Boosting Performance February 2020 in a Changing Environment 1 - PowerPoint PPT Presentation

Boosting Performance February 2020 in a Changing Environment 1

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Summary Well-positioned to Pulling levers Balancing act between benefit from changing to manage through gas growth environment price downturn and profitability  key uncertainties  lower operating  focused pipeline of resolved in a positive expenditure projects to take way: the Big advantage of new  capital discipline Achievements opportunities  transformation  spending  low price market activities management  low gearing 3

Naftogaz at a glance, 2019 7% Gas imports by the group contribution to 7.2 bcm Ukraine’s GDP 55,078 78% Royalty paid by the group UAH 32.2 bn employees share in total gas production in Ukraine 89.6 bcm gas transit via Ukrainian GTS 4

Macroeconomic stabilization supports Ukraine’s growth Key macroeconomic indices in Ukraine GDP growth, USD bn Inflation, % 43.3 150 131 131 113 24.9 92.3 87.5 12.4 13.7 9.8 4.1 2014 2015 2016 2017 2018 2019E 2014 2015 2016 2017 2018 2019 UAH/USD exchange rate NBU interest rate, % 22.0 28.2 27.7 18.0 27.1 18.0 24.0 23.7 16.0 16.5 15.5 12.5 15.8 11.0 2014 2015 2016 2017 2018 2019 2016 2017 2018 2019 Sources: Ukrstat, NBU, IMF 5

Naftogaz: key figures FY 2019 (1) Financial Highlights, UAH (mln) FY 2017 FY 2018 Revenues 227,478 256,312 218,545 Operating profit 60,545 26,397 86,044 Adjusted EBITDA (2) 83,945 87,497 62,261 CAPEX 16,995 30,595 33,565 Total Assets 723,124 603,712 598,048 Cash position 23,093 14,224 78,016 Net Debt/Adjusted EBITDA 0.43 0.48 0.68 (3) (1) These are preliminary unaudited results of the Group’s operations Gross Gas Production Volumes for 2019. These results include Gas Transit and Gas Transmission results that will be shown as discontinued operations. Final audited 16.6 results could differ significantly from the figures stated above. bcm 16.1 (2) Adjusted EBITDA is net profit/(loss) for the period, adjusted to 1.1 exclude the effects of income tax expense/(benefit), finance costs, 1.2 finance income, share of after-tax results of associates and joint- ventures, net foreign exchange loss, depreciation, depletion, and 15.5 14.9 amortization, impairment of property, plant and equipment, provisions, and non-refundable VAT, arbitration income, and 2018 2019 arbitration expense recognised as a result of the Gas Transit and Sales Arbitration Ukrnafta Ukrgasvydobuvannya Total (3) Net Debt/Adjusted EBITDA for 2019 is calculated as Total Debt less Cash (adjusted for cash received in December 2019 per results of transit arbitration). 6

Integrated gas is the key part of Naftogaz business following the unbundling UAH bn Gas transit and gas Other segments and Integrated gas domestic transmission unallocated items 98.7 97.2 108.5 227.6 256.4 218.5 50.7 89.1 90.2 41.3 39.8 87.0 2017 2018 2019F Revenues 2017 2018 2019F 2017 2018 2019F 2017 2018 2019F 43.9 41.4 39.1 36.3 7.3 33.4 26.8 83.9 87.5 62.3 3.4 2.1 2017 2018 2019F Adjusted EBITDA 2017 2018 2019F 2017 2018 2019F 2017 2018 2019F 4.5 3.1 26.9 2.8 24.7 17.0 30.6 33.6 2.2 1.8 1.5 13.7 2017 2018 2019F CAPEX 2017 2018 2019F 2017 2018 2019F 2017 2018 2019F 7