INVESTOR PRESENTATION

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1 INVESTOR PRESENTATION 9M 2017 OPERATIONAL RESULTS published on October 20, 2017

2 Magnit at a Glance Magnit at a Glance As of September 30, Cities & Towns Total Number of Stores Selling Space (thous.sq.m.) Trucks 36 DCs As of September 30, 2017 in Europe in Market 2Retailer Capitalization $19 Market bn Capitalization 8 Share in Russian % Grocery Sector (As of eop 2016) Shareholder Structure as of 1H 2017 Free-float 63,5% Sergey Galitskiy, CEO 35,1% Lavreno Ltd. (Cyprus) 0,2% Other 1,1% 0,1% Sources: Company, Thomson Reuters, Company s calculations based on IFRS accounts for 1H2017 2

3 Magnit at a Glance Key Metrics Figures for 9M 2017 Total Revenue 9M 2017 Revenue Growth Y-o-Y P= 841 bn 6,44 % Net Margin 3,29 % Guidance for FY 2017 EBITDA Margin 8,26 % Net Debt/ LTM EBITDA 1,3 as of 1H 2017 New Convenience Stores(Gross) New Convenience Stores(Net) New Hypermarkets(Gross) New Hypermarkets(Net) New Drogerie Stores(Gross) 800 New Drogerie Stores(Net) 670 Sales Growth Rate Rub 8-10 % Sources: Company s estimates and calculations 3

4 Magnit at a Glance Mid-term Strategy Organic Space Growth Multi-format Store Growth Geographic Scope Density of Store Coverage Vertical Integration Efficiency Production Facilities Agricultural Private Label Cost Management New Technologies Centralization 4

Magnit at a Glance Russian Food Retail Market RUB 13,7 Market trillion Size FY 2016 69 % Modern Retail Penetration FY 2016 Market Composition by Format Non-Modern

5 Magnit at a Glance Russian Food Retail Market RUB 13,7 Market trillion Size FY % Modern Retail Penetration FY 2016 Market Composition by Format Non-Modern 31% 69% Modern Open Markets 7% Top-7 Retail Chains 26% Traditional Trade 24% Other chains 28% Source: INFOLine, as of December 31, 2016 Modern Non-Chain Stores 15% 5

6 Magnit at a Glance Magnit vs Peers Number of Stores, eop 2016 Selling Space thous. sq.m., eop 2016 Revenue RUB bn, eop 2016 Market Cap US$ bn, eop 2016 Market Share %, eop 2016 Magnit ,8 20,9 8 X ,7 8,8 8 Dixy ,2 0,6 2 Lenta ,4 4,0 2 Auchan ,6* Not public 3* Metro ,7 Not public 2 Okey ,5 0,7 1 * As of FY 2015; Sources: Companies, INFOLine, Thomson Reuters, Magnit s Estimates 6

Operational Overview Geographical Coverage 2 664 Cities & Towns 7 Federal Regions Convenience Stores North Caucasus 373 Southern Central Volga North Urals West 1 790 3 360 3 394 1 192 1 110 Siberia

7 Operational Overview Geographical Coverage Cities & Towns 7 Federal Regions Convenience Stores North Caucasus 373 Southern Central Volga North Urals West Siberia Hypermarkets Magnit Family Drogerie Stores Distribution Centers Source: Company, as of September 30,

8 Operational Overview Logistics System 36 DCs thous.sq.m. Warehousing Space Total Number of Stores Trucks Central Centralization Ratio % Volga M2017 Future Targets Southern Delivered from DC Urals Delivered from supplier North Caucasus North West Siberia Source: Company, as of September 30,

9 Operational Overview Suppliers 5 800Domestic Suppliers Federal Suppliers Local Suppliers 55% 45% Assortment Source: Company, as of September 30,

10 Operational Overview Direct Import 9 % International Direct Import (Annual Average) 757 Open Contracts Private Label M 597PL SKUs 10 % Share of Revenue 82 % Food Items Source: Company, Direct Import as of December 31, 2016; Private Label as of September 30,

11 Operational Overview Employees Employees In-store Distribution Regional Branches Head Office Other 1000 employees P= 33 Monthly Salary * 475Average Source: Company, as of September 30, 2017 *as of June 30,

12 Operational Overview Competitive Attributes Location Price Quality Assortment Reliability Atmosphere Sales Catchment Area Competitor #1 Competitor #2 500m People ( Families) Minimum Population Magnit #1 P= Monthly Family Food Budget Competitor #3 Magnit #2 500m Overlap Good Cannibalization % of Family Budget Spent on Food Source: Company s Estimates 12

13 Operational Overview Convenience Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback Sales Mix Source: Company, as of September 30, sq.m. Total 327 sq.m. Selling Space 89 % Food 11 % Non-food Store Ownership Structure 22 % Owned 78 % Leased P= $4,2 Traffic tickets/sq.m./day 2,5 Sales Density sales/sq.m./year P= 247, $3 636 LFL 9M2017 9M2016,% 2,34 Average Ticket, RUB -2,86 Traffic -0,59 Sales If Leased 3 years If Owned 4-6 years Cost of New Store per sq.m. of Total Space, thousand RUB Owned Leased Time to Maturity 6 months 13

