I. About the company. Key highlights of 2014

Analyst and investor day
April 13, 2015
Moscow
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2
I. About the company. Key highlights of 2014
II. Operating results
III. Financial results
IV. Investments and development
V. Priorities and expectations
RusHydro: the leading Russian utilities and renewables company
Russia’s largest genco and one of the world’s largest publicly-traded predominantly hydro generation
companies, with capacity of 38.5 GW (ca. 16% of the Russian total)
The biggest winner from electricity market liberalization in Russia due to extensive exposure to low-cost
hydro generation
A developing dividend story: 4 consecutive years of dividend payments since 2010; dividend payout in
the amount of 25% net profit (from 2014 – of net profit under IFRS)
Focus on the Russian market: extension of life-time and improving efficiency of existing hydro assets,
implementation of value-accretive hydro projects
Diversified holding company with hydro engineering and design assets
Prudent financial management: target leverage at ≤ 3х EBITDA
One of the most liquid generating companies of the Russian stock market: local shares in Level 1 list on
MOEX, GDRs listed on the LSE, ADRs trading OTC and OTC QX in New York
Shares included in MSCI Russia – the only utilities company in the index
Green utility – world’s 3rd largest renewable player
RusHydro is due for partial privatization until 2017
4
RusHydro: the leading Russian utilities and renewables company
No.1 Russian power generation company, GWh*
38.5
38
29
25
20
15
No.3 world’s hydropower co. by capacity, GW*
36
36
30
30
28
22
No.6 heat producer in the world, mn GCal
117
108
42
34
33
31
25
1/7 electricity generation in Russia*
>50% of total hydro output in Russia*
Eurosibenergo, 6%
Boguchanskaya HPP, 5%
EON Russia, 6%
14%
Eurosibenergo, 37,7%
IES Holding, 6%
Enel Russia, 4%
1,025 TWh
Inter RAO, 14%
Other, 0,4%
50%
TGK-1, 6,9%
Gazprom, 15%
* - including Boguchanskaya hydropower plant (50/50 JV with UC RUSAL); ** - as of 2014
1,025 TWh
Other, 18%
Rosenergoatom, 18%
5
TSR compared to Russian power generation peers
 In 2014, RusHydro developed and approved the list KPIs and methodology of calculation and valuation of KPIs in accordance with the government’s guidelines
and in compliance with the Regulation for KPIs of the state-owned companies approved by the Federal Agency for State Property Management
(Rosimushchestvo);
 The Company benchmarks its TSR against the TSRs of companies included in MICEX Power Index (MICEX PWR), excluding grid companies and power retail
companies, as well as JSC RAO ES of East, a listed subsidiary of RusHydro.
2011-2013*
1
2
3
4
5
6
7
8
9
10
11
12
13
2014*
Company
E.ON Russia
Volzhskaya TGC
TGC-9
Enel OGK-5
RusHydro
Irkutskenergo
Mosenergo
TGK-1
Inter RAO
OGK-2
TGK-6
Quadra
TGK-5
TSR
5%
-19%
-38%
-59%
-61%
-64%
-68%
-70%
-81%
-85%
-86%
-86%
-88%
Company
1 Krasnoyarskaya HPP
TSR
81%
2 Quadra
49%
3 E.ON Russia
10%
4 RusHydro
-1%
5 Irkutskenergo
-12%
6 Mosenergo
-17%
7 Inter RAO
-23%
8 Enel Russia
-31%
9 TGK-1
-32%
10 OGK-2
-35%
11 Volzhskaya TGC
-44%
Total shareholder return (TSR) over a period
is defined as the net stock price change plus
the dividends and other payments paid to
shareholders during the defined period. TSR is
used as a measure of shareholder value
creation and also to compare the performance
of different companies' stocks and shares over
time. TSR is widely used all over the world for
evaluation of corporate performance, as well
as a metric for management’s remuneration
packages.
* To minimize the effects of sudden share price volatlity, RusHydro uses smoothing period of 22 trading days at the beginning and end of the year
6
Key points of 2014
Corporate events
Securing facilities in total amount of EUR 190 mn from ING Bank and Crédit Agricole Corporate & Investment Bank Deutschland for
modernization of Saratovskaya HPP
RusHydro approved a new dividend policy providing a dividend payout taking into consideration consolidated net profit of the Group
calculated under IFRS
AGM approved payment of the dividend for 2013 in the amount of RUB 0.01358751 per share, or RUB 5.2 bn in total (25% of reported
net profit under IFRS)
RusHydro Group acquired 3.39% of its own shares via a swap for 25% minus 1 share stake in JSC Krasnoyarskaya HPP between JSC
Hydroinvest, 100% subsidiary of RusHydro, and JSC Eurosibenergo
RusHydro agreed to cooperate with PowerChina in development of the Leningradskaya PSPP and China Three Gorges Corporation (CTG)
on joint development of reservoir-based flood-control hydropower projects in the Russian Far East
Board of Directors’ decisions
Evgeny Dod was reappointed as Chairman of the Management Board of RusHydro for the next 5-year period
The Board of Directors approved changes in organizational structure of JSC RusHydro aimed at creation of a “flatter” management
structure, reduction of number of employees and lowering costs
The Board of Directors approved a long-term development program of RusHydro Group aimed at reliability and safety improvement of the
Company’s generating facilities, sustainable development of electricity generation and the Company’s value growth
Increase in installed capacity / power market changes
Liberalization of 65% of capacity sales from hydro in Siberia from May 1, 2014 (fully regulated as of 2011)
Launch all hydropower units at the Boguchanskaya hydropower plant
Successful completion of restoration of the Sayano-Shushenskaya HPP
7
New management structure
Key optimization highlights
CEO
Evgeny Dod, General
Director – Chairman of the
Management Board
Finance and Economics
Mikhail Mantrov, Member
of the Management Board,
First Deputy General
Director
Strategy, M&A, Innovations
George Rizhinashvili,
Member of the
Management Board, First
Deputy General Director
Operations and maintenance
Boris Bogush, Member of
the Management Board,
First Deputy General
Director – Chief engineer
Construction and Engineering
Vladimir Tokarev, Member
of the Management Board,
First Deputy General
Director
Economics, investments, procurements
Sergey Kirov
Member of the
Management Board, First
Deputy General Director
RAO ES of East
 reduction of number of the Management Board
members from 14 to 5; the same reduction in the
Management Board of RAO ES of East;
Sergey Tolstoguzov,
General Director
 exclusion of a category “Directors of business
dimensions” – 18 persons;
Marketing and power trading
 exclusion of directorates – 10 business units;
Stanislav Savin,
First Deputy General
Director
 reduction of number of divisions from 40 to 22;
divisions will be managed by directors of divisions;
 reduction of non-operating personnel;
Security
Sergey Abrashin,
Deputy General Director
PR, GR
Sergey Tsoy,
Deputy General
Director, State-secretary
Current Management
Board composition
Management Board
till Oct 1, 2014
Investments, procurements
Khmarin Viktor,
Deputy General Director
Corporate Governance
Evgeny Gorev,
Deputy General Director
 moratorium on hiring non-operating personnel
Rakhmetulla Alzhanov,
Adviser to General
Director
Key expected results
 creation of a “flatter” organizational structure;
 clearer allocation of responsibilities and duties
among managers;
 decrease in the number of the executive staff and
lower administrative costs.
R&D
Vladimir Pekhtin,
Deputy General Director
Konstantin Bessmertny,
Adviser to General
Director
8
Global ‘green energy’ player
Commitment to sustainable energy production
 RusHydro:
 One of Russia’s largest energy holdings, a leader in the production
of energy from renewable energy sources
 Installed electric capacity 38.5 GW: 78% - hydro & renewable,
22% – fossil-fuel generation (ca. 50% coal)
 # 4 global player by hydro & renewable capacity, # 3 by purely
hydro capacity
 Mission & strategy: provide society with "clean" energy, paying
adequate attention to environmental preservation
 The Group takes active measures to increase energy efficiency and
energy savings
One of the top international green energy producers
19%
EDF
Enel
99
EON
63
Iberdrola
45
Eletrobras
43
Vattenfall*
Hydro Quebec*
China Yangtze Power
19
17%
54%
85%
Hydro
34%
Other renewables
38.5
78%
Nuclear
29
Eurosibenergo*
Thermal
99%
99%
77%
% of hydroelectric and
renewable capacity in
total installed capacity
* Unlisted
** Purely nuclear generators are not included
Improvement of eco-standards. Cooperation.
 The number of the plants that have implemented Environmental
Management System ISO 14000 has increased from 3 in 2010 to
6 in 2013
 RusHydro is active participant o in the UNDP-GEF-Ministry of
Natural Resources Project on the biodiversity conservation
37%
39
36
140
Emissions in line with global peers, poised to further decline
New hydro units commissioning will increase share of renewable capacity
while Far East projects completion will reduce CO2 emissions
% of hydro & renewable capacity
China
Yangtze
100%
RusHydro
Hydro
Quebec
Eletrobras
80%
Statkraft
 “RusHydro Red Book” project is underway, includes the
interaction with the 11 local reserves in regions of the Company’s
presence
Eurosibenergo
60%
Enel
40%
Iberdrola
Vattenfall
20%
E.ON
EDF
0%
500
400
300
200
100
0
-100
kg CO2/MWh
2013 data. Size of bubble represents volume of hydroelectric and renewable capacity in GW
9
I. About the company. Key highlights of 2014
II. Operating results
III. Financial results
IV. Investments and development
V. Priorities and expectations
4Q’14 and FY’14 operating results
 lower than FY2013 and long-run average water inflow to reservoirs of the Volga-Kama cascade;
 water inflow to Sayano-Shushenskoe reservoir – lower than normal;
 increase in electricity generation by TPPs of the Far East due to decreased hydro production in the unified power system of the Far East as
well as growth in electricity consumption;
 launch of the last three hydropower units at the Boguchanskaya HPP in the second half of 2014.
4Q’14/4Q’13 – Europe & Siberia (price zones), GWh
4Q’14/4Q’13 – Far East (non-price zone), GWh
+4%
-24%
6 860
Siberia
4 632
1 364
1 540
9 663
7 781
4Q'13
4Q'14
4 290
3 091
South of Russia
Center of Russia
8 329
4Q'13
FY’14/FY’13 – Europe & Siberia (price zones), GWh
10 080
Far East hydro
RAO ES of East
(fossil fuel)
4Q'14
FY’14/M’13 – Far East (non-price zone), GWh
-14%
+0.2%
27 276
22 492
8 106
6 257
Siberia
15 924
14 873
South of Russia
Center of Russia
42 354
38 334
30 001
31 156
FY'13
FY'14
FY'13
FY'14
Far East hydro
RAO ES of East
(fossil fuel)
* - including the results of 3 GW Boguchanskaya hydropower plant, a 50/50 JV with UC RUSAL, not consolidated in the Group’s financial
results. 8/9 of the plant’s nominal capacity was launched in September 2014
11
Water inflow to major reservoirs in 2014
Water inflow to reservoirs of the Volgo-Kama cascade, m3/s
Water inflow to the Sayano-Shushenskaya HPP, m3/s
7 000
50 000
45 000
6 000
40 000
5 000
35 000
30 000
4 000
25 000
3 000
20 000
15 000
2 000
10 000
1 000
5 000
0
янв
фев
мар
апр
май
2013
июн
июл
2014
авг
сен
окт
ноя
дек
0
янв
фев
мар
апр
май
Long-term average
июн
июл
2013
Water inflow to the Chirkeyskaya HPP, m3/s
авг
сен
окт
ноя
дек
2014
Water inflow to the Zeyskaya HPP, m3/s
500
14 000
450
12 000
400
350
10 000
300
8 000
250
200
6 000
150
4 000
100
2 000
50
0
янв
фев
мар
апр
май
июн
2013
июл
авг
2014
сен
окт
ноя
дек
0
янв
фев
мар
апр
май
июн
2013
июл
авг
сен
окт
ноя
дек
2014
12
Hydro production trends 2011- 1Q’2015
Center of Russia, GWh
Siberia, GWh
2011
2012
2013
2014
2015
Long-run average
4 000
3 500
3 000
2011
2012
2013
2014
2015
Long-run average
3 000
2 500
2 000
2 500
1 500
2 000
1 500
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
1 000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Aug
Sep
Oct
Nov
Dec
Far East, GWh
South of Russia & N. Caucasus, GWh
2011
2012
2013
2014
2015
Long-run average
2 600
2 400
2 200
2 000
1 800
2011
2012
2013
2014
2015
Long-run average
1 600
1 400
1 200
1 600
1 400
1 000
1 200
1 000
800
800
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Nov
Dec
13
Water inflows forecast for 2Q’2015
m³/s
m³/s
5000
5000
4500
4500
4000
4000
3500
3500
3000
3000
2500
2500
2000
2000
1500
1500
1000
1000
500
500
2015, m3/с max
2014, m3/s
2015, m3/с, min
Kolymskaya
Zeyskaya
Vyshe-karglinskaya
Terek
Sayno-Shushenskaya
Sulak
Vladikavkazskaya
Chirkeyskaya
Votkinskaya
Kamskaya
Kama
Novosibirskaya
Volga
Volgogradskaya
Saratovskaya
Zhigulevskaya
Cheboksarksaya
Gor'kovskaya
Rybinskaya
0
Uglichskaya
0
Ob'
Enisey
Kolyma
Zeya
Norm, м3/с
14
Water inflows forecast to major reservoirs for Apr-Dec 2015
m³/s
m³/s
2500
2500
2000
2000
1500
1500
1000
1000
500
500
2015, м3/с max
2014, м3/с
2015, м3/с min
Novosibirskaya
Sayno-Shushenskaya
Volga
Kamskaya
Volgogradskaya
Saratovskaya
Zhigulevskaya
Cheboksarksaya
Gor'kovskaya
0
Rybinskaya
0
Kama
Ob'
Enisey
Норма, м3/с
15
Unregulated market overview
Key highlights
Historical and forecasted “day-ahead” market price dynamics, RUB/MWh**
 European pricing zone: Non-indexation of gas tariffs for industrial
consumption as of July 2014 and moderate dynamics of power
consumption growth contributed to somewhat lower or flattish spot prices
in the second half of 2014;
1 031
1 028
1 177
1 124
898
 Siberia: decrease in power supply by hydropower plants in Siberia and
increase in load of thermal power plants as a result of improved
interconnection with the 1st pricing zone led to increase in demand of price
setters’ supply. Also, a decrease in hydro output led to higher load of more
expensive capacities in the eastern regions, contributing to higher prices.
677
658
1 155
1 126
1 118
824
848
633
481
2011
2012
2013
2014
2015F
Europe
European part of Russia (1st pricing zone), RUB/MWh*
2016F
2017F
Siberia
Siberia (2nd pricing zone) RUB/MWh*
1026
1400
983
1000
1300
1 254
1204
1200
900
1 143
1100
1233
1 136
1120 1122
1116
1043
1 037
800
763
1002
1000
777
764
762
723
714
915
925
700
900
665
677
672
639
662
600
800
1Q
2012
2Q
2012
3Q
2012
4Q
2012
1Q
2013
2Q
2013
3Q
2013
4Q
2013
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015
* Data from the Administrator of the Trading System (ATS) of wholesale electricity market; ** - 2015F is data from ATS as March’15, 2016-2017F – ATS forecast from Dec’14
16
Regulated market overview
Capacity prices in pricing zones, ‘000 RUB/MW/month
2 313
2 247
2 076
2 066
Weighted average capacity tariffs in pricing zones, ‘000 RUB/MW/month
2 063
2 003
112,5
114,4
116,4
42,4
42,8
2014
2015F
66,1
203
113
111
105
127
114
2011
2012
2013
2014
2015F
2016F
DPM - Europe
2013
KOM - average (Europe and Siberia)
Europe
Siberia
Heat and electricity tariffs of RAO ES of the East
Weighted average electricity tariffs in pricing zones, RUB/MWh
Electr.tariffs
16,05
15,90
15,75
13,37
13,50
2013
2014
Europe
13,71
2015F
Siberia
Heat tariffs
2014/2013
2015/2014
2014/2013
2015/2014
DGK
3.54%
3.48%
DEK
6.95%
6.51%
0.21%
11.23%
6.73%
11.70%
3.18%
7.55%
10.22%
7.02%
4.81%
8.09%
5.7%
7.20%
9.74%
6.85%
7.59%
11.35%
7.91%
-
7.36%
-
6.95%
11.90%
8.81%
14.88%
5.62%
10.13%
12.64%
-
9.31%
10.29%
5.15%
3.46%
6.06%
6.28%
8.48%
-
Kamchatskenergo
YuESK
Magadanenergo
Chukotenergo
Sakhalinenergo
Yakutskenergo
Sakhaenergo
Peredvizhnaya energetika
17
I. About the company. Key highlights of 2014
II. Operating results
III. Financial results
IV. Investments and development
V. Priorities and expectations
Financial results overview
Key highlights
 FY’14 EBITDA – RUB 73,249 (-7.5%); FY’14 underlying (adjusted) net profit** – RUB 39,777 mn (-24.5%);
 Weighted-average EPS for 2014 increased by 8% to RUB 0.0689 per share;
 Decrease in year-on-year electricity output was partly offset by:
a) higher unregulated prices in Siberia, almost flat price in the European part of Russia;
b) resumption of “last mile” arrangement in the Far East;
c) partial liberalization of capacity sales in Siberia as of May 2014;
 Negative factors affecting profitability:
a) low hydro output;
b) non-indexation of regulated gas tariffs (“tariff freeze”) resulting in flattish unregulated power prices in the 1 st price zone;
c) higher inflation in 4Q’14;
d) higher expenses for personnel, depreciation and electricity distribution;
RUB billion
Revenue, total, incl.:
Revenue from operations
Government grants
Expenses
EBITDA*
Net profit
Net profit (adj.)**
EBITDA margin
Net margin
FY’14 FY’13
chg
342.0
326.9
4.6%
329.6
313.6
5.1%
12.4
13.3 -6.8%
290.8
265.8
9.4%
73.2
79.2 -7.6%
24.1
21.0 14.8%
39.8
52.7 -24.5%
21.4% 24.2% -2.8pp
11.6% 16.1% -4.5pp
4Q’14 4Q’13
chg 3Q’14 3Q’13
chg 2Q’14 2Q’13
chg 1Q’14 1Q’13
chg
100.9
94.2
7.1% 70.2
69.0 1.7%
76.2
74.4 2.4%
94.7
89.3 6.0%
96.3
88.2
9.2% 68.0
67.1 1.3%
73.7
71.7 2.8%
91.6
86.5 5.9%
4.6
6.0 -23.3%
2.2
1.9 15.8%
2.5
2.7 -7.4%
3.1
2.8 10.7%
85.8
72.9 17.7% 65.1
60.3 8.0%
65.4
62.1 5.3%
74.6
70.5 5.8%
21.7
26.6 -18.4% 10.1
13.5 -25.2%
15.9
15.7 1.3%
25.5
23.4 9.0%
13.4
22.8 -41.2%
2.1
6.8 -69.1%
8.5
8.5 0.0%
15.9
14.6 8.9%
21.5% 28.2% -6.7pp 14.4% 19.6% -5.2pp 20.9% 21.1% -0.2pp 26.9% 26.2% +0.7pp
9.9% -6.9pp 11.2% 11.4% -0.2pp 16.8% 16.3% +0.5pp
13.3% 24.2% -10.9pp 3.0%
* EBITDA is calculated as operating profit / loss excluding depreciation of property, plant and equipment and intangible assets, impairment of property, plant and equipment, available-for-sale financial assets,
accounts receivable, long-term promissory notes, loss on disposal of property, plant and equipment, loss on remeasurement of net assets of subsidiary acquired exclusively with a view for resale, and gain from
curtailment in pension plan and pension payment, disposal of subsidiaries and associates.
** Net profit is adjusted for the effects of impairment of property, plant and equipment and remeasurement of net assets of subsidiary acquired exclusively with a view for resale, impairment of available-for-sale
financial assets, accounts receivable, property, plant and equipment of associates, long-term promissory notes, loss on disposal of property, plant and equipment, reversal of impairment of investments and
property, plant and equipment of associates and gain from curtailment in pension plan and pension payment.
19
FY14 EBITDA: segment and cost analysis
EBITDA bridge – segment review
-5,770
+903
-1,634
+1,257
-678
79,171
73,249
EBITDA 2013
JSC RusHydro
ESC RusHydro subgroup RAO ES of East subgroup
(electricity retail)
Other
Misc undistributed
operations
EBITDA 2014
EBITDA bridge – cost analysis
+15,110
-2,882
-2,167
-8,207
-3,360
-1,147
-1,188
-2,081
73,249
79,171
EBITDA 2013
Increase in total
Increase in
Increase in fuel
revenue and
purchased
costs
other operating electricity and
income
capacitry expense
Increase in
employee
benefits
Increase in
electricity
distribution
expenses
Increase in third Increase in other Other income and
party services
materials costs
expenses
EBITDA 2014
20
OPEX overview
Key highlights
 Employee benefit expenses: indexation of salaries of personnel of JSC RusHydro branches as well as annual indexation of salaries of personnel of
subsidiaries and associates of RusHydro Group; one-off bonus payment to the Company’s employees for execution of a three-year program aimed to
enhance operational and investment efficiency.
 Purchased electricity and capacity: electricity and capacity expense was up mostly due to higher purchase prices from unregulated market, increase in
electricity purchase by Zagorskaya PSP and higher purchase cost from Bilibinskaya NPP.
 Electricity distribution expenses: an increase in electricity distribution expenses is attributable to higher electricity transmission tariffs
 Depreciation of property, plant and equipment and intangible assets: increase in depreciation of fixed assets due to reclassification of DRSK (Far
Eastern grid operations) following the management’s decision not to sell DRSK
FY’14
FY’13
chg
4Q’14
4Q’13
chg
65,114
56,907
14.4%
17,668
15,563
13.5%
Purchased electricity and capacity
57,504
54,622
5.3%
18,340
14,254
28.7%
Fuel expenses
46,639
44,472
4.9%
15,411
13,199
16.8%
Electricity distribution expenses
41,282
37,922
8.9%
11,455
10,707
7.0%
Third parties services
29,299
28,152
4.1%
8,737
8,846
-1.2%
Depreciation of PP&E and intangible assets
21,340
18,218
17.1%
5,856
4,346
34.7%
Other materials
10,787
9,599
12.4%
2,616
2,292
14.1%
Taxes other than on income
9,008
9,295
-3.1%
2,337
1,778
31.4%
Water usage expenses
2,656
2,742
-3.1%
594
705
-15.7%
Social charges
2,274
2,082
9.2%
564
474
19.0%
4,935
290,838
1,752
265,763
181.7%
9.4%
2,235
85,813
713
72,877
213.5%
17.8%
RUB mn
Employee benefit expenses
Other expenses/income
Total expenses
21
Net Income 2014 – effect from non-cash items
Net income – from reported to adjusted
Net income, 12M'14
24,131
Impairment of PP&E
+8,884
Impairment of
financial assets
available-for-sale
+1,781
Impairment of accounts
receivable
+6,603
Loss on disposal of PP&E
+1,288
-501
Curtailment in pension plan
Deferred taxes effect
Net income, adj. 12M'14
-2,600
39,586
22
RusHydro Group debt profile
Key highlights



Comfortable debt repayment profile (1) (RUB bn)
A low interest and FX risk debt portfolio with 87% of the facilities being
RUB-denominated and 78% bearing fixed interest rate as of 31.03.2015
Strong relationship with state-owned banks, that currently account for
ca. 40% of the debt portfolio as of 31.03.2015
A stable multicurrency effective interest rate of 10.4%

Duration of debt portfolio – 4.13

Significant liquidity cushion (cash, short-term deposits, undrawn credit
facilities, liquid financial investments) in the amount of RUB 98 bn,
exchange-traded bonds program in the amount of RUB 200 bn, two
registered domestic bonds issues in the total amount of RUB 20 bn

318
Exchange-traded RUB-denominated bonds
program
RAOЭС
ES of
East
РАО
Востока
(total = RUB 51.3
bn) руб.)
(итого=51.3
млрд.
17
Liquid investments in shares
16
Undrawn credit facilities
RusHydro (итого=121.5
РусГидро
(total = RUB 121.5 bn
млрд. руб.)
20
RUB-denominated bonds
200
years(3)
Several available sources to refinance redemption of bonds in October
2015 (ruble-denominated bonds, financing from banks)
Cash(2)
49
65
Total
Ликвидliquidity
ность
Transparent debt composition
42
10
29
24
20
8
16
2
2015
2016
2017
33
0,4
2
2018
49
3
0,4
2
2019
2020-2034
Low-risk debt portfolio(1)
Other (financial lease, debt of
retail co, derivatives)
4.9
BoGES guarantee
27.9
RAO ES of East
51.3
53
4
Rate
Currency
RUB 205.5
bn
78% – fixed rate
87% – RUB denominated
JSC RusHydro
121.59
Source
(1)
40% – state banks
32% –
public instruments
28% –
other
As of 31.03.2015 excluding BoGES guarantee (RUB 27.19 bn), debt of retail companies (RUB 3.3 bn), lease payments (RUB 1.6 bn)
and liabilities under derivative contracts (RUB -0.05 bn)
(2) Including cash and short-term deposits (up to 1 year)
(3) Including BOGES guarantee
23
Cash flow analysis
RUB
billion
2010
2009
70
64,7
2011
2014
2013
2012
62,4
58,9
57,9
60
50,5
50
41,3
40
30
20
0,1
10
0
9,0
-0,2
-32,5
0,6
-61,6
-10
-5,5
-2,2
-1,3
-20
-30
-1,7
-19,4
-70,5
-25,5
-83.0
-78,6
-25,9
-22,0
-40
Operating cash flow
Capex (PP&E)
Net interest expense
Unlevered free cash flow
24
I. About the company. Key highlights of 2014
II. Operating results
III. Financial results
IV. Investments and development
V. Priorities and expectations
Capacity commissioning timeline
120
TPP in Sovetskaya Gavan
Zaragizhskaya Small HPP
193
Yakutskaya TPP-2
Vostochnaya TPP
142
Blagoveschenskaya TPP
Gotsatlinskaya HPP**
342
120
Ust'-Srednekanskaya HPP (2nd stage)
140
320
Nizhne-Bureyskaya HPP
140
Zelenchugskaya HPP-PSPP**
168
145
100
31
Technical upgrade and modernization
of HPPs
840
346
10,1 GW
Total capacity commissioning in 20122019
2015-2019
Technical upgrade and modernization
of HPPs
2012-2014
120
333
333
333
333
333
640
640
640
640
640
640
DPM
Reconstruction / modernization
Zagorskaya PSPP-2
Sakhalinskaya GRES-2
Zaramagskie HPP
Boguchanskaya HPP*
Ust'-Srednekanskaya HPP (1st stage)
Boguchanskaya HPP*
Sayano-Shushenskaya HPP
Sayano-Shushenskaya HPP
Boguchanskaya HPP*
333
333
333
333
Electricity (capacity) purchase agreements / unregulated market
Old TPP generation replacement tariff /other mechanisms
* The Boguchanskaya hydropower plant is part of the Boguchanskiy Energy and Metals Complex (BEMO), a 50/50 joint venture (JV) between RusHydro and UC RUSAL
** First 4 units of Sayano-Shushenskaya HPP were temporarily recovered prior to 2012, after that the company started gradual replacement of all units
26
Funding of the investment program for 2015-2020
Key highlights
Funding sources (estimated)
 As a result of development plan in 2015-2020 the company plans to finalize
the construction of its key hydro and thermal projects, which will result in
installation of 2.9 GW and 876 GCal/h of new electric and heat-generation
capacity;
Debt, 18%
 The current capex update was sent to the Ministry of Energy for approval in
March 2015, and hasn’t been yet approved by the Board of Directors;
 The major sources of funding are mostly company’s own sources: operating
profit, depreciation and VAT reclaim;
Own funds, 82%
 The company plans to raise funds from investors for construction of VerkhneNaryn cascade of hydropower plants in Kyrgizia and rehabilitation of
Perepadnye hydropower plants in Abkhazia (projects not included in the
current capex update)
Funding of the Group’s investment program, RUB bn (incl. VAT)*
Funding of project groups, RUB bn (incl. VAT)
140,0
140,0
35.0**
120,0
1,1
33,7
120,0
3,0
100,0
100,0
20**
80,0
80,0
60,0
100,8
112,5
60,0
103,2
40,0
77,7
79,3
63,3
69,2
40,0
20,0
20,0
3,5
22,2
26,4
12,7
27,9
28,0
16,1
31,2
27,8
1,2
22,1
22,1
24,4
34,5
30,8
2014
факт
2015F
2,9
22,6
8,3
0,6
19,9
0,8
0,5
20,8
0,8
44,0
44,2
45,5
42,1
47,0
2016F
2017F
2018F
2019F
2020F
0,0
0,0
2014
2015F
2016F
2017F
2018F
2019F
Funding not guaranteed, subject to optimization/sequestration**
Capex outlays upholding gross debt/EBITDA≤3.0x
2020F
Hydro rehab/modernization
Hydro construction
4 thermal projects
RAO ES of the East
Other
* - excluding BEMO project (50/50 JV with UC RUSAL)
** - the indicated amount could be cut in case of risk to exceed the 3x gross debt/EBITDA covenant and lack of non-debt funding sources
27
Key development projects (1/3)
42%
95%
Boguchanskaya HPP
Project location
Project objective
Installed capacity, MW
88%
Nizhne-Bureyskaya HPP
47%
Gotsatlinskaya HPP
Zaragizhskaya Small HPP
Krasnoyarsky region, on the
Angara river
Amurskiy region, Bureyskiy
district, Novobureyskiy
settlement
On the border between
Khunzakhsky and
Gergerbilsky area, Republic
of Dagestan
Kabardino-Balkar
Republic
Construction of the
Boguchanskaya HPP on the
Angara river
Regulator of the
Bureyskaya HPP, electricity
generation
Improvement of reliability
of supply in the Republic of
Dagestan
New capacity
commissioning, use of
the Nizhne-Cherekskie
HPPs’ flow for power
generation
2 997
320
100
30,6
Number of hydro-units, units (MW)
9 (333)
4 (80)
2
3 (10.2)
Average annual output, GWh
17 600
1 650
350
2012 – 1 332 MW, 2013 –
666 MW, 2014 – 999 MW
2016 –320 MW
2016 – 100 MW *,**
2015 - 30,6 MW
2016 (including the 8th
stage)
2017
2016 год **
2015
Year and commissioned capacity
Year of construction completion and
launch
114
% - percentage of project readiness as of the end of 2014
* In case of timely reservoir filling
** In accordance with recommendations on amendments to investment program of JSC RusHydro for 2015-2017 submitted to the Ministry of Energy of Russia.
28
Key development projects (2/3)
44%
64%
50%
Ust’-Srednekanskaya HPP
Zaramagskie HPPs
Zelenchugskaya HPP-PSPP
Project location
Alania, Alagirsky region
Karachayevo-Cherkessian
Republic, on the base of the
Zelenchugskaya HPP in opration
Magadan region
Project objective
Electricity generation, elimination
of the lack of electricity in Alania
from 80% to 30%
Reliability improvement of the
united power system of the South
of Russia
Economic and social development
of Magadan region
Main project stages
Installed capacity, MW
Number of hydro-units, units (MW)
Average annual output, GWh
Year and commissioned capacity
Year of construction completion and launch
352
140/160 (in pump mode)
310.5
2 (10+171 MW)
2 (70/80 MW)
4
842
162
2 550
Main HPP – 15 MW (launched on
18.09.2009 );
HPP-1 – 342 MW (to be
commissioned in 2017)
2015 - 140 MW
2013 – hydro-unit 1 launch and low
head hydro-unit 2,
2018 – launch of hydro-unit 3
2018
2015
2018
% - percentage of project readiness as of the end of 2014
29
Key development projects(3/3)
37%
Main project stages
Project location
Project objective
1%
6%
5%
Sovetskaya Gavan’
CHPP
Blagoveshenskaya CHPP
Sakhalinskaya TPP-2,
1st stage
Blagoveshensk
Sakhalin
Sovetskaya Gavan’ city,
Khabarovsk region
Republic of Sakha Yakutia ,
Yakutsk city
elimination of the lack of heat
power in Blagoveshensk;
elimination of the lack of
electricity in Sakhalin;
replacement of retired capacity
of operating Sakhalinskaya TPP
meet the electric capacity
demand in the region, provide
Sovetskaya Gavan’ city with
the centralized heat supply
replacement of retired
capacity of operating
Yakutskaya TPP, reliability
improvement of power
supplies
120 MW/ 200 GCal/h
193,48 MW/ 469,6 GCal/h
Reliability improvement of power
supplies
Yakutskaya TPP-2,
1st stage
Installed capacity, MW / GCal
120 MW
188 GCal/h
120 MW/ 18,2 GCal/h
Average annual output, GWh
464
840
2015 – 120 MW
188 GCal/h
2017 – 120 MW/18,2 GCal/h
2016 – 120 MW / 200 GCal/h
2016 – 193,48 MW/
469,6 GCal/h
2015
2017
2016
2016
Year and commissioned capacity
Year of construction completion and
launch
630
1 440,407
% - percentage of project readiness as of the end of 2014
30
Hydropower rehabilitation & modernization plan
Funding requirements
Key aspects

The plan was approved by the Board of Directors in the end of 2011

The main reasons for plan implementation: 1) ageing and decrease in
reliability of equipment (see slide 49), 2) lack of investments in the 90-s
and 00-s, 3) strengthening of control of the regulator as well as risks of
non-receipt of readiness certificates for a number of facilities, 4) need for
comprehensive approach to the technical upgrade and reconstruction;


6%
5%2%
Generators
Auxiliary equipment
37%
13%
Safety, automatics
The funding of program in 2014-2017 will amount ca. USD 1 bn per year.
Management and the Board of Directors approve and amend the funding
plan on an annual basis;
Reconstruction of hydro structures
17%
Transformers
20%
Design works
Major contractors: Power machines, Alstom, Voith AG, Turboatom, ABB
Technical parameters and objectives

Replacement of 154 turbines or 55% of total turbine fleet*;

Replacement of 119 generators or 42% of total generator fleet*;

Replacement of 176 transformers or 61% of total transformer fleet*;

Increase in installed capacity by 2025 – ca. 800 MW, increase in output –
1,4 TWh/year (see slide 50);

Turbines
Targets, % of technical wear-out
100%
98%
100%
100%
89%
88%
69%
68%
65%
65%
56%
44%
32%
54%
50%
35%
40%
34%
Key expected effects: improvement of reliability and safety of facilities,
extension of time of operation by 30-40 years, efficiency improvement,
decrease in the amount of water released through spillways during flood
periods, decrease in operating costs.
w/o rehab
* - including 2011
% of wear-out as of 01.01.2011
Target wear-out
31
I. About the company. Key highlights of 2014
II. Operating results
III. Financial results
IV. Investments and development
V. Priorities and expectations
Outlook for 2015
Construction
Revision of 2015 capex plan as compared to earlier funding plan in 1Q’15 based on external funding availability, observance of covenants and
prioritization of projects;
Completion of 100 MW Gotsatlinskaya and 140 MW Zelenchukskaya hydropower plants by year-end;
Increase of Boguchanskaya reservoir level and hydropower plant’s rated capacity during spring flooding in 2015;
Launch of the first production at Boguchansky aluminium smelter by year-end
Further rehabilitation and modernization of hydropower plants
Regulatory environment/power market
Weak consumption dynamics in 2015 expected, but effect on hydropower generation will be limited;
Indexation of regulated gas tariffs at least 7.5% starting from 2H’15 should somewhat support unregulated power prices;
No change in DPM contracts (at least until 2021) or KOM remuneration for hydro;
Deregulation of 65% of capacity sales from hydro in Siberia as of May 2014 through 2016, 80% - in 2016, 100% - in 2017 and onwards. Additional
EBITDA from deregulation in 2015 – ca. RUB 2-2.5 bn;
Updated capacity auctions (KOM) rules for 2016 expected by year-end.
Corporate development/Financials
Further divestment of non-core assets or non-controlling stakes
Headcount reduction of 20% of non-operating personnel in parent company – JSC RusHydro – and all major subsidiaries
Payout of 25% of net profit as dividend
Focus on repayment of outstanding debt with own cash, existing committed credit lines and potential refinancing with domestic or other sources
33
Financial outlook
Factors/opportunities for growth in 2015
24
↑ Implementation of operating cost optimization program;
↑ Increase in prices on the “day-ahead” market in the 1st pricing
zone following indexation of gas prices for industrial consumers
from June 1, 2015;
↑ Launch of the Zelenchugskaya HPP-PSPP and Gotsatlinskaya HPP
in terms of DPM till the end of 2015;
↑ Deregulation of capacity sales from hydro in the second price
zone;
↑ Increase in prices of the competitive capacity auctions (KOM) in
the 2nd pricing zone in 2015 as compared to 2014;
↑ Divestment of non-core assets;
↑ Extended flood period in case of moderate temperatures and
heavy rainfalls in the 1st and 2nd pricing zones;
↑ Decrease in the number of non-operating personnel
13
79
26
73
64
Risks to growth in 2015
44
37
↓ Water inflows to major reservoirs of the pricing zones lower
than long-run average
26
↓ Decrease in prices of the competitive capacity auctions (KOM)
in the 1st pricing zone in 2015 as compared to 2014
2009
2010
2011
Operating EBITDA (RUB bn)
2012
2013
2014
Special investment component (RUB bn)
2015
↓ Stagnation/decrease in prices on the day-ahead market due to
lower demand
↓ Increase in fuel expenses due to increase in heat load and/or
interruptions in fuel supplies
34
Distribution of profit and dividend payment
Dividend payments*
Ключевые моменты
 In March 2014, BoD approved changes to RusHydro’s dividend policy aimed
at dividend payout from consolidated net profit of the Company calculated
under IFRS;
 Minimal amount of dividend payment set by the dividend policy – 5% of net
profit, the main shareholder’s – Russian government – requirement is 25%
payout;
 RusHydro is committed to gradual and consistent increase of yearly dividends
to benefit all shareholders, together with the company’s development
priorities and its financials.
Dividend yield of comparable Russian companies
Krasnoyarskaya HPP
Quadra
E.ON Russia
RusHydro
Irkutskenergo
Mosenergo
Inter RAO
Enel Russia
TGK-1
OGK-2
Volzhskaya TGK
5.2
3,7
 RusHydro is one of the few Russian state-owned utilities companies paying
and consistently increasing dividend payments from 2010;
2011
0.00%
1.94%
0.00%
0.52%
0.44%
0.62%
0.03%
0.00%
0.22%
0.27%
0.00%
6.0
CAGR - 25%
2,5
2,5
2010
2011
2012
2013
2014
DPS and dividend yield**
2012
4.87%
2.59%
2.57%
0.79%
0.77%
1.72%
0.00%
0.00%
0.51%
0.13%
0.00%
2013
0.00%
0.00%
10.81%
1.29%
3.27%
2.20%
0.00%
0.00%
1.72%
0.00%
0.00%
2014
0.00%
0.00%
16.18%
2.42%
5.38%
4.60%
0.00%
4.99%
2.59%
0.00%
0.00%
2
4,0%
1.56
DPS, kopecs.
1,5
1
1,36
Div. yield, %
0,86
0,96
2,3%
3,0%
ca.3%
0,79
2,5%
2,0%
1,3%
0,5
3,5%
1,5%
1,0%
1,0%
0,6%
0
0,5%
2010
2011
2012
2013
2014
* - Expected dividend payment for 2014. As of April 13, 2015, the company has not announced the Board of Directors ‘recommendation to the AGM
** - The dividend payment is calculated as at the date of announcement of the Board of Directors ‘recommendation to the AGM on the dividend
35
JSC RusHydro







JSC RAO ES of East
Efficiency improvement and financial strengthening action plan
 Implementation of measures aimed to increase energy efficiency: efficient load of equipment; actions aimed at energy savings;
 Improvement of the efficiency of fuel supply: implementation of gas supply program; implementation of experimental alternative (off-design) coal-firing
program; signing of the addendum to the agreement with the investors of “Sakhalin-1” project in terms of decrease in current gas price with lowering
coefficient;
 Decrease in the number of personnel as well as optimization of organizational structure;
 Reduction of outlays for technical upgrade and reconstruction;
 Flattering of capex schedule for new and continuing projects.
Moratorium on external borrowings till rates decrease to acceptable levels;
Decrease in technical upgrade and reconstruction outlays;
Flattering of capex outlays in terms of construction of new projects and completion of construction;
Reduction of non-operating personnel in JSC RusHydro and all major subsidiaries;
Creation of own transport company and transfer of transportation services to the Group level;
Transfer to the unified treasury of the Group;
Divestment of non-core assets
JSC ESC RusHydro
 Strengthening of operating control over customers’ payment discipline on the retail market, individual interaction with major constant non-payers;
 Implementation of measures aimed at retention of customers in the area of controlled retailers (last resort suppliers) and attraction of new consumers;
 Differentiation of retail premiums to reduce retail premiums for major customers;
 Improvement of measures aimed at collecting overdue accounts receivable: total and partial limitation, claims and prejudicial actions;
 Line and operating personnel efficiency improvement through rationing the most intensive operations and functions;
 Development of own billing system based on the newest technological platform with advanced options in terms of accounts receivable (more automated
options, speeding up data processing, customer base quality improvement);
 Securing concessional loans to rebuilt current assets in terms of anti-crisis measures implemented by the Russian government.
36
RAO ES of East Subgroup: current position
Average annual inflation, tariffs, costs for 2009-14
RAO ES of East Holding debt vs. EBITDA dynamics
Average annual growth of personnel costs
Net debt
Financial debt
Average annual growth of repair costs
12,0%
7,6%
EBITDA
Average fuel price
9,8%
Average annual heat tariff
Average annual el. tariff
37
46
2009
11
39
44
2010
12
48
52
2011
13
47
53
12
57
2012
65
2013
17
65
78
15
Average annual inflation
11,0%
7,3%
7,8%
2014
Contributing factors for high leverage of RAO ES of East
 RUB 39.9 bn of current loan portfolio were transferred to RAO ES of East
holding on July 1, 2008, in the process of restructuring of JSC RAO UES of
Russia
 Coverage of the lack of funds as a result of insufficient tariffs – RUB 16.15 bn
 Working capital financing, incl. coverage of growth of accounts receivable –
RUB 5.9 bn
 Implementation of the investment projects with no return on investments
(gas supply to generating facilities, preparation to APEC 2012) – RUB 20.47
bn – as per government’s requests
Proposed solutions to improve the company’s financial situaiton
 Grants to compensate part of interest on loans;
 Improvement of direct long-term bilateral agreements with customers (incl.
take-or-pay) in non-pricing zone and isolated energy systems through
amendments to the federal law “On electric power” (the amendments have
been developed);
 Introduction of long-term model for tariff regulation calculating return on
capital invested in the Far-Eastern electric power development;
 Approval of mechanism for compensation of shortfall in income of RAO ES of
East;
 Implementation of mechanisms of tax benefits for new power projects;
 Transfer of supply companies to direct payments with customers.
37
RAO ES of East Subgroup: move to efficient long-term regulation
Existing tariff (in general)
𝑇𝑖 = 𝑂𝑝𝐸𝑥 ∗ 𝑖𝑖 + 𝐶𝑎𝑝𝐸𝑥/𝑚
𝑖_𝑖 – inflation
m – period of capital depreciation
Tariff includes depreciation, return on capital is
not included.
 Annual losses;
 Downgrading of operating assets
due to lack of funds to upgrade the
equipment;
 Lack of funds for repayment of
loans and interest payment.
Tariff required by investor
𝑇𝑖 = 𝑂𝑝𝐸𝑥 ∗ 𝑖𝑖 + 𝐶𝑎𝑝𝐸𝑥 ∗/𝑛 + 𝐶𝑎𝑝𝐸𝑥 ∗ 𝑟𝑖
𝑟𝑖 – capital yield higher than inflation
n – period of return on capital
Существу
ющий
тариф
On April 2, 2015, The Federal Tariff Service of Russia submitted to the government draft proposals on the long-term tariff regulation in the Far East of Russia
Tariffs for power generation
Grid tariffs
 Flexible mechanisms of return on invested
capital considering small territories of isolated
energy systems (similar to DPM);
 Extension of the long-term regulation period
to 20 years for grid companies of non-pricing
zone;
 Return to special investment funds mechanism
in capacity tariff;
 Enabling of the long-term regulation of grid
companies of isolated energy systems;
 Introduction of tax levy to stimulate
development of renewables;
 Development of simplified version of RABregulation and long-term indexation for grid
companies of isolated energy systems;
 Increase in conservative expenditure base of
power suppliers (consequence of tariff
regulation policy) during tariff-setting
End-consumer tariffs
 Development of budget programs for
minimization of negative consequences from
introduction of a new tariff regulation system
for consumers;
 Consideration of parameters of the long-term
forecast of social and economic development
of Russia drawn up by the Ministry of
economic development.
 Limitation of smoothing mechanisms’ use by
the regulators.
38
Measures to improve the investment attractiveness of hydro power
Deterrent factors of new hydropower development
In the current economic conditions construction of hydro projects is
unattractive to investors due to the following factors:
Infrastructure role of hydropower
New hydropower projects have a number of unique characteristics in terms
of availability of power, transport and water infrastructures:

far-off locations of promising generating projects with no required
infrastructure;
 Flexible capacity

high capital intensity of power generating facilities‘ construction and
long period of construction due to large size of these projects and use
of unique project schemes.
 Renewable and environmentally friendly sources used for electricity
generation that reduce emissions and increase energy efficiency of
the economy.
 No fuel component in production costs
In the environment of lack of budget funds required for implementation of all planned projects, private investments should be attracted, the
model of wholesale and retail electricity and capacity markets should be improved, public-private partnership mechanisms should be
developed.
Essential measures to improve investment attractiveness for new hydropower development
 Implementation of hydropower projects based on public-private partnership (PPP)
(development of legal act regulating opportunity to apply PPP mechanism in hydro power);
 Providing long-term state guarantees to strategic investors;
 Establishment of long-term policies on the electricity and capacity markets;
 Tax benefits and guarantee of availability of long-term funding.
39
Proposal for PPP mechanism in new hydro power development
 The state via authorized company (JSC ‘Dam’) funds project works (PD), construction of hydro technical facilities and reservoir zone through acquiring long-term
bonds;
 Private investor via its own subsidiary (JSC ‘HPP’) acquires the equipment and funds power distribution scheme;
 After project commissioning JSC ‘Dam’ leases hydro technical facilities to JSC ‘HPP’.
 The amount of rent is determined based of capital investments of JSC Dam and maturity of bonds (30-35 years).
 JSC ‘HPP’ operates the hydropower plant and pays rent to JSC ‘Dam’ from the revenue from electricity and capacity sales.
cash
Private investors
State
other flows/
services
investments
shares
long-term bonds
hydro dam rent
R&D Institutes
JSC ‘Dam’
(100% state-owned)
Civil works contractors
investments
rent payment
Suppliers
JSC ‘HPP’
(100% subsidiary of
investor/consortium of investors)
Customers
40
Long-term development program and new KPIs
 On November 20, 2014, the Board of Directors approved a long-term development program of RusHydro Group.
 In order to evaluate execution of all indicators, included in the methodology of calculation and valuation of indicators of the long-term development program, the
integrated ratio of implementation of the long-term development program had been developed to evaluate performance based on percentage of each indicator
(see below).
Strategic goals of the long-term development program
Long-term development program objectives of RusHydro Group
 reliability and safety improvement of the Company’s generating
facilities
 sustainable development of electricity generation
 value accretion
 Increase in asset value through implementation of modernization of operating
facilities and further development of electricity generation;
 Maintenance of the key infrastructure utility systems, their operations and
safety;
 Extend and improve the Company’s presence in growth territories and
enhance operating efficiency;
 Implementation of innovative projects to ensure technological leadership and
sustainable development
Integrated innovative factor, 5%
TSR, 5%
Introduction of corporate governance code in
accordance with the requirements, 5%
ROE, 10%
5%
Share capital efficiency (EBITDA / Average annual
share capital), 10%
Labor intensity (Number of employees per
100 MW of available capacity), 10%
Share of procurements from small and medium
businesses, 5%
Implementation of capacity
commissioning schedule, 5%
5%
5%
10%
10%
Financial leverage ratio, 15%
15%
10%
Limitation of net debt/EBITDA, 15%
5%
5%
15%
15%
Reliability criteria, 15%
41
2015 disclosure & IR calendar
April 23
1Q 2015 operating results
April 29
1Q 2015 RAS results
April 28-30
JPMorgan CEEMEA Conference (London)
May (TBC)
VTB Capital Investment Forum "Russia calling!" (London)
May 20-21
Morgan Stanley GEMs (London)
June 9-10
BofA Merrill Lynch Utilities & Renewables Conference (London)
June (TBC)
Renaissance Capital Investor Conference (Moscow)
Late June *
Annual General Meeting of Shareholders
Early July **
Dividend record date
July 8-9
Morgan Stanley GEMs Conference (New York)
June 30
1Q 2015 IFRS results & conference-call
July 23
2Q 2015 operating results
July 30
1H 2015 RAS results
August 28
1H 2015 IFRS results & conference-call
September (TBC)
Sberbank CIB Russia & CIS Conference (London)
September 10
HSBC Conference (London)
September (TBC)
Morgan Stanley Utility Conference (London)
Sep 30 – Oct 2
VTB Capital Investment Forum "Russia calling!" (Moscow)
October 22
9M 2015 operating results
October 29
9M 2015 RAS results
November (TBC)
BofA Merrill Lynch Russia & CIS Investor Conference (London)
November 9-10
Goldman Sachs CEEMEA Conference (London)
December 15
9M 2015 IFRS results & conference-call
* - The Annual General Shareholders Meeting is held no earlier
than two months and no later than six months after the end of the
fiscal year.
** - In accordance with the Federal law No. 282-FZ of December
29, 2013, from 2014 the dividend record date may not be earlier
than 10 days, and may not be later than 20 days after, the date of
the resolution of the general shareholders meeting approving the
payment of the dividend.
42
Appendices
Segment review* (1/3) – Hydropower: hit by low water and “tariff freeze”
FY’14 and 4Q’14 results (IFRS), RUB mn
4Q’14
4Q’13
Key highlights
chg
FY’14
FY’13
chg
Revenue
23,433
25,303
-7.4%
98,581
99,138
-0.6%
from external
companies
21,136
21,636
-2.3%
89,177
88,882
0.3%
- sales of electricity
14,119
15,747
-10.3%
64,016
66,132
-3.2%
54
47
14.9%
144
141
2.1%
6,722
5,783
16.2%
23,467
22,317
5.2%
241
59
308.5%
1,550
292
430.8%
2,297
3,667
-37.4%
9,404
10,256
-8.3%
- heat sales
- sales of capacity
- other revenue
from intercompany
operations
Gain on disposal of
subsidiaries and
associates
-
224
n/a
-
224
n/a
(12,080)
(10,474)
15.3%
(41,233)
(36,244)
13.8%
Depreciation
(3,674)
(2,408)
52.6%
(12,173)
(11,380)
7.0%
Non-cash items
(5,358)
(17,628)
-69.6%
(9,560)
(28,826)
-66.8%
EBITDA
11,353
15,053
-24.6%
57,348
63,118
-9.1%
48.4%
59.5%
-11.1pp
58.2%
63.7%
-5.5pp
15,277
10,819
41.2%
42,496
35,632
19.3%
113,060
102,576
10.2%
Operating expenses
EBITDA margin
Capex
Debt
 Average selling spot power prices in European Russia in FY’14
– RUB 1,227/MWh (+9.1%), in 4Q’14 – RUB 1,241/MWh
(+4.8%); in Siberia in FY’14 – RUB 777/MWh (+18.1%), in
4Q’14 – RUB 977/MWh (+48.9%);
 In 4Q’14, hydropower and pumped storage power plants
decreased electricity generation by 23.5% to 17,527 GWh, in
FY’14 – by 12.1% to 84,115 GWh;
 Gas tariffs were hiked 15% from July 1, 2012 and July 1,
2013; cancellation of gas tariff indexation in 2014 so far led
to stabilization of spot prices in the 1st price zone;
 Weak production was partly offset by partial liberalization of
capacity sales in Siberia.
* See full segment information in Note 5 of the IFRS report
44
Segment review* (2/3) – RAO ES of East: supported by low hydro and T&D business
Key highlights
FY’14 and 4Q’14 results (IFRS), RUB mn
52,925
48,908
8.2%
162,699
152,829
 The electricity generation by the plants of RAO ES of East in 4Q
2014 – 10,079 GWh (+21.0%), in FY 2014 – 31,155 GWh (+3.8%);
6.5%
48,150
42,494
13.3%
149,935
138,925
7.9%  Heat output was down by 2%;
29,167
25,059
16.4%
93,888
86,550
8.5%
11,780
11,111
6.0%
33,912
33,002
2.8%  Government grants in FY’14 decreased by 6% to RUB 12.4 bn;
- sales of capacity
1,084
910
19.1%
4,268
3,102
- other revenue
6,119
5,414
13.0%
17,867
16,271
from intercompany
operations
186
407
-54.3%
351
government grants
4,589
6,007
-23.6%
12,413
13,233
-6.2%
Operating expenses
(43,792)
(37,642)
16.3%
(147,301)
(135,797)
8.5%
Depreciation
(1,816)
(1,486)
22.2%
(7,289)
(5,174)
40.9%
Non-cash items
(4,772)
(4,875)
-2.1%
(5,372)
(4,830)
11.2%
11,266 -18.9%
15,398
17,032
-9.6%
4Q’14
Revenue
from external
companies
- sales of electricity
- heat sales
4Q’13
chg
FY’14
FY’13
chg
37.6%  Additional revenue as a result of resumption of “last mile”
9.8%
9,133
EBITDA margin
17.3%
23.0%
-5.7pp
9.5%
Capex
8,158
7,838
4.1%
19,486
16,821
15.8%
54,496
44,492
22.5%
* See full segment information in Note 5 of the IFRS report
arrangement in the Far East;
671 -47.7%
EBITDA
Debt
 Ca. 7% average power tariff increase in FY’14
11.1% -1.6pp
45
Segment review* (3/3) – Retail: slow recovery
FY’14 and 4Q’14 results (IFRS), RUB mn
Key highlights
 Gradual recovery in profitability on the back of higher retail tariffs;
4Q’14
Revenue
4Q’13
chg
FY’14
FY’13
chg
24,113
22,209
8.6%
82,230
79,168
3.9%
from external companies
24,108
21,765
10.8%
82,211
78,712
4.4%
- sales of electricity
23,833
22,026
8.2%
81,307
77,951
4.3%
275
-261
n/a
904
761
18.8%
5
444
-98.9%
19
456
-95.8%
(23,941) (22,015)
+8.7%
(81,092) (78,933)
+2.7%
- other revenue
from intercompany
operations
Operating expenses
Depreciation
(178)
(173)
2.9%
(695)
(670)
3.7%
Non-cash items
(526)
(527)
-0.2%
(560)
(1,170)
-52.1%
172
194
-11.3%
1,138
235
384.3%
EBITDA
EBITDA margin
0.7%
0.9%
-0.2pp
1.4%
0.3%
1.1pp
Capex
74
114
-35.1%
146
233
-37.3%
Debt
-
-
3,403
2,196
 Total electricity output in 1Q’14 – 10,632 GWh (-9.6% year-on-year);
in 2Q’14 – 7,937 GWh (-13% year-on-year) in 3Q’14 – 7,776 GWh
(+0,7 year-on-year); in 4Q’14 – 10,622 GWh (+3% year-on-year).
 In FY’14, RusHydro's electricity retail companies have decreased
output by 5% to 37,564 GWh as several major industrial consumers
switched to their own wholesale purchases following market
liberalization.
55.0%
* See full segment information in Note 5 of the IFRS report
46
Multiples of select international peer group
EV/ Revenue
EV/EBITDA
2015E
RusHydro
2016E
2017Е
4,3
4,1
3,9
Discount to “hydro companies”*
Discount to RES companies of developed markets
Discount to RES companies of developing markets
-49%
-50%
-53%
-44%
-50%
-50%
-47%
-47%
-46%
«Hydro companies»
Verbund (Austria)
Cia Energetica de Sao Paulo (Brasil)
Tractebel Energia SA (Brasil)
AES Tiete (Brasil)
Jaiprakash Hydro Power Ltd (India)
NHPC (India)
CEMIG (Brasil)
China Yangtze Power (China)
Average
Median
12,5
3,1
8,9
5,8
11,4
8,0
6,8
11,2
8,5
8,5
11,8
7,3
6,9
6,9
7,2
7,6
7,0
11,3
8,2
7,2
11,0
8,4
5,9
5,8
5,9
7,5
8,9
n/a
7,6
7,5
For reference. Russian peers
TGK-1
3,1
3,1
3,2
RusHydro
«Hydro companies» (median)
Discount to “hydro companies”
RES companies of developed markets
Discount to RES companies of developed markets
RES companies of developing markets
Discount to RES companies of developing markets
2015E
1,0
3,9
-75%
5,7
-83%
5,9
2016E
0,9
4,2
-78%
5,7
-84%
5,4
2017Е
0,9
3,9
-77%
5,3
-83%
5,7
-83%
-83%
-84%
2015E
5,0
13,0
-62%
31,0
-84%
15,0
-67%
2016E
4,7
11,8
-61%
23,5
-80%
13,0
-64%
2017Е
4,1
9,2
-55%
21,2
-80%
10,6
-61%
P/E
RusHydro
«Hydro companies» (median)
Discount to “hydro companies”
RES companies of developed markets
Discount to RES companies of developed markets
RES companies of developing markets
Discount to RES companies of developing markets
47
Potential development of flood control hydropower plants in the Far East
Projects
The abnormal floods in the Far East of Russia in 2013 revealed an
unresolved problem of unregulated rivers. RusHydro has been
commissioned to develop the feasibility studies of storage-based
hydropower plants in order to prevent future abnormal floods in
the region.
Gilyuyskaya HPP, 462 MW
Selemdzhinskaya HPP, 300 MW
Construction of flood control HPPs could result in:
Nizhne-Nimanskaya HPP, 600 MW
 control of over 90% of water flow into the creek of the Zeya river;
 territories of over 80,000 ha are safe from floods;
Nizhne-Zeyskaya HPP, 400 MW
 more than 300,000 people are protected from floods.
commissioning is possible before 2025
commissioning after 2025
The following conditions are required to make an investment decision on projects

Guaranteed sale of electricity produced by HPPs:
–
technical ability to supply power to deficient regions of the Russian Far East (the South of Primorye)
–
exploring potential and taking essential actions to provide export of power to China

Determine funding sources and securing economic efficiency of projects (implementation of public private partnership mechanism, strategic
partners’ participation)

Alternative technical solutions (construction of flood control hydro technical facilities without power generation capacity) should be sufficiently
explored and ruled out
48
Age of HPPs in Russia and in the world
Russia, MW
Age of HPPs per country
USA
40%
Russia
20%
Canada
22%
Brazil
India
China
47%
57%
48%
1%
6%
34%
21%


2000
5000
30%
4000
1500
65%
3000
1000
90%
31-50 yrs
6000
India, MW
2500
23%
73%
10%
≥ 51 yrs

13%
7000
2000
1000
0
500
0
≤ 30 yrs
Brazil, MW
The Russian Federation operates one of the
largest and at the same time one of oldest
hydropower generation fleets;
Underinvestment in the 1990s and 2000s
negatively impacted reliability and safety of
generating facilities and the equipment;
Technical reconstruction and modernization
of hydropower allows to extend the operation
period of the equipment by an average of 3040 years.
Canada, MW
6000
5000
5000
4000
4000
3000
2000
1000
0
USA, MW
3000
2000
1000
0
China, MW
6000
30000
5000
25000
4000
20000
3000
15000
2000
10000
1000
5000
0
0
49
Increase in output and capacity as a result of hydro modernization
800,0
1 600,0
Прирост
за счет
внутристанционной
Increaseвыработки
of output due
to in-house
optimization оптимизации
Increaseвыработки
of output due
lower
water spills
Прирост
за счет
снижение
холостых сбросов воды
1 400,0
Increaseвыработки
of output due
to efficiency
gains
from
Прирост
за счет
увеличения
КПД
ГАnew units
600,0
1 200,0
Increaseвыработки
of output due
to removal
of technical
constraints
Прирост
за счет
сокращения
технических
ограничений
Increaseмощности
of installed
capacity, in MW
Прирост
в МВт
500,0
1 000,0
400,0
800,0
300,0
600,0
200,0
400,0
100,0
200,0
0,0
2012
Increase of output, GWh *
Increase of capacity, MW
700,0
0,0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
* - accumulated increase of output
50
Thomson Reuters Extel 2013:




No.1 IR Team in Russian Utilities
Best CFO, mid-cap (Russia), #1
Best IRO. mid-cap (Russia), #2
Best overall IR, mid-cap (Russia), #3
Thomson Reuters Extel 2012:
No.1 IR Team in Russian Utilities
Thomson Reuters Extel 2011:
No.1 IR Team in Russian Utilities
IR contacts
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