Detsky Mir Group announces operating results for the first quarter 2017

Detsky Mir Group (“Detsky Mir”, “the Group” or “the Company”) (MOEX: DSKY), Russia’s largest specialized children’s goods retailer, announces its operating results for the first quarter ended 31 March 2017.                

KEY OPERATING RESULTS FOR 1Q 2017

• Group unaudited retail revenue increased by 26.8% to RUB 20.8bn, vs. RUB 16.4bn in 1Q 2016;
• In accordance with the methodology of calculation of like-for-like comparisons, which would be closer to methodologies used in operating and financial reporting of publicly traded food retailers in Russia, like-for-like sales at Detsky Mir stores in Russia grew by 11.2%[1], with the number of tickets growing by 13.3% and a decline in the average ticket price by 1.9%;
• Group stores amounted to 521[2] with total retail floorspace of approximately 596,000 sq. m. In the first quarter of 2017, two Detsky Mir branded stores[3] were opened.

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

“In 1Q 2017, Detsky Mir reaffirmed its leadership in the Russian children’s goods market. Its consolidated unaudited retail revenue grew by 26.8% to RUB 20.8bn, mainly due to the growing maturity of stores opened in 2016 and 2015, and also to the 11.2% like-for-like sales growth and a double-digit increase of LfL number of customers.

Its dominant market position enables Detsky Mir to sign exclusive agreements with the biggest manufacturers of children’s goods. In 1Q, it signed a direct contract with the Japanese company Epoch for supply of the new promising brand Aquabeads, which has already demonstrated high sales in Germany.

Detsky Mir will continue its expanding in 2017 by opening at least 70 new super- and hypermarkets.

Going public was an important milestone for the company, which was highly recognised by the international investment community. Detsky Mir will strive to unlock the full potential of its legendary brand to develop the business in the interests of its shareholders”.

([1])Alternative like-for-like average growth, like-for-like number of tickets growth and like-for-like revenue growth based on the stores that have been in operations for at least 12 full calendar months.

([2]) The number of ELC stores amounted to 41 due to the relocation of retail properties. The opening of new stores is scheduled for the second half of 2017.

([3]) In 1Q 2017, two Detsky Mir stores were closed for further relocation.

([4]) LfL growth includes only DM stores in Russia that were in operations for one full prior calendar year. For example, the like-for-like comparison of retail sales between 1Q 2017 and 1Q 2016 would include revenue of all Detsky Mir stores that were opened prior to 31 December 2015 and that were in operation during the entirety of 2016 and 1Q 2017.