INVESTOR PRESENTATIONJUNE 2019
2
DISCLAIMER
THIS PRESENTATION IS FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE AND MAY NOT BEREPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THIS PRESENTATION IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLYIN 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 tothird 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 otherwisemade available. This information may not be reproduced, retransmitted, further distributed to any other person (excluding an investment professional’s advisers) orpublished, 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 itsshareholders, directors, officers, employees, agents or advisers or any other person as to, nor may any reliance be placed upon, the accuracy, completeness orfairness of the information or opinions contained in this presentation. By accepting this Presentation you acknowledge that you will be solely responsible for yourown 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 ownview 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 doesit 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 involveknown and unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, orindustry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Giventhese 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 documentor 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 itsshareholders, directors, officers, employees, agents or advisers disclaim any obligation to update any such forward-looking statements in this document to reflectfuture 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 documentcomes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of anysuch 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 anyUS Person (as defined in regulation S promulgated under the US Securities Act), Canada, Japan or Australia or to any residents, corporations, citizens or nationals ofany 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 inthe 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. TheCompany’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 securitiesregulatory 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 (asdefined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of theSecurities Act and applicable state securities laws.
3
RECENT DEVELOPMENTS
• In March and May 2019, Acron Group launched two new nitric acid units, 135 ktpa each.
• On 11 March 2019, Acron’s EGM approved distribution of dividends in the amount of RUB 130 per share. Therecord date for persons entitled to dividends is 22 March 2019.
• On 30 May 2019, Acron’s AGM approved distribution of dividends in the amount of RUB 135 per share. Therecord date for persons entitled to dividends is 11 June 2019.
• In May 2019, Acron Group extended for two years the 5-year syndicated structured pre-export finance facility ofup to USD 750 mn, which was originally signed with a group of banks in May 2017. The grace period wasprolonged from two to four years.
• Acron Group released its 1Q 2019 IFRS results. EBITDA was up 13% YoY to USD 158 mn, while EBITDA margin was35%. Net debt/ EBITDA was 1.7 as of the quarter-end.
• Acron Group executed a special investment contract for the Talitsky potash mine and signed with a number ofbanks a preliminary term sheet for the project financing.
4
SPECIAL SITUATION
How does a weaker rouble impact the company’s financials?
FX29%
Rouble71%
Total cash costs structure,2018
Russia18%
Export82%
0
5
10
15
20
25
50 55 60 65 70 75 80
USD
mn
per
RU
B 1
of
rate
USD/RUB
EBITDA gain in 2019if exchange rate depreciates for RUB 1
Revenue structure,2018
Note: company estimates
5
CONTENTS
• 5Acron at a glance
• 8Market overview
• 12Company overview
• 20Development programme
• 26Financial standing
• 30Appendices
6
USD mn 2016 2017 2018
Revenue 1,333 1,617 1,723
EBITDA 445 511 591
margin 33% 32% 34%
Net profit 381 244 212
LFCF 89 91 221
0
1
2
3
4
5
6
7
8
Other Complex Nitrogen
• Leading low-cost producer of NPK and nitrogenfertilisers
• In Top 3 NPK producers in Europe and in Top 10 globally
• Vertical integration in nitrogen and phosphates Potash project underway
• Developed logistics and distributionSales to >60 countries
• Listed on MOEX and LSE
• 11,000 employees
COMPANY PROFILE
ACRON GROUP
FINANCIAL RESULTS
COMMERCIAL OUTPUT
USD mn 14/06/19MCap 2,862Free-float 11%Net debt* 1,044Stake in ATT 213Assets* 3,050
NPK complex fertiliser
K
PN
OUR KEY PRODUCT
* As of 31 March 2019
mn t
7
• Sustainable increase in demand for mineral fertilisers (page 9)
• Efficient management with a proven track record of successful projects (page 21)
• 5-year average EBITDA margin of 35% (page 27)
• Cost control based on nitrogen and phosphate vertical integration and capped gas prices in Russia (page 18)
• Output growth at a 5-year CAGR of 7.4% (page 21)
• Further output growth due to smart investment programme (page 22)
GROWING BUSINESS
• 5-year average dividend yield of 8.7% (page 29)
• ~ $200 mn paid yearly as dividends in 2016 - 2018 (page 29)
DIVIDENDS
INVESTMENT CASE
8
CONTENTS
• 5Acron at a glance
• 8Market overview
• 12Company overview
• 20Development programme
• 26Financial standing
• 30Appendices
9
The bio-fuel industry keeps growing.
