Doing private equity in RussiaMarch 2008

2

Long track record

in Russia

Entirely

independent

Bi-culturalbusinessapproach

Natural progress incapital under

management to meetchanging local mid-sized opportunities

AttractiveScandinavianinvestor base

Small and mid-sized focus

Mint Capital at-a-glance

3

An established local private equity investor in Russia

After seven or eight years of easy growth, Ulf Perssonbelieves that the corporate environment in Russia isbecoming much more competitive and that for companiesto be successful they will have to be able to distinguishthemselves through the quality of the products andservices they offer. «We want to be part of that process,»he says, adding that increasingly the fund is looking toidentify companies that are market leaders and havewell-established brands.

Euromoney, May 2007

Investing $2 million in Elecsnet, Benchmark Capital hasstarted its activity in Russia. Elecsnet admits that“friendship” between partners of Mint and Benchmark wascrucial in attracting such an well-known investor.“Benchmark is typically cautious. They might have looked atthe market for some time to finally chose a practically non-risk variant – a rapidly growing business with a clear modeland due diligence made by Mint Capital”, says Director ofAurora Russia Oleg Bystranov.

Vedomosti, October 2006

Russia's health and beauty industry is attracting foreigninvestors, with the country’s second-largest beauty salonchain recently selling a major stake to Mint Capital. «Up tillnow we grew organically. Now we expect revolutionarygrowth, planning to have 100 salons in various regions of thecountry within two years», — Aleksandr Glushkov, beautysalon chain owner. As disposable incomes rise, the healthand beauty sector promises to become not only the mostglamorous, but also one of the fastest-growing in Russia.

Russia Today, July 2007

Verysell has got financing from Deutsche Bank and HillsideApex Fund SPC. Combined with the capital raised earlier in2007 from Mint Capital, RP Explorer Fund, Renaissancepre-IPO and Steep Rock Capital, the IT holding has nowmore than $65 million for further development. “We are gladto have such a strong pool of investors”, says Verysell’sPresident Mikhail Krasnov. “The Board has beenstrengthened with “experienced financiers” including UlfPersson, Paul Swigart and Zafar Zokhidov”, he adds.

Vedomosti, January 2008

4

Investment team Advisory committee

Ulf PerssonManaging Partner

Co-Founder

Fredrik EkmanManaging Partner

Co-Founder

Gleb DavidyukPartner

Ben WilkeningPartner

Kirill VesselovInvestment Manager

Vladimir ZaluzhskyPR and IR Manager

Vitaly VinogradovCorporate Governance

Ahmadishin EvgenyInvestment Manager

Dmitry FedoseevInvestment Manager

Tatiana GerastovskayaFinancial Controller

Sven HirdmanEx- Ambassador

of Sweden to Russia

Jonas af JochnickFounder of Oriflameand Oresa Ventures

Jan AnkarcronaInvestment Adviser

to major Scandinavianfamily offices

Maxim BoykoIndependent Investor,

Ex-Deputy PrimeMinister of the Russian

Government

5

Drivers of demand for capital & skills in the region

§ Balance sheet management§ LT value vs. ST cash flow§ Corporate governance§ M&A Capitalization

Private equity

§ Working capital§ Capex & marketing§ Net margins§ Non-$$ value Competition

§ Tax compliance§ Net margins§ Corporate governance§ Transparency Compliance

Value addedtax (18%)

Company profittax (24%)

Personal incometax (13%)

Unified socialtax (26-2%)

40%

10%30% 30%

“Grey” company

Volume of tax paid by “grey” and compliant companies

§ The “value-added” factor iscrucial – entrepreneurs arelooking for “wise” money

§ The Government is severelycombating “grey” businesses

§ Being “grey” means exposure to“predatory” state officials

§ Competition and compliance areputting pressure on EBITDAmargin of companies boostingthe need for external capital

6

Capitalizing on Russia’s strong growth

$798 $814

$1 119

$1 450

$519

$897

$1 181

$1 496

$0

$200

$400

$600

$800

$1 000

$1 200

$1 400

$1 600

Poland2006

Hungary2006

ChezhRepublic

2006

Portugal2006

Russia2007E

Russia2010E

Russia2012E

Russia2014E

($ p

er m

onth

)

Retail

Telecoms

2 4 6 8 10 12

Construction

Food processing

European level

EBITDA multiples

Entry valuation, 2006

Source: KPMG.

Sector growth forecasts 2007E - 2011E CAGR

§ Positive investment climate, characterized byrapid economic growth and a stable, predicablepolitical and legal environment

§ Multiples are still lower than in EU

Source: BP, US Mining data,Troika Dialog estimates..

