PRESENTATION OF Q3 2016 RESULTS - Grupa...

PRESENTATION OF

Q3 2016 RESULTS

November 9th 2016

PageAgenda

Grupa Azoty Group 3

Business segments 10

Grupa Azoty PUŁAWY Group 21

Grupa Azoty POLICE Group 27

Grupa Azoty KĘDZIERZYN Group 34

Appendix 1 – The Parent 42

Appendix 2 – Market prices 49

GRUPA AZOTY GROUP

4

KEY DEVELOPMENTS

Research and Development Centre in Tarnów

- competitive advantage built on knowledge

Continued efforts to secure funding for strategic projects

- annexes signed to credit facility agreements with PKO BP S.A.

- Grupa Azoty to directly participate in financing the PDH project

GRUPA AZOTY GROUP

281 369 504 519 327

0% 100%

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

5

GRUPA AZOTY GROUP Q3 2016 RESULTS

GRUPA AZOTY GROUP'S Q3 2016 CONSOLIDATED REVENUE STRUCTURE

REVENUE

2,000

EBITDA

131

EBITDA MARGIN

6.6%

NET PROFIT

-10

(PLNm)

Q3 PERFORMANCE DRIVERS

↗ Grupa Azoty's REBITDA* performance

significantly better relative to benchmark

performance of global peers

↗ Adverse global trends in Fertilizers largely

offset by improved profitability in

Chemicals

↗ Net cash flow increased qoq on measures

to optimise working capital and CAPEX

levels

*Recurring EBITDA = underlying EBITDA adjusted to eliminate one-off items

of PLN 18m (impairment of assets in Grupa Azoty Police)

GRUPA AZOTY GROUP

GRUPA AZOTY GROUP QUARTERLY RESULTS

6GRUPA AZOTY GROUP

* 3Q 2016 was adjusted for impairment loss recognised by African Investment Group S.A.

** Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial

statements)

(PLNm)

Q3

2013

Q3

2014

Q3

2015**

Q3

2016(PLNm)

Revenue 2,226 2,269 2,396 2,000

EBIT -9 2 107 1

EBIT margin -0.4% 0.1% 4% 0.1%

EBITDA 111 128 226 131

EBITDA margin 5% 6% 9% 7%

Net profit 0.2 9 82 -10

111 128

226

131 150

5,0%5,6%

9,4%

6,6%

3Q 2013 3Q 2014 3Q 2015 3Q 2016

EBITDA

EBITDA(adjusted)*

EBITDA MARGIN

GRUPA AZOTY GROUP: Q1−Q3 FINANCIAL HIGHLIGHTS

7GRUPA AZOTY GROUP

Q1-Q3

2013

Q1-Q3

2014

Q1-Q3

2015**

Q1-Q3

2016

Q1−Q3 change

2016/2015(PLNm)

Revenue 7,473 7,342 7,507 6,633 -12% (

EBIT 780 294 641 439 -32% (

EBIT margin 10% 4% 9% 7%

EBITDA 1,196 695 1,003 826 -18% (


Net profit 771 250 540 346 -36% (

1,196

695

1,003826750

869

16.0%

9.5%

13.4%12.5%

Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2016

EBITDA

EBITDA(adjusted)*

EBITDA MARGIN

* In 2013 adjusted for gain on bargain purchase of Grupa Azoty PUŁAWY

In 2016, adjusted for estimated impairment loss recognised by African Investment Group S.A.

** Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial

statements)

(PLNm)

8

CORPORATE

PROJECTS

68 CAPEX PROJECTS

PLASTICSENERGYFERTILIZERS OXOPLASTS MELAMINE PIGMENTS

ORGANIC GROWTHINVESTMENTS

2014−2020 CAPEX BUDGET: PLN 7bn

32 % 11 %19 %30 % 4 % 2 % 2 %

CAPITAL EXPENDITURE IN JANUARY−SEPTEMBER 2016

GRUPA AZOTY – RECENT DEVELOPMENTS

CAPEX IN 2016

PLN 1.6bnTOTAL

PLN 875m

BUSINESS DEVELOPMENT INVESTMENTS 425.0

BUSINESS MAINTENANCE INVESTMENTS 227.2

MANDATORY INVESTMENTS 86.5

PURCHASE OF FINISHED GOODS 35.4

OTHER (COMPONENTS, MAJOR OVERHAULS) 101.0

ACTUAL EXPENDITURE AGAINST CAPEX BUDGET SINCE 2014

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

(PLNm)

