Max Stock Ltd. — Investor Presentation 2021

Mar 15, 2021

Investors Presentation March 2021

Disclaimer:

This presentation, which includes oral statements made or videos shown at the presentation hereof, any question and answer session and any written or oral material discussed or distributed during the meeting to present this document or otherwise in connection with it (this "Presentation") is solely for the purpose of demonstration of information included in the annual financial statements of MAX Stock Ltd. ("MAX" or "the Company") as of December 31, 2020. This Presentation is not intended for distribution to, or use by any person or entity in, any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This Presentation only contains summary information and no representation or warranty, express or implied, is or will be made in relation to and no reliance should be placed on the fairness, accuracy, correctness or completeness of the information or opinions contained in this Presentation. The presentation only contains summary information, and does not replace the full disclosure contained in the 2020 annual report of the Company. This Presentation contains forward-looking statements, which are based on current expectations, projections and assumptions about future events and may differ materially from actual results due to variety of factors including, but not limited to: change in the overall economy; the duration and severity of the COVID-19 (coronavirus) pandemic and its impact on MAX and on local and global economy and MAX's ability to manage and develop its business. Statements contained in the Presentation, other than statements of historical fact, regarding future events or prospects, are forward-looking statements. These forward-looking statements can be identified by the use of words such as "aim," "anticipate," "believe," "continues," "could," "estimate," "expect," "intend," "goal," "may," "plan," "project," "projections," "should," "will" and other words that convey uncertainty of future events or outcome. Statements that MAX makes in this Presentation that are not statements of historical fact also may be forward-looking statements. Forward-looking statements are not guarantees of future performance, and involve risks, uncertainties, and assumptions that may cause our actual results to differ materially from the expectations that MAX describes in its forward-looking statements. There may be events in the future that MAX is not accurately able to predict, or over which MAX has no control. You should not place undue reliance on forward-looking statements. Although MAX may elect to update forward-looking statements in the future, MAX disclaims any obligation to do so, even if MAX's assumptions and projections change, except where applicable law may otherwise require MAX to do so. These forward-looking statements should not be relied upon as representing MAX's views as of any date subsequent to the date of this Presentation. This Presentation does not constitute and is not intended to form part of any offer, or the solicitation of any offer, to buy, subscribe for or sell any securities in MAX or any subsidiary of MAX and nothing in this Presentation shall in any way constitute or form part of any legal agreement or be relied on in connection with, any contract, commitment or investment decision. Each recipient of the information contained in this Presentation is responsible for making its own independent assessment of the business, financial condition, prospects, status and affairs of MAX. No person shall have any right of action against MAX or any other person in relation to the accuracy or completeness of the information contained in the Presentation. This Presentation and the information contained herein are not a solicitation of an offer to buy securities or an offer for the sale of securities in Israel, in the United States or in any other jurisdiction (within the meaning of Regulation S under the Securities Act). MAX has not and does not expect to register any securities that it may offer under the Securities Act, or the securities laws of any state of the United States or any other jurisdiction thereof, and any such securities may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from registration.

Nothing in this Presentation constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financialsituation or particular needs of any specific recipient.

By attending this Presentation and/or receiving this document, you are agreeing to the terms and conditionsset forth above.

This presentation includes certain financial measures not presented in accordance with International Financial Reporting Standards ("IFRS"), including Adjusted EBITDA. These financial measures are not measures of financial performance in accordance with IFRS and may exclude items that are significant in understanding and assessing the Company's financial results. Therefore, these measures should not be considered in isolation or as an alternative to net loss or other measures of profitability, liquidity or performance under IFRS. You should be aware that the Company's presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently. See the appendix for a reconciliation of certain of these non-IFRSmeasuresto the most directly comparable IFRS measure.

