Etalon Group Delivers 35 ths sqm of NSA at Galant

02 July 2014

Etalon Group Delivers 35 ths sqm of NSA at Galant

Etalon Group Limited ("Etalon Group" or the "Company"), one of Russia's largest and longest-established residential real estate developers, announces that it has delivered the second phase of project Galant in St. Petersburg. Three residential buildings ranging from 10 to 14 stories high with built-in commercial premises were delivered in June 2014. The total NSA of the completed buildings is 35 ths sqm.

The buildings were completed precisely in line with Etalon Group's 2014 construction plan, which envisions total deliveries of 584 ths sqm of NSA at seven different projects, representing a 25% year-on-year increase over 2013 deliveries. 

Galant is a comfort class residential project located in the Moskovskiy District of St. Petersburg. The first building at project Galant, with an NSA of 11 ths sqm, was delivered in December 2013. One office building and a parking complex remain under construction and are scheduled for delivery in December 2014.

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

http://www.etalongroup.com/investors/news/ 

Etalon Group IR Team

T: +44 20 8123 1328 

E: info@etalongroup.com 

EM

Sam VanDerlip

T: +44 7554 993 032

T: +7 916 306 6112

vanderlip@em-comms.com 

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 more than 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 construction 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 2013, Etalon Group's portfolio comprised 28 projects, with a total of 3.44 million sqm of unsold net sellable area ("NSA") in the St. Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this portfolio at USD 2,727 million, a 15% increase in the market value from YE 2012.

For the year ended 31 December 2013, Etalon Group's new contract sales totalled 356,075 sqm, or RUB 30,227 million. Deliveries in 2013 totalled 468 thousand sqm.

The Company recorded revenues of RUB 39.9 billion and EBITDA of RUB 9.4 billion, with an EBITDA margin of 24% for the year ended 31 December 2013, making it one of the most profitable players in the sector.

Etalon Group's net debt position at 31 December 2013 was RUB 182 million, leaving it well positioned to fund continued dynamic growth.