Activity trends of the largest lottery companies in Russia

trends 25/09/2020

Information agency Credinform represents a review of the activity trends of the largest lottery companies in Russia.

The largest lottery companies and lottery distributors (TOP-50) in terms of annual revenue were selected for the analysis according to the data from the Statistical Register and the Federal Tax Service for the latest available financial accounts (2010 - 2019). The analysis was based on the data from the Information and Analytical system Globas.

Net assets is an indicator that reflects the real value of the property of an enterprise. It is calculated as a net worth between total assets and total liabilities. When the company’s debt exceeds the value of its property, the indicator is considered negative (insufficiency of property).

The largest company of the industry by the net assets value is NAO TECHNOLOGICAL COMPANY CENTER, INN 7715918994, Moscow. In 2019 company’s net assets amounted to 1,7 billion RUB.

LLC RUSSKOE LOTO POBEDA, INN 7719527590, Moscow, had the lowest net assets value among TOP-50 companies. Insufficiency of property of this company in 2019 was indicated by the negative value – 1,0 billion RUB.

For the decade, the average industry net assets values had a trend to increase, with the positive dynamics of the growth rates (Picture 1).

Picture 1. Changes in average industry net assets value in 2010 - 2019 Picture 1. Changes in average industry net assets value in 2010 - 2019

The shares of TOP-50 companies with insufficient property were decreasing in the last five years (Picture 2).

Picture 2. Shares of companies with negative net assets value in TOP-50 in 2015 - 2019 Picture 2. Shares of companies with negative net assets value in TOP-50 in 2015 - 2019

Sales revenue
Revenue of only two leading industry companies amounted to 95% of the total revenue of TOP-50 companies. (Picture 3). It gives evidence to the highest level of monopolization in this industry.

Picture 3. Shares of TOP-10 companies in the total revenue of 2019 TOP-1000 Picture 3. Shares of TOP-10 companies in the total revenue of 2019 TOP-1000

In general, there is a trend to increase in revenue with the positive dynamics of the growth rates (Picture 4.)

Picture 4. Changes in average industry revenue in 2010 - 2019 Picture 4. Changes in average industry revenue in 2010 - 2019

Profit and losses
The largest industry company by the net profit value is also NAO TECHNOLOGICAL COMPANY CENTER, INN 7715918994, Moscow. The company’s profit in 2019 amounted to 1,7 billion RUB.

For the decade, the average industry profit values have a trend to increase (Picture 5).

Picture 5. Changes in average industry profit (loss) in 2010 -2019 Picture 5. Changes in average industry profit (loss) in 2010 -2019

For the five-year period, the average net profit values of TOP-50 companies have a trend to increase, the average net loss value increases as well. (Picture 6).

Picture 6. Change in average net profit and net loss of TOP-50 companies in 2015 - 2019 Picture 6. Change in average net profit and net loss of TOP-50 companies in 2015 - 2019

Key financial ratios
For the decade, the average industry values of current liquidity ratio were in general within the interval of the recommended values – from 1,0 to 2,0, with a trend to decrease. (Picture 7).

Current liquidity ratio (current assets to short-term liabilities) shows the sufficiency of company’s assets to repay on its short-term liabilities.

Picture 7. Change in average industry values of current liquidity ratio in 2010 - 2019 Picture 7. Change in average industry values of current liquidity ratio in 2010 - 2019

For the decade, there is a trend to increase in the average industry values of return on investments ratio. (Picture 8).

ROI ratio is calculated as net profit to sum of shareholders equity and long-term liabilities, and shows the return of equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in average industry values of return on investments ratio in 2010 - 2019 Picture 8. Change in average industry values of return on investments ratio in 2010 - 2019

Assets turnover ratio is calculated as a ratio of sales revenue to average total assets for a period and defines the efficiency of use of all the available resources, regardless source of their attraction. The ratio shows how many times per year the full cycle of production and circulation generating profit is performed.

For the decade, there was a trend to increase (Picture 9).

Picture 9. Change in average industry values of assets turnover ratio in 2010 - 2019 Picture 9. Change in average industry values of assets turnover ratio in 2010 - 2019

Small enterprises
90% of the TOP-50 companies are registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. However, their share in the total revenue of TOP-50 amounts to only 4%, which is significantly lower than the average country value in 2018 – 2019 (Picture 10).

Picture 10. Shares of small and medium business enterprises revenue in TOP-1000 Picture 10. Shares of small and medium business enterprises revenue in TOP-1000

Main regions of activity
TOP-50 companies are registered in 33 regions and spread in an uneven manner within the country. Almost 99% of the largest by the revenue companies consolidate in Moscow (Picture 11).

Picture 11. Revenue distribution of TOP-50 companies by regions in Russia Picture 11. Revenue distribution of TOP-50 companies by regions in Russia

Financial position score
According to the assessment, the financial position of most TOP-50 companies is above average (Picture 12).

Picture 12. Distribution of TOP-50 companies by financial position score Picture 12. Distribution of TOP-50 companies by financial position score

Solvency index Globas
The major part of TOP-50 companies was awarded with the Superior/High or Strong/Medium Solvency index Globas, which gives evidence to their ability to meet their obligations fully and in time (Picture 13).

Picture 13. Distribution of TOP-50 companies by Solvency index Globas Picture 13. Distribution of TOP-50 companies by Solvency index Globas

Conclusion
The complex assessment of the activity of the largest lottery companies in Russia, taking into account the main indexes, financial indicators and ratios, demonstrates the prevalence of positive trends in 2010 - 2019 (Table 1).

Table 1. Positive and negative trends, evaluation factors
Trends and evaluation factors Relative share of factor, %
Dynamics of the average net assets value up10
Rate of growth (decline) in the average size of net assets up10
Increase / decrease in the share of enterprises with negative values of net assets up10
Level of competition / monopolization down-10
Dynamics of the average revenue up10
Rate of growth (decline) in the average size of revenue up10
Dynamics of the average profit (loss) up10
Growth / decline in average values of companies’ net profit up10
Growth / decline in average values of companies’ net loss down-10
Increase / decrease in average values of current liquidity ratio down-5
Increase / decrease in average values of return on investment ratio up10
Increase / decrease in average values of asset turnover ratio, times up10
Share of small and medium-sized businesses in terms of revenue being more than 20% down-10
Regional concentration down-10
Financial position (the largest share) up10
Solvency index Globas (the largest share) up10
Average value of relative share of factors up4,1

Up positive trend (factor), Down negative trend (factor).