PJSC MAGNIT - Magnit Unaudited FY 2015 Financial Results

Press-release

Krasnodar

January 27, 2016

PJSC "Magnit" Announces Unaudited FY 2015 Results

Krasnodar, January 27, 2016: PJSC "Magnit", Russia's largest food retailer (the "Company"; MOEX and LSE: MGNT) announces its unaudited FY 2015 results prepared in accordance with IFRS[1].

During 2015 the Company added (net) 2,378 stores (1,250 convenience stores, 29 hypermarkets, 58 "Magnit Family" stores and 1,041 drogerie stores) and increased its selling space by 22.92% in comparison to 2014 from 3,590.64 thousand sq. m. to 4,413.72 thousand sq. m. The total store base as of December 31, 2015 reached 12,089 stores (9,594 convenience stores, 219 hypermarkets, 155 "Magnit Family" stores and 2,121 drogerie stores).

Revenue increased by 24.50% YoY from 763,527.25 million RUR in 2014 to 950,613.34 million RUR in 2015. The top line growth was due to an increase in selling space as well as to a 6.21% increase in like-for-like sales.

Gross profit increased by 22.81% from 220,520.56 million RUR to 270,821.52 million RUR. Gross margin in 2015 amounted to 28.49%.

EBITDA increased by 20.95% from 85,909.67 million RUR in 2014 to 103,911.29 million RUR in 2015. EBITDA margin in 2015 was 10.93%, which is 32 b. p. lower than 11.25% in 2014. EBITDA margin in the 4Q of 2015 was 11.07%.

2015 net income increased by 23.40% and amounted to 58,846.66 million RUR vs. 47,685.84 million RUR in 2014. Net income margin for 2015 was 6.19%.

4Q and FY 2015 Key Operating Highlights:

	4Q 2015	4Q 2014	Growth Rate	FY 2015	FY 2014	Growth Rate
Number of opened stores, NET	701	691	n/a	2,378	1,618	n/a
convenience stores	348	453	n/a	1,250	1,144	n/a
hypermarkets	11	15	n/a	29	29	n/a
magnit family	28	29	n/a	58	51	n/a
drogerie stores	314	194	n/a	1,041	394	n/a
Total number of stores	12,089	9,711	n/a	12,089	9,711	n/a
convenience stores	9,594	8,344	n/a	9,594	8,344	n/a
hypermarkets	219	190	n/a	219	190	n/a
magnit family	155	97	n/a	155	97	n/a
drogerie stores	2,121	1,080	n/a	2,121	1,080	n/a
Selling space, eop. th. sq. m.	4,413.72	3,590.64	22.92%	4,413.72	3,590.64	22.92%
convenience stores	3,119.56	2,673.31	16.69%	3,119.56	2,673.31	16.69%
hypermarkets	639.14	559.09	14.32%	639.14	559.09	14.32%
magnit family	170.18	109.07	56.03%	170.18	109.07	56.03%
drogerie stores	484.84	249.17	94.58%	484.84	249.17	94.58%
Selling space growth, th. sq.m.	258.73	263.64	n/a	823.08	579.26	n/a
convenience stores	122.26	153.60	n/a	446.25	361.11	n/a
hypermarkets	34.18	37.11	n/a	80.05	76.21	n/a
magnit family	30.36	30.24	n/a	61.11	55.81	n/a
drogerie stores	71.92	42.69	n/a	235.67	86.13	n/a
Number of customers, million	895.82	785.28	14.08%	3,376.86	2,944.12	14.70%
convenience stores	754.72	676.19	11.61%	2,874.00	2,567.15	11.95%
hypermarkets	68.76	64.50	6.60%	263.05	237.59	10.72%
magnit family	29.08	19.67	47.81%	100.30	60.93	64.60%
drogerie stores	43.26	24.91	73.65%	139.51	78.45	77.82%

LFL Results

Formats	4Q 2015 - 4Q 2014[2]
	# of Stores	Average Ticket	Traffic	Sales
Convenience Stores	7,798	3.33%	(1.45)%	1.83%
Hypermarkets	181	(0.28)%	(7.36)%	(7.63)%
Magnit Family	77	(0.97)%	(6.53)%	(7.44)%
Drogeries	973	13.72%	(1.63)%	11.86%
Total	9,029	2.07%	(2.09)%	(0.07)%

