GAZPROM: 2Q 2020 IFRS RESULTS AUGUST 31, 2020 1 2Q2020 IFRS RESULTS
Alexan ander der Ivannik nikov Head of Departm tment nt 2 2Q2020 IFRS RESULTS
DISCLAIMER This presentation has been prepared by PJSC Gazprom (the “Company”), and comprises the slides for a presentation to investors concerning the Company. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities representing shares in the Company, 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. Any viewer of this presentation considering a purchase of such securities is hereby reminded that any such purchase should be made solely on the basis of the information contained in the prospectus or other offering document prepared in relation thereto and will be subject to the selling restrictions set out therein. The information in this presentation should not be treated as investment advice. Care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable. However, the contents of this presentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in or discussed at this presentation. None of the Company or any of their respective members, 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 in this presentation includes forward-looking statements, such statements may also occur during the Q&A session. These forward-looking statements include all matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward- looking statements contained in this presentation. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. No person is under any obligation to update or keep current the information contained herein. By attending the presentation you agree to be bound by the foregoing limitations. 3 2Q2020 IFRS RESULTS
MARKET ENVIRONMENT: 2Q 2020 VS 2Q 2019 OIL AND GAS S PRICES 2Q 2020 HIGHLIG LIGHTS • AVERAGE OIL PRICES WERE AT THEIR LOWEST SINCE 2005 USD/mmcm USD/bbl • TTF GAS PRICES HIT AN ALL-TIME LOW SINCE THE START OF 150 60 Brent HUB TRADING IN EUROPE 100 • GAS SPOT PRICES WENT BELOW THE MARGINAL COSTS OF 40 TTF MOST PRODUCERS 1 1 month th ahead 50 20 • LOW PRICES TO PROVIDE COMPETITIVENESS VS. OTHER ENERGY SOURCES 0 0 1Q2020 2020 2Q2020 2020 • IN 3Q 2020 GAS MARKET STARTED TO REBOUND. EX 1 IN EURO WEATHE HER R INDEX ROPE PE • TEMPORARY FACTORS: LESS FAVORABLE WEATHER CONDITIONS Y/Y AND THE LOCKDOWN LED TO THE SIGNIFICANT CONTRACTION OF GAS CONSUMPTION IN EUROPE IN 2Q 2020 USD/RUB EXCHA HANGE E RATE 85 80 • AVERAGE RUBLE RATE IN 2Q 2020 WAS 12% WEAKER THAN 75 IN 2Q 2019, BUT… 70 • …IN 2Q 2020 RUBLE APPRECIATED BY 10%, WHICH 65 RESULTED IN FX GAINS 60 1Q2020 2020 2Q2020 2020 1 Index is calculated as the sum of degree days for the respective month in European countries 2 HDD (heating degree days) – a degree day of the heating season 4 CDD (cooling degree days) – a degree day of the cooling season 2Q2020 IFRS RESULTS
2Q 2020 IFRS RESULTS THE SIGNIFICANT SHARE OF FIXED COSTS LED TO A DROP IN EBITDA MARGIN • NET INCOME REMAINED POSITIVE THANKS TO FX GAINS AGAINST A BACKDROP OF RUBLE APPRECIATION IN 2Q 2020 • 2Q CAPEX CONTRACTED TO THE LOWEST LEVEL SINCE 2016 • 2% GROWTH OF NET DEBT IN RUBLES • RUB bn +2% +2% Adjusted for analytical purposes* 2Q2019 vs 2Q2020 2,700 -35% 35% -81 81% -50% 50% -13% 13% -1,0x 0x -4,7x 7x 1,700 3,271 700 1,163 94 94 301 301 149 149 -18 18 -319 19 -300 5 4 4 1 2 3 Sales EBITDA Net profit CAPEX Operating CF adj. FCF adj. Net debt adj. 1 EBITDA adjusted for changes in impairment provisions *In order to reflect the effects of the decrease in bank deposits (reported as a 2 Profit attributable to PJSC Gazprom’s shareholders for the period part of other current assets and other non-current assets) 3 Cash capital expenditures 4 Adusted for changes in ST bank deposits 5 Compared to net debt as of March 31, 2020 5 2Q2020 IFRS RESULTS
OIL AND ENERGY BUSINESS REVENUE E BY SEGMEN MENT 1 2Q2019 2Q2020 020 GAS S BUSIN INES ESS, S, TRANSP SPOR ORTATION ION AND OTHER 53% 53% 54% 54% -34% 34% 1,200 6% 6% 8% 8% 800 1,117 988 988 951 951 400 787 787 41% 41% 630 630 38% 38% 0 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 OIL AND D GAS S CONDEN DENSA SATE, E, REFINED INED PRODU DUCT CTS ELECTRICIT RICITY Y AND HEAT -40% 40% -10% 10% RUB bn RUB bn 800 200 600 400 739 739 100 729 729 699 699 594 594 158 158 145 145 439 439 200 104 104 95 95 94 94 0 0 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Calculations may differ due to rounding. 1 Net of value added tax (VAT), excise tax and custom duties. 6 2Q2020 IFRS RESULTS
GAS BUSINESS RU RUSSIA IA EURO ROPE E & OC 2 FSU bcm RUB/mcm bcm bcm USD/mcm USD/mcm 15 200 4,182 4,181 100 250 4,111 4,051 4,020 208 100 198 155 153 150 146 4000 137 170 80 200 150 162 75 10 3000 60 150 110 100 50 12 2000 40 100 5 77 73 9 8 50 7 56 61 52 25 54 47 6 1000 42 20 50 40 37 0 0 0 0 0 0 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 VOLUMES AVERAGE PRICE IN FSU VOLUMES AVERAGE PRICE IN RUSSIA VOLUMES AVERAGE PRICE IN EUROPE & OC -2% 2% -50% 50% -16% 16% RUB bn RUB bn RUB bn 400 606 596 105 323 305 600 100 87 459 450 300 71 62 400 297 169 166 52 200 148 50 200 100 0 0 0 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 1 3.4 3.4 NET SALES TO EUROPE & OC NET SALES TO RUSSIA NET SALES TO FSU Calculations may differ due to rounding. 1 Net of value added tax (VAT) 2 OC — other countries, including LNG sales 3 VAT is not charged on export sales 4 Net of custom duties and excise tax on gas exports 7 2Q2020 IFRS RESULTS
IMPACT OF BANK DEPOSITS EARLY WITHDRAWAL CLAUSE 1 KEY FEA EATURES RES OF BANK K DEPOSIT SITS: S: DEPOSIT TERM OF OVER 3 MONTHS IMPACT CT OF BANK K DEPOS OSIT ITS S ON NET DEBT: IMPACT CT OF CHANGES ES IN ST DEPOS OSIT ITS ON CASH H FLOWS: CHANGES IN WORKING CAPITAL (PART OF OPERATING CASH BANK DEPOSITS ARE NOT INCLUDED IN СASH AND • • FLOW) INCLUDE CHANGES IN ST BANK DEPOSITS CASH EQUIVALENTS OPERATING CASH FLOW AND FREE CASH FLOW NEED TO BE NET DEBT AND NET DEBT/EBITDA NEED TO BE • • ADJUSTED FOR CHANGES IN ST BANK DEPOSITS FOR ADJUSTED FOR BANK DEPOSITS FOR ANALYTICAL ANALYTICAL PURPOSES PURPOSES ST & LT BANK K DEPOSIT SITS ST BANK K DEPOS OSIT IT CHANGES ES RUB bn 330 330 798 798 413 413 RUB bn 676 676 523 523 600 800 1 400 3 600 1 510 510 200 796 796 400 1 243 243 2 673 673 522 522 412 412 0 200 328 328 -123 123 -152 152 -188 188 0 -200 2017 2018 2019 1Q2020 2Q2020 2017 2018 2019 1Q2020 2Q2020 ST DEPOSITS LT DEPOSITS APPL PLYIN ING LT AND ST BANK DEPOSIT SITS IS AIMED MED AT IMPRO ROVIN ING THE EFFICIEN ICIENCY CY OF LIQUID IDIT ITY Y MANAGEME EMENT 1 Reported as a part of other current assets and other non-current assets Source: Gazprom 2Q 2020 IFRS report, note 13 8 2Q2020 IFRS RESULTS
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