24 November 2016. Moscow, Russia. Detsky Mir Group ("Detsky Mir" or "the Group"), Russia's largest children's goods retailer, announces its unaudited financial results under International Financial Reporting Standards (IFRS) for the nine months ended 30 September 2016.
KEY FINANCIAL RESULTS FOR 9 MONTHS 2016 (UNAUDITED)
- OIBDA1 increased by 58.6% to RUB 4.6bn for 9M 2016 vs RUB 2.9bn for 9M 2015, OIBDA margin2 reached 8.5%;
- Group revenue increased by 35.7% to RUB 54.2bn for 9M 2016 vs. RUB 40.0bn for 9M 2015;
- Like-for-like sales at Detsky Mir stores in Russia grew by 12.7%3, with the number of ticket price growing by 4.2% and the average ticket price increasing by 8.2%;
- Gross profit increased by 31.2% year-on-year to RUB 18.1bn for 9M 2016 vs. RUB 13.8bn for 9M 2015; gross margin reached 33.3%;
- Selling, administrative and other operating expenses4 as a share of revenue decreased by almost 2.5p.p. to 24.8% compared to 27.3% for 9M 2015, driven by increased operational efficiency;
- Net income more than doubled to RUB 1.7bn;
- Net debt5/adjusted OIBDA LTM ratio6 as of 30 September 2016 improved to 1.6x vs 3.2x at the end of 9M 2015.
Vladimir Chirakhov, CEO of “Detsky Mir” PJSC, said:
“Detsky Mir Group has strengthened its leadership of the children's goods market thanks to revenue growth and continued improvements to operational efficiency. Consolidated revenue increased by 35.7% to RUB 54.2 billion. The main driver behind revenue growth was a double-digit increase in like-for-like sales of Detsky Mir stores in Russia of 12.7% and all stores opened in 2014-2015 operating at full capacity.
In 9M 2016, Detsky Mir increased OIBDA by 58.6% year-on-year, and significantly increased profitability while continuing to restrain price growth in order to attract customers. Operational efficiency played a key role in achieving these successful financial results. The Company’s management team is continuing to implement and introduce international best practices in IT and the development of logistical infrastructure. As a result, SG&A costs as a percentage of revenue declined by almost 2.5 p.p. Net profit more than doubled year-on-year.
Detsky Mir Group is continuing to roll out its geographical expansion programme. In August of 2016 the Company opened its first store in Chita, which is now the easternmost city where we have a presence in Russia.
Kazakhstan remains a key region for future network expansion. Detsky Mir Group has opened its first store in Aktobe. As of the end of the period, Detsky Mir had nine stores in five cities across Kazakhstan.
Detsky Mir remains on track to deliver planned network growth of opening at least 90 stores during 2016. Since the start of the year we have opened 40 new stores, and the rest will be opened during peak sales season in 4Q.”
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