PJSC “Chelyabinsk Pipe-Rolling Plant”

2016FY IFRS results and market

overview

March 2017

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Page number

SECTION I KEY FIGURES 4

SECTION II MARKET OVERVIEW & COMPANY STRATEGY 7

SECTION III FINANCIALS 18

SECTION IV APPENDIX 25

2

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SECTION I

Key figures

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RUR bln 2013 2014 2015 2016

Revenue 112.4 128.1 148.3 135.5

EBITDA 18.1 22.7 28.9 27.9

Margin (%) 16.2 17.7 19.5 20.6

Net profit/(loss) (1.9) (1.2) 6.0 6.4

Margin (%) (1.6) (1.0) 4.1 4.7

Gross Debt 100.5 99.4 94.1 91.1

Cash 3.0 5.5 8.0 14.8

Net debt 97.4 94.0 86.1 76.2

Net debt / EBITDA 5.4x 4.1x 3.0x 2.7x

Shipments2, ‘000 tonnes 1 680 2 167 2 036 1 713

LDP 709 1 016 886 648

Seamless pipes 931 1 104 1 094 999

Other welded pipes 40 47 56 65

• One of Russia’s largest pipe manufacturers with a diversified customer

base within Oil & Gas and Industrial sectors

• Main operational assets are located in Chelyabinsk (Chelpipe) and

Pervouralsk (Pervouralsk New Pipe Plant)

• Core shareholders are Andrey Komarov and Alexandr Fedorov (jointly

own more than 80% of Chelpipe shares)

• Credit ratings: Ba3, stable / BB-, stable (Moody's / Fitch)

NUMERICAL SUMMARY

PRODUCT MIX

4

(1) Company estimates for 2016, market size is provided exclusively for LDP & OCTG pipe segments

(2) Including only pipe division shipment volumes

KEY FACTS

SECTOR POSITIONING1 IN RUSSIA

Market: 2 508 ths t1 Market: 2 037 ths t1

44%

36%

19%

2%

REVENUE

Seamless pipe

LDP

Other production& services

Other pipes

RUR 135.5 bln Output: 1 713 ths t

Source: Company data

35%

26%

20%

15%

4%

#2 IN LDP MARKET

OMK

Chelpipe

ТМК

ITZ

Other RF

56% 16%

14%

14%

#2 IN OCTG MARKET

ТМК

Chelpipe

OMK

Other RF

58%

38%

4%

SHIPMENTS2

Seamlesspipe

LDP

Otherwelded

CHELPIPE AT A GLANCE

KEY EVENTS • Chelpipe issued its first ever publicly traded bonds for 5 RUR bln on the

Russian stock market which resulted in a 3x oversubscription

• Contractual shipments for Nord Stream 2 project commenced

• Restructured the syndicated loan from 2012 with three leading state banks

at favorable conditions as well as obtaining international credit ratings

• ETERNO: opening ceremony lead by Gazprom CEO Alexei Miller and

unique product assembly launch attended by Russian President V.V. Putin

Work

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rea Manufacturing of fittings and valves

Oilfield services

Manufacturing of pipes

Oil & Gas equipment

Large diameter pipes

(LDP)

Pipes for oil and gas

production

Industrial pipes

Steel pipes production Chelyabinsk

Scrap collection and processing Ural and Povolzhsky Region

Chain of scrap processing

sites

Development of complex

solutions

Engineering Moscow

Round and square billet

Seamless pipe production

Steel melting and seamless pipes Pervouralsk

Trade branched in

Russia and

Kazakhstan

16 storage facilities

Distribution network Russia, Kazakhstan

Hot bends

Cold bends

Short-radius bends

Pipeline equipment Chelyabinsk

Pumping units and

aggregates

Oil production – equipment Almetievsk

Czech Republic

K a z a k s t a n

Almaty

Magnitogorsk Chelyabinsk

Pervouralsk

Moscow R U S S I A

Almetievsk

Noyabrsk

Nizhnevartovsk

5

Nanoenabled stainless

steel connections

Stamped-welded

pipeline joints (SWPJ)

