ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q3 2006 Earnings Presentation
23 slides from ORLEN Spolka Akcyjna's earnings presentation, Nov 9, 2006
Slide 1: Consolidated financial results of PKN ORLEN Q3'2006 (IFRS)
Consolidated financial results of PKN ORLEN Q3’2006 (IFRS) Igor Chalupec, CEO Paweł Szymański, CFO 9 November 2006 1
Slide 2: Agenda
Agenda Financial results in Q3’06 Analysis of results in Q3’06 - segments Supporting slides 2
Slide 3: Increase in the PKN ORLEN results despite more challenging macroeconomic environment
Increase in the PKN ORLEN results despite more challenging macroeconomic environment Key financial data in Q3’061 change y/y PLN m Q3'2005 Q2'2006 Q3'2006 change q/q [%] [%] 1 2 3 4=3/1 5=3/2 EBITDA 1 623 1 644 1 681 3.6% 2.3% Net profit 985 881 1 026 4,2% 16.5% ex minority shareholders Cash flow fr
Slide 4: Strong increase in volume sales of retail fuels and petrochemical products
Strong increase in volume sales of retail fuels and petrochemical products shows impact of marketing initiatives of PKN ORLEN Key operating data in Q3’06 change y/y change y/y Q3'2005 Q3'2006 [%] [%] PKN ORLEN PKN ORLEN PKN ORLEN PKN ORLEN PKN ORLEN PKN ORLEN mother comp mother comp mother comp 1 2
Slide 5: Dynamic increase of EBITDA in comparable market conditions confirms efficiency
Dynamic increase of EBITDA in comparable market conditions confirms PKN ORLEN’s efficiency EBITDA (PLN m) Q3’2006 ROACE (%) Q3’2006 (comparable market conditions)1 (comparable market conditions)1 20,0 15,0 1,000 +67.6% 10,0 2 050 +10.4 p.p. 5,0 21.0 1 223 10.6 0 0,0 Q3'2005 Q3'2006 Q3'2005 Q3'2006 F
Slide 6: Agenda
Agenda Financial results in Q3’06 Analysis of results in Q3’06 - segments Supporting slides 6
Slide 7: Unfavourable macroeconomic conditions in refining segment in Q3'2006
Unfavourable macroeconomic conditions in refining segment in Q3’2006 y/y and q/q Exchange rates1 Refinery margin $3.96/b average in Q3’20063. Decrease by 35% y/y and 29.9% q/q 3Q’ 06 4Q’ 06 5,0 PLN/USD 2006 PLN/EUR 2006 16 2 2006 2005 2006E PLN/USD 2006E 2 PLN/EUR 2006E 2 14 4,5 3Q’ 06 12 4Q’06 4,0
Slide 8: Simplified P&L account
Simplified P&L account Increase in net profit q/q by 16.5%, despite unfavourable macro conditions Unipetrol effect change y/y IFRS, PLN m Q3'2005 Q2'2006 Q3'2006 change q/q [%] Q3'2006 [%] 1 2 3 4 5=4/1 6=4/2 Revenues 13 074 13 545 3 742 14 879 13.8% 9.8% Operating profit 1 091 1 200 189 1 179 8.1%
Slide 9: Operating costs
Operating costs Cost discipline maintained – decrease of fixed costs q/q Unipetrol effect IFRS, PLN m Q3'05 Q2'06 Q3'06 y/y [%] q/q [%] Q3'06 1 2 3 4 5=4/1 5=4/2 Raw m aterials and energy 6 541 7 629 2 253 7 972 22% 4% Costs of goods for resale 3 387 3 161 640 3 834 13% 21% External services 633 791
Slide 10: Increase of operating profit as a result of corporate strategy and Unipetrol results
Increase of operating profit as a result of corporate strategy and increase of Unipetrol results (y/y) Unipetrol IFRS, in m PLN 3Q'2005 2Q'2006 effect 3Q'2006 y/y [%] q/q [%] 3Q'2006 1 2 3 4 5=4/1 6=4/2 Operating profit , of which 1 091 1 200 189 1 179 8.1% -1.8% 1 Refining 1 109 926 133 917 -17.3%
Slide 11: Refining
Refining Concentration on efficiency improvement and product slate optimisation. Good results despite unfavourable macroeconomic conditions. Q3’05 Q3’06 in PLN m 32 29 17 76 43 1600 125 126 68 1400 76 85 1200 70 1000 Concentration on cost effectiveness 481 800 Unfavourable and margin macroeconomic I
Slide 12: Retail
Retail Excellent effects of the implemented strategy. Profit increased over 3.5 times Q3’05 Q3’06 In PLN m 2 1 200 180 14 160 34 140 120 34 100 187 80 52 Sales optimization in all distribution channels 60 caused volume and margin growth on fuel and non-fuel products. 40 50 20 0 ∆ OPTIMA ∆ ORLEN Deut
Slide 13: Petrochemicals
Petrochemicals Significant sales volume increase is a key driver of segment result. In PLN m Q3’05 Q3’06 400 20 9 350 69 19 24 300 Refers to higher Olefin II 48 Unit depreciation 250 154 200 73 Mainly due to increase 150 Sustainable sales volume in production volumes increase due to upgraded product
Slide 14: Chemicals
Chemicals Significant improvement of segment performance. Q3’05 Q3’06 In PLN m Includes results of 6 80 OPTIMA Programme PLN 22 m 60 10 40 42 57 20 0 71 Refers to depreciation and amortisation -20 -52 changes made in 2005 in the process of Unipetrol asset revaluation -40 -60 ∆ Anwil Segment results
Slide 15: Results of OPTIMA Program after Q3'06
Results of OPTIMA Program after Q3’06 Achieved savings of over PLN 200 m in PLN m Programme realisation and results after 3Q’ 06 are in line with expectations • Progress in the majority of 39 segments is at a satisfactory or very good (in refining and others) level 75 • Refining segment leads with 1
Slide 16: Agenda - Supporting slides
Agenda Financial results in Q3’06 Analysis of results in Q3’06 - segments Supporting slides z Orlen Deutschland z Petrochemical market – environment summary z Unipetrol z OPTIMA –cost reduction according to plan expectations 16
Slide 17: ORLEN Deutschland
ORLEN Deutschland Restructuring of the business visible in the results IFRS, PLN m Q3'05 Q2'06 Q3'06 y/y [%] q/q [%] 1 2 3 4=3/1 5=3/2 Assets 1 485 1 509 1 490 0.3% -1.3% Equity 459 350 350 -23.7% 0.0% IFRS, in PLN m Q2'06 y/y [%] q/q [%] Revenues 2 391 2 327 2 369 -0.9% 1.8% Cost of sale -2 384 -2
Slide 18: Petrochemical market from January 2005 to November 2006
Petrochemical market from 1 January 2005 to 3 November 2006 Ethylene Propylene 1000 1000 900 in EUR/tone 900 in EUR/tone 800 800 700 700 600 600 432 499 500 413 500 464 398 398 383 400 386 362 338 400 353 346 293 338 300 300 211 211 200 200 100 100 0 0 1-Jan-05 1-Apr-05 1-Jul-05 1-Oct-05 1-Jan-06 1-
Slide 19: Unipetrol Group - Selected financial data (1/2)
Unipetrol Group Selected financial data for Q3’06 vs. Q3’05 (1/2) Preliminary financial results of main subsidiaries of Unipetrol a.s. Q1-Q3 Q3 IFRS in CZK m Q1-Q3'05 Q1-Q3'06 Q3'05 Q3'06 Comments y/y y/y Chemopetrol a.s. • Strong revenues from sales driven by higher prices of Revenues 23 408 25 768
Slide 20: Unipetrol Group - Selected financial data (2/2)
Unipetrol Group Selected financial data for Q3’06 vs. Q3’05 (2/2) Preliminary financial results of main subsidiaries of Unipetrol a.s. Q1-Q3 Q3 IFRS in CZK m Q1-Q3'05 Q1-Q3'06 Q3'05 Q3'06 Comments y/y y/y Kaucuk a.s. • High overall sales in 3Q’06 were achieved thanks to high Revenues 7 937 8 556 2 3
Slide 21: Unipetrol Group - Financial and operational results for Q3'06
Unipetrol Group Financial and operational results for Q3’06 Preliminary consolidated financial highlights of Unipetrol a.s. for Q3’06 IFRS, in CZK m 31/12/2005 30/09/2006 [%] 1 2 3 4 5=2/1 Equity 39 696 42 613 - - 7,3% Total assets 76 442 76 702 - - 0,3% IFRS, in m CZK 1-3Q05 1-3Q06 3Q05 3Q06 1-3Q y
Slide 22: Unipetrol Group - Selected financial data in 2005-2006
Unipetrol Group Selected financial data in 2005-2006 Selected operational highlights for Q1’05 to Q3’06 Operational data* 2004 Q1'05 Q2'05 Q3'05 Q4'05 2005 Q1'06 Q2'06 Q3'06 y/y [%] q/q [%] Total sales, of which 4 692 1 118 1 326 1 400 1 320 5 164 1 187 1 365 1 513 8.1% 10.8% - light products (kt) 1
Slide 23: Results of OPTIMA Program after Q3'06 in individual areas
Results of OPTIMA Program after Q3’06 in individual areas in PLN m Execution and results after Q3’06 in line with expectations 53 18 9 32 215 36 68 Procurement Support Retail Production Logistics Subsidiaries Total (BONUS) functions 23