Gallery Out of Home Media Ltd. Six Months Ended 30 June 2010 - PowerPoint PPT Presentation

Gallery Out of Home Media Ltd. Six Months Ended 30 June 2010 Unaudited Financial Results 2 September 2010

About Gallery • Established in 1994 • Second largest OOH operator in Russia and Ukraine • Over 32 cities in Russia and 14 cities in Ukraine • Over 30 types of advertising constructions • About 47,100 multiformat advertising faces (34,000 excluding transport) • Turnover in 2009 – USD 105 mln • Market share (by revenues in 2009) – 8.5% in Russia, 11.5% in Ukraine 2

Key Indicators Analysis 1H 2009 1H 2010 Change (IFRS, in millions of RUB) Revenues 1,535 1,782 16% Gross Profit 294 642 118% EBITDA (1) (67) NM 392 EBITDA margin -4% NM 22% (IFRS, in thousands of USD) Revenues 46,439 59,269 28% Gross Profit 8,908 21,359 140% EBITDA (1) (2,066) 13,061 NM EBITDA margin -4% 22% NM (1) Before restructuring expenses 3

Key Indicators Analysis 2Q 2009 2Q 2010 Change (IFRS, in millions of RUB) Revenues 843 974 16% Gross Profit 224 398 130% EBITDA (1) 68 301% 290 EBITDA margin 7% 20% 30% (IFRS, in thousands of USD) Revenues 26,039 32,267 24% Gross Profit 6,848 13,209 93% EBITDA (1) 1,940 9,655 398% EBITDA margin 7% 30% 23% (1) Before restructuring expenses 4

USD/RUB Exchange Rate Dynamics USD per 1 RUB 0.0341 0.0335 0.0331 0.0319 7% 0.0312 0.0310 0.0295 Q1 2009 Q2 2009 Q3 2009 Q4 2009 2009 Q1 2010 Q2 2010 average 5

RUB/USD Exchange Rate Dynamics RUB per 1 USD 33.9308 32.2340 32.0234 31.3272 7% 30.2430 29.8903 29.3218 Q1 2009 Q2 2009 Q3 2009 Q4 2009 2009 Q1 2010 Q2 2010 average 6

Key Indicators 2009 – 2Q 2010 Russian Roubles, mln US Dollars, thousand EBITDA Revenues 24% 16% 32 267 31 748 975 951 27 292 27 002 859 26 039 807 843 20 400 692 398% 9 655 8 911 301% 291 280 1 940 4 520 148 3 406 102 68 -136 -4 006 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2009 2009 2009 2009 2010 2010 2009 2009 2009 2009 2010 2010 7

Top-15 World Operators (2009 outdoor revenues, in million $) 105 (4) CCO JCDecaux CBS Lamar Ströеr Titan Affichage Metrobus News APN EPA Air Media Cemusa Wall Gallery Outdoor outdoor Holding Outdoor Media Sources: Company news releases, Internet sites & JCDecaux estimates. 8

Advertising Expenditure by Medium in Russia (2Q) 2Q 2009 2Q 2010 Other Other 1% 1% Radio 4% Internet Radio Internet 11% 4% 13% Outdoor TV TV 14% 54% 51% Outdoor 15% Print 16% Print 16% 9 Source: Association of Communication Agencies of Russia (AKAR)

Advertising Expenditure by Medium in Russia (1H) 1H 2009 1H 2010 Other Other 1% 1% Radio Radio 5% 4% Internet Internet 11% 9% Outdoor Outdoor 14% TV TV 14% 54% 55% Print Print 16% 16% 10 Source: Association of Communication Agencies of Russia (AKAR)

Advertising Expenditure by Medium in Russia (Six months ended, 2007-2010) RUB b. 70 2007 2008 2009 2010 60 50 40 30 20 10 0 TV Radio Print Outdoor Internet Other 11 Source: Association of Communication Agencies of Russia (AKAR)

Advertising Expenditure by Medium in Russia (Six months ended, 2007-2010) RUB b. 25 +13% 2007 2008 2009 2010 20 +13% -41% 15 10 5 +49% +16% -35% 0 Outdoor Gallery 12 Source: Association of Communication Agencies of Russia (AKAR)

Out-Of-Home Advertising Expenditure by Industry in Russia 2Q 2009 2Q 2010 REAL TELECOM TELECOM ESTATE 11% 9% REAL ESTATE 7% FINANC 7% FINANC 11% TRAVEL 10% 7% TRAVEL BEER 8% RETAIL 5% RETAIL 11% BEER 11% SOFT 6% DRINKS 5% SOFT DRINKS FURNITURE 2% 4% FURNITURE CARS CARS 5% PERFUME 12% 11% 3% PERFUME 3% OTHER OTHER 28% 24% 13 Source: ESPAR

Out-Of-Home Advertising Expenditure by Industry in Russia 1H 2009 1H 2010 FINANC FINANC TELECOM 10% 9% TRAVEL TRAVEL 12% 7% TELECOM REAL 7% 10% ESTATE 7% REAL SOFT ESTATE CARS SOFT DRINKS 7% 13% DRINKS 4% CARS 2% FURNITURE 11% 4% FURNITURE 5% BEER 4% BEER 4% RETAIL PERFUME RETAIL 11% PERFUME 4% 12% 3% OTHER OTHER 26% 28% 14 Source: ESPAR

Gallery Market Share by Revenues vs. Competitors Russia, 2Q 2009 Russia, 2Q 2010 Poster Rasvero 2% Rasvero Poster 2% 2% 2% Bigboard Small Small 2% Bigboard players players 3% 56% 58% Anko Anko 3% 3% V.E.R.A.- Olimp Gallery V.E.R.A.- Gallery 5% 8% Olimp 9% 4% News News 20% 21% Source: ESPAR 15

Gallery Market Share by Revenues vs. Competitors Russia, 1H 2009 Russia, 1H 2010 POSTER POSTER 3% 2% RASVERO RASVERO 2% 2% BIGBOARD OTHERS BIGBOARD 3% OTHERS 56% 2% 56% ANKO ANKO 3% 3% V.E.R.A. V.E.R.A. 4% 5% GALLERY GALLERY 8% 9% NEWS NEWS 21% 21% Source: ESPAR 16

Revenue by Cities 1H 2009 1H 2010 Barnaul Kazan Barnaul Krasnoyarsk Kazan Krasnoyarsk Ekaterinburg 2% Ekaterinburg 3% 3% 1% 2% 1% 3% 3% Krasnodar Krasnodar 1% 1% Russia Other Russia Other 14% 13% Ukraine Ukraine Moscow 8% Moscow 7% 69% 69% 17

Revenue Composition Own vs. Subcontracted Boards 1H 2009 1H 2010 Ukraine Ukraine Ukraine Ukraine Media Own Boards Media Russia Own Boards Buying 5% Russia Buying Media 6% 3% Media 1% Buying Buying 11% 17% Russia Own Russia Own Boards Boards 81% 75% 18

Own Revenues by Division 1H 2009 1H 2010 Transport & Transport & Other Other 23% 23% Billboards Billboards 45% 47% Street Street Furniture Furniture 32% 30% 19

Revenue by Division 1H 2009-2010 In millions of RUB In thousands of USD 2009 2010 22 505 677 600 18 150 14 409 433 421 12 720 11 239 11 115 338 334 298 9 006 217 6 563 Billboards Street Transport & Subcontracted Billboards Street Transport & Subcontracted Furniture Other Revenues Furniture Other Revenues 20

Gallery’s Cost Optimization, RUB Cost saving, in RUB thousands 1 450 000 1 400 000 1 350 000 1 300 000 1 250 000 1 200 000 1 150 000 1 100 000 Total savings = 250 mln RUB 1 050 000 1 000 000 21

Gallery Client Base Gallery Client Base Focus on Direct Clients 1H 2009 1H 2010 Direct Direct Clients Clients Media Media 46% 52% Agencies Agencies 54% 48% 22

Revenues Pacing, RUB, 1H and YTD (in millions of Russian Roubles) 1H Sales 1H 2009 1H 2010 Pacing, % Billboards 600 677 13% Street Furniture 421 433 3% Transport & Other 298 338 13% Subcontracted revenues 217 334 54% Total 1,536 1,782 16% YTD YTD YTD Sales 8 months 10 (1) 8 months 09 Pacing, % Billboards 790 953 21% Street Furniture 559 572 2% Transport & Other 395 464 18% Subcontracted revenues 304 457 50% Total 2,049 2,447 19% (1) Contracted as of 20 August 2010 23

Revenues Pacing, USD, 1H and YTD (in thousands of US dollars) 1H Sales 1H 2009 1H 2010 Pacing, % Billboards 18,150 22,505 24% Street Furniture 12,720 14,409 13% Transport & Other 9,006 11,239 25% Subcontracted revenues 6,563 11,115 69% Total 46,439 59,269 28% YTD YTD YTD Sales 8 months 10 (1) 8 months 09 Pacing, % Billboards 24,174 31,595 31% Street Furniture 17,107 18,970 11% Transport & Other 12,096 15,397 27% Subcontracted revenues 9,325 15,146 62% Total 62,703 81,108 29% (1) Contracted as of 20 August 2010 24

Advertising Market Size Forecast in Russia, in RUB Espar Zenith Analyst Optimedia 2010 2010 +7.0% TV 2010 Russia Ad +5.2% PRINT Spend forecast +15% +9.9% +15% OUTDOOR +5.4% RADIO +14.8% INTERNET 25

Gallery Business Directions Billboards Street Furniture Transport & Other 26

Gallery Inventory Portfolio Number of advertising faces FORMATS 30 June 2010 31 December 2009 Russia Ukraine TOTAL Russia Ukraine TOTAL Billboards 8,978 3,556 12, 534 8, 973 3, 496 12, 469 Street Furniture 17,994 2,781 20,775 16, 928 2 ,830 19, 758 Transport 12,459 - 12,459 13,147 - 13, 147 Other 1,206 196 1,402 1 ,485 256 1, 741 Total 40, 637 6, 533 47 ,170 40, 533 6, 582 47, 115 27

Gallery Key Performance Indicators Occupancy rates RUSSIA 2Q`08 3Q`08 4Q`08 1Q`09 2Q`09 3Q`09 4Q`09 1Q`10 2Q`10 Billboards 87% 85% 83% 57% 78% 78% 85% 76% 87% Street 75% 74% 76% 72% 75% 75% 74% 70% 74% Furniture Transport & n/a n/a n/a n/a n/a n/a n/a n/a n/a Other UKRAINE 2Q`08 3Q`08 4Q`08 1Q`09 2Q`09 3Q`09 4Q`09 1Q`10 2Q`10 Billboards 86% 83% 80% 38% 49% 50% 77% 67% 49% Street 59% 81% 39% 41% 35% 34% 55% 68% 45% Furniture Transport & n/a n/a n/a n/a n/a n/a n/a n/a n/a Other 28

Capital Expenditures (in thousands of US dollars) Capital Expenditures 2009 2010 Change 2 Quarter Billboards and ultravision 3x6 244 668 424 174% Directional signs 639 382 - 257 -40% Other advertising formats 102 257 155 152% Other CAPEX 14 434 420 30times Total 999 1 742 770 78% Six Months Ended Billboards and ultravision 3x6 745 1 072 327 44% Directional signs 802 571 231 -29% Other advertising formats 386 258 - 128 -33% Other CAPEX 215 635 420 195% Total 2 148 2 537 389 18% 29