Phosagro · RUS:PHOR
Phosagro — Non-Deal Roadshow (May 2020)
34 slides from Phosagro's roadshow presentation, May 2020
Slide 1: Presentation for 1-on-1 meetings May 2020
Presentation for 1-on-1 meetings May 2020 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 grade ratings Company stocks Financial highlights app. 60 BBB- Baa3 S&P global ratings Moody’s LSE MOEX Since 2011 Since 2011 USD mln Revenue 2016 2 801 2017 3 105 2018 3 723 2019 3 835 years BBB- Fitch ratings Incl. in MSCI Russia Adj. EBITDA(1) 1 080 870 1 195
Slide 5: #1 global producer of high grade phosphate rock
#1 GLOBAL PRODUCER OF HIGH GRADE PHOSPHATE ROCK Highlights Phosphate fertiliser universe(4) 50 • PhosAgro is the largest producer of high-grade phosphate rock by production volume Total phosphate rock production worldwide(1) and #4 global producer of phosphate fertilizers by nameplate capacity 40 Mo
Slide 6: PhosAgro assets
PHOSAGRO ASSETS Mining capacities(4) Kirovsk Branch of Apatit(3) (Kirovsk) Fertilizer production, mln t 37 Ore mining 10.5 phosphate rock DAP/MAP NPK(S) Other P-ferts N-Ferts 0 mln t mln t production + 28% growth + 10% CAGR 2.3 Total resources 39% Content of P2O5 8,3 9,0 9,5 bln t 7,4 2,3 1,7 2,1 1,
Slide 7: Vertical integration as a key advantage
VERTICAL INTEGRATION AS A KEY ADVANTAGE Operational structure PhosAgro perimeter Self-sufficiency as of 31/12/2019 Phosphate ore Sulphur Potash Natural gas Beneficiation plant Sulphuric acid plant Ammonia unit 100% 90% 90% 41% P-Rock Sulphuric acid Ammonia Phosphate rock Sulfuric acid Ammonia Electr
Slide 8: Global footprint with diversified product portfolio
GLOBAL FOOTPRINT WITH DIVERSIFIED PRODUCT PORTFOLIO Russia fertilizer sales, mln t Export fertilizer sales, mln t + 108% growth + 51% growth + 13% CAGR + 7% CAGR Access to markets Global footprint Fertilizer grades 39 40+ 25 PhosAgro sales Other regions Net fertilizer exporters Source: PhosAgro 8
Slide 9: Corporate governance
CORPORATE GOVERNANCE BOARD OF DIRECTORS EXPERIENCE HIGHLIGHTS Independent Directors Xavier Robert Rolet KBE Chairman Irina Bokova Chairman of the Sustainable Development Committee Sven Ombudstvedt 10 7 Chairman of the Strategy Committee// Chairman of the Risk management Committee DIRECTORS INED Jame
Slide 10: ESG & UN Sustainable Development Goals
ESG & UN Sustainable Development Goals PhosAgro directly contribute to 10 SDGs Company has been recognized as a Global Compact LEAD PhpsAgro is a strategic partner of FAO on implementation of Sustainable Soil Management PhosAgro initiated with UNESCO «Green Chemistry for Life» grant programme for yo
Slide 11: Sustainable growth in ESG ratings
SUSTAINABLE GROWTH IN ESG RATINGS RATINGS 2018 2019 CHANGE OUR TARGET IN 2020 MSCI ВВ ВВ BBB CDP «F» «С» «С» SUSTAINALYTICS 51 54 / 43.5* 38 FTSE4Good 2.9 3.5 3.5 * SUSTAINALYTICS essential methodology change was in 2019. Figures reflects now unmanaged risks level. Source: MSCI, CDP, Sustainalytics,
Slide 12: ESG priorities
ESG PRIORITIES Environmental footprint reduction Focus on OHS and Social performance Metrics 2018 2019 1. Zero fatal injuries and Zero tolerance to accidents Air emissions, kg/t 1.05 0.89 2. Increase employee loyalty and satisfaction index from 57% to 75% GHG emissions, kg/t 157.9 143.3 3. Increase
Slide 13: Fertilizer Industry
—= ea ee Fertilizer In <2 PHOSAGRO:
Slide 14: Fertilizer price performance, FOB Baltics (USD/t)
FERTILIZER PRICE PERFORMANCE, FOB BALTICS (USD/T) Closure of Mosaic India accelerated import amid slow ramp up of new capacities at Ma’aden Ramp up of new capacities at facility (1 mln t and OCP Ma’aden and OCP sites/ flood in the P2O5) in the USA USA/slow domestic demand in China Capacities cut in
Slide 15: Feedstock prices
FEEDSTOCK PRICES Ammonia FOB Black sea price, USD/t Phosphoric acid CFR India contract price, USD/t Sulphur CFR China prices, USD/t Phosphate rock FOB Morocco prices, USD/t Source: CRU, PhosAgro 15
Slide 16: Global DAP/MAP cash cost
GLOBAL DAP/MAP CASH COST, USD/t, FOB PhosAgro remains in the 1st quartile of world DAP / MAP producers in 2019 by expected cash cost. The difference with the lowest cost producers from the North Africa and the Middle East is within USD10-20/t 600 World cash cost excluding China Cash cost China 1st q
Slide 17: Premium market expansion
PREMIUM MARKET EXPANSION Key markets Premium to Indian netback prices, FOB Baltic PhosAgro operates in +100 countries, but Russia, North and South America and Europe are the target markets, as USD/t they account for ~40% and ~50% shares on global production and global trade of soybeans, corn and whe
Slide 18: Phosphate fertilizers: demand and supply structure
PHOSPHATE FERTILIZERS: DEMAND AND SUPPLY STRUCTURE Highlights Phosphates fertilizers consumption by regions, % China • For 2016-2018 global markets showed mixed fertilizers demand growth rates. Russia 8 demonstrated the highest result– 9.4% versus global 1.1% increase South Asia 4 26 • For the next
Slide 19: Global P-fertilizer market: demand is growing faster than supply
GLOBAL P-FERTILIZER MARKET: DEMAND IS GROWING FASTER THAN SUPPLY P-fertilizers demand, mln t P-fertilizers supply growth vs demand growth, mln t up 10% or 17.5 million Target markets Other markets Firm projects Probable/ speculative Closures projects Most additions are expected from Morocco, Russia,
Slide 20: Global urea market: long-term balance expected
GLOBAL UREA MARKET: LONG-TERM BALANCE EXPECTED Urea demand, mln t Urea supply growth vs demand growth, mln t Target markets Other markets Firm projects Probable/ speculative Closures up 15% or 23.6 million projects Russia&CIS Europe Urea market will be Target markets: + 9,3 mln.t balanced in long-te
Slide 21: Strategic Developments
Strategic Developments
Slide 22: Investment program 2019-2025
INVESTMENT PROGRAM 2019-2025 CapEx allocation*, USD mln Investment projects Investment projects • Investment projects CapEx 2019-2025: USD 1.1 bln Stay-in-business projects • Stay-in-business CapEx 2019-2025: USD 1.7 bln • Effect on EBITDA***: USD 450+ mln • Projected IRR**: 20%+ at WACC 11% Potenti
Slide 23: Production guidance 2019-2025
PRODUCTION GUIDANCE 2019-2025 Fertilizer production outlook, mln t Phosphate fertilizer production, mln t + 25% growth NPK share will grow to 55% + 5% CAGR + 25% growth + 5% CAGR Phosphate rock output, mln t Processing margin*, USD/ t of Ph-rock + 5% growth Source: PhosAgro *additional margin, that
Slide 24: Asset development pipeline
ASSET DEVELOPMENT PIPELINE PROJECT MAP CAPACITES NPK/NPS LINE CHEREPOVETS CAPACITIES NPK(S) for domestic and TARGET MAP for export markets Debottlenecking initiatives European markets SITE Metachem Balakovo Cherepovets COMMISSIONING 2021 2022 2019-20 DESIGNED CAPACITY 0.86 mtpa 1.7 mtpa Various targ
Slide 25: Financial review
Fin E a ancial review <2 PHOSAGRO:
Slide 26: Revenue breakdown
REVENUE BREAKDOWN Sales breakdown, mln tonnes FX rates, RUB/USD Revenue dynamics, RUB bln Revenue by region Revenue by product Source: PhosAgro 26 Fertilizer Industry Financial review Market outlook
Slide 27: The most efficient company amid market headwinds
THE MOST EFFICIENT COMPANY AMID MARKET HEADWINDS EBITDA and EBITDA margin for the last 7 years EBITDA margin comparison in 1Q20 EBITDA margin comparison in 2019 EBITDA margin comparison in 2018 PhosAgro has a proven track record as a sustainably profitable company in the industry, delivering leading
Slide 28: Financial performance
FINANCIAL PERFORMANCE EBITDA margin resilience vs DAP price DAP cash cost, USD/t - 36% down 2 FCF, mln USD Net debt/EBITDA, x Source: CRU, PhosAgro 28
Slide 29: Debt profile
DEBT PROFILE Liquidity position Debt repayment schedule(1) as of 31/03/2020 USD mln USD mln Current credit rating: 17 BBB- S&P global ratings Baa3 Moody’s 1 358 BBB- Fitch Ratings 2 81 Cash Available credit lines 634 512 552 Debt maturity(2) Debt currency(3) Debt type LT ST USD EUR RUR Fixed rate Fl
Slide 30: Dividend policy
DIVIDEND POLICY Board of Directors approved new dividend policy Historical payout ratio, USD bln on 24 September 2019 Dividend FREE CASH FLOW base Frequency Quarterly ND/EBITDA ND/EBITDA ND/EBITDA Threshold <1.0x 1-1.5x >1.5x Dividends per GDR and dividend yield, USD/GDR Payout >75% 50-75% <50% rati
Slide 31: Appendix
—~Appendix. _ <2 PHOSAGRO:
Slide 32: Russia: more space for growth
RUSSIA: MORE SPACE FOR GROWTH Fertilizer application 80 245 Grain average yield, 00 kg/ha USA, 2018 60 156 102 40 EU, 2018 58 EASTERN EUROPE, 2018 40 RUSSIA, 2018 20 RUSSIA, 2013 0 50 100 150 200 250 300 Fertilizer application, kg P2O5/ha Source: Rosstat, RAPU, IFA, FAO, PhosAgro 32
Slide 33: Cash cost performance
Cash cost performance DAP cash costs at FOB, USD/t Av. DAP cash cost, % 12 48 20 10 10 Urea cash costs at FOB, USD/t Av. Urea cash cost, % 21 53 26 Source: CRU, PhosAgro 33 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 34: 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