#1Goldman Sachs Russian Corporate Days presentation Etalon Group 24 September 2015#2Disclaimer IMPORTANT: You must read the following before continuing. The following applies to the presentation (the "Presentation") following this important notice, and you are, therefore, advised to read this important notice carefully before reading, assessing or making any other use of the Presentation. In assessing the Presentation, you unconditionally agree to be bound by the following terms, conditions and restrictions, including any modifications to them any time that you receive any information from Etalon Group Limited ("Etalon Group" or the "Company") as a result of such access. 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Forward-looking statements include statements regarding: our construction programme and future construction and development projects (information concerning which is being provided solely on an indicative basis for information purposes only and is subject to change without notice); strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures; growth in demand for products; economic outlook and industry trends; developments of markets; the impact of regulatory initiatives; and the strength of competitors. Such forward-looking statements are based on numerous assumptions by management regarding present and future business strategies and the environment operating in the future. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control. Neither the Company, nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this Presentation. Construction programme area figures set out in this presentation, including the "Total area of construction programme" figures, may not reflect the final construction programme area figures. Whether such figures do or do not reflect the final construction programme area figures, they may not reflect the revenues ultimately recognized by Etalon. Calculating construction programme area figures is an inherently subjective process, and is subject to uncertainty. In addition, the construction programme area figures may not be directly comparable to figures given in respect of similar portfolios held by other real estate development businesses in the Russian market as a result of different assumptions and methodologies. In particular, the "Total area of construction programme" figures include area in which governmental authorities, and other third parties, have an interest. The information contained in this document is provided as at the date of this Presentation and is subject to change without notice. Neither the Company nor any of its agents, directors, officers, employees, shareholders, affiliates, advisors or representatives intend or have any duty or obligation to supplement, amend, update or revise any information contained in this Presentation. This Presentation contains certain unaudited half- and full-year financial information which has been prepared based on the Company's reviewed management accounts. This Presentation contains also certain full- and half-year financial information based on the Company's audited consolidated IFRS accounts. It also includes certain non-IFRS financial information, such as Earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, Working capital and free cash flow ("FCF") which has not been audited or reviewed by the Company's auditors. Neither the Presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions. This Presentation does not contain or constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States. 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Any person in the United Kingdom who is not a Relevant Person should not act or rely on this Presentation or any of its contents. Neither this Presentation nor any copy of it may be taken or transmitted into Australia, Canada, South Africa, the Hong Kong Special Administrative Region of the People's Republic of China or Japan or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of applicable securities law. The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. 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The Company's securities have not been and will not be registered in the Russian Federation or admitted to public placement and/or public circulation in the Russian Federation except as permitted by Russian law. This Presentation does not constitute or form a part of, and should not be construed as, (i) an advertisement of any securities of the Company, or an offer, or an invitation (including an invitation to make an offer) by or on behalf of the Company in the Russian Federation or in any other jurisdiction or (ii) any promise or representation that any such offer or invitation will be made and shall not form the basis of, nor may it accompany, nor form part of, any contract to acquire any securities of the Company in the Russian Federation or in any other jurisdiction. This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require registration of licensing within such jurisdiction. By receiving and reading this Presentation, you agree to be bound by the restrictions in this disclaimer, and acknowledge that that you will be solely responsible for your own assessment of the market, the market position of the Company and any securities of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business. ✓ Etalon Group 1#3Today's presenting team ✓ Etalon Group Anton Evdokimov Chief Executive Officer Member of the Board of Directors With Etalon since 1998 Kirill Bagachenko Head of Corporate Investments and IR Member of the Board of Directors With Etalon since 2013 2#4Contents 1 Operating Results 2 Financial Results 3 Landbank Valuation 4 2015 Deliveries 5 Appendix Etalon Group 3#51 Operating Results Etalon Group EEEEEEEEE ATNUMZ EEFERE TLELEEP Golden Bay, 2008#61H 2015 Operating results - a cool-down after the 2014 rush 1H 2015 project deliveries breakdown, ths sqm Project Tsar's Capital NSA delivered in 1H 2015, ths sqm 50.3 Swallow's Nest 40.3 Total 90.6 Deliveries, ths sqm 76 16 Transfers, ths sqm +19% 91 103 +33% 137 1H 2014 1H 2015 1H 2014 11H 2015 Summary of 1H 2015 operating results Cash collections, mln RUB Average price, RUB per sqm 1H 2015 1H 2014 -30% +6% Number of contracts 1,859 4,333 88,954 14,835 New sales, sqm 88,963 203,994 New sales, mln RUB 7,914 17,173 Average down payment, mln RUB 10,415 84,184 76% 74% Share of mortgage sales 15% 20% 1H 2014 1H 2014 1H 2015 1H 2015 Source: Company data ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 5#72Q 2015 Operating results show signs of rebound in demand Summary of 2Q 2015 Operating Results Deliveries, ths sqm Transfers, ths sqm 2Q 2015 2Q 2014 Number of contracts 831 2,033 New sales, sqm 41,973 94,934 +19% 91 103 +33% 137 New sales, mln RUB 4,110 8,095 Average down payment, mln RUB 16 76 69% 74% Share of mortgage sales 20% 23% 1H 2014 1H 2015 1H 2014 1H 2015 The regional sales network generated 43% of new contracts New contract sales, mln RUB -36% -45% 1,635 -61% • Share of Moscow Metropolitan Area contracts reached 30% in 2Q 2015, up from 21% in 2Q 2014 1,359 1,115 • Average down payment was 69% Source: Company data Apr-15 May-15 - change year-on-year, % ✓ Etalon Group Operating Results Financial Results Landbank Valuation Jun-15 2015 Deliveries Appendix 6#8Inventory of completed housing drives new contract sales in 2Q 2015 2Q 2014 New contract sales by project, sqm 2Q 2015 New contract sales by project, sqm Galant Other projects Molodejny Galant 4% 6% Moscow Gates Molodejny 2% 2% 3% Other projects 12% Jubilee Estate 3% Rechnoy 8% Jubilee Estate Swallow's Nest 3% Samotsvety 4% Swallow's Nest 26% 25% 6% Rechnoy 8% To 30 Etalon City 2% 19% 20% Tsar's Capital Emerald Hills Significant portfolio diversification with growing share of prime location projects 9% Etalon City 22% Emerald Hills 16% Tsar's Capital Average price, RUB/sqm Share of prime location projects reached 35% in 2Q 2015, compared to 25% in 2Q 2014 110,000 106,228 105,297 Share of Etalon City increased to 9% following launch of sales at 2 new residential buildings 95,923 97,522 93,122 93,223 95,000 90,860 88,811 84,385 85,315 97,918 • 2 new project launches scheduled for 2H 2015 will further improve the product mix 79,083 80,347 81,908 80,000 87,887 89,402 90,511 84,286 85,671 85,271 83,234 80,606 78,484 80,946 75,120 74,073 65,000 Source: Company data 50,000 2012 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2015 apartments ―total ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 7#9Mortgage market rebounded after launch of State support programme Share of mortgage sales, % +9 p.p. 11% 20% 1Q 2015 2Q 2015 Highlights Apartments at Etalon Group development projects in the Moscow and St. Petersburg Metropolitan Areas are eligible for the Russian government's subsidised mortgage programme Etalon Group works with major domestic banks that offer subsidised mortgage programmes, including Sberbank, VTB24, Rosbank, Bank St. Petersburg and Absolut Bank Basic terms of the subsidised mortgage programme: minimum down payment: 20% • • . loan amount: up to RUB 8 million maturity: up to 30 years maximum interest rate: 12% Source: Company data. ✓ Etalon Group Share of mortgage sales in 2Q 2015, % 23% 19% 19% Apr-15 May-15 Jun-15 Average mortgage rate dynamics in Russia (1) 15.0% 14.5% 14.0% 13.5% 13.0% 12.29% 12.5% 12.0% 11.5% 11.0% (1) Operating Results Financial Results Apr-14 May-14 Jun-14 CBR data Landbank Valuation Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 12.45% Dec-14 Jan-15 2015 Deliveries 14.53% 14.22% 14.16% 12% 13.93% subsidised mortgage interest rate Feb-15 Mar-15 Apr-15 May-15 Jun-15 Aug-15 Jul-15 Appendix 8#10New launches in 2Q-4Q will provide impulse for new sales in 2015 Launch of sales, ths sqm 185 2013 +182% 522 +55% 811 Launch of sales in 2015, by quarter, ths sqm No projects launched in 1Q 2015 85 295 431 2014 2015 1Q 2015 Planned launch of sales 2Q 2015 Actual launch of sales 3Q 2015 4Q 2015 Planned launch of sales Actual launch of sales Source: Company data Sales launched for two residential buildings at Tsar's Capital and a parking complex at Etalon City in 2Q 2015 ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 9#112 Financial Results Etalon Group Galant, 2014#12Robust revenue growth in 1H 2015 Transfers to customers, sqm 103,260 +33% 137,055 1H 2014 1H 2015 Residential real estate development revenue, mln RUB 8,873 +56% 13,857 1H 2014 1H 2015 Construction services revenue from third parties/external, mln RUB Total revenue, mln RUB -53% 3,979 1H 2014 Source: IFRS financial statements, Company information ✓ Etalon Group 1,872 1H 2015 14,539 +25% 18,148 1H 2014 1H 2015 Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 11#13Healthy profitability levels maintained Residential real estate development adjusted gross profit*, mln RUB 3,384 +54% 5,226 38% 38% 1H 2014 1H 2015 Residential real estate development adjusted gross profit, mln RUB Adjusted gross profit margin*, % Consolidated gross profit, mln RUB 3,780 +47% 5,564 26% 31% 1H 2014 1H 2015 Consolidated gross profit, mln RUB Gross profit margin, % Source: IFRS financial statements *Adjusted for interest in cost of sales ✓ Etalon Group Construction services gross profit, mln RUB +8% 304 281 5% 3% 1H 2014 1H 2015 Construction services gross profit, mln RUB Gross profit margin, % Consolidated adjusted gross profit*, mln RUB Operating Results Financial Results