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 2014 ended on 30 June 2014.
KEY UNAUDITED FINANCIAL AND OPERATING RESULTS FOR 1H 2014
OIBDA reached a positive result of RUB 699m, compared to OIBDA loss of RUB 159m in 1H 2013, and OIBDA margin reached 3.9% of revenue
Revenue grew by 26.8% compared to 1H 2013, and reached RUB 18.1bn
In 1H 2014, the Company opened 14 new stores, including 9 Detsky Mir stores and 5 ELC stores.
Selling space reached 328,000 sq m in 1H 2014
Like-for-like sales gained 18.1% (with the number of checks growing by 13.1%, and the average check growing by 4.5%);
Gross profit grew by 24.7% in 1H 2014 to RUB 6.3bn; gross margin amounted to 34.9% compared to 35.5% in 1H 2013.
Selling, general and administrative expenses to revenue ratio fell from 36.6% to 31.0% due to increased operating efficiency and measures taken to reduce costs
The Company's net debt totalled RUB 7.7bn as of 30 June 2014, having grown from a year before mainly due to the buyback of shares in July 2013. The increase in net debt from December 2013 is due to working capital financing ahead of high sales season in August.
Net Debt/OIBDA LTM amounted to 2.1x as of 30 June 2014
KEY UNAUDITED RESULTS FOR THE 12 MONTHS ENDED JUNE 2014.
OIBDA increased by 81.0% to RUB 3.6bn; OIBDA margin grew from 6.4% to 9.1%
Revenue grew by 27.1% YoY to RUB 39.8bn
The Company opened 42 new stores, including 32 DM stores and 10 ELC stores
Selling space grew by 12.1%, from 293,000 sq m to 328,000 sq m
Gross Profit increased by 23.7% to RUB 15.1bn; gross margin declined slightly from 39.1% to 38.1%
Net income nearly doubled to RUB 1.4bn; net income margin grew from 2.4% to 3.5%
Vladimir Chirakhov, CEO of Detsky Mir said:
"In the first six months of 2014, the Company's revenue continued growing at a high pace, increasing by 26.8% compared to the same period of last year.
Growth of revenue of mature stores contributed significantly to this result, which is seen in the 18.1% increase of Like-for-Like sales. Number of customers purchases remained the key growth driver of Like-for-Like sales, increasing by 13.1% and the average check for Like-for-Like stores grew by 4.5%.
We continued intensive development, opening 9 new Detsky Mir stores under a new concept and 5 ELC stores. We have also begun converting the existing stores into the new concept, shutting down 7 big stores for remodeling for 2 to 3 months.
Our cost-cutting efforts continued to yield results: SG&A as a percentage of revenue declined from 36.6% to 31.0% in the first half of the year. As a result, the Company's OIBDA at for the period totalled RUB 699m, as opposed to an OIBDA loss in first half of 2013.
We plan even more new openings in the second half of the year. A milestone event will be the opening of our flagship store in the center of Moscow, at Vozdvizhenka 10, which will become Russia's biggest children's goods store. We plan to open at least 30 new stores before the yearend, including at least 25 Detsky Mir's and 5 ELC stores. We will continue working to implement a single SAP platform, expand warehouse logistics and make other operational improvements aimed at increasing the efficiency of Detsky Mir's business."