Retail

Russian income to reach European levels

0% 10% 20% 30% 40% 50%

Mobile

Fixed line

Non-food retail

Pharmaceuticals

Media

Construction

Autumobiles

Organized food retail

Banking loans

IT integration

Broadband

(% of annual growth)

7

Russia’s living standard will keep going up

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E

Real GDP growth (YoY, %) Industrial production growth (YoY, %) Retail trade growth (YoY %)

Source: Federal Statistics Service, Central Bank of Russia, Ministry of Finance of Russia, Central Bank of Kazakhstan, National Bank of Ukraine, Renaissance Capital estimates.

§ Growing wages accelerate personalspending

§ Big opportunities for consolidation infragmented consumer-facingindustries, in particular retail,healthcare and financial services

Wages and disposable income Private consumption and GDP

§ Private consumption drives GDPgrowth

§ Regional cities are developing andstart offering investmentsopportunities

2,3792,996

4,125

5,354

6,939

8,869

10,837

12,609

14,31615,8%

13,6%

11,0%

12,5% 11,9%

9,7%

0,000

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2002 2003 2004 2005 2006 2007 2008E 2009E 2010E

($ p

er y

ear)

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

GDP per capita ($) CPI (annual average, %)

8

Russian private equity market

300635

2213

3241

5465

21 302055002600

1000

2000

3000

4000

5000

6000

1994 1995 1996 2000 2001 2002 2004 2005 2006 2007*

($ m

illio

n)

§ PE is still in its infancy in the region. Accordingto various estimates, capital under managementof PE teams in Russia ranges from $8bn to$10bn

§ PE investments in 2006 totaled $1,4bn or 0,14%of Russia’s annual GDP

§ Most deals are cash deals. Leveraged buyoutsare rare

§ Most PE in the region is growth capital

§ Exits are becoming easier – strategic investorscontinue entering the market

Raising dynamics (volume of new PE capital)

* Including funds that are being currently raised.

PE investments as % of GDP, 2006

1,44

1,26

1,05

0,61 0,60 0,57

0,45 0,450,39 0,37 0,34 0,33 0,31 0,28 0,26 0,23 0,21

0,12 0,11 0,100,03

0,14

0,000

0,200

0,400

0,600

0,800

1,000

1,200

1,400

1,600

Swed

en UK

Net

herla

nds

Fran

ce

Hun

gary

Eur

ope

Cze

ch R

epub

lic

Belg

ium

Irela

nd

Spai

n

Den

mar

k

Italy

Ger

man

y

Sw

itzer

land

Nor

way

Finl

and

Pola

nd

Rus

sia

Por

tuga

l

Rom

ania

Aust

ria

Gre

ece

(% o

f GD

P)

Source: EVCA/ Thomson Financial / PwC, 2006.

SectorTargetBuyerDate

ConfectionaryKorkunovWrigley21-Jan-08

PharmaceuticalsAkrihinPolpharma22-May-07

BankingAbsolut BankKBC19-Apr-07

ConfectionaryRuzannaNestle27-Nov-08

ConfectionaryUnited BakersKellogg18-Jan-08

Ice-cream productionInmarkoUnilever5-Feb-08

Notable recent transactions

Source: Media reports.

9

Mint Capital’s portfolio – both small and largecompanies with revenues from $10M to $600M

Total invested to date >$70M

10

Competitive strength ProspectsCurrent statusCompany

§ >$20M of estimatedrevenue in 2008

§ >20 salons in majorRussian cities

§ The owner (graduate of theStockholm School ofEconomics) is a repeatentrepreneur with strongexperience in real estate whichis crucial for securing bestlocations for salons

§ Own branded cosmetics line

§ Strategy to capitalize on theearly stage of beauty salonssegment development andgrowing domestic consumerexpenditures: chain playerscontrol only 1% of the beautymarket

§ 1st national beautychain with 100salons by 2010

§ Sale to strategicinvestor

Competitive strength ProspectsCurrent statusCompany

§ >$40M of estimatedrevenue in 2008

§ >2,500 own terminalsacross Russia

§ Strong M&A strategy

§ Financials are auditedto comply with IFRS

§ Founded in 2000 by professionalswith more than 20 years of bankexperience, Elecsnet created thelocal market of payment terminals

§ The major legitimate player fullycomplying with the Russianlegislation, enabling to work withthe widest list of corporate clients

§ Balderton (Benchmark) Capital isa shareholder

§ Self-sufficiency: own processing,manufacturing of terminals,software development, marketing

§ A leading providerof instant cashpayments in Russia& CIS

§ IPO on a Europeanstock exchange orsale to strategicinvestor

Case study: Selected Mint II portfolio companies

11

5th Floor, 18b

Lva Tolstogo street,

Moscow, Russia

t +7 (495) 780 0424

f +7 (495) 780 0425www.mintcap.ru