ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q4 2010 Earnings Presentation
40 slides from ORLEN Spolka Akcyjna's earnings presentation, Feb 10, 2011
Slide 1: Record high financial and operating results
Record high financial and operating results PKN ORLEN consolidated financial results for 4 quarter 2010 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 10 February 2011 1
Slide 2: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 2
Slide 3: The best yearly operating profit and net profit since 5 years
The best yearly operating profit and net profit since 5 years Record high results: PLN 3,1 bn of operating profit. PLN 2,5 bn of net profit. Marco environment improvement: increase in model refining margin and URAL/Brent differential in total by 0,6 USD/bbl (y/y) to 5,2 USD/bbl. significant increase
Slide 4: Great achievements as a result of consistent implementation of many actions
Great achievements as a result of consistent implementation of many actions Crude oil throughput increase to over 28 m tonnes. Utilisation ratio increase in ORLEN Lietuva, Unipetrol and full utilisation in Plock’s refinery. Record high sales volumes in total, over 34 m tonnes. Retail sales volumes i
Slide 5: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 5
Slide 6: Improvement of macroeconomic factors in 4Q 2010 (y/y)
Improvement of macroeconomic factors in 4Q 2010 (y/y) 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 + 12 USD/bbl + 1,9 USD/bbl 78 87 6,5 75 76 77 5,4 1,8 4,8 1,4 4,0 2,9 1,5 0,9 0,7 4,0
Slide 7: Maintained GDP growth in 4Q 2010 and further increase of diesel consumption
Maintained GDP growth in 4Q 2010 and further increase of diesel consumption GDP increase Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 4Q09 1Q10 2Q10 3Q10 4Q101 4Q09 4Q102 4Q09 4Q102 +2% 2,89 -4% 2,82 3,8 4,7 3,3-4,7 2,8 3,1 1,06 1,02 Poland +6% -1% 4,2-4,4 7,9
Slide 8: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 8
Slide 9: Significant improvement in financial and operating results in 2010
Significant improvement in financial and operating results in 2010 4Q09 3Q10 4Q10 PLN m 12M09 12M10 + 29% +23% PLN 83,5 bn of revenues in 2010 22 106 22 931 83 547 due to record high sales and macro 17 807 67 928 improvement, i.e. crude price, Revenues margins and PLN exchange rate against USD. + 0,
Slide 10: Good results achieved in all segments
Good results achieved in all segments 4Q09 3Q10 4Q10 change y/y PLN m 12M09 12M10 change y/y 334 789 747 124% EBIT, of which: 1097 3 123 185% 171 736 248 45% EBIT acc. to LIFO -55 1715 - 333 462 610 83% Refining 1124 2 481 121% 173 402 141 -18% Refining acc. to LIFO 94 1124 1096% 207 309 224 8% Reta
Slide 11: The highest in the history total sales volumes, over 34 mt
The highest in the history total sales volumes, over 34 mt Sales volumes th t 4Q09 3Q10 4Q10 12M09 12M10 Total sales volumes in 4q2010 increased by 5% (y/y) to the level of 8,9 mt as a result of + 8% + 1% economic pick-up and higher crude 5 471 6 075 5 925 22 092 22 419 throughput. Refining sales vo
Slide 12: Increased crude oil throughput up to 7,5 mt in 4Q 2010
Increased crude oil throughput up to 7,5 mt in 4Q 2010 Crude oil throughput Utilisation ratio mt % 110 101 101 100 102 +14% 98 100 7,4 7,5 90 100 6,6 6,9 99 6,2 90 83 79 79 80 86 78 69 70 68 4Q09 1Q10 2Q10 3Q10 4Q10 4Q09 1Q10 2Q10 3Q10 4Q10 Fuel yield Comments % Gasoline yield Middle distillates yie
Slide 13: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 13
Slide 14: 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, % gearing Decreasing of indebtedness by PLN 2,5 bn (y/y) and 10,3 10,3 9,8 9,9 financial gearing to the level of 30-40% determined in 7,8 strategy. Covenant net debt / (EBI
Slide 15: Over PLN 6,1 bn of cash flow from operations in 2010
Over PLN 6,1 bn of cash flow from operations in 2010 change change 4Q09 3Q10 4Q10 PLN m 12M09 12M10 y/y y/y Cash flow from operations 401 1 625 1 385 984 3 348 5 231 1 883 before working capital change 2 515 -1 225 1 441 -1 074 Working capital change 1 814 879 -935 2 916 400 2 826 -90 Cash flow from
Slide 16: 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 4Q10, PLN bn as of 31.12.2010, PLN bn Change in working capital by PLN 2,1 bn in 4Q2010 Additional inflows in the amount of PLN 4,3 bn 0,3 4,3 8,2 0,9 0,9 2,0 2,2 -2,
Slide 17: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 17
Slide 18: Operational priorities
Operational priorities PKN ORLEN INVESTMENTS Sales: Petrochemicals: Despite of the growing competition annual term contracts were PX/PTA - technological start up is pending . signed at the level of the previous year. Most modern unit of that type in Europe. Further increase in market share despite h
Slide 19: Actions releasing capital
Actions releasing capital POLKOMTEL Cooperation between all shareholders in the sales process. Sending information memorandum is in progress, gathering initial offers in 1q2010. Finalization of sales process planned in 1H2011. ANWIL Conducting analysis of business lines split. Potential investors ar
Slide 20: Building new segments
Building new segments UPSTREAM PROJECTS ENERGY Latvian shelf – work out data from exploration gathered so Advanced preparation of investment in Włocławek, final far. decision to make in 3q 2011 The drill is planned at the turn of 2011/2012. Process of the power plant builder selection is in Polish l
Slide 21: Agenda
Agenda Achievements in 2010 Macroeconomic environment Financial and operating results in 4Q 2010 Liquidity Priorities for 2011 Summary 21
Slide 22: Summary of 2010
Summary of 2010 Very good results PLN 3,1 billion of operating result, improvement of the result by PLN 2 billion (y/y) . PLN 2,5 billion of net profit, improvement of the result by PLN 1,2 billion (y/y). Increase in sales volumes by 2% (y/y) to the record level of over 34 m tonnes. Big safety buffe
Slide 23: Thank You for Your attention
Thank You for Your attention For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax: + 48 24 367 77 11 e-mail: [email protected] www.orlen.pl 23
Slide 24: Supporting slides
Agenda > Supporting slides 24
Slide 25: PKN ORLEN Improvement of macroeconomic environment
PKN ORLEN Improvement of macroeconomic environment PLN m PLN + 413 m 1.200 417 1.000 -73 800 747 336 -267 600 400 334 200 0 EBIT 4Q’09 Inventory valuation Macro Volumes Other EBIT 4Q’10 Higher impact of inventory valuation (y/y) due to growing crude oil and positive impact of macroeconomic factors.
Slide 26: Refining segment: increase of utilization in all Group refineries
Refining segment Increase of utilization in all Group refineries PLN m PLN + 277 m 1.000 309 900 800 -101 700 309 610 600 -240 500 400 333 300 200 100 0 EBIT 4Q’09 Inventory valuation Macro Volumes Other EBIT 4Q’10 Positive impact of inventory valuation (y/y) due to increasing crude oil prices, refi
Slide 27: Retail segment: market pressure on fuel margins level
Retail segment Market pressure on fuel margins level PLN m PLN + 17 m 250 18 224 207 15 -6 200 -10 150 100 50 0 EBIT 4Q’09 Fuel margins Volumes Non-fuel Other EBIT 4Q’10 sales Increase of volume sales by 3% (y/y) achieved mainly on Polish market at further optimization of the number of CoDo fuel sta
Slide 28: Petrochemical segment
Petrochemical segment Olefins, polyolefins and fertilizers sales growth and stable level of PVC PLN m PLN + 134 m 140 13 120 108 117 -14 100 80 60 40 20 27 0 - 20 -17 EBIT 4Q’09 Inventory valuation Macro Volumes Other EBIT 4Q’10 Increase in volume sales of olefins, polyolefins and fertilizers at mai
Slide 29: Main P&L elements breakdown by key companies in 4Q 2010
Main P&L elements breakdown by key companies in 4Q 2010 Others & ORLEN ORLEN PKN ORLEN 3) ORLEN IFRS, PLN m Unipetrol 3) consolidation Group Group (unconsolidated) Lietuva excludings 4Q10 4Q09 Revenues 17 349 3 551 5 217 -3 186 22 931 17 807 EBITDA 992 171 35 145 1 343 965 Depreciation & 222 139 123
Slide 30: Operating results breakdown by key segments and companies in 4Q 2010
Operating results breakdown by key segments and companies in 4Q 2010 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group (unconsolidated) Lietuva excludings 4Q10 4Q09 EBIT 770 32 -88 33 747 334 EBIT acc. to LIFO 525 -68 -218 9 248 171 1) Refinery 687 -13 -63 -1
Slide 31: ORLEN Lietuva Group. Key elements of the profit and loss account
ORLEN Lietuva Group. Key elements of the profit and loss account1 change change 4Q09 3Q10 4Q10 IFRS, USD m 12M09 12M10 y/y y/y 1 246 1 542 1 743 40% Revenues 4 333 5 786 34% 8 16 39 388% EBITDA 80 104 30% -11 -7 15 - EBIT 0,5 11 2160% -39 -21 -24 38% EBIT acc. to LIFO -109 -40 63% -41 9 1 - Net resu
Slide 32: UNIPETROL Group. Key elements of the profit and loss account
UNIPETROL Group. Key elements of the profit and loss account1 change change 4Q09 3Q10 4Q10 IFRS, CZK m 12M09 12M10 y/y y/y 18 347 22 505 22 014 20% Revenues 67 387 85 967 28% 620 1 170 983 59% EBITDA 2 778 5 174 86% -260 238 122 - EBIT -654 1 678 - -563 513 -499 11% EBIT acc. to LIFO -2 067 670 - -2
Slide 33: Key production data
Key production data change change change Key production data 4Q09 3Q10 4Q10 (y/y) (q/q) 12M09 12M10 (y/y) 1 Refinery in Poland Processed crude (tt) 3 498 3 664 3 788 8% 3% 14 526 14 452 -1% Utilisation 98% 100% 100% 2 pp 0 pp 102% 100% -2 pp 4 Fuel yield 69% 65% 63% -6 pp -2 pp 65% 64% -1 pp 5 Middl
Slide 34: Major planned maintenance shutdowns for 2011
Major planned maintenance shutdowns for 2011 1Q 11 2Q 11 3Q 11 4Q 11 HDS V Hydrogen Unit Hydrocracker H-Oil FCC Refinery Litvinov - refinery Litvinov - petrochemical Kralupy - HDS Paramo Wider range of planned maintenance shutdowns comparing to previous year. Shutdowns of Hydrocracker, Hydrogen Unit
Slide 35: Macro environment in 2010 vs 2009
Macro environment in 2010 vs 2009 12 PKN ORLEN Group model refining margin 2009 av erage 2009 2010 av erage 2010 9 6 3,8 USD/bbl (2010) 3 3,8 USD/bbl (2009) 0 January February March April May June July August September October November December 4 Ural/Brent differential 2009 av erage 2009 2010 av er
Slide 36: Macro environment in 1Q 2011
Macro environment in 1Q 2011 Crude oil price increase Refining margin decrease, whereas U/B diff increase Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl +10 USD/bbl -0,5 USD/bbl 87 97 6,5 76 78 77 5,4 1,8 4,8 1,4 4,0 4,3 1,5 0,9 2,6 4,0 4,7 3,1 3,3
Slide 37: Macro environment forecast for 2011
Macro environment forecast for 2011 12 PKN ORLEN Group model refining margin 2010 av erage 2011 2011 av erage 2010 9 6 3.8 USD/bbl 3 1.7 USD/bbl 0 January February March April May June July August September October November December 5 Ural/Brent differential 2010 av erage 2011 2011 av erage 2010 4 3
Slide 38: 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 39: 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 40: For more information on PKN ORLEN, please contact Investor Relations
For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax + 48 24 367 77 11 e-mail: [email protected] www.orlen.pl 40