Engro Corporation www.engro.com
Important Disclaimer THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR ANY INVESTMENT This presentation has been prepared by Engro Corporation Limited (“Engro”) solely for information purposes. No representation or warranty express or implied is made thereto, and no reliance should be placed on, the fairness, accuracy, sufficiency, completeness or correctness of the information or any opinion contained herein, or any opinion rendered thereto. The information contained in this presentation should be considered in the context of the circumstances prevailing at the time and will not be updated to reflect any developments that may occur after the date of the presentation. Neither Engro nor any of its respective subsidiaries, affiliates, officials, advisors, associates, employees or any person working for, under or on behalf, shall have any responsibility and/or liability of any nature whatsoever (in contract or otherwise) for any loss whatsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation does not constitute or form part of a prospectus, offering circular or offering memorandum or an offer, solicitation, invitation or recommendation to purchase or subscribe for any securities and no part of it shall form the basis of, or be relied upon in connection with, or act as any inducement to enter into any arrangement, agreement, contract, commitment or investment decision in relation to any securities. This presentation shall not at all be intended to provide any disclosure upon which an investment decision could be made. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not be accepted. The presentation may contain statements that reflect Engro’s own beliefs and expectations about the future. These forward-looking statements are based on a number of assumptions about the future, which are beyond Engro’s control. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Engro does not undertake any obligation to update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation and it does not make any representation, warranty (whether express or implied) or prediction that the results anticipated by such forward-looking statements will be achieved. In addition, past performance should not be taken as an indication or guarantee of future results. Certain data in this presentation was obtained from various external data sources that Engro believes to its knowledge, information and belief to be reliable, but Engro has not verified such data with independent sources and there can be no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of the included data. Accordingly, Engro makes no assurance, representation or warranty as to the accuracy, sufficiency, correctness or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. You agree to keep the contents of this presentation strictly confidential. All or any part of this presentation may not be taken away, reproduced, copied, redistributed, retransmitted or disclosed in any manner or form and for any purpose whatsoever. By attending this presentation, you are agreeing to be bound by the foregoing limitations. www.engro.com 2
Engro In A Snapshot Engro is Pakistan’s premium conglomerate and voted 27 times among the top 25 organizations in Pakistan Operating in Fertilizers, Power Generation, Telecom Infrastructure, Petrochemicals, Mining, Dairy, LNG and Chemical Storage 10-year Credit 2019 2019 Financial CAGR Rating Revenue Dividend Highlights $1.5Bn 11% AA+ $92Mn Tax Market Total Total Scale Contribution Capitalization Assets Employees $285Mn $1.3Bn 3.3K $3.7Bn Farmer Community Import Vocational People & Substitution Impact Investments Trainings Impact $3Mn $2Bn $12Mn 870+ Market Capitalization as at December 31 st , 2019 Note: Figures converted at PKR/USD 2019 Average www.engro.com 3
Our Footprint In Pakistan USD 285 million Rice Mill contribution to national Dairy Processing Plant exchequer Qadirpur Gas-fired Power Plant Fertilizer Complex Dairy Farm 18,000 3,300 indirect Dairy Processing Plant employees employees Thar Block II Coal Mining Karachi Head Office Chemical storage/ PVC manufacturing/ Terminal www.engro.com 4
Our Journey Through Time Engro has grown exponentially over the past 5 decades by adding new verticals and enhancing existing ones Divestiture Demerger PVC Food Food Engro & Vopak Advent Exxon divests. Company Demerger into a Becomes sole Enters food Partners with Engro Esso Mobil JV renamed Engro Chemical conglomerate with manufacturer of PVC in business RFC for EFoods Corporation and Pakistan Limited ECorp as the Hold Co Pakistan through a JV with Royal Vopak sign Mitsubishi LNG infrastructure agreement 1957 1965 1991 1995 1997 2005 2006 2007-09 2010 2014 2016 2017 2018 2019 Fertilizer Chemicals Energy Thar & LNG Transformation Projects Thar & Expansion • Esso Pakistan JV with Royal Vopak Enters energy business Commences expansion; Work on Thar begins Initiated Enfrashare • • • Thar Fertilizer created to enter into the and begins work on a largest industrial LNG Terminal One SAP • chemical business 220 MW power plant investment of $1.1Bn Human Capital achieves Transformation COD • Engro enters ESSO Pakistan Fertilizer Company Telecom Infra- structure sector www.engro.com 5
Current Business Portfolio Energy & Mining Operating Pakistan’s first 217 MW Fertilizers power plant on permeate gas; Top 50 fertilizer Operating first ever 2x330 MW manufacturer in the world; 5 decades of operations as mine-mouth coal power plant; a world class business Managing Pakistan’s first open -pit coal mine Dairy Petrochemicals 12 million consumer base; The only fully integrated chlor-vinyl market leader in Pakistan’s UHT chemical complex in Pakistan segment and number 2 dairy producing PVC and other chlorine dessert brand byproducts Telecom Infrastructure Operating an independent Chemical Storage & Handling tower company with a view to Pakistan’s first LNG receiving engage all the Mobile Network terminal, and an integrated bulk Operators to cater to their liquid chemicals and LPG terminal network deployment needs www.engro.com 6
Corporate Structure Engro Corporation Engro Engro Elengy Engro Engro Engro Eximp Engro Engro Polymer Foods Terminal Vopak Infiniti Agriproducts Energy Fertilizers (56%) (40%) (56%) (50%) (100%) (100%) (100%) (56%) Engro Enfrashare Powergen Thar (100%) (51%) Sindh Engro Coal Mining (12%) Listed Unlisted Engro Entities Entities Powergen Qadirpur (69%) www.engro.com 7
Engro’s Partners Long-standing collaborations with global companies Strong relationships with multilaterals Consistently able to develop world-class bankable projects Equity Partners Lending Partners Development Partners www.engro.com 8
Engro Corporation Consolidated - Business Revenue Revenue (USD Millions) Segment-wise Revenue (USD Millions) 32% ▲ Business FY 2019 FY 2018 Growth 11% ▲ 1,502 Fertilizers 807 726 1,141 4x ▲ Energy 333 79 FY 2019 FY 2018 Polymer and 7% ▲ 252 235 Chemicals Revenue grew by 32%: ▪ Higher realized Urea prices and improved product availability 5% ▲ Terminals 111 106 ▪ Contribution from new energy projects in Thar delivered in 2019 ▪ Higher domestic PVC premiums despite challenging macroeconomic conditions 22% ▲ Foods / Rice 283 233 www.engro.com 9
Engro Corporation Consolidated - Business Profits Profit After Tax (USD Millions) Energy loan component Segment-wise Profit (USD Millions) Energy loan USD 22 Mn component USD 9 Mn Business FY 2019 FY 2018 Growth 28% ▲ 12% ▲ Standalone 95 85 201 3% ▼ Fertilizers 112 116 157 6x ▲ Energy 59 11 Polymer and FY 2019 FY 2018 26% ▼ 24 33 Chemicals Standalone Profit After Tax increased by 12%: Higher dividend and interest income ▪ 32% ▲ Terminals 34 26 Consolidated Profit After Tax increased by 28%: ▪ Thar Energy projects contribution to PAT post COD on July 10th 3x ▼ Foods / Rice (6) 3 Record production in EFert due to plant efficiency and gas availability ▪ FCEPL ▪ Lower profitability in Polymer due to inflationary impacts and a one-time (8) - - gain recorded in 2018 Impairment Recognition of an impairment provision relating to the investment in ▪ 28% ▲ 201 157 Consolidated FCEPL in accordance with IAS 36 www.engro.com 10
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