Detsky Mir Announces the Date of AGM

Moscow, Russia, 26 May 2020 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that its Board of Directors at a meeting on 25 May 2020 resolved to convene the Annual General Meeting of Shareholders (AGM). The AGM will be held by absentee vote, and the deadline for receipt of completed ballots is 30 June 2020. The record date for the AGM is 5 June 2020.

The Board of Directors recommended that PJSC Detsky Mir’s AGM approve a final dividend for 2019 of RUB 2,217,000,000 (90% of IFRS net profit[1] or 55% of RAS net profit¹), or RUB 3.0 per ordinary share.

The Board of Directors recommended that the AGM set the record date for dividend for 11 July 2020.

The AGM materials will be available on the Company’s website (ir.detmir.ru), as well as on Interfax’s website (e-disclosure.ru) and by request at the Company’s corporate secretariat: 3 3rd Nizhnelikhoborsky proyezd, Bld. 6, 127238, Moscow after 9 June 2020.

Shareholders may register to participate in the AGM, fill out the electronic ballot form and vote via the electronic voting service online (www.aoreestr.ru/shareholders/e-voting).

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

“Despite the remaining uncertainty around lockdown length, we have decided to recommend that in Q2 2020 the Company’s Board of Directors and shareholders distribute slightly over one half of RAS net profit for Q4 2019 as a dividend.

Maintaining financial stability is a top priority for the Company during the current crisis. Thanks to our strong liquidity, we have sufficient financial ability to pay the full dividend; however, amid this period of high turbulence, we have a responsibility to the future of our business and have therefore suggested a different decision to the Board of Directors. The Company is still at the very beginning of the road back to normality, but we are convinced that we can recommend that the Board of Directors pay the remaining undistributed earnings for Q4 2019 before year-end.”

Vladimir Chirakhov, PJSC Detsky Mir Chairman of the Board of Directors, said:

“Detsky Mir’s investment case is driven by the combination of strong business growth and high dividends; therefore, the Board of Directors has supported management’s recommendation to pay the final dividend for 2019 despite a challenging situation in the country. At the same time, we recognize the need to take a more conservative approach and postpone the second part of 2019 final dividend payment until the second half of 2020.”

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre) branded retail stores in Russia and the ABC retail chain, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 772 Detsky Mir stores located in 297 cities in Russia, Kazakhstan and Belarus, 5 Detmir Pickup stores, as well as 46 ELC, 12 ABC and 11 Zoozavr stores as of 31 March 2020. Total selling space is approximately 847,000 sq. m.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[2] – 33.38%, the Russia-China Investment Fund (RCIF)[3] 9.0% and free-float 57.62%.

Learn more at www.detmir.ru, elc-russia.ru and ir.detmir.ru.

Disclaimer

Some of the information in this document 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, a competitive environment, risks associated with operating in the Russian Federation, rapid technological and market change in the industries where Detsky Mir is active, the impact of the COVID-19 pandemic on the macroeconomic situation in the markets in which Detsky Mir operates and the financial results of Detsky Mir and its subsidiaries, as well as other risks specific to Detsky Mir and its operations.

([1]) Calculated based on the recommended dividend payments and net profit for Q4 2019. In December 2019, Detsky Mir paid an interim dividend for 9M 2019 to a total of RUB 3.7 billion, or RUB 5.06 per ordinary share. The Company applied IFRS 16 “Leases”.

([2]) PJSFC Sistema is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, paper and packaging, agriculture, real estate, hospitality and healthcare services.

([3]) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its two subsidiaries: Floette Holdings Limited and Exarzo Holdings Limited.

Detsky Mir Achieves Record Online Sales Growth in April 2020

Moscow, Russia, 20 May 2020 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces its sales results for April 2020.

The Company demonstrated an explosive online sales growth in April, increasing its sales via the Detmir.ru online store and Detsky Mir mobile app by 3.8x year-on-year to RUB 3.3 billion (including VAT) and delivering 1.9 million online orders of children’s goods in Russia. During the peak demand period, Detsky Mir’s orders hit 115,000 in 24 hours. For context, only the Black Friday sale at the end of 2019 topped this, with 124,000 orders completed in one day. The online share of Detsky Mir’s total sales in Russia grew almost fivefold year-on-year to 42%.

Apparel and footwear (+480%), baby food (+436%), as well as toys (+326%) were the top performing online categories. Pet supplies also recorded a stellar performance, with the category’s online sales growing 14x year-on-year. During the lockdown period, arts and crafts and board games (+874%) became the top sellers in the toys category. Customers in Moscow, Saint Petersburg, Samara, Yekaterinburg and Nizhny Novgorod were our most frequent online shoppers.

