Completion of the transformation of Detsky Mir into a private business

THIS PRESS RELEASE AND INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR TO ANY PERSON IN, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.

20 September 2023, Moscow, Russia. Detsky Mir Group (“Detsky Mir”, “PJSC Detsky Mir” or the “Company”, MOEX: DSKY), a specialised retailer and the leader in the children’s goods sector in Russia and Kazakhstan, informs that the transformation into a private business, announced back in November 2022, was completed.

The Company’s subsidiary, JSC DMFA, consolidated 58.26% of the voting shares of PJSC Detsky Mir (hereinafter referred to as the “Shares”), including the Shares, owned by its affiliates, based on the results of the share repurchase programs of PJSC Detsky Mir, announced in May 2023.

According to the terms of the Voluntary Tender Offer of JSC DMFA, repurchased Shares also could have been paid with other securities: shares of JSC DMC (owns 100% of shares in the non-public operating company LLC DM, spun off from PJSC Detsky Mir in May 2023). Thus, the shareholders of PJSC Detsky Mir, who accepted the Voluntary Tender Offer of JSC DMFA with an option to receive other securities (shares of JSC DMC) as an alternative to cash payments purchased 100% of Shares of JSC DMC and effectively, got the full control over the operating company LLC DM.

Next steps regarding shares of PJSC Detsky Mir

JSC DMFA will send a public offer to shareholders of PJSC Detsky Mir to repurchase Shares (hereinafter referred to as the “Mandatory Tender Offer”) with potential size of the offer up to 100% of the remaining outstanding Shares.

The price per ordinary Share in the Mandatory Tender Offer will not be lower than:

1) The weighted average price per Share, which is based on the results of organized trading for the six months preceding the date of submission of the Mandatory Tender Offer to the Central Bank of Russia; and

2) The highest price at which JSC DMFA and its affiliates repurchased the Shares during the six months preceding the date of sending the Mandatory Tender Offer to PJSC Detsky Mir.

Given the completed share repurchase programs of PJSC Detsky Mir announced in May 2023, it is expected that during the Mandatory Tender Offer price per ordinary Share will not be lower than 71.5 rubles per Share.

As previously reported, in accordance with a permission from the sub-committee of the Government Commission for Control over Foreign Investments in the Russian Federation (hereinafter referred to as “the Government Commission”), as part of the Mandatory Tender Offer, non-resident investors from unfriendly countries[1] and persons under their control who will participate in the Mandatory Tender Offer will be able to receive cash payments for the Shares sold only to C-type accounts.

The Company recaps that participation in the Mandatory Tender Offer is a right and not an obligation for shareholders. Shareholders can independently decide to participate in the Mandatory Tender Offer, taking into account the Company’s publicly announced plans, their own investment strategy and current market conditions.

It is expected that after the completion of the Mandatory Tender Offer, the Company may be liquidated, subject to the necessary corporate approvals. In this case, all remaining shareholders who, for one reason or another, do not take part in the offer to sell the Shares prior to such liquidation, will be able to receive the property of the liquidated company remaining after the completion of settlements with creditors (liquidation value) as part of the voluntary liquidation of PJSC Detsky Mir on a pro rata basis. The Company’s shares will be cancelled in this case.

The Company underscores that the liquidation value per Share that the Company’s shareholders will receive in the event of its voluntary liquidation may be lower than the price per Share acquired by JSC DMFA during the Mandatory Tender Offer.

The Company plans to request authorization from the Ministry of Finance of the Russian Federation to remit payments in cash, remaining after settlements with creditors during liquidation, for shares of non-resident investors from unfriendly countries to their respectively indicated accounts by bypassing C-type accounts. Should such authorization be granted, the shareholders may use the funds at their own discretion and no additional approval from the Russian regulator will be needed.

IMPORTANT INFORMATION

This announcement does not constitute a public offer, advertisement or a voluntary or mandatory tender offer under Russian law.

This announcement may contain forward-looking statements concerning the Company. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “plan”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to business and management strategies of the Company. Many of these risks and uncertainties relate to factors that are beyond the Company’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements, which speak only as at the date of this announcement. The Company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.

[1] The list of unfriendly countries is set in accordance with the Decree of the Government of the Russian Federation No. 430-r dated March 5, 2022

For additional information:

Nikita Moroz
Investor Relations Director
Tel.: + 7 495 781 08 08, ext. 2315
NMoroz@detmir.ru

Detsky Mir’s GMV Increased by 11.6% in Q2 2022

Moscow, Russia, 19 July 2022 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), an omnichannel digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its operating results for the second quarter ended 30 June 2022.

Q2 2022 Operating Highlights

The Group’s gross merchandise value (GMV) increased 11.6% to RUB 46.7 bn (incl. VAT).
The Group’s total online sales grew 7.3% to RUB 12.7 bn (incl. VAT):
- The share of online sales in Russia reached 27.9%.
The Group’s net revenue increased 10.5% to RUB 41.3 bn.
Sales of private labels and direct imports in Russia came in at 56.7% of total sales (up 8.8 p.p.).
The mobile app’s monthly active users (MAU) grew 29.0% to 4.0 million.
Total marketplace sales in Russia increased 140.5% to RUB 1.4 bn (incl. VAT):
- The marketplace’s share in total online sales in Russia was 11.0%.
The total number of Group stores amounted to 1,123 (up 194 stores year-on-year) across 442 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased 6.5% year-on-year to 981,000 sq. m.
Total warehouse space was 238,000 sq. m.

H1 2022 Operating Highlights

The Group’s GMV increased 9.7% to RUB 89.3 bn (incl. VAT).
The Group’s total online sales grew 13.4% to RUB 25.8 bn (incl. VAT):
- The share of online sales in Russia reached 29.9%.
The Group’s net revenue increased 8.3% to RUB 79.2 bn.
Sales of private labels and direct imports in Russia came in at 51.0% of total sales.
The net increase in the Group’s store count was four stores.

