PJSC Evropeyskaya Elektrotekhnica's robust performance in 2020 (IFRS): revenue and profit surge by 7.9% and 22.8%, respectively

PJSC Evropeyskaya Elektrotekhnica's robust performance in 2020 (IFRS): revenue and profit surge by 7.9% and 22.8%, respectively

April 20, 2021. Moscow — PJSC Evropeyskaya Elektrotekhnica, a leading company in the Russian engineering market, has published its consolidated financial results as per IFRS for 2020.

Our financial statements are available on the corporate website, section For Investors, subsection Financial Statements: http://euroetpao.ru/investors/.

Consolidated revenue saw an increase in the reporting period of RUB 3,526.7 million, 7.9% up year-over-year. Profit grew by 22.8% and reached RUB 367.1 million. Income for the period totaled RUB 531.1 million. EBITDA climbed to RUB 503.1 million (+16.6% Y-o-Y), and its profitability was 14.3% (compared to 13.2% a year earlier).

Statement from Management

Sergey Dubenok, Head of PJSC Evropeyskaya Elektrotekhnica Board of Directors, commented on the published financial results:

“The 2020 fiscal year brought some extraordinary events, not anticipated by any forecasting methods. Large-scale anti-coronavirus measures have had a serious impact on the market and the Company's relations with its suppliers and customers.

However, despite the objective difficulties, the Company managed to significantly improve the financial performance and the level of profitability, which was accompanied by a reduction in the traditionally insignificant debt load.

During the lockdown, the Company has not suspended its operations in any of the regions of presence, due to the recognition of our production as systemically significant. This ensured the prompt receipt of new orders, assembly, production, and delivery of our products to customers.

The Company shifted a number of important projects to a later date, and we will continue their implementation as soon as the quarantine restrictions are lifted in the respective regions. This will drive revenue generation in 2021 and beyond.

Speaking about the Company's financial results, I would like to draw your attention to some key facts:

• we continued to expand our Process Systems activities, and their share in the consolidated results for the reporting year reached 36% of gross revenues and 38% of net revenues (23% and 29% a year earlier, respectively); it is this segment of business that will provide the Company with revenue growth and business margins in the years ahead;
• we managed to reduce trade receivables by 46.7% to RUB 569.5 million due to the hard work on raising funds from customers of our products and services. The amount of reserve for doubtful trade receivables was down by 79.3% to RUB 8.4 million;
• the software implemented in the Company for automation of sales and related business processes allowed for reducing the cost of renting office space. It was also possible to optimize Company staff by attracting qualified personnel in regions with lower pay rates;
• access to external sources of liquidity has been expanded: systemic work with credit institutions has allowed for increasing the limits of bank credit facilities available to the Company from RUB 0.3 to 1.0 billion, with a simultaneous drop in interest rates by about a third (up to a range of 6.4–7.0%);
• the Company acts responsibly when it comes to the use of loans. Net debt at the end of 2020 stood at RUB 137.4 million, which is 32.8% lower year-over-year. Net Debt/EBITDA declined at the end of the reporting year to 0.27 (0.47 the year prior), thus the Company remains in the comfort zone;
• in November 2020, the Company decided to pay dividends in the amount of RUB 0.3185 per share. The profit of prior periods in the amount of RUB 194,285 million was invested in achieving these purposes. This dividend payout became the most substantial in the Company's history;
• on December 31, 2020, the Company's share repurchase program (buyback) was completed: 9,510,151 shares were repurchased for a total amount not exceeding RUB 100 million. It was aimed at: ◘ optimizing the structure of invested capital and ◘ improving the Company's investment attractiveness.
  

In 2020, several significant events took place:

• on August 24, 2020, the Company's new production site was commissioned in the SEZ Technopolis Moscow for the development and production of high-tech low-voltage complex devices, so-called “smart” electric boards;

• on August 25, 2020, acquisition and ownership of assets of the ROG-Engineering machine building plant in Belebey (Republic of Bashkortostan) — a design and production base of the Process Systems, our new direction — were fully completed.

This is a complex which comprises all plant property: land, buildings, production equipment and fixtures, warehouses with lifting equipment, rail and road access, and utility facilities.

This is a very significant stage for us — both for the streamline of the corporate structure of the Evropeyskaya Elektrotekhnica Group of Companies and for tighter risk control, which is extremely important when doing business with such large and demanding customers as Russian and international companies of Oil&Gas, petrochemical, and gas chemical industries.

Finishing these legal procedures has opened up opportunities to further bolster the production capacity of our plant;

• on September 1, 2020, the Company paid its short-term debt in full.

The growth of short-term debt during the reporting year was associated with the implementation of Process Systems contracts, under which shipments of manufactured equipment were held in H1 2020. 

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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