ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q3 2014 Earnings Presentation
40 slides from ORLEN Spolka Akcyjna's earnings presentation, Oct 22, 2014
Slide 1: Better environment downstream
Better environment downstream PKN ORLEN consolidated financial results for 3Q 2014 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 22 October 2014
Slide 2: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 2
Slide 3: Key highlights 3Q14
Key highlights 3Q14 Value creation Financial strength EBITDA LIFO: PLN 2,1 bn Dividend paid: PLN 616m (PLN 1,44 per share) Very good downstream and retail results Financial gearing: 25,9% 652 th boe of production in Canada Net debt: PLN 5,9 bn People Index of Success 2013 - PKN ORLEN laureate of pre
Slide 4: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 4
Slide 5: Macro environment in 3Q14 (y/y)
Macro environment in 3Q14 (y/y) Downstream margin increase Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 3Q14 2Q14 3Q13 ∆ (y/y) +3,4 USD/bbl Diesel 111 91 117 -5% Gasoline 193 195 176 10% 12,9 HHO -215 -254 -243 12% 10,4 SN 150 202 149 12
Slide 6: Impact of grey zone in Poland and economy slowdown in Germany
Impact of grey zone in Poland and economy slowdown in Germany GDP increase1 Fuel consumption (diesel, gasoline)2 Change (%) to respective quarter of last year mt 3Q13 4Q13 1Q14 2Q14 3Q14 3Q13 3Q14 3Q13 3Q14 - 3% - 3% 2,7 3,4 3,3 2,9÷3,4 3,00 2,91 2,0 0,99 0,95 Poland - 2% - 2% 9,18 9,04 2,5 4,89 4,8
Slide 7: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 7
Slide 8: Reported financial results
Reported financial results 3Q13 2Q14* 3Q14 PLN m 9M13 9M14* - 4% - 5% 30 304 29 160 28 651 85 975 81 930 Revenues + 1,4bn - 3,6 bn 2 117 2 494 765 EBITDA LIFO -1 076 -4 146 + 0,3 bn - 4,4 bn 1 127 1 461 2 364 EBITDA -2 056 -4 293 + 0,4 bn - 4,4 bn 601 1 001 795 EBIT -3 562 -4 817 ~ 0,0 bn - 5,2 bn 6
Slide 9: Financial results
Financial results* 3Q13 2Q14* 3Q14 PLN m 9M13 9M14* - 4% - 5% Revenues: decrease by (-) 4% (y/y) mainly due to lower 30 304 28 651 29 160 85 975 81 930 crude oil price and stronger PLN against USD and EUR Revenues + 1,4 bn + 1,4 bn EBITDA LIFO: increase by PLN 1,4 bn (y/y) mainly due 2 117 to downst
Slide 10: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 10
Slide 11: EBITDA LIFO: Increase in downstream result by PLN 1,4 bn (y/y)
EBITDA LIFO Increase in downstream result by PLN 1,4 bn (y/y) Segments’ results in 3Q14 Positive impact of: PLN m 441 52 Increase in downstream margin by 3,4 USD/bbl (y/y) 2 117 1 766 -142 Increase in total sales by 3% (y/y) in all segments Dynamic growth of non-fuel offer; 51 new Stop Cafe and Stop
Slide 12: Downstream – EBITDA LIFO
Downstream – EBITDA LIFO PLN 1,8 bn as a result of good macro and sales increase by 2% EBITDA LIFO quarterly (without impairments*) + Increase in downstream margin by 3,4 USD/bbl (y/y) mainly due PLN m to improvement in margins on gasoline, HHO as well as 1 766** propylene and benzene 1 800 1 597 1
Slide 13: Downstream (Refining) – operational data
Downstream (Refining) – operational data Limited throughput mainly due to maintenance shutdowns Sales volumes Utilization ratio mt % PKN ORLEN Unipetrol ORLEN Lietuva 7 - 1% 100 97 96 6,3 6,3 6,2 6,2 92 6,1 6,1 90 5,9 6,0 5,9 86 6 5,7 83 93 5,5 5,6 5,5 5,4 79 78 5,2 5,1 5,1 81 83 80 72 5 4,7 4,7 58
Slide 14: Downstream (Petrochemicals) – operational data
Downstream (Petrochemicals) – operational data Sales increase by 15% (y/y); cyclical Olefins maintenance shutdown Sales volumes PTA sales volumes and EBITDA mt + 15% kt, PLN m Volumes EBITDA 159 1,5 1,5 146 145 1,4 139 1,4 1,4 1,3 1,3 1,4 1,3 106 1,2 1,3 1,2 1,2 1,2 1,2 1,2 1,2 1,2 1,2 162 160 157 1
