Ozon : Press Release

Ozon Announces Second Quarter 2021 Financial Results and Raises GMV

Guidance for Full-Year 2021 to 110% Year-on-Year

August 17, 2021 - Ozon Holdings PLC (NASDAQ and MOEX: "OZON", thereafter referred to as "Ozon" or the "Company"), a leading Russian e-commerce platform, announces its unaudited financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial and Operating Results Highlights

• Number of orders increased to 40.9 million, up from 14.6 million orders delivered in Q2 2020, with growth accelerating to 180% year-on-year, on the back of 80% growth in customer base and strong cohort performance with 40% higher order frequency.
• GMV incl. services increased to RUB 89.0 billion, growing by 94% year-on-year, compared to RUB 45.8 billion in Q2 2020, despite the high base effect of 188% year-on- year growth in Q2 2020.
• Share of Marketplace reached 62.1% as a percentage of GMV incl. services, compared to 47.4% in Q2 2020, supported by the merchant base more than tripling in the last twelve months and boosting availability and choice as assortment reached approximately 27 million SKUs as of June 30, 2021.
• Adjusted EBITDA was a negative RUB 9.1 billion, compared to negative RUB 1.8 billion in Q2 2020, implying Adjusted EBITDA as a percentage of GMV incl. services of 10.3% in Q2 2021 compared to 3.9% in Q2 2020, on the back of strategic investments deployed to build scale and increase our market share.
• Cash flow from operating activities was negative RUB 7.7 billion, compared to negative RUB 2.1 billion in Q2 2020.
• The Company had cash and cash equivalents of RUB 122.9 billion as of June 30, 2021.

Alexander Shulgin, Chief Executive Officer of Ozon commented: "Since 2018 we transformed Ozon into one of the largest e-commerceplayers in Russia with 18 million customers and close to RUB 1 billion GMV per day! Yet we see an enormous market growth opportunity in core e-commercebusiness as well as the new Fintech vertical, which already boasts 1 million users, and our quick commerce business unit Ozon Express. Despite very tough comps, our GMV was up by 94%, on the back of a tremendous order growth of 180% year-on-year. The 40% increase in order frequencies is a testimony to the stellar performance of our cohorts. We significantly enhanced our last mile operations, increased our seller base and more than doubled the assortment since the start of the year. We expect our order growth to remain strong for the remainder of the year and raise our GMV growth guidance to 110% for the full year."

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Financial Outlook

The below forward-looking statements reflect Ozon's expectations as of August 17, 2021, considering trends year to date and could be subject to change, and involve inherent risks which we are not able to control, for example the overall impact of the coronavirus pandemic and any ongoing or new potential disruptions caused by COVID-19. The below forecasts assume no further escalation of the COVID-19 pandemic.

Based on the recent performance and current outlook:

• Ozon raises its growth guidance for the Company's GMV incl. services to 110% for Full- Year 2021, compared to Full-Year 2020.
• Ozon reiterates capital expenditure plans of between RUB 20 billion to RUB 25 billion for the Full-Year 2021.

Summary: Key Operating and Financial Metrics

The following table sets forth a summary of the key operating and financial data for the quarter and the six months ended June 30, 2021. The quarterly information for the quarter and the six months ended June 30, 2021 and June 30, 2020 has not been audited by the Company's auditors.

	(RUB in millions,			For the three months
			ended June 30,
	unless indicated
							YoY
	otherwise)			2021		2020
					change, %
GMV incl. services	88,957	45,750	94%
Number of orders, million	40.9	14.6	180%
Number of active buyers,	18.4	10.2	80%
million (Last 12 Months)
Share of Marketplace	62.1%	47.4%		14.7pp
GMV, %
Gross profit	11,762	7,696	53%
Gross profit as % of GMV	13.2%	16.8%		(3.6pp)
Adjusted EBITDA	(9,130)	(1,796)		-
Adjusted EBITDA as a
percentage of GMV incl.	(10.3%)	(3.9%)		(6.4pp)
services, %
Cash Flow from	(7,673)	(2,107)		-
Operating Activities
Free Cash Flow	(12,598)	(4,497)		-

