ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q4 2013 Earnings Presentation
46 slides from ORLEN Spolka Akcyjna's earnings presentation, Jan 24, 2014
Slide 1: PKN ORLEN consolidated financial results 4Q13
PKN ORLEN consolidated financial results 4Q13 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 24 January 2014 1
Slide 2: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 2
Slide 3: Key highlights 2013
Key highlights 2013 Shareholders Value creation Dividend payment: PLN 642 m, i.e. PLN 1,5 per 1 share Acquisition of TriOil (Canadian upstream company) Dividend yield: 3,8% based on average PKN ORLEN share Contracts with Rosneft for crude oil delivery to Plock and price in 2012 Unipetrol Signigfican
Slide 4: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 4
Slide 5: Macro environment in 4Q13 (y/y)
Macro environment in 4Q13 (y/y) Crude oil price decrease Refining margin and B/U differential decrease Average Brent Crude Oil price, USD/bbl Model refining margin and Brent/Ural differential, USD/bbl 140 differential margin - 1 USD/bbl 117 119 7,0 - 3,4 USD/bbl 120 113 109 108 110 110 113 110 109 1
Slide 6: Signs of fuel consumption increase
Sings of fuel consumption increase GDP increase1 Fuel consumption (diesel, gasoline)2 Change (%) to respective quarter of last year mt 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 4Q13 4Q12 4Q13 - 2% - 2% 2,86 2,79 0,8 1,9 1,6÷2,5 0,93 0,91 0,7 0,5 Poland + 4% + 1% 8,23 8,55 1,1 1,2÷1,7 4,51 4,54 0,0 0,9 Germany -
Slide 7: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 7
Slide 8: Financial results in 2013
Financial results in 2013 4Q12 3Q13 4Q13 PLN m 12M12 12M13 - 11% - 5% Revenues: decrease by (-) 5% (y/y) due to lower crude 31 245 30 392 120 102 113 853 oil prices by (-) 3% and strengthening of PLN against 27 678 USD by (-) 3% Revenues + 0,3 mld - 1,3 mld EBITDA LIFO: decrease by PLN (-) 1,3 bn (y
Slide 9: EBITDA LIFO PLN 0,6 bn in 4Q13 due to strong retail
EBITDA LIFO PLN 0,6 bn in 4Q13 due to strong retail Segments’ results in 4Q13 Negative impact of: PLN m 420 Record-low refining margins, strengthening of PLN against USD -14 and worsening of petchem products’ margins (y/y) 605 -176 Maintenance shutdowns: BOP (Polyethylene), Unipetrol (Olefins) 324 o
Slide 10: Refining – EBITDA LIFO
Refining – EBITDA LIFO Worsening of result (y/y) mainly due to record low margins EBITDA LIFO quarterly (without impairments*) PLN m 996 + 1.000 930 Higher sales in Poland (y/y) 843 800 716 Improvement of fuel yields in all refineries (y/y) 574 575 600 458 462 Others in the amount of PLN 0,6 bn main
Slide 11: Refining – operational data
Refining – operational data Fuel yields improvement at lower crude throughput in 4Q13 by (-) 5% Sales volumes Utilisation ratio mt % PKN ORLEN Unipetrol ORLEN Lietuva 7 - 4% 100 98 98 97 6,3 6,3 6,2 6,1 6,0 6,1 5,9 5,9 97 92 6 5,7 5,5 5,6 5,5 89 5,2 5,1 5,1 86 5 4,7 83 86 80 80 80 80 81 4 2Q10 4Q10
Slide 12: Retail – EBITDA LIFO
Retail – EBITDA LIFO Better result (y/y) mainly due to higher fuel margins EBITDA LIFO quarterly (without impairments*) PLN m + 500 450 Higher fuel margins in Polish, Czech and Lithuanian 388 markets offset lower profitability in German market 369 400 341 360 324 (y/y) 295 306 300 269 264 Higher fue
Slide 13: Retail – operational data
Retail – operational data Comparable sales (y/y). Increase of Stop Cafe and Bistro Cafe by 234 (y/y) Sales volumes Number of petrol stations and market shares (by volume) mt #, % 3 # stations ∆ y/y % market ∆ y/y 0% PL 1 778 11 35,4% 0,7pp 2,0 1,9 2,0 2,1 1,9 1,9 1,9 1,9 1,9 2 1,8 1,8 1,8 CZ 338 0 1
Slide 14: Petrochemicals – EBITDA LIFO
Petrochemicals – EBITDA LIFO Lower result (y/y) due to worsening margins on petrochemical products EBITDA LIFO quarterly (without impairments*) PLN m 694 678 + 700 667 Weakening of average PLN against EUR by 8gr to 600 580 4,19 EUR/PLN (y/y) 531 506 491 500 470 Higher sales of fertilizers in Poland,
Slide 15: Petrochemicals – operational data
Petrochemicals – operational data Comparable sales (y/y) despite unplanned polyethylene unit shutdown Sales volumes PTA sales volumes mt kt 1,5 0% 1,4 1,4 1,3 1,3 1,3 1,3 1,3 1,2 1,2 1,2 1,2 1,2 1,2 1,2 1,2 137 134 146 139 109 157 125 1,1 1,0 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 4Q12 1Q13 2Q13 3Q
Slide 16: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 16
Slide 17: CAPEX PLN 3 bn in 2013
CAPEX PLN 3 bn in 2013 CAPEX 12M13 – split by segment CAPEX 12M13 – split by growth and maintenance/regulatory PLN m mln PLN 839 138 3044 3044 Upstream 304 526 130 Growth 1580 Upstream 467 Downstream 535 (TriOil) 944 603 Maintenance/ 1464 138 Regulatory Energy Refining Retail Petchem Corporate Upstr
Slide 18: Upstream – organic projects in Poland
Upstream Organic projects – in Poland 1 Unconventional projects (shale gas and closed gas) PROJECT PROJECT KAMBR KAMBR 10 exploration concessions / 9 th km2 9 wells finished, including: 7 vertical and 2 horizontal as well as 2 fracking Lublin Shale In 4Q13 works on second fracking on Lubartow conces
Slide 19: Upstream M&A – acquisition of TriOil in Canada
Upstream M&A – acquisition of TriOil in Canada Transaction Assets On 12 November 2013 shareholders on TriOil Meeting accepted by a Assets portfolio concentrated in the Canadian province of Alberta covering majority of votes the shares purchase transaction, which was formally 3 areas - Lochend, Kaybo
Slide 20: Energy – projects' realization
Energy Projects’ realization Strategic assumptions Building a CCGT plant in Wloclawek (463 MWe) Concentration on industrial cogeneration – projects with the highest In 4Q13 continuation of ground and foundation works on site i.e. – boiler profitability / the lowest risk, among others, thanks to guar
Slide 21: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 21
Slide 22: Cash flow
Cash flow PLN 5,7 bn of inflows from operations in 2013 Cash flow from operations Cash flow from investments PLN bn PLN bn Working capital decrease by PLN 1,3 bn 1,2 1,3 1,5 0,2 -1,2 -1,3 Net inflow Decrease of Decrease of Decrease of Net inflow -1,6 -0,3 before inventories receivables payables from
Slide 23: Debt – safe financial conditions
Debt Safe financial conditions Net debt and gearing Covenant – net debt/EBITDA below 3,5 PLN bn, % Financial gearing, % Net debt/EBITDA LIFO Net debt/EBITDA 2,4 2,35 26,9 24,4 22,1 2,2 2,12 17,8 16,9 2,0 1,86 1,85 1,8 1,65 8,6 1,58 6,8 1,6 5,2 4,8 1,65 4,6 1,4 1,52 1,41 1,46 1,2 4Q12 1Q13 2Q13 3Q13
Slide 24: Agenda
Agenda Key highlights 2013 Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2014 24
Slide 25: Outlook 2014 – external environment
Outlook 2014 – external environment Macro - assumptions GDP growth Brent crude oil price – comparable average level to 2013 GDP - in 2013 Polish economy is estimated to increase by 1.3 percent, in 2014 will speed up to 2,9 percent and in 2015 will reach 3,3 percent – NBP, October 2013 Refining margi
Slide 26: Outlook 2014 – PLN 3,8 bn CAPEX
Outlook 2014 – PLN 3,8 bn CAPEX CAPEX – split by growth and maintenance/regulatory Main projects in 2014 % Refining Continuation of building Flue Gas Desulphurization and Installation of Catalytic Denitrification (maintenance/regulatory) Upstream Retail 24% Growth 53% 5,8 Increasing # of fuel statio
Slide 27: Outlook 2014 – summary
Outlook 2014 – summary We expect moderate GDP and consumption growth We are prepared for the next challenging year in refining We will further strengthen our focus on: operational excellence cash generation strategic directions 27
Slide 28: Thank You for Your attention
Thank You for Your attention www.orlen.pl For more information on PKN ORLEN, please contact Investor Relations Department: phone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: ir@orlen.pl 28
Slide 29: Supporting slides
Agenda Supporting slides 29
Slide 30: Results – split by quarters
Results – split by quarters (PLN, m) 4Q13 3Q13 4Q12 ∆ y/y 12M13 12M12 ∆ Revenues 27 678 30 392 31 245 -11% 113 853 120 102 -5% EBITDA LIFO 605 796 352 72% 3 171 4 459 -29% Effect LIFO -538 362 -513 -5% -668 -175 -282% EBITDA 67 1 158 -161 - 2 503 4 284 -42% Depreciation -556 -541 -577 -4% -2 170 -2
Slide 31: Results – split by segments
Results – split by segments 4Q13 (PLN, m) Refining Retail Petrochemicals Upstream Corporate functions Total EBITDA LIFO 51 324 420 -14 -176 605 Effect LIFO -535 0 -3 0 0 -538 EBITDA -484 324 417 -14 -176 67 Depreciation -243 -89 -188 -4 -32 -556 EBIT -727 235 229 -18 -208 -489 EBIT LIFO -192 235 232
Slide 32: EBITDA LIFO – split by segments
EBITDA LIFO - split by segments (PLN, m) 4Q13 3Q13 4Q12 ∆ y/y 12M13 12M12 ∆ Refining 51 52 -113 - 466 2 121 -78% Refining - LIFO effect -535 328 -487 -10% -688 -154 -347% Retail 324 450 190 71% 1 268 1 006 26% Petrochemicals 420 399 470 -11% 2 028 1 967 3% Petrochemicals - LIFO effect -3 34 -26 88%
Slide 33: Results 4Q13 – split by companies
Results 4Q13 - split by companies Others and IFRS ORLEN consolidation PLN, m PKN ORLEN S.A. Unipetrol 2) Lietuva 2) corrections Total Revenues 20 141 3 934 5 937 -2 334 27 678 EBITDA LIFO 629 38 -140 78 605 Effect LIFO 1) -507 -3 -29 1 -538 EBITDA 122 35 -169 79 67 Depreciation 264 98 91 103 556 EBI
Slide 34: EBITDA LIFO in 4Q13 – split by segments and companies
EBITDA LIFO in 4Q13 – split by segments and companies Others and IFRS consolidation PLN, m PKN ORLEN S.A. Unipetrol 4) ORLEN Lietuva 4) corrections Total Refining 1) 250 -64 -96 -39 51 Retail 266 28 1 29 324 Petrochemicals 2) 242 81 0 97 420 Upstream -16 0 0 2 -14 Corporate functions 3) -113 -7 -45
Slide 35: ORLEN Lietuva Group – profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account 1 IFRS, USD m 4Q13 3Q13 4Q12 ∆ y/y 12M13 12M12 ∆ Revenues 1 932 2 142 2 360 -18% 8 054 8 051 0% EBITDA LIFO -48 -4 52 - -9 180 - EBITDA -57 13 39 - -23 177 - EBIT -75 -6 21 - -95 114 - Net result -65 -5 37 - -94 80 - EBITDA LIFO in 4Q13
Slide 36: UNIPETROL Group – profit and loss account
UNIPETROL Group Key elements of the profit and loss account 1 IFRS, CZK m 4Q13 3Q13 4Q12 ∆ y/y 12M13 12M12 ∆ Revenues 25,070 24,859 26,260 -5% 99,415 107,160 -7% EBITDA LIFO 252 235 -3,170 - 1,589 -599 - EBITDA 246 737 -3,500 - 1,522 -1,012 - EBIT -396 160 -4,185 91% -893 -3,819 77% Net result -690
Slide 37: Macro environment in 2013
Macro environment in 2013 14 2012 average 2013 2013 average 2012 12 ORLEN Group model refining margin 10 8 5,7 USD/bbl 6 4 3,4 USD/bbl 2 0 -2 January February March April May June July August September October November December 4 2012 average 2013 2013 average 2012 Brent/Ural differential 3 2 1,3 US
Slide 38: Macro environment in 1Q14 (q/q)
Macro environment in 1Q14 (q/q) Crude oil price decrease Refining margin and B/U differential increase Average Brent Crude Oil price, USD/bbl Model refining margin and Brent/Ural differential, USD/bbl - 1 USD/bbl differential margin 113 110 110 109 5,8 6,0 108 5,5 0,7 102 1,1 1,7 + 0,3 USD/bbl 3,5 0
Slide 39: Macro environment in 2014
Macro environment in 2014 10 2013 average 2014 2014 average 2013 ORLEN Group model refining margin 8 6 4 3,4 USD/bbl 2 0,5 USD/bbl 0 -2 January February March April May June July August September October November December 4 2013 average 2014 2014 average 2013 Brent/Ural differential 3 2 1,9 USD/bbl
Slide 40: Model refining margin + B/U diff – historical data
Model refining margin + B/U diff – historical data Model refining margin + B/U diff - quarterly USD/bbl 11,4 9,7 9,5 8,9 9,1 6,5 6,5 6,5 5,8 6,0 5,5 5,4 5,5 4,8 4,4 4,6 4,0 4,3 3,6 3,4 3,1 3,5 2,9 2,1 1q’08 2q’08 3q’08 4q’08 1q’09 2q’09 3q’09 4q’09 1q’10 2q’10 3q’10 4q’10 1q’11 2q’11 3q’11 4q’11 1q’
Slide 41: Model refining margin and B/U diff – historical data
Model refining margin and B/U diff – historical data Model refining margin - quarterly B/U diff - quarterly USD/bbl USD/bbl 8,4 7,7 7,0 7,1 6,8 5,3 5,3 4,6 4,7 4,4 4,4 4,0 4,1 3,6 3,3 3,1 3,1 3,3 3,3 2,9 2,9 2,9 2,7 2,8 2,6 2,2 2,1 1,8 1,8 1,7 1,5 1,4 1,4 1,5 1,3 1,4 1,2 1,1 0,7 0,9 0,7 0,9 0,7 0,7
Slide 42: Maintenance shutdowns of key installations in 2013
Maintenance shutdowns of key installations in 2013 Q1’13 Q2’13 Q3’13 Q4’13 CDU III FCC Hydrocracker H-Oil HDS VI / HDS VII HON VI Hydrogen / Recovery Unit Olefin Unit (S.C.) PX/PTA BOP - PE Anwil Agro Reforming HDS VBU Litvinov – NHC / VBU VBU Litvinov - petrochemicals Kralupy - HDS Kralupy - FCC CD
Slide 43: Production data
Production data 4Q13 3Q13 4Q12 ∆ (y/y) ∆ (q/q) 12M13 12M12 ∆ Total crude oil throughput in PKN ORLEN 7 088 7 461 7 491 -5% -5% 28 215 27 939 1% Utilization in PKN ORLEN 91% 96% 97% -6 pp -5 pp 91% 90% 1 pp Refinery in Poland 1 Processed crude (tt) 3 947 4 095 3 940 0% -4% 15 182 15 191 0% Utilizatio
Slide 44: Dictionary
Dictionary PKN ORLEN model refining margin = revenues (93,5% Products = 36% Gasoline + 43% Diesel + 14,5% HHO) - costs (100% input: crude oil and other raw materials). Total input calculated acc. to Brent Crude quotations. Spot market quotations. Spread Ural Rdam vs fwd Brent Dtd = Med Strip - Ural
Slide 45: Disclaimer
Disclaimer This presentation (“Presentation”) has been prepared by PKN ORLEN S.A. (“PKN ORLEN” or “Company”). Neither the Presentation nor any copy hereof may be copied, distributed or delivered directly or indirectly to any person for any purpose without PKN ORLEN’s knowledge and consent. Copying,
Slide 46: www.orlen.pl
www.orlen.pl For more information on PKN ORLEN, please contact Investor Relations Department: phone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: ir@orlen.pl 46