HMS Group Presentation for Morgan Stanley EMEA conference
April 2011
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Disclaimer
2
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This document is confidential and has been prepared by HMS Hydraulic Machines & Systems Group plc (the “Company”) and it subsidiaries and associates (the "Group") solely for use at
the presentation and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose.
This presentation does not constitute or form part of and should not be construed as an advertisement of securities or a securities prospectus, an offer or invitation to sell or issue or the
solicitation of an offer to buy or acquire or subscribe for securities of the Company or the Group or any depositary receipts representing such securities in any jurisdiction or an invitation or
inducement to engage in investment activity in relation thereto.
No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
No representation, warranty or undertaking, express or implied, is given by or on behalf of the Company or any of its directors, officers, employees, shareholders, affiliates, advisers,
representatives or any other person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or
any other material discussed at the presentation. The information contained in this presentation does not purport to be comprehensive and has not been independently verified. The
Company is under no obligation to update or keep current the information contained in this presentation and any opinions expressed herein is subject to material change without notice.
Neither the Company nor any of its directors, officers, employees, shareholders, affiliates, advisors, representatives or any other person shall have any liability whatsoever (in negligence or
otherwise) for any loss howsoever arising from any use of this presentation or any other material discussed at the presentation or their contents or otherwise arising in connection with the
presentation.
This presentation includes statements that are, or may be deemed to be, “forward-looking statements”, with respect to the financial condition, results, operations and businesses of the
Company. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as
”anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal” believe”, or other words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond the Company's control. As a
result, the Company‟s actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements. The Company assumes no
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This presentation is directed only at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act
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For Russian law purposes, the securities mentioned in this presentation (the "Securities") represent securities of foreign issuers. It is not permitted to place or publicly circulate the Securities
on the territory of the Russian Federation at present or for the benefit of persons who are not "qualified investors" (in the meaning of the Russian securities laws). No prospectus for the issue
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intended to advertise or facilitate the offer of the Securities in the territory of the Russian Federation. This presentation does not represent an offer to acquire the Securities or an invitation to
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The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. Some of the information is still in draft form
and neither the Company nor any other party is under any duty to update or inform recipients of this presentation of any changes to such information or opinions. In particular, it should be
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information and estimates.
** NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,
JAPAN OR THE RUSSIAN FEDERATION **
15% 58%
12.8% 14.5% 13.9% 11.7%
2008 2009 9m 2009 9m 2010 2004 2008
24%
11.7% 23.5%
HMS at a glance
The leading pump manufacturer and provider of flow
control solutions and related services to the oil and
gas, nuclear and thermal power and water sectors in
Russia and the CIS
Blue-chip customer base
Advanced R&D and significant experience in pump
development
Three complementary business segments
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65%
2008 2009 9m 2009 9m 2010
Financial Highlights (RUR bn)
5%
20.6
9.5
Sources: Audited IFRS financials for 2007-2009, reviewed IFRS financials for 9m 2010, Company data, Frost & Sullivan report 1 Research, engineering and design services for the upstream oil industry 2 Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue
(*) Refer to note (*) on page 21 for a discussion of the Group‟s methodology for the calculation of backlog and of the limitations associated with the calculation of backlog
Backlog estimates (*) (RUR bn)
31 Dec 2009
Business segment Market share (core) by
revenues
Industrial pumps 41%
Modular equipment 35%
Engineering, procurement and construction (EPC)
10%1 30 Sep 2010
117%
3
2004 2008
47%
Revenue CAGR
Adjusted EBITDA CAGR / EBITDA margin ²
before crisis crisis after crisis
History of growth: Industry consolidation From pumps to integrated solutions
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2007–2008
2003
2009–Today
Oil and gas production Oil transportation Water utilities
2004–2006
1993–2002
4
EPC
Modular Equipment
Design
and Manufacturing
Pump Design and
Manufacturing Pump Trading
Construction
Modular Equipment
Design
and Manufacturing
Pump Design and
Manufacturing Pump Trading
Modular Equipment
Design
and Manufacturing
Pump Design and
Manufacturing Pump Trading
Pump Design and
Manufacturing Pump Trading
Pump Trading
Power generation
Strong management team
Key senior managers
HMS’ founders remain shareholders and continue to be actively involved in managing the business
Founders / Shareholders
The management team…
…is comprised of professionals with significant experience in
pump and oil and gas industries
…includes founders, who have led HMS since its inception
…has a strong commitment to the business
Anatoliy Nazarov
Head of Modular
Equipment
Industry experience:
More than 35 years
Years with HMS:
4 years
Kirill Molchanov
First Deputy CEO
Industry experience:
17 years
Years with HMS:
17 years
Andrey Nasledyshev
Deputy CEO
Industry experience:
11 years
Years with HMS:
6 years
Nikolay Yamburenko
Head of Industrial Pumps
Industry experience:
32 years
Years with HMS:
7 years
Igor Tverdokhleb
Head of R&D
Industry experience:
24 years
Years with HMS:
6 years
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Artem Molchanov
CEO
Industry experience:
17 years
Years with HMS:
17 years
HMS Group shareholder structure
5
Source: Company data
Free-float37.25%
V. Lukianenko24.00%
Other managers
21.42%
G. Tsoy17.33%
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6
Attractive industry fundamentals 1
The leading provider of flow
