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PRESENTATION OF Q1 2015 RESULTS May 13th 2015

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  • 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 PUAWY 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 PUAWY 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 PUAWY

    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 PUAWY 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 PUAWY

    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

    Lasw

    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 PUAWY GROUP

    24

  • GRUPA AZOTY PUAWY 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 PUAWY

  • GRUPA AZOTY PUAWY 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 PUAWY

  • GRUPA AZOTY PUAWY 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 PUAWY

    * Excluding unallocated items.

  • GRUPA AZOTY PUAWY GROUP: AGRO

    Volumes

    0

    50

    100

    150

    200

    250

    Q1 2014 Q1 2015

    Ammonium nitrate (PULAN)

    UAN conv. to 32% (RSM)

    Urea (PULREA)

    UANS RSMS

    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 PUAWY

    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 PUAWY 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 PUAWY

    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 PUAWY 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 PUAWY

  • 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 PUAWY 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 PUAWY

    -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

    ZAKADY AZOTOWE KDZIERZYN 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%

  • Contact:

    Investor Relations Team

    [email protected]

    53