April 11, 2013, Moscow, Russia.Detsky Mir Group ("Group") - Russia's largest children's goods retailer - has announced its US GAAP 2012 financial results.

FINANCIAL HIGHLIGHTS

- Revenue rose 20.6% (14.0% in dollar terms) over 2011 to reach RUB 27,753 million (USD 893 million).

- LFL sales at company stores rose 5.7%.

- Gross profit was up 22.2% (15.5% in dollar terms) to RUB 10,998 million (USD 354 million). Gross margin increased 0.5 pp to 39.6% in 2012.

- Commercial and administrative expenses were down 2.2 pp to 33.7% of revenue.

- OIBDA came to RUB 1,682 million (USD 54 million) in 2012, a 108.7% increase on 2011. OIBDA margin increased 2.6 pp in 2012 to 6.1%.

- Group net profit for 2012 was RUB 456 million (USD 15 million), compared to a RUB 217 million (USD 7 million) loss in 2011.

- Group net debt was down 15.5% in 2012 to RUB 1,366 million (USD 45 million).

- Net debt/OIBDA stood at 0.8x at the end of 2012, compared to 2.0õin 2011.

- Group operating cash flow in 2012 rose 42.3% to RUB 1,578 million (USD 51 million).

KEY BUSINESS RESULTS AND CORPORATE EVENTS

- Vladimir Chirakhov moved from commercial director to CEO of JSC Detsky Mir - Center, the group's management company, in October 2012. Vladimir replaces Gennady Levkin. Before joining Detsky Mir, Vladimir spent several years in leading positions with M.Video and Korablik.

- In July 2012, JSC Detsky Mir - Center acquired LLC Kub Market, which was developing a chain of Early Learning Centre (ELC) franchises in Russia. ELC is growing fast and ended 2012 with 20 branded stores, several corners in Detsky Mir stores, and an online store.

- Detsky Mir's share of the RF children's goods market rose 0.6 pp in 2012 to reach 7.1%.

- 47 Detsky Mir and 1 ELC store were opened in 2012, with 1 Detsky Mir store closed. Detsky Mir Group ended 2012 with 216 stores, and total retail space up 23.3% to 291,000 sq. m.

- In 2012 the online store expanded its coverage from 13 Russian cities to 66.

Commenting on the 2012 results,Detsky Mir Group CEO Vladimir Chirakhovsaid that: "Last year was not just a period of rapid expansion for Detsky Mir, financial results also improved: new commercial policy, responsive marketing, and cost rationalization helped make the Group profitable by US GAAP, compared to losses a year earlier. Effective cost management brought down expenses as a share of revenue. Detsky Mir opened 47 stores, acquired the ELC chain, and enjoyed strong growth in online sales - all this reinforced Detsky Mir's position as a national leader - by the end of 2012 the Detsky Mir chain had 195 superstores in 97 cities of Russia and Kazakhstan, 20 ELC stores in Moscow and Surgut, the detmir.ru online store rolled out coverage to more than five times as many cities, and revenue more than tripled.

The Group is aiming to maintain the pace of growth this year, with at least 40 new Detsky Mir stores to be opened - both in major cities with existing stores and in towns of 50,000 or more residents. The development plans also include choosing a site for a new flagship store. We also plan to continue improvements in store formats: the latest equipment, new merchandizing standards, advanced retail technology, original visual solutions - all this will provide noticeable improvements in efficiency, and make stores more attractive and convenient to customers. Pricing and procurement policies will be more aggressive, there will be an emphasis on private label - we expect this to have a positive impact on new price positioning and the formation of a competitive product range."