Investor Presentaiton
Total
Operational Efficiency Improvement Program
Closing Cost Gap
Cost Gap vs Peer group (RUB bln)*
The project was extended to 2018
GCB Gap and optimization targets
Economy potential: 30-40%
*GCB results for Fixed-line Business in 2013
Drivers
%
RUB bln
Network
49.1
49%
32.6
IT
16%
3.4
Support & Overhead
33%
6.9
Customer Service
31%
3.6
19.0
16.5
11.0
in 2018
7.6
Target:
reduce
Gap to
20-25%
Sales
14%
1.0
Product & Marketing
38%
0.7
Gap 2013
2015
2016
2017
2018
Non-process related costs
12%
0.9
The Program Effect: increasing OIBDA & FCF
36%
49.1
Russian peers: ~17-20% gap
European peers: ~10-15% gap
Source: Company estimates
OIBDA 2013
Macro effects
Business model
change
Budget cuts
Procurement
Organisational
transformation
Operational
Efficiency
Program
Real estate
optimisation
OIBDA 2020
60
60
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