control solutions in Russia 2
Advanced R&D capabilities 3
Diversified and well-established
customer base 4
Operational and product quality
excellence 5
Strong management team 7
History of resilient financial
growth and strong backlog 6
Russian energy and utilities infrastructure investments (RUR bn)
Significant increase in capital spending in core end markets drives growth of all HMS’ businesses
Comments
Infrastructure modernization and expansion
– Large portion of Russian infrastructure is outdated and at
or near end of useful life
– Economic growth driving demand for new infrastructure
– Very large expected spending by public and private sectors
in energy generation, public utilities and oil and gas
industries
State development programs
– Large on-going projects in the public utilities and electricity
generation with ongoing impact until 2020-30
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1,586
743303
489
1,011
311
1,103
3,340
2009 2015E
Water utilities
Thermal power generation
Nuclear power generation
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CAGR
’09-’15
21.7%
21.7%
16.1%
810
6161,226
285230
540
2,576
1,131
2009 2015E
Oil refining and
petrochemicals
Oil pipelines
Oil exploration
and extraction
CAGR
’09-’15
15.3%
19.0%
12.2%
Russian oil sector investments (RUR bn)
Russian pumps market history and forecast1 (RUR bn)
Russian modular equipment market history and forecast2 - HMS core segments (RUR bn)
EPC market history and forecast3- HMS core segments (RUR bn)
79
224
2009 2015E
22
10
2009 2015E
Source: Frost & Sullivan report 1 Includes pumps for water injection, oil refining and petrochemicals, oil pipelines, energy generation (thermal and nuclear (excluding MCP)), water utilities pumps, household vibration
pumps, as well as integrated solutions and aftermarket 2 Includes pump stations, automated group metering units, associated gas processing and transport units 3 Includes oil field infrastructure construction, oil and gas transportation, construction and engineering, research and design services for oil and gas industry (upstream)
Attractive industry fundamentals
7
CAGR 18.8% CAGR 14.0% 511
231
2009 2015E
CAGR 14.1%
1
Source: Frost & Sullivan report Source: Frost & Sullivan report
8
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North
Source: Company data
► ► ► ►
►
► ► ► ►
►
►
► ►
Oil product storage
Oil refinery Main oil pipeline
Oil field
Filling station
► ►
Oil and gas sector
Filling station
Source: Frost & Sullivan report, Transneft website (www.transneft.ru)
Novorossiysk
Moscow
Unecha
Primorsk
Kozmino
Skovorodino
Verkhnechonskoye
Tengiz
Timano-Pechora
basin
Caspian Pipeline Consortium
expansion
(35 MMt, 1,510 km)
Baltic Pipeline
System-II
(50 MMt, 1,000 km)
ESPO-I and ESPO-I
capacity expansion
(50 MMt, 2,694 km)
Russia
ESPO-II and ESPO-II
capacity expansion
(47 MMt, 2,046 km)
Talakanskoye
Purpe-Samotlor (25
MMt, 430 km)
Vankor
Salymskoye
Samotlor
Nizhnevartovsk
Priobskoye
Purpe
Prirazlomnoye
Tyamkinskoye
Russkoye
Taishet
Zapolyarnoye-Purpe
(45 MMt, 536 km)
Syzran
Tikhoretsk-Tuapse 2
(12 MMt, 295 km)
Haryaga Yuzhny
Khylchuyu
Haryaga-Yuzhny
Khylchuyu
(8 MMt, 160 km)
Yurubcheno-
Tokhomskoe
Yurubcheno-
Tokhomskoe-Taishet
(18 MMt, 600 km)
Tuapse
Tikhoretsk
Komsomolsky NPZ
-port De-Kastry
(9 MMt, 313 km)
Oil pipeline projects
Mature oil producing regions
Underdeveloped oil producing regions
Developing oil fields
HMS participation confirmed
Oil products pipeline projects
Komsomolsky
NPZ
De-Kastri
“Yug” (South)
(9 MMt, 1,465 km)
Komsomolsky NPZ
-De-Kastry
(n.d., 300 km)
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New milestone projects Oil & gas production and oil transportation
Zapolyarnoye
9
South
> 3 bn tons of oil reserves to be
developed in the next several
years
Oil production development
> 10,000 km of pipelines to be constructed or
replaced
> 140 of pump stations to be constructed or
reconstructed
> 550 reservoirs with total capacity of almost
10 mln m3 to be reconstructed
Transneft investment program 2010-2017
Central Asia
Rapidly growing sales of modular equipment to oil
and gas sector in Kazakhstan
Iraq
Significant installed base of HMS pumps from Soviet
and post Soviet periods
Currently undertaking projects for Oil Ministry and BP
Export markets
1
26 oil refineries are to be
reconstructed
Oil refining development
10
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North
Source: Company data
Nuclear power generation
Reactor hall
Turbine hall
Feed pumps
Condensate pumps
Pumps for security systems
Pumps for lubrication systems
Pumps for auxiliary systems
TGC-13 (Enisei) Investment 2010-2015:
RUR 10 bn
TGC-9 Investment 2010-2015:
RUR 28 bn
TGC-8 Investment 2010-2015:
RUR 18 bn
TGC-7 (Volga) Investment 2010-2015:
RUR 11 bn
TGC-6 Investment 2010-2015:
RUR 16 bn
TGC-5 Investment 2010-2015:
RUR 14 bn
TGC-3 (Mosenergo) Investment 2010-2015:
RUR 39 bn
TGC-14 Investment 2010-2015:
RUR 8 bn TGC-12 (Kuzbas) Investment 2010-2015:
RUR 21 bn
TGC-11 Investment 2010-2015:
RUR 26 bn
TGC-10 (Fortum) Investment 2010-2015:
RUR 47 bn
TGC-4 Investment 2010-2015:
RUR 21 bn
TGC-2 Investment 2010-2015:
RUR 28 bn
TGC-1 Investment 2010-2015:
RUR 73 bn
Source: Frost & Sullivan
Nuclear Power Plants HMS participation confirmed Projects under construction Planned projects
Leningradskaya-II
Kalininskaya
Rostovskaya
Novovoronezhskaya-II
Beloyarskaya
Kurskaya Smolenskaya
Kolskaya
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New milestone projects Thermal and nuclear power utilities
11
South 1
Rostovskaya
Number of power units to be
constructed or reconstructed
Additional generation
capacity, MW
Investments
2010-2015 (RUR bn)
TGC n/a 13,627 359
OGC n/a 11,962 467
Nuclear plants
(Russia) 41 21,500 808
Nuclear plants
(Foreign) 17 17,880 1,940
Summary of total investments in power generating capacity
Name Country No of power units /
Unit capacity (MW)
Investments
2010-2015 (RUR bn)
Belene NPP Bulgaria 1 / 1,000 128
Tianwan NPP China 2 / 1,000 86
Kudankulam NPP India 2 / 1,000 65
Mokhovtse NPP Slovakia 2 / 440 53
Akkuyu NPP Turkey 4 / 1,200 27
Other projects
Ukraine 2 / 1,200
1,581 Belarus 2 / 1,200
Armenia 1 / 1,200
Vietnam 1 / 1,200
Selected nuclear power plant projects abroad using Russian
technology
12
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North
Source: Company data
Reuse of treated wastewater
Sewage treatment
Borehole water intake
Surface water intake
Water treatment
Water conditioning
Irrigation
Release of wastewater
►
►
► ► ►
► ► ► ► ►
► Water industry
Water supply to industrial enterprises
Urban water supply
►
Water industry
Kirov
Perm
Barnaul
Petrozavodsk
Vladimir
Rostov-on-Don
Azov
Kaluga
Tver
Orenburg
Omsk
Tyumen Krasnodar
393471
606724
844
1,011
311372295
2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Source: Frost & Sullivan report, media sources 1 Figures have been taken from various media sources; they are not final and may change in the
