Selectel selectel

Thanks to different categories of reliability of data centers (from Tier 1 to Tier 3), the company can offer the consumer a flexible pricing system depending on its needs and capabilities. All data centers are combined into a common data network, which is built on the basis of its own optical communication lines, protected in the main sections.

Services

Performance indicators

2023: Selectel's 2023 revenue up 26%

Operator cloud services Selectel released 2023 financial results according to the standard. IFRS Its revenue for the reporting period amounted to 10.2 billion (rubles an increase of 26% over the year), adjusted - EBITDA 5.7 billion rubles (an increase of 35%), and net profit - 2.8 billion rubles (an increase of two times). At the same time, over the past year, the company's net debt increased from 6.8 billion rubles in 2022 to 8.1 billion rubles, but the ratio of debt to EBITDA decreased from 1.6 to 1.4, respectively.

The company uses bonds with a maturity of 3 years as borrowed funds. The first issue was in February 2021 for 3 billion rubles at 8.5% per annum. The issue was repaid in full in February 2024, which turned out to be more profitable for the company than a loan at modern bank rates. Two more packages of bonds have already been issued: in November 2022 at 11.5% per annum and in August 2023 at 13.3% - both 3 billion rubles for three years.

Now there is a collection of applications for the fourth package of bonds for 3 billion rubles for a period of 2 years for the investment program and the construction of a new data center. This package of papers is scheduled to be released in April 2024. Bonds of all issues are available on the Moscow Exchange (MOEX). According to Vladimir Dergachev, operating director of Selectel, the company does not plan an IPO in the near future, but is studying the experience of other IT market participants.

Selectel received its main income from private cloud services based on dedicated servers, which brought the company 6 billion rubles (58% of revenue). For these services, the growth was 25% compared to last year, 2022. The largest revenue growth was in public and private clouds - 35%. These services brought the operator 2.7 billion rubles, which amounted to 26% of revenues.

Selectel's spending also rose. For example, the salary of employees increased from 1.55 billion rubles in 2022 to 1.97 billion in 2023, and advertising expenses - from 172.2 million to 228.2 million.

According to analysts at iKS-Consulting, the total volume of the Russian cloud infrastructure services market in 2023 amounted to about 121.4 billion rubles. At the same time, in the segment of IaaS services, analysts gave Selectel third place after Rostelecom and Cloud.ru with a share of 8.5%. The operator has a very diversified customer base - the top 5 customers provide only 13% of revenue, which ensures its further sustainable development.

History

2024

Acquisition of 100% of the Unified Network (brands Servers.ru, Exepto.ru and Fozzy.ru)

Selectel, an independent, provider IT infrastructures player in the allocated market, servers in Russia on December 16, 2024 announced TAdviser the acquisition of 100% of LLC "," Single network operating under brands, Servers.ru Exepto.ru and Fozzy.ru. The amount of the transaction was not disclosed. More. here

Closing of bid book as part of offering of fifth bond issue

Selectel on November 29, 2024 announced the closure of the application book as part of the placement of the fifth issue of bonds.

The volume of output amounted to 4 billion rubles with a circulation period of 2.5 years. The variable coupon rate is set at the key rate plus 400 basis points. Coupon payment - monthly.

The total demand of investors amounted to 4.8 billion rubles. Private investors accounted for more than half of the initial volume, which, together with the demand of institutional investors, made it possible to increase the volume from 3 to 4 billion rubles.

Selectel first proposed a floating rate instrument, which meets current investor requests and market conditions. Selectel's efficient business model, strong growth and high degree of reliability confirmed by leading credit agencies, allowed us to cover the book in the first hours of application collection and increase output. This speaks of the attractive placement conditions for investors and their trust in the company as an issuer, - commented Oleg Lyubimov, CEO of Selectel. - We plan to use the funds raised to support the active future growth of the business.

The collection of applications took place on November 29, 2024 by open subscription. Technical placement and start of trading are scheduled for December 4, 2024. The issue was placed as part of the Exchange-Traded Bonds Program Series 001P, 4-00575-R-001P-02E number, registered on January 27, 2021.

A new bond issue is expected to be included in the Innovation Market and Investments of the Moscow Exchange (RII), which includes all previous issues of Selectel bonds. One of the advantages of RII is tax breaks for investors.

Plan for the placement of bonds for 3 billion rubles

Selectel, an independent provider of IT infrastructure services in Russia, shared its plans with TAdviser on November 15, 2024 to place another issue of bonds worth 3 billion rubles to finance the investment program.

The coupon type is variable and is determined based on the Bank of Russia key rate plus a premium not exceeding 400 basis points. The circulation period is 2.5 years with a monthly payment of a coupon. Collection of applications is planned to be held at the end of November.

The organizer and placement agent is Gazprombank. It will be possible to take part in the placement through brokers.

