PJSC MAGNIT - Unaudited 1Q 2016 Financial Results1st Quarter Results

Press-release

Krasnodar

April 25, 2016

PJSC "Magnit" Announces Unaudited 1Q 2016 Results

Krasnodar, April 25, 2016: PJSC "Magnit", Russia's largest food retailer (the "Company"; MOEX and LSE: MGNT) announces its unaudited 1Q 2016 results prepared in accordance with IFRS[1].

During 1Q 2016 the Company added (net) 345 stores (121 convenience stores, 6 hypermarkets, 2 "Magnit Family" stores and 216 drogerie stores) and increased its selling space by 21.19% in comparison with 1Q 2015 from 3,732.73 thousand sq. m. to 4,523.63 thousand sq. m. The total store base as of March 31, 2016 reached 12,434 stores (9,715 convenience stores, 225 hypermarkets, 157 "Magnit Family" stores and 2,337 drogerie stores).

Revenue increased by 16.71% YoY from 218,756.26 million RUR in 1Q 2015 to 255,302.74 million RUR in 1Q 2016.

Gross profit increased by 10.01% from 59,116.27 million RUR to 65,035.93 million RUR. Gross margin in 1Q 2016 amounted to 25.47%.

EBITDA decreased from 20,395.23 million RUR in 1Q 2015 to 19,789.41 million RUR in 1Q 2016. EBITDA margin in the 1Q of 2016 was 7.75%.

1Q 2016 net income decreased from 9,477.84 million RUR in 1Q 2015 to 8,243.28 million RUR in 1Q 2016. Net income margin for 1Q 2016 was 3.23%.

According to Rosstat, food inflation in March 2016 amounted to 0.4% compared to 1.6% in March 2015, in 1Q 2016 it was 2.3% compared to 10.9% in 1Q 2015.

General inflation in March 2016 amounted to 0.5% compared to 1.2% in March 2015, in 1Q 2016 it was 2.1% compared to 7.4% in 1Q 2015.

1Q 2016 Key Operating Highlights:

	1Q 2016	1Q 2015	Growth Rate
Number of opened stores, NET	345	409	n/a
convenience stores	121	237	n/a
hypermarkets	6	6	n/a
magnit family	2	7	n/a
drogerie stores	216	159	n/a
Total number of stores	12,434	10,120	n/a
convenience stores	9,715	8,581	n/a
hypermarkets	225	196	n/a
magnit family	157	104	n/a
drogerie stores	2,337	1,239	n/a
Selling space, eop, th. sq. m.	4,523.63	3,732.73	21.19%
convenience stores	3,162.88	2,754.69	14.82%
hypermarkets	653.65	577.03	13.28%
magnit family	172.03	116.12	48.15%
drogerie stores	535.07	284.90	87.81%
Selling space growth, th. sq.m.	109.91	142.09	n/a
convenience stores	43.32	81.38	n/a
hypermarkets	14.51	17.94	n/a
magnit family	1.85	7.05	n/a
drogerie stores	50.23	35.73	n/a
Number of customers, million	893.52	766.34	16.60%
convenience stores	754.01	658.09	14.58%
hypermarkets	65.42	61.01	7.23%
magnit family	29.66	20.89	41.95%
drogerie stores	44.44	26.35	68.65%

LFL Results

Formats	1Q 2016 - 1Q 2015[2]
	# of Stores	Average Ticket	Traffic	Sales
Convenience Stores	8,154	0.32%	2.34%	2.67%
Hypermarkets	192	(3.90)%	(5.32)%	(9.01)%
Magnit Family	97	(3.79)%	(1.00)%	(4.76)%
Drogeries	1,114	11.51%	(2.56)%	8.66%
Total	9,557	(1.01)%	1.46%	0.44%

1Q 2016 Key Financial Results, million RUR

	1Q 2016	1Q 2015	Growth Rate
Net sales	255,302.74	218,756.26	16.71%
convenience stores	187,509.74	162,596.12	15.32%
hypermarkets	39,472.89	38,730.75	1.92%
magnit family	13,515.09	9,601.90	40.75%
drogerie stores	13,937.28	7,303.00	90.84%
wholesale	867.74	524.49	65.44%
Gross profit	65,035.93	59,116.27	10.01%
Gross margin,%	25.47%	27.02%	n/a
EBITDAR	28,808.89	26,905.10	7.08%
EBITDAR margin, %	11.28%	12.30%	n/a
EBITDA	19,789.41	20,395.23	(2.97)%
EBITDA margin, %	7.75%	9.32%	n/a
EBIT	13,819.87	15,394.50	(10.23)%
EBIT margin, %	5.41%	7.04%	n/a
Net income	8,243.28	9,477.84	(13.03)%
Net income margin, %	3.23%	4.33%	n/a

1Q 2016 Key Financial Results, US$ million[3]

	1Q 2016	1Q 2015	Growth Rate
Net sales	3,420.99	3,517.44	(2.74)%
convenience stores	2,512.58	2,614.43	(3.90)%
hypermarkets	528.92	622.76	(15.07)%
magnit family	181.10	154.39	17.30%
drogerie stores	186.76	117.43	59.04%
wholesale	11.63	8.43	37.96%
Gross profit	871.46	950.55	(8.32)%
Gross margin, %	25.47%	27.02%	n/a
EBITDAR	386.03	432.61	(10.77)%
EBITDAR margin, %	11.28%	12.30%	n/a
EBITDA	265.17	327.94	(19.14)%
EBITDA margin, %	7.75%	9.32%	n/a
EBIT	185.18	247.53	(25.19)%
EBIT margin, %	5.41%	7.04%	n/a
Net income	110.46	152.40	(27.52)%
Net income margin, %	3.23%	4.33%	n/a

Note: net revenue in US$ terms is calculated using the daily exchange rate.

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 March 31, 2016, Magnit operated 34 distribution centers and about 12,434 stores (9,715 convenience, 382 hypermarkets, and 2,337 drogerie stores) in 2,385 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the audited IFRS results 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 March 1, 2015.

[3] Based on the average exchange rate for 1Q 2016 - 74.6283 RUB per 1 USD, 1Q 2015 - 62.1919 RUB per 1 USD