DETSKY MIR GROUP ANNOUNCES OPERATING RESULTS FOR 4th QUARTER & FULL YEAR 2019

Moscow, Russia, 24 January 2020 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods, announces its operating results for the fourth quarter and twelve months ended 31 December 2019.  

Q4 2019 OPERATING HIGHLIGHTS[1]

• Group unaudited revenue increased by 13.4% year-on-year to RUB 38.9 bn.
  • Online revenue[2] increased by 58.8% year-on-year to RUB 5.8 bn.
  • Revenue in Kazakhstan rose by 39.5% year-on-year to RUB 1.1 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.

• The total number of issued Detsky Mir loyalty cards increased by 16% year-on-year to 24 mn, while the number of active loyalty cardholders[6] was 10.6 mn. Transactions using the loyalty card accounted for 77.7% of total sales.

FY 2019 OPERATING HIGHLIGHTS

• Group unaudited revenue increased by 16.1% year-on-year to RUB 128.7 bn.
  • Online revenue increased by 64.5% year-on-year to RUB 14.4 bn.
  • Revenue in Kazakhstan rose by 48.1% 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[7] in 2019.

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[8] 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 lower price, 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.

View the full press release

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

“In 2019, we accelerated business growth despite a challenging macro-environment; consolidated unaudited revenue grew by 16.1% YoY to RUB 128.7 bn. At the same time, we maintained a high EBITDA margin. According to the preliminary data of unaudited financial statements, Detsky Mir’s adjusted EBITDA rose by at least 16% YoY.

“In the 4th quarter, we successfully completed the New Year season despite the high base of customer traffic in the prior year and abnormally warm weather. As a result, the consolidated revenue increased by 13.4% to RUB 38.9 bn. Like-for-like sales in Russia and Kazakhstan rose by 5.0% YoY thanks to effective pricing initiatives and improved product mix. The strong sales growth was largely driven by increases in the number of purchases (the number of tickets) by 7.9% YoY.

“In the last quarter, toys remained the key category with a 42% share in Detsky Mir’s total revenue in Russia and a continued focus on private labels. The share of private labels in toys increased by 3.9 p.p. YoY to 18.7%.

“In 2019, we successfully delivered on our expansion plan, adding 101 new stores in Russia, Kazakhstan, and Belarus. We have traditionally accelerated our expansion program in the last quarter, opening 56 new Detsky Mir stores.

“International expansion is a key strategic priority for the Company. This year, we successfully entered the Belarusian market, having already opened eight Detmir stores in the largest shopping malls of Minsk, Brest, Gomel, Molodechno, and Mogilev.  Detsky Mir’s Belarusian business outperformed our initial targets and is expected to reach EBITDA break-even this year. At the same time, we continued our market consolidation efforts in Kazakhstan, opening eight new stores and increasing like-for-like sales by 35.5%. This strong performance prompted our decision to enter the Kyrgyz market in 2020.

“Our customers are increasingly shopping at the www.detmir.ru online store: our online revenue increased by 58.8% YoY to RUB 5.8 bn in the 4th quarter, with its share in Detsky Mir’s total revenue in Russia at 16%. About 90% of the online orders are picked up at retail stores. In line with the development of our omnichannel business model, we decided to move Detmir.ru, our new “microstore” format, to an active pilot phase. The new format combines an offline retail store and a pick-up point, and will allow us to increase our presence in small towns, while also improving our delivery performance.

“One of our key initiatives in 2020 is the full-scale launch of a marketplace for the apparel and footwear category. We are happy with the pilot’s initial results: inventory turnover at the marketplace matched that of other comparable products offered by our online store. Our target is to increase the number of SKUs in the fashion assortment from 20,000 SKUs to 250,000 SKUs in the medium term.”