"We continue to expand the number of client companies and are developing a portfolio of high-tech services amid continued digitalization and growing business interest in to outsourcing IT the infrastructure," said Selectel CEO. Oleg Lyubimov- In 2024, we are growing at the planned pace - at the end of 9 months, the company's revenue from the direction of cloudy infrastructure services increased by 30% year-on-year. At the same time, profitability remains at a high level, and the debt burden is comfortable. We are investing in maintaining this growth rate in the future as well as exploring potential additional development opportunities. "

As noted in the company, on November 11, 2024, the Expert RA rating agency confirmed Selectel's creditworthiness rating at ruAA- with a stable outlook. The company also has a rating from the ACRA agency at the level of A + (RU) with a positive outlook. As of November 2024, there are three Selectel bond issues in circulation for a total of 10 billion rubles with maturity in 2025 and 2026.

Closing of bid book as part of offering of fourth bond issue

Selectel on April 10, 2024 announced the successful closure of the application book as part of the placement of the fourth issue. bonds

The volume of issue amounted to 4 billion rubles, the coupon rate is set at 15% per annum with a monthly payment, the circulation period is 2 years.

The total demand of investors during the formation of the application book significantly exceeded the planned volume of placement, This made it possible to make a decision to increase output from 3 billion rubles to 4 billion rubles and reduce the spread to 221 bp. To the CBD of the Moscow Exchange compared to the initial yield benchmark of 275 bp. Despite the difficult market conditions, the spread achieved is historically minimal for Selectel due to the improvement of the company's credit quality, which is confirmed by independent rating agencies.

Both private investors and large Russian banks and management companies took part in the placement.

Taking into account this issue, the company's debt burden remains at a comfortable level of about 1.5x net debt/EBITDA.

We entered the debt capital market for the fourth time and again see great demand among a wide range of investors. Traditionally, about half of the demand came from retail investors. In our opinion, this indicates a high interest of Russian investors in the IT sector in general and in the successes of Selectel in particular. The company shows steady revenue growth coupled with high profitability and low debt burden. In addition, as part of the new issue, we offered investors attractive conditions that meet the current market conditions, - commented Oleg Lyubimov, CEO of Selectel. - We plan to direct the funds raised for the development of the new site of the Yurlovsky data center. This will provide Selectel with the necessary capacity to meet the actively growing demand and maintain our strong position in the cloud market.

The issue was placed under the Exchange-Traded Bonds Program Series 001P, registration number 4-00575-R-001P-02E, registered on January 27, 2021. The collection of applications took place on April 9, 2024. Technical placement and start of trading are scheduled for April 12.

Excluding this issue, two Selectel bond issues maturing in 2025 (RU000A105FS4) and 2026 (RU000A106R95) are outstanding. The volume of each is 3 billion rubles with the payment of a coupon once every six months. The debut issue of bonds of 3 billion rubles was repaid in February 2024.

Election of a new board of directors. It includes the ex-head of MegaFon Gevork Vermishyan

On February 9, 2024, Selectel's revamped board of directors was elected. It included:

• former CEO of MegaFon Gevork Vermishyan (he is also the founder of the Tier 5 fund, which owns 25% of Selectel);
• General Director of Selectel Oleg Lyubimov;
• representatives of LVL1 Management Ltd (the largest owner of Selectel) Andrey Golukhov and Andrey Lisyansky.

According to Interfax, citing a statement by Selectel, the members of Selectel LLC on February 9, 2024 also decided to adjust the size of the authorized capital of the future Selectel JSC, which is created by converting from an existing LLC. Initially, it was assumed that the authorized capital will be 125 million rubles, and under the new decision it will amount to 130 million rubles. The authorized capital will consist of 520 million ordinary shares with a par value of 0.25 rubles each. It will be formed as follows:

• at the expense of the authorized capital of Selectel LLC - 128 318 125 rubles (which corresponds to the 513 272 500 of ordinary shares);
• at the expense of LLC Selectel (namely, at the expense of retained earnings) - 1,681,875 rubles (corresponds to 6,727,500 ordinary shares).

Updated Selectel Board of Directors elected

As a method of placing shares of Selectel JSC, the exchange of shares of Selectel LLC participants for shares of the created joint-stock company was chosen.

By February 2024, Selectel provides cloud services based on its data centers in Moscow, St. Petersburg and the Leningrad Region, as well as a partner data center in Novosibirsk. LVL1 Management Ltd (owned by the founders of LLC Lev Leviyev and Vyacheslav Mirilashvili) owns 68.4% of Selectel, the Tier 5 fund of the ex-head of Megafon Gevork Vermishyan - 25%, Selectel-Invest LLC - 4%, the top management owns 3.6%.^[1]

2023

Tier 5 bought 25% of Selectel

At the end of December 2023, Selectel announced the sale of 25% of the company to the Tier 5 investment fund, founded by the former CEO of MegaFon Gevork Vermishyan. Its participants did not disclose the financial and other parameters of the transaction.

