September/9M 2013 Results

Press-release Krasnodar October 9, 2013 OJSC "Magnit" Announces 27.94% Retail Sales Growth in Rubles forSeptember 2013[1] Krasnodar, October 9, 2013: OJSC "Magnit", Russia's largestretailer (the "Company"; MICEX and LSE: MGNT) announces 27.94% retail salesgrowth in rubles for September 2013. During September 2013 the Company opened (net) 91 stores. The totalstore base reached 7,646 stores (6,783 convenience stores, 148 hypermarkets,30 "Magnit Family" stores and 685 cosmetics stores). Preliminary consolidated unaudited net retail revenue (excl. VAT)in 9M 2013 increased by 30.60% in ruble terms (compared to 9M 2012) and stoodat 417,061.48 million rubles. Sergey Galitskiy, the Company's CEO, provided the followingcomments on the 3Q 2013 results: "Witnessing tougher competition as well as stronger cannibalizationeffect of our stores in July - September this year, we have focused onoperating efficiency (results will be published on October 25, 2013) and paidless attention to traffic. In the 4th quarter we will be more aggressive inprice while we confirm the earlier given guidance for this year on both salesgrowth and profitability". September 2013 Key Operating and Financial Highlights: September 2013 September 2012 Growth RateNumber of opened stores, NET 91 145 n/a convenience stores 95 98 n/a hypermarkets 1 0 n/a magnit family 0 3 n/a cosmetics stores (5) 44 n/aTotal number of stores 7,646 6,119 n/a convenience stores 6,783 5,523 n/a hypermarkets 148 105 n/a magnit family 30 11 n/a cosmetics stores 685 480 n/aSelling space growth, thousand sq.m. 26.47 47.81 n/a convenience stores 26.57 32.75 n/a hypermarkets 1.51 0 n/a magnit family 0 3.75 n/a cosmetics stores (1.62) 11.32 n/aSelling space, eop, thousand sq. m. 2,841.39 2,260.88 25.68% convenience stores 2,195.74 1,813.42 21.08% hypermarkets 448.45 324.68 38.12% magnit family 35.44 13.63 n/a cosmetics stores 161.77 109.14 n/aNumber of customers, million 199.69 168.81 18.30% convenience stores 176.82 154.24 14.64% hypermarkets 15.92 11.53 38.01% magnit family 2.60 0.86 n/a cosmetics stores 4.36 2.17 n/aNet retail sales, million RUR 46,221.74 36,129.07 27.94% convenience stores 35,739.81 29,206.43 22.37% hypermarkets 8,510.24 6,103.92 39.42% magnit family 905.51 293.36 n/a cosmetics stores 1,066.18 525.35 n/aNet retail sales, million US$[2] 1,416.35 1,145.84 23.61% convenience stores 1,095.16 926.29 18.23% hypermarkets 260.78 193.59 34.71% magnit family 27.75 9.30 n/a cosmetics stores 32.67 16.66 n/a 3Q and 9M 2013 Key Operating and Financial Highlights: 3Q 2013 3Q 2012 Growth Rate 9М 2013 9М 2012 Growth RateNumber of opened stores, NET 230 397 n/a 762 810 n/a convenience stores 231 255 n/a 737 517 n/a hypermarkets 10 7 n/a 22 15 n/a magnit family 4 6 n/a 10 8 n/a cosmetics stores (15) 129 n/a (7) 270 n/aTotal number of stores 7,646 6,119 n/a 7,646 6,119 n/a convenience stores 6,783 5,523 n/a 6,783 5,523 n/a hypermarkets 148 105 n/a 148 105 n/a magnit family 30 11 n/a 30 11 n/a cosmetics stores 685 480 n/a 685 480 n/aSelling space growth, th. sq.m. 93.30 141.41 n/a 292.14 290.77 n/a convenience stores 66.36 83.97 n/a 218.28 175.65 n/a hypermarkets 25.36 21.57 n/a 60.83 46.24 n/a magnit family 4.25 7.43 n/a 11.08 9.83 n/a cosmetics stores (2.67) 28.44 n/a 1.95 59.05 n/aSelling space, eop, th. sq. m. 2,841.39 2,260.88 25.68% 2,841.39 2,260.88 25.68% convenience stores 2,195.74 1,813.42 21.08% 2,195.74 1,813.42 21.08% hypermarkets 448.45 324.68 38.12% 448.45 324.68 38.12% magnit family 35.44 13.63 n/a 35.44 13.63 n/a cosmetics stores 161.77 109.14 n/a 161.77 109.14 n/aNumber of customers, million 625.49 518.91 20.54% 1,808.12 1,483.99 21.84% convenience stores 554.95 474.63 16.92% 1,614.69 1,366.55 18.16% hypermarkets 