6 December 2022

Cherkizovo acquires Bashkortostan’s largest agricultural holding

Ufa, Russia — December 6 – Cherkizovo Group (MOEX: GCHE), Russia’s largest meat producer, has won the auction for the sale of Russian Grain Ufa's poultry, crop, and fodder production businesses. The acquisition will strengthen the Company's position in the poultry market in the Urals and neighboring regions.

2 December 2022

Cherkizovo Group launches a 3D advertising campaign

Moscow, Russia — December 2 – Cherkizovo Group, Russia’s largest meat producer, launched an outdoor 3D advertising campaign to promote its Salchichon premium sausages in anticipation of the New Year holiday season. The Company became one of Russia’s first food producers to introduce this technology in its promotional activities.

2 December 2022

National indexes of meat supply (IMS), October 2022

Cherkizovo Group publishes industrial meat supply indexes for October 2022. The indexes describe dynamics of meat supply — poultry, pork and beef — in Russia.

Cherkizovo Group Announces fourth quarter and full year 2021 Financial Results

February 17, 2022

Moscow, Russia — February 17, 2022— PJSC Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, today announces its audited consolidated IFRS results for the fourth quarter and twelve months of 2021.


Fourth quarter financial highlights

·        Revenue increased by 24.4 % year-on-year (y-o-y) to RUB 45.4 billion.

·        Gross profit of RUB 7.7 billion improved by 8.9 % y-o-y.

·       Adjusted EBITDA* of RUB 9.8 billion increased by 69.7 % y-o-y. Adjusted EBITDA margin came up at 21.5 %.

·       The Group generated a net profit RUB 1.0 billion, compared to RUB 2.4 billion in 4Q20. Adjusted net profit** totalled RUB 6.3 billion compared to RUB 3.6 billion a year ago.

2021 financial highlights

·        Revenue increased by 22.6 % y-o-y to RUB 158.0 billion.

·        Net change in fair value of biological assets declined to RUB 120 million from RUB 1.2 billion in 2020. Net revaluation of harvested crops in stock amounted to RUB 224 million compared to RUB 2.5 billion in 2020.

·        Gross profit of RUB 39.7 billion increased by 13.1 % from RUB 35.1 billion a year ago.

·       Adjusted EBITDA* amounted to RUB 29.3 billion, growth of 10.2 % y-o-y. Adjusted EBITDA margin came to 18.5 % in 2021, declining by 210 basis points y-o-y.

·       Net profit amounted to RUB 16.9 billion, compared to RUB 15.2 billion in 2020. Adjusted net profit** increased to RUB 16.8 billion, from RUB 13.9 billion a year ago.

·        Net debt amounted to RUB 76.2 billion as of December 31, 2021. Company leverage of 2.6x Net Debt/EBITDA remained in line with previous year results of 2.4x.

2021 corporate highlights

·        On April 30th, the Company closed the transaction to acquire 100 % of shares in LLC "Pit-Product" (Leningrad region) from the Finnish Atria Group for RUB 2.8 billion. As a result, Cherkizovo acquired two new meat-processing plants with the capacity of 39 000 tons of sausages, hot dogs, and a meat deli. The transaction also included logistics facilities and trademarks, including their core brand — Pit Product.

·        On June 3rd, the Company signed agreements with the leaders of the Altai, Tula and Lipetsk regions to invest over RUB 80 billion to expand pork and poultry production in the next three years.

·        In December, we’ve announced two deals set to strengthen our turkey franchise, a fast-growing niche of the domestic meat market. Firstly, acquisition from Spain’s Grupo Fuertes of a 50 % stake in Tambov Turkey (Pava-Pava brand) for newly issued shares of Cherkizovo Group valuing the 50 % share at RUB 3.6 billion. Subsequently, we’ve reached an agreement to acquire Russia’s third-largest turkey producer Krasnobor based in Tula, for RUB 1.9 bn, including debt — we started to consolidate the company from December 2021. Both transactions were closed in January 2022.

·        During year, our strong financial position was confirmed by improved credit ratings: Moody's Investors Service upgraded our credit rating from B1 to Ba3, outlook Stable, and Expert RA upgraded our credit rating to ruA+ with a stable outlook.

Key corporate highlights after the reporting period

·      On February 17th, Board of Directors recommended to the AGM to distribute profits of 2021 financial year and to pay dividends of RUB 130.27 per share, in addition to interim dividends of RUB 85.27 announced in August, 2021.


