28/10/2014

Detsky Mir announces it's unaudited financial performance results for 9M 2014

28 October 2014 Russia, Moscow.Detsky Mir Group (hereinafter referred to as "Detsky Mir" or "the Group"), Russia's largest children's goods retailer, announces its unaudited financial and operating results for 9M 2014 ending on 30 September 2014.

KEY FINANCIAL AND OPERATING RESULTS FOR 9M 2014 (UNAUDITED)

  • The number of the Group's stores increased from 252 (as of the end of 2013) to 297 as a result of opening of 33 new Detsky Mir stores and 14 new ELC stores.
  • The total selling space increased by 43,000 sq.m, from 320,000 sq.m as of 31 December 2013 to 363,000 sq.m as of 30 September 2014.
  • The Group's revenue increased by 23.8%, from RUB 24.1bn as of 30 September 2013 to RUB 29.8bn as of 30 September 2014.
  • Like-for-like turnover of Detsky Mir stores increased by 14.2% YoY.
  • Gross profit increased by 21.9%, from RUB 9.0bn as of 30 September 2013 to RUB10.9 bn as of 30 September 2014.
  • Selling, general and administrative expenses (SG&A) as a % of revenue as of the end of 9M 2014 declined 4.2 p.p., from 33.3% to 29.1%.
  • OIBDA (adjusted EBITDA) increased by 140% in absolute terms, from RUB 945m as of 30 September 2013 to RUB 2.3bn as of 30 September 2014.
  • OIBDA (adjusted EBITDA) margin increased by 3.7 p.p., from 3.9% as of 30 September 2013 to 7.6% as of 30 September 2014.
  • Net income increased 16 times, from RUB 38m as of 30 September 2013 to RUB 613m as of 30 September 2014.
  • Net income margin increased by 1.9 p.p., from 0.2% as of 30 September 2013 to 2.1% as of 30 September 2014.

Vladimir Chirakhov, CEO of Detsky Mir Group:

"Group OIBDA increased 2.4 times in the 9 months to Sep 30 2014. Detsky Mir continues to aggressively develop and open new stores in Russian cities despite macroeconomic downturn. We opened 33 Detsky Mir stores over 9M 2014, which is as many as we opened over the full twelve months of 2013. We also opened 14 ELC stores, which is 6 stores more than we opened in 2013. We intend to new store roll out in Q4 2014.

Revenue for 9M 2014 grew by 24% YoY, largely due to  double-digit LFL growth (14.2%), maturation of the stores opened in 2012 (47 stores) and 2013 (33 stores), as well as new stores opened in 2014. We have maintained our competitive pricing policy, keeping our prices among the sector's lowest despite accelerating inflation in 2014.

Growing OIBDA margin testifies to positive results of the operational improvements introduced by our team to enhance business efficiency and optimise costs. It is telling that the LFL sales growth over 9M 2014 exceeds the growth of selling, general and administrative expenses (SG&A) by 6.1 p.p., which should be impressive for any retail business." 

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For additional information contact:

Detsky Mir Group

Nadezhda Kiseleva

Head of Public Relations

(495) 781 08 08, ext. 2042

nkiseleva@detmir.ru


Eduard Kelenchuk

Head of Corporate Finance

(495) 781 08 08, ext. 2083

ekelenchuk@detmir.ru

Detsky Mir Groupis the largest children's goods retailer in Russia. The Group comprises the nation-wide retail chain Detsky Mir, the luxe shopping centre Yakimanka Children's Gallery, the ELC retail chain, and two online stores (DM and ELC). As of 30 September 2014, Detsky Mir's chain was represented by 255 stores in Russia and Kazakhstan, the ELC chain had 41 stores in Russia. The total floorspace of the chain is 363,000 sq.m. Detsky Mir's principal shareholder is Sistema JSFC. For more information, visit our website www.investor.detmir.ru.

Sistema is the largest publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the Company reported revenues of US$ 8.8 billion for the second quarter of 2014, and total assets of US$ 45.2 billion as at June 30, 2014. Sistema's global depository receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the symbol "AFKS" on the Moscow Exchange. Sistema was ranked number 308 in the 2013 edition of the Fortune Global 500 list. Website: www.sistema.com

Some of the information in this document may contain projections or other forward-looking statements regarding future events of the Detsky Mir Group and Sistema JSFC. Such statements contain phrases like "expected", "estimated", "intended", "will", "could", negatives of such statements, and other similar expressions. We would like to warn you that such statements are assumptions only and the actual course of events and their results may differ significantly from such statements. We do not intend to revise such statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Due to numerous factors, the actual results of the Detsky Mir Group and Sistema JSFC may differ significantly from those stated in our assumptions and projections. Such factors may include general economic conditions, competitive environment in which we operate, risks related to the operations in Russia, rapid technological or market changes in our sphere of business, and many other risks directly related to the Detsky Mir Group and Sistema JSFC and their activities.

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