This announcement and the information contained herein are not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan, or in any other jurisdiction in which such publication or distribution would be prohibited by applicable law.

Neither this announcement nor the information contained herein constitutes an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any securities of Segezha Group PJSC in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

Moscow, 28 April 2021 – Segezha Group PJSC (“Segezha Group” or the “Company”), a subsidiary of Sistema PJSFC (“Sistema”) and a leading Russian vertically integrated holding company in the forest industry performing a full cycle of operations from logging to advanced wood processing, today announces the final offering price in respect of its initial public offering (the “Offering Price”) and listing of ordinary shares on Moscow Exchange.

The Offering Price has been set at RUB 8 per share. In the Offering, Segezha Group will place a total of 3,750,000,000 new ordinary shares (the “New Shares” and together with the Over-Allotment Shares (as defined below) the “Offer Shares”), raising RUB 30 billion in gross proceeds that will be used to fund the Company’s investment program and to optimize leverage. Based on the Offering Price, Segezha Group’s market capitalization will be RUB 125.5 billion on a post-money basis.

Trading on an “as-if-and-when-issued” basis in ordinary shares of the Company is expected to commence on Moscow Exchange today under the symbol SGZH.

Mikhail Shamolin, President of Segezha Group, said:

“Today’s IPO is a landmark event in the history of Segezha Group, as we become a publicly traded company and raise approximately $400 million1 in additional capital to finance our strategy for driving future growth. We established Segezha Group seven years ago with a vision to build a world-class forestry company based in Russia, which we consider to be the most advantageous country on earth for such a business. Since our inception, we have invested relentlessly to build a robust, vertically integrated company capable of achieving leading positions in our markets of presence. The successful completion of our IPO will allow us to invest further to accelerate our expansion, and also to optimize our leverage profile.

“Segezha Group’s IPO also represents a landmark for the forestry industry in Russia. As the only publicly listed Russian company in the sector, we are at the forefront of the industry at a time of modernization and structural change. Segezha Group is also a responsible steward of Russia’s abundant forest lands, which are a resource of global significance as well as a key competitive advantage for the Company. I believe that this resource will play a key role in the global transition to a sustainable future, with Segezha Group leading the way among Russian businesses.

“In our IPO we attracted a strong book of high-quality institutional investors from a broad range of geographies, which once again underscores the global attraction of the forestry sector as an investment proposition. Russian individual investors also showed high levels of interest in the Company’s IPO. All of them clearly appreciate Segezha Group’s robust and highly efficient business model, strong track record of profitable growth and prospects for future development. Segezha Group has a bright future, which we look forward to sharing with our new shareholders, while continuing to deliver attractive returns for them over the coming years.”

Vladimir Chirakhov, President of Sistema, said:

“We are delighted with the success of Segezha Group’s offering, and welcome the expanded group of shareholders to this highly attractive business. Today, the Company begins a new chapter in its history with a successful IPO that attracted a diversified book of leading institutional investors from Europe, the UK, the US and Asia, alongside strong demand from domestic institutional and retail investors.

“Segezha Group’s success illustrates the transformative value that Sistema brings to the assets in its portfolio. Today Segezha Group becomes the fourth Sistema portfolio company currently traded on the public markets, alongside Ozon, MTS and Etalon Group.

“Sistema has maintained a majority stake in Segezha Group and believes that significant further potential remains to be unlocked. The Company is well positioned to continue its growth by capitalizing on its vertically integrated business model, market leadership in key products, advantageous cost base and robust project pipeline.” 

Confirmation of Offering details

• The Offering Price has been set at RUB 8 per Offer Share.

• The Offering consists of an offering of 3,750,000,000 New Shares, representing 31.4% of Segezha Group’s current share capital. Based on the Offering Price, total gross proceeds to the Company from the IPO are RUB 30 billion.

• Based on the Offering Price, Segezha Group’s total market capitalization on a post-money basis will be RUB 125.5 billion. Upon completion of the IPO, Segezha Group will have a free float of 23.9%, assuming no exercise of the Over-Allotment Option (as defined below).

• Sistema will remain the majority shareholder of Segezha Group following the Offering, retaining a 73.7% ownership stake, assuming no exercise of the Over-Allotment Option (as defined below).

• Sistema has granted Renaissance Capital as Stabilization Manager an over-allotment option (the” Over-Allotment Option”) to purchase shares in the amount equivalent to up to 15% of the total number of New Shares (the “Over-Allotment Shares”). The Over-Allotment Option is exercisable for a period of up to 30 days from 28 April 2021.

• Trading on an “as-if-and-when-issued” basis in ordinary shares of the Company is expected to commence today on Moscow Exchange under the ticker SGZH. Moscow Exchange has approved ordinary shares of Segezha Group for inclusion on the “Level 1” part of the List of Securities Admitted to Trading on Moscow Exchange from 28 April 2021.

• The Offering consists of an offering of the Offer Shares (i) in the Russian Federation; (ii) otherwise to institutional investors outside the United States in “offshore transactions” as defined in, and in reliance on, Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”); and (iii) within the United States to “qualified institutional buyers” as defined in, and in reliance on, Rule 144A under the Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements under the Securities Act.

• In connection with the Offering, the Company, certain directors and Sistema PJSFC and its affiliates holding the Company’s shares have agreed, subject to certain exceptions, to customary lock-up arrangements restricting the disposal of the Company’s securities for a period of time following the Offering (180 days for the Company, Sistema PJSFC and its affiliates holding the Company’s shares, and 365 days for the above-mentioned directors).

• J.P. Morgan Securities plc, UBS AG London Branch and VTB Capital plc are acting as Joint Global Coordinators and Joint Bookrunners in connection with the Offering. Alfa Capital Markets Ltd, Bank GPB International S.A. (a member of Gazprombank group), BofA Securities and Renaissance Capital are acting as Joint Bookrunners.

• The Offering Memorandum dated 21 April 2021 is available on the Segezha Group website at https://segezha-group.com/en/about-company/disclosure/memorandum/ and should be read in conjunction with the pricing notification, which will be made available on the Company’s website today.

Segezha Group – overview

• Segezha Group is a leading Russian vertically integrated holding company in the forest industry performing a full cycle of operations from logging to advanced wood processing. Its operations are divided into four operating segments: Paper and Packaging, Forestry Management and Woodworking, Plywood and Boards and Other (which includes glulam products as well as non-revenue generating parts of Segezha Group, such as management and holding companies).

• Segezha Group operates 17 facilities, with two additional facilities currently under construction. Segezha Group's facilities include pulp and paper mills, plywood mills and sawmills, glulam and CLT operations and paper sack production plants, throughout Russia and Europe.

• The Company holds leading positions in its key product segments, by production capacity: #2 globally in multiwall sack paper and industrial paper sacks2, #1 in Russia in sawn timber and #5 globally in large size birch plywood3.

• The Company has a vertically integrated business model covering the entire production chain from wood harvesting operations to production of value-added end products.

• Segezha Group has access to an extensive forestry resource base in Russia with a total annual allowable cut (“AAC”) of 8.1 million cubic meters, as well as an additional 2.1 million cubic meters granted under the implementation of Priority Investment Projects in Forest Development (“PIPs”)4 as of 31 December 2020.

• Segezha Group’s paper production facilities are positioned in the first quartile of the global cost curve.5

• Low production costs and an integrated business model drive strong margins – Segezha Group’s 2020 OIBDA margin was 25%.

• In 2020, 72% of the Company’s revenue was derived from export sales in foreign currencies. Key export geographies include Europe (32% of sales), Asia (24%) and MENA (10%).

• The Company demonstrated strong financial results with revenue and OIBDA more than doubling since 2015 (revenue of RUB 69.0 billion and OIBDA of RUB 17.5 billion in 2020).

• Segezha Group is majority owned by Sistema (MOEX: AFKS, LSE: SSA), an investment company with a strong track record of developing industry-leading companies and bringing them to the public markets.

For more information please contact:

Segezha Group investor relations                                         Segezha Group media relations

Anastasia Poletaeva                                                                  pr@segezha-group.com

Poletaeva_AA@segezha-group.com

+7 499 962 82 00 #10347

ir@segezha-group.com

EM (communications adviser to Segezha Group)

Peter Morley                                            Daria Khilenkova                                     Quinn Martin

morley@em-comms.com                    khilenkova@em-comms.com           martin@em-comms.com

+43 676 684 5252                                   +7 916 805 4926                                     +1 646 629 5502

The contents of this announcement have been prepared by and are the sole responsibility of the Company.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "plans", "targets", "aims", "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "continues", "should", "continue", "positioned", "ongoing" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections, guidance and other forward-looking statements will not be achieved. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements.

Subject to their legal and regulatory obligations, neither J.P. Morgan Securities plc, UBS AG London Branch, VTB Capital plc, Merrill Lynch International, Bank GPB International S.A., Renaissance Securities (Cyprus) Limited and Alfa Capital Markets Ltd (together, the "Banks"), the Company, nor any of their respective affiliates or any of their respective directors, officers, employees or agents, or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

In no circumstances shall the provision of this document imply that no negative change may occur in the business of the Company after the date of provision of this document, or any date of amendment and/or addition thereto.

The information contained in this announcement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

The Company does not expect or intend to register any securities that it may offer under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or to conduct a public offering of any securities in the US and the securities of the Company have not been and will not be registered under the Securities Act and any such securities may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from it. Any public offering of such securities in the United States would require the publication of a prospectus by the Company containing detailed information about the Company and its management, as well as the Company’s financial statements. This announcement does not constitute an offer or an invitation to make offers or advertisements of securities in the Russian Federation, and is not an offer to sell, purchase, exchange or transfer to or for the benefit of any person resident, incorporated, established or having their usual residence in the Russian Federation, or to any person located within the territory of the Russian Federation, or an invitation to or for the benefit of any such person to make an offer to sell, purchase, exchanges or transfer any securities.

This announcement does not constitute an offer of securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the Shares. This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA") and the United Kingdom (each a "Relevant State") who are "qualified investors" (i) within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended or superseded, the "Prospectus Regulation")) in the case of the EEA and (ii) in the case of the United Kingdom, within the meaning of the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (together, "Qualified Investors"). In the United Kingdom, this announcement is being distributed to, and is directed only at, Qualified Investors who are persons (i) having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") (ii) falling within Article 49(2)(a) to (d) of the Order, or (iii) to whom it may otherwise lawfully be communicated (all such persons who are also Qualified Investors being referred to as "Relevant Persons"). This announcement and information contained herein must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons, and (ii) in any other Relevant State, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement and information contained herein relates is available only to or will be engaged in only with, (i) Relevant Persons in the United Kingdom, and (ii) Qualified Investors in any other Relevant State.

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Investors should not subscribe for or purchase any Shares referred to in this announcement except on the basis of information in the offering memorandum that has been published by the Company (the "Offering Memorandum"). The information in this announcement is subject to change.

The information contained in this announcement does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities in the United States, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Under the U.S. Securities Act of 1933, as amended, securities may not be offered or sold in the United States absent registration or an exemption from registration. The Company does not intend to register any portion of the Offering in the United States, Canada, Japan or Australia, or to conduct a public offering of the Shares in the United States, Canada, Japan or Australia. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Canada, Japan or Australia or to, or for the account or benefit of, any national, resident or citizen of Canada, Japan or Australia.

The Banks, which are each authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (and in the case of Bank GPB International S.A., which is authorized in Luxembourg by the Luxembourg Ministry of Finance and regulated by the Commission de Surveillance du Secteur Financier, and in the case of Renaissance Securities (Cyprus) Limited and Alfa Capital Markets Ltd, which are each authorized in Cyprus by the Cyprus Securities and Exchange Commission and  regulated by the Cyprus Securities and Exchange Commission), are acting only for the Company and no one else in connection with the Offering. The Banks will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offering, Renaissance Securities (Cyprus) Limited, acting as a stabilizing manager (the "Stabilizing Manager") on behalf of the Banks, is expected to procure that Renaissance Broker LLC, an affiliate of the Stabilizing Manager, shall, to the extent permitted by applicable law, regulations and rules of the Bank of Russia and/or the Moscow Exchange, purchase, for the purpose of stabilization, the Shares on the Moscow Exchange during a period of 30 calendar days after the date hereof, with a view to supporting the market price of the Shares at a level higher than that which might otherwise prevail in the open market. There will be no obligation on the Stabilizing Manager or any person acting on behalf of the Stabilizing Manager to effect stabilizing transactions and there is no assurance that stabilizing transactions will be undertaken. Such stabilization, if commenced, may be discontinued at any time without prior notice. Except as required by law and regulation, neither the Stabilizing Manager nor any person acting on behalf of the Stabilizing Manager intends to disclose the extent of any stabilizing transactions conducted in relating to the Offering.

None of the Banks or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The date of the admission of the Shares to trading on the Moscow Exchange (the "Admission") may be influenced by factors such as market conditions. There is no guarantee that the Admission will occur, and you should not base your financial decisions on the Company's intentions in relation to the Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorized person specializing in advising on such investments. This announcement does not constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Offering for the person concerned.

In connection with the Offering, any of the Banks or any of their respective affiliates, may take up a portion of the Shares in the Offering as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such Shares and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, any references in the Offering Memorandum, if published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offering or placement of securities to any of the Banks and any of their respective affiliates acting in such capacity. In addition, any of the Banks and any of their respective affiliates may enter into financing arrangements (including swaps, warrants or contracts for differences) with investors, in connection with which any of the Banks and any of their respective affiliates may from time to time acquire, hold or dispose of Shares. The Banks do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Information to Distributors: Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Offer Shares the subject of the Offering have been subject to a product approval process, which has determined that such Offer Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, “distributors” (for the purposes of the UK Product Governance Requirements) should note that: the price of the Offer Shares may decline and investors could lose all or part of their investment; the Offer Shares offer no guaranteed income and no capital protection; and an investment in the Offer Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the joint global coordinators and joint bookrunners and the co-manager will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Offer Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Offer Shares and determining appropriate distribution channels.

Nothing contained herein constitutes or should be construed as: (i) investment, tax, financial, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to your individual circumstances; or (iii) a personal recommendation to you.

For the avoidance of doubt, the contents of the Company’s website, including the websites of the Company’s business units, are not incorporated by reference into, and do not form part of, this announcement.

1 Converted at USD/RUB exchange rate of 74.96 set by the Central Bank of Russia for 28 April 2021

2 Source: Fisher International

3 Source: Vision Hunters

4 Access to additional 2.1 million cubic meters AAC is contingent on the execution of agreed and approved terms of PIP applications

5 Source: Fisher International (global cost curve for multiwall sack paper total cost as of Q3 2020)