avtovaz group 2016 ifrs financial results press-conference€¦ · russian passenger car market...

10.02.2017

AVTOVAZ GROUP

2016 IFRS FINANCIAL RESULTS PRESS-CONFERENCE

Nicolas MAURE / Dr. Stefan MAUERER

CEO / CFO

Disclaimer

10.02.2017AVTOVAZ Group 2016 IFRS financial results press-conference 2

EMBARGO: The content of this presentation must not be disclosed until

09.15 Moscow time of February, 10th

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).

http://www.lada.ru/en

http://info.avtovaz.ru/

Content

1. 2016 IFRS FINANCIAL RESULTS

Dr. Stefan MAUERER

EVP, Chief Financial Officer

2. 2016 REVIEW AND 2017 OUTLOOK

Nicolas MAURE

President & Chief Executive Officer

3. Q & A

1. 2016 IFRS FINANCIAL RESULTS Dr. Stefan MAUERER

EVP, Chief Financial Officer

Moscow International Automobile Salon 2016

276,138

31,343

66,275 62,926

34,218

275,688

17,275

61,071

33,282 32,104

Lada RF Lada Export Renault Nissan, Datsun GM


AVTOVAZ Group wholesales volume

Units (incl. SKD + CKD)

LADA RF LADA Export Renault Nissan+Datsun Other partners

-0.2% -44.9% -7.9% -47.1% -6.2%

2015 2016 2015 2016 2015 2016 2015 2016 2015 2016

Main impact -

Kazakhstan

Russian PC Car

Market -12%


AVTOVAZ Group revenues

2016 2015CHANGE

2016 vs 2015

Unit wholesalesincl. SKD & CKD (units)

419,420 470,900 -10.9%

Group revenues(B RUR)

184.9 176.5 +4.8%

of which: LADA Brand incl. aftersales 136.9 117.4 +16.7%

Renault-Nissan Alliance 40.5 51.0 -20.6%

Other 7.5 8.1 -7.4%


AVTOVAZ Group revenues variance analysis

Change 2016 vs 2015: + 8.4 B RUR (+4.8%)

176.5 184.9

-2.5 -3.8-10.5

+16.5

+6.6 +2.3

2015 VolumeLADA RF

NV

VolumeLADAExport

ModelMix LADA

PriceLADA

RF

Sales to Alliance

Aftersales 2016

B RUR


AVTOVAZ Group operating results

2016B RUR

2015B RUR

CHANGE,

in B RUR

Operating result before impairment and restructuring costs

-15.6 -24.7 +9.1

in % from Revenue -8.4% -14.0%

Impairment -24.1 -40.5 +16.4

Restructuring costs -0.9 -1.6 +0.7

Operating result -40.6 -66.8 +26.2

H1 H2

-8.6 -7.0

+596-379

9

AVTOVAZ Group operating result variance analysis1

Change 2016 vs 2015: + 9.1 B RUR (operating loss reduction by 36.8%)

1 Operating result before impairment and restructuring costs

AVTOVAZ Group 2016 IFRS financial results press-conference

-24.7-15.6

-3.2 -1.1

-10.5

+3.2 +18.8

+1.9

FY 2015 COGS w/o Currency

Currency G&A RevenueLada & other

RevenueAlliance

Others FY 2016

10.02.2017

2015 2016

B RUR

BOM increase -11.7 B RUR

Manufacturing cost

Improvement +8.6 B RUR

LADA &


AVTOVAZ cost optimization key levers implemented from 2016

• New working scheme with suppliers

• Production optimization

(including Components)

• Productivity improvement

• SG&A reduction and optimization

Monozukuri


AVTOVAZ Group net result

2016B RUR

2015B RUR

CHANGE,

in B RUR

Operating result before impairment and restructuring costs

-15.6 -24.7 +9.1

Impairment -24.1 -40.5 +16.4

Restructuring costs -0.9 -1.6 +0.7

Operating result -40.6 -66.8 +26.2

Net interest income / expenses -10.0 -5.1 -4.8

Other finance income / expenses 1.9 0.2 +1.7

Share of profit / loss of associates and joint

ventures 0.6 -1.3 +1.9

Income tax benefits / expenses 3.3 -0.8 +4.1

Net result for the year -44.8 -73.9 +29.1

Operating cash flows before

working capital changes

-4.3

Free cash flow

-24.8

Net increase/ decrease in cash

and cash equivalents

12.6

-10.4

-13.6

Change in

working capital

+3.4

Income tax paid, Interest received,

Interest paid

Net cash used in investing

activities

Net cash generated

from financing activities

w/o shares paid

+11.3

Shares paid

+26.1

AVTOVAZ Group 2016 cash flow analysis

12AVTOVAZ Group 2016 IFRS financial results press-conference 10.02.2017

B RUR

2. 2016 REVIEW AND 2017 OUTLOOKNicolas MAURE

President & Chief Executive Officer

Main Company Targets for 2016 (Q2-Q3-Q4)


1. Complete Management Team

2. Secure Safety and Quality/Customer satisfaction

3. Achieve >20% Passenger Cars Market Share in Russia

4. Ramp-up export sales to selected regions of the World

5. Accelerate localization of suppliers and sub-suppliers

6. Drive all necessary actions for the Company’s financial recovery (11 cross-

functional work groups active since May 2016)

7. Reinforce Audit and Internal Control

8. Continue implementation of the best Renault-Nissan Alliance Standards

- ongoing - done

LADA 2016 Commercial results (reminder)


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

+2.2ppLADA

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, % points

AVTOVAZ 2016 production


* 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

Russian Passenger Car Market Outlook (2017-2020)


India

Turkey

UkraineMexico

Russia South Korea

US (PC)Poland

Czech Republic

FranceUK 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 years26%

5-10 years28% >10 years

46%

Age of Russian car fleet (> 40 Mio cars in 2015)

640 355 524 581 541 456 387 269 266 >400

2 760

1 376

1 789

2 497

2 7742 626

2 358

1 5071 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

optimistic scenario

>20% >20% >20% >20%

LADA sales in RF (k-units) LADA Market share (%)


• Promotion of LADA Brand Image

• LADA Product events

• Launch of VESTA SW/SW Cross

• “Exclusive” versions for Vesta and XRAY

• Limited Editions (4x4 “40 Anniversary”, …)

• LADA Connect

• Export push

• Growth of Aftersales, Services and

Components sales

• Preparation of future LADA line-up

Key levers & targets for 2017 revenue improvement


• Optimization of purchases

• Deep localization

• Monozukuri in partnership with suppliers

• Manufacturing efficiency

• Alliance Production Way (APW)

• Industrial Park in Togliatti

• Efficient processes/Digital transformation

• Leverage of Synergies with

Renault - Nissan Alliance

Optimization of financial results

Key levers & targets for 2017 efficiency improvement


• 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

• Industrial Park in Togliatti

• Full utilization of Togliatti and Izhevsk plants’ capacities for

LADA, Renault and Nissan/Datsun vehicles

• Integration of Alliance standards and systems

• Strong support from Renault-Nissan Alliance and Rostec

COP positive from 2018

FCF breakeven in 2019

Mid-term vision of AVTOVAZ Group

3. Q & A

avtovaz group 2016 ifrs financial results press-conference€¦ · russian passenger car market...

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