Phosagro · RUS:PHOR
Phosagro — Investor Presentation (February 2020)
33 slides from Phosagro's investor presentation, February 2020
Slide 1: Presentation for 1-on-1 meetings February 2020
Presentation for 1-on-1 meetings February 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 30/09/2019 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 4Q 4Q 4Q 4Q 9mo 9mo 9mo 9mo Access to markets Global footprint Fertilizer grades 39 40+ 25 PhosAgro sales Other regions Net fertilizer exp
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 principles - part of our strategy
ESG & UN PRINCIPLES - PART OF OUR STRATEGY ZERO HUNGER GOOD HEALTH AND WELL-BEING PARTNERSHIP FOR THE GOALS QUALITY EDUCATION PhosAgro has been recognized as a Global LIFE ON LAND Compact LEAD MSCI – BB CLEAN WATER AND SANITATION SUSTAINALYTICS – 54* RESPONSIBLE CONSUMPTION AND PRODUCTION CDP – C DE
Slide 11: ESG priorities
ESG PRIORITIES Environment 1. Air emissions reduction by 10% to 1.45 kg/ton 2. Water pollution reduction by 20% to 7.4 m3/ton 3. Reduction of CO2 emissions by 10% to 218 kg in СО2/ton 4. Increase waste recycling and disposal processes to 40% from 27% in 2018 Health & Safety 1. Zero fatal injuries 2.
Slide 12: Fertilizer Industry
—= ea ee Fertilizer In <2PHOSAGRO:
Slide 13: Fertilizer price performance, FOB Baltics
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 High demand for imported and OCP Ma’aden and OCP sites/ flood in the P2O5) in the USA fertilizers in N&S USA/slow
Slide 14: 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 14
Slide 15: 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 16: 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 17: 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 18: 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 19: 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 20: Strategic Developments
Strategic Developments
Slide 21: 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 22: 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 23: Asset development pipeline
ASSET DEVELOPMENT PIPELINE PROJECT MAP CAPACITES NPK/NPS LINE CHEREPOVETS CAPACITIES NPK(S) for domestic and TARGET MAP for export markets European markets Debottlenecking initiatives SITE Metachem Balakovo Cherepovets COMMISSIONING 2021 2022 2019-20 DESIGNED CAPACITY 0.86 mtpa 1.7 mtpa Various targ
Slide 24: Financial review
Fin E a ancial review <2PHOSAGRO:
Slide 25: Revenue breakdown
REVENUE BREAKDOWN Sales breakdown, mln tonnes FX rates, RUB/USD Revenue dynamics, RUB bln Revenue by region, % Revenue by product, % Source: PhosAgro 25 Fertilizer Industry Financial review Market outlook
Slide 26: The most efficient company amid market headwinds
THE MOST EFFICIENT COMPANY AMID MARKET HEADWINDS EBITDA and EBITDA margin for the last 6 years EBITDA margin comparison in 2019 EBITDA margin comparison in 2018 EBITDA margin comparison in 2017 PhosAgro has a proven track record as a sustainably profitable company in the industry, delivering leading
Slide 27: Financial performance
FINANCIAL PERFORMANCE DAP prices vs EBITDA margin DAP cash cost, USD/t - 34% down 2 FCF, mln USD Net debt/EBITDA, x Source: CRU, PhosAgro 27
Slide 28: Debt profile
DEBT PROFILE Liquidity position Debt repayment schedule(1) as of 31/12/2019 USD mln USD mln Current credit rating: 17 BBB- S&P global ratings Baa3 Moody’s 1 140 2 BBB- Fitch ratings 81 To be refinanced by the new Eurobond issue Cash Available credit lines 664 552 Debt maturity(2) Debt currency(3) De
Slide 29: New dividend policy
NEW DIVIDEND POLICY Board of Directors approved new dividend policy Historical dividend payments, 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%
Slide 30: Appendix
—~Appendix. _ <2PHOSAGRO:
Slide 31: 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 31
Slide 32: 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 32 PhosAgro at glance Fertilizer Industry Financial review Appendix
Slide 33: 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