AFK Sistema : Detsky Mir Group announces it’s 1H 2014 operating results

24/07/2014

Detsky Mir Group announces it's 1H 2014 operating results

24 July 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 operating results for 1H 2014 ended on 30 June 2014.

KEY OPERATING RESULTS FOR 1H 2014

• The Group's revenue has increased by 26.9%, to RUB 18.1bn, vs RUB 14.3bn in 1H 2013.
• Detsky Mir's like-for-like sales gained 18.1% (with the number of checks growing by 13.1%, and the average check growing by 4.5%);
• The number of stores in the Group increased to 265 as a result of 14 new stores opened in 1H 2014, including 9 new Detsky Mir stores and 5 ELC stores

Vladimir Chirakhov, CEO of Detsky Mir Group: 

"Detsky Mir continues implementing its strategy for improving business efficiency. The main operational improvements performed in 2013 had a positive impact on the 2014 results. Such improvements were introduced in assortment management, merchandising and pricing.

In 1H 2014 the Group opened 14 new stores, including 9 DM stores and 5 ELC stores. 5 out of the 14 new stores were opened in the Moscow region. In general, we expect to open at least 40 DM stores and 10 ELC stores by the end of the year. As is customary, most of the openings are scheduled for the second half of the year. In particular, we are focused on rolling out stores in our new concept, which was first presented in December 2013 in the MEGA Belaya Dacha shopping mall. We already have 4 stores operating in the new concept, and plan to have 10 of them by the end of the year. On top of that, every new DM store opened contains elements of the new concept, which becomes an additional factor stimulating growth in both traffic and the number of items in the average check.

Revenue in 1H 2014 grew by 27% YoY. The high growth rate largely results from high LFL sales: LFL growth totalled 18.1%, mostly due to the growth in the number of checks by 13.1%. This highlights the organic nature of our growth on the back of influx of new customers and an increase in repeat sales to our loyal base." 

***

Download full version of press release

For additional information contact:

Nadezhda Kiseleva Head of PR + [phone], ext. 2041 Cell: [phone] [e-mail]

Eduard Kelenchuk Head of Corporate Finance + [phone], ext. 2083 [e-mail]

The Detsky Mir Group is the largest children's goods retailer in Russia. The Group includes the national-wide retail chain Detsky Mir, the luxury shopping centre Yakimanka Children's Gallery, the ELC retail chain, and two online stores (DM and ELC). As of 30 June 2014, Detsky Mir's chain is represented by 232 stores in Russia and Kazakhstan. The total floorspace of the chain is 328,000 sq.m. Detsky Mir's principal shareholder is Sistema JSFC. Websites: www.detmir.ru, www.det-mir.ru.

Sistema JSFC is the largest publicly-traded diversified holding company in Russia and the CIS that 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$ 35.9 billion for Q1 2014 and total assets of US$ 43.2 billion as at Monday, March 31, 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 MICEX-RTS Stock Exchange, and under the symbol "SIST" on the Moscow Stock Exchange (MSE). 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.