Orlen Spolka Akcyjna · GPW:PKN
Orlen Spolka Akcyjna — Grupa LOTOS — Q4 2018 Earnings Presentation
28 slides from Orlen Spolka Akcyjna's earnings presentation, Mar 13, 2019
Slide 1: Consolidated financial results for 4th quarter 2018 and FY 2018
Consolidated financial results for 4th quarter 2018 and FY 2018 March 13th, 2019 Financial results 4Q 2018 and FY 2018 1
Slide 2: Financial results 4Q 2018 and FY 2018
Key highlights ….…………………………….. 3 External environment …………………......... 8 Upstream ……………………………………… 12 Downstream …………………………….…… 18 Consolidated financial results …….………... 23 Financial results 4Q 2018 and FY 2018 Financial results 4Q 2018 and FY 2018 2
Slide 3: Key highlights
Key highlights Financial results 4Q 2018 and FY 2018 3
Slide 4: 4Q 2018 – summary
Key highlights 4Q 2018 – summary o LIFO EBITDA (1) reached 876m PLN, 15% increase (yoy), achieving growth for both of the reporting segments o Operational excellence confirmed by the full utilisation of the refining capacity sticking to the favourable market environment o Persistently strong balance
Slide 5: Key highlights 4Q 2018
Key highlights 4Q 2018 LIFO EBITDA (1) Downstream - crude oil throughput m PLN k tons upstream downstream 2 700 2 790 2 775 888 876 754 +16% 688 609 547 217 215 261 4Q 2017 3Q 2018 4Q 2018 4Q 2017 3Q 2018 4Q 2018 Net debt / LIFO EBITDA (2) Upstream – daily hydrocarbons production (3) 1.9x m PLN boe/
Slide 6: FY 2018 – summary
Key highlights FY 2018 – summary o Highest LIFO EBITDA (1) in the history of the company exceed 3.12bn, +2% y/y despite lower refining margins and decrease of the overall upstream production o 185m PLN dividend paid by Grupa LOTOS S.A. (1 PLN per share) (1) Net of one off items Financial results 4Q
Slide 7: FY 2018 - cumulative
Key highlights FY 2018 - cumulative LIFO EBITDA (1) Downstream - crude oil throughput in Gdańsk m PLN k tons upstream downstream 10 387 10 764 9 626 3 051 3 125 2 589 2 198 2 202 1 901 688 863 917 2016 2017 2018 2016 2017 2018 Operating cash flow Upstream – daily hydrocarbons production (2) m PLN bo
Slide 8: External environment
External environment Financial results 4Q 2018 and FY 2018 Financial results 4Q 2018 and FY 2018 8
Slide 9: Macroeconomic environment vs strategic assumptions
External environment Macroeconomic environment (1) vs strategic assumptions(2) Brent DTD Product crack spreads +25% USD/bbl USD/ton 177 71 132 -25% 57 Gasoline 2018 strategy 2018 actual 2018 strategy 2018 actual 114 108 -5% Natural gas Diesel +31% USD/boe 45 2018 strategy 2018 actual 34 Heavy fuel o
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 3.83 5.3 5.4 5.0 5.0 5.1 5.1 3.77 4.6 3.70 4.3 3.63 3.60 3.58 3.40 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 Polish GDP growth (2)
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 165 163 152 146 75 75 139 134 138 127 67 68 98 100 101 93 86 61 77 79 54 52 95 50 45 47 47 38 41 33 30 27 -98 -100 -117 -117 -131 -154 -146 -165 1Q 17 2Q
Slide 12: Upstream
Upstream Financial results 4Q 2018 and FY 2018 Financial results 4Q 2018 and FY 2018 12
Slide 13: Producing assets – 4Q 2018
Upstream Producing assets – 4Q 2018 B8 Sleipner Onshore fields Baltic Sea North Sea Lithuania Reserves(1) 35,9 mmboe Reserves(1) 14,8 mmboe Production(2) 3,1 kboe/d Reserves(1) 2,9 mmboe Production(2) 12,7 kboe/d Production(2) 0,7 kboe/d B3 Heimdal Baltic Sea North Sea Reserves(1) 13,7 mmboe Reserve
Slide 14: Overall production figures
Upstream Overall production figures Daily quarterly production Overall FY production boe/d m boe -1% -11% 20 728 20 536 8.4 0.4 7.5 Norway 17 647 0.3 1.8 Poland 9 348 8 739 1.6 Lithuania 8 162 6.2 5.5 11 379 11 797 9 486 4Q 2017 3Q 2018 4Q 2018 2017 2018 oil gas Financial results 4Q 2018 and FY 2018
Slide 15: Total recoverable reserves comparing with 31.12.2017
Upstream Total recoverable reserves comparing with 31.12.2017 2P reserves m boe -0.4 89.8 88.1 2.9 6.0 Lithuania 3.6 -5.5 3.6 -1.6 -0.3 Poland 45.2 49.6 Norway 39.3 37.3 (1) (2) (3) 31 Dec 2017 Production Norway Production Poland Production Norway Poland Lithuania 30 Dec 2018 Lithuania reclassificat
Slide 16: Quarterly upstream EBITDA evolution
Upstream Quarterly upstream EBITDA evolution 4Q 2017 3Q 2018 4Q 2018 m PLN 633 -56 -373 205 197 178 164 -51 142 18 -75 40 (1) (1) (2) EBITDA Depreciation One offs Clean EBITDA Depreciation One offs Clean EBITDA Depreciation One offs Clean 4Q17 EBIT 4Q17 3Q18 EBIT 3Q18 4Q18 EBIT 4Q18 (1) Balance of a
Slide 17: Full year cumulative EBITDA evolution
Upstream Full year cumulative EBITDA evolution 2017 2018 m PLN +6% 1 271 225 1 046 -355 916 863 815 49 307 507 (1) (2) EBIT 2017 Depreciation EBITDA 2017 One offs Clean EBIT 2018 Depreciation EBITDA 2018 One offs Clean EBITDA 2017 EBITDA 2018 (1) Balance of assets impairments and other revaluations
Slide 18: Downstream
Downstream Financial results 4Q 2018 and FY 2018 Financial results 4Q 2018 and FY 2018 18 18
Slide 19: Volume of sales of key refining products
Downstream Volume of sales of key refining products thousand tons 2 617 2 677 2 535 2 536 2 584 421 431 405 409 2 244 417 416 1 665 1 584 1 558 1 702 1 623 1 380 531 542 448 561 545 556 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 (1) gasoline middle distilates heavy products (2) (1) middle disti
Slide 20: Quarterly downstream clean EBITDA LIFO evolution
Downstream Quarterly downstream clean EBITDA LIFO evolution 4Q 2017 3Q 2018 4Q 2018 m PLN -174 2 688 133 609 -198 547 -16 859 167 761 309 Retail Retail Retail 30 52 52 EBITDA LIFO effect One offs Clean LIFO EBITDA LIFO effect One offs Clean LIFO EBITDA LIFO effect One offs Clean LIFO EBITDA 4Q 17 3Q
Slide 21: Full year cumulative EBITDA evolution
Downstream Full year cumulative EBITDA evolution 2017 2018 m PLN 2 426 276 2 269 -500 101 -171 2 198 2 202 498 +0,2% 538 1 929 1 731 Retail Retail 153 181 EBIT 2017 Depreciation EBITDA 2017 One offs LIFO effect Clean EBIT 2018 Depreciation EBITDA 2018 One offs LIFO effect Clean EBITDA EBITDA LIFO 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 8.47 8.57 7.60 7.40 7.40 7.14 7.07 7.34 7.29 7.47 6.56 6.38 6.20 5.80 5.58 5.60 5.30 5.43 4.83 4.72 3.96 3.48 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q2018 4Q2018 (1) LOTOS model refining margin = 14
Slide 23: Consolidated financial results
Consolidated financial results Financial results 4Q 2018 and FY 2018 Financial results 4Q 2018 and FY 2018 23
Slide 24: Decomposition of 4Q 2018 vs 4Q 2017 consolidated financial results
Consolidated financial results Decomposition of 4Q 2018 vs 4Q 2017 consolidated financial results 4Q 2017 4Q 2018 876 m PLN 167 754 -240 181 -198 205 23 485 723 769 100 EBIT 4Q LIFO effect One offs Depreciation Clean Net profit EBIT 4Q LIFO effect One offs Depreciation Clean Net profit 2017 EBITDA L
Slide 25: Full year operating results evolution
Consolidated financial results Full year operating results evolution 2017 2018 m PLN 3 051 3 125 -500 723 844 -79 -171 149 1 672 1 587 2 981 2 229 EBIT 2017 LIFO effect One offs Depreciation Clean EBITDA Net profit 2017 EBIT 2018 LIFO effect One offs Depreciation Clean EBITDA Net profit 2018 LIFO 20
Slide 26: Operating cash flows vs CAPEX
Consolidated financial results Operating cash flows vs CAPEX Quarterly 2018 m PLN 1 299 1 445 457 632 1 004 533 166 581 368 200 211 225 212 822 133 83 121 146 118 156 290 90 79 2017 2018 -136 1Q 2018 2Q 2018 3Q 2018 4Q 2018 CAPEX upstream CAPEX downstream operating cash flow CAPEX EFRA CAPEX B8 CAPE
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 4.18 2.5 1.9 23% 0.8x 0.6x 16% 3.76 3.48 2016 2017 2018 2016 2017 2018 2016 2017 2018 net debt FX USD/PLN o Net debt figures include: interest bearing loans and borrowings, finance
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 4Q 2018 and FY 2018