2015 IFRS CONSOLIDATED FINANCIAL RESULTS APRIL 28, 2016 Igor - - PowerPoint PPT Presentation

2015 IFRS CONSOLIDATED FINANCIAL RESULTS

APRIL 28, 2016

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

Igor Shatalov

First Deputy Head of the Department

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

DISCLAIMERS

This presentation has been prepared by JSC 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. No reliance may be placed for any purposes whatsoever on the information contained in this presentation, or any other material discussed at any presentation or on its completeness, accuracy or fairness. 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

2015 - 1H 2016 HIGHLIGHTS

Dagong rating agency assigned 'AAA' credit rating to Gazprom and confirmed the rating in April 2016 Gazprom and CNPC signed the Heads of Agreement for pipeline gas supply from Russia to China via the Western route

• Feb. 2015
• May. 2015

Gazprom, BASF, E.ON, ENGIE, OMV and Shell signed Shareholders Agreement on Nord Stream 2 project

• Sep. 2015

Gazprom placed € 1 bn Eurobonds Gas export growth to Europe in 2015 (+8% y-o-y)

• Oct. 2015
• Mar. 2016

EUR 2 billion loan facility from Bank of China. The largest bilateral loan in Gazprom’s history Gazprom placed CHF 500 million Eurobonds Gazprom’s Management Committee proposed RUB 7.40 per share dividend for 2015 Government decree on dividends

• Apr. 2016
• Dec. 2015

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

6,073 1,875 787 2,031 390 2,083

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, 2014

SUMMARY OF FINANCIAL RESULTS

+9% +9% +395% +395% +6% +6% +26% +26% (4%) (40%) 2014 vs 2015

RR bn

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

+1% +1% (1%) +8% +8% 444.9 419.5 123.9 129.0 200 400 600 2014 2015 4q14 4q15

Natural gas production Crude oil production Gas condensate production

Including Russian generating companies: Mosenergo, OGK-2, TGK-1, MIPC Calculations may diverge due to rounding.

HYDROCARBON PRODUCTION, ELECTRICITY AND HEAT GENERATION

bcm mln ton mln ton (6%) +4% +4% 14.5 15.3 3.8 4.1 10 20 30 2014 2015 4q14 4q15 43.5 44.0 11.1 11.0 20 40 60 2014 2015 4q14 4q15

Electricity generation Heat generation

bn kWh mln Gcal 155.4 147.9 45.1 41.7 30 60 90 120 150 180 2014 2015 4q14 4q15 125.2 117.1 45.8 40.4 30 60 90 120 2014 2015 4q14 4q15 +6% +6% (5%) (7%) (7%) (12%)

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

821 806 268 267 400 800 1200 1600 2000 2014 2015 4q14 4q15 NET SALES TO RUSSIA (2%) (0%) 159 184 37 59 349 246 352 229 100 200 300 400 100 200 300 2014 2015 4q14 4q15 VOLUMES AVERAGE PRICE IN EUROPE & OC

GAS SALES

234 221 76 71 3,507 3,641 3,523 3,779 1000 2000 3000 4000 100 200 300 400 2014 2015 4q14 4q15 VOLUMES AVERAGE PRICE IN RUSSIA RR/mcm bcm RR bn

Calculations may diverge due to rounding.

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

1,752 2,166 525 735 400 800 1200 1600 2000 2014 2015 4q14 4q15 NET SALES TO EUROPE & OC RR bn bcm 48 40 11 13 262 194 221 182 100 200 300 20 40 60 80 100 2014 2015 4q14 4q15 VOLUMES AVERAGE PRICE IN FSU 412 430 107 138 400 800 1200 1600 2000 2014 2015 4q14 4q15 NET SALES TO FSU bcm USD/mcm USD/mcm

1

Russia Europe & OC2 FSU

3,4 3,4

RR bn +24 24% +40 40% +4% +29 29%

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

125% 152% 124% 185% 157% 85% 108% 134% 80% 100% 120% 140% 160% 180% 200% 2013 2014 2015 4q14 1q15 2q15 3q15 4q15

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

USD bn 16.2 21.2 28.7 25.0 34.3 52.8 43.4 43.9 33.2 27.1 3.8 2.2 12.1 3.2 13.7 2.9 4.0 10.8 17.2 6.4 20.0 23.4 40.9 28.2 48.1 55.7 47.4 54.7 50.5 33.5 20 40 60 80 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cash CAPEX Free Cash Flow 23.6 Operating Cash Flow

