sollers ifrs results 2017sollers-auto.com/common/img/uploaded/investor_relations/ifrs_res… · •...

03.05.2018

SOLLERS IFRS RESULTS 2017

2

1. 2017 SOLLERS STRATEGIC DEVELOPMENTS

4. SOLLERS’ JOINT VENTURES’ RESULTS

3. SOLLERS OPERATING AND FINANCIAL PERFORMANCE IN 2017

2. RUSSIAN AUTOMOTIVE MARKET OVERVIEW

3 2017 SOLLERS STRATEGIC DEVELOPMENTS

JULYAdil Shirinov is appointed CEO and President of Ford Sollers JV

UAZ launches sales of new UAZ PROFI in the most popular segment of LCV

JUNEMAZDA SOLLERS JV starts assembly of new Mazda CX-5 in Vladivostok

Ford Sollers JV: retail sales up 18% in 2017 vs. 12% growth of total Russian market

DECEMBERUAZ export sales: 46% growth in 2017 to 5.1 k units (2016: 3.5 k units)

OCTOBER DECEMBER

UAZ presents pilot version of UAZ Cargo with hybrid power unit

JULYAdil Shirinov is appointed CEO and President of Ford Sollers JV

MAZDA SOLLERS JV starts assembly of new Mazda CX-5 in Vladivostok

UAZ presents pilot version of UAZ Cargo with hybrid power unit

4 2018 SOLLERS STRATEGIC DEVELOPMENTS

FEBRUARYElena Frolova is appointed Deputy General Director for Finance and Economics of SOLLERS Group

JANUARYUAZ presents pilot version of UAZ Cargo with hybrid power unit

FEBRUARYMAZDA SOLLERS JV launches production of new crossover Mazda CX- 9

Ford Sollers JV launches new Ford Explorer for Russian market

5 NEW LCV

NEW MODELS

• UAZ PROFI – new light commercial vehicle based on UAZ Patriot platform in the mass segment of LCV

• Combines the comfort of passenger car and the payload of commercial vehicle

• Competitive price positioning will support the new segment penetration

• Start of sales in October 2017

• Price: from RUB 724 k

• New engine: ZMZ-PRO – up to 160HP

• Increased payload and wheel base: 1 500 kg & 5.9 m

• Strengthened frame and suspension

• Improved manoeuvrability & extra choice of comfort options

6





7 2015 – 2017 RUSSIAN AUTOMOTIVE MARKET, K UNITS*

• Sales of new passenger cars and LCVs in Russia increased by 12% in 2017

• Growth in all main market segments, the overall passenger car market went up by 12% in 2017

• The largest SUV+Pickup segment grew by 22% in 2017 mainly due to crossovers

• B+ segment also grew by 11%

• The growth in light commercial vehicles is due to sales of GAZ and Ford vehicles (7% and 71% growth respectively in 2017)

132

2016

208

644

162

158131

529

407

132

558

2015

394

129

1 477145

435

121

2017

1 493

1 315

-12% +12%

C SUV+PickupOther B+B

99

2015

89

12

93

11201610

2017

100 103111

+3%+8%

CDVLCV+MPV

* Source - AEB

SALES OF PASSENGER CARS SALES OF LIGHT COMMERCIAL VEHICLES

HIGHLIGHTS

8

• The market for SUVs and Pickups outperformed the overall market: +22% vs. 12% growth of total passenger car sales

• The growth due to mass SUV models like recently launched Hyundai Creta, Kia Sportage, Renault Kaptur and new Volkswagen Tiguan

• Ford improved its position on SUV segment due to successful sales of Ford Kuga and Ford Explorer

NEW SUV+PICKUP MARKET 2015 – 2017, K UNITS*

MAJOR MARKET TRENDS IN 2017

2015 – 2017 NEW SUV + PICKUP

* Source - AEB

2017 KEY PLAYERS (RETAIL SALES), K UNITS

12% 12% 9% 9% 7% 5% 5% 5% 4% 3% 3%

4,6% 0,8% -2,2% -0,7% 0,9% 2,1% -0,8% -0,6% 0,6% -0,7% -0,8%

32

7677

61 60

47

3429

2124 22 21 20

-1,6%

3%

269

2015

62

218

278

2016

644

207

53

362

51

231

2017

529558

-5%

+22%

Russian brands Foreign brands assembled in Russia

New import0,4%

3%

9

• UAZ is #2 player on LCV+MPV market with 21% market share

• The market share is expected to increase due to the launch of UAZ PROFI in October 2017. The model is positioned in the mass segment of light commercial vehicles

• Ford Transit sales increased by 67% in 2017, the brand managed to increase its market share to 10% and became #3 player on the LCV+MPV market

NEW LCV+MPV MARKET 2015 – 2017, K UNITS*

MAJOR MARKET TRENDS IN 2017

2015 – 2017 NEW LCV+MPV MARKET

* Source - AEB

2017 KEY PLAYERS (RETAIL SALES), K UNITS

9,6

6,5

4,6

1,9 1,7 1,6 1,30,6 0,5

49,5

20,3

50% 21% 10% 7% 5% 2% 2% 2% 1% 1% 0%

0,1% -3,8% 3,7% -0,2% -0,2% -0,1% 0,5% 0,0% -0,2%0,6% 0,0%

93

11

13

7064

14 13

69

2015

11

2016

16

2017

8999

+4%+6%

Russian brands

New import

Foreign brands assembled in Russia

10





11 SOLLERS GROUP WHOLESALES

SOLLERS CONSOLIDATED WHOLESALES

SOLLERS JVS WHOLESALES

k units 2016 2017 Change

UAZ 51,1 46,5 -9,0%

UAZ Hunter 4,1 2,3 -43,9%

UAZ Patriot 19,2 15,5 -19,2%

UAZ commercial vehicles - old model range 23,3 22,0 -5,6%

UAZ commercial vehicles - new model range 4,5 6,8 51,1%

k units 2016 2017 Change

MAZDA SOLLERS JV 24,1 24,1 0,0%

FORD SOLLERS JV 44,5 54,0 21,3%

The decrease in UAZ sales volumes is due to customers’ adaptation to the reduction in state direct support

HIGHLIGHTS

12 OVERVIEW OF 2017 FINANCIAL RESULTS

RUB mln 2016 2017 Change

Revenue 35 621 35 764 0,4%

EBITDA 3 903 3 377 -13,5%

EBITDA margin 11,0% 9,4% -1,5%

Operating profit 2 269 1 788 -21,2%

Operating margin 6,4% 5,0% -1,4%

Financial instrument recognition/ revaluation and change in fair value* (1 319) (261) 1 058

Share of result of JVs 1 026 412 -614

Net profit 1 601 999 -37,6%

Net debt as of 31.12.2016/ 31.12.2017 4 740 7 609 60,5%

13 SALES STRUCTURE, RUB BLN

SALES STRUCTURE

The growth in the Group’s revenue of 0,4% due to the change in UAZ product mix and export sales growth

8

24

0

4

20

12

16

28

32

36

28,8

4,91,9

2016

27,9

6,5

1,42017

35,6 35,8

0,4%

OtherVehicles Automotive components

14 EBITDA CHANGES, RUB MLN

EBITDA CHANGES

3 903

3 377

0

3

6

9

12

15

18

21

0

400

800

1 200

1 600

2 000

2 400

2 800

3 200

3 600

4 000

2017

9.4%11.0%

2016

-13%

EBITDA EBITDA margin

EBITDA VS OPERATING PROFIT

1 354

135100

D&AOperating profit

Compensation of capitalised

expenses

Other one-off

transactions

EBITDA

1 788

3 377

1 354

15 CASH FLOW, RUB MLN

2 336 2 3061 351

1 354

588

(558)

(876)

Cash at the beginning of the year

PBT Share of profit of JVs and

associates

D&A Change in working capital

(1 320)

Additions to PPE & other

LT assets

R&D net of subsidy

Other adjustments

Prepayments deposited at

special accounts (restricted

cash)

75Dividends received

from associates

and JVs

(3 198)

3 770

(148)

Net change in debt

Cash at the end of the year

(557)

Provision movements

261 (360)(412)

Interest charge

Income tax and interest

paid

Impairment of the option

X Cash inflowX Subtotals (X) Cash outflow

Other adjustments include profit/ loss on the sale of property, plant and equipment, investments and other non-current assets

Net cash from financing activityRUB 3,770 mln.

Net cash used in operating activity RUB (1,121) mln.

Net cash used in investing activity RUB (2,679) mln.

16 NET DEBT POSITION, RUB MLN

4 740

7 609

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

10.5%

6.0%

7.5%

12.0%

9.0%

13.5%

15.0%

9.7%

31.12.2016 31.12.2017

7.9%

Net debt Average effective interest rate, %

NET DEBT POSITION AND EFFECTIVE INTEREST RATE

NET DEBT STRUCTURE

• Average effective interest rate increased as a result of the lower share of subsidised debt in the Group’s loan portfolio as of December 31, 2017 . The government subsidy is applied to the credit lines commenced before 2015

• Liquidity reserves up to RUB 7.1 bln. including cash of RUB 3.1 bln. and available credit facilities of RUB 4.0 bln.

RUB mln 31.12.2016 31.12.2017 Change

Long-term debt 3 420 2 830 -17,3%

Short-term debt 3 656 7 961 117,8%

Total debt 7 076 10 791 52,5%

Cash at the end of the period 2 336 2 306 -1,3%

Restricted cash - 876 n/a

Net debt 7 076 7 609 7,5%

17





18 MAZDA SOLLERS JV AND SOLLERS-FINANCE JV PERFORMANCE

6,26,0

24,1

18,1

2016

17,9

2017

24,1

Mazda6Mazda CX-5 18% 14%

26%

8%

40%

58%

11%8%

5% 12%3,297

2016

4,509

2017

Special vehiclesPassenger carsTrucksLCVOther vehicles

MAZDA SOLLERS JV FINANCIAL RESULTS*

MAZDA SOLLERS WHOLESALES, K UNITS LEASED OUT VEHICLES BY TYPE, RUB MLN

SOLLERS-FINANCE JV FINANCIAL RESULTS**

RUB mln 2016 2017

Revenue 26 355 27 490

Operating profit 2 070 662

Operating margin 8% 2%

Net profit 1 725 604

Net profit margin 7% 2%

Debt as of 31.12.2016/31.12.2017 1 432 -

RUB mln 2016 2017

Revenue 645 907

Operating profit 351 322

Operating margin 54% 36%

Net profit 263 259

Net profit margin 41% 29%

Leasing portfolio as of 31.12.2016/31.12.2017 2 633 4 101

* MAZDA SOLLERS JV 2016 net profit included subsidies related to the prior periods** SOLLERS-FINANCE JV leasing portfolio adjusted for provisions

19 JOINT VENTURES RESULTS

BREAKDOWN OF JVS’ CONTRIBUTION TO THE SHARE OF PROFIT OF JVS

The results of Ford Sollers JV are not presented due to impairment of the investment and recognition of the option in SOLLERS’ consolidates financial statement

RUB mln Current SOLLERS' stake 2016 2017 Change

MAZDA SOLLERS JV 50% 862 302 65%

SOLLERS-BUSSAN JV 50% 32 (20) -163%

SOLLERS-FINANCE JV 50% 132 130 -1%

TOTAL CONTRIBUTION 1 026 412 60%

20 STOCK INFORMATION

Market capitalisation, RUB mln. 17 169

Shares, mln. 34,27

Price at 25.04.2018, RUB 501

Security List I

300

700

500

400

600

25.04.2017 25.04.2018

STOCK EXCHANGE DATA AT 25.04.2018

SHARE PERFORMANCE AT MOEX, TICKER: SVAV

588

501

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