ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q2 2017 Earnings Presentation
36 slides from ORLEN Spolka Akcyjna's earnings presentation, Jul 21, 2017
Slide 1: PKN ORLEN consolidated financial results 2Q17
PKN ORLEN consolidated financial results 2Q17 21 July 2017 #ORLEN2Q17@PKN_ORLEN
Slide 2: Agenda
Agenda Key highlights 2Q17 Macroeconomic environment Financial and operating results Liquidity and investments Market outlook for 2017 2
Slide 3: Key highlights 2Q17
Key highlights 2Q17 EBITDA LIFO: PLN 3,1 bn Positive impact of regulations limiting grey zone in Poland Sales volumes increase by 10% (y/y) Value creation Implementation of carsharing offer on retail stations Launching CCGT in Włocławek Appointment of PKN ORLEN’s Management Board for the next 3 year
Slide 4: Agenda
Agenda Key highlights 2Q17 Macroeconomic environment Financial and operating results Liquidity and investments Market outlook for 2017 4
Slide 5: Macro environment in 2Q17 (y/y)
Macro environment in 2Q17 (y/y) Downstream margin increase Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 2Q16 1Q17 2Q17 ∆ (y/y) +1,4 USD/bbl Diesel 71 77 79 11% 13,6 Gasoline 170 142 161 -5% 12,2 12,0 12,1 11,0 HHO -147 -118 -99 33% SN 15
Slide 6: Diesel consumption increase (y/y)
Diesel consumption increase (y/y) Positive impact of regulations limiting grey zone in Poland GDP increase1 Fuel consumption (diesel, gasoline)2 Change (%) to respective quarter of the last year mt 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 2Q17 2Q16 2Q17 + 26% 4,0 3,7÷4,1 + 6% 3,0 2,4 2,5 3,07 3,86 Poland 1,02
Slide 7: Agenda
Agenda Key highlights 2Q17 Macroeconomic environment Financial and operating results Liquidity and investments Market outlook for 2017 7
Slide 8: Financial results in 2Q17
Financial results in 2Q17 2Q16 1Q17 2Q17 PLN m 6M16 6M17 Revenues: increase by 19% (y/y) due to higher + 19% +29% crude oil prices and sales volumes 19 355 22 875 23 025 35 568 45 900 Revenues + 0,8 bn EBITDA LIFO: increase by PLN 0,5 bn (y/y) due to + 0,5 bn higher sales volumes, better macro and h
Slide 9: EBITDA LIFO
EBITDA LIFO Segments’ results in 2Q17 PLN m Downstream: positive impact of sales volumes increase, 576 82 3 058 better macro (y/y) and lack of negative effects from 2Q16 resulting from sales of products created in prior quarters at 2 550 -150 higher crude oil prices limited by negative impact of inv
Slide 10: Downstream – EBITDA LIFO
Downstream – EBITDA LIFO Higher sales volumes and better macro EBITDA LIFO PLN m Higher throughput by 10% (y/y) mainly due to relaunch of Steam Cracker and FCC installations in 4Q16 after 3000 2712 unplanned shutdowns 2550 2291 2363 Sales volumes increase by 10% (y/y), including: 2021 higher sales (
Slide 11: Downstream – operational data
Downstream – operational data Higher throughput and sales volumes increase Sales volumes Utilization ratio mt % 9 +10% Refineries 2Q16 1Q17 2Q17 ∆ (y/y) 8,1 8,1 8,2 7,9 7,9 Płock 94% 90% 79% -15 pp 8 7,7 7,6 Unipetrol 46% 88% 96% 50 pp 7,3 7,2 ORLEN Lietuva 79% 86% 89% 10 pp 7 6,8 Petrochemical inst
Slide 12: Downstream – Realization of energy industry cogeneration projects
Downstream Realization of energy industry cogeneration projects Strategic assumptions CCGT Włocławek CCGT Płock Industry cogeneration projects – with the highest profitability / the lowest risk, thanks to guarantee of permanent steam take off, which enables to achieve very high efficiency Good locat
Slide 13: Retail – EBITDA LIFO
Retail – EBITDA LIFO Record-high result in 2Q EBITDA LIFO PLN m Sales increase by 10% (y/y) 800 Market share increase in the Czech Rep. (y/y) 619 576 600 539 Fuel margins increase on Polish and Czech markets at 441 440 comparable level in Lithuania and lower margins on 349 369 372 German market (y/y
Slide 14: Retail – operational data
Retail – operational data Increase of sales, fuel margins and non-fuel margins (y/y) Sales volumes Number of petrol stations and market shares (by volume) mt #, % 2,5 + 10% 2,3 2,2 2,1 2,0 2,1 2,1 2,0 2,0 2,0 1,9 1,8 1,5 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Number of Stop Cafe and Stop
Slide 15: Upstream – EBITDA LIFO
Upstream – EBITDA LIFO Increase of average production by 17% (y/y) EBITDA LIFO Average production + 17% PLN m th. boe/d 15,0 120 15 14,2 14,4 13,9 99* 13,2** 12,8 80 82 58 60 10 42 27 7,4 7,3 6,7 6,8 14 13 10 7 5 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q
Slide 16: Upstream
Upstream Poland Canada Total reserves of crude oil and gas (2P) Total reserves of crude oil and gas (2P) Ca. 11 m boe* Ca. 103 m boe* (43% liquid hydrocarbons, 57% gas) 2Q17 2Q17 Average production: 1,2 th. boe/d (100% gas) Average production: 13,8 th. boe/d (40% liquid hydrocarbons) EBITDA: PLN 6 m
Slide 17: Agenda
Agenda Key highlights 2Q17 Macroeconomic environment Financial and operating results Liquidity and investments Market outlook for 2017 17
Slide 18: Cash flow
Cash flow Cash flow from operations Cash flow from investments PLN bn PLN bn 1,3 3,5 3,1 -0,6 -0,3 0,3 -0,9 -1,2 EBITDA LIFO effect Working capital Others Net inflow CAPEX CAPEX liabilities Net outflow LIFO decrease from 2Q17 change and from 2Q17 operations others* investment 2Q17 2Q17 Working capit
Slide 19: Safe level of debt and financial gearing
Safe level of debt and financial gearing Net debt and gearing Net debt/ EBITDA LIFO PLN bn, % Financial gearing 3,5 19,8 3,0 18,3 2,5 11,5 11,6 2,0 1,5 5,1 5,0 3,7 1,0 0,73 3,4 3,7 0,53 0,59 0,5 0,35 1,2 0,11 0,0 2Q16 3Q16 4Q16 1Q17 2Q17 2Q15 4Q15 2Q16 4Q16 2Q17 Diversified sources of financing (gro
Slide 20: CAPEX
CAPEX Planned CAPEX 2017 Realized CAPEX in 6M17 – split by segments PLN bn, % PLN m 5,5 93 1921 492 Downstream 2,1 212 5,8 Growth 3,3 Retail 0,4 1124 5,1 Upstream 0,8 Energy 145 Petrochemicals 499 Maintenance 2,2 Refining 480 and regulatory CAPEX Downstream Retail Upstream Corporate CAPEX 2017 funct
Slide 21: Agenda
Agenda Key highlights 2Q17 Macroeconomic environment Financial and operating results Liquidity and investments Market outlook for 2017 21
Slide 22: Market outlook for 2017
Market outlook for 2017 Macroeconomic environment Brent crude oil price – expected increase of yearly average crude oil price vs. the average for 2016 due to limited supply as a result of the main producers agreement (OPEC) at simultaneous higher production in US and higher consumption. Downstream m
Slide 23: 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 24: Supporting slides
Agenda Supporting slides 24 24
Slide 25: Results – split by quarter
Results – split by quarter PLN m 2Q16 1Q17 2Q17 ∆ (y/y) 6M16 6M17 ∆ Revenues 19 355 22 875 23 025 19% 35 568 45 900 29% EBITDA LIFO 2 594 2 321 3 058 18% 4 531 5 379 19% LIFO effect 409 519 -344 - -528 175 - EBITDA 3 003 2 840 2 714 -10% 4 003 5 554 39% Depreciation -508 -562 -581 -14% -1 023 -1 143
Slide 26: Results – split by segment
Results – split by segment 2Q17 Corporate Downstream Retail Upstream TOTAL PLN m functions EBITDA LIFO 2 550 576 82 -150 3 058 LIFO effect -344 - - - -344 EBITDA 2 206 576 82 -150 2 714 Depretiation -374 -103 -78 -26 -581 EBIT 1 832 473 4 -176 2 133 EBIT LIFO 2 176 473 4 -176 2 477 2Q16 Corporate Do
Slide 27: EBITDA LIFO – split by segment
EBITDA LIFO – split by segment PLN m 2Q16 1Q17 2Q17 ∆ (y/y) 6M16 6M17 ∆ Downstream 2 291 2 021 2 550 11% 4 046 4 571 13% Retail 441 372 576 31% 742 948 28% Upstream 42 80 82 95% 69 162 135% Corporate functions -180 -152 -150 17% -326 -302 7% EBITDA LIFO 2 594 2 321 3 058 18% 4 531 5 379 19% 27 27
Slide 28: Results - split by company
Results - split by company Others and 2Q17 ORLEN consolidation PLN m PKN ORLEN S.A. Unipetrol 2) Lietuva 2) corrections Total Revenues 16 546 4 953 3 645 -2 119 23 025 EBITDA LIFO 1 368 1 049 217 424 3 058 LIFO effect 1) -249 -78 -12 -5 -344 EBITDA 1 119 971 205 419 2 714 Depreciation -295 -110 -18
Slide 29: ORLEN Lietuva Group
ORLEN Lietuva Group USD m 2Q16 1Q17 2Q17 ∆ y/y 6M16 6M17 ∆ Revenues 882 1 013 954 8% 1 545 1 967 27% EBITDA LIFO 72 41 58 -19% 154 99 -36% EBITDA 85 54 54 -36% 144 108 -25% EBIT 82 50 49 -40% 137 99 -28% Net result 77 43 50 -35% 128 93 -27% Lower sales volumes in 2Q17 by (-) 4% (y/y) as a result of
Slide 30: UNIPETROL Group
UNIPETROL Group CZK m 2Q16 1Q17 2Q17 ∆ y/y 6M16 6M17 ∆ Revenues 20 551 29 850 31 181 52% 38 237 61 031 60% EBITDA LIFO 4 588 3 617 6 549 43% 4 938 10 165 106% EBITDA 4 266 3 971 6 060 42% 4 824 10 031 108% EBIT 3 798 3 347 5 369 41% 3 920 8 716 122% Net result 3 124 2 838 3 594 15% 3 113 6 432 107%
Slide 31: Macro environment in 3Q17
Macro environment in 3Q17 Downstream margin increase Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 3Q16 2Q17 3Q17* ∆ Q/Q ∆ Y/Y +2,1 USD/bbl Diesel 66 79 84 6% 27% 13,6 Gasoline 125 161 154 -4% 23% 13,1 12,2 12,0 12,1 HHO -119 -99 -87 12%
Slide 32: Macro environment in 3Q17
Macro environment in 3Q17 Refining margin and B/U differential increase Petrochemical margin decrease Model refining margin and Brent/Ural differential, USD/bbl Model petrochemical margin, EUR/t differential margin + 1,4 USD/bbl - 25 EUR/t 8,6 8,4 1.003 8,0 8,1 982 957 7,4 1,5 906 930 932 2,6 6,7 0,
Slide 33: Production data
Production data 2Q16 1Q17 2Q17 ∆ (y/y) ∆ (q/q) 6M16 6M17 ∆ Total crude oil throughput in PKN ORLEN 6 938 7 894 7 622 10% -3% 14 307 15 516 8% Utilization in PKN ORLEN 79% 90% 87% 8 pp -3 pp 82% 88% 6 pp Refinery in Poland 1 Processed crude (kt) 3 842 3 684 3 222 -16% -13% 7 328 6 906 -6% Utilization
Slide 34: 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 35: 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 36: For more information on PKN ORLEN, please contact Investor Relations
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