Conse servativ ive financi ancial l polic icy: : 10 year ars of positi itive FCF

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS 500 1000 1500 2000 2500 3000 2013 2014 2015

TRANSPORT PRODUCTION OF NATURAL GAS PRODUCTION OF CRUDE OIL AND GAS CONDENSATE REFINING ELECTRIC AND HEAT ENERGY OTHER CAPEX CASH CAPEX

1,475 1,423 1,693

10 20 30 40 50 60 70 80 2013 2014 2015

46.4 37.5 27.9

Gazprom Group’s CapEx1

RR bn

1 CapEx volumes and breakdown as provided in Management Report

CAPITAL EXPENDITURES

+19% (4%) %) (19 19%) (26%)

USD bn

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS 0.36 2.39 3.85 8.97 5.99 7.2 7.2 1% 7% 9% 16% 12% 15% 107% 5% 9% 25% 24% 26% 27% 90%

0% 20% 40% 60% 80% 100% 120%

2 4 6 8 10 12 14

2008 2009 2010 2011 2012 2013 2014

DIVIDENDS AS % OF IFRS NET INCOME RAS BASED DIVIDEND PAYOUT RATIO

RUB/ Share

DIVIDEND PAYOUT

Dividend per share

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

1,075 1,113 1,651 2,083 426 689 1,038 1,359 0.7 0.5 0.6 0.9 0.0 0.3 0.6 0.9 1.2 1000 2000 3000 4000 5000 2012 2013 2014 2015 NET DEBT CASH&CASH EQUIVALENTS NET DEBT/ADJ.EBITDA RUB bn x

KEY DEBT METRICS

Debt maturity profile2 Cost of debt financing Gazprom credit ratings

22% 18% 17% 19% 19% 13% 15% 14% 33% 36% 36% 42% 26% 33% 32% 25% 2012 2013 2014 2015 LESS THAN 1 YEAR 1-2 YEARS 2-5 YEARS MORE THAN 5 YEARS 6.3% 3.8% 5.6% 2 4 6 8 10 2008 2009 2010 2011 2012 2013 2014 2015 WEIGHTED AVERAGE FIXED INTEREST RATE WEIGHTED AVERAGE FLOATING INTEREST RATE WEIGHTED AVERAGE INTEREST RATE %

SOURCE CE: BLOOMBERG, COMPA PANY DATA

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

Total and Net Debt

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

1

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

Strong foothold in current market environment

INVESTMENT CASE

LOW COST BASE POSITIVE EFFECT FROM WEAK ROUBLE LOW DEBT BURDEN BALANCED DIVIDEND POLICY CAPEX OPTIMIZATION & PROJECT PRIORITIZATION

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

ADDITIONAL INFORMATION

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

14 RUSSIAN NATURAL GAS BALANCE

Bcm 2014 2014 2015 2015 4Q2014 14 4Q2015 15 Natura tural l gas s reso sources rces 714.2 .22 694.4 .45 194.2 .20 19 199.2 .20 Domestic gas production 642.07 634.90 177.03 185.68 Other sources including Central Asian and Azerbaijani gas 29.33 25.84 6.93 6.21 Gas withdrawn from underground storage in Russia, Latvia and Europe 36.64 29.62 9.03 6.32 Decrease in the amount of gas within the gas transportation system 6.19 4.10 1.22 0.99 Natura tural l gas s distrib stribution tion 714.2 .22 694.4 .45 194.2 .20 19 199.2 .20 Domestic consumption 458.38 443.67 140.36 134.75 including needs of the gas transportation system and underground storages 33.19 32.28 9.39 11.26 Gas pumped into underground storages 41.59 31.54 4.93 2.73 Gas for LNG production 14.45 14.54 3.73 3.91 Foreign supplies 151.55 163.00 33.94 44.48 including Baltic states 3.92 3.56 1.35 1.15 FSU supplies 41.82 37.58 9.39 12.28 Increase in the amount of gas within the gas transportation system 6.44 4.12 1.85 1.05

Source: Company Operating Data

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2015 IFRS CONSOLIDATED FINANCIAL RESULTS

CONTACTS FOR INVESTORS AND ANALYSTS

IVAN AN KHROMUSH MUSHIN IN

Head of Division Phone: (007) (495) 719-3143 E-mail: I.Khromushin@adm.gazprom.ru

ANTON ON DEMCH CHEN ENKO

Deputy Head of Division Phone: (007) (495) 719-4298 E-mail: A.Demchenko@adm.gazprom.ru