The Value Leader of Israeli Retail

Company Overview

• A leading extreme value retailer of everyday essential items in Israel.
  • ─ Up to 50% lower prices than conventional retailers.
• Broad selection of merchandise across six major categories.
  • ─ Known for exciting entry aisle of constantly rotating seasonal favorites.
• Operate 50 stores(1) across all market segments via dual format strategy
  • ─ Max: Large format (average ~1,800 SqM / ~19,500 SqFt(2) ) mostly company operated store in suburban markets.
  • ─ Max 20: Smaller format (average ~200 SqM / ~2,150 SqFt) mostly franchised store in city centers; all products priced under NIS 20 (~\$6).
• "Partner" manager model drives superior store level execution.
• Attractive new store model supports compelling whitespace opportunity with ability to more than double store count in Israel(3)
• Deep and developed management team with collaborative culture.

Broad Selection of Quality Products(4)

4) Product mix representative of January- December 2020 figures.

5) Other comprised of over 25 subcategories with the largest being OTC Pharmaceutical, Candy, Tools/Hardware, Electronics, Winter Goods, Phone Accessories and Outdoors.

³

¹⁾ Operates 50 stores as of December 31, 2020. 2) Represents company owned stores.

³⁾ Whitespace study per Geocartography Group and Company estimates.

Our Mission is to Help Customers "Dream Big, Pay Small" for Everyday Essentials

Q4 2020 Situation

• At the end of Q3, the Israeli government imposed restrictions that included a second lockdown. The lockdown was in effect September 18th until October 11th
• Limitations on commerce were in place for all retailers until November 7th, and on November 8th commerce was partially reopened (including shops with street access and open air malls up to 20 stores).
• On December 8th, all commerce was opened (under certain restrictions), including Malls, open markets etc.
• However, due to increased morbidity, on December 27th all commerce was closed again and a third lockdown began.
• During the fourth quarter, the Company's stores were open with no restrictions up until December 27th when the third lockdown started. At that time, the stores were limited to selling essential items only

Q1 2021 Situation

• On 21st of February the Israeli economy began to re-open and the company's stores returned to normal operations.
• Based Israeli Ministry of Health data, total of 5.2 million people in Israel out of the 16 years and older population of ~6.3 million received the first vaccinations, and 4.2 million received the second one. In addition, about 790k recovered from COVID-19

(1) Stores were closed during part of March and April 2020 due to government Covid-related restrictions.

(2) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses - the impact of IFRS 16 + Share-based payment; see appendix for a reconciliation.

Q4 2020 Vs Q4 2019

• Total revenue growth: 54%
• Same store sales growth: 43%
• Gross profit growth: 47%
• Adjusted EBITDA(2) growth (pre IFRS16): 108%
• Adjusted EPS growth(3) : 89%

2020 Vs 2019

(3) See Adjusted EPS reconciliation in appendix.

• Total revenue growth: 36% (19% excluding onetime bulk operation)
• Same store sales growth: 11% (24%(1) excluding period that the stores were closed)
• Gross profit growth: 22% (17% excluding onetime bulk operation)
• Adjusted EBITDA(2) growth (pre IFRS16): 56% (42% excluding onetime bulk operation)
• Adjusted EPS growth(3) : 40.5%
• 3 stores opened in 2020
• Converted 1 store from company owned to a franchise model

⁽¹⁾ Stores were closed during part of March and April 2020 due to government Covid-related restrictions.

⁽²⁾ Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses - the impact of IFRS 16 + Share-based payment; see appendix for a reconciliation.

Q4 2020 Financial Summary

(NIS / USD Millions)

• Total revenue growth of 54% in Q4 2020 vs. Q4 2019 driven by same store sales growth and new store openings
• Comparable store sales increased 43% in Q4 2020 driven by a larger basket size
• Adjusted EBITDA and Adjusted EPS in Q4 2020 grew by 108% and 89%, respectively, vs.Q4 2019 driven by revenue growth and operating leverage

Strong Q4 2020 Financial Performance

• Note: Financials presented on a post-IFRS 16 basis; see appendix for a reconciliation to post-IFRS 16. Israeli Shekels converted to U.S. Dollars by the average exchange rate: 10-12/2019 0.29 10-12/2020 0.3.
• (1) 2020 margins exclude impact of Share-based payment.
• (2) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses the impact of IFRS 16 + Share-based payment; see appendix for a reconciliation.

