WithconfidencetotheFuture:SKTransformationexperience

NikolayButvinaFundTransformationTeam

PMOLeader

JSC«Samruk-Kazyna»

October27,2016

1

• Who is Mr. Butvina?• SK role in Kazakhstan economy • SK Group Transformation approach• SK holding company Transformation• Transformer (of) fortune

Agenda

2

Nikolay Butvina: Strategy and Transformation Leader

Expertise

Experience

Education

МА Applied mathematics and physicsMoscow Institute of Physics and Technology

1998 - 2004

Unicredit MBA: Retail in Banking and Financial IndustryBologna Business School, Italy

2008 - 2009

Project Management ProfessionalProject Management Institute

2011

Senior consultantGBS, Financial Services

2004 - 2010

Senior Project ManagerManagement Board administration

2010 - 2011

ManagerAdvisory, Financial Services

2011 - 2012

Senior managerAdvisory, Financial Services

2012 - 2013

Retail Banking Strategy LeaderRetail Banking / Strategy & Innovation

2013 - 2014

Business + IT strategy Operating Model Project management

Financial Services Industry consultantBusiness Development

2015

MBA internshipRetail Planning and Controlling

2009

PMO and Change Management LeaderFund Transformation Team

2015 - present

3

PM flashback

TransformationPMO@VTB24

2007

PgM@Nordea2010-2011

TransformationPMO@BNPP

2012

EnterprisePMO@Alfa

2013

RetailPfM@PSB

2014

TransformationPMO@SK

2015+

4

Long road to Kazakhstan

UniCredit MBA internship

2009

TransformationEPMO LeaderEurasian Bank

@PwC2011

TransformationPMO Leader

Samruk-Kazyna2015

5

Head of Fund Transformation projectsLarissa Zyamzina

Expertise: Finance, Shared Services,Compliance, Controllership, HR, CMG,Management reporting

Head of PMO groupNikolai Butvina

Expertise: KPIs, SLAs, IT,Shared Services, Management reporting

Head of integration, modeling and technology group

Yuriy AnochshenkoExpertise: Assets Optimization, Strategy, Process Management

PMO ManagerAndrei Kolesnichenko

Expertise: IR, Procurement, Corporate Governance, Comms

PMO ManagerBeksultan Bekmuratov

Expertise: Oil&Gas, HSE, Project Management, Logistics, Trading

PMO ManagerBaurzhan Kuntassov

Expertise: IT, PM, Finance, Operations, Business Processes Optimization

Change Manager (HR/FTT)Olga Ivutina

Expertise: Privatization, IPO, HR, Corporate Governance, Operations, Finance

Process ManagerOlga Glushkovskaya

Expertise: Sustainable Development, Corporate Governance, Org. Design

JoinedaGreatTeam

Project ManagerDiana Aldanova

Expertise: Audit, Compliance

Project ManagerKanagat Baketay

Expertise: IT, PM, Oil&Gas, Business Analysis

IT Manager (FTT/IT)Marat Sagalov

Expertise: IT, Project Management, IT architecture, Shared Services

Head of CMG (HR/FTT)Pavel Poteev

Expertise: CMG, HR, IT, Strategy, Org. Development

PMO ManagerAssel Abulkhairova

Expertise: GR, Finance, IT, PM, Telecommunications

6

• Who is Mr. Butvina?• SK role in Kazakhstan economy • SK Group Transformation approach• SK holding company Transformation• Transformer (of) fortune

Agenda

7

This is Kazakhstan

8

Kazakhstan is technocratic and ambitious

Top 30 economy

$9B infra investment

Chairman of Russia’s Sberbank German Grefsaid he experienced something of a “culture shock” after reading it and that Russia should take on board Kazakhstan’s Plan of the Nation and create a mutual plan with Astana called “100 steps together.”

“I can quite professionally assess this document. For many years, I was engaged in this topic. I can say that this document is one of the best I have ever seen. If at least 50 out of 100 steps are completed, and I hope that most of them are implemented, it is obvious that Kazakhstan will turn into a fundamentally different country”

5 initiatives, 100 steps

9

Expo 2017 and AIFC

10

Role of SK in the economy of the Kazakhstan

…Through managing the most important strategic assets valued 15,3 tn. tenge

Today Fund plays important role in the economy of the Kazakhstan…

The largest employer: (357 000 people)

A significant share of GDP: (2?5 tn. tenge)

Strategic investor: (1,7 tn. tenge)

Fund’s key missions

• Increasing the long-term value of the companies

• Participation in diversification and modernization of the national economy

• Social responsibility

4% employed in KZ

7% GDP

23% Investments of KZ

11

Transformation was launched by the President in October 2014

Strategy 2012-22 Benchmarking Transformation program and roadmap

12

2. Portfolio restructuring 3. Governance

SK Transformation program

The transformation is carried out in three main areas

Align portfolio companies’ strategies with the strategic KPIs

Implement business process re-engineering

Redefine the strategic KPIs for the fund portfolio companies

1. Value improvement

Bring public investors into core assets and remove non-core business assets and social

assets from the portfolio

Simplify the legal structures of the portfolio companies

Establish new active investment approach

Strengthen commercial block to ensure assets and investments are managed

according to world standards

Increase effectiveness of government relations

New governance model

2A

2B

2C

3A

3B

3C

1B

1A

1C

HR Transformation (People) Build change management capabilities

A B

13

• Who is Mr. Butvina?• SK role in Kazakhstan economy • SK Group Transformation approach• SK holding company Transformation• Transformer (of) fortune

