COMPANY PRESENTATION November 2018

Transcription

1 COMPANY PRESENTATION November

2 DISCLAIMER The information contained herein pertaining to SIBUR (the "Company") has been provided by the Company solely for use at this presentation. By attending this presentation, or by reading these presentation slides, you agree to be bound by the limitations set out below. This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of, or be relied on in connection with, any contract or investment decision relating thereto. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. The Company accepts no responsibility for any losses howsoever arising, directly or indirectly, from this presentation or its contents. The material contained in this presentation is presented solely for information purposes and is not to be construed as providing investment advice. As such, it has no regard to the specific investment objectives, financial situation or particular needs of any recipient. There may be material variances between estimated data set forth in this presentation and actual results, and between the data set forth in this presentation and corresponding data previously published by or on behalf of the Company. This presentation contains forward-looking statements, including (without limitation) statements containing the words "anticipates," "expects," "intends," "may," "plans," forecasts, "projects," "will," "would", "targets, believes and similar words. These statements are based on the current expectations and projections of the Company about future events and are subject to change without notice. All statements, other than statements of historical fact, contained herein are forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties, such that future events and actual results may differ materially from those set forth in, contemplated by or underlying such forward-looking statements. The Company may not actually achieve or realize its plans, intentions or expectations. There can be no assurance that the Company's actual results will not differ materially from the expectations set forth in such forward-looking statements. Factors that could cause actual results to differ from such expectations include, but are not limited to, the state of the global economy, the ability of the petrochemical sector to maintain levels of growth and development, risks related to petrochemical prices and regional political and security concerns. The above is not an exhaustive list of the factors that could cause actual results to differ materially from the expectations set forth in such forward-looking statements. The Company and its Affiliates are under no obligation to update the information, opinions or forward-looking statements in this presentation. 2

3 A INTRODUCTION TO SIBUR SIBUR AT A GLANCE Key Facts Key Financials Leading EM petrochemical company Would be a top-10 petrochemicals-focused public company by 2017 EBITDA (c.$3 bln, with strong further growth potential on the back of ZapSib - major expansion project) Average EBITDA margin of 35% over last 3 years (30%+ in average since 2010) Production base in West Siberia a region attractive for petrochemical operations thanks to abundant low-cost feedstock (LPG and naphtha) 380 Revenue, RR bln $9.0 bln 544 EBITDA, RR bln 36% 34% 35% 36% $3.2 bln export-bound transportation costs and duty results in attractive prices for the stranded feedstock in West Siberia barriers to entry due to SIBUR s extensive infrastructure in the region Close-to-completion (89%) 2mtpa polyolefin ZapSib project is expected to triple SIBUR s Olefins & Polyolefins (O&P) capacity Total investment budget: $9.0 bln 1, c.70% already financed as of 30-Sep LTM Sep LTM Sep 18 x% EBITDA margin Revenue Split by Segment and Geography, 2017 Our recently launched O&P project in the same geography delivered EBITDA margin of 55% in 2017 Net Debt/EBITDA of 1.6x as of Sep-18; Baa3/BB+ rated by Moody s/fitch Net debt at c.$5 bln corresponds with ZapSib accumulated capex (c.$6 bln as of 30-Sep-18) Asia 6% Europe 30% CIS 5% Other 1% Russia 58% Midstream 41% Other 8% Olefins & Polyolefins 19% Petrochemicals Plastics, Elastomers and Intermediates 32% c.90% dollar-linked revenue 2 Source: The Company data (1) Estimated capex budget. Translated into USD using historical annual average exchange rates. Residual capex Calculated based on exchange rates as of 30 Sep-18: RUB/$ at 65.6, RUB/EUR at (2) Except natural gas 3

4 A INTRODUCTION TO SIBUR BALANCED INTEGRATED BUSINESS MODEL Complementary Petrochemical and Midstream Businesses Operating on Market Terms Enables Smoothing Cash Flow and Earnings Volatility FY 2017 data SUPPLIERS LOGISTICS CLIENTS Oil & Gas companies oil producers gas producers No cannibalization of Midstream as all intersegment flows will be priced at market level and arm s length basis PETROCHEMICALS External revenue RR bln APG (22.3 bcm) NGLs (3.6 mt) Olefins & Polyolefins 1.2 mt 0.7 mt 2 88 LPG and naphtha (2.9 mt) gas processing 6.0 mt NGLs Midstream gas fractionation 7.5 mt mtpa of LPG and 0.3 mtpa of ethane post ZapSib 1 (from external sales to O&P) Plastics, Elastomers & Intermediates 2.4 mt 147 LPG and naphtha (5.8 mt) 135 Natural gas (18.5 bcm) 47 Definitions: Associated petroleum gas (APG) is a by-product of oil production Natural gas liquids (NGLs) include raw NGL, LPG (liquefied petroleum gas) and naphtha. Raw NGL is a by-product of gas production Feedstock includes LPG, naphtha and raw NGL. Composition may vary from year to year depending on market conditions and other limitations Source: The Company data Note: Represented scheme includes LPG and naphtha purchased from third parties for resale, as well as certain LPG and naphtha volumes produced directly from APG processing (1) Capacity additions estimates of the Company of 500 kt for PP, 1,500 kt for PE. (2) JV sales include share of PVC, caustic soda (RusVinyl) and PP (Poliom) sales. (3) Other revenue for the FY 2017 (not indicated on the graph) RR 38 bln 4

5 A INTRODUCTION TO SIBUR THREE INTEGRATED BUSINESS SEGMENTS Petrochemicals Business Olefins & Polyolefins Plastics, Elastomers & Intermediates Midstream Financial Results (2017), RR bln Share in Group Total ZapSib is expected to triple polyolefin capacity 19% 28% 32% 19% Revenue Internal 45 EBITDA External EBITDA Margin 40% (55% Tobolsk PP) Revenue Internal 30 EBITDA External EBITDA margin 20% 41% 56% Revenue Internal 89 EBITDA EBITDA margin 39% External Polypropylene (PP) and derivatives Polyethylene (PE) Olefins (ethylene, propylene) PET, Glycols, EPS, alcohols Elastomers MTBE and fuel additives Intermediates and other chemicals 1 Liquefied petroleum gas (LPG) Natural gas Naphtha Raw natural gas liquids (raw NGL) Key Products Key End Markets % Packaging FMCG Construction Chemicals Hygiene products Traders & Other Chemicals 18 Automotive Construction % 15 Fuels 55 % 13 FMCG 13 Traders & Other Petrochemicals Utilities and fuels Traders & Other Source: The Company data; (1) Incl. PTA Note: External revenues for the FY 2017 totaled RR 455 bln, including O&P (RR 88 bln), PE&I (RR 147 bln), Midstream (RR 184 bln) segments and other revenue (RR 35.4 bln); EBITDA was at RR 161 bln, including O&P (RR 45 bln), PE&I (RR 30 bln), Midstream (RR 89 bln) segments and other (RR (3.5) bln). 5

6 Sales Столбец A INTRODUCTION TO SIBUR STRENGTHENING OF THE POSITIONS IN THE REGION BACKED SUSTAINABLE GROWTH IN PETROCHEMICALS Revenue Dynamics 1 Sales Volumes Dynamics growth SEGMENT growth 2017PF growth PF RR bln mln t OLEFINS & POLYOLEFINS Post-ZapSib 2 6.4x x EBITDA margin 40% (55% Tobolsk PP) x x PLASTICS, ELASTOMERS & INTERMEDIATES EBITDA margin 20% Column1 Column2 1.2x x MIDSTREAM EBITDA margin 39% 2009 LPG, Raw 2013 NGL, Naphtha 2017 Internal sales to petrochemicals External sales x 1.6x Post- ZapSib Source: The Company data Note: 2009 and reporting years 2013 had a different reporting 2017 segmentation. For comparison purposes, the figures for 2009 and 2013 include the following products as per previous reporting system: Olefins & Polyolefins: PE (LDPE), PP, olefins and BOPP-films; Plastics, Elastomers & Intermediates: commodity rubbers, specialty rubbers, thermoplastic elastomers (SBS), PET, glycols, EPS, alcohols, acrylates, plastic compounds, intermediates and other chemicals, MTBE and other fuels and fuel additives; Midstream: LPG, natural gas, naphtha, raw NGL. (1) External. (2) Capacity additions estimates of the Company of 500 kt for PP, 1,500 kt for PE. 6

7 B INVESTMENT HIGHLIGHTS 1 INVESTMENT HIGHLIGHTS A LEADING EMERGING MARKETS PETROCHEMICAL COMPANY Top-10 public petrochemical focused companies as measured by EBITDA Largest player in attractive CIS and Russian markets 2 OPERATES IN GROWING AND DIVERSIFIED END-MARKETS AND GEOGRAPHIES Strong global growth rates across main products (PP & PE) and attractive long-term fundamentals for Polyolefins end-markets growth Structurally undersupplied Asia petrochemical market driving growth for the foreseeable future 3 LOW COST CHEMICAL PRODUCER WITH HIGH BARRIERS TO ENTRY Critical cost advantage supported by one of the lowest feedstock costs globally and facilities location Unique transportation and gas processing infrastructure creating high barriers to entry 5 4 SIGNIFICANT UPSIDE FROM CLOSE TO COMPLETION WORLD-SCALE ZAPSIB PROJECT Close to completion c.$9bln world-scale project that is expected to triple polyolefin capacity with expected transformational impact on SIBUR s long-term earnings and cash flows Further post-zapsib growth projects already identified, including Amur, a project allowing to leverage 3 rd party midstream infrastructure, and other projects SUPERIOR MARGINS AND RESILIENT CASH FLOW GENERATION THROUGH THE CYCLE Balanced business model, benefiting from both O&G and petchem cycles, smoothing CF and earnings volatility High and stable EBITDA margins vs. peers due to natural hedge from commodity prices and FX fluctuations 6 STRONG MANAGEMENT AND SHAREHOLDER TEAM WITH TRACK RECORD OF VALUE CREATION AND TRANSPARENT CORPORATE GOVERNANCE Experienced and committed management team with industry leading expertise, supported by the largest shareholder with a strong track record of leading a large-scale public TSR-focused company Proven track record of completing large-scale value-accretive investment projects within budget and on time 7

8 Midstream Plastics, Elastomers & Intermediates 1 B INVESTMENT HIGHLIGHTS A LEADING EMERGING MARKETS PETROCHEMICAL COMPANY Largest Player in Attractive CIS and Russian Markets SIBUR s Share in Russia s Production SIBUR Production by Key Product in 2017 Current market share / expected market share post ZapSib, % ths t JVs 6 ZapSib expansion (post 2021) Olefins & Polyolefins 1 PP 78% / 84% PE 2 42% / 56% 3 PVC 34% 4 BOPP Films 78% 273 JV ZapSib expansion (post 2021) 312 1, ,773 7 ths t PET 51% 299 MEG 66% 267 EPS 89% 5 98 LPG 45% ths t LPG 7,481 9 Naphtha 5% Naphtha 1,495 Natural Gas 3% mcm Natural Gas 19, Source: IHS Markit, the Company data Note: Market shares calculated based on production volumes of SIBUR and assumed 100% share in respective JVs and respective markets production in Russia. (1) Excluding other olefins which are both used internally and sold to the market. (2) Includes LDPE only for 2017A, and additional capacity of 1,500 ths t includes HDPE and LLDPE. (3) Current market share calculated based on Russian LDPE market. SIBUR market share with ZapSib calculated based on Russian HDPE, LDPE, LLDPE markets. (4) Market share calculated based on the 100% of RusVinyl capacity (300 ths t) and total production capacity in Russia. (5) Company data. (6) Assuming 100% share of SIBUR s in NPP Neftekhimia and Poliom. (7) Capacity additions estimates of the Company of 500 ths t for PP, 1,500 ths t for PE. (8) Assuming 100% SIBUR s share in Rusvinyl. (9) Includes production volumes under processing arrangements. (10) Includes production volumes under processing arrangements. 8

9 2 B INVESTMENT HIGHLIGHTS OPERATES IN GROWING AND DIVERSIFIED END-MARKETS AND GEOGRAPHIES (1/3) PE & PP Are Expected to Continue to Grow Faster than GDP over E with Asia Outperforming the Rest of the World mln t PE & PP Are the Most Widely Used Polymers 2017 World Major Polymers Consumption PVC 19% LDPE 10% PET 9% LLDPE 13% 232 mln t PP 30% HDPE 19% Polypropylene 70 mln t, 30% Polyethylene 97 mln t, 42% (Index) PE & PP Sustainably Grow Faster than World GDP Evolution of PE 1 /PP Consumption 2 and GDP CAGR PP, Global PP, Asia PE¹, Global PE¹, Asia GDP, Global Annual increase PP, Global 5.4% 4.6% 4 mln t PP, Asia 7.8% 5.8% 3 mln t PE 1, Global 4.2% 4.2% 5 mln t PE 1, Asia 7.1% 5.7% 3 mln t GDP, Global 2.7% 3.0% Growth of Chemical Products Consumption Continue to Outperform Other Materials CAGR 10-17, % 4.7% 3.9% 4.4% 3.2% 2.8% 2.7% GDP growth '10-17 = 1.9% 1.8% PP PE Nickel Cement Steel Copper Zinc Source: IHS Markit, AME, Bloomberg, Green Markets (1) PE includes HDPE, LDPE, LLDPE. (2) Virgin plastics demand. 9

10 2 B INVESTMENT HIGHLIGHTS OPERATES IN GROWING AND DIVERSIFIED END-MARKETS AND GEOGRAPHIES (2/3) ZapSib Conveniently Positioned to Supply Both Asian and European Market 1 Being the largest importer of PP and PE, Asian markets drive much of the global supply/demand North America Europe Middle East Russia + CIS Asia 2 Asian markets being by far largest, fastest growing and strongly undersupplied throughout E ZapSib Will Allow to Enter New Market Segments Net Import / (Net Export) by 2028E North America (13) Europe 3.5 Russia + CIS (6) Middle East (25) PE LDPE LLDPE HDPE Films Cable Insulation Injection Molding Pipes Anticorrosion coatings Blow Molding Asia 32 PP PPH 1 ICP 2 RCP 3 Net trade by 2028E Pipes Injection Molding Surplus Shortage X Y X Demand for PP and PE in 2017, mln t Y Annual increase in demand for PP and PE, 17-28E, mln t Compounds Films Caps & Closures Current SIBUR solutions ZapSib solutions Source: IHS Markit, the Company data (1) Homopolymer. (2) Impact copolymer. (3) Random copolymer. 10

11 2017 PE Demand per Capita (kg per person) 2 B INVESTMENT HIGHLIGHTS OPERATES IN GROWING AND DIVERSIFIED END-MARKETS AND GEOGRAPHIES (3/3) Emerging Markets Are the Major Source of Consumption Growth Drivers of Polyethylene Consumption Growth 35 NA kg per person NA & Europe Europe 70% of population in emerging regions kg per person Market Trends Drive Packaging Consumption Asia Russia ME 2 c.60mmt PE upside potential assuming Asian per capita consumption grows to Europa/NA levels Other CIS excl. Russia 3 Market drivers require increasing use of high performance solutions outpacing growth in demand for traditional materials 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Population (millions) Demographic Change Sustainability / Food Loss Functionality / Shelf Appeal Efficiency / Transportation Headwind from plastic recycling Market Drivers Source: IHS Markit (1) The Company analysis 11

12 3 B INVESTMENT HIGHLIGHTS LOW COST CHEMICAL PRODUCER WITH HIGH BARRIERS TO ENTRY (1/2) Transportation Cost of Solid Granules Cheaper than Liquids under Pressure ZapSib Impact on Logistics Infrastructure Western Siberia Tobolsk Transportation Cost of Solid Granules Cheaper than Liquids under Pressure LPG shipment to Europe: Specialized fleet for hazardous cargo Longer distance Export duty St. Petersburg Russia LPG shipment Today: Export duty High costs of transporting hazardous flammable liquids by train Empty wagons for return trip to Russia Longer distance ZapSib ARA 2 Europe Turkey CIS Worldwide Polymer Shipment: Easily-available and relatively cheap transport Various means of transportation China Vostochnyy Vladivostok Polymer shipment Post ZapSib launch: No export duties Lower costs (inexpensive ways to transport polyolefin granules) Higher spreads Favourable demand trends in end markets rail transportation (containers) rail transportation (carriage) auto transportation shipping seaports / border crossings warehouses Shanghai SI 1 Source: The Company data (1) SIBUR International. (2) Amsterdam, Rotterdam, Antwerp. 12

13 3 B INVESTMENT HIGHLIGHTS LOW COST CHEMICAL PRODUCER WITH HIGH BARRIERS TO ENTRY (2/2) Russia Is Full of Hydrocarbons and Major Oil Fields (West Siberia) Are Far from Key End Markets, Making the Region a Natural Place for Petrochemical Operations Western Siberia Tobolsk West Siberia is a market with one of the lowest energy costs globally, providing strong competitive advantage to petrochemical operations Abundant NGL supply paired with limited utilisation options provides petrochemical operations in the area with ample low-cost feedstock supply LPG Naphtha 2017, $ / t 2017, $ / mmbtu , $ / t Asia Asia US US Europe (main destination for Russian producers) Europe Transport & Duties (171) Transport & Duties from Kstovo to 8 Europe (106) Netback price in West Siberia Netback price in Central Russia (Kstovo) before excise tax 378 Recoverable Excise for Naphtha Converters (157) Netback price in Central Russia (Kstovo) 220 Source: The Company data, IHS Markit, BP Annual review. (1) Converted into mmbtu at mmbtu/t ratio of 47.2 for LPG and 49.2 for Ethane. (2) CIF Japan. (3) FOB USGC. (4) DAF Brest propane-butane (50/50). (5) FOB Singapore. (6) FOB USGC. (7) CIF North West Europe. (8) Export duty and freight calculated based on IHS data, rail transportation costs to Kstovo calculated based on Russian Railways tariffs for 2017, assuming 58.3 RR/$ exchange rate, Ust-Luga as a station of destination, leased railcars, and 66t cargo capacity of a tank wagon. 13

14 $ / t 4 B INVESTMENT HIGHLIGHTS SIGNIFICANT UPSIDE FROM WORLD-SCALE ZAPSIB PROJECT AND FURTHER POST-ZAPSIB GROWTH PROJECTS (1/4) ZapSib Is Expected to Triple PE/PP Capacity Adding 2 mtpa to Existing Operations and Utilize Ample Own Advantaged Feedstock ZapSib Is one of the lowest-cost project globally and expected to be positioned in the 1st quartile on the global ethylene cost curve driven by Low feedstock cost (LPG netback price in West Siberia) Low energy cost in Russia Economy of scale and low labour cost in Russia Considering Advantageous Geography and World-Scale Size of ZapSib the Project Is Expected to Be Positioned in the 1 st Quartile on the Global Ethylene Cost Curve 2022, assuming Brent oil price of 68.7 $/bbl 1, Net Feedstock 600 ZapSib projected cash cost NEA Avg WEP Avg 400 Variable 200 MDE Avg NAM Avg Fixed WE LPG cash cost Logistic arbitrage Utilities Fixed costs Other ZapSib cash cost Cumulative Production - mln t Source: The Company data, IHS Markit 14

15 4 B INVESTMENT HIGHLIGHTS SIGNIFICANT UPSIDE FROM WORLD-SCALE ZAPSIB PROJECT AND FURTHER POST-ZAPSIB GROWTH PROJECTS (2/4) ZapSib Is a Scale-Up and Extension of Tobolsk PP Plant Experience Tobolsk PP Plant 2017 Results LPG 610 ktpa Tobolsk PP: 0.5 mtpa Launched in 2013 Technology: PDH (propane dehydrogenation); licensor UOP Gas-phase polymerisation; licensor INEOS 500 ktpa $1,215 per tonne 1 PP 510 kt PP output achieved $342 mln EBITDA contribution 55% EBITDA margin (average EBITDA margin of 63% 2 since fully launched) RR 57 bln (~$2 bln) CapEx ZapSib (Project in Progress) 3 Key Features LPG 2.7 mtpa ethane 0.3 mtpa ZapSib: 2 mtpa Expected launch in ktpa +$1,190 per tonne 4 PP 5 1,500 ktpa +$1,371 per tonne ktpa +$884 per tonne 6 Source: The Company data (1) Average SIBUR selling prices (FY2017) calculated using exchange rate of 58.3 RR/$. (2) Calculated as average EBITDA margin over (3) ZapSib capacity figures are estimates of the Group. (4) IHS actual 2017 prices. PE blended price for HDPE and LLDPE. (5) 50% China / 50% Russia. (6) Weighted average price for fuel components and butadiene (94 ktpa of butadiene, 135 ktpa of fuel components) calculated using exchange rate of 58.3 RR/$. PE 5 butadiene, fuel components Technology: EPB cracker; licensor Linde AG PE unit: gas-phase polymerisation (Innovene FullFlex) / suspension polymerisation (Innovene) licensor INEOS PP unit: Spheripol; licensor LyondellBasell Scale-up of the Polyolefin capacity, combined with more stable and easily-manageable Ethylene production technology Introduction of new grades of PE (HDPE and LLDPE) Management team, experienced in construction, commissioning and running modern Polyolefin Plant Established distribution channels, and sales teams well-prepared for further expansion 15

16 Methane SIGNIFICANT UPSIDE FROM WORLD-SCALE ZAPSIB PROJECT AND FURTHER POST-ZAPSIB GROWTH PROJECTS (3/4) Further Growth in Regions with 3rd party Midstream Infrastructure: Illustrated by Amur Project PROJECT HIGHLIGHTS: Helium 4 B INVESTMENT HIGHLIGHTS Rare case of gas concentrated in one location in the amount sufficient for a world-scale contract Gazprom is already investing in gas processing and infrastructure to export gas to China with ethane as by-product ready-made midstream for SIBUR New region of operations for SIBUR and pure Asian play Strategic partnership expected to bring or secure additional finance and share business and implementation risks PROJECT UPDATE: Long term feedstock contract with Gazprom signed in May 2018 Dedicated legal entity and project team created, technologies and licensors chosen. Basic design begun in June 2018 Final investment decision expected end of 2019 or soon after Expected mechanical completion by mid-2024, synchronized with AGPP reaching designed capacity Amur GPP Gazpom Gazprom C 3 C 4 Markets C 5+ C2 (Ethane) for Amur GCC Cracker (1.5 mtpa) Amur GCC + Potential Partner (s) Ethylene PE UNITS (1.5 mtpa) Chayandinskoye Field Kovytkinskoye Field Skovorodino Products: Methane, ethane, propane, butane, pentane-hexane fraction Gas processing capacity 1 42 bcm 2 Helium production capacity 60 mcm 3 EUROPE Svobodny Source: The Company data (1) Source: Gazprom. (2) Expected capacity in billion cubic metres. (3) Expected capacity in million cubic metres. 16

17 4 1 Expand core production base B INVESTMENT HIGHLIGHTS SIGNIFICANT UPSIDE FROM WORLD-SCALE ZAPSIB PROJECT AND FURTHER POST-ZAPSIB GROWTH PROJECTS (4/4) Continuous Ideas Screening with a Focus on Profitable Niches and Feedstock Monetization Olefins & Polyolefins Further growth in the highestmargin O&P segment Monetisation of low-cost hydrocarbons in Tobolsk with integration into existing infrastructure and facilities Plastics, Elastomers & Intermediates Develop new products based on local needs (i.e. propylene oxide) Incremental projects with low capital requirements based on our expertise in petchem facilities construction Midstream Opportunities to increase NGLs as a gas industry byproduct on the back of increasing gas condensate base in the region ZapSib BR 1 TPE DOTP PTA 2 Profitable growth beyond core production base to tap new O&G regions with a potential to leverage midstream infrastructure developed by 3rd parties Developing petrochemicals leveraging other companies midstream infrastructure Amur project Following significant growth over the past decade, no new material investments are expected 3 Continuously pursue operational excellence Source: The Company data (1) Reliance SIBUR JV Elastomers production (India) Design phase Construction phase Ideas phase 17

18 5 B INVESTMENT HIGHLIGHTS SUPERIOR MARGINS AND RESILIENT CASH FLOW GENERATION THROUGH THE CYCLE AS BASIS FOR GROWTH INVESTMENTS (1/3) Balanced Business Model Allowing to Benefit from Both O&G and Petrochemical Cycles, Smoothing Cash Flow and Earnings Volatility Downstream Integration and Resilience of EBITDA Margin Key Pillars of Sustainable Margins RR bln Brent price (avg $/bbl) SIBUR EBITDA ($ bln) Balanced business model with integration into feedstock Supply contracts pricing formulas allowing to partially pass on O&G volatility to suppliers SIBUR EBITDA (RR bln) Olefins & Polyolefins Plastics, Elastomers & Intermediates Midstream Natural hedge from commodity prices and FX fluctuations Unallocated (6) (7) (2) (1) (3) (5) Sep 2018 LTM EBITDA margin 29% 32% 1 36% 34% 35% 36% Source: The Company data. (1) Adjusted for estimated value of naphtha trading operations via Ust-Luga, ceased in

19 5 B INVESTMENT HIGHLIGHTS SUPERIOR MARGINS AND RESILIENT CASH FLOW GENERATION THROUGH THE CYCLE AS BASIS FOR GROWTH INVESTMENTS (2/3) Natural Hedge from Commodity Prices and FX Fluctuations: Production Facilities Are Located in Russia Benefiting from Inverse Correlation of RR and Commodity Prices Chemical Spread Is Supporting Midstream Margin FX Exposure of SIBUR Revenue and Costs $ / t 1,600 RR/$ 70 LTM as of Sep 2018 RR 544 bln 1,400 1,200 1, O&P segment spread Midstream spread Other Natural Gas 15% 9% Plastics & 20% Elastomers Olefins & 18% Polyolefins MTBE LPG & Naphtha 5% 33% RR 385 bln 20% 9% 11% 10% 18% 32% Other D&A Staff Energy Transportation & Logistics Transportation and logistics costs $ linked Feedstock& Materials Revenue OpEx PP rafia China Main Port. Spot NGLs weighted cost Liquids weighted export price RR/$ Hard Currency ($, EUR) Rouble $ linked Source: the Company data 19

20 5 B INVESTMENT HIGHLIGHTS SUPERIOR MARGINS AND RESILIENT CASH FLOW GENERATION THROUGH THE CYCLE AS BASIS FOR GROWTH INVESTMENTS (3/3) High and Stable EBITDA Margins Compared to Peers With an average EBITDA margin of 33% over , SIBUR is among the most profitable companies of the peer set 40% 35% 30% 38% 35% 30% High margin chemicals 25% 20% 25% 23% 21% 20% 20% Typical margin chemicals 15% 15% 10% 5% Source: Companies data 20

21 6 B INVESTMENT HIGHLIGHTS STRONG MANAGEMENT TEAM WITH TRACK RECORD OF VALUE CREATION AND TRANSPARENT CORPORATE GOVERNANCE (1/2) Current Management Team Has Proven Track Record of Completing Large-Scale 1 Value- Accretive Investment Projects within Budget and Ahead of Time SIBUR Execute Projects within Budget and in Time Portfolio of Executed Projects 80% of projects within 10% variance vs. initial budget More than 50% of projects with saving vs. initial budget RR bln (excl. VAT) ZapSib Executed projects: 14 large-scale projects in Total budget = 210 RR bln All the projects executed in time or ahead of time Tobolsk PP production and multiple smaller scale projects Maintenance, R&D, IT, and other 81 ~700 in 8yrs % of total 11% Savings Over the budget % Construction and expansion of GPPs, GFU Ust-Luga transshipment facility, railway loading racks, raw NGL pipelines % 17% 63 9% Variance from Committed Budget (20%) (15%) (10%) (5%) 5% 10% 15% Weighted Average Variance Feedstock processing infrastructure Transportation infrastructure Petchem Other TOTAL Source: The Company data (1) Projects of more than RR 1 bln budget. (2) Converted into USD at respective RR/$ exchange rate for each year 31.1 for 2012, 31.9 for 2013, 38.6 for 2014, 61.3 for 2015, 66.8 for 2016, 58.3 for

22 Independents 6 B INVESTMENT HIGHLIGHTS STRONG MANAGEMENT TEAM WITH TRACK RECORD OF VALUE CREATION AND TRANSPARENT CORPORATE GOVERNANCE (2/2) High Corporate Governance Standards Overview of Governance Concept Overview of Board of Directors. Two-tier governance structure with Board of Directors and strong management team focused on shareholder value maximization. 4 independent members of the Board of Directors Peter Lloyd O Brien chairs Audit Committee. Alexey Komissarov chairs Human Resources and Remuneration Committee Management team with clear accountability and being compensated according to SIBUR s performance vs. its peers Leonid Mikhelson Chairman of the Management Board, PAO NOVATEK Alexander Dyukov CEO, PAO Gazprom Neft Gennady Timchenko Member of the Board of Directors, PAO NOVATEK Dmitry Konov Chairman of the Management Board of PJSC SIBUR Wang Dan Executive Vice President of the Silk Road Fund Chang Zhenyong Vice President and Head of Chemical Division at Sinopec The Silk Road Fund 10.0% Sinopec 10.0% Current/former Managers of PJSC SIBUR 14.5% Shareholding Structure Leonid Mikhelson 48.5% Vladimir Razumov Deputy Chairman of the Management Board, PAO SIBUR Holding Alexey Komissarov Chairman of Federal Freight, Director of RANEPA Formerly Minister of the Government of Moscow and Advisor of Mayor of Moscow Kirill Shamalov Deputy Chairman of the Management Board Peter Lloyd O Brien Chairman of TransFin-M, Board positions 2 - TMK (AC Chair), TFM (Chairman), and Sberbank CIB US (INED) Formely Co-Head of Investment Banking at Morgan Stanley, CFO of Rosneft Gennady Timchenko 17.0% Andrei Vernikov Multiple Board Member positions at banks Formerly Professor of Banking at the Higher School of Economics Sergey Vasnetsov Board Member at Eurochem AG Formerly SVP of Strategic Planning at LyondellBasell Source: The Company data (1) While Novatek generated dollar yearly TSR of 20% since IPO in (2) As of Jul

23 C FINANCIAL HIGHLIGHTS STRONG & RESILIENT FINANCIAL PERFORMANCE Revenue Adjusted EBITDA 2 RR bln Revenue CAGR % % % % 544 RR bln EBITDA CAGR % EBITDA margin, % Adjusted EBITDA 3 JV s share of EBITDA EBITDA 35.7% 33.9% % % % 35.8% % M 2018 LTM Revenue, $ bln M 2018 LTM Adj EBITDA, $ bln 2, Operating Cash Flow CapEx 4 RR bln OCF CAGR % % % 169 RR bln CapEx CAGR % 146 (7%) +31% % 29% M 2018 LTM M 2018 LTM ZapSib Capex Other Capex OCF, $ bln Capex, $ bln Source: The Company data (1) In $ terms. (2) RR/$ average exchange rates of 60.6 used for 9M 2018 LTM and 58.4, 67.0, 61.0 for the years 2017, 2016, 2015, respectively. (3) Adjusted for the share of EBITDA from JV and associates, including RusVinyl, Yuzhno-Priobsky GPZ, NPP Neftekhimia, Sibgazpolimer, SNHK, Reliance Sibur Elastomers Private Limited. (4) CapEx includes purchase of property, plant and equipment, as well as purchase of intangible assets and other non-current assets. 23

24 INVESTMENT HIGHLIGHTS 1 A LEADING EMERGING MARKETS PETROCHEMICAL COMPANY 2 OPERATES IN GROWING AND DIVERSIFIED END-MARKETS AND GEOGRAPHIES 3 LOW COST CHEMICAL PRODUCER WITH HIGH BARRIERS TO ENTRY 4 SIGNIFICANT UPSIDE FROM WORLD-SCALE ZAPSIB PROJECT AND FURTHER POST-ZAPSIB GROWTH PROJECTS 5 SUPERIOR MARGINS AND RESILIENT CASH FLOW GENERATION THROUGH THE CYCLE 6 STRONG MANAGEMENT TEAM WITH TRACK RECORD OF VALUE CREATION AND TRANSPARENT CORPORATE GOVERNANCE 24

25 APPENDIX

26 FREQUENTLY ASKED QUESTIONS D APPENDIX: FREQUENTLY ASKED QUESTIONS SIBUR business 1. What are the company s production capacities? 2. How is your feedstock priced? Do you see any risks of feedstock undersupply? 3. What is SIBUR midstream infrastructure? 4. What is SIBUR feedstock base? 5. What is your debt position? Do you see any liquidity risks? 6. Who is your management team? EHS 1 7. How petchem products are different from other commodities? 8. What are SIBUR s achievements in EHS 1? 9. How SIBUR ensures industrial-safety on its production sites? ZapSib 10. How competitive is ZapSib at delivery to target markets? 11. How does ZapSib affect SIBUR s business? 12. What is ZapSib ramp-up profile? 13. How ZapSib is positioned vs. global peers projects? 14. Why ZapSib is positioned at the lower end of the cost curve? (1) Environmental, Health & Safety. 26

27 1. WHAT ARE THE COMPANY S PRODUCTION CAPACITIES? Continuous Optimization of Processing and Production Capacities D APPENDIX: PRODUCTION CAPACITIES Olefins & Polyolefins Plastics, Elastomers & Intermediates Midstream PP 1 and PE Elastomers Gas Processing 5 ths t 98% 97% 100% 1,215 1,240 1, ths t 73% 79% 85% % % 90% Plastics & organic synthesis products PE PP ths t 93% 95% 94% Propylene and Ethylene 2 Gas fractionation 6 ths t 83% 90% 96% Butadiene 4 98% 87% 92% 1,646 1,658 1, ths t 89% 96% 81% Ethylene Propylene Source: The Company data Note: Nameplate capacity indicated - capacity officially registered with RosTeckNadzor. Capacity utilisation exceeds 100% when SIBUR is able to run a facility more efficiently over time, upgrading the technology and implementing various de-bottlenecking measures (1) Including JVs NPP Neftekhimia, Poliom. (2) Including propylene and ethylene from O&P and PE&I segments. (3) 69% utilized for the intended purpose. (4) Including SIBUR Togliatti (80 ths tpa) and SIBUR-Tobolsk (207 ths tpa) capacities, 62% utilized for the intended purpose. (5) Including Yuzhno-Priobskiy GPP operated under JV (since October 2015). (6) Including Uralorgsintez divested in April 2017; capacity is used under long-term processing arrangement Production capacities, ths t / Processing volumes, bcm Capacity utilization rate, % 27

28 2. HOW IS YOUR FEEDSTOCK PRICED? Long-Term Contracts with Attractive Pricing Formulas D APPENDIX: LONG-TERM CONTRACTS Pricing Drivers Key Suppliers APG Base price for APG depends on 3 key drivers: Regulated domestic natural gas price Target liquid fractions content, distance and processing cost (i.e. value for SIBUR) Alternative cost for the seller Russian Government has consistently increased incentives for oil companies to utilise APG: penalties for flaring increased from 4.5x the standard emission charge in 2012 to 25x starting from 2014 Oil Majors Raw NGL With reference to international prices for LPG and naphtha, and to domestic LPG prices Pricing in raw NGL supply contracts is determined on an export netback basis and reflects Fraction content of LPG & naphtha and fractionation cost (i.e. value for SIBUR) Transportation costs and export duties Alternative channels available for NGLs supplier (i.e. alternative cost of the seller) Gas Majors Contract Characteristics % Guaranteed under LT contracts Weighted average maturity 14.3 % Guaranteed under LT contracts 92% 87% YEARS Weighted average maturity 16.1 YEARS Margins high but volatile (relatively to NGLs feedstock processing) Margin substantially lower vs. APG processing but is highly robust and stable as purchase and selling prices are strongly correlated Illustrative Margin of Processing Processed NGL selling price Natural gas selling price APG purchase price Processed NGL selling price NGL purchase price Source: The Company data Note: As of 31-Dec

29 3. WHAT IS SIBUR MIDSTREAM INFRASTRUCTURE? SIBUR Owns and Operates Midstream Infrastructure Securing Feedstock Supply to Its Chemical Business D APPENDIX: MIDSTREAM INFRASTRUCTURE Western Siberia Tobolsk bcm APG processing SIBUR Asset Base in Western Siberia mln t Gas fractionation 8 GPPs 1 out of 10 operating in region 2,712 km Pipeline network 1 Russia's largest and most extensive integrated infrastructure for processing and transportation of APG and NGLs 57% of APG produced in Russia 3 71% of raw NGL produced in Russia c.90% of annual supplies are guaranteed by long-term contracts with weighted average maturity of c.15 years + Tobolsk 3 No third party gas processing additions in the region over last two decades while SIBUR doubled processing capacities and modernized legacy transportation infrastructure by investing $4.4 bln Scale: 1cm= c.90km SIBUR infrastructure SIBUR newly constructed / upgraded assets Third-party infrastructure Source: the Company data, CDU TEK and companies data Note: As of 2017FY (1) Including Yuzhno-Priobskiy GPP, JV between SIBUR and Gazprom Neft. (2) Including Uralorgsintez (0.9 mtpa) divested in April 2017 (capacity is used under long-term processing arrangement). (3) Estimate based on CDU TEK and companies data (FY2017) 29

30 WHAT IS SIBUR FEEDSTOCK BASE? D APPENDIX: SIBUR FEEDSTOCK BASE High Concentration of O&G Production in West Siberia Russian APG Production and Utilisation APG utilization rate in West Siberia (%) 2012: Introduction of regulation targeting 95% utilization rate by 2020 with gradual increase in fines 90% 92% 93% 92% 91% 83% 82% 86% WESTERN SIBERIA SIBUR feedstock base 57% West Siberia share in Russian oil production 87% West Siberia share in Russian gas production APG production (bcm) Western Siberia Other Production (excl. flared volumes) Feedstock Overview Russian Unstable Gas Condensate Production mln t Core products of oil & gas companies Oil field C 1 C 2 C 3 C 4 C 5 C 6 C 7+ C 1 C 2 C 3 C 4 C 5 C 6 C 7+ Gas field C 1 C 2 C 3 C 4 C 5 C 6 C 7+ Methane (gas) Ethane (gas) Propane (gas/liquid) Butane Isobutane (gas/liquid) Pentane Isopentane (gas/liquid) Hexane (gas/liquid) Heavy fractions Natural gas LPG Naphtha Oil Raw NGL Western Siberia Other Petrochemical feedstock APG / gas condensate Source: Estimate based on CDU TEK and companies data (FY 2017), IHS Markit, Petromarket 30

31 5. WHAT IS YOUR DEBT POSITION? DO YOU SEE ANY LIQUIDITY RISKS? Debt Structure and Maturity Profile D APPENDIX: DEBT STRUCTURE AND MATURITY PROFILE Key Figures RR bln, except as stated 31 Dec Dec Dec Sep Sep 18 vs. 31 Dec 17, % Total debt % Conventional debt (31%) ZapSib related debt % Cash & cash equivalents (60%) Net debt % Conventional net debt (26%) ZapSib related net debt % WA loan tenor (years) WA Conventional debt WA ZapSib related debt Available credit lines, incl % Committed (13%) Overview Sibur has a strong balance sheet Enhanced free cash flow, allowing it to pursue growth initiatives and return capital to shareholders Significant retained earnings reinvested in the business Ongoing pursue of decreasing net leverage Investment grade credit rating by Moody s (Baa3), rated BB+ by Fitch Average interest rates (%) % Q 2018 $ den. debt 3.4% 3.3% 4.0% 4.1% EUR den. debt 1.2% 1.1% 1.2% 1.2% RR den. debt 12.9% 10.9% 9.3% 9.2% Leverage Ratios As of 30 September 2018 Total Debt of RR 323 bln 1 31 Dec Dec Dec Sep 18 Debt / EBITDA 3.4x 2.4x 1.9x 1.7x Net debt / EBITDA 2.1x 2.0x 1.6x 1.6x Conventional net debt 1.8x 1.2x 0.6x 0.4x ZapSib related net debt 0.3x 0.8x 1.0x 1.2x Net debt / EBITDA (in $) 1.8x 2.2x 1.7x 1.4x RR bln (1) Uncommitted Credit Lines 259 Loans Eurobonds RR Bonds ECA NWF RR 323 bln 2 Undrawn EUR ECA Loan portfolio structure as of 30 Sep 18 $ / EUR / RR 54% 28% 18% 128 Long-term / Short-term Fixed / Floating Unsecured 32% 94% Source: The Company data (1) Items denominated in USD and EUR are converted into RR at RR/USD and RR/EUR FX rates as of 30 September (2) Excluding the undrawn EUR ECA. 100% 68% 6% Committed Credit Lines Cash & Cash Equiv Liquidity After

32 6. WHO IS YOUR MANAGEMENT TEAM? Experienced Management Team with Strong Track Record in Revenue Growth and Project Execution D APPENDIX: MANAGEMENT TEAM EBITDA Evolution Since 2004 Dmitry Konov Chairman of the Mgmnt Board and a member of BoD of SIBUR Sergey Komyshan Polyolefins & Development Projects Alexander Petrov CFO Pavel Lyakhovich Plastics, Elastomers and Intermediates RR bln Rustam Galiakhmetov Production & Performance Improvements Vladimir Razumov Chairman of SIBUR R&D, project management, ethics and discipline committees Vasiliy Nomokonov Executive Director IT, R&D Igor Klimov CEO of ZapSib& SIBUR Tobolsk Experienced and Committed Management Team with Industry Leading Expertise Most Board / Management Members joined at least 10 years ago Chairman and CEO of OOO SIBUR joined in 2003 Oleg Makarov Logistics, Supply Chain & Midstream Chairman of PJSC SIBUR joined in 2004 Mikhail Karisalov Chairman and CEO of OOO SIBUR Source: The Company data (1) Environmental Impact Index is an average indicator of the specific load on the environment as a ratio of all types of impacts (emissions, discharges and waste) to the volume of production. 32

33 Copper Aluminium Iron Steel Synthetics Rubbers Glass Cement Carton and Paper Plastics Pulp Aluminium Synthetics Rubbers Copper Steel Iron Glass Carton and Paper Pulp Cement Plastics 7. HOW PETCHEM PRODUCTS ARE DIFFERENT FROM OTHER COMMODITIES? D APPENDIX: EHS Petchem Products Have Environmental Advantages and Leave a Smaller Carbon Footprint Compared to Alternative Materials Electricity Consumption CO 2 Emission MWth per tonne Tonne of CO 2 per tonne Source: USGS, FAO, BP, Rubber, The New Plastic Economy Note: The average world indicators for the consumption of electricity and CO 2 emission for the whole production cycle are presented 33

34 D APPENDIX: EHS 8. WHAT ARE SIBUR S ACHIEVEMENTS IN EHS? Socially Responsible Business with Negative CO 2 Footprint and Rigorous Focus on Health and Safety Lost Time Injury Frequency 1 Efficient Prevention of CO 2 Emissions Greenhouse gas emissions in CO 2 equivalent (mln tonnes) SIBUR Prevented as a result of APG processing (72) Safety Indicators (International Benchmark), 2017 Through APG processing SIBUR contributes to: Improvement in the ecological situation in petrochemical regions Establishment of resource base for subsequent processing of hydrocarbon resources into fuel and petrochemical products TRCF FAR LTIF 2 SIBUR SHELL IOGP LANXESS BASF EVONIK With 1 mln m 3 of APG flared, c.300 tonnes of pollutants are emitted As SIBUR processed 22.8 bln m 3 of APG in 2017, the emission of c.7 mln tonnes of pollutants and more than 72 mln of greenhouse gas (in СО 2 equivalent) was prevented (1) Including contractors. Source: The Company data (2) Industry averages. Source: IOGP (International Association of Oil&Gas Producers) TRCF Total Recordable Case Frequence; LTIF Lost time injury frequency; FAR - Fatal Accident rate 34

35 9. HOW SIBUR ENSURES INDUSTRIAL-SAFETY ON ITS PRODUCTION SITES? D APPENDIX: EHS Repair and Maintenance Expenses, RR bln 59% 51% 52% Expenses for materials and spare parts in Other raw materials item Repair and maintenance expenses CapEx for modernization of the fixed assets Industrial-Safety as % of amortisation and depreciation OpEx CapEx Repair and Maintenance Costs Improvement Measures Repair and maintenance costs are allocated to a separate budget (fixed assets repair and maintenance) OpEx includes repair and maintenance costs, incl. regular maintenance activities. Budgeting process implies tools for costs optimization (optimization of repairs, import substitution, improved transparency of costs, training of own repair personnel, work with contractors to reduce the cost of services) CapEx-part contains fixed assets upgrading and modernization costs. Projects formation implies risk-based approach where all the projects are assessed in terms of the risks of consequences and the effectiveness of project implementation Only efficient investments with clear return are made Cutting-Edge Tools for Maintenance Losses due to equipment breakage Share of planned works (%) Digital systems for business process management for maintenance and repairs SAP, Meridium % % % H % 2.0% 0.0% -2.0% 1 LPM, RR bln production uptime losses, % 90.2% 89.7% 92.0% H 2018 Technical conditions monitoring systems are installed on the most important equipment A reliability management service is established for switching to reliability centered maintenance (RCM) Diagnostic units are equipped with modern instruments, regular search and implementation of new tools is held for diagnostics quality improvement Source: The Company data (1) LPM Lost profit margins production uptime losses in money terms 35

36 Delivered to China $/Metric Ton $/Metric Ton $/Metric Ton Delivered to W. Europe $/Metric Ton $/Metric Ton $/Metric Ton 10. HOW COMPETITIVE IS ZAPSIB AT DELIVERY TO TARGET MARKETS? Expected Position of ZapSib on 2022 Cost Curve (Including Transportation) D APPENDIX: ZAPSIB COMPETITIVENESS HDPE LLDPE PP 2,000 A: ZapSib 2,000 A: ZapSib 2,000 A: ZapSib 1,000 A WEP Avg NAM Avg NEA Avg MDE Avg 1,000 A WEP Avg NAM Avg NEA Avg MDE Avg 1,000 A MDE Avg NAM Avg NEA Avg WEP Avg Cumulative Production Million Metric Tons Cumulative Production Million Metric Tons Cumulative Production Million Metric Tons 2,000 A: ZapSib 2,000 A: ZapSib 2,000 A: ZapSib WEP Avg WEP Avg NAM Avg WEP Avg 1,000 A NAM Avg NEA Avg MDE Avg 1,000 A MDE Avg NAM Avg NEA Avg 1,000 A NEA Avg MDE Avg Cumulative Production Million Metric Tons Cumulative Production Million Metric Tons Cumulative Production Million Metric Tons ZapSib is expected to be one of the most cost-efficient assets to deliver to China and Western Europe Source: IHS Markit 36

37 11. HOW DOES ZAPSIB AFFECT SIBUR S BUSINESS? ZapSib Is Expected to Result in A Long-Term Profitability Boost D APPENDIX: ZAPSIB IMPACT ON BUSINESS ZapSib Is Expected to Internalize Ample Own Feedstock Feedstock use by segment, mtpa Plastics,Elastomers & Intermediates % 11% Resulting in Expansion of O&P Revenue & EBITDA Margin Revenue Contribution by Segment, % Other Plastics, Elastomers & Intermediates Olefins & Polyolefins 24% 41% & Strong Profitability Boost for the Group ZapSib Expected Impact on SIBUR Olefins & Polyolefins 21% 1.9 Midstream 35% External Revenue EBITDA EBITDA Margin Highest margin segment 56% A 2017A PF ZapSib¹ O&P xx% Segment average EBITDA margin '15-17, % PE&I External Sales of LPG & Naphtha 68% % % O&P EBITDA Margin, % 55% Midstream Group 2017A 2017A PF Split incl. expected ZapSib production 1 xx% - share of segment in LPG and Naphtha consumption xx - mln t of LPG and Naphtha used by each segment O&P Segment Margin '15-17 Tobolsk Polymer '17 ZapSib¹ O&P Segment Margin Post ZapSib² Source: The Company data, IHS (1) Estimated ZapSib upside potential corresponds to 2017PF revenue assuming 100% utilisation rate, PP selling price per ton of $1,105 (average SIBUR selling price for 2017A) and HDPE selling price per ton of $1,354 (average SIBUR selling price for 2017A). EBITDA margin attributable to ZapSib s operations represents a targeted ZapSib EBITDA margin for medium to long-term 37

38 12. WHAT IS ZAPSIB RAMP-UP PROFILE? D APPENDIX: ZAPSIB RAMP-UP PROFILE ZapSib Ramp-up Profile Is Expected to Be in Line with Industry Benchmarks Typical Ramp-Up Profile Typically operations start at modest rates at easier units and move over time to increase integration and throughput until the whole complex is under commercial operation Subsequent years affected by outages due to unexpected fouling/coking Benchmark of Actual Industry Ramp-Up (Sourced by Nexant) The following graphics illustrate actual operating rate profiles and achieved production from real complexes monitored by Nexant. The variability of Year 3 is most frequently caused by an external constraint (inability to source sufficient feedstock, or market full production). Incremental ramp-up profile for a typical project Capacity utilization rate,% % Higher bound 80% 90% 90% % Lower bound 50% 30 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Year 1 Year 2 Year 3 Source: The Company data, industry benchmarks 38

39 Capacity 13. HOW ZAPSIB IS POSITIONED VS. GLOBAL PEERS PROJECTS? With Capex Per Tonne of Capacity Broadly in Line with The Industry, ZapSib is Expected to Deliver Superior Economics on The Back of Its Advantageous Position on The Cost Curve D APPENDIX: ZAPSIB POSITIONING Major Global Pyrolysis Projects Overview SIBUR vs Global Peers PE projects 1 2,800 2,300 1,800 Project 12 Project 11 ZapSib 2 Higher cost of investment due to geographical, climatic and infrastructure characteristics, and necessity to import equipment and technologies is well compensated by better position on the cash cost of olefins and polyolefins producers due to advantageous access to cheap feedstock, low energy and labor costs in Russia 1,300 Project 10 Project 2 Project 3 Project 4 Project 6 Project 9 Competitive cash cost position further strengthened by economy of scale 800 Project 1 Project 8 Project 5 Project ,400 2,200 3,000 3,800 4,600 5,400 7,000 8,000 6,200 Capex/Ton Ethylene cracker ZapSib Integrated³ Successful track record of large-scale investment projects execution and expertise in construction risk management (No.4 in the world by the size of investment among petrochemical companies) 4 Source: Projects and respective capacities provided by IHS Markit, projects capex calculated based on companies publicly reported data (1) Size of the buddle indicates the total capex spent on the project. (2) Including PP projects. (3) Ethylene and its derivatives production units. (4) Per special report ICIS top 100 chemical companies