ROS AGRO INVESTOR PRESENTATION · 2019-03-16 · 2 DISCLAIMER IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation

20 November 2018

ROS AGRO INVESTOR PRESENTATION

March 2019

2

DISCLAIMER

IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by ROS AGRO PLC (the “Company”) or any person on behalfof the Company, and any question-and-answer session that follows the oral presentation (collectively, the “Information”). In accessing the Information, you agree to be bound by the following terms and conditions.

The Information is not intended for potential investors and does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase securities of the Company,and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever.

The Information has been prepared by the Company, and no other party accepts any responsibility whatsoever, or makes any representation or warranty, express or implied, for the contents of the Information, includingits accuracy, completeness or verification or for any other statement made or purported to be made in connection with the Company and nothing in this document or at this presentation shall be relied upon as a promiseor representation in this respect, whether as to the past or the future.

The Information contains forward-looking statements. All statements other than statements of historical fact included in the Information are forward-looking statements. Forward-looking statements give the Company’scurrent expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statementspreceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “estimate,” “plan,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other wordsand terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause theCompany’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-lookingstatements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future.

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Within the European Economic Area, this presentation is being made, and is directed only, to persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive 2003/71/EC andamendments thereto, including Directive 2010/73/EU, as implemented in member states of the European Economic Area (“Qualified Investors”). These materials do not constitute a prospectus and do not constitute anoffer to purchase securities. This presentation is for information purposes only and does not constitute an offering document or an offer of securities to the public in the United Kingdom to which section 85 of the FinancialServices and Markets Act 2000 of the United Kingdom (as amended by the Financial Services Act 2012 of the United Kingdom) applies. It is not intended to provide the bases for any evaluation of any securities and shouldnot be considered as a recommendation that any person should subscribe for or purchase any securities. In the United Kingdom, this presentation is being made, and is directed only, to persons who are both: (i) QualifiedInvestors; and either (ii) persons falling within the definition of Investment Professionals (contained in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)) or otherpersons to whom it may lawfully be communicated in accordance with the Order; or (iii) high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described inArticle 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). Any investment or investment activity to which this presentation relates is available only to Relevant Persons and willbe engaged in only with Relevant Persons.

This presentation should not be construed as legal, regulatory, tax, accounting, investment or other advice. Analysis and opinions contained herein may be based on assumptions that, if altered, can change the analyses oropinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any security, credit, currency, rate or other market or economic measure. The Company's pastperformance is not necessarily indicative of future results

3

BUSINESS OVERVIEW

ROS AGRO AT A GLANCEA LEADING AGRICULTURAL COMPANY IN RUSSIA WITH OVER 20 YEARS HISTORY AND STRONG FINANCIAL PERFORMANCE

KEY PERFORMANCE INDICATORS

HIGHLIGHTS

83

SALES 2018

RUB bn5%

EBITDA 2018

16 RUB bn16%

19

EBITDA MARGIN

2018

%+1 pp 3.4

NET DEBT /

LTM EBITDA

x2018

ADJ. EBITDA & NET PROFITRUB bn

6,8

18,1

24,4

18,214,0

16,2

3,2

20,223,7

13,7

5,6

12,8

2013 2014 2015 2016 2017 2018

EBITDA adj. Net profit

19% 31% 34%

Adj. EBITDA margin

22% 18%

Net profit margin

9% 34% 33% 17% 7%

19%

15%

36.5

59.1

72.4

84.379.1

83,0

2013 2014 2015 2016 2017 2018

CONSOLIDATED SALESRUB bn

5 segmentsas a part of largest vertically integrated agricultural holding in Russia

24 brandswith leading consumer positions in target markets1

Cycle neutraldiversified business model enabling to deliver strong margins at any point in cycle

80 regionsin Russia covered by in-house sales network with export to over 35 countries

№2mayonnaise producer in Russia with 25% production share3

№3agricultural land holder in Russia with 652 kha of land bank primarily located in the Black Earth regions2

№3sugar producer in Russia with 13% production share2

№4 pork producer in Russia with 5% production share2

Source: Soyuzrossakhar, National Union of Pig Breeders, Russian Oil and Fats Union, BEFL, Company estimates, 2018FY audited financials. Note: 1 Including consumer brands under SolPro and new Milk Products segment;2 Market positions among producers in Russia as of 2018; 3 Illustrative combination of ROS AGRO and SolPro positions among mayonnaise producers in Russia in 2018 (8 % and 17% production share in 2018 respectively according to Russian Oil and Fats Union); 4 Before elimination of intergroup operations and includes insignificant portion of consolidated financial results generated by Milk segment; 5 Illustrative Net Debt / EBITDA excl. SolPro debt (in the amount of RUB 19.9bn) and not accounting for an increase in the level of Working Capital due to elevated level of inventories of sugar and grain as well as investment into SolPro working capital

26%

24%28%

22%

REVENUE STRUCTURE

BY SEGMENT4

25%

35%14%

25%

Sugar Meat Oil & Fats Agriculture

EBITDA STRUCTURE

BY SEGMENT4

LEVERAGE PROFILE

14,6

3,6

15,6

4,3 6,613,3

20,1

21,0

2,2x

0,2x 0,6x 0,2x 0,5x

3.4x / <0.8x5

0

10

20

30

40

50

60

70

-10

-8

-6

-4

-2

0

2

4

2013 2014 2015 2016 2017 2018

Net Debt, RUB bn Net Debt/LTM EBITDA

Elevated leverage due to a) acquisition of SolPro debt and working capital and b) excess working capital due to increased level of inventories of sugar and grain ahead of expected price growth

54.3

WorkingCapital

SolPro Debt

4

Source: Soyuzrossakhar, National Union of Pig Breeders, Russian Oil and Fats Union, BEFL, Company estimates. Note: 1 Based on mayonnaise production; 2 Illustrative combination ROS AGRO and SolPro 2018 positions among producers in Russia (8 % and 17% production share in 2018 respectively according to Russian Oil and Fats Union); 3 Production in September – December; 4 ROS AGRO acquired the debt of JSC ALEV in the amount of RUB 0.9 billion and rented its production assets, namely, the Koshkinsky Butter and Cheese Plant in the Samara Region and the Zavolzhsky Dairy Plant in the Ulyanovsk Region; 5 Total implied annual production volume (calculated as annualized production of 9 kt in September – December 2018)

ROS AGRO: FROM SUGAR-FOCUSED PRODUCER TO THE LEADING RUSSIAN AGRICULTURAL PLATFORMM

ILK

PR

OD

UC

TS

2011Initial Public Offering

2016Secondary Public Offering

2018+Leading agricultural platform set for further growth

SUCCESSFUL DIVERSIFICATION BY STRENGTHENING MARKET POSITIONS AND ENTERING NEW BUSINESS SEGMENTS

Data for 2011 Data for 2018Data for 2016

Development of retail distribution channel

Assets modernization and capacity expansion

Expansion to Far East

TOP-13PRODUCER IN RUSSIA

DAIRY PRODUCTION STRUCTURE3

TOTAL DAIRY PRODUCTION

275

Dry mixes Cheese productButter Other

MEA

T #5PRODUCER

IN RUSSIA

Industry consolidation and expansion to new regions

Increasing production of processed meat and B2C products

Increasing productivity gain of live pigs

PORK SALES STRUCTURE

TOTAL PORKPRODUCTION

64

kt

Live pigs

100% #2PRODUCER

IN RUSSIA


Live pigs Carcass

Large cut Others

47%20%

26%

7%

194203% #4PRODUCER

IN RUSSIA


Live pigs Carcass

Large cut Others

16%

18%

43%

23% 205


kt

6%


kt

AG

RIC

ULT

UR

E

#2LANDHOLDER IN RUSSIA

Digitalization and automatization

Increasing in-house logistics capabilities

GROSS HARVEST STRUCTURE

TOTAL ARABLELAND

361

k ha

4%33% #2LANDHOLDERIN RUSSIA


Cereal crop Oil crop Sugar beet Other

17%

79%

Cereal crop Oil crop Sugar beet

551

TOTAL ARABLE LAND

53% #3LANDHOLDER IN RUSSIA


Cereal Crops Oil Crop Sugar Beet9%

39%

19%

7%

22%

71%

582

k ha

6%

TOTAL ARABLE LAND

k ha

Scalability potential

Group decided to launch4 Milk Products segment on the basis of the following 3 Key Investment Criteria:

