«M-video-eldorado» (MCX: MVID) — one of the leading players in the Russian retail market of household appliances and electronics.
21 In October, the company published key operating results for 9 months of 2021. Overall business sales increased by 15% in monetary terms against the background of growth in online sales and the average purchase receipt, and the size of the retail network "M-video-eldorado" reached a record 1178 stores.
I propose to assess the dynamics of the company's operational indicators, to better understand, how the business develops.
Disclaimer: if we write, that something has grown by X%, then by default we mean a comparison with the report data for the same period last year, unless otherwise stated.
Key operating indicators
Let me remind you, that in 2019, the integration of the M-Video and Eldorado retail chains on a single legal and information technology platform was completed, both brands were retained..
Shops and squares. Total number of stores per 30 September 2021 increased by 104 stores to 1178 stores. Retail network "Eldorado" grew by 83 shop — up to 615, and the M-Video network on 21 shop, to 553. In this way, trade network "Eldorado" for the first time this year overtook the network "M-video" in the number of stores.
Despite the fact that both brands specialize in sales of household appliances and electronics, "Eldorado" suggests a more budgetary format, and the stores themselves are noticeably inferior in average area to M-video stores.. Therefore, according to the total retail area, the retail network "M-video" on 20% more, than "Eldorado": 836 against 698 thousand square meters. In general, the retail area increased by 4% — up to 1,533 million square meters.
It can be stated, that the company this year gives priority to stores of a more budget and compact format, therefore, it demonstrates a relatively low rate of expansion of retail space and a decrease in the average area of one store.
Dynamics of the trading network at the end of the period
| "M Video" | Number of stores | Retail space, thousand m2 |
|---|---|---|
| 2017 | 424 | 693 |
| 2018 | 480 | 759 |
| 2019 | 532 | 794 |
| 2020 | 542 | 810 |
| 9м2021 | 553 | 836 |
Dynamics of the retail network "M-video" at the end of the period
| Eldorado | Number of stores | Retail space, thousand m2 |
|---|---|---|
| 2017 | 415 | 592 |
| 2018 | 461 | 633 |
| 2019 | 506 | 661 |
| 2020 | 532 | 665 |
| 9м2021 | 615 | 698 |
Dynamics of the trade network "Eldorado" at the end of the period
Sales. Total sales of M-video-eldorado for 9 months of the current year increased by 15% — to a record 393.03 billion rubles — against the background of growth in online sales and prices for household appliances and electronics. But the average purchase receipt increased only by 7%: from 9395 to 10 077 R.
Last year, the holding announced the transition to a hybrid model One Retail, which unites different business segments on a common technological basis: physical stores, websites and mobile applications. The idea is that, to erase the boundaries between online- and offline format for the buyer.
The share of sales of "M-video-eldorado" through mobile applications or web platform is growing every year. Based on the results of 9 months of online sales 68,6% of the total trade turnover.
But it is worth considering, that the company also includes sales as online sales, registered through the seller's app, even if the customer made the actual purchase in a retail store. Total online sales increased by 39% — up to 269.6 billion rubles, — and of these, 144.48 billion accounted for sales through mobile applications of sellers. Therefore, talking about, that online has won retail, so far premature. About 66,6% all sales accounted for stores, and only about 33,4% – for delivery or pickup.
Total sales of "M-video-eldorado" including VAT, billion rubles
| "M Video" | Eldorado | Total | |
|---|---|---|---|
| 9m2017 | 156,77 | 85,59 | 242,36 |
| 9m2018 | 186,96 | 94,18 | 281,14 |
| 9m2019 | 200,06 | 98,94 | 299 |
| 9м2020 | 225,63 | 114,81 | 340,44 |
| 9м2021 | 263,1 | 129,93 | 393,03 |
Dynamics of growth in the share of online sales
| 2017 | 16,4% |
| 2018 | 18,3% |
| 2019 | 32,9% |
| 2020 | 59,5% |
| 9м2021 | 68,6% |
16,4%
Online sales of "M-video-eldorado" including VAT, billion rubles
| 9m2017 | 38,09 |
| 9m2018 | 51,11 |
| 9m2019 | 91,43 |
| 9м2020 | 194,72 |
| 9м2021 | 269,6 |
38,09
Sales structure for 9 months of 2021
| Shops | 66,6% |
| Pickup | 25,7% |
| Home delivery | 7,7% |
66,6%
Clientele. The number of active identified customers of the company increased by 7% — up to 19.6 million, of which 11.6 million were customers of the One Retail platform. The number of installations of custom applications has grown in more than 4 times — up to 21 million, at the same time, the average monthly number of active users of mobile applications increased in 3,2 times — up to 3.5 million visits.
But the average monthly number of visits to M-video-eldorado websites decreased by 16% — from 73.3 to 61.9 million, – which is explained as the transition to mobile platforms, and last year's high base, when customers were mostly purchased online, as access to retail malls has been restricted due to coronavirus control measures.
What's the bottom line?
In general, the growth of the main operating indicators to record levels at the end of the first 9 months of 2021. Sales revenue reached an all-time high, although this is partly due to rising prices for household appliances and electronics., which in theory will have a negative impact on the cost of sales and profitability of the business.
The online segment shows particularly strong growth, although this is partly due to the, what management takes into account as online sales purchases, made by the customer inside the store, but through the seller's application, not through the cashier. There's a bit of guile in that., as if a business is trying to portray a faster transition towards online sales., than it actually happens. Alarming is that, that for the first time in a long time, the company reflected in the report a drop in visits to the site, which remains the main online channel for customer purchases. If the mobile applications "M-video-eldorado" monthly visited only 3.5 million users, then sites — 61.9 million visitors.
Despite the growth of the online segment and the digital transformation of the company, retail is still the main source of business income. At the same time, the growth of the network is carried out at the expense of small format stores., which leads to a drop in the average retail area of one store and may indicate a high saturation of the retail market for electronic and household appliances in Russia, – it is becoming increasingly difficult for business to find profitable places to open their outlets. Besides, it is worth noting the introduction of new restrictions in many cities of Russia, including visits to large shopping centers, which may adversely affect the operational and financial performance of M-video-eldorado in 4 quarter of the current year.
