Sistema PJSFC (SSA)
Sistema PJSFC: Sistema announces financial results for the first quarter 2021
15-Jun-2021 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Sistema announces financial results for the first quarter 2021
Moscow, Russia - 15 June 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, today announces its
unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the
first quarter of 2021 (1Q 2021) ending 31 March 2021.
KEY GROUP HIGHLIGHTS IN 1Q 2021 AND AFTER THE END OF THE REPORTING PERIOD
? Segezha Group IPO. In April 2021, Segezha Group completed an IPO on Moscow Exchange. The company raised RUB 30
billion, which will be used to finance its investment programme and optimise its debt portfolio. At the time of the
IPO, the company's market capitalisation was RUB 125.5 billion, with a free float of 23.9%. The Corporation's stake
is 72.0%[1].
? Development of the pharmaceutical business. In February 2021, Sistema and its financial partner VTB contributed
their 56.2% stake in OJSC Sintez to the equity of Binnopharm Group with the aim of creating a unified
pharmaceutical holding. Concurrently, Sistema, VTB and a consortium of investors consisting of the Russia-China
Investment Fund (a fund established by the Russian Direct Investment Fund and China Investment Corporation) and
major Middle East funds ("the ?onsortium") contributed an 85.6% stake in JSC Alium to the equity of Binnopharm
Group. In March 2021, Sistema acquired a 32.4% stake in Sintez from JSC National Immunobiological Company,
controlled by Rostec Corporation, and in May 2021 contributed this stake to the authorised capital of Binnopharm
Group.
? New dividend policy. In May 2021, the Board of Directors approved a new dividend policy, according to which the
Corporation will strive to pay dividends once a year in the amount of at least RUB 0.31 per share in 2021, RUB 0.41
per share in 2022 and RUB 0.52 per share in 2023. In addition to the basic dividend, the Board of Directors has
recommended that, starting from 2022, Sistema distribute 10% of the absolute growth in its adjusted OIBDA for the
previous year to shareholders in the event that the Corporation delivers absolute OIBDA growth of more than 5% for
the previous year and that the net debt / OIBDA ratio does not exceed 3.0x as of the end of the preceding year.
? Active debt capital markets programme. In February 2021, the Corporation completed a secondary placement of series
001P-07 exchange-traded bonds. The Corporation repurchased RUB 2.8 billion in bonds out of the total of RUB 10
billion in the issue through a tender offer. All bonds repurchased during the tender offer the Corporation sold
through a secondary placement at 99.55% of the nominal price. Also in February 2021, Sistema placed RUB 5 billion
of series 001P-18 series and RUB 12.5 billion of series 001P-19 bonds with coupon rates of 6.90% per annum and
7.35% per annum, respectively. In April 2021, the Corporation placed RUB 10 billion of series 001P-20 bonds with a
semi-annual coupon rate of 8.20% per annum.
? Improved credit rating outlook. In May 2021, S&P affirmed Sistema's rating at BB and revised its outlook upward to
positive. The upgrade of S&P's outlook reflects the Corporation's success in increasing the share of liquid assets
and growing the overall value of the portfolio as a result of the IPOs of Ozon and Segezha Group. S&P also noted
the resilience of Sistema's diversified portfolio, which delivered impressive operational results in 2020 despite
the global COVID-19 pandemic, as well as steady cash flows at the Corporate Centre level. The 'positive' outlook
means that the rating may be upgraded over the next 12-18 months.
? Sistema's stock buyback. Launched on 17 September 2019, the programme provides for the repurchase of up to RUB 3.0
billion worth of the Corporation's ordinary shares by a wholly owned subsidiary of Sistema. The maximum number of
shares to be repurchased under the Programme is capped at 300 million. As of 15 June 2021, 128.8 million shares had
been repurchased for a total of RUB 1.9 billion.
