DETSKY MIR GROUP INCREASES NET INCOME TO RUB 627 MLN IN H1 2016
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 six months ended 30 June 2016.
KEY FINANCIAL RESULTS FOR H1 2016
- OIBDA[1] increased nearly twofold to RUB 2.4bn in H1 2016 vs RUB 1.3bn in H1 2015, while OIBDA margin reached 7.1%;
- Group revenue increased by 36.3% to RUB 33.7bn vs. RUB 24.7bn in H1 2015;
- Like-for-like sales at Detsky Mir stores in Russia grew by 13.0%[2], with the number of checks growing by 1.6% and the average check increasing by 11.2%;
- Gross profit increased by 32.8% year-on-year to RUB 11.2bn vs. RUB 8.4bn in H1 2015; gross margin reached 33.2%;
- Selling, administrative and other operating expenses[3] as a share of revenue decreased by almost 3p.p. to 26.1% compared to 28.8% in H1 2015, driven by increased operational efficiency;
- Net income increased by 70.2% year-on-year to RUB 627mln;
- Net debt/adjusted OIBDA LTM ratio[4] as of 30 June 2016 improved to 1.8x vs 2.6x at the end of H1 2015.
Vladimir Chirakhov, CEO of Detsky Mir Group, said:
“Despite the weak macroeconomic environment Detsky Mir Group continued to demonstrate solid growth of operating and financial indicators in H1 2016.
Consolidated revenue increased by 36.3% year-on-year to RUB 33.7bn. Like-for-like sales at Detsky Mir stores grew by 13.0%, contributing significantly to the increase in sales.
Our previously approved strategy to improve operational efficiency had a positive affect on the Company’s financial results. Commercial, administrative and other operating expenses as a share of revenue decreased by almost 3p.p. As a result, Detsky Mir Group’s OIBDA nearly doubled year-on-year to RUB 2.4 bn. Net income also demonstrated a positive trend, increasing by 70.2% year-on-year.
The expansion plan is being implemented in full, and since the beginning of the year 20 new stores have been opened. In 2016, the Company is increasing its pace of expansion in Kazakhstan, with a new store having been opened in Almaty in June. At least four supermarkets in various cities across the country will be opened before the end of the year.
Business expansion typically picks up during the second half of the year.. In total the Group will open at least 80 Detsky Mir stores in 2016.
FINANCIAL PERFORMANCE IN H1 2016 VS. H1 2015
|
RUB bn |
H1 2015 |
H1 2016 |
Change, YoY (%) |
|
|
Number of stores (units) |
347 |
444 |
28.0% |
|
|
Detsky Mir[5] |
303 |
400 |
32.0% |
|
|
ELC |
44 |
44 |
0.0% |
|
|
Selling space (thousand sq m ) |
411 |
511 |
24.3% |
|
|
Revenue |
24.7 |
33.7 |
36.3% |
|
|
Gross profit |
8.4 |
11.2 |
32.8% |
|
|
Gross margin (%) |
34.1% |
33.2% |
-0.9p.p |
|
|
Selling, administrative and other operating expenses |
7.1 |
8.8 |
23.5% |
|
|
% of revenue |
28.8% |
26.1% |
-2.7p.p |
|
|
OIBDA |
1.3 |
2.4 |
83.1% |
|
|
OIBDA margin (%) |
5.3% |
7.1% |
1.8p.p |
|
|
Net income / (loss) |
0.4 |
0.6 |
70.2% |
|
|
Net profit margin (%) |
1.5% |
1.9% |
0.4p.p |
FINANCIAL PERFORMANCE IN 12 MONTHS ENDED 30 JUNE 2016
|
RUB bn |
LTM as of June 2015 |
LTM as of June 2016 |
Change YoY,% |
|
|
Revenue |
52.1 |
69.5 |
33.5% |
|
|
Gross profit |
19.4 |
24.7 |
27.3% |
|
|
Gross margin (%) |
37.2% |
35.5% |
-1.7p.p |
|
|
Selling, administrative and other operating expenses[6] |
14.3 |
17.4 |
21.6% |
|
|
% of revenue |
27.5% |
25.0% |
-2.4p.p. |
|
|
OIBDA[7] |
5,1 |
7.3 |
43.3% |
|
|
OIBDA margin (%) |
9.8% |
10.5% |
0.7 p.p |
|
|
Net income / (loss)[8] |
2.4 |
2.4 |
3.3% |
|
|
Net profit margin (%) |
4.5% |
3.5% |
–1.0p.p |
|
|
Net debt |
13.0 |
13.0 |
0.01% |
|
|
Net debt / OIBDA (x) |
2.6х |
1.8х |
|
([1]) OIBDA was calculated based on the financial statement under IFRS by adding depreciation costs to operating income.
([2]) Here and elsewhere, like-for-like (LFL) sales and average check are calculated in Russian roubles. Trends are presented for the comparative period (H1 2016 to H1 2015) and include only Detsky Mir stores in Russia.
([3]) Selling, general and administrative expenses and other operating expenses are calculated without depreciation and amortization.
([4]) Adjusted OIBDA LTM excludes one-off effects related to the disposal of the Yakimanka building and payments under the long-term incentive scheme.
([5]) Net chain growth since the beginning of 2016 amounted to 19 stores including relocations
([6]) Excluding one-off effects related to the disposal of the Yakimanka building and payment of bonuses under the long-term incentive scheme
([7]) Excluding one-off effects related to the disposal of the Yakimanka building and payment of bonuses under the long-term incentive scheme
([8]) Excluding one-off effects related to the disposal of the Yakimanka building, payment of bonuses under the long-term incentive scheme and other non-operating one-off costs