DETSKY MIR GROUP ANNOUNCES OPERATING RESULTS FOR 1st HALF 2016

Detsky Mir Group (“Detsky Mir” or “the Group”), Russia’s largest children’s goods retailer, announces its unaudited operating results for the first half of 2016, which ended on 30 June 2016.

KEY OPERATING RESULTS FOR 1st HALF 2016

• Group unaudited revenue increased by 36% to RUB 33.7bn, vs. RUB 24.7bn in 1H 2015
• Like-for-like sales at Detsky Mir stores in Russia grew by 13.0%[1], with the number of checks growing by 1.6% and the average check increasing by 11.2%;
• Group stores increased to 444 with total retail floor space of approximately 511 th. sq.m. as a result of the opening of 20 new Detsky Mir stores in 1H 2016.

Vladimir Chirakhov, CEO of Detsky Mir Group, said:

“Unaudited consolidated revenue in the first half of 2016 increased by 36% year-on-year. Despite the continued decline in Russian retail sales, we maintained the double-digit pace of sales growth at comparable stores, with like-for-like sales growth of 13.0%.

Detsky Mir Group remains committed to its strategic goals of expanding its geographical footprint and improving its operational efficiency. In the first half the Group opened 20 new stores, including 11 Detsky Mir stores in the Moscow region and in Kazakhstan. As well as openning our first stores in Moscow region towns including Stupino, Sergiev Posad, Voskresensk and Istria, we have continued to expand outside the capital region, with opening in Kamensk-Uralsky (Urals). At the end of June the 400th Detsky Mir store was opened.

Dynamic growth and our strong financial position mean we are able to adjust our previously announced plan of geographical expansion. In 2016, the Company will open at least 80 Detsky Mir stores instead of the previously planned 50.

E-commerce remains our fastest growing segment. In 1H 2016 Group revenue from this segment more than doubled year on year, driven principally by a higher conversion rate.”

([1])  Here and elsewhere like-for-like (LFL) sales and average check are calculated in Russian roubles. Trends are presented for the comparative period (H1 2016 to H1 2015) and include only Detsky Mir stores in Russia.

([2]) Net chain growth since the beginning of 2016 amounted to 19 stores including relocation