Russia remains in 6th in GDP out to 2050 GDP in PPP terms, 2011 US$ trillions

2050 GDP Ranking GDP at PPP

China 53.856

US 37.998

India 34.704

Brazil 8.825

Japan 8.065

Russia 8.013

Mexico 7.409

Indonesia 6.346

Germany 5.822

France 5.714

Source: Price Waterhouse Coopers.

2011 GDP Ranking GDP at PPP

US 15.094

China 11.347

India 4.531

Japan 4.381

Germany 3.221

Russia 3.031

Brazil 2.305

France 2.303

UK 2.287

Italy 1.979

Russia improving business climate from 112 finish in 2012 Rank in Ease of Doing Business Index (total 185 countries), 2013

Economy Ease of Doing

Business

Starting a Business

Registering Property

Getting Credit

Protecting Investors

Paying Taxes

Enforcing Contracts

Resolving Insolvency

Singapore 1 3 28 3 2 5 12 4

United States 4 20 25 3 6 64 11 17

China 96 158 48 73 98 120 19 78

Russia 92 88 17 109 115 56 10 55

Brazil 116 123 107 109 80 159 121 135

India 134 179 92 28 34 158 186 121

Source: The World Bank.

Unemployment rate lower in Russia than U.S.

0

2

4

6

8

10

12

14

1994 1997 2000 2003 2006 2009 2012 2015 2018

Percent

China

Russia United States

Source: International Monetary Fund.

Russia is recovering from the hard hit in the recent financial crisis GDP Growth

-15

-10

-5

0

5

10

15

20

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

Source: International Monetary Fund.

Brazil

Russia

China

India

Russia surpassed US in 2012 in military expenditures

0

1

2

3

4

5

Indonesia Brazil China India United States Russia

Percent of GDP

Source: The World Bank.

Exports of oil from Russia have increased since 2009 Value of oil exports

10

15

20

25

30

1994 1998 2002 2006 2010 2014 2018

US$ billions

Sources: International Monetary Fund, Central Bank.

Forecast

Russia maintains low government gross debt

0

20

40

60

80

100

120

140

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent of GDP

Source: The World Bank.

Russia

Developing Asia

Advanced economies

Foreign direct investment surged into Russia since 2004

0

10

20

30

40

50

60

70

80

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

US$ billion

Source: UNCTAD.

Russia’s service sector grows as agriculture shrinks

Agriculture 6.6

Industry 35.7

Services 57.7

2001 Agriculture

3.9

Industry 36.0

Services 60.1

2012

Source: The World Bank.

Russia GDP annual growth rate Percent change in gross domestic product

4

3.4

5 4.8 4.8

4.3

3

2.1

0.8 1

1.3

2

0.8

0

1

2

3

4

5

6

2011 2012 2013 2014

Percent

Source: Federal State Statistics Service.

19 35 57 82

167

324

514

674 678

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD

Open store count

Subway restaurant growth

Source: Subway.

Subway stores city growth

10 13 20 35 57 82

167

324

514

674 678

3 4 7 16 25 31 37 51 76

118 119 0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD

Stores Open - End of Year Cities Count

Source: Subway.

Subway, Russia shareholder’s return Annual % cash return on investment

0%

50%

100%

150%

200%

250%

300%

2011 2012 2013

Year of Return

Source: Subway.

Credit Suisse – leading franchise in Russia

Source: .

Moscow

Kazakhstan

Russia

Norway

Sweden

Finland

Latvia

Lithuania

Belarus

Ukraine

Georgia

Azerbaijan

Industry wide recognition

• Credit Suisse continues to be recognised as the market leader in

arranging debt and equity financing on international capital markets

for major Russian corporations

(1) 2005–2014 YTD.

(2) 2005–2014 YTD.

