedicated Magnit trainers in beauty category sales for beauty experts	Smart transition to pick- by SKU flow type	Launch of 3 clubs with valuable content and exclusive offerings

Portfolio average figures 1. Excluding VAT | 2. Social Media Marketing | 3. Supply Chain

#MeTime concept – the foundation of design – creating the atmosphere of a beauty salon

New "emotional" and "rational" zones. different in terms of decoration, equipment and lighting

Better decoration and equipment:

• Natural / calm colors
• More eco-materials (e.g. plywood)
• Modernized lighting
• New sales equipment

Digital equipment:

• E-Visage smart mirrors
• Interactive displays
• · Self-service checkouts
• Price-checkers

based on normalized performance of piloted stores

Concise CVP

O Positioning

Federal omni-channel pharmacy chain with optimal assortment at affordable prices

2 Missions

• Occasional purchases of medicines and relevant goods
• Joint needs coverage with the base store

8 Locations & Size

Free areas inside all formats of base stores

$40+$ avg. selling space, sq. m

4 Sales mix, %

Commercial strategy update

Margin boost

+7.4pp commercial margin y-o-y improvement

14.3pp

High marginal SKUs share in sales growth y-o- $y^3$

New openings criteria

+Implemented GIS model for new openings

New clustering

5 clusters: City, Village, Lux, Health Facility, Stock pharmacy

5.5pp

Private Label⁴ share in sales growth $y$ -o- $v^3$

Adaptive pricing

More flexible pricing based on clustering and competition

Assortment rationalization

New assortment groups (e.g. products for adults, lux dietary supplements)

+10,000 SKUs

Listed for e-pharma channel with pick-up option

Updated merchandising

Checkout area extension, new trade equipment concept launch

Operational excellence

Effective regional org. structure with less layers in operations

Up-sell mechanics

New cashier motivation for high-marginal SKU sales

Portfolio average figures

1. Non-medicine includes food & supplements, care & hygiene products, medical devices and others | 2. Excluding VAT | 3. Based on Dec'21 vs Dec'20 comparison | 4. incl. quasi Private Label

Magnit My Price Concept

Core CVP elements

Positioning

A low price no frills store

with nice atmosphere offering limited assortment satisfying main needs

Target Audience

Rational price-sensitive consumers, retirees, families with low income

Locations

Low-budget or low-populated regions with lower rent profile

Assortment

• Optimized assortment range ~2,000 SKUs covering basic units-of-need
• 20% share of PL assortment with an aim to grow to 50+% in the mid-term

Pricing

• Every Day Low Price (EDLP)

• Regular prices 20% lower vs market level¹ driving traffic

• Regular shopping

• Minor stock-up

Store size 150-250

avg. selling space, sq. m

Sales mix, %

2%

• Fresh
• Dry
• Non-Food

Light staffing model

with 2-3 employees per shift

Concept rationale

Discounters complement store portfolio

Target selling space creates no competition

Geographical coverage increase

Effective discounter stores opening even in small capturing areas of 2,000+ inhabitants where convenience model does not work out

Flexible approach to convenience stores remodelling

Reformatting of convenience stores not suitable for redesign allows to improve performance

Strong P&L allowing to invest into prices

Core variance to convenience store²:

• 2pp better shrinkage thanks to reduced fresh assortment $\bullet$
• 1.9pp lower PEX due to effective operations
• x2 less Rent per sq. m

Return-driven play

Lower CAPEX and Inventories results in higher ROI vs convenience store² even with lower EBITDA margin profile

Sufficient communication materials

• store sign, banner, standard info notices and welcome prints

Unique design concept to drive feeling of nice atmosphere with minimum investment

Shelf layout in show boxes and pallets to minimize operational workload keeping light staffing model

Successful results of My Price pilot

190 Stores opened

+30% LFL sales for reformatted stores

Store portfolio operating with positive EBITDA¹

Lower CAPEX difference vs same 40% size convenience store

30-40%

Higher inventory turnover

Returns thanks to strong consumer demand¹

Format implementation roadmap

Magnit
Capital Markets
Day

E-COMMERCE DEVELOPMENT

					M M M M M
					[м] - [м] - [м] - [м] - [м] - Гм] - Гм] - Гм]
					MT MT MT MT MT MT MT MT
					ENT FOUR FOUR FOUR FOUR FOUR FOUR FOUR

E-Grocery

凾

Extreme arowth

• E-grocery showed triple-digit growth outperforming initial forecasts still having potential to grow x2-3 times
• Express mission to serve as the growth engine

Regions as a next growth driver

• Market is highly exposed to capitals now, while share of regional sales² gradually increases (from 38% in May'21 to 43% in Dec'21)
• <300K inhabitants cities showed the highest rates of e-grocery consumers (+10pp vs +8pp for Russia total in 2H'21)

E-Drogerie

• $\begin{array}{|c|} \hline \frac{1}{2} \ \hline \end{array}$
• E-pharma shows $8\%$ penetration⁴ mainly driven by pick-up orders via aggregators
• 88
• Permit for delivery of Rx pharmaceuticals to serve as a strong driver for further category growth

E-commerce strategy at a Glance

• Address request of loyal consumers while akk attracting new ones
• $\overline{\mathbb{E}}$ $\mathbb{E}$ Multi-format proposition – one loyalty program and Omni channel Consumer Journey
• One-window access with single marketing and sales funnel
• Using synergies with core business in operations, commercial expertise, technologies, consumer base and media coverage
• Smart growth leverage existing store network in 血 the regions with high physical presence and build infrastructure (dark stores) in capitals to expand consumer coverage

Solid self-developed product with convenient UX and reliable IT platform

CAPEX-light model leveraging existing infrastructure and competitive advantages via partnerships

Magnit E-commerce Target CVP

Fast development via partnerships benefitting from outsourced last mile and shared marketing costs

Express (>30 mins) Casual small purchase

Regular (2 hours+) Big ticket purchase

Express (~60 mins) Current needs

Click & Collect Under development

$\mathbf{I}$ + $\mathbf{I}$

Regular Under development

Click & Collect All assortment

66% of e-com revenues outside of Moscow and St. Petersburg

partners connected $-$ #1 Retailer in biggest grocery delivery partners

Magnit
Capital Markets
Day

DIGITAL TRANSFORMATION

					INTERNATIONAL PROPERTY AND PROPERTY AND AND AND AND AND AND AND AND AND AND
					MJ MJ MJ MJ MJ MJ MJ
					MT MT MT MT MT MT MT MT
					$\overline{M_1}$ $\overline{M_2}$ $\overline{M_3}$ $\overline{M_4}$ $\overline{M_1}$ $\overline{M_2}$ $\overline{M_3}$ $\overline{M_1}$

Ecosystem of Complementary Services and Strong OMNI Channel Core M

		Current status	Short- / Mid-term plans
Magnit 6	Loyalty program 2.0	59 mn consumers with the loyalty card 67% share of loyalty in sales among all core formats CRM tools for automated campaigns and mass promo support	• Focus on gamification, charity, lottery and content • Working with suppliers focusing on co- creating value and co-investing into the program Personalization and CVM 1 pilots based on managing full consumer life-cycle
Loyalty Gastronom program 2.0 $\mathbb{R}^4$ Online Offline CVP CVP	Partnerships $\mathbf{2}$	97 loyalty partners network 5 co-branded cards with banks	Enhance partnerships and collaborations to drive ecosystem services while optimizing investments
New/In Existing 2 develop- core Ø ment Magnit Partner- ships Mobile $\begin{bmatrix} \overline{\mathbf{H}} \ \overline{\mathbf{H}} \end{bmatrix}$ $\mathbb{P}$	Magnit 3 Pay	Service rolled-out and integrated with omni consumer journey 7.5+ mn electronic cards issued	• Additional expansion with financial service providers 2 (e.g. more value from consumers data, micro-financing) Magnit Pay CVP enhancement to drive penetration
Magnit ≞ஜ Pay	4 Magnit Mobile	MVP 3 planned for the end of 1Q 2022	• MVNO roll-out 4 to increase card value and consumer loyalty
	5. Gastronom	Food media platform acquisition: $\cdot$ 18 mn MAU 5 600 ths. pcs of content (recipes, master classes, etc.)	Further platform enhancement through new services, content format, tools and new thematic segments (e.g. physical and mental health, beauty and self-care)

