Key highlights and ESG topics

8 November 2018

ALROSA

DISCLAIMER

2

The below applies to the presentation (the “Presentation”) following this important notice, and you aretherefore advised to read this important notice carefully before reading, accessing or making any otheruse of this Presentation.

This Presentation contains statements about future events and expectations that are forward-lookingstatements. Any statement herein (including, without limitation, a statement regarding our financialposition, strategy, management plans and future objectives) that is not a statement of historical fact is aforward-looking statement that involves known and unknown risks, uncertainties and other factors whichmay cause ALROSA’s actual results, performance or achievements to be materially different from anyfuture results, performance or achievements expressed or implied by such forward-looking statements.Past performance should not be taken as an indication or guarantee of future results, and norepresentation or warranty, express or implied, is made regarding future performance. The informationand opinions contained in this document are provided as at the date hereof (unless indicated otherwise)and are subject to change without notice. ALROSA assumes no obligation to update, supplement or revisethe forward-looking statements contained herein to reflect actual results, changes in assumptions orchanges in factors affecting these statements.

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Some figures included in this Presentation have been subject to rounding adjustments.

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For notes:

GLOBAL DIAMOND JEWELRY MARKET GROWS BY 4%

6269

76 78 81 79 7983

2010 2011 2012 2013 2014 2015 2016 2017

Diamond jewelry sales

3

• World diamond jewelry sales increase by 4% annually since2010

• In 2017, global diamond jewelry sales grew 5% across all theregions

• North America and Asia-Pacific, which comprise ~70% ofdiamond jewelry market, enjoyed even stronger demand fordiamond jewelry in H1’18 amid better consumer sentimentand a favorable macro environment

• US, India and China key drivers for diamond jewelry demandin the long-term are:

o USA (50% total market): continued real disposableincome growth;

o China: economic growth and expansion of the Chinesemiddle class, early stage of adoption of bridal rings giftstradition;

o India: the ongoing expansion of bridal diamond jewelryand the middle class.

Outlook for world diamond jewelry demandCAGR 2016-2030F

Source: Company’s estimates, AWDC Bain report “The Global Diamond Industry 2017” (December 2017)

Diamond jewelry market$ bn

1%

3%2%

1% 1%

4%

7%

4% 4% 4%

US India China Other Total

Base case scenario

Optimistic scenario

123

197 194175 172 170

149 136154 164

199

2010 2011 2012 2013 2014 2015 2016 2017 Q1'18 Q2'18 Q3'18

ROUGH DIAMOND: SALES AND PRICES

ALROSA

4

• Rough diamond sales follow trend of demand for diamondjewelry

• In 9M 2018, global diamond sales in value terms were up 4%on demand recovery and stronger prices

• ALROSA’s average realized prices of gem-quality roughdiamonds recovered from two major “one-off” factors –namely monetization reform in India, and anti-briberyinitiatives in India - and returned to its 5-year average levels

• In Q3 average realized price for gem-quality diamonds wasup to 199 $/ct driven by better diamond market demand

• $160 per carat – 5Y average realized price of gem-qualityrough diamonds

ALROSA’s average realized price$/ct

Source: Company’s estimates, AWDC Bain report “The Global Diamond Industry 2017” (December 2017)

Rough diamond sales demonstrates moderate recovery$ bn

Gem-quality diamonds

28% 28% 29% 32% 31% 28% 29%

2011 2012 2013 2014 2015 2016 2017

9.0 8.2 8.6

9М'16 9М'17 9М'18

Others

~15 ~15 ~15 ~16

~12~15 ~15

ROUGH DIAMOND: OUTPUT & MIDSTREAM SITUATION

ALROSA

5

• In 9M 2018, major diamond producers’ output decreased by3% y-o-y, elsewhere output remained flat

• Q3 2018 midstream inventories dropped to a multi-year lowsmainly on destocking of small stones

• Indian imports of rough were seasonally down; no excessivebuying of rough in the midstream suggests now inventoryoverhang in the system

Midstream rough and polished diamond inventories$ bn

Note: * data based on results of ALROSA and other major diamond producers (De Beers, Catoca, Petra Diamonds, Mountain Province and Stornoway Diamond)

Decrease in global diamond output, 6M 2018*m ct

Others

9 10 10 10 7 9 1130 27

24 27 31 30 26 26 28

81 81

33 37 41 40 33 35 39

111 108

Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 9M'17 9M'18

41.539.5

41.342.7

40.3 41.0 41.840.1

Q4'14 Q4'15 Q4'16 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

ROUGH DIAMOND: SUPPLY TO REMAIN TIGHT

6

• Supply is well consolidated with BIG-3 controlling 2/3 ofglobal supply

• Supply is quickly reacting to the demand deterioration

• Lack of new “quick-to-develop” deposits and minesdepletion

• Significant decrease in supply is expected by 2020,

• … with limited impact on the market due to sub-par qualityof the products (brown diamonds with 80% price discount tostandard gem-quality)

World diamond production forecastm ct

Source: Company’s analysis, Kimberley Process statistics, diamond mining companies’ forecast

~70% of global rough diamond output controlled by BIG-3

ALROSA 26% 22% De Beers

14% Rio TintoOther 23%

7% DDC5% CatocaPetra Diamonds 3%

151m cts

125 127134

151145 146

150

136 135 133129 126

2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F

ALROSA: ASSETS GEOGRAPHY

7

Russian Federation

Republic of Sakha (Yakutia)93% of 2017 diamond production

6 Open-pit mines4 Underground mines14 Alluvial deposits

2017 production: 37.0 m ct

Arkhangelsk region7% of 2017 diamond production

2 Open-pit mines

2017 production: 2.6 m ct

Moscow

Arkhangelsk

Yakutsk

Mirny

HIGHEST QUALITY ASSETS & LARGEST RESERVES

8

• ALROSA develops world’s largest reserves

• Cost production at 44 $/ct while Company’s average realizedprice of gem-quality rough diamond is 160 $/ct

• Cost of underground production per carat is close to open-pit mining while grades at underground are higher by over 3x

• Output to stabilize at ~38 m ct, which is slightly above 2013-2016 volumes

High profitability margin maintained even the bottom of the cycle$/ct

Source: Source: JORC as of 01 July 2016 (Micon), Company’s estimates

Diamond reserves according to JORCm ct

653434

132 95 48

377inferred

resources

ALROSA Peer 1 Peer 2 Peer 3 Peer 4

Open-pit mines Alluvials

2839 44

78

$180

$100

$60

$30

5Y av. realized price of gem-quality rough diamonds176 $/ct160 $/ct136 $/ct

max

min

42

AikhalUG mine

InterUG mine U

dac

hn

yU

Gm

ine

2.5 21.1 3.7 8.0 1.6

ALROSA’s diamond production to stabilize at 37-38 m caratsm ct

36.9 36.2

38.337.4

39.6

36.6~37.5-38.0

2013 2014 2015 2016 2017 2018Е 2019F

ALROSA: KEY HIGHLIGHTS

9

• Revenue is set to stabilize (ex FX effect) on stable salesvolumes

• Company demonstrates stable – above 40% margins – wellsupported by cost control / high utilization rates at the mines

• Capex to trend down as growth projects are up and running

• Targeted leverage at between 0.5x to 1.0x of NetDebt/EBITDA

ALROSA’ EBITDA and EBITDA marginRUB bn

Source: Company’s estimates

Sales and revenueRUB bn

207 225

317275 303

38.4 30.2 40.0 41.2 ~39

2014 2015 2016 2017 2018Е

Revenue Diamond sales, m ct

93118

176

127160

45% 53% 56% 46% 53%

2014 2015 2016 2017 2018E

EBITDA EBITDA margin

ALROSA’ capex and free cash flow indicatorsRUB bn

36 34 32 30 3042 41

111

71

112

2014 2015 2016 2017 2018Е

CAPEX FCF

ALROSA: DEBT POSITION

10

• Total debt amounted to USD 1.3 bn, down USD 310 m year-to-date

• Liquidity decreased by 18% q-o-q to USD 753 m mainly dueto 2017 dividends of RUB 38.6 bn payment

• Net debt / EBITDA reduced to 0.2x vs 0.7x earlier this year onthe back of robust free cash flow

• Active debt management drove interest payment 50% down(year-on-year)

• S&P upgraded ALROSA credit rating to investment grade inJuly 2018

Liquidity position$ m

Source: Company’s estimates

Debt profile changes$ bn

Cash &equivalents

4.2 3.5 3.1 2.3 1.6 1.3

3.93.1 2.8

1.4 1.50.6

1.9x 1.9x 1.7x

0.5x 0.7x0.2x

2013 2014 2015 2016 2017 30.09.2018

Net debtTotal debt ND/EBITDA (RUB)

