GAZPROM: FY2020 IFRS RESULTS APRIL 29, 2021 FY2020 IFRS RESULTS 1 DISCLAIMER 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. 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FY2020 IFRS RESULTS 2 MARKET ENVIRONMENT EUROPEAN1 GAS MARKET IN 2020 (Y/Y) 1Q2020 30% Weak dynamics in 1H20 was partially offset by gradual rebound in 2H20 2Q2020 27.9% 4Q2020 3Q2020 20% 5.5% 10% 2.2% 0.6% 0% -4.0% -10% -7.3% -3.6% -5.0% -4.3% -12.8% -20% -9.8% -7.9% -11.4% -12.0% -30% Demand Production Total import -10.1% -27.3% LNG import Weather conditions in the winter of 2020/21 winter were weaker than 20yr average, but still supported gas demand WEATHER INDEX2 IN EUROPE 20,000 18,000 Range (2000-2019) Average (2000-2019) 16,000 2020 2021 HDD+CDD2 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 In this presentation “Europe” includes ЕU-27 countries except Baltic states, plus Albania, Bosnia and Herzegovina, UK, Macedonia, Norway, Serbia, Turkey, Switzerland. 2 Weather index is calculated as the sum of degree*days for the corresponding month: HDD (Heating Degree Days) means degree*days for heating season, CDD (Cooling Degree Days) means degree*days of cooling season. Calculation is done based on weather conditions in 90 regions of Europe. FY2020 IFRS RESULTS 3 4Q20 IFRS RESULTS GAZPROM MANAGED TO COME BACK TO AND EVEN EXCEED PRE-COVID FINANCIAL RESULTS IN 4Q20 DUE TO: • CONTINUING REBOUND IN OIL&GAS MARKETS, • ACCUMULATED EFFECT OF THE COSTS OPTIMIZATION MEASURES INTRODUCED IN 2020 4Q2019 vs 4Q2020 RUB bn Adjusted for analytical purposes* -12% 3,800 2,800 +3% +48% +129% -21% +72% +2x 3,856 1,800 800 2,020 531 354 EBITDA 1 Net profit 433 633 200 -200 Sales 2 1 EBITDA adjusted for changes in impairment provisions 2 Profit attributable to PJSC Gazprom’s shareholders for the period 3 Cash capital expenditures 4 Compared to Net debt as of September 30, 2020 FY2020 IFRS RESULTS CAPEX 3 Operating CF adj. FCF adj. 4 Net debt adj. *In order to reflect the effects of the decrease in bank deposits (reported as part of Other current and Other non-current assets) 4 2020 IFRS RESULTS …WHILE FY2020 FINANCIAL PERFORMANCE STILL LEFT SUBDUED ON THE BACK OF: • LOWER AVERAGE OIL&GAS PRICES IN FY2020, AFFECTING THE TOP LINE • UNFAVORABLE FX RATE DYNAMICS 2020 VS 2019, SQUEEZING THE BOTTOM LINE AND SWELLING THE DEBT LEVEL 2019 vs 2020 RUB bn 5,700 8,000 -17% 4,700 7,000 Adjusted for analytical purposes* +55% 3,700 2,700 -21% -89% -14% -21% -38% 6,322 3,856 1,700 1,523 1,467 700 1,261 135 (261) -300 Sales EBITDA 1 Net profit 2 1 EBITDA adjusted for changes in impairment provisions 2 Profit attributable to PJSC Gazprom’s shareholders for the period 3 Cash capital expenditures 4 Compared to Net debt as of December 31, 2019 FY2020 IFRS RESULTS CAPEX 3 Operating CF adj. FCF adj. Net debt adj.4 *In order to reflect the effects of the decrease in bank deposits (reported as part of Other current and Other non-current assets) 5 REVENUE BREAKDOWN BY BUSINESS SEGMENTS REVENUE BY SEGMENT1 FY2019 GAS BUSINESS, TRANSPORTATION AND OTHER FY2020 56% 56% +10% RUB bn 1,200 800 1,117 400 7% 8% 37% 36% 630 690 2Q20 3Q20 0 4Q19 OIL AND GAS CONDENSATE, REFINED PRODUCTS -8% RUB bn 1,228 988 1Q20 ELECTRICITY AND HEAT +4% RUB bn 800 4Q20 200 600 400 699 200 594 439 612 641 0 4Q19 1Q20 2Q20 3Q20 4Q20 100 145 158 4Q19 1Q20 151 94 96 2Q20 3Q20 0 4Q20 Calculations may differ due to rounding. 1 Net of value added tax (VAT), excise tax and custom duties. FY2020 IFRS RESULTS 6 GAS BUSINESS EUROPE & OC 2 RUSSIA bcm 4,177 4,118 300 4,287 4,182 RUB/mcm 4,000 3,000 200 236 100 2,000 225 74 73 0 2019 2020 VOLUMES 4Q19 bcm USD/mcm 211 300 143 250 198 173 200 232 100 219 1,000 0 FSU 65 61 0 2019 4Q20 2020 4Q19 4Q20 bcm 50 200 40 150 30 100 20 50 10 0 0 USD/mcm 157 RUB bn 1,000 940 3,000 317 305 400 400 +12% 2020 4Q19 NET SALES TO RUSSIA 4Q20 1 4Q20 AVERAGE PRICE IN FSU 295 -9% 200 1,000 606 677 4Q19 4Q20 0 2019 4Q19 356 300 1,812 200 0 10 -17% 2,490 2,000 600 12 RUB bn +4% 800 2020 VOLUMES -27% RUB bn 971 132 31 2019 AVERAGE PRICE IN EUROPE&OC -3% 200 153 100 39 VOLUMES AVERAGE PRICE IN RUSSIA 137 105 96 4Q19 4Q20 100 0 2019 2020 NET SALES TO EUROPE&OC 3.4 2019 2020 NET SALES TO FSU 3.4 Calculations may differ due to rounding. 1 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 FY2020 IFRS RESULTS 7 0 IMPACT OF BANK DEPOSITS 1 ST & LT BANK DEPOSITS RUB bn 800 676 • Bank deposits with the term of over 3 months are not included in Cash and cash equivalents item of the balance sheet • Early withdrawal clause allows Net Debt and Net Debt/EBITDA to be adjusted for ST and LT deposits for analytical purposes 523 600 400 IMPACT OF BANK DEPOSITS1 ON NET DEBT 413 673 200 522 412 67 66 0 FY2019 1Q20 ST DEPOSITS 2Q20 3Q20 LT DEPOSITS 17 15 4Q20 IMPACT OF CHANGES IN ST DEPOSITS ON CASH FLOWS ST BANK DEPOSIT CHANGES (Y/Y) RUB bn 0 • Changes in working capital (part of Operating cash flow) include changes in ST bank deposits • Operating cash flow and Free cash flow need to be adjusted for changes in ST bank deposits for analytical purposes -37 -123 -100 -152 -188 -281 -200 -300 FY2019 1Q20 2Q20 3Q20 4Q20 LT AND ST BANK DEPOSITS IMPROVE THE EFFICIENCY OF LIQUIDITY MANAGEMENT 1 Reported as a part of other current assets and other non-current assets Source: Gazprom FY2020 IFRS report, note 12 FY2020 IFRS RESULTS 8 4Q2020 ADJUSTED FREE CASH FLOW CHANGES IN BANK DEPOSITS RUB bn REPORTED AS PART OF CHANGES IN WORKING CAPITAL 800 37 600 -10 -37 93 400 671 633 -433 551 200 200 0 OCF before working capital changes Changes in net working capital and operating items FY2020 IFRS RESULTS Changes in ST deposits Tax paid OCF reported Adjustment for decrease in ST deposits OCF adjusted CAPEX FCF adjusted 9 FY2020 ADJUSTED FREE CASH FLOW CHANGES IN BANK DEPOSITS RUB bn REPORTED AS PART OF CHANGES IN WORKING CAPITAL 2,000 -105 658 -658 1,600 -237 1,200 1,919 800 1,603 1,261 -1523 -1,523 400 0 -261 -400 OCF before working capital changes Changes in net working capital and operating items FY2020 IFRS RESULTS Changes in ST deposits Tax paid OCF reported Adjustment for decrease in ST deposits OCF adjusted CAPEX FCF adjusted 10 CAPITAL EXPENDITURES CASH CAPITAL EXPENDITURES RUB bn -14% 2,000 1,600 -21% 1,200 1,776 800 400 551 419 301 369 433 2Q20 3Q20 4Q20 1,523 0 4Q19 1Q20 FY2019 FY2020 CAPEX BREAKDOWN 100% 80% 60% 9% 5% 5% 4% 19% 21% 26% 31% 9% 4% 26% 20% 17% 0% 4Q19 FY2020 IFRS RESULTS 27% 12% 4Q20 17% 20% 24% Other Utilities 24% 40% 25% 7% 6% 27% Gas transportation Gas production Refining 17% 21% FY2019 FY2020 Oil upstream 11 KEY DEBT METRICS NET DEBT IN FY20201 CASH&EQUIVALENTS (INCL. DEPOSITS) TOTAL DEBT USD bn Net Debt/EBITDA 80 3.0 2.6 2,6 14 0.2 2.0 40 1.5 66.4 52.4 20 USD 18% EUR 49% 2.5 60 52.2 1.0 0.5 0 USD 23% RUB 61% RUB 22% Other 6% Other 3% 0.0 Total Debt Cash & equivalents Net Debt reported ST&LT deposits EUR 18% Net Debt adjusted CREDIT RATINGS DEBT MATURITY PROFILE IN 4Q2020 USD bn 16.0 13.9 14.0 12.0 10.0 Fitch BBB / stable Moody's Baa2 / stable S&P BBB– / stable 11.0 10.7 9.4 8.2 8.0 6.7 6.6 6.0 Dagong 4.0 2.0 ACRA 0.0 1 2 3 FY2020 4 5 6 – 10 AAA / stable AAA (RU) / stable More than 10 years Years to maturity (up to) 1 Net Debt adjusted for the bank deposits reported as a part of Other current assets and Other non-current assets (see Slide 10 for details). Based on calculations in USD. FY2020 IFRS RESULTS 12 DIVIDENDS DIVIDEND PAYMENT AS PER THE APPROVED POLICY IS GAZPROM'S PRIORITY FY2020 ADJUSTED NET INCOME OUTLOOK RUB bn 800 605 • Strong commitment to the Dividend Policy even under stressful market conditions -164 700 49 4 -137 600 • Management Committee recommended to move towards 50% payout ratio ahead of schedule stated in the Policy 102 500 400 300 594 • Payout ratio — not less than 50% of adjusted net income for 2021 and beyond 200 100 • Dividend payouts are planed to be fully covered by Free cash flow 135 0 FY2020 Net Income Financial FX Loss Operational FX Gain Impairment in PPE 1 Impairment Profit from Dividends loss on Associated from investment in Comp. & JVs Associated Associated Comp. & JVs Comp. & JVs FY2020 Adjusted NI 1 Impairment loss on property, plant and equipment and assets under construction FY2020 IFRS RESULTS 13 ADDITIONAL INFORMATION FY2020 IFRS RESULTS 14 GAZPROM INVESTMENT CASE FUNDAMENTAL ADVANTAGES Low cash cost of gas production Leadership in the European gas market Increasing diversification of the gas export portfolio (due to ramp-up of supplies to China) Balanced portfolio of long-term gas contracts (gas hub and oil basket linked prices) Diversified business structure: strong oil and low-risk utilities segments ROBUST FINANCIAL POSITION Conservative financial policy (stringent debt management) Large short-term liquidity buffer Favorable FX breakdown of cash flows (natural hedge in P&L and balance sheet) FCF SUPPORT EFFORTS OPEX optimization program to underpin OCF in 2020-2021 CAPEX budget tightening to bolster FCF in 2020-2021 Launch of key projects to boost FCF in the mid-term Commitment to the Dividend Policy despite challenging market conditions Recommendation to pay 50% of 2020 adjusted net income – ahead of initial schedule Initiatives in all aspects of ESG: Environmental, Social and Corporate Governance Focus on transparency, accountability and investor relations Responsible corporate citizen with focus on sustainability and green technology FOCUS ON DIVIDENDS SUSTAINABLE DEVELOPMENT PRIORITY FY2020 IFRS RESULTS 15 MARKET ENVIRONMENT: FY2020 VS FY2019 EUROPEAN GAS MARKET STARTED TO REBALANCE IN 3Q20 1Q19 189.0 Gas demand in EU 2Q19 110.1 3Q19 97.6 4Q19 163.5 y/y change, % Gas production in EU -4.0% 65.0 58.9 51.8 60.7 y/y change, % Total gas import in EU 87.2 82.5 101.0 y/y change, % 28.3 29.7 24.2 33.0 80.0 105.0 96.7 y/y change, % 68.8 61.9 63.3 y/y change, % 59.5 50.1 -20.7% 216.6 150.4 132.8 156.6 y/y change, % 108.9 -49.7% WHILE LNG SUPPLIES TO EUROPE LAGGED BEHIND DUE TO INTERNAL REASONS 1Q19 2Q19 3Q19 4Q19 1Q20 US LNG import in EU 4.0 3.6 2.7 11.4 7.9 y/y change, % Liquefaction capacity utilization in US 181.9% 79.9% 77.2% 67.5% 79.6% y/y change, % Oil production in US 89.6% 11.4% 12.0 12.2 12.2 12.7 13.0 y/y change, % Henry Hub gas price -12.8% 53.2 -9.8% 76.7 -12.0% 31.3 5.5% 87.8 34.1% 63.2 Average TTF 1-month ahead 36.3 2Q20 96.0 27.9% 44.4 Brent price 86.1 -4.3% y/y change, % Gas inventories in EU 60.3 -7.3% 90.0 LNG import in EU 1Q20 181.5 8.3% 2.9 2.6 2.4 2.4 y/y change, % 1.9 -34.6% 9.7% 29.2 -57.6% 63.7 -57.6% 2Q20 6.0 65.9% 63.5% -18.9% 11.6 -4.9% 1.7 -33.6% 3Q20 98.2 4Q20 167.2 0.6% 50.0 2.2% 55.8 -3.6% 78.4 -5.0% 21.6 -11.4% 103.9 -1.4% 43.0 -30.6% 99.6 -7.9% 90.8 -10.1% 24.0 -27.3% 81.5 -15.6% 44.2 -30.1% 152.9 -2.4% -25.0% 3Q20 2.4 -13.7% 35.5% 4Q20 6.1 -23.1% 76.8% -47.3% 10.7 -12.3% 2.0 -3.5% 10.8 -15.1% 2.5 2.5% -16.5% Sources: Bloomberg, Eurostat, US Department of Energy, IEA, national statistical bodies, ENTSOG, IHS, S&P Platts FY2020 IFRS RESULTS 16 OPERATING METRICS Natural gas -1% bcm 150 Gas condensate 132.5 98.3 100 5 130.7 4.5 4.5 4.5 3.5 4 101.9 mln ton -1% mln ton 123.7 Crude oil 15 3.8 11.7 12.1 11.5 11.6 11.9 4Q19 1Q20 2Q20 3Q20 4Q20 10 3 2 50 +1% 5 1 0 0 0 4Q19 1Q20 2Q20 3Q20 4Q19 4Q20 1Q20 2Q20 3Q20 4Q20 Electricity Heat bn kWh mln Gcal +3% -12% 50 40 39.9 50 40.2 35.3 27.6 30 27.9 40.8 45.1 42.2 40 30 20 20 10 10 20.9 10.3 0 0 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Gazprom Group’s volumes produced in Russia Calculations may diverge due to rounding. FY2020 IFRS RESULTS 17 THANK YOU! FY2020 IFRS RESULTS 18
