2q2017 ifrs results - gazprom€¦ · 2q2017 ifrs results disclaimers this presentation has been...

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below this line 2Q2017 IFRS RESULTS

2Q2017 IFRS RESULTS

AUGUST 30, 2017

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Alexander Ivannikov

Head of Department

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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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45.6 49.8

43.8 48.8

0

20

40

60

2q16 2q17

BRENT URALS

HIGHLIGHTS

Source: Company data, Bloomberg, Bank of Russia website 1 OC - Other countries: including LNG sales

65.9

57.1 64.3

59.1

0

20

40

60

80

2q16 2q17

USD/RUB AVERAGE RATE

USD/RUB AS OF THE END OF PERIOD

USD/RUB USD/bbl

Market environment in 2q16 vs 2q17

Apr.

2017

• Nord Stream 2 financing agreements signed with ENGIE, OMV,

Shell, Uniper and Wintershall

• Gazprom placed GBP 850 mn Eurobonds

May

2017 • Construction of TurkStream’s offshore section commenced

Jun.

2017

• Pipe-laying of TurkStream gas pipeline in deep water commenced

• AGM approves RUB 8.0397 dividends per share (+2% YoY)

Jul.

2017

• Supplementary Agreement signed with China to supply gas via

Power of Siberia starting December 20, 2019

• Gazprom placed CHF 500 mn Eurobonds

Aug.

2017

• First foundation laid for Amur GPP

• +40% to access of OPAL pipeline

• Strong gas export volumes to Europe – 118 bcm from 1 Jan to

15 Aug (+12% YoY)

• Daily record of August gas transportation volumes to Europe

(590 mncm per day)

USD/mcm

172.6

192.4

0

50

100

150

200

2q16 2q17

AVERAGE GAZPROM GAS SALES

PRICE IN EUROPE & OC

3,739 3,646

0

1,000

2,000

3,000

4,000

2q16 2q17

AVERAGE PRICE IN RUSSIA

RUB/mcm

1

5

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1,395

349

48

330 341

11

2,292

-300

0

300

600

900

1,200

1,500

1,800

2,100

2,400

Total net sales Adj. EBITDA Net profit Capex Operating CF FCF Net debt1 2 3

+138%

4

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 2Q17 IFRS FINANCIAL RESULTS

+5%

+33%

+19%

+40%

2q16 vs 2q17

RUB bn

RUB bn

(80%)

+15%

*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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11.3 12.1 12.5 11.9 12.1

0.0

5.0

10.0

2q16 3q16 4q16 1q17 2q17

3.7 3.7 4.2 4.1 3.9

0.0

1.0

2.0

3.0

4.0

5.0

2q16 3q16 4q16 1q17 2q17

Crude oil Gas condensate

Gazprom Group’s volumes produced in Russia

Calculations may differ due to rounding.

mt mt +4% +8%

PRODUCTION

33.7 35.2

45.7 44.8

35.2

0

10

20

30

40

50

2q16 3q16 4q16 1q17 2q17

17.7

10.6

45.9 49.5

21.5

0

20

40

60

2q16 3q16 4q16 1q17 2q17

Electricity Heat

bn kWh mn Gcal +5% +21%

83.9 89.0

134.1 127.2

106.1

0.0

50.0

100.0

150.0

2q16 3q16 4q16 1q17 2q17

Natural gas

bcm +26%

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34 30

75 82

42

3,739 3,677 3,848 3,820 3,646

0

1,000

2,000

3,000

4,000

0

25

50

75

100

2q16 3q16 4q16 1q17 2q17

VOLUMES AVERAGE PRICE IN RUSSIA

51 52 67 66

54

173 159

178 191 192

0

50

100

150

200

0

20

40

60

80

2q16 3q16 4q16 1q17 2q17

VOLUMES AVERAGE PRICE IN EUROPE & OC

GAS SALES

129 110

289 312

154

0

100

200

300

2q16 3q16 4q16 1q17 2q17

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

465 418

593 594

460

0

200

400

600

2q16 3q16 4q16 1q17 2q17

NET SALES TO EUROPE & OC

RUB bn

bcm

6 6

11 13

6

151 141

152 155 160

0

50

100

150

0

5

10

15

2q16 3q16 4q16 1q17 2q17

VOLUMES AVERAGE PRICE IN FSU

50 48

95 102

49

0

50

100

2q16 3q16 4q16 1q17 2q17

NET SALES TO FSU

bcm USD/mcm USD/mcm

1

Russia Europe & OC2 FSU

3,4 3,4

RUB bn

+19% (1%) (2%)