Pipes and stamp welds Chelyabinsk

Industrial valves Czech Republic

Stop valves

Ball valves

Check valves

Special valves

WIDE GEOGRAPHICAL PRESENCE &

INTERNATIONAL DISTRIBUTION NETWORK

Izhevsk

Buguruslan

Repair services of pumping

equipment

Pipe services

Oilfield services Tatarstan, Udmurtia, Khanty-Mansiyskiy,

Orenburg, Yamalo-Nenets Regions

Gubkinskiy

Muravlenko

Strezhevoy

Niagan

Talinka

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SECTION II

Market overview & company strategy

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REVENUE1 EBITDA2

Pipe segment

Oilfield Services

Trunk Pipeline

Equipment

8,1 6,5

8,1

5,9

2013 2014 2015 2016

RU

R b

ln

7

(1) Including intragroup volumes

(2) EBITDA figures exclude adjustments and eliminations and hence differ from consolidated group EBITDA

95,1 111,2

130,8 122,7

2013 2014 2015 2016

RU

R b

ln 15,5

21,0

26,5 25,6

2013 2014 2015 2016

RU

R b

ln

9,8 11,4 11,7 12,2

2013 2014 2015 2016

RU

R b

ln

1,5 1,9

2,4

1,6

2013 2014 2015 2016

RU

R b

ln

1,1

(0,1)

0,5 0,4

2013 2014 2015 2016

RU

R b

ln

16.3% 18.9% 20.3% 20.9%

15.1% 16.7% 20.8% 13.0%

14.0% (2.2%) 5.8% 6.5%

SEGMENTAL PERFORMANCE

DYNAMICS

Source: Company data = EBITDA margin

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65%

35% Oil and gas sector

Industrial sector,power generationsector, etc.

32%

17% 7%

8%

6%

6%

6%

2% 16%

Gazprom

Rosneft

Transneft

Gazprom neft

Nord Stream 2 AG

Surgutneftegaz

LUKOIL

Irkutsk Oil Company

Other

4%

96%

TOP-7Customers

Other

DIVERSIFIED SALES CHANNELS AND

LOW CLIENT CONCENTRATION IN

INDUSTRIAL SECTOR REVENUE MIX IN THE PIPE SEGMENT

OIL AND GAS SECTOR REVENUE MIX INDUSTRIAL SECTOR REVENUE MIX

8

*

*Including: ZAO “Kurganstalmost”, OOO “Belenergomash”, GAZ Group, Krasniy

Kotelshik, Kamaz, Rostselmash & Avtovaz Source: Company data

+2% Y-o-Y

DOMESTIC VS EXPORT PIPE SHIPMENTS

85%

5% 10%

Domestic sales

Nord Stream 2

Other exports

Shipments:

1 713 th t

Exports:

+5% Y-o-Y

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RUSSIAN OIL & GAS MARKET

REMAINS ROBUST

Source: Company data, CDU TEK

9

…BUT PIPE DEMAND REMAINS STRONG UPSTREAM CAPEX BUDGET IS CHANGING

4 009

3 154

(53%)

(2%) +19% (9%) +10% (13%) +60% (24%) (40%)

201

5

Ga

zpro

m

Tra

nsne

ft

Rosn

eft

Luko

il

Ga

zpro

mN

eft

Ta

tne

ft

Ba

sh

neft

Su

rgu

tneft

ega

z

Nova

tek

201

6

rub

bln

1 033 760

3 233

New Pipelineconstruction (LDP)

Renewal of existingpipelines (LDP)

Consumption in Oil &Gas industry (OCTG &

line pipes)

ths t

2016

RUSSIAN DEVELOPMENT DRILLING ACTIVITY IS STRONG AND GROWING

17,2 18,6 20,4 21,5 20,4

22,6 24,7

10% 12% 13%

20%

28%

33% 34%

2010 2011 2012 2013 2014 2015 2016

(%)

mln

m

Total drilling % of horizontal drilling

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SUSTAINABLE RUSSIAN OIL & GAS MARKET

Source: Oil and Gas Vertical 2016, BP Statistical Review of Energy 2016

HORIZONTAL DRILLING IN RUSSIA

10

NUMBER OF TOTAL WELLS IN RUSSIA NEW WELLS COMPLETION IN RUSSIA

RUSSIAN OIL PRODUCTION

1 819 2 051 2 687

4 355

5 557

6 954

8 145

2010

2011

2012

2013

2014

2015

2016

km

10,37

10,52

10,64

10,78 10,84

10,98 10,97

2010

2011

2012

2013

2014

2015

2016

mm

bp

d

136 905 139 198

143 835 146 282

148 658

151 470

2011

2012

2013

2014

2015

2016

pc

s

5 802

6 146 6 131

6 556

6 065 6 261

7 141

2010

2011

2012

2013

2014

2015

2016

pc

s

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CHELPIPE MAINTAINS A HIGH LEVEL OF CLIENT

