ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q3 2010 Earnings Presentation
34 slides from ORLEN Spolka Akcyjna's earnings presentation, Oct 29, 2010
Slide 1: Good operating results despite still variable macro environment
Good operating results despite still variable macro environment PKN ORLEN consolidated financial results for 3 quarter 2010 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 29 October 2010 1
Slide 2: Agenda
Agenda Achievements in 3Q 2010 Macroeconomic environment Financial and operating results in 3Q 2010 Liquidity Summary 2
Slide 3: PKN ORLEN achievements in 3Q 2010
PKN ORLEN achievements in 3Q 2010 Very good results: PLN 1.3 bn of net profit PLN 0.7 bn of operating profit acc. to LIFO Variable macro environment:: decrease in model refining margin and URAL/Brent differential in total comparing to 2Q10, however increase y/y further increase in petrochemical marg
Slide 4: Agenda
Agenda Achievements in 3Q 2010 Macroeconomic environment Financial and operating results in 3Q 2010 Liquidity Summary 4
Slide 5: Improvement of macroeconomic factors in 3Q 2010
Improvement of macroeconomic factors in 3Q 2010 Crude oil price increase Refining margin and U/B differential increase Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl + 9 USD/bbl + 0,4 USD/bbl 75 76 78 77 6,5 68 5,4 1,8 3,6 1,4 4,0 0,5 2,9 0,9 0,7 4,
Slide 6: Increase of diesel consumption due to GDP growths
Increase of diesel consumption due to GDP growths GDP increase Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 3Q09 4Q09 1Q10 2Q10 3Q101 3Q09 3Q102 3Q09 3Q102 +2% 3,3 3,5 3,2-3,6 -3% 1,8 3,0 2,95 3,01 1,15 1,11 Poland 3,7 3,5-4,0 +1% 2,0 -1% 8,26 8,37 5,26 5,19 -
Slide 7: Agenda
Agenda Achievements in 3Q 2010 Macroeconomic environment Financial and operating results in 3Q 2010 Liquidity Summary 7
Slide 8: The highest operating profit acc. to LIFO since the beginning of 2009
The highest operating profit acc. to LIFO since the beginning of 2009 PLN m 3Q09 2Q10 3Q10 Change y/y 21 068 22 106 Increase of revenues by 18% (y/y) 18 649 due to macro factors improvement Revenues 18% i.e. crude oil prices, margins, PLN exchange rate against USD and higher sales volumes. 1 123 Inc
Slide 9: Good results achieved in all segments of operations
Good results achieved in all segments of operations 3Q09 2Q10 3Q10 change y/y PLN m 9M09 9M10 change y/y 423 1123 789 87% EBIT, inc. following segments: 763 2 376 211% 116 682 736 534% EBIT acc. to LIFO -226 1467 - 137 983 462 237% Refining 791 1 871 137% -134 530 402 - Refining acc. to LIFO -79 983
Slide 10: The highest total sales volumes since the beginning of 2009
The highest total sales volumes since the beginning of 2009 Sales volumes th t 3Q09 2Q10 3Q10 9M09 9M10 Total sales volumes in 3Q10 increased by 4% (y/y) to the level of 9.2 m t as a result of + 3% - 1% gradual economic revival and higher throughput. 5 885 5 683 6 075 16 622 16 495 Increase of refin
Slide 11: Utilisation ratios increase and better product slate
Utilisation ratios increase and better product slate Crude oil throughput Utilisation ratio mt % 108 110 101 101 100 + 1% 98 100 7,3 6,9 7,4 90 90 6,6 6,2 99 90 79 79 80 84 86 78 69 70 68 3Q09 4Q09 1Q10 2Q10 3Q10 3Q09 4Q09 1Q10 2Q10 3Q10 Fuel yield Comments % Gasoline yield Crude oil throughput incr
Slide 12: Agenda
