Etalon Group Incorporates Strategy Committee

25 June 2012

St. Petersburg – Etalon Group Limited (“Etalon Group” or the “Company”), one of Russia’s largest and oldest residential real estate developers, announces the incorporation of the Strategy Committee of the Board of Directors and the appointment of Anton Poriadine as the committee chairman.

Anton Poriadine has over 10 years of experience in strategy consulting with A.T. Kearney, where he is a partner and vice president. He has also worked in a number of roles prior to A.T. Kearney, including project manager at Barents International Markets B.V., corporate development and project finance director at Torno Internazionale S.p.A., and deputy general manager of the St. Petersburg Foundation for Enterprise Development. Mr. Poriadine graduated from the St. Petersburg Technical University and holds an MBA from the University of Rochester Business School.

In his role as chairman of the Strategy Committee, Anton Poriadine will be responsible for guiding Etalon Group’s post-IPO development by providing carefully considered strategic inputs to the Company’s management. Alexander Shkuratov, formerly head of strategy and business development at Etalon Group, remains a member of the Board of Directors and has been appointed as an advisor to the President of the Company.

Etalon Group completed its post-IPO acquisition program of 1.2 million sqm of NSA with the recent acquisition of project Galactica, which is an unprecedented landmark project for both the Moscow and St. Petersburg markets. With over USD 500 million of expansion capital and USD 170 million of net cash on its balance sheet*, the Company views its financial position as stable, and it plans to pursue further strategic expansion opportunities.

* per unaudited management accounts as of 1 May 2012

Recent Etalon Group highlights:

  • 11 June 2012: Etalon Update on Construction Permit, Sales Network
  • 6 June 2012: Etalon Group Receives Planning Permit for Tsar’s Capital
  • 29 May 2012: Etalon in Largest St. Petersburg Acquisition to Date
  • 21 May 2012: Etalon Announces New Acquisitions & 8-Step Program
  • 16 April 2012: Etalon Reports 1Q 2012 Operating Results
  • 29 March 2012: Etalon Reports 64% Increase in IFRS Net Profit
  • 06 March 2012: Etalon Real Estate Portfolio Market Value Up 20%

These and other recent announcements are available on the Etalon Group website:

Etalon Group IR Team

T: +44 (0) 20 8123 1328

M: Communications

Sam VanDerlip
T: +7 495 363 2845

Tom Blackwell
T: +7 495 363 2841

About Etalon Group

History and Overview

Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest residential real estate developers. With a 25-year history, the Company has one of the longest and most successful track records in the Russian real estate industry.

Today Etalon Group is a leading player in Russia’s “Golden Triangle” – St Petersburg, Moscow and the greater Moscow area, with a dominant position in the “comfort class” segment. The Company’s strong foothold in these markets is reinforced further by its unique nationwide sales network covering 9 of the 10 wealthiest regions of Russia, and spanning 30 cities in total. The sales network generates up to 30% of Etalon Group’s revenue, and has been an important source of stable demand even throughout the crisis.

Etalon Group is one of the only truly vertically integrated businesses in the Russian real estate sector. The Company does everything from acquiring land to sales and cash collections from its customers, which enables it to maximise margins throughout the value chain, and reduces exposure to cost inflation from external service providers. Etalon Group is a company of scale, with a total of 40 business units that employ over 4,000 people, two strong management companies, five general contractors, 16 subcontractors, a crane company, a brick factory and a nationwide sales network.

Etalon Group’s strong financial position is driven by its effective pre-sales business model. The Company aims to pre-sell 70-90% of all residential space before a building is delivered. It also targets an average down payment of 50%. This allows Etalon Group to finance the construction process using money from customers, as opposed to using the loans or funding from shareholders.

In addition to homebuilding, Etalon Group’s long history and superior quality offering has helped it to become a trusted industrial construction partner for clients like General Motors, Toyota, Ford Motors, Bosch, Siemens, Nissan, Suzuki and Gazprom in northwest Russia.

Since 20 April 2011, Etalon Group Limited has had its GDRs traded on the Main Market of the London Stock Exchange.

Operational and Financial Highlights

As of 31 December 2011, Etalon Group’s portfolio comprised 31 projects, with a total of 3.25 million sqm of unsold net sellable area ("NSA") in the St. Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this portfolio at USD 1,714 million, a 20% increase in the market value from YE 2010.

For the year ended 31 December 2011, Etalon Group’s new contract sales totalled 270,012 sqm, or RUR 18,306 million. Deliveries in 2011 totalled 328 thousand sqm.

The Company recorded revenues of RUB 22.7 billion (USD 774 million) and EBITDA of RUB 8.2 billion (USD 279 million), with an EBITDA margin of 36% for the year ended 31 December 2011, making it one of the most profitable players in the sector.

Etalon Group’s net cash position at 31 December 2011 was USD 167 million, leaving it well positioned to fund continued dynamic growth.