3Q2017 IFRS RESULTS NOVEMBER 30, 2017 1 3Q2017 IFRS RESULTS Igor - - PowerPoint PPT Presentation

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3Q2017 IFRS RESULTS

3Q2017 IFRS RESULTS

NOVEMBER 30, 2017

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3Q2017 IFRS RESULTS

Igor Shatalov

First Deputy Head of Department

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3Q2017 IFRS 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 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, such statements may also occur during the Q&A session. 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 operates. 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 of 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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3Q2017 IFRS RESULTS

45.9 52.1 43.7 50.9 20 40 60 3Q2016 3Q2017 BRENT URALS

HIGHLIGHTS

Source: Company data. Bloomberg. Bank of Russia website

1 OC - Other countries: including LNG sales

64.6 59.0 63.2 58.0 20 40 60 80 3Q2016 3Q2017 USD/RUB AVERAGE RATE USD/RUB AS OF THE END OF PERIOD USD/RUB USD/bbl

Market environment in 3Q2016 vs 3Q2017

Jul. 2017 2017

• Nov.

2017 2017

• Sales to Europe +8.4% YoY at 170 bcm

from 1 Jan, 2017 to November 22, 2017

• Construction of the TurkStream pipeline continues,
• ver 520 kilometers of pipes laid
• Establishing a 50/50 joint venture with BOTAS for

the construction and operation of the onshore transit gas pipeline in Turkey

• +40% to access of OPAL pipeline
• Supplementary Agreement signed with China to

supply gas via Power of Siberia starting December 20, 2019

• Over 1,120 km of the Power of Siberia pipeline
• completed. Construction continues
• First foundation laid for Amur GPP

USD/mcm 159.2 194.6 50 100 150 200 3Q2016 3Q2017 AVERAGE GAZPROM GAS SALES PRICE IN EUROPE & OC 3,677 3,692 1,000 2,000 3,000 4,000 3Q2016 3Q2017 AVERAGE GAZPROM GAS PRICE IN RUSSIA RUB/mcm

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3Q2017 IFRS RESULTS

1,432 356 356 200 200 336 336 166 166 2,639

• 300

300 600 900 1,200 1,500 1,800 2,100 2,400 2,700

Total net sales

• Adj. EBITDA

Net profit Capex Operating CF FCF Net debt

1 2 3 (69%) 4 (170)

1 EBITDA adjusted for changes in impairment provisions 2 Profit for the period attributed to shareholders of PJSC Gazprom 3 Cash capital expenditures 4 Compared to Net debt as of December 31, 2016

SUMMARY OF 3Q2017 IFRS FINANCIAL RESULTS

+14% +14% (32%) +37% 37% +18% +18% 3Q2016 vs 3Q2017 RUB bn

RUB bn

+96% +96% (3%)

*In order to reflect the effects of the bank deposits (reported as part of Other current and non-current assets)

Adjustments needed for analytical purposes*

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3Q2017 IFRS RESULTS

12.1 12.5 11.9 12.1 12.6 0.0 5.0 10.0 15.0 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 3.7 4.2 4.1 3.9 3.7 0.0 1.0 2.0 3.0 4.0 5.0 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Crude oil Gas condensate

Gazprom Group’s volumes produced in Russia Calculations may differ due to rounding.

mt mt (1%) +5%

PRODUCTION

35.2 45.7 44.8 35.2 32.9 10 20 30 40 50 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 10.6 45.9 49.5 21.5 9.9 20 40 60 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Electricity Heat

bn kWh mn Gcal (6%) (7%) 89.0 134.1 127.2 106.1 107.3 0.0 50.0 100.0 150.0 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Natural gas

bcm +21 +21%

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3Q2017 IFRS RESULTS

30 75 82 42 33 3,677 3,848 3,820 3,646 3,692 1000 2000 3000 4000 25 50 75 100 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 VOLUMES AVERAGE PRICE IN RUSSIA 52 67 66 54 55 159 178 191 192 195 50 100 150 200 20 40 60 80 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 VOLUMES AVERAGE PRICE IN EUROPE & OC

GAS SALES

110 289 312 154 121 100 200 300 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 NET SALES TO RUSSIA RUB/mcm bcm RUB bn

Calculations may differ due to rounding.

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

418 593 594 460 494 200 400 600 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 NET SALES TO EUROPE & OC RUB bn bcm 6 11 13 6 6 141 152 155 160 165 50 100 150 5 10 15 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 VOLUMES AVERAGE PRICE IN FSU 48 95 102 49 51 50 100 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 NET SALES TO FSU bcm USD/mcm USD/mcm

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Russia Europe & OC2 FSU

3,4 3,4

RUB bn +10% 0% 18% 18% 6%

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3Q2017 IFRS RESULTS

40% 53% 7%

OIL AND ENERGY BUSINESS

Calculations may differ due to rounding.

