Etalon Group

Founded in 1987, Etalon Group is today one of Russia’s largest development and construction companies.
Effective
shareholding

29.79 percent

Annual
revenue in 2020

78.7 bn ₽

total unsold
NSA

2.8 mn sqm

under
development

20 projects

Development Strategy

Sistema's strategy in real estate is aimed at increasing the portfolio's value and its subsequent monetization.

Sistema is present in real estate development business through its shareholding in Etalon Group. Sistema acquired a 25% stake in Etalon Group in February 2019 from the family of its founder and largest shareholder Viacheslav Zarenkov for USD 226.6 million. In February 2019, in a separate transaction Sistema sold 51% in Leader Invest, its Moscow-based real estate developer, to Etalon for RUB 15.2 bln. In August 2019 Etalon acquired the remaining 49% in Leader Invest from Sistema for RUB 14.6 bln.

The company is vertically integrated encompassing the full cycle of value creation: from land plot acquisition and project design to construction and property management.  

Etalon Group’s shares have been listed on the London Stock Exchange since 2011 under the ticker ETLN. 

The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas. With a more than 30-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry. Since its foundation, Etalon Group has commissioned 6.6 million sqm of real estate.

Annual revenue
2017201820192020
Share pricesSeptember 28, 2021, 06:45 PM
September 28, 2021, 06:00 PM

The team

Sergey Egorov

Chairman of the Board of Directors

Gennadiy Shcherbina

CEO

Business

Financial performance 2019

+9.3 %

Gross profit growth in 2020

+47.5 %

Pre-PPA EBITDA growth in 2020

21.0 %

Pre-PPA EBITDA margin

+88.9 %

Adj. net profit growth in 2020
In 2020, the Company set a new record in terms of gross income: RUB 22 bln, up by 9.3% from 2019 despite a minor reduction in revenue caused by restrictions on construction works in the Moscow region during the coronavirus lockdown..

One of the Company’s key priorities is to continue cutting SG&A expenses, which dropped by 19.1% at the end of the year in absolute terms. As a result of cost reduction, EBITDA before Purchase Price Allocation (PPA) increased by 47.5% up to RUB 16.5 bln.

Etalon Group generated cash flows at an accelerated pace due to strong sales. The Company generated a positive cash flow from operations before interest, which totalled RUB 3.9 bln net of cash on escrow accounts. Net cash flow adjusted for cash contributed to escrow accounts returned to positive values and amounted to RUB 22.3 bln..

See all Etalon's financial results.


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Integration of Leader-Invest

Integration of Leader Invest into Etalon was completed in 3Q 2019. Since then companies use joint branding under Etalon’s roof. Consolidating real estate business has been value-accretive for both Etalon and Sistema: the former benefit from synergies stemming from operational efficiency, cost reductions and complimentary asset portfolios, while the latter centralised its investment focus on a single public asset with strong corporate governance discipline.
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Construction and installation works

Since 2017, in order to develop non-development businesses, all production and service assets of the Etalon Group are combined under the brand.

EtalonStroy performs a full range of construction and installation works on capital construction sites on its own, both for the needs of the Etalon Group and for third-party customers. EtalonStroy consolidates its production assets and develops the Group's construction business, which is represented by specialized contractors, a modern fleet of machines and mechanisms, factories for the production of construction materials and an advanced research center.

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Assets

204 bn ₽

total assets value as of 31 December 2020

540 thsd sqm

deliveries in 2020
Etalon Group’s total assets comprise 20 projects under development, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 2.8 million sqm, as well as construction and maintenance division. Colliers International valued the Company’s total assets at RUB 204 billion as of 31 December 2020. For the year ended 31 December 2020, Etalon Group’s new contract sales totalled 540 ths sqm, or RUB 79.9 billion. Deliveries in 2020 amounted to 538 ths sqm.
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Corporate governance

Two Sistema representatives received seats on Etalon’s board of directors. Sistema signed an agreement supporting its commitment to high standards of information disclosure and transparency and confirming that any and all transactions (if any) between Sistema and Leader Invest in the future should be carried out on an arm’s length basis, including a guarantee that Sistema’s representatives will abstain from voting on any such matters.
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Service and operation

EtalonStroy consolidates and develops businesses related to the service and operation of real estate. The company provides services for the management of residential and commercial real estate, as well as for its implementation in the regions of the Russian Federation through its own sales network.


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Etalon Group announces partnership with Ozon
3 September 2021
Etalon Group acquires 35% stake in QB Technology
16 August 2021
Ad Hoc Notice
13 May 2021
Etalon Group gets construction permit for first stage of ZIL-Yug project
14 April 2021