Landbank Valuation +42% 5,836 4,120 32% 28% 1H 2014 1H 2015 Consolidated adjusted gross profit, mln RUB Adjusted gross profit margin*, % 2015 Deliveries Appendix 12#14Strong profit generation supported by good cost control General and administrative expenses, mln RUB 1,957 +3% General and administrative expenses as % of revenue Selling expenses, mln RUB 2,021 13% 11% 577 +7% Selling expenses as % of revenue 619 4% 3% 1H 2014 1H 2015 1H 2014 1H 2015 1H 2014 1H 2015 1H 2014 1H 2015 EBITDA, mln RUB 1,683 +89% 3,173 EBITDA margin, % Net income, mln RUB Net income margin, % +137% 2,193 17% 12% 927 6% 12% 1H 2014 1H 2015 1H 2014 1H 2015 1H 2014 1H 2015 1H 2014 1H 2015 Source: IFRS financial statements Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 13#15Strong balance sheet despite the market cool-down Liquidity position, mln RUB(1) 16,291 15,655 18,516 12,007 31.12.2014 30.06.2015 (2) ■Debt ■Cash and cash equivalents Debt maturity profile (as of 30/06/2015; mln RUB) 2,423 2015 5,635 905 18,516 2,120 7,433 2016 2017 2018 2019-2021 Total Gross debt composition (18,516 mln RUB as of 30/06/2015) (1) By type of facility By currency 73% 3% 27% ■Local bonds ■ Bank loans 97% RUB ■ EUR Highlights Company estimates that only c. 15% of total construction costs linked to USD Foreign currency denominated cash to debt ratio is 2.2 (as of 30 June 2015) 0.5x Net debt/LTM EBITDA (3) (as of 30 June 2015) (1) IFRS financial statements (2) Including bank deposits in ST Investments (3) LTM EBITDA: 1H 2015 + 2H 2014 EBITDA USD/RUB fx rate as of 30 June 2015 EUR/RUB fx rate as of 30 June 2015 55.52 61.52 ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 14#163 Landbank Valuation FEFEF FFFEE Etalon Group ΓΕΓΓΕ EEEEEEEEE Letniy, 2013#17Etalon Group's portfolio grew in value again in 2014 despite the more complex macro environment Open market value, mln RUB Open market value per share, RUB Breakdown by region Breakdown by stage of development +17% +17% 104,286 357.1 89,253 305.6 46% 44% 56% 2013 2014 2013 2014 5% 49% Projects under development ■ SPMA ■ MMA ■ Projects at design stage ■ Projects completed Sustainable growth of open market value based on well diversified portfolio • Market value of the Group's portfolio as of 31 December 2014 reached RUB 104,286 million, up 17% year-on-year • Landbank volume remained generally stable at 3.11 million sqm of unsold NSA • The Company acquired one new project in St. Petersburg during 2014 • The share of MMA projects reached 44%, up 2 p.p. year-on-year The portfolio includes 432 thousand sqm of completed & available for sale property at projects that are completed or still underway, out of which completed & available for sale apartments account for 220 thousand sqm. JLL estimates potential income from the sale of these properties at RUB 28,863 million and RUB 22,853 million, respectively Source: JLL estimate as of 31.12.2014 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 16#18Etalon Group targets optimal land bank management Acquired 1 project acquired in 2014: • • • Three-hectare land plot situated on Polyustrovskiy prospect in the Kalininskiy district of St. Petersburg Total NSA - 91 ths sqm Land planning documentation for the land plot already obtained, allowing the rights holder to begin construction in the near future Property is located within walking distance from the Lesnaya metro station and four kilometres from central St. Petersburg Launched 2 projects launched in 2014 enjoy strong demand, driving new sales: Samotsvety Moscow Gates Completed 2 projects completed in 2014 still generate sales without extra spending: Galant Total NSA 50 ths sqm Apartment pre-sales rate - 67% (as of June 2014) • Total NSA-206 ths sqm • Total NSA 234 ths sqm • Launched in August 2014 • Launched in November 2014 • Project share in 4Q 2014 sales - 12% Project share in 4Q 2014 sales - 4% • Rechnoy Total NSA 111 ths sqm Apartment pre-sales rate - 82% (as of December 2014) Total inventory of completed and available for sale property stands at 432 ths sqm, including 220 ths sqm of apartments, as of 31.12.2014 Source: Company data Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 17#19Operations in SPMA and MMA Projects in St. Petersburg Metropolitan Area Projects in Moscow Metropolitan Area Under construction Design stage Completed 8 Under construction Design stage 3 ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 18#20Etalon Group portfolio: high quality projects diversified across the two most lucrative macro regions in Russia Project Total NSA Status ('000 sqm) Unsold NSA (Etalon's share) parking (lots), ('000 sqm) (1) # Unsold OMV (mln RUB) Income from sales (mln RUB) (2) Construction budget (mln RUB) (3) Outstanding budget (mln RUB) (3) Current Projects St. Petersburg Metropolitan Area (SPMA) 1. Galactica Design stage 779.4 631.5 4,238 8,182 78,557 38,978 37,520 2. Tsar's Capital Construction 392.4 216.3 2,089 13,197 33,225 15,374 6,868 3. Swallow's Nest Construction 333.6 149.0 1,582 8,720 22,932 13,365 1,880 4. Moscow Gates Construction 234.1 202.0 884 7,104 25,662 10,136 8,122 5. Samotsvety Construction 205.8 179.6 1,654 8,613 22,614 8,466 5,757 6. Molodejny Construction 111.8 25.8 491 935 8,545 4,352 1,140 7. Polyustrovskiy prospect (Landyshi) Construction 91.3 91.3 530 1,098 6,965 3,377 3,377 8. Technopark Design stage 51.0 51.0 440 572 4,451 3,571 3,089 9. Beloostrovskaya Design stage 42.9 41.0 277 383 3,588 2,290 2,281 Total SPMA 2,242.3 1,587.6 12,185 48,804 206,540 99,909 70,033 Moscow Metropolitan Area (MMA) 1. Emerald Hills Construction 864.8 479.3 3,174 18,484 66,218 37,548 17,094 2. Etalon-City Construction 372.2 272.3 2,276 8,871 34,955 17,575 15,531 3. Dmitrovskoe shosse Design stage 322.3 266.1 2,122 5,276 33,604 16,696 16,579 4. Alekseevskiy District 5. Budennogo street 6. Losinoostrovskiy District Total MMA Total Current Projects Completed Projects Residential property in completed projects Completed stand-alone commercial properties Total Completed Projects All Projects Total Etalon Group Projects Design stage 179.5 169.6 2,160 6,835 23,957 8,973 8,903 Design stage 119.0 110.7 936 3,825 13,950 5,836 5,763 Design stage 91.5 83.9 851 3,032 11,635 4,372 4,351 1,949.3 1,381.8 11,519 46,323 184,319 90,998 68,222 4,191.6 2,969.4 23,704 95,127 390,859 190,907 138,255 124.5 3,219 8,198 20.4 59 144.9 3,278 961 9,159 3,114.3 26,982 104,286 Source: all numbers based on JLL report as of 31.12.2014 (1) Including parking with average area c. 30 sqm Etalon Group (2) Income from sales includes potential and received incomes as of 31 December 2014 (3) Excluding land acquisition costs Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 19#214 2015 Deliveries Etalon Group BENADER Sea facade, 2006#22Summary of 2015 planned deliveries Project deliveries breakdown for 2015 NSA to be delivered NSA delivered in Project Region in 2015, ths sqm 1H 2015, ths sqm 1. Tsar's Capital SPMA 158 50 2. Samotsvety SPMA 128 3. Moscow Gates SPMA 66 4. Emerald Hills MMA 65 5. Etalon City MMA 43 6. Swallow's Nest SPMA 40 40 Total 500 91 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 21#23Tsar's Capital August 2015 Planned 2015 deliveries Total NSA 392 ths sqm 158 ths sqm Open Market Value* RUB 13,197 mln JLL estimate as of 31.12.2014 December 2014 Income from sales* RUB 33,225 mln Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 22#24Samotsvety August 2015 December 2014 Planned 2015 deliveries Total NSA 206 ths sqm 128 ths sqm Open Market Value* RUB 8,613 mln JLL estimate as of 31.12.2014 Income from sales* RUB 22,614 mln , Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 23#25Moscow Gates August 2015 Planned 2015 deliveries Total NSA 234 ths sqm 66 ths sqm JLL estimate as of 31.12.2014 DesCuGMY КВАРТИРЫ 380-05-25 December 2014 Open Market Value* RUB 7,104 mln Income from sales* RUB 25,662 mln Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 24#26Emerald Hills August 2015 Total NSA 865 ths sqm Planned 2015 deliveries 65 ths sqm Open Market Value* RUB 18,484 mln JLL estimate as of 31.12.2014 December 2014 پر Income from sales* RUB 66,218 mln Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 25#27Etalon City August 2015 December 2014 Planned 2015 deliveries Total NSA 372 ths sqm 43 ths sqm Open Market Value* RUB 8,871 mln Income from sales* RUB 34,955 mln JLL estimate as of 31.12.2014 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 26 46#28Swallow's Nest August 2015 Total NSA 334 ths sqm JLL estimate as of 31.12.2014 December 2014 Delivered in 2015 40 ths sqm Open Market Value* RUB 8,720 mln , Income from sales* RUB 22,932 mln Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 27#295 Appendix Etalon Group Invigorating spring, 2005#30At a glance Presence in Russia's largest markets Focus on middle class residential real estate in Moscow metropolitan area (MMA) and St. Petersburg metropolitan area (SPMA) •29% CAGR for deliveries over 2010- 2014(1) Strong delivery track record . • Over 28 years of construction & development experience • 4.5 mln sqm commissioned True vertical integration •Strategic vertical integration in key value-added segments of property development enables the Company to control costs, quality and timing • 5,000 employees •Country-wide sales network covering 36 cities Diversified projects portfolio • Land bank of 3.11 mln sqm (2) • Land bank sufficient until 2018 •Projects well diversified by locations within both SPMA and MMA ✓ Etalon Group Operating Results Liquidity and credit ratings •Secure liquidity position supported by pre-sales cash collections model • Low leverage: 0.5x net debt / LTM EBITDA (3) . • Credit rating by S&P: B+/B(4) Corporate governance • •10 BoD members, 5 NEDS Board of Directors consists of professionals with broad range of experience and expertise, ensuring that the interests of all groups of shareholders are appropriately represented • Monthly visual updates on projects, quarterly trading updates and semi- annual financial reporting ⚫ Official guidance on deliveries and new contract sales •Dividend policy aims to pay out 15% to 30% of IFRS net profit semi- annually (1) Company operating results; (2) JLL land bank valuation report as of 31.12.2014; (3) IFRS financial statements as of 30 June 2015; (4) 'B+' long-term & 'B' short-term corporate credit ratings of SSMO LenSpetsSMU (last reconfirmed on 18.06.2015). LSE ticker Share price Market capitalization Portfolio valuation (by Jones Lang La Salle) Portfolio composition (2) ETLN:LI USD 1.65 (18.09.2015) USD 482 mln (18.09.2015) RUB 104,286 mln (31.12.2014) 5% 44% 56% 49% 46% ■ SPMA ■ MMA ■ Projects under development Projects at design stage Projects completed Financial Results Landbank Valuation 2015 Deliveries Appendix 29#31Strategic vertical integration: control over costs, quality and timing Etalon Group operates in every part of property development process Funding Independence from Land Acquisition and Permits Construction Materials (1) suppliers, but only in crucial areas Design Effective Capital Recycling Construction Contracting and Commissioning Tower Cranes (2) Sales and Marketing Ongoing Maintenance and Service Control over costs, quality and timely delivery of projects Business stability and lower risk of dependence on counterparties Understanding of customer needs (sales network throughout the country) (1) Brick plant and concrete products plant. Own production only for "bottleneck" construction materials (2) 62 tower cranes (Liebherr and Wolff). Data as of 30.06.2015 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 30#32Nationwide sales & marketing network supports sustainable contracting Powerful sales network across the country Regional population actively buys apartments in Moscow and St. Petersburg Murmansk Apatity Arkhangelsk Severodvinsk SPMA Petrozavodsk Cherepovets Yaroslavl MMA Izhevsk Ekaterinburg Ukhta Nadim Siktivkar Chelyabinsk • Norilsk Salekhard • Noviy Urengoy ● Noyabrsk Surgut Nizhnevartovsk Etalon Group's regional sales geography(1) Share of total Region contracts Leningrad region 5.3% Khanty-Mansiysk AD 2.1% Yakutia 1.8% Krasnoyarski krai 1.4% Khabarovski krai 1.3% Arkhangelsk region 1.2% Kamchatski krai 1.2% Petropavlovsk- Kamchatskiy Krasnodarski krai 1.2% Yakutsk Other Russian regions 24.3% Magadan Mirniy Foreigners 3.2% Total 42.9% Neryungri The Group's flats are sold in 14 out of Novosibirsk Etalon Group's sales offices / representatives Established relationships / partnerships with local sales agencies Tomsk Russia's 15 richest regions Khabarovsk Uzhno- Sakhalinsk Average income per capita (RUB)(2) Usolye-Sibirskoye » Blagoveshchensk Nenets AD Irkutsk Yamalo-Nenets AD Vladivostok ● Nakhodka Moscow 68,010 59,643 56,820 Chukotka 54,524 Sakhalin region 46,305 Magadan region 44,207 ● Etalon Group's sales force is focused on the regions with the largest income per capita • Key markets: SPMA and MMA Khanty-Mansiysk AD 43,871 Tyumen region 39,462 Kamchatski krai 36,232 Moscow region 35,790 • 36 cities covered with 14 sales offices in St. Petersburg and 17 more sales offices nationwide External professional marketing and sales service agents engaged nationwide Khabarovski krai 35,630 St. Petersburg 34,498 Yakutia Komi Murmansk region Russia average 34,097 33,611 33,391 27,331 (1)Source: company data for 2Q 2015 (2) Average monthly cash income per capita, Rosstat's preliminary estimates for 6M 2015 Etalon Group's target regions Etalon Group Financial results Operating Results Landbank Valuation 2015 Appendix 31 Deliveries#33INDEPENDENT NON-EXECUTIVE DIRECTORS EXECUTIVE DIRECTORS FOUNDING SHAREHOLDERS Viacheslav Zarenkov Chairman of the Board of Directors, Founding shareholder and President Board of Directors represents interests of all investor groups Dmitry Zarenkov Vice-President Experience and awards 45 years of experience in construction industry Honoured builder of Russia (1) Education • Institute of Civil Engineering, SPb University of Internal Affairs ⚫ PhD in Economics, PhD in Technical Sciences, PhD in Architecture, Professor Anton Evdokimov Chief Executive Officer Experience and awards 28 years of experience in construction industry Certificate of Honour of the Ministry of Regional Development Education Leningrad Engineering Construction Institute, SPb State University and International Banking Institute, Open University Business School (MSc in International finance, MBA in business strategy) Martin Cocker Independent Non- Executive Director Experience and awards 20 years of experience in audit, 5 years - in construction industry Runs his own development business in Portugal Worked at Deloitte & Touche, KPMG and Ernst & Young in Russia, Kazakhstan and UK Education University of Keele Boris Svetlichny Chief Financial Officer Experience and awards • Over 26 years experience in finance and senior management with international and Russian companies • Recent experience included CFO position at Orange in Russia, VP for Finance at Vimpelcom and CFO at Golden Telecom Education University of Massachusetts (BBA in Accounting) Carnegie-Mellon University (MBA) Anton Poryadin Independent Non- Executive Director Experience and awards • 13 years of experience in strategy consulting at A.T. Kearney. Partner and Vice President at A.T. Kearney • Worked at Barents International Markets B.V., Torno Internazionale S.p.A., St. Petersburg Foundation for Enterprise Development Education • SPb Technical University, Business School at the University Of Rochester (1) Title granted by President of Russia Etalon Group Financial results Operating Results Experience and awards Experience and awards • 18 years of experience in construction industry • Honoured builder of Russia (1); Certificate of Honour of the Ministry of Regional Development Education ⚫ Institute of Aeronautical Instrumentation, SPb University of Architecture & Civil Engineering, SPb University of Internal Affairs ⚫ PhD in Engineering Kirill Bagachenko Head of Corporate Investments and IR NON-EXECUTIVE DIRECTORS Michael John Calvey Senior partner at Baring Vostok since 1999 Experience and awards • Member of the board of Europlan, Volga . Gas, Gallery Media Group Worked at EBRD, Salomon Brothers, Sovlink Corporation • Ex-Member of the board of CTC Media, Golden Telecom, Burren Energy Education • University of Oklahoma and London School of Economics Alexei Kalinin Senior partner at Baring Vostok • 10 years' experience in corporate finance and asset management • Previously held position of senior equity portfolio manager at TKB BNP Paribas Investment Partners • In 2013 voted one of the top three portfolio managers in Russia by Thomson Reuters Extel Survey Education • St. Petersburg State University of Economics and Finance Andrew Howat Independent Non- Executive Director Experience and awards • 30 years of experience in international finance, banking and investment businesses • Worked as a senior Director at ING Bank in the Corporate Banking and Financial Markets divisions, and as Managing Director of Butterfield Fulcrum • Chartered member of the Chartered Institute for Securities & Investment Education ⚫ Farnborough College of Technology Landbank Valuation Experience and awards • With Baring Vostok since 1999 Worked at Alfabank and Alfa Capital • Chairman of the Board of Directors at Volga Gas, member of the board at Samarenergo and two Russian glass companies Education •Moscow Power Engineering University ⚫ PhD in Engineering 2015 Deliveries Appendix 32#34Strong corporate governance and shareholding structure Corporate governance structure General Shareholders Meeting Board of Directors • Chairman (V. Zarenkov) Shareholding structure 1.0% 30.8% 44.1% Board Committees • 4 Executive Directors • 5 Non-Executive Directors, including 3 Independent Directors Strategy Committee Remuneration & Nomination Committee 16.4% 7.7% Zarenkov family Management Baring Vostok Free float Etalon Development Ltd Management Team Audit Committee Source: Company data As of 30 June 2015 ✓ Etalon Group Financial results Operating Results Landbank Valuation 2015 Deliveries Appendix 33#35Typical project cost structure Materials cost structure* (RUB 12,000 18,000 per sqm of NSA) Crushed Sand granite Bricks 4% 4% Construction cost structure* (RUB 29,000 - 39,000 per sqm of NSA) Overhead expenses Cement 14% 6% 52% Other Materials 8% 8% 41% OTO Metal products 20% 23% Machinery Total cost structure* (RUB 59,000 - 72,000 per sqm of NSA) 20% Wages Construction 45% Taxes Project management Design Interest expense 4% 4% 6% Sales costs 6% Other 7% 8% Infrastructure 20% Land acquisition Typical project lifecycle* Task Share,% Start, month Duration, months Predevelopment 3 0 8 Zero cycle works 7 2 10 Construction works 43 5 20 Facade works 11 16 10 Fit out works LO 5 18 10 MEP systems 14 7 21 Engineering facilities Urban landscaping 15 2 5 24 23 6 0 5 *Source: Company estimates for typical project based on current portfolio average. Actual breakdown per project is subject to significant variation due to a number of factors. ✓ Etalon Group Financial results Operating Results Landbank Valuation Construction timeline, months 10 15 20 25 30 2015 Deliveries Appendix 34 =4#36Residential development scheme Timing 3-5 years Permission risk vs. Project value High permission risk Low entry price Total development period range: 39-59 months 12-18 months 18-30 months Medium-low permission risk Medium entry price Stages of residential Zoning & initial permit real estate Investment contract, planning & documentation construction development permit Revenue recognition Source: Company data Construction Pre-sale 1-2 months 3 months State commission Ownership rights registration Sales after commission ing For share participation agreements when the construction is completed and the building has been approved by the State commission for acceptance of finished buildings. For share accumulation agreements when the building has been approved by the State commission for acceptance of finished buildings and act of acceptance is signed by share accumulation cooperative. For 100% payment when sale-purchase agreement is signed. For less than 100% payment when preliminary agreement and act of acceptance is signed by client. Etalon Group focus ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 35 I I I I#37Etalon Group is well positioned to continue creating shareholder value in a more complicated macro environment Current land bank is sufficient for Etalon Group's construction programme, no need to acquire land plots in the medium term More diversified product offering based on a higher number of projects and a growing share on lucrative MMA market Growing contribution from the Company's sales network in Russia's resource-rich regions The strongest balance sheet in the industry Low level of FX-denominated debt fully hedged by FX-denominated deposits Currently no debt borrowed outside of Russia Etalon Group maintains its B+ credit rating from Standard & Poor's despite Russia's sovereign credit rating downgrade in 2014 Reasonable price growth during preceding 3 years, no signs of a bubble Land bank (unsold NSA) bop, ths sqm Number of projects in construction programme, eop 2008 2014 1,280 3,442 8 15 Share of Moscow Metropolitan Area in total contract sales, % 23% Share of regional sales, % 21.0% 34.4% (1) Total net debt (net cash), mln RUB 4,358 636 - % FX denominated debt 88.5% 8% - % of debt borrowed outside of Russia 46.4% - Net debt / EBITDA 1.37x 0.06x Credit rating (Standard & Poor's) B B+ Residential real estate price CAGR (previous 3 years), %: - St. Petersburg market(2) 41% 6% - Moscow market (3) 34% 7% Inventory of completed and available for sale apartments eop, ths sqm 25 220 Comprehensive inventory of completed apartments in diverse locations is attractive to clients during macroeconomic instability. It also enables the Company generate revenue without incurring additional costs Moderate share of mortgage sales, well below that of other public peers Share of mortgage sales Transparent public company with long and successful track record of cooperation with capital markets Qualitative criteria Sources: Land bank valuation report by JLL as of 31.12.2013 and 31.12.2014, management accounts, IPO Prospectus, IFRS financial statements for 12M 2008 and 12M 2014 (1) for FY 2014 Etalon Group Operating Results Financial Results Landbank Valuation 8% 3 years of public debt history Partnership with Baring Vostok Capital Partners 22% (1) Public listing on LSE Transparent corporate governance Dividend policy 9 years of public debt history (2) calculation based on EMLS index (secondary market) as of December for preceding 3 years (3) calculation based on IRN housing price index as of December for preceding 3 years 2015 Deliveries Appendix 36#38Etalon Group has an extensive track record of successful industrial construction projects that meet the highest standards of quality Ford Motor Company Nissan plant ExpoForum *Expected date of completion Etalon Group • 2007-2012 Expansion of existing production facilities, including a 25 ths sqm logistics area for finished goods, renovation of warehouse and overhaul of utility systems This project was unique as work was carried out in the production area, next to the main production line, while it was in operation 2012-2014 Etalon Group is a long-time partner of Nissan in Russia, having acted as the general contractor for design and construction of the test track and new car storage areas in 2008 In 2014 Etalon Group delivered 66 ths sqm of new factory space, including expansion of existing assembly lines, warehouse and office facilities 2011-2015 The largest commercial construction project in St. Petersburg in recent years Overall size of the complex is over 200 ths sqm 2 main exhibition halls, 3 exhibition pavilions, 2 hotels, 3 helicopter pads, parking and utilities infrastructure Capacity for up to 8 ths delegates Operating Results UniPres UNIPRES Zvezda-Reduktor XBBEBDA State Hermitage Museum 2014-2015* General contractor agreement for the construction of a 12,313 sqm manufacturing facility and a 3,588 sqm administrative building Turnkey project involving the full construction cycle Due to be completed in 4Q 2015 2015-2016* Overhaul of production lines and the renovation of administrative and service buildings for Zvezda-Reduktor, a subsidiary of Zvezda, Russia's largest manufacturer of compact, high-RPM Diesel engines Contract covers a total area of 9,854 sqm 2015-2016* Construction of part of the Restoration and Storage Centre of the State Hermitage Museum in St. Petersburg Contract is worth RUB 1.6 billion Due to be completed in 4Q 2016 Financial Results Landbank Valuation 2015 Deliveries Appendix 37#39Income statement mln RUB Revenue 2012 2013 2014 1H13 1H14 1H15 26,894 39,921 51,481 16,635 14,539 18,148 Cost of sales (17,494) (27,553) (35,685) (11,064) (10,759) (12,584) Gross profit 9,400 12,368 15,796 5,571 3,780 5,564 General and administrative expenses (2,324) (3,157) (4,178) (1,387) (1,957) (2,021) Selling expenses (958) (1,023) (1,474) (460) (577) (619) Other expenses, net (209) (40) (913) (96) (166) (341) Results from operating activities 5,909 8,148 9,231 3,628 1,080 2,583 Finance income 749 691 1,717 434 391 998 Finance costs (132) (342) (553) (142) (242) (593) Net finance income 617 349 1,164 292 149 405 Profit before income tax 6,526 8,497 10,395 3,920 1,229 2,988 Income tax expense (1,526) (1,833) (2,026) (822) (302) (795) Profit for the period 5,000 6,664 8,369 3,098 927 2,193 Profit attributable to: Owners of the Company Non-controlling interest Profit for the period Source: IFRS financial statements for 2012, 2013, 2014, 1H13, 1H14, 1H15 ✓ Etalon Group 4,979 6,629 8,345 3,083 927 2,188 21 35 24 15 5 5,000 6,664 8,369 3,098 927 2,193 Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 38#40Balance sheet mln RUB 2012 2013 2014 1H13 1H14 1H15 mln RUB 2012 2013 2014 1H13 1H14 1H15 Assets Equity and Liabilities Non-current assets Equity PP&E 2,380 1,962 2,503 1,853 2,326 2,349 Share capital Investment property 1,142 808 638 1,052 618 Retained earnings 14,967 14,967 14,983 14,967 14,983 22,688 29,332 36,537 25,771 30,259 37,011 14,983 Other long-term investments 60 275 1,036 241 684 684 Total equity attributable to equity holders of the Company 37,655 44,299 51,520 40,738 45,242 51,994 Trade and other receivables 433 1,332 2,521 390 756 2,164 Non-controlling interest 408 387 351 394 387 170 Deferred tax assets 434 560 885 433 710 1,040 Total equity 38,063 44,686 51,871 41,132 45,629 52,164 Other non-current assets 11 10 10 10 10 10 Non-current liabilities Total non-current assets 3,318 5,281 7,763 3,565 5,538 6,865 Current assets Inventories 41,522 Trade and other receivables Short-term investments Cash and cash equivalents 10,716 50,057 57,525 11,058 15,078 15,074 6,870 5,008 1,221 14,631 8,139 44,056 57,132 61,131 14,387 17,746 15,926 3,824 5,493 2,122 8,559 9,635 10,042 Loans and borrowings Trade and other payables Provision 12,811 10,176 12,411 10,750 10,050 13,375 980 785 2,854 1,041 678 4,024 65 89 114 61 91 112 Deferred tax liabilities 226 826 Total non-current liabilities 14,082 11,876 1,456 16,835 402 650 1,249 12,254 11,469 18,760 Current liabilities Other current assets 32 7 66 20 18 66 Total current assets 70,198 Total assets 73,516 83,570 78,289 88,517 96,280 70,846 90,024 89,287 74,411 95,562 96,152 Loans and borrowings Trade and other payables Provisions Total current liabilities Total equity and liabilities 3,825 3,043 3,880 2,359 4,689 16,966 22,300 21,460 18,399 32,436 18,451 580 1,665 2,234 267 1,339 1,636 21,371 27,008 27,574 21,025 38,464 25,228 73,516 83,570 96,280 74,411 95,562 96,152 5,141 Source: IFRS financial statements for 2012, 2013, 2014, 1H13, 1H14, 1H15 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 39#41Cashflow statement mln RUB Operating Activities Profit for the period Adjustments for: Depreciation Gain on disposal of PP&E Loss on disposal of subsidiaries 2012 2013 2014 1H13 1H14 1H15 5,000 6,664 8,369 3,098 927 2,193 417 343 417 168 204 213 (49) (15) (52) (27) (46) 20 28 Impairment loss on investment property 280 60 166 Impairment loss on inventories 466 85 30 Finance income, net (544) (337) (1,164) (319) (149) (405) Income tax expense 1,526 1,833 2,026 822 302 Cash from operating activities before changes in working capital 6,378 8,488 10,342 3,742 1,383 795 3,012 Change in inventories (7,633) (7,837) (6,890) (1,957) (6,763) (2,418) Change in accounts receivable (3,024) (5,080) (1,427) (3,243) (2,093) (366) Change in accounts payable 4,074 4,880 1,184 1,478 10,135 (1,461) Change in provisions (992) 1,109 594 (317) (324) (600) Change in other current assets 3 25 (59) 12 (11) Income tax paid (1,833) (907) (1,645) (632) (742) (1,605) Interest paid (1,097) (1,724) (1,588) (871) (683) (1,180) Net cash from/(used in) operating activities (4,124) (1,046) 511 (1,788) 902 (4,618) Investing Activities Proceeds from disposal of non-current assets 71 15 66 57 52 29 Interest received 552 611 823 351 342 802 Acquisition of PP&E (844) (431) (653) (160) (364) (95) Loans given (371) (55) (178) (37) (16) (4) Loans repaid 363 85 174 17 79 21 Acquisition of subsidiaries, net of cash acquired 10 Disposal of subsidiaries, net of cash disposed of (8) (20) 7 (7) (Acquisition)/disposal of other investments Net cash used in investing activities Financing activities Acquisition of non-controlling interest Proceeds from borrowings Repayments of borrowings Acquisition of own shares Dividends paid Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Effect of FX rate fluctuations Cash & cash equivalents at the end of the period Source: IFRS financial statements for 2012, 2013, 2014, 1H13, 1H14, 1H15 (5,506) 1,606 3,038 2,850 (964) (598) (5,743) 1,821 3,277 3,071 (871) 152 (3) (10) (83) (66) 12,140 5,937 10,763 2,785 5,627 (5,552) (9,668) (8,498) (6,624) (4,278) 4,707 (2,323) (13) 16 16 (1,124) 6,572 (3,741) 1,074 (3,839) 1,365 (1,834) 484 (3,295) (2,966) 4,862 (2,556) 1,396 (3,982) (473) 389 1,630 399 10,716 8,139 14,631 8,559 100 9,635 (607) 10,042 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 40#42EBITDA calculation mln RUB 2012 2013 2014 1H13 1H14 1H15 Comprehensive income 5,000 6,664 8,369 3,098 927 2,193 Income tax expense 1,526 1,833 2,026 822 302 795 Interest expense on loans and finance leases 7 233 295 115 140 15 Net foreign exchange loss 125 109 70 438 Interest income on bank deposits (543) (583) (729) (342) (307) (686) Interest income on loans and receivables (9) (28) (94) (9) (35) (116) Net foreign exchange gain (814) (48) Bank fees and commissions 67 80 117 40 42 49 Interest in COS Depreciation 341 779 1,024 354 340 272 417 343 417 168 204 213 EBITDA 6,931 9,430 10,611 4,198 1,683 3,173 2012 2013 2014 1H13 1H14 1H15 + Depreciation to COGS (Note 13 PP&E) 385 292 271 149 160 167 Depreciation to selling expenses 1 1 4 1 1 3 (Note 13 PP&E) Depreciation to G&A expenses (Note 13 PP&E) 31 39 94 18 19 19 Depreciation to Investment property 11 48 24 24 (Note 14 Investment property) 14 ✓ Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 41#43Working capital calculation mln RUB Total inventory 2012 2013 2014 1H13 1H14 1H15 41,522 50,057 57,525 44,056 57,132 61,131 Current part + Trade and other receivables 11,058 15,078 15,074 14,387 17,746 15,926 - Trade and other payables 16,966 22,300 21,460 18,399 32,436 18,451 - Provisions 580 1,665 2,234 267 1,339 1,636 Non-current part + Trade and other receivables 433 1,332 2,521 390 756 2,164 - Trade and other payables 980 785 2,854 1,041 678 4,024 - Provisions 65 89 114 61 91 112 Adjustments - Cumulative borrowing costs capitalized during the period (Note 11 Finance income and finance costs) 2,725 4,092 5,416 3,457 4,660 6,636 + Cumulative borrowing costs that have been included into the cost of sales (Note 11 Finance income and finance costs) 510 1,289 2,313 864 1,629 2,585 -Income tax receivable (Note 18 Trade and other receivables) 310 103 159 307 85 467 +Income tax payable (Note 25 Trade and other payables) 7 248 380 13 116 10 Working capital 31,904 38,970 45,576 36,178 38,090 50,490 Etalon Group Operating Results Financial Results Landbank Valuation 2015 Deliveries Appendix 42#44FCF calculation mln RUB Comprehensive income Adjustment for: 2012 2013 2014 1H13 2H13 1H14 2H14 1H15 5,000 6,664 8,369 3,098 3,566 927 7,442 2,193 Depreciation 417 343 417 168 175 204 213 213 Gain on disposal of PP&E (49) (15) (52) (27) 12 (46) (6) 20 Impairment loss on investment property 280 60 220 166 Impairment loss on inventory 466 85 381 30 Loss on disposal of subsidiaries 28 Finance income, net Income tax expense (544) (337) (1,164) (319) (18) (149) (1,015) (405) 1,526 1,833 Income tax paid (1,833) (907) 2,026 (1,645) 822 1,011 302 1,724 795 (632) (275) (742) (903) (1,605) Interest paid (1,097) (1,724) (1,588) (871) (853) (683) (905) (1,180) (Increase)/Decrease in working capital (Increase)/Decrease in invested capital (773) FCF (4,897) (7,572) (6,903) (416) (1,462) (6,598) (4,027) (2,876) 944 (7,542) (4,845) (587) (76) (103) (313) (312) (275) (66) (1,891) 429 590 (666) (4,684) (Increase)/Decrease in working capital based on CF 2012 2013 2014 1H13 2H13 1H14 2H14 1H15 statement + Change in inventories (7,633) Change in accounts receivable (3,024) Change in accounts payable 4,074 4,880 (7,837) (6,890) (1,957) (5,080) (1,427) (3,243) (1,837) 1,184 (5,880) (6,763) (127) (2,418) (2,093) 666 (366) 1,478 3,402 10,135 8,951 (1,461) Change in provisions (992) 1,109 594 (317) 1,426 (324) 918 (600) Change in other current assets 3 25 (59) 12 13 (11) (48) Working capital change (7,572) (6,903) (6,598) (4,027) (2,876) 944 (7,542) (4,845) + (Increase)/Decrease in invested capital based on CF 2012 2013 2014 1H13 2H13 1H14 2H14 1H15 statement Acquisition of PP&E (844) (431) (653) (160) (271) (364) (289) (95) Proceeds from disposal of non-current assets 71 15 66 57 (42) 52 14 29 Invested capital change (773) (416) (587) (103) (313) (312) (275) (66) Etalon Group Operating Financial Landbank 2015 Results Results Appendix 43 Valuation Deliveries#45Etalon Group Limited Redwood House St Julian's Avenue St Peter Port Guernsey GY1 1WA Etalon Group Tel: +44 (0)20 8123 1328 Fax: +44 (0)20 8123 1328 Email: [email protected] 44