2015 FINANCIAL RESULTS March 15, 2016 Moscow Disclaimer The - - PowerPoint PPT Presentation

March 15, 2016 Moscow

2015 FINANCIAL RESULTS

Disclaimer

The information contained herein has been prepared using information available to OJSC MMC Norilsk Nickel (“Norilsk Nickel” or “NN”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Norilsk Nickel and the content of this presentation, since its preparation. In addition all relevant information about Norilsk Nickel may not be included in this presentation. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information. The presentation and this document and its contents presentation do not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities, and nothing contained in the presentation or herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained in the presentation or this document or on its completeness, accuracy or fairness. The information in the presentation and this document is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in the presentation or this document. None of the Company nor any of its shareholders, directors, officers or employees nor any other person accepts any liability (in negligence or otherwise) whatsoever for any loss howsoever arising from any use of the presentation or this document or its contents or otherwise arising in connection therewith. In giving the presentation, neither the Company nor its respective advisers and/or agents undertake any obligation to provide the recipient with access to any additional information or to update the presentation or this document or any additional information or to correct any inaccuracies in any such information which may become apparent. The presentation and this document and its contents are confidential and are being provided to you solely for your information and may not be retransmitted, further distributed to any other person or published, in whole or in part, by any medium or in any form for any purpose. This document is only being distributed to and is only directed (i) at persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) to high net worth entities, and other persons to whom it may lawfully be communicated, failing within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication may relate is only available to, and any invitation, offer, or agreement to engage in such investment activity will be engaged in

• nly with, relevant persons. Any person who is not a relevant person should not act or rely on the presentation, this document or any of its contents. The information in the presentation and this document is given in

confidence and the recipients of this presentation should not engage in any behaviour in relation to qualifying investments or related investments (as defined in the Financial Services and Markets Act 2000 (FSMA) and the Code of Market Conduct made pursuant to FSMA) which would or might amount to market abuse for the purposes of FSMA. This presentation is not for publication, release or distribution in, nor does it constitute an offer of securities in the United States, Canada, Japan or Australia. Neither the presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions (collectively, the “United States”) or distributed, directly or indirectly, in the United States or to any U.S. person as defined in Regulation S under the US Securities Act 1933 (the “Securities Act”), except that it may be transmitted to qualified institutional buyers, as defined in Rule 144A under the Securities Act, that are also qualified purchasers, as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940. To be eligible to read this document you either must be (i) a “Qualified Institutional Buyer” within the meaning of Rule 144A under the Securities Act that is also a qualified purchaser, as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940 or (ii) not a “U.S. Person” within the meaning of Regulation S under the Securities Act. The distribution of this document in other jurisdictions may also be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This presentation or information contained herein is not an offer, or an invitation to make offers, to sell, exchange or otherwise transfer securities in the Russian Federation to or for the benefit of any Russian person or entity and does not constitute an advertisement or offering of securities in the Russian Federation within the meaning of Russian securities laws. Information contained herein is intended only for persons who are “qualified investors” within the meaning of Article 51.2 of the Federal Law no. 39-FZ “On the Securities Market” dated 22 April 1996, as amended (the “Russian QIs”) and must not be distributed or circulated into Russia or made available in Russia to any persons who are not Russian QIs, unless and to the extent they are otherwise permitted to access such information under Russian law. The securities have not been and will not be registered in Russia and are not intended for “placement” or “circulation” in Russia (each as defined in Russian securities laws) unless and to the extent otherwise permitted under Russian law. By attending the presentation or by reading this document you agree to be bound by the foregoing. Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and Norilsk Nickel cautions that actual results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Report for a description of major risk factors. There may be other factors, both known and unknown to Norilsk Nickel, which may have an impact on its performance. This presentation should not be relied upon as a recommendation or forecast by Norilsk Nickel, which does not undertake an obligation to release any revision to these statements. Certain market share information and other statements in this presentation regarding the industry in which Norilsk Nickel operates and the position of Norilsk Nickel relative to its competitors are based upon information made publicly available by other metals and mining companies or obtained from trade and business organizations and associations. Such information and statements have not been verified by any independent sources, and measures of the financial or operating performance of Norilsk Nickel’s competitors used in evaluating comparative positions may have been calculated in a different manner to the corresponding measures employed by Norilsk Nickel. This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Norilsk Nickel, nor shall it

• r 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.

1

Improving Health & Safety – on Top of Management Priorities

Focus on HSE – Striving for World-class Standards

94 56 73 12 8 13 106 64 86 2013 2014 2015 Lost Time Injury Fatal

Accidents Statistics Lost Time Injury Frequency Rate (LTIFR) (1)

0.8 0.5 0.6 2013 2014 2015

lost time injuries per 1,000,000 hours



In 2015, Lost Time Injury Frequency Rate (LTIFR) increased marginally from 0.5 to 0.6 due to increase in the number of accidents at the contractor companies as well as a use of a stricter methodology for reporting injuries;



Suffered 13 fatal accidents in 2015:



All accidents are being thoroughly investigated;



All accidents reported to the Board and have been reviewed;



Prompt response by the management to improve safety records was developed; LTIFR remains in line with the global mining industry average; We are committed to creating a strong safety culture at all levels of the organization; Life protection remains the critical priority – target zero fatalities;

2

Source: Company data, Note: 1. LTIFR is calculated as the number of lost-time injuries per million hours worked

