Rostelecom · RUS:RTKM
Rostelecom — ESG Presentation (2021)
36 slides from Rostelecom's sustainability presentation, 2021
Slide 1: Driving Sustainable Digital Connectivity
P rostelecom DRIVING SUSTAINABLE DIGITAL CONNECTIVITY
Slide 2: Scope & sources of information
Scope & sources of information Scope The financial data is sourced from consolidated IFRS statements and refers to PISC Rostelecom including consolidated subsidiaries unless stated otherwise. The social data for 2017-2020 refers to PISC Rostelecom including most significant subsidiaries (>95% of the
Slide 3: Focus on sustainable development in the midst of digitalization
Focus on sustainable development in the midst of digitalization We use technology to transform global challenges into infinite possibilities, empower people and communities, and protect the planet. Our ESG priorities Fair remuneration Reducing emissions ea Good a of NY efficiency governance /. , Sha
Slide 4: 2020 ESG highlights
2020 ESG highlights ae Environmental -8% -1% -23% 174 RUB mn 4 Notes: data for FY 2020, the yoy change for FY 202 reduction in direct & indirect GHG emissions (Scope 1 & 2) reduction in energy consumption reduction in water consumption Environmental investments and expenditures 2000 coy cap) Social
Slide 5: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • •
Slide 6: Strategic ESG initiatives
Strategic ESG initiatives Environmental Reduce energy consumption by 15% by 2025 (excl. Data Centres and Cloud cluster) * Increase renewable energy use * Programmes to collect and recycle used cables, network equipment and devices + Launch of Green Office environmental management systems across all
Slide 7: Contribution to society in 2020
Contribution to society in 2020 Employees Shareholders State Society Environment 132.3 175 143 1.0 0.5 RUB bn RUB bn RUB bn RUB bn RUB bn Wages, social taxes, Dividends Income and other taxes Member fees, charity Environmental pension funds contribution, payments programs and energy contributions, h
Slide 8: Environment
? Environment
Slide 9: Commitment to environmental progress
Commitment to environmental progress & consistent reduction in emissions 174 RuB mn Expenditures on environmental programmes in 2020 +7% yoy 304 RUB mn Expenditures on internal energy efficiency projects in 2020 +24% yoy -2% Reduction in Direct GHG (Scope 1) emissions in 2020 yoy Direct GHG emission
Slide 10: Energy efficiency as a priority
Energy efficiency as a priority -11% 10% 2025 Energy target: reduction in total energy increase in energy used in data- Reduce energy consumption by consumption in 2020 yoy centers in 2020 yoy 15% by 2025 (excl. Data Centres and Cloud cluster) Energy consumption Energy used in data-centres MWh mn MW
Slide 11: Smart approach to water consumption and waste generation
e Smart approach to water consumption and waste generation ‘] -23% reduction in water consumption in 2020 yoy Water consumption |) mncum Notes: (1) The data on water consumption does not include Tele? 2) -/]% reduction in waste generated in 2020 yoy Waste generated K tonnes 341 | ~~ 8 2019 2020 18 t
Slide 12: Social
Slide 13: Employee highlights
Employee highlights Contribution to employees in 2020 Health & safety Pension funds expenses contributions 1% Training costs % 0.3% Social taxes . 20% Share-based 1 3 2? remuneration # “ RUB bn Wages 75% +15% Increase in average salary in 2020 yoy 128.6 136.7 133.7 135.2 20% 18% 2b al. 66% 66% 60% 6
Slide 14: Supporting diversity
Supporting diversity Rostelecom was included in 4 ? % Bloomberg Gender-Equality Index in 2020-2021 of female employees among the workforce Gender diversity & equality : Bloomberg 16% : Bloomberg = Gender-Equality fo AA% 44% 12% 1, Gender Equality Index 2021 28% 29% 30% ove Yo —Female employees, % —F
Slide 15: Employee training & safety
Employee training & safety RUB 443 mn Training expenses in 2020 Employee training investment 5.5 5.0 46 35 575 464 496 | 443 20177-2018 = 2019-~—S- 2020 I Training costs, RUB mn — Average cost per employee, k RUB for Employee training PJSC Rostelecom not including subsidia +Qx, CAGR of training expe
Slide 16: Improving employees' living conditions through Housing Programme
Improving employees' living conditions through Housing Programme 55k RUB 15 bn up to 10 years Employees received financial Allocated to the Program Period of financial assistance assistance through the programme in 2016-2020 as interest-free loans in 2016-2020 and/or interest expense reimbursements
Slide 17: Charity & social programme 'Digital Equality'
Charity & social programme ‘Digital Equality’ Key goal of the social programme ‘Digital Equality’ - better access to education for children and elderly RUB 0.2 bn 3k 38k Funds distributed for charitable Employees regularly involved in Seniors participated in ‘Internet causes in 2020 volunteering pro
Slide 18: Making social impact through unique infrastructure...
Making social impact through unique infrastructure... Physical infrastructure Commercial 38 mn Households covered by fibre 132k Racks in data centers Under ‘Digital Economy’ programme 12 4k 19 Settlements connected Public institutions under the BDD project connected to the Internet (Target-2024: 14k
Slide 19: .. and Smart City projects
.. and Smart City projects © +32% Revenue growth from Smart City projects in 2020 3.9k Complexes of photo and video recording of traffic violations in 57 regions (+26% yoy) 4 Note The yoy growth for 2020 vs. 2019is shown unless stated otherwise. @ 310k Video cameras installed in 15 regions (+24% yoy
Slide 20: Protecting privacy with information security services
Protecting privacy with information security services Highlights 2020 J 2 0 70% 140 I Revenue growth from Share of internally Clients of Solar JSOC - information security developed services in largest commercial services portfolio centre monitoring and responding to cyber fo) threats & market leader
Slide 21: Governance
? Governance
Slide 22: Ownership structure
Ownership structure Free-float 29.0% i | State share: '50%+1 share Ordinary Number of shares = 3,282,9971929 Telecom Investments 21.0% ¢ VEB 3.4% VTB Bank (under the shareholder agreement) 8.4% Note: Information as of May 31, 2021. Mobitelis a subsidiary of PSC Rostelecom. Rosimuschestvo 38.2% Free-
Slide 23: Progressive dividend policy 2021-2023
Progressive dividend policy 2021-2023 Dividend increase y-o-y Dividend per share 29 RUB >5x% Historic dividends total (RUB bn) 17.5 17.5 141 13.9 100% 69% 2017 2018 2019 2020 2017 m % of FCF 94% 93% Total dividend payout as share of Net Profit 250% & <100~% Historic dividend payout 106% 77% 77% | T
Slide 24: Governing bodies
Governing bodies Board of directors Management board 2 2 2 O00 OO000 VANE IV CVF Vf V7 5 ‘9 ‘9 OO 11 members 0000 8 members CIF VV IN 7) CIC VN) Executi “ea No Independent non- orecutve % Non- % executive 7 of independent directors of female members in in the Board the Management board years old - a
Slide 25: Board expertise & remuneration
Board expertise & remuneration Board members’ competences Board members’ remuneration (2) RUB mn Economics & Finance QoQ eaeeae& 11 aa Q0000000000 ; 277 28.0 298 Strategy fantantentententententententenien tee loom em em em ememem emcee) Corporate Governance AAA | | icati oOo000 0 Telecommunications
Slide 26: Management remuneration
Management remuneration Remuneration structure of the Management board Basic salary Target ratio 50/50 - Annual bonus based on business KPIs Long-term incentive programme System of KPls for short-term remuneration Corporate KPIs Business KPIs: President & Management board 1% 3% 20% 40% ao 20% a HH O
Slide 27: Long-term incentive programme
Long-term incentive programme SMP Co-financing principle (share matching plan) KPIs YY Net Profit up to 2% of share capital dedicated to the programme each cycle >5Ox% of additional shares granted under previous cycles senior management has to keep to participate in the 2nd & 3rd cycles 3 cycles 202
Slide 28: Indices and ratings
Indices and ratings AKCNEPT In 2020 among Top 10 Russian companies of the Expert magazine's sustainability ranking (the highest score among telcos) / Bloomberg \ Included in Bloomberg’s 2021 Gender-Equality Index (for the second year in a row) FTSE4Good Constituent of the FTSE4Good Index series sinc
Slide 29: ESG data
ESG data
Slide 30: Environmental data
e Environmental data Operational data Greenhouse gas (GHG) emissions Direct GHG emissions (Scope 1) Indirect GHG emissions (Scope 2) Total GHG emissions (Scope 1& 2) Indirect GHG emissions (Scope 3) (1) Total energy consumption Fuel and energy consumption Electricity Heat Natural gas Liquefied gas C
Slide 31: Social data
Social data ‘Average number of employees Group PJSC Rostelecom standalone Consolidated subsidiaries Payroll Wages, salaries, other benefits and payroll taxes Salary expenses Share-based remuneration Social taxes Loss / (gain) for pension plans Other personnel costs Average salary Charity Member fees
Slide 32: Social data (cont.)
Social data (cont.) 2019 Units 2017 2018 med 2020 Comments Diversity Number of women among employees people YE 64,474 60,999 65,486 62,274 Share of women among employees % 45.8% 44.1% 43.9% 424% Share of women among management % 28.1% 29.1% 30.0% 313% Gender wage gap (based on total income) % 20.6%
Slide 33: Governance data
Governance data Board of Directors & Management Board Board of Directors Size # Independent directors # Non-executive directors # Executive directors % Independent directors % Non-executive directors CEO-Chairman duality Independent lead director Board gender diversity # Board meetings Board member
Slide 34: Governance data: share capital
Governance data: share capital Units 2017 2018 2019 2020 Share capital Ordinary shares shares 2574914954 2574914954 2574914954 —3.282,997,929 Preferred shares shares 209,565,147 209,565,147 209,565,147 209,565,147 Total number of shares shares 2784480101 —-2,784,480,101 «784,480,101 3,492,563,076 Sh
Slide 35: 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 36: Contacts
Contacts Investor relations Office: +7 (499) 995 9780 E-mail: ir@rt.ru Web: www.company.rt.ru/en/ir/ 4 36