ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q2 2011 Earnings Presentation
37 slides from ORLEN Spolka Akcyjna's earnings presentation, Aug 5, 2011
Slide 1: Good results achieved in difficult macro environment
Good results achieved in difficult macro environment PKN ORLEN consolidated financial results for 2 quarter 2011 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 5 August 2011 1
Slide 2: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 2
Slide 3: PKN ORLEN achievements in 2Q 2011
PKN ORLEN achievements in 2Q 2011 FINANCIAL PARAMETERS PLN 1,0 bn of operating profit and PLN 0,9 bn of net profit. Unstable macro environment: increase in crude oil price by 50% (y/y). decrease in model refining margin and URAL/Brent differential in total by (-) 2,2 USD/bbl (y/y) to 4,3 USD/bbl. in
Slide 4: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 4
Slide 5: Unstable macro environment in 2Q 2011 (y/y)
Unstable macro environment in 2Q 2011 (y/y) Crude oil price increase by 50% Decrease in total of refining margin and U/B diff by 30% Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl + 39 USD/bbl - 2,2 USD/bbl 117 6,5 105 87 1,8 4,8 78 77 4,0 4,4 4,3 1
Slide 6: GDP growth slowdown and high prices limit fuel consumption
GDP growth slowdown and high prices limit fuel consumption GDP increase Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 2Q10 3Q10 4Q10 1Q11 2Q111 2Q10 2Q112 2Q10 2Q112 + 5% - 2% 4,2 4,5 4,4 3,9 - 4,5 2,84 2,99 3,5 1,06 1,04 Poland - 5% - 3% 4,8 8,08 7,64 3,9 3,9
Slide 7: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 7
Slide 8: Revenues in 2Q 2011 amounted to PLN 25 bn
Revenues in 2Q 2011 amounted to PLN 25 bn 2Q10 1Q11 2Q11 PLN m 6M10 6M11 Increase of revenues by 22% (y/y) + 22% + 25% mainly due to growth of crude oil 25 641 48 315 prices and higher sales volumes. 21 068 22 674 Revenues 38 510 Increase of EBIT acc. to LIFO by PLN 0,1 bn (y/y) achieved mainly due
Slide 9: Higher operating profit according to LIFO due to petrochemical segment
Higher operating profit according to LIFO due to petrochemical segment 2Q10 1Q11 2Q11 change y/y PLN m 6M10 6M11 change y/y 1123 1339 1 009 -10% EBIT, of which: 1587 2 348 48% 682 450 770 13% EBIT acc. to LIFO 731 1220 67% 983 1028 510 -48% Refining 1409 1 538 9% 530 185 303 -43% Refining acc. to LI
Slide 10: Sales volumes growth in petrochemicals and retail
Sales volumes growth in petrochemicals and retail 2Q10 1Q11 2Q11 kt 6M10 6M11 Total sales volumes in 2Q 2011 + 1% + 4% increased by 1% (y/y) to 8,6 mt due to 8 545 8 070 8 597 16 061 16 667 good conditions in petrochemicals. Sales volumes Refining sales decrease by (-) 2% (y/y) due to lower producti
Slide 11: Negative impact of shutdowns
Negative impact of shutdowns Crude oil throughput Utilisation ratio mt % 100 100 97 - 2% 93 100 97 90 7,4 7,5 90 93 87 87 6,9 6,8 89 6,4 85 85 85 80 83 69 70 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Fuel yield Comments % Gasoline yield Due to shutdowns in 2Q2011 crude oil throughput in ORLE
Slide 12: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 12
Slide 13: Financing secured for the next 5 years
Financing secured for the next 5 years Safe financial situation Net debt and financial gearing % Financial in PLN bn, % gearing Decrease of indebtedness to PLN 7,9 bn due to consistently -1,9 bn realized activities. 9,8 9,9 Maintaining optimal level of gearing, determined in the 7,8 8,5 7,9 strategy
Slide 14: Over PLN 1,0 bn of cash flow from operations
Over PLN 1,0 bn of cash flow from operations change change 2Q10 1Q11 2Q11 PLN m 6M10 6M11 y/y y/y Cash flow from operations 1 194 1 928 1 589 395 2 220 3 518 1 298 before working capital change 1 274 -1 970 -582 -1 856 Working capital change 664 -2 553 -3 217 2 468 -42 1 007 -1 461 Cash flow from op
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 2Q2011, PLN bn as of 30.06.2011, PLN bn Change in working capital by PLN 0,5 bn in 2Q2011 Additional inflows in the amount of PLN 2,9 bn 0,5 10,3 3,4 2,9 7,4 (1) -1,7
Slide 16: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 16
Slide 17: Actions releasing capital – sale of Polkomtel
Actions releasing capital – sale of Polkomtel POLKOMTEL Preliminary agreement signed in June for the sale of 100% shares to Spartan Capital Holdings Sp. z o.o., including the entire 24,39% shareholding owned by PKN ORLEN. The transaction is subject to approval by the Polish Office of Competition and
Slide 18: Operating efficiency – start-up of PTA production
Operating efficiency – start-up of PTA production PKN ORLEN Sales: Increase in petrochemical and retail sales volumes. Maintenance shutdowns: Finishing of planned maintenance shutdowns in 2Q2011: Hydrocracker in Plock and turnaround of ORLEN Lietuva refinery. Maintenance shutdowns of Hydrogen plant
