Bangchak Corporation Public Company Ltd · SET:BCP
Bangchak Corporation Public — Q2 2023 Earnings Presentation
53 slides from Bangchak Corporation Public's earnings presentation, Sep 1, 2023
Slide 1: Analyst Meeting Q2/2023
Analyst Meeting Q2/2023 September 1, 2023 1
Slide 2: Disclaimer
Disclaimer The information contained herein is being furnished on a confidential basis for discussion purposes only and only for the use of the recipient, and may be subject to completion or amendment through the delivery of additional documentation. Except as otherwise provided herein, this documen
Slide 3: Agenda
Agenda 01 Bangchak Group at a Glance 02 Acquisition of Esso (Thailand) Public Company Limited 03 2H/2023 Outlook 3
Slide 4: Unparalleled Excellence: World Class Award
Unparalleled Excellence Global Performance Excellence Award 2023 “WORLD CLASS” The First Thai Organization from the Industrial Sector & The World’s First and Only Refinery to Receive this World Class Level Quality Award 4
Slide 5: Embarking on a Thrilling New Growth Chapter
Embarking on a Thrilling New Growth Chapter Stable path to the Future… EBITDA & Net Profit Revenue Unit: mn.THB New Growth Chapter (Unit: mn.THB) 500K+ 44,724 380K+ Better GRM in 2H/23 New operating assets of 312,202 Clean Power Business 199,417 136,450 New M&A of Natural Resource Business Completio
Slide 6: Striking the Perfect Harmony of Sustainable Growth
Striking the Perfect Harmony of Sustainable Growth Natural Resources Business Refinery and Oil Trading Business 28% BCP + ETL Target 26% 33% EBITDA 46% 100 Bn. THB 8% 19 Synergy with ETL Marketing Business 6% Bn. THB & Upstream 9% BCP + ETL 13% as key drivers 5% 4% 22% Clean Power Business New Busin
Slide 7: Proven Pathway of Bangchak Refinery
PROVEN PATHWAY of Bangchak Refinery… Where The Legacy Begins! Expand Capacity & Improve Efficiency Strengthen Network Debottlenecking Hydrocracking Continuous Catalyst Regeneration Unit Oil Trading & Product Distribution Logistics Network Unit for Higher Crude Run (CCR) for Higher Capacity & Optimiz
Slide 8: Thriving Sriracha Refinery through Bangchak Legacy
Thriving Sriracha Refinery through Bangchak Legacy Crude Run New Crude Niche Product Portion OPEX*($/BBL) 122 KBD 47 12% >2 $/BBL in 2015 Different crude sources 14 2% 1.3 in 2022 99 KBD in 2014 1.1 in 1H/23 PROVEN HIGH LEVEL of GRM ($/BBL) BCP Avg. Peer 14.3 6.4 7.1 8.1 5.4 4.5 6.1 3.2 9.7 6.0 6.4
Slide 9: Strategic Rationale to integrate with ETL
Strategic Rationale to integrate with ETL 1 2 3 4 Complementary Integrated and Creates the leading Thai Significant synergies refining portfolio provides well-balanced fuel supply integrated R&M player potential from costs fuel supply security and and retail portfolio optimization optionality • Comp
Slide 10: Significant Synergies Potential
Significant Synergies Potential >3,000 mn. THB Estimated Annual Run-Rate EBITDA Synergies Refinery Operations Logistics & Crude Supply Marketing Network Corporate Cost Saving ~฿1,000 mn. THB ~฿200 mn. THB ~฿300 mn. THB ~฿1,500 mn. THB ✓ Improved utilization from 130 KBD to ✓ Crude co-loading ✓ ETL's
Slide 11: Financial Strength
Financial Strength Confirm Credit Rating from TRIS RATING: A as of 31 AUG 23 ‘Stable’ Outlook Resilience Ratio Return ✓ Strong cash flow from operation ✓ Proactively monitor financial ratios to ✓ Risk balanced investment ✓ Portfolio diversification maintain discipline ✓ Quick-win projects ✓ Divestme
Slide 12: Slide 12
Slide 13: Agenda
Agenda 01 Bangchak Group at a Glance 02 Acquisition of Esso (Thailand) Public Company Limited 03 2H/2023 Outlook 13
Slide 14: Esso's Acquisition Highlights
Esso’s Acquisition Highlights Final Price 65.99% Leading Integrated R&M Player in Thailand & Tender Offer Price + 294 KBD 9.8986 of Esso Thailand from ExxonMobil Baht per Share Mandatory Tender Offer ~2,200 Service Stations Final price adjusted based on Infrastructure: 2Q/2023 Financial Report Jetty
Slide 15: Tentative: Tender Offer Timeline
Tentative: Tender Offer Timeline Submit Tender Offer Form (Form 247-4) Announcement of Report of the Majority stake intention to make Commencement Tender Offer Tender Offer purchase signing Bangchak’s AGM CP completion a Tender Offer Settlement Date (Form 256-2) of Tender Completion Change in Contro
Slide 16: Final Purchasing Price & Tender Offer Price
Final Purchasing Price & Tender Offer Price Final Price as (THBbn) at 2Q2023 Enterprise value 55.5 (-) Net debt and debt equivalent Items (29.5) Debt/cash (+) Other financial items 2.9 adjustments (+) Working capital (6.4) 34.3 bn. THB (-) Reference working capital 9.5 for 100% stake Working capital
Slide 17: Debt Financing lower than expected for ESSO's Acquisition
Debt Financing lower than expected for ESSO’s Acquisition To BCP’s Conso Estimated loan level 35% and comes with a favorable cost 2,100 56% Unit: mn.THB Approved BBL loan Saving • Up to 32,000 MB • THOR + Spread (0.8 Baht/Share) • Tenor 30 months • Clean basis 1,000 BCP Lower Borrowing Rate & Amount
Slide 18: Operation Going Forward: Refinery Business
Operation Going Forward: Refinery Business Improve Productivity and Competitiveness BCP ETL Working Committee for Synergy Distribution Single LP Model The Two Refineries will together adopt a single “Linear Programming (“LP”)” for the selection and sourcing of crude oil BCP 1 2 3 Crude Oil BCP 120 K
Slide 19: Operation Going Forward: Marketing Business (Retail)
Operation Going Forward: Marketing Business (Retail) BCP and ETL’s service stations under Bangchak’s Brand shall provide identical services Bangchak + ETL’s retail stations Future Service Station Expansion Plan North Northeast BCP ETL 277 + 161 361 + 133 Service stations Service stations Central, We
Slide 20: Operation Going Forward: Marketing Business (Industrial)
Operation Going Forward: Marketing Business (Industrial) Optimize Optimize Operational Operational Efficiency Efficiency Bolster Bolster Competitiveness Competitiveness Foster Cohesive Business Operations Non-Overlapping BCP Products 1 Clients BCP Clients Sale team BCP and ETL will remain responsibl
Slide 21: Purchase Price Allocation To Be Performed
Purchase Price Allocation To Be Performed Impact of Acquisitions on Fair Value Measurement of Net Assets If Fair value > Purchase Price BCP Equity PAT to BCP Data as of June 2023 21
Slide 22: Bangchak's Enterprise Value Comparing to Peers
Bangchak’s Enterprise Value Comparing to Peers Nameplate Capacity of Refinery Business % Market Share of Retail Business Unit: KBD Unit:% 174 275 42% 14% 120 16% Top Rank Peer BCP+ETL Top Rank Peer BCP+ETL Enterprise Value (Bn.THB) Market Capitalization (Bn.THB) Marketing Biz 229 254 191 Top Rank Pe
Slide 23: Agenda
Agenda 01 Bangchak Group at a Glance 02 Acquisition of Esso (Thailand) Public Company Limited 03 2H/2023 Outlook 23
Slide 24: 2H/2023 Outlook
2H/2023 Outlook 1H/2023 2H/2023 Refinery and Oil (SGRM: $/BBL) Trading Business Market GRM 8.1$/BBL 4-Month Recognition of ETL (SGRM: 6.1 $/BBL) Sri-racha Refinery 45 Days Realized Inventory loss Expected Inventory Gains Realized Inventory loss +8-10% Marketing Business 57X Total Sales Volume +10% H
Slide 25: 2H/2023 Outlook: Clean Power, Bio-Based, Natural Resources
2H/2023 Outlook 1H/2023 2H/2023 Progressive Profit Realization of share of profit from Unveiling Q4/2023 Full 2H/23 Profit Clean Power Cogen USA Full Cogen Profit Share from Electricity Business Sales to EVN Unit: MW 151 577 857 Q1/23 Q2/23 Q3/23 Q4/23 Start increasing sales volume of B100 & Ethanol
Slide 26: SAF Production Plant
SAF: Sustainable Aviation Fuel SAF Production Plant Reduce Carbon Emission by 80% 1 Location: Bangkok Plant 1 2 Construction: 2023 - 2024 4 Collecting Feedstock Bangchak Service Station initiates 3 Target COD: Q4/2024 • Used Cooking Oil (UCO) SAF Selling in a campaign to be a part of 4 Production Ca
Slide 27: Our ESG Leadership as First Mover Continues
Our ESG Leadership as First Mover Continues… Greenovative Synthetic Destination Biology Thailand First Sustainable Renewable Energy Aviation Fuel Frontier and Storage Producer Green Businesses System 27
Slide 28: Always Ahead of the Curve
Always Ahead of the Curve NEW GENERATION FUEL & GREEN ENERGY Biofuel (Biodiesel/Ethanol) Solar/Wind/Hydro Renewable Energy 43% EV Bike rental Platform 30% 70% Portfolio Mix 57% Net Zero Carbon Markets Club Sustainable Available Fuel
Slide 29: Thank You
THANK YOU ir@bangchak.co.th Tel. +66 2335 8663/ / 8518 www.bangchak.co.th
Slide 30: 1H/2023 Bangchak Group's Key Performance Highlights
1H/2023 Bangchak Group’s Key Performance Highlights Accounting EBITDA Accounting EBITDA -53% YoY, Operating GRM stayed at 8.10$/BBL (-7.77$/bbl) owing to a Unit: MB diminished crack spreads across all products alongside the looming concerns over breakdown by business unit Refinery and Oil Trading Bu
Slide 31: Refinery and Oil Trading Business
Refinery and Oil Trading Business EBITDA (MB) Crude Run (KBD) Product Yield (%) Total GRM ($/BBL) 2% 2% Operating GRM Hedging Inventory Gain/Loss 11,527 102% 101% 19% LPG 20% Gasoline 15.52 7.36 4% 11% Jet 9.91 5,402 53% 52% Diesel 2.50 15.87 122.3 121.7 8.10 12% (3.23) 9% UO LSFO & (10.26) 9% 8% in
Slide 32: Refinery and Oil Trading Business
Refinery and Oil Trading Business Core Business Strengthen Trading Growth Logistics Integration Sustainable Leader Crude Supply Complex Refinery 120 KBD SAF 7 KBD Operating Expense Improvement for Cost Reduction Variety of Crude Source for Flexibility & Product Yield Maximization From Far East, Mid
Slide 33: Marketing Business
Marketing Business EBITDA (MB) RM Sales Volume (ML/MO) Sales Volume by Customer (ML/MO) Avg. 395 480 532 Avg. 385 416 98 137 Industrial Avg. 340 390 396 394 381 374 382 395 Retail 2,585 365 351 1,290 332 1H/22 1H/23 300 Sales Volume by Key Product (ML/MO) 1H/22 1H/23 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2
Slide 34: Sales Volume Growth with Enriched Margins
Sales Volume Growth with Enriched Margins Strengthened Oil Retail with Greenovative Destination (Avg.ML/MO)* Sales Volume Soars Beyond Pre-Pandemic Peaks Avg. 385 395 Avg. 355 Avg. 349 Avg. 340 416 396 394 Pre-COVID Level 381 374 390 at 355 ML/MO 364 359 365 368 367 365 344 351 340 332 324 300 Q1/20
Slide 35: Launching High Premium Product
Launching High Premium Product Best in class, Premium quality Gasohol 97 • Highest Octane level • Euro 5 Standard AAS Motorsport Sponsorship • Revolutionary Additives in Bangchak's 'Hi Premium 97' Achieve Immaculate Injector Cleaning at Unmatched World-Class Standards 2nd place GT World Challenge •
Slide 36: Clean Power Business
Clean Power Business EBITDA (MB) Electricity Output (GWh) 224.4 320.5 223.8 112.8 145.5 Wind - TH Hydro – LA 4,187 Solar - JP Solar - TH 208.4 Hydro – LA 1 Fully paused for 10% 2,031 118.4 transition to EVN 23% 101.0 2,156 85.9 75.6 81.6 84.5 83.8 1H/23 2% 1,841 35.6 33.1 21.5 25.2 35.0 65% GWh 1.9
Slide 37: Business footprints in 7 countries globally
Business footprints in 7 countries globally Listed in SET since September 2016 BCP holds 57.19% As of Aug 2023 An integrated power generation company and service provider of smart energy system focusing on renewable and clean power Remark: information as of Aug 2023 and Unit is Contracted capacity o
Slide 38: Investment in Combined Cycle Gas Turbines
Investment in Combined Cycle Gas Turbines South Field Energy: SFE Acquired in 27 Feb 2023 BCPG’s Investments in 520M.USD COD October 2021 Installed Capacity 1,182 MW Equity Investment % Net Holding 7.6% MW acquired 90 MWe Carroll County Energy: CCE Acquired in 27 Feb 2023 COD December 2017 Installed
Slide 39: Bio-Based Products Business
Bio-Based Products Business EBITDA (MB) Revenue (MB) Sales Volume (ML) B100 Ethanol 7,153 133 437 98 245 5,991 63 54 1H/22 1H/23 1H/22 1H/23 1H/22 1H/23 1Included a gain on fair value adjustment 616 MB. o Biodiesel business witnessed a decline in gross profit, attributed to the depreciation of Avg.
Slide 40: Thailand First Fully Integrated Biofuel Producer
Flagship for Biofuel and HVP in Health & Well-Being Thailand First Fully Integrated Biofuel Producer Listed in SET since March 2022 BCP holds 44.99% As of Jun 2023 Biofuel High-Value Products Ethanol Business Biodiesel Business Our Growth Opportunities Ayutthaya Leading and Pioneering in Thailand “S
Slide 41: Natural Resources Business
Natural Resources Business EBITDA (MB) Revenues from Crude Oil and Gas Sales (MB) OKEA has reported another impressive Operating Income and EBITDA, supported by o Substantial 93% YoY growth in sales volume, due to • Overlifting position in 1Q23 due to the successful lifting of two cargoes from the D
Slide 42: OKEA ASA
OKEA ASA Listed in Oslo Stock Exchange • A Norway-based oil company engaged in the oil and gas exploration and production industry • Mid-to-late-life operator on the Norwegian Continental Shelf (NCS) BCPR holds 45.44% As of Mar 2023 Draugen Brage Unit of Production: KBOEPD 44.56% 35.2% Operator: OKE
Slide 43: Bangchak's Financial Position (Consolidated)
Bangchak’s Financial Position (Consolidated) 30 Jun 2023 Statement of Financial Position Unit: THB Million Operating Profit Unit: THB Million Assets Liabilities and Equity 237,570 242,344 237,570 242,344 Gain from Cash and Unrealized of Equivalents Derivatives Gain on Impairment Decommissioning Inve
Slide 44: Strong Financial Status
Strong Financial Status Return Resilience Data as of 1H/23 ROA ROE (%) Cash(1) Asset Debt EBITDA LTM(2) 9.3 9.7 51,256 MB 237,570 MB 97,175 MB 36,057 MB Remark: (1)Including short-term investment (2)In last 12 Months 4.0 4.6 CAPEX Plan (2023-2030) Listed Subsidiaries: SELF-FUNDING 63% 2018 - 2019 Pr
Slide 45: Bangchak's Historical Dividend
Bangchak’s Historical Dividend Dividend Policy: ≥ 30 percent of net profit after deduction of allocation of legal reserve However, this is subject to the economic situation, the Company’s cash flow and investment plans of the Company and its subsidiaries according to the necessary, appropriation and
Slide 46: EBITDA Structure (Consolidated)
EBITDA Structure (Consolidated) Unit: THB Million Q2/2023 Q1/2023 QoQ Q2/2022 YoY 1H/2023 1H/2022 YoY FY2022 Total Revenue 68,023 80,380 -15% 83,796 -19% 148,403 152,852 -3% 312,202 Refinery and Trading Business 1/ 58,329 65,974 -12% 74,171 -21% 124,303 133,468 -7% 270,268 Marketing Business 2/ 45,4
Slide 47: Profit and Loss (Consolidated)
Profit and Loss (Consolidated) Consolidated Statement of Income (THB Million) Q2/2023 Q1/2023 QoQ Q2/2022 YoY 1H/2023 1H/2022 YoY FY2022 Revenue from sale of goods and rendering of services 68,023 80,380 -15% 83,796 -19% 148,403 152,851 -3% 312,202 Cost of sale of goods and rendering of services (62
Slide 48: Financial Ratio (Consolidated)
Financial Ratio (Consolidated) Q2/2023 Q1/2023 Q2/2022 1H/2023 1H/2022 FY2022 Profitability Ratios (%) Gross Profit Margin 7.93% 10.34% 21.74% 9.23% 19.94% 14.82% EBITDA Margin 9.74% 13.69% 15.00% 11.87% 17.20% 14.33% Net Profit Margin 1.04% 4.19% 6.55% 2.75% 7.19% 4.85% Return of Equity (ROE) 9.70%
Slide 49: Conditions of the Esso share purchase agreement (Thai)
เงื่อนไขของสัญญาซื้อขายหุ้นของ บริษัท เอสโซ่ (ประเทศไทย) จากัด (มหาชน) (“เอสโซ่”) คณะกรรมการการแข่งขันทางการค้าจึงมีคาสั่งอนุญาตให้รวมธุรกิจระหว่างบริษัทและเอสโซ่ โดยกาหนดระยะเวลาและเงื่อนไขให้ผู้ประกอบธุรกิจที่ได้รับอนุญาตให้รวมธุรกิจต้องปิิบัติ ดังต่อไปนี้ 1 จำกัดกำรเพิม่ สัดส่วนกำรถือหุน้ โดยภำคร
Slide 50: Business and Sustainability Strategies
Business and Sustainability Strategies 4G Sustainability Growth Balanced Portfolio Strategy 4S Business Strategies Strategies Sustainability Performances Economic Dimension Environment Dimension Social Dimension Sustainability Report 50
Slide 51: Pathway to Net Zero 2050
Pathway to Net Zero 2050 Efficiency and Process Improvement = 30% Green and Blue Carbon = 10% Target Carbon Neutrality by 2030 Target Net Zero by Green Portfolio, Future Technology and Carbon Offset = 60% 2050 Carbon Utilization and Carbon Capture and Storage BCP Ecosystem Creation NET Strategy SCAN
Slide 52: Crude Oil Price Outlook
Crude Oil Price Outlook : Crude price move around 80-85 $/BBL in H2’23, Crude oil price will be supported by OPEC+ cut policy including Saudi Arabia’s voluntary cut 1 mbd during Jul-Sep to stabilize oil market and Fed rate hike cycle will be ended soon. While China gradually launches stimulus measur
Slide 53: Oil Outlook
Oil Outlook Weaker gasoil crack as supply concerns eased from high refinery run rates and more exports amid concern over economic recession weighed on demand. However, China’s demand recovery will limit the downside. Soften gasoline crack as higher exports amid the inflation concerns could cap the u
Bangchak Corporation Public Company — Q2 2023 Earnings Presentation on 6ix