Guidance

New openings guidance, as well as expectations for the LFL sales growth and the level of business operating profitability for FY 2020 will be announced in March 2020 following disclosure of FY 2019 financial results. Additional information is available on the Company’s website, https://ir.detmir.ru/

***

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[9]  – 33.38%, Russia-China Investment Fund (RCIF) [10] – 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]) Excluding the effect of the new IFRS 16 (“Lease”) accounting standards.

([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]) Cardholders who made at least one purchase at Detsky Mir during the last 12 months to 31 December 2019 are considered active.

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

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

([9]) 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.

([10]) 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.

EXTRAORDINARY GENERAL MEETING OF DETSKY MIR APPROVES INTERIM DIVIDENDS

Moscow, 11 December 2019 – Detsky Mir PJSC (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema Group company (LSE: SSA, MOEX: AFKS) announces the results of its Extraordinary General Meeting of shareholders (“EGM”) that took place on 6 December 2019.

The EGM approved the payment of interim dividends in the amount of RUB 3.7 bn, or RUB 5.06 per ordinary share, based on the results of the first nine months of 2019. The total amount of dividends declared in 2019 will be RUB 7.0 bn or RUB 9.51 per ordinary share, which is equivalent to a dividend yield of 10% based on the share price as of 6 December 2019.

The dividend record date will be 17 December 2019. Dividends will be transferred within 10 business days from this date.

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 retail chain, and 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC, 14 ABC and eight Zoozavr stores as of 30 September 2019. Total selling space was approximately 794,000 square meters.

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

Lear more at www.detmir.ru, corp.detmir.ru, elc-russia.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 ANNOUNCES BOOK CLOSING OF EXCHANGE-TRADED BONDS OF RUB 3 BN WITH THE COUPON RATE OF 7.25%

Moscow, 02 December 2019 – Detsky Mir PJSC (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema Group company (LSE: SSA, MOEX: AFKS) announces the successful book closing of its series BО-05 exchange-traded bond issue with a nominal value of RUB 3 bn and a coupon rate set at 7.25% p.a.

TRANSACTION DETAILS

• On December 02, 2019 PJSC Detsky Mir opened order book for the RUB 3 bln Series BO-05 bond issue with the initial price guidance of 7.25-7.50% p.a.
• During the bookbuilding the marketing range has been lowered from the initial level to 7.25-7.40% p.a. Later – to 7.25-7.30% p.a.
• The final coupon rate was set at 7.25% p.a.
• The settlement of the bond is scheduled on December 10, 2019 at PJSC Moscow Exchange. VTB Capital, Credit Bank of Moscow and Sovcombank acted as Lead Arrangers 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 retail chain, and 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC, 14 ABC and eight Zoozavr stores as of 30 September 2019. Total selling space was approximately 794,000 square meters.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSC Sistema[1]  – 33.38%, Russia-China Investment Fund (RCIF) [2] – 9.0%, other shareholders owning less than 5% of the shares – 57.62%.

Lear more at www.detmir.ru, corp.detmir.ru, elc-russia.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 18.5% TO RUB 9.5BN IN 9M 2019

Moscow, Russia, 7 November 2019 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS), announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the third quarter and the nine months ended 30 September 2019.         

Q3 2019 FINANCIAL HIGHLIGHTS[1]

• Group unaudited revenue increased by 19.3% year-on-year to RUB 34.0 bn.
  • Online revenue[2] increased by 64.5% year-on-year to RUB 3.4 bn.
  • Revenue in Kazakhstan rose by 51.2% year-on-year to RUB 1.1 bn.
• Like-for-like revenue[3] at Detsky Mir stores in Russia and Kazakhstan grew by 10.7%. The number of tickets grew by 9.6%, while the average ticket increased by 1.0%.
• Like-for-like revenue at Detsky Mir stores in Russia grew by 10.2%. The number of tickets grew by 9.1%, while the average ticket increased by 1.0%.
• Like-for-like revenue [4] at Detsky Mir stores in Kazakhstan increased by 42.2%.
• Detsky Mir opened 22 new branded stores in Q3 2019. The Group had 780 stores as of 30 September 2019.[5]
• Total selling space increased by 11.2% year-on-year to approximately 794,000 sq. m.
• Gross profit increased by 12.6% year-on-year to RUB 10.7 bn, with a gross margin of 31.5%.
• SG&A as a percentage of revenue[6] decreased by 1.5 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[7] increased by 15.8% year-on-year to RUB 4.2 bn; the adjusted EBITDA margin was 12.3%. EBITDA[8] totalled RUB 4.1 bn (+16.9% year-on-year).
• Adjusted net profit[9] increased by 9.9% year-on-year to RUB 2.4 bn. Net profit totalled RUB 2.4 bn (+11.0% year-on-year).
• The net debt[10]/adjusted EBITDA LTM ratio stood at 1.4x as of 30 September 2019.

