AFK Sistema : Sistema invests in Concept Group

Sistema invests in Concept Group

Moscow, Russia - October 22, 2014 - Sistema JSFC ("Sistema") (LSE: SSA), the largest publicly-traded diversified holding company in Russia and the CIS, today announces that it has completed the purchase of a 40% stake for a total consideration of approximately RUB 1 billion in a holding company that owns Concept Group, one of Russia's leading fashion clothing retailers by revenue growth. 

In accordance with the terms of the signed documentation Sistema has an option to increase its shareholding in Concept Group to a controlling stake within three years. 

Founded in 2004, Concept Group creates collections and sells women's clothing, accessories, lingerie as well as children's wear through its own stores, franchises, online and wholesale channels. It operates under the Concept Club, Bestia, Infinity Lingerie and Acoola brands. As of the end of 2013, Concept Group's retail chain comprised 287 stores in 103 cities across Russia with an average store area of 100-250 sq.m. In 2013, Concept Group's revenue exceeded RUB 5 billion, demonstrating increase of nearly 40% in comparison with its revenues in 2012. 

Mikhail Shamolin, President and CEO of Sistema, commented: 

"Concept Group is a fast-growing company with a proven business model and an experienced management team. The Russian clothing market has been developing rapidly over many years and has high potential for organic and non-organic growth. We believe that Concept Group is an attractive investment, which offers an opportunity to broaden our presence in the promising retail segment." 

*** 

For further information, please visit www.sistema.com or contact: 

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

The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. 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. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do 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 our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.