In April, amidst the challenging epidemiological situation in Russia, we saw an increased demand for our courier delivery service. This channel achieved almost a 30% share in total online sales for the month. Detsky Mir successfully launched a next-day delivery service in 30 of the largest Russian cities in late 2019. The Company also offers an express delivery service in 19 cities across Russia, with goods delivered within hours of ordering from the online store.

More than 70% of online revenue came from in-store pickup at Detsky Mir retail stores. The Company continues to offer an unrivalled order fulfillment service: 95% of all online orders picked in-store can be collected from the checkout within 60 minutes of ordering.

As of 20 May 2020, the majority of stores operated by the Group in Russia remain open, with 62 Detsky Mir stores out of the total 729 temporarily closed. In Kazakhstan, 30 stores out of the total 38 have been temporarily closed, with pickup points set up at 13 closed locations so that customers are able to collect goods ordered from the Detsky Mir online store. The Belarusian retail chain Detmir is operating normally.

In April 2020, Group unaudited revenue including the online segment decreased by 20% year-on-year to RUB 7.5 billion. At the same time, Group sales including the temporarily closed stores grew by 2% year-on-year for the first 18 days of May 2020.

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

“In April, we experienced a record-high growth in online sales, with our solid logistics and IT capacity allowing us to meet the increased demand and fulfill all our obligations to customers in a timely manner. Today, as growth rates have stabilized, our retail chain is demonstrating steady increases in sales.

E-commerce is not only a high-growth business segment but also a vital tool for combating the spread of coronavirus (COVID-19) in society. The Detsky Mir team managed to quickly adapt our business processes to a changing environment to ensure the safety of our customers and employees. We have rolled out “contactless” online delivery, with our online store couriers and staff at offline stores and distribution centers fully equipped with the required personal protective equipment, and disinfection efforts stepped up across all sales spaces and buildings.

The key drivers of our online segment’s strong performance are competitive pricing, a fast delivery service, and a wide product assortment. Today, we are not only developing a multi-channel retail chain but are also driving the digital transformation of all business processes to provide a seamless shopping experience across multiple sales channels.

Our new mobile app has also been increasingly gaining traction with our customers since its launch in late 2019, already generating 50% of our online sales.

We target a full-scale rollout of our children’s goods marketplace by Q3 2020 and plan to enhance our online store’s logistics infrastructure by launching its first regional warehouse in the Southern Federal District, measuring about 6,000 sq. m.”

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre) branded retail stores in Russia and the ABC retail chain, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 772 Detsky Mir stores located in 297 cities in Russia, Kazakhstan and Belarus, 5 Detmir Pickup stores, as well as 46 ELC, 12 ABC and 11 Zoozavr stores as of 31 March 2020. Total selling space is approximately 847,000 sq. m.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1] – 33.38%, the Russia-China Investment Fund (RCIF)[2] 9.0% and free-float 57.62%.

Learn more at www.detmir.ru, elc-russia.ru and ir.detmir.ru.

(1) PJSFC Sistema is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, paper and packaging, agriculture, real estate, hospitality and healthcare services.

(2) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its two subsidiaries: Floette Holdings Limited and Exarzo Holdings Limited.

Detsky Mir Group Adjusted EBITDA Increased by 20.5% YoY to RUB 2.3bn in Q1 2020

Moscow, Russia, 30 April 2020 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the first quarter ended 31 March 2020.

Q1 2020 Financial Highlights[1]

• Group unaudited revenue increased by 11.2% year-on-year to RUB 31.0 bn.
  • Online revenue[2] increased by 110.5% year-on-year to RUB 5.4 bn.
  • Revenue in Kazakhstan rose by 31.1% year-on-year to RUB 974 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 4.0%. The number of tickets grew by 4.4%, while the average ticket decreased 0.4%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 3.5%. The number of tickets grew by 3.9%, while the average ticket decreased by 0.4%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 25.7%.
• Detsky Mir opened 8 new branded stores[5] in Q1 2020. The Group had 846 stores[6] as of 31 March 2020.
• Total selling space increased by 10.2% year-on-year to approximately 847,000 sq. m.
• Gross profit increased by 12.4% year-on-year to RUB 9.1 bn, with a gross margin of 29.3%.
• SG&A as a percentage of revenue[7] decreased by 0.3 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[8] increased by 20.5% year-on-year to RUB 2.3bn; the adjusted EBITDA margin improved by 0.6 p.p. to 7.3%. EBITDA[9] totalled RUB 1.9bn (+16.8% year-on-year).
• Adjusted net profit[10] amounted to RUB 15m. Net losses totalled RUB 255m.
• The net debt[11]/adjusted EBITDA LTM ratio improved to 1.6x as of 31 March 2020. 

Q1 2020 Key Events

• In February 2020, Detsky Mir launched Manu, a new private-label brand of diapers, in the children’s goods markets of Russia, Kazakhstan and Belarus. Developed in partnership with Unicharm, Japan’s largest diaper manufacturer, Manu offers premium Japanese quality for a medium price, giving it a competitive edge over other global brands.
• In March 2020, the Company’s Board of Directors approved the early termination of appointment of Vladimir Chirakhov as the Company’s CEO, to be succeeded by Maria Davydova, Deputy CEO of Commercial Activities since 3 April 2020. Vladimir Chirakhov was elected as Chairman of the Board of Directors of PJSC Detsky Mir.
• In March 2020, Detsky Mir was added to Russia’s list of systemically important companies. In implementing the Presidential Decree On the Announcement of a Public Holiday until the End of April, the Government approved a 23-category-strong list of essential non-food supplies. As diapers, baby pacifiers, feeding bottles and babycare products are included in the list, the decree provides a legal basis for the Detsky Mir retail chain to continue to provide essential supplies to the population while the country is on high alert.
• In March 2019, Expert RA rating agency reiterated Detsky Mir a long-term credit rating of ruA+ with a stable outlook.
• As part of its long-term incentive programme (LTIP), the Company repurchased 1,212,210 ordinary shares of Detsky Mir for RUB 90 m, representing 0.16% of the share capital of the Company.

Events after the Reporting Period

• As of 30 April 2020, the majority of stores operated by Detsky Mir in Russia remain open, with a total of 84 stores temporarily closed due to the spread of the coronavirus (COVID-19). Zoozavr and Detmir Pickup stores are continuing normal operation, while ELC and ABC stores are temporarily closed. In Kazakhstan, 36 stores have been temporarily closed, with pickup points set up at 12 closed locations so that customers are able to collect goods ordered from the Detsky Mir online store. The Belarusian retail chain Detmir is operating normally.
• Group unaudited revenue decreased by 33% year-on-year in first 27 days of April (-19% YoY last week), while online revenue rose by 3.5x year-on-year. The online share of Detsky Mir’s total sales in Russia reached 41%.
• In April 2020, Detsky Mir successfully issued its series BО-06 exchange-traded bond with a nominal value of RUB 3 bn and a coupon rate of 7.0% p.a. The put option is in 3 years.

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

“As with previous downturns, this crisis has confirmed that we have selected a highly effective business model, driven by our omnichannel and multi-category proposition. During the first quarter, we were able not only to increase the Company’s share across all our markets, but also to achieve explosive growth in the online segment.  We have also been keeping to our strategy of low prices to maintain traffic and improve operational efficiency. As a result, we have posted strong adjusted EBITDA growth, almost twice as high as revenue growth rates.

“However, in mid-March we faced with the impact of COVID-19 outbreak, rapidly unfolding in Russia and around the world and leading to a considerable drop in traffic across our stores. Detsky Mir is responding in a consistent manner to ensure employee and customer safety, as well as to maintain the necessary stock of essential goods. We have also significantly streamlined our operating expenses, including through temporary store closures in large shopping malls. Most of our Russian stores remain open to continue playing the important societal role of providing essential food and non-food products for children.

“Right now, we are placing a strong focus on e-commerce. In March, we boosted the share of our online revenue to 25%. Despite a higher demand for online shopping, our logistics and IT infrastructure are ready to absorb a twofold growth of the online segment. We are planning to expand our e-commerce presence by developing our children’s goods marketplace, increasing our product assortment in this category from 50,000 to 1 million SKUs.

“Maintaining financial stability is a top priority for the Company during the crisis. In March and April, we have refinanced more than RUB 11 bn of our short-term debt. We have also decided to increase the Company’s cash balances to RUB 10.8 bn so as to ensure business continuity in the event of a further economic or epidemiologic downturn in the country.

“We remain fully committed to the Company’s mid-term targets announced in early March: we are planning to open at least 300 stores with a 40% IRR and maintain our double-digit adjusted EBITDA margin. We also see strong potential in pursuing our new compact format of stores, with this segment tentatively estimated at 2,000 stores. However, our 2020 targets may be subject to change after the second quarter.”

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 2020 unaudited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 283 98 58

UK

+44 203 984 98 44

USA

+1 718 866 46 14

PIN

288 543#

Online presentation 

Detsky_Mir_Webcast

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 772 Detsky Mir stores located in 297 cities in Russia, Kazakhstan and Belarus, five Detmir Pickup stores, as well as 46 ELC, 12 ABC and eleven Zoozavr stores as of 31 March 2020. Total selling space was approximately 847,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[12]  – 33.38%, Russia-China Investment Fund (RCIF) [13] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.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.

