1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS AUGUST 10, 2016 Alexander - - PowerPoint PPT Presentation

1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

AUGUST 10, 2016

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

Alexander Ivannikov

Head of the Department

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

DISCLAIMERS

This presentation has been prepared by PJSC Gazprom (the “Company”), and comprises the slides for a presentation to investors concerning the Company. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision. Any viewer of this presentation considering a purchase of such securities is hereby reminded that any such purchase should be made solely on the basis of the information contained in the prospectus or other offering document prepared in relation thereto and will be subject to the selling restrictions set out therein. The information in this presentation should not be treated as giving investment advice. Care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and

• reasonable. However, the contents of this presentation have not been verified by the Company. Accordingly, no representation or

warranty, express or implied, is made or given by or on behalf of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in or discussed at this

• presentation. None of the Company or any of their respective members, directors, officers or employees nor any other person accepts

any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company

• perates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and

uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative

• f results or developments in future periods.

The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. No person is under any obligation to update or keep current the information contained herein. By attending the presentation you agree to be bound by the foregoing limitations.

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

1,737 444 362 674 237 1,783

Total net sales

• Adj. EBITDA

Net profit Operating CF Free CF Net debt

1 2 3 4

1 EBITDA adjusted by changes in impairment provisions 2 Profit for the period attributed to owners of PJSC Gazprom 3 Free cash flow is calculated as Net cash provided by operating activities less Capital expenditures 4 Compared to Net debt as of December 31, 2015

SUMMARY OF 1Q2016 IFRS FINANCIAL RESULTS

+5% +5% (5%) (3%) (14%) (24%) (6%) %) 1q15 vs 1q16

RR bn

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

GAZPROM VS PEERS

Top-5 by FCF 1

Source: Companies’ reports, Bloomberg, Factset

1 Free Cash Flow = Net Cash from operating activities – Cash CAPEX 2 Attributed to shareholders 3 Adjusted for prepayments and operations with securities

3,183 1 000 2 000 3 000 4 000 5 000 Gazprom Sinopec PetroChina Rosneft PTT $ mm

Top-5 by net income 2

4,857 1 000 2 000 3 000 4 000 5 000 Gazprom Exxon Total Novatek Sinopec $ mm 3

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

116,3 89,0 84,5 129,0 112,9 50 100 150 200 1q15 2q15 3q15 4q15 1q16 8,8 8,9 9,2 9,1 9,3 5 10 15 1q15 2q15 3q15 4q15 1q16 4,1 3,7 3,5 4,1 4,2 2 4 6 1q15 2q15 3q15 4q15 1q16 42,1 32,5 29,7 40,8 41,4 20 40 60 1q15 2q15 3q15 4q15 1q16 46,4 17,8 8,7 39,0 48,9 20 40 60 80 1q15 2q15 3q15 4q15 1q16

Natural gas production Crude oil production Gas condensate production

• 1. Includes Russian generating companies: Mosenergo, OGK-2, TGK-1, MIPC

Calculations may diverge due to rounding.

bcm mln ton mln ton (3%) %)

Electricity generation 1 Heat generation 1

bn kWh mln Gcal +2% +6% (2%) %) +5% 5%

HYDROCARBON PRODUCTION, ELECTRICITY AND HEAT GENERATION

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

80 40 31 71 75 3,568 3,493 3,709 3,779 3,873 1000 2000 3000 4000 20 40 60 80 100 120 140 1q15 2q15 3q15 4q15 1q16 VOLUMES AVERAGE PRICE IN RUSSIA 39 41 45 59 58 284 251 224 229 188 100 200 300 25 50 75 100 1q15 2q15 3q15 4q15 1q16 VOLUMES AVERAGE PRICE IN EUROPE & OC

GAS SALES

287 139 113 267 292 50 100 150 200 250 300 1q15 2q15 3q15 4q15 1q16 NET SALES TO RUSSIA RR/1 mcm bcm RR bn

Calculations may diverge due to rounding.

1 Net of value added tax (VAT) 2 OC - Other countries: including LNG sales 3 VAT is not charged on sales 4 Net of custom duties and excise tax on gas exports

543 404 484 735 663 200 400 600 800 1q15 2q15 3q15 4q15 1q16 NET SALES TO EUROPE & OC RR bn bcm 13 8 6 13 11 213 192 173 182 157 100 200 300 400 10 20 30 40 1q15 2q15 3q15 4q15 1q16 VOLUMES AVERAGE PRICE IN FSU 156 74 62 138 117 50 100 150 200 250 1q15 2q15 3q15 4q15 1q16 NET SALES TO FSU bcm USD/1 mcm USD/1 mcm

1

Russia Europe & OC2 FSU

3,4 3,4

RR bn +2% +2% +22% +22% (25%)

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

26% 66% 8%

OIL AND ENERGY BUSINESS

Calculations may diverge due to rounding.

