Globaltrans Investment : FY 2020 IFRS and Non-IFRS Financials

Presentation of information

Presentation of information The information in this document is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of this document or otherwise arising in connection therewith. This document does not constitute an offer or an advertisement of any securities in any jurisdiction. The financial information contained in this announcement is derived from the consolidated management report and consolidated financial statements (audited) of the Company and has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of Cyprus Companies Law, Cap. 113 ("EU IFRS"). The Group' consolidated management report and consolidated financial statements, selected operational information as at and for the years ended 31 December 2020 and 2019 along with historical financial and operational information are available at Globaltrans' corporate website (www.globaltrans.com). The presentational currency of the Group's financial results is Russian rouble ("RUB"), which is the functional currency of the Company as well as its Cypriot and Russian subsidiaries. In this document, the Group has used certain non-IFRS financial information (not recognised by EU IFRS or IFRS) as supplemental measures of the Group's operating performance. The management believes that these non-IFRS measures provide valuable information to readers, because they enable them to focus more directly on the underlying day-to-day performance of the Group's business. The Company also reports certain operational information to illustrate the changes in the Group's operational and financial performance during the reporting periods. Information (non-IFRS measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this document. All non-IFRS financial and operational information presented in this document should be used only as an analytical tool, and investors should not consider such information in isolation or in any combination as a substitute for analysis of the Group's consolidated financial statements reported under EU IFRS, which are available at the Globaltrans' corporate website www.globaltrans.com.

Income statement

Consolidated income statement
for the year ended 31 December 2020
2020	2019
RUB'000	RUB'000
Revenue	68,367,404	94,993,874
Cost of sales	(47,065,999)	(58,833,383)
Gross profit	21,301,405	36,160,491
Selling and marketing costs	(204,666)	(216,298)
Administrative expenses	(3,393,665)	(3,858,549)
Other income	1,000,232	133,508
Other gains/(losses) - net	107,765	(99,322)
Operating profit	18,811,071	32,119,830
Finance income	263,968	533,857
Finance costs	(2,510,495)	(2,529,098)
Net foreign exchange transaction gains/(losses) on financing activities	147,008	(379,824)
Finance costs - net	(2,099,519)	(2,375,065)
Profit before income tax	16,711,552	29,744,765
Income tax expense	(4,524,705)	(7,091,433)
Profit for the year	12,186,847	22,653,332
Profit attributable to:
Owners of the Company	10,586,535	20,807,651
Non-controlling interests	1,600,312	1,845,681
12,186,847	22,653,332
Weighted average number of ordinary shares in issue (thousand)	178,705	178,741
Basic and diluted earnings per share for profit attributable to the equity holders of the Company during the year (expressed in RUB per share)1	59.24	116.41

(1) Basic and diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. The information above is an extract from the Group's consolidated management report and consolidated financial statements (audited) for the year ended 31 December 2020. For the full version of financial statements including relevant notes, please visit www.globaltrans.com.

Balance sheet

Consolidated balance sheet
at 31 December 2020
31 December 2020	31 December 2019
RUB'000	RUB'000
ASSETS
Non-current assets
Property, plant and equipment	84,420,941	80,532,645
Right-of-use assets	1,080,415	1,410,448
Intangible assets	1,460	61,316
Other assets	549,493	336,416
Trade receivables	236,165	197,284
Loans and other receivables	3,887	10,374
Total non-current assets	86,292,361	82,548,483
Current assets
Inventories	691,033	1,722,781
Other assets	2,586,593	5,190,504
Loans and other receivables	47,483	37,645
Trade receivables	3,465,381	3,012,282
Current income tax assets	266,024	501,087
Cash and cash equivalents	4,978,322	6,521,543
12,034,836	16,985,842
Assets classified as held for sale	10	40,224
Total current assets	12,034,846	17,026,066
TOTAL ASSETS	98,327,207	99,574,549
EQUITY AND LIABILITIES
Equity attributable to the owners of the Company
Share capital	516,957	516,957
Share premium	27,929,478	27,929,478
Treasury shares	(31,496)	-
Common control transaction reserve	(10,429,876)	(10,429,876)
Translation reserve	5,443,187	3,392,675
Capital contribution	2,694,851	2,694,851
Retained earnings	20,724,107	26,774,750
Total equity attributable to the owners of the Company	46,847,208	50,878,835
Non-controlling interest	5,926,605	5,647,230
TOTAL EQUITY	52,773,813	56,526,065
Non-current liabilities
Borrowings	21,084,067	22,294,914
Other lease liabilities	720,487	881,706
Trade and other payables	-	90,742
Contract liabilities	8,710	11,191
Deferred tax liabilities	8,862,587	7,592,182
Total non-current liabilities	30,675,851	30,870,735
Current liabilities
Borrowings	10,931,172	7,800,304
Other lease liabilities	684,109	649,177
Trade and other payables	2,197,994	2,355,872
Contract liabilities	964,042	1,244,702
Current tax liabilities	100,226	127,694
Total current liabilities	14,877,543	12,177,749
TOTAL LIABILITIES	45,553,394	43,048,484
TOTAL EQUITY AND LIABILITIES	98,327,207	99,574,549

The information above is an extract from the Group's consolidated management report and consolidated financial statements (audited) for the year ended 31 December 2020 . For the full version of financial statements including relevant notes, please visit www.globaltrans.com.

Cash flow statement

Consolidated cash flow statement
for the year ended 31 December 2020
2020	2019
RUB'000	RUB'000
Cash flows from operating activities
Profit before tax	16,711,552	29,744,765
Adjustments for:
Depreciation of property, plant and equipment	6,968,694	5,794,912
Depreciation of right-of-use assets	655,070	424,220
Amortisation of intangible assets	59,856	696,725
Net loss on sale of property, plant and equipment	316	10,047
Loss on derecognition arising on capital repairs	419,982	471,746
Reversal of impairment of property, plant and equipment	-	(64,889)
Net impairment losses on trade and other receivables	5,511	12,699
Interest income	(263,968)	(533,857)
Interest expense and other finance costs	2,510,495	2,529,098
Net foreign exchange transaction (gains)/losses	(147,008)	379,824
on financing activities
Other losses	11,496	41,197
26,931,996	39,506,487
Changes in working capital:
Inventories	816,127	(394,213)
Trade receivables	(427,317)	(712,934)
Other assets	1,438,733	(1,299,140)
Other receivables	9,979	9,816
Trade and other payables	(208,134)	(270,224)
Contract liabilities	(283,141)	(1,417,574)
Cash generated from operations	28,278,243	35,422,218
Tax paid	(3,051,888)	(6,018,371)
Net cash from operating activities	25,226,355	29,403,847
Cash flows from investing activities
Loans repayments received from third parties	4,301	2,728
Purchases of property, plant and equipment	(6,941,159)	(13,515,985)
Purchases of intangible assets	-	(832)
Proceeds from sale of property, plant and equipment	66,765	91,649
Interest received	263,968	533,857
Receipts from finance lease receivable	77,870	123,598
Net cash used in investing activities	(6,528,255)	(12,764,985)
Cash flows from financing activities
Proceeds from bank borrowings	23,265,000	10,408,000
Proceeds from issue of non-convertible unsecured bonds	-	5,000,000
Repayments of borrowings	(19,603,415)	(10,736,723)
Principal elements of lease payments for leases with financial institutions	(1,715,794)	(488,723)
Principal elements of lease payments for other lease liabilities	(672,432)	(339,597)
Interest paid on bank borrowings and non-convertible unsecured bonds	(2,314,937)	(2,017,915)
Interest paid on leases with financial institutions	(80,813)	(167,048)
Interest paid on other lease liabilities	(113,771)	(111,911)
Dividends paid to owners of the Company	(16,637,178)	(16,631,842)
Dividends paid to non-controlling interests in subsidiaries	(2,271,815)	(1,602,237)
Payments from non-controlling interest for share capital increase of subsidiary	-	200,060
Purchase of treasury shares	(31,496)	-
Payments to non-controlling interests	(180,281)	(450,934)
Net cash used in financing activities	(20,356,932)	(16,938,870)
Net decrease in cash and cash equivalents	(1,658,832)	(300,008)
Exchange losses on cash and cash equivalents	115,611	(308,367)
Cash and cash equivalents at beginning of year	6,521,543	7,129,918
Cash and cash equivalents at end of year	4,978,322	6,521,543

The information above is an extract from the Group's consolidated management report and consolidated financial statements (audited) for the year ended 31 December 2020 . For the full version of financial statements including relevant notes, please visit www.globaltrans.com.

Non-IFRS Financial information

Non-IFRS Financial information (RUB mln)
Information (non-IFRS measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this document.
2020	2019
Adjusted Revenue	54,934	68,840
Total Operating Cash Costs	29,121	29,409
Total Operating Non-Cash Costs	8,109	7,345
Adjusted EBITDA	26,807	39,552
Adjusted EBITDA Margin, %	49%	57%
Total CAPEX (incl. maintenance CAPEX)*	6,941	13,517
Free Cash Flow*	15,103	13,251
Attributable Free Cash Flow*	13,503	11,405
31 Dec 2020	31 Dec 2019
Total debt	32,015	30,095
Cash and equivalents	4,978	6,522
Net Debt	27,037	23,574
Net Debt to LTM Adjusted EBITDA (x)	1.01	0.60
Other lease liabilities (IFRS 16)	1,405	1,531
Reconciliation tables
2020	2019
Net Revenue from Operation of Rolling Stock (derived from management accounts)	50,527	64,994
Operating lease of rolling stock	1,932	1,634
Net Revenue from Specialised Container Transportation (derived from management accounts)	1,923	1,623
Net Revenue from Engaged Fleet (derived from management accounts)	152	202
Other	400	386
Adjusted Revenue	54,934	68,840
2020	2019
Total cost of sales, selling and marketing costs and administrative expenses	50,664	62,908
Minus "pass through" cost items
Infrastructure and locomotive tariffs - loaded trips	10,957	22,020
Services provided by other transportation organisations	2,476	4,134
Adjusted cost of sales, selling and marketing costs and administrative expenses	37,231	36,754
2020	2019
Empty Run Costs (derived from management accounts)	15,799	14,752
Repairs and maintenance	4,261	4,403
Employee benefit expense	4,154	4,483
Fuel and spare parts - locomotives	1,630	1,914
Infrastructure and Locomotive Tariffs - Other Tariffs (derived from management accounts)	998	987
Expense relating to short-term leases - rolling stock	824	722
Engagement of locomotive crews	421	775
Other Operating Cash Costs	1,034	1,372
Expense relating to short-term leases - office	109	139
Legal, consulting and other professional fees	69	48
Auditors' remuneration	55	55
Advertising and promotion	35	39
Communication costs	26	35
Taxes (other than on income and value added taxes)	25	(9)
Expense relating to short-term leases - tank-containers	24	-
Information services	16	19
Other expenses	675	1,046
Total Operating Cash Costs	29,121	29,409
2020	2019
Depreciation of property, plant and equipment	6,969	5,795
Depreciation of right-of-use assets	655	424
Loss on derecognition arising on capital repairs	420	472
Amortisation of intangible assets	60	697
Net impairment losses on trade and other receivables	6	13
Net loss on sale of property, plant and equipment	0.3	10
Reversal of impairment of property, plant and equipment	-	(65)
Total Operating Non-Cash Costs	8,109	7,345
2020	2019
Profit for the year	12,187	22,653
Plus (Minus)
Income tax expense	4,525	7,091
Finance costs - net	2,100	2,375
Net foreign exchange transaction gains/(losses) on financing activities	147	(380)
Amortisation of intangible assets	60	697
Depreciation of right-of-use assets	655	424
Depreciation of property, plant and equipment	6,969	5,795
EBITDA	26,642	38,656
Minus (Plus)
Loss on derecognition arising on capital repairs	(420)	(472)
Net foreign exchange transaction gains/(losses) on financing activities	147	(380)
Other gains/(losses) - net	108	(99)
Net loss on sale of property, plant and equipment	(0.3)	(10)
Reversal of impairment of property, plant and equipment	-	65
Adjusted EBITDA	26,807	39,552
2020	2019
Cash generated from operations (after changes in working capital)	28,278	35,422
Minus
Total CAPEX (incl. maintenance CAPEX)*	6,941	13,517
Purchases of property, plant and equipment	6,941	13,516
Purchases of intangible assets	-	0.8
Tax paid	3,052	6,018
Interest paid on bank borrowings and non-convertible unsecured bonds	2,315	2,018
Principal elements of lease payments for other lease liabilities	672	340
Interest paid on leases with financial institutions	81	167
Interest paid on other lease liabilities	114	112
Free Cash Flow*	15,103	13,251
Minus
Adjusted Profit Attributable to Non-controlling Interests	1,600	1,846
Attributable Free Cash Flow*	13,503	11,405
Principal elements of lease payments for leases with financial institutions*	(1,716)	(489)

*Attributable Free Cash Flow, Free Cash Flow and Total CAPEX are net of principal elements of lease payments for leases with financial institutions presented for both periods (2019 and 2020). During H1 2020 the entire financial lease portfolio was refinanced to bilateral loans, therefore principal elements of lease payments were eliminated from both periods for comparison purposes. The information above is an extract from the Group's consolidated management report and consolidated financial statements (audited) for the year ended 31 December 2020. For the full version of financial statements including relevant notes, please visit www.globaltrans.com.

Definitions

Definitions (in alphabetical order)

Adjusted EBITDA (a non-GAAP financial measure) represents EBITDA excluding "Net foreign exchange transaction (gains)/losses on financing activities", "Share of profit/(loss) of associate", "Other losses/(gains) - net", "Net (gain)/loss on sale of property, plant and equipment", "Impairment/(reversal of impairment) of property, plant and equipment", "Impairment of intangible assets", "Loss on derecognition arising on capital repairs" and "Reversal of impairment of intangible assets". Adjusted EBITDA (a non-GAAP financial measure) represents EBITDA excluding "Net foreign exchange transaction (gains)/losses on financing activities", "Share of profit/(loss) of associate", "Other losses/(gains) - net", "Net (gain)/loss on sale of property, plant and equipment", "Impairment/(reversal of impairment) of property, plant and equipment", "Impairment of intangible assets", "Loss on derecognition arising on capital repairs" and "Reversal of impairment of intangible assets". Adjusted EBITDA Margin (a non-GAAP financial measure) is calculated as Adjusted EBITDA divided by Adjusted Revenue. Adjusted Profit Attributable to Non-controlling Interests (a non-GAAP financial measure) is calculated as "Profit attributable to non-controlling interests" less share of "Impairment of property, plant and equipment" and "Impairment of intangible assets" attributable to non-controlling interests. Adjusted Revenue (a non-GAAP financial measure) is calculated as "Total revenue" less the following "pass through" items "Infrastructure and locomotive tariffs: loaded trips" and "Services provided by other transportation organisations". Attributable Free Cash Flow (a non-GAAP financial measure) means Free Cash Flow less Adjusted Profit Attributable to Non-controlling Interests. EBITDA (a non-GAAP financial measure) represents "Profit for the period" before "Income tax expense", "Finance costs - net" (excluding "Net foreign exchange transaction (gains)/losses on financing activities"), "Depreciation of property, plant and equipment", "Amortisation of intangible assets" and "Depreciation of right-of-use assets". Free Cash Flow (a non-GAAP financial measure) is calculated as "Cash generated from operations" (after "Changes in working capital") less "Tax paid", "Purchases of property, plant and equipment" (which includes maintenance CAPEX), "Purchases of intangible assets", "Acquisition of subsidiary undertakings - net of cash acquired", "Principal elements of lease payments for leases with financial institutions", "Principal elements of lease payments for other lease liabilities", "Interest paid on other lease liabilities", "Interest paid on bank borrowings and non-convertible unsecured bonds" and "Interest paid on leases with financial institutions". Infrastructure and Locomotive Tariffs - Other Tariffs (a non-GAAP financial measure, derived from management accounts) is presented as part of the ''Infrastructure and locomotive tariffs: empty run trips and other tariffs'' component of "Cost of sales" reported under EU IFRS. This cost item includes the costs of relocation of rolling stock to and from maintenance, transition of purchased rolling stock to its first place of commercial utilisation, and relocation of rolling stock in and from lease operations as well as other expenses including the empty run costs attributable to the specialised container transportation business. Net Debt to Adjusted EBITDA (a non-GAAP financial measure) is the ratio of Net Debt on the last day of a particular financial period to Adjusted EBITDA in respect of the twelve months to the end of that same period. Net Debt (a non-GAAP financial measure) is defined as the sum of total borrowings (including interest accrued) less "Cash and cash equivalents". Net Revenue from Engaged Fleet (a non-GAAP financial measure, derived from management accounts) represents the net sum of the price charged for transportation to clients by the Group utilising Engaged Fleet less the loaded railway tariffs charged by RZD (included in the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips") less the cost of attracting fleet from third-party operators (included in the EU IFRS line item "Services provided by other transportation organisations"). Net Revenue from Operation of Rolling Stock is a non-GAAP financial measure, derived from management accounts, describing the net revenue generated from freight rail transportation services which is adjusted for respective "pass through" loaded railway tariffs charged by RZD (included in the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips"). Net Revenue from Specialised Container Transportation is a non-GAAP financial measure, derived from management accounts, that represents the revenue generated from the specialised container operations (included in the EU IFRS line item: "Revenue from specialised container transportation") less the respective "pass through" loaded railway tariffs charged by RZD (included in the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips"). Other Operating Cash Costs (a non-GAAP financial measure) include the following cost items: "Advertising and promotion", "Auditors' remuneration", "Communication costs", "Information services", "Legal, consulting and other professional fees", "Expense relating to short-term leases - tank containers", "Operating lease rentals - office", "Taxes (other than income tax and value added taxes)" and "Other expenses". Total CAPEX (a non-GAAP financial measure) calculated on a cash basis as the sum of "Purchases of property, plant and equipment" (which includes maintenance CAPEX), "Purchases of intangible assets", "Acquisition of subsidiary undertakings - net of cash acquired" and "Principal elements of lease payments for leases with financial institutions" (as part of the capital expenditures was financed with a finance lease). Total Operating Cash Costs (a non-GAAP financial measure) represent operating cost items payable in cash and calculated as "Total cost of sales, selling and marketing costs and administrative expenses" less the "pass through" items: "Infrastructure and locomotive tariffs: loaded trips" and "Services provided by other transportation organisations" and non-cash items: "Depreciation of property, plant and equipment", "Amortisation of intangible assets", "Depreciation of right-of-use assets", "Loss on derecognition arising on capital repairs", "Net impairment losses on trade and other receivables", "Impairment/(reversal of impairment) of property, plant and equipment" and "Net (gain)/loss on sale of property, plant and equipment". Total Operating Non-Cash Costs (a non-GAAP financial measure) include the following cost items: "Depreciation of property, plant and equipment", "Amortisation of intangible assets", "Depreciation of right-of-use assets", "Loss on derecognition arising on capital repairs", "Net impairment losses on trade and other receivables", "Impairment/(reversal of impairment) of property, plant and equipment " and "Net (gain)/loss on sale of property, plant and equipment".