ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q3 2018 Earnings Presentation
35 slides from ORLEN Spolka Akcyjna's earnings presentation, Oct 25, 2018
Slide 1: PKN ORLEN consolidated financial results 3Q18
PKN ORLEN consolidated financial results 3Q18 25 October 2018 #ORLEN3Q18@PKN_ORLEN
Slide 2: Agenda
Agenda Key facts and figures 3Q18 Macro environment Financial and operating results Liquidity and investments Outlook for 2018 2
Slide 3: Key facts and figures 3Q18
Key facts and figures 3Q18 EBITDA LIFO: PLN 2,4 bn Macro worsening (y/y) Crude oil throughput: 8,7 mt, i.e. 98% utilization Sales: 11,2 mt, i.e. decrease by (-) 3% (y/y) Record high quarterly retail result: PLN 723 m EBITDA LIFO Value creation Expansion of retail sales offer through supporting Polis
Slide 4: Agenda
Agenda Key facts and figures 3Q18 Macro environment Financial and operating results Liquidity and investments Outlook for 2018 4
Slide 5: Macro environment in 3Q18 (y/y)
Macro environment in 3Q18 (y/y) Downstream margin decrease Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 3Q17 2Q18 3Q18 ∆ (y/y) -1,1 USD/bbl Diesel 96 97 101 5% 13,9 Gasoline 12,4 12,8 164 160 171 4% 11,5 11,4 HHO -100 -163 -147 -47% SN 1
Slide 6: Fuel consumption increase in Poland (y/y)
Fuel consumption increase in Poland (y/y) GDP increase1 Fuel consumption (diesel, gasoline)2 Change % (y/y) mt 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 3Q18 3Q17 3Q18 5,2 4,9 5,2 5,1 + 5% 4,4÷4,8 + 3% 4,32 4,55 1,17 1,21 Poland - 3% - 1% 2,3 9,97 9,63 2,2 2,2 1,4 1,7÷2,1 4,73 4,68 Germany 4,9 4,9 + 3% 3,4 2,7
Slide 7: Agenda
Agenda Key facts and figures 3Q18 Macro environment Financial and operating results Liquidity and investments Outlook for 2018 7
Slide 8: Financial results in 3Q18
Financial results in 3Q18 3Q17 2Q18 3Q18 PLN m 9M17 9M18 Revenues: increase by 23% (y/y) mainly due to + 23% +14% higher quotations of refining and petrochemical products following crude oil price increase. 24 730 26 701 30 344 70 630 80 286 Revenues EBITDA LIFO: decrease by PLN (-) 0,6 bn (y/y) - 2
Slide 9: EBITDA LIFO: segments' results in 3Q18
EBITDA LIFO Segments’ results in 3Q18 PLN m Downstream: negative impact of macro and lower sales 86 volumes (y/y) and lack of positive impact from inventory 723 2 405 revaluation (NRV) from 3Q17. -166 1 762 Retail: positive impact of higher sales volumes and higher fuel and non-fuel margins (y/y). D
Slide 10: Downstream – EBITDA LIFO
Downstream – EBITDA LIFO Negative impact of macro and lower sales volumes EBITDA LIFO PLN m Negative macro impact (y/y) mainly due to higher costs of 3000 internal usage as a result of crude oil price increase and worsening of cracks on heavy refining fractions, petchem 2550 2513 products, fertilize
Slide 11: Downstream – operational data
Downstream – operational data High utilization ratio despite maintenance shutdowns Sales volumes Utilization ratio mt % 10 Refineries 3Q17 2Q18 3Q18 ∆ (y/y) -5% Płock 100% 94% 97% -3 pp 8,9 9 Unipetrol 97% 75% 92% -5 pp 8,5 8,5 ORLEN Lietuva 106% 77% 102% -4 pp 8,1 8,2 7,9 8,0 8 7,7 7,6 Petrochemica
Slide 12: Retail – EBITDA LIFO
