March 2012 Corporate Update Leading private energy coal provider in Ukraine
Sadovaya Group at a Glance 2 Sadovaya s assets on the map of Ukraine Sadovaya Group is a private Ukrainian mining company involved in business of preparation and marketing of energy coal The first public Company in Ukrainian coal sector IPO and listing on Warsaw Stock Exchange (WSE) in December 2010 Reliable transparent partner with high quality corporate structure and governance Sadovaya Mine (operating) Roskoshniy Mine (under development) Rassvet-1 Mine (operating) Anthracite Meager coal 17.6 12.4 13.2 Waste dumps Luhansk city 6.3 1.4 0.3 Tailing ponds Gas and flame coal Coking coal Sadovaya Group in figures Resources: 51.1 mmt (JORC) 2Р reserves: 31.3 mmt (JORC) 7.9mmt of resources in coal waste deposits 2 operational mines and a license for development of another mine field 1,264,496 t coal traded in 2011 475,247 t of coal mined in 2011
The most liquid Ukrainian WSE newcomer 3 Thanks to big number of private investors Sadovaya Group shares are one of the most liquid among Ukrainian companies that made an IPO at WSE in 2010-2011 25% of all transactions with Ukrainian companies on WSE were made with Sadovaya Group shares in 2011 Average monthly trade volume of Sadovaya Group comprises $6 mln with 4,504 trades Sadovaya Group shares are included into indices swig80, WIG, WIG-BASIC-MATERIALS and WIG-UKRAINE 16 14 12 10 8 6 4 2 0 100% Sadovaya Group (SGR) vs WIG-index Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Comparison of trade numbers of Ukrainian companies that made IPO at WSE in 2010-2011 90% 80% 70% 60% 50% 40% 30% 20% 10% Source: Bloomberg 0% 72% 72% 86% 77% 45% 39% 48% SGR WIG INDEX (rebased) 47% 26% 35% 37% 36% Coal Energy Westa Ovostar KSG Agro IMC Milkiland Sadovaya Group Agroton Source: Bloomberg
Sadovaya Group results and outlook 4 '000 tones 2012F % change, y-o-y 2011 Expected % change, y-o-y 2010FY Coal sales 1,177-7% 1,264 15% 1,098 Coal mining 532 12% 475 70% 279 Sadovaya mine 278 9% 255 121% 116 Rassvet-1 mine 254 16% 220 35% 163 Coal recovery from waste dumps 125 124% 56 299% 14 '000 USD Sales 86,662 0% 87,027 33% 65,443 EBITDA 16,460 5% 15,643-4% 16,276 Net income 11,625-12% 13,232 68% 7,889 (1) EBITDA is defined as operating profit/(loss) before depreciation and amortization, gains/losses on sale of property, plant and equipment and intangible assets and revaluation gains/losses on property, plant and equipment recognized in income statement
Coal Sales 5 The Group sold 1,265 ths. t of coal in 2011, + 15% y-o-y Export share comprised 5% of total sales in 2011 Increased coal output from waste recovery segment will extend Groups export opportunities Key Group s customers include Vostokenergo, Centrenergo, DTEK, Zaporizhia Ferroalloy and Nikopol Ferroalloy Plans for 2012: reduce the share of purchased coal in total sales volumes increase the export share in total sales diversify customer base Sadovaya Grop sales volumes, mln. t Monthly sales volumes in 2011, ths. t Customer structure, 2011 1,4 1,2 160 140 5% 6% 1,0 120 0,8 0,6 0,4 100 80 60 40 89% Export Metallurgical sector Energy sector 0,2 20 0,0 0 2010 2011 2012F
Mining Operations: On the Development Path 6 Developments in 2011: Purchase of the license to develop Roskoshniy mine field Jan March April July Sep Nov Dec The longwall on Rassvet- 1 mine was closed due to geological reasons The new longwall on Sadovaya mine was launched The new longwall on Rassvet-1 mine was launched By the end of 2011: 3 longwalls on Sadovaya mine; monthly coal output of 8-9 ths. t each 2 longwalls on Rassvet-1 with monthly coal output of 15-18 ths. t each. The old one is expected to be closed in nearest months Developments in 2012: Launch of two longwalls on Rassvet-1 mine: the first one is expected to be commissioned in 2Q 2012, the second in 4Q 2012.This will increase Rassvet-1 coal output up to 36 ths t per month The Group will conduct additional geological research on Roskoshniy mine filed in 2012. The mining and construction works are scheduled for 2013 mmt 0,6 0,4 Sadovaya s mining results +71% +12% 0,2 0,0 2007 2008 2009 2010 2011 2012F
Waste recovery: On the Schedule 7 The Group is constructing two enrichment factories and plans to construct another two in mid term prospective. Total processing capacity will comprise 3.6 mmt of feed material The construction is supported by EBRD loan of USD 36 mln. The funds will cover construction of the factories and purchase of additional waste material We are finalizing the construction of the foundation for the first factory; final part of equipment was already imported and delivered to the producer s site, where it is being assembled to modular blocks The next steps will include: -assembling modular complex on Company s site - installing necessary metalwares Plans for 2012: Launch: 1 st waste dump factory in 2Q 2012 Annual recycling capacity: 900 ths t of feed Annual coal output: 180-280 ths t 2 nd waste pond factory in 4Q 2012 Annual recycling capacity: 900 ths t of feed Annual coal output: 240-300 ths t Supported by the loan of - starting-up and adjustments works -official launch
Improved Debt Capital Structure 8 Enhanced transparency and improved corporate standards increased investor confidence in Sadovaya Group The Group expanded opportunities on the debt capital market. It became the first mining company in Ukraine which received EBRD financing 30% 25% 20% Volume (USD mln) and cost of debt 16,9 The Group refinanced old debts and secured additional long term financing on favorable conditions despite the tough market situation in Europe 15% 10% 5% 16,5 18,0 43,0 Latest Sadovaya Group debt raisings Lender Project type Amount, USD 0% 0 0,5Dec-2010 1 1,5June-2011 2 2,5 Dec-2011 3 3,5 June-2012E 4 4,5 5 Source: Sadovaya Group Interest rate Maturity Use of proceeds Project financing 36 mln Libor3M + 6.5% 7 years Construction of at least 4 factories for waste dumps and tailings ponds reprocessing Refinancing 18 mln Libor1M + 8.5% 5 years Refinancing of old debts on more favorable conditions Project & working capital financing 7 mln To be discussed 5 years Development of existing mines and working capital financing
Contacts 9 For general inquires: Sadovaya Group S.A. 412F, route d Esch, L-2085 Luxembourg, the Grand Duchy of Luxembourg Main Office 6 Moskovskaya Street Alchevsk, Luhansk Oblast Ukraine 94204 t: +38 06442 525 52(53)(54) f: + 38 06442 555 58 Kyiv office 50b Zhylyanska str., 4th floor Kyiv Ukraine 01033 t: +380 44 373 6821 info@sadovayagroup.com www.sadovayagroup.com For investor relations inquires: Alex Dubyna IR Manager dubyna@sadovaya.com.ua t: +38 095 276 4539