capital markets day - phosagro · sulphur 14% other 18% 2012, exw, us$ 0 100 200 300 400 500 600...
TRANSCRIPT
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CAPITAL MARKETS DAY 14 March 2013
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Irina
Evstigneeva
Head of
Corporate
Finance and
Investor
Relations
Roman
Osipov
Director for
Business
Development
Andrey
Guryev
Deputy CEO,
Head of
Sales and
Logistics
Alexander
Sharabaiko
Chief
Financial
Officer
Boris
Levin
Head of
Strategy
Siroj Loikov
Human
Resources
Director
Alexei
Gribkov
CEO,
Balakovo
Mineral
Fertilizers
Roman
Yakorev
Deputy IT
Director for
ERP System
Development
Mikhail
Rybnikov
Chief
Operating
Officer
CEO,
Management
Company
PhosAgro
Vladimir
Davydenko
Deputy CEO,
Apatit
Alexei
Grigoryev
CEO,
PhosAgro -
Cherepovets
Presentation team
1
Number of years with PhosAgro assets Number of years in chemicals / fertiliser sector
Maxim Volkov
Chief Executive
Officer
10 years 10 years
29 years 29 years 15 year 15 years 15 years 15 years
10 years 10 years 1 year 8 years 15 years 23 years 9 years 9 years 5 years 5 years
19 years 19 years
2 years 2 years
5 years 6 years
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1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
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Slide Number
Table of contents
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100% self-sufficient in phosphate rock
72%-90% self-sufficient in ammonia(3)
More than 40% self-sufficiency in electricity
Self-sufficiency in key feedstocks
provides for low costs
Source: FERTECON, IFA, companies data, PhosAgro
Note: (1) Excluding Chinese producers
(2) PhosAgro, IMC as of June 2011
(3) Self –sufficiency depends on the composition of the products produced by PhosAgro
3
World class
integrated phosphate producer
#1 global producer of high-grade phosphate rock
#2 global DAP/MAP producer(1)
Leader in Russian fertiliser market growing twice
faster than the world consumption
Overall fertiliser capacity of 6.1 mln t
Large high quality
apatite-nepheline resources
2.1 bln t of ore resources(2) (over 75 years of
production)
Al2O3 resource of 283 mln t
DAP/MAP/NPK/ NPS/NP flexible production
lines
Net back driven sales model with a global
presence
Flexible production and sales
1 3
2 4
Unique world class integrated phosphate based producer
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2.4
1.4
0.8
1.8
0.2
1.8
0.8 1.1
PhosAgro Eurochem Acron Uralchem Minudobrenia(Rossosh)
Domestic DAP/MAP/NPScapacities
Domestic NPK capacities
27.8
12.1 7.7 7.6 7.3
3.5 3.5 2.5 1.1
OCP Mosaic Phosagro JPMC PotashCorp GecophamCF Industries GCT Ma'aden
Source: FERTECON, IFA, companies’ data 4
World class
integrated
phosphate
producer
Large
high quality
apatite-
nepheline
resources
Self-sufficiency
in key
feedstocks
provides for
low costs
Flexible
production and
sales
A leading global phosphate rock producer with over 2.1 bln t of apatite-nepheline ore resources (over 75 years of production)
#2 global DAP/MAP producer with 3.6 mln t capacity
9.7
3.6 3.5 2.9 2.3 2.2 2.0
Mosaic Phosagro OCP Ma'aden Eurochem CF Industries PotashCorp
2012, mln t, excluding Chinese producers
#1 producer of high-grade
phosphate rock (>35.7% P2O5)
2011, mln t, excluding Chinese producers
#1 phosphate-based fertilisers producer in the fast growing domestic market
2012, mln t
World class integrated phosphate producer
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Location(1)
Russia
Morocco
USA
Jordan
China
Tunisia
World Phosphate
Rock Reserves,
billion t
2.1 50 1.4 1.5 3.7 0.1
Ore type Igneous Sedimentary Sedimentary Sedimentary Sedimentary Sedimentary
Al2O3 content 13.0-14.0%
High Very low Very low Very low Very low
Low to
moderate
Minor Element
Ratio (MER)(2) 0.02-0.04 0.02-0.04 0.05-0.1 0.02-0.03 More than 0.05 0.05
Cadmium
content(3) Less than 0.1 15-40 9-38 5-6 2 40
Level of
radioactivity Very low Moderate
Moderate to
high
Low to
moderate
Low to
moderate Moderate
Hazardous
metals content Very low Moderate
Moderate to
high Low
Low to
moderate
Low to
moderate
Source: FERTECON, IMC, USGS 2011
(1) Primary global DAP/MAP producing regions
(2) Average Minor Element Ratio (MER) greater than 0.1 not sustainable for production of high quality DAP
(3) Average cadmium content in ppm
9
Control of world’s premium phosphate resource base
5
Positive effect on quality Negative effect on quality
World class
integrated
phosphate
producer
Large
high quality
apatite-
nepheline
resources
Self-sufficiency
in key
feedstocks
provides for
low costs
Flexible
production and
sales
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Self-sufficiency in key feedstocks
6
Source: Companies’ data, FERTECON, China Fert Market Weekly, PhosAgro
(1) As of February 2013
(2) Excluding resale, retail and advanced technologies
(3) Calendarised
(4) Raw material integration in the Global Phosphate Industry by phosphoric acid capacities, excluding China
World class
integrated
phosphate
producer
Large
high quality
apatite-
nepheline
resources
Self-sufficiency
in key
feedstocks
provides for
low costs
Flexible
production and
sales
With control over the major cost components… …PhosAgro enjoys extremely competitive cash
costs…(1)
…and displays exceptional profitability levels… …largely due to its highly integrated value chain(4)
Phosphate rock 55%
Ammonia 13%
Sulphur 14%
Other 18%
2012, ExW, US$
0
100
200
300
400
500
600
DAP FOB Tampa: $490/t
(Non
integrated)
(Non
integrated)
(Integrated)
FOB, US$ per tonne DAP
43%
32% 29%
24% 20%
PhosAgro ICL Agrium PotashCorp Mosaic
Average gross profit margin of phosphate segment for 2008-2011
(2) (3)
75%
25%
15%
Phosphate rock integration
Phosphate rock andammonia integration
Phosphaterock+ammonia+local
sulphur = Fully integrated
Integrated Non-integrated
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2.0
0.4
1.8
Flexible business model
Evolution of product mix
7
…driven by diversified and flexible exports structure
North America
South America