Retail – EBITDA LIFO Increase of sales volumes and retail margins EBITDA LIFO PLN m Sales volumes increase by 7% (y/y). 800 723 677 Market share increase in all markets (y/y). 619 610 576 Fuel margin increase on Polish, Czech and German 600 markets at comparable margins on Lithuanian market (y/y). 4
Slide 13: Retail – operational data
Retail – operational data Sales volumes increase and further non-fuel offer growth Sales volumes Number of petrol stations and market shares (by volume) mt #, % 2,8 + 7% 2,6 2,5 2,3 2,4 2,4 2,3 2,3 2,2 2,2 2,2 2,1 2,1 2,0 2,0 1,9 1,8 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Coffee corn
Slide 14: Upstream – EBITDA LIFO
Upstream – EBITDA LIFO Positive macro impact and increase of average production (y/y) EBITDA LIFO Average production PLN m th. boe/d 150 20 + 1% 128 18,0 16,7 17,1 16,9 86 16,2 100 80 82 82 78 15,0 68 14,2 13,9 14,4 58 15 53 42 13,212,8 50 27 10 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
Slide 15: Upstream
Upstream Poland Canada Total reserves of crude oil and gas (2P) Total reserves of crude oil and gas (2P) Ca. 11 m boe* (6% liquid hydrocarbons, 94% gas) Ca. 141 m boe* (42% liquid hydrocarbons, 58% gas) 3Q18 3Q18 Average production: 1,0 th. boe/d (100% gas) Average production: 15,9 th. boe/d (47% li
Slide 16: Agenda
Agenda Key facts and figures 3Q18 Macro environment Financial and operating results Liquidity and investments Outlook for 2018 16
Slide 17: Cash flow
Cash flow Cash flow from operations Cash flow from investments PLN bn PLN bn 0,6 3,6 0,6 2,4 0,0 -1,0 -1,0 EBITDA LIFO LIFO effect Working capital Net inflow CAPEX CAPEX liabilities Net outflow 3Q18 decrease from 3Q18 change and others from operations Investments 3Q18 3Q18 Free cash flow for 9M18 PL
Slide 18: Financial strength
Financial strength Net debt and gearing Net debt /EBITDA LIFO PLN bn, % Financial gearing 15,7 3,5 12,7 3,0 10,3 2,5 2,0 5,2 1,5 4,3 3,7 1,0 0,59 1,7 2,2 0,35 0,46 0,5 0,11 0,07 0,6 0,8 0,0 3Q17 4Q17 1Q18 2Q18 3Q18 2Q16 4Q16 2Q17 4Q17 2Q18 Diversified sources of financing (gross debt) Gross debt str
Slide 19: CAPEX
CAPEX Planned CAPEX 2018 Realized CAPEX 9M18 – split by segment PLN bn, % PLN m 4,8 0,6 0,1 2,9 Downstream 1,2 16% 0,5 Retail 0,4 Growth 2,5 48% 5,8 5,1 32% Upstream 0,8 1,7 4% Energy 0,2 Corp. functions 0,1 Petrochemicals 0,6 Maintenance 2,3 0,9 and regulatory Refining CAPEX Downstream Retail Upstr
Slide 20: Agenda
Agenda Key facts and figures 3Q18 Macro environment Financial and operating results Liquidity and investments Outlook for 2018 20
Slide 21: Outlook for 2018
Outlook for 2018 Macro Brent crude oil – expected increase of crude oil price in 2018 vs. the average for 2017 mainly due to extension till the end of 2018 of the OPEC/Russia agreement regarding limitation of crude oil production and fears related to US sanctions imposed on Iranian crude oil. Crude
Slide 22: 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 23: Supporting slides
Agenda Supporting slides 23 23
Slide 24: Results – split by quarter
