Magnit

Earnings Release • Jan 26, 2018

MAGNIT PJSC (MGNT)

26-Jan-2018 / 08:00 CET/CEST Dissemination of a RegulatoryAnnouncement 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.

Press Release Krasnodar January 26, 2018

PJSC"Magnit" Announces UnauditedFY2017 Results

Krasnodar, Russia (January 26, 2018): Magnit PJSC, one of Russia's leading retailers (MOEX and LSE: MGNT) announces its unaudited FY 2017 results prepared in accordance with IFRS [1] .

During 2017 Magnitadded (net) 2,291 stores. Thetotal store base as of December 31, 2017 reached 16,350 stores (12,125 convenience stores, 243 hypermarkets, 208 "Magnit Family" stores and 3,774 drogerie stores). Selling space increased by 13.56% in comparison to 2016 from5.07 million sq. m. to 5.75 million sq. m.

Revenueincreased by 6.37%from1,074.81 billionRURin 2016 to 1,143.29 billionRURin 2017.

Gross Profit increased from295.76 billionRURin 2016 to 304.71 billionRURin 2017. Gross Margin in 2017 was 26.65%.

EBITDAin 2017 was 91.78 billionRUR. EBITDAmargin in 2017 was 8.03%.

Net Incomein 2017 was 35.53 billionRUR. Net Income Margin in 2017 was 3.11%.

According to Rosstat, CPI for thelast 12M(January - December 2017) was 2.5%compared to 5.4%for thesame period in the previous year.

According to Rosstat, food inflation for the last 12M (January - December 2017) was 1.1% Y-o-Y vs 4.6% for the same period in the previous year.

Please Note: On December 20th, there was a serious glitch in a firmware update for the Shtrikh-M (Штрих-М) cash registers that Magnit uses at almost 11,000 stores across all four formats. In order to fix the affected cash registers, the firmware needed to be manually updated. This process took approximately 15 minutes percash register.

Between December 20th (Wednesday) and December 23rd (Saturday) almost 800 Magnit technical employees manually updated the firmware. Affected Shtrikh-M cash registers could not reopen until the firmware was fixed. As a result of the Shtrikh-M cash registers being closed for a part orallthis period, Magnit lostsales of approximately 1 billionRublesaccording to Company estimates.

4Q2017 Monthly Operating Highlights:

	October	Y-o-Y, %	November	Y-o-Y, %	December	Y-o-Y, %
NewStore Openings (NET)	267	n/a	165	n/a	221	n/a
Convenience stores	180	n/a	80	n/a	122	n/a
Hypermarkets	1	n/a	1	n/a	5	n/a
Magnit Family	4	n/a	1	n/a	7	n/a
Drogerie Stores	82	n/a	83	n/a	87	n/a
Number of Stores (EOP)	15,964	n/a	16,129	n/a	16,350	n/a
Convenience stores	11,923	n/a	12,003	n/a	12,125	n/a
Hypermarkets	237	n/a	238	n/a	243	n/a
Magnit Family	200	n/a	201	n/a	208	n/a
Drogerie Stores	3,604	n/a	3,687	n/a	3,774	n/a
NewSelling Space, th. sq. m.	80.78	n/a	44.27	n/a	67.42	n/a
Convenience stores	54.56	n/a	25.24	n/a	36.94	n/a
Hypermarkets	4.13	n/a	2.02	n/a	9.11	n/a
Magnit Family	4.57	n/a	1.22	n/a	7.44	n/a
Drogerie Stores	17.53	n/a	15.79	n/a	13.93	n/a
Total Selling Space (EOP), th. sq. m.	5,643.26	15.97%	5,687.52	14.45%	5,754.94	13.56%
Convenience stores	3,895.88	16.43%	3,921.12	15.03%	3,958.06	14.65%
Hypermarkets	690.48	4.72%	692.50	4.47%	701.62	2.62%

Magnit Family	220.36	11.71%	221.58	9.52%	229.01	7.64%
Drogerie Stores	836.53	26.06%	852.32	22.61%	866.25	20.51%
Number of Customers, million	338.94	5.85%	337.96	10.54%	375.08	10.07%
Convenience stores	286.80	6.30%	286.74	11.30%	312.21	10.76%
Hypermarkets	20.16	(2.81%)	19.68	(0.61%)	24.17	2.85%
Magnit Family	11.10	4.71%	10.88	7.25%	12.85	8.38%
Drogerie Stores	20.88	9.57%	20.66	13.85%	25.85	9.86%
[2] Retail Sales , million RUR	91,253.95	4.53%	91,830.58	6.53%	116,109.35	6.56%
Convenience stores	68,681.34	5.86%	69,649.58	7.92%	83,988.60	7.65%
Hypermarkets	11,332.79	(5.63%)	11,061.92	(5.30%)	16,458.45	(1.47%)
Magnit Family	4,808.21	5.16%	4,746.07	6.35%	6,636.72	8.32%
Drogerie Stores	6,431.61	10.18%	6,373.01	15.52%	9,025.58	11.23%
[3] 2 Retail Sales , million USD	1,580.69	13.49%	1,558.53	16.38%	1,981.77	13.12%
Convenience stores	1,189.69	14.93%	1,182.08	17.89%	1,433.53	14.29%
Hypermarkets	196.31	2.47%	187.74	3.45%	280.91	4.60%
Magnit Family	83.29	14.18%	80.55	16.18%	113.28	15.00%
Drogerie Stores	111.41	19.63%	108.16	26.19%	154.05	18.09%