Europe Africa CIS(1)
Asia
Africa
North America
South America
Europe
CIS(1)
Asia
In volume terms
37% 55%
38% 32% 32%
34% 10%
20% 33% 24%
15% 17% 21%
17% 18%
9% 13% 8% 5% 13%
6% 4% 7% 6% 7% 2% 6% 7% 6%
2008 2009 2010 2011 2012
Source: PhosAgro, SMB
(1) Excluding Russia
World class
integrated
phosphate
producer
Large
high quality
apatite-
nepheline
resources
Self-sufficiency
in key
feedstocks
provides for
low costs
Flexible
production and
sales
Flexible production capabilities… …make for resilience profit margins…
mln t, 2012
- DAP/MAP - NPK - NPS - Total production
DAP/MAP only Product mix US$
+56%
+24% -13%
22%
27%
35% 34%
2009 2010 2011 9M20120%
10%
20%
30%
40%
50%
350
550
750
950
EBITDA Margin, % (rhs)
DAP, $/t, FOB, TAMPA (FMB, Fertecon)
Average DAP price growth
3.6 4.2
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Company history:
Organic growth and synergetic M&A
Source: PhosAgro
M&A
Construction of a new urea plant
with capacity of 0.5 mln t per year
Starting
production of
MCP Triple MCP
capacity from
80 kt to 240 kt
Infrastructure upgrade program
Sale of
Voskresensk
Mineral
Fertilizers
Acquisition of
Agro-
Cherepovets,
urea producer
2001 - 2004 2010 - 2011 2009 2008 2006 2005 - 2006 2012
Purchase of a further 20%
stake in Apatit
Merger of Ammophos and
Cherepovetsky-Azot
Metachem consolidation to
74.76%
Acquisition of
24% in
Metachem
Acquisition of a
61.8% stake in
Cherepovetsky
Azot
PhosAgro-
Cherepovets
Balakovo
Mineral
Fertilizers
Phosphate rock processing, % 1
2
3 Total volume of phosphate-based fertilisers, mln t
Total # of products Last 6 years more than US$ 2.5 bln
invested in modernisation
Organic
Total volume of nitrogen fertilisers, mln t
60
23
4.2
1.43
39
7
2.64
0.93 4
+21
+16
+59%
+54%
Increase of capacity
Phosphoric acid: 38%
Phosphate-based fertilisers: 58% (1.9 mln t to 3.0 mln t)
Electricity capacity: 179% (48 MW to 134 MW)
Increase of capacity
Phosphoric acid: 72%
Phosphate-based products: 92% (0.75 mln t to 1.44 mln t)
Electricity capacity: 104% (24 MW to 49 MW)
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48
151 183
151
2012
2011
+21% Electricity,
MW
2011
2001
+215%
Production capacity expansion
9
Capacity growth post IPO (2011-2012)
Source: PhosAgro
Capacity growth pre IPO (2001-2011)
Metachem capacities
End products
DAP/MAP,
mln t +41%
2011
2001
NPK,
mln t 0.8
1.7 +108%
2011
2001
1.8
1.7 +6%
2012
2011
0.98
0.48
+104% 2012
2011
Urea,
mln t 0.40
0.48 +20%
2011
2001
MCP,
mln t 80
240 +200%
2011
2002
1.94
1.86
4.83
4.61
+5% 2012
2011
Sulphuric
acid,
mln t 3.15
4.61 +46%
2011
2001
+4% 2012
2011
Phosphoric
acid,
mln t of P2O5 1.28
1.86
+45% 2011
2001
Feedstock / intermediary products
2.6
3.6
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0
1,000
2,000
3,000
4,000
5,000
6,000
2008 2009 2010 2011 2012
kt
MCP
NPS:
20:20:0:14
14:34:0:8
NPK/NPKS:
9:25:25:4
13:19:19
NPS:
20:20:0:14
16:20:0:14
14:34:0:8
15:36:0:8
NPK/NPKS:
9:25:25:4
10:26:26:4
15:15:15:8
10:20:20
13:13:21
16:16:8
13:19:19
12:32:12
6:20:30
12:32:16
PKS:
0:20:20:6
0:15:46:7
4X
NPK/NPKS/NPS/PKS grades from 4 up to 16
in 4 years
AN
Urea
DAP
MAP
NPK/NPKS/
NPS/PKS
NPS
16%
38%
AN
Urea
DAP
MAP
NPS NPK/NPKS/
NPS/PKS
APP
10 Downstream
Products in 2008
23 Downstream
Products in 2012
Overall
CAGR:9%
NPK/NPS
CAGR: 33%
Kt
MCP
STPP
Note: As of 31 December 2012
High-margin demand for NPK drives PhosAgro’s production
mix
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2.4
2.0
0.7
0.1
1.0
0.4
0.5
NPK
PKS
SOP
MAP
DAP
NPS
MCP
APP
STPP
UREA
AN
Marketable Ammonia
1.6
2.0
0.7
0.7
0.4
NPS
MCP
APP
UREA
AN
MAP
DAP
NPK
63%
37%
2012
Source: PhosAgro
Future (one – four years)
Total: 7.9 mln t
Phosphate rock
15
External
sales
Internal
consumption
New ammonia plant
Ammonia
kt
Overall growth 31%
55%
45%
1,096 1,244
Production Consumption
Total: 7.9 mln t
External
sales
Internal
consumption
New NPK/PKS production
Overall 5.4 mln t
Overall 7.1 mln t
1,150
760
1,455
Capacity Consumption
Total: 1,910 kt
New
pla
nt
11
Long term strategy for volume growth of fertilisers
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105 98 159
188 251
413
384 344
293 349
572
384 344
415
674
1,204
916 874
0
200
400
600
800
1,000
1,200
1,400
2009 2010 2011 9M2011 9M2012
EBITDA
EBITDA vs Capex¹
Source: PhosAgro
Notes: Applied average US$/RUB exchange rates: 31.77 (2009), 30.38 (2010), 29.39 (2011), 31.10 (9M2012), 31.10 for all periods after 9M2012
(1) Additions to Cash from Investment Activities (not Balance Sheet Capex)
Capex policy
12
Maintenance Capex Development Capex
US$ mln
The target is to keep capital expenditures ≤ 50% of EBITDA
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Source: PhosAgro
Note: (1) Cash flows used in operations before income tax and interest paid
Applied average US$/RUB exchange rates: 31.72 (2009), 30.37 (2010), 29.39 (2011), 31.10 (9M2012)
Dividend Policy Post-IPO dividend yield > 5%
Formal policy to pay between 20% to 40% of annual consolidated profit calculated in accordance with IFRS as
dividends
252 285
+33
Post IPO Dividends and Proforma Dividends with Apatit Consolidation
April-December 2011 9M 2012
- Net Income attributable to PhosAgro Shareholders - Other minorities - Dividend paid - Minorities of Apatit - Proforma dividends
+13% +5%
2011 April-December 9M 2012
Actual Proforma Actual Proforma
Dividends, US$ mln 228 239 252 285
Payout ratio, %
(Net profit attributable to PhosAgro
shareholders)
49 49 49 49
Payout ratio (% of Total Net profit) 44 46 41 46
Dividend payments
per GDR, US$ 0.61 0.67 0.67 0.79
Dividends
13
x49% x49%
493
23 30
514
67
36
228 239
+ 11
Dividends and dividend policy
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1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
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Evolution of corporate structure
Organisational structure at IPO Current structure Target post-consolidation structure
CJSC
PhosAgro AG
(Management
Company)
(100%)
OJSC
“PhosAgro”
(Holding
Company)
Apatite-
nepheline ore
mining and
beneficiation,
etc.
Production of
Phosphate-
Based
Fertilisers
and feed
phosphate
Production of
ammonia and
Nitrogen-
Based
Fertilisers
Other
operations
Balakovo
Mineral
Fertilizers LLC
(100%)
PC Agro-
Cherepovets
LLC
(100%)
OJSC Apatit
(57.6%)
OJSC
Ammophos
(93.8%)
JSC
Cherepovetsky
Azot
(61.9%)
PhosAgro –
Trans LLC
(transportation)
(100%)
PhosAgro-
Region
LLC (storage
and
distribution)
(99.99%)
OJSC NIUIF
(research
and
development)
(94.4%)
CJSC
PhosAgro AG
(Management
Company)
(100%)
OJSC
“PhosAgro”
(Holding
Company)
Apatite-
nepheline ore
mining and
beneficiation
etc.
Production of
Phosphate-
Based
Fertilisers
and feed
phosphate
Production of
ammonia and
Nitrogen-
Based
Fertilisers
Other
operations
OJSC Apatit
(95.95%)
+38.36%
Ammophos
assets
+0.3%
PhosAgro –
Trans LLC
(transportation)
(100%)
PhosAgro-
Region
LLC (storage
and
distribution)
(99.99%)
OJSC NIUIF
(research
and
development)
(94.4%)
Metachem LLC
(74.8%)
+74.8%
Mining and
Chemical
Engineering
LLC
(100%)
Balakovo
Mineral
Fertilizers LLC
(100%)
PC Agro-
Cherepovets
LLC
(100%)
OJSC PhosAgro - Cherepovets
(87.6%)
CJSC
PhosAgro AG
(Management
Company)
(100%)
OJSC
“PhosAgro”
(Holding
Company)
Apatite-
nepheline ore
mining and
beneficiation
etc.
Production of
Phosphate-
Based
Fertilisers
and feed
phosphate
Production of
ammonia and
Nitrogen-
Based
Fertilisers
Other
operations
OJSC Apatit
(100%)
+4.05%
Ammophos
assets
Cherepovetsky
Azot assets
PhosAgro –
Trans LLC
(transportation)
(100%)
PhosAgro-
Region
LLC (storage
and
distribution)
(99.99%)
OJSC NIUIF
(research
and
development)
(94.4%)
Metachem LLC
(100%)
+25.2%
Mining and
Chemical
Engineering
LLC
(100%)
Balakovo
Mineral
Fertilizers LLC
(100%)
PC Agro-
Cherepovets
LLC
(100%)
OJSC PhosAgro - Cherepovets
(100%)
+12.4%
Source: PhosAgro, MergerMarket
Legal entities with changes in shareholder structure
Cherepovetsky
Azot assets
+1.4%
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Apatit buyout
Sber CIB
1) The structure of the buyout
2) Price in $ per share and $ mln
3) Value accretion
Purchase of Nordic Rus
Holding (step 1)
Decision to
launch the
squeeze-out
Mandatory
buy-out
Purchase of Nordic Rus
Holding (step 2)
Source: PhosAgro
Note: Transaction values translated into US$ using an exchange rate as of date of payment
(1) Affiliated company 49%-owned by PhosAgro
Total amount of investments in buy-out of Apatit shares to date – US$585 mln
Privatisation
auction
Sep-Oct 12: acquisition
of a 20%-stake at
privatisation auction for
US$357 mln
Resulting stake: 77.57%
Nov 12 - Feb 13: buy-out of
11% shares via mandatory
offer for US$196 mln
Resulting stake: 95.95%
Oct 12: acquisition of
a 24%-stake in
Nordic Rus Holding
for US$32 mln
Feb 13:
Management
Board decides
to launch
compulsory
buy-out
Nov 11: acquisition of
51% stake in Nordic Rus
Holding, owner of 7.73%
shares in Apatit, by
PhosInt Ltd (1)
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1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
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The biggest portion of the world’s growing 7 bln population(1)…
… translates into the largest share of phosphate consumption
Source: PhosAgro, UN statistics division
Note: (1) World Population was of 6,974 mln people in 2011
China 29%
India 19% USA
10%
Brazil 9%
Others 33%
Breakdown of World population by countries
Breakdown of global phosphate fertiliser consumption by countries
• Global phosphate fertiliser consumption is 44.1
mln t of P2O5 per annum
• China consumes about 25 mln t of DAP
equivalent products
China 19%
India 17%
Other Asia 24%
Africa 15%
Latin America 9%
Europe 11%
North America 5%
Limited arable land stimulates fertiliser consumption
0.25
0.25
0.22
0.14
0.10
World
LatinAmerica
Europe
India
China
ha p
er
capita
18
China is the major consumer of phosphate fertilisers
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0
20
40
60
80
100
120
2008/09 2009/10 2010/11 2011/12 2012/13 2022/23 F
Food Imports are growing in China
Corn Imports
Soybean Imports
CAGR+13%
0
5
10
15
20
25
2008/09 2009/10 2010/11 2011/12 2012/13 2022/23 F
CAGR +10%
CAGR +10%
CAGR +5%
Pork Imports
0
400
800
1200
1600
2008/09 2009/10 2010/11 2011/12 2012/13 2022/23 F
CAGR +2%
CAGR +5%
China’s Economy keeps growing
Source: PhosAgro, FAO, United Nations, IFA, World Bank, US$A
mln
t
mln
t
k t
0
2,000
4,000
6,000
8,000
10,000
12,000
0
2
4
6
8
10
12
14
16
2002 2004 2006 2008 2010 2012 2014 2016
GDP per capita in China, USD, current prices (rhs)
GDP growth in China, y-o-y, % (lhs)
World GDP Growth, y-o-y, % (lhs)
US
$
%
CAGR +15%
19
Growing food consumption in China
drives demand for phosphates
GDP per capita in China, US$, current prices (rhs)
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160
53
0
79
170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
Source: IFA, CFMW, China National Information Center (CNCIC)
0
2,000
4,000
6,000
8,000
10,000
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
NP/TSP
DAP/MAP
Chinese phosphate rock exports Chinese exports of DAP / MAP / NP / TSP Commissioning of new H3PO4
capacities
kt kt kt
From January 2012 the
Chinese government
imposed an export duty of
82% on NP/TSP during peak
seasons (Jan-May, Oct-Dec)
0
1,000
2,000
3,000
4,000
5,000
2000 2002 2004 2006 2008 20102011
In the second half of 2011, phosphate rock prices increased several times, with
an overall price hike of US$ 11-13/t. In 2012 the price increased by US$ 8-10/t.
The price of the phosphate rock (P2O5>30%) reached US$ 126/t(1)
Note: (1) Applied exchange rate US$/CNY: 6.35
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000-2003
2004-2007
2008-2011
2012F-2015F
-42%
20
In total more than 230
Chinese phosphate
fertiliser producers with
average unit capacity
less than 100 kt P2O5 per
year
Development of Chinese phosphate exports
4
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170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
India is the major purchaser of DAP/MAP… … and importer of feedstock for phosphates production
Global Phosphoric Acid Imports of 4.5 mln t P2O5
2.1
Others
Africa
North America
Latin America
Middle East
Other Asia
Europe
India
Global Phosphate Rock Import of 31.1 mln t
7.5
Others
Africa
Oceania
Middle East
FSU
Latin America
North America
Other Asia
Europe
India
mln
t P
2O
5
mln
t
Indian imports of
phosphoric acid equal
to 4.5 mln t of DAP
Indian imports of
phosphate rock equal
to 5 mln t of DAP
21
India 26%
Latin America 23%
East Asia 14%
Europe 12%
Other South Asia 6%
Oceania 5%
North America 5%
Africa 4%
Middle East 4%
FSU 1%
Source: IFA, FCC, PhosAgro
Note: (1) Average figures for 2005-2010
World DAP/MAP Imports : ~8.5 mln t of P2O5 per annum(1)
India depends on P2O5 imports
4
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225
225
103
103
103
0
100
200
300
400
500
600
700
800
Apr-10 Apr-11 Apr-12
Subsidy, $US/tImport Price, $US/t, CFRSubsidy and Retail Price, $US/t
Subsidy, US$/t Import price, US$/t, CFR Subsidy and Retail Price, US$/t
Subsidies and imports of phosphate fertilisers in India decrease Indian domestic price is twice above the current subsidy level
Unbalanced fertilisation
Source: PhosAgro, FAI, IFA, Fertecon
k t
mln
t
US
$
Rs, bln
0.38 0.43
0.47 0.45
0.39
0.0
0.1
0.2
0.3
0.4
0.5
0
2,000
4,000
6,000
8,000
2008 2009 2010 2011 2012EDAP ImportsP2O5/N ratioP2O5/N balanced fertilisation
0.5
Evolution of N: P2O5 :K2O ratio in India
N P2O5 K2O
Balanced ratio 4.0 2.0 1.0
2010/11 4.3 2.0 1.0
2011/12 6.9 3.1 1.0
2012/13 7.7 3.0 1.0
N P2O5 K2O
2010/11 23.227 26.276 24.487
2011/12 27.153 32.338 26.756
2012/13 24.0 21.804 24.0
Change -11.6% -32.6% -10.3%
Nutrient Based Subsidy (NBS) Rates in India (Rs/kg nutrient)
0
200
400
600
800
1,000
1,200
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
2008 2009 2010 2011 2012E
Urea subsidies, bln Rs (rhs)Subsidies for phosphorus and potassium, bln Rs (rhs)DAP Import, kt (lhs)Urea Import, kt (lhs)
55%
45%
32%
68%
62%
CAGR +2.6%
22
Change in subsidy policy to
Nutrient based subsidy policy
P2O
5 /N
ratio
Uncertain policy for nutrient subsidies in India decrease
fertiliser imports and unbalance fertilization
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225
225
103
103
103
30
50
70
90
110
130
150
170
2008 2009 2010 2011 2012
Corn, mln tSoybean, mln t
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012
Brazil NPK Imports
k t
…skyrocketing consumption of phosphate fertilisers in Brazil
mln
t P
2O
5
Substantial growth in production of major phosphate consuming agri-products results in …
Breakdown of phosphate fertilisers consumption by crops
in Brazil
Growth in corn and soybeans production, yet more arable land
10% CAGR
CAGR: +43%
2000
2500
3000
3500
4000
4500
2008 2009 2010 2011 2012E
available
23
India 26%
Latin America 23% East
Asia 14%
Europe 12%
Other South Asia 6%
Oceania 5%
North America 5%
Africa 4%
Middle East 4% FSU 1%
Soybean 45%
Corn 18%
Other cereals
7%
Sugar crops 6%
Others 24%
Source: IFA, US$A, MDIC Brazil
mln
t
Brazil phosphate fertilisers market outpaces others
4
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53
0
79
170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
Source: IFA, Azotecon, PhosAgro
Note: (1) Average figures for 2005-2010
World NPK imports: ~2 mln t of P2O5 per annum(1)
Europe 36%
Other East Asia
19%
Lat. America
16%
China 8%
Africa 8%
FSU 5%
Others 4% South
Asia 4%
24
India 26%
Lat. America
23% East Asia 14%
Europe 12%
Other South Asia 6%
Oceania 5%
North America
5%
Africa 4%
Middle East 4%
FSU 1%
World DAP/MAP imports : ~8.5 mln t of P2O5 per annum(1)
World NPK production
mln t P2O5, excluding blending
- Actual - Estimate
4
5
6
7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E
NPK production in Russia
k t P2O5
- PhosAgro NPK production - NPK production in Russia
+31%
0
200
400
600
800
1000
2006 2007 2008 2009 2010 2011 2012
34% 24% 23% 26% 29% 20% 39%
PhosAgro’s flexible model meets global demand for NPK
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Brazil
China
France
India Pakistan
Russia
USA
UK Germany
0
20
40
60
80
0 50 100 150 200 250 300
Ce
rea
ls Y
ield
, 100
kg
/Ha
Fertilizer use for cereals (kg/Ha)
0
1
2
3
4
5
6
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: IFA, World Bank, Azotecon, PhosAgro
Note: (1) First full year of PhosAgro operations
(2) Current railway tariff for transportation of one tonne of fertilisers to Krasnodar / Stavropol regions
#1 phosphate fertiliser supplier for domestic market
25
PhosAgro 54%
Acron 22%
Uralchem 10%
Eurochem 6%
Others 8%
Fertiliser effects on yields
Ramp up of new NPK plant will cover domestic demand Fertiliser consumption in Russia
Potential supply of
NPK from Balakovo will
decrease logistics
costs
Post-Soviet
collapse
New
economy
Balakovo Mineral
Fertilizers (BMF)
PhosAgro Cherepovets
