Magnit

Earnings Release • Oct 28, 2021

National Storage Mechanism | Additional information

MAGNIT PJSC (MGNT)

Magnit reports 27.7% total sales growth (13.0% adjusted for Dixy acquisition), 8.6% LFL sales growth and 7.2% EBITDA margin in 3Q 2021

28-Oct-2021 / 09:59 MSK

Dissemination of a Regulatory Announcement 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.

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Magnit Reports 27.7% total sales growth (13.0% adjusted for dixy acquisition), 8.6% LFL Sales Growth and 7.2% EBITDA margin in 3Q 2021

Krasnodar, Russia (October 28, 2021): Magnit PJSC (MOEX and LSE: MGNT; Magnit, the Company), one of Russia's leading retailers, announces its 3Q and 9M 2021 operational and unaudited financial results.

27.7% TOTAL REVENUE growth	3Q 2021 Key Operational and Financial Highlights - Total revenue increased by 27.7% y-o-y to RUB 489.3 billion. Total revenue adjusted for the Dixy acquisition increased by 13.0%; - Net retail sales reached RUB 475.5 billion increasing 28.2% y-o-y. Net retail sales growth adjusted for the Dixy acquisition was 13.8%; - LFL[1] sales growth of 8.6% driven by 8.3% average ticket growth and 0.3% traffic growth;
8.6% lfl sales growth	- The Company opened 535 stores on gross basis (336 Magnit convenience stores, 194 drogeries and 5 Dixy convenience stores). As part of the Company's ongoing efficiency improvement campaign, 41 stores were closed resulting in a net store addition of 494. On top of the organic expansion Magnit consolidated 2,477 stores under the Dixy brand. As of September 30, 2021 the total store base was 25,315; - Selling space increase of 176 thousand sq. m., including selling space of the stores under the Dixy brand, bringing total selling space to 8,723 thousand sq. m. (18.4% y-o-y growth); - The Company redesigned 145 stores (113 convenience stores, 22 supermarkets and 10 drogeries). As at September 30, 2021, 75% of convenience stores, 39% of supermarkets and 60% of drogeries are either new or refurbished; - Gross profit increased by 26.6% y-o-y to RUB 115.4 billion. Gross profit margin stood at 23.6%;
7.2% EBITDA margin	- EBITDA was RUB 35.0 billion with a 7.2% margin - an improvement q-o-q (flat y-o-y) after Dixy consolidation driven by sales density increase and lower SG&A costs; - Net income increased by 41.1% y-o-y to RUB 13.6 billion with a margin of 2.8% vs 2.5% a year ago.

« ### Jan Dunning Magnit's President and CEO »	"We are very pleased with Magnit's remarkable performance during the third quarter. We completed a unique strategic acquisition which dramatically changed our market positioning. Our initiatives, recognized by customers and supported by the favorable trading environment, resulted in strong net retail sales growth[2] of around 14% driven by LFL sales growth of almost 9%, driven again by mature stores. Net retail sales growth was accelerating month-to-month from 11% in July to 17% in September. Although the Dixy network requires additional attention and profitability improvement, first in-depth examination makes us confident that we can extract significant synergies in the medium-term. This allows us maintain our ambitious long-term targets. Furthermore, looking at the EBITDA margin in the third quarter of 7.2% after Dixy consolidation, we see further potential upside. We are making good progress not only in the brick-and-mortar part of the business. Our online sales channel is getting traction although first customer ordered food delivery from our store only 15 months ago. Already now we serve around 50 thousand orders a day having one of the widest coverages in the country and moving quick towards market leaders. During the Period we continued to strengthen our management team with excellent professionals to speed up retail and digital transformation. The progress is well evidenced by the results. And I strongly believe we can maintain this positive momentum to deliver further growth for all stakeholders."
141 hard discounters As of october 28, 2021	### Key events in 3Q 2021 and after the Reported Period - The new Board, consisting of 11 Directors, was elected at the EGM. The composition of the Board reflects great continuity, with seven out of 11 members serving on the Board for the last Board cycle; - Magnit started opening My Price hard discounters in the unique design. Total number of discounters as of October 28, 2021 reached 141; - Yuri Misnik has been appointed to the position of the Chief Digital and Technology Officer; - Magnit launched e-pharmacy in regions and partnership with Uteka marketplace; - Magnit fulfilled 50,000 online orders on the peak day of September; - Magnit and Largest FMCG Companies signed the Code of Commitments under 'United for a Healthier Future' Initiative.

