Krasnodar, January 27, 2014: OJSC “Magnit”, Russia’s largest retailer (the “Company”; MICEX and LSE: MGNT) announces its unaudited FY 2013 results prepared in accordance with IFRS¹.

During 2013 the Company added (net) 1,209 stores (1,154 convenience stores, 35 hypermarkets and 26 “Magnit Family” stores) and increased its selling space by 18.13% in comparison to 2012 from 2,549.26 thousand sq. m. to 3,011.38 thousand sq. m. The total store base as of December 31, 2013 reached 8,093 stores (7,200 convenience stores, 161 hypermarkets, 46 “Magnit Family” stores and 686 cosmetics stores).

Revenue in rubles increased by 29.21% YoY from 448,661.13 million RUR in 2012 to 579,694.96 million RUR in 2013. The top line growth was due to an increase in selling space as well as to a 3.88% increase of like-for-like sales (excl. VAT). Revenue growth in dollar terms amounted to 26.14%: from US$ 14,429.65 million to US$ 18,201.93 million².

Gross margin grew from 26.53% 2012 to 28.51% in 2013. Gross profit in rubles increased by 38.81% from 119,051.79 million RUR (US$ 3,828.89 million) to 165,251.05 million RUR (US$ 5,188.74 million).

EBITDA increased by 36.56% from 47,380.48 million RUR (US$ 1,523.83 million) in 2012 to 64,700.70 million RUR (US$ 2,031.55 million) in 2013. EBITDA margin in 2013 amounted to 11.16%. EBITDA margin in the 4Q of 2013 was 12.49%.

2013 net income increased by 41.75% and amounted to 35,603.68 million RUR (US$ 1,117.93 million) vs. 25,117.17 million RUR (US$ 807.81 million) in 2012. Net income margin for FY 2013 was 6.14%.

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

“We consider 2013 to have been a very successful year. Revenues grew by 29.21% (in Rubles), which was above our guidance. We also achieved a record EBITDA margin, which enables us to maneuver competitively in the Russian marketplace and gives us the ability to balance profit margins and sales growth.

Please note that in order to correctly compare our hypermarkets with those of our competitors, it is important to take into account the fact that most of our hypermarkets are of a smaller size with an average selling space of under 3,000 square meters. In order to compare ‘apples to apples,’ we would like to highlight the operating efficiency of our large format hypermarkets (6 stores with a selling space of over 7,000 square meters). In 2013, these 6 large format Magnit hypermarkets had an EBITDA margin of 12.27%. Additionally, we would like to draw your attention to the fact that some of our competitors also use a different methodology to calculate their LFL numbers. Specifically, some of our competitors put their stores into their LFL base only 1 month after opening, which results in an overstatement of their LFL traffic compared to ours.”

¹ Based on management accounts

² Based on the average exchange rate for 2013 — 31.8480 RUR per 1 US$, 2012 — 31.0930 RUR per 1 US$

OJSC "Magnit" announces unaudited FY 2013 financial results