ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q3 2011 Earnings Presentation
37 slides from ORLEN Spolka Akcyjna's earnings presentation, Nov 4, 2011
Slide 1: Solid foundations ensure safety in difficult macro environment
Solid foundations ensure safety in difficult macro environment PKN ORLEN consolidated financial results for 3 quarter 2011 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 4 November 2011 1
Slide 2: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 2
Slide 3: PKN ORLEN achievements in 3Q 2011
PKN ORLEN achievements in 3Q 2011 Financial parameters Operating profit: PLN 0,8 bn in 3Q 2011 and PLN 3,1 bn for 9 months 2011. Tough macro environment maintained: increase in crude oil price by 47% (y/y). decrease in model refining margin and URAL/Brent differential in total by (-) 0,6 USD/bbl (y/
Slide 4: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 4
Slide 5: Unfavourable macro environment in 3Q 2011 (y/y)
Unfavourable macro environment in 3Q 2011 (y/y) Crude oil price increase by 47% Decrease in total of refining margin and U/B diff by 15% Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl differential margin + 36 USD/bbl - 0,6 USD/bbl 117 113 105 4,8 87
Slide 6: Lower GDP growth and high prices limit fuel consumption
Lower GDP growth and high prices limit fuel consumption GDP increase1 Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 3Q112 3Q10 3Q112 - 1% 4,2 4,5 4,4 4,3 3,25 3,22 - 1% 3,3-3,6 1,09 1,08 Poland + 1% 4,6 - 3% 4,0 3,8 8,48 8,54 2,8 2
Slide 7: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 7
Slide 8: Over PLN 28 bn of revenues in 3Q 2011
Over PLN 28 bn of revenues in 3Q 2011 3Q10 2Q11 3Q11 PLN m 9M10 9M11 Increase of revenues by 30% (y/y) + 30% + 27% mainly due to growth of crude oil prices and higher sales volumes. 25 641 28 682 76 997 22 106 Revenues 60 616 Decrease of EBIT acc. to LIFO by PLN (-) 0,5 bn (y/y) due to worsening of
Slide 9: Over PLN 3,1 bn of operating profit for 9 months 2011
Over PLN 3,1 bn of operating profit for 9 months 2011 3Q10 2Q11 3Q11 change y/y PLN m 9M10 9M11 change y/y 789 1 009 778 -1% EBIT, of which: 2 376 3 127 32% 736 770 216 -71% EBIT acc. to LIFO 1 467 1 437 -2% 462 510 335 -27% Refining 1 871 1 873 0% 402 303 -215 - Refining acc. to LIFO 983 273 -72% 3
Slide 10: Sales volumes growth in all segments
Sales volumes growth in all segments 3Q10 2Q11 3Q11 kt 9M10 9M11 Total sales volumes in 3Q 2011 + 4% + 4% increased by 4% (y/y) up to 9,6 mt. 9 227 8 597 9 626 25 289 26 293 Refining sales increase by 3% (y/y) Sales volumes achieved in Polish and Lithuanian market at lower sales in Czech market due
Slide 11: Crude oil throughput increase (q/q) due to finished maintenance shutdowns in Plock refinery
Crude oil throughput increase (q/q) due to finished maintenance shutdowns in Plock refinery Crude oil throughput Utilisation ratio mt % 100 0% 100 97 97 100 7,4 7,5 7,4 97 96 6,4 6,8 90 93 87 87 90 85 85 80 83 74 69 70 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Fuel yield Comments % Gasoline
Slide 12: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 12
Slide 13: Safe level of debt and financial ratios
Safe level of debt and financial ratios Good financial standing Net debt and financial gearing % Financial in PLN bn, % gearing Decrease of indebtedness to PLN 9,3 bn due to consistently - 0,6 bn realized activities. 9,9 8,5 9,3 Maintaining optimal level of gearing, determined in the 7,8 7,9 strateg
Slide 14: Over PLN 4,2 bn of cash flow from operations for 9 months 2011
Over PLN 4,2 bn of cash flow from operations for 9 months 2011 change change 3Q10 2Q11 3Q11 PLN m 9M10 9M11 y/y y/y Cash flow from operations 1 625 1 589 734 -891 3 846 4 251 405 before working capital change -1 225 -582 -254 971 Working capital change -562 -2 806 -2 244 400 1 007 480 80 Cash flow f
Slide 15: Continuation of initiatives decreasing working capital
Continuation of initiatives decreasing working capital Change in working capital Effect of operations on change of working capital in 3Q2011, PLN bn as of 30.09.2011, PLN bn Change in working capital by PLN 0,6 bn in 3Q2011 Additional inflows in the amount of PLN 2,3 bn 2,9 9,8 0,0 0,0 2,3 7,5 -1,1
Slide 16: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 16
Slide 17: Actions releasing capital – POCCP approval for Polkomtel sale
Actions releasing capital – POCCP approval for Polkomtel sale Polkomtel Approval of Polish Office of Competition and Consumer Protection (POCCP) for sale of 100% of Polkomtel S.A. to Spartan Capital Holdings Sp. z o.o., including the entire 24,39% stake owned by PKN ORLEN. Final sales agreement is p
Slide 18: Continuation of upstream and energy projects
Continuation of upstream and energy projects Shale gas Crude oil PKN ORLEN has 8 exploration licenses. Latvian shelf – analysis of 3D seismic data Actions aiming to find a partner for cooperation and choice of drills’ locations are in in shale gas exploration and production are progress. taken. The
Slide 19: Agenda
Agenda Achievements in 3Q 2011 Macroeconomic environment Financial and operating results in 3Q 2011 Liquidity Realization of priorities Summary 19
Slide 20: Summary
Summary Solid foundations – base of safety PLN 28,7 bn of revenues; increase by 30% (y/y). PLN 0,8 bn of operating profit. 9,6 m tones of sales volumes; increase by 4% (y/y). Good liquidity situation Reduction in debt by PLN 0,6 bn (y/y) to PLN 9,3 bn, financial gearing to the level of 32%, i.e. to
Slide 21: Thank You for Your attention
Thank You for Your attention For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: ir@orlen.pl www.orlen.pl 21
Slide 22: Supporting slides
Agenda Supporting slides 22
Slide 23: Petrochemicals compensated lower results in refinery and retail (y/y)
PKN ORLEN Petrochemicals compensated lower results in refinery and retail (y/y) PLN m PLN -11 m 1.400 509 86 1.200 -129 1.000 789 778 800 -477 600 400 200 0 EBIT 3Q2010 Inventories valuation Macro Volumes Others EBIT 3Q2011 Positive impact of inventories valuation (y/y) as a result of growing crude
Slide 24: Refining segment
Refining segment Difficult market environment and unfavorable legislation changes PLN m PLN - 127 m 1.000 490 900 800 -106 700 -149 600 500 462 400 335 300 -362 200 100 0 EBIT 3Q2010 Inventories valuation Macro Volumes Others EBIT 3q2011 Positive impact of crude oil prices changes on inventories val
Slide 25: Retail segment
Retail segment Strengthening the position at unfavorable market conditions PLN m 350 PLN -128 m 309 300 250 18 200 11 181 -128 -29 150 100 50 0 EBIT 3q2010 Fuel margins Volumes Non-fuel sales Others EBIT 3q2011 Increase of fuel volume sales by 2% (y/y) achieved thanks to increases on Polish and Germ
Slide 26: Petrochemical segment
Petrochemical segment PTA as a lever of growth for increase of petrochemical segement result PLN m PLN + 225 m 400 224 5 367 350 300 250 200 19 150 142 -23 100 50 0 EBIT 3q2010 Inventories valuation Macro Volumes Others EBIT 3q2011 Positive impact of macro factors as a result of increasing margins o
Slide 27: Main P&L elements breakdown by key companies in 3Q2011
Main P&L elements breakdown by key companies in 3Q2011 Others & ORLEN ORLEN PKN ORLEN 3) ORLEN IFRS, PLN m Unipetrol 3) consolidation Group Group Change (unconsolidated) Lietuva excludings 3Q11 3Q10 Revenues 21 364 4 079 6 497 -3 258 28 682 22 106 30% EBITDA 938 84 -29 399 1 392 1 403 -1% Depreciati
Slide 28: Operating results breakdown by key segments and companies in 3Q2011
Operating results breakdown by key segments and companies in 3Q2011 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group Change (unconsolidated) Lietuva excludings 3Q11 3Q10 EBIT 669 -48 -131 288 778 789 -1% EBIT acc. to LIFO 69 -48 -77 272 216 736 -71% Refinery
Slide 29: ORLEN Lietuva Group Key elements of the profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account 1 change change 3Q10 2Q11 3Q11 IFRS, USD m 9M10 9M11 y/y y/y 1 542 2 102 2 218 44% Revenues 4 043 6 074 50% 16 36 -7 - EBITDA 66 102 55% -7 16 -24 -243% EBIT -4 45 - -21 29 -6 71% EBIT acc. to LIFO -11 5 - 9 9 -38 - Net result -33 22 -
Slide 30: UNIPETROL Group Key elements of the profit and loss account
UNIPETROL Group Key elements of the profit and loss account1 change change 3Q10 2Q11 3Q11 IFRS, CZK m 9M10 9M11 y/y y/y 22 505 25 948 24 065 7% Revenues 63 952 73 100 14% 1 170 1 012 505 -57% EBITDA 4 191 2 896 -31% 238 224 -230 - EBIT 1 556 565 -64% 513 274 -228 - EBIT acc. to LIFO 1 169 50 -96% 17
Slide 31: Key production data
Key production data change change change Key production data 3Q10 2Q11 3Q11 (y/y) (q/q) 9M10 9M11 (y/y) 1 Refinery in Poland Processed crude (tt) 3 664 3 480 3 953 8% 14% 10 665 10 733 1% Utilisation 97% 85% 97% 0 pp 12 pp 94% 90% -4 pp 4 Fuel yield 79% 74% 75% -4 pp 1 pp 77% 76% -1 pp 5 Middle dist
Slide 32: Macro environment in 4Q 2011
Macro environment in 4Q 2011 Crude oil price decrease Increase in total of refining margin and U/B diff Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl - 3 USD/bbl differential margin + 1,5 USD/bbl 117 113 110 105 4,8 4,9 87 4,4 4,3 1,5 0,8 3,4 2,9 2
Slide 33: Macro environment in 2011
Macro environment in 2011 8 PKN ORLEN Group model refining margin 2010 av erage 2011 2011 av erage 2010 6 4 3.8 USD/bbl 2 2.1 USD/bbl 0 -2 January February March April May June July August September October November December 5 Ural/Brent differential 2010 av erage 2011 2011 av erage 2010 4 3 2 2.0 U
Slide 34: Updated schedule of major installations maintenance shutdowns for 2011
Updated schedule of major installations maintenance shutdowns for 2011 1Q 11 2Q 11 3Q 11 4Q 11 HDS V Hydrogen Unit Hydrocracker H-Oil FCC Refinery Litvinov - refinery Litvinov - petrochemical Kralupy - HDS Paramo Fluid Catalytic Cracking maintenance shutdown in Plock refinery is in progress. Mainten
Slide 35: 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 36: 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 37: For more information on PKN ORLEN, please contact Investor Relations
For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax + 48 24 367 77 11 e-mail: ir@orlen.pl www.orlen.pl 37