Company Presentation. February 2015

Transcription

1 Company Presentation February 2015

2 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. 2

3 AGENDA 1. Business Overview 2. Investment Highlights 3. Strategy 4. 9M 2014 Operational and Financial Results 5. Appendices 3

4 SIBUR AT A GLANCE Revenue, USD bln (2) Financial Performance (1) Unique integrated gas processing & petrochemicals company Key Facts 26 production sites in Russia Petchem EBITDA, USD bln SIBUR Revenue Breakdown (9M 2014) By Product Other % 6.2 Energy products By Region Other CIS Asia Europe 38 % M 2014 EBITDA margin 20% 31% 35% 30% Net debt/ EBITDA (2) 1.6x 0.7x 0.8x 1.0x 29% 1.2x 32% (3) 1.4x Russia Leader in both gas processing and petrochemicals industries in Russia Diverse range of products sold to multiple geographies and customers Prudent and disciplined financial policy, sustained in the market downturn One of the highest rated private companies in the region Controlling shareholder with established track record in international capital markets Over 25,000 employees Russia s largest APG processor with a 54% (4) share of total processed volumes Russia s largest LPG producer with a 36% (4) share of total country s production Share of Russia s synthetic rubbers production: BR 27%, SBR 50%, SBS 100% (4) 56% (4),(5) of polypropylene and 35% (4) of Russia s total LDPE production Currently rated Ba1/Moody s and BB+/Fitch (affirmed in February 2015) with no history of downgrades throughout 2008/09 crisis Notes: (1) All financial figures for SIBUR in this presentation for the years of are based on combined financial information, which excludes the results of the mineral fertilisers and tyres businesses, which were divested by SIBUR in December (2) SIBUR s reporting currency is Russian rouble. Figures have been translated from RR to USD at average FX rates for the respective periods. (3) Estimated EBITDA margin excluding naphtha trading via Ust-Luga transshipment facility. (4) CDU TEK, IISRP, IHS for FY (5) Including 100% of NPP Neftekhimia production. 4

5 SIBUR OPERATES A UNIQUE VALUE CHAIN Integrated Value Chain from Feedstock Sourcing to the Production of Petrochemicals Oil-based feedstock (APG) Gas-based feedstock (NGLs) FEEDSTOCK AND ENERGY Gas processing / Fractionation PETROCHEMICALS Intermediates Basic polymers Synthetic rubbers Plastics & organic synthesis products Oil-based feedstock (APG (1) ) By-product of oil production Sourced from oil companies Transported via pipelines Gas-based feedstock (NGLs (2) ) Sourced from gas and oil companies Transported via pipelines and rail Processing of APG into natural gas and NGLs Transportation of NGLs Fractionation of NGLs into marketable energy products Sale of energy products to external customers and SIBUR s petrochemicals segment Production and sale of four categories of petrochemical products Basic polymers Synthetic rubbers Plastics and organic synthesis products Intermediates Notes: (1) Associated petroleum gas. (2) Natural gas liquids include raw NGL, LPG (liquefied petroleum gas), naphtha. 5

6 EXTENSIVE ASSET BASE THROUGHOUT RUSSIA 10 Tver Moscow 11 1 Saint-Petersburg Salekhard 27 Tula Kursk Voronezh Nizhniy 25 Perm Novgorod 14 2 Khanty-Mansiysk Ufa Samara 26 Tyumen Omsk Tomsk Krasnoyarsk Kemerovo WESTERN SIBERIA Largest oil & gas reserves region in Russia Proven oil reserves Proven gas reserves Source: IEA 48 bln bbl 22 tcm Feedstock & Energy segment 1. Ust-Luga Transshipment Facility 2. Uralorgsintez 3. Gubkinskiy GPP 4. Vyngapurovskiy GPP 5. Muravlenkovskiy GPP 6. Nyagan GPP 7. Belozerniy GPP 8. Nizhnevartovskiy GPP 9. Yuzhno-Balykskiy GPP Petrochemicals segment 10. SIBUR-PETF 11. BIAXPLEN (Moscow region) 12. Plastic-Geosintetika 13. BIAXPLEN (Kursk) 14. Voronezhsintezkauchuk 15. BIAXPLEN (Nizhniy Novgorod region) 16. SIBUR-Kstovo 17. SIBUR-Neftekhim (1) 18. Togliattikauchuk 19. BIAXPLEN (Samara region) 20. Polief 21. SIBUR GEOSINT (Surgut) 22. Tomskneftekhim / BIAXPLEN 23. SIBUR GEOSINT (Kemerovo) 24. Krasnoyarskiy ZSK (2) Production sites with joint operations of two segments 25. SIBUR-Khimprom 26. Tobolsk-Neftekhim / Tobolsk-Polymer Notes: (1) Including two production sites. (2) Under JV with SINOPEC. (3) JV with Gazprom Neft Group. (4) JV with SolVin Holding Nederland B.V. (5) Investment project. (6) JV with Gazprom Neft Group and Titan Group. Non-consolidated JVs 27. NPP Neftekhimia (3) 28. RusVinyl (4) 29. Yuzhno-Priobskiy GPP (3)(5) 30. Poliom (6) HQ 6

7 AGENDA 1. Business Overview 2. Investment Highlights 3. Strategy 4. 9M 2014 Operational and Financial Results 5. Appendices 7

8 INVESTMENT HIGHLIGHTS Advantageous access to feedstock and high barriers to entry Vertically integrated business model supporting earnings sustainability Leading market position in the attractive Russian petrochemicals market Highly diversified product portfolio Unique growth opportunities Strong management team and supportive shareholders 8