According to Interfax, citing data from the information disclosure site, LVL1 Management sold its stake in Selectel to the Tier 5 fund, as a result of which the latter's share in the IT infrastructure provider decreased from 96.3% to 71.3%. Another 3.7% belongs to Selectel executives.

Gevork Vermishyan called the investment in Selectel a logical solution against the background of the expected exponential development in the IT infrastructure sector due to the growth of the volume of data, the means for their processing and storage.

I watched intently for Selectel's impressive growth. It is obvious to us that the cloud services market is only gaining momentum, and we believe that Selectel is the best independent team in which we can take part in scaling, "said the ex-head of MegaFon.

Selectel CEO Oleg Lyubimov, in turn, commenting on the deal with Tier, said that his company will continue to follow its course in partnership with Gevork Vermishyan's team, which has extensive experience in the telecommunications market.

Selectel notes that the company continues to invest in maintaining high business growth rates with capital expenditures of 1.5 billion rubles in January-September 2023, which is half the value of the same period in 2022. 0.7 billion rubles the company invested in server equipment. 0.6 billion rubles - in the development of the infrastructure of data centers in accordance with the schedule for the construction and modernization of data center sites with the transition of the construction of a new data center to an active phase in 2024.^[2]

The owner of the operator of data centers of Selectel gave him to heads of 3.7% of the company

In mid-December 2023, LVL1 Management, which owns Selectel, transferred a 3.735% stake in it to the heads of the data center operator. The corresponding entry appeared in the Unified State Register of Legal Entities (USRUL).

It follows from it that 17 managers were included in the number of co-owners of Selectel LLC, and the largest share (2.56%) went to the company's general director Oleg Lyubimov. According to the Unified State Register of Legal Entities, the transfer of shares took place on December 15, 2023.

As explained to Interfax in Selectel, the heads were given shares in the framework of the key employee motivation program. The company refrained from other comments.

By the end of 2023, Selectel is changing its ownership form: the company will be transformed from a limited liability company (LLC) into a joint stock company (JSC) with an authorized capital of 125 million rubles. The authorized capital will be formed from two sources - the authorized capital of Selectel LLC itself (123.18 million rubles, equivalent to 492 million 741 thousand ordinary shares) and the company's own funds. In total, it will issue 500 million shares with a nominal value of 0.25 rubles, while shares in Selectel LLC will be exchanged for shares in the new joint-stock company.

In August 2023, Selectel's owners moved the parent company from Cyprus to the UAE. Then the press service of Selectel explained that the transition to the territory of a friendly country was implemented in preparation for a possible IPO.

By December 2023, Selectel offers cloud services based on six of its data centers in,, and To Moscow St. Petersburg , Leningrad Region as well as a partner data center in. Novosibirsk Parent company LVL1 Management - registered in the United Arab Emirates (UAE).^[3]

Selectel revenue slows growth, net profit doubles

For 9 months of 2023, the revenue of the provider of IT infrastructure services Selectel increased by 27%, amounting to 7.5 billion rubles, the company said on December 13. Net profit for the reporting period increased by 2 times, to 2.3 billion rubles, and the debt burden decreased to 1, 0 net debt/adjusted EBITDA.

Selectel CEO Oleg Lyubimov noted, answering TAdviser's questions, that in 2022 the company had a high base effect, and according to the results of all 2023, a slowdown is expected - revenue growth at plus/minus 25%. At the end of 2021, Selectel's turnover grew by 47% year-on-year, 2022 - by 68%, to 8.1 billion rubles.

We see that the market as a whole is now growing more slowly. Last year, there was a one-time surge associated, firstly, with the relocation of customers from Western service providers to Russian ones, because it became difficult to pay for Western ones and the risks of blocking appeared. And many of these risks are beginning to be realized this year, - said Oleg Lyubimov.

The CEO of Selectel notes that the company is steadily growing the number of customers and at the same time the average check is also growing: "simply due to the fact that in recent years we have been focusing more on medium and large customers than on small, although small ones are important to us."

Most of the revenue (59%) for the 9 months of 2023 fell on IT infrastructure services - bare metal or, as the company calls it, the segment of private clouds on top of dedicated servers. And the proceeds from the services of classical data centers (rental of a place in a data center, colocation), with which the Selectel business began, accounted for only 11% during the reporting period, and its share decreases year-on-year.

Oleg Lyubimov, answering TAdviser questions, predicted that in 2024 the services of classic data centers will probably account for 8-9% of Selectel's turnover, then even less, but this segment will not go to zero, because for many customers the company makes hybrid solutions. Sometimes the client comes with his legacy, and for scaling rents resources from Selectel.

For us as a company, this business segment is not interesting, and in general, the consumption model of IT services in Russia is changing: fewer companies prefer to buy their own equipment and build server rooms, and more and more prefer to buy it in the form of ready-made services, "explained Oleg Lyubimov.

