Transcript Document

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
ATTRACTIVE REGION
Central District: 17 Subjects of the
Federation of the Central part of Russia
Yaroslavl
Ivanovo
Tver
Kaluga
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
Vladimir
Moscow
Smolensk
Kostroma
Ryazan
One of the highest monthly income per
capita in Russia - RUR 6450
Tula
Bryansk
Fixed-line penetration level is 23.7%
Orel
Lipetsk
Kursk
Belgorod
Tambov
Digitalization level is 48%
Voronezh
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%
Svyazinvest
9,71
7,19
4,36
Other nominal
shareholders
Brunswick UBS
(nominal)
0,88
8,83
ABN AMRO
(nominal)
Individuals
38,02
10,11
20,91
Federal Property
Fund
Foreign legal
entities
Russian legal
entities
Free float shares – 55%
April, 2005
WWW.CENTERTELECOM.RU
ORGANIZATIONAL STRUCTURE
PRESIDENT
Shareholders
meeting
Carla Cico
PRESIDENT
Board
of Directors
PRESIDENT
Auditing
Commission
Carla Cico
PRESIDENT
Compensation
& Benefits
Committee
Carla Cico
PRESIDENT
Corporate
Governance
Committee
Carla Cico
PRESIDENT planning
Budget & Investment
Committee
Carla Cico
Carla Cico
PRESIDENT
Management
Board
of Directors
Board
PRESIDENT
Audit
Committee
Carla
Carla Cico
Cico
PRESIDENT
General
Director
Carla Cico
PRESIDENT
Corporate
Secretary
Carla Cico
PRESIDENT
Financial
Director
CarlaCico
April, 2005
PRESIDENT
Commercial
Director
Carla
Cico
PRESIDENT
Technical
Director
CarlaCico
PRESIDENT
IT
Director
CarlaCico
PRESIDENT
Security
PRESIDENT
HR
Director
CarlaCico
Director
CarlaCico
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 50 thousand cable television subscribers
•
April, 2005
WWW.CENTERTELECOM.RU
MARKET SHARE IN MAJOR SEGMENTS
New services (based on IP,
VPN, INS, ISDN)
64%
Mobile
2,90%
Documentary
57%
91%
Local
85%
Long-distance
0%
April, 2005
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
WWW.CENTERTELECOM.RU
KEY FINANCIALS (RAS) (RUR, mln)
RUR Mln
2002
2003
2004
16,4
20,89
24,963
12,132
15,649
19,702
EBIT DA
3,337
4,853
5,377
Net profit
1,084
1,503
0,398
CAPEX
4,701
7,563
9,409
Revenues
Operating expenses
April, 2005
WWW.CENTERTELECOM.RU
KEY FINANCIALS
Major income components (RUR, bn)
Income generated by service providers
Other
Long-distance and international
communication services
Local
April, 2005
2,2
2,56
9,6
10,6
WWW.CENTERTELECOM.RU
REVENUE
In 2004 gross revenue reached RUR 24,963 mln, 19.5% growth to 2003
Broadcasting, television
0,2%
Wireless communication
1,3%
Traffic transition
9%
New services (Internet,
ISDN, IP-telephony,
Intelligent networks, other )
3,0%
Wire broadcast
2,6%
Pay phone
1,1%
Country telephone
communication
5,4%
City telephone
communicatiom
37,6%
April, 2005
Long-distance telephone
communication
38,3%
Documentary
telecommunication
1,7%
WWW.CENTERTELECOM.RU
OPERATING COSTS AND EXPENSES
In 2004 operating costs and expenses totaled RUR 19,702 mln, 25.9% increase 2003
Other costs
9%
Leasing
2%
Property insurance payments
1%
Wages
32%
Rostelecom service payment
16%
Repair work
4%
Energy
3%
Materials & spare parts
7%
April, 2005
Amortisation
13%
Social tax
10%
Other telecommunication
service payment
3%
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 compared to the last year
Long-distance (international) traffic increased
106.7% to 197.8 m minutes compared to 2003
April, 2005
WWW.CENTERTELECOM.RU
CAPEX DYNAMICS
9.4
10
9
RUR Bln
forecast
7.6
8
7
6
5
4
3
4.8
71%
3.8
64%
2
1
73%
36%
32%
29%
27%
68%
0
2002
2003
2004
Bonded loans
Equity capital
Debt capital
April, 2005
2005E
Vo lume Pla c e d , R U R
mln
Pla c e me nt
D a te
YT M
Pe rio d
600
2000
5 623
23.11.2001
17.09.2003
31.08.2004
18,89
12,73
14,27
2 3/4 years
3 years
5 years
Co up o ns
N imb e r
WWW.CENTERTELECOM.RU
6
6
10
CAPITAL INVESTMENTS
In 2004 RUR 9.4 bln were invested (23% growth to 2003)
Traditional telephony
New services
5,35% 0,46%
22,37%
Infrastructure units
Purchase, construction and
reconstruction
1,77%
61,80%
IT Investments
4,12%
0,55%
3,59%
Transmission lines
Other infrastructure
Special investments
April, 2005
WWW.CENTERTELECOM.RU
STRATEGY. Main directions
Increase of overall
performance in highly
remunerative segments of the
market
Operational expenses
reduction
April, 2005
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
WWW.CENTERTELECOM.RU
STRATEGY
Increase share of value-added services in profit structure
Achieve revenue market share in telecommunication 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
2005
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
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: [email protected]
Andrey Kalinchenko
Investor relations manager
Tel: +7 095 793 23 40
Fax: +7 095 209 58 15
E-mail: [email protected]
April, 2005
WWW.CENTERTELECOM.RU