Detsky Mir Grows Adjusted EBITDA 21.4% in 9M 2021

Moscow, Russia, 8 November 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 its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the third quarter and nine months ended 30 September 2021.

Q3 2021 Financial Highlights

The Group’s gross merchandise value (GMV) increased 16.4% to RUB 49.5 bn (incl. VAT).
Total online sales in Russia increased 43.7% to RUB 12.7 bn (incl. VAT);
- the share of online sales in Russia stood at 27.0%.
The Group’s revenue increased 14.0% to RUB 43.9 bn.
Gross profit increased 14.5% to RUB 13.9 bn, with a gross margin of 31.7%.
SG&A as a percentage of revenue increased 0.6 p.p. to 18.5%.
Adjusted EBITDA increased 12.5% to RUB 5.8 bn;
- adjusted EBITDA margin was 13.3%.
EBITDA totaled RUB 5.9 bn (+13.8% year-on-year).
Adjusted net profit amounted to RUB 3.6 bn; net profit totaled RUB 3.7 bn.
The net debt/adjusted EBITDA LTM ratio stood at 1.2x. Net debt was RUB 23.2 bn.
Sales of private labels and direct imports in Russia totaled a record 53.0% of total sales (+4.0 p.p. year-on-year).
The Company opened 85 new stores: 19 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 3 Detmir stores in Belarus, 34 Detmir Mini stores, and 27 Zoozavr stores.
The total number of Group stores amounted to 1,014 (+25.2% year-on-year), across 418 cities and towns in Russia, Kazakhstan, and Belarus.
The Group’s total selling space increased 10.3% to 947,000 sq. m, while the total floor space of stores amounted to 1,179,000 sq. m.
Total warehouse space was 175,000 sq. m.

9M 2021 Financial Highlights

The Group’s GMV increased 20.7% to RUB 131.0 bn (incl. VAT).
Total online sales volume in Russia increased 42.7% to RUB 35.2 bn (incl. VAT);
- the share of online sales in Russia was 28.2%.
The Group’s revenue increased 18.9% to RUB 117.0 bn.
Gross profit increased 20.8% to RUB 36.4 bn, with a gross margin of 31.1%.
SG&A as a percentage of revenue increased 0.4 p.p. to 19.8%.
Adjusted EBITDAincreased 21.4% to RUB 13.4 bn;
- adjusted EBITDA margin was 11.4% (+0.2 p.p. year-on-year).
EBITDA totaled RUB 14.2 bn (+33.6% year-on-year).
Adjusted net profit for the period came in at RUB 8.0 bn (+111.5% year-on-year); net profit totaled RUB 8.8 bn.
Sales of private labels and direct imports in Russia totaled 47.5% of total sales (+3.7 p.p. year-on-year).
The Company opened 146 new stores: 39 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 7 Detmir stores in Belarus, 67 Detmir Mini stores, and 31 Zoozavr stores.

Q3 2021 Key Events

Detsky Mir made a decision to strengthen its C-suite team, driven by the fast pace at which the Company’s new ambitious strategy, business verticals, and digital transformation are being implemented and deployed. Anna Garmanova, Chief Financial Officer (CFO) at Detsky Mir, left the Company effective 1 August 2021.
Andrey Spivak took up the roles of CFO and Member of the Management Board from 16 August. Mr. Spivak has over 19 years of experience in retail and FMCG (Magnit, X5 Retail Group, Wrigley Ukraine, and Wrigley Russia). Sergey Li was appointed Chief Operating Officer (COO) and Member of the Management Board from 15 July. Mr. Li has over 17 years of experience in retail (M.Video–Eldorado, M.Video, Sulpak (Kazakhstan), and Philips). Another appointment was Mikhail Makhyanov, starting as Head of Investor Relations from 16 August. Mr. Makhyanov has more than 7 years of experience working at public companies and in capital markets (Polyus and Renaissance Capital).
Maria Davydova ranked among the top three CEOs according to the updated ranking by Institutional Investor, a leading global financial periodical. The Detsky Mir team came second in both the overall ranking of management teams and among IR teams.
Detsky Mir and PinUp Production released A Cozy Autumn with Detsky Mir! – a hygge style promotional video to support the new autumn collection.

Key Events After the Reporting Date

7 November 2021, the Board of Directors decided to recommend to the EGM (to be held by absentee vote with the final date for receipt of completed ballots on December 15, 2021) to approve an interim dividend for the nine months of 2021 totaling RUB 3.8 bn, representing a payment of RUB 5.20 per ordinary share. The Board also recommended that the EGM set the record date establishing eligibility to receive the dividend as 26 December 2021. The recommended amount of dividends represents 60% of adjusted RAS net profit for nine months 2021. According to the Board of Directors and management, the recommended amount of interim dividends is at a comfortable level for the company amid higher market volatility and uncertainty around the timing and further restrictive measures on the back of COVID-19 pandemic in 2021. Management and the Board of Directors will discuss the final dividend payment based on the results of the fourth quarter, including the remaining part of retained earnings of previous periods.
Starting from Q4 2021 the Company will adopt the changes in Russian Accounting Standards (RAS) in application to accounting of inventories. This change will bring RAS reporting closer to IFRS where the goods are reported at their actual cost, taking into account all discounts, bonuses provided by the suppliers. The company will adopt the standard and reflect it in the final RAS reporting for 2021. The effect on the RAS results (including RAS net profit) is subject to further assessment and will be reflected in the full year RAS accounts. This change will not affect the Company’s IFRS reporting.
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.
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.

ESG Highlights

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.
The Detsky Mir Charitable Foundation donated over RUB 1 m worth of warm outerwear, mattresses, and diapers, as well as toys, books, stationery, and arts and crafts supplies to large families in the Rostov, Yaroslavl, Ryazan, and Moscow Regions, along with the cities of Moscow and Saint Petersburg.
Detsky Mir supported the Time for Good Deeds annual charity campaign. A donation worth about RUB 9 m included goods that children need: apparel, footwear, hygiene products, toys, books, and stationery.
The Detsky Mir Charitable Foundation helped disadvantaged children to get ready to go back to school, collecting and donating more than 1.8 m goods through a charity campaign – stationery, exercise books, apparel, footwear, and kits for first-graders. Assistance was provided to more than 650,000 children in difficult life situations.
The Detsky Mir Charitable Foundation supported social projects run by non-profit organizations and social institutions in eight Russian regions. A donation worth over RUB 2.2 m was distributed among several social institutions for children, non-profit and charitable organizations, families in difficult life situations, as well as organizations supporting homeless pets.
Detsky Mir sent almost two tonnes of clothing and shoes for recycling year-to-date (in the first half of 2021).

Maria Davydova, CEO of PJSC Detsky Mir:

“We are delighted with our third quarter results, as the Group posted a 12.5% increase in adjusted EBITDA for the quarter and a cumulative year-to-date growth of 21.4%. Thanks to a bumper back-to-school season and a soaring share of private label and direct import sales, which hit a record 53.0% in Russia, we were able to maintain a strong EBITDA margin of 13.3% despite the expected increase in payroll costs driven by workforce shortages across the country.

We continue our robust market consolidation, with our total revenue up 18.9% for 9M 2021, to reaffirm our status as the absolute leader in the children’s goods market in Russia and Kazakhstan. Our standout success was the continuing strong growth in online sales: in the third quarter, total online sales in Russia grew 43.7%, while the share of online sales reached 27.0%.

