4Q and FY 2020 Financial Results : Free Cash Flow -2-

Revenue for FY 2020 increased by 2.3% year-on-year to RUB 253.9 billion (USD 3.5 billion). The lower average sales prices for phosphate- and nitrogen-based fertilizers in 2020 were completely offset by a 5.3% increase in sales volumes and the 11.4% depreciation of the rouble against the US dollar.

Gross profit in 4Q 2020 increased by 35.9% year-on-year to RUB 29.3 billion (USD 384 million), with a gross profit margin of 49.7%. Gross profit in the phosphate- and nitrogen-based fertilizer segments saw the following changes: ? Gross profit for phosphate-based fertilizers increased by 35.6% to RUB 23.4 billion (USD 324 million). This

improvement was driven by the recovery in prices for phosphate-based fertilizers in tandem with low feedstock

prices and the depreciation of the rouble; ? Gross profit in the nitrogen-based fertilizer segment increased by 27.9% to RUB 5.6 billion

(USD 77 million).

PhosAgro's EBITDA for 4Q 2020 increased by 64.3% year-on-year and amounted to RUB 18.4 billion (USD 241 million). The main growth drivers were the recovery in global fertilizer prices and the completion of equipment upgrades and operational improvements at production facilities. Additional supporting factors were the weakening of the rouble against the US dollar and low prices for primary feedstocks.

Net profit adjusted for non-cash FX gain and other non-cash items for 4Q 2020 increased by almost three times year-on-year to RUB 7.5 billion (USD 98 million).

Free cash flow in 4Q 2020 was RUB 2.9 billion (USD 37 million), compared with a negative cash flow of RUB 4.3 billion (USD 67 million) in 4Q 2019. This considerable increase was possible because of the Company's high EBITDA margin, sales growth and efficient management of working capital.

Capital expenditure in 4Q 2020 amounted to RUB 13.5 billion (USD 177 million). In annual terms, capital expenditure amounted to RUB 40.9 billion (USD 567 million), which corresponds to 49% of EBITDA for the reporting period. The Company invested primarily in the development of its ore base in Kirovsk, upgrades to its fertilizer production assets and railway infrastructure in Cherepovets, the creation of a flexible ammonium sulphate production line in Balakovo and the construction of new capacities at its production site in Volkhov.

As of the end of the year, the net debt/EBITDA ratio was 1.86x. The increase compared to year-end 2019 was driven by the devaluation of the rouble against the US dollar, since a large part of the Company's loan portfolio is denominated in US dollars. Net debt as of 31 December 2020 amounted to RUB 156.9 billion (USD 2.1 billion).

Cost of Sales 
RUB million or %                  FY      FY      Change, % 4Q     4Q     Change, % 
                                  2020    2019              2020   2019 
D&A                               23,743  21,368  11.1%     5,022  5,242  -4.2% 
Materials and services            40,973  41,221  -0.6%     9,272  9,964  -6.9% 
Phosphate rock transport          8,134   8,641   -5.9%     1,452  1,956  -25.8% 
Repair expenses                   10,134  10,119  0.1%      2,754  2,363  16.5% 
Drilling and blasting             3,168   2,323   36.4%     788    678    16.2% 
Other materials and services      19,537  20,138  -3.0%     4,278  4,967  -13.9% 
Raw materials                     35,514  43,155  -17.7%    7,643  9,450  -19.1% 
Ammonia                           4,802   4,095   17.3%     1,322  1,173  12.7% 
Sulphur and sulph. acid           4,360   9,165   -52.4%    901    1,313  -31.4% 
Potassium                         12,253  13,691  -10.5%    2,442  2,964  -17.6% 
Natural gas                       12,342  12,627  -2.3%     2,467  2,972  -17.0% 
Ammonium sulphate                 1,757   3,577   -50.9%    511    1,028  -50.3% 
Salaries and social contributions 13,807  12,744  8.3%      2,897  3,170  -8.6% 
Electricity                       6,311   6,204   1.7%      1,392  1,439  -3.3% 
Fuel                              3,885   4,849   -19.9%    915    1,119  -18.2% 
Products for resale               9,102   6,683   36.2%     2,472  1,216  103.3% 
Total                             133,335 136,224 -2.1%     29,613 31,600 -6.3% 

Cost of sales decreased in 2020 by 2.1% year-on-year to RUB 133.3 billion (USD 1.8 billion). This decrease on the back of higher sales was the result of improved efficiency stemming from upgrades to production assets, increased self-sufficiency in feedstocks and low prices for raw materials.

Cost of sales in 4Q 2020 decreased by 6.3% year-on-year (in connection with a decrease in fertilizer sales and low prices for raw materials) to RUB 29.6 billion (USD 389 million). ? The cost of materials and services decreased by 6.9% year-on-year to RUB 9.3 billion

(USD 122 million). This decrease was driven by savings in phosphate rock transport, as the Company used a higher

percentage of its own rail cars. ? Raw material costs decreased by 19.1% year-on-year to RUB 7.6 billion (USD 100 million) due to: ? A 31.4% reduction in sulphur and sulphuric acid costs to RUB 901 million (USD 12 million) due to a decrease in

sales of fertilizer brands with high sulphur content, as well as the launch of a new sulphuric acid plant in

Cherepovets in 1Q 2020. ? A 17.6% decrease in potash costs to RUB 2.4 billion (USD 32 million) amid falling global prices. ? A 17.0% drop in natural gas costs to RUB 2.5 billion (USD 32 million) due to lower sales of fertilizer brands with

high nitrogen content (DAP/MAP/urea). ? A 50.3% reduction in the cost of ammonium sulphate to RUB 0.5 billion (USD 7 million) following the full ramp-up of

the Company's own ammonium sulphate plant. ? Ammonia costs rose by 12.7% to RUB 1.3 billion (USD 17 million) due to higher consumption driven by the launch of

the Company's own ammonium sulphate production unit.

Administrative and selling expenses 
RUB million                                   FY     FY     Change, % 4Q     4Q     Change, % 
                                              2020   2019             2020   2019 
Administrative expenses                       17,828 16,476 8.2%      4,887  4,658  4.9% 
Salaries and social contributions             11,249 9,300  21.0%     2,873  2,365  21.5% 
Professional services                         1,929  1,963  -1.7%     644    696    -7.5% 
D&A                                           1,368  1,378  -0.7%     349    342    2.0% 
Other                                         3,282  3,835  -14.4%    1,021  1,255  -18.6% 
Selling and marketing expenses                39,588 38,121 3.8%      10,610 10,324 2.8% 
Freight, port and stevedoring expenses        19,208 18,372 4.6%      5,259  5,458  -3.6% 
Russian Railways' tariffs and operators' fees 11,466 11,441 0.2%      2,725  2,614  4.2% 
Salaries and social contributions             3,484  2,662  30.9%     1,166  708    64.7% 
Material and services                         2,431  2,563  -5.2%     621    692    -10.3% 
Customs duties                                1,484  1,898  -21.8%    447    458    -2.4% 
D&A                                           1,515  1,185  27.8%     392    394    -0.5% 

Administrative expenses increased by 4.9% year-on-year in 4Q 2020 to RUB 4.9 billion (USD 64 million). The main driver was a 21.5% increase in salaries and social security contributions to RUB 2.9 billion (USD 38 million) due to an increase in the number of employees and incentive payments.

In annual terms, administrative expenses increased by 8.2% year-on-year to RUB 17.8 billion (USD 247 million).

In 4Q 2020, selling expenses increased by 2.8% year-on-year to RUB 10.6 billion (USD 139 million). In annual terms, selling expenses increased by 3.8% year-on-year to RUB 39.6 billion (USD 54 million). The main factor behind this growth was an increase in incentive payments as a result of excellent operating performance.

Market outlook

The start of 2021 has shown a noticeable increase in prices for major agricultural crops, which, combined with the growth in seasonal demand in key sales markets (Europe, the US domestic market and China in particular), contributed to a significant increase in demand and prices for all major types of mineral fertilizers and raw materials for production.

The main benchmarks for phosphate-based fertilizers (DAP/MAP) and urea increased by more than USD 100 per tonne throughout January and in early February and continue to rise. Persistent demand in China's domestic market has limited exports from the region.

The Indian market is characterized by low carryover stocks, especially for phosphate-based fertilizers, implying an earlier start to major seasonal purchases. The US domestic market continues to face a shortage of DAP/MAP due to the lack of traditional imports from Morocco and Russia, which, at the height of the main spring demand, is acting as an additional driver pushing up prices to their highest levels in recent years.

Conference call and webcast:

PhosAgro will hold a conference call and webcast today at 14:00 London time (17:00 in Moscow; 09:00 in New York).

The call will be held in English, with simultaneous translation into Russian on a separate line.

Webcast link:

https://www.webcast-eqs.com/register/phosagro20210219/

Participant dial-in numbers:

Russian Federation Toll [phone] Russian Federation Toll-Free 8 800 500 9283 United Kingdom Toll [phone] United Kingdom Toll-Free 0800 358 6377 United States Toll-Free [phone] United States Toll 888-254-3590

Conference ID numbers:

English conference ID: 5592368 Russian conference ID: 2118837

Contacts

PJSC PhosAgro

Andrey Serov, Head of the Investor Relations Department

[phone] ext. 2187

[e-mail]

Timur Belov, Press Officer

[phone] ext. 2652

EM

Sam VanDerlip

[e-mail]

[phone]

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February 19, 2021 04:31 ET (09:31 GMT)