To increase our presence in premium segment and to become the largest housing developer in the mid-market segment
Our goal is to create the largest player in the mid-market segment, with a portfolio that is well-diversified between Moscow and St Petersburg. While maintaining volumes in our core mid-market segment, we also aim to expand into the premium and mass-market segments, with the long-term goal of increasing these two segments to 35%-45% of our portfolio.
- Create the largest player in mid-market segment with a portfolio that is well-diversified between Moscow and St Petersburg
- Use the current opportunity to consolidate business at minimal cost and to diversify portfolio in new markets/segments
Maintain a sustainable financial position by effectively managing the construction cycle
As our business expands, we will keep our debt at a comfortable level. Under new regulations on the financing of development projects, we will accelerate the pace of construction and start pre-sales of properties in order to reduce the cost of debt servicing.
For detailed information on our debt level please refer to section DEBT INSTRUMENTS.
Development Under Current Regulation
- Extension of the construction period to finance a project from property buyers’ funds
- Distributing financing via corporate centre to cover financing gaps for Etalon projects
CASH FLOW AND COSTS:
- Free cash flow can be distributed only after completion of construction due to regulatory restrictions on share purchase agreements
- High financing costs due to high debt financing rates
Development Under New Regulation
- Pre-sales of property prior to construction to reduce the project financing rate to 4%-5%
- Acceleration of the pace of construction to reduce the cost of servicing debt
- Division of projects into smaller stages
CASH FLOW AND COSTS:
- Cash flow distribution after construction is completed
- The cost of construction will increase by 3 – 3.8%(1), which could be offset by price growth
- Moderate impact on profitability owing to price increases in 2018 and early 2019
To increase the efficiency of the development business and monetise related business areas
We aim to improve operating efficiency by strengthening cost control, introducing cutting-edge technology-based monitoring systems, and continuous enhancement of our sales function. we also intend to monetise our maintenance business division.
- Use the window of opportunity associated with changes in industry regulation to replenish a land bank with projects at an acquisition price lower than in the current portfolio.
- Improve operating efficiency due to strengthened cost control.
- Introduce modern digital cost control systems.
- Effectively manage the construction cycle in the new regulatory environment to preserve a positive free cash flow.
- Reduce selling expenses for each signed contract by improving the efficiency of the sales function.
- Implement strict control over general and administrative expenses.
- Sell non-core assets and projects with a low return on capital
Maintanance business monetisation
ANNUAL GROWTH BY
AT LEAST 10%
- Scalable business model thanks to annual growth in deliveries of residential property by Etalon Group as well as ability to service third-party projects at no additional cost to Etalon Group
- Synergy from cooperation with other Sistema’s portfolio companies
To pay consistently growing dividends
We will continue to adhere to our dividend policy, under which Etalon Group aims to pay out dividends equal to 40%-70% of consolidated IFRS net profit
For detailed information on our dividend history please refer to DIVIDENDS page.
To create environmentally friendly living spaces
At every stage of our construction projects, we strive to limit our impact on the environment, minimise energy costs and resource consumption, and provide future residents with a comfortable and environmentally friendly living space.
- Strict compliance with environmental requirements and recommendations
- Electricity consumption reduction
- Fuel consumption reduction
- Construction waste recycling
- Use of modern engineering technologies allowing to decrease water consumption both on the construction sites and in our residential complexes
- Use of environmental friendly materials and the technologies allowing us to improve energy efficiency of our residential complexes
- Greening of the territories of our projects