presentation for investors and shareholders for the period...

1/7

Конфиденциально

Presentation for investors and shareholders for the period I – IX 2010

November 15th, 2010


2

Disclaimer

This presentation has been prepared by NIS a.d. Novi Sad (the “Company”), and comprises the slides for a presentation to investors concerning the Company. Presentation does not constitute or form part of any offer or invitation to sell, 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.

Any viewer of this presentation considering a purchase of such securities is hereby reminded that any such purchase should be made solely on the basis of the information contained in the prospectus or other offering document prepared in relation thereto and will be subject to the selling restrictions set out therein. No reliance may be placed for any purposes whatsoever on the information contained in this presentation, or any other material discussed at any presentation or on its completeness, accuracy or fairness. The information in this presentation should not be treated as giving investment advice. Care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable. However, the contents of 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 of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in or discussed at this presentation. None of the Company or any of their respective members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.

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 information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.

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.


3

Mission, vision and values of the company

Vision

Vertically integrated oil company Nis will become a leader in its industry for the entire Balkan region in the sphere of stabile growth and increase of efficiencies, demonstrating high social and ecological responsibility and high standards of customer service.

Mission

To give the people of Balkan region energy for improvement by responsible use of natural resources and high technology.

NIS Values:

‒ Professionalism ‒ Initiative and responsibility ‒ Compliance with rules and culture of good conduct ‒ Positive attitude and willingness to cooperate

Besides preserving NIS as the foundation of energy stability in the country, our company’s goal is to focus on social responsibility and creation of new business quality standards in the period to come. We see that increase in competitiveness, efficiency of the company and improvement in business management as our key goal.


4

Company information on September 30th, 2010

Business name: NIS a.d. Novi Sad

Company ID number: 20084693

Address: Novi Sad, 12 Narodnog fronta street

Tax ID: 104052135

Web site: www.nis.rs

Activity: 0610 – exploitation of crude oil

Number and date of registration in BRA: BD 92142, September 29th, 2005

Total equity as of September 30th, 2010: 34,857,869,000 RSD

Share capital as of September 30th, 2010: 81,530,200,000 RSD

Number of employees as of September 30th, 2010: 10,160*

Number of shareholders as of September 30th, 2010: 4.723.352

Share information

Number of issued common shares: 163,060,400

Face value: 500.00 RSD

CFI code: ESVUFR

ISIN number: RSNISHE79420

Shareholder structure as of October 4th, 2010

Gasprom neft 51,00%

Republic of Serbia 29,88%

Minority shareholders 19,12%

Shareholder structure as of October 4th, 2010

* without employees from servicing organizations

51,00%

29,88%

19,12%

Gazprom Neft

Republic of Serbia

Minority shareholders

http://www.nis.rs/


5

Corporate Governance

Corporate bodies structure Board of Directors, executive board and Supervisory board members

