ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Investor Day (November 2008)
32 slides from ORLEN Spolka Akcyjna's investor day presentation, Nov 26, 2008
Slide 1: PKN ORLEN Group Strategy 2009 – 2013
PKN ORLEN Group Strategy 2009 – 2013 PKN ORLEN – Taking pole position Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 26 November 2008 1
Slide 2: Agenda
AGENDA Strategic Directions of PKN ORLEN 2009-2013 Increasing Value in Segments Strategic Financial Targets Supporting Slides 2
Slide 3: Concentration on efficiency strengthening and further development
Concentration on efficiency strengthening and further development as a fuel of the Company’s value growth REFINING RETAIL PETROCHEMICALS Foundation of value creation UPSTREAM ENERGY New segments TELECOMUNICATION CHEMICALS Disinvestments PKN ORLEN IN THE FUTURE • Efficiency and growth oriented Compan
Slide 4: Activities strengthening efficiency
Activities strengthening efficiency …… Operational excellence • Focusing on the most profitable investment projects connected with spendings optimization • Systematic efficiency improvement based on the best world benchmarks • Achieving cost synergies through the Group’s economies of scale and centr
Slide 5: … allow to take pole position
… allow to take pole position Development of the • Development of strategic logistic assets (transport and storage infrastructure) as core business increasing delivery safety and strengthening of competitive advantage • Processing of different crude oil grades, improving economics • Further increase
Slide 6: Agenda
AGENDA Strategic Directions of PKN ORLEN 2009-2013 Increasing Value in Segments Strategic Financial Targets Supporting Slides 6
Slide 7: Exploration and production
Exploration and production Security of deliveries and competitive advantage with raw materials supplies Infrastructure of raw materials supplies Lithuania PKN ORLEN refinery Possibility of sea delivery Poland Oil pipeline Planned oil pipeline Pipeline temporary inoperative Czech Possible directions
Slide 8: Refining and marketing - Refining (1/3)
Refining and marketing - Refining (1/3) Optimization of product range, volumes increase and costs control Refining assets1) Supersite (Plock) Gold Mazeikiu (10.0; 10.3) Silver (MN, Litvinov) Bronze (Kralupy) Niche Plock Litvinov (5.5, 7.0) (13.8; 9.5) Trader Trzebinia (0.5) Speciality (Paramo) Kralu
Slide 9: Refining and marketing - Wholesale (2/3)
Refining and marketing - Wholesale (2/3) Maintain leader position Market share Data for 2007 Lithuania 85 % Lithuania Poland 59 % Czech Rep. 30 % Poland Share of Czech companies from Republic PKN ORLEN Group Key activities Delivery Gradual efficiency improvement to the level of Entering into new mar
Slide 10: Refining and marketing - Logistics (3/3)
Refining and marketing - Logistics (3/3) Key element of the Company’s competitive advantage Logistics infrastructure Poland: Gdańsk PKN ORLEN storage depots Silesia/Radzionków storage depot Płock OLPP storage depots PKN ORLEN pipeline Butinge PKN ORLEN pipeline under Mazeikiai construction Klaipeda
Slide 11: Retail
Retail Fuels sales increase higher than the market Market share Lithuania 5% Lithuania Poland 28% Czech 13% Republic Germany Poland Germany 4% Czech Republic Data for 2007 Key activities Delivery Continuation of effective brand management Owning the most recognizable brand in the region policy Impro
Slide 12: Petrochemicals (1/2)
Petrochemicals (1/2) Increase in production volume and entering new markets Petrochemicals1): Current production capacities Ethylene 1,16 mt/y Propylene 0,73 mt/y Benzene, Toluene, Phenol 0,66 mt/y Polyolefins 2) Poliethylene 0,55 mt/y Polipropylene 0,43 mt/y Key activities Delivery Entering new mar
Slide 13: Petrochemicals (2/2)
Petrochemicals (2/2) Improvement of efficiency by PLN 200 m, exit from chemical segment Attractiveness of PKN ORLEN products Core business – growth drivers PX/PTA Strengthening position High (size, growth, profitability through full integration PO PX/PTA with refinery Market attractiveness Average P
Slide 14: Energy
Energy Achieving maximum synergies with refining part is a base for efficiency growth and potential for cooperation with sector partners Business challenges Increase in energy prices – caused by the increase in energy raw materials prices, investment necessity and capacity deficit Growing costs and
Slide 15: Agenda
AGENDA Strategic Directions of PKN ORLEN 2009-2013 Increasing Value in Segments Strategic Financial Targets Supporting Slides 15
Slide 16: Strategy growth with secured financials
Strategy growth with secured financials Consistent increase of return on capital employed EBITDA1) in accord. with ROACE 2) (%) CAPEX (PLN bn) CAPEX structure 3) LIFO (PLN bn) 12% 11% 4 10 3,3 PLN 12,6 bn 7,8 9% 3 7,0 2,5 7,5 36% 8% 2 1,3 5 3,7 1 58% 4% 3% 2,5 0 6% 2009-2011 2012-2013 0 Annual avera
Slide 17: Creating value in segments
