Company Presentation November 2017 DISCLAIMER The information - - PowerPoint PPT Presentation

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Company Presentation November 2017 DISCLAIMER The information - - PowerPoint PPT Presentation

Company Presentation November 2017 DISCLAIMER The information contained herein pertaining to SIBUR (the "Company") has been provided by the Company solely for use at this presentation. By attending this presentation, or by reading


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SLIDE 1

Company Presentation

November 2017

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SLIDE 2

DISCLAIMER

The information contained herein pertaining to SIBUR (the "Company") has been provided by the Company solely for use at this presentation. By attending this presentation, or by reading these presentation slides, you agree to be bound by the limitations set out below. This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of, or be relied on in connection with, any contract or investment decision relating thereto. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. The Company accepts no responsibility for any losses howsoever arising, directly or indirectly, from this presentation or its contents. The material contained in this presentation is presented solely for information purposes and is not to be construed as providing investment advice. As such, it has no regard to the specific investment objectives, financial situation or particular needs of any recipient. There may be material variances between estimated data set forth in this presentation and actual results, and between the data set forth in this presentation and corresponding data previously published by or on behalf of the Company. This presentation contains forward-looking statements, including (without limitation) statements containing the words "anticipates," "expects," "intends," "may," "plans," “forecasts,” "projects," "will," "would", "targets,“ “believes” and similar words. These statements are based on the current expectations and projections of the Company about future events and are subject to change without notice. All statements, other than statements of historical fact, contained herein are forward-looking

  • statements. Forward-looking statements are subject to inherent risks and uncertainties, such that future events and actual results may differ materially from those

set forth in, contemplated by or underlying such forward-looking statements. The Company may not actually achieve or realize its plans, intentions or expectations. There can be no assurance that the Company's actual results will not differ materially from the expectations set forth in such forward-looking statements. Factors that could cause actual results to differ from such expectations include, but are not limited to, the state of the global economy, the ability of the petrochemical sector to maintain levels of growth and development, risks related to petrochemical prices and regional political and security concerns. The above is not an exhaustive list

  • f the factors that could cause actual results to differ materially from the expectations set forth in such forward-looking statements. The Company and its Affiliates

are under no obligation to update the information, opinions or forward-looking statements in this presentation.

2

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SLIDE 3

SIBUR AT A GLANCE

 Unique integrated gas processing & petrochemicals

company

 One of the highest EBITDA margin in the industry

worldwide

 Diverse range of products, over 1,400 large customers

in approximately 70 countries

 Credit rating at sovereign level at Moody’s (Ba1), rated

BB+ by Fitch. No history of downgrades throughout the cycle

 World-scale investment project underway to triple

SIBUR polyolefin capacity

Who We Are

$ 7.0 bln

revenue

$ 2.5 bln

EBITDA

34.9%

EBITDA margin

1.8x

net leverage(1)

23

production sites in Russia

Ba1 Moody’s BB+ Fitch

3

Revenue by Segment

40 20 33 7

%

Feedstock & Energy Olefins & Polyolefins Plastics, Elastomers & Intermediates Unallocated(2) 58 29 7 5 1

Revenue by Geography

%

Russia Europe Asia CIS Other

All above figures represent H1 2017 LTM results. SIBUR’s reporting currency is Russian rouble. Figures in $ were translated at the following $/₽ rates: 57.99 and 63.85 for the semi-annual periods ended 30 June 2017 and 31 December 2016, respectively. (1) Net Debt /EBITDA as of 30 June 2017 in $ terms. (2) Unallocated revenue is primarily derived from sales of EPC-services.

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SLIDE 4

UNIQUE INTEGRATED GAS PROCESSING & PETROCHEMICALS COMPANY…

(1) Associated petroleum gas (APG) is a by-product of oil production. (2) Natural gas liquids (NGLs) include raw NGL, LPG (liquefied petroleum gas) and naphtha. Raw NGL is a by-product of gas production. (3) Includes LPG, naphtha and raw NGL. Composition may vary from year to year depending on market conditions and other limitations. (4) JV sales include PVC, caustic soda (RusVinyl) and PP (Poliom).

LOGISTICS CLIENTS SUPPLIERS 4

Feedstock & Energy Segment

  • il producers gas producers

APG(1) (21.9 bcmpa) NGLs(2) (4.0 mtpa)

gas processing gas fractionation 7.2 mtpa

PETROCHEMICALS Olefins & Polyolefins Segment Plastics, Elastomers & Intermediates Segment

1.1 mtpa 2.3 mtpa feedstock(3) LPG and naphtha (6.2 mtpa) natural gas (18.2 bcmpa) NGLs 5.9 mtpa 3.4 mtpa 0.7 mtpa(4)

Based on FY 2016 results

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SLIDE 5

1,426 904 Adj. EBITDA(1) External revenue 2,315 526 EBITDA External revenue 2,811 1,162 External revenue EBITDA

Feedstock & Energy Olefins & Polyolefins Plastics, Elastomers & Intermediates Strategy Financial results ($ mln) Revenue structure Key end- markets

…OPERATING THREE HIGHLY PROFITABLE AND DIVERSIFIED BUSINESS SEGMENTS

5

  • Utilities & fuels
  • Petrochemicals
  • FMCG, packaging
  • Construction
  • Chemicals
  • Chemicals
  • Automotive
  • Construction
  • Utilities & fuels
  • FMCG

Flat production Expansion (ZapSib, Tobolsk logistics hub) Development of tailored grades Selective opportunities targeting structural changes in domestic industries % 46 PP 25 PE 3

  • ther

BOPP 20

  • lefins

6 % 31 69 domestic export % 43 57 domestic export % 53 47 domestic export % 56 LPG 27 natural gas 16 naphtha

  • ther

1 % 15 33 plastics &

  • rganic synthesis

34 elastomers 17 MTBE & fuel additives

  • ther

intermediates &

  • ther chemicals

1

42.9%

EBITDA margin

34.5%

EBITDA margin

22.3%

EBITDA margin

All above figures represent H1 2017 LTM results. (1) Adjusted EBITDA, including share of the Group’s portion in joint ventures and associates EBITDA (darker shading).

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SLIDE 6

OUTLINE

Unique features creating attractive investment opportunity p.7 Contact details p.19 FAQ p.20 Financial profile p.31

6

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SLIDE 7

UNIQUE FEATURES CREATE ATTRACTIVE INVESTMENT OPPORTUNITY

COMPETITIVE ACCESS TO STRANDED FEEDSTOCK

  • Strategic location in Western Siberia ‒ home to the majority of

hydrocarbon feedstock reserves in Russia

  • Extensive infrastructure creating high barriers to entry
  • Long-term contracts with pricing formulas that result in high margins

ROBUST PROFITABILITY THROUGH THE CYCLES

  • Portfolio diversification across geographies and demand drivers
  • Cost base in oil-linked Russian currency and revenues mainly in hard

currencies serve as a natural hedge against energy cycles

  • Complementary energy and petchem businesses resist oil shocks
  • A leading EBITDA margin in petchem universe

UNIQUE GROWTH STRATEGY

  • Polyolefin production in Western Siberia ̶ efficient monetisation of

ample feedstock stranded in the region

  • ZapSib ̶ large-scale polyolefin capacity in Western Siberia to capture

best-in-class margins

  • Proven track record in execution of investment projects in Russia

LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET

  • Domestic petchem consumption lagging behind developed economies
  • Largest player in domestic petchem

1 2 3 4

7

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SLIDE 8

Source: Wood Mackenzie.

1

COMPETITIVE ACCESS TO STRANDED FEEDSTOCK

2 4

77%

65% WESTERN SIBERIA – SIBUR feedstock base

Volga-Urals region

16% 9%

Caspian sea region Eastern Siberia

10%

8%

Far East

7% 5%

% Region’s share in Russian APG production (2016) % Region’s share in Russian unstable gas condensate production (2016)

  • Tobolsk
  • Moscow

APG Unstable gas condensate

C1 C5 C4 C3 C2 C7+ C6 C1 C3 C2 by- product of oil production core products for

  • il & gas

companies

OIL FIELD GAS FIELD

by- product of gas production feedstock for SIBUR

STRATEGICALLY LOCATED IN WESTERN SIBERIA ‒ AT THE HEART OF HYDROCARBON FEEDSTOCK RESERVES IN RUSSIA

2%

Timan-Pechora region

1%

C4 C5 C6 C7+

8

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SLIDE 9

Purovsky GCP (NOVATEK) SIBUR Tobolsk production site SIBUR infrastructure Third-party infrastructure

(1) Including Yuzhno-Priobskiy GPP operated under JV. (2) Source: Wood Mackenzie. (3) Does not include financing of JV and petchem capacities construction.

 INTEGRATED INFRASTRUCTURE

SIBUR owns and operates the largest and most extensive infrastructure for processing and transportation of feedstock in Western Siberia

  • 8(1) out 10 gas processing plants (GPP) in

Western Siberia

  • Pipeline network of 2,708 km

 HIGH BARRIERS TO ENTRY

  • No third-party gas processing capacity additions in

the region in the last two decades

  • SIBUR has invested $4.2 bln(3) since 2009 in

expansion and upgrade of the gas processing and transportation infrastructure in the region, incl:

  • APG capacity increased 20% to 25.4 bcmpa
  • Fractionation capacity increased 2x to 8 mtpa

 ACCESS TO FEEDSTOCK(2)

SIBUR is the largest processor of oil&gas production by-products:

  • 57% of APG produced in Russia
  • 65% of raw NGL produced in Russia

SIBUR ASSET BASE IN WESTERN SIBERIA

INTEGRATED PLATFORM WITH UNIQUE LARGE-SCALE TRANSPORTATION AND FEEDSTOCK PROCESSING INFRASTRUCTURE

SIBUR newly constructed / upgraded assets

1

COMPETITIVE ACCESS TO STRANDED FEEDSTOCK 9

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SLIDE 10

Pricing drivers Contracts*

For suppliers: limited options for alternative APG utilisation and flaring fines Two types of contracts regulating purchase price indexation:

  • in line with changes in NGLs and natural gas prices
  • in line with indexation of natural gas prices only

Purchase price is driven by NGLs netbacks and feedstock fraction composition

APG NGLs

2 4 6 2014 2015 2016

SIBUR APG avg purchase price** Russian regulated natural gas Saudi Arabia ethane US natural gas US ethane

$/MMBtu 300 600 900 2014 2015 2016

SIBUR raw NGL avg purchase price** SIBUR avg. NGLs petchem feedstock cost*** NA LPG mix ARA LPG mix ARA naphtha NA naphtha

Source: Bloomberg, Argus. SIBUR APG purchase prices are converted at 0.028 rate to translate into MMBtu and at the following ₽/$ average exchange rates: 67.03, 60.96 and 38.42 for the years 2016, 2015 and 2014, respectively. * As of 30 September 2017, unless otherwise stated. ** SIBUR carries modest cost of separation of APG and raw NGL into components. *** Represents effective average intragroup price, at which NGLs are sold from F&E segment to petchem segments. These prices are determined based on netbacks.

$/tonne

Feedstock competitively priced vs

  • ther geographies

Source for ~60% of NGLs available to SIBUR

  • 92% of APG supplies for 2017 guaranteed under multi-

year contracts

  • WA maturity of supply contracts – 14.3 years
  • Key suppliers: Rosneft, Gazprom Neft, RussNeft, LUKOIL
  • 90% of NGLs supplies for 2017 guaranteed under multi-

year contracts

  • WA maturity of supply contracts – 16.1 years
  • Key suppliers: NOVATEK, Gazprom

LONG-TERM CONTRACTS WITH PRICING FORMULAS THAT SECURE SIBUR MARGINS

1

COMPETITIVE ACCESS TO STRANDED FEEDSTOCK 10 Source for ~40% of NGLs available to SIBUR

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SLIDE 11

LEADING PLAYER IN THE ATTRACTIVE DOMESTIC MARKET

Source: Nexant Limited, IISPR, Alliance Analytics, Market report. (1) Based on product ranking in SIBUR domestic revenue from petrochemicals sales. #5 – MTBE, #7 – ethylene, #9 – alcohols, #10 – ethylene oxide, #12 – benzene.

SIBUR’s Leading Position in Russia (2016)

PP #1

relevance for SIBUR(1)

LDPE #3 BOPP-films #4 Expandable polystyrene #6 MEG #8 BR #13 SBR #14 2

LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET

PET #2 SBS #11

11

        

5.4% 3.9% 3.3% 3.2% LLDPE HDPE PP LDPE

Russian Market Growth Fundamentals Kg per Capita Consumption of Polyolefins (2016)

Polypropylene Polyethylene

Russia Consumption Growth Outlook

CAGR, 2017-2025 8 16 18 19 Russia China Western Europe USA 13 18 30 40 Russia China Western Europe USA

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SLIDE 12

PORTFOLIO DIVERSIFICATION: WIDE RANGE OF DEMAND DRIVERS SUSTAINING RESILIENT PERFORMANCE

3

ROBUST PROFITABILITY THROUGH THE CYCLES 12 Feedstock & Energy Olefins & Polyolefins Plastics, Elastomers & Intermediates Key drivers

  • Commodity cycle,

global oil prices

  • Transportation costs

and export duties

  • Indexation of

regulated natural gas prices

  • Demand/supply in multiple end-

customer markets

  • Import substitution on domestic market
  • Demand/supply in multiple end-customer

markets

  • Elastomers driven by natural rubber

prices and crude C4 balances

36 56 7

Utilities and fuels Petrochemicals Traders Other

End- customers

% 58 10 12 9 11

FMCG, packaging Traders Construction Chemicals Other

% 22 19 14 13 13 12 7

Chemicals Automotive Fuels Construction FMCG Traders Other

%

All above figures represent data for H1 2017.

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SLIDE 13

$ 4.6 bln $ 6.1 bln



SIBUR Revenue and Costs: Exposure to Oil and FX

LPG & naphtha Natural gas Olefins & polyolefins

Plastics & Elastomers

MTBE



Revenue OpEx

Feedstock & materials



Transportation & logistics D&A

Staff

Energy

ILLUSTRATIVE

FY 2016

NATURAL HEDGE: COUNTERBALANCING CHANGES IN OIL AND FX SUSTAIN SIBUR MARGIN

3

ROBUST PROFITABILITY THROUGH THE CYCLES

Other Other

13

11% 11% 15% 12% 24% 27% 21% 6% 12% 21% 11% 29%

Correlation with oil Hard currency ($, €) ₽ Brent $/bbl ₽/$ Russian Rouble Appreciation vs. Weak Oil(1)

60% 80% 100% 120% 140%

(1) Source: Bloomberg.

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SLIDE 14

3

ROBUST PROFITABILITY THROUGH THE CYCLES 14 8 16 34 32 32 7 15 37 49 47 70 79 66 61 71

DOWNSTREAM INTEGRATION: FOUNDATION OF THE RESILIENT PERFORMANCE AND STABLE MARGINS

2014 2015 2016 H1 2017 LTM 2013 +32% +3% 136 140 149 +30% 103 Feedstock & Energy Plastics, Elastomers & Intermediates Unallocated Olefins & Polyolefins SIBUR EBITDA (₽ bln) EBITDA margin

EBITDA is translated in $ using the following ₽/$ average exchange rates: 60.91 for H1 2017 LTM, and 67.03, 60.96, 38.42 and 31.86 for the years 2016, 2015, 2014 and 2013, respectively. Source for average Brent price: Bloomberg. (1) Adjusted for estimated value of naphtha trading operations via Ust-Luga, ceased in 2015.

32%(1) 36% 34% 35% 29% 79 +7% 109 100 53 44 52 (47%) +16% (17%) (8%) 2.5 2.7 2.2 2.1 2.5 (17%) +18% (6%) +8% Brent price (avg $/bbl) SIBUR EBITDA ($ bln)

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SLIDE 15

2012 2013 2014 2015 2016 5% 10% 15% 20% 25% 30% 35%

Source: Bloomberg (1) Nizhnekamskneftekhim.

A LEADING STABLE EBITDA MARGIN

3

ROBUST PROFITABILITY THROUGH THE CYCLES 15

(1)

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SLIDE 16

(1) Illustrative. (2) per 1.35 tonne of LPG utilised for production of 1 tonne of polyolefins. (3) EBITDA is translated in $ using the following ₽/$ average exchange rates: 67.03, 60.96 and 38.42 and 31.86 for the years 2016, 2015, 2014 and 2013, respectively.

POLYOLEFIN PRODUCTION IN WESTERN SIBERIA ‒ EFFICIENT MONETISATION OF AMPLE FEEDSTOCK STRANDED IN THE REGION

4 UNIQUE GROWTH STRATEGY

LPG Market price Transport, duties LPG netback in Tobolsk

Rationale for Polyolefin Production(1) PP Production in Tobolsk ‒ Strategy Validation

Added value

Polyolefin production cost less by-products Polyolefin netback in Tobolsk Transport, duties Polyolefin market price LPG(2) POLYOLEFINS

152 395 516 592 2013 2014 2015 2016 208 429 605 730 2013 2014 2015 2016

+106% +20% 46% 39% O&P EBITDA margin Total SIBUR PP production SIBUR PP production in Tobolsk O&P EBITDA(3) ($ mln) 13% 21% 500 ktpa PP production was launched in Tobolsk in the end of 2013

Contribution to Production Volumes Contribution to Economics of O&P Segment

kt

16 +41%

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SLIDE 17

propane 55%

Project Description

ktpa

PE(1) 1,500 PP 500 propylene 525 ethane 10% n-butane 35%

ZAPSIB – SCALE-UP OF POLYOLEFIN PRODUCTION IN WESTERN SIBERIA

Strong position on global ethylene cost curve:

competitively priced stranded feedstock

Reducing exposure to energy price volatility

(1) PE includes HDPE and LLDPE. (2) Data as of 30 June 2017. Numbers and respective percentages calculated based on exchange rates as of 30 June 2017; ₽/$ at 58.94, ₽/€ at 67.31 . (3) Cash balances as of 30 June 2017. NWF stands for National Wealth Fund. RDIF stands for Russian Direct Investment Fund. ECA stands for Export Credit Agency.

4 UNIQUE GROWTH STRATEGY

ethylene 1,500 butadiene 94 ethylene cracker

Strong Position on the Ethylene Cost Curve (2021)

  • Design capacity:
  • Ethylene cracker: 1,500 ktpa of ethylene and

525 ktpa of propylene

  • Polyethylene (PE):1,500 ktpa
  • Polypropylene (PP): 500 ktpa
  • Location: close proximity to the existing SIBUR

production site in Tobolsk

  • Mechanical completion: end of 2019
  • Leading global players involved:
  • Licensors: Linde, INEOS, Lyondellbasell
  • EPC contractors: Linde, Technip, ThyssenKrupp

Production Scheme Project CapEx for H2 2017-2020(2) and Current Status 65%

  • verall execution

progress as of 31 Oct’17 ₽231 bln (excl. VAT) invested as of 30 Jun’17 since the project launch 64% 8% 28% $5.2 bln as of 30 Jun’17 ₽ 41% $ 33% € 26%

Funding Sources Residual Project Budget

SIBUR

  • wn funds

NWF and RDIF(3) ECA(3)

Middle East ZapSib USA Russia Western Europe China

17

Source: Nexant 500 1,000 1,500 30 60 90 120 150 180 Cash Cost ($/tonne) Ethylene cumulative capacity (mtpa) High Case 70 $/bbl Medium Case 50 $/bbl Low Case 30 $/bbl

ZapSib

Oil Price Scenarios Source: Nexant

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SLIDE 18

COMPETITIVE ACCESS TO STRANDED FEEDSTOCK ROBUST PROFITABILITY THROUGH THE CYCLES UNIQUE GROWTH STRATEGY LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET

   

18

UNIQUE FEATURES CREATE ATTRACTIVE INVESTMENT OPPORTUNITY

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SLIDE 19

INVESTOR RELATIONS CONTACTS

SIBUR_IR@sibur.ru +7 (495) 777-55-00 (*39-47) www.investors.sibur.com

19

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SLIDE 20

Frequently Asked Questions

SIBUR business 1. How do APG and raw NGL processing economics compare? 2. What is the correlation of petchem prices with oil? 3. What is the history of SIBUR’s credit rating? 4. What are SUBUR achievements in EHS(1)? ZapSib 5. How is progress evaluated for investment projects? 6. What is the track record of SIBUR team in investment projects execution? 7. How will SIBUR feedstock allocation change after the launch of the project? 8. How competitive is ZapSib at delivery to target markets? Strategy 9. What is the strategy post 2020?

  • 10. What is the growth potential in polyolefins and trends in key geographies?

Corporate

  • 11. What is SIBUR shareholder structure and Board of Directors? What is SIBUR dividend policy?

20

(1) Environmental, Health & Safety.

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SLIDE 21
  • 1. How do APG and raw NGL processing economics compare?

Illustrative Margin of APG Processing Illustrative Margin of NGL Processing

Margins high but volatile (relatively to NGLs feedstock processing) SIBUR has significantly increased share of NGLs in feedstock securing higher earning sustainability thanks to stable NGLs economics Margin substantially lower vs. APG processing but is highly robust and stable as purchase and selling prices are strongly correlated APG purchase price Processed NGL selling price NGL purchase price Processed NGL selling price Natural gas selling price

21

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SLIDE 22
  • 2. What is the correlation of petchem prices with oil?

Source: Argus, Platts, Bloomberg, ICIS, Malaysian Rubber Board, Chemease, Federal Antimonopoly Service of Russian Federation

22

In $, Rebased to 100 In $, Rebased to 100 In $, Rebased to 100 In $, Rebased to 100 0% 50% 100% 150% 200% 250% 0% 20% 40% 60% 80% 100% 120% 140% 160% Natural Rubber Butadiene Contract, FD NWE Styrene Brent ₽/$ 0% 50% 100% 150% 200% 250% 20% 40% 60% 80% 100% Polystyrene MEG MTBE PET Brent ₽/$ 0% 50% 100% 150% 200% 250% 0% 20% 40% 60% 80% 100% 120% 140% LDPE PP raffia China Main Port PP MRC CPT Moscow Brent ₽/$ 0% 50% 100% 150% 200% 250% 0% 20% 40% 60% 80% 100% Brent Naphtha LPG CIF ARA (large) Natural gas LPG DAF Brest ₽/$

Feedstock & Energy Plastics, Elastomers & Intermediates (1/2) Plastics, Elastomers & Intermediates (2/2) Olefins & Polyolefins

₽/$ on secondary axis ₽/$ on secondary axis ₽/$ on secondary axis ₽/$ on secondary axis

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SLIDE 23

SIBUR’S CREDIT RATINGS

Agency Initial rating Actual current rating ”Intrinsic” credit rating assessment Latest review Moody’s CFR Ba2 (2007) Ba1, Stable Baa2 (as of current rating grid) Baa1 (as of forward looking grid) February 2017 Fitch Lt IDR BB (2007) BB+, Negative BBB (credit rating excluding systemic risks) March 2017 SIBUR - Moody's SIBUR - Fitch RUSSIA - Moody's RUSSIA - Fitch 1 2 3 4 5 6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 BBB/Baa2 BBB+/Baa1 BB-/Ba3 BBB+/Baa1 BB/Ba2 BB+/Ba1 BBB-/Baa3

Sources: Moody’s Credit Opinion dated 10 April 2017; Fitch Rating Report dated 31 March 2017.

“SIBUR's ratings are constrained by higher-than-average systemic risks associated with the Russian business and jurisdictional environment. Fitch assesses SIBUR's credit profile excluding these risks as in the 'BBB' category” “Sibur’s Ba1 corporate family rating is solidly positioned in its rating category and can potentially be constrained by Russia’s Ba1 sovereign rating with a stable outlook and the country's Ba1 foreign-currency bond ceiling”

No negative rating action despite sustained period of turbulence and downgrades of the sovereign in 2013-2015

Sources: Moody’s, Fitch.

  • 3. What is the history of SIBUR’s credit rating?

23

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SLIDE 24
  • 4. What are SIBUR achievements in EHS(1)?

Air Pollutant Emissions

‘000 tonnes 63 61 59 56 59 58 2011 2012 2013 2014 2015 2016

Water Discharge Waste Generation

Mcm(3) ‘000 tonnes 159 124 132 74 74 77 2011 2012 2013 2014 2015 2016 69 66 64 54 56 55 2011 2012 2013 2014 2015 2016

LTIF(2)

0.81 0.81 0.76 0.73 0.63 0.3 2011 2012 2013 2014 2015 2016

(1) Environmental, Health & Safety. (2) Lost Time Injury Frequency. (3) Million cubic meters.

24

SIBUR prevented about 7 million tonnes of harmful emissions and 71 million tonnes of CO2 equivalent by processing 22.4 bcm of APG in 2016

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SLIDE 25

DETAIL ENGINEERING: drafting of project documentation 2 PROCUREMENT: manufacturing of equipment and its delivery to construction site 3

𝑇𝑢𝑏𝑕𝑓 𝑄𝑠𝑝𝑕𝑠𝑓𝑡𝑡 = 𝛾𝑘 × 𝑁

𝑘 𝑘 𝛾𝑘 ‒ weight of the item 𝑘 in the overall cost of items procured for the project 𝑁

𝑘 ‒ % completion of the item 𝑘 (measured by the contractor based on the

discrete milestone chain applicable for the item 𝑘)

CONSTRUCTION: assembling and installation of equipment, construction of production site facilities 4

𝑇𝑢𝑏𝑕𝑓 𝑄𝑠𝑝𝑕𝑠𝑓𝑡𝑡 = 𝛿𝑙 × 𝑄𝑙

𝑙 𝛿𝑙 ‒ weight of the item 𝑙 in the overall volume of construction man-hours 𝑄

𝑙 ‒ % completion of the item 𝑙 (measured by the owner based on the actual

work completed)

𝑇𝑢𝑏𝑕𝑓 𝑄𝑠𝑝𝑕𝑠𝑓𝑡𝑡 = 𝛽𝑗 × 𝑁𝑗

𝑗 𝛽𝑗 ‒ weight of the document 𝑗 in the project documentation pack (measured by the contractor based on complexity and labor content) 𝑁𝑗 ‒ % completion of the document 𝑗 (measured by the contractor based on the discrete milestone chain applicable for the document 𝑗)

FEED: front-end engineering and design 1 Project Evaluation Project Execution

  • 5. How is progress evaluated for investment projects?

25

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SLIDE 26

Budget Execution Completion Year

Terms Committed in 2013 in Eurobond Prospectus vs Actuals

  • 6. What is the track record of SIBUR team in investment projects execution?
  • 29.7%

2.6%

  • 8.1%
  • 7.6%
  • 27.9%

3.3%

  • 10.9%

1.5% 6.6% 11.6%

  • 19.7%

Estimated expenditures (₽ bln) Purovsk–Tobolsk raw NGL pipeline 69.7 New PP production 56.8 Ust-Luga Terminal 20.6 GFU expansion from 3.8 to 6 mtpa 14.1 Steam cracker upgrade 8.3 New TPE production 4.4 Expansion of propylene intermediate depot 2.6 New BOPP-film production 2.5 Expansion of BOPP-film production 2.1 Expansion of PET production 1.8 Expansion of IIR production 1.4 Estimated 2015 2013 2013 2014 2014 2013 2013 2013 2014 2014 2013 Actual 2014 2013 2013 2014 2014 2013 2013 2013 2014 2014 2013

          

Budget Variance Investment project Republic of Bashkorstostan Location Western Siberia Tobolsk Leningrad region Tobolsk Kstovo Voronezh Tobolsk Tomsk Samara region Togliatti

26

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SLIDE 27

2016 2022F

29% 6% 65% 58% 42% Sources Uses Sources Uses (PP in Tobolsk) ZapSib PP in Tobolsk

Higher share of feedstock is processed internally into petrochemical products providing higher margins

Petchem 35% Petchem SIBUR’s raw NGL production (sourced from APG) Third-party NGLs supplies Petrochemicals Energy products

  • 7. ZapSib: How will SIBUR feedstock allocation change after the launch of the project?

27

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SLIDE 28
  • 8. How competitive is ZapSib at delivery to target markets?

28

250 500 750 1,000 1,250 1,500 10 20 30 40 50 60 Cash Cost ($/tonne) Cumulative Capacity (mtpa) 2021 WE $50 Middle East Russia USA China Western Europe

HDPE (2021) PP (2021)

Source: Nexant Limited.

Delivered to W.Europe Delivered to China

250 500 750 1,000 1,250 1,500 10 20 30 40 50 60 Cash Cost ($/tonne) Cumulative Capacity (mtpa) 2021 China $50 Middle East Russia USA China Western Europe 250 500 750 1,000 1,250 1,500 10 20 30 40 50 60 70 80 90 Cash Cost ($/tonne) Cumulative Capacity (mtpa) 2021 WE $50 Middle East Russia United States China Western Europe 250 500 750 1,000 1,250 1,500 10 20 30 40 50 60 70 80 90 Cash Cost ($/tonne) Cumulative Capacity (mtpa) 2021 China $50 Middle East Russia United States China Western Europe (incl. ZapSib) (incl. ZapSib) (incl. ZapSib) (incl. ZapSib)

slide-29
SLIDE 29
  • 9. What is the strategy post 2020?

2 4

Skovorodino Chayandinskoye Kovyktinskoye Blagoveshchensk Irkutsk Amur GPP (Gazprom)

Amur Chemical Plant (SIBUR) WESTERN SIBERIA EASTERN SIBERIA

Svobodny Power of Siberia Gas Pipeline Products: methane, ethane, propane, butane, pentane- hexane fraction Gas processing capacity(1)

42 bcm(2)

Helium production capacity

60 mcm(3)

(I) Gazprom and SIBUR – Joint investment project on construction of gas processing and chemical hub in the Amur region

(final investment decision expected after completion of basic design stage not earlier than 2018)

(1) Source: Gazprom. (2) Billion cubic metres. (3) Million cubic metres.

  • Ethane sourcing as petrochemical feedstock leveraging third-

party infrastructure

  • Nexant estimates ethane utilisation in petchem feedstock

in Russia ~10%

  • Opportunities for monetisation of dry natural gas via petchem

value chain

(II) Ideas for further strategic development

New Feedstock New Products

  • Products with domestic potential for high growth and import

substitution, for instance

  • Dioctyl terephthalate (DOTP) and Maleic anhydride

recently launched

  • Intermediates with local shortage, which limits development of

their derivative product families, for instance

  • Ethylene oxide

29

slide-30
SLIDE 30

2016 world total polymers consumption: 243 mt

26 17 12 9 17 8 11 PVC PET LDPE LLDPE HDPE PP

Source: IHS Markit, Nexant

HomoPP RCP ICP %

  • 10. What is the growth potential in polyolefins and trends in key geographies?

PE & PP Sustainably Grow Faster than World GDP PE & PP ̶ Most Widely Used Polymers

Other

30 Global consumption of PO grows faster than World GDP

PE & PP Net Trades by Key Markets (mtpa)

0% 1% 2% 3% 4% 50 100 150 2012 2016 2020F 2024F

PE PP GDP (RHS)

’12-’16 PP: 5.0% PE: 3.8% GDP: 2.7% ’17-’25 4.1% 3.9% 3.1% mtpa %

  • 5

5 15 2016 2025

  • 20
  • 10

2016 2025 PE PP

  • 5

5 2016 2025 PE PP

  • 20
  • 10

2016 2025 PE PP

  • 20
  • 10

2016 2025 PE PP

China Western Europe Turkey Russia

PE PP

USA

slide-31
SLIDE 31
  • 11. What is SIBUR shareholder structure and Board of Directors? What is SIBUR

dividend policy?

31

Shareholder Structure(1)

48.5 17.0 14.5 10.0 10.0

Current & former senior SIBUR managers Gennady Timchenko Leonid Mikhelson

%

Board of Directors Leonid Mikhelson

Chairman of the Management Board of NOVATEK

Dmitry Konov

Chairman of the Management Board of PJSC SIBUR Holding

Wang Dan

Executive Vice President

  • f the Silk Road Fund

Alexander Dyukov

CEO of Gazprom Neft

Denis Nikienko

CEO of Ladoga Management

Vladimir Razumov

Member of the Management Board of PJSC SIBUR Holding

Kirill Shamalov

President of Ladoga Management

Ilya Tafintsev

Strategic Projects Director of NOVATEK

Gennady Timchenko

Member of the Board of Directors of NOVATEK

Ruben Vardanyan(2)

President of Vardanyan, Broitman & Partners

Chang Zhenyong

Vice President of Sinopec

(1) As of 30 June 2017. (2) Independent director in accordance with director independence criteria established by Russian law.

25% payout ratio targeted by dividend policy

  • based on IFRS results of the relevant fiscal period

and adjusted for exceptional non-cash income and expenses

slide-32
SLIDE 32

SIBUR Financial Profile

32

slide-33
SLIDE 33

4.0 6.2 8.5 8.7 8.5 8.3 6.2 6.1 0.8 1.9 2.9 2.6 2.5 2.7 2.2 2.1 20% 31% 35% 30% 29% 32% 36% 34% 2009 2010 2011 2012 2013 2014 2015 2016

Revenue, $ bln EBITDA, $ bln EBITDA margin, %

(1) (1)

Net debt/ EBITDA ($) 1.6x Ba2 BB 0.7x Ba2 BB 0.7x Ba2 BB 1.0x Ba1 BB+ 1.1x Ba1 BB+ 1.2x Ba1 BB+ 1.8x Ba1 BB+ 2.2x Ba1 BB+

(1) Adjusted for the estimated value of naphtha trading operations via Ust-Luga, ceased in 2015.

FINANCIAL PERFORMANCE

33

slide-34
SLIDE 34

2.8 3.7 H1 2016 H1 2017 70.4 78.9 H1 2016 H1 2017 1.0 1.4 H1 2016 H1 2017 +35.8% 196.1 211.9 H1 2016 H1 2017

SIBUR FINANCIAL SUMMARY(1)

Operating Cash Flow Revenue CapEx(3) Russian Roubles, bln

(1) Values in USD estimated based on average RR/USD rate of 57.9862 and 70.2583 in H1 2017 and in H1 2016, respectively . (2) Adjusted EBITDA, including share of the Group’s portion in joint ventures and associates EBITDA. (3) Includes purchase of PPE, intangible assets and other non-current assets.

+8.1% 148.2 154.1 H1 2016 H1 2017

Operating Expenses

2.1 2.7 H1 2016 H1 2017

  • Adj. EBITDA

Operating Cash Flow Operating Expenses CapEx(3)

+26.0%

USD Equivalents, bln (illustrative) Revenue

+30.9% 59.9 63.3 H1 2016 H1 2017 +5.7% 84.9 48.7 H1 2016 H1 2017 0.9 1.1 H1 2016 H1 2017 +28.1% (42.6%) 1.2 0.8 H1 2016 H1 2017 (30.4%)

EBITDA(2)

+12.1%

EBITDA(2)

Share of JVs and associates EBITDA +4.0%

34

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SLIDE 35

(36.4) 41.2 63.3 (48.7) 22.1 (7.6) (9.4) (2.8) (19.4)

CASH FLOW STATEMENT HIGHLIGHTS

H1 2016 Cash Flow Reconciliation H1 2017 Cash Flow Reconciliation

  • Net cash from operating activities increased by 5.7% y-o-y due to increase in EBITDA largely offset by higher income tax paid
  • CapEx decreased by 42.6% year-on-year despite ongoing ZapSib construction as a result of significant advances paid in H1 2016 and shifts

in project’s payments schedule with higher amounts to be paid in the second half of 2017

  • Additional cash was mobilised from divestment of Uralorgsintez for RR 22.1 bln
  • Net debt repayment lower by 32.3%, as the decrease in conventional debt was partially offset by new withdrawals from ECA-backed facilities

for ZapSib funding in H1 2017

Key Factors

(1) Includes purchase of property, plant and equipment, intangible assets and other non-current assets.

66.2 59.9 (84.9) (12.3) (7.1) (53.8) (7.8) (105.9)

Net OCF CapEx(1) M&A Net debt repayments Dividends paid Interest paid Other Net CF Net OCF CapEx(1) Net debt repayment Dividends paid Interest paid Net CF

RR bln RR bln

Cash as of 30.06 Cash as of 30.06 Other

35

slide-36
SLIDE 36

RR bln, except as stated 31 Oct 2017(1) 30 Sep 2017(1) 31 Dec 2016 31 Oct vs. 31 Dec, % 30 Sep vs. 31 Dec, % Total debt 300 300 342 (12.4%) (12.2%) Conventional debt 134 134 182 (26.2%) (26.6%) ZapSib related debt 165 166 160 (3.4%) 4.1% Cash & cash equivalents 41 46 61 (33.2%) (24.7%) Net debt 259 254 281 (7.9%) (9.6%) Conventional net debt 102 103 163 (37.4%) (36.8%) ZapSib related net debt 157 151 118 33.0% 28.3% WA loan tenor (years) 7.2 6.9 6.8 WA Conventional debt 3.3 2.6 2.7 WA ZapSib related debt 10.2 10.3 11.4 Available credit lines, incl. 244.2 236.2 184.5 32.4% 28.0% Committed 120.5 122.2 112.5 7.2% 8.6%

DEBT PROFILE

Key Figures

30 Sep 2017(1) 31 Dec 2016 Debt / EBITDA 2.0x 2.4x Net debt / EBITDA 1.7x 2.0x Conventional net debt 0.7x 1.2x ZapSib related net debt 1.0x 0.8x Net debt / EBITDA (in $) 1.7x 2.2x

Leverage Ratios

100% 48% 85% 61% 52% 15% 18% 20% Unsecured Fixed/Floating Long-term/Short-term $/€/₽

Overview Loan Portfolio Structure as of 31 Oct’17

  • As of 31 Oct’17 vs. 31 Dec’16 total debt

decreased by 12.4% and net debt decreased by 7.9% mainly due to substantial repayments of conventional debt

  • Average tenor improved to 7.2 from 6.9

years following Eurobond’23 placement

  • As of 30 Sep’17 vs. 31 Dec’16 net leverage

decreased to 1.7x from 2.0x

  • conventional net leverage decreased to

0.7x from 1.2x on recent debt repayments

  • ZapSib net leverage increased to 1.0x

from 0.8x on on-going project financing

  • No material movements in debt profile

between 31 Jul’17 and 30 Sep’17

(1) Unaudited data.

36

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SLIDE 37

LIQUIDITY AND DEBT MATURITY PROFILE(1)

(1) Items denominated in $ and € are converted into ₽ based on FX rates as of 31 October 2017; ₽/$ at 57.9, ₽/€ at 67.2. (2) Debt maturing during 31 October - 31 December 2017.

40 120 124 285 1 30 34 31 25 22 65 14 14 14 14 127 Liquidity 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 After 2027 As of 31 October 2017, ₽ bln cash & cash equiv. committed credit lines uncommitted credit lines Eurobonds undrawn EUR ECA loans RR bonds ECA NWF

(2)

ZapSib mechanical completion 37

slide-38
SLIDE 38

INVESTMENT PROGRAMME

347 347 Feedstock processing capacity, Transportation infrastructure Petrochemicals Other 54 54 94 94 102 102 193 192 59 59 Feedstock processing capacity, Transportation infrastructure Petrochemicals Other TOTAL

₽ bln (excl. VAT)

2011 – 2016

502 in 6yrs

Transportation infrastructure Feedstock processing capacity Petrochemicals Maintenance, R&D, IT, and other TOTAL

CapEx includes purchase of property, plant and equipment, as well as purchase of intangible assets and other non-current assets. Figures are available in SIBUR’s public reporting. (1) ZapSib CapEx denominated in $ and € was translated in ₽ using exchange rates as of 30 June 2017: 58.94 ₽/$ and 67.31 ₽/€

ZapSib CapEx

2017E – 2020F

Petrochemicals

450 in 4yrs

TOTAL ZapSib(1) Tobolsk logistics hub Maintenance, R&D, IT, and other

SIBUR plans to invest approximately ₽ 450 bln (excl. VAT) from 2017 to 2020

₽ 625 bln

Accumulated EBITDA

₽ 537 bln

Accumulated Net OCF

₽ bln (excl. VAT)

38

slide-39
SLIDE 39

CHANGES IN REPORTING TO REFLECT SIBUR STRATEGIC DEVELOPMENT

CHANGES IN REPORTABLE SEGMENTS

  • WHY:
  • Focus on polyolefins as the segment of SIBUR strategic development
  • Transparent reconciliation between product revenue and segment results
  • WHAT:
  • Petrochemicals segment split into two sub-segments with different profitability

fundamentals

  • Only purely energy products retained within Feedstock & Energy segment
  • WHEN: Starting 2016 with the respective restatement of 2015

1 2

NEW METRICS: EBITDA ACCOUNTING FOR THE EXPANDING JV CONTRIBUTION

  • WHY:
  • Reflection of the results of the joint ventures launched in 2014-2015
  • WHAT:
  • The Group EBITDA adjusted by the portion of EBITDA of associates and joint ventures
  • WHEN: Starting 2016 with the comparable calculation for 2015

39

slide-40
SLIDE 40

CHANGES IN SIBUR REPORTABLE SEGMENTS

Energy Products LPG Naphtha Natural Gas Raw NGL Petrochemical Products MTBE Other Fuels & Fuel Additives Basic Polymers Synthetic Rubbers Plastics & Organic Synthesis Intermediates Feedstock & Energy Segment (F&E) Olefins & Polyolefins Segment (O&P) Plastics, Elastomers & Intermediates Segment (PE&I) BOPP

BEFORE 2016 AFTER 2016

Ethylene LPG Natural Gas Naphtha Raw NGL Other Sales Plastics & Organic Synthesis Elastomers MTBE & Fuel Additives Intermediates & Other Chemicals Other Sales PP PE BOPP Films Olefins Other Polymer Products Other Sales

40