Shufersal Ltd.

Investor Presentation • May 31, 2022

Company Presentation Q1 2022

May 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 1 st modern supermarket, Shufersal is the leading and largest food retailer in the country

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

Three main segments(1) :

• Retail c-91% of sales
  • Retail stores
  • Online
  • Private label
  • Finance
  • B2B
• Be (Pharma) c-8% of sales
• Real Estate (commercial properties incl. Shufersal stores) c-1% of sales

100% free float

experienced management team

I

Pioneered online retail in Israel with largest e-commerce website in the country

Developing marketplace offering

Shufersal – Major Anchors

Shufersal Group

Favorable Macro-Growth rates in Israel are among the highest worldwide

Inflation(2) 0.80% 0.6% -0.7% 2.5% 3.6% 2.0% 2022F 2023F

Inflation- Food Retail Market (3)

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

Change in sales and CPI (StoreNext Food Market)

Israel FMCG, Q1.2022 compared to Q1.2021

Growth Strategy

Growing online penetration; and a developing marketplace offering

Shufersal Q1 2022 – Key Metrics

27.6% Private Label Share(2)

Property Owned Value

NIS 2.7B

(1) Based on Company's estimates as of 2021. (2) As of % of sales in Shufersal's stores & shipping centers . (3) Including Bela store. (4) As of May 23, 2022.

9

Quarterly effects

RETAIL

Same store sales – Retail

(1) Vs 2019

12

Strong and Steady Performance Across All Retail KPIs

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

13

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

1 st mover advantage allows to maintain clear leadership

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

More diversified offering than physical stores

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

14

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

Shufersal Online –

Automatic shipping center(CFC)

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

Kadima – Completed ramp-up by the end of Q1.2022. Fully operational from April 2022. Modi'in - Expected to be in running process at the end of 2022

Consistent Expansion of Private Label

16 *Q1.2022- 27.6% of sales

Israel's Largest Customers Club

Customers Club Overview

• #1 Loyalty program with over 2mn members
• 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)

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

17

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 Fragmented Wholesale Market

Cash & Carry

• Opened 1 st store in 2018, targeting urban minimarkets, kiosks and food service customer. Over 10K points of sale.
• 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 550 points of sale nationwide.

Institutional Market

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

Cash & Carry and "Rural & Urban Region" represent a compelling growth opportunity, targeting an overall market of NIS11.5bn composed of mini-markets, groceries and food service

Be

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

Rapidly Growing Segment

Transition to operating profit in Q1.2022

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
  • Covid-19 antigen rapid tests at BE stores
• Cross-buy on Shufersal shopping floors
• Be private label

REAL ESTATE

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 Company's share – 50.1% of the property

Properties Under Development | Ra'anana Zarhin

Zarhin Street, Ra'anana

sq m.72,600 of which 40,000 sq m. is above ground

Estimated date of completion Q3 2023

Choice Available Land

Mitzpe Sapir

Bazelet Street, Tzur Yigal

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

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

Talpiot

Pierre Koenig Street, Jerusalem

Kfar Saba Junction Plot 2004

Derech Hasharon and Netiv Ha'avot Junction, Kfar Saba

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

Robust Financial Performance

^{305 397 316} 9.5% 9.9% 10.6%

Q1.2019 Q1.2021 Q1.2022

(NISmn)

9.7% 10.5% 9.0%

EBITDA(2)

1,514 1,559

Net Income (NISmn)

27

0.8%

Q1.2022

28 (1) Before other income & expenses.

1,266

(2) 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

Robust Financial Performance Segments

Cash Flow Evolution

Free Cash Flow(1) and Cash Conversion(2) (NISmn)

Commentary

• Disciplined capex policy
• c. NIS 700 mn total investment in new automated logistic centers spread over 4 years from 2018 (4)
• 2018 investment in Be (e.g. stores, IT, rebranding) post acquisition in 2017
• Conservative capex in 2020 due to COVID-19 outbreak

(1) EBITDA – Capex.

30

(2) (EBITDA – Capex) / EBITDA.

