Review of the Russian Market of Alcoholic Products
Research by the Company NeoAnalytics

Condition and Development Trends of the Russian Wine Market
Research by the Center for Investigations of Federal and Regional Alcohol Markets (CIFRRA)

Review of the Russian Beer Market
Research by the Company Market Analitika

Review of the Russian Coffee Market
Research by the Company Step by Step

Russian Exports of Confectionery Products
Research by the Confectionery Market Research Center (CMRC)

Review of the Russian Market of Chocolate Products
Research by the Company Market Analitika

Review of the Russian Meat Market
Research by Credinform Information Agency

Review of the Russian Dairy Market
Research by Consulting Company Foresight 24

Review of the Russian Market of Condensed Milk
Research by the Company Eventus Consulting

Russian Grocery Retail
Research by the Company RBC Market Research

Private Labels in the Russian Market
Research by the Branding Company Labelmen

Leasing Market in Russia in the First 9 Months of 2016

Research by the Rating Agency RAEX (Expert RA)
During the first 9 months of 2016 new business volume (property value) grew by 17% and amounted to about 450 billion rubles. Gradual stabilization in the Russian economy led to a partial recovery of the leasing market, which decreased by 26% a year earlier. Such substantial growth has to do with the low base effect in the previous year. During the first 9 months of 2016, negative growth rates in new business were demonstrated by only 20% of respondents, whereas in the previous year the leasing business declined by over 75% of the study participants.
The amount of new leasing contracts in JanuarySeptember 2016 grew by 15% and amounted to around 680 billion rubles. The leasing portfolio volume by October 1, 2016, equaled 2.9 trillion rubles, which corresponds to its level on October 1, 2015. The reasons for the ongoing portfolio stagnation are its inertness and the withdrawal of major leasing contracts with problematic clients. In addition, the reorientation of leasing companies towards retail segments with shorter transaction terms than in large corporate contracts does not let the overall portfolio volume be significantly increased.
According to RAEX (Expert RA), the residue in payments with a delay of over 60 days amounted to around 10% to the portfolio on October 1, 2016 (12% a year earlier). Nevertheless, the volume of restructured debt in the overall leasing portfolio grew from 18% on October 1, 2015 to 20% on October 1, 2016. The debt restructuring process started in 2014. In certain cases objects of leasing had to be withdrawn and passed to new clients, and some clients had their debt restructured, states Vladimir Dobrovolsky, Deputy General Director for Customer Service at GTLK. The situation improved over 2 years. Therefore we believe that the market is recovering. There is demand, which is additionally being stimulated by the state, he adds.
In the future, work with overdue debts and provisions may be affected by new requirements formed within the regulation of financial leasing. In this regard we are expecting a significant increase in demand for the module of accounting in accordance with the IFRS standards, which will meet the industry standards of the central bank, as well as the module of compliance with procedures of internal control of data quality and the module of reserve calculation based on a fair evaluation of leasing portfolio security, notes Dmitry Kurdomonov, Managing Director of Homnet Leasing.
During the first 9 months of 2016, just as a year ealier, VTB Leasing was the leader of the market in the volume of new business. GTLK was second with the leasing business growth rates of 69% in JanuarySeptember 2016. Having demonstrated a slight reduction (-5%), Sberbank Leasing was third. The businesses of the top 3 leasing companies were supported by aircraft deals. The three largest companies together account for 36% of the overall new business volume (38% a year earlier).