([3]) Hereinafter like-for-like average growth, like-for-like number of tickets growth and like-for-like revenue growth are based on stores in operation for at least 12 full calendar months.

([4]) Calculated in the national currency of Kazakhstan (tenge).

([5]) In Q1 2020, Detsky Mir closed two stores.

([6]) Including 58 ELC and ABC stores, five Detmir Pickup stores as well as eleven Zoozavr stores.

([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. Adj. EBITDA LTM is calculated as adj. EBITDA for the last 12-months period.

([12]) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

([13]) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

Detsky Mir Announces Book Closing of Exchange-Traded Bonds of RUB 3 bn with a 7% Coupon Rate

Moscow, Russia, 29 April 2020 – Detsky Mir PJSC (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces the successful book closing of its series BО-06 exchange-traded bond issue with a nominal value of RUB 3 bn and a coupon rate set at 7.0% p.a.

Transaction Details

• On April 28, 2020, Detsky Mir PJSC opened order book for the RUB 3 bn Series BO-06 bond issue with the initial price guidance of 7.00-7.25% p.a.
• The final coupon rate was set at 7.0% p.a.
• The put option — 3 years. 
• The settlement of the bond is scheduled on May 7, 2020 at PJSC Moscow Exchange. Bank Derzhava, Solid Invest, MKB, MTS Bank, Sberbank CIB acted as lead underwriters of the transaction. Gazprombank will act as a placement agent.

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 772 Detsky Mir stores located in 297 cities in Russia, Kazakhstan and Belarus, five Detmir Pickup stores, as well as 46 ELC, 12 ABC and eleven Zoozavr stores as of 31 March 2020. Total selling space was approximately 847,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 33.38%, Russia-China Investment Fund (RCIF) [2] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.ru, ir.detmir.ru

(1) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

(2) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

Analyst and Investor Conference Call for Q1 2020 Unaudited IFRS Financial Results

20 April 2020. Moscow, Russia. – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that Q1 2020 Unaudited IFRS Financial Results will be released on April 30, 2020.             

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 30, 2020

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 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

Detsky_Mir_Webcast

 ***

For additional information:

Detsky Mir’s Online Sales Doubled YoY in Q1 2020

Moscow, Russia, 15 April 2020 – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces its operating results for the first quarter ended 31 March 2020.

Q1 2020 Operating Highlights[1]

• Group unaudited revenue increased by 11.2% year-on-year to RUB 31.0 bn.
  • Online revenue[2] increased by 110.5% year-on-year to RUB 5.4 bn.
  • Revenue in Kazakhstan rose by 31.1% year-on-year to RUB 974 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 4.0%. The number of tickets grew by 4.4%, while the average ticket decreased 0.4%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 3.5%. The number of tickets grew by 3.9%, while the average ticket decreased by 0.4%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 25.7%.
• Detsky Mir opened 8 new branded stores[5] in Q1 2020. The Group had 846 stores[6] as of 31 March 2020.
• Total selling space increased by 10.2% year-on-year to approximately 847,000 sq. m.
• The total number of issued Detsky Mir loyalty cards increased by 14.3% year-on-year to 24.7 mn, while the number of active loyalty cardholders[7] was 10.6 mn. Transactions using the loyalty card accounted for 81% of total sales.

Q1 2020 Key Events

• In February 2020, Detsky Mir launched Manu, a new private-label brand of diapers, in the children’s goods markets of Russia, Kazakhstan and Belarus. Developed in partnership with Unicharm, Japan’s largest diaper manufacturer, Manu offers premium Japanese quality for a medium price, giving it a competitive edge over other global brands.
• In March 2020, the Company’s Board of Directors approved the early termination of appointment of Vladimir Chirakhov as the Company’s CEO, to be succeeded by Maria Davydova, Deputy CEO of Commercial Activities since 3 April 2020. Vladimir Chirakhov was elected as Chairman of the Board of Directors of PJSC Detsky Mir.
• In March 2020, Detsky Mir was added to Russia’s list of systemically important companies. In implementing the Presidential Decree On the Announcement of a Public Holiday until the End of April, the Government approved a 23-category-strong list of essential non-food supplies. As diapers, baby pacifiers, feeding bottles and babycare products are included in the list, the decree provides a legal basis for the Detsky Mir retail chain to continue to provide essential supplies to the population while the country is on high alert.
• In March 2019, Expert RA rating agency reiterated Detsky Mir a long-term credit rating of ruA+ with a stable outlook.
• As part of its long-term incentive programme (LTIP), the Company repurchased 1,212,210 ordinary shares of Detsky Mir for RUB 90 m, representing 0.16% of the share capital of the Company.

