Rostelecom Board approves corporate strategy to 2025, adopts dividend policy for 2021-2023

Financial objectives to 2025 include: the doubling of net profit; OIBDA growth of 1.5x; revenues of RUB 700+ billion and CAPEX to remain flat in absolute terms

Moscow, Russia - April 20, 2021 - Rostelecom Group (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, today announces that its corporate strategy to 2025 has been approved by the Company's Board of Directors, with its dividend policy for 2021-2023 also adopted.

At a Virtual Investor Day held today, the Company illustrated how it intends to continue with its development as the largest integrated provider of digital services and solutions in Russia and the most reliable partner for households, business and the state.

As part of Rostelecom's strategic plan for 2020-2025, the Company's main priorities are:

• Pursue "Smart growth" in traditional businesses to provide a higher rate of return on investment and cash flow by;
  • securing the leading position in the retail segment (B2C) in terms of subscribers and revenue, and to target a base of over 100 million customers;
  • enhancing its unchallenged leadership of the B2B/G market and maintain its status as the company of choice for business and the public sector;
  • maintaining its leadership positions in the operator segment.

• Exceed market growth rates in certain promising business segments by;
  • securing or maintaining the top position in each segment (data centre and cloud services, information security, digital medicine, digital region and state digital services);
  • attracting strategic partners and public capital to certain businesses via IPO processes;
  • grow revenue contribution from clusters and new digital products to 25% of total revenues.

• Increase operational efficiency in traditional business segments by;
  • enhancing internal efficiency and containing growth in operating costs to achieve OIBDA margin of 40% plus over 5 years.

• Preserve and expand Rostelecom's role as a key partner in the digitisation of the state by;
  • strengthening relations with the government to maximise participation in state projects and programs, including the supply of ICT infrastructure and solutions as well as the digitisation of key processes.

To streamline the implementation of these strategic priorities, Rostelecom will introduce a segment-cluster development model, with a strong focus also on client-orientation and operational efficiency. Traditional customer segments will be complemented by separate high-growth clusters made up of Data Centres and Cloud Services, Information Security, Digital Medicine, Digital Region and State Digital Services.

By successfully implementing the new strategic initiatives outlined above, Rostelecom is setting the following financial objectives for 2025:

• Revenue of more than RUB 700 billion;
• OIBDA growth of 1.5x;
• Doubling of net profit;
• Achieve target Net Debt[1]/OIBDA of below 2.5x;
• Keep CAPEX at 2020 levels in absolute terms;

The Company is also setting a number of new ESG initiatives and objects as part of the renewed strategy.

By implementing these strategic plans, Rostelecom also intends to steadily grow its dividend per share within the framework of the new Dividend Policy for 2021-2023, as adopted by the Board of Directors. According to the new policy, the company will strive to pay at least RUB 5 per ordinary share and at least 5% more per share than in the previous reporting year. More information in Rostelecom's Dividend Policy can be found at: https://www.rostelecom.ru/ir/dividends/.

For more information on the company's strategic initiatives for 2020 to 2025, please visit Rostelecom's corporate website: https://www.company.rt.ru/ir/results_and_presentations/cmd/2021/.

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Rostelecom is the largest integrated digital services and products provider, operating in all segments of the telecommunications market in Russia. The Company serves millions of households, state and private enterprises across the country.

Rostelecom is Russia's undisputed market leader, providing high-speed Internet access and pay-TV. The total number of broadband users stands at over 13.5 mln users, it has more than 10.8 mln pay-TV customers, over 6.1 mln of which are subscribed to Rostelecom's IPTV services. Tele2 Russia, a Rostelecom subsidiary, is a major player in the mobile market with the industry-leading NPS, a customer satisfaction benchmark. The joint mobile subscriber base is over 46.6 mln users.

The Group is the leading provider of telecommunications services to government bodies and corporates of all levels.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centres and cloud computing, biometry, healthcare, education and housing & utility services.

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Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and intended to be covered by the safe harbours created thereby.

Those forward-looking statements include, but are not limited to:

• Assessment of PAO Rostelecom's (the Company) future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
• The Company's plans to take ownership stakes in other organisations;
• the Company's anticipated capital expenditures and plans to construct and modernize its network;
• the Company's expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
• the Company's plans with respect to improving its corporate governance practices;
• the Company's expectations as to its position in the telecommunications market and forecasts on the development of the market segments within which the Company operates;
• economic outlook and industry trends;
• the Company's expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company's activity;
• other statements regarding matters that are not historical facts.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

• risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
• risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
• risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company's services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
• technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
• other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company's Annual Report and the Company's other public filings.

Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

[1] Including Lease liabilities