Detsky Mir Expansion Strategy

5 Focus on execution excellence to achieve superior operating margins detsky mir Improvement of 160bps in adjusted EBITDA (1) margin since 2014 driven by: Reduction of average personnel per store from 24 in 2014 to 16 in Q1 2021 enabled by greater business processes automation and adoption of advanced software, resulting in reduced time and effort required per transaction Decline in rental costs as % of sales driven by improving sales density and negotiation of favourable rental terms and received discounts from landlords, supported by our status of "anchor" traffic generator for shopping malls Reduction in adjusted SG&A as % of revenue by over 930 bps over 2014-2020 (-100bps YoY in Q1 2021) Adjusted SG&A expenses (2) as % of sales and personnel per store (3) Adjusted EBITDA(1) 24 22 11,9% 11,4% 11,4% 11,0% 20 10.2% 10,3% 18 9,8% 17 17 16 16 16 8,7% 28.2% 3,8% 25.9% 3,0% 1,7% 23.7% 1,8% 3,2% 22.8% 21.8% 22.0% 20.8% 21.0% 3,3% 1,3% 3,2% 18.9% 3,5% 1,6% 3,2% 3,5% 9,9% 1,3% 9,5% 1,1% 3,2% 0,8% 0,6% 0,8% 8,9% 8,1% 8,0% 8,0% 8,6% 8,4% 7,4% 16 964 +25% CAGR 14-20 14 725 7,3% 12 665 10 663 8 203 6,185 4,463 12,8% 11,7% 3 103 2 260 10,3% 9,8% 9,2% 8,6% 9,1% 7,5% 8,5% 2014 2015 2016 2017 2018 2019 2020 Q1'20 Q1'21 Rent & utility Payroll Advertising & marketing Other Personnel per store Source: Company data (4) 2014 2015 2016 2017 2018 2019 Adj EBITDA (RUB m) 2020 Adj EBITDA margin Q1'20 Q1'21 Note: The Group's consolidated financial statements for 2013 under US GAAP and for 2014-2020 under IFRS and as restated according to IAS 17 for 2018-21. For the line items and the periods presented, there was no difference between the figures under US GAAP and IFRS (1)Adjusted EBITDA is calculated as profit for the year before income tax, FX gain/loss, gain on acquisition of controlling interest in associate, net finance expense, D&A, adjusted for the one-off effect relating to disposal of the Yakimanka building in 2014, as well as share-based compensation and cash bonuses under the LTI program; (2)Adjusted SG&A expenses are calculated excluding depreciation and amortisation and additional bonus payments under the LTI program; (3)Excluding personnel in headquarters; (4) Less one-off RUB 1,164m net gain from disposal of Yakimanka store 23

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