Slide 15: Downstream (Energy)
Downstream (Energy) Realization of industry cogeneration projects Strategic assumptions Building a CCGT plant in Wloclawek (463 MWe) Concentration on industrial cogeneration – projects with the highest In 3Q14 finished major construction works of key power plant profitability / the lowest risk, amon
Slide 16: Retail – EBITDA LIFO
Retail – EBITDA LIFO Maintained very good result despite lower fuel margins EBITDA LIFO quarterly (without impairments*) PLN m + Sales volumes in total increase by 2% (y/y) on the all 500 451 441 markets 388 369 400 341360 359 Market share increase on the all markets (y/y) 306 325 295 300 269 264 23
Slide 17: Retail – operational data
Retail – operational data Sales increase by 2%; further growth of non-fuel offer Sales volumes Number of petrol stations and market shares (by volume) mt #, % 2,5 + 2% 2,1 2,1 2,0 2,0 2,0 2,0 1,9 1,9 1,9 1,8 1,9 1,9 1,9 1,8 1,8 1,8 1,7 1,7 1,6 1,5 1,5 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q1
Slide 18: Upstream: Exploration projects in Poland
Upstream Exploration projects in Poland Unconventional projects Poland Conventional projects Exploration projects of shale gas Currently 10 wells finished: 7 vertical, 3 horizontal and 3 fracking of horizontal wells Concentration on the most promising areas 1 2 1 Lublin Shale (10 wells) 1 1 1 1 In 3
Slide 19: Upstream: Production projects in Canada
Upstream Production projects in Canada Canada TriOil – upstream company Assets After closing the acquisition of Birchill Exploration and consolidation with TriOil in June 2014 portfolio of assets in Canadian Alberta province is located on four areas: Lochend, Kaybob, Pouce Coupe and Ferrier/Strachan
Slide 20: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 20
Slide 21: Cash flow in 3Q14
Cash flow in 3Q14 Working capital decrease by PLN 1,1 bn Cash flow from operations Cash flow from investments PLN bn PLN bn PLN 1,1 bn 0,9 2,2 1,1 0,2 0,0 0,0 -0,9 -0,9 Net inflow Decrease of Increase of Increase of Net inflow CAPEX Change of Net outflow before inventories receivables payables from
Slide 22: Debt
Debt Net debt and gearing Stable level of indebtedness and financial gearing PLN bn, % Financial gearing, % Safe level of covenants 28,5* 24,8 25,9 Gross debt structure: USD 5%, EUR 60%, PLN 25%, CZK 10% 17,8 17,0 Net debt decrease by PLN 0,4 bn (q/q) including net repayment of 9,0 credits and decre
Slide 23: CAPEX
CAPEX PLN 2,9 bn expenditures for 9 months 2014 (basic pool) Planned CAPEX 2014 (basic pool) CAPEX 9M14 (basic pool) – split by segment PLN bn PLN m 3,8 184 2916** 359 196 2177 Growth 2,0 Downstream 65% 5,8 Retail 5,1 10% Energy* 1229 25% Maintenance/ Petchem 369 1,8 Regulatory Upstream Refining 579
Slide 24: Agenda
Agenda Key highlights 3Q14 Macroeconomic environment Financial results Segment results Liquidity and investments Market outlook 24
Slide 25: Market outlook
Market outlook Macro - assumptions Economy – GDP forecast growth Brent crude oil price – expected a slight decrease in 4Q14 as a GDP - Polish economy will speed up to 3,2 percent in 2014 and to result of additional supply from Libya and Iran as well as increasing 3,4 percent in 2015 – NBP (October 2
Slide 26: Thank You for Your attention
Thank You for Your attention 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 www.orlen.pl
Slide 27: Supporting slides
Agenda Supporting slides 27 27
Slide 28: Results – split by quarters
Results – split by quarters (PLN, m) 3Q14 2Q14* 3Q13** ∆ y/y 9M14* 9M13** ∆ Revenues 29 160 28 651 30 304 -4% 81 930 85 975 -5% EBITDA LIFO 2 117 856 765 177% 3 926 2 494 57% Effect LIFO -656 -147 362 - -980 -130 -654% EBITDA 1 461 709 1 127 30% 2 946 2 364 25% Depreciation -460 -524 -526 13% -1 506
Slide 29: Results – split by segments
Results – split by segments Corporate 3Q14 (PLN m) Refining Petrochemicals Energy Downstream Retail Upstream Total functions EBITDA LIFO 1 181 585 0 1 766 441 52 -142 2 117 Effect LIFO -620 -36 0 -656 0 0 0 -656 EBITDA 561 549 0 1 110 441 52 -142 1 461 Depreciation -146 -164 0 -310 -89 -37 -24 -460
Slide 30: EBITDA LIFO - split by segments
EBITDA LIFO - split by segments (PLN, m) 3Q14 2Q14* 3Q13** ∆ y/y 9M14* 9M13** ∆ Refining 1 181 274 51 2216% 1 729 415 317% LIFO effect (Refining) -620 -147 328 - -929 -153 -507% Petrochemicals 585 339 369 59% 1 471 1 538 -4% LIFO effect (Petrochemicals) -36 0 34 - -51 23 - Energy 0 -1 -1 -100% -1 -2
Slide 31: EBITDA LIFO (Downstream)
EBITDA LIFO (Downstream) Refining and petrochemicals contribution to results Refining Petrochemicals EBITDA LIFO quarterly (without impairments*) EBITDA LIFO quarterly (without impairments*) PLN m PLN m 1 181 694 1 200 700 667 656 996 1 000 930 580 585 843 600 547 716 506 491 516 800 470 574 575 500
Slide 32: Results 3Q14 - split by companies
Results 3Q14 - split by companies Others and IFRS ORLEN consolidation PLN, m PKN ORLEN S.A. Unipetrol 2) Lietuva 2) corrections Total Revenues 20 779 5 145 5 737 -2 502 29 160 EBITDA LIFO 1 225 346 174 372 2 117 LIFO effect1) -520 -48 -88 0 -656 EBITDA 705 298 86 372 1 461 Depreciation -264 -73 -8 -
Slide 33: ORLEN Lietuva Group
ORLEN Lietuva Group Key elements of the profit and loss account IFRS, USD m 3Q14 2Q14* 3Q13 ∆ y/y 9M14* 9M13 ∆ Revenues 1 822 1 701 2 142 -15% 4 807 6 122 -21% EBITDA LIFO 54 -1 -4 - 32 39 -18% EBITDA 26 7 13 100% 4 34 -88% EBIT 22 -11 -6 - -36 -20 -80% Net result 22 -106 -5 - -126 -29 -334% EBITDA
Slide 34: UNIPETROL Group
UNIPETROL Group Key elements of the profit and loss account IFRS, CZK m 3Q14 2Q14* 3Q13 ∆ y/y 9M14* 9M13 ∆ Revenues 34 041 32 440 24 859 37% 95 290 74 345 28% EBITDA LIFO 2 304 1 044 235 880% 4 019 1 336 201% EBITDA 1 982 1 181 737 169% 3 703 1 276 190% EBIT 1 482 549 160 826% 1 945 -498 - Net resul
Slide 35: Macro environment in 4Q14 (q/q)
Macro environment in 4Q14 (q/q) Downstream margin increase Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 4Q14* 3Q14 4Q13 ∆ (q/q) ∆ (y/y) +0,9 USD/bbl Diesel 116 111 116 5% 0% Gasoline 171 193 120 -11% 43% 13,8 12,9 HHO 13% 26% -186 -215 -
Slide 36: Macro environment in 4Q14 (q/q)
Macro environment in 4Q14 (q/q) Refining margin and B/U differential increase Petrochemical margin increase Model refining margin and Brent/Ural differential, USD/bbl Model petrochemical margin, EUR/t differential margin + 0,5 USD/bbl + 42 EUR/t 7,1 824 6,6 782 1,5 736 756 741 1,8 719 4,7 3,5 0,2 2,
Slide 37: Production data
Production data 3Q14 2Q14 3Q13 ∆ (y/y) ∆ (q/q) 9M14 9M13 ∆ Total crude oil throughput in PKN ORLEN 7 385 6 480 7 461 -1% 14% 20 055 21 127 -5% Utilization in PKN ORLEN 91% 80% 96% -5 pp 11 pp 83% 91% -8 pp Refinery in Poland 1 Processed crude (tt) 3 931 3 232 4 095 -4% 22% 10 666 11 235 -5% Utilizat
Slide 38: Dictionary
Dictionary Model downstream margin = revenues (90,7% Products = 22,8% Gasoline + 44,2% Diesel + 15,3% HHO + 1,0% SN 150 + 2,9% Ethylene + 2,1% Propylene + 1,2% Benzene + 1,2% PX) – costs (input 100% = 6,5% Brent crude oil + 91,1% URAL crude oil + 2,4% natural gas) Model refining margin = revenues (9
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: Contact Investor Relations Department
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 www.orlen.pl