Agro-Cherepovets
Apatit
Novorossiysk
Baltic ports
St. Petersburg
Murmansk
Metachem
In 2012 domestic
NPK sales were
499 kt
39 US$/tonne(2)
27 US$/tonne(2)
In 2012 PhosAgro
domestic sales were
726 kt
Top 15 regions of NPK
and MAP consumption
mln
t o
f nutr
ients
Phosphates Nitrogen Potash
PhosAgro - the main phosphate fertiliser supplier
for domestic market
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103
103
103
7,800
4,523
3,2772,614 1,563
1,714
Total sales Internalsales
Externalsales
Domestic(2012)
Domestic(2013E)
Export
Projection of PhosAgro rock production breakdown in 2013
26
Comments
Before 2013 Russian domestic phosphate rock
prices were inflated to PPI
Starting from 2013, the liberalisation of the
phosphate rock market takes effect
In accordance with the new rules, domestic prices
match export prices
However, in 2013 there will be a discount due
to a 30% contribution of inflated domestic
prices from the the previous year
Source: PhosAgro
Note: (1) Applied RUB/US$ exchange rate of 31.1, phosphate rock equaled to Apatit EXW less freight costs for transportation from Murmansk to Apatit
(2) projected domestic price calculated as average 2012 price (RUB 4,301) multiplied by 2012 PPI (105.1%)
2013, kt
Contribution of Moroccan Price, US$ 151
Morocco FOB price (Casablanca) as of 5 March 2013, US$ 163
Contribution of Domestic Price, US$(2) 44
Phosphate rock price recommended by Federal
Antimonopoly Service for 2013, US$ 195
70% x Phosphate rock Morocco FOB Price x 1.32
+
30% x Phosphate rock last year domestic price x PPI
35% x Phosphate rock Minimum Export Price
+
35% x Phosphate rock Morocco FOB Price x 1.32
+
30% x Phosphate rock last year domestic price x PPI
Contribution of minimum export price, US$ 82
Phosphate rock Minimum Export Price, US$ 233
Contribution of Moroccan price, US$ 75
Morocco FOB price (Casablanca) as of 5 March 2013, US$ 163
Contribution of Domestic Price, US$(2) 44
Phosphate rock price recommended by Federal
Antimonopoly Service for 2013, US$ 201
c.1,000 kt apply to
Uralchem regulated
contracts expiring in
Dec. 2013
Phosphate rock price under formulas recommended by Federal Antimonopoly Service
Phosphate rock: 30/70 formula calculations case study Phosphate rock: 35/35/30 formula calculations case study
750
Phosphate rock market liberalisation
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103
1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
3
15
18
28
36
46
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556 615
22% 24%
9M2011 9M2012
US
$ m
ln
Net Income Margin
415
674
1,204 22%
27% 35%
2009 2010 2011
US
$
mln
EBITDA Margin
274 395
765
14% 16%
22%
2009 2010 2011
US
$
mln
Net Income Margin
Revenue (9M 2011/2012) EBITDA (9M 2011/2012)
Source: FMB, Fertecon
Note: Applied average US$/RUB exchange rates: 31.72 (2009), 30.37 (2010), 29.39 (2011), 28.77 (9M 2011), 31.10 (9M 2012)
Revenue (FY 2009-2011) EBITDA (FY 2009-2011)
Net Income (9M 2011/2012)
Net Income (FY 2009-2011)
28
1,430 1,948
2,775 376
457
493
12
20
26
98
108
127
1,916
2,533
3,420
2009 2010 2011
US
$
mln
Chemical fertilisers Apatite concentrate
Nepheline concentrate Other
916 874
36% 34%
9M2011 9M2012U
S$ m
ln
EBITDA Margin
2,006 1,954
374 445
19 18 50 32 112 99
2,561 2,548
9M2011 9M2012
US
$ m
ln
Series5 OtherNepheline concentrate AmmoniumApatite concentrate
DAP FOB Tampa:
US$ 624/t
DAP FOB Tampa:
US$ 539/t
DAP FOB Tampa:
US$ 319/t
DAP FOB Tampa:
US$ 498/t
DAP FOB Tampa:
US$ 620/t
Key financial highlights
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40% 43%
40% 36% 36%
21% 18%
19% 20% 19%
4% 8% 7% 8% 10% 9% 9% 7% 5% 9% 10%
10% 6% 7% 8% 7% 7% 9% 9% 7% 8% 6%
10% 10% 6% 6% 5%
2009 2010 2011 9M2011 9M2012
Co
GS
(%
of t
ota
l)
Other items
Depreciation andamortisation
Gas
Electricity
Sulphur and sulphuricacid
Fuel
Potash
Salaries and socialcontributions
Materials and services
Cost of goods sold and sales volumes DAP production cash cost breakdown
ExW, US$, 2012
Source: PhosAgro, Russian Federal State Statistics Service
Note: Excluding change in stock of WIP and finished goods. Applied average US$/RUB exchange rates: 31.72 (2009), 30.37 (2010), 29.39 (2011), 28.77 (9M2011), 31.10 (9M2012)
(1) Average for 9M 2012
2009 2010 2011 9M2011 9M2012
Fertilisers sales, kt 4,557 4,692 4,951 3,711 4,018
YoY change, % 3.0% 5.5% 8.3%
Rock sales, kt 2,807 3,712 3,153 2,351 2,534
YoY change, % 32.2% (15.1%) 7.8%
CoGS, US$ mln 1,222 1,592 1,937 1,422 1,432
YoY change, % 30.3% 21.7% 0.7%
PPI 13.9% 16.7% 12.0% 9.8% 9.4%
Exchange rate, US$/RUB 31.72 30.37 29.39 28.77 31.10
Appreciation/(depreciation) of RUB, % 4.3% 3.2% (8.1%)
Phosphate rock 55%
Ammonia 13%
Sulphur 14%
Other 18%
29
PhosAgro Europe USA Morocco
Sulphur, US$ 80 - 175 194
Natural gas,
US$/mmbtu 3.5 9.0 3.7 -
Potash, US$ 271 473 475 -
Ammonia, US$ - 582 575 567
External feedstock price advantage (1)
Cost of goods sold
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10,544
9,566 8,973
42.3 49.6
55.2
0.0
20.0
40.0
60.0
8,000
9,000
10,000
11,000
2011 2012 2013E
Average headcount (lhs)
Efficiency of labour, kt of fertilisers and feed phosphates per capita per month (rhs)
30
Evolution of labour productivity
Upstream operations (Apatit)
Downstream operations (Cherepovets production site, Balakovo)
Source: PhosAgro, Russian Federal State Statistics Service
Note: Applied average US$/RUB exchange rates: 28.77 (9M2011), 31.10 (9M2012)
(1) Incl. salaries and social contributions
• Labour efficiency increased due to headcount
reduction combined with simultaneous increase in
fertiliser production
• Since IPO the average number of employees
at Apatit, BMF and the Cherepovets
production site (primary production sites)
decreased from 23,780 in 2011 to 22,293 in
2012
• At the same time, total production of fertilisers
increased by 8.6% in 2012 on y-o-y basis
• Personnel management process comprises the
following elements:
• Outsourcing non-core services, and
• Re-engineering of business processes
• Scope of responsibility expansion
• Consolidation of service department functions
on the Group wide level
Personnel management – controlling costs
• The average salaries has grown at a rate that
is competitive with regional labour markets
• Successful control over the salary growth
and social contributions
Personnel management provides control over efficiency
k t p
er
ca
pita
k t p
er
ca
pita
Num
be
r o
f e
mp
loye
es
Num
be
r o
f e
mp
loye
es
11,637
11,348 11,201 62.4
65.8 66.8
60.0
62.0
64.0
66.0
68.0
10,800
11,000
11,200
11,400
11,600
11,800
2011 2012 2013E
Average headcount (lhs)Efficiency of labour, kt of phosphate rock per capita per month (rhs)
Productivity of labour, kt of fertilisers and feed phosphates per capita per month (rhs)
Productivity of labour, kt of phosphate rock per capita per month (rhs)
286
269
9M2011 9M2012
Salary expenses in COGS, US$ mln(1)
CPI:+6.6%
-6.2%
+5%
+2%
+17% +11%
Personnel management – controlling expenses and
increasing labour efficiency
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103
Total Debt / EBITDA and Net Debt (1) / EBITDA
31 Note: Applied average US$/RUB exchange rates: 30.37 (2010), 29.39 (2011), 28.8 (9M2011), 31.1 (9M2012)
(1) Net debt is calculated as total loans and borrowings minus cash and cash equivalents
(2) As of 30 September 2012. Includes secured bank loans, unsecured bank loans, letters of credit and finance lease liabilities
0.3x
0.4x
0.9x 1.0x
(0.1x)
0.2x
0.4x
0.3x
(0.5x)
0.0x
0.5x
1.0x
2009 2010 2011 9M2012
Total Debt / EBITDA Net Debt / EBITDA
Types of debt instruments (2)
USD denominated
94%
RUB denominated
3%
EUR-denominated
3%
Unsecured loans
88%
Finance lease liabilities
7%
Secured letters of credit
5%
Source: PhosAgro
Net Debt
Actual Net Debt as of 30 September 2012 (US$ in millions)
Total Debt, incl.: 1,156
Short-term debt 697
Long-term debt 459
Cash and cash equivalents (815)
Net Debt 341
Comments
As of 30 September 2012 Net debt / annualised
EBITDA was at very comfortable level of 0.3x
PhosAgro is well positioned to access debt
financing for planned acquisitions of additional
stakes in its production subsidiaries while
maintaining strong balance sheet
Almost all outstanding debt has floating interest
rates tied to LIBOR/EURIBOR except for Eurobond
Solid balance sheet
US$
denominated
94%
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Format RegS/144A
Volume US$ 500 mln
Maturity 5 years
Placement date 13.02.2013
Coupon 4.204%
Spread to UST/MS 335.8 bps / 320 bps
Total demand US$ 2.6 bln
Oversubscription 5.2х
32
High credit rating:
Successful recent Eurobond placement
Key Eurobond highlights
Key terms of Eurobond
In February PhosAgro’s placed its debut Eurobond issue of
US$ 500 million for 5 years
As a result of efficient marketing campaign final coupon rate
was fixed at the lowest end of the range - MS + 320 bps
Assigned ratings overview
An investment-grade long-term Issuer Rating of ‘Baa3’
with a Stable outlook by Moody’s Investor Service
A long-term corporate credit rating of ‘BB+’ with a positive
outlook by Standard & Poor's
A long-term foreign currency Issuer Default Rating of ‘BB+’
with a Stable outlook by Fitch Ratings
"The assigned Baa3 long-term issuer rating balances
PhosAgro's strong operational and financial performance,
including low leverage and high cash flow generation against
the volatility in the crop nutrient market, the cyclical nature of the
company's commodity business and the fact that there has been a
relatively limited track record of PhosAgro in the current setup and
as a publicly listed company."
Moody’s Investor Service, 30 January 2013
• "We believe Russia-based phosphate fertilizers and rock
producer PhosAgro benefits from large, high quality, low
cost phosphate rock reserves and supportive long-term
demand fundamentals
• The group has demonstrated a conservative financial policy
in the past several years, with low net and gross debt to
EBITDA, which we expect will continue
• We are assigning our 'BB+' long-term and 'ruAA+' Russia
national scale ratings to PhosAgro
• The positive outlook reflects the potential for a one-notch
upgrade if the company completes its secondary public
offering and diversifies funding sources in line with its plan,
while sustainably maintaining very strong credit metrics under
our base-case scenario."
Standard & Poor's, 21 February 2013
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ERP timeline
1
2006 2007 2009 2012 2008 2011 2010 2013
Implementation project (JSC
Apatit)
1st rollout project (JSC
Ammophos, JSC Cherepovetskiy
Azot)
Business Intelligence
project. Dashboards
for plants managers
2nd rollout project
(Agro-Cherepovets,
BMU)
Business
Intelligence project
for top managers.