DIVERSIFICATION OUTSIDE OF OIL & GAS

254 256 258 259 258

0

100

200

300

2016E 2017E 2018E 2019E 2020E

Gig

a w

att

s

Thermal Hydropower Nuclear Renewables

KEY MESSAGES RUSSIAN UTILITIES MARKET COMPOSITION

Operating Under construction Planned

NUCLEAR INFRASTRUCTURE GEOGRAPHIC EXPANSION

• Chelpipe remains active in markets outside of oil & gas, 35% of

Company revenue comes from machinery, energetics & other

industries

• Russia's long-term energy policy assumes an expansion of

nuclear energy with one new reactor launched annually until 2028

• Power mix in Russia is expected to de dominated by cost-

competitive thermal sources of generation (gas) as well as nuclear

and hydropower

• Russia’s long-term energy policy assumes an expansion of

nuclear energy to preserve gas for export due to higher export

price

• Chelpipe is well positioned to supply the energetics industry with

pipes and components

Kola

Leningrad Central

Beloyarsk Nizhny

Nov. Tatar

Kalinin

Smolensk Baltic

Kursk

Moscow

Novovoronezh Balakovo

Dimitrovgrad South-Ural

Bilibino

Pevek (floating)

Rostov

Russia

INVESTMENTS IN NUCLEAR INFRASTRUCTURE

11

35

7

26

Operating Under construction Planned

№ o

f re

ac

tors

- R

us

sia

Source: BMI, Frost & Sullivan

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21%

16% 14%

11% 10% 9%

neg. neg n/a n/a

Chelpipe(-/Ba3/BB-)

ТМК (B+/B1/-)

Tenaris(-/-/A-)

ArcelorMittal(-/Ba2/-)

Baosteel(-/Baa1/A-)

Sumitomo(-/Baa1/-)

US Steel(-/B3/B+)

V&M(B+/-/-)

ОМК (-/-/-)

TPCO(-/-/-)

EB

ITD

A m

arg

in, %

BEST-IN-CLASS PRODUCER OF

STEEL PIPE PRODUCTS IN THE WORLD

Source: Companies’ data and estimates

12

(1) S&P/Moody’s/Fitch ratings

(2) Figures for FY 2015

LARGEST WORLD STEEL PIPE PRODUCERS (2016)

INDUSTRY LEADING PROFITABILITY (2016)

3,4

2,6

2,0 2,0 1,7

1,4 1,6

1,3 1,3

0,5

TMK¹(B+/B1/-)

TPCO²(-/-/-)

Tenaris(-/-/A-)

OMK(-/-/-)

Chelpipe(-/Ba3/BB-)

ArcelorMittal²(-/Ba2/-)

Baosteel²(-/Baa1/A-)

V&M(B+/-/-)

Sumitomo²(-/Baa1/-)

US Steel(-/B3/B+)

mln

t

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70% 70% 76% 82%

2013 2014 2015 2016

Other ChMK

MZ Serov Evraz NТМК

OMK Electric steelmaking complex (Chelpipe)

69% 60% 55% 53%

15%

28% 30%

40%

13%

7% 9%

7%

2013 2014 2015 2016

ММК Ural Steel

Severstal Alchevsk Iron&Steel Works

Azovstal Import and other

VERTICAL INTEGRATION AND

STRONG SUPPLIER BASE

13

Scrap processing

META Group

Pipe billet production

Zhelezny Ozon 32

Seamless pipes production

ChelPipe/PNTZ

ТМК

ММК

Chelpipe

1600 km vs 400 km

R U S S I A

High level of vertical integration in the process of seamless

pipe production

Advantageous location near steel slab suppliers for

LDP division

Source: Company data

BILLETS SUPPLY STRUCTURE STRIP PURCHASING STRUCTURE

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• Number of OCTG manufacturers is constantly increasing in Russia.

Currently, there are 3 largest producers which constitute ca. 80% Russian

market

• As of 2016, Chelpipe takes second place by sales volumes

• Chelpipe’s market share in Russia is ca. 17%.

