"Сибур": финансовые результаты за 9 месяцев 2021 года by Ivan Ivanov

9M 2021 Operational and Financial Results

28 October 2021

DISCLAIMER

The information contained herein pertaining to SIBUR (the "Company") has been provided by the Company solely for use at this presentation. By attending this presentation, or by reading these presentation slides, you agree to be bound by the limitations set out below. This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of, or be relied on in connection with, any contract or investment decision relating thereto. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. The Company accepts no responsibility for any losses howsoever arising, directly or indirectly, from this presentation or its contents. The material contained in this presentation is presented solely for information purposes and is not to be construed as providing investment advice. As such, it has no regard to the specific investment objectives, financial situation or particular needs of any recipient. There may be material variances between estimated data set forth in this presentation and actual results, and between the data set forth in this presentation and corresponding data previously published by or on behalf of the Company. This presentation contains forward-looking statements, including (without limitation) statements containing the words "anticipates," "expects," "intends," "may," "plans," “forecasts,” "projects," "will," "would", "targets,“ “believes” and similar words. These statements are based on the current expectations and projections of the Company about future events and are subject to change without notice. All statements, other than statements of historical fact, contained herein are forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties, such that future events and actual results may differ materially from those set forth in, contemplated by or underlying such forward-looking statements. The Company may not actually achieve or realize its plans, intentions or expectations. There can be no assurance that the Company's actual results will not differ materially from the expectations set forth in such forward-looking statements. Factors that could cause actual results to differ from such expectations include, but are not limited to, the state of the global economy, the ability of the petrochemical sector to maintain levels of growth and development, risks related to petrochemical prices and regional political and security concerns. The above is not an exhaustive list of the factors that could cause actual results to differ materially from the expectations set forth in such forward-looking statements. The Company and its Affiliates are under no obligation to update the information, opinions or forward-looking statements in this presentation.

KEY HIGHLIGHTS KEY DEVELOPMENTS

FINANCIALS 3Q Revenue at RUB 223 bln (up 11% qoq) / $3.0 bln (up 12% qoq / up 67% yoy) 3Q EBITDA at RUB 107 bln (up 11% qoq) / $1.5 bln (up 12% qoq / up 123% yoy)

KEY RESULTS RUB bln

Revenue

33%

INVESTMENTS SIBUR and KazMunayGaz signed an agreement to establish two JVs for the production of 1,250 ths tonnes of PE and 500 ths tonnes of PP. The Company’s share in both JVs is expected to be 40% (Oct’21)

1.1x

122 9M20

Revenue



 

(1)

SIBUR and TAIF signed a merger agreement by which the Company acquired 100 % of TAIF in exchange for additionally issued shares of SIBUR representing 15% of the combined company plus cash and debt together valued at USD 3.0 billion as of the closing date (Oct’21) SIBUR and RusHydro signed a 20-year contract for annual supply of 1.3 bln kWh of renewable energy for the Amur GCC (Sep’21) SIBUR and Rostech’s subsidiary signed an agreement on the development of environmental monitoring systems aimed at control and reduction of pollutant emissions from the Company’s production sites (Sep’21) In September, SIBUR distributed its shares of NIPIGAS to its shareholders as a dividend. As of 30 Sep’21, NIPIGAS ceased to be a subsidiary or an associated company within the SIBUR Group

Including contractors

9M20

277

2.2x

9M21

31 Dec'20

EBITDA and EBITDA margin (%) 48%

11%

CORPORATE



9M21

2.3x

127%

598

2Q21

30 Sep'21

48%

223 3Q21

1.1x

Net Operating CF

11%

201

in RUB

46%

369



Net Debt / EBITDA in USD

62%

9M21 Revenue at RUB 598 bln (up 62% yoy) / $8.1 bln (up 55% yoy) 9M21 EBITDA at RUB 277 bln (up 127% yoy) / $3.7 bln (up 117% yoy)

EBITDA and EBITDA margin (%)

48%

107

109

2Q21

3Q21

2Q21

3Q21

9M21 KEY OPERATIONAL RESULTS +12% yoy 4,202 ths tn Petrochemical products sales volumes

