HMS GroupWood Conference Presentation

December 2016

HMS GROUP AT A GLANCE

Overview

HMS Group is a large industrial machinery producer – theleading manufacturer of industrial pumps and compressors inRussia and the CIS

12 manufacturing facilities in Russia, the CIS and Germany and6 R&D centers, including one of the largest pump-testingfacilities in Europe

Leading market positions in industrial pump production and oil& gas equipment markets, which are characterized by highentry barriers

Experienced integrated management, sales and R&D teams.Top-management of HMS Group leads the company since itsestablishment in 1993

Key financials 2011 – 2015

25.531.5 32.4 32.4

37.3

5.6 6.1 5.2 5.3 7.4

21.8% 19.4% 16.2% 16.3% 20.0%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

0

10

20

30

40

50

60

2011 2012 2013 2014 2015

Revenue EBITDA EBITDA margin

Key industries: oil & gas, nuclear and thermal power generation, petrochemistry and wastewater industry

Top-notchclients: Transneft

Rub bn

2

Industrial pumps

44% of total Revenue FY2015

55% of total EBITDA FY2015

Engineering, manufacturing and installation ofpumps and pump related products

Compressors

9% of total Revenue FY2015

4% of total EBITDA FY 2015

Design, engineering, manufacturing, deliveryand installation of compressors, compressorpackages and compressor stations

Source: HMS Group, Revenue and EBITDA 2007-2013 are adjusted for Sibkomplektmontazhnaladka, which was divested in 2013

Oil & gas equipment and engineering

41% of total Revenue FY2015

44% of total EBITDA FY2015

Manufacturing and installation of oil & gasequipment, including modular: pump stations,metering equipment, oil, gas, and waterprocessing units, tanks, vessels and etc.

• Focus on core products• Entering new markets• Optimization of the

business portfolio

HMS GROUP EVOLUTION

2013-Present

HMS Group enjoys the largest installed base in Russia

Pump-and-Compressor-basedintegratedsolutions

2012

Pump-based integrated solutions

2009-2012

Oil & gasconstruction

2007-2008

Modularequipment design& manufacturing

2004-2006

Pump design & manufacturing

2003

Pump trading

1993-2002

87%98%

57%

87%70%

13%

2%

43%

13%30%

0%

20%

40%

60%

80%

100 %

120 %

Oil upstream(Water

injectionpumps)

Oil pipelinepumps,

Transneft

Thermalpower

generationpumps

Water wellpumps

Nuclearpower

generation -feed pumps

HMS Group Other

Upstream MidstreamThermalenergy

WaterNuclear energy

Oil & gas

Optimization of the business portfolio3 HMS entered oil & gas infrastructure construction segment in 2007 with a view to offer

integrated solutions Following the financial crises, this segment saw a sharp decrease in profitability HMS Group decided to exit the segment and continues to develop Engineering and

Procurement (“EP”) business, based on HMS products and engineering competences

Mature business platform1 HMS Group business is based on the mature and established business platform with a focus

on products where the Company has unmatched R&D expertise and production capabilities The company has stable recurring business with confirmed order backlog for the next year EU presence: HMS Group has access and is conducting business with EU engineering

companies (Siemens, Alstom, etc.) through its EU-based subsidiary Apollo Goessnitz Business is to be further developed organically, i.e. currently there are no plans for M&A Further development will be held with low CAPEX at ca. 1.5x of D&A level

Source: Frost & Sullivan, HMS Group

Growing market share in traditional and expanding into new markets

3

Entering new markets2 Further development of business with Gazprom & other majors in oil & gas industry by

executing large customized projects in all key segments of HMS Group Customers in new markets are already a part of the client base and offer strong future

opportunities Return to the market of oil transportation on the back of localization of trunk line pumps in

Russia Oil & gas refining and petrochemicals represents another growth area with expanded

strong references, incl. international engineering majors

Evolution and development of the core products expertise

Business platform and core expertise are established and provide strong base for future growth

Source: HMS Group

Advanced R&D is the basis for value-added integrated solutions

4

Recurring businessIntegrated solutions & highly

customized equipment

Size Numerous small-size contracts Single large-scale project

Impact of R&D Medium Critical

Technological entry-barriers Medium High

Competition type Price R&D and references

Competition level High Limited

Revenue growth potential Limited High

Revenue downside potential Limited Visibility for at least 1.5 years

Repeat business Very significant Possible

Aftermarket demand Average High

EBITDA margin Average Higher than average

Share of revenue generated by large projects

BUSINESS MODEL: COMBINATION OF LARGE INTEGRATED PROJECTS & RECURRING BUSINESS

Super-blocks X-9001, X-9004 for Vankor oilfield, RosneftProject and designing stage