Magnit Super App - Communication and Ecosystem services

Magnit		2021 achievements	Short-term plans
Super App CD Москва г, Обручева ул, 45 V 1212,18 P K Magnit Pay O MarHиTики O Бонусы 60 202,8	General	• 7 mn+ MAU (80%+ growth 1 ) • 4.6 average App rating 2 830 mn+ push-messages delivered	• Stable MAU growth and 4.6+ App rating • >1 bn push-messages delivered • Industry-best UX/UI • Continuous feedback loop and personalization
Только для вас Персональные предложени Шоколад за 39,99Р Магнит	Marketing 2 & Promo	5 Major marketing campaigns in the App • 3 thematic clubs with content and offers New marketing mechanics	• New loyalty mechanics • Relevant and rich content with enhanced in- App gamification and social features • Personal offer communication via the App
Косметик! одробнее Подробнее С Доставка 20% на	Ecosystem 0 services	Magnit Pay as one of the core App elements • Magnit Mobile pilot launch prepared	• Easier and faster consumer experience
ервый заказ	E-commerce Ø	Launched in a separate App with cross- linked traffic from Super App	E-commerce seamlessly integrated into the Magnit Super App
	Tech & Data 6	• Modern technology stack and platform • Modern Product Analytics MVP	• Single identity and robust cloud platform driving seamless consumer experience across ecosystem • Advanced Product Analytics Platform

Composability as a Core Principle

Flexible & modular Business Architecture adapting to any changes and consumer requests

Focus of our Digital Transformation

• Rapid development, experimentation and implementation

$\mathbb{R}$

Effectiveness

• Best-in-class effectiveness and performance

Flexibility

• Readiness for change when it is needed

Reliability

• World-class reliability and safety

Relevance

• Full synchronization and partnership with business

Expertise

• Deep technological and digital competencies

composable services to provide agility and speed while minimizing costs

Modern Tools & Technologies building

Product-oriented Way of Working helping to find, test and rollout creative solutions to new challenges

Key Fundamentals

Cloud technology

• Scalability on demand allows to always have resources with optimal cost and performance

Microservices / API¹

• Small standardized components allowing flexible configuration and modification of systems

Big Data platform

Data, analytics and machine learning on a single platform accessible to all business users

Cybersecurity

Protection from external threats and security of internal processes

Culture of quick development

Tools, processes and culture of high speed development in product teams

Big data & Artificial Intelligence & Machine Learning

	Results 2021 Impact on EBITDA Rub 1.5 bn	Plans 2022 Impact on EBITDA Rub >2.5 bn
Promo demand $\langle \circ \rangle$ forecasting	New platform with average accuracy of 2.4% above industry standards	• Further scale out Deep Neural Networks algorithms Start integration with Relex and F&R system
$\left[\frac{+}{\times} \right]_+^{\infty}$ Commercial block	Promo optimization tool for commercial department CDT I created and implemented into category reviews $\bullet$	Evolve promo optimization with predictive and optimization components Scale up CDT 1 on all categories $\bullet$
$\begin{array}{c}\n 1.111 \ 1.121 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1.131 \ 1$ On-Shelf Availability	Scaled up and tested on 9,500 stores $\bullet$	Roll-out and operationalize tool for all Magnit stores
Consumer analytics	First version of segmentations implemented into $\bullet$ category reviews Data Monetization Platform launched ٠	Customer Value Management as the main focus for 2022 Implement and roll-out market-leading data-driven platform for E2E decision making
昨. Technology and processes	Moving to Public Clouds (AWS, Azure) for AI / ML workloads Switching to product-centric organizational model Hiring and growing the team	Continue transition to Public Cloud increasing agility and speed while driving down costs Scale out product structure and agile ways of working Create effective and scalable A / B Test Platform

Data Management

Implementation of the first Public Cloud data lake in the Russian retail sector to optimize TCO² while increasing speed and agility

Data governance initiatives allowing every business unit to use self-service tools and cooperate with IT partner coowning data with the self-established goal to make data available within one day of the request

Simplified access and improved reliability of the systems as data consumption grows and risks become more visible

ERP System Integration

j.

