Operating Results
NINE MONTHS OF 2020
October 2020
DISCLAIMER
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This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or an offer or the solicitation of an offer to subscribe for, buy or acquire securities of PJSC LSR Group ("hereinafter - the Company") or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity, nor does it purport to give legal, tax or investment advice. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information in this document has been prepared by the Company solely for use at presentations. This document and its contents may not be distributed, published, reproduced (in whole or in part) by any medium or in any form.
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The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control and we may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of revenues, profitability and growth, the timely development and acceptance of new products, the impact of competition and competitive pricing, the effect of changes in applicable law, the ability to obtain necessary regulatory approvals and the ability to fund our future operations and capital needs through borrowing or otherwise, the ability to successfully implement any of our business strategies, the ability to integrate our business and to realize anticipated cost savings and operational benefits from such integration, our expectations about growth in demand for our products and services, the effects of inflation, interest rate and exchange rate fluctuations, and our success in identifying other risk to our business and managing the risk of the aforementioned factors, the condition of the economy and political stability in Russia and the other markets of operations and the impact of general business and global economic conditions.
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9M 2020 GROUP OPERATING HIGHLIGHTS
- NEW CONTRACT
SALES - AVERAGE PRICE
- AND NEW LAUNCHES
- BUILDING
MATERIALSCOMPLETIONS
- OPERATINGGUIDANCEFY 2020
New contract sales increased by 16% YoY, amounting to RUB 66 billion or 590 th. sqm, primarily
driven by strong results in St. Petersburg.
Share of mortgage sales totalled 64%, compared to 48% in 9M 2019.
We expect the share of mortgage sales to remain high given the expected prolongation of the
mortgage rate subsidy program until 1 July 2021.
Average price per sqm increased by 8% YoY reaching RUB 124 th.
Completions reached 200 th. sqm of net sellable area, in line with the projects schedule.
New 585 th. sqm of net sellable area launched in 9M 2020.
Solid performance of building materials segment, in line with management expectations.
The sales of ready-mix concrete and sand declined by 15% YoY. Other materials showed marginal
decline in sales volumes, while aerated concrete sales increased by 30% YoY.
The Company reiterates it's sales guidance for FY 2020:
- 870 th. sqm (+6% YoY)
- RUB 95bn (+13% YoY)
Source: Company information | 3 |
Note: Here and from hereon, the operating results are rounded to whole numbers while the % change calculations are based on the full figures
9M 2020 RESULTS HIGHLIGHTS - REAL ESTATE
NEW CONTRACT SALES (TH. SQM)
590 | |
552 | |
+7% | |
9M 2019 | 9M 2020 |
AVERAGE PRICE (RUB TH. / SQM)
NEW CONTRACT SALES (RUB BN)
66 | |
+16% | |
57 | |
9M 2019 | 9M 2020 |
COMPLETIONS (TH. SQM)
94
113 114 115
98 100 99
127 130
109 108
390 | |
-49% | 200 |
1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020
9M 2019 | 9M 2020 |
Source: Company information | 4 |
9M 2020 NEW CONTRACT SALES
REGIONAL FIGURES
SAINT PETERSBURG | MOSCOW | URALS |
TH. SQM
RUB BN
TH. SQM | RUB BN |
TH. SQM
RUB BN
373 | |
+26% | |
297 | |
9M 2019 | 9M 2020 |
38 | |
+38% | |
27 | |
9M 2019 | 9M 2020 |
171 | |
128 | |
-25% | |
9M 2019 | 9M 2020 |
25 | |
23 | |
-9% | |
9M 2019 | 9M 2020 |
89 | |
83 | |
+6% | |
9M 2019 | 9M 2020 |
6 | |
5 | |
+14% | |
9M 2019 | 9M 2020 |
New contact sales in St. Petersburg increased by 38% YoY in rouble terms, mainly driven by mass-market segment (+49% YoY) which delivered particularly strong performance in 3Q 2020 (+131% YoY).
The results were supported by the mortgage rate subsidy program, and with our proper product offering that met consumer needs. This was well-observed in the performance of our flagship projects Tsvetnoy Gorod and Civilization where sales were up 286% and 348% respectively in rouble terms during the third quarter.
The Moscow region demonstrated healthy performance which reflected our focus on profitability over volumes.
In the third quarter new contract sales increased by 3% in rouble terms due to:
- Strong performance in the business class segment with an increase in sales of 30% YoY in rouble terms driven by substantial price growth and stable sales in sqm;
- Lower share of mass market in sales given the high rate of apartments sold in our key project Luchi (~90%), while no new launches were scheduled during the period.
The Urals region demonstrated strong performance with the new contract sales up 14% YoY.
The mortgage rate subsidy program supported sales in the third quarter (+18% YoY in rouble terms) with the strongest sales recorded in our project Meridian (+138% YoY).