There is a trend towards an increase in the share of platform () PaaS services in the total revenue structure. Among the new services that will be put into commercial operation in 2024 is the platform service of the finished cloud. " In 1C 2023, it was released in beta test format. The focus is also on the development of services for container machine learning development, expanding the line of managed. DBMS

Recall that in recent years Selectel has come to the independent assembly of all server equipment, on the basis of which it provides services to its customers. The company collects it from server platforms from different manufacturers and separately purchased components. Previously, the main vendor of computing platforms for Selectel was Supermicro, but now the range of vendors has become wider. True, the company does not yet have Russian server equipment in production. Russian network equipment is already used.

We now look, test, experiment, become partners with the companies that produce it. So far, as a rule, Russian platforms are more expensive than those that we buy, "Konstantin Ansimov, Product Director of Selectel, told TAdviser.

Among the trends in iron demand, Selectel's product director notes that more customers than three years ago have become indifferent to the processor vendor. Intel used to dominate and few wanted to look towards AMD. And now the main criterion is price/performance. Now there is more trust not only in AMD, customers are also starting to experiment with ARM processors that have appeared in the Selectel line, Konstantin Ansimov told TAdviser.

As for RAM, in 2022 there was a big jump - memory moved from the DDR4 standard to DDR5, became more productive, and for large loads, customers now prefer hardware with DDR5. In the case of data storage, there is also progress with the disk subsystem: vendors add IOPS, add performance to disks, and customers want to use more modern technologies.

Also, Russian companies want to receive the most modern GPUs due to the growing use of AI technologies. Konstantin Anisimov notes that getting them now is not as easy as it was until 2022, but the company offers a wide range of GPUs, and customers have something to choose from.

Now we are working on the introduction of Nvidia H100 accelerators into the line. They are not the latest - Nvidia has recently introduced H200 that no one on the market can buy yet, except for its main partners. But H100 are in great demand, - Konstantin Anisimov noted in a conversation with TAdviser.

To develop and further scale the business, the company needs to attract funding. The business in which Selectel is engaged is quite capital-intensive: you need to build new buildings for the future, fill them with engineering and IT equipment.

We have a big investment program every year. To grow in annual terms by 1 billion in revenue, we need to spend 1 billion rubles on equipment. That is, we now have a coefficient of about one to one. Accordingly, if next year we plan to grow at a market speed of 25-30%, i.e. by 2-3 billion rubles, we need to incur the corresponding costs of buying IT equipment, "Selectel CEO explained to TAdviser. - Plus, we continue the construction of our large site in Moscow on Yurlovsky passage, which also requires capital expenditures.

According to the CEO, historically free cash flow in the company was negative, Selectel borrowed funds from both bank financing and the market in the form of bonds. But in the past few quarters, it has shown positive cash flow, first entering it in 2022, and a stable positive flow in 2023 due to an increase in the margin of the business as it scales.

The company focuses on bank financing to a lesser extent, more on placing bonds on the Moscow Exchange and attracting money from the debt market. To date, Selectel has implemented three issues of three billion rubles each in 2021-2023.

Oleg Lyubimov told TAdviser that the company does not exclude a new release in 2024, but in many respects the decision will depend on the key rate - with a high key rate of the company, it is not very interesting to do this. At the same time, even at a high rate, financing through bonds is more attractive to the company than shareholder money through attracting a new investor.

At the moment, Selectel, we recall, has 4 sites in Moscow, St. Petersburg, the Leningrad Region for 3.5 thousand racks. Oleg Lyubimov told TAdviser that now there is a large reserve for server racks - about 700-800 racks are free. Thus, for the next 1.5-2 years there is a margin for growth within its sites.

To provide services, the company relies on its own development based on open source and does not use proprietary software for its key products. Due to its developed own development, Selectel has more staff than in similar companies, says Oleg Lyubimov. The company employs more than 830 people, of which about 500 are engaged in product development and support.

Extending PCI DSS Certificate to Key Infrastructure and Platform Services

Selectel,, Russian provider IT infrastructures has expanded the set of services certified according to the international standard (data security payment cards PCI DSS Payment Card Industry Data Security Standard). Selectel representatives announced this on November 30, 2023.

Now the certificate applies to all key IaaS and - PaaS services of Selectel, including allocated both cloud servers object S3, storage and cloudy databases Managed Kubernetes Container Registry. Also, a number of network and -services comply with INFORMATION SECURITY the standard: (CDN), content delivery network load balancer, global, router dedicated network equipment, secrets manager identification and access control service (). IAM

PCI DSS applies to companies that process, store, or transmit payment card data. This applies to banking systems, processing, acquiring, insurance companies and other types of organizations that interact with payment systems (Mastercard, Visa, MIR and others). Compliance with the standard demonstrates the high level of security of Selectel services, confirmed by an independent auditor, and allows companies to be confident in the reliability of the IT infrastructure on the basis of which their data is processed and stored .