Health & Safety Initiatives in 2015 and Plans for 2016 New “car

Target Reconfiguration

2015: New “cardinal safety rules”, zero tolerance to unsafe acts 2015: Focus on safety training 2016: Safety initiatives



Labour contracts and being amended to include «cardinal safety rules»;



134 employees fired for violating of safety rules;



35 operating managers were dismissed for the violation of safety requirements;



1 075 employees were tested on risk propensity at work;



New policy, giving rights to employees to refuse assignments if their life and health are threatened;



Developed a new corporate standard "Working with contractors“;



Continued training of new employees and employees with work experience of less than 3 years;



DuPont is conducting an independent assessment of Health & Safety in line with the Bradley Curve, (latest score of 2.3 against 2.1 in March 2015 and 1.4 in 2014);



Rollout of new corporate H&S standards to operating subsidiaries;



Test of newly-hired employees for their risk propensity at work;



Development of personal Plans for unconditional and safe job performance for line managers;



Development of an occupational health and safety assessment and incentives system for all levels of management; Focus on HSE – World-class Standards

3

Environment Initiatives – Project Developments on Track

1,500 – 1,600 <450

• 15%

~1,800

• 30-35%

Focus on HSE – World-class Standards SO2 Emission in Polar Division, ‘000 ton

Sources: Company data, Norilsk Nickel estimates Notes: 1. Installation of a continuous converting unit and matte granulation unit at smelting facilities (based on Vanukov’s furnace technology), which will allow for significant increase in concentration of SO2 in gas emissions and subsequent reduction of overall SO2 emission (at current utilization technology ~150-200kt SO2 p.a. starting from 2019)

Mid-term goal 2014 Long-term goal Emissions from the facilities located outside of residential areas Emissions from the facilities located in the city area

Environmental compliance - emissions of pollutants into the atmosphere were maintained within legal limits; Environmental improvements: 1. The Sulphur Capturing project (1) at Nadezhda plant has been reviewed and received clearance by the government technical watchdog; 2. Talnakh concentrator upgrade at a final stage of completion; 3. Second briquetting line was launched at Kola division, while the roasting shop has been prepared for closure; Nickel plant closure on track – all preparations are being completed on time. Shut-down by 4Q 2016 is

• n schedule;

4

2015 Highlights

 Consolidated revenue decreased 28% y-o-y to USD 8.5 billion driven by lower metal prices, divestiture of international assets and one-off logistical and operational preparations for the shutdown of Norilsk nickel plant in 2016;  EBITDA was down 24% y-o-y to USD 4.3 billion driven mainly by lower revenue;  EBITDA margin expanded from 48% in 2014 to an industry-leading 50% supported by a 26% decrease in cash cost and a 40% decline in SG&A;  Net profit decreased 14% y-o-y to USD 1.7 billion, while net profit adjusted for non-cash items reached USD 3.2 billion;  CAPEX increased 27% y-o-y to USD 1.7 billion driven by the execution of the downstream reconfiguration programme, accelerated development of Skalisty underground mine and Bystrinsky (Chita) project having entered into an active construction phase. All major investment projects were on time and on budget;  FCF (before financing) decreased 49% y-o-y to USD 2.4 billion owing to lower EBITDA, lower rate of release of working capital and increased Capex;  Net working capital was down 5% y-o-y to USD 1 billion despite a material increase in saleable metals inventories;  Dividends distributed to shareholders in 2015 amounted to USD 18 per share delivering an industry leading dividend yield;  Leverage remained low with Net Debt/ EBITDA at 1.0x as of December 31, 2015. Strong financial position of Norilsk Nickel is confirmed by investment grade credit ratings from S&P and Fitch rating agencies;

5

Source: Bloomberg, Company data. Note: 1. BHP Billiton adjusted for calendar year;

… and Conservative Leverage, Net Debt/EBITDA Leading Profitability in 2015, EBITDA Margin…

Financial Performance Relative to Global Peers

5% 21% 27% 36% 48% 50% 3.6 3.0 2.7 1.9 1.1 1.0

6

Markets Overview

Currencies and Oil Price Effect on Commodities Prices

Mining Currencies and Oil Price Depreciation vs. USD C1 Nickel Laterite Projects Cash Costs Down in 2015 14% y-o-y Driven by Oil & Currencies Commodity Prices are Inversely Correlated with Trade-Weighted US Dollar

Source: Company data, Bloomberg, WoodMackenzie; As of March 10, 2016 Note: USTWBROA Index - is a broad trade-weighted USD index relative to other world currencies, as reported by the US Federal Reserve

Commodity Price Volatility Increased in 2015

10 20 30 40 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 2014 2015 Bloomberg Commodity Index 14,036 12,076 2014 Ni price By-product credits Exchange rates Oil prices Other 2015

• 14%

USD/t

Change in 2015, y-o-y Change in 2016 YTD, y-o-y

• 38% -36%
• 28%
• 17% -15% -14% -13%

RUB WTI BRL AUD ZAR CAD CLP

• 44%
• 33%
• 28%
• 16%
• 13% -13% -11%

WTI BRL ZAR RUB CAD CLP AUD 60 90 120 150 180 60 90 120 150 180 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 USTWBROA (lhs) Bloomberg Commodity Index (rhs) Corr (LTM) = -1.0

8

Speculative Pressure Running High on Demand Concerns

Source: Company data, as of March 10,2016; Note: 1. NYMEX,LME data used for metal trading positions

Analyst Consensus Ni Price Forecast: Persistent Bullish Outlook Despite Lower Spot Rising Speculative Pressure on Metals: Change in Exchange Trading Positions Ni Speculations at Record High Levels: LME Turnover Over 200x of Physical Market

3,000 6,000 9,000 12,000 15,000 18,000 Spot 3M 15M 27M Jan 2015 Jun 2015 Jan-16 USD/t

Nickel LME Forward Curve: No Sense of Direction

5,000 10,000 15,000 20,000 25,000 Spot 2015 2016 2017 Jan 2015 Jun 2015 Jan 2016 USD/t 52% 35% 19% 208%

• 48%
• 64%
• 10%
• 70%

Ni Cu Pt Pd Increase in speculative shorts Reduction of net positions by January 2016, y-o-y 22 26 24 32 41 45 50 68 84 116 124 74 32 36 33 46 58 64 66 88 101 142

• 50

50 100 150 200 50 100 150 200 250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LME SHFE xx 245 mt Annual Ni trade volumes (LME NI quality) Annual Ni output (LME Ni quality)

9

Nickel Market: Little Guidance from Inventory Movements

LME Nickel Price Down 42% in 2015, Total Exchange Inventories Up 19%

Source: Company data; As March 10, 2016

Ni Export from China - Net Nickel Importer: Temporary Jump After the Qingdao Port Scandal in 2014 Ni inventories: Reallocation from LME to SHFE Started in 2H 2015 LME Inventories: Reallocation Between Asian Warehouses in 2015

203 209 178 167 2 1 53 59 177 192 166 162

Decembеr 2014 Junе 2015 Deсembеr 2015 March-16 Johor Singapore Taiwan Other kt

413 456 441 429

10,000 20,000 30,000 40,000 50,000 March-13 March-14 March-15 March-16 Export Import kt 5,000 10,000 15,000 20,000 25,000 100 200 300 400 500 600 March-13 March-14 March-15 March-16 Other Rotterdam Johor Shanghai Nickel Price Decembеr 2014 Junе 2015 Deсembеr 2015 Mar-16 LME SHFE kt

413 468 490 494

100% 98% 90% 87% 2% 10% 13%

10

Ni-Intensive Stainless Steel in China – Proxy for Ni Consumption

Variety of Chinese Sources: Ni-intensive Stainless Steel Production Up 5% - 11% in 2015 300-series Stainless Steel Production in China Recovered After Weak 3Q 2015… Primary Nickel Consumption (Stainless Steel)

1,200 1,600 2,000 2,400 2,800 3,200 3,600 1Q 2Q 3Q 4Q 2012 2013 2014 2015 kt

• 5%

+6% y-o-y

Source: Company data, Umetal, BGRIMM

Y-o-Y ХХ% 400 800 1,200 1,600 2010 2011 2012 2013 2014 2015 2016E Nickel consumption in China Nickel consumption in other countries +1%

• 1%

+3% kt y-o-y +2%

• 1%

+0% 500 600 700 800 900 1,000 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 kt +4% December 15 (y-o-y) +1% December 15 (m-o-m) January 16 (y-o-y)

• 5%

… with Modest Growth Rates Towards the Year-End

7.3 6.3 5.4 5.0 7.0 6.0 9.9 11.0 9.2 9.6 9.9 10.2 4.4 4.2 3.8 4.0 4.3 4.0 BGRIMM (2014) BGRIMM (2015) Umetal (2014) Umetal (2015) Norilsk (2014) Norilsk (2015) 200-series 300-series 400-series +0% +1% +11% +5% mt (96% of industry) (83% of industry) y-o-y +3%

• 4%

11

China – Nickel Destocking in 2015

Strong Increase

• f

Fe-Ni and Refined Ni Imports to China in 2015

Source: Company data, China custom statistics, Bloomberg, TSSINFO, UMETAL

Y-o-Y% 2015 Y-o-Y 502 486 485 485 347 311 261 261 360 290

2013 Closed (Cost) Closed (Ecology) 2014 Closed (Cost) Closed (Ecology) Closed (Feed) Spare capacity utilisation 2015E 2016E

Ni units, kt

• 26%
• 220kt
• 19%

y-o-y

Significant NPI Closures in China due to High Costs, Environmental Pressure and Feed Shortage

130 300 35 1 21 64 96 13 100 200 300 400 500 2014 2015 Jan-16 Refined Ni Fe-Ni (Indonesia) Fe-Ni (Other) +130% Refined Ni Fe-Ni +80% +338% +17%

Implied Ni Units Restocking/(Destocking) in China Excluding Build Up of SHFE Inventory (48 kt) in 2015 Restocking/ (Destocking) of Ni ore and NPI

5,480

• 170
• 2,610
• 7,110

2012 2013 2014 2015 Ni ore stock change in China ports, kt NPI stock change, Ni units, kt

• 8

25

• 20

2013 2014 2015

48

• 100
• 39
• 120
• 100
• 80
• 60
• 40
• 20

20 40 60 2013 2014 2015

Ni units, kt

12

Ni units, kt

Source: Company data, Wood Mackenzie; As of March 10,2016. Note: 1. Based on company’s public announcements and BMO estimates. Production data used for 2015; 2. Sherritt Equity - 50% Moa JV, Ambatovy JV 40%;

4Q15 Average Ni Cash Cost (C1) Down 17% y-o-y Announced Nickel Output Cuts and Capacity Shut-Downs in 2015-2016 - 16% of Supply

