IPO. In April 2021, Segezha Group completed an IPO on Moscow Exchange, attracting a wide range of institutional investors from across Europe, the United Kingdom, the United States and Asia, along with a sizeable number of both institutional and retail investors from Russia. The Company raised RUB 30 billion as a result. Upon completion of the IPO, Segezha Group's free float was 23.9%. Sistema's stake amounts to 72.0%[11]. Segezha Group's shares are included in Moscow Exchange's Level 1 quotation list.

New dividend policy. In April 2021, Segezha Group's Board of Directors approved an updated dividend policy, according to which the company will strive to pay dividends at least once a year. Segezha Group intends to pay out dividends in an amount ranging from RUB 3 billion to RUB 5.5 billion every year from 2021 to 2023. Starting from 2024, the distribution of dividends is expected to be based on adjusted free cash flow.

AGROHOLDING STEPPE

ONE OF RUSSIA'S LARGEST AGRICULTURE HOLDINGS AND LANDOWNERS


(RUB mln)[12]                       1Q 2021 1Q 2020 Change 
Revenue                             6,751   4,836   39.6% 
OIBDA                               1,197   724     65.4% 
OIBDA margin                        17.7%   15.0%   2.8 p.p. 
Operating profit                    892     478     86.7% 
Net profit attributable to Sistema  299     122     145.3% 

Steppe's revenue for 1Q 2021 increased by 39.6% year-on-year to RUB 6.8 billion mainly due to increased revenue in the Field Crops and Agrotrading segments, thanks to the sale of stocks carried over from last year's crop, an increase in agricultural exports and higher global grain prices, positive dynamics in the Dairy Farming segment as a result of an increase in gross milk yield, as well as revenue growth in the Sugar and Grocery Trading segment.

In 1Q 2021, OIBDA increased by 65.4% year-on-year to RUB 1.2 billion mainly due to the execution of an effective trading strategy for the export sale of the company's own and third-party agricultural products, an increase in prices for wheat and corn ahead of the introduction of export duties, as well as an increase in production and in the number of high-yielding dairy cows in the Dairy Farming segment. The OIBDA margin in 1Q 2021 increased by 2.7 p.p. year-on-year to 17.7%. In 1Q 2021, Steppe's net profit increased by 145.3% year-on-year to RUB 0.3 billion, mainly on the back of OIBDA dynamics. Steppe's capex in 1Q 2021 totalled RUB 0.8 billion and was allocated primarily for infrastructure improvements, as well as construction, upgrades to dairy farms and the buy-out of land shares. Net debt in 1Q 2021 increased by 17% year-on-year, driven by investments made in 2020. Steppe's land bank as of the end of the reporting period stood at 566,000 hectares, making the company one of the six largest landowners in Russia. The company has been gradually increasing its land bank through the consolidation of neighbouring land assets. The average export selling price for wheat increased by 14% year-on-year in 1Q 2021. The operating performance of the Dairy Farming segment demonstrated solid growth: in 1Q 2021, gross milk yield totalled about 20 thousand tonnes, an increase of 14.6% year-on-year, and the dairy herd reached 7,043 head as of the end of the reporting period. The average daily milk production per cow in 1Q 2021 was 31.7 kg. Sales volume in the Agrotrading segment since the start of the 2020/2021 season totalled 1,206 thousand tonnes, an increase of 9.4% year-on-year. An increase in export volumes and the execution of an effective sales strategy enabled the segment's strong financial performance. Sales volumes in the Sugar and Grocery Trading segment in 1Q 2021 totalled 57 thousand tonnes. There is steady demand for sugar and grocery products, which had a positive impact on the segment's financial performance.

MEDSI

LEADING PRIVATE HEALTHCARE OPERATOR IN RUSSIA


(RUB mln)                                  1Q 2021 1Q 2020 Change 
Revenue                                    7,240   5,902   22.7% 
Adj. OIBDA[13]                             1,391   1,117   24.5% 
Adj. OIBDA margin13                        19.2%   18.9%   0.3 p.p. 
Operating profit                           630     624     0.9% 
Adj. net profit attributable to Sistema13  495     333     48.6% 

Medsi's revenue grew by 22.7% year-on-year to RUB 7.2 billion in 1Q 2021 due to the recovery in demand for routine medical care amid continuing demand for COVID-19-related services, including testing, chest CT scans and the services of the infectious diseases department in Otradnoe, and also thanks to developments in in-home care and telemedicine.

Adjusted OIBDA increased by 24.5% year-on-year to RUB 1.4 billion in 1Q 2021, following revenue. At the same time, the net debt / adjusted LTM OIBDA ratio remained at a comfortable level of 1.0x. Participation in the Nebo residential development project contributed RUB 0.1 billion to adjusted OIBDA.

In 1Q 2021, the adjusted OIBDA margin increased by 0.3 p.p. year-on-year to 19.2%.

Adjusted net profit grew 48.6% year-on-year to RUB 0.5 billion mainly due to dynamics in adjusted OIBDA.

Revenue from the Clinical Diagnostic Centre (CDC) at Belorusskaya in 1Q 2021 totalled RUB 855 mln. OIBDA reached RUB 332 million, with an OIBDA margin of 39%.

Revenue from the CDC at Krasnaya Presnya in 1Q 2021 totalled RUB 936 mln. OIBDA reached RUB 286 million, with an OIBDA margin of 31%.

Utilisation grew in 1Q 2021 by 6 p.p. year-on-year up to 54% for outpatient facilities and by 9 p.p. year-on-year to 96% for in-patient facilities due to the recovery of activity levels for routine medical care while maintaining additional revenue from COVID-19 diagnostics and treatment.

The average cheque grew by 7.5% year-on-year to RUB 3,000 in 1Q 2021 due to an increase in the share of cost-intensive services in the outpatient segment for COVID-19 diagnostics as well as the higher average cheque for COVID-19 treatment at the Otradnoe hospital.

Floor space increased by 2.4% year-on-year to 215.7 thousand square metres in 1Q 2021 as a result of the opening of new clinics in Moscow.

KEY HIGHLIGHTS IN 1Q 2021 AND AFTER THE END OF THE REPORTING PERIOD

Increase in self-sufficiency. A project is being rolled out to centralise laboratory testing and substitute outsourcing. This focus on meeting diagnostic standards will lead to an increase in laboratory revenue.

Network expansion. Construction of a new multifunctional centre on Michurinsky Prospekt, with more than 34,000 square metres of floor space, is nearing completion, with the opening planned for 1H 2022. The medical centre will include a CDC for children and adults, a daytime in-patient clinic, and a 24-hour in-patient clinic with a centre for high-tech surgery.

In May 2021, a CDC in Shchelkovo, Moscow region, was launched with 3,633 square metres of floor space.

Brisk growth in downloads of the SmartMed telemedicine app and use of digital services. The number of appointments made through the app, excluding instrumental and laboratory diagnostics, now exceeds appointments made through all other channels. In 1Q 2021, the number of telemedicine consultations increased four-fold year-on-year.

Air ambulance service. Medsi, together with one of Russia's largest air ambulance operators, Russian Helicopter Systems, is launching an air ambulance service for patients from several regions of the Russian Federation, including the Moscow region, to the company's clinics. BUSINESS NEDVIZHIMOST

RENTAL ASSETS WITH A UNIQUE POOL OF PROPERTIES


(RUB mln)                           1Q 2021 1Q 2020 Change 
Revenue                             926     988     (6.3%) 
OIBDA                               295     272     8.3% 
OIBDA margin                        31.8%   27.5%   4.3 p.p. 
Operating profit                    169     155     9.2% 
Net profit attributable to Sistema  46      188     (75.3%) 

Revenue at Business Nedvizhimost in 1Q 2021 decreased by 6.3% year-on-year mainly due to a change in the structure of sales revenue, namely: in 1Q 2020, the company sold land plots located both in the Moscow region and in Moscow (Serebryany Bor), but land plots were sold only in the Moscow region in 1Q 2021.

In 1Q 2021, OIBDA increased by 8.3% year-on-year to RUB 0.3 billion, resulting in a 4.3 p.p. increase in the OIBDA margin. This growth was the result of cost optimisation.

Year-on-year net profit dynamics at Business Nedvizhimost in 1Q 2021 were the result of the high base effect in 1Q 2020 due to non-monetary factors.

KEY HIGHLIGHTS IN 1Q 2021 AND AFTER THE END OF THE REPORTING PERIOD Territoria project. Business Nedvizhimost is continuing the active development of a network of co-working spaces at ATS buildings acquired from MGTS. This project will offer potential clients a network of contemporary, comfortable and high-tech flexible offices located both in the centre of Moscow and in densely populated residential areas outside the centre. Co-working members can choose the most suitable location for their business or remain mobile and move among facilities in the network. In addition, the company is working on new service concepts to make more efficient use of the company's assets and promote the Business Nedvizhimost brand.

BPGC

ONE OF RUSSIA'S BIGGEST POWER GRID COMPANIES


(RUB mln)                           1Q 2021 1Q 2020 Change 
Revenue                             5,232   5,841   (10.4%) 
OIBDA                               974     1,910   (49.0%) 
OIBDA margin                        18.6%   32.7%   (14.1 p.p.) 
Operating profit                    264     1,210   (78.2%) 
Net profit attributable to Sistema  180     886     (79.7%) 

Revenue at BPGC in 1Q 2021 decreased by 10.4% year-on-year to RUB 5.2 billion as a result of a decrease in power supply volumes and net supply of electricity due to usage reductions in the oil sector on the back of the OPEC+ agreement.

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