Lsr · RUS:LSRG
Lsr — FY2008 Earnings Presentation
37 slides from Lsr's earnings presentation, 2009
Slide 1: 2008 Results Presentation
1 2008 Results Presentation
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to the bound by the following limitations: This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an o
Slide 3: Senior Management Team
Senior Management Team IIgor Evgeny E Georgy G Elena El Levit Yatsyshin Vedernikov Tumanova CEO, Managing Director Managing Director CFO, Member of Development and Building Materials, Aggregates Member of the Board of Directors Construction and Construction Services the Board of Directors Extensive
Slide 4: Agenda
Agenda Review of 2008 Results 5 Company Overview 25 4
Slide 5: Key Financials
Key Financials RUR m 2006 2007 2008 Revenues 21,111 , 35,838 , 49,813 , EBITDA 3,626 7,897 13,178 EBITDA margin 17% 22% 26% Normalised operating profit 2,505 6,343 11,130 Normalised operating profit % 12% 18% 22% Normalised net profit 1,002 3,072 5,298 Normalised EPS 10.40 RUR 31.83 RUR 54.75 RUR Ch
Slide 6: Key Financials
Key Financials Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) G Growth: h 39% G Growth: h 67% 49,813 13,178 35,838 7,897 21 111 21,111 26% 3 625 3,625 22% 2006 2007 2008 2006 2007 2008 Sales and EBITDA Breakdown 2008 Sales breakdown 22% 23% 35% 15% 5% Construction Real Estate Development Constructio
Slide 7: Real Estate Development
Real Estate Development Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) Growth: 20% Growth: 62% 4,002 12,218 10,172 2,466 33% 3,275 270 24% 2006 2007 2008 2006 2007 2008 Key Financials (RUR m) B i Business Class Cl and d Mass M Market M k t R lE Real Estate t t in i Total* Elite Real Estate Real Esta
Slide 8: Real Estate Portfolio
Real Estate Portfolio Total Net Sellable Area: 8.9 million square meters NSA by Segment NSA by Stage NSA by Region M Mass-market; k t Design D i and d permitting; itti Under construction; 4,624 th sq m / 52% 1,519 th sq m / 17% St. Petersburg; 908 th sq m 10% 7,730 th sq m / 87% Held for future deve
Slide 9: Construction
Construction Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) G Growth: h 127% G Growth: h 273% 13,119 3,121 5,771 4,893 24% 663 837 14% 2006 2007 2008 2006 2007 2008 Key Financials (RUR m) Plus Organiс g 2007 2008 i iti in acquisition i T t l 2008 Total growth,% Yekaterinburg Sales volume (th sq m) 3
Slide 10: Commercial Real Estate
Commercial Real Estate Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) 181 105 93 18 2 12 2006 2007 2008 2006 2007 2008 Key Financials (RUR m) 2007 2008 Change Net lettable area at 31 Dec (th sq m) 12 15 26% Sales revenue 93 181 93% EBITDA 12 105 741% EBITDA% 13% 57% - Gain (loss) on revaluation of i
Slide 11: Building Materials
Building Materials Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) 9 295 9,295 1,157 Growth: 20% G Growth: h 9% 3,609 19,692 16,474 3,318 20% 18% 2006 2007 2008 2006 2007 2008 Key Financials (RUR m) Total* Reinforced Concrete Ready-Mix Concrete Bricks Aerated Concrete 2007 2008 Change 2007 2008 Chang
Slide 12: Aggregates
Aggregates Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) 4 422 4,422 1 382 1,382 Growth: 54% Growth: 57% 8,520 3,147 5,523 2,000 36% 37% 2006 2007 2008 2007 2007 2008 Key Financials (RUR m) Total* Sand Crushed Granite 2007 2008 Change 2007 2008 Change 2007 2008 Change Sales volume (th m3) n/a n/a n
Slide 13: Construction Services
Construction Services Sales (RUR m) EBITDA (RUR m)/EBITDA Margin (%) 1,126 Growth: 15% 2,752 Growth: 26% 397 852 2,397 676 31% 28% 2006 2007 2008 2006 2007 2008 Key y Financials (RUR m) Total Tower Cranes Services Pile foundation construction Transportation 2007 2008 Change 2007 2008 Change 2007 200
Slide 14: Market Shares in 2008
Market Shares in 2008 LSR Market Positions in St Petersburg and Leningrad Region Building Materials Aggregates Reinforced Ready-mix Aerated Crushed Bricks Sand Concrete Concrete Concrete Granite #1 #1 #1 #1 31% #1 51% 22% 60% 60% 68% #1 Tower cranes Real Estate i services Elite Mass market #1 #1 #3
Slide 15: Inventory and Capex
Inventory and Capex Real Estate Development: Inventory and Capex Programme (RUR m) Finished Goods (RUR m) 10,330 45,472 7,488 6,519 29,927 3,219 37,984 2,965 26,708 31 Dec 2007 31 Dec 2008 2006 2007 2008 Construction of buildings in progress and land acquisitions Note: Represents capex capitalised i
Slide 16: Debt
Debt Debt Development (RUR m) 3.5 36,874 , 33,628 2.6 24,151 2.0 14,478 15,498 12,870 Gross debt Net debt Net debt / EBITDA 31.12.06 31.12.07 31.12.08 Str ct re Debt Structure Debt Portfolio Currency Split (31 Dec 2008) (31 Dec 2008) Finance lease liability 5% US$ 17% RUR 65% Bond issues 24% B k and
Slide 17: Debt Maturity Profile at 31 March 2009
Debt Maturity Profile at 31 March 2009 Total Breakdown by currency Period in RUR m RUR m USD m EUR m 2Q 2009 1,323 1,113 3 2 3Q 2009 2,687 535 58 4 4Q 2009 8,532 7,158 27 10 1H 2010 7,096 4,996 60 1 2H 2010 3,833 2,643 33 1 2011 4,503 3,542 14 11 2012 897 57 0 19 2013 and after 8,125 3,684 0 99 Tota
Slide 18: Strategy 2009: Shift from Growth to Liquidity
Strategy 2009: Shift from Growth to Liquidity • Maximisation of free cash flow is top priority • Cost C t cutting tti programme launched l h d iin O October t b 2008 • Stricter working capital policy in place Building Materials • Ready R d ffor price i competition titi • Reduce prices but try to kee
Slide 19: Income Statement
Income Statement RUR m 2006 2007 2008 S l revenue Sales 21,111 35,838 49,813 Cost of sales (13,796) (23,861) (31,807) Gross profit 7,314 11,976 18,006 Distribution, st but o , G&A G& a and d ot other e eexpenses pe ses (4,810) (5,633) (7,267) Changes in fair value of investment property 130 8,037 (1
Slide 20: Balance Sheet
Balance Sheet RUR m 31.12.07 31.12.08 ASSETS Non-current assets Property, plant and equipment 17,821 28,314 Investment property under development 20,738 5,488 Investment property 2,040 1,925 Intangible assets 1,230 4,615 Other investments 46 125 Deferred tax assets 419 877 Trade and other receivable
Slide 21: Cash Flow
Cash Flow RUR m 2007 2008 Net Income 9,180 ( (8,007) ) Depreciation & amortization 1,560 2,049 Other, net (2,797) 19,293 Operating profit before changes in working capital and provisions 7,942 13,335 Change in Inventories (12,269) (12,166) Change in Trade and Other Receivables (3 938) (3,938) (1 810
Slide 22: Significant Accounting Policies
Significant Accounting Policies Preparation of IFRS accounts from 01 January 2005 onwards Revenue and cost recognition in Development: – Revenue and costs only recognised after the transfer of property to consumer upon completion of the project; – Prior to project completion development and cons
Slide 23: New Residential Real Estate Price Development in St Petersburg
New Residential Real Estate Price Development in St Petersburg Mass market Elite 350 216 213 212 213 300 198 250 145 000’RUR 200 150 68 74 100 57 80 79 78 77 56 63 39 50 25 16 16 17 20 26 28 15 0 13 8 8 9 Dec'98 Dec'99 Dec'00 Dec'01 Dec'02 Dec'03 Dec'04 Dec'05 Dec'06 Dec'07 Dec'08 Jan'09 Feb'09 Mar'
Slide 24: Agenda
Agenda Review of 2008 Results 5 Company Overview 25 24
Slide 25: LSR Group
LSR Group Strong Combination: Two Complementary Market-Leading Businesses Real Estate Development and Building Materials, Aggregates Construction and Construction Services Leading residential real estate developer in Leading supplier of basic building materials in North West Russia and Yekaterin
Slide 26: Dynamic Development Since 1993
Dynamic Development Since 1993 History of organic development of core competencies and discovery of new market opportunities Completion of first Entry to Completion of Entry to Acquisitions in evelopmentt and elite residential real prefabricated first business Yekaterinburg Yekaterinburg: a estate p
Slide 27: Geography of operations: Focus on Key Markets
Geography of operations: Focus on Key Markets Our operations focused on 4 strategic markets: St Petersburg&Leningrad Region, •Moscow & Moscow Region •Yekaterinburg & Urals Region and Ukraine Region, 27
Slide 28: Business Structure
Business Structure LSR Group Real Estate Development, Construction and Commercial Real Estate Building Materials, Aggregates and Construction Services =a a Real Estate Development ee Commercial Real Estate Aggregates Construction Services Building Materials Elite Real Estate in St. Petersburg Prefab
Slide 29: Real Estate Development
Real Estate Development 2008 Sales, 2008 EBITDA, 2008 EBITDA NSA, Segment Brand RUR m RUR m margin th sq m Elite residential and 3,985 1,819 46% 828 commercial Mass market and business class 5,180 1,588 31% 4,032 residential Real estate Urals 2,012 333 17% 1,008 Real estate 504 245 49% 89 Moscow Gat
Slide 30: Strong Track Record in Residential Real Estate in St Petersburg
Strong Track Record in Residential Real Estate in St Petersburg… Petersburg 30
Slide 31: ...and in Yekaterinburg
...and in Yekaterinburg > 2004 > 2004 > 2004 > 2005 > 2005 > 2005 > 2006 > 2006 4 | Ai \ a7 ie i (_ Sirenevy bulvar,8 ] { Bisertskaya, 16-5 ) [ Vosmogomarta, 194 } ( Bebelya, 130 ') ( Furmanova, 123] { Opalihinskaya, 18] (__ Opal lihinskaya, 40) (Bakinskih komissarov, 10 > 2006 6 > 2007 > 2008 > 200
Slide 32: Panel construction is quick and cost-efficient method of construction
Panel construction is quick and cost-efficient method of construction of mass mass-market market housing Key Financials Customer Mix (St Petersburg) RUR m 2008 2008 Sales volume (th sq m) 464 LSR Group 27% Sales 13 119 13,119 Government 36% EBITDA 3,121 3rd Party developers 37% EBITDA margin 24% Mod
Slide 33: Building Materials: Key Characteristics
Building Materials: Key Characteristics 2008 2008 Sales, RUR m EBITDA Margin Aggregattes Crushed granite Extensive 4,001 , 28% reserves and infrastructu Sand re 4,553 44% Reinforced concrete 6,332 23% aterials Economies Ready-mix concrete of scale 5,732 11% Building ma based on mass Bricks productio
Slide 34: New Cement Plant
New Cement Plant Project Progress February 2008 March 2009 A il 2008 April April 2009 July 2008 April 2009 October 2008 April 2009 In 2008 LSR Group consumed more than 1 million tonnes of cement 34
Slide 35: Strategic Acquisitions in Yekaterinburg
Strategic Acquisitions in Yekaterinburg April 2008 August 2008 OJSC Betfor OOO PKU NOVA- Panel and building materials StroyProekt producer Design of buildings Annual production capacity: Panel production 200 th sq m Reinforced concrete 130 th cub. m R d Ready-mixi concrete t 100 th cub. b m August 2
Slide 36: Analyst Coverage
Analyst Coverage Institution Analyst Telephone Email Credit Suisse Andrei Nikitin +7 495 967 8109 andrei.nikitin@credit-suisse.com Goldman Sachs Artyom Golodnov +7 495 645 4264 artyom.golodnov@gs.com artyom golodnov@gs com Anton Farlenkov +7 495 645 4019 anton. farlenkov@gs.com JP Morgan Elena Jouro
Slide 37: Contacts
Contacts LSR Group Investor Relations Kliment Falaleev 36 Kazanskaya Street, St Petersburg 190031 Russia 190031, R i Phone: +7 812 571 7850 Fax: +7 812 312 8565 Mob: +7 921 953 1641 Email: falaleev@lsrgroup falaleev@lsrgroup.ru ru 37