Q2 2022 Key Events

Between March and May 2022, the share of private labels in sales at Detsky Mir increased across several categories. The share of private labels in diaper sales more than doubled year-on-year to 33.2% (+19.4 p.p. compared to the same three-month period last year). In toys, private labels grew 9.6 p.p. to 40% year-to-date, while in apparel and footwear they accounted for 98.8% of revenue, a 1.6 p.p. increase year-to-date. In pet supplies, the share of the Company’s private labels, launched just this year, was 10.1%.
An option for payment via the Faster Payments System (FPS) is now available at more than 900 of our branded stores across all Russian cities within the Group’s footprint. The wide range of partner banks makes the FPS payment option available all across Russia. An FPS online payment service will soon also be available on detmir.ru.

ESG Highlights

The Detsky Mir Charitable Foundation launched a new project to support families – the Kids Card, which is aimed at families facing difficulties, from those with many children, to those raising children with disabilities, as well as single-parent families. The neediest families receiving support from social protection agencies in the Krasnoyarsk and Altai Territories, the Republic of Mari El, the Karachayevo-Circassian Republic, and the Kabardino-Balkarian Republic, as well as the Kurgan Region, were all issued a Kids Card with a face value of RUB 5,000 per child under 18.
Moya Goroshinka, Detsky Mir’s private label collection of apparel for newborns was recognized as the Product of the Year and received the ECO BEST independent public award for the best environmental and resource-saving products and practices.
Appreciating Every Night, a joint initiative of the Detsky Mir Charitable Foundation (part of Detsky Mir Group) and Kimberly-Clark Corporation, won the annual Best Social Projects in Russia program, the country’s largest corporate social responsibility-themed event.
Detsky Mir worked with Meine Liebe to launch a charity campaign to furnish orphanages with home accessories, helping teach children in their care to adapt to independent life.

Maria Davydova, CEO of PJSC Detsky Mir:

“In the first half of 2022, despite high levels of uncertainty in the retail industry and the wider Russian economy, the Group delivered strong operational results with GMV rose 9.7% to RUB 89.3 billion, while GMV for Q2 2022 grew 11.6% and reached RUB 46.7 billion. We also expect an increase in operating profit (adjusted EBITDA) for the period.

Responding to the challenges of the first half of 2022, we optimized our logistic routes while continuing to work on improving related processes. We also maintain our focus on selecting and adding products from new suppliers to our product mix to mitigate the potential risk of certain brands leaving the Russian market. At the same time, the Company implements strategic initiatives to increase the share of private labels and direct imports in total sales in Russia, which reached 56.7% in the second quarter of 2022 (up 8.8 p.p. year-on-year).

We continue implementing our key digital projects and promoting our online channels. For example, the marketplace’s contribution to the Group’s GMV rose to a record high of 11.0% of the Group’s total online sales in Russia (up 6.1 p.p. year-on-year). Total marketplace sales in Russia soared 140.5% year-on-year to RUB 1.4 billion. Detsky Mir’s online assortment has increased to 902,000 unique SKUs over the year.

We have noted a moderate overall recovery in consumer confidence in the second quarter of 2022, yet will continue to factor in the ongoing high uncertainty around key macro indicators in the second half of 2022 when making both operational and investment decisions.”

View the full press release

Detsky Mir Increased the Share of Private Labels Across Several Categories

Moscow, Russia, 23 June 2022 – Detsky Mir Group, an omnichannel digital retailer and the leader in the children’s goods sector in Russia, posts growth in the sales of private labels across several categories.

Over the course of the period from March to May 2022, the share of private labels in sales at Detsky Mir increased across several categories. The share of private labels in diapers category more than doubled year-on-year and reached 33.2% (+19.4 p.p. compared to the same three-month period last year). In toys, private labels grew 9.6 p.p. to 40% year-to-date, while in apparel and footwear they accounted for 98.8% of revenue, a 1.6 p.p. increase year-to-date. The share of the Company’s private labels in pet supplies, launched in the first half of 2022, reached 10.1%.

Higher sales volumes of private labels were driven by shifting consumer demand, with consumers looking for goods with the best value-for-money, coupled with an expansion of the Company’s exclusive brand range.

Detsky Mir currently owns 18 exclusive brands in apparel and footwear (including Chessford and Futurino), five toy brands (e.g. Demi Star and Mobicaro) and two private labels in diapers (Manu and BabyGo). In the first half of 2022, seven new brands with over 600 SKUs between them hit the shelves of Zoozavr pet supplies stores. Each of Detsky Mir’s private labels has its own target audience and price positioning.

“Private label development is an important strategic area for Detsky Mir Group. Each year, we expand the range of our private-label brands to keep prices competitive and offer our customers a wide choice of the most popular products. We currently see strong growth in sales of our exclusive brands. In the first quarter of 2022, sales of private labels and direct imports in Russia accounted for 44.8% of total sales (+4.3 p.p. year-on-year), and we have seen this positive momentum sustained in the second quarter as well,” said Elvira Kakurkina, Commercial Director for Consumer Goods at Detsky Mir Group.

For additional information:

Natalya Rychkova

Head of Public Relations

+7 495 781 0808, ext. 2041

NRychkova@detmir.ru

Nikita Moroz

Head of Investor Relations

Tel.: + 7 495 781 08 08, ext. 2315

NMoroz@detmir.ru

Detsky Mir Announces Annual General Meeting of Shareholders

Moscow, Russia, 30 May 2022. – Detsky Mir Group, an omni-channell retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces that it will convene an Annual General Meeting of Shareholders (AGM).

The Board of Directors of Detsky Mir Group (“Detsky Mir” or the “Company”, MOEX: DSKY) resolved at the meeting of 26 May 2022 to convene an AGM to be held by absentee voting, with the voting ballots accepted until 30 June 2022. The record date for the AGM was set on 6 June 2022.

Following a period of exceptional volatility in the markets where the Сompany operates, the Board of Directors made a recommendation to AGM to forego a distribution of a final dividend for FY 2021. In the course of 2021, the Сompany already paid an interim dividend of RUB 3.8 bn or RUB 5.20 per ordinary share. In addition, in January 2022 the Board approved a launch of a buyback program of RUB 3.5 bn. The Board’s decision was informed by market volatility and desire to maintain sufficient financial resources to further Company’s competitive position and take advantage of new growth opportunities. Detsky Mir’s dividend policy remains unchanged.

The AGM agenda will also include the approval of Detsky Mir’s 2021 Annual Report, the approval of Detsky Mir’s 2021 annual accounting statements, including the statement of profit and loss, election to the Board of Directors, the approval of the new version of the Company’s Articles of Association, and the approval of the Company’s auditor.

AGM materials will be made available from 8 June 2022 upon request to the Company’s Corporate Secretary Office at: 3 Third Nizhnelikhoborsky Proezd, Bld. 6, Moscow, 127238, Russia and on Detsky Mir’s website https://ir.detmir.ru/general-meeting-of-shareholders.

Those entitled to attend Detsky Mir’s AGM will be able to fill in the electronic ballot form and vote online at aoreestr.ru

For additional information:

Natalya Rychkova

Public Relations Director

+7 495 781 0808, ext. 2041

NRychkova@detmir.ru

Ekaterina Mitkina

Investor Relations Manager

Tel.: + 7 495 781 0808, ext. 2315

EAMitkina@detmir.ru

Detsky Mir Increased GMV by 7.6% in Q1 2022. EBITDA Came in at RUB 2.6 bn

Moscow, Russia, 16 May 2022. Detsky Mir Group (“Detsky Mir” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the first quarter ended 31 March 2022.

Q1 2022 Operating Highlights

The Group’s gross merchandise value (GMV) increased 7.6% to RUB 42.7 bn (incl. VAT).
The Group’s total online sales grew 19.9% to RUB 13.1 bn (incl. VAT):
- The share of online sales in Russia reached 32.0%.
The Group’s net revenue increased 6.1% to RUB 37.9 bn.
Gross profit increased 8.3% to RUB 11.4 bn.
- Gross margin was 30.2%.
Selling, general, and administrative (SG&A) expensesas a percentage of revenue increased 2.2 p.p. to 23.2%.
EBITDA fell 9.8% to RUB 2.6 bn.
Adjusted profit before tax came in at RUB 1.1 bn.
The net debt/EBITDA LTM ratio stood at 1.7x. Net debt was RUB 31.2 bn.
Sales of private labels and direct imports in Russia totaled 44.8% of total sales.
The Company opened 8 new stores:3 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 2 Detmir stores in Belarus, and 1 Zoozavr store.
The total number of Group stores amounted to 1,125 (up 245 stores year-on-year) across 447 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased 8.9% year-on-year to 982,000 sq. m.
Total warehouse space was 238,000 sq. m.

Q1 2022 Key Events

Detsky Mir launched a new distribution center in PNK Park Berezovsky, a Class A+ industrial park near Yekaterinburg. With 63,000 sq. m of floor space and a design capacity of 2.4 million SKUs, the distribution center will support the smooth delivery of goods to Detsky Mirchain stores and next-day deliveries of at least 80% of all online orders across the Ural Federal District. Goods destined for the Russian Far East and Kazakhstan will also be handled by the center. The distribution center’s throughput is expected to be over 35,000 orders per day. The launch of the new warehouse facility will also create 1,000 new jobs for local communities.
The Company cut the prices of essential goods to make them as affordable as possible. Items include baby and toddler food, baby hygiene products, baby feeding supplies, and a selection of items from our apparel and footwear category. The total list of these essential goods encompasses about 90 SKUs from the Detsky Mir product assortment.
Detsky Mir automated its transport management processes. The Company announced the introduction of a carrier web portal that integrates with its in-house automated Transport Management System (TMS), unlocking streamlined management of transport processes and monitoring at all stages.
The rating agency RAEX (Expert RA) affirmed Detsky Mir’s credit rating at ruAA- with a stable outlook.
The Company announced the launch of an open market buyback program for its ordinary shares listed on the Moscow Exchange totaling up to RUB 3.5 bn over a period until 9 August 2022 unless extended or terminated by the Company earlier.

ESG Highlights

The Detsky Mir Charitable Foundation announced the 2021 results of its key campaigns: “Uchastvuyte!” (“Participate!”) and “Uyut v Priyut” (“Comfort to Shelters”). Over the reporting period, the Foundation collected and donated more than RUB 1 bn worth of goods.
Detsky Mir teamed up with the World Wildlife Fund (WWF) to design and launch a limited collection of T-shirts and sweatshirts for 2 to 6 year olds that feature images of vulnerable species of animals that can be found in Russia, including the bowhead whale, snow leopard, polar bear, sea otter, oriental stork, as well as the symbol of the WWF – the panda. All garments in the collection are made using Better Cotton Initiative-certified cotton.
Detsky Mir and Dmitrov RTI Plant, Russia’s largest recycling plant, announced the results of their 2021 campaign The New Life of Your Unwanted Clothes and Shoes and Its Benefits for You. In the reporting year, 2.7 tonnes of waste from shoe and textile manufacturing were collected and handed over for recycling.

Maria Davydova, CEO of PJSC Detsky Mir:

“At Detsky Mir, we are more than just the industry leader – we are a systemically important company that plays a socially significant role of providing children with essential food and non-food goods. No matter what happens, we remain focused on our number one objective – protecting the interests of our customers and providing a wide range of the goods they need at affordable prices across all regions of operation.

