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25
IR PRESENTATION Preliminary Results Y2011 The Russia Forum 2012 (Troika Dialog) January 31 – February 03, 2012
Transcript
Page 1: Troika Dialog Russia Forum 2012

IR PRESENTATION

Preliminary Results Y2011

The Russia Forum 2012 (Troika Dialog) January 31 – February 03, 2012

Page 2: Troika Dialog Russia Forum 2012

Disclaimer

2

The information in this presentation was received from the sources, which in opinion of IDGC of Centre (“the Company”)

are reliable. Nevertheless, we do not guarantee the accuracy of the given information, which may be short or incomplete.

All opinions and estimations contained in the present material reflect our opinion at the date of publication, and are

subject to the change without any notice.

This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer

to purchase or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part

of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with any contract or

investment decision.

The information in this presentation includes forward-looking statements. These forward-looking statements include all

matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations

concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth,

strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks

and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they

relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that

forward looking statements are not guarantees of future performance and that its actual results of operations, financial

condition and liquidity and the development of the industry in which the Company operates may differ materially from

those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the

Company’s results of operations, financial condition and liquidity and the development of the industry in which the

Company operates are consistent with the forward-looking statements contained in this presentation, those results or

developments may not be indicative of results or developments in future periods

The Company does not bear the responsibility for consequences of use of opinions containing in the present report or

applications, or for incompleteness of the information. No person is under any obligation to update or keep current the

information contained herein.

By attending the presentation you agree to be bound by the foregoing limitations.

Page 3: Troika Dialog Russia Forum 2012

Key strategic priorities of the Company

3

I.

Page 4: Troika Dialog Russia Forum 2012

205

121

85

79

77

57

52

38

23

18

МОЭСК

МРСК Центра

МРСК ЦП

ЛенЭнерго

МРСК Волги

МРСК Урала

МРСК Сибири*

МРСК Юга*

МРСК СЗ*

МРСК СK*

13,1

5,6

3,2

2,3

2,1

1,7

1,3

1,2 1,0 0,0

МОЭСК

МРСК Центра

МРСК ЦП

МРСК Урала

МРСК Волги

МРСК СK

МРСК СЗ

ЛенЭнерго

МРСК Сибири

МРСК Юга

91

50

47

40

39

35

27

23

17

8

МОЭСК

МРСК Центра

МРСК ЦП

МРСК Урала

МРСК Сибири

МРСК Волги

ЛенЭнерго

МРСК СЗ

МРСК Юга

МРСК СK

79

25

17

17

16

11

11

7

3

2

МОЭСК

МРСК Центра

МРСК Урала

МРСК ЦП

МРСК Волги

Ленэнерго

МРСК Сибири

МРСК СЗ

МРСК Юга

МРСК СK 4

Industry restructuring 2003-2007 Current Tariff Structure

63%

34%

3%

Sales

Transmission & Distribution

Power Generation

100%

17% 7%

Losses 4%

TGCs 6%

34%

RАО UES of Russia

Infrastructure

System Operator

Federal Grid Company

Transmission network 220 kV and above)

Holding IDGC (11 IDGCs –distribution

network 110 kV and below, 7 sales, 5 DGCs,

others)

Market Board

Heat UGC

TGC

Others

Hydro UGC

Power Generation

Industry Structure

Benchmark among IDGCs (9m2011)

Sales

Other power generating companies

MCap (12.2011), RUR billion Revenue, RUR billion Net profit, RUR billion RAB, RUR billion

