Slide 1: PJSC Polyus Full Year 2016 Financial results
PJSC Polyus Full Year 2016 Financial results
Slide 2: 2016 key highlights
2016 key highlights Sustained growth, cost discipline and further deleveraging Continued strong top-line performance Gold sales increased 8% y-o-y to 1,915 koz driven by progress in the growth projects execution and focus on operational excellence Revenue amounted to $2,458 mln, as compared to $
Slide 3: Financial results
Financial results a, '~¢
Slide 4: 2016 financial highlights
Financial Results 2016 financial highlights 2016 2015 Y-o-Y Gold production, koz 1,968 1,763 12% 1 Average realised refined gold price excl. SPPP , $/oz 1,250 1,159 8% Average realised refined gold price incl. SPPP, $/oz 1,287 1,225 5% Total cash cost (TCC), $/oz 389 424 (8%) All-in-sustaining costs
Slide 5: Revenue analysis
Financial Results Revenue analysis Sales by mine dynamics, koz1 Revenue breakdown by mine, FY16, % 903 Other Kuranakh 1% 761 8% Alluvials 9% 424 450 Verninskoye 10% FY16 Olimpiada 161 186 168 169 144 160 47% 108 $2,458 mln 43 Titimukhta 2% Krasnoyarsk cluster Olimpiada Blagodatnoye Titimukhta Vernin
Slide 6: TCC & AISC performance
Financial Results TCC & AISC performance TCC dynamics by mines, $/oz AISC dynamics by mines, $/oz 813 782 582 598 598 745 748 725 498 499 609 567 416 405 414 417 535 530 389 465 345 444 425 290 Olimpiada Blagodatnoye Titimukhta Verninskoye Alluvials Kuranakh Olimpiada Blagodatnoye Titimukhta Vernins
Slide 7: Polyus TCC curve
Financial Results Polyus TCC curve Polyus TCC curve FY16 TCC, $/oz 600 500 The average FY16 TCC amounted to $389/oz 400 389 300 Titimukhta 200 100 Blagodatnoye Verninskoye Olimpiada Kuranakh Alluvials 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Polyus cumulative production, koz Highlights Glob
Slide 8: Polyus AISC curve
Financial Results Polyus AISC curve Polyus AISC curve FY16 AISC, $/oz 800 700 The average FY16 AISC amounted to $572/oz 600 572 500 400 Titimukhta 300 200 Blagodatnoye Verninskoye Olimpiada Kuranakh Alluvials 100 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Polyus cumulative production, koz Hig
Slide 9: Operating cash costs
Financial Results Operating cash costs The Group’s cash operating costs breakdown by item, FY15/FY16, $ mln Outsourced mining services Other Other Outsourced mining services 1% Labour 8% 7% 2% 32% Power Power Labour 3% 5% 27% Fuel 9% Fuel 10% FY15 During 2016, the Group’s cash FY16 $765 mln operatin
Slide 10: Adjusted EBITDA performance
Financial Results Adjusted EBITDA performance Adj. EBITDA and adj. EBITDA margin, FY16 Adj. EBITDA bridge, $ mln 900 90% 1,8 00 800 72% 80% 1,6 00 700 63% 64% 62% 70% 1,4 00 144 (12) 126 600 53% 60% 1,2 00 500 50% 40% 1,0 00 400 40% 1,536 800 717 300 30% 600 1,278 200 417 20% 400 200 100 10% 36 146
Slide 11: Cash flow dynamics
Financial Results Cash flow dynamics FY16 cash flow bridge, $ mln 350 0 300 0 1,178 250 0 (280) 200 0 32 150 0 (1,015) 100 0 1,825 1,740 500 0 Cash & CE Operating Investing Financing Effect of foreign exchange Cash & CE 31-Dec-15 CF CF CF rate changes 31-Dec-16 As of the end of 2016 the Group’s ca
Slide 12: Net working capital dynamics
Financial Results Net working capital dynamics FY16 net working capital bridge, $ mln 700 84 600 500 42 1 (35) (9) 400 300 Cash outflow $92 mln 495 200 412 100 0 2015 NWC Inventories Deferred expenditures Receivables Payables Translation + 2016 NWC non-OCF items The Group registered $92 mln of wor
Slide 13: Capex analysis
Financial Results Capex analysis Capex breakdown, $ mln $ mln 2016 2015 Y-o-Y Natalka 215 113 90% Olimpiada 80 39 105% Blagodatnoye 20 13 54% Verninskoye 24 21 14% Alluvials 16 5 N.M. Titimukhta ─ 1 (100%) Kuranakh 33 10 N.M. Exploration 10 7 43% Other (including power projects) 70 59 19% Total 468
Slide 14: Debt and cash structure
Financial Results Debt and cash structure By the end of 2016, the Group’s net debt amounted to $3,241 mln, as opposed Cash & CE breakdown by currency to $364 mln as of 31 December 2015 due to conducted share buyback The Group remains on a deleveraging path with the net debt/adjusted EBITDA RUB L
Slide 15: Debt maturity profile as of the end of 4Q 2016
Financial Results Debt maturity profile as of the end of 4Q 2016 Polyus has very comfortable debt maturity profile and proactively manages upcoming redemptions As of the end of 2016, the debt portfolio is represented by $2.5 bln Sberbank loan (2023), Eurobonds (2020 & 2022), local rouble bonds (
Slide 16: Debt structure evolution
Financial Results Debt structure evolution As of 30 September 2016 As of 31 December 2016 $2.5 bln • On 20 October 2016, Sberbank loan (2023) PGIL priced an issuance $2.5 bln Bank loans Bank loans Debt breakdown (50%) of USD 500 mln notes Sberbank loan (2023) (30%) (20%) due 28 March 2022 with (50%)
Slide 17: Strategic Price Protection Programme (SPPP) overview
Financial Results Strategic Price Protection Programme (SPPP) overview Primary part Secondary part Callable amount, 285 420 775 440 380 25 0 0 0 0 495 285 915 300 koz 2,000 Average gold price, $/oz (LBMA) 1,800 $1,714 $1,687 $1,611 $1,602 $1,620 $1,580 1,600 $1,531 $1,533 $1,519 $1,498 $1,491 $1,492
Slide 18: New dividend policy
Financial Results New dividend policy New dividend policy adopted in October’16 Payout ratio: 30% of adjusted EBITDA if Net Debt/Adjusted EBITDA < 2.5x Semi-annual dividend payments If Net Debt/Adjusted EBITDA > 2.5x, BoD will exercise discretion on dividends First dividend is expected to be
Slide 19: Operating results
Operating results a, '~¢ cr rs)
Slide 20: Operational Performance: Key highlights
Operational Performance Key highlights Sustained growth in refined gold production: 1,968 koz produced in 2016 (+12% y-o-y) The growth in output was mainly driven by an increase in volumes of ore processed, which reflects the results of the throughput capacity expansion projects at Olimpiada, Bl
Slide 21: Olimpiada
Operational Performance Olimpiada y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz Rock moved, kt 51,917 60,317 (13%) Strip ratio, t/t 4.3 20.7 (79%) (3%) Ore mined, kt 9,782 2,777 252% 2.67 416 405 Grade in ore mined, g/t 3.37 26% Ore processed, kt1 11,336 9,506 19% Grade in ore processed, g
Slide 22: Blagodatnoye
Operational Performance Blagodatnoye y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz Rock moved, kt 49,021 45,654 7% Strip ratio, t/t 3.3 5.0 (35%) (16%) Ore mined, kt 11,515 7,628 51% Grade in ore mined, g/t 2.01 1.97 2% 345 Ore processed, kt 7,753 7,512 3% 290 Grade in ore processed, g/t 2
Slide 23: Verninskoye
Operational Performance Verninskoye y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz Rock moved, kt 16,300 16,270 0% (7%) Strip ratio, t/t 3.9 3.1 24% Ore mined, kt 3,355 3,954 -15% 417 Grade in ore mined, g/t 2.20 2.09 6% 389 Ore processed, kt 2,501 2,284 10% Grade in ore processed, g/t 2.65
Slide 24: Alluvials
Operational Performance Alluvials y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz 3% Sands washed, km³ 8,611 9,370 (8%) 598 582 Average grade, g/t 0.61 0.56 9% Gold production, koz 168.5 168.3 0% 2015 2016 Highlights In 2016, Alluvial deposits produced 168 koz of gold in slime, which was f
Slide 25: Kuranakh
Operational Performance Kuranakh y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz Rock moved, kt 25,530 24,771 3% (17%) Strip ratio, t/t 5.0 5.2 2% Ore mined, kt 4,257 3,996 7% 598 Grade in ore mined, g/t 1.29 1.31 -1% 499 Ore processed, kt 4,223 3,909 8% Grade in ore processed, g/t 1.30 1.31
Slide 26: Titimukhta
Operational Performance Titimukhta y-o-y Operations 2016 2015 change TCC 2015 - 2016, $/oz Rock moved, kt 1,054 14,002 (92%) (16%) Strip ratio, t/t 1.6 3.3 (53%) 498 Ore mined, kt 412 3,225 -87% 414 Grade in ore mined, g/t 1.61 1.58 2% Ore processed, kt 500 1,515 -67% Grade in ore processed, g/t 2.2
Slide 27: Natalka
Operational Performance Natalka Operations 2016 2015 y-o-y change Rock moved, kt 421 1,102 (62%) Strip ratio, t/t 0.6 3.8 (82%) Ore mined, kt 255 227 12% Grade in ore mined, g/t 1.20 0.66 81% Ore processed, kt 45 38 18% Grade in ore processed, g/t 1.81 1.74 4% Recovery, % 72.3% 71.1% 1.2 ppts Gold p
Slide 28: Appendix
Appendix af
Slide 29: Balance sheet highlights
Financial Statements Balance sheet highlights Assets, $ mln 2016 2015 Non-current assets 3,371 2,672 Property, plant and equipment 2,938 2,023 Derivative financial instruments and investments 57 411 Inventories 264 184 Deferred tax assets 75 46 Other 37 8 Current assets 2,295 2,438 Inventories 369 2
Slide 30: Balance sheet highlights (cont.)
Financial Statements Balance sheet highlights (cont.) Equity and Liabilities, $ mln 2016 2015 Share capital 7 7 Additional paid-in capital 2,288 2,273 Treasury shares (3,712) − Cash flow hedge revaluation reserve 12 123 Translation reserve (2,720) (2,623) Retained earnings 3,617 2,196 Equity attribu
Slide 31: Profit and loss statement highlights
Financial Statements Profit and loss statement highlights change $ mln 2016 2015 y-o-y Revenue from gold sales 2,429 2,159 13% Other revenue 29 29 - Total revenue 2,458 2,188 12% Cost of gold sales (891) (876) 2% Other cost of sales (28) (25) 12% Total cost of sales (919) (901) 2% Gross profit 1,539
Slide 32: Cash flow highlights
Financial Statements Cash flow highlights $ mln 2016 2015 change y-o-y Profit before income tax 1,771 1,212 46% Finance cost, net 145 45 N.A. Interest income (40) (69) (42%) (Gain)/loss on derivative financial instruments and investments, net (119) 125 N.A. Amortisation and depreciation 148 128 16%
Slide 33: Disclaimer
Disclaimer The information contained herein has been prepared using information available to PJSC Polyus (“Polyus”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Polyus and the content of this presentation, since its preparation. In ad