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  • 23 march 2018
    M.Video Increases Net Profit by 25% to 7 Billion RUB in FY2017
  • 22 March 2018, Moscow. PJSC M.Video (M.Video, the Company, or the Group), Russia's largest consumer electronics retailer by revenue (MOEX: MVID), announces its audited consolidated financial results for 2017, prepared in accordance with the International Financial Reporting Standards (IFRS).

    M.Video’s net revenue increased by 8.2% year-on-year to 198 billion Russian rubles (RUB) in 2017. The increase in sales was driven by higher like-for-like stores sales, as well as rapid growth in online purchases, which accounted for 15.7% of total sales (compared to 12.0% in 2016).

    M.Video maintained its leadership position on the Russian consumer electronics market, reaching a market share of 17.1%. During the reporting period the company was able to increase its market share on the online sales market to a record 14.1% (up from 11.3% in 2016).

    M.Video’s gross profit amounted to 46.5 billion RUB in 2017, an increase of 8.4% year-on-year. At the same time, gross profit margin grew by 0.1 p.p to 23.5%.

    The Company’s EBITDA grew considerably, increasing by 14.0% year-on-year to 11.8 billion RUB.

    M.Video’s EBITDA margin reached 6.0%, a record high for the last three years.

    Net profit grew by 25.4% in 2017 to 7 billion RUB, while net profit margin amounted to 3.5% in 2017 compared to 3.0% the previous year.

    M.Video President Alexander Tynkovan commented:

    "Despite a challenging start to the year amid a decline in consumer activity in the first quarter of 2017, M.Video was able not only to increase sales for the full year, but also to show considerable improvement across all financial performance metrics, which speaks to the strength of our balanced effective business model and high level of corporate governance. M.Video has successfully managed to implement OMNI-channel retail, offered customers a seamless online and offline experience, and this is reflected in the Company's results for the period, namely a stronger overall market position, increased like-for-like sales and rapid growth in the online segment. By enhancing its IT-systems and introducing innovations in all areas, from procurement to HR, M.Video is undergoing a transformation into a digital business, which, even on a saturated market, allows the company to better anticipate customer expectations and deliver growth of equity investments".

    M.Video Chief Executive Officer Enrique Fernandez added:

    “M.Video’s market share in the Russian online consumer electronics segment has nearly caught up with our overall market share position, reaching 16.6% in the fourth quarter of 2017. We are successfully competing with internet players using our retail network as a competitive advantage. In the online segment, M.Video has managed to outpace the market in all categories thanks to our efficient OMNI-channel strategy.

    “Our technical solutions and the new ecosystem approach to sales that we have implemented over the past two years has enabled M.Video to actively build out its presence in the digital appliances segment, attracting a new and younger clientele, while at the same time preserving M’Video’s profitability. The M.Credit consumer lending program and Real Time Dealing project for stores we launched only a year ago are already having a positive effect on our revenue, and I am confident that they will become one of the key competitive advantages in the fight for new customers”.

    M.Video’s Key consolidated financial results for 2017:

    Millions of RUB

    2017

    2016 г.

    Change, %

    Net revenue

    198,197

    183,219

    8.2%

    Gross profit

    46,527

    42,935

    8.4%

    Gross profit margin, %

    23.5

    23.4

    0.1

    Sales, general and administrative expenses

    (40,754)

    (37,351)

    9.1%

    Other operating income, net of other operating expenses

    2,407

    1,100

    118.8%

    Operating profit

    8,180

    6,684

    22.4%

    Net profit

    6,954

    5,546

    25.4%

    Net profit margin, %

    3.5

    3.0

    0.5

    EBITDA

    11,794

    10,344

    14.0%

    EBITDA margin, %

    6.0

    5.6

    0.4