Russky Kuryer (Moscow) – June 7, 2004

The management of the RBC Information Systems company (the parent company of the RBC Group) held a news conference in Moscow at the end of last week, devoted to the company’s plans with regard to the offering of an additional issue of shares and further development of RBC. According to German Kaplun, the chairman of the Board of Directors of the company, “RBC plans to shift to even more intensive and aggressive growth.” “We have no plans to buy a chocolate factory,” a founder and one of the major shareholders of RBC underscored. The interests of the group still cover its core business sectors of mass media and information technologies (IT). The names of companies to be acquired have not yet been disclosed. According to RBC’s top managers, a premature disclosure of the subject of the talks could influence their result.

Obviously, takeovers require money. RBC has chosen an additional issue of its shares as a source of financing, having decided to issue 15m common shares, making up 15 percent of the authorized capital. Seventy percent of the funds to be received are to be spent on acquisitions, and the remaining 30 percent will be allocated for the development of new projects. The news conference in Moscow started a European roadshow, comprising a series of presentations for potential investors in London, Geneva, Zurich, Stockholm, Paris, Amsterdam and Frankfurt.

Last year’s business results of RBC give the company serious reasons to count on the attention of investors. Revenues approached the level of $50m, and the rate of its growth exceeded 50 percent. RBC has advanced from 72nd to 43rd place on the rating list of the 500 fastest growing European companies in the hi-tech sector according to Deloitte Touche Tohmatsu Fast 500 (interestingly, the annual average growth rate for RBC has reached 2,112 percent over the past five years), and is also in 15th place on the list of 45 major Russian companies, prepared as a result of an information transparency survey by Standard & Poor's. The other day the RBC Information Systems Joint-Stock Company was assigned a B++ national corporate governance rating of RID-Expert RA. Investments in companies of this category envisage an optimal risk/reward ratio for investors. According to this rating list, the level of corporate governance at RBC in higher than at such companies as RAO UES of Russia, Aeroflot-Russian Airlines and Wimm-Bill-Dann. “This event will facilitate the further growth in RBC’s attractiveness to investors,” the chairman of the Board of Directors of the company believes.

It should be mentioned that RBC was the first Russian company to conduct an initial public offering (IPO) of shares on Russian exchanges. The success of the IPO was beyond all expectations. The amount of preliminary orders for RBC’s shares was over $64m, and the demand exceeded the supply by fivefold. Over $13m were received as a result of the offering. Owing to these investments, a unique project for Russia, the first Russian business TV channel RBC TV, was started last September. It has become a locomotive of RBC’s further development. According to Yury Rovensky, RBC’s core business has grown by 36 percent due to the successful launching of the TV channel. Actually, it is not surprising: television controls almost a half of the Russian media market, and expenditures on advertising are rising fast in Russia. At the same time in the opinion of experts, the potential for growth in advertising budgets in Russia is still far from being exhausted. Viewers are the business channel’s main advantage. Sociologists of the COMCON-Media company have drawn a social and demographic profile of the audience of RBC TV and analyzed its consumer preferences. The sociological survey showed that the weekly audience of the RBC TV channel in Russia was 1.563m people (including 383,000 people in Moscow). The viewers of RBC TV are successful people with rather high incomes. Almost half of them (45.4 percent) have one or more cars in their household. They like traveling (the proportion of people who regularly travel abroad of this group is twice higher as that in Russia on average). Their expenditures on entertainment, vacationing, eating out, purchasing and maintenance of cars, and housing construction exceed those of an average Russian by 1.5 times. Almost one fourth of them (22.9 percent) are senior or medium-level managers, and over one fourth (27.6 percent) are qualified specialists. One third of RBC TV’s audience work in such sectors as industry, construction and finances.

Men make up 50.6 percent of the TV channel's audience. Close to half of RBC TV’s viewers (39.1 percent) are middle-age people of 31 to 50 years old. The average age of a viewer is 41 years. Commenting on the social and demographic profile of a viewer of RBC TV, the sociologists point out that mostly married people watch the business TV channel (almost two thirds of the viewers of RBC TV (62.7 percent) are married) with a high level of education (more than half of them have a university degree or completed a university course), who spend a lot of time on work and career (almost two thirds of RBC TV’s audience (62.1 percent) work over 30 hours per week).

RBC TV covers 25m people in more than 40 cities. Residents of Ukraine have been watching its programs since March, and broadcasting in Belarus will start in June. The expansion of RBC TV covers not just CIS countries but also the West. The Russian business TV channel has started the implementation of a new joint project with CNBC recently, envisaging production of a special weekly program of RBC TV to be broadcast on CNBC. The program will be devoted to reviewing the state of markets and development trends for companies in different sectors of the Russian economy. Cooperation with the leading foreign TV channels, CNN and CNBC, started at the same time with the launching of the project. RBC TV has been providing reports about Russia for CNN since last October. “When the events around YUKOS reached their peak, CNN mainly used our reports for the coverage of this theme,” German Kaplun pointed out.

Investment analysts expect a new wave of demand for shares in RBC. They remark that hi-tech companies have a great potential for growth, and RBC is one of the most dynamic Russian companies. In fact, it seems that the beginning of a new phase of RBC’s development is not far off.