INVESTOR PRESENTATION Q3 2018
2 GRUPA AZOTY AT A GLANCE GRUPA AZOTY Grupa Azoty, Poland's largest chemical company and a significant chemical industry player in the EU market, is one of the major chemical groups in the EU, offering a diversified product portfolio – from mineral fertilizers and engineering plastics through OXO products to melamine. 4 locations of main production plants 60 group companies Approximately 15,000 employees No. 2 in the UE in mineral fertilizer production No. 3 in the EU in PA6 production
3 GRUPA AZOTY AT A GLANCE KEY DATA FINACIAL RESULTS PLNm MARKET Jan – Sep 2018 PLN 3.4bn CAPITALISATION REVENUE 7,202 SHARES 99,195,484 shares EBITDA 573 EBITDA MARGIN 8% min/max price NET PROFIT* 59 PLN 6 - PLN 113 NET DEBT 766 1M average trading volume NET DEBT/EBITDA 0.97 (ratio) PLN 3.204m WSE: WIG30, mWIG40, WIG- STOCK CHEMIA, WIG30, mWIG 40, INFORMATION WIG, WIG-Poland FOREIGN INDEXES: MSCI, FTSE ESG: RESPECT INDEX, FTSE4GOOD, MSCI ESG * Data adjusted for one-off items
4 GRUPA AZOTY AT A GLANCE OWNERSHIP STRUCTURE STATE TREASURY Pozostali - Government of Poland 25.75% EBOiR - Represented by the Chancellery 2.87% of the Prime Minister TFI PZU S.A. Opansa 8.60% EBRD Enterprises - European Bank of Research and Limited 9.51% Development Norica - Shareholder since 2013 indirectly Rainbee 19.82% TFI PZU S.A. Holdings ING OFE Limited - Financial investor 9.96% 9,90% Skarb ING OFE (NN OFE) Państwa 33.00% Norica Holding - Financial investor S.à. r.l. NORICA HOLDING S.À . R.L. 0.41% - Subsidiary of Acron and Mr. Viatcheslav Kantor - Shareholder since 2012 - Norica and its subsidiaries hold 19.82% of shares Free float – 25.75 % Based on official notifications received by the Company
5 GRUPA AZOTY MANAGEMENT BOARD DIVISION OF RESPONSIBILITIES AMONG MANAGEMENT BOARD MEMBERS Member President of the Vice President of the Vice President of Vice President of Vice President of of the Management Management Board the Management Management Board the Management the Management Wojciech Wardacki, Grzegorz Board Board Board Board PhD Witold Szczypiński Kądzielawski, PhD Paweł Łapiński Mariusz Grab Artur Kopeć Director General Management Procurement Infrastructure Production assets Finance Grupa Azoty S.A. and HR policy strategy Raw material and Plant safety Research and Planning Audit and risk Agro Segment product and infrastructure development and controlling integration Environmental Plastics Segment Communication Logistics Growth strategy protection Organic Synthesis Social dialogue Investments CSR Segment President of the Production Management Board Investor relations Grupa Azoty integration POLICE M&A GRUPA AZOTY S.A. 5
6 GRUPA AZOTY AT A GLANCE BROAD PRODUCT PORTFOLIO Agro Fertilizers 48% Chemicals 31% Other 2% Energy 3% Plastics 16% Jan – Sep 2018
7 GRUPA AZOTY AT A GLANCE CORE BIZNES ZMPP Fosfory BBM Port Grupa Azoty Police ZMPP Terminal NPK • Port Navitrans Urea NPK TiO2 • Logistics Grupa Azoty Puławy Ammonia Urea N fertilizers Melamine CPL Goat TopCo GmbH Grupa Azoty Siarkopol Grupa Azoty Speciality S ATT Polymers fertilizers Grupa Azoty S.A. PA6 Parent Grupa Azoty Z.A. Chorzów S.A. N fertilizers CPL Grupa Azoty S.A. NPK Kędzierzyn • AN, CAN • ASN, AS Compounding PA6 • CPL, PA 6, POM Logistics N fertilizers Urea • Compounding Logistics Production OXO Plasticizers Production
ACQUISITIONS
9 ACQUISITIONS CREATING VALUE FOR GRUPA AZOTY THROUGH ACQUISITIONS • Transaction completed on • Puławy (up to 95.98%) November 26th 2018 • Siarkopol (99.33%) • Puławy (10.4%) 10.0 9.9 9.8 9.6 9.0 • Police (66%) • Kędzierzyn (94%) 7.2 7.1 5.3 • ATT Polymers GmbH (100%) • Kędzierzyn (53%) 1.9 1.4 1.3 1.2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan-Sep 2018 Consolidated revenue (PLNbn) 9
10 ACQUISITIONS ENHANCED FERTILIZER PRODUCT PORTFOLIO Fertilizer value pyramid COMPO EXPERT Speciality fertilizers product portfolio Liquid fertilizers Technologically advanced agrochemical products with a higher added value than commodity fertilizers. Designed and biostimulants mainly for high-value crops (fruit, vegetables, ornamental plants). Speciality fertilizers are priced higher, but offer Fertigation many benefits, including slow release of nutrients. Some and foliar speciality products can be used for covered or greenhouse cultivation, as well as for lawns and turf grass. They are fertilizers available in solid form (granules) and as liquids (for soil and foliar application). The most advanced products positively influence certain characteristics of the plants, such as size, SRF | CRF colour or – in the case of fruit and vegetables – taste. Stabilised NPK Volume Margin NPK (SOP-based) NPK (MOP-based) Grupa Azoty Commodity fertilizers product portfolio Standard fertilizers widely applied all around the world. Typically UAN | ASN | CAN contain one or two nutrients. In the case of NPK fertilizers, they are based on potassium chloride. Priced lower that speciality fertilizers. AN | AS | DAP Ammonia | Urea
11 ACQUISITIONS COMPO EXPERT SALES MARKETS (2017) Americas Western and Central Europe Revenue (FY 2017) approximately EUR 333m Southern Europe and Africa Asia and Australia Adjusted EBITDA (FY 2017) approximately EUR 30m Markets reached by COMPO EXPERT products Key sales market
12 ACQUISITIONS COMPO EXPERT ACQUISITION INTEGRATION INITIATIVES Consolidation of the Grupa Appointment of consolidation teams for: Azoty Group’s and the Procurement TopCo Goat Group’s financial statements Agro Segment’s sales and marketing Research and development since Q4 2018 Manufacturing, technical and technology areas Accounting and financial flows Legal Corporate supervision IT 1. 2. 3. 4. 5. Production Sales synergies R&D synergies Raw material Financing know-how and product synergies synergies synergies
OPERATIONS
14 OPERATIONS ENERGY COMMODITIES ELECTRICITY PRICES [YOY] NATURAL GAS PRICES 33% PLN/MWh 48% 140 30 290 130 25 240 120 110 20 190 EUR/MWh PLN/MWh 100 15 140 90 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 IRDN 80 10 70 5 HARD COAL PRICES [YOY] 60 50 0 USD/t sty 16 kwi 16 lip 16 paź 16 sty 17 kwi 17 lip 17 paź 17 sty 18 kwi 18 lip 18 paź 18 0% 120 Average gas price paid by GA PGNiG tariff gas price Imported gas price 100 PPE gas price TTF DA gas price (right axis) 80 60 NATURAL GAS CONSUMPTION (MILLION MWH) 40 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 ARA H1 2018 TOTAL 11.8 Grupa Azoty S.A. 1.0 CO2 PRICES [YOY] EUR/t Grupa Azoty POLICE 2.9 180% 22 Grupa Azoty PUŁAWY 5.7 17 12 Grupa Azoty KĘDZIERZYN 2.2 7 2 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 EEX
15 OPERATIONS AGRO FERTILIZERS 2017 PRODUCTION CAPACITIES Revenue: YARA Compound PLN 5.3bn fertilizers Grupa Azoty 36% Nitrogen No. 2 4 Agrofert 3 fertilizers and EBITDA: 0% 0% in EU ammonia Borealis PLN 484m 64% 5 6 0% 0% Fertiberia Eurochem EBITDA MARGIN: No. 1 9.6% Achema JSC in Poland Timac Agro Azomures TARGET MARKETS Petrokemija [tt] 0 5 000 10 000 15 000 Europe - Source: Fertilizers Europe EU (excl. other Poland) 0.2% 2.8% South America Poland 0.2% 6.8% Africa 0.1% North America Asia 0.0% 0.0%
16 OPERATIONS CHEMICALS 2017 Revenue: PLN 2.8bn EBITDA: Melamine Titanium PLN 348m 17% white 13% EBITDA MARGIN: 12.5% Urea (technical Other grade) 21% 21% PRODUCT GROUPS OXO alcohols Plasticizers 20% 8%
17 OPERATIONS CHEMICALS PRODUCTION CAPACITIES Construction industry PLASTICIZERS* ExxonMobil Basf Plasticizers No. 5 Evonik Electric cables and wiring Oxoviflex in EU Polynt Grupa Azoty No. 1 OXEA GROUP in DEZA Poland Aldehydes Footwear Perstorp OXO AB [tt] 0 100 200 300 400 500 OXO * * Basf Automotive OXO alcohols Oxea Group No. 5 Ineos in EU Perstrop OXO AB No. 1 Grupa Azoty in Paints and varnishes Poland Oltchim SA [tt] 0 100 200 300 400 500 *Production capacities for phthalate plasticizers and terephthalate plasticizers. ** Production capacities for 2-EH, N-butanol, isobutanol. Source: Plasticizers Alkohols 2013 and Plasticizers (UE) 2013
18 OPERATIONS CHEMICALS PRODUCTION CAPACITIES Wood processing MELAMINE (laminates, resins, adhesives) OCI Melamine Automotive industry (varnishes) Grupa Borealis No. 3 Paper industry in EU Grupa Azoty Electrotechnical industry BASF SE No. 1 in Poland Anti-inflammatory agents Azomures S.A. [tt] 0 20 40 60 80 100 120 140 160 Plastics Rubber , leather TITANIUM WHITE and ceramic industries No. 1 Textile and cosmetics industries in Poland Paints Laminates Paper Varnishes OPERATIONS
19 OPERATIONS PLASTICS 2017 PRODUCTION CAPACITIES Revenue: POLYAMIDE 6 PLN 1.4m Caprolactam 26% Polyamide EBITDA: 68% BASF* Other PLN 221m 6% Lanxess* GRUPA AZOTY* EBITDA MARGIN: Aquafil* 15.6% No. 3 in EU DSM* Radici TARGET MARKETS Domo* No. 1 in Rhodia Poland Nyobe UE 64% Ube* Nurel Asia 0 50 100 150 200 250 10% other Poland 3% 23% Source: PCI Nylon, YellowBook 2015 Integrated
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