2011 Capital Markets Day

Key Growth Drivers

Anton KudryashovChief Executive OfficerChief Executive Officer

Russian TV Ad Market in a Global ContextRussian TV Ad Market in a Global Context

14%18%18.0%

14%

TV ad market CAGR

6 0%

8.0%18.0%Developing markets grow much faster than

0.2%

11% 10%

3%6.0%

12.0%

3%

11%

0.2%2.0%

4.0%

6.0%

8.0%developed markets

Russian TV ad market growth outpaces emerging markets growth

0.0%CAGR 2005-2011 CAGR 2011-2013

Developed markets Emerging markets Russia

R 2005-2011

markets E

0.0%g g g

CAGR 2005-2011 CAGR 2011-2013

Developed markets Emerging markets Russia

3030 56.5

USD billions

60

USD billions

62.565

Russia will become the 5th largest TV ad market in 2013 Russia entered the top-9 TV ad markets in 2010

19.014.7 13.2

7.1 6.7 5.9 5.5 4.9 4.410

20

30

18.4

10.1 9.46.2 5.4 5.1 4.6 4.2 3 5

10

20

30#1 in Europe

00

US

A

Japa

n

Chi

na

Bra

zil

Rus

sia

Italy

Ger

man

y

UK

Fran

ce

Mex

ico

06 4.2 3.5

0

US

A

Japa

n

Bra

zil

Chi

na

Italy

Ger

man

y

UK

Fran

ce

Rus

sia

Mex

ico

GG

Sources: ZenithOptimedia, Company’s estimates

1

TV Ad Market Growth is AcceleratingTV Ad Market Growth is Accelerating

Ad spend as % of GDP Free-to-Air TV Ad Market Growth

2 93.03.2

Ad spend as % of GDP Free-to-Air TV Ad Market Growth

%

12

USD billions

2.4

1.9 1.7

1.1

0 6 0 6

1.7

0 60 70.80 8

1.41.6

2.9

0 7

1.6

2.4

3.2

4.45.5

3.54.2

3

6

9

0.60.3

0.60.60.70.80.5

0.20.50.50.7

0.0

0.8

Ser

bia

nia

&

egov

ina

huan

ia

oven

ia

Geo

rgia

Med

ian

Rus

sia

Pol

and

oldo

va

Ukr

aine

Bel

arus

0

3

2007 2008 2009 2010 … 2015F

Bos

nH

erze Li

th Sl G

CE

E M R P M U B

2008 (pre-crisis) 2010

Sources: ZenithOptimedia, Company’s estimates

2

CTC Growth DriversCTC Growth Drivers

Focus on ratingsFocus on ratings

Proposed new target audience 14-44 in 2012

Stable 6-54 share

Audience share dynamics

Audience share, %

14-44 share growth

Investments in programming12.0%11.9%

12.6%

12.0%

14.0%

All All

13.0 – 14.0%

~

Power ratio will remain high

Better alignment with advertisers’ demand8.0%

10.0%

2010 2015F

All 6-54

All 14-44

All 14-44

All 6-54

Increase of technical penetration2010 2015F

3

Domashny Growth DriversDomashny Growth Drivers

Crisp positioning and identity

Investments in programmingF25-60 Audience share, %

Audience share dynamics

Investments in programming

Increase of technical penetration

Increase of power ratio driven by:3.1%

4.5%

4.0%

6.0%4.0 - 5.0%

Audience share growth

Decrease of average viewers’ age from 48 to 430.0%

2.0%

2010 2015F2010 2015F

4

DTV Growth DriversDTV Growth Drivers

Optimal programming mix is identified

Investments in programming25-54 Audience share, %

Audience share dynamics

Intensified marketing efforts

Increase of technical penetration2.1%

3.5%

2 0%

4.0% 3.0 - 4.0%

Increase of power ratio driven by:

Audience share growth0.0%

2.0%

2010 2015F Decrease of average viewers’ age from 46 to 422010 2015F

5

Further Footprint Expansion in RussiaFurther Footprint Expansion in Russia

CTC Domashny DTV

86.1%

81.6%93.7%95.6%

72 5%

80.1%

Technical penetration Technical penetration Technical penetration

~ 96% ~ 86% ~ 80%

72.5%

2010 20152010 2015 2010 2015

Plan to acquire 40 regional stations within the next 5 years for total amount of $90–100 mln

6

InIn--house Production: An Important Part of Our Channels’ Successhouse Production: An Important Part of Our Channels’ Success

We are focusing on developing own production…

Tailor-made content is the cornerstone of CTC’s iprogramming

No market for ready-to-use content

Critical competitive factorsCTC average

prime time audience shareSecured access to branded content (prime time)

Maintain control over programming costs & processes

Branded content monetized via different media

audience share in-house

produced content 13.1% Margosha series (adaptation of LaLola format)

Branded content monetized via different media segments and territories

… and long-term relationship with 3rd party producers

vs.

CTC averageprime time

Stable and predictable pricing

Options for further episodes

Right of first look for new products

prime time audience share

12.6%

g p

Ensure high ratings of acquired content(bonus-rating system)

Acquisition of full rightsDaddy’s Girls (original sitcom)

7

Successful Performance of Channel 31 in KazakhstanSuccessful Performance of Channel 31 in Kazakhstan

P iti d k t h d i Si ifi t i t f OIBDA i i 2008Positive revenue and market share dynamics Significant improvement of OIBDA margin since 2008

USD millions USD millions

10 8%

13.5%20.0 15.0% 10.4%12.2%3.0 14.0%

10.8%

6.2%

5 0

10.0

15.0

5.0%

10.0%

-0.5

1.0 1.5

1 0

0.0

1.0

2.0

-1.0%

4.0%

9.0%

10.5 9.3 11.90.0

5.0

2008 2009 20100.0%

Revenue Market share

-4.3%-2.0

-1.0

2008 2009 2010-6.0%

OIBDA OIBDA margin

Growing market shares & profitability due toGrowing market shares & profitability due toGrowing market shares & profitability due to Growing market shares & profitability due to strengthening programming grid & cost optimization strengthening programming grid & cost optimization

8

Opportunities for CIS ExpansionOpportunities for CIS Expansion

Promising TV advertising market

Ukraine

2nd largest in the CIS ($374 mln in 2010)

15-20% CAGR expected in 2010-2015

Cultural fit

Promising TV advertising market

$64 mln in 2010

BelarusExpected to double during next 5 years

Reasonable asset prices

Cultural fitCultural fit

9

CTCCTC--International: Increasing CTC Media’s International Brand Awareness & ValueInternational: Increasing CTC Media’s International Brand Awareness & Value

Present

Number of subscribers

Subscribers, thousands

1,100

900

1,200

150

2001,200

9002011

33

300

600

3350

100

330

2010 … 2015F0

2010 2012

10

New Media: We Are Wherever Our Viewers AreNew Media: We Are Wherever Our Viewers Are

6069

7980

100

20:51

23:4325%

30%

26:00

30:00

Up to 80 mln Internet users by 2014 More time with our viewers

46 51

0

20

40

60

18:5920:26

18:5920:51

5%

10%

15%

20%

10 00

14:00

18:00

22:00

02010 2011 2012 2013 2014

Internet households in RussiaInternet household penetration in Russia

0%

5%

15-24 25-34 35-44 45-54 55+6:00

10:00

Reach,% Time spent, hours

100120

Increasing adoption of connected TV Mobile internet penetration growth

350035004000

3143

71

100

40

60

80

100

1600

2500

3000

100015002000250030003500

2231

0

20

40

2010 2011 2012 2013 2014Mobile Internet monthly audience mln people

0500

1000

2010 2011 2012 2013

IPTV households in Russia, thousands Mobile Internet monthly audience, mln people

Sources: PwC Global Media Outlook, GFK, FOM, J’son Partners, ComScore Digital Europe 2010, Company’s estimates

IPTV households in Russia, thousandsSmart TV's in Russia, thousands

11

Digitalization Digitalization –– We are Preparing to Enter the Second Multiplex in 2017We are Preparing to Enter the Second Multiplex in 2017--20192019

First multiplex Second multiplex Third multiplex

Launch in 2015-2016

Includes 8 federal channels and 1 regional channel

Launch estimated after 2017

9 channel slots are available

Launch estimated after 2020

DTV is likely to participateand 1 regional channel

CTC Media channels are not included

18 channels applied

CTC and Domashny are likely to participatelikely to participate

Preparing for digitalization by modernizing broadcasting equipment &Preparing for digitalization by modernizing broadcasting equipment &digitalizing content librarydigitalizing content library

12

FullyFully--Integrated Broadcaster with Clear Strategic ObjectivesIntegrated Broadcaster with Clear Strategic Objectives

CTC Channel

Domashny and DTVN di and DTV ChannelsNew media

In-housecontent

productionCIS

operations

CTC-International

In-housesales

function

13