2012 05 EuroChem Intro

Introducing EuroChemMay 2012 y

Summary Overview Nitrogen Segment Phosphate Segment Potash Segment Performance Summary

SummaryEuroChem today 3 Nitrogen plants (2 in Russia, 1 in Europe) - 2.7 MMT of Primary product capacity (MMT p.a. nutrient) ammonia and c.10 MMT of fertilizer product capacity Natural gas operator (Russia) - 1.1bn m3 of annual capacity (c.25% of PotashCorp 13.20 EuroChem’s E Ch ’ annual consumption) l ti ) Mosaic 11.10 3 Phosphate plants (2 in Russia and 1 in Lithuania) - 2.0 By 2021 MMT of MAP/DAP EuroChem 8.40 Vertical integration: own raw materials, port terminals, rail Yara 7.20 stock, construction/repair works, distribution in CIS Uralkali 6.90 Post completion Apatite and iron ore mine (Russia) - P2O5-rich (37%-38%) apatite of both projects ore (2.7 MMT per year) covers c.85% of own production needs at CF Industries 6.70 the 3 phosphate plants. Apatite co-product : up to 5.7 MMT of iron ore (Fe content 64%) Belaruskali 5.50 Logistics in Russia - 3 port facilities, 2 Panamax vessels, and own Agrium 4.70 rail facilities (c. 7,000 rail stock; 45 locomotives); Ex Russia - K+S OCP 4.40 Nitrogen platform ICL 4.40 Construction of own Potash (K) capacity is well underway (targeted capacity of c.8 MMT of KCl per year) ( f 8 f C ) K+S 4.30 Strong operational track record; all EuroChem production facilities EuroChem 3.60 are OHSAS-8001, ISO 14001 and ISO 9001 certified Now PhosAgro 2.70 Total employees of >20,000 p y TogliattiAzot 2.60 FY 2011 revenues USD 4.5bn; EBITDA USD 1.7bn Ammonia (N) UralChem 1.90 Privately owned by Andrey Melnichenko (92%) and CEO Dmitry Phosphoric Acid (P2O5) Acron 1.40 Strezhnev (8%) Potash (K2O) *MMT = million metric tonnes

SummaryVertically integrated producer M Kovdorskiy GOK N Murmansk Severneft Urengoy g y Capacity by product 2012 T N Novomoskovskiy Azot Capacity by product Iron ore 5,700 M Kovdor Natural gas 1,1bn m3 Apatite (37-38% P2O5) 2,700 Capacity by 2012 N Gas condensate 220 KT Baddeleyite 10 product Ammonia 1,670 Urengoy Proven and probable reserves P Urea 1,480 Natural gas 50bn m3Phosphorit Ammonium Nitrate 1,290 Oil 32 MTCapacity by product 2012 UAN 427 CAN 420MAP, DAP 775 K T Ust-Luga K Sillamae Usolskiy PotashFeed phosphates 220 T P Kingisepp Perm Planned Capacity N Moscow M KEuroChem Antwerpen P Phase I (20161) 2,000 N VolgaKaliy Kedaynyay Phase II (2019-201) 3,400Capacity by product 2012 Novomoskovsk Proven and probable reservesAN / CAN 1,025 N Planned Capacity Volgograd MMT KCl (JORC) 420 Phase I (2014-151) 2,300NPK 1,250 Antwerp Nevinnomyssk K Phase II (2016-171) (2016 17 4,600 P Belorechensk N Proven and probable reserves Lifosa P MMT KCl (JORC) 492 Tuapse T M M EuroChem-Kazakhstan Capacity by product 2012 DAP 990 N Taraz Planned Capacity Nevinnomysskiy Azot Feed phosphates 160 Phase I phosphate rock I, 1,500 Capacity by product 2012 30% P2O5 (2014-15) Ammonia 1,160 Phase II, NPK/AN plant P Urea 890 with ammonia (2016-17) 2,600 EuroChem-BMU Ammonium Nitrate 1,420 Reserves, MMT of P2O5 515 Capacity by UAN 1,022 2012 product NPK 460 MAP, NP 590 Melamine 50 T Port terminals All capacity volumes are expressed in thousands of tonnes, except where otherwise specified 1Estimated ramp-up to full capacity: 2 years. 4

SummaryEuroChem strategy Main strategic objective – become a top 5 company globally by earnings and nutrient capacity • N and P: secure highest competitive position on target markets ( g g (FSU and Europe) in terms of cost delivered to customer ) through integration into raw materials. • K: build a globally competitive business with up to 8 MMT p.a. capacity by 2021. Nitrogen Logistics Revamp/upgrade existing assets R / d i ti t Continuously optimize trans- Build new ammonia capacity shipment, freight and rail costs Optimize product mix Maximize return on capital tied in Secure competitive gas supply logistics assets Phosphate/mining Distribution Revamp/upgrade existing assets Focus on distribution channels in Optimize product mix target markets (FSU and Europe) Secure competitive supply of Full-scale di t ib ti networks i F ll l distribution t k in P2O5 covering 100% of needs Russia and Ukraine Potash Governance/sustainability Start own production in 2014/2015 Adhere to best practice in corporate governance, social Expand new supply capacity to 8 responsibility, and environmental MMT by 2021 through brownfield accountability. Conservative financial policy supports strategic objectives while ensuring the sustainability of investments 5

Summary OverviewNitrogen Segment Phosphate Segment Potash Segment Performance Summary

NitrogenVertically integrated producer Murmansk T M Kovdor N NNovomoskovskiy Azot UrengoyCapacity by product 2012Ammonia 1,670Urea 1,480Ammonium Nitrate 1,290 Sillamae T Ust-Luga K NUAN 427 T P Severneft UrengoyCAN 420 Kingisepp Perm Moscow Capacity by product P N Natural gas g 1,1bn m3 , Kedaynyay Novomoskovsk Gas condensate 220 KT Proven and probable reserves N N Volgograd Natural gas 50bn m3EuroChem Antwerpen Antwerp Nevinnomyssk K Oil 32 MTCapacity by product 2012 Belorechensk N PAN / CAN 1,025 1 025 Tuapse T MNPK 1,250 Taraz N Nevinnomysskiy Azot Capacity by product 2012 Ammonia 1,160 1 160 Urea 890 Ammonium Nitrate 1,420 UAN 1,022 NPK 460 Melamine 50 All capacity volumes are expressed in thousands of tonnes, except where otherwise specified 7

NitrogenPerformanceKey current / recent investment projects Sales1 by region (2011) Granulated urea (1 100 KT p a ): launched 2009/2010 at (1,100 p.a.): 6 71 Share Change to g (%) 2010 (PP) Novomoskovsk 1. Russia/CIS 33% -3 5 CAN (420 KT p.a.): launched 2009 at Novomoskovsk 2. LatAm 22% +7 Melamine (50 KT p.a.) + revamp of urea shop at 3. Asia 15% +5 Nevinnomyssk: to launch in Q2 2012 p 4. Europe 14% % -8 First nitrogen fertilizer producer to back integrate into gas 4 5. N. America 11% -1 with the acquisition of Severneft-Urengoy 6. Africa 3% -1 Construction of new granulated urea facility (Urea 4 shop) 2 7. Australasia 2% +1 LDAN production (300 KTp.a. by 2016) 3EBITDA margin Sales1 by product (2011) 45% 41% 42% 8 9 1 Share Change to 39% 7 (%) 2010 (PP) 37% 35% 1. Urea 38% +7 6 29% 2. AN 22% -1 24% 3. UAN 10% 1 5 4. NPK 7% -2 4 5. Other 7% -2 6. Ammonia 5% -4 7. Methanol 5% -1 3 2 8. CAN 3% 3 2009 2010 2011 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 9. 9 Acetic acid 3% -1 1 1Revenue and sales volumes include sales to other segments In brackets – change in percentage points relative to FY 2010) The nitrogen segment includes nitrogen fertilizers and organic synthesis products. 8

NitrogenNatural gas back integration Severneft-Urengoy (SNU) / Novomoskovskiy Cost benefits Current gas cost at Novomoskovskiy: $ C $3.25 / /mmBtu Could rise to over $4.5 /mmBtu by 2016 Benefits from SNU acquisition - assuming p q g production of 1.1bn m3 of gas and 220 KT of gas condensate : (per mmBtu) Cost of gas at the well: $1.25 + mineral resource extraction taxes: $1.081 + transportation cost to Novomoskovskiy: $1.40 - revenue from gas condensate: ($2.15) Agreement with G A t ith Gazprom on gas t transportation from SNU to t ti f t Delivered cost to Novomoskovskiy: $1.58 $1 58 Novomoskovskiy is expected to be reached before end 2012. Principles applied to gas assets by EuroChem Long-term goals Upstream part of Nitrogen; not a separate business Seek to fully cover the needs of Nitrogen production through own gas production or long-term contracts with attractive Same gas pricing assumptions applied to Nitrogen and Gas pricing internally Long-term target of 5 to 10bnm3 per year of in-house natural Stand-alone IRRs for gas need to be > IRRs of other projects g gas capacity p y 1includes the announced mineral resources extraction tax (MET) increase to RUB1,049/1,000m3 from 2015 (calculated using USD/RUB 30.0; 1,000m3 to mmBtu conversion: 32.34) 9

Summary Overview Nitrogen SegmentPhosphate Segment Potash Segment Performance Summary

PhosphateVertically integrated producer M Kovdorskiy GOK Capacity by product 2012 Murmansk Iron ore 5,700 , T Apatite (37-38% P2O5) 2,700 M Baddeleyite 10 P KovdorPhosphorit N UrengoyCapacity by product 2012MAP, DAP 775Feed phosphates 220 M T Ust-Luga K EuroChem-Kazakhstan Sillamae T P P Kingisepp Perm Planned CapacityLifosa Moscow M Phase I phosphate rock Ph I, h h t k P 1,500 N 30% P2O5 (2014-15)Capacity by product 2012 Kedaynyay Novomoskovsk Phase II, NPK/AN plantDAP 990 2,600 with ammonia (2016-17) NFeed phosphates 160 Volgograd Antwerp Reserves, MMT of P2O5 515 Nevinnomyssk K Belorechensk N P P Tuapse T MEuroChem-BMUCapacity by product 2012 TarazMAP, NP 590 All capacity volumes are expressed in thousands of tonnes, except where otherwise specified 11

PhosphatePerformanceKey current / recent investment projects Sales1 by region (2011) Increase of sulphuric acid capacity at Phosphorit from 720 to 6 1 5 Share Change to 1,000 KT p.a.; at EBMU from 520 to 720 KT p.a. 4 (%) 2010 (PP) 1. Russia/CIS 35% +1 Building NPK production at EBMU by 2014-16: 800 KT p.a. (to 2. Asia 32% +3 correspond to K production coming online in Volgograd) 3. Europe 18% - Feed h F d phosphates at Lifosa: 160 KT p.a. – completed h t t Lif l t d 6% -7 4. LatAm Kazakhstan: two-phase project, starting with phosphate rock 3 5. N. America 6% +1 supply (up to 1,500 KT per year 30% P2O5) and ending with 6. Africa 3% +2 2 construction of 2.6 MT p.a. NPK / AN / LDAN production aimed at Central Asia and North-Western China North WesternEBITDA margin Sales1 by product (2011) 40% 40% 40% 671 Share Change to 38% 37% 3 % 45 (%) 2010 (PP) 35% 34% 3 1. MAP/DAP 51% -2 2. Iron ore 35% +3 3. Feed phos. 6% - 4. NP 2% - 14% 5. Apatite 2% - 6. Baddeleyite 2% +1 7. Others 2% -1 8. NPK 0% -1 2009 2010 2011 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 2 1Revenue and sales volumes include sales to other segments In brackets – change in percentage points relative to FY 2010) The phosphate segment includes iron ore and baddeleyite (co-products of apatite production) 12

Summary Overview Nitrogen Segment Phosphate SegmentPotash Segment Performance Summary

PotashFuture potash cost leader Murmansk T K M Kovdor Usolskiy Potash N Planned Capacity Urengoy Phase I (20161) 2,000 2 000 Phase II (2019-201) 3,400 Proven and probable reserves MMT KCl (JORC) 420 T Ust-Luga K Sillamae T P Kingisepp Perm Moscow M P N Kedaynyay Novomoskovsk Antwerp N Volgograd K Nevinnomyssk VolgaKaliy K Belorechensk N P Planned Capacity Tuapse T M Phase I (2014-151) 2,300 Phase II (2016-171) 4,600 Taraz Proven and probable reserves MMT KCl (JORC) 492All capacity volumes are expressed in thousands of tonnes, except where otherwise specified1Estimated ramp-up to full capacity: 2 years. 14

PotashFuture potash cost leader K VolgaKaliy .t .t t. t. Potash global cost curve (export+domestic) in 2015 global potentia supply 73 m.t al supply 55 m.t arket WC 62 m. global market BC 65 m. 350 300 al global ma export potentia R/FCA basis, $/t 250 200 e otash cost on CFR 150 100 potential Po 50 P o t e n t i a l e x p o r t s u p p l y domestic supply - 1.7 3.5 5.3 7.0 8.8 10.6 12.4 14.1 15.9 17.7 19.4 21.2 23.0 24.7 26.5 28.2 30.0 31.8 33.5 35.3 37.1 38.8 40.6 42.4 44.1 45.9 47.7 49.4 51.2 53.0 54.7 56.5 58.3 60.0 61.8 63.6 65.3 67.1 68.9 70.6 72.4 1 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 6 7 7 Global potash market Site Cost Delivery to port Export duty FreightAll capacity volumes are expressed in thousands of tonnes, except where otherwise specified1Estimated ramp-up to full capacity: 2 years. 15

PotashVolgaKaliy (Volgograd) Characteristics Status S2 S1 License acquired in 2005 via auction process Purchase price of USD 106m License area of 33.6 km2 located in Volgograd region C Depth of 1,000–1,200 meters JORC proven and probable reserves: 492 MMT (39%-40% KCl content); JORC useful life of mine: 58 years -50m Phase I: capacity of 2.3 MMT p.a., involves the construction of social i f t t f i l infrastructure, cage shaft, skip shaft #1 and h ft ki h ft d processing facility. -100m -535m Phase II: capacity doubled to 4.6 MMT p.a., involves the construction of skip shaft #2 and expansion of processing facility. 2012 2013 2014 2015 2016Total CAPEX, USDm 920 1,027 828 569 290VolgaKaliy 691 707 521 321 14 C Cage shaft (phase I)Usolskiy Potash 229 320 307 248 276 S1 Skip shaft #1 (phase I)Total next 5 years: USD 2,254 m y , S2 Skip shaft #2 (phase II)

PotashUsolskiy Potash (Perm) Characteristics Status S2 S1 License acquired i 2008 via auction process Li i d in i ti Purchase price of USD 172m License area of 132.9 km2 in region C Depth of ca 500 meters ca.500 JORC proven and probable reserves: 420 MMT (30% KCl content); useful life of mine: 37 years Phase I: capacity of 2.0 MMT p.a., involves the construction of social infrastructure, cage shaft, skip shaft #1 and -196m -62m processing facility. Phase II: additional capacity of 1.4 MMT p.a., involves the construction of skip shaft #2 and expansion of processing facility. 2012 2013 2014 2015 2016Total CAPEX, USDm 920 1,027 828 569 290VolgaKaliy 691 707 521 321 14 C Cage shaft (phase I)Usolskiy Potash 229 320 307 248 276 S1 Skip shaft #1 (phase I)Total next 5 years: USD 1,380 m y , S2 Skip shaft #2 (phase II)

Summary OverviewNitrogen SegmentPhosphate SegmentPotash SegmentPerformance Summary

PerformancePerformance overviewKey Figures 2011 External sales by segment (2011) 4 1 Share Change to FY 2011 Y-o-Y,% 3 (%) 2010 (PP) 1. Phosphates 46% -2Revenue RUBm 131,298 131 298 +34% 2. 2 Nitrogen 40% -1 1EBITDA RUBm 49,656 +66% 3. Distribution 11% +7Net profit RUBm 32,031 +60% 4. Other 3% +1Gross margin % 52% +3 pp 2EBITDA margin % 38% +7 ppSales volumes: External sales by region (2011)Nitrogen* KMT 5,647 -Phosphate (Ph h t (excl. i l iron ore and d Share Change to KMT 2,387 -1% 78 1 (%) 2010 (PP)baddeleyite) 6 1. Russia 24% -Only iron ore and baddeleyite KMT 5,480 -11% 2. Asia 23% +4 5 3. LatAm 15% -* Includes organic synthesis products. 4. Europe 4 E 14% -5 5 2 5. CIS (exRUS) 12% -1 6. North America 8% - 4 7. Africa 3% +1 3 8. Australia 1% - 19

PerformanceCapital expenditure Main Projects 23.81 • Melamine and urea revamp at Nevinnomyssk • Granulated urea at Novomoskovsk 4.68 N Nitrogen N • Environmental monitoring stations and wastewater 20.47 treatment programs at Russian N facilities P Phosphate 18.69 • Revamp/upgrade of plants to increase efficiency 5.25 K Potash O Other 6.40 • Rebuild sulphuric acid production with capacity increase 6.79 by 720 KMTp.a.RUB bn Reconstruction of phosphate acid production with b • 4.94 P capacity increase by 300 KMTp.a. • Upgrade Kovdor wastewater treatment facility 2.65 • Revamp/upgrade of P facilities to improve efficiency 6.78 7.17 10.56 6.97 6.00 1.68 • Shaft sinking at Gremyachinskoe (phases I & II) and 6.40 0.99 Verkhnekamskoe (phase I) 1.37 K 3.85 1.71 1.80 • Start of beneficiation plant construction at 0.64 0 64 1.84 1 84 Gremyachinskoe 1.05 3.20 3.21 2.85 3.31 1.51 2.65 2.17 0.65 0.89 0.48 0.14 • Tuapse: operations commenced July 2011 2009 2010 2011 Q1 11 Q2 11 Q3 11 Q4 11 O • Purchase of 2 Panamax vessel

EuroChem StorySummary 2.1% 2 1% of the world’s nutrient capacity today world s Growth 3.0% by 2020 Russia / CIS the fastest-growing large market globally Sustained competitiveness in N and P Earnings power Benefits from iron ore as a co product of apatite mining co-product Future global cost leadership in K Greenfield potash developments Controlled risks Erosion of competitiveness on gas pricing Limited free cash flow on heavy capex over 2012-2015

22Thank you, please visit www.eurochem.ru for yfurther details. ir@eurochem.ru

2012 05 EuroChem Intro

by EuroChem on May 25, 2012

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 1

Statistics

2012 05 EuroChem Intro Presentation Transcript