1H 2018 FINANCIAL RESULTS 2018 Financial Results Presentation - PowerPoint PPT Presentation

1H 2018 FINANCIAL RESULTS 2018 Financial Results Presentation February 26, 2019 Moscow 1

Disclaimer The information contained herein has been prepared using information available to PJSC MMC Norilsk Nickel (“Norilsk Nickel” or “ Nornickel ” or “NN”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Norilsk Nickel and the content of this presentation, since its preparation. In addition all relevant information about Norilsk Nickel 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 Norilsk Nickel 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 major risk factors. There may be other factors, both known and unknown to Norilsk Nickel, which may have an impact on its performance. This presentation should not be relied upon as a recommendation or forecast by Norilsk Nickel. Norilsk Nickel does not undertake an obligation to release any revision to the statements contained in this presentation. The information contained in this presentation shall not be deemed to be any form of commitment on the part of Norilsk Nickel in relation to any matters contained, or referred to, in this presentation. Norilsk Nickel expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the contents of this presentation. Certain market share information and other statements in this presentation regarding the industry in which Norilsk Nickel operates and the position of Norilsk Nickel relative to its competitors are based upon information made publicly available by other metals and mining companies or obtained from trade and business organizations and associations. Such information and statements have not been verified by any independent sources, and measures of the financial or operating performance of Norilsk Nickel’s competitors used in evaluating comparative positions may have been calculated in a different manner to the corresponding measures employed by Norilsk Nickel. 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 Norilsk Nickel, 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. 2

2018 Financial Performance Highlights Consolidated Revenue Free Cash Flow Record high $11.7 bn Realized metal prices: Ni, Cu, Pd $4.9 bn EBITDA increase Pt price Reduction of working capital Sales volumes: Cu, Pd up 28% vs 2017 n.a. Lower CAPEX EBITDA CAPEX Completion of Chita Metal revenue $6.2 bn $1.6 bn Completion of downstream Operating efficiency gains reconfiguration Depreciation of RUB against USD Adjustment of investment schedules up 56% vs 2017 down 22% vs 2017 Domestic inflation Depreciation of RUB against USD EBITDA margin Net Debt/EBITDA ratio Back to mid-cycle levels 53% 1.1 x Global mining industry- Investment grade credit ratings leading level from all three international rating agencies 0.8x for dividend calculation up 9 p.p. vs 2017 Net Working Capital Interim 1H 2018 dividends Beating guidance $0.9 bn $1.8 bn Dividend of USD 11.65 per share Sale of palladium stock paid in 4Q2018 Optimization of capital structure - $1.3bn vs. Dec’31 3

Health & Safety: Delivering Steady Improvements LTIFR: Improved to Record Low Levels Accident Statistics Improved in 2018 Employees LTIFR (1*10 -6 ) Fatal -71% Lost time injury 12 14 8 8 0.80 13 94 0.62 74 0.48 0.44 6 56 52 0.35 43 0.23 26 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 LTIFR remains below the global mining industry Total recordable fatal accidents and lost time injury rates   average decreased by 47% y-o-y Reiterating focus on personal and process safety 45 internal audits of Occupational Safety and Health   across all operations management system were conducted in 2018 Commitment to create strong safety culture at all 105 employees were fired for the violation of cardinal   levels of the organization safety rules (vs 152 in 2017) Source: Company data 4

Reducing Environmental Footprint Polar Division: Suphur Dioxide Emissions Kola Division: Sulphur Dioxide Emissions Down 5% from 2015 Reduced 30% from 2015 SO 2 Emissions, kt SO2 Emissions, kt ~ -30% 180 -5% 2,000 150 120 1,600 90 1,200 60 800 30 0 400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 Reduction of SO 2 emissions in 2018 was due to: SO 2 emissions increased 5% in 2018 despite 15%  increase of copper production (smelting) in Polar Reduced smelting of higher sulphur content third party  Division materials SO 2 emissions remained within the government  Sale of high-grade copper concentrate to third parties  approved limits Reduced anode smelting as chlorine leaching refinery  was ramping up 5

