1
Aeroflot Group
Q3 and 9M 2018 Financial Results
Andrey Chikhanchin, Deputy CEO for Commerce and Finance
Ivan Batanov, Head of Revenue Management
Andrey Napolnov, Head of Investor Relations
Moscow, Russian Federation
30 November 2018
1881537-001.pptx
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
129.4 bn
118.8 bn38.3 mln
PAX
+ 10.2 %
ASK
+ 9.0 % + 15.2 %
405 bn
466 bn
Revenue (RUB)
9M 2017 9M 2018
Note: immaterial deviations throughout the presentation are explained by rounding
• In 9M 2018, Aeroflot Group has continued operational development via expanding capacity on
the back of opportunities provided by the market.
• Capacity growth allowed Aeroflot to increase number of passengers transported as well as
boost revenues on the back of expanding yields.
Aeroflot Group 9M 2018 Highlights
42.2 mln
+ 7.2 %
3.533.78
Blended Yield
(RUB/RPK)
4
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
5
42.2
12.27.0 5.9
16.721.8
AeroflotGroup
S7 Group Ural Airlines UTair Group ForeignCarriers
Others
8.4 9.7
7.0 7.7
15.417.4
Q3 2017 Q3 2018
21.1 23.5
17.218.8
38.342.2
9M 2017 9M 2018
20.2 22.0
21.5 23.2
41.6 45.2
Q3 2017 Q3 2018
International Routes
Domestic Routes
48.0 52.7
47.7 53.2
95.6105.9
9M 2017 9M 2018
Competitive Dynamics
Source: TCH, Company estimates
Note: Incl. foreign carriers’ traffic.
Passenger Traffic: Market vs Aeroflot Group Change in Airlines’ Passenger Numbers
mln PAX, 9M 2018
9M 2017
Market Share (PAX)
9M 2018
+3.9
+1.3+0.1
+2.0
Increase in PAX million
Source: TCH, Rosaviatsia, Company estimates / 1 UTair Group includes UTair, Utair-Cargo and Turuhan
Foreign Airlines Other Russian Airlines
-0.2 p.p.
13.1%
15.4%
10.4%
9.1%
7.9%
11.1% Total Market 5.8%
13.2% International 6.7%
8.8% Domestic 4.6%
Russian Air Transportation Market (million PAX)
inc. PAX of Russian and Foreign Carriers and int. transit PAX
Aeroflot Group (million PAX)
9.9%
11.7%
11.2%
8.9%
Market Dynamics Net of Aeroflot Group
• Aeroflot Group continued to deliver growth on further recovering market increasing PAX by 10.2% in 9M 2018 with
acceleration in Q3 2018.
10.8%
“Clean” Market Share of Aeroflot Group (Net of Intl.-Intl. Transit Traffic)
37.8% Aeroflot Group 37.6%
1
+0.9
+2.1
8.5%
10.2%
40.1%
11.5%6.0%6.4%
15.3%
20.7%
39.9%
11.6%5.6%6.6%
15.8%
20.6%
6
36.1 %
20.7 %
15.3 %14.4 %
7.9 %7.4%
12.7%
10.8%9.9%
9.1%
20.5% 16.4% 12.9% 12.2% 8.5%
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
International Domestic
Passenger Traffic (Russian and Foreign Carriers) Capacity (Russian and Foreign Carriers)
Continuing Market Recovery
Change in PAX traffic y-o-y, % Change in ASK y-o-y, %
• 9M 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.
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
Source: TCH, Company calculations
Total market
21.8 %
14.6 %
16.9 %
30.2 %
18.6 %
17.2%
11.9%
10.6%
9.0%
7.5%
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Foreign carriers Russian carriers
7
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
8
1.2 1.3
63.4%
Aeroflot Group Multi-Brand Strategy
• Flagship carrier
• Premium product (4 Stars)
• High income and middle class
• Hub and spoke model
• Regional and leisure product
Focus on domestic flights
• Selected international routes,
mostly out of VKO airport in
Moscow
• Charter operations
Premium
Regional and Charter
Regional / Far-East
Low Cost
Business Model Focus Airport PAX Contribution1Brand PAX Growth
9M 2018
24.826.8
26.8
+8.0%
9.0 9.0
3.3
5.2
+0.3%
+55.3%
+5.2%
9M 2017 9M 2018
9M 2017 9M 2018
9M 2017 9M 2018
9M 2017 9M 2018
21.4%
12.3%
3.0%
9.0
5.2
1.3
• Moscow
(Sheremetyevo)
• Saint-Petersburg
(Pulkovo)
• Moscow
(Sheremetyevo,
Vnukovo)
• Vladivostok,
Khabarovsk,
Yuzhno-Sakhalinsk
• Moscow (Vnukovo)• Short and mid-haul flights
• Mostly domestic segment,
selected international
routes
• Point-to-point carriage
• The Far East airline flying on
short- and mid-haul direct
international and domestic
routes
• Flights to remote cities (local
flights)
• 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 – increased traffic by almost two million PAX each.
1 PAX contribution as of 9M 2018. Absolute number of passengers in million in green circle
9
49
Krasnodar
Rostov
NazranMakhachkala
Astrakhan
Volgograd
Kazan Perm
Chelyabinsk
Ekaterinburg
Surgut
Novosibirsk
Bergamo
Bratislava
Cologne
Memmingen
Girona
Samara
Cheboksary
Larnaca
Tivat
Saint Petersburg17
Nizhnekamsk
Moscow
Vladikavkaz
93.1%93.7%
96.4%
94.6%
Q1 2018 Q2 2018 Q3 2018 9M 2018
986 1,108 1,240
3,334
1,4021,755
2,021
5,178
Q1 Q2 Q3 9M
2017 2018
Network
• Operating from Vnukovo airport (3rd Moscow airport by PAX)
• Network comprising 84 routes (44 unique for the Group)
• Additional expansion to international destinations (14 countries)
Fleet
• 22 Boeing 737-800 NG (30.09.2018)
• Plans for 2 more aircraft to be delivered in Q4 2018
• Single class cabin
• 189 seats per plane
Key features
and
achievements in
9M 2018
• 5.2 million PAX in 9M 2018 (+55.3% y-o-y)• 9M 2018 PLF of 94.6% (+0.1 p.p. y-o-y)• International RPK is 23% of total Pobeda traffic• Active development of intra-region flights, and international flights from the regions
2023 Goals• Accelerated expansion in domestic and international segments
• c25-30 mln PAX annually
Strong Passenger Load Factor
Overview of Pobeda
• Pobeda, the only Russian LCC, is a timely value proposition to cost conscious passengers.
