Grupa Azoty Spolka Akcyjna · GPW:ATT
Grupa Azoty Spolka Akcyjna — Grupa Azoty — H1 2020 Earnings Presentation
63 slides from Grupa Azoty Spolka Akcyjna's earnings presentation, Sep 10, 2020
Slide 1: H1 2020 Results Presentation
H1 2020 RESULTS PRESENTATION September 10th 2020
Slide 2: Q2 2020 Financial Results
2 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION Q2 2020 FINANCIAL RESULTS PLNm Q2 2020 H1 2020 CONSOLIDATED REVENUE Down 17.1% 2,269 5,373 on lower prices of key products and volumes across all business lines in Q2 2020 CONSOLIDATED EBITDA EBITDA up PLN +29m, EBITDA margin 14% (up +4pp) 315
Slide 3: Developments
3 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION DEVELOPMENTS Impact of COVID-19 pandemic on Grupa Azoty Group’s business Key capital projects Polimery Police project Granulated fertilizer unit in Puławy Polish Hydrogen Agreement Development of the 3D printing business
Slide 4: Measures Taken in Response to the Coronavirus Pandemic
4 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION MEASURES TAKEN IN RESPONSE TO THE CORONAVIRUS PANDEMIC The Grupa Azoty Group has been actively involved in the fight against the pandemic since its outbreak and promptly decided to support institutions and entities fighting the COVID- 19 pan
Slide 5: Shield 4.0
5 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION SHIELD 4.0 Having recorded declines in revenue, the Parent and some of its subsidiaries will take steps to avail themselves of the financial support mechanisms under the Act on Special Measures to Prevent, Counteract and Combat COVID-19, Other
Slide 6: Polimery Police Project
POLIMERY POLICE PROJECT
Slide 7: Polimery Police Project: Closing of Fundraising
7 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION POLIMERY POLICE PROJECT Closing of fundraising for the Polimery Police project January 17th 2020 – The Office of Competition and Consumer Protection (UOKiK) issued a decision approving a concentration consisting in Grupa Azoty, HEC, KIND and
Slide 8: Polimery Police Project: Progress in EPC Contract Performance
8 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION POLIMERY POLICE PROJECT Progress in EPC contract performance Construction work is currently under way on all five sub-projects (PDH, PP, Handling and Storage Terminal, Interconnections and Auxiliary Units, and PP Logistics) The general con
Slide 9: Progress on the Polimery Police Project
9 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION PROGRESS ON THE POLIMERY POLICE PROJECT Photo 1. Handling and storage terminal (marine gas terminal).
Slide 10: Progress on the Polimery Police Project
10 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION PROGRESS ON THE POLIMERY POLICE PROJECT Photo 2. Handling and storage terminal (marine gas terminal) – view of propane tanks from above.
Slide 11: Progress on the Polimery Police Project
11 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION PROGRESS ON THE POLIMERY POLICE PROJECT Photo 3. PDH sub-project – view of main pipe-rack linking PDH and PP units.
Slide 12: Progress on the Polimery Police Project
12 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION PROGRESS ON THE POLIMERY POLICE PROJECT Photo 4. PDH sub-project – view of main pipe-rack linking PDH and PP units.
Slide 13: Progress on the Polimery Police Project
13 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION PROGRESS ON THE POLIMERY POLICE PROJECT Photo 5. PP and PP logistics sub-project – view from logistics side.
Slide 14: Financing of Polimery Police Project
14 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION FINANCING OF POLIMERY POLICE PROJECT INVESTOR AGREED AMOUNT TARGET SHAREHOLDING STRUCTURE * Hyundai (HEC) USD 73m KIND USD 57m Grupa LOTOS PLN 500m Grupa LOTOS 17,30% Azoty 64,93% HEC & GRUPA AZOTY’S INVESTMENT KIND 17,77% The Grupa Azoty Gro
Slide 15: Major Developments: Granulated Fertilizer Unit in Puławy
15 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION MAJOR DEVELOPMENTS Granulated fertilizer unit in Puławy precommissioning and commissioning of the facility for production of ammonium nitrate-based granulated fertilizers (July 1st 2020) the combined production capacity of the two new lin
Slide 16: Major Developments: Polish Hydrogen Agreement
16 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION MAJOR DEVELOPMENTS POLISH HYDROGEN AGREEMENT – THE CLIMATE MINISTRY’S INITIATIVE Grupa Azoty is among the signatories of the letter of intent to establish a partnership for building a hydrogen economy and to enter into a sectoral hydrogen a
Slide 17: Results of the Leading Companies of the Grupa Azoty Group
RESULTS OF THE LEADING COMPANIES OF THE GRUPA AZOTY GROUP
Slide 18: Group Companies' Q2 2020 Financial Highlights
18 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION GROUP COMPANIES’ Q2 2020 FINANCIAL HIGHLIGHTS PLNm REVENUE EBITDA NET PROFIT/(LOSS) Grupa Azoty S.A. (sep. data) 304 25 161 Grupa Azoty PUŁAWY Group 653 118 57 Grupa Azoty POLICE Group 567 56 7 Grupa Azoty Kędzierzyn 369 81 38 COMPO EXPERT 36
Slide 19: Group Companies' H1 2020 Financial Highlights
19 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION GROUP COMPANIES’ H1 2020 FINANCIAL HIGHLIGHTS PLNm REVENUE EBITDA NET PROFIT/(LOSS) Grupa Azoty S.A. 825 94 130 (sep. data) Grupa Azoty 1607 287 140 PUŁAWY Group Grupa Azoty 1215 99 29 POLICE Group Grupa Azoty 886 172 87 Kędzierzyn COMPO EXPE
Slide 20: Consolidated Financial Information of Grupa Azoty Group
CONSOLIDATED FINANCIAL INFORMATION OF GRUPA AZOTY GROUP
Slide 21: Grupa Azoty Group Financial Highlights
21 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION GRUPA AZOTY GROUP FINANCIAL HIGHLIGHTS (PLNm) CONTRIBUTION TO THE GROUP’S REVENUE IN Lower sales volumes in AGRO FERTILIZERS H1 2020 Other Grupa Azoty S.A. 16% 9% Lower fertilizer prices Grupa Azoty Puławy 22% Plastics prices pushed dow
Slide 22: Grupa Azoty Group Financial Highlights: EBITDA
22 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION GRUPA AZOTY GROUP FINANCIAL HIGHLIGHTS CONTRIBUTION TO THE GROUP’S (PLNm) EBITDA IN H1 2020 Other 2% Grupa Azoty S.A. Lower volumes of fertilizer sales COMPO EXPERT 12% 12% Natural gas prices at record lows Grupa Azoty Kędzierzyn Declin
Slide 23: EBITDA Bridge
23 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION EBITDA BRIDGE KEY FACTORS Q2 2020 +190 Decrease in natural PLNm gas prices 19 222 251 1 20 + 61 Lower feedstock prices +40 Propylene 286 315 +47 Benzene/Phenol +4 Potassium chloride -32 Coal/Energy EBITDA Q2 2019 Sales volume* Sales prices Fe
Slide 24: Compensation Received under the Energy-Intensive Sectors Act
24 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION COMPENSATION RECEIVED UNDER THE ACT ON THE COMPENSATION SCHEME FOR ENERGY-INTENSIVE SECTORS AND SUBSECTORS OF JULY 19TH 2019 COMPENSATIONRECOGNISED IN H1 2020 FOR 2019 (PLNm) Grupa Azoty S.A. 12.4 AS AT JUN 30 2020 Grupa Azoty PUŁAWY 44.6 Gru
Slide 25: Effect of Pandemic on Chemical Industry
25 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION EFFECT OF PANDEMIC ON CHEMICAL INDUSTRY AGRICULTURAL MARKET The COVID-19 pandemic had no significant impact on the crop segment of Poland’s agriculture. FERTILIZERS Except for temporary local-scale logistic constraints, the Covid-19 pandemic
Slide 26: Chemical Industry's Performance in the Face of Pandemic Q2 2020
26 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION CHEMICAL INDUSTRY’S PERFORMANCE IN THE FACE OF PANDEMIC Q2 2020 REVENUE CHANGE EBITDA CHANGE Q2 2020/2019 Q2 2020/2019 Grupa Azoty -17% Grupa Azoty 10% CF -20% CF -30% BASF -12% BASF -31% K+S -4% K+S -33% LANXESS -17% LANXESS -24% NUTRIEN -3%
Slide 27: Segments
27 GRUPA AZOTY GROUP – CONSOLIDATED FINANCIAL INFORMATION SEGMENTS Q2 2020 REVENUE ENERGY OTHER ACTIVITIES 2% 3% PLASTICS 10% AGRO FERTILIZERS 46% CHEMICALS 23% TOTAL COMPO EXPERT FERTILIZERS FERTILIZERS 62% 16%
Slide 28: Segments: Fertilizers
28 SEGMENTS FERTILIZERS PRODUCT CATEGORIES Q2 2020 REVENUE Q/Q H1 Y/Y Other (PLNm) Q2 2019 Q2 2020 H1 2019 6% change 2020 CHANGE Nitrogen Segment fertilizers and 1,572 1,401 -11% 3,669 3,328 -9% Specialty fertilizers revenue ammonia 22% 36% EBITDA 186 162 -13% 587 454 -23% EBITDA 12% 12% 0pp 16% 14%
Slide 29: Segments: Chemicals
29 SEGMENTS CHEMICALS PRODUCT CATEGORIES Q2 2020 REVENUE Q/Q H1 Y/Y Titanium (PLNm) Q2 2019 Q2 2020 H1 2020 change 2019 CHANGE white Other 15% Segment 682 531 -22% 1,434 1,216 -15% 24% revenue 51 109 114% 148 202 36% Melamine EBITDA 13% EBITDA 7% 21% 14pp 10% 17% 7pp margin OXO alcohols 18% Urea (te
Slide 30: Segments: Plastics
30 SEGMENTS PLASTICS PRODUCT CATEGORIES Q2 2020 REVENUE Q/Q H1 Y/Y Natural (PLNm) Q2 2019 Q2 2020 H1 2020 change 2019 CHANGE polyamide 76% Segment 381 218 -43% 791 591 -25% revenue 19 -14 -174% 71 -12 -117% Modified EBITDA polyamide 11% EBITDA 5% -6% -11pp 9% -2% -11pp margin Other 8% Caprolactam 5%
Slide 31: Grupa Azoty Group Finances as at June 30th 2020
31 GRUPA AZOTY GRUPA AZOTY GROUP FINANCES AS AT JUNE 30TH 2020 SECURED CORPORATE FINANCING AVAILABLE FUNDING LIMITS CASH PKO and bank syndicate 52 51 • Revolving and umbrella credit facility 845 • PLN 3,885m 2,550 957 EBRD • Term Loan Agreement 907 1,653 • PLN 615m EIB Corporate credit facilities •
Slide 32: Investments
32 GRUPA AZOTY – INVESTMENTS INVESTMENTS CAPEX PROJECTS IN H1 2020 CAPEX CAPITAL EXPENDITURE PLNm including: (PLNm) Growth capex 656 * Maintenance capex 127 2016 2017 2018 2019 Mandatory investments 47 H1 2020 *Excluding equity investments Purchase of finished goods 15 Other (components, major overh
Slide 33: Grupa Azoty Puławy Group
GRUPA AZOTY PUŁAWY GROUP
Slide 34: Grupa Azoty Puławy Group Financial Highlights
34 GRUPA AZOTY PUŁAWY GROUP GRUPA AZOTY PUŁAWY GROUP FINANCIAL HIGHLIGHTS (PLNm) REVENUE Other KEY DRIVERS Energy 2% 3% Lower revenue due to: Plastics • lower prices (down PLN 216m H1/H1 and PLN 77m Q2/Q2) 9% • lower sales volumes (down PLN 127m H1/H1 and PLN 151m Q2/Q2) lower natural gas prices (
Slide 35: Grupa Azoty Puławy Group Financial Highlights: EBITDA Drivers
35 GRUPA AZOTY PUŁAWY GROUP GRUPA AZOTY PUŁAWY GROUP FINANCIAL HIGHLIGHTS (PLNm) DRIVERS (H1/H1) PLNm EBITDA 189.8 Decrease in natural gas prices 18.8% Compensation for energy-intensive 17.9% 68.5 industry EBITDA 26.0 Impairment losses on assets in 2019 Lower benzene prices and 23.5 EBITDA1 consumpt
Slide 36: Segments
36 GRUPA AZOTY PUŁAWY GROUP SEGMENTS AGRO PRODUCT GROUPS H1/H1 CHANGE DETERIORATED PERFORMANCE DUE TO LOWER SELLING PRICES AND VOLUMES OF PRODUCTS DESPITE ATTRACTIVE Nitrogen fertilizers ; -17% GAS PRICES Q/Q H1 H1 H1/H1 Phosphate and compound fertilizers; -27% (PLNm) Q2 2019 Q2 2020 change 2019 202
Slide 37: Ongoing Capex Projects
37 GRUPA AZOTY PUŁAWY GROUP ONGOING CAPEX PROJECTS Construction of coal-fired power generation unit CAPITAL EXPENDITURE IN H1 2020 1,200 million Budget spent: 3% PLN 204.6m Upgrade of nitric acid unit and construction of new nitric acid installations, neutralization and production of new fertilizers
Slide 38: Key Developments in H1 2020
38 GRUPA AZOTY PUŁAWY GROUP KEY DEVELOPMENTS IN H1 2020 changes on the Management Board of Grupa Azoty Zakłady Azotowe Puławy merger of Koncept Sp. z o.o. and Prozap Sp. z o.o. (registered with National Court Register on January 29th 2020) new commercial contracts for additional production cap
Slide 39: Grupa Azoty Police Group
GRUPA AZOTY POLICE GROUP
Slide 40: Grupa Azoty Police Group Financial Highlights
40 GRUPA AZOTY POLICE GROUP GRUPA AZOTY POLICE GROUP FINANCIAL HIGHLIGHTS (PLNm) REVENUE Polymers Other KEY DRIVERS Pigments 0,01% 2% 15% Favourable effect of a significant decline in natural gas prices on the Company’s performance Lower average selling prices of most products Lower margins on
Slide 41: Segments
41 GRUPA AZOTY POLICE GROUP SEGMENTS FERTILIZERS Good situation in the nitrogen sector on a steep decline in natural Compound gas prices fertilizers Less favourable price relation of products vs raw materials on the 67% compound fertilizers market (PLNm) H1 2019 H1 2020 H/H change Segment revenu
Slide 42: Key Developments in H1 2020
42 GRUPA AZOTY POLICE GROUP KEY DEVELOPMENTS IN H1 2020 Awards and distinctions ‘Most Reliable in the Fuel and Chemical Sector’ for the Polimery Police Project. Distinction granted by ISBnews Agency. Capex The Company launched 17 new investment projects in H1 2020, with a total budget of PLN 25.4m.
Slide 43: Thank you for your attention.
Thank you for your attention.
Slide 44: Disclaimer
44 DISCLAIMER The information presented below has been prepared by the Grupa Azoty Group (the “Group”) solely for the purpose of its presentation to investors and market analysts on September 10th 2020 (this “Presentation”). By participating in the meeting at which the Presentation is delivered or b
Slide 45: Other Leading Companies Financial Highlights
45 APPENDIX 1 OTHER LEADING COMPANIES FINANCIAL HIGHLIGHTS
Slide 46: Grupa Azoty Kędzierzyn
GRUPA AZOTY KĘDZIERZYN 46
Slide 47: Grupa Azoty Kędzierzyn Financial Highlights
47 GRUPA AZOTY KĘDZIERZYN GRUPA AZOTY KĘDZIERZYN FINANCIAL HIGHLIGHTS (PLNm) KEY DRIVERS REVENUE Revenue from sale of products fell (PLN -81m) on lower prices of Fertilizer and Oxoplast products (PLN -158m), with sales volumes up (PLN +77m); Other Decrease in the cost of raw materials (PLN +107m
Slide 48: Key Developments in H1 2020
48 GRUPA AZOTY KĘDZIERZYN GROUP KEY DEVELOPMENTS IN H1 2020 I. Appointment of the Supervisory Board and Management Board of Grupa Azoty ZAK S.A. for new terms of office. II. Execution of a contract with the general contractor for the Research & Development Centre. III. Work on investment projects un
Slide 49: Key Developments in H1 2020
49 GRUPA AZOTY KĘDZIERZYN GROUP KEY DEVELOPMENTS IN H1 2020 IV. Grant of financial support from the Guaranteed Employee Benefits Fund to maintain jobs (Shield 4.0): 1st tranche – August 10th 2020 – PLN 3,669,754.32, 2nd tranche – August 24th 2020 – PLN 3,669,754.32. V. Grant by the Energy Regulatory
Slide 50: COMPO EXPERT
COMPO EXPERT
Slide 51: COMPO EXPERT Financial Highlights
51 COMPO EXPERT COMPO EXPERT FINANCIAL HIGHLIGHTS (PLNm) PRODUCT CATEGORIES Q2 KEY DRIVERS Other 2020 - Subdued demand in most regions due to the pandemic spread Liquid fertilizers and 3% biostimulants Granular NPK (Europe, South America, Asia), … fertilizers… + Sales at prices higher than the year
Slide 52: Appendix: Grupa Azoty S.A. Separate Data
52 APPENDIX 2 GRUPA AZOTY S.A. SEPARATE DATA
Slide 53: Grupa Azoty S.A. Financial Highlights
53 GRUPA AZOTY S.A. – SEPARATE FINANCIAL INFORMATION GRUPA AZOTY S.A. FINANCIAL HIGHLIGHTS (PLNm) H1 2020 REVENUE KEY DRIVERS Agro Sharp decline in PLASTICS reflecting lower market demand Fertiliz ers (mainly from the automotive industry) in the wake of the 42% COVID-19 pandemic Higher sales vol
Slide 54: Segments
54 GRUPA AZOTY S.A. – SEPARATE FINANCIAL INFORMATION SEGMENTS FERTILIZERS PRODUCT CATEGORIES Q2 2020 Q/Q H1 Y/Y (PLNm) Q2 2019 Q2 2020 H1 2019 change 2020 CHANGE Other Activities 17% Segment 148 125 -16% 391 347 -11% revenue EBITDA 4 14 250% 59 67 14% EBITDA 3% 11% 8pp 15% 19% 4pp margin Nitrogen fe
Slide 55: Appendix: Quarterly Results
55 APPENDIX 3 QUARTERLY RESULTS
Slide 56: Consolidated Results of the Grupa Azoty Group, by Quarter
56 0 100 300 400 500 600 700 200 -500 0 500 1 000 1 500 2 000 2 500 FINANCIAL DATA (PLNm) Q1 2008 Q2 2008 Q3 2008 EBITDA Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 REVENUE AND NET PROFIT Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 GRUPA AZOTY
Slide 57: Consolidated Results of the Grupa Azoty Puławy Group, by Quarter
57 (PLNm) -1 000 -750 -500 -250 0 250 500 -250 0 250 500 750 1 000 1 250 FINANCIAL DATA Q1 2008 Q2 2008 Q3 2008 QUARTER Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 GRUPA AZOTY PUŁAWY GROUP Q2 2010 EBITDA AND NET DEBT Q3 2010 Q4 2010 REVENUE AND NET PROFIT Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Slide 58: Consolidated Results of the Grupa Azoty Police Group, by Quarter
58 GRUPA AZOTY POLICE GROUP CONSOLIDATED RESULTS OF THE GRUPA AZOTY POLICE GROUP, BY QUARTER REVENUE AND NET PROFIT Revenue Net profit (PLNm) 1 000 900 150 800 700 50 600 -50 500 400 -150 300 200 -250 100 0 -350 EBITDA AND EBITDA MARGIN EBITDA EBITDA MARGIN 100 0,0% -100 -50,0% -300 -100,0% Q1 2008
Slide 59: Appendix: Volumes
59 | APPENDIX 4 VOLUMES
Slide 60: Agro Fertilizers: Volumes
60 APPENDIX 4 AGRO FERTILIZERS VOLUMES (‘000 TONNES) 300 200 100 0 Specialty fertilizers SRF & CRF Fertigation and Specialty Liquid foliar fertilizers NPK fertilizers and fertilizers biostimulants 300 200 Compound fertilizers 100 0 NPK fertilizers NP fertilizers Granular NPK fertilizers 300 200 Nitr
Slide 61: Agro Fertilizers: Prices
61 APPENDIX 4 AGRO FERTILIZERS PRICES Prices of compound fertilizers (NPK, DAP), potassium chloride and phosphate rock Prices of wheat, maize and rapeseed USD/t 450 2 000 4,50 400 1 800 4,00 3,50 350 1 600 3,00 300 1 400 2,50 250 1 200 2,00 200 1 000 1,50 150 800 1,00 100 600 0,50 50 400 0,00 Q1 Q2
Slide 62: Chemicals: Volumes and Prices
62 APPENDIX 4 CHEMICALS VOLUMES (‘000 TONNES) PRICES 150 Prices of 2-EH, DOTP and propylene 1600 1400 100 1200 1000 50 800 600 0 OXO Plasticizers Urea Melamine Titanium 400 alcohols (technical white Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EUR/t 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 201
Slide 63: Plastics: Volumes and Prices
63 APPENDIX 4 PLASTICS VOLUMES (‘000 TONNES) PRICES Prices of PA6, caprolactam, benzene and phenol 50 2400 2500 2200 2300 40 2000 2100 1800 1900 30 1600 1700 1400 1500 20 1200 1300 1000 1100 10 800 900 600 700 0 400 500 Caprolactam Natural Modified Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 polyamide