9M 2011 Financial Results

Press-release

Krasnodar

October 28, 2011

OJSC "Magnit" announces 9M[1] 2011 results

Krasnodar, October 28, 2011: OJSC "Magnit" (the "Company"; RTS, MICEX and LSE: MGNT) is pleased to announce its unaudited 9M 2011 financial results prepared in accordance with IFRS[2].

During 9M 2011 the Company added (net) 712 stores (591 convenience stores, 25 hypermarkets and 96 cosmetics stores) and increased its selling space by 40.23% in comparison to 9M 2010 from 1,241.09 thousand sq. m. to 1,740.42 thousand sq. m. The total store base as of September 30, 2011 reached 4,767 stores (4,593 convenience stores, 76 hypermarkets and 98 cosmetics stores).

Revenue in rubles increased by 46% YoY from 164,512.49 million RUR in 9M 2010 to 240,181.59 million RUR in 9M 2011. The top line growth was due to an increase in selling space as well as to a 14.29% increase of like-for-like sales (excl. VAT). Revenue growth in dollar terms amounted to 53.54%: from US$ 5,437.75 million to US$ 8,349.38 million.[3]

Gross margin grew from 22.30% in 9M 2010 to 23.40% in 9M 2011. Gross profit in rubles increased by 53.20% from 36,687.96 million RUR (US$ 1,212.67 million) to 56,205.28 million RUR (US$ 1,953.85 million).

EBITDA increased by 30.60% from 13,236.76 million RUR (US$ 437.52 million) in 9M 2010 to 17,287.04 million RUR (US$ 600.95 million) in 9M 2011. EBITDA margin in 9M 2011 amounted to 7.20% which is 0.85% below the figure of 9M 2010 (8.05%).

9M 2011 net income decreased by 2.66% and amounted to 6,979.03 million RUR (US$ 242.61 million) vs. 7,169.41 million RUR (US$ 236.98 million) in 9M 2010.

Sergey Galitskiy, the Company's CEO, provided the following comments on the published results:

"Quick changes of efficiency are not possible in companies with a great number of management points. Third quarter results are the benefit of our work throughout the period from the beginning of the year when we noticed negative EBITDA margin trends. One-off (50 bp) as well as regular improvements of commercial terms enabled us to achieve good third quarter results. We have drawn conclusions from the mistakes of the last year and the beginning of this year and will continue to focus on operational efficiency. At that we would like to note that quick growth remains the priority of our expansion. Besides, we would like to draw investors' attention to the fact that rapid-growing companies cannot have EBITDA margin comparable to companies with lower growth rates. We would like this to be considered by the market participants".

9M 2011 Key Operating Results

LFL results

9M 2011 Key Financial Results

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

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Company description:

Based in Krasnodar, in the Southern region of Russia, Open Joint Stock Company "Magnit" is the holding company for a group of entities that operate in the retail trade under the "Magnit" brand. The chain of "Magnit" stores is one of the leading food retail networks in Russia. As of September 30, 2011 the chain consisted of 4,593 convenience stores, 76 hypermarkets and 98 cosmetics stores (drogerie) in 1,325 locations in the Russian Federation.

Approximately two-thirds of the Company's stores are located in cities with a population of less than 500,000 inhabitants. Most of its stores are located in the Southern, North-Caucasian, Central and Volga regions. The Company also operates stores in the North-Western, Urals and Siberian regions.

As of September 30, 2011 the Company operated an in-house logistics system consisting of 14 distribution centers, employing automated stock replenishment systems and a fleet of 3,705 vehicles.

In accordance with the unaudited IFRS consolidated financial statements for 1H 2011, the Company recorded consolidated revenue of approximately US$5,471 million and consolidated EBITDA of around US$359 million.