Phosagro · RUS:PHOR
Phosagro — Investor Presentation (June 2019)
32 slides from Phosagro's investor presentation, June 2019
Slide 1: Presentation for 1-on-1 meetings June 2019
Presentation for 1-on-1 meetings June 2019 Pure Minerals for Healthy Lives
Slide 2: Disclaimer
Disclaimer These materials have been prepared by PJSC PhosAgro (PhosAgro) solely for your information and may not be copied, reproduced, retransmitted or further distributed, directly or indirectly, by any recipient to any other person or published, in whole or in part, for any purpose or under any
Slide 3: PhosAgro at glance
PhosAgro at glance
Slide 4: Overview
Overview Deposits lifetime Investment rating Company stocks Financial highlights 50+ BBB- Baa3 S&P global ratings Moody’s LSE MOEX Since 2011 Since 2011 RUB bln Revenue 1Q18 1Q19 Δ yoy FY17 FY18 Δ yoy 54.6 72.3 32% 181.4 233.4 29% years BBB- Fitch ratings EBITDA 14.3 24.8 73% 50.8 74.9 47% EBITDA ma
Slide 5: PhosAgro assets
PhosAgro assets Mining Sales Kirovsk Branch of Apatit (Kirovsk) Infrustructure hubs 35.3 Ore mining 10.1 phosphate rock mln t mln t production Murmansk port 1.96 Total resources 39% Content of P2O5 bln t Production Metachem (Volkhov) St. Petersburg 0.2 PKS, NPK 0.22 Sulphuric acid Kotka port mln t m
Slide 6: Vertical integration as a key advantage
Vertical integration as a key advantage Key Facts Operational structure PhosAgro perimeter • There are 4 core raw materials for P-fertilizer production… Phosphate ore Sulphur Potash Natural gas • And 3 key feedstocks, in which PhosAgro is almost self-sufficient: Beneficiation plant Sulphuric acid pl
Slide 7: PhosAgro global coverage
PhosAgro global coverage Key markets Comments We operate in >100 countries, but Russia, L.America and Europe are more lucrative than others due to next facts: ~40% ~50% Share in Global trade of Share in Global production of soybeans, maize and soybeans, maize and wheat wheat Healthy Better import ne
Slide 8: Fertilizer Industry
—= ea ee Fertilizer In <2PHOSAGRO:
Slide 9: DAP Price Performance
DAP Price Performance USD/t 1Q18 1Q19 Source: CRU, PhosAgro 9 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 10: Phosphate fertilizers: demand in agriculture industry
Phosphate fertilizers: demand in agriculture industry Global fertilizer consumption split by products in 2018, % Phosphates consumption in agriculture by regions, % 6 4 3 6 11 Nitrogen Phosphate 2018: 56% 24% 45,3 mln t in P2O5 16 Potash 35 20% 19 Fertilizer usage by crop in 2015-2017, % Phosphate d
Slide 11: Phosphate fertilizers: supply
Phosphate fertilizers: supply Production split by products in 2010-17, % DAP/MAP supply split by countries, % 49 45 8 14 6 11 2018: 9 2018: 10 58,4 mln t in P2O5 28.6 mln t in P2O5 7 7 5 26 12 Key feedstock price dynamics, USD/t Global DAP/MAP producers by capacities in 2018, mln t * Source: IFA, CR
Slide 12: Phosphates Price Performance
Phosphates Price Performance DAP FOB Tampa price performance, USD/t Performance DAP price net of N component, USD/t 6 year average NPK price Premium/Discount to Nutrients, % NPK basket vs. Soft Commodities, Week 1 2011 = 0 Source: CRU, PhosAgro PhosAgro at glance Fertilizer Industry Financial review
Slide 13: Feedstocks inflation
Feedstocks inflation Ammonia FOB Baltics price, USD/t Phosphoric Acid CFR India price, USD/t Phosphate Rock FOB Morocco prices, USD/t Sulphur CFR China prices, USD/t Source: CRU, PhosAgro PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 14: Fertilizer industry – India
Fertilizer industry – India DAP import to India, Mln t Seasonal DAP import in India, kt DAP cash cost vs MRP (incl. GST), $/t Seasonal DAP production in India, kt Source: CRU, Fertecon, PhosAgro estimates 14 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 15: Fertilizer industry – India
Fertilizer industry – India Nutrient-based subsidy rates for DAP, $/t INR performance vs USD, week 1 2015 = 0 68.9 Dynamics in DAP inventories, kt Source: CRU, Fertecon, PhosAgro estimates 15 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 16: Fertilizer industry – Latin America
Fertilizer industry – Latin America MAP/NP import to Brazil, mln t P2O5 Brazil phosphate mines capacities in 2018, mln t Top 4 mines were temporary closed due to new environmental law MAP barter ratio, 1t of MAP/60kg of soy price Brazil agricultural production, mln t 25 53 166 181 162 212 200 208 19
Slide 17: Fertilizer industry – Latin America
Fertilizer industry – Latin America Export of soybeans, Mln tones Export prices (FOB) for soybeans, $/t P-fertilizer import split by products in 2018, % P-fertilizer import split by countries in 2018, % 50 30 21 3.2 mln t in P2O5 27 3.2 mln t in P2O5 6 16 5 18 12 15 Source: CRU, Agrolink.com.br, USD
Slide 18: China – focus on cash costs
China – focus on cash costs DAP/MAP export from China, mln t DAP Sulphur CFR China price, USD/t 1.0 2.5 3.1 3.3 1.6 Sulphur prices put extra pressure on DAP cash cost Anthracite price (USD/t Mid-lump Jincheng FOT) Ammonia price in China, USD/t Source: CRU, PhosAgro 18 PhosAgro at glance Fertilizer I
Slide 19: China – environmental issues in the spotlight
China – environmental issues in the spotlight China’s environmental efforts Assessment of Chinese phosphate production, % 15 12 • A new federal bureau of environmental investigation has been 10 set up in China to look into industrial pollution. • 260 inspectors have been specifically trained to moni
Slide 20: Domestic market – more space for growth
Domestic market – more space for growth Fertilizer application rate and average grain yield, Kg/Ha and 00 kg/Ha 15 12 Source: CRU, PhosAgro 20 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 21: Financial review
Fin E a ancial review <2PHOSAGRO:
Slide 22: Revenue Breakdown
Revenue Breakdown Sales breakdown, mln tonnes FX rates, RUB/USD 3.1 3.0 3.4 2.9 2.8 Revenue dynamics, RUB bln Revenue by region, % Revenue by product, % 1Q19 1Q19 9 25 11 38 9 29 15 35 26 27 10 1Q18 1Q18 9 16 17 6 6 27 33 25 24 Source: PhosAgro 22 Fertilizer Industry Financial review Market outlook
Slide 23: Cost Analysis
Cost Analysis Cost of goods sold structure, % Ammonia, RUB bln Sulphur, RUB bln 1Q19: R 37.7 mln 18 22 17 21 4 3 1Q18: R 32.0 mln 7 6 7 7 15 10 9 15 9 11 9 10 Materials&services, RUB bln Payroll, RUB bln Natural gas, RUB bln Potash, RUB bln Source: PhosAgro 23 Fertilizer Industry Financial review Ma
Slide 24: Segment Profitability
Segment Profitability Phosphate - gross profit and margin, RUB bln Phosphate sales (export + domestic), kt 415 kt 1 514 kt 364 kt 1 389 kt Nitrogen - gross profit and margin, RUB bln Nitrogen sales (export + domestic), kt 195 kt 417 kt 251 kt 422 kt Source: PhosAgro 24 Fertilizer Industry Financial
Slide 25: EBITDA Analysis
EBITDA Analysis EBITDA and EBITDA margin, RUB bln Comments • EBITDA in 1Q 2019 amounted to RUB 24.8 billion (USD 375 million), up by 73% year-on-year, while EBITDA margin reached 34%. • Major upward factors were the 5% year-on-year growth in fertilizer sales and an 8% year-on-year increase in averag
Slide 26: FCF Analysis
FCF Analysis Comments 1Q19 EBITDA to FCF conversion, RUB bln • In 1Q 2019 operating cash flow almost tripled to RUB 27.5 billion (USD 416 million) on solid EBITDA performance and working capital release. • PhosAgro’s capital expenditure for 1Q 2019 totalled around RUB 8.6 billion (USD 130 million),
Slide 27: Debt Overview
Debt Overview Comments Debt currency breakdown as of 31 March 2019, % • Debt (incl. finance lease liabilities) decreased by 2% over 1Q19 to RUB 142 billion (USD 2.2 billion) driven by apreciation of the Russian ruble, as most debt is denominated in US dollars 17 • As of the end of March 2019, net de
Slide 28: Prudent balance between dividends and organic growth
Prudent balance between dividends and organic growth Key Facts Dividend payout history, mln USD • Quarterly dividend payments • 30-50% of Net income adjusted on non-cash gains/losses 13 • $6.2/GDR (or 45%) has been returned to shareholders since IPO 2 85 Capex/EBITDA ratio Stable dividend policy Sou
Slide 29: Appendix
—~Appendix. _ <2PHOSAGRO:
Slide 30: Cash cost performance
Cash cost performance DAP cash costs at FOB, USD/t Av. DAP cash cost, % 13 46 16 13 12 Urea cash costs at FOB, USD/t Av. Urea cash cost, % 24 52 24 Source: CRU, PhosAgro 30 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 31: Key feedstocks production
Key feedstocks production Phosphate rock production, mln t Ammonia production, mln t Sulphuric acid production, mln t Ore mining, mln t Source: CRU, PhosAgro 31 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 32: Thank you!
Thank you! PhosAgro IR contact Address: 55/1, Leninsky prospect, Bldg.1. Moscow, 119333, Russia IR E-mail: ir@phosagro.ru Phone number: +7 495 232 96 89 www.phosagro.ru