? MTS stock buyback. In March 2021, Sistema, Sistema's wholly owned subsidiary Sistema Finance S.A. and LLC Sistema
Telecom Assets concluded a sale and purchase agreement for shares and American depositary shares of PJSC MTS as
part of the new MTS share buyback programme totalling up to RUB 15 billion and running to 31 December 2021. Through
the programme, in May 2021, Sistema's wholly owned subsidiary Sistema Finance S.A. sold 7,457,468 shares of PJSC
MTS in the form of American depository shares for a total consideration of approximately RUB 2.368 billion to LLC
Bastion, a wholly owned subsidiary of MTS. In June 2021 Sistema Finance S.A. sold 6,847,936 ordinary shares of MTS
and 1,216,644 shares of MTS in the form of American depository shares to LLC Bastion, respectively, for the total
amount of approximately RUB 2.648 billion. As of 04 June 2021, Sistema's effective stale in MTA amounted to
50.3023%
PROGRESS IN ESG
? New ESG policies approved. In May 2021, Sistema's Board of Directors approved an Environmental Policy and a Human
Rights Policy. These documents detail the Corporation's approach to sustainability management and set benchmarks
for portfolio companies.
1Q 2021 FINANCIAL HIGHLIGHTS
? Consolidated revenue grew by 8.4% year-on-year to RUB 171.5 billion.
? Adjusted OIBDA[2] increased by 6.1% year-on-year to RUB 56.9 billion.
? Adjusted OIBDA margin was 33.2%.
? Adjusted net loss attributable to Sistema was RUB 2.4 billion.
Vladimir Chirakhov, President and Chief Executive Officer of Sistema, said:
"In the first quarter of 2021 Sistema accelerated growth of its financial indicators and increased revenue and adjusted
OIBDA by 8% and 6% year-on-year, respectively. This growth was due to the strong results of our key consolidated
portfolio companies. MTS demonstrated solid growth of its core business, despite lower revenue from international
roaming, and achieved significant progress in developing an ecosystem of digital services. Our export-oriented assets
Segezha Group and Agroholding Steppe delivered strong performance amid favourable macroeconomic conditions - recovery
in demand from the construction industry and growth in global grain prices. Medsi achieved significant positive
dynamics in revenue and OIBDA, driven by both routine medical care and services related to COVID-19.
"Our non-consolidated portfolio companies have also delivered strong performance. Ozon achieved 134.5% year-on-year
growth in GMV on the back of significant increase in both the active customer base and order frequency. This was mainly
thanks to the marketplace development supported by a four-fold year-on-year increase in the number of sellers.
Binnopharm Group grew its revenue by 38% and increased OIBDA four-fold year-on-year thanks to higher sales in both
hospital and retail segments, as well as successfully capturing synergies between the holding's businesses.
"We continue the transformation of our portfolio while making new sectors of the Russian economy accessible for Russian
and international investors via IPOs of our portfolio companies. In April 2021, we completed the IPO of Segezha Group,
as a result of which the company raised RUB 30 bln and achieved a market capitalisation of RUB 125.5 bln. The proceeds
will allow the company to reduce debt leverage and implement a number of major investment projects which should
significantly contribute to the scale of the business.
"Over recent months the Corporation has made significant process in developing its pharmaceuticals business, after
combining stakes in our pharma assets into Binnopharm Group. We are continuing to scale the business, including through
M&A transactions, as part of our strategy to create one of the country's leading pharmaceuticals producers. To achieve
this Binnopharm Group may also raise external capital through a variety of instruments, including a potential IPO or
debt placements.
"We strongly believe that the Corporation's success should translate into growth in dividend income for our
shareholders. Under the new dividend policy adopted by the Board in May, we are offering fixed dividends which will be
growing every year and total approximately RUB 3 billion in 2021, approximately RUB 4 billion in 2022 and approximately
RUB 5 billion in 2023. Furthermore, starting from 2022 provided Sistema delivers strong financial results and maintains
financial discipline, the Corporation will additionally distribute to shareholders 10% of the absolute growth of OIBDA
[3] for the previous year."
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Conference call information
Sistema's management will host a conference call today at 10:00 am (New York time) / 3:00 pm (London time) / 4:00 pm
(CEST) / 5:00 pm (Moscow time) to present and discuss the 1Q 2021 results.
To participate in the conference call, please dial:
Russia
+7 495 283 98 58
UK
+44 203 984 9844
USA
+1 718 866 4614
Germany
+49 30 25 555 323
Sweden
+46 10 551 30 20
Conference ID: 657738
Link to webcast: https://mm.closir.com/slides?id=657738
Or quote the conference call title: "Sistema First 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.
For further information, please visit www.sistema.ru or contact:
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