Galaxy Group of Companies: Impact Report 2020 EN

2020 SOCIAL & ECONOMIC IMPACT REPORT This report was prepared with the approval of Galaxy Group of Companies’ Board of Directors Analysis was conducted using data from 2019

© ALL RIGHTS ARE RESERVED 2020 The use, disclosure and dissemination of the information contained in the report by third parties is strictly prohibited without the official written consent of Galaxy Group of Companies.

GALAXY GROUP OF COMANIES / 2020

FOREWORD

2

Nowadays, when everyone’s aiming for the stars,

know, everyone you ever heard of, every human being

trying to explore the universe, we at Galaxy

who ever was, lived out their lives. The aggregate

believe in the commitment to improve our

of our joy and suffering, thousands of confident

own community and the lives around us whilst

religions, ideologies, and economic doctrines, every

simultaneously preserving our home—Armenia.

hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and

We often get questions as to why we carry out our

peasant, every young couple in love, every mother

development projects even in times of instability.

and father, hopeful child, inventor and explorer,

Carl Sagan’s famous quote on the Pale Blue Dot—

every teacher of morals, every corrupt politician,

very much symbolic for us in many regards—was

every “superstar”, every “supreme leader”, every

a major source of inspiration for our company’s

saint and sinner in the history of our species lived

ideology and the values we strive to achieve and

there—on a mote of dust suspended in a sunbeam.”

subsequently promote. “That’s here. That’s home.

That’s us.” (the famous caption on the photo) serves both as a reminder and an embodiment of what

In our relationship with our community, we believe

and, most importantly, for who we are working

values like transparency and accountability serve

towards. An excerpt from the Pale Blue Dot reads,

a simple purpose—we aspire to have a substantial

GURGEN KHACHATRYAN

“Look again at that dot. That’s here. That’s home.

impact on the development of our country. Our

Co-founder of Galaxy Group of Companies

That’s us. On it everyone you love, everyone you

reports are thus a modest record of that impact.

Chairman of the Board of Directors at Ucom

GALAXY GROUP OF COMANIES / 2020

TABLE OF CONTENTS

2 FOREWORD 4 ABOUT THE COMPANY OUR STORY

COMPANIES UNDER GALAXY GROUP

GALAXY’S WORLD-WIDE BUSINESS RELATIONS

8 GALAXY COMMUNITY IN NUMBERS

GALAXY COMMUNITY DEMOGRAPHIC PROFILE

13 SOCIO-ECONOMIC IMPACT

EMPLOYEES AND SALARY FUND

JOB PROFILE AND SALARY COMPARISON

19 ECONOMIC ACTIVITY IN NUMBERS

TAXES PAID IN 2019

GDP IMPACT IN 2019

IMPACT. FINANCES AND BANKING IN 2019

3

GALAXY GROUP OF COMANIES / 2020

4

ABOUT THE COMPANY

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

OUR STORY

5

Galaxy Group of Companies was founded in 1999 by Aram, Gurgen and Artyom Khachatryans. As a result of 20 years of operation, Galaxy Group has grown from a team of 30 employees to Armenia’s number one employer, having over 3,000 highly paid employees and over 800,000 active subscribers and customers.

From an idea to a project, from a project to a company – Galaxy has created its companies from the ground up, assuming the corporate management role. Currently, each of the 15 companies operating under Galaxy Group was created from scratch—first came the idea or the concept, then those became investment projects which was then followed by incorporation of partners and international investors.

As a results, those investment projects became established companies famous to the public for their exceptional quality and service culture.

Galaxy Group of Companies is represented in three countries—Armenia, Georgia and Belarus. Every company is one of its kind and operates to the highest standards, placing a lot of importance on innovation and corporate social responsibility culture. In the meantime, Galaxy Group continues carrying out huge CSR projects of its own aimed at education, innovation and arts with the purpose improving the quality of life of its community.

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

COMPANIES UNDER GALAXY GROUP

6

GALAXY GROUP OF COMANIES / 2020

Talent wins games, teams win championships. Companies at Galaxy are different but they are all a single team—united for a mission.

COMMERCIAL REAL ESTATE & CONSTRUCTION

FOREWORD

ENTERTAINMENT & HOSPITALITY

TABLE OF CONTENTS

IMPORTATION & PRODUCTION

ABOUT THE COMPANY

RETAIL & CONSUMER GOODS

GALAXY COMMUNITY IN NUMBERS

TELECOMMUNICATION & IT

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY’S WORLD-WIDE RELATIONS

7

GALAXY GROUP OF COMANIES / 2020

A journey is best measured by friends made along the way rather than miles. During the 20 years of our journey, we have established and proudly maintained strategic partnerships with 200+ partner companies from over 20 major business destinations in the world.

Sweden Denmark Norway Netherlands UK France Germany Switzerland Austria Spain Italy Greece Russia Ukraine Bulgaria Poland USA UAE Japan Taiwan China

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

8

GALAXY COMMUNITY IN NUMBERS

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY COMMUNITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

9

Active customers

FOREWORD

TABLE OF CONTENTS

800,000+ ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY COMMUNITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

10

Access to every 3rd family in Armenia

FOREWORD

TABLE OF CONTENTS

1,000,000 ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY COMMUNITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

11

Followers of the group of companies in Armenia

FOREWORD

TABLE OF CONTENTS

1,500,000+ ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY COMMUNITY DEMOGRAPHIC PROFILE

GALAXY GROUP OF COMANIES / 2020

HIGHER EDUCATION

MEDIUM AND HIGH INCOME GROUP

18-55 YO

WOMEN 56.3%

MEN

URBAN POPULATION

44.7%

76%

SOCIALIZING: active walking, purchase, public food centers

12

INTERNET AS THE PRIMARY SOURCE OF INFORMATION

82%

46.3%

PAID EMPLOYEES (PRIVATE AND PUBLIC SECTORS)