ESPO-1 oil transportation station, TransneftProject and designing stage

Examples of large integrated projects

Source: HMS Group

Development stage Completion stage Development stage Completion stage

75%66%

73%88%

80%73%

23%

29%24%

13%20%

27%

2010 2011 2012 2013 2014 2015

Revenue from large integrated projects

Revenue from recurring business

RECENT PROGRESS IN DEVELOPMENT OF EXPORT BASE AS A RESULT OF 5-YEAR LONG PROGRAM

5

Iraq

Iran

Europe / European EPC-companies (Apollo)

International EPC-companies in Russia & CIS

Nuclear power1

Other regions2

Special pumps

Standard pumps

Europe (via Apollo brand) and Middle East

Compressors

Iran

Activities already completed Target markets by geography

Significant progress in tailoring existing products to the requirements of international customers

International sales offices setup in Milan Dubai and Teheran (Iran), expanded existing sales teams in Russia, Ukraine and Germany

Registration in Approved Vendor List of major international clients

Reference contracts awards by leading global oil & gas operators and EPC contractors

Apollo acquisition and integration into HMS Group

1) Sales by group company Nasosenergomash Sumy (“NEM”) to international projects of RosatomGroup

2) Other Middle East countries (Kuwait, Saudi Arabia), South America, Northern Africa, South-Eastern Asia

3) International Electrotechnical Commission

Apollo and HMS Group major international clients

Power & Metallurgy

Oil & gas

Chemicals& other industries

Source: HMS Group

36%

Rosneft, 17%

Gazprom, 15%

Gazprom Neft, 11%

Transneft, 6%

Lukoil, 4%

Tatneft, 3%

Surgutneftegas, 3%

CNEIC*/**, 2%

BP Iraq, 2%

Rosatom**, 1%

37.3 bn RUB

CUSTOMER BASE DEVELOPMENT

*China Nuclear Energy Industry Corporation**Project in nuclear power generation industrySource: HMS Group

% of revenueAmount, mn RUB

Top-10 customers 64% 24,012

Other customers 36% 13,284

Total 100% 37,296

Revenue breakdown by clients FY2015

6

Well-diversified client base of 5,000 names

Strong and stable base of “Blue-chip” clients, that includes the largest oil & gas companies in Russia

Largest clients operate through numerous contracts in different subsidiaries, taking independent purchasing decisions. Therefore client diversification

by legal entities (right chart) is much higher than client diversification by group of companies (left chart)

The largest installed base in key segments ensures sustainable recurring business

Cross-sale: HMS Group sells to its existing client base additional equipment, that is new to the clients’ business

Significant growth potential from new markets (please see slides 7)

49%

17%

11%

7%

5%3%2%3%

Revenue breakdown by industries FY2015

Petrochemicals

37.3 bn RUB

Water supply

Oil extraction

Gas recovery and transportation

Oil transportation

Nuclear powerThermal power

Metals & mining

Other industries

Source: HMS Group

LEADER IN BOTH LARGE PROJECTS AND STANDARD PRODUCTION SEGMENTS

Established top player in large scale projects (with “blue-chip” client base)

Company enjoys sustainable recurring business from standard pumps and compressors with over 5,000 clients

WELL-DIVERSIFIED QUALITY CLIENT BASE

Over 5,000 small and medium clients generate ca. 75% of revenues

The blue-chip client base covering nearly all oil & gas majors

Largest clients operate through numerous contractsin different subsidiaries, taking independent purchasing decisions and offering numerous points of entry

MARKET SHARE AND INSTALLED BASE

HMS is a major player in pumps, oil & gas equipment and compressors, with large-to-dominant market shares and established relations with clients (including follow-on services)

The largest installed base in Russia

DELIVERY OF MISSION-CRITICAL EQUIPMENT

Crucial to clients: installed at the final stage of construction projects and difficult to replace

Affordable within clients’ project budgets: equipment accounts for less than 2-3% of total project CAPEX

As a result, clients do not postpone their purchases or negotiate equipment prices down

WELL ESTABLISHED BUSINESS PLATFORM/

LOW LEVERAGE

MANAGEMENT FOCUSES ON MAINTENANCE OF MODERATE DEBT POSITION

Current Net debt / EBITDA ratios of around 1.8x are conservative and are in line with BBB/BB rating categories

Naturally hedged: match in revenues, costs and debt currency structures – ca. 98% of debt is Ruble denominated

Short-term debt remains at low levels and is actively managed

FACTORS OF BUSINESS SUSTAINABILITY

7

LOW CAPEX NEEDS AND FLEXIBLE DIVIDEND POLICY

Fully invested business – modest maintenance CAPEX needs at ca. 1.5x of D&A level

All major acquisitions have already been completed

No strict dividend commitments allow to minimize payments during harsh market environment

1 2

3 4

5 6

GROWTH DRIVERS FOR 2016-2017 AND LONG-TERM

8

GAZPROM & OTHER MAJORS’ PROJECTS IN OIL & GAS INDUSTRY

Compressors (compressor business segment) Pumps Pressure vessels Technological oil & gas engineering (EP* contracts)

OIL TRANSPORT

Return to the market of oil transportation on the back of localization of main line pumps in Russia

EXPORT

International sales based on already developed product lines, secured references and integration of Apollo (German subsidiary)

Sales to the CIS countries through development of more focused sales structure

OIL & GAS REFINING ANDPETROCHEMICALS

Expanded strong references in oil & gas refining and chemicals, incl. international engineering majors

Enhanced product range of pumps, compressors, pressure vessels according to API and ASME

ENGINEERING (EP) IN OIL & GAS

Capitalizing on and further development of expertise in oil & gas upstream technological engineering

API PUMPS

A full-scale line of pumps for oil & gas applications according to international standards has been already developed for:

– International sales– Oil & gas refining and petrochemical

industries in Russia

COMPRESSORS

Integration, transformation & modernization of KKM is starting to deliver EBITDA growth

LOCALIZATION OF TECHNOLOGIES TO BENEFIT FROM IMPORT SUBSTITUTION

Localization of Ukrainian and German pumps in Russia (oil transport, oil refining, thermal & nuclear power generation pumps, heavy pumps for water)delivers cost savings

GROWTH

OF HMS

MARKET SHARE

IN INDUSTRIAL & GEOGRAPHICAL BREAK-DOWN

Growth markets Key products & technologies

* Engineering & Procurement

HMS GROUP TO LEVERAGE ON ALREADY ACQUIRED COMPETENCES AND THEIR FURTHER DEVELOPMENT

9

CORPORATE GOVERNANCE

HMS Group has a stable and long-term composition of its

Board of Directors and top-management:

HMS Group is the core business of the largest

shareholders

CEO and CFO are one of the founders of the Company

and they manage HMS Group since its establishment in

1993

HMS’ 18 managers purchased c. 3.4 percent share within

2016 under the Buy-back program

HMS Group Board of Directors consists of three Executive

Directors and five Non-executive Directors, including two

Independent Directors

As a general rule, the Company targets to pay out ca. 50% of

the Profit attributable to Shareholders of the Company

subject to capital constraints such as debt and liquidity

position and forecasts

HMS Group plans to pay out dividends twice a year

Litigations involving the company:

Grigorishin’s Litigation: no changes since the last

announcement (April 2014)

Tsoy’s Litigation: all claims were withdrawn in June 2016.

the company was not required to pay anything in

connection with this litigation

Source: HMS Group, as at 30 September 2016

The Board of Directors Comments

Yury SkrynnikExecutive Director

ShareholderIn company since 2005

Nikolay YamburenkoChairman of the BoardNon-executive Director

ShareholderIn company since 2003

Philippe DelpalIndependent

Non-executive Director

Andreas PetrouNon-executive

Director

Gary YamamotoIndependent

Non-executive Director

Artem MolchanovExecutive Director

Managing Director (CEO)Shareholder

In company since 1993

Kirill MolchanovExecutive Director

First Deputy CEO (CFO)Shareholder

In company since 1993

Vladimir LukyanenkoNon-executive

DirectorShareholder

10

Treasury shares3.7% Management

27.8%

Vladimir Lukyanenko27.4%Free-float

21.3%

German Tsoy19.8%

Shareholding structure by legal entities Shareholding structure by holders (effective share)

Share in HMS Group

Managers and persons closely associated with management 27.8%

Vladimir Lukyanenko 27.4%

Other GDRs holders (Free-float) 21.3%

German Tsoy 19.8%

Treasury shares 3.7%

Share in HMS Group

HMS Technologies 71.5%

GDRs Holders, where: 24.7%

- managers and persons closely associated with management 3.4%

- other GDRs holders (Free-float) 21.3%

Treasury shares 3.7%

HMS Technologies71.5%

Free-float21.3%

Management3.4%

Treasury shares3.7%

GDRs Holders

SHAREHOLDING STRUCTURE

Source: HMS Group, as on 10 October 2016

Financial results

Business & Outlook

11

20,379 25,515 31,460 32,358 32,351 37,296 36,098 41,071

2010 2011 2012 2013 2014 2015 2015 6mLTM

2016 6mLTM

3,670 5,562 6,101 5,238 5,272 7,446 6,984 7,038

18.0%

21.8%

19.4%

16.2% 16.3%

20.0% 19.3%

17.1%

2010 2011 2012 2013 2014 2015 2015 6mLTM

2016 6mLTM

EBITDA adj., Rub mn EBITDA margin

2016 6m 2015 6m chg, yoy

Revenue 20,363 16,589 +23%

Gross profit 4,977 5,035 -1%

EBITDA 2,956 3,364 -12%

Operating profit 1,771 2,117 -16%

Profit for the year 696 1,101 -37%

Gross margin 24.4% 30.3% -591 bps

EBITDA margin 14.5% 20.3% -576 bps

Operating margin 8.7% 12.8% -406 bps

Net income margin 3.4% 6.6% -322 bps

Total debt 16,113 16,146 0%

Net debt 12,752 14,705 -13%

EBITDA LTM 7,038 6,984 +1%

Net debt to EBITDA LTM 1.81 2.11

ROCE 16.1% 16.6% -51 bps

ROE 5.7% 9.2% -353 bps

FINANCIAL HIGHLIGHTS

Financial highlights, Rub mn Revenue performance, 2010–2016 6m LTM

EBITDA performance, 2010–2016 6m LTM

CAGR 2010-2015: 13%

Source: Company data, management accounts, exclusive of SKMN

Source: Company data, management accounts, exclusive of SKMN (Revenue and EBITDA 2010-2013 data are adjusted for Sibkomlektmontazhnaladka, asset sold in Dec 2013)Source: Company data, management accounts

12

CAGR 2010-2015: 15%

7,274 7,119

1,175 1,108

16.1% 15.6%

2015 6m 2016 6m

Revenue OGE, Rub mn EBITDA OGE, Rub mn EBITDA margin OGE, %

Revenue -2% yoyEBITDA -6% yoy

1,3561,200

133 52

9.8%

4.3%

2015 6m 2016 6m

Revenue EPC, Rub mn EBITDA EPC, Rub mn EBITDA margin EPC, %

1,391

4,661

47441

3.4%

9.5%

2015 6m 2016 6m

Revenue Compressors, Rub mn EBITDA Compressors, Rub mn EBITDA margin Compressors, %

8,149 7,718

1,927909

23.6%

11.8%

2015 6m 2016 6m

Revenue Pumps, Rub mn EBITDA Pumps, Rub mn EBITDA margin Pumps, %

SEGMENTS OVERVIEW

Revenue -5% yoyEBITDA -53% yoy

EPCCompressors

– Revenue decreased by 5% yoy to Rub 7.7 bn

– EBITDA declined by 53% yoy and EBITDA margin went down to 11.8% due to a decline in the share of large contracts in revenue and EBITDA, a decline in demand for oilfield equipment repair services, and postponement of some deliveries to 2H 2016

– 2H 2016 is expected to be substantially better in terms of revenue and EBITDA

– Revenue and EBITDA almost stable, with 2% yoy and 6% yoy decline correspondingly, because of less large contracts executed

– EBITDA margin at 15.6% due to a higher-than-average margin of ordinary business

– 2H 2016 is expected to deliver comparable results

– Revenue grew by 235% yoy to Rub 4.7 bn and EBITDA increased by 845% to Rub 441 mn due to conclusion of more large contracts

– EBITDA margin up to 9.5 %

– 2H 2016 results should be comparable to 1H2016

– EPC continued to show weak financial results in the both construction and project & design sub-segments because of tougher competition and pricing pressure in the oil & gas engineering and construction market in Russia

– The company expects weak results in 2H 2016

Oil & gas equipmentPumps

13

From 2015 onward, HMS Group will report a total segments’ revenue, incl. external and intersegment revenue, for more consistent demonstration of the performance of each separate segment

Source: Company data

Revenue +235% yoyEBITDA +845% yoy

Revenue -12% yoyEBITDA -61% yoy

2016 6m 2015 6m chg, yoyGeneral and administrative expenses 2,098 1,990 5%% of revenue 10.3% 12.0%Labour costs 1,442 1,292 12%% of revenue 7.1% 7.8%Audit and consultancy services 26 81 -68%% of revenue 0.1% 0.5%Taxes and duties 92 113 -19%% of revenue 0.5% 0.7%Other expenses 539 504 7%% of revenue 2.6% 3.0%

2016 6m 2015 6m chg, yoyDistribution and transportation expenses 883 623 42%% of revenue 4.3% 3.8%Labour costs 316 277 14%% of revenue 1.6% 1.7%Transport expenses 288 191 51%% of revenue 1.4% 1.1%Agency services 123 4 3,255%% of revenue 0.6% 0.0%Other expenses 156 152 2%% of revenue 0.8% 0.9%

Distribution and transportation costs up by 42% yoy, and as a percentage of revenue up to 4.3% from 3.8% last year

General and administrative expenses grew by 5% yoy, and as a share of revenue declined to 10%

2016 6m 2015 6m chg, yoyCost of sales 15,387 11,554 33%% of revenue 75.6% 69.7%Materials and components 10,690 7,847 36%% of revenue 52.5% 47.3%Labour costs 2,963 2,914 2%% of revenue 14.6% 17.6%Construction and design and engineering services of subcontractors

708 508 39%

% of revenue 3.5% 3.1%Other expenses 1,025 285 259%% of revenue 5.0% 1.7%

COST ANALYSIS

Cost of sales Comments

Distribution & transportation expenses

General & administrative expenses

Cost of sales grew by 33% yoy to Rub 15.4 bn from Rub 11.6 bn:

Materials and components increased by 36% yoy, and their share in revenue was up to 53% from 47% - the main reason was a change in the prevailing type of contracts, which became more material-intensive

Source: Company dataNote: Differences in calculations can occur due to the rounding-off rule

14

558

766745 7640.7x

1.0x

2015 6m 2016 6m

Organic capex, Rub mn Depreciation & amortization, Rub mn Capex to D&A ratio, x

212 247

8,81310,143

294 971

127

2,999

8,537

WC2015 FY

WC2015 6m

Inventorieschange

Receivableschange &other adj.

Depositschange

Payableschange &other adj.

WC2016 6m

Cash flow performance, Rub mn 2016 6m 2015 6m Change yoy

Operating cash flow 1,431 -1,909 -175%

Investing cash flow -883 -564 57%

Free cash flow (FCF) 547 -2,472 -122%

Financing cash flow -622 -514 21%

Cash and cash equivalents 3,361 1,440 133%

Comments Working capital 2015-2016 6m

Cash flow performance, Rub mn Capital expenditures2 6 months 2015-2016

Operating cash flow turned positive Rub 1.4 bn because of improvement in working capital1

Working capital decreased by 16% yoy to Rub 8.5 bn mainly due to execution of large integrated projects and procurement of produced equipment to the customers’ sites

Working capital also declines as a share of revenue LTM to 21%

Free cash flow turned positive Rub 547 mn despite increased investment activities

Organic capex2 increased by 37% yoy, where Rub 247 mn (or 32%) of all HMS’ capital investments was channeled to a development of the Localization project in Livny

The company continues to invest in development of new product lines (especially in accordance to API and ASME) in parallel with modernization of existing production facilities

CAPEX & Working Capital

Source: Company data

Source: Company data

1Working capital formula - see slide 142 Capex = Organic capex = Purchase of PPE + Purchase of intangible assets

Note: Differences in calculations can occur due to the rounding-off rule

Source: Company data

28%of revenue

2015 6m LTM

21%of revenue

2016 6m LTM24%of revenue

2015 FY

Capex of Localization project

15

792

4,676

7,270

1,294 1,382 694

2016 2017 2018 2019 2020 2021

Debt to be repaid as of 01.09.2016, Rub mn

12,064 11,102 12,432 12,388 13,937 14,705 12,752

1.98 2.12

2.36

1.66

2.25 2.11

1.81

2012 2013 2014 2015 2016E 2015 6m 2016 6m

Net debt, Rub mn Net debt to EBITDA LTM

Total debt stood stable at Rub 16.1 bn

Net debt decreased to Rub 12.8 bn

Net Debt-to-EBITDA LTM ratio decreased to 1.81x from 2.11x

HMS’ weighted average interest rate was 12.5% for all loans, including FX-denominated, and 12.9% for Rub-denominated only, as of July 1, 2016

Long-term debt82%

Comments

Comfortable repayment schedule

Source: Company data as of 1 September, 2016 (management accounts)

FINANCIAL POSITION

Source: Company data as of 1 July, 2016 Source: Company data as of 1 September, 2016

Net debt-to-EBITDA LTM ratio

Short-term debt18%

Credit portfolio structure

UniCredit Bank 29.2%

Borrowings in FX2%

Borrowings in Rub98%

VTB Bank 33.3%

Sberbank 21.4%

16

Raiffeisenbank 11.2%

FRP 1.8%

Others 3.1%

Source: Company data as of 1 September, 2016 (management accounts)

Total debtRub 16.1 bnon 01.09.16

UPDATED DIVIDEND POLICY

Source: Company data, IFRS accounts 17

As a general rule, the Company targets to pay out in the region of 50 % of the “Profit attributable to Shareholders of the Company” subject to capital constraints such as debt and liquidity position and forecasts

HMS Group plans to pay out dividends basically twice a year

3,225 2,098 1,042

-1,596

1,8851,500 792 393 0 954

47%

38% 38%

0%

51%

2011 2012 2013 2014 2015

Profit attributable to Shareholders of the Company, Rub mn

Dividends paid for the year, Rub mn

Dividends share in Profit, %

HMS’ dividends track record, 2011-2015 Comments

The Board of Directors of HMS Group on September 23,

2016, approved a new dividend policy:

– Targeted dividends in the region of 50% of the

«Profit attributable to Shareholders of the

company»

– Plan to pay interim and annual dividends

According to a previous dividend policy, HMS intended

to pay not less than 25% of its Profit for the year,

subject to reviewing its capital position against its

current and expected future capital requirements

Old New

Base for dividends calculation

Profit for the yearProfit attributable to shareholders of the

Company

Target level of dividends size

25% 50%

Dividends paymentfrequency

Once a yearTwice a year

as a general rule

Financial results

Business & Outlook

18

6,993 5,990

3,384

11,175 2,131

3,973

822

1,268

13,330

22,406

6m 2015 6m 2016

Industrial pumps Oil & gas equipment

Compressors Engineering & procurement

BACKLOG & ORDER INTAKE

Source: Company data, Management accounts

Backlog 6m 2015 vs. 6m 2016 Order intake 6m 2015 vs. 6m 2016

19

Order intake up 68% yoy to Rub 22.4 bn:

– Pumps order intake down by 14% yoy to Rub 6.0 bn

– Oil & gas equipment orders up 230% yoy to Rub 11.1 bn

– Compressors order intake up 86% yoy to Rub 4.0 bn

– EP contacts up 54% yoy to Rub 1.3 bn

Large contracts signed increased to Rub 7.6 bn from Rub 1.0 bn

Ordinary business order portfolio up 20% yoy to Rub 14.8 bn

Backlog up 6% yoy to Rub 26.2 bn:

– Pumps backlog down by 21% yoy to Rub 8.4 bn

– Oil & gas equipment backlog up 10% yoy to Rub 9.7 bn

– Compressors backlog up 107% yoy to Rub 6.3 bn

– EP backlog down 22% yoy to Rub 1.8 bn

Large projects backlog increased by 22% to Rub 7.4 bn

Ordinary business backlog stayed unchanged at Rub 18.8 bn

10,643 8,406

8,846 9,729

3,039 6,291

2,2831,771

24,812 26,197

6m 2015 6m 2016

Industrial pumps Oil & gas equipment

Compressors Engineering & procurement

-21%

+10%

+107%

-22%

-14%

+230%

+86%

+54%

Total Backlog, where 24,812 26,197

Ordinary business 18,716 18,786

Large integrated projects 6,096 7,411

Total Order intake, where 13,330 22,406

Ordinary business 12,311 14,810

Large integrated projects 1,019 7,596

Appendix

20

ONGOING MANAGEMENT ACTIVITIES

21

Special pumps

Further development of relations with existing and potential key clients:

‒ Oil & gas companies operating in MENA (BP, ENI, LUKOIL, etc.)

‒ EPC-companies (Italian, Korean)

‒ European packagers (GE, Siemens, GEA)

Standard pumps

Potential M&A’s / JV with European / Asian producers of pumps for water supply and wastewater (API)

Compressors

Potential M&A / JV with European / Asian producers of compressors

Development and promotion of combined “Apollo + NEM1” portfolio of pumps for thermal power

Offering of the new product lines of stainless steel end suction and borehole pumps:

‒ Further development of the existing product lines

‒ Investments in the production facilities in Livny, Russia

The company is constantly expanding its export capabilities on the back of existing platform:

Using a German brand Apollo for all sales in export markets

Utilizing cost advantages by transferring manufacturing of parts and complete products to Russia and Ukraine

Development of distribution channels:

‒ Opening of additional sales offices abroad (Milan, Dubai, Teheran, etc.)

‒ Increase headcount of sales and marketing personnel focused solely on the external markets

‒ Drawing in new partners on the established and new markets

ALL PRODUCT GROUPS

(1) “NEM” – HMS Group company Nasosenergomash Sumy

Sales development in Iran market

M&A and JV projects of HMS Group are flexible and subject to HMS Group capital constrainssuch as debt and liquidity position and forecasts

Source: HMS Group

Management activities

KEY DRIVERS OF EXPORT SALES DEVELOPMENT

22

Industry

Nuclear power

Thermal power

Oil & GasEurope

Oil & Gas International EPCsin Russia & CIS

Oil & GasIran

Oil & GasIraq

Oil & GasOther regions

Standard pumpsfor water supply

First contracts with several clients are already secured

Opening of sales office in 2016

Further development of distribution network: sales agents and local partners / packagers

Compressors sales development in Iran market

Further development of relations and participation in tenders of the current clients (BP, ENI, LUKOIL) and new clients as well

Expected resumptions of capex. First contract with BP signed

Development of relations with European and Korean EPC-companies:‒ Development of Italian sales office with focus on local EPCs‒ Development and promotion of combined “Apollo + NEM”: economy of scale + Ukrainian low-cost base

Utilization of German sales office to promote NEM/LGM product lines (with their production localized in Germany)

Utilization of additional sales opportunities:

‒ Well-developed relations with Russian major oil & gas companies

‒ Russian and German localization of selected products

Development of sales office in the Middle East: increase of employee headcount focused on other Middle East countries: Saudi Arabia, Kuwait, etc.

Opening of sales & promotion offices in the new geographical markets (Northern Africa, South America, South-Eastern Asia)

Development and promotion of combined “Apollo + NEM” portfolio of pumps for thermal power

Localization of Apollo pumps in Russia to increase price competitiveness

Sales office in Europe – hiring of the experienced KAM’s with perfect connections with the European thermal power majors

Industry sales will be driven by abroad projects of Rosatom Group

The current forecast of nuclear power segment (slide 4) is based on past regular sales of HMS Group to Rosatom Group, already signed contracts of HMS and Rosatom and project portfolio of Rosatom Group

Development and promotion of new product lines (stainless steel):

‒ End suction pumps (brand “Kordis”) and submersible pumps (brand “Ciris”), 4-8 inches

‒ Vertical multistage pumps

Opening / strengthening of sales offices in Europe and UAESource: HMS Group

STATEMENT OF FINANCIAL POSITION

Note 30 June 2016 31 December 2015ASSETSNon-current assets:Property, plant and equipment 4 13,848,729 14,161,704Other intangible assets 5 867,270 984,280Goodwill 6 3,342,231 3,466,063Investments in associates 96,374 106,040Deferred income tax assets 351,293 380,351Other long-term assets 42,174 43,444Investment property 239,119 244,247Restricted cash - 23,219Total non-current assets 18,787,190 19,409,348

Current assets:Inventories 8 7,273,069 6,860,390Trade and other receivables and other financial assets 9 12,831,069 11,701,492Current income tax receivable 166,161 152,680Cash and cash equivalents 7 3,361,039 3,496,420Restricted cash - 2,573Total current assets 23,631,338 22,213,555TOTAL ASSETS 42,418,528 41,622,903

EQUITY AND LIABILITIESEQUITYShare capital 48,329 48,329Share premium 3,523,535 3,523,535Treasury shares 15 (297,678) (213,489)Other reserves 122,730 (191,585)Currency translation reserve (162,113) 476,312Retained earnings 6,258,835 6,180,042Equity attributable to the shareholders of the Company 9,493,638 9,823,144Non-controlling interests 2,979,561 3,325,643TOTAL EQUITY 12,473,199 13,148,787

LIABILITIES

Non-current liabilities:Long-term borrowings 10 12,698,912 11,217,538Deferred income tax liability 1,433,356 1,534,031Pension liability 518,391 566,475Provisions for liabilities and charges 14 157,626 132,865Other long-term payables 127,428 133,552Total non-current liabilities 14,935,713 13,584,461

Current liabilities:Trade and other payables 12 10,380,239 8,455,740Short-term borrowings 10 3,413,889 4,666,626Provisions for liabilities and charges 14 432,500 451,410Redemption liability 27 - 326,759Pension liability 72,131 69,538Current income tax payable 100,159 142,323Other taxes payable 13 610,698 777,259Total current liabilities 15,009,616 14,889,655TOTAL LIABILITIES 29,945,329 28,474,116TOTAL EQUITY AND LIABILITIES 42,418,528 41,622,903

STATEMENT OF PROFIT OR LOSS

NoteSix months ended

30 June 2016Six months ended

30 June 2015Revenue 17 20,363,333 16,588,722Cost of sales 18 (15,386,761) (11,554,155)Gross profit 4,976,572 5,034,567

Distribution and transportation expenses 19 (883,068) (622,986)General and administrative expenses 20 (2,098,479) (1,990,279)Other operating expenses, net 21 (224,281) (304,681)Operating profit 1,770,744 2,116,621

Finance income 22 84,484 104,892Finance costs 23 (887,409) (709,762)Share of results of associates 222 (172)

Profit before income tax 968,041 1,511,579

Income tax expense 16 (272,252) (410,334)

Profit for the period 695,789 1,101,245

Profit/(loss) attributable to:Shareholders of the Company 725,195 1,152,726Non-controlling interests (29,406) (51,481)Profit for the period 695,789 1,101,245

Other comprehensive loss:Items that will not be reclassified to profit or lossRemeasurement of post-employment benefit obligations 33,917 (39,644)

Items that may be reclassified subsequently to profit or lossCurrency translation differences (686,814) (875,072)Currency translation differences of associates (9,888) (19,578)Other comprehensive loss for the period (662,785) (934,294)Total comprehensive income for the period 33,004 166,951

Total comprehensive income/(loss) attributable to:Shareholders of the Company 106,471 353,694Non-controlling interests (73,467) (186,743)Total comprehensive income for the period 33,004 166,951

Basic and diluted earnings per ordinary share for profit attributable to the ordinary shareholders (RR per share)

15 6.34 9.99

CASH FLOW STATEMENTNote

Six months ended30 June 2016

Six months ended30 June 2015

Cash flows from operating activitiesProfit before income tax 968,041 1,511,579Adjustments for:Depreciation and amortisation 18-21 764,424 744,697Loss from disposal of property, plant and equipment and intangible assets 21 10,948 2,951Finance income 22 (84,484) (104,892)Finance costs 23 887,409 709,762Change in retirement benefits obligations 48,171 47,596Change in warranty provision 18 49,916 44,025Loss/(gain) on revaluation of redemption liability 21 17,961 (10,553)Change in provision for impairment of trade and other receivables and other financial assets 20 766 7,007Change in provision for obsolete inventories 18 9,454 (4,687)Foreign exchange loss, net 21 71,041 157,561Change in provision for legal claims 21 (2,540) 17,192Share of results of associates (222) 172

Impairment of property, plant and equipment charge and reversal, net 21 (1,274) 31,534

Operating cash flows before working capital changes 2,739,611 3,153,944Increase in inventories (680,242) (1,440,682)Increase in trade and other receivables (1,002,050) (216,198)Decrease in other taxes payable (161,623) (482,043)Increase/(decrease) in accounts payable and accrued liabilities 1,887,733 (1,437,754)Cash from/(used in) operations 2,783,429 (422,733)Income tax paid (389,040) (500,824)Interest paid (989,650) (949,254)Decrease/(increase) in restricted cash 25,792 (35,695)Net cash from/(used in) operating activities 1,430,531 (1,908,506)Cash flows from investing activitiesRepayment of loans advanced 6,165 10,325Loans advanced (139,406) (31,711)Proceeds from sale of property, plant and equipment and intangible assets 6,297 14,242Interest received 9,219 1,214

Purchase of property, plant and equipment, net of VAT (699,882) (522,323)Acquisition of intangible assets, net of VAT (65,885) (35,545)Net cash used in investing activities (883,492) (563,798)Cash flows from financing activitiesRepayments of borrowings (4,772,906) (3,822,967)Proceeds from borrowings 5,153,191 3,313,745Proceeds from government grant 25 17,000 -Acquisition of non-controlling interest in subsidiary 15 (346,900) -Buy back of issued shares 15 (84,189) -Payment for finance lease (330) (1,140)Dividends paid to non-controlling shareholders of subsidiaries (8,144) (3,610)Dividends paid to the shareholders of the Company 15 (579,863) -Net cash used in financing activities (622,141) (513,972)Net decrease in cash and cash equivalents (75,102) (2,986,276)Effect of exchange rate changes on cash and cash equivalents and effect of translation to presentation currency (60,279) (108,230)

Cash and cash equivalents at the beginning of the period 3,496,420 4,534,953Cash and cash equivalents at the end of the period 3,361,039 1,440,447

CONTACTS

Company address:7 Chayanova Str.Moscow 125047Russia

Capital marketsPhone +7 (495) 730-66-01ir@hms.ruhttp://grouphms.com/shareholders_and_investors/

HMS Hydraulic Machines & Systems Group Plc is listed on the London Stock Exchange (Main market, IOB):

Identifier Number Number of shares outstandingISIN RegS: US40425X4079 117,163,427

144A: US40425X3089Ratio 1 GDR : 5 SharesTicker HMSGBloomberg HMSG LIReuters HMSGq.L

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The information contained herein has been prepared using information available to HMS Group (“HMS” or “Group” or

“Company”) at the time of preparation of the presentation. External or other factors may have impacted on the

business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information

about HMS Group may not be included in this presentation. No representation or warranty, expressed or implied, is

made as to the accuracy, completeness or reliability of the information.

Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove

to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and HMS Group cautions that

actual results may differ materially from those expressed or implied in such statements. Reference should be made to

the most recent Annual Report for a description of the major risk factors. This presentation should not be relied upon

as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to

these statements.

This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or

issue or any solicitation of any offer to purchase or subscribe for, any shares in HMS Group, nor shall it or any part of

it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or

investment decision.

Disclaimer

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Calculations and formulas

All figures in millions of Russian Rubles, unless otherwise stated

Management of the Group assesses the performance of operating segments based on a measure of adjusted EBITDA, which is derived from the consolidated financial statements prepared in accordance with IFRS

EBITDA is defined as operating profit/loss from continuing operations adjusted for other operating income/expenses, depreciation and amortisation, impairment of assets, excess of fair value of net assets acquired over the cost of acquisition, defined benefits scheme expense and provisions (including provision for obsolete inventory, provision for impairment of accounts receivable, unused vacation allowance, warranty provision, provision for legal claims, tax provision and other provisions). This measurement basis, therefore, excludes the effects of a number of non-recurring income and expenses on the results of the operating segments

EBIT is calculated as Gross profit minus Distribution & transportation expenses minus General & administrative expenses minus Other operating expenses

Total debt is calculated as Long-term borrowings plus Short-term borrowings

Net debt is calculated as Total debt minus Cash & cash equivalents at the end of the period

Working capital is calculated as Inventories plus Trade and other receivables, excluding Short-term loans issued, Bank deposits and Promissorynotes receivable, plus Current income tax receivable minus Trade and other payables minus Short-term provisions for liabilities and charges minus Current income tax payable minus Other taxes payable

ROCE is calculated as EBIT LTM divided by Average Capital Employed (Total debt + Total equity)

ROE is calculated as Total equity period average divided by Profit for the period

Operating profit adj. & Profit for the year adj. are deferred as adjusted by impairment of PPE, investment property and goodwill

Backlog is calculated as the preceding backlog plus new or additional customer orders booked during the reporting period, less amounts of contract value booked as revenue under ‘‘Russian GAAP’’ on an unconsolidated basis under the relevant contracts, plus or minus adjustments made in the judgment of the Group’s management. The Group may also make certain adjustments to bookings to reflect amendment, expiry or termination of contracts, cancellation of orders, changes in price terms under contracts or orders, or other factors affecting the amount of potential revenue which the Group believes may be recognized under such contracts. The Group’s backlog estimates are not an indication of potential revenues. Actual revenues and other measures of financial performance under IFRS may differ materially from any estimate of backlog, and changes in backlog between periods may have limited or no correlation to changes in revenue or any other measure of financial performance under IFRS

Notes to the presentation and formulas used for some figures’ calculations

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