Revenue Bridge Q4 Multiple drivers of growth

Adjusted EBITDA Bridge Q4 Multiple driver of growth (Pre IFRS16)

Q4-2020 Vs Q4-2019

Summary P&L Q4-2020

	Q4-2020 vs Q4-2019
	Q4-2019	Q4-2020	% Change
Revenue from sales	177,796	273,973	54.1%
Revenue from commissions / fees	1,546	2,111	36.5%
Total revenue	179,342	276,084	53.9%
Gross profit	71,482	105,226	47.2%
% of Sales	39.8%	38.1%
SG&A % of Sales	50,116 27.9%	65,702 23.8%	31.1%
Other income	-264	-126
Other expenses	308	199
EBIT	21,322	39,451	85%
% of Sales	11.9%	14.3%
Interest expenses, net	2,461	7,545	206.6%
EBT	18,861	31,906	69.2%
Taxes	3,946	8,429	113.6%
Net Income	14,915	23,477	57.4%
% of Sales	8.3%	8.5%
Net income attributable to shareholders	12,411	19,457	56.8%
Net income attributable to non-controlling interests	2,504	4,020	60.5%
EPS	0.09	0.14	55.6%
Adjusted EPS(2) (diluted)	0.086	0.164	89%
EBITDA Post IFRS 16	31,575	53,167	68.4%
% of Sales	17.6%	19.3%
Adjusted EBITDA(1,2)	20,632	4 ,	108%
% of Sales	11.5%	15.5%

(1) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses - the impact of IFRS 16 + Share-based payment; see appendix for a reconciliation.

(2) See Adjusted EPS and Adjusted EBITDA reconciliation in appendix.

Full Year 2020 Financial Summary

(NIS / USD Millions)

• Due to COVID-19, on March 15th, 2020, the Israeli government began to restrict travel and retail operations, resulting in business disruptions and store closures for Max until May 1st , 2020 and to a lesser extent in the last few days of 2020
• Despite temporary store closures due to COVID-19, Max saw 36% year-over-year sales growth in 2020 including sales of COVID-19 related goods to businesses and government entities. These bulk operations were one time in nature.
• Comparable store sales increased 11% in 2020 driven by growth in volume activity (24% excluding the period during which stores were closed due to government restrictions).
• Despite store closures in March and April and restrictions at the end of December, and excluding one-time COVID-19 related goods sales, Max grew Adjusted EBITDA and Adjusted EPS in 2020 by 56% and 40.5%,

Strong 2020 Financial Performance Despite Store Closures for ~1.5 months

• Note: Financials presented on a post-IFRS 16 basis; see appendix for a reconciliation to post-IFRS 16. Israeli Shekels converted to U.S. Dollars by the average exchange rate: 2020 0.29,. 2019 0.28
• (1) 2020 margins exclude impact of sales from personal protection equipment and Share-based payment.
• (2) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses the impact of IFRS 16 + Share-based payment.
• (3) See Adjusted EPS and Adjusted EBITDA reconciliation in appendix.

Revenue Bridge Full Year 2020 Multiple drivers of growth

Adjusted EBITDA Bridge Full Year 2020 Multiple driver of growth (Pre IFRS16)