During the first 9 months of 2016, the segment of small and medium-sized businesses accounted for around 60% of new business (54% in the previous year). Car leasing had the key positive influence on the retail segment, its share in the market amounting to around 38%. In absolute terms, the car segment grew by 21%, reaching 170 billion rubles. The state program for subsidized car leasing had a positive effect on car transactions. However, the program did not succeed at significantly increasing demand by individuals for car leasing. Leasing for individuals is optimal for those who want to only pay for using the car and not think about how much said car will cost in 3 years, notes Aleksandr Mikhaylov, General Director of Evroplan, Apart from that, not all lessors are able to offer this product, since it is potentially much more risky than financial leasing traditional for Russia.
In addition, positive dynamics were shown by construction and agricultural equipment, which increased their shares in the market to 8 and 4% respectively. Right now the key players are identified in the recovering market, and we can observe a serious struggle for clients among them. The segment of small and medium enterprises became the focus of the strongest players, having provided the most significant growth in new business volume in leasing retail over the past few months, points out Dmitry Korchagov, General Director of Baltiysky Lizing (Baltic Leasing), In this segment competition can be seen on all fronts: in interest rates, in product ranges (various discount programs by car brands, additional options etc.) and, most importantly, in risk assessment technologies.
The volume of new business in the segment of food industry equipment increased by 17% during the first 9 months of 2016, and amounted to no less than 4.5 billion rubles (as opposed to 3.9 billion rubles in the first 9 months of 2015). The share of the segment in the structure of new business remains about 1%. According to the study, the largest volume of leasing transactions with food equipment in JanuarySeptember 2016 was performed by Siemens Finance. UniCredit Leasing was second, followed by Optsion-TM.
Traditionally, equipment for milk and meat processing and bread baking was most in demand among clients in the food industry. We were also actively working in the segment of water bottling and bottling of other soft drinks these areas have a stable high demand for goods produced, states Vladimir Melnichuk, Deputy General Director of Siemens Finance in the Central region, Therefore companies active in these fields regularly upgrade their production facilities.
Leasing of previously used equipment in the food industry is rather limited. A single technological process is essential for food industry machinery, and manufacturers warranty is extremely important. Therefore there have been no large transactions with previously used property in the segment in question, says Darya Nizovtseva, Head of Department of Marketing Communications of Sistema Lizing 24.

The recovery growth of the leasing market in 20162017 is largely connected with the stabilization of interest rates and the ruble exchange rate as well as realization of pent-up demand and active marketing by lessors, stimulated to work on searching for new transactions by portfolio reduction. According to the baseline forecast by RAEX (Expert RA), new business volume will grow by 17% in 2016 and will amount to around 640 billion rubles. Said forecast implies that the reduction of the railway segment will not exceed 10%, the volume of aircraft leasing will remain at the level of the previous year, and other segments will grow by 40% total through their small sizes and the low base effect of 2015. Car leasing will demonstrate 25% growth. Growth in the shares of leasing in car sales and partial realization of deferred demand will support the car segment.
According to the agencys forecasts, positive dynamics of the leasing market will continue in 2017, car leasing remaining the driver of the market. Despite the completion of the state program for subsidized car leasing, partial realization of deferred demand may prevent a strong decline in the volume of car leasing transactions. The railway segment may stabilize after four years of reduction, and may even turn positive. Since in 20152016 there was a record write-off of old wagons (about 210 thousand), in several regions a fleet shortage has been formed, says Dmitry Zotov, General Director of TransFin-M.
Aircraft leasing will become a pillar for the market and will be positively affected by state support for Russian aircraft leasing, including Sukhoi Superjet 100 aircrafts. In addition, a significant part of the preparations of infrastructure facilities for the 2018 FIFA World Cup will fall on the next year, which will stimulate volume growth in construction machinery leasing. Water transport may demonstrate a sharp increase, although it occupies a small share in the overall business volume. Due to incentive measures taken by the state, such as the abolition of VAT for ship construction in Russia, the segment in question looks promising, says Vladimir Dobrovolsky, Deputy General Director for Customer Service of GTLK Other segments of the markets, all in all, will also demonstrate positive dynamics due to growth in leasing transactions in the regions. As a result, new business volume in 2017, according to the negative forecast by RAEX (Expert RA), will grow by 10% and will amount to 700 billion rubles; according to the positive forecast, it will increase by 20% (770 billion rubles).

Ruslan Korshunov,
RAEX (Expert RA)