Engro Corporation

FY 2023 Analyst Briefing

February 2024

www.engro.com
FY 2023 Analyst Briefing

Important Disclaimer

THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR ANY INVESTMENT

This presentation has been prepared by Engro Corporation Limited (“Engro”) solely for information purposes. No representation or warranty express or implied is made thereto, and no
reliance should be placed on, the fairness, accuracy, sufficiency, completeness or correctness of the information or any opinion contained herein, or any opinion rendered thereto. The
information contained in this presentation should be considered in the context of the circumstances prevailing at the time and will not be updated to reflect any developments that may
occur after the date of the presentation. Neither Engro nor any of its respective subsidiaries, affiliates, officials, advisors, associates, employees or any person working for, under or on
behalf, shall have any responsibility and/or liability of any nature whatsoever (in contract or otherwise) for any loss whatsoever arising from any use of this presentation or its contents or
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The presentation may contain statements that reflect Engro’s own beliefs and expectations about the future. These forward-looking statements are based on a number of assumptions
about the future, which are beyond Engro’s control. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the
most likely or standard scenario. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those
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such forward-looking statements will be achieved. In addition, past performance should not be taken as an indication or guarantee of future results.

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Company Profile: Click here

www.engro.com 2
FY 2023 Analyst Briefing

Agenda
1 Group Overview

2 Pakistan Economy

3 Key Achievements during 2023

Financial Highlights & Other Key

4 Information

5 Awards & Sustainability

6 Q&A Session

www.engro.com
 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Group Overview
Companies and Legal Entities within Engro Corporation

ENGRO CORPORATION LIMITED

ENGRO
FOUNDATION
(TRUST)

56.2% 56.19% 39.93% 100% 100% 100% 100% 100% 50% 56%

ENGRO FRIESLAND ENGRO EXIMP ENGRO THERMAL ENGRO VOPAK ELENGY

ENGRO POLYMER & ENGRO ENERGY ENGRO
FERTILIZERS CAMPINA ENGRO AGRIPRODUCTS CONNNECT VISION (PVT.) TERMINAL TERMINAL
CHEMICALS LIMITED LIMITED EXIMP FZE
LIMITED PAKISTAN LTD. (PVT.) LIMITED (PVT.) LIMITED LIMITED LIMITED PAKISTAN LTD.
100% 100% 100% 100%
100%
100%

ENGRO ENGRO ENGRO

EFERT THINK PVC ENGRO
PLASTISIZER PEROXIDE ELENGY
AGRITRADE (PVT.) ENFRASHARE
(PVT.) (PVT.) TERMINAL
(PVT.) LIMITED LIMITED (PVT.) LIMITED
LIMITED LIMITED (PVT.) LIMITED

45% 68.9% 50.1% 11.9%

ENGRO SINDH ENGRO COAL

GEL UTILITY ENGRO POWERGEN Listed Entities (05)
POWERGEN THAR MINING COMPANY
LTD. (NIGERIA) QADIRPUR LIMITED LIMITED
(PVT.) LIMITED
Unlisted Local Subsidiaries (13)
Unlisted Local JVs, Associates & Investments (01)
Trust / Foundation / Non-Profit Companies (01)

International Unlisted Subsidiaries (01)

International Unlisted Associates & Investments (01)
Total Entities - 22
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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

The year commenced with a multitude of economic pressures, however; second half
brought forth early signs of improvement and economic recovery

1H 2023 – Looming default threat leading 2H 2023 – Signs of improvement

to stringent GoP measures and economic recovery

IMF bail out package secured improving the reserves

Low forex reserves and pressure on external account
position resulting in currency appreciation

Monetary tightening by GoP to curb inflation impacted Interest rates remained at elevated levels without further
levered businesses increase

Cost pressures due to high inflation Inflation eased on the back of monetary tightening

Business Continuity Risk due to import restrictions Easing of import restrictions eliminating business
continuity risk
Austerity measures by the GoP to secure IMF bailout
package - increase in super tax Demand recovery for elastic goods
Depressed domestic demand of products
Brain drain, however, continued to impact the economy and
Political and economic uncertainty increased brain drain the corporations
from the country (73% increase in 2 years)

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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Key Group Achievements during 2023

Despite facing challenges on the back of macro headwinds, the Group’s resilience enabled it to achieve its targets

Performance Excellence Capital Allocation Awards & Recognition

• Highest ever urea sales by efficient plant • Completed buyback of 39.5Mn shares • Engro companies received PSX top 25
operations companies award
• Tower footprint expanded to 3,952 sites,
• Value added fertilizers yielding returns → capturing 56% of the ITC market. • Engro was awarded the 2nd most preferred
63% increase in sales of Zabardast urea employer
• Evaluating to execute the proposed
• Highest ever export sale by polymer USD divestment of the thermal energy assets • 3 Asia Money Awards – Outstanding
26Mn (details ahead) company in Pakistan - Industrial Sector, Small /
mid-caps sector & ESG in Pakistan
• Contributed 15% towards gas supply of
Country • Runner up for best Investor Relations &
Winner for Gender Diversity at the CFA
• Contributed 4,481 GWH to the national grid Awards

• FZE traded with 40+ Countries and dealing (Details ahead)

with 30+ products

• Group achieved import substitution of USD

1.3Bn

• FCEPL achieved a record-breaking topline of

PKR 100 billion

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 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Financial Highlights – FY 2023

Highlights
Before remeasurement impact of thermal energy assets
Consolidated
Profitability* EPS Higher adjusted profitability is attributable to:

PKR 34 bn PKR 63.01 • Higher urea sales

41% vs LY vs. 42.23 LY • Efficient plant operations throughout the year
Consolidated Revenue • Higher earnings from dollar denominated
Financial businesses
Highlights PKR 482 bn
35% vs LY After remeasurement impact of thermal energy assets • Efficiencies derived through cost optimization

EPS Standalone
Profitability*
Lower profitability mainly due to:
PKR 21 bn PKR 38.60
14% vs LY vs. 42.23 LY • Additional super tax on dividends
• Lower interest income due to higher dividends
declared

Proposed Divestment of Thermal Energy Assets

Dividend & Royalty Income Profitability EPS
Standalone The Company is evaluating to execute the proposed
Financial PKR 23.8 bn PKR 17.6 bn PKR 32.26 divestment of the Company’s thermal energy assets,
Highlights 1% vs LY 17% vs LY PKR. 36.79 LY
• Accounting impact of PKR 13Bn (Owners’ share)
recognized in consolidated financial statements
due to remeasurement of thermal assets.
(Details ahead)
www.engro.com * Owners’ Share 7
FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Portfolio Performance – Petrochemicals

Company KPI Highlights

• Highest ever production and sales achieved (incl. Zabardast Urea)

Engro Fertilizers Limited
Revenue 224bn • Ensured availability of urea to farmers at a discount of 40% over int. prices
PKR. 43% vs LY
• Business enabled import substitution of ~USD 800Mn
Profitability 26.2bn
PKR. 64% vs LY Outlook

Urea Volumes 2,327KT • Urea demand likely to remain stable in 2024

(KT) 21% vs LY
• Phosphates demand is expected to pick up on account of better farm
economics

• Economic slowdown resulted in lower domestic demand, however we

Engro Polymers Limited continued to sustain our PVC market share at 89%
Revenue 81bn
PKR. At par vs LY • Despite challenges in domestic market, EPCL delivered strong performance
and achieved highest-ever export volumes of 44 KT (USD 26Mn)
Profitability 8.9bn Outlook
PKR. 24% vs LY
• PVC domestic demand likely to pick up in 2024
Export Sales 44KT
vs. 24KT LY • Exploring avenues for alternate energy sources

• H2O2 and HTDC project COD is expected in 1H 2024

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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Portfolio Performance – Terminals & Connectivity

Company KPI Highlights

Engro Elengy & Vopak • Lower chemical handled due to disruption in operations of key customers
Chemical 952KT owing to import restrictions and gas curtailment
handled 28% vs LY
• Lower LPG market share on the back of higher SSGC captive imports
LPG Market 37% • The LNG terminal handled 73 cargoes this year with availability over 95%
Share vs. 38% LY
• Profitability remains strong driven by dollar denominated earnings
% of total gas
demand 13% - 15% Outlook
• Considering ease in imports, chemical handling likely to normalize

Engro Enfrashare Limited • Captured 64% of the ITC colocations market

Operational Sites 3,952 • Tower footprint increased by adding 623 towers, of which 519 were B2S,
19% vs LY achieve a market share of 57% in the ITC market
Outlook