Competitive advantage Position in industry

OIL

& F

ATS

#5PRODUCER IN RUSSIA

Integration of SolPro assets

Increasing capacity utilization

Launch of national brand

OIL & FATS PRODUCTION STRUCTURE

TOTAL OIL & FATS PRODUCTION

92

kt

Margarine Mayonnaise

62%

38% #5PRODUCER IN RUSSIA


Meal Unrefined oil Bottled oilMargarine Mayonnaise

41%

33%

2%8%

16%

487


429% #2PRODUCERIN RUSSIA


Meal Unrefined oil Bottled oilMargarine Industrial fats Mayonnaise

41%

35%

13%

4%1%6%

775

kt

59%


kt

1 1 1,2

kt

60%

21%

8%11%

Mid-term targets

SUG

AR

#2PRODUCER IN RUSSIA

Launch of 2nd

desugarization station

Increasing operational efficiency

SHARE OF BEET SUGAR IN TOTAL PRODUCTION

BEET SUGARPRODUCTION

462

kt

Beet sugar Cane sugar

41%

59%#3PRODUCER IN RUSSIA


+52 p.p.


93%

7%

750


62%#3PRODUCER IN RUSSIA


Beet sugar

100%

773

kt

3%


kt

5

6

INVESTMENT HIGHLIGHTS

Unique agribusiness platform with leading positions across diverse segments

Robust vertical integration: from field to consumer capitalizing on leading brands

State-of-the-art facilities in strategically important locations

Established platform for further organic and M&A growth

Government support for agriculture sector5

2

6

1

7

Seasoned management team and best-in-class corporate governance practices

Strong financial performance

4

3

7

OIL & FATS AGRICULTURE

UNIQUE AGRIBUSINESS PLATFORM WITH LEADING POSITIONS ACROSS DIVERSE SEGMENTS

Source: Soyuzrossakhar, National Union of Pig Breeders, Russian Oil and Fats Union, BEFL (May, 2018 with correction for ROS AGRO land bank as of end of 2018), Company estimates. Note: 1 Illustrative combination ROS AGRO and SolPro 2018 positions among mayonnaise producers in Russia (8% and 17% production share in 2018 respectively according to Russian Oil and Fats Union) ; 2 Illustrative combination ROS AGRO and SolPro 2017 positions among vegetable oil producers in Russia (4% and 14% production share in 2017 respectively according to Russian Oil and Fats Union) ; 3 Dominant; 4 Agro-Belogorye; 5 Yug Rusi; 6 Solnechnye Producty; 7 PiR PAK; 8 Savushkin; 9

Based on 2018FY results; 10 Majority of 2018 export sales in Meat segment was held to Hong Kong, Vietnam and Belarus

PO

INT

IN C

YC

LEM

AR

KET

PO

SITI

ON

MILK PRODUCTS

TOP-15 CHEESE PRODUCERS

5% 5% 5%

2%

ROS AGRO IS THE ONLY INTEGRATED AGRIBUSINESS PLATFORM IN RUSSIA BENEFITING AT ANY POINT IN CYCLE

PRODUCER

IN RUSSIA

1

№22%

16%

13%

TOP-3 SUGAR PRODUCERS

SUGAR

№PRODUCER

IN RUSSIA

3

10%

6% 5% 5%

790676 652

25% 25% 20%

24% 18% 12%

TOP-3 MAYONNAISE PRODUCERS

MEAT

TOP-4 PORK PRODUCERS TOP-3 LAND HOLDERSTOTAL LAND BANK, KHA

№PRODUCER

IN RUSSIA№

LANDHOLDER

IN RUSSIA

№PRODUCER

IN RUSSIA

TOP-3 VEGETABLE OIL PRODUCERS

№PRODUCER

IN RUSSIA

CU

STO

MER

FO

CU

SR

eve

nu

e s

tru

ctu

re9

B2B

62% 38%

B2C

• Low cost asset base to serve growing market

• Promising platform for retail sales on the basis of 4 leading brands

B2B

71% 29%

B2C

• Stable sales to industrial producers

• Sale of sub-products

• Indirect exposure to export

• 5 leading consumer brands in all segments

• Stable demand

B2B

64% 36%

B2C B2B

57%

B2C

• Bulk sales to domestic and export10 markets

• Established sales channel in case of limited B2C demand

• Low elasticity of demand

• Distribution through leading retail chains

• Higher margins vs. B2B

• Export to CIS countries

• Meal supply to Meat segment

• 14 leading consumer brands sold in Russia & CIS

• Diversified offering driving margins

• Sales to open market and adjacent business segments at market prices

• Ability to balance segmental performance on consolidated basis

100%

B2B

43%

1

4

65

6

78

2

8

ROBUST VERTICAL INTEGRATION: FROM FIELD TO CONSUMER CAPITALIZING ON LEADING BRANDS

Source: company data

Note: 1 Also includes Food Expert, Colibri Fiori and Formula Chistoty brands; 2 SolPro consumer brands; 3 Market position among sugar consumer brands in respective segments

RA

W

PR

OD

UC

TSA

LES

TO B

2B

AN

D B

2C

CLI

ENTS

IN R

USS

IA A

ND

AB

RO

AD

PR

OC

ESSI

NG

BY

IN

-HO

USE

FA

CIL

ITIE

S

AGRICULTURE BUSINESS

SUGAR SEGMENTOIL & FATS SEGMENTMEAT SEGMENT MILK PRODUCTS

B2B B2C B2B B2C1 B2B B2C

Corn SoybeanGrains Sugar beetSunflower

Cultivation PlantingTreatment and

dressingHarvesting Storage

2

B2B B2C

• Dehydrated whey

3rd party sales

Sugar production

Molasses desugarisationOil extraction and

obtaining co-products

Oil and fats production

Slaughter house and meat processing

Compound feed production

Live pigs production

Pulp

Meal

(Required for production of extra grade sugar)100% self-sufficiencyc. 50% c. 25%

100%

Brand new business segment currently operating on the basis of 2 production plants: Zavolzhsky dairy plant (Ulyanovsk region) and Koshkinsky butter & cheese plant (Samara region), one of the leading plants in this segment in Russia

Fats & Cheese plant

Dairy plant

#23

#13

#13

2 2

22

2

Select clients Select clients Select clients

9

STATE-OF-THE-ART FACILITIES…


ASS

ETS

OV

ERV

IEW

MILK PRODUCTS

2 Plants

300 t – daily milk processing

capacity for Koshkinsky

14 kt p.a. – dry industrial mixes

production capacities

3C

AP

AC

ITY

D

YN

AM

ICS

TOTA

L C

AP

EX

SUNFLOWER PROCESSING CAPACITY kt / day

OVER RUB 90BN INVESTED SINCE 2011

SUGAR BEET PROCESSING CAPACITYkt / day

SUGAR

9 Sugar plants

54 kt / day – sugar beet

processing capacity

428 kt – sugar storage

capacity

34,6 35,1

50,3 53,0 53,9

2014 2015 2016 2017 2018

RUB BN

Since 2011

AGRICULTURE

652 k ha – a total land bank

93% of the land bank under

ownership or long-term lease

875 kt of grain – storage

capacity

412 410

551 567 582

2014 2015 2016 2017 2018

ARABLE LANDthousand hectares

RUB BN

Since 2011

MEAT

18 pig farms

234 kt – total annual

capacity of pork in live weight

650 kt – compound feed

production capacity

OIL & FATS

3 Plants

423 kt p.a. – sunflower seed

processing capacity

100 kt p.a. – production

capacity of vegetable oil products

0,5 0,6 0,60,8

1,3

2014 2015 2016 2017 2018

1,6 1,61,8 1,8 1,8

2014 2015 2016 2017 2018

PORK LIVESTOCKthousand heads

RUB BN RUB BN

Since 2011Since 2011

10

Source: company estimates, company approved CAPEX budget

Note: company estimations as of 2018 year end; land bank does not include arable land in Saratov region which is operated under temporarily lease agreement as a part of SolPro deal