• Chelpipe manufacturers all sorts of

OCTG pipe products (the company

doesn’t manufacture drill pipes)

• There are 4 leading LDP manufacturers in Russia ensuring 96% of total sales

• Among LDP producers Chelpipe carries a complete spectrum of product range

including pipes up to 18 meters long with all sorts of wall thicknesses

• As of 2016 Chelpipe takes the second place by sales volume

• Chelpipe’s market share in Russia is

25-30% depending on the infrastructure

project schedule

• The LDP producer’s capacity in the Russian

Federation is enough to satisfy the Russian

demand

• In Russia there are 2 main manufacturers of seamless pipes (TMK and

Chelpipe) with combined domestic market share of 88%

• Russian manufacturers account for over 90% of the market; the rest is imported

• Chelpipe focuses on 3 main sectors for seamless pipes: oil and gas,

machinery and for general purpose

• Historically Chelpipe’s share in oil & gas

pipes c. 25%

• Machinery sector – 50%

• General use – 54%

• Energy and petrochemical sectors

Chelpipe’s market share is ca. 60%.

53% 44%

3% ТМК

Chelpipe

Other RF

56%

16%

14%

14% ТМК

Chelpipe

OMK

Other RF

35%

26%

20%

15% 4%

OMK

Chelpipe

ТМК

ITZ

Other RF

CHELPIPE HOLDS STABLE SECOND PLACE IN ALL

MAJOR PIPE SEGMENTS IN RUSSIA

OVERVIEW • In 2016 production volume of steel pipes in Russia was 10.4 mt. Russia

manufacturers are primarily focused on domestic market which achieved

9.2 mt in 2016

• Chelpipe focuses on the following market segments:

• LDP pipes – market focused on manufacturing and repair of main

pipelines (75-80% of the market)

• OCTG – market for oil and gas production market

• Other Seamless Pipe – highly diversified market predominantly used in

oil & gas, power generation, chemical & heavy machinery sectors

BENCHMARKING BY LDP

BENCHMARKING BY OCTG BENCHMARKING BY OTHER SEAMLESS PIPES

Source: Company data

2 508

ths t

2 037

ths t

1 499

ths t

14

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Products

Production

output1,

thou.tons

Revenue1,

% of total Market

share1, % Description Key customers

Large diameter

pipes (LDP) 648

• PJSC Chelyabinsk Pipe – Rolling Plant

• Product range: single-joint longitudinally welded pipes Ø

508÷1422 mm, wall thickness up to 50,0 mm, groups of

strength up to X100. Production process: JCO forming,

UOE forming

Seamless (OCTG) 335

• PJSC Chelyabinsk Pipe – Rolling Plant , JSC

Pervouralsk New-Pipe Plant

• Product range:Ø 60÷426 mm, wall thickness 5,0÷16,5

mm, groups of strength J55÷P110

Other seamless

pipes 665

• PJSC Chelyabinsk Pipe – Rolling Plant , JSC

Pervouralsk New-Pipe Plant

• Product range:Ø 0,3÷650 mm, wall thickness 0,1÷90

mm. Production process: seamless hot-rolled and cold

deformed pipes

Pipeline fittings2 13

• ETERNO plant produces stamp-welded components

using nano-structured materials for oil and gas industry,

product size range: 530÷1 422 mm, wall thickness up to

100 mm

• SOT produces hot-bended elbows Ø 219-1420 mm.

Products produced at SOT are aimed for pipeline bends,

for oil satiations piping systems, and for other oil and

gas facilities

Oil

field

serv

ices

ESP 4 273

pcs

• ALNAS - Products: electric submersible pump units

(ESP), gas separators, pump protectors, submersible

electric motors, alternative products (brake rotors)

• Izhneftemash - Products: installation of sucker-rod

pumps (SRP), special equipment for oil production,

spinning wrenches and pumps, wrenches for wells

repair. SRP

4 574

pcs

INTEGRATED SOLUTIONS FOR OIL

AND GAS INDUSTRY

(1) As of YE 2016, Company assessment

(2) Total revenue from sales of stamp-welded components and connecting parts of pipelines

15

18%

29%

15%

40%

16%

38%

5%

9%

16%

44%

26%

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STRATEGIC HIGHLIGHTS

Sustainable growth

• Increasing the share of high value-added products in OCTG and LDP (offshore and premium solutions) as well as

seamless pipes for energetic and industrial segments

• Extending the market share into products of next level in value chain

• Development of the production technology and increasing operational effectiveness on the basis of the “White

Metallurgy” principle

• Increasing transparency of the business processes and implementation of latest IT-solutions

• Development of holistic solutions to oilfield services in line with global best-practices fine-tailored to match the

needs of every client

High client satisfaction

• Leadership in supply discipline in our segment

• Improvement of client-orientation and service

• Increase of client retention and loyalty ratio

Human capital growth

• Organizational improvements and adaptation of the best management practices

• Ongoing personnel training system based on integrated IT solution

• Leadership in engagement of personnel within industrial sector

• Execution of projects aimed at increasing productivity and employee motivation including educational projects such

as “College of the Future” in the Republic of Tatarstan

Regional expansion • Growth of client base in CIS

• Geographical diversification with additional focus on American and MENA markets

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SECTION III

Financials

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28 901 27 900

(12 911) 11 123

626 259 (346) 248

EBITDAFY 2015

Changes in revenue

Cost of sales

Distribution costs

G&Aexpenses

Impairment of assets

(Loss)/gainon disposal

of PPE

EBITDAFY 2016

RU

R m

ln

FINANCIAL PERFORMANCE – THE COMPANY IS

IMPROVING MARGINALITY

18

112,4 128,1

148,3 135,5

18,1 22,7 28,9 27,9

16,2% 17,7%

19,5% 20,6%

2013 2014 2015 2016

RU

R b

ln

Revenue EBITDA EBITDA margin (%)

KEY FINANCIAL METRICS

EBITDA BRIDGE1

(3,5%)

(1) Less inter segment revenue

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10 615 10 343

579 (370) (82) (14) (3) 93 18 25

(520)

2015 Salar-ies

Nonproduc-

tion over-heads

Taxes D&A Insur-ance

Consul-ting

Lease Aux.materials

Others 2016

RU

R m

ln

COST STRUCTURE DYNAMICS – STABLE TREND

OF COST OPTIMIZATION

19

10 003 9 369

(574) (154)

3 150 (58)

2015 Transporation,customs

Packing,storage

Market-ing

Comm-ission

Others* 2016

RU

R m

ln

*Including: social taxes, office expenditures, depreciation, amortization, staff costs, lease expense and insurance

DISTRIBUTION GENERAL & ADMINISTRATIVE

105,9

95,5

(9,4)

0,3 0,7

(1,3) 0,2

1,0 (0,1)

(1,8)

2015 Rawmaterials

Salaries & taxes

D&A Overheads Utilities COGS for

resale

Changes ininventoryallowance

Changes inbalances of

WIP andfinished goods

2016

RU

R b

ln

COST OF GOODS SOLD

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1 224 974

341 260

107 154

2 945

224

2 324

3 045

2015 2016

Projects R&D and intangible assets

Others ETERNO

Maintenance

BALANCED AND CAREFUL APPROACH TO CAPEX

20

Expansion

CAPEX:

35%

Expansion

CAPEX:

66%

RUR million

The main expansion projects of the company have been stretched

out over a number of years and include:

• The large reduction in expansion CAPEX Y-o-Y due to

completion of works at ETERNO (pipes & stamp welds) plant

• Rimera: oilfield services improvement works (510 RUR mln)

• Vysota 239: new welding techniques and equipment

procurement (200 RUR mln)

• Finishing center: equipment procurement (180 RUR mln)

• Internal efficiency optimization (112 RUR mln)

• Nord Stream 2: preparation of facility for construction of LDP for

the project (422 RUR mln).

• Technical improvements for Transneft: modernization in

accordance to the latest requirements by a major Chelpipe client

(244 RUR mln)

• Technical improvements for Rosneft: installation of

equipment to hydrotest pipe shipped for Rosneft (96 RUR mln)

• Procurement of equipment for construction of long-length pipes

(198 RUR mln).

• Technical upheavals and capital improvements for construction

of cold shaped pipes (215 RUR mln)

Maintenance projects of the company included:

• Rimera – oilfield services division of the company; charges

attributed to the leasing of equipment to customers which more

than doubled Y-o-Y (1,756 RUR mln)

• Pipe division maintenance works (987 RUR mln)

• Other maintenance works across ETERNO, MSA, SOT & Meta

(301 RUR mln)

YEAR-ON-YEAR DYNAMICS MAIN CAPEX EVENTS

(33%)

Total: 6 941

RUR mln

Total: 4 658

RUR mln

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88,9%

11,1%

Long term Short term

95,1%

4,9%

Fixed Floating

CHELPIPE DEBT STRUCTURE1 FITS ITS NATURE

OF THE BUSINESS AND CAPITAL STRUCTURE

21

88,3%

5,4% 4,8% 1,6%

Government banks Bonds Foreign banks Other banks

Total debt:

RUR bln 91.1

CURRENCY DENOMINATION INTEREST RATE

CREDITOR BREAKDOWN DURATION BREAKDOWN

93,3%

6,7%

Rubles Foreign currency

1. The syndicated loans were refinanced in January (more info on slide #23); debt structure as of 31.01.2017

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14,8

9,3 7,3 11,0

16,8 12,9 12,0

24,1

2017 2018 2019 2020 2021 2022 2023

RU

B b

ln

Cash Debt due

DELEVERAGING AND IMPROVEMENT OF LOAN

PORTFOLIO DURATION ARE KEY OBJECTIVES OF

FINANCIAL POLICY

22

TOTAL DEBT REPAYMENT SCHEDULE1 CREDIT RATINGS

DEBT AND LEVERAGE DYNAMICS AS OF 31.12.2016

Rating

agency Credit rating Outlook

Last rating

action

Moody’s Ba3 Stable 7/12/2016

Fitch BB- Stable 7/12/2016

100,5 99,4 94,1 91,1 97,4 94,0

86,1 76,2

5,4x

4,1x

3,0x 2,7x

2013 2014 2015 2016

RU

R b

ln

Total debt Net debt Net debt / EBITDA

Total debt:

RUR bln 91.1

1. The syndicated loans were refinanced in January (more info on slide #23); debt structure as of 31.01.2017

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COMPLETION OF REFINANCING OF

SYNDICATED LOANS

23

25%

22%

19%

12%

5%

4%

13%

Syndicated loans Sberbank

VTB Bank

Gazprombank

Alfa Bank

FK Otkritie

Raiffeisen Bank

Other banks (7banks)

42%

42%

16%

New loans

Gazprombank

Bank VTB

Sberbank

8,5 11,0

56,2

3,5 5,8 9,7 10,8 12,9 12,0 24,1

2017 2018 2019 2020 2021 2022 2023

Syndicated loans New loans

78,9

RUR bln

The Company mitigated the possible

liquidity risk in 2019 +46,5

CHANGES IN THE STRUCTURE OF LONG-TERM LOAN PORTFOLIO

OPTIMIZED REFINANCED DEBT PAYMENT SCHEDULE

78,3

RUR1 bln

(1) Incl. principal debt and capitalized interest

RUR bln

• In January 2017 the Company managed to

restructure the majority of its loan portfolio (in

the form of the syndicated loans)

• Chelpipe signed three bilateral credit facilities

with three leading state banks and strategical

partners to the company

• The Company managed to bring down liquidity

risk and significantly extend the duration of the

loans payable while also reducing the

proportion of its assets pledged as collateral

2017 2018 2019 2020 2021 2022 2023

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SECTION IV

Appendix

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IFRS STATEMENTS

25

RUR bln As at 31 December 2015 As at 31 December 2016 Adjustments after

reporting period1

Cash & cash equivalents 8.0 14.8

Current assets 58.4 67.9

Non-current assets 78.6 74.1

Total assets 137.0 142.0

Current liabilities 47.6 120.91 45.2

Non-current liabilities 81.11 7.8 83.5

Total liabilities 128.7 128.7

Total shareholder’s equity 8.3 13.3

Total equity + total liabilities 137.0 142.0

Summary Balance Sheet

(1) At 31 December 2016, long-term liabilities under the syndicated loan agreement were reclassified to short-term liabilities as in December 2016 the Company sent the irrevocable

notice of early repayment of the syndicated loan in the amount of 75.7 RUR bln

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IFRS STATEMENTS CONT’D

26

Summary Income statement

RUR bln 2015 2016

Revenue 148.3 135.5

COS (105.9) (95.5)

EBITDA 28.9 27.9

Margin (%) 19.5 20.6

Profit from operations 21.4 19.7

Margin (%) 14.4 14.5

Earnings before tax 8.5 9.0

Margin (%) 5.7 6.6

Net income 6.0 6.4

Margin (%) 4.1 4.7

Basic EPS (RUR/share) 19.4 21.9

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IFRS STATEMENTS CONT’D

27

RUR bln 2015 2016

Profit before income tax 8.5 9.0

Adjustments for depreciation and amortization 7.5 8.2

Adjustments for finance costs 12.8 12.6

Operating cash flows before working capital changes 29.6 28.4

Cash generated from operations (after interest) 12.0 13.4

Purchase of PPE (6.6) (4.2)

Net cash used in investing activities (6.8) (4.5)

Proceeds from borrowings 3.1 18.4

Repayment of borrowings (9.4) (19.6)

Net cash used in financing activities (2.8) (1.8)

Net increase in cash & cash equivalents 2.6 6.8

Cash & cash equivalents at beginning of period 5.5 8.0

Cash & cash equivalents at end of period 8.0 14.8

Free cash flow to firm 5.4 9.2

Summary Cash Flow Statement