9M 2019 FINANCIAL HIGHLIGHTS1

• Group unaudited revenue increased by 17.3% year-on-year to RUB 89.8 bn.
  • Online revenue increased by 69.2% year-on-year to RUB 8.7 bn.
  • Revenue in Kazakhstan rose by 52.3% year-on-year to RUB 2.6 bn.
• Like-for-like revenue at Detsky Mir stores in Russia and Kazakhstan grew by 8.2%. The number of tickets grew by 8.8%, while the average ticket decreased by 0.5%.
• Like-for-like revenue at Detsky Mir stores in Russia grew by 7.7%. The number of tickets grew by 8.1%, while the average ticket decreased by 0.4%.
• Like-for-like revenue at Detsky Mir stores in Kazakhstan increased by 39.4%.
• Detsky Mir opened 45 new branded stores[11] in 9M 2019.
• Gross profit increased by 13.0% year-on-year to RUB 28.3 bn, with a gross margin of 31.5%.
• SG&A as a percentage of revenue decreased by 1.3 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA increased by 18.5% year-on-year to RUB 9.5 bn; the adjusted EBITDA margin improved by 0.1 p.p. to 10.6%. EBITDA totalled RUB 9.1 bn (+19.3% year-on-year).
• Adjusted net profit increased by 12.0% year-on-year to RUB 4.9 bn. Net profit totalled RUB 4.6 bn (+12.8% year-on-year).

EVENTS AFTER THE REPORTING PERIOD

• In November 2019, the Board of Directors recommended that the EGM (to be held by absentee vote with the final date for receipt of completed ballots on December 6, 2019) approved an interim dividend for the nine months of 2019 totalling RUB 3.7 bn, representing a payment of RUB 5.06 per ordinary share. The Board also recommended that the EGM set the record date establishing eligibility to receive the dividend as 17 December 2019.
• In November 2019, Detsky Mir launched the pilot of a full-feature mobile application, which provides customers with ability to make purchases via the convenient online interface while using a virtual loyalty program card.

• In October 2019, the Company launched next-day delivery service (last mile delivery) for a charge of RUB 99 for orders placed via Detsky Mir’s online store, making this service available to 30 major Russian cities. Compared to express delivery, this service offers lower price, wider geographical 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 (Feb 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 totalling 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.

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

“In the first nine months of 2019, we continued to actively consolidate the children’s goods market in Russia, Kazakhstan and Belarus. Our consolidated unaudited revenue grew by 17.3% year-on-year to RUB 89.8bn.

“Our biggest achievement for the past nine months has been the strong growth of like-for-like revenue at Detsky Mir stores in Russia and Kazakhstan, which were up 8.2% in 9M 2019. As new stores reach their designed capacity, they also start making a significant contribution to the growth of the Company’s turnover. This year, we expect to open at least 100 Detsky Mir stores instead of the previously planned 90. As many as 45 stores have already been opened, and the rest will open in the last quarter, during the peak sales period.

“At the same time, we have demonstrated excellent results in the e-commerce segment. Revenue from our online store, www.detmir.ru, surged by 69.2% to RUB 8.7bn, and its share in Detsky Mir’s total revenue in September was 11.7%. We believe that the further development of our omnichannel business model, as well as the continuous improvement of service level across all online orders delivery channels, will provide for a 30% share of the online store in Detsky Mir’s total revenue in the medium term.

“We continue looking for new opportunities to optimize the Company’s operating expenses. This year, lease and marketing expenses have been the key factors behind Detsky Mir’s improving operational efficiency. In 9M 2019, the amount of selling, general and administrative expenses (net of management bonuses) as a percentage of revenue fell by 130 b.p. year-on-year. Such savings enable us to further reduce prices, which would in turn increase customer traffic. At the same time, we managed to increase the adjusted EBITDA margin for 9M 2019 by 10 b.p. year-on-year.

“Thanks to a strict investment discipline, we are successfully balancing a brisk pace of business growth with high dividend payments, while maintaining a low debt burden. The Board of Directors recommended that the General Meeting of Shareholders allocate all of the Company’s net income under RAS, a total of RUB 3.7bn, for dividend payments. This means that the dividend payout this year may grow by 15% compared to 2018. As we look ahead, we plan to maintain high business growth rates and to continue paying significant dividends to our shareholders.”

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 9M 2019 unaudited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 646 93 15

UK

+44 207 194 37 59

USA

+1 646 722 49 16

PIN

792 212 55#

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 retail chain, and 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC, 14 ABC and eight Zoozavr stores as of 30 September 2019. Total selling space was approximately 794,000 square meters.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[12] – 52.10%, Russia-China Investment Fund (RCIF) [13] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%.

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 sales via “in-store pickup” service).

([3]) Hereinafter like-for-like average ticket growth, number of tickets growth and revenue growth are based on stores in operation for at least 12 full calendar months. Revenue of each store included into like-for-like comparison represents retail revenue of the store (including VAT, excluding plastic bags and revenue from online orders delivered by couriers) for respective period but excludes store revenue for those months in which the store was not operating for 3 days or more.

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

([5]) Including 62 ELC and ABC stores, as well as eight 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. Adj. EBITDA LTM is calculated as adj. EBITDA (as defined above) for the last 12-months period.

([11]) In 9M 2019, Detsky Mir closed eight stores.

([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 Decisions of the Board of Directors

Moscow, Russia, 05 November 2019 –Detsky Mir PJSC (“Detsky Mir”, or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces that its Board of Directors at a meeting on 1 November 2019 approved to convene the Extraordinary General Shareholders’ Meeting (the EGM). The EGM will be held by absentee vote and the final date for receipt of completed ballots is December 6, 2019.The record date for shareholders eligible to participate in the EGM is 12 November 2019.

The Board of Directors recommended that the EGM approved an interim dividend for the nine months of 2019 of RUB 3,739,340,000, representing a payment of RUB 5.06 per ordinary share.

The Board of Directors recommended that the EGM set the record date establishing eligibility to receive the dividend as 17 December 2019.

The EGM materials will be available at the Company’s website (ir.detmir.ru), as well as at Interfax’s website (e-disclosure.ru) and by request at the Company’s corporate secretariat: 3/6 3rd Nizhnelikhoborsky proyezd, 127238 Moscow after 14 November 2019.

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

The Board of Directors approved the cash payment of the remaining bonus fund for the Long Term Incentive Plan, according to which the final calculations should take place in 2020. The size and timing of payments, as well as the number of program participants, remained unchanged.

***

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 retail chain, 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC and 14 ABC stores as of 30 September 2019. The Zoozavr retail chain comprises eight stores. Total selling space was approximately 794,000 square meters.

In accordance with the audited Financial Statements under IFRS, Group revenue amounted to RUB 110.9 bn for FY 2018, adjusted EBITDA totaled RUB 12.7 bn and adjusted profit amounted to RUB 7.2 bn.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 52.10%, Russia-China Investment Fund (RCIF) [2] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

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 9 MONTHS 2019 UNAUDITED IFRS FINANCIAL RESULTS

23 October 2019. Moscow, Russia. – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS), announces that 9 months 2019 Unaudited IFRS Financial Results will be released on November 7, 2019.             

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, November 7, 2019

Time: 17:00 (Moscow) 14:00 (London) 9:00 (New York)

Speakers:

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

Russia

+7495 646 93 15

8 800 500 98 63 (toll-free)

UK/ International

+44 207 194 37 59

0 800 376 61 83 (toll-free)

USA

+1 646 722 49 16

844 286 06 43 (toll-free)

Conference ID

792 212 55#

 ***

For additional information:

The Board of Directors of PJSC “Detsky Mir” Approved the New 3-year Long-Term Incentive Plan for the Company’s Senior Management Team

Moscow, Russia, 21 October 2019 – The Board of Detsky Mir PJSC (“Detsky Mir”, or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS), approved the new Long Term Incentive Plan (the new LTIP) for the senior management of Detsky Mir with a view to further encouraging continuing focus on creation of sustainable value for the shareholders. The new LTIP is consistent with the previous one, which will expire in February 2020.

The duration of the new LTIP covers the three-year period from the end date of the previous program (February 8, 2020) to February 7, 2023. In accordance with the terms of the new LTIP, 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 new 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 largest specialized children’s goods retailer. The Group comprises the Detsky Mir retail chain, 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC and 14 ABC stores as of 30 September 2019. The Zoozavr retail chain comprises eight stores. Total selling space was approximately 794,000 square meters.

In accordance with the audited Financial Statements under IFRS, Group revenue amounted to RUB 110.9 bn for FY 2018, adjusted EBITDA totaled RUB 12.7 bn and adjusted profit amounted to RUB 7.2 bn.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 52.10%, Russia-China Investment Fund (RCIF) [2] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

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]) 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 ACCELERATED REVENUE GROWTH TO 19.3% IN Q3 2019

Moscow, Russia, 16 October 2019 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS), announces its operating results for the third quarter and the nine months ended 30 September 2019.             

Q3 2019 OPERATING HIGHLIGHTS[1]

• Group unaudited revenue increased by 19.3% year-on-year to RUB 34 bn.
  • Online revenue[2] increased by 62.8% year-on-year to RUB 3.3 bn.
  • Revenue in Kazakhstan rose by 51.2% year-on-year to RUB 1.1 bn.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 10.7%. The number of tickets grew by 9.6%, while the average ticket increased by 1.0%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 10.2%. The number of tickets grew by 9.1%, while the average ticket increased by 1.0%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 42.2%.
• Detsky Mir opened 22 new branded stores in Q3 2019. The Group had 780 stores as of 30 September 2019.[5]
• Total selling space increased by 11.2% year-on-year to approximately 794,000 sq. m.

• The total number of issued Detsky Mir loyalty cards increased by 14.4% year-on-year to 23 mn, while the number of active loyalty cardholders[6] was 10.4 mn. Transactions using the loyalty card accounted for 78.2% of total sales.

9M 2019 OPERATING HIGHLIGHTS[1]

• Group unaudited revenue increased by 17.3% year-on-year to RUB 89.8 bn.
  • Online revenue increased by 68.6% year-on-year to RUB 8.6 bn.
  • Revenue in Kazakhstan rose by 52.3% year-on-year to RUB 2.6 bn.
• Like-for-like sales at Detsky Mir stores in Russia and Kazakhstan grew by 8.2%. The number of tickets grew by 8.8%, while the average ticket decreased by 0.5%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 7.7%. The number of tickets grew by 8.1%, while the average ticket decreased by 0.4%.
• Like-for-like sales at Detsky Mir stores in Kazakhstan increased by 39.4%.
• Detsky Mir opened 45 new branded stores[7] in 9M 2019.

Q3 2019 KEY EVENTS

• In August 2019, the Company launched express delivery service (last mile delivery) for a charge of RUB 99 for orders placed via Detsky Mir’s online store. Today this service is available in Moscow, St. Petersburg and 15 other major cities in Russia, while the time of delivery to the customer has been reduced to just several hours.
• In August 2019, Detsky Mir launched in-store pickup in the Republic of Kazakhstan. Online customers will be able to pick up orders at any retail store in Kazakhstan 60 minutes after placing an order.
• In August 2019, the Company signed a direct contract with the world’s fourth largest toy producer, MGA Entertainment (creator of toys such as LOL and Poopsie). The first shipments have already been distributed to the retail chain and sales are underway at Detsky Mir stores.
• In September 2019, the Company tested and refined the IT systems for accepting QR code payments as part of the Quick Payment System. During October, this service will be launched in test mode at Detsky Mir pilot stores in Moscow. The customer – a client of a bank included in the Quick Payment System – will be able to make a purchase by scanning the QR code at checkout and approving the operation in the application. On the basis of the results of the pilot program, the Company plans to complete the roll out of the new payment service throughout the retail chain, as well as to launch payment with a QR code in the online store www.detmir.ru.

View the full press release

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

“Despite weak consumer demand overall, we delivered a strong business growth rate in the third quarter of 2019. Consolidated unaudited revenue grew 19.3% YoY to RUB 34bn.

“Traditionally, we accelerate the pace of the retail chain’s expansion in the second half of the year. Detsky Mir opened 22 new stores in the third quarter, including four stores in Kazakhstan and Belarus. The company opened its first stores in Beloretsk (Republic of Bashkortostan), Chistopol (Republic of Tatarstan), Azov (Rostov region), Uray (Khanty-Mansi Autonomous District) and Kanevskaya (Krasnodar region). We plan to open at least 45 Detsky Mir stores in the fourth quarter.

“Against the background of significant growth of our selling space in the reporting quarter, we managed to ensure a double-digit growth rate of like-for-like sales in Russia and Kazakhstan (+10.7% YoY). We continued to generate significant customer traffic, which allowed us to increase the number of transactions in these stores by 9.6%. The results of the first five Detmir stores in Belarus exceeded our expectations in terms of both accelerating revenue and profitability.

“We successfully completed the back-to-school season, which significantly boosted the Company’s sales. Clothing and footwear remained the key categories in terms of growth rates and volumes during this season. In the third quarter of 2019, the share of these products in Detsky Mir’s total revenue in Russia rose 2.2p.p. YoY to 34%. We also achieved excellent results in the category of stationery, including by doubling the number of private labels, while the share of private labels in sales of this category increased by 3 p.p. YoY to 26% in the reporting quarter.

“Along with the active development of the retail chain, we managed to achieve excellent results in online sales growth. The online store (www.detmir.ru) generated RUB 3.3bn in Q3 revenue, up 62.8% YoY, and its share in Detsky Mir’s total revenue in September was 11.6%. About 90% of our online orders are picked up at retail stores, which confirms high customer demand for this service. At the same time, we have developed a service providing express delivery from stores, leveraging our retail chain. Now our customers in large Russian cities can receive their orders within a few hours of making a purchase on our website.

“We also made a strategic decision to increase the number of SKUs available through the online store from 50,000 to 250,000 in the medium term. As part of this initiative, next year we plan to launch a pilot version of the marketplace for the clothing and footwear category. Based on the results of the pilot, we plan to scale up the marketplace to other product categories.”

Additional information is available on the Company’s website, https://ir.detmir.ru/

***

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 retail chain, 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 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC and 14 ABC stores as of 30 September 2019. The Zoozavr retail chain comprises eight stores. Total selling space was approximately 794,000 square meters.

In accordance with the audited Financial Statements under IFRS, Group revenue amounted to RUB 110.9 bn for FY 2018, adjusted EBITDA totaled RUB 12.7 bn and adjusted profit amounted to RUB 7.2 bn.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[8]  – 52.10%, Russia-China Investment Fund (RCIF) [9] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

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]) Excluding the effect of the new IFRS 16 (“Lease”) accounting standards.

([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, as well as eight Zoozavr stores.

([6]) Cardholders who made at least one purchase at Detsky Mir during the last 12 months to 30 September 2019 are considered active.

([7]) In 9M 2019, Detsky Mir closed eight stores.

([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.

DETSKY MIR GROUP ADJUSTED EBITDA INCREASES BY 20.6% TO RUB 5.3BN IN H1 2019

Moscow, Russia, 26 August 2019 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS) announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the second quarter and the first half ended 30 June 2019.          

Q2 2019 FINANCIAL HIGHLIGHTS[1]

• Group unaudited revenue increased by 16.3% year-on-year to RUB 28 bn.
  • Online revenue[2] increased by 70.8% year-on-year to RUB 2.7 bn.
  • Revenue in Kazakhstan rose by 46.6% year-on-year to RUB 766 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 6.7% year-on-year. The number of tickets grew by 8.5% while the average ticket price decreased by 1.7%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.2% year-on-year. The number of tickets grew by 7.8% while the average ticket price decreased by 1.4%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 38.4% year-on-year.
• Detsky Mir opened 17 new branded stores[5] in Q2 2019. The Group had 760 stores as of 30 June 2019.[6]
• Total selling space increased by 10.3% year-on-year to approximately 777,000 sq. m.   
• Gross profit increased by 12.8% year-on-year to RUB 9.5 bn, with a gross margin of 33.9%.
• SG&A as a percentage of revenue[7] decreased by 1.0 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[8] increased by 16.0% year-on-year to RUB 3.5 bn; the adjusted EBITDA margin was 12.4%. EBITDA[9] totalled RUB 3.4 bn (+18.8% year-on-year).
• Adjusted net profit[10] increased by 16.8% year-on-year to RUB 2.0 bn. Net profit totalled RUB 1.9 bn (+20.8% year-on-year).
• The net debt /adjusted EBITDA ratio stood at 1.9x as of 30 June 2019.

H1 2019 FINANCIAL HIGHLIGHTS1

• Group unaudited revenue increased by 16.2% year-on-year to RUB 55.9 bn.
  • Online revenue increased by 72.3% year-on-year to RUB 5.3 bn.
  • Revenue in Kazakhstan rose by 53.1% year-on-year to RUB 1.5 bn.
• Like-for-like sales at Detsky Mir stores in Russia and Kazakhstan grew by 6.9%. The number of tickets grew by 8.3% while the average ticket price decreased by 1.3%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.4%. The number of tickets grew by 7.6% while the average ticket price decreased by 1.2%.
• Like-for-like sales at Detsky Mir stores in Kazakhstan increased by 37.4%.
• Detsky Mir opened 23 new branded stores[11] in H1 2019.
• Gross profit increased by 13.2% year-on-year to RUB 17.6 bn, with a gross margin of 31.5%.
• SG&A as a percentage of revenue decreased by 1.1 p.p. year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA increased by 20.6% year-on-year to RUB 5.3 bn; the adjusted EBITDA margin improved by 0.3 p.p. to 9.5%. EBITDA totalled RUB 5.0 bn (+21.4% year-on-year).
• Adjusted net profit increased by 14.2% year-on-year to RUB 2.5 bn. Net profit totalled RUB 2.2 bn (+14.8% year-on-year).

EVENTS AFTER THE REPORTING PERIOD

• In August 2019, the company launched express delivery service (last mile delivery) for a charge of RUB 99 for orders placed via Detsky Mir’s online store. Today this service is available in Moscow, St. Petersburg and 15 other major cities in Russia, while the time of delivery to the customer has been reduced to just several hours.  
• In August 2019, Detsky Mir launched in-store pickup in the Republic of Kazakhstan. Online customers will be able to pick up their orders at any retail stores of the chain in Kazakhstan 60 minutes after placing an order. 

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

“Detsky Mir continues to grow revenue through consolidation of the children’s goods market. In the first half of 2019, we increased the revenue growth rate to 16.2% year-on-year, with consolidated unaudited revenue coming in at RUB 55.9bn.

