M.video reports 12% retail sales growth in 1H 2009

Company “M.video” (RTS, MICEX: MVID), one of the Russia s largest consumer electronics retailers, announced today its unaudited retail sales, like-for-like sales (LfL) and expansion results for the 1^st half and 2^nd quarter of 2009.

1H 2009 Highlights:

Retail sales increased 12%

Like-for-like sales fell by 5.9%

Debt reduced by 61% vs. FY 2008

Total space of 13,500 sq.m added

In 1H 2009 M.video retail sales reached 38,442 million Russian rubles (RUB), including VAT, demonstrating 12% growth as compared to 1H 2008. The Company s LfL sales in 1H 2009 decreased by 5.9% year-on-year in RUB terms.

In 2Q 2009 M.video net retail sales fell by 7% in RUB terms while LfL sales reflected downward market trends and demonstrated negative year-on-year performance of -21% in RUB terms as compared to 2Q 2008.

M.video opened 7 new stores in 1H 2009. The Company also closed 2 stores – one in Moscow and one in Naberezhnye Chelny (Republic of Tatarstan), due to low efficiency of those projects. The total number of the Company s outlets reached 162 stores as of June 30^th, 2009 versus 157 stores opened by the year end 2008. The total space of M.video stores amounted to 430,000 sq.m as of June 30^th, 2009 demonstrating a 3% increase as compared to FY2008 results.

The group s net debt position1 as of June 30^th , 2009 amounted to RUB 2.5 billion (total debt of RUB 2.9 billion and cash and cash equivalents of RUB 421 million). During the 1H 2009 M.video substantially decreased its overall debt position by 61% as compared to year end 2008.

Alexander Tynkovan, President and CEO of OJSC “Company “M.video”, said: "2009 has proven to be a challenging period for all retailers as the global economic recession was also felt in Russia. While many market player have had to contend with financial concerns and have been closing stores we continue to open new stores and use our financial strength to capture market share”.

He noted: “When we look at the second quarter results we should remember that we are comparing to a boom period and a sales period that included higher than normal sales due to the Euro 2008 where the Russian team made the semi finals”.

Alexander Tynkovan also stated: “Our strong balance sheet and low leverage send a very good signal to our suppliers and business partners. We will continue with our winning strategy and strengthen our market position while remaining financially strong."

 

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Summary of the 1^st half and 2^nd quarter 2009 performance:

Retail Sales Performance*
	1H 2009	1H 2008	% change y-o-y		Q2 2009		Q2 2008		% change y-o-y
RUB million, with VAT	38,442	34,463	12%		15,308		16,411		-7%
RUB million, without VAT	32,578	29,206	12%		12,973		13,908		-7%
LfL Sales Performance**
	1H 2009 LfL Dynamics, %				Q2 2009 LfL Dynamics, %
Russian rubles	-5.9%				-20.6%
Expansion
	As of 30 June 2009			As of 31 December 2008		New 1H 2009		% change
Stores	162			157		5***		3%
Total space, sq. m	430,000			416,500		13,500***		3%

 

* - M.video group has a functional currency of Russian rubles.

** - LfL data is based upon a comparison of stores open at January 1, 2008 and not closed for more than two weeks or permanently, or expanded or downsized by >20% of total space.

*** - net of closing

 

OJSC “Company “M.video” is one of the largest Russian consumer electronic retail chains. The Company started its operations in 1993. In November 2007 OJSC “Company “M.video” became the first publicly traded company in the domestic consumer electronic retail sector. The Company s shares are traded on Russian RTS and MICEX (ticker: MVID).

In 1H 2009 the Company s retail sales reached 38,4 billion Russian roubles (with VAT) demonstrating 12% growth versus the 1H 2008. M.video runs 162 brand name stores in 67 Russian cities as well as 2 on-line internet stores (as of June 30, 2009). The total space of “M.video” outlets accounts to 430 000 sq. m.

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