4Q and 12M 2017 Operating Highlights:

	4Q2017	4Q2016	Y-o-Y, %	12M2017	12M2016	Y-o-Y, %
NewStore Openings (NET)	653	695	n/a	2,291	1,970	n/a
Convenience stores	382	383	n/a	1,604	927	n/a
Hypermarkets	7	9	n/a	6	18	n/a
Magnit Family	12	15	n/a	14	39	n/a
Drogerie Stores	252	288	n/a	667	986	n/a
Number of Stores (EOP)	16,350	14,059	n/a	16,350	14,059	n/a
Convenience stores	12,125	10,521	n/a	12,125	10,521	n/a
Hypermarkets	243	237	n/a	243	237	n/a
Magnit Family	208	194	n/a	208	194	n/a
Drogerie Stores	3,774	3 107	n/a	3,774	3,107	n/a
NewSelling Space, th. sq. m.	192.46	242.28	n/a	687.27	653.95	n/a
Convenience stores	116.74	132.60	n/a	505.66	332.84	n/a
Hypermarkets	15.27	24.30	n/a	17.94	44.53	n/a
Magnit Family	13.22	16.45	n/a	16.26	42.58	n/a
Drogerie Stores	47.24	68.93	n/a	147.41	234.00	n/a
Total Selling Space (EOP), th. sq. m.	5,754.94	5,067.67	13.56%	5,754.94	5,067.67	13.56%
Convenience stores	3,958.06	3,452.40	14.65%	3,958.06	3,452.40	14.65%
Hypermarkets	701.62	683.67	2.62%	701.62	683.67	2.62%
Magnit Family	229.01	212.76	7.64%	229.01	212.76	7.64%
Drogerie Stores	866.25	718.84	20.51%	866.25	718.84	20.51%
Number of Customers, million	1,051.98	966.69	8.82%	4,040.50	3,817.13	5.85%
Convenience stores	885.75	809.30	9.45%	3,403.63	3,220.10	5.70%
Hypermarkets	64.01	64.05	(0.07%)	249.29	262.10	(4.89%)
Magnit Family	34.83	32.60	6.83%	133.99	127.00	5.50%
Drogerie Stores	67.39	60.74	10.95%	253.59	207.93	21.96%

LFLResults

	[4] 4Q2017 - 4Q2016
Formats	# ofStores	Average Ticket	Traffic	Sales
Convenience Stores	9,436	(1.78%)	(1.99%)	(3.73%)

Hypermarkets	222	(4.20%)	(2.80%)	(6.88%)
Magnit Family	169	(1.44%)	(2.84%)	(4.24%)
Drogerie	2,830	2.24%	(4.98%)	(2.85%)
Total	12,657	(1.95%)	(2.27%)	(4.17%)

	4 12M 2017 - 12M 2016
Formats	# ofStores	Average Ticket	Traffic	Sales
Convenience Stores	7,848	1.23%	(2.63%)	(1.42%)
Hypermarkets	221	(2.53%)	(7.91%)	(10.24%)
Magnit Family	165	(1.21%)	(6.70%)	(7.82%)
Drogerie	2,711	1.17%	(1.14%)	0.02%
Total	10,945	(0.21%)	(3.17%)	(3.37%)

4Q and FY 2017 Key Financial Results, million RUR

	4Q2017	4Q2016	Growth Rate	FY2017	FY2016	Growth Rate
Net Sales	302,304.97	284,674.68	6.19%	1,143,290.40	1,074,811.55	6.37%
Convenience stores	222,319.51	207,440.08	7.17%	846,112.98	790,157.07	7.08%
Hypermarkets	38,853.16	40,394.25	(3.82%)	146,435.21	157,688.53	(7.14%)
Magnit Family	16,191.01	15,161.85	6.79%	59,779.10	56,910.82	5.04%
Drogerie Stores	21,830.20	19,468.53	12.13%	78,785.81	64,449.43	22.24%
Wholesale	3,111.09	2,209.97	40.78%	12,177.30	5,605.71	117.23%
Gross Profit	76,839.74	78,327.86	(1.90%)	304,712.21	295,759.01	3.03%
GrossMargin, %	25.42%	27.51%	n/a	26.65%	27.52%	n/a
EBITDAR	33,976.01	37,822.97	(10.17%)	137,079.94	146,264.42	(6.28%)
EBITDAR Margin, %	11.24%	13.29%	n/a	11.99%	13.61%	n/a
EBITDA	22,324.89	27,539.16	(18.93%)	91,775.69	107,793.02	(14.86%)
EBITDAMargin, %	7.38%	9.67%	n/a	8.03%	10.03%	n/a
EBIT	13,518.38	20,638.86	(34.50%)	58,073.50	81,967.38	(29.15%)
EBIT Margin, %	4.47%	7.25%	n/a	5.08%	7.63%	n/a
Net Income	7,859.05	13,485.38	(41.72%)	35,530.64	54,408.99	(34.70%)
Net Income Margin, %	2.60%	4.74%	n/a	3.11%	5.06%	n/a

