Moscow, Russia – 2 December 2021 – Sistema PJSFC (“Sistema”, the “Corporation”, or together with its subsidiaries and affiliates the “Group”) (LSE: SSA, MOEX: AFKS), a Russian publicly traded investment company, announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the third quarter of 2021 (3Q 2021) ending 30 September 2021.
KEY HIGHLIGHTS IN 3Q 2021 AND AFTER THE END OF THE REPORTING PERIOD
Monetising stake in Segezha Group. In October 2021, Sistema signed an agreement to sell a stake in Segezha Group to Bonum Capital for USD 150 million.
Segezha Group’s acquisition of forestry assets in Siberia. In October 2021, Segezha Group reached an agreement to acquire 100% of LLC Inter Forest Rus, which owns 24 forestry assets in Krasnoyarsk Krai and the Irkutsk region with a substantial forest resource base, from Bonum Capital for USD 515 million. The transaction will double Segezha Group’s annual allowable cut and make the Company one of the largest leaseholders of forest land globally.
Acquisition of Nearmedic Group. In September 2021, JSC New Investment Holding, jointly controlled by Sistema and Sberbank, acquired Nearmedic Group, which does business in the pharmaceuticals, biotechnology and healthcare sectors. Sistema has the right to acquire Sberbank’s equity interest in JSC New Investment Holding and Sberbank has the right to sell its interest to Sistema on certain conditions.
Sistema’s divestment of Sistema Capital LLC. In September 2021, Sistema signed binding agreements for the sale of a 70% stake in the charter capital of Sistema Capital for RUB 3.5 bln.
Payment of dividends for FY 2020. In August 2021, Sistema, in line with its approved dividend policy, paid dividends for FY 2020 of RUB 2,991.5 million, or RUB 0.31 per ordinary share.
Sistema stock buyback. In 3Q 2021, Sistema repurchased 74.7 million ordinary shares, representing 0.77% of its charter capital, for RUB 2,201 million. The current buyback programme provides for the repurchase of up to RUB 7.0 billion worth of the Corporation’s ordinary shares by a wholly owned subsidiary of Sistema through 17 September 2022. The maximum number of shares to be repurchased under the Programme is capped at 343 million.
Continued debt portfolio optimisation. In 3Q 2021, the Corporation placed RUB 15 billion of series 001P-21 bonds with a semi-annual coupon rate of 8.40% per annum, as well as RUB 15 billion of series 001P-22 bonds with a quarterly coupon rate of 8.20% per annum. The put option on both series of bonds is in five years. In November 2021, the Corporation completed bookbuilding for a RUB 5 billion series 001P-23 bond issue with a quarterly coupon rate of 9.95% per annum.
Improved credit rating outlook. In September 2021, Expert RA revised the outlook for the Corporation’s credit rating upward from stable to positive, and affirmed the rating at ruAA-.
Superior ratings for Sistema’s ESG practices. In October 2021, Sistema rated among the three leading companies in an ESG ranking of Russian publicly traded financial companies compiled by the National Rating Agency (NRA). The NRA ranking included 30 leading banks, financial institutions, infrastructural institutions and insurance companies, and named Sistema among the companies with the highest level of sustainability practice in their core operations.
3Q 2021 FINANCIAL RESULTS
Consolidated revenue grew by 21.8% year-on-year to RUB 225.1 billion.
Adjusted OIBDA increased by 4.7% year-on-year to RUB 75.0 billion.
Adjusted OIBDA margin was 33.3%.
Adjusted net profit was RUB 2.3 billion.
Vladimir Chirakhov, President and Chief Executive Officer of Sistema, said:
“Sistema’s results for 3Q 2021 underscore the Corporation’s ability to grow the value of its portfolio assets. We again accelerated the growth of our business, increasing Group revenue by 22% year-on-year and adjusted OIBDA by 5%. The key drivers of Sistema’s growth were our consolidated public assets – MTS and Segezha Group – as well as the performance of our fast-growing non-public asset Steppe.
“MTS maintained high revenue and adjusted OIBDA growth rates thanks to increased consumption of telecoms services and the contribution of segments beyond connectivity, which accounted for more than 60% of the Company’s growth. Segezha Group continues to develop its vertically integrated business model, and as a result revenue for the period grew by more than a third, while adjusted OIBDA more than doubled. Steppe achieved accelerated revenue and adjusted OIBDA growth rates of 88% and 134% year-on-year, respectively, due to a record grain harvest and growth of global wheat prices.
“In the third quarter we fully consolidated the results of Binnopharm Group, our pharmaceuticals holding, for the first time. The company accelerated revenue growth to 28%, while OIBDA increased by almost 1.5x year-on-year. We believe that Binnopharm Group could become a major driver of growth in the value of the Corporation’s portfolio.
“OZON continues to set new records across all key metrics. In 3Q growth of GMV including services reached 145% year-on-year, driven by record order numbers as well as record numbers of active users and marketplace sellers. Importantly, we continue to see substantial growth potential for OZON and support the Company’s strategy to grow its presence in the Russian e-commerce market, including by increasing investments in logistics infrastructure and assortment.
“Major events of recent months include Segezha Group’s announcement of the acquisition of forestry assets in Siberia from Bonum Capital for USD 515 million. Sistema has also agreed to sell a minority stake in Segezha Group to Bonum Capital for USD 150 million. Both transactions create significant value: Segezha Group will practically double its annual allowable cut and become one of the largest leaseholders of forest lands globally, while Sistema will be able to partially monetise its investments in Segezha Group.
“Finally, we continue to invest in fast-growing and high-potential sectors. In September we took an important step to further strengthen our presence in the Russian pharmaceuticals market through the joint acquisition with Sberbank of Nearmedic Group.”
Sistema’s management will host a conference call today at 9:00 am (New York time) / 2:00 pm (London time) / 3:00 pm (CEST) / 5:00 pm (Moscow time) to present and discuss the 3Q 2021 results.
To participate in the conference call, please dial:
+7 495 283 98 58
+44 203 984 9844
+1 718 866 4614
+49 30 25 555 323
+46 10 551 30 20
Link to webcast: https://mm.closir.com/slides?id=657738
Or quote the conference call title: Sistema Third Quarter 2021 Financial Results.
A replay of the conference call will be available on Sistema's website www.sistema.ru for at least seven days after the event.
Tel: +7 (495) 730 66 00
Tel.: +7 (495) 228 15 32