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HMS Group Investor Newsletter                                                  August 5, 2011


HMS Group to Acquire Belorussian Pump Manufacturer
HMS Group to purchase 57% of Bobruisk Machine Building
Plant for USD 9.6 million

Location & Facilities description
 Located in Bobruisk, the Republic of Belarus
 1 production site with 78,000 m2 floor space
 Significant park of machines and foundry equipment, complete
  production cycle from foundry to machining and assembling
 950 employees
                                                                     Oil refining pump

Products portfolio
 Pumps for oil refineries, including  oil, petrochemicals and
   liquefied petroleum gas transportation pumps
 Pumps for pulp and paper industry, including those for transfer
   of paper grade pulp and cellulose-fiber semi-products
 Wastewater and cleanwater pumps
 Pumps for slurries in metallurgy and mining processes
 Spare parts
                                                                     Pump for wood and paper pulp

Deal specifics
 HMS Group to acquire 100% of newly issued shares equal to
  57% of the Plant’s share capital for total cash consideration of
  USD 9.6 million
 Transaction is fully financed with available debt capacity
 Invested funds will be used for the development of new
  products line and purchase of relevant new equipment
 Annualized 2011 EV/Sales multiple equals to 0.7x pre-money,
  and annualized 2011 EV/EBITDA ratio equals to 5.6x pre-            Pump for abrasive slurries
  money (NAS data used)

Acquisition rationale
 The plant has significant production capacities, allowing
  substantial increase in its revenue
 Broadening of HMS product portfolio with recognizable brands
  and new types of products
 HMS Group will enter the attractive “hot cycle” oil refining
  pumps market segment and increase its market share in pumps        Pump for pure water
  for metallurgy and mining applications segment
 Opportunity to create a production center of refining pumps,
  including under API, and pumps for metallurgy and mining
  applications
 Potential growth of revenue and EBITDA margin of the
  acquired company
 The acquisition has attractive multiples and deal structure        Pump for sewage and waste water




                                                                                                    1
HMS Group Investor Newsletter                                                                                                 August 5, 2011



Key data
Bobruisk Machine Building Plant, Financial & Industrial highlights
                                                              2008                     2009                        2010                       1H2011
    Revenue, US$ mn                                           21.03                      9.50                      13.01                        7.83
    EBITDA, US$ mn                                                2.01                   0.07                     -0.03                          1.05
    EBITDA margin                                                 10%                      1%                          -                        13%
    Total debt, US$ mn                                               -                          -                  5.20                         4.60
    Cash and cash equivalents. US$ mn                                -                          -                  0.25                          0.19
    Production site, m2                                                                                                                   78,000
    Source: Company data according to Belorussian National Accounting Standards
    Note: Exchange rate BYR/USD used: 2010 ave = 2,981; 1H2011 ave = 3,439; 2010 end = 3,001; 1H2011 end = 4,946 (Source: Bloomberg)




HMS Group targets Bobruisk Machine Building Plant’s EBITDA margin to go up to 16-18%
and revenue to increase more than twofold, within few years



HMS Group shares performance in July 2011

                 7.60                                                                                                                         9.00

                 7.40                                                                                                                         8.00

                                                                                                                                              7.00
                 7.20
                                                                                                                                              6.00
                 7.00
                                                                                                                                              5.00
                 6.80
                                                                                                                                              4.00
                 6.60
                                                                                                                                              3.00




                                                                                                                                                     volume, US$ mn
                 6.40
                                                                                                                                              2.00
    price, US$




                 6.20                                                                                                                         1.00

                 6.00                                                                                                                         0.00
                        1-Jul-11       7-Jul-11               13-Jul-11             19-Jul-11              25-Jul-11              29-Jul-11

                                       HMS Group GDR trading volume, US$ mn        HMS Group GDR price, US$
                                       MICEX index rebased to 7                    FTSE 100 index rebased to 7

    Source: Bloomberg


1    month              change                       +7%
1    month              max price, US$               6.50
1    month              min price, US$               7.50
1    month              ave volume, US$ mn           1.47




HMS Group Key Details                                                              Credit Rating
Reuters: HMSGq.L Bloomberg: HMSG LI                                                Standard & Poor’s             BB- (Outlook stable) as of
GDR price as of August 4, 2011      US$ 6.80                                                                     16 June, 2011
52-Week Range                       US$ 6.30-8.45
Market capitalization, mn           US$ 797                                        Contacts
Stock Exchange                      LSE                                            Inna Kelekhsaeva, Deputy Head of Investor Relations
ISIN                                US40425X2099                                   Email: kelekhsaeva@hms.ru or ir@hms.ru
GDR : Share Ratio                   1:1                                            Telephone: +7 (495) 730-6601

grouphms.com                                                                       twitter HMSGroup

                                                                                                                                                                      2
HMS Group Investor Newsletter                                                           August 5, 2011



Disclaimer



The information contained herein has been prepared using information available to HMS Hydraulic
Machines & Systems Group Plc (“HMS Group” or “HMS” or “Group” or “Company”) at the time
of preparation of the presentation. External or other factors may have impacted on the business
of HMS Group and the content of this presentation, since its preparation. In addition all relevant
information about HMS Group may not be included in this presentation. No representation or
warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the
information.
Any forward looking information herein has been prepared on the basis of a number of
assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve
risk and uncertainty and HMS Group cautions that actual results may differ materially from those
expressed or implied in such statements. Reference should be made to the most recent Annual
Report for a description of the major risk factors. This presentation should not be relied upon as a
recommendation or forecast by HMS Group, which does not undertake an obligation to release
any revision to these statements.
This presentation does not constitute or form part of any advertisement of securities, any offer or
invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in
HMS Group, nor shall it or any part of it nor the fact of its presentation or distribution form the
basis of, or be relied on in connection with, any contract or investment decision.




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HMS Group Investor Newsletter Bobruisk plant M&A

  • 1. HMS Group Investor Newsletter August 5, 2011 HMS Group to Acquire Belorussian Pump Manufacturer HMS Group to purchase 57% of Bobruisk Machine Building Plant for USD 9.6 million Location & Facilities description  Located in Bobruisk, the Republic of Belarus  1 production site with 78,000 m2 floor space  Significant park of machines and foundry equipment, complete production cycle from foundry to machining and assembling  950 employees Oil refining pump Products portfolio  Pumps for oil refineries, including  oil, petrochemicals and liquefied petroleum gas transportation pumps  Pumps for pulp and paper industry, including those for transfer of paper grade pulp and cellulose-fiber semi-products  Wastewater and cleanwater pumps  Pumps for slurries in metallurgy and mining processes  Spare parts Pump for wood and paper pulp Deal specifics  HMS Group to acquire 100% of newly issued shares equal to 57% of the Plant’s share capital for total cash consideration of USD 9.6 million  Transaction is fully financed with available debt capacity  Invested funds will be used for the development of new products line and purchase of relevant new equipment  Annualized 2011 EV/Sales multiple equals to 0.7x pre-money, and annualized 2011 EV/EBITDA ratio equals to 5.6x pre- Pump for abrasive slurries money (NAS data used) Acquisition rationale  The plant has significant production capacities, allowing substantial increase in its revenue  Broadening of HMS product portfolio with recognizable brands and new types of products  HMS Group will enter the attractive “hot cycle” oil refining pumps market segment and increase its market share in pumps Pump for pure water for metallurgy and mining applications segment  Opportunity to create a production center of refining pumps, including under API, and pumps for metallurgy and mining applications  Potential growth of revenue and EBITDA margin of the acquired company  The acquisition has attractive multiples and deal structure Pump for sewage and waste water 1
  • 2. HMS Group Investor Newsletter August 5, 2011 Key data Bobruisk Machine Building Plant, Financial & Industrial highlights 2008 2009 2010 1H2011 Revenue, US$ mn 21.03 9.50 13.01 7.83 EBITDA, US$ mn 2.01 0.07 -0.03 1.05 EBITDA margin 10% 1% - 13% Total debt, US$ mn - - 5.20 4.60 Cash and cash equivalents. US$ mn - - 0.25 0.19 Production site, m2 78,000 Source: Company data according to Belorussian National Accounting Standards Note: Exchange rate BYR/USD used: 2010 ave = 2,981; 1H2011 ave = 3,439; 2010 end = 3,001; 1H2011 end = 4,946 (Source: Bloomberg) HMS Group targets Bobruisk Machine Building Plant’s EBITDA margin to go up to 16-18% and revenue to increase more than twofold, within few years HMS Group shares performance in July 2011 7.60 9.00 7.40 8.00 7.00 7.20 6.00 7.00 5.00 6.80 4.00 6.60 3.00 volume, US$ mn 6.40 2.00 price, US$ 6.20 1.00 6.00 0.00 1-Jul-11 7-Jul-11 13-Jul-11 19-Jul-11 25-Jul-11 29-Jul-11 HMS Group GDR trading volume, US$ mn HMS Group GDR price, US$ MICEX index rebased to 7 FTSE 100 index rebased to 7 Source: Bloomberg 1 month change +7% 1 month max price, US$ 6.50 1 month min price, US$ 7.50 1 month ave volume, US$ mn 1.47 HMS Group Key Details Credit Rating Reuters: HMSGq.L Bloomberg: HMSG LI Standard & Poor’s BB- (Outlook stable) as of GDR price as of August 4, 2011 US$ 6.80 16 June, 2011 52-Week Range US$ 6.30-8.45 Market capitalization, mn US$ 797 Contacts Stock Exchange LSE Inna Kelekhsaeva, Deputy Head of Investor Relations ISIN US40425X2099 Email: kelekhsaeva@hms.ru or ir@hms.ru GDR : Share Ratio 1:1 Telephone: +7 (495) 730-6601 grouphms.com twitter HMSGroup 2
  • 3. HMS Group Investor Newsletter August 5, 2011 Disclaimer The information contained herein has been prepared using information available to HMS Hydraulic Machines & Systems Group Plc (“HMS Group” or “HMS” or “Group” or “Company”) at the time of preparation of the presentation. External or other factors may have impacted on the business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information about HMS Group may not be included in this presentation. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information. Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and HMS Group cautions that actual results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Report for a description of the major risk factors. This presentation should not be relied upon as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to these statements. This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in HMS Group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision. 3