HMS GroupInvestor presentation

June 2017

HMS GROUP AT A GLANCE

Overview

HMS Group is a large industrial machinery producer – theleading manufacturer of industrial pumps and compressors inRussia and the CIS

12 manufacturing facilities in Russia, the CIS and Germany and6 R&D centers, including one of the largest pump-testingfacilities in Europe

Leading market positions in industrial pump production and oil& gas equipment markets, which are characterized by highentry barriers

Experienced integrated management, sales and R&D teams.Top-management of HMS Group leads the company since itsestablishment in 1993

Key financials 2011 – 2016

25.531.5 32.4 32.4

37.341.6

5.6 6.1 5.2 5.3 7.4 6.4

21.8% 19.4% 16.2% 16.3% 20.0%15.3%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

0

10

20

30

40

50

60

2011 2012 2013 2014 2015 2016

Revenue EBITDA EBITDA margin

Key industries: oil & gas, nuclear and thermal power generation, petrochemistry and wastewater industry

Top-notchclients: Transneft

Rub bn

2

Industrial pumps

38% of total Revenue 2016 FY

43% of total EBITDA 2016 FY

Engineering, manufacturing and installation ofpumps and pump related products

Compressors

21% of total Revenue 2016 FY

10% of total EBITDA 2016 FY

Design, engineering, manufacturing, deliveryand installation of compressors, compressorpackages and compressor stations

Source: HMS Group, Revenue and EBITDA 2007-2013 are adjusted for Sibkomplektmontazhnaladka, which was divested in 2013

Oil & gas equipment and projects

36% of total Revenue 2016 FY

48% of total EBITDA 2016 FY

Manufacturing and installation of oil & gasequipment, including modular: pump stations,metering equipment, oil, gas, and waterprocessing units, tanks, vessels and etc.

• Focus on core products• Entering new markets• Optimization of the

business portfolio

HMS GROUP EVOLUTION

2013-Present

HMS Group enjoys the largest installed base in Russia

Pump-and-Compressor-basedintegratedsolutions

2012

Pump-based integrated solutions

2009-2012

Oil & gasconstruction

2007-2008

Modularequipment design& manufacturing

2004-2006

Pump design & manufacturing

2003

Pump trading

1993-2002

87%98%

57%

87%70%

13%

2%

43%

13%30%

0%

20%

40%

60%

80%

100 %

120 %

Oil upstream(Water

injectionpumps)

Oil pipelinepumps,

Transneft

Thermalpower

generationpumps

Water wellpumps

Nuclearpower

generation -feed pumps

HMS Group Other

Upstream MidstreamThermalenergy

WaterNuclear energy

Oil & gas

Optimization of the business portfolio3 HMS entered oil & gas infrastructure construction segment in 2007 with a view to offer

integrated solutions Following the financial crises, this segment saw a sharp decrease in profitability HMS Group decided to exit the segment and continues to develop Engineering and

Procurement (“EP”) business, based on HMS products and engineering competences

Mature business platform1 HMS Group business is based on the mature and established business platform with a focus

on products where the Company has unmatched R&D expertise and production capabilities The company has stable recurring business with confirmed order backlog for the next year EU presence: HMS Group has access and is conducting business with EU engineering

companies (Siemens, Alstom, etc.) through its EU-based subsidiary Apollo Goessnitz Business is to be further developed organically, i.e. currently there are no plans for M&A Further development will be held with low CAPEX at ca. 1.5x of D&A level

Source: Frost & Sullivan, HMS Group

Growing market share in traditional and expanding into new markets

3

Entering new markets2 Further development of business with Gazprom & other majors in oil & gas industry by

executing large customized projects in all key segments of HMS Group Customers in new markets are already a part of the client base and offer strong future

opportunities Return to the market of oil transportation on the back of localization of trunk line pumps in

Russia Oil & gas refining and petrochemicals represents another growth area with expanded

strong references, incl. international engineering majors

Evolution and development of the core products expertise

Business platform and core expertise are established and provide strong base for future growth

Source: HMS Group

Advanced R&D is the basis for value-added integrated solutions

4

Recurring businessIntegrated solutions & highly

customized equipment

Size Numerous small-size contracts Single large-scale project

Impact of R&D Medium Critical

Technological entry-barriers Medium High

Competition type Price R&D and references

Competition level High Limited

Revenue growth potential Limited High

Revenue downside potential Limited Visibility for at least 1.5 years

Repeat business Very significant Possible

Aftermarket demand Average High

EBITDA margin Average Higher than average

Share of revenue generated by large projects

BUSINESS MODEL: COMBINATION OF LARGE INTEGRATED PROJECTS & RECURRING BUSINESS

Super-blocks X-9001, X-9004 for Vankor oilfield, RosneftProject and designing stage

ESPO-1 oil transportation station, TransneftProject and designing stage

Examples of large integrated projects

Source: HMS Group

Development stage Completion stage Development stage Completion stage

75%66%

73%88%

80%73% 75%

23%

29%24%

13%20%

27% 25%

2010 2011 2012 2013 2014 2015 2016

Revenue from large integrated projects

Revenue from recurring business

RECENT PROGRESS IN DEVELOPMENT OF EXPORT BASE AS A RESULT OF 5-YEAR LONG PROGRAM

5

Iraq

Iran

Europe / European EPC-companies (Apollo)

International EPC-companies in Russia & CIS

Nuclear power1

Other regions2

Special pumps

Standard pumps

Europe (via Apollo brand) and Middle East

Compressors

Iran

Activities already completed Target markets by geography

Significant progress in tailoring existing products to the requirements of international customers

International sales offices setup in Milan Dubai and Teheran (Iran), expanded existing sales teams in Russia, Ukraine and Germany

Registration in Approved Vendor List of major international clients

Reference contracts awards by leading global oil & gas operators and EPC contractors

Apollo acquisition and integration into HMS Group

1) Sales by group company Nasosenergomash Sumy (“NEM”) to international projects of RosatomGroup

2) Other Middle East countries (Kuwait, Saudi Arabia), South America, Northern Africa, South-Eastern Asia

3) International Electrotechnical Commission

Apollo and HMS Group major international clients

Power & Metallurgy

Oil & gas

Chemicals& other industries

Source: HMS Group

Rosneft, 16%

Gazprom Neft, 16%

Gazprom, 14%

Transneft, 6%

41.6 bn RUB

CUSTOMER BASE DEVELOPMENT

*China Nuclear Energy Industry Corporation, Project in nuclear power generation industry** SurgutneftegazSource: HMS Group

% of revenueAmount, mn RUB

Top-10 customers 66% 27,336

Other customers 34% 14,246

Total 100% 41,582

Revenue breakdown by clients 2016 FY

6

Well-diversified client base of 5,000 names

Strong and stable base of “Blue-chip” clients, that includes the largest oil & gas companies in Russia

Largest clients operate through numerous contracts in different subsidiaries, taking independent purchasing decisions. Therefore client diversification

by legal entities (right chart) is much higher than client diversification by group of companies (left chart)

The largest installed base in key segments ensures sustainable recurring business

Cross-sale: HMS Group sells to its existing client base additional equipment, that is new to the clients’ business

Significant growth potential from new markets (please see slides 7)

Revenue breakdown by industries 2016 FY

Source: HMS Group

CNEI*, 1%

Sibur, 1%

Slavneft, 1%

Lukoil, 2%

KMPO, 4%

SNG**, 4%

Others, 34%

Oil extraction, 36%

Petrochemicals, 25%

Other industries, 4%

Metals & mining, 1%Nuclear power, 2%Thermal power, 3%Water supply, 5%

Oil transport, 10%

Gas recovery & transport, 14%

41.6 bn RUB

LEADER IN BOTH LARGE PROJECTS AND STANDARD PRODUCTION SEGMENTS

Established top player in large scale projects (with “blue-chip” client base)

Company enjoys sustainable recurring business from standard pumps and compressors with over 5,000 clients

WELL-DIVERSIFIED QUALITY CLIENT BASE

Over 5,000 small and medium clients generate ca. 75% of revenues

The blue-chip client base covering nearly all oil & gas majors

Largest clients operate through numerous contractsin different subsidiaries, taking independent purchasing decisions and offering numerous points of entry

MARKET SHARE AND INSTALLED BASE

HMS is a major player in pumps, oil & gas equipment and compressors, with large-to-dominant market shares and established relations with clients (including follow-on services)

The largest installed base in Russia

DELIVERY OF MISSION-CRITICAL EQUIPMENT

Crucial to clients: installed at the final stage of construction projects and difficult to replace

Affordable within clients’ project budgets: equipment accounts for less than 2-3% of total project CAPEX

As a result, clients do not postpone their purchases or negotiate equipment prices down

WELL ESTABLISHED BUSINESS PLATFORM/

LOW LEVERAGE

MANAGEMENT FOCUSES ON MAINTENANCE OF MODERATE DEBT POSITION

Current Net debt / EBITDA ratios of around 1.8x are conservative and are in line with BBB/BB rating categories

Naturally hedged: match in revenues, costs and debt currency structures – ca. 98% of debt is Ruble denominated

Short-term debt remains at low levels and is actively managed

FACTORS OF BUSINESS SUSTAINABILITY

7

LOW CAPEX NEEDS AND FLEXIBLE DIVIDEND POLICY

Fully invested business – modest maintenance CAPEX needs at ca. 1.5x of D&A level

All major acquisitions have already been completed

No strict dividend commitments allow to minimize payments during harsh market environment

1 2

3 4

5 6

GROWTH DRIVERS FOR 2017 AND LONG-TERM

8

GAZPROM & OTHER MAJORS’ PROJECTS IN OIL & GAS INDUSTRY

Compressors (compressor business segment) Pumps Pressure vessels Technological oil & gas engineering (EP* contracts)

OIL TRANSPORT

Return to the market of oil transportation on the back of localization of main line pumps in Russia

EXPORT

International sales based on already developed product lines, secured references and integration of Apollo (German subsidiary)

Sales to the CIS countries through development of more focused sales structure

OIL & GAS REFINING ANDPETROCHEMICALS

Expanded strong references in oil & gas refining and chemicals, incl. international engineering majors

Enhanced product range of pumps, compressors, pressure vessels according to API and ASME

ENGINEERING (EP) IN OIL & GAS

Capitalizing on and further development of expertise in oil & gas upstream technological engineering

API PUMPS

A full-scale line of pumps for oil & gas applications according to international standards has been already developed for:

– International sales– Oil & gas refining and petrochemical

industries in Russia

COMPRESSORS

Integration, transformation & modernization of KKM is starting to deliver EBITDA growth

LOCALIZATION OF TECHNOLOGIES TO BENEFIT FROM IMPORT SUBSTITUTION

Localization of Ukrainian and German pumps in Russia (oil transport, oil refining, thermal & nuclear power generation pumps, heavy pumps for water)delivers cost savings

GROWTH

OF HMS

MARKET SHARE

IN INDUSTRIAL & GEOGRAPHICAL BREAK-DOWN

Growth markets Key products & technologies

* Engineering & Procurement

HMS GROUP TO LEVERAGE ON ALREADY ACQUIRED COMPETENCES AND THEIR FURTHER DEVELOPMENT

9

CORPORATE GOVERNANCE

HMS Group has a stable and long-term composition of its

Board of Directors and top-management:

HMS Group is the core business of the largest

shareholders

CEO and CFO are one of the founders of the Company

and they manage HMS Group since its establishment in

1993

HMS’ 18 managers purchased c. 3.6 percent share within

2016-2017 under the Buy-back program

HMS Group Board of Directors consists of three Executive

Directors and five Non-executive Directors, including two

Independent Directors

As a general rule, the Company targets to pay out ca. 50% of

the Profit attributable to Shareholders of the Company

subject to capital constraints such as debt and liquidity

position and forecasts

HMS Group plans to pay out dividends twice a year

Litigations involving the company:

Grigorishin’s Litigation: no changes since the last

announcement (April 2014)

Tsoy’s Litigation: all claims were withdrawn in June 2016.

The company was not required to pay anything in

connection with this litigation

Source: HMS Group, as at 30 September 2016

The Board of Directors Comments

Yury SkrynnikExecutive Director

ShareholderIn company since 2005

Nikolay YamburenkoChairman of the BoardNon-executive Director

ShareholderIn company since 2003

Philippe DelpalIndependent

Non-executive Director

Andreas PetrouNon-executive

Director

Gary YamamotoIndependent

Non-executive Director

Artem MolchanovExecutive Director

Managing Director (CEO)Shareholder

In company since 1993

Kirill MolchanovExecutive Director

First Deputy CEO (CFO)Shareholder

In company since 1993

Vladimir LukyanenkoNon-executive

DirectorShareholder

10

Treasury shares3.9% Management

28.0%

Vladimir Lukyanenko27.4%Free-float

21.0%

German Tsoy19.8%

Shareholding structure by legal entities Shareholding structure by holders (effective share)