We maintain our focus on leveraging our existing logistics, retail, and digital infrastructure and ramping it up to deliver strong performance in both the offline and online segments. In October we launched our third regional distribution center in Novosibirsk, which enables accelerated deliveries of all items ordered for our customers across the entire Siberian Federal District.

With a new lockdown imposed throughout Russia in early November to curb the spread of COVID-19, some of our stores made changes to their routine: from reducing their assortment and operating only as pickup points to the complete suspension of operations. Nonetheless, it was business as usual for most of our stores.

Due to the limited operations of our stores in early November amid COVID-19 and uncertainty about the future restrictions, the Company recommends to the shareholders to distribute 60% of the adjusted RAS net profit for 9 months of 2021 as interim dividends, that is, RUB 3.8 billion. However, the Company’s dividend policy remains unchanged and the final dividend recommendation will depend on the fourth quarter results.

We believe that last year’s results proved our omnichannel model to be highly resilient, and we are optimistic about how we will weather this crisis as we have the necessary capabilities and expertise to pivot to online and promptly respond to changes in our customers’ behaviors.”

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 Group’s GMV Increased by 16.4% in Q3 2021

Moscow, Russia, 14 October 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 its operating results for the third quarter and nine months ended 30 September 2021.

Q3 2021 Operating Highlights

The Group’s gross merchandise value (GMV) increased by 16.4% to RUB 49.5 bn (incl. VAT).
Total online sales volume in Russia increased by 43.7% to RUB 12.7 bn (incl. VAT):
- The share of online sales in Russia reached 27.0%.
The Group’s net revenue increased by 14.0% to RUB 43.9 bn.
Sales of private labels and direct imports in Russia totaled a record 53.0% of total sales (+4.0 p.p. year-on-year).
The Company opened 85 new stores: 19 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 3 Detmir stores in Belarus, 34 Detmir Mini stores, and 27 Zoozavr stores.
The total number of Group stores amounted to 1,014 (+25.2% year-on-year), across 418 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased by 10.3% to 947,000 sq. m, while the total floor space of stores amounted to 1,179,000 sq. m.

9M 2021 Operating Highlights

The Group’s GMV increased by 20.7% to RUB 131.0 bn (incl. VAT).
Total online sales volume in Russia increased by 42.7% to RUB 35.2 bn (incl. VAT):
- The share of online sales in Russia reached 28.2%.
The Group’s net revenue increased by 18.9% to RUB 117.0 bn.
Sales of private labels and direct imports in Russia totaled 47.5% of total sales (+3.7 p.p. year-on-year).
The Company opened 146 new stores: 48 Detsky Mir and Detmir stores (Russia, Kazakhstan, Belarus), 67 Detmir mini stores and 31 Zoozavr stores.
Total warehouse space was 175,000 sq. m.

Q3 2021 Key Events

Detsky Mir made a decision to strengthen its C-suite team, driven by the fast pace at which the Company’s new ambitious strategy, business verticals and digital transformation are being implemented and deployed. Anna Garmanova, Chief Financial Officer (CFO) at Detsky Mir, left the Company effective 1 August 2021. Andrey Spivak took up the roles of CFO and Member of the Management Board from 16 August. Mr. Spivak has over 19 years of experience in retail and FMCG (Magnit, X5 Retail Group, Wrigley Ukraine, and Wrigley Russia). Sergey Li was appointed Chief Operating Officer (COO) and Member of the Management Board from 15 July. Mr. Li has over 17 years of experience in retail (M.Video–Eldorado, M.Video, Sulpak (Kazakhstan), and Philips). Another appointment was Mikhail Makhyanov, starting as Head of Investor Relations from 16 August. Mr. Makhyanov has more than seven years of experience working at public companies and in capital markets (Polyus and Renaissance Capital).
Maria Davydova ranked among the top three CEOs according to the updated ranking by Institutional Investor, a leading global financial periodical. The Detsky Mir team came second in both the overall ranking of management teams and among IR teams.
Detsky Mir and PinUp Production released a Cozy Autumn with Detsky Mir! – a hygge style promotional video to support the new autumn collection. A large-scale advertising campaign was launched on TV and in digital channels on 23 August, running until 29 September.

Key Events After the Reporting Date

Detsky Mir’s marketplace was recognized as the best niche marketplace according to ECOM AWARDS 2021, an e-commerce and retail professional award launched this year.
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.

ESG Highlights

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.
The Detsky Mir Charitable Foundation donated over RUB 1 million worth of warm outerwear, mattresses and diapers, as well as toys, books, stationery and arts and crafts supplies to large families in Russia.
Detsky Mir supported the Time for Good Deeds annual charity campaign. A donation worth about RUB 9 million included goods that children need: apparel, footwear, hygiene products, toys, books, and stationery.
The Detsky Mir Charitable Foundation helped disadvantaged children to get ready to go back to school, collecting and donating more than 1.8 million goods through a charity campaign – stationery, exercise books, apparel, footwear, and kits for first-graders. Assistance was provided to more than 650,000 children in difficult life situations.
The Detsky Mir Charitable Foundation supported social projects run by non-profit organizations and social institutions in eight Russian regions. A donation worth over RUB 2.2 million was distributed among several social institutions for children, non-profit and charitable organizations, families in difficult life situations, as well as organizations supporting homeless pets.

Detsky Mir sent almost two tonnes of clothing and shoes for recycling in the first half of 2021.

Maria Davydova, CEO of PJSC Detsky Mir:

“Over 9M 2021, Detsky Mir has confirmed its status as the leading player in the children’s goods markets in Russia and Kazakhstan. Our standout success was the strong growth in online sales: in the third quarter, total online sales in Russia grew 43.7%, while the share of online sales reached 27%. We had a bumper back-to-school season, with apparel and footwear posting a record 36% share of total sales. We also saw strong demand for our private labels, with sales of private labels and direct imports in Russia growing to 53%. We will continue to further develop our omnichannel proposition and new business verticals by fully leveraging our logistics, retail and digital infrastructure to deliver strong results both offline and online, and by offering our customers an enormous range of products and an advanced customer experience.”

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 Grows Adjusted EBITDA 29.3% in 1H 2021

Moscow, Russia, 25 August 2021 – Detsky Mir Group (“Detsky Mir” or the “Company”, MOEX: DSKY), the largest children’s goods retailer in Russia and Kazakhstan, announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the second quarter and the first half of the year, ended 30 June 2021.

Q2 2021 Operating Highlights

The Group’s gross merchandise value (GMV) increased 32.2% to RUB 41.9 bn (incl. VAT).
Total online salesin Russia increased 20.1% to RUB 11.7 bn (incl. VAT); the share of online sales stood at 29.3%.
The Group’s revenue increased 29.6% to RUB 37.4 bn.
Gross profit increased 34.3% to RUB 11.9 bn, with a gross margin of 31.9% (+1.1 p.p. year-on-year).
SG&A as a percentage of revenue increased 1.8 p.p. to 20.2%.
Adjusted EBITDA increased 24.2% to RUB 4.4 bn; adjusted EBITDA margin was 11.8% (–0.5 p.p. year-on-year). EBITDA totaled RUB 5.5 bn (+55.3% year-on-year).
Adjusted net profit amounted to RUB 2.8 bn vs. RUB 1.4 bn in the same period last year; net profit totaled RUB 3.9 bn.
The net debt/adjusted EBITDA LTM ratio stood at 1.3x as at June 2021-end vs. 1.6x at June 2020-end. Net debt was RUB 23.7 bn (–5.0% year-on-year).
The Company opened 49 new stores: 19 Detsky Mir branded stores, 27 Detmir Pickup stores and 3 Zoozavr stores.
The total number of Group stores amounted to 929 (+9.3% year-on-year), across 378 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s total selling space increased 8.4% to 922,000 sq. m, while the total floor space of stores amounted to 1,148,000 sq. m.

1H 2021 Financial Highlights

The Group’s GMV increased 23.6% to RUB 81.5 bn (incl. VAT).
Total online sales increased 42.4% to RUB 22.5 bn (incl. VAT); the share of online sales was 28.9%.
The Group’s revenue increased 22.0% to RUB 73.1 bn.
Gross profit increased 25.1% to RUB 22.5 bn, with a gross margin of 30.8% (+0.7 p.p. year-on-year).
Share of SG&A as a percentage of revenue grew 0.3 p.p. to 20.6%.
Adjusted EBITDAincreased 29.3% to RUB 7.5 bn; adjusted EBITDA margin was 10.3% (+0.6 p.p. year-on-year). EBITDA totaled RUB 8.3 bn (+52.4% year-on-year).
Adjusted net profit was RUB 4.3 bn vs. RUB 1.4 bn in the same period last year; net profit stood at RUB 5.2 bn.
Sales of private labels and direct imports in Russia grew 25.3%, accounting for 44.3% of total sales (+1.5 p.p. year-on-year).
The Company opened 61 new stores: 24 Detsky Mir branded stores, 33 Detmir Pickup stores and 4 Zoozavr stores.
The number of partner pickup points and parcel lockers increased 3.5x to 20,800 year-to-date.
Total warehouse space was 146,000 sq. m.

Q2 2021 Key Events

Detsky Mir’s shareholders approved the distribution of the entire net profit for Q4 2020 as a final dividend, totaling RUB 4.5 bn, or RUB 6.07 per ordinary share. The total value of paid dividends for 2020 amounts to RUB 8.2 bn, or RUB 11.15 per ordinary share.
Detsky Mir’s shareholders elected a new Board of Directors, including the new independent director David Rönnberg, four incumbent independent directors and five incumbent non-executive directors. More information on the members of the Board and its committees is available on the Company website.
The Company launched its second regional distribution center – an 8,000 sq. m facility in Kazan operating from Russian Post’s fulfillment center. The distribution center’s throughput will reach up to 250,000 orders per month.
Andrey Osokin was appointed Marketing Director and Member of the Management Board at the Company. Mr. Osokin boasts an over 14-year track record in marketing and e-commerce at companies such as Goods.ru, Otto Group Russia and Baon-Desam.

Key Events After the Reporting Date

Detsky Mir has decided to strengthen its C-suite team, driven by the fast pace at which the Company’s new ambitious strategy, business verticals and digital transformation are being implemented and deployed. Anna Garmanova, Chief Financial Officer (CFO) at Detsky Mir, left the Company effective 1 August 2021. Andrey Spivak took up the roles of CFO and Member of the Management Board from 16 August. Mr. Spivak has over 19 years of experience in retail and FMCG (Magnit, X5 Retail Group, Wrigley Ukraine and Wrigley Russia). Sergey Li was appointed Chief Operating Officer (COO) and Member of the Management Board from 15 July. Mr. Li has over 17 years of experience in retail (M.Video-Eldorado, M.Video, Sulpak (Kazakhstan) and Philips). Another appointment was Mikhail Makhyanov, starting as Head of Investor Relations from 16 August. Mr. Makhyanov has more than seven years of experience working at public companies and in capital markets (Polyus and Renaissance Capital).

ESG Highlights

Detsky Mir has approved its Policy on Chemicals and Environmental Protection, which aims to ensure that chemicals are used responsibly in the production of goods purchased by the Company. In line with this policy, Detsky Mir suppliers are required to comply with an approved list of chemicals that may not be used to produce products purchased by the Company.
Detsky Mir has developed a methodology and set of standards for auditing suppliers for compliance with sustainability principles. The goal for 2021 is to carry out the first ESG audit of the Russian manufacturers that produce Detsky Mir’s private label goods.
The Detsky Mir Charitable Foundation donated more than 2.7 m gifts to disadvantaged children, along with one tonne of pet food to animal shelters.
Detsky Mir Group was awarded a prize in the Social Responsibility category of the Retail Week Awards 2021, while the Detsky Mir Charitable Foundation won the Best Russian Social Project 2021 award.
Over the first six months of 2021, almost two tonnes of waste from shoe and textile manufacturing were collected and handed over for recycling to the Dmitrov RTI Plant, the largest waste recycling enterprise in Russia.
Every Detsky Mir Group store complies with all COVID-19 protocols, with couriers delivering online orders provided with the necessary personal protective equipment.

Maria Davydova, CEO of PJSC Detsky Mir:

“The results of 1H 2021 once again prove Detsky Mir to be the recognized leader in the children’s goods market, with the Group’s GMV increasing 23.6% to RUB 81.5 bn. The Company continues to deliver strong performance both online and offline. Our key strategic priority is to further consolidate the children’s goods market by digitizing sales, expanding our selection of private label brands, growing our own marketplace, improving the customer experience, launching new services and strengthening our logistics and retail infrastructure. We will press ahead with transforming the Company into a leading multi-vertical digital retailer and driving up share-of-wallet among Russian shoppers. To achieve these ambitious goals, we have strengthened our C-suite team with experts who have relevant experience in delivering retail digitalization and integrating best-in-class solutions.”

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 Sales Grew by Almost a Third in Q2

Detsky Mir Group (the “Group”, “Detsky Mir” or the “Company”, MOEX: DSKY), the largest omnichannel children’s goods retailer in Russia and Kazakhstan, announces its operating results for the second quarter and the first half ended 30 June 2021.

Q2 2021 Operating Highlights

The Group’s gross merchandise value (GMV) increased by 32.2% to RUB 41.9 bn (incl. VAT).
Total online sales in Russia increased by 20.1% to RUB 11.7 bn (incl. VAT):
- Online share in Russia amounted to 29.3%.
Sales of private labels and direct imports in Russia grew by 31.2%, accounting for 48.0% of total sales (+1.2 p.p. year-on-year).
Detsky Mir opened 49 new stores: 19 Detsky Mir stores, 27 Detmir Pickup stores and three Zoozavr stores.
The total number of Group stores amounted to 929 stores (+9.3% year-on-year), across 378 cities and towns in Russia, Kazakhstan and Belarus.
The Group’s selling space increased by 8.4% to 922,000 sq. m, the total space of the retail chains amounted to 1,148,000 sq. m.

1H 2021 Operating Highlights

The Group’s gross merchandise value (GMV) increased by 23.6% to RUB 81.5 bn (incl. VAT).
Total online sales in Russia increased by 42.4% to RUB 22.5 bn (incl. VAT):
- Online share in Russia amounted to 28.9%.
Sales of private labels and direct imports in Russia grew by 25.3%, accounting for 44.3% of total sales (+1.5 p.p. year-on-year).
Detsky Mir opened 61 new stores: 27 Detsky Mir stores, 29 Detmir Pickup stores and five Zoozavr stores.
The total number of partner pickup points and parcel lockers increased 3.5x to 20,800 year-to-date.
The total warehouse space was 146,000 sq. m.

