Shufersal Ltd.

Investor Presentation • Mar 22, 2023

Company Presentation

Disclaimer

This Presentation was prepared by Shufersal Ltd. (the "Company"). This presentation does not constitute an offering for the purchase or sale of the Company's securities nor an invitation to receive said proposals, rather is solely intended for the provision of information. The information used when presenting the presentation ( the "Information") is provided therein for convenience purposes only and does not constitute grounds for making investments decisions, nor does it constitute a recommendation or an opinion and by no means does it substitute the investor's discretion. The presentation may include information published by third parties, the content thereof was not independently reviewed by the Company; consequently, the Company shall not be liable for its correctness. In addition, the presentation may include information based on assessments of the Company's market, data and statistical and public publications released by various authorities and third parties, the contents of which have not been independently verified by the Company, and therefore the Company is not responsible for its correctness. What has been set forth in the presentation with respect to the analysis of the Company's operations is solely summative and in order to obtain a more comprehensive review of the Company's operations and the risks it faces, one should refer to the Company's Annual Report for 2022, its Quarterly Financial Statements and its Immediate Reports as reported in the Magna System website.

The terms set forth in this presentation may be presented at a segmentation or level of detail different than those set forth in the Company's Reports or may include information that was not yet included in the Company's Reports or that was not presented as it was presented in said presentation, which to the best of the Company's knowledge are correct as of the date of their presentation.

The presentation includes Forward Looking Information, as is defined in the Securities Law, 1968 ("Forward Looking Information") even if it was not explicitly stated in its regard, which includes, inter alia, the Company's forecasts, objectives, assessments and estimations with respect to future events the materialization of which is not certain and is beyond the Company's control; which are based, inter alia, on information held by the Company as of this date, on the Company's internal assessments and expectations. The Company has no certainty that its forecasts, objectives and/or assessments shall be materialized, in whole or in part; this, inter alia, due to factors beyond the Company's control, such as changes in the market terms and environment, regulatory changes and/or the materialization of any of the Company's risk factors. In view of the foregoing, the Forward Looking Information may not be materialized or may materialize in a materially differently manner than what has been forecasted; therefore, inter alia, the Company's de facto results and accomplishments may materially differ from those presented in the Forward Looking Information. The Company does not undertake to update the information included in the presentation, in whole or in part, for it to reflect events and/or circumstances occurring after the preparation of the presentation.

Shufersal At a Glance

Founded in 1957

As Israel's first modern supermarket chain, Shufersal is the country's leading and largest food retailer

ಲ್ಲಾರ 1 2
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Wide range & diverse retails formats

with nationwide deployment

Three main segments(1) :

• Retail ~92% of sales
  • Retail stores
  • Online
  • Private label
  • Finance
  • B2B
• Be (Pharma) c-7% of sales
• Real Estate (commercial properties incl. Shufersal stores) c-1% of sales

Leading online retail in Israel with the country's largest e-commerce website

Developing marketplace offering

Shufersal Group

Strategy

Growing online Segment ; and a developing marketplace offering

Change in Sales and CPI (StoreNext)

Israel FMCG, 2022 compared to 2021

COVID-19

Shufersal 2022 – Key Metrics

c.18%

Food Retail Market Share(1)

7

(1) As of % of sales in Shufersal's stores & distribution centers . (2) As of March 14, 2023. (3) As of October 3, 2022.

RETAIL

Retail KPIs

(1) Shufersal stores, including online sales, excluding Online Be and "Rural region"

(2) Shufersal stores, excluding shipping centers

9

Strengthening the premises in the branches

• Currently in 10 branches
• The complexes opening improved the sales of the pharmacy in these branches
• Reaching the premises in 30 branches within 4 years

• Non-Food departments
• 35 large branches including electrical products and household appliances

• About 100 branches
• Continue GREEN private brand development

Shufersal Online: Israel's #1 E-commerce Website

Shufersal Online's Startegy contributed to increased sales

• Nationwide footprint, backed by robust logistic

infrastructure covering 100% of the population

• Additional non-food items (e.g. furniture, appliances,

outdoor) & "Be" pharma and cosmetic products

Automatic shipping center (CFC)

The online sales rate through automatic delivery centers is expected to reach 25% - 30% in a representative year.