ESG Performance Highlights …Leads to Gradual Improvement of Recognition of Norilsk Nickel ESG Efforts … ESG Assessment Sustainalytics ESG Score: 69 points (out of Signatory to UN Global Compact since 2016 100), Rated « Average Performer » since 2017 Rating in the global industry #13/45 69 #61/70 Average 58 49 Reiterated as an index performer 46 constituent in July 2018 Under Score of 3.1/5 (1) performer (up from 2.3 in 2017) 2015 2016 2017 2018 Rating updated in December 2018 Governance score 4/10 (2) MSCI ESG Score: Rated « B » since 2017 Environmental score 4/10 Social score 3/10 B B CCC CCC Ranked #4/33 in the first environmental ranking of Russian mining companies 2015 2016 2017 2018 Note: 1. of which 5 – is the highest, 2. of which 1 – is low, 10 – is high risk 6

Markets Update

Weakening Macro and Strong US Dollar – Negative Backdrop for Commodities Strong Trade-Weighted US Dollar Maintains Global PMIs Trending Lower Downward Pressure on Commodities Purchasing Managers Index 150 150 65 60 55 125 50 45 40 100 100 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18 Jan-19 USA China Euro Zone Global Economic Growth Expected to Slowdown 75 % GDP Growth Rates (1) 6.5 6.2 6.2 50 50 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 3.0 2.9 2.9 2.8 2.5 USTWBROA (lhs) 1.9 1.7 1.6 1.5 Bloomberg Commodity Index (rhs) World China USA Europe 2018 2019 2020 Source: Company data Note: 1. World Bank as of January 2019 8

Metal Markets Outlook – View on Fundamentals Ni Cu Pd Pt Metal Kt Kt Moz Moz -250 -120 -1.6 +0.8 Other Stocks, Non- Non- elastic exchange exchange days of Other Other consumption 80 non-elastic Exchange 9 Exchange 32 5 116 11 56 ETF ETF 28 4 Jan-17 Dec-18 Jan-17 Dec-18 Jan-17 Dec-18 Jan-17 Dec-18 Kt Kt Moz Moz Deficit Rising (1) Surplus Rising (1) Deficit Reducing Deficit Rising Market Balance 0.8 Forecast 0 (120) 0.4 0.4 (50) (320) (0.6) (0.6) (120) (130) (0.8) 2017 2018E 2019E 2017 2018 2019E 2017 2018 2019E 2017 2018 2019E Medium-term    Fundamentals  Long-term Fundamentals Source: Company estimates Note: 1. Excluding ETFs, investment demand and industry stocks movement. Numbers are rounded separately 9

Nickel Exchange Stocks Are Rapidly Normalizing Inventories More than Halved from Peak Levels Drawdown of Exchange Inventories Continues and Went Below Historical Averages… in 2019 Albeit at a Slower Pace Days of consumption Ni, kt 92 486 45 37 15 31 (2) 410 15-25 (1) 12 44 3 197 Cu Ni Normal Nickel Spot Ni Historical Nickel High Spot Level Average 219 212 292 13 12 … as Most of Stocks Drawn Were Consumed Ni, kt 165 164 228 410 (130) 71 219 41 (61) 37 Jan-16 Dec-17 Dec-18 Feb-19 LME (Full Plate) LME (Briquettes) LME (Other shapes) SHFE (Full Plate) 2017 YE Consumed Relocated 2018 YE Source: Company estimates, LME, SHFE, SMM Note: 1. According to markets participants, customers, 2. As of February 15, 2019 10

Global NPI Production Volumes Continue to Set Records Growth of Nickel Ore Supply to China Expected to …Leaving Indonesia as the Main Driver of Global Moderate in 2019- 2020E… NPI Growth Ore, Mln wmt Kt, Ni Units 2018: Philippines +3% Y-o-Y 2018: Indonesia +292% Y-o-Y 36% of global Ni 71 +10 output % 948 +41% 837 47 51 49 732 47 30 438 34 34 562 347 31 508 262 489 415 453 27 27 174 30 36 87 29 41 29 34 508 510 489 470 490 31 388 386 366 22 20 15 11 2013 2014 2015 2016 2017 2018E 2019E 2020E 2013 2014 2015 2016 2017 2018E 2019E 2020E Indonesia Philippines Others China Indonesia In April 2017, Indonesia relaxed the ban on export of unprocessed nickel ore for 5 years • Indonesian government is reportedly committed to reinstate the ban in 2022E • In the long-term, up to 40% of the feed (200kt of Ni or 5% of global supply) for Chinese NPI could be at risk • Sources: NN Forecast, BGRIMM 11 11