Events after the Reporting Period

• As of 15 April 2020, most stores operated by Detsky Mir in Russia remain open, with a total of 88 stores closed temporarily due to the spread of the coronavirus (COVID-19). In Kazakhstan, 36 stores have been temporarily closed, with pickup points set up at 19 closed locations for customers to be able to collect the goods ordered from the Detsky Mir online store.

View the full press release

Vladimir Chirakhov, PJSC Detsky Mir Chairman of the Board of Directors, said:

“At Detsky Mir, we are more than just the industry leader – today, we are systemically important company to Russia, as we play a socially significant role of providing children with essential food and non-food items.  The prominent position that Detsky Mir occupies in the Russian market is all down to our affordable prices, wide choice of children’s goods, a well-developed e-commerce platform, convenient store locations, and a strong social commitment.

“During the 2014–2015 crisis, our team proved its worth by delivering the best set of results in the Company’s entire history, and the success of our chosen strategy has been time and time again evidenced by our robust financial performance and strong levels of interest from investors. Once more we have been able to take all the necessary steps in anticipation of considerable risks to our business: adapting business processes to facilitate quick responses to a rapidly changing environment, maximizing safety for our employees and customers, as well as ensuring we have the required inventory of essential goods.

“This superior agility and our overall success are driven by Detsky Mir’s high-performance team, which over the past eight years has been consistently proving that the Company can tackle any challenge, and is well positioned for the growth opportunities that lie ahead.”

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

“Despite the challenging economic and epidemiological situation both in Russia and on a global scale, Detsky Mir has delivered strong business growth: our consolidated unaudited revenue rose by 11.2% year-on-year to RUB 31.0 billion.

“We made a strong showing over the New Year season and the traditional Russian ‘Men’s Day’ and ‘Women’s Day’ holiday period during the first quarter. However, the significant growth in demand for essential goods seen in mid-March was followed by a marked decline in traffic across shopping malls in the last ten days of the month. As a result, like-for-like sales in Russia and Kazakhstan increased by 4.0%, driven largely, as before, by the growth in the number of tickets, at 4.4% in Q1 of 2020.

“Essentials like diapers, baby food and babycare products were the fastest growing categories in the first quarter, increasing their share in the chain’s total revenue by 1.7 p.p. year-on-year to 36%. In the apparel and footwear category, we successfully sold off our winter collection and generated strong sales at the start of the spring/summer season, with the share of these goods hitting 24% of total Detsky Mir sales in Russia.

“Toys were also a strong performer in Like-for-like sales; however, their share in Detsky Mir’s total sales decreased to 31% in Q1, on the back of strong demand for essential items. The month-end spike in demand for arts and crafts and board games brought the share of this category in total toys sales up to 17.6% for March 2020 (up 1.4 p.p. year-on-year).

“We have been pushing 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. The share of private labels and direct contracts in total sales has grown by 2.1 p.p. year-on-year to 39.6% over the first quarter.

“The current market dynamics reinforce the role of e-commerce as the key business segment, and Detsky Mir has maintained superior customer service levels in online delivery, as consumers increasingly move their shopping online. Detsky Mir’s online revenue more than doubled year-on-year to RUB 5.4 billion in Q1 2020.The online share of Detsky Mir’s total sales in Russia reached 25% in March.This strong online performance was led by essentials, with sales of diapers and baby food more than tripling year-on-year on detmir.ru, amidst increased demand for our online courier delivery service. We leverage our extensive retail network of brick-and-mortar stores to offer a next-day direct delivery option to our customers in the 30 largest Russian cities. Nevertheless, our in-store pickup service for online orders remains the biggest sales channel, accounting for 80% of total sales in March. Our new mobile app has also been increasingly gaining traction with our customers since its launch in late 2019, with as many as 2.1 million downloads at Q1-end, and a 40% share of online sales in the last week of March.

“We are also delighted with the strong performance of our key pilots in Q1 2020: the apparel and footwear category expanded its assortment by 50% to 30,000 SKUs, driven by our marketplace development efforts. We expect the assortment in this category to grow to 50,000 SKUs by the end of the second quarter, and have plans to launch a marketplace for fast moving consumer goods. Our piloted Detmir Pickup compact stores and Zoozavr pet supplies stores have absolutely smashed their sales targets, emerging as strong performers in the current market environment. Detailed growth plans for these chains will not be announced until the end of Q2 2020, when we will take stock of the pilot outcomes.

“We have been agile in our responses to the emerging challenges surrounding the coronavirus (COVID-19) outbreak. We are fully aware of the Company’s responsibilities, and the social importance of our continued work during this challenging lockdown period, and have rolled out ‘contactless’ online delivery to maximize safety for our customers stuck at home. Our online store couriers and staff at offline stores and distribution centers have been fully equipped with the required personal protective equipment, and disinfection efforts have been stepped up across all our sales spaces and buildings.”

***

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir Pickup retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a retail chain of 772 Detsky Mir stores located in 297 cities in Russia, Kazakhstan and Belarus, five Detmir Pickup stores, as well as 46 ELC, 12 ABC and eleven Zoozavr stores as of 31 March 2020. Total selling space was approximately 847,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[8]  – 33.38%, Russia-China Investment Fund (RCIF) [9] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.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.

([3]) Hereinafter like-for-like average growth, like-for-like number of tickets growth and like-for-like revenue growth are based on stores in operation for at least 12 full calendar months.

([4]) Calculated in the national currency of Kazakhstan (tenge).

([5]) In Q1 2020, Detsky Mir closed two stores.

([6]) Including 58 ELC and ABC stores, five Detmir Pickup stores as well as eleven Zoozavr stores.

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

([8]) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

([9]) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

Expert RА Agency Reiterated ruA+ Credit Rating to Detsky Mir; Outlook Stable

March 26, 2020 Moscow, Russia. – PJSC Detsky Mir (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that Expert RA rating agency has reiterated Detsky Mir a long-term credit rating of ruA+ with a stable outlook.

According to the report, Expert RA outlines the key factors contributing to this credit rating, which include the Company’s leading position in the retail market of children’s goods, demonstrating sound profitability and a competitive pricing policy translating into robust like-for-like annual sales growth rates. PJSC Detsky Mir has the low level of foreign currency exposure. The company has an adequate amount of confirmed undrawn credit lines, as well as access to the capital debt market, the Company plans to refinance short-term liabilities for a period of more than one year.

Additional information is available on the website: https://raexpert.ru/

***

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s and Kazakhstan’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir.ru retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a network of 766 Detsky Mir stores located in 293 cities in Russia, Kazakhstan and Belarus, 4 Detmir.ru stores, as well as 49 ELC, 13 ABC and ten Zoozavr stores as of 31 December 2019. Total selling space was approximately 843,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 33.38%, Russia-China Investment Fund (RCIF) [2] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.ru, ir.detmir.ru

(1) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

(2) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

Detsky Mir Repurchased its Own Shares for Long-Term Incentive Programme

March 23, 2020 Moscow, Russia. – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that it has repurchased the Company’s shares.

As part of its long-term incentive programme (LTIP), the Company repurchased 1,212,210 ordinary shares of Detsky Mir for RUB 90 m, representing 0.16% of the share capital of the Company.

Detsky Mir will continue to execute share buy-back via open market purchases in accordance with the terms of the current LTIP. The duration of the LTIP covers the three-year period from the end date of the previous program (February 8, 2020) to February 7, 2023. Senior management team in continuing employment by the Company and being program members upon the date of April 30, 2024 will be eligible for the Company’s share grants and cash payments in the total size of the bonus fund in value to up to 4.6% of the increase in the Company’s stock market value (including dividend payments) over the period. The LTIP includes more than 20 key employees of the Company.

***

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s and Kazakhstan’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir.ru retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a network of 766 Detsky Mir stores located in 293 cities in Russia, Kazakhstan and Belarus, 4 Detmir.ru stores, as well as 49 ELC, 13 ABC and ten Zoozavr stores as of 31 December 2019. Total selling space was approximately 843,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 33.38%, Russia-China Investment Fund (RCIF) [2] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.ru, ir.detmir.ru

(1) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

(2) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

Detsky Mir Group Adjusted EBITDA Increases by 16.3% to rub 14.7 bn in 2019

Moscow, Russia, 2 March 2020 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces its audited financial results in accordance with International Financial Reporting Standards (IFRS) for the fourth quarter and twelve months ended 31 December 2019.          

Q4 2019 FINANCIAL HIGHLIGHTS[1]

• Group audited revenue increased by 13.4% year-on-year to RUB 38.9 bn.
  • Online revenue[2] increased by 59.8% year-on-year to RUB 5.8 bn.
  • Revenue in Kazakhstan rose by 41.5% year-on-year to RUB 1.2 bn.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 5.0%. The number of tickets grew by 7.9%, while the average ticket decreased 2.7%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 4.7%. The number of tickets grew by 7.4%, while the average ticket decreased by 2.5%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 27.4%.
• Detsky Mir opened 56 new branded stores in Q4 2019. The Group had 842 stores as of 31 December 2019.[5]
• Total selling space increased by 9.7% year-on-year to approximately 843,000 sq. m.
• Gross profit increased by 12.3% year-on-year to RUB 13.3 bn, with a gross margin of 34.1%.
• SG&A as a percentage of revenue[6] decreased by 0.1 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[7] increased by 12.4% year-on-year to RUB 5.2bn; the adjusted EBITDA margin was 13.4%. EBITDA[8] totalled RUB 4.7bn (+11.0% year-on-year).
• Adjusted net profit[9] increased by 9.4% year-on-year to RUB 3.1bn. Net profit totalled RUB 2.8bn (+5.6% year-on-year).
• The net debt[10]/adjusted EBITDA LTM ratio stood at 1.2x as of 31 December 2019. 

