FY 2018 Financial Results March 2019 Disclaimer By attending the - PowerPoint PPT Presentation

FY 2018 Financial Results March 2019

Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to the bound by the following limitations: This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of PJSC LSR Group (“hereinafter – the Company”) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information in this document has been prepared by the Company solely for use at presentations. This document and its contents may not be distributed, published, reproduced (in whole or in part) by any medium or in any form. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. None of the Company nor any of its shareholders, 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 set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain the words «anticipate», «believe», «intend», «estimate», «expect», «will» and words of similar meaning. By their nature forward looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We assume no obligations to update amend or revise the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. Investment in the Company will also involve certain risks. There maybe additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control and we may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of revenues, profitability and growth, cost and synergy of our recent acquisitions and restructuring, the timely development and acceptance of new products, the impact of competition and competitive pricing, the ability to obtain necessary regulatory approvals and the ability to fund our future operations and capital needs through borrowing or otherwise, the ability to successfully implement any of our business strategies, the ability to integrate our business and to realize anticipated cost savings and operational benefits from such integration, our expectations about growth in demand for our products and services, the effects of inflation, interest rate and exchange rate fluctuations, and our success in identifying other risk to our business and managing the risk of the aforementioned factors, the condition of the economy and political stability in Russia and the other markets of operations and the impact of general business and global economic conditions. 2

FY 2018 Highlights STRONG CASH POSITION RECORD HIGH NEW CONTRACT SALES 1 of RUB 30.3 bn, a nine-fold increase YoY 3 YoY   Operating cash flow A new contract sales high of 1,002 th. m² up, 44% bn 4 , up 38% YoY   Cash balance increased by 88% year-on-year to RUB 55,798 bn Total value of RUB 93   Net debt down 30% YoY to RUB 30.3 bn Completions in 2018 totaled 1,009 th. m²  Net debt/ adjusted EBITDA of 0.83 SOLID PERFORMANCE RUB 186 BN GROUP PORTFOLIO   Land bank valued at RUB 186 bn Revenue of RUB 146.4 bn, up 6% YoY 2 of RUB 36.4 bn with adj. EBITDA margin of 25%   Assessed value per sqm at RUB 24 th. increased by 10% YoY Adj. EBITDA   Top-4 projects by value: ZILART, LUCHI, MORSKOY FACADE Profit for the year of RUB 16.2 bn, up 2% YoY  and ZIL YUG EPS up 3% YoY to RUB 159.33 1 Cash flow from operations before income taxes and interest paid. 2 Hereinafter Adjusted EBITDA equals to Results from operating activities + Depreciation/amortization – (Increase in fair value of Investment property – Decrease in fair value of Investment property) – (Increase in results from operating activities due to write off of change in fair value of the disposed asset – Decrease in results from operating activities due to write off of change in fair value of the disposed asset) + Impairment losses recognized during the reporting period + Capitalized interest recognized in cost of sales. 3 3 YoY % change is based on sales without parking 4 YoY % change is based on sales without parking Source: Audited consolidated IFRS financial statements for the year ended 31 December 2018 and 2017; Company data

Revenue and Adjusted EBITDA SOLID TOP LINE PERFORMANCE AND ADJUSTED EBITDA IN LINE WITH 2017 Revenue Adjusted EBITDA 146,376 RUB m RUB m 36 845 36 400 138 494 6% 1% 27% 25% Adj. EBITDA margin 2017 2018 2017 2018 A slight YoY decrease in adjusted EBITDA margin largely reflects the A 6% YoY increase in revenue was primarily driven by one-off profit recognition in 2017, following a land plot sale strong sales across all regions (Energetikov 9) in St. Petersburg , previously used as one of the Company’s Reinforced Concrete -NW production facilities Source: Company data 4

Profit for the Year and EPS PROFIT FOR THE YEAR AND EPS REMAINED ON THE 2017 LEVEL Profit for the Year EPS RUB m RUB 16 230 15 871 159.33 154.51 2% 3% 2017 2018 2017 2018 Profit for the Year up 2% YoY Stable earnings per share in line with 2017 Source: Company data 5

Real Estate Development SUSTAINED INCREASE IN PROFITABILITY Revenue Adjusted EBITDA RUB m RUB m 116 592 35 553 111 216 5% 10% 32 297 29% 30% Adj. EBITDA margin 2017 2018 2017 2018 Adjusted EBITDA margin expanded to 30% reflecting Increase in the segment’s revenue and Adjusted EBITDA was a more profitable product mix primarily driven by solid performance across all regions Source: Company data 6

Real Estate Development: Breakdown by Region STRONG PERFORMANCE ACROSS ALL REGIONS Moscow Urals St Petersburg RUB m RUB m RUB m 71 559 68 639 38 397 9 218 8 463 31 101 12 699 22 374 20 771 2 140 8 195 1 800 2017 2018 2017 2018 2017 2018 Revenue Adj. EBITDA Revenue Adj. EBITDA Revenue Adj. EBITDA Source: Company data 7

Building Materials CONTINUED REVENUE GROWTH Revenue Adjusted EBITDA RUB m RUB m 19 144 6 571 17 362 10% 39% 4 000 38% 21% Adj. EBITDA margin 2017 2018 2017 2018 A 10% YoY revenue growth was primarily driven by strong sales Lower adjusted EBITDA reflects the one-off profit recognition in 2017, following a land plot sale (Energetikov 9) in St. Petersburg, of crushed granite and sand, as well as higher shipment volumes previously used as one of the Company’s Reinforced Concrete -NW of ready-mix concrete production facilities Source: Company data 8

Operating Expenses STRICT APPROACH TO COST CONTROL Distribution expenses Administrative expenses RUB m 9 392 7 211 RUB m 8 910 5% 27% 5 671 As % of revenue 4% 6% 6% 5% As % of revenue 2017 2018 2017 2018 Higher distribution expenses were attributable mainly to an An increase in administrative expenses mainly increase in transportation costs due to rising sales volumes of resulted from higher charitable contributions crushed granite (+26% YoY) and sand (+41% YoY) Source: Company data 9

Further Strengthened Balance Sheet SIGNIFICANT NET DEBT REDUCTION DRIVEN BY STRONG CASH FLOW GENERATION • Strong liquidity position Total debt of RUB 86,088 mln as of 31 Dec 2018 • Significant decrease of net debt level, down 30% YoY, to RUB 30,290 mln 86 088 RUB m 72 786 (2017: RUB 43,073 mln) • Average interest rates down to 8.8% vs 9.1% in 2017 55 798 • Net debt/ Adjusted EBITDA at a comfortable level of 0.83 (2017: 1.17X) 29 713 • Credit rating: Moody’s – B1, outlook stable; Fitch – B, outlook positive; RAEX – ruA, outlook stable 2017 2018 Debt maturity profile Total debt Cash and cash equivalents RUB m 38 305 Debt structure Finance lease 29 910 Bond issues liabilities 17% 0,01% 11 336 6 350 Bank and other 187 loans 83% 2019 2020 2021 2022 2023+ Source: Company data 10