#2 #2 #2 #2

МРСК Центра МРСК Центра МРСК ЦП

МРСК СЗ

МРСК СK

МРСК ЦП

МРСК СЗ

МРСК СK

МРСК СЗ

МРСК СK

МРСК ЦП

МРСК Центра МРСК Центра МРСК ЦП

МРСК СЗ

МРСК СK

HOLDING

IDGC

MOESK

IDGC of Centre

IDGC of Centre and Volga

Lenergo

IDGC of Urals

IDGC of Siberia

IDGC of Volga

IDGC of North-West

IDGC of South

IDGC of NC

MOESK

IDGC of NC

IDGC of Centre IDGC of Centre and Volga

IDGC of Urals

IDGC of Siberia

IDGC of Volga

Lenergo

IDGC of North-West

IDGC of South

MOESK

IDGC of Centre

Lenergo

IDGC of Urals

IDGC of Centre and Volga

IDGC of NC

IDGC of Volga

IDGC of North-West

IDGC of Siberia

IDGC of South

MOESK

IDGC of Centre IDGC of Centre and Volga

Lenergo

IDGC of Volga

IDGC of Urals*

IDGC of Siberia*

IDGC of NC*

IDGC of South* IDGC of North-West*

4

the structure is provided according to the results of 2011 tariff campaign

* indicative

Page 5: Troika Dialog Russia Forum 2012

IDGC of Center

1 Belgorodenergo

2 Bryanskenergo

3 Voronezhenergo

4 Kostromaenergo

5 Kurskenergo

6 Lipetskenergo

7 Orelenergo

8 Smolenskenergo

9 Tambovenergo

10 Tverenergo

11 Yarenergo

Introduction

10 11 4

8 2

5 7

1 3

6

9

The Company controls 83,6% of power transmission market – tariffs are regulated by the State

IDGC of Centre

Smolensk

Bryansk

Belgorod

Voronezh Tambov

Lipetsk Kursk

Kostroma

Yaroslavl Tver

Orel

MCap, RUR billion

as at January 27, 2012

27,4

Revenue (IFRS) RUR billion

68,1

Length of lines, km thousand*

374,7

Substation capacity, MWA

35-110 kV 31 506

6-10/0.4 kV 15 353

Staff number

31 036

Number of shareholders**

16 775

2011

*- overhead power lines 0.4-110 kV ** - as at 12.05.2011 – the date of registry closed

5

Service area– 458 000

km2

15% of the Russian

population

Page 6: Troika Dialog Russia Forum 2012

Board of directors approved the Regulations on the dividend policy based on a system executing a set of criteria

The first stage of Smart Grid program is completed in Belgorod

The company acquired 100% of Yargorelectroset , the share of IDGC of Centre in regional grid assets increased to 90%

5 years RAB tariff system had been adopted in Orelenergo and Bryanskenergo iRAB amounts USD 3.9 billion (RUR 118 bln)

Successful implementation of the business plan and the investment program for 2010, the actual volume of CAPEX amounted to 103% of the plan –USD 401 million (RUR 12 billion)

12.2004 – 2009

The Company fulfilled its obligations for dividend payments of USD 20.1 million (RUR 611 million) (the pay-out ratio – 12.6%); Company stocks moved across to MICEX quotation list A2; 1H2011 IFRS financials have been reported , demonstrating growth of the key financial indicators

Company developed and approved the Program of innovative development for 2011-2016 Board of directors approved Business Plan and Investment Program for 2012

5 years RAB tariff system adopted in Kostromaenergo, Tambovenergo, Voronezhenergo, Smolenskenergo and Yargorelectroset

Story line 2010-2011

December‟04 As part of RAO UES reforming IDGC of Centre and North Caucasus had been registered for RGC integration

6

April „07 The final structure of the Company had been accepted, including 11 regional grid companies of central Russia (the decision of The board of directors of RAO UES)

March „08 Affiliation of RGCs

May „08 Listing on MICEX and RTS

09.2010 11.2010 12.2010 01.2011 06-08.2011 12.2011

Page 7: Troika Dialog Russia Forum 2012

Strategic goals of the Company (1)

Improvement of quality and reliability of customer services

• implementation of production program;

• implementation of repair program. The planned amount of repair program for 2012 is RUR 1,5 bn,

6% up than expected fact of 2011;

• implementation of Investment program. The investment program for 2012 includes capital

expenditures of RUR 14,3 bn, expecting reduction of CapEx by (-5,5%) in compare with expected fact for

2011

Improving the efficiency of operating and investment activities

• implementation of selected economically attractive investment projects, approved within

the investment program for 2012;

• reduction of management costs

Improving the investment attractiveness

• extension of long-term regulation period in order to save the parameters and to reduce

the tariff pressure on consumers;

• implementation of measures for share liquidity improvement;

• possible privatization 2013-2014

1

2

3

7

Page 8: Troika Dialog Russia Forum 2012

Strategic goals of the Company (2)

Improving the energy efficiency and providing the innovative development

• full implementation of asset management methodology, integration of asset management

system with geo-informational system, that will allow to manage the technical risks (risks of failure

of process equipment)

Improving the availability of power grid infrastructure

• integration of power grid assets of TGC and consolidation of power grids

Development of human capital

• implementation of knowledge and competence of key functional specialists and staff

reserve assessment system;

• development of personnel motivation system

5

4

6

8

Page 9: Troika Dialog Russia Forum 2012

IDGC Holding Minor shareholdres

50.23% 49.77%*

Company structure and key shareholders

Russian Federation

53.69%

IDGC of Center, JSC

YarESK, JSC

Energetik, JSC

51%

11 operating business

units

Subsidiaries – 100%

Group of companies

Yargorelectroset, JSC

Yargoreletroset, JSC is the largest Territory Grid Organization in the Central Federal Region. The result of acquisition of the 100% stake is that IDGC of Center now controls more than 90% of power grid assets in the Yaroslavl region

Energyservice company, JSC

The main activities are providing saving energy services , energy efficiency

Free float 30%

Share capital structure, %

9

CIEET, Closed JSC

Centre of innovations and energy efficient technologies

100%

* - including the State share 0.46%

50,23 15,90%

8,40%

3,20%

2,73%

1,45%

18,09%

IDGC Holding, JSC

GENHOLD LIMITED

THE BANK OF NEW YORK MELLON

IMMENSO ENTERPRISES LIMITED

Energosoyuz Holdings Limited

RUSENERGO FUND LIMITED

Others

Page 10: Troika Dialog Russia Forum 2012

5 Committees:

Share capital structure and corporate governance

10

General Meeting of Shareholders

Board of Directors

Audit Commission

Auditor

Internal Control and Audit Department

Chairman of the Management Board–

General Director

Management board

Supreme governing body:

Strategic

governing body:

Internal control for financial

activities of the Company

External control for financial

activities of the Company

Committee on Strategy

Committee on Audit

Committee on personnel

Committee on reliability

Committee on TC*

* - technological connection

History of IDGC of Center corporate

rating on the national scale

NRCG

Confirmed August’ 11

Upgraded (7+) March ‟ 11

Confirmed July’ 09

Confirmed February’ 09

Assigned September’ 08

Developed corporate governance practice, leading position among IDGCs

Page 11: Troika Dialog Russia Forum 2012

Revenue forecast for 2012 is RUR 1,8 bn*

29%

25% 15%

13%

8%

7%

3%

СМР в рамках концессионных соглашений

СМР по прямым договорам с МРСК Центра

Услуги прочим заказчикам

Ремонтная деятельность

Расширение просек

Проведение энергетического обследования

Услуги контактного центра

Development of energy saving technologies - Energyservice Company, JSC

11

Russian Government Program “Energy saving and improving the energy efficiency till 2020”

1

Participation in investment and repair programs of IDGC of Centre (development,

reconstruction, repair of energy equipment, строительство, clearing and expansion of firebreaks)

Organizing and conducting energy audits, developing action plans on losses reduction of energy sources for customers;

Financial engineering and implementation of turnkey energy saving projects

Implementation of concession agreements in the area of power grid construction and development of street light lines;

Providing services on sales companies market (energy saving contracts, energy meters

market)

2

3

4

5 * - 100% subsidiary of IDGC of Centre

** - BP for 2012

The key activities The structure of forecast

revenue**

*

CIW within the concession agreements

CIW within the straight contracts with IDGC of Centre

Services for the other customers

Repair activities

Expansion of firebreaks

Conducting the energy research

Services of contact center

Page 12: Troika Dialog Russia Forum 2012

Financial and operating indicators: preliminary results 2011 (RAS)

12

II.

Page 13: Troika Dialog Russia Forum 2012

Key RAS figures 2009-2011FF

13

EBITDA RUR bn

Net Profit, RUR bn

EBITDA margin %

Net Profit margin %

Productive supply (inc. TGCs) kWh bn

49,1

60,4 68,1

Indicators 2009 2010 2011FF*

Revenue growth, inc.: 12,6% 23,1% 12,8%

Growth of revenue from power distribution

16,7% 22,8% 14,1%

Growth of revenue from technological connection

(40,8%) 32,7% (23,3%)

EBITDA growth 13,0% 43,6% 23,7%

Net profit growth 44,4% 255,2% 9,7%

ROE 3,14 11,12 11,25

46,9 57,6

65,7

2009 2010 2011ПФ

Revenue RUR bn

от технологического присоединения

прочие услуги

от передачи э/э

7,6 11,0 13,6

15,6%

18,1% 19,9%

2009 2010 2011ПФ

1,3

4,7 5,2

2,7%

7,8% 7,6%

2009 2010 2011ПФ

51,5 53,4 54,1

2009 2010 2011ПФ * - Forecast Fact

from technological connection

other services

from power distribution

Page 14: Troika Dialog Russia Forum 2012

Dynamics of costs structure

14

* - Forecast Fact

Type of cost, RUR bn 2009 2010 2011FF* %2011/2010

Purchased energy for losses compensation

6,8 9,2 8,7 -5,6%

FGC UES, JSC services 7,8 11,0 12,8 16,5%

DGCs services 8,0 9,4 11,2 18,7%

Services of contractors for maintenance and repair of equipment

0,6 0,5 0,5 -7,6%

Labor costs 6,0 7,5 8,0 6,8%

Insurance fee 1,4 1,9 2,6 40,5% Raw and materials 1,4 1,7 2,0 20,7%

Amortization of fixed assets and NMA

4,0 4,3 5,2 20,5%

Leasing 1,8 1,3 0,9 -31,5% Rent fee 0,3 0,4 0,5 32,4% Others 6,3 5,3 4,8 -11,1% Total 44,4 52,6 57,2 8,9%

14,1 14,7 14,9

30,4

37,8 42,3

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2009 факт 2010 факт 2011 ПФ

Неподконтрольные затраты

Подконтрорльные затраты

24,5%

11,8%

4,8% 1,3%

RUR bn Dynamics of costs structure

2009-2011FF*:

Uncontrollable costs

Controllable costs

fact fact FF

Page 15: Troika Dialog Russia Forum 2012

Loan portfolio dynamics & credit rating

Recommended ratio Net Debt/EBITDA = 3

Net debt/EBITDA, RUR billion

Structure of loan portfolio %, 2011

History of IDGC of Centre credit rating

Standard&Poor‟s

Confirmed February‟11

Confirmed July ’10

Assigned November‘09

NRА*

Confirmed (outlook

“Positive”) December „11

Upgraded (level AA-) December ‘10

Confirmed October ’10

Upgraded (level A+) September ’08

Upgraded (level А) August ‘07

* National Rating Agency

Credit rating history

15

6,8 7,6 11,0

13,6 9,3 10,8

14,7 18,7

1,4 1,4 1,3 1,4

0,0

0,5

1,0

1,5

2,0

0

5

10

15

20

25

30

35

40

2008 2009 2010 2011ПФ

EBITDA Чистый долг Net Debt/EBITDANet debt

49%

18%

18%

12%

3%

Сбербанк

ВТБ

Росбанк

Альфа-Банк

Газпромбанк

Sberbank

VTB Rosbank Alfa-Bank Gazprombank

Avg. rate 8,35%

Page 16: Troika Dialog Russia Forum 2012

16

Year Commissioning,

RUR billion

Commissioning power on fixed assets

km MVA

2009 7,7 2414 877

2010 10,0 4155 1050

2011* 13,9 4374 1385

2012F 14,4 4010 811

- Others

14.35

RUR billion

Expected CAPEX for 2011-2015 amounts to RUR 102 billion*

Main uses of CAPEX in 2012

Sources of finance in 2012

- Replacement of the main power equipment

- New construction(substations, overhead и cable lines)

- Developing/Modernization of accounting systems

- ASMD systems, connection, IT

- Modernization and reconstruction

* Forecast Fact

60%

36%

2% 2%

Тарифные источники

Заемные средства

Прочие собственные средства

Плата за ТП

Tariff sources

Borrowed sources Other own sources Payments for technological connection

39,0%

35,9%

6,3%

6,1%

3,0 % 0,4%

9,2%

5,6

5,16

0,91

0,88

0,43 0,05

1,32

14,35

100%

- Purchase of fixed assets

0,43

Page 17: Troika Dialog Russia Forum 2012

Tariffs 2012 – main schedule points

Government approved the Decree 1178 of 29 December, 2011 "On the pricing of regulated tariffs in the Electric Power Industry

The approval of regional regulators of common rates of tariffs for the period from 01 January 2012 till 30 June 2012, at the level ≤ 2011 (subject to execution of the Decree 1172) - is satisfied.

Adoption of regional regulators solutions as follows: - Establishing (or revising) of a long-term options for RAB- regulation from 01 July 2012 and aligning them with the FTS of Russia; - Establishing of tariffs for electricity transmission for 2H2012, provided not exceeding the 11% average growth rate compared with approved tariff level from 01 January 2012

Before 1 April 2012

Approval of the new tariff decisions

1 July 2012

IPR to 2018

Approval of FTS of Russia of long-term RAB regulation strandards

Method of long-term indexing

In the case of absence before 1 January

2012

17

Page 18: Troika Dialog Russia Forum 2012

Key points of 1178 Decree

18

Must be approved by the FTS of Russia (RECs’ can

not make changes)

Criteria for LPR regulation

«Leverage»:

Value of debt at the end of each year of the period must be >=25% of the

invested capital; Correspondence of growth of the average tariff rate

with Ministry of Economical Development

(MED) forecast (no increase in 2013 above

10%)

Based on the actual commissioning of the

actual inputs on CAPEX since 01.07.2014 – taking into account

actual load

Invested capital basis

from 1% to 3% (3% - in the case of growth

(OPEX/CU* i-1 : OPEX/CUi >

2*CPI forecast 1-st year of RAB

regulation ( i – period of transition)

Efficiency index

Territorial grids: for new IC** - approved by FTS

in agreement with MED; for old IC – approved by

regional regulatory agencies

(1=< return on old capital<=return on new

capital)

Rates of return

For 1st period of LPR – in accordance with MED

standard, further taking into account temps of

decrease in accordance with an energy saving

program***)

Amount of losses

Require changes in the guidelines for tariff regulation on RAB basis № 231 of 26 June, 2008 and approval of the FTS in agreement with MED on rates of return on new capital

* conventional unit

** invested capital

*** 10% penalty is applied in the case of absence of the program

long-term period of

regulation (LPR)

Page 19: Troika Dialog Russia Forum 2012

M&A projects - grid assets integration and key steps for investment attractiveness improvement

19

III.

Page 20: Troika Dialog Russia Forum 2012

• Providing monopoly on power grid services market in the regions of presence with more than 97% share;

• Long-term target program for the consolidation of power grid assets have been developed and approved (power grid assets consolidation plan for 2011 - 2015)

Integration key steps

Plans for 2011-2015

Methods and advantages of consolidation

Target/ Program

• Company consolidates the assets primarily in 3 ways: acquisition of power grid, long term property rent, purchase of shares of power grid companies;

• The basic advantages of consolidation are as follows: implementation of a unified technical policy, the development of a unified scheme of long-term development of power grids, improving the reliability of electricity supply to consumers of all categories, increasing of power grid capacity

• It is planned in 2011 to consolidate municipal power grid assets in some regions were Company operates;

• Program provides working with more than 5 thousand owners

20

Page 21: Troika Dialog Russia Forum 2012

M&A projects - grid assets integration

TGCs in IDGC of Centre service area

9 14 18

23 25 26

39

53 62

70

102

0

20

40

60

80

100

120

Ta

mb

ov

Ku

rsk

Ko

strom

a

Orel

Tv

er

Lip

etsk

Be

lgo

rod

Brya

nsk

Sm

olen

sk

Ya

rosla

vl

Vo

ron

ezh

Amount of other TGCs = 441

• The other TGCs‟ average share in revenue in IDGC of Centre service areas – 20%;

• Required Gross Revenue (RGR) of the Company due to the assets consolidation in regions may increase to RUR 10 billion by 2015, RGR share may grow by 97%;

• One of the key goals of the Company is the integration of power grid assets that will allow:

• increasing the reliability level of power supply

• enlarging the power distribution sales market

• improving the quality of customer service

• balancing the tariff on power distribution

21

Share of the Company in the power

transmission market, 2007-2015F

2007 2008 2009 2010 2015F

Market

share in

terms of

money

83% 83.6% 83.8% 84% 97%

Page 22: Troika Dialog Russia Forum 2012

08.2010

Confirmation of presence in RTS EU and RTS-2

- forecast

22

Stock performance and liquidity increase

Company ‘s shares were listed on MICEX (quotation list B), RTS

Company’s shares were included in the index: MICEX PWR

Company’s shares were included in RTS EU*

Dividends payment USD 20.05 million (RUR 610 million), pay-out-ratio 13%

* - RTS energy utilities

Dividends for 2010:

Total (RUR million) 610,9

Net profit share 13%

Dividend yield 1,33%

Company‟s priorities for 2012:

• Stable dividend policy

• Quotation list update (MICEX A1)

• Depositary receipts launching

• Inclusion in international indexes

• Launching of option program

04.09 05.2008 3Q11

2Q11

09.10

4Q11

1Q12

Quotation list update (MICEX A2 )

Quotation list update (MICEX-RTS A1 )

Page 23: Troika Dialog Russia Forum 2012

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Ав

густ

20

08

Ок

тяб

рь

20

08

Дек

аб

рь

20

08

Фев

ра

ль

20

09

Ап

рел

ь 2

00

9

Ию

нь

20

09

Ав

густ

20

09

Ок

тяб

рь

20

09

Дек

аб

рь

20

09

Фев

ра

ль

20

10

Ап

рел

ь 2

010

Ию

нь

20

10

Ав

густ

20

10

Ок

тяб

рь

20

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Дек

аб

рь

20

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Фев

ра

ль

20

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011

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20

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Ав

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20

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тяб

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20

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Дек

аб

рь

20

11

МРСК Центра Индекс ММВБ Индекс ММВБ-Энергетика

Информация о намерениях Правительства о переходе на RAB -регулирование

23

Stock market indicators*

2011 MRKC Russian peers

Int. peers

P/E 4,9 5,3 6,9

EV/ EBITDA

3,3 2,9 4,7

EV/S 0,7 0,5 1,0

EV/RAB 0,37 0,37 1,28

* Data calculation – forecast 2011

Beginning of trading: May 21, 2008 Quotation list: «А2» MICEX

Shares of IDGC of Centre are part of the calculation base in indices:

- MICEX PWR

Feb 17. Head of Russian Government announced the need to curb the growth rate of tariffs on power

Company reports the good financials for 2009 and plans on all the branches to adopt RAB after Jul 01, 2010

Remaining branches to adopt RAB (Nov’10, Jan’ 11)

Shares of the Company have been included into MICEX A2 quotation list Company reports good IFRS financials on 1H2011

Oct

ob

er 2

00

9

Ap

ril

20

10

No

vem

ber

20

08

Sep

tem

ber

20

11

Oct

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011

No

vem

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20

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Dec

emb

er 2

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1

Au

gu

st 2

00

8

Oct

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8

Dec

emb

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8

Feb

rua

ry 2

00

9

Ap

ril

20

09

Ju

ne

20

09

Au

gu

st 2

00

9

Dec

emb

er 2

00

9

Feb

rua

ry 2

010

Ju

ne

20

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Au

gu

st 2

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Oct

ob

er 2

010

Dec

emb

er 2

010

Feb

rua

ry 2

011

Ju

ne

20

11

Au

gu

st 2

011

Ap

ril

20

11

Sep

tem

ber

20

08

Ja

nu

ary

20

09

Ma

rch

20

09

Ma

y 2

00

9

Ju

ly 2

00

9

No

vem

ber

20

09

Ja

nu

ary

20

10

Ma

rch

20

10

Ma

y 2

010

Ju

ly 2

010

No

vem

ber

20

10

Ja

nu

ary

20

11

Ma

rch

20

11

Ma

y 2

011

Ju

ly 2

011

IDGC of Centre

MICEX

MICEX Power

Company‟s shares and sector indexes dynamics

Page 24: Troika Dialog Russia Forum 2012

Attractive object for investment

External favorable factors

1

24

• Presence in 11 regions of Central Russia, with strong growth prospects; • Second largest company of 11 interregional distribution grid companies in terms

of capitalization, revenue, net income, the value of RAB; • Significant underestimation as compared with foreign peers (in multiples P / E,

EV / EBITDA, EV / S, EV / RAB); • Growth of electricity consumption in the whole of Russia for the period 2009-

2020, CAGR - 2,8% *

2

Internal favorable factors • Leading position in innovation in the distribution sector (smart grid, smart

metering); • Highest level among the analogs of corporate governance (National grade 7 +); • The leader of the transition to RAB-regulation; • Growing financial and economic indicators for the period 2009-2011 (sales CAGR

- 20%, EBITDA CAGR - 33% net profit CAGR - 97%); • Low debt level, credit rating S &P; • Strong management team

*Source: Agency for Energy Forecasting


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