For the six months

ended June 30,

	2021		2020			YoY
				change, %
163,165	77,393		111%
75.0	27.7		171%
18.4	10.2		80%
60.4%	38.2%			22.2pp
23,349	12,379		89%
14.3%	16.0%			(1.7pp)
(13,985)	(6,282)			-
(8.6%)	(8.1%)		(0.5pp)
(19,791)	(4,517)			-
(27,351)	(8,488)			-

Note that Adjusted EBITDA and Free cash flow are non-IFRS financial measures. See "Presentation of Financial and Other Information" section of this press release for a definition of such non-IFRS measures, a discussion of the limitations on their use, and reconciliations of the non-IFRS measures to the applicable IFRS measures. See the definitions of metrics such as GMV incl. services, Gross Profit, number of orders, number of active buyers, share of Marketplace GMV in the "Other Key Operating Measures" section of this press release.

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Key Highlights and Business Developments

Ozon e-commerce business demonstrated strong GMV growth of 94% year-on-year, despite the high base effect of Q2 2020 which was impacted by COVID-19 restrictions and during which the Company achieved GMV growth of 188% year-on-year. The GMV growth trend improved during the second quarter of 2021.

The order growth in Q2 2021 accelerated significantly and reached 180% year-on-year, on the back of the rising order frequency, underpinned by fast expansion of the last mile logistics which resulted in greater proximity to the customer base, making the service more convenient for Ozon customers across a number of regions.

• In Q2 2021 order frequency reached 6.6, implying a 40% increase year-on-year, indicating improvement in the customer cohort characteristics.
• The notable increase in user engagement is attributable to Ozon's continuous efforts to enhance customer value proposition in terms of selection, value and convenience.

1. Ozon's offline pickup locations exceeded 15,000 as of June 30, 2021 compared to around 10,000 as of the 2020 year-end. The rapid expansion of the Ozon logistics infrastructure makes Ozon one of the leading last mile

network operators among e-commerce players and logistics companies in Russia.

1. Ozon's fulfillment footprint reached 268,000 sqm following the expansion of fulfillment center in Saint Petersburg and the launch of a fulfillment facility in

Khabarovsk in the Far East.

1. An accelerated growth in the number of merchants on Ozon platform led to a greater assortment breadth which reached approximately 27 million SKUs.

GMV growth for the first half 2021 amounted to 111% year-on-year, giving the Сompany confidence to raise its Full-Year 2021 GMV growth guidance to 110%.

Ozon Marketplace

In Q2 2021, Ozon Marketplace GMV increased by more than 150% year-on-year, with the Share of Marketplace (3P) as a percentage of GMV reaching 62.1%, compared to 47.4% in Q2 2020. The fast expansion of the marketplace has been driven by the growing number of merchants trading on the platform which more than doubled since the start of the year, as well as customer base increasing by 80% year-on-year, propelling the flywheel effect.

Sellers

The number of sellers more than tripled year-over-year and reached nearly 50 thousand. Notably, more than 60% of the new merchant registrations in Q2 2021 were generated outside of Moscow. The Company is constantly developing new, innovative ways to support growth and development of the businesses of Ozon's merchants on Ozon marketplace, including new modes of fulfillment and delivery, that allow sellers to get their goods to customers quickly and reliably as well as market intelligence and business analytics tools, advertising solutions and financial services.

1. Our physical infrastructure, consisting of fulfillment centers, sorting hubs and last mile infrastructure facilitates a variety of marketplace models (FBO, FBS, Storefront) and provides maximum flexibility for sellers vis-à-vis fulfillment and delivery modes that best suit their business requirements which helps to lower barriers to entry for the sellers.