SHAREHOLDERS ASSEMBLY

BOARD OF DIRECTORS

GENERAL MANAGER

EXECUTIVE BOARD

INVESTMENT COMITEE

FINANCIAL ECONOMIC COMITEE

PROCUREMENT COMITEE

EXTERNAL AUDITOR

SUPERVISORY BOARD

COMPANY’S SECRETARY

REMUNERATION COMITEE

NOMINATION COMITEE

VOTING AND VERIFICATION COMMISSION

Vadim Yakovlev Chairman of Board

of Directors

Kirill Kravchenko BoD member

Igor Antonov BoD member

Anatoly Cherner

BoD member

Alexander Dybal

BoD member Nikola

Martinovic BoD member

Vladislav Barisnikov BoD member

Danica Draskovic

BoD member

Stanislav Seksnja

BoD member

Dusan Petrovic

BoD member

Milivoje Cvetanovic Chairman of

Supervisory Board Bozo Stanisic Supervisory board

member

Maksim Sahov Supervisory

board member

GENERAL MANAGER

Kirill Kravchenko

COMPANY’S SECRETARY Ana Vichugzanjina

Kirill Kravchenko

Chairman of Executive board

Predrag Radenovic

Executive board member

Alexey Urusov Executive board

member

Yurj Masijanski Executive board

member

Roman Kvitko Executive board

member

Nicolas Constantin Petri+ Executive board

member

Igor Tarasov Executive board

member

*as of September 30th, 2010


6

Business structure

NIS

Upstream

Crude oil

Natural gas

Elemir facility

Refining

Refinery Pancevo

Refinery Novi Sad

Sales & Distribution

Retail

Wholesale

Logistic

Trading

Oils and lubes

Head office administration

service

Oilfield services

Oil services

Technical services

Hydro probe

Geophysical services

Transport

* Business structure as of October 1st, 2010


7

Value chain

UPSTREAM (UPS)

Oil production, delivery for processing

Other

REFINING (REF)

Processing

RETAIL

Sales of n/d and auxiliary goods at

PS

FOREIGN TRADE

Export of Oil Products

Crude oil purchase

Import of crude oil products

Logistics Process Support

HR PR and advert. IT Safety Planning and

optimization of production

МТ Support Finance Business support Legal

support

Sales to third parties

Persons giving crude for processing

Export market of oil products (Platts -/+)

Sale at own PS

Sale B2B (end users)

Wholesale

Sale to private PS

WHOLESALE

Major Clients

B2B Clients

PPS

NIS SALES (PRO)

Production gas, sales, refining

and transmission

of gas

OILFIELD SERVICES (OFS)

Technical services

Hydro probe Geophysical

services Transport Oil services

Services to third parties


8

9M 2010: Key indicators

Key indicators Units of measurement 9M ‘09 9M ‘10 Change

Amount %

Urals $/bbl 56.37 75.77 19.40 34%

Net profit (loss) billion RSD -6.80 2.70 9.50 140%

Net profit (loss) before foreign exchange differences billion RSD -5.52 13.28 18.80 341%

Net foreign exchange differences billion RSD -1.28 -10.60 -9.32 -728%

EBITDA billion RSD 2.40 17.20 14.80 617%

Sales (without excise tax) billion RSD 80.90 111.90 31.00 38%

OCF billion RSD 7.50 14.20 6.70 89%

Paid taxes and fiscal obligations** billion RSD 55.40 61.90 6.50 12%

Domestic oil and gas production thousand conditional tons*** 670.10 880.40 210.30 31%

Domestic oil production thousand tons 482.40 621.80 139.40 29%

Oil processing volume including third parties thousand tons 2,172.20 2,202.30 30.10 1%

Oil processing volume excluding third parties thousand tons 1,967.30 2,195.10 227.80 12%

Total sales of oil products thousand tons 1,886.60 1,950.60 64.00 3%

Oil products local market sales thousand tons 1,645.20 1,636.50 -8.70 -1%

Retail thousand tons 446.80 409.90 -36.90 -8%

Light oil products sales thousand tons 1,084.60 1,180.00 95.40 9%

CAPEX from GPN loan**** million EUR 9.70 48.50 38.80 400%

CAPEX from OCF (NIS projects) billion RSD 2.20 2.80 0.60 27%

Total debt to banks million USD 830.00 667.00 -163.00 -20%

Total bank indebtedness***** million USD 991.00 675.00 -316.00 -32%

*Before opening balance adjustments on 2nd February and before impairment of the fixed assets (see presentation “General data about NIS on 31 December 2009 page 50 for further detail) ** Taxes paid and fiscal obligations includes taxes, duties, fees and other public revenues *** 1.256 m3 gas = 1 conditional ton of oil **** Under the Agreement of sale and purchase of shares of NIS a.d Novi Sad, clause 8.1.2, JSC Gazprom Neft (GPN) has an obligation to provide EUR 500 million to NIS a.d. Novi Sad by way of special purpose loans in order to implement NIS Novi Sad technological complex reconstruction and modernization program ***** Total bank indebtedness = Total debt to banks + letters of credit


9

Macroeconomic indicators

Inflation USD/RSD in the first 9M of 2010 amounted to 17.06% or 11.38 RSD Inflation EUR/RSD in the first 9M of 2010 amounted to 10.73% or 10.29 RSD Inflation USD/RSD in the first 9M of 2009 amounted to 1.11% or 0.70 RSD Inflation EUR/RSD in the first 9M of 2009 amounted to 4.98% or 4.41 RSD There were no significant fluctuations in the crude oil price in the world market

30

40

50

60

70

80

90

I II III IV V VI VII VIII IX

Urals, USD/bbl

Actual 2009 Actual 2010

60

65

70

75

80

85

I II III IV V VI VII VIII IX

USD/RSD

Actual 2009 Actual 2010


10

Market share

RS Market volume in thousand of tons

In first 9М 2010. the share of NIS on

Serbian Market was 67%, which indicates to increase of +2% versus the same period 2009.

In the first 9 months of 2010, BMB95 and euro-diesel recorded increasing trend versus last year

After the drop in consumption in the first two quarters, the third quarter had increase in consumption, compared to the same quarter last year and also compared to the previous quarter of 2010.

* According to NIS data and assessments

35% 33%

65% 67%

9M '09 9M '10

NIS

Other marketparticipants inRepublic ofSerbia

-3%

2.521 2.447


11

Net profit

(loss)

Net profit (loss) before FX

Net FX costs

Financial indicators

1,7

4,5

7,1

Q1 ‘10 Q2 ‘10 Q3 ‘10

-4,5 -5,1

12,3

Q1 ‘10 Q2 ‘10 Q3 ‘10

13%

-1,3

-10,6

9M ‘09 9M ‘10

728%

-6,2

-9,6

5,2

Q1 ‘10 Q2 ‘10 Q3 ‘10

Increase in USD/RSD exchange rate of 17.1% or +11.4 RSD

Increase in EUR/RSD exchange rate of 10.7% or +10.3 RSD

Increase of net FX costs compared to first 9 months in 2009

Increase of net profit (loss) before FX costs compared to first 9 months in 2009

Increased business efficiency (increase in domestic oil and gas production)

Increase of net profit (loss) compared to first 9 months in 2009

Decrease of FX costs in third quarter

-6,8

2,7

9M ‘09 9M ‘10

+140%

-5,5

13,3

9M ‘09 9M ‘10

+341%


12

EBITDA

Sales

OCF

Financial indicators

2,4

17,2

9M ‘09 9M ‘10

617%

3,2

5,2

8,8

Q1 ‘10 Q2 ‘10 Q3 ‘10

80,9

111,9

9M ‘09 9M ‘10

38%

7,5

14,2

9M ‘09 9M ‘10

89%

27,4

36,0

48,5

Q1 ‘10 Q2 ‘10 Q3 ‘10

-2,9*

5,6

11,5

Q1 ‘10 Q2 ‘10 Q3 ‘10

* Data adjusted in comparison with the ones previously published due to the correction of OCF and ICF (decrease in OCF and increase in ICF for the same amount)

Increase of EBITDA compared to first9М 2009 :

Increased business efficiency (increase in domestic oil and gas production)

Sales increase compared to first 9М 2009 :

Oil derivatives prices in first 9M of 2010 are higher compared to same period last year, due to increase of oil prices on world market and increase in USD exchange rate

Fuel retail price in 2009 were app. 94 RSD per liter, and in 2010 app 114 RSD per liter (increase of app. 22%)

Increase of 3.4% in oil derivatives sales

Increase in OCF compared to first 9М 2009 :

Improved receivables collection

Extended period for crude oil payments

Improved business performance


13

Oil and gas production

Domestic oil production (in thousand tons)

Domestic oil and gas production (in thousand of tons)

482,41

621,77

9M '09 9M '10

+29%

193

205

223

Q1 '10 Q2 '10 Q3 '10

269,5

290,1

320,8

Q1 '10 Q2 '10 Q3 '10

670,12

880,40

9M '09 9M '10

+31%

Domestic oil and gas increase of 31% compared to first 9M 2009:

New system of production using ESP* pumps was implemented on 16 oil wells. Fracturing was preformed on 5 oil wells.

Inactive wells activated

Highly efficient geophysical and technical measurements were made

Gas deposit in the Velebit field was commissioned

Oil well workover at Mokrin-Zapad gas deposit. Medja deposit, that was not in use, has been commissioned

Inactive gas wells in section Central Banat activated


14

Refining

Oil processing per refinery (in thousand tons)

Oil processing including third parties

Oil processing in Novi Sad Refinery was decreased for 3,5% compared to last year, and also records a decrease compared to previous quarter

Operation structure of refineries in Novi Sad and pancevo is not significantly changed

Increase of oil processing volume including third parties for 1% compared to first 9M 2009 :

Increase of oil processing in Q3 compared to Q2 2010 (as needed to build up inventories of products for the expected refinery Pancevo overhaul in October-November 2010)

445,87 492,72

620,16 218,35

215,88

202,13

7,17

Q1 '10 Q2 '10 Q3 '10

Crude oil tollservices forthird parties

Own crude

Imported crude

822

671 709

1,512.19 1,558.75

455,07 636,35

204,88 7,17

9M '09 9M '10

Crude oil tollservices for thirdparties

Own crude

Imported crude

1,4%

2.172 2.202

3%

40%

-96%

8% 10% 5%

92% 90% 95%

Q1 '10 Q2 '10 Q3 '10

RNP

RNS

11% 8%

89% 92%

9M '09 9M '10

RNP

RNS

3,5%

-3,5%


15

Sales and Distribution

Sales structure per oil derivatives (in thousand tons)

Oil derivatives sales (in thousand tons)

Retail – Sales volume for 2010 record decrease only for January and February. In these two months in 2009 sales was above normal levels due to gas crisis, and after sales volume decreased due to sharp increase of excise tax. Sales volume for period March-September 2010 was in line with the results for 2009.

Wholesale – increase in sales was caused by competitive price policy (diesel, euro-diesel and oil fuel)

Export – increase in delivery of oil fuel, diesel and petrol components in order to optimize stocks

Increase of total sales of oil derivatives of 3% compared to first 9М 2009:

*data for Q1 and Q2 are corrected after the verification

109 143 158

341 331

458

35 27

41

76 126

113

Q1 ‘10 Q2 ‘10 Q3 ‘10

Export

Direct deliveryfrom theRefinery

Wholesale

Retail

770

627

554

447 410

1.104 1.124

94 103

241 314

9M '09 9M '10

Export

Direct deliveryfrom the Refinery

Wholesale

Retail

1,951

3%

-8%

2%

30%

9%

1,887

178 188

271

376

439

499

Q1 '10 Q2 '10 Q3 ‘10

Whiteproducts

Black andother products

627

554

770

6%

17%

14%

44% 681 637

1.205 1.314

9M '09 9M '10

Whiteproducts

Black andotherproducts

3%

1.951

+9%

-7%

1.887


16

Structure of bank indebtness

GPN loan (in millions of EUR)

Structure of total debt to banks per currency

Total debt to banks in first 9M 2010 (in millions of USD)

Total indebtedness in first 9M (in millions of USD)

61 61

94

116

31.12.2009 31.03.2010 30.06.2010 30.9.2010

In first 9М 2010. NIS records:

Decrease of total debt to banks for

126 million USD

Decrease of total indebtedness for

letters of credits for 225 million USD

Decrease of total indebtedness

for 351 million USD

201 186 111 52

392 448

443 442

200 191

166 173

31.12.2009 31.03.2010 30.06.2010 30.09.2010

Long-term

Medium-term

Short-term

793 825

720 667

233 214

110 8

793 825

720

667

31.12.2009 31.03.2010 30.06.2010 30.09.2010

Total debt

Letters of credit

1026 1039

830

675

67,11% 72,95% 74,44%

79,32%

32,18% 26,38% 24,75% 19,77%

0,71% 0,67% 0,81% 0,91%

31.12.2009 31.03.2010 30.06.2010 30.09.2010

Other

EUR

USD


17

Investments

Project MHC/DHT – realization of MHC/DHT project commenced at the end of 2009

Ecology – most of ecological projects are approved and are in the realization stage

Projects with direct economic effect – transfer of obligations from 2009 and commencement of setup works on the large number of retail-sale facilities

Projects without direct economic effect – in first 9M of 2010 decrease of 10% compared to same period last year was recorded

Angola – operator’s costs in Angola are lower compared with the costs in 2009

Other – decrease due to the fact that smaller portion of obligations for the rest of projects were transferred to 2010

Changes in CAPEX per investment projects in first 9М 2010 compared to same period in 2009:

CAPEX from GPN loan and CAPEX from NIS OCF in first 9 months 2010 (in billions of RSD)

CAPEX per investment projects (in billions of RSD)

*in billions of RSD

5,09

2,82

CAPEX from GPN loan CAPEX from NIS OCF

Sources of investment funding 9М ‘09 9М ’10

CAPEX from GPN loan 0,90 5,09

Ecology 0,87 1,06

MHC/DHT 0,03 4,03

CAPEX from OCF (NIS funds) 2,25 2,82

Ecology 0,00 0,00

Angola 0,69 0,45

Projects with direct economic effect 0,17 1,17

Projects without direct economic

effects 1,05 0,94

Other 0,35 0,25

Total: 3,15 7,91 0,03

4,03

0,87

1,06

0,69

0,45

0,17

1,17

1,05

0,94

0,35

0,25

9M 09 9M 10

Other

Project without directeconomic effectProject with direct economiceffectAngola

Ecology

MHC/DHT

3,15

7,91

+22%

x126

x7

-10%

-35%

-27%

+151%


18

Stock exchange trading

Trading on Belgrade Stock Exchange in the period August 30th – September 30th, 2010

Last price 461 RSD

High 550 RSD

Low 442 RSD

Total turnover 359,961,200 RSD

Total volume 761,498 shares

Total number of transactions 122,651

Market cap as of September 30th, 2010 75,170,844,400.00 RSD

EPS 16,42 RSD

P/E 28,08

Book value as of September 30th, 2010 213,77 RSD

P/BV 2,16

18

• August 23rd, 2010 – Belgrade Stock Exchange made the decision on the admission of NIS a.d., Novi Sad shares to listing A - Prime Market

• August 30th, 2010 – First trading day for NIS shares

400

420

440

460

480

500

520

540

560

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

110.000

120.000

30

.08

.201

0.

31

.08

.201

0.

01

.09

.201

0.

02

.09

.201

0.

03

.09

.201

0.

06

.09

.201

0.

07

.09

.201

0.

08

.09

.201

0.

09

.09

.201

0.

10

.09

.201

0.

13

.09

.201

0.

14

.09

.201

0.

15

.09

.201

0.

16

.09

.201

0.

17

.09

.201

0.

20

.09

.201

0.

21

.09

.201

0.

22

.09

.201

0.

23

.09

.201

0.

24

.09

.201

0.

27

.09

.201

0.

28

.09

.201

0.

29

.09

.201

0.

30

.09

.201

0.

Volume

Price and volume movements – Candlestick chart

Price


19

Dynamics of share capital and book value per share

Billion

RSD

RSD per share

+32,3 +27,76

+22,6

+34,9

-4,5 -0,04

-5,1 -0,06

+12,3

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

Capital as of12/31/2009

Net loss Reserveschanges






197,98

170,10

138,54

213,77


20

Naftna Industrija Srbije j.s.c. Novi Sad Investor Relations Sector Narodnog fronta 12 21000 Novi Sad, Serbia e-mail: [email protected]

mailto:[email protected]

presentation for investors and shareholders for the period...

Documents