Rosinter Restaurants : 8/29/2023 Press Release – Operating and financial results 1H2023

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PRESS RELEASE

IN THE 1ST HALF OF 2023 ROSINTER INCREASED REVENUE BY 1.4% AND MAINTAINED

EBITDA

Moscow, 28 August 2023: Rosinter Restaurants Holding PJSC (Rosinter, Rosinter Restaurants, the

Company), one of the largest restaurants holding companies in Russia (Moscow Exchange MICEX-RTS: stock ticker ROST) announces its operating and financial results for the 1st half of 2023 in accordance with the International Financial Reporting Standards.

This press release presents notes to financial statements before the application of IFRS 16 "Leases" as, in the Company's opinion, in this way the Holding Company's financial situation is represented most accurately. Furthermore, in this press release the Holding Company presents non-IFRS financial measures that should be regarded as supplementary to those disclosed in the financial statements.

Consolidated statements of financial position, of profit and loss, and of cash flows, presented in the exhibit to this press release, have been prepared subject to the requirements of IFRS 16 "Leases".

KEY FINANCIAL AND OPERATING RESULTS:

• At the end of the 1st half of 2023, EBITDA[2] before impairment and write-offs grew by 0.5% to come to RUB 266 million. Compared with the pre-pandemic 2019, EBITDA grew 2.5 times.
• In the reporting period, Rosinter increased its revenue[1] by 1.4% to RUB 3,325 million despite the fact that the guest traffic remains low in several locations with Rosinter's restaurants. Primarily, these are malls that were abandoned by international brands, which caused a decline in the guest traffic. Then come locations in the international airport terminals with the continuing restrictions on travel to Europe and the US.
• The Company managed to maintain the cost to revenue ratio at the level of the first half of 2022 (81.9%) amid a high inflation rate (that, according to expert estimates, went as high as 10%) by implementing measures to control cost, update menus and adapt them to the current consumer demand as well as by focusing on managing supplier relationships in order to spot the most advantageous offers for the Company.
• Net loss increased by RUB 75 million due to the effect of exchange rate differences and an increase in financial expenses.
• The Company forecasts that in the second half of the year its revenue and EBITDA will grow by 10% (against similar measures for 2022). The growth will be boosted by the seasonality factor, the airport traffic recovery and the performance of three new Rosinter's restaurants that opened in July of 2023 in the new Terminal 2 of the Domodedovo International Airport.

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FINANCIAL RESULTS BY BUSINESS UNITS:

Restaurant business at airports and railway stations

Despite the maintained restrictions on international air travel to several European countries and the US, the negative trend of 2022 gave way to the passenger traffic growth in the first half of 2023. The traffic grew due to the increased domestic traffic within Russia and new flight routes. Considering seasonal factors, Rosinter expects to see the main effect on its revenue in this respect in the second half of 2023.

It is important to note that despite the positive passenger traffic growth trend, activities of the Company's 12 restaurants located in international travel areas remain suspended.

Revenues of restaurants located at airports and railway stations grew by 6% against 2022, and by 19% against the pre-Covid 2019. The profit margin grew by 0.7 percentage points, compared with the 1st half of 2022. Absolute restaurant-level EBITDA grew by 9% against the 1st half of 2022. Compared with 2019, restaurant- level EBITDA grew by 250%.

The highest growth of LFL revenue (36% against the pre-pandemic 2019) was observed in "Vkusno i Tochka" fast food outlets run by Rosinter under a franchise agreement.

Restaurant business in city locations

Revenues of city restaurants grew in the 1st half of 2023 by 2% against 2022. The growth was thanks to the Company's efforts to maintain, as much as practical, the menu prices amid rising inflation, which helped the Company to meet the needs of the target audience and to retain loyalty of regular customers. Revenue growth was boosted also by the menu update efforts, brand promotion activities, and a high level of restaurant service. The highest growth (+6%) was in the Shikari brand of Asian restaurants.

It is important to note that in the regions of Russia the situation is better than in the capital. Several regional restaurants increased their LFL revenue by 25% against 2019.

As there are quite many franchise restaurants in tourist cities and in the south of Russia, Rosinter expects revenue to continue to grow in the second half of 2023 due to the expansion of the domestic tourism industry.

MARGARITA KOSTEEVA, PRESIDENT OF ROSINTER RESTAURANTS HOLDING PJSC, SAYS:

"In the first half of 2023, we see the consumer demand recovery. Thanks to this trend as well as to the cost management and menu update efforts and marketing activities, we managed to maintain our financial performance at the level of 2022 amid rising inflation. By the end of the 1st half of 2023, Rosinter's revenue grew by 1.4%. The Company maintained the margin at 18.1% and EBITDA at RUB 266 million.

The main achievement is, in our opinion, that the Holding Company managed to get back to the pre-Covid 2019 performance. Restaurants' LFL revenue grew by 6.5%. Thanks to the right strategy and financial model, Rosinter has kept its business, team, and brand portfolio. The results that have been achieved will let the Company to get back with time to the progressive development scheme.

The main focus in the tough economic period was on refreshing brands, improving the guest loyalty, and offering the best menu, service and hospitality standards. Popular dishes on the menus of IL Patio and TGI FRIDAY'S won gold in the international "Quality Guarantee" competition. In April 2023, the IL Patio (Italian cuisine) brand won the prestigious "Golden Palm in Restaurant Business" national award.

An important event of the first half of 2023 was the relaunching of the programme of the development of restaurants in transportation hubs. In April 2023, Rosinter opened a new IL Patio restaurant in Pulkovo. In July 2023, 3 Mama Russia, IL Patio and TGI FRIDAY'S restaurants opened in the new International Terminal 2 of the Domodedovo Airport. It is currently the largest restaurant project on the new terminal site (the total restaurant area is 730 m2). Besides, before the end of the year the Company plans to open two more Rosinter locations.

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At the end of 2022, the Costa Coffee brand left Russia and was no longer in the Holding Company's franchising portfolio. Today, Rosinter is getting ready to launch a new brand of coffee shops that customers will see both in the city formats and in transportation hubs.

In 2023, the Company opened 5 new franchise restaurants, specifically, IL Patio and Planet Sushi in the landmark tourist location "The Sun of Moscow" at VDNKh (Exhibition of Achievements of the National Economy). The Planet Sushi brand was launched for the first time in Tajikistan (Dushanbe). The Company intends to continue expanding its business footprint on the domestic market and in CIS countries through partnerships with local businessmen as the brand and local business synergy produces a powerful economic effect.

The results of the first half of the year show that the Company has chosen the right qualitative growth strategy focused on improving the value offer. Further on, it will provide a basis for the accomplishment of the ambitious goals to extend the network, promote restaurant brands, and implement innovative projects".

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FINANCIAL AND OPERATING RESULTS OF THE 1ST HALF OF 2023

(RUB) thousands		6M 2023		6M 2022		% change		p.p.
				change
Revenue	3,325,471	100.0 %	3,280,087	100.0 %	1.4 %	-
Incl. Revenue from restaurants	3,202,844	96.3 %	3,136,088	95.6 %	2.1 %	0.7 %
Incl. Revenue from franchising	81,603	2.5 %	84,375	2.6 %	(3.3)%	(0.1)%
Cost of sales	2,722,058	81.9 %	2,685,195	81.9 %	1.4 %	-
Incl. Food and beverages	677,624	20.4 %	747,935	22.8 %	(9.4)%	(2.4)%
Incl. Payroll and related taxes	673,692	20.3 %	645,034	19.7 %	4.4 %	0.6 %
Incl. Rent	830,840	25.0 %	791,167	24.1 %	5.0 %	0.9 %
Gross profit	603,413	18.1 %	594,892	18.1 %	1.4 %	-
SG&A Expenses	446,635	13.4 %	458,558	14.0 %	(2.6)%	(0.6)%
Start-up expenses for restaurants	7,177	0.2 %	7,033	0.2 %	2.0 %	-
Other gains	5,192	0.2 %	6,430	0.2 %	(19.3)%	-
Other losses	8,275	0.2 %	18,315	0.6 %	(54.8)%	(0.4)%
Incl. Loss on disposal of non-current assets	2,622	0.1 %	7,782	0.2 %	(66.3)%	(0.1)%
Gains from operating activities before	146,518	4.4 %	117,416	3.6 %	24.8 %	0.8 %
impairment
Reversal of impairment of operating assets	23,499	0.7 %	838	-	2705.2 %	0.7 %

Gains from operating activities after impairment

Financial expenses, net

Foreign exchange gain, net

Loss before income tax

Income tax benefit

Net profit

123,019	3.7 %	116,578	3.6 %	5.5 %	0.1 %
282,857	8.5 %	270,075	8.2 %	4.7 %	0.3 %
(13,023)	(0.4)%	58,263	1.8 %	(122.4)%	(2.2)%
(172,861)	(5.2)%		(95,234)	(2.9)%		81.5 %		(2.3)%
(21,911)	(0.7)%	(24,992)	(0.8)%	(12.3)%	0.1 %
(194,772)	(5.9)%		(120,226)	(3.7)%		62.0 %		(2.2)%

EBITDA before impairment and write-offs

266,215

8.0 %

264,965

8.1 %

0.5 %

(0.1)%

The comments to the table are given before the application of IFRS 16 "Leases"

Consolidated revenue increased in the 1st half of 2023 by 1.4% compared with the similar period of 2022 and amounted to RUB 3,325 million; restaurants' revenue grew by 2.1%.