Agenda Achievements in 3Q 2010 Macroeconomic environment Financial and operating results in 3Q 2010 Liquidity Summary 12
Slide 13: Safe level of indebtedness and financial ratios
Safe level of indebtedness and financial ratios Net debt and financial leverage % Financial Safe financial situation in PLN bn, % leverage Covenant net debt / (EBITDA + dividend from 13,7 Polkomtel) on safe level below 2.0. 10,3 10,3 9,8 9,9 Systematic decreasing of financial leverage to the level o
Slide 14: Positive free cash flow in 2010 at the level of PLN 1 bn
Positive free cash flow in 2010 at the level of PLN 1 bn. change change 3Q09 2Q10 3Q10 PLN m 9M09 9M10 y/y y/y Cash flow from operations 1 355 1 209 1 625 270 2944 3 846 902 before working capital change -2 182 1 259 -1 225 957 Working capital change -699 -562 137 -827 2 468 400 1 227 Cash flow from
Slide 15: Continuation of initiatives decreasing working capital
Continuation of initiatives decreasing working capital Change in working capital Effect of operations on change of working capital in 3Q10, PLN bn as of 30.09.2010, PLN bn Change in working capital by PLN 0,7 bn in 3Q10 Additional inflows in the amount of PLN 2,2 bn 8,0 2,9 0,7 -1,1 5,8 0,0 0,0 2,2
Slide 16: Agenda
Agenda Achievements in 3Q 2010 Macroeconomic environment Financial and operating results in 3Q 2010 Liquidity Summary 16
Slide 17: Consistent realization of actions increasing PKN ORLEN value
Consistent realization of actions increasing PKN ORLEN value Subsidiaries Further reduction of debt Development investments ORLEN Lietuva Obligatory inventories Installations EBIT according to LIFO improved in 2010 by Second tranche planned to be sold in 4Q10. PX/PTA – technological start-up. over U
Slide 18: Summary
Summary Significant improvement of results PLN 0.7 bn – the best operating result acc. to LIFO since the beginning of 2009. PLN 1.3 bn of net profit – improvement by PLN 0.3 bn (y/y). Increase of sales volumes by 5% and improvement of production ratios. Large safety buffer for liquidity Effective im
Slide 19: Thank You for Your attention
Thank You for Your attention For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 365 33 90 fax: + 48 24 365 56 88 e-mail: [email protected] www.orlen.pl 19
Slide 20: Agenda: Supporting slides
Agenda > Supporting slides 20
Slide 21: PKN ORLEN: Improvement of macroeconomic environment and efficiency
PKN ORLEN Improvement of macroeconomic environment and the Company’s efficiency PLN m + PLN 366 m 800 100 789 100 700 600 420 500 423 400 300 200 100 -254 0 EBIT 3Q’09 Inventory valuation Macro Volumes Other EBIT 3Q’10 Lower impact of inventories valuation (y/y) due to stabilization of crude oil pri
Slide 22: Refining segment: Product slate improvement at full capacity utilization
Refining segment Product slate improvement at full capacity utilization PLN m + PLN 325 m 500 152 462 400 46 300 338 200 137 100 0 - 100 -211 EBIT 3Q’09 Inventory valuation Macro Volumes Other EBIT 3Q’10 Positive effect of market factors, i.e. refining margins and differential. Lower impact od inven
Slide 23: Retail segment: Market pressure on fuel margins level
Retail segment Market pressure on fuel margins level PLN m - PLN 54 m 400 363 350 14 12 309 300 22 250 -102 200 150 100 50 0 EBIT 3Q’09 Fuel margins Volumes Non-fuel sales Other EBIT 3Q’10 Active commercial activity allowed to increase sales volume by 6% (y/y). In 3 quarter 2010 PKN ORLEN retail mar
Slide 24: Petrochemical segment
Petrochemical segment Olefins, polyolefins and fertilizers sales growth and drop in PVC PLN m + PLN 77 m 150 6 142 32 82 100 65 50 -43 0 EBIT 3Q’09 Inventory valuation Macro Volumes Other EBIT 3Q’10 Increase in volume sales of the segment – stable and high level of olefins and polyolefins sales and
Slide 25: Main P&L elements breakdown by key companies in 3Q 2010
Main P&L elements breakdown by key companies in 3Q 2010 Others & ORLEN ORLEN PKN ORLEN 3) ORLEN IFRS, PLN m Unipetrol 3) consolidation Group Group (unconsolidated) Lietuva excludings 3Q10 3Q09 Revenues 16 835 3 639 4 706 -3 074 22 106 18 649 EBITDA 878 169 48 308 1 403 1 050 Depreciation & 216 163 1
Slide 26: Operating results breakdown by key segments and companies in 3Q 2010
Operating results breakdown by key segments and companies in 3Q 2010 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group (unconsolidated) Lietuva excludings 3Q10 3Q09 EBIT 662 6 -77 198 789 423 EBIT acc. to LIFO 615 50 -120 191 736 116 1) Refinery 416 -33 -45 1
Slide 27: ORLEN Lietuva Group: Key elements of the profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account1 change change 3Q09 2Q10 3Q10 IFRS, USD m 9M09 9M10 y/y y/y 1 227 1 429 1 529 25% Revenues 3 063 4 008 31% -14 41 16 - EBITDA 68 59 -13% -36 18 -7 81% EBIT 10 -8 - -35 33 -21 40% EBIT acc. to LIFO -72 -16 78% -25 -11 9 - Net result 13 -
Slide 28: UNIPETROL Group: Key elements of the profit and loss account
UNIPETROL Group Key elements of the profit and loss account1 change change 3Q09 2Q10 3Q10 IFRS, CZK m 9M09 9M10 y/y y/y 18 732 23 409 22 505 20% Revenues 49 040 63 952 30% 866 1 669 1 170 35% EBITDA 2 159 4 191 94% 5 802 238 4660% EBIT -394 1 556 - -103 671 513 - EBIT acc. to LIFO -1 504 1 169 - -35
Slide 29: Key production data
Key production data change change Key production data 3Q09 2Q10 3Q10 y/y q/q 1 Refinery in Poland Processed crude (tt) 3 870 3 506 3 664 -5% 5% Utilisation 108% 101% 100% -8 pp -1 pp 4 Fuel yield 58% 68% 65% 7 pp -3 pp 5 Middle distillates yield 38% 48% 46% 8 pp -2 pp 6 Gasoline yield 20% 20% 20% 0
Slide 30: Variable macro in 4Q 2010
Variable macro in 4Q 2010 Crude oil price increase Refining margin and U/B diff increase Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl + 6 USD/bbl + 1,3 USD/bb 75 76 78 77 83 6,5 5,4 1,8 5,3 1,4 4,0 1,2 2,9 0,9 0,7 4,0 4,7 4,1 2,2 3,1 4Q09 1Q10 2Q1
Slide 31: Macro environment
Macro environment 12 2009 av erage 2009 2010 av erage 2010 PKN ORLEN Group model refining margin 9 6 3,9 USD/bbl* 3,8 USD/bbl 3 0 January February March April May June July August September October November December 4 Ural/Brent differential 2009 av erage 2009 2010 av erage 2010 3 2 1,3 USD/bbl* 1 0
Slide 32: Dictionary
Dictionary PKN ORLEN model refining margin = revenues (93,5% Products = 36% Gasoline + 43% Diesel + 14,5% HHO) - costs (100% input: crude oil and other raw materials). Total input calculated acc. to Brent Crude quotations. Spot market quotations. Spread Ural Rdam vs fwd Brent Dtd = Med Strip - Ural
Slide 33: 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 34: Investor Relations contact
For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 365 33 90 fax + 48 24 365 56 88 e-mail: [email protected] www.orlen.pl 34