Shufersal Ltd.

Investor Presentation • Nov 28, 2022

Company Presentation Q3 2022

November 2022

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 2021, 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

Wide range of retails formats catering to all segments of the population, with nationwide footprint

Three main segments(1) :

• Retail c-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

100% free float

Pioneering online retail in Israel with the country's largest ecommerce website

Developing marketplace offering

Shufersal – Major Anchors

Shufersal Group

Favorable Macro Environment

Growth rates in Israel are among the world's highest

BOI - GDP, Rate of Change, Real Terms (2)

• Standard of living has consistently improved in recent years, fueling the growth of the retail market

6 (1) International Monetary Fund as of Nov 2022 update estimate, BOI for Israel GDP (2) ) BOI estimates as of October 3, 2022. (3) Storenext Food Retail Market Index .

Change in Sales and CPI (StoreNext Food Market)

Israel FMCG, 1-9.2022 compared to 1-9.2021

COVID-19

Growth Strategy

Growing online penetration; and a developing marketplace offering

Opening New Branches

Opening about 90 stores in the next 4 years:

3	12	30	32	15

Cash & Carry 10,000 sq m

Dan Deal

Be , sq m

Shufersal Express & Good Market , sq m

Shufersal Deal branches, Shufersal Sheli & Yesh Hesed , sq m

Shufersal 1-9.2022 – Key Metrics

Private Label Share(2)

10

NIS 2.8B Property Owned Value

(1) Based on Company's estimates as of 2021. (2) As of % of sales in Shufersal's stores & shipping centers . (3) As of November 9, 2022. (4) As of October 3, 2022.

RETAIL

Retail KPIs

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

12 (2) Shufersal stores, excluding shipping centers

Strengthening the premises in the branches

• Currently in 10 branches
• The opening of the complexes 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 development of private brand GREEN

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

Shufersal's growth strategy and Shufersal Online's investment policy contributed to increased sales

Pioneered retail shift to online in Israel with 1 st version of Shufersal Online website and application in 2013

Nationwide footprint, backed by robust logistic infrastructure covering 100% of the population

1 st mover advantage allows to maintain clear leadership

More diversified offering than physical stores

• Additional non-food items (e.g. furniture, appliances, outdoor)
• "Be" pharma and cosmetic products

Shufersal Online –

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 for February 2023.

Consistent Expansion of Private Label

Note: Shufersal stores and shipping centers *Q3.2022- 26.7% of sales

16

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

Evolution of Active Cards Over Time (1)

17 (1) Not including run-off of previous Leumi Card cards from 2018 onwards.

Growth Engines- Pay Box

• One of the two leading P2P applications in Israel
• The leading crowdfunding app (40,000+ new groups every month)
• The only "wallet" app that allows balance management
• A digital, totally free credit card that accumulates Cash Back in each purchase

(uniques) 3.3M

+24% 15%+

compared to 31.12.21

Finance

• Collaboration between Shufersal as the leading retail corporation in Israel and the third largest bank - Israel Discount Bank
• Entering the digital wallet market is part of Shufersal's growth strategy in the finance sector and implementation of the technological innovation strategy.
• The digital wallet contributes to Shufersal's positioning as a significant player in the finance sector in Israel
• Development and marketing of financial services to the general public, in collaboration with other service providers, on the basis of an open banking infrastructure
• In April 2022, PayBox expanded its digital wallet services by contracting with Cal to issue a digital credit card to widget users.

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 NIS11.7bn 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

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

Shufersal Real Estate as a Significant Growth Engine

231,000 sq m

Yielding areas (of which 38,000 sq m are parking lots)

About NIS 196 million (1) (1)

The company's income (normalized) **

78 assets Amount of assets

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

NIS 120 million

FFO (normalized)

NIS 166 million EBITDA (normalized) ** **

* Unaudited data based on Shufersal Real Estate's financial reports for September 30, 2022 ** Normalized to full year results. Based on results 1-9.2022 divided by 75%

(1) Without an asset under construction and an asset of an incorporated company

Shufersal Real Estate

Improving group's financial profile

Real estate enhancement

Real estate value in NIS billion*

Key Financials (NISmn)

Consistent revenue and profit stream*

Property at Occupancy Stage | Curdani

Jerusalem Boulevard, Kiryat Motzkin

14,000 sq m. (including parking lot) of which 11,500 sq m. is built-up area

Joint venture
50.1% Company's share – of the
property

Properties Under Development | Ra'anana Zarhin

Zarhin Street, Ra'anana

Approximately 73,000 sq m. of which 40,500 sq m. is above ground

Combination transaction. A marketing process has started and these days agreements are being signed

Estimated date of completion Q3 2023

Income-producing assets | Kfar Saba junction plot 2004

The intersection of Derech HaSharon and Netiv HaAvot streets in Kfar Saba

Approximately 45,000 sq m of which 27,000 sq m. is above ground

Promotion of a city building plan for an additional about 8,000 sq. m. (on the way to the district)

In July 2022, Shufersal Real Estate signed an combination deal with the Rogovin Group. Company's share - 33%

Initiated Assets | Lev HaMifratz Mall "CineMall"

55-61 Histadrut Blvd., Haifa

Approximately 66,000 sq. m. is above ground (including parking lot); There are unused building rights.

