Orlen Spolka Akcyjna · GPW:PKN
Orlen Spolka Akcyjna — Grupa LOTOS — Q3 2018 Earnings Presentation
28 slides from Orlen Spolka Akcyjna's earnings presentation, Oct 30, 2018
Slide 1: Consolidated financial results for 3rd quarter 2018 and 9 months 2018
Consolidated financial results for 3rd quarter 2018 and 9 months 2018 October 30th, 2018 Financial results 3Q 2018 and 9M 2018 1
Slide 2: Agenda
Key highlights ….…………………………….. 3 External environment …………………......... 8 Upstream ……………………………………… 12 Downstream …………………………….…… 18 Consolidated financial results …….………... 23 Financial results 3Q 2018 and 9M 2018 Financial results 3Q 2018 and 9M 2018 2
Slide 3: Key highlights
Key highlights Financial results 3Q 2018 and 9M 2018 3
Slide 4: 3Q 2018 – summary
Key highlights 3Q 2018 – summary o 185m PLN dividend paid by Grupa LOTOS S.A. (1 PLN per share) o LIFO EBITDA (1) reached 888m PLN, 8% increase (qoq), despite a maintenance shutdown in Sleipner area o Operational excellence confirmed by the full utilisation of the refining capacity adapting to the f
Slide 5: Key highlights 3Q 2018
Key highlights 3Q 2018 LIFO EBITDA (1) Downstream - crude oil throughput m PLN k tons upstream downstream 2 785 2 638 2 790 926 888 821 750 582 688 168 237 215 3Q 2017 2Q 2018 3Q 2018 3Q 2017 2Q 2018 3Q 2018 Net debt / LIFO EBITDA (2) Upstream – daily hydrocarbons production (3) 1.9x m PLN boe/d 21
Slide 6: 9M 2018 – summary
Key highlights 9M 2018 – summary o LIFO EBITDA (1) of almost 2.25bn (flat yoy) confirming an effective asset mix resilient to lowering margin and weaken USD against the PLN o Net debt lowered to 1.9 bn PLN pushing net debt/LIFO EBITDA (1) ratio down to 0.6x (1) Net of one off items Financial results
Slide 7: Key highlights 9M 2018 - cumulative
Key highlights 9M 2018 - cumulative LIFO EBITDA (1) Downstream - crude oil throughput in Gdańsk m PLN k tons upstream downstream 7 673 7 989 6 926 2 298 2 249 1 731 1 651 1 593 1 265 467 646 656 9M 2016 9M 2017 9M 2018 9M 2016 9M 2017 9M 2018 Operating cash flow Upstream – daily hydrocarbons product
Slide 8: External environment
External environment Financial results 3Q 2018 and 9M 2018 Financial results 3Q 2018 and 9M 2018 8
Slide 9: Macroeconomic environment vs strategic assumptions
External environment Macroeconomic environment (1) vs strategic assumptions(2) Brent DTD Product crack spreads +27% USD/bbl USD/ton 177 72 148 -16% 57 Gasoline 2018 strategy 9M 2018 actual 2018 strategy 9M 2018 actual 114 98 -14% Natural gas Diesel +30% USD/boe 44 2018 strategy 9M 2018 actual 34 Hea
Slide 10: FX rate, GDP growth, domestic fuel market
External environment FX rate, GDP growth, domestic fuel market FX USD/PLN rate (1) Diesel consumption (3) m m3 3.83 5.3 5.4 5.0 5.0 5.1 3.70 3.63 4.6 3.60 3.58 4.3 3.40 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2017 2017 2017 2017 2018 2018 2018 Polish GDP growth Gasoline
Slide 11: Crude oil, natural gas and product crack spreads
External environment Crude oil, natural gas and product crack spreads Crude oil (1) and nat gas prices (2) Key product crack spreads (1) USD USD/t 75 75 165 163 152 146 67 127 134 61 100 101 98 93 52 79 50 95 45 47 38 41 30 27 -98 -100 -131 -154 -146 -165 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2
Slide 12: Upstream
Upstream Financial results 3Q 2018 and 9M 2018 Financial results 3Q 2018 and 9M 2018 12
Slide 13: Producing assets – 3Q 2018
Upstream Producing assets – 3Q 2018 B8 Sleipner Onshore fields Baltic Sea North Sea Lithuania Reserves(1) 36,2 mmboe Reserves(1) 12,0 mmboe Production(2) 3,0 kboe/d Reserves(1) 3,4 mmboe Production(2) 10,2 kboe/d Production(2) 0,8 kboe/d B3 Heimdal Baltic Sea North Sea Reserves(1) 13,8 mmboe Reserve
Slide 14: Overall production figures
Upstream Overall production figures Daily quarterly production Overall 9M production boe/d m boe -16% -14% 21 065 21 685 6.4 0.3 Norway 5.6 17 648 1.3 0.2 Poland 9 238 9 358 1.2 Lithuania 8 162 4.8 4.1 11 827 12 327 9 486 3Q 2017 2Q 2018 3Q 2018 9M 2017 9M 2018 oil gas Financial results 3Q 2018 and
Slide 15: Total recoverable reserves comparing with 31.12.2017
Upstream Total recoverable reserves comparing with 31.12.2017 2P reserves m boe 88.6 88.1 3.4 Lithuania 3.6 -4.2 6.2 -1.2 -0.2 Poland 45.2 50.0 Norway 39.3 35.2 31 Dec 2017 Norway Poland Lithuania Poland 30 Sep 2018 reclassification (1) (1) Upward revision of 2P reserves for B3 field, due to extensi
Slide 16: Quarterly upstream EBITDA evolution
Upstream Quarterly upstream EBITDA evolution 3Q 2017 2Q 2018 3Q 2018 m PLN 237 -60 197 168 176 -51 164 18 -69 99 (1) EBITDA Depreciation Clean EBITDA Depreciation EBIT 2Q18 EBITDA Depreciation One offs Clean 3Q17 EBIT 3Q17 2Q18 3Q18 EBIT 3Q18 (1) Revaluation of reserve for contingent payment related
Slide 17: 9M cumulative EBITDA evolution
Upstream 9M cumulative EBITDA evolution 9m 2017 9m 2018 m PLN +1% 646 656 637 638 18 9 170 232 468 405 (1) (2) EBIT 9M 2017 Depreciation EBITDA One offs Clean EBIT 9M 2018 Depreciation EBITDA One offs Clean 9M 2017 EBITDA 9M 2018 EBITDA 9M 2017 9M 2018 (1) Balance of assets impairments and other rev
Slide 18: Downstream
Downstream Financial results 3Q 2018 and 9M 2018 Financial results 3Q 2018 and 9M 2018 18 18
Slide 19: Volume of sales of key refining products
Downstream Volume of sales of key refining products thousand tons +2,3% 2 617 2 677 2 535 2 536 421 431 2 239 409 2 244 417 372 416 1 665 1 584 1 558 1702 1 434 1 380 433 531 542 448 561 545 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 (1) gasoline middle distilates heavy products (2) (1) middle
Slide 20: Quarterly downstream clean EBITDA LIFO evolution
Downstream Quarterly downstream clean EBITDA LIFO evolution 3Q 2017 2Q 2018 3Q 2018 859 m PLN 843 12 750 -174 -45 2 688 -318 57 582 783 Retail Retail Retail 62 51 52 EBITDA LIFO effect One offs Clean LIFO EBITDA LIFO effect One offs Clean LIFO EBITDA LIFO effect One offs Clean LIFO 3Q 17 EBITDA 3Q 1
Slide 21: Cumulative 9M EBITDA evolution
Downstream Cumulative 9M EBITDA evolution 9M 2017 9M 2018 m PLN 2 117 143 372 -667 1 745 1 651 1 592 1 508 26 -3,6% 117 408 1 100 Retail 144 Retail 129 EBIT 9M2017 Depreciation EBITDA One offs LIFO effect Clean EBIT 9M2018 Depreciation EBITDA One offs LIFO effect Clean 9M 2017 EBITDA LIFO 9M 2018 EB
Slide 22: Model refining margin evolution (USD/bbl)
Downstream Model refining margin evolution (USD/bbl) (1) (2) LOTOS PKN Orlen ERMI 8.90 8.57 7.60 7.40 7.07 7.29 7.47 6.56 6.38 6.20 5.43 4.83 5.60 4.72 3.48 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q2018 (1) LOTOS model refining margin = 14.14% gasoline + 4.24% naphtha + 4.53% LPG + 49.57% diesel + 5.34% je
Slide 23: Consolidated financial results
Consolidated financial results Financial results 3Q 2018 and 9M 2018 Financial results 3Q 2018 and 9M 2018 23
Slide 24: Decomposition of 3Q 2018 vs 3Q 2017 consolidated financial results
Consolidated financial results Decomposition of 3Q 2018 vs 3Q 2017 consolidated financial results 3Q 2017 3Q 2018 926 888 m PLN 202 175 12 -174 -45 20 632 619 867 757 EBIT 3Q LIFO effect One offs Depreciation Clean Net profit EBIT 3Q LIFO effect One offs Depreciation Clean Net profit 2017 EBITDA LIF
Slide 25: Cumulative 9month operating results evolution
Consolidated financial results Cumulative 9month operating results evolution 9M 2017 9M 2018 m PLN 2 298 2 249 639 542 -667 126 161 1 491 27 1 187 2 213 1 506 EBIT 9M 2017 LIFO effect One offs Depreciation Clean EBITDA Net profit EBIT 9M 2018 LIFO effect One offs Depreciation Clean EBITDA Net profit
Slide 26: Operating cash flows vs CAPEX
Consolidated financial results Operating cash flows vs CAPEX Quarterly 9M 2018 m PLN 1 299 1 243 1 014 1 063 308 533 87 637 368 360 284 164 200 211 226 668 95 82 74 121 146 189 204 118 90 80 203 9M 2017 9M 2018 -136 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 CAPEX upstream CAPEX downstream operating ca
Slide 27: Debt
Consolidated financial results Debt Net debt (1) Gearing ratio (2) Net debt / clean LIFO EBITDA (3) bn PLN 4.8 56% 1.9x 4.18 2.5 1.9 23% 0.8x 0.6x 16% 3.68 3.48 2016 2017 30 Sep 2018 2016 2017 30 Sep 2018 2016 2017 30 Sep 2018 net debt FX USD/PLN o Net debt figures include: interest bearing loans an
Slide 28: Grupa LOTOS S.A. Investor Relations
Grupa LOTOS S.A. Investor Relations tel. +48 58 308 73 93 fax +48 58 346 22 35 e-mail ir@grupalotos.pl @GrupaLOTOS Financial results 3Q 2018 and 9M 2018