Q1 2020 IFRS RESULTS - Aeroflot · 2020. 6. 2. · 3 Aeroflot Group Q1 2020 Highlights ¹ Q1 2020 net loss adjusted for reclassification of part of the reserve for hedging instruments

A E R O F L O T G R O U PQ1 2020 IFRS RESULTS

2 June 2020

Speakers:

Andrey Chikhanchin – Deputy CEO for Commerce and Finance

Andrey Panov – Deputy CEO for Strategy, Service and Marketing

Ivan Batanov – Head of Revenue Management

2

This document has been prepared by PJSC “Aeroflot” (the “Company”). By attending the meeting where the presentation is made, or by reading the

presentation slides, you agree to the following.

This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to

purchase or subscribe for, any securities of the Company in any jurisdiction, 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.

No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness.

No representation or warranty, express or implied, is given by the Company, its subsidiaries or any of their respective advisers, officers, employees or

agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its

contents.

This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements

regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial

condition, liquidity, prospects, growth, strategies, and the market in which the Company operates. By their nature, forwarding-looking statements involve

risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you

that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and

liquidity and the development of the market in which the Company operates may differ materially from those made in or suggested by the forward-

looking statements contained in this document. The Company does not undertake any obligation to review or confirm expectations or estimates or to

update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.

Disclaimer

3

Aeroflot Group Q1 2020 Highlights

¹ Q1 2020 net loss adjusted for reclassification of part of the reserve for hedging instruments to hedging result in PnL (more info on slide 20).Note: immaterial deviations throughout the presentation are explained by rounding

• In Q1 2020 Aeroflot Group performance was significantly affected by COVID-19 amid pressure

on demand mounting in February and March with respective implications for financials.

• Notwithstanding the external pressure the Group was able to increase yield and maintain

comparable level of adjusted net loss vs. Q1 2019.

PAX Yield Adjusted Net Loss1 External Factors

11.2 mln

- 12.3 %

12.8 mln

+ 0.2 %

(15.7) (15.8)

+ 3.3 %

3.56

3.67

COVID-19

Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020

Million PAX RUB / RPK Billion RUB

4

1. Market Update and Operating Results

2. Network and Schedule Overview

3. Fleet Overview

4. Financial Performance

5. Appendix

5• Market and Aeroflot Group performance remained under pressure in Q1 2020 amid significant adjustment in

demand in the face of COVID-19, which extended into following quarters.

Overview of the Russian Market

Passenger Traffic: Market vs Aeroflot Group

Russian Air Transportation Market (million PAX)incl. PAX of Russian and Foreign Carriers and intl. transit PAX

Aeroflot Group (million PAX)

Key Market Players

Market Shares

68,8 73,1

68,1 74,1

137,0147,2

12M 2018 12M 2019

14,8 14,6

13,3 11,5

28,1 26,1

Q1 2019 Q1 2020

International Routes

Domestic Routes

31,0 33,6

24,727,1

55,760,7

12M 2018 12M 2019

7,0 6,7

5,7 4,5

12,8 11,2

Q1 2019 Q1 2020

6.1%

8.8%

7.5%

(7.1)%

(13.7)%

(1.2)%

8.5%

9.6%

9.0%

(12.3)%

(21.2)%

(5.0)%

11,2

3,6

1,8 1,62,8

5,1

AeroflotGroup

S7 Group Ural Airlines UTair Group ForeignCarriers

Others

-1.6

Change in PAX million

+0.1

+0.01 -0.1-0.5

+0.1

45,4%

12,5%6,3%

6,1%

11,9%

17,8%

42,9%

13,8%6,9%

6,1%

10,9%

19,5%

Foreign Carriers Others

Q1 2019 Q1 2020

Source: TCH, Aeroflot Group. Figures include foreign carriers’ traffic.

6

• Russian market was substantially hit by COVID in March 2019 with increased magnitude of the impact in April.

• Load factor in March started to decline as capacity adjustment lagged swift declines in demand.

Source: TCH, Federal Air Transport Agency, Aeroflot Group calculationsSource: TCH, Federal Air Transport Agency, Aeroflot Group calculations

Material Impact of COVID-2019 Starts from March

8,9

8,0

6,4

0,7

January February March April

6.6% 6.4% (28,1)% (92.1)%

30,5

26,7

23,5

4,0

January February March April

10.0% 8.7% (17.6)% (86.0)%

79%

69%

39%

Monthly PAX Traffic (Russian Carriers) Capacity (Russian Carriers) and PLF

79%

Million PAX Billion ASK, PLF in %

7

• Domestic traffic decline was slower and less dramatic than in international segment proving resilience of domestic

market and opportunities for trend reversal.

PAX Traffic of Russian Airports in March and early April

Domestic Segment Showed Resilience vs. International

April – International Segment

April – Domestic Segment

-87%

-70%

-41 ppto

39%

PAX ASK PLF

-100%

-70%

-40%

-10%

20%

1 4 7 10 13 16 19 22 25 28 31 3 6

Total PAX Domestic International

Source: Russian international airports association (MAA), Federal Air Transport Agency

PAX dynamics based on 33 key Russian airports

March 2020 April 2020

Only 22 thousand PAX

transported

(-99% y-o-y)

International flights suspended

excluding

special repatriation flights

8

Aeroflot Group Multi-Brand Strategy Provides for

Flexibility in Difficult Times

0,3 0,3

61,9%

• Flagship carrier

• Premium product (4 Stars)

• High income and middle class

• Hub and spoke model

• Scheduled network under SU

(Aeroflot) code from

− Moscow (SVO)

− St. Petersburg (LED)

• Charter operations

Premium

8,56,9

6.9

-18.0%

1,91,5

2,02,5

-23.1%

+22.2%

-15.2%

Q1 2019 Q1 2020

13,3%

22,3%

2,5%

1.5

2.5

0.3

• Point-to-point carriage

• Focus on domestic

segment and underserved

international routes

• Airline for communities in the

Russian Far East offering

flights

− between large cities

− to remote cities

• Material decline in demand and closed borders have resulted in Q1 traffic decline for key carriers of the Group,

excluding Pobeda. In April and May the Group has significantly adjusted its capacity in all segments.

Source: Aeroflot Group1 PAX contribution as of Q1 2020. Absolute number of passengers in million in green circle

Q1 2019 Q1 2020

Q1 2019 Q1 2020

Q1 2019 Q1 2020

Brand Business Model Q1 2020 PAX Contribution1 and Dynamics April 2020

Mid-price

Low Cost

Regional

-95% PAX

-89% ASK

-92% PAX

-88% ASK

-100% PAX

-99% ASK

-85% PAX

-74% ASK

9

Pobeda LCC: Timely Value Proposition

April and May operations suspended amid demand decrease

Total Traffic an PLF by Month

62

Krasnodar

Rostov

NazranMakhachkala

Astrakhan

Volgograd

KazanPerm

Chelyabinsk

Ekaterinburg

Surgut

Novosibirsk

Bergamo

Bratislava

Cologne

Memmingen

Girona

Samara

Cheboksary

Larnaca

Tivat

Saint Petersburg14

Nizhnekamsk

Moscow

VladikavkazTbilisi

Krasnoyarsk

Pisa

Base cities with >10 routes served from city

(number of routes in circle)

Baden-Baden

Ulan-Ude →Karlovy VaryLeipzig

Venice

Kaliningrad

Eindhoven

Helsinki

Innsbruck

Kemerovo

Salzburg

Berlin

Rome

Kirov

Min.Vody

Petrozavodsk

Tomsk

XXCities with <10 routes served from city

Cities where the airline operates to

Anapa

AntalyaBodrum

Bari

Cagliari

CataniaDalaman

Gelendzhik SochiGenova

Gazipaşa

Istanbul Gyumri

Omsk

Ostende

Palermo

Riga

Rimini

TyumenUlyanovsk

Varna

Batumi

Magnitogorsk

12

34% 32%

3%

January February March

94.4% 94.4% 84.2%

PL

F

Q1 2020 RPK Mix Adjustment

PA

X,

y-o

-y78% 22%

Domestic International

12 p.p. shift from international to domestic y-o-y

Overview

30

B737NG aircraft with single class cabin (189 seats)

2.5

mm PAX transported in Q1 2020 (+22.2% y-o-y)

91.2%

PLF remained high despite ongoing pressure in March

• Pobeda, the only Russian LCC, has temporarily suspended operations, but is uniquely positioned to bring

back capacity to the market thanks to its value proposition appealing to cost conscious passengers.

Source: Aeroflot Group

10

1. Market Update and Operating Results

2. Network and Schedule Overview

3. Fleet Overview

4. Financial Performance

5. Appendix

11

• Positive pricing trends of 2019 were maintained in the beginning of 2020 allowing for increase in yields in Q1.

• RASK was under pressure due to significant adjustment in PLF in February-March 2020 on the back of COVID-

related demand pressure.

Source: Aeroflot GroupNote: Data presented based on management accounting figures, scheduled flights revenue is used for calculations

RUB RUB

3.2%0.7% 1.1%

Aeroflot Group Scheduled Flights Revenue Units

Q1 Yield (PAX Revenue / RPK) Q1 RASK (PAX Revenue / ASK)

RUB / RPK RUB / ASK

% Y-o-Y increase 2019 2020 % Y-o-Y increase 2019 2020

3,39

3,74

3,60

3,40

3,97

3,72

Domestic International Total

2,66

2,84

2,77

2,42

2,75

2,60

Domestic International Total

0.1%

(9.1)%

6.2%

3.2%

(6.0)%

(3.2)%

12

Aeroflot routes

Rossiya routes

Aurora routes

• Aeroflot Group operated only limited number of flights to the key domestic markets maintaining minimal required

capacity while international flights were performed only for repatriation purposes.

• Starting from June Aeroflot Group intends to gradually restore operating volumes in domestic segment.

Source: Aeroflot Group

Note: 1 Scheduled flights of Aeroflot Group in Q1 2020 vs. Q1 2019 (excluding Pobeda LCC)

Los Angeles

MOSCOW

Malaga

Alicante

Amsterdam

Brussels

Stockholm

AthensAntalya

Barcelona

Belgrade

Bologna

BudapestParis

Copenhagen

DresdenDusseldorf

Rome

Frankfurt

Geneva

Hannover

Hamburg

Helsinki

Heraklion

Istanbul

Larnaca

London

Lyon

Madrid

Munich

MilanNice

Oslo

Bucharest

Prague

Riga

Thessaloniki

SofiaSplit

Stuttgart

Berlin

Tbilisi

Tenerife

Tivat

Tallinn

Venice

Vienna

Valencia

Kaunas

Warsaw

Zagreb

Zurich

Lisbon

Havana

Washington

New York

Miami

Male

Phuket

Ho Chi Minh City

MOSCOW

Anapa

Abakan

Adler

Arkhangelsk

Astrakhan

Barnaul

Chelyabinsk

Belgorod

Magadan

Gelenzhdik

Khanty Mansiysk

Irkutsk

Kemerovo

Kaliningrad

Khabarovsk

Krasnoyarsk

Krasnodar

SamaraKazan

Saint Petersburg

Murmansk

Magnitogorsk

Mineral Waters

NizhnekamskNizhny Novgorod

Nizhnevartovsk

Novokuznetsk

New Urengoy

Novosibirsk

Perm

P. Kamchatsky

Orenburg

Rostov

Saratov

SyktyvkarSurgut

Simferopol

Salekhard

Stavropol

EkaterinburgTyumen

TomskUfa

Yu. Sakhalinsk

Volgograd

Voronezh

Vladivostok

Yakutsk

Aktobe

Almaty

Shymkent

Yerevan

Bishkek

Atyrau

Baku

KaragandaChisinau

KostanayMinsk

Aktau

SamarkandTashkent

Astana

Beirut

Dubai

Teheran

Tel Aviv

Bangkok

HanoiHong Kong

Guangzhou

Delhi Shanghai

Tokyo

Beijing

Seoul

Ulan Bator

Sochi

Frankfurt

Dalian

Harbin

Busan

Antalya

BarcelonaBurgas

Paris

Dusseldorf

Rome

Hamburg

Varna

Larnaca

Munich

MilanNice

Prague

Rimini

Berlin

TivatIstanbul

Vienna

Makhachkala

Orly

Omsk

Minsk

Chisinau

Aeroflot Group Network Adjustments

Scheduled Network in April 2020 (flights per day, average)# of Flights Evolution by Region1

88 flights,

sizable markets

Repatriation

flights

Domestic

International

29 flights,

sizable markets

(7,5)%

(18,0)%

(14,6)%

(2,3)%

(13,5)%

(14,7)%

(2,0)%

Total

Middle East & Africa

CIS

North & Central America

Asia

Europe

Russia

13

• Adjustment of capacity due to decline in demand and load factors was a timely instrument to reduce losses and

variable costs.

• In April Aeroflot Group maintained minimal domestic services in order to ensure connectivity between the regions.

Source: Aeroflot Group

Operating Numbers in Q1 and Q2

ASK

PLF

Total Domestic International+

15,0 13,8 12,1

1,6

2% 4% (20)%(90)%

Jan Feb Mar Apr

ASK, bn %, y-o-y

6,0 5,5 6,01,5

6% 6% 5%(76)%

Jan Feb Mar Apr

ASK, bn %, y-o-y

9,0 8,36,1

0,1

0% 2%(35)%

(99)%

Jan Feb Mar Apr

ASK, bn %, y-o-y

75% 74%63%

35%

(1) p.p. (3) p.p. (18) p.p. (45)

p.p.

Jan Feb Mar Apr

PLF y-o-y change

73% 76%65%

34%

(3) p.p. (2) p.p.(16) p.p.

(47) p.p.

Jan Feb Mar Apr

PLF y-o-y change

76% 73%60%

47%

0 p.p. (4) p.p.(20) p.p.

(34) p.p.

Jan Feb Mar Apr

PLF y-o-y change

14

0

500

1 000

1 500

2 000

2 500

15-Jan 30-Jan 14-Feb 29-Feb 15-Mar 30-Mar 14-Apr 29-Apr 14-May 29-May

2020

2019

• Domestic capacity and passenger traffic in China already bottomed out in mid‐February, followed by a slow pace

of recovery as restrictions are gradually lifted.

Domestic Number of Seats Offered in China and Hong Kong Gradually Increases With the Economic Reopening

Domestic Segment Reopening: China Case

Source: SRS data.

Note: Y-o-y dynamics calculated based on two-week moving average.

Number of seats offered on domestic routes in China and Hong Kong, thousand seats

-70%

-40%-25%

15

Increased Focus on Cargo

• Cargo market has not shrunk as much as passenger transportation has and in order to extract

additional efficiency from fleet utilization the Group deploys some of the aircraft for cargo

transportation.

9,911,2

12,2

6,1

Jan Feb Mar Apr

Tones of cargo and mail

Domestic International Comments

Tones of cargo and mail

~57%

deployed for cargo transportation1

18 WB aircraft

of cargo normally

transported

domestically in April~17%

13,5 14,3

11,5

2,7

Jan Feb Mar Apr

of cargo normally

transported

internationally in April

~33%

of total cargo

normally transported

in April

c30% increase in

cargo capacity

measured vs. normally offered belly

to prepare aircraft for cargo operations

time and cost-

wise efficient

Source: Aeroflot Group.1 As of the end of May 2020.

16

1. Market Update and Operating Results

2. Network and Schedule Overview

3. Fleet Overview

4. Financial Performance

5. Appendix

17• Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking into account market

trends and opportunities.

Type of

aircraft

Q1 2020 Fleet as at

31.03.2020Delivery Phase out

Wide-body (long-haul) 1 (2) 58

A-330 - (2) 19

A-350 1 - 1

B-777 - - 29

B-747 - - 9

Narrow-body (medium-haul) - (2) 236

A-319 - - 30

A-320 - (2) 80

A-321 - - 33

B-737 - - 93

Narrow-body (regional) 5 - 67

SSJ-100 5 - 54

DHC-8 - - 10

DHC-6 - - 3

TOTAL 6 (4) 361

Fleet Update

Actual and expected additions 2020 Fleet Plans

2020 deliveries as well as

phase-outs are being

discussed with lessors

Part of the fleet is currently

temporary grounded

In Q1 2020 Aeroflot Group

operated 361 aircraft vs 371

aircraft in Q1 2019

18

1. Market Update and Operating Results

2. Network and Schedule Overview

3. Fleet Overview

4. Financial Performance

5. Appendix

19

Financial Highlights: Q1 2020

• Financial results of Q1 2020 are impacted by softening demand due to COVID-19, which was already

reflected in results of February and March.

• Following the ban on international travelling from March 27, 2020 and tightening lockdown and further

restrictions on movement within Russia in April, Q2 2020 financial results are expected to be weak as well.

Million RUB (where applicable) Q1 2019 Q1 2020 Change

Passenger Traffic (mln PAX) 12,764 11,196 (12.3)%

Revenue 138,041 123,894 (10.2)%

PAX Traffic Revenue 119,255 106,608 (10.6)%

Operating Costs 143,940 137,050 (4.8)%

Operating Loss (5,899) (13,156) +2.2x

EBITDA 21,333 13,054 (38.8)%

EBITDA Margin 15.5% 10.5% (5.0) p.p.

Net Loss (15,746) (22,484) 42.8%

Adjusted Net Loss1 (15,746) (15,774) 0.2%

1 Adjusted for reclassification of part of the reserve for hedging instruments in the amount of RUB 6.7 billion to hedging result in the Condensed Consolidated Interim Statement of Profit or Loss for Q1 2020 due to termination of part of US dollar revenue hedging relationship with leasing liabilities.

20

• Pressure from volume and currency factors slightly offset by pricing were the main factors influencing revenue.

• Primary driver of revenue decline was scheduled passenger flights segment showing significant declines in Europe

and Asia.

Revenue Growth Decomposition

Revenue by Key Factors Revenue by Business Segments

Million RUB Million RUB

138 041 (17 057)

(3 376)

10 781 (4,495)123 894

Q1 2019 Volume Currency Pricing Other Q1 2020

138 041 (11 252)

(1 395) 631 (2 131) 123 894

Q1 2019 ScheduledPassenger

Flights

CharterPassenger

Flights

Cargo OtherRevenue

Q1 2020

21

Operating Costs

Operating Expense

(RUB mln if not stated

otherwise)Q1 2019 Q1 2020

Change

y-o-y

Change

ex. FX

% of OpEx

(Q1 2020)

Fuel 43,700 38,604 (11.7)% (11.7)% 28.2%

Opex (ex. Fuel) 100,240 98,446 (1.8)% (2.2)% 71.8%

Aircraft and passenger

servicing28,871 27,444 (4.9)% (5.5)% 20.0%

D&A and customs duties 27,232 26,210 (3.8)% (3.8)% 19.1%

Staff 22,579 21,124 (6.4)% (6.5)% 15.4%

SG&A1 6,669 6,188 (7.2)% (4.7)% 4.5%

Maintenance 6,174 9,225 49.4% 47.4% 6.7%

Communication Expenses 5,065 3,776 (25.4)% (30.0)% 2.8%

Other expenses2 3,650 4,479 22.7% 21.6% 3.3%

Total Opex 143,940 137,050 (4.8)% (5.1)% 100.0%

• In Q1 2020 operating costs were significantly impacted by smaller volume of operations.

1 Includes sales and marketing expenses and administration and general expenses.2 Other expenses include short-term and immaterial lease, reserves accrual and reversal, catering and other income.

Capacity vs. OpEx

Capacity (ASK) : -5%

Total OpEx: -5%

Cost Structure

60%

40%

Variable Fixed

Operating Expenses Breakdown

22

41,4

43,8

30,0

40,0

50,0

45,0

35,0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1(WA)

2020 2019

Fuel Efficiency

• On the back of oil price weakness staring from March 2020 jet fuel prices moved towards “normalized” level

observed in 2015-2017, which is supportive for the industry in the current environment.

(gramme / ASK)Thousand RUB per tonne of jet fuel

1

Source: Aeroflot Group1 Weighted average price for Q1 (2019 and 2020) and 12M (2015-2017).

(0.8)%

Fuel Cost Management

31.1

33.5

2015-2017 FY weighted averages

Average fuel price per tonne

Aeroflot Airline:

• Q1 2020: 41.4 thousand RUB

(-5.5% y-o-y).

• March 2020: 38.7 thousand RUB

(-12.6% y-o-y).

• April 2020: 30.7 thousand RUB

(-30.5% y-o-y).

Aeroflot Airline Jet Fuel Price

22,5 22,1

Q1 2019 Q1 2020

23

Pobeda Financial Results

• Pobeda demonstrated solid results in Q1 2020 notwithstanding softening demand on the back of

COVID-19 spread.

PAX Traffic and Other Operating Metrics

RASK

CASK

Pobeda Statement of Profit and Loss (IFRS, standalone)

Million RUB Q1 2019 Q1 2020 Change

Revenue 8,351 11,114 33.1%

Operating Expenses 9,396 10,450 11.2%

Operating Income (1,045) 664 n/m

Operating margin n/m 6.0% n/m

Adjusted Net Income2 (1,781) 492 n/m

EBITDA 678 2,744 +4.0x

EBITDA margin 8.1% 24.7% 16.6 p.p.

Note: based on managerial accounts transformed under IFRS principles. Includes 12 aircraftsubleased from Aeroflot.1 Calculation based on Total Revenue of the Company2 Adjusted for (excluding) net FX loss from lease liabilities revaluation in the amount of 13.2 bn RUB

in Q1 2020 (3.5 bn RUB net FX gain in Q1 2019) and the associated deferred tax; FX gain/loss eliminated in consolidated financials due to hedging of FX-denominated liabilities with FX-denominated revenues (non-cash income).

2,09 2,26

Q1 2019 Q1 2020

2,02,5

Q1 2019 Q1 2020

2,352,13

Q1 2019 Q1 2020

RASK +8%

PAX +22%

ASK +23%

PLF -1 p.p

CASK -10%

Million PAX, Q1 2020 dynamics y-o-y

RUB / ASK

RUB / ASK

24

Net Debt / EBITDA

Leverage and Liquidity

Million RUB 31-Dec-2019 31-Mar-2020 Change

Borrowings 15,792 46,397 +2.9x

Lease Liabilities 557,124 698,979 25.5%

Pension Liabilities 784 771 (1.7)%

Total Debt 573,700 746,147 30.1%

Cash and Short-Term

Investments25,861 37,375 44.5%

Net Debt 547,839 708,772 29.4%

• Total and Net debt increased on the back of management’s efforts to accumulate liquidity amid significant

pressure on revenue.

• Cash position of RUB 37.4 billion and undrawn credit lines of RUB 80+ billion.

1 Based on financial data under IFRS 16; 31-Mar-2020 exchange rate – 77.73 RUB per USD, 31-Dec-2019 exchange rate – 61.91 RUB per USD.

2 Lease liabilities repayment schedule includes only principal amount and does not include future interest payments and liabilities for heavy maintenance. Does not include restructuring arrangements currently discussed, but not finalized.

Repayment Schedule Before Restructuring2

Debt Profile1

4,2

3,2

4,4

31-Dec-2018 31-Dec-2019 31-Mar-2020

Liquidity

25,9 37,4 49,5

101,0 81,3 62,2

126,9118,7 111,7

31.дек.19 31.мар.20 30.апр.20Cash and cash equivalents Available credit lines

67,5 86,8 89,4 80,0

355,4

2020 2021 2022 2023 2024+

Billion RUB Billion RUB

25

Aeroflot’s Steps to Navigate COVID-19 Crisis

• Management team is taking all necessary steps to minimize the financial consequences of the COVID-19

impact on Group’s operations and cash outflows from the company to optimize cash position.

Decrease number of operations to reduce variable costs

Optimize key fixed cost lines and CAPEX

Negotiations with partners and suppliers

Addressing liquidity risks of unearned revenue from ticket refunds

Restructuring deliveries of the fleet

Focus on domestic market and launching new domestic destinations

Operating passenger aircraft as cargo with increased capacity

~ 10% of capacity (ASK)

operated

Suspension of non-key spending

Special terms with lessors + ongoing

negotiations

Introduction of vouchers

Aircraft deliveries moved to later periods

New domestic routes in Summer 2020 schedule

Positive cargo revenue contribution

Work stream Comments Results

26

Optimizations with Liquidity in Focus

• Minimizing monthly cash burn via optimizing operating expenditures and reducing CAPEX

coupled with roll-out of state support are key to navigating through COVID-environment.

Optimizing monthly cash outflow1 Reducing 2020 CAPEX State support

~10-11

CMD 2019 plan Post managementactions

Billion RUB

~65

Up to 3x decrease

Monthly opex innormal environment

Post managementactions

Billion RUB, Including VAT, monthly average

~8bn state subsidy

Aeroflot is in the list of key

companies of the economy -

eligible for extra help

Other measures including

regulation amendments

resulting in indirect support are

announced1 Cash outflows, including cash costs, interest on lease payments (accounted as interest expense in PL) and indirect taxes (including VAT, etc.). Based on managerial accounts.

Down ~ 2x

27

1. Market Update and Operating Results

2. Network and Schedule Overview

3. Fleet Overview

4. Financial Performance

5. Appendix

28

52,6 56,4

62,6 68,8

73,1

2015 2016 2017 2018 2019

97,9 101,4 102,3 110,0 116,5

2015 2016 2017 2018 2019

Russian Air Transportation Market: Room for Growth

Trips per Capita2

… from airlines on domestic routes

Russian Total Passenger Traffic Growth, mln PAX1

Total CAGR 8.2%

International – 7.9% | Domestic – 8.6%

Source: TCH, Federal Air Transport Agency, Russian Railways (RZD), Aeroflot Group calculations1 Total local and foreign carriers’ traffic2 Airline O&D per capita per year

3,7

2,5

1,10,8

0,50,3

UK USA Turkey Russia2018

China Russia2008

• Russian market is well positioned for long-term growth on the back of low penetration, additional potential from

ongoing structural changes and increasing propensity to travel by air as well as advantageous geographical position.

Railways facing increasing competition…

RZD long-haul rail traffic, million PAX Domestic air traffic, million PAX

(5.0)% 3.6% 0.8% 7.9%5.6%

10.9%

13.6%7.3%

10.0%6.1%

52,6 56,4 62,6 68,8 73,1

54,7 46,461,1

68,1 74,1107,3 102,8

123,7137,0

147,2

0,0

50,0

100,0

150,0

2015 2016 2017 2018 2019

Domestic Routes International Routes

29

Operating Data – Q1 2020

Unit Q1 2019 Q1 2020 Y-o-Y Q1 2019 Q1 2020 Y-o-Y

Passenger Traffic th PAX 8,453 6,930 (18.0%) 12,764 11,196 (12.3%)

International Routes th PAX 4,380 3,438 (21.5%) 5,731 4,514 (21.2%)

Domestic Routes th PAX 4,073 3,493 (14.2%) 7,033 6,682 (5.0%)

Passenger Turnover mn pkm 23,285 19,123 (17.9%) 33,544 29,035 (13.4%)

International Routes mn pkm 15,925 12,671 (20.4%) 20,565 16,581 (19.4%)

Domestic Routes mn pkm 7,360 6,453 (12.3%) 12,978 12,454 (4.0%)

Passenger Capacity mn ASK 30,716 28,684 (6.6%) 43,044 40,859 (5.1%)

International Routes mn ASK 21,063 18,758 (10.9%) 26,547 23,451 (11.7%)

Domestic Routes mn ASK 9,653 9,927 2.8% 16,497 17,407 5.5%

Passenger Load Factor % 75.8% 66.7% (9.1) p.p. 77.9% 71.1% (6.9) p.p.

International Routes % 75.6% 67.5% (8.1) p.p. 77.5% 70.7% (6.8) p.p.

Domestic Routes % 76.2% 65.0% (11.2) p.p. 78.7% 71.5% (7.1) p.p.

Tonne-Kilometres mn tkm 2,302 1,956 (15.0%) 3,288 2,920 (11.2%)

International Routes mn tkm 1,582 1,312 (17.1%) 2,020 1,683 (16.7%)

Domestic Routes mn tkm 720 645 (10.4%) 1,268 1,237 (2.4%)

Revenue Flights flights 70,136 66,852 (4.7%) 102,457 98,454 (3.9%)

International Routes flights 34,191 29,640 (13.3%) 43,226 36,762 (15.0%)

Domestic Routes flights 35,945 37,212 3.5% 59,231 61,692 4.2%

Flight Hours hours 202,127 188,735 (6.6%) 283,525 268,530 (5.3%)

Aeroflot Airline Aeroflot GroupIndicators

30

Operating Data of Subsidiary Airlines – Q1 2020

Q1 2020 Y-o-Y Q1 2020 Y-o-Y Q1 2020 Y-o-Y

Passenger Traffic th PAX 1,491 (23.1%) 2,493 22.2% 281 (15.2%)

International Routes th PAX 560 (17.4%) 447 (22.8%) 69 (25.1%)

Domestic Routes th PAX 931 (26.2%) 2,045 40.1% 212 (11.4%)

Passenger Turnover mn pkm 5,040 (17.3%) 4,483 21.2% 389 (16.4%)

International Routes mn pkm 2,808 (14.0%) 998 (19.9%) 104 (19.7%)

Domestic Routes mn pkm 2,232 (21.1%) 3,485 42.1% 285 (15.2%)

Passenger Capacity mn ASK 6,539 (14.1%) 4,917 22.9% 718 0.7%

International Routes mn ASK 3,355 (13.7%) 1,141 (18.0%) 197 (3.5%)

Domestic Routes mn ASK 3,184 (14.6%) 3,776 44.7% 521 2.4%

Passenger Load Factor % 77.1% (2.9) p.p. 91.2% (1.3) p.p. 54.1% (11.1) p.p.

International Routes % 83.7% (0.2) p.p. 87.5% (2.2) p.p. 52.8% (10.6) p.p.

Domestic Routes % 70.1% (5.8) p.p. 92.3% (1.7) p.p. 54.6% (11.3) p.p.

Flight Hours hours 35,073 (18.1%) 34,975 22.2% 9,647 (3.5%)

Indicators Pobeda AuroraRossiya

31

Aeroflot Domestic and International Transit

… Results into a Flexible Approach to Transit Flows

Increase in International – International Traffic2

Growing Connectivity of Aeroflot Airline’s Flights1 ...

Source: Aeroflot Group.1 Data for Aeroflot airline’s own flights.2 From 2018 total international-international transit figures include Rossiya airline passenger traffic of the segment.

• Transit traffic segment experienced significant pressure from COVID-related decrease in demand in Q1 2020.

… Backed by expansion of international network …

4,44,8

5,3

0,03

0,2

4,44,8

5,5

2017 2018 2019Aeroflot Rossiya

1,2 0,9

0,10,1

1,31,0

Q1 2019 Q1 2020

Total int. – int. transit traffic, million PAX (Aeroflot and Rossiya flights)

(22.1)%

6 from winter ‘18/19 2 from summer ‘19

BukharaUzbekistan

DenpasarIndonesia

DublinIreland

LjubljanaSlovenia

OshKyrgyzstan

ColomboSri Lanka

MarseilleFrance

PalmaSpain

Share of international-international transit in total traffic of Aeroflot Group2

8.8% 8.7% 9.0% 10.2% 9.1%

13,1 13,9 14,1

24,225,5 25,3

17,018,0 18,2

21,2x 22,0x 23,6x

2017 2018 2019

International Domestic Combined Connectivity ratio

13,612,1

25,225,9

17,8 17,2

24,1x 24,2x

Q1 2019 Q1 2020

4.3 mln

62.2%

0.9 mln13.5%

0.9 mln

13.2%

0.8 mln11.0%

Point-to-pointInternational - InternationalInternational - Domestic / Domestic - InternationalDomestic - Domestic

32

• Group operations in all regions of the world experienced significant pressure from COVID-related

decline in demand.

Source: Data presented based on management accounting for scheduled flights of Aeroflot Group (excluding charter flights)

Q1 2020 Operating Data by Region (Scheduled Routes)

Americas Russia CIS

Europe Middle East Asia

(8,6)% (9,3)%

6,9 %

(13.0) p.p.Passengers

carriedRPK ASK PLF

(4,9)% (4,0)%

5,7 %

(7.2) p.p.Passengers

carriedRPK ASK PLF

(32,8)% (29,7)%(23,0)%

(6.6) p.p.

Passengerscarried

RPK ASK PLF

(19,3)% (19,5)%(13,4)%

(4.9) p.p.

Passengerscarried

RPK ASK PLF (28,1)% (29,5)%

(17,1)%(11.3) p.p.

Passengerscarried

RPK ASK PLF

(14,9)% (15,1)%

(7,3)% (6.7) p.p.

Passengerscarried

RPK ASK PLF

33

• Well-balanced fleet structure in line with Group’s strategy

Aircraft TypeOperated by Total as of Total as of Change vs.

Aeroflot Subsidiaries 31-Mar-20 31-Dec-19 31-Dec-19

Wide-body 39 19 58 59 (1)

Airbus A330 19 - 19 21 (2)

Airbus A350 1 - 1 - 1

Boeing 777 19 10 29 29 -

Boeing 747 - 9 9 9 -

Narrow-body (medium-haul) 154 82 236 238 (2)

Airbus A319- 30 30 30 -

Airbus A32074 6 80 82 (2)

Airbus A32133 - 33 33 -

Boeing 73747 46 93 93 -

Narrow-body (regional) 54 13 67 62 5

DHC 8 - 10 10 10 -

DHC 6 - 3 3 3 -

SSJ 10054 - 54 49 5

Total fleet 247 114 361 359 2

Aeroflot Group Fleet Breakdown

Aeroflot Group Fleet Overview Breakdown by Aircraft

Breakdown by Company

Narrow-body (medium-

haul)65%

Narrow-body

(regional) 19%

Wide-body16%

Aeroflot69%

Rossiya17%

Aurora6%

Pobeda8%

34• Aeroflot operates one of the youngest fleets in the industry among airlines with active fleet of 100+ aircraft.

• Aeroflot achieved significant progress in fleet renewal both for Aeroflot airline and for the Group.

1 Average Fleet Age of Selected Airlines with Fleet of 100+ Aircraft according to FlightGlobal data (as of May 2020, data by legal entity)

Aeroflot Group Fleet Evolution

Aeroflot Group Fleet in Operation

Aeroflot Airline Fleet in Operation

Average Age of the Fleet 1

247289

325366 359 361

6,4 6,5 6,2 6,26,9 7.0

2015 2016 2017 2018 2019 31.03.2020

Aircraft Average Age

165189

224253 245 247

4,4 4,2 4,1 4,2

5,0 5.0

2015 2016 2017 2018 2019 31.03.2020

Aircraft Average Age

3.6

4,2

5,0

5,8

5,9

5,9

6,1

6,1

6,2

6,4

6,4

6,4

6,7

6,8

6,9

6,9

6,9

7,0

7,1

7,1

7,2

Malta Air

Frontier Airlines

IndiGo

Hainan Airlines

Wizz Air

Qatar Airways

Spirit Airlines

Vietnam Airlines

Ethiopian Airlines

Sichuan Airlines

Azul

Shandong Airlines

Etihad Airways

Singapore Airlines

Tianjin Airlines

Xiamen Airlines

Shanghai Airlines

China Eastern Airlines

Emirates

Vueling Airlines

35

Traffic Revenue Analysis – Q1 2020

Region Q1 2019 Q1 2020 Y-o-YQ1 2020

% of sch. revenue

Russia 43,133 41,438 (3.9)% 40.6%

Europe 29,479 25,208 (14.5)% 24.7%

Asia 23,605 20,287 (14.1)% 19.9%

CIS 5,561 4,259 (23.4)% 4.2%

North and Central America 5,331 5,083 (4.7)% 5.0%

Middle East and Africa 6,283 5,864 (6.7)% 5.7%

Total 113,392 102,139 (9.9)% 100.0%

1 Data presented based on management accounting2 Data presented based on management accounting for Aeroflot airline and routes of subsidiary airlines under commercial management of Aeroflot

• In Q1 2020 revenue from scheduled passengers decreased by 9.9% on the back of softer demand in all regions of

operations due to COVID-19.

Segment Q1 2019 Q1 2020 Y-o-YQ1 2020

% of revenue

Domestic 44,347 42,489 (4.2)% 39.9%

International 74,909 64,118 (14.4)% 60.1%

Total 119,256 106,608 (10.6)% 100.0%

Traffic Revenue Breakdown by Type

Scheduled Traffic Revenue by POS2

Revenue from Scheduled Passengers (RUB mln)1

Total Passenger Revenue (Scheduled + Charter, RUB mln)

Sheduled Passenger Flights 91,7%

Charter Passenger Flights 4,0%

Cargo 4,3%

Sales abroad24,0%

Online37,8%

Call center and own branches

3,9%

Sales in Russia34,3%

36

2,69

2,822,77

2,44

2,73

2,61

Domestic International Total

3,42

3,643,56

3,41

3,87

3,67

Domestic International Total

Source: Aeroflot GroupNote: Data presented based on management accounting figures, scheduled and charted passenger flights revenue is used for calculations

RUB RUB

3.2%0.7% 1.1%Q1 Yield (Scheduled + Charter PAX Revenue / RPK) Q1 RASK (Scheduled + Charter PAX Revenue / RPK)

RUB / RPK RUB / ASK

• Positive pricing trends of 2019 were maintained in the beginning of 2020 allowing for increase in yields in Q1.

• RASK was under pressure due to significant adjustment in PLF in February-March 2020 on the back of COVID-

related demand pressure.

% Y-o-Y increase 2019 2020

Aeroflot Group Blended Flights Revenue Units

% Y-o-Y increase 2019 2020

(0.2)%

(9.2)%

6.2%

3.3%(5.8)%

(3.1)%

37

3,34

(0,07) 0,00 0,01 (0,01) (0,00)0,08 (0,03) 0,02

3,35

(0,01)

3,34 3,34

CASK Q1 2019 Aircraft and PassengerServicing

Staff Maintenance Other Expenses FX CASK Q1 2019

Group Unit Costs

• Cost per ASK increased only by 0.3% from RUB 3.34 in Q1 2019 to RUB 3.35 in Q1 2020 on the back of active

decrease in both operating expenses and capacity amid lower volume of operations.

-(0.3)%0.3%

Capacity: ASK adjustmentUnit Costs Dynamics

Operating Expense per ASK (CASK), RUB Q1 2019 Q1 2020 Change

Fuel 1.02 0.94 (6.9)%

CASK (ex. Fuel): 2.33 2.41 3.5%

Aircraft and Passenger Servicing 0.67 0.67 0.1%

D&A and Customs Duties 0.63 0.64 1.4%

Staff 0.52 0.52 (1.4)%

SG&A 0.15 0.15 (2.2)%

Maintenance 0.14 0.23 57.4%

Communication expenses 0.12 0.09 (21.5)%

Other Expenses 0.08 0.11 29.3%

Total CASK 3.34 3.35 0.3%

CASK Bridge

43,0

40,9

Q1 2019 Q1 2020

(5.1)%

Billion ASK

RUB / ASK

38

21 333

(17 057)

10 781 (4 496)

(3 376)

(404)

5 094

1 471

1 585

1 521 (2 924)

314 (789)

13 054

EBITDA Q12019

Volume Pricing Other FX drag onrevenue

FX drag oncosts

Fuel* Staff* Aircraft andPAX*

Comm.Expenses*

Maintenance* Admin & Sales& Marketing*

Other OPEX* EBITDA Q12020

EBITDA Evolution

* Excluding currency impact

• Key driver of EBITDA adjustment was a decrease in size and scale of operations on the back of COVID-related

pressure on demand as well as negative FX influence.

Total effect on revenue

∑=(14,147) RUB mlnTotal effect on costs

∑=5,868 RUB mln

Net volume and price effect

∑=(10,771) RUB mln

Net FX effect

∑=(3,779) RUB mln

Net volume and price effect

∑=6,272 RUB mln

39

Operating and Free Cash Flows

• Operating and Free Cash Flow remained under pressure in Q1 2020 due to demand pressure and adjustment of

operating program.

33 158

(31 070)

26 022

11 126 (736)

6 533

11 875

1 943

13 818

(7 016)

3 935 (1 286) 746

10 197

Loss BeforeIncome Tax

D&A InterestExpense

UnrealizedNet FXGain

Other Adj.Before

WorkingCapital

Changes

Cash FlowsFrom

OperatingActivitiesBefore

WorkingCapital

Changes

WorkingCapital

Changesand Income

Tax

Net CashFlows FromOperatingActivities

Purchase ofPPE &

CapitalizedExpenses

DepositPlacementand Return

Net Pre-delivery

Paymentsfor Aircraft

Net LeaseDeposits for

a/c andOther

Free CashFlow Q1

2020

Free CashFlow Q1

2019

40

31-Dec-2019 31-Mar-2020 %

Flight crew 4,359 4,676 7.3 %

Cabin crew 12,494 12,756 2.1 %

Other airline personnel (incl. airlines’ head office) 19,190 16,642 (13.3)%

Other non-airline subsidiaries’ personnel 5,586 7,183 28.6 %

Total1 41,629 41,257 (0.9)%

• Aeroflot Group headcount decrease by 0.9% vs. December 31, 2019.

4.3%

Million RUB per employee, annualized to 31.03.2020 Passengers per employee, annualized to 31.03.2020

5.9%

1 Aeroflot Aviation School headcount is included in Other non-airline subsidiaries’ personnel

Headcount Overview

Aeroflot Group Headcount

Traffic Revenue / Average Airlines’ Headcount PAX Traffic / Average Airlines’ Headcount

Headcount by Category

1 6171 687

31.03.2019 (LTM) 31.03.2020 (LTM)

Flight crew11,3%

Cabin crew30,9%

Other airline personnel

40,3%

Other non-airline personnel

17,4%

16,2

17,2

31.03.2019 (LTM) 31.03.2020 (LTM)

Personnel and Remuneration

Committee

(5 members)

Audit Committee

(3 members)

Strategy Committee

(10 members)

NameAudit

Committee

Personnel and

Remuneration

Committee

Strategy

Committee

Evgeny Ditrich Chairman

Mikhail

PoluboyarinovDeputy Chairman

Vitaly Saveliev

Alexander Galushka Member Member

Igor Kamenskoy Member Member Chairman

Maksim Liksutov

Dmitry Peskov Member Member

Vasily Sidorov Chairman Member Member

Yuri Slyusar Member

Maxim Sokolov Member Chairman Member

Sergey Chemezov

Independent director according to the Russian Corporate Governance Code 41

Board of Directors

Corporate Governance Board of Directors

Executive Board

General Meeting of Shareholders

Board of Directors

Incorporated in Russia, PJSC Aeroflot is subject to

Russian corporate governance regulations and

follows Russian Corporate Governance Code

The Board of Directors is currently composed

of 11 members. The Board’s composition is well

balanced from members’ background perspective.

PJSC Aeroflot

JSC Rossiya Airlines 75%-1 sh.

LLC Pobeda Airlines 100%

JSC Aurora Airlines 51%

JSC Aeromar

On-board sales/catering51%

LLC Aeroflot-Finance

Financial services100%

JSC Sherotel

Hotel services100%

Aeroflot Aviation School

Education services100%

Note: The Group structure as at 31 March 2020; Aeroflot Group consolidates all entities: PJSC Aeroflot and all subsidiaries.

PJSC Aeroflot also owns 45.0% of JSC AeroMASh-AB (Aviation security), 2.43% of JSC Sheremetyevo International Airport (base airport), 3.85% of PJSC Transport Clearing House (mutual settlements between agencies and airlines).

• Over the past years the Group structure was refined with a focus on aviation assets and disposal of non-core

assets, which is in compliance with the Group's strategy to streamline the core business.

LLC A-Technics

Maintenance 100%

42

Aeroflot Group Structure

Airlines Ancillary Companies

Address: 119019, Russia, Moscow, Arbat St. 1

E-mail: [email protected]

Website: www.aeroflot.ru

Investor Relations Contacts