Euroset

A company operating in the cellular retail market and a dealer of telecom operators. The main activities of the company are the retail of cellular phones, digital cameras, DECT phones, personal audio, accessories, connection to telecom operators and the provision of information services to customers.

Aktivs

The company's network includes more than 4.3 thousand stores located in 1373 cities of Russia, Ukraine, Kazakhstan, Belarus.

Performance indicators

2018

Online sales growth of 34%

The combined company Svyaznoy Euroset on February 11, 2019 summed up the results of online sales for 12 months of 2018. From January to December 2018, in the svyaznoy.ru, euroset.ru and electronic catalog of the company, sales growth year-on-year in monetary terms amounted to 34%. By the fourth quarter of 2018, the share rose to 25% in monetary terms. Read more here.

Euroset merges with Svyaznoy

The operator Megaphone"" announced in April 2018 that it had reached an agreement on the merger of its retail chain Euroset"" with a competitor - the network Coherent"." The corresponding agreement was signed by Megafon with the owner "Connected" - the Solvers group (SLV) of the entrepreneur Oleg Malis^[1]

As part of the deal, Megafon's subsidiary, Lebford Investment offshore, will transfer 100% of the shares of Euroset offshore, which owns the Euroset group's operating companies, to Cyprus's DTSRetail. This structure is now the owner of Svyaznoy.

Megafon will have a 25.1% stake in the combined company through Lebfrod Invetsments and two seats on the board of directors (the total number of seats on the board of directors has not been disclosed). The Solvers group will have control over the combined company.

Megafon claims that the combined company will include 5 thousand salons, which will allow this company to become the world's largest retail chain in the field of high technologies.

The revenue of the combined company in 2017 is 22 billion rubles. The company employs 30 thousand employees, 2 million people visit its salons every day.

History

2025: Founder Yevgeny Chichvarkin entered the Russian register of terrorists and extremists

Rosfinmonitoring included businessman Yevgeny Chichvarkin (entered by the Ministry of Justice in the register of foreign agents) in the list of terrorists and extremists. Information in November 2025 was published on the agency's website. The businessman lives outside Russia. In October 2025, a criminal case was opened against him on the seizure of power and the organization of the terrorist community - the "Anti-War Committee of Russia" (recognized as an undesirable organization in Russia), which appeared after the start of the SVO.^[2]

2019: Completion of integration of Svyaznoy and Euroset retail chains and change of CEO

On May 28, 2019, Svyaznoy Group announced the successful completion of the integration of Svyaznoy and Euroset retail chains. As a result of the merger of companies, a single IT infrastructure was formed, a transition to a single logistics system was carried out, and legal entities of operating companies were merged. The integration resulted in the emergence of a large player on the Russian market with great growth potential.

Oksana Guskova from June 1, 2019 was appointed General Director of the Svyaznoy Group. Alexander Malis, who previously held this position, left the post.

2018

Euroset salons will be transferred under the Svyaznoy brand

The combined company Euroset and Svyaznoy presented its development strategy in June 2018. The company will develop under the Svyaznoy brand. The combined company was headed by Aleksandr Malis, who before that was the president of Euroset. The Euroset brand will cease to exist within a year.

Euroset salons will be transferred under the Svyaznoy brand or under a new brand, Alexander Malis explained to CNews. The decision to create a new brand has not yet been made^[3].

The combined network will have 5.5 thousand salons in 1.3 thousand Russian cities. They employ 30 thousand people. 2 million customers enter these stores every day.

MegaFon PJSC became a 100% shareholder of the company

In February 2018, Euroset announced a change of shareholders - now 100% of the company's shares belong to PJSC MegaFon"." MegaFon PJSC and PJSC "" VimpelCom came to an agreement on the termination of joint activities within the framework of Euroset in 2017.

As a result of a number of transactions, MegaFon acquired a 50% stake in Euroset from PJSC VimpelCom and thus brought its ownership to 100%.

