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fast delivery business vertical), according to Interfax. Andrey Spivak will take up the role of Detsky Mir’s CFO from 16 August. Mr. Spivak previously held a number of senior management positions in various retail and FMCG companies, including Magnit (where he was the head of analytics, reporting and big data, controlling and economics director, deputy CFO), X5 (as CFO of Perekrestok, the head of financial planning and analysis) and Wrigley (where he held various finance positions in Russia, Ukraine and Germany). The retailer also announced the appointment of Sergey Li as COO effective from 15 July. Mr. Li came to Detsky Mir from M.Video where he was Managing Director overseeing the development of Eldorado. Before that he was in charge of procurement, marketing and logistics at M.Video. Mr. Li’s main focus will be on strategic and operational management of Detsky Mir’s business in Russia, Kazakhstan and Belarus, as well as the development of new store concepts and facilitating the company’s digital transformation.
Detsky Mir has published its 1H21 RAS financial results, featuring net income of RUB3.9bn (up 3x y/y). RAS net income is the base for distributing dividends, as the company historically pays 100% of RAS net income. The stated amount of RUB3.9bn implies a 4% dividend yield, and the respective seasonality creates comfort for our annualised forecast of 12%. Historically, there have been two payments per annum: for the first nine months and then for the whole financial year. Detsky Mir has returned the best sectoral performance so far in 2021, with the stock being flat YTD (all other listed retailers are down, with a blended stock price decline of 15%). We see the rebounding operational profile and aggressive dividend strategy as the prime tailwinds for Detsky Mir’s investment case.
Detsky Mir published its 2Q21 IFRS results on August 25. Consolidated revenues rose 29.6% y/y to R37.4bn, in line with the trading update reported beforehand, and representing an acceleration from the 14.9% growth seen in 1Q21, mainly due to traffic normalizing and online revenue growth. The gross margin climbed 1.1 pp y/y to 31.9% due to an increase in higher-margin categories, including private label, in the sales mix.
SG&A expenses (excluding D&A and the LTIP) rose 1.8 pp y/y to 20.2% of revenues, amid a ramp-up of stores that saw limited operations in 2020 and the scheduled renegotiation of commercial leases. Adjusted EBITDA expanded 24.2% y/y to R4.4bn (adjusted for a R1.3bn, one-off forgivable loan and share-based and cash bonus payments to the management under the LTIP), while the adjusted EBITDA margin eased 0.5 pp y/y to 11.8%. Meanwhile, unadjusted EBITDA jumped by 55.3% y/y, for a 14.6% EBITDA margin. Adjusted net income came in at R2.7bn, up from R1.4bn in 2Q20.
155 RUSSIA Country Report September 2021 www.intellinews.com