Supply Side Response is Slow so Far, but Inevitable

13

Last Reported Results: 2H 2015 EBITDA of Nickel Divisions

Operation Reason Output loss 2015, kt Output loss 2016, kt Glencore (Murrin Murrin, Australia) Price / feed driven ~ 3

• Jinchuan (China)

Price / feed driven ~5 ~20 Cunico (Macedonia/Kosovo) Price driven ~7 ~7 Jiangxi Lithium (China) Price driven ~9

• Votorantim (Brazil)

Price driven

• ~16

NPI (China) Price / feed driven ~125 ~70 Others capacities Technical issues ~32 ~25 Total cuts and shut-downs ~181 ~138

Ni Industry Has Entered into a Major Restructuring

181 138 79 9 30 100 2015 2016 Assets for sale Production cuts and shut-downs BHP Billiton (Nickel West) Glencore (Koniambo) Anglo American (Barro Alto,Codemin) kt Other assets USD mln 30kt 38kt 31kt ХХ 2015 Production 53kt

• 15,000
• 10,000
• 5,000

5,000 10,000 15,000 20,000 25,000 30,000 35,000 500 1,000 1,500 2,000 4Q 2015 4Q 2014 Nickel Price, USD/t Average cost 4Q 15: 8,402 $/t Average cost 4Q 14: 10,186 $/t Spot Price 8,755 $/t Average 2015 11,807 $/t

• 2
• 7
• 10
• 109
• 120

Sherritt (Equity) Anglo American Glencore (Australia) BHP Billiton ERAMET

(2)

79kt

Source: WoodMackenzie, Bloomberg, as of March 10, 2016

Norilsk Flying Fox Nickel Pig Iron - RKEF Nickel Pig Iron EAF Nickel Pig Iron BF

• 15,000
• 10,000
• 5,000

5,000 10,000 15,000 20,000 25,000 30,000 35,000 100 200 300 400 500 600 700 800 900 1000 Diversified miner Government support Ramp up Price sensitive production Spot price 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pobuzhsky Henan Qingpu BF Long Jilin Kalatongke Savannah Nickel Shanxi Dakang FuAn RKEF Qni Yabulu Mincor –South Kambalda Fujjan Desheng RKEF Yulin Wei Ufaley Zhanjua BF Zhanjua Weiye EAF Shandong Xinhai RKEF

2016 consensus forecast of 9 889 $/t

Only a Quarter of Loss Making Capacity Runs a Shut-Down Risk

USD/t

At spot price over 70% of global nickel production is making cash loss, but only 17% run a shut-down risk

Spot price of 8 755$/t 30% 44% 5% 4% 17% 70% Diversified miners Government support Ramp-up Price sensitive production (under risk)

14

Nickel Feed for China: Philippines and Indonesia

Project name Process Status Start year Capacity, kt pa Ni Indoferro BF Started 2013 18 PT Cahaya Modern Metal Industry BF Started 2014 4 Tsingshan RKEF Started 2015 30 Tsingshan 2- 4 stages RKEF High 2015 60-90 9 projects RKEF, BF Medium 2016-2018 70 8 projects RKEF, BF, Leach Low 2016-2017 150

Only 3 Projects in Indonesia Have High Probability of Completion Indonesia NPI Output Forecast for 2015-2017 Nickel Ore Imports from Philippines to China Were Down in 2015

Source: Company data, China custom statistics, Bloomberg

2 4 6 8 10 Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Indonesia Philippines Other mt 2015 y-o-y: Total ore Philippines ore

• 26%
• 6%

2.6 0.5 1 1.5 2 2.5 3 200 400 600 800 1,000 1,200 1,400 Ni ore production in 2015 Ni reserves (>1,5%) by the end of 2015 Number of years Ni units,kt

Mine Life of Nickel Ore Reserves with Ni Grade >1.5% in Philippines is Less than 3 Years

50 100 150 200 2014 2015E 2016E 2017E Commissioned in 2014-2015 High probability Medium probability Low probability Ni units, kt

15

Nickel Market is Entering a Deficit in 2016

Moderate Supply Cuts Have Been Triggered… … while Global Consumption Holds and..

kt

16

55 20 5 20 40 60 80 100 2014 2015 2016E +1.1% +0.3%

Source: Company data

New projects growth China NPI production losses Indonesian NPI ramp-up Change at existing operations

1,870 1,890 1,895

2014 China Europe Americas Other Asia 2015 China Europe Americas Other Asia 2016E +3.3% +2.0% kt

… Growth Reliant on China

• 200
• 150
• 100
• 50

50 100 150

2015 2016E 2014 Incremental change in global supply kt Incremental change in global demand

Temporary Palladium Market Weakness in 2015 due to ETF Outflow

Global Palladium Market: Structural Deficit

Surplus / (deficit), koz

Source: Norilsk Nickel data

(435) 1,015 (225) (655) (1,622) 2010 2011 2012 2013 2014 2015 2016E

ETF

• utflow

Global Platinum Market: Deficit Holds

247 233 (261) (574) (975) (239) (517) 2010 2011 2012 2013 2014 2015 2016E Surplus / (deficit), koz

ETF

• utflow

Palladium ETFs Holdings Change: Driven by the Macro Concerns

381 507 1,104 (520) 430 24 904 (703) 2008 2009 2010 2011 2012 2013 2014 2015 koz Y-o-Y

Platinum ETFs Holdings Change: 2015 Outflow – Rise of Risk Appetite?

102 384 583 183 276 902 228 (278) 2008 2009 2010 2011 2012 2013 2014 2015 koz Y-o-Y

17

PGM Investment Demand: Limited Supply Growth Lags Healthy Demand

Source: Norilsk Nickel data; Note: 1. ACEA, Autodata, Goldman Sachs Research, HSBC Research

Light Vehicle Sales: Solid Growth Rates Driven by Chinese Market in 2015 South Africa Production of Palladium Recovery After Strike is Over

tonnes 89 74 73 58 80 2006 2012 2013 2014 2015E +38%

• 10%

Potentially available for consumption Low price elasticity stocks Non-elastic stocks

Not All Palladium Above-Ground Stocks Available

85 87 2015 China North America Europe ASEAN+India ME+Africa EM 2016E +3%

Mln units

Global Light Vehicle Sales Expected to Grow in 2016 (1)

6.0% 5.8% 4.3% 3.2% China USA India Europe Y-o-Y

18

Tightening Emission Legislation Real Drive Emission Regulation Should be Positive for PGM Demand Total Number of Vehicles Forecasted to Increase Increasing Complexity of Emission Systems and Powertrains Requires Higher PGM Loadings

PGM Demand Drivers In Automotive Industry

Source: Norilsk Nickel analysis, Johnson Matthey, SFA Oxford, HIS; Note:1. According to HIS estimates

80 90 100 110 120 2015 2016 2017 2018 2019 2020 2021 2022 mln vehicles

CAGR 3%

Gasoline

Requires soot (particulate matter) filter (Euro 6c) = more PGMs

Diesel

Requires advanced NOx control (SCR, LNT, SCR-LNT)

Hybrid

Smaller engines but frequent “cold start” requires more PGMs loadings

Direct injection

Cooler exhaust gas, higher HC and soot requires more PGMs in catalyst

Gasoline Lean burn

Requires LNT = more PGMs

Fuel Cell

Current ~30 g Pt per vehicle. Pd for hydrogen production and storage NOx conformity factor Disparity between test (80 mg/km) and real emissions

x3.5

Expected before VW scandal

x2.1

Euro 6d temp 2017-2019 (appr. in October 2015)

x1.5

Euro 6d Final 2020-2021

x1

Euro 7?

(1)

19

Diesel After-Treatment Systems (2016) – Euro 6b

AdBlue (Urea, NH3) injection Engine DOC Diesel Oxidation Catalyst Removes CO & HC Pt&Pd Heavy loaded CSF Catalysed Soot Filter Traps carbon (PM) Pt&Pd lower than in DOC SCR Selective Catalytic Reduction Removes NOx PGM-free Contains Cu AMOX Ammonia Oxidation Removes excess ammonia Low PGM

Selective Catalytic Reduction (SCR) for Diesel Engines

SCR uses urea which is injected into the

• exhaust. Urea reduces NOx to nitrogen, water

and CO2

Engine LNT Diesel Oxidation Catalyst Removes CO & HC Pt&Pd Heavy loaded CSF Catalysed Soot Filter Traps carbon (PM) Pt&Pd

Lean NOx traps (LNT) for Diesel Engines

LNT bind the NOx during lean engine

• peration, then under rich conditions the

NOx is reduced to nitrogen over the catalyst. At Euro 6c (from 2017) the complexity of systems will increase substantially in order to considerably reduce NOx emissions > Higher PGM Loadings vs. Euro 5 > Higher PGM Loadings vs. Euro 5

20

LME Copper Price Near Multi Year Lows, while Inventories Run Tight China Remains the Main Driver for Cu Consumption Growth Copper Supply / Demand Balance

Copper Market Remains Balanced, Inventories Low

(330) 10 560 210 160 2010 2011 2012 2013 2014 2015 2016E 2017E kt

Copper Supply Disruptions: Unfold in 2015 at 5% in Line with Historical Average

6% 8% 6% 5% 6% 5% 4% 6% 5% 5% 0% 2% 4% 6% 8% 10% 200 400 600 800 1000 1200 1400 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E Disruption Relative to original production target kt

Source: Company data, Macquaire Research, Wood Mackenzie

21.6 22.0 22.7 23.3 23.9 2013 China Other 2014 China Other 2015 2016 2017 mt +2% +3% +3% +3% ХХ% Y-o-Y 2,000 4,000 6,000 8,000 10,000 12,000 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Mar-13 Mar-14 Mar-15 Mar-16 COMEX SHFE LME LME Price t USD/t

21

2015 Financial Results

Metal Sales Volumes: Decrease due to One-Offs

Realized Metals Prices: Weak Markets PGM Sales Volumes: Down due to One-Offs Base Metals Sales: Down due to One-Offs

44% 49%

Note:1. Excluding sales of metals purchased from third parties

Metal Sales: Reduced Contribution from Nickel

222 195 6 2 42 43 2014 2015 Russian feed Russian tolling 270 240 Nickel (1) kt

• 11%

347 340 9 3 2014 2015 International (from 3d party feed) 356 343 Copper kt

• 4%

2,593 2,430 74 34 2014 2015 Russian feed 2,464 2,667 Palladium (1) koz

• 8%

596 576 33 14 2014 2015 International (from 3d party feed) 629 590 Platinum (1) koz

• 6%

17,072 6,931 11,962 5,585

Nickel Copper 2014 2015

• 30%
• 19%

USD/t 804

1,388

695

1,057

Palladium Platinum 2014 2015

• 14%
• 24%

USD/oz 43% 38% 23% 24% 20% 23% 8% 8% 2% 2% 4% 5% 2014 2015 Other Semi-product Platinum Palladium Copper Nickel 10,896 7,883 USD mln

• 28%

23

Revenue 2015: Driven down by Weak Markets and One-offs

Nickel Revenue Platinum Revenue Copper Revenue Palladium Revenue

(1,325) 71 4,636 3,010 (372) 2014 Realized price Sales volume Re-sales

• f metals

2015 USD mln (477) 2,468 1,916 (75) 2014 Realized price Sales volume 2015 USD mln (205) 8 869 631 (41) 2014 Realized price Sales volume Re-sales

• f metals

2015 USD mln (289) 16 2,221 1,807 (141) 2014 Realized price Sales volume Re-sales

• f metals

2015 USD mln

24

2015 Revenue Under Pressure from Weak Markets

Revenue Bridge: Significant Impact of Macro Factors Decrease of metal sales by 28% y-o-y to USD 7.9 bn due to:

• Decrease of realized prices

(negative impact of USD 2.4 bn);

• A one off allocation of saleable metals to

metal reserves driven by logistical and

• perational preparations for the shutdown
• f Norilsk nickel plant in 2016;
• Disposal of international operations

(negative impact of USD 56 mln); Geographical mix remain stable:

• Europe remains the largest market, up

to 59%;

• Russia and CIS sales down to 6%;
• Asia sales down to 27% due to lower

nickel prices and sales volumes; Metal Sales Breakdown: Europe is the largest market

50% 59% 32% 27% 9% 8% 9% 6%

2014 2015

Russian Federation and CIS North America Asia Europe 7,883 10,896 USD mln (2,416) (636) 95 (56) 10,896 7,883 2014 LME price Sales volume Re-sales

• f metals

Disposal of international

• perations

2015 Macro Environment Company performance USD mln >80% a One-Offs Effect

25

Industry Leading EBITDA Margin

EBITDA & EBITDA Margin (%) EBITDA decreased by 24% y-o-y to USD 4.3 bn, EBITDA margin up by 2 p.p to 50%:

• Main negative impact on EBITDA came from weak commodity prices (USD 2.1 bn);
• Depreciation of RUB against USD provided a substantial off-set to weak commodity prices in amount of USD 1.4 bn;
• Reduction in sales volumes (negative impact of USD 401 mln) was predominately a one-off and related to a build up of saleable metal reserve;
• Cancellation of nickel and copper export duties in August 2014 contributed positive USD 96 mln;
• Disposal of International operations contributed positive USD 97 mln;
• Preparation for the completion of downstream reconfiguration (Nickel plant closure etc.) had a one-off negative impact in amount of USD 141 mln;

EBITDA Bridge: Effect of Markets and One-Offs

(2,135) (143) (401) (141) (176) 5,681 4,296 1,418 96 97 2014 LME prices Forex Export duties Inflation Sales volume Recon- figuration Intern.

• perations

disposal Other 2015 млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. млн. долл. Markets, Macro & Regulatory: USD (764) mln Company performance: USD (621) mln USD mln One-Offs 7,239 4,932 4,198 5,681 4,296 52% 40% 37% 48% 50%

• 5.0%

5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2011 2012 2013 2014 2015 USD mln

26

Stringent Control of Cash Costs

Reported Cash Costs: Down 26% y-o-y Cash Cost Reduction in 2015: Management Cost Controls and RUB Depreciation Cash Costs Adjusted by FX & Refined Metal Purchase: 1.2% reduction vs. 12.1% growth of domestic PPI 2015 Cash Costs Breakdown

USD mln 1,536 1,131 829 718 537 450 403 186 762 526 2014 2015 Other 3rd party services Materials and supplies Acquistition of semi-products and refined metals Labour 4,067 3,011

• 26%

963 1,131 745 545 341 450 281 186 544 526 2014 - adjusted by FX & metal purchases 2015 - adjusted by metal purchases Other 3rd party services Materials and supplies Acquistition of semi- products Labour 2,874 2,838 USD mln

• 1%

6% 15% 24% 38% 17% USD mln Other Services Materials Labour Metals and semi- products (3%) (34%) 32% (27%) 17% 4,067 3,011 (1,109) (111) (125) 131 43 20 95 2014 Forex Inflation Concentrate and metals purchase Intern. Operation disposal Materials for repairs Personnel Other 2015 USD mln

27

Net Working Capital: Maintained Despite Negative One-Offs

Working Capital Bridge: Excluding One-Offs Working Capital Was Down in 2015

3,018 1,087 1,030 (357) (82) (17) (50) (140) 161 352 76 31.12.2013 31.12.2014 FX LME prices Tax prepayments Stock increase Repairs Optimization of payment terms Prepayments for metal sales Other 31.12.2015 USD 1.9 bn (-64%)

Operating improvements: USD (131) mln Macro and Markets factors: USD (439) mln One-off factors: USD 513 mln

USD mln

28

Free Cash Flow Bridge: FCF / Revenue at 28% in 2015

FCF Reduction(1) : Slow Down of Working Capital Release and Higher Capex

Note: 1. Free cash flow is a non-IFRS measure and is calculated as net cash generated from operating activities less net cash used in investing activities for the reported period

(1,114) (1,385) (356) 153 130 252 4,725 2,405 2014 Working capital movement Change in EBITDA CAPEX Income tax paid Disposal of Investments Other 2015 USD mln

29

Financial Results Sensitivity to USD/RUB Rate

5% 13% 7% 31% 7%

Source: Company data

At the USD/RUB rate of 72.9, 1% change in exchange rate translates into: EBITDA change of USD 22.0 mln, FCF change of USD 36.3 mln Share of Foreign Currency in Company CAPEX Share of Foreign Currency in Company OPEX

26.7 24.7 22.0 20.0 17.8 44.1 40.7 36.3 33.1 29.4 10 20 30 40 50 60 USD mln Exchange rate as of 31.12.15 72.9 Free cash flow EBITDA 65.0 60.0 80.0 90.0 76% 24% RUB Non- RUB 2015 78% 22% RUB Non- RUB 2014 76% 24% RUB Non- RUB 2015 89% 11% RUB Non- RUB 2014

30

Cash Capex(1): Key Project are on Time and on Budget

Mandatory vs. Commercial

Note: 1. CAPEX per Cash Flow, net of VAT;

Breakdown by Projects Capex Forecast

0.7 0.8 0.5 2016 Mandatory Commercial GRK Bystrinskoe 2.0 USD bn Commercial Mandatory 559 668 106 118 226 187 25 61 122 256 171 257 89 107 2014 2015 GRK Bystrinskoe Talnakh enrichment plant Skalisty mine Nickel Plant closure Other mine development Kola Other projects 1,298 1,654 USD mln 573 625 725 1,029 2014 2015 Mandatory Commercial 1,298 1,654 USD mln 62% 38% 44% 56%

31

Leverage Remained at Low Level: 1.0x Net Debt/EBITDA(1)

Preserving Strong Balance Sheet

Proactive Liability Management Debt and Cash Structure

USD 82% LT 83%

Note: 1. Net Debt to Adjusted EBITDA, 2. Under English law, 3. Committed credit lines

1.7 (2.6) 3.5 4.0 4.6 3.5 4.2 0.4 0.5 0.8 1.1 0.6 1.0 2009 2010 2011 2012 2013 2014 2015 Net Debt Net Debt/EBITDA USD bn

32

Liquidity and Debt Repayment Schedule

 In October 2015 the Company reopened the Russian Eurobond

market with a 7-year USD 1.0 bn 144A/RegS Eurobond placement;

 New unsecured committed credit lines were executed with Russian

banks for the total amount of USD 1.3 bn;

 As of December 31, 2015 the total limit of available committed

credit lines amounted to USD 1.8 bn;

 In January 2016, the Company signed a 5-year committed revolving

back-stop facility with a consortium of Chinese banks for the equivalent of USD 0.7 bn (2);

1.1 0.6 1.7 1.3 3.5

4.1

Cash & Available Credit Lines 2016 2017 2018 2019 2020+ Debt repayments Liquidity position USD bn 1.8 Cash&Cash equivalents

RUB 9% RUB 23% Non- RUB 91% Non- RUB 77%

2014 2015

ST 10% ST 14% LT 90% LT 86%

2014 2015

RUB 21% RUB 24% USD 79% USD 76%

2014 2015 Debt Maturity Debt Currency Cash Currency

(3)

Major Projects Update

Skalisty Mine: Project Development on Track

 2015 CapEx: USD 256 mln  Progress in 2015:

Total capital mine works planned in 2016-2025 Existing objects and shafts as at the beginning of 2015

Shaft sinking Drifting 678 2 200 m

Construction completed in 2013-2015 Reconstruction works

 Greenfield project  Production capacity – 2.4Mtpa  Ore reserves: 58Mt  Estimated Project IRR > 50%  Total Capex: ~ RUB42 bn (for 2016-2025)  Mining launched (650kt) in 2015  Ramp-up to 1.95 mt by 2017, to 2.4 mt by 2023  Completion of ventilation shaft (VS-10) by 2017  Completion of skip-cage shaft (SCS-1) by 2019

Project overview Project timeline Project progress Project Highlight

34

Talnakh Concentrator: Modernization and Expansion

2015

Talnakh Stage 1– 7.7 Mt capacity Talnakh Stage 2 – 10.2 Mt capacity Stage 1 - Completed

• Replacement of flotation cells
• Capacity – 7.7 Mtpa (maintained)
• Completion – 2014

Stage: project completed on time / on budget, launched on January, 2015, ramp-up by 1Q 2016; Impact: upgrade in flotation circuit resulted in Ni recovery improvement (by 1%); Stage 2 – Launch April 2016

• Ramp–up by 1Q 2017
• Capacity expansion by 2.5 Mtpa to 10Mtpa
• Technology upgrade:

 The content of nickel in nickel concentrates

to grow from 8,6% to 13,5%;

 Expenses on metallurgical extractions to

reduce due to 12% decrease in Sulphur weight in concentrate;

 Sulfur extraction in the final tailings to

increase by 16%;

