Aeroflot Group Investor Presentation. September 2018

Transcription

1 Aeroflot Group Investor Presentation September 2018

2 Disclaimer 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 forwardlooking 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. 2

3 Aeroflot One of the Largest Airline Groups in the World 1 Top-20 airline group globally, one of Europe s leading airlines, #1 airline in Russia with leading positions on both domestic and international routes 2 Global network with 169 unique destinations (300+ routes) in 53 countries serviced by one of the youngest fleet globally 1 3 Multi-brand offering to appeal to a broad customer spectrum across geographies Celebrating 95 years in the world s sky 5 4 Superior product and customer experience (Aeroflot airline awarded Four Star Airline status by Skytrax) Efficient operating model underpinned by effective yield and cost management 6 Experienced management team and international standards of corporate governance Note: Network statistics are based on summer 2016 schedule. Youngest average fleet among airlines with fleet over 100 aircraft as of October

4 In the 1960s, flight attendant uniforms were styled in warm gray shades and the jacket was fastened with three shiny half-round buttons. The flight attendant uniform in the 1970s consisted of a jacket with white trim and buttons with the Aeroflot logo. Market Update 01

5 Russian Air Transportation Market Overview Passenger Traffic: Market vs Aeroflot Group Change in Airlines Passenger Numbers Russian Air Transportation Market (million PAX) inc. PAX of Russian and Foreign Carriers and int. transit PAX International Routes Domestic Routes mln PAX, 6M 2018 Increase in PAX million 12.5% % % M M 2018 Aeroflot Group (million PAX) 8.2% 12.3% % % Q Q Aeroflot Group Market Share (PAX) S7 Group Ural Airlines UTair Group Foreign Carriers Others Source: TCH, Rosaviatsia, Company estimates / 1 UTair Group includes UTair, Utair-Cargo and Turuhan % % M M 2018 Market Dynamics Net of Aeroflot Group Source: TCH, Company estimates Note: Incl. foreign carriers traffic. 9.6% % % 7.7 Q Q % Total Market 14.1% 19.2% International 17.5% 12.0% Domestic 10.0% 6M % 14.4% 6.2% 6.3% 12.0% 42.5% -1.6 p.p. Foreign Airlines 6M % 15.3% 6.5% 5.9%11.8% Clean Market Share of Aeroflot Group (Net of Intl.-Intl. Transit Traffic) 40.3% Aeroflot Group 38.7% 40.9% Other Russian Airlines Aeroflot Group continued to deliver growth on further recovering market increasing PAX by 8.2% in 6M 2018 with acceleration in Q

6 Capacity Trends Passenger Traffic (Russian and Foreign Carriers) Capacity (Russian and Foreign Carriers) Change in PAX traffic y-o-y, % Change in ASK y-o-y, % 25.7% 20.5% 16.4% 12.9% 12.2% 42.5 % 30.2 % 36.1 % 21.0% 21.8 % 17.2% 16.9 % 12.2% 7.4% 20.7 % 12.7% 15.3 % 10.8% 14.4 % 9.9% 13.0 % 14.6 % 11.9% 10.6% 9.0% Q Q Q Q Q International Domestic Total market Source: TCH, Company calculations Q Q Q Q Q Foreign carriers Russian carriers Source: SRS for foreign carriers, Rosaviatsia for domestic carriers before 2018, FAVT for domestic carriers in 2018, Company calculations. ASK is calculated based on published RPK and PLF data 6M 2018 are marked by further market recovery on the back of higher demand in both international and domestic segments and active capacity additions by market players. 6

7 A dark blue uniform was used in winter in the 1970s. It had a collarless jacket with five contrasting buttons and a white turtleneck-style blouse. An elegant summer dress was designed in the 1970s for flights to hot countries. Aeroflot Group Overview 02

8 Aeroflot Group Multi-Brand Strategy Brand Business Model Focus Airport PAX Contribution 1 PAX Growth Premium Flagship carrier Premium product (4 Stars) High income and middle class Hub and spoke model Moscow (Sheremetyevo) 6M % +6.4% M M 2018 Regional and Charter Regional and leisure product Focus on domestic flights Selected international routes, mostly out of VKO airport in Moscow Charter operations Saint-Petersburg (Pulkovo) Moscow (Vnukovo) % (3.8)% M M 2018 Low Cost Short and mid-haul flights Mostly domestic segment, selected international routes Point-to-point carriage Moscow (Vnukovo) % +50.8% M M 2018 Regional / Far-East The Far East airline flying on short- and mid-haul direct international and domestic routes Flights to remote cities (local flights) Vladivostok, Khabarovsk, Yuzhno-Sakhalinsk % +5.7% M M PAX contribution as of 6M Absolute number of passengers in million in green circle Simplified multi-brand product offering to capture customers in every market segment: from premium to low-cost. Aeroflot and Pobeda key engines of the Group both increased traffic by c1.0 million PAX 8

9 Pobeda Airline: Acceleration of Growth Overview of Pobeda Network Fleet Key features and achievements in 6M Goals Operating from Vnukovo airport (3 rd Moscow airport by PAX) Network comprising 62 routes (38 unique for the Group) Additional expansion to international destinations (10 countries) 20 Boeing NG ( ) Plans for 4 more aircraft to be delivered in 2018 Single class cabin 189 seats per plane 3.2 million PAX in 6M 2018 (+50.8% y-o-y) 6M 2018 PLF of 93.4% (+0.4 p.p. y-o-y) International RPK is 26% of total Pobeda traffic Active development of intra-region flights, and international flights from the regions 45 aircraft c mln PAX Growing Passenger Flows thousand PAX 50.8% Pobeda s Network (Summer 2018) Saint Petersburg Routes from Moscow Routes from St.-Petersburg Routes from Sochi Improving Load Factor PLF, % Kaliningrad Alanya Paphos Moscow Cheboksary Kazan Samara Ufa Cologne Leipzig Karlovy Vary Baden-Baden Rostov Volgograd Memmingen Bratislava Astrakhan Bergamo Anapa Venice Nalchik Gelenzhik Nazran Tivat Sochi Makhachkala Girona Pisa Vladikavkaz Istanbul Batumi Tbilisi Reus Gyumri Larnaca Route from Makhachkala Route from Krasnoyarsk -0.6 p.p. Perm Tyumen Ekaterinburg Nab. Chelny Chelyabinsk Surgut Krasnoyarsk Novosibirsk Ulan-Ude, Irkutsk Routes from Rostov Routes from Ekaterinburg 58.4% 42.2% 1, , , , , % +1.5 p.p. 93.1% 94.3% 93.7% 93.1% +0.4 p.p. 93.4% Q1 Q2 6M Q1 Q2 6M Pobeda, the only Russian LCC, is a timely value proposition to cost conscious passengers. 9

