Slide 1: PKN ORLEN consolidated financial results 2Q13
PKN ORLEN consolidated financial results 2Q13 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 23 July 2013 1
Slide 2: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 2
Slide 3: Key highlights
Key highlights Shareholders Value creation PLN 1,5 per 1 share: dividend payment proved by Ordinary EBITDA LIFO in 2Q13: PLN 0,8 bn General Meeting in accordance with Management recommendation Contract with Rosneft for crude oil delivery to Unipetrol 26 July 2013: the dividend day Shale gas: 8th wel
Slide 4: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 4
Slide 5: Macro environment in 2Q13 (y/y)
Macro environment in 2Q13 (y/y) Crude oil price decrease Refining margin and B/U decrease Average Brent Crude Oil price, USD/bbl Model refining margin and Brent/Ural differential, USD/bbl 140 differential margin - 2,9 USD/bbl - 6 USD/bbl 117 119 8,9 120 113 113 105 109 108 110 110 2,1 102 7,0 1,3 5,
Slide 6: Further drop in fuel consumption on Polish market
Further drop in fuel consumption on Polish market GDP increase1 Fuel consumption (diesel, gasoline)2 Change (%) to respective quarter of last year mt 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 2Q13 2Q12 2Q13 - 4% - 4% 2,3 2,86 2,76 1,3 0,7 0,97 0,93 0,5 0,3÷0,7 Poland + 3% - 3% 8,26 8,55 4,69 4,56 0,5 0,4 0,0 -0
Slide 7: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 7
Slide 8: Financial results
Financial results 2Q12 1Q13 2Q13 PLN m 6M12 6M13 + 1% - 2% Revenues: increase by 1% (y/y) mainly due to sale of 27 955 27 472 28 311 57 202 55 783 obligatory reserves in 2Q13 that increased revenues from sales of merchandise Revenues - 0,9 bn - 0,8 bn EBITDA LIFO: PLN (-) 0,9 bn (y/y) due to lower r
Slide 9: EBITDA LIFO PLN (-) 0,9 bn (y/y) mainly due to decrease in refining result
EBITDA LIFO PLN (-) 0,9 bn (y/y) mainly due to decrease in refining result Segments’ results in 2Q13 Negative impact of: PLN m 531 Lower refining margins and B/U differential -4 837 -147 Lower petchem margins Strengthening of PLN against USD 369 One-off from sale of obligatory reserves, which will b
Slide 10: Refining – EBITDA LIFO PLN (-) 0,8 bn (y/y)
Refining – EBITDA LIFO PLN (-) 0,8 bn (y/y) due to macro worsening and negative one-off EBITDA LIFO quarterly (without impairments) PLN m 996 + 1.000 930 Crude oil throughput and utilisation increase 843 800 716 Fuel yields increase 574 575 600 458 462 Volumes increase 358 400 309 276 221 200 63 88
Slide 11: Refining – operational data
Refining – operational data Crude oil throughput increase by 5% (y/y) and sales volumes by 9% (y/y) Sales volumes Utilisation ratio mt % PKN ORLEN Unipetrol ORLEN Lietuva + 9% 100 7 98 98 6,3 6,3 94 93 6,1 6,0 6,1 97 5,9 89 6 5,7 5,5 5,6 5,5 92 86 5,2 5,1 5,1 79 86 5 4,7 80 80 80 57 4 2Q10 4Q10 2Q11
Slide 12: Retail – EBITDA LIFO
Retail – EBITDA LIFO Better result due to higher fuel margins EBITDA LIFO quarterly (without impairments) PLN m + 388 369 Higher fuel sales 400 360 341 295 306 Fuel margins improvement in German market at 300 269 264 stable levels (y/y) in Polish and Czech markets 194 190 200 156 Higher market share
Slide 13: Retail – operational data
Retail – operational data Increase of sales by 3% (y/y) Sales volumes Number of petrol stations and market shares (by volume) mt #, % + 3% # stations ∆ y/y % market ∆ y/y 2,0 2,0 2,0 1,9 1,9 1,9 PL 1 775 23 34,8% 1,0pp 1,9 1,9 1,8 1,8 CZ 337 0 13,7% 0,2pp 1,8 1,7 1,7 DE 558 -9 5,9% 0,3pp 1,6 1,5 LT
Slide 14: Petrochemicals – EBITDA LIFO
Petrochemicals – EBITDA LIFO PLN (-) 0,1 bn (y/y) mainly due to lower petrochemical margins EBITDA LIFO quarterly (without impairments) PLN m 694 + 700 667 678 Sales volumes increase 580 600 High PTA contribution: EBITDA LIFO PLN 166 m 531 506 491 500 470 Improvement of Anwil and BOP results 400 326
Slide 15: Petrochemicals – operational data
Petrochemicals – operational data Sales increase by 4% (y/y) Sales volumes PTA sales volumes and generated EBITDA mt kt, PLN m Volumes EBITDA 1,5 137 134 + 4% 119 115 1,4 1,4 110 1,3 1,3 1,3 1,2 1,3 1,2 1,2 1,2 1,2 1,2 1,2 150 166 148 125 1,1 82 1,0 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 2Q12 3Q12 4Q12
Slide 16: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 16
Slide 17: CAPEX
CAPEX Over PLN 800 m expenses in 1H13 CAPEX spent in 1H13 – split on segments CAPEX spent in 1H13 – split on growth and PLN m maintenance/regulatory PLN m Upstream 44 838 838 160 5,8 160 36 Growth 344 5,1 142 Downstream 104 140 351 Maintenance/ 44 494 Regulatory Energy Refining Retail Petchem Corpor
Slide 18: Upstream: Strategic assumptions and the progress of works
Upstream Strategic assumptions and the progress of works Strategic assumptions Unconventional projects Organic projects in exploration stages 10 exploration concessions / 9 th km2 Geopolitically safe regions: concentration in Central Europe and optional From the beginning of 2Q13 until today: in the
Slide 19: Upstream: Projects realization
Upstream Projects realization 1 PROJECT PROJECT Unconventional projects BALTIC BALTIC (shale gas and closed gas) • 7 wells finished, including: 5 vertical, 2 horizontal • First fracturing finished • CAPEX in 1H13 amounted PLN 97 m Conventional projects (crude oil and gas) • 3 wells finished includin
Slide 20: Energy: Strategic assumptions and the progress of works
Energy Strategic assumptions and the progress of works Strategic assumptions Building a 463 MWe CCGT plant in Wloclawek Concentration on industrial cogeneration – projects with the highest In 2Q13 ground works on the building site and preparation for building profitability / the lowest risk of main
Slide 21: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 21
Slide 22: Cash flow
Cash flow PLN 4,3 bn cash flow from operations Cash flow from operations Cash flow from investments PLN bn PLN bn Working capital change by PLN 3,8 bn 2,2 4,3 0,2 0,3 1,1 0,5 0,1 -0,5 Net inflow Sales of VAT Sales Received Other Net inflow -0,2 -0,6 before obligatory of obligatory VAT from working f
Slide 23: Debt
Debt Safe financial conditions Net debt and gearing Covenants PLN bn, % Financial gearing, % Net debt/EBITDA LIFO Net debt/EBITDA 27,7 26,9 3,5 3,22 25,0 24,4 22,1 3,0 2,5 2,35 2,25 8,6 1,94 1,86 8,2 2,0 6,8 1,58 1,65 5,9 1,46 5,2 1,41 1,5 1,52 1,0 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 U
Slide 24: Agenda
Agenda Key highlights Macroeconomic environment Financial and operating results Investments Liquidity and debt Outlook 2013 24
Slide 25: Outlook 2013
Outlook 2013 Macro in 3Q13 (till 19.07.2013) Maintenance in 2H13 Model refining margin with differential: 4,2 USD/bbl; PKN – H-Oil, Hydrogen Plant decrease by (-) 1,8 USD/bbl (q/q) Anwil – fertilizers Model petrochemical margin: 675 EUR/t; decrease by (-) Unipetrol – Fluidal Catalytic Cracking (FCC)
Slide 26: Thank You for Your attention
Thank You for Your attention www.orlen.pl For more information on PKN ORLEN, please contact Investor Relations Department: phone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: ir@orlen.pl 26
Slide 27: Supporting slides
Agenda Supporting slides 27
Slide 28: Results of the quarters
Results of the quarters (PLN, m) 2Q13 1Q13 2Q12 ∆ y/y 6M13 6M12 ∆ Revenues 28 311 27 472 27 955 1% 55 783 57 202 -2% EBITDA LIFO 837 932 1 776 -53% 1 769 2 556 -31% EBITDA 398 879 918 -57% 1 277 2 436 -48% EBIT LIFO 302 394 1 233 -76% 696 1 434 -51% Effect LIFO 439 53 858 -49% 492 120 310% EBIT -137
Slide 29: EBITDA LIFO split by segments
EBITDA LIFO split by segments (PLN, m) 2Q13 1Q13 2Q12 ∆ y/y 6M13 6M12 ∆ Refining 88 276 929 -91% 364 1 238 -71% Refining - LIFO effect 412 69 748 -45% 481 64 652% Retail 369 123 341 8% 492 457 8% Petrochemicals 531 678 667 -20% 1 209 1 157 4% Petrochemicals - LIFO effect 27 -16 110 -75% 11 56 -80% U
Slide 30: Results split by segments
Results split by segments 2Q13 (PLN, m) Refining Retail Petrochemicals Upstream Corporate functions Total EBITDA LIFO 88 369 531 -4 -147 837 EBITDA -324 369 504 -4 -147 398 EBIT LIFO -150 282 350 -4 -176 302 Effect LIFO -412 0 -27 0 0 -439 EBIT -562 282 323 -4 -176 -137 2Q12 (PLN, m) Refining Retail
Slide 31: Results split by companies 2Q13
Results split by companies 2Q13 Others and IFRS ORLEN consolidation PLN, m PKN ORLEN S.A. Unipetrol 2) Lietuva 2) corrections Total Revenues 20 709 4 014 5 541 -1 953 28 311 EBITDA LIFO 440 108 9 280 837 Depreciation 251 93 95 96 535 EBIT LIFO 189 15 -86 184 302 LIFO effect 1) 261 107 52 19 439 EBIT
Slide 32: EBITDA LIFO - split by segments and companies in 2Q13
EBITDA LIFO - split by segments and companies in 2Q13 Others and IFRS consolidation PLN, m PKN ORLEN S.A. Unipetrol 4) ORLEN Lietuva 4) corrections Total Refining 1) 34 -21 37 38 88 Refining - LIFO effect 278 63 52 19 412 Retail 241 21 4 103 369 Petrochemicals 2) 295 110 0 126 531 Petrochemicals - L
Slide 33: ORLEN Lietuva Group
ORLEN Lietuva Group Key elements of the profit and loss account 1 IFRS, USD m 2Q13 1Q13 2Q12 ∆ y/y 6M13 6M12 ∆ Revenues 1 723 2 257 1 437 20% 3 980 3 368 18% EBITDA LIFO 5 39 23 -78% 43 28 54% EBITDA -12 33 -56 79% 21 -3 - EBIT -30 16 -68 56% -14 -33 58% Net result -24 -1 -86 72% -25 -49 49% EBITDA
Slide 34: UNIPETROL Group
UNIPETROL Group Key elements of the profit and loss account 1 IFRS, CZK m 2Q13 1Q13 2Q12 ∆ r/r 6M13 6M12 ∆ Revenues 24 710 24 776 27 072 -9% 49 486 52 493 -6% EBITDA LIFO 663 438 1 362 -51% 1 101 1 402 -21% EBITDA -1 540 171 - 539 863 -38% EBIT -588 -70 -467 -26% -658 -545 -21% Net result -429 -148
Slide 35: Macro environment in 3Q13 (q/q)
Macro environment in 3Q13 (q/q) Crude oil price increase Refining margin and B/U decrease Average Brent Crude Oil price, USD/bbl Model refining margin and Brent/Ural differential, USD/bbl differential margin + 6 USD/bbl 8,9 9,1 - 1,8 USD/bbl 108 110 110 113 108 0,7 102 2,1 5,8 6,0 5,5 1,7 0,7 4,2 1,
Slide 36: Macro environment in 2013
Macro environment in 2013 14 12 ORLEN Group model refining margin 2012 average 2013 2013 average 2012 10 8 5,7 USD/bbl 6 4,7 USD/bbl 4 2 0 -2 January February March April May June July August September October November December 5 Ural/Brent differential 2012 average 2013 2013 average 2012 4 3 2 1,3
Slide 37: Production data
Production data 2Q13 1Q13 2Q12 ∆ (y/y) ∆ (q/q) 6M13 6M12 ∆ Total crude oil throughput in PKN ORLEN (tt) 6 663 7 003 6 362 5% -5% 13 666 13 017 -5% Utilisation in PKN ORLEN 86% 90% 81% 5 pp -4 pp 88% 82% 6 pp Refinery in Poland 1 Processed crude (tt) 3 636 3 504 3 836 -5% 4% 7 140 7 492 -5% Utilisati
Slide 38: Dictionary
Dictionary PKN ORLEN model refining margin = revenues (93,5% Products = 36% Gasoline + 43% Diesel + 14,5% HHO) - costs (100% input: crude oil and other raw materials). Total input calculated acc. to Brent Crude quotations. Spot market quotations. Spread Ural Rdam vs fwd Brent Dtd = Med Strip - Ural
Slide 39: Disclaimer
Disclaimer This presentation (“Presentation”) has been prepared by PKN ORLEN S.A. (“PKN ORLEN” or “Company”). Neither the Presentation nor any copy hereof may be copied, distributed or delivered directly or indirectly to any person for any purpose without PKN ORLEN’s knowledge and consent. Copying,
Slide 40: www.orlen.pl
www.orlen.pl For more information on PKN ORLEN, please contact Investor Relations Department: phone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: ir@orlen.pl 40