2016

Stage 2 – Progress Stage 2 - Progress in 2015

• Installation of new flotation

cells/grinding mills

• Construction of new shop completed

1 st stage of the new tailings dump ~40% complete; 2015 Capex – USD 257 mln

35

Production Reconfiguration Update: Upgrade of Smelting and Refining Facilities

Фундаменты новых объектов

Modernization and Expansion of Capacities at Nadezhda Smelter Expansion of Capacity and Modernization of Kola Nickel Refinery Capital repairs of the flash smelter furnace №1 completed on time/on budget:  Flash smelter furnace №2 – completed in 2014;  Project capex RUB 2.4 bn (or USD 33 mln); Increase of smelting capacities by 0.5 Mtpa to 2.4 Mtpa  Scheduled for completion by 1Q 2016;  Capex in 2015 RUB 2.9 bn (or USD 40 mln); Industrial production of high-grade electrolytic commodity cobalt launched in December 2015:  Total capacity 3 ktpa;  Project capex RUB 3 bn (USD 42 mln); Capital repairs at electrolysis shop №1 (45 ktpa) at final stage:  Ramp-up to full capacity by 3Q 2016;  Project capex RUB 0.9 bn (USD 13 mln); Modernization of at electrolysis shop №2 (145 ktpa) ongoing (upgrade to chloride leaching technology):  Total project capex RUB 9.7 bn (USD 134 mln);  Ramp-up by the end of 2017;

Note: 1.Capex numbers provided in USD assuming current spot rate

Project Highlight

36

Production Reconfiguration Update: Nickel Plant Shut Down

Фундаменты новых объектов

 Smelting capacity: 1 000 kt of concentrate p.a., refining: 120 kt of nickel p.a.  Ageing of equipment: 65%  Number of employees: 3 500 people  SO2 Emissions: up to 400 kt p.a. (in 2015)  Reduction of sulphur dioxide remissions by 15% in Polar Division, including 30-35% reduction in Norilsk city area  Shut down of smelting facilities in 1H 2016  Phased out shut-down of refining facilities will be completed by 4Q 2016  Site isolated and secured - 2016, gradual clean up in 2017-2021 Nickel Plant overview Project timeline Project impact Project Highlight

37

Chita Copper Project Progress : Completed by 45%

Project Highlight

Railway link to the project site is near completion (227 km, 3.7Mtpa capacity). Project financed in partnership with the Russian Government:

• Trial operation launched in December 2015, full commissioning in 2016;

An agreement reached with «FGC UES» regarding power line construction and operation:

• 220kv high –voltage line construction began. Commissioning is scheduled in 3Q 2017;

Waste stripping at the open pits Ildikanskyi and Bystrinsky-2 completed:

• 3mn m3 of waste rock were moved in 2015;

De-risking the Bystrinsky project:

• The set of binding agreement signed with consortium of Chinese investors (Highland Fund) to purchase

13.33% stake in Bystrinsky project for USD100 mln; Construction of main facilities/ordering of equipment on track:

• Contractors have been hired for the construction works (enrichment plant, labour camp and etc.);
• Ongoing construction of more than 20 production units (complex for ore supply, warehouses and etc.);
• All of the concentrator equipment have been ordered (Outotec, FL Smidth);

38

Warehouse for Crushed Ore Administration Building Mechanical Workshops

Chita Copper Project Development Update

Source: Company data

House of Crushed Ore

39

2015 Production Results: in Line with the Guidance

Nickel Production Copper Production PGM Production

koz

223 220 215-225 2014 2015 2015 Guidance

kt

346 353 360-370 2014 2015 2015 Guidance

kt

3,177 3,185 2,894-3,215 2014 2015 2015 Guidance

Note: Metal production volumes from Russian feed (including the processing of Russian feed at Norilsk Nickel Harjavalta in Finland)

40

2016 Production Guidance: Confirming Strategic Targets

Nickel Production Guidance Copper Production Guidance PGM Production Guidance

koz

Note: Metal production volumes from Russian feed (including the processing of Russian feed at Norilsk Nickel Harjavalta in Finland);

• 1. Guidance presented at Strategy Day in May, 2015

206-212 221-231 225-235 15-19

Saleable products Work-in-progress in transit Production Strategy day guidance

kt

342-352 346-358 370-380 4-6

Saleable products Work-in-progress in transit Production Strategy day guidance

kt

2,838-2,978 3,124-3,280 2,894-3,215 286-302

Saleable products Work-in-progress in transit Production Strategy day guidance

41

2016 Outlook

 In general, we believe that global cost curves in Norilsk Nickel metals basket should stabilize in the current year as the impact from mining currencies depreciation and oil price, taking lower global costs, should be by and large done;  We are cautious on nickel in the short run, but have a positive view in the medium term, as we believe that supply rationalization is imminent as over 70% of the industry has been generating cash losses for a prolonged period of time. The industry already entered into a major restructuring in 2015, which is picking up pace in 2016. However, any sustainable price recovery probable will also require a sizeable and sustainable drawdown of exchange inventory;  We remain positive on PGM markets, especially on palladium. We expect that both platinum and palladium markets will be in deficit in the current year, as supply growth will be limited in platinum and there will be none in palladium. Global industrial consumption will be healthy driven by the demand from automobile sector, especially from gasoline autocatalysts for

• palladium. Investment demand will remain a major swing factor;

 We expect CAPEX for the 2016 at USD 2.0 billion (1) (including capex approximately of USD 0.5 billion for Chita);  Working capital is expected to reduce by approximately USD 150 million in 2016 subject to FX unchanged;  Annual dividends are expected to be announced in late April 2016 less the interim dividends in amount of USD 1.6 billion (2);

Note: 1. Assuming exchange rate USD/RUB 65,

• 2. Dividends calculated in USD using the Bank of Russia’s exchange rate for the date the Board of directors of Norilsk Nickel passes a resolution on the recommended amount of dividends.

42

Q&A Session