ALROSA Q2&6M 2019 IFRS RESULTS MOSCOW, 19 AUGUST 2019 - PowerPoint PPT Presentation

ALROSA Q2&6M 2019 IFRS RESULTS MOSCOW, 19 AUGUST 2019

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3 DIAMOND MARKET OVERVIEW Decreas ease in global al diamon ond output 1  6M ‘ 19 19 glo lobal al output down 2% yoy, driven by lower m ct (2%) DeBeers and Rio Tinto production 23% ALROSA Other 73 71  Stocks cks of of polis olished ed diamon iamond at at mid mid-stream eam grew as 41 40 39 35 33 32 retailers were in destocking mode on slowdown in 54 57 demand 30 31 30 25 26 24 18 16 11 10 10 9 8 7  In In 6M ‘ 19 19 mine ners reduc uced sa sale les by by -23 23% yoy yoy as Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 mid-stream faces tighter financing conditions and Miners 2 diamond elevated polished diamonds stocks ond sales es were 23% down $ bn 6.7 (23%) 6.3 5.2 6M ' M '17 6M ' M '18 6M ' M '19 Source: Company data and analysis. 1. Data based on results of ALROSA and other diamond producers with a market share totalling c. 71% in 6M 2018 2. ALROSA, De Beers, Rio Tinto, Catoca, Petra Diamonds, Mountain Province, Stornoway Diamond

4 ALROSA PRODUCTION (1/2) Run-of of-mi mine ore was up by 10% qоq OM 1 or  Q2 ‘ 19 19 ROM ore up up 10 10% qoq qoq (+ (+8% yoy oy) to to 21 21.6 m m 3 , m m 3 9% driven by higher stripping ratio at the Nyurbinskaya 10% 41.3 38.0 pipe, pre-mining operations at Almazy Anabara, and seasonal output at alluvials. 6M ‘ 19 19 ROM OM or ore was as 9% 21.6 20.1 19.7 17.9 17.0 16.1 yoy up yo up to to 41 41.3 m m 3 , mostly due to the launch of production at the V .Munskoye deposit.  Q2 ‘ 19 19 pr proc oces essed ed feedstoc eedstock seas eason onal ally ly gr grew ew by by 65 65% qoq (+ qoq (+4% yoy yoy). Ore and gravels processing in 6M ‘ 19 19 Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 increas in eased ed 6% yo yoy to to 16 16.8 mt mt supported by the ramp- Ore and sands processin sing goes up 65% % qoq up of production at the V .Munskoye deposit and increased productivity at Nyurba Division and m t Udachny’s processing plants. Grade, ct/t 1.38 1.30 1.23 1.01 1.04 0.93 0.84  Q2 ‘ 19 19 av aver erage age grade grade was as 10 10% up up yo yoy on on be bett tter er 0.61 grades grades at at Several everalma maz, an and bet bette ter grades rades at at Udachn Udachny grav avels ls. A qoq decrease of 25% was due to seasonality. 17.2 16.8 15.8 10.1 10.5 7.5 6.4 5.7 Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 Source: Company data and analysis. 1. ROM – run of mine

5 ALROSA PRODUCTION (2/2) Diam amon ond production ion was up by 24% qoq  Q2 ’ 19 19 diamo iamond ou output grew ew 24 24% qoq to to 9.7 m cts, m ct mostly due to seasonal activity at alluvial deposits. Open pit Underground Alluvials 10%  Q2 ’ 19 19 output was up up 14 14% yoy driven by by: 17.6 Share launch of production at the V .Munskoye deposit 15.9 o 2.1 12% increase in higher-grade ore processing at the o 24% 2.4 Botuobinskaya pipe (Nyurba Division) 3.7 21%  6M ‘ 19 19 diamon ond output grew 10 10% yoy driven by by: 10.5 10.3 4.1 9.7 8.5 +0.7 m cts - launch of production at V .Munskoye 0.5 o 7.8 7.4 1.9 deposit 3.3 0.2 5.8 0.2 2.3 67% 1.5 2.2 +0.3 m cts – growth from Severalmaz on better grades 11.7 2.0 o 2.1 9.4 from richer ore 1.0 6.5 6.1 5.6 5.3 increase in ore processing at the Botuobinskaya pipe o 4.1 3.8 and productivity gains Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 Source: Company data and analysis.

6 INVENTORIES ALROSA's s diamon ond inventor orie ies s were up 12% qoq  Q2 ‘ 19 19 diamo iamond in invent ntor ories es ad added 1.6 m ct cts (+12% m ct 36% qoq) 15.9 m cts as output increased by 24% qoq 12% while sales in cts decreased by 22% qoq  36 36% yoy yoy grow owth in in Q2 inv nvent ntor ories es (+ (+4.2 m cts) due 18.3 17.5 17.0 15.9 15.5 14.3 to lower sales (-8% yoy), while output increased 12.3 11.7 (+14% yoy) Q3 '1 '17 Q4 '1 '17 Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 ALROSA's s diamon ond inventorie ories s structure m ct 11.7 14.3 15.9 12% 13% 1 Other 24% 26% 17% 17% Work in progress 22% Finished goods 70% 59% 51% Q2 '1 '18 Q1 '1 '19 Q2 '1 '19 Source: Company data and analysis. 1. Diamond inventories at mining and processing divisions

7 ALROSA ROUGH DIAMOND SALES Q2 diamon ond sale les s went down by 22% % qoq (-8% % yoy)  Q2 ‘ 19 19 sal ales es do down by by 22 22% qoq qoq (-8% yo yoy) to to 8.3 m cts ts, m ct (16%) Gem-quality diamonds Industrial quality diamonds including a 24% qoq decline in gem-quality diamonds 22.4 (22%) sales (down 5% yoy) to 6.0 m cts, due to excessive stocks 18.9 Share of rough and polished diamonds in the mid-stream 13.4 6.0 10.6 26% 5.0 9.0 9.0 8.3 3.2 6.7  Q2 ‘ 19 19 sal ales es in in USD SD dec decreas eased ed by by 19 19% qoq qoq ($796 796 m) m) 2.7 2.7 3.7 2.3 16.4 due to 22% qoq sales decline in carats 74% 13.9 2.0 10.1 7.9 6.3 6.0 5.3 4.7  Q2 ‘ 19 19 sal ales es dec ecli lined ned 25 25% yo yoy, while sales in carats fell Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 by 8% yoy Q2 diamon ond sale les s by value e were down by 19% qoq $ mn (32%) Gem-quality diamonds Industrial quality diamonds 2,639 (19%) 1,582 49 1,784 Share 26 1,057 988 35 949 2% 824 796 2,590 23 18 1,556 16 22 1,749 16 98% 1,034 969 933 802 780 Q1 '1 '18 Q2 '1 '18 Q3 '1 '18 Q4 '1 '18 Q1 '1 '19 Q2 '1 '19 6M ' M '18 6M ' M '19 Source: Company data and analysis.