The parties also concluded agreements granting Sistema the right to acquire and SberInvest the right to sell to the Group its stake in the equity capital of LLC Megapolis-Invest.

In February 2021 Megapolis Invest acquired an additional 29.64% stake in JSC Elektrozavod from a private investor for RUB 5.8 billion. Following completion of the transaction, LLC Megapolis-Invest held a 94.01% stake in JSC Elektrozavod.

Elektrozavod Group includes transformer equipment production facilities in Moscow and Ufa, maintenance divisions, research and design institutes, an engineering centre and land plots totalling 19 hectares near the Elektrozavodskaya metro station in Moscow.

***

For further information, please visit www.sistema.com or contact:

Investor Relations      Public Relations 
Nikolai Minashin        Sergey Kopytov 
Tel: +7 (495) 730 66 00 Tel.: +7 (495) 228 15 32 
n.minashin@sistema.ru   kopytov@sistema.ru 

Sistema PJSFC is a publicly traded Russian investment company with a diversified portfolio of assets serving over 150 million customers in the sectors of telecommunications, high technology, financial services, retail, paper and packaging, agriculture, real estate, tourism and medical services. The company was founded in 1993. Revenue in 2020 was RUB 691.6 billion; total assets equalled RUB 1.4 trillion as of 31 December 2020. Sistema's global depositary receipts are listed under the "SSA" ticker on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.com.

The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, impact of COVID-19 pandemic on macroeconomic situation on the markets of presence and financial results of Sistema and its subsidiaries and associates, as well as many other risks specifically related to Sistema and its operations.

Appendix A

Operating Income Before Depreciation and Amortisation (OIBDA) and OIBDA margin. OIBDA represents operating income before depreciation and amortisation. OIBDA margin is defined as OIBDA as a percentage of our net revenues. Our OIBDA may not be similar to the OIBDA measures of other companies; is not a measurement under accounting principles generally accepted under IFRS and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of profit and loss. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of businesses and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under IFRS, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. OIBDA is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies.

Adjusted OIBDA, operating income and profit attributable to Sistema shareholders. The Company uses adjusted OIBDA, adjusted operating income and adjusted profit/(loss) attributable to Sistema shareholders to evaluate financial performance of the Group. These represent underlying financial measures adjusted for a number of one-off gains and losses. We believe that adjusted measures provide investors with additional useful information to measure our underlying financial performance, particularly from period to period, because these measures are exclusive of certain one-off gains and losses.

Adjusted operating income and adjusted OIBDA can be reconciled to our consolidated statements of profit and loss as follows:

RUB millions                                           4Q 2020 4Q 2019 12M 2020 12M 2019 
Operating income                                       22 581  7 476   109 405  86 828 
Accruals related to LTI program at portfolio companies 443     72      577      489 
Impairment of non-current assets (MTS)                 775     -       2 023    - 
Impairment of rental properties                        -       2 958   -        2 958 
Impairment of investment and other property            1 680   3 900   2 789    6 429 
Other non-recurring loss, net                          80      8 965   1 054    12 352 
Adjusted operating income                              25 558  23 372  115 848  109 057 
Depreciation and amortisation                          30 623  29 600  120 492  114 959 
Adjusted OIBDA                                         56 181  52 972  236 340  224 016 

Adjusted profit attributable to Sistema shareholders can be reconciled to our consolidated statements of profit and loss as follows:

RUB millions                                                                                 4Q     4Q     12M    12M 
                                                                                             2020   2019   2020   2019 
Net profit attributable to Sistema                                                           17 516 7 682  10 217 28 597 
 
Provisions for deferred tax assets (DTA)                                                     -      4 308  -      4 308 
Accruals related to LTI program at portfolio companies                                       421    83     551    679 
Impairment of non-current assets (MTS)                                                       387    -      1 011  - 
Revaluation of the provision for liability with regards to the Securities and Exchange       -      -      -      (1 
Commission investigation (MTS)                                                                                    722) 
Impairment of rental properties, inc. write-offs of DTA                                      -      3 159  -      3 159 
Impairment of investment and other property, inc. write-offs of DTA                          2 471  3 548  3 446  7 361 
Other non-recurring loss, net                                                                79     8 057  773    10 996 
 
Adjusted net profit attributable to Sistema                                                  20 874 26 837 15 998 53 379 
 

Consolidated net debt. We define consolidated net debt as consolidated total debt less cash, cash equivalents and deposits in banks. Consolidated total debt is defined as total borrowings plus finance lease. The total borrowings is defined as long-term borrowings, short-term borrowings and liability to the Russian Federation. We believe that the presentation of consolidated net debt provides useful information to investors because we use this measure in our management of consolidated liquidity, financial flexibility, capital structure and leverage.

Consolidated net debt can be reconciled to the borrowings as follows:

RUB millions                         31 December 2020 30 September 2020 
Long-term borrowings                 640 570          620 256 
Short-term borrowings                83 391           73 566 
Liability to the Russian Federation  -                4 644 
Total borrowings                     723 961          698 466 
Consolidated finance lease1          18 5072          19 4783 
Consolidated total debt              742 468          717 943 
Cash and cash equivalents            (113 693)        (110 382) 
Deposits in banks                    (1 777)          (1 499) 
Consolidated net debt                626 998          606 063 

1 In accordance with the standard IAS 17

2 Including RUB 1,572 million of short-term finance lease

3 Including RUB 1,654 million of short-term finance lease

****

Full press please including financial statements is available on Sistema's website http://www.sistema.com/ investors-shareholders/financial-results/ and in the Attachment to the current release. -----------------------------------------------------------------------------------------------------------------------

[1] Here and hereinafter results for 4Q 2020 and FY 2020 are presented to reflect the divestiture of AGK Yuzhny. Results of previous periods have been restated to reflect the effect of the divestiture.

[2] Here and hereinafter please see Appendix A of the financial results press-release for 4Q 2020.

[3] Ozon's financial results are not consolidated within Sistema's financial statements. Investments in Ozon are reflected in Sistema's financial reporting using the equity method. The share of Ozon's profit/loss attributable to Sistema is included in Sistema's operating results. Investments are reflected at book value adjusted for attributable share of profit/loss for the period, and are not marked to market.

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