The first quarter of 2022 turned out to be a challenging one for Detsky Mir and the market more broadly. Despite macroeconomic turbulence, the Company managed to boost gross merchandise value by 7.6% and digital sales by 19.9%. The share of online sales in Russia reached 32% in Q1 2022, with the marketplace’s share of online sales more than doubling to 8.7%. This strong growth of the marketplace has enabled the Company to expand its product range and improve the customer experience, all while optimizing its inventory investment. We continue to invest in logistics infrastructure, unlocking further growth for our digital channel.

We continue to push private labels across all categories, maintaining our strong focus on the transition to direct import contracts to provide the best price guarantee to our customers. In Q1 2022, the share of private labels and direct imports stood at 44.8% of total sales, up 4.3 p.p. year-on-year.

In the first quarter, our core focus was on ensuring uninterrupted operations, keeping a wide range of products at affordable prices on our shelves and online, and streamlining operating costs. We are doing everything we can to overcome the challenges facing us.

The Company is committed to a strong financial discipline, ensuring that its financial position remains stable. As at quarter-end, our net debt/EBITDA ratio remained at a comfortable 1.7x.

Despite the challenging macroeconomic environment, we are confidently looking to the future and are keeping our focus on further consolidation of the market.”

View the full press release

Detsky Mir’s GMV Increases 7.6% in Q1, with Online Sales Growing 19.9%

Moscow, Russia, 19 April 2022 – Detsky Mir (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its operating results for the first quarter ended 31 March 2022.

Q1 2022 Operating Highlights

The Group’s gross merchandise value (GMV) increased 7.6% to RUB 42.7 bn (incl. VAT).
The Group’s total online sales grew 19.9% to RUB 13.1 bn (incl. VAT):
- The share of online sales in Russia reached 32.0%.
The Group’s net revenue increased 6.1% to RUB 37.9 bn.
Sales of private labels and direct imports in Russia totaled 44.8% of total sales.
The Company opened 8 new stores:3 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 2 Detmir stores in Belarus, and 1 Zoozavr store.
The total number of Group stores amounted to 1,125 (up 27.8% year-on-year) across 447 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased 8.9% year-on-year to 982,000 sq. m.
Total warehouse space was 238,000 sq. m.

Q1 2022 Key Events

Detsky Mir launched a new distribution center in PNK Park Berezovsky, a Class A+ industrial park near Yekaterinburg. With 63,000 sq. m of floor space and a design capacity of 2.4 million SKUs, the distribution center will support the smooth delivery of goods to Detsky Mirchain stores and next-day deliveries of at least 80% of all online orders across the Ural Federal District. Goods destined for the Russian Far East and Kazakhstan will also be handled by the center. The distribution center’s throughput is expected to be over 35,000 orders per day. The launch of the new warehouse facility will also create 1,000 new jobs for local communities.
The Company cut the prices of essential goods to make them as affordable as possible. Items include baby and toddler food, baby hygiene products, baby feeding supplies, and a selection of items from our apparel and footwear category. The total list of these essential goods encompasses about 90 SKUs from the Detsky Mir product assortment.
Detsky Mir introduced a range of temporary support measures for its suppliers. Amid increased consumer demand and supply chain difficulties, the Company has suspended its penalty system for under-deliveries and also reduced its review period for suppliers’ new prices to five working days until the end of April 2022.
Detsky Mir has automated its transport management processes. The Company announced the introduction of a carrier web portal that integrates with its in-house automated Transport Management System (TMS), unlocking streamlined management of transport processes and monitoring at all stages.
The rating agency RAEX (Expert RA) affirmed Detsky Mir’s credit rating at ruAA- with a stable outlook.
Detsky Mir Group named Georgy Kononov as its New Chief Operating Officer. Georgy will oversee the ongoing development of the Group’s various store formats and sales channels, and be responsible for increasing space productivity, introducing state-of-the-art technologies, and accelerating our digital transformation.
Elvira Kakurkina was appointed as the new Commercial Director for Consumer Goods at Detsky Mir Group. Elvira will be responsible for managing procurement and assortment, developing category strategies, defining our assortment policy, overseeing pricing and promotions, and expanding the Company’s market share across a range of categories, including newborn products (food, diapers, large-size products, and hygiene products), toys, sports, and stationery.
Detsky Mir celebrated five years since its IPO on the Moscow Exchange. In February 2017, Detsky Mir held a successful IPO on the Moscow Exchange, a move that played a pivotal role in the Company’s corporate development and that was Russia’s first major market transaction targeting international investors since 2014. Since the IPO, the Group’s Gross Merchandise Value (GMV) has more than doubled from RUB 88.7 billion to RUB 184.3 billion.
In a bid to grow its digital product offering, Detsky Mir has published its first mobile game aimed at children. Risovashka is a mobile app that lets users bring children’s drawings to life as cartoons. The app fosters creative thinking and imagination among children, all while cutting down screen time. Over 80 different stories are currently available on the app.
The Company announced the launch of an open market buyback program for its ordinary shares listed on the Moscow Exchange totaling up to RUB 3.5 billion over a period until 9 August 2022 unless extended or terminated by the Company earlier.