-17% yoy

Midstream products sales volumes

+5% yoy

6,055 ths tn

Raw NGL fractionation

2,822 ths tn

0.26 LTIF(1) 3

SIBUR & TAIF TRANSACTION OVERVIEW KEY TERMS

KEY RATIONALE & ASSETS OVERVIEW

Announced in April

50%+1 Share 15% stake in the combined company



 Closed in October

50%-1 Share $3.0 bln local USD bonds and cash consideration

 

Complementary product portfolios and expertise – TAIF: Elastomers, Polystyrene and Polycarbonates – SIBUR: Base polymers, TPE and PET TAIF’s portfolio of growth projects to benefit from SIBUR’s project execution expertise and strong joint balance sheet Optimization of feedstock flows, distribution and logistics One-step integration accelerates synergies roll-out and ESG action plan



Nizhnekamskneftekhim is a global leader in isoprene rubbers segment and is the world’s third largest supplier of butyl rubber



Kazanorgsintez is the only domestic producer of EVA, polycarbonate and bisphenol A, and is among Russia's largest HDPE and LDPE producers



TGK-16 is a major provider of heat and electricity for TAIF petrochemical assets with a generating capacity of 1,7 Gw of electricity and 6 136 gcal/h of heat

NEW SHAREHOLDING STRUCTURE Sinopec 8.5% SOGAZ JSC 10.6% Current/former managers 12.3%

The Silk Road Fund 8.5% Leonid Mikhelson 30.6% Former TAIF shareholders 15.0% Gennady Timchenko 14.5%

COVID-19 RESPONSE FOCUS ON GROWING VACCINATION RATE

₽0.3 bln

>16 500

COVID-19 prevention costs in 9M’21

production shutdowns

employees vaccinated

84%

>200 000

share of vaccinated and recently recovered employees

COVID-19 tests performed

CONSISTENTLY INDUSTRY-LEADING MARGINS EBITDA MARGIN, % Sustainable 30+% EBITDA margin throughout various phases of chemical, energy and economic cycles 40%

46%

40% 38%

30%

34% 30%

30%

28%

20%

23% 22%

20%

15% 14% 10%

10%

2016

2017

2018

2019

2020

Source: Bloomberg, Capital IQ, Companies data (1) 9M 2021 data is a mix of company-reported results and analysts estimates (some companies are yet to report 9M21 results), Petronas Chemicals data is a full 2021 estimate

9M21

(1)

MACRO ENVIRONMENT Average Oil Price (Brent)(1)

Russian GDP(2)

CPI & PPI(3)

71% 68.8

73.5

3Q20

2Q21

3Q21

8,6%

5,1%

43.0

2Q21

3Q21

3Q20

Average Exchange Rate(4) $/₽ 73.6

74.2

(1%)

2Q21

(1) (2) (3) (4)

Source: Source: Source: Source:

2Q21

73.5

3Q21

CPI

EOP Exchange Rate(4)

79.7 72.4 72.8

3Q20

3Q21

30 Sep’21 30 Jun’21 30 Sep’20

6,0%

$/₽

Bloomberg Russian Federal State Statistics Service and Sberbank’s forecast for 3Q21 Russian Federal State Statistics Service Bank of Russia

8,2% 3,1%

0,6% 2,0% 1,1%

-9,6%

3Q20

30 Sep’21 / 30 Jun’21 30 Jun’21 / 31 Mar’20 30 Sep’20 / 30 Jun’20

PPI

Tariff Indexation

Description

Effective Date

Indexation Rate

Regulated natural gas price

Aug 2020 Jul 2021

3.0% 3.0%

Railway transportation tariff

Jan 2021

3.7%

93.0 86.2 84.9

€/₽

MARKET ENVIRONMENT – MIDSTREAM Oil and FX USD/RUB

Brent

100 80

3Q21 vs. 2Q21

(1%)

40 20 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

Comments  The average price of Brent oil during 3Q21 climbed to $ 73.5 / bbl. 7% higher than in 2Q21, mainly due to problems with supply in the US caused by hurricane Ida which impacted oil production in the Gulf of Mexico with total loss of crude oil production in the range of 30-40 million barrels duding the quarter  Oil demand continued to exceed its supply during 3Q21 as a result of the OPEC+ agreement to limit incremental production and weak non-OPEC supply growth  During 3Q21 the average USD/RUB exchange rate was 1% lower than in the same reporting period of 2020

