PJSC MAGNIT - Reviewed 1H 2015 Financial Results

Press-release

Krasnodar

August 26, 2015

PJSC "Magnit" Announces Reviewed 1H 2015 Results

Krasnodar, August 26, 2015: PJSC "Magnit", Russia's largest food retailer (the "Company"; MOEX and LSE: MGNT) announces its reviewed 1H 2015 results prepared in accordance with IFRS.

During 1H 2015 the Company added (net) 1,017 stores (546 convenience stores, 11 hypermarkets, 13 "Magnit Family" stores and 447 drogerie stores) and increased its selling space by 23.17% in comparison to 1H 2014 from 3,189.21 thousand sq. m. to 3,928.00 thousand sq. m. The total store base as of June 30, 2015 reached 10,728 stores (8,890 convenience stores, 201 hypermarkets, 110 "Magnit Family" stores and 1,527 drogerie stores).

Revenue increased by 30.30% YoY from 349,047.11 million RUR in 1H 2014 to 454,808.63 million RUR in 1H 2015. The top line growth was due to an increase in selling space as well as to an 11.47% increase of like-for-like sales.

Gross profit increased by 30.81% from 97,134.52 million RUR to 127,060.41 million RUR. Gross margin in 1H 2015 amounted to 27.94%.

EBITDA increased by 33.05% from 36,549.60 million RUR in 1H 2014 to 48,627.66 million RUR in 1H 2015. EBITDA margin in the 1H of 2015 was 10.69%, which is 22 b. p. higher than 1H 2014 (10.47%). EBITDA margin in the 2Q of 2015 was 11.96%.

1H 2015 net income increased by 28.98% and amounted to 25,265.66 million RUR vs.19,588.07 million RUR in 1H 2014. Net income margin for 1H 2015 was 5.56%.

Key figures presented in this press-release are immaterially higher compared to numbers under management accounts announced by the Company on July 22, 2015. Thus, according to the reviewed results for the 1H 2015 Gross, EBITDA, EBIT and Net Income margins are higher by 1 b.p.

2Q and 1H 2015 Key Operating Highlights:

	2Q 2015	2Q 2014	Growth Rate	1H 2015	1H 2014	Growth Rate
Number of opened stores, NET	608	362	n/a	1,017	525	n/a
convenience stores	309	273	n/a	546	414	n/a
hypermarkets	5	4	n/a	11	8	n/a
magnit family	6	7	n/a	13	11	n/a
drogerie stores	288	78	n/a	447	92	n/a
Total number of stores	10,728	8,618	n/a	10,728	8,618	n/a
convenience stores	8,890	7,614	n/a	8,890	7,614	n/a
hypermarkets	201	169	n/a	201	169	n/a
magnit family	110	57	n/a	110	57	n/a
drogerie stores	1,527	778	n/a	1,527	778	n/a
Selling space, eop, th. sq. m.	3,928.00	3,189.21	23.17%	3,928.00	3,189.21	23.17%
convenience stores	2,866.25	2,433.66	17.78%	2,866.25	2,433.66	17.78%
hypermarkets	589.81	504.54	16.90%	589.81	504.54	16.90%
magnit family	122.73	67.03	83.10%	122.73	67.03	83.10%
drogerie stores	349.21	183.99	89.80%	349.21	183.99	89.80%
Selling space growth, th. sq.m.	195.27	120.60	n/a	337.36	177.83	n/a
convenience stores	111.56	83.95	n/a	192.94	121.46	n/a
hypermarkets	12.78	11.01	n/a	30.72	21.66	n/a
magnit family	6.61	8.95	n/a	13.66	13.77	n/a
drogerie stores	64.31	16.70	n/a	100.04	20.95	n/a
Number of customers, million	851.22	737.81	15.37%	1,617.61	1,400.48	15.50%
convenience stores	729.07	647.16	12.66%	1,387.21	1,229.92	12.79%
hypermarkets	66.90	59.88	11.72%	127.91	112.96	13.24%
magnit family	24.43	13.87	76.10%	45.32	25.41	78.38%
drogerie stores	30.82	16.90	82.33%	57.17	32.19	77.58%

LFL Results

Formats	2Q 2015 - 2Q 2014[1]
	# of Stores	Average Ticket	Traffic	Sales
Convenience Stores	7,201	10.38%	(0.59)%	9.74%
Hypermarkets	169	6.49%	(3.02)%	3.27%
Magnit Family	49	5.43%	(3.10)%	2.16%
Drogeries	715	14.35%	10.18%	25.99%
Total	8,134	9.26%	(0.60)%	8.61%

Formats	1H 2015 - 1H 20141
	# of Stores	Average Ticket	Traffic	Sales
Convenience Stores	7,103	12.06%	(0.15)%	11.89%
Hypermarkets	168	10.16%	(1.36)%	8.66%
Magnit Family	49	9.82%	(0.91)%	8.82%
Cosmetics Stores	682	12.21%	11.32%	24.92%
Total	8,002	11.49%	(0.02)%	11.47%

2Q[2]and 1H 2015 Key Financial Results[3], million RUR

	2Q 2015	2Q 2014	Growth Rate	1H 2015	1H 2014	Growth Rate
Net sales	236,052.37	185,056.98	27.56%	454,808.63	349,047.11	30.30%
convenience stores	175,837.64	140,961.74	24.74%	338,433.76	266,982.05	26.76%
hypermarkets	40,640.38	34,418.47	18.08%	79,371.13	64,008.30	24.00%
magnit family	10,734.92	5,628.16	90.74%	20,336.82	10,081.71	101.72%
drogerie stores	8,253.35	3,943.55	109.29%	15,556.35	7,831.68	98.63%
wholesale	586.08	105.08	n/a	1,110.57	143.38	n/a
Gross profit	67,944.14	52,468.57	29.49%	127,060.41	97,134.52	30.81%
Gross margin,%	28.78%	28.35%	n/a	27.94%	27.83%	n/a
EBITDAR	35,386.26	26,488.74	33.59%	62,291.36	45,819.47	35.95%
EBITDAR margin, %	14.99%	14.31%	n/a	13.70%	13.13%	n/a
EBITDA	28,232.43	21,670.10	30.28%	48,627.66	36,549.60	33.05%
EBITDA margin, %	11.96%	11.71%	n/a	10.69%	10.47%	n/a
EBIT	23,199.53	17,334.02	33.84%	38,594.03	28,060.24	37.54%
EBIT margin, %	9.83%	9.37%	n/a	8.49%	8.04%	n/a
Net income	15,787.82	12,599.84	25.30%	25,265.66	19,588.07	28.98%
Net income margin, %	6.69%	6.81%	n/a	5.56%	5.61%	n/a

2Q and 1H 2015 Key Financial Results, US$ million[4]

	2Q 2015	2Q 2014	Growth Rate	1H 2015	1H 2014	Growth Rate
Net sales	4,483.06	5,287.36	(15.21)%	7,923.94	9,978.59	(20.59)%
convenience stores	3,339.47	4,027.49	(17.08)%	5,896.39	7,632.51	(22.75)%
hypermarkets	771.83	983.39	(21.51)%	1,382.85	1,829.88	(24.43)%
magnit family	203.88	160.80	26.79%	354.32	288.22	22.93%
drogerie stores	156.75	112.67	39.12%	271.03	223.89	21.05%
wholesale	11.13	3.00	n/a	19.35	4.10	n/a
Gross profit	1,290.38	1,499.11	(13.92)%	2,213.72	2,776.89	(20.28)%
Gross margin.%	28.78%	28.35%	n/a	27.94%	27.83%	n/a
EBITDAR	672.05	756.82	(11.20)%	1,085.28	1,309.89	(17.15)%
EBITDAR margin. %	14.99%	14.31%	n/a	13.70%	13.13%	n/a
EBITDA	536.18	619.15	(13.40)%	847.22	1,044.88	(18.92)%
EBITDA margin. %	11.96%	11.71%	n/a	10.69%	10.47%	n/a
EBIT	440.60	495.26	(11.04)%	672.41	802.19	(16.18)%
EBIT margin. %	9.83%	9.37%	n/a	8.49%	8.04%	n/a
Net income	299.84	360.00	(16.71)%	440.19	559.99	(21.39)%
Net income margin. %	6.69%	6.81%	n/a	5.56%	5.61%	n/a

Note: net revenue in US$ terms is calculated using the average exchange rate for the period.

For further information. please contact:

Timothy Post	Director, Investor Relations Email: [e-mail] Office: [phone] x 17600 Mobile: [phone] Direct Line: [phone]
Dina Svishcheva	Deputy Director, Investor Relations Email: [e-mail] Office: [phone] x 15101 Mobile: [phone] Direct Line: [phone]
Media Inquiries	PR and GR Department [e-mail]

Company description:

Magnit is Russia's largest food retailer. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2015, Magnit operated 29 distribution centers and over 10,700 stores (8,890 convenience, 311 hypermarkets, and 1,527 drogerie stores) in approximately 2,233 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS consolidated financial statements for 1H 2015. Magnit had revenues of RUB 455 billion and an EBITDA of RUB 49 billion. Magnit's local shares are traded on the Moscow Stock 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+. Measured by market capitalization, Magnit is one of the largest retailers in Europe.

[1] LFL calculation base includes stores (all formats), which have been opened 12 months prior to the last month of the reporting period. i.e. by June 1, 2014.

[2] Management accounts

[3] Please follow the link to view 1H 2015 financial report http://ir.magnit.com/en/financial-reports/

[4] Based on the average exchange rate for 2Q 2015 - 52.6543 RUB per 1 USD, 2Q 2014 - 34.9999 RUB per 1 USD, 1H 2015 - 57.3968 RUB per 1 USD, 1H 2014 - 34.9796 RUB per 1 USD