Detsky Mir Expansion Strategy

Strong cash flow conversion detsky mir Comments Improvement in operating cash flow driven by high EBITDA growth and decrease in NWC investments ■ Low finance expense on the back of decrease in debt and interest rate Disciplined capex focused on store openings and selective investments in IT and infrastructure; limited maintenance capex requirements Cash flow evolution (RUB m) Q1'20 Q1'21 Q1'20 IAS 17 IAS 17 IFRS 16 Q1'21 IFRS 16 I Adjusted EBITDA 2,260 3,103 4,700 5,664 I Changes in NWC (7,680) (7,368) (7,616) (7,280) Cash income taxes paid (702) (928) (702) (928) Capex grew by 2.8x YoY due to an advance payment for the construction of the third federal distribution center, located in the Ural region (RUB 688 m) Net finance expense paid (179) (121) (821) (652) Other operating cash flow (79) 371 I (81) 357 Strong return on investment capital Operating cash flow (6,380) (4,944) (4,520) (2,839) I 76% CAPEX (338) (950) (338) (950) I I 63% 59% DC construction (28) (668) (28) (668) 49% I Store openings, IT & maintenance (310) (262) (310) (262) 85% 69% 76% 86% Free cash flow (6,718) (5,894) (4,858) (3,789) I Investment cash flow (326) (945) I (326) (945) Financial cash flow 15,754 5,273 13,894 3,168 Q1'20 (IAS 17) Q1'21 (IAS 17) (1) ROIC FY'19 (IAS 17) FY'20 (IAS 17) Change in cash 9,048 (616) 9,048 (616) -(Adj. EBITDA - Capex) / Adj. EBITDA Effect of changes in foreign exchange 19 (196) 19 (196) rates | (1) Calculated as operating profit for the past 12-months period, divided by average capital invested (simple average of the balance of capital invested at the end of respective periods). Capital invested is calculated as net debt plus total equity/(equity deficit). Source: Company data. 34

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