Q2 2021 Key Events

Detsky Mir’s shareholders approved the distribution of the entire net profit for Q4 2020 as a final dividend, totaling RUB 4.5 bn or RUB 6.07 per ordinary share. The total value of paid dividends for 2020 amounts to RUB 8.2 bn or RUB 11.15 per ordinary share.
Detsky Mir’s shareholders elected a new Board of Directors, including the new independent director David Rönnberg, four incumbent independent directors and five incumbent non-executive directors. More information on the members of the Board and its committees is available on the Company website.
The Company launched its second regional distribution center – an 8,000 sq. m facility in Kazan operating from Russian Post’s fulfillment center. The distribution center’s throughput will reach up to 250,000 orders per month.
Andrey Osokin was appointed as Marketing Director and Member of the Management Board at the Company. Mr. Osokin boasts an over 14-year track record in marketing and e-commerce at companies such as Goods.ru, Otto Group Russia and Baon-Desam.

Sustainability Achievements (ESG)

Detsky Mir has approved its Policy on Chemicals and Environmental Protection, which aims to ensure that chemicals are used responsibly in the production of goods purchased by the Company. In line with this policy, Detsky Mir suppliers are required to comply with an approved list of chemicals that may not be used to produce products purchased by the Company.
Detsky Mir has developed a methodology and set of standards for auditing suppliers for compliance with sustainability principles. The goal for 2021 is to carry out the first ESG audit of the Russian manufacturers that produce Detsky Mir’s private label goods.
The Detsky Mir Charitable Foundation donated more than 2.7 m gifts to disadvantaged children, along with one tonne of pet food to animal shelters.
Detsky Mir Group was awarded a prize in the Social Responsibility category of the Retail Week Awards 2021, while the Detsky Mir Charitable Foundation won the Best Russian Social Project 2021 award.
All Detsky Mir Group stores comply with all COVID-19 protocols, with couriers delivering online orders provided with necessary personal protective equipment.

Maria Davydova, CEO of PJSC Detsky Mir:

“1H 2021 was one of the most successful periods seen in the last few years: the Group’s total sales increased by 23.6% to RUB 81.5 billion, and we were able to restore sales in the retail sector, all while maintaining a high growth momentum in the online segment. We also expect a marked increase in operating income (adjusted EBITDA) for the period of at least 25%.

“Our key strategic priority is to further consolidate the children’s goods market by digitizing sales, expanding the selection of private labels and growing our marketplace, improving the customer experience, launching new services, and strengthening our logistics and retail infrastructure.

“We will press ahead with transforming the Company into a leading, multi-vertical digital retailer, and driving up share-of-wallet among Russian customers. To achieve these ambitious goals, our team plans to accelerate the development of the Zoozavr brand in the pet supplies market and explore new verticals for growth.

“Detsky Mir is in a stable financial position, consistently generating sufficient cash flow to achieve its strategic goals and maintain its dividend policy. The combination of double-digit growth and strong dividends is one of Detsky Mir’s key drivers of additional shareholder value; in line with this, we distributed the entire net profit for 2020 – RUB 8.2 billion – as dividends.”

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

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Detsky Mir Announces AGM Results

Moscow, Russia, 2 July 2021 – PJSC Detsky Mir (“Detsky Mir” or the “Company”, MOEX: DSKY) announces the results of its Annual General Meeting of Shareholders (AGM), which took place on 30 June 2021.

The Company’s AGM approved the distribution of a final dividend for FY 2020 totaling RUB 4,486 m or RUB 6.07 per ordinary share. This brought the total dividends paid to RUB 8,240 m, corresponding to around RUB 11.15 per ordinary share for FY 2020, with a record date of 11 July 2021.

Detsky Mir’s shareholders elected a new Board of Directors, including the new independent director David Rönnberg:

1. Anischenko, Andrey Anatolievich (independent director) – entrepreneur and investor in digital education services and marketing

2. Foss, Michael (independent director) – Co-Founder and member of the Board of Directors of Independent Pet Partners Holdings, LLC (a US pet supplies retail chain)

3. Gordon, Maria Vladimirovna (independent director) – member of the Supervisory Board at PJSC Moscow Exchange, member of the Board of Directors at PJSC Polyus and member of the Supervisory Board at PJSC Alrosa;

4. Grachev, Pavel Sergeevich (non-executive director) – CEO of PJSC Polyus

5. Klenov, Dmitry (non-executive director) – Director of UFG Investment Services Limited, Director of Altus Capital Management Limited

6. Klimanov, Vladimir Gennadievich (non-executive director) – Investment Director of LLC Veta Capital Partners

7. Maher, Tony (non-executive director) – Chairman of the Board of Directors at PJSC Progress, member of the Board of Directors of MD Medical Group

8. Rönnberg, David (independent director) – CEO of Musti Group (a Scandinavian omnichannel pet supplies retailer)

9. Shevchuk, Alexander Viktorovich (independent director) – Executive Director of the Association of Institutional Investors (API)

10. Stiskin, Mikhail Borisovich (non-executive director) – Deputy CEO for Economics and Finance of PJSC Polyus, Senior Vice President for Finance and Strategy of Managing Company LLC Polyus

The Chairperson of the Board of Directors, as well as members of the Board committees, will be determined at the next meeting of the Board.

In addition, the AGM approved the following items: the Company’s amended Regulations on Remuneration and Compensation Paid to the Members of the Company’s Board of Directors, the Annual Report and Accounting Report for FY 2020, as well as the appointment of JSC Deloitte & Touche CIS as auditor for 2021. Detsky Mir’s shareholders also approved the amended Articles of Association, which abolished the Company’s Audit Commission.

For additional information:

Julia Polikarpova

Head of Public Relations

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

upolikarpova@detmir.ru

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Detsky Mir Group Adjusted EBITDA Increased by 37.3% YoY in Q1 2021

Detsky Mir Group, announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the first quarter ended 31 March 2021.

Q1 2021 Financial Highlights

The Group’s gross merchandise value (GMV) increased by 15.6% to RUB 39.6 bn (incl. VAT).
Total online sales increased 1.8x to RUB 10.9 bn (incl. VAT); online share in Russia increased 1.6x to 28.6%.
The Group’s revenue increased by 15.0% to RUB 35.7 bn.
Gross profit grew by 16.1% to RUB 10.5 bn; gross margin was 29.6% (+0.3 p.p. year-on-year).
SG&A as a percentage of revenue decreased by 1.0 p.p. to 21.0%.
Adjusted EBITDA increased by 37.3% to RUB 3.1 bn; adjusted EBITDA margin was 8.7% (+1.4 p.p. year-on-year). EBITDA amounted to RUB 2.8 bn (+47.2% year-on-year).
Adjusted net profit amounted to RUB 1.5 bn vs RUB 15 m in the same period of last year; net profit totaled RUB 1.3 bn.
The net debt/adjusted EBITDA LTM ratio improved to 1.4x as of 31 March 2021 vs 1.6x as of 31 March 2020. The net debt was RUB 24.0 bn (-0.9% year-on-year).

Q1 2021 Group Business Development

Using its marketplace model (third-party sellers or manufacturers may sell their goods on the Company website or mobile app for a fee), Detsky Mir piloted the sale of Women’s Clothing, a new category. The Company will continue to actively develop this pilot in Q2 2021.
The Company signed a basic agreement to open an 8,000 sq. m regional distribution center in Kazan, based on Russian Post’s fulfillment center. It was commissioned at the end of April 2021.
Detsky Mir piloted a subscription delivery service for recurring orders, including diapers, baby food and pet food. Full-scale rollout is planned for Q2 2021.
In Kazakhstan, the Company launched an iOS and Android app, as well as courier delivery for online orders in 11 cities and next-day delivery in a number of cities.

Detsky Mir continued to expand its network of pickup points with new logistics partners: 500 pickup points were added through handset retailer Svyaznoy, the logistics service SberLogistics brought 1,700 pickup points, while the TelePort chain gave our customers access to 570 parcel lockers. The total number of partner pickup points and parcel lockers increased 2.1x to 12,200 year-to-date.
The Company successfully completed a pilot project selling digital services and partner services through its own mobile application, starting to develop a full-fledged platform.

Q1 2021 Key Events

Detsky Mir’s shareholders elected a new Board of Directors, composed of five independent directors, four representatives of the major shareholder Gulf Investments Limited (Altus Capital), and one non-executive director. Maria Gordon was elected Chairwoman of the Company’s Board of Directors and Pavel Grachev was elected Deputy Chairman of the Board. More information on the members of the Board and its committees is available on the Company website.
Detsky Mir became the first Russian contributor to Zero Discharge of Hazardous Chemicals program (ZDHC), an international initiative aimed at reducing the negative impact of the textile and footwear industry on the environment around the world.
The rating agency Expert RA revised its rating for Detsky Mir under its updated methodology, upgrading it by one notch to ruAA– with a stable outlook. Previously, Detsky Mir’s credit rating stood at ruA+, with a stable outlook.
According to Data Insight Ranking of the largest Russian online stores in 2020, Detsky Mir moved up to 14th place vs 17th place a year earlier by sales and achieved 4th place by the number of orders.
In 2020, Detsky Mir ranked among the Top 30 most mentioned e-commerce retailers on social media, according to Brand Analytics.
Detsky Mir achieved International CX World Awards 2020/2021, the largest professional award in the customer experience industry.
As part of the first stage of this year’s Participate! program, the Detsky Mir Charitable Foundation donated more than 1.4 million items to disadvantaged children and sent about 15 tons of aid to children’s homes in the Rostov Region, while the annual initiative Comfort to Shelters saw more than 1.3 tons of pet food donated to homeless animals.

Maria Davydova, CEO of PJSC Detsky Mir:

“Detsky Mir had an outstanding first quarter in 2021: we not only managed to up the pace of business growth, we also secured a significant increase in EBITDA and net profit. Even with an uncertain market outlook, we are bullish on the future of the Company and believe our chosen strategy is solid.

“First, we find our impressive online sales figures encouraging, as even off a high base from last year following the surge in demand for online shopping, they continue to outpace the market. A strategic priority for us now is to further increase the share of our online channel in total sales to 45%. Still, by actively developing our own marketplace and expanding our product assortment, we see a good chance of exceeding this target.

“The Detsky Mir Development Strategy to 2024, which was approved last summer, envisages a doubling of GMV in four years, driven by increased investment in infrastructure and new business verticals. The Company’s plans for 2021 include the launch of at least 70 new Detsky Mir stores, 100 Detmir Pickup retail outlets and 70 Zoozavr stores. At the same time, we will grow our network of partner pickup points to 20,000.

“Furthermore, Detsky Mir plans to open its first new digital-format store in Q2 to provide a superior customer experience for those willing to pick up their online order in-store. We will use the outcomes of this pilot to come up with a mid-term modernization roadmap for the whole network of our stores.

“In April, we opened our second regional distribution center, located in Kazan. Our logistics infrastructure is soon to be reinforced with three more facilities: two regional distribution centers will be opened in the Novosibirsk and Leningrad Regions by the beginning of 2022, while a federal distribution center will be opened outside Yekaterinburg in January 2022, bringing total warehouse floor space to over 200,000 sq. m. Meanwhile, building up our retail infrastructure will ensure better penetration for our express delivery service out in the Russian regions.

“The Detsky Mir team will definitely bring new improvements to the user experience and functionality of our mobile platform, as this is now the major engine of online sales at the Company. We have sound plan for new features this year, including delivering children’s goods in one hour, adding a ‘pay in installments’ option and launching delivery of orders on-demand from our store. We aim to become one of the top Russian mobile apps in the Shopping category.

“I would also like to draw your attention to the fact that Detsky Mir’s net profit (RAS) for Q4 2020 increased by 10.8% to RUB 4.5 bn. We will recommend that the Board of Directors and shareholders distribute all net profit as a final dividend for 2020, making Detsky Mir not only a growth stock, but an attractive dividend story.”

View the full press release

***

Conference Call Information

Detsky Mir’s management will host a conference call today at 16:00 (Moscow time) / 14:00 (London time) / 9:00 (New York time) to discuss the Company’s Q1 2021 unaudited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 283 98 58

+44 203 984 98 44

USA

+1 718 866 46 14

PIN

288 543#

Web dial-in and presentation

Replay link

For additional information:

Julia Polikarpova

Head of Public Relations

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

upolikarpova@detmir.ru

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Detsky Mir: Q1 GMV Growth Accelerated to 15.6% and Online Sales Increased 1.8x

Detsky Mir Group, announces its operating results for the first quarter ended 31 March 2021.

Q1 2021 Operating Highlights1

The Group’s gross merchandise value (GMV)2 increased by 15.6% to RUB 39.6 bn (incl. VAT).
Total online sales3 in Russia increased 1.8x to RUB 10.9 bn (incl. VAT).
- The share of online sales in the Company’s total sales in Russia increased 1.6x to 28.6%.
- The share of online orders placed via our mobile app in Russia was 74.0%.
The Group’s assortment grew 2.8x to 321,000 SKUs.
Sales of private labels and direct imports in Russia4 grew by 18.3%, accounting for 40.4% of total sales (+1.4 p.p. year-on-year).
Transactions in Russia involving a loyalty card accounted for 85.9% of total Company sales (+4.6 p.p. year-on-year).
- The total number of Company loyalty card holders in Russia increased 11.2% to 27.5 m.
- The number of active loyalty card holders5 amounted to 10.8 m, with the number of active online loyalty card holders5 increasing by 92.4% to 3.7 m (34.0% of all active cardholders).
The total number of Group stores amounted to 880 (+4.0% year-on-year), across 350 cities and towns in Russia, Kazakhstan and Belarus. Detsky Mir opened 12 new stores in Q1 2021. The Group’s selling space increased by 6.5% year-on-year to 902,000 sq. m., the total space of the retail chains amounted to 1,123,000 sq. m.
The company operates two federal distribution centers in the Moscow region and one regional warehouse in the Rostov region. The total warehouse space was 138,000 sq. m.
The total number of partner pickup points and parcel lockers increased 2.1x to 12,200 year-to-date.

Q1 2021 Group Business Development

Using its marketplace model (third-party sellers or manufacturers may sell their goods on the Company website or mobile app for a fee), Detsky Mir piloted the sale of Women’s Clothing, a new category. The Company will continue to actively develop this pilot in Q2 2021.
The Company signed a basic agreement to open an 8,000 sq. m regional distribution center in Kazan, based on Russian Post’s fulfillment center. Commissioning is slated for the end of April 2021.
Detsky Mir piloted a subscription delivery service for recurring orders, including diapers, baby food and pet food. Full-scale rollout is planned for Q2 2021.
In Kazakhstan, the Company launched an iOS and Android app, as well as courier delivery for online orders in 11 cities and next-day delivery in a number of cities.
Detsky Mir continued to expand its network of pickup points with new logistics partners: 500 pickup points were added through handset retailer Svyaznoy, the logistics service SberLogistics brought 1,700 pickup points, while the TelePort chain gave our customers access to 570 parcel lockers.
The Company ran a pilot project selling digital services and partner services through its own mobile application, under which more than 70 mobile apps and about 30 services for the whole family were made available. The pilot is expected to be completed in Q4 2021.
Detsky Mir signed an IaaS contract to set up a backup data center, to provide redundancy for critical business systems and reduce the risk of losing business-critical data. Commissioning is scheduled for Q4 2021.
Thanks to a strong Cyber Monday campaign, held from 25 to 29 January 2021, the Company’s online sales increased 2.3x year-on-year and continued to show one of the highest growth rates in the Russian e-commerce segment. On 25 January, Cyber Monday itself, online sales hit a peak at 40.1% of Detsky Mir’s total sales in Russia, with the share of orders made via the Company’s mobile app during the campaign reaching 73.5%.

Q1 2021 Key Events

Detsky Mir’s shareholders elected a new Board of Directors, composed of five independent directors, four representatives of the major shareholder Gulf Investments Limited (Altus Capital), and one non-executive director. Maria Gordon was elected Chairwoman of the Company’s Board of Directors and Pavel Grachev was elected Deputy Chairman of the Board. More information on the members of the Board and its committees is available on the Company website.
Detsky Mir became the first Russian contributor to Zero Discharge of Hazardous Chemicals program (ZDHC), an international initiative aimed at reducing the negative impact of the textile and footwear industry on the environment around the world.
The rating agency Expert RA revised its rating for Detsky Mir under its updated methodology, upgrading it by one notch to ruAA– with a stable outlook. Previously, Detsky Mir’s credit rating stood at ruA+, with a stable outlook.
In 2020, Detsky Mir ranked among the Top 30 most mentioned e-commerce retailers on social media, according to Brand Analytics.
At the International CX World Awards 2020, Detsky Mir was shortlisted for the categories Customer Experience During COVID and Best Use of Customer Insight & Feedback.
As part of the first stage of this year’s Participate! program, the Detsky Mir Charitable Foundation donated more than 1.4 million items to disadvantaged children and sent about 15 tons of aid to children’s homes in the Rostov Region, while the annual initiative Comfort to Shelters saw more than 1.3 tons of pet food donated to homeless animals.

Maria Davydova, CEO of PJSC Detsky Mir:

“Detsky Mir Group once again stepped up the pace of its business growth and consolidation of the children’s goods market right across its footprint in Q1 2021. Our focus on digitalization and improving the customer experience, all while developing our assortment and logistics, has proved to be the right strategic course of action and is already making a significant contribution to the Company’s strong performance.

“We were able to increase Group GMV by 15.6% in the reporting quarter to RUB 39.6 bn. The online channel is currently the main driver of sales growth for us, accounting for almost a third of the Group’s business. Online sales in Russia grew 1.8x to RUB 10.9 bn in Q1, which continues to be one of the strongest results in the digital segment. Customer traffic in our traditional segment simultaneously started a trajectory of steady growth. LFL store sales across all countries of operation grew by 7.9%, while LFL number of tickets increased by 4.5%.

“In January, Detsky Mir had a bumper winter sales season, and we followed this up with impressive results in the Men’s day and Women’s day period in late February to early March. We were also able to make a strong start to the sales season for our spring collection of Apparel and Footwear, thanks to the compounding effect of a warm March and a low base, brought about by the COVID-19 lockdown at the end of March 2020. This resulted in the share of sales in the Toys category in total sales increasing by 1.4 p.p. year-on-year to 32.3%. The share of Apparel & Footwear in sales saw a growth of 1.6 p.p. year-on-year to 25.5%, with a 2.3x increase in sales in the online channel.

“Our unique assortment of private labels and direct imports, which we buy directly from manufacturers, is just one of our key competitive advantages, making Detsky Mir’s price tags the most attractive in the market. This assortment accounts for almost half of Company total sales, and 80% of Russia’s urban population can order from it online and pick up their goods at any Detsky Mir Group store as little as 60 minutes afterwards. We also launched a two-hour super-express delivery service directly from our stores across over 280 cities in Russia. The main task facing us now is to further increase the share of sales for our private labels, while strengthening our logistics infrastructure.

“I would like to draw your attention to some of the first highlights in the development of Detsky Mir’s own marketplace, launched in early October 2020. We were able to grow the product assortment on Detsky Mir’s online platforms to 321,000 SKUs in the reporting quarter, with more than 800 new brands available to our customers. The Marketplace’s contribution to Group GMV exceeded RUB 399 m, representing almost 4% of the Company’s total online sales in Russia.

“We also saw solid growth in sales of pet products (+67.2%) over Q1 2021. At more than half of all pet products sales, our online channel accounts for a significant portion of this business – much like with our core children’s segment.

“At the beginning of March, our shareholders elected a new Board of Directors. It is my pleasure to extend a warm welcome to our new independent directors and representatives of Altus Capital, the major shareholder. Independent directors now make up half of the Board, including the Chairwoman. This is one of the highest levels of board independence in Russia, and it means that Detsky Mir’s Board has an even more important role to play in growing the Company into the leading digital retailer in the children’s and family goods market.”

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

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Analyst and Investor Conference Call for Q1 2021 Unaudited IFRS Financial Results

12 April 2021. Moscow, Russia. – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY) announces that Q1 2021 Unaudited IFRS Financial Results will be released on April 29, 2021.

Detsky Mir will host a brief conference call for investors and analysts on IFRS results.

Please find the details of the conference call below.

Date: Thursday, April 29, 2021

Time: 16:00 (Moscow) 14:00 (London) 9:00 (New York)

Speakers:

Maria Davydova, Chief Executive Officer
Anna Garmanova, Chief Financial Officer
Sergey Levitskiy, Head of Strategy and Investor Relations

Russia

+7 495 283 98 58

UK/ International

+44 203 984 98 44

USA

+1 718 866 46 14

Conference ID

288 543

Online presentation

Web dial-in and Presentation

For additional information:

Julia Polikarpova

Head of Public Relations

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

upolikarpova@detmir.ru

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Expert RA Raises Detsky Mir’s Credit Rating to ruAA- with a Stable Outlook

Moscow, Russia, 25 March 2021 – PJSC Detsky Mir (“Detsky Mir” or the “Company”, MOEX: DSKY), the largest children’s goods retailer in Russia and Kazakhstan, announces that the rating agency Expert RA has revised the Company’s credit rating according to an updated methodology, improving it by one notch to ruАА– with a stable outlook. Previously, Detsky Mir’s credit rating stood at ruA+ with a stable outlook.