(3) Adoption of IFRS-16 at the beginning of 2019 has had a positive impact on EBITDA in the amount of NIS422mn in 2019.

(4) Without capitalization of credit expenses

Exceptional Liquidity and Balanced Debt Profile

Cap Table		Future Bond Repayments(2) (NISmn)
(NIS in millions) Q1.2022		352	373	361	366	404
Non CPI Linked Bonds	1,732
CPI Linked Bonds	997
Total Debt	2,729
Cash & ST Investments	(1,384)
Net Debt	1,345
LTM Net Leverage exc. IFRS-16 Lease(1)	(9.1x)
Lease Liability	4,390	•			Well staggered debt maturity profile
LTM Net Leverage inc. IFRS-16 Lease	18.7x
		•			ilAA-/ Positive credit rating by S&P Maalot
Undrawn RCF	300
Total Liquidity	1,684	•			100% unencumbered real estate assets

• Well staggered debt maturity profile
• ilAA-/ Positive credit rating by S&P Maalot
• 100% unencumbered real estate assets

(1) Net Debt / LTM EBITDA. EBITDA exc. IFRS-16 was calculated by subtracting leased asset amortization and leased liability interest from post IFRS-16 EBIDTA.

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

Note: excluding IFRS-16 liability

32

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( Q1 2019	Q1 2020	Q1 2021	Q1 2022
Revenues	3 149 ,	3 731 ,	3 764 ,	3 499 ,
growth (%)	-0 6%	18 5%	0 9%	0% -7
Gross Profit	860	999	1 018 ,	925
margin (%)	3% 27	8% 26	0% 27	4% 26
Operating expenses	(731)	(828)	(820)	(823)
Operating Profit	129	171	198	102
(%) margin	4 1%	4 6%	5 3%	2 9%
Other Income (Expenses) Net ,	(1)	(1)	0	0
Financing net expenses,	(64)	(50)	(49)	(55)
Net Income	48	90	114	27
(%) margin	1 5%	2 4%	3 0%	0 8%
EBITDA	305	362	397	316
(%) margin	9 7%	9 7%	10 5%	9 0%

Balance sheet (assets)

(NISmn)	31 03 2019	31 03 2021	31 03 2022
Cash and cash equivalents Short deposits -term ,	745	1 411 ,	384 1 ,
Trade receivables	1 297 ,	1 714 ,	1 602 ,
Other receivables Other & investments	172	218	209
Inventory	995	999	1 089 ,
Total Current Assets	3 209 ,	4 342 ,	4 284 ,
deposits Long-term	-	400	-
Investments in associate	-	88	220
Other investments	108	83	61
, plant and Property equipment	3 259 ,	3 202 ,	3 481 ,
Intangible and deferred assets expenses, Deferred Receivables and debit balances & taxes	1 321 ,	1 562 ,	1 605 ,
Investment property	665	797	879
Right -of assets -use	3 311 ,	3 919 ,	4 304 ,
Total Assets	11 873 ,	14 393 ,	14 834 ,

Balance sheet (liabilities and equity)

(NISmn)	31 03 2019	31 03 2021	31 03 2022
liabilities Current
of bonds & Credit from Current maturities in respect banks	195	299	316
of lease liabilities Current maturities	335	360	396
Trade payables	1 971 ,	2 393 ,	2 397 ,
Liability of partnership in option acquire respect to	11	-	-
Other payables and Provisions	1 154 ,	1 666 ,	1 632 ,
Total liabilities Current	3 666 ,	4 718 ,	4 741 ,
liabilities Non - current
Bonds	2 852 ,	2 663 ,	2 413 ,
liabilities Lease	3 236 ,	3 612 ,	3 994 ,
Employee benefits Other liabilities & , net	242	319	393
Deferred taxes	118	138	155
Total liabilities non-current	6 448 ,	6 732 ,	6 955 ,
Equity	1 759 ,	2 943 ,	3 138 ,
Total liabilities and equity	11 873 ,	14 393 ,	14 834 ,

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