OREANDA-NEWS. OJSC Detsky Mir Group (“Detsky Mir” or the “Group”), the largest children's goods retail chain in Russia, announces its audited US GAAP financial results for the full year ended December 31, 2013.

2013 FINANCIAL HIGHLIGHTS

Total revenue up 27.2% year-on-year to USD 1,130 million (30.3% in RUB terms);

Like-for-like sales grew 13.4% (8.2% in number of tickets and 4.8% in average ticket);

Gross profit up 23.8% year-on-year to USD 437 million with a gross margin of 38.6% (versus 39.7% in 2012);

SG&A expenses fell as percentage of revenue to 31.0% from 33.8% in 2012 due to increased operating efficiency and cost cutting measures;

Adjusted EBITDA increased 61.7% year-on-year to USD 91.5 million, with a margin of 8.1%;

Net profit more than doubled year-on-year to USD 36 million;

Net debt/adjusted EBITDA stood at 1.7x at the end of 2013;

As of December 31, 2013, the Company's net debt amounted to USD 154.7 million.

2013 KEY CORPORATE HIGHLIGHTS

Opened 41 new stores, including 33 Detsky Mir branded stores and 8 ELC branded stores, and increased its total selling space to 319.9 thousand sq.m. from 290.8 thousand sq.m. as of 31 December 2012;

Launched a new store design concept at the “MEGA Belaya Dacha” shopping mall in the Moscow region;

Repurchased 25%+1 share from Sberbank;

Paid out annual dividends for 2012 in the amount of USD 12.7 million;

Expanded its online store coverage from 66 to 98 cities across Russia.

Vladimir Chirakhov, Chief Executive Officer of Detsky Mir,commented:

“2013 was a year of acceleration of top line growth and improved operational efficiency for Detsky Mir. While the Group had strong revenue growth stemming from the roll-out of new stores and steadily improving like-for-like sales to 13.4%, our focus throughout the year has been on optimising operational efficiency resulting in a sharp increase in the adjusted EBITDA margin to 8.1% in 2013 compared to 6.4% in 2012.

Gross margin decreased slightly from the 2012 level as we expanded our product offering and actively pursued our price leadership strategy. This reduction has been more than offset at the EBITDA level as we aggressively improved operational efficiency by increasing the number of sales per square metre, optimising in-store personnel costs, improving logistics and reducing central office costs and rental expense as percentage of sales.

While the Group's net debt increased mainly due to the buyout of 25%+1 of our shares from Sberbank, we remain fully committed to conservative financial policy, maintaining our leverage at a comfortable level.

We are looking forward to 2014 as operational changes implemented in 2013 continue to bear fruit in 2014. We continue our nationwide expansion, introducing our new concept across the retail chain and vigorously pursuing further operational cost-savings at all levels of our business.”