DETSKY MIR GROUP REVENUE INCREASES BY 16.3% TO RUB 28 BN IN Q2 2019

Moscow, Russia, 18 July 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 second quarter and first half ended 30 June 2019.          

Q2 2019 OPERATING 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 46.5% year-on-year to RUB 766 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 6.7%. The number of tickets grew by 8.5%, while the average ticket decreased by 1.7%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.2%. The number of tickets grew by 7.8%, while the average ticket decreased by 1.4%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 38.4%.
• 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.

• The total number of issued Detsky Mir loyalty cards increased by 13.8% year-on-year to 22 mln, while the number of active loyalty cardholders[7] was 10.1 m. Transactions using the loyalty card accounted for 78.8% of total sales.

H1 2019 OPERATING HIGHLIGHTS

• 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 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 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[8] in H1 2019.

Q2 2019 KEY EVENTS

• In April 2019, Detsky Mir successfully issued its series BО-07 exchange-traded bond with a nominal value of RUB 5 bn and a coupon rate of 8.90% p.a. The put option is in 3 years.
• In May 2019, Detsky Mir paid out a final dividend of RUB 3.3 bn for Q4 2018. The dividend yield of Detsky Mir shares was more than 10%[9].
• In June 2019, Detsky Mir launched a mobile application for customers in Kazakhstan and Belarus. In addition to the convenient use of a virtual loyalty card, customers can check the current balance of their bonus points and their transaction history, as well as follow promos so as not to miss the most attractive discounts.

View the full press release

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

“In Q2 2019, the Company accelerated revenue growth to 16.3% YoY, with consolidated unaudited revenue reaching RUB 28 bn.

“Revenue growth was primarily driven by organic expansion and by the ramp-up of new stores. At the same time, Q2 LFL sales across Detsky Mir stores in both Russia and Kazakhstan increased by 6.7% YoY. The company won over new customers and boosted the number of transactions by 8.5%, which is among the highest growth rates in the Russian retail market.

“Toys and children’s clothing were the fastest-growing product categories in the past quarter. Efficient pricing of private-label products and frequent online promos fed into strong sales of the Spring/Summer apparel collection. This category accounted for 27% of Detsky Mir’s total revenue in Russia, up 1.2 p.p. YoY.

“Private labels such as Demi Star (toys for girls), Mobicaro (toys for boys), Attivio (construction sets and arts) and BabyGo (toys for infants) were also among the Company’s best-sellers in Q2, accounting for 16.4% of total toy sales, a 7.2 p.p. increase YoY. Other toys in high demand included those produced by international brands such as Mattel (Hot Wheels & Enchantimals) and Spin Master (PAW Patrol).

“The online store detmir.ru generated RUB 2.7bn in revenue in Q2, up 70.8% YoY, or 9.7% of total DM sales (up 3.1 p.p. YoY), with baby products and toys accounting for nearly 70% of online sales. In-store pick-up remains the most convenient and popular delivery method among our customers, accounting for 88% of orders made in Q2 2019. DM will spend the second half of 2019 refining the online store’s service standards and functions by launching a new mobile app, promoting direct deliveries from stores, and introducing new product filters and specifications.

“Detsky Mir is continuing to consolidate the market through regional and international expansion. The second quarter of 2019 saw 17 openings, including three in the Moscow region and one in Belarus, with the first-ever DM stores opened in Komsomolsk-on-Amur, Birobidzhan and Ussuriysk in Russia, and Gomel in Belarus. In addition, the company’s expansion plan for H2 2019 expects at least 60 new openings.”

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 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[10]  – 52.10%, Russia-China Investment Fund (RCIF) [11] – 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 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]) Cardholders who made at least one purchase at Detsky Mir during the last 12 months to 30 June 2019 are considered active.

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

([9]) Last twelve months dividend yield is calculated at the record date.

([10]) 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.

([11]) 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 Launched New IR Website

Moscow, 3 June 2019 – Detsky Mir PJSC (“Detsky Mir” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer, launched new website for investor relations.

You can find updated information about the Company, its financial results and dividends, as well as information on corporate governance across the website.

URL link to IR website: https://ir.detmir.ru/en/

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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[1]  – 52.10%, Russia-China Investment Fund (RCIF) [2] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

(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 ADJ. EBITDA INCREASES BY 30.1% TO RUB 1.9BN IN Q1 2019

Moscow, Russia, 29 April 2019 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema Group company (LSE: SSA, MOEX: AFKS) announces its unaudited financial results in accordance with International Financial Reporting Standards (IFRS) for the first quarter ended 31 March 2019.        

