Sistema PJSFC Investor Presentation - 2019 г.
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2019 г.
Sistema PJSFC
Investor Presentation 2021
DISCLAIMER
Certain statements in this presentation may contain assumptions or forecasts in respect to forthcoming events within Sistema PJSFC.
The words “expect”, “estimate”, “intend”, “will”, “could” and similar expressions identify forward-looking statements. We wish to
caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to
update these statements to reflect events and circumstances occurring after the above-mentioned date or to reflect the occurrence
of unanticipated events. Many factors could cause Sistema’s actual results to differ materially from those contained in our projections
or forward-looking statements, including, among others, deteriorating economic and credit conditions, our competitive environment,
risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks
specifically related to Sistema and its operations.
2
SISTEMA: PORTFOLIO OVERVIEW
Sistema is a publicly-traded investment holding with an OTHER ASSETS
asset portfolio representing companies across 15
sectors in Russia BINNOPHARM GROUP
LSE: SSA MOEX: AFKS Vladimir Evtushenkov Founder and main shareholder (59.2%),
Chairman of the Board
Vladimir Chirakhov President and CEO
Alium Sintez Biocom
24.9% 56.2% 1 75%1
PUBLIC ASSETS
POWER GRIDS RENTAL PROPERTIES
MOEX: MTSS MOEX: OZON MOEX: ETLN
NYSE: MBT NDAQ: OZON LSE: ETLN
Bashkir Power Grid Business-
50.1496% 33.1%
2
25.6% Company Nedvizhimost
91% 100%
Leading public Leading multi-category One of the Russia’s largest
telecommunications online sales platform in public development and HOSPITALITY FASHION RETAIL
operator in Russia Russia construction companies
Cosmos Hotel Group Concept Club
100% 43%
KEY NON-PUBLIC ASSETS
HIGH TECH
FORESTRY AGRICULTURE HEALTHCARE
Medsi RTI Kronstadt Group
Segezha Group Steppe Agroholding
87% 96%
98.3% 84.6% 95.5%
PE FUNDS VC FUNDS
Largest vertically Major agriculture holding Russia’s largest national
integrated forestry holding and one of Russia’s largest healthcare chain
in Russia land owners
1
Joint stake with financial partner
2 Upon completion of the initial public offering of Ozon, fulfilment of the private placement agreement and conversion of the convertible loans previously provided to Ozon, and assuming 4,472,969 ordinary shares issuable upon exercise of
outstanding vested share-based awards under the employee incentive program of Ozon Sistema’s total stake in Ozon will amount to at least 33.1% . 3
FINANCIAL REVIEW 3Q 2020
4
HIGH PACE OF BUSINESS GROWTH AND DECREASE IN FINANCIAL LIABILITIES
Results of portfolio companies Consolidated revenue Adj.2 OIBDA
- Revenue grew significantly year-on-year1 in 3Q 2020, driven RUB bln RUB bln
by the strong results of MTS, Segezha Group, Steppe and
Medsi. +9.6% +14.0%
- Adj. OIBDA significantly increased year-on-year in 3Q 2020 184.9
on the back of the growth in adj. OIBDA at MTS, Segezha 168.7 71.7
62.9
Group and Steppe and due to the gain from the sale of
Detsky Mir shares in September 2020.
Key events in 3Q 2020 and after the reporting 3Q 2019 3Q 2020 3Q 2019 3Q 2020
period
- In September 2020, Sistema fully disposed of its
shareholding in Detsky Mir through a public offering, with Assets leading by revenue
proceeds amounting to RUB 16.9 bln. growth year-on-year in 3Q Net financial liabilities at
2020 Corporate Centre3,4
- In September 2020, Expert RA rating agency upgraded
Sistema’s credit rating by two notches to ruAA-, and S&P RUB bln
rating agency upgraded Sistema’s credit rating to BB.
-16.6%
- In November 2020, Sistema attracted the first ESG financing 25.4%
from Sberbank. Under RUB 10 bln credit line interest rate on
each loan could be tied to sustainability performance.
- In November 2020, Ozon held an initial public offering (IPO) 199.0
of its American Depositary Shares (ADSs) on NASDAQ and 190.7
38.0% 166.0
obtained listing of the ADSs on the Moscow Exchange.
Gross proceeds to the company, including the
underwriters’ overallotment option and the concurrent
private placement, where Sistema participated and 3Q 2019 2Q 2020 3Q 2020
invested USD 67.5 million, amounted to approx. USD 1.25 48.4%
billion. Upon completion of the IPO, fulfilment of the private
placement agreement and conversion of the convertible
loans previously provided to. Ozon, Sistema’s total stake in
5
Ozon will amount to at least 33.1%
1 Hereinafter results for 3Q 2019 are presented to reflect the reclassification of assets of Detsky Mir and MTS’s business in Ukraine as part of discontinued operations, and divestiture of AGK Yuzhny.
2 Hereinafter please see Appendix A of the financial results press-release for 3Q 2020.
3 Source: Management accounts.
4 Including total borrowings, liability to Rosimushchestvo, financial lease net of cash and cash equivalents at the Corporate centre level.
5 Assuming the exercise of outstanding vested share-based awards under the employee incentive program of Ozon. 5
FINANCIAL REVIEW: 3Q 2020
Revenue: 3Q 2020
RUB bln MTS: growth in mobile service revenue and
+9.6% revenue from other segments (Fintech, Media
and B2B Digital & Cloud); increase in adj.
OIBDA following revenue growth and
4.8 1.4 1 reduced commercial and personnel
-1.2 184.9 expenses, and despite a fall in revenue from
international roaming.
5.2
6.0
168.7
Segezha Group: strong growth in revenue
and OIBDA, driven by increased production
and sales of paper and sawn timber, and
impacted by rouble depreciation.
Revenue MTS Segezha Group Steppe Medsi Other Revenue
3Q 2019 assets, 3Q 2020
net
Steppe: significant growth in revenue and
Adj. OIBDA: 3Q 2020 OIBDA due to increased sales of agricultural
products and higher grain prices, as well as
RUB bln positive dynamics in the Dairy Farming
+14.0% segment.
4.9 1
1.0 71.7
1.4 -1.1 Medsi: increase in revenue and OIBDA due to
2.6 the deferred demand for medical services,
62.9
growth in revenue from diagnostics and the
treatment of COVID-19, and development of
home care services.
Business Nedvizhimost: decrease in revenue
Скорр. OIBDA 3 кв. 2020г. Segezha Group МТС А/х "Степь" "Бизнес-Недвижимость" Прочие 2 Скорр. OIBDA and OIBDA due to the completion of the
Adj. Segezha MTS Steppe Business Other
активы,
нетто
Adj.
3 кв. 2020г.
commercial real estate sales programme.
OIBDA Group Nedvizhimost assets, OIBDA
3Q 2019 net 3Q 2020
1 Numbers may not add up due to rounding.
2 The
dynamics of the Group’s adj. OIBDA in 3Q 2020 were affected by the reflection of the financial result from the sale of Detsky Mir shares in September 2020 in the amount of RUB 3.7 bln, and the reflection of the
Group’s share in reduction of Ozon’s net loss in the amount of RUB 0.2 bln (in 3Q 2020 the loss amounted to RUB 1.6 bln, in 3Q 2019 – RUB 1.8 bln). 6
CASH FLOWS AT THE CORPORATE CENTRE
RUB bln
Placement of Detsky Mir shares
Participation in the MTS buyback programme
Other income
+16.4 -26.6
+19.5
2.5
-3.0
16,6 -4.6
-1.5 -1.3
7.6 -1.0 5.6
30 Jun 2020 Monetisations Dividends and Net repayment Investments Interest SG&A, Dividends for Repayment of 30 Sep 2020
and other cash returns of financial expenses incl. taxes 2019 other liabilities
income liabilities
- Cash inflows in 3Q 2020 were driven primarily by the placement of Detsky Mir shares (RUB 16.6 bln), participation in the MTS buyback
programme (RUB 2.5 bln), and MTS dividends (RUB 15.8 bln).