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34%

59%

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

457 498

542 533 522

0

200

400

600

2q16 3q16 4q16 1q17 2q17

89 86

159 160

103

0

50

100

150

200

2q16 3q16 4q16 1q17 2q17

RUB bn

+16%

2Q16 2Q17

+14%

Electricity and heat Crude oil and gas condensate; refined products

37%

56%

7%

CRUDE OIL AND GAS CONDENSATE; REFINED

PRODUCTS

GAS BUSINESS AND OTHER REVENUES

ELECTRICITY AND HEAT

RUB bn

9

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1,262

1,641

1,369

724

652

0

400

800

1200

1600

2014 2015 2016 6M16 6M17

Cash Capex

1 CapEx breakdown as provided in Management Report

CAPITAL EXPENDITURES

+30% (17%)

(10%)

RUB bn

32%

32%

13%

18%

3% 2%

TRANSPORT

PRODUCTION OF CRUDE OIL AND GAS CONDENSATE

PRODUCTION, DISTRIBUTION AND STORAGE OF NATURAL GAS

REFINING

ELECTRICITY AND HEAT

OTHER CAPEX

The Group’s 1H17 Capex breakdown1

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According to Gazprom 2q17 IFRS report1:

BANK DEPOSITS

Key features of bank deposits2:

• Early withdrawal clause

• Deposit term of over 3 months

• Are NOT included in Сash and cash equivalents

Impact of substantial increase in bank deposits:

• 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

127 144

472 503

5 42

41 1

0

200

400

600

2015 2016 1q17 2q17

LT DEPOSITS

ST DEPOSITS

RUB bn 513

186 132 XX

TOTAL DEPOSITS

1 Source: Gazprom 2Q17 IFRS report, page 18 2 Reported as a part of Other current assets and Other non-current assets

In 2q17 Gazprom substantially increased

bank deposits volumes

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

3 Affected by ST deposits

504

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KEY DEBT METRICS

2Q2017 adjusted Net Debt structure2

Total Debt breakdown by currency Total Debt and Net Debt

Cash & equivalents breakdown by currency

1,113 1,651

2,083 1,933 2,292 689

1,038

1,359

897 780 0.5

0.6

0.9

1.6 1.6

0.0

0.5

1.0

1.5

0

2,000

4,000

6,000

2013 2014 2015 2016 2q17

NET DEBT CASH & EQUIVALENTS NET DEBT/ADJ.EBITDA LTM

RUB bn

1

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

18%

USD

42% EUR

37%

Other

3%

RUB

40%

USD

31%

EUR

21%

Other

8%

3,072

-780

2,292

-503

-1

1,788

1.6

1.3

0

0.5

1

1.5

0

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

1

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ADDITIONAL INFORMATION

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RUSSIAN NATURAL GAS BALANCE

Bcm 2Q2016 2Q2017 1H2016 1H2017

Natural gas resources 146.3 169.8 349.3 387.1

Domestic gas production 138.3 160.4 308.0 342.6

Other sources. including gas from Central Asia and Azerbaijan 5.3 6.1 11.0 12.4

Gas from underground storage facilities in Russia, Latvia and Europe 1.7 2.2 28.4 30.1

Decrease in gas volumes of within the gas transportation system 1.0 1.1 2.0 1.9

Natural gas distribution 146.3 169.8 349.3 387.1

Domestic consumption 85.4 94.4 228.4 243.3

including needs of the gas transportation system

and underground storage facilities 5.6 7.5 14.4 18.0

Gas pumped into underground storage facilities 10.0 19.8 10.0 20.0

Gas for LNG production 3.5 3.6 7.1 7.8

Foreign supplies 41.1 45.2 86.1 97.5

FSU supplies 5.5 5.8 15.8 16.8

Increase in gas volumes of within the gas transportation system 0.8 1.0 1.9 1.7

Source: Company Operating Data

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THANK YOU!

2q2017 ifrs results - gazprom€¦ · 2q2017 ifrs results disclaimers this presentation has been...

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