In turn, VimpelCom PJSC acquired half of Euroset's retail stores, which is approximately 1800 outlets, and paid 1.25 billion rubles to MegaFon to cover its share of Euroset's outstanding debt obligations.

2017

Revenue growth of 83%

Euroset summed up its work in 2017. The number of orders from the site in 2017 increased by 68% compared to 2016, while revenue increased by 83%. In particular, the number of orders in November-December 2017 alone increased by 97% compared to the same period in 2016, and revenue - by 174%.

According to the company, the modernization of the site, the ability to reserve and quickly (up to 4 hours) deliver orders to Euroset stores, expand the sales offer, increase marketing activity, and high order processing speed increased the conversion of the site to 70% in 2017 compared to 2016. Moreover, the technical improvements made ensured the uninterrupted operation of the site in the hottest time - in December 2017.

In 2017, in addition to working with assortment, delivery and marketing activities, our specialists did a lot of work to optimize the site and our infrastructure, increased speed and prepared well for high peak loads. Of course, this had a positive effect on sales and helped Euroset cope with the growth of orders in December. Over the past week of December, we accepted, processed and delivered the same number of orders and for the same amount as for the entire August 2017, - said Ilya Adamsky, director of the Internet commerce and corporate sales department of Euroset.

According to company statistics, the number of pickup orders continues to grow rapidly. In 2017, customers picked up 60% online orders in stores for 24 hours, and the total volume of orders purchased at outlets amounted to 73% of the total revenue for orders made on the site.

In addition, the updated mobile version of the site has become a growth driver, according to Euroset. In 2017, conversion of the mobile version increased by 163% compared to 2016, revenue growth was 466%. The number of buyers who prefer to make purchases from mobile devices is increasing: for example, in 2017, 46% of orders were made using mobile devices.

MegaFon and Veon split Euroset

On July 12, 2017, MegaFon PJSC and Veon announced the termination of joint activities within the framework of Euroset's business.

Based on the agreement reached between the parties, MegaFon will acquire a 50% stake in Euroset from VimpelCom and bring its ownership to 100%. At the same time, Euroset will remain on the market as an operating company. PJSC VimpelCom, in turn, will acquire half of Euroset's retail stores.

The agreement must be approved by the regulator in accordance with the applicable rules and conditions. The transaction will be completed only after all preconditions have been met and regulatory approval has been obtained.

Company Separation Discussion

In the spring it became known that Megaphone"" and VimpelCom"" (Beeline trademark) intend to agree on the fate of their equal shares Euroset within one month. This was stated by the general director of Megafon. Sergey Soldatenkov

"The negotiation process on the possible division of Euroset is ongoing," he said. - I hope it will last no more than a month, maybe even faster^[4].

Rumors about a possible division of Euroset appeared in the spring of 2016. It was implied that each of the operators would take half of the retail network, which now has about 4.2 thousand salons throughout Russia, and join new points to its own network. With this development of events, a very significant issue is the preservation or complete disappearance of the Euroset brand itself.

2016: Loss of RUB 1.66 bn

The loss of Euroset in 2016 amounted to 1.66 billion rubles. In addition, the loss on depreciation of Megafon's adjustments on the distribution of the acquisition price of Euroset amounted to 4.93 billion rubles.

2015: Loss of RUB 1.18 bln

At the end of 2015, Megafon reported that Euroset had a profit of 1.48 billion rubles, but there was still a depreciation loss of 2.6 billion rubles. As a result, Euroset's total loss in 2015 amounted to 1.18 billion rubles, Megafon's share in this loss was 590 million rubles.

2014: Reduction of net debt from 5 billion rubles to zero

Euroset brought the value of the company's net debt as of January 1, 2015 to zero. The company's net debt as of January 1, 2014 amounted to about 5 billion rubles. Alexander Malis, President of the company:

"The rate on bank interest that has been established to date completely excludes the use of bank financing for fair business. banks Only people who have nothing to lose can take loans on the terms that are offered today. "

2012: Megafon and Usmanov buy 50% of Euroset for $1.3 billion

The Board of Directors of Megafon approved the parameters of the upcoming transaction on the purchase of shares of the largest cellular retailer Euroset. As a result of the transaction, Megafon and its controlling shareholder, Garsdale Services holding, will acquire Alpazo, an offshore company owned by Alexander Mamut, a 25% stake in Euroset. The controlling shareholder of Gardsale is Alisher Usmanov, minority shares in the holding are also owned by the Telconet Capital fund of Sergei Adonyev and the state corporation Rostekhnologii.

It was announced that the acquisition will be carried out in several stages. First, Megafon will redeem redeemable preferred shares of the Cypriot offshore Lebford in the amount of up to $590 million. Lebford Investments will direct these funds to the purchase of a quarter of Euroset shares. The offshore will buy the other quarter of the shares in the interests of Garsdale.

Thus, Lebfrod Investments will own a 50% stake in Euroset, and the offshore company itself will be owned on a parity basis by Megafon and Garsdale. If Euroset achieves a number of financial indicators, Mamut will receive an additional bonus of up to $110 million, which Megafon and its controlling shareholder will pay in half.

A source familiar with the details of the deal told CNews that shares of the Internet holding SUP Media (unites Livejournal, Газета.ру and other online projects) will be used for settlements with Mamut. SUP Media shares on a parity basis were divided between Mamut and Usmanov, but in preparation for the deal with Euroste, Usmanov transferred his stake in the Internet company to Garsdale.

Thus, the maximum estimate of Euroset under the deal is $2.36 billion - 2.44 billion. In addition, Megafon and Garsdale will conclude an option agreement, in accordance with which Megafon will be obliged to buy out its shareholder's stake in Euroset, and Garsdale, in turn, will sell it to Megafon. The value of the exercise of the option will be up to $1.33 billion, it can be exercised within one to three years from the moment of acquisition of Euroset.

Consequently, Usmanov's holding will be able to earn up to $740 million on the purchase and sale of Euroset shares, and by the time the option is exercised, Euroset's valuation will double to $5.32 billion. "The future owners of Euroset expect that after the purchase of the company, its cost will increase significantly," says a source at CNews. However, he notes, the final price parameters of the transaction have not yet been agreed.

At this time, Mamut has a 50.1% stake in Evrsoeti, the remaining 49.9% in VimpelCom (Beeline trademark). Having sold 50% of the shares, Mamut will also sell the remaining 0.1% of the retailer's shares to VimpelCom. Thus, VimpelCom and Megafon will have parity in Euroset, the parties will also have to conclude an option agreement, which was still absent between the retailer's shareholders.

2011

E-reader sales boom

For six months from January to June 2011, Euroset sold 14.8 times more readers than in the same period last year (+ 1379%). In the seven months of 2011, the retailer sold more readers than in all of 2010, she adds. In monetary terms, sales of these devices increased in the first half of 2011 compared to the same period in 2010 by 5 times (+ 410^[5]times.

Euroset does not disclose the absolute sales figures for readers in its stores, but shares the assessment of the market as a whole: in the first half of 2011, 658,000 of these devices were delivered to Russia (438% more than in the first half of 2010), and in monetary terms the market grew from about 1.2 billion to 3 billion rubles. For comparison: tablet computers in the first half of 2010 in Russia were sold, according to Smartmarketing, about 200,000.

The growth in demand for readers was facilitated by a rapid decline in prices for them, Smolskaya said. If in the first quarter of 2009 (when readers first appeared in Russian retail) such a device cost an average of 13,500 rubles, now it is 4,500 rubles, she says. Three times cheaper is a consequence of the emergence of e-books with TFT screens (liquid crystal displays on thin-film transistors) and increased competition between manufacturers, Smolskaya believes: in the first quarter of 2009, the entire market was formed by products from two or three manufacturers, and now there are at least 20 of them.

Mamut finally settled with the founders of Euroset

The deal to sell the largest Russia mobile retailer, signed in September 2008, was completed only in February 2011. Alexander Mamut finally settled with the founders. By Euroset this time, the company can cost 10 times more than#^[6]

Shareholders of Euroset - ANN Alexander Mamut and VimpelCom - completed the acquisition of the Euroset group from Timur Artemyev and Yevgeny Chichvarkin. This was reported on February 3, 2011 by Mamut, Chichvarkin and Artemyev. The agreement between ANN and the founders of Euroset was concluded back in September 2008, at the same time Mamut became the full owner of a 100% stake in the retailer, recalls the president of the company, Alexander Malis. Shortly thereafter - in October 2008 - Mamut resold 49.9% of Euroset to VimpelCom for $226 million. VimpelCom completed this transaction at the same time, in 2008, says his press secretary Anna Aibasheva.

Mamut, on the other hand, completed settlements with the former co-owners of Euroset only now, a source close to its participants told Vedomosti. The execution of the transaction lasted so long because it was complex, the buyer needed to check large amounts of information, Chichvarkin explained to Vedomosti. As a result, "the views of all parties [on the company and its value] completely coincided," all settlements were completed and all participants in the transaction "are absolutely happy," he says.

"Sold for three kopecks" - this is how Chichvarkin used to answer questions about how much he sold his 50% Euroset to Mamut. At the same time, he added that he had no complaints against Mamut. Mamut had some debt only to Artemyev, a source close to the co-owners of Euroset told Vedomosti earlier.

Artemyev told Vedomosti only that the participants in the deal have no mutual claims. Neither he nor Chichvarkin disclose the cost of the deal.

At the end of the settlements, Chichvarkin and Artemyev received about $200 million each, according to a source close to the new shareholders of Euroset. A similar amount was previously called "Vedomosti" by a friend of Chichvarkin. The retailer's bank debt was about $900 million in the fall of 2008 - thus, the entire Euroset at that time could be estimated at about $1.3 billion.

Both founders of Euroset complete the deal while outside Russia. Artemyev spoke yesterday with Vedomosti while on his way to the UK, and Chichvarkin and his family have been living in London since December 2008.

The coincidence of these two events - the closure of the criminal case and the sale of Euroset - is an accident, Chichvarkin claims.

"By making a

deal on London law, we could not make the completion of the trial in Russia a condition," he explains.

It was expected that soon Euroset could receive another valuation - during the IPO on the London Stock Exchange, scheduled for spring 2011. Up to 30% of the company's shares can be put on the exchange, including part of the stake owned by Mamut, managers of several investment banks told Vedomosti in the fall of 2010 and confirmed Mamut's acquaintance. Then investment banks tentatively estimated 100% of Euroset at $2.5-3 billion (of which the retailer's debt accounted for only $324 million). Now the estimate is at least $4 billion for the entire company, according to a source close to its co-owners.

Jury acquitted all Euroset employees

In January 2011, the Prosecutor General's Office closed the case after a jury fully acquitted former Euroset employees and they were released after almost two years of arrest.

2010

Point of Sale Network Optimization

Among the important success factors of 2010, the head of Euroset Alexander Malis named topographic optimization of retail outlets. According to him, over the past year, out of 3700 Russian Euroset stores, about 1000 were closed, and about 1000 were opened in more successful places. Thus, the total number of outlets and the number of personnel in them has not changed.

Advertising spending switched to vendors

Until 2010, Euroset participated in financing advertising, and sometimes paid for it in full, admitted the head of the company Aleksandr Malis (in the mid-2000s - in the proportion of 50:50, and a couple of years ago suppliers paid 3/4 of Euroset's advertising costs, recalls its former employee), but then proved to suppliers that the benefits of advertising that they place through Euroset recoup their costs for it.

"It

is important for a supplier who brings a new phone to market<...> that the market knows about it and that it is sold everywhere," explains President Alexander Malis. "We have learned how to make ads that give suppliers the opportunity to sell more both in Euroset and beyond."

According to the agency Aegis Media, last year Euroset paid advertising for 340 million rubles. (including VAT and discounts). The estimate of OMD MD I PHD Group is $7.1 million excluding VAT. In 2009, Euroset paid for advertising by more than 300 million rubles, and in 2010 expenses will increase to about 700 million rubles, says a source close to Euroset. In 2010, the advertising budget of Euroset almost doubled, but these expenses fell entirely on the retailer's suppliers, its president, Aleksandr Malis, told Vedomosti:

'We

don't pay for advertising, it's not our money. Advertising is paid for by suppliers whose products are sold with us. " Euroset's own advertising budget is, in his words, "some hundreds of thousands of rubles a year."

Nokia covers all Euroset's costs of advertising its products, confirms the manufacturer's representative Viktoriya Eremina. But if Nokia pays for advertising in its pure form, then Euroset motivates sellers to sell more Nokia products, places its advertising and information materials in stores and on the Internet.

Dealer Agreement with Tele2

On August 3, 2010, it became known that Tele2 Euroset they had entered into a new dealer agreement. Until now, there have been local agreements between the companies with their own conditions in each region. Now the agreement is unified, unlimited and applies to all 34 regions of Tele2's presence. Euroset The new sales plan, according to Smirnova, provides for an increase in the monthly volume of connections to Tele2 by 40% compared to 2009. If so, then at least 420,000 Tele2 SIM cards will have to be sold over the year.

Euroset sold about 12 million SIM cards in 2009, of which Tele2 accounted for 2.5%, according to Malis, that is, about 300,000.

The partners did not disclose the commercial terms of the new agreement, noting only that the amount of remuneration that Tele2 will pay to the retailer will be no less than the payments of Megafon and VimpelCom (according to these operators, in 2009 each subscriber attracted through Euroset cost them $24.2 with VAT). The difference in the commissions of Tele2 and VimpelCom with Megafon will be proportional to the difference in the size of the average accounts of their subscribers (ARPU), a source close to one of the parties to the negotiations said. At VimpelCom and Megafon, the size of the Russian ARPU was 307.7 rubles in the first quarter of 2010. and 295 rubles. per month, respectively, Tele2 - 206 rubles. per month (30-33% less). Based on these calculations, Tele2 must pay Euroset $16-17 per subscriber. But in fact, this is more than $20, says a manager close to the other side of the negotiations: the ARPU of new Tele2 subscribers is higher, and the constant part of the remuneration (about $10 per subscriber) is the same for all operators.

Tele2 is actively recruiting subscribers itself, says Anton Pogrebinsky, partner at AC & M-Consulting. But the mobile market is becoming more and more saturated and poaching subscribers from other companies is becoming more and more difficult, he explains. In addition, over the past year, Tele2 has begun operations in 20 new regions and Euroset can help the operator quickly take a share in local markets, says Pogrebinsky.

First half of the year: Revenue of 27 billion rubles

First half of 2010 to: IFRS

Indicator	First half of 2010	First half of 2009
Net consolidated revenue, thousand rubles	27 601 344	24 425 758
EBITDA, thousand rubles	3 479 018	86 644
EBITDA, %	12,6%	0,4%
Net profit/( loss), thousand rubles	1 903 743	- 2 899 573

This result applies to the entire Euroset company, which unites legal entities that form a trading and purchasing network under a well-known brand.

Sales of mobile phones in physical terms in the first half of 2010 increased by 1 million units (from 3.5 to 4.5 million).

Talking about the reasons for financial growth, Euroset President Alexander Malis mentioned "serious work with the commodity matrix," as a result of which the retailer increased the share of high-margin goods, and a sharp reduction in costs. So, according to Malis, the cost of back-office was significantly reduced. At the beginning of 2010, it was reported that about 4 thousand Euroset office employees were reduced.

2009

Revenue 55 billion rubles, net profit - 1.1 billion

Financial Performance (IFRS 2009):

• revenue - 55.16 billion rubles,
• EBITDA - 4.83 billion rubles,
• net profit - 1.194 billion rubles.

The Prosecutor General's Office demands the extradition of Chichvarkin from the UK

In 2009, the Prosecutor General's Office opened a case against the founder of Euroset Chichvarkin, demanding his extradition from the UK.

Failed collaboration with Megafon

CNews was able to familiarize itself with the 2009 audited statements of the Cyprus offshore Morefront Holdings, which is the parent structure for the Euroset group of companies. The reports provide previously undisclosed details regarding the marketing agreement that the retailer concluded with Megafon. Recall that the terms of the agreement imply the sale by Euroset of 7.2 million Megafon contracts for the period from April 1, 2009 to September 30, 2010, the retailer's dealer fee is $172.8 million. It was paid in advance, but at the end of 2009 most of the remuneration remained "unearned" - 3.17 billion rubles. ($106 million at the then exchange rate).

The pledge under the contract is 25.1% of Euroset shares pledged by the controlling shareholder of the company - an offshore company from the British Virgin Islands Rambert Holdings (owned by Alexander Mamut). The rest of the retailer's shares are owned by VimpelCom. Meanwhile, according to the report, Euroset resorted to the help of Rambert Holdings to conclude a contract. For its services, Mamut's structure received $25.6 million, at the end of 2009, $4.9 million of this remuneration remained unearned.

Now Rambert has fully fulfilled its remuneration, Euroset told CNews. At the same time, according to the information provided in the report, to pay off its own shareholder, the retailer resorted to the help of Megafon - with five of its bills totaling $25 million, Euroset paid for consulting services to Rambert. "At that time, we did not have free funds and we used the bills that Megafon paid us a dealer fee," explains the interlocutor of CNews. Megafon said they were satisfied with the results of the contract with Euroset, but declined to comment on its details.

Analysts point to Mamut's non-market remuneration, which amounted to 14.8% of the amount of Euroset's contract with Megafon.

"Of course,

Mamut has quite extensive connections and contacts in the Russian business community and his contribution to the conclusion of the partnership agreement was most likely significant," says Eldar Vagabov, an analyst at Finam Management. "Another thing is that the mediation fee clearly exceeds the market size, which is usually 2 to 10%." The analyst recalls that after the purchase of Euroset in 2008, Mamut headed the company for some time. "Therefore, this so-called commission may not quite adequately reflect reality: bonuses, compensation payments, and anything at all, could pass under this article," Vagabov suggests

.

Note that Mamut's $25 million received is 62% of Euroset's net profit for 2009, which amounted to 1.192 billion rubles ($40 million). Euroset itself does not plan to pay dividends to shareholders, company president Alexander Malis said today. But the deal with Rambert was not a payment of dividends in a hidden form, he assured CNews, and the board of directors chose an independent appraiser to assess the value of the services provided by this company. The president of Euroset could not explain what the services were, because at the time of its conclusion he did not work for the company.

2008: Company founder Evgeny Chichvarkin leaves Russia

In December 2008, Euroset founder Yevgeny Chichvarkin left for the UK shortly after the Investigative Committee under the Prosecutor General's Office opened a criminal case against several former Euroset employees, who were then charged with kidnapping and illegal imprisonment of expeditor Andrei Vlaskin, robbery, extortion, torture and knowingly false denunciation. All these events, according to investigators, took place back in 2003, but Vlaskin wrote a complaint only in September 2008 - just when Chichvarkin and Artemyev were selling Euroset.

According to the results of work for 2008, Euroset entered the Forbes rating of 200 non-public Russian companies (21st place).

2002-2007: The world's fastest-growing retailer

According to the company's report Deloitte (January 2009), in the period 2002-2007 Euroset it became the most dynamically developing retailer in the world.