25 August 2014. Russia, Moscow. OJSC Detsky Mir (hereinafter referred to as "Detsky Mir" or "the Company"), Russia's largest children's goods retailer, announces its unaudited financial results under US GAAP for 1H 2015 ended on 30 June 2015.

KEY UNAUDITED FINANCIAL AND OPERATING RESULTS FOR 1H 2015

o   OIBDA increased by 88.4% from RUB 699 mln in the first half of 2014 to RUB 1.317 bln in the first half of 2015, and OIBDA margin reached 5.3%

o   Revenue grew by 36.6% compared to 1H 2014, and reached RUB 24.7bn

o   In 1H 2015, the Company opened 26 new stores, including 25 Detsky Mir stores and 1 ELC store

o   Selling space reached 411,000 sq m in 1H 2015

o   Like-for-like sales gained 15.8% (with the number of checks growing by 5.5%, and the average check growing by 9.8%)

o   Gross profit grew by 33.5% in 1H 2015 to RUB 8.4bn; gross margin amounted to 34.1% compared to 34.9% in 1H 2014

o   Selling, general and administrative expenses to revenue ratio fell from 31.0% to 28.8% due to increased operating efficiency and measures taken to reduce costs

o   Net income was RUB 368 mln in 1H 2015 vs Net losses of RUB 365 mln in the same period of the previous year

o   The Company’s net debt totaled RUB 13.0 bn as of 30 June 2015.  The increase in net debt from the beginning of 2015 is due to working capital financing ahead of high sales season in August

o   Net Debt/OIBDA LTM amounted to 2.3x as of 30 June 2015

KEY UNAUDITED RESULTS FOR THE 12 MONTHS ENDED JUNE 2015.

o   OIBDA increased by 52.3% to RUB 5.5bn; OIBDA margin grew from 9.1% to 10.6%

o   Revenue grew by 30.8% YoY to RUB 52.1bn

o   The Company opened 84 new stores, including 72 DM stores and 12 ELC stores

o   Selling space grew by 25.3%, from 328,000 sq m to 411,000 sq m

o   Gross Profit increased by 27.8% to RUB 19.4bn; gross margin declined slightly from 38.1% to 37.2%

o   Net income nearly doubled to RUB 2.7bn; net income margin grew from 3.5% to 5.2%

Vladimir Chirakhov, CEO of Detsky Mir said:

"Detsky Mir continues to show high growth businesses.

In the first six months of 2015 the Company's revenue increased by 36.6% compared to the same period of last year. Significant growth was spurred by a boost in sales in existing stores, which is reflected in a like-for-like growth of 15.8%. The main driver of like-for-like sales is the average check, which is up 9.8%, with the number of purchases made (number of checks) in like-for-like stores increased by 5.5%.

For the first time in a long period Detsky Mir closed first half of a year with a net profit of RUB 368m, which results from a strategy focused on improving the efficiency of business processes, optimising the product matrix, and revising the retail concept. An important factor enhancing the efficiency of business processes was the adoption of a single SAP platform automating key business processes.

The chain growth rate all but doubled year-on-year: in the first 6 months of 2015 the Group opened 26 new stores (cf.: 14 new stores in 2014). The Company also entrenched its position in the Moscow region by opening 10 new local stores and went on to enter new Russian cities.

In total, we expect to open at least 80 DM stores and 2 ELC stores by the end of the year.

Detsky Mir's business development is also very much aided by e-commerce: the revenue Detsky's online store (www.detmir.ru) generated in 1H 2015 is more than a double of that earned in 1H 2014. 

The high rates of growth and chain expansion will be further maintained in the future with a new 70,000 sq.m warehouse complex in the Moscow region built for Detsky Mir by PNK Group and commissioned in July 2015."

Download full version of the press release

Download presentation