future
2 The “Clean Water” program is a nationwide large investment plan aimed at improving drinking water quality.
Capex in water projects, RUR bn (2007–2015)
Source: Frost & Sullivan report
Large-scale State Programmes Total Capex 2010-
2015 (RUR bn) Capex period
Federal Programme "Zhilische" (public
housing)
620 2011-2015
Regional programmes "Clean Water“2
(unconfirmed budget)
520 2011-2017
Water Strategy of Russian Federation until
2020 (excl. "Clean Water")
351 2009-2020
Reconstruction of Grozny utilities 105 2010-2011
St. Petersburg Water Utilities Development
Programme
103 2010-2025
JSC RKS JSC Evraziysky JSC Rosvodokanal
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New milestone projects Water utilities
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Central Asia
Recently undertook turnkey construction of
pumping stations in Turkmenistan and Uzbekistan
Presence in water markets of Tajikistan and
Kyrgyzstan
Offices in Ashkhabad (Turkmenistan) and Tashkent
(Uzbekistan)
South 1
Moscow
Kaliningrad
St. Petersburg
Volgograd Kazan
N.Novgorod
Yaroslavl
Ekaterinburg
Sochi
Samara
FIFA World Cup 2018 Investment 2010-2018: RUR 1.6 trn1
Olympic Games in Sochi in 2014 Investment 2010-2014: RUR 930 bn1
Asia-Pacific Economic Cooperation
Summit in Vladivostok in 2012 Investment 2010-2012: RUR 660 bn1
Vladivostok
Export markets
Leading integrated water utilities
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Significant upside from aftermarket
14
1
Water injection pumps
HMS supplies
87%
Other 13%
Total number of pumps: 4,500
Oil trunk pipeline pumps1
HMS supplies
98%
Other 2%
Total number of pumps: 1,044
Note: In red are highlighted the pump‟s components that
suffer the greatest degree of deterioration during operation
of the pump and which can be replaced in order to extend
the pump‟s operation life
Source: Company data, Frost & Sullivan
Installed base Key drivers for aftermarket services growth
Very large installed base requires repair and maintenance services
Large portion of installed base is outdated, creating opportunity for upgrades as well as replacement
Energy represents 80% of operating cost for a typical pump
Trend for modernization of equipment to increase energy efficiency
Most repair and maintenance historically largely in-house
HMS has contracts with companies including
– TNK-BP (full outsourcing of maintenance of water injection pumps at the Samotlor field)
– Transneft
Exceptional installed
base
Energy efficiency
Outsourcing trend
Example of pump servicing
Source: Frost & Sullivan, Company data 1 In Transneft‟s pipeline system
The leading provider of flow control solutions in Russia
Comments
Source: Frost & Sullivan report (for 2009) Source: Frost & Sullivan report (for 2009)
HMS Other
Leading player in core business segments:
– Almost half of market share in core pump market segments
with no close local or international competitors
– Strong position in modular equipment
– Leading independent player in oil and gas field project
design
Leading market positions in core segments
Source: Frost & Sullivan report (for 2009) 1 HMS‟ subsidiary GTNG – a leading independent Russian oil and gas R&D center
… and modular equipment Leading market share in pumps …
Leading independent player in oil and gas field project design
65%
59%
54%
41%
41%
35%
41%
46%
59%
59%
71%
73%
80%
41%
20%
27%
29%
59%
1.1
1.9
0.8
1.1
1.0
9.0
1.0
1.1
1.0
Total HM S' core segments
Submersible water well pumps
Water injection pumps
Oil pipeline pumps
Water utilities pumps
Thermal power generation pumps
Nuclear power generation pumps
Oil refining and petrochemical pumps
Household vibration pumps
56%
30%
7%
44%
70%
93%
35% 65%
3.2
2.2
4.6
10.0Total HM S' core
segments
Pump stations
Automated group
metering units
Associated gas
processing and
transport units
Market size
RUR bn HMS Other
Total market size:
RUR 19.1 bn
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2
Market size
RUR bn
HMS1, 10%
Other, 31%
SurgutNIPIneft, 21%
Rosneft-NTC, 12%
UfaNIPIneft, 7% TomskNIPIneft, 7%
Giprovostokneft, 7%
NizhnevartovskNIPIneft, 5%
Very strong in-house R&D and significant experience
in pump development
– 5 in-house R&D facilities in Russia and the CIS,
centralized research coordination
Unique testing facility (one of the largest in the
former Soviet Union and globally) for all types of
large specialized pumps for nuclear power plants
and oil transportation
– Current facility allows to test pumps up to 8MW
in power; new facility for pumps up to 14MW
under construction
Deep integration with clients‟ R&D
– HMS‟ R&D works closely with clients‟ R&D
divisions in developing pre-tender
documentation and helps clients adopt new
design solutions and technical regulations
– Increases the likelihood of the use of HMS
equipment in projects
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Pump design and working mode modeling1
1 Using ANSYS CFX, which is a high-performance, general purpose computational fluid dynamics
(CFD) and flow modeling software used to solve wide-ranging fluid flow problems
Top right picture: Different colors of lines in a stream depict different velocity of parts of the stream. A
modeler‟s task is to equalize velocities in the flow to ensure the most optimal operation of a pump
Advanced R&D capabilities: Pumps
16
3
Only a few global pump manufacturers have comparable R&D capabilities
Tyumen
West Siberia province: Oil & gas field map
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Advanced R&D capabilities: Project design
Project design capabilities a major competitive advantage in provision of integrated solutions
Recently acquired Giprotyumenneftegaz (GTNG),
leading Russian R&D center specializing in design of
on-surface (as opposed to sub-surface) facilities for
oil and gas fields
– Designed over 200 oil and gas condensate
fields in Russia including many of the largest
(e.g. Samotlor, Mamontovskoye, Priobskoye)
Significant R&D resources for design of water utilities
projects (RVKP)
3D design and real view of oil preparation facility
Selected oil and gas clients
17
Oil field designed by
GTNG
Other
3
Pre-tender project
preparation
(up to 24 months)
Design of large-scale
projects, including
pipelines, water utilities
and O&G fields
Frequent co-operation
with technical teams of
potential clients on
development of tender
documentation
Limited competition in
customized pumps
Key decision factors:
– Local engineering
expertise
– Timely execution
Competition in standard
pumps driven by:
– Historical relationship
– Quality
– Price
Tender, pricing
and contract
negotiation
(1–3 months)
Local engineering
expertise is one of the
most important factors for
clients
Raw materials to start
production are generally
financed from customers‟
prepayments
Design and
production
(1–24 months)
Timely delivery,
installation and testing are
crucial
Installation services
accounts for significant
part of overall revenue
from a contract
Delivery and
installation
(1 month)
Spare parts
Maintenance
Modernization (after 5-15
years of operation)
After market
services
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Modernization
Reconstruction
Replacement
Pre-tender preparation/aftermarket support are crucial for establishing/maintaining strong relationships with clients
HMS‟ ability to participate in pre-tender preparation stage creates unique competitive advantage
18
Advanced R&D capabilities: Unique business model
3
Diversified and well-established customer base
Source: Company data
Premium customer base, which requires integrated solutions
Selected customers by industries in 2007-2010
Examples of customers for integrated solutions
Client Pumps Modular equipment EPC
Rosneft
TNK-BP
Transneft
SurgutNG
LUKOIL
Gazprom
Gazprom Neft
Salym Petroleum
Oil and gas
Power
Infrastructure
and water
Turkmenistan
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4
Sales breakdown (9m 2009-2010)
Source: Company data, audited 2007-2009 IFRS financials
6,456 7,076
954736451970537
1,037580
2,597
997
3,741
9m 2009 9m 2010
Other TNK-BP Gazpromneft OrionStroy Transneft Rosneft
9,975
16,158
Operational and product quality excellence
20
Plants are certified in accordance with
ISO:9001:2008
Products are compliant with API 610 standard
Modern software systems for R&D and project
management
– SolidWorks, ANSYS CFX, Bentley,
Primavera
Equipment from well-established foreign producers
for critical manufacturing processes
– Skoda, Schiess, Doosan, Demag, Schenk,
Sodik, Ibarmia and other
HMS‟ products include high-precision, safety-
critical equipment for hazardous facilities (nuclear
plants, refineries, pipelines)
HMS has a strong focus on operational excellence and manufactures top quality products
Submersible water well pumps HMS Grundfos
Model 3ЭЦВ6-10-110 SP17-11
Flow rate, m3/h 10 10
Head, m 110 110
Efficiency ratio, % 57.0-59.2 53.9-58.3
Model 3ЭЦВ6-25-100 SP30-12
Flow rate, m3/h 25 25
Head, m 100 100
Efficiency ratio, % 59.8-62.1 57.4-61.7
Comparative analysis examples
Water utilities pumps HMS KSB
Model 1Д315-75 Omega 100-250A
Flow rate, m3/h 315 315
Head, m 75 75
Efficiency ratio, % 83.0 82.6
Weight, kg 190 210
Source: The Russian Association of Pump Manufacturers
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Skoda Ibarmia Schiess Demag
5
8.0 9.2
1.1 1.1 0.4
10.3 9.5
20.6
31 Dec 2009 30 Sep 2010
Other Nuclear pumps Oil transportation pumps
3.0
14.0 14.8
9.8
16.2
0.7 1.6 1.9 1.4 2.3
23.5%
11.7% 12.8%
14.5% 13.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0.0
5.0
10.0
15.0
20.0
2004 2008 2009 9 m 09 9m 10
Revenue EBITDA adj. EBTDA margin
History of resilient financial growth and strong backlog
Backlog estimates (*) (RUR bn)
Comments
Revenue, EBITDA1 (RUR bn) and EBITDA1 margin (%)
Source: Audited IFRS financials for 2007-2009, reviewed HMS and GTNG IFRS financials for 9m 2010, Company data 1 Adjusted EBITDA
(*) HMS estimates backlog according to its own methodology, which may differ materially from the methodology of other companies in the industry. The amount of backlog at any reporting date is estimated to be the amount of backlog as at
the preceding backlog reporting date, plus new or additional customer orders booked during the reporting period, less amounts of contract value booked as revenue under Russian GAAP on an unconsolidated basis under the relevant
contracts, plus or minus adjustments made in the judgment of HMS' management, including adjustments to reflect amendment, expiry or termination of contracts, cancellation of orders, changes in price terms under contract or orders
factors affecting the amount of potential revenue which HMS may be recognised under such contracts and other adjustments for certain large contracts based on IFRS revenue recognition principles.
Backlog is not an IFRS concept. HMS backlog estimates are not derived from IFRS figures, are subject to certain adjustments based on management‟s judgment and are not comparable to IFRS figures. When preparing its backlog
estimates, HMS estimates how much revenue has been accrued under Russian GAAP on an unconsolidated basis, subsidiary by subsidiary, and deducts that amount from the contract value. The amount of this accrued revenue under
Russian GAAP on an unconsolidated basis is likely to differ materially from revenue that would be accrued under IFRS on a consolidated basis. HMS does not take into account the potential timing of future performance in calculating
backlog. Backlog estimates are not an indication of potential revenues under IFRS or otherwise, and may differ materially from revenues actually recognized under the relevant contracts in future periods. Figures shown include contracts
obtained through the acquisition of GTNG in 2010; therefore, backlog at 31 December 2009 may not be comparable to backlog at 30 September 2010
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Revenue growth
– 2004-2008 CAGR 47%
– Resilient performance during crisis
– Accelerated growth post-crisis: 65% in 9m 2009-
2010
– Mostly organic growth in recent years
21
6
Comments
Strong backlog (*)
– 117% growth in 9m 2010
117%
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Current trading
Contracts – Winner / Spring
Traditional flow of usual contracts including oil transportation and nuclear pumps for clients‟ current facilities
Transneft contract on a track
M&A Activity
Active discussions with several targets including one in a final stage
1 deal in a stage of finalizing
In addition to current 40% of DKHM, 11% to be bought at the beginning of 2012
HMS is in line with its growth strategy and continues to deliver on promises to its shareholders and investors
Coming Events
2010 results will be released in the second half of April 2011
11-12 April: Morgan Stanley EMEA Conference in London
13-14 April: Morgan Stanley EMEA Conference in New York
31 May – 2 June: VTB Capital Russia Calling in London
09 June: Credit Suisse Oils & Gas Conference in London
28 June: Renaissance Capital Investor Conference in Moscow
Latest Events
Listing on the London Stock Exchange
Repayment of RUR 3.3 bn bank loans
Strengthen position in core markets
including aftermarket and
export opportunities
Take advantage of positive market trends in existing core markets
Organic expansion into attractive market segments
Increase of aftermarket services component to generate higher-margin and recurring revenue
Core export opportunities: water projects in FSU, Rosatom nuclear contracts, O&G in Kazakhstan and Iraq
Higher margin than stand-alone products and services
HMS‟ largest customers increasingly seek to work with manufacturers that can offer integrated and
customized solutions
Creates strong ties to customers, pull-through demand for aftermarket services
Focus on integrated solutions and other highly-engineered
products
Continue to integrate and optimize current production assets and continue to capture synergies between
acquired businesses
Standardization and continuous improvement of operations and business processes
(e.g. financial reporting, R&D, procurement and IT)
Improve operational efficiency
Leverage leading R&D capabilities in order to develop next-generation customized pumps, technological
upgrades and integrated pump systems
Work closely with customers to develop technical policies and standards
Expand research and development
capabilities
Acquire technology and R&D facilities
Pursue acquisition opportunities in high-growth sectors where HMS has limited presence
Seek cost and revenue synergies
Pursue selective, value-enhancing
acquisitions
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Business strategy
Key investment highlights 169.196.203
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Attractive industry fundamentals 1
The leading provider of flow
control solutions in Russia 2
Advanced R&D capabilities 3
Diversified and well-established
customer base 4
Operational and product quality
excellence 5
Strong management team 7
History of resilient financial
growth and strong backlog 6
Appendix (i)
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Livny
Russia
Ukraine
Tomsk
Nizhnevartovsk
Tyumen
Dimitrovgrad
Nizhnevartovskremservice (NRS)
Services: Maintenance and repair of pump
equipment, drilling and other oil and gas
field equipment
HMS Neftemash
Products: Modular equipment for oil and
gas and water industries
Sibneftavtomatika (SibNA)
Products: High-precision measuring
equipment for oil, gas and water flow rates
Tomskgazstroy (TGS)
Services: Trunk oil and gas pipeline and
auxiliary facilities construction
Sibkomplektmontazhnaladka (SKMN)
Services: Design, construction and
commissioning of oil and gas field projects
Rostov Vodokanalproekt (RVKP)
Services: Project design for water utilities
Rostov
Sumy
HMS Household pumps
Products: Household vibration pumps
HMS Group
Headquarters
Promburvod (PBV)
Products: Water well submersible
pumps
Livnynasos (LN)
Products: Water well submersible
pumps
Nasosenergomash (NEM)
Products: Pumps for thermal and nuclear
power generation and oil & gas industry
VNIIAEN
Description: R&D center for pumps used in
nuclear, thermal power generation, oil and
gas industry
Dimitrovgradhimmash (DGHM)
Products: Equipment for oil and chemical
industries and pumps for oil refining
HMS Pumps
Products: Industrial pumps for oil and gas,
power generation
Giprotyumenneftegaz (GTNG)
Services: Project and construction design
of oil and gas facilities
Belarus
Minsk Moscow
Bavleny
Industrial pumps Modular equipment EPC
Source: Company data
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Production assets
26
Competitive environment in Russia 169.196.203
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27 Source: Company data
Customized pumps Standard pumps
Ch
ines
e p
laye
rs
Lack of relevant technologies to produce customized
pumps
No brand names
No established relationships with Russian clients
Ru
ss
ian
pla
ye
rs
Limited R&D
Small scale of operations
Pump manufacturing is a non-core business for most of
players
Products are often not in direct competition with HMS
product line
Key names: NPO Frunze, Votkinsk Plant, Uralhydromash
Not well-positioned in terms of operational
efficiency due to limited scale of operations
Glo
ba
l p
laye
rs
Lack of local engineering expertise
Water pumps: KSB, Grundfos
Oil trunk pumps: Sulzer, Flowserve
Power: Weir, KSB
Not well-positioned in terms of price of products
Oil Pipelines
Surface Oil
Production
Oil Refining and
Petrochemicals
Pumps for Drilling
Subsurface Oil
Production
Submersible Water
Well Pumps
Water (Clean Water Supply and
Dry-pit Sewage)
Water (Wet-pit Sewage and
Waste Water Treatment
Household
Vibration Pumps
Submersible
Household Pumps
Nuclear Power
(excl. MCP)
Main Circulation Pumps for
Nuclear Power Generation
Thermal Power
Pumps for Metallurgy
and Mining
Pumps for
Chemical
Industry
Other
10
15
20
25
30
35
40
45
500 1,500 2,500 3,500 40,000
Fast growing core segments
CAGR ’09-’15
2009 market size (RUR mm)
%
Water and infrastructure Oil and gas Power Non-core
Core segments CAGR2: 26.9%
Total market CAGR: 18.8%
Source: Frost & Sullivan report 1 Including integrated solutions and aftermarket sales
2 CAGR calculated using total market size of core segments
Note: All CAGR figures are based on the Frost & Sullivan report
Attractive industry fundamentals HMS core markets in pump manufacturing1
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Subject of
discussion
HMS representatives
for negotiation A typical client’s hierarchy
Best-in-class sales team reaching clients at all levels, supported by R&D throughout process
Large-scale project
(e.g. ESPO, Vankor,
Rosatom)
Integrated solutions
Cross-selling
Head office
Deputy CEO
Head of Development
Head of Procurement
Head of Construction
Group CEO
Head of Project Management
CEO Deputy CEO Heads of divisions
Heads of R&D units Technical specialists
Large supplies of
customized pumps
and modular
equipment
Large construction
contracts
Cross-selling
Senior management of operating subsidiaries
Operating subsidiaries
Senior sales managers1
R&D engineers
Regular supplies of
pumps and
equipment and
services
Local production units
Middle management of local production units
Technical specialists of local production units
Sales managers1
R&D engineers
Source: Company data 1 Total number of HMS‟ sales force as of 30 September 2010 is approximately 200
Sales and marketing 169.196.203
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Project management
Construction
Load / unload facilities
Metal works
Wall panels Installation and assembly
Tanks / Vessels Tanks / Vessels / Storages
Commissioning Commissioning Commissioning
Supervision Supervision Supervision
Automation Automation Automation
Ventilation Ventilation Ventilation
Safety system Safety system Safety system
Lubrication system
(seal, bearing, coupling)
Lubrication system
(seal, bearing, coupling)
Lubrication system
(seal, bearing, coupling)
Pipework Pipework Pipework
Cabling Cabling Cabling
Pressure gauge Pressure gauge Pressure gauge
Flow meter Flow meter Flow meter
Valves Valves Valves
Frequency inverter Frequency inverter Frequency inverter
Solution / project design Solution / project design Solution / project design
Pump System Design Pump System Design Pump System Design Pump System Design
Skid (baseplate) Skid Skid Skid
Coupling Coupling / Hydraulic coupling Coupling / Hydraulic coupling Coupling / Hydraulic coupling
Electric motorElectric motor / Turbine /
Diesel motor
Electric motor / Turbine /
Diesel motor
Electric motor / Turbine /
Diesel motor
Pump (standard / customized) Pump (standard / customized) Pump (standard / customized) Pump (standard / customized) Pump (standard / customized)
Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps) Pump design (customized pumps)
Integrated solutions
(non-modular)
Integrated solutions
(modular design)Turnkey solution
Bare shaft pump Pump based system
Integrated solutions
Low (< 15%) Medium (15-30%) High (> 30%) High (> 30%) High (> 30%)
Pump / pump unit
EBITDA margin level Source: Frost & Sullivan report
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HMS’ integrated solution services overview
Growing demand for single source solutions
― Optimize supply chain
― Reduced complexity and risk of compatibility issues
― Lower client life-cycle costs
Favor larger manufacturers with stronger R&D
Forecast to grow to up to 45-50% of the size of the
global pump market by 2015 (Frost & Sullivan)
Integrated solutions highlights
30
Growth strategy: Selective acquisitions in key segments
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Source: Company data 1 The Group has an option to acquire 11.0% of the voting shares of its associate, DGKhM, in 2012
Core focus for potential acquisitions Acquisition objectives and rationale
Oil
an
d g
as
Flow control solutions in oil and gas
Pumps for oil and gas, chemical and petrochemical
applications
Modular equipment, tanks and vessels
Dimitrovgradkhimmash (DGKhM)1
Increase of market share
Diversification of product offering
Expansion into new segments
Wa
ter
Pumps for wet-pit sewage applications
Pumps for water utilities, nuclear and thermal power
generation
Modular equipment for wastewater treatment
Diversification of product offering
Strengthening positions in water segment
Increase of market share
Expansion into wastewater treatment segment
Po
we
r
Pumps for nuclear and thermal power generation, marine
applications
Pumps for nuclear and thermal power generation, oil
refining, chemical and petrochemical applications
Pumps for thermal power generation, water utilities
Increase of market share
Diversification of product offering
Oth
er
Pumps for oil refining and metals and mining
Pumps for oil refining, oil transportation, water utilities and
vessels
Pumps for oil transportation, oil refining, metals and mining
Pumps for chemical applications, nuclear power
generation, water utilities
Diversification of product offering
Expansion into new segments
Increase of market share
East Siberia – Pacific Ocean pipeline
32 Source: Company data, Transneft
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North
Number of contracted pumping stations 21
Pumping stations under construction by HMS 12
Pumping stations constructed by Sulzer and
Turbonasos 9
Krasnoyarsk
region
1 2
3 4 5
6 7
8
9
10
11
12 13 14
15
16 17
18
19
20
21 22 23
24 25
26 27
28 29
30 31 32
33 34
35
36
37
38
39
40
41
Buryat
region
Chita
region
RUSSIA
MONGOLIA
Irkutsk Chita
Ust’-Kut
Yakutsk
Skovorodino
Blagoveschensk
Vladivostok
Taishet
Irkutsk
region
Khabarovsk
region
Sea of
Okhotks
CHINA
Purposes of new pumping stations – increasing
capacity 20
For Komsomolsk and Khabarovsk refineries 9
For Primorsk refinery 4
Not information the present time. Supposedly – for
increasing of capacity after launching new branches from
oilfields
7
Total number of pumping stations 41
A pumping station for ESPO-I pipeline
Case study: ESPO-I expansion and ESPO-II contracts
Segment Products / Services Design and
manufacturing
Pumps Design, production and testing of
pumps
HMS and other
suppliers including
Siemens
EPC
Design of integrated pumping
solution
Overall project management
Procurement for supply of
engines, cooling sleeves, valves
and other equipment
Turn-key commissioning
HMS
Key contract highlights
HMS is supplying pump systems (pumps, motors, cooling
sleeves, valves and etc.) to Transneft for ESPO-I and
ESPO-II pipelines
HMS designed unique type of pumps for the project,
constructed a special pump testing facility
HMS prepared target specification for design of hardware
(engines, cooling sleeves, valves and etc.) for European
producers (Siemens, Voit and etc.) as well as coordinated
full cycle procurement
Key features of the project include:
– New approach for oil pumping: Variable motor
revolution, which saves energy
– Integrated approach for project management: HMS
coordinated procurement from multiple suppliers,
R&D process for supplementary equipment and
performed turnkey commissioning
– Construction of a special testing facility
– New approach to modeling: 3D design in ANSYS
CFX was used to model operation of an entire
pumping system
1. Trunk pump
2. Motor
3. Coupling
4. Oil coolers
9. Friction oil pipelines
10. Air cooling unit
11. Antifreeze feed pipes for oil coolers
12. Antifreeze feed pipes for motor coolers
13. Antifreeze air cooling unit
5. Adsorptive dryers
6. Air collectors
7. Compressors
8. Joints
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Source: Company data
33
South
Case study: Vankor contract
34
Segment Products / Services Design and manufacturing
Pumps Water injection pumps
Oil transportation pumps
Other supplementary pumps
HMS
Modular equipment Design and production of "super-modular" blocks
Supplementary equipment HMS
Key contract highlights
HMS designed and supplied 30 "super-modular" blocks to Rosneft for
development of the Vankor field
A "super-modular" block is an approximately five-floor-size
construction containing a range of different types of pumps and
equipment (e.g. water injection pumps, oil transportation pumps,
pumps for oil preparation and separation systems, metering
equipment and etc.)
All the pumps were newly designed for this project by HMS
Currently, the blocks are ready for supply to the Vankor field in
dismantled form and will be assembled at the field
Pumping station at the Vankor oil field
169.196.203
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200.193.188
Case study: Turkmen water contract
HMS signed an agreement with the Ministry of Water Industry of
Turkmenistan for turnkey construction of a pumping station of first
level for pumping water from Amu Darya river to Yilgynagyzsky
channel
This pumping station is part of the plan for new urban development in
Lebapsky velayat and is to replace two existing floating pumping
stations of lesser capacity
Capacity of the station is 35 m3/s, which makes it one of the most
powerful stations in Turkmenistan
HMS designed a new customized pump (3.5 m3/s capacity) with three
changeable rotors adjusted for operating in desert conditions
The contract for construction was signed in December 2008 and the
pumping station will be commissioned in December 2010
Segment Products / Services Design and
manufacturing
Pumps 12 newly developed pumps with capacity of 3.5 m3/s each (incl. 2 standby pumps)
Supplementary pumps HMS
Modular
equipment Pumping station (length 96 meters) and power hall
Other supplementary equipment incl. cables and pipes HMS
EPC
Design of pumping station
General contracting, supervision and overall project management
Procurement and logistics
Turn-key construction
HMS
Key contract highlights Pumping station in Turkmenistan
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Operating costs, debt and working capital
Conservative financial policy
– Net debt1 of RUR 3.2 bn
– Net debt / adjusted EBITDA2 of 1.2x
– Effective interest rate of 10.4%3
– Largely RUR denominated debt to match cash
flows
Organic capital expenditures (RUR mm)
Working capital as % of revenue
19.0%
6.3%
15.8%14.7%
2007 2008 2009 9m 2010 LTM
Debt highlights (as of 30 September 2010)
507
661
212
478
2007 2008 2009 9m 2010
Source: Audited IFRS financials for 2007-2009, reviewed IFRS financials for 9m 2010 1 Calculated as total borrowings plus total finance lease liability less cash and cash equivalents 2 Last twelve months 3 Weighted-average interest rate for RUR-denominated debt
Total
RUR 13,688 mm
Other expenses
6.9%
Depreciation and
amortization
1.9%
Construction and
installation works
of subcontructors
3.2% Cost of
goods sold
12.6% Labour
costs
13.1%
Supplies
and
raw materials
45.2%
Total operating costs (2009)
Other
1.6% General and
administrative
13.3%
Distribution
and
transportation
3.5%
Costs of sales
5,378 5,5346,187
7,860
1,5671,975
1,798
1,817
2,606 1,366
1,721
1,492
972
430
391
257
194
670768
545
471211 259575
10,80710,773
11,164
12,300
2007 2008 2009 9m 2010
Other expenses
Depreciation and amortization
Construction and installation w orks of subcontractors
Cost of goods sold
Labour costs
Supplies and raw materials
Cost structure
Cost of sales breakdown (RUR mm)
Main components of raw materials and supplies are ferrous metals
Low currency exposure as most of suppliers are domestic
Natural hedging of commodity price and currency risks:
― For long-term contracts: by fixing supplier prices and making
advance payments
― For short-term contracts: by passing price fluctuations on to
clients through price adjustments
High cost of goods sold in 2007 explained by a one-off resale contract
2008-2009 COGs growth due to increased share of integrated
solutions
HMS able to curtail labour costs through financial crisis
Comments
1
1 Cost of goods sold include products purchased for resale as part of integrated solutions Source: Audited IFRS financials for „07-‟09, reviewed IFRS financials for 9m 2010
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Other
expenses
6.9%
Depreciation and
amortization
2.3% Construction and
installation works
of subcontructors
3.9%
Cost of
goods sold
15.4%
Labour
costs
16.1%
Supplies
and
raw materials
55.4%
Cost of sales structure, 2009 (%)
Total:
RUR 11,164 mm
Source: Audited IFRS financials
Appendix (ii) List of publicly announced projects in Russia & CIS1
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1 Frost & Sullivan report
38
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
Capex forecast for oil exploration and production
Oilfield Operator Reserves,
mln t
Project
time line
Total CAPEX,
RUR bn
CAPEX,
2010E – 2015E
RUR bn
2010E 2011E 2012E 2013E 2014E 2015E
Vankor Rosneft 524 2009-2017 369 316
Verkhnechonsk TNK-ВР 202 2009-2015 138 120
Tyamkinsk (Uvat region) TNK-ВР 75 2010-2012 85 85
Samotlor TNK-ВР 400 2009-2014 166 138
Russkoye TNK-ВР 306 2009-2015 135 115
Talakan and Alinsk Surgutneftegaz 135 2010-2014 231 231
Prirazlomnoye Sevmorneftegaz 46 2009-2011 70 47
Priobskoe Rosneft 694 2008-2013 130 87
Sakhalin offshore Rosneft, Gazprom 394 2006-2030 6,300 1,512
Other projects (Yurobcheno - Tоkhomskoe, Korchaginsk, East-Messoyakhsk group, Sakhalin 1 and 2,
Novoport, YANAO - North of Krasnoyarsk Krai, Titov and Trebs, Salym, Pyakyahinskoe,Verkhnekolik-
Yeganskoe, Kamennoe, Moskovtsova, Labaganskoe, Osoveyskoe, Koltogorskoe, Ozernoe, Lyaminskoe,
Rogonizhnikovskoe, Vysotnoe , Taas-Yuryakch, etc. )
1,990
Replacements and upgrades 1,226
Total CAPEX 5,869
Total investments on pump systems for exploration (pumps for: water injection, oil production,
drilling) 280
Total investments on pump systems incl. integrated solutions for exploration 340
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Capex forecast for refining
Investment project Project Project
timeline
Total CAPEX per
project, RUR bn
Total CAPEX
per project till
2015E, RUR bn
2010E 2011E 2012E 2013E 2014E 2015E
Komsomol'sk refinery reconstruction and upgrading 2010-2012 24 24
Tuapse refinery upgrading 2010-2014 4 4
Kuybyshev refinery reconstruction and upgrading 2010-2015 7 7
Syzran' refinery reconstruction and upgrading 2010-2015 25 25
Novokuybyshevsk refinery reconstruction and upgrading 2010-2015 24 24
Achinsk refinery reconstruction and upgrading 2010-2014 13 13
Angarsk refiery reconstruction and upgrading 2010-2014 12 12
Nakhodka refinery construction of a plant 2009-2017 270 180
Grozny refinery construction of a plant 2011-2014 12 12
Saratov refinery reconstruction and upgrading 2011-2012 9 9
Volgograd refinery reconstruction and upgrading 2011 11 11
Nizhny Novgorod refinery reconstruction and upgrading 2011-2015 30 30
Kirishi refinery reconstruction and upgrading 2011-2020 198 175
Yaroslavl refinery reconstruction and upgrading 2011 4 4
Moscow refinery reconstruction and upgrading 2011-2020 33 15
Omsk refinery reconstruction and upgrading 2010-2017 7 5
Ufa refinery reconstruction and upgrading 2011-2014 9 9
Ufaorgsintez reconstruction and upgrading 2011-2014 4 4
Salavatorgsintez reconstruction and upgrading 2011 55 5
Orskneftegazsintez reconstruction and upgrading 2010-2012 9 9
Khabarovsk refinery reconstruction and upgrading 2009-2012 40 40
Mariy refinery reconstruction and upgrading 2011-2015 60 60
TANECO Oil Refining and
Petrochemical Complex upgrading and construction of a plant 2009-2015 220 220
Verkhotursk refinery construction of a plant 2011-2014 72 72
Tomsk refinery construction of a plant 2011-2015 45 45
Yaisk refinery construction of a plant 2008-2014 22 15
Other projects including mini refinery plants construction 920
Upgrading and replacement 509
Total CAPEX 2,459
Total CAPEX on pumping systems for refining 26
Total CAPEX on pumping systems including complex solutions for refining 40
169.196.203
170.70.67
147.193.150
69.114.167
65.152.175
200.193.188
227.24.52
207.213.225
137.165.78
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
40
Capex forecast for thermal power generation
Investment, RUR mm Project timelines
Investment project Generation
capacity, MW
Year of project
commissioning Total CAPEX
CAPEX,
2010E-2015E 2010E 2011E 2012E 2013E 2014E 2015E
TGC-1 1,520 2006-2015 115,874 72,514
TGC-2 1,410 2006-2015 31,502 27,950
TGC-3 Mosenergo 1,992 2006-2014 87,895 39,487
TGC-4 Kvadra 1,040 2006-2015 30,254 20,616
TGC-5 710 2007-2014 22,068 14,074
TGC-6 750 2007-2014 22,000 16,192
TGC-7 Volga 470 2006-2012 19,834 10,641
TGC-8 890 2006-2013 38,916 17,642
TGC-9 1,409 2006-2017 54,395 27,930
TGC-10 Fortum 2,359 2006-2015 57,619 46,762
TGC-11 302 2007-2015 32,889 26,119
TGC-12 Kuzbassenergo 428 2006-2013 30,546 21,199
TGC-13 Yenisei 320 2006-2013 15,177 10,317
TGC-14 27 2006-2010 9,569 7,687
OGC-1 2,130 2006-2015 83,636 42,222
OGC-2 1,860 2006-2016 53,220 36,870
OGC-3 2,042 2006-2014 62,757 45,776
OGC-4 2,509 2006-2014 104,364 76,225
OGC-5 1,600 2007-2013 61,976 31,716
OGC-6 1,821 2007-2014 252,017 233,710
Other projects (including public utilities and
industrial enterprises) 1,510 2010-2015 785,100 785,100
Investments of modernization and repairs 2010-2015 350,000 350,000
Thermal power generation investment 1,960,750
Pumping equipment investment 17,000
Pumping equipment with integrated solutions investment 26,500
169.196.203
170.70.67
147.193.150
69.114.167
65.152.175
200.193.188
227.24.52
207.213.225
137.165.78
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
41
Capex forecast for nuclear power generation
Investment, RUR mm Project timelines
Investment project
Generation
capacity,
MW
Year of project
commissioning
Total
CAPEX
CAPEX
2010E-2015E 2010E 2011E 2012E 2013E 2014E 2015E
Rostov NPP: reactor No 2 1000 2005-2011 30,120 1,000
reactor No 3 1100 2009-2015 64,860 47,637
reactor No 4 1100 2011-2017 67,550 67,550
Kalininsk NP: reactor No 4 1000 2006-2012 48,832 12,698
Beloyarsk NPP: reactor No 4 800 2007-2013 65,578 33,721
Novovoronezh NPP-2: reactor No 1 1100 2007-2013 66,025 31,715
reactor No 2 1100 2008-2014 64,894 46,769
Leningrad NPP-2: reactor No 1 1100 2008-2014 69,024 49,712
reactor No 2 1100 2009-2015 67,735 61,745
reactor No 3 1100 2010-2016 67,276 67,276
reactor No 4 1100 2011-2017 67,550 67,550
Kursk NPP-2: reactor No 1 1100 2010-2016 67,276 67,276
reactor No 2 1100 2012-2018 67,735 59,141
reactor No 3 1100 2013-2019 67,735 39,080
reactor No 4 1100 2014-2020 67,735 20,707
Smolensk NPP-2: reactor No 1 1100 2012-2018 67,735 55,741
reactor No 2 1100 2013-2019 67,735 39,080
reactor No 3 1100 2014-2020 67,735 20,707
reactor No 4 1100 2015-2021 67,735 7,727
Kolsk NPP-2: reactor No 1 1100 2015-2021 67,735 7,727
NPP “Mochovce” (Slovakia): reactors No 3 and No 4 440 2010-2013 53,458 53,458
NPP “Belene” (Bulgaria): reactor No 1 1000 2011-2015 128,000 128,000
NPP “Kudankulam” (India): reactors No 3 and No 4 1000 2012-2017 108,000 64,800
NPP “Tianwan” (China): reactors No 3 and No 4 1000 2011-2016 108,000 86,400
NPP “Akkuyu” (Turkey): reactors No 1–4 1200 2014-2019 204,000 27,100
Investments in other projects: Ukraine (2 reactors), Belarus (2 reactors), Armenia (1 reactor), Vietnam (1 reactor) etc.
1200 2012-2019 2,500,000 1,580,530
Spending on repair, maintenance and extension of service life 2010-2015 500,000 500,000
Nuclear power generation investment 3,244,848
Pumping equipment investment (incl. MCP) 27,000
Pumping equipment (incl. MCP) with integrated solutions investment
41,000
169.196.203
170.70.67
147.193.150
69.114.167
65.152.175
200.193.188
227.24.52
207.213.225
137.165.78
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
42
Capex forecast for oil pipelines
Project Oil pipe
range
Rate of
flow,
mln.t/p.y.
Project
timelines
Total CAPEX,
RUR bn
CAPEX,
2010E-2015E
RUR bn
2010E 2011E 2012E 2013E 2014E 2015E
ESPO 1 2,694 20 2006-2011 450 50
ESPO 1–extension 30 2010-2013 200 200
ESPO 2 2,046 30 2009-2013 283 230
ESPO 2–extension 300 17 2012-2015 172 172
BTS-2 1,000 50 2009-2012 120 100
Zapolyarnoe-Purpe 536 45 2011-2015 120 120
Purpe-Samotlor 430 25 2010-2012 45 45
Project "Yug" (South) 1,465 9 2011-2013 81 81
Haryaga - Yuzhny Khylchuyu 160 8 2010-2012 90 90
KTK -2 1,510 35 2012-2014 88 88
Yurobcheno - Tоkhomskoe - Taishet 600 18 2012-2013 63 63
Tikhoretsk - Tuapse 2 295 12 2011-2012 20 20
Komsomolsky NPZ - port De-Kastry (oil-products
pipeline) 313 9 2012-2014 50 50
Komsomolsky NPZ - port De-Kastry (oil pipeline) 300 n.d. 2012-2014 45 45
Other projects ( Crude oil flow expansion for pipelines: Purpe-Kholmogory, Usa-Ukhta-Yaroslavl, pipeline from N.Kaspy oil region, Kirishi-Primorsk, etc )
1,204
Replacements and upgrades 850
Total CAPEX 3,408
Total investements on pumps systems for pipeline 40
Total investements on pumps systems incl. integrated solutions for pipeline 60
169.196.203
170.70.67
147.193.150
69.114.167
65.152.175
200.193.188
227.24.52
207.213.225
137.165.78
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
43
Capex forecast for water utilities
Programmes
Company Project timeline Total CAPEX,
RUB mm
CAPEX
2010E-2015E,
RUB mm
2010E 2011E 2012E 2013E 2014E 2015E
JSC Evraziysky
Water supply in Rostov-on-Don and South-West of
Rostov Oblast 2009-2026 21,903 7,300
Investment project "Clean Don" 2009-2019 3,306 1,802
Water supply and sewage systems in Azov and the
Black sea region 2009-2013 4,300 3,440
JSC RKS
Modernization of water supply system in Perm 2009-2011 474 316
Construction and modernization of water supply
system in Petrozavodsk 2009-2012 394 296
Development of heat supply system in Vladimir and
Vladimir Oblast 2009-2012 362 272
Modernization of biological water-treatment facilities 2009-2011 360 240
Water supply systems in Kirov (Federal programme
"Zhilische") 2009-2011 132 66
JSC Rosvodokanal
Barnaul vodokanal 2009-2011 6,932 4,772
Kaluga vodokanal 2009-2011 3,319 2,116
Krasnodar vodokanal 2009-2011 1,890 1,260
Omsk vodokanal 2009-2010 1,587 794
Orenburg vodokanal 2009-2011 946 630
Tver vodokanal 2009-2015 2,525 2,165
Tyumen vodokanal 2009-2011 2,700 1,800
State Programmes
St. Petersburg Water Utilities Development
Programme 2010-2025 274,200 102,825
Grozvodokanal 2010-2011 105,127 105,130
Russian Federal Target Investment
Programme
"Economic and social development in the Far East
and Transbaikal" 2010-2013 100 100
FGUP "Capital construction division # 900 under the
Federal Agency for Special Construction", Moscow 2010-2013 1,018 1,018
Water utilities and Environmental Protection 2010 7,251 7,251
Regional programmes "Clean Water"
(unconfirmed budget) 2011-2017 1,500,000 500,000
Water Strategy of Russian Federation until
2020 (excl. "Clean Water")
Public and industrial water supply 2009-2020 184,145 92,073
Protection and reconstruction of water objects 2009-2020 186,109 93,055
Protection from unfavourable impacts of water 2009-2020 326,182 163,090
Federal Programme "Zhilische" (public housing) 2011-2015 2011-2015 620,000 620,000
Sub-programme "Modernization of municipal infrastructure objects" 2011-2012 6,696 6,696
Investments in other projects 1,743,065
Replacement and amortization 580,000
Total investments in water utilities 4,041,570
Total investments on pump equipment in water utilities 93,987
Total investments on pump equipment with complex solution in water utilities 120,000
169.196.203
170.70.67
147.193.150
69.114.167
65.152.175
200.193.188
227.24.52
207.213.225
137.165.78
Source: Frost & Sullivan report
Note: Capex refers to publicly announced capex for the project as a whole or relevant part, not capex to be paid out to HMS under contracts
44