Tenancy Ratio 1.21x • Incentivize colocation to enable better coverage across Pakistan
vs. 1.17x LY
• Interest rates may continue to challenge in shorter term

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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Portfolio Performance – Energy & FZE (Trading)

Company KPI Highlights

Engro Energy Limited • EPQL higher profitability attributable to efficient plant operations and higher
Mine Capacity 7.6 interest income.
(MT) vs 3.8 LY
• EPQL Generation License approved to include gas from Badar field as
an alternate fuel.
EPQL
Profitability 2.6bn • EPTL successfully achieved first major type A maintenance
1.7x vs LY
PKR. • Post Expansion to 7.6MT, mining operations continued smoothly
• SECMC successfully completed Phase I PCD and declared first ever
Dispatch 4,481 dividend – total dividend declared PKR 11Bn.
GWH vs 4,458 LY
Outlook
• Mine expansion to 11.4MT by end of 2024

Engro Eximp FZE

• In its first full year operations, FZE traded with 40+ Countries and dealing with
Revenue 30+ products
(USD Mn) 406
• Successfully executed highest third-party trade USD 54Mn

Total trade Outlook

Volume 667 • Continue to expand our footprint in the Global Trade Market.
(KT)
• Actively pursuing opportunities in the non-captive space

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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Portfolio Performance – Foods

Company KPI Highlights

FrieslandCampina Engro
• Despite challenging macroeconomic landscape - achieved a record-breaking
Revenue 100bn topline of PKR 100 billion
PKR. 36% vs LY • Decline in profitability is mainly due to higher interest cost
Outlook
Profitability 1.5bn • Driving efficiencies across the value chain to deliver growth in challenging
PKR. -39% vs. LY macro environment.
• Investing in brand equity, conversion to packaged milk and expanding our
product portfolio will remain a priority.

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FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Proposed Divestment from Thermal Energy Assets

Material Information Remeasurement of Thermal Energy Assets

Company is evaluating the proposed divestment via SPA of A. Consolidated Financials
the Company’s thermal energy assets, comprising:
Remeasurement impact of PKR 30 billion (Owners’ share:
1. Engro Powergen Qadirpur Limited
PKR 13 billion) has reduced the consolidated profitability
2. Engro Powergen Thar (Pvt.) Limited
Due to the higher net assets of thermal energy assets
3. Sindh Engro Coal Mining Company Limited
compared to the recoverable amounts

→ No Cashflow Impact of this accounting treatment

Accounting for IPPs

B. Standalone Financials
Based on the accounting principles that govern IPPs:
No impact has been recognized → the recoverable
• Debt component recovered from CPPA-G as part of tariff is
amount of thermal energy assets is significantly higher
recorded in revenue over the life of the loan (10 years).
than their carrying amount
However, the corresponding depreciation expense is
recorded over the term of Power Purchase Agreement (30 → Gain will be recognized in standalone financials of
years). energy upon realization of the transaction
• Resulting in higher net assets in the consolidated financial
statements

Back: Performance snapshot

www.engro.com 12
 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Awards and Recognition (1/4)

December 22, 2023 Environment Health & Safety Award (finalist) at Safety Culture Award (Business Awards UK)

Engro Corporation and its subsidiaries Engro Fertilizers, Engro Polymer & Chemicals and Engro Powergen Qadirpur, were presented the
December 21, 2023
During 2023, prestigious Pakistan Stock Exchange Top 25 Companies awards by the caretaker Honourable Prime Minister Mr. Anwaar ul Haq Kakar

Engro Group November 22, 2023 Sindh Engro Coal Mining Company wins the ‘National Energy Globe Award 2022’ for Thar Million Tree (TMT) Project

secured November 13, 2023 5 years of providing accessible and affordable connectivity across Pakistan.

awards from October 17, 2023 Best Corporate and Sustainability Report Award for 2022