Share in HMS Group

Managers and persons closely associated with management 28.0%

Vladimir Lukyanenko 27.4%

Other GDRs holders (Free-float) 21.0%

German Tsoy 19.8%

Treasury shares 3.9%

Share in HMS Group

HMS Technologies 71.5%

GDR Holders, where: 24.6%

- managers and persons closely associated with management 3.6%

- other GDRs holders (Free-float) 21.0%

Treasury shares 3.9%

HMS Technologies71.5%

Free-float21.0%

Management3.6%

Treasury shares3.9%

GD

R H

old

ers

SHAREHOLDING STRUCTURE

Source: HMS Group, as of June 15, 2017

HMS Dividends, Rub mn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E

Net income (NI) 491 330 83 1,581 3,377 2,342 2,073 -1,575 1,764 1,198 -

Dividend for previous year 222 292 160 320 0 1,500 792 393 0 954 962

Div/NI previous year n/a 59% 49% 385% 0% 44% 34% 19% 0% 54% 80%

Dividend yield 9.7%

HMS DIVIDENDS & MULTIPLES

HMS Dividends track record, 2007 – 2017E

Source: Bloomberg, as of 19/06/2017 11

P/E 2017 EV/EBITDA 2017

HMS Group 4.38 3.74

Pumps

EBARA CORP 36.53 11.88

FLOWSERVE CORP 26.91 14.87

KSB AG 14.69 3.43

Sulzer 27.10 12.41

Weir 20.43 13.40

ave 25.14 11.20

Compressors

ATLAS COPCO 22.88 14.04

BURCKHARDT COMPRESSION 30.04 16.77

INGERSOLL-RAND 20.55 12.65

ave 24.49 14.48

Multiples according to Bloomberg (not HMS’ forecasts)

Source: Company data

Financial results

Business & Outlook

12

1,306 1,650 1,968 3,670 5,562 6,101 5,238 5,272 7,446 6,369

11.4%

14.1%

16.4%18.0%

21.8%

19.4%

16.2% 16.3%

20.0%

15.3%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA adj., Rub mn EBITDA margin

11,505 11,668 12,032 20,379 25,515 31,460 32,358 32,351 37,296 41,582

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

2016 FY 2015 FY chg, yoy

Revenue 41,582 37,296 11%

Gross profit 10,784 11,514 -6%

EBITDA 6,369 7,446 -14%

Operating profit 3,624 4,525 -20%

Profit for the year 1,198 1,764 -32%

Profit for the year adj.* 1,587 2,148 -26%

Gross margin 25.9% 30.9% -494 bps

EBITDA margin 15.3% 20.0% -465 bps

Operating margin 8.7% 12.1% -342 bps

Net income margin 2.9% 4.7% -185 bps

Net income adj. margin 3.8% 5.8% -194 bps

Total debt 16,336 15,884 3%

Net debt 13,347 12,388 8%

EBITDA LTM 6,369 7,446 -14%

Net debt to EBITDA LTM 2.10 1.66

ROCE adj. 14.0% 16.9% -297 bps

ROE 9.5% 14.1% -456 bps

2016 FY: FINANCIAL HIGHLIGHTS

Financial highlights, Rub mn Revenue performance, 2007–2016

EBITDA performance, 2007–2016

CAGR 2007-2016: 15%

Source: Company data

Source: Company dataSource: Company data, management accounts* Profit for the year adjusted by Impairment of PPE and investment property and Impairment of goodwill

13

CAGR 2007-2016: 19%

15,218 15,144

3,246 3,032

21.3% 20.0%

2015 FY 2016 FY

Revenue OGE, Rub mn EBITDA OGE, Rub mn EBITDA margin OGE, %

Revenue 0% yoyEBITDA -7% yoy

2,6172,297

180

-75

6.9%

-3.2%

2015 FY 2016 FY

Revenue EPC, Rub mn EBITDA EPC, Rub mn EBITDA margin EPC, %

4,183

8,700

315 619

7.5% 7.1%

2015 FY 2016 FY

Revenue Compressors, Rub mn EBITDA Compressors, Rub mn EBITDA margin Compressors, %

17,92516,724

4,0982,755

22.9%

16.5%

2015 FY 2016 FY

Revenue Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA margin Pumps, %

2016 FY: SEGMENTS OVERVIEW

Revenue -7% yoyEBITDA -33% yoy

EPCCompressors

– Revenue decreased by 7 percent yoy to Rub 16.7 bn

– EBITDA down by 33 percent yoy and EBITDA margin declined to 16.5%

– Absence of large contracts was the main reason of decrease in the segment’s financial results

– Revenue almost unchanged, where recurring business almost compensated a drop in large contracts

– EBITDA was down by 7 percent to Rub 3 bn because of a lower share of large contracts in EBITDA

– EBITDA margin decreased to 20% because of a larger share of recurring business

– Revenue grew by 108 percent yoy and reached Rub 8.7 bn

– EBITDA increased to Rub 619 mn due to more large contracts in orders portfolio

– EBITDA margin remained almost the same, at 7.1%

– Revenue was down by 12 percent yoy

– EBITDA dropped by Rub 255 mn due to poor performance of both the construction and the project & design sub-segments

Oil & gas equipmentPumps

14

From 2015 onward, HMS Group will report a total segments’ revenue, incl. external and intersegment revenue, for more consistent demonstration of the performance of each separate segment

Source: Company data

Revenue +108% yoyEBITDA +96% yoy

Revenue -12% yoyEBITDA na

2016 FY 2015 FY chg, yoyGeneral and administrative expenses 4,523 4,603 -2%

% of revenue 10.9% 12.3%Labour costs 2,534 2,506 1%

% of revenue 6.1% 6.7%Social taxes 523 525 0%

% of revenue 1.3% 1.4%Taxes and duties 213 205 4%

% of revenue 0.5% 0.5%Other expenses 1,253 1,367 -8%

% of revenue 3.0% 3.7%

2016 FY 2015 FY chg, yoyDistribution and transportation expenses 1,700 1,378 23%

% of revenue 4.1% 3.7%Transportation expenses 577 437 32%

% of revenue 1.4% 1.2%Labour costs 484 440 10%

% of revenue 1.2% 1.2%Agency services 171 102 68%

% of revenue 0.4% 0.3%Other expenses 468 400 17%

% of revenue 1.1% 1.1%

Distribution and transportation costs up by 23 percent yoy, and as a percentage of revenue up to 4.1 percent from 3.7 percent last year

General and administrative expenses decreased by 2 percent yoy, and as a share of revenue declined to 10.9 percent

2016 FY 2015 FY chg, yoyCost of sales 30,799 25,783 19%

% of revenue 74.1% 69.1%Materials and components 19,817 16,080 23%

% of revenue 47.7% 43.1%Labour costs 4,588 4,542 1%

% of revenue 11.0% 12.2%Construction and design and engineering services of subcontractors

