Page 113 - RusRPTJan22

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Beluga Group was the sole bidder to acquire the Staraya Moskwa and Zimnaya Doroga vodka brands from Krystall-Lefortovo for RUB104mn.
The company has already signed a corresponding agreement on these brands, while production is to start at its own plants next year. Both names have good brand recognition and a loyal customer base in Moscow (where Beluga is rolling out its WineLab chain), having been on the market for more than ten years.
Beluga Group is the leading vodka producer in Russia (13% market share), with more than 150 vodka brands and production capacity of 21mn 9l cases. The share of vodka in total production and distribution revenues was 45% as of 1H21.
Adding the respective brands will allow the company to diversify its portfolio and strengthen its positions in Moscow, where it has been actively developing its own retail network WineLab. The latter comprises 800 outlets (as of October) and printed sales growth of 27% y/y in 9mo21, in line with our annual estimate (25% y/y for 2021F). For 2021F, we model the segment to account for 35% of the company’s consolidated 2021F turnover.
Lenta announced the acquisition of online grocer Utkonos for RUB20bn from Severgroup, which controls 78% of Lenta on December 16. This does not come as a surprise since Severgroup acquired Lenta in mid-2019.
Utkonos pioneered online food sales in 2000 and for years was the leading company but, due to a stagnating business plan, had dropped to the #8 spot by 9mo21, with turnover of RUB13bn.
The transaction implies a P/Sales multiple of 1x vs. the 0.3x average for X5 and Magnit. However, we see few cross-read price conclusions as the buyer and the seller have the same majority shareholder (and financing structure).
E-grocery is the most rapidly growing e-commerce sector, surging 2.5x y/y to RUB240bn in 9mo21. INFOLine forecasts that it will spike 6.4x to RUB2.5tn in the next five years. We estimate that four companies could pass RUB35bn of turnover each in 2021F, on our numbers: Sbermarket, Vkusvill, X5 Group and Samokat (which have market shares of 10-13%).
X5 Group is leading the online transformation among traditional
113 RUSSIA Country Report January 2022 www.intellinews.com