Company

Valuation Date
Circularity
Assumption Case
AR12
1H13

NLMK
11-Oct-2013
1
2
Link
Link

Case 2
m USD
PPE
Beginning Balance
Asset Disposals/(Acquisitions)
Sales of PPE
Capex
Depreciation
Ending Balance
Intangibles
Beginning Balance
Investments into intangibles
Amortisation
Ending balance
Retained Earnings
Beginning Balance
Share issuance/(repurchase)
Net Income
Dividends
NCI share of Net Income
Ending balance
NCI
Beginning balance
Add: NCI share of NI
Less: NCI divs
Ending balance
OWC items
Accounts Receivable
Inventory
Other current assets
Accounts payable
Current Income tax liability
Net Balance

2010A

7,316,180
28,363
(26,362)
1,463,209
(279,748)
8,382,478

2011A

2012A

8,382,478
41,751
(26,980)
2,047,852
(402,093)
10,569,828

10,569,828
156,510
(28,692)
1,453,386
(544,227)
11,753,157

2013H1

11,753,157
(1,300)
374,979
(349,958)
10,981,399

2013E

2014E

2015E

2016E

2017E

2018E

2019E

11,753,157
(123,532)
(2,600)
749,958
(699,915)
11,677,068

11,677,068
(6,891)
875,780
(664,679)
11,881,279

11,881,279
(11,109)
1,069,315
(645,061)
12,294,424

12,294,424
(15,641)
1,229,442
(635,163)
12,873,062

12,873,062
(20,674)
1,416,037
(631,207)
13,637,218

13,637,218
(26,347)
1,363,722
(632,816)
14,341,777

14,341,777
(32,890)
1,290,760
(627,798)
14,971,849

141,922
(24,111)
117,811

117,811
(20,885)
96,926

96,926
(20,885)
76,041

76,041
(20,919)
55,122

55,122
(55,122)
-

11,582,368.0
230,362.7
(47,003)
4,350.9
11,770,078.5

11,770,078.5
482,344.7
(122,939)
9,110.1
12,138,594.1

12,138,594.1
733,218.0
(186,842)
13,848.4
12,698,818.4

12,698,818.4
997,514.8
(254,164)
18,840.2
13,461,009.2

13,461,009.2
1,280,109.6
(326,147)
24,177.6
14,439,149.2

14,439,149.2
1,631,978.2
(415,776)
30,823.4
15,686,174.9

15,686,174.9
2,007,623.4
(511,461)
37,918.3
17,220,255.6

(37,225)
(9,110)

(46,335)
(13,848)

(60,183)
(18,840)

(79,024)
(24,178)

(103,201)
(30,823)

(134,025)
(37,918)

(46,335)

(60,183)

(79,024)

(103,201)

(134,025)

(171,943)

1,591,221
2,620,234
49,082
1,608,816
81,980
2,569,741

1,680,357
2,728,665
52,027
1,650,689
92,450
2,717,910

1,799,571
2,879,777
55,929
1,716,877
97,638
2,920,762

1,909,288
3,008,775
59,564
1,768,916
99,849
3,108,863

203,490

181,136

158,611

141,922

(16,268)
181,136

(14,850)
158,611

(25,919)
141,922

(12,056)
129,115

9,171,068.0

10,261,214.0

11,098,635.0

11,582,368.0

1,331,316.0
(378,687)
31,065.0
10,261,214.0

1,261,130.0
(375,776)
42,192.0
11,098,635.0

610,157.0
(116,000)
(14,628)
11,582,368.0

68,297.0
3,149.0
11,538,347.0

(108,334)
31,065

(120,691)
42,192

(41,863)
(14,628)

(32,874)
3,149

(120,691)

(41,863)

(32,874)

5,776

(32,874)
(4,351)
(37,225)

1,259,596
1,580,068
51,994
1,107,434
18,803
1,765,421

1,572,641
2,828,433
59,355
1,622,679
10,994
2,826,756

1,490,951
2,826,933
30,394
1,462,105
23,800
2,862,373

1,497,143
2,530,187
26,581
1,608,587
44,219
2,401,105

1,497,143
2,530,187
26,581
1,601,602
41,992
2,410,318

1,513,933
2,526,343
46,523
1,575,022
65,453
2,446,325

2,025,665
3,141,132
63,436
1,821,641
93,960
3,314,631

Simplified Model
Revenue Growth
Case 1: Revenue Growth
Case 2: Revenue Growth
Case 3: Revenue Growth
Case 4: Revenue Growth

36.0%

40.4%

3.6%

(6.5%)

(6.5%)
-6.5%
-6.5%
-6.5%
-6.5%

1.5%
2.0%
1.5%
1.0%
0.0%

59.1%

66.3%

69.9%

73.6%

73.6%
73.6%
73.6%
73.6%
73.6%

71.8%
71.5%
71.8%
72.5%
73.6%

3.2%

4.7%

3.7%

4.1%

4.1%
4.1%
4.1%
4.1%
4.1%

Selling expenses
Case 1: Selling expenses
Case 2: Selling expenses
Case 3: Selling expenses
Case 4: Selling expenses

8.5%

8.3%

9.4%

8.5%

Taxes other than income tax

Case 1: Taxes other than income tax
Case 2: Taxes other than income tax
Case 3: Taxes other than income tax
Case 4: Taxes other than income tax

1.48%

1.41%

1.40%

1.21%

Production Cost
Case 1: Production Cost
Case 2: Production Cost
Case 3: Production Cost
Case 4: Production Cost
SG&A
Case 1: SG&A
Case 2: SG&A
Case 3: SG&A
Case 4: SG&A

5.5%
6.5%
5.5%
5.0%
4.5%

6.0%
6.5%
6.0%
5.5%
5.0%

7.5%
8.5%
7.5%
6.5%
6.5%

6.5%
7.0%
6.5%
6.0%
5.5%

6.5%
7.0%
6.5%
5.5%
5.5%

70.1%
69.4%
70.1%
71.5%
73.6%

68.4%
67.3%
68.4%
70.4%
73.6%

66.6%
65.3%
66.6%
69.3%
73.6%

64.9%
63.2%
64.9%
68.3%
73.6%

63.1%
61.1%
63.1%
67.2%
73.6%

4.0%
3.9%
4.0%
4.0%
4.2%

3.9%
3.8%
3.9%
4.0%
4.3%

3.8%
3.7%
3.8%
4.0%
4.4%

3.7%
3.6%
3.7%
4.0%
4.5%

3.6%
3.5%
3.6%
3.9%
4.6%

3.5%
3.3%
3.5%
3.9%
4.7%

8.5%
8.5%
8.5%
8.5%
8.5%

8.5%
8.5%
8.5%
8.5%
8.7%

8.5%
8.5%
8.5%
8.6%
8.8%

8.5%
8.5%
8.5%
8.6%
9.0%

8.5%
8.4%
8.5%
8.6%
9.1%

8.5%
8.4%
8.5%
8.7%
9.3%

8.5%
8.4%
8.5%
8.7%
9.4%

1.21%
1.21%
1.21%
1.21%
1.21%

1.23%
1.22%
1.23%
1.24%
1.26%

1.24%
1.23%
1.24%
1.27%
1.30%

1.25%
1.23%
1.25%
1.29%
1.34%

1.27%
1.24%
1.27%
1.32%
1.39%

1.28%
1.25%
1.28%
1.35%
1.43%

1.29%
1.25%
1.29%
1.37%
1.48%

Case 2
Irregular items
Loss on disposal of PP&E
as % of PPE Sales
(Losses)/gain on investments
FX gain/(loss)
Other expenses
Impairment losses

2010A

2011A

2012A

(9,657)
(36.6%)
(27,991)
(59,262)
(4,598)
(58,179)

(29,293)
(108.6%)
11,922
18,662
(14,337)
-

(38,051)
(132.6%)
(2,828)
3,282
(140,428)
-

20%
23%
1.5%

20%
25%
1.4%

20%
33%
1.4%

30.2%

27.7%

19.5%

Operating Working Capital Items

Accounts Receivable
Case 1: Accounts Receivable days
Case 2: Accounts Receivable days
Case 3: Accounts Receivable days
Case 4: Accounts Receivable days

1,259,596
55.1
55.1
55.1
55.1

1,572,641
48.9
48.9
48.9
48.9

1,490,951
44.8
44.8
44.8
44.8

Inventory
Case 1: Inventory days
Case 2: Inventory days
Case 3: Inventory days
Case 4: Inventory days

1,580,068
116.9
116.9
116.9
116.9

2,828,433
132.7
132.7
132.7
132.7

2,826,933
121.5
121.5
121.5
121.5

Tax
MTR
ETR
Taxes other than income tax
Dividend
Payout ratio

Other current assets

As % of sales
Accounts Payable
Accrued, Advances & Other

51,994
0.6%

59,355
0.5%

30,394
0.3%

1,107,434

1,622,679

1,462,105

479,627

643,753

514,030

Case 1: Accrued, Advances & Other as % of production cost

Accrued liabilities to employees
Advances received
Other accounts payable
Case 2: Accrued, Advances & Other as % of production cost
Case 3: Accrued, Advances & Other as % of production cost
Case 4: Accrued, Advances & Other as % of production cost

9.7%
149,827
199,407
130,393
9.7%
9.7%
9.7%

8.3%
199,300
133,402
311,051
8.3%
8.3%
8.3%

6.1%
227,399
111,833
174,798
6.1%
6.1%
6.1%

Trade accounts payable

Case 1: Trade accounts payable days
Case 2: Trade accounts payable days
Case 3: Trade accounts payable days
Case 4: Trade accounts payable days

466,988
34.6
34.6
34.6
34.6

818,729
38.4
38.4
38.4
38.4

758,044
32.6
32.6
32.6
32.6

Tax payable other than income tax

As % of tax payable other than income tax

120,287
97.5%

143,379
86.9%

166,841
98.3%

Divs payable
As % of total divs
Cash divs as % of total divs

2,102
0.6%
99.4%

2,061
0.5%
99.5%

1,521
1.3%
98.7%

ST capital lease
As % of average PPE

38,430
0.49%

14,757
0.16%

21,669
0.19%

Current Income tax liability

as % of tax expense

18,803
4.8%

10,994
2.6%

23,800
7.8%

Non-current items
Other noncurrent assets
as % of total sales

26,356
0.32%

19,274
0.16%

38,052
0.31%

Other LT liabilities
as % of total sales

2,849
0.03%

398,489
3.40%

422,720
3.48%

Investments
Capex
Case 1: Capex
Case 2: Capex
Case 3: Capex

(1,463,209)
20.0%
20.0%
20.0%

(2,047,852)
24.4%
24.4%
24.4%

(1,453,386)
13.8%
13.8%
13.8%

Case 4: Capex
Depreciation as % of beginning PP&E
Case 1: Depreciation as % of beginning PP&E
Case 2: Depreciation as % of beginning PP&E
Case 3: Depreciation as % of beginning PP&E
Case 4: Depreciation as % of beginning PP&E

20.0%
3.8%
3.8%
3.8%
3.8%
3.8%

24.4%
4.8%
4.8%
4.8%
4.8%
4.8%

13.8%
5.1%
5.1%
5.1%
5.1%
5.1%

Sales of PPE
As % of beginning PPE
Investments in Intangibles as % of beginning balance
Amortisation of intangibles
Amortisation of intangibles as % of beginning balance

(26,362)
0.36%
(16,268)
8.0%

(26,980)
0.32%
(14,850)
8.2%

(28,692)
0.27%
(25,919)
16.3%

Investment into LT assets

Goodwill
Associate Income
Asset Disposals/(Acquisitions)

n.a.
494,654
(107,338)
(28,363)

(679,245)
760,166
54,272
(41,751)

10,873
786,141
276
(156,510)

Debt
Operating Cash
Rate on revolver
Blended rate on cash balance

3.85%

2.88%

2.70%

902,833
677,306
108,408
104,990
12,783
36,643
6,971

48.8%
36.6%
5.9%
5.7%
0.7%
2.0%
0.4%

Blended debt rate on optional repayments

4.34% EUR 2013-2020
EUR Loans 2016-2019 EURIBOR 6m +1.5% to EURIBOR 3m + 3.5%
LIBOR+1.625% 2013-2016
EURIBOR 6m+1.1% 2013-2020
EURIBOR 6m+3.2% (avg) 2013-2022
10% RUB 2013-2017
Other debt
Optional sweep as % of cash available for repayments
3m USD LIBOR Curve
6m USD LIBOR Curve
3m EURIBOR Curve
6m EURIBOR Curve
Equity Capital
Share issuance ($)
Share repurchase ($)
Share issuance (shares)
Share repurchase (shares)
Basic NOSH

5,993,227,240

5,993,227,240

Options Out
Diluted NOSH
NCI as % of Net Income

2.3%

TGR & WACC

TGR
TGR step
WACC step

5,993,227,240

3.3%

(2.4%)

2.5%
0.5%
0.5%

Market Data & Economic Forecast

Current share price (RUB)
Current share price (USD)
Day count convention
Russia Inflation forecast
Cost inflation forecast
Russia Salary forecast
Russia GDP
USDRUB FX forecast average
USDRUB FX forecast year-end
Valuation date FX

5,993,227,240

56.82
1.79
365

30.3663
30.4769

29.3830
32.1961

31.0903
30.3727

2013H1

2013E

2014E

2015E

2016E

2017E

2018E

(5,623)
(432.5%)
(3,535)
(31,676)
(18,450)
-

(2,600)
(100.0%)
(6,006)
(63,352)
(36,900)
-

(6,891)
(100.0%)
(5,911)
(26,527)
(51,715)
-

(11,109)
(100.0%)
(5,883)
(27,826)
(54,249)
-

(15,641)
(100.0%)
(5,856)
(29,058)
(56,650)
-

(20,674)
(100.0%)
(5,830)
(30,205)
(58,888)
-

(26,347)
(100.0%)
(5,803)
(31,255)
(60,934)
-

20%
65%
1.2%

20%
27%
1.4%

20%
27%
1.4%

20%
27%
1.4%

20%
27%
1.4%

20%
27%
1.4%

20%
27%
1.4%

20.0%

25.0%

25.0%

25.0%

25.0%

25.0%

1,497,143
48.1
48.1
48.1
48.1

1,497,143
48.1
48.1
48.1
48.1

1,513,933
47.5
47.9
48.3
48.3

1,591,221
47.0
47.7
48.4
48.6

1,680,357
46.4
47.5
48.6
48.9

1,799,571
45.9
47.3
48.8
49.1

1,909,288
45.3
47.2
49.0
49.4

2,530,187
110.4
110.4
110.4
110.4

2,530,187
110.4
110.4
110.4
110.4

2,526,343
110.4
111.2
112.1
112.2

2,620,234
110.4
112.1
113.7
114.0

2,728,665
110.4
112.9
115.4
115.8

2,879,777
110.4
113.7
117.0
117.6

3,008,775
110.4
114.6
118.7
119.4

26,581
0.2%

26,581
0.2%

46,523
0.4%

49,082
0.4%

52,027
0.4%

55,929
0.4%

59,564
0.4%

1,608,587

1,601,602

1,575,022

1,608,816

1,650,689

1,716,877

1,768,916

780,371

780,371

743,923

735,540

729,008

730,933

724,088

9.3%
252,338
91,310
436,723
9.3%
9.3%
9.3%

9.3%
218,119
158,737
205,414
9.3%
9.3%
9.3%

9.0%
243,748
156,218
216,506
9.0%
9.2%
9.3%

8.7%
268,123
155,476
227,115
8.6%
9.0%
9.2%

8.4%
290,243
154,772
237,165
8.3%
8.8%
9.2%

8.1%
309,109
154,068
246,533
7.9%
8.7%
9.1%

7.8%
323,791
153,364
255,100
7.6%
8.5%
9.1%

683,114
29.8
29.8
29.8
29.8

683,114
29.8
29.8
29.8
29.8

684,608
29.8
30.1
30.5
30.5

712,638
29.8
30.5
31.1
31.2

744,783
29.8
30.8
31.8
31.9

788,788
29.8
31.1
32.5
32.6

826,964
29.8
31.5
33.2
33.3

120,376
87.4%

120,376
87.4%

126,106
89.2%

137,242
91.0%

149,992
92.8%

166,162
94.6%

182,276
96.4%

7,879
n.a.
n.a.

378
0.8%
99.2%

990
0.8%
99.2%

1,504
0.8%
99.2%

2,046
0.8%
99.2%

2,625
0.8%
99.2%

3,347
0.8%
99.2%

16,847
0.15%

17,363
0.15%

19,395
0.16%

21,892
0.18%

24,861
0.20%

28,368
0.21%

32,241
0.23%

44,219
34.8%

41,992
34.8%

65,453
31.1%

81,980
27.3%

92,450
23.6%

97,638
19.9%

99,849
16.2%

30,639
0.54%

61,278
0.54%

58,236
0.50%

57,259
0.47%

56,264
0.44%

55,722
0.40%

54,271
0.37%

157,437
1.38%

157,437
1.38%

173,046
1.50%

196,540
1.61%

223,147
1.73%

255,809
1.84%

289,398
1.96%

(374,979)
6.4%
6.4%
6.4%

(749,958)
6.4%
6.4%
6.4%

(875,780)
8.0%
7.5%
7.0%

(1,069,315)
10.0%
9.0%
8.5%

(1,229,442)
11.0%
10.0%
9.0%

(1,416,037)
12.0%
11.0%
10.0%

(1,363,722)
11.0%
10.0%
9.0%

6.4%
6.0%
6.0%
6.0%
6.0%
6.0%

6.4%
6.0%
6.0%
6.0%
6.0%
6.0%

6.5%
5.7%
5.6%
5.7%
5.8%
6.0%

7.0%
5.4%
5.2%
5.4%
5.6%
6.0%

8.0%
5.2%
4.9%
5.2%
5.4%
6.0%

9.0%
4.9%
4.5%
4.9%
5.3%
6.0%

8.5%
4.6%
4.2%
4.6%
5.1%
6.0%

(1,300)
0.01%
(12,056)
8.5%

(2,600)
0.02%
(24,111)
17.0%

(6,891)
0.06%
(20,885)
17.7%

(11,109)
0.10%
(20,885)
21.5%

(15,641)
0.13%
(20,919)
27.5%

(20,674)
0.17%
(55,122)
100.0%

(26,347)
0.20%
n.a.

(2,185)
753,381
151
-

(4,370)
753,381
302
123,532

4,344
753,381
302
-

4,344
753,381
302
-

4,344
753,381
302
-

4,344
753,381
302
-

4,344
753,381
302
-

1.61%

800,000
3.72%
2.76%

843,200
3.79%
2.76%

884,517
3.96%
2.76%

923,657
4.27%
2.76%

960,141
4.60%
2.76%

993,506
4.82%
2.76%

3.72%
4.34%
3.18%
1.99%
1.44%
3.54%
10.00%
4.24%

3.79%
4.34%
3.33%
2.06%
1.55%
3.65%
10.00%
4.31%

3.96%
4.34%
3.67%
2.61%
1.90%
4.00%
10.00%
4.63%

4.27%
4.34%
4.27%
3.34%
2.51%
4.61%
10.00%
5.11%

4.60%
4.34%
4.89%
4.36%
3.13%
5.23%
10.00%
5.68%

4.82%
4.34%
5.30%
5.17%
3.53%
5.63%
10.00%
6.08%

80.0%

80.0%

80.0%

80.0%

80.0%

80.0%

0.244%
0.363%
0.227%
0.340%

0.400%
0.438%
0.415%
0.445%

0.875%
0.981%
0.735%
0.798%

1.580%
1.716%
1.325%
1.409%

2.610%
2.732%
1.955%
2.025%

3.445%
3.543%
2.370%
2.430%

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

5,993,227,240

4.6%

1.9%

1.9%

1.9%

1.9%

1.9%

1.9%

7.1%
7.1%
13.5%
1.8%

5.4%
5.4%
11.8%

4.9%
4.9%
10.0%

4.4%
4.4%
8.3%

4.0%
4.0%
6.5%

3.5%
3.5%
4.8%

31.6592
31.6592
32.2930

31.9761
31.9761

31.6592
31.6592

31.6592
31.6592

31.6592
31.6592

31.6592
31.6592

31.0394
32.8395

2019E

(32,890)
(100.0%)
(5,776)
(32,193)
(62,762)
-

20%
27%
1.4%

25.0%

2,025,665
44.8
47.0
49.2
49.7
3,141,132
110.4
115.4
120.4
121.2
63,436
0.4%
1,821,641
715,207

7.5%
333,505
152,660
262,753
7.2%
8.3%
9.0%
866,267
29.8
31.8
33.8
34.0
199,860
98.3%
4,117
0.8%
99.2%
36,190
0.25%
93,960
12.5%

52,397
0.33%
326,273
2.07%

(1,290,760)
10.0%
9.0%
8.5%

8.0%
4.4%
3.8%
4.4%
4.9%
6.0%

(32,890)
0.24%
n.a.
4,344
753,381
302
-

1,023,311
4.97%
2.76%
4.97%
4.34%
5.56%
5.81%
3.78%
5.88%
10.00%
6.37%
80.0%
4.115%
4.184%
2.635%
2.676%

5,993,227,240

5,993,227,240
1.9%

3.0%
3.0%
3.0%

31.6592
31.6592

Case 2
PBT
Current DTA add/(draw)
Noncurrent DTA add/(draw)
DTL add/(draw)
Taxable Income
ETR
Tax paid

2010A

(390,972)

2011A

2012A

(24,182)
215,726
(313,065)

44,072
12,452
(78,574)

(421,034)

(304,712)

Current DTA
Beginning Balance
(Usage)/Additions
Ending balance

62,959

Noncurrent DTA
Beginning Balance
(Usage)/Additions
Ending balance

249,565

DTL
Beginning Balance
(Usage)/Additions
Ending balance

792,240

DTA/DTL Usage Assumptions

Current DTA usage as % of available
Noncurrent DTA usage as % of available
DTL usage as % of available

(56.1%)
1,008.7%
(78.1%)

233.3%
5.3%
(11.0%)

2013H1
195,466
58,389
(60,583)
46,631
239,903

2013E

2014E

2015E

2016E

2017E

(127,169)

351,126
(12,592)
(49,913)
158,448
447,069
27.0%
(120,763)

693,076
(24,270)
(37,796)
149,122
780,131
27.0%
(210,731)

1,032,983
(10,073)
(39,930)
126,758
1,109,737
27.0%
(299,765)

1,388,650
(5,220)
(32,371)
96,934
1,447,993
27.0%
(391,135)

1,770,150
(3,205)
(24,385)
71,582
1,814,142
27.0%
(490,040)

121,348

62,959
(12,592)
50,367

50,367
(24,270)
26,098

26,098
(10,073)
16,024

16,024
(5,220)
10,805

10,805
(3,205)
7,600

188,982

249,565
(49,913)
199,652

199,652
(37,796)
161,856

161,856
(39,930)
121,925

121,925
(32,371)
89,554

89,554
(24,385)
65,169

745,609

792,240
(158,448)
633,792

633,792
(149,122)
484,670

484,670
(126,758)
357,912

357,912
(96,934)
260,978

260,978
(71,582)
189,395

92.7%
(24.3%)
5.9%

20%
20%
20%

20%
20%
20%

20%
20%
20%

20%
20%
20%

20%
20%
20%

2018E

2019E

2,247,850
(2,161)
(17,911)
52,196
2,279,973
27.0%
(615,872)

2,759,262
(1,520)
(13,034)
37,879
2,782,587
27.0%
(751,639)

7,600
(2,161)
5,439

5,439
(1,520)
3,919

65,169
(17,911)
47,258

47,258
(13,034)
34,224

189,395
(52,196)
137,200

137,200
(37,879)
99,321

20%
20%
20%

20%
20%
20%

Case 2

2010A

2011A

m USD
Cash balance available for repayment
Operating cash
Cash flow available for debt repayment

2012A

2013H1
-

Cash available for debt repayment

1,058,153

78,716

Scheduled payments & issuance

Cash available for revolver & optional repayments
Beginning revolver balance
Issuance/(repayment)
Ending revolver balance

2013E

2014E

2015E

1,361,939
800,000
388,292

895,523
843,200
67,325

2016E

860,489
884,517
(25,928)

2017E

911,363
923,657
1,377

2018E

1,010,476
960,141
26,944

2019E

1,064,822
993,506
322,114

1,001,805
1,023,311
671,402
649,896

950,231

119,648

(49,957)

(10,917)

77,279

393,430

(472,618)

(33,205)

184,189

445,012

446,127

(351,934)

50,000

477,614

86,443

134,232

434,095

523,406

41,496

699,896

Balance available for optional repayments

477,614

86,443

134,232

434,095

523,406

41,496

699,896

Total beginning debt for optional repayment

Optional repayments
Ending balance of optional debt

794,277
(382,091)
412,186

1,512,186
(69,154)
1,443,031

1,793,031
(107,386)
1,685,646

2,135,646
(347,276)
1,788,369

2,238,369
(418,725)
1,819,645

2,269,645
(33,197)
2,236,447

2,786,447
(559,917)
2,226,531

Beginning debt
Issuance/(Repayment)
Ending non-revolver debt
Ending Cash Balance

1,170,622

Interest Income & Expense

Interest rate
Interest income
Interest on scheduled repayments
8.95 11/11/2014 Bullet RUB Bond 10,000m
8.75 12/17/2014 Putable RUB Bond 5,000m
8.75 12/17/2014 Putable RUB Bond 5,000m
7.75 03/05/2013 Bullet RUB Bond 10,000m
8.25 07/09/2015 Putable RUB Bond 5,000m
4.45 19/02/2018 Bullet USD Bond 800m
4.95 26/09/2019 Bullet USD Bond 500m
8.50 05/09/2022 Putable RUB Bond 5,000m
8.40 25/11/2022 Putable RUB Bond 10,000m
8.00 20/07/2023 Putable RUB Bond 5,000m
8.00 25/07/2023 Putable RUB Bond 5,000m
8.50% RUB 2013 Loan
3.86% USD 2013 Loan
Total interest on scheduled payments
Interest on optional repayments
Interest on revolver
Total interest expense

1,024,448

4,666,365

4,785,961

4,666,365
(854,709)
3,811,656

3,811,656
(102,359)
3,709,297

3,709,297
76,803
3,786,100

3,786,100
97,736
3,883,836

3,883,836
27,402
3,911,238

3,911,238
(385,131)
3,526,107

3,526,107
(509,917)
3,016,191

1,058,153

1,361,939

895,523

860,489

911,363

1,010,476

1,064,822

1,001,805

1,163,290

2.70%
28,126

1.61%
21,964

2.76%
26,977

2.76%
24,247

2.76%
24,466

2.76%
26,537

2.76%
28,656

2.76%
28,536

2.76%
29,896

(27,833)
(13,740)
(13,740)
(24,322)
(12,950)
(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
(28,025)
(10,498)

(27,833)
(12,950)
(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(12,950)
(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(35,200)
(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(24,500)
(13,424)
(26,533)
(12,635)
(12,635)
-

(256,034)
(22,443)
(278,476)

(165,710)
(55,933)
(221,642)

(137,876)
(68,948)
(206,824)

(124,926)
(83,733)
(208,659)

(124,926)
(93,267)
(218,193)

(124,926)
(108,633)
(233,559)

(89,726)
(124,559)
(214,285)

800,000
-

300,000
300,000
300,000
300,000
300,000

350,000
300,000
350,000
400,000
500,000

450,000
400,000
450,000
400,000
500,000

450,000
450,000
450,000
600,000
700,000

450,000
400,000
450,000
600,000
700,000

550,000
500,000
550,000
600,000
650,000

(20,471)
(312,734)

(7,879)

(4,988)

(3,873)

(1,934)

Bonds out & bond repayment schedule

Debt issuance
8.00 20/07/2023 Putable RUB 5,000m
8.00 25/07/2023 Putable RUB 5,000m
4.45 19/02/2018 Bullet USD Bond 800m
Debt issuance for optional repayment
Case 1: Debt issuance for optional repayment
Case 2: Debt issuance for optional repayment
Case 3: Debt issuance for optional repayment
Case 4: Debt issuance for optional repayment
Debt Repayment Schedule
Leases
8.95 11/11/2014 Bullet RUB Bond 10,000m
8.75 12/17/2014 Putable RUB Bond 5,000m
8.75 12/17/2014 Putable RUB Bond 5,000m
7.75 03/05/2013 Bullet RUB Bond 10,000m
8.25 07/09/2015 Putable RUB Bond 5,000m
4.45 19/02/2018 Bullet USD Bond 800m
4.95 26/09/2019 Bullet USD Bond 500m
8.50 05/09/2022 Putable RUB Bond 5,000m
8.40 25/11/2022 Putable RUB Bond 10,000m
8.00 20/07/2023 Putable RUB Bond 5,000m
8.00 25/07/2023 Putable RUB Bond 5,000m
8.50% RUB 2013 Loan
3.86% USD 2013 Loan
Optional Debt Balance
4.34% EUR 2013-2020
EUR Loans 2016-2019 EURIBOR 6m +1.5% to EURIBOR 3m + 3.5%
LIBOR+1.625% 2013-2016
EURIBOR 6m+1.1% 2013-2020
EURIBOR 6m+3.2% (avg) 2013-2022
10% RUB 2013-2017
Other debt

(34,929)
(157,932)
(157,932)
(315,864)
-

(157,932)
(800,000)
(500,000)

(329,702)
(276,259)

902,833
677,306
108,408
104,990
12,783
36,643
6,971

Case 2
'000 USD
Revenue
Growth (%)
Production cost
D&A
Gross Profit
Margin (%)

2010A

2011A

2012A

2013H1

2013E

2014E

2015E

2016E

2017E

2018E

2019E

8,350,748
36.0%
(4,933,236)
(296,016)
3,121,496
37.4%

11,728,556
40.4%
(7,780,243)
(416,943)
3,531,370
30.1%

12,156,592
3.6%
(8,494,438)
(570,146)
3,092,008
25.4%

5,685,024
(6.5%)
(4,182,578)
(362,013)
1,140,433
20.1%

11,370,048
(6.5%)
(8,365,156)
(724,026)
2,280,866
20.1%

11,540,599
1.5%
(8,290,079)
(685,564)
2,564,956
22.2%

12,175,332
5.5%
(8,534,449)
(665,946)
2,974,937
24.4%

12,905,852
6.0%
(8,822,236)
(656,082)
3,427,534
26.6%

13,873,790
7.5%
(9,242,803)
(686,329)
3,944,659
28.4%

14,775,587
6.5%
(9,586,813)
(632,816)
4,555,958
30.8%

15,736,000
6.5%
(9,936,493)
(627,798)
5,171,708
32.9%

SG&A
Selling expenses
Taxes other than Income Tax
Impairment losses
Operating Profit
Margin (%)

(263,146)
(708,868)
(123,311)
(58,179)
1,967,992
23.6%

(556,169)
(972,685)
(165,073)
1,837,443
15.7%

(448,268)
(1,143,610)
(169,786)
###
1,330,344
10.9%

(231,441)
(484,356)
(68,894)
355,742
6.3%

(462,882)
(968,712)
(137,788)
711,484
6.3%

(459,458)
(982,578)
(141,406)
981,514
8.5%

(473,790)
(1,035,918)
(150,820)
1,314,409
10.8%

(490,623)
(1,097,330)
(161,604)
1,677,977
13.0%

(514,956)
(1,178,831)
(175,589)
2,075,283
15.0%

(535,154)
(1,254,604)
(188,988)
2,577,211
17.4%

(555,802)
(1,335,247)
(203,388)
3,077,271
19.6%

Loss on disposal of PP&E

(Losses)/gain on investments
Interest Income
Interest expense
FX gain/(loss)
Other expenses
PBT
PBT Margin

(9,657)
(27,991)
45,071
(189,267)
(59,262)
(4,598)
1,722,288
20.6%

(29,293)
11,922
29,531
(171,764)
18,662
(14,337)
1,682,164
14.3%

(38,051)
(2,828)
28,581
(266,031)
3,282
(140,428)
914,869
7.5%

(5,623)
(3,535)
21,964
(122,956)
(31,676)
(18,450)
195,466
3.4%

(2,600)
(6,006)
26,977
(278,476)
(63,352)
(36,900)
351,126
3.1%

(6,891)
(5,911)
24,247
(221,642)
(26,527)
(51,715)
693,076
6.0%

(11,109)
(5,883)
24,466
(206,824)
(27,826)
(54,249)
1,032,983
8.5%

(15,641)
(5,856)
26,537
(208,659)
(29,058)
(56,650)
1,388,650
10.8%

(20,674)
(5,830)
28,656
(218,193)
(30,205)
(58,888)
1,770,150
12.8%

(26,347)
(5,803)
28,536
(233,559)
(31,255)
(60,934)
2,247,850
15.2%

(32,890)
(5,776)
29,896
(214,285)
(32,193)
(62,762)
2,759,262
17.5%

5.1%
6.7%

3.2%
3.9%

5.1%
5.7%

4.2%
5.1%

6.6%
7.3%

5.3%
6.0%

4.8%
5.5%

4.7%
5.4%

4.8%
5.6%

5.8%
6.6%

6.1%
7.1%

Core EBIT
Margin (%)

1,866,484
22.4%

1,824,397
15.6%

1,152,319
9.5%

296,458
5.2%

602,626
5.3%

890,471
7.7%

1,215,341
10.0%

1,570,772
12.2%

1,959,686
14.1%

2,452,873
16.6%

2,943,651
18.7%

EBITDA
Margin (%)

2,162,500
25.9%

2,241,340
19.1%

1,722,465
14.2%

658,471
11.6%

1,326,652
11.7%

1,576,034
13.7%

1,881,287
15.5%

2,226,853
17.3%

2,646,015
19.1%

3,085,689
20.9%

3,571,449
22.7%

Tax expense
ETR %
Net Income
Margin (%)

(390,972)
22.7%
1,331,316
15.9%

(421,034)
25.0%
1,261,130
10.8%

(304,712)
33.3%
610,157
5.0%

(127,169)
65.1%
68,297
1.2%

(120,763)
34.4%
230,363
2.0%

(210,731)
30.4%
482,345
4.2%

(299,765)
29.0%
733,218
6.0%

(391,135)
28.2%
997,515
7.7%

(490,040)
27.7%
1,280,110
9.2%

(615,872)
27.4%
1,631,978
11.0%

(751,639)
27.2%
2,007,623
12.8%

Associate Income
(Net Income)/loss for NCI
NI for NLMK shareholders

(107,338)
31,065
1,255,043

54,272
42,192
1,357,594

276
(14,628)
595,805

151
3,149
71,597

302
4,351
235,016

302
9,110
491,757

302
13,848
747,368

302
18,840
1,016,657

302
24,178
1,304,589

302
30,823
1,663,104

302
37,918
2,045,844

378,687

375,776
0.06
1.84

116,000
0.02
0.60

47,003
0.01
0.25

122,939
0.02
0.66

186,842
0.03
0.99

254,164
0.04
1.34

326,147
0.05
1.72

415,776
0.07
2.20

511,461
0.09
2.70

1.00

1.11

1.03

1.04

0.97

0.97

0.99

1.00

1.02

1.03

1.05

Net Interest Expense as % of Total Debt

Gross Interest Expense as % of Total Debt

Declared Dividends
Dividend per share (USD)
Dividend per share (RUB)

Sales/Capital

Case 2
'000 USD
Net Income
Depreciation
Amortisation
(Inc)/Dec in ST DTA
(Inc)/Dec in LT DTA
(Inc)/Dec in Goodwill
(Inc)/Dec in Other LT assets
Inc/(Dec) in DTL
Inc/(Dec) in Other LT liabilities
OWC items
(Inc)/Dec in Accounts Receivable
(Inc)/Dec in Inventory
(Inc)/Dec in Other current assets
Inc/(Dec) in Accounts payable
Inc/(Dec) in Current Income tax liability
Cash from Operations

2010A
1,331,316

2011A
1,261,130

Cash from Operations ex-DTA/DTL

LT Investments
Capex
Proceeds from sales of PP&E
Cash from Asset Disposals/(Acquisitions)
Investment in intangibles
Cash from Investing
Issuance/(Repayment) of debt
Issuance/(Repayment) of revolver
Dividends
Proceeds from share issuance
Share repurchases
Cash from Financing

2012A

(41,751)

2013E

2014E

2015E

2016E

2017E

2018E

2019E

610,157
767,715

68,297
362,013
(58,389)
60,583
32,760
7,413
(46,631)
(265,283)

230,363
699,915
24,111
12,592
49,913
32,760
(23,226)
(158,448)
(265,283)

482,345
664,679
20,885
24,270
37,796
3,042
(149,122)
15,609

733,218
645,061
20,885
10,073
39,930
977
(126,758)
23,494

997,515
635,163
20,919
5,220
32,371
995
(96,934)
26,607

1,280,110
631,207
55,122
3,205
24,385
543
(71,582)
32,662

1,631,978
632,816
2,161
17,911
1,450
(52,196)
33,589

2,007,623
627,798
1,520
13,034
1,874
(37,879)
36,875

166,715
169,858
31,628
(69,932)
12,471
1,688,612

(6,192)
296,746
3,813
146,482
20,419
622,031

(6,192)
296,746
3,813
139,497
18,192
1,054,752

(16,790)
3,844
(19,942)
(26,580)
23,461
1,063,497

(77,288)
(93,891)
(2,559)
33,794
16,527
1,223,463

(89,136)
(108,432)
(2,945)
41,873
10,470
1,473,686

(119,214)
(151,111)
(3,902)
66,188
5,188
1,752,799

(109,717)
(128,998)
(3,635)
52,039
2,211
2,079,609

(116,377)
(132,357)
(3,872)
52,725
(5,888)
2,445,077

1,688,612

666,468

1,150,695

1,150,553

1,300,218

1,533,029

1,796,791

2,111,733

2,468,402

(156,510)

(9,609)
(374,979)
1,300
-

(1,609,896)

(383,288)

4,370
(749,958)
2,600
123,532
(619,456)

(4,344)
(875,780)
6,891
(873,233)

(4,344)
(1,069,315)
11,109
(1,062,550)

(4,344)
(1,229,442)
15,641
(1,218,145)

(4,344)
(1,416,037)
20,674
(1,399,707)

(4,344)
(1,363,722)
26,347
(1,341,719)

(4,344)
(1,290,760)
32,890
(1,262,214)

(102,359)
(122,939)
(225,298)

76,803
(186,842)
(110,039)

97,736
(254,164)
(156,428)

27,402
(326,147)
(298,745)

(385,131)
(415,776)
(800,907)

(509,917)
(511,461)
(1,021,377)

(1,453,386)
(28,363)

2013H1

(116,529)

149,135

(854,709)
(47,003)
(901,712)

(37,813)

387,878

(466,416)

(35,034)

50,875

99,112

54,347

(63,017)

161,485

Existing cash balance

1,058,153

1,361,939

895,523

860,489

911,363

1,010,476

1,064,822

1,001,805

Ending cash balance

1,446,031

895,523

860,489

911,363

1,010,476

1,064,822

1,001,805

1,163,290

Net Cash Flow

149,135
(164,501)

(516,335)

(116,529)

Case 2

2010A

2011A

2012A

2013H1

2013E

2014E

2015E

2016E

2017E

2018E

2019E

'000 USD
Current assets
Cash, equivalents & STI
Accounts Receivable
Inventory
Other current assets
Deferred income tax assets
Total Current Assets

1,170,622
1,259,596
1,580,068
51,994
43,069
4,105,349

1,024,448
1,572,641
2,828,433
59,355
18,887
5,503,764

1,058,153
1,490,951
2,826,933
30,394
62,959
5,469,390

1,361,939
1,497,143
2,530,187
26,581
121,348
5,537,198

895,523
1,497,143
2,530,187
26,581
50,367
4,999,801

860,489
1,513,933
2,526,343
46,523
26,098
4,973,386

911,363
1,591,221
2,620,234
49,082
16,024
5,187,924

1,010,476
1,680,357
2,728,665
52,027
10,805
5,482,329

1,064,822
1,799,571
2,879,777
55,929
7,600
5,807,699

1,001,805
1,909,288
3,008,775
59,564
5,439
5,984,871

1,163,290
2,025,665
3,141,132
63,436
3,919
6,397,441

Noncurrent assets
Long-term Investments
PP&E
Intangibles
Goodwill
Deferred income tax assets
Other non-current assets
Total Noncurrent Assets

687,665
8,382,478
181,136
494,654
21,387
26,356
9,793,676

8,420
10,569,828
158,611
760,166
237,113
19,274
11,753,412

19,293
11,753,157
141,922
786,141
249,565
38,052
12,988,130

17,108
10,981,399
129,115
753,381
188,982
30,639
12,100,624

14,923
11,677,068
117,811
753,381
199,652
61,278
12,824,113

19,267
11,881,279
96,926
753,381
161,856
58,236
12,970,944

23,611
12,294,424
76,041
753,381
121,925
57,259
13,326,641

27,955
12,873,062
55,122
753,381
89,554
56,264
13,855,338

32,299
13,637,218
753,381
65,169
55,722
14,543,789

36,643
14,341,777
753,381
47,258
54,271
15,233,331

40,987
14,971,849
753,381
34,224
52,397
15,852,839

13,899,025

17,257,176

18,457,520

17,637,822

17,823,914

17,944,330

18,514,565

19,337,668

20,351,488

21,218,202

22,250,280

Current Liabilities
Accounts payable
Revolver debt
ST Loans and Borrowings
Current Income tax liability
Total Current Liabilities

1,107,434
525,559
18,803
1,651,796

1,622,679
1,306,263
10,994
2,939,936

1,462,105
1,816,169
23,800
3,302,074

1,608,587
993,972
44,219
2,646,778

1,601,602
1,483,513
41,992
3,127,106

1,575,022
1,443,674
65,453
3,084,149

1,608,816
1,473,566
81,980
3,164,362

1,650,689
1,511,606
92,450
3,254,744

1,716,877
1,522,271
97,638
3,336,785

1,768,916
1,372,376
99,849
3,241,140

1,821,641
1,173,914
93,960
3,089,516

Noncurrent liabilities
Deferred Income tax liability
Long-term borrowings
Other long-term liabilities
Total noncurrent liabilities

400,601
2,289,965
2,849
2,693,415

713,666
3,099,924
398,489
4,212,079

792,240
2,850,196
422,720
4,065,156

745,609
3,791,989
157,437
4,695,035

633,792
2,328,144
157,437
3,119,373

484,670
2,265,623
173,046
2,923,340
-

357,912
2,312,534
196,540
2,866,986

260,978
2,372,231
223,147
2,856,356

189,395
2,388,968
255,809
2,834,173

137,200
2,153,731
289,398
2,580,330

99,321
1,842,277
326,273
2,267,870

Shareholders' Equity
Issued shares
Statutory reserve
APIC
Accumulated other comprehensive loss
Retained earnings
NCI
Total Shareholders' Equity

221,173
10,267
98,752
(916,901)
10,261,214
(120,691)
9,553,814

221,173
10,267
306,391
(1,489,442)
11,098,635
(41,863)
10,105,161

221,173
10,267
306,391
(997,035)
11,582,368
(32,874)
11,090,290

221,173
10,267
256,922
(1,736,476)
11,538,347
5,776
10,296,009

221,173
10,267
306,391
(997,035)
11,770,078
(37,225)
11,273,650

221,173
10,267
306,391
(997,035)
12,138,594
(46,335)
11,633,055

221,173
10,267
306,391
(997,035)
12,698,818
(60,183)
12,179,431

221,173
10,267
306,391
(997,035)
13,461,009
(79,024)
12,922,782

221,173
10,267
306,391
(997,035)
14,439,149
(103,201)
13,876,744

221,173
10,267
306,391
(997,035)
15,686,175
(134,025)
15,092,946

221,173
10,267
306,391
(997,035)
17,220,256
(171,943)
16,589,109

Total Liabilities & Equity

13,899,025

17,257,176

18,457,520

17,637,822

17,520,128

17,640,544

18,210,779

19,033,882

20,047,702

20,914,416

21,946,494

303,786.0

303,786.0

303,786.0

303,786.0

303,786.0

303,786.0

303,786.0

2,815,524
1.3x
12.9x

4,406,187
2.0x
12.8x

4,666,365
2.7x
4.9x

4,785,961
3.6x
2.9x

3,811,656
2.9x
2.4x

3,709,297
2.4x
4.5x

3,786,100
2.0x
6.7x

3,883,836
1.7x
8.6x

3,911,238
1.5x
10.3x

3,526,107
1.1x
12.0x

3,016,191
0.8x
16.0x

Total Assets

Balance Check
Debt Metrics
Total debt
Total debt/EBITDA
Interest Coverage Ratio

2010A

Case 2

2011A

2012A

m USD
EBIT
Margin %
Growth %

2013E
602,626
5.3%
(47.7%)

Depreciation
Amortisation
(Tax expense)
(Capex)
Other investing flows
(Inc)/Dec in OWC items
(Inc)/Dec in Other Operating Items

(1,096,952)

Unlevered FCF

425,651

699,915
24,111
(120,763)
(749,958)
2,600
452,055
(255,749)
654,837

Valuation Date
Stub
Year count

11-Oct-2013
22.5%
0.1

WACC (USD)
8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

99.1%
99.1%
99.0%
99.0%
98.9%
98.9%
98.8%

Cash Flow Valuation

WACC (USD)
8.16%

PV of Cash Flows
3,382,290

PV of TV
2.0%
14,756,939

8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

3,327,421
3,273,936
3,221,790
3,170,942
3,121,352
3,072,981

13,292,611
12,043,015
10,965,747
10,028,814
9,207,628
8,482,980

IMM Valuation
WACC (USD)
8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

PV of Cash Flows
3,382,290
3,327,421
3,273,936
3,221,790
3,170,942
3,121,352
3,072,981

TV EBITDA m
2.0%
4.3x
3.9x
3.5x
3.2x
2.9x
2.7x
2.5x

Exit Multiple
WACC (USD)
8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

PV of Cash Flows
3,382,290
3,327,421
3,273,936
3,221,790
3,170,942
3,121,352
3,072,981

TV based on m
6.0x
13,154,123
12,781,835
12,421,721
12,073,330
11,736,229
11,410,003
11,094,255

Net Debt
Revolver debt
ST Loans and Borrowings
PV of leases
Long-term borrowings
Cash
Net Debt

1,483,513
74,074
2,328,144
895,523
2,990,208

Implied Share price

DCF
USD per share
8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

2.0%
2.53
2.27
2.06
1.87
1.70
1.56
1.43

2.5%
2.76
2.47
2.22
2.01
1.82
1.66
1.52

8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

2.0%
61.22
55.08
49.81
45.25
41.26
37.74
34.62

2.5%
66.81
59.73
53.73
48.58
44.12
40.21
36.77

8.2x

8.2x

RUB per share

Forward Valuation
EBITDA multiple

EV
Add cash
less Debt
less NCI
Market Cap
Share px
Divs
IRR

14,153,382
1,058,153
(4,666,365)
10,545,170

10,901,011
895,523
(3,811,656)
7,984,878

54.70

42.18
0.25
(68.2%)

2014E

2015E

2016E

2017E

2018E

2019E

890,471
7.7%
47.8%

1,215,341
10.0%
36.5%

1,570,772
12.2%
29.2%

1,959,686
14.1%
24.8%

2,452,873
16.6%
25.2%

2,943,651
18.7%
20.0%

664,679
20,885
(210,731)
(875,780)
6,891
(36,007)
18,652

645,061
20,885
(299,765)
(1,069,315)
11,109
(123,416)
24,470

635,163
20,919
(391,135)
(1,229,442)
15,641
(148,169)
27,602

631,207
55,122
(490,040)
(1,416,037)
20,674
(202,852)
33,205

632,816
(615,872)
(1,363,722)
26,347
(188,101)
35,039

627,798
(751,639)
(1,290,760)
32,890
(205,768)
38,749

479,059

424,371

501,350

590,965

979,381

1,394,921

100.0%
0.7

100.0%
1.7

100.0%
2.7

100.0%
3.7

100.0%
4.7

###
5.7

Discount Factor
94.5%
94.2%
93.9%
93.6%
93.3%
93.0%
92.6%

87.4%
86.7%
86.0%
85.3%
84.7%
84.0%
83.4%

80.8%
79.8%
78.8%
77.8%
76.8%
75.9%
75.0%

74.7%
73.4%
72.2%
70.9%
69.8%
68.6%
67.4%

69.0%
67.6%
66.1%
64.7%
63.3%
62.0%
60.7%

63.8%
62.2%
60.6%
59.0%
57.5%
56.0%
54.6%

2.0%
18,139,228

Enterprise Value
2.5%
19,522,681

3.0%
21,174,494

PV of TV
2.5%
16,140,391

3.0%
17,792,204

14,442,848
13,011,265
11,789,533
10,736,217
9,820,054
9,017,015

TV EBITDA multiple
2.5%
5.0x
4.2x
3.8x
3.5x
3.2x
2.9x
2.7x

TV based on multiple
7.0x
15,346,476
14,912,141
14,492,008
14,085,552
13,692,267
13,311,670
12,943,298

15,796,479
14,136,820
12,737,100
11,542,486
10,512,482
9,616,535

3.0%
5.9x
4.6x
4.1x
3.7x
3.4x
3.1x
2.8x

8.0x
17,538,830
17,042,447
16,562,295
16,097,773
15,648,305
15,213,337
14,792,340

16,620,032
15,316,951
14,187,536
13,199,756
12,328,979
11,555,961

2.0%
14.2x
13.1x
12.1x
11.2x
10.4x
9.8x
9.2x

6.0x
16,536,412
16,109,257
15,695,657
15,295,120
14,907,170
14,531,355
14,167,237

17,770,270
16,285,200
15,011,323
13,907,159
12,941,406
12,089,997

19,123,901
17,410,756
15,958,890
14,713,427
13,633,833
12,689,516

Enterprise Value
2.5%
15.3x
14.0x
12.8x
11.8x
11.0x
10.3x
9.6x

3.0%
16.6x
15.0x
13.7x
12.6x
11.6x
10.8x
10.1x

Enterprise Value
7.0x
18,728,766
18,239,562
17,765,944
17,307,341
16,863,208
16,433,022
16,016,279

8.0x
20,921,120
20,369,868
19,836,231
19,319,563
18,819,247
18,334,689
17,865,322

Exit Multiple

hare
3.0%
3.03
2.69
2.41
2.16
1.96
1.78
1.62

8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

6.0x
2.26
2.19
2.12
2.05
1.99
1.93
1.86

USD per share

7.0x
2.63
2.54
2.47
2.39
2.31
2.24
2.17

8.0x
2.99
2.90
2.81
2.72
2.64
2.56
2.48

8.16%
8.66%
9.16%
9.66%
10.16%
10.66%
11.16%

6.0x
54.74
53.02
51.35
49.73
48.16
46.64
45.17

RUB per share

7.0x
63.60
61.63
59.71
57.86
56.06
54.32
52.64

8.0x
72.46
70.23
68.08
65.99
63.97
62.01
60.11

8.2x

8.2x

8.2x

8.2x

hare
3.0%
73.49
65.20
58.28
52.41
47.38
43.01
39.20

8.2x

8.2x

12,950,171
860,489
(3,709,297)
10,101,362

15,458,409
911,363
(3,786,100)
12,583,672

18,297,907
1,010,476
(3,883,836)
15,424,546

21,742,132
1,064,822
(3,911,238)
18,895,716

25,354,902
1,001,805
(3,526,107)
22,830,600

53.89
0.66
0.1%

66.47
0.99
10.6%

81.48
1.34
14.5%

99.82
1.72
16.6%

120.60
2.20
17.6%

29,346,363
1,163,290
(3,016,191)
###
27,493,463
145.23
2.70
18.2%

Case 2
Risk-free rate
Levered raw beta
Market Risk premium
Country risk premium
Ke

USD
2.63%
1.23
6.70%
1.70%
12.95%

RUB
7.44%
1.23
6.70%
1.70%
17.76%

Pre-tax Kd estimate
ETR
Kd

5.25%
27.01%
3.83%

7.99%
27.01%
5.83%

% of debt in target capital

% of equity in target capital

36.15%
63.85%

36.85%
63.15%

9.66%

13.37%

WACC

Case 2
Non-controlling interest valuation
Book Value
% Share of NCI in NI
Current share px
Current mkt cap
Group '13 PE ratio
NI share of NCI '13
MV of NCI at Group PE

2010A
(120,691)
-0.4%

2011A
(41,863)
-0.4%

2012A

2013H1

(32,874)
0.1%

2013E
(37,225)
-1.9%
56.8
10,545,169,906
17.3x
(4,351)
-

2014E

2015E

2016E

2017E

2018E

(46,335)
-1.9%

(60,183)
-1.9%

(79,024)
-1.9%

(103,201)
-1.9%

(134,025)
-1.9%

17.3x
(9,110)
###

17.3x
(13,848)
-

17.3x
(18,840)
-

17.3x
(24,178)
-

17.3x
(30,823)
-

2019E
(171,943)
-1.9%

17.3x
(37,918)
-

Summary of discount factors

Russia discount
Low free float
Total discount

20.00%
5.00%
25.00%