"The financial sector is one of the most demanding to ensure the security and safety of data and at the same time one of the most advanced in terms of applied technologies and approaches to development," said Anton Vedernikov, head of the information security services development and support department at Selectel. - We see a steady increase in demand for cloud services among companies in the financial and insurance sectors, so we have radically expanded the list of services that comply with the payment data security standard. Having passed an independent assessment, we confirmed the highest level of information security of our services, which, in turn, demonstrates the maturity of the company and increases the level of trust from the market. "

Until November 2023, the PCI DSS certificate applied only to the physical security of data centers, as well as to colocation services and cloud servers in the ru-3 pool of the Selectel cloud platform.

Interview TAdviser with the head of the department for work with state customers Roman Krasilnikov

The public sector is increasingly turning to cloud solutions in addition to developing its own IT infrastructure. About what needs state customers have, how work is being built with them and how the state order market lives in the field of IT resources today, talked with Roman Krasilnikov, head of the department for working with state customers Selectel. Read more here.

Placement of the third issue of bonds in the amount of 3 billion rubles

Selectel, Russian provider IT infrastructures on August 15, announced the placement of the third issue of corporate bonds in the amount of 3 billion rubles at a coupon rate of 13.3% per annum for a period of 3 years.

The funds received will allow the company to refinance the first issue of bonds with a maturity until February 2024, as well as support the implementation of the investment program.

Coupon payments will be made once in half a year. The issue was placed under the Exchange-Traded Bonds Program Series 001P, registration number 4-00575-R-001P-02E dated 27.01.2021.

The collection of applications for release took place on August 15, 2023. Technical placement and start of trading are scheduled for August 18.

"We saw strong interest in the new Selectel release among a wide range of investors, with more than half of the demand coming from retail investors. During the formation of the application book, demand exceeded the planned output of 4 billion rubles, however, taking into account market conditions at the time of placement, we decided to reduce the volume to 3 billion. As a result, we offered the participants an attractive coupon rate in the current realities, "said Oleg Lyubimov, General Director of Selectel.

Selectel held its debut issue of bonds of 3 billion rubles in February 2021. The coupon rate was set at 8.5% per annum. The company placed the second issue of 3 billion rubles in November 2022. The coupon rate was set at 11.5% per annum.

Plan of placement of the third issue of bonds in the amount of 4 billion rubles

Selectel Russian provider IT infrastructures plans to place Moscow Stock Exchange 4 billion bonds for the third issue rubles and a 3-year maturity under the 001P Series Exchange-Traded Bonds Program. Selectel representatives announced this TAdviser on July 31, 2023.

The yield benchmark is a premium no higher than 250 basis points to three-year OFZs. Coupon payments will be made every 6 months. Collection of the application book is tentatively planned to be held on August 15.

As specified in Selectel, the company plans to use the raised funds to refinance the first issue of bonds, which will be repaid in February 2024, as well as to finance the company's investment program.

"In the first half of 2023, Selectel's revenue is expected to grow by 34% year-on-year to 4.8 billion rubles, which, together with strong results in 2022, confirms positive forecasts for the growth of the IaaS market in Russia and our leading position in it," said Oleg Lyubimov, CEO of Selectel. "We continue to invest in expanding our own infrastructure and product portfolio, which ensures stable development of the company and increases the number of customers."

The organizer and placement agent is Gazprombank.

The debut issue of bonds in the amount of 3 billion rubles. Selectel held in February 2021. Then the coupon rate was set at 8.5% per annum. The second issue of 3 billion rubles. the company placed in November 2022, with a coupon rate of 11.5% per annum.

Preparing for IPO

On May 17, 2023, it became known about the preparation of the IPO by Selectel. The cloud infrastructure provider and data center operator is holding meetings with potential investors.

Sources on the stock market told Kommersant about the meetings of investors and Selectel executives to discuss the listing of the company. The newspaper also had an invitation sent to potential investors to participate in the NDR (Non-deal roadshow), which will be held May 16-18, 2023. Selectel itself does not deny the possibility of placement, but the site for the IPO has not yet been chosen.

The decision on the IPO was not made, we did not set internal deadlines, did not determine the exchanges... Selectel as issuer of two bond issues regularly holds similar meetings with investors. They help maintain a high level of informing current and potential investors, the Selectel said.

According to FG Finam analyst Leonid Delitsyn, the market value of Selectel can be estimated at 40-50 billion rubles, taking into account the discount due to regional risks. The expert estimates the potential for placing shares on the stock market at 15-20%, and the amount of funds raised - at 7.5-10 billion rubles.

T1 CEO Gorg Kalganov, in a conversation with the publication (the article was published on May 17, 2023), said that now is a good time to invest in the data center market, since the market will saturate no earlier than in two to three years. World cloud providers have left Russia: Amazon Web Services, Azure, Google, etc., which frees up space for domestic players, the expert explained. He also added that large companies with state participation, including Rostelecom and Rosatom, are also actively investing in the data center sector, with which "it is increasingly difficult for private business to compete."^[4]

2022

Revenue growth more than 1.5 times, net profit - 4.6 times

Selectel on April 28, 2023 shared with TAdviser its audited financial results under IFRS standards for 2022. In 2022, Selectel's revenue increased by 68% compared to last year and reached 8.1 billion rubles. mainly due to increased demand for Russian IT infrastructure services and the relocation of customers from foreign providers, as well as due to an increase in tariffs for basic services. In the ranking "TAdviser100: The largest IT companies in Russia 2023," such an indicator allowed the company to take 57th place. Net profit increased 4.6 times to 1.4 billion rubles. Net profit margins rose to 17% from 6% a year earlier.