Summary P&L 2020

		2020 vs
			% Change
Revenue from sales	735,582	879,214	19.5%
Revenue from commissions / fees	5,968	6,481	8.6%
Revenue from onetime bulk operation	-	124,800
Total revenue	741,550	1,010,495	36.3%
Gross profit (Excluding onetime bulk operation)	293,547	344,589	17.4%
% of Sales	39.6%	34.1%
Gross profit onetime bulk operation	-	14,344	100%
% of Sales		11.5%
SG&A	191,249	203,949	6.6%
% of Sales	25.8%	20.1%
Other income	-733	-1,224
Other expenses	1,499	5,479
EBIT	,53	5 ,7	48.5%
% of Sales	3.7%	4. %
Interest expenses, net	10,397	19,282	85.5%
Interest expenses onetime bulk operation	-	13,276
EBT	, 35	8, 7	.7%
Taxes	20,861	30,542	46.4%
Net Income	7 , 74	87,6	4.7%
% of Sales	9.5%	8.7%
Net income attributable to shareholders	58,614	72,615	24%
Net income attributable to non-controlling interests	11,382	14,982	32%
EPS	0.41	0.51	24%
Adjusted EPS(2) (diluted)	.4	.59	40.5%
EBITDA Post IFRS 16	4 , 8	,33	4 . %
% of Sales	19.0%	19.8%
Adjusted EBITDA (1,2)	,5 7	56, 6	56. %
% of Sales	13.6%	15.5%

(1) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses - the impact of IFRS 16 + Share-based payment; see appendix for a reconciliation. (2) See Adjusted EPS and Adjusted EBITDA reconciliation in appendix.

Historical Financial Performance

Adjusted EBITDA(6)

Represents onetime bulk operation of PPE.

Note: Financials presented are on a pre-IFRS 16 basis; see appendix for a reconciliation to post-IFRS 16. Comparable store sales figures reflective of company-owned stores. Israeli Shekels converted to U.S. Dollars by the average exchange rate: 2020 – 0.29. 4) 2020 margins exclude the impact of sales from personal protection equipment.

1) 2019 "Max" store decline due to conversion of two stores to a "Max 20" format; Max has never closed a company-owned store. 2) Operates 50 stores as of December 31, 2020.

3) Company saw increased margin pressure from rapid company expansion

reconciliation.

15 5) 11% represents actual 2020 comparable store sales for the entire year while 24% represents comparable store sales excluding days when the stores were closed due to Covid-19 restrictions 6) Adjusted EBITDA defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses - the impact of IFRS 16 + Share-based payment; see appendix for a

Balance Sheet Update

• Max has ample liquidity and strong free cash flow generation to support future growth.
• Conservative debt on the balance sheet to ensure financial flexibility.
• Modest capital expenditures and working capital needs.

Key Points Summary Balance Sheet

(NIS Thousands)

Balance Sheet as of	12/31/2020	12/31/2019
Current Assets	362,973	217,777
Right of Use Assets	511,704	370,165
Other Non-Current Assets	58,047	44,955
Total Assets	932,724	632,897
Short-Term Lease Liabilities	53,830	47,216
Other Current Liabilities	174,618	100,204
Long-Term Lease Liabilities	486,126	344,162
Other Non-Current Liabilities	22,558	21,259
Total Liabilities	737,132	512,841
Equity	195,592	120,056
Total Liabilities and Equity	932,724	632,897

Cash position (NIS / USD Thousands)

Capitalization as of	/3 /	/3 /
	Balance (NIS / \$)	Balance (NIS / \$)
Cash and Cash Equivalents	NIS 142,763 / \$ 44,405	NIS 46,057 / \$ 13,328
Short-Term Debt	NIS 15,432 / \$ 4,800	NIS 17,251 / \$ 4,992
Long-Term Debt	NIS 20,622 / \$ 6,414	NIS 19,295 / \$ 5,583
Total Debt	NIS 36,054 / \$ 11,214	NIS 36,546 / \$ 10,575
Net Cash (Debt)	NIS 106,709 / \$ 33,191	NIS 9,511 / \$ 2,752

Bottom line: delivering on our growth strategy

Adj EBITDA Margin

(1) Exclude period that stores were closed due to government Covid-related restrictions.

Cash flows deriving from current operation	96,612	159,999
Cash flows used for investment activities	-10,672	-41,357(1)
Cash flows used for financing activities	-83,623	-46,436
Increase in cash and cash equivalents	,3 7	7 , 6

(1) Including Investment in short term deposit of NIS 24.5 million.

