M.Video-Eldorado group amounted to 30%

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If in 2022 the share of online sales at M.Video-Eldorado was 66.9% of GMV, then by the end of 2023 this figure increased to 71.4%. Despite this, the group is not giving up on retail stores. Sergey Li said that now their number is only a few dozen less than at the beginning of 2022. By December 31, 2023, the company's retail network consisted of 1,242 stores, and during 2024, according to Sergey Li, M.Video-Eldorado will open a three-digit number of new retail outlets, mainly compact format and in those cities where the company has not yet had a physical presence (in particular, in the Far East).

"We are a staunch opponent bahamas whatsapp number database of the theory that online will conquer everyone," said Anna Garmanova, financial director of M.Video-Eldorado. "Ozon and Wildberries are opening order pickup points (OPP), and we are opening compact stores that also work as POPs for our marketplace. That is why our profitability per square meter of space is higher." According to Anna Garmanova, opening a compact format store costs M.Video-Eldorado 11-13 billion rubles, while previously the group invested up to 40 billion rubles in each new outlet.

According to the results of 2023, the revenue of the M.Video-Eldorado Group reached RUB 434.4 billion, which is 7.9% more than the 2022 figure (RUB 402.5 billion), and EBITDA increased by 49% to RUB 21.5 billion. In 2023, the group reached an EBITDA margin of 4.95% (versus 3.6% a year earlier): Sergey Lee called this level healthy, noting that even in the world not every retailer manages to achieve a 5% EBITDA margin. M.Video-Eldorado's net loss in 2023 decreased by 31% to RUB 5.2 billion (according to IFRS 17). At the same time, in the fourth quarter of 2023, the group received a net profit of RUB 1.6 billion. (this is RUB 2.5 billion more than for the same period in 2022). The net debt of the M.Video-Eldorado Group as of December 31, 2023 amounted to RUB 67.8 billion, while the net debt / EBITDA ratio decreased from 4.5x in 2022 to 3.2x.

Kirill Panarin, Head of Consumer and TMT Sector Analytics at Renaissance Broker LLC, sees a significant improvement in the company's financial performance, but his optimism is tempered by volatility and poor predictability of working capital dynamics: "Overall, we have seen a significant improvement in M.Video-Eldorado's financial performance over the past year. Sales growth has been strong over the past few quarters, albeit from a low base in 2022. More importantly, M.Video has done a good job of restoring profitability from the low levels of 2021-2022. EBITDA margin for the 2023 financial year has recovered to 5%, which is the maximum of the forecast range. As a result, M.Video's net debt to EBITDA ratio has declined significantly, and management expects a further decline in 2024. However, high volatility and poor predictability of working capital dynamics remain a challenge for the investment M.Video's portfolio, and given its high impact on cash generation, we remain neutral on its shares in the long term."

Elena Kozhukhova, an analyst at VELES Capital, gives a positive forecast: "M.Video-Eldorado announced its intention to present an updated strategy in 2024 and return to the discussion of dividends - this is a medium-term positive signal. The group's shares were corrected after the announcement of the financial results - after a jump of more than 6% up the day before. These shares remain in a bullish trend and continue to move towards our previously outlined technical targets of 217 rubles and 232.5 rubles (maximum 2023), with the prospect of an increase to the region of 260 rubles and higher, including on expectations of a return to dividends if the company's financial position continues to improve in 2024."

FG Finam analyst Ignat Ivanov believes that the achieved indicators are strong and notes that the company has reached the pre-crisis level: "M.Video Group has published strong financial results. The management managed to significantly reduce the share of administrative expenses to revenue - to the lowest level for the entire period. Gross profitability (21%) has reached the 2021 level, EBITDA margin fell short of the pre-crisis results, but returned to the company's target range. The reduction in losses is a sign of a quick return to breakeven. Among the negative aspects of the company's financial indicators is the high debt burden."