GRUPA AZOTY GROUP FINANCIALS

(PLNm)

(PLNm)

9GRUPA AZOTY GROUP

68%

17%

15%

FINANCING STRUCTURE

1,150

462 5

AVAILABLE FUNDS

Corporate credit facilities

Overdraft and multi-purpose facilities

Other financing sources

(PLNm)

RATIOSQ1-Q3

2015*

Q1-Q3

2016

Profitability ratios

EBIT margin (%) 8.5 6.6

EBITDA margin (%) 13.4 12.5

ROCE (%) 7.3 4.7

ROE (%) 7.7 4.7

Liquidity ratios

Current ratio 2.0 1.9

Debt ratios

Total debt ratio (%) 33.0 33.7

Net debt (PLNm) 1 281

Net debt/12M EBITDA ratio 0 0.2

Debt to equity ratio (%) 49.3 50.9

* Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial statements)

BUSINESS SEGMENTS

xxAgro Fertilizers

xxOther Activities

xxPlastics

xxChemicals

xxEnergy

xx %

xx %

xx %

xx %

xx %

SEGMENTS

11

Q3 2016

revenue

(PLNm)

%

contribution

Q3 2016

EBITDA

(PLNm)

%

contribution

1,088 54 10 7

262 13 -10 x

556 28 69 49

43 2 19 14

51 3 43 30

BUSINESS SEGMENTS

AGRO FERTILIZERS GLOBALLY

12

Source: CIC Sept 2016

World +7 Mt

Russia +9 Mt

USA +7 Mt

Canada +2 Mt

Australia +3 Mt

EU28 -15 Mt

France -12 Mt

Germany -2 Mt

Ukraine -800 kt

2016/2017

vs. 2015/2016 changes in wheat production

2011−2015 high

150

250

350

450

550

1 2 3 4 5 6 7 8 9 10 11 12

USD/t

months

Urea market prices in 2011−2015 and 2016

2011−2015 high

2011−2015 average

2011−2015 low

2016 market prices

Source: Profercy – prilled urea Baltic FOB prices

300

400

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12

USD/t

months

DAP market prices in 2011−2015 and 2016

2011−2015 average

2011−2015 low

2016 market prices

Source: WFM – DAP 18-46 Baltic FOB prices

200

300

400

500

1 2 3 4 5 6 7 8 9 10 11 12

USD/t

months

NPK market prices in 2011−2015 and 2016

2011−2015 high

2011−2015 average

Source: WFM – NPK Baltic FOB prices

2011−2015 low

2016 market prices

Oilseed rape, wheat and corn prices

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2 200

Jan11

Mar11

May11

Jul11

Sep11

Nov11

Jan12

Mar12

May12

Jul12

Sep12

Nov12

Jan13

Mar13

May13

Jul13

Sep13

Nov13

Jan14

Mar14

May14

Jul14

Sep14

Nov14

Jan15

Mar15

May15

Jul15

Sep15

Nov15

Jan16

Mar16

May16

Jul16

Sep16

PLN/tMilling wheat − PLN/t Fodder corn − PLN/t

Oilseed rape − PLN/t

Source: Ministry of Agriculture and Rural Development

BUSINESS SEGMENTS

AGRO FERTILIZERS GLOBALLY

13

NARROWING MARKET SPREADS PER N

NEGATIVE PRICING TRENDS

OUTLOOK

↘ Global markets of nitrogen fertilizers

characterised by low prices and sluggish

demand, as farmers reduce fertilizer

application in the autumn season, keeping

fertilizer stocks for use in spring.

↗ Demand for compound NPK fertilizers has

been below producer expectations since the

spring season. Low forecast prices of

agricultural crops may cause NPK fertilizer

prices to stabilise in Q4 2016 and spike

seasonally in Q1 2017.

↗ Domestic market support − advance direct

payments (70%).

0

100

200

300

400

500

600

Jan14

Feb14

Mar14

Apr14

May14

Jun14

Jul14

Aug14

Sep14

Oct14

Nov14

Dec14

Jan15

Feb15

Mar15

Apr15

May15

Jun15

Jul15

Aug15

Sep15

Oct15

Nov15

Dec15

Jan16

Feb16

Mar16

Apr16

May16

Jun16

Jul16

Aug16

Sep16

DAP NPK 3x16 Ammonia (16%N) Phosphate rock

0

50

100

150

200

250

300

Jan14

Feb14

Mar14

Apr14

May14

Jun14

Jul14

Aug14

Sep14

Oct14

Nov14

Dec14

Jan15

Feb15

Mar15

Apr15

May15

Jun15

Jul15

Aug15

Sep15

Oct15

Nov15

Dec15

Jan16

Feb16

Mar16

Apr16

May16

Jun16

Jul16

Aug16

Sep16

CAN (27%N) Urea (27%N) Ammonia (27%N)

-26%

-10%

-22%

CAN equivalent

NPK equivalent

EUR/t

USD/t

EUR/t USD/t

0

100

200

300

400

Prilled urea AN 33.5% CAN 27% UAN 32%N Ammoniumsulfate

Q1-Q3 2015 Q1-Q3 2016

0

100

200

300

400

500

Ammonia DAP 18-46 NPK 16-16-16

Q1-Q3 2015 Q1-Q3 2016

-16%-28%-37%

-18%-33%-27%

-25%-30%

BUSINESS SEGMENTS

GRUPA AZOTY GROUP: AGRO FERTILIZERS

14

VOLUMES

(PLNm)Q3

2013

Q3

2014

Q3

2015

Q3

2016

Q1-Q3

2015

Q1-Q3

2016

Change

Y/Y

Segment revenue,

including:1,259 1,210 1,468 1,088 4,522 3,830 -15% (

Nitrogen fertilizers

and ammonia815 782 854 589 2,791 2,261 -19% (

Compound fertilizers 341 354 487 392 1,423 1,269 -11% (

EBITDA 83 73 169 10 725 505 -30% (

EBITDA margin 7% 6% 12% 1% 16% 13% (

0

500

1 000

1 500

2 000

2 500

3 000

Nitrogen fertilizers andammonia

Compound fertilizers

Q1-Q3 2015 Q1-Q3 2016

-3%

-5%

'000 tonnes

83 73

169

10

7%6%

12%

1%

0%

5%

10%

15%

0

50

100

150

200

Q32013 Q32014 Q32015 Q32016

EBITDA EBITDA margin

EBITDA

PLNm

BUSINESS SEGMENTS

xxAgro Fertilizers

xxOther Activities

xxPlastics

xxChemicals

xxEnergy

xx %

xx %

xx %

xx %

xx %

SEGMENTS

15

Q3 2016

revenue

(PLNm)

%

contribution

Q3 2016

EBITDA

(PLNm)

%

contribution

1,088 54 10 7

262 13 -10 x

556 28 69 49

43 2 19 14

51 3 43 30

BUSINESS SEGMENTS

GLOBAL PLASTICS MARKET

16

MARKET WEAKENED BY FALLING MARGINS

PRICING TRENDS

MARKET ENVIRONMENT AND

OUTLOOK

↘ Prices of caprolactam under continued

pressure of oversupply prevailing on the

market.

↗ Its effects are mitigated by demand from

end-user segment, generally assessed as

good, and increasing consumption.

↘ Situation on the CPL and PA6 markets will

be driven by oil price. Pricing trend

changes reflecting seasonal fluctuations in

demand may prompt producers to adjust

prices of petroleum derivatives, such as

benzene and phenol.

0

500

1 000

1 500

2 000

2 500

PA6 Benzene

-7%

EUR/t

0

500

1 000

1 500

2 000

Benzene Phenol Caprolactam Polyamide 6

Q1-Q3 2015 Q1-Q3 2016

-12%-8%

-3%

-10%

EUR/t

BUSINESS SEGMENTS

GRUPA AZOTY GROUP: PLASTICS

17

VOLUMES

(PLNm)Q3

2015

Q3

2016

Q1-Q3

2015

Q1-Q3

2016

Change

Y/Y

Segment revenue,

including:292 262 967 834 -14% (

Polyamide 162 136 512 451 -12% (

Caprolactam 72 77 288 232 -19% (

EBITDA -7 -10 8 -35 x (

EBITDA margin -2% -4% 1% -4% (

REVENUE

512 451

288232

0

200

400

600

800

1 000

1 200

2015 2016

Q1-Q3 Q1-Q3

Polyamide Caprolactam Other

162 136

7277

0

50

100

150

200

250

300

350

2015 2016

Q3 Q3


292 262 967 834

PLNm

-16%

+7%

-12%

-20%

0

10

20

30

40

50

60

70

80

Polyamide Caprolactam

Q1-Q3 2015 Q1-Q3 2016

+1%

-1%

'000 tonnes

BUSINESS SEGMENTS

xxAgro Fertilizers

xxOther Activities

xxPlastics

xxChemicals

xxEnergy

xx %

xx %

xx %

xx %

xx %

SEGMENTS

18

Q3 2016

revenue

(PLNm)

%

contribution

Q3 2016

EBITDA

(PLNm)

%

contribution

1,088 54 10 7

262 13 -10 x

556 28 69 49

43 2 19 14

51 3 43 30

BUSINESS SEGMENTS

CHEMICALS GLOBALLY

MARKET ENVIRONMENT AND OUTLOOK

↗ Increase in the consumption of technical grade

urea will mainly be driven by its use in UF (urea-

formaldehyde) resins and deNOx (flue gas

denitrification) units.

OXO alcohol prices should remain correlated with

movements in propylene prices, with demand

growth especially in Q3/Q4. In the coming

periods, the average propylene prices should

remain at similar or slightly higher levels,

although this will largely depend on price

movements on the global oil markets.

Owing to sound demand and matching supply of

the product, average contract prices of melamine

in Europe should remain at current levels.

↘ Prices and demand for titanium white and its

intermediates are expected to change in line with

a downtrend in the application markets.

MARKET MARGINS

PRICING TRENDS

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

DEHT (DOTP) 2-EH Propylene

-13%

+52%

EUR/t

EUR/t

0

500

1 000

1 500

2 000

2 500

2-EH DEHT(DOTP)

Melamine Titaniumwhite

Propylene

Q1-Q3 2015 Q1-Q3 2016

-30%

-8%

-13%-26%

+3%

BUSINESS SEGMENTS

GRUPA AZOTY GROUP: CHEMICALS

20

REVENUE VOLUMES

(PLNm)Q3

2015

Q3

2016

Q1-Q3

2015

Q1-Q3

2016

Change

Y/Y

Segment revenue

including:534 556 1,744 1,684 -3% (

OXO alcohols 93 102 352 311 -12% (

Plasticizers 32 35 120 131 9%

Urea (technical grade) 128 109 404 291 -28% (

Melamine 99 109 294 325 11%

Titanium white 55 77 205 226 10%

EBITDA 19 69 112 234 109%


125 137

227 218

55 77

127 123

0

100

200

300

400

500

600

2015 2016

Q3 Q3

OXO alcohols/plasticizers Melamine/Urea

Titanium white Other

472 442

698 616

205226

369 399

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2015 2016

Q1-Q3 Q1-Q3

+10%

10%

-12%

-6%

PLNm

534 556 1,744 1,683

0

50

100

150

200

250

300

350

400

OXO alcohols Plasticizers Urea(technical

grade)

Melamine Titanium white

Q1-Q3 2015 Q1-Q3 2016

+13%+3%

+29%+13%

-12%

41%

-4%

10%

'000 tonnes

BUSINESS SEGMENTS

GRUPA AZOTY PUŁAWY GROUP

GRUPA AZOTY PUŁAWY GROUP QUARTERLY RESULTS

118172

227

11569

12,6%

17,9%

23,9%

14,2%

9,7%

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

EBITDA

EBITDAMARGIN

22

Q3

2013

Q3

2014

Q3

2015

Q3

2016

Change vs

Q3 2013-2015

average(PLNm)

Revenue 840 846 935 712 -18.5% (

EBIT 19 1 76 23 -28.1% (

EBIT margin 2.3% 0.1% 8.1% 3.2%

EBITDA 55 40 118 69 -2.8% (

EBITDA margin 6.5% 4.7% 12.6% 9.7%

Net profit 18 3 65 16 -44.8% (

(PLNm)

GRUPA AZOTY PUŁAWY

GRUPA AZOTY PUŁAWY GROUP: Q1−Q3 FINANCIAL HIGHLIGHTS

23

Q1-Q3

2013

Q1-Q3

2014

Q1-Q3

2015

Q1-Q3

2016

Q1−Q3 change

2016/2015(PLNm)

Revenue 2,875 2,709 2,854 2,473 -13.3% (

EBIT 319 192 368 272 -26.1% (

EBIT margin 11.1% 7.1% 12.9% 11.0%

EBITDA 421 308 490 411 -16.1% (

EBITDA margin 14.6% 11.4% 17.2% 16.6%

Net profit 286 174 334 243 -27.2% (

421308

490411 400

14.6%

11.3%

17.2% 16.6%

Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2016

EBITDA

EBITDA(Parent)

EBITDAMARGIN

(PLNm)

GRUPA AZOTY PUŁAWY

(PLNm)Q3

2015

Q3

2016Jan–Sep 2015 Jan–Sep 2016 change

Revenue 629 407 1,871 1,537 -17.9% (

Nitrogen fertilizers 464 279 1,507 1,181 -21.6% (

Phosphate and compound

fertilizers91 65 220 183 -16.8% (

Other goods and services 18 12 40 51 27.5%

Merchandise and materials 56 51 104 122 17.3%

EBITDA 116 46 444 357 19.6% (

EBITDA margin 18.4% 11.3% 23.7% 23.2% 0.5 pp (

0

200

400

600

800

1 000

1 200

1 400

1 600

Nitrogenfertilizers

Phosphate andcompoundfertilizers

Other Merchandise andmaterials

Jan–Sep 2015 Jan–Sep 2016

GRUPA AZOTY PUŁAWY GROUP: AGRO

24

'000 tonnes

464

279

91

65

74

63

0

150

300

450

600

2015 2016

Q3 Q3

1,5071,181

220

183

144

173

0

600

1 200

1 800

2015 2016

Q1-Q3 Q1-Q3

-29%

-17%

-22%

-40%

-35.3% -17.9%PLNmPLNm

VOLUMESQUARTERLY REVENUE

GRUPA AZOTY PUŁAWY

0

40

80

120

160

200

Melamine Caprolactam Urea(PULREA®,

PULNOX® for100% solutionequivalent)

Other


GRUPA AZOTY PUŁAWY GROUP: CHEMICALS

(PLNm)Q3

2015

Q3

2016Jan–Sep 2015 Jan–Sep 2016 change

Revenue 264 269 875 812 -7.2% (

Melamine 99 109 294 325 10.5%

Caprolactam 64 72 279 234 -16.1% (

Urea 67 54 208 157 -24.5% (

Other goods and services 33 32 88 93 5.7%

Merchandise and materials 1 2 6 3 -50.0% (

EBITDA 15 38 87 136 56.3%

EBITDA margin 5.7% 14.1% 9.9% 16.7% 6.9 pp

25GRUPA AZOTY PUŁAWY

'000 tonnes

99 109

6472

6754

34 34

0

40

80

120

160

200

240

280

2015 2016

Q3 Q3

-19%

294 325

279 234

208157

9496

0

300

600

900

2015 2016

Q1-Q3 Q1-Q3

+13%-16%

+11%+10%

+1.9% -7.2%PLNmPLNm

-25%

VOLUMESQUARTERLY REVENUE

GRUPA AZOTY PUŁAWY FINANCIALS

GRUPA AZOTY PUŁAWY 26

RATIOSQ1-Q3

2015*

Q1-Q3

2016




ROCE (%) 11.6 8.2

ROE (%) 11.4 7.9

Liquidity ratios


Debt ratios


Net debt (PLNm) -655 -710

Net debt/EBITDA -1.3 -1.7


500

30

AVAILABLE FUNDS



(PLNm)

GRUPA AZOTY POLICE GROUP

ONE-OFF ITEMS concerning AFRIG S.A., a subsidiary

28GRUPA AZOTY POLICE GROUP

The other issues described in current report No. 27/2016 of May 30th 2016, which may

cause changes in the value of assets related to AFRIG S.A., and which are not

presented in this report, are subject to further analysis and clarification.

• Impact on EBITDA - PLN 33,940 thousand

• Impact on net profit - PLN 24,793 thousand

H1 2016

results

• Impact on EBITDA - PLN 19,031 thousand

• Impact on net profit - PLN 23,000 thousandQ3 2016 results

Impact on financial results of the Grupa Azoty POLICE Group

GRUPA AZOTY POLICE GROUP: FINANCIAL HIGHLIGHTS

29

(PLNm)


Q3

2013

Q3

2014

Q3

2015

Q3

2016

Q3

2015*

Q3

2016**

Prior

periods

average

Q3 2016**

vs. prior

periods (PLNm)

Revenue 510 505 600 549 600 549 538 2%

EBIT 5 8 18 -1 -1 18 10 80%

EBIT margin 1% 2% 3% -0.3% -0.2% 3% 2%

EBITDA 24 30 39 21 20 40 31 29%

EBITDA margin 5% 6% 7% 4% 3% 7% 6%

Net profit 7 6 15 -9 -8 14 9 55%

39

77

107

292120

63

406.5%

10.9%

15.5%

4.9%3.9%

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

EBITDA

EBITDA(adjusted)

EBITDAMARGIN

10.5%

7.3%

3.3%

*including the effect of one-off items

**before the effect of one-off items concerning AFRIG S.A.

EBITDA


GRUPA AZOTY POLICE GROUP: Q1-Q3 FINANCIAL HIGHLIGHTS

Q1-Q3

2013

Q1-Q3

2014

Q1-Q3

2015

Q1-Q3

2016

Q1-Q3

2015*

Q1-Q3

2016**

Q1−Q3 change

2016**/2015*(PLNm)

Revenue 1,964 1,754 2,038 1,840 2,038 1,840 -10% (

EBIT 77 67 154 91 110 144 31%

EBIT margin 4% 4% 8% 5% 5% 8%

EBITDA 138 135 217 157 173 210 21%

EBITDA margin 7% 8% 11% 9% 8% 11%

Net profit 63 54 122 70 82 117 43%

138 135

217157173

210

7.0% 7.7%

10.6%

8.6%

Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2016

EBITDA

EBITDA (adjusted)

EBITDA MARGIN

8.5%

*including the effect of one-off items, excl. provision for doubtful liabilities relating to Tervalis


(PLNm)

11.4%

*before the effect of one-off items concerning AFRIG S.A.

GRUPA AZOTY POLICE GROUP: FERTILIZERS

'000

tonnes

GRUPA AZOTY POLICE GROUP 31

0

200

400

600

800

1 000

Compoundfertilizers

Urea Ammonia Other


(PLNm)Q3

2015

Q3

2016

Jan–Sep

2015

Jan–Sep

2016Change

Revenue 528 455 1,789 1,567 -12% (

Compound fertilizers 414 336 1,251 1,128 -10% (

Urea 60 62 270 236 -13% (

Ammonia 35 35 216 141 -35% (

Other 19 22 52 62 19%

EBITDA 37 8 206 131 -36% (

EBITDA margin 7% 2% 11% 8% -3% (

EBITDA MARGIN* 7% 6% 11% 12% 1%

414336

60

62

35

35

19

22

0

100

200

300

400

500

600

2015 2016

Q3 Q3

Other

Ammonia

Urea

Compoundfertilizers

1,251 1,128

270236

216

141

52

62

0

500

1 000

1 500

2 000

2015 2016

Q1-Q3 Q1-Q3

3% -13%

-10%-19%

528 455 1,789 1,567PLNm

REVENUE VOLUMES

GRUPA AZOTY POLICE GROUP: PIGMENTS

32

'000

tonnes


26

15

30

13

0

5

10

15

20

25

30

35

Titanium white Other


(PLNm)Q3

2015

Q3

2016

Jan–Sep

2015

Jan–Sep

2016Change

Revenue 57 80 213 236 11%

Titanium white 55 77 204 226 11%

Other 2 3 9 10 11%

EBITDA 0.4 10 5 20 300%

EBITDA margin 1% 13% 2% 8% 6%

55

77

2

3

0

10

20

30

40

50

60

70

80

90

2015 2016

Q3 Q3

204226

910

0

100

200

300

2015 2016

Q1-Q3 Q1-Q3

11%

80

57

236

213

PLNmPLNm

REVENUE

40%

VOLUMES

GRUPA AZOTY POLICE FINANCIALS


RATIOSQ1-Q3 Q1-Q3 Q1-Q3 Q1-Q3

2015 2016 2015* 2016**


EBIT margin (%) 7.6 4.9 5,4 7.8

EBITDA margin (%) 10.6 8.5 8.5 11.4

ROCE (%) 9.8 5.4 7.2 8.5

ROE (%) 10.3 5.4 7.2 8.7

Liquidity ratios


Debt ratios


Net debt (PLNm) 241 278

Net debt/EBITDA 1.1 1.8


19%

39%

42%

FINANCING STRUCTURE

*including the effect of one-off items, excl. provision for doubtful liabilities relating to Tervalis


420

182 5

AVAILABLE FUNDS



Other financing sources

(PLNm)

GRUPA AZOTY

ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

GRUPA AZOTY KĘDZIERZYN: FINANCIAL HIGHLIGHTS

35

(PLNm)

GRUPA AZOTY KĘDZIERZYN

35,364

67,555

104,154

50,261

18,193

8.1%

15.3%

23.6%

12.2%

4.8%

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

EBITDA

EBITDA MARGIN

Q3

2013

Q3

2014

Q3

2015

Q3

2016

Change vs

Q3 2013-2015(PLNm)

Revenue474 491 435 379 81.2% (

EBIT 1.7 10.7 16.2 -3.4 -35.8% (

EBIT margin 0.3 2.2 3.7 -0.9

EBITDA 20.5 30.9 35.4 18.2 62.8% (

EBITDA margin 4.3 6.3 8.1 4.8

Net profit 4.8 8.9 13.8 -2.7 -30.0% (

36

(PLNm)


GRUPA AZOTY KĘDZIERZYN: Q1-Q3 FINANCIAL HIGHLIGHTS

Q1-Q3

2013

Q1-Q3

2014

Q1-Q3

2015

Q1-Q3

2016

Q1−Q3 change

2016/2015(PLNm)

Revenue1,548 1,534 1,375 1,231 -10.4% (

EBIT 98 90 99 108 8.8%

EBIT margin 6.3 5.9 7.2 8.8

EBITDA 154 155 156 173 10.8%

EBITDA margin 9.9 10.1 11.3 14.0

Net profit 89 78 87 91 5.4%

154 155 156

173

9.9%10.1%

11.3%

14.0%

Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2016

EBITDA

EBITDA MARGIN

GRUPA AZOTY KĘDZIERZYN FINANCIALS

GRUPA AZOTY KĘDZIERZYN 37

RATIOSQ1-Q3

2015

Q1-Q3

2016




ROCE (%) 7.5 7.3

ROE (%) 8.0 7.9

Liquidity ratios


Debt ratios


Net debt (PLNm) -33.6 106.2

Net debt/EBITDA -0.2 0.6


228 384

CREDIT LIMITS

Drawn down funds Available funds

PLNm

280

104

AVAILABLE FUNDS



PLNm

GRUPA AZOTY KĘDZIERZYN: PERFORMANCE BY SEGMENT

Fertilizers54%

OXO alcohols40%

Other6%


144

-13

25

130

23 20

Fertilizers OXO alcohols Other

REVENUE Q1-Q3 2016EBITDA Q1-Q3 2016

38

(PLNm)

Segment(PLNm)

REVENUE EBITDA REVENUE EBITDA

Q3 2015 Q3 2016 Q3 2015 Q3 2016Q1-Q3

2015

Q1-Q3

2016

Q1-Q3

2015

Q1-Q3

2016

Fertilizers 252 196 33 13 756 659 144 130

OXO alcohols 149 159 -9 -2 529 496 -13 23

Other 34 24 11 7 90 76 25 20

2015 INTEGRATED REPORT

We encourage you to read

the Grupa Azoty Group's

2015 Integrated Annual Report

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

November 9th 2016 (the “Presentation”). By participating in the meeting at which the Presentation is presented or by referring to this 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.

40

Thank you for your attention.For more information, visit www.grupaazoty.com.

APPENDIX 1 THE PARENT

-200

-100

0

100

200

300

400

500

600

700

EBITDA AND NET DEBT

Net debt EBITDA

GRUPA AZOTY GROUP − KEY RATIOS SINCE IPO 2008, QUARTERLY

-100

0

100

200

300

400

500

-500

0

500

1 000

1 500

2 000

2 500

REVENUE AND NET PROFIT

Revenue Net profit (right axis)

GRUPA AZOTY S.A. 43

(PLNm)

* Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial statements)

GRUPA AZOTY S.A. QUARTERLY RESULTS

44

Q3

2013

Q3

2014

Q3

2015**

Q3

2016

Q3 2016 vs.

prior periods (PLNm)

Revenue 448 464 466 366 -20% (

EBIT -18 -15 -1 -19 -73% (

EBIT margin -4% -3% -0.2% -5%

EBITDA 3 9 22 5 -55% (


Net profit -19 -18 -6 -17 -21% (

224

56

-7

516

4.7%

0.9%

12.8%

-2.0%

1.4%

Q3 2015** Q4 2015 Q1 2016 Q2 2016 Q3 2016

EBITDA

EBITDA (adjusted)*

EBITDA MARGIN

*Adjusted for impairment losses recognised on benzene-derived C-none production unit in Q4 2015

** Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial statements)

(PLNm)

GRUPA AZOTY S.A.

GRUPA AZOTY S.A.: FINANCIAL HIGHLIGHTS YTD

45

Q1-Q3

2013

Q1-Q3

2014

Q1-Q3

2015**

Q1-Q3

2016

Q1−Q3 change

2016/2015(PLNm)

Revenue 1,415 1,377 1,333 1,159 -13% (

EBIT 0.4 -10 24 -16 -167% (

EBIT margin 0% -1% 2% -1%

EBITDA 65 58 92 54 -41% (


Net profit 116 238 230 241 5%

65 58

92

54

4.6%

4.2%

6.9%

4.7%

Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2015** Q1-Q3 2016

EBITDA

EBITDA (adjusted)*

EBITDA MARGIN

(PLNm)

** Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial statements)

GRUPA AZOTY S.A.

GRUPA AZOTY S.A.: FERTILIZERS

VOLUMES

GRUPA AZOTY S.A. 46

0

100

200

300

400

500

600

700

Nitrogen fertilizersJan–Sep 2015 Jan–Sep 2016

'000 tonnes

(PLNm)Q3

2015

Q3

2016

Jan–

Sep

2015

Jan–

Sep

2016

Change

Y/Y

Segment revenue

including237 161 608 505 -17% ↘

Nitrogen fertilizers 218 141 546 451 -17% ↘

EBITDA 7 -5 42 35 -17% ↘

EBITDA margin 3% -3% 7% 7%

546451

0

100

200

300

400

500

600

700

2015 2016

Q1-Q3 Q1-Q3

Nitrogen fertilizers Other

-17%

237 161

-35%

608 505

PLNmPLNm

REVENUE

218

141

0

50

100

150

200

250

2015 2016

Q3 Q3

Nitrogen fertilizers Other

-6%

GRUPA AZOTY S.A.: PLASTICS

VOLUMES

GRUPA AZOTY S.A. 47

0

10

20

30

40

50

60

70

80

Polyamide Caprolactam


(PLNm)Q3

2015

Q3

2016

Jan–

Sep

2015

Jan–

Sep

2016

Change

Y/Y

Segment revenue

including219 193 690 616 -11% ↘

Polyamide 159 134 498 440 -12% ↘

Caprolactam 12 12 41 34 -17% ↘

EBITDA 10 2 33 0.3 -99% ↘

EBITDA margin 5% 1% 5% 0% ↘

498 440

4134

0

100

200

300

400

500

600

700

800

900

2015 2016

Q1-Q3 Q1-Q3


-17%

-12%

0%

219 193 690 616

-16%

PLNmPLNm

REVENUE

159134

12

12

0

50

100

150

200

250

2015 2016

Q3 Q3


'000 tonnes

-10%

1%

SHARE PERFORMANCE

0

20

40

60

80

100

120

0

500

1 000

1 500

2 000

2 500

3 000

Jun-08 Oct-08Feb-09Jun-09 Oct-09 Feb-10Jun-10 Oct-10 Feb-11Jun-11 Oct-11 Feb-12Jun-12 Oct-12 Feb-13Jun-13 Oct-13 Jan-14May-14Sep-14Jan-15May-15Sep-15Jan-16May-16Sep-16

Trading volume Price

Growth from Jun 30 2008: 239%

High (Dec 8 2015) PLN 113.00

Low (Feb 3 2009) PLN 6.00

GRUPA AZOTY S.A. 48

APPENDIX 2 MARKET PRICES

PRICES OF AMMONIA, AMMONIUM SULFATE AND CALCIUM AMMONIUM NITRATE

100

150

200

250

300

50

150

250

350

450

550

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016EUR/tUSD/t

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

PRICES OF BENZENE, PHENOL, CPL, PA6

200

700

1200

1700

2200

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016

EUR/t

Benzene Liquid caprolactam PA6 Phenol

150

200

250

300

350

100

200

300

400

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016USD/t

EUR/tAmmonium nitrate EUR/t UAN EUR/t Urea USD/t

PRICES OF AN, UAN AND UREA

PRICES OF MELAMINE AND CAPROLACTAM

1000

1500

2000

2500

1200

1300

1400

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

USD/tEUR/t

Melamine EUR/t Crystalline caprolactam USD/t

PRICES OF NPK, DAP, PHOSPHATE ROCK, POTASSIUM CHLORIDE

50

150

250

350

450

550

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016USD/t

NPK DAP Phosphate rock Potassium chloride

PRICES OF TITANIUM WHITE, ILMENITE AND TITANIUM SLAG

0

200

400

600

1900

2000

2100

2200

2300

2400

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016USD/tEUR/t

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

Contact

Investor Relations Office

[email protected]

56

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