3d rollout
(Metachem)
Continuous Improvement
Development Plan:
•Include additional
companies into ERP
instance
•Improve solutions
for mobile devices
•Automate KPIs
calculation
• Upgrade software
version to R12
33
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ERP System in PhosAgro
2
Planning and budgeting
Inventory Account Payable
Accounts
Receivables
Cash Flow
Maintenance
Manufacturing
Fixed Assets Projects
Cost management General Ledger
Report System Business Intelligence
Manufacturing Executive System HRMS
34
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1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
3
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PHOSPHATE
ORE MINE
BENEFICIATION
PLANT
SULPHUR SULPHURIC
ACID PLANT
GAS
POTASH
PHOSPHORIC
ACID PLANT
AMMONIA
PLANT
NPK
1.8 mln t
End products
Ou
tbo
un
d
Lo
gis
tic
s
DAP / MAP / NPS
2.4 mln t
36 Source: PhosAgro
(1) Expected volume of phosphate rock sales to third parties in 2013 Part of PhosAgro vertical operations
Integrated production model Production footprint
Moscow
Balakovo Mineral Fertilizers (BMF)
PhosAgro Cherepovets
Agro-Cherepovets
Apatit
Novorossiysk
Baltic ports
St. Petersburg
Murmansk
Distribution hubs Export ports
Metachem
Processing operations Mining operations
UREA
PLANT
Urea
0.98 mln t
Phosphare rock
3.3(1) mln t
Value chain overview
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2012 volume
mined, mln t
Target mining volumes after
shaft #2 reaches full capacity
in 2017
2012 cost
per tonne, $
Underground mines 15.6 18.0 11.3
Open-pits 10.8 10.0 23.0
Phosphate rock 7.9 79.4
37
Key highlights
Production flow
Resources / capacity by product
Key production assets footprint
Located in Murmansk region, Apatit produces
phosphate rock and nepheline concentrate
Largest standalone producer of high grade
phosphate rock globally(3)
Russia’s only nepheline concentrate producer
Ore extraction from the deposits is conducted via
four mines (Kirovsky, Rasvumchorr, Central and
Eastern) with a combined capacity of 27 mln t per
year
Resources(1)
Apatite-nepheline ore: 2,074 mln t
Al2O3: 283 mln t
REO(2): 7.5 mln t
Capacity by product
Phosphate rock: 7.8 mln t
Nepheline: 1.7 mln t
Source: PhosAgro (capacity as of December 31, 2011), FERTECON, European Commission
Note: Applied average exchange rate US$/RUB: 31.09 (2012)
Kirovsk
Apatity ANBP – 3
ANBP – 2
Kirovsky Mine
Rasvumchorrsky
Mine
Central Mine
Vostochny
Mine
Mining
Beneficiation
Open-pit mining Underground mining
ANBP-3 ANBP-2
Phosphate Rock
Superior grade:
P2O5 content 40%
Standard grade:
P2O5 content 39%
Nepheline concentrate
Mining
Benefication
Mines Opex per tonne of ore
(1) Measured and indicated, PhosAgro, IMC, JORC report June 2011
(2) Rare earth oxides
(3) Defined as phosphate rock with P2O5 content over 35.7%
Apatit overview
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53
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79
170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
Mine Mineral resources, kt
Average P2O5
content, % Stripping ratio
Kirovsky
underground mine 969,327 14.43 -
Rasvumchorrsky
underground mine 295,203 13.85 -
Central
open-pit 118,193 14.17 2.73
Vostochny – Koashva
open-pit 630,901 16.79 3.92
Vostochny – Njorkpahk
open-pit 60,293 14.83 0.83
TOTAL 2,073,918 15.06
38
Source: IMC Group Consulting Ltd, Competent Persons Report of the Mining Assets of OAO PhosAgro
Note: The information relating to mineral resources as at 1 June 2011 is a JORC Equivalent Resources
Apatit mining assets
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103
103
103
58% 56% 56% 59% 62% 64% 65% 65% 64%
42%44% 44% 41% 38% 36% 35% 35%
36%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2009 2010 2011 2012 2013 2014 2015 2016 2017
mln t
Undeground mines Open-pits
39
Comments
Main shaft #2 Capex
Main shaft #2 at Kirovsky mine
Ore production dynamics
Both an open-pit and an underground mine
The ongoing modernisation and expansion of the Group’s
apatite-nepheline ore mines provides for commissioning of
Main shaft #2 in the second half of 2016, which will improve
efficiency by increasing the share of lower-cost
underground mining over open-pits
Expected post-completion extraction capacity will
increase from 12 mln t per year in 2012 to 14 mln t
per year in 2016
Source: PhosAgro
Note: Applied exchange rate US$/RUB for all periods after 9M2012: 31.10
Main shaft #2 at
full capacity
US$ mln
389
267
74
48
Total Capex Spent as ofJanuary 1, 2013
Budgeted for2013
Budgeted for2014 - 2016
Apatit development program
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53
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170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
Located in the city of Cherepovets, PhosAgro-Cherepovets
is the largest stand-alone phosphate-based fertiliser
producer in Europe, according to IFA
Capable of producing MAP, DAP, NPK and NPS on the
same four production lines, with switch time within two
working shifts
One of the largest standalone producers of urea, ammonia,
AN/AN-based fertilisers in Russia
In 2012 the Group built a gas-turbine power plant with
electricity generation capacity of 32 MW, which is expected
to further increase the Group’s energy self-sufficiency
40
Key highlights Capacity by product
Technical modernisation at PhosAgro-Cherepovets assets
Source: PhosAgro (capacity as of December 31, 2011), FERTECON, European Commission
(1) Since acquisition of Agro-Cherepovets in 2008
(2) Since acquisition of Cherepovetsky Azot in 2005
Total number of end products in 2012: 17
MAP/DAP/NPS: 3.0 mln t (incl. 1.8 mln t fully flexible for
NPK)
Ammonia: 1,100 kt (additional 760 kt to be launched by
2017 and 50 kt due to modernisation program)
Urea: 980 kt
AN/AN-based: 450 kt
APP: 140 kt
AIF3: 24 kt
RATIONALE
Efficiency
improvement
Growth of
production
volume
2.1
2.7
2001 2012
+29%
Sulphuric acid
mln t
0.8
1.1
2001 2012
+38%
Phosphoric acid
mln t of P2O5
0.8
1.8
2001 2012
NPK
mln t
+125%
1.0
1.1
2005 2012
Ammonia(2)
mln t
+10%
0.5
1.0
2008 2012
Urea(1)
mln t
+104%
48
134
2001 2012
Electricity
MW
+179%
Cherepovets production complex overview
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103
103 41 Source: PhosAgro, Fertecon, US Energy Administration, World Bank
Note: Applied average US$/RUB exchange rates is 31.10 for 2012 – 2016 period
The current 72%-90% level of self-sufficiency in ammonia will be significantly
improved after the launch of new ammonia plant with 760 kt capacity
Sensitivity analysis of the new ammonia plant construction with 760 kt capacity
Ammonia Capex breakdown Total Ammonia Capex breakdown(1)
Current price
Base case
Ammonia price in 2017, US$ per tonne 550 430
IRR 20% 13%
Payback period, years 11 14
785
209
576
Total Capex Budgeted for 2013 Budgeted for2014 - 2016
US$ mln
Ammonia production
facility construction
Infrastructure facilities
construction69% 31%
Cherepovets production complex development program
4
160
53
0
79
170
166
166
166
225
235
225
170
178
210
225
225
225
103
103
103
440
760
2001 2012
1.1
1.9
2001 2012
Total number of end products in 2012: 6
MAP/DAP/NPS: 1.2 mln t
NPS 16:20:14
NPS 20:20:14
NPS 14:34:8
Feed phosphate (MCP): 240 kt
42 42
Key highlights Capacity by product
Technical modernisation at BMF
Located in the city of Balakovo in the Saratov region, BMF is the leading European and the only Russian producer of feed phosphate MCP
Operates three sulphuric acid production lines, two phosphoric acid production lines and four phosphate-based fertiliser production lines that are capable of producing MAP, DAP or NPS
At the moment BMF is capable of switching production from MAP/DAP to 3 grades of NPS (switch time within two working shifts) in response to market demand
In 2011 produced enough energy to satisfy c.70% of its energy requirements
In the course of the modernisation program the electric capacity was doubled to 49 MW in 2010
Source: PhosAgro (capacity as of December 31, 2011), FERTECON, European Commission
Note: Applied average US$/RUB exchange rates is 31.10 for 2012 – 2017 period
RATIONALE
Efficiency improvement
Product line expansion
+72%
Sulphuric acid
mln t
+72%
mln t of P2O5
MAP/DAP/NPS
mln t
+50%
Electricity
MW
Phosphoric acid MCP
mln t +104%
80
240
2002 2012
0.8
1.2
2001 2012
+200%
24
49
2003 2012
Balakovo Mineral Fertilizers (BMF) overview
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103
103
Sensitivity analysis of the new NPK plant construction
Ramp up the new NPK plant will cover domestic demand New NPK production Capex
43
Source: PhosAgro
Note: Applied average exchange rate US$/RUB: 31.09 (2012)
(1) Current railway tariff for transportation of one tonne of fertilisers to Krasnodar / Stavropol regions
Balakovo Mineral
Fertilizers (BMF)
PhosAgro Cherepovets
Agro-Cherepovets
Apatit
Novorossiysk
Baltic ports
St. Petersburg
Murmansk
Metachem
191
9
182
Total Capex Budgeted for 2013 Budgeted for2014 - 2016
US$ mln
Fertilisers prices in 2015 compared to base case 115% 100%
Price of NPK 9:25:25, FCA Yulievka, US$/tonne 653 568
Price of NPK 15:15:15, FCA Yulievka, US$/tonne 473 411
IRR 22% 15%
Payback period, years 9 12
39 US$/tonne(1)
27 US$/tonne(1)
In 2012
domestic NPK
sales
amounted to
499 kt
Top 15 regions of NPK
and MAP consumption
New production capacity at BMF
760 847
2012 2016
Phosphoric acid
+11%
kt
1,250
1,700
2012 2016
DAP/MAP/NPK/NPS
+36%
BMF development program
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103
103 44
Key highlights
The Group’s capacity growth with consolidation of Metachem Close proximity to St. Petersburg sea port (c.100 km)
Metachem is a producer of STPP and SOP located in the town of Volhov in the Leningrad region
Unique SOP granulating technology in Russia
Close proximity to St. Petersburg sea port (c.100 km)
Modernization program is currently under consideration
In 2014, the Group plans to construct a PKS/NPKS production plant with an annual production capacity of 100 kt
4.61 4.82
1.86 1.94
Sulphuric acid Phosphoric acid
Before After
mln t mln t
+5%
Source: PhosAgro (capacity as of December 31, 2011), FERTECON, European Commission
Sulphuric acid: 215 kt
Phosphoric acid: 80 kt of P2O5
Sulphate of potash (SOP): 80 kt
Sodium tripolyphosphate (STPP): 130 kt
Capacity by product
+4%
Top 15 regions of NPK
and MAP consumption
Distribution hubs
Export ports
Processing operations
Mining operations
Balakovo Mineral Fertilizers (BMF)
PhosAgro Cherepovets
Agro-Cherepovets
Apatit
Novorossiysk
Baltic ports
St. Petersburg
Murmansk
Metachem
Metachem new PKS production Capex
107
3
Total Capex Budgeted for 2013 Budgeted for 2014
US$ mln
Sensitivity analysis of the new PK(S) plant construction
Average price for PK(S) for post plant
commissioning, FCA Volhov,
US$/tonne
358 346
IRR 51% 37%
Payback period, years 4 5
Metachem overview
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103
1. Global positioning and strategy
2. Corporate structure and consolidation of subsidiaries
3. Market overview
4. Financial update
5. Asset overview and investment program
6. Closing remarks
3
15
18
28
36
46
Slide Number
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7.6x
13.5x 12.7x 12.8x 13.4x10.5x
Mosaic Uralkali ICL Potash Corp Agrium
5.3x7.5x 9.4x 9.2x 9.3x
7.0x
Mosaic Uralkali ICL Potash Corp Agrium
11.4%
2.9%6.8%
4.7% 4.7% 4.9%
Mosaic Uralkali ICL Potash Corp Agrium
4.9%
1.7%
3.9%5.2%
2.6%1.7%
Mosaic Uralkali ICL Potash Corp Agrium
PhosAgro is significantly undervalued against its key peers
P/E
2013E
Source: Bloomberg 11 March 2013
(1) Calendarised
(1)
(1)
(1)
Phosphates Nitrogen Potash
EV
/EB
ITD
A
2013E
FC
F y
ield
2013E
46
PhosAgro’s shares are
strongly undervalued
on a trading multiples
basis: the Group’s
2013E P/E and 2013E
EV/EBITDA reflect a
43% and a 27%
discount to its most
relevant peer Mosaic
The Group offers one
of the highest dividend
yield among its peers
Div
iden
d y
ield
2013E