Phosagro S Regulatory News (PHOR)

PJSC PHOSAGRO - PhosAgro CEO Presents Achievements of Past 4 Years

PR Newswire

London, August 23

PhosAgro CEO Presents Achievements of Past 4 Years

Moscow –The Board of Directors of PhosAgro (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers, today heard a report by Andrey Guryev about the results of his four years as Chief Executive Officer of the Company, and received information about the development of the Company’s strategy to 2025, as well as about implementation of the strategy to 2020.

In his report addressed to the Board of Directors on the results of PhosAgro’s performance over the past four years during which he was CEO, Andrey Guryev noted: “The team and I have achieved good results thanks to a comprehensive approach to improving the efficiency of our operations, investment in the modernisation of existing facilities, and the construction of new high-tech production lines. We have strengthened our reputation and confirmed our status as a reliable and profitable company for our shareholders, employees, customers and other stakeholders.

“We intend to continue to strengthen Company's position on domestic and international markets. We have gig plans for PhosAgro’s development. Our role in the global food chain will grow, as we produce a high-quality product that is unique in its purity."

The key investment project under the Company's strategy to 2020 is the construction of a high-tech ammonia production facility with a capacity of 760 ths tonnes/year that will be commissioned this year. This new production line is an integral part of the Russian Federation’s Strategy for the Development of the Chemical and Petrochemical Industry through 2030. PhosAgro-Cherepovets will also commission a new 500 ths tonne/year urea shop. Completion of these two large-scale projects may enable PhosAgro to increase its production capacity from 2016 levels by nearly 24%, to 9.2 mln tonnes, by 2020.

Other facilities that were constructed and commissioned in the last four years include:

· Aluminium fluoride facility, the production capacity of which increased from 23 ths tonnes/year to 43 ths tonnes/year at PhosAgro’s Cherepovets production site;

· Complex PKS fertilizers line with a capacity of up to 100 ths tonnes/year at the Company’s Volkhov production site;

· Liquid ammonia storage facility with a capacity of 8 ths tonnes at the Balakovo production site;

· The second Yuksporsky tunnel, main shaft No. 2 and expansion of the ANOF-3 beneficiation plant from 6.5 mln tonnes to 7.7 mln tonnes at Apatit, with the mid-term possibility of increasing capacity to 9 mln tonnes;

· The brand new Smart Bulk Terminal at the Ust-Luga port, which has helped PhosAgro achieve sustainable cost savings on export sales compared to third-party terminals.

Investments into efficiency and modernisation of production lines have enabled the Company to increase fertilizer output by about 5-10% per year. The Company expects fertilizer production to have increased by 40% by the end of 2017, from 5.9 million tonnes in 2013 to 8.3 mln tonnes this year. Phosphate rock production is expected to have increased by 22%, from 7.7 mln tonnes in 2014 to 9.4 mln tonnes for 2017.

The number of fertilizer grades that PhosAgro produces has increased from 19 to 35 and, and by 2020, this number is expected to grow to 40-50. The greatest demand is expected to be for NPK / NPS fertilizers, which will account for up to 37% of total consumption, while demand for DAP and MAP will account for around 36%.

The company remains the leading fertilizer supplier for its priority domestic market. In the past four years, PhosAgro has nearly doubled domestic fertilizer and feed phosphates sales, reaching 2.1 million tonnes in 2016. The Company’s sales network is active in 60 regions of Russia.

Supported in a large part by state policy and support of Russian farmers by the Russian Fertilizer Producers Association, which Andrey Guryev has headed since 2016, domestic agricultural producers were able to significantly increase fertilizer purchases and make Russia the world’s top wheat exporter last year.

Trading companies established by PhosAgro in Brazil, Switzerland, Germany, Poland, France and Singapore have given the Company a presence in all of its priority export markets, enabling it to respond quickly to changes in demand and customer needs. PhosAgro now sells 80% of its fertilizers directly to customers, without intermediaries.

PhosAgro has kept the promises it made to investors during the IPO and SPO, and has paid dividends representing from 39% to 50% of net income. Thanks to the company’s robust cash flows and ability to maintain a solid balance sheet throughout a major investment cycle, the Company has provided investors with dividend income of USD 3.1 per share since 2013. Total dividends paid out during the period amounted to around USD 1.2 billion, and the average daily trading volume of PhosAgro GDRs on the London Stock Exchange has increased from USD 2 million in 2013 to USD 7 million in 2017.

Despite the fact that the average price for DAP (FOB Tampa) has decreased since 2013 from USD 446 per tonne to USD 346 per tonne in 2016, the Company has successfully overcome these difficulties, and its EBITDA margin for the same period has grown from 23% in 2013 to 39% for 2016. The Company’s EBITDA has increased from RUB 23.9 billion in 2013 to RUB 72.4 billion last year. Moreover, the production capacity increases achieved to date bring an additional USD 180 million in EBITDA every year.