4QandFY2017 Key Financial Results, USD million [5]

	4Q2017	4Q2016	Growth Rate	FY2017	FY2016	Growth Rate
Netsales	5,175.75	4,513.73	14.67%	19,592.69	16,033.61	22.20%
Convenience stores	3,806.32	3,289.12	15.72%	14,499.93	11,787.25	23.01%
Hypermarkets	665.20	640.48	3.86%	2,509.48	2,352.34	6.68%
Magnit Family	277.21	240.40	15.31%	1,024.44	848.97	20.67%
Drogerie Stores	373.75	308.69	21.08%	1,350.16	961.43	40.43%
Wholesale	53.26	35.04	52.01%	208.68	83.62	149.56%
Gross Profit	1,315.57	1,241.95	5.93%	5,221.89	4,412.02	18.36%
GrossMargin, %	25.42%	27.51%	n/a	26.65%	27.52%	n/a
EBITDAR	581.70	599.71	(3.00%)	2,349.15	2,181.91	7.66%
EBITDAR Margin, %	11.24%	13.29%	n/a	11.99%	13.61%	n/a
EBITDA	382.22	436.65	(12.47%)	1,572.77	1,608.01	(2.19%)

EBITDAMargin, %	7.38%	9.67%	n/a	8.03%	10.03%	n/a
EBIT	231.45	327.25	(29.27)%	995.21	1,222.76	(18.61)%
EBIT Margin, %	4.47%	7.25%	n/a	5.08%	7.63%	n/a
Net Income	134.55	213.82	(37.07%)	608.89	811.65	(24.98%)
Net Income Margin, %	2.60%	4.74%	n/a	3.11%	5.06%	n/a

Notes:

1) Net revenue in USDterms is calculated using the average exchange rate for the period.

2) This announcement contains inside information which is disclosed in accordance with the MarketAbuse Regulation which came into effect on 3 July 2016.

3) Please note that there may be small variations in calculation of totals, subtotals and/ or percentage change due to rounding of decimals.

Forfurtherinformation, please contact:

Timothy Post	Head ofInvestor Relations Email: post@magnit.ru Office:+7-861-277-4554 x 17600
Dina Svishcheva	DeputyDirector, Investor Relations Email:Chistyak@magnit.ru Office:+7-861-277-4554 x 15101
MediaInquiries	Media Relations Department press@magnit.ru

Company description:

Public Joint Stock Company "Magnit"is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city ofKrasnodar. As ofDecember 31, 2017, Magnit operated 37 distribution centersand 16,350 stores (12,125 convenience, 243 hypermarkets, 208 Magnit Family storesand 3,774 drogeriestores) in 2,709 citiesand towns throughout 7 federalregions ofthe Russian Federation.

In accordance with the unaudited IFRS management accounts for 2017, Magnit had revenues of RUB 1,143 billion and an EBITDA of RUB 92 billion. Magnit's localshares are traded on the Moscow Exchange (MOEX:MGNT) and its GDRs on the London Stock Exchange (LSE:MGNT) and it hasacredit rating fromStandard &Poor's ofBB. Measured bymarketcapitalization, Magnit is one of thelargest retailers inEurope.

[1] Based onmanagementaccounts

[2] Excluding wholesale

[3] Based on the average exchange rate for October 2017 - 57.7305 RUBper 1USD, November 2017 - 58.9212 RUBper 1USD, December 2017 - 58.5888 RUBper 1USD [4] LFLcalculation base includes stores (all formats), which have been opened 12months prior to the last month of th e reporting period. i.e. by December 1, 2016. [5] Based on the average exchange rate for 4Q2017 - 58.4080 RUBper 1USD, 4Q2016 - 63.0685 RUBper 1USD, FY2017 - 58.3529 RUBper 1USD, FY2016 - 67.0349 RUBper 1USD

ISIN: US55953Q2021 Category Code: MSCU TIDM: MGNT LEICode: 2534009KKPTVL99W2Y12 OAM Categories:2.2. Inside information Sequence No.: 5138

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