Detsky Mir To Become the First Russian Company with 100% Free Float

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY LAW

Moscow, Russia – 2 September 2020 – Public Joint Stock Company “Detsky Mir” (the “Company” or “Detsky Mir”), Russia’s largest specialised children’s goods retailer, acknowledges today’s announcement in relation to the pricing of a secondary offering of 184,750,001 Detsky Mir shares (the “Shares”) at a price of RUB 112 per Share by Sistema PJSFC (“Sistema”) and the Russia-China Investment Fund (“RCIF”, established by the Russian Direct Investment Fund and China Investment Corporation) (collectively, the “Selling Shareholders”) (the “Offering”).

Maria Davydova, PJSC Detsky Mir Chief Executive Officer, said:

“It has been three and a half years since Detsky Mir’s IPO – a truly landmark event that defined the Company’s subsequent development. Today we can confidently say that during that period we have fulfilled our promises and delivered solid returns for our shareholders and investors. Our achievements have been significant: the Company has successfully transformed itself into one of the leading omni-channel retailers in Russia, demonstrating high sales growth and profitability.

Now that AFK Sistema is no longer our shareholder, we want to thank it for being such a valuable investment partner for our Company, and for its meaningful help in developing Detsky Mir’s business model and effective corporate governance structure, which established Detsky Mir as a highly successful independently-managed business and laid a solid foundation for its further future prosperity. We wish Sistema’s team continued success in being at the forefront of innovative investment projects across various sectors of the Russian economy, and hope that it always reaches its goals.

We highly appreciate the high investor interest in the shares of our Company, and gladly welcome new foreign and Russian investors that have joined the community of our long term shareholders. This past transaction has been, without a doubt, another landmark event for our Company, as well as the entire Russian equity market, as Detsky Mir will become the first Russian company with a 100% free float[1]. As the Company’s management, we understand the enormous level of responsibility that this status places upon us, and will make our utmost effort to fully achieve the goals we have set for our business.

Our team is fully ready to execute on the recently announced strategic development vectors for the Company. We are backed by our strong brand and millions of customers, for whom we are creating a ecosystem that covers the needs of children, parents and home pets. Detsky Mir will continue to consolidate the children’s goods market via further rollout of its omni-channel business model, expansion of its geographical footprint, strengthening of its federal and regional logistical infrastructure, broadening of its assortment, also by means of development of its own marketplace, as well as by improving customer experience across channels. As we seek to address an ever-widening range of our customers’ needs, we see huge potential in developing digital services for children and parents, as well as bolstering our presence in the pet supplies market. Our goal is to generate high investment returns for our shareholders and make them proud of having invested in Detsky Mir as they share in our common success.”

Prior to completion of the Offering, Sistema had a 20.38% ownership interest and RCIF had a 4.62% ownership interest, respectively, in the Company. Upon the completion of the Offering, Sistema and RCIF will cease to hold any ownership interest in the Company.

The Company will not receive any proceeds from the Offering. The Selling Shareholders’ sale of the Shares will not result in dilution of the Company’s issued and outstanding shares.

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For additional information:

The Detsky Mir Group of Companies (MOEX: DSKY) is a multi-format retailer and the leader in the children’s goods sector in Russia. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 784 Detsky Mir stores located in 303 cities in Russia, Kazakhstan and Belarus, five Detmir Pickup stores, as well as 27 ELC, 3 ABC and eleven Zoozavr stores as of 31 August 2020. The total selling space was approximately 855,000 square meters.

Important Notice:

The information contained herein has been provided solely for use for this announcement. By reading this announcement, you agree to be bound by the limitations set out below. This announcement do not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of any entity, nor shall any part of it nor the fact of its distribution form part of, or be relied on in connection with, any contract or investment decision relating thereto.

Certain statements in this announcement are not historical facts and are forward looking statements. Forward looking statements include statements concerning the Russia-China Investment Fund, Sistema PJSFC (collectively, the “Selling Shareholders”) or PJSC “Detsky mir” (the “Company”), their plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, financial position and future operations and development, the Company’s or the Selling Shareholders business strategy and the trends the Company or the Selling Shareholders anticipate in the industries and the political and legal environment in which the Company or the Selling Shareholders operate and any other information that is not historical information. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward looking statements. Neither the Company nor the Selling Shareholders intend, and assume any obligation, to update any forward looking statement contained herein.

No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company, the Selling Shareholders or any of their respective directors, officers or employees or any other person as to the accuracy or completeness of the information contained in this document and no liability whatsoever is accepted by the Company, the Selling Shareholders or their respective affiliates, advisors, agents, directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any errors or omissions of information or use of such information or otherwise arising in connection therewith.

This document and the information contained herein is for information purposes only and does not constitute or form part of any offer of, or the solicitation of an offer to acquire or dispose of securities in the United States, Canada, Australia or Japan or in any other jurisdiction in which such an offer or solicitation is unlawful. The securities referred to herein (the “Shares”) have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), or under the applicable securities laws of any state or other jurisdiction of the United States, Canada, Australia or Japan. The Shares may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and the securities laws of any relevant state or other jurisdiction of the United States. There will be no public offering of the Shares in the United States.

This document and any offer of securities to which it relates are only addressed to and directed at (1) in any Member State of the European Economic Area, persons who are “qualified investors” as defined in Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”); and (2) in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”); (ii) fall within Article 49(2)(a) to (d) of the Order; or (iii) are persons to whom an offer of the Shares may otherwise lawfully be made (all such persons referred to in (1) and (2) together being referred to as the “Relevant Persons”). The information regarding the offering set out in this document must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

This document is not an offer or an invitation to make offers or an advertisement of securities in the Russian Federation.

[1] Excluding quasi-treasury shares and shares held by management and directors