Long standing presence in Russia

Full capabilities on the ground in Moscow • Longstanding, continuous presence in Russia since 1991

• Demonstrated consistent market leadership across all products:

– US$30.9bn of equity capital raised through 28 offerings(1)

– US$18.3bn of public debt raised through 50 offerings(2); consistent

leader in the Eurobond underwriting for Russian issuers

– Adviser on over 35 completed Russian M&A transactions, with

vast experience across all sectors

• Over 200 employees – a full range of investment banking, asset

management and private banking

• Over 20 Russia-focused bankers across Moscow and London

• Sector focused responsibilities

• On-the-ground sector expertise and execution capability

• Leading Russian Equities platform:

– 5 Moscow-based sales and trading specialists and a further 5 in

London

– 8 Moscow-based equity research analysts covering 50 stocks

Equity Capital Markets

November 2012

US$ 1,830,000,000

Joint Bookrunner

IPO

Debt Capital Markets

April 2012

US$ 400,000,000

Joint Bookrunner

8.500% Reg S / 144a

offering due April 2017

CHF525,000,000

2.177% bonds due February 2018

CHF150,000,000

2.730% bonds due February 2021

Joint Bookrunner

January 2013

US$ 1,000,000,000

3.914% semi-annual Reg S /

144 A offering due January

2018 Joint Bookrunner January 2013

US$500m

IPO

Joint Global Coordinator

and Bookrunner February 2013

US$1,330,000,000 Acquisition of a 50% stake

in Euroset

December 2012

Financial Advisor to MegaFon

Mergers & Acquisitions

Undisclosed

Creation of gas production

Joint Venture

August 2012

Lead Financial Advisor to

Rosneft

Advising Sheremetyevo on

the merger with Terminal D

April 2012

Joint Financial Advisor

US$1,200,000,000 US$3,650,000,000

Acquisition of 10.7% stake in MegaFon from Altimo and 26.1% stake in Telecominvest from TeliaSonera by AF Telecom

April 2012 Advisor to AF Telecom

AF Telecom

Holding

to

Financial Advisor

Sale of 50.0% equity stake

in

October 2012

US$26.8bn

Existing locations in Russia

Estonia

Best Investment Bank

Deal of the year: Russia’s

US$5.5bn eurobond

Best IPO in EMEA: Rusal

Best Global Bank

Best Emerging Markets

Investment Bank

Best Investment Bank in

Russia

Best IPO in CEE: Nomos Bank

Best structured finance deal in CEE:

Metalloinvest

Best CHF bond: VTB Bank’s CHF300mn

issuance

Best Global Emerging

Markets M&A House

Best Global Emerging

Markets M&A House 2012 2011 2011 2010 2010

Acquisition of a 49% stake in Iera

Sole Financial Advisor to Rosneft

July 2013

US$2,900,000,000

Undisclosed

Creation of mobile joint venture

December 2013

Financial Advisor to

Rostelecom

IPO

Active bookrunner

May 2013

US$229,000,000

IPO

Active bookrunner

June 2013

US$80,000,000

Follow-on

Sole bookrunner

September 2013

US$288,000,000

Follow-on

Lead Left bookrunner

November 2013

US$95,000,000

February 2014

US$ 974,000,000

Joint Global Coordinator

and Joint Bookrunner

IPO

April 2013

US$1,000,000,000

Joint Global Coordinator

7-year Reg S / 144a offering

January 2014

CHF 325,000,000

Joint Bookrunner

5.125% 10.25NC5.25 Tier 2 Notes due 2024

February 2014

US$ 1,000,000,000

Joint Bookrunner

5.500% Reg S / 144A Tier 2 Eurobond due 2024

December 2013

US$ 1,000,000,000

Joint Solicitation Agent

PerpNC 5.5 7.875% Upper Tier 2 Loan Participation Notes

Russia at a glance

Note: (1) As per World Bank definition – those with per capita consumption levels of $10/day or higher Source: World Bank, IMF, Rosstat , Federal Customs Service.

Population 143.4 mln (#9 globally)

Total area 17.1 mln km2 (#1 globally)

GDP (2013) $2,098 mln (#8 globally)

Debt/GDP (2013) 11.2%

Export structure (2013)

Metals 7.8%

Energy products

70.6%

Chemicals 5.8%

Other 15.8%

Inflation (2013) 6.5%

Life expectancy 70 years

Middle class1 60%

GDP per capita $14,604

GDP breakdown (2013)

$526.4bn in 2013 Other 28.4%

Manufacturing 14.8%

Wholesale/retail trade 18.2%

Construction and real estate 19.3%

Mineral resources and mining

10.8% (incl. oil&gas 9.3%)

Transportation and telecommunications

8.5%

Russia macro environment

Source: Euromonitor, Global Insight.