14 Operational Overview Hypermarket Format Description Size of the Store Sales Mix Source: Company, as of September 30, sq.m. Total sq.m. Selling Space S: up to M: L: over % Food 20 % Non-food Store Ownership Structure 72 % Owned 28 % Leased Key Operational Statistics Average Ticket P= $10,0 Traffic tickets/sq.m./day 1,0 Sales Density sales/sq.m./year P= 580, $3 560 LFL 9M2017 9M2016,% -1,96 Average Ticket, RUB -9,65 Traffic -11,42 Sales Opening Payback 6-9 years Cost of New Store per sq.m. of Total Space, thousand RUB Owned Leased Time to Maturity 8-15 months 14

15 Operational Overview Magnit Family Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback Sales Mix sq.m. Total sq.m. Selling Space 84 % Food 16 % Non-food Store Ownership Structure 38 % Owned 62 % Leased P= $7,5 Traffic tickets/sq.m./day 1,7 Sales Density sales/sq.m./year P= 439, $4 512 LFL 9M2017 9M2016,% -1,27 Average Ticket, RUB -7,97 Traffic 6-9 years Cost of New Store per sq.m. of Total Space, thousand RUB Owned Leased Time to Maturity 8-15 months Source: Company, as of September 30, ,14 Sales 15

16 Operational Overview Drogerie Store Format Description Key Operational Statistics Opening Size of the Store Average Ticket Payback Sales Mix Source: Company, as of September 30, sq.m. Total 233 sq.m. Selling Space 100 % Non-food Store Ownership Structure 12 % Owned 88 % Leased P= $5,2 Traffic tickets/sq.m./day 0,9 Sales Density sales/sq.m./year P= 305, $1 617 LFL 9M2017 9M2016,% 0,81 Average Ticket, RUB 0,27 Traffic 1,08 Sales If Leased 3 years If Owned 4-6 years Cost of New Store per sq.m. of Total Space, thousand RUB Owned Leased 9-16 Time to Maturity 6 months 16

17 Operational Overview Format Summary Size of the Store sq.m. Average Ticket Traffic Tickets/ sq.m./day Density Sales/ sq.m./year Sales Mix LFL 9M2017-9M2016 % Store Ownership Structure Payback Years Cost of New Store per sq.m. of Total Space Time to Maturity Months Total Selling Space Food Non-food Av.ticket Traffic/ Sales Owned Leased Convenience store P.247,7 $4,2 2,5 P $ % 11% 2,34-2,86-0,59 22% 78% 3 (if leased) 4-6 (if owned) Owned RUB k Leased RUB 10-19k 6 Hypermarket * P.580,6 $10,0 1,0 P $ % 20% -1,96-9,65-11,42 72% 28% 6-9 Owned RUB k Leased RUB 31-41k 8-15 Drogerie Store P.305,9 $5,2 0,9 P $ % 0,81 0,27 1,08 12% 3 (if leased) 4-6 (if owned) Owned RUB 20-70k Leased RUB 9-16k 6 88% Magnit Family P.439,6 $7,5 1,7 P $ % 16% -1,27-7,97-9,14 38% 62% 6-9 Owned RUB k Leased RUB 31-54k 8-15 Source: Company, as of September 30, 2017; * Excludes selling space designated for leases 17

18 Financial Overview Summary P&L RUB MN 1H2016 1H2017 1H2016 / 1H2017 Y-o-Y Growth Net sales 521, , % Cost of sales (379,464.58) (402,478.35) 6.1% Gross profit 142, , % Gross margin, % 27.24% 27.48% SG&A (92,661.97) (106,643.26) 15.1% Other income, net 2, , % EBITDA 51, , % EBITDA margin,% 9.89% 8.79% Depreciation & Amortization (12,101.38) (16,447.62) 35.9% EBIT 39, , % Net finance costs (6,853.38) (6,280.43) -8.4% Profit before tax 32, , % Taxes (6,537.85) (5,313.44) -18.7% Effective tax rate 20.03% 20.39% Net income 26, , % Net margin, % 5.01% 3.74% SG&A is presented net of Depreciation & Amortization (except for Depreciation of production fixed assets which was included in the Cost of sales) Source: Company s calculations based on IFRS accounts for 1H2016-1H2017 Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals 18

