Page 156 - RusRPTJan21

adjusted EBITDA returned to solid growth (+25% YoY and +21% YoY, respectively) after dropping in 2Q20 thanks to the performance of the average ticket (+34% YoY).
Net financial liabilities at the corporate center fell 17% YoY and 15% QoQ to RUB 166bn, which was slightly better than we expected. Corporate center SG&A dropped 69% YoY to RUB 1.1bn mainly due to the high base effect of 3Q19.
Sistema’s management sees room for its FY20 dividends to double if the trends observed in 9M20 continue into 4Q20. This implies a dividend payout of around RUB 2.5bn. Although the potential dividend payout for FY20 is a bit higher than we forecasted (RUB 2.1bn), it still implies a yield of less than 1%.
Management expects to present an updated dividend policy to the BoD in 2021E.
Sistema is not planning to monetize its stake in OZON after the lock-up period, according to comments made by Sistema’s CEO Vladimir Chirakhov on the company’s 3Q20 conference call. Sistema believes in the investment attractiveness of OZON and sees room for its share price to appreciate over the next several years.
Segezha has started to see some improvement in the pricing environment. For example, the demand for paper sacks from the European construction industry has recovered after falling in 1H20. That said, Sistema did not provide any details on a potential IPO for Segezha, stating that no final decision has been made.
We see the 3Q20 results, which featured strong trends across Sistema’s key portfolio assets, as supportive for the stock. We also think Sistema’s intention to keep its stake in OZON could be beneficial for the company. In our view, keeping this stake would allow Sistema to maintain an attractive asset mix with exposure to the rapidly growing Russian e-commerce sector, while the increased share of public assets in its portfolio should make its NAV more visible and transparent to the market.
156 ​RUSSIA Country Report​ January 2021 www.intellinews.com