Detsky Mir Group recorded a net loss of 1 million rubles in the 2022st quarter of 517
According to the IFRS financial statements of Detsky Mir Group for the 1st quarter of 2022, which ended on March 31, 2022, the group's net loss amounted to RUB 517 million. against net profit of 1,3 billion rubles received in the same period last year.
In the reporting quarter, the group received a foreign exchange loss of RUB 1,5 billion. against a loss of RUB 56 million in the first quarter of 2021. The main reason for the formation of exchange rate differences was the revaluation of accounts payable to suppliers of goods, says the official press release of Detsky Mir Group.
At the same time, in the reporting period, the group's total sales (GMV) increased by 7,6% year-on-year to RUB 42,7 billion. The group's revenue increased by 6,1% to RUB 37,9 billion. Gross profit increased by 8,3% and amounted to 11,4 billion rubles. Gross profit amounted to 30,2% of revenue, up 0,6 p.p. year by year.
Gross profit growth was due to an increase in the share of private label and direct import sales, as well as due to effective pricing and margin management.
In the reporting period, EBITDA decreased by 9,8% to RUB 2,6 billion. EBITDA margin was 6,7%, down 1,2 p.p. year by year. Among the main drivers for the decline in the indicator are reduced traffic amid continued restrictions on the work of stores in January and February, due to the situation with the spread of coronavirus in Russia, as well as a general market decline in consumer demand amid high economic uncertainty. In addition, pressure was exerted by inflation of key operating costs, which outpaced sales growth.
Adjusted profit before tax in the reporting quarter amounted to RUB 1,1 billion. against the adjusted profit of 2,1 billion rubles received in the same period last year.
Selling, general and administrative expenses (net of depreciation and LTI) accounted for 23,2% of revenue in the reporting quarter, up 2,2 percentage points. year by year. The main cost-to-revenue drivers were a general increase in chain operating expenses driven by inflation in the fourth quarter of 2021, as well as a decrease in like-for-like sales in the first quarter (-2,1% yoy).
At the end of the reporting quarter, the total number of the group's stores increased by 27,8% yoy to 1 stores located in 125 cities and towns in Russia, Kazakhstan and Belarus. 447 Detsky Mir stores were opened in Russia, 3 Detsky Mir stores in Kazakhstan, 2 Detmir stores in Belarus, and 2 Zoozavr store. The selling space of the group's retail stores increased by 1% to 8,9 sq. m. m. The number of partner points for issuing orders and parcel lockers has grown to 982 thousand.
In the reporting quarter, Detsky Mir launched a new federal distribution center in the Urals. Currently, the company operates three federal distribution centers in the Moscow region and Yekaterinburg and three regional centers in the Rostov and Novosibirsk regions, as well as in the Republic of Tatarstan. The total size of the warehouse area is 238 thousand square meters. m.
“The first quarter of 2022 was not easy for the market and Detsky Mir,” says Maria Davydova, General Director of PJSC Detsky Mir. - Despite macroeconomic turbulence, the company managed to increase sales by 7,6%, while digital sales grew by 19,9%. The share of online sales in Russia was 32% in the first quarter of 2022. The share of the marketplace in online sales more than doubled to 2%. The high growth rate of the marketplace allows the company to develop the range and improve the customer experience, optimizing investments in inventory. We continue to invest in logistics infrastructure, ensuring the further growth of the digital channel.
In all categories, we continue to develop our private labels (PL) and switch to direct contracts with import suppliers to ensure the first price on the shelf. In the first quarter of 2022, the share of sales of private labels (PL) and direct import goods amounted to 44,8%, an increase of 4.3 p.p. year by year.
In the first quarter, our main focus was to ensure business continuity, maintain a wide and accessible product range on store shelves and online channels, and optimize operating costs. We are doing our best to meet the current challenges.
The company adheres to strict financial discipline, thanks to which its financial position remains stable. At the end of the first quarter, Net Debt/EBITDA remained at our comfortable 1,7x.
Despite the challenging macroeconomic environment, we look to the future with confidence and remain focused on further market consolidation.”
Group of companies "Detsky Mir" unites the retail chains of Detsky Mir and Detmir mini stores, the online store and marketplace detmir.ru, as well as the Zoozavr pet products chain. As at 31 March 2022, the Group has 1 stores located in 125 cities and towns in Russia, Kazakhstan and Belarus. Selling area of stores - 447 thousand square meters. m.
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