Moscow, Russia – 30 August 2016 – Sistema PJSFC (“Sistema” or the “Company”, together with its subsidiaries, “the Group”) (LSE: SSA, MOEX: AFKS), a publicly-traded diversified holding company operating primarily in Russia and the CIS, today announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the quarter ended 30 June 2016.

• OPERATIONAL AND STRATEGIC PROGRESS
• Strong top-line growth across the breadth of the portfolio
• Detsky Mir, Segezha Group and new assets in agriculture are important growth drivers
• Significant progress achieved on deleveraging plan in 2016 year-to-date
• Board of Directors decision taken to pay Sistema’s first interim dividend under new dividend policy

SECOND QUARTER FINANCIAL RESULTS

• Consolidated revenues grew by 8.0% YoY to RUB 177.1 billion
• OIBDA[1]up 6.5% YoY to RUB 46.2 billion with an OIBDA margin of 26.1%
• Adjusted profit attributable to Sistema of RUB 149 million
• Net debt[2]at the Corporate Centre level amounted to RUB 67.7 billion as at 30 June 2016
• As at 30 June 2016, cash position[3]at the Corporate Centre level amounted to RUB 38.8 billion, excluding RUB 8.5 billion represented by deposits                                                                                

Mikhail Shamolin, President and Chief Executive Officer of Sistema, said:

“Sistema delivered solid financial results in the second quarter of 2016, with continued top-line growth across almost all of our portfolio companies. Despite robust market competition and a challenging operating environment, MTS again outperformed its peers with revenue growth of 5%, driven primarily by rising handset sales and strong data revenue in Russia and Ukraine. Children’s goods retailer Detsky Mir and pulp and paper holding Segezha Group remained Sistema’s primary growth drivers, recording revenue growth of 38% and 28%, respectively.

“Our newly consolidated agricultural assets are rapidly gaining scale, while improving operational efficiency and implementing state-of-the-art technologies. This diversified business is transforming into one of our most promising assets in terms of value creation, and has started to make a notable contribution to our overall performance.

“Together, our non-listed assets more than doubled their combined OIBDA year-on-year, contributing 15% to the Group’s total OIBDA as compared to 7% in the same quarter last year. This in particular reflects new asset consolidations as well as OIBDA growth at Detsky Mir (+156% year-on-year) and Segezha (+60% year-on-year).”

“Finally, we continue to focus on increasing pay-outs to Sistema shareholders. Earlier this year we paid out RUB 6.5 billion in dividends for 2015, and in August Sistema’s Board of Directors recommended we pay our first interim dividend, as per the new dividend policy, of a total of RUB 3.7 billion. The increase in dividend distribution is an important sign that we remain on track to further grow the value of Sistema’s assets in any environment while enhancing the Group’s financial stability and its capacity to generate shareholder returns.”

Vsevolod Rozanov, Senior Vice President and Chief Financial Officer of Sistema, added:

“The underlying quality of Sistema’s assets and our track record of monetising our investments have enabled us to continue to reduce debt and optimise our liabilities. During the second and third quarters of 2016 we repaid in full the debt guaranteed by Sistema at our Indian subsidiary SSTL, and exercised an early redemption of our more expensive local bonds worth RUB 10 billion. While we continue to work on the merger of SSTL’s telecommunications business with RCom, one of the leading telecom operators in India, we also reached an agreement with the Russian Government regarding its put option on SSTL shares whereby the acquisition of the Russian Federation’s stake in the company has been extended over the course of the next five years”.

“We plan to maintain our focus on deleveraging in the second half of the year and expect our liquidity to remain strong, positioning us well for exploring new attractive M&A opportunities and further delivering on our strategy.”

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Conference call information

Sistema’s management will host a conference call today at 10:00 am (EST)/ 3:00 pm (London time) / 4:00 pm (CET)/ 5:00 pm (Moscow time) to present and discuss the second quarter 2016 results. 

The dial-in numbers for the conference call are:

Russia

+7 495 705 9451

8 800 500 9311 (toll free)

United Kingdom

+44 20 3427 1907

0800 279 4992 (toll free)

United States

+1 646 254 3367

+1 877 280 2342 (toll free)

Conference ID: 5267232

Alternatively, you can quote the conference call title: “Sistema Second Quarter 2016 Financial Results”.

A replay of the conference call will be available on the Company’s website www.sistema.comfor at least seven days after the event.

For further information, please visit www.sistema.com or contact:

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[1] See Attachment A for definitions and reconciliation of OIBDA to IFRS financial measures.

[2] Including highly liquid deposits and liquid financial investments, based on management accounts. See Attachment A for reconciliation to IFRS financial measures.

[3] Including highly liquid deposits and liquid financial investments, based on management accounts. See Attachment A for reconciliation to IFRS financial measures.