Slide 19: Continuing of upstream and energy projects
Continuing of upstream and energy projects CRUDE OIL SHALE GAS Latvian shelf – analysis of newly obtained 3D Lublin region – seismic works at shale gas seismic data and choice of wholes locations is concessions are started. in progress. 2 drills planned in 2 half of 2011 and next UPSTREAM The drill
Slide 20: Agenda
Agenda Achievements in 2Q 2011 Macroeconomic environment Financial and operating results in 2Q 2011 Liquidity Realization of priorities Summary 20
Slide 21: Summary
Summary Good results in difficult macro environment PLN 25,6 bn of revenues from sales, increase by o 22% (y/y). PLN 1,0 bn of operating profit and PLN 0,9 bn of net profit. 8,6 m t of sales volumes; increase by 1% (y/y). Stable liquidity situation Reduction in debt by PLN 1,9 bn (y/y) to PLN 7,9 bn
Slide 22: 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 22
Slide 23: Supporting slides
Agenda Supporting slides 23
Slide 24: Sales increase offset by unfavorable refining macro
PKN ORLEN Sales increase offset by unfavorable refining macro PLN m PLN -114 m 1.200 1.123 220 1.009 1.000 -202 216 800 600 -348 400 200 0 EBIT 2q2010 Inventories Macro Volumes Others EBIT 2q2011 valuation Lower positive impact of inventories valuation (y/y) in 2Q2011 and observed worsening of macro
Slide 25: Refining segment
Refining segment Negative impact of low refining margins and maintenance shutdowns PLN m PLN - 473 m 983 1.000 900 800 700 -246 600 264 510 500 400 300 200 -456 -35 100 0 Inventories EBIT 2q2010 Macro Volumes Others EBIT 2q2011 valuation Lower positive impact of inventories valuation due to limitati
Slide 26: Retail segment
Retail segment Increase of sales volumes limited by lower fuel margins PLN m PLN -24 m 24 250 20 216 200 192 -10 -58 150 100 50 0 EBIT 2q2010 Fuel margins Volumes Non-fuel Others EBIT 2q2011 sales Increase of retail sales by 3% (y/y) achieved on Polish and German market at stable sales volumes on Li
Slide 27: Petrochemical segment
Petrochemical segment Improvement of petrochemical margins and sales volumes increase PLN m 600 PLN + 399 m 231 16 521 500 400 300 108 200 44 122 100 0 EBIT 2q2010 Inventories Macro Volumes Others EBIT 2q2011 valuation Continuing of positive macroeconomic trends. PTA sales in the amount of 83 th.t a
Slide 28: Main P&L elements breakdown by key companies in 2Q 2011
Main P&L elements breakdown by key companies in 2Q 2011 Others & ORLEN ORLEN PKN ORLEN 3) ORLEN IFRS, PLN m Unipetrol 3) consolidation Group Group Change (unconsolidated) Lietuva excludings 2Q11 2Q10 Revenues 18 973 4 225 5 764 -3 321 25 641 21 068 22% EBITDA 947 166 102 371 1 586 1 735 -9% Deprecia
Slide 29: Operating results breakdown by key segments and companies in 2Q 2011
Operating results breakdown by key segments and companies in 2Q 2011 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group Change (unconsolidated) Lietuva excludings 2Q11 2Q10 EBIT 711 30 4 264 1 009 1 123 -10% EBIT acc. to LIFO 432 40 42 256 770 682 13% Refinery
Slide 30: ORLEN Lietuva Group key elements of profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account 1 change change 2Q10 1Q11 2Q11 IFRS, USD m 6M10 6M11 y/y y/y 1 429 1 754 2 102 47% Revenues 2 501 3 856 54% 41 73 36 -12% EBITDA 49 109 122% 18 53 16 -11% EBIT 4 69 1869% 33 -18 29 -12% EBIT acc. to LIFO 10 12 20% -11 52 9 - Net result
Slide 31: UNIPETROL Group key elements of profit and loss account
UNIPETROL Group Key elements of the profit and loss account1 change change 2Q10 1Q11 2Q11 IFRS, CZK m 6M10 6M11 y/y y/y 23 409 23 088 25 950 11% Revenues 41 448 49 038 18% 1 669 1 379 1 012 -39% EBITDA 3 021 2 390 -21% 802 571 224 -72% EBIT 1 318 795 -40% 671 4 274 -59% EBIT acc. to LIFO 656 278 -58
Slide 32: Key production data
Key production data change change change Key production data 2Q10 1Q11 2Q11 (y/y) (q/q) 6M10 6M11 (y/y) 1 Refinery in Poland Processed crude (tt) 3 506 3 301 3 480 -1% 5% 7 001 6 781 -3% Utilisation 93% 87% 85% -8 pp -2 pp 93% 86% -7 pp 4 Fuel yield 80% 79% 74% -6 pp -5 pp 76% 77% 1 pp 5 Middle dist
Slide 33: Macro environment in 3Q 2011
Macro environment in 3Q 2011 Stable crude oil price Decrease in total of refining margin and U/B diff Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl 0 USD/bbl - 0,6 USD/bbl 117 117 4,8 105 4,0 4,4 4,3 87 1,5 3,7 77 0,9 2,9 2,9 1,2 3,1 3,3 2,5 1,5 1,
Slide 34: Macro environment
Macro environment 8 PKN ORLEN Group model refining margin 2010 av erage 2011 2011 av erage 2010 6 4 3.8 USD/bbl 2 1.6 USD/bbl 0 -2 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 2.6 USD/bbl 2 1
Slide 35: 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 36: 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 37: 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 37