Sergei Mikhailov, CEO of Cherkizovo, commented:

“Cherkizovo Group’s 2021 performance has once again demonstrated our business resilience and ability to grow profitably in the face of economic headwinds, unprecedented surge in production costs and epidemiological challenges. Both revenue and net profit posted healthy growth, driven by new production facilities and a disciplined approach to cost management, which enabled us to avoid price hikes for socially significant product categories.

The Chicken segment was the key profit driver for the Company, with its positive results partially offset by other segments. Within Chicken, the foodservice channel delivered particularly strong financial results, with its sales returning to pre-pandemic levels and the channel’s share in overall revenue going up from 3 % to 8 %. Exports, another strategic priority for the Group, also continued to grow throughout the year. The increase in value for Cherkizovo’s exports was higher compared to the volume growth, reflecting an expanded share of value-added products in foreign shipments.

In 2021, we continued to make acquisitions which we believe offer strong synergies and will enable us to improve supply chain efficiency and control over production costs. For example, Pit Product’s facilities and brands were an important addition to the Group’s portfolio, helping to boost our production of sausages and deli meats using meat from our own farms. In late 2021, the Company announced two important deals in the turkey segment: the purchase of the remaining 50 % stake in Tambov Turkey held by Spain’s Grupo Fuertes and the acquisition of the Tula-based turkey producer Krasnobor. These deals are set to strengthen our position in the turkey product market, which offers great prospects as an increasing share of consumers are looking to include lean turkey meat into their diets.

In 2021, the Company launched the construction of an oil extraction plant in the Lipetsk Region which is scheduled for commissioning in 2022. This additional step to strengthen our vertical integration will help mitigate rising production costs and reduce FX risks associated with the purchase of soybean meal, an essential component of feed production.

Cherkizovo Group strives to conduct business responsibly, recognizing the role it plays in national food security as Russia’s largest meat producer. During the year, the Company tried to avoid price hikes for basic meat products in the consumer basket. Keeping them affordable despite soaring energy, feed, packaging, and labor costs was a tough challenge in 2021. We offer our consumers a balanced portfolio of quality products at reasonable prices, thanks in part to our investment in supply chain and cost optimization.

The pandemic continued to brought additional challenges as we had to prevent temporary suspension of operations at our plants. To this end, we maintained strict control over biosecurity at all production and storage sites. We also took significant steps to achieve a high vaccination rate (over 80 %) for our employees, setting up vaccination stations at our facilities and offices. These and other measures reflect our strong belief that employees are the Company’s most valuable asset, and our commitment to their health and safety.

As part of its charitable activities, in 2021 Cherkizovo Group continued helping healthcare professionals in hospitals by providing food parcels and participating in catering services. In doing so, the Company seeks to support people selflessly fighting the spread of COVID — 19.”   

Financial summary

RUB mln

4Q 2021

4Q 2020

y-o-y, %

12M 2021

12M 2020

y-o-y, %


45 400

36 499

24.4 %

157 968

128 803

22.6 %

Net change in fair value of biological assets

(5 369)

(1 037)

417.7 %


1 164

-89.7 %

Net revaluation of harvested crops in stock





2 465

-90.9 %

Gross profit

7 651

7 023

8.9 %

39 660

35 064

13.1 %

Gross margin

16.9 %

19.2 %

-2.3 p.p.

25.1 %

27.2 %

-2.1 p.p.

Operating expenses, net

(6 171)

(4 783)

29.0 %

(19 868)

(16 539)

20.1 %

Share of adjusted EBITDA of a joint venture and associates



-44.4 %




Adjusted operating profit 1

6 745

3 266

106.5 %

19 240

17 421

10.4 %

Adjusted operating margin

14.9 %

8.9 %

6.0 p.p.

12.2 %

13.5 %

-1.3 p.p.

Adjusted EBITDA 1

9 782

5 763

69.7 %

29 275

26 556

10.2 %

Adjusted EBITDA margin

21.5 %

15.8 %

5.7 p.p.

18.5 %

20.6 %

-2.1 p.p.

Profit before income tax

1 045

1 860

-43.8 %

17 041

14 861

14.7 %

Net profit

1 001

2 362

-57.6 %

16 898

15 177

11.3 %

Adjusted Net profit 1

6 298

3 558

77.0 %

16 772

13 897

20.7 %

Net operating cash flow

7 183

5 618


21 000

16 770

25.2 %

Net debt 1

76 217

63 990

19.1 %

1 In line with the Group’s management accounting practices and described herein (*,**,***,****) in more detail, Adjusted operating profit, EBITDA and Adjusted Net profit don’t include the net change in fair value of biological assets and certain other items.


In 2021, revenue increased by 22.6 % y-o-y to RUB 158.0 billion (2020: RUB 128.8 billion). Revenue growth is attributed to higher volumes in chicken, RTE Meat Processing segments on the back of organic and M&A driven growth, performance of our core brands Petelinka, Cherkizovo, and Chicken Kingdom, and significant contribution from foodservice and export sales channels.

Gross profit

Gross profit increased by 13.1 % y-o-y to RUB 39.7 billion (2020: RUB 35.1 billion). Gross profit margin declined to 25.1 % (2020: 27.2 %) with inflation of raw materials, packaging, and labor costs, to name the few that contributed to higher cost base.

Operating expenses

Operating expenses increased by 20.1 % y-o-y to RUB 19.9 billion, from RUB 16.5 billion a year ago, with strict cost control measures implemented by management only curbing increase of labour and transportation costs, coupled with our intensified advertising & marketing activities. As a result, operating expenses as a percentage of sales declined to 12.6 % (2020: 12.8 %).

Adjusted operating profit

Adjusted operating profit of RUB 19.2 billion increased by 10.4 % y-o-y from RUB 17.4 billion a year ago. Adjusted operating profit excludes net change in fair value of biological assets recognized by the Group of RUB 120 million as well as by the Group’s joint ventures and associates of RUB 6 million.

Adjusted EBITDA

Adjusted EBITDA of RUB 29.3 billion, an increase of 10.2 % y-o-y on the back of the revenue growth which was supported by sales portfolio shift towards branded products and further expansion into foodservice and export markets. Adjusted EBITDA margin declined to 18.5 % (2020: 20.6 %).

Interest expense                                                                                          

Net interest expense in 2021 declined to RUB 3.2 billion, from RUB 4.0 billion due to low-interest rate environment prevailing in the first half of the year and higher proportion of the subsidized debt in the debt portfolio.

Net profit

Net profit for the Group totaled RUB 16.9 billion in 2021, a growth of 11.3 % y-o-y (2020: RUB 15.2 billion). Net profit margin contracted to 10.7 % from 11.8 % a year ago.

Adjusted net profit increased by 20.7 % y-o-y to RUB 16.8 billion, from RUB 13.9 billion a year ago. Adjusted net profit margin amounted to 10.6 %, compared to 10.8 % in 2020.

Cash flow

Operating cash flow expanded by 25.2 % to RUB 21.0 billion (2020: RUB 16.8 billion), driven by higher business profitability.

Capital expenditure and debt

The Group’s capital expenditure on property, plant, equipment and maintenance amounted to RUB 17.4 billion during 2021 on the back of the acquisitions and our investments in construction of the oil-extracting plant.

As of December 31, 2021, net debt**** was RUB 76.2 billion, compared to RUB 64.0 billion at the end of 2020. Gross debt increased to RUB 87.7 billion as of December 31, 2021, compared to RUB 71.4 billion a year ago. At the end of 2021, long-term debt accounted for 50.2 % of the debt portfolio and amounted to RUB 44.1 billion. The effective cost of debt***** was 3.6 % as of December 31, 2021. Subsidized loans and credit facilities made up 56 % of the debt portfolio in 2021.


Total government grants received for compensation of interest expense in cash amounted to RUB 164 million RUB.

Net change in fair value of biological assets

Net change in fair value of biological assets is explained by a higher valuation of crops produced and market hogs and a negative contribution from the chicken segment.



Sales volume

Change y-o-y, %

Revenue 2

Change y-o-y, %

12M21, k ton

12M20, k ton

12M21, RUB mln

12M20, RUB mln




3.0 %

94 913

72 979

30.1 %

Turkey 3



27.9 %

9 550

6 937

37.7 %




-34.5 %

20 618

24 044

-14.2 %

RTE Meat Processing



19.6 %

30 839

21 777

41.6 %

Samson 4



9.2 %

7 631

6 425


2 Revenue represent external sales

3 Volume and revenue reported in turkey section represent turkey sales by Trading Company “Cherkizovo”

4 Volumes denote to sales volumes of associate company Samson — Food Products.


Chicken Segment

External sales volumes in 2021 increased by 3.0 % to 711.2 thousand tonnes (2020: 690.2 thousand tonnes). The average selling price increased by 26 % y-o-y to 136.4 RUB/kg. The revenue growth is attributed to increased distribution of Petelinka and Chicken Kingdom produce — brands’ sales growth in 2021 amounted to 12 % and 24 % respectively. We’ve more than doubled foodservice revenues compared to last year result on the back of our timely acquisition of processing facility catered towards QSR clients in 2020 that started to pay-off as demand recovered. Export was another driver of the growth as we’ve entered the Saudi Arabian market and expanded our footprint in the former CIS countries. As a result, the segment’s revenue increased by 30.1 % and amounted to RUB 94.9 billion (2020: RUB 73.0 billion).

Net change in fair value of biological assets amounted to negative RUB 0.3 billion, compared to positive number of RUB 0.9 billion in 2020.

Gross profit was up by 38.8 % y-o-y and totaled RUB 23.6 billion, (2020: RUB 17.0 billion) driven by volumes growth, sales mix enhancements, diversification of sales, nevertheless, coupled with costs inflation pressure. Gross margin improved to 24.3 %, from 22.8 % in 2020.

Operating expenses as a percentage of sales shrank to 9.1 %. Operating income increased by 59.1 % y-o-y to RUB 14.8 billion (2020: RUB 9.3 billion). Operating margin increased to 15.2 % from 12.5 % in 2020.

Adjusted EBITDA of RUB 19.0 billion, improved by 59.7 % y-o-y, while Adjusted EBITDA margin increased to 19.6 % from 15.9 % a year ago.

Pork Segment

External sales volumes in 2021 declined by 34.5 % y-o-y, to 119.4 thousand tonnes (2020: 182.3 thousand tonnes), as we cut live pork sales to negligible amounts, and decreased carcass sales by 38 % to 62.2 thousand tonnes, while pushing up the volumes of pork cuts by 18 % compared to the last year result. The average selling price for carcass of 165.1 RUB/kg increased by 23 % y-o-y, while average selling prices for cuts increased by 13 % y-o-y to 242.4 RUB/kg. The segment’s revenue declined by 14.2 % y-o-y to RUB 20.6 billion (2020: RUB 24.0 billion).

Net change in fair value of biological assets amounted to RUB 0.1 billion, compared to RUB 0.2 billion a year ago.

Gross profit of RUB 8.3 billion declined by 16.3 % compared to RUB 9.9 billion in 2020, driven by lower volumes and cost pressure in the segment. The segment’s gross margin declined to 25.6 %, from 29.9 % a year ago.

Operating profit amounted to RUB 6.9 billion (2020: RUB 8.6 billion). The segment’s operating margin declined to 21.3 % from 26.1 % a year ago.

Adjusted EBITDA decreased by 14.0 % y-o-y to RUB 9.2 billion (2020: RUB 10.7 billion). Adjusted EBITDA margin declined to 28.6 % from 32.5 % in 2020.

RTE Meat Processing segment

External sales volumes in 2021 increased by 19.6 % y-o-y to 135.9 thousand tonnes (2020: 113.6 thousand tonnes), driven by M&A and further sales growth of Cherkizovo and Cherkizovo Premium brands, the latter delivering another year of exceptional growth with sales more than doubling. The average selling price increased by 18 % y-o-y to 227.0 RUB/kg (2020: 192.0 RUB/kg). As a result, the segment’s revenue increased by 41.6 % and reached RUB 30.8 billion (2020: RUB 21.8 billion).

Gross profit declined to RUB 1.6 billion (2020: RUB 2.1 billion) fuelled by increase in input costs. The gross margin decreased to 5.3 % from 9.6 % a year ago.

Operating expenses increased by 28.5 % y-o-y, and amounted to 15.6 % as a percentage of sales, compared with 17.2 % in 2020.

Operating loss widened to RUB 3.2 billion compared to RUB 1.6 billion loss in 2020.

Adjusted EBITDA remained negative and amounted to RUB 2.1 billion compared to a negative result of RUB 0.6 billion in 2020.

Grain segment

Total sales volumes in 2021 declined by 35.8 % y-o-y to 425.5 thousand tonnes (2020: 663.0 thousand tonnes), while overall harvest in the season decreased by 25.0 % y-o-y to 597.2 thousand tonnes (2020: 796.6 thousand tonnes) driven by optimization of the crop rotation towards soybeans and corn. The segment’s total revenue declined by 26.2 % y-o-y and reached RUB 9.2 billion (2020: RUB 12.5 billion) driven by lower volumes, offset by average selling prices improving for wheat, corn and soybeans.

Net revaluation of harvested crops in stock increased to RUB 1.7 billion from RUB 0.4 billion in 2020.

Gross profit declined by 4.8 % to RUB 5.8 billion (2020: RUB 6.1 billion). Gross margin amounted to 63.4 % from 49.1 % a year ago.

