Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — FY2021 Earnings Presentation
53 slides from Industries Of Qatar's earnings presentation, Dec 31, 2021
Slide 1: Industries Qatar Investor Relations Presentation
CLASSIFICATION: C0 - NON-CONFIDENTIAL Industries Qatar Investor Relations Presentation 31 December 2021 “One of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products.” Publication Date: March […], 2015
Slide 2: Disclaimer
CLASSIFICATION: C0 - NON-CONFIDENTIAL DISCLAIMER The Companies in which Industries Qatar Q.P.S.C. directly and indirectly owns investments are separate entities. In this presentation, “IQ” and “the Group” are sometimes used for convenience in reference to Industries Qatar Q.P.S.C. This presentation
Slide 3: Table of Content
CLASSIFICATION: C0 - NON-CONFIDENTIAL Table of Content 1. About IQ 2. Competitive strengths 3. Regional peer review 4. Macroeconomic updates 5. Group results (For the year ended 31 December 2021) 6. Segment results (For the year ended 31 December 2021) 7. CAPEX and Cash flows (2022F – 2026F) 8. Divi
Slide 4: About IQ
CLASSIFICATION: C0 - NON-CONFIDENTIAL About IQ 4 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 4
Slide 5: IQ at a glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ at a glance Overview • Industries Qatar (IQ) was incorporated and • QatarEnergy provides most head office listed on the Qatar Exchange in 2003. functions through a comprehensive service- • IQ is the second largest company at Qatar level agreement. Exchange by
Slide 6: IQ business segments at a glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ business segments at a glance Business segments overview Segment size by Revenue • Through its group companies, IQ operates 19.3% in three distinct business segments: 29.7% Petrochemicals Petrochemical, Fertilizer and Steel; Fertilizers • Production facilitie
Slide 7: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths 7 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 7
Slide 8: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths • Assured feedstock supply Low cost • Economies of scale and operationally diversified producer • Synergy benefits Strong • Solid liquidity position, with no long-term debt financial • Strong cash flow generation with stable EBITDA margins
Slide 9: Regional peer review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Regional peer review IQ ranked #28 among “2021 Forbes List of Top 100 Companies in the Middle East” 9 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 9
Slide 10: Competitive positioning versus regional peers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive positioning versus regional peers Market Cap. (USD’ billion) Total Assets (USD’ billion) Peer 1 92.8 Peer 1 83.2 IQ 25.7 IQ ranks #2 IQ 10.9 IQ ranks #2 Peer 2 19.6 Peer 2 9.3 Peer 3 10.3 Peer 3 6.6 Peer 4 8.2 Peer 4 4.7 Note: Data as of 31-Dec-21 No
Slide 11: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates Petrochemicals • Elevated consumer spending, continued government stimuli, normalization of investments resulted in an accelerated global GDP LDPE ($/MT) recovery, which led to a notable increase in demand for downstream 1650 commodities du
Slide 13: Group results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Group results (For the year ended 31 December 2021) 13 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 13
Slide 14: YE-21 results at a Glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL YE-21 results at a Glance Growth vs. YE-20 Revenue 77% EBITDA 152% Net profit 321% QR 20.2 billion QR 10.2 billion QR 8.1 billion EBITDA Margin: 50.9% EPS: QR 1.34 RoAE: 22.1% IQ sets another record with highest revenue since incorporation, while benefitting f
Slide 15: Operational performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Operational performance review Production (MT’ 000) Production (MT’000) • 2021 production volumes marginally declined compared to last year, mainly due mothballing of certain steel facilities, higher planned and unplanned maintenance shutdowns during the year. •
Slide 16: Financial performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Financial performance review Revenue Revenue(QR’ million) (QR Billion) • 2021 Group revenue increased significantly versus same period last year, mainly on account of overall increase in blended selling prices and higher sales volumes. • Q4-21 Group revenue incr
Slide 17: Net profit variance analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Net profit variance analysis IQ continue to benefit from higher product prices reflected in Group’s bottom-line profitability YE’21 vs YE’20 Amounts in QR ‘millions Q4-21 vs Q3-21 Amounts in QR ‘millions 17 Industries Qatar, IR Presentation, YE-21 17
Slide 18: IQ cash flow generation
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ cash flow generation IQ’s free cash flow generation capability continue to remain robust Amounts in QR ‘millions IAS 31 IAS 31 Free cash flows generated during the financial year ended 31 December 2021: QR 8.1 billion Free cash flows generated during Q4-21: Q
Slide 19: Robust EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Robust EBITDA margins Despite the volatile trends in commodity prices, IQ’s EBITDA margins continue to remain robust 100 60% 90 51% 52% 53% Oil price (USD/bbl), brent 50% IQ EBIDTA Margins (%) 80 46% 40% 41% 70 39% 37% 40% 60 30% 50 28% 27% 30% 40 22% 30 20% 20
Slide 20: IQ's plant operating rates
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ’s plant operating rates IQ’s plant operating rates remained stable 113.5% 109.6% 106.6% 106.3% 105.1% 103.7% 102.9% 102.3% 100.9% 99.7% 99.5% 99.4% 99.1% 99.1% 99.0% 98.9% 98.1% 97.6% 95.8% 93.9% 93.3% 92.2% 91.8% 89.0% 88.5% 86.8% 86.5% 80.2% 80.0% 70.6% 61.
Slide 21: Geographic analysis – IQ Group revenue
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographic analysis – IQ Group revenue Asia remained Group’s largest market, while its presence in Americas and Middle East continued to be substantial Europe 5% Qatar North America Middle East 12% Asia, ex. ISC 16% 9% 27% South America Africa Indian sub-contine
Slide 22: Segment results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segment results (For the year ended 31 December 2021) 22 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 22
Slide 23: Segmental Details: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL SegmentalDetails: Segmental Details Petrochemicals • The companies in the Petrochemical segment (Qapco, Qatofin, Qafac and QVC) are engaged in the production of: Product (in 000 MT PA) Capacity1 Ethylene 920 LDPE 600 LLDPE 280 Methanol 500 MTBE 305 Total 2,605 •
Slide 24: 2021 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 2021 results: Petrochemicals selling prices Production: Production volumes down by 3% compared to 2020, due to large scale planned turnaround conducted at Qapco facilities and a commercial shutdown at MTBE facilities; Q4-21 productio
Slide 25: 2021 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Petrochemicals Analysis of segment revenue & net profit Revenue: QR 6.0 billion, up by 51% compared to last year. This increase in revenue was mainly linked to higher product prices (+55%), partially offset by lower sales volumes (-3%); Q4-21 r
Slide 26: 2021 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Petrochemicals Analysis of segment EBITDA margins Segment’s EBITDA margins continue to remain strong During Q4-21, Qapco facilities conducted a large scale turnaround which affected segment’s profitability margins due to fixed costs and related one
Slide 27: 2021 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 2021 results: Petrochemicals segment revenue Asia remains a main market for IQ for Polyethylene (LDPE and LLDPE) and MTBE Indian sub-continent remains a key market for Polyethylene (LDPE & LLDPE) and Methanol 1H-21 Segment YE-21 Segm
Slide 28: 2021 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Petrochemicals Key segment products analysis LDPE LLDPE (contributed ~49% of the segment revenue in YE-21) (contributed ~17% of the segment revenue in YE-21) 1,292 1,180 1,262 1,083 900 1,397 1,609 1,480 1,551 821 722 811 896 940 1,124 823 160 167
Slide 29: Segmental Details: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segmental Details: Fertilizers • Qatar Fertiliser Company has six ammonia and six urea production trains all of which are located in Qatar. Product (in 000 MT PA) Capacity1 Ammonia 3,840 Urea 5,957 Melamine 60 Total 9,922 • The segment’s primary feedstock is met
Slide 30: 2021 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 2021 results: Fertilizers selling prices Production: Production slightly declined by 1% compared to 2020, as Qafco trains 1-4 underwent higher no. of days’ maintenance shutdown during current year; Q4-21 production improved by 2% com
Slide 31: 2021 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 2021 results: Fertilizers revenue & net profit Revenue: QR 10.3 billion, up by 133% compared to 2020, mainly due to positive growth in product prices (+100%) and sales volumes (+38%). 2021 sales volumes increased versus last year, mainly du
Slide 32: 2021 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Fertilizers Analysis of segment EBITDA margins Segment’s EBITDA margins continued to remain on a positive trajectory 3000 80% 68% 70% 2500 53% 53% 57% 60% 2000 50% 49% 47% 50% 44% 1500 40% 2,546 30% 1000 1,538 20% 1,191 500 Q2 847 692 10% 496 457 4
Slide 33: 2021 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 2021 results: Fertilizers segment revenue Americas remains a main market for fertilizer segment Asia is another key market for fertilizers along with Indian sub-continent YE-21 1H-21 SegmentRevenue Segment Revenue (%) (%) YE-20Segmen
Slide 34: 2021 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Fertilizers Key segment products analysis Urea (contributed ~85% of the segment revenue in YE-21) 1,408 1,474 1,407 1,178 1,281 1,171 1,043 828 714 773 316 361 446 233 227 221 240 249 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Sales volu
Slide 35: Segmental Details: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segmental Details: Steel • Qatar Steel Company Q.S.C. produces a number of intermediate steel products. The production capacity of the plants are: Product (in 000 MT PA) Capacity1 DRI / HBI 2,300* Rebar 1,800* Billets 2,520 * Coil 240 Total 6,860 1 Production ca
Slide 36: 2021 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 2021 results: Steel selling prices Production: Production down by 10% compared to last year, due to management’s decision to mothball certain facilities starting from April’20; Production volumes declined by 10% during Q4-21 in compa
Slide 37: 2021 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 2021 results: Steel revenue & net profit Revenue: QR 3.9 billion, up by 30% on 2020 amid increase in selling prices (+31%), offset by decline in sales volumes (-2%) owing to lower production volumes; Revenue increased by 39% during Q3-21
Slide 38: 2021 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Steel Analysis of segment EBITDA margins Steel segment’s EBITDA margins recovered following mothballing decision Recent decline in QoQ EBITDA margins was mainly linked to high priced feedstock being consumed during the recent quarters 350 28% 30% 2
Slide 39: 2021 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 2021 results: Steel segment revenue Starting from the second quarter of 2020, the Group decided to temporarily resize capacity of domestic operations within the Steel segment to 0.8 million MT per annum of rebar (applicable to Qatar Op
Slide 40: 2021 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL 2021 results: Steel Key segment products analysis Rebars (contributed ~73% of the segment revenue in YE-21) 704 781 719 453 547 555 621 497 530 629 551 228 235 244 342 307 220 250 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Selling prices recovered sig
Slide 41: CAPEX & Cash flows (2022F – 2026F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX & Cash flows (2022F – 2026F) 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: CAPEX and Cash Flows (2022F – 2026F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX and Cash Flows (2022F – 2026F) o Group CAPEX spend of QR 11.1 billion includes: CAPITAL EXPENDITURE (in QR Billion) Capacity addition in fertilizer segment (QR 4.1 bn in 2022 2023 2024 2025 2026 Qafco 7); Capital Spares 0.1 0.0 0.0 0.0 0.0 Other CAPEX
Slide 43: Dividends and market capitalization
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividends and market capitalization 43 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 43
Slide 44: Dividends & Market Capitalization
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividends & Market Capitalization Payout Ratio (%) Dividend per share 83% 100% 75% 91% 94% 89% 60% 55% 82% 52% 72% 69% 67% 68% 70% 55% 54% 54% 1.10 40% 1.00 0.80 0.85 0.75 0.70 0.55 0.60 0.50 0.50 0.50 0.50 0.35 0.35 0.40 0.40 0.40 0.33 0.20 2003 2004 2005 2006
Slide 45: Historical performance (2015 - 2021)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2015 - 2021) 45 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 45
Slide 46: Historical performance (2015 - 2021)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2015 - 2021) Production (M MT’s) Sales Volumes (M MT’s) Volumes remained steady since 2015 till 2019 and declined in 2020. The decline in production in 2020 was mainly owed to mothballing decision of certain steel facilities, while sales
Slide 47: Historical performance (2015 - 2021)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2015 - 2021) Revenue (QR Bn) Net income (QR Bn) * Revenue trends moved in line with the selling prices ▪ Movements in revenue together with operating costs affected the net income growth ▪ Cash flow generation for the Group remained robus
Slide 48: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure 48 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 48
Slide 49: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Board Structure Governance and Compliance • IQ Board of Directors consists of eight (8) • IQ is firmly committed to implementing the Directors, of whom seven (7) were appointed by principles of good governance set out in the the Special Shar
Slide 50: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Remuneration Disclosure and Transparency Board of Directors • The Board ensures that all disclosures are made in • The Company has developed a periodically revisited accordance with the requirements set by regulatory remuneration policy for
Slide 51: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing 51 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 51
Slide 52: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing • Qatar Chemical and Petrochemical Marketing and Distribution Company Q.J.S.C. (“Muntajat”), a wholly-owned company of the government of the State of Qatar, has the exclusive rights to purchase, market, sell and distribute the State’s product
Slide 53: For further information, Industries Qatar can be contacted
CLASSIFICATION: C0 - NON-CONFIDENTIAL For further information, Industries Qatar can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: iq.investorrelations@qp.com.qa or iq@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.iq.com.qa for the latest i