SSA.L Regulatory News (SSA)

Detsky Mir Announces IPO Pricing

Moscow, Russia - 8 February 2017 - Sistema PJSFC ("Sistema" or "the Corporation") (LSE: SSA; MOEX: AFKS), a Russian public diversified holding company, notes that its subsidiary, PJSC Detsky Mir ("the Company" and, together with its subsidiaries, "Detsky Mir") has announced the pricing of its initial public offering (the "Offering") of its ordinary shares (the "Shares") on Moscow Exchange.

Sistema President Mikhail Shamolin said: "We are pleased with the success of Detsky Mir's offering, and welcome the expanded family of shareholders to this uniquely attractive business. Over the last several years we have grown Detsky Mir into a major retailer, while consistently generating strong growth and returns on capital. Today, the Company begins a new chapter in its history with a highly successful IPO - the first in Russia in 2017 and the largest in EMEA year-to-date - that attracted a highly diversified book of domestic and international investors from Europe, the US and Asia. Sistema has maintained its controlling interest in Detsky Mir as we believe that significant further potential remains to be unlocked. The Company is well positioned to continue its growth by capitalising on its market leadership, robust infrastructure, iconic brand and high-growth e-commerce segment under one of the best management teams in the Russian market."

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Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, timber processing, agriculture, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2015 reached RUB 708.6 billion; its total assets equalled RUB 1.3 trillion as of 31 December 2015. Sistema's global depositary receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.ru.

Detsky Mir is the largest specialised children's goods retailer in Russia, with a diversified product portfolio comprising toys, products for newborns, fashion (apparel and footwear), large items, and other products. It is the market leader both in terms of size of store network and in terms of revenue in the highly fragmented market for children's goods in Russia. According to Ipsos Comcon, in 2015, Detsky Mir had an estimated share of 32% (24% in 2014) of the specialised children's goods retail market in Russia and 13% (10% in 2014) of the total market for children's goods in Russia (including hyper- and supermarkets). As at 31 December 2016, Detsky Mir operated a network of 525 stores, comprising 468 stores in Russia and 12 stores in Kazakhstan operating under the "Detsky mir" brand and 45 ELC stores in Russia.

Copies of this announcement are not being made and may not be distributed or sent, directly or indirectly, into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia or Japan

This announcement is not and does not form part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein are not registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. PJSC Detsky mir does not intend to register any portion of the offering of any securities referred to herein in the United States or to conduct a public offering of the securities in the United States.

This communication does not constitute an offer of the securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the securities. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom; (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended from time to time (the "Order"); (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; (iv) certified high net worth individuals and certified and self-certified sophisticated investors as described in Articles 48, 50 and 50A, respectively of the Order; and (v) persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

This communication is distributed in any member state of the European Economic Area which applies Directive 2003/71/EC (this Directive together with any implementing measures in any member state, the Prospectus Directive) only to those persons who are qualified investors for the purposes of the Prospectus Directive in such member state, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person or qualified investor may act or rely on this document or any of its contents.