Download - April, 2005

April, 2005 WWW.CENTERTELECOM.RU

Investor presentation

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


Tver

YaroslavlKostroma

Ivanovo

Vladimir

SmolenskKaluga

Ryazan

Tula

BryanskOrel

Lipetsk Tambov

VoronezhKursk

Belgorod

Moscow

Central District: 17 Subjects of the Federation of the Central part of Russia

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

One of the highest monthly income per

capita in Russia - RUR 6450

Fixed-line penetration level is 23.7%

Digitalization level is 48%

6.8 mln lines installed by end of 2004

Borders with Ukraine and Byelorussia

ATTRACTIVE REGION

April, 2005


SHAREHOLDER STRUCTURE

38,02

20,91

10,11

8,83

9,717,19 4,36

0,88

Svyazinvest

Other nominalshareholders

Brunswick UBS(nominal)

ABN AMRO(nominal)

Individuals

Federal PropertyFund

Foreign legalentities

Russian legalentities

Share capital – USD 225 mn

Number of shares – 2.103.999.655 of which:

ordinary – 75%, preferred – 25%

Free float shares – 55%

April, 2005


ORGANIZATIONAL STRUCTURE

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

Financial Director

PRESIDENT

Carla Cico

Shareholders meeting

PRESIDENT

Carla Cico

Board of Directors

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

Board of Directors

Compensation & Benefits Committee

Corporate GovernanceCommittee

Budget & Investment planning

Committee

Audit Committee

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

PRESIDENT

Carla Cico

Commercial Director

Technical Director

ITDirector

Security Director

HR Director

PRESIDENT

Carla Cico

General Director

PRESIDENT

Carla Cico

Management Board

PRESIDENT

Carla Cico

Auditing Commission

PRESIDENT

Carla Cico

Corporate Secretary

April, 2005


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


MARKET SHARE IN MAJOR SEGMENTS

85%

91%

57%

2,90%

64%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Long-distance

Local

Documentary

Mobile

New services (based on IP,VPN, INS, ISDN)

April, 2005


KEY FINANCIALS (RAS) (RUR, mln)

2002 2003 2004

Revenues 16,4 20,89 24,963

Operating expenses 12,132 15,649 19,702

EBITDA 3,337 4,853 5,377

Net profit 1,084 1,503 0,398

CAPEX 4,701 7,563 9,409

RUR Mln

April, 2005


KEY FINANCIALS

Major income components (RUR, bn)

10,6

9,6

2,56

2,2

Local

Long-distance and internationalcommunication services

Other

Income generated by service providers

April, 2005


REVENUEIn 2004 gross revenue reached RUR 24,963 mln, 19.5% growth to 2003

Traffic transition9%

Pay phone1,1%

Wire broadcast2,6%

Wireless communication1,3%

City telephone communicatiom

37,6%

Long-distance telephone communication

38,3%

Documentary telecommunication

1,7%

Broadcasting, television0,2%

Country telephone communication

5,4%

New services (Internet, ISDN, IP-telephony,

Intelligent networks, other )3,0%

April, 2005


OPERATING COSTS AND EXPENSES

In 2004 operating costs and expenses totaled RUR 19,702 mln, 25.9% increase 2003

Property insurance payments1%

Wages32%

Social tax10%

Amortisation13%

Materials & spare parts 7%

Energy3%

Repair work4%

Rostelecom service payment16%

Leasing2%

Other costs9%

Other telecommunication service payment

3%

April, 2005


KEY OPERATING HIGHLIGHTS

Total number of lines installed for the2004 grew to 6 798 128, including 619 291 lines commissioned in 2003

Long-distance traffic increased 104.2% to 2.8 bnminutes compared to the last year

Long-distance (international) traffic increased 106.7% to 197.8 m minutes compared to 2003

April, 2005


CAPEX DYNAMICS

0

1

2

3

4

5

6

7

8

9

10

2002 2003 2004 2005E

RUR Bln

forecast

4.8

7.6

9.4

3.8

36%

64%

71%

29%

73%

27%68%

32%

Equity capital

Debt capital Volume Placed, RUR mln

Placement Date

YTM PeriodCouponsNimber

600 23.11.2001 18,89 2 3/4 years 62000 17.09.2003 12,73 3 years 65 623 31.08.2004 14,27 5 years 10

Bonded loans

April, 2005


CAPITAL INVESTMENTS

In 2004 RUR 9.4 bln were invested (23% growth to 2003)

61,80%

3,59%

0,55%

4,12%

1,77%

22,37%

5,35% 0,46%

Traditional telephony

New services

Infrastructure units

Purchase, construction andreconstruction

IT Investments

Transmission lines

Other infrastructure

Special investments

April, 2005


STRATEGY. Main directions

Increase of overall performance in highly remunerative segments of the market

Orientation to highly remunerative client segments

Development of services with the high added value

Expansion of services spectrum Investments in new technologies

Operational expenses reduction

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

April, 2005


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


STRATEGY. Affiliated business restructuring

2004

Liquidation of non profile and non efficient businesses

Merging to ROSNET 5 companies – leaders in non regulated services in its regions

Acquisition of ROSNET

2005

AS A RESULT

Effective investment structure Management structure optimization Growth of competitiveness Cutting down operational costs Optimization of cash flow structure

Large corporate client base, including Central Bank of Russia 2004 Revenue - $30 mn Licenses for data services in 51 region

April, 2005


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


CONTACTS

Andrey KalinchenkoInvestor relations managerTel: +7 095 793 23 40Fax: +7 095 209 58 15E-mail: [email protected]

Elena RomskayaDirector, Securities and Corporate Governance DepartmentTel: +7 095 793 23 19Fax: +7 095 209 28 29E-mail: [email protected]

April, 2005

Download - April, 2005

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