Creating value in segments Balanced development in all segments EBITDA1) in accord. with LIFO (2013 vs 2007; PLN bn) CAPEX annual average (2009-2013; PLN bn) 5 4,5 EBITDA2) PLN 7,8 bn 1,2 1,0 4 1,0 3 2,7 0,8 2 1,2 2,1 1 1,4 0,4 0,3 0,18 0,8 0 0,14 0,07 Exploration and Refining and Retail Petrochemic
Slide 18: Efficiency improvement is a key element of the Company's value growth
Efficiency improvement is a key element of the Company’s value growth Increase of EBITDA in 2013 by over 30% due to efficiency improvement Influence of efficiency on EBITDA1) Share in EBITDA increase 800 PLN m others 700 sales 600 200 logistics 32% production 500 100 400 EBITDA improvement in 300 30
Slide 19: Efficiency improvement
Efficiency improvement Operating efficiency of production unit 2007 2013 Change Energy intensity1) index 100 92 -8% Labor intensity 1) index 100 81 -19% Processing index 100 106 + 6% utilization 1) Middle distillates % 43 49 + 6 p.p. Heavy fractions % 16 14 - 2 p.p. Efficiency in retail sales Effici
Slide 20: Debt ratios
Debt ratios High free cash flow from 2010 Capex policy Comment Review and rigorously assess rate of return on Acceptable temporary increase in financial gearing in investments that are being realized and planned 2009 due to continuation of advanced investment Advanced projects – continuation with re
Slide 21: Dividend policy
Dividend policy PKN ORLEN strategy 2009-2013 Free cash flow to equity (FCFE) Net profit + amortization To maintain continuity in cash generation and support financial gearing decrease, PKN ORLEN sets its Debt structure dividend policy on FCFE ratio (Free Cash Flow to adjusting to Equity) optimal lev
Slide 22: PKN ORLEN is an attractive investment
PKN ORLEN is an attractive investment STRENGTHS DEVELOPMENT OPPORTUNITIES Attractive market of new EU countries with Efficiency improvements through growth potential operational excellence and integration of assets Leading position in the Central and Eastern EU region in the downstream refining and
Slide 23: Agenda
AGENDA Strategic Directions of PKN ORLEN 2009-2013 Increasing Value in Segments Strategic Financial Targets Supporting Slides 23
Slide 24: Exploration and production
Exploration and production Financial and operational highlights EBITDA1) in acc. with CAPEX structure3) LIFO (PLN, m) ROACE2) (%) CAPEX (PLN, m) 200 30% 200 PLN 0,7 bln 182 15% 25% 23,0% 150 133 20% 17,0% 100 50% 100 15% 75 35% 10% 5% 0 No data No data 2009-2011 2012-2013 Exploration Recognition Pro
Slide 25: Refining and marketing (Refining, Wholesale, Logistics)
Refining and marketing (Refining, Wholesale, Logistics) Financial and operational highlights EBITDA1) in acc. with LIFO ROACE2) (%) CAPEX (PLN, bln) CAPEX structure3) (PLN, bln) 1,5 5 15% 1,3 PLN 5,2 bln 4,5 4,1 1,0 4 12% 11% 32% 1,0 9% 3 9% 0,6 57% 2 6% 0,5 1,5 11% 1 3% 3% 0,0 Development Regulator
Slide 26: Retail
Retail Financial and operational highlights EBITDA1) in acc. with LIFO ROACE2) (%) CAPEX (PLN, bln) CAPEX structure3) (PLN, bln) 20% 0,4 1,5 18% PLN 1,4 bln 1,2 15% 0,3 23% 1,2 1,1 15% 0,3 0,29 0,2 0,9 0,8 10% 10% 0,2 5% 0,6 5% 0,1 72% 0,3 0,0 Development Regulatory Maintenance 0 0% 2009-2011 2012-2
Slide 27: Petrochemicals
Petrochemicals Financial and operational highlights EBITDA1) in acc. with LIFO (PLN, bln) ROACE2) (%) CAPEX (PLN, bln) CAPEX structure3) 3 20% 1,5 PLN 4,9 bln 2,7 1,5 2,4 24% 15% 14% 1,2 0,98 2,0 13% 2 10% 0,9 10% 2% 0,6 1 5% 0,3 0,2 74% 0,0 Development Regulatory Maintenance 0 0% 2009-2011 2012-201
Slide 28: Macroeconomic Assumptions for 2013
Macroeconomic Assumptions for 2013 Macroeconomic Factor unit 2007 2011E 2013E PKN ORLEN (Group) model refining margin 1) USD / bbl 3,7 3,4 3,6 PKN ORLEN model margin on polyolefins 2) EUR / t 313 252 267 PKN ORLEN model margin on olefins 3) EUR / t 405 460 491 PKN ORLEN model chemicals margin 4) EUR
Slide 29: Forecast of fuel consumption 2009-2013
Forecast of fuel consumption 2009-2013 Forecasts of fuel consumption and petrochemical products in region Petrol 1) CAGR 1) Forecast for consumption in mt in 2009. Petrol consumption; consumption; CAGR CAGR 1) 0,33% 0,33% Middle-distillates consumption; Middle-distillates consumption; CAGR 1) 1,32%
Slide 30: Supply Routes Diversification
Supply Routes Diversification Sea Oil Terminals in Gdansk and Butinge Guarantee Alternative Supply Routes Sea terminal [capacity] (70) Primorsk [ Ca Kirishi Oil pipeline [capacity] 60 ] Yaroslavi Projected Oil pipeline [Ca 78] (18) Ventspils [Ca 45] Refinery of PKN ORLEN Group Butinge DRUZHBA (14) [
Slide 31: Disclaimer Statement
Disclaimer Statement This presentation of the PKN ORLEN Capital Group strategy for the years 2009-2013 (“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 p
Slide 32: Thank you for your attention
Thank you for your attention To obtain further information about PKN ORLEN please do not hesitate to contact Investor Relations Department: telephone: + 48 24 365 33 90 fax: + 48 24 365 56 88 e-mail: [email protected] www.orlen.pl 32