Helleniq Energy Holdings S.a. · ATHEX:ELPE
Helleniq Energy — Hellenic Petroleum — Q4 2019 Earnings Presentation
43 slides from Helleniq Energy's earnings presentation, Feb 27, 2020
Slide 1: 2019 4Q Results Presentation
2019 4Q Results Presentation Athens, 27 February 2020
Slide 2: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 1
Slide 3: 4Q19 Key Highlights
4Q19 KEY HIGHLIGHTS: Weak international refining margins affect results; maintenance impact offset by improved operations and over-performance • Weak industry environment affects performance in 4Q19 - Lowest system benchmark margins since 3Q13, as HSFO cracks collapse ahead of IMO implementation, ho
Slide 4: 4Q19 Key Highlights: Strategy Update
4Q19 KEY HIGHLIGHTS: Strategy Update • Corporate Governance - On 20 December 2019 ELPE EGM approved alignment of articles of association to new companies law (L4548/2018) • Organisation - Senior management VRS completed in 4Q, enabling SBU re-organization and simpler structure • New Strategy - Group
Slide 5: 4Q19 Group Key Financials
4Q19 GROUP KEY FINANCIALS Refining sales volumes (m MT) € million, IFRS 4Q FY -15% 2018 2019 Δ% 2018 2019 Δ% 4.1 Income Statement 3.5 Sales Volume (MT'000) - Refining 4.137 3.496 -15% 16.490 15.223 -8% Sales Volume (MT'000) - Marketing 1.241 1.183 -5% 4.955 4.928 -1% Net Sales 2.428 2.052 -15% 9.769
Slide 6: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 5
Slide 7: Hellenic Petroleum Vision & Strategy
HELLENIC PETROLEUM Vision & Strategy Operating Levers to Grow through the Energy Transition Facilitate the energy 1 transition in the Eastern Improve through operational excellence, digitization Mediterranean by maximizing Core Business… and energy efficiency returns in our core business and develop
Slide 8: Renewables: Acquisition of 204 MW PV portfolio
RENEWABLES Acquisition of 204 MW PV portfolio, a key step in implementing the Group’s new business growth strategy Transaction overview • Project acquired at advanced development stage (permitting in place – ready to construct) from juwi: ‒ SPA signed on 17 Feb 2020 ‒ Transaction expected to close i
Slide 9: DEPA Sale Process
DEPA SALE PROCESS HRADF’s launched the sale of DEPA regulated and commercial activities, Group participation in line with strategic objectives Key facts • Existing DEPA Group to be restructured in 3 sub-Groups, in which HRADF and ELPE will own 65% and 35% respectively: ‒ DEPA Infrastructure (distrib
Slide 10: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 9
Slide 11: Industry Environment
INDUSTRY ENVIRONMENT Crude oil prices and EUR/USD flat q-o-q; IMO implementation leads to volatile sweet-sour spreads ICE Brent ($/bb) and EUR/USD* 68 68 64 62 62 • Crude oil prices averaged $62/bbl, reflecting macro and physical balances 1,14 1,14 1,12 1,11 1,11 • USD maintained strength vs EUR, ec
Slide 12: Industry Environment: HSFO pricing and benchmark margins
INDUSTRY ENVIRONMENT HSFO pricing drives benchmark margins as IMO implementation kicks in; significant deviation among refining configurations, with strongest hydrocracking/coking margins in 5 years Product Cracks* ($/bbl) Med benchmark margins ($/bbl) $/bbl 20 FCC 15 5.9 5.7 5.4 5.0 4.8 4.9 4.9 10
Slide 13: Domestic Market Environment
DOMESTIC MARKET ENVIRONMENT Transport fuels higher in 4Q; heating gasoil consumption driven by mild weather conditions Domestic Market demand* (MT ‘000) -1% +5% +3% -1% 1,878 1,868 +5% 1,878 1,868 LPG & Others 213 213 - 1,731 1,810 1,494 1,563 1,588 1,638 -3% HGO 455 441 Diesel 650 657 +1% MOGAS 561
Slide 14: Domestic Market Environment
DOMESTIC MARKET ENVIRONMENT Higher domestic market fuels demand, with auto fuels growing Domestic Market demand* (MT ‘000) +6% -1% -2% +3% -3% 7,091 7,043 ’18-’19 6,906 6,879 6,662 6,691 817 886 837 859 +5% LPG & Others 807 811 1,389 1,199 1,172 1,082 HGO 968 969 +11% DIESEL 2,364 2,427 2,538 2,552
Slide 15: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 14
Slide 16: Causal Track & Segmental Results Overview 4Q19
CAUSAL TRACK & SEGMENTAL RESULTS OVERVIEW 4Q19 Elefsina turnaround offset by improved S&T and Marketing contribution; however weaker benchmark margins drove results lower Adjusted EBITDA causal track 4Q19 vs 4Q18 (€m) 156 Environment Performance 12 118 22 57 10 11 MK 6 27 5 MK 41 Chems 28 20 Chems 1
Slide 17: Causal Track & Segmental Results Overview FY 2019
CAUSAL TRACK & SEGMENTAL RESULTS OVERVIEW FY 2019 FY19 results reflect a significantly weaker refining environment (lowest benchmarks since 2013) and shut-downs impact throughout year Adjusted EBITDA causal track FY19 vs FY18 (€m) Environment Performance 730 MK 93 156 572 Chems 40 27 40 58 100 3 138
Slide 18: Credit Facilities - Liquidity
CREDIT FACILITIES - LIQUIDITY Financing cost reduction exceeding 40% over the last 4 years; funding source diversification and maturity profile strengthen capital structure Gross Debt Sourcing (%) Committed Facilities Maturity Profile* (€m) 4% 1,200 1,000 26% 41% 800 600 28% 400 200 Banks (committed
Slide 19: Dividend Policy
DIVIDEND POLICY Resilient operating results, lower financing costs and positive outlook, support a dividend payout at same levels as 2018, despite weaker refining environment during the year EPS and DPS 2018-2019 (€/share) €0.25/share special 0.97 distribution (DESFA transaction) 0.75 0.70 0.61 0.54
Slide 20: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance − Refining, Supply & Trading − Petrochemicals − Fuels Marketing − Renewables − Power & Gas • Financial Results • Q&A 19
Slide 21: Domestic Refining, Supply & Trading – Overview
DOMESTIC REFINING, SUPPLY & TRADING – OVERVIEW Transition to IMO mode effected; Elefsina scheduled turn-around successfully completed and ETBE units tied-in at Aspropyrgos; significant operational benefits post start-up in both refineries IFRS FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2
Slide 22: Domestic Refining, Supply & Trading – Operations
DOMESTIC REFINING, SUPPLY & TRADING – OPERATIONS Elefsina maintenance shut-down and new Aspropyrgos operating model, drive production, crude slate and yields Gross Production by refinery (MT’000) -17% 4,330 4,491 4,358 4,185 4,172 4,105 4,273 3,970 Thessaloniki 608 3,479 640 1,449 Elefsina 859 Aspro
Slide 23: Domestic Refining, Supply & Trading – Sales
DOMESTIC REFINING, SUPPLY & TRADING – SALES Low utilization due to Elefsina full T/A affects export sales; bunkering sales higher with MGO up 29%, while VLSFO (produced and blended) accounts for 55% of total marine sales in December Sales* by market (MT’000) -15% Δ% vs 4,107 4,158 4,084 4,131 4,138
Slide 24: Domestic Refining, Supply & Trading – Realised Refining Margin
DOMESTIC REFINING, SUPPLY & TRADING – REALISED REFINING MARGIN Improved S&T contribution, sales mix and operations performance post turnaround lead to higher over-performance vs benchmarks HELPE realised vs benchmark* margin ($/bbl) Adj. EBITDA (€m) 136 105 121 167 189 178 136 128 112 136 171 124 79
Slide 25: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance − Refining, Supply & Trading − Petrochemicals − Fuels Marketing − Renewables − Power & Gas • Financial Results • Q&A 24
Slide 26: Petrochemicals
PETROCHEMICALS Strong operational performance and integration with Aspropyrgos propylene unit, partly offset impact of weaker PP benchmark margins IFRS FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% KEY FINANCIALS* Volume (MT '000) 75 76 1% 279 283 1% Net Sales 84 74 -12% 315 299 -5%
Slide 27: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance − Refining, Supply & Trading − Petrochemicals − Fuels Marketing − Renewables − Power & Gas • Financial Results • Q&A 26
Slide 28: Domestic Marketing
DOMESTIC MARKETING Higher comparable EBITDA on improved contribution from Retail and better product mix for Marine sales IFRS FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% KEY FINANCIALS - GREECE Volume (MT '000) 960 935 -3% 3.902 3.870 -1% Net Sales 591 561 -5% 2.423 2.366 -2% Adju
Slide 29: International Marketing