ESG Highlights

The Detsky Mir Charitable Foundation announced the 2021 results of its key campaigns: “Uchastvuyte!” (“Participate!”) and “Uyut v Priyut” (“Comfort to Shelters”). Over the reporting period, the Foundation collected and donated more than RUB 1 billion worth of goods.
The Company sent goods to the Kaluga-based homeless animal shelter “Podari Zhizn” (“Gift of Life”). At the beginning of March 2022, the Detsky Mir Charitable Foundation donated more than 1,500 items to Podari Zhizn, including food and items needed to furnish and insulate animal enclosures. The donation was worth over RUB 1.8 million.
The Detsky Mir chain and the Meine Liebe household chemicals brand launched a learning club for children’s sustainability influencers. In a series of 10 sessions held over 3 months, the free learning club will cover the basics of social media presence and activity, digital security, creating thoughtful content, choosing different techniques, and other important details, as well as the importance of developing various social skills, from finding topics to cover and persuading and working your audience, to appearing in front of a camera and being flexible to feedback and external changes.
Detsky Mir launched a book recycling project at its stores in Krasnodar. The pilot project will see books collected at 11 Detsky Mir stores in Krasnodar until 30 April 2022, with all books collected to be sent for recycling. A decision on further expanding the initiative will be made based on the pilot project’s performance.
Detsky Mir teamed up with the World Wildlife Fund (WWF) to design and launch a limited collection of T-shirts and sweatshirts for 2 to 6 year olds that feature images of vulnerable species of animals that can be found in Russia, including the bowhead whale, snow leopard, polar bear, sea otter, oriental stork, as well as the symbol of the WWF – the panda. All garments in the collection are made using Better Cotton Initiative-certified cotton.
Detsky Mir and Dmitrov RTI Plant, Russia’s largest recycling plant, announced the results of their 2021 campaign The New Life of Your Unwanted Clothes and Shoes and Its Benefits for You. In the reporting year, 2.7 tonnes of waste from shoe and textile manufacturing were collected and handed over for recycling.

Maria Davydova, CEO of PJSC Detsky Mir:

“The first quarter of 2022 was marked by serious challenges for the Company, the retail sector and the broader Russian economy – our key market. Forex volatility, a significant acceleration in inflation, supply chain disruptions, the rising cost of debt, announcements that suppliers would cut back or outright terminate operations in Russia, compounded by many other factors, forced us to act swiftly and decisively to seek a way out of any situation that arose. Thanks to many years of experience and a wealth of accumulated knowledge, on top of the Company’s business flexibility, Detsky Mir successfully adapted its business processes to the rapidly-changing conditions.

The Group’s GMV rose 7.6% in Q1 2022 to reach RUB 42.7 billion. We observe a slowdown in sales growth on the back of the ongoing coronavirus pandemic, coupled with challenging macroeconomic conditions and changing consumer behavior in Russia. However, protecting the interests of our customers and providing a wide range of the goods they need at affordable prices across all regions of operation remain top of mind for us in any market. We cut the prices of essential goods to make them as affordable as possible, including baby and toddler food, diapers, and children’s apparel and footwear. We have also decided to halt our capex program in a highly uncertain macroeconomic environment.

Amid the ongoing coronavirus pandemic and supported by the Company’s assortment expansion and high order processing speeds, online sales enjoyed further growth in popularity in the first quarter. In the reporting period, digital sales were up 19.9% year-on-year, with the total share of online sales reaching 30.7%. We will continue working towards achieving our 2020–2024 strategy’s target share of online sales.

Amid changing consumer behavior, the development of an exclusive offering at affordable prices remains an important focus for us. In Q1 2022, sales of private labels and direct imports in Russia totaled 44.8% of total sales (up 4.3 p.p. year-on-year). During the reporting period, we launched a range of private labels in the pet supplies segment, which have already received great feedback from consumers, and we have continued to develop our existing private labels in the children’s goods segment.

In the current highly uncertain environment, our main objective remains to ensure smooth business operations while making sure we meet all our obligations to customers and partners in a timely manner. We maintain our focus on further consolidating the market, developing our private labels and delivering strong performance both offline and online.”

View the full press release

Detsky Mir Grows its Share of Online Sales to 36% in Q4 2021

Moscow, Russia, 15 March 2022 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the fourth quarter of 2021 (Q4 2021) and its audited consolidated financial results in accordance with IFRS for the full year ending 31 December 2021 (FY 2021).

Q4 2021 Financial Highlights

The Group’s gross merchandise value (GMV) increased 8.5% to RUB 53.3 bn (incl. VAT).
Total online sales in Russia grew 33.2% to RUB 18.9 bn (incl. VAT):
- The share of online sales in Russia reached 37.4%.
The Group’s revenue increased 6.3% to RUB 47.3 bn.
Gross profit increased 1.4% to RUB 14.0 bn
- Gross margin was 29.7%
SG&A as a percentage of revenue increased 2.2 p.p. to 20.2%.
Adjusted EBITDA fell 21.8% to RUB 4.7 bn
- Adjusted EBITDA margin reached 9.8%
EBITDA totaled RUB 4.6 bn (–18.3% year-on-year).
Adjusted net profit amounted to RUB 2.4 bn; net profit totaled RUB 2.3 bn.
The net debt/adjusted EBITDA LTM ratio stood at 1.4x. Net debt was RUB 25.0 bn.
Sales of private labels and direct imports in Russia totaled 42.7% of total sales.
The Company opened 105 new stores: 33 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 1 Detmir store in Belarus, 27 Detmir Mini stores, and 42 Zoozavr stores.
The total number of Group stores amounted to 1,119 (+28.9% year-on-year) across 445 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased 9.3% year-on-year to 981,000 sq. m.
Total warehouse space was 175,000 sq. m.

FY 2021 Financial Highlights

The Group’s GMV increased 16.9% to RUB 184.3 bn (incl. VAT)
Total online sales in Russia increased 39.1% to RUB 54.0 bn (incl. VAT)
- The share of online sales in Russia reached 30.8%
The Group’s revenue increased 15.0% to RUB 164.3 bn
Gross profit increased 14.7% to RUB 50.4 bn
- Gross margin was 30.7%
SG&A as a percentage of revenue increased 1.0 p.p. to 19.9%
Adjusted EBITDA grew 6.2% to RUB 18.0 bn
- Adjusted EBITDA margin reached 11.0% (–0.9 p.p. year-on-year)
EBITDA totaled RUB 18.8 bn (+15.6% year-on-year)
Adjusted net profit for the period came in at RUB 10.3 bn (+23.8% year-on-year); net profit totaled RUB 11.2 bn.
Sales of private labels and direct imports in Russia totaled 46.2% of total sales (+1.7 p.p. year-on-year).
The Company opened 251 new stores: 72 Detsky Mir branded stores in Russia, 4 Detsky Mir stores in Kazakhstan, 8 Detmir stores in Belarus, 94 Detmir Mini stores, and 73 Zoozavr stores.

Q4 2021 Key Events

Detsky Mir shareholders approved an interim dividend of RUB 3,842,800,000 for 9M 2021, or RUB 5.20 per ordinary share. The dividend amounted to 60% of the adjusted RAS profit for 9M 2021.¹⁰ The dividend payout for 2021 will total RUB 8.3 bn, up about 7% compared to that for 2020.
The Company launched its third regional distribution center in the Novosibirsk Region. The fulfillment center, hosted by Russian Post, will ensure next-day delivery of at least 80% of online orders to Detsky Mir customers in the Siberian Federal District. At the fulfillment warehouse, Russian Post will be able to store simultaneously up to 200,000 SKUs from Detsky Mir’s product assortment, while shipping up to 90,000 online orders per month. The center will be able to handle goods of all categories, from diapers and toys to children’s furniture, strollers, and pet supplies.
Black Friday brought in more than 1.5 million orders for Detsky Mir. Over the course of the event, more than 1.5 million orders were placed on our online store and mobile app, generating a total of RUB 3 bn. The biggest discounts were available from 6:00 pm on 25 November until 11:59 pm on 26 November, when more than 450,000 orders were placed for a total of more than RUB 930 m, up 37% from 2020.
The Global Shopping Day set a number of online sales records for Detsky Mir. At the sale’s peak on 11 November, 273,000 orders were placed via our online platform and marketplace for a total of RUB 570 m – a 63% increase on last year’s event. At the same time, the range of products on offer topped 320,000 SKUs, with over 80% of our marketplace sellers taking part in the sales event, and the order processing speed reaching 18,000 fulfillments per hour.
Detsky Mir opened its milestone 900th branded store and its 100th Detmir Mini store. The new branded store with floor space of more than 1,200 sq. m is located in a shopping mall in Krasnokamensk. The milestone small-format Detmir Mini store with floor space of 167 sq. m opened in Novovoronezh.
Detsky Mir celebrated 10 years of operating in Kazakhstan. Over the past five years, the Company has expanded its presence in the country more than sixfold, growing the chain from 7 to 45 stores, with the current floor space totaling 40,000 sq. m.
Detsky Mir won silver on Russia’s Best Employers List by Forbes and KPMG. In the third ranking of the country’s top employers, which rated 104 companies, Forbes and KPMG focused on corporate ESG practices.
The IR team at Detsky Mir Group was recognized as Russia’s best: the Company was placed top in the Best Corporate by Small Cap IR Russia 2021 category.
The Detsky Mir flagship store in the MEGA Teply Stan shopping mall earned a finalist finish in the Global Retail Real Estate Awards, an annual international industry award to celebrate achievements in retail and retail real estate.
Detsky Mir won one of the most prestigious professional awards in e-commerce and omnichannel, Large Turnover 2021, in the Breakthrough of the Year category and was a finalist of its Grand Prix.
Detsky Mir’s marketplace was recognized as the best niche marketplace in 2021 according to ECOM AWARDS, an e-commerce and retail professional award launched this year.

Key Events After the Reporting Date

Detsky Mir opened a new distribution center in Yekaterinburg. With 63,000 sq. m. of floor space and a design capacity of 2.4 million SKUs, the new distribution center will support delivery of goods to Detsky Mirchain stores and next-day deliveries of at least 80% of all online orders across the Ural Federal District. Goods destined for the Russian Far East and Kazakhstan will also be handled by the center.
The Company announced the launch of an open market buyback program of its ordinary shares listed on the Moscow Exchange totaling up to RUB 3.5 bn over a period until 9 August 2022 unless extended or terminated by the Company earlier.

ESG Highlights

In December, the Detsky Mir Charitable Foundation, part of Detsky Mir Group, announced that it would work with the Stolitsa Miloserdia Charitable Foundation, Pharmeco Group, and MC Intermark Auto to donate items to orphans and children from large and low-income families in St. Petersburg and the Novosibirsk Region. The donations, worth over RUB 6 m, included goods that children need: hygiene products, toys, apparel, furniture, strollers, and sporting goods.
The Detsky Mir Charitable Foundation and Kimberly-Clark’s Huggies brand launched their first joint charity campaign – Appreciating Every Night. The initiative is aimed at helping children in hospices or palliative care units of hospitals.
Three thousand customers of the Zoozavr chain took part in a campaign to help homeless pets. More than 890 kg of pet food and treats for dogs and cats were collected, as well as over 150 items of essential goods, including hygiene products, toys, and pads.

Maria Davydova, CEO of PJSC Detsky Mir:

“Dear shareholders, colleagues, customers and partners,

We have successfully overcame the challenges and difficulties that defined 2021. Working in a complex epidemiological, economic and operating environment, we have only become tougher and more united. Detsky Mir has learned to be flexible while staying resilient. We have successfully adapted to a dynamically changing environment, redefined our processes, including logistics, and thus gained an extensive experience of operating in an uncertain market.

Detsky Mir delivered solid financial performance in 2021, with revenue up 15% to RUB 164.3 bn. Effective pricing, together with product range expansion and rapid order fulfillment, helped drive a 34.7% increase in online store sales in Q4 2021, while the online segment made up a record 36.1% of Group sales.

As 2022 unfolds, all Russian businesses, including us, are facing new major challenges. We are leveraging our years of experience and our expertise to safeguard the interests of our shareholders and partners, and we will do our best to maintain a vast assortment of reasonably priced goods our customers need across our footprint. Detsky Mir’s retail stores and online platforms are operating as normal, and we are doing our best to ensure the continued smooth operation of our supply chain.

