MGNT.L Regulatory News (MGNT)

Press Release | Krasnodar | September 22, 2020

Magnit opens e-pharmacy

Krasnodar, Russia (September 22, 2020): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, began testing its online store that allows ordering products from over 100 pharmacies throughout Moscow and Moscow region. Customers can choose between two types of click & collect service: 30 min pick-up of the currently available assortment at the nearest store or next-day pick-up of the wide assortment delivered from warehouse. In the future, the Company plans to launch a courier delivery service for over-the-counter medications.

Residents of Moscow and Moscow region can now use the Magnit Pharmacy website, Magnit's smartphone app, or its Call Center to reserve pharmaceuticals, medicinal cosmetics, personal hygiene products, baby food, medical devices, and seasonal items. The assortment currently includes around 5,000 articles; although the Company plans to expand it significantly by the end of the year. Customers can make reservations around the clock and browse the remaining stocks, drug formulas, and other user information. The pick-up service itself is tied to the working hours of the pharmacies, and customers will have to provide a relevant document when collecting prescription medications.

There is no minimum order amount. For reservations collected on the same day, the prices are identical to those in brick-and-mortar pharmacies. Pharmacy employees prepare the orders and put them into individual packaging. Magnit implemented special KPIs (key performance indicators) for its order pickers and other staff involved in preparing the order. The Company created a dedicated customer care division to control the level of service provided and manage customer complaints. In the future, this division will become a part of the Company's omnichannel ecosystem and will support all its Internet services.

For overnight orders from the warehouse assortment, the price of a product will be compared to other relevant online offerings available on the market, which will allow customers to have the best value for their money. Order preparation and delivery will be handled by an automated distribution center operated by the distributor-Magnit Pharma-in Moscow.

Another important feature and advantage of Magnit's e-pharmacy for the customers is the possibility to accrue and redeem bonus points under the Company's cross-format loyalty program, which enables participants to shop in any of the Magnit's formats that is convenient for them, both grocery and non-food, and use bonus points to pay for their entire purchase irrespective of the amount. The e-pharmacy will have the same price promotions as the brick-and-mortar ones, with dedicated marketing projects planned in the future.

All components of Magnit's e-pharmacies, including the virtual storefront, brick-and-mortar pharmacies, distribution, and delivery, are housed within a single company. This model allows for end-to-end control of service quality and business process efficiency as well as high utilization of logistics and retail capacities, and enables the Company to capture customers via a number of different customer interaction channels.

The Company plans to complete the testing for its e-pharmacy by the end of 2020, whereby it will make the decision on whether to scale the project to other Russian regions.

"The e-pharmacy is the first of our own customer offerings in the e-commerce segment. Until now, our experience was limited to partnerships. We plan to use our e-pharmacy to perfect the technologies and the operational model for our future launch of a food delivery service and, ultimately, for Magnit's omnichannel ecosystem,"-noted Jan Dunning, President and CEO of Magnit Retail Chain.

For further information, please contact:

Dmitry Kovalenko

Director for Investor Relations

Email: dmitry_kovalenko@magnit.ru

Office: +7 (861) 210-48-80

Dina Chistyak

Director for Investor Relations

Email: dina_chistyak@magnit.ru

Office: +7 (861) 210-9810 x 15101

Media Inquiries

Email: press@magnit.ru

Note to editors:

Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2020, Magnit operated 38 distribution centres and 20,894 stores (14,581 convenience, 472 supermarkets and 5,841 drogerie stores) in 3,710 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.

Forward-looking statements:

This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.