Cost of sales remained the same as in the 1st half of 2022 (the figure is calculated as a percentage of the revenues) and came to 81.9%.

Food costs decreased by 2.4% (the figure is calculated as a percentage of the revenues), mainly thanks to the implementation of a number of supplier relationship management, purchase prices optimization and menu re- engineering measures.

Labour costs increased by 4.4% against the 1st half of 2022, which was due to the need to increase the payroll fund, mainly, for worker occupations, amid the overall personnel crisis in Russia and an especially serious shortage of personnel in public catering.

Lease costs increased in the 1st half of 2023 by 5 percentage points as a result of the increase in the rent rates under lease agreements for airport locations, payments under which depend on the passenger traffic levels. The costs grew also because of the increase in the rent rates under lease agreements with foreign currency- denominated obligations due to changes in the exchange rate of the rouble to other currencies.

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Gross profit margin is at the level of the 1st half of 2022 and accounts for 18.1%. The figure is calculated as a percentage of the revenues.

Restaurant start-upexpenses remained at the level of the 1st half of 2023 and came to RUB 7 million.

Other income remained at the level of the 1st half of 2022 and amounted to 0.2% (the figure is calculated as a percentage of the revenues).

Other expenses decreased against the 1st half of 2022 by 0.4% as a percentage of the revenues, mainly as a result of the reduction of loss from disposal of non-current assets.

Foreign exchange loss amounted in the 1st half of 2023 to RUB 13 million, against RUB 58 million of foreign exchange gains in the 1st half of 2022, which was due to the changes in the exchange rate of the rouble to other currencies.

Loss from reversal of impairment of operating assets amounted in the current period to RUB 24 million, compared with impairment loss of RUB 0.8 million in the 1st half of 2022. Impairment was due to changes in the accounting estimates used to measure the recoverable value of assets in the 1st half of 2023.

Net loss came in the 1st half of 2023 to RUB 195 million against RUB 120 million in the first half of 2022. Loss increased mainly due to the exchange rate differences as a result of fluctuations in the exchange rate of the rouble to other currencies (which increased loss by RUB 75 million).

EBITDA before impairment and write-offs remained at the level for the similar period of 2022, at RUB 266 million.

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1. Revenue in accordance with IFRS is the consolidated revenue of the Rosinter Group calculated in accordance with international financial reporting standards (net of VAT) and includes sales of restaurants and corporate cafes, as well as revenue from sub-lease of premises, revenue from franchising operations and other components.
2. EBITDA is calculated by adding back depreciation and amortization to profit from operating activities after impairment. EBITDA measures are not standard measures under IFRS and should not be considered as an alternative to the net profit, operating profit, operating cash flows or any other standard measures in accordance with IFRS. Our approach to calculating EBITDA may differ from the approach of other companies.

Information in this press release is based on "forward-looking statements", which include all statements other than statements of historical fact. Such forward-looking statements can be often identified by words such as "plans", "believes", "anticipates", "expects", "intends", "estimates", "will", "may", "required", "should" and similar expressions. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's and/or its Management's control that could cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company and/or its Management does not intend and has no duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained herein to reflect any change in events, conditions or circumstances on which any such statements are based. The information and opinions contained in this press release are only valid as at the date hereof and may be subsequently revised without notice of any kind and form.

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Note to Editors:

As at 30 June 2023, Rosinter Restaurants Holding PJSC is a major casual dining restaurant operator in Russia, running 211 retail outlets in 30 cities of Russia and CIS. The chain comprises 119 corporate restaurants and 92 franchised restaurants and cafes. The company develops its own brands IL Patio, Planet Sushi, Shikari, American Bar & Grill, and Mama Russia, and also operates under franchise agreements a chain of TGI FRIDAYS restaurants.

Rosinter Restaurants Holding is listed on the Moscow Exchange MICEX (www.moex.com) under the stock ticker ROST.

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