FY 2018 Financial Results
March 2019
FY 2018 Financial Results March 2019 Disclaimer By attending the - - PowerPoint PPT Presentation
FY 2018 Financial Results March 2019 Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to the bound by the following limitations: This presentation does not constitute or form
March 2019
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By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to the bound by the following limitations: This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to 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. 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. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. None of the Company nor any of its shareholders, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain the words «anticipate», «believe», «intend», «estimate», «expect», «will» and words of similar meaning. By their nature forward looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking
affecting these statements. Investment in the Company will also involve certain risks. There maybe additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. 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, cost and synergy of our recent acquisitions and restructuring, the timely development and acceptance of new products, the impact of competition and competitive pricing, the ability to obtain necessary regulatory approvals and the ability to fund our future
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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1 of RUB 30.3 bn, a nine-fold increase YoY
2 of RUB 36.4 bn with adj. EBITDA margin of 25%
and ZIL YUG
3 YoY
bn 4, up 38% YoY
1Cash flow from operations before income taxes and interest paid. 2Hereinafter Adjusted EBITDA equals to Results from operating activities + Depreciation/amortization – (Increase in fair value of Investment property – Decrease in fair value of Investment property) – (Increase in results from operating activities due to write off of change in fair value of the disposed
asset – Decrease in results from operating activities due to write off of change in fair value of the disposed asset) + Impairment losses recognized during the reporting period + Capitalized interest recognized in cost of sales.
3 YoY % change is based on sales without parking 4 YoY % change is based on sales without parking
Source: Audited consolidated IFRS financial statements for the year ended 31 December 2018 and 2017; Company data
SOLID PERFORMANCE STRONG CASH POSITION RECORD HIGH NEW CONTRACT SALES RUB 186 BN GROUP PORTFOLIO
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A slight YoY decrease in adjusted EBITDA margin largely reflects the
(Energetikov 9) in St. Petersburg , previously used as one of the Company’s Reinforced Concrete-NW production facilities A 6% YoY increase in revenue was primarily driven by strong sales across all regions
RUB m
Revenue Adjusted EBITDA
138 494 146,376
2017 2018 6%
RUB m
36 845 36 400
2017 2018
27% 25%
1%
Source: Company data
154.51 159.33
2017 2018
15 871 16 230
2017 2018
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RUB m
Profit for the Year up 2% YoY
RUB
Profit for the Year EPS
Stable earnings per share in line with 2017
2% 3%
Source: Company data
32 297 35 553
2017 2018
111 216 116 592
2017 2018
5%
RUB m
RUB m
Revenue Adjusted EBITDA
10%
Increase in the segment’s revenue and Adjusted EBITDA was primarily driven by solid performance across all regions Adjusted EBITDA margin expanded to 30% reflecting a more profitable product mix
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29% 30%
Source: Company data
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St Petersburg
Moscow Urals
RUB m RUB m RUB m
8 463 9 218 1 800 2 140
2017 2018
Revenue
71 559 68 639 22 374 20 771
2017 2018
Revenue
31 101 38 397 8 195 12 699
2017 2018
Revenue
Source: Company data
17 362 19 144
2017 2018
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Lower adjusted EBITDA reflects the one-off profit recognition in 2017, following a land plot sale (Energetikov 9) in St. Petersburg, previously used as one of the Company’s Reinforced Concrete-NW production facilities
RUB m RUB m
6 571 4 000
2017 2018
21%
Revenue Adjusted EBITDA
10% 39%
A 10% YoY revenue growth was primarily driven by strong sales
38%
Source: Company data
8 910 9 392
2017 2018
5 671 7 211
2017 2018
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Distribution expenses Administrative expenses
RUB m RUB m
Higher distribution expenses were attributable mainly to an increase in transportation costs due to rising sales volumes of crushed granite (+26% YoY) and sand (+41% YoY)
27% 5%
An increase in administrative expenses mainly resulted from higher charitable contributions
As % of revenue
6% 6%
As % of revenue
4% 5%
Source: Company data
Bank and other loans 83% Bond issues 17% Finance lease liabilities 0,01%
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(2017: RUB 43,073 mln)
RAEX – ruA, outlook stable
Debt structure Strong liquidity position
RUB m
72 786 86 088 29 713 55 798 2017 2018 Total debt Cash and cash equivalents 11 336 29 910 38 305 6 350 187 2019 2020 2021 2022 2023+
RUB m
Debt maturity profile
Source: Company data
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Total dividends paid Dividend per share
LSR Group paid out a total of RUB 8.0 bn cash dividends (RUB 78.00 per ordinary share) for 2017
1 500 2 000 2 000 4 100 8 000 8 000 8 000 8 000
2010 2011 2012 2013 2014 2015 2016 2017
15 20 20 40 78 78 78 78
2010 2011 2012 2013 2014 2015 2016 2017
RUB RUB m
Source: Company data
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10% YOY INCREASE IN ASSESSED VALUE PER SQM BREAKDOWN BY GEOGRAPHY
Yekaterinburg Moscow 43% Leipzig
TOTAL AREA OF LSR GROUP SITES COMPOSING CURRENT SALES PORTFOLIO YET TO BE SOLD AND LEASED IN OUR PROJECTS1 IN ALL MARKET SEGMENTS
RUSSIA
GERMANY
HA
PROJECTS
PROJECTS
Operating
Commercial Elite Mass Market Business class 36.0% 39.1% 11.8% 10.1% 3.0%
31 Dec 2018
RUB 186 BN
Mass Market 40.9% 37.8% 13.0% 5.6% 2.6% Operating
Commercial Elite Business class
31 Dec 2017
RUB 185 BN
market value for assets in key cities as % total
51% 4% 2%
1 The figure does not include parking
Source: Knight Frank report as of 31. December 2018
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BY MARKET SEGMENT NSA (TH. M2) % OF TOTAL MARKET VALUE, RUB MLN % OF TOTAL
Mass market residential 5 413 69.3% 66 729 36.0% Elite class residential 210 2.7% 21 835 11.8% Business class residential 2 079 26.6% 72 620 39.1% Operating offices 25 0.3% 5 605 3.0% Commercial 88 1.1% 18 773 10.1% Total 7 815 100% 185 561 100%
BY STAGE NSA (TH. M2) % OF TOTAL MARKET VALUE, RUB MLN % OF TOTAL
Completed 92 1.2% 21 695 11.7% Design 966 12.4% 27 422 14.8% Concept development 3 027 38.7% 27 925 15.0% Construction 3 706 47.4% 102 914 55.5% Operating offices 25 0.3% 5 605 3.0% Total 7 815 100% 185 561 100%
BY REGION NSA (TH. M2) % OF TOTAL MARKET VALUE, RUB MLN % OF TOTAL
St Petersburg 5 212 66.7% 94 776 51.1% Moscow 1 875 24.0% 79 053 42.6% Yekaterinburg 699 8.9% 7 763 4.2% Germany 29 0.4% 3 969 2.1% Total 7 815 100% 185 561 100%
Source: Knight Frank report as of 31. December 2018
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Operating offices 0.3% Completed 1.2% Construction stage 47.4% Design and concept stage 51.1% Enough for 5 years of development1
15 LARGE LAND BANK A LEADING PLAYER IN KEY STRATEGIC MARKETS BALANCED CUSTOMER EXPOSURE SCALABLE LAND BANK SHAREHOLDER VALUE CREATION
#1 in St. Petersburg
RUB 36.3 BILLION
Distributed in dividends
8 YEAR TRACK RECORD
Of dividend payments supported by well-invested cash generative building materials business
PAYOUT RATIO AROUND 80%
Average payout ratio since 2010
#3 in Moscow
ONE OF THE ONLY RUSSIAN DEVELOPERS WITH SIGNIFICANT PRESENCE IN KEY REGIONS 7.8 MILLION m2 OF NET SELLABLE AREA WITH MARKET VALUE OF RUB 186 BILLION STRONG FOCUS ON SHAREHOLDER RETURNS THROUGH DIVIDENDS
#1 in Yekaterinburg
LEADING POSITION
PRESENCE IN THE MASS MARKET, BUSINESS AND ELITE SEGMENTS
1 2 3 4
By area
STABLE DIVIDENDS FLOW HIGH QUALITY PORTFOLIO
By value Operating
Commercial 10.1% Elite 11.8% Business Class 39.1% Mass market 36.0%
Note: respective rankings on market position are based on m2 under construction as of 31.12.2018.
1Assuming construction of 888 m2 per annum (2018 completions)
Source: Company data, ERZ, Knight Frank report as of 31. December 2018
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MOSCOW SEPTEMBER 2017 FEBRUARY 2019
Total NSA
Unsold NSA Open Market Value
Source: Knight Frank report as of 31. December 2018
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MOSCOW JANUARY 2017 FEBRUARY 2019
Total NSA
Unsold NSA Open Market Value
Source: Knight Frank report as of 31. December 2018
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NOVEMBER 2017 FEBRUARY 2019
Total NSA
Unsold NSA Open Market Value
Source: Knight Frank report as of 31. December 2018
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NOVEMBER 2017 FEBRUARY 2019
Total NSA
Unsold NSA Open Market Value
Source: Knight Frank report as of 31. December 2018
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Total NSA
Unsold NSA Open Market Value YEKATERINBURG MARCH 2017 FEBRUARY 2019
Source: Knight Frank report as of 31. December 2018
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REAL ESTATE1 4Q 2017 4Q 2018 Change % 4Q 2018
ADJUSTED
2017 2018 Change, % 2018
ADJUSTED
New contract sales, th. m2 216 300 39% 319 640 920 44% 1 002 Completed, th. m2 690 739 7% 818 909 888 (2%) 1 009 Real Estate - St. Petersburg New contract sales, th. m2 146 193 32% 200 407 562 38% 599 Completed, th. m2 466 550 18% 589 607 644 6% 715 Real Estate – Moscow New contract sales, th. m2 36 64 78% 73 122 199 63% 236 Completed, th. m2 182 114 (38%) 153 193 114 (41%) 153 Real Estate – Yekaterinburg New contract sales, th. m2 35 44 27% 46 110 159 45% 167 Completed, th. m2 42 76 79% 76 109 131 20% 140 BUILDING MATERIALS1 Product 4Q 2017 4Q 2018 Change % 2017 2018 Change, % Crushed granite, th. m3 1 445 1 760 22% 5 975 7 540 26% Sand, th. m3 1 992 2 665 34% 7 564 10 699 41% Ready-mix concrete, th. m3 243 274 13% 1 052 1 135 8% Bricks, million units 62 71 15% 290 300 4% Reinforced concrete, th. m3 60 27 (55%) 234 160 (32%) Aerated concrete, th. m3 310 313 1% 1 509 1 418 (6%)
1 Operating results in these tables are rounded to whole numbers, % change calculations are based on the full figures
*ADJUSTED figure including parking at a conversion rate of 30 m2 per parking lot Source: Company information
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For more information please contact: Igor Tsoy Director of Investor Relations and Sustainable Development E-mail: IR@lsrgroup.ru