Slide 1: PGNiG Group results for H1 and Q2 2016
PGNiG Group results for H1 and Q2 2016 August 12th 2016
Slide 2: Agenda
1. Performance drivers 2. Financial highlights Q2 2016 3. Financial highlights H1 2016 Agenda 4. PGNiG Group EBITDA by segment 5. Segment performance Exploration and Production Trade and Storage Distribution Generation 6. Operating expenses 7. Efficiency Improvement Programme 8. Appendices
Slide 3: Performance drivers
Performance drivers Yoy appreciation of USD and EUR In Q2 2016, 9-month average of crude oil Marked impact of recent against PLN prices down 46% yoy and down 18% qoq periods' tariff reductions on 4,5 PLN 120 USD/bbl 4.37 gas selling prices; average regulated price down 16% yoy 4.09 +6.9% 100 and 8%
Slide 4: Financial highlights Q2 2016
Financial highlights Q2 2016 Solid year-on-year operating [PLNm] Q2 2015 Q2 2016 ∆% performance materially affected Revenue 7,895 6,369 (19%) by one-off events Operating expenses (excl. D&A) (6,225) (5,632) (10%) EBITDA 1,670 738 (56%) Depreciation and amortisation (723) (665) (8%) EBIT 947 73 (92%)
Slide 5: Financial highlights H1 2016
Financial highlights H1 2016 Major impact of falling [PLNm] H1 2015 H1 2016 ∆% commodity prices on operating Revenue 20,390 17,349 (15%) performance Operating expenses (excl. D&A) (16,394) (14,218) (13%) EBITDA 3,996 3,131 (22%) Depreciation and amortisation (1,387) (1,337) (4%) EBIT 2,609 1,794 (31
Slide 6: Business segments – EBITDA H1 2016
Business segments – EBITDA H1 2016 Exploration and Production Contribution to • Revenue from sales of oil and condensate [PLNm] H1 2015 H1 2016 ∆% Group's result down PLN 312m or 28% yoy. Exploration and Production 1,542 495 (68%) 16% • Effect of the PLN -680m impairment losses in H1 2016 vs PLN -16
Slide 7: Segments – Exploration and Production
Segments – Exploration and Production Recognition of impairment [PLNm] Q2 2015 Q2 2016 ∆% losses and adverse impact of low oil prices, aggravated by Revenue 1,316 1,093 (17%) lower sales volumes Operating expenses (excl. D&A) (652) (1,217) 87% EBITDA 664 (124) Depreciation and amortisation (378) (28
Slide 8: Segments – Trade and Storage (1/2)
Segments – Trade and Storage (1/2) 7% margin on E gas fuel, with [PLNm] Q2 2015 Q2 2016 ∆% operating margin on the product of -2% in Q2 2016 Revenue 6,634 5,264 (21%) Operating expenses (excl. D&A) (6,429) (5,154) (20%) EBITDA 205 110 (46%) Commentary: • Revenue from gas sales in Trade & Depreciatio
Slide 9: Segments – Trade and Storage (2/2)
Segments – Trade and Storage (2/2) PGNiG Group gas sales volumes down 0.1 bcm yoy in Q2 2016, with volumes First LNG deliveries to the of gas sold by PGNiG SA on the Polish Power Exchange broadly flat Świnoujście terminal in June bcm 10 6.8 7.7 8 2016 6.5 7,5 4.8 3.9 3.6 4.7 3.3 5 Commentary: • Gas
Slide 10: Segments – Distribution
Segments – Distribution Similar year-on-year [PLNm] Q2 2015 Q2 2016 ∆% performance reported by the segment, with stable Revenue 1,078 1,065 (1%) distribution volumes Operating expenses (excl. D&A) (381) (400) 5% EBITDA 697 665 (5%) Depreciation and amortisation (220) (230) 5% EBIT 477 435 (9%) Comme
Slide 11: Segments – Generation
Segments – Generation Weaker operating performance [PLNm] Q2 2015 Q2 2016 ∆% reported by the segment Revenue 343 381 11% Operating expenses (excl. D&A) (241) (293) 22% Commentary: EBITDA 102 88 (14%) • Begining of consolidation of PEC Jastrzębie. Depreciation and amortisation (78) (80) 3% • Stable r
Slide 12: Marked decrease in the cost of gas sold in Q2 2016
Marked decrease in the cost of gas sold in Q2 2016 Material effect of one-off [PLNm] Q2 2015 Q2 2016 ∆% events offset by a decrease in the cost of gas sold Fuels for heat and power generation (120) (105) (13%) Other raw materials and consumables used (347) (389) 12% Employee benefits expense (583) (
Slide 13: Efficiency Improvement Programme – almost PLN 1bn in savings by 2017
Efficiency Improvement Programme – almost PLN 1bn in savings by 2017 The Programme aims to Programme objectives: permanently reduce the • To set efficiency improvement targets for the individual segments and entities within manageable cost base across the PGNiG Group and to define related benefits t
Slide 14: Contact details
Contact details Release dates for periodic reports Aleksandra Dobosiewicz Department Head Phone: +48 22 589 46 71 Mobile: +48 665 004 847 Fax: +48 22 691 81 23 9 Email: aleksandra.dobosiewicz@pgnig.pl November Weronika Zając Q3 2016 report Investor Relations Specialist Phone: +48 22 589 46 51 Mobile
Slide 15: Appendices
Appendices: Changes on the Polish gas market Gas trading and retail sales Production and sales volumes Debt and sources of funding Statement of financial position, cash flow, financial ratios and headcount
Slide 16: Changes on the Polish gas market
Changes on the Polish gas market Gas market deregulation is Gas sales volume (mcm) Q2 2015 Q2 2016 ∆% affecting PGNiG's share in imports and sales structure Total PGNiG Group 4,803 4,738 (1%) Commentary: PGNiG SA 2,893 2,897 - • Since August 1st 2014, the PGNiG Group's gas sales volumes have include
Slide 17: Gas trading and retail sales after August 1st 2014
Gas trading and retail sales after August 1st 2014 Gas sold to key customers: above 25 mcm annually 4.6 bcm in 2014 4.3 bcm in 2015 Production Direct sales PGNiG SA 0.93 bcm in 2014 0.72 bcm in 2015 Gas purchase Polish Power Exchange 3.74 bcm in 2014 8.09 bcm in 2015 6.7m customers Polish Power Exch
Slide 18: Production and sales volumes
Production and sales volumes NATURAL GAS PRODUCTION, PGNiG Group (mcm) Q2 2016 Q1 2016 FY 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 FY 2014 Q4 2014 Q3 2014 Q2 2014 Q1 2014 HIGH-METHANE GAS (E) 487 509 2,031 508 515 507 501 1,876 440 475 482 479 including in Poland 349 359 1,458 369 359 362 367 1,457 368
Slide 19: Debt and sources of funding
Debt and sources of funding Sources of funding (as at June 30th 2016) Strong financial position PLNm 10000 available used 8000 6000 4000 8,500 2,000 3,100 2000 270 2,500 1,000 1,300 2,210 0 Guaranteed notes Domestic notes (2017) BGK programme (2024) Reserve based loan (2022) Eurobonds (programme (pr
Slide 20: Statement of financial position, cash flows, financial ratios and headcount
Statement of financial position, statement of cash flows, financial ratios and headcount Group's statement of financial position (as at June 30th 2016) Headcount (at year end) PLNm thousand 60 000 Other segments Generation Distribution Trade and Storage Exploration and Production 40 Non-current Curr