Lsr · RUS:LSRG
Lsr — FY2009 Earnings Presentation
44 slides from Lsr's earnings presentation, April 2010
Slide 1: 2009 Results
2009 Results April 2010
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, as an offer to sell or issue or the solicitation of a
Slide 3: Agenda
Agenda 1 1. R i off 2009 results Review lt 2. Market overview Appendix: LSR Group today Appendix: Financial statements 3
Slide 4: Key Financials
Key Financials RUB m 2007 2008 2009 Revenues 35,838 , 49,813 , 51,024 , EBITDA1 7,897 13,178 14,732 EBITDA margin2 22% 26% 29% Normalised operating profit3 6,343 11,130 12,327 Normalised operating profit % 18% 22% 24% Normalised net profit4 3,072 5,298 6,071 Changes in fair value of investment prope
Slide 5: Key Financials
Key Financials Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 49,813 51,024 14,732 13,178 35,838 +2% +12% 7 897 7,897 29% 26% 22% 2007 2008 2009 2007 2008 2009 Sales revenue and EBITDA breakdown1 2009 Sales revenue breakdown 70% 30% B ildi Materials, Building M t i l Aggregates A t Real Estate D
Slide 6: Real Estate Development
Real Estate Development p Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 23,417 9,201 12,154 +93% 4,002 +130% 39% 33% 2008 2009 2008 2009 Key financials Business Class & Mass‐Market Business Class & Mass‐Market Total1 Elite Real Estate Real Estate in St St. Petersburg Real Estate in Urals 2008 2
Slide 7: Construction
Construction Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 13,064 3,121 3,213 12,756 ‐2% +3% 24% 25% 2008 2009 2008 2009 Key financials Total 2008 2009 Change Sales volume (th. sqm) 464 499 7% Sales revenue (RUB m) 13,064 12,756 ‐2% EBITDA (RUB m) 3 121 3,121 3 213 3,213 3% EBITDA margin (%) 24
Slide 8: Building Materials
Building Materials Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 19,209 3,609 ‐87% 10,273 , ‐47% 19% 462 5% 2008 2009 2008 2009 Key financials Total1 Reinforced Concrete Ready‐Mix Concrete Bricks Aerated Concrete 2008 2009 Change 2008 2009 Change 2008 2009 Change 2008 2009 Change 2008 2009 Chan
Slide 9: Aggregates
Aggregates Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 6,954 3,147 3 603 3,603 ‐48% ‐56% 1,369 45% 38% 2008 2009 2008 2009 Key financials Total Sand Crushed Granite 2008 2009 Change 2008 2009 Change 2008 2009 Change Sales volume (th. cub. m) ‐ ‐ ‐ 17,957 10,207 ‐43% 5,407 3,593 ‐34% Sales rev
Slide 10: Construction Services
Construction Services Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) 2,752 852 587 1,764 ‐31% ‐36% 36% 31% 33% 2008 2009 2008 2009 Key financials Total 2008 2009 Change Sales revenue (RUB m) 2,752 1,764 ‐36% EBITDA (RUB m) 852 587 ‐31% EBITDA margin (%) 31% 33% ‐ Resilient margin in Tower Cran
Slide 11: Debt Composition As Of 31 March 2010
Debt Composition As Of 31 March 2010 Gross debt by currency1 Gross debt composition Finance lease Rouble bonds liability 8% USD 2% 3% 35% RUB 50% Bank and other loans 90% 89% EUR 15% Source: Company Note: 1) excluding finance lease liability and other loans 11
Slide 12: Debt Maturity Profile As Of 31 March 2010
Debt Maturity Profile As Of 31 March 2010 12,710 39,163 Total 2011 2011: RUB 14.8 14 8 bn Total 2010: RUB 6.5 bn 5,088 RUB m 3,709 4,386 4,977 1,746 1,432 4,166 951 Period 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 2012 >2013 Total RUB m 802 3,389 1,279 677 4,732 2,996 1,652 422 3,486 1
Slide 13: Gross Debt By Source
Gross Debt By Source 36,874 RUB m 39,541 RUB m 40,167 RUB m R bl bonds Rouble b d 8 579 8,579 23% 10% 4 073 4,073 13% 5 152 5,152 VEB 19% 7,561 18% 7,341 Rosselkhozbank Finance lease liability 2,011 5% 7% 2,670 8% 3,201 Rouble bonds Other banks/loans 4,144 11% 3% 1,217 2% 1,003 , Finance lease liabi
Slide 14: Real Estate Portfolio By Region
Real Estate Portfolio By Region Breakdown of portfolio by region Breakdown of portfolio by region (Net Sellable Area) (Market Value) Yekaterinburg Yekaterinburg 6% 11% Moscow Moscow 6% 1% Leningrad Region Leningrad Region 2% 0.2% St. Petersburg St. Petersburg 88% 87% Region NSA (th. sqm) % of total
Slide 15: Real Estate Portfolio By Segment
Real Estate Portfolio By Segment Breakdown of portfolio by segment Breakdown of portfolio by segment (Net Sellable Area) (Market Value) Mass‐market 53% Elite Offices 27% Mass‐market 0 6% 0.6% 35% Elite Operating Business class 6% offices 9% Business class 0.3% Gated 6% Offices Held for future Gated
Slide 16: Real Estate Portfolio By Stage Of Development
Real Estate Portfolio By Stage Of Development Breakdown of portfolio by stage of development Breakdown of portfolio by stage of development (Net Sellable Area) (Market Value) Under construction 9% Initial concept Under construction Initial concept design Operating offices 15% design 42% 0.3% 66% Com
Slide 17: New Cement Plant
New Cement Plant Key technical data Plant diagram P d i capacity Production i 1.86m 1 86 tons p.a. Bottom right corner: Kiln, 95m tons of limestone, pre‐heater and cooler Confirmed reserves 17m tons of cement clay Technology Dry Bottom centre: Clinker storage silo Construction period 2007 – 2010
Slide 18: New Cement Plant: Construction Site
New Cement Plant: Construction Site April 2010 April 2009 April 2008 18
Slide 19: Real Estate Division Market Positions In St. Petersburg In 2009
Real Estate Division Market Positions In St. St Petersburg In 2009 Housing Completions Housing Under Construction #1 #1 28% 40% Elite Real Estate 6% 8% #5 #1 Mass‐Market Real Estate1 #1 19% Total housing t ti 2 construction Source: SPb Realty Note: 1) Excluding state‐financed completions 2) Share of
Slide 20: Building Materials Market Positions In St. Petersburg And Leningrad Region In 2009
Building Materials Market Positions In St. St Petersburg And The Leningrad Region In 2009 Building Materials Reinforced Concrete Ready‐Mix Concrete Bricks Aerated Concrete Cement #1 #1 #1 #1 17% 56% 61% 78% Aggregates Sand Crushed Granite #1 #1 32% 68% Source: Reshenie Note: Volume terms 20
Slide 21: New Residential Real Estate Price Development In St. Petersburg And Moscow
New Residential Real Estate Price Development In St. St Petersburg And Moscow St. Petersburg Moscow 250 216 250 198 186 189 200 200 RUB th. per sqm RUB th. per sqm 160 145 150 150 117 123 110 107 100 68 74 80 70 100 57 63 70 64 56 43 50 50 39 50 34 26 28 15 20 0 0 2002 2003 2004 2005 2006 2007 2008
Slide 22: Signs Of Market Recovery
Signs Of Market Recovery Housing sales gradually increasing, 30% up in 2H 2009 Sales of new apartments in St. Petersburg Mortgage lending grew in St St. Petersburg by 63% in 4Q 2009 1,029 In 1Q 2010 new apartment prices in St. Petersburg stabilized: 672 – Elite segment +1.6% end of 1Q 2010 to
Slide 23: "Lead The Growth" Program
“Lead The Growth” Program Real Estate Development Launch construction and start sales in five development projects in St Petersburg Search for land plots in Moscow and Yekaterinburg for strategic land bank expansion; purchase selected land plots in St Petersburg subject to unique location and at
Slide 24: We Plan To Significantly Increase Volumes Of Our Own Mass-Market Development
We Plan To Significantly Increase Volumes Of Our Own Mass Mass‐Market Market Development In‐house Mass‐Market Primary housing development BU market Finished apartments Substantial Mass‐Market Panel Factories land bank of 6,834 th. sqm Construction Government Government services In 2009 LSR compe
Slide 25: Growing Moscow And Urals Business
Growing Moscow And Urals Business Moscow and the Moscow region Urals region Moscow and the Moscow region are number ‘1’ in Yekaterinburg city is number ‘4’ in Russia by Russia by population population Largest real estate market in Russia Higher than average prices for real estate Market Desc
Slide 26: Agenda
Agenda 1 1. R i off 2009 results Review lt 2. Market overview Appendix: LSR Group today Appendix: Financial statements 26
Slide 27: Supply Of New Apartments
Supply Of New Apartments Supply of new apartments in St. Petersburg decreased in 2009 776 747 584 473 ‐68% th. sqm m 276 200 219 139 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 Source: SPb Realty Note: Supply of new housing (apartments) represents residential projects at differen
Slide 28: Mortgage Development Is Expected To Be One Of The Key Drivers Of Real Estate Market Recovery
Mortgage Development Is Expected To Be One Of The Key Drivers Of Real Estate Market Recovery Russian mortgage lending expanded significantly before the Mortgage lending as share of GDP (31.12.2008) financial and economic crisis 84% 81% – Housing lending CAGR of 90% from 2006-2008 50% 46% 36% – How
Slide 29: Need For Housing In The Long-Term
Need For Housing In The Long‐Term Housing stock in sqm per capita Russia 22 g St. Petersburg 24 Latvia 25 China 31 Hungary 32 Czech 36 per capita UK 37 Finland 38 sqm p Austria 39 Germany 43 France 44 Denmark 52 US 66 Source: Rosstat, UNECE 29
Slide 30: Production Of Basic Building Materials In Russia
Production Of Basic Building Materials In Russia Residential construction activity in Russia Cement 150 76 83 140 140 60 54 mn tons 44 130 120 110 1980 1990 2007 2008 2009 ompletions p.a.,, mn sqm 100 Reinforced concrete items 90 79 80 65 70 mn m3 70 64 29 29 62 61 60 18 60 53 49 50 50 Co 42 42 39 4
Slide 31: Long-Term Outlook For Building Materials Is Very Attractive
Long‐Term Outlook For Building Materials Is Very Attractive Substantial undersupply of real estate assets Supply‐side of building materials industry is constrained − Significant g p part of the p production capacity p y is obsolete − Large part of the existing equipment park dominated by non‐eff
Slide 32: Key Infrastructure Projects Announced In St. Petersburg
Key Infrastructure Projects Announced In St Petersburg St. Transportation Expansion of St. Petersburg underground system. 20 new stations and 40km of lines planned by 2020 Orlovsky tunnel to link northern and central parts of St. Petersburg Ground Express to link city centre and suburbs High
Slide 33: Agenda
Agenda 1 1. R i off 2009 results Review lt 2. Market overview Appendix: LSR Group today Appendix: Financial statements 33
Slide 34: LSR Group: Business With Strong Growth History
LSR Group: Business With Strong Growth History Sales and EBITDA1 dynamics (RUB bn) Real Estate Division Residential Real Estate Development market leader in St St. 29% Petersburg with a growing presence in Moscow/the Moscow 26% region and Urals 22% Focus on Mass‐Market and Elite segments of resi
Slide 35: Experienced And Committed Management At All Levels Of Organisation
Experienced And Committed Management At All Levels Of Organisation Senior Managers: 17 years with LSR Division CEO Real Estate Building Materials CFO Name Igor Levit Evgeny Yatsyshin Georgy Vedernikov Elena Tumanova Business Units Managers: Strong business force at field level Ready-Mix Business Uni
Slide 36: Group Structure
Group Structure LSR Group Real Estate Development, Construction and Building Materials, Aggregates and Commercial Real Estate Construction Services Real Estate Commercial Construction Building Construction Aggregates Development Real Estate Services Materials Prefabricated Panel Elite Real Estate Ma
Slide 37: Real Estate Development Overview
Real Estate Development Overview Key Brands Real Estate Portfolio Key Financials Business Units 31.12.2009 2008 (RUB m) 2009 (RUB m) NSA (th. sqm) MV (RUB m) Sales EBITDA Sales EBITDA Elite 535 29 920 29,920 3 930 3,930 1 819 1,819 12 951 12,951 6 493 6,493 (St. Petersburg) Mass‐Market and Business
Slide 38: Panel Construction: Quick and Cost-Efficient Method of Construction of Mass Market Housing
Panel Construction: Quick and Cost‐Efficient Method of Construction of Mass Market Housing Key financials Customer Mix (St. Petersburg) RUB m 2008 2009 RUB m 2008 2009 Sales volume (th. sqm) 464 499 LSR Group 27% 36% Sales 13,064 12,756 Government 36% 58% EBITDA 3,121 3,213 3rd Party developers 37%
Slide 39: Building Materials
Building Materials Key Financials Key Business Brands a ds U i Units 2008 (RUB m) 2009 (RUB m) Sales EBITDA Sales EBITDA Reinforced 6,001 1,484 3,792 117 Concrete Buildingg Materials Ready‐Mix Concrete 5,732 612 2,249 76 Economies of scale based on mass Bricks 2,709 1,038 1,331 176 production Aerate
Slide 40: Agenda
Agenda 1 1. R i off 2009 results Review lt 2. Market overview Appendix: LSR Group today Appendix: Financial statements 40
Slide 41: Income Statement
Income Statement RUB m FY 2008 FY 2009 Sales revenue 49,813 51,024 Cost of sales (31,807) (32,279) Gross profit 18,006 18,744 Distribution, G&A and other expenses (7,266) (5,968) Changes in fair value of investment property (non‐cash) (16,143) (1,752) Write‐down of inventory ‐ (529) Operating profit
Slide 42: Balance Sheet
Balance Sheet RUB m 31.12.08 31.12.09 ASSETS Non‐current assets P Property, t plant l t andd equipment i t 28,314 28 314 31,843 31 843 Investment property under development 5,488 391 Investment property 1,925 2,305 Intangible assets 4,615 4,472 Other investments 125 49 Deferred tax assets 877 1,166
Slide 43: Cash Flow
Cash Flow RUB m 2008 2009 Net Income (8,007) 4,590 Depreciation & amortization 2,049 2,406 Other, net 19,293 8,240 Operating profit before changes in working capital and provisions 13,335 15,235 Change in Inventories (12,166) (1,671) Change in Trade and Other Receivables (1,810) 4,147 Change in Trad
Slide 44: Contacts
Contacts LSR Group G I Investor t Relations R l ti Kliment Falaleev 36 Kazanskaya Street, St Petersburg 190031, Russia Phone: +7 812 571 7850 Fax: +7 812 312 8565 Mob: +7 921 953 1641 Email: falaleev@lsrgroup.ru 44