$/t

Naphtha LPG DAF Brest

LPG CIF ARA Natural gas (RHS)

1 000 900 800 700 600 500 400 300 200 100 0

$/000 m3 3Q21 vs. 2Q21

100 90 80 70 60 50 40 30

31% 41%

12%

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

$/bbl $/₽

Midstream

Comments  International prices for LPG and naphtha followed oil prices and were significantly higher compared to the average in 2Q21  Spike in natural gas prices during 3Q21 caused by increasing demand, lagging supply and historically low inventories lifted LPG prices while elevated demand for motor fuels, including motor gasoline resulted in the naphtha price increase  Naphtha was a preferred feedstock in 3Q21 due to the upward pricing dynamics in LPG backed by elevated natural gas prices in the period  Nearly 10% of LPG production in Sep’21 was lost in US due to temporary shutdowns caused by hurricane Ida

Source: IHS, Argus, FAS, Bloomberg

MARKET ENVIRONMENT – PETROCHEMICALS Asia

Europe

1400

3Q21 vs. $/t 2Q21 1600

1000

800

600

400

(18%) 400

200

1200

(24%) 1400 1200

Asia

Europe

Key PE&I Spreads(1) to Naphtha

(2)

3Q21 vs. 2Q21

(17%)

$/t

PET-naphtha in Asia Butadiene-naphtha in Europe MEG-naphtha in Europe

3Q21 vs. 2Q21 95%

900 700 500

(15%)

300 (11%) Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

$/t 1600

Polyethylene(3) Spread(1) to Naphtha (O&P)

(2)

(20%)

100 -100

Polypropylene Spread(1) to Naphtha (O&P)

Global picture: In 3Q21 prices continued to normalize as supply and demand returning to pre-pandemic levels but limited due to the supply restrictions caused by “Dual Control Policy” in China and several unplanned outages in the US

O&P Comments

PE&I Comments

 Asia: Dual control policy” aiming to control energy consumption led to decrease in the production of petrochemical products in Sep’21 supporting PE and PP spreads in 3Q21

 PET (Asia): capacity additions in China put pressure on spreads partially offset by economic recovery and higher feedstock prices

 Europe: PE and PP spreads starting to normalize from peak levels in 2Q caused by unplanned shutdowns and market imbalances triggered by winter storm in US earlier this year  Russia: PE and PP spreads have reversed in synch with EU and Asian benchmarks

 MEG (EU): spread continued its decline amid rising feedstock price and anticipated capacity additions in Asia (Zhejiang PC is planning to launch 740 ktpa MEG capacity in Oct’21)  Elastomers (EU): butadiene spread surged higher in 3Q’21 on the back of restocking activity in EU and turnaround season lasting until August coupled with record demand from US importers whose domestic market was severely affected by the winter storm Uri

Source: IHS (1) The “spread” refers to the difference between product price and naphtha per ton in USD terms, and thus illustratively shows the profitability margin of the petchem product No conversion rate is applied in the calculation (2) Spot prices (3) Average of HDPE and LDPE

9M 2021 FINANCIAL SUMMARY(1) Russian Rubles, bln

Revenue

EBITDA and margin

51%

120%

9M19

32%

9M21

USD Equivalents, bln (illustrative)

Revenue

122

9M19

9M20

9M21

9M19

117%

9M21

9M19

9M20

9M21

CapEx(2)

1.1x

31 Dec'20

30 Sep'21

Net Leverage(3)

106%

46%

1.9

9M21

145%

5.2

9M20

Net Operating Cash Flow

93%

32%

2.3x

114

277

EBITDA and margin

55% 8.1

9M19

33%

126

33% 6.1

116% 247

127% 46%

(18%)

369

9M20

Net Leverage

179%

62% 598 395

CapEx(2)

Net Operating Cash Flow

33%

1.7 9M20

3.7 9M21

1.4

1.6

9M19

9M20

(1) Values in USD estimated based on average $/₽ rate of 65.1, 70.8 and 74.0 in 9M19, 9M20 and 9M21, respectively (2) Includes purchase of PPE, intangible assets and other non-current assets (3) Net Debt for the purpose of Net Leverage calculation is converted in USD with respective end-of-period $/₽ exchange rates

9M21

2.2x

(22%)

3.3

1.1x

1.1

0.9

9M20

9M21

31 Dec'20

30 Sep'21

3Q 2021 FINANCIAL SUMMARY(1) Average Oil Price

Revenue

5 108

5 398

3 163

3Q20

2Q21

3Q21

Average LPG Price(2) $/t

508

Russian Rubles, bln

RUB / bbl

665

67%

36% 11% 223

201

Net OCF(4)

EBITDA 48%

48%

11% 107

134

2Q21

3Q21

3Q20

48% 109 54

3Q20

101%

123%

2Q21

3Q21

3Q20

2Q21

3Q21

320

Revenue 2Q21

3Q21

Petchem index (IPEX)(3) Rebased to 100% in 1Q18

107%

110% 90% 70% 50% 30%

67% USD Equivalents, mln (illustrative)

3Q20

123%

12% 2 706

Net OCF(4)

EBITDA

101% 12%

3 040 1 300

1 822

50% 1 459

655

3Q20

2Q21

3Q21

3Q20

1 479 736

2Q21

3Q21

3Q20

986

2Q21

3Q21

World

(1) (2) (3) (4)

Values in USD estimated based on average $/₽ rate of 73.5, 74.2, 73.6 in 3Q21, 2Q21 and 3Q20, respectively LPG CIF ARA. Source: Argus ICIS composite index, comprising 12 chemical products Net Operating Cash Flow, including WC changes and income tax paid

EBITDA DYNAMICS EBITDA bridge

9M21 EBITDA up by 127% driven by:

RUB’bln

higher average PP and PE benchmark prices by 63% and 71% respectively

+127% 277

(13)

higher PE&I segment's products benchmark prices (MEG +47%, Butadiene +145%)

152 122

higher PP and PE sales volumes 9M20

Margin

Volume

Other

9M21

higher TPE sales volumes due to the new capacity production start

EBITDA by quarter(1) RUB’bln

EBITDA margin

31%

32%

36%

37%

42%

48%

higher operating rate at ZapSib lower EBITDA of NIPIGAZ

+11%

+31% +32%

(3%) 37

1Q20

2Q20

+29%

+19% 48

3Q20

4Q20

107

2Q21

3Q21

1Q21

(1) Sum of EBITDA by quarters might not add up precisely to the total figure due to rounding

partial unwind of cost-cutting programs introduced in 2020

9M21 ADJUSTED EBITDA DYNAMICS ADJUSTED EBITDA DYNAMICS(1) %

SEGMENTS

9M20

EBITDA margin

Consolidated

RUB 128.4 bln EBITDA RUB 122.0 bln

PE&I

9M20 9M21

Midstream

9M20 9M21

Unallocated

9M20 9M21

6,8 (12.2)

Adjustments(1)

9M20 9M21

6,4 17,4

57,8

MidS

(19,0)

Unallocated

11,0

Adjustments

EBIT DA 1H21

9M20 9M21

33,0

PE&I

RUB 294.5 bln(2)

O&P

83,3

O&P

129% (RUB bln)

EBITDA by Segment (RUB bln)

33%

EBIT DA 1H20

Consolidated EBITDA RUB 277.2 bln(2)

EBITDA margin

56.0 139.4

38% 45% 11% 27%

10.0 43.0 49.2 107.0

33% 43%

46%

9M21 (1) Adjusted for SIBUR’s portion of EBITDA of JVs and associates less NCI share of subsidiaries’ EBITDA (2) Sum of EBITDA by segment might not add up precisely to the total figure due to rounding

CASH FLOWS HIGHLIGHTS FY 2017 CashFlow FlowReconciliation Reconciliation 9M21 Cash

FY 2017 CashFlow FlowReconciliation Reconciliation 3Q21 Cash

Net CF: 26.4

RUB bln

7.4

Net CF: (0.1)

RUB bln

(40.9)

(65.6) 19.0

(4.8)

(9.8) 16.6

280.1

(17.5)

(143.7)

28.6

(18.0)

(2.5) (114.4)

109.6 (15.3)

26.9 Cash as of 31.12.2020

OCF

WC change

Income tax paid

CapEX

(1)

Proceeds Net Interest from repayment Paid disposal of of debt subsidiaries

Dividends paid

Other

53.3

53.4

Cash as of 30.09.2021

Cash as of 30.06.2021

53.3

(2.4)