In its report, Expert RA outlines the key factors contributing to the credit rating, which include the Company’s leading position in the children’s retail market, the successful development of an omnichannel business model, sound profitability and a competitive pricing policy translating into robust sales growth rates. PJSC Detsky Mir has a low level of foreign currency exposure, coupled with an adequate amount of confirmed undrawn credit lines, as well as access to the capital debt market. Detsky Mir plans to refinance short-term liabilities, while keeping a low level of leverage.

Additional information is available at: https://raexpert.ru/

For additional information:

Julia Polikarpova

Head of Public Relations

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

upolikarpova@detmir.ru

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Detsky Mir Group Adjusted EBITDA Increased by 15.2% YoY in 2020

Moscow, Russia, 1 March 2021 – Detsky Mir Group (the “Group”, “Detsky Mir” or the “Company”, MOEX: DSKY), the largest children’s goods retailer in Russia and Kazakhstan, announces its audited financial results in accordance with International Financial Reporting Standards (IFRS) for the fourth quarter and twelve months ended 31 December 2020.

Q4 2020 Financial Highlights[1]

Group consolidated revenue increased by 14.3% year-on-year to RUB 44.5 bn, compared to RUB 38.9 bn in Q4 2019.
Online revenue[2] increased 2.2x year-on-year to RUB 12.7 bn.
- The share of online sales in total revenue of Detsky Mir in Russia increased 1.9x year-on-year to 29.8%.
- The share of in-store pick-up service amounted to 83.4%.
Revenue in Kazakhstan increased by 21.0% year-on-year to RUB 1.4 bn.
Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 5.9%. The number of tickets increased by 1.2%, while the average ticket grew 4.7%.
Like-for-like sales at Detsky Mir stores in Russia grew by 5.7%. The number of tickets increased by 1.4%, while the average ticket grew by 4.3%.
Detsky Mir opened 41 new branded stores[4] in Q4 2020, as well as 11 new Detmir Pickup stores and 7 new Zoozavr stores. The Group had 868 stores[5] as of 31 December 2020.
Total selling space increased by 6.4% year-on-year to approximately 897,000 sq. m.
The total number of Detsky Mir loyalty cards issued increased by 11.4% year-on-year to 26.8 m, while the number of active loyalty card holders[6] was 10.7 m. Transactions involving a loyalty card accounted for 84.2% of total sales.
Gross profit increased by 4.5% year-on-year to RUB 13.8 bn. The gross margin decreased by 3.0 p.p. year-on-year to 31.1%.
SG&A as a percentage of revenue[7] decreased by 2.7 p.p. year-on-year, driven by increased operational efficiency.
Adjusted EBITDA[8] increased by 14.2% year-on-year to RUB 5.9 bn; the adjusted EBITDA margin remained nearly flat year-on-year to 13.4%. EBITDA[9] totaled RUB 5.6 bn (+18.7% year-on-year).
Adjusted net profit[10] amounted to RUB 4.6 bn (+47.0% year-on-year). Net profit totaled RUB 4.3 bn (+57.7% year-on-year).
The net debt[11] increased by 2.7% year-on-year to 18.0 bn. The net debt/adjusted EBITDA ratio improved to 1.1x as of 31 December 2020 vs 1.2x as of 31 December 2019.

FY 2020 Financial Highlights

Group audited consolidated revenue increased by 11.0% year-on-year to RUB 142.9 bn, compared to RUB 128.7 bn in 2019.
Online revenue increased 2.4x year-on-year to RUB 34.8 bn.
- The share of online sales in total net revenue of Detsky Mir in Russia increased 2.2x year-on-year to 25.2%.
- The share of in-store pick-up service amounted to 82.2%.
Revenue in Kazakhstan increased by 1.6% year-on-year to RUB 3.8 bn.
Like-for-like sales at Detsky Mir stores in Russia and Kazakhstan grew 3.9%. The number of tickets decreased 1.5%, while the average ticket grew 5.5%.
Like-for-like sales at Detsky Mir stores in Russia grew 4.0%. The number of tickets decreased 1.4%, while the average ticket grew 5.4%.
Detsky Mir opened 71 new branded stores[12] in 2020, as well as 12 new Detmir Pickup stores and 10 new Zoozavr stores.
Gross profit increased by 5.9% year-on-year to RUB 44.0 bn, with a gross margin of 30.8%.
SG&A as a percentage of revenue decreased by 1.9 p.p. year-on-year, driven by increased operational efficiency.
Adjusted EBITDA increased by 15.2% year-on-year to RUB 17.0 bn; the adjusted EBITDA margin improved by 0.5 p.p. to 11.9%. EBITDA totaled RUB 16.2 bn (+17.3% year-on-year).
Adjusted net profit amounted to RUB 8.4 bn (+4.2% year-on-year). Net profit totaled RUB 7.8 bn (+6.3% year-on-year).

Q4 2020 Key Events

In December 2020, Detsky Mir paid out the entire net profit for 9M 2020 as an interim dividend, to a total of RUB 3.8 bn, or RUB 5.08 per ordinary share, bringing the total dividend payout in 2020 to RUB 7.8 bn, or RUB 10.58 per ordinary share, up 11.1% year-on-year.
In December 2020, Gulf Investments Limited (Altus Capital) acquired a 25.0% stake in Detsky Mir.
In December 2020, the Company’s Board of Directors resolved to convene an Extraordinary General Meeting of Shareholders on 12 March 2021, and following the recommendation of the Nomination and Remuneration Committee proposed that the Extraordinary General Meeting considered the following candidates to the new Board of Directors.
Furthermore, Detsky Mir opened its second flagship hypermarket in December 2020. Located in Moscow’s MEGA Teply Stan mall, the new store is designed as a shopping and entertainment space for both children and parents.
In December 2020, Detsky Mir signed an agreement with the developer PNK Group for the construction of a third federal distribution center outside Yekaterinburg. The site measures 63,200 sq. m and is slated for commissioning in Q1 2022.
In December 2020, Detsky Mir appointed Nikolay Ermakov as its new Chief Technical Officer and member of the Company’s Management Board. Mr. Ermakov brings more than 16 years of experience in information technology, digital transformation and product development (X5 Retail Group, Gett and Rambler & Co).
In November 2020, Detsky Mir took the top spot among Russian retailers on Russia’s 50 Best Employers 2020 List released by Forbes.
In October 2020, the Company signed a preliminary agreement to open an 8,000 sq. m regional distribution center in Kazan, based on Russian Post’s fulfillment center and scheduled for commissioning in Q2 2021.
In October 2020, Detsky Mir announced the full-scale launch of its own marketplace, which offers suppliers a new personal account functionality with all the necessary features, and has grown the total online assortment 2.5х to 250,000 SKUs.
In October 2020, the Company launched a super-express delivery service from Detsky Mir stores. Customers in 280 cities across Russia can now receive their orders within two hours of placing them on the website, and a good number of deliveries in Moscow are fulfilled by own courier service.
In October 2020, the Company continued to enhance the UX of the detmir.ru online store by launching a new personal account, optimizing the shopping cart and adding Apple Pay and Google Pay to the mobile application, with results of A/B testing showing that revenue per user increased by 15%.
Detsky Mir was included in the annual Corporate Philanthropy Leaders ranking under the Good Practice category.