10 Corporate Strategy: New Vision 2025 Strategic Goals New Sources of Growth 2025 Strategic Target Achievement TOP-20 airlines by PAX globally TOP-5 airlines by PAX in Europe 15 5* Increasing depth and width of the network with increased focus on connecting passengers. Increasing population mobility, stimulation of passenger traffic and opening of new markets Improving efficiency of operations, relocation of Moscow operations from VKO to SVO Over 70 million passengers 11.1 mn 50.1 mn To be achieved by 2022 Over 30 million domestic passengers 4.9 mn To be achieved 27.6 mn by 2022 New Strategic Approach: Transfer traffic + LCC + Regional hubs Source: Air Transport World, Company estimates. Note: 2009 traffic number for Aeroflot and subsidiaries (Nordavia and Donavia). Aeroflot standalone 8.6 mn PAX. * Among traditional carriers excluding LCCs. Aeroflot Group plans to set new strategic goals with particular focus on transfer traffic and regional hubs driven by active development of its premium and LCC products. 10

11 Passengers were especially delighted by the uniform of the 1970s, which consisted of a deep red French style suit, Russian shirt, felt hat and gloves. A new summer uniform was introduced in the late 1980s a light blue dress with a white collar symbolizing summer and the light blue sky. Network Strategy 03

12 Aeroflot Group Network # of Flights Evolution by Region 1 (6M 2018, y-o-y) Geographic Network Russia Europe Asia North and Central America 4.2 % 3.1 % 8.4 % Los Angeles 15.8 % New York Washington Miami Havana Murmansk Arkhangelsk Salekhard New Urengoy Syktyvkar Khanty Mansiysk Saint Petersburg Surgut Nizhnekamsk Nizhnevartovsk Perm Nizhny Novgorod Ekaterinburg Kemerovo MOSCOW Tyumen Samara Krasnoyarsk Kaliningrad Kazan Omsk Novosibirsk Novokuznetsk Tomsk Hamburg Berlin Voronezh Ufa Chelyabinsk Abakan Minsk Irkutsk Saratov Kostanay Dusseldorf Frankfurt Orenburg Magnitogorsk Astana Barnaul Orly Prague Belgorod Volgograd Aktobe Paris Munich Rostov Atyrau Karaganda Chisinau Ulan Bator Vienna Gelenzhdik Astrakhan Milan Simferopol Stavropol Almaty Nice Rimini Anapa Adler Aktau Shymkent Sochi Bishkek Beijing Barcelona Rome Burgas Makhachkala Tivat Varna Mineral Waters Baku Tashkent Istanbul Yerevan Samarkand Antalya Krasnodar Dalian Teheran Larnaca Beirut Tel Aviv Delhi Dubai Hanoi Guangzhou Hong Kong Harbin Seoul Busan Shanghai Yakutsk Khabarovsk Vladivostok Yu. Sakhalinsk Tokyo Magadan P. Kamchatsky CIS 3.2 % Bangkok Ho Chi Minh City Phuket Middle East Total 5.9 % 18.3 % Male Aeroflot routes Rossiya routes Aurora routes Average Scheduled Flight Frequency per Route (Aeroflot Group ex-pobeda) Increase in Group frequencies by 9.8% was predominantly supported by expansion of the number of frequencies in domestic segment (+11.3%) and in the sector of long-haul routes (+20.4%). 6M M % % % % % 7.9 Stockholm Oslo Helsinki Tallinn Riga Copenhagen MOSCOW Hamburg Kaunas Minsk Amsterdam Hannover Berlin London Dusseldorf Warsaw Brussels Dresden Frankfurt Prague Paris Stuttgart Vienna Chisinau Zurich Munich Budapest Geneva Lyon Milan Venice Belgrade Nice Bologna Bucharest Split Zagreb Barcelona Sofia Rome Tivat Madrid Thessaloniki Istanbul Tbilisi Valencia Lisbon Alicante Athens Malaga Antalya Heraklion Larnaca Tenerife Scheduled International Domestic Medium-haul Long-haul Note: 1 Scheduled flights of Aeroflot Group (excluding Pobeda LCC) Moderate growth of destinations, focus on increase in frequencies on scheduled routes. Aeroflot Group operates flights to 169 unique destinations in 53 countries (in 2018 summer schedule, incl. Russia and new destinations launched in the high season). 12

13 Network Expansion Summer 2018 and Winter 2018/2019 Increased frequencies in Summer 2018 (examples) New destinations launched in Summer 2018 New destinations to be launched in Winter 2018/2019 season Yekaterinburg Cairo (Egypt) 3 flights per week 1 Nalchik (Russia) 7 flights per week 8 Gothenburg (Sweden) 7 flights per week Rostov N.Novgorod Saransk (Russia) 14 flights per week 2 Vladikavkaz (Russia) 7 flights per week 9 Ljubljana (Slovenia) 7 flights per week Kaliningrad Naples (Italy) 7 flights per week 3 Nazran (Russia) 7 flights per week 10 Dublin (Ireland) 7 flights per week Ufa Prague Rome Verona (Italy) 7 flights per week Burgas (Bulgaria) 7 flights per week 4 5 Grozny (Russia) 7 flights per week Makhachkala (Russia) 14 flights per week Osh (Kyrgyzstan) 7 flights per week Denpasar (Indonesia) 3 flights per week Milan Istanbul Antalya Kyzylorda (Kazakhstan) 4 flights per week St.Pete London (LGW) 7 flights per week 6 7 Izhevsk (Russia) 14 flights per week Colombo (Sri Lanka) 5 flights per week Destination in Central Asia Destination in South Asia Weekly frequency in summer schedule 2017 Addition in weekly frequencies starting from summer schedule 2018 In Summer 2018 Aeroflot continued to increase frequencies both on the routes with already high capacity deployed as well as underserved routes. Starting from Winter 2018/2019 schedule the Group targets 14 new destinations to be launched in Russia, Europe, and Asia. 13

14 Aeroflot Airline Domestic and International Transit Growing Connectivity of Aeroflot Airline s Flights 1... Average weekly frequency per route Aeroflot airline 16.0x 19.1x 21.2x 20.7x 22.3x Growth 6M % 4.6% Results into a Flexible Approach to Transit Flows Considerable share of transit of Aeroflot airline in Sheremetyevo 44.2% 42.1% 42.9% 42.2% 39.7% 13.5% 12.1% 11.8% 12.0% 11.1% 16.7% 16.9% 17.5% 17.3% 15.8% % 14.0% 13.1% 13.6% 13.0% 12.8% M M 2018 International Domestic Combined Backed by Convenient Location of Aeroflot Hub Moscow Connectivity ratio Shortest geographical distance M M 2018 Domestic - Domestic International - Domestic / Domestic - International International - International Increase in International International Traffic Total Aeroflot airline int. int. transit traffic, million PAX % From/To Paris London Vienna Stockholm Rome Tokyo Via Moscow 15:00 15:05 13:45 13:15 14:55 Via Dubai 18:30 18:55 17:15 17:45 17:30 Shanghai Via Moscow 14:05 14:10 12:50 12:20 14:00 Via Dubai 17:25 17:50 16:10 16:40 16:25 Hong Kong Via Moscow 15:00 14:40 13:20 12:50 14:30 Via Dubai 18:30 17:10 15:30 16:00 15:45 Source: Company data, IMF, Eurostat, RITA, Russian State Statistics Service, Rosaviatsia. 1 Data for Aeroflot airline s own flights; Aeroflot adopted new frequency per route and connectivity ratio calculation methodology and previous periods were recalculated retrospectively M M 2018 Pickup in point-to-point demand combined with expanding capacities resulting in growing international transfer volumes Increasing flight frequency improves connectivity and supports Aeroflot s traffic growth in Sheremetyevo airport. Advantageous geographical positions and Group s efforts support traffic growth on key European and Asian destinations. 14

