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PPF Group: From Voucher Privatization to International Expansionto International Expansion
July 10, 2012Alexej Bechtin, PPF PR Consultant
First 20 years
Slide 1
Four Perspectives on PPF Group (capital & assets)
Slide 2
First 20 years
Kčs 0.1 million
Kčs 4.0 million
Kčs 5 billion
Slide 3
A Perspective on PPF Group (geography)First 20 years
A Perspective on PPF Group (industries & people)
Slide 4
First 20 years
7 employees
Historical Milestones
� 1991 The First Privatization Fund (Czech abbreviation PPF) was established for the first wave of voucher privatisation in then-Czechoslovakia: 4 funds
� 1992 The name PPF Investment Company was adopted� 1993 PPF funds took over shares of 202 Czech companies of total value CZK 4.9
bil.� 1994 140,000 clients have invested with PPF funds during the second wave of
voucher privatisation� 1995 PPF has extended its activities to real estate and asset management
5
� 1995 PPF has extended its activities to real estate and asset management� 1996 PPF has acquired a significant stake in incumbent insurance company,
Česká pojišťovna (Czech Insurance)� 1997 PPF has established Home Credit as consumer finance provider� 1998 PPF has undertaken radical changes at Česká pojišťovna in the process of
company’s turnaround� 1999 PPF has been focusing primarily on financial services� 2000 PPF became a majority shareholder at Česká pojišťovna
Historical Milestones
� 2001 PPF has decided to expand life insurance and consumer credit products into international markets
� 2002 A year of significant acquisitions and start-ups: TV NOVA, Prague’s city bank, Home Credit in Russia
� 2003 Shareholder’s position at TV NOVA has strengthened� 2004 Successful exit from TV NOVA� 2005 Open Gate Boarding School has commenced its activities, being a major
charitable project supported by PPF
6
charitable project supported by PPF� 2006 Home Credit: 500,000 credit cards issued in the Czech Republic; HCFB
Russia has served 11 million clients� 2007 PPF has entered Nomos-Bank by acquiring a minority stake� 2008 Generali PPF Holding was established, a stake at Polymetal was acquired� 2009 PPF has vigorously reacted to the world’s economic downturn, by
optimising business but also by acquiring new assets in energy (EPH), retail (Eldorado) and real estate
� 2010 As the first and only internatoinal company PPF has obtained a pilot licence in China to provide consumer finance services by its own
� 2011 Eldorado acquisition completed in Russia, in the Czech Republic PPF has entered Sazka lottery company together with KKCG, Czech investment group
The way ahead – “cash-generating machine”
Slide 5
…
……
…
PPF Group Financials
PPF Group Highlights
� Assets in excess of EUR 14.3bn as of 30 Dec 2011 (+16% from 31.12. 2010)
� Total equity of EUR 4.268 bn (-3.5% from 31.12. 2010)
� Strong position among investors in Russia (5% of FDI); well-established in CEE and
CIS; expanding in Asia, particularly in China and Vietnam
8
EUR million, based on IFRS 2011 2010 2009 Assets 14,357 12,383 10,802Equity attributable to Shareholders of Parent Company 4,268 4,424 4,000Revenue
3,618 3,357 1,760Net Profit attributable to Shareholders
216 336 289
Introduction
PPF Group is the investment holding of its shareholders.
PPF Group focuses on investment opportunities requiring a capital contribution of EUR 100 million or more.
9
Investment Thesis: PPF Group selects assets with a view to long-term value creation.
Investments managed by PPF
Investments managed by PPF
Other InterestsOther InterestsInvestments jointly managed
with partnersInvestments jointly managed
with partners
Petr KellnerPetr Kellner94.25%
Jean-Pascal DuvieusartJean-Pascal Duvieusart0.25%
Ladislav BartoníčekLadislav Bartoníček0.50%
Jiří Šmejc Jiří Šmejc 5.00%*
* Split of stakes as of 31 December 2011. As announced on 18 May 2012, Jiří Šmejc is selling his 5% stake in PPF Group to other current shareholders. More details follow.
PPF Group’s Portfolio of CompaniesPPF actively manages its portfolio of investments to capture opportunities with significant value-creation potential. The Group's successful long-term investment strategy, which blends full ownership and managerial control of assets and strategic investments by key partners, remains unchanged.
Other Interests
� PPF Partners (72.5%)
� PPF a.s. (100%)
� PPF Art (100%)
Piraeus Bank is the third-largest Greek bank
Investments managed by PPF
� PPF Banka(92.96%) – Czech Republic
Banking
Wholesale bank for the Group and corporate and municipal clients
� Home Credit (100%, except for HC Bank Kazakhstan, 9.99%)
� Piraeus Bank S.A. (5.72%) – Greece
Investments jointly managed with partners
Banking
� Nomos Bank (27.34%) - Russia
Nomos ranks 5th oin Russia in terms of assets)
except for HC Bank Kazakhstan, 9.99%)
HC is a leading consumer finance provider in CEE and CIS; growing in China and Vietnam
� PPF Real Estate Holding (100%)
� Eldorado (100%) - Russia
Eldorado is the No. 1 electronics retailer in Russia
Consumer Electronics Retail
Real Estate
� Air Bank (100%) – Czech Republic
Air Bank is a newly-founded retail bank in CZ
� Generali PPF Holding(49%)
Insurance
GPH is one of the largest life and non-life insurance companies in the CEE region
� Polymetal (20.86%)
Polymetal is the No. 1 silver mining company and No. 4 gold mining company in Russia
Mining
� EP Holding (40%)
EP Holding is the second-largest Czech energy player
Energy
� SAZKA (50%)
SAZKA is the Czech Republic’s largest lottery and betting company
Lottery
10
PPF Group Current Shareholders
Petr Kellner - Founder and majority shareholder of PPF GroupN.V.� Born in 1964; a graduate of the University of Economics, Prague, Faculty of Industrial
Economics in 1986. Petr Kellner founded PPF Group and became Chairman of the Board of
Directors and CEO of PPF investicni spolecnost a.s. in 1991. He was Chairman of the
Board of Directors of PPF a.s. from January 1998 till March 2007. He has been a Member
of the Board of Directors of Assicurazioni Generali S.p.A. since April 2007 anda Member
of the Board of Directors of Generali PPF Holding since January 2008. Petr Kellner owns a
majority stake in PPF Group and manages its strategic development and planning.
11
Jiří Šmejc� Born in 1971; a graduate of the Charles University, Prague, Faculty of Mathematics and
Physics, where he specialized in mathematical economics. In 1992 Jiří Šmejc went into
business and in 1993 became Executive Officer and Director of PUPP Consulting s.r.o. In
1995 he served as Sales Director at Middle Europe Finance s.r.o., (a securities trader with a
focus on acquisitions). Until 2004 he held a 34% share in TV NOVA Group. He joined PPF
Group in 2004 and became a shareholder of the Group in 2005.
PPF Group Shareholders
Ladislav Bartoníček
� Born in 1964; a graduate of the Czech Technical University in Prague, Faculty ofElectrical
Engineering. Ladislav Bartoníček joined PPF investicni spolecnost a.s. in 1991 as
Executive Director and was awarded an MBA by the Rochester Institute of Technology,
New York, in 1993. From 1996 till September 2006 he served as Chief Executive Officer of
Ceska pojistovna a.s. Ladislav Bartoníček became a shareholder of the PPF Group in 2007
and is currently Chief Executive Officer of Generali PPF Holding B.V.
12
Jean-Pascal Duvieusart
� Born in 1966; holds an MBA from the University of Chicago and a Masters degree in
Commercial Engineering from the Catholic University of Louvain, Belgium. Jean-Pascal
Duvieusart joined McKinsey in 1992 and worked in Brussels and New York prior to
moving to Central Europe. He was managing partner of McKinsey Prague from 1999 until
2005, when he assumed the leadership of McKinsey CIS and Central Europe. He has been
advising banks and insurance companies as well as various industrial companies inRussia,
the Czech Republic, Slovakia, Hungary, Poland and Romania.
PPF Group Assets Overview
13
PPF Group’s New Businesses: SAZKA (acquired in 2011 )Lottery – Czech Republic
14
NEED PICTURE
Company Introduction
The joint venture between PPF and KKCG (50:50), took over the business of SAZKA, which was
the former monopoly provider of lotteries in the Czech Republic and which became insolvent in
spring 2011
� Since 1 November 2011, Sazka has been operating its lottery business using the SAZKA brand,
and currently has a market share of 95% (compared to 85 % at the moment of takeover)
15
and currently has a market share of 95% (compared to 85 % at the moment of takeover)
Sazka provides its products and services through a unique national sales network of almost 6,500
retailers, including post offices all across the Czech Republic
Company Restructuring
Immediately following acquisition, PPF and KKCG installed a new management team and started restructuring the company under PPF’s management
Key aims: to increase sales including profitability and to restore customers’ trust
Key tools: significant restructuring of operations and sales network, investment into advertising campaigns, staff reorganization
� significant OPEX reduction after the acquisition
16
� significant OPEX reduction after the acquisition
� number of employees reduced from 572 in 2010 to 322 currently, with a further-decreasing trend
2010 2011 2012 (budgeted)
312 192 276
Sales (EUR million)
Sales
Sales (CZK)
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
�As of March 31, 2012 sales have almost achieved the average sales level from the past: revenues of 70 million EUR, profit 6.2 million EUR
17
100,000,000
200,000,000
300,000,000
Jan
uary
Feb
rua
ry
Ma
rch
Ap
ril
Ma
y
Jun
e
July
Au
gust
Sep
tem
ber
Oct
obe
r
Nov
em
be
r
Dec
emb
er
Jan
uary
Feb
rua
ry
Ma
rch
2011 2012
Sazka SSK
* 1-10 2011 sales of former SAZKA, a.s. + 11-12 2011 sales of NewCo
PPF Group’s New Businesses: AirBank started in 2011Retail banking
18
AirBank at a glanceAirBank aims to be the bank of choice for retail customers seeking progressive banking, and is set to achieve break-even in year 4 of its operations
Net incomeCZK million
“The first bank that I like”
▪ … because it makes banking elegantly simple▪ … because it does not hide things▪ … because it does not hide things▪ … because I pay only when I am
satisfied
� Launched on November 24, 2011;startedwith transactional and savings accounts
� Gained immediate attention and success in deposit-collection with its “Top 3 Guarantee” proposition
� Will continue to extend its product line for retail customers (cash loans in Q3-2012) and later for small entrepreneurs
Key Businesses: Home CreditFinancial Services
20
Home Credit Group:Delivering returns and growth
Home Credit’s unique multi-channel retail finance model delivers outstanding returns in emerging markets
Our effective risk management, specifically tailored to emerging markets,
Scaling up Home Credit’s low-cost branch network is the main driver of growth in Russia
21
Our effective risk management, specifically tailored to emerging markets, has given us a better-quality portfolio, a bigger share of the market and higher profits
Low-cost and highly flexible IT systems and operations provide us with a competitive advantage in the mass-market segment
We are backed by robust funding and strong retail deposit gathering
We are focused on attractive markets, each with a compelling growth outlook
Sustained strong market position in CEE/CISwhile expanding in Asia
▪ Active clients: 633 thousand▪ Distribution points: 9,184▪ Net loans: EUR 265 million▪ ROAE: 19%
Czech Republic/Slovakia
▪ Active clients: 3.7 million▪ Distribution points: 61,181▪ Net loans: EUR 2.7 billion▪ ROAE: 38%
Russia
China
22
All data as at end of December 20111Standalone company’s financials
Kazakhstan
China
▪ Active clients: 637 thousand▪ Distribution points: 11,114▪ Net loans: EUR 154 million
China
Vietnam
▪ Active clients: 248 thousand▪ Distribution points: 1,237▪ Net loans: EUR 97 million▪ ROAE: 22%
▪ India – pilot since Jan 2012▪ Indonesia– building joint venture
partnership▪ Philippines – sizing market
opportunity
New Market Entry Opportunities
▪ Active clients: 196 thousand▪ Distribution points: 2,005▪ Net loans: EUR 40 million
Belarus
▪ HCBV owns 9.99% of AO Home Credit Bank Kazakhstan
▪ Active clients: 315 thousand▪ Distribution points: 1,632▪ Net loans1: EUR 170 million▪ ROAE1: 64%
Kazakhstan
Russia: The largest private lender of unsecured consumer loans…
Net profit of EUR 263 million at 38% ROAE
Market leader with 24% POS market share; 4th in consumer loans (3.6% market share) and 6th in total retail loans (2.2% market share)
Most successful cross-selling machine in Russia with greatest penetration (22.5 million customers in database)
23
million customers in database)
Profitable growth in POS core business and successful expansion into cash loans with major growth opportunities
Dynamic retail deposit growth (from ~19% to ~56% of liabilities within 2 years) has created a stable funding source with attractive cost
Market-pioneering bank network expansion with effective and low-cost branches; 62% of the 1,273 at YE2011 were opened in second half of 2011
Retail-centric “branch” network drives sales momentum; HCFB is one of the leaders based on branch network size (currently 3rd, after largest state banks)
… and expanding presence in Asia with enormous socio-demographic potential
Roll Out TimetableChina
� Home Credit received the first ever full foreign company CF
license from CBRC in China – push for national rollout
� Expand to new provinces – maximize geographical reach
� Building unique operational platform based on cooperation
between guarantee company and local leading financial
institutions
24
Open till 2011 2012 Roll Out 2013 Roll Out
Vietnam
institutions
� Further enhance POS commodities; Maintain strong focus on
Sales/Risk
� Secure diversified funding for 2013 and further optimize
leverage
� We are the only remaining foreign consumer finance company
� Navigate sales in loan growth cap environment, maintain market leader position in motorbikes sales finance
� Continuous risk improvement despite complex macroeconomic situation
� Investment into IT operational platform
Effective risk management with ability to optimize risk at mass scale
Up to 60,000 applications processed daily; average time-to-yesfor 75% of applications in just 15 seconds creating a leading customer experience
High approval rate of 55-80% while reducing 30+1 delinquency by more than 47% in last 2 years
Online anti-fraud system and biometric measures reduced fraud by 29%
25
Online anti-fraud system and biometric measures reduced fraud by 29% (€1.1m saved per month) from YE2008 to YE2011
Collection machine with 89% collection efficiency at times generating over 11.5 million calls a month using best-practices comparable to western markets
Scorecards: high predictive power, stability and flexibility, specifically designed for each product and customer segment
6+ years of experience and extensive customer database (~1/3 of all households in Russia, CZ & Slovakia) are a competitive advantage that is hard to replicate
1 Loan receivables which are overdue by more than 30 days
Strong growth momentum ...
Net Receivables+42%
2011
3,260
2010
2,292
New volumes+43%
Q1 2012
1,313
2011
4,299
2010
3,014
Substantial growth … particularly in Cash Loans
EUR million
Q-Q+63%
26
20112010Q1 201220112010
Net Income
Sustained profits Strong capitalization
2010 2011 2010
+47%
2011
All data represent a pro-forma consolidation of Home Credit B.V., Home Credit Asia N.V., Consumer Finance Company (China) and PPF Vietnam, and exclude effects of discontinued Ukrainian operations
POS loansCar/Motorbike loansOther Credit cards Cash loans
Total equityTotal assets
+5%
... with attractive returns and margins
High margins and strong fee generation … … and solid efficiency
283238
42
20112010
1920
5049
2010 2011
Cost/IncomeCost/ANRNet interest income/ANR Operating income/ANRPercent Percent
27All data represent a pro-forma consolidation of Home Credit B.V., Home Credit Asia N.V., Consumer Finance Company (China) and PPF Vietnam, and exclude effects of discontinued Ukrainian operations
… with well managed cost of risk … leading to attractive returns
20112010
2323
68
20112010
ROAAROAE
76
910
20112010
2010 2011
Impairment losses/ANR Coverage ratioPercent Percent
Key Businesses: PPF BankFinancial Services
28
Overview
� Established in 1992, Part of PPF Group since 2002
� Main shareholders: PPF Group N.V. (92.9%) and City of Prague (6.7%)
� International Operations through Head Office in Prague. Four Client Centers in
EUR m 12/06 12/07 12/08 12/09 12/10 12/11CAGR 06-11
# of employees 117 118 93 119 151 170 +8%Total assets 882 1 042 1 678 1 634 2 089 2 547 +22%Loans to clients 338 288 332 513 744 818 +18%Equity 59 83 100 133 166 182 +24%Revenues 52 70 85 101 75 89 +8%Operating income 31 41 49 65 51 56 +10%
29
Office in Prague. Four Client Centers in Prague
� Wholesale bank for PPF Group, Czech corporates and Municipal clients, with extensive operations on global capital and financial markets
Net profit 6 19 22 31 26 25 +30%CIR 57% 39% 45% 30% 38% 45% -5%CAR*) 14,7% 13,5% 10,7% 10,1% 11,1% 10,4% -7%ROAA*) 1,1% 1,8% 1,7% 1,7% 1,3% 1,0% -1%ROAE*) 21% 36% 27% 32% 20% 14% -7%Net Loans/Deposit 58% 33% 23% 40% 47% 43% -6%Tier 1/Capital 86% 100% 100% 100% 100% 100% +3%*) according to Czech Accounting Standards (CAS) and criteria of the Czech National Bank
Note: growth rates and CAGRs are calculated from CZK values
2011 - Diversification of income and growth of client base
Business Lines Highlights
Investment banking
Treasury
• Primary dealer in governmentbonds
• Investment product development
• Brokerage services• Custody services
• Asset and liability management
• Advisory for non-BankFI
Large Corporates
• Increasing both assets and number of corporate clients
• Short-term lending with good collateral coverage
• Keeping clean loan book
Export/ structured
• Major export financing project with EGAP support completed
• Structure finance and bank loan
30
• Advisory for non-BankFI• Financing of the Group
Municiple Banking
• Transaction services for public-sector clients
• Introduced innovative deposit products
Finance • Structure finance and bank loan syndications
Private Businesses
• Expanding client base• Increasing revenue from Russian Desk• Opening of Client Centre in Praha 10-
Vinice
Consumer Finance
• Funding of receivables from revolving loans and credit cards
Private Banking
• Starting operation, targeing private clients with assets more than EUR 1m
Key Businesses: Nomos BankFinancial Services
31
(RUB in bi l l ions) 2010 2011 % change
Total assets 530.2 662.1 24.9%
Gross customer loans 354.9 468.3 32.0%
Customer accounts 313.4 382.4 22.0%
Shareholders ' equity 46.9 62.3 32.8%
Total equity 57.9 75.7 30.7%
Net profi t 10.4 12.1 16.3%
Tier 1 capita l 56.6 73.9 30.6%
Total capita l 83.3 99.3 19.2%
Net interest margin (%) 5.3 5.5 --
Cost income ratio (%) 43.5 47.2 --
RoAE (%) 21.1 18.2 --
ROAA (%) 2.3 2.0 --
NOMOS at a glance
� Largest listed privately-owned bank in Russia with free float of 24.99% according to Interfax-CEA(1)
� 2nd largest privately-owned and 8th largest banking group in Russia by total assets according to Interfax-CEA(1)
� Strong growth track record both organically and through acquisitions
� Expanding distribution platform including 287 branches and outlets, and 1,849 ATMs in 42 economically-developed regions of Russia(1)
� Broad geographic network with focus on 5 key regions - Moscow, Khanty-Mansiysk/Tyumen/Yamalo-Nenets, St. Petersburg, Novosibirsk and Khabarovsk(1)
� Key shareholders, ICT and PPF, committed to the Bank and focused on value creation
(3)
NOMOS’ International Credit Ratings
(4)
(5)
(6)
(6)
(6)
(6)
(6)
(6)
(7)
Tier 1 ratio (%) 10.6 12.0 --
Capital adequacy ratio (%) 15.6 16.2 --
32(1) Data as of December 31, 2011(2) According to Rosstat(3) RoAE to NOMOS equity holders
(4) Including one-off IPO transaction costs of RUB 215 mln; CIR would comprise 46.6% for FY2011 if including IPO transaction costs(5) Including one-off IPO transaction costs of RUB 215 mln; RoAE would comprise 18.5% for FY2011 if excluding IPO transaction costs(6) Pro forma for year 2010 assuming that the acquisition of BKM took place on January 1, 2010(7) Including one-off IPO transaction costs of RUB 215 mln; RoAA would comprise 2.1% for FY2011 if excluding IPO transaction costs
NOMOS’ International Credit Ratings
Year Fitch Moody's
2012
BB (upgraded 11 Aug 2011)
Ba3 (confirmed 17 Nov 2011)
The regions of NOMOS’ presence cumulatively produce 84%(2) of total Russian GDP
Multi segment business
franchise
Over 11,300 corporate clients
Appr. 78,500 small business clients
Appr. 1.5 m retail clients
St-Petersburg
Moscow
Tyumen
Khanty-Mansiysk
Novosibirsk
Khabarovsk
(1)
(1)
(1)
Salekhard
(Yamalo-Nenets)
Uniquely positioned between small regional and
large state owned institutions
#2 private banking group in Russia, #8 by assets
(RAS total assets, RUB in billions)
Local banks (private)
Foreign banks (private)
State-owned
Listed
NOMOS
Market cap (US$ bn) as of May 21, 2012 (5)
Largest listed
(1)
33Source: Interfax-CEA 1Q 2012 (based on total assets according to RAS data)(1) Interfax-CEA 1Q 2012(2) Includes VTB24, Bank of Moscow and Transcredit(3) Includes Rusfinance and Deltacredit
(4) NOMOS , BKM , NOMOS-REGIO, NOMOS-BANK-Siberia, Inbank, NMB combined under RAS(5) Source: Bloomberg(6) Average daily turnover on London Stock Exchange from January 1, 2011 through April 11, 2012
Largest listed
privately
owned bank
Key highlights
Solid financial standing
and conservative risk
management demonstrated
across the economic cycle
A long-term consolidator
in the attractive Russian
banking sector
34
Strong platform for
small business and
retail banking growth
Low-risk
investment banking
business
Key Businesses: Generali PPF HoldingFinancial Services
35
Generali PPF Holding – overview
A leading insurance group in CEE, active in the pensions sector as well
Joint venture between PPF and Assicurazioni Generali, est. 2008
Present in 14 countries in CEE and CIS
16 billion assets
More than 13 million clients
Excellent profitability and operating results
Responsible for 6% of Generali
Group GWP while at the same time
net profit creates over 30% of total
Group’s profit
GPH Key indicators
+20%
Operating result (Euro m) Combined ratio ( % )
- 3,7%
2010 2011 2010 2011
37
Net profit (Euro m)
+28%
Pension funds’AUM (Euro m)
+8,0%
2010 2011 2010 2011
2010 2011
GPH Operational Highlights – profitable growth in challenging market conditions: 2011Net profit at EUR 314m, (+ 28% y-y)
Total GWP in Non-Life segment stable at EUR 2,261m despite negative development in key markets,
especially in Motor segment
GWP Life regular premiums increased to EUR 994m (+ 1.4% y-y)
Total GWP (Life + Non-Life) reached EUR 3,393m
Operating result at EUR 503m (+20.1% y-y),
38
Net Combined Ratio improving to 89.5% (-3.7 p.p.), an excellent level compared to the market and within
Generali Group
Net Technical Result in Non-Life improving significantly to EUR 201m (131m in 2010)
Shareholder’s Equity stable at EUR 4.4bn
General expenses decreased by 1.2%
Significantly better performance than our peers in CEE (NCoR)
99%97%
99%
102%105%
102%99%
107% 105%
95%97% 98%
102%105%
100%
105%
110%
115%2009 2010 2011
39
88%
93%
97%
93%
89%
95%97%
75%
80%
85%
90%
95%
GPH PZU Allianz VIG AXA Uniqa
Source: GPH, M&A and Analysis Department
Key Businesses: EldoradoRetail
40
Key Businesses: Eldorado
Profile
� Eldorado is the largest consumer electronics retailer of household appliances in
Russia. It has 670 stores (including franchises) in 455 cities throughout the country.
41
� Total revenue in 2011 exceeded RUB 82bn
� Eldorado was founded in 1994; PPF Group entered the company in 2009 by acquiring
50% + 1 share; in 2011, PPF completed a buyout of all remaining shares from Igor
Yakovlev and now controls 100%.
Eldorado at a glanceProfile
� Largest geographical overage
� 385 stores in 170 cities, 285 Franchisees in 285 cities across Russia
� Eldorado business split between regions: Siberia 19%, North-West 17%,
Central 17%, South-West 16%, South 16%, Urals 15%, Internet 1%
42
Key Indicators 2011
Gross Margin Closing Net Debt 28,90% 12 bn RUR
2011 23,9 bn RUR 2010
2010 27,40% 2011 9 bn RUR22.69 bn RUR
43
EBITDA6.7%
2011 5,5 bn RUR
2010 6.1%5,08 bn RUR
’000 RUB31 December
201131 December
2010
ASSETSTotal non-current assets 9 828 205 9 045 051
Total current assets 27 987 802 22 467 869Total assets 37 816 007 31 512 920
EQUITY AND LIABILITIES
Total equity 2 489 411 -7 959 340
Total non-current liabilities 561 010 1 261 374
Total current liabilities 34 765 586 38 210 886 Total equity and liabilities 37 816 007 31 512 920
Key Businesses: PolymetalNatural Resources
44
Polymetal at a glanceLeading precious metals producer in Russia and Kazakhstan: FY11 gold equivalent (‘GE’) production of 810 koz1: 55% gold,
41% silver, 4% copper
5 operations in Russia and 1 operation in Kazakhstan, including 3 centralised processing hubs
High growth at high grade: a rare combination in gold mining� High-quality asset portfolio: JORC-compliant GE reserves of 14.3 moz at 4.2 g/t GE plus 13.8 moz of GE resources at 3.9 g/t GE2
� Targeted 2011-2014 gold equivalent production growth of 73% to GE 1.4 Moz
Premium Listing on LSE Main Market: FTSE 100 participant, market capitalization US$5.7bn 3
Mayskoye
Production
45
Source: Company information, Bloomberg(1) Twelve month period ending 31 December 2011; GE at 60:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios(2) As at 01.01.2012(3) As at 01.05.2012
Voro
Khakanja
Omolon
Albazino
Dukat
Amursk POXVarvara
ProductionDevelopment
Post-IPO shareholding structure: same assets – NewCo
� $0.2/share dividends to be paid for FY2011to POLY Int shareholders subject toapproval by the AGM (16 May – Ex divdate; 18 May– Record date; 18 June – Paydate)
� Starting FY2012, the Company's intention isto pay annual dividends of 20% of netincome provided that net debt/adjustedEBITDA is less than 1.75
Alexander Mamut
17.9%
International (Jersey)
Free Float51.1%
ICT Group(Alexander Nesis)
PPF Group
20.9% 10.1%
Dividend Policy
46
� 83.3% of shareholders of JSC Polymetalconverted their shares to Polymetal Intshares through ISSF1
� As a result of the MTO launched on 23 Nov2011 at RUB 531.15 per share, PMTL’sholding in Polymetal has increased to99.48% by 16 Feb 2012
� Squeeze-out to be applied to remainingshares
� GDRs delisted from LSE. Ordinary sharesare also expected to be delisted soon fromthe MICEX-RTS
JSC Polymetal(Russia)
Existing Asset Base of JSC Polymetal
99.48%
PMTL Holding Ltd.(Cyprus)
100%
(1) Institutional Share Swap Facility
Free Float0.5%
(GDRs + Russian ords)
MTO and Squeeze Out
Fast, majority invested, production growth
180 210 220
140
220 220
130 220
Mayskoe
Albazino
Omolon ops
Gold equivalent production1, koz
810
1000
1300
1400
Capital expenditure2, US$m
47
300 280 320 340 350 340
151 186 160 150 130 120
136170 128 140 140 140
18
98 127 100 120 140
19 46
180 210 220
30
2009A 2010A 2011A 2012E 2013E 2014E
Varvara
Khakanja
Voro
Dukat ops
Source: Company information(1) GE at 60:1 Ag oz/Au oz and 1:5 Cu mt/Au oz conversion ratios(2) 2009-2011: additions to PP&E as accounted in the audited consolidated cash flow statement + amounts payable at the end of the period
605
753810
Polymetal strategy
Achieve design capacity at existing mines Achieve design capacity at projects currently in construction or ramp-up phase by 2nd half of 2013 and achieve an annualized run-rate of GE 1.4 Moz in 2014. Assets in construction or ramp-up phase expected to generate production growth are the Amursk POX hub, the Omolon hub and the Dukat hub
Invest in exploration to ensure growth beyond 2014Near-mine – to expand the Group’s reserve base and leverage existing processing facilities
Greenfield – to establish the feasibility of constructing two new standalone mines by 2013
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Maintain exemplary corporate governance
Pursue “bolt-on” acquisitionsPursuit of selected synergistic ‘bolt-on’ acquisition opportunities with a view to leveraging processing capacity, infrastructure and operational expertise at our existing processing hubs or transforming current standalone mines into new hubs
Key Businesses: EP Holding/EP EnergyEnergy
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Overview and summary of last 12 monthsIn the last 12 months EPH strengthened its focus on the Energy Sector and further developed its mining operations
Key Structural Changes in the Last 12 Months
EP ENERGY (an EPH division) established (Feb 2012)
� EP ENERGY's key strategic points include its presence in contracted and regulated energy operations, dynamic activity in acquisitions and growth, and also maintaining a proactive and responsive approach to its customers
� New management: J. Špringl - CEO and M. Janča - CFO� 5 Divisions: (1) Mining, (2) Power and Heat, (3) Renewables, (4) Trading and Supply, (5) Coal Trading and Logistics
EP INDUSTRIES spun-off from EPH (Sep 2011)
� All industrial companies were devolved from EPH and merged into the new EP INDUSTRIES group� Focus on investments in industrial assets and activities outside the energy sector (the power engineering industry and services remain a � Focus on investments in industrial assets and activities outside the energy sector (the power engineering industry and services remain a
major pillar of EP INDUSTRIES)� EP INDUSTRIES includes the following companies: SOR, EGEM, ELEKTRIZACE ŽELEZNIC, MSEM, VČE-montáže, SEG, PROFI-
ELRO, SERW and První brněnská strojírna; currently negotiating the acquisition of a part of SES Tlmače
MIBRAG and Energotrans transactions (Jul 2011)
� EPH signed contract to purchase remaining 50% stake in MIBRAG � Simultaneously, EPH sold Energotrans to ČEZ� Both transactions are currently awaiting Antitrust Office approval
One Important Status Change
PG SILESIA started commercial operations (Apr 2012)
� Taken over in Dec 2010, since then EPH is investing in opening three mining areas� In April 2012 started mining in the first area (LW160), level of approx. 1 Mt p.a
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SummaryWith the exclusion of one-offs, EP Energy (a EPH division) in the last years kept delivering stable EBITDA of EUR 320m
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341329
289
322321
EBITDA of EP ENERGY Companies(EUR million)
Major one-off items included(c-32.3mEUR)• Czech CO2 tax impact in 2011 c-EUR13.3m (also applicable in 2012)
• Lower coal sales due to maintenance of Lippendorf plants c-EUR13m
• Trades concluded in 2008 with impact in 2011 c-EUR6m
Major one-off item included (c+18mEUR)• Exceptional margin from power trades
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2008A 2009A 2010A 2011A 2012Plan
Key Businesses: PPF Real EstateProject of the future Moscow Telecom City
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PPF Real Estate HoldingCompany Profile
PPF Real Estate Holding B.V. consolidates all of PPF Group’s Real Estate activities and functions
as a real estate investor, developer, owner and professional advisor
It currently belongs to the largest market players in both the Czech Republic and Russia with
the future aim of becoming a global player in the real estate business
Due to its size, its activities are split into two branches: PPF Real Estate CEE and PPF Real Estate
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Russia.
Real Estate at PPF is ChangingOrganizational and Personnel changes
�A clearly-defined new investment strategy� IRR above 20%�Profit criteria▫CEE > EUR 50 million▫Rest of the world > EUR 100 million
�Gradual disposal of all non-core projects
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�Gradual disposal of all non-core projects�Emphasis on a low number of projects with high potential�No minority shareholdings in the future
Business Highlights 2011Two regional retail centers opening in Russia in late 2011
� Ryazan: Investment – EUR 154 million, 54.000 m2 GLA, NOI: EUR 15.0 million
� Astrakhan: Investment – EUR 71 million, 37.000 m2 GLA, NOI: 9.0 million
Reality CZ Closing – major transaction in Czech Republic
� Disposal of 25 buildings, IRR > 20%, Proceeds: EUR 90 million
� Acquisition of a majority stake in a development of a large scale logistic project in Moscow:
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� Acquisition of a majority stake in a development of a large scale logistic project in Moscow:
Investment – EUR 305 million, 360.000 m2 GLA
� Acquisition of two landmark buildings on Parizska, the most luxurious of Prague’s high-end
shopping streets
Real Estate Strategy
Full value chain presence
Cash-generation focus
� Objective to generate sufficient cash flow to REH shareholders� Key drivers
� Net rental income focus
� Presence across the real estate value chain in order to capture maximum volume of absolute proceeds� Real estate investment advisory and development� Real estate investment activity and construction� Center management
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focus
Strong IRR drive
� Net rental income focus� Prefer instant cash proceeds to longer recovery� Investment into highly profitable new development projects
� Strong focus on maximizing IRR, even in “tough times”� Interesting opportunity to generate above average IRR seen in
distressed investment opportunities
Future things to look forward to
Continuous development of the Russian landmark projects such as:
� Moscow TelekomCity – a large high-tech office park. Investment: EUR 885 million, GLA 406,000m2,
NOI: EUR 103 million
� Mitino Shopping Center, Moscow – Investment: EUR 140 million, GLA 45,000m2, NOI 25 million
� South Gate Industrial Park – a logistics park – Investment: EUR 305 million, GLA 553,000m2,
� Consolidation of all logistics projects under one umbrella platform – with a potential of up to 1.5 million m2
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� Consolidation of all logistics projects under one umbrella platform – with a potential of up to 1.5 million m2
of GLA – putting it in the top 3 in the whole of Russia
� Very active search for further investment opportunities throughout the world – We are currently
investigating opportunities in Turkey, Germany, USA and Holland, each with a minimum investment
volume of EUR 100 million
� Future NOI value of all current projects in development if completed ~ EUR 270 million / year
South Gate Industrial Park TelecomCity Moscow
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Thank you!
Slide 17
Czech Brewing Industry
Short Summary
From Dispersed Ownership to Concentration and Back
�Hundreds of industrial, castle, monastery etc. breweries existed in Bohemia at old times (similar like in Germany – even now)
�Breweries also differed according to ethnic �Breweries also differed according to ethnic principles: Czech vs German (Pilsen-Plzeň, Budweis-České Budějovice)
� Industrial brewing led to concentration: example of merger between (Czech) Pilsner Urquell and (German) Gambrinus breweries in the 1920s in Pilsen
�After World War II (also under Communist rule) there were cca 45 industrial breweries in CZ
From Dispersed Ownership to Concentration and Back
�After so-called Velvet Revolution the Czech Brewing Industry became an object of interest from abroad: both private equity and (mainly) large international beer companies entered the market, acquiring breweries
�Examples of unsuccessful acquisitions, without respect to the Czech beer culture: BASS of UK acquiring Prague-based Staropramen in mid-90s - quick exit, selling to Belgian Interbrew
�The best success story is Pilsner Urquell´s acquisition by �The best success story is Pilsner Urquell´s acquisition by South African Breweries in 1999: SAB made PU its international premium brand, exporting into 100 countries
�Cca 30% of the market is in Czech hands – private companies
�Budweiser (Budejovicky Budvar) represents the only exception, being so-called National Enterprise, the unique of its kind, owned by the Czech government (Ministry of Agriculture) – because of trademark disputes with Anheuser-Busch world-wide
International vs Czech
�Pilsner Urquell, Radegast, Kozel – SABMiller
�Staropramen, Braník, Ostravar –
�Lobkowicz, Jezek, Janacek, Platan – K Breweries
�Holba, Zubr, Litovel – Moravian-Silesian Breweries (PMS)
�Bernard – individual owner together with Belgian Duvel
Braník, Ostravar –Molson Coors
�Starobrno, Krusovice, Zlatopramen -Heineken
�Bernard – individual owner together with Belgian Duvel Moortgart
�Svijany – individual owner�…and many others (incl.
microbreweries)
International vs Czech
�Sophisticated Brand Marketing and Sales Techniques
�Major sponsorship (Olympics, Soccer)
�More „home-made“ marketing, appealing to Czech pride
�Sponsorship of local initiatives (music, sports)
�Positioning as a „guard of Czech beer (Olympics, Soccer)�Focus on historical
heritage, brewing museums/tours
� International Production Standards (ISO, HACCP)
�Strong pressure on costs/financials –profitable business
�Positioning as a „guard of Czech beer against so-called unified Eurobeer“ -Bernard
�Although high technical level but not so strict technology requirements (more improvisation – appreciated by consumers)
�Microbreweries with restaurants/pubs