1 Net of value added tax (VAT), excise tax and custom duties.

Net Sales1

424 468 467 456 413 100 200 300 400 500 1q15 2q15 3q15 4q15 1q16 133 85 74 133 148 30 60 90 120 150 180 1q15 2q15 3q15 4q15 1q16 RR bln RR bln +11 +11% 1Q2015 1Q2016 (3 (3%)

Electric and heat energy Crude Oil and Gas Condensate; Refined Products

24% 68% 8%

CRUDE OIL AND GAS CONDENSATE; REFINED PRODUCTS GAS BUSINESS AND OTHER REVENUES ELECTRIC AND HEAT ENERGY

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

1,397 1,262 1,641 444 437

400 800 1200 1600 2000

2013 2014 2015 1q15 1q16

Cash CapEx

RR bn

1 CapEx breakdown as provided in Management Report

CAPITAL EXPENDITURES

• 10

10% +30 30%

• 2%

44% 10% 27% 9% 4% 6% TRANSPORT PRODUCTION OF NATURAL GAS PRODUCTION OF CRUDE OIL AND GAS CONDENSATE REFINING ELECTRIC AND HEAT ENERGY OTHER CAPEX

Group’s CapEx breakdown1

43.9 33.2 27.1 7.1 5.9

10 20 30 40 50

2013 2014 2015 1q15 1q16

USD bn

• 24

24%

• 19%
• 18%

8%

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

SUSTAINABLE FREE CASH FLOW GENERATION

Free Cash Flow1 Gazprom self funding2

1 Free Cash Flow = Net Cash from operating activities – Cash CAPEX 2 Net Cash from operating activities /Cash CAPEX

(6%) 252

• 52

29 160 237

• 100
• 50

50 100 150 200 250 300 350 1q15 2q15 3q15 4q15 1q16

157% 85% 108% 134% 154%

0% 50% 100% 150% 200% 1q15 2q15 3q15 4q15 1q16 RR bn

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

22% 18% 17% 19% 20% 19% 13% 15% 14% 14% 33% 36% 36% 42% 45% 26% 33% 32% 25% 22% 2012 2013 2014 2015 1q16 LESS THAN 1 YEAR 1-2 YEARS 2-5 YEARS MORE THAN 5 YEARS

KEY DEBT METRICS

Debt maturity profile2 Cost of debt financing

SOURCE CE: BLOOMBERG, COMPA PANY DATA

Total and Net Debt Gazprom credit ratings

Moody's

A- A3 BBB+ Baa1 BBB Baa2 BBB- Baa3 BB+ Ba1 BB Ba2 BB- Ba3 B+ B1

Dagong, S&P, Fitch

A A2 A+ A1 AA Aa AAA Aaa

Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

S&P MOODY'S FITCH DAGONG INVESTMENT GRADE

6.36% 4.01% 5.65% 2 4 6 8 10 2008 2009 2010 2011 2012 2013 2014 2015 1q16 WEIGHTED AVERAGE FIXED INTEREST RATE WEIGHTED AVERAGE FLOATING INTEREST RATE WEIGHTED AVERAGE INTEREST RATE % 1,075 1,113 1,651 2,083 1,783 426 689 1,038 1,359 1,565 0,7 0,5 0,6 0,9 1,0 0,0 0,3 0,6 0,9 1,2 1000 2000 3000 4000 5000 2012 2013 2014 2015 1q16 NET DEBT CASH&CASH EQUIVALENTS NET DEBT/ADJ.EBITDA LTM RUB bn x

1

1 Calculated using dollar values of Net debt and EBITDA 2 Excluding promissory notes

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

Amount Coupon Maturity Transaction date Achievements €350mm EURIBOR + 2.75% 1.5 years January 2015

• The first bilateral loan agreement in the business

relationship between Gazprom and Intesa Sanpaolo Group

• Is of great importance for the development of partnership

with credit institutions of Italy and the entire Europe

$500mm LIBOR + 3.25% 3 years April 2015

• Syndicated loan with JP Morgan as bank agent
• Asian banks participated

€150mm EURIBOR + 3.6% 4 years June 2015

• Loan from Intesa Sanpaolo S.p.A. bank

€300mm EURIBOR +3.6% 4 years July 2015

• Loan from UniCredit Bank Austria AG

$1,500mm LIBOR +3.5% 5 years August 2015

• Syndicated loan with China Construction Bank Corporation

as bank agent

€1,000mm 4.625% 3 years October 2015

• Public international debt offering under EMTN programme,

lead managers - Banca IMI S.p.A., J.P. Morgan, UniCredit Bank, placement without new issue premium

€2,000mm EURIBOR +3.5% 5 years March 2016

• Facility agreement with Bank of China
• The largest deal in terms of the amount of financing

attracted directly from one financial institution and the first bilateral loan facility agreement with a Chinese bank

CHF500mm 3.375% 2.5 years March 2016

• Public international debt offering under EMTN programme,

lead managers - Deutsche Bank AG Zurich branch, Gazprombank (Switzerland) Ltd and UBS AG

SUCCESSFUL PERFORMANCE IN DEBT CAPITAL MARKETS

Recent transactions by PJSC Gazprom

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

ADDITIONAL INFORMATION

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

14 RUSSIAN NATURAL GAS BALANCE

Bcm 1Q2015 1Q2016

Natur ural gas resou

• urces

es 19 195.7 203.0 .0 Domestic gas production 169.7 169.6 Other sources including Central Asian and Azerbaijani gas 5.8 5.7 Gas withdrawn from underground storage in Russia, Latvia and Europe 19.2 26.7 Decrease in the amount of gas within the gas transportation system 1.0 1.0 Natur ural gas distr istrib ibution ution 19 195.7 203.0 .0 Domestic consumption 143.1 143.0 including needs of the gas transportation system and underground storages 8.5 8.9 Gas pumped into underground storages 0.1 0.01 Gas for LNG production 4.0 3.5 Foreign supplies 35.5 45.0 FSU supplies 11.9 10.3 Increase in the amount of gas within the gas transportation system 1.1 1.1

Source: Company Operating Data

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1Q2016 IFRS CONSOLIDATED FINANCIAL RESULTS

THANK YOU FOR ATTENTION!