Agenda

14

Structured approach to deliver the program

Transformation methodology

Scope of work

Road maps

Resources(human & material)

Transformation teams430 people

Modernization boardManagement board Board of directors

Timeline

Transformation guidelines

Quality assurance:

15

Best practice mining and rollout

Hire consultants

Hire strong people

Make friends with strong

peersShare and learn within the Group

Benchmarking and lessons

learned

Best practices

team @CTT

15 Reference

models

Corporate automation templates

CTT -> SK Business Services

Common corporate

processes, Shared services

Common IT systems,

XaaS

Mining Packaging Rollout

16

ConsultantsCompany

1

2

3

4

5

6

7

Re-engineering started in October 2014, good progress to date

Stages of Transformation program

Mobilization Design Planning Implementation

17

Transformation governance model

SK Board of Directors

SK Management

Board

SK Modernization

Board

Transformation Steering

Committee

SKProject Teams

Fund Transformation

Team(PMO, INT, CMG, PMP)

Central Transformation

Team

Program Leadership

Meeting

PCs Board of Directors

PC Transformation

Team(PMO, INT, CMG, PMP)

Fund Companies

18

• Who is Mr. Butvina?• Introduction to SK role in Kazakhstan economy • SK Group Transformation approach• SK holding company Transformation• Transformer (of) fortune

Agenda

19

We are building the new Fund

Commercial

Compact

World class

Investment Fund

Key organizational capabilities

Direct• Strategy

• KPIs

• Initiatives

Execute• Board of Directors

• Reporting and reviews

• Projects delivery

Think• Trends and Benchmarking

• Advanced analytics

• Financial modelling (DCF)

20

More than 2000 processes revised

Best Global practice

People (Transformation team)

>15 consultants

>10 Regional and global experts

>20 employees

115 1 level processes

320 2 level processes

>2000 3 level processes

Marcus Massi, DubaiKhisham Khalim, Kuala-LumpurIndranil Gosch, London

Process map – functional model of the future Fund

We designed the Target Model

21

Monitoring block

Commercial block

Corporate block

Planned the Transformation projectsIm

plem

enta

tion

of P

roje

ct M

anag

emen

t app

roac

h in

to th

e Fu

nd's

ope

ratio

ns

Tran

sitio

n to

targ

et p

roce

sses

and

impl

emen

tatio

n of

con

tinue

s im

prov

emen

t ap

proa

ch

Strengthening of the Asset Management function

Creation of Strategy and Portfolio Management and Research and Knowledge Management function

Creation of the Industry Builder function

Improvement of Talent Management and Talent Development within the

corporate group

Development of corporate culture to be based on mission

and values

Transformation of Human Capital Management function

Strengthening of the Corporate Finance function

Strengthening of the financial and management reporting

and controlling function

Implementation of Portfolio-level Approach into the

process of investment risks analysis

Creation of the Compliance function

Implementation of effective Internal control System and

systematization of Policies & Procedures

Improvement of the Fund's Reputation Management

Transition to the new Government Relations model

Implementation of the Sustainable Development

principles within the Fund and its PCs

Increasing effectiveness of PCs Board of DirectorsIm

plem

enta

tion

of E

nglis

h as

the

lang

uage

of b

usin

ess

com

mun

icat

ions

PCs’ governance models, decision making and delegation

system

Introduction of KPI-based business performance mgmt.

system and DCF model

Legal support function transformation: Pro-active

approach Tran

sitio

n to

the

new

org

aniz

atio

nal s

truct

ure

Strengthening of the Internal Audit function

Creation of effective work space environment

22

Upgraded the Team

2013 2016

Experience in Internationalcompanies 12,3 % 29,6 %

Education in foreign universities 40,0 % 63,3 %

МВА and PhD 33,7 % 59,3 %

International certificates 12,4 % 36,5 %

Foreign language skills 55,8 % 83,2 %

What has been done Was Now

1. Grading 2. Increased requirements 3. Job matching

4. Annual performance assessment

Staff updated - 40%

Reduced the number of:Managing directors - 50%

headcount - 15%

100% of employees evaluated through internal competition

Posted 79 vacancies, 8000 CVs received

23

Monitor the progress on the Transformation Steering Committee

1. 70% Target processes implemented by end of 2016

2. All processes implemented by May 31 2017

24

Share transformation spirit and best practices with the Government

Russian Government approved principles and governance model of Project management in Russian authorities bodies.

EVA via GDP growth

Meeting of the President of KZ with Herman Gref on Agile

Answered letter, positioned SK as a leader in Agile usage

In November SK will run a seminar on Agile for Ministry of National Economy

EVA via GDP growth, Nation building, Reputation

Khazanah contributed to Government Transformation

program launch in 2010

Nation building

7 Ministers are responsible for 7 Key Results Areas

Khazanakh provides support to Government Transformation Program (GTP) and Economic

Transformation Program among others

25

• Who is Mr. Butvina?• Introduction to SK role in Kazakhstan economy • SK Group Transformation approach• SK holding company Transformation• Transformer (of) fortune

Agenda

26

Transformation = Accelerated Career Growth

Deliver resultsin agreed time

Ownership & Leadership

Comms & marketing

Executive Relationships

Can do attitude

Get out of comfort zone

Planning & controlling

Teamwork across silos

Negotiations & mediation

Discipline / Agility balance

Consultant

Change-the-banker

Transformer

CEO-1, Strategy & Transformation

CEO / Advisory partner

27

PROUDject management

Proud of the Country

Proud of the company

Proud of the leader

Proud of the colleagues

Proud of yourself

28

Questions and Answers