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Non deal Road Show (London) (ATON, VTB)

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  • 1. OAO QUADRAMoscowSeptember 2011
  • 2. DisclaimerThe information contained herein has been prepared by the Company. The opinions presented herein are based on general information gathered at the time ofwriting and are subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not guarantee itsaccuracy or completeness.These materials contain statements about future events and expectations that are forward‐looking statements. Any statement in these materials that is not astatement of historical fact is a forward‐looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actualresults, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by suchforward‐looking statements. We assume no obligations to update the forward‐looking statements contained herein to reflect actual results, changes in assumptionsor changes in factors affecting these statements.This presentation does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities and nothing containedherein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained inthis presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. The contentsof this presentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf ofthe Company or any of its shareholders, directors, officers or employees or any other persons to the accuracy, completeness or fairness of the information oropinions contained in this presentation. None of the Company nor any of its shareholders, directors, officers or employees nor any other person accepts anyliability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection there with. 1
  • 3. Quadra at a Glance ■ Generation of electricity and heat 1. Smolensk region 7. Ryazan region ■ Operations on wholesale market of electricity 2. Briansk region Activities 3. Kaluga region 8. Lipetsk region 9. Belgorod region ■ Transmission and sale of heat to retail market 4. Orel region 10. Voronezh region 5. Kursk region 11. Tambov region 6. Tula region ■ 25 power plants ■ Installed electric capacity, 3 547,8 MW 1 Moscow ■ In close proximity to Moscow region 2 3 ■ Installed heat capacity, 11 626,3 Gcal/h 56 9 4 8 ■ Industrially developed regions 7 10 11 Technical ■ 370 heating plants, including 203 leased plants ■ Regions of potential energy deficit Characteristics ■ Installed heat capacity, 3 419,7 Gcal/h ■ 4646,2 km heat networks, including 1007,1 km leased ■ Fuel - 97% is gas, 3% is fuel oil and coal Installed electricity capacity, GW(3) Installed heat capacity, ths. Gcal/h(3) ■ Onexim Group - 49.99% TGK-7 6.9 TGK-7 31.3 ■ Ordinary shares – 1 912 505 577 759. Ticker on TGK-1 6.3 TGK-9 16.4 MICEX-TGKD Capital Kuzbassenergo 4.5 Quadra (TGK-4) 15.9 Structure ■ Privilege shares – 75 272 938 838. Ticker on MICEX- TGK-8 3.4 TGK-1 14.6 TGKDP Quadra (TGK-4) 3.4 TGK-8 13.3 ■ Market capitalization [ ] as of 9 September 2011(2) TGK-9 3.3 Fortum (TGK-10) 12.8 TGK-6 3.1 TGK-2 12.5 Fortum (TGK-10) 2.8 TGK-6 10.6 2009 2010 1H 2011(1) TGK-2 2.6 TGK-5 9.0 Revenue 29,680 33,988 21,413 TGK-5 2.5 Financials Kuzbassenergo 8.9 EBITDA 4,539 3,663 1,944 Novosibirskenergo 2.5 TGK-11 8.2 TGK-13 2.5 Debt / EBITDA 0.4x 0.7x 1.3x TGK-13 7.1 TGK-11 2.1 Novosibirskenergo 6.9 TGK-14 0.6 2 TGK-14 2.7Notes: (1) RAS accounts; (2) Source: Bloomberg; (3) Excluding Mosenergo
  • 4. Corporate Governance and Management SHAREHOLDERS MEETING BOARD OF DIRECTORS, 11 members Board of directors includes: ■ System Operator, 1 member ■ Minority Shareholders, 2 members ■ JSC “QUADRA”, 2 members AUDIT COMMITTEE COMPENSATION COMMITTEE ■ Onexim Group, 6 members Yulia Basova Grigoriy Bakaev Chairman of the Board of Chairman of the Executive Directors Board, CEO From 2008 Yulia has been Chief Prior to joining JSC “Quadra” Mr. Operating Officer of Onexim Group. Bakaev served as a senior manager of She was the Deputy of the CEO of the JSC “Taimirgas” and JSC Norilsk Nickel Group. “Irkutskenergo”. In 2006 he was named one of the Top Ten Financial Directors of Russia. He graduated from Finance Academy under Russian Government, at the Krasnoyrask Institute of Commerce. 3
  • 5. Quadra’s Strategic Focus in 2011 ■ Launch of operations at new power plants in Kaluga (30 MW) and in Kursk (115New capacity MW/80 Gcal) ■ Ongoing work on new capacity to be launched in 2012 – 2015 (780 MW) ■ Proceeding with Quadra’s heat distribution business spin-off ■ Pilot project of RAB regulation in Orel regionHeat business ■ Organization of joint venture with Dalkia, which will be in charge of heat distribution business management in Kursk ■ Implementation of a medium-term investment program ■ Actively working with the analyst and investment community Market ■ Increasing the company’s transparencycapitalization ■ Working on credit rating (scheduled end of 2011) 4
  • 6. 27,610 27,086 26,749Key operational results Production Capacity Electricity Production Dynamics 2008 2009 2010 1H 2011 44% 36% 37% 40% 14,614Power plants 25 25 25 25 12,87812,878 Installed electric capacity, MW 3,347 3 ,419 3,522 3,547 10,67410,674 11,14611,146 Installed heat capacity, Gkal/h 12,472 12,556 12,653 11,563 6,0746,074Heating plants 666 416 371 361 Including leased heating plants 517 268 211 201 Installed heat capacity, Gkal/h 5,123 4,465 4,224 4,173 Heat networks, km 5,655 4,935 4,651 4,641 2008 2008 2009 2009 2010 2010 1H2011 1H2011 Including leased heat networks 2,016 1,293 1,017 1,013 Electricity production, mn kWh ICUF, electricity Heat output from power stations # and heating plants, ths. Gcal Operational Results Heat Production Dynamics 2008 2009 2010 1H 2011 27,610 26,749 27,086Electricity production, mnkWh 12,878 10,673 11,146 6,074ICUF, electricity, % 44 36 37 40 14,614Fuel use for elecricity, g/kWh 344 337 346 364Heat output from power stations and 27,610 26,749 27,086 14,614heating plants, ths. GcalICUF, heat % 17.8 17.9 18.3 20.9Fuel use for heat, kg/Gcal 151 152 152 169 2008 2009 2010 1H2011 ■ Heat output from power stations and heating plants, ths. Gcal 5
  • 7. Key Financial Results Financial Highlights (US$m)(1) EBITDA and EBITDA margin (US$m)(1) 12% 15% 9% 2009 2010 1H 2011 1,170 Revenue 997 1,170 748 997 748 Operating expenses, incl. 1,100 1,062 642 Fuel costs 493 638 121 171 68 Staff 145 144 2009 2010 1H2011 Appreciation & depreciation 53 108 Revenue EBITDA # EBITDA margin Purchase of electricity 286 100 Leverage capacity (US$m)(1) EBITDA 121 171 68 0.6x 0.5x 1.4x 171 Net Profit/(Loss) -90 80 25 121 91 92 72 68 2009 2010 1H2011 Total Debt EBITDA # Total Debt / EBITDANotes: (1) 2009-2010 – IFRS accounts, 1H2011 – RAS accounts 6
  • 8. Investment program in 2011-2015 New Power Plants’ characteristics Investment program financing in 2010-2015 Capacity Capacity, Investment, Launch price, MW/Gkal RUR mn date RUR/MW/ month(1) 23% Cash from operating activities Eletskaya CHP 52 2,525 2009 718,943 40% Additional issue Voronezhskaya CHP-2 115 / 90 5,584 2011 752,075 Bonds or credits Kurskaya CHP 115 / 80 5,584 2011 807,859 37% Kaluzhskaya CHP 30 1,457 2011 711,011 Livenskaya CHP 30 1,457 2012 Novomoskovskaya CHP 190 / 130 7,592 2012 Impact of Investment program on EBITDA 2010-2015 (US$m) Djagelevskaya 115 5,584 2014 Aleksinskaya CHP 115 5,584 2014 322 311 302 293 Voronezhskaya CHP-1 223 8,911 2015 242 Kurskaya CHP 107 5,195 2015 174 138 121 78 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019ENotes: (1) Excluding seasonal factors 7
  • 9. Spin-Off Heat BusinessMarket Share of Quadra - 25% Moscow Smolensk Goals Expected Results 29% Kaluga ■ Creating an objective picture of the heat ■ Operating as separate heat transmission 1% distribution business and creating conditions for companies Tula Ryzan future investments, potentially with strategic ■ Achieving positive valuation of heat business Bryansk 25% 7% partners 8% Orel ■ Preparing for the implementation of RAB ■ Transparency in the heat business both for Lipetsk 36% regulation in heat business regulators and investors Kursk 36% Tambov 31% 21% ■ Liquidation of cross-subsidies Belgorod 45% Voronez 26% JSC «Quadra» Spin-Off Heat Business, Implementation Of RAB Regulation in Heat Business JSC «Quadra» Power Generation Completed: Will be created in 2012 Will be created in 2013 Power ■ JSC “Orlovskay Heat Company” ■ JSC “Tambowskay ■ “Lipetskay Heat Generation ■ JSC “Belgorodskay Heat Company” Heat Company” Company” ■ JSC “Smolenskay Heat Company” ■ JSC “Voronezskay Heat ■ JSC “Ryzanskay Heat Company” Company” Heat New entity Networks Heat Networks 8
  • 10. Key Growth Drivers 1 Investment program (DPM) 2 Spin-Off Heat Business 3 Implementation Of RAB Regulation in Heat Business 4 Improving Operational Efficiency 5 Transparency and investor relations 9
  • 11. ContactsMember of the Executive Board, Member of the Board of DirectorsDaniel WolfeCell: +7 (985) 773 01 34wolfe@quadra.ruHead of Investor RelationsAnna KrilovaCell: +7 (909) 934 2008,+7 (495) 739 73 33, ext. 4444Krylova_AV@quadra.ruwww.quadra.ru 10