The EBITDA of Euroset, Russia’s leading mobile retailer, reached 8.37 billion rubles (approx. $279 million) in 2010, up 88% from 2009. During the same period, the company’s net profit grew almost fivefold (+385%), to 5.58 billion rubles, while its revenues increased by just 12.2%, reaching 61.91 billion rubles (approx. $2 billion).
By way of explaining these results, Euroset president Alexander Malis mentioned the decrease of certain marketing costs – especially product promotion – and the successful introduction of an automated logistics controlling system. Revenue growth was due, in particular, to the introduction of popular handsets in Euroset’s outlets on an exclusive basis as well as to the commercial success of high-margin models. In addition, the company reduced its financial costs after restructuring its debt.
Vitaly Kupeev, an analyst of Bank Moskvy, told Vedomosti, a Russian business daily, that Euroset’s 13.5% EBITDA margin is “enormous” compared to that of other retailers. Even in the most profitable retail segments, this indicator reaches only 8.5% on average. Kupeev expects the EBITDA of M.Video, another Russian retailer comparable to Euroset, to reach just 4.8–4.9% of its revenues.
Euroset confirmed with Reuters that it does consider an IPO to be among “a variety of strategic possibilities.” Last October, the company’s CFO, Dmitry Milstein, told Reuters that Euroset would go public in 2011, either in spring or autumn.
Valuation estimations for the company vary from $2.6 billion to $4 billion, reports Vedomosti.
Euroset is owned by both ANN investment company, which belongs to prominent Russian businessman Alexander Mamut, and VimpelCom, a leading Russian mobile operator.
