Adam Smith 4th Annual Ukrainian Investment Summit

London, UKMarch 11, 2008

HC INVESTMENTS

• Horizon Capital is the leading private equity fund manager in Ukraine, Moldova and Belarus, managing three funds:

• EEGF II – $300 million target• EEGF I – $132 million • WNISEF – $150 million

• Over 13 years of investment experience in the region

• Entrepreneurial team of professionals with long common track record

• Superior network of relationships creates pipeline and due diligence value

In 2008, Horizon Capital launched Emerging Europe Growth Fund II (EEGF II) with a target of $300 million.

EEGF II will focus on mid-cap companies in fast growing sectors of Ukraine and the region. Investment size is expected to range from $15-30 million per deal.

HORIZON CAPITAL GEOGRAPHIC FOCUS

UKRAINE FDI

-

10

20

30

40

50

60

70

80

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mln

. $

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mln

. $

Leading private equity firm in the Region

BELARUS RUSSIA

UKRAINE

MOLDOVA

’03-’08 CAGR=32%

’03-’08 CAGR=18%

’03-’08 CAGR=22%

’03-’08 CAGR=24%

’03-’08 CAGR=12%

(base year = 2003)Source: Euromonitor Statistics/ Country Fact sheet

2003 2004 2005 2006e 2007f 2008f

7,000

6,000

5,000

4,000

3,000

2,000

0

1,000

Ukraine

Moldova

Belarus

Russia

Poland

Per Capita Disposable Income, $

Year 2006Year 2000

Source: IMF, Balance of Payments database (except for Russia) World Investment Report, UNCTAD (for Russia only) EBRD country statistics

Belarus Moldova Ukraine Russia Poland

2,000

1,500

1,000

0

500

Per Capita Cumulative Direct Investment, $

112253

88

306

50

435

94

601722

2,088

15% CAGR 23% CAGR43% CAGR

36% CAGR

19% CAGR

GDP Growth Comparison 2000-2006

GDP (PPP)CAGR ’00-’06

Ukraine Moldova Belarus Russia Poland

15%

5%

10%

0%

10% 9%

6%

Source: International Monetary Fund, World Economic Outlook Database, October 2007

9% 11%

Consumer Bank Loans, $ per capita

Ukraine=97%

Russia=121%

Poland=79%

China*=28%

India=33%

CAGR 02-06:

* Note: CAGR for China is 2002-2005

2002 2003 2004 2005 2006

500

400

300

200

100

0

Source: National Bank of Ukraine, Central Bank of Russia, National Bank of Poland, The People’s Bank of China, Reserve Bank of India

September 2007

4.060%60013Forum BankCommerzbank

June 20073.995%22005UkrsotsbankUnicredito

February 20075.4100%685 19TAS BankSwedbank

June 20066.146%31.5141IMB GroupPrivate Placement

June 20075.538%10093IMB GroupPrivate Placement

October 20054.294%10282Aval BankRaiffeisen Bank

December 2005

3.851%3493UkrsibbankBNP Paribas

March 20067.198%257 21IndexbankCredit Agricole

April 20065.619%47 28Rodovid BankPrivate Placement

DatePrice/BV Multiple

StakeValue,

$ MRank by Assets

TargetBuyer

September 2007

4.060%60013Forum BankCommerzbank

June 20073.995%22005UkrsotsbankUnicredito

February 20075.4100%685 19TAS BankSwedbank

June 20066.146%31.5141IMB GroupPrivate Placement

June 20075.538%10093IMB GroupPrivate Placement

October 20054.294%10282Aval BankRaiffeisen Bank

December 2005

3.851%3493UkrsibbankBNP Paribas

March 20067.198%257 21IndexbankCredit Agricole

April 20065.619%47 28Rodovid BankPrivate Placement

DatePrice/BV Multiple

StakeValue,

$ MRank by Assets

TargetBuyer

M&A Banking

Buyer Target

2006Sales,

$M

Deal Value,

$ M StakePrice/Sales Date

Private Placement

Pepsi Co (USA)

Private Placement

Vinnifruit (Beverages)

Sandora (Juices)

Motor Sich (Engine manufacturer)

26

227

245

15

542

18.7

25%

80%

6%

2.4

3.0

1.3

June 2007

June 2007

June 2007

Private Placement

Dakor (Sugar processor) 63 21 20% 1.7 May 2007

Bel (France) Shostka (Cheese producer) 44 n/a 71% n/a May 2007

Auchan Group (France)

Furshet (Retail trade) 481 127 20% 1.3 March 2007

M&A Other Sectors

M&A Activity in CEE 2006

• Extremely active market: +2,500 transactions; 12% of European

market, $163 billion

• M&A activity doubled over 2005; tripled 2004 value

• Top 3 countries by value: Russia, Czech Republic, Poland

• Top 3 growth countries by volume: Ukraine, Russia, Slovakia

• Top 3 growth countries by value: Croatia, Hungary, Russia

• Top 3 investors in region: UK, Germany, US

• Proportion of deals ↓ $100 mn: 82%

• Average deal size of deals ↓ $100 mn: $20 mn.

Source: PricewaterhouseCoopers CEE M&A Survey 2006

M&A Activity in CEE in 2006

• Top target industries: manufacturing, financial services, food &

beverages, utilities

• Total value of privatizations down – much of CEE is more mature

• Investment flows moving east: 75% of financial services

transactions (397) closed were in Russia, Ukraine, Serbia, Bulgaria

Source: PricewaterhouseCoopers M&A Survey 2006

M&A Activity in CEE in 2006

• Since 1990 €9 bn. raised specifically for CEE (excluding Ukraine,

Russia)

• Annual investment levels exceeding €550 mn.

• Private equity investments across CEE totaled €508 mn. in 2005

• More than 85% of activity concentrated in Hungary, Czech Republic,

Poland, Romania

• On average private equity investment is equivalent to 7% of GDP (in

contrast to Europe on the whole ~40%)

Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005

EVCA Symposium, June 2006

Private Equity in CEE

• Buyout largest category and increasing in 2005

• Together buyouts and replacement capital 72% of value, similar to

Europe as a whole

• Expansion capital deals over 2% (higher than in Europe)

• Starting and seed deals under 2% (lower than in Europe)

• Leverage becoming ever more available

Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005

EVCA Symposium, June 2006

Private Equity in CEE

• Exit activity (measured by cost of investment) ↑ 244% over 2004

• Public market exits ↑ 70% over 2004

• Secondary sales to other private equity houses not yet significant

• Poland largest exit market, 25% of total activity Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005

EVCA Symposium, June 2006

Private Equity in CEE

• Buyout followed by infusion of growth capital

• Low entry multiple (2.5x EBITDA)

• Executed plan to grow aggressively while improving brand and

distribution

• Exit at 5.9x cash on cash and over 470% IRR

Shostka – Leading Producer of Hard Cheeses

• Identified growth area – started mortgage bank

• Created expansion opportunity – management spin-out of leading

consumer intermediary

• Attracted high quality, experienced management and Non-Executive

Board Chairman

• Private placement in July 2006 attracted $31.5 mn. for a 46% equity

stake – 6x NAV pre-money

• Completed $100 mn. equity increase in June 2007 for a 38% equity

stake – 6x NAV pre-money

IMB Group – Pure Play Consumer Lending Platform

• Identified under penetrated growth area – non-food consumer

spending

• Improved transparency enabling access to credit

• Provided capital for new manufacturing site and recycling center –

cost savings created

• Growing 50% year on year

• Product line extensions next step

Ergopack – Market Leader Manufacturer of Household Disposables

• ↑ Fundraising for the region

• ↑ Competition

• ↑ Average enterprise value

• ↑ Buyouts/controlling stakes

• ↑ Use of leverage

• ↑ IPO’s

• ↑ Secondary purchases

• ↓ Holding periods

What Does the Future Hold?

Natalie A. Jaresko, Managing Partner

4 Muzeyny Provulok, 3rd Floor

01001 Kyiv, Ukraine

Tel.: +38 044 490-5580

Fax: +38 044 490-5589

njaresko@horizoncapital.com.ua

www.horizoncapital.com.ua

Contact Information