OREANDA-NEWS. DIXY Group (RTS, MICEX: DIXY) - one of Russia’s leading retailers of foods and everyday products - announced unaudited IFRS results for the first quarter of 2013.

Key Highlights of the first quarter of 2013:

• In the first quarter of 2013, the Company opened 45 stores on net basis. As of March 31, 2013, the Company operated 1,544 stores in Central, North-West and Urals Federal Districts.

• The total Selling Space increased by 27% year-on-year to 529,127 sq.m. as of March 31, 2013.

• Consolidated Revenue increased by 21.9% (21.3% in USD) year-on-year to RUR 42.3 bln (USD 1.4 bln).

• Consolidated Gross Profit grew by 32.3% (31.6% in USD) year-on-year to RUR 12.7 bln (USD 417.2 mln).

• Consolidated Gross Margin improved by 240 bp year-on-year to 30.0%.

• Consolidated EBITDA increased by 23.9% (23.2% in USD) year-on-year to RUR 2.6 bln (USD 86.8 mln).

• Consolidated EBITDA Margin increased by 10 bp year-on-year to 6.2%, and jumped by 70 bp over the fourth quarter of 2012.

• Consolidated Operating Profit grew by 20.4% (19.8% in USD) year-on-year to RUR 1.5 bln (USD 48.5 mln).

• Consolidated Net Profit increased by 8.6% (USD 8.1%) year-on-year to RUR 386.0 mln (USD 12.7 mln).

Please, note that our stores operated 2 days less in the first quarter of 2013 compared to the same period of 2012:

• The stores were closed for New Year holiday on January 1, 2013, but were opened on January 1, 2012.

• The stores operated one day less in February 2013 compared to February 2012, as 2012 year was a leap year.

The two-day difference affected the Company’s revenue growth for the first three months of 2013 by 2.8% year-on- year.

In the first quarter of 2013, the Company opened 45 stores on net basis and increased selling space by 27% year-on- year.

The Company continued to work on the neighborhood chain effectiveness, streamlining the business processes on store level, along with the assortment optimization, pricing strategies implementation, in-store promotions and investments in the brand equity.

The Company made a significant progress in the development of its private label “fl” program launched in September

2012. In the first quarter of 2013, over 25 new SKUs were introduced, including such as frozen vegetables and berries, and, as of June 2013, the program included over 70 SKUs in various product categories. In March 2013, in-store communications of “fl” products were started in DIXY chain.

In-store promotions held in DIXY chain during the first quarter, including such as collecting points to get discounts for kitchenware, contributed at least 2% to DIXY stores sales growth year-on-year.

The undertaken marketing activities resulted in 5% like-for-like sales growth for the Group in the first quarter of 2013.

The Company maintained the high rate of centralization (deliveries through own distribution centers) for its neighborhood stores at the level of 84% in the first quarter of 2013.

1Q 2013 Key Financial Highlights, year-on-year

in RUR million

1Q 2013

1Q 2012

Change

Total Revenue

42,317

34,705

21.9%

Retail Revenue

41,928

34,363

22.0%

Gross Profit

12,691

9,595

32.3%

Gross Margin, %

30.0%

27.6%

240 bp

SGNA

11,216

8,369

34.0%

SGNA, % of Sales

26.5%

24.1%

240 bp

Operating Profit

1,476

1,226

20.4%

Operating Margin, %

3.5%

3.5%

0 bp

Net Profit

386

356

8.6%

Net Profit Margin, %

0.9%

1.0%

(10 bp)

EBITDA

2,640

2,131

23.9%

EBITDA Margin, %

6.2%

6.1%

10 bp

Revenues

Consolidated Revenue increased by 21.9% (21.3% in USD) year-on-year to RUR 42.3 bln (USD 1.4 bln) in the first quarter of 2013 driven mainly by organic store openings and helped by 5.0% like-for-like sales growth in the first quarter of 2013.

DIXY neighborhood stores revenue, which was the main driver of growth, increased by 53.1% (52.3% in USD) year- on-year to RUR 32.1 bln (USD 1.1 bln). Victoria supermarkets revenue grew by 21.4% (20.8% in USD) year-on-year to RUR 4.8 bln (USD 158.7 mln), while Megamart compact hypermarkets revenues increased by 15.4% (14.8% in USD) to RUR 2.9 bln (USD 94.0 mln) in the first quarter of 2013.

