#1LR LSR Group Investor Presentation#2Agenda 1. 2010 financial results 2. Market update LSP LSR Group 2#3Key financials RUB m Revenues EBITDA EBITDA margin Normalised operating profit 2008 2009 2010 49,813 51,024 49,950 13,178 14,732 8,687* 26% 29% 17% 11,130 12,327 6,307 Normalised operating profit margin 22% 24% 13% Changes in fair value of investment property (16,143) (1,752) (36) Reported net profit (8,007) 4,590 1,742 Gross cash flow 13,335 15,235 9,035 Operating cash flow 4,373 3,470 (2,375) Capitalised capital expenditure 10,330 7,674 4,544 Total debt Net debt Net debt/EBITDA 36,874 39,541 31,703 33,628 36,645 30,376 2.6 2.5 3.5 * one-off effect of disposal of aerated concrete business in the Baltic states resulted in the net loss of RUB 523m LR LSR Group 3#4Key financials Sales (RUB m) EBITDA (RUB m) and EBITDA margin (%) Change -2% 49,813 51,024 49,950 13,178 14,732 Change -41% 8,687 29% 26% 17% 2008 2009 2010 2008 2009 2010 Sales revenue and EBITDA breakdown¹ 2010 Sales revenue breakdown 67% Real Estate Development, Construction and Commercial Real Estate 79% 33% Building Materials, Aggregates and Construction Services 21% 2010 EBITDA breakdown Note: 1) Before inter-group eliminations, unallocated amounts and other operations LSP LSR Group 4#5Real estate development Sales (RUB m) Change -9% EBITDA (RUB m) and EBITDA margin (%) Change -44% 23,417 21,198 2009 2010 Key financials 9,201 5,150 39% 24% 2009 2010 LSP LSR Group Total¹ Elite Real Estate Business Class & Mass-Market Real Estate in St. Petersburg Business Class & Mass-Market Real Estate in Urals 2009 2010 Change 2009 2010 Change 2009 2010 Change 2009 2010 New contract sales (th m2) to retail customers under contracts with the government Transferred to customers (th m2) to retail customers under contracts with the government 26 35 34% 209 104 (50)% 23 39 Change 65% 62 104 68% 147 76 29 (62)% 117 233 99% 39 48 23% 117 85 (27)% 148 Completed (th m2) 85 3 (97)% 82 283 244% 1 82 Sales revenue (RUB m) 23,417 21,198 (9)% 13,287 4,284 (68)% 8,031 12,584 57% 1,805 2,285 27% EBITDA (RUB m) 9,201 5,150 (44)% 6,577 1,897 (71)% 2,426 2,603 7% 233 293 26% EBITDA margin (%) 39% 24% 49% 44% 30% 21% 13% 13% Gain/Loss on revaluation (2,132) (38) (2,132) (38) of investment property (RUB m) Notes: Total is shown after inter-segment eliminations and before inter-group eliminations and unallocated amounts 1) Also includes Gated Communities, Real Estate Moscow and other minor operations 5#635 30 25 20 20 15 10 11 5 Real estate development: sales in St. Petersburg LR LSR Group New contract sales in mass market segment (excluding governmental contracts) 20 19 77 17 17 17 14 33 32 12 10 8 '000 m2 6 5 st 4 2 0 0 10/2009 2Q/2009 3Q/2009 4Q/2009 1Q/2010 20/2010 3Q/2010 4Q/2010 New contract sales in elite segment السار 1Q/2009 2Q/2009 3Q/2009 4Q/2009 1Q/2010 2Q/2010 3Q/2010 4Q/2010 '000 m2 6#7Projects launches planned in 2011 Elite Real Estate in St. Petersburg Net sellable area (sq.m) Start of Construction Start of pre-sales 76,566 Europe City Phase 1 Kovenskiy 70,936 5,630 November 2011 July 2010 November 2011 June 2011 Mass Market and Business Class Real Estate in St. Petersburg 229,749 Aurora site 14 133,827 March 2011 April 2011 Vostok site 7 18,409 March 2011 March 2011 Vostok site 8 Dolgoozerny Block 5b Antey Block 8 23,091 June 2011 July 2011 5,387 February 2011 March 2011 11,237 April 2011 May 2011 Antey Block 9 14,180 April 2011 Yuzhny site 2 23,960 February 2011 May 2011 March 2011 Real Estate in Moscow 316,209 Novaya Balashikha, Sakramento 30,575 2011 Feb 2011 Yuzhny 285,634 October 2011 October 2011 Real Estate in Yekaterinburg 108,376 Kalinovsky Phase 3 48,795 Kalinovsky h. 8,9 Vosstaniya-Molodezhi Angarskaya Tokarey 25,928 August 2010 October 2008 13,309 January 2011 7,447 12,900 June 2008 March 2010 February 2011 March 2011 March 2011 February 2011 March 2011 LSP LSR Group 7#8Construction Sales (RUB m) Change +2% 13,045 12,756 2009 Key financials 2010 EBITDA (RUB m) and EBITDA margin (%) Total 3,213 25% Change -16% 2,687 21% 2009 2010 2009 2010 Change Sales volume (th. m2) 585 572 (2)% St. Petersburg 488 379 (22)% Moscow 5 69 1,280% Urals 92 124 35% Sales revenue (RUB m) 12,756 13,045 2% EBITDA (RUB m) 3,213 2,687 (16)% EBITDA margin (%) 25% 21% Notes: Total is shown after inter-segment eliminations and before inter-group eliminations and unallocated amounts LSP LSR Group 8#9Building Materials Aggregates Construction Services Revenue/EBITDA in building materials and aggregates LSP LSR Group 8 000 7 000 RUB m 6000 4671 5 000 4000 3000- 2000- 1000 2500- 2000 1500 1000 500 0 Revenue 7029 Change +50% 600 1H 2010 2H 2010 RUB m 1413 2295 0 1H 2010 2H 2010 RUB m 688 856 1H 2010 2H 2010 500 RUB m 400 300 200 100 Change +62% (100) Change +24% 1H 2010 (48) 1000 900 800 RUB m 700 600 500 400 302 300 200 100 200 150 100 RUB m EBITDA 569 2H 2010 916 1H 2010 2H 2010 Change +203% Change +33% 211 158 1H2010 2H2010 6#10Building materials Sales (RUB m) Change +14% 11,700 10,273 2009 2010 Key financials EBITDA (RUB m) and EBITDA margin (%) 462 521 5% 4% 2009 2010 LSP Change +13% Total¹ Reinforced Concrete Ready-Mix Concrete Bricks Aerated Concrete 2009 2010 Change 2009 Sales volume 288 342 2010 Change 19% 2009 2010 Change 2009 2010 Change 2009 2010 Change 815 1,112 36% 169 172 2% 737 795 8% (th. m3) Sales revenue 10,273 11,700 14% 3,792 4,820 27% 2,249 2,001 (11)% 1,331 1,263 (5)% 1,633 1,513 (7)% (RUB m) EBITDA (RUB m) 462 521 13% 117 217 86% 76 229 202% EBITDA margin (%) 5% 4% 3% 5% 3% 11% 176 13% 8 1% (95)% 70 114 61% 4% 8% Notes: Total is shown after inter-segment eliminations and before inter-group eliminations and unallocated amounts For Bricks sales volume is shown in millions of non-formatted units 1) Also includes our other minor building materials operations LSR Group 10#11Aggregates Sales (RUB m) Change +3% 3,707 3,603 2009 2010 Key financials EBITDA (RUB m) and EBITDA margin (%) 1,369 Change -11% 1,218 38% 33% 2009 2010 LSP LSR Group Total Sand Crushed Granite 2009 2010 Change 2009 2010 Change 2009 2010 Change Sales volume (th. m3) 10,207 9,820 (4)% 3,593 3,980 11% Sales revenue (RUB m) 3,603 3,707 3% 2,106 2,205 5% 1,522 1,591 5% EBITDA (RUB m) 1,369 1,218 (11)% 1,092 1,031 (6)% 278 187 (33)% EBITDA margin (%) 38% 33% 52% 47% 18% 12% Notes: Total is shown after inter-segment eliminations and before inter-group eliminations and unallocated amounts 11#1290 80 Sales of building materials and aggregates in St. Petersburg 70 57 60 51 50 40 30 20 140 10 0 Sales of reinforced concrete 69 69 52 300 +12% YoY 76 78 70 250 10/2009 20/2009 3Q/2009 4Q/2009 10/2010 2Q/2010 3Q/2010 4Q/2010 120 120 107 100 80 64 60 40 20 1.4 1.2 10 1.0 0.8- Sales of aerated concrete 75 115 107 200 Sales of ready-mix concrete 154 '000 m3 144 150 127 121 105 100 50 0 -9% YoY 60 216 262 174 10/2009 20/2009 3Q/2009 4Q/2009 10/2010 2Q/2010 3Q/2010 4Q/2010 50 47 44 42 40- '000 m3 30 62 20 50 10/2009 2Q/2009 3Q/2009 4Q/2009 1Q/2010 2Q/2010 3Q/2010 4Q/2010 0.6 0.5 0.4 -0 0.2 0.0 1.3 Sales of crushed granite 0.9 0.9 0.6 1.3 1.1 1.0 10/2009 20/2009 3Q/2009 4Q/2009 1Q/2010 2Q/2010 3Q/2010 4Q/2010 10 +12% YoY 4.0 3.5 3.0 Sales of bricks 57 +46% YoY '000 m3 37 illi mnf +2% YoY 0 10/2009 20/2009 3Q/2009 4Q/2009 1Q/2010 2Q/2010 3Q/2010 4Q/2010. Sales of sand -4% YoY 3.5 2.5 2.3 2.4 2.1 m m3 2.0 1.5 1.0 0.5 0.0 3.6 2.5 2.3 ران 1.4 10/2009 2Q/2009 3Q/2009 4Q/2009 10/2010 2Q/2010 3Q/2010 4Q/2010 m m3 LSP LSR Group 12#13Construction services Sales (RUB m) Change -12% EBITDA (RUB m) and EBITDA margin (%) 1,764 1,544 Change -37% 587 2009 2010 Key financials 369 33% 24% 2009 2010 Total 2009 2010 Change Sales revenue (RUB m) 1,764 1,544 (12)% EBITDA (RUB m) 587 369 (37)% EBITDA margin (%) 33% 24% Notes: Total is shown after inter-segment eliminations and before inter-group eliminations and unallocated amounts LSP LSR Group 13#14Debt maturity profile Total debt: RUB 31,146m RUB m 3,217 3,943 726 3,311 6,570 1,737 15,585 LSP LSR Group 1H 2011 2H 2011 2012 2013 2014 2015> Total RUB m 3.000 346 2,399 5,853 1,019 12,940 24,974 USD m 2 13 24 24 24 106 190 EUR m 4 0 5 0 0 0 9 Total RUB m 3 217 726 3,311 6,570 1,737 15,585 31,146 Note: 1) excluding finance lease liability and other loans 14#15Gross debt by source as of 31 December 2010 LSP LSR Group RUB 36,874m RUB 39,541m 10% 4,073 RUB 31,703m 19% 7,561 Rouble bonds 8,579 23% 21% 6,773 VEB 7% 2,670 Finance lease liability 2,011 5% 3% 1,217 Other banks/loans 3% 1,069 4,144 11% 3% 1,285 24% 7,669 Rosselkhozbank Raiffeisen 2,497 7% 13% 4,944 ABN AMRO/ HSBC 4,722 13% 21% 6,501 Rouble bonds 24% 9,639 VTB 6,212 17% 502 434 2% Finance lease liability Other banks/loans Raiffeisen 16% 5,069 VTB Sberbank 8,709 24% 18% 7,083 13% 4,000 Sberbank 31 December 2008 31 December 2009 31 December 2010 Source: Company 15#16Debt composition as of 31 December 2010 LSP LSR Group RUB 80% Gross debt by currency¹ Source: Company Note: 1) excluding finance lease liability and other loans USD 19% EUR 1% Gross debt composition Finance lease liability 2% Rouble bonds 20% Bank and other loans 78% 16#17Acquisitions/New projects 2010 - 2011 Building Materials & Aggregates: Crushed granite Sand Petrovsky quarry, granite deposits: 25m m3, Annual production capacity: 500 th m3, Jun 2010 KNI, granite deposits: 84m m3, Annual production capacity: 1.1m m3, Feb 2011 8 quarries, sand reserves: 19m m3, Dec 2010 Reinforced concrete Obukhov plant, Annual production capacity: 35 th m3 of reinforced concrete, 90 th m3 of ready-mix concrete, Feb 2011 Real Estate Development & Construction: St. Petersburg Mass market - 34 ha (350 th m2 future NSA) in Kalininsky District, Price: RUB 1.7bn, Mar 2010 Mass market - 9.15 ha (100 th m2 future NSA) in Moscovsky district, Price: RUB 1bn, Dec 2010 Elite-0.36 ha on Krestovsky island, Price: RUB 251m, Sep 2010 Moscow 44 ha (190 th m2 future NSA) in Nakhabino, Moscow region, Price: 20% of future NSA, Apr 2010 60 ha (348 th m2 future NSA) in Leninsky district, Moscow region, Price: 15% of future NSA, Nov 2010 40 ha (325 th m2 future NSA) in Domodedovo, Price: 22.5% of future NSA, Feb 2011 Urals Kamensk-Uralsk ZhBI, Annual production capacity: 70 th m3 of reinforced concrete, 10 th m3 of ready-mix concrete, Feb 2011 Acquisition pipeline: Brick factory in the Moscow region Land plot in Moscow LSP LSR Group 17#18Real estate portfolio by region Breakdown of portfolio by region (Net Sellable Area) Yekaterinburg 6% Moscow 4% Leningrad Region 0.1% Breakdown of portfolio by region (Market Value) Yekaterinburg Leningrad Region 1% 5% Moscow 8% St. Petersburg 90% Region NSA ('000 m2) % of total MV (RUB m) % of total St. Petersburg 7,634 90% 89,701 86% Yekaterinburg 490 6% 5,617 5% Moscow 302 4% 8,423 8% Leningrad Region Total 10 0.1% 1,037 1% 8,436 100% 103,777 100% LSP St. Petersburg 86% Largest part of our real estate portfolio is located in our home market of St. Petersburg within the boundaries of the city Source: DTZ valuation as of 31.12.2010 LSR Group 18#19LSP Real estate portfolio by segment Breakdown of portfolio by segment (Net Sellable Area) Breakdown of portfolio by segment (Market Value) Mass-market 52% Elite 6% Business class 7% Source: DTZ valuation as of 31.12.2010 Elite 25% Offices Mass-market 0.5% 36% Operating Business class offices 10% 0.3% Gated Held for future Gated communities Operating Offices 4% development 34% communities 1% 0.1% offices 4% Held for future development 19% Segment of property Mass-market 4,396 NSA ('000 m2) % of total 52% MV (RUB m) % of total 37,812 36% Elite 504 6% 25,921 25% Business class Offices Operating offices Gated communities Held for future development Total 594 7% 10,450 10% 45 0.5% 4,423 4% 22 0.3% 4,557 4% 7 0.1% 1,181 1% 2,867 34% 19,433 19% 8,436 100% 103,777 100% Well-balanced portfolio with focus on residential development LSR Group 19#20LSP LSR Group Real estate portfolio by stage of development Breakdown of portfolio by stage of development (Net Sellable Area) Under construction Breakdown of portfolio by stage of development (Market Value) Initial concept design 72% 8% Design & permitting 12% Initial concept design 45% Completed 8% Completed 12% Stage of development Initial concept design Design and permitting NSA ('000 m2) % of total MV (RUB m) % of total 6,082 72% 46,643 45% 979 12% 23,482 23% Under construction 705 8% 20,456 20% Completed & partially sold Total 671 8% 13,196 12% 8,436 100% 103,777 100% Design & permitting 23% Under construction 20% We aim to match the stages of development of our portfolio with the levels of demand for real estate Source: DTZ valuation as of 31.12.2010 20#21Agenda 1. 2010 financial results 2. Market update LSP LSR Group 221#22Sales of new apartments '000 m2 1030 670 Sales of new apartments in St. Petersburg 2,520 500 1,459 2,150 631 600 488 448 431 382 320 325 304 10/08 20/08 3Q/08 4Q/08 10/09 20/09 30/09 4Q/09 1Q/10 2Q/10 3Q/10 4Q/10 Source: SPb Realty LSP LSR Group 22 22#23250 200 New residential real estate price development in St. Petersburg, Moscow and Yekaterinburg St. Petersburg Elite Mass-Market 198 216 186 200 203 LSP 150 100 50 39 0 180 160 140 120 100 80 88 60 60 40 40 20 15 2002 Source: SPb Realty 145 40 68 57 74 63 56 28 20 20 26 2003 Moscow IRN Index¹ 64 50 34 80 60 70 70 72 22 2004 2005 2006 2007 2008 2009 2010 Feb 2011 160 117 110 107 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: IRN Notes: Prices as of the end of the respective periods 1) IRN Index is calculated on the basis of prices in both primary and secondary markets 65 60 136 '000 RUB 55 60 Yekaterinburg 56 55 53 50 50 49 48 45 LSR Group '000 RUB '000 RUB 52 51 Apr/07 Sep/07 Apr/08 Sep/08 Apr/09 Aug/09 May/10 Sep/10 Dec/10 Source: Company 23#24Supply of new apartments '000 m2 Source: SPb Realty 473 776 747 Supply of new apartments in St. Petersburg 584 -68% 84% 493 465 421 276 219 200 139 153 10/08 20/08 3Q/08 4Q/08 10/09 2Q/09 3Q/09 4Q/09 1Q/10 20/10 3Q/10 4Q/10 2,580 834 Note: Supply of new housing (apartments) represents residential projects at different stages of development which are offered for sale for the first time during the reported period 1,532 LSP LSR Group 24 24#25Mortgage lending Mortgage lending in Russia 180 160 140 120 100 80 66.3 49.0 80 60 67 39.4 32.6 52 40 24.9 40 33 20 19 26 0 10/2009 20/2009 3Q/2009 4Q/2009 156.5 Average mortgage rates LSP LSR Group 15.0% 14.4% 14.6% 14.6% 14.3% 108.2 14.0% 13.5% 114 13.5% 13.6% 13.5% 87.2 number of loans, 000 13.4% 13.1% 13.1% 13.0% 12.7% - value of loans, bn RUB 12.0% loans in RUB loans in foreign currency 11.1% 11.1% 11.1% 11.1% 10/2010 20/2010 3Q/2010 4Q/2010 Mortgage lending in St. Petersburg 16 000 14 736 14 000 14 296 12 000 10 739 10 000 8000 6 000 546 5574 5 007 4 350 3686 4 000 3901 3018 2681 2000 1412 1400 1640 1764 2032 2565 693 808 1000 1369 1294 1579 1967 0 H 10/08 20/08 3Q/08 4Q/08 10/09 20/09 30/09 4Q/09 10/10 20/10 3Q/10 40/10 Source: SPb Mortgage Agency 11.0% 10.0% 9.0% 10/2009 20/2009 3Q/2009 4Q/2009 10/2010 20/2010 3Q/2010 4Q/2010 LSR mortgage sales by number of deals 27% 24% m RUB 18% number of loans. 13% 10% 7% 2006 Source: Company 3% 0% 2007 2008 2009 Mass market 19% 9% 8% 6% 10/2010 2Q/2010 3Q/2010 4Q/2010 Elite 25#26Contacts Kliment Falaleev 36 Kazanskaya Street, St Petersburg 190031, Russia Phone: +7 812 571 7850 Fax: +7 812 312 8565 Mob: +7 921 953 1641 Email: [email protected] LSR Group Investor Relations Yuri Ilyin 36 Kazanskaya Street, St Petersburg 190031, Russia Phone: +7 812 326 9329 Fax: +7 812 312 8565 Mob: +7 921 906 7777 Email: [email protected] LSP LSR Group 26