MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2020 The following discussion and analysis of our financial condition and results of operations as of 31 December 2020 and for the year then ended (hereinafter referred to as “MD&A”) should be read in conjunction with our audited consolidated financial statements as of and for the year ended 31 December 2020 (hereinafter referred to as the “consolidated financial statements”). The audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial and operational information contained in this MD&A comprises information on PJSC SIBUR Holding and its consolidated subsidiaries (hereinafter jointly referred to as “we”, “SIBUR”, “Company” or the “Group”). SELECTED DATA(1) (3) (5) Operating Results The following table presents the Group’s key operational metrics for the years ended 31 December 2020 and 2019: Year ended 31 December Change Thousand tonnes, except as stated 2020 2019 % Processing and production volumes APG processing, SIBUR’s share(2) (million cubic metres) 21,225 22,617 (6.2%) NGLs purchasing 4,455 3,965 12.4% Raw NGL fractionation(3), SIBUR’s share 7,773 7,739 0.4% Sales volumes Petrochemical products, including: 5,149 3,767 36.7% Polyethylene (PE) 1,311 261 402.3% Polypropylene (PP) 1,118 737 51.7% Plastics and organic synthesis products 812 793 2.4% Elastomers 431 529 (18.5%) Intermediates and other chemicals 751 542 38.6% Midstream products, including: Natural gas (million cubic metres) 17,583 18,817 (6.6%) LPG 3,362 5,145 (34.7%) Naphtha 975 1,172 (16.8%) (1) In this and other tables of this MD&A, immaterial deviations in the calculation of percentage changes, subtotals and totals are explained by rounding. All the operational data is presented in line with segment reporting. (2) Excluding third-party volumes processed at SIBUR’s capacities. (3) Including volumes processed at third-party capacities and excluding third-party volumes processed at SIBUR’s capacities. 1 Financial Results The following table presents the Group's key financial metrics for the years ended 31 December 2020 and 2019: (1) Year ended 31 December Change RUB millions, except as stated 2020 2019 % Income statement highlights Revenue (net of VAT and export duties) 523,010 531,306 (1.6%) Adjusted EBITDA(1) 187,346 178,442 5.0% EBITDA 179,189 170,020 5.4% EBITDA margin, % 34.3% 32.0% EBITDA of reportable segments Olefins & Polyolefins 84,292 48,979 72.1% Plastics, Elastomers & Intermediates 18,263 19,511 (6.4%) Midstream 71,368 99,788 (28.5%) EBITDA (USD millions) 2,484 2,626 (5.4%) Adjusted EBITDA (USD millions) 2,597 2,756 (5.8%) Profit for the year 25,634 141,367 (81.9%) Adjusted profit(2) 93,006 93,406 (0.4%) Cash flow highlights Net cash from operating activities, including 176,346 124,468 41.7% Operating cash flows before working capital changes 172,184 168,472 2.2% Changes in working capital 11,980 (8,207) n/m Income tax paid (7,818) (35,797) (78.2%) Net cash used in investing activities, including (101,550) (125,555) (19.1%) Capital expenditures (112,886) (150,378) (24.9%) Net cash (used in)/from financing activities, including (66,229) 4,389 n/m Dividends paid to the Company's shareholders (33,460) (41,524) (19.4%) Net (repayment of) / proceeds from debt (10,544) 65,686 n/m (2) As of As of 31 December 2020 31 December 2019 Key ratios Net Debt/EBITDA 2.3x 2.1x Net Debt/EBITDA (in USD) 2.2x 2.2x In 2020, demand for crude oil fell sharply due to lower economic activity levels resulting from the COVID-19 pandemic and related restrictions. The price for Brent crude declined by 35.2% year-on-year and averaged USD 41.7 per barrel in the reporting period. International benchmarks for naphtha and LPG also fell but to a lesser extent, dropping 20% on weaker demand from key sales segments. Prices for petrochemical products also declined, largely driven by lower demand from global markets due to the restrictions caused by COVID-19, as well as capacity additions. The Russian ruble depreciated on average over the year by 10.3% and 12.1% against the US dollar and euro, respectively. In 2020, our associated petroleum gas (APG) processing volumes decreased by 6.2% year-on-year to 21.2 billion cubic metres from 22.6 billion cubic metres in 2019, primarily as a result of lower oil production by Russian oil companies to comply with the OPEC+ agreement. This also resulted in lower production volumes of LPG and naphtha. Our raw NGL fractionation volumes remained nearly unchanged at 7.8 million tonnes due to higher purchases of raw NGL. Sales volumes of petrochemical products increased by 36.7% year-on-year mainly due to the start of PE and PP production at ZapSibNeftekhim, partially offset by lower elastomers and MTBE sales following the divestment of the Company’s Togliatti-based assets. (1) Adjusted EBITDA includes the Group’s portion of EBITDA of joint ventures and associates and excludes the non-controlling interest portion of EBITDA of subsidiaries. (2) Adjusted profit equals profit for the year attributable to shareholders of the parent company adjusted for any foreign exchange gain/loss and one-off items including those resulting from disposals or acquisitions that are outside the scope of normal business activities and operations. 2 Revenue decreased by 1.6% year-on-year to RUB 523,010 million from RUB 531,306 million in 2019 due to lower revenue from our Midstream and our Plastics, Elastomers and Intermediates segments which both saw lower sales volumes and negative pricing dynamics. This was partly compensated by revenue growth in our Olefins and Polyolefins segment driven by a substantial increase in sales volumes following ZapSibNeftekhim ramp-up. EBITDA increased by 5.4% to RUB 179,189 million from RUB 170,020 million driven by higher sales volumes in the Olefins & Polyolefins segment and despite declines in both the Midstream segment, in which EBITDA declined by 28.5% due to lower external sales volumes and prices, and the Plastics, Elastomers and Intermediates segment, in which EBITDA fell by 6.4% primarily due to lower product prices. An additional factor that positively affected EBITDA was cost optimisation programme both in fixed and variable parts. Our net profit in 2020 decreased by 81.9% to RUB 25,634 million from RUB 141,367 million in 2019 primarily due to the depreciation of the Russian ruble vs the US dollar (and the resulting revaluation of our primarily dollar denominated debt) and also due to an increase in depreciation as ZapSibNeftekhim moved new capacities into operating mode during the year. As a result, our profit net of forex dynamics in 2020 decreased by 2.2% to RUB 99,272 million from RUB 101,486 million in 2019. Net cash from operating activities increased by 41.7% year-on-year on the back of higher EBITDA, a reduction in working capital and lower income tax paid. As of 31 December 2020, our total debt increased by 13.3% to RUB 430,148 million vs. RUB 379,739 million at 31 December 2019 mainly due to the effect of the Russian ruble’s depreciation on the value of our foreign currency denominated debt. Our net leverage (Net Debt/EBITDA) in ruble terms increased to 2.3x as of 31 December 2020 from 2.1x as compared to 2019 year-end, while in USD terms it remained flat at 2.2x. For a detailed discussion on SIBUR’s operational and financial performance, see “Results of Operations” and “Liquidity and Capital Resources”. 3 OVERVIEW With a uniquely positioned vertically integrated business model, SIBUR is Russia’s leading integrated petrochemicals company. More than 22,000 employees(1) working at SIBUR contribute to the success of its customers engaged in the chemical, fast-moving consumer goods (FMCG), automotive, construction, energy and other industries in 90 countries worldwide. SIBUR has three operating and reportable segments: Olefins & Polyolefins. Produces polyolefins, including polyethylene, polypropylene and BOPP- films, and olefins, including ethylene and propylene, at our production sites in Tobolsk, Tomsk and Kstovo, which are used primarily internally by our petrochemicals segments and also sold externally (primarily sales of ethylene to RusVinyl). Plastics, Elastomers & Intermediates. Produces a variety of petrochemical products, such as (i) plastics and organic synthesis products comprising polyethylene terephthalate (PET), glycols, expandable polystyrene, alcohols, acrylates and dioctyl terephthalate (DOTP), (ii) elastomers comprising various grades of commodity and specialty rubbers and thermoplastic elastomers, (iii) methyl tertiary butyl ether (MTBE) and fuel additives, which are sold externally. The segment also produces intermediates, which are primarily used internally with a minor share being sold to the market. Midstream. This segment comprises (i) gathering and processing of associated petroleum gas (APG) that we purchase from major Russian oil companies, (ii) transportation, fractionation and other processing of natural gas liquids (NGLs) that we produce internally or purchase from major Russian oil and gas companies, and (iii) production, marketing and sales of energy products, such as natural gas, liquefied petroleum gases (LPG) and naphtha. We sell these energy products on the Russian and international markets and use some of them as feedstock for our two petrochemicals segments above. (1) As of 31 December 2020, excluding the personnel of non-consolidated joint ventures. 4 RECENT DEVELOPMENTS Despite global market turmoil triggered by the outbreak of COVID-19 in early 2020 and the ensuing sharp drop in economic activity resulting from the pandemic and related quarantine measures, SIBUR developed and successfully implemented measures to mitigate the impact of the economic slowdown on its business, including cost cutting initiatives tactical trading and supply chain management, and prioritization and optimisation of its investment programme.