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OJSC MAGNIT: Unaudited FY 2012 Financial Results


Press-release

Krasnodar

January 22, 2013

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 in accordance with IFRS .

During 2012 the Company added (net) 1,575 stores (1,040 convenience stores, 36 hypermarkets, 17 Magnit Family stores and 482 cosmetics stores) and increased its 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, 2012 reached 6,884 stores (6,046 convenience stores, 126 hypermarkets, 20 Magnit Family stores and 692 cosmetics stores).

Revenue in rubles increased by 34% YoY from 335,699.95 million RUR in 2011 to 448,661.13 million RUR in 2012. The top line growth was due to an increase in selling 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$ 11,423.26 million to US$ 14,429.65 million.

Gross margin grew from 24.33% in 2011 to 26.52% in 2012. Gross profit in rubles increased by 45.71% from 81,663.45 million RUR (US$ 2,778.86 million) to 118,994.62 million RUR (US$ 3,827.05 million).

EBITDA increased by 71.62% from 27,604.14 million RUR (US$ 939.32 million) in 2011 to 47,374.54 million RUR (US$ 1,523.64 million) in 2012. EBITDA margin in 2012 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 the published results:

"Dear Ladies and Gentlemen!

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

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 share price.

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

Knowing that the market tends to immediately extrapolate any success for many years ahead we would like to caution our investors from being overly optimistic.

The results which we have released are not bad. We appreciate your positive appraisal of our results. Both the Company and ourselves are travelling though this life journey for the first time and we are thus, unable to know how sustainable are these high results. The most important thing for us is the resilience and competitiveness of the Company. We are still in the process of winning market share and therefore, we will do our best to be highly aggressive. We appreciate all of our investors who were with us last year. We will make all efforts to justify your confidence in 2013".


    
    4Q and 12M 2012 Key Operating Results
                            4Q 2012  4Q 2011   Growth   12M 2012 12M 2011  Growth  
                                             Rate                        Rate   
                                                                                

Number of opened stores,      765      542       n/a    1,575    1,254       
n/a
NET                                                                             
                                                                                

convenience stores 523 413 n/a 1,040 1,004 n/a

hypermarkets 21 17 n/a 36 40 n/a

magnit family 9 0 n/a 17 2 n/a

cosmetics stores 212 112 n/a 482 208 n/a


                                                                                
                                                                                
                                                                                

Total number of stores      6,884    5,309       n/a    6,884    5,309       
n/a
                                                                                

convenience stores 6,046 5,006 n/a 6,046 5,006 n/a

hypermarkets3 126 90 n/a 126 90 n/a

magnit family 20 3 n/a 20 3 n/a

cosmetics stores 692 210 n/a 692 210 n/a


                                                                                
                                                                                
                                                                                

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

convenience stores 1,977.46 1,637.83 20.74% 1,977.46 1,637.83 20.74%

hypermarkets 387.62 278.45 39.21% 387.62 278.45 39.21%

magnit family 24.36 3.80 n/a 24.36 3.80 n/a

cosmetics stores 159.83 50.09 n/a 159.83 50.09 n/a


                                                                                
                                                                                
                                                                                

Number of customers,       549.44   445.77    23.26% 2,033.43 1,644.43    
23.66%
million                                                                         
                                                                                

convenience stores 497.07 415.46 19.64% 1,863.62 1,550.28 20.21%

hypermarkets 39.47 26.81 47.22% 137.69 87.97 56.53%

magnit family 4.34 0.82 n/a 8.87 2.20 n/a

cosmetics stores 8.56 2.68 n/a 23.25 3.98 n/a


                                                                                



LFL Results
    LFL growth 4Q2012- 4Q 2011              Convenience stores  Hypermarkets  Total

Average ticket (excluding VAT), RUR 7.60% 6.19% 7.83%

Traffic 0.38% 4.93% 0.62%

Revenue, RUR 8.01% 11.43% 8.50%


                                                                               
    LFL growth 12M 2012 to 12M 2011       Convenience stores  Hypermarkets   Total 

Average ticket (excluding VAT), RUR 5.73% 3.23% 5.63%

Traffic (0.46)% 2.07% (0.35)%

Revenue, RUR 5.25% 5.36% 5.26%


    


2012 Key Financial Results
                     4Q 2012    4Q 2011   Growth      2012       2011     Growth  
                                        Rate                            Rate   

Net sales, mn 129,176.09 95,518.36 35.24% 448,661.13 335,699.95 33.65% RUR


                                                                               
     convenience 102,481.13 79,660.18  28.65%   364,236.40 287,731.79  26.59%  
          stores                                                               
                                                                               
    hypermarkets 22,881.23  14,925.24  53.31%   75,418.70  46,185.07   63.30%  

magnit family 1,583.85 286.17 n/a 3,098.58 797.71 n/a

cosmetics stores 2,207.63 628.66 n/a 5,732.51 892.82 n/a


                                                                               
       wholesale   22.24      18.11    22.81%     174.93     92.55     89.01%  

Net sales, mnUS$ 4,156.69 3,058.51 35.91% 14,429.65 11,423.26 26.32%


                                                                               
     convenience  3,297.68  2,550.73   29.28%   11,714,42   9,790.99   19.64%  
          stores                                                               
                                                                               
    hypermarkets   736.28    477.91    54.06%    2,425.58   1,571.59   54.34%  

magnit family 50.97 9.16 n/a 99.66 27.14 n/a

cosmetics stores 71.04 20.13 n/a 184.37 30.38 n/a


                                                                               
       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$

Grossmargin,% 27.63% 26.70% n/a 26.52% 24.33% n/a

EBITDAR, mn RUR 17,688.50 12,386.08 42.81% 57,764.89 34,636.97 66.77%

EBITDAR, mn US$ 569.19 396.60 43.52% 1,857.81 1,178.63 57.62%

EBITDARmargin, % 13.69% 12.97% n/a 12.87% 10.32% n/a

EBITDA, mn RUR 14,631.03 10,317.10 41.81% 47,374.54 27,604.14 71.62%

EBITDA, mn US$ 470.80 330.35 42.51% 1,523.64 939.32 62.21%

EBITDA margin, % 11.33% 10.80% n/a 10.56% 8.22% n/a

EBIT, mn RUR 11,506.19 7,946.76 44.79% 36,108.55 19,624.21 84.00%

EBIT, mn US$ 370.25 254.46 45.51% 1,161.31 667.78 73.91%

EBIT margin, % 8.91% 8.32% n/a 8.05% 5.85% n/a

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

Net profit, mn 263.98 170.50 54.83% 803.87 418.68 92.00% US$

Net profit 6.35% 5.57% n/a 5.57% 3.67% n/a margin, %


                                                                               
    Note: net revenue in US$ terms is calculated using the daily exchange rate.
    For further information, please contact:
    

Timothy Post     Director, Investor Relations                                  
                                                                               
                 e-mail: Post@gw.tander.ru                                     
                                                                               
                 Tel. in Krasnodar +7 (861) 277-45-54, 210-98-10 ext. 7600     
                                                                               
                 Mob.: +7 (961) 508-06-61                                      
                                                                               
                 Direct line for investors only: +7 (861) 277-45-62            

Dina Svishcheva Deputy Director, Investor Relations


                                                                               
                 e-mail: Chistyak@gw.tander.ru                                 
                                                                               
                 Tel. in Krasnodar +7 (861) 277-45-54, 210-98-10 ext. 5101     
                                                                               
                 Mob.: +7-961-511-02-02                                        
                                                                               
                 Direct line for investors only: +7 (861) 277-45-62            
                                                                               
    Company description:

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 retail
trade under the "Magnit" brand. The chain of "Magnit" stores is one of the
leading food retail networks in Russia. As of December 31, 2012 the chain
consisted of 6,046 convenience stores, 126 hypermarkets, 20 "Magnit Family"
stores and 692 cosmetics stores (drogerie) in 1,605 cities and towns throughout
the Russian Federation.

Approximately two-thirds of the Magnit'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 December 31, 2012 Magnit operated an in-house logistics system consisting of 18 distribution centers, employing automated stock replenishment systems and a fleet of 4,401 vehicles.

In accordance with the unaudited IFRS management accounts for 2012, Magnit recorded consolidated revenues of approximately $14,430 billion USD and a consolidated 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, 4Q 2011 - 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 to Magnit Family stores. Detailed information can be obtained from the press-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 50 hypermarkets which were opened by February 1, 2011, i.e. based on the result of the convenience stores that had been operating for not less than six months and hypermarkets that had been operating for not less than eight months and have achieved a mature level of sales

Based on 2,465 convenience stores which were opened by July 1, 2010, and 25 hypermarkets which were opened by May 1, 2010, i.e. based on the result of the convenience stores that had been operating for not less than six months and hypermarkets that had been operating for not less than eight months and have achieved a mature level of sales

END

-0- Jan/22/2013 07:00 GMT

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