Industries Of Qatar Co. · QSE:IQCD
Industries Of Qatar — Industries Qatar — Q3 2021 Earnings Presentation
53 slides from Industries Of Qatar's earnings presentation, Sep 30, 2021
Slide 1: Industries Qatar Investor Relations Presentation
CLASSIFICATION: C0 - NON-CONFIDENTIAL Industries Qatar Investor Relations Presentation 30 September 2021 “One of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products.” Publication Date: March […], 2015
Slide 2: Disclaimer
CLASSIFICATION: C0 - NON-CONFIDENTIAL DISCLAIMER The Companies in which Industries Qatar Q.P.S.C. directly and indirectly owns investments are separate entities. In this presentation, “IQ” and “the Group” are sometimes used for convenience in reference to Industries Qatar Q.P.S.C. This presentation
Slide 3: Table of Content
CLASSIFICATION: C0 - NON-CONFIDENTIAL Table of Content 1. About IQ 2. Competitive strengths 3. Regional peer review 4. Macroeconomic updates 5. Group results (For the nine-month period ended 30 September 2021) 6. Segment results (For the nine-month period ended 30 September 2021) 7. CAPEX and Cash f
Slide 4: About IQ
CLASSIFICATION: C0 - NON-CONFIDENTIAL About IQ 4 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 4
Slide 5: IQ at a glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ at a glance Overview • Industries Qatar (IQ) was incorporated and • QatarEnergy provides most head office listed on the Qatar Exchange in 2003. functions through a comprehensive service- • IQ is the second largest company at Qatar level agreement. Exchange by
Slide 6: IQ business segments at a glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ business segments at a glance Business segments overview Segment size by Revenue • Through its group companies, IQ operates 20.6% in three distinct business segments: Petrochemical, Fertilizer and Steel; 33.2% Petrochemicals • Production facilities are princi
Slide 7: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths 7 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 7
Slide 8: Competitive strengths
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive strengths • Assured feedstock supply Low cost • Economies of scale and operationally diversified producer • Synergy benefits Strong • Solid liquidity position, with no long-term debt financial • Strong cash flow generation with stable EBITDA margins
Slide 9: Regional peer review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Regional peer review IQ ranked #28 among “2021 Forbes List of Top 100 Companies in the Middle East” 9 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 9
Slide 10: Competitive positioning versus regional peers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Competitive positioning versus regional peers Market Cap. (USD’ billion) Total Assets (USD’ billion) Peer 1 101.9 Peer 1 80.6 IQ 25.7 IQ ranks #2 IQ 10.3 IQ ranks #2 Peer 2 22.0 Peer 2 9.0 Peer 3 10.7 Peer 3 6.5 Peer 4 8.6 Peer 4 5.3 Note: Data as of 30-Sep-21 N
Slide 11: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Slide 12: Macroeconomic updates
CLASSIFICATION: C0 - NON-CONFIDENTIAL Macroeconomic updates Petrochemicals • Economic momentum carried forward from the tail end of last year, on the back of ongoing vaccination campaign linking to easing of lockdowns in major markets, allowed sequential recovery in demand for PE products. 1650 LDPE
Slide 13: Group results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Group results (For the nine-month period ended 30 September 2021) 13 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 13
Slide 14: 9M-21 results at a Glance
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results at a Glance Growth vs. 9M-20 Revenue 76% EBITDA 161% Net profit 360% QR 14.1 billion QR 7.0 billion QR 5.6 billion EBITDA Margin: 49.9% EPS: QR 0.93 RoAE: 19.0% Group reported the highest quarterly profit since Q2-21, on the back of constructive
Slide 15: Operational performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Operational performance review Production (MT’ 000) Production (MT’000) • 9M-21 production volumes marginally declined compared to 9M-20, mainly due mothballing of certain steel facilities which started since mid of 2020, planned and unplanned maintenance shutdo
Slide 16: Financial performance review
CLASSIFICATION: C0 - NON-CONFIDENTIAL Financial performance review Revenue Revenue (QR’ billion) (QR Billion) • 9M-21 Group revenue increased significantly versus same period last year, mainly on account of overall increase in blended selling prices and enhanced sales volumes. • Q3-21 Group revenue
Slide 17: Net profit variance analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Net profit variance analysis IQ continue to benefit from higher product prices reflected in Group’s bottom-line profitability 9M-21 vs 9M-20 Amounts in QR ‘millions Q3-21 vs Q2-21 Amounts in QR ‘millions 17 Industries Qatar, IR Presentation, 9M-21 17
Slide 18: IQ cash flow generation
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ cash flow generation IQ’s free cash flow generation capability continue to remain robust Amounts in QR ‘millions IAS 31 IAS 31 Free cash flows generated during nine-month period ended 30 September 2021: QR 5.6 billion Free cash flows generated during three-mo
Slide 19: Robust EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL Robust EBITDA margins Despite the volatile trends in commodity prices, IQ’s EBITDA margins continue to remain robust 90 60% 80 51% 52% Oil price (USD/bbl), brent 50% IQ EBIDTA Margins (%) 46% 70 40% 41% 37% 39% 60 40% 50 30% 28% 27% 30% 40 22% 30 20% 20 10% 10 Q
Slide 20: IQ's plant operating rates
CLASSIFICATION: C0 - NON-CONFIDENTIAL IQ’s plant operating rates IQ’s plant operating rates remained stable 114.0% 113.5% 106.6% 106.4% 106.3% 105.1% 103.9% 103.7% 102.9% 102.3% 100.9% 99.7% 99.5% 99.4% 99.1% 99.1% 99.0% 98.9% 98.1% 95.8% 93.9% 93.3% 92.2% 91.8% 88.5% 86.8% 86.5% 82.7% 80.2% 80.0% 7
Slide 21: Geographic analysis – IQ Group revenue
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographic analysis – IQ Group revenue Asia remained Group’s largest market, while its presence in Americas and Middle East continued to be substantial Europe 6% Qatar North America Middle East 12% Asia, ex. ISC 14% 9% 29% South America Africa Indian sub-contine
Slide 22: Segment results
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segment results (For the nine-month period ended 30 September 2021) 22 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 22
Slide 23: Segmental Details: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL SegmentalDetails: Segmental Details Petrochemicals • The companies in the Petrochemical segment (Qapco, Qatofin, Qafac and QVC) are engaged in the production of: Product (in 000 MT PA) Capacity1 Ethylene 920 LDPE 600 LLDPE 280 Methanol 500 MTBE 305 Total 2,605 •
Slide 24: 9M-21 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 9M-21 results: Petrochemicals selling prices Production: Production up by 6% compared to 9M-20, as the segment had lesser number of planned and unplanned maintenance shutdowns until date during 2021 compared to last year; Q3-21 produ
Slide 25: 9M-21 results: Petrochemicals
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Petrochemicals Analysis of segment revenue & net profit Revenue: QR 4.7 billion, up by 72% compared to the same period last year. This increase in revenue was mainly linked to higher product prices (+62%) and better sales volumes (+6%); Q3-21
Slide 26: 9M-21 results: Petrochemicals EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Petrochemicals Analysis of segment EBITDA margins Segment’s EBITDA margins continue to remain strong 1200 70% 58% 1000 60% 54% 53% 47% 50% 800 44% 42% 40% 600 1,017 27% 30% 828 750 400 575 20% 455 200 Q2 315 10% 253 0 0% Q1-20 Q2-20 Q3-20 Q4-20 Q1
Slide 27: 9M-21 results: Petrochemicals geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 9M-21 results: Petrochemicals segment revenue Asia remains a main market for IQ for Polyethylene (LDPE and LLDPE) and MTBE Indian sub-continent remains a key market for Polyethylene (LDPE & LLDPE) and Methanol 1H-21 Segment 9M-21 Seg
Slide 28: 9M-21 results: Petrochemicals key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Petrochemicals Key segment products analysis LDPE LLDPE (contributed ~50% of the segment revenue in 9M-21) (contributed ~17% of the segment revenue in 9M-21) 1,292 1,180 1,083 900 1,397 1,609 1,480 829 821 722 811 907 896 940 1,124 823 142 160 167
Slide 29: Segmental Details: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segmental Details: Fertilizers • Qatar Fertiliser Company has six ammonia and six urea production trains all of which are located in Qatar. Product (in 000 MT PA) Capacity1 Ammonia 3,840 Urea 5,957 Melamine 60 Total 9,922 • The segment’s primary feedstock is met
Slide 30: 9M-21 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 9M-21 results: Fertilizers selling prices Production: Production remained flat compared to 9M-20, as Qafco trains 1-4 underwent a maintenance shutdowns with higher no. of days during the current period; Q3-21 production declined by 6
Slide 31: 9M-21 results: Fertilizers
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 9M-21 results: Fertilizers revenue & net profit Revenue: QR 6.5 billion, up by 119% compared to 9M-20, mainly due to positive growth in product prices (+69%) and sales volumes (+68%). 9M-21 sales volumes increased versus 9M-20, mainly due t
Slide 32: 9M-21 results: Fertilizers EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Fertilizers Analysis of segment EBITDA margins Segment’s EBITDA margins continued to remain on a positive trajectory 1800 53% 57% 60% 53% 1600 50% 49% 47% 50% 1400 44% 1200 40% 1000 30% 1,538 800 1,191 600 20% 847 400 692 10% 496 Q2 457 441 200 0
Slide 33: 9M-21 results: Fertilizers geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 9M-21 results: Fertilizers segment revenue Americas remains a main market for fertilizer segment Asia is another key market for fertilizers along with Indian sub-continent 9M-21 1H-21 SegmentRevenue Segment Revenue (%) (%) 9M-20 1H-2
Slide 34: 9M-21 results: Fertilizers key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Fertilizers Key segment products analysis Urea (contributed ~85% of the segment revenue in 9M-21) 1,408 1,474 1,407 1,178 1,281 1,043 828 714 316 361 446 233 227 221 240 249 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Sales volumes during 2020
Slide 35: Segmental Details: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Segmental Details: Steel • Qatar Steel Company Q.S.C. produces a number of intermediate steel products. The production capacity of the plants are: Product (in 000 MT PA) Capacity1 DRI / HBI 2,300* Rebar 1,800* Billets 2,520 * Coil 240 Total 6,860 1 Production ca
Slide 36: 9M-21 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of production & 9M-21 results: Steel selling prices Production: Production down by 15% compared to 9M-20, due to management’s decision to mothball certain facilities starting from April’20; Production volumes remained flat during Q3-21 in comparison
Slide 37: 9M-21 results: Steel
CLASSIFICATION: C0 - NON-CONFIDENTIAL Analysis of segment 9M-21 results: Steel revenue & net profit Revenue: QR 2.9 billion, up by 25% on 9M-20 amid increase in selling prices (+31%), offset by decline in sales volumes (-6%) owing to mothballing of certain steel facilities starting from Q2-20; R
Slide 38: 9M-21 results: Steel EBITDA margins
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Steel Analysis of segment EBITDA margins Steel segment’s EBITDA margins significantly improved following mothballing decision 350 28% 30% 24% 25% 300 25% 250 20% 200 16% 13% 15% 300 280 150 10% 100 173 104 5% 50 71 Q2 -1% -2% 0% 0 -16 -12 -50 -5%
Slide 39: 9M-21 results: Steel geographical analysis
CLASSIFICATION: C0 - NON-CONFIDENTIAL Geographical analysis of 9M-21 results: Steel segment revenue Starting from the second quarter of 2020, the Group decided to temporarily resize capacity of domestic operations within the Steel segment to 0.8 million MT per annum of rebar with an intent to prim
Slide 40: 9M-21 results: Steel key products
CLASSIFICATION: C0 - NON-CONFIDENTIAL 9M-21 results: Steel Key segment products analysis Rebars (contributed ~75% of the segment revenue in 9M-21) 704 781 453 547 555 621 497 530 629 551 228 235 244 342 307 220 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Selling prices recovered significantly in
Slide 41: CAPEX & Cash flows (2021F – 2025F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX & Cash flows (2021F – 2025F) 41 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 41
Slide 42: CAPEX and Cash Flows (2021F – 2025F)
CLASSIFICATION: C0 - NON-CONFIDENTIAL CAPEX and Cash Flows (2021F – 2025F) o CAPEX / PUD spend of QR 5.2 billion across CAPITAL EXPENDITURE (in QR Billion) 2021 2022 2023 2024 2025 all segments doe 2021-2025 ▪ No capacity Capital Spares 0.1 0.1 0.0 0.0 0.0 related CAPEX and mostly related to reliabi
Slide 43: Dividend and market statistics
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividend and market statistics 43 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 43
Slide 44: Dividend Record & Market Statistics
CLASSIFICATION: C0 - NON-CONFIDENTIAL Dividend Record & Market Statistics Payout Ratio (%) Dividend per share 83% 100% 91% 94% 89% 60% 55% 82% 52% 72% 69% 67% 68% 70% 55% 54% 54% 1.10 40% 0.80 0.85 0.75 0.70 0.55 0.60 0.50 0.50 0.50 0.50 0.35 0.35 0.40 0.40 0.40 0.33 0.20 2003 2004 2005 2006 2007 20
Slide 45: Historical performance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Historical performance (2014 - 2020) 45 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 45
Slide 46: Results at a Glance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results at a Glance (2014 - 2020) Production (M MT’s) Sales Volumes (M MT’s) Production steadily grew from 16.9 million MT’s in 2014 and peaked to reach 17.4 million MT’s in 2015. The decline in production in 2020 was mainly owed to mothballing decision of certa
Slide 47: Results at a Glance (2014 - 2020)
CLASSIFICATION: C0 - NON-CONFIDENTIAL Results at a Glance (2014 - 2020) Revenue (QR Bn) Net income (QR Bn) * Revenue trends moved in line with the selling prices ▪ Movements in revenue together with operating costs affected the net income growth ▪ Cash across the Group continued to grow and reached
Slide 48: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure 48 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 48
Slide 49: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Board Structure Governance and Compliance • IQ Board of Directors consists of seven (7) • IQ is firmly committed to implementing the Directors, all of whom were appointed by the principles of good governance set out in the Special Shareholde
Slide 50: Governance Structure
CLASSIFICATION: C0 - NON-CONFIDENTIAL Governance Structure Remuneration Disclosure and Transparency Board of Directors • The Board ensures that all disclosures are made in • The Company has developed a periodically revisited accordance with the requirements set by regulatory remuneration policy for
Slide 51: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing 51 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 51
Slide 52: Sales and Marketing
CLASSIFICATION: C0 - NON-CONFIDENTIAL Sales and Marketing • Qatar Chemical and Petrochemical Marketing and Distribution Company Q.J.S.C. (“Muntajat”), a wholly-owned company of the government of the State of Qatar, has the exclusive rights to purchase, market, sell and distribute the State’s product
Slide 53: For further information, Industries Qatar can be contacted
CLASSIFICATION: C0 - NON-CONFIDENTIAL For further information, Industries Qatar can be contacted as follows: Telephone: (974) 4013 2080 Fax: (974) 4013 9750 Email: iq.investorrelations@qp.com.qa or iq@qp.com.qa Address: PO Box 3212, Doha, State of Qatar Please refer to www.iq.com.qa for the latest i