Formats	12M 2015 - 12M 2014[2]
	# of Stores	Average Ticket	Traffic	Sales
Convenience Stores	7,287	8.14%	(0.79)%	7.29%
Hypermarkets	179	5.53%	(3.80)%	1.51%
Magnit Family	76	4.33%	(3.55)%	0.62%
Cosmetics Stores	910	13.24%	5.62%	19.61%
Total	8,452	7.23%	(0.96)%	6.21%

4Q and FY 2015 Key Financial Results, million RUR

	4Q 2015	4Q 2014	Growth Rate	FY 2015	FY 2014	Growth Rate
Net sales	260,170.78	220,852.25	17.80%	950,613.34	763,527.25	24.50%
convenience stores	188,929.35	163,402.85	15.62%	701,274.95	577,775.77	21.37%
hypermarkets	43,310.51	41,305.33	4.85%	161,578.67	139,655.12	15.70%
magnit family	13,509.11	9,023.09	49.72%	44,825.31	25,533.74	75.55%
drogerie stores	13,403.80	6,701.76	100.00%	40,122.06	19,756.68	103.08%
wholesale	1,018.01	419.21	n/a	2,812.35	805.94	n/a
Gross profit	75,445.59	65,044.14	15.99%	270,821.52	220,520.56	22.81%
Gross margin,%	29.00%	29.45%	n/a	28.49%	28.88%	n/a
EBITDAR	37,373.79	31,251.81	19.59%	134,107.36	106,483.50	25.94%
EBITDAR margin, %	14.37%	14.15%	n/a	14.11%	13.95%	n/a
EBITDA	28,798.49	25,302.11	13.82%	103,911.29	85,909.67	20.95%
EBITDA margin, %	11.07%	11.46%	n/a	10.93%	11.25%	n/a
EBIT	23,228.24	20,615.00	12.68%	82,830.86	68,300.00	21.28%
EBIT margin, %	8.93%	9.33%	n/a	8.71%	8.95%	n/a
Net income	15,592.61	13,793.19	13.05%	58,846.66	47,685.84	23.40%
Net income margin, %	5.99%	6.25%	n/a	6.19%	6.25%	n/a

4Q and FY 2015 Key Financial Results, US$ million[3]

	4Q 2015	4Q 2014	Growth Rate	FY 2015	FY 2014	Growth Rate
Net sales	3,945.36	4,656.94	(15.28)%	15,594.59	19,872.31	(21.53)%
convenience stores	2,865.02	3,445.55	(16.85)%	11,504.25	15,037.75	(23.50)%
hypermarkets	656.78	870.97	(24.59)%	2,650.66	3,634.80	(27.08)%
magnit family	204.86	190.26	7.67%	735.35	664.57	10.65%
drogerie stores	203.26	141.31	43.84%	658.19	514.21	28.00%
wholesale	15.44	8.84	n/a	46.14	20.98	n/a
Gross profit	1,144.10	1,371.54	(16.58)%	4,442.76	5,739.49	(22.59)%
Gross margin,%	29.00%	29.45%	n/a	28.49%	28.88%	n/a
EBITDAR	566.76	658.98	(13.99)%	2,200.00	2,771.45	(20.62)%
EBITDAR margin, %	14.37%	14.15%	n/a	14.11%	13.95%	n/a
EBITDA	436.72	533.53	(18.15)%	1,704.64	2,235.97	(23.76)%
EBITDA margin, %	11.07%	11.46%	n/a	10.93%	11.25%	n/a
EBIT	352.25	434.69	(18.97)%	1,358.82	1,777.64	(23.56)%
EBIT margin, %	8.93%	9.33%	n/a	8.71%	8.95%	n/a
Net income	236.45	290.85	(18.70)%	965.37	1,241.12	(22.22)%
Net income margin, %	5.99%	6.25%	n/a	6.19%	6.25%	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	Head of Investor Relations Email: [e-mail] Office: [phone] x 17600 Mobile: [phone] Direct Line: [phone]
Investor Relations Office	[e-mail] Direct Line: [phone] Website: ir.magnit.com/
Media Inquiries	Media Relations 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 December 31, 2015, Magnit operated 33 distribution centers and about 12,089 stores (9,594 convenience, 374 hypermarkets, and 2,121 drogerie stores) in 2,361 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS management accounts for 2015, Magnit had revenues of RUB 951 billion and an EBITDA of RUB 104 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] Based on management accounts

[2] 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 December 1, 2014.

[3] Based on the average exchange rate for 4Q 2015 - 65.9434 RUB per 1 USD, 4Q 2014 - 47.4243 RUB per 1 USD, 12M 2015 - 60.9579 RUB per 1 USD, 12M 2014 - 38.4217 RUB per 1 USD