ACRA affirms Evropeyskaya Elektrotekhnica's credit rating at the BBB-(RU) investment level, outlook stable

ACRA affirms Evropeyskaya Elektrotekhnica's credit rating at the BBB-(RU) investment level, outlook stable

January 28, 2020. Moscow — The Analytical Credit Rating Agency (ACRA) affirmed the credit rating of PJSC Evropeyskaya Elektrotekhnica (hereinafter, the "Company" or "Group") at the BBB-(RU) investment level, outlook stable. The credit rating was assigned according to the national scale for the Russian Federation.

It is due to the Company's good profitability and liquidity, as well as high debt coverage and low leverage.

Sergey Dubenok, Head of the Board of Directors of PJSC Evropeyskaya Elektrotekhnica, commented on the event: "The affirmation of our credit rating at the investment level by ACRA is a positive outcome of the turbulent last year.

The Company's team has managed to maintain business activities despite the challenging market environment. Our federal network of engineering centers continued its intensive work on concluding new contracts. Our specialists have succeeded in fulfilling the obligations to deliver engineering and technological products manufactured by the Company in-house along with innovative solutions developed by vendor partners.  

If we look at our performance reflected in the consolidated financial statements for the nine months of 2020 (IFRS), we can see that these efforts yielded positive results:

• net profit margin amounted to 9.2% (–0.1 p. p. year-over-year);

• the pandemic and related quarantine measures (for instance, shutdowns or outflow of foreign labor from industrial sites) did not interfere with the promptness of payments: our systemic cooperation with customers has enabled the Company to reduce accounts receivable to RUB 651 million as of the end of Q3 2020, which is 43.3% down compared to early 2020. The provision for doubtful debts saw a decrease of 88.6%, to RUB 4.6 million;

• no additional funds are needed for the Company to continue to grow; the net debt/12M EBITDA indicator stood at –0.23 (0.47 as of the end of 2019), which means that the amount of cash funds and their equivalents on the Company's balance sheet exceeded the total amount of borrowings as of the reporting date;

• the Company successfully cooperated with banks to provide availability of external sources of liquidity (credit lines) on competitive terms: the volume of credit line limits was extended to RUB 1 billion;

• the Company's return on equity (ROE) amounted to 31.2% (40.8% year-over-year).

Regular expert assessment by ACRA analysts is of a great importance for us. Public review of our operating and financial performance presented in press releases upon the results of rating activities contributes to strengthening the confidence of sectoral, investment and bank communities in Evropeyskaya Elektrotekhnica Group of Companies, as well as allows for a better understanding of the Company's business prospects."

The full text of ACRA's press release can be accessed at the following link.

About Evropeyskaya Elektrotekhnica Group of Companies

• Evropeyskaya Elektrotekhnica Group of Companies (MOEX: EELT) offers comprehensive solutions in the field of engineering and technological systems for industrial, construction and infrastructural purposes: low and medium voltage distribution equipment, low current systems, lighting systems, industrial electric heating systems and equipment for the Oil&Gas and petrochemical industries.

• As a Russian joint-stock company with high corporate governance standards and financial sustainability, the Company's Mission is to improve people's quality of life with its entrepreneurial vigour and engineering competencies.

• The Company was founded in 2004 and unites a distribution center, engineering departments, an electrical laboratory and specialized production facilities. The company is one of the largest electrical equipment distributors in the Russian Federation and an industrial partner of leading companies on the international engineering market.

• The Company's logistics capabilities include delivery (including non-standard and oversize load) to customers throughout Russia, including hard-to-reach Northern areas, as well as to Central Asia, North Africa and the Middle East.

• The Company has its own production of the following equipment:

• Complete transformer substations;

• Medium voltage units;

• Low voltage panels of up to 6,300A (including metro solutions);

• Electric lighting systems;

• Industrial electric heating systems;

• Cabling and wiring products.

• Areas of application of the Company's competences:

• Oil&Gas industry;

• Electric power sector;

• Peaceful atom,

• Steel and mining industry;

• Engineering;

• Transport infrastructure, water supply and sanitation.

• Evropeyskaya Elektrotekhnica's customers include major Russian companies: Rosneft, Gazprom, NOVATEK, LUKOIL, Sibur and Nizhnekamskneftekhim. Supplies were successfully implemented for the following projects: Power of Siberia, Yamal LNG, Smolensk NPP, Data Center of Sberbank of Russia, the Domodedovo, Sheremetyevo, and Pulkovo Airports, etc.

• New areas of Company activity starting from 2018 include development and production of the following:

• Modular equipment for the Oil&Gas and petrochemical industries (Company subsidiary ROG-Engineering, Ufa, Republic of Bashkortostan, Russian Federation);

• Industrial specialized solutions for metro substations (currently being consolidated into the Group's structure: Metrotonnel, Moscow, Russian Federation);

• Industrial electric heating systems.

• Key financial indicators of PJSC Evropeyskaya Elektrotekhnica (IFRS):

The personnel headcount is around 360 people. Since September 2017, common shares of PJSC Evropeyskaya Elektrotekhnica are traded on the Moscow Exchange with trading code EELT.

BBB- (RU), outlook stable - the credit rating of PJSC Evropeyskaya Elektrotekhnika is at investment level, confirmed by ACRA on January 28, 2021.

Contacts:

PJSC Evropeyskaya Elektrotekhnica

Tel.: +7 (800) 600-71-18

Mailing address: 1 Lyotchika Babushkina Street, Building 3, Moscow, 129344

For more information, please contact:

Stanislav Martyushev

Director for Corporate Communications and Investor Relations

PJSC Evropeyskaya Elektrotekhnica

Tel. +7 (495) 660-71-18 ext. 164

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