Group Results Safe Harbor Some of the information in this - PowerPoint PPT Presentation

Q1 2020 May 26, 2020 Group Results

Safe Harbor Some of the information in this presentation may contain projections or other from those contained in our projections or forward-looking statements, forward-looking statements regarding future events or the future financial including, among others, the severity and duration of current economic and performance of MTS, as defined in the safe harbor provisions of the U.S. financial conditions, including volatility in interest and exchange rates, Private Securities Litigation Reform Act of 1995. You can identify forward commodity and equity prices and the value of financial assets; the impact of looking statements by terms such as “expect,” “believe,” “anticipate,” Russian, U.S. and other foreign government programs to restore liquidity and “estimate,” “intend,” “will,” “could,” “may” or “might,” and the negative of such stimulate national and global economies, our ability to maintain our current terms or other similar expressions. We wish to caution you that these credit rating and the impact on our funding costs and competitive position if statements are only predictions and that actual events or results may differ we do not do so, strategic actions, including acquisitions and dispositions and materially. We do not undertake or intend to update these statements to our success in integrating acquired businesses, potential fluctuations in reflect events and circumstances occurring after the date hereof or to reflect quarterly results, our competitive environment, dependence on new service the occurrence of unanticipated events. We refer you to the documents MTS development and tariff structures, rapid technological and market change, files from time to time with the U.S. Securities and Exchange Commission, acquisition strategy, risks associated with telecommunications infrastructure, specifically the Company’s most recent Form 20-F. These documents contain governmental regulation of the telecommunications industries and other risks and identify important factors, including those contained in the section associated with operating in Russia and the CIS, volatility of stock price, captioned “Risk Factors” that could cause the actual results to differ materially financial risk management and future growth subject to risks. 2

COVID-19 RESPONSE social initiatives Supporting Helping Protecting Aiding customers public health initiatives employees healthcare workers Dedicated task force at senior Free access to critical resources, e.g. Free connectivity and special offers Close coordination with local • • • • management level to coordinate official hotlines and websites. for doctors fighting COVID-19. governments and Emergency operational response. Ministry on public outreach efforts. Free online entertainment and Employee crowdfunding for targeted • • Over 30,000 employees educational programs. support of medical workers. Providing anonymized insights from • • transitioned to remote work. Big Data analytics to public Free urgent care telemedicine Free cloud compute time for • • agencies. Extensive sanitation protocols put consultations. Folding@Home coronavirus vaccine • in place for offices, retail stores, project. Personalized support for tourists • Uninterrupted home internet, • and field workers. stranded abroad. cable/satellite TV for overdue Joint project with Sistema Charitable • accounts. Foundation to provide coronavirus Providing personal protective • test kits to regional healthcare equipment (PPE) to volunteers. Contactless delivery of SIM cards • facilities. and network equipment. Providing essential goods to • vulnerable segments of the Free limited cloud services for B2B • population. clients. 3

COVID-19 RESPONSE ensuring continuity & adapting approaches Expanding product offerings Maintaining our network Strengthening online channels Investing to increase network capacity. Launched online sales of SIM cards with Launched a #StayHome bundle of packaged • • • contactless delivery and self-registration. services tailored to social distancing needs Uninterrupted operation despite traffic • (TV, music, fitness, books, telemedicine). increases of up to 2x in certain areas. Expanded human resources in online sales • and delivery services. Launched customized offers for SMEs. • Rapid reallocation of resources to • accommodate geographically redistributed Introduced a remote hiring and onboarding Shifted live experiential focus from offline to • • traffic load. process for new employees. online entertainment. Extra focus on ensuring robust coverage at Stepped up promotion of digital self-care Prioritized marketing of B2B solutions for • • • healthcare facilities. and mobile banking capabilities via the My secure remote working environments. MTS and MTS Bank apps. Removed duration cap for voice calls. • Partially shifted first-line customer service • Leveraging Big Data analytics to actively • interactions to MTS in-house conversational manage network resources. agent. 4

CORE BUSINESS VERTICALS key developments in Q1 2020 Telecom B2B Russia mobile subs +1.2% y-o-y. • Successfully implemented tariff adjustments. • Acquired stake in regional fixed-line operator • Clouds & Digital Services Zelenaya Tochka. Launched first industrial 5G zone in Russia. • 2.3x y-o-y increase in revenue from • Cloud & Collocation services. Fintech 1.5x y-o-y increase in Big Data revenue. • +11% active bank clients y-o-y. 47% y-o-y top-line growth in IoT products B2C • • & services. +67% retail loan portfolio y-o-y. • ₽ Introduced cloud-based IT outsourcing +75% virtual cards q-o-q. • ecosystem • solutions. Rolled out completely revamped MTS • Launched Containerum Managed Bank mobile app. • Kubernetes on #CloudMTS platform. Media & Entertainment Avantazh certified under PCI DSS. • Launched B2B marketplace for • +4% y-o-y increase in pay TV users. • microbusinesses / sole proprietors. Launched online concerts on MTS Live, reaching 30+ • New IoT projects in utility meters, medical • million viewers to-date. equip, and smart city monitoring. Established JV with Russia’s Channel One focused on • personalized content and targeted marketing. Announced coproduction of dual-format film • (landscape/vertical) with acclaimed director. 5 Steady progress on twofold strategy to (1) provide robust connectivity and (2) capture digital upside 5

GROUP REVENUE strong top-line impact from adjacent segments Group revenue factor analysis * Commentary +8.9% YoY (RUB bn) • Strong performance across all Beyond connectivity four verticals. • Core telecom saw accelerated growth in mobile service 0.1 2.5 revenue. 119.6 0.2 5.0 2.0 109.8 • Adjacent segments were a key growth driver, with nearly half of year-over-year group revenue growth coming from beyond connectivity. Q1 2019 Telecom Fintech Media B2B Digital Other Q1 2020 & Clouds 6 * Totals may add up differently due to rounding, data sourced from internal management accounting

GROUP ADJ. OIBDA solid underlying growth driven by core services +5.6% YoY Group adj. OIBDA factor analysis * Commentary (RUB bn, % margin) (excl. 1Q19 one-off ** ) +1.6% YoY • Underlying year-over-year growth of 5.6% when adjusting (incl. 1Q19 one-off ** ) for impact from one-off in Q1 2019. 0.2 3.4 51.5 50.7 • Core connectivity services were primary adj. OIBDA growth -0.9 -1.9 driver. 46.2% 43.1% Q1 2019 1Q19 one-off** Services MTS Bank Other Q1 2020 * Adjusted OIBDA doesn’t include a loss from impairment of non-current assets of RUB 0.3 bn for Q1 2020; totals may add up differently due to rounding 7 **Effect from real estate transaction

CUSTOMER ENGAGEMENT new offers for new lifestyles Adjusting product offerings Shifting to online entertainment Supporting society • Online live concerts with leading Russian • #StayHome product bundle combining • Provided thousands of doctors the option performers featuring the option for intro offers for TV, music, books, fitness, for three months of free mobile immersive HD/VR viewing experiences. and telemedicine services. connectivity. #StayHome bundle offer 8 8

MTS DIGITAL ECOSYSTEM driving penetration, attracting users 1Q19 2019 1Q20 m users/clients 15.4 20.3 21.9 MyMTS users (MAU) Customer experience & loyalty MTS Cashback users 2.71 5.05 5.69 (registered) MTS Bank active 2.21 2.38 2.46 clients Financial Daily banking clients 1.58 1.52 1.59 services MTS Bank 0.60 0.91 1.02 mobile app users 4.42 4.57 4.58 Pay TV users Media AI-based Big Data & IT client ID personalization infrastructure 9

TELECOM Russia business performance Mobile service revenue growth Fixed-line revenue growth +6.9% (change YoY) (change YoY) +5.3% Y-o-Y Y-o-Y 6.9% 1.4% 0.7% (B2C excl. 0.1% 3.3% 3.0% telephony) 1.7% -1.2% 1.5% -1.5% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 3M mobile subscribers Online retail sales growth +1.2% (m) (change YoY) +65.2% Y-o-Y Y-o-Y 65.2% 79.1 78.8 78.5 78.1 77 .6 33.1% 45.8% 42.9% 13.7% 11.1% 1.5% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 10