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PIK GROUP reports 2019 consolidated financial results

Moscow, March 23, 2020 — PIK Group, the leading Russian residential developer, today announces its audited Consolidated Financial Statements prepared in accordance with IFRS and Assets Valuation Report for the year ended December 31, 2019.

2019 Financial Highlights:

● Total revenue increased by 14.2% to RUB 280.6 billion (2018: RUB 24.8 billion), of which 83% can be attributed to revenue from sale of real estate (2018: 96%), and 17% — to revenue from other operations (2018: 4%)

● Revenue from sale of real estate recognized under historical value increased by 9.7% to RUB 170.1 billion (2018: RUB 155.0 billion). Revenue from sale of real estate recognized under fair value decreased by 21.7% to RUB 63.3 billion (2018: RUB 80.8 billion);

● Gross profit margin amounted to 27.0% (2018: 22.1%). Gross profit margin from sale of real estate amounted to 28.1% (2018: 21.4%); Gross profit margin from sale of real estate recognized under historical value amounted to 33.0%;

● EBITDA increased by 59.9% to RUB 67.0 billion (2018: RUB 41.9 billion). EBITDA margin amounted to 23.9% (2018: 17.1%);

● Net income for the period increased by 67.7% amounted to RUB 45.1 billion (2018: RUB 26.9 billion);

● Corporate net debt as of December 31, 2019 amounted to negative RUB 1.9 billion (December 31, 2018: positive net debt of RUB 2.5 billion).

2020 guidance:

PIK Group plans to maintain a leading position in the housing market in Russia and forecasts total revenue of about RUB 400 billion in 2020.

Commenting on the results, PIK’s President Sergei Gordeev noted:

«PIK showed excellent financial performance and growth in 2019. The Company’s revenue exceeded 280 billion rubles, EBITDA increased by 60%, and net profit by 68%. At the same time, share of revenue from new businesses amounted to 17% in 2019, confirming the success of the strategy for diversification and business development, which undoubtedly positively affects the sustainability and reliability of the Company as a whole.

PIK is fully prepared to work within the framework of the changed regulation of the housing industry — all new projects are put on sale using escrow accounts and their share in 2020 sales is expected to be about 40%.

We continued to develop our industrial business division — thanks to vertical integration, we are able to produce almost everything that is required for construction using our own capacities: facade panels, windows, bathroom pods and paving, we even grow plants for courtyards in our farm. The Company is operating normally in the current economic situation and is not dependent on import and supplies from abroad.

We are constantly launching new projects and services, developing and implementing proprietary IT solutions for the automatization and digitalization of business processes. All this allow our construction sites to work seamlessly — the latest photos and videos on construction progress are always available on the Company’s website. In 2019, we launched the unique IT platform PIK.PRO — it allows to attract skilled workers and scale up the volume of construction and finishing works — almost all apartments in PIK projects are delivered fully finished.

In August 2019 we have launched online sales for apartments, and in December PIK launched online payment for real estate with a card on the website and became the first Russian developer to offer such a service to its customers. More than 200 transactions have already been made online for apartments, storage units and parking spaces, and at the moment we see an increased interest in this service. Overall, we had more than one thousand online sales transactions. PIK solutions allow you to make not just a remote, but a full-fledged online purchase of real estate right from home, without any intermediaries and the collection of additional documents. All processes are automatic, which increases the speed of processing documents several times.

According to the valuation report the Company’s assets as of December 31, 2019 amounted to 608 billion rubles, or 920 rubles per share.

Thanks to sustained level of sales, effective management of our projects and optimization of working capital, the Company’s net debt at the corporate level fell below zero and amounted to minus 1.9 billion rubles. Thus, the Company has confirmed its strong financial position and commitment to a balanced and prudent financial policy. This was additionally reflected in the assignment of a BB- credit rating by the international agency Fitch, the highest level of international rating among Russian developers.

This year, we will continue to work to further improve the operational efficiency and financial stability of the Company, increase the supply of high-quality housing, provided with all the necessary social infrastructure, and also implement various initiatives to improve the level of service for our customers. We believe in the successful development of the Company’s business in 2020 and expect revenue growth by the end of the year to about 400 billion rubles.»

Additional documents:

The Consolidated Financial Statements, prepared in accordance with IFRS, for 12 months ended December 31, 2019 can be found under the following link:

Conference call details:

Date: March 23, 2020

Time: 17:00 Moscow / 15:00 London / 10:00 New York

Title: PIK Group 2019 IFRS Results

Passcode: 84306147#

Domestic line: +7 495 646 93 15

UK international tel.: +44 207 194 37 59

Enquiries:

PIK Group

Investors: Polina Kurshetsova, Tel: +7 495 505 97 33 ext. 3785, E-mail: ir@pik.ru

Media: E-mail: media@pik.ru