0

3,000

6,000

9,000

12,000

15,000

18,000

1990 1994 1998 2002 2006 2010 2014E

(US$)

23.0 20.2

4.4 3.9 3.3 3.2 1.0 0.5 0.4 0.4 0.3 0.3 0.2 0.2 0.1 0.1

0

10

20

30

(US$ in trillions)

GDP per capita dynamics Expected economy size in 2020

Russia macro environment (cont’d)

Source: Euromonitor, Global Insight.

1.3 3.3 4.1 4.2 4.2

5.6 6.6 6.6 7.2 7.4 8.1 8.7 8.8

10.5 10.8

24.2 26.5

39.9

IndiaUkraine

ChinaSouth Africa

BelarusRomania

GlobalKazakhstan

BrazilHungary

PolandRussia

CroatiaCzech Republic

SlovakiaEurozone

UKUSA35.8

25.4

10.0 9.8 9.4 8.1 7.4 7.2 6.8 6.1 5.8 4.1 3.8 3.0 2.5

0.9

0.0

10.0

20.0

30.0

40.0

USA U

K

Slo

vaki

a

Cze

ch R

ep

ub

lic

Cro

atia

Po

lan

d

Ru

ssia

Hu

nga

ry

Bra

zil

Kaz

akh

stan

Ro

man

ia

Sou

th A

fric

a

Be

laru

s

Ukr

ain

e

Ch

ina

Ind

ia

(US$ in thousands) (US$ in thousands) Consumer spend per capita in 2013 Disposable income per capita in 2013

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0

700

1,400

2,100

2,800

RTS Index Dynamics

Source: FactSet.

Russia at a glance

Russia

Population

143 million

9th largest

Consumer market in

the world

Consumer spending by

2025

US$3 trillion

2020

Europe’s largest and

world’s fourth-biggest

consumer market

Western companies sell

6-12 times

more per capita on average in

Russia than in China and India

73.8 million users

Largest online population in

Europe

Biggest mobile phone market in

Europe

230 million phones

Doing business relatively easier

92nd in World Bank’s Doing Business Rankings

2014 and is actually now the top-ranked

BRIC

Russia joins WTO

Intends Open Government

Partnership membership

Largest labor force

(75 million workers)

World’s 7th

Nominal GDP in 2013

US$2.1trillion

1.2%

Real GDP growth

in 2013

Government debt fallen

from 70% of GDP to

9% of GDP over

the last 10 years

Unemployment

rate of 5.4%

Record low for the

last two decades

Source: Russia’s Ministry of Economic Development; Russia's statistical agency; World Bank’s Doing Business Rankings 2014; Russia attractiveness survey 2013, Ernst & Young.

Russia’s competitive advantages and areas for improvement

Source: Russia attractiveness survey (total respondents: 206), 2013, Ernst & Young.

-

Russia's strengths and challenges

33%

Political, legislative

and administrative

environment

38%

Government initiatives

on sustainable

development

56%

Human resources,

labor skills

51%

Research, innovation

45%

Entrepreneurial

environment

70%

Domestic market

64%

Telecom infrastructure

61%

Natural resources

Business environment in Russia

Summary of new government initiatives to improve business environment

• Penalties for corruption raised significantly

• IP protection enhanced

• Entry into WTO despite extremely drawn-out acceptance process

• More spending on social infrastructure (health, education)

• Clear definition of the problems to be solved in the near future:

o Diversification away from oil

o Independence of courts, guarantee of property rights

o Attracting global business, investment and technologies

• Strategy of Russia innovative development

• Easing financial regulation

• Investment climate improvement

0%

10%

20%

30%

40%

50%

60%

70%

S&P Russian Federation BMI

GVA

Russian private equity market opportunities

Source: S&P Russian Federation BMI, Rosstat

VIYM INVESTMENT ACTIVITY

Hospitality real estate with mixed-use components

Growth Capital: consumer goods & services,

industrials & materials, B2B services, IT & internet,

healthcare services

Gross Value Added vs. Stock Index structure, 2013

Stock market provides LIMITED ACCESS to all the sectors of Russia’s economy

Private Equity opens ACCESS to diversified market opportunities

Source: EBRD

Source: EBRD

0.86 1.15 1.15 1.30 1.35 0.72 0.87 3.19

5.59 5.88 7.07 5.88 7.21 7.31 8.53 8.74 12.82

20.21

69.74

0

10

20

30

40

50

60

70

80

Global Cities

The best time to buy ● Selecting the right niches

Source: Rosstat; VIYM data

Year-on-Year growth rates of selected

consumer sectors vs. Russia’s GDP

50%

100%

150%

200%

250%

2011 2012 2013 2014 2015 2016

Equipment rental

Chocolate production

Paper tissue

Fast food

Healthcare

Russia's GDP (nominal)

Growth Capital Hospitality Real Estate Maturity levels of hospitality markets

Source: HVS

Russia /

CIS Cities

Asia-Pacific

Cities

hotel rooms per 1000 residents

35 40

42 44

50

56

0

10

20

30

40

50

60

2011 2012 2013 2014F 2015F 2016F

Selected regional case studies • Growth capital

Source: Euromonitor

3

4

7

16

24

0 10 20 30

Russia

World

CEE

EU

USA

Tissue Consumption

per Capita in Russia (kg)

56 63 65

71

102

154

174

0

20

40

60

80

100

120

140

160

180

200

2010 2011 2012 2013F 2014F 2015F 2016F

370 400

440 484

532 586

644

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014F2015F2016F

Tissue consumption in Russia (000 t) STG revenue dynamics (US$ million)

STG at a glance

• Top-3 producers of base paper

and tissue products in Russia

• Base paper: 15% market share

• Tissue products: 7% market share

• Own tissue base paper production

• Proprietary well-established

distribution system

Family Doctor at a glance

• Middle class medical company

in Russia

• 3 outpatient clinics across

Moscow

• Home care medical services in

Moscow and in the Moscow

region

• The client base >200,000

patients

8 10

14

19

26

36

0

5

10

15

20

25

30

35

40

2011 2012 2013 2014F 2015F 2016F

Source: Businesstat

Source: Euromonitor

Total volume of healthcare market in

Russia (US$ billion) Family Doctor revenue dynamics (US$ million)

Russia’s healthcare market

structure

8%

30%

70%

0% 50% 100%

Other

Private

State

Source: Businesstat

Source: STG data Source: Family Doctor data

Selected regional case studies • Hospitality RE

Four Seasons Lion Palace St. Petersburg is the first in Russia and the

latest in a string of heritage hotels from Four Seasons Hotels & Resorts (including 2013 World’s Best

winners in Budapest, Istanbul, and Florence), and the brand’s most ambitious project

Top Europe Hotel Opening in 2013

Select International Awards:

St. Petersburg is one of

the fastest growing hotel

markets in Europe by RevPAR

of 5-8%* in 2013 (in EUR, JLL)

* depending on a hotel segment

Challenges vs

Opportunities

Developing retail business in Russia

28

About company

Founded in 2008

1st store opened in April, 2009

Turnover

2013 – 237mln USD

2014 – 350 mln USD

9 stores (+4 to be opened)

Internet store

1 200 000 square feet

30 000 SKU

More than 1600 employees

Moscow

Unique format of Hoff stores

One-stop-shopping format. Everything for home furnishing under one roof

Home furnishing ideas and solutions. Unique merchandizing concept

Wide range in low middle – upper middle segment of the market

Variety of modern styles. Hoff is a specialist in contemporary living.

Value-for-money. Wide range of high quality products for affordable prices.