Pobeda Airline: Acceleration of Growth
Growing Passenger Flows
thousand PAX
Pobeda’s Network (Winter 2018/2019)
PLF, %
Tbilisi
Krasnoyarsk
SochiPisa
Base cities with >10 routes served from city
(number of routes in circle)
Baden-Baden
Ulan-Ude,
Irkutsk
42.2%58.4%
62.9%
Karlovy VaryLeipzig
Venice
Kaliningrad
55.3%
Eindhoven
Helsinki
Innsbruck
Kemerovo
Salzburg
BerlinLondon
Rome
Kirov
Min.Vody
Petrozavodsk
Tomsk
XXCities with <10 routes served from city
Cities where the airline operates to
10
“100 By 100” Growth Strategy: strategic targets to be achieved
by 100th anniversary of Aeroflot
90-100 mln in 2023
accelerated expansion of
(25-30 mln by 2023)
3 bases opening by 2023: Sochi,
Ekaterinburg, Novosibirsk;
1 international hub in Krasnoyarsk
3x regional PAX
≈ 520 aircraft in 2023
Strengthens competitive edge
Helps increase operational efficiency
Passenger
traffic
International transit
traffic
Regional bases
Fleet expansion
Digitalization
5 mln - 2017
≈10-15 mln - 2023
• Achieving our ambitious strategic goals will help Aeroflot Group reach new levels of
operational efficiency and secure strong financial results
11
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
12
Aeroflot routes
Rossiya routes
Aurora routes
Average Scheduled Flight Frequency per Route (Aeroflot Group ex-Pobeda)
• Accelerated growth of destinations, sustained focus on increase in frequencies on scheduled routes.
• Aeroflot Group operates flights to 173 unique destinations in 57 countries (in 2018/2019 winter schedule, incl.
Russia and new destinations launched in 2018).
Aeroflot Group Network
(9M 2018, y-o-y)
Note: 1 Scheduled flights of Aeroflot Group (excluding Pobeda LCC)
13.4%11.5%
16.0%12.2%
20.4%
# of Flights Evolution by Region1
Increase in Group frequencies by 13.4% was mainly supported by expansion of the number of frequencies in domesticsegment (+16.0%) and in the sector of long-haul routes (+20.4%).
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
Geographic Network
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
6.8 %
16.6 %
2.8 %
9.1 %
2.0 %
10.8 %
5.1 %
Total
Middle East & Africa
CIS
North & Central America
Asia
Europe
Russia
11.59.8
13.112.1
6.8
13.111.0
15.213.6
8.2
Total scheduled International Domestic Medium-haul Long-haul
9M 2017 9M 2018
13
Denpasar
(Indonesia)
3 flights per week
Nalchik (Russia)
7 flights per week
• In Summer 2018 Aeroflot continued to increase frequencies both on the routes with already high capacity
deployed as well as underserved routes.
• Starting from 2018/2019 winter schedule the Group launched 14 new destinations in Russia, Europe, and
Asia.
Network Expansion – Summer 2018 and Winter 2018/2019
Increased frequencies in
Summer 2018 (examples)
New destinations
launched in Summer 2018
Naples (Italy)
7 flights per week
Verona (Italy)
7 flights per week
Burgas (Bulgaria)
7 flights per week
Kyzylorda
(Kazakhstan)
4 flights per week
Cairo (Egypt)
3 flights per week
Saransk (Russia)
14 flights per week
1
2
3
4
5
6
Weekly frequency in summer schedule 2017
Addition in weekly frequencies starting from summer schedule 2018
St.Pete– London
(LGW)
7 flights per week7
New destinations launched in
Winter 2018/2019 season
Vladikavkaz
(Russia)
7 flights per week
Grozny (Russia)
7 flights per week
Izhevsk (Russia)
14 flights per week
Osh (Kyrgyzstan)
7 flights per week
Makhachkala
(Russia)
21 flights per week
Colombo (Sri Lanka)
5 flights per week
Gothenburg
(Sweden)
7 flights per week
Ljubljana (Slovenia)
7 flights per week
Dublin (Ireland)
7 flights per week
56
42
35
38
35
7
7
7
4
7
Yekaterinburg
Rostov
N.Novgorod
Kaliningrad
Ufa
35
28
28
14
14
7
7
7
14
7
Prague
Rome
Milan
Istanbul
Antalya
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Bukhara
(Uzbekistan)
2 flights per week
Nazran (Russia)
7 flights per week
Ulyanovsk (Russia)
14 flights per week
14
2.91
3.123.033.01
3.363.21
Domestic International Total
3.44 3.52 3.483.49
3.863.69
Domestic International Total
3.50
3.813.67
3.52
4.18
3.88
Domestic International Total
3.824.09 3.97
3.77
4.47
4.14
Domestic International Total
9M RASK (PAX Revenue / ASK)9M Yield (PAX Revenue / RPK)
Aeroflot Group Scheduled Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level due to rapid expansion of LCC affected RUB
yields in Q3 and 9M 2018.
Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations.
RUB
% Y-o-Y increase
RUB
2017 2018
Q3 Yield (PAX Revenue / RPK)
RUB
Q3 RASK (PAX Revenue / ASK)
RUB
(1.5)%
4.2%1.5%
5.9%9.3% 9.6%
0.5%
5.6%
3.5%
5.9%9.8% 7.8%
15
1.1%1.8%
4.1%
2.1%
4.1%3.7%
3.0%
1.7%
7.8%
0.3%
2.8%
4.5%
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
(4.2)%(2.6)%(1.8)%
(0.1)%
4.5%
9.7%
6.2%8.8%
23.1%
12.6%
5.8%
9.8%
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
(2.4)%
(1.3)%
0.0%0.4%
4.4%
7.8%
5.1%
6.2%
17.5%
8.2%
4.7%
7.9%
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Aeroflot Airline International Yield
Aeroflot Airline Domestic Yield
Aeroflot Airline Yield Dynamics (Monthly)
RUB/RPK, Change y-o-y in %
RUB/RPK, Change y-o-y in %
Aeroflot Airline Total Yield
• 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 9M 2018 international segment was the main driver of Aeroflot growth: yields were in higher single-digit growth
mode during the period and in June-July yield dynamics accelerated y-o-y supported by additional demand
associated with FIFA World Cup.
RUB/RPK, Change y-o-y in %
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.
2017 2018 2017 2018
2017 2018
16
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
17
1 Excluding An-24 and An-148 not operated by the airlines of the Group2 Excludes planes out of operation
Aeroflot Group Fleet Breakdown
• Well-balanced fleet structure in line with Group’s strategy
Breakdown by Company 2Breakdown by Aircraft 2 Breakdown by Ownership Type 2
Narrow-body
(medium-haul)66%
Narrow-body
(regional) 18%
Wide-body16%
Aeroflot69%
Rossiya18%
Aurora7%
Pobeda6%
Operating88%
Finance10%
Owned2%
Aircraft TypeOperated by Lease type
OwnedTotal as of Total as of Change vs.
