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Company presentation at Budapest Stock Exchange 09 May, 2012 Gábor Vilhelm Head of Treasury and Investor Relations.

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Presentation on theme: "Company presentation at Budapest Stock Exchange 09 May, 2012 Gábor Vilhelm Head of Treasury and Investor Relations."— Presentation transcript:

1 Company presentation at Budapest Stock Exchange 09 May, 2012 Gábor Vilhelm Head of Treasury and Investor Relations

2 Agenda 1 Introduction of the Company Achievements of : Year of consolidation and operational excellence

3 2 Segments Customers Industrial clients (including blue chips) Municipalities Residential clients Hot water Steam Electricity ESCO Energy outsourcing Public lighting Efficient, district heating services Public lighting Energy trading Main Products Establishment Aggressive growth IPO International expansion + SPO Further international growth (Romania) Milestones Dual listing at Warsaw, SPO (EUR 8M) Closing bond program. I (EUR ~33 M), EETEK Acquisition (EUR 21M) Client proposition Fast growing E-Star provides complex alternative energy solutions for a wide customer base Business model 2012 Operational excellence and year of consolidation

4 3 Sustainable business model targeting mid-market Business model MW heat capacity 5-35 million annual investment per project Mid-sized projects (niche segment) Utilization of renewable sources years Long-term contracts Combined Technology Mix Price mechanism based on change in fuel price Changes in fuel cost naturally hedged Local heat market Co-gen Biomass boiler Gas boiler Annual heat curve

5 E-Stars technology free knowledge-based alternative energy business creates a keystone role for the company 4 Gas engines Biomass Geothermal Biogas Biomass boilers Gas boilers Natural gas TurbinesGeothermal / inert gas Industrial Residential Coal Municipality

6 Diversified international project portfolio including wide range of clientele in all sectors Zalau Targu Mures Gheorgheni ESCO Public lighting District heating Rába-Audi Project Energy and utility services Blue-chip industrial consumers (Rába, Audi, Dana) Capacity: 8.4 MW th and 8.5 MWel EC Mielec Heat and electricity Capacity: MW th and 24.4 Mw el Euro-Energetyka Energy distribution and trading Mielec Gorlice EC Gorlice Heat and electricity Capacity: 87.2 MW th and 7.0 Mw el Győr 5

7 Reliable International Blue Chip Industrial Clientele Distribution of revenues based on 2011 ResidentialIndustrialMunicipalTotal Hungary3%23%11%37% Poland0%39%39%8%8%47%47% Romania11%11%0%5%5%16% Total14%14%62%24%24%100% 6 Diversified revenue sources with blue chip industrial clientele ensure outstanding risk management

8 7 E-Star has attracted international investment interest, as it has been becoming an industry leader International World Finance TOP 100 (2010) Only member from CEE region Others include: –CitiGroup –Apple –Amazon –Coca Cola Listed on Warsaw Stock Exchange (March 2011) Hungary Team of Stock Exchange (2009) Largest stock price increase (2010) BUX index membership (2010) Pegasus price in market leader category (2010)

9 EBITDA has trippled and revenue has grown by six fold from 2008 to Revenue (mln EUR)Gross margin (mln EUR) EBITDA (mln EUR)Equity and financial liabilities (mln EUR) 79 % CAGR 39 % CAGR 113% CAGR Equity* Financial liabilities *After the consolidation of EETEK, including 10% equity increase through an SPO. (Each of the shares were sold for HUF10.000) 8

10 Agenda 9 Introduction of the Company Achievements of : Year of consolidation and operational excellence

11 E-Star closed a successful 2011 in line with an aggressive growth strategy Consolidation Operational excellence Entering 4th country Bring projects to perfection Further growth Entering 5th country Entering Poland New Gas Cogeneration – 8.4 MWe Organizational improvement – 500 FTEs Re-branding: from RFV to E-Star Alternative Plc. Restructuring to reach cost efficiency (still under process) Technical listing at WSE Entering Poland by EETEK acquisition (EUR 21 M + EUR 4.5 M) SPO – EUR 8 M (10%) Closing E-Star HUF nominated Bond Program – EUR 33.3 M Successful bank financing (BZ WBK) – EUR 4 M + non-refundable state subsidy 2011 greatest achievements

