16.01.2017
AVTOVAZ Call with Financial Analysts
Nicolas MAURE / Dr. Stefan MAUERER
CEO / CFO
Disclaimer
16.01.2017 AVTOVAZ Call with Financial Analysts 2
Information contained within this document may contain forward looking statements.
Although the Company considers that such information and statements are based on
reasonable assumptions taken on the date of this report, due to their nature, they can
be risky and uncertain and can lead to a difference between the exact figures and
those given or deduced from said information and statements.
PJSC AVTOVAZ does not undertake to provide updates or revisions, should any new
statements and information be available, should any new specific events occur or for
any other reason. PJSC AVTOVAZ makes no representation, declaration or warranty
as regards the accuracy, sufficiency, adequacy, effectiveness and genuineness of any
statements and information contained in this report.
Further information on PJSC AVTOVAZ can be found on AVTOVAZ’s web sites
(www.lada.ru/en and http://info.avtovaz.ru).
AVTOVAZ Overview
Moscow International Automobile Salon 2016
AVTOVAZ 50-years History
16.01.2017 AVTOVAZ Call with Financial Analysts 4
VAZ 2101 1966/1970
LADA XRAY 2016
AVTOVAZ Group: Key information
16.01.2017 AVTOVAZ Call with Financial Analysts 5
20.1%
331
sales points
30
countries
408 467
Cars & KDs produced
2015: 176.5 B-Rub (2.6 B-Euro)
2016: estimated T/O > 2015
51 527 p.
IZHEVSK LADA-Izhevsk
plant TOGLIATTI AVTOVAZ
Head-office &
Togliatti plants
MOSCOW AVTOVAZ
Representative
office
LADA product portfolio
16.01.2017 AVTOVAZ Call with Financial Analysts 6
LADA Granta LADA Kalina LADA Priora LADA Vesta LADA XRAY LADA Largus LADA 4x4
Granta Sedan Kalina Hatchback Priora Sedan Vesta Sedan XRAY Largus 5- or 7-seats 4x4 3-doors
Granta Liftback
Kalina Wagon
Largus Cross
5- or 7-seats
4x4 Urban 3-doors
Granta Pick Up Kalina Cross Largus Fourgon 4x4 5-doors
Granta Sport Kalina Sport 4x4 Urban 5-doors
Kalina NFR 4x4 Pick Up
LADA Sport
Launched
Nov, 2015
Launched
Feb, 2016
Russian PC Market Achievements 2016 – LADA Market Share
16.01.2017 AVTOVAZ Call with Financial Analysts 7
266.3
149.6
145.3
116.8
94.3
76.1
70.5
55.4
36.9
36.9
LADA
Kia
Hyundai
Renault
Toyota
VW
Nissan
Skoda
Mercedes-Benz
Ford
20.1%
11.3%
10.9%
8.8%
7.1%
5.7%
5.3%
4.2%
2.8%
2.8%
90.4
87.7
87.7
55.2
47.7
44.0
36.3
30.6
29.8
29.6
Hyundai Solaris
LADA Granta
Kia Rio
LADA Vesta
VW Polo
Renault Duster
LADA Largus
Toyota RAV 4
Chevrolet Niva
Renault Logan
+2.2% LADA
Renault
Toyota
Skoda
Ford
Lexus
Kia
VW
Lifan
Hyundai
BMW
UAZ
Mercedes-Benz
Land Rover
Audi
Mazda
Datsun
Nissan
Chevrolet
Mitsubishi
Hyundai Solaris
LADA Granta
Kia Rio
LADA Vesta
VW Polo
Renault Duster
LADA Largus
Toyota RAV 4
Chevrolet Niva
Renault Logan
LADA
Top-10 brands, К units / MS % Top-10 models, К units 2016 MS vs. 2015, %
AVTOVAZ: Togliatti and Izhevsk plants overview
16.01.2017 AVTOVAZ Call with Financial Analysts 8
* Harbour standard (3 760 h per annum)
** From 1/2017
*** Including KDs
Togliatti Izhevsk
Capacity* 650 K vehicles per year Capacity* 113 K vehicles per year
3 Vehicle Lines** +
Powertrain & Components Lines
1 Vehicle Line +
Components Lines
312 K cars*** in 2016 96 K cars*** in 2016
Mid-Term Plan (approved by BoD on Dec 6th, 2016)
Russian Passenger Car Market Outlook
16.01.2017 AVTOVAZ Call with Financial Analysts 10
India
Turkey
Ukraine Mexico
Russia South Korea
US (PC) Poland
Czech Republic
France UK Germany
US (PC+LCV)
0
200
400
600
800
1 000
Passenger cars per 1 000 people (2015)
Russian PC Market Outlook and LADA Market Share
<5 years 26%
5-10 years 28% >10 years
46%
Age of Russian car fleet (> 40 Mio cars in 2015)
640 355 524 581 541 456 387 269 266 >400 >500
2 760
1 376
1 789
2 497
2 774 2 626
2 358
1 507 1 327
23.2% 25.8%
29.3% 23.3%
19.5% 17.4% 16.4% 17.9% 20.1%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0
500
1 000
1 500
2 000
2 500
3 000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
optimistic scenario
AVTOVAZ Mid-Term Plan storyline
16.01.2017 AVTOVAZ Call with Financial Analysts 11
2016-2019
Rebound through:
• Robust 20% PC MS in Russia
• Strong cost optimization
• Deep supplier localization
• Quality and customer satisfaction
• Export sales ramp-up
Positive COP from 2018
FCF breakeven in 2019
2020-2026
Profitable growth through:
• Complete product/market
portfolio regeneration
• Full utilization of capacities
(3 vehicle lines in Togliatti &
1 in Izhevsk)
• Fully integrated Alliance
standards and systems
COP > 5% from 2021
FCF positive from 2020
1 2
BACK ON TRACK in two phases
Transformation of LADA brand good opinion from customers
16.01.2017 AVTOVAZ Call with Financial Analysts 12
55
62 63
66
61 59
44
50 50 48
45 43
30
33
36 38
35
23
33 35
36 35
27 28 30
27 27
12 12 11
15 17
16
3 4
5 5
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Competitor 1
Competitor 2
Competitor 3
Competitor 4
Competitor 5
Competitor 6
LADA vehicles export sales growth projection (incl. SKD & CKD)
16.01.2017 AVTOVAZ Call with Financial Analysts 13
0
30
60
90
120
150
180
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
CIS Other countries
export countries
in 2017
K-units p.a
LADA Product Plan directions
16.01.2017 AVTOVAZ Call with Financial Analysts 14
2 New models
4 Facelifts
5 New models
2 Facelifts
5 New models
5 Facelifts
2017 - 2019 2020 - 2022 2023 - 2026
16.01.2017 AVTOVAZ Call with Financial Analysts 15
AVTOVAZ cost optimization key levers
• New working scheme with suppliers
• Production optimization
(including Components)
• Productivity improvement
• Creation of Industrial park
Monozukuri
2016 – 2019 AVTOVAZ Mid-Term Plan: strong performance boost to secure recovery
16.01.2017 AVTOVAZ Call with Financial Analysts 16
THROUGH HEADWINDS BACK ON TRACK
2012 - 2015 2016 – 2019
REVENUE Drop to the level of 2011
impacted by Russian market drop
> 50% growth from 2016 to 2019
supported by Russian market recovery
MARKET SHARE RF Drop down to 16.4% > 20% robust market share
EXPORT Fall by 3 times Substantial growth to >50ku (2019)
COSTS Growth of costs under FX changes,
inflation and drop of volumes
Localization and Monozukuri;
Manuf. performance at Alliance level
SG&A High administrative expenses Optimization of SG&A
LADA BRAND OPINION/
QUALITY
11-17 % of respondents positively
assessing the brand;
Improvement in Quality
Growth in number of respondents
positively assessing the brand;
Quality at global level
OPERATING PROFIT Negative Positive from 2018
FREE CASH FLOW Negative Move to breakeven in 2019
Production volume forecast (cars + KDs), k-units
16.01.2017 AVTOVAZ Call with Financial Analysts 17
0
200
400
600
800
1 000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
LADA Alliance and partners
2 shifts capacity (“Harbour” standard, 3 760 h per annum)
3 shifts capacity (4 800 h per annum)
AVTOVAZ Mid-Term Plan roadmap
16.01.2017 AVTOVAZ Call with Financial Analysts 18
COP before non-recurring items, B-RUB Revenue, B-RUB
-
100
200
300
400
500
600
700
201
4
201
5
201
6
201
7
201
8
201
9
202
3
202
6
Free cash-flow, B-RUB
(50)
(40)
(30)
(20)
(10)
-
10
20
30
40
50
201
4
201
5
201
6
201
7
201
8
201
9
202
3
202
6
+50%
(40)
(20)
-
20
40
60
80
100
201
4
201
5
201
6
201
7
201
8
201
9
202
3
202
6
5%
x2
16.01.2017 AVTOVAZ Call with Financial Analysts 19
• Full leverage of Russian market recovery with minimum 20%
passenger cars market share through: • full renewal of LADA vehicle line-up
• transformation of LADA brand image
• Export push in CIS and other selected regions of the World
• Strong cost optimization through: • deep localization and Monozukuri with suppliers
• manufacturing performance at Alliance level
• headcount optimization (Industrial Park in Togliatti)
• Full utilization of Togliatti and Izhevsk plants’ capacities for
LADA, Renault and Nissan/Datsun vehicles
• Full integration of Alliance standards and systems
• Strong support from Renault Nissan Alliance and Rostec
COP positive from 2018 and > 5% from 2021
FCF breakeven in 2019 and positive from 2020
Conclusions
Q & A