We expect that prolongation of the program will continue to have a positive effect on our sales in the region.
Source: Company information | 5 |
3Q 2020 NEW CONTRACT SALES BY PROJECT
(by sqm sold1)
SAINT PETERSBURG | MOSCOW | URALS | ||
167,000 sqm | 42,000 sqm | 35,000 sqm | ||
11% | 2% | 7% | 12% | |
17% | ||||
22% | 25% | |||
12%
29%
9%
17%
56%
28%20%
10%
23%
Civilization 22%
Zapovedny Park 9%
Ruchy 17%
Tsvetnoy Gorod 29%
Shuvalovsky 12%
Other 11%
Luchi 25%
Zilart 56%
Leningradka 58 17%
Other 2%
Flagman 12%
Michurinsky 20%
Tsvetnoy Bulvar 23%
Khrustalnye Klyuchi 10%
Meridian 28%
Rassvetny 7%
Note: 1 Respective project % share in sales is calculated using sales data w/o parking sales | 6 |
Source: Company information
9M 2020 BUILDING MATERIALS SALES
CRUSHED GRANITE ('000 m³) | READY-MIX CONCRETE ('000 m³) | BRICKS (mln units) |
5,685 | 883 | |||||
5,211 | 748 | 240 | 229 | |||
-8% | -15% | -5% | ||||
9M 2019 | 9M 2020 | 9M 2019 | 9M 2020 | 9M 2019 | 9M 2020 | |
SAND ('000 m³) | AERATED CONCRETE ('000 m³) | |||||
6,463 | 1,406 | |||||
5,502 | ||||||
1,079 | ||||||
-15% | +30% | |||||
9M 2019 | 9M 2020 | 9M 2019 | 9M 2020 |
Source: Company information | 7 |
APPENDIX
LSR GROUP
LEADING PLAYER IN RUSSIAN RESIDENTIAL REAL ESTATE
TRUE FEDERAL
PLAYER |
ONE OF THE
ONLY RUSSIAN
DEVELOPERS WITH
SIGNIFICANT
PRESENCE IN KEY
REGIONS
LEADING POSITION
#1 in St. Petersburg
#1 in Yekaterinburg
#6 in Moscow
BALANCED CUSTOMER | SCALABLE LAND | SHAREHOLDER |
EXPOSURE | BANK | VALUE CREATION |
PRESENT IN | OVER 7.6 MLN | STRONG |
MASS MARKET, | SQM OF NET | FOCUS ON |
BUSINESS AND | SELLABLE AREA | SHAREHOLDER |
ELITE SEGMENTS | WITH MARKET | RETURNS |
VALUE OF | THROUGH | |
RUB 207 BILLION | DIVIDENDS |
HIGH QUALITY PORTFOLIO | LARGE LAND BANK | STABLE DIVIDENDS FLOW | |||||||||
By value | By area | ||||||||||
0% | 1% | 4% | |||||||||
5 years of | RUB 53 BILLION | ||||||||||
2% 8% | development | ||||||||||
Distributed in dividends | |||||||||||
43% | 48% | 10 YEARS SUCCESSIVE | |||||||||
35% | |||||||||||
Of dividend payments supported by | |||||||||||
47% | |||||||||||
well-invested cash generative | |||||||||||
12% | building materials business | ||||||||||
PAYOUT RATIO >70% | |||||||||||
Mass market | Elite | Completed | Design | Average payout ratio since 2010 | |||||||
Concept development | Construction | ||||||||||
Business | Operating offices | ||||||||||
Operating offices | |||||||||||
Commercial | |||||||||||
Source: ERZ, Сompany information; portfolio structure per segment as at 31.12.2019 | 9 |
Note: respective rankings on market position are based on m2 under construction as at 01.01.2020 for each city; 1 Calculated on the basis of Design and Concept stage of land bank (c. 51% of total NSA) and assuming |
construction of 834 th. sqm per annum (result for 2019)
STRONG LEADERSHIP
EXPERIENCED MANAGEMENT AND STRONG CORPORATE GOVERNANCE
KEY MANAGEMENT TEAM MEMBERS | CORPORATE GOVERNANCE STRUCTURE | |||||||||
Igor Levit | ||||||||||
Andrey Molchanov | Evgeny Yatsyshin | Independent | ||||||||
CEO | First Deputy CEO | Deputy CEO | GENERAL MEETING OF SHAREHOLDERS | |||||||
Auditors | ||||||||||
Chairman of the | 22 years at LSR | 22 years at LSR |
Executive Committee | ||
Founder of LSR |
BOARD OF DIRECTORS
Audit Committee
Strategy and
Investment
Committee
Dmitri Kutuzov | HR and | |||
Vasily Kostritsa | ||||
Compensations | ||||
Ivan Romanov | ||||
Chief Financial Officer | Deputy CEO | Committee | ||
Deputy CEO | ||||
Head of Building Materials | ||||
16 years at LSR | 20 years at LSR | EXECUTIVE COMMITEE | Sustainability | |