Q1 2019 FINANCIAL HIGHLIGHTS[1]

• Group unaudited revenue increased by 16.1% year-on-year to RUB 27.9 bn.
  • Online revenue[2] increased by 74.1% year-on-year to RUB 2.6 bn.
  • Revenue in Kazakhstan rose by 60.4% year-on-year to RUB 743 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 7.2%. The number of tickets grew by 8.2% while the average ticket price decreased by 0.9%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.6%. The number of tickets grew by 7.5% while the average ticket price decreased by 0.9%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 36.4%.
• Detsky Mir opened six new branded stores[5] in Q1 2019. The Group had 748 stores as of 31 March 2019.[6]
• Total selling space increased by 12.1% year-on-year to approximately 769,000 sq. m.   
• Gross profit increased by 13.7% year-on-year to RUB 8.1 bn, with a gross margin of 29.0%.
• SG&A as a percentage of revenue[7] decreased by 1.3 p.p year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[8] increased by 30.1% year-on-year to RUB 1.9 bn; the adjusted EBITDA margin was 6.7%. EBITDA[9] totalled RUB 1.6 bn (+27.2% year-on-year).
• Adjusted net profit[10] increased by 4.5% year-on-year to RUB 474 m. Net profit totalled RUB 291 m (-13.4% year-on-year).
• The net debt /adjusted EBITDA ratio stood at 1.8x as of 31 March 2019.

EVENTS AFTER THE REPORTING PERIOD

• In April 2019, the Board of Directors recommended that the AGM (convened on 16 May 2019) approve a final dividend for the 2018 financial year of RUB 3.3 bn representing a payment of RUB 4.45 per ordinary share. The BoD also recommended that the AGM set the record date establishing eligibility to receive the dividend as 27 May 2019.  
• In April 2019, Detsky Mir successfully issued its series BО-07 exchange-traded bond with a nominal value of RUB 5 bn and a coupon rate set at 8.90% p.a. The put option is in 3 years. Investor demand was more than twice the bond issue size, allowing the issuer to revise the marketing range from the initial level. Proceeds from the placement were used to refinance existing debt with the aim of further diversifying the credit portfolio and reducing costs.

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

“We were able to increase business growth rate in the first quarter of 2019 amid continued stagnation of consumer demand in Russia. Consolidated unaudited revenue rose by 16.1% YoY to RUB 27.9bn.

“In addition to ramp-up of stores opened in 2017-2018, one of the key drivers behind revenue growth was like-for-like sales growth rate of 7.2% resulting from 8.2% increase in the number of transactions.

“E-commerce is still the fastest-growing segment of Detsky Mir’s business. The online store’s revenue increased by 74.1% YoY in Q1 2019. This channel’s share in the Company’s total revenue rose to 9.3%. 

“Our team’s top priority remains improving operating efficiency, primarily to offer our customers an affordable and wide range of products. Despite continued investment in prices in the reporting period, we managed to improve our EBITDA margin by 0.7 p.p. to 6.7%, thanks to a significant reduction in selling, general and administrative expenses as a percentage of revenue – by 1.3 p.p.

“Adjusted net income grew 4.5% in the first quarter of 2019. This line was impacted by an increase in interest expenses and a foreign exchange loss. Detsky Mir will continue to combine high business growth rates and high level of dividend payments.”

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 2019 unaudited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7 499 609 12 00

UK

+44 203 769 68 19

USA

+1 646 787 01 57

PIN

51 57 19

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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[11]  – 52.10%, Russia-China Investment Fund (RCIF) [12] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

Lear more at www.detmir.ru, corp.detmir.ru, elc-russia.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 Q1 2019, Detsky Mir closed five stores.

([6]) Including 68 ELC and ABC stores, as well as six Zoozavr stores.

([7]) Hereinafter, selling, general and administrative expenses exclude D&A expenses and 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, 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]) 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.

([12]) 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 2019 UNAUDITED IFRS FINANCIAL RESULTS

17 April 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 Q1 2019 Unaudited IFRS Financial Results will be published on April 29, 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, April 29, 2019

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

Speakers:

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

Russia

+7 499 609 12 00

UK/ International

+44 203 769 68 19 

USA

+1 646 787 01 57

Conference ID

51 57 19

Online presentation 

https://closir.com/api/public/clo?t=detskymir

 ***

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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: PJSC 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, 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 ANNOUNCES OPERATING RESULTS FOR 1st QUARTER 2019

15 April 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 its operating results for the first quarter ended 31 March 2019.     