Kadima – go-live in August 2021. And completed ramp-up to achieve full production rates on April 2022.

Modi'in - commercial operations scheduled in early 2023.

Online Sales as % of Sales in Shufersal Stores & shipping stores

Consistent Expansion of Private Label

Israel's Largest Customers Club

Customers Club Overview

• #1 Loyalty program with over 2mn households
• Launch of a new Loyalty program "SUPREME" which offers an improvement in terms and benefits for customers and an easy and fast connection with the PayBox digital wallet
• Most loyal customers convert into the credit card retailer club, which is Israel's leading credit card club
• Cards issued by leading credit card company CAL, leveraging Shufersal distribution network

Leumi Card CAL

Evolution of Active Cards Over Time (1)

(1) Excluding run-off of previous Leumi Card cards from 2018 onwards.

13

Shufersal B2B Tapping into a Fragmented Wholesale Market

Cash & Carry

• Opened 1 st store in 2018, targeting urban minimarkets, kiosks and food service customer.
• Attractive value proposition to merchants: one stop shop solution with attractive prices.
• Currently 2 stores, with the 3 rd store in construction; online site launched in mid 2019.

Rural & Urban Region

• Providing solutions for groceries in rural communities, "kibbutzim" and urban groceries.
• Serving about 600 points of sale nationwide.

Professional Market

• Shufersal Amiga - sale, marketing and distribution of food products in the professional market: cafes, restaurants, catering companies, nursing homes and more.

Cash & Carry ,"Rural & Urban Region" and "Shufersal Amiga" represent a compelling growth opportunity, targeting an overall market of NIS~12 NIS B composed of mini-markets, groceries and food service (1)

Technological Innovation

A successful pilot was carried out in two branches this year, the results of which are:

• Increasing the shopping basket
• Savings in operating expenses
• Increasing customer satisfaction
• Reaching 50 Shufersal Deal branches with a smart cart in 2023
• In collaboration with Shopic

Be

Be – Expansion into Pharma, Cosmetic and Toiletry (Cont'd)

Rapidly Growing Segment

Number of Stores

Strategic Initiatives

• Online pharmacy – delivery through Shufersal website or pick up in stores
  • Dedicated shipping center for online Be products
• Niche positioning
  • Vitamins/perfumes with attractive value proposition
  • Medical cannabis
• Cross-buy on Shufersal shopping floors
• Be private label

REAL ESTATE

222,000 sq m (1)

Yielding areas (excluding parking lots)

About NIS 206 million The company's income

79 assets Amount of assets (1)

160,000 sq m Available building rights (gross area including parking lots) (1)

NIS 118 million

FFO

NIS 172 million EBITDA

* Unaudited data based on Shufersal Real Estate's financial reports for December 30, 2022

97%

Wide

dispersal

Percentage of occupancy

44

Cities across Israel

Shufersal Real Estate

Improving group's financial profile

Real estate enhancement

Real estate value in NIS billion*

Key Financials (NIS M)

Consistent revenue and profit stream*

Financial Performance

Revenue (NIS M)

EBITDA(2) (NIS M)

(1) Before other income & expenses.

23 (2) Operating profit before other expenses less depreciation and amortization.

(3) The net profit on 2022 neutralizing the effect of a one-time expense for the efficiency plan is about NIS 162 million

Operating Profit(1) (NIS M)

Financial Performance- Q4

EBITDA(2) (NIS M)

Operating Profit(1) (NIS M)

Net Income (NIS M)

(1) Before other income & expenses.

(2) Operating profit before other expenses less depreciation and amortization.

