Focused strategic approach
We have a track record of successfully executing against our strategy. By staying true to our core competencies, we have built a business with a strong reputation, solid financial position and excellent operational performance. Already a leader in our home base of St. Petersburg, we have now established a strong foothold in the Moscow Metropolitan Area.
There are five key components to our strategy:
#1 Focus on core strength of home building
- We concentrate on developing medium-scale and large-scale residential complexes in the affordable “comfort class” price segment.
- We adapt to changes in market demand by responding to feedback from our extensive sales network and tailoring future projects to match.
- We maintain a vertically integrated business model to control timing, quality and costs.
- We have our own in-house design institute, which helps us to develop projects tailored specifically to Etalon’s market segment and capabilities.
#2 Target key markets of SPMA and MMA
- We intend to remain the leading property developer in the St. Petersburg Metropolitan Area (SPMA).
- We have firmly established our presence in the Moscow Metropolitan Area (MMA), where we continue to increase our market share (target 50/50 split between MMA and SPMA).
- We continue to grow our national sales network to expand our customer base across Russia and fuel sustainable growth.
#3 Disciplined management of landbank
- We plan to maintain enough land reserves to fulfil our needs over the medium term.
- We are currently landbank sufficient until 2018, and are acquiring projects to ensure expansion capacity from 2018 through 2022.
- We do not hold on to projects for future development, but look to minimise the time between acquisition and development.
- We seek to enhance returns by reinvesting capital efficiently.
#4 Prudent attitude to financing
- We focus on pre-sales as a key source of funding for the construction process.
- We have a conservative financial strategy.
- We aim to maintain a low level of leverage, measured by our debt-to-EBITDA ratio.
#5 Maintain strong cash-collections for pre-sales financed business model
- We continue to expand our brand recognition by investing in our sales and marketing operations as well as construction.
- We emphasise customer service to create positive perceptions and enhance our reputation – a virtuous circle.
- We generate sales in large part thanks to our reputation for consistently providing products of the highest quality.
By adhering to our clear strategic priorities, we have provided our shareholders with consistent growth in construction volumes and portfolio value. Since 2010 Etalon Group's total deliveries have grown at a steady pace every year, increasing by 178% over the five-year period. We ended the year with net debt of just RUB 636 and our net debt/EBITDA ratio was 0.06. Our portfolio includes 432 ths sqm of completed & available for sale property, out of which completed & available for sale apartments account for 220 ths sqm – a considerable reserve that requires no additional costs to generate revenue from sale.