2018 IFRS RESULTS 26 MARCH 2019
DISCLAIMER THIS PRESENTATION IS FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THIS PRESENTATION IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN. This Presentation has been prepared by JSC Acron (“Company”) . Information contained in this document is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities of the Company in Russia, and does not constitute an advertisement of the securities and must not be passed on to third parties or otherwise be made publicly available. This information is being provided to you solely for your information on the basis that you will keep confidential any information contained herein or otherwise made available. This information may not be reproduced, retransmitted, further distributed to any other person (excluding an investment professional’s advisers) or published, in whole or in part, for any purpose. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers, employees, agents or advisers or any other person as to, nor may any reliance be placed upon, the accuracy, completeness or fairness of the information or opinions contained in this presentation. By accepting this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business. This publication constitutes neither an offer to sell nor an invitation to buy securities, nor does it constitute an inducement to engage in investment activity. To the extent this presentation contains forward-looking statements, including, without limitation, statements containing the words “projected”, “planned”, “expected” and similar expressions (including the negative of such expressions, these statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, no undue reliance should be placed on such forward-looking statements should be placed. Neither the Company nor any of its shareholders, directors, officers, employees, agents or advisers nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. These forward-looking statements speak only as of the date of this document and the Company and its shareholders, directors, officers, employees, agents or advisers disclaim any obligation to update any such forward-looking statements in this document to reflect future events or developments. The distribution of this document in the Russian Federation and in overseas jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such jurisdiction. In particular, this document should not be distributed, published or reproduced in whole or in part in or into the United States (in particular to any US Person (as defined in regulation S promulgated under the US Securities Act), Canada, Japan or Australia or to any residents, corporations, citizens or nationals of any such jurisdictions or in any other country where such distribution may lead to a breach of any law or regulatory requirement. Distribution of this document in the United States in the absence of such an applicable exemption may constitute a violation of United States securities law. The information contained in this document is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States. The Company’s shares will have not been nor will they be registered under the US Securities Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or delivered within the United States or to US persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. 2
CONTENTS 1. 2018 Highlights 2. Financial Performance 3. Debt Position 4. 2019 Outlook 5. Q&A 3
2018: MARKET Market Overview Consumption, mn t 2017 2018 YoY Nitrogen fertilisers, N 105.3 105.7 +0.4% • Global mineral fertiliser consumption continued to grow. Phosphate fertilisers, P 2 O 5 44.9 45.3 +1.0% • Prices kept recovering in all three basic segments. Potash fertilisers, K 2 O 36.1 36.9 +2.2% Total 186.3 187.9 +0.9% Nitrogen Fertilisers Source: IFA, February 2019 • China remained a marginal producer of urea due to high prices for coal, which is a key input for urea production in that country, and environmental measures implemented by the government. Despite high costs, urea exports from China remained in demand in the global market, and the need to attract Indicative Prices them supported global prices. 350 700 FOB Baltic/Black Sea, USD/t Phosphate Fertilisers 300 600 • Higher prices for key DAP inputs – ammonia and sulphur – contributed to increased costs for non-integrated producers, particularly, in India. Since this 250 500 country is the largest DAP importer and accounts for a third of the world’s 200 400 imports, global DAP prices surged. Potash Fertilisers 150 300 Urea • Strong demand and producer discipline drove up global potash prices. Annual Potash DAP, rhs 100 200 contracts with India and China were secured at USD 290, up USD 50 and USD 60 year-on-year, respectively. Source: Fertecon, FMB Complex Fertilisers • NPK prices continued to rise, following the lead of prices for nitrogen, phosphate and potash fertilisers. 4
2018: COMPANY Acron Group continued to implement its Development Strategy: • The Company expanded its existing UAN, urea and NPK production capacity by 200, 50 and 50 ktpa, respectively. • A new 200 ktpa urea unit was commissioned. • A railroad connecting the Oleniy Ruchey mine and Titan station was put into operation. • The active stage of Talitsky mine construction commenced. • Distribution companies were set up in Brazil and Argentina. Commercial output was up 2.5% to hit a new record high of 7.5 mn t. In 2018, Acron paid dividends of RUB 337 per share in three installments. DIVIDENDS PAID IN CALENDAR YEAR COMMERCIAL OUTPUT 8 250 224 212 199 7 200 160 6 USD mn 150 Mn t 7.5 91 7.3 5 100 82 6.5 5.7 5.4 5.3 4 50 3 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 5 Note: Excl. Hongri Acron, sold in 2016
KEY FINANCIALS RUB mn USD mn 2018 2017 YoY 2018 2017 YoY 108,062 94,342 +15% 1,723 1,617 +7% Revenue 37,053 29,817 +24% 591 511 +16% EBITDA 34% 32% +2 p.p. 34% 32% +2 p.p. EBITDA margin 13,318 14,260 -7% 212 244 -13% Net profit 12% 15% -3 p.p. 12% 15% -3 p.p. Net profit margin 84,485 74,523 +13% 1,216 1,294 -6% Total debt 74,025 60,221 +23% 1,066 1,045 +2% Net debt 2.0 2.0 – 1.8 2.0 -0.2 Net debt / EBITDA 28,406 16,634 +71% 453 285 +59% Net cash flow from operating activities 14,542 11,299 +29% 232 194 +20% Capital expenditures 13,864 5,335 +160% 221 91 +142% Leveraged free cash flow 13,278 13,047 +2% 212 224 -5% Dividend paid to shareholders 7,265 7,279 0% Sales volume (kt) Note: The exchange rate was 69.4706 RUB/USD as of 31 December 2018 and 57.6002 RUB/USD as of 31 December 2017; the average annual exchange rate was 62.7078 RUB/USD in 2018 and 58.3529 RUB/USD in 2017. 6
QUARTERLY RESULTS REVENUE (USD mn) EBITDA (USD mn) PRODUCTION & SALES (kt) 2 250 200 500 176 Production Sales 457 434 151 423 2 050 410 140 150 1900 124 1879 1887 1855 400 1849 1818 1810 1 850 1783 100 1 650 300 50 1 450 200 0 1 250 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 INDICATIVEPRICES: INDICATIVE PRICES: AMMONIUM NITRATE NPK 16-16-16 RUB/USD DYNAMICS FOB BALTICS (USD/t) FOB FSU (USD/t) 250 350 70 66.5 65.5 316 308 213 61.8 291 300 284 200 60 186 186 56.9 166 250 150 50 200 100 150 40 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 7 Sources: Fertecon, FMB, CBR, company data
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