The Company’s energy efficiency programme deserves special attention. PhosAgro has reduced its per-unit energy costs by 40% over the last four years. After commissioning its own generating capacities, combined with newly-built mineral fertilizer production units, a number of PhosAgro’s enterprises can almost fully meet their own electricity needs.

Along with effective economic activity in regions where it is present, PhosAgro has a corporate housing programme, and participates in a number of major social programmes in the fields of education, health, youth policy and support of sports. Annual outgoings on charitable and social projects total more than RUB 2.5 billion. PhosAgro is one of the biggest taxpayers in the regions where it is active, with consolidated tax payments increasing by 1.5 times in the last year alone to RUB 18 billion. The company is the leading taxpayer in the Murmansk and Vologda regions.

In all cities where the company is active, it supports educational programmes as part of Educated and Healthy Children of Russia programme (“DROZD”). DROZD aims to address issues identified by the presidential programme for the development of physical education and sports to raise a healthy younger generation, developing children’s sports, and healthy lifestyles for a harmonious upbringing.

The company is engaged in the training of highly-qualified engineering personnel, with an educational process that follows the ‘school-technical college-university’ progression. Practically all graduates from PhosAgro classes continue their education in the country’s best technological universities and colleges, and then go on to work at PhosAgro or at other high-tech enterprises in Russia.

With the aim of developing tourism and creating a basis for forming new areas of economic growth, PhosAgro has partnered with the government of the Murmansk region and the mayor’s office in Kirovsk to build the Bolshoi Vudyavr ski resort, which has become the flagship project of the region’s tourism cluster. Between 2013 and 2016, investment in major projects in the tourism, skiing and recreation spheres amounted to RUB 3.2 billion. As a result, aggregate tourism traffic has increased by more than 300% over a five-year period.

With the direct involvement of Andrey Guryev, the PhosAgro has been in partnership with UNESCO since 2013, supporting talented young scientists who are engaged in research in the field of green chemistry, protecting the environment and human health. This programme is unique because it is the first time in the long history of UNESCO and the entire UN that such an initiative is being implemented on an extra-budgetary basis with financing from a Russian business.

For many years, the company has acted as a strategic sponsor for chess and, in particular, the Russian Chess Federation, at which Andrey Guryev is a member of the Board of Trustees. PhosAgro was the official sponsor of the World Chess Championship held in Sochi in 2014 and in New York in 2016, where Sergey Karyakin from Russia faced the reigning champion, Magnus Carlsen from Norway.

Over the last four years, PhosAgro’s GDRs have been included in MSCI Russia and other indexes, and the Company became the only Russian winner of grand prix at the Russian Business Leaders: Dynamics and Responsibility competition.

The members of the PhosAgro Board of Directors gave positive marks to Andrey Guryev’s performance as the CEO of PhosAgro during the past four years noting that his appointment opened a new chapter in the Company’s history, and that implementation of the strategy to 2020 under his management has enabled PhosAgro to significantly increase its competitive advantages and strengthen its position on the global fertilizer market. The Directors expressed their confidence that the legacy of the strategy to 2020 will be continued in the strategy to 2025, which will bring about further development PhosAgro’s production assets and even greater efficiency improvements.

For further information please contact:PJSC PhosAgroAlexander Seleznev, Head of Investor Relationsir@phosagro.ru+7 495 232 96 89 ex 21 87Timur Belov, Press OfficerAnastacia Basos, Deputy Press Secretary+7 495 232 9689EMSam VanDerlipvanderlip@em-comms.com+44 7554 993 032+7 499 918 3134Notes to Editors

PhosAgro is one of the leading global vertically integrated phosphate-based fertilizer producers. The Company focuses on the production of phosphate-based fertilizers, feed phosphate and high-grade phosphate rock (P2O5 content of not less than 39%), as well as ammonia and nitrogen-based fertilizers.

The Company is the largest phosphate-based fertilizer producer in Europe, the largest producer of high-grade phosphate rock worldwide and the third largest MAP/DAP producer in the world (excluding China), according to Fertecon. PhosAgro is also one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia.

PhosAgro has 2.1 billion tonnes of resources (according to JORC) of high quality apatite-nepheline ore. The Company's mines and phosphate rock production facilities are located in the mountainous areas of the Kola Peninsula in the Murmansk region of northwest Russia, whereas its fertilizer and feed phosphate production assets are located near the city of Cherepovets in the Vologda region and near the city of Balakovo in the Saratov region of southwest part of European Russia.

PhosAgro’s 2016 IFRS revenue was over USD 2.8 bln and EBITDA was USD 1.08 bln.

For further information on PhosAgro please visit: www.PhosAgro.com