Q1 2019 OPERATING HIGHLIGHTS[1]

• Group unaudited revenue increased by 16.1% year-on-year to RUB 27.9 bn.
  • Online revenue[2] increased by 74.1% year-on-year to RUB 2.6 bn.
  • Revenue in Kazakhstan rose by 60.4% year-on-year to RUB 743 m.
• Like-for-like sales[3] at Detsky Mir stores in Russia and Kazakhstan grew by 7.2%. The number of tickets grew by 8.2% while the average ticket price decreased by 0.9%.
• Like-for-like sales at Detsky Mir stores in Russia grew by 6.6%. The number of tickets grew by 7.5% while the average ticket price decreased by 0.9%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 36.4%.
• Detsky Mir opened six new branded stores[5] in Q1 2019. The Group had 748 stores as of 31 March 2019.[6]
• Total selling space increased by 12.1% year-on-year to c. 769,000 sq. m.   
• The number of total outstanding Detsky Mir loyalty cards increased by 15% year-on-year to 21.6 mln, while the number of active loyalty cardholders[7] was 9.9 m. Transactions using the loyalty card accounted for 71% of total sales.

Q1 2019 KEY EVENTS

• In Q1 2019, the Company entered the Belarusian market, opening three stores in Minsk. The total selling space of ​​the Belarusian retail chain “Detmir” was approximately 3,000 sq. m.
• In March 2019, RAEX rating agency (“RAEX”) assigned Detsky Mir a long-term credit rating of ruA+ with a stable outlook.
• In March 2019, the Company signed an agreement with Euromagazin 21 Century LLC (Sberbank Group) to acquire commercial premises for a flagship store in Moscow. The total investment in the commercial premises purchase and the opening of the flagship store is estimated at approximately RUB 1.0 bn. The property has a total space of 3,642.5 sq m. The opening of the new Detsky Mir flagship store on Novy Arbat is scheduled for the second half of 2019.
• As part of its long-term incentive programme (LTIP), the Company repurchased 3,862,613 ordinary shares of Detsky Mir for RUB 139 m, representing 0.5% of the share capital of the Company.

View the full press release

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

“In Q1 2019, Detsky Mir Group accelerated the pace of growth of its business: consolidated unaudited revenue rose by 16.1% year-on-year to RUB 27.9bn.

“The company’s significant growth of turnover is driven by stores opened in 2018-2017 reaching full capacity utilisation, as well as a 7.2% increase in Detsky Mir’s like-for-like sales in Russia and Kazakhstan. The company continues to pursue its strategy for consolidation of the children’s goods market by attracting new buyers from competing retail chains, which has resulted in an 8.2% increase in the number of cheques.

“During the traditional Russian ‘Men’s Day’ and ‘Women’s Day’ holiday period the Company’s sales enjoyed healthy growth, with toys being a major contributor. Toys accounted for 33% of total Detsky Mir sales in Russia in Q1 2019. In the reporting period the company started procurement of toys from Spin Master, one of the world’s leading producers by sales volume. In the clothing and footwear category we successfully sold our winter collection and generated strong sales at the start of the spring season, with the share of this category in total Detsky Mir sales in Russia reaching 24%.   

“In Q1 2019, we achieved our goal for Detsky Mir’s international expansion after opening three stores in the Republic of Belarus. The first stores were launched in the biggest shopping malls located in Minsk. We plan to open at least 80 new Detsky Mir stores by the end of 2019, including 10 stores in Belarus. 

“A strategic goal for the Company is to maintain leadership in the online market for children’s goods. Due to continuous improvement of service in all delivery channels and introduction of new convenient solutions for customers, we managed to increase the revenue of our online store by 74.1% year-on-year in Q1 2019. For example, 100% of our users have migrated to a new website with improved interface and functionality, which significantly increased the conversion rate of online sales. In 2019, Detsky Mir will launch Detsky Mir online store in Kazakhstan with an in-store pick-up service available. At the same time, the company will improve its mobile application that will include the functions of a full-fledged online store. “

 ***

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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: PJSC 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, corp.detmir.ru, elc-russia.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]) Hereinafter the figures are presented excluding the effect of the new IFRS 16 accounting standards (“Lease”)

([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 Q1 2019, Detsky Mir closed five stores.

([6]) Including 68 ELC and ABC stores, as well as six Zoozavr stores.

([7]) Cardholders who made at least one purchase at Detsky Mir during the last 12 months to 31 March 2019 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.

DETSKY MIR ANNOUNCES DATE of AGM

Moscow, 12 April 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 that its Board of Directors at a meeting on 11 April 2019 approved a resolution to convene the Annual General Shareholders’ Meeting (the AGM) on 16 May 2019. The record date for shareholders eligible to participate in the AGM is 22 April 2019.

The Board of Directors recommended that the AGM approved a final dividend for the 2018 financial year of RUB 3,288,550,000, representing a payment of RUB 4.45 per ordinary share.

The Board of Directors also recommended that the AGM set the record date establishing eligibility to receive the dividend as 27 May 2019.

The AGM materials will be available at the Company’s website (corp.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 24 April 2019.

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

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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: PJSC 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, corp.detmir.ru, elc-russia.ru.

(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.

DETSKY MIR ANNOUNCES BOOK CLOSING OF EXCHANGE-TRADED BONDS OF RUB 5 BN WITH THE COUPON RATE OF 8.90%

Moscow, 12 April 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-07 exchange-traded bond issue with a nominal value of RUB 5 bn and a coupon rate set at 8.90% p.a.

TRANSACTION DETAILS

• On April 11, 2019 PJSC Detsky Mir opened order book for the RUB 5 bn Series BO-07 bond issue with the initial price guidance of 9.00-9.20% p.a.
• During the bookbuilding investor demand was more than twice the bond issue size that allowed the issuer to revise the marketing range from the initial level down to 8.80-8.90% p.a.
• More than 30 orders for the total amount of over RUB 10 bn have been received from a wide range of investors.
• The final coupon rate was set at 8.90% p.a., which corresponded to the spread of 128 bps to govt curve – by 28 bps lower than the spread to govt curve in the placement of 2017 (Series BO-04 bond issue).
• The settlement of the bond is scheduled on April 15, 2019 at PJSC Moscow Exchange. Gazprombank (JSC), JSC Raiffeisenbank and JSC ALFA-BANK acted as Lead Arrangers of the transaction. Gazprombank (JSC) will act the the placement agent.

Anna Garmanova, PJSC Detsky Mir Chief Financial Officer, pointed out:

“We are focused on improving the business efficiency and try to use all opportunities for that, including optimization of the debt portfolio structure and reduction of the cost of debt. Strong investor demand for our bond once again confirms high evaluation of the growth potential and credit quality of the Company. Proceeds from the placement will be used for refinancing of the current credit portfolio aiming at its further diversification and cost reduction.”

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 674 Detsky Mir stores located in 254 cities in Russia, Kazakhstan and Belarus, as well as 56 ELC and 12 ABC stores as of 31 March 2019. The Zoozavr retail chain comprises six stores. Total selling space was approximately 769,000 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: PJSC 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, corp.detmir.ru, elc-russia.ru.

(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.

Expert RA agency assigns ruA+ credit rating to Detsky Mir; outlook stable

Moscow, Russia, 27 March 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 that Expert RA rating agency has assigned 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.

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

***

For additional information:

DETSKY MIR GROUP NET PROFIT INCREASES BY 36.3% TO RUB 6.6BN IN 2018

Moscow, Russia, 1 March 2019 – Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”, MOEX: DSKY), Russia’s largest specialized children’s goods retailer and a Sistema Group company (LSE: SSA, MOEX: AFKS) announces its audited financial results in accordance with International Financial Reporting Standards (IFRS) for the fourth quarter and twelve months ended 31 December 2018.

Q4 2018 FINANCIAL HIGHLIGHTS[1]

• Group audited revenue increased by 13.0% year-on-year to RUB 34.3 bn
  • Online revenue[2] improved by 82% year-on-year to RUB 3.6 bn.
  • Revenue in Kazakhstan rose by 68% year-on-year to RUB 823m.
• Like-for-like sales[3] at Detsky Mir stores in Russia grew by 3.0%. The number of tickets grew by 5.4% while the average ticket price decreased by 2.3%.
• Like-for-like sales[4] at Detsky Mir stores in Kazakhstan increased by 31%.
• Detsky Mir opened 63 new branded stores in Q4 2018. The Group had 743 stores as of 31 December 2018.[5]
• Total selling space increased by 11.6% year-on-year to c. 768,000 sq. m.   

• Gross profit increased by 9.8% year-on-year to RUB 11.8 bn, with a gross margin of 34.4%.
• SG&A as a percentage of revenue[6] decreased by 60 bps year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA[7] increased by 8.0% year-on-year to RUB 4.6 bn; the adjusted EBITDA margin was 13.5%. EBITDA[8] totaled RUB 4.3 bn (+2.4% year-on-year).
• Adjusted net profit[9] increased by 8.8% year-on-year to RUB 2.9 bn. Net profit totaled RUB 2.6 bn (+1.4% year-on-year).
• The net debt /adjusted EBITDA ratio stood at 1.4x as of 31 December 2018.

FY 2018 FINANCIAL HIGHLIGHTS[1]

• Group audited revenue increased by 14.3% year-on-year to RUB 110.9 bn
  • Online revenue almost doubled year-on-year to RUB 8.8 bn.
  • Revenue in Kazakhstan almost doubled year-on-year to RUB 2.5 bn.
• Like-for-like sales at Detsky Mir stores in Russia grew by 4.3%. The number of tickets grew by 6.9% while the average ticket price decreased by 2.4%.
• Like-for-like sales at Detsky Mir stores in Kazakhstan increased by 30%.

• Detsky Mir opened 100 new branded stores[10] in 2018.
• Gross profit increased by 12.3% year-on-year to RUB 36.8 bn, with a gross margin of 33.2%.
• SG&A as a percentage of revenue decreased by 100 bps year-on-year, driven by increased operational efficiency.
• Adjusted EBITDA increased by 18.8% year-on-year to RUB 12.7; the adjusted EBITDA margin grew by 40 bps year-on-year to 11.4%. EBITDA totaled RUB 11.9 bn (+20.7% year-on-year);
• Adjusted net profit rose by 31.4% year-on-year to RUB 7.2 bn. Net profit totaled RUB 6.6 bn (+36.3% year-on-year).

EVENTS AFTER THE REPORTING PERIOD

• In February 2019, Detsky Mir Group opened its first store in the Belarusian capital Minsk, with total selling space of 1,690 sq m. Detsky Mir Group entered the Belarusian market under the Detmir brand, in line with its website’s domain name (detmir.ru in Russia and detmir.by in Belarus).      

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

“In 2018, Detsky Mir Group further strengthened its leading position in the children’s goods market and improved its operational efficiency. Despite the stagnation of the children’s goods market in Russia, our Company grew at a fast pace and increased revenues 14.3% to RUB 110.9bn. The key achievements of last year include the opening of 100 new stores, the doubling of online sales and a 36.3% increase in net profit.

“The key strategic goal of Detsky Mir is consolidation of the children’s goods market in Russia, Kazakhstan and Belarus. We aim to achieve this by expanding the chain, developing omni-channel sales and offering affordable and diverse products, including store brands. Detsky Mir retail chain has considerable growth potential, which is why we plan to open at least 300 more stores in the medium term.

“Our team will continue to make every effort to increase the Company’s market capitalisation and dividend payments. In Q4 2018, Detsky Mir’s net profit under RAS may amount to RUB 3.3bn, which gives grounds for the Company’s management to recommend distributing all net profit as annual dividends.”

View the full press release

Guidance

The Company’s management team expects to open at least 300 new Detsky Mir stores with IRR of ~40% in the next four 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 cheques in 2019. Another key strategic goal of the Group is boosting operational efficiency and maintaining the adjusted EBITDA margin at double-digit levels in the medium term.

In accordance with the Russian Accounting Standards (RAS), the Company’s management will recommend distributing all net profit for 2018 as dividends.

***

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 2018 Audited IFRS Financial Results.

The dial-in numbers for the conference call are:

Russia

+7495 646 93 15

8 800 500 98 63 (toll-free)

UK

+44 207 194 37 59

0800 376 61 83 (toll-free)

USA

+1 646 722 49 16

8442 860 643 (toll-free)

PIN:

62 435 204#

The conference call title: “Detsky Mir Group – FY 2018 Audited IFRS Financial Results”.

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 673 Detsky Mir stores in Russia and Kazakhstan located in 237 cities in Russia and 15 cities in Kazakhstan, as well as 57 ELC and nine ABC stores as of 31 December 2018. The Zoozavr retail chain comprises four stores. Total selling space was approximately 768,000 square meters.

In accordance with the audited Financial Statements under IFRS, Group revenue amounted to RUB 110.9 bn for FY 2017, 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: PJSC Sistema[11]  – 52.10%, Russia-China Investment Fund (RCIF) [12] – 14.03%, other shareholders owning less than 5% of the shares – 33.87%. 

Lear more at www.detmir.ru, corp.detmir.ru, elc-russia.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]) Hereinafter, 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]) 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.

([5]) Including 66 ELC and ABC stores, as well as four Zoozavr stores.

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

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

([10]) In 2018, Detsky Mir closed five stores.

([11]) 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.

([12]) 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 2018 Audited IFRS Financial Results

Detsky Mir Group would like to announce that FY 2018 IFRS results would be published on March 1, 2019.

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

Please find the details of the conference call below.

Date: Friday, March 1, 2019

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

+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)

PIN

62 435 204#