2,173 1,135 91%

% of revenue 5.2% 3.0%Other expenses 4,220 4,026 5%

% of revenue 10.1% 10.8%

2016 FY: COSTS

Cost of sales Comments

Distribution & transportation expenses

General & administrative expenses

Cost of sales grew by 19 percent yoy to Rub 30.8 bn from Rub 25.8 bn:

Materials and components increased by 23 percent yoy, and their share in revenue was up to 48 percent from 43 percent - the main reason was a change in the prevailing type of contracts, which became more material-intensive, in particular because of a specific nature of KKM’s contracts

* Herein, Materials & components and Labour costs were additionally derived from Change in work in progress and finished goods, thereby do not coincide with the note in the financial statement

Source: Company dataNote: Differences in calculations can occur due to the rounding-off rule

15

1,457

1,701

1,491 1,554

1.0x

1.1x

2015 FY 2016 FY

Organic capex, Rub mn Depreciation & amortization, Rub mn Capex to D&A ratio, x

634 665

6,8348,813

368 2,233

35 1,487

9,962

WC2014 FY

WC2015 FY

Inventorieschange

Receivableschange &other adj.

Depositschange

Payableschange &other adj.

WC2016 FY

Cash flow performance, Rub mn 2016 FY 2015 FY Change yoy

Operating cash flow 1,808 1,881 -4%

Investing cash flow -1,788 -1,431 25%

Free cash flow (FCF) 20 451 -95%

Financing cash flow -394 -1,594 -75%

Cash and cash equivalents 2,990 3,496 -14%

Comments Working capital 2015-2016 FY

Cash flow performance, Rub mn Capital expenditures2 2015–2016 FY

Working capital continued to increase due to execution of large integrated projects thought its share in revenue stayed almost unchanged

Despite working capital increase, HMS generated Rub 1.8 bn operating cash inflow

Organic capex2 increased by 17 percent yoy to Rub 1.7 bn, where Rub 665 mn of all HMS’ capital investments was channeled to the Localization project

Free cash flow stayed positive

Cash declined by 14 percent yoy, and amounted Rub 3 bn

2016 FY: CAPEX & Working Capital

Source: Company data

Source: Company data

1Working capital is calculated as Inventories plus Trade and other receivables, excluding Short-term loans issued, Bank deposits and Promissory notes receivable, plus Current income tax receivable minus Trade and other payables minus Short-term provisions for liabilities and charges minus Current income tax payable minus Other taxes payable adjusted by Dividends payable (Rub 393 mn) which emerged because of dividends announcement in Dec 2016 and their payment in Jan 20172 Capex = Organic capex = Purchase of PPE + Purchase of intangible assets

Note: Differences in calculations can occur due to the rounding-off rule

Source: Company data

24%of revenue

2015 FY

24%of revenue

2016 FY21%

of revenue2014 FY

Capex of Localization project

16

145

4,568

3,479

6,517

727

2017 2018 2019 2020 2021

Debt to be repaid as of mid-April, Rub mn

12,064 11,102 12,432 12,388 13,347

1.98 2.12

2.36

1.66

2.10

2012 2013 2014 2015 2016

Net debt, Rub mn Net debt to EBITDA LTM

Fitch Ratings at B+, ‘Stable’ outlook 2016FY Total debt increased by 3 percent yoy to Rub 16.3 bn 2016FY Net debt grew to Rub 13.3 bn 2016FY Net Debt-to-EBITDA ratio increased to 2.10x As of January 1, 2017, average interest rate decreased to 12.2% for all

loans and 12.4% for Rub-denominated only As of mid-April 2017, average interest rate was 11.0% for all loans,

and 11.2% for Rub-denominated only

Long-term debt96%

Comments

Debt repayment schedule, mid-April 2017

Source: Company data, management accounts

2016 FY: STABLE FINANCIAL POSITION

Source: Company data, IFRS accounts Source: Company data, management accounts

Net debt-to-EBITDA LTM ratio, 1 Jan 2017

Short-term debt4%

Credit portfolio structure, mid-April 2017

Raiffeisenbank 19.0%

Borrowings in FX2%

Borrowings in Rub98%

Sberbank 20.6%

VTB Bank 18.9%

17

UniCredit Bank 15.5%

FRP 3.2%

Others 3.4%

Source: Company data as of mid-April 2017, management accounts

Total debtRub 15.4 bn

on mid-Apr 2017Bonds 19.4%

3,670 5,562 6,101 5,238 5,272 7,446 6,369 6,985 6,235

18.0%

21.8%

19.4%

16.2% 16.3%

20.0%

15.3%

18.0%

14.8%

2010 2011 2012 2013 2014 2015 2016 2016 3mLTM

2017 3mLTM

EBITDA adj., Rub mn EBITDA margin

20,379 25,515 31,460 32,358 32,351 37,296 41,582 38,771 42,268

2010 2011 2012 2013 2014 2015 2016 2016 3mLTM

2017 3mLTM

2017 3m 2016 3m chg, yoy

Revenue 9,760 9,074 8%

Gross profit 2,047 2,091 -2%

EBITDA 1,047 1,181 -11%

Operating profit 557 491 14%

Profit for the year /period 77 21 272%

Gross margin 21.0% 23.0% -208 bps

EBITDA margin 10.7% 13.0% -229 bps

Operating margin 5.7% 5.4% 30 bps

Net income margin 0.8% 0.2% 56 bps

Total debt 15,842 16,356 -3%

Net debt 12,981 12,951 0%

EBITDA LTM 6,235 6,985 -11%

Net debt to EBITDA LTM 2.08 1.85

ROCE adj. 14.4% 16.3% -192 bps

ROE 0.6% 0.2% 46 bps

3m 2017: FINANCIAL HIGHLIGHTS

Financial highlights, Rub mn Revenue performance, 2010–2017 3m LTM

EBITDA performance, 2010–2017 3m LTM

CAGR 2010-2016: 13%

Source: Company data

Source: Company dataSource: Company data, management accounts

18

CAGR 2010-2016: 10%

4,3014,661

807447

18.8%

9.6%

2016 3m 2017 3m

Revenue OGE, Rub mn EBITDA OGE, Rub mn EBITDA margin OGE, %

Revenue +8% yoyEBITDA -45% yoy

340

12864

-53

18.7%

-41.5%

2016 3m 2017 3m

Revenue EPC, Rub mn EBITDA EPC, Rub mn EBITDA margin EPC, %

1,4511,653

60172

4.2%

10.4%

2016 3m 2017 3m

Revenue Compressors, Rub mn EBITDA Compressors, Rub mn EBITDA margin Compressors, %

3,1443,530

289576

9.2%

16.3%

2016 3m 2017 3m

Revenue Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA margin Pumps, %

3m 2017: SEGMENTS OVERVIEW

Revenue +12% yoyEBITDA +99% yoy

ConstructionCompressors

– Revenue increased by 12 percent yoy due to a number of middle-size recurring projects

– EBITDA up 99 percent yoy and EBITDA margin increased to 16.3% thanks to more sales of high-margin recurring products

– Revenue up by 8 percent yoy because of recurring business’ growth

– EBITDA down by 45 percent due to lower profitability of both large contracts and recurring business

– EBITDA margin decreased to 9.6%

– Revenue grew 14 percent yoy and reached Rub 1,653 mn

– EBITDA increased to Rub 172 mn due to more large contracts in portfolio

– EBITDA margin hit 10.4%

– Revenue was down 62 percent yoy

– EBITDA decreased by Rub 117 mn to minus Rub 53 mn

Oil & gas equipmentPumps

19Source: Company data2016 3m segments are reconciled according to new segments composition

Revenue +14% yoyEBITDA +185% yoy

Revenue -62% yoyEBITDA na

2017 3m 2016 3m chg, yoyGeneral and administrative expenses 1,057 1,038 2%

% of revenue 10.8% 11.4%Labour costs 576 540 7%

% of revenue 5.9% 6.0%Social taxes 141 134 5%

% of revenue 1.4% 1.5%Taxes and duties 48 46 6%

% of revenue 0.5% 0.5%Other expenses 291 319 -9%

% of revenue 3.0% 3.5%

2017 3m 2016 3m chg, yoyDistribution and transportation expenses 431 413 5%

% of revenue 4.4% 4.5%Transportation expenses 130 134 -3%

% of revenue 1.3% 1.5%Labour costs 126 117 8%

% of revenue 1.3% 1.3%Agency services 8 62 -87%

% of revenue 0.1% 0.7%Other expenses 167 99 68%

% of revenue 1.7% 1.1%

Distribution and transportation costs up by 5 percent yoy, and as a percentage of revenue stable at 4.4 percent

General and administrative expenses increased by 2 percent yoy, and as a share of revenue declined to 10.8 percent

2017 3m 2016 3m chg, yoyCost of sales 7,713 6,983 10%

% of revenue 79.0% 77.0%Materials and components 5,362 4,643 15%

% of revenue 54.9% 51.2%Labour costs 1,127 1,095 3%

% of revenue 11.6% 12.1%Construction and design and engineering services of subcontractors

212 301 -30%

% of revenue 2.2% 3.3%Other expenses 1,012 944 7%

% of revenue 10.4% 10.4%

3m 2017: COSTS

Cost of sales Comments

Distribution & transportation expenses

General & administrative expenses

Cost of sales grew by 10 percent yoy to Rub 7.7 bn from Rub 7.0 bn:

Materials and components increased by 15 percent yoy, and their share in revenue was up to 55 percent from 51 percent - the main reason was a change in the prevailing type of contracts, which were more material-intensive and less labour-consuming

* Herein, Materials & components and Labour costs were additionally derived from Change in work in progress and finished goods, thereby do not coincide with the note in the financial statements

Source: Company dataNote: Differences in calculations can occur due to the rounding-off rule

20

415

297

394376

1.1x0.8x

2016 3m 2017 3m

Organic capex, Rub mn Depreciation & amortization, Rub mn Capex to D&A ratio, x

185 56

6,8348,813 8,712

781

3,162 3,528

9,133

WC2014 FY

WC2015 FY

WC3m 2016 FY

Inventorieschange

Receivableschange &other adj.

Payableschange &other adj.

WC3m 2017 FY

Cash flow performance, Rub mn 2017 3m 2016 3m Change yoy

Operating cash flow 1,086 260 318%

Investing cash flow (289) (459) -37%

Free cash flow (FCF) 797 (199) -500%

Financing cash flow (894) 159 -662%

Cash and cash equivalents 2,861 3,405 -16.0%

Comments Working capital 2016 3m - 2017 3m

Cash flow performance, Rub mn Capital expenditures 2016 3m – 2017 3m

Working capital continued to increase because to execution of large projects though its share in revenue stayed unchanged at 22 percent

Despite working capital increase, HMS generated Rub 1.1 bn operating cash inflow

Organic capex decreased by 29 percent yoy to Rub 297 mn, where Rub 56 mn of all HMS’ capital investments was channeled to the Localization project

Free cash flow turned positive Rub 797 mn

Cash declined by 16 percent yoy, and amounted Rub 2.9 bn

3m 2017: CAPEX & Working Capital

Source: Company data

Source: Company data

Note: Differences in calculations can occur due to the rounding-off rule

Source: Company data

22%of revenue2016 3m

22%of revenue2017 3m

24%of revenue

2015 FY

Capex of Localization project

21

21%of revenue

2014 FY

139

4,659

3,479

7,089

205

2017 2018 2019 2020 2021

Debt to be repaid as of 01.05.2017, Rub mn

3m 2017 Total debt decreased to Rub 15.6 bn from Rub 16.4 bn 3m 2017 Net debt stood at Rub 13.0 bn 3m 2017 Net Debt-to-EBITDA LTM ratio increased to 2.08x

As of May 1, 2017, Average interest rate decreased to: 10.9% from 12.2% for all loans since 2017-beg, and 11.1% from 12.4% for Rub-denominated only

Long-term debt96%

Comments

Debt repayment schedule

Source: Company data, management accounts

3m 2017: STABLE FINANCIAL POSITION

Source: Company data, IFRS accounts Source: Company data, management accounts

Net debt-to-EBITDA LTM ratio

Short-term debt4%

Credit portfolio structure, mid-April 2017

VTB Bank 19.0%

Borrowings in FX3%

Borrowings in Rub97%

Sberbank 20.4%

Raiffeisenbank 18.8%

22

UniCredit Bank 15.4%

FRP 3.2%

Others 3.9%

Source: Company data as of mid-April 2017, management accounts

Total debtRub 15.6 bn

on 01.05.2017Bonds 19.3%

4,288 4,809 12,064 11,102 12,432 12,388 13,347 12,951 12,981

1.22

0.87

1.98 2.12

2.36

1.66

2.10

1.85

2.08

2010 2011 2012 2013 2014 2015 2016 2016 3m 2017 3m

Net debt, Rub mn Net debt to EBITDA LTM

Financial results

Business & Outlook

23

15,399 15,999

7,919

17,125 8,145

5,172

1,517

2,328 32,979

40,624

2015 FY 2016 FY

Industrial pumps Oil & gas equipment Compressors Engineering & procurement

10,075 10,318

5,716 8,512

6,915 3,476

1,702 1,730

24,409 24,035

2015 FY 2016 FY

Industrial pumps Oil & gas equipment

Compressors Engineering & procurement

2016 FY: BACKLOG & ORDER INTAKE

Source: Company data, Management accounts

Backlog 2015 FY vs. 2016 FY Order intake 2015 FY vs. 2016 FY

24

+4%

+116%

-36%

+53%

2015 FY 2016 FY

Total Backlog, where 24,409 -2% 24,035

Recurring business 19,542 +6% 20,630

Large integrated projects 4,866 -30% 3,406

2015 FY 2016 FY

Total Order intake, where 32,979 +23% 40,624

Recurring business 28,102 +15% 32,226

Large integrated projects 4,877 +72% 8,398

+2%

+49%

-50%

+2%

3.9

10.2

New contracts signed in 1Q 2017

1) Rub 3.9 bn contract: Delivery of compressor equipment. Kazankompressormash will produce major and accessory processing equipment for reconstruction of gas booster stations at the customer’s oil & gas condensate field. The equipment will be delivered in 2017- 2018.

2) Rub 10.2 bn contract: Delivery of oil & gas equipment for one of the largest gas fields in Russia. HMS Neftemash will manufacture and deliver a range of technologically integrated solutions, including helium concentrate membrane recovery units (skids 1st and 2nd stage), interstage compressor stations based on turbo-compressor units and gas booster stations, in the first quarter of 2018.

1)

2)-2%

+23%

23.3

2.7

2,855 3,427

5,429

14,044 3,429

4,903

244

121

11,957

22,495

2016 3m 2017 3m

Industrial pumps Oil & gas equipment Compressors Construction

9,759 10,147

8,324

18,351

8,884

6,819

494

719

27,461

36,036

2016 3m 2017 3m

Industrial pumps Oil & gas equipment Compressors Construction

3m 2017: BACKLOG & ORDER INTAKE

Source: Company data, Management accounts

Backlog 2016 3m vs. 2017 3m Order intake 2016 3m vs. 2017 3m

25

+20%

+159%

+43%

-51%

2016 3m chg 2017 3m

Total Backlog, where 27,461 31% 36,036

Recurring business 19,107 10% 21,107

Large integrated projects 8,355 79% 14,929

2016 3m chg 2017 3m

Total Order intake, where 11,957 88% 22,495

Recurring business 6,477 30% 8,394

Large integrated projects 5,480 157% 14,101

+4%

+120%

-23%

+46%

New contracts signed after the reporting date, in 2Q 2017

1) Rub 2.7 bn contact: Delivery of pumping equipment to Kursk Nuclear Power Station Phase-2

2) Rub 23.3 bn contract: Delivery of various equipment. HMS Group entered into an agreement for the supply in 2018-2020 of various equipment for reconstruction of technological facilities of a Gas Processing Plant located in the European part of Russia, with an aggregate purchase price of up to Rub 23.3 billion (c. US$ 415 million). The agreement remains subject to payment of advance by the buyer and further clarification of the scope of the equipment, terms of delivery and certain other conditions

2)

+31% +88%

1)

20,699 25,612

10,172

10,437 3,819

3,236 2,606

2,297 37,296

41,582

2015 FY 2016 FY

EPC revenue Export Large contracts Machine-building only recurring products

Source: Company data

2016 FY: HMS REVENUE STRUCTURE

Revenue contribution by the Top-7 clients Revenue structure by types

Others 39.8% Rosneft 17.6%

Gazprom Neft 15.9%

Rosneft 16.3%

Revenue Rub 37,296 mn

Revenue Rub 41,582 mn

2015 FY

Gazprom 15.4%

Gazprom Neft 10.6%

Others 37.8%

2016 FY

KMPO 3.7%

Lukoil 4.4%

Gazprom 14.2%

26

Tatneft 2.9%

Surgutneftegas 2.9%

Lukoil 1.9%

Transneft 6.5%

Note: Export in real pricesIn 2016, Export sales in nominal prices (rebased to 2015 FX rates) grew by 5% yoy and amounted to c.10% share of revenue

Comments

A stable number of large clients generates revenue from both large contracts and recurring business

Around 6 thousand of unique clients create a “safety cushion” with recurring business

In 2016, revenue grew mainly due to recurring business, while in 2017 we expect growth based on large contracts, both already signed and under preparation

In 2016, export decreased in terms of Ruble revenue and was stable in FX terms. We expect growth of export in 2017

We expect EPC to further demonstrate lackluster results in 2017

2017 guidance, due to new contracts signed:Revenue Rub 45-48 bnEBITDA Rub 6.2-6.8 bn

Transneft 5.9%Surgutneftegas 4.3%

Source: Company data

3m 2017: HMS REVENUE STRUCTURE

Revenue contribution by the Top-7 clients Revenue structure by types

Others 33.4% Gazprom Neft 30.5%

Gazprom Neft 18.1%

Rosneft 24.6%

Revenue Rub 9,074 mn

Revenue Rub 9,760 mn

2016 3m

Rosneft 11.2%

Others 29.9%

2017 3m

Transneft 2.4%

Transneft 3.1%

Gazprom 11.0%

27

Slavneft 2.7%

Stalkonstruktsya 2.1%

Surgutneftegaz 1.5%

Gazprom 11.0%

Comments

A stable number of large clients generates revenue from both large contracts and recurring business

Around 6 thousand of unique clients create a “safety cushion” with recurring business

In 2016, revenue grew mainly due to recurring business, while in 2017 we expect growth based on large contracts, both already signed and under preparation

In 2016, export decreased in terms of Ruble revenue and was stable in FX terms. We expect growth of export in 2017

We expect construction to further demonstrate lackluster results in 2017

Lukoil 6.0%

Surgutneftegaz 6.0%

Slavneft 6.6%

5,561 7,281

1,992

1,849 894

250 627

380 9,074 9,760

2016 3m 2017 3m

Machine-building only recurring products Large contracts

Export Construction & projects revenue

Source: Company data, Management accounts

Appendix

28

ONGOING MANAGEMENT ACTIVITIES

29

Special pumps

Further development of relations with existing and potential key clients:

‒ Oil & gas companies operating in MENA (BP, ENI, LUKOIL, etc.)

‒ EPC-companies (Italian, Korean)

‒ European packagers (GE, Siemens, GEA)

Standard pumps

Potential M&A’s / JV with European / Asian producers of pumps for water supply and wastewater (API)

Compressors

Potential M&A / JV with European / Asian producers of compressors

Development and promotion of combined “Apollo + NEM1” portfolio of pumps for thermal power

Offering of the new product lines of stainless steel end suction and borehole pumps:

‒ Further development of the existing product lines

‒ Investments in the production facilities in Livny, Russia

The company is constantly expanding its export capabilities on the back of existing platform:

Using a German brand Apollo for all sales in export markets

Utilizing cost advantages by transferring manufacturing of parts and complete products to Russia and Ukraine

Development of distribution channels:

‒ Opening of additional sales offices abroad (Milan, Dubai, Teheran, etc.)

‒ Increase headcount of sales and marketing personnel focused solely on the external markets

‒ Drawing in new partners on the established and new markets

ALL PRODUCT GROUPS

(1) “NEM” – HMS Group company Nasosenergomash Sumy

Sales development in Iran market

M&A and JV projects of HMS Group are flexible and subject to HMS Group capital constrainssuch as debt and liquidity position and forecasts

Source: HMS Group

Management activities

KEY DRIVERS OF EXPORT SALES DEVELOPMENT

30

Industry

Nuclear power

Thermal power

Oil & GasEurope

Oil & Gas International EPCsin Russia & CIS

Oil & GasIran

Oil & GasIraq

Oil & GasOther regions

Standard pumpsfor water supply

First contracts with several clients are already secured

Opening of sales office in 2016

Further development of distribution network: sales agents and local partners / packagers

Compressors sales development in Iran market

Further development of relations and participation in tenders of the current clients (BP, ENI, LUKOIL) and new clients as well

Expected resumptions of capex. First contract with BP signed

Development of relations with European and Korean EPC-companies:‒ Development of Italian sales office with focus on local EPCs‒ Development and promotion of combined “Apollo + NEM”: economy of scale + Ukrainian low-cost base

Utilization of German sales office to promote NEM/LGM product lines (with their production localized in Germany)

Utilization of additional sales opportunities:

‒ Well-developed relations with Russian major oil & gas companies

‒ Russian and German localization of selected products

Development of sales office in the Middle East: increase of employee headcount focused on other Middle East countries: Saudi Arabia, Kuwait, etc.

Opening of sales & promotion offices in the new geographical markets (Northern Africa, South America, South-Eastern Asia)

Development and promotion of combined “Apollo + NEM” portfolio of pumps for thermal power

Localization of Apollo pumps in Russia to increase price competitiveness

Sales office in Europe – hiring of the experienced KAM’s with perfect connections with the European thermal power majors

Industry sales will be driven by abroad projects of Rosatom Group

The current forecast of nuclear power segment (slide 4) is based on past regular sales of HMS Group to Rosatom Group, already signed contracts of HMS and Rosatom and project portfolio of Rosatom Group

Development and promotion of new product lines (stainless steel):

‒ End suction pumps (brand “Kordis”) and submersible pumps (brand “Ciris”), 4-8 inches

‒ Vertical multistage pumps

Opening / strengthening of sales offices in Europe and UAESource: HMS Group

Consolidated statement of Financial position at 31 Dec 2016

Note 31 December 2016 31 December 2015

ASSETS

Non-current assets:

Property, plant and equipment 7 13,908,291 14,161,704

Other intangible assets 8 712,527 984,280

Goodwill 9 2,863,925 3,466,063

Investments in associates 10 88,724 106,040

Deferred income tax assets 25 366,057 380,351

Other long-term assets 14 29,040 43,444

Investment property 15 233,994 244,247

Restricted cash - 23,219

Total non-current assets 18,202,558 19,409,348

Current assets:

Inventories 12 7,228,293 6,860,390

Trade and other receivables and other financial assets 13 14,021,896 11,701,492

Current income tax receivable 169,650 152,680

Cash and cash equivalents 11 2,989,691 3,496,420

Restricted cash - 2,573

Total current assets 24,409,530 22,213,555

TOTAL ASSETS 42,612,088 41,622,903

EQUITY AND LIABILITIESEQUITY

Share capital 23 48,329 48,329

Share premium 23 3,523,535 3,523,535

Treasury shares 23 (323,556) (213,489)

Other reserves 122,730 (191,585)

Currency translation reserve (607,393) 476,312

Retained earnings 6,348,279 6,180,042

Equity attributable to the shareholders of the Company 9,111,924 9,823,144

Non-controlling interests 2,972,005 3,325,643

TOTAL EQUITY 12,083,929 13,148,787

LIABILITIES

Non-current liabilities:

Long-term borrowings 16 12,770,486 11,217,538

Deferred income tax liability 25 1,579,152 1,534,031

Pension liability 17 519,397 566,475

Provisions for liabilities and charges 22 151,359 132,865

Other long-term payables 21 162,984 133,552

Total non-current liabilities 15,183,378 13,584,461

Current liabilities:

Trade and other payables 19 10,417,155 8,455,740

Short-term borrowings 16 3,565,875 4,666,626

Provisions for liabilities and charges 22 531,075 451,410

Redemption liability 37 - 326,759

Pension liability 17 72,621 69,538

Current income tax payable 53,278 142,323

Other taxes payable 20 704,777 777,259

Total current liabilities 15,344,781 14,889,655

TOTAL LIABILITIES 30,528,159 28,474,116

TOTAL EQUITY AND LIABILITIES 42,612,088 41,622,903

Consolidated statement of Profit or Loss for 2016 FY

Note 2016 2015

Revenue 26 41,582,388 37,296,437Cost of sales 27 (30,798,509) (25,782,590)Gross profit 10,783,879 11,513,847

Distribution and transportation expenses 28 (1,699,610) (1,377,995)General and administrative expenses 29 (4,523,183) (4,603,227)Other operating expenses, net 30 (547,886) (623,897)

Impairment of property, plant and equipment and investment property 7,15 (18,685) (383,472)Impairment of goodwill 9 (370,360) -Operating profit 3,624,155 4,525,256

Finance income 31 174,213 192,595Finance costs 32 (1,905,206) (2,086,920)Share of results of associates 10 (257) (467)

Profit before income tax 1,892,905 2,630,464

Income tax expense 25 (694,475) (866,289)

Profit for the year 1,198,430 1,764,175

Profit/(loss) attributable to:Shareholders of the Company 1,196,789 1,884,619Non-controlling interests 1,641 (120,444)Profit for the year 1,198,430 1,764,175

Other comprehensive (loss)/income:

Items that will not be reclassified to profit or loss

Remeasurement of post-employment benefit obligations 8,390 (158,400)

Items that may be reclassified subsequently to profit or lossCurrency translation differences (1,164,504) 51,868Currency translation differences of associates 10 (17,059) (11,332)Other comprehensive loss for the year (1,173,173) (117,864)Total comprehensive income for the year 25,257 1,646,311

Total comprehensive income/(loss) attributable to:Shareholders of the Company 106,559 1,817,172Non-controlling interest (81,302) (170,861)Total comprehensive income for the year 25,257 1,646,311

Basic and diluted earnings per ordinary share for profit attributable to the ordinary shareholders (RR per share) 23 10.53 16.34

Consolidated statement of Cash flows for 2016 FY

Note 2016 2015

Cash flows from operating activitiesProfit before income tax 1,892,905 2,630,464Adjustments for:Depreciation and amortisation 27-30 1,553,657 1,491,317Loss from disposal of property, plant and equipment and intangible assets 30 10,758 9,856Finance income 31 (174,213) (192,595)Finance costs 32 1,905,206 2,086,920Change in retirement benefits obligations 17 90,479 94,507Change in warranty provision 27 67,297 97,606Change in provision for impairment of trade and other receivables and other financial assets 29 38,179 112,237Change in provision for obsolete inventories 27 45,922 87,289Change in provision for legal claims 30 55,408 250,023Share-based compensation 24 28,840 -Impairment of goodwill 9 370,360 -Impairment of property, plant and equipment and investment property 7,15 18,685 383,472Impairment reversal of property, plant and equipment 30 (1,705) (6,160)Foreign exchange loss/(gain), net 30 65,031 (72,636)Loss on revaluation of redemption liability 30 17,960 136,392Change in provision for tax risks, other than income tax 29 13,096 -Impairment of taxes receivable 30 101,948 -Share of results of associates 10 257 467Operating cash flows before working capital changes 6,100,070 7,109,159Increase in inventories (833,072) (1,086,345)(Increase)/decrease in trade and other receivables (2,337,883) 578,408(Increase)/decrease in current income tax receivable (16,970) 4,235Decrease in taxes payable (19,916) (350,009)Increase/(decrease) in accounts payable and accrued liabilities 1,700,349 (1,277,293)Cash from operations 4,592,578 4,978,155Income tax paid (773,816) (1,091,049)Interest paid (2,036,200) (1,987,450)Decrease/(increase) in restricted cash 25,792 (18,204)Net cash from operating activities 1,808,354 1,881,452Cash flows from investing activitiesRepayment of loans advanced 63,073 35,515Loans advanced (187,837) (45,870)Proceeds from sale of property, plant and equipment and intangible assets 20,190 22,184Interest received 17,527 14,082Purchase of property, plant and equipment, net of VAT (1,566,691) (1,381,062)Acquisition of intangible assets, net of VAT (134,138) (75,687)Net cash used in investing activities (1,787,876) (1,430,838)Cash flows from financing activitiesRepayments of borrowings (10,117,158) (10,330,274)Proceeds from borrowings 10,756,815 9,127,120Proceeds from government grant 21 50,000 55,000Payment for finance lease (6,382) (2,474)Buy back of issued shares 23 (110,067) (12,284)Acquisition of non-controlling interest in subsidiaries (346,900) -Dividends paid to non-controlling shareholders of subsidiaries (40,798) (56,547)Dividends paid to the shareholders of the Company 23 (579,863) (374,380)Net cash used in financing activities (394,353) (1,593,839)Net decrease in cash and cash equivalents (373,875) (1,143,225)Effect of exchange rate changes on cash and cash equivalents and effect of translation to presentation currency

(132,854) 104,692

Cash and cash equivalents at the beginning of the year 3,496,420 4,534,953Cash and cash equivalents at the end of the year 2,989,691 3,496,420

CONTACTS

Company address:7 Chayanova Str.Moscow 125047Russia

Capital marketsPhone +7 (495) 730-66-01ir@hms.ruhttp://grouphms.com/shareholders_and_investors/

HMS Hydraulic Machines & Systems Group Plc is listed on the London Stock Exchange (Main market, IOB):

Identifier Number Number of shares outstandingISIN RegS: US40425X4079 117,163,427

144A: US40425X3089Ratio 1 GDR : 5 SharesTicker HMSGBloomberg HMSG LIReuters HMSGq.L

34

The information contained herein has been prepared using information available to HMS Group (“HMS” or “Group” or

“Company”) at the time of preparation of the presentation. External or other factors may have impacted on the

business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information

about HMS Group 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.

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 HMS Group 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 the major risk factors. This presentation should not be relied upon

as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to

these statements.

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 HMS Group, 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.

DISCLAIMER

35

Calculations and formulas

All figures in millions of Russian Rubles, unless otherwise stated

Management of the Group assesses the performance of operating segments based on a measure of adjusted EBITDA, which is derived from the consolidated financial statements prepared in accordance with IFRS

EBITDA is defined as operating profit/loss from continuing operations adjusted for other operating income/expenses, depreciation and amortisation, impairment of assets, excess of fair value of net assets acquired over the cost of acquisition, defined benefits scheme expense and provisions (including provision for obsolete inventory, provision for impairment of accounts receivable, unused vacation allowance, warranty provision, provision for legal claims, tax provision and other provisions). This measurement basis, therefore, excludes the effects of a number of non-recurring income and expenses on the results of the operating segments

EBIT is calculated as Gross profit minus Distribution & transportation expenses minus General & administrative expenses minus Other operating expenses

Total debt is calculated as Long-term borrowings plus Short-term borrowings

Net debt is calculated as Total debt minus Cash & cash equivalents at the end of the period

ROCE is calculated as EBIT LTM divided by Average Capital Employed (Total debt + Total equity)

ROE is calculated as Total equity period average divided by Profit for the period

Operating profit adj. & Profit for the year adj. are deferred as adjusted by impairment of PPE, investment property and goodwill

Working capital is calculated as Inventories plus Trade and other receivables, excluding Short-term loans issued, Bank deposits and Promissory notes receivable, plus Current income tax receivable minus Trade and other payables minus Short-term provisions for liabilities and charges minus Current income tax payable minus Other taxes payable

Capex = Organic capex = Purchase of PPE + Purchase of intangible assets

Backlog is calculated as the preceding backlog plus new or additional customer orders booked during the reporting period, less amounts of contract value booked as revenue under ‘‘Russian GAAP’’ on an unconsolidated basis under the relevant contracts, plus or minus adjustments made in the judgment of the Group’s management. The Group may also make certain adjustments to bookings to reflect amendment, expiry or termination of contracts, cancellation of orders, changes in price terms under contracts or orders, or other factors affecting the amount of potential revenue which the Group believes may be recognized under such contracts. The Group’s backlog estimates are not an indication of potential revenues. Actual revenues and other measures of financial performance under IFRS may differ materially from any estimate of backlog, and changes in backlog between periods may have limited or no correlation to changes in revenue or any other measure of financial performance under IFRS

Notes to the presentation and formulas used for some figures’ calculations

36