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1. Our digital infrastructure and technology-driven tools enable us to accelerate the digital transformation for the Ozon merchant base, increasing sellers' efficiency and boosting their sales. Ozon offers analytical and trading tool kits, an intuitive interface and best-in-class functionality, and a wide range of promotion mechanisms.
2. • Content: Ozon improved content creation and moderation procedures, which expedited the merchant onboarding.
   • Advertising. Ozon offers its sellers over 30 types of advertising tools and is constantly developing and adding new ones. Every third seller on Ozon platform currently uses advertising tools and the Company sees further growth potential for enhancement and monetization of advertising services on Ozon's platform.

1. Our Fintech services for the merchants offer access to the financial products and solutions that merchants require to scale up their businesses.

Buyers

Number of active customers on Ozon's platform increased by 80% year-on-year, reaching

18.4 million as of June 30, 2021, compared to 10.2 million as of June 30, 2020. Annual order frequency of Ozon's buyers increased by 40% to 6.6 in Q2 2021, compared to 4.7 in Q2 2020. Significant growth in order frequency is attributable to both more active new buyers and increased activity from the existing customers.

Assortment

Ozon assortment reached approximately 27 million SKUs as of June 30, 2021, fueled by accelerated onboarding of merchants on Ozon's marketplace and more efficient content creation process.

Ozon Fulfillment & Logistics

Fulfillment and logistics network expansion remains one of the key strategic priorities for Ozon and underpins the growth of its e-commerce business. The Company continues to scale its nation-wide fulfillment and logistics infrastructure both in existing locations as well as the new regions, thereby ensuring the widest assortment availability as well as fast and reliable delivery of goods to 18 million Ozon customers across Russia.

Fulfillment:

• As of June 30, 2021, Ozon fulfillment footprint reached 268 thousand square meters across Moscow, Moscow region, Tver, Saint-Petersburg, Kazan, Rostov-on-Don, Yekaterinburg, Novosibirsk, and a newly launched fulfillment center in Khabarovsk.

Logistics:

• As of June 30, 2021, Ozon operated over 15,000 offline pick-up locations, with the dominant share operated by the franchisees across Russia.
• Logistics plays an increasingly important role in augmenting fast growth of the Ozon marketplace. In Q2 2021 the Ozon logistics business was able to process and deliver parcels with 98% on time delivery.

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Third Party Logistics Services

• This year Ozon launched 3P logistics services which creates an additional revenue stream for Ozon and drives higher utilization levels and faster ramp up of Ozon logistics infrastructure.
• In Q2 2021 the Company continued to expand its third party logistics operations, with over 100 partners leveraging Ozon's nation-wide network.

Ozon New Initiatives & Verticals

Ozon Financial Services

Ozon FinTech is an area of strategic focus for Ozon and is progressively becoming a more notable lever of the growth for the platform. As part of Ozon's fintech strategy on April 12, 2021 Ozon entered into an agreement to acquire Oney Bank LLC. The acquisition of Oney Bank enabled Ozon to obtain a banking license in a fast and efficient manner which gave Ozon full flexibility to structure and launch financial service products that allow the customers and marketplace sellers on the platform to transact in a frictionless way. Ozon will also be able to structure lending products in accordance with the desired specifications of its customer base and merchants.

B2C Initiatives

• Number of issued Ozon Cards reached 1 million in Q2 2021.
• Ozon Card became one of the top-3 most popular payment methods on the Ozon platform.
• Ozon card holders exhibit greater customer loyalty with 1.6x higher order frequency on average in the 12-month period ended June 30, 2021, compared to the customers using other payment methods.

B2B Initiatives

• With its microcredit license, in 2021 Ozon launched the microfinance company "Ozon Credit", that operates on the Ozon Invest B2B lending platform and offers lending solution for Ozon merchants. Ozon Credit leverages more than 40 different indicators, processed by machine learning, aiding Ozon with faster and more accurate scoring.
• Ozon "Flexible payment plan", is a unique solution designed for the merchants, that enables them to arrange a payment schedule that fits the individual business needs of the Ozon sellers. Over 2,000 sellers started to actively employ this product just in few months after the launch to better manage their working capital and increase sales.

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