Etalon Group Etalon-LenSpetsSMU Group Etalon

Founded in 1987, the Etalon Group focuses on residential real estate for the middle class in Moscow, the Moscow Region and St. Petersburg. Since its creation by 2021, the group has commissioned more than 7.5 million square meters. m

Performance indicators

The company's revenue in 2020 amounted to 78.7 billion rubles, EBITDA - 12.6 billion rubles.

2021: Increase in real estate sales by 6%, up to 84.4 billion rubles

In 2021, Etalon sold real estate for a record 84.4 billion rubles, which is 6% more than a year earlier. Cash receipts to the developer increased by 3% and amounted to 84.1 billion rubles. The group released its operational results on January 24, 2022.

Etalon reported that the average cost per square meter of real estate sold by the group in 2021 increased by 27% compared to 2020 and reached 189 thousand rubles. The average price per square meter of residential real estate increased by 34%, to 238.7 thousand rubles.

Developer "Etalon" increased real estate sales by only 6%

Most of the group's sales in 2021 - almost 30% - fell in the fourth quarter. Compared to the same period in 2020, new sales fell by 23% and 6%, to 129.07 thousand square meters. m and 24.86 billion rubles, respectively.

We managed to reduce net corporate debt to 5.1 billion rubles, while maintaining the ratio of this indicator to EBITDA before the distribution of the cost of acquisition of assets (PPA) at only 0.2x with a comfortable value of 2-3. The net monetary position of the Etalon group at the project level is 23.4 billion rubles, - the words of the company's financial director Ilya Kosolapov are quoted in it.

The press release also said that in 2021, the developer increased its portfolio by almost 2 million square meters, doubling its presence in the Russian regions.

By the end of 2021, the assets of the Etalon group included 20 projects in the design and construction stage, unsold real estate in completed complexes and commercial real estate with a net realizable area of ​ ​ 2.8 million square meters. m, as well as a production unit. In 2021, the developer entered into new contracts for the sale of real estate with a total area of ​ ​ 446 thousand square meters. according to Colliers International, the value of Etalon's assets by the beginning of 2021 was 204 billion rubles.^[1]

History

2022

AFK Sistema increased its stake in Etalon Group to 48.8% for 4.5 billion rubles

In early May 2022, an agreement was concluded, under the terms of which AFK Sistema increased its effective stake in the Etalon Group to 48.8%. Sistema Finance JSC, which is part of the state corporation, bought 72,854,619 global depositary receipts (GDR) of the developer for 4.5 billion rubles, the AFC press service said.

They also noted that the transaction was carried out as a result of the termination of the non-delivery swap agreement in relation to the GDR Etalon Group. This agreement was concluded between AFK Sistema and its financial partner. The reasons for termination of the agreement, like the financial partner of the corporation, are not called in the message. Also, the share owned by AFK Sistema before the transaction concluded in early May 2022 is not indicated.

AFK Sistema increased its stake in the Etalon Group developer to 48.8% for 4.5 billion rubles

The agreement, which is being talked about in AFK Sistema, was concluded with Alfa Bank (AFK took part in the additional issue of Etalon Group for $38.5 million using bank financing through the equity swap tool). Under the terms of the agreement, the bank acquired in total up to 20% of the capital of the Etalon Group. The agreement involved the transfer to a bank of voting, but not property rights to securities (Sistema AFK had the right to receive dividends). The agreement was concluded for a period of 30 months.

In parallel, an option agreement was signed giving the structure of AFK Sistema to Capgrowth the right to redeem all GDRs acquired by Alfa Bank. If Capgrowth did not exercise its call-option, the credit institution would have the right to sell the entire existing package of Etalon Group receipts to a third party, AFK Sistema said.

By May 2022, the Etalon Group is among the top 10 developers in terms of housing construction in Russia. In addition to the construction and sale of housing, the group performs construction work as a contractor.

Purchase of Russian YIT assets for 4.6 billion rubles

On April 1, 2022, the Etalon development group announced the purchase of Russian assets of the Finnish construction company YIT for about 4.6 billion rubles after the latter decided to leave the Russian Federation. According to Kommersant, the deal involves a large discount, given that the estimated value of projects included in its perimeter is 8.4 billion rubles. More details here.

