3q2017 ifrs results - gazprom · 3 26; 124;195 150; 150; 150 68; 103; 124 69; 165; 187 245; 190; 50...

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below this line 3Q2017 IFRS RESULTS

3Q2017 IFRS RESULTS

NOVEMBER 30, 2017

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Igor Shatalov

First Deputy Head of Department

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DISCLAIMERS

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.

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45.9

52.1

43.7

50.9

0

20

40

60

3Q2016 3Q2017

BRENT URALS

HIGHLIGHTS

Source: Company data. Bloomberg. Bank of Russia website 1 OC - Other countries: including LNG sales

64.6 59.0

63.2 58.0

0

20

40

60

80

3Q2016 3Q2017

USD/RUB AVERAGE RATE

USD/RUB AS OF THE END OF PERIOD

USD/RUB USD/bbl

Market environment in 3Q2016 vs 3Q2017

Jul.

2017

-

Nov.

2017

• Sales to Europe +8.4% YoY at 170 bcm

from 1 Jan, 2017 to November 22, 2017

• Construction of the TurkStream pipeline continues,

over 520 kilometers of pipes laid

• Establishing a 50/50 joint venture with BOTAS for

the construction and operation of the onshore

transit gas pipeline in Turkey

• +40% to access of OPAL pipeline

• Supplementary Agreement signed with China to

supply gas via Power of Siberia starting December

20, 2019

• Over 1,120 km of the Power of Siberia pipeline

completed. Construction continues

• First foundation laid for Amur GPP

USD/mcm

159.2

194.6

0

50

100

150

200

3Q2016 3Q2017

AVERAGE GAZPROM GAS SALES

PRICE IN EUROPE & OC

3,677 3,692

0

1,000

2,000

3,000

4,000

3Q2016 3Q2017

AVERAGE GAZPROM GAS PRICE IN

RUSSIA

RUB/mcm

1

5

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1,432

356 200

336 166

2,639

-300

0

300

600

900

1,200

1,500

1,800

2,100

2,400

2,700

Total net sales Adj. EBITDA Net profit Capex Operating CF FCF Net debt

1 2 3

(69%)

4

(170)

1 EBITDA adjusted for changes in impairment provisions 2 Profit for the period attributed to shareholders of PJSC Gazprom 3 Cash capital expenditures 4 Compared to Net debt as of December 31, 2016

SUMMARY OF 3Q2017 IFRS FINANCIAL RESULTS

+14%

(32%)

+37%

+18%

3Q2016 vs 3Q2017

RUB bn

RUB bn

+96%

(3%)

*In order to reflect the effects of the bank deposits (reported as part of Other current and

non-current assets)

Adjustments needed

for analytical

purposes*

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12.1 12.5 11.9 12.1 12.6

0.0

5.0

10.0

15.0

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

3.7 4.2 4.1 3.9 3.7

0.0

1.0

2.0

3.0

4.0

5.0

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Crude oil Gas condensate

Gazprom Group’s volumes produced in Russia

Calculations may differ due to rounding.

mt mt (1%) +5%

PRODUCTION

35.2

45.7 44.8

35.2 32.9

0

10

20

30

40

50

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

10.6

45.9 49.5

21.5

9.9

0

20

40

60

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Electricity Heat

bn kWh mn Gcal (6%) (7%)

89.0

134.1 127.2

106.1 107.3

0.0

50.0

100.0

150.0

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Natural gas

bcm +21%

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30

75 82

42 33

3,677 3,848 3,820 3,646 3,692

0

1000

2000

3000

4000

0

25

50

75

100

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

VOLUMES AVERAGE PRICE IN RUSSIA

52 67 66

54 55

159 178

191 192 195

0

50

100

150

200

0

20

40

60

80

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

VOLUMES AVERAGE PRICE IN EUROPE & OC

GAS SALES

110

289 312

154 121

0

100

200

300

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

NET SALES TO RUSSIA

RUB/mcm bcm

RUB bn

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

418

593 594

460 494

0

200

400

600

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

NET SALES TO EUROPE & OC

RUB bn

bcm

6

11 13

6 6

141 152 155 160 165

0

50

100

150

0

5

10

15

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

VOLUMES AVERAGE PRICE IN FSU

48

95 102

49 51

0

50

100

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

NET SALES TO FSU

bcm USD/mcm USD/mcm

1

Russia Europe & OC2 FSU

3,4 3,4

RUB bn

+10% 18% 6%

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40%

53%

7%

OIL AND ENERGY BUSINESS

Calculations may differ due to rounding. 1 Net of value added tax (VAT), excise tax and custom duties.

Net Sales1

498 542 533 522

561

0

200

400

600

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

86

159 160

103 86

0

50

100

150

200

3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

RUB bn

0%

3Q2016 3Q2017

+14%

Electricity and heat Crude oil and gas condensate; refined products

39%

55%

6%

CRUDE OIL AND GAS CONDENSATE; REFINED

PRODUCTS

GAS BUSINESS AND OTHER REVENUES

ELECTRICITY AND HEAT

RUB bn

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According to Gazprom 3q17 IFRS report1:

BANK DEPOSITS

Key features of bank deposits2:

• Early withdrawal clause

• Deposit term of over 3 months

• Are NOT included in Сash and cash equivalents

Impact of substantial increase in bank deposits:

• Decrease in Cash and cash equivalents

• Increase in Net Debt and Net Debt/EBITDA

• Reduction in Cash flows from operating activities3

(changes in working capital)

• Decrease in Free cash flow3

127 144

472 503 507

5 42

41 1 3

0

200

400

600

2015 2016 1Q2017 2Q2017 3Q2017

LT DEPOSITS

ST DEPOSITS

RUB bn 513

186 132 XX

TOTAL DEPOSITS

1 Source: Gazprom 3Q2017 IFRS report, page 19 2 Reported as a part of Other current assets and Other non-current assets

In 3Q2017 Gazprom substantially increased

bank deposits volumes

Increase in LT and ST bank deposits is aimed at improving the efficiency of liquidity management

3 Affected by ST deposits

504 510

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KEY DEBT METRICS

3Q2017 adjusted Net Debt structure2

Total Debt breakdown by currency Total Debt and Net Debt

Cash, cash equivalents, bank deposits

breakdown by currency

1,113 1,651

2,083 1,933 2,639 689

1,038

1,359

897

500

0.5

0.6

0.9 1.6

1.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

2,000

4,000

6,000

2013 2014 2015 2016 3Q2017

NET DEBT CASH & EQUIVALENTS NET DEBT/ADJ.EBITDA LTM

RUB bn

1

1 Calculated using dollar values of Net debt and EBITDA 2 Net Debt adjusted for the bank deposits reported as a part of Other current and non-current assets

RUB

19%

USD

39% EUR

40%

Other

2%

RUB

59%

USD

18%

EUR

16%

Other

7%

3,138

(500)

2,639

(507)

(3)

2,129

1.8

1.5

0

0.5

1

1.5

2

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Total Debt Cash &

equivalents

Net Debt

reported

ST deposits LT deposits Net Debt

adjusted

Adj.Net Debt/Adj.EBITDA LTM

RUB bn x

1

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1,262

1,641

1,369

1,069

988

0

400

800

1200

1600

2014 2015 2016 9M2016 9M2017

Cash CapEx

1 CapEx breakdown as provided in Management Report

CAPITAL EXPENDITURES

+30% (17%)

(8%)

RUB bn

35%

22%

16%

16%

3%

8%

TRANSPORT

PRODUCTION OF CRUDE OIL AND GAS CONDENSATE

PRODUCTION, DISTRIBUTION AND STORAGE OF NATURAL GAS

REFINING

ELECTRICITY AND HEAT

OTHER CAPEX

The Group’s 9M2017 CapEx breakdown1

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KEY GAS BUSINESS INVESTMENT PROJECTS

St. Petersburg

Moscow

Torzhok

Blagoveshchensk

Ukhta

Greifswald (Germany)

KEY INVESTMENT PROJECTS

RUB BN — CAPEX 2017, (INCL. VAT)

POWER OF SIBERIA

212 RUB BN

AMUR GPP

102 RUB BN

CHAYANDA FIELD

72 RUB BN

UKHTA-TORZHOK 2

81 RUB BN

NORD STREAM 2

102 RUB BN

TURKSTREAM

93 RUB BN

Anapa

BOVANENKOVO FIELD

48 RUB BN

RUSSIA

CHINA TURKEY

Kiyikoy (Turkey)

GERMANY

PJSC Gazprom (parent company)

2017 Investment Program

1,129 RUB BN

(INCL. VAT)

SMALL-SCALE LNG

AT PORTOVAYA CS

47 RUB BN

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ADDITIONAL INFORMATION

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RUSSIAN NATURAL GAS BALANCE

Source: Company Operating Data

Bcm 3Q2016 3Q2017 9M2016 9M2017

Natural gas resources 149.2 169.1 498.5 556.2

Domestic gas production 141.4 160.3 449.4 502.9

Other sources including Central Asia and Azerbaijan gas 5.4 6.8 16.3 19.2

Gas from underground storage facilities in Russia. Latvia

and Europe 1.4 1.3 29.8 31.4

Decrease in the amount of gas within the gas

transportation system 1.0 0.8 3.0 2.7

Natural gas distribution 149.2 169.1 498.5 556.2

Domestic consumption 81.1 83.9 309.5 327.2

including needs of the gas transportation system

and underground storage facilities 6.6 8.7 21.1 26.7

Gas pumped into underground storage facilities 16.5 28.9 26.5 48.9

Gas for LNG production 3.4 3.5 10.5 11.3

Foreign supplies 41.9 46.4 128.0 143.9

FSU supplies 5.5 5.5 21.3 22.3

Increase in the amount of gas within the gas

transportation system 0.8 0.9 2.7 2.5

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THANK YOU!

3q2017 ifrs results - gazprom · 3 26; 124;195 150; 150; 150 68; 103; 124 69; 165; 187 245; 190; 50...

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