Detsky Mir’s financial position remains strong, thanks to discipline and the Company’s ability to generate substantial operating cash flow. Our net debt/adjusted EBITDA ratio sat at a comfortable 1.4x as of year-end 2021, all while we continued to deliver on our investment program.

In the current highly uncertain environment, our main objective remains to ensure business continuity while making sure we meet all our obligations to customers and partners in a timely manner. We decided to cancel our management conference call, where we were supposed to discuss the Company’s FY 2021 financial performance due to the constantly changing market conditions. At the same time, we will be happy to answer any questions you might have.”

View the full press release

Detsky Mir’s GMV Increases 16.9% in 2021

Moscow, Russia, 25 January 2022. Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its operating results for the fourth quarter and twelve months ended 31 December 2021.

Q4 2021 Operating Highlights

The Group’s gross merchandise value (GMV) increased 8.5% to RUB 53.3 bn (incl. VAT).
Total online sales in Russia grew 33.2% to RUB 18.9 bn (incl. VAT):
- The share of online sales in Russia reached 37.4%.
The Group’s net revenue increased by 6.3% to RUB 47.3 bn.
Sales of private labels and direct imports in Russia totaled 42.7% of total sales.
The Company opened 105 new stores: 33 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 1 Detmir store in Belarus, 27 Detmir Mini stores, and 42 Zoozavr stores.
The total number of Group stores amounted to 1,119 (+28.9% year-on-year) across 445 cities and towns in Russia, Kazakhstan, and Belarus.
The Group’s total selling space increased 9.3% year-on-year to 980,000 sq. m.
Total warehouse space was 175,000 sq. m.

FY 2021 Operating Highlights

The Group’s GMV increased 16.9% to RUB 184.3 bn (incl. VAT).
Total online sales in Russia increased 39.1% to RUB 54.0 bn (incl. VAT):
- The share of online sales in Russia reached 30.8%.
The Group’s net revenue increased by 15.0% to RUB 164.3 bn.
Sales of private labels and direct imports in Russia totaled 46.2% of total sales (+1.7 p.p. year-on-year).
The Company opened 251 new stores: 72 Detsky Mir branded stores in Russia, 4 Detsky Mir stores in Kazakhstan, 8 Detmir stores in Belarus, 94 Detmir Mini stores, and 73 Zoozavr stores.

Q4 2021 Key Events

Detsky Mir shareholders approved an interim dividend of RUB 3,842,800,000 for 9M 2021, or RUB 5.20 per ordinary share. The dividend amounted to 60% of the adjusted RAS profit for 9M 2021. The dividend payout for 2021 will total RUB 8.3 bn, up about 7% compared to that for 2020.
The Company launched its third regional distribution center in the Novosibirsk Region. The fulfillment center, hosted by Russian Post, will ensure next-day delivery of at least 80% of online orders to Detsky Mir customers in the Siberian Federal District. At the fulfillment warehouse, Russian Post will be able to store simultaneously up to 200,000 SKUs from Detsky Mir’s product assortment, while shipping up to 90,000 online orders per month. The center will be able to handle goods of all categories, from diapers and toys to children’s furniture, strollers, and pet supplies.
Black Friday brought in more than 1.5 million orders for Detsky Mir. Over the course of the event, more than 1.5 million orders were placed on our online store and mobile app, generating a total of RUB 3 bn. The biggest discounts were available from 6:00 pm on 25 November until 11:59 pm on 26 November, when more than 450,000 orders were placed for a total of more than RUB 930 m, up 37% from 2020.
The Global Shopping Day set a number of online sales records for Detsky Mir. At the sale’s peak on 11 November, 273,000 orders were placed via our online platform and marketplace for a total of RUB 570 m – a 63% increase on last year’s event. At the same time, the range of products on offer topped 320,000 SKUs, with over 80% of our marketplace sellers taking part in the sales event, and the order processing speed reaching 18,000 fulfillments per hour.
Detsky Mir opened its milestone 900th branded store and its 100th Detmir Mini store. The new branded store with floor space of more than 1,200 sq. m is located in a shopping mall in Krasnokamensk. The milestone small-format Detmir Mini store with floor space of 167 sq. m opened in Novovoronezh.
Detsky Mir celebrated 10 years of operating in Kazakhstan. The first Detsky Mir branded store in Kazakhstan opened on 9 December 2011 in the Tulpar shopping mall, Astana. Today, Detsky Mir Group is the leader in the children’s goods sector in Kazakhstan. Over the past five years, the Company has expanded its presence in the country more than sixfold, growing the chain from 7 to 45 stores, with the current floor space totaling 40,000 sq. m.
Detsky Mir won silver on Russia’s Best Employers List by Forbes and KPMG. In the third ranking of the country’s top employers, which rated 104 companies, Forbes and KPMG focused on corporate ESG practices. The panel of expert judges who compiled the ranking comprised specialists from rating agencies, environmentalists, and sustainability experts.
The IR team at Detsky Mir Group was recognized as Russia’s best: the Company was placed top in the Best Corporate by Small Cap IR Russia 2021 category. This IR ranking has long been considered a top international recognition of investor engagement efforts by companies and their management teams.
The Detsky Mir flagship store in the MEGA Teply Stan shopping mall earned a finalist finish in the Global Retail Real Estate Awards, an annual international industry award to celebrate achievements in retail and retail real estate.
Detsky Mir won one of the most prestigious professional awards in e-commerce and omnichannel, Large Turnover 2021, in the Breakthrough of the Year category and was a finalist of its Grand Prix.
Detsky Mir’s marketplace was recognized as the best niche marketplace in 2021 according to ECOM AWARDS, an e-commerce and retail professional award launched this year.

ESG Highlights

In December, the Detsky Mir Charitable Foundation, part of Detsky Mir Group, announced that it would work with the Stolitsa Miloserdia Charitable Foundation, Pharmeco Group, and MC Intermark Auto to donate items to orphans and children from large and low-income families in St. Petersburg and the Novosibirsk Region. The donations, worth over RUB 6 m, included goods that children need: hygiene products, toys, apparel, furniture, strollers, and sporting goods.
The Detsky Mir Charitable Foundation and Kimberly-Clark’s Huggies brand launched their first joint charity campaign – Appreciating Every Night. The initiative is aimed at helping children in hospices or palliative care units of hospitals.
On the eve of its 17th anniversary, the Detsky Mir Charitable Foundation upgraded its visual identity. The logo retained the instant recognizability of the Detsky Mir brand but acquired its own identity: the signature colored cubes were replaced with hearts, which symbolize human emotions, care, and attention. The new logo and branding were launched on the Foundation’s home page at bf.detmir.ru and will later be rolled out across Detsky Mir Group’s retail stores.
Three thousand customers of the Zoozavr chain took part in a campaign to help homeless pets. More than 890 kg of pet food and treats for dogs and cats were collected, as well as over 150 items of essential goods, including hygiene products, toys, and pads.

Maria Davydova, CEO of PJSC Detsky Mir:

“Last year proved that our decision to pursue an omnichannel growth strategy was a sound one. By delivering on our strategy, we have consolidated our leadership in the children’s goods market, becoming one of the largest and fastest-growing e-commerce players in the Children’s category. Key achievements include expanding the retail chain’s footprint, strengthening our federal and regional logistics infrastructure, seamlessly expanding our assortment by growing our online marketplace, as well as cutting down on delivery lead times for online orders and improving customer service quality across all sales channels.

2021 brought unprecedented new challenges for Detsky Mir and retail as a whole. From ongoing uncertainty amid the spread of COVID-19, new regulatory constraints, and shifts in the operational and logistics environment to rising inflation and the labor shortage – this series of challenges allowed us to once again prove just how effective our business model is and strengthen our leadership in the children’s goods market, both offline and online.

External factors, coupled with effective pricing, product range expansion, and rapid order fulfillment, helped drive a 34.7% increase in online store sales in Q4 2021, while the online segment made up a record 36.1% of Group sales.

We maintain our focus on building out an exclusive product offering through private labels and direct imports. Last year, the share of private labels and direct imports in total annual sales increased by 1.7 p.p. year-on-year to 46.2%.

We ended the year having broken a string of records in our online business; for example, during the height of November’s Black Friday sale, we processed orders totaling more than RUB 930 m, an impressive 37% increase from last year’s promotion. On top of this, the online channel’s total share of sales at Detsky Mir in Russia reached a record 37.4% in the quarter.

I should also highlight that we have met our annual expansion target for the retail chain, with most store openings, 105 new stores, taking place during the fourth quarter of 2021.

Our top priority in 2022 continues to be the further consolidation of the children’s goods market, with our key focus being on effectively expanding our underlying logistics, retail, and digital infrastructure to deliver solid performance both offline and online in a shifting market environment. Achieving leadership across all e-comm products in terms of mobile app and online store usability, and launching new digital services continue to be a key pillar of our digital strategy.”

View the full press release

For additional information:

Julia Polikarpova

Head of Public Relations

Tel.: +7 495 781 08 08, ext. 2041

upolikarpova@detmir.ru

Mikhail Makhyanov

Head of Investor Relations

Tel.: + 7 495 781 08 08, ext. 2315

mmakhyanov@detmir.ru

Detsky Mir’s Shareholders Approved an Interim Dividend for 9 Months 2021

Moscow, Russia, 17 December 2021 – Detsky Mir Group (“Detsky Mir” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces the results of its Extraordinary General Meeting of Shareholders (EGM) that took place on 15 December 2021.

The EGM passed the following resolutions by absentee vote:

1. Approve an interim dividend payment for 9 month 2021 of RUB 3,842,800,000 or RUB 5.20 per ordinary share. The amount of interim dividend represents 60% of adjusted RAS net profit for nine months 2021⁽¹⁾. The total amount of paid dividends in 2021 increases by 7% year-on-year to RUB 8.3 bn.

2. Set the record date for dividend for 26 December 2021. The Company plans to pay out the indicated dividends by the end of 2021.

(1) – Adjusted profit under RAS for 9 months of 2021 amounted to 6.3 billion rubles and is calculated as net profit under RAS for 9 months in the amount of 7.6 billion rubles less a one-time income received from a government subsidy in the form of forgiven debt in Q2 2021 in the volume of 1.3 billion rubles. The company does not plan to distribute the received subsidy as dividends in 2021.

For additional information:

Julia Polikarpova

Head of Public Relations

Tel.: +7 495 781 08 08, ext. 2041

upolikarpova@detmir.ru

Mikhail Makhyanov

Head of Investor Relations

Tel.: + 7 495 781 08 08, ext. 2315

mmakhyanov@detmir.ru

Black Friday Brings in More Than 1.5 Million Orders for Detsky Mir

Moscow, Russia, 1 December 2021 – Detsky Mir Group, a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces the results of its Black Friday sale, which ran from 22 to 28 November.

Over the course of the event, more than 1.5 million orders were placed on our online store and mobile app, generating a total of RUB 3 billion. The biggest discounts were available from 6:00 pm on 25 November until 11:59 pm on 26 November, when more than 450,000 orders were placed for a total of more than RUB 930 million, up 37% from 2020.

Shoppers spent over RUB 300 million via the Detsky Mir marketplace platform, a more than 3x increase on last year. On top of this, 83% of marketplace sellers took part in the sales event.

Toys, diapers, baby food, and apparel and footwear were the event’s hottest categories. Meanwhile at Zoozavr, pet food grew 8.2x and pet supplies saw growth of 3.9x.

Regions with their own distribution centers posted record shipping volumes. In the Southern Federal District, where the Rostov Region warehouse is located, LFL sales increased 1.6x, while the Kazan distribution center helped drive 1.7x growth in LFL sales in the Volga region.

Contacts

ir@detmir.ru