OCF

WC change

Income tax paid

(1)

CapEX

Net proceeds from debt

Interest paid

Dividends paid

Other

Cash as of 30.09.2021

Key Factors Affecting Cash Flows

     

The increase in OCF was in line with our EBITDA growth Working capital changes in 9M21 were primarily attributable to NIPIGAS operations (deconsolidated as of 30 September 2021), partially offset by higher work in progress balance Tax payments in 9M21 were in line with high operating income generated by the company

Net repayment of debt was mainly driven by early settlement of debt related to ECA financing and repayment of Russian ruble bonds Proceeds from disposals of subsidiaries relates to the sale of 40% stake in the Amur GCC project to Sinopec in Dec’20 (settled in Jan’21) The Group paid dividends for the second half of 2020 and dividends of 100% of the adjusted net income for the first half of 2021

(1) Includes purchase of property, plant and equipment, intangible assets and other non-current assets

DEBT PROFILE Key Figures

Overview

31 December 30 Sep’21 vs. 2020 30 Jun’21

30 Sep’21 vs. 31 Dec’20

30 Sep 2021

30 June 2021

413.1

388.1

430.1

(4%)

10.5

14.3

16.9

(26%)

(37%)

Cash & cash equivalents

53.3

53.4

26.9

98%

Net debt

359.8

334.7

403.2

(11%)

4.8

5.3

5.6

335.4

340.0

361.3

(1%)

(7%)

34.6

43.9

67.0

(21%)

(48%)

RUB bln, except as stated Total debt Lease liabilities

WA loan tenor (years) Available credit lines, incl. Committed



 

early repayment of debt related to ECA financing appreciation of the Russian ruble against the US dollar and the euro

o lower lease liability balance driven by NIPIGAZ disposal These factors were partially offset by drawdowns under the bilateral facilities Net debt decreased by 11% as compared to 31 Dec’20 following the decrease in total debt and cash accumulation due to higher operating profits Average tenor decreased to 4.8 years Net leverage decreased to 1.1x (as of 30 Sep’21) in both RUB and USD terms as a result of lower debt and higher EBITDA Loan portfolio structure as of 30 Sep’21

30 June 2021

31 December 2020

Debt / EBITDA

1.2x

1.4x

2.4x

Debt / EBITDA (in $)

1.3x

1.4x

2.3x

Net debt / EBITDA

1.1x

1.2x

2.3x

Net debt / EBITDA (in $)

1.1x

1.2x

2.2x

(1) (2)

Total debt decreased due to:

o o



Leverage Ratios 30 September 2021



LTM EBITDA totaled RUB 334.3, 275.3 and 179.2 bln as of 30 Sep’21, 30 Jun’21 and 31 Dec’20 respectively LTM EBITDA totaled USD 4.4, 3.7 and 2.5 bln as of 30 Sep’21, 30 Jun’21 and 31 Dec’20 respectively

$/€/₽

73%

Long-term/Short-term Fixed/Floating Unsecured

10%

91% 36%

17%

64% 100%

LIQUIDITY AND DEBT MATURITY PROFILE(1) As of 30 September 2021, ₽ bln

uncommitted credit lines

301

215

committed credit lines

cash & cash equiv.

Luquidity

2021

Loans

2022

2023 Eurobonds

2024

78 56

2025 RUB bonds

2026

2027

2028

2029

ECA

(1) Items denominated in $ and € are converted into ₽ at ₽/$ and ₽/€ FX rates as of 30 September 2021 (2) Illustrative nominal value of USD-nominated bonds registered on 04.10.2021 on the Moscow Stock Exchange at the exchange rate as of 04 October 2021

NWF

After 2029 (2)

TAIF acquisition bonds

APPENDIX

O&P (OLEFINS & POLYOLEFINS) SEGMENT HIGHLIGHTS Segment Financial Performance RUB bln

45%

36%

264 139

129 78

35 9M19 $539 mln

External Revenue EBITDA EBITDA margin, %

38%

9М20

9M21/9M20 dynamics Revenue: +104% EBITDA: +149%

9М21

$792 mln

$1 883 mln

Key Factors



 

