Phosagro · RUS:PHOR
Phosagro — Non-Deal Roadshow (April 2018)
38 slides from Phosagro's roadshow presentation, April 2018
Slide 1: Presentation for 1-on-1 meetings April 2018
PHOSAGRO’ Presentation for 1-on-1 meetings April 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% ee TY 4 PhosAgro at a glance PHOSAGRO’ Key metrics World class . integrated #1 global producer of Mees ear pis rock RUB mln 2014 2015 2016 2017 Top 5 global DAP/MAP produce! Fertili l int phosphate Overall fertilizer capacity of 8.3 mlnt as of 2017 Sees oe Gil OS 72. a ) Revenue 123.1 189.7 1877
Slide 6: Market position
Market position Comments v¥ Top-3 producer of phosphate rock global by capacity and the leader in production of high-grade phosphate rock with P,0; content of over 35.7% Top-5 global producer of DAP/MAP by capacity The Company is the largest supplier of DAP/MAP and NPK fertilizers to Russia with the
Slide 7: Vertical integration
o YY 4 Vertical integration PHOSAGRO® Comments v¥ 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. v¥_— PhosAgro is the global leader
Slide 8: Flexible production model and key products
Flexible production model and key products Comments Y Key products for sale - phosphate-based products that contribute to 90% of revenue in 2017, of which MAP/DAP/NPKs account for almost 70% Y PhosAgro is able to produce MAP, DAP, NPK and NPS on the same production lines with 3.0 mint of phosphate p
Slide 9: Key markets
Key markets o YY 4 PHOSAGRO® Comments v The priority markets for the Company are Russia&ClS, Europe, North and South America, which contributed circa 90% to revenue in FY2017 Ca. 90% of sales are direct sales to end-customers, while the rest via traders vs. only ca. 20% of direct sales in 2011 PhosA
Slide 10: Key corporate policies
o% =. 8 wy Key corporate policies PHOSAGRO’ Net debt/EBITDA ratio CAPEX/EBITDA ratio Xx Xx 0.74 0.70 Total Debt/EBITDA =m=Net Debt/EBITDA 3.3x 055 952 0.54 2.2x 21x 22x 23K seam -- --n --B-- aa 1.6x 1.6x a 0.36 ©6939 0.9x 1.1x 5x a 2.3x a bar Lax 15x 18x 20x 20% 0B “ 2011 2012 2013 2014 2015 2016 10
Slide 11: Financial Review
PHOSAGRO' Financial Review
Slide 12: Key financials
Key financials Comments v 2017 Revenue slipped 3% y-o-y to RUB 181.4 bin on the back of lagging price effect and RUB appreciation v_— Adjusted EBITDA fell to RUB 51 bln from RUB 72 bln in 2016, as Ruble appreciation, cost inflation and surged expenses on transportation completely offset the growth o
Slide 13: Market Context
o% O° Y 4 Market Context PHOSAGRO’ Strong sales in 4Q 2017... Were offset by y-o-y RUB appreciation Fertilizer and PhosRock sales, mln t RUB per USD a Phosphate m Nitrogen PhosRock 63.1 RUB vs USD appreciated in 4017 Fertilizer and PhosRock sales . 9 by 17% in 4017 by 8% yoy grew by y-o-y in 4Q 59.0
Slide 14: 4Q17 Revenue Breakdown
o% ee YY 4 4Q17 Revenue Breakdown PHOSAGRO! Revenue dynamics in 4Q17 Revenue by key products in 4Q17 RUB bln % Other Revenue increased by 14% y-o-y 15% DAP+MAP strong volumes growth offset by RUB appreciation 33% 46.5 45.8 Nitrogen 14% 40.1 || PhosRock NPK(S) 12% 27% 4016 3Q17 4Q17 Revenue by key re
Slide 15: Cost analysis
Cost analysis Cost of Goods Sold Structure % 2017 11% 2016 @ Materials and services ™ Salaries Potash m Sulphur m Fertilizers for resale Fuel Dynamics of major cost items RUB bln m@ CoGS 150 Administrative m Selling 12.2 o YY 4 PHOSAGRO® TE oy 5% (5753%2% RUB101 bin VE 5% (553%3% RUBB88 bln BED&A =
Slide 16:
50 40 30 20 10 0
Slide 17: Debt overview
Debt overview o LY 4 PHOSAGRO® Comments v¥ Net Debt as of end-December stood at RUB 120 bln, representing a Net Debt / EBITDA ratio of 2.3x. vy PhosAgro mid-term targeted leverage level is Net Debt/EBITDA of 1.0x, mainly driven by EBITDA growth v¥ Most of the Company’s debt is denominated in US Doll
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 30%+ y-o-y in FY17 to 3.6 (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
o% ope ee Phosphate fertilizers: supply PHOSAGRO' Comments Regional breakdown of phosphates production v — Recent rally in the main feedstock prices, ammonia and sulphur, (in nutrients in 2016) has Lead to significant inflation in the industry cash costs, especially for Chinese producers Y¥ China: e
Slide 21: Phosphates Price Performance
o% H wo Phosphates Price Performance PHOSAGRO’ DAP price performance Dynamics in “pure” P USD/t, FOB Baltics DAP net of N component dynamics, USD/t 420 500 400 450 IN 400 a 350 | V\ PJ\Y 6yt average 360 300 340 250 320 200 Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jan-11 Oct-12 Jul-14 Apr-16 Jan-18
Slide 22: Fertilizer industry — Latin America
Fertilizer indust — Latin America PHOSAGRO® Main focus on soybean production Soybean prod. (mln t, lhs) and P,O, demand (mln t, rhs) Wl Phosphates demand ——Soybean production 57 3% 6 110 90 ° 70 4 50 3 2010 2011 2012 2013 2014 2015 2016 2017 Product structure of phosphates import % in P,Os FY2017 NP
Slide 23: Fertilizer industry — India
o YY 4 Fertilizer industry — India PHOSAGRO’ DAP Imports to India mint DAP imports to India decreased 10% y-o-y in 2017 but accelarated in 4Q 43 40 06 — |__| Subsidies for P&K in India INR bln Subsidy for P&K to grow by 13% y-o-y in 2018 220 251 L ; i i 4016 4Q17 FY16 FY17 Dynamics in DAP inventorie
Slide 24: China — focus on cash costs
China — focus on cash costs o YY 4 PHOSAGRO® Export of phosphates from China mint Chinese export of phosphates dropped 30% y-o-y in 4Q17 2.7 FY16 FY17 4016 4Q17 Coal price pushes ammonia and DAP cash costs up Anthracite price (USD/t Mid-lump Jincheng FOT) 250 Anthracite price grew 100%+ since lows i
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
ae DAP Price Performance PHOSAGRO’ DAP price performance USD/t —FOBChina) ——FOBBaltics ——CFRIndia ——CFRBrazil* _——FOB Morocco 550 - 500 + | 450 - 400 + 350 + 300 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-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 450 012 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% H vd 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 2012 2013 2014 2015 2016 2017 Dividends and dividend payout ratio USD/GDR and % DPS -@—Payout ratio Cumulative Divs since IPO r
Slide 32: DAP cash cost performance in 2011-17
re DAP cash cost performance in 2011-17 ouSeneeo 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 Source: PhosAgro 32
Slide 33: Urea cash cost performance in 2011-17
re Urea cash cost performance in 2011-17 ouSeneeo Urea cash costs at FOB USD/t mAmmonia Conversion Selling expences at FOB 151 138 111 101 - . 2011 2012 2013 2014 2015 2016 2017 Source: PhosAgro 33
Slide 34: PhosRock cash cost developments in 2011-16
o% . #08 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 2
Slide 35: DAP RUB cash costs performance
oe DAP RUB cash costs performance PHOSAGRO' DAP cash costs adjusted for USD-linked components and CPI RUBA 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 2013 2014 2015 2016 Source: PhosAgro 35
Slide 36: Key feedstocks production
Key feedstocks production PHOSAGRO’ Phosphate ore mining Ammonia production mint mint mUnderground © Open pit Underground mining grew by 63% since 2011 Ammonia production grew by 44% since 2011 33 32 5 27 1.18 1.20 27 27 27 26 u 5 101 4101.05 111 12 ri 10 3 8 £ 2011 2012,-=« «2013'S «2014S «2015S 20
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% “ 45% & ~* 1000 35% 39% ° = oc 33% 9 ‘to = 800 9 31% 28% s 0 5 5% 27% 33% 30% & = 600 = = 967 Fa g 619 15% = 500 540 < 200 323 446 ie 472 Be 458 345
Slide 38: Thank you
PHOSAGRO’ Thank you