October 16, 2023 E-commerce Manufacturing Excellence Award at Asian Technology Excellence Awards 2023
local / global
October 13, 2023 ECORP PSX Top 25 Companies Award for 4th consecutive year
bodies in
October 13, 2023 EFERT PSX Top 25 Companies Award for 5th consecutive year
recognition of
October 13, 2023 EPCL PSX Top 25 Companies Award for 3rd consecutive year
the company’s
October 13, 2023 EPQL PSX Top 25 Companies Award for the first time
value delivery October 11, 2023 Award for best place to work in Pakistan by the Pakistan Society of Human Resource management (PSHRM)
across October 11, 2023 Most Preferred Employer (Manufacturing sector) at Best Place to Work Pakistan Awards 2023
multiple Amir S Chinoy Corporate Excellence Award at Management Association of Pakistan’s 38th Corporate Excellence Awards for 4th
October 9, 2023
avenues consecutive year

Engro Fertilizers has been recognized as the runner-up for the 'Best Overall Safety Program and Culture' at the EHS Daily Advisor-US
September 20, 2023 Safety Standout Awards 2023

September 20, 2023 Runner-up for Best Overall Safety Program & Culture’ at EHS Daily Advisor – US Safety Standout Awards 2023.

Awards & Recognition: Click here for more details

www.engro.com 13
 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Awards and Recognition (2/4)

September 7, 2023 Engro Corporation wins 'Most Outstanding Company in Pakistan' in Industrials Sector for 5th consecutive year.
September 7, 2023 Engro Corporation wins 'Most Outstanding Company in Pakistan' in Small/ Mid-Caps Sector for 2nd consecutive year.
During 2023, September 7, 2023 Engro Corporation wins 'Best for ESG in Pakistan'

Engro Group September 6, 2023

Engro was recognized in three categories at the prestigious Asiamoney 2023 - Asia's Outstanding Companies Poll Awards. Declared the
inaugural winner of the 'Best for ESG in Pakistan' award, 'Most Outstanding Company in Pakistan' in the industrial sector for the fifth
secured consecutive year, and top spot in the Small/Mid-Caps Sector for the second consecutive year.

awards from Most Outstanding Company (Industrial sector) in Pakistan at Asiamoney 2023 Asia's Outstanding Companies Poll Awards for 5th
September 6, 2023 consecutive year.

local / global September 6, 2023 Inaugural Best for ESG in Pakistan Award at Asiamoney 2023 Asia's Outstanding Companies Poll Awards
bodies in September 6, 2023 Top spot (Small/Mid-Caps sector) at Asiamoney 2023 Asia's Outstanding Companies Poll Awards for 2nd consecutive year
Sindh Engro Coal Mining Company wins the prestigious ’75 Leadership Development Awards’ for its exemplary efforts and outstanding
recognition of August 29, 2023 services in the socioeconomic development of Pakistan.
the company’s August 29, 2023 Engro Energy Recognized for its commitment towards shared prosperity by the Government of Pakistan
value delivery August 25, 2023 China-Pakistan Economic Corridor (CPEC) Award for outstanding contributions to Sino-Pak economic partnership
across August 25, 2023 Recognized by Govt of Pakistan for commitment towards shared prosperity. China Pakistan Economic Corridor Award (CPEC)
3rd position at Employer of Choice at Gender Diversity Awards 2023 by International Finance Corporation (IFC) and International Business
multiple August 16, 2023 Council (IBC) for 2nd consecutive year

avenues Engro Fertilizers Manufacturing & E-Logistics Division has been recognized with two RoSPA Gold Awards in the 'HSE and Fleet Safety
August 11, 2023 categories' for the third consecutive year.

August 11, 2023 RoSPA Gold and RoSPA Fleet Gold awards (Manufacturing and E-logistics divisions respectively) for 3rd consecutive year
Engro Fertilizers wins ‘Employer of Choice’ at Gender Diversity Awards 2023 by International Finance Corporation (IFC) & Pakistan
August 10, 2023 Business Council

Awards & Recognition: Click here for more details

www.engro.com 14
 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Awards and Recognition (3/4)

August 9, 2023 Account Response Rate Leader Award from Customer Gauge Survey for 2022
August 9, 2023 Best Presented Annual Report at South Asian Federation of Accountants (SAFA) Awards
During 2023, August 9, 2023 3 CSR Awards at 11th Annual CSR Summit & Awards

Engro Group August 9, 2023 Best Corporate Report Award by ICAP and ICMA Pakistan

secured August 9, 2023 Top 10 Best Practice Case Studies Award by ILO United Nations Project on Women Empowerment
August 9, 2023 AA long-term rating and A1+ short-term rating (PACRA upgradation)
awards from
Engro Fertilizers Manufacturing & E-Logistics divisions win ‘RoSPA Gold’ & ‘RoSPA Fleet Gold’ Awards respectively for the third
local / global August 4, 2023 consecutive year

bodies in June 14, 2023 Engro Polymer & Chemicals wins the 'Account Response Rate Leader' award from Customer Gauge survey for 2022.
June 7, 2023 Award by National University of Sciences & Technology (NUST) for highest number of technical internships in last 5 years
recognition of
May 24, 2023 Divisions Sustainability Awards and the top NPS award
the company’s May 24, 2023 Team of the year 2021 Award
value delivery May 24, 2023 Environment Excellence Award 2021
across May 24, 2023 Outstanding Excellence Awards
May 24, 2023 Highest Response Rate
multiple
May 24, 2023 Highest NPS Award
avenues May 24, 2023 Highest EBITDA margin
May 24, 2023 LNG divisions best SHE performance award
May 24, 2023 Best NPS third parties Award
May 24, 2023 Shortlisted for annual HSC Award

Awards & Recognition: Click here for more details

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 FY 2023 Analyst Briefing Overview Pakistan Economy Achievements Performance Awards & Sustainability

Awards and Recognition (4/4)

April 28, 2023 ISO/IEC – 17025 lab accreditations (Zarkhez plant)

April 28, 2023 Engro Powergen Thar Limited received ISO 50001 certification for Energy Management
During 2023, April 28, 2023 Engro Powergen Thar Limited Wins at 'International Safety Award 2023' with Distinction
Engro Group
April 27, 2023 Vopak Energy divisions best SHE performing awards. Vopak Asia Middle East (AME)
secured
awards from April 6, 2023 Engro Polymer & Chemicals Wins ‘Diversity Award’ at BIZNET 2023 presented by President of Pakistan Dr. Arif Alvi

local / global March 30, 2023 Engro Powergen Qadirpur Limited achieves '10 Million Safe Man-hours' without lost workday injury - A remarkable safety milestone

bodies in March 28, 2023 13 Global Diversity, Equity & Inclusion Benchmark (GDEIB) Awards by HR Metrics.
recognition of
March 13, 2023 Engro secures second prize in the ‘National Enterprises category’ at the Business Sustainability Awards 2022 by UNGC Pakistan
the company’s
March 9, 2023 2nd position (National Enterprises) at Business Sustainability Awards 2022 by UNGC Pakistan
value delivery Women Leaders Development Award at the overseas investors chamber of commerce and industry’s (OICCI) 5TH women empowerment
February 17, 2023 awards 2023
across
February 11, 2023 Engro Polymer & Chemicals wins ‘Best presented annual report’ at Safa Awards
multiple
February 10, 2023 Outstanding 92% ranking in NEPRA Annual HSE Rating.
avenues
January 16, 2023 Gold Award (Integrated Reporting) by South Asian Federation of Accountants (SAFA)

January 6, 2023 Engro Powergen Thar Limited gets 5s system certified

January 5, 2023 Engro Fertilizer wins 'Joint Gold' in the category of 'Integrated Reporting' at the SAFA Awards

Awards & Recognition: Click here for more details

www.engro.com 16
 FY 2023 Analyst Briefing Macroeconomic update
Overview Business Resilience
Pakistan EconomyPerformanceAchievements
& Outlook Investment Initiatives
Performance Awards & Sustainability
Awards & Sustainability

Sustainability Initiatives
Environment

Water Biodiversity Emissions & Energy Waste Climate Action

Society

Agriculture and Food Education & Skills Livelihood & Capacity Healthcare & ‘I am The Change impact
Security Development Building Infrastructure Award’
Our People and
Business

Employee Wellbeing and Diversity Equity & Governance and Business Performance and
Health & Safety Inclusion
Benefits Compliance Technology

Sustainability Initiatives: Click here for more details

www.engro.com 17
Session
 Contact for Investor Relations
Tariq Anis, General Manager Investor Relations
Engro Corporation Limited
8th Floor, The Harbour Front Building, HC # 3
Marine Drive, Block 4, Clifton, Karachi, Pakistan
Email: [email protected]
UAN +92-21-111-211-211

Company Profile: Click here