19 Financial Overview Revenue & Costs Revenue Dynamics RUB bn 455 Sales Growth, RUB +14,7% LFL Sales Growth, RUB ,5% -3,1% Net Income Dynamics RUB bn +6,4% +3,3% -20,5% LFL H2015 1H2016 1H2017 SG&A Expense Structure 1H 2017 Revenue 555 RUB bn 22% RUB mn in SG&A,% in Revenue, % 2,17 (0,48) Packaging & Raw Materials 1,91 (0,42) Repair & Maintenance 1,56 (0,35) Bank Services 47,31 (10,48) Payroll & Related Taxes 1,40 (0,31) Taxes, Other than Income Tax 13,29 (2,94) Deprecation & Amortization 25,95 (5,75) Rent & Utilities 3,42 (0,76) Advertising H2015 1H2016 1H2017 Margin Dynamics 5 % 27,9 10,7 5,6 27,2 27,5 9,9 5,0 8,8 Gross Margin EBITDA Margin Net 3,7 Margin 2,99 (0,66) Other Source: Company s calculations based on IFRS accounts for 1H2015-1H H2015 1H2016 1H

20 Financial Overview Gross Margin Bridge % of Sales 27,94 27,24-0,76 0,06 0,45-0,21 GM 1H b.p. Trading Margin Transport GM 1H b.p. 27,48 Trading Margin Transport GM 1H2017 EBITDA Margin Bridge % of Sales -80 b.p b.p ,69-0,70 0,43-0,75 0,09-0,04 0,01 0,16 9,89 0,24-0,43-0,57-0,25-0,05-0,06 0,02 8, EBITDA 1H2015 Gross Margin Payroll & Taxes Rent & Utilites Advertising Repair & Maintenance Taxes other than income tax Other EBITDA 1H2016 Gross Margin Payroll & Taxes Rent & Utilites Advertising Repair & Maintenance Packaging & Raw Materials Other EBITDA 1H2017 Source: Company s calculations 20

21 Financial Overview Free Cash Flow RUB mn 1H Working Capital Analysis Average Days Payable to Suppliers is 35 Days. Adjusted EBITDA Change in Working capital Net Interest Expense Taxes Paid OCF Capex Other Cash Flow from Investing Activities FCF Payment of Dividents Other Cash Flow from Financing Activities CF Inventory Management Days is 64 Days 1H Working Capital: RUB mn as of Adjusted EBITDA Change in Working capital Net Interest Expense Taxes Paid Adjusted for loss from disposal of PPE, provision for doubtful receivables, foreign exchange loss, gain on disposal of subsidiary OCF Capex Other Cash Flow from Investing Activities Calculated as additions + transfers of PP&E during the respective period Source: Company s calculations based on IFRS accounts for 1H2016 1H2017 FCF Payment of Dividents Other Cash Flow from Financing Activities CF Does not include cash flow from financing activities 21

22 Financial Overview Balance Sheet RUB MN H2017 ASSETS Property plant and equipment 265, , , Other non-current assets 6, , , Cash and cash equivalents 8, , , Inventories 116, , , Trade and other receivables Advances paid 5, , , Taxes receivable Short-term financial assets Prepaid expenses Income tax receivable TOTAL ASSETS 404, , , EQUITY AND LIABILITIES Equity 165, , , Long-term debt 59, , , Other long-term liabilities 12, , , Trade and other payables 88, , , Short-term debt 44, , , Dividends payable 16, , Other current liabilities 16, , , TOTAL EQUITY AND LIABILITIES 404, , , Source: Company s calculations based on IFRS accounts for H2017 Please note: there may be small variations in calculation of totals, subtotals, and/or percentage change due to rounding of decimals 22

23 Financial Overview Capex Figures Buildings: Complete & under Construction Machinery & Equipment Other Assets Land FY RUB 50 bn RUB 500 mn 1 CAPEX for 1H2017 amounts to RUB 26,549 mn Source: Company s calculations based on IFRS accounts for

24 Financial Overview Debt Burden Debt Level Dynamics RUB mn Net Debt Short-term Debt Long-term Debt % Credit Metrics EBITDA / Finance Expenses 14,0 12,0 10,0 8,7 8,1 8,0 6,0 7,7 Credit Profile The Company has an Impeccable Credit History Collaboration with the Largest Banks Low Debt Burden: Net Debt / LTM EBITDA Ratio of 1,3 39,3% 77,2% 43,0% H2017 4,0 2,0 0, H2017 Net Debt / LTM EBITDA 2 No Currency Risk: 100% of Debt is Rub Denominated Matching Revenue Structure Insignificant Interest Rate Risk: Interest Payments are Made at Fixed Rates Primarily 1,5 1,3 23% of Debt is Long-term 1 0,9 1,0 0, H2017 Source: Company s calculations based on IFRS accounts for H

25 Contact Information Contact Information Timothy Post Head of Investor Relations 15/2 Solnechnaya Street Krasnodar, Russian Federation 25

INVESTOR PRESENTATION

INVESTOR PRESENTATION 1Q 2018 RESULTS published on April 20, 2018 Magnit at a Glance Magnit at a Glance As of March 31, 2018 2 764 Cities & Towns 16 625 Total Number of Stores 5 830 Selling Space (thous.sq.m.)