Aeroflot Subsidiaries Finance Operating 30-Sept-18 31-Dec-17 31-Dec-17
Wide-body 39 18 18 39 - 57 52 5
Airbus A330 22 - 8 14 - 22 22 -
Boeing 777 17 9 10 16 - 26 21 5
Boeing 747 - 9 - 9 - 9 9 -
Narrow-body (medium-haul) 161 79 18 222 - 240 222 18
Airbus A319 - 36 9 27 - 36 36 -
Airbus A320 80 5 - 85 - 85 80 5
Airbus A321 39 - 9 30 - 39 38 1
Boeing 737 42 38 - 80 - 80 68 12
Narrow-body (regional) 50 14 - 58 6 64 51 13
DHC 8 - 11 - 5 6 11 11 -
DHC 6 - 3 - 3 - 3 3 -
SSJ 100 50 - - 50 - 50 37 13
Total fleet1 250 111 36 319 6 361 325 36
18
30.09.2018 2019E 2020E 2021E 2022E 2023E
Fleet Expansion Strategy
• Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking into account market
trends and opportunities.
Aeroflot Group Fleet as at Year-end2
Number of aircraft
Delivery/Phase-out Schedule1
+ 36 aircraft no net additionNet additions (1)
Type of Q1-Q3 2018 (Actual)Current
fleet(1)
Q4 2018 (Plan)
aircraftDelivery Phase out Delivery Phase
out
Wide-body (long-haul) 5 - 57 1 -
A-330 - - 22 - -
B-777 5 - 26 1 -
B-747 - - 9 - -
Narrow-body (medium-haul) 28 (10) 240 8 (8)
A-319 - - 36 - (2)
A-320 10 (5) 85 1 (4)
A-321 5 (4) 39 - (2)
B-737 13 (1) 80 7 -
Narrow-body (regional) 13 - 64 - (1)
SSJ-100 13 - 50 - -
DHC-8 - - 11 - (1)
DHC-6 - - 3 - -
TOTAL 46 (10) 361 9 (9)
1 As of 30.09.2018, not including aircraft leased or subleased to other operator (1 An-24 and 5 An-148 ).2 According to existing strategy. Not including aircraft leased or subleased to other operator. Number of planes in 2023 is average for the year.
361
~520
19
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
20
Q3 2017 Q3 2018 ChangeRUB mln
(where applicable)9M 2017 9M 2018 Change
15,378 17,393 13.1% Passenger Traffic (mln PAX) 38,340 42,249 10.2%
169,915 200,523 18.0% Revenue 404,773 466,345 15.2%
149,702 177,622 18.7% Traffic Revenue 350,502 409,974 17.0%
54,958 64,594 17.5% EBITDAR1 101,016 110,957 9.8%
32.3% 32.2% (0.1) p.p. EBITDAR1 margin 25.0% 23.8% (1.2) p.p.
37,902 40,567 7.0% EBITDA 53,306 47,189 (11.5)%
22.3% 20.2% (2.1) p.p. EBITDA margin 13.2% 10.1% (3.1) p.p.
24,261 27,718 14.2% Net income 27,149 22,490 (17.2)%
Financial Highlights: Q3 and 9M 2018
• Financial results of 9M 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
particularly visible in Q3 2018.
1 EBITDAR = EBITDA + operating lease expenses.
21
404,773
51,682 7,790 1,539 561 466,345
9M 2017 ScheduledPassenger
Flights
CharterPassenger
Flights
Cargo OtherRevenue
9M 2018
404,773
35,472 19,056 3,450 3,595 466,345
9M 2017 Volume Currency Pricing Other 9M 2018
Revenue Growth Decomposition
• 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
Revenue by Key Factors
RUB mln
15.2% 15.2%
Revenue by Business Segments
RUB mln
8.8% 4.7% 0.9%+ + 12.8% 1.9% 0.4% 0.1%+ + +
Growth in operating metrics:RPK + 9.1%PAX + 10.2%
Depreciation ofRUB in 9M 2018y-o-y by c5% vs.USD and byc13% vs. EUR
Growth across geographies:Russian revenue + 13.5%International revenue +17.4%
Cargo volumes +14.2%
Charter RPK up by 4.9% y-o-y, strong yields
+ 0.9%
Domesticyield up by1.9%,internationalup by 11.0%
More trafficserved underagreementswith airlines
22
Q3 2017 Q3 2018Change
y-o-y
Change
ex. FX
& NRE
Operating Expense
(RUB mln If not stated otherwise)9M 2017 9M 2018
Change
y-o-y
Change
ex. FX
& NRE
% of Total OpEx
(9M 2018)
33,727 54,080 60.3% 49.9% Fuel 89,944 131,965 46.7% 41.3% 30.7%
102,024 109,318 7.1% 2.5% Opex (ex. Fuel) 272,967 297,534 9.0% 6.4% 69.3%
28,744 31,634 10.1% 5.7%Aircraft, traffic and passenger
servicing74,706 80,268 7.4% 3.5% 18.7%
22,186 19,656 (11.4)% (7.1)% Staff 60,509 61,315 1.3% 4.2% 14.3%
17,056 24,027 40.9% 27.0% Operating lease 47,710 63,768 33.7% 27.0% 14.8%
10,566 11,750 11.2% 1.1% Maintenance1 26,247 32,009 22.0% 16.0% 7.5%
9,339 8,400 (10.1)% (13.8)% SG&A2 23,846 22,478 (5.7)% (8.2)% 5.2%
3,738 3,442 (7.9)% (8.0)% D&A and customs duties 11,444 10,343 (9.6)% (9.6)% 2.4%
10,395 10,409 0.1% (6.5)% Other expenses3 28,505 27,353 (4.1)% (5.5)% 6.4%
135,751 163,398 20.4% 14.3% Total Opex 362,911 429,499 18.3% 15.1% 100.0%
Operating Costs
• In 9M 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.
1 Normalized change in maintenance spending (including change in maintenance reserve in Other operating expenses line) in 9M 2018 amounts to +12% y-o-y, in Q3 2018 +2% 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.
23
3.06
(0.04)
0.26 0.03 (0.01) 0.09 (0.02) (0.03) (0.03)
3.32
(0.11)0.02
3.23
3.06
Reported CASK9M 2017
Staff Fuel Maintenance Aircraft, Trafficand Passenger
Servicing
OperatingLease
D&A and CD* Admin & Sales& Marketing
Other Costs Reported CASK9M 2018
FX NRE** CASK 9M 2018ex. FX and
NRE**
Reported CASK9M 2017
Group Unit Costs
• Cost per ASK increased by 8.6% from RUB 3.06 in 9M 2017 to RUB 3.32 in 9M 2018 on the back of fuel, maintenance
and operating lease expenses pressure.
* Customs duties** NRE includes insurance refund for the aircraft and recovery of part of the provision created for compensation under long-term motivation programs
Q3 2017 Q3 2018 Change Operating Expense per ASK (CASK), RUB 9M 2017 9M 2018 Change
0.75 1.09 46.1% Fuel 0.76 1.02 34.7%
2.27 2.21 (2.3)% Opex (ex. Fuel): 2.30 2.30 0.0%
0.64 0.64 0.3% Aircraft, Traffic and Passenger Servicing 0.63 0.62 (1.4)%
0.49 0.40 (19.2)% Staff 0.51 0.47 (7.0)%
0.38 0.49 28.4% Operating Lease 0.40 0.49 22.7%
0.23 0.24 1.4% Maintenance 0.22 0.25 11.9%
0.21 0.17 (18.0)% SG&A 0.20 0.17 (13.5)%
0.08 0.07 (16.1)% D&A and Customs Duties 0.10 0.08 (17.1)%
0.23 0.21 (8.8)% Other Expenses 0.24 0.21 (11.9)%
3.01 3.31 9.7% Total Opex 3.06 3.32 8.6%
5.6%(2.8)%8.6%
24
2018
56.6 56.8 57.1 60.9 62.3 62.8 62.8 66.5 67.6 USD/RUB
69.1 65.7 66.9 71.8 77.0 75.9 75.0 73.8 79.1 Brent (USD)
44 353
32 484
30 000
40 000
50 000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 9M(WA)
2018 2017
• 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 formula-
linked price - Jet fuel priceIntl = NW Europe (FOB
Rotterdam) price x Discount x FX rate2 x 1.183 +
Storage/Fuelling/Supply fees (if any of these applicable)
• Increasing average fuel price per tonne.
Aeroflot Airline:
• 9M 2018: 44,353 RUB (+36.5% y-o-y).
• Q3 2018: 48,019 RUB (+49.4% y-o-y).
• Aeroflot Group:
• 9M 2018: 45,252 RUB (+36.0% y-o-y).
• Q3 2018: 48,501 RUB (+47.5% y-o-y).
Fuel Cost Management
• 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 Q3 and 9M 2018.
Flight Hours
10.2%
Fuel Consumption per ASK Fuel Consumption per RTK
Aeroflot Airline Jet Fuel Price
(thousand hours) (gr/ASK) (gr/RTK)
(RUB per tonne of jet fuel)
1
Source: Bloomberg, Company data1 Weighted average price for 9M
Comments
2 USD/RUB exchange rate as per the Central Bank of Russia3 Assuming 18% VAT rate
(1.2)% (1.2)%
756
834
9M 2017 9M 2018
22.8 22.5
9M 2017 9M 2018
275.4 272.1
9M 2017 9M 2018
25
53,306
35,472 3,450
3,595
19,056 (14,253)
(37,107)
(754) (2,596) (12,877)
(4,187)1,962 2,124
47,189
(2,377)
44,812
Reported
EBITDA 9M
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 9M
2018
NRE** Adjusted
EBITDA 9M
2018
(RUB mln)
EBITDA Evolution
* 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.
Net volume and price effect
∑=(53,434) RUB mln
Total effect on revenue
∑=61,572 RUB mln
Total effect on costs
∑=(67,687) RUB mln
Net volume and price effect
∑=42,516 RUB mlnNet FX effect
∑=4,802 RUB mln
Volume effect(8,441) RUB mln
Price effect(28,306) RUB mln
26
Pobeda Financial Results
Increasing PAX Traffic RASK dynamics
Increasing ASK CASK dynamics
2.64 2.66
9M 2017 9M 2018
3.3
5.2
9M 2017 9M 2018
Million passengers RUB
Growing Revenues of LCC Segment
1.942.27
9M 2017 9M 2018
PAX up by 55.3% in 9M 2018 RASK up by 0.6% in 9M 2018
ASK up by 64.5% in 9M 2018 CASK up by 16.8% in 9M 2018
Q3 2017 Q3 2018 Change RUB mln 9M 2017 9M 2018 Change
7,733 12,747 64.8% Revenue 16,002 26,483 65.5%
4,660 5,464 17.3% EBITDAR1 6,703 8,093 20.7%
60.3% 42.9% (17.4) p.p.EBITDAR
margin41.9% 30.6% (11.3) p.p.
3,823 3,796 (0.7)% EBITDA 4,230 3,862 (8.7)%
49.4% 29.8% (19.6) p.p.EBITDA
margin26.4% 14.6% (11.8) p.p.
3,219 3,080 (4.3)% Net income 3,619 3,255 (10.1)%
41.6% 24.2% (17.4) p.p. Net margin 22.6% 12.3% (10.3) p.p.
Note: based on managerial accounts transformed under IFRS standards1 Calculation based on Total Revenue of the Company
• Pobeda has demonstrated solid results backed by strong demand and active expansion of the fleet
in 9M 2018.
Billion ASK RUB
1
6.1
10.0
9M 2017 9M 2018
27
RUB mln 31-Dec-2017 30-Sep-2018 Change
Borrowings 3,181 3,502 10.1%
Finance Lease Liabilities 100,689 92,449 (8.2)%
Pension Liabilities 922 920 (0.2)%
Total Debt 104,792 96,871 (7.6)%
Cash and Short Term
Investments54,909 60,051 9.4%
Net Debt 49,883 36,820 (26.2)%
0.9 0.9
0.6
0.7
30-Sep-2017 31-Dec-2017 31-Mar-2018 30-Jun-2018 30-Sep-2018
Leverage and Liquidity
• Net Debt decreased by 26.2% due to decrease in finance lease obligations as well as accelerated growth in cash
position.
• Cash position of RUB 60.1 billion and undrawn credit lines of RUB 81.5 billion.
1 31-Dec-2017 exchange rate - 57.60 RUB per USD , 30-Sep-2018 exchange rate - 65.59 RUB per USD 3 Not including interest; future payments in dollars converted into roubles at exchange rate of 65.59 RUB per USD2 Net debt does not include capitalised operating lease expenses; based on annualized EBITDA
Debt Profile1 Net Debt / LTM EBITDA2
Debt breakdown by currency Finance Lease Repayment Schedule (RUB billion)3
Borrowings Finance Lease
31-Dec-2017 31-Mar-2018 30-Jun-2018 30-Sep-2018
49,883 29,470 (656) 36,820
56,015 49,420 47,234 49,898
RUB mln
Net Debt 2
EBITDA 2
n/m
87%
13%
RUB USD
2%
98%
4.2
14.8 14.6 14.7
44.1
2018 2019 2020 2021 2022+
28
1. Market Update
2. Aeroflot Group Overview
3. Network and Schedule Overview
4. Fleet Overview
5. Financial Performance
6. Appendix
29
0.17
2.28
0.65 0.43
3.83
2.97
1.41
0.81
UK USA Turkey Russia
39.2 46.3
52.6 56.4
62.6
2013 2014 2015 2016 2017
110.7 103.1 97.9 101.4 102.3
2013 2014 2015 2016 2017
… from airlines on domestic routesRailways facing increasing competition…
Notes: (1) Total local and foreign carriers’ traffic
Sources: FAAT, Aeroflot estimates
Russian Air Transportation Market: Room for Growth
Total CAGR 4.5%
International – (1.3)% | Domestic – 12.4%
Despite fast growth of the recent years,Russian airline industry still haspromising growth prospects comparedto European & US markets
ChangeFY16-17
31.7%
11.0%
(5.1)%(6.9)%
3.6%
10.9%
10.8%
17.9%
RZD long-haul rail traffic (mln PAX) Domestic air traffic (mln PAX)
(2) Airline PAX per capita per year, as of 2017
Sources: FAAT, Aeroflot estimates
0.17
Domestic PAX per capita
2.28
0.65 0.43
x.xx
(5.0)%
13.6%
20.3%
• 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.
Russian Total Passenger Traffic Growth, mln PAX(1) Trips per Capita (2)
0.8%
7.3%
Long-distance rail routes low over 10mln PAX in the recent 5 years andover 30 mln PAX over a decade
Domestic air traffic growth at a muchhigher pace than other means oftransportation
39.2 46.3 52.6 56.4 62.6
64.4 65.5 54.7 46.461.1
103.7111.8 107.3 102.8
123.7
0.0
50.0
100.0
150.0
2013 2014 2015 2016 2017Domestic Routes International Routes
30
Operating Data – Q3 & 9M 2018
Indicator Unit
Aeroflot airline Aeroflot Group
Q3
2017
Q3
2018Y-o-Y
9M
2017
9M
2018Y-o-Y
Q3
2017
Q3
2018Y-o-Y
9M
2017
9M
2018Y-o-Y
Passenger Traffic th PAX 9,544 10,547 10.5% 24,789 26,770 8.0% 15,378 17,393 13.1% 38,340 42,249 10.2%
International Routes th PAX 4,950 5,336 7.8% 12,957 13,688 5.6% 6,975 7,700 10.4% 17,221 18,759 8.9%
Domestic Routes th PAX 4,594 5,211 13.4% 11,832 13,082 10.6% 8,402 9,693 15.4% 21,119 23,490 11.2%
Passenger Turnover mn pkm 26,372 28,599 8.4% 69,173 73,525 6.3% 39,990 44,441 11.1% 99,382 108,428 9.1%
International Routes mn pkm 17,055 18,207 6.8% 45,620 47,958 5.1% 22,884 24,793 8.3% 58,408 62,725 7.4%
Domestic Routes mn pkm 9,317 10,392 11.5% 23,553 25,567 8.6% 17,105 19,648 14.9% 40,974 45,703 11.5%
Passenger Capacity mn ASK 30,267 32,463 7.3% 83,556 90,088 7.8% 45,035 49,411 9.7% 118,754 129,393 9.0%
International Routes mn ASK 19,897 21,236 6.7% 55,788 60,054 7.6% 26,078 28,219 8.2% 69,820 76,180 9.1%
Domestic Routes mn ASK 10,370 11,227 8.3% 27,768 30,034 8.2% 18,956 21,192 11.8% 48,934 53,213 8.7%
Passenger Load Factor % 87.1% 88.1% 1.0 p.p. 82.8% 81.6% (1.2) p.p. 88.8% 89.9% 1.1 p.p. 83.7% 83.8% 0.1 p.p.
International Routes % 85.7% 85.7% - 81.8% 79.9% (1.9) p.p. 87.8% 87.9% 0.1 p.p. 83.7% 82.3% (1.3) p.p.
Domestic Routes % 89.8% 92.6% 2.7 p.p. 84.8% 85.1% 0.3 p.p. 90.2% 92.7% 2.5 p.p. 83.7% 85.9% 2.2 p.p.
Tonne-Kilometres mn tkm 2,642 2,850 7.9% 6,977 7,372 5.7% 3,917 4,357 11.2% 9,817 10,697 9.0%
International Routes mn tkm 1,720 1,834 6.6% 4,627 4,851 4.9% 2,248 2,441 8.6% 5,787 6,217 7.4%
Domestic Routes mn tkm 922 1,016 10.3% 2,350 2,521 7.3% 1,669 1,916 14.8% 4,030 4,480 11.2%
Revenue Flights flights 64,944 73,270 12.8% 180,689 200,651 11.0% 101,921 114,717 12.6% 276,779 305,730 10.5%
International Routes flights 31,839 35,946 12.9% 89,744 98,963 10.3% 42,447 48,419 14.1% 114,732 128,358 11.9%
Domestic Routes flights 33,105 37,324 12.7% 90,945 101,688 11.8% 59,474 66,298 11.5% 162,047 177,372 9.5%
Flight Hours hours 185,732 206,592 11.2% 520,666 572,003 9.9% 279,066 311,853 11.7% 756,305 833,776 10.2%
31
Operating Data – October & 10M 2018
Indicator Unit
Aeroflot airline Aeroflot Group
October
2017
October
2018Y-o-Y
10M
2017
10M
2018Y-o-Y
October
2017
October
2018Y-o-Y
10M
2017
10M
2018Y-o-Y
Passenger Traffic th PAX 2,913 3,145 8.0% 27,702 29,915 8.0% 4,301 4,792 11.4% 42,641 47,041 10.3%
International Routes th PAX 1,505 1,574 4.6% 14,462 15,262 5.5% 1,997 2,162 8.3% 19,218 20,922 8.9%
Domestic Routes th PAX 1,407 1,571 11.6% 13,240 14,653 10.7% 2,304 2,629 14.1% 23,423 26,119 11.5%
Passenger Turnover mn pkm 8,167 8,590 5.2% 77,339 82,115 6.2% 11,271 12,304 9.2% 110,652 120,732 9.1%
International Routes mn pkm 5,306 5,468 3.1% 50,926 53,427 4.9% 6,803 7,174 5.5% 65,210 69,899 7.2%
Domestic Routes mn pkm 2,861 3,122 9.1% 26,413 28,688 8.6% 4,468 5,130 14.8% 45,442 50,832 11.9%
Passenger Capacity mn ASK 10,029 10,589 5.6% 93,585 100,677 7.6% 13,712 14,855 8.3% 132,466 144,247 8.9%
International Routes mn ASK 6,607 6,912 4.6% 62,395 66,966 7.3% 8,330 8,863 6.4% 78,150 85,043 8.8%
Domestic Routes mn ASK 3,422 3,677 7.5% 31,190 33,711 8.1% 5,382 5,991 11.3% 54,316 59,204 9.0%
Passenger Load Factor % 81.4% 81.1% (0.3) p.p. 82.6% 81.6% (1.0) p.p. 82.2% 82.8% 0.6 p.p. 83.5% 83.7% 0.2 p.p.
International Routes % 80.3% 79.1% (1.2) p.p. 81.6% 79.8% (1.8) p.p. 81.7% 80.9% (0.7) p.p. 83.4% 82.2% (1.2) p.p.
Domestic Routes % 83.6% 84.9% 1.3 p.p. 84.7% 85.1% 0.4 p.p. 83.0% 85.6% 2.6 p.p. 83.7% 85.9% 2.2 p.p.
Tonne-Kilometres mn tkm 838 878 4.8% 7,815 8,250 5.6% 1,134 1,234 8.8% 10,951 11,930 8.9%
International Routes mn tkm 548 565 3.1% 5,175 5,417 4.7% 685 724 5.7% 6,472 6,940 7.2%
Domestic Routes mn tkm 290 312 7.9% 2,640 2,833 7.3% 449 510 13.5% 4,479 4,990 11.4%
Revenue Flights flights 21,844 24,244 11.0% 202,533 224,895 11.0% 32,292 36,092 11.8% 309,071 341,822 10.6%
International Routes flights 10,709 11,728 9.5% 100,453 110,691 10.2% 13,778 15,420 11.9% 128,510 143,778 11.9%
Domestic Routes flights 11,135 12,516 12.4% 102,080 114,204 11.9% 18,514 20,672 11.7% 180,561 198,044 9.7%
Flight Hours hours 62,966 68,484 8.8% 583,631 640,487 9.7% 88,980 98,393 10.6% 845,285 932,170 10.3%
32
Key Operating Data of Subsidiary Airlines
Indicator UnitRossiya Airline Pobeda Airline Aurora Airline
9M 2018 Y-o-Y 9M 2018 Y-o-Y 9M 2018 Y-o-Y
Passenger Traffic th PAX 9,046 0.3% 5,178 55.3% 1,255 5.2%
International Routes th PAX 3,563 6.6% 1,195 92.3% 314 4.4%
Domestic Routes th PAX 5,483 (3.5)% 3,983 46.8% 941 5.4%
Passenger Turnover mn pkm 23,520 3.9% 9,436 64.7% 1,947 5.8%
International Routes mn pkm 11,706 6.7% 2,610 90.0% 451 2.5%
Domestic Routes mn pkm 11,814 1.3% 6,826 56.7% 1,496 6.8%
Passenger Capacity mn ASK 26,791 0.6% 9,972 64.5% 2,542 1.0%
International Routes mn ASK 12,723 6.7% 2,782 84.9% 621 3.1%
Domestic Routes mn ASK 14,068 (4.3)% 7,190 57.7% 1,921 0.4%
Passenger Load Factor % 87.8% 2.7 p.p. 94.6% 0.1 p.p. 76.6% 3.4 p.p.
International Routes % 92.0% - 93.8% 2.5 p.p. 72.7% (0.4) p.p.
Domestic Routes % 84.0% 4.6 p.p. 94.9% (0.6) p.p. 77.9% 4.7 p.p.
Flight Hours hours 156,363 (0.7)% 70,210 63.5% 35,201 (0.2)%
33
12.4 12.5 13.1 13.014.0
22.9 23.124.2 24.2
25.5
16.1 16.217.0 17.0
18.1
16.0x 19.1x 21.2x 20.9x 22.6x
2015 2016 2017 9M 2017 9M 2018
International Domestic Combined
3.6 3.74.4
3.33.6
2015 2016 2017 9M 2017 9M 2018
14.0% 13.1% 13.6% 13.5% 13.6%
16.7% 16.9% 17.5% 18.0% 16.3%
13.5% 12.1% 11.8% 12.2% 11.6%
44.2%42.1%
42.9% 43.7%41.5%
2015 2016 2017 9M 2017 9M 2018Domestic - DomesticInternational - Domestic / Domestic - InternationalInternational - International
Average weekly frequency per route – Aeroflot airline
Increase in International – International Traffic
Aeroflot Airline Domestic and International Transit
Considerable share of transit of Aeroflot airline in Sheremetyevo
6.9%
7.6%
Growth
9M 2018
5.3%
… Results into a Flexible Approach to Transit Flows
• 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.
Growing Connectivity of Aeroflot Airline’s Flights1 ...
Total Aeroflot airline int. – int. transit traffic, million PAX
Pickup in point-to-point demand combined with expanding capacitiesresulting in growing international transfer volumes
9.3%
… Backed by Convenient Location of Aeroflot Hub
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
Connectivity ratio
From/To Paris London Vienna Stockholm Rome
TokyoVia Moscow 15:00 15:05 13:45 13:15 14:55
Via Dubai 18:30 18:55 17:15 17:45 17:30
ShanghaiVia Moscow 14:05 14:10 12:50 12:20 14:00
Via Dubai 17:25 17:50 16:10 16:40 16:25
Hong KongVia Moscow 15:00 14:40 13:20 12:50 14:30
Via Dubai 18:30 17:10 15:30 16:00 15:45
Moscow
Shortest
geographical
distance
34
40
80
Sheremetyevo development planEvolution of key operating indicators (max. theoretical capacity)
Source: Sheremetyevo press-center, aviation explorer, public sourcesNote:1 Actual passenger traffic of 2017 2 According to IATA Methodology
New Terminal B Highlights New infrastructure objects launched in 2018
Terminal B Interterminal tunnel Express train
20262017
2018
2019
2021
2024
Terminal C-2
Terminal CTerminal B
Warehouse
Cargo
Terminals
Runway-3
Runway-2
Runway-1
Fuel-filling
Complex
Terminal D
Terminal FInterterminal TunnelTerminal E
mm
pax
Annual pax
capacity
Flights per
hour2
55
90
flig
hts
Infrastructure Expansion to Support Future Growth
• Aeroflot finalized transfer of the majority of own domestic flights to the new Terminal B on November 15, 2018,
leaving only eight daily flights to the Far East of Russia to ensure more efficient connections.
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
1
35
9M 2018 Operating Data by Region (Scheduled Routes)
• Strong operating performance on scheduled routes supported by FIFA World Cup and additionally
influenced by selective route network adjustments and competition.
Source: Data presented based on management accounting for scheduled flights of Aeroflot Group (excluding charter flights)
Americas Russia CIS
Europe Middle East Asia
Performance of North and Central Americanmarket was supported by additional frequency toMiami in Summer schedule and increased ASKto other destinations, which weighted on PLF.
Russian market is continuing to show consistentgrowth in 2018 with strong PLF performance onthe back of efficient capacity management andaddition of new routes and frequencies.
Positive contribution to regions’ KPIs comes fromincreased frequencies of Aeroflot airline andstronger demand to local destinations, slightlydimmed by subsidiaries’ operating programoptimization.
European market performance benefited fromlaunch of additional frequencies to keydestinations and from new destinations opening,putting slight pressure on PLF.
Operating performance of the region significantlyaffected by increased frequencies to Istanbul,Antalya and Dubai backed by strong demand.PLF affected by stronger competition on selectroutes.
More traffic on key scheduled destinations(Beijing, Seoul) as well as popular leisuredestinations (Male) amid material increase infrequencies supportive for overall performance ofthe region.
6.6 % 6.0 %
9.9 %
(3.0) p.p.Passengers
carriedRPK ASK PLF
12.4 % 12.9 %
9.7 %
2.4 p.p.
Passengerscarried
RPK ASK PLF
4.1 %
0.7 % 0.5 % 0.2 p.p.
Passengerscarried
RPK ASK PLF
12.2 % 13.4 %
16.5 %
(2.2) p.p.
Passengerscarried
RPK ASK PLF
7.4 % 7.0 %
10.7 %
(2.7) p.p.
Passengerscarried
RPK ASK PLF
2.6 % 2.0 % 1.7 %0.3 p.p.
Passengerscarried
RPK ASK PLF
36
140 150 165189
224 250
5.2
4.14.4 4.2 4.1 4,1
2013 2014 2015 2016 2017 9/30/2018
Aircraft Average Age
232 251 247289
325361
7.77.0
6.4 6.5 6.2 6,2
2013 2014 2015 2016 2017 9/30/2018
Aircraft Average Age
• 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
Aeroflot Group Fleet in Operation 1
Aeroflot Airline Fleet in Operation 1
Average Age of the Fleet 2
1 Excludes planes out of operation 2 Average Fleet Age of Selected Airlines with Active Fleet of 100+ Aircraft according to FlightGlobal data (as of October 2018) excluding planes out of operation
Aeroflot Group Fleet Evolution
4.1
4.8
5.1
5.3
5.6
5.6
5.6
5.6
5.8
5.8
6.0
6.0
6.0
6.1
6.2
6.4
6.5
7.5
10.0
10.5
10.7
12.0
13.0
13.8
13.9
14.9
16.3
Hainan Airlines
Shandong Airlines
Xiamen Airlines
China Eastern Airlines
Shanghai Airlines
Sichuan Airlines
Spirit Airlines
IndiGo
Qatar Airways
Azul
Emirates Airline
Lion Air
Saudia
Etihad Airways
Garuda Indonesia
EasyJet Europe
Singapore Airlines
Japan Airlines
American Airlines
Qantas
Lufthansa
Air France
British Airways
Jazz
United Airlines
Delta Air Lines
37
Fleet Expansion Commitments
Notes: 1As of 30.09.2018; Not including 1 An-24 , 5 An-148 2 2019+ additions are subject to corporate approval
• Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking
into account market trends and opportunities.
Type of aircraft
9M 2018 (Actual)Current
fleet1
4Q 2018 (Plan) 2019 (Plan) 2020 (Plan) 2021 (Plan)
DeliveryPhase
outDelivery
Phase
outDelivery
Phase
outDelivery
Phase
outDelivery
Phase
out
Wide-body (long-haul) 5 - 57 1 - 2 (3) 10 (4) 8 (3)
A-330 - - 22 - - - (3) - (4) - (3)
B-777 5 - 26 1 - 2 - 2 - 1 -
B-747 - - 9 - - - - - - - -
A-350 - - - - - - - 8 - 7 -
Narrow-body (medium-haul) 28 (10) 240 8 (8) 10 (18) 15 (14) 15 (18)
A-319 - - 36 - (2) - (4) - (3) - (4)
A-320 10 (5) 85 1 (4) 1 (9) - (11) - (7)
A-321 5 (4) 39 - (2) - (4) - - - (3)
B-737 13 (1) 80 7 - 9 (1) 9 - 8 (4)
МС-21 - - - - - - - 6 - 7 -
Narrow-body (regional) 13 - 64 - (1) 12 (3) 12 (1) 12 -
SSJ-1002 13 - 50 - - 10 - 12 - 12 -
DHC-8 - - 11 - (1) - (3) - (1) - -
DHC-6 - - 3 - - 2 - - - - -
TOTAL 46 (10) 361 9 (9) 24 (24) 37 (19) 35 (21)
Delivery/Phase-out Schedule in Accordance with Existing Contracts
38
2.95
3.133.053.10
3.383.27
Domestic International Total
3.603.83 3.733.68
4.234.00
Domestic International Total
9M RASK ex. Pobeda (PAX Revenue / ASK)9M Yield ex. Pobeda (PAX Revenue / RPK)
Aeroflot Group Scheduled Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level affected RUB yields in Q3 and 9M 2018.
Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations.
RUB
% Y-o-Y increase
RUB
2017 2018
9M RASK (PAX Revenue / ASK)9M Yield (PAX Revenue / RPK)
RUB RUB
2.3%7.1%
5.2%
6.9%10.4%8.0%
2.91
3.123.033.01
3.363.21
Domestic International Total
3.50
3.813.67
3.52
4.18
3.88
Domestic International Total
0.5%
5.6%
3.5%
5.9%9.8% 7.8%
39
9M RASK (Scheduled + Charter PAX Revenue / ASK)9M Yield (Scheduled + Charter PAX Revenue / RPK)
3.74 3.75 3.743.75
4.194.00
Domestic International Total
3.37 3.29 3.323.47
3.69 3.59
Domestic International Total
3.46 3.57 3.533.53
3.973.78
Domestic International Total
2.902.99 2.953.03
3.273.17
Domestic International Total
Aeroflot Group Blended Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level affected RUB yields in Q3 and 9M 2018.
Note: Data presented based on management accounting figures, scheduled and charter flights revenue is used for calculations
RUB
% Y-o-Y increase
RUB
2017 2018
Q3 Yield (Scheduled + Charter PAX Revenue / RPK)
RUB
Q3 RASK (Scheduled + Charter PAX Revenue / ASK)
RUB
0.2%6.8%
3.0%8.1%
12.0%12.1%
1.9%7.2%
4.5%7.3%11.0% 9.3%
40
Sheduled Passenger Flights
89.7%
Charter Passenger Flights 7.2%
Cargo 3.0%
Q3 2017 Q3 2018 Y-o-Y Region 9M 2017 9M 2018 Y-o-Y9M 2018, % of
sch. revenue
62,086 71,101 14.5% Russia 137,374 155,892 13.5% 41.1%
37,319 45,267 21.3% Europe 88,151 106,577 20.9% 28.1%
18,158 21,419 18.0% Asia 49,525 56,011 13.1% 14.8%
7,111 7,891 11.0% CIS 16,729 18,644 11.4% 4.9%
8,323 10,243 23.1%North and Central
America19,801 23,523 18.8% 6.2%
6,313 7,518 19.1%Middle East and
Africa16,146 18,761 16.2% 4.9%
139,310 163,439 17.3% Total 327,726 379,408 15.8% 100.0%
Traffic Revenue Analysis
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
9M 2018
9M 20182
Traffic Revenue Breakdown by Type
Scheduled Traffic Revenue by POS
Revenue from Scheduled Passengers (RUB mln)1
• In 9M 2018 revenue from scheduled passengers grew by 15.8% mainly driven by revenue growth on Russian,
European and Asian markets.
Total Passenger Revenue (Scheduled + Charter, RUB mln)
Q3 2017 Q3 2018 Y-o-Y Segment 9M 2017 9M 2018 Y-o-Y9M 2018, %
of revenue
63,976 73,633 15.1% Domestic 141,799 161,162 13.7% 39.3%
85,727 103,989 21.3% International 208,702 248,812 19.2% 60.7%
149,702 177,622 18.7% Total 350,502 409,974 17.0% 100.0%
Sales abroad31.8%
Online32.7%
Call center and ow n branches
3.6%
Sales in Russia31.8%
41
Headcount Overview
• Improvement in labour productivity has resulted in increase of key performance indicators in 9M 2018.
• Aeroflot Group headcount increased by 6.2% vs. September 30, 2017.
Traffic Revenue / Average Airlines’ Headcount PAX Traffic / Average Airlines’ Headcount
4.2%
(million RUB per employee, annualized to 30.09.2018) (passengers per employee, annualized to 30.09.2018)
Aeroflot Group Headcount by Category
9.7%
1 Aeroflot Group headcount table excludes Aeroflot Aviation School headcount amounting to 181 employees as at 31.12.2017 and 198 employees as at 30.09.2018.
31-Dec-2017 30-Sep-2018 %
Cabin crew 11,259 11,947 6.1 %
Airport services 7,034 7,117 1.2 %
Technical maintenance and repair 4,702 5,196 10.5 %
Flight crew 3,846 4,042 5.1 %
Tickets and services sales, advertising 1,903 1,921 0.9 %
Other airline personnel (inc. airlines’ head office) 5,430 5,586 2.9 %
Other non-airline subsidiaries’ personnel 4,696 4,972 5.9 %
Total1 38,870 40,781 4.9 %
Flight crew9.9%
Cabin crew29.3%
Technical maintenance and
repair12.7%
Tickets and services sales,
advertising4.7%
Airport services17.5%
Other airline personnel
13.7%
Other non-airline personnel
12.2%
14.0
15.4
30.09.2017 (LTM) 30.09.2018 (LTM)
1,4911,554
30.09.2017 (LTM) 30.09.2018 (LTM)
42
44,130
64,254 3,168
30,043
9,590
4,554 535
10,160
54,882
(18,801)
36,081
(8,592)
923
12,260 290
Profit BeforeIncome Tax
D&A InterestExpense
UnrealizedNet FX Loss
Other Adj.Before
WorkingCapital
Changes
Cash FlowsFrom
OperatingActivitiesBefore
WorkingCapital
Changes
WorkingCapital
Changesand Income
Tax
Net CashFlows FromOperatingActivities
CapitalExpenditures
ProceedsFrom Sale of
PPE
DepositPlacementand Return
Net Pre-delivery
Payments forAircraft
Net LeasingDeposits for
a/c inOperatingLease and
Other
Free CashFlow 9M
2018
Free CashFlow 9M
2017
Operating and Free Cash Flows
• Strong Operating and Free Cash Flow generation in 9M 2018 on the back of growing business volumes and solid
operating performance.
(RUB mln)
Billion RUB 9M 2018
Other adjustments before working capital changes, incl. 10.2
Effect from revenue hedging (finance lease hedge accounting) 4.9
Change in provisions 8.1
Other (2.8)
1 Change in provisions line mainly consists of provision for regular repairs and maintenance
Billion RUB 9M 2018
Working capital changes and income tax, incl. (18.8)
Change in accounts receivable and prepayments (17.5)
Change in accounts payable and accrued liabilities 3.1
Change in expendable spare parts and inventories (1.2)
Change in tax and restricted cash (3.2)
(31.3)%
43
27,149 22,490
61,011 561 (66,588)
(3,038) 966 (699) 105 2,984 39
Reported NetIncome 9M 2017
Traffic Revenue Other Revenue OperatingExpenses
Finance Income Finance Costs Hedging Result Revaluation ofEquity
Investments andother
Taxation Other Reported NetIncome 9M 2018
Net Income Evolution
(RUB mln)
• Increase in revenue generated by growing volumes was offset by a less favorable cost environment
which resulted in adjustment of the bottom line.
44
Reported and Adjusted Net Income Analysis
• One-off effects had limited influence on Aeroflot Group 9M 2018 financial results.
9M Adjusted Net Income Build-Up (RUB mln)
22,492
18,434
196 (144) (1,327)
(561) (2,222)
Reported Net Income9M 2018
Discounting of receiptof lease deposits
Change in the fairvalue of investmentsin equity securities
FOREX on PDP Insurance refund(aircraft)
Recovery of part ofthe provision created
for compensationunder long-term
motivation programs
Adjusted Net Income9M 2018
BALANCE SHEET
Balance sheet
line
IAS 17 IFRS 16
Finance
leases
Operating
leasesAll leases
Assets -
Liabilities $$ - $$$$$$$
Off balance sheet
rights/ obligations-
$$$$$
INCOME STATEMENT
P&L line
IAS 17 IFRS 16
Finance
leases
Operating
leasesAll leases
Revenue
Operating costs (excluding
D&A)- Expense -
EBITDA
Depreciation and amortisation Depreciation - Depreciation
Operating profit
Finance costs Interest - Interest
Profit before tax
• IFRS 16 will replace IAS 17 and is mandatory
applicable starting January 2019
• Almost all lease contracts will be recognized on
balance sheet
• Operating lease charges 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
looking for solutions to avoid increased volatility
• Introduction of IFRS 16 will materially change financial statements of all companies with significant rent.
• 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.
IFRS 16 (accounting of leases)
45
46
Board of Directors
Executive Board
Personnel and Remuneration
Committee
(3 members)
General Meeting of Shareholders
Board of Directors
Audit Committee
(3 members)
Strategy Committee
(9 members)
Corporate Governance
NameAudit
Committee
Personnel and
Remuneration
Committee
Strategy
Committee
Mikhail Poluboyarinov
Evgeny Ditrich
Vitaly Saveliev
Sergey Chemezov
Igor Kamenskoy Member Chairman Member
Roman Pakhomov Member Chairman
Dmitry Peskov Member
Vasily Sidorov Chairman Member Member
Yuri Slyusar Member
Maxim Sokolov Member
Mikhail Voevodin Member Member
Board of Directors
The Board of Directors is currently composed of 11
members. The Board’s composition is well balanced
from members’ background perspective.
Incorporated in Russia, PJSC Aeroflot is subject to
Russian corporate governance regulations and follows
Russian Corporate Governance Code
Independent director according to the Russian Corporate Governance Code
47
Aeroflot Group Structure
Airlines Ancillary Companies
PJSC Aeroflot(1)
JSC Rossiya Airlines 75%-1 sh.
LLC Pobeda Airlines 100%
JSC Orenair (2) 100%
JSC Donavia (2) 100%
JSC Aurora Airlines 51%
CJSC Aeromar
On-board sales/catering51%
LLC Aeroflot-Finance
Financial services100%
JSC Sherotel
Hotel services100%
Aeroflot Aviation School
Education services100%
Notes:
(1) The Group as of 30-Sep-2018; Aeroflot Group consolidates all entities: PJSC Aeroflot and all subsidiaries.
(2) Non-operating entities
• 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)
A-Technics
Maintenance 100%
48
Address: 119002, Russia, Moscow, Arbat St. 10
E-mail: [email protected]
Website: www.aeroflot.ru
Investor Relations Contacts
