Rostelecom Board approves corporate strategy to 2025, adopts dividend policy for 2021-2023

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Financial objectives to 2025 include: the doubling of net profit; OIBDA growth of 1.5x; revenues of RUB 700+ billion and CAPEX to remain flat in absolute terms

Moscow, Russia – April 20, 2021 Rostelecom Group (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, today announces that its corporate strategy to 2025 has been approved by the Company’s Board of Directors, with its dividend policy for 2021-2023 also adopted.

At a Virtual Investor Day held today, the Company illustrated how it intends to continue with its development as the largest integrated provider of digital services and solutions in Russia and the most reliable partner for households, business and the state.

As part of Rostelecoms strategic plan for 2020-2025, the Companys main priorities are:

  • Pursue "Smart growth" in traditional businesses to provide a higher rate of return on investment and cash flow by:
    • securing the leading position in the retail segment (B2C) in terms of subscribers and revenue, and to target a base of over 100 million customers;
    • enhancing its unchallenged leadership of the B2B/G market and maintain its status as the company of choice for business and the public sector;
    • maintaining its leadership positions in the operator segment.
  • Exceed market growth rates in certain promising business segments by:
    • securing or maintaining the top position in each segment (data centre and cloud services, information security, digital medicine, digital region and state digital services);
    • attracting strategic partners and public capital to certain businesses via IPO processes;
    • grow revenue contribution from clusters and new digital products to 25% of total revenues.
  • Increase operational efficiency in traditional business segments by:
    • enhancing internal efficiency and containing growth in operating costs to achieve OIBDA margin of 40% plus over 5 years.
  • Preserve and expand Rostelecoms role as a key partner in the digitisation of the state by:
    • strengthening relations with the government to maximise participation in state projects and programs, including the supply of ICT infrastructure and solutions as well as the digitisation of key processes.

To streamline the implementation of these strategic priorities, Rostelecom will introduce a segment-cluster development model, with a strong focus also on client-orientation and operational efficiency. Traditional customer segments will be complemented by separate high-growth clusters made up of Data Centres and Cloud Services, Information Security, Digital Medicine, Digital Region and State Digital Services.

By successfully implementing the new strategic initiatives outlined above, Rostelecom is setting the following financial objectives for 2025:

  • Revenue of more than RUB 700 billion;
  • OIBDA growth of 1.5x;
  • Doubling of net profit;
  • Achieve target Net Debt[1]/OIBDA of below 2.5x;
  • Keep CAPEX at 2020 levels in absolute terms;

The Company is also setting a number of new ESG initiatives and objects as part of the renewed strategy.

By implementing these strategic plans, Rostelecom also intends to steadily grow its dividend per share within the framework of the new Dividend Policy for 2021-2023, as adopted by the Board of Directors. According to the new policy, the company will strive to pay at least RUB 5 per ordinary share and at least 5% more per share than in the previous reporting year. More information in Rostelecoms Dividend Policy can be found at: https://www.rostelecom.ru/ir/dividends/.

For more information on the company's strategic initiatives for 2020 to 2025, please visit Rostelecoms corporate website: https://www.company.rt.ru/ir/results_and_presentations/cmd/2021/.



[1] Including Lease liabilities