9 Advantageous access to feedstock and high barriers to entry UNIQUE LARGE-SCALE TRANSPORTATION AND FEEDSTOCK PROCESSING INFRASTRUCTURE IN WESTERN SIBERIA KHANTY-MANSI AUTONOMOUS AREA YAMAL-NENETS AUTONOMOUS AREA Nyagan GPP Muravlenkovskiy GPP Yuzhno-Balykskiy GPP Gubkinskiy GPP NOYABRSK PYT-YAKH Belozerniy GPP Purovsky GCP (NOVATEK) PUROVSK Vyngapurovskiy GPP Nizhnevartovskiy GPP SIBUR owns and operates the largest and most extensive infrastructure for processing and transportation of feedstock in Western Siberia: 7 out of 9 gas processing plants (GPP) APG processing capacity of 23 bcm p.a. Raw NGL processing capacity of 6.6 mmtpa at flagship gas fractionation unit (GFU) in Tobolsk (out of 8 mmtpa of the Company s total capacity) Pipeline network of 3,472 km 4 railway loading racks (out of 6 operated by Feedstock & Energy segment) ECONOMIES OF SCALE INTEGRATED INFRASTRUCTURE HIGH BARRIERS TO ENTRY Tobolsk-Neftekhim Tobolsk-Polymer TOBOLSK SIBUR / third-party compressor station third-party power plant TYUMEN REGION third-party gas condensate plant SIBUR / third-party gas processing plant (GPP) SIBUR gas fractionation unit (GFU) SIBUR propane dehydrogenation facility (PDH) SIBUR polymers production SIBUR loading rack SIBUR / third-party APG pipeline Gazprom condensate pipeline SIBUR / Gazprom natural gas pipeline SIBUR old raw NGL pipeline SIBUR newly constructed raw NGL pipeline truck transportation 9

10 Advantageous access to feedstock and high barriers to entry FEEDSTOCK TRENDS APG NGLs bcm (1) SIBUR s Processed and Sourced Volumes mln tonnes SIBUR s purchases SIBUR s purchases Rosneft s share in APG purchases (2) Purchases from Rosneft in JV (3) Contract / Spot Split as of 31 December % of APG supplies for 2015 guaranteed under multi-year contracts WA maturity of supply contracts 16.4 years 80% of NGLs supplies for 2015 guaranteed under multi-year contracts WA maturity of supply contracts 17.9 years Associated Petroleum Gas Unstable Gas Condensate Notes: (1) Billion cubic metres. (2) 49% of APG supplied by Rosneft to the GPPs of its JV with SIBUR. In March 2014, SIBUR gained full control over the JV via acquisition of a 49% stake from Rosneft. (3) 49% of raw NGL produced at the GPPs of the JV between SIBUR and Rosneft. These volumes were obtained by Rosneft and sold to SIBUR. In March 2014, SIBUR gained full control over the JV via acquisition of a 49% stake from Rosneft. (4) IHS CERA. (5) CDU TEK Outlook for Feedstock- Rich Gas Production in Russia (4) bcm (1) mln tonnes 2013 APG flaring c.21% (5) of produced volumes 10

11 Vertically integrated business model supporting earnings sustainability VERTICALLY INTEGRATED MODEL WITH MULTIPLE EMBEDDED EARNINGS SUSTAINABILITY DRIVERS (1) Oil producers Oil & Gas producers X% External sales represent c. 84% of Feedstock & Energy segment gross revenue Oil-based feedstock (APG) Gas-based feedstock (NGLs) - Share of available for sale volumes Feedstock & Energy segment 9 production sites Gross sales: RR bln EBITDA margin: 45.2% Methanol NGLs 29% 100% 71% 100% Natural gas NGLs MTBE Dominant share of feedstock for petrochemicals segment is sourced internally Petrochemicals segment 18 (2) production sites Gross sales: RR bln EBITDA margin: 5.9% Other third-party feedstock Basic polymers (PP, PE) Synthetic rubbers Plastics and organic synthesis Intermediates and other chemicals Earnings Sustainability Drivers Deep discount between natural gas selling price and APG purchasing price hedges economics of APG processing Economics of raw NGL fractionation limits exposure to oil & oil derivative price volatility Net seller position of energy products hedges against increases in prices for petrochemical feedstock Prices for petrochemical products are only partially correlated with oil & oil derivative prices Notes: (1) All figures based on FY 2013 financials. (2) As of 31 December

12 Plastics and organic synthesis Basic polymers Synthetic rubbers Leading market position in the attractive Russian petrochemicals market LEADING PLAYER IN THE HIGH-GROWTH DOMESTIC MARKET SIBUR s Share in Russia s Production Capacity Polypropylene LDPE % % 65 Growth Fundamentals Kg per Capita Consumption of Basic Polymers Polypropylene Polyethylene (LDPE) Western Europe 18 Western Europe 8 Central Europe 13 Eastern Europe 6 BR SBR SBS 2013 China Russia 6 13 China Russia % 50 % 50 % 73 % 100 Russia Consumption Growth Outlook CAGR, LLDPE 9.7% PVC 5.0% 41 PET % 59 Expandable polystyrene 88 % MEG % IIR MEG EPS PP HDPE 4.9% 4.1% 3.9% 3.7% 3.1% SIBUR s share Others PET LDPE 2.4% 1.5% Source: IHS, IISPR. 12

13 Highly diversified product portfolio MULTIPLE PRODUCTS, GEOGRAPHIES AND CUSTOMER GROUPS Intermediates and other chemicals Basic polymers Synthetic rubbers Plastics and organic synthesis products 12 9 Customer Concentration Energy products Synthetic rubbers Intermediates and other chemicals Plastics and organic synthesis products Basic polymers By product 15 7 Processing services and other sales 3 % 4 Raw NGL 7% 4% 8 9% Top % 11% 10 Total Group Sales Breakdown 10 21% LPG 28% Naphtha Natural gas MTBE and other fuels 47% 44% % Largest customer Europe Asia 27 CIS 9 Other 6 1 Contract / Spot Structure of Sales 27% 73% Energy By region 58% 42% Basic polymers Spot % 57 39% 61% Synthetic rubbers Contract Russia % 39% Plastics and organic synthesis Over 1,400 large customers from 70 countries representing diverse range of end-customer industries with low customer concentration and balanced contract / spot sales structure 13

14 Highly diversified product portfolio DIVERSE DRIVERS AND END-MARKETS revenue (1), RR bln LPG, naphtha, raw NGL Natural gas MTBE and other fuel additives Basic polymers Synthetic rubbers Plastics and OS products 19 Intermediates and other 2013 revenue structure 75% 25% 100% 8% 92% 34% 66% 59% 41% 26% 74% 17% 83% Domestic Export Key drivers Commodity cycle, global oil prices Transportation costs and export duties Changes of regulated gas tariffs by Russia s Federal Tariff Service Domestic fuel additives market (refineries upgrade, introduction of Euro standards, car fleet) Import substitution Demand/supply in multiple endcustomer industries Development of tyre & vehicle manufacturing Natural rubber prices Demand/ supply in multiple endcustomer industries Commodity cycle, demand/supply balance in respective petrochemical products Correlation with oil prices S Key endmarkets Power & Utilities Petrochemicals Fuel Power & Utilities Mineral fertilisers Gasoline production Petrochemicals FMCG Construction Automotive Construction FMCG Chemicals Construction Petrochemicals Chemicals Power & Utilities Notes: (1) External sales. 14

15 Western Europe Tobolsk Unique growth opportunities PE price in Western Europe EFFICIENT MONETISATION OF STRANDED FEEDSTOCK FEEDSTOCK Significant export duties for naphtha and LPG in Russia Ample feedstock base Illustrative HDPE price build-up Naphtha price (1) Naphtha feedstock cost (2) HDPE production cost (3) Total cost for producers (3) LPG price in Europe (4) Western Europe >4,000 km PETROCHEMICALS SIBUR s petrochemical hub in Tobolsk FEEDSTOCK Transport & export duties (4) LPG price in Tobolsk (4) LPG feedstock cost in Tobolsk (5) HDPE production cost net of by-product credits (3) Transportation to W.Europe (3) Total cost for producers (3) Long distances with infrastructural constraints >6,000 km SIBUR s production assets PETROCHEMICALS AND END-PRODUCTS Notes: (1) USD per tonne. (2) USD per tonne of polyethylene, assuming naphtha consumption ratio of 2.2x, and net of by-product credits. (3) USD per tonne of polyethylene. (4) USD per tonne of LPG-mix (propane and butane). (5) USD per tonne of olefins, assuming LPG-mix consumption ratio of 1.35x. China and Northeast Asia 15

16 Unique growth opportunities ZAPSIBNEFTEKHIM (ZAPSIB-2): EXPANSION OF POLYOLEFINS PRODUCTION IN TOBOLSK Project Overview Greenfield construction of ethylene cracking unit and polyolefin production complex in Tobolsk within the SIBUR s Tobolsk petrochemical hub Configuration: Cracking unit: 1.5 mtpa of ethylene, 500 ktpa of propylene, 100 ktpa of crude C 4 (LINDE AG, Germany) PE production units: 1.5 mtpa of PE (INEOS, the UK) PP production unit: 0.5 mtpa of PP (LyondellBasell, the Netherlands) Total estimated project CapEx: ~USD 9.5 (1) bln (~RR 360 bln) Estimated project CapEx for 2014: RR 21 (2) bln Russian State support for the project expected through investment agreements with the Tobolsk regional Government and City Administration Project Rationale Next stage of our investment programme in line with SIBUR s strategy on the back of successful implementation of the previous investment cycle Our key objectives: monetise access to attractively priced hydrocarbon feedstock stranded in Western Siberia capitalise on SIBUR s global cost advantage benefit from developed feedstock processing and transportation infrastructure achieve economies of scale strengthen vertically integrated business model meet growing demand for basic polymers both in Russia and internationally increase in overall sales geography diversification 1,400 1,200 1, Strong Position on the Global Cost Curve (3) (USD per tonne) Light olefins (2019) NA avg. WE avg. Tomskneftekhim Tobolsk-Polymer ZapSibNeftekhim ME avg. / NA ethane China coal-to-olefins NEA avg , , , , ,000 Cumulative capacity ( 000 tonnes) ME Middle East NA North America NEA Northeast Asia WE Western Europe 000 tonnes Ethane Propane N-Butane Ethylene cracking unit (ECU) (1) Estimate as of November Net of VAT, including expenses related to FEED, preparation and commissioning works. (2) Net of VAT, excluding FEED stage financing. (3) Source: IHS, November Production Scheme Ethylene 1,500 Propylene 525 HDPE HDPE LLDPE / HDPE LLDPE / HDPE PP

17 Strong management team and supportive shareholders ESTABLISHED GOVERNANCE PRACTICES AND BALANCED BOARD STRUCTURE Highest Corporate Governance Standards SIBUR s Board of Directors includes high profile independent members Institutionalized board committees in alignment with global best practices Internal processes are largely governed by specific and formalized regulation IFRS financial reporting since 2003 Shareholder Structure (1) Board of Directors (2) Board Committees (2) Leonid Mikhelson 50.2 % Notes: (1) As of 5 September (2) Elected on 29 December (3) Independent Directors. (4) Chairmen of the Board Committees. Kirill Shamalov Gennady Timchenko Current & former senior SIBUR managers Leonid Mikhelson Member of the BOD, Chairman of the Management Board of OAO NOVATEK Gennady Timchenko Co-founder of Gunvor Alexander Dyukov CEO of OAO Gazprom Neft Vladimir Razumov Member of the Management Board, Deputy Chairman of the Management Board - Executive Director of OOO SIBUR Kirill Shamalov Deputy Chairman of the Management Board of the Management Company OOO SIBUR Dmitry Konov Chairman of the Management Board, PAO SIBUR Holding, CEO of OOO SIBUR Ruben Vardanian (3) Managing Director and Chairman of the Board of Directors of ZAO Sberbank CIB Seppo Remes (3) General Director of KIURU OOO Ilya Tafintsev Director, Strategic Projects, OAO NOVATEK Denis Nikienko Member of the Board of Directors of PJSC SIBUR Holding Audit Committee Human Resources & Remuneration Committee Strategy and Investments Committee Seppo Remes (3)(4) Denis Nikienko Ilya Tafintsev Ruben Vardanian (3)(4) Kirill Shamalov Seppo Remes (3) Alexander Dyukov (4) Vladimir Razumov Ilya Tafintsev Gennady Timchenko Kirill Shamalov 17

18 Strong management team and supportive shareholders HIGHLY EXPERIENCED MANAGEMENT TEAM WITH EXTENSIVE TRACK RECORD Dmitry Konov CEO Chairman of the Management Board Pavel Malyi CFO Deputy Chairman of the Management Board Vladimir Razumov Deputy Chairman of the Management Board Mikhail Karisalov Deputy Chairman of the Management Board Kirill Shamalov Deputy Chairman of the Management Board EXPERIENCE HIGHLIGHTS IMD MBA degree 11 years at SIBUR Former Managing Director at AKB Trust and Investment Bank LL.M. from Chicago Law School 4 years at SIBUR Former Head of UBS Investment Bank, Russia and CIS Over 40 years in petrochemical industry 13 years at SIBUR Former USSR Deputy Minister of the Oil Refining and Petrochemicals Industry 11 years at SIBUR Former Head of Feedstock & Energy Division at SIBUR 6 years at SIBUR Former advisor to the Russian Government Former Chief Legal counsel for Foreign Economic Activity at OAO Gazprom 18

