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
6 Overview of Grupa Azoty
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
7 Overview of Grupa Azoty
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
11 Grupa Azoty – market overview
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%
14 Grupa Azoty – market overview
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
Other Activities 8 12 2 4
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*
27 Grupa Azoty PUŁAWY
* 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
Profitability ratios
EBIT margin (%) 11.3 17.7
EBITDA margin (%) 15.1 21.3
ROCE (%) 4.0 6.0
ROE (%) 3.8 6.0
Liquidity ratios
Current ratio 2.1 2.7
Debt ratios
Total debt ratio (%) 24.0 21.4
Net debt (PLNm) -241 -524
Debt to equity ratio (%) 31.6 27.2
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 %
31 Grupa Azoty PUŁAWY
-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 Group
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 Group
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
Grupa Azoty POLICE Group
Ratios Q1
2014
Q1
2015
Profitability ratios
EBIT margin 3% 9%
EBITDA margin 8% 13%
ROCE 2% 5%
ROE 2% 4%
Liquidity ratios
Current ratio 1.3 1.1
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 POLICE Group
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
Fertilizers 277 313 55 87
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
Profitability ratios
EBIT margin (%) 8.2 13.8
EBITDA margin (%) 12.1 17.2
ROCE (%) 3.9 5.7
ROE (%) 3.6 5.4
Liquidity ratios
Current ratio 1.6 1.8
Debt ratios
Total debt ratio 32.0 31.4
Net debt (PLNm) -19.3 -18.8
Debt to equity ratio (%) 47.0 45.8
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
Fertilizers 238 250 24 39
Plastics 252 237 11 7
Energy 6 6 3 4
Other Activities 8 7 2 3
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%