20 years at LSR | committee | |||
Leonid Sorokko | CEO | |||
Galina Volchetskaya | ||||
Deputy CEO | Executive Director | |||
Head of Construction | ||||
9 years in LSR | ||||
7 years at LSR |
MANAGEMENT
COMPOSITION OF BOARD OF DIRECTORS
Dmitri Gontcharov
Chairman of the Board
of Directors
Chairman of Strategy
and Investment
Committee
Igor Levit
Member of Strategy and
Investment Committee,
Chairman of Sustainability
Committee
Alexander Prysyazhnyuk INED Chairman of Audit, member of HR and Compensations, member of Sustainability Committees
Alexey Makhnev INED Member of Audit, member of Strategy and Investment Committees
Vitaly Podolsky INED Chairman of HR and Compensations, member of Audit , member of Sustainability Committees
Natalia Nikiforova INED | Evgeny Yatsyshin |
Member of HR and | Member of Strategy and |
Compensations Committee | Investment Committee |
Andrey Molchanov | Egor Molchanov |
CEO | Member of Strategy and |
Chairman of the | Investment Committee |
Executive Committee | |
Founder of LSR |
Source: Company information | 10 |
9M 2020 KEY OPERATING RESULTS
REAL ESTATE1
3Q 2020 | 3Q 2019 | Change % | 9M 2020 | 9M 2019 | Change % | |
New contract sales, th. m2 | 244 | 183 | 33% | 590 | 552 | 7% |
Completed, th. m2 | 28 | 231 | (88%) | 200 | 390 | (49%) |
Real Estate - St. Petersburg | ||||||
New contract sales, th. m2 | 167 | 97 | 73% | 373 | 297 | 26% |
Completed, th. m2 | - | 52 | (100%) | 4 | 52 | (93%) |
Real Estate - Moscow | ||||||
New contract sales, th. m2 | 42 | 55 | (22%) | 128 | 171 | (25%) |
Completed, th. m2 | 0.5 | 145 | (100%) | 152 | 286 | (47%) |
Real Estate - Yekaterinburg | ||||||
New contract sales, th. m2 | 35 | 32 | 9% | 89 | 83 | 6% |
Completed, th. m2 | 27 | 33 | (18%) | 45 | 52 | (14%) |
BUILDING MATERIALS1 | ||||||
Product | 3Q 2020 | 3Q 2019 | Change % | 9M 2020 | 9M 2019 | Change % |
Crushed granite, th. m3 | 2,030 | 2,194 | (7%) | 5,211 | 5,685 | (8%) |
Sand, th. m3 | 1,928 | 2,809 | (31%) | 5,502 | 6,463 | (15%) |
Ready-mix concrete, th. m3 | 251 | 326 | (23%) | 748 | 883 | (15%) |
Bricks, million units | 89 | 93 | (4%) | 229 | 240 | (5%) |
Aerated concrete, th. m3 | 598 | 471 | 27% | 1,406 | 1,079 | 30% |
Source: Company information | 11 |
Note: 1 Operating results in these tables are rounded to whole numbers, while the % change calculations are based on the full figures |
KEY 1H 2020 FINANCIAL RESULTS
2017 | 2018 | 2019 | 1H 2019 | 1H 2020 | Change,% | |
Revenue, RUB m | 138,494 | 146,376 | 110,438 | 46,608 | 48,101 | 3% |
Adjusted EBITDA, RUB m | 36,845 | 36,400 | 21,037 | 7,817 | 9,162 | 17% |
Adjusted EBITDA, % | 27% | 25% | 19% | 17 % | 19% | - |
Operating profit, RUB m | 22,444 | 24,798 | 16,624 | 5,759 | 6,664 | 16% |
Operating profit, % | 16% | 17% | 15% | 12% | 14% | - |
Profit for the year, RUB m | 15,871 | 16,230 | 7,469 | 1,864 | 2,573 | 38% |
31.12.17 | 31.12.18 | 31.12.19 | 30.06.19 | 30.06.20 | Change,% | |
Total debt, RUB m | 72,786 | 86,088 | 89,619 | 88,036 | 94,189 | 7% |
Net debt, RUB m | 43,073 | 30,290 | 22,760 | 21,629 | 27,178 | 26% |
Net debt/ EBITDA | 1.17 | 0.83 | 1.08 | 0.62 | 1.21 | - |
Source: Company information | 12 |
CONTACTS
For more information please contact:
Igor Tsoy
Director of Investor Relations and Sustainable Development
Tel.: +7 495 537 8008 (ext. 45882)
E-mail: IR@lsrgroup.ru
You can watch the construction progress of all our projects in a free mobile app:
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OJSC LSR Group published this content on 16 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2020 10:59:04 UTC