753

3,121

3,874

30.09.2018

Credit lines

Debt repayment schedule$ m

0

343

954

6 6 2

2018 2019 2020 2021 2022 2023

Bank loans

Eurobonds

CASH RETURN POLICY

35%

50%

50% 50%

75%

50%

70%

26%37%

59% 52%70%

2013 2014 2015 2016 2017 H1'18

11

Payout ratio as % of FCF based New dividend policy

Payout based on Net Income (“Old” Dividend policy)

Dividend payout ratios

Dividend payment$ m

277 317204 275

1,145

666*0.04 0.04

0.03 0.04

0.16

0.09*

2013 2014 2015 2016 2017 6М'18

USD per share

• In August 2018, ALROSA’s Board of Directors approved anupdated dividend policy:

o free cash flow as the basis

o payments twice a year

o minimum payout at 50% of IFRS net income

• Dividend pay-out estimate under the new policy:

❶ Net debt / EBITDA < 0.0 – over 100% FCF

❷ Net debt / EBITDA: 0.0–1.0 – 70–100% FCF

❸ Net debt / EBITDA: 1.0–1.5 – 50–70% FCF

• Based on the Company’s performance in 6M 2018, theGeneral Meeting of Shareholders approve dividends ofRUB 5.93 per share (70% of free cash flow)

• Targeted leverage at between 0.5x to 1.0x of NetDebt/EBITDA

Note: * based on FX rate as of 30.09.2018

ENVIRONMENT

12

• 2017 capex related to environmental activities stood at thelevel of RUB 4.4 bn

• Efficient disclosure are acknowledged by ESG ratings:

o 3rd place (out of 33) in the “First rating ofenvironmental performance of mining companies inRussia”

o Rated among top-10 Russian companies withtransparent corporate reporting according toTransparency International-Russia research

ALROSA plans to reduce CO2 emissions mostly arising from the trucks use000’ t

Note: 2017 numbers does not include the Heat and power supply company, which was removed from PJSC “ALROSA” structure starting from 01.01.2017 and became its subsidiary PTWS LLC

Financing of environmental activitiesRUB bn

530460 465

2015 2016 2017

Area of disturbed land continue to decreaseha

1,414

1,080

571

2015 2016 2017

6.65.9 6.0

5.5

4.4

2013 2014 2015 2016 2017

ENERGY RESOURCES

13

• ALROSA aims to increase share of renewable energyconsumption to 95%

• 2017 unit energy consumption decreased by 7% y-o-y to0.327 GJ/carat meanwhile diamond production increased by6% y-o-y

• 2017 water intake for production purposes decreased by 2.3xmainly due to excluding of the Heat and power supplycompany, which was removed from PJSC “ALROSA” structurestarting from 01.01.2017 to subsidiary PTWS LLC

Per unit energy consumptionGJ/carat

0.3230.351 0.327

2015 2016 2017

Water intake (production)m m3

12.511.3

4.9

2015 2016 2017

Share of renewable energy consumption

Now

87%

Target level

95%

ENVIRONMENT: CASE STUDIES

14

In order to improve energy efficiency ALROSA implementstechnical measures, such as:

❶ Fuel saving

Diversification of fuel types, replacement of worn-out isolationin heat supply network, replacement of heating radiators, usingheat-reflecting screens and others

❷ Thermal energy conversation

Installation of a domestic heating plant, plate and frame heatexchanger and others

❸ Electric energy conservation

Installation of line-conditioning filters, optimization of powerequipment operations, regulation of lighting systems, thermalscreens and others

❹ Water saving

Introducing the in-house water circulation scheme in the tailingsfacilities of Udachny Division and others

Effect from measures for energy conservation000’ DJ

5630

75102

200

2013 2014 2015 2016 2017

Effect from measure for water saving 000’ m3

Measure 2

Measure 3

Measure 1

15 8

23979

982

2013 2014 2015 2016 2017

Measure 3

• In 2017 the headcount declined by -2% to 36.4 thousandemployees

• Woman account for 37% of total staff members and 32% ofexecutive staff – according to PWC, ALROSA is a leader in thisindicator among industry’s companies

• The majority of staff are employees of 30-50 years – 57%

• The average age of workers – 41.4 years

• Most of employees (86.7%) work in the territory of WesternYakutia where the main production facilities are located

OUR PEOPLE

15

Total headcount as of the end of the year000’ people

62% 62% 62% 63% 63%

38% 38% 38% 37% 37%

40.3 40.7 40.237.2 36.4

2013 2014 2015 2016 2017

Age groups as of 2017% of the total headcount

Territorial distribution of staff% of the total headcount

>50 years

30-50 years57%24%

19%

<30 years

Women

Men

Moscow

Yakutia

87%

4%4%

5%

Arkhangelsk

Other

RESPONSIBLE ENTERPRISE

16

2017 Company’s key corporate social programs results:

❶ Wellness and recreation of employees and their family members

o 14.0K persons used corporate voucher for wellness and recreationo 5.2K people visited ALROSA’s health centers at the Black Sea

❷ Health

o The diagnostic and treatment services were provided to 2.2K peopleo 5.0K employees were screened under the programs aimed at prompt

exposure and reduction of illnesses

❸ Culture and sports

o ALROSA’s sport clubs held 550 athletic, wellness and healthcareevents, culture clubs held more then 4K events

❹ Housing

o Constructed 130-apartment house in Udachny

❺ Private pension plans

o Company transferred RUB 2 bn to the JSC Almaznaya Osen Non-StatePension Fund

o 19.3K persons receive non-state pensions under the pensioncontracts

2017 funding of corporate social programs RUB m

2,001

536

226

399

1,017

Program 5

Program 4

Program 3

Program 2

Program 1

SUPPORT TO LOCAL COMMUNITIES

17

• As one of the largest industrial companies ALROSAresponsible to the society and operation regions

• In 2017, social expenditures amounted to c. RUB 6 bn

• ALROSA makes social investments in several areas:

o Regional development programs, including charityprojects in education, healthcare, culture and sports,and urban development

o Sponsorship and charity projects of the federal level –ALROSA supports federal initiatives in education,culture and sports

• ALROSA’s charity efforts are based on:

o High social value of sponsored projects

o Targeted financial and sponsorship aid

o Transparency, accountability and intended use of funds

o Joint decisions on the allocation of aid

Social expendituresRUB m

2017 social expenditures breakdown% of total expenses

4,609

5,7075,410

6,4855,973

2013 2014 2015 2016 2017

33%

55%

55% Charity expenses

33% Local infrastructure maintenance

5% Medicine

2% Education

5% Other expenses

HEALTH AND SAFETY

18

• Expenses on labor protection and industrial safety per 1employee are stable at level RUB 39,000 since 2015 andtotals RUB 1.1-1.4 bn per year

• LTIFR1 in 2017 was increased up to 0.94 due to Mir mineaccident in August which injured 13 miners

• In 2017, ALROSA began building an independentmanagement vertical structure in H&S functions – the safetyservices were withdrawn from the supervision of divisions’chief engineers and organized to report to ManagingDirector.

• Established permanent industrial safety committees:

o Central Industrial Committee under the supervision ofCEO (quarterly meetings to define the strategy)

o Committee under the supervision of Managing Director(quarterly meetings to strategy implementation)

o Committee under the supervision of the division head(weekly meetings to review any violations and developremedial measures)

Independent management structure to ensure industrial safety

Note: (1) number of lost time injuries per 1 m hours worked

Health and safety costs 000’ RUB per 1 person

29.9 33.339.3 38.9 39.1

0.48 0.21 0.45 0.380.94

2013 2014 2015 2016 2017

LTIFR1

H&S investments

CEO

Deputy CEO for H&S

Managing Director

H&S Department

Central Committee

Managing Director’s Committee

Division Committee

Divisions’ directors

H&S Services

GOVERNANCE

19

• The Corporate Governance Code was approved bySupervisory board in 2013

• Board has three active committees with independentdirectors:

o The Strategic Planning Committee

o The Auditing Committee

o The HR and Remunerations Committee

• Continuous progress in corporate governance reflected inpositive rating dynamics

• Regular and transparent disclosure

• New initiatives are under way:

o Corporate Strategy till 2024

o HR Strategy with the overhaul of the organizationstructure and motivation schemes (stock optionprogram is one of the initiatives)

Corporate governance rating

Source: Russian Institute of Directors

Supervisory Board compositionNumber of members

Independent directors2 3 5 4 4

12 11 9 9 10

15 15 15 15 15

2014 2015 2016 2017 2018

Executive directors

Other

7+ 7+7++ 7++ 8

2015 2016 2017 2018 Oct-2018

Thank you!

M: +7 985 760 55 74E: st@alrosa.ru

Head of Corporate FinanceSergey Takhiev

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