Tambov and Voronezh regions

Orel and Kursk regions Belgorod region YekaterinburgSamara and Ulyanovsk

regionPrimorsky region

10 pig farms 3 breeding farms 1 compound feed plant 1 slaughterhouse

--

8 pig farms 2 breeding farm 1 compound feed plant 1 slaughterhouse

-- --

To be launched in 2019-20: 6 pig farms 1 breeding farm 1 compound feed plant 1 slaughterhouse 1 recycling facility

-- -- --

1 oil and fats plant

1 oil extraction plant

1 soy oil and fats plant

Land bank of 184k ha Land bank of 71k ha Land bank of 303k ha -- -- Land bank of 94k ha

3 sugar plants 1 cereal plant

3 sugar plants 3 sugar plants -- -- --

-- -- -- -- 1 cheese plant

(Koshkinsky) 1 dairy plant (Zavolzhsky)

--

OIL

&FA

TSM

ILK

P

RO

DU

CTS

SUG

AR

MEA

TA

GR

ICU

LTU

RE

3 …IN STRATEGICALLY IMPORTANT LOCATIONS THROUGHOUT RUSSIA CAPITALIZING ON CLOSE PROXIMITY BETWEEN KEY BUSINEES SEGMENTS

11

ESTABLISHED PLATFORM FOR FURTHER ORGANIC AND M&A GROWTH

Source: company data, Soyuzrossakhar, Russian Oil and Fats Union. Note: 1 Illustrative combination of ROS AGRO and SolPro positions among mayonnaise producers in Russia in 2018 (8 % and 17% production share in 2018 respectively according to Russian Oil and Fats Union)

FAVOURABLE MARKET STRUCTURE… … COUPLED WITH STRONG ROS AGRO DEVELOPMENT PLATFORM

OVERVIEW OF ONGOING INVESTMENT PROJECTS

ORGANIC GROWTH M&A ACTIVITY

DESCRIPTION INVESTMENTS

• Major project of pig farms construction in Tambov region with

c.97% completion as of 1 Mar 2019

• Vertically integrated facilities including 3 pig farms, slaughterhouse

and compound feed production set to produce 58kt of live weight

per annum

Tam

bo

v-3

OVERVIEW OF LATEST MAJOR M&A TRANSACTIONS

STRONG BALANCE SHEETOngoing strategy to keep leverage low to maintain flexibility in executing attractive investment projects and M&A transactions at the right time

PROVEN TRACK RECORD OF SUCCESFUL ACQUISITIONS AND INVESTMENT PROJECTSOver 5 M&A deals since 2011 including transformational acquisitions of Razguliay and SolProOver 10 investment projects in all business segments since 2011

DEFINED INVESTMENT CRITERIASet rule for new projects and M&A targets: Scalability potential | Competitive advantage | Position in industry

4

SATURATION OF DOMESTIC MARKET

Industry set for consolidation

Potential for operational efficiency increase

Favorable conditions for export growth

OVERLEVERAGED MARKET PLAYERS

High debt burden

Low quality management

Excess capital investments

LACK OF DIVERSIFICATION

Single product category players

Select competitors less prone to market volatility

RUB BN

• In 2016 Group commissioned its first molasses desugarization line at

Znamensky sugar plant

• Project has enabled Group to process 100kt of molasses and produce

extra-grade sugar for soft drink producers with additional 10kt of

betaine output

• In 2018 Group launched construction of 2nd desugarization stationDe

suga

riza

tio

nst

atio

n

RUB BN

TRANSACTION IMPACT

BEFORE AFTER

# #Mayonnaise producer

Daily group sugar beetprocessing capacity

+37%

SOLPRO

YEAR

FRAGMENTED MARKET STRUCTURE

Market share of key players is relatively low(especially in meat and milk segments)

Presence of small / single-product focused players in certain markets

SOLPRO

RAZGULIAY

ktkt

1

12

1.7

0.3

0.1

0.2

Total amount:RUB 2.3bn

49.7

24.4

11.2

49.1

14.5

10.0

Support of preferential lending to agricultural enterprises

Support of investment lending in the agroindustry

Reimbursement of direct costs on the launch/upgrade of production facilities

“Unified” regional subsidy

Unrelated support subsidy in crop production sector

Agricultural machinery fleet renewal

Other subsidies

Total amount:RUB 159bn

Source: Ministry of Agriculture of Russia, public sources, Company data1 Including “unified” regional subsidy

GOVERNMENT SUPPORT FOR AGRICULTURE SECTOR

TOTAL SUPPORT RUSSIA (2018E) RECEIVED BY ROS AGRO IN 2018

MEAT BUSINESS

• Expansion of Tambov-3 (2 pig-breeding farms with a total capacity of 38 ths tons per year)

MILK BUSINESS

• Development of dairy product cluster in Far East

Ros Agro could potentially draw down

RUB 150bn using subsidized by the government lending facilities at below

3% interest rate

RUB bn

Potential financing for expansion projects,such as:

RUB bn

1

• Pig-breeding cluster project in Samara region

• Meat business expansion in Far East

5

13

SEASONED MANAGEMENT TEAM AND BEST-IN-CLASS CORPORATE GOVERNANCE PRACTICESPUBLICLY LISTED SINCE 2011


KEY MANAGEMENT TEAM MEMBERS CORPORATE GOVERNANCE STRUCTURE

Stanislav Shalamkov

Head of the Dairy Division

• 1 year at ROS AGRO

• Former CEO of Bondar Cheese Factory

COMPOSITION OF BOARD OF DIRECTORS

Vadim Moshkovich Chairman

• Founder

• Majority shareholder

Anna Khomenko

Board Member

• Owner and Managing Director of Fudiciana Trust (trustee and corporate services firm)

• Former CEO and a member of the Board of Directors of IFG Trust (financial services)

Richard Andrew Smyth

Independent Non-Executive Director

• Consultant for Mars Incorporated for Central Europe and CIS

• Former CEO at Mars Russia

Tassos TelevantidesIndependent Non-Executive Director

• Chairman of the Board Audit Committee

• Former Partner at PwC Cyprus for over 20 years

Maxim BasovChief Executive Officer

• 10 years at ROS AGRO

Nikolai Zhirnov

Head of the Sugar division


Dmitriy Garnov

Head of Agricultural Business


• Former Director of the Crop Production Division in Cherkizovo Group

Roman Danilin

Head of the Oil and Fats Division


• Former CEO at the Eriomyshki Confectionery factory

6

GENERAL SHAREHOLDERS MEETING

SUBSIDIARIES

BOARD OF DIRECTORS Audit Commitee

Controlappointment

Reporting

Election Recommendations

Maxim Basov Chief Executive Officer


14

STRONG FINANCIAL PERFORMANCE …

Source: Audited IFRS accounts for FY16-FY181 Calculated as operating profit before taking into account D&A, other net operating income/expenses (other than reimbursement of operating costs (government grants)), the difference between the gain on revaluation of biological assets and agriculture produce recognized in the year and the gain on initial recognition of agricultural produce attributable to realised agricultural produce for the year and revaluation of biological assets attributable to realised biological assets and included in cost of sales ; 2 Calculated as a sum of accounts receivable, inventories less accounts payable; 3 Short-term and long-term borrowings less cash and cash equivalents, banks’ promissory notes, bank deposits within short-term and long-term investments and bonds held for trading; 4 Includes purchases of property, plant and equipment and inventories intended for construction; 5 Company expectations

KEY FINANCIAL INDICATORS IN 2016-2018 KEY HIGHLIGHTS

RUB m 2016 2017 2018

Sales 84,257 79,058 82,978

growth 16% (6%) 5%

Gross profit 25,725 17,955 24,158

margin 31% 23% 29%

Adj. EBITDA1 18,205 13,955 16,179

margin 22% 18% 19%

Net income 13,945 5,563 12,828

margin 17% 7% 15%

Net working capital2 27,157 22,089 43,047

Net debt3 4,342 6,604 54,342

Net Debt/Adj. EBITDA 0.2x 0.5x 3.4x

Capex4 16,713 17,534 15,564

• In 2018, the Company’s sales recovered reaching ca. RUB 83.0bn comparingto ca. RUB 79.1bn in 2017

• The growth was primarily attributable to positive developments in oil & fats,meat and agriculture segments

– Oil & Fats sales increased by RUB 6.9bn (+35%) as a result of workingwith SolPro assets, an increase in sales volume of bottled oil (due tostart production of bottled oil on SAPP plant) and increase in salesprices of bulk oil, bottled oil and meal

– Meat sales increased by RUB 1.8bn (+9%) due to an increase in salesprice and sales volume of processed pork

– Agriculture sales increased by RUB 2.1bn (+11%) on the back of anincrease in sales price of almost all crops and higher sales volume ofsugar beet, wheat and sunflower in Q4 2018 vs Q4 2017

– Sugar sales decreased by RUB 6.3bn (-21%) as a result of decrease insales volume of sugar due to the transfer of the sales to 1H 2019

• Gross profit margin significantly improved during 2018 on the basis of strongpricing environment across both commodity and consumer products withinagriculture and oil & fats businesses

• Adjusted EBITDA margin reflective of gross margin development, increasingby 16% or RUB 2.2bn

• Over 2016-2018, the Company invested more than RUB 50bn, significantlyincreasing its asset base (+50% 2018 vs. 2016)

• Execution of the largest projects – Far East (RUB 28.0bn) and Tambov-3 (RUB12.0bn) in Meat segment, desugarization station (RUB 5.7bn) in Sugarsegment is on track

RECOVERY IN TOP-LINE GROWTH

STRONG MARGINS

CAPITAL EXPENDITURES

NET WORKING CAPITAL

• Net Working Capital turnover does not follow specific trend and primarilydriven by seasonality factor of operations and selling strategy

• In 2018, Net Working Capital increased by RUB 21.0bn (95% YoY) primarilydriven by surge in inventories (by RUB23.3bn or 91% YoY)

• High inventory levels are attributable to the Company’s selling strategy withrespect to holding inventory in expectation of higher prices in H1 20195

7

15

… AND MODERATE LEVERAGE

• Net debt increased by RUB 47.7bn to RUB 54.3bn as compared to 2017

– Long-term borrowings increased by RUB 24.8bn (up 66%) to RUB 62.6bn as compared to 2017

– Increase in total debt is mainly related to financing raised for SolPro deal

• In 2017, the Company received bank loans with decreased preferential interest rates under the new programme of government support

– Under the programme, the government provides subsidies to the banks to compensate for the loss of income on credits with decreased interest rates given to agricultural producers

• In 2018, the Company received RUB 1.1bn in reimbursement of interest expense (under the state agriculture subsidies program) which covered 28% of gross interest expense

Source: Audited IFRS accounts for FY16-FY18 1 Adjusted EBITDA 2018 does not include financial results from SolPro assets; 2 Deferred liability due to RSHB; 3 Increase of sunflowers seed stock in Oil and Fat segment in result of working with SolnechnyeProducty assets

NET DEBT DEVELOPMENT LEVERAGE DEVELOPMENT

DEBT BREAKDOWN

By Maturity By Rate Type

Short-term borrowings

34%

Long-term borrowings

66%

Fixed rate100%

6.6

25.6

54.3

19.0

20.1

8.7

Net Debt(31-Dec-2017)

Net Debt Change(excl. SolPro)

Net Debt(31-Dec-2018)(excl. SolPro)

SolPro Debt

SolPro WCFinancing

Net Debt(31-Dec-2018)

0.5x 3.4x1.6x

RUB bn

NET DEBT / ADJUSTED EBITDA

Most of Company’s debt (ca. 100%) is RUB denominated

1

3

2

7

16

17

2.2 2.42.7 2.9 3.1

0.70.7

0.70.6

0.63.0

3.13.4

3.53.7

2014 2015 2016 2017 2018

Industrial production Household production

Source: Ministry of Agriculture of Russia, public data, company data1 Excluding VAT; 2 Includes Belarus and other countries

MEAT INDUSTRY OVERVIEW

PORK PRICE (Live-weight)1

KEY MARKET TRENDS

PORK PRODUCTION (Carcass-weight)

2019 GUIDANCE

PORK AND PORK PRODUCTS EXPORT (Carcass-weight)

#4

• Domestic production is narrowing margin with domestic consumption (currently, constitutes ca. 96%)

• Companies are actively pursuing export opportunities (CIS, Hong Kong, Vietnam)

• Price remains quite volatile

• Decrease in household production share

• Commissioning of new capacities on the ground of increasing consumption (by ca. 2-3%) and export opportunities (by up to 20%)

105

102

107 107106

97

90

89

86

107

112

125

108 106

89 89

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018 2019

Average 2017: 102 RUB / kgAverage 2018: 106 RUB / kgAverage 2019 (YTD): 89 RUB / kg

m tons

17 1631

4635

3

11

20

26

0.42

7

7 21

13

12

15

20

1824

61

88

102

2014 2015 2016 2017 2018

Hong Kong Ukraine Vietnam Other

ths tons

2

RUB / kg

COMPANY’S POSITION

Producer with 5% production share

18

MEAT SEGMENT PERFORMANCE

Source: Company data1 Excluding VAT

FINANCIAL HIGHLIGHTS TOTAL PORK SALES VOLUME DYNAMICS

Sales (up RUB 1.8bn, +9% YoY)

• Large cuts sale price increased by 11.2 RUB/kg (+8% YoY) from 148.9 RUB/kg to 160.1 RUB/kg (excl. VAT), also carcass sale price increased by 11.4 RUB/kg (+9% YoY) from 124.9 RUB/kg to 136.3 RUB/kg (excl. VAT)

– Increase in prices was driven by exit of a number of poultry enterprises from the market (Belaya Ptica, Evrodon), import ban of pork from Brazil, as well as a number of African swine fever outbreaks on the back of increased pork demand

• Livestock sales volume decreased significantly by 30 ths. tons (-53% YoY) from 57 ths. tons to 27 ths. tons due to shift to high-value processed products

Adjusted EBITDA (up RUB 0.7bn, +12% YoY, margin 31%)

• Adjusted EBITDA increased by 12% up to RUB 7.0bn in 2018 due to sales growth on the back of stable margin levels

RECENT PERFORMANCE (2018 VS. 2017) AVERAGE REALISED PRICE DYNAMICS1

RUB bn ths tons

RUB / kg

17.9

20.522.4

4.0

6.3 7.0

22%

31%31%

2016 2017 2018

Sales Adj. EBITDA Adj. EBITDA margin

76

57

2732 31 30

42

6574

4

161219 22

2016 2017 2018Livestock Carcass Large cuts Consumer products Other pork cutting products

