SOLLERS IFRS RESULTS 1H2017 28.08.2017
2 1. 1H2017 SOLLERS STRATEGIC DEVELOPMENTS 2. RUSSIAN AUTOMOTIVE MARKET OVERVIEW 3. SOLLERS OPERATING AND FINANCIAL PERFORMANCE IN 1H2017 4. SOLLERS JOINT VENTURES RESULTS
3 SOLLERS STRATEGIC DEVELOPMENTS JANUARY SsangYong starts sales of new Tivoli and XLV in Russia MARCH UAZ launches UAZ FINANCE services for retail sales financing and leasing for corporate clients JUNE UAZ doubled export sales in 1H2017 to 1.9 k units (1H2016: 0.9 k units) JUNE MAZDA SOLLERS JV starts assembly of new Mazda CX-5 in Vladivostok JUNE Ford Sollers JV: retail sales up 24% in June 2017 vs. June 2016 JULY UAZ presents pilot version of UAZ Cargo with hybrid power unit
4 UAZ STRATEGIC PRIORITIES UAZ STRATEGIC PRIORITIES Continuous development of the affordable products for the different market segments on a single frame-based platform Maintain the highest level of localisation in the industry Develop export sales Develop unique R&D competencies with the support of the Government UAZ PATRIOT 2017 PRICE: from RUB 699 k New exterior and interior Improved noise isolation New comfort options: climate and cruise control new sensor multimedia heated multifunctional steering wheel Modern safety options Improved fuel system New platform by 2020
5 UAZ STRATEGIC PRIORITIES UAZ FUTURE MODELS UAZ PROFI new light commercial vehicle based on UAZ Patriot platform Combines the comfort of passenger car and the payload of commercial vehicle Competitive price positioning will help to gain a market share on a new segment UAZ PROFI 2017 PRICE: from RUB 649 k NEW ENGINE: ZMZ-PRO up to 160HP Increased payload: 1 500 kg Number of passengers: up to 3 p Enlarged wheel base: 5.9 m Strengthened frame and suspension Improved manoeuvrability Extra choice of comfort options Start of production in September 2017
6 1. 1H2017 SOLLERS STRATEGIC DEVELOPMENTS 2. RUSSIAN AUTOMOTIVE MARKET OVERVIEW 3. SOLLERS OPERATING AND FINANCIAL PERFORMANCE IN 1H2017 4. SOLLERS JOINT VENTURES RESULTS
7 1H2015-1H2017 RUSSIAN AUTOMOTIVE MARKET, K UNITS* SALES OF PASSENGER CARS SALES OF LIGHT COMMERCIAL VEHICLES 734 83 78 196 105-15% 625 66 65 183 69 +7% 666 66 62 198 57 44 38-1% 44 40 +12% 49 42 272 242 283 6 4 7 1H2015 1H2016 1H2017 1H2015 1H2016 1H2017 Other B B+ C SUV+Pickup LCV+MPV CDV HIGHLIGHTS Growth in all main market segments, the overall passenger car market went up by 7% The largest SUV segment grew by 18% in 1H2017 mainly due to crossovers B+ segments was also growing by +8% The largest growth in light commercial vehicles is due to sales of UAZ and GAZ vehicles (+7% and 4% growth respectively) * Source - AEB
8 NEW SUV + PICKUP MARKET 1H2015-1H2017 NEW SUV+PICKUP MARKET 1H2015 1H2017, K UNITS* 1H2017 KEY PLAYERS (RETAIL SALES), K UNITS 272 31-11% 242 +17% 283 22 12% 12% 10% 9% 8% 5% 5% 5% 3% 3% 3% 34 33 3% 25 100 27 27 110 103 22 131 114 161 15 15 13 10 10 9 9 1H2015 1H2016 1H2017 Russian brands New import Foreign brands assembled in Russia 2,1% 7,7% -2,7% -1,7% 1,2% 2,4% -0,9% -0,8% -0,7% -1,2% 0,4% -2,0% MAJOR MARKET TRENDS IN 1H2017 The SUV and Pickup market outperformed the overall market: +17% vs. 7% growth of total passenger car sales The market leaders changed due to successful launch of Hyundai Creta and Renault Kaptur Ford sales increased by 32% in 1H2017 due to Ford EcoSport and Ford Kuga successful repositioning * Source - AEB
9 NEW LCV+MPV MARKET 1H2015-1H2017 NEW LCV+MPV MARKET 1H2015 1H2017, K UNITS* 1H2017 KEY PLAYERS (RETAIL SALES), K UNITS +4% +6% 50% 23% 8% 6% 5% 2% 2% 1% 1% 1% 0% 38 40 42 21,0 9,7 3,4 27 29 30 2,7 2,0 7 4 6 5 6 6 0,9 0,8 0,6 0,5 0,3 0,2 1H2015 1H2016 1H2017 Russian brands New import Foreign brands assembled in Russia -1,0% 0,2% 2,1% -0,3% -0,2% 0,6% -0,8% 0,2% 0,3% 0,0% -0,4% MAJOR MARKET TRENDS IN 1H2017 UAZ retail sales of commercial vehicles went up by 7%, the brand managed to gain 23% market share The sales of Ford CVs grew by 44,6% as a result of the launch of new Ford Transit at Elabuga production site and partly because of low base effect of the 1H2016 * Source - AEB
10 1. 1H2017 SOLLERS STRATEGIC DEVELOPMENTS 2. RUSSIAN AUTOMOTIVE MARKET OVERVIEW 3. SOLLERS OPERATING AND FINANCIAL PERFORMANCE IN 1H2017 4. SOLLERS JOINT VENTURES RESULTS
11 SOLLERS GROUP WHOLESALES SOLLERS CONSOLIDATED WHOLESALES k units 1H2016 1H2017 Change UAZ 20,6 21,1 2,4% UAZ Hunter 1,9 1,3-31,6% UAZ Patriot 7,7 6,9-10,4% UAZ commercial vehicles - old model range 9,1 11,2 23,1% UAZ commercial vehicles - new model range 1,9 1,7-10,5% SSANG YONG - 0,2 n/a SOLLERS JVS WHOLESALES k units 1H2016 1H2017 Change MAZDA SOLLERS JV 13,0 9,6-26,2% FORD SOLLERS JV 23,4 22,9-2,1%
12 OVERVIEW OF 1H2017 FINANCIAL RESULTS RUB mln 1H2016 1H2017 Change Revenue 13 426 16 012 19,3% EBITDA 1 456 1 687 15,9% EBITDA margin 10,8% 10,5% -0,3% Operating profit 1 316 1 012-23,1% Operating margin 9,8% 6,3% -3,5% Financial instrument change in fair value (828) (125) 703 Share of result of JVs (212) 195 407 Net profit 34 575 1591,2% Net debt as of 31.12.2016/ 30.06.2017 4 740 5 521 16,5% Net debt as of 30.06.2016/ 30.06.2017 4 123 5 521 33,9%
13 SALES STRUCTURE, RUB BLN SALES STRUCTURE 20 +19.4% 16 16.0 13.4 12 8 10.4 12.4 4 0 2.2 0.8 1H2016 2.9 0.7 1H2017 Vehicles Automotive components Other The growth in the Group s revenue of 19% due to the change in UAZ product mix and the relaunch of SsangYong vehicles distribution
14 EBITDA CHANGES, RUB MLN EBITDA CHANGES EBITDA VS OPERATING PROFIT 2 000 +16% 21 18 (21) 1 687 1 600 1 456 1 687 18 15 1 200 10.8% 10.5% 12 678 800 9 6 400 3 1 012 0 1H2016 EBITDA 1H2017 EBITDA margin 0 Operating profit D&A Compensation of capitalised expenses Other one-off transactions EBITDA
15 CASH FLOW, RUB MLN Cash flow from operating activity RUB (45 ) mln. Cash flow from investing activity RUB (718) mln. Cash flow from financing activity RUB (532) mln. 125 243 (195) (314) 678 (939) 2 336 828 (471) (507) (261) 50 (532) 1 041 Cash at the beginning of the year PBT D&A Impairment of the option Interest charge Share of profit of JVs and associates Other adjustments Change in working capital Income tax and interest paid Additions to PPE & other LT assets R&D Dividends received from associates and JVs Net change in debt Cash at the end of the year X Subtotals X Cash inflow (X) Cash outflow Other adjustments include provision movements and profit/ loss on the sale of property, plant and equipment, investments and other assets
16 NET DEBT POSITION, RUB MLN NET DEBT POSITION AND EFFECTIVE INTEREST RATE NET DEBT STRUCTURE 6 000 5 521 15.0% 5 000 4 740 13.5% 4 000 3 000 2 000 8.7% 8.6% 12.0% 10.5% 9.0% 1 000 0 7.5% 6.0% 31.12.2016 30.06.2017 RUB mln 31.12.2016 30.06.2017 Change Long-term debt 3 420 2 716-20,6% Short-term debt 3 656 3 846 5,2% Total debt 7 076 6 562-7,3% Cash at the end of the period 2 336 1 041-55,4% Net debt 4 740 5 521 16,5% Net debt Average effective interest rate, % Liquidity reserves up to RUB 14.9 bln. including cash of RUB 1.0 bln. and available credit facilities of RUB 13.9 bln.
17 1. 1H2017 SOLLERS STRATEGIC DEVELOPMENTS 2. RUSSIAN AUTOMOTIVE MARKET OVERVIEW 3. SOLLERS OPERATING AND FINANCIAL PERFORMANCE IN 1H2017 4. SOLLERS JOINT VENTURES RESULTS
18 JOINT VENTURES RESULTS BREAKDOWN OF JVS CONTRIBUTION TO THE SHARE OF PROFIT OF JVS RUB mln Current SOLLERS' stake 1H2016 1H2017 Change MAZDA SOLLERS JV 50% (251) 149 159% SOLLERS-BUSSAN JV 50% (14) (11) -21% SOLLERS-FINANCE JV 50% 53 57 8% TOTAL CONTRIBUTION (212) 195 192% In 1H2016 MAZDA SOLLERS JV had a net loss of RUB 2.1 bln., which was recovered by the end of the year 2016. MAZDA SOLLERS JV Special Investment Contract on engine plant construction was signed in September 2016 The results of Ford Sollers JV are not presented due to impairment of the investment and recognition of the option in SOLLERS consolidates financial statement
19 1H2017 FORD SOLLERS JV SALES, K UNITS* FORD SOLLERS JV RETAIL SALES 1H2016 1H2017 3,3% MS** 2,7% MS** 3,4 3,0 4,1 4,2 4,0 3,8 3,9 3,5 3,7 4,6 2,2 2,3 January February March April May June HIGHLIGHTS Sales of Ford vehicles grew by 6% in 1H2017 on the back of better market performance and a number of improvements in product positioning * Source: AEB (Association of European Businesses), Company ** MS market share
20 MAZDA SOLLERS JV AND SOLLERS-FINANCE JV PERFORMANCE MAZDA SOLLERS WHOLESALES, K UNITS -27% 13 3 10 LEASING PORTFOLIO BY VEHICLE TYPE, RUB MLN 1,410 1,862 11% 4% 8% 10% 22% 10 2 7 Mazda6 Mazda CX-5 15% 57% 7% 38% 28% Special vehicles Passenger cars Trucks LCV Other vehicles 1H2016 1H2017 1H2016 1H2017 MAZDA SOLLERS JV FINANCIAL RESULTS* SOLLERS-FINANCE JV FINANCIAL RESULTS RUB mln 1H2016 1H2017 Revenue 13 872 10 384 Operating profit (2 644) 308 Operating margin -19% 3% Net profit (2 059) 298 Net profit margin -15% 3% Debt as of 31.12.2016/30.06.2017 1 432 70 RUB mln 1H2016 1H2017 Revenue 274 401 Operating profit 140 144 Operating margin 51% 36% Net profit 106 114 Net profit margin 39% 28% Leasing portfolio as of 31.12.2016/30.06.2017 2 633 2 919 * See p.17 for further details on MAZDA SOLLERS JV performance
21 STOCK INFORMATION SHARE PERFORMANCE AT MOEX, TICKER: SVAV 700 600 500 455 525 400 300 24.08.2016 23.08.2017 STOCK EXCHANGE DATA AT 23.08.2017 Market capitalisation, RUB mln. 17 992 Shares, mln. 34,27 Price at 23.08.2017, RUB 525 Security List I