Unaudited FY 2012 Financial Results

OJSC MAGNIT - Unaudited FY 2012 Financial Results

PR Newswire

London, January 22

OJSC "Magnit" announces unaudited FY 2012 results

Krasnodar, January 22, 2013: OJSC "Magnit" (the "Company"; MICEX and LSE: MGNT)is pleased to announce its unaudited FY 2012 financial results prepared inaccordance with IFRS .

During 2012 the Company added (net) 1,575 stores (1,040 convenience stores, 36hypermarkets, 17 Magnit Family stores and 482 cosmetics stores) and increasedits selling space by 29.39% in comparison to 2011 from 1,970.16 thousand sq. m.to 2,549.26 thousand sq. m. The total store base as of December 31, 2012reached 6,884 stores (6,046 convenience stores, 126 hypermarkets, 20 MagnitFamily stores and 692 cosmetics stores).

Revenue in rubles increased by 34% YoY from 335,699.95 million RUR in 2011 to448,661.13 million RUR in 2012. The top line growth was due to an increase inselling space as well as to a 5.26% increase of like-for-like sales (excl.VAT). Revenue growth in dollar terms amounted to 26%: from US$ 11,423.26million to US$ 14,429.65 million.

Gross margin grew from 24.33% in 2011 to 26.52% in 2012. Gross profit in rublesincreased by 45.71% from 81,663.45 million RUR (US$ 2,778.86 million) to118,994.62 million RUR (US$ 3,827.05 million).

EBITDA increased by 71.62% from 27,604.14 million RUR (US$ 939.32 million) in2011 to 47,374.54 million RUR (US$ 1,523.64 million) in 2012. EBITDA margin in2012 amounted to 10.56%.

2012 net income increased by 103.15% and amounted to 24,994.79 million RUR (US$803.87 million) vs. 12,303.84 million RUR (US$ 418.68 million) in 2011.

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

We carry on the tradition to publish preliminary financial results for the yearas soon as possible, in order that you may understand what is going on withMagnit.

In the fourth quarter we set another record for the EBITDA margin and thus,finished a successful year for us, which is reflected in the current shareprice.

We are already thinking of 2013 and have set a challenging task for ourselvesto open over 1,100 convenience stores, over 60 stores of the hypermarket andMagnit family format, and 250 cosmetics stores. We also hope that this year wewill launch 4 distribution centers and buy at least 1,200 trucks. We plan thatcapex will total approximately US$1.8 bn. I walk you through these numbers inorder to indicate how hard we will work this year.

Knowing that the market tends to immediately extrapolate any success for manyyears ahead we would like to caution our investors from being overlyoptimistic.

The results which we have released are not bad. We appreciate your positiveappraisal of our results. Both the Company and ourselves are travelling thoughthis life journey for the first time and we are thus, unable to know howsustainable are these high results. The most important thing for us is theresilience and competitiveness of the Company. We are still in the process ofwinning market share and therefore, we will do our best to be highlyaggressive. We appreciate all of our investors who were with us last year. Wewill make all efforts to justify your confidence in 2013".

4Q and 12M 2012 Key Operating Results

Selling space, thousand 2,549.26 1,970.16 29.39% 2,549.26 1,970.16 29.39%sq. m.

wholesale 22.24 18.11 22.81% 174.93 92.55 89.01%

wholesale 0.72 0.58 23.42% 5.63 3.15 78.64%

Gross profit, mn 35,695.12 25,502.03 39.97% 118,994.62 81,663.45 45.71% RUR

Gross profit, mn 1,148.61 816.58 40.66% 3,827.05 2,778.86 37.72% US$

Net profit, mn 8,203.64 5,324.81 54.06% 24,994.79 12,303.84 103.15% RUR

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

For further information, please contact:

Headquartered in the southern Russia city of Krasnodar, Magnit (LSE and MICEX:MGNT) is the holding company for a group of entities that operate in the retailtrade under the "Magnit" brand. The chain of "Magnit" stores is one of theleading food retail networks in Russia. As of December 31, 2012 the chainconsisted of 6,046 convenience stores, 126 hypermarkets, 20 "Magnit Family"stores and 692 cosmetics stores (drogerie) in 1,605 cities and towns throughoutthe Russian Federation.

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

As of December 31, 2012 Magnit operated an in-house logistics system consistingof 18 distribution centers, employing automated stock replenishment systems anda fleet of 4,401 vehicles.

In accordance with the unaudited IFRS management accounts for 2012, Magnitrecorded consolidated revenues of approximately $14,430 billion USD and aconsolidated EBITDA of $1,524 million USD.

According to management accounts

Based on the average exchange rate for 4Q 2012 of 31.0767 RUB per 1 USD, 4Q2011 - 31.2304 RUB per 1 USD, 12М 2012 - 31.0930 RUB per 1 USD, 12M 2011 -29.3874 RUB per 1 USD

On May 14, 2012 the Company announced the reformatting of 5 hypermarkets toMagnit Family stores. Detailed information can be obtained from thepress-release http://www.magnit-info.ru/upload/iblock/f08/f081571bdef1933b951446680a26bf40.pdf

Based on 3,833 convenience stores which were opened by April 1, 2011, and 50hypermarkets which were opened by February 1, 2011, i.e. based on the result ofthe convenience 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

Based on 2,465 convenience stores which were opened by July 1, 2010, and 25hypermarkets which were opened by May 1, 2010, 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