PRESENTATION OF Q1 2015 RESULTS - Grupa...

PRESENTATION OF Q1 2015 RESULTS

May 13th 2015

Agenda Page

2

Overview of Grupa Azoty 3

Market overview 9

Grupa Azoty Group 15

Grupa Azoty PUŁAWY Group 24

Grupa Azoty POLICE Group 32

Grupa Azoty ZAK Group 40

Appendix 1 – Parent 46

OVERVIEW OF GRUPA AZOTY

3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Grupa Azoty S.A. Grupa Azoty ZAK Group Grupa Azoty POLICE Group Grupa Azoty PUŁAWY Group Other

4

Q1 2015 FINANCIAL HIGHLIGHTS

Q1 2015 CONSOLIDATED REVENUE STRUCTURE

REVENUE

2,839

EBITDA

485

NET PROFIT

306

EPS

2.78

(PLNm)

PERFORMANCE DRIVERS

Overview of Grupa Azoty

Higher selling prices of nitrogen and compound

fertilizers, caused by:

• favourable weather conditions

• increased purchases for the spring season

• appreciation of currencies, especially the US

dollar which is an important driver of trade

in urea, ammonium phosphate and potassium

Full capacity utilisation in the Fertilizers and

Plastics segments

Lower prices of energy carriers (gas, coal), with

an effect on EBITDA

Year-on-year PA6-Benzene delta maintained in

the Plastics segment

ESTABLISHMENT OF

THE GRUPA AZOTY

RESCUE EDUCATION

CENTRE

GRUPA AZOTY AT

THE EUROPEAN

ECONOMIC

CONGRESS

EXECUTION OF AN

AGREEMENT WITH

A BANK

CONSORTIUM FOR

THE FINANCING OF

CORPORATE NEEDS

GRUPA AZOTY AS AN

INDUSTRY PARTNER

OF THE WORLD

ECONOMIC FORUM IN

DAVOS

GRUPA AZOTY

EMPLOYEES

COVERED BY GROUP

INSURANCE WITH

LUX MED

NEGOTIATIONS OF

THE TRANSATLANTIC

TRADE AND

INVESTMENT

PARTNERSHIP (TTIP)

BETWEEN THE EU

AND THE US

5 Overview of Grupa Azoty

KEY DEVELOPMENTS

THE GROUP'S

LARGEST PROJECT

TO DATE –

CONSTRUCTION OF

THE PDH UNIT FOR

PROPYLENE

PRODUCTION

GRUPA AZOTY

INCLUDED IN THE

PRESTIGIOUS FTSE

EMERGING

MARKETS INDEX

KEY DEVELOPMENTS IN Q1 2015

GRUPA AZOTY POLICE

Net profit tripled over Q1 2014

Substantially higher compound fertilizer sales

volume relative to Q1 2014

Launch of a project to construct Europe's

largest and most advanced PDH unit for

propylene production − agreement with the

licence provider signed on May 11th 2015

GRUPA AZOTY PUŁAWY

Execution of long-term contracts for the sale

of melamine and urea

Launch of production of horticultural and

gardening fertilizers (under the WOW name) by

Agrochem Sp z o.o.

Beginning of the process of disposal of non-

core subsidiaries

Grupa Azoty PUŁAWY named Pillar of the

Economy in the Lublin Province

GRUPA AZOTY S.A.

Execution of an agreement with a bank

consortium for the financing of corporate

needs

Inclusion of Grupa Azoty S.A. in the prestigious

FTSE Emerging Markets index

Appointment of the Management Board for the

10th term of office

Establishment of the Grupa Azoty Rescue

Education Centre

GRUPA AZOTY ZAK S.A.

Market launch of a new plasticizer brand,

Oxoviflex™

Commenced revamping of the fertilizer storage

facility

Corporate approvals obtained for the

construction of a steam generator for the OXO

unit

Corporate approvals obtained for the

intensification of production of urea solutions


POLAND'S VOICE IN GLOBAL DISCUSSION

• GRUPA AZOTY'S RECOMMENDATIONS:

Increase the activity of the Polish representation in international organisations,

such as the UNIDO or the FAO. Polish officials must be better heard and should be

present where key decisions concerning the agriculture and global food problems

are made.