An agreement to increase the holding rate from 37% to about 59% in Lev HaMifratz Mall was completed in October 2022

Improvement Potential| Nahariya Lohamei HaGeta'ot

Lohamei HaGeta'ot 45 Nahariya

7,400 sq m. land area of which 5,300 sq m. is above ground 5,100 sq m. in available building rights

Property book value of 48.6M NIS

A conditional sales agreement for promoting an urban building scheme was signed with Reisdor Enterprises Ltd

Choice Available Land

Mitzpe Sapir

Kot

Bazelet Street, Tzur Yigal

25,000 sq m. of which 20,000 sq m. is above ground

Talpiot

Pierre Koenig Street, Jerusalem

45,000 sq m. of which 27,000 sq m. is above ground

Financial Performance

(NISmn)

Net Income (NISmn)

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

36 (3) Adoption of IFRS-16 at the beginning of 2019 has had a positive impact on EBITDA in the amount of NIS422mn in 2019 , an impact of NIS433mn in 2020 and an impact of NIS453mn in 2021 (4) The net profit on 1-9/22 neutralizing the effect of a one-time expense for the efficiency plan is about NIS 138 million

Financial Performance- Q3

Revenue (NISmn) Operating Profit(1) (NISmn)

Net Income (NISmn)

(1) Before other income & expenses.

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

37 (3) The net profit in the 3rd quarter, excluding the effect of a one-time expense for the efficiency plan is about NIS 43 million.

Segments (January-September)

Segments- Q3

Exceptional Liquidity and Balanced Debt Profile

(NIS in millions)	1-9.2022
Non CPI Linked Bonds		1,731
CPI Linked Bonds *		1,050
Total Debt		2,780
Cash & ST Investments		(1,211)
Net Debt		1,569

*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.

Future Bond Repayments(1)

(NISmn)

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

Debt Levels that support the company's strategy (NISbn)

Note: excluding IFRS-16 liability

41

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( 1-9 2019	1-9 2020	1-9 2021	1-9 2022
Revenues	10 021 ,	11 362 ,	11 152 ,	11 013 ,
growth (%)	4 2%	13 4%	-1 8%	-1 2%
Gross Profit	2 711 ,	2 996 ,	3 047 ,	2 922 ,
margin (%)	27 1%	26 4%	27 3%	26 5%
Operating expenses	(2 306) ,	(2 480) ,	(2 480) ,	(2 598) ,
Operating Profit	405	516	567	324
margin (%)	0% 4	5% 4	1% 5	9% 2
Other Income (Expenses) Net ,	(1)	13	1	(123)
Financing net expenses,	(202)	(170)	(173)	(154)
Net Income	151	267	293	-1
margin (%)	5% 1	4% 2	6% 2	0% 0
EBITDA	944	1 103 ,	1 184 ,	994
(%) margin	9 4%	9 7%	10 6%	9 0%

Balance sheet (assets)

(NISmn)	30 09 2019	30 09 2021	30 09 2022
Cash and cash equivalents Short deposits -term ,	570	1 598 ,	1 211 ,
Trade receivables	1 609 ,	1 566 ,	1 700 ,
Other receivables Other & investments	196	179	186
Inventory	944	913	1 005 ,
Total Current Assets	3 319 ,	4 256 ,	4 102 ,
deposits Long -term	-	350	-
Investments in associate	91	210	220
Other investments	99	80	70
plant and equipment Property ,	3 058 ,	3 273 ,	3 507 ,
deferred Intangible and assets expenses , Receivables and debit balances Deferred & taxes	1 335 ,	1 580 ,	1 773 ,
Investment property	681	802	953
Right -of assets -use	3 568 ,	4 193 ,	4 305 ,
Total Assets	12 151 ,	14 744 ,	930 14 ,

Balance sheet (liabilities and equity)

(NISmn)	30 09 2019	30 09 2021	30 09 2022
liabilities Current
of bonds Credit from Current maturities in & respect banks	250	347	360
of lease liabilities Current maturities	360	387	413
Trade payables	2 131 ,	2 379 ,	2 329 ,
Liability of partnership in option acquire respect to	11	-	-
Other payables and Provisions	1 131 ,	1 394 ,	1 611 ,
Total liabilities Current	3 883 ,	507 4 ,	713 4 ,
liabilities Non - current
Bonds	2 853 ,	2 678 ,	2 420 ,
liabilities Lease	3 215 ,	3 874 ,	4 072 ,
Employee benefits Other liabilities & , net	284	421	431
Deferred taxes	121	140	157
Total liabilities non-current	6 473 ,	113 7 ,	080 7 ,
Equity	1 795 ,	3 124 ,	3 137 ,
45 Total liabilities and equity	12 151 ,	14 744 ,	14 930 ,

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