Galaxy Group of Companies: Impact Report 2021 EN

2021 SOCIAL & ECONOMIC IMPACT REPORT

The report presents data of 2020.

© GALAXY GROUP OF COMPANIES. ALL RIGHTS RESERVED 2021 No part of the content or the content in complete in this Report may be used without the written consent of the Galaxy Group of Companies.

TABLE OF CONTENTS

3 GURGEN KHACHATRYAN'S ADDRESS

GALAXY GROUP OF COMANIES / 2021

4 ABOUT THE COMPANY

2

Stone is durability, stone is a symbol of strength and stability. The stone is longevity, it also serves as the foundation - the stronger the cornerstone, the more powerful the whole structure. The stone

OUR STORY

builds, creates, improving lives and communities. It is one of the

COMPANIES UNDER GALAXY GROUP

most important parts of human life, the significance of which has

GALAXY’S WORLD-WIDE BUSINESS RELATIONS

remained the same.

8 GALAXY COMMUNITY IN NUMBERS

GALAXY COMMUNITY DEMOGRAPHIC PROFILE

11 SOCIO-ECONOMIC IMPACT

EmployeesS AND SALARY FUND

JOB PROFILE AND SALARY COMPARISON

17 ECONOMIC ACTIVITY IN NUMBERS

TAXES PAID IN 2020

ACQUISITIONS FROM LOCAL MARKET IN 2020

IMPACT. FINANCES AND BANKING IN 2020

Galaxy Group of Companies chose the symbol of stone as the concept of this annual Impact Report. Only by “laying a stone upon stone” is it possible to restore our life and our homeland. The stone symbolically connects us with our past, the most distant, unforgettable times of our history, while guiding the way towards the future, to be built upon the strength of a stone in order to be resistant and ready for any challenge. Crises are temporary, stones are permanent and tenacious.

GURGEN KHACHATRYAN'S ADDRESS

3

our teams and business continuity. The crises were an opportunity for

is AMD 364,716 and last year, more than AMD 2 billion in income taxes

us to show our unity as well as ingenuity to find new, unexpected solutions

was transferred to the state budget.

in the face of adversity. At the same time, they also served as a test for our values and strength. It is with great assurance that I can state that we managed to record balanced results thanks in large part to the professionalism, responsibility and dedicated work of our teams, for which I am grateful to the team.

GALAXY GROUP OF COMANIES / 2021

“Human comes first” was a guiding point for us, in the context of which we managed to achieve high results in a short time from the first day of the outbreak, with preventive solutions, increased team readiness and stress resilience.

In 2021 we will continue our development projects and will complete our three major projects with international and local capital in the field of hotel construction, hospitality and services as well as the construction of an IT infrastructure of regional significance. In 2021, we are also preparing to implement new and more comprehensive social responsibility programs aimed at improving the quality of life of people.

Having accountability towards our employees and their families, our nation and the state, we believe that we can make our modest yet vital contribution to the recovery of Armenia's economy.

The war was undoubtedly the most difficult stage, during which our companies and employees provided support in various ways. Our contribution included but was not limited to technical assistance, the implementation of complex communication measures, the hosting of

"TRUST, STABILITY AND BUSINESS CONTINUITY

IN A YEAR OF CRISES. LESSONS FROM 2020 FOR GALAXY GROUP OF COMPANIES"

authoritative international media in Armenia and Artsakh, the organization of shelter and support for the civilian population, and direct donations.

I would like to emphasize that despite the difficulties, our relationship with local and international partners has not suffered a bit. Moreover, we have initiated more ambitious programs, continuing to ensure the stable

Last year's crises had a negative effect on the economy. The pandemic not only disrupted normal life, but also showed how unprepared states and corporations were in dealing with crises via systemic solutions. The year of 2020 was especially difficult for us—a war with painful losses combined with political and economic instability, corporate pressures and other consequences left by the pandemic.

Even though it would be naïve of us to think we overcame all of the challenges, we, nonetheless, managed to make it through the year accomplishing a feat we deem very important, that is maintaining the complete integrity of

representation of our international partners in Armenia.

In spite of the inevitable economic losses, last year Galaxy Group of Companies contributed more than AMD 11.5 billion (more than USD 22 million) to the RA state budget in the form of tax payments. Purchases from the local market amounted to around USD 36 million which has a significant impact on the national GDP. The Group’s loan portfolio amounted to around AMD 60 billion (around USD 115 million). I would like to note that the average monthly salary in Galaxy Group of Companies

GURGEN KHACHATRYAN Co-founder and Co-Chairman Galaxy Group of Companies

GALAXY GROUP OF COMANIES / 2021

4

ABOUT THE COMPANY

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

OUR STORY

5

Behind the lucrative image of a multi-industry, successful

others to follow suit, whilst maintaining the characteristics unique

corporation hides the over 20 years long process of hard work,

to them.

GALAXY GROUP OF COMANIES / 2021

trials and tribulations, failures that are masked by the eventual outcome. Galaxy Group of Companies was not an overnight

However, among the many feats we have accomplished over the

success, far from it. On the contrary, it was the result of consistency

years, what we take the most pride in is the fact that Galaxy Group

and resilience; the dozens of mistakes made along the way mixed

of Companies is formed with capital of entirely Armenian origin.

with the willingness to accept and learn from those experiences.

Our primary objective with each company that we establish is to contribute to the development of Armenia’s economy and to

Before forming Galaxy Group of Companies, co-founders Gurgen,

improve the quality of life of our community. It is our belief that the

Artyom and Aram Khachatryan were just a couple of young

well-being and prosperity of our company is directly correlated

brothers who aspired to be entrepreneurs. They tried their hands

with that of our country—therefore, in this mutually symbiotic

at starting multiple small businesses in their youth, all of which

relationship, we have to ensure that we hold our end of the deal

did come to the same unfortunate conclusion. However, to let a

and do our part in developing Armenia.

handful of unsuccessful attempts discourage them from trying for more would go against their personal principles—the very same set of principles which Galaxy Group was later founded and built

Our story is not unique by any means. Nor is it an over-glorified

upon.

underdog story. We did not have a sudden rise to the glory, did not experience ups and downs of galactic scale. Our story does

Our corporate history traces back to 1999, from which point on

not resemble that of a business fairy tale propagated by fictitious

the Galaxy Group of Companies of today has been formed step

literature. Galaxy Group of Companies is just an example of a

by step, overcoming multitudes of challenges along the way. From

company operating on a fundamentally sound basis, sticking to

an idea to a project, from a project to a company—Galaxy Group

its guns through thick and thin without letting external pressure

has created its companies from the ground up. In a 20-year span,

get in the way. We take no shortcuts, do not compromise our

we have managed to expand and diversify our business portfolio,

quality for short-term gains and, ultimately, never put personal

establish brands beloved by customers, enter and innovate a

interests above those of the institution. We let our work do the

variety of industries. Our companies have become leaders in their

talking—success is merely its by-product.

respective industries, setting new benchmarks and standards for

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

COMPANIES UNDER GALAXY GROUP

6

GALAXY GROUP OF COMANIES / 2021

Galaxy Group serves as the holding company of 15 business units, reserving the role of management and strategic development of its subsidiaries. Offering a completely new culture and innovative products, our companies are all unique in their own right. We are all united around the same purpose, that is to find the best solutions for effective service delivery.

COMMERCIAL REAL ESTATE & CONSTRUCTION

ENTERTAINMENT & HOSPITALITY

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 / 2021

A journey is best measured by friends rather than miles. Throughout 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

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2021

8

GALAXY COMMUNITY IN NUMBERS

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY COMMUNITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2021

Followers of the group of companies in Armenia

Access to every third family in Armenia Active customers

9

1,500,000+ 1,000,000 800,000+ ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2021

GALAXY COMMUNITY DEMOGRAPHIC PROFILE

HIGHER EDUCATION

MEDIUM AND HIGH INCOME GROUP

18-55 YO

SOCIALIZING: active walking, purchase, public food centers

10

WOMEN 58%

76% INTERNET AS THE PRIMARY SOURCE OF INFORMATION

82% PAID Employees (PRIVATE AND PUBLIC SECTORS)

DEMOGRAPHIC

MEN

URBAN POPULATION

42%

46.3% CRITICAL MASS, CIVIL ACTIVISM

BEHAVIOR

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2021

11

SOCIO-ECONOMIC IMPACT

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

12

RA

*

2.148 bln AMD ** GALAXY GROUP OF COMANIES / 2021

Paid income tax

2020

364,716 AMD

Average monthly income

2,209

employees

194,450 AMD

Average monthly income

*** 429,205

employees

3.709 bln AMD Paid income tax

2019

376,165 AMD

Average monthly income

2,864

employees

183,300 AMD

Average monthly income

*** 421,179

employees

* RA - Republic of Armenia ** AMD - Armenian Dram (currency) *** Private sector

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

13

GALAXY GROUP OF COMANIES / 2021

Salary increase dynamics 2018

2019

2020

400,000 AMD 300,000 AMD 200,000 AMD 100,000 AMD 0 AMD

314,058 AMD

181,865 AMD

376,165 AMD

187,300 AMD

364,716 AMD

194,450 AMD

GALAXY RA

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

EMPLOYESS AND SALARY FUND

14

GALAXY GROUP OF COMANIES / 2021

Gender distribution

2,209 employees 50.8%

1,122

Men

1,087

49.2%

Women

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

JOB PROFILE AND SALARY COMPARISON

15

GALAXY GROUP OF COMANIES / 2021

Salaries based on company size 2020

2019

1-9 employees

229,938 AMD 109,782 AMD

138,280 AMD

10 - 49 employees

252,647 AMD 90,953 AMD

259,240 AMD

50 - 249 employees

297,655 AMD 88,909 AMD

291,997 AMD

> 250 employees

394,242 AMD 139,561 AMD

383,663 AMD

0

200,000 AMD

95,679 AMD

95,516 AMD

90,569 AMD

139,415 AMD

400,000 AMD

GALAXY RA

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

JOB PROFILE AND SALARY COMPARISON

16

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

GALAXY GROUP OF COMANIES / 2021

Employee Distribution

Salary Comparison

67.6% IT and Communication 0.9% Construction 2.2% Consultation 1.6% Security 3.2% Service

7.4% Real estate management 7.5% Retail 9.6% Wholesale

2020

2019

Construction

150,758 AMD

152,434 AMD

Consultation

343,023 AMD

402,446 AMD

Wholesale

346,112 AMD

355,515 AMD

Service

116,547 AMD

94,061 AMD

IT and Communication

394,242 AMD

431,121 AMD

Real Estate Management

341,277 AMD

364,234 AMD

Retail

325,181 AMD

207,791 AMD

Security

163,828 AMD

131,963 AMD

0

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

250,000 AMD 500,000 AMD

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

GALAXY GROUP OF COMANIES / 2021

17

ECONOMIC ACTIVITY IN NUMBERS Taxes, loans, GDP impact

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

TAXES PAID IN 2020

18

Taxes paid by Galaxy Group 2018

2019

Taxes paid in the RA 2020

$ 32 mln

GALAXY GROUP OF COMANIES / 2021

$ 30 mln $ 28 mln $ 26 mln

2018

2019

2020

$ 2,723,016,664

$ 3,097,073,179

$ 2,989,249,617

$ 3.2 bln

$ 24 mln

$ 3.1 bln

$ 22 mln

$ 3.0 bln $ 2.9 bln

$ 20 mln

$ 2.8 bln $ 18 mln

$ 2.7 bln

$ 16 mln

$ 2.6 bln

$ 14 mln

$ 2.5 bln

$ 27,723,056

$ 31,210,558

$ 22,238,602

GALAXY

RA

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

ACQUISITIONS FROM LOCAL MARKET IN 2020

19

Acquisitions made by Galaxy Group from the local market amounted to ≈ USD 36 million in 2020.

GALAXY GROUP OF COMANIES / 2021

2020

Allocations to travel agencies

$

Services

$ 2,497,270

$ 2,882,771

Fixed assets

$ 9,438,962

$ 9,093,117

Talent development

$

183,496

$

554,100

Office goods & supplies

$

568,540

$

731,889

Transport

$

600,118

$

987,965

Banking and payment

$ 1,828,134

$ 1,395,623

Rent

$ 1,595,632

$ 6,408,999

Bills

$ 3,613,593

$ 4,456,311

Marketing

$ 1,390,186

$ 2,712,790

Commercial

$ 13,094,492

$ 21,697,318

Other

$ 0

$ 5 mln

$ 7,5 mln

79,772

2019

$

467,707

981,981 $ 15 mln

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

IMPACT. FINANCES & BANKING IN 2020

20

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

GALAXY GROUP OF COMANIES / 2021

Galaxy Group loan statistics 2018

Loans provided by the banks **

2019

2020

$ 140 mln

2018

2019

2020

$ 3,865,600,665

$ 4,239,168,093

$ 4,625,812,960

$ 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

$ 3.8 bln

$ 20 mln

$ 3.7 bln

$ 10 mln $

2020: 2.48%

$ 3.6 bln

0

$ 134,605,661

$ 6,327,440

Loans provided

$ 128,044,927

$ 10,505,007

$ 5,521,159

$ 114,927,237

$ 5,478,927

Bond *

Interest expense * Interest on bonds totaled

$ 6,161,255

2019: 207,000 USD

Total loans in RA ** Households & non for profit organizationloans excluded

2020: 379,000 USD

ABOUT THE COMPANY

GALAXY COMMUNITY IN NUMBERS

SOCIO-ECONOMIC IMPACT

ECONOMIC ACTIVITY IN NUMBERS

2021 SOCIAL & ECONOMIC IMPACT REPORT www.galaxygroup.am info@galaxygroup.am

© GALAXY GROUP OF COMPANIES. ALL RIGHTS RESERVED 2021