• Grupa Azoty has already voiced its opinions in the global forum:

- it is a member of Fertilizers Europe, the International Fertilizer Industry

Association

- it actively participates in Central European Energy Partners

- it attended the World Economic Forum Davos 2015

- it wants to support productivity growth in developing countries

ACTIVE ENGAGEMENT IN THE AREA OF FOOD SECURITY


Cash pooling

Grupa Azoty S.A.

Grupa Azoty PUŁAWY

S.A.

(guarantor)

Grupa Azoty ZAK

(guarantor)

Grupa Azoty Police

(guarantor)

Other

Group companies

NEW FINANCING MODEL FOR GRUPA AZOTY

BANKS / INVESTORS

Medium- and long-term financing

distribution

within the Group

PLN 1.5bn revolving loan

• Medium- and long-term corporate financing raised by the Parent for general purposes (the Parent's own needs

and the needs of other Group Companies), secured with sureties issued by the Key Companies

• Distribution of medium- and long-term financing between the Parent and the Group Companies

• Distribution of the day-to-day financing (real cash pooling, borrowings, notes)

• Day-to-day / short-term financing (a joint umbrella limit under overdraft and multi-purpose credit facilities)

• Project financing

KEY ASSUMPTIONS

8

LONG-TERM FINANCING

ARRANGERS

Day-to-day, short-term

financing

Overview of Grupa Azoty

MARKET OVERVIEW

9

STRONG POSITION IN TARGET MARKETS

90% of revenue derived from sales to EU markets

10

Poland

57%

-0.5%

Q1 2014

Q1 2015

South America

2%

+0.5%

Africa

2%

+1.6%

European Union 1

33%

-0.1% Asia

5%

-0.6%

Other Europe

1%

-0.5%

North America

0,5%

+0.4%

1 Excluding Poland

10 Grupa Azoty – market overview

Q1 2015 EXTERNAL FACTORS

Poland

GDP forecasts raised to an annual average

of 3.3%.

Key growth drivers: higher household

incomes, increased employment, low

interest rates, record-high exports and

economic recovery in the EU and globally.

EU

GDP growth forecast raised to an annual average of 1.8% (1.5% in the euro zone). The EU

economy is experiencing a moderate, balanced recovery.

Growth drivers: low oil prices, stable global economic growth, improved sentiment in

industry, lower interest rates supporting investments.

World

Economic growth stable, with an annual average of 3.8% of GDP. Forecast revised up.

Growth drivers: oil prices.

H2 2015 expectations: an increase in the price of oil and a higher-than-forecast decline in

economic indicators in China and South America.

11

2012 2013 2014 2015

Quarterly GDP growth rate in Poland

Grupa Azoty – market overview

Source: Central Statistics Office, IBnGR.

Q1 2015 EXTERNAL FACTORS

Pricing trends

DAP Ammonia Urea AS

Q1 2014 Q1 2015

0% -7%

-12%

6%

CPL PA6 Benzene

Q1 2014 Q1 2015

-19.5% -20.5%

-46%

Urea DAP NPK AS AN CAN UAN

'000 t

onnes

January-February 2014 January-February 2015

Imports to EU (28)

Source: EUROSTAT


MARKET OUTLOOK

13

• Lower prices of agricultural products relative to 2013/2014, adversely affecting farmers'

income; lower purchasing power of the sector leading to limited expenditure on means

of production, including fertilizers.

• In Q2, seasonal gradual decline in demand for mineral fertilizers. The decrease is less

visible on the ammonium nitrate and urea markets, where demand is expected to

remain relatively stable until June.

• Continued reorientation of the caprolactam and polyamide (PA 6) markets, affected

strongly by the growing production capacities in China.

• Less attractive imports due to depreciation of the euro against the dollar.

• Good performance of the automotive and household appliances sectors based on Q1

2015 results.

• Continued trend of substituting metal with engineering plastics.

• Slight increase in alcohol consumption in Europe, related to higher procurement figures

from construction-related sectors.

• The European titanium white prices unchanged, with a slight increase in demand in the

summer months (seasonal product).

• Steady growth of demand for AdBlue in Europe.

• Growth of melamine prices to ca EUR 20/tonne.

• Favourable situation on the key energy carrier market.

• Crude oil prices stable at current levels, though expected to increase on the back of

economic recovery − average crude price in 2015 forecast at USD 60-70 per barrel,

which may affect prices of petroleum products such as benzene, phenol or propylene.

• Potassium chloride prices at USD 315/tonne CFR China, with the price expected to

remain unchanged until the end of the year.

Fertilizers

Plastics

Chemicals

Grupa Azoty – market overview

Feedstocks

15

17

19

21

23

25

27

29

31

EUR/MWh PGNiG tariff Average natural gas price paid by the Group TTF DA* Source: ICIS.

* Net of transmission costs.

DIVERSIFICATION OF GAS SOURCES

Mallnow

Lasów

high-methane gas (E),

nitrogen-rich gas (Lw), (Ls)

pipeline

local sources

Gas prices (EUR/MWh)

NATURAL GAS DEMAND

(BCM)

2015 Q1 2015

2.1 0.58

FROM OUTSIDE THE SYSTEM

Q1 2014 Q1 2015

22.1% 35.8%


GRUPA AZOTY

GROUP

322

239 126 132

485

172

11.93%

10.09%

5.57% 5.16%

17.07%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

EBITDA

EBITDA (adjusted)*

EBITDA MARGIN

GRUPA AZOTY GROUP: KEY FINANCIALS

16

(PLNm)

2,703 2,370 2,269 2,556 2,839

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

REVENUE

151

85 9 21

306 54

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

NET PROFIT

NET PROFIT* (adjusted)

* Adjusted for impairment loss on the phthalic anhydride unit recognised in 2014.

16 Grupa Azoty Group

GRUPA AZOTY GROUP: PERFORMANCE – KEY DRIVERS

EBITDA

Decline in key product prices offset by substantially higher sales volumes and lower prices

of petroleum products and energy carriers

17

322

485

215 61 23 5 3 10 27 38

64

(PLNm)

Grupa Azoty Group

GRUPA AZOTY GROUP: PERFORMANCE BY SEGMENT

EBITDA Q1 2015

Segment (PLNm)

Revenue EBITDA

Q1

2014

Q1

2015

Q1

2014

Q1

2015

Agro Fertilizers 1,593 1,798 219 375

Plastics 375 340 -1 -2

Chemicals 651 609 67 54

Energy 51 58 16 26

Other Activities 33 34 22 32

172 172

407 485 500 485 485

235

78 15 2 17

PLNm

Fertilizers 63%

Plastics 12%

Chemicals 22%

Energy 2% Other

Activities 1%

REVENUE

Q1 2015

18

77%

11%

5% 7%

EBITDA

* Adjusted for impairment loss on the phthalic anhydride unit recognised in 2014.

Grupa Azoty Group

GRUPA AZOTY GROUP: AGRO FERTILIZERS

Volumes (PLNm) Q1

2014

Q1

2015 Change

Segment revenue,

including: 1,593 1,798 13% ↗

Nitrogen fertilizers and

ammonia 1,112 1,185 7% ↗

Compound fertilizers 364 492 35% ↗

EBITDA 219 375 71% ↗

EBITDA margin 14% 21% ↗

0

200

400

600

800

1 000

1 200

Q1 2014 Q1 2015 Compound fertilizers Nitrogen fertilizers and ammonia

8%

19

Nitrogen product prices

Source: Argus FMB, ICIS

Grain prices

'000 tonnes

0

1

2

3

4

5

0

500

1 000

1 500

2 000

2 500

1 kg N/1 kg milling wheat milling wheat

fodder corn rapeseed

200

250

300

100

300

500

700

EUR/t USD/t

Ammonia USD/t Urea USD/t

Ammonium sulfate AS USD/t Calcium ammonium nitrate CAN EUR/t

Source: Ministry of Agriculture and Rural Development

Grupa Azoty Group

GRUPA AZOTY GROUP: PLASTICS

'000 tonnes

(PLNm) Q1

2014

Q1

2015 Change

Segment revenue,

including: 375 340 -9% ↘

Polyamide 204 197 -3% ↘

Caprolactam 148 111 -25% ↘

EBITDA -1 -2 -100% ↘

EBITDA margin 0% -1% ↘

0

5

10

15

20

25

30

Q1 2014 Q1 2015 Polyamide Caprolactam

5%

20

Volumes

Prices of benzene, phenol, CPL, PA6

400

900

1 400

1 900

2 400

EUR/t

Benzene EUR/t Liquid caprolactam EUR/t PA6 EUR/t Phenol EUR/t Source: ICIS, TECNON

Grupa Azoty Group

GRUPA AZOTY GROUP: CHEMICALS

(PLNm) Q1

2014

Q1

2015 Change

Segment revenue

including: 651 609 -6% ↘

OXO products 205 142 -31% ↘

Urea (technical grade) 137 141 3% ↗

Melamine 88 96 9% ↗

Titanium white 78 74 -5% ↘

EBITDA 67 54 -19% ↘

EBITDA margin 10% 9% ↘

0

50

100

150

Q1 2014 Q1 2015 Titanium white Melamine

OXO products Technical-grade urea

21

Volumes

Prices of DEHP, 2-EH and propylene

Source: ICIS.

'000 tonnes

600

800

1000

1200

1400

1600

1800

EUR/t Propylene DEHP 2-EH

Grupa Azoty Group

Ratios Q1

2014

Q1

2015

Profitability ratios

EBIT margin (%) 6.8 12.8

EBITDA margin (%) 11.9 17.1

ROCE (%) 2.4 4.5

ROE (%) 2.3 4.5

Liquidity ratios

Current ratio 1.6 1.6

Debt ratios

Total debt ratio (%) 35.0 33.4

Net debt (PLNm) 463 154

Debt to equity ratio (%) 53.8 50.2

Q1

2014

Q1

2015 Change

Non-current

assets 6,612 6,768 2% ↗

Current

assets 3,271 3,420 5% ↗

incl. cash and

cash equivalents

712 949 33% ↗

TOTAL ASSETS 9,883 10,188 3% ↗

GRUPA AZOTY GROUP: STATEMENT OF FINANCIAL POSITION

Q1

2014

Q1

2015 Change

Equity 6,425 6,783 6% ↗

Liabilities 3,458 3,404 -2% ↘

incl. borrowings 1,086 1,012 -7% ↘

other financial

liabilities 89 91 2% ↗

TOTAL EQUITY

AND LIABILITIES 9,883 10,188 3% ↗

(PLNm)

(PLNm)

22 Grupa Azoty Group

0

500

1 000

1 500

2 000

2 500

Q1 2014 Q1 2015

Raw material and consumables used Services

Labour costs Depreciation and amortisation

Other

GRUPA AZOTY GROUP: COST STRUCTURE

(PLNm)

Decline in cost of raw materials and

consumables attributable to lower

prices of petroleum products

(benzene and phenol) and energy

carriers (coal and natural gas).

Higher cost of services driven by a

change in terms of sale (transport

costs) and marketing bonuses.

23

-150 -100 -50 0 50

(PLNm)

y/y change -2.3%

Grupa Azoty Group

GRUPA AZOTY PUŁAWY GROUP

24

GRUPA AZOTY PUŁAWY GROUP: KEY FINANCIALS

25

983 880 846 955 1,070

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

REVENUE

149 118

40 86

227

15.1% 13.4%

4.8%

9.1%

21.3%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

EBITDA

EBITDA MARGIN

98

74

3

2

175

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

NET PROFIT

(PLNm)

25 Grupa Azoty PUŁAWY

GRUPA AZOTY PUŁAWY GROUP: PERFORMANCE – KEY DRIVERS

increased sales volume

lower prices of key strategic raw materials at the Parent

EBITDA

149 149

232 281 280 266

227 227

83

49 4 -5 -14

-39

0

100

200

300 PLNm

positive effect on EBITDA

negative effect on EBITDA

26

*Only the Parent.

Grupa Azoty PUŁAWY

GRUPA AZOTY PUŁAWY GROUP: PERFORMANCE BY SEGMENT

EBITDA Q1 2015

Segment*

(PLNm)

Revenue EBITDA

Q1

2014

Q1

2015

Q1

2014

Q1

2015

Agro 656 743 151 211

Chemicals 299 294 28 34

Energy 17 20 5 12


86 86

200 217 218 218 227

114 17 2 -1 9

PLNm

Agro 69%

Chemicals 28%

Energy 2%

Other Activities

1%

81%

13%

5% 1%

EBITDA

REVENUE

Q1 2015*


* Excluding unallocated items.

GRUPA AZOTY PUŁAWY GROUP: AGRO

Volumes

0

50

100

150

200

250

Q1 2014 Q1 2015

Ammonium nitrate (PULAN®)

UAN conv. to 32% (RSM®)

Urea (PULREA®)

UAN®S – RSM®S

Ammonium sulfate (PULSAR®, ammonium sulfate from the Flue Gas Desulfurisation Unit)

(PLNm) Q1

2014

Q1

2015 Change

Revenue 656 743 13.2%

Nitrogen fertilizers 573 626 9.3%

Phosphate and

compound fertilizers

52 74 42.6%

Other goods and

services 9 10 8.5%

Merchandise and

materials 22 33 45.5%

EBITDA 151 211 39.8%

EBITDA margin 23.0% 28.4% 5.4 p.p.

28

Prices of AN, UAN and Urea

'000

tonnes

Volumes

Grupa Azoty PUŁAWY

200

400

100

200

300

400

USD/t EUR/t Ammonium nitrate AN EUR/t UAN EUR/t Urea USD/t

Source: Argus FMB

GRUPA AZOTY PUŁAWY GROUP: CHEMICALS

0

10

20

30

40

50

60

70

Q1 2014 Q1 2015

Melamine

Caprolactam

Urea (PULREA®, PULNOX® for 100% solution equivalent) Hydrogen peroxide (for 100% solution equivalent)

(PLNm) Q1

2014

Q1

2015 Change

Revenue 299 294 -1.5%

Melamine 88 96 8.9%

Caprolactam 119 105 -11.6%

Urea 70 65 -6.7%

Other goods and

services 21 26 21.7%

Merchandise and

materials 0.4 2 380.4%

EBITDA 28 34 18.7

EBITDA margin 9.5% 11.4% 1,9 p.p.

29

Prices of melamine and caprolactam

Volumes

'000

tonnes

Grupa Azoty PUŁAWY

0

500

1000

1500

2000

2500

3000

0

500

1000

1500

2000

USD/t EUR/t Melamine EUR/t Crystalline caprolactam USD/t

Source: ICIS.

Ratios Q1

2014

Q1

2015




ROCE (%) 4.0 6.0

ROE (%) 3.8 6.0

Liquidity ratios


Debt ratios

Total debt ratio (%) 24.0 21.4

Net debt (PLNm) -241 -524


GRUPA AZOTY PUŁAWY GROUP: STATEMENT OF FINANCIAL

POSITION

Mar 31

2014

Mar 31

2015 Change

Equity 2,610 2,903 11.3% ↗

Liabilities 826 791 -4.3% ↘

incl. borrowings 54 12 -77.2% ↘

other

financial liabilities 772 779 0.9% ↗

TOTAL EQUITY

AND LIABILITIES 3,436 3,694 7.5% ↗

(PLNm)

30

Mar 31

2014

Mar 31

2015 Change

Non-current

assets 2,073 2,145 3.5%

Current

assets 1,363 1,549 13.6%

incl. cash and

cash equivalents

295 536 81.6%

TOTAL ASSETS 3,436 3,694 7.5%

(PLNm)

Grupa Azoty PUŁAWY

0

100

200

300

400

500

600

700

800

900

1 000

Q1 2014 Q1 2015

Raw material and consumables used

Services

Employee benefits expense

Depreciation and amortisation

Other

GRUPA AZOTY PUŁAWY GROUP: COST STRUCTURE

PLNm

In Q1 2015, expenses were up 5% year on year

(by ca. PLN 43m), chiefly on the back of higher

other expenses, including a ca. PLN 76m

increase in taxes and charges (emission

allowances), partially offset by lower cost of

raw materials and consumables used (down ca.

PLN 22m).

+ 5 %


-40 -20 0 20 40 60 80

(PLNm)

y/y change

GRUPA AZOTY POLICE GROUP

GRUPA AZOTY POLICE GROUP'S CONSOLIDATED RESULTS

33

(PLNm)

632 617 505 658 746

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

REVENUE

48 54

28 43

94

7.6% 8.8%

5.5% 6.6%

12.7%

0

10

20

30

40

50

60

70

80

90

100

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

EBITDA

EBITDA MARGIN

Grupa Azoty POLICE Group

17 25

6

13

51

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

NET PROFIT

GRUPA AZOTY POLICE PERFORMANCE – KEY DRIVERS

Higher volume of sales and more favourable prices of compound fertilizers

Increased production of compound fertilizers

Higher distribution costs driven by increased sales and the Company's policy of

taking over transport operations

EBITDA

(PLNm)

48 48

131 133 114

98 94 94

83

2

28 46

16 4

Q 1 2 0 1 4 S a l e s v o l u m e s r a w m a t e r i a l p r i c e s

p r o d u c t p r i c e s R a w m a t e r i a l v o l u m e s

S e l l i n g a n d d i s t r i b u t i o n

e x p e n s e s , f i x e d c o s t s

O t h e r 2 0 1 4

34 Grupa Azoty POLICE Group

GRUPA AZOTY POLICE: PERFORMANCE BY SEGMENT

EBITDA Q1 2015

Segment (PLNm)

Revenue EBITDA

Q1

2014

Q1

2015

Q1

2014

Q1

2015

Fertilizers 543 659 38 90

Pigments 80 76 10 2

Other 8 11 1 2

EBITDA

43 43

92 94 94

49

2 0.1

Q42014 Fert i l izers Other P igments Q1 2015

(PLNm)

35

88%

10%

2%

96%

2% 2% Fertilizers

Pigments

Other

REVENUE

EBITDA

positive effect on EBITDA

negative effect on EBITDA


GRUPA AZOTY POLICE: FERTILIZERS

Volumes (PLNm) Q1

2014

Q1

2015 Change

Revenue 543 659 116

Compound fertilizers 330 441 111

Urea 114 116 2

Ammonia 89 86 -3

Other 10 16 6

EBITDA 38 90 52

EBITDA margin 7% 14% 7% '000

tonnes

39

0

50

100

150

200

250

300

350

Q1 2014 Q1 2015

Compound fertilizers Urea

Ammonia Other

50

100

150

200

250

300

350

400

450

200

300

400

500

600

700

USD/t USD/t NPK USD/t DAP USD/t Phosphate rock USD/t Potassium chloride USD/t

Market prices of NPK, DAP, phosphates, potassium chloride


GRUPA AZOTY POLICE: PIGMENTS

Volumes

(PLNm)

Q1

2014

Q1

2015 Change

Revenue 80 76 -4

Titanium white 78 74 -4

Other 2 2 0,1

EBITDA 10 2 -8

EBITDA margin 12% 2% -10%

37

'000

tonnes

0

5

10

Q1 2014 Q1 2015

Titanium white Other

0

500

1000

1500

2000

0

1000

2000

3000

USD/t EUR/t

Titanium white EUR/t Ilmenite USD/t Titanium slag USD/t

Prices of titanium white, ilmenite and titanium slag


Ratios Q1

2014

Q1

2015


EBIT margin 3% 9%

EBITDA margin 8% 13%

ROCE 2% 5%

ROE 2% 4%

Liquidity ratios


Debt ratios

Total debt ratio 45% 45%

Net debt (PLNm) 171 166

Equity-to-debt ratio 122% 124%

Q1

2014

Q1

2015 Change

Non-current

assets 1,265 1,361 8% ↗

Current

assets 712 721 1% ↗

incl. cash and

cash equivalents

106 93 -12% ↘

TOTAL ASSETS 1,977 2,082 5% ↗

GRUPA AZOTY POLICE: STATEMENT OF FINANCIAL POSITION

Q1

2014

Q1

2015 Change

Equity 1,085 1,151 6% ↗

Liabilities 892 931 4% ↗

incl. borrowings 271 251 -7% ↘

other

financial liabilities 6 8 33% ↗

TOTAL EQUITY

AND LIABILITIES 1,977 2,082 5% ↗

(PLNm)

(PLNm)

38 Grupa Azoty POLICE Group

GRUPA AZOTY POLICE: COST STRUCTURE

(PLNm)

11.6%

39

0

100

200

300

400

500

600

700

Q1 2014 Q1 2015

Raw material and consumables used Services Labour costs Depreciation and amortisation Other

The cost growth was driven

mainly by substantially higher

sales and increased production of

compound fertilizers.

-20 0 20 40 60

(PLNm)

y/y change


GRUPA AZOTY

ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

40

GRUPA AZOTY ZAK: KEY FINANCIALS

41

(PLNm)

572 471 491 522 543

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

REVENUE

69 54

31 20

93

60

12.1% 11.6%

6.3%

3.8%

17.2%

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

20,0

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

EBITDA

Adjusted EBITDA*

EBITDA MARGIN

38 31 9 0

60 33

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

NET PROFIT

Adjusted NET PROFIT*

* One-off item: impairment loss on phthalic anhydride unit of PLN 40m

41 Grupa Azoty ZAK

GRUPA AZOTY ZAK S.A.: RESULTS BY SEGMENT

Fertilizers 58%

OXO 37%

Other 5%

EBITDA Q1 2015

Segment (PLNm)

Revenue EBITDA

Q1

2014

Q1

2015

Q1

2014

Q1

2015


OXO alcohols 268 200 8 -2

Other 27 30 6 8

20 20

60

93 93 40

38

5

Q42014 Fert i l izers OXO alcohols

Other Q1 2015

(PLNm)

REVENUE

Q1 2015

42 Grupa Azoty ZAK

Ratios Q1

2014

Q1

2015




ROCE (%) 3.9 5.7

ROE (%) 3.6 5.4

Liquidity ratios


Debt ratios

Total debt ratio 32.0 31.4

Net debt (PLNm) -19.3 -18.8


Q1

2014

Q1

2015 Change

Non-current

assets 993 1,034 41 ↗

Current

assets 571 597 26 ↘

incl. cash and

cash equivalents

111 133 22 ↘

Total assets 1,564 1,631 67 ↘

GRUPA AZOTY ZAK: STATEMENT OF FINANCIAL POSITION

Q1

2014

Q1

2015 Change

Equity 1,064 1,119 55 ↗

Liabilities 500 512 12 ↘

incl. borrowings 87 111 24 ↘

other

financial liabilities 5 4 -1 ↘

Total equity

and liabilities 1,564 1,631 67 ↘

(PLNm)

(PLNm)

43 Grupa Azoty ZAK

DISCLAIMER

The information presented below has been prepared by the Grupa Azoty Group (the “Group”) solely for the purpose of presentation to investors and market analysts on May

13th 2015 (the “Presentation”). By participating in the meeting at which the Presentation is presented or by referring to the following Presentation, you agree to the

following specific restrictions and disclaimers.

This presentation does not constitute or form any part of, and should not be considered as, an offer to sell or as an offer to subscribe for, or as a guarantee to purchase or

acquire in other way, any securities of any company of the Group. Neither this Presentation nor any part hereof may form the basis of, or be relied upon in connection with,

any subscription for any securities of the Group, or their acquisition. Neither this Presentation nor any part hereof may form the basis of, or be relied upon in connection

with, any investment agreement, commitment or decision relating to securities of the Group companies. This Presentation does not constitute a recommendation regarding

any securities of the Group companies.

No statement or assurance, expressed or implied, has been made by or on behalf of the Group or any of its shareholders, members of its bodies, officers, employees, agents

or advisers or any other person, as to the accuracy, completeness or reliability of information or opinions contained in this Presentation.

This Presentation may contain forward-looking statements. Forward-looking statements are different from statements of historical facts. Statements containing such words as

"expects", "intends", "plans", "believes", "anticipates", "will", "aims", "can", "would", "could", "continues" or similar words are examples of such forward-looking statements.

Forward-looking statements include statements about the financial performance, business strategy, plans and objectives of the Group (including development plans relating

to the Group). All forward-looking statements contained in this Presentation relate to matters involving known and unknown risks, issues that are impossible to predict, and

other factors. Actual results and achievements of the Group may be materially different from those described in statements concerning the past, and from the results and

achievements of the Group in the past. Forward-looking statements are made based on various assumptions of future events, including numerous assumptions regarding

present and future business strategies of the Group and its future business environment. Although the Group believes that its estimates and assumptions are reasonable, they

may prove to be incorrect. The information, opinions and forward-looking statements contained herein are valid only on the date of this Presentation and are subject to

change without notice. The Group and its advisers are not obliged to publish any updates or modify any information, data or statements contained in this Presentation in the

event of a change of strategy or the intentions of the Group, or of facts or circumstances that will have an impact on the strategy or intentions of the Group, unless such an

obligation arises under law. Please note that the only reliable source of data on the Group's financial results, forecasts, events and indicators of the Group are the current

and periodic reports released by the Group as part of its disclosure obligations under Polish law.

Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person shall be liable for any loss arising from the

use of this Presentation or its contents or otherwise arising in connection with this Presentation.

Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person shall be required to provide the recipients

of this Presentation with any additional information or to update this Presentation.

This Presentation contains information on the chemical industry in Poland and globally, including information on market shares of the Company and some of its competitors.

The source of this information is always provided in this Presentation and the Group or any other entity acting on behalf of the Group has independently verified the

information referred to above.

This Presentation is not intended for distribution to or use by any person or any entity in any jurisdiction where such distribution or use would be contrary to local law or

oblige the Group or any of its affiliates to obtain an authorization or licence, or to comply with the registration requirements under applicable laws. Neither this Presentation

nor any part hereof may be copied or transmitted into the United States of America, and cannot be disseminated, directly or indirectly, in the United States of America.

Failure to comply with this restriction may constitute a violation of U.S. securities laws. Persons who come into possession of this Presentation are required to inform

themselves of, and to observe all of the above restrictions. None of the securities referred to herein have been or will be registered under the U.S. Securities Act of 1933.

Any such securities may not be offered or sold in the United States of America, except pursuant to an exemption or in a transaction not required to be registered under the

Act.

44

Thank you for your attention.

For more information, visit www.grupaazoty.com

APPENDIX 1

PARENT

-200

0

200

400

600

800

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

EBITDA and net debt

Net debt EBITDA

KEY RATIOS SINCE IPO 2008, QUARTERLY*

*Grupa Azoty Group

-100

0

100

200

300

400

500

-500

0

500

1 000

1 500

2 000

2 500

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Revenue and net profit

Revenue Net profit (right axis) (PLNm)

(PLNm)

47 Grupa Azoty S.A.

GRUPA AZOTY S.A.: KEY FINANCIALS

48

(PLNm)

503 410 464 470 500

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

REVENUE

40 8 9 5 53

8% 2% 2% 1% 11%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

EBITDA

EBITDA (adjusted)

EBITDA MARGIN

196 59

-18 -23

18 6

-20

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

NET PROFIT/LOSS

NET PROFIT/LOSS (adjusted)

NET PROFIT was adjusted for dividend received (in all periods)

48 Grupa Azoty S.A.

GRUPA AZOTY S.A.: RESULTS BY SEGMENT

EBITDA Q1 2015

Segment (PLNm)

Revenue EBITDA

Q1

2014

Q1

2015

Q1

2014

Q1

2015


Plastics 252 237 11 7

Energy 6 6 3 4


Fertilizers 50%

Plastics 47%

Energy 1%

Other Activities

2%

5 5

40 53 53 53

35

13 1 1

(PLNM)

74%

13%

7% 6%

EBITDA

REVENUE

Q1 2015

49 Grupa Azoty S.A.

GRUPA AZOTY S.A.: FERTILIZERS

Prices of ammonia, ammonium sulfate and calcium ammonium nitrate

Volumes (PLNm) Q1

2014

Q1

2015 Change

Segment revenue

including 238 250 5%

Nitrogen fertilizers 214 223 4%

EBITDA 24 39 63%

EBITDA margin 10% 16%

0

50

100

150

200

250

Q1 2014 Q1 2015

Nitrogen fertilizers '000 tonnes

Source: Argus FMB, ICIS

Grupa Azoty S.A.

200

220

240

260

280

100

200

300

400

500

600

700

EUR/t

USD/t Ammonia USD/t Ammonium sulfate AS USD/t Calcium ammonium nitrate CAN EUR/t

50

GRUPA AZOTY S.A.: PLASTICS

Volumes (PLNm) Q1

2014

Q1

2015 Change

Segment revenue

including 252 237 -6% ↘

Polyamide 161 169 5% ↗

Caprolactam 40 15 -63% ↘

EBITDA 11 7 -36% ↘

EBITDA margin 4% 3% ↘

0 5

10 15 20 25 30

Q1 2014 Q1 2015 Polyamide Caprolactam '000 tonnes

11%

51

Prices of benzene, phenol, CPL, PA6

Source: ICIS, TECNON

Grupa Azoty S.A.

400

900

1 400

1 900

2 400

EUR/t

Benzene EUR/t Liquid caprolactam EUR/t PA6 EUR/t Phenol EUR/t

GRUPA AZOTY S.A.: COST STRUCTURE

(PLNm)

52

0

50

100

150

200

250

300

350

400

450

500

Q1 2014 Q1 2015

Raw material and consumables used Services Labour costs Depreciation and amortisation Other

Grupa Azoty S.A.

-60 -40 -20 0 20

(PLNm)

y/y change

Decline in cost of raw materials and

consumables attributable to lower

prices of petroleum products

(benzene down 41%, phenol down

35%) and energy carriers (coal down

9%, natural gas down 5%).

Higher cost of services driven by a

change in terms of sale (transport

costs) and marketing bonuses.

-6.8%

Contact:

Investor Relations Team

[email protected]

53

PRESENTATION OF Q1 2015 RESULTS - Grupa...

Documents

Transcript of PRESENTATION OF Q1 2015 RESULTS - Grupa...