Moscow, Russia – 2 June 2016 – Sistema JSFC (“Sistema” or the “Company”, together with its subsidiaries, “the Group”) (LSE: SSA, MOEX: AFKS), a publicly-traded diversified holding company operating primarily in Russia and the CIS, today announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the first quarter ended 31 March 2016.

STRONG OPERATIONAL AND STRATEGIC PROGRESS

• Strong performance by MTS, outpacing peers in terms of revenue growth
• Detsky Mir and Segezha Group remain key growth drivers for Sistema
• Continued expansion of the agriculture business, with land bank almost doubled
• New progressive dividend policy to support attractive shareholder returns

SOLID FIRST QUARTER 2016 FINANCIAL RESULTS

• Consolidated revenues grew by 3.3% YoY to RUB 173.3 billion
• Adjusted OIBDA stable YoY at RUB 44.3 billion, with an adjusted OIBDA margin of 25.5%
• Adjusted net income attributable to the Group of  RUB 2.5 billion versus adjusted net loss in the same period last year
• Net debt at the Corporate Centre level of RUB 76.8 billion as at 31 March 2016
• As of 31 March 2016, cash position at the Corporate Centre level of RUB 33.8 billion, excluding RUB 12.9 billion represented by deposits

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented:

“Sistema's strong financial results in the first quarter of 2016 reflect our ongoing effort to develop the Group’s assets into market-leading companies with clear strategies, resilient business models and strong cash generating capabilitites.

“MTS again outperformed its peers in the first quarter, delivering strong top-line growth and healthy margins in a highly competitive environment and proving the strength of its strategy. Children’s goods retailer Detsky Mir and pulp-and-paper holding Segezha Group delivered the fastest year-on-year growth within the portfolio, remaining our key growth drivers. Detsky Mir increased revenues by more than 35%, while continuing to add new stores and expand its market share. Segezha boosted revenues nearly 40% driven by both organic growth and the acquisition of Lesosibirsk LDK No. 1, which represents a very strong and promising addition to Segezha’s business.

“Our Indian telecommunications subsidiary, SSTL, broke even on the OIBDA level in the quarter, a solid result as we work toward closing the transaction to merge the company’s business with Reliance Communications, one of the leading telecom operators in India.

“In the second quarter of 2016, we maintained strong investment momentum in agriculture with the acquisition of approximately 110 thousand hectares of land in the Rostov region and Stavropol Krai, which almost doubles our land bank, and puts us well on track to building out Russia’s leading agricultural holding.

“While we keep strong focus on increasing our asset value and cash generation, our priorities for 2016 will be optimisation of leverage and increasing shareholder distributions. In April, Sistema’s Board of Directors approved a new progressive dividend policy which states that the dividend for each reporting year will be, at a minimum, the higher of either an amount equivalent to a dividend yield of 4% or RUB 0.67 per share.

 We believe that this new policy will help us to maximise shareholder value as we continue to deliver on our strategy.”

Conference call information

Sistema’s management will host an analyst conference call today at 10:00 am (EST)/ 3:00 pm (London time) / 4:00 pm (CET)/ 5:00 pm (Moscow time) to present and discuss the first quarter 2016 results.

The dial-in numbers for the conference call are:

Russia

+7 495 213 0977

8 800 500 9311 (toll free)

United Kingdom

+44 20 3427 1906

0800 279 5736 (toll free)

United States

+1 646 254 3360

+1 877 280 1254 (toll free)

Conference ID: 1033434

Alternatively, you can quote the conference call title: “Sistema First Quarter 2016 Financial Results”.

A replay of the conference call will be available on the Company’s website www.sistema.comfor seven days after the event.

For further information, please visit www.sistema.comor contact: