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Transcription:

Q1 2018 Operational and Financial Results 15 May 2018

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

Q1 2018 HIGHLIGHTS Credit Ratings Moody s Corporate Developments Moody s upgraded SIBUR to investment grade Baa3 with stable outlook and above sovereign rating Fitch changed outlook for SIBUR s BB+ rating from negative to positive Baa3 stable Fitch BB+ positive Total By Stage FEED Detail Engineering ZapSib Progress 38% 47% 71% 79% 31 Dec 2016 30 Apr 2017 31 Dec 2017 30 Apr 2018 100% 100% Mechanical completion in Q2 2019 Amur GCC Update Preliminary agreement with Gazprom for ethane supplies to Amur GCC Procurement Construction 67% 96% Board of Directors BoD expanded to 12 members with four independent directors Independent directors chair the Audit Committee and Human Resources & Remuneration Committee CapEx Financing for the project in Q1 18 totaled 24.9 bln (excl. VAT) 3

Q1 2018 OPERATIONAL SUMMARY Feedstock Processing F&E Sales PetChem Sales APG Processing (1) Natural Gas Sales Polyolefin Sales bln m 3 +2% bln m 3 +2% 000 tn +3% 5.3 5.5 4.4 4.5 69 67 135 143 PE (LDPE) PP Raw NGL Fractionation (2) LPG and Naphtha Sales Plastics & Elastomers Sales mln tn +11% 1.8 1.9 000 tn 207 1,067 +18% 202 1,305 000 tn (1%) 130 124 193 197 Naphtha LPG Elastomers Plastics and organic synthesis products (1) Excluding third-party volumes. (2) Including volumes processed at third-party capacities and excluding third-party volumes processed at SIBUR capacities. 4

USD Equivalents, mln (illustrative) Russian Roubles, bln Q1 2018 FINANCIAL SUMMARY (1) Revenue EBITDA Adj. EBITDA (2) CapEx Net Leverage +12% 107 120 +5% 40 42 +6% 42 44 22 +43% 32 1.6x 1.6x 31 Dec 2017 31 Mar 2018 Revenue EBITDA Adj. EBITDA (2) CapEx Net Leverage +16% 1,823 2,111 +8% 685 743 +9% 716 782 +48% 380 560 1.7x 1.7x 31 Dec 2017 31 Mar 2018 (1) Values in USD estimated based on average /$ rate of 56.9 and 58.8 in 2018 and 2017, respectively. Net Debt for the purpose of Net Leverage calculation is converted in USD with respective end-of-period /$ and / exchange rates. (2) EBITDA adjusted for the Group s portion of EBITDA of joint ventures and associates. 5

MACRO ENVIRONMENT Average Oil Price (Brent) (1) Russian GDP (2) CPI & PPI (12M ended 31 Mar 18) (3) 53.8 +24% 66.8 0.5% 1.5% 2.4% 4.8% CPI PPI Average Exchange Rate (4) EOP Exchange Rate (4) Tariffs Indexation / $ (3%) 58.8 56.9 (1%) 57.6 57.3 31 Dec 17 31 Mar 18 +2% 68.9 70.6 Indexation Rate Effective Date 3.9% Jul 2017 Description Regulated natural gas price 5.4% Jan 2018 Railway transportation tariff / $ / 6.1% 2018/2017 SIBUR effective avg. electricity tariff (1) Bloomberg. (2) Q1 2017 - Russian Federal State Statistics Service; Q1 2018 - Bank of Russia estimates (1.5-1.8%). (3) Russian Federal State Statistics Service (4) Bank of Russia. 6

PRICING ENVIRONMENT Feedstock & Energy Olefins & Polyolefins In $, rebased to 100 130% 110% 90% Change Y-o-Y +24% Brent +18% Naphtha +6% LPG DAF Brest +7% Natural gas +7% LPG CIF ARA (large) (3%) / $ In $, rebased to 100 130% 120% 110% 100% 90% Change Y-o-Y +24% Brent +17% PP Raffia China main port +12% PP MRC CPT Moscow (3%) / $ (6%) LDPE 70% 80% 200% 170% 140% 110% 80% 50% In $, rebased to 100 Plastics, Elastomers & Intermediates (1/2) Change Y-o-Y +24% Brent +4% Styrene (32%) Butadiene Contract, FD NWE (3%) / $ (31%) Natural Rubber In $, rebased to 100 130% 120% 110% 100% 90% 80% Plastics, Elastomers & Intermediates (2/2) Change Y-o-Y +14% MEG +24% Brent +15% PET +11% MTBE +4% Polystyrene (3%) / $ Source: Argus, Platts, Bloomberg, ICIS, Chemease, Malaysian Rubber Board, Federal Antimonopoly Service of Russian Federation. 7

EBITDA DYNAMICS Adj. EBITDA Dynamics Segments % EBITDA margin 42.1 bln 38% Q1 2017 40.3 EBITDA by Segment ( bln) % EBITDA margin 5.9 F&E 2017 2018 20.7 26.6 39% 41% (2.4) O&P 2017 2018 12.0 9.6 42% 32% +6% ( bln) (2.7) PE&I 2017 2018 9.3 6.6 24% 18% 1.0 Unallocated 2017 2018 (1.6) (0.6) 0.4 JV EBITDA 2017 2018 1.8 2.2 35% 44.5 bln 42.3 Q1 2018 8

CASH FLOWS HIGHLIGHTS Q1 FY 2016 2017 Cash Flow Reconciliation Q1 FY 2017 2018 Cash Flow Reconciliation bln Net CF: (3) bln Net CF: (22) 39 (22) (5) (16) 57 33 (32) (4) 26 1 (19) Net OCF CapEx (1) Interest Net debt & bank repayment fees Other Cash as of 31 Mar 17 Net OCF CapEx (1) Interest Net debt & bank repayment fees Cash as of 31 Mar 18 Key Factors Net cash from operating activities decreased by 17% on: growth in operating cash flows before WC changes by 3.3% to RR 44 bln offset by 3x growth in income tax paid in the amount of RR 5 bln due to higher amounts of income tax prepayments utilisation during Q1 17 and by the negative impact of WC changes in the amount of RR 6 bln on substantial inventory accumulation and higher trade and other receivables related to NIPIGAZ project management services Net cash used in investing activities increased by half year-on-year on higher ZapSib CapEx Net cash used in financing activities increased by 10% primarily due to higher net debt repayment (1) Includes purchase of property, plant and equipment, intangible assets and other non-current assets. 9

DEBT PROFILE Key Figures RR bln, except as stated 30 Apr 2018 31 Mar 2018 31 Dec 2017 Change, 30 Apr 18 to 31 Dec 17, % Total debt 322.0 293.1 312.3 3.1% Conventional debt 123.8 113.5 139.1 (11.0%) ZapSib related debt 198.2 179.5 173.2 14.4% Cash & cash equivalents 21.3 26.1 48.5 (56.2%) Net debt 300.8 267.0 263.9 14.0% Conventional net debt 108.1 95.4 102.4 5.6% ZapSib related net debt 192.7 171.6 161.4 19.4% WA loan tenor (years) 7.1 7.3 6.9 WA Conventional debt 3.4 3.6 3.1 WA ZapSib related debt 9.4 9.5 9.9 Available credit lines, incl. 317.0 302.5 271.3 Committed 142.6 133.3 131.8 Overview As of 31 Mar 18 vs. 31 Dec 17 total debt decreased by 6.2% due to substantial repayment of conventional debt, primarily related to Eurobond 18 redemption As of 30 Apr 18 vs. 31 Dec 17 total debt increased by 3.1% due to RR depreciation against USD and euro and new drawdowns on ZapSib As of 30 Apr 18 average tenor improved to 7.1 from 6.9 yrs as of 31 Dec 17 following Eurobond 18 redemption As of 31 Mar 18 net leverage remained stable at 1.6x compared to 31 Dec 17 conventional net leverage remained at 0.6x ZapSib net leverage remained at 1.0x Leverage Ratios 31 Mar 2018 31 Dec 2017 Debt / EBITDA 1.8x 1.9x Debt / EBITDA (in $) 1.8x 2.0x Net debt / EBITDA 1.6x 1.6x Conventional net debt 0.6x 0.6x ZapSib related net debt 1.0x 1.0x Net debt / EBITDA (in $) 1.7x 1.7x Loan portfolio structure as of 31 Mar 18 $ / / 57% 22% 20% Long-term/Short-term 98% Fixed/Floating 36% 64% Unsecured 100% 2% 10

LIQUIDITY AND DEBT MATURITY PROFILE (1) As of 30 Apr 2018, bln uncommitted credit lines 175 committed credit lines cash & cash equiv. 143 21 9 47 33 34 25 70 17 17 15 15 10 Liquidity 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 After 2028 loans Eurobonds RR bonds ECA NWF undrawn EUR ECA 117 (1) Items denominated in $ and are converted into at /$ and / FX rates as of 30 Apr 2018. 11

FINANCIAL CALENDAR 2018 Operational and Financial Results Date Q1 2018 May 2018 H1 2018 August 2018 9M 2018 October 2018 FY 2018 February 2019 12

APPENDIX 13

F&E (FEEDSTOCK AND ENERGY) SEGMENT HIGHLIGHTS Segment Financial Performance Key Factors bln 39% 41% 50 41 27 21 External Revenue EBITDA EBITDA margin, % Revenue: +22% EBITDA: +29% Wider spreads between benchmark prices for liquids and purchased hydrocarbon feedstock prices Higher volumes of raw NGL purchases and fractionation Alignment of intra-group pricing calculation to reflect changes in market environment for hydrocarbons Revenue (1) Structure Q1 2018 Product Revenues Development (% change y-o-y) (1) Naphtha 13 Other sales Volume Price Total LPG +22% +7% +31% Natural gas 24 % 62 LPG Natural gas +2% +4% +6% Naphtha (2%) +13% +10% Raw NGL (100%) - (100%) (1) Represents external revenue. 14

O&P (OLEFINS & POLYOLEFINS) SEGMENT HIGHLIGHTS Segment Financial Performance Key Factors bln 42% External Revenue PP: export pricing catching up with domestic premium market 32% EBITDA 21 22 O&P Revenue: +5% 12 O&P EBITDA: (20%) 5 10 63% 50% 4 EBITDA Tobolsk PP Tobolsk PP EBITDA margin LDPE: weak market environment due to capacities additions in Asia and on-going shift in customer preferences to LLDPE grade Tighter polyolefin spreads in higher oil environment Realignment of intra-group pricing calculation to shifted alternatives for Feedstock & Energy segment Revenue (1) Structure Q1 2018 Olefins Other Product Revenues Development (% change y-o-y) (1) Volume Price Total BOPP-film PE 19 22 8 % 49 PP PP +6% +9% +15% PE (2%) (11%) (13%) BOPP-films (8%) +9% (1%) Olefins +10% +3% +13% (1) Represents external revenue. 15

PE&I (PLASTICS, ELASTOMERS & INTERMEDIATES) SEGMENT HIGHLIGHTS Segment Financial Performance Key Factors bln 24% 18% 38 36 9 7 External Revenue EBITDA EBITDA margin, % Revenue: (5%) EBITDA: (29%) Lower elastomers selling prices and sales volumes compared to high base of 2017 reflecting higher Asian demand for commodity rubbers Decrease in revenue from MTBE and fuel additives attributable to divestment of Uralorgsintez in April 2017 Positive price dynamics on plastics and organic synthesis products Higher prices for feedstock supplied internally from Feedstock & Energy segment Revenue (1) Structure Q1 2018 Intermediates and other chemicals MTBE and fuel additives 14 16 % Other sales 36 Plastics & Organic Synthesis Product Revenues Development (% change y-o-y) (1) Volume Price Total Plastics & Organic Synthesis +2% +12% +15% Elastomers (5%) (10%) (14%) MTBE & Fuel Additives (22%) +3% (20%) Elastomers 33 Intermediates and other chemicals (10%) +6% (5%) (1) Represents external revenue. 16

OPERATING EXPENSES STRUCTURE AND DYNAMICS bln 76 87 x% OpEx 71% 72% Higher feedstock and materials on higher volumes of purchased feedstock, as well as higher prices for +15% hydrocarbons due to the increase in the respective export netbacks - % of revenue Higher transportation and logistics costs due to higher transported volumes of LPG and indexation of railway tariffs Higher staff costs mostly driven by the growth in headcount of NIPIGAZ as a result of the expansion in their operations Key Factors Higher purchases of goods for resale driven by higher volumes of LPG, PP and MTBE purchases Higher costs of services provided by third parties mainly on higher expenses of NIPIGAZ related to the subcontractors A reversal of RR 3,382 bln attributable to the growth in balances of refined products pending scheduled turnarounds Feedstock & Materials Transportation and logistics Staff costs Goods for resale Services provided by third parties Other 29% 31% 21% 20% 13% 13% 6% 8% 3% 6% 28% 22% +23% +10% +16% +53% +110% (9%) 27 22 16 18 9 11 4 7 5 2 21 19 17