SFI : M.Video-Eldorado Group plans bond placement totaling five billion rubles

M.Video-Eldorado Group, Russia's leading company in e-commerce and retail trade of electronics and home appliances (Moscow Exchange: MVID), plans to begin in the second half of April the placement of bonds series 001Р-04 with a maturity of three years (two years for puttable bonds) totaling not less than five billion rubles.

The organizers of the issue are BCS CIB, Gazprombank, Rosselkhozbank, Investbank Sinara, and IFC Solid. The issuer is MV Finans LLC, a 100% subsidiary of M.Video PJSC. The coupon period of the bonds is 91 days.

The issue is planned to be placed under the company's bond program series 001Р in the amount up to 50 billion rubles, registered by the Moscow Stock Exchange at the end of March 2021. Under the ten-year program, bonds can be placed for up to five years. M.Video-Eldorado Group placed three bond issues during this period and paid about 2.5 billion rubles in coupons to bondholders.

M.Video-Eldorado Group CEO Sergey Li:

"Thanks to its expertise, years of work, a high level of digitalization, and readiness for rapid change, M.Video-Eldorado overcame the challenges of 2022 and successfully adapted to the new economic conditions. The company launched its own import operations from scratch within just a few weeks, providing its customers with products by both familiar brands and new manufacturers. On top of that, by improving key business processes and new approaches to marketing, we could show an increase in operating efficiency and a reduction in operating and investment costs of 19 billion rubles compared to 2021. As a result, the year 2022 recorded strong financial performance by M.Video-Eldorado - adjusted EBITDA margin was just under 4%, while the company's debt, including net debt and trade working capital, decreased by more than 35% compared to 2021 and amounted to less than 65 billion rubles.

In the first months of 2023, the market of home appliances and electronics in Russia displayed a gradual recovery in consumer activity. In February and March, during the holiday boom, we were able to provide our customers with a wide range of electronics at attractive prices; the share of imports during this period peaked at 37% of total sales. In April, the sales behavior returned to a positive trend compared to last year.

It is important to note that unlike many marketplaces working according to the "showcase" scheme, the main range presented on our online platform is physically already in our warehouses and stores located throughout Russia, and can be delivered to our customers in the shortest possible time. In Q1 2023, the company also resumed expansion and launched a new format of compact stores with a payback period cut in half.

Besides, we continue to actively develop our own marketplace, offering our customers the widest possible range of products. Our partners are attracted by the targeted M.Video and Eldorado customer traffic and its high conversion rate into purchases. Our marketplace sales in Q1 2023 compared to Q1 2022 more than tripled. We continued to focus on further improving the operational efficiency of our business, with an EBITDA margin for Q1 2023 expected to grow compared to 2022 and amount to at least 4%.

Expert work with the product range, growth of operating efficiency through the use of technological solutions, updating the marketing strategy and retail formats, as well as the positive dynamics of the marketplace model allow us to talk about strengthening the company's position in the market. The funds raised in the bond placement will be used for more business development, and we can offer bondholders both high yield and reliability of their investments."