“Turnover increased after new stores were opened and reached full capacity. At the same time, we managed to significantly boost our customer base. The number of transactions in Detsky Mir’s like-for-like stores in Russia and Kazakhstan rose by 8.3%.

“We are growing our e-commerce segment in line with our omni-channel business model, with in-store pickup accounting for about 85% of total online sales. In the first half of 2019, online revenue increased by 72.3% year-on-year to RUB 5.3bn.

“A top strategic priority for Detsky Mir is operational efficiency. Thanks to a 1.1 percentage point reduction of SG&A expenses as a percentage of revenue, the Company managed to offer its customers a broad assortment at highly affordable prices and also to improve its adjusted EBITDA margin by 0.3 percentage points to 9.5% in the first half of 2019.

“The Company continues to generate strong cash flow despite increased debt, which is related to investments in the logistics infrastructure and working capital. Adjusted net profit increased by 14.2% year-on-year in the first half of 2019. Net profit came under pressure from rising interest expenses and forex losses. 

“At the end of Q2, Detsky Mir paid final dividends for 2018 in the amount of RUB 3.3bn, representing a dividend yield of more than 10%. Looking ahead, we plan to maintain high business growth rates and to continue paying significant dividends to shareholders.

“Rapid growth of the business, a stable financial situation and the exit of many players from the retail market have allowed us to adjust our previous goal for expansion of the retail chain in 2019: we now plan to open 90 stores versus the previously planned 70 stores.”

View the full press release

Conference Call Information

Detsky Mir’s management will host a conference call today at 17:00 (Moscow time) / 15:00 (London time) / 10:00 (New York time) to discuss the Company’s H1 2019 unaudited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 495 646 93 15

UK

+44 207 194 37 59

USA

+1 646 722 49 16

PIN

227 092 47#

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 retail chain, 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 688 Detsky Mir stores located in 258 cities in Russia,

Kazakhstan and Belarus, as well as 51 ELC and 15 ABC stores as of 30 June 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 777,000 square meters.

In accordance with the audited Financial Statements under IFRS, Group revenue amounted to RUB 110.9 bn for FY 2018, adjusted EBITDA totalled RUB 12.7 bn and adjusted profit amounted to RUB 7.2 bn.

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSC Sistema  – 52.10%, Russia-China Investment Fund (RCIF) – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

Lear more at 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]) Excluding the effect of the new IFRS 16 (“Lease”) accounting standards.

([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 based on stores in operation for at least 12 full calendar months.

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

([5]) In Q2 2019, Detsky Mir closed three stores.

([6]) Including 66 ELC and ABC stores, as well as six Zoozavr stores.

([7]) Hereinafter, selling, general and administrative expenses exclude D&A expenses and are adjusted for share-based compensation and cash bonuses under the LTI program

([8]) Hereinafter, adjusted EBITDA is calculated as profit for the period before income tax, FX loss, net finance expense and D&A; adjusted for share-based compensation 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 for additional bonus accruals under the LTI program (together with related tax effects). See Attachment A.

([11]) In H1 2019, Detsky Mir closed eight stores.

ANALYST AND INVESTOR CONFERENCE CALL FOR H1 2019 UNAUDITED IFRS FINANCIAL RESULTS

12 August 2019. Moscow, Russia. – Detsky Mir Group (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema company (LSE: SSA, MOEX: AFKS), announces that H1 2019 Unaudited IFRS Financial Results will be published on August 26, 2019.             

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, August 26, 2019

Time: 17:00 (Moscow) 15:00 (London) 10:00 (New York)

Speakers:

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

Russia

+7495 646 93 15

8 800 500 98 63 (toll-free)

UK/ International

+44 207 194 37 59

0 800 376 61 83 (toll-free)

USA

+1 646 722 49 16

844 286 06 43 (toll-free)

Conference ID

227 092 47#

 ***

For additional information: