Company Presentation. March 2018

Transcription

1 Company Presentation March 2018

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 SIBUR AT A GLANCE Who We Are Unique integrated gas processing & petrochemicals company One of the highest EBITDA margin in the industry worldwide Diverse range of products, over 1,400 large customers in 80 countries Investment grade credit rating by Moody s (Baa3), rated BB+ by Fitch World-scale investment project underway to triple SIBUR polyolefin capacity Feedstock & Energy Other (2) Revenue by Segment 41 8 % Olefins & Polyolefins Plastics, Elastomers & Intermediates $7.8 bln $2.8 bln 35.4% Revenue by Geography revenue EBITDA 1.7x 22 production sites net leverage (1) in Russia EBITDA margin Baa3 Moody s BB+ Fitch Russia 58 % 30 Europe Asia 6 15 CIS Other Hereinafter all figures represent 2017 FY results unless otherwise stated. SIBUR s reporting currency is Russian rouble. Figures in $ derived based on the following exchange rates: 58.4 /$ avg and 57.6 /$ eop. (1) Net Debt /EBITDA as of 31 December 2017 in $ terms. (2) Unallocated revenue is primarily derived from sales of EPC-services. 3

4 PETROCHEMICALS UNIQUE INTEGRATED GAS PROCESSING & PETROCHEMICALS COMPANY SUPPLIERS LOGISTICS CLIENTS oil producers APG (1) (22.3 bcmpa) gas producers NGLs (2) (3.6 mtpa) Olefins & Polyolefins Segment 1.2 mtpa 0.7 mtpa (4) feedstock (3) gas processing 6.0 mtpa NGLs gas fractionation 7.5 mtpa 3.4 mtpa Plastics, Elastomers & Intermediates Segment 2.4 mtpa Feedstock & Energy Segment LPG and naphtha (5.8 mtpa) natural gas (18.5 bcmpa) (1) Associated petroleum gas (APG) is a by-product of oil production. (2) Natural gas liquids (NGLs) include raw NGL, LPG (liquefied petroleum gas) and naphtha. Raw NGL is a by-product of gas production. (3) Includes LPG, naphtha and raw NGL. Composition may vary from year to year depending on market conditions and other limitations. (4) JV sales include PVC, caustic soda (RusVinyl) and PP (Poliom). 4

5 OPERATING THREE HIGHLY PROFITABLE AND DIVERSIFIED BUSINESS SEGMENTS Feedstock & Energy Olefins & Polyolefins Plastics, Elastomers & Intermediates Financial results ($ mln) External revenue EBITDA 39% EBITDA margin External revenue 888 Adj. EBITDA (1) 40% EBITDA margin External revenue 520 EBITDA 20% EBITDA margin Revenue structure export 53 % 47 domestic other 1 naphtha natural gas LPG 60 % export 33 % 67 domestic other 2 olefins 7 19 BOPP PP 48 % 24 PE export 43 % 57 domestic plastics & organic synthesis 32 elastomers % 35 other MTBE & intermediates & fuel additives other chemicals Key end-markets Utilities & fuels Petrochemicals & chemicals FMCG, packaging Construction Chemicals Chemicals Construction Automotive Utilities & fuels FMCG Strategy Flat production Expansion (ZapSib, Tobolsk logistics hub) Development of tailored grades Selective opportunities targeting structural changes in domestic industries (1) Adjusted EBITDA, including share of the Group s portion in joint ventures and associates EBITDA (darker shading). 5

6 OUTLINE Unique features creating attractive investment opportunity p.7 Reporting calendar and IR contact details p.19 FAQ p.20 Financial profile p.32 6

7 UNIQUE FEATURES CREATE ATTRACTIVE INVESTMENT OPPORTUNITY COMPETITIVE ACCESS TO STRANDED FEEDSTOCK Strategic location in Western Siberia home to the majority of hydrocarbon feedstock reserves in Russia Extensive infrastructure creating high barriers to entry Long-term contracts with pricing formulas that result in high margins LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET Domestic petchem consumption lagging behind developed economies Largest player in domestic petchem ROBUST PROFITABILITY THROUGH THE CYCLES Portfolio diversification across geographies and demand drivers Cost base in oil-linked Russian currency and revenues mainly in hard currencies serve as a natural hedge against energy cycles Complementary energy and petchem businesses resist oil shocks A leading EBITDA margin in petchem universe UNIQUE GROWTH STRATEGY Polyolefin production in Western Siberia efficient monetisation of ample feedstock stranded in the region ZapSib large-scale polyolefin capacity in Western Siberia to capture best-in-class margins Proven track record in execution of investment projects in Russia 7

8 1 COMPETITIVE ACCESS TO STRANDED FEEDSTOCK STRATEGICALLY LOCATED IN WESTERN SIBERIA AT THE HEART OF HYDROCARBON FEEDSTOCK RESERVES IN RUSSIA 3% 2% Moscow Black Sea and Caspian sea region North-European Russia 6% 1% 21% 4% 57% Volga-Urals region Tobolsk 87% WESTERN SIBERIA SIBUR feedstock base OIL FIELD C 1 C 2 C 3 C 4 C 5 C 6 C 7+ APG by- product of oil production Eastern Siberia 10% 3% feedstock for SIBUR core products for oil & gas companies Far East 3% 3% GAS FIELD C 1 C 2 C 3 C 4 C 5 C 6 C 7+ Unstable gas condensate by- product of gas production % Region s share in Russian oil production % Region s share in Russian gas production Source: estimate based on CDU TEK and companies data. 8

9 1 COMPETITIVE ACCESS TO STRANDED FEEDSTOCK INTEGRATED PLATFORM WITH UNIQUE LARGE-SCALE TRANSPORTATION AND FEEDSTOCK PROCESSING INFRASTRUCTURE INTEGRATED INFRASTRUCTURE SIBUR owns and operates the largest and most extensive infrastructure for processing and transportation of feedstock in Western Siberia 8 (1) out 10 gas processing plants (GPP) in Western Siberia Pipeline network of 2,712 km ACCESS TO FEEDSTOCK (2) SIBUR is the largest processor of oil&gas production by-products: 57% of APG produced in Russia 71% of raw NGL produced in Russia SIBUR ASSET BASE IN WESTERN SIBERIA Purovsky GCP (NOVATEK) HIGH BARRIERS TO ENTRY No third-party gas processing capacity additions in the region in the last two decades SIBUR has invested $4.4 bln (3) since 2009 in expansion and upgrade of the gas processing and transportation infrastructure in the region, incl: APG capacity increased 20% to 25.4 bcmpa Fractionation capacity increased 2x to 8 mtpa SIBUR Tobolsk Production Site SIBUR infrastructure SIBUR newly constructed / upgraded assets Third-party infrastructure (1) Including Yuzhno-Priobskiy GPP operated under JV. (2) Source: CDU TEK. (3) Does not include financing of JV and petchem capacities construction. 9

10 Feedstock competitively priced vs other geographies Pricing drivers Contracts* 1 COMPETITIVE ACCESS TO STRANDED FEEDSTOCK LONG-TERM CONTRACTS WITH PRICING FORMULAS THAT SECURE SIBUR MARGINS APG Source for ~65% of NGLs available to SIBUR 92% of APG supplies for 2017 guaranteed under multi-year contracts WA maturity of supply contracts 14.3 years Key suppliers: Rosneft, Gazprom Neft, RussNeft, LUKOIL NGLs Source for ~35% of NGLs available to SIBUR 87% of NGLs supplies for 2017 guaranteed under multi-year contracts WA maturity of supply contracts 16.1 years Key suppliers: NOVATEK, Gazprom For suppliers: limited options for alternative APG utilisation and flaring fines Two types of contracts regulating purchase price indexation: in line with changes in NGLs and natural gas prices in line with indexation of natural gas prices only Purchase price is driven by NGLs netbacks and feedstock fraction composition $/MMBtu 4 SIBUR APG avg purchase price** Russian regulated natural gas Saudi Arabia ethane* US natural gas US ethane $/tonne 600 SIBUR raw NGL avg purchase price** SIBUR avg NGLs petchem feedstock cost*** LPG mix NA LPG mix ARA Naphtha ARA Naphtha NA Source: Bloomberg, Argus. SIBUR APG purchase prices are converted at rate to translate into MMBtu and at the following /$ average exchange rates: 58, 67 and 61 for the years 2017, 2016 and 2015, respectively. * As of 31 December 2017, unless otherwise stated. ** SIBUR carries modest cost of separation of APG and raw NGL into components. *** Represents effective average intragroup price, at which NGLs are sold from F&E segment to petchem segments. These prices are determined based on netbacks

11 CAGR, LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET LEADING PLAYER IN THE ATTRACTIVE DOMESTIC MARKET # in SIBUR domestic revenue (1) #1 SIBUR s Leading Position in Russia (2017) PP Russian Market Growth Fundamentals Kg per Capita Consumption of Polyolefins (2016) Polypropylene USA 19 USA Polyethylene 40 #2 PET Western Europe 18 Western Europe 30 #3 LDPE China 16 China 18 #4 BOPP-films Russia 8 Russia 13 #7 Expandable polystyrene Russia Consumption Growth Outlook #8 SBS LLDPE HDPE 3,9% 5,4% #10 BR PP 3,3% #12 SBR LDPE 3,2% Source: Nexant Limited, IISPR, Alliance Analytics, Market report. (1) Based on product ranking in SIBUR domestic revenue from petrochemicals sales. #5 MTBE, #6 ethylene, #9 glycols, #11 alcohols. 11

12 3 ROBUST PROFITABILITY THROUGH THE CYCLES PORTFOLIO DIVERSIFICATION: WIDE RANGE OF DEMAND DRIVERS SUSTAINING RESILIENT PERFORMANCE Feedstock & Energy Olefins & Polyolefins Plastics, Elastomers & Intermediates Endcustomers 55 % Petrochemicals Utilities and fuels Traders Other % 9 9 FMCG, packaging Traders Construction Chemicals Other % Chemicals Automotive Construction Fuels FMCG Traders Other Key drivers Commodity cycle, global oil prices Transportation costs and export duties Indexation of regulated natural gas prices Demand/supply in multiple end-customer markets Import substitution on domestic market Demand/supply in multiple end-customer markets Elastomers driven by natural rubber prices and crude C 4 balances 12

13 3 ROBUST PROFITABILITY THROUGH THE CYCLES NATURAL HEDGE: COUNTERBALANCING CHANGES IN OIL AND FX SUSTAIN SIBUR MARGIN ILLUSTRATIVE Russian Rouble vs. Oil (1) 140% Brent $/bbl /$ 130% 120% 110% 100% 90% 80% 70% 60% Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec-17 Other MTBE Plastics & Elastomers Olefins & polyolefins Natural gas LPG & naphtha SIBUR Revenue and Costs: Exposure to Oil and FX 14% 5% 22% 19% 10% 30% Revenue $ 7.8 bln OpEx $ 5.6 bln Hard currency ($, ) Correlation with oil 17% 11% 12% 12% 20% 28% FY 2017 Other D&A Staff Energy Transportation & logistics Feedstock & materials (1) Source: Bloomberg. 13

14 DOWNSTREAM INTEGRATION: FOUNDATION OF THE RESILIENT PERFORMANCE AND STABLE MARGINS 109 2, % % (8%) +30% 3 ROBUST PROFITABILITY THROUGH THE CYCLES 100 (47%) Brent price (avg $/bbl) % (17%) (17%) SIBUR EBITDA +32% 2,7 2,8 ($ bln) 2,2 (6%) 2,1 SIBUR EBITDA 161 ( bln) % % 89 Feedstock & Energy % % (1) 36% 34% 35% Olefins & Polyolefins Plastics, Elastomers & Intermediates Unallocated EBITDA margin (1) Adjusted for estimated value of naphtha trading operations via Ust-Luga, ceased in

15 A LEADING STABLE EBITDA MARGIN 3 ROBUST PROFITABILITY THROUGH THE CYCLES 40% 35% 30% 25% (1) 20% 15% 10% (2) % Source: Bloomberg, data of certain companies for 2017 was not available as of the date of this presentation. (1) Nizhnekamskneftekhim. (2) Up to 2015 inclusively data is presented for the Dow Chemical Company. 15

16 POLYOLEFINS 4 UNIQUE GROWTH STRATEGY POLYOLEFIN PRODUCTION IN WESTERN SIBERIA EFFICIENT MONETISATION OF AMPLE FEEDSTOCK STRANDED IN THE REGION Rationale for Polyolefin Production (1) Tobolsk PP: Benchmark Case for ZapSib LPG (2) LPG Market price Transport & duties LPG netback in Tobolsk 1 Raw NGL Liquids - Primarily sold to Europe - Subject to export duty - Shipped in specialised rail cars - Empty-run pay 500 ktpa of PP launched in the end of kt PP output achieved in EBITDA contribution 20 bln ($342 mln) EBITDA margin: 55% Conversion cost (3) Added value Sustained O&P Spread ($/tn) avg spread 670 $/tn Polyolefin netback in Tobolsk Transport & duties Polyolefin market price 2 Raw NGL Liquids Polyolefins - Sold in Russia, Asia, Europe - Shipped in regular containers - Higher international benchmarks - Lower volumes Feedstock (LPG CIF ARA) End-product (PP raffia China Main Port. Spot) (1) Illustrative. (2) Per 1.3 tonne of LPG utilised for production of 1 tonne of polyolefins. (3) Polyolefin production cost less by-products. 16

17 Cash Cost ($/tonne) 4 UNIQUE GROWTH STRATEGY ZAPSIB SCALE-UP OF POLYOLEFIN PRODUCTION IN WESTERN SIBERIA Project Description Design capacity: Ethylene cracker: 1,500 ktpa of ethylene and 525 ktpa of propylene Polyethylene (PE):1,500 ktpa Polypropylene (PP): 500 ktpa Location: close proximity to the existing SIBUR production site in Tobolsk Mechanical completion: Q Leading global players involved: Licensors: Linde, INEOS, Lyondellbasell EPC contractors: Linde, Technip, ThyssenKrupp Strong Position on the Ethylene Cost Curve (2021) Middle East ZapSib USA Russia Western Europe China Source: Nexant ZapSib Source: Nexant Ethylene cumulative capacity (mtpa) Oil Price Scenarios High Case 70 $/bbl Medium Case 50 $/bbl Low Case 30 $/bbl ethane 10% propane 55% n-butane 35% ethylene cracker ethylene 1,500 propylene 525 butadiene PE (1) 1,500 PP 500 ktpa Strong position on global ethylene cost curve: competitively priced stranded feedstock Production Scheme Reducing exposure to energy price volatility 94 Project CapEx for (2) and Current Status (1) PE includes HDPE and LLDPE. (2) Data as of 31 December Numbers and respective percentages calculated based on exchange rates as of 31 December 2017: /$ at 57.6, / at (3) Cash balances as of 31 December VEB stands for Vnesheconombank. RDIF stands for Russian Direct Investment Fund. ECA stands for Export Credit Agency. $ 40% 30% 30% Residual Budget $4.2 bln 55% 10% 35% Funding Sources SIBUR own funds VEB & RDIF (3) ECA (3) 71% overall execution progress as of 31 Dec bln (excl. VAT) invested as of 31 Dec 17 since the project launch 17

18 UNIQUE FEATURES CREATE ATTRACTIVE INVESTMENT OPPORTUNITY COMPETITIVE ACCESS TO STRANDED FEEDSTOCK LEADERSHIP IN ATTRACTIVE DOMESTIC MARKET ROBUST PROFITABILITY THROUGH THE CYCLES UNIQUE GROWTH STRATEGY 18

19 REPORTING CALENDAR AND IR CONTACT DETAILS +7 (495) (*39-47) Reporting Calendar FY February 2018 Q May 2018 H August M 2018 October

20 Frequently Asked Questions SIBUR business 1. How do APG and raw NGL processing economics compare? 2. What is the correlation of petchem prices with oil? 3. What is the history of SIBUR s credit rating? 4. What are SIBUR achievements in EHS (1)? ZapSib 5. How is progress evaluated for investment projects? 6. What is the track record of SIBUR team in investment projects execution? 7. How will SIBUR feedstock allocation change after the launch of the project? 8. How competitive is ZapSib at delivery to target markets? Strategy 9. What is the strategy post 2020? 10. What is the growth potential in polyolefins and trends in key geographies? Corporate 11. What is SIBUR shareholder structure and Board of Directors? What is SIBUR dividend policy? (1) Environmental, Health & Safety. 20

21 1. How do APG and raw NGL processing economics compare? Illustrative Margin of APG Processing Margins high but volatile (relatively to NGLs feedstock processing) Illustrative Margin of NGL Processing Margin substantially lower vs. APG processing but is highly robust and stable as purchase and selling prices are strongly correlated Processed NGL selling price Processed NGL selling price Natural gas selling price APG purchase price NGL purchase price SIBUR has significantly increased share of NGLs in feedstock securing higher earning sustainability thanks to stable NGLs economics 21

22 2. What is the correlation of petchem prices with oil? In $, Rebased to % 80% 60% 40% Feedstock & Energy Olefins & Polyolefins 20% Brent Naphtha 0% LPG CIF ARA (large) Natural gas /$ on secondary axis In $, Rebased to 100 /$ on secondary axis 250% 140% 250% 200% 120% 200% 100% 150% 80% 150% 100% 60% 100% 50% 40% 50% 20% LDPE PP raffia China Main Port 0% PP MRC CPT Moscow Brent 0% 0% Plastics, Elastomers & Intermediates (1/2) Plastics, Elastomers & Intermediates (2/2) In $, Rebased to 100 /$ on secondary axis In $, Rebased to 100 /$ on secondary axis 160% 250% 250% 140% 100% 120% 200% 200% 100% 80% 150% 150% 80% 60% 100% 60% 100% 40% 20% 50% 40% 50% 0% 0% 20% 0% Natural Rubber Styrene /$ Butadiene Contract, FD NWE Brent Polystyrene MEG MTBE PET Brent /$ Source: Argus, Platts, Bloomberg, ICIS, Malaysian Rubber Board, Chemease, Federal Antimonopoly Service of Russian Federation. 22

23 3. What is the history of SIBUR s credit rating? Agency Initial rating Actual current rating Latest review Moody s Ba2 (2007) Baa3, Stable January 2018 Fitch BB (2007) BB+, Positive April 2018 No downgrades at times of turbulence and IG assigned in 2018 A-/A3 BBB+/Baa1 BBB/Baa2 RUSSIA Moody s RUSSIA - Fitch SIBUR - Fitch SIBUR - Moody s SIBUR first rated IG by Moody s and above sovereign BBB-/Baa3 BB+/Ba1 BB/Ba2 BB-/Ba Sources: Moody s, Fitch. 23

24 4. What are SIBUR achievements in EHS (1)? SIBUR prevented about 7 million tonnes of harmful emissions and 71 million tonnes of CO 2 equivalent by processing 22.4 bcm of APG in 2016 Air Pollutant Emissions 000 tonnes LTIF (2) 0,81 0,81 0,76 0,73 0,63 0,3 CO 2 emissions efficiency 92% СО tonnes Waste Generation Mcm (3) Water Discharge 8% "converted" into products SIBUR emissions (1) Environmental, Health & Safety. (2) Lost Time Injury Frequency. (3) Million cubic meters. 24

25 5. How is progress evaluated for investment projects? Project Evaluation 1 FEED: front-end engineering and design Project Execution DETAIL ENGINEERING: drafting of project documentation Stage Progress = PROCUREMENT: manufacturing of equipment and its delivery to construction site Stage Progress = j β j M j β j weight of the item j in the overall cost of items procured for the project M j % completion of the item j (measured by the contractor based on the discrete milestone chain applicable for the item j) CONSTRUCTION: assembling and installation of equipment, construction of production site facilities Stage Progress = i k α i M i γ k P k α i weight of the document i in the project documentation pack (measured by the contractor based on complexity and labor content) M i % completion of the document i (measured by the contractor based on the discrete milestone chain applicable for the document i) γ k weight of the item k in the overall volume of construction man-hours P k % completion of the item k (measured by the owner based on the actual work completed) 25

26 6. What is the track record of SIBUR team in investment projects execution? Terms Committed in 2013 in Eurobond Prospectus vs Actuals Investment project Location Budget Execution Estimated expenditures ( bln) Purovsk Tobolsk raw NGL pipeline Western Siberia 69.7 New PP production Tobolsk 56.8 Ust-Luga Terminal Leningrad region 20.6 GFU expansion from 3.8 to 6 mtpa Tobolsk 14.1 Steam cracker upgrade Kstovo 8.3 New TPE production Voronezh 4.4 Expansion of propylene intermediate depot Tobolsk 2.6 New BOPP-film production Tomsk 2.5 Expansion of BOPP-film production Samara region 2.1 Republic of Expansion of PET production 1.8 Bashkorstostan Expansion of IIR production Togliatti ,9% -29,7% -19,7% -10,9% -7,6% -8,1% Budget Variance 1,5% 3,3% 2,6% 6,6% 11,6% Completion Year Estimated Actual

27 7. ZapSib: How will SIBUR feedstock allocation change after the launch of the project? F 36% 62% ZapSib 64% 5% PP in Tobolsk PP in Tobolsk Petchem 33% Petchem 38% Sources Uses Sources Uses SIBUR s raw NGL production (sourced from APG) Third-party NGLs supplies Energy products Petrochemicals Higher share of feedstock is processed internally into petrochemical products providing higher margins 27

28 Delivered to China Cash Cost ($/tonne) Cash Cost ($/tonne) Delivered to W.Europe Cash Cost ($/tonne) Cash Cost ($/tonne) 8. How competitive is ZapSib at delivery to target markets? HDPE (2021) PP (2021) 2021 WE $50 Middle East Russia USA (incl. ZapSib) WE $50 Middle East (incl. ZapSib) Russia United States Cumulative Capacity (mtpa) Cumulative Capacity (mtpa) China $50 Middle East Russia USA (incl. ZapSib) China $50 Middle East (incl. ZapSib) Russia United States Cumulative Capacity (mtpa) Cumulative Capacity (mtpa) Source: Nexant Limited. 28

29 9. What is the strategy post 2020? (I) Gazprom and SIBUR Joint investment project on construction of gas processing and chemical hub in the Amur region (final investment decision expected after completion of basic design stage not earlier than 2018) EASTERN SIBERIA Products: methane, ethane, propane, butane, pentane-hexane fraction Gas processing capacity (1) 42 bcm (2) Helium production capacity 60 mcm (3) WESTERN SIBERIA Chayandinskoye Kovyktinskoye 2 4 Irkutsk Power of Siberia Gas Pipeline Amur GPP (Gazprom) Skovorodino Svobodny Blagoveshchensk Amur Chemical Plant (SIBUR) (II) Ideas for further strategic development Ethane sourcing as petrochemical feedstock leveraging third-party infrastructure Nexant estimates ethane utilisation in petchem feedstock in Russia ~10% Opportunities for monetisation of dry natural gas via petchem value chain (1) Source: Gazprom. (2) Billion cubic metres. (3) Million cubic metres. New Feedstock New Products Products with domestic potential for high growth and import substitution, for instance Dioctyl terephthalate (DOTP) and Maleic anhydride recently launched Intermediates with local shortage, which limits development of their derivative product families, for instance Ethylene oxide 29

30 10. What is the growth potential in polyolefins and trends in key geographies? PE & PP Most Widely Used Polymers 2016 world total polymers consumption: 243 mt Other PP HomoPP PET 11 RCP 8 26 ICP PVC LDPE 17 9 % 12 LLDPE 17 HDPE PE & PP Sustainably Grow Faster than World GDP Global consumption of PO grows faster than World GDP PE PP: 5.0% 4.1% PP mtpa PE: 3.8% 3.9% GDP (RHS) GDP: 2.7% 3.1% % F 2024F 4% 3% 2% 1% 0% PE & PP Net Trades by Key Markets (mtpa) China Western Europe Turkey Russia USA PE PP PE PP PE PP PE PP PE PP Source: IHS Markit, Nexant. 30

31 11. What is SIBUR shareholder structure and Board of Directors? What is SIBUR dividend policy? Shareholder Structure (1) Board of Directors Current & former senior SIBUR managers 10,0 14,5 Gennady Timchenko 10,0 17,0 % 48,5 Leonid Mikhelson 25% payout ratio targeted by dividend policy based on IFRS results of the relevant fiscal period and adjusted for exceptional non-cash income and expenses Leonid Mikhelson Chairman of the Management Board of NOVATEK Dmitry Konov Chairman of the Management Board of PJSC SIBUR Holding Denis Nikienko CEO of Ladoga Management Kirill Shamalov President of Ladoga Management Gennady Timchenko Member of the Board of Directors of NOVATEK Alexander Dyukov CEO of Gazprom Neft Wang Dan Executive Vice President of the Silk Road Fund Vladimir Razumov Member of the Management Board of PJSC SIBUR Holding Ilya Tafintsev Strategic Projects Director of NOVATEK Ruben Vardanyan (2) President of Vardanyan, Broitman & Partners Chang Zhenyong Vice President of Sinopec (1) As of December (2) Independent director in accordance with director independence criteria established by Russian law. 31

32 SIBUR FINANCIAL PROFILE 32

33 FINANCIAL PERFORMANCE Revenue, $ bln EBITDA, $ bln EBITDA margin, % 31% 35% 30% 29% 32% (1) 36% 34% 35% % ,3 (1) 6,2 6,1 7,8 0,8 1,9 2,9 2,6 2,5 2,7 2,2 2,1 2, Net debt/ EBITDA ($) 1.6x 0.7x 0.7x 1.0x 1.1x 1.2x 1.8x 2.2x 1.7x Ba2 Ba2 Ba2 Ba1 Ba1 Ba1 Ba1 Ba1 Baa3 BB BB BB BB+ BB+ BB+ BB+ BB+ BB+ (1) Adjusted for the estimated value of naphtha trading operations via Ust-Luga, ceased in

34 USD Equivalents, bln (illustrative) Russian Roubles, bln SIBUR FINANCIAL SUMMARY (1) Revenue Adj. EBITDA Operating Cash Flow Investing Cash Flow (2) Net Leverage +10% % % (18%) ,0x 1,6x Dec Dec 2017 Revenue Adj. EBITDA Operating Cash Flow Investing Cash Flow (2) Net Leverage 6,1 +27% 7,8 2,2 +30% 2,9 2,1 +27% 2,6 (5%) 2,2x 2,1 2,0 1,7x Dec Dec 2017 Share of JVs and associates EBITDA (1) Values in USD estimated based on average /$ rate of 58.4 and 67.0 in 2017 and 2016, respectively. Net Debt for the purpose of Net Leverage calculation is converted in USD with respective end-of-period /$ and / exchange rates. (2) Includes CapEx and M&A. 34

35 CASH FLOWS HIGHLIGHTS FY 2016 Cash Flow Reconciliation FY 2017 Cash Flow Reconciliation bln Net CF: (111) bln Net CF: (12) 138 (146) (135) 22 (16) (20) 48 (25) (16) (64) Net OCF CapEx (1) Interest Dividends Net debt & bank fees repayment/ settlement 2 Other Cash as of Net OCF CapEx (1) M&A Interest Dividends & bank fees (23) Net debt repayment 7 Other Cash as of Key Factors Net cash from operating activities increased by 11% y-o-y due to increase in EBITDA largely offset by higher income tax paid Net cash used in investing activities decreased by 18% y-o-y on proceeds from the divestment of AO Uralorgsintez for cash consideration of RR 22 bln 7% decrease in CapEx Net cash used in financing activities decreased by half mainly as a result of lower debt repayment compared to last year (1) Includes purchase of property, plant and equipment, intangible assets and other non-current assets. 35

36 DEBT PROFILE Key Figures RR bln, except as stated 31 Jan Dec Dec 2016 Change, 31 Jan 18 to 31 Dec 17, % Total debt (17.0%) Conventional debt (38.1%) ZapSib related debt % Cash & cash equivalents (47.7%) Net debt (10.3%) Conventional net debt (45.0%) ZapSib related net debt % WA loan tenor (years) WA Conventional debt WA ZapSib related debt Available credit lines, incl % Committed % Leverage Ratios 31 Dec Dec 2016 Debt / EBITDA 1.9x 2.4x Debt / EBITDA (in $) 2.0x 2.7x Net debt / EBITDA 1.6x 2.0x Conventional net debt 0.6x 1.2x ZapSib related net debt 1.0x 0.8x Net debt / EBITDA (in $) 1.7x 2.2x $ / / Long-term/Short-term Fixed/Floating Unsecured Overview As of 31 Jan 18 vs. 31 Dec 17 total debt decreased by 17.0% and net debt decreased by 10.3% mainly due to substantial repayments of conventional debt Average tenor improved to 7.4 from 6.8 years following Eurobond 23 placement and redemption of Eurobond 18 As of 31 Dec 17 net leverage decreased to 1.6x from 2.0x as of 31 Dec 16 conventional net leverage decreased to 0.6x from 1.2x on recent debt repayments ZapSib net leverage increased to 1.0x from 0.8x on on-going project financing Loan portfolio structure as of 31 Jan 18 35% 56% 98% 100% 23% 19% 65% 2% 36

37 LIQUIDITY AND DEBT MATURITY PROFILE (1) As of 31 January 2018, bln 302 uncommitted credit lines 138 committed credit lines 132 ZapSib mechanical completion cash & cash equiv Liquidity After 2028 loans Eurobonds RR bonds ECA NWF undrawn EUR ECA (1) Items denominated in $ and are converted into at /$ and / FX rates as of 31 January

38 Feedstock processing capacity, Transportation infrastructure Petrochemicals Other TOTAL INVESTMENT PROGRAMME $ bln (excl. VAT) $ 15.1 bln $ 17.8 bln $ bln (excl. VAT) ZapSib Accumulated Net OCF Accumulated EBITDA ZapSib 2018F 2020F (1) 1, in 7yrs 5,1 4,2 5.3 in 3yrs 3,4 1,7 Transportation infrastructure Feedstock processing capacity Petrochemicals Maintenance, R&D, IT, and other TOTAL 4,2 Petrochemicals Maintenance, R&D, IT, and other TOTAL CapEx budget for 2018 at $ 3.0 (1) bln (excl. VAT) CapEx includes purchase of property, plant and equipment, as well as purchase of intangible assets and other non-current assets. (1) Translated in $ using exchange rate as of 31 December 2017: 57.6 /$ and 58.9 / 38