Phosagro · RUS:PHOR
Phosagro — Non-Deal Roadshow (July 2018)
38 slides from Phosagro's roadshow presentation, July 2018
Slide 1: Presentation for 1-on-1 meetings July 2018
PHOSAGRO’ Presentation for 1-on-1 meetings July 2018
Slide 2: Disclaimer
ae Disclaimer PHOSAGRO” 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
Slide 3: Operational Excellency & Market Momentum
o% Operational Excellency & Market Momentum pudencno’ Operational Market Excellency Momentum Main CAPEX cycle is DONE Y Focus on Vertical Integration and Cash Costs Control vy _Experience with successful organic growth vY Leading Position on the cash-cost curve vY Sustainable Div. Policy & Accurate
Slide 4: Sustainable Advantages in a Changing Environment
V4 PHOSAGRO’ Sustainable Advantages in a Changing Environment
Slide 5: PhosAgro at a glance
o% PhosAgro at a glance pioeseno Key metrics World class *PhosAgro is a leading vertically integrated producer of RUB min FYIS FY16 FY17. 1017 1018 hn % integrated fertilizers with phosphate rock grade above 39% i YoY phosphate Tease the Top 5 biggest DAP/MAP producers in the Revenue 189.7 187.7 181
Slide 6: Market position
oe Market position enoenno Comments Global DAP/MAP producers (by capacity)) mint ¥ Top-3 producer of phosphate rock global by capacity and the leader in production of high-grade phosphate rock with P,O, content of over 35.7% ¥— Top-5 global producer of DAP/MAP by capacity ¥ The Company is the larges
Slide 7: Vertical integration
o YY 4 Vertical integration PHOSAGRO® Comments ¥ Production of phosphate fertilizers is very complex and require 3 types of feedstocks: 1) phosphate rock or acid, 2) sulphur or sulphuric acid and 3) ammonia. In addition, NPK fertilizers production requires potash. ¥ — PhosAgro is the global leader i
Slide 8: Flexible production model and key products
o% Flexible production model and key products enoenno Comments Y Key products for sale - Up to 80% of headline revenue in 1018 was generated by phosphate-based products, where the share of MAP/DAP/NPKs is around 60% ¥_ PhosAgro is able to produce MAP, DAP, NPK and NPS on the same production lines wi
Slide 9: Key markets
Key markets Comments v¥_ The priority markets for the Company are Russia&ClS, Europe, Latin America, where we generated circa 90% of our headline revenue in FY2017 Y¥ Up to 90% of all customers are end-customers, the rest are traders ¥_ PhosAgro is the largest supplier of MAP and NPK in Russia with
Slide 10: Capital Expenditure & Debt Overview
o YY 4 Capital Expenditure & Debt Overview PHOSAGRO’ Capex/EBITDA ratio Capital expenditure x RUB bln 0.75 070 0.63 12.6 0.55 g57 0.56 i THT ; ; ; 2012. 2013 2014 +2015 2016 2017 +1018 1017 4017 1018 Total debt and net debt/LTM EBITDA ratio Maturity profile (USD mln) as of 30 March 2018 Total Debt/E
Slide 11: Financial Review
PHOSAGRO' Financial Review
Slide 12: 1Q 2018 Highlights
o% 1Q 2018 Highlights onder EBITDA and EBITDA margin Operating and free cash flow RUB bln and % RUB bln Q17 1Q18 mmm EBITDA —e—EBITDA margin 30 29% 28% 26% 7.0 ~ »~ HE 10 -8.5 . - 0 0% Operating Investing Free cashiOperating Investing Free cash BR w 1017 4017 1018 cash flow activities flow icash flo
Slide 13: 1Q 2018 Revenue Breakdown
re eo Y 4 1Q 2018 Revenue Breakdown PHOEAGRO’ Revenue dynamics in 1018 RUB bln Revenue increased by 23% y-o-y strong volumes growth offset by RUB appreciation 44.4 458 54.6 1Q17 4Q17 1018 Revenue by key regions in 1018 % Europe N&S America 29% 27% cls 6% Russia Other 29% 9% Revenue by key products i
Slide 14: 1Q 2018 EBITDA bridge
o% 1Q 2018 EBITDA bridge onder Strong sales in 1Q 2018... Were offset by y-o-y RUB appreciation Fertilizer and PhosRock sales, mln t RUB per USD @ Phosphate 7 m Nitrogen m PhosRock RUB vs USD appreciated in 1018 by 3% y-o-y Fertilizer and PhosRock sales grew by 16% y-o-y in 1018 58.8 58.4 56.9 1Q17
Slide 15: Cost analysis
o YY 4 Cost analysis PHOSAGRO’ Cost of Goods Sold Structure % 1018 11% 10% 9% 7% 4% 3% 13% RUB32,1 bln 1017 8% 12% 5% 6% |6% 9% RUB24,4 bin @ Materials and services BD&A Natural gas Salaries @ Sulphur m Potash mElectricity # Ammonia @® Other Dynamics of major cost items RUB34 bln RUB36 bln RUB44 bln
Slide 16: Capex review and outlook
o% . ee YY 4 Capex review and outlook PHOSAGRO’ Comments Capex dynamics v¥ The Company has successfully passed the peak of its RUB bln Capex/EBITDA capex-intensive period, completing ammonia and 52% 56% 70% 63% urea units. v¥ Major investment projects were completed in 2015- ae 2017 vy No plans to u
Slide 17: Debt Overview
&% . ee Debt Overview PHOSAGRO’ Comments ¥Y Gross debt (including finance lease liabilities) as of 31 March 2018 increased marginally by 1% q-o-q to RUB 124 billion (USD 2.2 billion). vy Net debt as of end-March remained flat versus end- December 2017 around RUB 120 billion (USD 2.1 billion), repres
Slide 18: Fertilizer Industry
PHOSAGRO' Fertilizer Industry
Slide 19: Phosphate fertilizers: demand
re re wey Phosphate fertilizers: demand PHOSAGRO® Comments Regional breakdown of phosphates consumption v Brazil: phosphate imports grew by 10%+ y-o-y in FY17 to 3.4 (in nutrients in 2016) min t P,O; v India: DAP imports decreased by 10% y-o-y to 4.0 mint in 2017 which is coupled with 60% y-o-y drop
Slide 20: Phosphate fertilizers: supply
Phosphate fertilizers: supply o LY 4 PHOSAGRO® Comments Y Recent rally in the main feedstock prices, ammonia and sulphur, has lead to significant inflation in the industry cash costs, especially for Chinese producers Y China: export of phosphates grew by 10% y-o-y to 11.0 mint in 2017 though collaps
Slide 21: Phosphates Price Performance
Phosphates Price Performance DAP price performance USD/t, FOB Baltics o YY 4 PHOSAGRO® Dynamics in “pure” P DAP net of N component dynamics, USD/t 550 500 500 450 400 450 00 B50 cece ec ceccececeeeeeeennnnnnnneeeee SMF average 300 350 250 300 200 Jun-15 Jun-16 Jun-17 Jun-18 Jan-15 Aug-15 Mar-16 Oct-
Slide 22: Fertilizer industry – Latin America
Fertilizer indust = Latin America PHOSAGRO" Main focus on soybean production PO, Import to Brazil added 30%+ in 2017 Soybean prod. (mln t, hs) and P,O,; demand (mln t, P,0, ‘000 t rhs) Wag Phosphates demand Soybean production Phosphates Import to Brazil — ucti . P y P 59 grew 30%+ since 2015 6 34 11
Slide 23: Fertilizer industry – India
o% ays . . wo Fertilizer industry — India PHOSAGRO' DAP Imports to India Subsidies for P&K in India mint INR bln 5.0-5.5 Subsidy for P&K to grow by 13% y-o-y in 2018 4.0 251 220 190 222 — 1017 1018 FY17 FY18E 2015 2016 2017E 2018F Dynamics in DAP inventories Rupee Devaluation to drive MRP higher min
Slide 24: China — focus on cash costs
China — focus on cash costs Export of phosphates from China mint 3.7 4016 Chinese export of phosphates continues struggling... Main focus on 2Q18 numbers 27 i 1.6 15 4017 1017 1018 Coal price pushes ammonia and DAP cash costs up Anthracite price (USD/t Mid-lump Jincheng FOT) 250 Anthracite price gre
Slide 25: China — environmental issues in the spotlight
China — environmental issues in the spotlight o YY 4 PHOSAGRO® Assessment of Chinese phosphate production Not assessed 11% High Risk 10% Moderate Risk 9 15% Low/Normal Risk 64% Areas most at risk of closure Rock resources poor and running out fast/Transport is ~~~ ; a challenge. Risk applies to smal
Slide 26: Domestic market — more space for growth
o YY 4 Domestic market — more space for growth PHOSAGRO” Fertilizer application rate and average grain yield, Kg/Ha and 00 kg/Ha 80 5 @: 70 4 e Kursk Canadae 2 Orel Grains average yield, 00 kg/Ha . Eur kdasnodar QD urope 50 + . oO Brazil 30 + O India e AQ) Total Fertilizers consumption China 20 - Ru
Slide 27: DAP Price Performance
re eo YY 4 DAP Price Performance PHOSAGRO’ DAP price performance USD/t —FOB China -——FOB Baltics ——CFRIndia ——CFR Brazil” _——FOB Morocco 550 4 500 450 400 350 300 Jan-14 Oct-14 Jul-15 Apr-16 Jan-17 Oct-17 Jul-18 Source: CRU, PhosAgro 27 “~ MAP CER Brazil
Slide 28: Lowest cash costs in the industry
Lowest cash costs in the industry PHOSAGRO” DAP business cash cost (FOB, as of November 2017) $/t 450 400 350 300 250 200 150 100 50 012 3 45 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Min t i PhosAgro WM MENA China North America India HM Other Source: CRU, PhosAgro
Slide 29: Appendix
PHOSAGRO' Appendix EAT SUGAR CANE MAIZE GRAPE SOY BEANS
Slide 30: Our production assets
Our production assets oe we PHOSAGRO’ p Resources(?) Apatite-nepheline ore: 2.07 bint Al,0;: over 280 mint REO: 7.5 mnt Capacity by product Phosphate rock: 9.5 mint Highlights = Largest standalone global producer of high grade phosphate rock!) = Standard grade - P,0, content of 39% = Lowest hazardou
Slide 31: Growing return for shareholders
o% . ee wo Growing return for shareholders PHOSAGRO’ Operating cash flow and free cash flow USD mln ™ Operating cashflow mm FCF 1038 820 737 761 587 515 389 368 203 184 28 -74 ; ; 1 2012 2013 2014 2015 2016 2017 Dividends and dividend payout ratio USD/GDR and % m= DPS -—@®—Payout ratio Cumulative Di
Slide 32: DAP cash cost performance in 2011-17
ae DAP cash cost performance in 2011-17 PHOSAGRO” DAP cash costs at FOB USD/t @ Phosphate rock Ammonia Sulphur Other m Selling expenses at FOB Spb 280 278 290 251 177 180 - .s 2011 2012 2013 2014 2015 2016 2017 32 Source: PhosAgro
Slide 33: Urea cash cost performance in 2011-17
& Urea cash cost performance in 2011-17 PHOSAGRO' Urea cash costs at FOB USD/t mAmmonia Conversion Selling expences at FOB 151 138 111 101 - . 2011 2012 2013 2014 2015 2016 2017 33 Source: PhosAgro
Slide 34: PhosRock cash cost developments in 2011-16
o% . ee PhosRock cash cost developments in 2011-16 PHOSAGRO” PhosRock (39% PO, content) cash cost developments over 2011-16, USD/t. EXW = Fuel Energy Materials for technology m Other materials and services m™ Sallary Other PhosRock cash cost Down by 40% since IPO 92 79 75 74 49 - ) 2011 2012 2013 20
Slide 35: DAP RUB cash costs performance
oe DAP RUB cash costs performance ae DAP cash costs adjusted for USD-linked components and CPI RUB/t Whether the cut in cash costs is ONLY due to weak RUB? NO! DAP cash-costs* in RUB Down by 17% since 2013 in real terms 2015 2016 2013 2014 35 Source: PhosAgro
Slide 36: Key feedstocks production
o LY 4 Key feedstocks production PHOEAGRO’ Phosphate ore mining mint mUnderground Open pit Underground mining grew by 63% since 2011 33 32 27 27 27 kT 8 7 12 11 10 ) 8 24 15 a 16 fn 17 17 19 22 2011 2012 2013 2014 2015 2016 2017 Phosphoric acid production mln t P20; PhosAcid production grew by 44% s
Slide 37: Sustainability against market headwinds
o LY 4 Sustainability against market headwinds PHOSAGRO' DAP price and EBITDA margin USD/t FOB Tampa and % Mmmm Revenue ——— EBITDA margin 49% 1200 43% - 9 45% & * 1000 35% 30% og os 33% q = = 800 9 31% 28% 5 ‘0 5 5% 27% 73% 30% & = 600 = = 967 a x 400 619 15% 5 200 323 500 540 HM 446 i 472 BM 458 34
Slide 38: Thank you
PHOSAGRO’ Thank you