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Investor Relations, Equity and Debt

Share Capital

PJSC Aeroflot’s charter capital as at 31 December 2016 was RUB 1,110,616,299, consisting of 1,110,616,299 ordinary registered uncertificated shares with a par value of RUB 1 each. The Company did not issue preferred shares.

State registration numbers of PJSC Aeroflot ordinary share issues are 73-1 p-5142 (dated 22 June 1995) and 1-02-00010-A (dated 1 February 1999). The issues were merged by Decree No. 04-168/r of the Federal Securities Commission dated 23 January 2004, following which the issues of PJSC Aeroflot ordinary shares were assigned state registration number 1-01- 00010-A, dated 23 January 2004.

In addition to outstanding shares, the Company has the right to issue a further 250 million ordinary registered shares (authorised shares). No additional shares were issued in 2016.

The total number of PJSC Aeroflot’s shareholders as at 31 December 2016 was 11,377, compared to 10,534 as at 31 December 2015, comprising mostly individuals.

PJSC Aeroflot’s register of shareholders is kept by JSC Independent Registrar Company (License No. 045-13954-000001, issued by the Bank of Russia). The register holder’s details are provided in the Contacts section at the end of this Annual Report.

Shareholder structure as of 31 December 2016

Shareholder structure as of 31 December 2016

Information on the key shareholders of PJSC Aeroflot

Holder Status* As at 31 December 2015 As at 31 December 2016Change of stake in share capital, p.p.
Number of shares Stake in share capital, %Number of sharesStake in share capital, % капитале, %
Legal entities   1,041,161,081 93.75 1,048,923,212 94.45 +0.70
Russian Federation O 568,335,339 51.17 568,335,339 51.17 -
CJSC National Settlement Depository N 379,700,230 34.19 387,462,361 34.89 +0.70
LLC AEROFLOT-FINANCE** O 53,716,189 4.84 53,716,189 4.84 -
LLC RT-Business Development O 16,720,724 1.51 16,720,724 1.51 -
LLC Aviacapital-Service*** O 22,688,599 2.04 22,688,599 2.04 -
Individuals**** O 69,455,218 6.25 61,693,087 5.55 -0.70
*O means “owner”, N means “nominee”.
**LLC Aeroflot-Finance’s stake includes the stake held by nominees, with the number of phantom shares unchanged since 2014.
***LLC Aeroflot-Finance’s stake includes the stake held by nominees.
****Including the management and members of the Board of Directors.

Shares

PJSC Aeroflot shares and depositary receipts are traded on the stock market. The Company’s ordinary shares are traded on the Russian market, and global depositary receipts (GDRs) and American depositary receipts (ADRs) are traded on foreign markets.

Shares of PJSC Aeroflot are traded on the Moscow Exchange, where as at 31 December 2016 they were included in the Level 1 Quotation List (AFLT: MOEX).

Securities transactions are subject to the T+2 trading mode. PJSC Aeroflot shares are included in the main Russian stock indexes: MICEX Index, MICEX BMI (broad market), MICEX TRN (transport companies), and RTSI.

Aeroflot share price performance vs MICEX Index, 2016

Aeroflot share price performance vs MICEX Index, 2016

Aeroflot share price performance vs Bloomberg Airlines Index, 2016

Aeroflot share price performance vs Bloomberg Airlines Index, 2016

PJSC Aeroflot share price and trading volumes, 2016

PJSC Aeroflot share price and trading
volumes, 2016

Average daily trading volumes on the Moscow Exchange

Average daily trading volumes
on the Moscow Exchange

Aeroflot share price highs and lows
RUB

Aeroflot share price highs and lows<br /><span>RUB</span>

Price per Aeroflot share
RUB

  2012 2013 2014 2015 2016
First trading day 50.9 46.2 83.2 33.2 56.2
High 55.5 85.1 88.0 61.0 158.4
Low 38.8 46.2 29.9 32.5 50.4
Last trading day 44.9 83.8 32.2 56.1 152.9

As at 31 December 2016, the Company’s market capitalisation was RUB 169.8 billion, up 172.5% y-o-y.

In the year to date, PJSC Aeroflot share price has been outperforming both Russia’s Micex Index and the global market’s Bloomberg Airlines Index. The spectacular growth in Aeroflot’s market cap was fuelled mostly by strong 1H and 9M performance driven by solid operational results and the rouble’s appreciation against major global currencies.

Despite local currency appreciation in emerging markets (particularly, the Brazilian real and the South African rand), which bolstered the share prices of airlines in a number of emerging markets, some markets have remained volatile, which put the emerging markets’ airlines on a downward trajectory. Moreover, the share prices of European airlines came under additional pressure from the Brexit process, dramatic developments in a number of European cities, and strike actions by staff in certain airlines.

Analyst recommendations

Date Recommendations Bloomberg consensus forecast, RUB Target price range, RUB Number of analysts
31.12.2016
158.0 121.0 - 184.0 12
31.12.2015
66.9 26.4 - 81.0 13

GDR and ADR Programmes

Outside Russia, PJSC Aeroflot shares are traded as global depositary receipts (GDRs) at the over-thecounter section of the Frankfurt Stock Exchange and as American depositary receipts (ADRs) on the US over-the-counter market. One GDR/ADR represents 5 ordinary shares. Deutsche Bank Trust Company Americas acts as the depository bank, and LLC Deutsche Bank is the custodian. A total of 14,430,910 shares were converted into GDRs as at 31 December 2016, representing 1.3% of the charter capital. As at 31 December 2016, the price of one depositary receipt stood at EUR 11.6, up 240.2% during the year.

PJSC Aeroflot GDR programme

Programme type Sponsored Level-1 GDRs under Regulation S and Rule 144A
Ratio (shares: GDR) 5:1
Ticker AETG
ISIN US69343R1014, US69343R2004

PJSC Aeroflot Level-1 ADR programme

Programme type Sponsored Level-1 ADRs
Ratio (shares: ADR) 5:1
Ticker AERZY
ISIN US69343R3093

Corporate Bonds

In 2016, PJSC Aeroflot fully repaid its BO-03 exchangetraded bond, traded on the Moscow Exchange. A total of 5,000,000 bonds were repaid on 31 March 2016.

Coupon on PJSC Aeroflot’s bonds in the reporting year was paid in full and in due time:

  • 31 March 2016: BO-03 bond payments of RUB 206,950,000 for the sixth coupon period.

No new debt was issued in 2016.

Credit Ratings

PJSC Aeroflot has a credit rating from Fitch Ratings. In March 2016, the rating agency affirmed the Company’s local and foreign currency long-term issuer default rating at “B+”, outlook Stable.

Dividend Policy

Dividend Policy is a key element of the corporate governance framework and a key measure of a company’s performance in upholding the rights of its investors.

PJSC Aeroflot has in place the Regulations on the Dividend Policy, which seek to maximise the transparency of procedures used to determine the amount of dividends and pay them out to the benefit of shareholders and investors. The Regulations determine the approach used by the Board of Directors to make recommendations for the General Meeting of Shareholders on profit distribution, including dividend payout.

The key principles of PJSC Aeroflot’s dividend policy are as follows:

  • Aeroflot Group’s consolidated net profit under the International Financial Reporting Standards (IFRS) forms the base for calculating dividends.
  • The amount of dividend is calculated using a tailored system of ratio indicators, which factors in the results of the reporting year, Aeroflot Group’s debt ratio and mid-term financial plan.
  • The target level of dividend pay-outs is set at 25% of Aeroflot Group’s IFRS net profit.

The Annual General Meeting of Shareholders held on 27 June 2016 resolved not to declare or pay out dividends on PJSC Aeroflot shares for the fiscal year 2015.

PJSC Aeroflot’s dividend history

  2011 2012 2013 2014 2015
Dividend per share, RUB 1.81 1.16 2.50 - -
Total dividends, RUB thousand 2,000,018  1,292,313 2,774,195 - -
Total amount actually paid, RUB thousand 1,999,927 1,292,149 2,773,621 - -
Dividend payout ratio, % 19.2 26.0 25.0 - -
Accounting standards used to calculate the net profit RAS RAS RAS RAS RAS
Form and other terms of payment for declared dividends In cash In cash In cash - -

Investor Relations

The Company is particularly focused on relations with both existing and prospective investors. In its interactions with investors, PJSC Aeroflot is committed to providing objective, reliable and consistent information about its activities and complies with current disclosure standards, seeking to increase information transparency as much as practically possible

.

The Company maintains a continued dialogue with shareholders and investors to ensure that securities market participants get complete information about its activities. The Company timely discloses material information on its operations as press releases and material facts via authorised disclosure platforms in full compliance with Russian laws. The Company regularly discloses information in its IFRS and RAS financial statements, and in its investor presentations.

PJSC Aeroflot interacts with investors via the following channels:

  • сonference calls with the Company’s management;
  • regular meetings with investors and shareholders;
  • participation in all major conferences hosted by brokerage houses;
  • site visits to the Company’s facilities;
  • dedicated events for investors and shareholders, with presentations by the Company’s management (Capital Markets Days).

In October 2016, the Company hosted its annual Capital Markets Day, with presentations given by the Company’s top management. The event was attended by over 60 investors, with 30 more investors linked up via a video webcast, specifically set up for those who could not attend in person.

Presentations by the management were followed by site visits: a tour of PJSC Aeroflot’s Flight Crew Training Centre at Sheremetyevo airport and maintenance hangars where aircraft are serviced, as well as visits to the Hub Control Centre and Operational Control Centre, the units responsible for direct support of the Company’s operations.

Meetings with PJSC Aeroflot’s investors, shareholders, and other stakeholders

Geography of investment funds with shareholdings in PJSC Aeroflot, 2016

In 2016, the Company’s investor relations were recognised by a number of awards:

  • Aeroflot’s IR team received Grand Prix for Best Overall Investor Relations, Small Cap, from IR Magazine Russia & CIS and for the third year in a row was named the best in the transport sector;
  • Aeroflot’s IR team was also placed high in the overall rankings for Russian IR teams and rankings of the European IR teams in the transport sector, compiled by Extel based on the independent 2016 Russia Investor Relations Survey;
  • Aeroflot’s Annual Report 2015 was named the winner in the Best Annual Report in the Consumer Sector category and received an award in the Best Annual Report of the Company with the Market Capitalisation of RUB 40 billion to RUB 200 billion category of the Annual Report Competition hosted by the Moscow Exchange;
  • Aeroflot’s Annual Report 2015 also received the highest award, a platinum medal award, in the Transportation & Logistics Industry category and placed in the top 10 of the best annual reports by Russian companies at the 2015 Vision Awards, hosted by the League of American Communications Professionals (LACP);
  • Aeroflot’s IR website was announced the winner of the Investor Relations Standard of Excellence award at the WebAwards 2016 Competition hosted by the Web Marketing Association, and was also named the best corporate IR website in the transport sector in the corporate IR website competition held by Russia’s Financial Communications and Investor Relations Alliance (ARFI);
  • Aeroflot was shortlisted for the Best Use of Digital Communications – International award (IR website, top 3) and the Best Annual Report – International award (Top 3) in the IR Society 2016 Best Practice Awards (UK).
Grand Prix
for best overall investor relations