Leading international brands

High level service

Major retail trends in Russia

Competition

Consumer preferences

Revenues of Top-30 retailers in Russia were 14% of the total turnover in 2012, compared to 12% in 2011, while the share of grocery retailers has increased from 9% to 10% respectively

There is a shortage of quality retail and warehouse premises

Expansion of global e-commerce retail players onto the Russian market

Consumers are becoming more and more focused on retailers’ promises: 83% are frustrated by failure to deliver on a promise

E-commerce market continues to increase by 25-30% annually

Price and quality are still the most important factors for consumers, and the main drivers for growth in private label sales, up to 29% annually

Consumers are becoming more global and mobile: the volume of cross-border shopping is growing by about 50% per year, and has now surpassed 15 billion USD

Source: Infoline, research by Accenture, news resources

31

Russia now has a leading position in the European retail

market

55% 55% 53% 51% 52% 52% 53% 54% 55% 56% 45% 45% 47% 49%

48% 48%

47% 46% 45% 44%

2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F

Food Non-food

8.7

22.6

13.9 10.9

14.6

21.4 19.1

16.5

Russian retail turnover, 2006-2015, trillion RUR

25.2 23.8

Thanks to enormous growth, as well as the sheer size of the economy, Russia in 2012 became the leader in retail turnover in Europe

Ministry for Economic Development (MED) forecasts ~5-6% CAGR of retail turnover in comparable prices

Russia 509.5

France 418.2

Germany 410.1

UK 377.6

Italy 253.1

TOP-5 countries by retail turnover in 2012, bln EURO

2011 2012 2013 2014

MED forecast 5% (1 year prior period in

comparable prices) 6.1% 5.2% 5.2%

Fact 16% 12% ?

+26%

+14%

+6%

Source: GFK, Federal Statistics Agency, MED forecast 2013-2015

Retail sales productivity in Russia is much lower than in

Europe

TOP-5 European countries and Russia by retail sales productivity (turnover per sq.m. of sales area (€/sq.m.) in

2012

Per capita sales area (sq.m. pe 1,000 people) and sales productivity (€/sq.m.) in Russia is 1.5 times lower compared to leading European countries

Earnings in Russia are also two times lower

TOP-100 Russian retailers increased their productivity, €/sq.m.

TOP-100 Russian retailer productivity, €/sq.m.

sq.m. per

1,000 people 1260

€/sq.m. ,7832

population 4.9 Mincome

$/year 31,459

Norway

sq.m. per

1,000 people 1250

€/sq.m. 6,246

population 9.5 Mincome

$/year 25739

Finland

sq.m. per

1,000 people 1,43

€/sq.m. 7,406

population 0.5 M

income

$/year 40

Luxemburg sq.m. per

1,000 people 1,21

€/sq.m. 6,411

population 9.5 M

income

$/year 26,242

Sweden

sq.m. per

1,000 people 1,51

€/sq.m. 6,936

population 7.9 M

income

$/year 30,06

Switzerland

sq.m. per

1,000 people 660

€/sq.m. 4,771

population 142.8 M

income

$/year 9,899

Russia

4,504 4,807 5,207 5,319

2009 2010 2011 2012Sales productivity

9% 9%

6% 7%

Inflation

6%

Source: GFK GeoMarketing, OECD Better Life Index

33

Modern Russian Consumer – who is it?

Sources: Romir, FOM, Federal Statistics Agency, National Bureau of Credit Histories, GFK.

New challenges and “old” actions

Decline of customer demand

Currency risk

Different purchasing power in Moscow and regions

Strengthening completion (price wars)

Increase of interest rate

Lack of professional trade space

Aggressive promo

Product matrix adjustment downwards

Fix all expenses in rubles

Decrease import range in favor

of local assortment

Differentiated product matrix

Exclusive range

Direct purchasing

Improve stock turnover and stock/AP

ratio with suppliers

Own big box construction

E-Commerce development

Best time to optimize expenses and increase efficiency Best time for expansion

Best time to increase brand awareness

Best time to get new customers Long term benefits vs. short term negatives

35

Opportunities

Every crises has a winner

Thank you! Contacts:

Michael Kuchment

mk@hoff.ru

Mob. +7 985 764 49 53

http://ru.linkedin.com/in/mkuchmentwww.facebook.com/mkuchment

About me

Source: .