INTERNATIONAL MARKETING Improved in-market operations, further supply optimization and targeted acquisitions lead to higher contribution IFRS FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% KEY FINANCIALS - INTERNATIONAL Volume (MT '000) 280 248 -12% 1.052 1.058 1% Net Sales 241 216 -
Slide 30: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance − Refining, Supply & Trading − Petrochemicals − Fuels Marketing − Renewables − Power & Gas • Financial Results • Q&A 29
Slide 31: Renewables
RENEWABLES Introducing renewables BU, a key pillar for improving ELPE carbon footprint by 50% over the next 10 years •HELPE Is Developing a Material Renewables •…With Phase I Expected To Have Substantial Financial Business… Impact* 26 MW € million of expected EBITDA evolution of renewables assets (1
Slide 32: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance − Refining, Supply & Trading − Fuels Marketing − Petrochemicals − Renewables − Power & Gas • Financial Results • Q&A 31
Slide 33: Power Generation: 50% stake in Elpedison
POWER GENERATION: 50% stake in Elpedison Lower y-o-y EBITDA in 4Q, mainly due to further delays in new CAC remuneration FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% KEY FINANCIALS Net production (MWh '000) 741 950 28% 2.390 2.971 24% Sales 138 171 24% 428 617 44% EBITDA 15 6 -60% 2
Slide 34: Gas: 35% stake in DEPA
GAS: 35% stake in DEPA Lack of DESFA contribution key driver for weaker DEPA group participation on ELPE consolidated results FINANCIAL STATEMENTS* 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% KEY FINANCIALS Sales Volume (million NM3) 1.084 520 -52% 3.407 2.512 -26% EBITDA* 51 16 -70% 219 93 -58% Profi
Slide 35: Contents
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 34
Slide 36: 4Q 2019 Financial Results: Group Profit & Loss Account
4Q 2019 FINANCIAL RESULTS GROUP PROFIT & LOSS ACCOUNT IFRS FINANCIAL STATEMENTS 4Q FY € MILLION 2018 2019 Δ% 2018 2019 Δ% Sales 2.428 2.052 (15%) 9.769 8.857 (9%) Cost of sales (2.349) (1.865) 21% (8.770) (8.052) 8% Gross profit 79 187 - 999 805 (19%) Selling, distribution, administrative & explorat
Slide 37: Reported vs Adjusted EBITDA
4Q 2019 FINANCIAL RESULTS REPORTED VS ADJUSTED EBITDA (€ million) 4Q FY 2018 2019 2018 2019 Reported EBITDA -19 110 711 574 Inventory effect - Loss/(Gain) 143 -4 -48 -24 One-offs - Loss / (Gain) 32 12 67 22 Adjusted EBITDA 156 118 730 572 36
Slide 38: Group Balance Sheet
4Q 2019 FINANCIAL RESULTS GROUP BALANCE SHEET IFRS FINANCIAL STATEMENTS FY FY € MILLION 2018 2019 Non-current assets Tangible and Intangible assets 3.375 3.402 Right of use assets - 243 Investments in affiliated companies* 390 385 Other non-current assets 139 116 3.903 4.146 Current assets Inventori
Slide 39: Group Cash Flow
4Q 2019 FINANCIAL RESULTS GROUP CASH FLOW IFRS FINANCIAL STATEMENTS FY € MILLION 2018 2019 Cash flows from operating activities Cash generated from operations 652 635 Income and other taxes paid (5) (149) Net cash (used in) / generated from operating activities 647 486 Cash flows from investing acti
Slide 40: Segmental Analysis – I
4Q 2019 FINANCIAL RESULTS SEGMENTAL ANALYSIS – I 4Q FY € million, IFRS 2018 2019 Δ% 2018 2019 Δ% Reported EBITDA Refining, Supply & Trading -25 76 - 556 360 -35% Petrochemicals 7 20 - 85 92 9% Marketing 2 20 - 81 134 66% Core Business -17 115 - 722 587 -19% Other (incl. E&P) -2 -5 - -10 -13 -30% Tot
Slide 41: Segmental Analysis – II
4Q 2019 FINANCIAL RESULTS SEGMENTAL ANALYSIS – II 4Q FY € million, IFRS 2018 2019 Δ% 2018 2019 Δ% Volumes (M/T'000) Refining, Supply & Trading 4.137 3.496 -15% 16.490 15.223 -8% Petrochemicals 75 76 1% 279 283 1% Marketing 1.241 1.183 -5% 4.955 4.928 -1% Total - Core Business 5.453 4.754 -13% 21.724
Slide 42: Contents / Q&A
CONTENTS • Executive Summary • Strategy Update • Industry Environment • Group Results Overview • Business Units Performance • Financial Results • Q&A 41
Slide 43: Disclaimer
DISCLAIMER Forward looking statements HELLENIC PETROLEUM do not in general publish forecasts regarding their future financial results. The financial forecasts contained in this document are based on a series of assumptions, which are subject to the occurrence of events that can neither be reasonably