- The change in financial liabilities was due to the issue of series 001P-14 bonds (RUB 10 bln) and series 001P-15 bonds (RUB 10 bln), as well as
repayment of bank loans in the amount of RUB 31.9 bln and repayment of the liability to Rosimushchestvo in the amount of RUB 4.1 bln. In
addition, the repurchase of series 001P-06 bonds in the amount of RUB 4.4 billion and series 001P-09 bonds in the amount of RUB 6.2 bln was
completed.
- The total volume of investments in 3Q 2020 amounted to RUB 3.0 bln, including the purchase of Etalon Group shares and investments in
promising projects and startups through the platform of funds.
- Interest expenses were due to interest payments on loans and coupon payments on local rouble bonds.
- Dividend payments for FY 2019 amounted to RUB 1.3 bln.
Source: Management accounts. Numbers may not add up due to rounding. 7
CORPORATE CENTRE’S FINANCIAL LIABILITIES
Corporate Centre’s financial liabilities1
RUB bln
- Active participation in the domestic capital market
allowed Sistema to significantly reduce the average
interest rate of the debt portfolio, extend its maturity and
198.3 20.0 -46.6
171.6 establish a comfortable repayment schedule.
8.2 -0.1
RUB debt 4.6
FX revaluation2
- In 3Q 2020, the Corporation’s financial liabilities
attraction RUB loans
redemption decreased to RUB 171.6 bln due to the repayment of
190.1 198,3
171,7 171,6 rouble-denominated loans and repayment of liabilities to
167.0
Rosimushchestvo.
- As of 30 September 2020, the share of rouble-
30 Jun 2020 30 Sep 2020 denominated financing stood at 97% of the Corporate
Centre’s financial liabilities.
RUB debt Liability to Rosimushchestvo3
Comfortable repayment schedule Structure analysis1
RUB bln As of 30 September 2020
Liability to Rosimushchestvo
3%
66.7
22.6
34.2 Bank loans and other
22.1 35%
6.0
16.5 3.3 21.0 RUB bonds
11.0 44.1
0.2 6.5 28.2 62%
4.6 18.8 21.0
6.2 10.0
2020 2021 2022 2023 2024 Thereafter
Local bonds with put option4 Loans and other debt (RUB)
Liability to Rosimushchestvo3
1 Hereinafter the Corporate Centre’s financial liabilities are presented based on management accounts.
2 Including other non-cash flows.
3 As of the end of 3Q 2020, USD-denominated liability to Rosimushchestvo for shares of SSTL are presented at the RUB/USD exchange rate as of 30 September 2020.
4 RUB series 001Р-04 bonds with a put option in 2020; 001Р-07 with a put option in 2021; 001Р-01, 001Р-06, 001Р-09 and 001P-10 with a put option in 2022; 001P-11 and 001P-14 with a put option in 2023; 001Р-05, 001Р-08, 001Р-
12, 001Р-13 and 001Р-15 with a put option in 2024. 8
CONSOLIDATED FINANCIAL LIABILITIES
Consolidated financial liabilities1,2: composition by borrower and maturity profile
RUB bln
711.6 733.8 717.9 227.4
39.3 38.9
55.5 20.1
20.3 50.8
20.5 188.2
40.6 54.0
198.3 171.6
203.8
104.5 104.6
65.8
425.2 432.9 27.4
391.5
3Q 2019 2Q 2020 3Q 2020 2020 2021 2022 2023 2024 Thereafter
MTS Corporate Centre Segezha RTI Other Debt and other liabilities
Structure analysis1,2
RUB bln
3%
Liability to
5% 5% Eurobonds
15% 11% Rosimushchestvo
10% 5% 6% 24% 5% 1%
87% 90% 89% 85% 89%
76%
Bank
RUB bonds loans and
41% other
3Q 2019 2Q 2020 3Q 2020 3Q 2019 2Q 2020 3Q 2020 53%
RUB USD Other Long-term liabilities Short-term liabilities
1 Including
financial liabilities at the Corporate Centre, financial leases and total borrowings of portfolio companies.
2 Management accounts data is presented as of 30 September 2020. 9SG&A EXPENSES
Group SG&A expenses1 SG&A expenses: portfolio companies1 SG&A expenses: Corporate Centre1
IFRS, RUB bln SG&A / Revenue, % RUB bln
-3.5 p.p. -1.5 p.p.
19.0% 16.2%
MTS
15.5% 17.7%
32.0
1.9
28.7
3.5
1.8 3.5
1.1 17.6%
1.0
1.0 0.9 Segezha
0.5
20.8%
2.9 3.3
2.1%
3.4%
21.7 21.0 Steppe 1.1
9.7%
0.6%
3Q 2019 3Q 2020 3Q 2019 3Q 2020
8.0%
Medsi
MTS Segezha 11.3% Corporate Centre SG&A
Steppe RTI
Corporate Centre Other Corporate Centre SG&A/Group revenue
Group SG&A / Group revenue 3Q 2020 3Q 2019
Group SG&A declined by 10.5% year-on- The SG&A/revenue ratio significantly The Corporate Centre SG&A and the
year in 3Q 2020 primarily due to reduced decreased year-on-year across most key Corporate Centre SG&A/Group revenue
SG&A of the Corporate Centre and assets in 3Q 2020. ratio decreased significantly year-on-year
reduced commercial and personnel as a result of the high base effect - bonuses
expenses at MTS. The SG&A/Group were paid out in 3Q 2019 due to the
revenue ratio decreased by 3.5 p.p. year- monetisation of assets.
on-year to 15.5%.
1 Source: management accounts. 10SISTEMA: FOCUS ON SUSTAINABILITY IN SISTEMA
Approach to sustainability management FTSE4Good Index
- Sustainability is an integral element of Sistema’s activities, investment - In 2019, Sistema confirmed its inclusion in the FTSE4Good Index
strategy and long-term success. The Corporation was one of the first Series
Russian companies to join the UN Global Compact in 2002.
MSCI ESG Ratings
- In 2020, Sistema’s Sustainability Policy was approved by the Board of
Directors as a key document setting out the approach to sustainability - In 2019, Sistema improved its position and received a rating of BB
and responsible investment, including integration of material ESG (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment,
factors throughout the investment process and asset ownership. compared to B in 2018
- Sistema has identified three key ESG areas, which are a natural
continuation of its investment strategy and where long-term value can MoEx-RSPP ESG Ratings and Indices
be created for stakeholders: - Since 2016, Sistema has been included in the leaders’ group of the
o The accessibility and quality of products and services ESG ratings compiled by the Russian Union of Industrialists and
Entrepreneurs (RSPP) and since 2019 has been a constituent
o The wellbeing of employees, customers and local member of the new MoEx-RSPP ESG exchange indices
communities
o A smart, efficient and safe environment RAEX-Europe ESG-Ranking
- As a corporate citizen Sistema and the Group companies contribute - AFK Sistema hit the top-15 for the first time entering the ESG-ranking
to social development through the Sistema Charitable Foundation in of Russian companies by the RAEX-Europe rating agency.
areas such as education and technology, the social environment and
volunteering, and culture and the arts. CDP Climate Change Rating
- Sistema Group companies made a significant contribution to the
- AFK Sistema received a “B” score and is among the top-7 Russian
nationwide efforts to combat the COVID-19 pandemic and provided
companies that responded to the CDP Climate Change
comprehensive support to their employees, partners and
questionnaire in 2020.
communities, including inter alia: producing testing systems, vaccine,
medication and PPE, treating COVID patients, adapting services, - The results of other ratings can be found at the corporate webpage
supporting medical personnel and more. “ESG Indices and Ratings".
Sistema attracts first ESG financing
- In November 2020, Sistema agreed with Sberbank to open a framework credit line, with the option to tie the interest rate on each loan to
sustainability performance (Sustainability Improvement Loan).
- By entering this agreement, Sistema has committed to integrating responsible investment principles into its investment process and business
model. Sustainable development is an integral part of Sistema's strategy, and will be established as one of the key benchmarks for investment
decision-making and asset management.
11KEY PORTFOLIO ASSETS
12MTS: SUSTAINABLE FINANCIAL GROWTH AND HIGH DIVIDEND
PAYOUT
RUB bln
1
3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue, RUB bln
Rev enue 129,0 123,0 4,9% 366,4 349,0 5,0%
Adj. OIBDA 2
58,8 57,4 2,4% 161,8 160,8 0,6% +4.9%
Adj. OIBDA margin 45,6% 46,7% (1,1) п.п. 44,2% 46,1% (1,9) п.п. 129.0
3
123.0
Adj. net profit 9,4 9,2 2,6% 24,8 22,6 9,7%
Net debt 4 349,8 339,0 3,2% 349,8 339,0 3,2%
Capex 23,4 22,0 6,1% 64,2 61,3 4,6%
Revenue increased year-on-year in 3Q 2020 due to growth in mobile services revenue on the back of a tariff
3Q 2019 3Q 2020
increase in 1Q 2020. In addition to the key Telecom segment, growth was delivered across other
business segments, including Fintech, Media and B2B Digital & Cloud. Growth in the revenue of MTS
Bank amounted to 15.5% year-on-year, and revenue from the sale of smartphones and accessories
increased by 2.9% year-on-year.
Adj. OIBDA, RUB bln
Adj. increased year-on-year in 3Q 2020, following revenue growth and reduced commercial and personnel
expenses, and despite a fall in revenue from international roaming.
OIBDA +2.4%
grew year-on-year in 3Q 2020 due to a steady revenue flow from the core telecom business and lower 57.4 58.8
Adj. net interest expenses on the back of lower interest rates.
net profit
grew year-on-year in 3Q 2020 mainly due to increased investments in network development and growth
Capex in foreign currency expenditure amid rouble depreciation.
MTS expects revenue growth of more than 3% in 2020, OIBDA growth of up to 2%, and capital 3Q 2019 3Q 2020
Outlook
expenditure to remain at RUB 90 bln, including the realised effect from the use of derivatives.
for 2020
High In September 2020, the Extraordinary General Meeting of Shareholders approved dividends for 1H 2020
dividend to the amount of RUB 8.93 per ordinary share.
payout ratio
Key MTS announced a partnership with the Spotify streaming service. As part of an exclusive offer, MTS
highlights subscribers receive a free subscription to Spotify Premium for six months.
MTS was granted Russia’s first license for 5G operations in the 24.25–24.65 GHz mmWave band. The
license covers 83 Russian regions. Business clients and large industrial enterprises will be the first to use
the 5G network.
In September 2020, S&P upgraded its credit rating on MTS to the BBB- investment grade.
1 MTS’s results reflect reclassification of the Ukrainian business as part of discontinued operations since 4Q 2019. The results for 3Q 2019 and 9M 2019 have been restated to reflect the results of this reclassification.
2 Adjustment for a one-off asset disposal in the amount of RUB 1.2 bln in 9M 2020.
3 Hereinafter net profit is presented in Sistema’s share.
4 Hereinafter net debt includes financial lease.
13SEGEZHA: LEADING FORESTRY HOLDING
Highlights Leadership in production costs (var.): unbleached sack paper
- Russia’s largest vertically-integrated forestry holding € / tonne
- One of the top forest leaseholders in Russia: allowable cut ≈ 7.8 mln
m3 696
485
High share of in-house raw wood supply in key products provides the 361 451 452 462 466
-
302 309
ability to control production costs
- > 70% of revenues generated by exports
Strategy
Czech Segezha Turkey France Sweden Austria Spain Italy Finland
- Expansion of capacity and improvements in operating efficiency Republic
as a result of the large-scale Investment programme
- Accretive M&A in Russia and globally Leadership in production costs (var.): birch plywood
Share of wood in manufacturing costs of Segezha’s key € / m3
products 500
390
250 255
36% 59% Segezha Russia Latvia Finland
Sack paper Sawn timber Segezha’s 9M 2020 revenue and OIBDA by business segment
RUB bln
28.1 Revenue Adj. OIBDA
14.0
56% 40% 7.6 6.2
2.9 1.8 1.9
Glued timber and Birch plywood and -1.1
prefabricated home kits particleboard Paper&paper Wood processing Plywood Other
sacks
Source: Fisher International data (2019), Indufor data (2019) 141
SEGEZHA: GLOBAL FOOTPRINT
Production facilities and offices in 11 countries
#3 #2 #1
Sack paper, Global Paper sacks, Europe Sawn timber, Russia
thsd tonnes / a mln sacks thsd m3 / a
4 3
West Rock 775 Mondi 5 228 Segezha Group 1400
Mondi 755 Segezha Group 1 262 ULK 1200
2
Segezha Group 375 Gascogne 560 Titan 850
Qingshan 333 Stora enso 260 VLP 450
BillerudKorsnäs 180 Smurfit Kappa 260 Ilim Timber (Rus) 450
#5
Large size birch plywood, Global
thsd m3 / a
Sveza 1 118
UPM 435
Latvijas Finieris 260
Syktyvkarsky PM 240
Segezha Group 192
1 According to Segezha’s internal research of 31 December 2019. Data on sack paper and large size birch plywood based on product capacity. Data on sawn timber, paper sacks based on final product output.
2 About 36% of the paper produced is converted into paper packaging.
3 Around 10% of the sawn timber total output is processed into glued timber.
4 Includes global production of Mondi.
15SEGEZHA: LEADING POSITIONS IN ATTRACTIVE SEGMENTS OF THE
GLOBAL MARKET WITH HIGH BARRIERS TO ENTRY
Global demand, sack paper Global demand, birch plywood Global demand, timber
Mln tonnes Mln m3 Mln m3
Sawn timber +3.6%
+1% +2% Glued timber +1.5%
8.2 417
8.0 6.2 396
7.2 5.6 364 7
6.0 6.6 5.0 322 6
6
4.2 271 5
3.2
5
358 390 410
266 317
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030 2010 2015 2020 2025 2030
European demand, sack paper Global demand, bleached softwood pulp Global demand, bleached hardwood pulp
Mln sacks Mln tonnes Mln tonnes
+0.6% +1.4% +1.8%
29
6 554 6 064 6 015 6 198 26 27 38 42
5 633 22 24 30 35
25
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030 2010 2015 2020 2025 2030
% CAGR’19-30
Sources: Fisher, Hawkins Wright, Poyry, RISI, Indufor, Eurosac, FAO, ISC, Woodstat, Timber-Online, HolzKurier 16SEGEZHA: KEY INVESTMENT PROJECTS
Segezha West Project
- Construction of a new production facility of market pulp in the Karelian region
- Capacity : 1,500,000 tonnes ≈ RUB
- Launch: 2024 150 bln
Segezha PPM modernisation
- Modernisation of the existing Segezha PPM in the Karelian region for sack paper production
Current
- situation
Capacity increase: 32,000 tonnes ≈ RUB
- Current status: ongoing 4.7 bln
- Launch: 2023
Plywood mill in Kostroma
- New plywood mill in the Kostroma region (greenfield)
- Capacity increase: 125,000 m3 ≈ RUB
- Current status: under construction 12 bln
- Launch: 2021
Cross-laminated timber (CLT) mill
- Currently there is no CLT market in Russia. If it were to follow the same growth path as in the
EU, the demand could be ~0.5 mln m3 by 2030 (source: Poyry)
- Capacity increase: 50,000 m3 of CLT panels and 16,000 m3 of glulam products ≈ RUB
- Current status: under construction 3 bln
- Launch: 2020
Sokol PPM
- Modernisation of the pulp and paper mill in Sokol to produce sack paper and
greaseproof paper
≈ RUB
- Capacity increase: 60,000 tonnes
9.2 bln
- Current status: under construction
- Launch: 2023
17SEGEZHA GROUP: STRONG FINANCIAL PERFORMANCE AMID
EXPORT REVENUE GROWTH
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue and OIBDA by
Rev enue 19,0 13,7 38,0% 50,2 43,7 14,7% segments in 3Q 2020, RUB bln
Adj. OIBDA 5,1 2,5 105,8% 11,3 10,2 10,4%
Adj. OIBDA margin 26,8% 18,0% 8,8 p.p. 22,5% 23,4% (5,9 p.p.) Revenue OIBDA
Adj. net profit / (loss) (3,3) 0,2 n/a (5,4) 4,3 n/a
Net debt 49,7 38,0 30,9% 49,7 38,0 30,9%
Capex 2,2 1,6 42,0% 9,5 4,2 123,4%
10.8
FX-denominated rev ., % 70,1% 67,8% 2,3 p.p. 70,5% 70,0% 0,5 p.p. Paper &
Own consumption, % 85,6% 74,1% 11,5 p.p. 77,8% 73,0% 4,8 p.p. packaging
3.0
Total forestry, thsd cu m 1 246,9 1 147,5 8,7% 4 092,1 3 703,1 10,5%
Revenue increased significantly year-on-year in 3Q 2020 mainly due to growth in sales and production of paper
and sawn timber. Export revenue dynamics were significantly impacted by the growth of the average
5.5
FX rate year-on-year: EUR by 20%, USD by 14%. Wood
processing
Adj. increased by more than twofold year-on-year in 3Q 2020 following revenue growth due to increased 1.5
share of high-margin products and rouble depreciation.
OIBDA
Adj. net in 3Q 2020 compared to adjusted net profit in 3Q 2019 was mainly due to the effect of currency
2.0
exchange differences from the revaluation of the company’s FX-denominated debt.
loss Plywood and
boards
0.7
CAPEX in 3Q 2020 amounted to RUB 2.2 bln, investments were focused on the construction of a CLT plant, the
purchase of logging equipment, the integration of the SAP S/4HANA system, and the modernization of
existing facilities.
Business In August 2020, the Sokol PPM launched a new production facility for technical powdered 0.7
lignosulphonates which are used for the production of black carbon for cement manufacturing and
development road construction, with an annual capacity of 21 thousand tonnes per year.
Other
-0.2
In July 2020, a new splicing line with a capacity of 25 cu m of glued products per hour was launched at
the Sokol Wood Processing Plant in the Vologda region. As a result, the production of finished glued
products at the facility will increase by 20% to 100 thsd cu m per year.
In Q3 2020, Segezha Group continued to integrate a new enterprise management system based on SAP
S/4HANA. The system is expected to be fully operational in 2021.
In October 2020, the first trial CLT panel was produced at a new CLT plant in the Vologda region. The
capacity of the new production line will amount to 50 thsd cu m. The plant is at the final stage of
construction, and is scheduled for launch in December 2020.
18SEGEZHA GROUP: GROWTH IN SALES OF PAPER, SACKS AND
SAWN TIMBER
Trends across key segments Sales
Sack paper1, thsd tonnes
In 3Q 2020, Segezha Group's paper production increased by 16.4% year-on-year to 102.71 thsd
tonnes mainly due to the postponement of planned annual equipment maintenance works from +58.1%
Sack
3Q 2020 to 4Q 2020, as well as improved efficiencies. The volume of paper sales increased by ` 81
paper 58.1% to 81.2 thsd tonnes following the growth in production volumes and as a result of inventory 51
reduction. Additional volume was sold to existing customers.
3Q 2019 3Q 2020
Paper sacks, mln units
In 3Q 2020, the sales volume increased by 4.9% year-on-year to 358.9 mln units due to a recovery in
demand from the European construction industry, following a downturn in 1H 2020 as a result of the +4.9%
Paper
COVID-19 pandemic. The recovery in demand allowed for a reduction in warehouse inventory. 342 359
sacks The decrease in production volume by 1.0% year-on-year to 335.62 mln units was due to a
decrease in demand in the Russian market during the COVID-19 pandemic.
3Q 2019 3Q 2020
In 3Q 2020, plywood production decreased by 2.7% year-on-year to 45.8 thsd cu m. Sales volume Plywood, thsd m3
in 3Q 2020 decreased by 21.1% to 38.1 thsd cu m. mainly due to the weakening of demand in the
Plywood main sectors of plywood consumption due to the COVID-19 pandemic. Revenue from plywood -21.1%
sales was maintained at the level of 3Q 2019 due to an increased share of higher-margin products 48 38
in sales in key markets, including the promotion of a new type of plywood in Australia, New
Zealand and North America.
3Q 2019 3Q 2020
In 3Q 2020, sawn timber production increased by 17.2% year-on-year to 325.6 thsd cu m due to the
acquisition of Karelian Wood Company LCC, a logging and woodworking enterprise, in early 2020, Sawn timber, thsd m3
and an increase in production volumes at existing enterprises. Output was also significantly
impacted by the reallocation of production capacity at the Sokol PPM from glulam products to +55.9%
Sawn
sawn timber in 3Q 2020 due to the commissioning of a new splicing line, which will increase the 339
timber glulam production capacity of the Sokol PPM by 20%. Sawn timber sales volume in 3Q 2020 218
increased by 55.9% year-on-year to 339.3 thsd cu m following an increase in production. The year-
on-year growth was also due to an uneven distribution of revenue in the segment between 3Q
2019 and 4Q 2019. 3Q 2019 3Q 2020
1 Circa 26.7% of paper produced was supplied to Seghezha Group’s own converting facilities to produce paper packaging.
2 Including 18.8 mln consumer paper bags. 19STEPPE: INVESTMENT APPEAL OF THE RUSSIAN CROP FARMING SEGMENT
Land is cheaper than in other countries1
USD thsd / ha, 2019 - The Russian agricultural land market remains
fragmented, however the process of consolidation
continues, especially in the most attractive
5 – 40
Southern region.
- The price of arable land has the potential to grow
5 – 20 fivefold compared to global peers, especially
5 - 10 5 - 10 given recent Russian ruble depreciation, which
0.5 – 3.5 pushes down dollar-denominated prices and
increases returns per ha.
Russia Argentina Brazil USA Western Europe
- The cost of wheat growing in Russia remains at
record lows due to the utilisation of modern
The lowest cost of wheat growing technologies and depreciation of the rouble.
USD / tonne, 2019 - Modernisation of the industry and advanced
technologies have significantly increased average
225 crop yields and improved the stability of harvests.
200
170 150 130 108 - Smaller and less efficient companies are leaving
84
the market, which creates great opportunities for
consolidation.
USA EU -25 Canada Argentina Kazakhstan Ukraine Russia - Currently, dollar wheat price is near its 10-year
historical lows. As soon as wheat price rebound,
Significant yield growth potential the value of land assets will increase.
Wheat yield, tonnes / ha, 2019
5.9 5.6
4.2
3.5 3.4
2.7 2.6
1.0
EU-25 China Ukraine USA Canada Russia Turkey Kazakhstan
1All data is shown for land with above-average crop yields.
Source: US Department of Agriculture, Rosstat, Agroholding Steppe 20STEPPE: RUSSIA IS A GLOBAL LEADER IN CROP FARMING AND
AGRICULTURAL EXPORTS
1. Russia is one of the world's largest producers of grain 2. … and especially wheat
Production output in Russia, 2019, mln tonnes Share of global wheat production, 2017-2019
74.5
Ukraine; 4%
Canada; 4%
54.4 USA; 7% Other; 25%
Russia; 10%
20.5 22.1
16.3
1.4 4.4 India; 13%
EU; 20%
Rye Oat Sunflower Barley Potatoes Sugar beet Wheat
China; 18%
3. Russia is also one of the leading grain exporters ... 4. … with strong potential for further growth
Share of global wheat exports, 2017-2019 Russia’s wheat export volumes (by crop years), mln tonnes
55
20%
41
15% 36 35
14%
13%
28
10% 24
22
7% 18
Australia Ukraine Canada EU USA Russia 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 Potential
Source: FAOSTAT, US Department of Agriculture, Rosstat, Agroholding STEPPE 21STEPPE: PRESENCE IN HIGH-POTENTIAL SEGMENTS AND VERTICAL
INTEGRATION
84.6%
Sistema PJSFC STEPPE
50.0% 100%
RZ Agro Assets of STEPPE
Sugar and grocery
Field crop production Grain trading Dairy Farming Fruit production
trading
Land bank: Own and third-party 6 dairy farms Orchards: 780 ha Wholesale trade of sugar
grain trading and cereals
o Steppe 560 thsd ha (deep + shallow water) Livestock >16 thsd head
o incl. RZ Agro 110 thsd ha
Production >70 thsd tonnes Production 28 thsd tonnes Sale of sugar and cereals
Export ≈ 2.1 mln tonnes
of milk / year of apples / year under AgroHolding STEPPE
Production ≈ 1.4 mln tonnes
Grain elevators ≈ 0.5 mln Sales volume > 300 thsd
tonnes Yield of ca. 10 tonnes / cow tonnes
per year
Terminal 2 mln tonnes
(in stage of completion)
Steppe AgroHolding is a major diversified player in the Russian agricultural industry, with significant growth and
value creation potential that can be realised through synergies across segments.