Gross Profit

Consolidate Gross Profit increased by 32.3% (31.6% in USD) year-on-year in the first quarter of 2013 amounting to RUR 12.7 bln (USD 417.2 mln).

Consolidated Gross Margin improved by 240 bp year-on-year to 30.0% of sales in the first quarter of 2013, driven by growing purchasing power and stronger product mix.

Cost of goods sold decreased by 270 bp year-on-year to 67.2% of sales in the first quarter of 2013. Shrinkage costs increased by 10 bp year-on-year to 1.8% of sales in the first quarter of 2013. Transportation costs as a percentage of sales increased by 10 bp year-on-year to 0.9% in the first quarter of 2013, mainly due to gasoline price inflation and a rapid growth of a logistic turnover.

Operating Expenses

Selling, General & Administrative Expenses increased by 34.0% (33.3% in USD) year-on-year to RUR 11.2 bln (USD 368.7 mln) in the first quarter of 2013. SGNA as a percentage of sales increased by 240 bp year-on-year to 26.5% in the first quarter of 2013. This increase was driven mainly by staff, operating lease, and D&A expenses.

Staff expenses increased by 37.4% (36.7% in USD) year-on-year to RUR 5.8 bln (USD 190.7 mln) in the first quarter of 2013. Staff expenses as a percentage of sales grew by 150 bp to 13.7% in the first quarter of 2013 led mainly by large number of stores opened in the end of 2012, and still immature throughout of the first quarter of 2013, as well as wages indexation in the latter part of 2012.

Operating lease expenses grew by 41.1% (40.3% in USD) year-on-year to RUR 2.3 bln (USD 75.3 mln), and, as a percentage of sales, increased by 70 bp year-on-year to 5.4% in the first quarter of 2013, mainly as a result of growing share of space rented, and the large number of store openings in the end of 2012.

Utilities, Repair and Maintenance expenses increased by 23.0% (22.3% in USD) year-on-year to RUR 927.0 mln (USD 30.5 mln), but, as a percentage of sales, stood flat year-on-year at 2.2% of sales in the first quarter of 2013.

Consolidated EBITDA increased by 23.9% (23.2% in USD) year-on-year to RUR 2.6 bln (USD 86.8 mln) in the first quarter of 2013.

Consolidated EBITDA Margin increased by 10 bp year-on-year and improved significantly by 70 bp quarter-over- quarter to 6.2% in the first quarter of 2013.

Operating and Net Profits

Depreciation and Amortization expenses increased by 28.6% (28.0% in USD) year-on-year to RUR 1.2 mln (USD 38.3 mln), and, as a percentage of sales, grew by 20 bp to 2.8% in the first quarter of 2013. The D&A expenses increase was mainly attributable to the depreciation of the equipment of the distribution center launched in the fourth quarter of 2012, as well as to the large number of store openings in the latter part of 2012.

Consolidated Operating Profit increased by 20.4% (19.8% in USD) year-on-year to RUR 1.5 bln (USD 48.5 mln) in the first quarter of 2013. Consolidated Operating Margin stood flat year-on-year at 3.5% in the first quarter of 2013 as a result of the above mentioned D&A expenses growth.

Finance costs grew year-on-year by 53.0% (51.7% in USD) to RUR 805.0 mln (USD 26.4 mln) in the first quarter of 2013, due to the increased debt level.

Income tax expense decreased year-on-year by 22.3% (22.9% in USD) to RUR 292.0 mln (USD 9.6 mln) in the first quarter of 2013.

Consolidated Net Profit increased by 8.6% (8.1% in USD) to RUR 386.0 mln (USD 12.7 mln) in the first quarter of 2013.

Cash Flows and Debt

Net Cash from Operating Activities increased by 1.1% (0.5% in USD) year-on-year to RUR 726.0 mln (USD 23.9 mln) in the first quarter of 2013.

As of March 31, 2013, Total Financial Debt to EBITDA ratio was 3.2, and Total Financial Debt amounted to RUR 28.8 bln (USD 927.0 mln), while Net Debt amounted to RUR 26.4 bln (USD 850.8 mln) as of March 31, 2013.