FY 2019 FINANCIAL HIGHLIGHTS

• Group audited revenue increased by 16.1% year-on-year to RUB 128.8 bn.
• Online revenue increased by 65.2% year-on-year to RUB 14.5 bn.
• Revenue in Kazakhstan rose by 48.8% year-on-year to RUB 3.7 bn.
• Like-for-like sales at Detsky Mir stores in Russia and Kazakhstan grew by 7.2%. The number of tickets grew by 8.5%, while the average ticket decreased by 1.2%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.8%. The number of tickets grew by 7.9%, while the average ticket decreased by 1.0%.
• Like-for-like sales at Detsky Mir stores in Kazakhstan increased by 35.5%.
• Detsky Mir opened 101 new branded stores[11] in 2019.
• Gross profit increased by 12.8% year-on-year to RUB 41.5 bn, with a gross margin of 32.3%.
• SG&A as a percentage of revenue decreased by 1.0 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA increased by 16.3% year-on-year to RUB 14.7 bn; the adjusted EBITDA margin amounted to 11.4%. EBITDA totalled RUB 13.8 bn (+16.4% year-on-year).
• Adjusted net profit increased by 11.0% year-on-year to RUB 8.0 bn. Net profit totalled RUB 7.3 bn (+10.6% year-on-year).

Q4 2019 KEY EVENTS

• In December 2019, Detsky Mir paid an interim dividend for the first nine months of 2019 to a total of RUB 3.7 bn, or RUB 5.06 per ordinary share, bringing the total dividend declared in 2019 to RUB 7.0 bn, which is equivalent to a dividend yield[12] of 10.4%.
• In December 2019, the Company announced plans to enter the Kyrgyz market. Detsky Mir’s goal is to open its first store in Kyrgyzstan in 2020 and become a market leader in the mid-term.
• In December 2019, Detsky Mir announced the launch of active trials of the new Detmir.ru store format. The format utilizes a selling space of roughly 130–170 sq. m, primarily in cities with a population of less than 40,000 inhabitants. The total market capacity of such locations is now estimated at 2,000 Detmir.ru stores.
• In November 2019, PJSFC Sistema (the majority shareholder of the Company), and the Russia-China Investment Fund (RCIF) successfully priced the offering of Detsky Mir shares. The offering size was 175 million existing shares in Detsky Mir, representing 23.7% of Detsky Mir’s issued share capital. The offering increased the free float of the Company to 57.6%. PJSFC Sistema has a remaining ownership interest of 33.4% and RCIF has a remaining interest of 9.0% in the Company.
• In November 2019, Detsky Mir launched the pilot version of a children’s fashion marketplace. As part of the pilot, the assortment was increased by 5,000 SKUs, taking into account the size range.
• In November 2019, Detsky Mir launched the pilot of a full-feature mobile application, enabling customers to make purchases via the convenient online interface while using a virtual loyalty card.
• In October 2019, the Company launched a next-day delivery service (last-mile delivery) priced at RUB 99 for orders placed via Detsky Mir’s online store, making the service available in 30 major Russian cities. Compared to express delivery, the service offers a wider geographic coverage (including regional cities), as well as a wider assortment of goods.
• In October 2019, the Board of Directors approved a new Long-Term Incentive Plan (LTIP) for the senior management of Detsky Mir. The new LTIP covers the 3-year period from the end date of the current program (February 8, 2020) through February 7, 2023. Senior executives who are program members and continue to be employed by the Company on April 30, 2024 will be eligible for share grants and cash payments totaling up to 4.6% of the increase in the Company’s stock market value (inclusive of dividend payments) over the three-year period. The new LTIP includes more than 20 key employees.

EVENTS AFTER THE REPORTING PERIOD

• In February 2020, Detsky Mir launched Manu, a new private-label brand of diapers, in the children’s goods markets of Russia, Kazakhstan and Belarus. Developed in partnership with Unicharm, Japan’s largest diaper manufacturer, Manu offers premium Japanese quality for a medium price, giving it a competitive edge over other global brands.

