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Rambler Media
October 2006
Capitalising on the fastest growing
media market and online
community in Europe
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Rambler Media at a glance
• Rambler Media was a pioneer in identifying the internet opportunity in Russia, and commenced operations in 1996
• 10 years on, its main search engine and media portal, Rambler.ru has become the largest multi-service internet resource for the Russian speaking community worldwide and provides innovative solutions to advertisers
– 65% of internet users in Russia regularly visit rambler.ru* – Over 23 million monthly users of Rambler Media web properties*– A one stop shop offering over 50 different information, communication, e-commerce and entertainment services
Source: *Comcon – First Quarter 2006 ; Company – July 2006 2
In 2004, Rambler Media launched Rambler Mobile to provide mobile value added services and capitalise on growing widespread mobile usage in Russia and the CIS
− Revenue sharing agreement with major GSM operators, reaching 95% of mobile users in Russia − Services include Ringtones, interactive SMS, SMS Chat/Dating/Voting, News
Internet
TV Mobile
In 2003, Rambler Media launched Rambler TV, adding a new media channel to its internet offering and tapping into the $2.3bn TV advertising market in Russia
− A documentary and entertainment TV channel reaching 40 million viewers − Attracting a premium audience with high disposable income
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…in the early phase of its growth
Russian Advertising MarketFrom $1.3bn to $7.1bn* in 5 years
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2001 2002 2003 2004 2005F 2006F
+40%
CAGR
(US$m)
Note: Figures for 2001 and 2002 are based on above-the-line advertising only. Figures for 2003 onwards include above-the-line and below-the-line advertising
Source: *Russian Association of Advertising Agencies
• Russian Advertising market is one of the World’s largest and fast growing – over $6bn in 2005
• Internet has emerged as a new efficient and targeted media channel, set to outpace the overall market growth ( +65%
CAGR between 2002 and 2005)
• Mobile usage is also accelerating with Value Added Services revenues growing 115% CAGR since 2001 at $1.5bn in
2005
• Television continues to grow and remains the principal advertising channel, generating $2.3bn in 2005
Russian Internet and Mobile penetration**18% internet and 69% mobile penetration in 2006
0
20,000
40,000
60,000
80,000
100,000
120,000
2001 2002 2003 2004 2005F 2006F
Internet Mobile(000s)
Sources: **Company / Ministry of Communications / Central Bank / J’son & Partners
Note: Mobile Value Added services include voice content, SMS, MMS and premium SMS content
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A leading brand & essential partner…
• Core business since creation in 1996
• A preferred web resource for Russian speaking audiences worldwide• Offering proprietary web search, e-mail, news, instant messaging, e-commerce
services:– www.rambler.ru : main internet portal and search engine– www.lenta.ru : online Russian newspaper– www.price.ru : price comparison– www.siting.ru : website creation / editing– www.mama.ru : parenting information– www.doktor.ru : health related advice– www.ferra.ru : computer equipment information
• Generating revenues primarily from banner advertising, sponsored key word
searches and e-commerce
• Supported by a full-service wholly-owned advertising agency
20.9 million unique users of Rambler.ru every month
1.5 billion monthly page views…
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Internet
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…for users
• Established brands– Rambler.ru reaches 65% of internet users in Russia*– Lenta.ru attracts 2.6 million unique visitors per month**
• Proprietary search engine with Russian language tailored morphological module
• Advanced multi-service portal– Email, News, Radio– Search engine by word or category– E-commerce, instant messaging…
• B2B platform – Top 100 Rating and Classification– Real time monitoring of over 900,000 websites across 57 industries– Recording number of unique users and page views– ISO 9001:2000 Certified
Search
News
Services
Top 100
Weather
Horoscopes
On line radio
5Source: *Comcon – First Quarter 2006Source: **Company – July 2006
Rambler-ICQ instant messaging
Internet
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Operating Highlights
• 100% period on period increase in total revenue to US$ 16 million (US$ 8 million)
• Internet revenue up 137% to US$ 12.3 million (US$ 5.2 million)
• TV sales up 129% to US$ 2.2 million (US$ 0.96 million)
• Group EBITDA* profitable for second consecutive half year
• Over 50% increase in number of internet unique monthly users of Rambler.ru to 21 million vs 25-30% of Internet penetration growth in Russia
• More than 1.6 million Rambler-ICQ instant messaging unique users per month in less than one year after lauch
• Acquisition of 51% of Price Express, a leading Russian price comparison internet company
• Exclusive partnership with Trader Media East Ltd to launch online classified ads in Russia with leading newspaper Iz Ruk V Ruki
• Acquisition of 51% of online Russian social network Damochka.ru and 51% of online banner technology company Bannerbank
First Half 2006 results highlights
*Earnings before interest, tax, depreciation and amortization6
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• 100% revenue growth period on period to US$16 million (US$ 8 million)
• 78% of total revenue came from internet
• Net profit of US$ 2.5 million (net loss of US$ 2.3 million)
• Strong balance sheet with $20 million cash at end of June 2006
First Half 2006 Revenue and EBITDA*
7
11.4
1.3 2.3 3.3
(1.4)(0.3)
-10
-5
0
5
10
15
20
Internet Mobile VAS TV
US$
m
Revenue EBITDA*
Financial Highlights Revenue composition
Revenue and EBITDA* growth
*Earnings before interest, tax, depreciation and amortization
Internet 78%
TV 14%
Mobile 8%
Moving into Profitability
-5,000
0
5,000
10,000
15,000
20,000
25,000
2002 2003 2004 2005 HY 2006
Revenue Growth EBITDA Growth
US$
m