Consolidation of the Dixy business and changes to the reporting standards

Magnit completed acquisition of the Dixy retail business, with results since July 22, 2021 being consolidated into Magnit's performance. Sales and operating results of the stores under the Dixy brand are reported separately, and growth metrics will be published starting from 3Q 2022. Dixy stores are not included in the LFL panel; this will begin after full 12 months of operations following consolidation. The Dixy retail business does not form a separate segment - Magnit will continue reporting consolidated financial results for the Group.

Starting from the reported quarter, the Company moves to disclose the detailed sales and operating results of its e-commerce business, including GMV (incl. VAT), average ticket, number of orders per day, etc.

3Q and 9M 2021 Operating Results

Retail Sales

	3Q 2021	3Q 2020	Change	Change, %	9M 2021	9M 2020	Change	Change, %
Total Net Retail Sales, million RUB	475,452	370,952	104,500	28.2%	1,277,044	1,114,910	162,134	14.5%
Magnit	422,143	370,952	51,191	13.8%	1,223,735	1,114,910	108,825	9.8%
Convenience Stores[3]	329,563	284,552	45,011	15.8%	953,981	860,142	93,838	10.9%
Supermarkets[4]	50,559	48,663	1,896	3.9%	152,187	149,618	2,569	1.7%
Drogerie Stores	39,646	34,993	4,653	13.3%	109,898	97,275	12,623	13.0%
Other Formats[5]	2,375	2,744	-369	-13.4%	7,670	7,876	-206	-2.6%
DIXY	53,309	n/a	n/a	n/a	53,309	n/a	n/a	n/a
Convenience Stores	50,495	n/a	n/a	n/a	50,495	n/a	n/a	n/a
Supermarkets[6]	2,813	n/a	n/a	n/a	2,813	n/a	n/a	n/a
Number of Tickets, mln	1,410	1,200	211	17.6%	3,756	3,486	270	7.7%
Magnit	1,258	1,200	58	4.9%	3,603	3,486	117	3.4%
Convenience Stores	1,060	1,006	54	5.3%	3,033	2,928	106	3.6%
Supermarkets	84	86	-2	-2.2%	248	254	-5	-2.1%
Drogerie Stores	108	99	9	8.7%	301	281	20	7.3%
Other Formats	6	8	-2	-24.8%	21	24	-4	-14.6%
DIXY	153	n/a	n/a	n/a	153	n/a	n/a	n/a
Convenience Stores	148	n/a	n/a	n/a	148	n/a	n/a	n/a
Supermarkets	5	n/a	n/a	n/a	5	n/a	n/a	n/a
Average Ticket[7], RUB	337	309	28	9.0%	340	320	20	6.3%
Magnit	336	309	26	8.5%	340	320	20	6.2%
Convenience Stores	311	283	28	10.0%	314	294	21	7.0%
Supermarkets	602	566	35	6.2%	613	590	23	3.9%
Drogerie Stores	367	353	15	4.2%	365	347	18	5.3%
Other Formats	374	325	50	15.3%	362	318	44	13.8%
DIXY	349	n/a	n/a	n/a	349	n/a	n/a	n/a
Convenience Stores	341	n/a	n/a	n/a	341	n/a	n/a	n/a
Supermarkets	621	n/a	n/a	n/a	621	n/a	n/a	n/a

Stores and Selling Space

	3Q 2021	3Q 2020	Change	Change, %	9M 2021	9M 2020	Change	Change, %
Number of Stores (EOP)	25,315	21,154	4,161	19.7%	25,315	21,154	4,161	19.7%
Magnit	22,838	21,154	1,684	8.0%	22,838	21,154	1,684	8.0%
Convenience Stores	15,657	14,699	958	6.5%	15,657	14,699	958	6.5%
Supermarkets	467	469	-2	-0.4%	467	469	-2	-0.4%
Drogerie Stores	6,714	5,986	728	12.2%	6,714	5,986	728	12.2%
DIXY	2,477	n/a	n/a	n/a	2,477	n/a	n/a	n/a
Convenience Stores	2,438	n/a	n/a	n/a	2,438	n/a	n/a	n/a
Supermarkets	39	n/a	n/a	n/a	39	n/a	n/a	n/a
Store Openings (Net)	494	260	234	90.0%	1,274	429	845	197.0%
Magnit	494	260	234	90.0%	1,274	429	845	197.0%
Convenience Stores	309	118	191	161.9%	746	77	669	868.8%
Supermarkets	-2	-3	1	-33.3%	-3	-4	1	-25.0%
Drogerie Stores	187	145	42	29.0%	531	356	175	49.2%
DIXY	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Convenience Stores	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Supermarkets	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Total Selling Space (EOP), th. sq.m	8,723	7,371	1,353	18.4%	8,723	7,371	1,353	18.4%
Magnit	7,924	7,371	553	7.5%	7,924	7,371	553	7.5%
Convenience Stores	5,410	5,005	405	8.1%	5,410	5,005	405	8.1%
Supermarkets	941	940	1	0.1%	941	940	1	0.1%
Drogerie Stores	1,546	1,384	162	11.7%	1,546	1,384	162	11.7%
Other formats	28	42	-14	-33.3%	28	42	-14	-33.3%
DIXY	799	n/a	n/a	n/a	799	n/a	n/a	n/a
Convenience Stores	725	n/a	n/a	n/a	725	n/a	n/a	n/a
Supermarkets	75	n/a	n/a	n/a	75	n/a	n/a	n/a
Selling Space Addition (Net), th. sq.m	176	80	96	n/a	427	132	295	n/a
Magnit	176	80	95	n/a	427	132	295	n/a
Convenience Stores	134	49	85	n/a	320	53	267	n/a
Supermarkets	-2	-3	2	n/a	0	-8	8	n/a
Drogerie Stores	45	34	11	n/a	117	81	36	n/a
Other formats	-2	1	-3	n/a	-10	6	-16	n/a
DIXY	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Convenience Stores	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Supermarkets	0	n/a	n/a	n/a	0	n/a	n/a	n/a

3Q and 9M 2021 LFL Results[8]

	3Q 2021			9M 2021
	Average Ticket	Traffic	Sales	Average Ticket	Traffic	Sales
Total (Magnit excl. Dixy)	8.3%	0.3%	8.6%	5.9%	0.1%	6.0%
Convenience Stores	9.5%	0.6%	10.2%	6.6%	0.3%	6.9%
Supermarkets	5.9%	-2.5%	3.2%	3.6%	-2.1%	1.5%
Drogerie Stores	3.7%	-0.4%	3.2%	4.8%	-0.5%	4.3%

4.7% LTM sales density[9] improvement y-o-y	### Trading Performance Total sales in 3Q 2021 grew by 27.7% y-o-y to RUB 489.3 billion. Net retail sales grew by 28.2% y-o-y, driven by a combination of 18.4% selling space growth and 8.6% LFL sales growth. Net retail sales achieved by the stores under the Magnit brand accelerated to 13.8% from 9.1% in 2Q 2021 driven by LFL sales growth in the mature outlets. Net retail sales growth continued to outpace selling space growth on further improvement of sales densities. Overall sales densities in 3Q 2021 (excluding stores under the Dixy brand) improved by 1.6% q-o-q and 4.7% y-o-y while across the Company's main convenience store format these improved by 1.9% q-o-q and 6.0% y-o-y. Within the reported quarter, net retail sales growth of Magnit business demonstrated gradual month-by-month acceleration from 10.7% in July to 17.2% in September. Selling space growth increased from 6.3% in the previous quarter to 18.4% in the reported quarter, driven by organic expansion and the Dixy acquisition (2,477 stores added in 3Q 2021). Selling space growth adjusted for the Dixy acquisition accelerated on the previous quarter to 7.5%, reflecting a record high number of store openings per quarter since 4Q 2019.
92% of selling space is already matured	LFL sales growth accelerated from 5.2% in the previous quarter to 8.6% in 3Q 2021 predominantly driven by the strong performance of mature stores which demonstrated high single-digit to double-digit y-o-y growth. 272 stores entered LFL comparison in 3Q (including 126 convenience stores and 148 drogeries). Only 8% of Magnit's selling space is currently in the 'ramp-up' phase with 92% already mature. Performance of LFL stores was strong across all the regions with Moscow and Central demonstrating the first-rate results in the double-digit zone. In the reported quarter LFL average ticket growth was 8.3%, and formed the main driver of the LFL sales growth in 3Q 2021. Solid LFL average ticket performance was supported by ongoing operational improvements, the acceleration of inflation and one-off state payments to various social groups. LFL traffic growth remained positive and stood at 0.3% reflecting normalized comparison base. LFL traffic growth was driven by both the inflow of new unique customers and visit frequency. Magnit continued gaining customers from traditional retail and other market players. Acceleration of revenue and LFL sales growth versus the previous quarter was delivered despite promotional share as a % of sales remaining flat both q-o-q and y-o-y. This was due to efficient seasonal promotional campaigns supported by favorable weather conditions and strong domestic tourist season.
55 mln of loyalty program cardholders	During the reported quarter the number of loyalty program cardholders reached 54.5 million. Company-wide, the proportion of tickets using the loyalty card was 51% with sales penetration of 65%. The loyalty program continues to deliver positive cross-format gains - 40% of Magnit's customer base at the end of the reporting period visit 2+ store formats (1.2% growth y-o-y). Average ticket of the active user is by 1.8x higher vs transaction without loyalty card.

10.2% LFL sales growth in Magnit convenience in 3Q 2021	### Store Network Development and Performance by Format The convenience segment within the Magnit brand generated 69.3% of total net retail sales in the reported quarter. In 3Q 2021 Magnit accelerated its expansion program both q-o-q and y-o-y and opened (gross) 336 convenience stores (187 in 3Q 2020). The Company continued its efficiency campaign and closed 27 convenience stores compared with 69 store closures in 3Q 2020. Magnit added 309 convenience stores (net) during the reported quarter. The selling space growth of convenience stores picked up to 8.1% y-o-y, driving a 15.8% acceleration in sales in the convenience format - the strongest performance across all Magnit's store formats - driven by LFL sales growth of 10.2% and selling space growth of 8.1%. Both LFL sales components were positive - average ticket growth reached 9.5% while traffic growth was 0.6%.
46 magnit supermarkets redesigned in 9M 2021	Magnit supermarkets generated 10.6% of the Group's net retail sales in the reported quarter. During 3Q 2021 the Company didn't open any supermarket, and closed two stores focusing on the refurbishment versus space addition. The Company's redesign program is gaining traction with 46 supermarkets being refurbished during 9M 2021 including 22 in 3Q 2021. The pace of redesign during the 4Q 2021 is expected to remain. Selling space across this format remained almost flat y-o-y, but the Company was able to deliver LFL sales growth of 3.2%, compared with 2.0% in the previous quarter. This was driven by 5.9% average ticket growth and 2.5% traffic decline As a result, net retail sales growth of supermarkets improved to 3.9% in the reported quarter.
11.7% y-o-y selling space increase in drogerie in 3Q 2021 11.2% share of the Dixy stores in the total net retail sales in 3Q 2021 5.2 RUB billion GMV in 9M 2021	The sales contribution of Magnit's drogerie format represented 8.3% of total net retail sales. During 3Q 2021 Magnit opened (net) 187 cosmetics stores and added 45,000 sq. m. of selling space, delivering a 11.7% y-o-y increase in selling space, the highest of all formats. Driven by this increase in selling space and LFL sales growth of 3.2%, sales grew 13.3%. LFL traffic growth was slightly negative at -0.4%, well compensated by 3.7% LFL average ticket growth. LFL trends in the cosmetics format reflect lower inflation on the non-food assortment, different mix of the articles on promotion and high comparison base. During 3Q 2021 Magnit continued its renovation program and redesigned 113 convenience stores, 22 supermarkets and 10 drogeries. This resulted in the combined share of refurbished and new stores at: 75% for convenience stores, 39% for supermarkets and 60% for the drogerie format. The share of the Dixy stores in the Group's total net retail sales reached 11.2% in the third quarter, being taken into account from the consolidation date of 22 July 2021. In the reported period five convenience stores were opened, while the same number of outlets have been closed, leading to unchanged number of stores and selling space. On pro-forma basis, Dixy network demonstrated mid-single digit LFL sales growth driven by mature stores. ### E-commerce Magnit has been piloting e-commerce services since the third quarter of 2020. The Company currently runs a number of online delivery projects, including own delivery and partnerships (express delivery, regular delivery, e-pharma, cosmetics and partnerships). Total e-commerce GMV (incl. VAT) in the reported period was RUB 2.9 billion, contributing more than half to the nine months e-commerce GMV of RUB 5.2 billion. During 3Q 2021, the average number of orders per day continued to grow to 32,600. On September 26th Magnit fulfilled over 50,000 orders. The average ticket across all online services was c. RUB 969 including VAT. This average ticket is approximately 2.7x higher than in the convenience stores (RUB 356 in 3Q 2021). This is mostly due to a larger number of items per basket. The average ticket within Magnit own delivery service was RUB 1,202. Magnit's e-commerce services today cover over 2,700 offline stores and 15 dark stores in 64 regions and 267 cities, with 66% of the current revenue generated outside Moscow and St. Petersburg. Within the three reported months the Group increased the number of cities covered by 2.5x. By the end of 2021, the Company plans to have over 4,000 stores across all formats covered by e-commerce services including Magnit's own delivery and partnerships.

	3Q 2021	3Q 2020	Change	Change, times/%	9M 2021	9M 2020	Change	Change, times/%
GMV, billion RUB	2.9	0.004	2.9	707x	5.2	0.004	5.2	1,268x
Number of orders per day (average)	32,600	77	32,523	423x	19,705	77	19,628	256x
Average ticket incl. VAT, RUB	969	900	69	7.7%	1,013	900	113	12.6%
Number of stores covered, EOP	2,700	130	2,570	21x	2,700	130	2,570	21x

Financial Results for 3Q and 9M 2021 (IAS 17)

RUB mln	3Q 2021	3Q 2020	Change	9M 2021	9M 2020	Change
Total Revenue	489,296	383,189	27.7%	1,311,526	1,146,550	14.4%
Retail	475,452	370,952	28.2%	1,277,044	1,114,910	14.5%
Wholesale	13,844	12,237	13.1%	34,483	31,640	9.0%
Gross Profit	115,412	91,180	26.6%	307,983	270,701	13.8%
Gross Margin, %	23.6%	23.8%	-21 bps	23.5%	23.6%	-13 bps
SG&A, % of Sales	-20.4%	-20.5%	9 bps	-20.4%	-20.5%	6 bps
EBITDA pre LTI[10]	34,999	27,891	25.5%	93,602	81,461	14.9%
EBITDA Margin pre LTI, %	7.2%	7.3%	-13 bps	7.1%	7.1%	3 bps
EBITDA	35,047	27,598	27.0%	92,976	80,819	15.0%
EBITDA Margin, %	7.2%	7.2%	-4 bps	7.1%	7.0%	4 bps
EBIT	21,304	16,841	26.5%	55,999	46,978	19.2%
EBIT Margin, %	4.4%	4.4%	-4 bps	4.3%	4.1%	17 bps
Net Finance Costs	-3,759	-3,368	11.6%	-9,130	-10,642	-14.2%
FX Gain/ (Loss)	8	-905	-100.9%	452	-1,730	-126.2%
Profit before Tax	17,553	12,567	39.7%	47,321	34,606	36.7%
Taxes	-3,977	-2,948	34.9%	-10,797	-7,942	35.9%
Net Income	13,576	9,620	41.1%	36,525	26,664	37.0%
Net Income Margin, %	2.8%	2.5%	26 bps	2.8%	2.3%	46 bps

For 3Q and 9M 2021 financial results in accordance with IFRS 16 - see Appendix
23.6% Gross margin in 3Q 2021 24 bps y-o-y reduction of shrinkage 7.2% ebitda margin in 3Q 2021 2.8% Net income margin in 3Q 2021	Total revenue in 3Q 2021 increased 27.7%. This growth was underpinned by net retail sales growth of 28.2% and wholesale revenue growth of 13.1%. Wholesale operations accounted for 2.8% of total sales. Gross Profit in 3Q 2021 increased by 26.6% y-o-y to RUB 115.4 billion. Gross margin decreased by 21 bps y-o-y to 23.6% as a result of consolidation of the Dixy business, which operates with a lower commercial margin. This was partially offset by better promotional margin, lower shrinkage, supply chain costs and a favorable format mix. Promotional intensity was broadly flat both y-o-y and q-o-q. On a q-o-q basis gross margin improved by 14 bps from 23.4% in 2Q 2021. Despite further increases to on-shelf availability, supply chain costs decreased by 7 bps y-o-y. This was due to higher DC productivity and utilization, which offset the negative impact of the increasing container shipping tariffs. Alongside the growing share of fresh products and overall improvement of on-shelf availability, shrinkage as a proportion of sales decreased further by 24 bps y-o-y. This was driven by the ongoing optimization of supply chain processes, renegotiation of quality standards with suppliers, and other positive initiatives. SG&A costs improved by 9 bps y-o-y to 20.4% as a percent of sales, driving positive operational leverage. This was achieved as a result of lower personnel costs, utilities, packaging and raw materials, all of which was partially offset by higher marketing and rent costs. Personnel costs as a percent of sales decreased by 64 bps, driven by operational leverage, continued productivity improvements, and ongoing automation of business processes. Advertising expenses increased by 33 bps y-o-y, on higher marketing activities, including digital marketing and loyalty campaigns. Rental costs as a percent of sales increased by 24 bps y-o-y driven by consolidation of Dixy stores predominantly located in the Moscow and Saint-Petersburg regions with higher rent rates. This increase was partially offset by higher sales density, improved lease terms with landlords and the closing of inefficient stores. The share of leased selling space increased to 79.6% in 3Q 2021 vs 77.6% a year ago. Utilities costs as a percent of sales decreased by 17 bps y-o-y. This fall was driven by operational leverage, good progress in several projects aimed at energy savings, and a switch to the wholesale energy tariffs. Packaging and raw materials as a percent of sales decreased by 10 bps y-o-y driven by the base effect of the previous year related to the write-off of the old-stock materials. Other costs as a percent of sales increased by 22 bps y-o-y driven mostly by higher information services. Depreciation, repair, maintenance, bank and tax expenses as a percent of sales remained broadly flat y-o-y. As a result, EBITDA was RUB 35.0 billion with a 7.2% margin, driven by lower SG&A costs. Whilst this remained flat on a y-o-y basis, it was an improvement from 7.1% in the previous quarter thanks to sales density hike, lower shrinkage and supply-chain cost, partly offset by negative effect from consolidation of Dixy business with lower profitability. EBITDA margin for the 9M 2021 was 7.1% with y-o-y improvement of 4 bps. Net finance costs in 3Q 2021 increased by 11.6% y-o-y to RUB 3.8 billion due to the higher total amount of borrowings and cost of debt. The Company increased its total debt by RUB 87.4 billion during the last twelve months, by means of long-term bank loans and bond issuance. These supported the Company's financing of accelerated expansion and the acquisition of the Dixy retail chain. This increase happened during the period of growing market rates. As a result, average cost of debt increased to 6.4% (27 bps y-o-y or 2 bps q-o-q). 99.9% of the Company's debt profile is represented by long-term borrowings and bonds with the average maturity of 21 months. Income tax in 3Q 2021 was RUB 4.0 billion. The effective tax rate stood at 22.7%. As a result, net income in 3Q 2021 increased by 41.1% y-o-y and stood at RUB 13.6 billion. Net income margin increased by 26 bps y-o-y to 2.8%. Net income for 9M 2021 grew by 37.0% with a margin improvement of 46 bps to 2.8%.

Financial Position Highlights (IFRS 16)

RUB mln	30.09.2021	31.12.2020	30.09.2020
Inventories	216,984	205,949	209,526
Trade and other receivables	14,815	8,564	13,038
Cash and cash equivalents	37,466	44,700	5,551
Long-term borrowings	215,731	147,695	150,733
Trade and other payables	200,858	184,325	143,618
Short-term borrowings and short-term portion of long-term borrowings	55,491	18,392	33,092

16.3 DAYS y-o-y optimisation of inventories[11]

Inventories increased by RUB 7.5 billion compared with September 30, 2020 and stood at RUB 217 billion on the back of total sales growth of 27.7%. Adjusted for the Dixy acquisition, inventories of the Magnit business reduced substantially. This was driven by a number of ongoing projects, including the reduction of slow-moving items, assortment harmonization and IT solutions that are aimed at better on-shelf availability and promotion forecasting. Trade and other payables grew by RUB 57.2 billion compared with September 30, 2020 and stood at RUB 200.9 billion, driven by higher sales and increased payment days. Accounts receivables increased by RUB 1.8 billion vs September 30, 2020 and stood at RUB 14.8 billion due to higher sales and improved commercial terms with suppliers.

Debt Composition and Leverage

	September 30, 2021	June 30, 2021	December 31, 2020	September 30, 2020
IAS 17
Total Debt, RUB billion	271.2	265.5	166.1	183.8
Long-Term Debt	215.7	222.9	147.7	150.7
Short-Term Debt	55.5	42.6	18.4	33.1
Net Debt, RUB billion	233.8	136.1	121.4	178.3
Net Debt/EBITDA	1.9x	1.2x	1.1х	1.8х
IFRS 16
Net Debt, RUB billion	682.9	498.9	479.0	533.0
Net Debt/EBITDA	3.5x	2.7x	2.7x	3.1

1.9x net debt/ebitda as of september 30, 2021 (IAS17)

As at September 30, 2021 Gross Debt stood at RUB 271.2 billion, remaining almost flat versus end of the previous quarter. The Company's cash position decreased to RUB 37.5 billion as at September 30, 2021 compared to RUB 129.4 billion as at June 30, 2021 upon settlement of the Dixy transaction. As a result, Net Debt increased by 71.7% q-o-q to RUB 233.8 billion as at September 30, 2021. The Company's debt is fully RUB denominated, matching its revenue structure. The Net Debt to EBITDA ratio was 1.9x as at September 30, 2021 vs 1.2x as at June 30, 2021. Leverage is expected to significantly reduce at the year-end. Capex in 3Q 2021 more than doubled y-o-y and stood at RUB 16.4 billion. This was driven by the acceleration of the Group's expansion program (535 store openings on gross basis in 3Q 2021 vs 349 in 3Q 2020). Total capital expenditures for the first nine months of 2021 stood at RUB 42.0 billion, compared with RUB 19.4 billion in 9M 2020 (up 2.2x y-o-y). Capex is expected to increase further in the fourth quarter of the year in line with the Group's store roll out and redesign process.

FY 2021 Guidance

2,000 stores on gross basis to be opened by magnit organically in 2021	Magnit confirms its full year store opening, redesign and capex guidance published on February 4th, 2021. In 2021 Magnit plans to open around 2,000 stores (gross) of various formats, as part of its organic expansion, and redesign about 700 stores. Capital expenditures is expected to be approximately RUB 60-65 billion in 2021, excluding the acquisition of the Dixy retail business.

Note:

1. This announcement contains inside information disclosed in accordance with the Market Abuse Regulation effective from July 3, 2016.
2. Please note that there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals.

	### For further information, please contact: Dina Chistyak Director for Investor Relations  dina_chistyak@magnit.ru Office: +7 (861) 210 9810 x 15101 Media Inquiries                    Twitter press@magnit.ru                    @MagnitIR

### Note to editors "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of September 30, 2021, Magnit operated 45 distribution centers and 25,315 stores in 3,840 cities and towns throughout 7 federal regions of the Russian Federation. In accordance with the unaudited IFRS 16 management accounts results for 9M 2021, Magnit had revenues of RUB 1,311.5 billion and an EBITDA of RUB 151.4 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.

### Forward-looking statements This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and/or store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.

APPENDIX

3Q and 9M 2021 Store Openings

	3Q 2021	3Q 2020	Change	Change, %	9M 2021	9M 2020	Change	Change, %
Store Openings (Gross)	535	349	186	53.3%	1,461	847	614	72.5%
Magnit	530	349	181	51.9%	1,456	847	609	71.9%
Convenience Stores	336	187	149	79.7%	885	426	459	107.7%
Supermarkets	0	1	-1	-100.0%	2	2	0	0.0%
Drogerie Stores	194	161	33	20.5%	569	419	150	35.8%
DIXY	5	n/a	n/a	n/a	5	n/a	n/a	n/a
Convenience Stores	5	n/a	n/a	n/a	5	n/a	n/a	n/a
Supermarkets	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Store Closures	41	89	-48	-53.9%	187	418	-231	-55.3%
Magnit	36	89	-53	-59.6%	182	418	-236	-56.5%
Convenience Stores	27	69	-42	-60.9%	139	349	-210	-60.2%
Supermarkets	2	4	-2	-50.0%	5	6	-1	-16.7%
Drogerie Stores	7	16	-9	-56.3%	38	63	-25	-39.7%
DIXY	5	n/a	n/a	n/a	5	n/a	n/a	n/a
Convenience Stores	5	n/a	n/a	n/a	5	n/a	n/a	n/a
Supermarkets	0	n/a	n/a	n/a	0	n/a	n/a	n/a
Store Openings (Net)	494	260	234	90.0%	1,274	429	845	197.0%
Magnit	494	260	234	90.0%	1,274	429	845	197.0%
Convenience Stores	309	118	191	161.9%	746	77	669	868.8%
Supermarkets	-2	-3	1	-33.3%	-3	-4	1	-25.0%
Drogerie Stores	187	145	42	29.0%	531	356	175	49.2%
DIXY	0	n/a	n/a	n/a	0	0	n/a	n/a
Convenience Stores	0	n/a	n/a	n/a	0	0	n/a	n/a
Supermarkets	0	n/a	n/a	n/a	0	0	n/a	n/a

3Q 2021 Monthly Sales

	July	Change	August	Change	September	Change
Total net retail sales, RUB million	152,955	16.6%	164,666	32.6%	157,831	36.6%
Magnit	145,174	10.7%	141,498	13.9%	135,471	17.2%
Convenience Stores	113,666	12.6%	110,166	16.1%	105,731	19.2%
Supermarkets	17,555	1.1%	16,976	2.8%	16,027	8.3%
Drogerie Stores	13,185	10.2%	13,606	14.3%	12,855	15.6%
Other formats	768	-13.3%	750	-17.1%	858	-10.1%
DIXY	7,781	n/a	23,168	n/a	22,359	n/a
Convenience Stores	7,365	n/a	21,945	n/a	21,186	n/a
Supermarkets	417	n/a	1,223	n/a	1,174	n/a

Financial Results for 3Q and 9M 2021 (IFRS 16)

RUB mln	3Q 2021	3Q 2020	Change	9M 2021	9M 2020	Change
Total Revenue	489,296	383,189	27.7%	1,311,526	1,146,550	14.4%
Retail	475,452	370,952	28.2%	1,277,044	1,114,910	14.5%
Wholesale	13,844	12,237	13.1%	34,483	31,640	9.0%
Gross Profit	115,444	91,180	26.6%	308,030	270,701	13.8%
Gross Margin, %	23.6%	23.8%	-20 bps	23.5%	23.6%	-12 bps
SG&A, % of Sales	-19.0%	-18.9%	-3 bps	-18.9%	-19.0%	9 bps
EBITDA pre LTI[12]	56,955	44,680	27.5%	151,993	132,874	14.4%
EBITDA Margin pre LTI, %	11.6%	11.7%	-2 bps	11.6%	11.6%	0 bps
EBITDA	57,004	44,388	28.4%	151,367	132,232	14.5%
EBITDA Margin, %	11.7%	11.6%	7 bps	11.5%	11.5%	1 bps
EBIT	28,775	23,080	24.7%	77,881	65,852	18.3%
EBIT Margin, %	5.9%	6.0%	-14 bps	5.9%	5.7%	19 bps
Net Finance Costs	-12,578	-10,765	16.8%	-33,180	-33,759	-1.7%
FX Gain/ (Loss)	9	-1,018	-100.9%	463	-1,938	-123.9%
Profit before Tax	16,206	11,297	43.5%	45,165	30,155	49.8%
Taxes	-3,698	-2,693	37.3%	-10,358	-7,052	46.9%
Net Income	12,508	8,603	45.4%	34,807	23,103	50.7%
Net Income Margin, %	2.6%	2.2%	31 bps	2.7%	2.0%	64 bps

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[1] LFL calculation base includes Magnit stores, which have been operating for 12 months since its first day of sales. LFL sales growth and average ticket growth are calculated based on sales turnover including VAT. Dixy stores will be added to the LFL panel after full 12 months of operations since consolidation

[2] Adjusted for the acquisition of the Dixy retail business

[3] Convenience Stores include convenience stores and small pilots such as Magnit City and My Price

[4] Supermarkets include Magnit Family supermarkets and Magnit Extra superstores

[5] Other Formats include pharmacies and stores located at Russian Post offices

[6] Supermarkets include Megamart and Minimart stores

[7] Excluding VAT

[8] Excluding Dixy stores. Dixy stores will be added to the LFL panel after full 12 months of operations after consolidation

[9] Net retail sales of the last four quarters divided by the average selling space at the end of the last five quarters (excluding Dixy)

[10] LTI - Long-Term Incentive Program

[11] Inventory turnover days = ((inventories as of 30.06.2021 + inventories as of 30.09.2021)/2/cost of goods sold for 3Q 2021) x 92

[12] LTI - Long-Term Incentive Program

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ISIN:	US55953Q2021
Category Code:	MSCU
TIDM:	MGNT
LEI Code:	2534009KKPTVL99W2Y12
OAM Categories:	2.2. Inside information
Sequence No.:	125383
EQS News ID:	1244201

End of Announcement	EQS News Service

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