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

Net Sales1

498 542 533 522 561 200 400 600 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 86 159 160 103 86 50 100 150 200 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 RUB bn 0%

3Q2016 3Q2017

+14% 14%

Electricity and heat Crude oil and gas condensate; refined products

39% 55% 6%

CRUDE OIL AND GAS CONDENSATE; REFINED PRODUCTS GAS BUSINESS AND OTHER REVENUES ELECTRICITY AND HEAT RUB bn

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3Q2017 IFRS RESULTS

According to Gazprom 3q17 IFRS report1:

BANK DEPOSITS

Key feat atur ures es of bank k deposit its2:

• Early withdrawal clause
• Deposit term of over 3 months
• Are NOT included in Сash and cash equivalents

Impac act of substan anti tial al increas rease e in bank depos

• sit

its:

• Decrease in Cash and cash equivalents
• Increase in Net Debt and Net Debt/EBITDA
• Reduction in Cash flows from operating activities3

(changes in working capital)

• Decrease in Free cash flow3

127 127 144 144 472 472 503 503 507 507 5 42 42 41 41 1 3 200 400 600

2015 2016 1Q2017 2Q2017 3Q2017

LT DEPOSITS ST DEPOSITS RUB bn

513 513 186 186 132 132

1 Source: Gazprom 3Q2017 IFRS report, page 19 2 Reported as a part of Other current assets and Other non-current assets

In 3Q2017 Gazprom m substan stantial tially ly increa eased sed bank deposit

• sits

s volum lumes es Increase in LT and ST bank deposits is aimed at improving the efficiency of liquidity management

3 Affected by ST deposits

504 04 510 510

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3Q2017 IFRS RESULTS

KEY DEBT METRICS

3Q2017 adjusted Net Debt structure2 Total Debt breakdown by currency Total Debt and Net Debt Cash, cash equivalents, bank deposits breakdown by currency

1,113 1,651 2,083 1,933 2,639 689 1,038 1,359 897 500 0.5 0.6 0.9 1.6 1.8 0.0 0.5 1.0 1.5 2.0 2.5 3.0 2,000 4,000 6,000 2013 2014 2015 2016 3Q2017 NET DEBT CASH & EQUIVALENTS NET DEBT/ADJ.EBITDA LTM RUB bn

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1 Calculated using dollar values of Net debt and EBITDA 2 Net Debt adjusted for the bank deposits reported as a part of Other current and non-current assets

RUB 19% USD 39% EUR 40% Other 2%

RUB 59% USD 18% EUR 16% Other 7% 3,138 (500) 2,639 (507) (3) 2,129 1.8 1.5 0.5 1 1.5 2 500 1,000 1,500 2,000 2,500 3,000 3,500 Total Debt Cash & equivalents Net Debt reported ST deposits LT deposits Net Debt adjusted Adj.Net Debt/Adj.EBITDA LTM RUB bn x

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3Q2017 IFRS RESULTS

1,262 1,641 1,369 1,069 988 400 800 1200 1600 2014 2015 2016 9M2016 9M2017

Cash CapEx

1 CapEx breakdown as provided in Management Report

CAPITAL EXPENDITURES

+30% (17%) (8% 8%) RUB bn 35% 22% 16% 16% 3% 8% TRANSPORT PRODUCTION OF CRUDE OIL AND GAS CONDENSATE PRODUCTION, DISTRIBUTION AND STORAGE OF NATURAL GAS REFINING ELECTRICITY AND HEAT OTHER CAPEX

The Group’s 9M2017 CapEx breakdown1

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3Q2017 IFRS RESULTS

KEY GAS BUSINESS INVESTMENT PROJECTS

• St. Petersburg

Moscow Torzhok Blagoveshchensk Ukhta Greifswald (Germany)

KEY INVESTMENT PROJECTS RUB BN — CAPEX 2017, (INCL. VAT) POWER OF SIBERIA

212

RUB BN

AMUR GPP

102

RUB BN

CHAYANDA FIELD

72

RUB BN

UKHTA-TORZHOK 2

81

RUB BN

NORD STREAM 2

102

RUB BN

TURKSTREAM

93

RUB BN

Anapa

BOVANENKOVO FIELD

48

RUB BN

RUSSIA

CHINA TURKEY

Kiyikoy (Turkey)

GERMANY

PJSC Gazprom (parent company) 2017 Investment Program

1,129 RUB BN

(INCL. VAT)

SMALL-SCALE LNG AT PORTOVAYA CS

47

RUB BN

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3Q2017 IFRS RESULTS

ADDITIONAL INFORMATION

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3Q2017 IFRS RESULTS

14 RUSSIAN NATURAL GAS BALANCE

Source: Company Operating Data

Bcm 3Q2016 3Q2017 9M2016 9M2017

Natur ural gas resou

• urces

es 149.2 169.1 498.5 556.2 Domestic gas production 141.4 160.3 449.4 502.9 Other sources including Central Asia and Azerbaijan gas 5.4 6.8 16.3 19.2 Gas from underground storage facilities in Russia. Latvia and Europe 1.4 1.3 29.8 31.4 Decrease in the amount of gas within the gas transportation system 1.0 0.8 3.0 2.7 Natur ural gas distr istrib ibution ution 149.2 169.1 498.5 556.2 Domestic consumption 81.1 83.9 309.5 327.2 including needs of the gas transportation system and underground storage facilities 6.6 8.7 21.1 26.7 Gas pumped into underground storage facilities 16.5 28.9 26.5 48.9 Gas for LNG production 3.4 3.5 10.5 11.3 Foreign supplies 41.9 46.4 128.0 143.9 FSU supplies 5.5 5.5 21.3 22.3 Increase in the amount of gas within the gas transportation system 0.8 0.9 2.7 2.5

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3Q2017 IFRS RESULTS

THANK YOU!