Vladimir Chirakhov, PJSC Detsky Mir Chief Executive Officer, said:

“In 2019, Detsky Mir consolidated its leadership of the Russian and Kazakhstan children’s goods markets, and successfully entered the Belarusian market. We were able to accelerate our total sales growth to 16.1% year-on-year, with consolidated revenue for FY 2019 reaching RUB 128.8 billion. At the same time, we have maintained our strong focus on driving extra footfall through low pricing and improved business processes. This has allowed us to grow faster than any other public Russian retailer in like-for-like sales, without sacrificing our strong EBITDA  margins.

 he Company’s key achievements of 2019 include the 101st new store opening, a 65% growth of online sales with a double-digit EBITDA margin, along with the launch of an online courier delivery service and a full-feature mobile application.

The successful secondary public offering (SPO) of PJSC Detsky Mir was another key highlight of the year. We are delighted with the positive response to our offering on the Russian stock market, and are now pleased to move forward with a high-quality and geographically diverse shareholder base.

In 2019, we distributed the Company’s entire net profit, totaling RUB 7.0 billion for the relevant periods, as dividends. Since then, we have substantially improved our financial position through strict investment discipline, cutting our net debt and Net Debt to EBITDA ratio compared to 2018. Our team will maintain a focus on increasing the Company’s market capitalization and dividends. PJSC Detsky Mir’s net profit for Q4 2019 under Russian Accounting Standards may increase by 23% year-on-year to RUB 4.1 billion. We will recommend distributing the entire net profit as a dividend for the year.

In 2020, we are planning to continue the expansion of Detsky Mir store network while focusing on an omnichannel business model. In the medium term, we are planning to open at least 300 stores with a 40% IRR. A top priority for us is to offer our customers a wide assortment of affordable products, including through fostering our private labels and launching a full-scale marketplace. We also see strong potential in pursuing the new extra-small format of stores to increase our presence in smaller towns and other locations while improving online delivery. A preliminary estimate puts total market capacity of such locations at 2,000 stores.”

View the full press release

Guidance

The Company’s management team expects to open at least 300 new Detsky Mir stores in Russia, Kazakhstan and Belarus with IRR of around 40% in the next 3–4 years. The Company currently expects that like-for-like sales in Russia may grow faster than the children’s goods market as a whole, and remain at single digits due to an increase in the number of tickets in 2019. As a result of the further development of the omnichannel business model, the Company aims to achieve a 30% share of online sales in the total revenue of Detsky Mir in Russia in the medium term.

Another key strategic goal of the Group in the medium term is to boost operational efficiency and maintain the adjusted EBITDA margin at double-digit levels under IAS 17, or in upper-teens under IFRS 16.

In accordance with Russian Accounting Standards (RAS), the Company’s management will recommend distributing the entire net profit for 2019 as a dividend. Thus, the final dividend for 2019 may increase by 23.0% year-on-year to RUB 4.1 bn.

***

CONFERENCE CALL INFORMATION

Detsky Mir’s management will host a conference call today at 16:00 (Moscow time) / 13:00 (London time) / 8:00 (New York time) to discuss the Company’s FY 2019 audited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 283 98 58

UK

+44 203 984 98 44

USA

+1 718 866 46 14

PIN

288 543#

Online presentation 

Detsky_Mir_Webcast

For additional information:

Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir.ru retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The Company operates a network of 766 Detsky Mir stores located in 293 cities in Russia, Kazakhstan and Belarus, 4 Detmir.ru stores, as well as 49 ELC, 13 ABC and ten Zoozavr stores as of 31 December 2019. Total selling space was approximately 843,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[13]  – 33.38%, Russia-China Investment Fund (RCIF) [14] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.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, as well as many other risks specifically related to Detsky Mir and its operations.

([1])The Company’s consolidated financial measures for 2018-2019 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.

([3]) Hereinafter like-for-like average growth, like-for-like number of tickets growth and like-for-like revenue growth are based on stores in operation for at least 12 full calendar months.

([4]) Calculated in the national currency of Kazakhstan (tenge).

([5]) Including 62 ELC and ABC stores, four Detmir.ru stores as well as ten Zoozavr stores.

([6]) 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.

([7]) 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.

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

([9]) 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.

([10]) 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.

([11]) In 2019, Detsky Mir closed eight stores.

([12]) Dividend Yield is calculated at the record date.

([13]) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

([14]) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.

ANALYST AND INVESTOR CONFERENCE CALL FOR FY 2019 AUDITED IFRS FINANCIAL RESULTS

17 February 2020. Moscow, Russia. – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that Full Year 2019 Audited IFRS Financial Results will be released on March 2, 2020.             

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: Monday, March 2, 2020

Time: 16:00 (Moscow) 13:00 (London) 8:00 (New York)

Speakers:

• Vladimir Chirakhov, Chief Executive Officer
• Anna Garmanova, Chief Financial Officer
• Sergey Levitskiy, Head of 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

Detsky_Mir_Webcast

 ***

For additional information: