february 2019 no1 no1 no1 no2 12 - gtlk.ru · stlc is the leading company in russia in terms of...

No2No1 No1 12IN OVERALL VOLUME OF NEW BUSINESS AND LEASING PORTFOLIO *

IN AVIATION TRANSPORT LEASING *

IN WATER TRANSPORT LEASING *

IN RAILWAY TRANSPORT LEASING *

BN USD OF INVESTMENTS IN THE TRANSPORT INDUSTRY

No1

* according to RAEX research of the leasing market, 2018

STATE TRANSPORT LEASING COMPANY FEBRUARY 2019

3 Presentation of STLC's key development indicators

BRIEF HISTORICAL OVERVIEW

2009-2010 2011-2012 2013 2014 2015 2016 2017 2018

• Establishing a specialized leasing company on the basis of STLC, OJSC, in line with the instructions of V.V. Putin for purchasing domestic automotive and road construction machinery

• The Ministry of Transport of the Russian Federation is authorized to exercise shareholder rights

• Starting the implementation of the target leasing program with State participation

• Increasing the Company’s capital by USD 151 million in order to support domestic producers under the program of anti-crisis measures of the Government of the Russian Federation

• Developing commercial leasing programs using borrowed funds of Russian banks

• STLC is among TOP-5 companies in the leasing market, taking the leading positions in the transport leasing segments *

• Implementing a non- commercial leasing program through reinvestment of lessees’ funds

• Active development of the railway equipment leasing

• Developing the leasing of regional aviation

• Assigning a long-term ВВ- credit rating by S&P

• At the end of 2012, the total amount of investments in non- commercial leasing programs exceeded USD 302.1 million

• STLC entered the Asian borrowed capital markets: in cooperation with ICBCL, it funded the delivery of five Airbus A321 to Aeroflot

• STLC is the largest AC supplier for regional aviation and entered the water transport leasing market

• Developing the operating leasing business line

• Launching a pilot program for leasing motor vehicles running on gas engine fuel

• Debut bond issue at the MICEX stock exchange (USD 302.1 million)

• At the end of 2013, STLC is among TOP-3 companies in terms of the operating leasing volumes*

• ICBC opened a credit facility for USD 800 million for funding deals with aircraft

• Start of the implementation of the energy efficient transport leasing program with state co-financing (Order of the Government of Russian Federation from 30.12.2014 № 2788-r)

• At the end of the year, STLC is the leader in the segment of water transport leasing in terms of the new business volume*

• STLC is the leader in the segments of air transport leasing segment and that of operating leasing *

• The State made two contributions to the STLC's authorized capital for a total of USD 527.2 million

• Initiated activities for the development of operating leasing of SSJ100

• Further development of the partnership with the Chinese financial market – financed the delivery of 3 Boeing 777-300ER units to Aeroflot

• STLC successfully plased the debut issue of 5-year Eurobonds for USD 500 million among a wide range of international investors

• Increasing STLC's capital by USD 187.3 million of budget funds as part of supporting the leasing of Russian AC and development of ferry transport in the Far East

• CMB Financial Leasing Co provided a credit facility to fund the supply of seven new Airbus А320-214 aircraft to Aeroflot

• Assigning long-term international credit ratings: Ba2 by Moody’s, BB- by Fitch. The rating assigned by S&P upgraded to BB- with a “stable” forecast

• STLC is the largest leasing company in Russia in terms of the leasing portfolio and new business volumes

• Attracting a syndicated credit line from Gazprombank, ICBC, RRDB, CBM, Banca Intesa and Bank of China for the amount of up to USD 651 million to fund the leasing of SSJ100**

• Increasing STLC's capital by USD 170.7 million as part of implementing projects to support the leasing of domestic AC and the development of the Vanino – Kholmsk ferry crossing

• Placing the second issue of Eurobonds for the amount of USD 500 million for 7 years

• The Fitch rating increased to BB with a “positive” forecast; S&P and Moody`s increased the long- term STLC rating forecast from “stable” to “positive”

• Awarding the А+(RU) rating by the ACRA agency

• The investments of STLC in Russia’s transport industry exceeded USD 12 billion

• Construction of the "Lavna" coal transshipment facility has been launched

• The volume of federal budget subsidies allocated to STLC in 2018 was equal to USD 312,6 million

• STLC leased more than 30% of the total amount of innovative cars produced in Russia in 2018

• STLC began the implementation of the air park monitoring system

• Foreign platform for non-primary export has been created - GTLK GLOBAL BUSINESS

• STLC was ranked in TOP-10 of Russian bond issuers according to Cbonds

* According to RAEX research of the leasing market

** Line initially opened by Gazprombank in December 2016; in March 2017, the creditors’ syndicate was joined by ICBC and RRDB, and in May 2017, Credit Bank of Moscow, Banca Intesa, and Bank of China


KEY DEVELOPMENT INDICATORS State Transport Leasing Company (STLC, the Company)

is the largest leasing company in Russia The Russian Federation is the Company’s sole

shareholder (represented by the Ministry of Transport of the Russian Federation)

STLC’s authorized capital has been created by the Government of the Russian Federation in the form of monetary contributions for the implementation of state programs to support the domestic transport sector in the amount of USD 1.35 billion

The total amount of STLC's investment in the Russian transport sector in 2009–2018 was over USD 12 billion; the multiplier effect of budgetary investments, 1:8

STLC’s total portfolio volume grew from USD 30.2 million in 2009 to USD 14 billion as of 31.12.2018. The volume of new business for 2018 equals USD 3.8 billion

STLC is a versatile leasing company, which has a diversified and stable leasing portfolio

STLC's clients and partners are major Russian enterprises, state companies, and financial institutions

STLC's credit rating is below Russia's sovereign credit rating by one notch

Bа1 BB BB- А+(RU)* The investment amount under existing contracts reduced by the amount of compensation for contract value in received leasing payments

STATE INVESTMENT IN STLC'S HOLDING COMPANY, USD million

№1 IN TERMS OF THE

PORTFOLIO SIZE AND VOLUME OF NEW

BUSINESS

100% IN THE FEDERAL

OWNERSHIP

STLC'S INVESTMENT IN TRANSPORT SECTOR, USD billion*

DYNAMICS OF STLC'S NEW BUSINESS AND LEASING PORTFOLIO

STLC'S LEASING PORTFOLIO STRUCTURE IN TERMS OF THE INVESTMENT AMOUNT, as of 31.12.2018*

STLC CREDIT RATING

2009

2009

New business, USD million Leasing portfolio, USD million

2010 2011 2012 2013

Air transport

Railway transport

Water transport

Motor transport, road construction transport

Other

2014 2015 2016 2017 2018

151.0

181.2

166.1

317.2

527.2

12

2015

2016

2017

2018

5,15

1

8,08

114

,003

3,30

8.1

2,40

1.8

2,02

4.1

1,374

.6

873

181.2

30.2

2,03

9.2

2,37

1.6

3,76

1

861

30260

4

415

468

120.

8

15

2009-2018

2%

3%

16%

36%

43%

AKPA


KEY FINANCIAL INDICATORS, IFRS

As of September 30th 2018, STLC’s assets have increased by 35% and exceeded USD 6.9 billion (according to IFRS)

STLC’s assets have increased exponentially due to growth of the new leasing business STLC showed positive net profit of USD 7.9 million for the first 9 months of 2018

STLC meets key profitability targets set by the shareholder

STLC maintains a consistently high level of capital adequacy

Growth of equity capital significantly increases the borrowing potential of STLC and the Company's development opportunities

STLC'S ASSETS, USD billion* KEY PERFORMANCE INDICATORS (IFRS), USD million (9M 2018)*

2012 2016 2017 9M 2018

1.1 2.1 2.90.6 0.8 0.8 0.6

1.3

2.0 2.5

0.1 0.20.4

1.3

0.1

0.2 0.3

0.10.1

0.1

0.3

1.0

0.9 1.2

0.20.2

0.6

2.8

3.5

5.26.9

1.51.3

0.8

2013 2014 2015

Net investment in leases Assets under operating lease

Cash and cash equivalents Other assets

REVENUE 504.9PROFIT FOR THE PERIOD 7.9ROE 1.76%CAPITAL ADEQUACY (CAPITAL/ASSETS) 16.7%

* * According to the exchange rate of the ruble 1 USD= 66.2 RUB


STLC is the largest leasing company in Russia in terms of the volume of new business ( market share – 16%) and leasing portfolio (share – 22%) following results of 2018

STLC is the leader in terms of the new business volume in the segments of water and railway transport leasing

STLC is the leading company in Russia in terms of bonds placed at the financial market

LEADING MARKET POSITIONSTOP-10 RUSSIAN LEASING COMPANIES IN TERMS OF THE NEW BUSINESS SIZE (as of 31.12.2018), USD billion*

SHARE IN THE NEW BUSINESS SIZE IN THE LEASING MARKET SEGMENTS**

STLCSberbank Leasing

VTB LeasingVEB-leasingTransFin-M

Gazprombank LeasingAlfa Leasing

EuroplanSiemens Finance

Baltic Leasing

STLCSberbank Leasing

VTB LeasingEuroplan

Alfa LeasingVEB-leasing

Gazprombank LeasingBaltic Leasing

Siemens FinanceRESO-Leasing

Gazprombank Leasing 12%

AIR TRANSPORT

Sberbank Leasing

44%

STLC

VEB- leasing

VTB Leasing

Other

6%

17%

4%

29%

#2

WATER TRANSPORT

STLC

Goznak leasing

Other 11%

9%

14 3.29.1 2.9

5.6 1.18.6 2.4

4.2 0.93.0 0.9

2.2 0.81.2 0.60.9 0.60.8 0.5

* According to the preliminary data of the research carried out by RAEX 2018 **According to the research carried out by RAEX for 9 months 2018

RAILWAY TRANSPORT

STLC

VTB Leasing

Other 17%

15%

23%Sberbank Leasing

33%

#180%

#1

TOP-10 RUSSIAN LEASING COMPANIES IN TERMS OF THEIR LEASING PORTFOLIO AMOUNT (as of 31.12.2018), USD billion*


SUSTAINABLE FUNDING STLC has successful experience attracting

funding from international and Russian financial institutions – a loan agreement with the Black Sea Trade and Development Bank (BSTDB) worth USD 69 million was signed in February 2019 during the Russian Investment Forum in order to finance the construction of Lavna coal terminal in Murmansk seaport

An active issuer in the international and local markets: - in July 2016 and May 2017, STLC successfully placed the Eurobond issues for the total amount of USD 1 billion; - there are 20 bond issues and exchange bonds worth RUB 116 billion and USD 1.32 billion

Financing of the most capital-intensive leasing transactions in the aviation segment are carried out in conjunction with Chinese credit organizations. Around USD 1 billion has been attracted from Industrial and Commercial Bank of China (ICBC) and China Merchants Group

* According to IFRS** The amount of obtained loans, bonds issued and finance lease obligations according to IFRS*** The amount of net investments in financial lease (before impairment) and value of assets leased out under operating lease according to IFRS

WELL-BALANCED FUNDING STRUCTURE* 9 M 2018, %

Other habilities

Finance leasing liabilities

CapitalLoans received

Bonds issued

3%

WELL-BALANCED LOAN STRUCTURE BY MATURITY** 9 M 2018, %

From 7 to 10 years

Over 10 years

Under 1 year

From 5 to 7 years

From 3 to 5 years16%

44%

14%35%

3%

52%

WELL-BALANCED CURRENCY STRUCTURE 9 M 2018, %

FUNDING**

LEASING PORTFOLIO***

65%35%

64%36%

4%

RUB USD

STLC IS A TOP-10 RUSSIAN BOND ISSUER ON THE DOMESTIC MARKET FOLLOWING RESULTS OF 2018 (ACCORDING TO CBONDS)

7%

10%

VOLUME OF ISSUES IN 2018 84 USD million

MARKET SHARE IN 2018 3.42%

NUMBER OF ISSUES IN 2018 6

From 1 to 3 years12%


STLC'S ROLE FOR THE GOVERNMENT

STRONG FINANCIAL SUPPORT

TRANSPORT INDUSTRY DEVELOPMENT INSTRUMENT

In 2009–2018, the Government of the Russian Federation contributed USD 1.3 billion* in the Company’s capital

The State maintains the Company’s high level of capital adequacy

During its 9 years of operation STLC developed from a regular leasing company into a unique development institution of the transport industry capable of implementing domestic and international projects

ACTIVE IMPLEMENTATION OF STATE PROGRAMS

Since 2009, STLC has actively implemented the programs of the Government of the Russian Federation

The programs are implemented in three main areas:

• Leasing program with state support • Projects dedicated to the development of

transport engineering • Projects to attract extrabudgetary

investment in the transport sector

ACTIVE PARTICIPATION IS COMPANY MANAGEMENT

STLC’s Board of Directors is led by the Deputy Chairman of the Government of the Russian Federation M. A. Akimov

The Company’s Board includes representatives of two core ministries: the Ministry of Transport of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation

The State approves the medium-term strategy of the Company

100% STATE OWNED

The Russian Federation is the Company’s sole shareholder (represented by the Ministry of Transport of the Russian Federation)

* According to the exchange rate of the ruble 1 USD= 66.2 RUB


THE VOLUME OF STATE CO-FINANCING OF STLC’S LEASING PROGRAMS, USD million* VOLUME OF INVESTMENTS* AND PROCUREMENT OF EQUIPMENT UNDER STLC’S IMPLEMENTED LEASING PROGRAMS WITH STATE CO-FINANCING

2009 20162015 2017 2018

678.2151.0151.0

54.330.2

89.1

74865.6 1,036.2

132.9

453.1

223.6

140.5

PROCUREMENT UNDER THE PROGRAM

PROGRAM INVESTMENT STRUCTURE

151.0

678.2

USD 453.1 million

USD 74.0 million

USD 110.5 mllion

USD 30.2 million

USD 30.2 million

USD 148.0 million

USD 75.5 million

USD 89.1 million

USD 151 million

USD 60.4 million

USD 57.4 million

USD 15.1 million

USD 54.3 million

865.61,036.2

Domestic aircraft SSJ100 leasing development program

Domestic helicopter leasing development program

L-410 aircraft leasing development program

Vanino–Kholmsk ferry crossing development project

Domestic automobile and road construction vehicles leasing development

Energy efficient transport non-commercial leasing program

Domestic dry cargo and high-speed passenger ships leasing development project

1,348.9

* According to the exchange rate of the ruble 1 USD= 66.2 RUB** The total planned volume of investments into the program

1 SSJ100 leasing development: 44 units

2 Helicopter leasing development: 110 units

3 Leasing of road constr., street cleaning and other machinery: 7.9 thousand units

4 Leasing of dry cargo and pass. vessels: 13 units

5 Leasing of energy efficient transport: 853 units

6 Ferry leasing: 2 units

7 L-410 leasing development: 14 units

USD 1,356.4 million**

USD 574 million**

USD 453.1 million

USD 178.2 million**

USD 173.7 million**

USD 151 million

USD 86.1 million**

Federal budget investments in the program, %

State co-financing for other leasing programs

STLC’s authorized capital at the beginning of the year

Extrabudgetary investments, %

State co-financing for leasing programs with prolongation

49% 51%

33% 67%

42% 58%

50% 50%

53% 47%

55% 45%

43% 57%

IMPLEMENTATION OF STATE SUPPORTED LEASING PROGRAMS


2012

2012 2013 2014 2015 2016 2017 9m 2018

2016 2017 9m 2018

52% 51% 50%4% 25% 40% 60%

11% 8% 9%2% 4% 5%

27% 33% 37%

42%

51%54% 42% 30%

10% 8% 4%23% 14% 6%

2013 2014 2015

100%

80%

20%

67%

33%

35%

65%

45%

55%

50%

54%

50% 46

%

51% 49%

LEASING PORTFOLIO STRUCTURE

CHANGE IN THE LEASING PORTFOLIO STRUCTURE* BY LEASING TYPES

LEASING PORTFOLIO DIVERSIFICATION* IN THE KEY SEGMENTS

FINANCIAL LEASE

LONG-TERM OPERATING LEASE

54% 46%DIVERSIFIED PORTFOLIO

STLC operates in more than 7 segments of leasing (railway, water, air, passenger motor transport, road construction machinery, etc.)

The shares in the portfolio are well-balanced by areas

HIGH VALUE AND COLLATERAL QUALITY

Ratio of collateral value to net investment in leases is near 100%

OPTIMIZATION OF THE RAILWAY LEASING PORTFOLIO

Active restructuring of existing contracts and transfer to operating lease with writing off the value to the market one

97% OF PORTFOLIO** IS AIRCRAFT LEASING

Long-term operating lease is the main method of funding in the global aviation industry

LONG-TERM CONTRACTS

The average terms of contracts for operating lease are about 10 years

INTERNATIONAL RISK MANAGEMENT STANDARDS

Creation of reserves for the future maintenance of aircraft significantly reduces operational risks

STRONG CLIENT BASE

Financial lease Operating lease

Water transportAir transport

Railway transportOtherNote: Figures cannot be summed up correctly due to rounding

* Based on the IFRS amounts of net investment in leases (before provisions) and assets under operating lease** Based on the IFRS amounts of assets under operating lease


* According to the exchange rate of the ruble 1 USD= 66.2 RUB** Airbus A321, A320, A319, A220-300*** B737-700, B737-800, B737-400, B767-300, B777-300ER

2012 2013 2014 2015 2016 2017 2018

33.5

589784

1,389

2,606

3,814

4,753

Airbus**: 42 units

Boeing***: 19 units

CRJ200: 2 units

AS350 B3: 1 units

SSJ100: 44 units

L410: 14 units

Let L410: 18 units

Mi-8: 83 units Ansat: 29 units

Robinson: 1 unit

AIRCRAFT LEASINGSTLC'S INVESTMENT IN LEASING OF CIVIL AIRCRAFT, USD million*

KEY CLIENTS:

STRUCTURE OF THE STLC'S AIRCRAFT PORTFOLIO, units

STLC IS ONE OF THE LEADERS IN THE RUSSIAN SEGMENT OF AIRCRAFT LEASING

As of 31.12.2018, STLC’s portfolio included 253 aircraft of different type

SSJ100 LEASING DEVELOPMENT

Since 2015, STLC has implemented the project to promote the sales of SSJ100 aircraft through the operating and financial leasing .

According to a decision by the Russian Government (government decree № 1171 from 02.10.2018) STLC received a subsidy worth USD 148 million* in order to co-finance the purchase of 8 SSJ100 units in 2018-2019 for further leasing to airlines

A total of 39 SSJ100 aircraft were leased as of 31.12.2018

SUPPORT OF DOMESTIC AIRCRAFT CONSTRUCTION AND SMALL AVIATION

STLC participates in the project localizing the manufacture of Let L-410. In 2016-2017, STLC was provided with additional funds of USD 30.2 million* from budgetary funds to purchase and lease out 10 L-410 aircraft

As of 31.12.2018, a total of 7 L-410 aircraft were leased to Russian regional airlines

Under the prolongation of a program of domestic manufacturing of L-410 aircraft in 2018 a decree has been signed (government decree №982 from 23.08.2018) stating that STLC will redirect USD 15.1 million of the capital funds for purchasing 4 L-410 aircraft in 2019

DOMESTIC HELICOPTER LEASING DEVELOPMENT

STLC is the largest customer of domestically-produced helicopters for the sanitary aviation. In 2016-2017 STLC received a contribution to the authorized capital worth USD 122.3 million* of budget funds for purchasing and leasing 60 units of domestic helicopters (including 42 Mi-8 helicopters and 18 Ansat helicopters) equipped with medical modules. As of 31.12.2018 STLC delivered 56 units to lessees.

In accordance with the decision by the Russian Government (government decree №916 from 06.08.2018, government decree №982 from 23.08.2018) STLC received a subsidy worth USD 120.8 million* for purchasing and further leasing of 50 more helicopters (39 Mi-8 units and 11 Ansat units) in 2019-2020.


Other Innovative

gondola cars

Gondola cars

Hoppers

Tank cars

38 50%

19 26%

75 thousand

units

3 4%

6 8%

2 3%

20122011 2013 2014 2015 2017 20182016

5,420

9,661

16,62618,543 18,562

75,248

44,987

30,303

Flatcars 7 9%

RAILWAY TRANSPORT LEASING

STLC IS THE LEADER IN THE RUSSIAN SEGMENT OF RAILWAY TRANSPORT LEASING

As of 31.12.2018, STLC’s freight car fleet has 75 * thousand units, which is 7% of the total fleet of freight cars in Russia

STLC is the leader in terms of the fleet size of innovative cars (the total amount of innovative cars leased out is 27.8 thousand units)

RENOVATION OF THE COMMUTER ROLLING STOCK Leased to Central Exurban Passenger Company 30 units of

eleven-car EP2D electric trains made by DMZ, OJSC A deal for the leasing out of 8 units of new locomotive-

hauled passenger cars (model 61- 4458), equipped with lifting devices for disabled passengers and accompanying personnel, produced by JSC Tver Carriage Works, was concluded with "Sverdlovsk suburban company" JSC

A deal was concluded on the leasing out of 5 four- wagon EP3D electric trains, produced by Demikhovo Machinebuilding Plant, to "Volga-Vyatka suburban passenger company". The electric trains will be used within the Nizhny Novgorod region, the control wagons are equipped with devices for disabled passengers

DYNAMICS OF GROWTH OF STLC'S CAR FLEET, units

STLC'S CAR FLEET STRUCTURE, thous. units, %

KEY PARTNERS:

*Taking the contracted cars into account (as of 31.12.2018, 2018, 56,3 thousand cars were delivered to lessees)


2013 2014 2015 2016 2017 2018

167.7

110.3

257.3

597.1

928.8

1,572.4

36 43%

32 38%

4 5%

3 4%

8 10%

83 units

WATER TRANSPORT LEASINGSTLC IS THE LEADER IN THE RUSSIAN SEGMENT OF WATER TRANSPORT LEASING

STLC is the leading leasing company in terms of the volume of new business and leasing portfolio in the segment*

As of 31.12.2018, the Company’s fleet included 83 units of various types of ships

DEVELOPMENT OF THE DOMESTIC SHIPBUILDING INDUSTRY AND IMPORT SUBSTITUTION PROCESS STIMULATION

In 2014-2018 STLC placed orders for the construction of 58 vessels in domestic shipyards, 32 units of which were already transferred to lessees

The construction of ships is carried out at shipyards of Krasnoye Sormovo, OJSC, Nevsky Shipyard, LLC, Nefteflot, CJSC, and Okskaya Shipyard, OJSC

STLC implements the development program of the Vanino-Kholmsk ferry crossing to connect the Island of Sakhalin with the mainland Russia. The construction of 2 ferries at the public company"Amur Shipbuilding Plant" was launched in 2017 to replace obsolete ships

A subsidy in the amount of USD 89.1 million** was allocated in 2018 for the purchase of 13 vessels (11 units of “river-sea” class dry cargo of the RSD59 project and 2 units of high-speed hydrofoil ships “Kometa” 120M in 2019-2021) for further delivery under leasing agreements

STLC'S INVESTMENT IN WATER TRANSPORT LEASING, USD million**

STLC'S FLEET STRUCTURE, units (%)

* according to RAEX as of 30.09.2018** According to the exchange rate of the ruble 1 USD= 66.2 RUB

KEY PARTNERS:

Oil tankers

OtherDry cargo

ships

Cargo and passenger ferries

Tow boats


As part of the Order, STLC has launched a pilot program of non- commercial leasing for supply of passenger motor vehicles running on gas engine fuel

STLC uses federal budget investments and return funds from lessees under non-commercial leasing programs for the supply of passenger vehicles on gas-engine fuel and electric transport on preferential terms

ENERGY EFFICIENTTRANSPORT LEASING

ORDER OF THE GOVERNMENT OF THERUSSIAN FEDERATION NO. 767-R DATED MAY 13, 2013 “ON REGULATION OF RELATIONS INTHE USE OF GAS ENGINE FUEL , INCLUDING NATURAL GAS, AS ENGINE FUEL”

STLC'S PROCUREMENT OF ENERGY EFFICIENT MACHINERY IN 2012 – 2018

FEDERAL BUDGET INVESTMENTS IN THE AUTHORIZED CAPITAL OF STLC IN 2015

STLC'S INVESTMENTIN THE ENERGY EFFICIENT MACHINERY MARKETIN 2012 – 2018

1.9 THOUS. UNITS

74.7 MILLION USD**

211.5 MILLION USD**

STLC IS A ONE OF THE LEADERS IN LEASING OF VEHICLES RUNNING ON GAS ENGINE FUEL , AND GROUND ELECTRIC VEHICLES

STLC plans to expand its participation in the implementation of non- commercial leasing programs in Russian regions with a developed or developing gas-engine fuel infrastructure. The Company already carries out supplies to the following constituent entities of the Russian Federation:

* Order of the Russian Government from December 30th, 2014 № 2788-r** According to the exchange rate of the ruble 1 USD= 66.2 RUB

Tula Region Chelyabinsk Region Sverdlovsk Region Samara Region Omsk Region Yamalo-Nenets Autonomous Area

Republic of Komi Republic of Mordovia Saint Petersburg and Leningrad Region Volgograd Region Republic of Crimea and Sevastopol*


100%

100%

STLC (Russia)

GTLK Asia LTD (Hong Kong)

GTLK Europe DAC (Ireland)

GTLK Middle East (Dubai)

INTERNATIONAL LEASING DEVELOPMENTGTLK GLOBAL BUSINESS - FOREIGN LEASING PLATFORM CREATED (BASED ON GTLK EUROPE DAC, GTLK MIDDLE EAST, AND GTLK ASIA LTD) TO DEVELOP NON-RESOURCE EXPORT

GTLK Europe DAC – STLC’s subsidiary registered in Ireland in 2012 In 2018, in order to diversify the geography of borrowing and to

facilitate the attraction of financing in the Asian region following companies were registered: GTLK Asia LTD in Hong Kong and GTLK Middle East in Dubai

GTLK GLOBAL BUSINESS successfully attracts financing in international debt capital markets as an independent borrower under the guarantee of STLC

Key priorities of GTLK GLOBAL BUSINESS: - Development of international leasing of aircraft and water

transport- Optimization of the cost of extrabudgetary investments attracted

by STLC for the development of the transport industry- Promoting the export of domestic equipment- Export development of financial (leasing) services

GTLK GLOBAL BUSINESS PORTFOLIO ALLOCATION, units

AIR FLEET

FLEET OF SHIPS

KEY CUSTOMERS:

GTLK GLOBAL BUSINESS Air transport leasing Water transport leasing International funding

Oil tanker

Maritime cranes

Dry cargo vessels

42 units

13 units

2 units

19 units

2 units

1 unit

63 units

16 units

STLC LEASING INFRASTRUCTURE: RUSSIA AND WORLD


The Lavna coal transshipment complex in the Murmansk sea port is located in the Murmansk Region, on the west bank of the southern branch of the Kola Bay, in the mouth of the Lavna River, near the village of Mezhdurechye

The project involves the construction of a modern port complex for coal transshipment using the newest equipment, with a capacity of 18 million tons per year, and the construction of access railway tracks for private use from the Lavna Station to the port complex with a length of 2.3 km

The project is implemented in accordance with the State program of the Russian Federation "Development of transport system" included in the Transport strategy and the Strategy for development of railway transport of the Russian Federation for the period up to 2030

Implementation of the Project by 2020 is attributed to the existence of Orders of the President of the Russian Federation V. Putin No. PR-1881 of 15.09.2017 (to take comprehensive measures for the implementation of the Project in time)

The increase in the volume of exports of energy coals by construction of new transshipment facilities In the territory of the Russian Federation

Diverting cargo flows from the Baltic to Russian ports

Entering new sales markets due to increase in the carrying capacity of ships

Construction of the Lavna coal transshipment facility has been launched Concession agreement to finance, construct and operate all infrastructure objects of Murmansk seaport has been made with LLC Sea trading port «Lavna» (Order of the Government of Russian Federation from 01.10.2018 № 2111-r)

EFFECT FOR TRANSPORTINFRASTRUCTURE

CURRENT IMPLEMENTATION STATUS:

TRANSPORT INFRASTRUCTURE DEVELOPMENT. CONSTRUCTION OF COAL TRANSSHIPMENT COMPLEX LAVNA


SUCCESSFUL PLACEMENT OF THE EUROBONDS

The main investors included the largest institutional investors from Great Britain, Russia and Europe

Both issues of Eurobonds were in great demand – the order books made up USD 2.3 – 2.5 billion (oversubscribed 4.5 – 5x) received from large international institutional investors

Twice, STLC reduced the benchmarks for the coupon rate for each issue, having closed the book at the lower limit of the final range:- 5.95% per annum – issue 1-5.125% per annum – issue 2

Placement of Eurobonds of STLC (issue 2) is the first since 2013 7-year issue of Eurobonds from the financial sector of the Russian Federation

The issue of Eurobonds of STLC made it possible to extend the debt portfolio and create the conditions for subsequent borrowings at the rates convenient for STLC

* Till September, 2016 - GTLK Europe Limited

2016 20162017 2017

38% 56%24%48%

20%

23%

17% 18%

6%

30%

13% 16%36%

12%

3%10%

6%10%9% 5%

AsiaUSA (offshore) RussiaSwitzerlandСontinental EuropeGreat Britain

Hedge funds and insurance companiesPrivate banksBanksManagement companies and funds

GEOGRAPHICAL SPREAD OF INVESTORS TYPE OF INVESTORS

PARAMETERS ISSUE 1 ISSUE 2

Issuer GTLK Europe DAC *

Guarantor STLC

Issue volume USD 500 million USD 500 million

Circulation period 5 years 7 years

Coupon rate 5.95% per annum 5.125% per annum

Placement price 100% of the nominal

Circulation commencement date July 19, 2016 May 31, 2017

Format Regulation S

Listing Irish Stock Exchange

Issue ratings Ba3 (Moody’s) / BB- (Fitch)

Ba3 (Moody’s) / BB (Fitch)

Lead managers J.P. Morgan, Renaissance Capital, UBS, VTB Capital

J.P. Morgan, Renaissance Capital, Societe Generale, VTB Capital, Gazprombank, Alfa Capital Markets


2012 2013 2014 2015 2017 9M 2018 2018***2016

995.4

1.308.1Including subsidies worth USD 312 million subsidies received in 2018

20% 13% 11% 25% 25% 19% 14% 17%

2012 2016 2017 9M 2018

41%

5%

51%

3%5.9

2013 2014 20152012 2016 2017 9M 2018

40%

36%

5%

17%6.9

2013 2014 2015

SUSTAINABLE BALANCE STRUCTURE STLC’s assets increased exponentially due to growth

in volume of the new business The Company effectively diversified the structure of

its obligations, attracting bond loans in rubles and foreign currency

STLC maintains a high level of capital adequacy due to additional contributions to its capital and continuous improvement of its operational efficiency

CAPITAL*, USD million

*According to IFRS** Average annual growth rate ***Forecast value for 31.12.2018

LIABILITIES*, USD billion

Note: Numbers may not sum up correctly due to rounding Source: according to IFRS

Loans received

Financial leasing liabilities

Bonds issued

Other liabilities

ASSETS*, USD billion

Net investment in leasesAssets under operating lease

Cash and cash equivalents

Other assets

Capital/Assets, %

In 2016, USD 187 millionof contributions to the capital

In 2017, USD 172.3 million ofcontributions to the capital

In 2015, USD 528 million of contributions to the capital

154 155 158

685.8

874.6

986.4

30% 32%41%61%59%98%

18%

6%

29%14%

10%

49%

57%

29%

24%

28%

3%

5%

1%

1%3%

2%

2.6

4.2

2.1

1.31.1

0.6

47.8%**

31% 40%23%57%65%74%

38%

39%

45%

30%16%

4%

4%

11%

3%7%

10%

27%

17%

21%

10%12%

15%

3.5

5.1

2.8

1.51.2

0.8

46.2%**


504.5

6%

52%

42%

0,5%

Significant revenue growth, primarily due to the development of the operating leasing segment

STLC maintains a high operational efficiency while maintaining the ratio of operating expenses to total assets at less than 1% in the first months of 2018

REVENUE AND MARGINS

REVENUE, USD million

Note: Figures cannot be summed up correctly due to rounding*The ratio of administrative costs and average annual assets (according to IFRS

OPERATIONAL EFFICIENCY OPERATIONAL COSTS / ASSETS*, %

20122012 20132013

78.5

113.25%

3%160.1

252.2

450.1

10%

5%

20142014 20152015 2016 2016 2017 9M 20182017 9M 2018

1.8%

96%4%

3%

22%

43%

50%

92% 75% 47% 45%

1.4%

1.1%1.0%

0.7% 0.7%

Finance lease income

Operating lease income

Other interest income

333.86%

59%

35%


IFRS FINANCIAL STATEMENTS BALANCE

Balance [USD million]* 2012 2013 2014 2015 2016 2017 9M 2018

Assets 782.25 1,241,95 1,466,56 2,797,63 3,506,00 5,144,79 6,939,62

Cash and cash equivalents 81.95 113.08 41.96 297.40 143.43 189.20 350.80

Investments in securities - 30.47 - - - 0 0

Net investment in leases 580.91 805.82 839.88 639.73 1,070,88 2,053,11 2,923,93

Assets under operating lease - 204.12 434.37 1,267,60 1,331,42 2,029,77 2,481,42

Equipment purchased for leasing purposes 0.54 1.00 - - - 0 11.07

Advances to equipment leasing providers 70.77 35.36 86.74 491.60 599.00 541.06 762.99

Investment property 2.98 2.92 2.85 2.81 90.24 94.00 117.90

Fixed assets and intangible assets 0.77 0.73 0.69 0.97 0.98 2.02 2.30

VAT recoverable 17.25 8.58 - 18.78 99.59 60.17 52.79

Current tax assets 0.62 2.19 - 0.59 4.08 2.24 1.00

Deferred tax assets 2.33 4.41 10.95 15.66 11.99 30.35 33.47

Other assets 24.14 33.28 49.11 62.49 137.07 142.87 201.95

Equity capital 154.00 155.38 157.98 686.21 874.40 985.82 995.15

Share capital 151.07 151.07 151.07 678.93 866.45 1,036,81 1,036,81

Undestributed profits 2.93 4.31 6.90 7.27 7.95 -51.00 -41.66

Liabilities 628.26 1,086,57 1,308,58 2,111,42 2,631,60 4,158,97 5,944,47

Loans received 612.69 947.78 1,111,53 869.52 790.38 1,325,17 2,453,47

Issued bonds 607.08 1,301,18 2,372,34 3,015,42

Liabilities under financial leasing - 110.98 177.87 608.66 468.60 266.16 282.67

Trade and other payables 4.49 4.88 8.99 13.93 55.42 176.86 148.29

Advances received 7.84 5.12 8.19 11.33 14.26 11.81 28.29

Derivative financial instruments - 15.02 - - - - 4.94

Current tax liabilities 3.25 2.79 2.02 0.92 1.75 0.51 0.91

Deferred tax liabilities - - - - - 6.12 10.47

Total equity capital and liabilities 782.25 1,241,95 1,466,56 2,797,63 3,506,00 5,144,79 7,090,68



Statement of Comprehensive Income [USD million]* 2012 2013 2014 2015 2016 2017 9M 2018

Interest income from leasing operations 76.09 104.02 120.26 119.55 118.22 200.91 214.21

Other interest income 3.02 6.06 4.31 24.29 17.73 20.98 30.38

Income from operating leasing 0.00 3.58 35.09 108.72 178.76 196.10 261.75

Operating leasing depreciation 0.00 -1.10 -15.60 -51.80 -73.99 -101.84 -128.72

Interest expenses -50.18 -76.80 -101.96 -153.04 -208.60 -264.38 -264.40

Net interest income 28.93 35.74 42.10 47.73 32.13 51.77 85.50

Loss from interest-bearing assets -13.13 -10.65 -19.43 -28.28 23.75 -27.98 -8.97

Net interest income after impairment 15.80 25.11 22.67 19.46 55.88 23.79 76.53

Administrative costs -11.74 -14.53 -14.74 -21.57 -22.60 -29.58 -28.75

Other operating income and costs 1.19 0.56 6.81 17.49 1.25 -21.13 -2.46

Income less costs from revaluation of foreign currency 0.00 0.23 42.36 41.87 -8.22 7.21 -1.03

Loss on impairment of non-interest assets -3.55 -7.66 -52.07 -54.71 -16.75 -47.30 -33.08

Profit (loss) before taxation 1.71 3.70 5.03 2.52 9.55 -67.01 11.21

Tax on income -0.27 -1.75 -1.03 -1.93 -6.45 9.08 -3.31

Profit for the period 1.44 1.93 4.00 0.59 3.10 -57.93 7.90

Other comprehensive income -0.27 -0.06 -0.21 0.30 -1.89 -1.01 5.20

Total aggregate income 1.16 1.87 3.79 0.89 1.21 -58.94 13.10

KPI [key performance indicators] 2012 2013 2014 2015 2016 2017 9 M 2018

ROE (Net Profit (Comprehensive Income) / Annual Average Capital) 0.93% 1.25% 2.56% 0.26% 0.17% -6.52% 1.76%

Equity / Assets 19.69% 12.51% 10.77% 24.53% 24.94% 19.16% 14.34%

IFRS FINANCIAL STATEMENTS STATEMENT ON COMPREHENSIVE INCOME



STLC actively cooperates with the relevant associations and state corporations:

And maintains strong partnership relations with leading financial institutions:

STLC'S PARTNERSSTLC cooperates on an ongoing basis with more than 70 manufacturers and dealers of machinery and constantly expands the range of its partners:

STATE TRANSPORT LEASING COMPANY 73 Respublika St. , Suite #100, Salekhard, Yamalo-Nenets Autonomous Area, 629008

Separate business unit in the city of Moscow: 31a Leningradsky Avenue, bldg #1, Moscow, 125284

+7 (495) 221-0012

www.gtlk.ru

february 2019 no1 no1 no1 no2 12 - gtlk.ru · stlc is the leading company in russia in terms of...

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