Q12018 RESULTS PRESENTATION May 10th 2018 @Grupa_Azoty - - PowerPoint PPT Presentation

@Grupa_Azoty #GrupaAzoty1Q18

Q12018 RESULTS PRESENTATION May 10th 2018

@Grupa_Azoty #GrupaAzoty1Q18

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EBITDA margin

GRUPA AZOTY GROUP

Financial highlights

Consolidated revenue PLN 2.497m Consolidated EBITDA PLN 403m Consolidated net profit PLN 188m 16.1% Recommended dividend for 2017 Dividend per share PLN 1.25

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GRUPA AZOTY GROUP

Diversification – shifts in revenue structure 2007-2023

2007

• Revenue: PLN

1.3bn

• EBITDA: PLN

163m

• Net profit:

PLN 63.8m 2017

• Revenue: PLN

9.6bn

• EBITDA: PLN

1,187m

• Net profit:

PLN 489m 2023

• Revenue: PLN

15bn (estimates excluding potential acquisitions)

2023 Estimated revenues

Agro Fertilizers 30% Plastics, 52% Agro Fertilizers < 50% Agro Fertilizers 52% Chemicals, 29% Plastics 15%

0,0 3000,0 6000,0 2007 2017 Plastics, Chemicals, Agro Fertilizers

Grupa Azoty Group

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GRUPA AZOTY GROUP

Grupa Azoty Group financial highlights

2,687 2,183 2,196 2,551 2,497 Q12017 Q22017 Q32017 Q42017 Q12018

INCOME

453 261 255 218 403 462 276 269

16.9% 12.0% 11.6% 8.5% 16.1%

Q12017 Q22017 Q32017 Q42017 Q12018 EBITDA EBITDA (Corrected) * EBITDA margin 255 123 75 36 188 262 135 77 Q12017 Q22017 Q32017 Q42017 Q12018 Net profit Net profit* (Corrected)

* In 2017 adjusted for impairment losses on the fat processing unit, AIG, sulfur deposits and Elektrownia Puławy Power Plant.

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GRUPA AZOTY GROUP

Q1 2018 EBITDA – Business segments of the Grupa Azoty Group

positive effect on EBITDA negative effect on EBITDA (PLNm) 453 403 23 20 3 6 84

Energy

• Low Q1 2017 base due to recognition of impairment loss on Elektrownia Puławy Power Plant capex
• Higher value of gas sales

Chemicals

• Higher prices of sulfur and titanium white contributing to margin improvement
• Higher sales volume in the OXO business
• Stabilisation of the Melamine business

Plastics

• 16% yoy depreciation of the US dollar constricting sales margins, mainly in the Asian region
• Segment’s performance impacted by rising energy costs
• Production structure modified towards increased volumes of caprolactam processed into PA6 in an attempt to mitigate the impact of

adverse market factors (as discussed above) Agro-Fertilizers

• Significantly lower sales volumes, both of nitrogen and NPK fertilizers
• Higher prices of gas and energy commodities, including CO2 emission allowances

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GRUPA AZOTY GROUP

Q1 2018 revenue structure by segments

CHANGE IN REVENUE Q1 2018 vs Q1 2017

Agro Fertilizers 49% Chemicals 31% Plastics 16% Energy 3% Other 1%

(PLNm)

• 18%
• 271

Agro Fertilizers +12% +82 Chemicals +0% Plastics +0 Energy +34% +21 Other

• 50%
• 22

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Raw materials

GRUPA AZOTY GROUP

PRICES OF NATURAL GAS DAILY QUOTATIONS

EUR/MWh USD/MWh 10 20 30 40 50 60 70 80

2018-01-01 2018-01-08 2018-01-15 2018-01-22 2018-01-29 2018-02-05 2018-02-12 2018-02-19 2018-02-26 2018-03-05 2018-03-12 2018-03-19 2018-03-26

5 10 15 20 5 10 15 20 25

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 PPX* TTF DA* GPL DA * Russia Federal Tariff Service USD / MWh * bez przesyłu

PRICES OF HARD COAL PRICES OF ELECTRICITY

PLN/MWh USD/t

140 150 160 170 180 190

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q42017 Q1 2018

IRDN FX

40 50 60 70 80 90 100

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q42017 Q1 2018

ARA

BUSINESS

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NITROGEN FERTILIZERS

Market overview

GRUPA AZOTY GROUP

Market spreads

CAN/ammonia spread

expressed as CAN (27%N) equivalent

50 100 150 200 250 300

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18

EUR/t Urea (27%N) Ammonia (27%N) Expressed as CAN (27%N) equivalent

average annualised

129 136 113 112 124 119

20 40 60 80 100 120 140 160 2014 2015 2016 2017 Q1 2017Q1 2018

EUR/t

Market spreads

Pricing trends (cumulative)

136 164 290 241 135 162 284 226

50 100 150 200 250 300 350 AS RSM Amonium Urea USD/t Q1 2017 Q1 2018

• 0%
• 2%
• 2%
• 6%

209 290 192 277

50 100 150 200 250 300 350 CAN AN

EUR/t

Q1 2017 Q1 2018

• 4%
• 8%

OUTLOOK:

• The favourable grains balance, forecast to continue into future periods, will not be supportive of any significant price rises.
• Demand for nitrogen fertilizers will continue to depend on weather. Agricultural sector delaying purchases in anticipation of lower prices will be an

additional factor weakening demand.

• In Q2 2018 (May/June), key market players are expected to announce post-season price reductions – rapid price changes possible to stimulate market

demand.

• In Q2 2018 (starting from May), urea is expected to be again in global oversupply (due to dwindling demand), and so its prices are likely to drop.
• China’s passivity in urea exports will not have any significant impact on that market segment.

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COMPOUND FERTILIZERS

Market overview

GRUPA AZOTY GROUP

NPK 3x16/raw materials* spread

Market spreads

expressed as NPK 16-16-16 equivale nt

50 100 150 200 250 300 350 400

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18

USD/t Potassium chloride Phosphate rock Urea Ammonium sulfate NPK 16-16-16

average annualised

86 76 69 49 33 46

20 40 60 80 100 2014 2015 2016 2017 Q1 2017Q1 2018

USD/t

Market spreads

* Potassium chloride, phosphate rock, urea, ammonium sulfate

Pricing trends (cumulative)

339 235 290 218 96 95 388 254 284 248 112 96

100 200 300 400 500 DAP 18-46 NPK 16-16-16 Ammonia Potassium chloride Sulfur Phosphate rock USD/t Q1 2017 Q1 2018

+14% +8%

• 2%

+14% +17% +1% OUTLOOK:

• DAP: upward trends expected, linked to export cuts by some producers in countries east of Poland and a DAP plant shutdown by a western

producer.

• NPK: after first indications of growth trends, NPK prices are expected to stabilise. Producers are likely to curb price rises, taking stock of the

difficult financial condition of Europe’s agricultural sector.

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GRUPA AZOTY GROUP

Agro Fertilizers

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 1,483 1,212

• 18%

 Nitrogen fertilizers and ammonia 904 796

• 12%

 Compound fertilizers 432 327

• 24%

 EBITDA 252 168

• 33%

 EBITDA margin 17.0% 13.9%

• 3.1 pp



Volumes (‘000 tonnes)

300 600

Saltpeter Phosphorus and NPK Urea Ammonium sulfate RSM Q1 2016 Q1 2017 Q1 2018

• 8%
• 26%
• 11%
• 13%
• 29%

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CHEMICALS

Market overview

GRUPA AZOTY GROUP Market spreads

DEHT/propylene spread 500 1 000 1 500 2 000

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

EUR/t 2-EH Propylene DEHT (DOTP)

average annualised

438 567 617 488 419 376

200 400 600 800

EUR/t

Market spreads

Pricing trends (cumulative)

991 1,275 1,442 2,230 856 1,071 1,288 1,617 2,915 911

1 000 2 000 3 000

2-EH DEHT Melamine Titanium white Propylene

EUR/t 1Q2017 1Q2018

+8% +1% +12% +31% +7%

OUTLOOK:

• Demand for OXO products is forecast to keep rising. Prices of OXO alcohols will remain correlated with propylene

price, which largely reflects global oil price movements and demand factors.

• Demand for plasticizers has been rising steadily (especially in the case of non-phthalates), a trend forecast to

continue into coming years.

• Continuing growth in titanium white prices, with demand outstripping supply.
• As titanium white prices are beginning to hit their historical highs, they are soon expected to more or less
• stabilise. They may even slightly decline at the beginning of the fourth quarter (when demand is seasonally

weaker) of 2018.

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GRUPA AZOTY GROUP

Chemicals

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 687 769 12%  OXO alcohols 136 158 16%  Plasticizers 61 66 8%  Urea (technical grade) 152 147

• 3%

 Melamine 119 132 11%  Titanium white 85 106 25%  EBITDA 107 127 19%  EBITDA margin 15.6% 16.5% 0.9 pp 

Volumes (‘000 tonnes)

+7%

50 100 150 200

OXO alcohols Plasticizers Urea (technical grade) Melamine Titanium white

Q1 2016 Q1 2017 Q1 2018

+4% +5% 0% 0%

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PLASTICS

Market overview

GRUPA AZOTY GROUP Market spreads

500 1 000 1 500 2 000 2 500

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

EUR/t Caprolactam Benzene Polyamide 6

Pricing trends (cumulative)

1,9 88 2,0 64

500 1 000 1 500 2 000 2 500 Solid caprolactam USD/t 1Q2017 1Q2018

+4%

896 1,501 2,001 2,033 752 1,368 2,148 2,205

1 000 2 000 3 000 Benzene Phenol Liquid caprolactam Polyamide 6 EUR/t 1Q2017 1Q2018

• 16%
• 9%

+7% +8%

OUTLOOK:

• Demand and supply trends, combined with crude oil prices, are the main factors shaping the market of PA6 and CPL.
• The steadily growing demand for polyamide chain products, combined with stable situation on the European

commodity market, have been a solid basis for stabilising the market’s key segments.

• The relatively strong demand for PA6 in Europe will mainly be driven by the automotive and construction industries.
• Expected shift in the structure of demand for PA6: with the engineering plastics, film and flexible packaging

sector gaining prominence.

• Asian market poses no threat to European polyamide 6 producers.

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GRUPA AZOTY GROUP

Plastics

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 411 411 Polyamide* 239 339 42%  Caprolactam 149 50

• 66%

 EBITDA 66 60

• 9%

 EBITDA margin 16.1% 14.6%

• 1.5 pp



Volumes (‘000 tonnes)

37%

10 20 30 40 50

Polyamide Caprolactam Q1 2016 Q1 2017 Q1 2018

• 63%

* Including modified

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GRUPA AZOTY GROUP

Investments made in 2015-2017

2015 2016 2017 Plan 2018

Rozwój biznesu Utrzymania biznesu Mandatowe Zakup Gotowych Dóbr Pozostałe Komponenty

(PLNbn) Grupa Azoty S.A. 0.4 Grupa Azoty PUŁAWY 0.6 Grupa Azoty POLICE 0.2 Grupa Azoty ZAK 0.2 Other 0.2 Plan 2018 1.06 1.24 1.07 1.6 By type By company

* as per the “Acquisition of property, plant and equipment, intangible assets and investment property” item of the consolidated statement of cash flows

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GRUPA AZOTY GROUP

Major capex projects in 2018

Plan 2018

Komponenty Pozostałe Zakup Gotowych Dóbr Mandatowe Utrzymania biznesu Rozwój biznesu

(PLN ‘000)

Project name Company Project budget in 2018 Upgrade of steam generator to reduce NOx emissions ZAP 44,000 Exhaust gas treatment unit and upgrade of EC II CHP plant ZCH 21,000 Upgrade of synthesis gas compression unit supplying ammonia plant ZAK 50,807 Raw gas compressor (GHH) ZAK 17,678 Upgrade of partial combustion unit at Ammonia Department ZAK 14,000 Facility for production of ammonium nitrate-based granulated fertilizers ZAP 131,280 Chemical Technology and Development Centre ZAT 68,270 Expansion of production capacity of technical-grade nitric acid unit ZAT 58,090 Upgrade of existing and construction of new nitric acid units, and facilities for neutralisation and production of new nitric acid-based fertilizers ZAP 51,290 Special Esters I ZAK 37,505 Change of phosphoric acid production method (DA-HF technology) ZCH 33,295 Utilisation of purge gases from ammonia synthesis unit ZAT 22,350 Increasing the volumes of and optimising liquid CO2 production ZAP 19,200 Expansion of water demineralisation station ZAP 13,112 Pilot humic acid unit ZAT 11,830 Purchase and installation of synthesis compressor ZAP 10,392

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GRUPA AZOTY GROUP

Grupa Azoty Group financials as at March 31st 2018

FINANCIAL RATIOS

Q1 2017 Q1 2018 Profitability ratios EBIT margin (%) 11.9 9.5 EBITDA margin (%) 16.9 16.1 ROCE (%) 3.3 2.4 ROE (%) 3.5 2.5 Liquidity ratios Current ratio 2.0 1.9 Debt ratios Total debt ratio (%) 35.2 36.2 Net debt (PLNm) 439 604 Net debt/12M EBITDA 0.50 0.53 368 1393

• ther financial assets
• verdrafts and multi-

purpose credit facilities corporate loans

AVAILABLE FUNDS/UNDRAWN FACILITIES*

(mln PLN)

86% 6% 8%

FINANCING STRUCTURE

corporate loans

• verdrafts and multi-purpose

credit facilities

• ther financial assets

* Following entry into a new EUR 145m loan agreement with EIB on January 25th 2018, the available funds (undrawn corporate facility limits) rose by approximately PLN 600m.

Grupa Azoty Puławy Group

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GRUPA AZOTY PUŁAWY GROUP

Grupa Azoty PUŁAWY Group financial highlights

1,003 788 798 902 910 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

INCOME

204 78 83 133 159 212 93 83 132 159

20.3% 9.9% 10.4% 14.8% 17.4%

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 EBITDA EBITDA (Corrected) * EBITDA margin 138 26 30 65 92 146 41 30 64 92 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Net profit Net profit* (adjusted)

* Adjusted for impairment losses related mainly to the fat processing unit at ZA Chorzów and Elektrownia Puławy Power Plant

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GRUPA AZOTY PUŁAWY GROUP

Q1 2018 EBITDA – Business segments of the Grupa Azoty PUŁAWY Group

(PLNm)

203.6 159.0

• 36.8
• 23.1

19.6 0.6

• 4.9

positive effect on EBITDA negative effect on EBITDA

• Sales volume of fertilizer products down 15%
• Caprolactam price down 16%
• Melamine price up 8%

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GRUPA AZOTY PUŁAWY GROUP

Q1 2018 revenue structure by segments

CHANGE IN REVENUE Q1 2018 vs Q1 2017

Agro Fertilizers 56% Chemicals 39% Energy 4% Other 1%

• 16%

Agro Fertilizers Chemicals

• 3%

+69% Energy Other

• 25%

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GRUPA AZOTY PUŁAWY GROUP

Fertilizers

Poland 82% Abroad 18%

Target markets

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 599 506

• 15.5%

 Nitrogen fertilizers 472 409

• 13.3%

 Phosphate and compound fertilizers 54 39

• 27.8%

 EBITDA 145 108

• 25.5%

 EBITDA margin 24.2% 21.3%

• 2.9 pp



Volumes

‘000 tonnes

100 200 300

Saltpeter Phosphorus and NPK Urea Ammonium sulfate RSM Q1 2016 Q1 2017 Q1 2018

• 9%
• 19%
• 10%
• 6%
• 25%

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GRUPA AZOTY PUŁAWY GROUP

Chemicals

Poland 41% Abroad 59%

Target markets

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 365 353

• 3.3%

 Melamine 119 132 10.9% ↗ Caprolactam 141 120

• 14.9%

 Urea 69 66

• 4.3%

 EBITDA 91 68

• 25.3%

 EBITDA margin 24.9% 19.3%

• 5.6 pp



Volumes

‘000 tonnes

+8%

20 40 60 80

Melamine Caprolactam Urea Q1 2016 Q1 2017 Q1 2018

+3% +2%

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GRUPA AZOTY PUŁAWY GROUP

Grupa Azoty PUŁAWY Group financials as at March 31st 2018

FINANCIAL RATIOS*

Q1 2017 Q1 2018 Profitability ratios EBIT margin (%) 15.5 11.8 EBITDA margin (%) 20.3 17.4 ROCE (%) 4.5 3.0 ROE (%) 4.3 2.8 Liquidity ratios Current ratio 2.8 2.3 Debt ratios Total debt ratio (%) 21.8 23.9 Net debt (PLNm)

• 527.8
• 499.3

Net debt/12M EBITDA

• 1.13
• 1.10

31 500

• ther financial

assets

• verdrafts and

multi-purpose credit facilities bank borrowings corporate logo

AVAILABLE FUNDS/UNDRAWN FACILITIES**

(mln PLN)

* Relates to the Grupa Azoty PUŁAWY Group ** Relates to Grupa Azoty Puławy S.A.

Grupa Azoty Police Group

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GRUPA AZOTY POLICE GROUP

Grupa Azoty Police Group financial highlights

725 632 746 687 699 615 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 INCOME 61 48 94 107 84 68

8.5% 7.6% 12.6% 15.6% 12.0% 11.1%

Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 EBITDA EBITDA margin 32 17 51 68 47 33 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Net profit

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GRUPA AZOTY POLICE GROUP

Q1 2018 EBITDA – Business segments of the Grupa Azoty Police Group

(PLNm)

84 68

14 27 3

positive effect on EBITDA negative effect on EBITDA

• Higher selling prices of titanium white and compound fertilizers, lower fertilizer sales
• volumes. Lower ammonia prices and sales volumes.
• Higher purchase prices of natural gas, fine coal, potassium chloride, sulfur and raw

materials for the production of titanium white. Lower phosphate rock prices.

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GRUPA AZOTY POLICE GROUP

Q1 2018 revenue structure by segments

CHANGE IN REVENUE Q1 2018 vs Q1 2017

Fertilizers 80% Pigments 18% Other 2% +23% Pigments Fertilizers

• 18%

GRUPA AZOTY GROUP

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GRUPA AZOTY POLICE GROUP

Fertilizers

Key performance drivers:

• higher prices of natural gas, a key

production input (resulting in increased variable costs of ammonia production), coupled with falling ammonia prices,

• delayed fertilizer application period,
• customers’

stocks accumulated in previous spring seasons affecting sales

• f compound fertilizers.

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 598 492

• 18%

m Compound fertilizers 394 298

• 24%

m Urea 107 92

• 14%

m Ammonia 77 67

• 13%

m EBITDA 64 37

• 42%

m EBITDA margin 11% 8% m

Natural gas and ammonia price trends Volumes

5 10 15 20 25 100 200 300 400 EUR/MWh USD/t Ammonia Gas Natural gas +15% Ammonia

• 25%

200 400 Compound fertilizers Urea Ammonia Q1 2016 Q1 2017 Q1 2018

• 27%
• 12%
• 9%

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GRUPA AZOTY POLICE GROUP

Pigments

Key performance drivers:

• higher

average prices

• f

titanium white relative to Q1 2017,

• continuing favourable conditions in the

pigments market,

• titanium white sales volume a few per

cent below that achieved in the record-high Q1 2017, but above the first quarter average for the last 10 years.

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 89 110 23% ↗ Titanium white 85 106 24% ↗ Other 4 4 0% g EBITDA 20 34 73% ↗ EBITDA margin 22% 31% ↗

Volumes

• 6%

1 3 5 7 9 11

Titanium white Q1 2016 Q1 2017 Q1 2018

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GRUPA AZOTY POLICE GROUP

Grupa Azoty POLICE Group financials as at March 31st 2018

186 454

• verdrafts and

multi-purpose credit facilities corporate loans AVAILABLE FUNDS/UNDRAWN FACILITIES (mln PLN)

Financial ratios Q1 2017 Q1 2018 Profitability ratios EBIT margin 9% 7% EBITDA margin 12% 11% ROCE 4% 3% ROE 4% 3% Liquidity ratios Current ratio 1.0 1.1 Debt ratios Net debt (PLNm) 336 289 Net debt/12M EBITDA 2.4 1.3 13% 51% 36%

FINANCING STRUCTURE

corporate loans

• verdrafts and multi-purpose credit

facilities

• ther financial assets

Grupa Azoty Zakłady Azotowe Kędzierzyn S.A.

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GRUPA AZOTY ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

Grupa Azoty Kędzierzyn financial highlights

483 394 442 502 495 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

REVENUES *

81 20 61 49 75 81 20 61 52 76

16.7% 5.1% 13.8% 9.8% 15.2%

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 EBITDA EBITDA (adjusted) ** EBITDA margin 48

• 3

24 12 36 48

• 3

24 14 37 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Net profit Net profit** (adjusted)

• * Adjusted for marketing bonuses
• ** Adjusted for impairment losses on non-current assets

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GRUPA AZOTY ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

Q1 2018 revenue structure by segments

CHANGE IN REVENUE Q1 2018 vs Q1 2017

OXO 49% Fertilizers 45% Other 6%

• 8%

Fertilizers OXO +14% Other

• 1%

GRUPA AZOTY GROUP

36

GRUPA AZOTY ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

Group Azoty Kędzierzyn: financial performance by segment

Target markets Fertilizers

(PLNm) Q1 2017 Q1 2018 Q/Q change Fertilizers Revenue 243 224

• 19

 EBITDA 53 40

• 13

 EBITDA margin 22% 18%

• 4

 OXO Revenue 211 241 +30 ↗ EBITDA 13 21 +8 ↗ EBITDA margin 6% 9% +3 ↗

Poland 81% EU 19%

OXO

Poland 17% EU 69% Other Europe 12% Other 2%

Volumes

• 2%
• 4.1%

150 170 190 210 230 250 270 290 310

Fertilizers Q1 2016 Q1 2017 Q1 2018

10 20 30 40 50 60 70

OXO Q1 2016 Q1 2017 Q1 2018

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Grupa Azoty Kędzierzyn financials as at March 31st 2018

GRUPA AZOTY ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

FINANCIAL RATIOS

Q1 2017 Q1 2018 Profitability ratios EBIT margin (%) 11.9% 9.4% EBITDA margin (%) 16.6% 15.2% ROCE (%) 3.8% 3.0% ROE (%) 3.9% 3.0% Liquidity ratios Current ratio 1.5 1.6 Debt ratios Total debt ratio (%) 35.4% 36.0% Net debt (PLNm) 126 195 Net debt/12M EBITDA 0.65 0.93 58 239

• verdrafts and multi-

purpose credit facilities corporate loans

AVAILABLE FUNDS/UNDRAWN FACILITIES

(mln PLN)

corporate loans 94.7%

• verdrafts

and multi- purpose credit facilities …

• ther

financial assets 0.0%

FINANCING STRUCTURE

Thank you for your attention For more information, visit www.grupaazoty.com Contact: ir.tarnow@grupaazoty.com

39

GRUPA AZOTY GROUP

Disclaimer

The information presented below has been prepared by the Grupa Azoty Group (the “Group”) solely for the purpose of its presentation to investors and market analysts on April 19th 2018 (the “Presentation”). By participating in the meeting at which the Presentation is presented or by referring to this Presentation, you agree to the following specific restrictions and disclaimers. This Presentation does not constitute or form any part of, and should not be considered as, an offer to sell or as an offer to subscribe for, or as a guarantee to purchase or acquire in other way, any securities of any company of the Group. Neither this Presentation nor any part hereof may form the basis of, or be relied upon in connection with, any subscription for any securities of the Group, or their

• acquisition. Neither this Presentation nor any part hereof may form the basis of, or be relied upon in connection with, any investment agreement, commitment or decision relating to securities of the

Group companies. This Presentation does not constitute a recommendation regarding any securities of the Group companies. No statement or assurance, expressed or implied, has been made by or on behalf of the Group or any of its shareholders, members of its bodies, officers, employees, agents or advisers or any other person, as to the accuracy, completeness or reliability of information or

• pinions contained in this Presentation.