Segment revenue increased on positive pricing dynamics in international benchmarks across all product groups due to market imbalances prevailed in 1H’21 and higher demand following ease of mobility restrictions An additional factor of revenue growth was higher PP and PE sales volumes backed by higher ZapSib production rate Segment EBITDA increased mainly due to growth in sales volumes and positive pricing dynamics

EBITDA ($): +138%

Revenue(1) Structure

Quarterly EBITDA dynamics(2) RUB bln

Ethylene Other BOPP-film

38% 35% 37% 34%

8 31

44% 42% 43% 39%

49%

43%

27% 52

% 48

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 (1) Represents external revenue (2) Sum of EBITDA by quarters might not add up precisely to the total figure due to rounding

PE&I (PLASTICS, ELASTOMERS & INTERMEDIATES) SEGMENT HIGHLIGHTS Segment Financial Performance RUB bln

27%

External Revenue EBITDA EBITDA margin, %

148 117

11% 16

 

14%

Key Factors

43 10

9М19

9M20

$250 mln

$141 mln

9M21 $580 mln

9M21/9M20 dynamics Revenue: +74% EBITDA: +330%

External revenue increased mainly due to favorable pricing dynamics across all product groups and global demand recovery compared to the first nine months of 2020 EBITDA increased more than fourfold due to higher product margins resulting from the positive dynamics in international benchmarks

EBITDA ($): +311%

Revenue(1) Structure MTBE and fuel additives Other sales Intermediates 7 and other 24 chemicals Plastics & % 42 organic Elastomers synthesis products 27 (1) Represents external revenue (2) Sum of EBITDA by quarters might not add up precisely to the total figure due to rounding

Quarterly EBITDA dynamics(2) RUB bln

26%

31% 24%

22% 14%

12%

16%

14% 9%

12% 7%

17 12

8 5 3 2 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 6

MIDSTREAM SEGMENT HIGHLIGHTS Segment Financial Performance RUB bln 40%

43%

External Revenue EBITDA EBITDA margin, %

33%

163

148 112

Key Factors

  

107

9M21/9M20 dynamics Revenue: +32% EBITDA: +118%

9М19

9M20

9M21

$695 mln

$1 446 mln

$1 171 mln

Segment’s revenue increased mainly due to higher selling prices for LPG and naphtha, in line with oil price growth This factor was partly offset by lower external sales volumes on higher inter-segment LPG transfer for ZapSib production EBITDA increased primarily due to widening spreads between purchased hydrocarbon feedstock and NGLs selling prices

EBITDA ($): +108%

Quarterly EBITDA dynamics(2)

Revenue(1) Structure RUB bln

Naphtha

Other sales

42% 42%

35% 37%

38%

34% 35%

39%

42%

47%

23% Natural gas

% 24

29 LPG

(1) Represents external revenue (2) Sum of EBITDA by quarters might not add up precisely to the total figure due to rounding

8 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 20

OPERATING EXPENSES STRUCTURE AND DYNAMICS OpEx(1) RUB bln 80%

62%

Key Factors

 Feedstock & materials increased as a result of: o higher NGLs purchase costs mainly driven by higher

24%

 Staff costs increased following the headcount growth at NIPIGAS

 Higher energy and utilities expenses due to ZapSib

netbacks for naphtha and LPG 3% indexation of regulated natural gas prices

production ramp up

 Other expenses decrease was mainly driven by

 Transportation & logistics costs decreased slightly due

a reversal to our operating expenses attributable to higher inventories following ZapSib launch and some logistics constraints caused by COVID-19

to:

295.8

9M20

o o

367.3

9M21



lower sales volumes of LPG (used internally at ZapSib) partially compensated by higher polyolefins sales volumes and railway tariffs‘ indexation Depreciation & amortisation costs slightly down

- % of revenue

Feedstock & Materials 21%

25%

Transport & Logistics 15%

Depreciation 13%

Staff Costs 9%

Energy & Utilities 8%

Other 14%

95%

(3%)

26%

(16%)

149.1 76.3 9M20

9M21

55.5

53.9

47.9

46.5

34.8

43.8

28.6

29.9

52.8

44.3

9M20

9M21

9M20

9M21

9M20

9M21

9M20

9M21

9M20

9M21

(1) Sum of the parts might not add up precisely to the total figure due to rounding