15 A uniform consisting of a dark blue plaid skirt and vest captured the spirit of the 1980s. In 1994, the renowned fashion designer Valentin Yudashkin created a new uniform: a black suit with a red vest, white shirt and bow tie. Operating Results and Yields 04

16 Operating Data Q2 & 6M 2018 Indicator Unit Q Q Aeroflot airline Y-o-Y 6M M 2018 Y-o-Y Q Q Aeroflot Group Y-o-Y 6M M 2018 Y-o-Y Passenger Traffic th PAX 8,230 8, % 15,246 16, % 12,660 13, % 22,962 24, % International Routes th PAX 4,253 4, % 8,007 8, % 5,668 6, % 10,245 11, % Domestic Routes th PAX 3,977 4, % 7,239 7, % 6,993 7, % 12,717 13, % Passenger Turnover mn pkm 22,742 23, % 42,801 44, % 32,459 35, % 59,392 63, % International Routes mn pkm 14,805 15, % 28,565 29, % 18,992 20, % 35,523 37, % Domestic Routes mn pkm 7,937 8, % 14,236 15, % 13,466 14, % 23,869 26, % Passenger Capacity mn ASK 27,484 30, % 53,289 57, % 39,209 43, % 73,719 79, % International Routes mn ASK 18,168 19, % 35,891 38, % 22,895 25, % 43,741 47, % Domestic Routes mn ASK 9,316 10, % 17,398 18, % 16,314 17, % 29,977 32, % Passenger Load Factor % 82.7% 79.3% (3.5) p.p. 80.3% 78.0% (2.3) p.p. 82.8% 81.3% (1.5) p.p. 80.6% 80.0% (0.6) p.p. International Routes % 81.5% 77.5% (4.0) p.p. 79.6% 76.6% (3.0) p.p. 83.0% 80.0% (3.0) p.p. 81.2% 79.1% (2.1) p.p. Domestic Routes % 85.2% 82.8% (2.4) p.p. 81.8% 80.7% (1.1) p.p. 82.5% 83.1% 0.6 p.p. 79.6% 81.4% 1.7 p.p. Tonne-Kilometres mn tkm 2,304 2, % 4,335 4, % 3,217 3, % 5,899 6, % International Routes mn tkm 1,508 1, % 2,907 3, % 1,888 2, % 3,539 3, % Domestic Routes mn tkm % 1,429 1, % 1,329 1, % 2,361 2, % Revenue Flights flights 60,238 67, % 115, , % 92, , % 174, , % International Routes flights 29,876 32, % 57,905 63, % 38,520 43, % 72,285 79, % Domestic Routes flights 30,362 34, % 57,840 64, % 53,988 59, % 102, , % Flight Hours hours 172, , % 334, , % 252, , % 477, , % 16

17 Operating Data July & 7M 2018 Indicator Unit July 2017 July 2018 Aeroflot airline Y-o-Y 7M M 2018 Y-o-Y July 2017 July 2018 Aeroflot Group Y-o-Y 7M M 2018 Y-o-Y Passenger Traffic th PAX 3,301 3, % 18,546 19, % 5,327 5, % 28,289 30, % International Routes th PAX 1,717 1, % 9,724 10, % 2,409 2, % 12,655 13, % Domestic Routes th PAX 1,584 1, % 8,823 9, % 2,917 3, % 15,634 17, % Passenger Turnover mn pkm 9,087 9, % 51,888 54, % 13,796 15, % 73,188 79, % International Routes mn pkm 5,885 6, % 34,450 35, % 7,871 8, % 43,394 46, % Domestic Routes mn pkm 3,202 3, % 17,438 18, % 5,926 6, % 29,795 32, % Passenger Capacity mn ASK 10,188 10, % 63,477 68, % 15,175 16, % 88,894 96, % International Routes mn ASK 6,711 7, % 42,603 45, % 8,781 9, % 52,523 57, % Domestic Routes mn ASK 3,476 3, % 20,874 22, % 6,393 7, % 36,371 39, % Passenger Load Factor % 89.2% 89.3% 0.1 p.p. 81.7% 79.8% (1.9) p.p. 90.9% 91.2% 0.3 p.p. 82.3% 81.9% (0.4) p.p. International Routes % 87.7% 86.9% (0.8) p.p. 80.9% 78.2% (2.7) p.p. 89.6% 89.0% (0.6) p.p. 82.6% 80.7% (1.9) p.p. Domestic Routes % 92.1% 93.8% 1.7 p.p. 83.5% 82.9% (0.6) p.p. 92.7% 94.2% 1.5 p.p. 81.9% 83.7% 1.8 p.p. Tonne-Kilometres mn tkm % 5,239 5, % 1,343 1, % 7,243 7, % International Routes mn tkm % 3,495 3, % % 4,306 4, % Domestic Routes mn tkm % 1,744 1, % % 2,937 3, % Revenue Flights flights 21,853 24, % 137, , % 34,331 38, % 209, , % International Routes flights 10,691 12, % 68,596 75, % 14,242 16, % 86,527 96, % Domestic Routes flights 11,162 12, % 69,002 76, % 20,089 22, % 122, , % Flight Hours hours 62,396 69, % 397, , % 93, , % 571, , % 17

18 6M 2018 Operating Data by Region (Scheduled Routes) Americas Russia CIS 9.6 % 8.5 % 16.9 % (5.9) p.p. Passengers RPK ASK PLF carried Performance of North and Central American market was supported by addition of 3rd frequency to NY and increased ASK to other destinations, which weighted on PLF. 9.6 % 10.6 % Passengers carried Russian market is continuing to show consistent growth in 2018 with strong PLF performance on the back of efficient capacity management. Europe Middle East Asia 7.7 % 2.1 p.p. RPK ASK PLF 0.2 % (2.7)% (0.8)% (1.6) p.p. Passengers RPK ASK PLF carried Group KPIs in CIS came under pressure as a result of subsidiaries operating program optimization while Aeroflot airline showed steady growth on all key routes including Kazakhstan % 11.3 % 14.4 % 8.6 % 4.9 % 4.3 % 1.9 % 1.2 % 2.7 % Passengers carried (2.1) p.p. RPK ASK PLF Passengers carried (3.1) p.p. RPK ASK PLF European market performance benefited from Operating performance of the region significantly launch of additional frequencies to key affected by stronger competition on key routes as destinations and from new destinations opening, well as increased frequencies to Istanbul, Antalya putting slight pressure on PLF. and Dubai backed by strong demand to the region Source: Data presented based on management accounting for scheduled flights of Aeroflot Group (excluding charter flights) Passengers carried (1.2) p.p. RPK ASK PLF Passenger traffic on key regional destinations stable or trending towards growth (China), higher number of frequencies to Male supportive for overall performance of the region. Strong operating performance on the scheduled routes was partially offset by selective adjustments in network due to internal and external reasons 18

19 Aeroflot Group Scheduled Flights Revenue Units Q2 Yield (PAX Revenue / RPK) Q2 RASK (PAX Revenue / ASK) RUB % % % 3.93 RUB % % % 3.16 Domestic International Total 6M Yield (PAX Revenue / RPK) RUB Domestic International Total 6M RASK (PAX Revenue / ASK) RUB % % % % % % 2.92 Domestic International Total Domestic International Total % Y-o-Y increase Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations. RUB dynamics and changing mix of operations at subsidiaries level due to rapid expansion of LCC affected RUB yields in Q2 and 6M

20 Aeroflot Airline Yield Dynamics (Monthly) Aeroflot Airline Total Yield Aeroflot Airline International Yield RUB/RPK, Change y-o-y in % 18.1% RUB/RPK, Change y-o-y in % 23.8% 4.5% 9.8% 6.2% 8.8% 4.4% 7.8% 5.1% 6.2% (4.2)% (4.2)% (2.6)% (1.8)% (0.1)% (9.5)% (7.3)% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Aeroflot Airline Domestic Yield 0.0% 0.4% RUB/RPK, Change y-o-y in % 8.1% (1.3)% (2.3)% (2.4)% 4.1% 4.1% 3.7% 3.0% (6.1)% (4.8)% 0.4% 1.1% 1.1% 1.8% 2.1% 1.7% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun (0.0)% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: Company calculations, data presented based on management accounting figures for Aeroflot airline standalone; immaterial deviations vs. historical data may occur due to adjustments in Revenue Management System (RMS) Note: Overall monthly yield performance of Aeroflot airline is consistent with the Group performance. Immaterial deviations of 1-2 p.p. in specific months can be the case, but yield performance trends are similar for the airline and the Group. Aeroflot airline yields showed improvement on a monthly basis throughout 2017 (y-o-y) and in 2018 yield dynamics entered positive zone in both international and domestic segments In 6M 2018 international segment was the main driver of Aeroflot growth: yields were in higher single-digit growth mode during the period and in June yield dynamics reached +23.8% y-o-y supported by additional demand associated with FIFA World Cup. 20

21 Aeroflot Group Traffic Revenue Analysis Traffic Revenue Breakdown by Type 6M 2018 Sheduled Passenger Flights 89.8% Revenue from Scheduled Passengers (RUB mln) 1 Q Q Y-o-Y Region 6M M 2018 Y-o-Y 6M 2018, % of sch. revenue 44,726 53, % Russia 75,288 87, % 40.3% 28,470 34, % Europe 50,832 60, % 27.8% Cargo 3.4% Charter Passenger Flights 6.8% Scheduled Traffic Revenue by POS 6M Sales in Russia 32.1% Call center and own branches 3.5% Online 32.8% Sales abroad 31.6% 15,280 16, % Asia 31,367 34, % 15.9% 5,560 6, % CIS 9,618 10, % 4.9% 6,481 7, % North and Central America 11,478 12, % 6.0% 5,564 6, % Middle East 9,833 10, % 5.1% 106, , % Total 188, , % 100.0% Total Passenger Revenue (Scheduled + Charter, RUB mln) Q Q Y-o-Y Segment 6M M 2018 Y-o-Y 6M 2018, % of revenue 46,108 55, % Domestic 77,824 89, % 38.7% 67,486 80, % International 122, , % 61.3% 113, , % Total 200, , % 100.0% In 6M 2018 revenue from scheduled passengers grew by 14.6% mainly driven by revenue growth on Russian, European and Asian markets. 1 Data presented based on management accounting 2 Data presented based on management accounting for Aeroflot airline and routes of subsidiary airlines under commercial management of Aeroflot 21

22 The summer uniform of the 1980s took on the typical look of this time a short-sleeve cropped jacket with bold shoulders. At that time, Aeroflot was transporting more than 120 million passengers per year. This achievement was entered in the Guinness Book of Records. The scarlet uniform returned in the early 1990s. Aircraft Fleet 05

23 Aeroflot Group Fleet Evolution Aeroflot Group Fleet in Operation 1 Average Age of the Fleet Aircraft Aircraft Average Age ,1 289 Average Age , Excludes planes out of operation 2 Average Fleet Age of Selected Airlines with Active Fleet of 100+ Aircraft according to FlightGlobal data (as of July 2018) excluding planes out of operation Aeroflot Airline Fleet in Operation 1 Hainan Airlines Shandong Airlines Xiamen Airlines Sichuan Airlines Spirit Airlines China Eastern Airlines Azul Emirates Airline IndiGo Qatar Airways LATAM Airlines Chile Shanghai Airlines Lion Air Etihad Airways Garuda Indonesia EasyJet Europe Singapore Airlines Japan Airlines Qantas American Airlines Lufthansa Air France British Airways Jazz United Airlines Delta Air Lines Aeroflot operates the youngest fleet 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

24 Aeroflot Group Fleet Breakdown Aircraft Type Operated by Lease type Total as of Total as of Change vs. Owned Aeroflot Subsidiaries Finance Operating 30-Jun Dec Dec-17 Wide-body Airbus A Boeing Boeing Narrow-body (medium-haul) Airbus A Airbus A Airbus A Boeing Narrow-body (regional) DHC DHC SSJ Total fleet Breakdown by Aircraft 2 Breakdown by Company 2 Breakdown by Ownership Type 2 Wide-body 16% Pobeda Aurora 6% 7% Finance 10% Owned 2% Narrowbody (regional) 17% Narrowbody (mediumhaul) 67% Rossiya 18% Aeroflot 69% Operating 88% 1 Excluding An-24 and An-148 not operated by the airlines of the Group 2 Excludes planes out of operation Well-balanced fleet structure in line with Group s strategy 24

25 Fleet Expansion Strategy Delivery/Phase-out Schedule 1 Aeroflot Group Fleet as at Year-end 2 Type of aircraft 6M 2018 (Actual) Q3-Q Current Delivery Phase out fleet (1) Delivery Phase out Number of aircraft 409 Wide-body (long-haul) A B B Narrow-body (medium-haul) 22 (9) (8) A (3) A (5) 84 2 (4) A (4) B (1) Narrow-body (regional) (1) SSJ DHC (1) DHC TOTAL 34 (9) (9) Net additions (1) + 25 aircraft + 12 aircraft E 2019E 2020E 2021E 2022E 1 As of , not including aircraft leased or subleased to other operator (1 An-24 and 5 An-148 ). Phase-out plans for Q3-Q include aircraft in finance lease that will be phased out according to the existing plan. 2 According to existing strategy. Not including aircraft leased or subleased to other operator. Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking into account market trends and opportunities. 25

26 The renowned Russian fashion designer, Victoria Andreyanova, created a dark blue uniform in A dark blue uniform for flights in autumn and winter was introduced in 2010 and ranked first in international ratings for being the most stylish and elegant flight attendant uniform. Financial Results 06

27 Managing revenue Controlling costs Revenue and Cost Management Strategy in Challenging Environment Brent oil price dynamics (RUB per barrell) 5,000 4,600 4,200 3,800 3,400 3,000 OPEC decision on cutting crude production, growth by 15% Hurricane Harvey, growth by 14% US sanctions against Russia, growth by 16% within two days US and Saudi Arabia joint sanctions against Iran, growth by 10% US sanctions against Russia, growth by 8% within one week 2,600 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Source: Bloomberg Revenue and Cost Management Strategy 1 Active revenue management Efficiency based strategy 1 2 Exploiting ancillary revenue opportunities Initiatives to improve financial performance Specific efficiency initiatives 2 3 Focus operational efficiency and network synergies Cost cutting programmes 3 In order to deliver results and support profitability despite fuel price headwinds Aeroflot focuses both on exploring revenue opportunities and strict cost control, including dedicated cost cutting initiatives. 27

28 Focus on Revenue and Cost Efficiencies Initiatives on the revenue side More revenues in core business Initiatives on the cost side Company s strategy is efficiency based 2018 initiatives to further strengthen already efficient revenue management Examples: Increased day-to-day control over PLF and profitability Optimization in booking classes and within fare families Fuel surcharge Efficiency Based Strategy Examples: Multibrand approach Standardized modern and fuel efficient fleet Effective fuel supply management Development of hub in SVO Additional services to enhance passengers convenience Strategic initiatives that particularly target efficiency New services to extract more ancillary revenue ( ) Examples: Paid seat selection for lower booking classes Introduction of paid upgrades Selling baggage online Long-Term Efficiency Initiatives Examples: IT solutions for optimization of fuel loading Optimization of loading processes for consumables KPI based remuneration Focus on efficiency of operations 2018 cost optimization initiatives Improving operational efficiency supported by new markets Examples: On-time performance Decrease in MCT to improve connectivity New routes will improve transfer potential of the network and increase utilization Active Phase of Cost-Cutting Examples: Optimization of SG&A and marketing budgets Negotiating discounts with all counterparties and service providers (including fuel) On-board service and catering: optimizing budgets, loading efficiency (incl. food, water, amenity kits) Aeroflot has long-term commitment and track records of improving operational and financial efficiency achieved via various means - from fundamental principles of business strategy to dedicated efficiency programmes. Active phase of revenue generation and cost-cutting initiatives launched in 2018 targets to partially absorb pressure on the Group s costs coming from macroeconomic factors (fuel and exchange rates). 28

29 Financial Highlights: Q2 and 6M 2018 Q Q Change RUB mln (where applicable) 6M M 2018 Change 12,660 13, % Passenger Traffic (mln PAX) 22,962 24, % 131, , % Revenue 234, , % 113, , % Traffic Revenue 200, , % 32,315 35, % EBITDAR 1 46,057 46, % 24.5% 23.1% (1.4) p.p. EBITDAR 1 margin 19.6% 17.4% (2.2) p.p. 16,539 14,354 (13.2)% EBITDA 15,403 6,622 (57.0)% 12.6% 9.3% (3.3) p.p. EBITDA margin 6.6% 2.5% (4.1) p.p. 8,229 6,315 (23.3)% Net income / (loss) 2,890 (5,228) n/m Financial results of 6M 2018 are explained by continuing pressure of macroeconomic factors fuel and exchange rate dynamics. Fuel cost pressure was partially offset by yield trends as well as cost-cutting initiatives. 1 EBITDAR = EBITDA + operating lease expenses. 29

30 Revenue Growth Decomposition Revenue by Key Factors Revenue by Business Segments RUB mln RUB mln 13.2% 13.2% 7.0% + 4.7% + 1.4% + 0.1% 11.7% + 1.7% + 0.4% + (0.7)% 234,860 16,420 Growth in operating metrics: RPK + 7.7% PAX + 8.2% 11,022 3, ,822 Depreciation of RUB in 6M 2018 y-o-y by c2% vs. USD and by Domestic yield up by 4.6%, international 234,860 27,553 4, (1,586) 265,822 Charter RPK up by 8.6% y-o-y up by 8.0% c15% vs. EUR Growth across geographies: Russian revenue % International revenue +13.7% Cargo volumes +10.6% Mainly driven by lower ground handling and maintenance and refueling services revenue from third-parties 6M 2017 Volume Currency Pricing Other 6M M 2017 Scheduled Passenger Flights Charter Passenger Flights Cargo Other Revenue 6M 2018 Positive contribution of volume and pricing as well as support from FX were the main factors influencing revenue. Primary driver of revenue growth was expansion of scheduled passenger flights across all segments, notably in Russia, Europe and Asia 30

31 Operating Costs Q Q Change y-o-y Change ex. FX & NRE Operating Expense (RUB mln If not stated otherwise) 6M M 2018 Change y-o-y Change ex. FX & NRE % of Total OpEx (6M 2018) 28,790 43, % 44.4% Fuel 56,217 77, % 36.0% 29.3% 90,312 98, % 6.0% Opex (ex. Fuel) 170, , % 8.8% 70.7% 24,807 26, % 2.0% Aircraft, traffic and passenger servicing 45,961 48, % 2.1% 18.3% 19,736 20, % 6.6% Staff 38,324 41, % 10.8% 15.7% 15,776 21, % 25.2% Operating lease 30,654 39, % 27.0% 14.9% 7,503 11, % 47.7% Maintenance 1 15,682 20, % 26.0% 7.6% 8,336 7,918 (5.0)% (8.2)% SG&A 2 14,507 14,078 (3.0)% (4.7)% 5.3% 3,906 3,037 (22.2)% (22.2)% D&A and customs duties 7,706 6,901 (10.4)% (10.4)% 2.6% 10,248 7,752 (24.3)% (23.3)% Other expenses 3 18,112 16,944 (6.4)% (4.9)% 6.4% 119, , % 15.3% Total Opex 227, , % 15.6% 100.0% 1 Normalized change in Maintenance expenses (including change in maintenance reserve) in 6M 2018 amounts to +26% y-o-y, in Q % y-o-y. 2 Includes sales and marketing expenses and administration and general expenses. 3 Other expenses include Global Distribution Systems cost, reserves accrual and reversal, catering expenses, banks commissions and other operating income and loss. In 6M 2018 operating costs were significantly impacted by expansion of operations, fuel price increase and growing fleet of the Group. FX dynamics also affected key operating expenses lines. 31

32 Group Unit Costs Q Q Change Operating Expense per ASK (CASK), RUB 6M M 2018 Change % Fuel % (1.1)% Opex (ex. Fuel): % (2.6)% Aircraft, Traffic and Passenger Servicing (2.5)% (7.2)% Staff % % Operating Lease % % Maintenance % (14.1)% SG&A (10.6)% (29.7)% D&A and Customs Duties (17.5)% (31.6)% Other Expenses (13.8)% % Total Opex % 8.0% (1.3)% 6.6% (0.02) 0.08 (0.02) (0.02) (0.03) (0.06) Reported CASK 6M 2017 Staff Fuel Maintenance Aircraft, Traffic and Passenger Servicing Operating Lease D&A and CD* Admin & Sales & Marketing Other Costs Reported CASK 6M 2018 * Customs duties ** NRE includes insurance refund for the aircraft and recovery of part of the provision created for compensation under long-term motivation programs FX NRE** CASK 6M 2018 Reported CASK ex. FX and 6M 2017 NRE** Cost per ASK increased by 8.0% from RUB 3.08 in 6M 2017 to RUB 3.33 in 6M 2018 on the back of fuel, maintenance and operating lease expenses pressure. 32

33 Fuel Cost Management Flight Hours Fuel Consumption per ASK Fuel Consumption per RTK (thousand hours) (gr/ask) (gr/rtk) 9.4% (1.4)% (0.4)% Aeroflot Airline Jet Fuel Price (RUB per tonne of jet fuel) M M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 6M 1 (WA) USD/RUB Brent (USD) Source: Bloomberg, Company data 1 Weighted average price for 6M 6M M USD/RUB exchange rate as per the Central Bank of Russia 3 Assuming 18% VAT rate Comments 6M M 2018 Efficient fuel procurement: 1-year supply contracts in airports across Russia Majority of fuel purchased in Russia and almost all fuel at international airports supplied at formulalinked price - Jet fuel price Intl = NW Europe (FOB Rotterdam) price x Discount x FX rate 2 x Storage/Fuelling/Supply fees (if any of these applicable) Increasing average fuel price. Weighted average fuel purchase price of $710/ton (RUB 42,273/ton) in 6M 2018 vs $563/ton (RUB 32,671/ton) in 6M 2017 (29.4% y-o-y increase in RUB terms) Aeroflot is achieving efficiency gain in fuel costs as new aircraft are put into operation Oil price and RUB fluctuations led to further upward pressure on jet fuel price in 6M

34 Headcount Overview Aeroflot Group Headcount by Category Traffic Revenue / Average Airlines Headcount 31-Dec Jun-2018 % Cabin crew 11,259 11, % Airport services 7,034 7, % Technical maintenance and repair 4,702 5, % Flight crew 3,846 3, % Tickets and services sales, advertising 1,903 1, % Other airline personnel (inc. airlines head office) 5,430 5, % Other non-airline subsidiaries personnel 4,696 4, % Total 1 38,870 40, % 1 Aeroflot Group headcount table excludes Aeroflot Aviation School headcount amounting to 181 employees as at and 196 employees as at Other airline personnel 13.8% Airport services 17.7% Other non-airline personnel 12.3% Tickets and services sales, advertising 4.7% PAX Traffic / Average Airlines Headcount (million RUB per employee, annualized to ) (passengers per employee, annualized to ) Flight crew 9.8% Cabin crew 29.2% Technical maintenance and repair 12.5% 7.1% 5.4% ,436 1, (LTM) (LTM) (LTM) (LTM) Improvement in labour productivity has resulted in increase of key performance indicators in 6M Aeroflot Group headcount increased by 6.7% vs. June 30,

35 EBITDA Evolution (RUB mln) Total effect on revenue =30,962 RUB mln Total effect on costs =(39,745) RUB mln Net volume and price effect =19,939 RUB mln Net FX effect =6,116 RUB mln 11,022 (4,906) Net volume and price effect =(34,839) RUB mln (20,264) 3, Volume effect (4,792) RUB mln 16,420 Price effect (15,154) RUB mln (3,329) (958) (8,279) 15,403 (4,070) 676 1,385 (1,305) 6,622 5,317 Reported EBITDA 6M 2017 Volume Pricing Other FX benefit on revenue FX drag on costs Fuel* Staff* Aircraft, Traffic and PAX* Operating Leases* Maintenance* Admin & Sales & Marketing* Other OPEX* Reported EBITDA 6M 2018 * Excluding currency impact ** NRE includes insurance refund for the aircraft and recovery of part of the provision created for compensation under long-term motivation programs Positive FX impact was observed on revenue side on the back of weakening RUB, which outpaced pressure on operating costs. Key drivers of EBITDA adjustment along with the growth in size and scale of operations were increase in jet fuel price and operating lease costs growth. NRE** Adjusted EBITDA 6M

36 Operating and Free Cash Flows (RUB mln) Billion RUB 6M 2018 Other adjustments before working capital changes, incl. 6.3 Effect from revenue hedging (finance lease hedge accounting) 3.0 Change in provisions 4.2 Other (0.9) Billion RUB 6M 2018 Working capital changes and income tax, incl Change in accounts receivable and prepayments (6.2) Change in accounts payable and accrued liabilities 38.5 Change in expendable spare parts and inventories (1.6) Change in tax and restricted cash 0.7 (13.8)% 15,160 (573) 31,354 (5,750) 3,120 (569) 53,289 61,788 41,901 6,274 6,394 2, ,545 (5,358) Profit Before Income Tax D&A Interest Expense Unrealized Net FX Loss Other Adj. Before Working Capital Changes Cash Flows From Operating Activities Before Working Capital Changes 1 Change in provisions line mainly consists of provision for regular repairs and maintenance Working Capital Changes and Income Tax Net Cash Flows From Operating Activities Capital Expenditures Proceeds From Sale of PPE Deposit Placement and Return Net Predelivery Payments for Aircraft Net Leasing Deposits for a/c in Operating Lease and Other Free Cash Flow 6M 2018 Strong Operating and Free Cash Flow generation in 6M 2018 on the back of growing business volumes and solid operating performance. Free Cash Flow 6M

37 Pobeda Financial Results Increasing PAX Traffic 1 RASK dynamics Growing Revenues of LCC Segment Million passengers RUB 3.2 Q Q Change RUB mln 6M M 2018 Change ,991 8, % Revenue 8,268 13, % 6M M M M ,905 2, % EBITDAR 1 2,043 2, % PAX up by 50.8% in 6M 2018 RASK up by 3.5% in 6M 2018 Increasing ASK CASK dynamics Billion ASK RUB 38.2% 27.7% (10.5) p.p. EBITDAR margin 24.7% 19.1% (5.6) p.p. 1, (13.2)% EBITDA (83.8)% % 11.0% (10.9) p.p. EBITDA margin 4.9% 0.5% (4.6) p.p % Net income (56.2)% 6M M M M 2018 ASK up by 60.6% in 6M 2018 CASK up by 8.3% in 6M % 10.5% (7.0) p.p. Net margin 4.8% 1.3% (3.5) p.p. Note: based on managerial accounts transformed under IFRS standards 1 Calculation based on Total Revenue of the Company Pobeda has demonstrated solid results backed by strong demand and active expansion of the fleet in 6M

38 Leverage and Liquidity Debt Profile 1 Net Debt / LTM EBITDA 2 RUB mln 31-Dec Jun-2018 Change Borrowings 3,181 3, % Finance Lease Liabilities 100,689 92,632 (8.0)% Pension Liabilities % Total Debt 104,792 97,099 (7.3)% Cash and Short Term Investments 54,909 97, % Net Debt 49,883 (656) n/m 4 RUB mln Net Debt 2 EBITDA 2 30-Sep Dec Mar Jun ,925 49,883 29,470 (656) 54,147 56,015 49,420 47,234 Debt breakdown by currency Finance Lease Repayment Schedule (RUB billion) 3 n/m 30-Jun Sep Dec Mar Jun-2018 Borrowings 12% Finance Lease 2% % RUB 98% USD Dec-2017 exchange rate RUB per USD, 30-Jun-2018 exchange rate RUB per USD 3 Not including interest; future payments in dollars converted into roubles at exchange rate of RUB per USD 2 Net debt does not include capitalised operating lease expenses; based on annualized EBITDA 4 From 01-Jan-2018 interest on bank deposits is included in Cash and Short Term Investments Net Debt turned negative as at due to decrease in finance lease obligations as well as accelerated growth in cash position. Cash position of RUB 98.0 billion and undrawn credit lines of RUB 91.7 billion 38

39 Appendix 07

40 Russian Air Transportation Market: Room for Growth Russian Total Passenger Traffic Growth, mln PAX (1) Trips per Capita (2) Notes: (1) Total local and foreign carriers traffic Sources: FAAT, Aeroflot estimates Railways facing increasing competition (5.1)% Total CAGR 4.5% International (1.3)% Domestic 12.4% RZD long-haul rail traffic (mln PAX) (6.9)% (5.0)% 3.6% Domestic Routes International Routes Long-distance rail routes low over 10 mln PAX in the recent 5 years and over 30 mln PAX over a decade 0.8% % Change FY % 11.0% UK USA Turkey Russia (2) Airline PAX per capita per year, as of 2017 Sources: FAAT, Aeroflot estimates from airlines on domestic routes Domestic air traffic (mln PAX) 10.8% 17.9% % 52.6 Despite fast growth of the recent years, Russian airline industry still has promising growth prospects compared to European & US markets x.xx Domestic PAX per capita Domestic air traffic growth at a much higher pace than other means of transportation 7.3% % Russian market is well positioned for long-term growth on the back of still low penetration, additional potential from ongoing structural changes and increasing propensity to travel by air as well as advantageous geographical location. 40

41 flights mm pax Infrastructure Expansion to Support Future Growth New Terminal B Highlights New infrastructure objects launched in 2018 Capacity 20 mln PAX (4,200 PAX per hour) Size 110 thd sqm New technologies implemented in the new terminal Connected to terminal E via interteminal tunnels Terminal B Interterminal tunnel Express train Evolution of key operating indicators (max. theoretical capacity) Sheremetyevo development plan Runway-3 Terminal C Warehouse Terminal B Fuel-filling Terminal C-2 Complex Cargo Terminals Annual pax capacity Flights per 55 hour 2 Source: Sheremetyevo press-center, aviation explorer, public sources Note: 1 Actual passenger traffic of According to IATA Methodology Runway-1 Runway-2 Terminal D Terminal F Terminal E Interterminal Tunnel Aeroflot has started transferring domestic flights to the new Terminal B starting from May. The Company plans to transfer all domestic flights to the new terminal by the beginning of Winter 2018/2019 season. 41

42 Key Operating Data of Subsidiary Airlines Indicator Unit Rossiya Airline Pobeda Airline Aurora Airline 6M 2018 Y-o-Y 6M 2018 Y-o-Y 6M 2018 Y-o-Y Passenger Traffic th PAX 4,751 (3.8)% 3, % % International Routes th PAX 1, % % % Domestic Routes th PAX 2,916 (11.0)% 2, % % Passenger Turnover mn pkm 12, % 5, % 1, % International Routes mn pkm 6, % 1, % % Domestic Routes mn pkm 5,876 (5.4)% 4, % % Passenger Capacity mn ASK 14,760 (2.4)% 6, % 1, % International Routes mn ASK 7, % 1, % % Domestic Routes mn ASK 7,588 (11.9)% 4, % 1, % Passenger Load Factor % 83,5% 3.8 p.p. 93,4% 0.4 p.p. 70,6% 3.1 p.p. International Routes % 89,8% 0.2 p.p. 93,0% 3.8 p.p. 68,5% (2.2) p.p. Domestic Routes % 77,4% 5.3 p.p. 93,6% (0.8) p.p. 71,3% 4.9 p.p. Flight Hours hours 91,897 (2.2)% 42, % 21, % 42

43 Aeroflot Group Blended Flights Revenue Units Q2 Yield (Scheduled + Charter PAX Revenue / RPK) Q2 RASK (Scheduled + Charter PAX Revenue / ASK) RUB RUB 11.1% 7.2% 9.8% 7.8% 8.0% 8.8% Domestic International Total Domestic International Total 6M Yield (Scheduled + Charter PAX Revenue / RPK) 6M RASK (Scheduled + Charter PAX Revenue / ASK) RUB RUB 8.5% 7.4% 5.7% 6.7% 8.1% 5.7% Domestic International Total Domestic International Total % Y-o-Y increase Note: Data presented based on management accounting figures, scheduled and charter flights revenue is used for calculations RUB dynamics and changing mix of operations at subsidiaries level affected RUB yields in Q2 and 6M

44 Aeroflot Group Scheduled Flights Revenue Units 6M Yield (PAX Revenue / RPK) RUB 6M RASK (PAX Revenue / ASK) RUB % % % % % % 2.92 Domestic International Total Domestic International Total 6M Yield ex. Pobeda (PAX Revenue / RPK) RUB 8.4% 8.1% 7.6% M RASK ex. Pobeda (PAX Revenue / ASK) RUB 4.5% 6.6% 9.8% Domestic International Total Domestic International Total % Y-o-Y increase Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations. RUB dynamics and changing mix of operations at subsidiaries level affected RUB yields in 6M

45 Statement of Comprehensive Income RUB mln, unless otherwise stated M M 2018 Traffic revenue 257, , , , , , ,530 Other revenue 33,410 42,417 55,968 61,914 58,018 26,878 25,292 Revenue 290, , , , , , ,822 Operating costs (271,161) (308,503) (371,066) (432,626) (492,523) (227,163) (266,101) Operating profit / (loss) 19,795 11,268 44,107 63,254 40,411 7,697 (279) Sale and impairment of investments, net - - (9,159) (2,935) (144) (70) 107 Finance income 2,686 2,471 15,811 19,802 7,127 4,783 2,124 Finance costs (8,814) (28,399) (28,556) (9,443) (8,225) (4,159) (4,369) Hedging result - (1,723) (23,746) (12,310) (5,613) (2,748) (2,984) Share of results of associates (17) Result from disposal of subsidiaries (5,099) Profit / (loss) before income tax 13,704 (16,352) (1,560) 53,281 33,726 5,537 (5,358) Income tax (6,369) (794) (4,934) (14,455) (10,666) (2,647) 130 Profit / (loss) for the period 7,335 (17,146) (6,494) 38,826 23,060 2,890 (5,228) EBITDAR 51,026 48, , , ,808 46,057 46,363 EBITDA 31,849 24,839 58,703 78,004 56,015 15,403 6,622 Traffic revenue growth 16.4% 7.7% 29.5% 20.8% 9.4% 7.6% 15.6% Revenue growth 15.0% 9.9% 29.8% 19.4% 7.5% 4.9% 13.2% Operating profit margin 6.8% 3.5% 10.6% 12.8% 7.6% 3.3% - EBITDAR margin 17.5% 15.2% 24.8% 27.7% 22.9% 19.6% 17.4% EBITDA margin 10.9% 7.8% 14.1% 15.7% 10.5% 6.6% 2.5% 45

46 Condensed Statement of Financial Position Assets (RUB mln) Cash and cash equivalents 18,660 26,547 30,693 31,476 45,978 87,785 Short-term financial investments ,917 6,319 8,931 9,970 Accounts receivable and prepayments 55,691 56,769 76,317 78,172 92,932 83,106 Expendable spare parts and inventories 4,927 6,516 7,447 10,040 12,811 14,407 Property, plant and equipment 88, , , ,897 97,932 89,347 Prepayments for aircraft 12,318 29,241 35,291 27,830 13,089 10,545 Deferred tax assets 2,174 18,540 21,632 12,252 10,396 10,716 Goodwill 6,660 6,660 6,660 6,660 6,660 6,660 Other assets 19,705 16,440 26,743 21,661 34,601 50,070 Total Assets 209, , , , , ,606 Liabilities (RUB mln) Accounts payable and accrued liabilities 36,249 48,952 54,751 49,868 67,953 98,847 Unearned traffic revenue 16,334 22,469 28,691 39,044 43,695 80,056 Short-term loans and borrowings 5,029 17,343 54,085 9, Long-term loans and borrowings 8,377 6,860 14,375 11,058 3,181 3,349 Finance lease liabilities 63, , , ,143 84,674 15,333 Provisions for liabilities 1,655 4,845 6,917 10,791 16,949 21,272 Other liabilities 23,712 58,388 47,475 31,325 39, ,029 Total Liabilities 154, , , , , ,061 Hedge reserve (383) (48,657) (64,720) (34,187) (25,159) (29,242) Retained earnings 61,122 45,584 39,755 77,198 81,476 63,358 Total Equity 54,480 (13,505) (36,120) 40,769 67,299 37,545 Total Liabilities and Equity 209, , , , , ,606 46

47 Statement of Cash Flows RUB mln, unless otherwise stated M M 2018 Operating cash flows before working capital changes 32,944 31,603 64,269 81,994 65,330 19,326 10,546 Change in accounts receivable and prepayments (3,014) 4,658 (2,251) (6,191) (27,816) (16,516) (6,197) Change in expendable spare parts and inventories (1,019) (1,831) (1,216) (2,809) (2,672) (870) (1,596) Change in accounts payable and accrued liabilities 4,345 8,452 14,705 13,387 24,964 49,106 38,521 Operating cash flows after working capital changes 33,256 42,882 75,507 86,381 59,806 51,046 41,274 Income tax paid (4,260) (6,863) (6,041) (13,943) (13,019) (761) (644) Net cash flows from operating activities 28,945 35,977 69,664 73,647 47,432 50,288 41,900 Cash flows from investing activities: Purchases of PPE and intangible assets (4,410) (6,160) (9,196) (10,222) (7,681) (2,445) (5,750) Prepayments for aircraft (7,154) (21,361) (22,708) (18,806) (7,931) (166) (2,750) Return of prepayments for aircraft 7,783 9,620 7,828 29,362 26,274 11,909 17,910 Net cash flows from/(used in) investing activities (3,599) (18,492) (38,770) 10,331 14,369 11,500 11,388 Cash flows from financing activities: Repayment of loans and borrowings (14,579) (9,870) (36,267) (72,991) (17,417) (3,145) (44) Repayment of finance lease principal (9,795) (15,629) (19,455) (27,024) (15,513) (5,591) (9,893) Net cash used in financing activities (21,782) (14,673) (28,075) 80,495 46,821 (12,181) (12,009) Net increase in cash and cash equivalents 3,590 7,887 4, ,502 49,579 41,807 Cash and cash equivalents at the end of the period 18,660 26,547 30,693 31,476 45,978 81,055 87,785 47

48 Reported and Adjusted Net Loss Analysis 6M Adjusted Net Loss Build-Up (RUB mln) (5,228) 1,092 (228) (1,257) (7,099) (500) (978) Reported Net Loss 6M 2018 Discounting of receipt of lease deposits Change in the fair value of investments in equity securities FOREX on PDP Insurance refund (aircraft) Recovery of part of the provision created for compensation under long-term motivation programs Adjusted Net Loss 6M 2018 One-off effects had limited influence on Aeroflot Group 6M 2018 financial results. 48

49 IFRS 16 (Accounting of Leases) IFRS 16 will replace IAS 17 and is mandatory applicable starting January 2019 All lease contracts will be recognized on balance sheet Operating lease will be divided between depreciation and interest, implying increase in EBITDA Adoption of the standard may increase volatility of companies PL Aeroflot is analysing the implications of the new standard and solutions to avoid increased volatility Balance sheet line BALANCE SHEET Finance leases IAS 17 IFRS 16 Operating leases Assets - All leases Liabilities $$ - $$$$$$$ P&L line Revenue Operating costs (excluding D&A) EBITDA INCOME STATEMENT Finance leases IAS 17 IFRS 16 Operating leases All leases - Expense - Depreciation and amortisation Depreciation - Depreciation Off balance sheet rights/ obligations - $$$$$ Operating profit Finance costs Interest - Interest Profit before tax Introduction of IFRS 16 will materially change financial statements of all companies with rental liabilities. Aeroflot will introduce IFRS 16 starting from 1 January 2019 and is currently preparing for its implementation and analyzing potential effect and solutions to minimize volatility

50 Board of Directors Corporate Governance Board of Directors General Meeting of Shareholders Audit Committee (4 members) Name Mikhail Poluboyarinov Audit Committee Personnel and Remuneration Committee Strategy Committee Chairman of the Board of Directors Board of Directors Personnel and Remuneration Committee (7 members) Vitaly Saveliev Lars Erik Anders Bergstrom Sergey Chemezov Member Member Member Executive Board Strategy Committee (10 members) Alexey Germanovich Member Member Member Igor Kamenskoy Member Chairman Member Incorporated in Russia, PJSC Aeroflot is subject to Russian corporate governance regulations and follows Russian Corporate Governance Code Dmitry Peskov Member Member Roman Pakhomov Member Chairman Vasily Sidorov Chairman Member Member The Board of Directors is currently composed of 11 members. The Board s composition is well balanced from members background perspective, number of independent, non-executive and executive directors Yuri Slyusar Member Mikhail Voevodin Member Member Independent director according to the Russian Corporate Governance Code 50

51 Aeroflot Group Legal Structure PJSC Aeroflot (1) Airlines Ancillary Companies JSC Rossiya Airlines 75%-1 sh. CJSC Aeromar In-flight catering 51% JSC Donavia (2) 100% JSC Orenair (2) 100% JSC Aurora Airlines 51% LLC Pobeda Airlines 100% LLC Aeroflot-Finance Financial services JSC Sherotel Hotel services Aeroflot Aviation School Education services 100% 100% 100% A-Technics Maintenance 100% 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 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) and 49.0% of LLC Transnautic Aero (cargo sales, in liquidation) Notes: (1) The Group as of June 30, 2018; Aeroflot Group consolidates all entities: PJSC Aeroflot and all subsidiaries. (2) Non-operating entities 51

52 Address: , Russia, Moscow, Arbat St Website: