Shell Pilipinas Corporation · PSE:SHLPH
Shell Pilipinas — Pilipinas Shell Petroleum — FY2018 Earnings Presentation
15 slides from Shell Pilipinas's earnings presentation, Mar 22, 2019
Slide 1: FY 2018 results
FY 2018 results Delivering a world-class investment case Pilipinas Shell Petroleum Corporation March 22, 2019 1
Slide 2: Definitions and cautionary note
Definitions and cautionary note References in this presentation to “our Company” or the “Corporation” and to “PSPC” refer to SHLPH. The words “we”, “us” and “our” are used to refer to SHLPH or to those who work for SHLPH. This presentation contains forward-looking statements concerning the financial
Slide 3: Summary
Summary Pursue Fueling Key messages ▪ Pilipinas Shell celebrates its105th year in the country profitable fuel progress for attributable to strong corporate governance, consistent growth opportunities the Filipino strategy, and commitment to its core values ▪ Marketing businesses positioned for growt
Slide 4: Oil and Gas sector in 2018: short-term headwinds, but strong fundamentals remain
1Q 2018 2Q 2018 3Q 2018 4Q 2018 Oil and Gas TRAIN IMPLEMENTATION HIGH INFLATION >5%: INFLATION EASING sector in 2018: PH 6.7% recorded in September, In November (6%) highest in 9 years and December (5.1%) Short-term headwinds, LOW REFINING MARGINS FOR MOST OF 2018: REGION Average Regional Refining M
Slide 5: Financial highlights
Financial Marketing businesses continue to deliver solid earnings despite headwinds partially offsetting highlights impact of drastic decline in crude prices in Q4 5.1 NIAT (PHPb) 5.7 PHPb 8 Total volume (Bn litres) 6 14.1 Cash flow from operations (PHPb) 4 9.9 Free cash flow (PHPb) 2 0 15 ROACE (%)
Slide 6: Robust marketing delivery, low regional refining margins throughout 2018
EBITDA adjusted for COSA stands at PHP10b Robust Pbn marketing 12 delivery, low regional refining margins throughout 5 2018 FY15 FY16 FY17 FY18 -2 Marketing Refinery and supply Retail volume growth Retail volume growth Premium fuel penetration Strong marketing delivery Marketing volume growth Strong
Slide 7: CFFO increases by 29% sufficient to fund CAPEX and dividend payments
Capital Investments + ROACE CFFO increases Pbn 5 35% by 29% 27% To be updated with CAPEX sufficient to 24% fund CAPEX 15% and dividend payments 0 0% FY16 FY17 FY18 Retail Others Commercial ROACE Cash flow from operations Average capital employed + Gearing Pbn Pbn 15 60 40% 27% 18% 17% Pilipinas Shel
Slide 8: Retail retained loyal customers despite over 20% increase in pump prices
Retail retained Leading Brand Preference Share at ~45% loyal customers Brand share preference increases to 45% in Q4, 12% ahead of 50% despite over biggest competitor 20% increase in pump prices vs Strong volume growth in PY Q4 vs previous quarters 0% Pilipinas Peer group RETAIL Shell FUELS Most eff
Slide 9: Non-fuels retailing business continues to enjoy double-digit growth
Non-fuels retailing 11% Non-fuels contribution to retail gross margins business Increase in NFR Income continues to +30% from 2016 enjoy double- digit growth Overdelivered on new store growth guidance New Select shops and deli2go offerings in key retail stations FY18 Guidance Total New sites Select
Slide 10: Increased premium penetration in key segments to partially offset structural decline in power demand
Commercial fuels Increased ◼ Higher premium penetration softens impact premium of decline in power sector demand ◼ Strategic wins in non-power sectors penetration in key segments Aviation to partially ◼ Strong volume growth vs PY offset structural ◼ Renewal of contract with key airlines decline in L
Slide 11: PSPC delivery vs key IPO commitments
KEY PRIORITIES 2018 DELIVERY Maximizing cash generation while maintaining Recorded CFFO of P14.1b, up 29% competitive returns PSPC delivery Disciplined expansion and capital allocation Delivered P4.1b of CAPEX, ~50% invested in retail; ROACE vs key IPO at 15%; Gearing at 17% commitments Attractive d
Slide 12: 2019 Outlook: Growing our Marketing Businesses
RETAIL FUELS: LEVERAGING ON NETWORK COMMERCIAL FUELS: 2019 Outlook EFFICIENCY STRONG BRAND, WORLD- CLASS FUELS GROWING NON-POWER SECTORS ▪ IMO 2020 Preparedness Growing our ▪ Improving value proposition and promotion Marketing 50-70 new retail stations/year of differentiated fuels IN STRATEGIC LOCAT
Slide 13: 2019 Outlook: Optimising an efficient and competitive supply chain
TABANGAO REFINERY 2019 Outlook COST TRANSFORMATION JOURNEY Optimising an Improve competitiveness by looking at efficiency improvements and waste elimination efficient and HYDROGEN OPTIMISATION PROJECT competitive Capability to produce higher value products, increase crude slate flexibility, and impr
Slide 14: Investment case highlights
WORLD CLASS SAFETY AWARD-WINNING SOCIAL STRONG ONE OF THE PERFORMANCE AND PERFORMANCE AND CORPORATE HIGHEST RELIABILITY INVESTMENTS GOVERNANCE YIELDING RECOGNITION FROM AGORA, ACES AND ANVIL I-ACGR SCORE OF 91% STOCKS IN PSE DIVIDEND YIELD >5% ZERO INJURIES AND FATALITIES; 2ND AMONG SHELL REFINERIES
Slide 15: Slide 15
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