RUSNANO's CEO Anatoly Chubais' presentation for Asian investors


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A group of leading Asian investors from China and South Korea visited RUSNANO within the framework of the 2nd Global Innovation Forum

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RUSNANO's CEO Anatoly Chubais' presentation for Asian investors

  1. 1. Anatoly Chubais, Chief Executive Officer RUSNANO:Leading High-Tech Investor in Russia October 3, 2012
  2. 2. Russia’s Attractive Investment Proposition Attractive macroeconomic outlook… …on its way to modernisation… 20,0% Real Gross Fixed Investments as % of GDP Real GDP Growth 50% CPI Inflation Average 2012E–2015E 40% 30% 24.6 10,0% 20% 10% 0,0% 0% Russia Ukraine Turkey Japan USA India S.Korea China Germany Brazil Kazakhstan(10,0%) 2007A 2008A 2009A 2010A 2011A 2012E 2013E 2014E 2015E …supported by technology oriented …and government commitment human capital… to innovations Graduates in 2009 (mn) Total R&D Spending, $bn 500 15% 28% 21% 12% 25% 31% 23% 21% 400 3,0 2,1 300 2,0 200 1,0 100 33,4 0,0 0 USA Japan Germany Korea China Russia UK Italy France Russia Canada Japan USA Ukraine Turkey S.Korea Germany Brazil % share of science and engineering majors 2 Source: EIU, UNESCO, Eurostat as of June 2012
  3. 3. RUSNANO Group: Introduction RUSNANO Fund for Infrastructure Joint-stock company and Educational Programs (FIEP) non-commercial organizationco-investment in nanotechnology industrial investment in non-financial innovativeprojects and investment funds infrastructure and educational programsMandate:- Commercialization of nanotech industry projects;- Sales of Russian nano-enabled products by 2015 ~ $ 30 bln per year.Key investment principles• Investment in businesses that utilise nanotechnology• Investment either in commercialisation of technologies of Russian origin or in transfer of foreign technologies with establishment of production and/or R&D in Russia (the “Russian Edge”)• Balancing return vs technological and market risks o Focus on companies in the expansion and post-creation stages with occasional start-up financing and no seed / R&D investments• Mostly minority stake investments• Value creation at the portfolio company level through active involvement at the BoD level; no day-to-day operational management of portfolio companies• Target investment period of 3-5 years 3
  4. 4. RUSNANO: Generalist Fund,Active on Diverse Investment Stagescash flow seed start-up test sales early growth expansion later growth IPO stage Death valley Skolkovo SME BANK Vnesheconombank FIEP RUSNANO MICEXRVC Seed Fund Russian Venture Company“Bortnik Fund” 4
  5. 5. RUSNANO at a Glance $6.2bn investment fund… …established in 2007… Investments, $bn Financing, $bn 3.7 3.1 2.1 Outstanding 2.5 $6.2bn 1.1 commitment Committed 6 capital 3.7 Financed 2007 2008 2009 2010 2011 2012 (Sept) Foundation Bonds issue Private Placement First investments Spin-off of non-commercial activities …by the Russian Government… …to invest in nanotechnology-related areas Funding structure, $bn Investments, %% of total Others NanomaterialsAvailable debtunder government 2.1 17% 21%guarantees Cash Surface contribution in modification 7% $9.5bn 3.4 equity (100% 17% 21% MedicineDebt raised under Government) 4.0 17%government Optics andguarantees electronics Energy efficiency 5
  6. 6. Investment Portfolio SnapshotBy type of investment vehicles By project development stages Financed ($bn) Investments, $bn 5,2 Outstanding commitment ($bn) 1,6 3,3 3,6 1 1,2 0,7 0,9 0,1 Direct Investments Funds Start-up Post-Creation Expansion/DevelopmentBy technology origin By geography of recent production launches Investments in manufacturing projects, $bn Yaroslavl Region St. Petersburg Udmurtia Irkutsk region 1 launch 3 launches 1 launch 1 launch 3,2 Bryansk region 1 launch 2 Moscow and Moscow region 6 launches Tomsk Region 1 launch Russian technology Technology transfer Tatarstan Bashkortostan Sverdlovsk region Novosibirsk region 1 launch 1 launch 1 launch 1 launch 6
  7. 7. What we can do together? RUSNANO offers Funds could• Access to the Russian and Foreign • Co-invest in RUSNANO projects technologies • Buy-out partially or fully RUSNANO in• Support to companies entering the technologically appealing projects Russian market in terms of production site search, partners, etc. • Participate in RUSNANO private placement• Outstanding relations with a number of Russian regions • Consider portfolio companies expansion to Russia and encourage them to apply for• Co-investment RUSNANO financing• Access to RUSNANO’s scientific and • Encourage portfolio companies to technical expertise cooperate with RUSNANO projects to achieve synergies:  in accessing global product and finance markets  in exits from projects (IPO or selling to a strategic investor) 7
  8. 8. Russian Nanotech: Unique OpportunityRUSNANO’s focus on Russia’s most attractive high tech markets Pharma Energy Efficiency 47% 78% 14% 31% 25% 7% Market size in Russia ($bn)15 14.00 6 5 4 3.00 2.90 3 2.00 2 1.00 0.97 1.11 0.83 1.07 1 0.20 0.60 0.46 0 Biopharma Vaccines Medical Services Energy Accumulation Energy Harvesting Energy & Conversion Distribution Electronics & Optics Construction Materials 61% 19% 98% 86% 16% 15%15 Market size in Russia ($bn) 8.87 6 5.11 5 4.30 4 3 3.07 2.40 2 1.85 1.20 1 0.46 0.38 0.75 0.12 0.10 0 Integrated Opto- Telecomm. Low Emissivity Thermal Polymers & Circuits & electronics Glass Insulation Additives Chips 2011 2015 2011-2015 CAGR (%) 8
  9. 9. The most attractive market segmentsI. Pharmaceuticals and biotechnologyII. Energy efficiencyIII. Electronics, photonics and opticsIV. Construction materials 9
  10. 10. I. Pharmaceuticals and biotechnology – Unique Opportunity Estimated minimum size of the pharma and biotech sector in 2015 is $4,5 bln. – 78% growth in vaccines is possible. (BIO)PHARMACEUTICALS VACCINES MEDICAL SERVICES (excl. vaccines)ATTRACTIVENESS > Upside potential > Upside potential > Moderate potential > Strong CAGR > Strong CAGR > Demand from > Government > Government commercial support support segment +47% +78% max 14,001) max 2,001)MARKET ‘11-’15 +14%[USD bn] 1,00 0,50 0,60 3,00 3,00 min 0,20 min 2011 2015 2011 2015 2011 2015KEY TRENDS > Strong medical need, > Growth of vaccines market > Demand for IVD services is especially in cardiovascular depends mainly on mainly driven by the and oncology treatments government plans for commercial sector > Government aims to localize including new vaccines in > Significant R&D base, manufacturing due to National Immunization experienced scientific teams currently high share of Calendar > Clinical trials in Russia are imported drugs (77%) > Unclear how many and what high quality and less type of vaccines will be expensive and quicker than included in the EU/US 1) window of opportunity (potential) 10
  11. 11. I. Pharmaceuticals and biotechnology –Project ExamplesFINANCING as of January 2012:• RUSNANO share of committed capital – $1,1 bn• Private investors (in cooperation with RUSNANO) – $1,6 bln. COMPANY PRODUCT TECHNOLOGY • BioBetter class of pharmaceuticals • Biopolymer polysialic acid • Novel biotherapeutic molecule for • Histone H1 moleculesPHARMACEUTICALS SynBio the treatment of tumours • Cord blood • Stem cell medicine • Flu vaccine Technologies based on pseudo-VACCINES AND adenoviral nanoparticles • Treatment of toxic statesMEDICINES • Treatment of ALS • Device for misc. blood coagulation • Organic nano-layers depositionDIAGNOSTICS disorders diagnostics • AI imagery recognition • Disposable units for tests • New diagnostic methods in healthcareTECHNOLOGY Domain Therapeutic products for the treatment Misc. advanced technologies in biopharma Associates of cardiovascular diseases, cancer, (new molecules, nanoparticles, polymers,TRANSFER infectious diseases, ophthalmology, etc. oligomers, combined therapy)TECHNOLOGY Celtic Pharma Innovative medications in hematology, endocrinology, cardiology, oncology GMP-standard manufacturingTRANSFER 11 Source: RUSNANO, Roland Berger
  12. 12. II. Energy Efficiency Sector – Unique Opportunity Power generation and energy accumulation will drive the sector up to $8 bln. in 2015 ENERGY ENERGY POWER ENERGY HARVESTING ACCUMULATION GENERATION DISTRIBUTION AND CONVERSIONATTRACTIVENESS > High potential > Upside > Moderate > Stable > Strong CAGR potential potential potential > Government > Huge future > Strong CAGR > Moderate support market share > Government CAGR supportMARKET 2011- +31% +25% +7%2015 [USD bn] 3,16 2,90 1,11 1,07 0,97 0,46 0,83 2011 2015 2015 2011 2015 2011 2015 > Opening up of the > USC technology > Growth driven by > Growth driven byKEY TRENDS electric vehicles power stations will overall growth of import substitution market be built in Russia advertising and for power > Growth in demand from 2015 construction markets transformers and for accumulators for > Technology will > Growth rate of non- high level of overall power distribution account for more residential property investment in energy companies than 30% of total market 2011-2015 is > Industry leaders plan power capacity 18.6% to localize installed transformer production in Russia 12 Source: RUSNANO, Roland Berger
  13. 13. II. Energy Efficiency Sector –Project examplesFINANCING as of January 2012:• RUSNANO share of committed capital – $0,9 bln;• Private investors (in cooperation with RUSNANO) – $1,28 bln. COMPANY PRODUCT TECHNOLOGY Accumulators for electricACCUMULATORS Liotech vehicles and energy High capacity lithium-ion batteries sector Carbon microwave steam activation ofSUPERCAPACITORS Nesscap High-capacity energy nanopore electrode structures Energy Inc accumulators Fiber optic metering Nanostructured fiber-based optic currentTRANSDUCERS and voltage measurement and monitoring Profotech systems for power grids sensorsPHOTOVOLTAICS Hevel Solar modules Thin film technology 13
  14. 14. III. Electronics, photonics and optics – Unique opportunity The electronics and photonics sector is highly attractive for investors – Estimated market potential of $5,7 bln in 2015 INTEGRATED CIRCUITS OPTOELECTRONICS TELECOMMUNICATIONS AND CHIPSATTRACTIVENESS > High potential > Moderate potential > Stable potential > Strong CAGR > Moderate CAGR > Moderate CAGR > Government supportMARKET 2011- +61% +98%2015 [USD bn] +18% 0,46 3,07 0,38 1,85 0,75 0,12 2011 2015 2011 2015 2011 2015 KEY TRENDS > Many areas of application, > Market is driven by LED, > Massive market growth including transportation, which will mainly be used mainly due to transition ofKEY TRENDS pharmaceuticals, logistics, for lighting systems mobile operators to 4G etc. > Government support via the networks by applying LTE > Massive government restriction of incandescent base stations support via ERA GLONASS light bulbs and changes in > Growth in fiber channel project and implementation construction rules involving market is moderate and of RFID in all pharma the use of LED in new driven by the increasing products, transportation and buildings number of broadband postal systems service users 14 Source: RUSNANO, Roland Berger
  15. 15. III. Electronics, photonics and optics –Project examplesFINANCING as of January 2012:• RUSNANO share of committed capital – $1,1 bln.• Private investors (in cooperation with RUSNANO) – $1,98 bln. COMPANY PRODUCT TECHNOLOGY Fiber lasers andPHOTONICS NTO IRE- telecommunications Fiber lasers Polus equipment in RussiaOPTOELECTRONICS Light emission High-brightness light-emitting diodes for a large Optogan diodes variety of applicationsELECTRONICS Crocus Tech- Magnetoresistive Innovative memory production technology nology SA memory 15
  16. 16. IV. Construction materials – Unique opportunity Total market volume of the sub-sectors with the biggest commercial potential is ~$14,6 bln LOW EMISSIVITY THERMAL POLYMERS AND GLASS INSULATION ADDITIVESATTRACTIVENESS > Large market > Strong CAGR > Large market volume > Massive market volume > Stable market potential > Stable market growth growth > Increased application of new materialsMARKET 2011-2015 +15% +86% +16%[USD bn] 4,30 8,87 0,10 1,20 2,40 5,11 2011 2015 2011 2015 2011 2015 > Tighter regulations on > Overall construction > Growth driven by KEY TRENDS thermal resistance of growth and changes in overall construction windows for new energy efficy growth buildings from 2016 regulations for new > Good prospects for > Share of low emissivity buildings are driving increased application glass expected to grow market growth of new materials > Great need for (composites, nano- insulation for additives, etc.) refurbishing existing residential stock 16 Source: RUSNANO, Roland Berger
  17. 17. IV. Construction materials –Project examplesFINANCING as of January 2012:• RUSNANO share of committed capital as per January 2012– $0,46 bln• Private investors (in cooperation with RUSNANO) – $1,0 bn COMPANY PRODUCT TECHNOLOGYLOW EMISSIVITY Glass magnetron STiS Low emissivity glass spattering in metal-oxideGLASS nanofilm vacuum Composite Reinforcement of polymer withCOMPOSITES Galen reinforcement and basalt fibers fittings Additives for Devulcanized rubber nanoparticles forADDITIVES Unicom bituminous concrete bituminous concrete and asphalt additives and asphalt production 17 Source: RUSNANO, Roland Berger
  18. 18. Best-In-Class Partners to EnsureCommercial FocusStrategic Partners Russian Financial Partners Development Institutions International Funds and Financial Regional Governments Institutions Moscow Belgorod St. Petersburg Penza Tatarstan Ulyanovsk …and 26 more 18
  19. 19. Demand Promotion - Important Step toDevelop Russian High-tech Market• Russia has huge government related entities in energy, telecommunications, car production and transportation sectors, which annual investment programs exceed $10 bln. This is one of the prominent consumers for high-tech products and solutions• RUSNANO works closely with potential consumers of nanotechnology products to educate them and explain the efficiency behind high-tech solutions 19
  20. 20. RUSNANO is a Catalyst for the Commercialization and Growth Stages High-tech Investments in Russia RUSNANO actively cooperates with financial and strategic investors to co-finance nanotechnology projects• Leveraging strong relationships and administrative support of local governments, RUSNANO is able to realize green-field projects in any region of Russia depending on geographical needs and required resources;• Strategic investors including the largest Russian industrial groups provide equity and debt financing, production sites, technology and intellectual property for project companies;• Russian and foreign Private Equity & Venture Capital funds find it attractive to co-invest in nanotechnology projects. 20