Dear friends and colleagues,
I hereby submit for your consideration the Annual Report of the MTS Digital Ecosystem for 2023 with an overview of the impressive performance that we were able to achieve in difficult macroeconomic conditions. Despite market conditions and operational challenges, our long-term strategy has not undergone significant changes: the company continues to maintain leadership through business diversification and building an ecosystem of digital services on a stable telecom base.
The efficiency of the chosen strategy is confirmed by financial and operational performance. MTS Group’s revenue is growing at a double-digit rate, key business areas are showing stable growth, and the number of ecosystem clients in 2023 exceeded 15 million people. In general, these clients generate nearly half of the company’s mass market revenue, and we expect this momentum to continue to grow in 2024.
Among mature businesses of the ecosystem, the FinTech vertical makes a significant contribution to revenue growth. Over the year, the retail loan portfolio grew by 33 percent to RUB 339 billion, and net profit increased to a record level of RUB 12.5 billion. Within the framework of its strategy, MTS FinTech is developing as one of the key drivers of the ecosystem along with creating the best digital services in the retail market of financial services. At the same time, we are developing the area as an independent and investment-attractive business that complies with the best corporate governance practices.
The corporate segment of the business demonstrates excellent performance: we remain the market leader in solutions and services for business clients in telecom and IT in Russia demonstrating strong growth by 17 percent year on year due to solutions in the Internet of Things, intelligent communication systems and communication services under the MTS Link and MTS Exolve brands. We have completed the first tests of our own base station in real conditions; by the end of 2024, the first hundred of such stations will already begin operating on the basis of our network.
The synergy of ecosystem companies, investments in the development of promising areas, product teams and business transformation — focusing on digital solutions and the growth of non-telecom areas allows us to feel confident about the future and continue to improve the quality of ecosystem services for tens of millions of our clients.
The year 2023 was also special for MTS in terms of positioning. To mark the transformation from Telco to Techco and emphasize the innovative spirit of the business, MTS celebrated its 30th anniversary with a global rebranding. The company has got a new logo that will organically accommodate all the products of the ecosystem. A logical and bright creative solution helps us respond in a timely manner to changing environments and competitive challenges.
Fulfilling obligations to partners, clients and shareholders remains a top priority for MTS. The demonstration of ethical leadership at all levels of business management, system-based support of a high level of compliance culture and the leadership role of MTS in maintaining the best practices of responsible business allows us to ensure sustainable development and protect the company from emerging risks. In 2023, we completed a number of projects to improve and automate internal processes, involving both the presence of compliance controls and the transfer of accumulated experience in this area to internal and external stakeholders.
During many years, MTS has demonstrated a steady commitment to the principles of sustainable development. We believe that by building a sustainable and secure ecosystem of digital services that surround the clients and meet its needs in daily life, work, communication and other social functions, we ensure a more sustainable future for society as a whole. In 2023, we stuck to core social investments areas, such as support for education, culture, territorial development, assistance to vulnerable groups of the population, volunteering, while our social programs are focused on introducing new approaches and expanding the tools for solving social problems through digital solutions and technological expertise of MTS. This is obviously our strong point. We are generous in sharing resources with all stakeholders — the company held about 5,000 social and charitable events over the past year, bringing together millions of participants across the country, and we see how the lives of communities are qualitatively changing thanks to the company’s digital initiatives and inclusive projects. For example, in 2023, we created a unique platform for developing partnerships and networking — the True Tech IT community, where people of different levels of IT competencies can share experiences, support and inspire each other. In 2023, the largest conference in Russia, True Tech Day, was held with great success, in which more than 70 Russian and international experts in the field of IT and more than 60 thousand people around the world took part.
We are proud that our social, volunteer, environmental and charitable ecosystem initiatives are highly esteemed by the public and by experts. For the third year in a row MTS confirmed the highest category of the “Leaders of Corporate Charity” rating A+ of the Association of Grant-giving Organizations “Donors Forum.”
I am sure that the most important asset of any company is its employees. We work every day to ensure that MTS becomes the best company not only for clients, but also for employees. The MTS ecosystem is a unique employer that combines large-scale goals, innovation and sustainability. I am proud of the team with which MTS is entering a new stage of its development; it is almost 65 thousand experts with unique professional competencies in various areas. For them, we have created a harmonious, comfortable and innovative environment and are implementing inclusive projects, as well as human capital development programs. We provide unique opportunities for growth and self-development and sincerely care about the well-being of our employees, including outside the workplace. These are the fundamental principles of our HR approach, which reflect and convey our responsibility to our employees.
In 2023, we paid special attention to projects in the field of developing a fair and open corporate culture, launched a number of initiatives to support vulnerable groups and expand an accessible environment. Such projects involve work to attract inclusive applicants, create an accessible environment for inclusive employees, train executives and managers to competently interact with inclusive groups, and volunteer initiatives. All the above allowed MTS to lead the RAEX ranking for human rights and D&I for 2023 by a significant margin.
The expert community noted the company’s proactive HR approach, which creates favorable conditions for employee development, retention and transfer of their professional experience. In 2023, the MTS ecosystem was recognized as one of the two best employers in Russia according to Forbes and was included in group number one of the “Rating of Russian Employers 2023” from RBC.
I would like to express my sincere gratitude to all our clients, partners and shareholders, my colleagues in the MTS ecosystem — your unquestioning support and trust help the company not only remain sustainable in turbulent times, but also provide stability and new opportunities for development and growth for the company itself, and for all its stakeholders. My team and I will do everything possible to retain your trust in the future!
Yours sincerely,
MTS President