Operating profit amounted to RUB 5.9 billion, a 5.0 % decline y-o-y compared to RUB 6.2 billion in 2020, with operating margin of 64.4 % compared to 50.0 % in 2020.

Adjusted EBITDA amounted to RUB 6.4 billion compared RUB 6.9 billion in 2020, a decline of 7.6 % y-o-y.

Results of joint ventures and associates

The Group’s significant joint ventures and associates include: 50 % share in Tambov Turkey, a turkey producer established by the Company and its partner and shareholder Grupo Corporativo Fuertes, 75 % share in Samson — Food products, a meat processor in St-Petersburg, and 50 % share in Cobb-Russia.

Total result in consolidated EBITDA of the Group from significant JVs and associates amounted to RUB 189 million, down from RUB 798 million a year ago.


Given the Russian GDP growth, the upward trend in real disposable income posted by Rosstat, and the Russian Government’s commitment to providing social support to low-income population groups, consumer demand in Russia is expected to remain stable. At the same time, geopolitical challenges may weigh on the macroeconomic conditions, consumer purchasing power and financial market performance.

The Company reiterates its investment plans for projects aimed at organic growth. Over the next few years, we intend to invest tens of billions of rubles to expand and modernize our meat processing capacities, with the exact amounts to be determined once feasibility studies are completed.

We expect our retail and foodservice customer bases to deliver robust growth. We see a strong demand potential in the e-commerce channel, which is evolving as a major competitor to traditional retail. So far, the share of our e-commerce sales has been around 1 %, but it is poised to expand in the future. The Group’s export channel still offers significant potential, both in existing markets and white space markets in Southeast Asia, the Middle East, and neighboring CIS countries.

There remains uncertainty around COVID — 19, with new strains posing major risks to our staff and operations. The Group continues to ensure the health and safety of its employees. Another human resource risk for us is competition for human capital, which grows more intense as delivery services evolve. A potential solution could be an intergovernmental partnership within the Eurasian Economic Union to attract migrant workers, and we see some progress in this area.

Our dividend policy remains intact, with the Group paying 50 % of its net profit to shareholders. We expect that in 2022, the Company will remain on a solid growth trajectory, aided by ongoing improvements in operating and financial performance.

Some figures in this press-release are rounded for the reader’s convenience.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Cherkizovo Group. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industry, as well as many other risks specifically related to Cherkizovo Group and its operations.

Non-IFRS financial measures. This press release includes financial information prepared in accordance with international financial reporting standards, or IFRS, as well as other financial measures referred to as non-IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS.

* Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA is defined as profit for the period before income tax expense/benefit, interest income and interest expense, net of government grants, foreign exchange loss/gain, depreciation and amortization expense, net change in fair value of biological assets, bonuses to employees under long-term incentive program and share of profit/loss of joint ventures and associates plus share of adjusted EBITDA of joint ventures and associates and depreciation and amortization accumulated in harvested crops in stock as shown in the reconciliation in Appendix 1. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of our net revenues. Our adjusted EBITDA may not be similar to adjusted EBITDA measures of other companies; is not a measurement under IFRS accounting principles and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within our industry. Adjusted EBITDA is reconciled to our consolidated statements of operations in Appendix 1.

** Adjusted Net profit is defined as profit for the period before net change in fair value of biological assets recognized by the Group as well as by the Group’s joint ventures and associates. Adjusted Net profit margin is defined as Adjusted Net profit as a percentage of our net revenues. Our Adjusted Net profit may not be similar to Adjusted Net profit measures of other companies; is not a measurement under IFRS accounting principles and should be considered in addition to, but not as a substitute for, the information contained in our consolidated financial statements. We believe that Adjusted Net profit provides useful information to investors in order to estimate dividend payout.

*** Adjusted Operating profit is defined as operating profit for the period before net change in fair value of biological assets recognized by the Group as well as by the Group’s joint ventures and associates and non-recurring impairment loss recognized for non-operational items of property, plant and equipment. Adjusted Operating profit margin is defined as Adjusted Operating profit as a percentage of our net revenues. Our Adjusted Operating profit may not be similar to Adjusted Operating profit measures of other companies; is not a measurement under IFRS accounting principles and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that Adjusted Operating profit provides useful information to investors in order to better gauge underlying operating performance of the business.

**** Net debt is calculated as total debt minus cash and cash equivalents, short-term bank deposits and long-term bank deposits.

***** Effective cost of debt is calculated as last twelve months interest expense divided over the end of the period gross debt