24 (3) The net profit in the 4th quarter, excluding the effect of a one-time expense for the efficiency plan is about NIS 12 million.

Segments

-76 -3

2

Exceptional Liquidity and Balanced Debt Profile

(NIS millions) in	1-12 2022
Linked Bonds CPI Non	600 1 ,
Linked Bonds CPI	885
Total Debt *	2 485 ,
Cash & ST Investments	(721)
Debt Net	1 764 ,

Future Bond Repayments(1)

(NIS M)

• Well staggered debt maturity profile
• ilAA debentures credit rating by S&P Maalot (ilAA-/ Stable company rating)
• 100% unencumbered real estate assets

26 (1) Including interest. *As of September 30, 2022, the company has SWAP transactions for the exchange of NIS index-linked flows with fixed NIS flows for bonds (series F) in the amount of NIS 467 million.

Debt Levels that support the company's strategy (NIS B)

Note: excluding IFRS-16 liability

27

Liabilities to banking corporations, debentures, including interest payable

Excluding cash and cash equivalents, short term deposits and marketable securities.

Appendix

Consolidated Income Statement

(NISmn)	)1( 2019	2020	2021	2022
Revenues	13 360 ,	15 233 ,	14 765 ,	14 662 ,
(%) growth	0% 4	0% 14	1% -3	7% -0
Gross Profit	3 609 ,	4 043 ,	4 021 ,	3 882 ,
(%) margin	0% 27	5% 26	2% 27	5% 26
Operating expenses	(3 088) ,	(3 325) ,	(3 295) ,	(3 488) ,
Operating Profit	521	718	726	394
margin (%)	3 9%	4 7%	4 9%	2 7%
Other (Expenses) Income Net ,	36	27	53	(111)
Financing net expenses,	(259)	(232)	(245)	(207)
Net Income	268	387	393	2
margin (%)	2 0%	2 5%	2 7%	0 0%
EBITDA	1 266 ,	1 514 ,	1 559 ,	1 294 ,
margin (%)	9 5%	9 9%	10 6%	8 8%

Balance sheet (assets)

(NISmn)	2019	2021	2022
Cash and cash equivalents Short deposits -term ,	355	286 1 ,	721
Trade receivables	373 1 ,	1 441 ,	467 1 ,
Other receivables & Other investments	169	175	170
Inventory	910	914	928
Total Current Assets	2 807 ,	3 816 ,	3 286 ,
deposits Long -term	-	0	-
in associate Investments	94	206	108
Other investments	96	66	29
plant and equipment Property ,	3 101 ,	3 397 ,	3 530 ,
Intangible and deferred assets expenses , Receivables and debit balances Deferred & taxes	1 535 ,	1 605 ,	1 803 ,
Investment property	721	878	1 380 ,
Right -of assets -use	3 596 ,	4 313 ,	4 411 ,
Total Assets	11 950 ,	14 281 ,	14 547 ,

Balance sheet (liabilities and equity)

(NISmn)	2019	2021	2022
liabilities Current
of bonds & Credit Current maturities in respect from banks	360	302	316
of lease liabilities Current maturities	342	392	416
Trade payables	2 008 ,	2 177 ,	2 248 ,
of Liability partnership in option acquire respect to	73	-	-
Other payables and Provisions	892	188 1 ,	248 1 ,
Total liabilities Current	3 675 ,	4 059 ,	4 228 ,
liabilities Non - current
Liabilities banking corporations to			86
Bonds	2 621 ,	2 422 ,	2 178 ,
liabilities Lease	3 278 ,	4 004 ,	4 172 ,
benefits Employee & Other liabilities , net	300	423	490
Deferred taxes	132	153	174
Total liabilities non-current	6 331 ,	7 002 ,	7 100 ,
Equity	1 944 ,	3 220 ,	3 219 ,
31 Total liabilities and equity	11 950 ,	14 281 ,	14 547 ,

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