12 Agenda 11 Introduction of the Company Achievements of : Year of consolidation and operational excellence

13 12 Aggressive consolidation measures Operations management Corporate development Business development Financial and operational controlling Entering Poland Operational excellence Entering country #4 Regional champion & Entering country #5 Extended board to support business development Polish company set -up Re-branding SPO & BOND Entry: Poland district heating Growth return in Hungarian ESCO Supervising all operating project Operational excellence through increased efficiency and cost control Optimization of organization and internal processes Setting up venture capital fund subsidiary Expansion at current project sites Significant cost cutting Review of strategy Operating Management System Controlling cash costs Set up of gas trading unit Country 4# company set-up Building new innovation capacities Entry: country #4 Entry into new segments within existing countries Building new industrial client portfolio Developed functional spikes Operational excellence through increased efficiency and cost control Improved project implementation and know-how transfer Market consolidation in core segments New R&D projects, cutting edge solutions Enhancing capital discipline Business service center development Country 5# company set-up Regional procurement & supply chain management Shared Value Creation (SVC) Entry: country #5 Regional consolidation Technology flagship in alternative energy within CEE

14 E-Star is reviewing its investment programs and considering divesting opportunities according to operational excellence 13 Activity-based on concession rights Exclusive DH supplying to municipalities DH and electricity for industrial consumers Energy production and trading Coal based CHP Cogen and brand new Gas Cogen bought for PLN 26,7 M (PLN 13 M non returnable subsidy) 35 Municipal costumers More than 180 project sites Operation with a 11-year history ESCO, Public Lightning, DH, and RESZ Activity based on years concession rights Delays in CAPEX program which lasts until % expected ROE due to country risk factor Cheap biomass Impressive value creation DH and electricity Clientele: municipal, residential, industrial Hungary Poland Romania

15 Consolidation measures in Number of employees have been reduced by 38 % Employee running rate costs reduced by EUR 800 k annually E-Star froze wages and salaries in 2012 No bonuses were paid for 2011 financial year Reduction of employee costs at HQ IT services have been outsourced E-Star contracted gas supply agreement on cheaper price E-Star is being optimised its operation in PL Other Reduction of external advisory and legal fees Savings reach EUR 2.5 M annually

16 PLN 13 M non returnable subsidy for gas cogen engines set up at Mielec project More subsidy funds are expected to be secured for de-dusting programme E-Stars financing which is considered to be a key role of success relies on four strong pillars EQUITY INCREASE Zero-dividend policy SPO in form of private placement of ~EUR 8 M completed on June 9, 2011 Domestic and int. BOND program Provides financing for development of new projects E-Star aims to fund a constant proportion of our balance sheet from the bond market : ~ EUR 33.3 M issued in Hungary, pioneer role on market, 90% to institutional investors, 10% to retail clients 2012: EUR 9 M planned to be issued in Poland Group-level BANK refinancing Loan structure adjusted to the maturity and cash flow generation potential of our current projects Diversified banking relations Regional, group-level cash pooling and cash flow management Financing structure: Support business development Maintain strong Balance Sheet 30% Equity – 70% Debt 15 Subsidies and EU funds

17 Refinancing and financing programs advance well 16 Syndicated refinancing of RESZ project lead by E-Stars house bank in the amount of EUR 6,5 M bank facility VAT financing in addition Raising OVD limits Closing expected by 2012 H1 Refinancing Acquired Hungarian Project EUR 9 M Bond financing As an alternative to the bond programme: bank financing provided by E-Stars Polish house bank institution in the same amount (EUR 9 M) Closing expected by 2012 H1 Refinancing Acquired Polish Projects

18 Contact E-Star Alternatív Nyrt Budapest Hungary, Székács utca 29. mobile: , phone: fax: url: 17

19 Thank you for your attention!

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