Rostelecom · RUS:RTKM
Rostelecom — FY2020 Earnings Presentation
33 slides from Rostelecom's earnings presentation, Mar 9, 2021
Slide 1: Financial & operational results 4q & FY 2020
Financial & operationa results Aq & FY 2020 March 9th 2021 Mikhail Oseevskiy, President - Chief Executive Officer Vladimir Kirienko, First Vice President Sergey Emdin, CEO of Tele2 Russia Sergey Anokhin, Senior Vice-President - Chief Financial Officer Rostelecom Ekaterina Ustinova, IR Director
Slide 2: Disclaimer
Disclaimer By attending any meeting where this presentation is made, or by reading any part of this presentation, you acknowledge and agree to be bound by the following: This presentation has been prepared by PJSC Rostelecom (the “Company’). This presentation is strictly confidential to the recipien
Slide 3: Key achievements of 2020
Key achievements of 2020 +154 Revenue growth +15% 2 Mobile revenue growth +1 49% cui OIBDA growth +59y Revenue growth in digital services +16% & Net profit growth 22.7 RUB bn (4 Free cash flow (FCF)
Slide 4: Key financials of 4q & FY 2020
Key financials of 4q & FY 2020 RUB bn Revenue OIBDA OIBDA margin Net profit Free cash flow CAPEX excl. state programmes CAPEX / Revenue excl. state programmes CAPEX for state programmes Net debt ") Net debt / OIBDA 4qi9 132.9 40.6 30.6% -0.8 15.7 42.9 32.3% 16.0 333.0 2.0 4q20 163.0 445 27.3% -21 17
Slide 5: National digitalisation in 2020
National digitalisation in 2020 Infrastructure projects —= 124s Settlements connected under the BDD project (106 k km fibre optic constructed) Targets 2021: 14 k settlements connected 19 k Public service offices connected to high speed Internet (18 k km fibre optic constructed) 30 k offices connecte
Slide 6: Company transformation in 2020
Company transformation in 2020 =) TI: =|. | Rostetecom DATA CENTERS Creation of the largest Cementing leadership in Milestone partnership for data integrated operator in Russia - data center market through center and cloud businesses acquisition of 55% in Tele2 acquisition of DataLine development th
Slide 7: Delivering on dividend policy is a priority
Delivering on dividend policy is a priority Management will recommend a payment of RUB 5 per share for FY2020, i.e. 77% of FCF & 69% of Net profit >75% 2 NEE 5Ox< 8 <100% of Free Cash Flow per ordinary share of Net Income
Slide 8: Operational performance
Operational performance Rostelecom
Slide 9: Strong results across all business segments drive double-digit revenue growth
Strong results across all business segments drive 4 double-digit revenue growth Revenue structure by services (RUB bn) Revenue structure by segments (RUB bn) RUB bn 4qi9 4q20 yoy 2019 2020 yoy 2020 TT 2598 Mobile services 42 473 «147% «©1688 «= 177.0—-15.1% += b2c +6% yoy 2019 EE 245.8 Fixed broadba
Slide 10: Digital services and mobile business — key revenue drivers
Digital services and mobile business — key revenue drivers Revenue structure 4% 13% 32% 16% 2019 oN ~ 18% 10% 6% 0% 32% 4% 2020 wN aS 14% W% +4 pp Increase in the share of digital services in revenue Revenue drivers (RUB bn) 2019 ~~ 475.8 Mobile services m Fixed broadband m Digital services B Ve Who
Slide 11: Solid growth in mobile business in 2020
Solid growth in mobile business in 2020 4 +] Hy call Revenue growth from mobile services A6.6 mn Mobile subscribers (+15% yoy) +20% (5 Growth in active mobile Internet users +10% Increase in ARPU of Tele2 to RUB 341 2.8 p.p. 22 Decrease in yearly churn to 33.4% +58y% Increase in data traffic 1
Slide 12: Tele2: key achievements of 2020
Tele2: key achievements of 2020 68 “ae Regions reached the coverage of the company's networks (+ Republic of Altai) +5Ox Growth in big data revenue from external customers +33% A Growth in the number of LTE base stations in Moscow +12% Growth in consumption of voice services 96%/93% = Coverage by 4g
Slide 13: Stable growth in core connectivity services
Stable growth in core connectivity services 4 Advanced development of new products in b2c b2c +6% fF +22% 22 +10%8 S5xG& Revenue growth in b2c Growth in broadband Fibre broadband Growth of the segment subscriber base revenue growth ‘Convergent’ product b2c revenue (RUB bn) Broadband subscribers (mn)
Slide 14: Leading position in the corporate segment
Leading position in the corporate segment 4 Growth in core and digital services b2b/g +33% 4 +15%© +B30%S +62%0 Revenue growth in b2b/g Revenue growth from Revenue growth from Revenue growth from segment broadband & VPN Videosurveillance contact-centres b2b/g revenue (RUB bn) Broadband & VPN revenue
Slide 15: Digital services — leading growth
Digital services — leading growth 4 2019 a? A85 " \ RUB bn Joss Revenue growth 2 2x from Data centres 2020 +80% yoy a 7/7 Ig Smart City project (incl. E- Government) +59% jm Data centres, Xaas & 3 389 Information security 1 Other digital services RUB bn +32% yoy 25.0 2.2x yoy 2 3x2 from Virtual data
Slide 16: Development of infrastructure services in operator segment
Development of infrastructure services in operator 4 segment aN +30! iy Growth in O20 project revenue +26 k km® Growth in the volume of serviced fiber-optic lines (+18% yoy) +14 op. ailll! Increase in marginality of b20 segment +9O5k 4 Growth in the number of serviced base stations (+15% yoy) b20 +3
Slide 17: Financial results
Financial results Rostelecom
Slide 18: Strong OIBDA & net income dynamics
Strong OIBDA & net income dynamics OIBDA Net profit +9.5% yoy 413.7% 163.7% yoy +15,.9% | yoy | yoy 'Y % 39.8% 8.9% s08% 88.7% SBa% SSB 35.9% 355% . .6% e 3%, 1% 273% . 1941 1% 5 5 ° ° 1707 ; ° ° 46% 4.6% e e 19 25.3 406 471 488 5387 445 -06% 77 77 13% f 12.07" | [| | | | | ° 3 # . | Soo 4q19 1q20.-
Slide 19: Increase in personnel efficiency and real estate portfolio optimisation
Increase in personnel efficiency and real estate 4 portfolio optimisation +14% 0 Increase in staff productivity Revenue per employee (RUB mn) 20200 —— 4,O 20190 3.5 After Tele? acghisition oo. 2019 27 2018 25 207 — 2.3 — % ons Real estate portfolio optimisation Real estate space (mn sq. m) 2020 7.5
Slide 20: Dynamics of capital expenditures and FCF
Dynamics of capital expenditures and FCF CAPEX excl. state programmes Free cash flow (FCF) -15.6% yoy +1.4% +2.2 RUB bn yoy -7.6 RUB | yoy | | bn yoy 9 823% 303 9 9 181% 19.4% 0% 772% 22.2% 196% 187 5 179 uy ° ° ° 10571071 428 990 «247 «243: 36-2 | | oes « « 8 69-88 4q19 1g20-2q20-3q20-4q20 2019 202
Slide 21: Comfortable leverage profile
Comfortable leverage profile Gross & net debt Debt structure by maturity +11.9% / +8.8% yoy | 2020 2.2 2.2 22 9 20 : : i 19 2021 7% . 4448 4433 yy 2022 1% 4297 ; . Gross debt, RUB bi 3618 . S449 Ill Gross debt, RUB bn 2023 37% = | = Net debt, RUB bn © Net debt / OIBDA, x 2024 25% 3930 3928 4071 4100
Slide 22: Guidance for FY 2021
Guidance for FY 2021 Revenue OIBDA Cash CAPEX growth growth >5x% >5x% 110-115 RUB bn (excl. state programmes) By providing this outlook, we reserve the right to revise or update it at any subsequent period in case of events which, in our opinion, can increase uncertainty, including but not limited t
Slide 23: Financial & operational data
Financial & operational data Rostelecom
Slide 24: Balance sheet: assets
Balance sheet: RUB bn ASSETS Non-current assets Property, plant and equipment Goodwill and other intangible assets Right of use assets Trade and other accounts receivable Investment in associates and joint ventures Other financial assets Other non-current assets Investment property Deferred tax asse
Slide 25: Balance sheet: equity & liabilities
Balance sheet: equity & liabilities RUB bn EQUITY AND LIABILITIES Equity Share capital Treasury shares Retained earnings and other reserves Total equity attributable to equity holders of the Group Non-controlling interest Total equity Non-current liabilities Loans and borrowings Lease liabilities Em
Slide 26: Profit & loss statement
Profit & loss statement RUB bn Revenue Operating expenses Wages, salaries, other benefits and payroll taxes Depreciation, amortization and impairment losses Interconnection charges Materials, utilities, repairs and maintenance Gain on disposal of PPE and intangible assets Impairment loss of financia
Slide 27: Cash flow statement: operating
Cash flow statement: operating RUBbn 1q19-2qI9 GmI9._—SqI9_- GmI9.AgI9.« «2019. = 1g20- 2g M20 Sq2O_--9m20 4q2O_-—-2020 Cash flows from operating activities Profit before tax 9528 7.808 17.336 11146 28.482 (1.089) 27.391 10.054 10.017 20.071 15.388 35.459 (1.452) 34.007 Depreciation, amortization an
Slide 28: Cash flow statement: investing & financing
Cash flow statement: investing & financing RUB bn. Cash flows from investing activities Purchase of PPE and intangible assets Proceeds from sale of PPE and intangible assets Acquisition of financial assets Proceeds from disposals of financial assets Interest received Subsidy from Government Dividend
Slide 29: Revenue
Revenue RUB bn. By services Mobile services Fixed broadband Digital services Vv Wholesale services VPN Interconnect and traffic transit Infrastructure s Fixed telephony Other services Mobile services Fixed broadband Digital services TV Wholesale services VPN Interconnect and traffic transit Infrastr
Slide 30: Operational data
Operational data Change yoy Igi92qi9 SqI9 gl 2019 1q20_ 2q20 8q204q20 2020 tapong aq20/10 SepO/ 4q20/19 20/19 SUBSCRIBERS, MN Local telephony 169 = 165 1.0 66 156 162 149 145 400 ©1140 10.2% -96% 9.4% 9.7% -9.7% B2C 138 135 13.0 126 126 123 120 17 m3 m3 12% 105% -103% 10.4% -10.4% B2B 31 3.0 3.0 29
Slide 31: Additional metrics: OIBDA & Net debt
Additional metrics: OIBDA & Net debt Change yoy RUB bn Iq 2qI9_-Ba19_— AIO 20191420 AGRO 3424420 2020 arg ng oqno/1e sq2o/Na Aq20/19 20/19 OIBDA Operating profit 16.764 16.002 18724 9.792 61280 18.947 18.557 23.087 8374 68965 130% 160% 233% 14.5% 12.5% Depreciation, amortization and impairment losse
Slide 32: Additional metrics: FCF & CAPEX
Additional metrics: FCF & CAPEX Change yoy RUB bn Iqi9 2ql9 Bqi9. 4qi9.S 2019 1q20 2q20 3q20 4q20 2020 4 a a q 4 “ “ “ 1q20/19 2q20/19 3q20/19 4920/19 20/19 FREE CASH FLOW Net cash from operating activities 14.916 33.186 34.908 57.929 140.937 17.033 15.794 45.938 58.025 136.790 14.2% -52.4% 316% 0.2
Slide 33: Contacts
Contacts Investor relations Office: +7 (499) 995 9780 E-mail: ir@rt.ru Web: www.company.rt.ru/en/ir/ Rostelecom