162 176 169

26%

39%53%

91.794.9 88.7

125.3124.9

136.3149.8

148.9 160.1170.6

190.6192.0

51.4

51.5

52.5

2016 2017 2018Livestock Carcass Large cuts Consumer products Offal

TOTAL SALES VOLUME

Widening price premium for processed

meat

19

Source: company estimates, company approved CAPEX budget

Note: 1 Preliminary estimates

1

2

3

KEY INVESTMENT PROJECTS / INITIATIVES

Far East

Purpose: region diversification, export to AsiaCapacity: 75 thousand tons Location: UssuriyskProject cost: RUB 28 bn Launch: 2021Assets: 6 pig farms, 1 breeding farms, 1 compound feed mill, 1 slaughterhouse and 1recycling facility

Purpose: increase B2C salesCapacity: +58%1 slaughtering, +36%1 meat processing, 50kt of consumer productsLocation: Belgorod & TambovProject cost: RUB 6 bnLaunch: 2019-2020

Meat processing expansionTambov 3+

Purpose: production increaseCapacity: 38 thousand tons of live pigsLocation: Tambov regionProject cost: RUB 8 bn Launch: 2021Assets: 2 pig farms

SEGMENT KEY INDUSTRY TRENDS MID-TERM GOALSM

EAT

Timely launch of ongoing expansion projects

Retail sales development

Slaughterhouse expansion

Increase productivity gains of live pigs

Increasing focus on B2C products

Increasing share of export sales

Sales prices volatility

MEAT SEGMENT STRATEGY

20

68%

10%

7%

15%

Vegetable oil Mayonnaise and sauces

Consumer margarine Industrial fats

Source: Ministry of Agriculture of Russia, public data, company data. Note: 1 Excluding VAT; 2 Illustrative combination ROS AGRO and SolPro 2017 positions among vegetable oil producers in Russia (4% and 14% production share in 2017 respectively according to Russian Oil and Fats Union); 3 Illustrative combination ROS AGRO and SolPro 2018 positions among mayonnaise producers in Russia (8% and 17% production share in 2018 respectively according to Russian Oil and Fats Union); 3 Illustrative combination ROS AGRO and SolPro 2018 positions among consumer margarine producers in Russia (41% and 26% production share in 2018 respectively according to Russian Oil and Fats Union)

• Ongoing market consolidation

• Increase in sunflower harvest area

SUNFLOWER OIL PRICE1

KEY MARKET TRENDS

OIL & FATS INDUSTRY OVERVIEW

GROSS OILSEED HARVEST

• Average sunflower oil price in 2019 may decrease on the back of large carry-over stocks from 2018

• Increase in sunflower oil export due to sunflower crop growth in 2018

• Exports of mayonnaise and margarine to the CIS nations is expected to grow

2019 GUIDANCE

MARKET STRUCTURE (2018)

Producer on the vegetable oil market with 18% production share2

Producer on the consumer margarine market with 67%4 production share

13.8 13.8

16.315.4

19.7

2014 2015 2016 2017 2018

78% 70% 74% 64% 82%

m tonsPROCESSING CAPACITY UTILISATION

Total production:8.6 m tons

42.3

38.6

35.9

38.8

40.6

39.5

40.440.1

38.4

41.9

42.8

42.6

38.639.5

40.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018 2019

ths RUB / ton

Producer on the mayonnaise market with ca. 25% production share3

Average 2017: 39.1 ths RUB / tonAverage 2018: 40.6 ths RUB / tonAverage 2019 (YTD): 39.8 ths RUB / ton


#2

#1#2

21

OIL & FATS SEGMENT PERFORMANCE

Source: Company data1 Excluding VAT; 2 External sales only, includes sales of the bottled oil, unrefined oil and meal produced at SolPro oil exctraction plants

FINANCIAL HIGHLIGHTS SALES VOLUME2 AND PRICE OF CONSUMER PRODUCTS


• Total sales grew due to an increase in sales prices of both consumer and commodity products as well as higher sales volume of commodity products

– Bottled oil sales jumped five-fold due to new bottling shop launch, development of distribution channels, rolling out of own retail trademarks and export growth

– Margarine sales dropped 18% on the back of a decline in exports and shrinking of domestic sales geography (focus on the "home" region)

– Mayonnaise sales decreased by 18% as a result of sales geography shrinking and leaving several retail networks, partially offset by the export growth

Adjusted EBITDA (up RUB 2.2bn, +319% YoY, margin 11%)

• Adjusted EBITDA increased due to gross margin expansion as well as the enhanced control of fixed costs

– Decreased cost of sales was driven by the reduction of variable costs due to production modernization, optimization of purchasing procedures and drop in production losses

RECENT PERFORMANCE (2018 VS. 2017) SALES VOLUME AND PRICE OF COMMODITY PRODUCTS

RUB bn SALES VOLUME ths tons

AVERAGE PRICE1

RUB / kg

SALES VOLUMEths tons

AVERAGE PRICE1

RUB / kg

19.9 19.4

26.3

(0.4)0.7

2.9

(2%)

4%

11%

2016 2017 2018

Sales Adj. EBITDAAdj. EBITDA margin

76.7

80.5

81.375.6 78.1

83.2

71.9

58.855.7

2016 2017 2018

Mayonnaise and saucesConsumer margarineBottled oil

116

150168200

253

302

3 10

2016 2017 2018

Unrefined oil Meal Industrial fats

48040631653.0

42.2 45.7

18.2 16.0 17.2

54.0

67.5

2016 2017 2018Unrefined oil MealIndustrial fats

TOTAL SALES VOLUME

TOTAL SALES VOLUME

77

5948

37 3629

18 20

97

2016 2017 2018

Mayonnaise and sauces Consumer margarine

Bottled oil

174115132

MID-TERM GOALS

• Grow bottled sunflower oil sales to B2C and industrial fats production

• Integration of SolPro and further consolidation opportunities

• Development of strong national brands

22

• Increasing export of crops (by 45% over the last 5 years)

• Growth in high margin crops such as soy, sunflower and barley

Source: Ministry of Agriculture of Russia, public data, company data1 Excluding VAT

GRAINS PRICE1

KEY MARKET TRENDS

AGRICULTIRE INDUSTRY OVERVIEW

TOTAL HARVEST

• Increase in crops harvest on the back of recovering yields

• Export may reach ca. 47 m tons of grain, with wheat accounting for 40 m tons

2019 GUIDANCE

HARVEST AREA

Largest land bank holder

YIELDS

91 93105

120100

11 12

14

14

17102 104

119

134

117

2014 2015 2016 2017 2018

Grains Oilseeds

OILSEEDS PRICE1

38.9 38.1

10.6 11.1

49.5 49.2

2017 2018

Grains Oilseeds

m tons

ths ha

3.2

1.3

3.1

1.4

Grains Oilseeds

2017 2018

tons / ha

7.1

9.29.5

7.7

9.6

9.0

10.9

12.0

9.0

11.3

2014 2015 2016 2017 2018

Domestic price Global price

ths RUB / ton

16.6

24.8

25.2

20.4

23.9

17.5

23.1

25.6

21.4 22.7

2014 2015 2016 2017 2018

Domestic price Global price

ths RUB / ton


#3

23

AGRICULTURE SEGMENT PERFORMANCE

Source: Company data1 Sugar beet sales are 100% internal and not presented here; 2 Excluding VAT

FINANCIAL HIGHLIGHTS SALES VOLUME DYNAMICS1


• Increase in sales prices of all crops: wheat (+46% YoY), barley (+56% YoY), oilseeds

(+9% YoY) on the back of reduced harvest in Russia vs. previous year and concerns

of exporters around potential corn export duty implementation since 1st January

2019

• Decline in sales in 2018 was mainly driven by postponing part of sales to the first

half of 2019 on the expectations of more favourable price environment

Adjusted EBITDA (up RUB 4.9bn, 65x growth YoY, margin 24%)

• Adjusted EBITDA has significantly increased on the back of sales prices growth and

cost of sales remaining on par with 2017 level

RECENT PERFORMANCE (2018 VS. 2017) AVERAGE SALE PRICE DYNAMICS1,2

RUB bn

21.2

18.8

20.8

6.2

0.1

5.0

29%

0.4%

24%

2016 2017 2018

Sales Adj. EBITDA

Adj. EBITDA margin

413

710510

377

193

152

182169

91

50

84

54

91

105

109

7

10

54

2016 2017 2018

Wheat Barley Soy Sunflower seeds Corn Other

1,119 1,271 970

ths tons

21.220.0

23.521.7

17.1

18.6

8.1 7.910.19.4

5.3

7.57.4 6.1

8.9

7.26.2

9.7

2016 2017 2018

Wheat Barley Soy Sunflower seeds Corn Other

ths RUB / ton

• Improved control over fields

• Increase yields per hectare and quality of production

• Productivity growth via integration of IT and solutions

• Ongoing land restructuring

MID-TERM GOALSTOTAL SALES VOLUME

24

Source: Ministry of Agriculture of Russia, public data, company data1 Excluding VAT; 2 According to the Ministry of Agriculture of Russia

SUGAR INDUSTRY OVERVIEW

ISCO KRASNODAR PRICES1

KEY MARKET TRENDS

SUGAR PRODUCTION

2019 GUIDANCE

SUGAR BEET PROCESSING

#3

• Stable consumption (direct or indirect)

• Import and export alternatives determine price pattern

• The market likely to stay in “balance” following overproduction period

• Sugar beet harvest is likely to remain at 2018 level2

• Factoring-in stable price environment, export or import potential will remain limited

4.65.1

5.8

0.60.6

0.35.2

5.76.1

6.5

5.9

2014 2015 2016 2017 2018


30.933.7

45.0 46.0

40.0

2014 2015 2016 2017 2018

17.8% 17.8% 16.0% 16.9% 17.9%

28.929.3

30.1

38.0

23.2

21.9

22.523.3

25.5

30.8

27.6

28.8

33.133.533.1

31.3

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2017 2018 2019

m tons

m tons

PROCESSING CONVERSION

RUB / kg

Average 2017: 28.1 RUB / kgAverage 2018: 28.7 RUB / kgAverage 2019 (YTD): 31.9 RUB / kg


Producer with 13% production share

25

SUGAR SEGMENT PERFORMANCE

Source: Company data1 Excluding VAT

FINANCIAL HIGHLIGHTS SUGAR BEET HARVEST AREA

Sales (down RUB 6.3bn, -21% YoY)

• The decrease in sales was driven by:

– Fall in the sugar sales volume from 900 ths tons in 2017 to 702 ths tons in 2018 (-22% YoY) due to decreased sugar production and Company’s plans to move part of sales to the first half of 2019 on the back of expected continued sugar price growth

– Average sugar sales price stayed at 2017 level of 30.6 RUB/kg (excl. VAT)

Adjusted EBITDA (down RUB 0.6bn, -11% YoY, margin 20%)

• Continued excess supply of sugar beet led to cost savings resulting in EBITDA margin growth

RECENT PERFORMANCE (2018 VS. 2017)

SUGAR PRODUCTION

AVERAGE SUGAR SALES PRICE1

RUB bn ths ha

ths tons

RUB / kg(22%) 0%GROWTH

37.2

30.4

24.1

9.65.5 4.9

26%

18%20%

2016 2017 2018

Sales Adj. EBITDA Adj. EBITDA margin

750

59

809

984

773

2016 2017 2018Beet sugar Cane sugar

39.4

30.6 30.6

2016 2017 2018

98 93 89

2016 2017 2018

44.2 37.8 39.1

HARVEST YIELDS, tons / ha

26

Source: company data, company approved CAPEX budget

Note: 1 In months

Desugarization station

Purpose: extra sugar extraction | production of extra-grade sugar for B2B clients

Capacity: up to 70 thn tons of sugar p.a. | up to 22 thn tons of betaine p.a.

Raw materials: molasses from ROS AGRO’s plants

Location: Belgorod region

Project cost: RUB 5.7 bn

Launch: Q4 2019

SEGMENT KEY INDUSTRY TRENDSSU

GA

RStable direct and indirect consumption

Import/export alternatives to determine price pattern

MID-TERM GOALS

DESUGARIZATION STATION PROJECT

№ Term1

2018 2019

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1. Design stage 11

2. Equipment procurement 4

3. Station construction 13

4. Silos construction 22

5.Installation of boilers and turbine

11

6. Equipment installation 10

7. Construction of containers 22

8.Commissioning, reaching production capacity

3

Total: 24

OVERVIEW CURRENT STATUS

1

2

SUGAR SEGMENT STRATEGY

Sugar loss decrease through the launch of new desugarization station

Increase storage term for sugar beet

Integration of the leading technology solutions

27

20 2332 3840 57

156

195198

279

217

325

6478

112

183

2014 2015 2016 2017 2018FRaw market milk Drinking milkFermented milk products CurdCheeses and cheese products ButterMargarine and spreads Ice-cream

Source: Ministry of Agriculture of Russia, public data, company data1 Excluding VAT

MILK INDUSTRY OVERVIEW

CHEESE PRODUCTION

KEY MARKET TRENDS

DAIRY PRODUCTION

2019 GUIDANCE

PRICES FOR KEY MILK PRODUCTS1

m tons

RUB / kg

ths tons

• Restoration of demand / supply balance

• Introduction of new production (processing plants)

• Intensification of production

• Consolidation of the sector and regional expansion

• Shift to most affordable dairy categories

• Gradual increase in semi-hard cheese category

• Growth in exports

• Reduction in imports

TOP-10 CHEESE PRODUCERS

11.7

0.7

0.6

0.4

0.3

0.1

0.1

Whole-milk products

Cheeses and cheeseproducts

Margarine andspreads

Ice-cream

Butter

Dried skimmed milk

Dried whole milk

Growth2014-2018

2%

34%

67%

(13%)

19%

(5%)

4%

33

398

51

354

EXPORT

IMPORT

107 57

115 189

98

22325

62

101

105

54

29

499

666

2014 2018

Hard cheese Cheese products Semi-hard cheese

Soft cheese Processed cheese Others

5%

5%

5%

5%

4%

4%

3%

3%

3%

3%

Top-10 producers

control only 40% of production

share

COMPANY’S MID-TERM GOAL

#3 Producer on the market

28

DAIRY PRODUCTS SEGMENT PERFORMANCE

Source: Company data1 Excluding VAT; 2 For instance, funds can be used to increase the throughput capacity of the milk receiving department up to 330 tons per day, to improve water treatment systems, and to purchase more advanced equipment; 3 Cheese product is the cheese produced with the use of vegetable fats

FINANCIAL HIGHLIGHTS DAIRY PRODUCTS OPERATIONAL HIGHLIGHTS (SEP-DEC 2018)

• Dairy products performance results were affected by the following factors:

– Utilisation rate of the butter and cheese plant was at 47% due to issues with milk purchasing and renewal of products sale contracts across all sales channels. In December 2018, milk supplies were streamlined

– In 2018, only 15% of cheese products and 3% of oil and fat products were sold via retail networks with 85% and 97% were sold to distributors and wholesale customers respectively

– Sales prices during Sep-Dec 2018 were in line with the average prices in the regions of sales

• In 2019, the average selling prices are expected to increase as a result of a change in product mix towards an increase in the share of packaged products, enhanced product quality level and consistency, brand promotion and development of relationships with retail networks

PERFORMANCE HIGHLIGHTS (SEP-DEC 2018) AVERAGE DAIRY PRODUCTS SALES PRICE1 (SEP-DEC 2018)

