INVESTOR PRESENTATION JUNE 2019 DISCLAIMER THIS PRESENTATION IS - - PowerPoint PPT Presentation

investor presentation
SMART_READER_LITE
LIVE PREVIEW

INVESTOR PRESENTATION JUNE 2019 DISCLAIMER THIS PRESENTATION IS - - PowerPoint PPT Presentation

INVESTOR PRESENTATION JUNE 2019 DISCLAIMER THIS PRESENTATION IS FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER


slide-1
SLIDE 1

INVESTOR PRESENTATION

JUNE 2019

slide-2
SLIDE 2

2

DISCLAIMER

THIS PRESENTATION IS FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THIS PRESENTATION IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN 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 to third 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 otherwise made available. This information may not be reproduced, retransmitted, further distributed to any other person (excluding an investment professional’s advisers) or published, 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 its shareholders, directors, officers, employees, agents or advisers or any other person as to, nor may any reliance be placed upon, the accuracy, completeness or fairness of the information or opinions contained in this presentation. By accepting this Presentation you acknowledge that you will be solely responsible for your

  • wn 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 own

view 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 does it 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 involve known and unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these 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 document

  • r 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 its

shareholders, directors, officers, employees, agents or advisers disclaim any obligation to update any such forward-looking statements in this document to reflect future 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 document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of any such 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 any US Person (as defined in regulation S promulgated under the US Securities Act), Canada, Japan or Australia or to any residents, corporations, citizens or nationals of any 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 in the 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. The Company’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 securities regulatory 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 (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

slide-3
SLIDE 3

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. The

record 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. The

record 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 of

up to USD 750 mn, which was originally signed with a group of banks in May 2017. The grace period was prolonged 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 was

35%. 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 of

banks a preliminary term sheet for the project financing.

slide-4
SLIDE 4

4

SPECIAL SITUATION

How does a weaker rouble impact the company’s financials?

FX 29% Rouble 71% Total cash costs structure, 2018 Russia 18% Export 82%

5 10 15 20 25

50 55 60 65 70 75 80 USD mn per RUB 1 of rate USD/RUB EBITDA gain in 2019 if exchange rate depreciates for RUB 1 Revenue structure, 2018

Note: company estimates

slide-5
SLIDE 5

5

CONTENTS

  • 5

Acron at a glance

  • 8

Market overview

  • 12

Company overview

  • 20

Development programme

  • 26

Financial standing

  • 30

Appendices

slide-6
SLIDE 6

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

1 2 3 4 5 6 7 8

Other Complex Nitrogen

  • Leading low-cost producer of NPK and nitrogen

fertilisers

  • In Top 3 NPK producers in Europe and in Top 10

globally

  • Vertical integration in nitrogen and phosphates

Potash project underway

  • Developed logistics and distribution

Sales to >60 countries

  • Listed on MOEX and LSE
  • 11,000 employees

COMPANY PROFILE

ACRON GROUP

FINANCIAL RESULTS COMMERCIAL OUTPUT

USD mn 14/06/19 MCap 2,862 Free-float 11% Net debt* 1,044 Stake in ATT 213 Assets* 3,050

NPK complex fertiliser

K P N

OUR KEY PRODUCT

* As of 31 March 2019

mn t

slide-7
SLIDE 7

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

slide-8
SLIDE 8

8

CONTENTS

  • 5

Acron at a glance

  • 8

Market overview

  • 12

Company overview

  • 20

Development programme

  • 26

Financial standing

  • 30

Appendices

slide-9
SLIDE 9

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.

50 100 150 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 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 nutrient Source: 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.

500 1000 1500 2000 800 1600 2400 3200 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 mn ha mn t Wheat Coarse grains Rice Agricultural land* (rhs)

CAGR (2017-27) cereals: 1.1% agricultural land: 0.18%

* arable land and land under permanent crops Source: OECD-FAO, July 2018 40 80 120 160 200 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 Biodiesel Ethanol

CAGR (2017-27): 0.8%

bn l Source: OECD-FAO, July 2018

MINERAL FERTILISER MARKET DRIVERS

2 4 6 8 10 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Now: 7.6 bn

CAGR (2015-25): 1.0%

bn Source: United Nations Population Division, 2017 30 31 32 33 34 35 36 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027

CAGR (2017-27): 0.30%

kg per capita Source: OECD-FAO, July 2018

slide-10
SLIDE 10

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

slide-11
SLIDE 11

11

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

slide-12
SLIDE 12

12

CONTENTS

  • 5

Acron at a glance

  • 8

Market overview

  • 12

Company overview

  • 20

Development programme

  • 26

Financial standing

  • 30

Appendices

slide-13
SLIDE 13

13

GLOBAL FOOTPRINT & VERTICAL INTEGRATION

DISTRIBUTION

Beijing Yong Sheng Feng AMPC, Ltd. Distribution network in China Agronova Distribution network in Russia Storage 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 facilities Capacity: Ammonia – 1.5 mtpa UAN – 1.85 mtpa Bulk cargo – 2.5 mtpa Andrex port terminal facility Capacity: 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 9 1 3 6 7 10 2 8 4 11 5

VPC (potash subsoil licence) Reserves under JORC: 60 mn t KCl NWPC, Oleniy Ruchey mine 2018 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 SAS

13 13

Acron Brasil Ltda.

14 14 15

Acron Argentina SRL

15

slide-14
SLIDE 14

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: 1,200 min 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

slide-15
SLIDE 15

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 premium to the basket**

Average: 20%

  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 20% 25% 30% 2014 2015 2016 2017 2018 2019

AN premium/discount to Urea by nutrient

Average: 12%

  • 10%
  • 5%

0% 5% 10% 15% 20% 25% 2014 2015 2016 2017 2018 2019

UAN premium/discount to 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 value

added products

  • With a broad product portfolio the

Group meets the market requirements

slide-16
SLIDE 16

16

PRODUCTION CHART

AN*

Complex mineral fertilisers Nitrogen mineral fertilisers

1,8

Urea**

NPK 2.4 mn t

UAN 1.5 mn t Phosphates

P

Potash

K

Ammonia

N

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

Potash

K

developing

+2.6 mn t

0.6 mn t

* Agricultural and industrial products and liquid solution used for UAN production ** Agricultural and industrial products

slide-17
SLIDE 17

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 developed markets in the region

Other: 7%

Traditional market for main fertilisers and ammonia with stable demand and sales structure

SALES TO

67

COUNTRIES 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)
slide-18
SLIDE 18

18

Staff costs 12% Potash 12% D&A 17% Fuel and energy 14% Natural gas 29% Repairs and maintanance 6% Other 11%

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 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

slide-19
SLIDE 19

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 Sea

BEST 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 programme

GROWING BUSINESS

slide-20
SLIDE 20

20

CONTENTS

  • 5

Acron at a glance

  • 8

Market overview

  • 12

Company overview

  • 20

Development programme

  • 26

Financial standing

  • 30

Appendices

slide-21
SLIDE 21

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%

1000 731 World average Acron Group $/т

  • 45%

OUR RECORD OF SUCCESS

UREA UNITS

2008-2012, 2017-2018 Construction of two new urea units and upgrade of the existing facilities with total capacity increase of 830 ktpa

UAN PRODUCTION

2006-2008, 2013-2014, 2017-2018 Construction of a new UAN unit with further capacity expansion to 1.5 mtpa

BCT AND DBT SEAPORT TERMINALS

2006-2009, 2011-2016 Construction and expansion of transshipment capacity

OLENIY RUCHEY MINE

2010-2014 Construction of an open pit with a capacity

  • f 1.2 mtpa of apatite concentrate

AMMONIA-4

2012-2016, 2017 Construction of a new ammonia unit with further capacity expansion to 800 ktpa

RARE EARTH ELEMENTS

2010-2016 Construction of a REE production unit with a capacity

  • f 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

slide-22
SLIDE 22

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 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 2 4 6 8 10 12 2017 2026П mn t Acron Dorogobuzh NWPC (for sale) VPC (for sale) + 40% 7.3 10.2

slide-23
SLIDE 23

23

PROJECTS AT ACRON AND DOROGOBUZH

15-20%

weighted average IRR Projects with relatively small Capex and short payback period Main projects Timeline, years Output increase, ktpa Capex, USD mn Status 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 and increase of AN and NPK units capacity 2017-2019 AN: +250 NPK: +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 2019-2021 CAN: +600 AN: -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.

slide-24
SLIDE 24

24

OLENIY RUCHEY UNDEGROUND MINE: APATITE CONCENTRATE

  • Stage 1: open pit, processing facility, roads and

infrastructure Capacity: 1.2 mtpa of apatite concentrate Commissioning: December 2012

  • Stage 2: underground mine, expansion of processing

facility First ore from the underground mine extracted in 2017 Gradual 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

slide-25
SLIDE 25

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 of financial 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 ktpa

In-house potash consumption from 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 Verhnekamsk Depoist (Mining Institute of the Ural Branch of the Russian Academy of Science, 2016)

slide-26
SLIDE 26

26

CONTENTS

  • 5

Acron at a glance

  • 8

Market overview

  • 12

Company overview

  • 20

Development programme

  • 26

Financial standing

  • 30

Appendices

slide-27
SLIDE 27

27

EFFICIENT EXPANDING BUSINESS

REVENUE EBITDA

$1.6 bn

5-year average revenue

35%

5-year average EBITDA margin

Note: In USD mn; Revenue and EBITDA recalculated excluding Hongri Acron figures

EBITDA MARGIN

1 579 1 008 1 307 1 915 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 789 248 312 677 623 464 507 672 445 511 591 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

100 200 300 400 500 600 700 800 900
slide-28
SLIDE 28

28

RUB loans and bonds 26% EUR loans 11% USD loans 63%

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 95 204 328 257 247 126 100 200 300 400 2019 2020 2021 2022 2023 Further USD mn

Duration: 2.7 years

** As of 30 May 2019

slide-29
SLIDE 29

29

DIVIDENDS PAID IN CALENDAR YEAR

PJSC ACRON DIVIDENDS

DIVIDEND YIELD 160 91 199 224 212 164

50 100 150 200 250 2014 2015 2016 2017 2018 2019 YTD* 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 2019 YTD*

8.7%

5-year average dividend yield

~ $200 mn

Dividends paid in 2016 - 2018

* Approved

slide-30
SLIDE 30

30

APPENDICES

slide-31
SLIDE 31

31

QUARTERLY HIGHLIGHTS

31

REVENUE ($ mn) EBITDA ($ mn) WORLD PRICES AMMONIUM NITRATE,FOB BALTIC($/t) WORLD PRICES NPK 16-16-16,FOB FSU($/t) PRODUCTION & SALES (kt)

Source: Fertecon, FMB, CBR, company data

140 124 151 176 158 50 100 150 200 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 186 166 213 186 182 100 150 200 250 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 284 291 308 316 312 100 150 200 250 300 350 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 56.9 61.8 65.5 66.5 66.1 50 55 60 65 70 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

USD/RUB DYNAMICS

423 410 434 457 446 250 300 350 400 450 500 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 1900 1849 1879 1887 1936 1856 1809 1783 1865 1802 1 300 1 500 1 700 1 900 2 100 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Production Sales

slide-32
SLIDE 32

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

slide-33
SLIDE 33

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

slide-34
SLIDE 34

34

HISTORY OF COMPANY

BUILDING PRODUCTION 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 Dorogobuzh consolidation

  • Launch of export sales
  • Development of

distribution and logistics network

VERTICAL INTEGRATION

  • 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

LEVERAGING EXISTING CAPACITY

  • 2017: Adoption of new

development strategy

  • Construction of new

processing facilities

  • Construction of potash

mine

1961-1992 1992-2005 2005-2017 2017-2025

slide-35
SLIDE 35

35

GROUP STRUCTURE

Acron Dorogobuzh

96.7% NWPC (phosphate rock producer) VPC (potash licence) North Atlantic Potash Inc. (permits for exploration

  • f 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 Sheng Feng 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 companies Data 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 programme

Free Float

slide-36
SLIDE 36

36

CORPORATE GOVERNANCE OVERVIEW

BOARD 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-

  • r higher.

BOARD COMMITTEES

  • Audit Committee consists of three INEDs
  • Nomination and Remuneration Committee

consists of three INEDs

  • Strategic Planning and Corporate

Governance Committee consists of three members

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

  • f the Company’s Managers and Directors.

CODE OF BUSINESS CONDUCT

  • Adopted in 2011
  • Outlines the company’s general standards
  • f 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

slide-37
SLIDE 37

37

CONTACTS

For more information, please contact our Investor Relations Department:

  • Mr. Ilya POPOV,

Head of Investor Relations

Tel.: +7 (495) 745 77 45 ext. 5252 E-mail: ipopov@acron.ru

  • Mr. Sergey SMIRNOV,

Senior Analyst, Investor Relations

Tel.: +7 (495) 745 77 45 ext. 5184 E-mail: smirnov@acron.ru

JSC Acron

www.acron.ru World Trade Centre, 12, Krasnopresnenskaya Naberezhnaya, Moscow 123610, Russia Tel.: +7 (495) 745 77 45