19 Strong management team and supportive shareholders SIBUR S EVOLUTION AS INDUSTRY LEADING PLAYER present Consistent strategy implementation Creating fundamentals for growth Feb-2003: Mr. Dyukov appointed CEO Core management team formed Production flow streamlined Number of efficiency initiatives realised (sales, procurement, operations) Development and implementation of centralised SCM system Organisational restructuring: creation of business units Asset consolidation Debt restructuring Emerging as industry-leading player Dec-2006: Mr. Konov appointed CEO Long-term development strategy formulated Formalized investment procedures and processes in place Development of capex execution capabilities Headcount optimization Successful navigation through global economic crisis Modernization and expansion of Feedstock & Energy segment assets JVs with TNK-BP (1) and SolVin created Selective M&A Mr. Mikhelson becomes controlling shareholder Disposal of non-core assets (fertilisers and tyres businesses) Upgrade of SCM system Operational improvements Development and implementation of SIBUR production system ERP implementation and IT upgrade Establishment of international JVs (Reliance, Sinopec) Selective M&A In March 2014, SIBUR gained full control over Yugragazpererabotka, previously JV with Rosneft Completion of 5 investment projects, including large-scale petrochemical project in Tobolsk Decision to proceed with ZapSibNeftekhim (ZapSib-2) project Notes: (1) On 30 July 2013, TNK- BP was renamed to RN Holding following the acquisition by Rosneft. 19

20 AGENDA 1. Business Overview 2. Investment Highlights 3. Strategy 4. 9M 2014 Operational and Financial Results 5. Appendices 20

21 STRATEGIC OBJECTIVES Cement longterm access to feedstock Strengthen cooperation with oil and gas companies by offering efficient by-product utilisation services through multi-year contracts and JVs Expand APG and NGLs processing capacity and infrastructure in Western Siberia Monetise stranded feedstock through petrochemicals Capture domestic growth opportunities Pursue operational excellence Develop large-scale petrochemicals production capacity close to feedstock base in Western Siberia to capitalise on strong cost advantage for basic polymers Achieve more balanced business model through reduction of exposure to volatile global energy markets Enhance position on the domestic petrochemicals market to benefit from Growth in per-capita consumption Replacement of conventional materials by petrochemical products Import substitution Cost control Streamline and integrate asset base Enhance business processes and functions, upgrade IT infrastructure Prioritisation of investment opportunities and focus on projects with best strategic fit and industryleading returns 21

22 Feedstock processing capacity, Transportation infrastructure Petrochemicals Other TOTAL Feedstock processing capacity, Transportation infrastructure Petrochemicals Other TOTAL INVESTMENT PROGRAMME: NEW INVESTMENT CYCLE TO MEET STRATEGIC GOALS RR bln (excl. VAT) A E (as of November 2014) (1) RR bln (excl. VAT) ZapSibNeftekhim total CapEx ~USD 9.5 bln in 7yrs in 5yrs Transportation infrastructure Feedstock processing capacity Petrochemicals Maintenance, R&D, IT, and other TOTAL Transportation infrastructure Feedstock processing capacity Petrochemicals Maintenance, R&D, IT, and other TOTAL RR 74 bln (excl. VAT) investment programme approved by SIBUR BoD for 2014 Source: Company data Notes: (1) Includes only investment projects approved by the Group s Investment Committee. In addition, SIBUR is evaluating a number of projects which are at various stages of review. Therefore, the actual amount of capital expenditure that the Group may incur may exceed the amounts that have been formally approved. 22

23 AGENDA 1. Business Overview 2. Investment Highlights 3. Strategy 4. 9M 2014 Operational and Financial Results 5. Appendices 23

24 KEY HIGHLIGHTS Macroeconomic environment was generally difficult in 9M 14 Near stagnancy in Russian economy; flat GDP growth in China; rebounding EU and US GDP Accelerating inflation External Environment 9M 2014 Declining oil prices; flat prices for naphtha and mixed dynamics on key LPG markets (in USD terms) Weak market environment in synthetic rubbers Substantial RR depreciation against USD and EUR Avg. RR/USD rate up by 11.9% y-o-y Avg. RR/EUR rate up by 15.2% y-o-y RR/USD rate as of 30 Sep 14 up by 20.3% vs 31 Dec 13 RR/EUR rate as of 30 Sep 14 up by 11.1% vs 31 Dec 13 Indexation of natural gas prices Growth in avg. 9M 14 price of 10.9% y-o-y One-off Factors 9M 2014 March 2014: acquisition of a 49% stake in Yugragazpererabotka and new commercial agreements with Rosneft RR 52,773 million in non-cash gain Increase in debt to fund the transaction SIBUR: Key Developments 2014 YTD BoD approval to proceed with ZapSibNeftekhim (September 2014) Increase in the total 2014 approved CapEx budget to RR 74 bln from RR 53 bln (net of VAT) Major EP contractors engaged Approval from Euler Hermes and Coface for ECA cover for EP contracts Launch of major facilities in Western Siberia: Purovsk Pyt-Yakh Tobolsk pipeline partially launched (822 km out of 1,100 km put in operation), transportation of feedstock initiated, certain sections to go on stream next year Second GFU in Tobolsk launched (capacity expansion from 3.8 mtpa up to 6.6 mtpa) Tobolsk-Polymer ramp-up almost finished Further organic expansion in petchem: PET capacity expansion (from 140 ktpa up to 210 ktpa) New BOPP-films production line (30.5 ktpa) RusVinyl launch (330 ktpa of PVC and 225 ktpa of caustic soda) and initiation of ethylene supplies from steam cracker in Kstovo Material expansion in energy products trading volumes following Ust-Luga launch First LPG shipments to China Acquisition of 25% in Omsk Polypropylene Plant (Poliom) via JV with Gazprom neft and Titan Group RR 42 bln credit facility from Sberbank (November 2014) 24

25 9M 2014 KEY OPERATIONAL AND FINANCIAL HIGHLIGHTS APG processing volumes increased by 6.1% y-o-y Natural gas production increased by 6.5% y-o-y Operational Results Raw NGL fractionation volumes increased by 16.4% y-o-y LPG production increased by 22.5% y-o-y Petrochemical products sales volumes decreased by 1.0% y-o-y PP production increased by 165.1% y-o-y Revenue increased by 33.5% y-o-y to RR bln EBITDA increased by 28.3% y-o-y to RR 73.1 bln, for an EBITDA margin of 27.7% Estimated EBITDA margin adjusted for naphtha trading (1) amounted to 31.7% Financial Results Net profit increased by 97.2% y-o-y to RR 67.9 bln Adjusted net profit (2) decreased by 31.4% to RR 24.8 bln Operating cash flows before working capital changes increased by 29.6% CapEx decreased by 6.3% y-o-y to RR 49.3 bln Net Debt to EBITDA at 1.40x as of 30 Sep 14 vs. 1.27x as of 30 Jun 14 and 1.17x as of 31 Dec 13 Notes: (1) Estimated adjusted EBITDA margin excludes naphtha trading via the Ust-Luga transshipment facility. (2) Net profit adjusted for non-cash charge related to the equity-settled share-based payment plans and the non-cash gains on acquisition and deconsolidation of Yugragazpererabotka. 25

26 MACRO ENVIRONMENT Russian GDP Growth (1) Consumer Price Index (y-o-y) (1) Producer Price Index (y-o-y) (1) 1.1% 0.8% (2) 6.1% 8.0% 1.4% 3.5% Average Exchange Rate (3) RR / USD % EOP Exchange Rate (3) RR / USD % % Effective Average Electricity Tariffs RR per kw hour % Dec'12 30 Sep'13 31 Dec'13 30 Sep'14 Source: (1) Russian Federal State Statistics Service (2) Preliminary Data (3) CBR 26

27 MARKET ENVIRONMENT (1) 000 USD per tonne (avg. for the period) 000 USD per thousand cubic metres of natural gas (avg. for the period) Energy Products (2.8%) +1.9% (1.4%) (3.8%) +13.5% Basic Polymers 000 USD per tonne (avg. for the period) % +4.3% 0.0 (0.9%) Brent Naphtha LPG CIF ARA (large) MTBE Natural gas LPG DAF Brest 1.3 PP LDPE Synthetic Rubbers Plastics & Organic Synthesis 000 USD per tonne (avg. for the period) 000 USD per tonne (avg. for the period) (5.6%) 3.0 (1.5%) 1.8 (6.9%) 2.5 (24.5%) (2.6%) (29.9%) 1.4 (6.4%) 1.5 (5.7%) 1.2 (12.0%) (15.2%) Natural rubber (USD) Styrene-butadiene rubber 2-ethylhexanol Expandable polystyrene Butadiene Butyl rubber MEG Butyl acrylate Styrene PET Source: Argus, Platts, Bloomberg, ICIS, Chemease, Malaysian Rubber Board, Federal Tariff Service of Russian Federation Notes: (1) For detailed market data statistics please refer to Appendix. Prices quoted in EUR are converted to USD at average EUR / USD FX rates for the respective periods. 27

28 USD Equivalents (illustrative) Russian Roubles SIBUR FINANCIAL SUMMARY (1) Revenue Net operating expenses (2) EBITDA Operating Cash Flow Investing Cash Flow (3) RR bln RR bln RR bln RR bln RR bln % % % % +37.1% Revenue Net operating expenses (2) EBITDA Operating Cash Flow Investing Cash Flow (3) USD bln USD bln USD bln USD bln USD bln % % % 1.8 (5.6%) % 2.2 (1) Values in USD estimated based on average RR/USD rate of and for 9M 2014 and 9M 2013, respectively. (2) Operating expenses before equity-settled share-based payment plans. (3) Includes CapEx and M&A. 28

29 REVENUE STRUCTURE AND DYNAMICS RR bln Total Revenue +33.5% RR bln Energy Products RR bln Petrochemical Products % % 92.8 Revenue Split by Product % M 2014 Intermediates and other chemicals Processing services Synthetic rubbers and other sales Basic polymers Plastics and organic synthesis products Raw NGL MTBE and other fuels Natural gas LPG Naphtha Europe Revenue By region Split by Region 38 Asia CIS Other % 48 Russia 9M

30 REVENUE DYNAMICS BY PRODUCT GROUP LPG Naphtha Natural gas MTBE Raw NGL RR bln +36.2% RR bln % RR bln RR bln RR bln % (0.9%) % 7.7 Plastics & Organic Synthesis Basic Polymers Synthetic Rubbers Intermediates & Other Other Revenue RR bln RR bln RR bln RR bln RR bln % % (19.2%) (7.2%) 13.6 Trading and other sales Sales of processing services +8.7%

31 KEY ENERGY PRODUCTS: SALES VOLUMES AND PRICE DYNAMICS LPG Sales volumes, 000 tonnes Change in effective avg. selling price, % Naphtha Sales volumes, 000 tonnes Change in effective avg. selling price, % 2, % +17.9% 2, % % 1,817 8,929 Natural Gas Sales volumes, mln cubic metres Change in effective avg. selling price, % +9.9% +28.7% 11,492 Key Factors Higher sales volumes of naphtha and LPG on expanded trading activities organic growth in production following the launch of integrated feedstock processing and transportation infrastructure Increase in natural gas sales volumes due to consolidation of 100% production at GPPs of Yugragazpererabotka following its acquisition Higher selling prices across the product range due to substantial RR depreciation and longer delivery basis for trading volumes despite volatile market prices for most products partially offset by higher export duties on LPG Increase in natural gas selling price on the 10.9% y-o-y indexation of regulated prices 31

32 PETROCHEMICALS: SALES VOLUMES AND PRICE DYNAMICS Basic Polymers Synthetic Rubbers Key Factors Sales volumes, 000 tonnes Change in effective avg. selling price, % % +37.6% 460 Plastics & Organic Synthesis Sales volumes, 000 tonnes Change in effective avg. selling price, % +6.8% (1.4%) Sales volumes, 000 tonnes Change in effective avg. selling price, % Intermediates & Other 369 (2.4%) (17.2%) Sales volumes, 000 tonnes Change in effective avg. selling price, % +17.8% (21.2%) 291 Basic polymers: Higher sales volumes due to growth in PP production following Tobolsk-Polymer launch Higher PP and LDPE prices reflecting growth in international market prices supported by weak RR and local supply shortages Synthetic rubbers: Decrease in sales volumes primarily due to lower commodity rubbers production and inventory build-up Continued downward pricing trend for all rubber grades during H1 partially compensated by slight improvement for certain grades in Q3 Plastics & organic synthesis: Lower sales volumes largely due to decrease in glycols production as a result of shutdowns in Kstovo and Dzerzhinsk deconsolidation of Plastic and divestment of PVC cable compounds production compensated by higher PET and BOPP-film production following capacity expansions Decline in market prices for majority of products mitigated by substantial RR depreciation Intermediates & other chemicals: Lower sales volumes due to lengthy shutdowns in Kstovo and Dzerzhinsk Higher TPA volumes used internally following expanded PET production 32

33 NET OPERATING EXPENSES STRUCTURE AND DYNAMICS Y-o-Y dynamics RR bln 75% 80% +40.5% Net Operating Expenses (1) Structure Services from 3 rd parties Repairs & maintenance Depreciation & 3 2 amortisation 9 Staff costs Key Factors Energy & utilities Increase in goods for resale purchases on expanded trading activities following the launch of Ust-Luga transshipment facility Higher feedstock & materials on higher APG purchases following the acquisition of Yugragazpererabotka and new terms of contracts with Rosneft purchase of 100% of APG supplied to the GPPs of Yugragazpererabotka change in APG price formula for new contracts with Rosneft compensated by termination of raw NGL purchases from Rosneft Higher D&A expenses due to commissioning of new large-scale facilities (Tobolsk-Polymer, certain sections of raw NGL pipeline, Ust-Luga, second GFU) amortisation of intangible assets related to APG supply contracts consolidation of Yugragazpererabotka s assets Higher transportation & rent expenses due to longer delivery distances and higher transported volumes combined with RR depreciation Increase in energy & utilities expenses due to Yugragazpererabotka consolidation from March 2014 (1) Operating expenses before equity-settled share-based payment plans. (2) Transportation, logistics and rent Rent % 28 9M 2014 Feedstock & materials Goods for resale Transportation & logistics Goods for Resale RR bln 2% 14% % 4.8 Depreciation & Amortisation RR bln 4% 7% % Energy & Utilities RR bln 10% 9% % x% Feedstock & Materials RR bln 25% 23% % Transportation & Rent (2) RR bln Transportation & logistics Rent expenses 17% 14% % 36.7 RR bln 10% 7% % % of revenue Staff Costs 33

34 CASH FLOW STATEMENT HIGHLIGHTS Key Developments Net cash from operating activities increased by 5.7% y-o-y on higher EBITDA partially offset by negative impact from WC changes and higher income tax paid due to substantial advance tax payments Net cash used in investing activities increased by 37.1% y-o-y on 1 st tranche payment for the acquisition of Rosneft s 49% stake in Yugragazpererabotka higher loans issued and contributions to the share capital of RusVinyl, financing of Yuzhno-Priobskiy GPP construction and Poliom stake acquisition despite decrease in CapEx by 6.3% y-o-y (1) Net cash received from financing activities attributable to new borrowings to fund the acquisition of a 49% stake in Yugragazpererabotka and for financing of ZapSibNeftekhim Key Highlights Nine months ended 30 September Change % RR mln, except as stated Net cash from operating activities 60,412 57, % Operating cash flows before WC changes 73,561 56, % Changes in working capital (2,009) 8,929 n/m Income tax paid (11,140) (8,535) 30.5% Net cash used in investing activities, including (76,182) (55,568) 37.1% Purchase of PPE (49,293) (52,605) (6.3%) Acquisition of interest in subsidiaries, net of cash acquired Additional contribution to the share capital of joint ventures (20,666) (1,742) n/m (5,176) (3,200) 61.8% Net cash (used in) / from financing activities, including 19,673 (9,268) n/m Net proceeds from / (repayment of) debt 24,212 (436) n/m Dividends (6,383) (7,625) (16.3%) Effect of exchange rate changes on cash and cash equivalents Net increase / (decrease) in cash and cash equivalents 517 (63) n/m 4,420 (7,724) n/m Notes: (1) In September 2014, SIBUR Board of Directors approved expansion of the investment programme for 2014 from RR 53 bln to RR 74 bln (net of VAT). 34

35 DEBT STRUCTURE AND MATURITY PROFILE Key Highlights Net debt increased by 43.3% y-o-y primarily due to new borrowings to fund the acquisition of a 49% stake in Yugragazpererabotka and ZapSibNeftekhim project financing In 2014 YTD, SIBUR secured RR 27 bln (2yr) and RR 42 bln (5yr) facilities with Sberbank As of 30 September 2014, all of the debt was unsecured RR bln, except as stated Key Figures 30 Sep Jun Dec 2013 Change, % vs 31 Dec 2013 Debt % Cash & cash equivalents % Net debt % Average loan tenor (years) Available credit lines % Debt / EBITDA 1.53x 1.43x 1.27x Debt Maturity Profile Debt Currency Split Net debt / EBITDA 1.40x 1.27x 1.17x EBITDA / Interest (1) 16x 17x 17x RR bln, except as stated 1 Dec 30 Sep 2014 (2) Mar 2014 Change, % 1 Dec vs 30 Sep Total debt % RR bln 30 Sep 14 RR 30 Sep 14 Maturity profile Short-term % USD 77 % 20 4 EUR Long-term % Currency split USD ($2.9 bln) ($2.8 bln) ($2.9 bln) 27.8% RR % < 1 y 1-2 y 2-5 y > 5 y EUR % Notes: (1) Interest represents accrued interest, i.e. includes interest expense and capitalised interest. (2) Unaudited data. Credit lines % Committed % Uncommitted % 35

36 Appendix 36

37 FINANCIAL CALENDAR 2015 Event Date FY 2014 Operational and Financial Results March 2015 Q Operational and Financial Results Early Fall 2015 Q2 and H Operational and Financial Results Early Q Q3 and 9M 2015 Operational and Financial Results December 2015 On 1 January 2015, SIBUR migrates to SAP-based ERP system, which may result in delays in our IFRS disclosure schedule 37

38 EXPOSURE TO OIL PRICES AND FX Raw NGL Natural gas Correlation Currency Currency Correlation Revenue Categories Revenue Net OpEx with Oil Nature (1) Net OpEx Categories Nature with Oil Processing services & other sales Intermediates & other chemicals Synthetic rubbers Basic polymers Plastics & organic synthesis MTBE and other fuels Naphtha negative impact of lower oil prices somewhat compensated by lower export duty and RR depreciation 264 3% 5% 8% 10% 13% 3% 6% 10% 20% 210 4% 3% 9% 9% 11% 18% 18% S ILLUSTRATIVE 9M 2014 RR bln Other Repairs & maintenance D&A Staff costs Energy & utilities Transportation, logistics & rent Goods for resale low-marginal trading operations LPG negative impact of lower oil prices somewhat compensated by lower export duty and RR depreciation 22% 28% Feedstock & materials APG: indexed in line with FTS, some contracts account for changes in NGLs netbacks NGLs priced at netbacks (1) Operating expenses before equity-settled share-based payment plans. US dollar Russian rouble Naphtha trading operations 38

39 LOWER EXPORT DUTIES AND RR DEPRECIATION SUPPORT ENERGY PRODUCT REVENUES ON DECREASING OIL RR / USD oil price negative correlation USD per bbl Oil price and export duties impact on product price USD per tonne LPG CIF ARA case USD per bbl 1, , RR/USD (LHS) Brent (RHS) LPG CIF ARA (large) LPG price net of duty Brent (RHS) Oil price and export duties impact on product price Oil price and export duties impact on product price USD per tonne LPG DAF Brest case USD per bbl USD per tonne Naphtha CIF ARA case USD per bbl 1, , , , LPG DAF Brest LPG price net of duty Brent (RHS) Naphtha CIF NWE Naphtha price net of duty Brent (RHS) 39

40 MARKET PRICES VS OIL PRICE Energy Products Basic Polymers Rebased to % Rebased to % 100% 110% 80% 90% 60% Brent LPG CIF ARA (large) Naphtha CIF NWE LPG DAF Brest 70% LDPE CFR China film, Spot PP rafia China Main Port, Spot 40% MTBE Natural gas 50% Brent Rebased to % Synthetic Rubbers Rebased to % Plastics & Organic Synthesis Products 100% 80% 100% 60% 40% 20% Styrene butadiene rubber Butadiene Styrene Natural Rubber Butyl rubber Brent 80% 60% Polystyrene, EPS block FOB Korea MEG Contract, FD NWE T2 2-ethylhexanol Spot, FD NWE Butyl acrylate Spot, FD NWE PET FOB China, Spot Brent Source: Argus, Platts, Bloomberg, ICIS, Malaysian Rubber Board, Chemease, Federal Tariff Service of Russian Federation 40

41 STRATEGY IMPLEMENTATION RESULTS: EXTENSIVE TRANSPORTATION INFRASTRUCTURE SUPPORTING EFFICIENT FEEDSTOCK SUPPLIES Old Raw NGL Pipeline Total length: 1,168 km Total throughput capacity: up to 4.8 mtpa Two detached sections: Northern: connection between Gubkinskiy GPP (1), Muravlenkovskiy GPP, Vyngapurovskiy GPP and Noyabrsk loading rack Southern: connection between Belozerniy GPP, Nizhnevartovskiy GPP, Yuzhno-Balykskiy GPP and Tobolsk GFU Newly Constructed Raw NGL Pipeline New 1,100 km raw NGL pipeline between Purovskiy GCP (2), Noyabrsk loading rack, Yuzhno-Balykskiy GPP (near Pyt-Yakh) and Tobolsk GFU Throughput capacity: c.4 mtpa (Purovskiy GCP Noyabrsk loading rack) c.5.5 mtpa (Noyabrsk loading rack Yuzhno-Balykskiy GPP) c.8.0 mtpa (Yuzhno-Balykskiy GPP Tobolsk GFU) CapEx: ~RR 63 bln (excl. VAT) YAMAL-NENETS AUTONOMOUS AREA Gubkinskiy 2005 GPP 2011 Muravlenkovskiy 1989 KHANTY-MANSI GPP 2009 AUTONOMOUS AREA 2009 Tobolsk-Neftekhim Tobolsk-Polymer Nyagan GPP Yuzhno-Balykskiy GPP TYUMEN REGION TOBOLSK NOYABRSK 1981 SIBUR old raw NGL pipeline SIBUR newly constructed raw NGL pipeline Commissioning date Belozerniy GPP Purovsky GCP (NOVATEK) PUROVSK Vyngapurovskiy GPP PYT-YAKH Nizhnevartovskiy 2001 GPP 2009 (1) Gas processing plant. (2) Gas condensate plant. 41

42 STRATEGY IMPLEMENTATION RESULTS: NEW GAS FRACTIONATION UNIT (GFU) AT TOBOLSK-NEFTEKHIM Key Existing Facilities Gas fractionation unit (GFU-1): Processing capacity of 3.8 mtpa of raw NGL Commissioned in 1984 Latest modernisation in 2011 Feedstock supplies via Purovsk Pyt-Yakh Tobolsk raw NGL pipeline, inter alia from Yuzhno-Balykskiy GPP MTBE production unit: Capacity of 150 ktpa Commissioned in 1997 Latest modernisation in 2011 Production of intermediate chemicals: Butadiene production capacity of 207 ktpa Isobutylene production capacity of 83 ktpa Isobutane-isobutylene fraction (IIF) production capacity of 195 ktpa, latest modernisation in 2013 Raw NGL 6.6 mtpa GFU Isobutane Butane Production Scheme Methanol Dehydrogenation Dehydrogenation IIF 195 Isobutylene 83 MTBE Production Butadiene 207 LPG, naphtha MTBE 150 Launches in 2014 Second GFU (GFU-2): Expansion of raw NGL fractionation capacity to 6.6 mtpa Support growing volumes of raw NGL supplies through the new pipeline CapEx: ~ RR 14 bln (excl. VAT) Launched in Q1 14 Propane purification facility Railway infrastructure expansion 42

43 STRATEGY IMPLEMENTATION RESULTS: TOBOLSK-POLYMER POLYPROPYLENE PLANT Project Description Design capacity: Propane dehydrogenation: 510,000 tonnes p.a. of propylene Polypropylene (PP) production: 500,000 tonnes p.a. Leading global players involved: Licensors: UOP, INEOS EPC contactors: Tecnimont, LINDE CapEx: ~RR 64 bln (excl. VAT) Strategic Importance for SIBUR Advantageous feedstock access Growing supplies of raw NGL virtually stranded in the region Efficient feedstock delivery via own raw NGL pipeline Monetisation of stranded feedstock through petrochemicals production Infrastructural synergies Infrastructure shared with existing production site (Tobolsk-Neftekhim) Close proximity to Tobolsk GFU SIBUR`s main feedstock processing facility Market potential PP demand growth in Russia and CIS; import substitution Access to key export markets: Europe and Asia Production Scheme Strategic Importance for Russia GFU Raw NGL Propane 6.6 mtpa 612 ktpa Dehydrogenation Propylene 510 ktpa TOBOLSK-POLYMER PP-500 Contribution to the development of Russian economy, inter alia through production of high-quality materials needed to upgrade and modernise the country s infrastructure Contribution to the development of the region`s economy, including creation of approximately 1,000 new jobs (incl. vendors and contractors) Tobolsk-Polymer is on the government s top-priority project list in the region Part of the government s APG utilisation programme 43

44 SIBUR AND ROSNEFT NEW FRAMEWORK FOR LONG-TERM COOPERATION New Contracts Increase in guaranteed APG supplies to 10 bcm p.a. from 6.6 bcm p.a. Increase in guaranteed sales of natural gas (1) Tenors for APG supplies and natural gas sales extended to 2032 (inclusive) from 2026 Rosneft s commitment to NGLs content in APG supplied to Yugragazpererabotka Acquisition of Control in Yugragazpererabotka Acquisition of a 49% interest in Yugragazpererabotka from Rosneft Group completed on 6 March 2014 Deal value of USD bln in cash USD bln paid in March 2014 USD 1 bln to be paid in H Strategic Importance for SIBUR SIBUR gains full control over 3 GPPs with processing capacity of 13.4 bcm p.a. and related infrastructure Cementing long-term access to feedstock Operational and strategic synergies Impact on SIBUR Financials Consolidation as a wholly owned subsidiary from 6 March 2014 Overall improvement in SIBUR results Non-cash gain on equity interest (to be excluded from dividend base) Notes: (1) Natural gas produced at Nizhnevartovskiy GPP and Belozerniy GPP. (2) As of 1 January

45 YUGRAGAZPERERABOTKA TRANSACTION IMPLICATIONS Pre Transaction Post Transaction Impact on SIBUR APG SIBUR purchases 51% of volumes supplied to Yugragazpererabotka GPPs, primarily from Rosneft Rosneft is responsible for the remaining 49% of volumes SIBUR purchases 100% of volumes supplied to Yugragazpererabotka GPPs, primarily from Rosneft Rosneft sells all volumes to SIBUR APG purchasing volumes and costs Raw NGL SIBUR obtains 51%, purchases 49% from Rosneft Rosneft obtains 49%, sells 49% to SIBUR SIBUR retains 100% Raw NGL production Raw NGL purchasing volumes and costs Natural Gas SIBUR obtains 51%, sells 51% to Rosneft Rosneft obtains 49%, purchases 51% from SIBUR SIBUR obtains 100%, sells all volumes from Nizhnevartovskiy and Belozerniy GPPs to Rosneft Natural gas production Sales volumes and revenue from sales of natural gas P&L (1) SIBUR pays to Yugragazpererabotka a processing fee reflected in OpEx as 3 rd party processing 100% OpEx consolidated OpEx (other than feedstock) Processing fee Non-cash gain on equity interest (2) CF BS SIBUR finances its share of Yugragazpererabotka CapEx via loans issued / investments in JVs SIBUR s 51% interest is accounted for as Investment in JV 100% CapEx consolidated CapEx Loans issued / investments in JVs 100% consolidated PP&E, goodwill, other non-current assets Accounts payable, total debt Notes: (1) Items other than revenue and feedstock costs. (2) For the purpose of dividends calculation net profit will be adjusted for this charge. 45

46 YUGRAGAZPERERABOTKA ACQUISITION: IMPLICATION ON SIBUR FINANCIALS Following the acquisition of control over Yugragazpererabotka, the Group has reflected the following transactions in its IFRS for the 9M 2014 results: Increase in PPE value in balance sheet Increase in intangible assets related to supply contracts of RR 115,816 mln Non-taxable gain resulted in higher deferred income tax liabilities RR 52,773 mln gain was recognised due to revaluation of SIBUR s previously held at historical cost 51% interest in Yugragazpererabotka Total cash consideration of RR 55,733 mln split between: cash outflow of RR 20,547 (1 st tranche payment) an increase in trade and other payables in balance sheet Increase in borrowings to fund the transaction Balance Sheet As of 30 Sep 14 As of 31 Dec 13 RR millions Assets Non-current assets Property, plant and equipment 305, ,198 Other intangible assets 118,484 4, Total non-current assets 499, ,887 Current assets Total current assets 79,096 68,544 Liabilities Non-current liabilities Deferred income tax liabilities 28,784 5, Total non-current liabilities 184, ,682 Current liabilities Short-term debt and current portion of long-term debt 36,307 42,743 Trade and other payables 77,504 36,458. Total current liabilities 116,931 81,480 Equity 305, ,304 P&L RR millions 9M 14 9M 13 Revenue 263, ,598 Total OpEx (219,332) (153,297) Operating profit 44,520 44,301 Gain on acquisition of subsidiary 52, Profit before income tax 74,753 42,125 Income tax expense (6,896) (7,715) Profit for the reporting period 67,857 34,410 Cash Flow Statement RR millions 9M 14 9M 13 CFO 60,412 57,175 CFI (76,182) (55,568) Acquisition of interest in subsidiaries, net of cash acquired (20,666) (1,742) CFF 19,673 (9,268) Net proceeds from debt 24,212 (436)... Net increase/ (decrease) in cash and cash equivalents 4,420 (7,724) Cash and cash equivalents, eop 12,368 5,846 46