2. Disclaimer
2
The information in this presentation was received from the sources, which in opinion of IDGC of Centre (“the Company”)
are reliable. Nevertheless, we do not guarantee the accuracy of the given information, which may be short or incomplete.
All opinions and estimations contained in the present material reflect our opinion at the date of publication, and are
subject to the change without any notice.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer
to purchase or subscribe for, any shares or other securities representing shares in the Company, 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.
The information in this presentation includes forward-looking statements. These forward-looking statements include all
matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations
concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth,
strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks
and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they
relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that
forward looking statements are not guarantees of future performance and that its actual results of operations, financial
condition and liquidity and the development of the industry in which the Company operates may differ materially from
those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the
Company’s results of operations, financial condition and liquidity and the development of the industry in which the
Company operates are consistent with the forward-looking statements contained in this presentation, those results or
developments may not be indicative of results or developments in future periods
The Company does not bear the responsibility for consequences of use of opinions containing in the present report or
applications, or for incompleteness of the information. No person is under any obligation to update or keep current the
information contained herein.
By attending the presentation you agree to be bound by the foregoing limitations.
4. 205
121
85
79
77
57
52
38
23
18
МОЭСК
МРСК Центра
МРСК ЦП
ЛенЭнерго
МРСК Волги
МРСК Урала
МРСК Сибири*
МРСК Юга*
МРСК СЗ*
МРСК СK*
13,1
5,6
3,2
2,3
2,1
1,7
1,3
1,2
1,0
0,0
МОЭСК
МРСК Центра
МРСК ЦП
МРСК Урала
МРСК Волги
МРСК СK
МРСК СЗ
ЛенЭнерго
МРСК Сибири
МРСК Юга
91
50
47
40
39
35
27
23
17
8
МОЭСК
МРСК Центра
МРСК ЦП
МРСК Урала
МРСК Сибири
МРСК Волги
ЛенЭнерго
МРСК СЗ
МРСК Юга
МРСК СK
79
25
17
17
16
11
11
7
3
2
МОЭСК
МРСК Центра
МРСК Урала
МРСК ЦП
МРСК Волги
Ленэнерго
МРСК Сибири
МРСК СЗ
МРСК Юга
МРСК СK4
Industry restructuring 2003-2007 Current Tariff Structure
63%
34%
3%
Sales
Transmission & Distribution
Power Generation
100%
17% 7%
Losses
4%
TGCs
6%
34%
RАО UES
of Russia
Infrastructure
System Operator
Federal Grid Company
Transmission network
220 kV and above)
Holding IDGC
(11 IDGCs –distribution
network 110 kV and
below, 7 sales, 5 DGCs,
others)
Market Board
Heat UGC
TGC
Others
Hydro UGC
Power Generation
Industry Structure
Benchmark among IDGCs (9m2011)
Sales
Other power generating
companies
MCap (12.2011), RUR billion Revenue, RUR billion Net profit, RUR billion RAB, RUR billion
#2 #2 #2 #2
МРСК Центра МРСК Центра
МРСК ЦП
МРСК СЗ
МРСК СK
МРСК ЦП
МРСК СЗ
МРСК СK
МРСК СЗ
МРСК СK
МРСК ЦП
МРСК Центра МРСК Центра
МРСК ЦП
МРСК СЗ
МРСК СK
HOLDING
IDGC
MOESK
IDGC of Centre
IDGC of Centre and Volga
Lenergo
IDGC of Urals
IDGC of Siberia
IDGC of Volga
IDGC of North-West
IDGC of South
IDGC of NC
MOESK
IDGC of NC
IDGC of Centre
IDGC of Centre and Volga
IDGC of Urals
IDGC of Siberia
IDGC of Volga
Lenergo
IDGC of North-West
IDGC of South
MOESK
IDGC of Centre
Lenergo
IDGC of Urals
IDGC of Centre and Volga
IDGC of NC
IDGC of Volga
IDGC of North-West
IDGC of Siberia
IDGC of South
MOESK
IDGC of Centre
IDGC of Centre and Volga
Lenergo
IDGC of Volga
IDGC of Urals*
IDGC of Siberia*
IDGC of NC*
IDGC of South*
IDGC of North-West*
4
the structure is provided according to the results of
2011 tariff campaign
* indicative
5. IDGC of Center
1 Belgorodenergo
2 Bryanskenergo
3 Voronezhenergo
4 Kostromaenergo
5 Kurskenergo
6 Lipetskenergo
7 Orelenergo
8 Smolenskenergo
9 Tambovenergo
10 Tverenergo
11 Yarenergo
Introduction
10
11
4
8
2
5 7
1
3
6
9
The Company controls 83,6% of
power transmission market – tariffs
are regulated by the State
IDGC of Centre
Smolensk
Bryansk
Belgorod
Voronezh
Tambov
Lipetsk
Kursk
Kostroma
YaroslavlTver
Orel
MCap, RUR billion
as at January 27, 2012
27,4
Revenue (IFRS)
RUR billion
68,1
Length of lines,
km thousand*
374,7
Substation capacity,
MWA
35-110 kV 31 506
6-10/0.4 kV 15 353
Staff number 31 036
Number of
shareholders**
16 775
2011
*- overhead power lines 0.4-110 kV
** - as at 12.05.2011 – the date of registry closed
5
Service area–
458 000
km2
15% of the
Russian
population
6. Board of directors approved
the Regulations
on the dividend policy
based on a system
executing a set of criteria
The first stage of
Smart Grid
program is
completed in
Belgorod
The company acquired
100% of Yargorelectroset ,
the share of IDGC of
Centre in regional grid
assets increased to
90%
5 years RAB tariff system
had been adopted in
Orelenergo and
Bryanskenergo
iRAB amounts USD 3.9 billion
(RUR 118 bln)
Successful
implementation of the
business plan and the
investment program for
2010, the actual volume
of CAPEX amounted to
103% of the plan –USD
401 million (RUR 12
billion)
12.2004 –
2009
The Company fulfilled its
obligations for dividend
payments of USD 20.1 million
(RUR 611 million) (the pay-out
ratio – 12.6%); Company stocks
moved across to MICEX
quotation list A2; 1H2011 IFRS
financials have been reported ,
demonstrating growth of the key
financial indicators
Company developed and
approved the Program of
innovative development
for 2011-2016
Board of directors
approved Business Plan
and Investment Program
for 2012
5 years RAB tariff
system adopted in
Kostromaenergo,
Tambovenergo,
Voronezhenergo,
Smolenskenergo
and Yargorelectroset
Story line 2010-2011
December‟04
As part of RAO UES reforming
IDGC of Centre and North
Caucasus had been registered for
RGC integration
6
April „07
The final structure of the Company
had been accepted, including
11 regional grid companies
of central Russia (the decision of
The board of directors of RAO
UES)
March „08 Affiliation of RGCs
May „08 Listing on MICEX and RTS
09.2010 11.2010 12.2010 01.2011 06-08.2011 12.2011
7. Strategic goals of the Company (1)
Improvement of quality and reliability of customer services
• implementation of production program;
• implementation of repair program. The planned amount of repair program for 2012 is RUR 1,5 bn,
6% up than expected fact of 2011;
• implementation of Investment program. The investment program for 2012 includes capital
expenditures of RUR 14,3 bn, expecting reduction of CapEx by (-5,5%) in compare with expected fact for
2011
Improving the efficiency of operating and investment activities
• implementation of selected economically attractive investment projects, approved within
the investment program for 2012;
• reduction of management costs
Improving the investment attractiveness
• extension of long-term regulation period in order to save the parameters and to reduce
the tariff pressure on consumers;
• implementation of measures for share liquidity improvement;
• possible privatization 2013-2014
1
2
3
7
8. Strategic goals of the Company (2)
Improving the energy efficiency and providing the
innovative development
• full implementation of asset management methodology, integration of asset management
system with geo-informational system, that will allow to manage the technical risks (risks of failure
of process equipment)
Improving the availability of power grid infrastructure
• integration of power grid assets of TGC and consolidation of power grids
Development of human capital
• implementation of knowledge and competence of key functional specialists and staff
reserve assessment system;
• development of personnel motivation system
5
4
6
8
9. IDGC Holding Minor shareholdres
50.23% 49.77%*
Company structure and key shareholders
Russian Federation
53.69%
IDGC of Center, JSC
YarESK, JSC
Energetik, JSC
51%
11 operating
business
units
Subsidiaries – 100%
Group of companies
Yargorelectroset,
JSC
Yargoreletroset, JSC is the
largest Territory Grid
Organization in the Central
Federal Region. The result of
acquisition of the 100% stake is
that IDGC of Center now
controls more than 90% of
power grid assets in the
Yaroslavl region
Energyservice
company, JSC
The main activities are
providing saving energy
services , energy
efficiency
Free float
30%
Share capital
structure, %
9
CIEET, Closed
JSC
Centre of innovations
and energy efficient
technologies
100%
* - including the State share 0.46%
50,23 15,90%
8,40%
3,20%
2,73%
1,45%
18,09%
IDGC Holding, JSC
GENHOLD LIMITED
THE BANK OF NEW YORK MELLON
IMMENSO ENTERPRISES LIMITED
Energosoyuz Holdings Limited
RUSENERGO FUND LIMITED
Others
10. 5 Committees:
Share capital structure and
corporate governance
10
General Meeting of
Shareholders
Board of Directors
Audit
Commission
Auditor
Internal Control and
Audit Department
Chairman of the
Management Board–
General Director
Management board
Supreme governing body:
Strategic
governing body:
Internal control for financial
activities of the Company
External control for financial
activities of the Company
Committee
on Strategy
Committee
on Audit
Committee
on personnel
Committee
on reliability
Committee
on TC*
* - technological connection
History of IDGC of Center corporate
rating on the national scale
NRCG
Confirmed August’ 11
Upgraded (7+) March ‟ 11
Confirmed July’ 09
Confirmed February’ 09
Assigned September’ 08
Developed corporate
governance practice,
leading position among
IDGCs
11. Revenue forecast for
2012 is RUR 1,8 bn*
29%
25%15%
13%
8%
7%
3%
СМР в рамках концессионных соглашений
СМР по прямым договорам с МРСК Центра
Услуги прочим заказчикам
Ремонтная деятельность
Расширение просек
Проведение энергетического обследования
Услуги контактного центра
Development of energy saving technologies -
Energyservice Company, JSC
11
Russian Government Program
“Energy saving and improving the
energy efficiency till 2020”
1
Participation in investment and repair
programs of IDGC of Centre (development,
reconstruction, repair of energy equipment,
строительство, clearing and expansion of firebreaks)
Organizing and conducting energy audits,
developing action plans on losses reduction
of energy sources for customers;
Financial engineering and implementation
of turnkey energy saving projects
Implementation of concession
agreements in the area of power grid
construction and development of street
light lines;
Providing services on sales companies
market (energy saving contracts, energy meters
market)
2
3
4
5
* - 100% subsidiary of IDGC of Centre
** - BP for 2012
The key activities
The structure of forecast
revenue**
*
CIW within the concession agreements
CIW within the straight contracts with IDGC of Centre
Services for the other customers
Repair activities
Expansion of firebreaks
Conducting the energy research
Services of contact center
13. Key RAS figures 2009-2011FF
13
EBITDA
RUR bn
Net Profit,
RUR bn
EBITDA
margin %
Net Profit
margin %
Productive
supply
(inc. TGCs)
kWh bn
49,1
60,4
68,1
Indicators 2009 2010 2011FF*
Revenue growth, inc.: 12,6% 23,1% 12,8%
Growth of revenue from
power distribution
16,7% 22,8% 14,1%
Growth of revenue from
technological
connection
(40,8%) 32,7% (23,3%)
EBITDA growth 13,0% 43,6% 23,7%
Net profit growth 44,4% 255,2% 9,7%
ROE 3,14 11,12 11,25
46,9
57,6
65,7
2009 2010 2011ПФ
Revenue
RUR bn
от технологического
присоединения
прочие услуги
от передачи э/э
7,6
11,0 13,6
15,6%
18,1%
19,9%
2009 2010 2011ПФ
1,3
4,7 5,2
2,7%
7,8% 7,6%
2009 2010 2011ПФ
51,5
53,4 54,1
2009 2010 2011ПФ * - Forecast Fact
from technological
connection
other services
from power
distribution
14. Dynamics of costs structure
14
* - Forecast Fact
Type of cost, RUR bn 2009 2010 2011FF* %2011/2010
Purchased energy for
losses compensation
6,8 9,2 8,7 -5,6%
FGC UES, JSC services 7,8 11,0 12,8 16,5%
DGCs services 8,0 9,4 11,2 18,7%
Services of contractors
for maintenance and
repair of equipment
0,6 0,5 0,5 -7,6%
Labor costs 6,0 7,5 8,0 6,8%
Insurance fee 1,4 1,9 2,6 40,5%
Raw and materials 1,4 1,7 2,0 20,7%
Amortization of fixed
assets and NMA
4,0 4,3 5,2 20,5%
Leasing 1,8 1,3 0,9 -31,5%
Rent fee 0,3 0,4 0,5 32,4%
Others 6,3 5,3 4,8 -11,1%
Total 44,4 52,6 57,2 8,9%
14,1 14,7 14,9
30,4
37,8
42,3
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
2009 факт 2010 факт 2011 ПФ
Неподконтрольные затраты
Подконтрорльные затраты
24,5%
11,8%
4,8% 1,3%
RUR bn
Dynamics of costs structure
2009-2011FF*:
Uncontrollable costs
Controllable costs
fact fact FF
15. Loan portfolio dynamics & credit rating
Recommended
ratio Net Debt/EBITDA = 3
Net debt/EBITDA, RUR billion
Structure of loan portfolio %, 2011
History of IDGC of Centre credit rating
Standard&Poor‟s
Confirmed February‟11
Confirmed July ’10
Assigned November‘09
NRА*
Confirmed (outlook
“Positive”)
December „11
Upgraded (level AA-) December ‘10
Confirmed October ’10
Upgraded (level A+) September ’08
Upgraded (level А) August ‘07
* National Rating Agency
Credit rating history
15
6,8 7,6
11,0
13,6
9,3 10,8
14,7
18,7
1,4 1,4 1,3 1,4
0,0
0,5
1,0
1,5
2,0
0
5
10
15
20
25
30
35
40
2008 2009 2010 2011ПФ
EBITDA Чистый долг Net Debt/EBITDANet debt
49%
18%
18%
12%
3%
Сбербанк
ВТБ
Росбанк
Альфа-Банк
Газпромбанк
Sberbank
VTB
Rosbank
Alfa-Bank
Gazprombank
Avg. rate
8,35%
16. 16
Year
Commissioning,
RUR billion
Commissioning power
on fixed assets
km MVA
2009 7,7 2414 877
2010 10,0 4155 1050
2011* 13,9 4374 1385
2012F 14,4 4010 811
- Others
14.35
RUR billion
Expected CAPEX for 2011-2015
amounts to RUR 102 billion*
Main uses of CAPEX in 2012
Sources of finance in 2012
- Replacement of the main power equipment
- New construction(substations, overhead и cable lines)
- Developing/Modernization of accounting systems
- ASMD systems, connection, IT
- Modernization and reconstruction
* Forecast Fact
60%
36%
2%
2%
Тарифные источники
Заемные средства
Прочие собственные
средства
Плата за ТП
Tariff sources
Borrowed sources
Other own sources
Payments for
technological connection
39,0%
35,9%
6,3%
6,1%
3,0 % 0,4%
9,2%
5,6
5,16
0,91
0,88
0,43 0,05
1,32
14,35
100%
- Purchase of fixed assets
0,43
17. Tariffs 2012 – main schedule points
Government approved the Decree 1178 of 29 December, 2011 "On the pricing of regulated tariffs in the
Electric Power Industry
The approval of regional regulators of common rates of tariffs for
the period from 01 January 2012 till 30 June 2012, at the level ≤
2011 (subject to execution of the Decree 1172) - is satisfied.
Adoption of regional regulators solutions as follows:
- Establishing (or revising) of a long-term options for RAB-
regulation from 01 July 2012 and aligning them with the
FTS of Russia;
- Establishing of tariffs for electricity transmission for 2H2012,
provided not exceeding the 11% average growth rate
compared with approved tariff level from 01 January 2012
Before 1 April 2012
Approval of the new tariff decisions
1 July 2012
IPR to 2018
Approval of FTS of
Russia of long-term
RAB regulation
strandards
Method of long-term
indexing
In the case of absence
before 1 January
2012
17
18. Key points of 1178 Decree
18
Must be approved by the
FTS of Russia (RECs’ can
not make changes)
Criteria for
LPR regulation
«Leverage»:
Value of debt at the end of
each year of the period
must be >=25% of the
invested capital;
Correspondence of growth
of the average tariff rate
with Ministry of
Economical Development
(MED) forecast (no
increase in 2013 above
10%)
Based on the actual
commissioning of the
actual inputs on CAPEX
since 01.07.2014 –
taking into account
actual load
Invested
capital basis
from 1% to 3% (3% - in the
case of growth
(OPEX/CU* i-1 :
OPEX/CUi >
2*CPI forecast 1-st year of RAB
regulation ( i – period of transition)
Efficiency
index
Territorial grids: for new
IC** - approved by FTS
in agreement with MED;
for old IC – approved by
regional regulatory
agencies
(1=< return on old
capital<=return on new
capital)
Rates of
return
For 1st period of LPR – in
accordance with MED
standard, further taking
into account temps of
decrease in accordance
with an energy saving
program***)
Amount of
losses
Require changes in the guidelines for tariff regulation on RAB basis № 231 of 26 June, 2008 and approval
of the FTS in agreement with MED on rates of return on new capital
* conventional unit
** invested capital
*** 10% penalty is applied in the case
of absence of the program
long-term
period of
regulation
(LPR)
19. M&A projects - grid assets integration and key steps for
investment attractiveness improvement
19
III.
20. • Providing monopoly on power grid services market in the regions of
presence with more than 97% share;
• Long-term target program for the consolidation of power grid assets have
been developed and approved (power grid assets consolidation plan for
2011 - 2015)
Integration key steps
Plans for
2011-2015
Methods and
advantages
of consolidation
Target/
Program
• Company consolidates the assets primarily in 3 ways: acquisition of
power grid, long term property rent, purchase of shares of power grid
companies;
• The basic advantages of consolidation are as follows: implementation
of a unified technical policy, the development of a unified scheme
of long-term development of power grids, improving the reliability
of electricity supply to consumers of all categories, increasing of
power grid capacity
• It is planned in 2011 to consolidate municipal power grid assets in some
regions were Company operates;
• Program provides working with more than 5 thousand owners
20
21. M&A projects - grid assets integration
TGCs in IDGC of Centre service area
9
14 18
23 25 26
39
53
62
70
102
0
20
40
60
80
100
120
Tambov
Kursk
Kostroma
Orel
Tver
Lipetsk
Belgorod
Bryansk
Smolensk
Yaroslavl
Voronezh
Amount of other TGCs = 441
• The other TGCs‟ average share in revenue
in IDGC of Centre service areas – 20%;
• Required Gross Revenue (RGR) of the
Company due to the assets consolidation
in regions may increase to RUR 10 billion
by 2015, RGR share may grow by 97%;
• One of the key goals of the Company is the
integration of power grid assets that will
allow:
• increasing the reliability level of power supply
• enlarging the power distribution sales market
• improving the quality of customer service
• balancing the tariff on power distribution
21
Share of the Company in the power
transmission market, 2007-2015F
2007 2008 2009 2010 2015F
Market
share in
terms of
money
83% 83.6% 83.8% 84% 97%
22. 08.2010
Confirmation
of presence in
RTS EU and
RTS-2
- forecast
22
Stock performance and liquidity increase
Company ‘s
shares were
listed on
MICEX
(quotation list
B), RTS
Company’s
shares were
included in the
index:
MICEX PWR
Company’s
shares were
included in
RTS EU*
Dividends
payment USD
20.05 million
(RUR 610
million),
pay-out-ratio
13%
* - RTS energy utilities
Dividends for 2010:
Total (RUR million) 610,9
Net profit share 13%
Dividend yield 1,33%
Company‟s priorities for 2012:
• Stable dividend policy
• Quotation list update (MICEX A1)
• Depositary receipts launching
• Inclusion in international indexes
• Launching of option program
04.0905.2008 3Q112Q1109.10 4Q11 1Q12
Quotation list
update
(MICEX A2 )
Quotation list
update (MICEX-RTS A1 )
23. -90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Август2008
Октябрь2008
Декабрь2008
Февраль2009
Апрель2009
Июнь2009
Август2009
Октябрь2009
Декабрь2009
Февраль2010
Апрель2010
Июнь2010
Август2010
Октябрь2010
Декабрь2010
Февраль2011
Апрель2011
Июнь2011
Август2011
Октябрь2011
Декабрь2011
МРСК Центра Индекс ММВБ Индекс ММВБ-Энергетика
Информация о намерениях
Правительства о переходе на
RAB -регулирование
23
Stock market indicators*
2011 MRKC Russian
peers
Int. peers
P/E 4,9 5,3 6,9
EV/
EBITDA
3,3 2,9 4,7
EV/S 0,7 0,5 1,0
EV/RAB 0,37 0,37 1,28
* Data calculation – forecast 2011
Beginning of trading:
May 21, 2008
Quotation list:
«А2» MICEX
Shares of IDGC of Centre are part of the
calculation base in indices:
- MICEX PWR
Feb 17. Head of
Russian Government
announced the need to
curb the growth rate of
tariffs on power
Company reports the good
financials for 2009 and plans
on all the branches to adopt
RAB after Jul 01, 2010
Remaining branches to adopt
RAB (Nov’10, Jan’ 11)
Shares of the
Company have been
included into MICEX
A2 quotation list
Company reports
good IFRS financials
on 1H2011
October2009
April2010
November2008
September2011
October2011
November2011
December20111
August2008
October2008
December2008
February2009
April2009
June2009
August2009
December2009
February2010
June2010
August2010
October2010
December2010
February2011
June2011
August2011
April2011
September2008
January2009
March2009
May2009
July2009
November2009
January2010
March2010
May2010
July2010
November2010
January2011
March2011
May2011
July2011
IDGC of Centre
MICEX
MICEX Power
Company‟s shares and sector indexes dynamics
24. Attractive object for investment
External favorable factors
1
24
• Presence in 11 regions of Central Russia, with strong growth prospects;
• Second largest company of 11 interregional distribution grid companies in terms
of capitalization, revenue, net income, the value of RAB;
• Significant underestimation as compared with foreign peers (in multiples P / E,
EV / EBITDA, EV / S, EV / RAB);
• Growth of electricity consumption in the whole of Russia for the period 2009-
2020, CAGR - 2,8% *
2
Internal favorable factors
• Leading position in innovation in the distribution sector (smart grid, smart
metering);
• Highest level among the analogs of corporate governance (National grade 7 +);
• The leader of the transition to RAB-regulation;
• Growing financial and economic indicators for the period 2009-2011 (sales CAGR
- 20%, EBITDA CAGR - 33% net profit CAGR - 97%);
• Low debt level, credit rating S &P;
• Strong management team
*Source: Agency for Energy Forecasting
25. 25
Thank you for your attention!
ir@mrsk-1.ru
IDGC of Center
4, 2nd Yamskaya str., Moscow, Russia 127018
T: +7 495 747 9292 F: +7 495 747 9292
www.mrsk-1.ru
Tickers:
MICEX: MRKC
Bloomberg: MRKC RX
Reuters: MRKC.MM
www.mrsk-1.ru/ru/investors/
Follow us:
IR specialists will provide you with any additional information upon your request:
Head of IR -
Miroshnichenko Tatiana