	Scope	2021 key results	2022 goals
GOODS MOVEMENT IND LOGISCTICS	Commercial distribution, including reflection in financial accounting	Pilot launched in Cosmetic stores with SAP and new back-office	Further rollout for next stores and formats
NEW BACK .© ERP 1 Transformation	New system "Fault-tolerant modular store back-office management system" (own development)	Significant improvement of in-store operational processes and automation levels	Continue enhancement with new features for all formats
Program is aimed at implementation of FINANCE, NON-COMMERCIAL SAP solutions and a PROCUREMENT AND REAL new back-office system to improve	Entire financial block, incl. the NCP 2 and real estate processes	The first 3 Business Units migrated to SAP	Roll out to Finance
the efficiency of main business processes in Magnit (until 2025) HUMAN RESOURCES	Almost all HR processes	The first 3 Business Units migrated to SAP HR	and HR processes across Head Office
NFORMATIONAL ECHNOLOGIES	Technology Design, Infrastructure, integration tools and support	SAP implemented in production mode with main operational processes in place	Purchase, install and operate at scale target SAP infrastructure for further rollout

Supply Chain Solutions Upgrade

F&R Forecast & Replenishment

Continue building and rolling out solution to all geographies and categories

Cloud-native data processing layer and SaaS¹ platform with rich out of the box functionality

Most powerful and innovative solution in the market based on advanced in-memory architecture

Current status: 40% of the Krasnodar DC categories already run on a new platform

Continue enhancement and roll out through 2022 (target 30% of categories across all DCs) finishing the rollout in 2023

Based on the learnings from Manhatten pilot adjusting the strategy and designing the solution to combine best out of the box functionality with required flexibility of Magnit

Focus on selection and piloting of the new platform driving componentization and microservices architecture

Current status: Continue running and extending existing Magnit custom WMS

Pilot the new solution and platform to test approach on a single DC in 2022

Transportation Management

Covers all sources of transportation and freight calculations

Allows to develop just-in-time delivery scheme

Well integrated with core ERP solution - combining accounting and optimization logic

Current status: Go live on track for 1H'22 with full roll-out planned before the end of 2022

Values for Magnit

KPIs to monitor transformation progress

Consumer-centric value		KPIs	Strategic Target
B proposition	Fast	Average cycle time to deliver change (from funding approval to delivery)	>50% increase from 2021
		Average release frequency for new features	Every fortnight
Faster time-to-market imik		Time to data accessibility	$3$ days
Cost savings on redundant	Agile	Number of API's accessible through API GW 1	$200+$
電 highly manual / operational roles		Percentage of modern applications in the landscape	>70%
	Efficient	Ratio of costs change / run (as %)	70% change / 30% run
Access to valuable consumer $\sqrt{2}$ data		Percentage of applications in the cloud	$>30\%$
		Cost for data accessibility	>50% reduction vs 2021
Higher level of employee	Resilient	Number of Critical or High Incidents	>50% reduction vs 2021
$\bigotimes$ engagement		Percentage of incidents restored within SLA	100%
		Data leakage prevention coverage	100%

Combination of Product Delivery Structure and Agile

Product Delivery Model

A structure providing end-to-end services and products

• Cross-functional teams with technology, business and functions
• Self-sufficient and autonomous to operate E2E
• Empowered to make decisions fast
• Clear and meaningful KPIs

Agile Approach

A methodology of work based on iterative delivery

• Start work without all the answers and evolve
• Deliver in increments, on time, quality & budget
• Adapt to unforeseen changes in business and delivery
• Measure success by facts and numbers

Values for Magnit

Technology

esse
MM Small, empowered, co-located and cross-functional teams

Business

$\sum_{i=1}^{n} \sum_{j=1}^{n} a_{ij} \left( \sum_{j=1}^{n} a_{ij} \right)$

Shared responsibility

& Clear accountability

智

Delivery

$\boxed{Q}$

Lower operating costs

READ

• Faster TTM with iterative approach to work-fail fast, learn, adapt and improve
• "또는 Multi-disciplinary teams for E2E delivery

Key delivery enablers

Become employer of choice

Employee centric culture

• Boost business ownership at all levels via leadership development
• Business development via $\bullet$ employee engagement

2 Lead labor market change

• Modern and proactive approaches to attracting personnel
• Flexible organizational structures, work regimes and processes

8 Acknowledge company talents

• Prioritize talent development and career planning
• Advance education via Corporate Academy

Smart employer¹ $\bullet$

• Reengineer and $\bullet$ automate processes
• Data-driven and valuecost decisions

Ambition supported by tailored offering

Dimension / functional area

HR Strategy Enablers

Basic principle based on planning cycle

Focus on results:

• Higher share of bonus vs fixed part at higher management level
• Individual KPIs vary from year to year to focus on key areas for improvement
• Bonus paid only for improvement and not for maintaining basic functions

Common goals alignment:

• All top managers have the same corporate KPIs as a part of their motivation
• Cross-functional KPIs shared between managers are used as individual KPIs
• Higher proportion of corporate KPIs vs individual KPIs in line with seniority

	Short-term incentive program	Long-term incentive program
		Share-based part	Option-based part
Period	Annual		2018-2022
KPI type	Corporate + Individual	Corporate
KPIs (corporate) $2$	• LFL sales growth $(\%)$ EBITDA (Rub bn)	Share price growth on the option price exercise date
Triggers	• LFL sales growth $(\%)$ • EBITDA (Rub bn) Working capital (days)	10% EBITDA CAGR vs 2018	Share price of Rub 4,700

COMMITMENT TO ESG

ESG is in Everything We Do

O Environment

$30\%$ $\star$

greenhouse gas emissions reduction¹

50%

private labels and own production packaging be recyclable, reusable or compostable

50% ▼

food waste reduction¹

$25%$ $\star$

reduction of water and energy consumption¹

100%

recyclable plastics in own operations are recovered and recycled

17 PARTNERSHIPS
TOR THE GOALS

Sustainable Sourcing 2

Responsible sourcing for commercial and noncommercial purchases

100%

responsible sourcing for socially important product categories;

Increase of green packaging

100%

responsible own production and agriculture

Development and partnership programs for local suppliers and farmers

8 Employees

8 DECENT WORK A

$\gamma$

70%

rate of employee satisfaction

50% v

lost time incidents rate reduction and zero fatalities

Max 40%

turnover rate

Communities $\left( 4\right)$

TWORKAND 17 PARTNERSH
Inic Growth 17 For the Gov

$\circledast$

10%

employee volunteers

Community programs for all the regions of the Company's presence.

6 Health & Wellness

3 SOOD HEALTH

Information about healthy lifestyle and nutrition is available to all of consumers

Health related products are available to all of consumers

• Dixy integration into Magnit's sustainability strategy is on the way
• Progress towards commitments 2025 including Dixy cases will be reported in dedicated Sustainability Report 2021

Status Independent Non-Executive Director
Non-Executive Director CEO	Charles Ryan	Naira Adamyan	Tim Demchenko	Jan Dunning	Walter Koch	Alexey Makhnev	Vsevolod Rozanov	James Simmons	Alexander Vinokurov	Pierre Laurent Wetli	Sergey Zakharov
Committees	Chairman of the Board	Member of the Board	Member of the Board	Chairman of the Management	Member of the Board	Member of the Board	Member of the Board	Deputy Chairman	Member of the Board	Member of the Board	Member of the Board
Chairman	of Directors	of Directors	of Directors	Board, President and CEO	of Directors	of Directors	of Directors	of the Board of Directors	of Directors	of Directors	of Directors
Member
Audit
HR and Rem
Strategy
Capital Markets

• •
• •
• •

• •

• •

• •
• •

Adherence to sustain high return requirements for new projects

One step up

Gross

Profit

Topline

• Sales density increase
• Improvement of supplier conditions
• Better promo coverage and promo margin
• Growth in private label penetration
• Further reduction of shrinkage
• Supply-chain cost optimization
• Positive effect from the format mix
• SG&A
• Automation and robotization of business processes

Focus on constant improvement of returns and value accretion for shareholders. Expect double-digit ROIC¹ growth in 2025 vs 2021

$(\%)$

Capacity for annual increase of dividend payments depending on financial position and subject to Board decision & shareholder approval

Improvement of working capital with a focus on stock days optimization ′⊕ି by 4-7 days, including:

Benefits from lucrative EBITDA margin steadily improving to 8.0% within 2021-2024

and 8%+ from 2025 despite expansion of e-commerce channel and discounters

• 3-5 days in grocery
• 10-15 days in drogerie

Continue following strict return requirements for all projects. NORTH STAR CAPEX to remain <4.0% as % of sales

剛≡

Comfortable leverage of ~1.5x of Net Debt/EBITDA with a selfimposed ceiling of 2.0x and high potential to factually fall to around 1.0x in the next years subject to M&A opportunities