SIBUR H1 2012 Operational and Financial Results October 2012
H1 2012: MARKET ENVIRONMENT Macro Data (1) Market Developments (2) Brent Average Exchange Rate Energy Products Basic Polymers USD per bbl USD USD RR/USD 113.6 111.0 +2.3% +7.0% 30.64 28.62 1,000 2,000 750 Propane, CIF NWE 1,500 500 1,000 Butane, CIF NWE H1 2011 H1 2012 H1 2011 H1 2012 LDPE, FOB NWE PP, FOB NWE 250 500 Naphtha, average (CIF ARA, FOB Rotterdam) 0 0 Russian GDP Growth Consumer Price Index 9.5% 4.4% 3.6% 3.8% Synthetic Rubbers Plastics & Organic Synthesis Н1 2011 Н1 2012 H1 2011 H1 2012 USD USD 6,000 2,000 Railway Tariffs Indexation Average Electricity Tariffs 1,500 4,000 RR per kw/hour 1,000 ESBR 1500, FD NEW 8.0% 2,000 PET, FOB Korea 6.0% 500 NR, SMR 20 MEG, FD NWE IIR, CIF East China 1.99 1.89 0 0 H1 2011 H1 2012 H1 2011 H1 2012 (1) Sources: Rosstat, CB RF, Platts, FTS of Russia, SIBUR (2) Sources: CMAI, Platts 2
SIBUR: KEY DEVELOPMENTS IN H1 2012 Credit Ratings Upgrade New Contracts • New supply contracts between SIBUR and NOVATEK, • In September, Moody’s upgraded SIBUR to Ba1 from Ba2 under which SIBUR will deliver to NOVATEK up to 800 with stable outlook mcm of dry gas in Q1 2013 and up to 69,700 mcm between 2013 and 2022 • In August, Fitch upgraded SIBUR to 'BB+' from 'BB‘ with • ZapSibNeftekhim (ZapSib-2) contracts: stable outlook − technology license agreements with LINDE AG (cracker), INEOS (PE production) and LyondellBasell (PP production) Acquisitions and Divestitures − FEED contracts with LINDE AG (cracker), TECHNIP (PE production) and ThyssenKrupp Uhde (PP • In March, SIBUR acquired control over Biaxplen, a production) BOPP-films producer operating three production facilities (78 kmtpa) − Contract with ОАО VNIPIneft - Russia’s leading engineering institution (pre-design and FEED) • In July, SIBUR announced gradual shutdown of its • 10-year supply contract with Gazprom Neft on APG outdated chlorine and caustic soda production in deliveries Dzerzhinsk • Cooperation agreements between SIBUR and Sinopec to set up new JVs for: • In H1, SIBUR received RR 16.3 billion in proceeds – nitrile-butadiene rubber (NBR) and polyisoprene rubber (including dividends and receivables) from sale of non- core businesses (IR) production in Shanghai, based on SIBUR technologies (50 kmtpa) – nitrile rubber in Krasnoyarsk (on the basis of SIBUR’s existing facility, c.50 kmtpa) 3
H1 2012 RESULTS SUMMARY (1) Key Developments: Six months ended Change, % • Revenue growth of 12.6% y-o-y on: RR million except as stated 30 June 2012 30 June 2011 − higher sales of energy products; and Total revenues, including 136,926 121,586 12.6% − consolidation of new businesses in Energy products 63,441 54,907 15.5% petrochemicals… − partially offset by price correction for Petrochemical products 64,426 59,735 7.9% majority of our products in Q2; and Other sales 9,059 6,943 30.5% − decline in synthetic rubbers production due to an unscheduled Operating expenses 23.7% (99,081) (80,122) shutdown • EBITDA decline of 5.1% y-o-y due to: EBITDA 42,562 44,836 (5.1%) − tighter spreads between feedstock EBITDA margin,% 31.1% 36.9% and petrochemical prices − higher transportation and Operating profit 37,845 41,464 (8.7%) repairs&maintenance costs Operating margin,% 27.6% 34.1% − a non-recurring change in treatment of provisions related to staff costs … Profit for the year 29,662 32,499 (8.7%) • H1 2012 profit also affected by non-cash Profit margin,% 21.7% 26.7% FX loss (1) All financial figures for SIBUR in this presentation are based on combined financial information, which excludes the results of the mineral fertilizers and tires businesses, which were divested by SIBUR in December 2011, for all reporting periods. SIBUR’s management believes that the combined financial information provides a proper basis for analysis of the underlying performance of the Company based on fully comparable data for the three and six months ended 30 June 2012 and 2011. SIBUR also publishes consolidated financial statements that include the results of the mineral fertilizers and tires businesses up to the date of their respective divestitures 4
PRODUCTION VOLUMES BY PRODUCT GROUP Feedstock Business Petrochemical Business LPG Naphtha Basic Polymers Synthetic Rubbers (2) kmt kmt kmt kmt 1,916 +6% 1,807 218 (2%) 213 650 +6% 616 196 196 0% H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 Intermediated and Other Natural Gas (1) MTBE Plastics & Organic Synthesis (3) mcm kmt kmt kmt 393 1,709 +10% +39% 1,555 5,438 (2%) 5,324 207 +4% 200 283 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 H1 2011 H1 2012 (1) Including 51% of natural gas produced by the JV with TNK-BP (Yugragazpererabotka) (2) Decline in production was due to accident at our Togliatti production site in April 2012 (3) Growth in production was attributable to consolidation of production volumes of Biaxplen group of companies, OAO Acrylate and OAO Polief 5 5
H1 2012 REVENUE STRUCTURE AND DYNAMICS LPG Basic Polymers Sales Breakdown by Product RR million RR million 26,754 0% 26,691 Processing services, H1 2012 trading and other sales Intermediates and 11,113 +5% 11,653 LPG other chemicals 7 H1 2011 H1 2012 H1 2011 H1 2012 19 8 Basic polymers 9 Naphtha 9 Synthetic Rubbers Naphtha % 14 RR million RR million 8 (11%) 25,008 Plastics & organic 22,303 Natural gas 8 16 1 synthesis products +30% 12,774 9,848 Synthetic rubbers MTBE and other fuels and fuel additives H1 2011 H1 2012 H1 2011 H1 2012 NGL Total revenues RR 136,926 mln • Energy products revenues rose 15.5% y-o-y due to Natural Gas Plastics & Organic Synthesis RR million RR million higher sales of natural gas, MTBE and naphtha +65% 18,872 11,471 +29% 11,491 8,896 price correction in Q2, which partially offset Q1 growth • Petchem revenues increased 7.9% y-o-y on the back of H1 2011 H1 2012 H1 2011 H1 2012 slowdown in demand and price correction in Q2 MTBE Intermediates and Other one-off decline in production of synthetic rubbers due RR million RR million to an unscheduled shutdown in April … (4%) 12,142 11,598 +36% 6,769 9,234 …offset by consolidation of new businesses in plastics and organic synthesis product group H1 2011 H1 2012 H1 2011 H1 2012 6
H1 2012 OPERATING EXPENSES STRUCTURE AND DYNAMICS Feedstock & Materials Transportation Structure of Operating Expenses RR million RR million H1 2012 Other +20% 28,824 Repairs and maintenance 24,037 Feedstock and Depreciation and materials 18,304 +16% 4 3 9 15,782 amortization 29 Goods for resale 7 % 14 H1 2011 H1 2012 H1 2011 H1 2012 Staff costs 18 14 Transportation Energy Staff Costs Total OpEx RR 99,081 mln Energy RR million RR million • Key growth drivers: − Staff costs growth primarily due to change in bonus provision treatment (one-off non-cash increase) and consolidation of 15,563 (9%) 14,204 14,238 +68% new businesses 8,463 − Feedstock & materials increased due to consolidation of paraxylene purchases and higher prices for NGL − Transportation expenses rose on higher export transportation H1 2011 H1 2012 H1 2011 H1 2012 tariffs − Repairs & maintenance increased on new programs Goods for Resale Repairs & Maintenance implementation and change in maintenance schedules RR million • Offsetting factors: RR million − Energy & utilities declined due to efficiency gains − Goods for resale decreased as we ceased trading with and for divested businesses, reduced LPG purchases for resale and 7,721 (13%) 6,700 +127% 3,320 reclassified PP purchases as feedstock & materials due to 1,464 consolidation of Biaxplen H1 2011 H1 2012 H1 2011 H1 2012 7
CASH FLOW STATEMENT HIGHLIGHTS Key Developments: Six months ended Change 30 June 30 June % RR million except as stated 2012 2011 • Net cash from operating activities surged Net cash from operating activities, including 38,847 27,446 41.5% 41.5% y-o-y on Operating cash flows before working capital − flat operating cash flows before 45,455 45,482 (0.1%) changes changes in working capital Changes in working capital 1,140 (11,110) n/m − helped by positive impact from changes in working capital due to Income tax paid (7,748) (6,926) 11.9% better receivables collection Net cash (used in) investing activities, (15,821) (23,124) (31.6%) • Net cash used in investing activities including declined 31.6% y-o-y with Purchase of property, plant and equipment (32,226) (15,599) 106.6% − CapEx growth of 106.6%... Proceeds from disposal of the mineral − … compensated by proceeds from fertilizers businesses and discontinued 16,304 - n/m operations (1) disposal of non-core businesses • Net cash used in financing activities Net cash (used in) financing activities, (33,888) (13,253) 155.7% including grew 155.7% y-o-y due to Effect of exchange rate changes on cash and − net repayment of debt (154) (161) (4.3%) cash equivalents − dividend payment Net (decrease) in cash and cash equivalents (11,016) (9,092) 21.2% (1) Including collection of accounts receivable from the buyers of the mineral fertilizers businesses less income tax of RR 900 million as well as including collection of accounts receivable and proceeds from sale of OAO Kirov Tire Plant and ZAO Voronezh Tire Plant 8
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