3. Summary
EuroChem 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
4. Summary
Vertically 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 m3
Phosphorit
Ammonium Nitrate 1,290 Oil 32 MT
Capacity by product 2012 UAN 427
CAN 420
MAP, DAP 775 K
T Ust-Luga K
Sillamae Usolskiy Potash
Feed phosphates 220 T P
Kingisepp Perm
Planned Capacity
N Moscow
M
K
EuroChem Antwerpen P Phase I (20161) 2,000
N VolgaKaliy
Kedaynyay Phase II (2019-201) 3,400
Capacity by product 2012 Novomoskovsk
Proven and probable reserves
AN / CAN 1,025 N Planned Capacity
Volgograd MMT KCl (JORC) 420
Phase I (2014-151) 2,300
NPK 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
5. Summary
EuroChem 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
7. Nitrogen
Vertically integrated producer
Murmansk
T
M
Kovdor
N N
Novomoskovskiy Azot Urengoy
Capacity by product 2012
Ammonia 1,670
Urea 1,480
Ammonium Nitrate 1,290
Sillamae
T Ust-Luga K N
UAN 427 T P Severneft Urengoy
CAN 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 m3
EuroChem Antwerpen Antwerp
Nevinnomyssk K Oil 32 MT
Capacity by product 2012 Belorechensk N
P
AN / CAN 1,025
1 025
Tuapse T M
NPK 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
8. Nitrogen
Performance
Key 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) 3
EBITDA 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
9. Nitrogen
Natural 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
11. Phosphate
Vertically 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 Kovdor
Phosphorit N
Urengoy
Capacity by product 2012
MAP, DAP 775
Feed phosphates 220 M
T Ust-Luga K
EuroChem-Kazakhstan
Sillamae
T P
P Kingisepp Perm Planned Capacity
Lifosa 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 plant
DAP 990 2,600
with ammonia (2016-17)
N
Feed phosphates 160 Volgograd
Antwerp
Reserves, MMT of P2O5 515
Nevinnomyssk K
Belorechensk N
P
P Tuapse T M
EuroChem-BMU
Capacity by product 2012 Taraz
MAP, NP 590
All capacity volumes are expressed in thousands of tonnes, except where otherwise specified
11
12. Phosphate
Performance
Key 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 Western
EBITDA 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
14. Potash
Future 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) 492
All capacity volumes are expressed in thousands of tonnes, except where otherwise specified
1Estimated ramp-up to full capacity: 2 years. 14
15. Potash
Future 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 Freight
All capacity volumes are expressed in thousands of tonnes, except where otherwise specified
1Estimated ramp-up to full capacity: 2 years. 15
16. Potash
VolgaKaliy (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 2016
Total CAPEX, USDm 920 1,027 828 569 290
VolgaKaliy 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)
17. Potash
Usolskiy 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 2016
Total CAPEX, USDm 920 1,027 828 569 290
VolgaKaliy 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)
19. Performance
Performance overview
Key Figures 2011 External sales by segment (2011)
4 1 Share Change to
FY 2011 Y-o-Y,% 3 (%) 2010 (PP)
1. Phosphates 46% -2
Revenue RUBm 131,298
131 298 +34% 2.
2 Nitrogen 40% -1
1
EBITDA RUBm 49,656 +66% 3. Distribution 11% +7
Net profit RUBm 32,031 +60% 4. Other 3% +1
Gross margin % 52% +3 pp
2
EBITDA margin % 38% +7 pp
Sales 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
20. Performance
Capital 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
21. EuroChem Story
Summary
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
22. 22
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y
further details.
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