RUB m ths tons

RUB / kg

SALES BY FEDERAL DISTRICT

3

5.3

1.9

0.7 0.60.2 0.2

4.2

1.2

0.5 0.4 0.2 0.2

Dry mixes Cheese product Butter Cheese Spread Condensed whey

Production Sales

Volga44%

Central24%

Northwestern14%

Ural13%

Other5%

79.7

184.0

312.7

271.0

100.3

2.5

Dry mixes Cheese product Butter Cheese Spread Condensed whey

• Expansion to Far East

• Development of relationships with retail distribution networks

• Modernization of Koshkinsky Butter and Cheese Plant after completion of integration process2

MID-TERM GOALS

854

59

Revenue Adj. EBITDA

Sep-Dec 2018

7%

Adj. EBITDA margin

29

30

SOLPRO DEAL HIGHLIGHTSTRANSACTION OVERVIEW

Source: company data, Russian Oil and Fats UnionNote: 1 SolPro assets are legally owned by Quartlink Holding Limited (Cyprus); 2 2018 stand alone market position before acquisition by ROS AGRO; 3 Company’s preliminary estimations based on Russia’s Oil and Fats Union data for 2017; 4 For the 5 year period

TRANSACTION DESCRIPTION

• ROS AGRO is undergoing acquisition of SolPro1 (Solnechnye Products), one of the leading Russian Oil & Fats holdings with leading position in key consumer products (#4 in Mayonnaise2; #3 in consumer margarine2; #2 in industrial fats2; #2 in vegetable oil production3)

• Transaction is expected to be structured as an asset deal on the basis of bankruptcy auction with ROS AGRO acquiring select assets of SolPro with other assets being sold (similar structure was utilized during acquisition of Razgulay assets)

• Currently ROS AGRO assumed RUB 35bn debt (accounts for c. 80% of SolPro external debt) before Russian Agricultural Bank (RAB)

o ROS AGRO owes RUB 35bn to RAB and incurs principal and interest payments

o SolPro owes RUB 35bn to ROS AGRO and incurs principal and interest payments with key SolPro assets serving as a collateral

• Additionally, ROS AGRO acquired an option4 to buy 85% equity in SolPro holding company. Group does not plan to exercise this option as deal is expected to be assets-based

• Currently SolPro plants operate under historical sales agreements expiring in March 2019 and results are not consolidated into ROS AGRO operational and financial results

o SolPro Net Income is used to repay RUB 35bn loan to ROS AGRO. It is recognized as financial income in Group’s financial statements

o After expiration of historical sales agreements, SolPro plants are expected to be selling products through ROS AGRO sales platform with results being recognized in ROS AGRO operational and financial results

ILLUSTRATIVE TRANSACTION STRUCTURE

PR

E-D

EAL

SolPro1

Option for 85% in equityGroup does not plan to exercise this option

as deal is expected to be assets-based

V. BurovROS AGROTRA

NSA

CTI

ON

SolPro1

Russian Agricultural Bank (RAB)

c. RUB 35bn debt c. RUB 8bn debt

100%

V. Burov

Other debt holders

ROS AGRO

SolPro1

SolPro owes RUB 35bn to ROS AGROLiability is secured by key SolPro assets

ROS AGRO owes RUB 35bn to RAB

Russian Agricultural Bank (RAB)

Other debtors

Debt

Equity

15%

c. RUB 8bn debt

31

SOLPRO DEAL HIGHLIGHTS

Source: Russian Oil and Fats Union, Company estimates. Note: 1 Illustrative combination ROS AGRO and SolPro 2018 positions among mayonnaise producers in Russia (8% and 17% production share in 2018 respectively according to Russian Oil and Fats Union); 2Illustrative combination ROS AGRO and SolPro 2017 positions among vegetable oil producers in Russia (4% and 14% production share in 2017 respectively according to Russian Oil and Fats Union); 3 Illustrative combination ROS AGRO and SolPro 2018 positions among consumer margarine producers in Russia (41% and 26% production share in 2018 respectively according to Russian Oil and Fats Union); 4 Illustrative combination ROS AGRO and SolPro 2018 positions among industrial fats producers in Russia (1% and 23% production share in 2018 respectively according to Russian Oil and Fats Union); 5 NMZhK; 6 Solnechnye Producty; 7 Yug Rusi

DEAL RATIONALE

MAYONNAISE CONSUMER MARGARINE

25% 25%20% 20%

17%

8%

67%

41%

27% 26%

24%

18%

14%12%

44%

VEGETABLE OIL

53%

23% 22%

1%

INDUSTRIAL FATS

5 5

7

#2Mayonnaise

INSTANT STRENGTHENING OF ROS AGRO POSITIONS IN PRODUCTION

#1Margarine

#2Vegetable Oil

#2Industrial Fats

6 6

6

6

6

1

2

4

3

32

SOLPRO DEAL HIGHLIGHTSOVERVIEW OF KEY ASSETS

Source: public sources

Note: 1 B2B brand

Description

Location

Product

Capacity p.a.

Personnel

Major SolPro brands

Saratov Oil & Fat plant Atkarsky Oil Extraction plant Moscow Oil & Fat plant Novosibirsk Oil & Fat plant

Founded in 1953 Largest producer of margarine and

industrial fats in Russia #1 as of dish soap production in the

country

Saratov, Russia

Industrial fats Margarine Mayonnaise Dish soap

Margarine: 389 kt Mayonnaise: 47 kt Soap: 31 kt

c. 950 workers

Founded in 1913 One of the largest oil-processing

factories in Volga Region

Aktarsk, Saratov Region

Bottled sunflower oil Bulk sunflower oil Sunflower oil meal

Oilseeds: 548 kt

c. 600 workers

Founded in 1935 Serves as a pilot platform for

innovation in consumer fats segment

Moscow, Russia

Mayonnaise Mustard Sauces

Mayonnaise: 108 kt Mustard: 2 kt

c. 300 workers

Founded in 1918 Largest oil and fat producer in Siberia

Region

Novosibirsk, Russia

Mayonnaise Sauces

Mayonnaise: 26 kt

c. 100 workers

Volzhskiy terminal

Founded in 2013 One of the largest sunflower

processing factories in Russia The largest elevator in Volga Region

Saratov Region

Unrefined worm-press and extraction oil

Granulated oil meal

Oilseeds: 657 kt Unrefined oil: 279 kt

c. 400 workers

1

33

Source: Audited IFRS accounts for FY16-FY18

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(RUB ths) 31-Dec-16 31-Dec-17 31-Dec-18

ASSETS

Current assets

Cash and cash equivalents 6,751 ,712 4,860,335 1,728,396

Restricted cash 39 42 49

Short-term investments 17,230,012 18,457,778 8,551,238

Trade and other receivables 4,607,634 3,196,315 6,226,403

Prepayments 746,886 1,201 ,479 2,194,971

Current income tax receivable 97,461 212,026 533,459

Other taxes receivable 3,663,194 3,352,606 4,420,011

Inventories 29,538,204 25,665,886 49,011,008

Short-term biological assets 4,696,957 4,009,965 4,065,870

Total current assets 67,332,099 60,956,432 76,731,405

Non-current assets

Property, plant and equipment 45,791,288 56,390,084 68,606,452

Inventories intended for construction 38,963 795,314 4,136,855

Goodwill 2,225,304 1,826,258 2,364,942

Advances paid for property, plant and equipment 14,172,240 13,841,743 9,681,448

Long-term biological assets 1,745,467 1,719,784 2,650,201

Long-term investments 17,751 ,740 17,594,030 54,494,252

Investments in associates 110,504 7,320 7,320

Other non-current assets - 215,417

Deferred income tax assets 1,935,298 1,992,839 1,866,593

Other intangible assets 2,139,171 2,286,181 2,202,786

Non-current assets held for sale - 820,950

Total non-current assets 85,909,975 96,453,553 147,047,216

Total assets 153,242,074 157,409,985 223,778,621


LIABILITIES AND EQUIТY

Current liabilities

Short-term borrowings 11,704,276 8,863,525 32,513,595

Trade and other payables 6,988,905 6,773,069 12,190,160

Current income tax payable 99,450 63,729 60,913

Other taxes payable 3,814,278 4,072,364 4,023,943

Total current liabilities 22,606,909 19,772,687 48,788,611

Non-current liabilities

Long-term borrowings 32,798,240 37,787,777 62,587,531

Government grants 3,712,593 6,377,469 7,310,975

Deferred income tax liability 535,514 744,113 359,051

Other non-current liability - - 2,465,813

Total non-current liabilities 37,046,347 44,909,359 72,723,370

Total liabilities 59,653,256 64,682,046 121,511,981

Equity

Share capital 12,269 12,269 12,269

Treasury shares (499,590) (491,978) (490,606)

Share premium 26,964,479 26,964,480 26,964,479

Share-based payment reserve 1,181 ,437 1,308,188 1,326,579

Retained earnings 65,690,082 64,758,966 74,286,089

Equity attributable to owners of Ros Agro 93,348,677 92,551,923 102,098,809

Non-controlling interest 240,141 176,016 167,831

Total equity 93,588,818 92,727,939 102,266,640

Total liabilities and equity 153,242,074 157,409,985 223,778,621

34

Source: Audited IFRS accounts for FY16-FY18

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(RUB ths)Year ended

31-Dec-16Year ended

31-Dec-17Year ended

31-Dec-18

Sales 84,256,585 79,057,860 82,977,711

Net (loss)/gain on revaluation of biological assets and agricultural produce 48,176 (2,976,169) 2,850,788

Cost of sales (58,915,613) (58,115,770) (61,679,842)

Net (loss)/gain from trading derivatives 335,997 (11,115) 8,890

Gross profit 25,725,145 17,954,806 24,157,547

Distribution and selling expenses (7,993,094) (8,360,963) (6,960,090)

General and administrative expenses (5,356,057) (4,878,534) (5,168,528)

Other operating (expenses) / income, net 2,099,192 (665,918) 593,112

Operating profit 14,475,186 4,049,390 12,622,041

Interest expense (3,614,107) (2,259,804) (2,884,418)

Interest income 4,465,667 4,189,550 4,002,952

Net gain/(loss) from bonds held for trading (422) 29,783 (41,940)

Other financial (expenses)/income, net (1,134,849) (38,968) (166,842)

Share of results of associates 20,831 11,060 -

Profit before income tax 14,212,306 5,981,011 13,531,793

Income tax expense (267,790) (417,848) (703,830)

Profit for the year 13,944,516 5,563,163 12,827,963

35

Source: Audited IFRS accounts for FY16-FY18 1 Over consideration paid

CONSOLIDATED STATEMENT OF CASH FLOWS


Cash flows from operating activities

Profit before income tax 14,212,306 5,981,011 13,531,793

Adjustments for:

Depreciation and amortization 5,819,850 7,155,334 7,788,465

Interest expense 4,810,145 3,512,362 4,000,443

Government grants (1,943,206) (1,733,537) (1,915,530)

Interest income (4,465,667) (4,189,550) (4,002,952)

Loss/ (gain) on disposal of property, plant and equipment 31,217 78,849 126,228

Net (gain)/ loss on revaluation of bio. assets and agricultural produce (48,176) 2,976,169 (2,850,788)

Change in provision for net realizable value of inventory 92,961 2,222 63,905

Share of results of associates (20,831) (11,060) -

Change in provision for impairment of receivables and prepayments (28,388) 181,757 61,704

Foreign exchange (gain) / loss, net 1,074,439 (15,949) 63,468

Share based remuneration 4,026 19,761 18,391

Settlement of loans and accounts receivable previously written-off (937,545) (141,339) (139)

Lost / (reversal of) harvest write-off (63,450) 82,119 70,580

Net (gain) / loss from bonds held for trading 14,864 (29,783) 41,934

Change in provision for impairment of other taxes receivables (197,409) - -

Change in provision for impairment of advances paid for PPE (7,405) 6,220 (38,852)

Impairment of goodwill 589,416 399,046 -

Excess of the Group’s share of identifiable net assets acquired1 (905,140) - -

Other provisions (15,454) - -

Loss on sale of associates, net - 58,833 -

Loss on sale of other assets - - 102,997

Realized deferred day-one gain - - (274,111)

Gain from reposition of collateral - - (316,023)

Loss on other investments 7,820 401,453 -

Other non-cash and non-operating expenses, net 41,511 109,201 146,758

Operating cash flow before working capital changes 18,065,884 14,843,119 16,618,271

Change in trade and other receivables and prepayments 371,138 855,801 (4,050,515)

Change in other taxes receivable (1,440,920) 999,150 (1,050,067)

Change in inventories (6,093,853) 1,438,041 (19,788,602)

Change in biological assets 842,463 304,866 (1,069,740)

Change in trade and other payables 1,354,325 (568,000) 2,808,297

Change in other taxes payable (173,631) 223,637 141,469

Income tax paid (1,116,502) (423,213) (1,281,174)

Net cash from operating activities 11,808,904 17,673,401 (7,672,061)


Cash flows from investing activities

Purchases of property, plant and equipment (16,642,716) (16,684,987) (12,895,786)

Purchases of other intangible assets (275,416) (514,318) (351,141)

Proceeds from sales of property, plant and equipment 71,637 29,891 75,168

Purchases of inventories intended for construction (69,787) (848,870) (1,968,594)

Proceeds from cash withdrawals from deposits 22,469,547 34,227,159 20,966,068

Deposits placed with banks (23,934,790) (35,976,815) (6,139,044)

Purchases of associates - (9,168) -

Proceeds from sale of associates - 42,116 -

Investments in subsidiaries, net of cash acquired (7,506,408) 79,426 (534,450)

Purchases of bonds with maturity over three months (2,566,211) - (19,900,000)

Purchases of promissory notes - - (100,000)

Proceeds from sales of bonds with maturity over three months 3,433,426 - -

Proceeds from sales of rights of claim 124,405 - -

Loans given (1,217,297) (7) -

Purchases of loans issued - - (882,492)

Loans repaid 11,261,011 428,559 369,008

Movement in restricted cash 64,117 (846) 658

Interest received 4,585,875 4,336,595 4,524,153

Purchases of other assets (52,532)

Proceeds from sales of other assets 1,325,100

Dividends received 12,198 19,558 -

Net cash used in investing activities (10,190,409) (14,871,707) (15,563,884)

Cash flows from financing activities

Proceeds from borrowings 26,104,909 18,819,053 49,981,866

Repayment of borrowings (33,949,009) (16,860,947) (25,326,315)

Interest paid (3,823,363) (2,865,059) (3,569,972)

Purchases of non-controlling interest (142,850) (81,218) (58,574)

Proceeds from issue of own shares, net of transaction cost 16,328,269 - -

Dividends paid to owners Ros Agro PLC (7,124,250) (6,146,486) (3,485,666)

Proceeds from government grants 3,487,866 2,674,618 2,309,106

Lease payments - (14,919) 11,942

Proceeds from sales of treasury shares 6,373 - -

Other financial activities (4,135) (4,625) 79,377

Net cash (used in)/from financing activities 883,810 (4,479,583) 19,941,764

Net effect of exchange rate changes on cash and cash equivalents (152,296) (213,488) 162,242

Net (decrease)/increase in cash and cash equivalents 2,350,009 (1,891,377) (3,131,939)

Cash and cash equivalents at the beginning of the year 4,401,703 6,751,712 4,860,335

Cash and cash equivalents at the end of the year 6,751,712 4,860,335 1,728,396

Documents

ROS AGRO INVESTOR PRESENTATION · 2019-03-16 · 2 DISCLAIMER IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation