Tatneft-3 · RUS:TATN
Tatneft-3 — PJSC Tatneft — Investor Presentation (April 2018)
33 slides from Tatneft-3's investor presentation, April 2018
Slide 1: Presentation to Investors
Copyright © PJSC TATNEFT, 2018 PRESENTATION TO INVESTORS April 2018
Slide 2: Important Notice About Forward-Looking Statements and Disclaimer
IMPORTANT NOTICE ABOUT FORWARD-LOOKING STATEMENTS AND DISCLAIMER THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITH THESE RE
Slide 3: Key Facts, Pillars of Growth
KEY FACTS PILLARS OF GROWTH 3
Slide 4: Key Facts About Tatneft
KEY FACTS ABOUT TATNEFT • Vertically integrated oil company with high quality assets, efficient operations and sound strategy • 5th largest crude oil producer in Russia (approx. 5.3% of the country’s total in 2017), current production @ 561Mbbl/day (Feb 2018) • The largest public company in Tatarsta
Slide 5: Tatneft Growth Milestones
TATNEFT GROWTH MILESTONES 1948 1971 1981 1996 2007 2016 Discovery of First billionth tonne Second billionth tonne Tatneft GDRs offering, Third billionth tonne Strategy 2025 approved by Romashkinskoye oilfield, (>7 BB) of crude oil (14.2 BB) of crude oil listing on the London Stock (21.4 BB) of crude
Slide 6: Human Capital
HUMAN CAPITAL Human Capital is the foundation of the Company’s success Advanced competencies, Professional growth & personal Occupational health and safety talents development The Company’s commitment to be a fair employer is reflected in the high level of social guarantees provided for by the colle
Slide 7: Technological Capabilities
TECHNOLOGICAL CAPABILITIES The Company possesses the industry’s leading technologies and has vast experience in crude oil extraction, refining, and petrochemicals production – from the stage of project inception to optimization of processes in existing operations Aims of the Company’s Innovation Pol
Slide 8: Examples of Technologies Used in Oilfield Development and Crude Oil Production
EXAMPLES OF TECHNOLOGIES USED IN OILFIELD DEVELOPMENT AND CRUDE OIL PRODUCTION By using modern technologies and equipment, as well as through optimization of completions, Tatneft achieves increased efficiency and control over per-unit costs upon production Horizontal drilling Multilateral completion
Slide 9: Resource Base and Assets
RESOURCE BASE AND ASSETS Crude oil and condensate reserves, MBbls Consolidated Assets* (SPE-PRMS) (under IFRS/US GAAP, RR billion) 394,476 Proved Developed Producing 341 367 Proved Developed 298 339 2,518,154 3,510,967 Nonproducing 282 122 Proved Undeveloped 183 27 131 Probable 32 77 2017 24 2015 47
Slide 10: Operations, 2017 Results, Plans for 2018
OPERATIONS 2017 RESULTS PLANS FOR 2018 10
Slide 11: Crude Oil Production: 2017 Results and Plans for 2018
CRUDE OIL PRODUCTION: 2017 RESULTS AND PLANS FOR 2018 2017 crude oil production th. tonnes/year MBbl/day chg. to 2016 PJSC Tatneft Conventional oil 26,966 526 -1.9% 74,7 Highly viscous oil 76,2 76,7 1,620 32 92.2% тыс. тонн в тыс. тонн в тыс. тонн в день день день PJSC Tatneft Total 28,586 558 0.9%
Slide 12: Refined Products Output: 2017 Results and Plans for 2018
REFINED PRODUCTS OUTPUT: 2017 RESULTS AND PLANS FOR 2018 Refined products output at TANECO 2017, tonnes 2018*, tonnes Inputs: Crude oil 7,847,762 9,404,557 Vacuum gasoil from third parties 458,629 246,803 Auxiliary materials 381,026 533,132 Total raw materials 8,687,417 10,184,492 Refined 72,4 produ
Slide 13: Investments
INVESTMENTS Funds allocated towards investment program financing FY 2017, RR bn 74,7 2018 Forecast, RR bn (Dec 2017) 72,4 тыс. тыс. тонн в тонн в день день Production and Production and Development in Tatarstan Development in Tatarstan 8.3 Other P&D (incl. geological 8.7 Other P&D (incl. geological
Slide 14: 4Q 2017 and FY 2017 IFRS Results
4Q 2017 AND FY 2017 IFRS RESULTS 14
Slide 15: Key Financial Indicators
KEY FINANCIAL INDICATORS* Chg. %, Chg. %, 3Q 4Q (in RR bn) 2015 2016 2017 2017 / 4Q2017 / 2016 2017 2017 3Q2017 Sales, gross 657.4 665.1 772.7 16% 190.9 219.3 15% Export duties & excise (104.7) (84.9) (91.5) 8% (21.8) (24.3) 12% tax Revenue, net 552.7 580.1 681.2 17% 169.2 195.0 15% Costs and other
Slide 16: Revenue
REVENUE* Net Revenue on non-banking activities by product type - dynamics, RR bn 681.2 Other sales 4% 580.1 7% 552.7 Petrochemicals 4% 5% 8% 7% Refined products sales 35% 37% 39% Crude oil sales 4% 195.0 3% 51% 54% 169.2 49% 8% 8% 38% 38% 50% 51% 2015 2016 2017 3Q 2017 4Q 2017 * Revenue is presented
Slide 17: Costs
COSTS* Cost per barrel on non-banking activities breakdown**, RR/bbl 2,453 2,178 2,227 12% Other expenses 1,866 10% 14% 7% 1,747 8% 8% 10% Transportation expenses 11% 10% 11% 10% 8% 9% Selling, General and 13% 27% 13% 28% 28% Administrative expenses 30% 33% Operating expenses 43% 44% 40% Taxes other
Slide 18: Capex and Debt Profile
CAPEX AND DEBT PROFILE 2017 Additions to PPE by segments, IFRS, RR bn* Debt profile (at period ends), RR bn Exploration & Production 8.3 2.4 Short-term debt Refining & Marketing, 4.4 TANECO construction Long-term debt, net of current portion 70 36.2 Net Debt Refining & Marketing, 50 Other 30 Petroch
Slide 19: Strategy 2025
STRATEGY 2025 19
Slide 20: Strategy 2025: Oil Production
STRATEGY 2025: OIL PRODUCTION Tatneft Group’s oil production division aims for sustainable organic growth • Decreasing per-unit operating costs by 10% or more • Studying the feasibility of production growth provided by the existing resource endowment Production volumes, mln tonnes Key indicators Ind
Slide 21: Strategy 2025: Refining
STRATEGY 2025: REFINING • Completion of the TANECO project (full utilization rate of both first and second trains of the TANECO facilities) • Decreasing per-unit processing costs by 10% and more at Tatneft Group’s oil and gas processing entities (in real terms) • Development of highly marginal suppl
Slide 22: TANECO Configuration in 2023
TANECO CONFIGURATION IN 2023 IV quarter 2023 (projected) In operation Benzene (64 thous. t/y) Launch in 2017 Naphtha splitter Aromatic production Paraxylene (158 thous. t/y) Launch in 2018 Petrochemical Naphtha (330 thous. t/y) Launch in 2019 Naphtha HDT CCR Platforming Izomerization Launch in 1st t
Slide 23: Strategy 2025: Retail Business
STRATEGY 2025: RETAIL BUSINESS • Over 50% sales of the Company’s own gasoline and diesel fuel via proprietary retail network and wholesale • Unique selling proposition: updated brand-concept, improved quality of filling stations and service standards, modification to regional coverage Retail Network
Slide 24: Dividend Policy, Shareholding Structure
DIVIDEND POLICY SHAREHOLDING STRUCTURE 24
Slide 25: Dividend Policy and Shareholding Structure
DIVIDEND POLICY AND SHAREHOLDING STRUCTURE Dividend policy • Amendments to the Regulation on dividend policy have been approved by the Board of Directors • Concept of free cash flow not used for the Tatneft Group development and performance of obligations to be available for distribution in the form
Slide 26: Banking Segment
BANKING SEGMENT 26
Slide 27: Bank ZENIT
BANK ZENIT • A large banking group ranking top 40 • Tier 1 capital is RUB 33.5 bn, assets are RUB 265 bn • In 2017, Tatneft purchased new issue of shares increasing its equity stake in Bank Zenit to 71.9% • The bank's management team has been strengthened with new professionals to implement best mar
Slide 28: Bank ZENIT Strategy 2020
BANK ZENIT STRATEGY 2020 @rarnert \ {I BANK. willl ZENIT: ZENIT- BANKING GROUB Strategy: targets and priorities The Strategy has a goal to implement the key initiatives enabling the Bank to add value, grow business and client base and ensure profitability while improving the client-oriented approach
Slide 29: Bank ZENIT Strategy 2020
BANK ZENIT STRATEGY 2020 @rarnert . . . I Strategy: main goals and objectives atl PANT To build a universal Bank with a flexible To build a reliable risk management framework C3) approach to creating assets ) based on the best practices in international banking to support the aggressive plans of con
Slide 30: Bank ZENIT Strategy 2020
BANK ZENIT STRATEGY 2020 @atNEFT Financial targets of ZENIT Banking Group’s strategy* Net profit ROE at least RUB56bin QQ 1 a 4 cece 15% Net assets 4 Financial CIR not more than RUB 300 bin+ ]<<hoccoeres ] targets G9 . 50% for 2020 F Customer accounts > COR not more than 8 seuss 3 Ove ree : Net asse
Slide 31: Bank ZENIT Strategy 2020
BANK ZENIT STRATEGY 2020 @rarnert I] BANK Strategy for the main business areas Ail aanieg @ Corporate business @ Retail business @ SME © Investment banking @ Private banking NKING GROUP Modified client base Optimal balance among profitability, cost of risk and direct expenses to achieve a sustainabl
Slide 32: Bank ZENIT Strategy 2020
BANK ZENIT STRATEGY 2020 ZENIT Banking Group’s financial indicators at a 3-year horizon* > Net profit > Net profit by business area 569 ‘ : 01 a Private Banking 3 202 Investment ia pee 499 banking | aS cue || : Mi i311 Corporate (4504) (3952) banking aes Retail banking 16 2017 2018 2019 2020 ©2017 @
Slide 33: Contacts
Web-site: www.tatneft.ru Contacts: Headquarters: 75, Lenin st., Almetyevsk, Republic of Tatarstan, Russian Federation, 423450 IR. Phone: +7 495 98052 26 E-mail: info@tatneft.net