GAZPROM: 2Q 28 IFRS RESULTS AUGUST 3, 28 2Q28 IFRS RESULTS
Alexander Ivannikov Head of Department 2Q28 IFRS RESULTS 2
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 forwardlooking 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. 2Q28 IFRS RESULTS 3
KEY HIGHLIGHTS: STRONG FINANCIAL RESULTS IN 2Q28 Key factors: Record high gas exports to Europe Gas, oil and oil products price growth High level of cost control, optimization and prioritisation of CAPEX schedule Ruble weakening Oil business growth Key highlights: 2q8 EBITDA growth +64% y-o-y in Rubles 6 consecutive quarters of LTM EBITDA growth USD bn 35 Significant 2q positive Free cash flow RUB 96 bn*, h RUB 365 bn* Reduction of debt burden continues: Net debt/ebitda decreased to. q-o-q (. in Q28)* +6% 3.7 3 28.6 25. 25. 25 23.7 2.5 9.8 2 5 26 q7 2q7 3q7 27 q8 2q8 EBITDA LTM * Adjusted for bank deposits 2Q28 IFRS RESULTS 4
KEY EVENTS AND MARKET ENVIRONMENT Market environment in 2q8 vs 2q7 Gas production increased by 7.5% YoY to 325 bcm as of 8M28, exports to Europe increased by 5.6% YoY to 33 bcm (preliminary estimations). 8 6 USD/bbl 49.8 48.8 74.8 72.6 USD/RUB 8 57. 59. 6 6.8 62.8 Over 9% of the first phase of the Power of Siberia pipeline laid 4 2 4 2 Jan 28 - Aug 28 The first string of the TurkStream reached Turkish coast. About 8% of both strings of the pipeline already laid. Gazprom and Turkey agreed on the onshore section of the second string of the TurkStream Germany, Sweden, Finland and Russia granted all required approvals to build the Nord Stream-2 pipeline. Gazprom reached agreement with European authorities on the antimonopoly investigation 25 2 2q7 BRENT USD/mcm 92.4 2q8 URALS 238.4 2q7 2q8 USD/RUB AVERAGE RATE USD/RUB AS OF THE END OF PERIOD RUB/mcm 4, 3,646 3,823 3, The Shareholders Meeting approved RUB 8.4 per share in annual dividends. Moody's and S&P upgraded Gazprom s ratings to investment grade 5 5 2q7 2q8 AVERAGE GAZPROM GAS SALES PRICE IN EUROPE & OC 2,, 2q7 2q8 AVERAGE PRICE IN RUSSIA 2Q28 IFRS RESULTS Source: Company data, Bloomberg, Bank of Russia website OC - Other countries: including LNG sales 5
GAS SALES Russia Europe & OC 2 FSU bcm 75 5 25 RUB/mcm 3,942 3,974 3,646 3,692 3,823 4 3 2 88 73 42 33 4 2Q7 3Q7 4Q7 Q8 2Q8 bcm 8 6 4 2 USD/mcm 29 232 238 92 95 25 2 5 72 68 54 55 57 5 2Q7 3Q7 4Q7 Q8 2Q8 bcm 2 5 5 USD/mcm 6 65 57 55 49 5 4 5 6 6 7 2Q7 3Q7 4Q7 Q8 2Q8 VOLUMES AVERAGE PRICE IN RUSSIA VOLUMES AVERAGE PRICE IN EUROPE & OC VOLUMES AVERAGE PRICE IN FSU +3% +42% +3% 4 3 2 54 2 288 35 58 8 6 4 2 46 494 674 758 653 5 49 5 9 56 2Q7 3Q7 4Q7 Q8 2Q8 2Q7 3Q7 4Q7 Q8 2Q8 2Q7 3Q7 4Q7 Q8 2Q8 NET SALES TO RUSSIA 3,4 3,4 NET SALES TO EUROPE & OC NET SALES TO FSU Calculations may differ due to rounding. 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 2Q28 IFRS RESULTS 6
OIL AND UTILITIES BUSINESS Net Sales 2Q27 56% 2Q28 56% CRUDE OIL AND GAS CONDENSATE; REFINED PRODUCTS GAS BUSINESS AND OTHER REVENUES 37% 7% 39% 5% ELECTRICITY AND HEAT Crude oil and gas condensate; refined products sales Electricity and heat sales 8 6 4 522 56 +37% 62 62 77 2 5 3 86 (4%) 54 75 99 2 5 2Q27 3Q27 4Q27 Q28 2Q28 2Q27 3Q27 4Q27 Q28 2Q28 Calculations may differ due to rounding. Net of value added tax (VAT), excise tax and custom duties. 2Q28 IFRS RESULTS 7
SUMMARY OF 2Q28 IFRS FINANCIAL RESULTS 2Q27 vs 2Q28 2,5 +3% Adjustments needed for analytical purposes* +% 2,,5 2,433,,833 +64% +44% +8% +42% +67% 5 572 259 355 486 3 3 2 3 Total net sales Adj. EBITDA Net profit Capex Operating CF FCF Net debt 4 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 3, 27 2Q28 IFRS RESULTS *In order to reflect the effects of the bank deposits (reported as part of Other current and non-current assets). See page 3 8
H28 ADJUSTED FREE CASH FLOW BREAKDOWN * FCF adjusted for changes in bank deposits remains positive at,2 29 Changes in bank deposits Reported as a part of Changes in working capital RUB 365 bn ($6.2 bn) in 6M28, 6 4 8 6,33 947 79 4 2 29 365 56 OCF before working capital changes Net working capital and operating items changes Tax paid OCF reported Capex FCF reported Adjustment for increase in ST deposits FCF adjusted * Free Cash Flow adjusted for changes in the ST bank deposits 2Q28 IFRS RESULTS 9
KEY DEBT METRICS Total Debt and Net Debt 6.5.4.5 Total Debt breakdown by currency 4 2.9,49,83.,99,437..5 USD 34% Other 8% EUR 38%,952,747 2,68,93 25 26 27 2Q28 CASH&CASH EQUIVALENTS (INCL. DEPOSITS) NET DEBT ADJ. FOR BANK DEPOSITS NET DEBT ADJ./ADJ.EBITDA 2Q28 adjusted Net Debt structure 2 4,..8 RUB 2% Cash, cash equivalents, bank deposits breakdown by currency 3,5 3, 2,5 2,,5, 3,367 934.2 2,433 496 8.,93.2.6 RUB 55% Other 4% USD 26% EUR 5% 5 Total Debt Cash & equivalents Net Debt reported NET DEBT ADJ./ADJ.EBITDA ST deposits LT deposits Net Debt adjusted Calculated using dollar values of Net debt and EBITDA. Net Debt adjusted for the bank deposits reported as a part of Other current and non-current assets 2Q28 IFRS RESULTS
CAPITAL EXPENDITURES Cash CapEx The Group s 2Q28 CapEx breakdown 8,64 (7%) +3% 3% 7%,369,46 2 8% 42% 6 +8% 33 355 25 26 27 2Q27 2Q28 5% USD bn 5% 3 27 53 (24%) +8% TRANSPORT 25 2 2 464 24 PRODUCTION OF CRUDE OIL AND GAS CONDENSATE PRODUCTION, DISTRIBUTION AND STORAGE OF NATURAL GAS 5 5 In line 5 776 5 753 REFINING ELECTRICITY AND HEAT 25 26 27 2Q27 2Q28 OTHER CAPEX CapEx breakdown as provided in Management Report 2Q28 IFRS RESULTS
INVESTMENT CASE BUSINESS GROWTH, ENHANCING SUPPLY SECURITY Conservative financial policy, cost control Improving FCF profile Balanced dividend policy STRONGER FINANCIAL OUTLOOK Strategic transformative projects (capex peaking in 28-29) Business growth in gas and oil segments; further growth potential Improving gas markets outlook. Spare production and export capacity BUSINESS GROWTH Outstanding resource base and infrastructure Low cost base High competiveness of Gazprom s gas. Record exports UNIQUE FUNDAMENTALS 2Q28 IFRS RESULTS 2
ADDITIONAL INFORMATION 2Q28 IFRS RESULTS 3
IMPACT OF BANK DEPOSITS According to Gazprom 2Q28 IFRS report : Key features of bank deposits 2 : Early withdrawal clause Deposit term of over 3 months Impact of bank deposits on Net debt: Bank deposits are NOT included in Сash and cash equivalents Net Debt and Net Debt/EBITDA need to be adjusted for bank deposits for analytical purposes Impact of changes in ST bank deposits on Cash flows: Changes in working capital (a part of Operating cash flows) include changes in ST bank deposits Operating cash flows and Free cash flow need to be adjusted for changes in ST bank deposits for analytical purposes 6 ST and LT bank deposits volumes 579 53 7 2 ST bank deposits changes 4 2 8 33 86 2 57 496 42 328 44 26 27 Q8 2Q8 LT DEPOSITS ST DEPOSITS - 243 244-35 -78 26 27 Q8 2Q8 Increase in LT and ST bank deposits is aimed at improving the efficiency of liquidity management Source: Gazprom 2Q28 IFRS report, page 2 2 Reported as a part of Other current assets and Other non-current assets 2Q28 IFRS RESULTS 4
PRODUCTION Natural gas Gas condensate Crude oil bcm +2% mt mt (2%) (2%) 5 6. 7.3 3.4 34. 9.3 4 3.9 3.7 4.3 4. 3.8 5 2. 2.6.9.7.9 5 2 5 2Q7 3Q7 4Q7 Q8 2Q8 2Q7 3Q7 4Q7 Q8 2Q8 2Q7 3Q7 4Q7 Q8 2Q8 Electricity Heat bn kwh mn Gcal (7%) (6%) 4 35.2 32.9 42.5 46.7 32.7 6 4 43.4 57.4 2 2 22.4.3 8.8 2Q7 3Q7 4Q7 Q8 2Q8 2Q7 3Q7 4Q7 Q8 2Q8 Gazprom Group s volumes produced in Russia Calculations may differ due to rounding. 2Q28 IFRS RESULTS 5
RUSSIAN NATURAL GAS BALANCE Bcm 26 27 H28 H27 Natural gas resources 78.2 77.29 46.26 387.2 Domestic gas production 64.4 69.9 364.8 342.66 Other sources including Central Asian and Azerbaijani gas 22.97 25.33 3.6 2.37 Gas withdrawn from underground storage in Russia, Latvia and Europe 5.98 5.45 37.8 3.5 Decrease in the amount of gas within the gas transportation system 3.85 3.3.23.94 Natural gas distribution 78.2 77.29 46.26 387.2 Domestic consumption 456.68 468. 258.8 243.33 including needs of the gas transportation system and underground storages 32.29 37.8 2.42 7.99 Gas pumped into underground storages 28.54 53.2 26.84 9.99 Gas for LNG production 4.7 5.46 8.3 7.78 Foreign supplies 8.68 97.4 2.3 97.49 FSU supplies 32. 32.88.7.78 Increase in the amount of gas within the gas transportation system 4.49 3.52 9.52 6.84 Source: Company Operating Data 2Q28 IFRS RESULTS 6
THANK YOU! 2Q28 IFRS RESULTS 7