This Presentation may contain forward-looking statements. Forward-looking statements are different from statements of historical facts. Statements containing such words as "expects", "intends", "plans", "believes", "anticipates", "will", "aims", "can", "would", "could", "continues" or similar words are examples of such forward-looking statements. Forward-looking statements include statements about the financial performance, business strategy, plans and objectives of the Group (including development plans relating to the Group). All forward-looking statements contained in this Presentation relate to matters involving known and unknown risks, issues that are impossible to predict, and other factors. Actual results and achievements of the Group may be materially different from those described in statements concerning the past, and from the results and achievements of the Group in the past. Forward-looking statements are made based on various assumptions of future events, including numerous assumptions regarding present and future business strategies of the Group and its future business environment. Although the Group believes that its estimates and assumptions are reasonable, they may prove to be incorrect. The information, opinions and forward-looking statements contained herein are valid only on the date of this Presentation and are subject to change without

• notice. The Group and its advisers are not obliged to publish any updates or modify any information, data or statements contained in this Presentation in the event of a change of strategy or the

intentions of the Group, or of facts or circumstances that will have an impact on the strategy or intentions of the Group, unless such an obligation arises under law. Please note that the only reliable source of data on the Group's financial results, forecasts, events and indicators of the Group are the current and periodic reports released by the Group as part of its disclosure obligations under Polish

• law. Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person shall be liable for any loss arising from the use of this

Presentation or its contents or otherwise arising in connection with this Presentation. Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person shall be required to provide the recipients of this Presentation with any additional information or to update this Presentation. This Presentation contains information on the chemical industry in Poland and globally, including information on market shares of the Company and some of its competitors. The source of such information is always provided in this Presentation and the Group or any other entity acting on behalf of the Group has independently verified the information referred to above. This Presentation is not intended for distribution to or use by any person or any entity in any jurisdiction where such distribution or use would be contrary to local law or oblige the Group or any of its affiliates to obtain an authorization or licence, or to comply with the registration requirements under applicable laws. Neither this Presentation nor any part hereof may be copied or transmitted into the United States of America, and cannot be disseminated, directly or indirectly, in the United States of America. Failure to comply with this restriction may constitute a violation of U.S. securities laws. Whoever comes into possession of this Presentation is required to inform themselves of, and to observe, all of the above restrictions. The securities referred to in this document have not been and will not be registered in accordance with the US Securities Act of 1933 and may not be offered or sold in the United States of America, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Act.

40

GRUPA AZOTY S.A.

APPENDIX 1

THE PARENT

41

GRUPA AZOTY S.A.

Grupa Azoty S.A. financial highlights (standalone)

479 377 408 418 476 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

INCOME

86 59 60 40 86

18.0% 15.6% 14.7% 9.6% 18.1%

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 EBITDA EBITDA (adjusted) * EBITDA margin 45 283 27 46 51 18 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Net profit Net profit* (adjusted)

* Net profit adjusted for dividends in Q2 2017 and impairment losses on Grupa Azoty Siarkopol shares in Q4 2017.

42

GRUPA AZOTY S.A.

Agro Fertilizers

Poland 74% EU 18% Other 8%

Target markets

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 212 185

• 13%

 Nitrogen fertilizers 194 165

• 15%

 EBITDA 41 27

• 34%

 EBITDA margin 19.3% 14.6%

• 4.7 pp



Volumes (‘000 tonnes)

300

Nitrogen fertilizers Q1 2016 Q1 2017 Q1 2018

• 15%

43

GRUPA AZOTY S.A.

Plastics

Poland 17% EU 79% Other 4%

Target markets

(PLNm) Q1 2017 Q1 2018 Q/Q change Segment revenue, including: 255 272 7%  Polyamide* 153 238 56%  Caprolactam 78 8

• 90%

 EBITDA 37 49 32%  EBITDA margin 14.5% 18.0% 3.5 pp 

Volumes (‘000 tonnes)

53%

• 92%

10 20 30 40

Polyamide Caprolactam Q1 2016 Q1 2017 Q1 2018

* Including modified

44

Part or section title

Financial ratios

• 100

100 200 300 400 500

• 500

500 1 000 1 500 2 000 2 500

Revenue and net profit

Income Net profit

(mln PLN)

• 200
• 100

100 200 300 400 500 600 700

EBITDA and net debt

Net debt (PLNm)

45

Part or section title

Stock price

10 20 30 40 50 60 70 80 90 100 110 500 1 000 1 500 2 000 2 500 3 000 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

Wolumen Cena

Growth since June 30th 2008: Change since January 3rd 2018: 221%

• 26%

PLN 113.00 PLN 6.00 Max (December 8th 2015) Min (February 3rd 2009)