2021

Purchase of 35% of UK construction company QB Technology

On August 16, 2021, it became known about the sale of 35% of QB Technology to the Etalon group. Under the terms of the agreement, the Russian developer will be able to further increase its stake in the British company. This was reported by the press service of AFK Sistema (a major shareholder of the developer). The financial component of the transaction is not disclosed. More details here.

Etalon Group is considering the possibility of buying the property of Elektrozavod in Moscow for housing development

On July 26, 2021, it became known that Etalon Group, the largest shareholder of which is AFK Sistema, announced that it wanted to acquire the property complex of Elektrozavod JSC in Moscow for subsequent redevelopment.

The enterprises are merged into the Elektrozavod Group, which includes capacity for the production of transformer equipment in Moscow and Ufa, service divisions, research and design institutes, an engineering center, as well as land plots in the Elektrozavodskaya metro area in Moscow with an area of ​ ​ 19 hectares.

The Board of Directors of Etalon Group considered the relevant management proposal and decided to create a special committee, since Sistema is one of the parties to the potential transaction.

The committee to consider the transaction included three independent executive directors from the board of directors: Martin Coker, Boris Svetlichny and Marina Ogloblina. The committee will assess the economic feasibility of the project and the conditions for the company's entry^[2] project^[3].

AFK Sistema increased its stake in the company to 29.79%

In 2021, AFK Sistema increased its stake in Etalon to 29.79% due to the acquisition of 4.2% from minority investors, including Baring Vostok funds.

In addition to direct participation in Etalon, Sistema has a call option for the acquisition of shares that Alfa Bank received during the recently placed additional issue of the developer (about 16.7%) as part of the equity swap transaction. As of May 2021, the share in Etalon of the UAE sovereign wealth fund Mubadala is 6.3%, Prosperity Capital - 4.1%, freefloat - 46.7%.

Additional issue of shares for $150.4 million

In the spring of 2021, according to the results of the additional issue, the developer Etalon raised $150.4 million. The additional issue consisted of 88,487,391 shares (30% of capital).

The main shareholder of the company, AFK Sistema, whose structure Capgrowth Investments Limited acquired 22,632,806 shares in proportion to its current stake in Etalon (25.6%) by $38.5 million, took advantage of the pre-emptive right.

2019:5 thousand employees and sales in 58 cities of Russia

The team of Etalon Group has more than 5 thousand employees, and the national sales network of the company covers 58 cities of Russia.

In 2019, Etalon Group acquired a 100% stake in Leader-Invest, one of the largest players in the Moscow residential real estate market in terms of the size of the land bank and the number of projects available for acquisition.

The assets of Etalon Group include 33 projects under design and construction, unsold real estate in completed complexes and commercial real estate with a net realizable area of ​ ​ 3.3 million square meters. m, as well as a production unit. According to Colliers International, the value of the assets of Etalon Group as of December 31, 2019 is 188 billion rubles.

In 2019, the Etalon Group entered into new contracts for the sale of real estate with a total area of ​ ​ 630 thousand square meters. m in the amount of 77,627 million rubles. In 2019, the construction of 622 thousand square meters. m of net sold area.

The Company's revenue in 2019 amounted to a record 84.3 billion rubles, EBITDA - 8.9 billion rubles.

Starting April 20, 2011, global depositary receipts of Etalon Group are traded on the main market of the London Stock Exchange, and from January 31, 2020 they are also included in the First Level quotation list on the Moscow Exchange.

The largest shareholder of Etalon Group is AFK Sistema, a public Russian diversified holding company serving about 150 million consumers in industries such as telecommunications, high technology, banking, retail, timber processing, agriculture, real estate, tourism and medical services.

2017

• Net debt as of December 31, 2017 amounted to 9.7 billion rubles.
• The team of Etalon Group has 5 thousand employees, and the Company's national sales network covers 52 cities of Russia.
• As of December 31, 2017, the assets of Etalon Group included 38 projects with a total available for sale area of 2.82 million square meters. m, as well as a production unit engaged in the construction, decoration and operation of real estate. Knight Frank estimated the Company's assets at 135,197 million rubles.
• In 2017, the Etalon Group entered into new contracts for the sale of real estate with a total area of ​ ​ 512 thousand square meters. m in the amount of 50,240 million rubles. In 2017, the construction of 423 thousand square meters. m of net sold area.
• The Company's revenue in 2017 amounted to RUB 70.6 billion, EBITDA - RUB 13.2 billion.