Long-Term Financial Targets

Appendix

(2)

Reconciliation of Net Income to Adjusted EBITDA

(NIS Thousands)

	7	8
Net Income	53,6	58,8 4	7 , 74	87,6
(+) Interest Expenses, Net	1,728	1,676	10,397	32,558
(+) Income Tax Expense	17,836	19,414	20,861	30,542
(+) Depreciation and Amortization	2,667	4,554	38,891	45,347
(+) Other Expenses(1)	1,573	1,682	766	4,255
(-) IFRS 16 Adjustment	NA	NA	-40,662	-45,680
(+) Share-based payment	NA	NA	NA	2,345
Adjusted EBITDA (Pre-IFRS 16)	77,4 5	86, 4	,5 7	56, 6
(+) IFRS 16 Adjustment	NA	NA	40,662	45,680
Adjusted EBITDA (Post-IFRS 16)	NA	NA	4 , 8	,676

Application of IFRS 16

Impact of IFRS 16 on the Q4-2019 Income Statement

(NIS Thousands)
Section	Before Application of IFRS 16	Effect of IFRS 16	After Application of IFRS 16	After Application of IFRS 16 (Excl. PPE)
Gross Profit	71,149	-333	71,482	71,482
Adjusted EBITDA	20,632	10,943	31,575	31,575
Operating Profit	19,011	2,311	21,322	21,322
Profit Before Tax	18,642	219	18,861	18,861
Net Income	14,745	170	14,915	14,915

Impact of IFRS 16 on the Q4-2020 Income Statement

(NIS Thousands) Section Before Application of IFRS 16 Effect of IFRS 16 + Share-based payment After Application of IFRS 16 After Application of IFRS 16 (Excl. PPE) Gross Profit 105,369 -143 105,226 105,226 Adjusted EBITDA 42,922 10,245 53,167 53,167 Operating Profit 38,190 1,261 39,451 39,451 Profit Before Tax 33,318 1,412 31,906 31,906 Net Income 24,564 -1,087 23,477 23,477

Application of IFRS 16

Impact of IFRS 16 on the 2019 Income Statement

(NIS Thousands)
Section	Before Application of IFRS 16	Effect of IFRS 16	After Application of IFRS 16	After Application of IFRS 16 (Excl. PPE)
Gross Profit	292,669	878	293,547	293,547
Adjusted EBITDA	100,527	40,662	141,189	141,189
Operating Profit	93,933	7,599	101,532	101,532
Profit Before Tax	93,246	-2,111	91,135	91,135
Net Income	7 ,8 8	- ,6 4	7 , 74	7 , 74

Impact of IFRS 16 on the 2020 Income Statement

(NIS Thousands)

Section	Before Application of IFRS 16	Effect of IFRS 16 + Share-based payment	After Application of IFRS 16	After Application of IFRS 16 (Excl. PPE)
Gross Profit	357,578	1,355	358,933	344,589
Adjusted EBITDA	156,996	43,335	200,331	185,987
Operating Profit	142,357	8,372	150,729	136,385
Profit Before Tax	125,210	-7,039	118,171	117,103
Net Income	3, 4	-5,4	87,6	86,8 7

Reconciliation of Net Income to Adjusted Net Income

(NIS Thousands)

	Q4-2019	(2) Q4-2020
Net Income	14,915	23,477
(+) IFRS 16 Adjustment	(170)	1,087
(+) Share-based payment	-	1,806
(+) Other Expenses	-	1,822
Adjusted Net Income	14,745	28,192

Adjusted EPS NIS 0.09 NIS 0.16

Reconciliation of Net Income to Adjusted Net Income

(NIS Thousands)

		(2)
Net Income	7 , 74	87,6
(+) IFRS 16 Adjustment	1,624	5,420
(-) Onetime bulk operation Net Income	-	1,068
(+) IPO Expenses	-	4,613
(+) Share-based payment	-	1,806
(+) Other Expenses	-	2,741
Adjusted Net Income	71,898	101,141
Adjusted EPS	NIS 0.42	NIS 0.59