Events after the Reporting Period

In February 2021, Detsky Mir’s Board of Directors approved a final list of candidates to the new Board of Directors, set to be voted upon at the Extraordinary General Meeting of Shareholders on 12 March 2021. Information on the candidates is available on the Company’s website at ir.detmir.ru.
In January 2021, Detsky Mir continued to expand its network of partner pickup points: we partnered with the largest tech retailer Svyaznoy (3,000 points of sale in 1,200 cities across Russia) and with the TelePort network of automated parcel lockers located in the lobbies of residential buildings and in convenience stores (about 10 new lockers are added to TelePort’s network every week).
Thanks to a strong Cyber Monday campaign, held from 25 to 29 January 2021, the Company’s online sales increased 2.3x year-on-year and continued to show one of the highest growth rates in the Russian e-commerce segment. On 25 January, Cyber Monday itself, online sales hit a peak at 40.1% of Detsky Mir’s total sales in Russia, with the share of orders made via the Company’s mobile app during the campaign reaching 73.5%.

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

“In 2020, Detsky Mir clearly consolidated its leadership of the children’s goods markets in Russia and Kazakhstan, and continued aggressively growing its business in the Belarusian market. At the same time, we delivered a strong set of financial results and launched new strategic initiatives.

“Online sales are becoming more popular with each passing year, a trend that was intensified in the reporting year due to the pandemic. Our omnichannel approach allowed us to cope with the increased demand and consolidate our position as one of the largest and fastest-growing e-commerce players in the Children’s category.

“Detsky Mir’s double-digit revenue growth over the reporting period was driven by a string of landmark achievements, including a 140% increase in online sales, the online channel making up 30% of total sales in Q4, the full-scale launch of our own marketplace, and the launch of our two-hour super-express delivery service from Detsky Mir stores. Keeping up the pace, in the first two months of 2021 we showed a growth rate in total revenue similar to that seen in Q4 2020.

“Our team’s strong focus on driving continuous improvements in operational efficiency and cost optimizations has enabled us to deliver an impressive operating profit growth rate and set a new record in operating margins in 2020. Adjusted EBITDA increased by 15.2% year-on-year to RUB 17.0 bn, and adjusted EBITDA margin was 11.9%, up 0.5 p.p. year-on-year.

“Detsky Mir’s financial position remains consistently strong, thanks to strict discipline and the Company’s ability to generate substantial operating cash flow. We successfully reduced our net debt/adjusted EBITDA ratio to 1.1x as of year-end 2020, while continuing to fully deliver on our investment and dividend programs.

“Detsky Mir is a unique growth story in the Russian equity market, combining double-digit business growth and high dividends. Despite the COVID-19 induced turbulence, restrictions and economic difficulties, we continued to pay dividends equal to the Company’s total net profit according to Russian Accounting Standards. As a result, total dividend payments increased by 11.1% year-on-year to RUB 7.8 bn, pushing total shareholder return for the year to greater than 45%, an outstanding figure.

“Our team will maintain its strong focus on increasing the Company’s market capitalization and dividends. With this said, PJSC Detsky Mir’s net profit for Q4 2020 under Russian Accounting Standards is expected to have reached around RUB 4.5 bn (+10% year-on-year). We will recommend to the Board of Directors and our Shareholders that the full net profit be distributed as a final dividend for the year.

“Looking ahead to 2021, we will continue to drive the digital transformation of our business, the development of our logistics and distribution networks, as well as the expansion of the product assortment on our marketplace. Our ambition is to double total sales and increase the share of online sales to 45% in 2024.”

View the full press release

***

Conference Call Information

Detsky Mir’s management will host a conference call today at 17:00 (Moscow time) / 14:00 (London time) / 9:00 (New York time) to discuss the Company’s FY 2020 audited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 283 98 58

+44 203 984 98 44

USA

+1 718 866 46 14

PIN

288 543#

Online presentation

Web dial-in and Presentation

For additional information:

Julia Polikarpova

Head of Public Relations

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

upolikarpova@detmir.ru

Sergey Levitskiy

Head of Investor Relations

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

slevitskiy@detmir.ru

Detsky Mir Group (MOEX: DSKY) is a multi-format digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, as well as a significant player in Belarus. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the detmir.ru online store and marketplace, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 834 Detsky Mir stores located in 331 cities in Russia, Kazakhstan and Belarus, 16 Detmir Pickup stores, as well as 21 Zoozavr stores as of 1 March 2021. The total selling space was approximately 899,000 square meters.

Detsky Mir’s shareholder structure: Gulf Investments Limited (Altus Capital) – 25%; Free-float[13] – 75%.

Websites: detmir.ru, ir.detmir.ru

Disclaimer:

Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of Detsky Mir. You can identify forward looking statements by terms such as “expect”, “believe”, “anticipate”, “estimate”, “intend”, “will”, “could,” “may” or “might” the negative of such terms or other similar expressions. Detsky Mir wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Detsky Mir does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Detsky Mir, including, among others, general economic conditions, the competitive environment, risks associated with operating in the Russian Federation, rapid technological and market change in the industries Detsky Mir operates in, impact of COVID-19 pandemic on macroeconomic situation on the markets of presence and financial results of Detsky Mir and its subsidiaries, as well as many other risks specifically related to Detsky Mir and its operations.

([1]) The Company’s consolidated financial measures for 2019–2020 and related interim periods are based on proforma financial information prepared as if IFRS 16 “Leases” had not been adopted, and thus do not represent IFRS measures.

([2]) This channel includes online orders at www.detmir.ru, including in-store pick-up in Russia.

([3]) Hereinafter like-for-like RUB sales growth, like-for-like number of tickets growth and like-for-like average ticket growth are based on stores in operation for at least 12 full calendar months. A store is included in the calculation of the monthly like-for-like if the difference between the worked periods in comparable months does not exceed three business days.

([4]) In Q4 2020, Detsky Mir closed one store.

([5]) Including 16 Detmir Pickup stores as well as 20 Zoozavr stores.

([6]) Cardholders who made at least one purchase at Detsky Mir during the last 12 months to 31 December 2020 are considered active.

([7]) Hereinafter, selling, general and administrative expenses is calculated as selling, general and administrative expenses adjusted for depreciation and amortization expenses, additional share-based compensation expense and cash bonuses under the LTI program.

([8]) Hereinafter, adjusted EBITDA is calculated as profit for the period before income tax expense, foreign exchange (loss)/gain, gain on acquisition of controlling interest in associate, finance expense, finance income, depreciation and amortization, adjusted for share-based compensation expense and cash bonuses under the LTI program. See Attachment A.

([9]) Hereinafter, see Attachment A for definitions and reconciliation of EBITDA to IFRS financial measures.

([10]) Hereinafter, adjusted net profit is calculated as profit for the period adjusted for the share-based compensation expense and cash bonuses under the LTI program. See Attachment A.

([11]) Hereinafter, net debt is calculated as total borrowings (defined as long term loans and borrowings and short-term loans and borrowings and current portion of long-term loans and borrowings) less cash and cash equivalents. Lease liabilities are not included in the calculation of net debt.

([12]) In 2020, Detsky Mir closed five stores. In Q3 2020, in order to improve profitability on the back of the accelerated opening of the compact-format Detmir Pickup stores, the Group decided to close ELC and ABC branded stores, the share of which in the total revenue of the Group comprised less than 0.3% in 2020.

([13]) Including quasi-treasury shares and shares held by management and directors (0.7% of total shares).

Contacts

ir@detmir.ru