2012: Top Ten Leaders in Housing Delivery in Russia

At the end of 2012, Etalon Group of Companies is one of the largest companies in the Russian residential real estate market. It occupies a leading position among construction companies in St. Petersburg, is among the top ten leaders in terms of housing delivery in Russia, and also actively increases market share in Moscow and the Moscow region.

As of December 31, 2012, the Group's portfolio includes 35 development projects in St. Petersburg, Moscow and the Moscow Region, the total area planned for implementation is about 4 million square meters. m An important area of ​ ​ activity is industrial construction: the Group's companies took part in the construction of the Northwest CHPP, the reconstruction of the Admiralty Shipyards workshops, the construction of Nissan, General Motors plants, and other large industrial facilities.

Since 2006, the largest rating agency Standard & Poor's has regularly confirmed the rating of CJSC SSMO LenSpetsSMU at the level of "B," the forecast is "stable." In 2012, the forecast was raised to "positive."

2011

Starting April 20, 2011, global depositary receipts of Etalon Group are traded on the main market of the London Stock Exchange.

2008: Baring Vostok became a minority shareholder of the company with a 15% stake

In 2008, implementing a strategy to develop and increase the company's capitalization, Etalon Group attracted international financial investor Baring Vostok. The agreement was signed in January, the transaction was completed in March 2008. As a result, Baring Vostok became a minority partner with a 15% share in equity. The world-famous financial investor has become a long-term strategic partner of the largest construction association of the North-West. Access to international capital markets and new investments will contribute to the further development of the Group of Companies and the implementation of large development projects

2009 - 2010

In March 2009, LenSpetsSMU credit note holders approved a decision to change CLN release parameters. LenSpetsSMU reached an agreement to cancel the offer in April 2009, extend obligations until August 2010 and soften compliance with financial covenants. The Borrower also received the right to prepay credit notes, which made this financial instrument more flexible. For its part, LenSpetsSMU agreed to increase the rate to 12% per annum and establish a depreciation repayment scheme. Changing the parameters of credit notes did not require LenSpetsSMU to provide any collateral, sale of shares or warrants. As a result, today LenSpetsSMU is the company that has the lowest debt burden among all public construction companies in Russia, both in relative and absolute terms.

2011

In 2011, the Etalon Group of Companies successfully implemented the initial public offering (IPO) of global depositary receipts (GDR) and listing on the London Stock Exchange. In total, during the IPO, the Group raised more than US $500 million, most of which was aimed at acquiring new and developing existing projects in St. Petersburg, Moscow and the Moscow Region.

2007

On April 26, 2007, the Group placed Eurobonds of $100 million. The maturity date is April 26, 2012. Offer date (put option) - April 26, 2009. In total, during the IPO, the Group raised more than US $500 million, most of which was aimed at acquiring new and developing existing projects in St. Petersburg, Moscow and the Moscow Region.

2006

In 2006, LenSpetsSMU became the first Russian construction company to receive a credit rating from the largest and most conservative international rating agency Standard & Poor's. In the future, the agency has repeatedly confirmed the rating of the company.

2001

Thus, the Group has historically grown as a vertically integrated structure, including companies performing all stages of the investment and construction process. In 2001, with the formation of the management company Etalon, the structure acquired a completed form.

1991 - 1997

In 1991, the department separated from the association and was reorganized into LenSpetsSMU PKP, which, in turn, in 1995 became the LenSpetsSMU Specialized Construction and Installation Association Closed Joint-Stock Company. Subsidiaries began to form around it in 1997, each of which specialized in performing separate construction and production work.

1987: Creation of LenSpetsPRSU

The history of Etalon Group begins with the Soyuzelectronstroy association, in which in 1987 the Leningrad Specialized Repair and Construction Department was formed - LenSpetsRSU, which a year later changed its name to LenSpetsSMU.

Notes