22STEPPE: STRATEGY FOR EXPANSION OF LAND HOLDINGS
Expansion of Sistema's land holdings Geographical footprint
thsd ha
Russia
>600
+144 560
Steppe
Steppe +65 +21 +15
Geographical
+178 footprint of
JV
Steppe
RZ Agro
380 401
+38
99
12-13 14-15 2016 2017 2018 2019 2020 09'2020 … 2021E
Highlights Russia's best agricultural regions
Wheat yield, tonnes / ha
- Quality land in the most attractive agricultural regions of Russia
(Krasnodar, Rostov and Stavropol)
Regions of Steppe's presence
- Unique share of land in ownership compared to Russian peers: 60%
- Proximity to sea and river grain terminals 6.0
- Significant potential for increasing production, crop yields and 3.7 3.8
2.7
OIBDA in all M&A deals
- Focus on acquisition of assets at attractive prices vs peers
Russia's average Krasnodar Stavropol Rostov
Source: Rosstat, Agroholding STEPPE 23STEPPE: LAND VALUE GROWTH POTENTIAL IN RUSSIA
Global growth of agricultural land prices Global market
USD thsd / ha 2002 2016
- For the past 15 years, land prices have been growing at a
significant rate.
- A substantial value growth was achieved through the
USD 40 thsd
adoption of advanced agricultural technologies that
+7% +8% +19% +10% +4%
generate higher income per ha.
24.7 - The upward trend is expected to continue due to growing
food consumption and a limited amount of land available.
13.8
10.1 8.9
3.9 6.7 USD 4.5 thsd
1.2 0.8 3.1 3.6
Price range
USA Germany Poland Brazil France Europe
% CAGR’02-16
Growth of average agricultural land prices, Russia1 Russian market
RUB thsd / ha 2012 2016 2020
- Land prices in the southern parts of Russia have grown
substantially in the last 8 years (CAGR’12-20 in the Krasnodar
+19% +10% +11%
region was +19%).
220 - The price of quality land in Krasnodar is currently 3,5-4,0 USD
thsd / ha.
125 - There is potential for matching the price of comparable assets
85 85 in Europe (USD 12-15 thsd / ha).
75 65
55
40 38 - Long-term growth can be driven either by an improved
system of subsidies and infrastructure or a better economic
environment.
Краснодар
Krasnodar Ставрополь
Stavropol Ростов
Rostov
% CAGR’12-20
1All data is shown for land with above-average crop yields.
Source: Savills World Research 24STEPPE: GROWTH IN THE DAIRY FARMING SEGMENT
Russia's milk market Cow numbers and milk yield per cow in Russia
mln tonnes Milking cows herd
Potential growth
Yeild / cow in agri enterprises, tn / cow 6.5
Milk import Milk production 5.9
up to 38-40
7,0
16,0
5.4 5.7
mln tonnes 14,0
4.8 5.1 6,0
4.3 4.5 4.5
9.4 9.2 7.9 7.0 6.6 6.4 6.4 12,0
5,0
10,0
4,0
8,0
3,0
30.5 30.8 30.8 30.8 30.6 31.3
6,0
30.2 9.0 8.9 8.4 8.3 8.1
2,0
4,0
8.0 8.0 7.9 8.0
1,0
2,0
0,0 -
2013 2014 2015 2016 2017 2018 2019 … 2020
2025-30 2011 2012 2013 2014 2015 2016 2017 2018 2019
- Consumption of milk & dairy products: ~37.7 mln t (share import =17%) - The downward trend in population of milk cows is explained by a
reduction in the number of individual farmers and the closure of
- The milk output has remained the same: ~ 31 mln t in the last 5 years
inefficient producers, which is partially offset by increased milk yields.
Share of market-grade milk in Russia Dairy farming results at Steppe AgroHolding
Milk cows, thsd head
Milk yield per cow, thsd l/year
Commissioning of new farms
9,000 9,000 9,000
30% Milk suitable for processing
10 10,60
7,172
9
10,40
8
10,20
3,883 4,908 10.3 10.4
7
Low quality milk 6
4,230
10,00
10.1
5 9,80
4
9.8
9,60
70% 3
9.8 9.7 9,40
9.5
2
9,20
1
0 9,00
2016 2017 2018 2019 2020 2021 2022
- The share of market-grade milk in Russia's total milk output is 70%, which - As of today, STEPPE’s production efficiency exceeds its competitors by
leads to a shortage of quality milk for processing => milk import. 47% on average.
- Import substitution potential: Ongoing sector consolidation and the - It would take 4-5 years of optimisation and efficiency enhancement
deficit of raw milk create favourable conditions for developing modern measures for competitors to reach the current operational results of
high-quality dairy farms. STEPPE.
Source: Fedstat, Agroholding STEPPE 25STEPPE: IMPRESSIVE REVENUE AND OIBDA GROWTH AS BUSINESS
EXPANDS
RUB bln
1,2 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue, RUB bln
Rev enue 14,7 9,9 48,4% 22,3 19,1 16,7%
OIBDA 2,2 1,2 80,9% 4,9 3,6 37,3%
+48.4%
OIBDA margin 14,9% 12,3% 2,7 п.п. 21,9% 18,7% 3,3 п.п.
Net profit / (loss) (0,2) (0,0) n/a 1,6 0,7 124,1% 14.7
Net debt 23,1 21,4 8,1% 23,1 21,4 8,1% 9.9
Capex 0,9 0,5 97,8% 1,8 1,2 53,4%
Revenue significantly increased year-on-year in 3Q 2020 primarily due to:
3Q 2019 3Q 2020
- increased revenues in the Crop Production and Agrotrading segments through increased sales
volumes of agricultural products and higher grain prices;
- positive dynamics in the Dairy Farming segment as a result of higher production volumes due to
an increase in the number of highly productive lactating cows and improved efficiency of dairy OIBDA, RUB bln
farms;
- Increase in sales volume and price of sugar. +80.9%
OIBDA significantly increased year-on-year in 3Q 2020 due to an effective sales strategy for own 2.2
agricultural products, improved operating efficiency in the Agrotrading segment and successful
implementation of the strategy of time arbitrage in the Sugar and Grocery Product Trading 1.2
segment.
amounted to RUB 0.9 bln in 3Q 2020. The bulk of capital investments were made to renew the 3Q 2019 3Q 2020
CAPEX
agricultural machinery fleet, implement projects to build and modernise dairy farms, and buy out
land shares.
Net debt increased year-on-year in 3Q 2020 due to the acquisition of land assets in 1H 2020 and
implementation of the capital investment programme.
1 Steppe results are presented net of results of AGK Yuzhny due to its divestiture in May 2020. Results for 3Q 2019 and 9M 2019 have been revised to reflect the results of this reclassification. OIBDA, OIBDA margin,
operating profit and net loss of Steppe for 3Q 2020 and 9M 2020 reflect the adjustment as a result of 3Q 2020 review of fair value allocation of assets disposed and purchased as part of the buy and sell
transactions in 1H 2020.
2 RZ Agro is accounted for as an investment in a joint venture in Agroholding Steppe’s IFRS financial statements.
26STEPPE: INCREASE IN SALES PRICES AND FOCUS ON IMPROVING
OPERATING EFFICIENCY
Trends in key segments
Gross harvest, thsd tonnes
Field Crops +6.8%
Land bank
560 thsd hectares As of 30 September 2020, the gross harvest of Steppe amounted to
1,238,000 tonnes (+6.8% year-on-year). Despite difficult weather
1 042 1 159 1 238
conditions, Steppe delivered high volume of harvest.
In 3Q 2020, the average export price of wheat sales increased year-
Orchards on-year by 20.3%.
780 hectares 9M 2018 9M 2019 9M 2020
Orchards area
Milk production, thsd tonnes
28.3 28.4 27.4
The Dairy Farming segment reports stable growth: in 3Q 2020, gross
milk yield amounted to nearly 18,000 tonnes 17.2 18.0
Dairy Farming 14.0
Lactating cows 6,500 cows (+28.0% year-on-year), while lactating cow productivity grew by 4.4%
year-on-year. The lactating herd reached 6,526 cows at the end of
the reporting period.
3Q 2019 2Q 2020 3Q 2020
Production Price per litre, RUB
Sales volumes, thsd tonnes
Sales volumes in the Agrotrading segment for 9M 2020 amounted to +15.1%
Agrotrading 817,000 tonnes (+15.1% year-on-year). Higher wheat sale prices and a
Sales volumes of 817 thsd tonnes trading strategy focused on the improvement of operating efficiency 710 817
wheat helped to increase OIBDA in the segment.
9М 2019 9М 2020
Sales volumes, thsd tonnes
Sales volumes in the Sugar and Grocery Trading segment for 9M 2020
amounted to 244,000 tonnes (+7.4% year on year). Higher margin +7.4%
Sugar & Grocery
Product Trading 244 thsd tonnes transactions were undertaken as part of a time arbitrage strategy
227 244
Sales volumes that facilitated OIBDA growth in the segment. In 3Q 2020, the sale
price of sugar increased by 32.2% year-on-year.
9М 2019 9М 2020
27MEDSI: THE LEADING PRIVATE HEALTHCARE GROUP IN RUSSIA
Highlights
- Leading provider of private healthcare in Russia, offering a
complete range of services for children and adults Services provided 17.3 mln Patient visits 9.6 mln
annually annually
o Medsi is #1 in Russia
o One of Russia’s most recognisable healthcare brands
o 20+ yeas of successful operations
Diversified infrastructure: 49 medical facilities, incl. 39 clinics, 5 Physicians
-
clinical and diagnostic centers, 2 hospitals, 3 wellness centers and
Area of facilities 242 thsd m2 employed
6.2 thsd
sanatoriums
- Fast-growing business with an extensive investment programme
underway
х – # of medical facilities
Key performance indicators
RUB bln
St. Petersburg
Revenues Adj. OIBDA Adj. Net profit
2
25.8% 64.3% 175.3% Bryansk
1 32 Moscow Nyagan
1
5.9 2.9 4
25.8
6 1
17.7 3.6 Izhevsk Perm
1.1 Nizhnevartovsk
1
2018 2019 2018 2019 2018 2019
Volgograd
1
Barnaul
28MEDSI: STRUCTURAL CHANGES UNDERPIN THE A STEADY GROWTH OF
RUSSIA’S PRIVATE HEALTHCARE MARKET IN RUSSIA
1. The Russian market is experiencing robust growth… 2. …with significant headroom for further expansion…
Healthcare services market breakdown (RUB bln)1 Healthcare spend (% of GDP)2
11.2% CAGR’16-20 17.0%
Average: 8.8% 11.2% 11.7%
10.3%
3 129
2 461 2 710 6.3%
1 951 2 033 5.0% 5.4%
3.6%
140 152 181 184
138 543
396 436 475 504
177 191 202 207 215
2016 2017 2018 2019 2020F India China Russia Poland UK France Germany USA
Grey market Out-of-pocket VHI State
3. …and great potential for market consolidation… 4. …where Medsi is focused on the most attractive segment
Private healthcare sector, 2019 (Out-of-pocket and VHI) Industry revenue breakdown by segments, 2019
by revenues by revenues
CAGR ‘16-19: 9.5% 8.4%
in Russia in Moscow
Top 10 Top 10
Russia 207 RUB
2 710 181 504
3.6 tln
13%
38%
RUB RUB CAGR ‘16-19: 3.7% 6.3%
685 bln 215 bln RUB
Moscow 18 360 106 109
592 bln
Grey market State VHI Out-of-pocket
1 Voluntaryhealth insurance (VHI), mandatory health insurance (MHI), Source: BusinesStat.
2 Both
government and voluntary, including spending on medical services and goods (pharma).
Source: For OECD – OECD (2019 or latest available), BusinesStat 29MEDSI: GROWTH IN FINANCIAL RESULTS ON THE BACK OF
DEFERRED DEMAND FOR MEDICAL SERVICES
RUB bln 3Q 2020 3Q 2019 YoY 9M 2019 9M 2019 9M 2019 Revenue by clients,
Rev enue 6,7 5,4 25,4% 17,2 16,1 7,2% 3Q 2020
1
Adj. OIBDA 1,8 1,5 21,0% 4,1 4,0 1,8% 5% 2%
Adj. OIBDA margin1 27,2% 28,2% (1,0) п.п. 23,8% 25,1% (1,3) п.п. Insurance
Adj. net profit 1 1,0 0,8 23,5% 1,6 1,9 (15,4%)
Individuals
Net debt 3,0 2,7 14,5% 3,0 2,7 14,5%
35%
Capex2 1,3 1,1 13,1% 3,7 2,9 26,2% Corporate
Patient v isits, thsd 2 177 2 330 (6,6%) 5 396 7 016 (23,1%) 58%
Serv ices prov ided, thsd 4 339 4 165 4,2% 10 644 12 731 (16,4%) Other
Av erage ticket, thsd RUB 3,1 2,3 34,1% 3,2 2,3 39,4%
Revenue increased year-on-year in 3Q 2020 due to the deferred demand for medical services following the Revenue by assets,
easing of COVID-19 restrictions introduced in 2Q 2020, the return to routine medical care services, 3Q 2020
revenues generated from repurposing the hospital in Otradnoe as an in-patient infectious diseases' unit,
as well as increased demand for COVID-19 testing and the development of home care and 7%
telemedical support services. Clinics*
33%
Adj. grew year-on-year in 3Q 2020 on the back of the revenue growth. Adj. net profit year-on-year was Hospitals
impacted by the adj. OIBDA dynamics. 36%
OIBDA CDC**
Net debt increased year-on-year in 3Q 2020 due to the drawing down of credit lines to finance CAPEX
24%
Other
programmes, including the construction of a medical centre on Michurinsky Prospekt in Moscow. Debt
to OIBDA LTM remains at a comfortable level of 0.7x.
* Primary Care Clinics
Key Due to the recent new wave of COVID-19 cases, at the end of 3Q 2020 the Hospital in Otradnoe again ** Clinical Diagnostics Centre
switched to providing in-patient infectious disease services focused on screening and the treatment of
highlights patients with COVID-19.
The Clinical Diagnostics Centre (CDC) on Belorusskaya opened a Centre for diagnostics and the
treatment of health complications caused by COVID-19.
The construction of a new multifunctional centre on Michurinsky Prospekt, with more than 34,000 sq m of
space, is nearing completion, with the opening planned for 1Q 2021. The medical centre will include a
CDC for children and adults, a daytime in-patient clinic and a 24-hour in-patient clinic with a centre for
high-tech surgery.
In September and October 2020, Medsi opened a CDC in Maryino with a total area of 4,400 sq m, and
two Smart 500 clinics on Poletayev Street and Aviatsionnaya Street in Moscow.
The number of downloads of the SmartMed telemedical application and the number of users is growing
rapidly. The proportion of appointments made through the application has reached 35-40% of total
bookings. A new version of the application has been released that now enables in-app payments.
1 Adjustments for accruals related to the LTI programme, the effect of clinic acquisitions in Izhevsk.
2 Сapex excluding M&A. 30MEDSI: INCREASE IN THE AVERAGE CHEQUE DUE TO
DIAGNOSTICS AND THE TREATMENT OF COVID-19
Floor space Utilisation, clinics3 Utilisation, hospitals4
Number of
facilities1 49 thsd m2 % %
-8.4% +2 p.p. +11 p.p.
235.7 45% 47% 105%
215.7 94%
Number of
patient
2.2 mln
3Q 2019 3Q 2020 3Q 2019 3Q 2020 3Q 2019 3Q 2020
visits2
Patient visits Services provided Average cheque
mln mln thsd RUB
-6.6% -4.2% +34.6%
Number of
physicians 4,000
2.3 2.2 4.2 4.3
3.1
2.3
3Q 2019 3Q 2020 3Q 2019 3Q 2020 3Q 2019 3Q 2020
Capacity2 5 mln visits
- The increase in utilisation was due to deferred demand, changes in seasonal pattern, and the
COVID-19 pandemic.
- The decrease in floor space resulted from the non-core assets optimisation programme.
- The average cheque grew due to the rising share of cost-intensive services in the outpatient
coronavirus diagnostics segment, and the high average cost of a COVID-19 treatment at the
hospital in Otradnoe.
1 Metrics in the table and hereafter are presented as of 30 September 2020.
2 These metrics are for 3Q 2020 with capacity calculated as the number of possible out-patient visits at Medsi facilities, and the visits as the actual number of patient visits for the period.
3Outpatient clinics in Moscow.
4 Utilisation accounts for multiple use of one in-patient bed in daytime in-patient facilities .
31OZON : OUTSTANDING GMV GROWTH, EXPANSION OF LOGISTICS
1
INFRASTRUCTURE AND MARKETPLACE DEVELOPMENT
Key highlights: GMV, incl. services2
RUB bln
- The Company retained a triple-digit GMV growth rate year-on-year in 3Q 2020 on the back of an increased
+188%
number of marketplace sellers, expansion of the assortment and last mile delivery network. 100,0
+127%
+115%
95,0
90,0
170%
85,0
80,0
Throughout 3Q 2020, Ozon worked to expand its logistics infrastructure in order to provide faster delivery to
75,0
-
70,0
120%
45.8 44.2
65,0
60,0
customers and make a wider range of products available in remote cities. The Company commissioned
55,0
31.6
70%
50,0
45,0
40,0
new fulfilment-centres in Saint Petersburg and Rostov-on-Don with a total floor area of more than 18,000
35,0 20%
30,0
25,0
20,0
-30%
and 22,000 sqm respectively3.
15,0
10,0
5,0
0,0 -80%
1Q 2020 2Q 2020 3Q 2020
- In August 2020, Ozon signed an agreement with Orientir development company to construct a logistics GMV, incl. services
centre with a floor area of over 150,000 sqm in the Moscow region. Its first phase is expected to launch in Growth year-on-year
2021.
Number of orders4,
- The Company continues to develop its marketplace platform. As of 30 September 2020, more than 18,000 mln
active sellers were registered on the platform.
- Ozon is developing its financial services ecosystem. As of 30 September 2020, approximately 260,000 20,0
16.6
13.1 14.6
OZON.Cards were activated. Card holders made an average of approximately three orders per month 15,0
over the first nine months of 2020, which is approximately 1.6 times more than an average number of orders 10,0
made by customers that made at least one order per month over the same period in 2020. 5,0
0,0
- In November 2020, Ozon conducted an initial public offering of its American Depository Shares (ADSs) on 1Q 2020 2Q 2020 3Q 2020
NASDAQ, raising proceeds of USD 1,200 mln, including the underwriters’ overallotment option and the
concurrent private placement, and net of underwriter commissions. OZON also obtained listing of the ADSs Number of active sellers5,
on the Moscow Exchange. thsd
45,0 80%
47% 51%
70%
40,0
60%
33%
35,0
50%
30,0
18.1
40%
25,0
13.5
30%
20,0
9.2
20%
15,0
10%
10,0
0%
5,0
-10%
0,0 -20%
1Q 2020 2Q 2020 3Q 2020
1 Ozon’s financial results are not consolidated in the financial statements of Sistema PJSFC.
2 GMV incl. services (gross merchandise value including revenue from services) comprises the total value of orders processed through Ozon’s platform, as well as Active sellers
revenue from services to buyers and sellers, such as delivery, advertising and other services rendered by Ozon.ru operating segment. GMV incl. services is inclusive Share of Marketplace GMV, %
of value added taxes, net of discounts, returns and cancellations.
3 Footprint area
4 Number of orders is the total number of orders delivered in a given period, net of returns and cancellations
5 Number of active sellers is the number of sellers that sold at least one order on the OZON.ru marketplace over the previous 12 months.
32ETALON GROUP: STRONG DYNAMICS OF OPERATING RESULTS
AND AMBITIOUS STRATEGIC GOALS
Strategic goals to be achieved by 2024 Operating results
of the Group
Operational goals: Financial goals:
New sales, thsd м2
- Easy to scale business model through a transition to - Double-digit sales and revenue growth rates
digital end-to-end architecture
- Gross profit margin before purchase price +10.0%
- Leadership through partnerships: less capital-intensive allocation (PPA) of assets of more than 35%
approach to creation of digital infrastructure 137.0 150.0
- SG&A cost-to-revenue ratio of less than 10%
- Long-term focus on landbank replenishment through
- Guaranteed minimum dividend payment of at
acquisition of unzoned land plots
least RUB 12/GDR with the possibility of the upside
- Leadership in cost efficiency and the speed of project as net profit increases
implementation by standardising the product line and
3Q 2019 3Q 2020
integrating new technologies
- Industry-leading customer experience through the
development of additional services and improved New sales, RUB bln
customer communications
+40.3%
Key highlights
- Thanks to a balanced product offering, the company’s efforts to improve sales efficiency, an updated subsidised 24.0
mortgage programme, and the growing investment demand for real estate, Etalon Group delivered strong 17.1
results for the first 10 months of 2020.
- Sales in October 2020: 60.7 thsd m2 worth RUB 9.8 bln – record-setting metrics in RUB equivalent
- Average price for apartments in October: RUB 191.6 thsd / m2 – record-setting metrics 3Q 2019 3Q 2020
- Average downpayment amount: 93% - one of the highest metrics in the history of the Group
Agreement on the ZIL-YUG project Cash proceeds, RUB bln
- In 3Q 2020, Etalon Group reached an agreement with Moscow authorities on the final conditions of the Zil-YUG +31.8%
project implementation, the largest complex development project in the Moscow region. According to the
21.2
agreement, the company shall pay RUB 32.2 bln in installments till 2024.
16.1
- 1.2 mln m2 – total project area
- 1Q 2021 – planned launch of the sales
- 12 years – project implementation period
- RUB 230 thsd/ m2 – starting price 3Q 2019 3Q 2020
331
PHARMA ASSETS (BINNOPHARM GROUP ):
INCREASE IN SALES ACROSS ALL SEGMENTS
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue, RUB bln
Rev enue 5,4 4,2 26,4% 14,8 12,1 21,9%
+26.4%
OIBDA 1,5 0,9 59,9% 3,2 2,7 18,9%
OIBDA margin 28,2% 22,3% 5,9 p.p. 21,9% 22,5% (0,6) p.p. 5.4
Net profit 0,6 0,1 643,0% 1,0 0,5 78,5% 4.2
Net debt 9,9 11,3 (12,4%) 9,9 11,3 (12,4%)
- The joint Binnopharm Group holding includes five production sites across JSC Alium (formerly named Obolenskoe,
Serpukhov district of the Moscow region), JSC Binnopharm (2 sites: Zelenograd and Krasnogorsk), JSC Sintez (Kurgan),
3Q 2019 3Q 2020
and JSC Biocom (Stavropol).
- The holding operates a portfolio of more than 450 products, the largest among Russian drug manufacturers.
- In October 2020, Binnopharm Group announced its strategy to significantly increase the scale of the business. The main
OIBDA, RUB bln
drivers of further growth will be the diversification of sales channels, new product development and updating the
portfolio of medical products. +59.9%
- The CEO of Binnopharm Group is Rustem Muratov.
1.5
Revenue in 3Q 2020 increased by 26% year-on-year on the back of increased sales across all channels. Sales in
0.9
the tender channel increased by 117% year-on-year, in part due to increased sales of antibiotics and
drugs used to treat COVID-19. Export growth amounted to 55% year-on-year with sales growth in all
foreign markets. In the retail segment, sales increased by 15% year-on-year.
3Q 2019 3Q 2020
OIBDA in 3Q 2020 significantly increased year-on-year following revenue growth, mainly due to an increased
Production of
share of high-margin drugs sales in revenue and cost control.
pharmaceutical products,
mln units
Net profit in 3Q 2020 increased year-on-year primarily due to OIBDA growth, as well as lower interest expenses.
Alium Sintez
+11.3% +5.4%
Net debt in 3Q 2020 decreased year-on-year due to positive cash flow and effective working capital
management.
Key Since August 2020, production of the "Gam-COVID-VAK" (Sputnik V) COVID-19 vaccine, developed at
the Gamaleya Scientific Research Institute of Epidemiology and Microbiology, has been underway at 85
highlights the Binnopharm plant in Zelenograd. The plant has the capacity to produce approximately 1.5 million
81
doses of the vaccine per year, with planned future upgrades designed to increase production volumes.
16 18
3Q 2019 3Q 2020
1 Financial results of Binnopharm Group are presented to reflect the combination of the financial results of JSC Alium and JSC Sintez based on management accounts.
Financial results of Binnopharm Group are not consolidated in the financial statement of Sistema PJSFC. The data shows 100% net profit. 34POWER GRIDS (BPGC) AND HIGH-TECH (RTI)
BPGC
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue, RUB bln
Rev enue 4,3 5,0 (14,1%) 14,7 14,9 (1,6%)
OIBDA 0,5 1,7 (70,5%) 3,7 4,5 (18,8%) -1.6%
OIBDA margin 12,0% 35,0% (23,0) p.p. 24,9% 30,2% (5,3) p.p.
Net profit / (loss) (0,1) 0,9 n/a 1,2 2,0 (41,4%) 14.9
Capex 1,0 0,9 11,7% 2,5 2,5 (0,9%)
14.7
Revenue decreased year-on-year in 3Q 2020 due to a reduction in capacity and net electricity supply. This resulted from a
decrease in energy consumption in the oil and gas sector following the OPEC+ agreement, and reduced
economic activity in the region amid the COVID-19 pandemic.
OIBDA and OIBDA declined year-on-year in 3Q 2020 on the back of the decrease in revenue, and due to an increase in costs, 9М 2019 9М 2020
including wage indexation, repair costs and services provided to Federal Grid Company (FGC). The decrease was
Net profit
also significantly affected by creating provisions for accounts receivable for a number of counterparties. OIBDA
dynamics were also affected by the restoration of previously accrued reserve on unsettled contractual
arrangements with FGC in 3Q 2019. Net loss in 3Q 2020, as opposed to net profit in 3Q 2019, was driven by OIBDA
dynamics and a decline in finance income.
Key In October 2020, Sergey Gurin was appointed CEO of BPCG. Sergey was Director for Human Resources and
highlights Administrative Affairs at BPGC from 2012.
RTI
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Revenue, RUB bln
Rev enue 5,2 5,4 (3,5%) 13,7 13,9 (1,7%)
1
Adj. OIBDA 0,1 1,3 (95,2%) (0,1) 1,6 n/a
-3.5%
Adj. OIBDA margin 1,2% 24,3% (23,0) p.p. n/a 11,3% n/a
Adj. net profit / (loss) (1,1) 0,2 n/a (3,6) 1,7 n/a
Net debt 20,2 20,1 0,4% 20,2 20,1 0,4% 5.4 5.2
Revenue decreased year-on-year in 3Q 2020 due to a number of new state procurement contracts by RTI Group companies
being postponed.
Adj. OIBDA Adj. OIBDA decreased year-on-year in 3Q 2020 mainly due to the financial results of Element LLC, a joint venture
with the Rostec State Corporation in microelectronics, and the effect of a high base: in 3Q 2019, RTI Group 3Q 2019 3Q 2020
and margin companies performed a significant amount of work on a number of projects, which drove a higher adj. OIBDA
margin.
Adj. net loss Adj. net loss in 3Q 2020 relative to net profit in 3Q 2019 was due to OIBDA dynamics. Net debt remained largely
unchanged year-on-year, amounting to RUB 20.2 bln. In addition, as of the end of 3Q 2020, RTI's accounts include
and Net RUB 3.1 bln of funds earmarked for work under state defence contracts, which are not included in the calculation
debt of net debt.
1Adj. OIBDA for 3Q 2020 includes net loss of Element LLC which is accounted for using the equity method of accounting (classified as investments in associates). Excluding the results of Element LLC, adj. OIBDA
of RTI in 3Q 2020 amounted to RUB 0.3 billion. 35HOSPITALITY (СOSMOS HOTEL GROUP) & RENTAL ASSETS (BUSINESS NEDVIZHIMOST)
Hospitality assets1
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY RevPar3, RUB thsd
Rev enue 0,9 1,5 (41,8%) 1,9 3,8 (50,3%)
Adj. OIBDA2 0,3 0,6 (53,4%) 0,1 1,1 (89,5%)
1.6
Adj. OIBDA margin
2
31,7% 39,6% (7,9) п.п. 5,9% 28,0% (22,1) п.п. Hotel Cosmos
ГК "Космос"
2
0.4
Adj. net profit / (loss) (0,0) 0,2 n/a (0,8) (0,2) n/a
Net debt 4,1 3,6 13,2% 4,1 3,6 13,2% 2.7
Room capacity 4 132 4 132 0,0% 4 132 4 132 РоссийскиеRussia
0,0% отели
2.4
Revenue decreased year-on-year due to a sharp drop in occupancy caused by the COVID-19 pandemic.
23.3
Adj. OIBDA Adjusted OIBDA decreased year-on-year on the back of the decline in revenue, while hotels maintained an Abroad
Зарубежные отели
austerity regime to minimise losses. Adj. net loss was due to the negative OIBDA dynamics. The share of revenue 13.7
and Net
from hotels outside Russia in 3Q 2020 fell to 23.3% (from 28.8% in 3Q 2019).
loss
3Q 2019 3Q 2020
Key In 3Q 2020, ADR4 for the Group's hotel portfolio increased year-on-year from RUB 4,200 to RUB 4,600 (+ 8%) primarily
indicators due to foreign hotels (Euro +14%) and the Cosmos Collection Izumrudny Les and Cosmos Collection Altay Resort
hotels (RevPAR growth of 17% due to high demand for hotels in this segment).
RevPAR3 of the hotel portfolio decreased from RUB 2,900 to RUB 1,900 against the backdrop of a collapse in
occupancy. The average occupancy fell by 34 p.p. to 40% due to a significant drop in demand for hotel services.
Business Nedvizhimost
RUB bln 3Q 2020 3Q 2019 YoY 9M 2020 9M 2019 YoY Portfolio of assets under
Rev enue 2,1 2,4 (9,6%) 4,1 4,8 (14,9%) ownership, 2020
OIBDA 0,6 1,7 (62,9%) 1,3 3,4 (61,7%)
OIBDA margin 29,7% 72,3% (42,6) п.п. 32,0% 71,2% (39,1) п.п.
Net profit 0,5 1,2 (59,8%) 0,7 2,2 (66,5%)
01.сен.20
30.09 12% 88%
Net debt/(cash position) 2,0 (0,6) n/a 2,0 (0,6) n/a
Revenue in 3Q 2020, revenue from rental assets decreased year-on-year due to the completion of the 2019 commercial real
estate sales programme. 30.06 11%
01.июн.20 89%
OIBDA and OIBDA and OIBDA margin decreased year-on-year due to a change in revenue structure in favour of lower margin
net profit rental revenue. Net profit dynamics were impacted by a decline in OIBDA. Country property
Commercial property
Key In August 2020, the Company successfully placed the debut bond issue for RUB 4 billion at a 7.9% coupon rate with
a 4-year put option. Funds from the placement are being used to refinance the current debt portfolio and repay
highlights non-current assets liabilities to MGTS, and for investment projects. Expert RA rating agency assigned Business
Nedvizhimost a ruA- rating with a stable forecast.
In September 2020, Artemy Marinin was appointed CEO of Business Nedvizhimost. Mr Marinin has considerable
professional experience in real estate and construction.
1
Based on management accounts
2
Adjusted in 1Q 2020 as a result of a one-time write-off due to the COVID-19 pandemic affecting the financial performance of the international hotels.
3 4
Revenue per available room per day Average daily rate 36You can also read
