Orlen Spolka Akcyjna · GPW:PKN
Orlen Spolka Akcyjna — Grupa LOTOS — H1 2018 Earnings Presentation
28 slides from Orlen Spolka Akcyjna's earnings presentation, Aug 9, 2018
Slide 1: Consolidated Financial results for Half Year and 2nd quarter 2018
Consolidated Financial results for Half Year and 2nd quarter 2018 August 9th, 2018 Financial results H1 2018 and 2Q 2018 1
Slide 2: Financial results H1 and 2Q 2018
Key highlights ….…………………………….. 3 External environment …………………......... 8 Upstream ……………………………………… 12 Downstream …………………………….…… 18 Consolidated financial results …….………... 23 Financial results H1 and 2Q 2018 Financial results H1 2018 and 2Q 2018 2
Slide 3: Key highlights
Key highlights Financial results H1 2018 and 2Q 2018 3
Slide 4: 2Q 2018 – summary
Key highlights 2Q 2018 – summary o 185m PLN dividend approved by the Annual General Shareholders meeting (1 PLN per share) o LIFO EBITDA (1) reaching 820m PLN up 19% (yoy), despite the decreasing model refining margin in PLN o Operational excellence confirmed by the full utilisation of the refining
Slide 5: Key highlights 2Q 2018
Key highlights 2Q 2018 LIFO EBITDA (1) Downstream - crude oil throughput m PLN k tons upstream downstream 2 560 2 638 821 2 217 690 +19% 540 582 474 324 213 205 237 2Q 2017 1Q 2018 2Q 2018 2Q 2017 1Q 2018 2Q 2018 Net debt / LIFO EBITDA (2) Upstream – daily hydrocarbons production (3) 1.9x m PLN boe/
Slide 6: Half year 2018 – summary
Key highlights Half year 2018 – summary o LIFO EBITDA (1) of almost 1.4bn (flat yoy) confirming an effective asset mix resilient to lowering margin and weakened USD against the PLN o Net debt lowered by 1.3 bn PLN yoy pushing net debt/LIFO EBITDA (1) ratio down to 0.9x o Upstream production above th
Slide 7: Key highlights Half year 2018
Key highlights Half year 2018 LIFO EBITDA (1) Downstream - crude oil throughput in Gdańsk m PLN k tons upstream downstream 4 957 5 199 1 372 1 361 4 141 -1% 1 090 901 905 740 350 478 441 6M 2016 6M 2017 6M 2018 6M 2016 6M 2017 6M 2018 Operating cash flow Upstream – daily hydrocarbons production (2)
Slide 8: External environment
External environment Financial results 2Q 2018 Financial results H1 2018 and 2Q 2018 8
Slide 9: Macroeconomic environment vs strategic assumptions
External environment Macroeconomic environment (1) vs strategic assumptions(2) Brent DTD Product crack spreads +24% USD/bbl USD/ton 177 71 140 -21% 57 Gasoline 2018 strategy 1H 2018 actual 2018 strategy 1H 2018 actual 114 96 -16% Natural gas Diesel +26% USD/boe 43 34 2018 strategy 1H 2018 actual Hea
Slide 10: FX rate, GDP growth, domestic fuel market
External environment FX rate, GDP growth, domestic fuel market FX USD/PLN rate (1) Diesel consumption (3) m m3 4.06 5.3 5.0 5.0 5.1 3.83 4.6 4.3 3.63 3.60 3.58 3.40 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 Polish GDP growth Gasoline consumption
Slide 11: Crude oil, natural gas and product crack spreads
External environment Crude oil, natural gas and product crack spreads Crude oil (1) and nat gas prices (2) Key product crack spreads (1) USD USD/t 75 165 152 146 67 139 134 127 61 98 93 100 54 52 77 79 50 95 45 38 41 33 30 27 -98 -100 -117 -131 -154 -165 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 20
Slide 12: Upstream
Upstream Financial results HY 2018 Financial results H1 2018 and 2Q 2018 12
Slide 13: Producing assets – 1H key figures
Upstream Producing assets – 1H key figures B8 Sleipner Onshore fields Baltic Sea North Sea Lithuania Reserves(1) 36,5 mmboe Reserves(1) 12,9 mmboe Production(2) 2,7 kboe/d Reserves(1) 3,5 mmboe Production(2) 15,1 kboe/d Production(2) 0,8 kboe/d B3 Heimdal Baltic Sea North Sea Reserves(1) 14 mmboe Re
Slide 14: Overall production figures
Upstream Overall production figures Daily quarterly production Overall half year production boe/d m boe -8% -9% 24 652 4.5 22 717 0.2 4.1 21 931 Norway 0.9 0.2 Poland 10 545 0.8 9 338 Lithuania 9 459 3.4 3.1 14 107 12 472 13 379 2Q 2017 1Q 2018 2Q 2018 6M 2017 6M 2018 oil gas Financial results H1 20
Slide 15: Total recoverable reserves comparing with 31.12.2017
Upstream Total recoverable reserves comparing with 31.12.2017 2P reserves m boe 90.2 88.1 3.5 6.1 Lithuania 3.6 -3.1 -0.8 -0.1 45.2 Poland 50.4 Norway 39.3 36.3 31 Dec 2017 Norway Poland Lithuania Poland 30 Jun 2018 reclassification (1) (1) Upward revision of 2P reserves for B3 field, due to extensi
Slide 16: Quarterly upstream clean EBITDA evolution
Upstream Quarterly upstream clean EBITDA evolution 2Q 2017 1Q 2018 2Q 2018 m PLN 237 205 -60 204 176 -59 -80 146 133 9 (1) EBITDA Depreciation One offs Clean EBITDA Depreciation EBIT 1Q18 EBITDA Depreciation EBIT 2Q18 2Q17 EBIT 2Q17 1Q18 2Q18 (1) balance of assets impairments and other revaluations
Slide 17: Half year EBITDA evolution
Upstream Half year EBITDA evolution Half year 2017 Half year 2018 m PLN -8% 469 478 9 441 441 0 163 119 322 306 (1) EBIT 6M 2017 Depreciation EBITDA One offs Clean EBIT 6M 2018 Depreciation EBITDA One offs Clean 6M 2017 EBITDA 6M 2018 EBITDA 6M 2017 6M 2018 (1) Balance of assets impairments and othe
Slide 18: Downstream
Downstream Financial results HY 2018 Financial results H1 2018 and 2Q 2018 18 18
Slide 19: Volume of sales of key refining products
Downstream Volume of sales of key refining products thousand tons +13.3% 2 617 2 535 2 536 2 239 421 409 2 244 417 1 979 372 416 355 1 665 1 584 1 558 1 434 1 380 1 239 433 531 542 448 561 386 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 (1) gasoline middle distilates heavy products (2) (1) middl
Slide 20: Quarterly downstream EBITDA evolution
Downstream Quarterly downstream EBITDA evolution 2Q 2017 1Q 2018 2Q 2018 843 -318 57 582 160 474 84 324 -175 137 415 176 Retail Retail Retail 42 26 51 EBITDA LIFO effect One offs Clean LIFO Clean LIFO EBITDA LIFO effect One offs Clean LIFO EBITDA LIFO effect One offs 2Q 17 EBITDA EBITDA 1Q 18 2Q 18
Slide 21: Half year downstream EBITDA evolution
Downstream Half year downstream EBITDA evolution 6M 2017 6M 2018 m PLN 1 258 140 248 -493 1 010 901 905 15 +0,5% 725 162 275 449 839 828 Retail Retail 62 77 EBIT 6M2017 Depreciation EBITDA One offs LIFO effect Clean EBIT 6M2018 Depreciation EBITDA One offs LIFO effect Clean 6M 2017 EBITDA LIFO 6M 20
Slide 22: Model refining margin evolution (USD/bbl)
Downstream Model refining margin evolution (USD/bbl) (1) (2) LOTOS PKN Orlen ERMI 8.90 8.40 8.57 7.40 7.14 7.07 7.29 6.56 6.38 5.58 6.20 4.83 5.60 4.72 3.48 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 (1) LOTOS model refining margin = 14.14% gasoline + 4.24% naphtha + 4.53% LPG + 49.57% diesel + 5.34% j
Slide 23: Consolidated financial results
Consolidated financial results Financial results HY 2018 Financial results H1 2018 and 2Q 2018 23
Slide 24: Decomposition of 2Q 2018 vs 2Q 2017 consolidated financial results
Consolidated financial results Decomposition of 2Q 2018 vs 2Q 2017 consolidated financial results 2Q 2017 2Q 2018 m PLN 821 690 -318 184 19% 211 57 535 898 169 137 158 173 EBIT 2Q LIFO effect One offs Depreciation Clean Net profit EBIT 2Q LIFO effect One offs Depreciation Clean Net profit 2017 EBITD
Slide 25: Decomposition of Half year operating results
Consolidated financial results Decomposition of Half year operating results Half year 2017 Half year 2018 m PLN 1 372 1 361 -0,8% 437 367 -493 140 856 171 15 568 1 346 749 EBIT 6M 2017 LIFO effect One offs Depreciation Clean EBITDA Net profit EBIT 6M 2018 LIFO effect One offs Depreciation Clean EBIT
Slide 26: Operating cash flows vs CAPEX
Consolidated financial results Operating cash flows vs CAPEX Quarterly 6M 2018 m PLN 1 243 1 014 792 225 724 62 533 412 431 87 368 220 284 505 164 211 95 200 344 42 82 121 189 204 150 118 90 -136 6M 2017 6M 2018 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 CAPEX upstream CAPEX downstream operating cash f
Slide 27: Debt
Consolidated financial results Debt Net debt (1) Gearing ratio (2) Net debt / clean LIFO EBITDA (3) bn PLN 4.8 56% 1.9x 2.8 4.18 2.5 0.9x 23% 25% 0.8x 3.74 3.48 2016 2017 30 Jun 2018 2016 2017 30 Jun 2018 2016 2017 30 Jun 2018 net debt FX USD/PLN (1) End of period (2) gearing ratio = net debt / tota
Slide 28: Grupa LOTOS S.A. Investor Relations
Grupa LOTOS S.A. Investor Relations tel. +48 58 308 73 93 fax +48 58 346 22 35 e-mail ir@grupalotos.pl @GrupaLOTOS Financial results H1 2018 and 2Q 2018