Presentation of Q Results. November 14th 2013

Transcription

1 Presentation of Q3 Results November 14th

2 Agenda General Information 3 Azoty Group 13 GA Puławy Group 24 GA Police Group 35 ZAK S.A. Group 47 Annex 1 Market Environment 51 Annex 2 Grupa Azoty S.A. (separate data) 61

3 General Information

4 Azoty Group Determinants of the Group's performance in Jan-Sep Jan-Sep Jan-Sep Grupa Azoty's higher revenue and net result attributable to acquisition Price pressures in the Fertilisers Segment (during the whole year for NPK fertilisers and in Q3 for nitrogen fertilisers) and the Chemicals Segment (mainly OXO), offset by lower prices of key raw materials (phosphorites 26%, potassium salt 9%, propylene 5%) Continued high prices of benzene and adverse trends in plastics (further decline of caprolactam/ benzene margins) Extended seasonal maintenance shutdowns Revenue 5,512 7,473 Net profit Equity 3,455 6,267 Average headcount * Azoty Group 8,722 13,175 Parent 2,074 2,081 Azoty Group year on year; data ex Grupa Azoty PUŁAWY. * As at September 30th 4

5 Key Events Q3 Update of the Azoty Group Strategy for Inclusion in the WIG30 index on the WSE Acquisition of 55% of shares in AIG, Senegal Agreement on buying of 85% of shares in Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. Consolidation of the Azoty Group's Fundusze TFI PZU; 8.76% EBRD; 5.75% Other; 19.33% Aviva OFE Aviva BZ WBK; 7.86% Shareholding structure Norica Holding S.à.r.l % Number of shares: 99,195,484 State Treasury; 33.00% ING Pension Fund; 9.96% Azoty Group 5

6 Core Business of the Azoty Group African Investment Group S.A. Grupa Azoty POLICE Urea NPK, NP, NS Ammonia TiO 2 Grupa Azoty ATT Polymers PA 6 ZMPP Port BBM Terminal Fosfory NPK, P Navitrans Logistics Grupa Azoty PUŁAWY AN, RSM, Urea Melamine CPL Siarkopol S.A. Sulphur Grupa Azoty ZAK S.A. AN, CAN Urea OXO alcohols Plasticisers Z.A. Chorzów S.A. NPK, N, P, K Logistics Production Grupa Azoty S.A. AN, CAN ASN, AS CPL, PA 6, POM Compounding Azoty Group 6

7 Strong Position in the Target Markets Almost 90% of revenue derived from sales to EU markets North America 1% +0.1% European Union 32% -6% 1 Non-EU countries 2% -1% Asia 5% +3% Poland 56% South America 4% +0.1% Africa 1% -1% +5% Jan-Sep Jan-Sep 2 Azoty Group 7 1 Excluding Poland 2 Jan-Sep data ex Grupa Azoty PUŁAWY

8 Capital Expenditure Fertilisers segment Liquid and solid fertilisers based on UREA and AS Puławy Ammonia - a new ammonia storage facility (Puławy) and modernisation of reactors (Tarnów, Police) Plastics segment Sulphuric acid modernisation C-none capacity increase and cost reduction Tarnów Chemicals OXO products launch of new ester (terephthalate) Kędzierzyn and fat processing plant Chorzów Other Activities Energy flue gas desulphurisation unit Puławy flue gas purification node - Police PLNm Budget Expenditure incurred until Sep Azoty Group 8

9 Upstream Implementation of the Azoty Group Strategy Acquisitions Acquisition of 55% of shares in African Investment Group S.A., Senegal Agreement on buying of 85% of shares in Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. Effects: -Diversification of sulphur supplies -Lower production costs on NPK fertilisers, caprolactam and PA 6 -Optimisation of transport expenses -Value chain extended to include own raw material sources -Update of the Azoty Group Strategy for Azoty Group

10 Synergies Fertilisers Energy Gas Common trading policy implemented across the Group Steps taken to optimise product distribution Rules for joint purchases of electricity defined Joint electricity purchase for 2014 made Rules for joint purchases of natural agreed upon Additional capacities acquired at the border Synergies computed for a range of business and market scenarios Value of synergies generated until Sep ~72 PLNm Raw materials Logistics Rules for joint purchases of raw materials and packaging agreed upon and implemented Improved utilisation of rolling stock across the Group * Works continues on the project. Azoty Group

11 Consolidation Key Projects in Q3 1) Operationalisation of the Group management model OBJECTIVES Approved Group management model, based on process leaders (members of the Management Board supervising the processes) Defined decision-making paths and transparency of decision making Unified incentive system (to be implemented in Q1- Q2 2014) supporting the Azoty Group strategy and objectives 2) Definition of a list of strategic projects and their roadmapping, to ensure process supervision Azoty Group Oversight over strategic projects and their reviewed assumptions (business effects, budgets, KPI, schedules, division of responsibilities); the central PMO team to provide regular updates on project implementation status Verified list of Management Board's priorities

12 Companies of the Azoty Group Listed on the WSE Grupa Azoty PUŁAWY HI (Nov 6 ): PLN LO (Feb ): PLN Change on Nov : % Change YTD: % Grupa Azoty POLICE HI (May 31 ): PLN LO (Feb ): PLN 4.00 Change on Sep : % Change YTD: % Grupa Azoty S.A. HI (May 21 ): PLN LO (Feb 3rd 2009): PLN 6.00 Change on Jun : % Chnage YTD: % Azoty Group 12

13 Azoty Group

14 Key Ratios since the 2008 IPO - Quarterly * Revenue and net profit Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Q2 Q3 Q4 Q1 Q2 Q Revenue Net profit EBITDA and net debt Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 PLNm Net debt EBITDA * Azoty Group Azoty Group 14

15 Azoty Group: Key Financials PLNm Jan-Sep Jan-Sep Changes y/y Q3 Q4 Q1 Q2 Q3 Revenue 5,512 7,473 1,697 1,587 2,678 2,569 2,226 EBIT EBITDA 551 1, Net profit ,2 Net profit* ,2 Structure of Group's consolidated revenue in Jan-Sep Grupa Azoty S.A.; 1,134 ZAK Group; 1,512 Police Group; 1,856 Puławy Group; 2,652 Other 319 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% data ex Puławy Group *Adjusted for one-offs PLN 446m gain from bargain purchase of shares in Grupa Azoty PUŁAWY Azoty Group 15

16 Azoty Group: Performance by Segments Segment (PLN m) Revenue Jan-Sep Revenue Jan-Sep EBIT Jan-Sep EBIT Jan-Sep Agro Fertilisers 3,225 4, Plastics 892 1, Chemicals 814 1, Pigments Other EBITDA bridge mln PLN 551 Jan-Sep 213 Agro Fertilisers *PLN 446m gain from bargain purchase of shares in Grupa Azoty PUŁAWY data ex Puławy Group Azoty Group Other Chemicals Pigments Plastics Jan-Sep One-offs* Jan-Sep increase decrease

17 Azoty Group: Balance Sheet Assets YTD, PLNm Non-current assets 66% Equity and liabilities YTD, PLNm Equity 68% 0% Inventories 11% Receivables 14% Other current assets 9% Borrowings 9% Non-current assets Jan-Sep Jan-Sep Change 3,535 6,226 76% k Current assets 1,805 3,104 72% k Including cash and cash equivalents % k Total assets 5,340 9,330 75% k Jan-Sep Jan-Sep Change Equity 3,455 6,267 81% k Liabilities, incl.: 1,886 3,063 62% k borrowings % k Net debt 322 other fin. liab % m Other liabilities 23% Total equity and liabilities 5,340 9,330 75% k data ex Puławy Group Azoty Group 17

18 Azoty Group: Ratios Profitability Liquidity Debt Ratios Jan-Sep Jan-Sep EBIT EBITDA ROCE ROE Liquidity ratio I Debt ratio Net debt (PLNm) Net debt/ebitda data ex Puławy Group Azoty Group 18

19 PRO FORMA DATA* Azoty Group: Agro Fertilisers (PLNm) Q3 Q Jan- Sep Jan- Sep Change Revenue from key products 1, ,796 3,528-7% NPK , % Volumes AN % Urea % UAN % CAN % % AN Ammonia % 600 NPK Globally, revenue down by ca. 10%, mainly on bad weather conditions affecting sales volumes (-8% in total) Unfavourable supply situation in compound fertilisers (mainly DAP) affecting NPK prices and margins Higher ammonia prices up product s share in total revenue UAN Urea CAN Ammonia *Includes PUŁAWY Group's sales from January 0 tt Jan-Sep Jan-Sep Azoty Group 19

20 PRO FORMA DATA* Azoty Group: Plastics (PLNm) Q3 Q3 Jan- Sep Jan- Sep Change Volumes Revenue from key products ,193 1,019-15% Polyamide % Caprolactam % 80-6% 70 Economic slowdown and intensified price competition depress prices of key Polyamide products (polyamide by 9%, caprolactam 40 by 10%) 30 Caprolactam Jan-Sep Jan-Sep *Includes PUŁAWY Group's sales from January Azoty Group 20 tt

21 PRO FORMA DATA* Azoty Group: Chemicals (PLNm) Q3 Q3 Jan- Sep Jan- Sep Change Revenue from key products ,203 1,191-1% Volumes OXO % Urea, technical grade % % Melamine % 300 Stronger OXO sales driven by volumes (approx. 7%), with prices down by 6% on average (Isobutanol down by 22%) Melamine OXO products Higher revenue on melamine sales driven 150 by strong price increases due to limited supply of the product across markets 100 Urea, technical grade 50 0 Jan-Sep Jan-Sep tt *Includes PUŁAWY Group's sales from January Azoty Group 21

22 Azoty Group: Pigments (PLNm) Q3 Q3 Jan- Sep Jan- Sep Change Revenue from key products % Titanium white % 35 Volumes 30 Slowdown in titanium white market 25 Titanium white Volumes relatively flat despite difficult market conditions and price decline Profitability in Q3 improved y/y Jan-Sep Jan-Sep tt Azoty Group 22

23 Azoty Group: Cost Structure Cost structure by nature of expense % Other Depreciation and amortisation 12% Other 4% Raw materials and consumables 5% Depreciation and amortisation Salaries and wages Services Salaries and wages 14% Services 16% Gas 49% PLNm Jan-Sep Jan-Sep Gas Raw materials and consumebles Higher costs y/y an effect of the Puławy acquisition (depreciation/amortisation, labour) and growing prices of key raw materials (mainly oil derivatives) Higher costs of services related primarily to organisation of acquisition processes (including the share issue) and consolidation within the Group data ex Puławy Group Azoty Group 23

24 Grupa Azoty PUŁAWY Group

25 Grupa Azoty PUŁAWY Group: Key Events Execution of the consolidation process Management Board recommends dividend for / at PLN 8.55 per share Shareholding structure Other shareholders 4.02% GZNF Fosfory and KGHM executed letter of intent for joint development of mineral deposits Stearine production facility placed in service Grupa Azoty S.A % Grupa Azoty PUŁAWY Group 25

26 Key Factors Affecting the Group s Performance* Lower revenue (down PLN 37.9m, i.e. 4.3%), including: change of volumes sold revenue up 2.8%, change of prices revenue down 7.1%. Cost of key raw materials (natural gas, coal, electricity, benzene, sulphur) down PLN 18.6m (4.2%), including: change of volumes costs up 1.5%; change of prices costs down 4.3 %. *Year on year Grupa Azoty PUŁAWY Group 26

27 Grupa Azoty PUŁAWY Group: Key Financials PLNm Q1 12/13 Q3 Q1 13/14 Q3 Change y/y Q1 12/13 Q3 Q2 12/13 Q4 Q3 12/13 Q4 12/13 Q1 Q2 Revenue EBIT EBITDA Net profit Structure of Group s consolidated revenue in Q1 /2014 (Q3 ) % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% mln PLN Grupa Azoty PUŁAWY Group Grupa Azoty PUŁAWY S.A. GZNF Fosfory ZA Chorzów Other 27

28 Grupa Azoty PUŁAWY Group: Key Financials PLNm Q1-Q3 Q1-Q3 Change y/y Q1 12/13 Q3 Q2 12/13 Q4 Q3 12/13 Q4 12/13 Q1 Q2 Revenue 3,009 2,875 3, , EBIT EBITDA Net profit Structure of Group s consolidated revenue in Q1-Q , % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% mln PLN Grupa Azoty PUŁAWY Group Grupa Azoty PUŁAWY S.A. GZNF Fosfory ZA Chorzów 28

29 Grupa Azoty PUŁAWY Group: Performance by Segments Segment EBITDA bridge Revenue Q1 12/13 Q3 Revenue Q1 13/14 Q3 EBIT Q1 12/13 Q3 EBIT Q1 13/14 Q3 Agro Chemicals Energy Other mln PLN Q2 Agro Chemicals Energy Other Unallocated Q3 55 Grupa Azoty PUŁAWY Group 29

30 Grupa Azoty PUŁAWY Group: Performance by Segments Segment Revenue Q1-Q3 Revenue Q1-Q3 EBIT Q1-Q3 EBIT Q1-Q3 Agro 1,935 1, Chemicals Energy Other EBITDA bridge Q1-Q mln PLN Q1-Q2 Agro Chemicals Energy Other Unallocated Q1-Q3 Grupa Azoty PUŁAWY Group 30

31 Grupa Azoty PUŁAWY Group: Balance Sheet Assets YTD, PLNm Non-current assets 59% Inventories 10% Receivables 16% Other current assets 15% Non-current assets Current assets, incl.: cash and cash equivalents Q1 12/13 Q3 Q1 13/14 Q3 Change 1,815 2, % 1,439 1, % % Total assets 3,254 3, % Equity and liabilities YTD, PLNm Q1 12/13 Q3 Q1 13/14 Q3 Change Net debt Equity 2,494 2, % Equity 79% Borrowings 2% Liabilities, incl.: % borrowings % Other liabilities 19% Total equity and liabilities other % 3,254 3, % Grupa Azoty PUŁAWY Group 31

32 Grupa Azoty PUŁAWY Group: Ratios Ratios Q1 12/13 Q3 Q1 13/14 Q3 Profitability EBIT 4.2% 2.2% EBITDA 7.6% 6.5% ROCE 1.4% 0.6% ROE 1.4% 0.7% Liquidity Debt Liquidity ratio I Debt ratio 23.4% 21.1% Net debt* (PLNm) (452.15) (420.30) *Net debt (borrowings cash and cash equivalents) Grupa Azoty PUŁAWY Group 32 32

33 Grupa Azoty PUŁAWY Group: Ratios Ratios Q1-Q3 Q1-Q3 Profitability EBIT 13.7% 11.1% EBITDA 16.6% 14.6% ROCE 15.4% 10.9% ROE 16.0% 10.6% Liquidity Debt Liquidity ratio I Debt ratio 23.4% 21.1% Net debt* (PLNm) (452.15) (420.30) *Net debt (borrowings cash and cash equivalents) Grupa Azoty PUŁAWY Group 33 33

34 Grupa Azoty PUŁAWY Group: Agro (PLNm) Q3 Q3 Q1-Q3 Q1-Q3 Change Revenue , , % Nitrogen fertilisers , , % Phosphatic and compound fertilisers % Revenue 63% Other products and services % Merchandise % Volumes EBITDA margin 16.8% 13.8% 23.6% 24.5% 0.9 pp tt 600 Ammonium nitrate (PULAN ) In Q3 prices of nitrogen and phosphate fertilisers retreated, and were down y/y UAN in conv. to 32% (RSM ) Urea (PULREA ) Ammonium sulphate (PULSAR, ammonium sulphate with IOS) 0 Q1-Q3 Q1-Q3 Phosphatic and compound fertilisers Grupa Azoty PUŁAWY Group 34

35 Grupa Azoty PUŁAWY Group: Chemicals (PLNm) Q3 Q3 Q1-Q3 Q1-Q3 Change Revenue 33% Revenue % MELAMINE TM % CAPROLACTAM TM % Urea (PULREA, PULNOX ) % Other products and services % Merchandise % Volumes MELAMINE TM EBITDA margin 1,4% 5.1% 9.5% 9.4% 0.1 pp tt CAPROLACTAM TM 60,00 Q3 vs. Q3 Comparable prices of caprolactam 40,00 20,00 Urea (PULREA, PULNOX for 100% solution equivalent) Hydrogen peroxide (for 100% solution equivalent) AdBlue (AdBlue ) Strong rise in melamine prices 0,00 Q1-Q3 Q1-Q3 Sulphuric acid Grupa Azoty PUŁAWY Group 35

36 Grupa Azoty PUŁAWY Group: Energy (PLNm) Q3 Q3 Q1-Q3 Q1-Q3 Change Revenue % Electricity % Distribution of electricity % Revenue 2% 6% EBITDA Heat % Other products and services % Merchandise % EBITDA margin 28.1% 40.9% 32.2% 43.1% 10.9 pp 600 Volumes Electricity MWH Prices of gas bought from PGNiG down by about 3.1% since 1st January. Diversified gas supplies (contract with Egesa Grupa Energetyczna S.A. and RWE Supply & Trading GmbH). In Q3, gas deliveries from non-pgnig sources represented 8.9% of the total. Larger share of cheaper coal with high sulphur content, following launch of the flue gas desulphurisation unit Q1-Q3 Q1-Q3 Heat GJ Certificates of origin of electricity Grupa Azoty PUŁAWY Group 36

37 Grupa Azoty PUŁAWY Group: Cost Structure PLNm -0.1% Cost structure by nature of expense Other Depreciation and amortisation Salareis and wages Services Salaries and wages 11% Depreciation and amortisation 4% Services 12% Other 4% Raw materials and consumables 33% Gas 500 Raw materials and consumables Gas 36% Lower costs of raw materials and consumables, mainly on reduced consumption and lower prices of electricity, coal, and natural gas 0 Q1-Q3 Q1-Q3 Lower costs of services Higher other expenses, depreciation/amortisation, and labour costs Grupa Azoty PUŁAWY Group 37

38 Grupa Azoty POLICE Group

39 Grupa Azoty POLICE Group: Key Events Acquisition of shares in African Investment Group S.A. (with access to phosphorite reserves in Senegal) own reserves of strategic raw material and better negotiating position vis a vis other suppliers. Launch of production from the LAM LAM field in Q3 the first tranche of phosphate rock delivered to Police Launch of fertiliser exports to Senegal and start of the distribution process Negotiated lower prices of key raw materials, including phosphate rock, potassium salt, sulphate slag, ilmenite, sulphur, and sulphuric acid State Treasury 5.01% ARP S.A. 8.77% OFE PZU "Złota Jesień" 12.87% Shareholding structure Other shareholders 7.35% Grupa Azoty S.A % Grupa Azoty POLICE Group 39

40 Grupa Azoty POLICE Group: Key Events Despite the challenging market environment, POLICE reported net profit of PLN 7m Unfavourable external and internal factors included: Price war between potassium salt producers, leading to lower prices of NPK fertilisers and limited demand in anticipation of market-wide decline - the effects of the falling potassium salt prices were not seen until Q4 On the domestic market - drop in grain prices recorded over a few months, affecting the ratio of grain prices to prices of fertilisers Maintenance stoppages of nitrogen units, resulting in reduced output and higher costs. Oversupply depressed urea prices Relatively low prices of ammonia Grupa Azoty POLICE Group 40

41 Grupa Azoty POLICE Group: Key Financials PLN m Jan-Sep Jan-Sep Changes y/y Q3 Q4 Q1 Q2 Q3 Revenue 2,409 1, EBIT EBITDA Net profit Continued ability to generate positive results despite unfavourable market conditions Improved performance by the Pigments Segment on both Q2 and Q3 Grupa Azoty POLICE Group 41

42 Grupa Azoty POLICE Group: Performance by Segments Segment EBITDA bridge Revenue Jan-Sep Revenue Jan-Sep EBIT Jan-Sep EBIT Jan-Sep Fertilisers 2,021,187 1,662,074 90,069 73,022 Pigments 329, ,797 39, Other 58,375 36, , mln PLN Jan-Sep Other Fertilisers Pigments Jan-Sep Grupa Azoty POLICE Group 42

43 Grupa Azoty POLICE Group: Ratios Jan-Sep Jan-Sep Ratio Profitability EBIT margin 5% 4% EBITDA margin 8% 7% Net profit margin 4% 3% ROCE 11% 6% ROE 11% 6% Liquidity Liquidity ratio I Debt Debt ratio 35% 41% Net debt* (PLNm) Net debt/ebitda 25% 125% * Net debt = borrowings + other financial liabilities cash and cash equivalents Grupa Azoty POLICE Group 43

44 Grupa Azoty POLICE Group: Fertilisers (PLN m) Q3 Q3 Jan- Sep Jan- Sep Change Q3 Revenue ,021 1,662-35% EBITDA 83% Compound fertilisers ,408 1,071-38% Urea % Ammonia % Other % Revenue 85% EBITDA margin 7% 3% 7% 7% Volumes Weaker demand on fertiliser markets Product prices declined across markets Lower prices of key feedstocks for compound fertilisers (phosphorites, sulphur, and potassium salt) had positive effect on cost base Maintenance stoppages at urea and ammonia units tt Jan-Sep Jan-Sep Compound fertilisers Urea Ammonia Other Grupa Azoty POLICE Group 44

45 Grupa Azoty POLICE Group: Pigments (PLN m) Q3 Q3 Jan- Sep Jan- Sep Change Q3 Revenue % Revenue 14% EBITDA 11% Titanium white % Other EBITDA margin 5% 11% 16% 6% Lower YTD results in the Pigments Segment, improvement quarter on quarter Sales of titanium white maintained Lower prices of raw materials used for production of titanium white 35,0 30,0 25,0 20,0 Volumes Titanium white Iron sulphate In Q3 titanium white prices up on Q2 15,0 Market environment stabilised 10,0 5,0 0,0 tt Jan-Sep Jan-Sep Grupa Azoty POLICE Group 45

46 Grupa Azoty PUŁAWY Group: Cost Structure -16% Structure of cost savings 2500 Services 7% 2000 Other Raw materials and consumables 93% PLNm Jan-Sep Jan-Sep Depreciation and amortisation Salaries and wages Services Gas Raw materials and consumables Key causes of the change: Negotiated lower prices of strategic raw materials (except natural gas) Fertiliser production volumes adjusted to reduced demand Higher production of ammonia (increased consumption of natural gas) Transport costs moved to raw materials and consumables (lower cost of services) Grupa Azoty POLICE Group 46

47 Grupa Azoty ZAK Group

48 Grupa Azoty ZAK Group: Key Financials PLNm Jan-Sep Jan- Sep Changes y/y Q3 Q4 Q1 Q2 Q3 Revenue 1,616 1,551 EBIT EBITDA Net profit Structure of Group s consolidated revenue in Jan-Sep Grupa Azoty ZAK S.A. 99.8% Group companies 0.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Grupa Azoty ZAK Group 48

49 Grupa Azoty ZAK Group: Balance Sheet Assets YTD, PLNm Jan-Sep Jan-Sep Change Non-current assets 71% Inventories 7% Non-current assets 1, , % m Current assets, inlc.: Equity and liabilities YTD, PLNm Equity 72% Receivables 18% Other current assets 4% Borrowings 3% cash and cash equivalents % m % m Total assets 1, , % m Jan-Sep Jan-Sep Change Equity 1, , % k Liabilities, incl.: % m borrowings % m Net debt (-)5.0 Other liabilities 25% other financial liabilities Total equity and liabilities % m 1, , % m Grupa Azoty ZAK Group 49

50 Disclaimer The information presented below has been prepared by Grupa Azoty S.A. (the Company ) solely for the purpose of presentation to investors and market analysts on November 14th (the Presentation ). By participating in the meeting at which the Presentation is presented or by referring to the following 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 purchase guarantee to acquire in other way any securities of the Company or any companies of its group ("Group"). Neither this presentation nor any part thereof may form the basis of, or be relied upon in connection with, any subscription for any securities of the Company or the Group, or their acquisition. Neither this Presentation nor any part thereof may form the basis of or be relied upon in connection with any contract or commitment or investment decision relating to securities of the Company or Group companies. This presentation does not constitute a recommendation regarding any securities of the Company or Group companies. No statement or assurance, expressed or implied, has been made by or on behalf of the Company 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 opinions contained in this Presentation. The matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are different from statements of historical fact. Statements containing such words as "expects", "intends", "plans", "believes", "anticipates", "will", "aims", "can", "would", "could", "continues" or words similar in character are determinants of such forward-looking statements. Forward-looking statements include statements about the financial performance, business strategy, plans and objectives of the Company (including development plans relating to the Company). 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 Company may be materially different from those described in the declarations of the past, and the results and achievements of the Company 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 Company and its future business environment. Although the Company 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 Company and its advisors are not obliged to publish any update or modify any information, data or statements contained in this Presentation in the event of a change of strategy or the intentions of the Company, or of facts or circumstances that will have an impact on the strategy or intentions of the Company, unless such an obligation arises under law. Please note that the only reliable source of data on the Company's financial results, forecasts, events and indicators of the Company are the current and periodic reports released by the Company as part of its disclosure obligations under Polish law. Neither the Company 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 due to the use of this Presentation or its contents or otherwise arising in connection with this Presentation. Neither the Company 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 update this Presentation. This Presentation contains information on the chemical industry in Poland and abroad, including information regarding the participation of the Company and certain of its competitors in the market. The source of this information is always provided in this Presentation and the Company or any other entity acting on behalf of the Company has independently verified the information referred to above. This Presentation is not 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 Company or any of its affiliates to obtain authorization, license or make grant from the registration requirements under applicable laws. Neither this Presentation nor any part thereof 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. Persons who come into possession of this Presentation should follow all the above limitations. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of Any such securities may not be offered or sold in the United States, except pursuant to an exemption or in a transaction not subject to the registration requirements of the Act.

51 Thank you for attention.. For more information visit

52 ANNEX 1 Market Environment

53 Macroeconomic Environment in Q3 Financial parameters The euro strengthened against the Polish złoty by 2.6% The US dollar weakened against the Polish złoty by 2.9% WIBOR 1M down by 2.23 percentage points CPI at 1.1% vs. 3.9% in Q3 PPI at -1.1% vs. 2.8% in Q3 Daily FX rates, monthly interest rates 5,0 PLN/USD PLN/EUR Interest rates 4,5 4,0 3,5 3,0 2,5 2,0 6,0% 5,5% 5,0% 4,5% 4,0% 3,5% 3,0% 2,5% 53

54 Market Environment: Grains Average rise in milling wheat prices:19% Average rise in corn prices: 11% Average rise in rape prices: 21% Prices on the Polish grain market ,5 4 3,5 3 2,5 2 1,5 1 0,5 0 Ratio: 1 kg N/1kg milling wheat Wheat PLN/t Corn PLN/t Rape PLN/t *Q3 vs. Q3 54

55 Market Environment: Fertilisers (1) Nitrogen fertilisers Average decline of prices of nitrogen fertilisers: 15%* Average decline of prices of nitrogen fertilisers with sulphur: 30%* Market prices of AN, CAN, AS EUR/t sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz 13 Ammonium Nitrate AN EUR/t Calcium Ammonium Nitrate CAN EUR/t USD/t Ammonium Sulphate AS USD/t *Q3 vs. Q3 55

56 Market Environment: Fertilisers (2) Compound fertilisers and their raw materials Average decline of phosphorites prices: 26%* Average decline of potassium salt prices: 17%* Average decline of NP fertilisers prices: 22%* Average decline of NPK compound fertilisers prices: 18%* Market prices of NPK, DAP, phosphorites, potassium salt sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz 13 USD/t USD/t NPK USD/t DAP USD/t Phosphorites USD/t Potassium salt USD/t *Q3 vs. Q

57 Market Environment: Plastics Average decline of petrochemical feedstock prices: 3%* Average decline of liquid caprolactam prices: 6%* Average increase of flaked caprolactam prices: 2%* Average decline of polyamide prices: 6%* Market prices of benzene, phenol, CPL and PA6 sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz 13 EUR/t Benzene EUR/t Liquid caprolactam EUR/t PA6 EUR/t Flaked caprolactam USD/t Phenol EUR/t USD/t *Q3 vs. Q3 57

58 Market Environment: Chemicals (1) Average rise in propylene prices: 8%* Average decline of plasticizer prices: 5%* Average rise in OXO alcohol prices: 1%* Market prices of DEHP, 2-EH and propylene 600 sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz 13 EUR/t *Q3 vs. Q3 DEHP EUR/t 2-EH EUR/t Propylene EUR/t 58

59 Market Environment: Chemicals (2) Average decline of ammonia prices: 30%* Decline of urea prices: 23%* Rise in melamine prices: 26%* Market prices of urea, ammonia and melamine sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz USD/t Urea USD/t Ammonia USD/t Melamine EUR/t EUR/t *Q3 vs. Q3 59

60 Market Environment: Pigments Average decline of titanium white prices: 21%* Average decline of ilmenite prices: 49%* Market prices of titanium white and ilmenite EUR/t sty 12 lut 12 mar 12 kwi 12 maj 12 cze 12 lip 12 sie 12 wrz 12 paź 12 lis 12 gru 12 sty 13 lut 13 mar 13 kwi 13 maj 13 cze 13 lip 13 sie 13 wrz 13 USD/t Titanium white EUR/t Ilmenite USD/t *Q3 vs. Q3 60

61 ANNEX 2 Grupa Azoty S.A. (separate data)

62 Grupa Azoty S.A.: Key Financials PLNm Jan-Sep Jan- Sep Changes y/y Q3 Q4 Q1 Q2 Q3 Revenue 1,526 1, EBIT EBITDA Net profit EBITDA bridge increase decrease mln PLN 178 Jan-Sep Other revenue Volume of raw materials Other expenses Price of raw materials 66 Volume of sales Selling price Jan-Sep Grupa Azoty S.A. 62

63 Grupa Azoty S.A.: Performance by Segments Segment (PLN m) EBITDA bridge Revenue Jan-Sep Revenue Jan-Sep EBIT Jan-Sep EBIT Jan-Sep Fertilisers Plastics Other increase decrease mln PLN 178 Jan-Sep Other Fertilisers Plastics Jan-Sep 66 Grupa Azoty S.A. 63

64 Grupa Azoty S.A.: Fertilisers (PLNm) Jan- Sep Jan- Sep Change Revenue: % CAN % Saletrosan (ASN) % AS % EBITDA margin 14% 11% Volumes EBITDA 77% 43% Revenue Stable sales situation in key product groups, with slight decline of ammonium sulphate prices % CAN ASN AS Decline of segment profitability, mainly on higher prices of purchased ammonia (up approx. 8% y/y) tt 0 Jan-Sep Jan-Sep Grupa Azoty S.A. 64

65 Grupa Azoty S.A.: Plastics (PLNm) Jan- Sep Jan- Sep Change Revenue: % Polyamide % Caprolactam % EBITDA margin 9% -3% 52% Revenue Higher prices of main raw materials (benzene, phenol) by 9% and 7% on average Economic slowdown and intensified price competition depressed prices of key products (polyamide 6 by 10%, caprolactam by 11%) Negative EBITDA margin caused by lower benzene delta caprolactam fell by over 30% Volumes -6% Polyamide 6 Caprolactam Increase of POLYAMIDE 6 sales at the expense of caprolactam, mainly due to IC transaction with ATT Polymers, a subsidiary tt Jan-Sep Jan-Sep Grupa Azoty S.A. 65

66 Grupa Azoty S.A.: Cost Structure % Change y/y Other Depreciation and amortisation 800 Salaries and wages PLNm 600 Services Decrease in variable production costs on lower volume of sales and higher prices of strategic raw materials (gas, benzene, phenol) PLNm Jan-Sep Jan-Sep Gas Raw materials and consumables Higher labour costs caused by structural reorganisation of the Parent as part of the Group consolidation Higher depreciation/amortisation charge following recent investments. Grupa Azoty S.A. 66