EBITDA showed an accelerated growth rate compared to revenue - by 81% year-on-year to 4.1 billion rubles. EBITDA margin in 2022 improved by 4 pp to 50%, which is historically the maximum level for the company, the Selectel noted. The increase in profitability is due to a higher rate of revenue growth compared to the increase in operating expenses.

Revenue of the segment "Private clouds based on dedicated servers" increased by 64% against the backdrop of high demand for arbitrary configuration servers from large clients. The revenue of the Public and Private Clouds segment increased by 92%, mainly due to increased demand for the services of the Selectel cloud platform. In turn, the revenue of the Data Center Services segment increased by 48%, mainly due to changes in rack rental prices against the background of the overall market trend.

The cost of revenue increased by 0.8 billion rubles, or 59%, mainly due to an increase in wage costs (66% of the cost). The increase in payroll costs is due to the indexation of wages in order to increase Selectel's competitiveness in the labor market, as well as the expansion of employees. The share of cost in revenue is gradually decreasing (29% in 2022, -1 pp by 2021) due to the excess of revenue growth rates over cost growth rates.

Administrative and commercial expenses increased by 44% year-on-year to RUB 1.7 billion. At the same time, the main growth was also due to an increase in wage costs. Due to the positive effect of operational leverage, the ratio of these costs to revenue decreased by 3 percentage points. and amounted to 21% in 2022, the company explained.

In 2022, capital expenditures, excluding the purchase of the data center site on Berzarin Street in Moscow, slightly increased - by 4% year-on-year and amounted to 3.4 billion rubles.

Investments in server equipment in 2022 accounted for 61% of total investments (2.1 billion rubles), and the remaining 39% (1.3 billion rubles) fell on the development of the infrastructure of data centers, while:

• The amount of investment in server equipment in relation to revenue is gradually decreasing and in 2022 amounted to 25%.
• capital expenditures on data center infrastructure mainly included the expansion of the Berzarin data center in Moscow and the construction of office space in St. Petersburg.
• in 2022, the project for the construction of the Yurlovsky data center in Moscow of Tier IV level, designed for 2000 server racks with further expansion potential, began.

Net debt/EBITDA decreased to 1.7x at the end of 2022 compared to 2.4x at December 31, 2021. The company's net debt amounted to 6.7 billion rubles. at the end of 2022 against 5.5 billion rubles. at the end of 2021. The growth of net debt in the company was explained by the purchase of a complex of data center buildings on Berzarin Street in Moscow (1.3 billion rubles), which will ensure full control over the further technological development of the data center.

In 2022, despite the substantial investment required to maintain strong growth, Selectel entered positive adjusted free cash flow for the first time, confirming the sustainability of the company's business model.

Raising 3 billion rubles through the placement of the second issue of bonds

Selectel, Russian provider IT infrastructures November 15, 2022 announced TAdviser the attraction of 3 billion rubles during the placement of the second issue of bonds on. Moscow Stock Exchange According to the company's calculations, the funds received will allow Selectel to complete the process of consolidating all sites data centers and form a reserve for investments planned in 2023.

The second placement took place within the framework of the Exchange-Traded Bonds Program of the 001P Series. Collection of applications for release took place on November 10, 2022. The coupon rate is set at 11.5% per annum. The period of circulation of the issue is three years; coupon payments will be made once in half a year. Technical placement and start of trading are scheduled for November 15, 2022.

The organizers of the placement were MKB, Tinkoff and Gazprombank, which also became the placement agent.

"The second placement caused unexpectedly high demand for us. The established benchmark for the coupon rate was 12.2% -12.4%, but during the formation of the application book, demand significantly exceeded the expected issue size, so the rate was reduced to 11.5%. Even after that, demand still exceeded supply by 2.5 times, "said Oleg Lyubimov, CEO of Selectel.

As Oleg Lyubimov concluded, the results obtained generally demonstrate the attractiveness of Selectel among investors and, at the same time, guarantee the fulfillment of the company's tasks for business development in 2023.

The previous, debut, issue of bonds of 3 billion rubles took place in February 2021. Then Selectel also noted a significant excess of demand over supply - more than twice.

Plan for placement of the second issue of bonds on the Moscow Exchange

On September 1, 2022, Selectel announced Russian provider IT infrastructures that it would soon place a second issue of corporate bonds bonds under the 001P Series Exchange-Traded Bonds Program for 3 billion. rubles

The yield benchmark is a premium no higher than 400 basis points to three-year OFZs. The circulation period is three years. Coupon payments will be made once in half a year. The collection of the application book is scheduled for September 15.

The company plans to use the raised funds to purchase the site DPC on the street. Berzarin To Moscow in and adjacent buildings for possible expansion, as well as use it to refinance the current bank loans financing investment and program of the company.

The demand for IaaS and PaaS solutions from the business is steadily increasing. The transfer of infrastructure by companies from foreign providers also stimulates the development of the Russian cloud market. By 2025, the private and public cloud sector is expected to grow by 30% to 158 billion rubles, and Selectel occupies a leading position in this area. The company is among the top 4 IaaS providers in terms of revenue. In the first half of 2022, the company's revenue growth amounted to 64%, commented Oleg Lyubimov, CEO of Selectel.

Selectel in November 2021 confirmed high credit ratings from expert organizations. The rating agency ACRE retained the previously assigned Selectel credit rating at A (RU) with a stable outlook, the agency Expert - ru (A) with a positive outlook. The organizers of the placement were Gazprombank, MKB and Tinkoff, and Gazprombank became the placement agent.

2021

Revenue - 5,818 million rubles

At the end of 2021, Selectel's revenue amounted to 5,818 million rubles. The company took 86th place in the ranking of TAdviser100: The largest IT companies in Russia 2022.

Raising more than $40 million through the placement of bonds on the Moscow Exchange

Selectel, provider IT infrastructures on February 20, 2021, announced that it had completed the placement of a 3 billion bond issue rubles (more To the Moscow exchange than $40 million dollar in equivalent). For the company, this placement was a debut.

The collection of applications for the issue took place on February 18. The coupon rate is set at 8.5% per annum, taking into account the six-month payment of the coupon, it corresponds to a yield of 8.68% per annum. The period of issue circulation is 3 years. Technical placement and start of trading are scheduled for February 25.

The organizers were: Moscow Credit Bank, Raiffeisen Bank, SberCIB, Tinkoff. The placement agent was SberCIB.

"Investors appreciated the performance and perspective of our company. Over the past 5 years, we have been growing by more than 40%, showing high profitability and do not plan to slow down growth. The funds raised will go to the construction of new data centers, the purchase of high-performance equipment and the development of new IT products, "said Oleg Lyubimov, CEO of the company.

The established benchmark for the coupon rate was the level of 9%, but during the formation of the application book, demand significantly exceeded the established level of issue of 3 billion, so the rate was reduced to 8.5%, but even at this level, the oversubscription amounted to more than 2 times and the total final volume of applications exceeded 6.5 billion.

Placement of bonds on the Moscow Exchange

At the end of January 2021, it became known about the placement of Selectel bonds on the Moscow Exchange. This is the first Russian IT infrastructure supplier to take such a step.

According to TAdviser in Selectel, the company registered a program of bonds of a series of 001P with a volume of up to 10 billion rubles at the Moscow Exchange. Debt securities can be placed for up to 10 years. At the same time, the program itself is indefinite. How much funds the company expects to attract as part of the placement is not specified.

Selectel CEO Oleg Lyubimov, commenting on the company's entry into the domestic debt market, noted that for five years Selectel's revenue has been growing by more than 40% per year, overtaking market growth of 15-20%.

The inevitable recovery of the global and Russian markets after the pandemic will lead to a further increase in demand for our services, so we are preparing for this in advance, putting into operation new data centers and services. Attracting funding will allow us to maximize the potential of the growing market, "he said.

The press service of Selectel also reports that the rating agencies ACRA and Expert RA assigned the company credit ratings at the level of "A (RU)" and "ruA," respectively, with a "stable" forecast.

According to ACRA, this credit rating is due to a strong business profile, leading market positions, very high profitability and a moderately high assessment of liquidity.

By the end of January 2021, more than 18 thousand customers use the services of Selectel. The company has six of its own data centers in Moscow, St. Petersburg and the Leningrad Region, on the basis of which a multi-product platform operates. At the end of 2020, Selectel commissioned 1.1 thousand racks, bringing their total number to 3 thousand.

2020

Revenue growth by 43.4% to RUB 4,018 mln.

At the end of 2020, Selectel's revenue amounted to 4,018 million rubles, an increase of 43.4% compared to 2019, which allowed it to take 87th place in the ranking of TAdviser100: The largest IT companies in Russia 2021.

Inclusion in the TAdviser rating "Largest IT Service Providers"

Selectel is included in the rating "Largest suppliers IT services Russia by revenue for 2020," prepared TAdviser in December 2021. More. here

Attending TAdviser: IT Infrastructure Optimization 2020

One of the conference participants is Selectel, a reliable IT infrastructure provider. The company has at its disposal 6 data centers in Moscow, St. Petersburg and the Leningrad region and 2700 server racks. At the Selectel booth, you will be told about the company's proposals for renting dedicated servers and creating infrastructure in the cloud. Learn about flexible infrastructure management solutions and managed services that let you focus on your business, not your technical needs. More than 18,000 clients trust Selectel, including Citymobil, Petrovich, PIK Group of Companies, igooods, Ostrovok.ru and others.