CRITICAL MASS, CIVIL ACTIVISM

DEMOGRAPHIC

FOREWORD

BEHAVIOR

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

13

SOCIO-ECONOMIC IMPACT

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

187,300 ֏ *

RA

GALAXY GROUP OF COMANIES / 2020

Average monthly income

14

** 421,179

Employees

3.709 bln ֏

Paid income tax

376,165 ֏

2,864

Average monthly income

Employees

* ֏ = Armenian Currency: Dram (AMD) FOREWORD

** Private sector

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

15

20% salary increase compared to the 3% in the RA

GALAXY GROUP OF COMANIES / 2020

Salary increase dynamics 2018

2019

400,000 ֏ 300,000 ֏ 200,000 ֏ 100,000 ֏ 0֏

314,058 ֏

181,865 ֏

376,165 ֏

187,300 ֏

GALAXY RA

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

16

GALAXY GROUP OF COMANIES / 2020

Gender distribution

2,864 employees 56%

1,598

Men

FOREWORD

44%

1,266

Women

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

JOB PROFILE AND SALARY COMPARISON

17

GALAXY GROUP OF COMANIES / 2020

Salaries based on company size

1-9 employees

138,280 ֏ 95,679 ֏

10 - 49 employees

259,240 ֏ 95,516 ֏

50 - 249 employees

291,997 ֏ 90,569 ֏

> 250 employees

383,663 ֏ 139,415 ֏ 0

200,000 ֏

400,000 ֏

GALAXY RA

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

JOB PROFILE AND SALARY COMPARISON

18

Galaxy Group of Companies is one of the most in-demand organizations of highly qualified workforce in Armenia.

GALAXY GROUP OF COMANIES / 2020

Employee Distribution

68%

Salary Comparison

Information and communication

1% Construction 2% Consultation 2% Security 4% Service

6% Real estate management 8% Retail 9% Wholesale

Construction

152,434 ֏ 189,953 ֏

Consultation

402,446 ֏ 191,748 ֏

Wholesale

355,515 ֏ 130,640 ֏

Service

94,061 ֏ 114,945 ֏

IT and Communication

431,121 ֏ 441,589 ֏

Real Estate Management

364,234 ֏ 150,000 ֏

Retail

207,791 ֏ 130,640 ֏

Security

131,963 ֏ 114,945 ֏ 0

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

250,000 ֏

GALAXY COMMUNITY IN NUMBERS

GALAXY RA

500,000 ֏

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2020

19

ECONOMIC ACTIVITY IN NUMBERS Taxes, loans, GDP impact

FOREWORD

TABLE OF CONTENTS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

TAXES PAID IN 2019

20

Galaxy Group contributes to 1.01 % of the total taxes collected in Armenia.

GALAXY GROUP OF COMANIES / 2020

Taxes paid by Galaxy Group 2018

Taxes paid in the RA

2019

$ 32 mln

$ 3.2 bln

$ 31 mln

$ 3.1 bln

$ 30 mln

$ 3.0 bln

$ 29 mln

$ 2.9 bln

$ 28 mln

$ 2.8 bln

$ 27 mln

$ 2.7 bln

$ 26 mln

$ 2.6 bln

$ 25 mln

$ 2.5 bln

$ 27,723,056

$ 31,210,558 GALAXY

FOREWORD

TABLE OF CONTENTS

2018

2019

$2,723,016,664

$3,097,073,179 RA

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GDP IMPACT IN 2019

21

GALAXY GROUP OF COMANIES / 2020

Acquisitions made by Galaxy Group from the local market amounted to USD 53 million in 2019.

Allocations to travel agencies

$

Services

$ 2,882,771

Fixed assets

$ 9,093,117

Talent development

$

554,100

Office goods & supplies

$

731,889

Transport

$

987,965

Banking and payment

$ 1,395,623

Rent

$ 6,408,999

Bills

$ 4,456,311

Marketing

$ 2,712,790

Commercial

$ 21,697,318 0

FOREWORD

$ 5 mln

TABLE OF CONTENTS

$ 10 mln

467,707

RA

$ 13.65 bln - RA GDP

$ 53 mln consumption - 0.4%

$ 20 mln

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

IMPACT. FINANCES & BANKING IN 2019

22

In 2019 Galaxy Group’s share in the total loans provided by Armenian banks amounted to 3.02%

GALAXY GROUP OF COMANIES / 2020

Galaxy Group loan statistics

Loans provided by the banks *

2018

2018

2019

$ 140 mln

2019

$ 4.3 bln

$ 120 mln

$ 4.2 bln

$ 100 mln

$ 4.1 bln

$ 80 mln

$ 4.0 bln

$ 60 mln

$ 3.9 bln

$ 40 mln $ 20 mln

$ 3.8 bln

$ 10 mln

$ 3.7 bln

$

$ 3.6 bln

0 $ 134,605,661

$

6,327,440

Loans provided

$ 128,044,927

Interest expense

**

FOREWORD

$ 10,505,007

TABLE OF CONTENTS

$

5,521,159

Bond

**

Interest on bonds totaled $ 207,000

ABOUT THE COMPANY

$ 3,865,600,665

GALAXY COMMUNITY IN NUMBERS

$ 4,239,168,093

Total loans in RA

*

* Non-commercial loans excluded

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

2020 THANK YOU www.galaxygroup.am

info@galaxygroup.am

This report was prepared with the approval of Galaxy Group of Companies’ Board of Directors Analysis was conducted using data from 2019

© ALL RIGHTS ARE RESERVED 2020 The use, disclosure and dissemination of the information contained in the report by third parties is strictly prohibited without the official written consent of Galaxy Group of Companies.