As a result, demand for crops as a feedstock strengthens.
Living standards in developing countries keep improving, leading to increase in meat consumption.
As a result, demand for feed crops is going up.
The world population keeps growing.
As a consequence, demand for agricultural products increases.
Mineral fertiliser consumption expands every year.
0
50
100
150
200
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
22
mn t* N (CAGR 2017-2022: 1.1%)P (CAGR 2017-2022: 1.3%)K (CAGR 2017-2022: 1.9%)
CAGR (2017-22): 1.3%
* in terms of nutrientSource: IFA, June 2018
Agricultural production expands while the area of farming lands stays relatively stable.
Farmers have to take additional measures to get higher yields.
0
500
1000
1500
2000
0
800
1600
2400
3200
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027
mn hamn t
Wheat Coarse grains Rice Agricultural land* (rhs)
CAGR (2017-27)cereals: 1.1%
agricultural land: 0.18%
* arable land and land under permanent cropsSource: OECD-FAO, July 2018
40
80
120
160
200
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
Biodiesel Ethanol
CAGR (2017-27): 0.8%
bn l
Source: OECD-FAO, July 2018
MINERAL FERTILISER MARKET DRIVERS
0
2
4
6
8
10
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
20
30
20
35
20
40
20
45
20
50
Now: 7.6 bn
CAGR (2015-25): 1.0%
bn
Source: United Nations Population Division, 2017
30
31
32
33
34
35
36
20
07
20
09
20
11
20
13
20
15
20
17
20
19
20
21
20
23
20
25
20
27
CAGR (2017-27): 0.30%
kg per capita
Source: OECD-FAO, July 2018
10
SUPPLY / DEMAND BALANCE
Source: IFA Medium-Term Outlook on Fertilizer Supply in 2018-2022, June 2018
IFA: Baseline Scenario
• Reduction of surplus in nitrogen segment
• Static balance in phosphate segment
IFA: Upside Scenario
• Reduction of surpluses in nitrogen and phosphate segments
• Static balance in potash segment
2022
11
0
100
200
300
400
500
600
700
2011 2012 2013 2014 2015 2016 2017 2018 2019
USD
/t
Urea, FOB Baltic Sea AN, FOB Baltic NPK, FOB FSU UAN, FOB Black Sea Ammonia, FOB Yuzhnyy
GLOBAL PRICES
Source: Fertecon, FMB
USD/t, FOB BALTIC/BLACK SEA 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD
Ammonia 519 544 479 499 390 237 267 288 253
Urea 416 400 327 311 267 194 218 251 244
AN 313 306 287 282 223 166 193 188 188
UAN 308 288 256 243 198 139 145 179 159
NPK 16-16-16 452 451 384 354 355 292 265 300 309
12
CONTENTS
• 5Acron at a glance
• 8Market overview
• 12Company overview
• 20Development programme
• 26Financial standing
• 30Appendices
13
GLOBAL FOOTPRINT & VERTICAL INTEGRATION
DISTRIBUTION
Beijing Yong Sheng Feng AMPC, Ltd. Distribution network in China
AgronovaDistribution network in RussiaStorage capacity: 189 kt
Acron USA Inc.
Acron Switzerland AG
LOGISTICS
Acron-Trans railway operator
Approx. 1,700 railcars and tanks
Two AS DBT port terminal facilitiesCapacity: Ammonia – 1.5 mtpa
UAN – 1.85 mtpaBulk cargo – 2.5 mtpa
Andrex port terminal facilityCapacity: 500 ktpa
PRODUCTION
Acron
2018 commercial output: 5.2 mn t
Dorogobuzh
2018 commercial output: 2.0 mn t
1
2
6
7
8
9
10
11
12
12
91
3
67
10
2
8
4
11
5
VPC (potash subsoil licence)Reserves under JORC: 60 mn t KCl
NWPC, Oleniy Ruchey mine2018 output: 1.2 mn t of apatite concentrate
North Atlantic Potash Inc. (potash mineral leases in Saskatchewan, Canada)Recoverable resources (inferred): 418 mn t KCl
3
4
5
MINING
Countries to which the Group supplies its products
Global traders
Acron France SAS13
13
Acron Brasil Ltda.14
14
15
Acron Argentina SRL15
14
PRODUCTION FACILITIES
ACRON DOROGOBUZH OLENIY RUCHEY MINE, NWPC
CHEMICAL PRODUCTION MINING
Main production capacity, ktpa
Ammonia: 2,100 Urea: 1,300
Ammonium nitrate*: 1,500 Formalin: 240
UAN: 1,500 Methanol: 110
NPK: 1,600 UFR: 290
Main production capacity, ktpa
Ammonia: 600
Ammonium nitrate: 1,250
NPK: 750
Production capacity, ktpa
Apatite concentrate: 1,200min 39% P2O5
Reserves B+C1:250.1 mn t of ore (40.9 mn t P2O5)
Prospects:
Gradual production ramp up to 2.0 mtpa (page 24)
* Incl. liquid solution used for UAN production Prospects:
Modernization and implementation of new projects (page 23)
Prospects:
Modernization and implementation of new projects (page 23)
Acron Group is 100% self-sufficient in ammonia and phosphate rock
Excess is sold in the market
15
NPK + Bulk Blends: 42%
Ammonium nitrate*: 18%
UAN: 15%
Urea*: 8%
Ammonia: 7%
UFR: 3%Apatite concentrate: 2%
Other: 5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2014 2015 2016 2017 2018 2019
NPK premiumto the basket**
Average: 20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2014 2015 2016 2017 2018 2019
AN premium/discountto Urea by nutrient
Average: 12%
-10%
-5%
0%
5%
10%
15%
20%
25%
2014 2015 2016 2017 2018 2019
UAN premium/discountto Urea by nutrient
Average: 4%
Note: 2018 revenue breakdown* Including agricultural and industrial products** Calculated via urea, DAP and potash
FOCUS ON PREMIUM PRODUCTS
• Acron Group focuses on high valueadded products
• With a broad product portfolio the Group meets the market requirements
16
PRODUCTION CHART
AN*
Complex mineral fertilisersNitrogen mineral fertilisers
1,8Urea**
NPK 2.4 mn t
UAN 1.5 mn t
PhosphatesP
PotashK
AmmoniaN
1.2 mn t
2.7 mn t
RAW MATERIALS AND SEMI-FINISHED GOODS
OWN PRODUCTION
VALUE-ADDED PRODUCTS
INDEPENDENT SUPPLIERS
+0.8 mn t
+1 mn t Own capacity under construction
2.8 mn t
1.3 mn t
GROWTH OF VALUE ADDED
2018 sales: 1.5 mn t
2018 sales: 0.4 mn t
2018 sales: 1.2 mn t
2018 sales: 2.2 mn t
PotashKdeveloping
+2.6 mn t
0.6 mn t
* Agricultural and industrial products and liquid solution used for UAN production** Agricultural and industrial products
17
DIVERSIFIED SALES MARKETS
Strategic market for the Group.Major sales: AN, NPK, industrial products.
Important market for Russian fertiliser producers due to geographical location
USA is a large market for UAN and other nitrogen fertilisers.
Large buyer of AN and NPK
Growing market for nitrogen and complex fertilisers
China: 7%
Largest NPK market
Thailand: 5%
One of the most developedmarkets in the region
Other: 7%
Traditional market for main fertilisers and ammonia with stable demand and sales structure
SALES TO
67COUNTRIES
Europe: 19%
Asia: 19%
Latin America: 21%
USA and Canada: 13%
Africa: 4%
Russia – 18%
Note: 2018 revenue breakdown
Brazil: 14%
Other: 7%
CIS: 6%
Acron Group• #1 AN exporter to Brazil (47% of AN imports)• #1 UAN exporter to USA (33% of UAN imports)• #2 NPK exporter to Brazil (31% of NPK imports)• #2 NPK exporter to China (23% of NPK imports)• #2 NPK supplier to Russia (20% of NPK sales)
18
Staff costs12%
Potash12%
D&A17%
Fuel and energy
14%
Natural gas29%
Repairs and maintanance
6%
Other11%
COGS BREAKDOWN
COST SIDE
Note: Based on FY 2018 IFRS statements
Source: Bloomberg, Yara, company data
The growth of Russian natural monopoly rouble tariffs (gas, electricity
transmission, etc.) will be limited by the inflation rate,
according to the Russian authorities’ proposals
VERTICAL INTEGRATION IN NITROGEN AND PHOSPHATES,
AND CAPPED GAS PRICES IN RUSSIA
HELP ACRON GROUP KEEP COSTS UNDER CONTROL
2.4
3.8
4.8
5.7
Current price
2.3
0
2
4
6
8
10
12
2011 2012 2013 2014 2015 2016 2017 2018 2019
GAS PRICES, $/MMBTU
USA (Henry Hub, spot) Europe (Zeebrugge Hub, spot) Yara World
Yara Europe Acron, incl. delivery
19
OUR STRENGTHS
• Focus on premium products
•Diversified product range
NITROGEN & COMPLEX FERTILISERS
•Complete nitrogen and phosphate vertical integration VERTICAL INTEGRATION
•Gas prices in Russia are below world prices. With their further growth limited by the inflation rate, the Company will keep its status of a low-cost producer.LOW-COST PRODUCER
•Acron (Veliky Novgorod plant) is just 200 km from the nearest Baltic port
•Own port terminal facilities on the Baltic SeaBEST LOGISTICS IN RUSSIA
• Sales to over 60 countries. Leading positions in key sales markets: Russia, Brazil,USA, China, and Thailand.
•Distribution networks in Russia and China. Trading companies in Europe, USA and Latin America.
DIVERSIFIED SALES MARKETS
•Output growth in the coming years due to smart investment programmeGROWING BUSINESS
20
CONTENTS
• 5Acron at a glance
• 8Market overview
• 12Company overview
• 20Development programme
• 26Financial standing
• 30Appendices
21
5.3 5.4 5.7
6.5
7.3 7.5
3
4
5
6
7
8
2013 2014 2015 2016 2017 2018
mn t
1000
671
World average Acron Group
$/т
- 33% 1000731
World average Acron Group
$/т
- 45%
OUR RECORD OF SUCCESS
UREA UNITS2008-2012, 2017-2018Construction of two new urea units and upgrade of the existing facilities with total capacity increase of 830 ktpa
UAN PRODUCTION2006-2008, 2013-2014, 2017-2018Construction of a new UAN unit with further capacity expansion to 1.5 mtpa
BCT AND DBT SEAPORT TERMINALS2006-2009, 2011-2016Construction and expansion of transshipment capacity
OLENIY RUCHEY MINE2010-2014Construction of an open pit with a capacityof 1.2 mtpa of apatite concentrate
AMMONIA-42012-2016, 2017Construction of a new ammonia unit with further capacity expansion to 800 ktpa
RARE EARTH ELEMENTS2010-2016Construction of a REE production unit with a capacity of 200 tpa of oxides
COMMERCIAL OUTPUT
CAPEX PER TONNE OF NEW CAPACITY
Ammonia Apatite concentrate
Source: Integer Research, company data
EFFECTIVE INVESTMENTS ENSURE BUSINESS GROWTH
Note: Excluding Hongri Acron, sold in 2016
22
DEVELOPMENT STRATEGY
1 200
2 700
1 050
1 300
2 750
2 300
250
200
50
2 000
800
330
520
100
600
250
140
0 1 000 2 000 3 000 4 000
MOP
Apatite
Ammonia
Urea
UAN
CAN
AN*
NPK
2017 Now 2025F
ktpa
MAIN CAPACITY
* Incl. liquid solution used for UAN production
COMMERCIAL OUTPUT
DEVELOPMENT STRATEGY FOR 2017 – 2025
• A number of highly effective projects at Acron and Dorogobuzh
• The projects can be combined, which offers flexibility in terms of implementation timeline and Capex per year
EXPECTED RESULTS
• Higher capacity and output
• Higher margin due to processing excess ammonia and apatite concentrate
0
2
4
6
8
10
12
2017 2026П
mn t
Acron Dorogobuzh
NWPC (for sale) VPC (for sale)
+ 40%
7.3
10.2
23
PROJECTS AT ACRON AND DOROGOBUZH
15-20%weighted average IRR
Projects with relatively small Capexand short payback period
Main projectsTimeline,
yearsOutput increase,
ktpaCapex,
USD mnStatus
Site: Acron
Increase of Urea-5 unit capacity 2018 +50 4 Completed
Construction of Urea-6 unit 2017-2018 +200 30 Completed
Construction of 3 nitric acid units andincrease of AN and NPK units capacity
2017-2019AN: +250NPK: +70
60 Underway
Increase of Ammonia-4 unit capacity 2017-2020 +70 28 Underway
Construction of urea granulation unit 2018-2019 Granulation: +700 35 Underway
Construction of CN unit 2019-2020 +100 15 Underway
Increase of Urea-6 unit capacity 2019-2020 +520 81 Underway
Increase of Ammonia-3 unit capacity 2023-2025 +130 75 -
Increase of NPK unit capacity 2024-2025 +70 35 -
Site: Dorogobuzh
Increase of ammonia unit capacity 2017-2019 +130 75 Underway
Construction of nitric acid unit and CAN unit 2019-2021CAN: +600AN: -470
70 Underway
Total 2017-2025 ~500
Note: It was decided to postpone the construction of NPK/DAP/MAP production facility until the completion of the Talitsky mine project.
24
OLENIY RUCHEY UNDEGROUND MINE:APATITE CONCENTRATE
• Stage 1: open pit, processing facility, roads and infrastructureCapacity: 1.2 mtpa of apatite concentrateCommissioning: December 2012
• Stage 2: underground mine, expansion of processing facilityFirst ore from the underground mine extracted in 2017Gradual production ramp up to 2.0 mtpa by 2023
PROJECT DATA
• Location: Oleniy Ruchey mine, Murmansk region• Developer: NWPC (100% subsidiary of Acron)• Reserves: 40.9 mn t P2O5*• Capex, incl. 1st & 2nd stages + infrastructure:
USD 1.1 bn, incl. over 90% already invested• Magmatic ore with low cadmium and other
impurities
* B+C1 reserves: 250.1 mn t ore (41.1 mn t P2O5) as of 31 December 2018
25
TALITSKY MINE: POTASH
CURRENT STATUS
• Special investment contract executed and a preliminary term sheet for the project financing signed
• Design of all key mine facilities completed.Approval of the State Expert Review Board obtained.
• Shaft sinking started in Q2 2018. By now, more than 50% of sinking operations has been completed.
• Mine shafts’ design data:- skip shaft: 8 meter wide and 414 meter deep,- cage shaft: 8 meter wide and 363 meter deep.
PROJECT DATA
• Developer: Verkhnekamsk Potash Company (VPC) Shareholder structure: Acron – 60.1%, a pool offinancial investors – 39.9%
• Design capacity: 2.0 mn tpa of potash,further expansion to 2.6 mn tpa
• Reserves under JORC*: 60 mn t KCl• Capex: USD 1.5 bn for 2.0 mn tpa capacity,
+ USD 0.3 bn for expansion to 2.6 mn tpa• Timeline**
- 2021: Start of ore extraction- 2025: Reaching design capacity
700 ktpaIn-house
potash consumptionfrom 2025
VERKHNEKAMSK POTASH DEPOSIT
2
1
3
1 - Acron (Talitsky): licence obtained in 2008
2 - Uralkali: 5 mines and 2 subsoil licences
3 - EuroChem (Palashersky)
* Proven and Probable, 2016** Under Detailed Development Plan for Potassium Salt Reserves at the Talitsky Area of VerhnekamskDepoist (Mining Institute of the Ural Branch of the Russian Academy of Science, 2016)
26
CONTENTS
• 5Acron at a glance
• 8Market overview
• 12Company overview
• 20Development programme
• 26Financial standing
• 30Appendices
27
EFFICIENT EXPANDING BUSINESS
REVENUE
EBITDA
$1.6 bn5-year average revenue
35%5-year average EBITDA
margin
Note: In USD mn; Revenue and EBITDA recalculated excluding Hongri Acron figures
EBITDAMARGIN
1 5791 008
1 3071 915 1 931 1 813 1 671 1 510 1 333
1 617 1 723
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
789
248 312
677 623464 507
672445 511 591
50%
25% 24%
35% 32%26%
30%
45%
33% 32% 34%
0%
10%
20%
30%
40%
50%
60%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0
100
200
300
400
500
600
700
800
900
28
RUB loans and bonds
26%
EUR loans11%
USD loans63%
PORTFOLIO INVESTMENTS AND VALUABLE ASSETS
• 19.8% stake in Grupa Azoty valued at USD 213 mn*
• Potash mineral leases in Saskatchewan, Canada
DEBT POSITION
AS OF 31 MARCH 2019
• Total debt: USD 1,269 mn
• Net debt: USD 1,044 mn
• Average interest rate: 5.4%
• Net debt / EBITDA: 1.7
• Credit Ratings: Moody’s Ba3/Stable, Fitch BB-/Stable
• In May 2019, USD 750 mn PXF extended for two years
DEBT BY CURRENCY
DEBT MATURITY SCHEDULE**
* As of 14 June 2019
95
204
328
257 247
126
0
100
200
300
400
2019 2020 2021 2022 2023 Further
USD
mn
Duration: 2.7 years
** As of 30 May 2019
29
DIVIDENDS PAID IN CALENDAR YEAR
PJSC ACRON DIVIDENDS
DIVIDEND YIELD
160
91
199224 212
164
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019YTD*
USD
mn
12.2%
5.3%
9.3% 9.4%
7.5%
5.7%
0%
2%
4%
6%
8%
10%
12%
14%
2014 2015 2016 2017 2018 2019YTD*
8.7%5-year average
dividend yield
~ $200 mnDividends paid
in 2016 - 2018
* Approved
30
APPENDICES
31
QUARTERLY HIGHLIGHTS
31
REVENUE ($ mn) EBITDA ($ mn)
WORLD PRICESAMMONIUM NITRATE, FOB BALTIC ($/t)
WORLD PRICESNPK 16-16-16, FOB FSU ($/t)
PRODUCTION & SALES (kt)
Source: Fertecon, FMB, CBR, company data
140124
151
176158
0
50
100
150
200
1Q2018
2Q2018
3Q2018
4Q2018
1Q2019
186
166
213
186 182
100
150
200
250
1Q 2018
2Q 2018
3Q 2018
4Q 2018
1Q 2019
284 291308 316 312
100
150
200
250
300
350
1Q 2018
2Q 2018
3Q 2018
4Q 2018
1Q 2019
56.9
61.8
65.566.5 66.1
50
55
60
65
70
1Q2018
2Q2018
3Q2018
4Q2018
1Q2019
USD/RUB DYNAMICS
423410
434457 446
250
300
350
400
450
500
1Q2018
2Q2018
3Q2018
4Q2018
1Q2019
1900
18491879
1887 19361856
1809 17831865
1802
1 300
1 500
1 700
1 900
2 100
1Q2018
2Q2018
3Q2018
4Q2018
1Q2019
Production Sales
32
FINANCIAL HIGHLIGHTS
RUB mn USD mn
3M 2019 3M 2018 3M 2019 3M 2018
Revenue 29,504 24,050 446 423
EBITDA 10,456 7,958 158 140
EBITDA margin 35% 33% 35% 33%
Net profit 8,774 4,146 133 73
Net profit margin 30% 17% 30% 17%
Net operating cash flow 7,345 4,590 111 81
Capex 4,340 2,613 66 46
Leveraged free cash flow 3,005 1,977 45 35
31/03/19 31/12/18 31/03/19 31/12/18
Assets 197,448 186 784 3,050 2,689
Net debt 67,614 74 025 1,044 1,066
Net debt/ EBITDA 1.7 2.0 1.7 1.8
33
FINANCIAL HIGHLIGHTS
RUB mn USD mn
2018 2017 2018 2017
Revenue 108,062 94,342 1,723 1,617
EBITDA 37,053 29,817 591 511
EBITDA margin 34% 32% 34% 32%
Net profit 13,318 14,260 212 244
Net profit margin 12% 15% 12% 15%
Net operating cash flow 28,406 16,634 453 285
Capex 14,542 11,299 232 194
Leveraged free cash flow 13,864 5,335 221 91
31/12/18 31/12/17 31/12/18 31/12/17
Assets 186,784 186,894 2,689 3,245
Net debt 74,025 60,221 1,066 1,045
Net debt/ EBITDA 2.0 2.0 1.8 2.0
34
HISTORY OF COMPANY
BUILDINGPRODUCTION
CAPACITY
• 1967: Launch of the first production facility –methanol unit
• 1982: Start of NPK production
• Focus on domestic sales
PRIVATISATION AND INDUSTRY
CONSOLIDATION
• 1991-1995: JSC Acron privatisation and JSC Dorogobuzhconsolidation
• Launch of export sales
• Development of distribution and logistics network
VERTICALINTEGRATION
• 2006-2008: Acquisition of phosphate and potash licences
• 2007-2008: Listing on MOEX and LSE
• 2009-2012: Construction & commissioning of phosphate mine
• 2014-2016: Construction & commissioning of ammonia unit
LEVERAGINGEXISTING CAPACITY
• 2017: Adoption of new development strategy
• Construction of new processing facilities
• Construction of potash mine
1961-1992
1992-2005
2005-2017
2017-2025
35
GROUP STRUCTURE
Acron Dorogobuzh96.7%
NWPC(phosphate
rock producer)
VPC(potash licence)
North AtlanticPotash Inc.
(permits for explorationof potash deposits)
Mining Logistics
Acron-Trans(railway operator)
AS DBT(2 port terminal
facilities)
Andrex(port terminal
facility)
Distribution & Marketing
Agronova(Russian
distribution network)
Acron Switzerland AG,Acron USA Inc.,
Acron France SAS,Acron Brasil Ltda,
Acron Argentina SRL (global traders)
Beijing Yong ShengFeng AMPC
(Chinese distribution network)
100%
60.1%
100% 100%
100%
100%
100%
100%
Portfolio investments
Grupa Azoty (Poland)(fertiliser producer)
19.8%
Note: Direct holding and through 100% owned subsidiary companiesData are indicated as percentage of the registered capital as of 31 March 2019
Balttrans
100%
ACRON SHAREHOLDING STRUCTURE
23.3%
62.3%
3.2%
10.9%0.3%
Acronagroservice
Redbrick Investments S.a.r.l.
Quasi-treasury shares
Others (in Russia)
GDR programmeFree Float
36
CORPORATE GOVERNANCE OVERVIEWBOARD OF DIRECTORS
• Seven members, including three INEDs
• The Board is responsible for determining the company’s strategy, development priorities, internal control and risk management system, protection of shareholders’ interests and observance of their rights.
• Directors’ and officers’ liability is insured by a pool of international insurers rated BBB-or higher.
BOARD COMMITTEES
• Audit Committee consists of three INEDs
• Nomination and Remuneration Committeeconsists of three INEDs
• Strategic Planning and CorporateGovernance Committee consists of threemembers
MANAGEMENT BOARD
• Six members, who are responsible for the key areas of Acron’s business which ensures efficient decision-making.
• The Board members have up to 40 years of chemical industry experience.
• Responsible for the implementation of the company’s strategy, operational and financial results as guided by the Board of Directors.
CORPORATE GOVERNANCE CODE
• Adopted in 2008
• Determines the company‘s corporate governance structure and sets out the system of key rules and principles of business management and responsibilities of the Company’s Managers and Directors.
CODE OF BUSINESS CONDUCT
• Adopted in 2011
• Outlines the company’s general standards of conduct consistent with the Company’s ethical values and principles as well as anticorruption policy.
DIVIDEND POLICY
• New dividend policy adopted in 2012 pursuant to which the company pays out a 30% minimum of IFRS net profit in dividends twice a year.
• A very attractive dividend yield for the investors.
Acron Group adheres to the best international corporate governance practices in strict compliance with law and international standards
37
CONTACTS
For more information, please contact our Investor Relations Department:
Mr. Ilya POPOV,Head of Investor RelationsTel.: +7 (495) 745 77 45 ext. 5252E-mail: [email protected]
Mr. Sergey SMIRNOV,Senior Analyst, Investor RelationsTel.: +7 (495) 745 77 45 ext. 5184E-mail: [email protected]
JSC Acronwww.acron.ruWorld Trade Centre,12, Krasnopresnenskaya Naberezhnaya,Moscow 123610, RussiaTel.: +7 (495) 745 77 45