MTS Reports Q2 2021 Results

August 19, 2021

• Q2 2021 Consolidated Group Revenue increased 10.6% year-over-year to reach RUB 128.6 bn.
• Q2 2021 Group Adjusted OIBDA[1] increased 10.2% year-over-year to RUB 57.2 bn.
• 2021 Full-Year Guidance revised upwards to high-single-digit growth in revenue as well as OIBDA growth of at least 5%, while Cash CAPEX guidance was reaffirmed at approximately RUB 100-110 bn.

MOSCOW, August 19, 2021 - Mobile TeleSystems PJSC ("MTS" or "the Company") (NYSE: MBT; MOEX: MTSS), Russia's largest mobile operator and a leading provider of media and digital services, announces its second-quarter 2021 financial and operating results. Overall, the Company saw both Consolidated Group Revenue and Adjusted OIBDA1 accelerate to double-digit year-over-year growth, with solid top-line performance across core telecom services as well as new segments beyond connectivity.

Group Revenue increased 10.6% year-over-year in Q2 to reach RUB 128.6 bn on the back of growth in all key segments: core connectivity, fintech, retail sales, B2B cloud & digital solutions, and media services. In Q2 2021, Group Adjusted OIBDA increased 10.2% year-over-year reaching RUB 57.2 bn, with significant positive impacts coming from MTS Bank and telecom services.

Group Net Profit in Q2 2021 increased 46.5% year-over-year to RUB 17.2 bn. Notably, MTS Bank delivered a materially significant contribution to Group profitability. In H1 2021, MTS Bank net interest income increased 22.1% and net fee and commission income grew 123.6% versus the prior-year period. Overall, MTS Bank 6M 2021 net profit amounted to RUB 3.4 bn.

Given its sustained performance, the Company upgraded its full-year 2021 outlook to high-single-digit growth in revenue as well as OIBDA growth of at least 5%, while expected Cash CAPEX for the year was reaffirmed at approximately RUB 100-110 bn.

Vyacheslav Nikolaev, President & CEO, commented: "I'm happy to note that in Q2 we gained additional momentum and closed out the first half of the year with robust results across the board. In telecom services, we saw solid mid-single-digit organic growth in both mobile and broadband. Beyond connectivity, our performance was even more impressive with non-core segments - Fintech, Retail, Media, and Cloud & Digital Solutions - together contributing more than half of Group revenue growth year-over-year. MTS Bank in particular has now achieved sufficient scale to become an engine of profitability for the Group as a whole.

"Operationally, we made robust progress across key segments of our digital ecosystem, reflected in strong customer acquisition and retention in all segments. In Media, the number of OTT TV viewers (rebranded as KION in 2021) nearly tripled year-over-year to 3.2 million, while MTS Bank added around 100,000 new clients during the quarter. Overall, the number of MTS ecosystem customers grew by almost a million in Q2, reaching 7.4 million. Our ecosystem approach unlocks new opportunities to capture incremental revenue from our mobile subscriber base, which in Q2 increased to 78.6 million - a level last seen in 2019 prior to the pandemic.

"In light of our strong performance in H1 we have increased our guidance for the year as a whole. We remain focused on further growing and gaining traction with our digital ecosystem as we seek to create additional value for shareholders."

Consolidated MTS Group key figures[2] (RUB bn)

More information at: http://ir.mts.ru/investors/financial-center/financial-results/default.aspx

[1] Adjusted OIBDA for 2Q 2020 doesn't include a loss from impairment of non-current assets of RUB 929 mln. Adjusted OIBDA for 2Q 2021 doesn't include a reversal of impairment of non-current assets of RUB 4 mln.

[2] Financials for 2020 have been restated due to the deconsolidation of NVision Group.

[3] Adjusted OIBDA for 2Q 2020 doesn't include a loss from impairment of non-current assets of RUB 929 mln. Adjusted OIBDA for 2Q 2021 doesn't include a reversal of impairment of non-current assets of RUB 4 mln.

[4] Adjusted OIBDA for 2Q 2020 doesn't include a loss from impairment of non-current assets of RUB 938 mln.

[5] Net of cash proceeds under sharing agreement.

[6] Excluding lease obligations.

[7] Including the effects of IFRS 15 and 16.