Results – split by quarter PLN m 3Q17 2Q18 3Q18 ∆ (y/y) 9M17 9M18 ∆ Revenues 24 730 26 701 30 344 23% 70 630 80 286 14% EBITDA LIFO 3 047 2 127 2 405 -21% 8 426 6 425 -24% LIFO effect -107 936 579 - 68 1 659 2340% EBITDA 2 940 3 063 2 984 1% 8 494 8 084 -5% Depreciation -616 -673 -677 -10% -1 759 -1
Slide 25: Results – split by segment
Results – split by segment 3Q18 Corporate Downstream Retail Upstream TOTAL PLN m functions EBITDA LIFO 1 762 723 86 -166 2 405 LIFO effect 579 - - - 579 EBITDA 2 341 723 86 -166 2 984 Depreciation -452 -115 -80 -30 -677 EBIT 1 889 608 6 -196 2 307 EBIT LIFO 1 310 608 6 -196 1 728 3Q17 Corporate Down
Slide 26: EBITDA LIFO – split by segment
EBITDA LIFO – split by segment PLN m 3Q17 2Q18 3Q18 ∆ (y/y) 9M17 9M18 ∆ Downstream 2 513 1 580 1 762 -30% 7 084 4 855 -31% Retail 610 677 723 19% 1 558 1 864 20% Upstream 53 82 86 62% 215 236 10% Corporate functions -129 -212 -166 -29% -431 -530 -23% EBITDA LIFO 3 047 2 127 2 405 -21% 8 426 6 425 -2
Slide 27: Results – split by company
Results – split by company Others and 3Q18 ORLEN consolidation 2 2 PLN m PKN ORLEN S.A. Unipetrol Lietuva corrections Total Revenues 24 495 6 024 5 553 -5 728 30 344 EBITDA LIFO 1 354 349 271 431 2 405 1 LIFO effect 552 67 -44 4 579 EBITDA 1 906 416 227 435 2 984 Depreciation -344 -135 -25 -173 -677
Slide 28: ORLEN Lietuva Group
ORLEN Lietuva Group PLN m 3Q17 2Q18 3Q18 ∆ (y/y) 9M17 9M18 ∆ Revenues 4 256 4 622 5 553 30% 12 018 14 365 20% EBITDA LIFO 343 113 271 -21% 730 440 -40% EBITDA 345 156 227 -34% 770 447 -42% EBIT 326 136 202 -38% 718 384 -47% Net result 262 101 166 -37% 626 307 -51% Sales volumes decreased in 3Q18 by
Slide 29: UNIPETROL Group
UNIPETROL Group PLN m 3Q17 2Q18 3Q18 ∆ (y/y) 9M17 9M18 ∆ Revenues 5 043 5 186 6 024 19% 14 770 15 684 6% EBITDA LIFO 556 393 349 -37% 2 183 989 -55% EBITDA 479 564 416 -13% 2 086 1 206 -42% EBIT 369 432 281 -24% 1 766 814 -54% Net result 252 483 216 -14% 1 284 760 -41% Lower sales volumes by (-) 6%
Slide 30: Macro environment in 4Q18
Macro environment in 4Q18 Downstream margin decrease Product slate of downstream margin Model downstream margin, USD/bbl Crack margins Refining products (USD/t) 4Q17 3Q18 4Q18* ∆ Q/Q ∆ Y/Y Diesel 91 101 103 2% 13% 13,9 -0,9 USD/bbl Gasoline 139 171 96 -44% -31% 12,4 12,8 11,5 HSFO -130 -147 -163 -11
Slide 31: Macro environment in 4Q18
Macro environment in 4Q18 Refining margin with B/U differential decrease Petrochemical margin decrease Model refining margin and Brent/Ural differential, USD/bbl Model petrochemical margin, EUR/t differential margin - 54 EUR/t 911 890 902 - 1,6 USD/bbl 853 870 8,9 836 1,0 7,4 7,5 6,2 1,3 5,6 2,2 0,9
Slide 32: Production data
Production data 3Q17 2Q18 3Q18 ∆ (y/y) ∆ (q/q) 9M17 9M18 ∆ Total crude oil throughput in PKN ORLEN (kt) 8 966 7 461 8 694 -3% 17% 24 482 24 684 1% Utilization 102% 85% 98% -4 pp 13 pp 93% 94% 1 pp 1 Refinery in Poland Processed crude (kt) 4 064 3 802 3 977 -2% 5% 10 970 11 900 8% Utilization 100% 94
Slide 33: 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). Cracks for petrochemical products
Slide 34: 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 35: Investor Relations contact
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