Vladislav Kirpinsky, Director of Cloud Integration at Selectel, will analyze a number of indicative client cases in his speech. How to comprehensively approach infrastructure optimization in order to reduce its cost, and what is better not to save on? The expert will answer these questions using real examples - September 30 at 10:35.

Getting started in Uzbekistan

On May 21, 2020, Selectel announced the opening of a representative office in Uzbekistan, as well as plans to enter the Belarusian market by the end of the year. The Russian provider of cloud services and data center services will spend up to $5 million on foreign expansion over three years.

We highly appreciate the potential of the countries of Eastern Europe and Central Asia, in the medium term we expect the emergence of fast-growing cloud markets there. After launches in Uzbekistan and Belarus, the company will continue its expansion into other countries in these regions, "said Oleg Lyubimov, CEO of Selectel.

According to him, in July 2020, Selectel will launch cloud services in Uzbekistan. The company is also thinking about building a data center in this country.

By May 21, 2020, Selectel is promoting business applications in Uzbekistan - the Selectel Office suite of office programs and the Selectel Chat messenger. In the coming months, the product line will be replenished with cloud infrastructure services.

Dmitry Bederdinov, General Director of the Coordination Council for Data Processing Centers and Cloud Technologies, believes that there is practically no competition in Uzbekistan by May 2020, and the need for information technology is growing, so profitability may be higher than Russian.

At the same time, it is important that the course towards improving the investment climate remains and does not arise situations, as in 2016, when the mobile operator MTS left the country, selling its share in business to the government of Uzbekistan for $1, Bederdinov emphasized.

According to Maxim Berezin, director of business development at CROC Cloud Services, there is no formed demand for professional services in Uzbekistan. He considers Turkey and the countries of the Middle East, where the economy is developed and there are large players interested in cloud services, to be more promising areas for Russian companies^[5]

2019: The launch of the first regional node of the cloud platform in Novosibirsk

On December 6, 2019, Selectel announced the launch of the first regional node of its cloud platform in Novosibirsk. The company invested 60 million rubles in the project and expects its payback within a maximum of three years. Read more here.

2018

Credit line for 1 billion rubles in Raiffeisen Bank

Selectel, an IT infrastructure solutions provider, and the North-West Regional Center of Raiffeisen Bank signed an agreement to open a credit line for 1 billion rubles for a period of 7 years. The company made a partial drawdown of the loan.

The demand for cloud services in the country is growing rapidly, and we are pleased to support Selectel, a provider of IT infrastructure solutions in Russia. Thanks to the long-term financing provided to the company, Selectel will be able to implement its business development plans and strengthen its market position, "commented Andrei Pochesnev, director of the North-West Regional Center of Raiffeisen Bank.

According to Evgeny Butler, Deputy General Director of Selectel for Financial and Operational Affairs, many years of mutually beneficial cooperation with Raiffeisen Bank allows the company to confidently implement plans and respond flexibly to changes in a rapidly developing market.

Appointment of Maxim Semenikhin as Managing Director

In 2018, Maxim Semenikhin joined the Selectel provider team as managing director (CEO). Read more here.

2017

TAdviser interview

In December 2017, Petr Shcheglov, Selectel Product Director , spoke in an interview with TAdviser about the trends in the Russian Data Center (DPC) market, the creation of the innovative Selectel Lab test laboratory and the use of the latest technologies.

Selectel and SONM will bring blockchain to IaaS

In October 2017, Selectel, a Russian provider of cloud and hosting services, and SONM, a blockchain platform for decentralized cloud resources, signed a Memorandum of Cooperation. In partnership, the companies plan to create IT infrastructure solutions for business based on blockchain technology. In the Russian IaaS market, this is the first such initiative.

Loan from Raiffeisen Bank for 200 million rubles

On April 12, 2017, Selectel and the Northwest Regional Center of Raiffeisen Bank entered into a loan agreement. Under the terms of the transaction, two credit lines were opened for a total amount of 200 million rubles. The funds will be used to finance the Selectel investment program. The company made a partial drawdown of the loan.

• 2014 - co-founder of the network In contact"" Lev Leviyev appointed CEO of Selectel.
• 2011 - the launch of the fifth data center in the Leningrad Region (Dubrovka town), the creation of a regional computing center.
• 2010 - launch of the fourth data center in the Leningrad Region (Dubrovka town) and launch of the cloud computing resource rental service;
• 2009 - launch of the third data center in Moscow. The company entered the market for server hosting services, leased dedicated servers and leased virtual servers;
• 2008 - launch of the second data center in St. Petersburg;
• 2007 - the foundation of the network of Selectel data centers by VKontakte investors Lev Leviyev and Vyacheslav Mirilashvili and the opening of the first data center in St. Petersburg;

Notes