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Investor presentation. April, 2005. WWW.CENTERTELECOM.RU. This presentation contains forward-looking statements.
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Investor presentation April, 2005 WWW.CENTERTELECOM.RU
This presentation contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Accordingly, the actual results of operations of the Company may be different from the Company's current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments. April, 2005 WWW.CENTERTELECOM.RU
Kostroma Yaroslavl Ivanovo Tver Vladimir Moscow Smolensk Kaluga Ryazan Tula Bryansk Orel Tambov Lipetsk Kursk Voronezh Belgorod ATTRACTIVE REGION • Central District: 17 Subjects of the Federation of the Central part of Russia • covers 3.8% of Russia’s territory • 26.2% of total population of 38 mln people (most densely populated) • 12.8% of GDP of RUR 1,703 bln • One of the highest monthly income per capita in Russia - RUR6450 • Fixed-line penetration level is 23.7% • Digitalization levelis48% • 6.8 mln lines installed by end of 2004 • Borders with Ukraine and Byelorussia April, 2005 WWW.CENTERTELECOM.RU
SHAREHOLDER STRUCTURE Share capital – USD 225 mn Number of shares – 2.103.999.655 of which: ordinary – 75%, preferred – 25% Free float shares – 55% April, 2005 WWW.CENTERTELECOM.RU
PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT PRESIDENT Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Carla Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Cico Carla Cico ORGANIZATIONAL STRUCTURE Compensation & Benefits Committee Shareholders meeting Corporate Governance Committee Board of Directors Budget & Investment planning Committee Auditing Commission Management Board Board of Directors Audit Committee General Director Corporate Secretary Financial Director Commercial Director Technical Director IT Director Security Director HR Director April, 2005 WWW.CENTERTELECOM.RU
KEY PRODUCTION INDICATORS • 6,8 mln access lines installed • 26 long distance connection stations • 3,0 mln wire broadcasting points • 15 cable television networks in big cities • 112 thousand mobile subscribers • more than 50thousand cable television subscribers April, 2005 WWW.CENTERTELECOM.RU
MARKET SHARE IN MAJOR SEGMENTS April, 2005 WWW.CENTERTELECOM.RU
KEY FINANCIALS (RAS) (RUR, mln) RUR Mln April, 2005 WWW.CENTERTELECOM.RU
KEY FINANCIALS Major income components (RUR, bn) April, 2005 WWW.CENTERTELECOM.RU
REVENUE In 2004 gross revenue reached RUR 24,963mln, 19.5% growth to 2003 April, 2005 WWW.CENTERTELECOM.RU
OPERATING COSTS ANDEXPENSES In 2004 operating costs and expenses totaled RUR 19,702 mln, 25.9% increase 2003 April, 2005 WWW.CENTERTELECOM.RU
KEY OPERATING HIGHLIGHTS Total number of lines installed for the 2004 grew to 6 798 128, including 619 291 lines commissioned in 2003 Long-distance traffic increased 104.2% to 2.8 bn minutes comparedto the last year Long-distance (international) traffic increased 106.7% to 197.8 m minutes comparedto 2003 April, 2005 WWW.CENTERTELECOM.RU
CAPEX DYNAMICS 9.4 RUR Bln 7.6 forecast 73% 4.8 71% 3.8 64% 32% 29% 27% 36% 68% Bonded loans Equitycapital Debt capital April, 2005 WWW.CENTERTELECOM.RU
CAPITAL INVESTMENTS In 2004 RUR 9.4bln were invested (23%growth to 2003) April, 2005 WWW.CENTERTELECOM.RU
Orientation to highly remunerative client segments • Development of services with the high added value • Expansion of services spectrum • Investments in new technologies • Affiliated business restructuring • Management structure optimization (association of branches - reduction of its quantity from 17 to to 6-8) • Personnel number optimization (5% annual reduction) • Outsourcing of auxiliary and not profile business-functions STRATEGY. Main directions Increase of overall performance in highly remunerative segments of the market Operational expenses reduction April, 2005 WWW.CENTERTELECOM.RU
STRATEGY • Increase share of value-added services in profit structure • Achieve revenue market share intelecommunication services in Central region of 62% by 2006 • Average annual income growth of 25% • Increase non-regulated services market share to 75% • Achieve share of non-regulated services in profits of at least 30% • Increase profit share from corporate sector to 52% April, 2005 WWW.CENTERTELECOM.RU
STRATEGY. Affiliated business restructuring 2004 Acquisition of ROSNET Large corporate client base, including Central Bank of Russia 2004 Revenue - $30 mn Licenses for data services in 51 region Liquidation of non profile and non efficient businesses 2005 Merging to ROSNET 5 companies – leaders in non regulated services in its regions AS A RESULT Effective investment structure Management structure optimization Growth of competitiveness Cutting down operational costs Optimization of cash flow structure April, 2005 WWW.CENTERTELECOM.RU
CenterTelecom – Potential of growth Prospects of telecommunication sector growth as a whole Regions of Company’s operation – the most attractive in Russia Advanced Company’s infrastructure network High potential of growth in highly remunerative telecommunication services Experienced management team High corporate governance level April, 2005 WWW.CENTERTELECOM.RU
CONTACTS Elena Romskaya Director, Securities and Corporate Governance Department Tel: +7 095 793 23 19 Fax: +7 095 209 28 29 E-mail: esidorovich@centertelecom.ru Andrey Kalinchenko Investor relations manager Tel: +7 095 793 23 40 Fax: +7 095 209 58 15 E-mail: kalin@centertelecom.ru April, 2005 WWW.CENTERTELECOM.RU