49.68 35.97 38.11% 139.61 98.22 42.13% magnit family 7.95 2.12 n/a 20.03 4.53 n/a cosmetics stores 12.92 6.19 n/a 33.80 14.69 n/aNet retail sales, million RUR 144,260.91 111,864.88 28.96% 417,061.48 319,332.35 30.60% convenience stores 111,743.27 90,287.18 23.76% 327,004.60 261,755.27 24.93% hypermarkets 26,636.85 19,336.32 37.76% 74,994.86 52,537.48 42.75% magnit family 2,779.21 717.09 n/a 6,982.67 1,514.72 n/a cosmetics stores 3,101.58 1,524.29 n/a 8,079.35 3,524.88 n/aNet retail sales, million US$[3] 4,398.51 3,494.99 25.85% 13,191.05 10,268.45 28.46% convenience stores 3,407.05 2,820.84 20.78% 10,342.68 8,417.00 22.88% hypermarkets 812.16 604.12 34.44% 2,371.98 1,689.39 40.40% magnit family 84.74 22.40 n/a 220.85 48.71 n/a cosmetics stores 94.57 47.62 n/a 255.54 113.35 n/aLFL Results LFL growth 3Q 2013 - 3Q 2012[4] Convenience stores Hypermarkets Magnit Family Cosmetics stores TotalAverage ticket (excl. VAT), RUR 6.31% 1.12% 3.97% (1.53)% 5.84%Traffic (1.83)% 2.33% 2.79% 15.98% (1.44)%Revenue, RUR 4.36% 3.48% 6.87% 14.20% 4.32%LFL growth 9М 2013 - 9М 2012[5] Convenience stores Hypermarkets Magnit Family Cosmetics stores TotalAverage ticket (excl. VAT), RUR 5.82% 2.40% 5.27% 2.06% 5.73%Traffic (1.33)% 3.25% 9.02% 6.35% (1.03)%Revenue, RUR 4.41% 5.72% 14.76% 8.54% 4.64% Please note that food inflation in 9M 2013 was 4.5% compared to5.4% in 9M 2012, and in 3Q 2013 it was -0.7% vs. +0.7% in 3Q 2012. For further information, please contact: Timothy Post Director, Investor Relations Email: [email protected] Office: +7-861-277-4554 x7600 Mobile: +7-961-511-7678 Direct Line: +7-861-277-4562Dina Svishcheva Deputy Director, Investor Relations Email: [email protected] Office: +7-861-277-45-54 x5101 Mobile: +7-961-511-0202 Direct Line: +7-861-277-4562 Company description: Magnit is Russia's largest retailer. Founded in 1994 by SergeyGalitskiy, the company is headquartered in the southern Russian city ofKrasnodar. As of September 30, 2013, Magnit operates 19 distribution centersand over 7,600 stores (6,783 convenience, 178 hypermarkets, and 685 cosmetics)in more than 1,760 cities and towns throughout 7 federal regions of theRussian Federation. In accordance with the reviewed IFRS consolidated financialstatements for 1H 2013, Magnit had revenues of $8,796 million USD and anEBITDA of $890 million USD. Magnit's local shares are traded on the MoscowStock Exchange (MICEX: MGNT) and its GDRs on the London Stock Exchange (LSE:MGNT) and it has a credit rating from Standard & Poor's of BB. Measured bymarket capitalization, Magnit is now Europe's 2nd largest retailer. --------------------------------- [1] According to management accounts [2] Based on the average exchange rate for September 2013 of32.6344 RUB per 1 USD, September 2012 - 31.5307 RUB per 1 USD [3] Based on the average exchange rate for 3Q 2013 - 32.7977 RUBper 1 USD, 3Q 2012 - 32.0072 RUB per 1 USD, 9M 2013 - 31.6170 RUB per 1 USD,9M 2012 - 31.0984 RUB per 1 USD [4] Based on 4,573 convenience stores and 170 cosmetics storeswhich were opened by January 1, 2012, and 72 hypermarkets and 3 Magnit Familywhich were opened by October 1, 2011, i.e. based on the result of theconvenience stores that had been operating for not less than six months andhypermarkets that had been operating for not less than eight months and haveachieved a mature level of sales. [5] Based on 3,646 convenience stores and 19 cosmetics stores whichwere opened by July 1, 2011, and 60 hypermarkets and 1 Magnit Family whichwere opened by May 1, 2011, i.e. based on the result of the convenience storesthat had been operating for not less than six months and hypermarkets that hadbeen operating for not less than eight months and have achieved a mature levelof sales