ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q1 2011 Earnings Presentation
37 slides from ORLEN Spolka Akcyjna's earnings presentation, Apr 29, 2011
Slide 1: Targets achieved in the face of market challenges
Targets achieved in the face of market challenges PKN ORLEN consolidated financial results for 1 quarter 2011 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 29 April 2011 1
Slide 2: Agenda
Agenda ` Achievements in 1Q 2011 Macroeconomic environment Financial and operating results in 1Q 2011 Liquidity Realization of priorities Summary 2
Slide 3: PKN ORLEN achievements in 1Q 2011
PKN ORLEN achievements in 1Q 2011 FINANCIAL PARAMETERS ` Good results: ` PLN 1,3 bn of operating profit. ` PLN 1,1 bn of net profit. ` Unstable macro environment: ` decrease in model refining margin and URAL/Brent differential in total by (-) 1,0 USD/bbl (y/y) to 4,4 USD/bbl. ` significant increase
Slide 4: Agenda
Agenda Achievements in 1Q 2011 ` Macroeconomic environment Financial and operating results in 1Q 2011 Liquidity Realization of priorities Summary 4
Slide 5: Unstable macro environment in 1Q 2011 (y/y)
Unstable macro environment in 1Q 2011 (y/y) Crude oil price increase 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 + 29 USD/bbl - 1,0 USD/bbl 105 6,5 87 5,4 1,8 76 78 77 4,8 4,4 1,4 4,0 1,5 0,9 2,9
Slide 6: Increase in diesel consumption as a result of GDP growth
Increase in diesel consumption as a result of GDP growth GDP increase Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 1Q10 2Q10 3Q10 4Q101 1Q111 1Q10 1Q112 1Q10 1Q112 + 11% 4,5 - 4% 3,0 3,5 4,2 3,9 - 4,5 2,45 2,73 0,94 0,90 Poland + 6% + 3% 4,3 3,9 4,0 7,15 7,57
Slide 7: Agenda
Agenda Achievements in 1Q 2011 Macroeconomic environment ` Financial and operating results in 1Q 2011 Liquidity Realization of priorities Summary 7
Slide 8: Improvement in financial results (y/y)
Improvement in financial results (y/y) PLN m 1Q10 4Q10 1Q11 + 30% ` Increase of revenues by 30% (y/y) mainly due to growth of crude oil prices 22 931 22 674 and higher sales volumes. Revenues 17 442 ` Increase of EBIT acc. to LIFO by PLN 0,4 bn (y/y) achieved mainly due to + 0,4 bn margins improveme
Slide 9: Higher operating profit according to LIFO due to growth in petrochemicals
Higher operating profit according to LIFO due to growth in petrochemicals 1Q10 4Q10 1Q11 change y/y PLN m 3M10 3M11 change y/y 464 747 1 339 189% EBIT, of which: 464 1 339 189% 49 248 450 818% EBIT acc. to LIFO 49 450 818% 426 610 1 028 141% Refining 426 1 028 141% 51 141 185 263% Refining acc. to L
Slide 10: Sales volumes growth in all segments
Sales volumes growth in all segments Sales volumes kt ` Total sales volumes in 1Q 2011 increased 1Q10 4Q10 1Q11 by 7% (y/y) to over 8 mt due to higher crude oil throughput. + 10% ` Refining sales volumes growth by 10% (y/y) 5 925 5 217 achieved mainly by ORLEN Lietuva and 4 737 Segment - refining Un
Slide 11: Crude oil throughput growth and better fuel yield structure (y/y)
Crude oil throughput growth and better fuel yield structure (y/y) Crude oil throughput Utilisation ratio mt % 100 100 97 + 3% 93 93 100 89 97 90 7,5 90 87 6,9 7,4 85 93 6,2 6,4 80 85 74 69 70 67 1Q10 2Q10 3Q10 4Q10 1Q11 1Q10 2Q10 3Q10 4Q10 1Q11 Fuel yield Comments % Gasoline yield ` Crude oil throug
Slide 12: Agenda
Agenda Achievements in 1Q 2011 Macroeconomic environment Financial and operating results in 1Q 2011 ` Liquidity Realization of priorities Summary 12
Slide 13: Safe level of indebtedness and financial ratios
Safe level of indebtedness and financial ratios Refinancing for the Company secured Net debt and financial gearing % Financial in PLN bn, % gearing ` Decrease of indebtedness by PLN 1,8 bn (y/y) and financial gearing to 33%. The range determined in strategy is 30- -1,8 bn 40%. 10,3 9,8 9,9 7,8 8,5 `
Slide 14: Operational cash flows limited by working capital growth
Operational cash flows limited by working capital growth change change 1Q10 4Q10 1Q11 PLN m 3M10 3M11 y/y y/y Cash flow from operations 1 011 1 385 1 928 917 1 011 1 928 917 before working capital change -595 1 441 -1 970 -1 375 Working capital change -595 -1 970 -1 375 416 2 826 -42 -458 Cash flow
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 1Q11, PLN bn as of 31.03.2011, PLN bn Change in working capital by PLN 0,9 bn in 1q2011 Additional inflows in the amount of PLN 3,4 bn 4,3 0,8 10,0 0,0 0,1 3,4 2,0 -1
Slide 16: Agenda
Agenda Achievements in 1Q 2011 Macroeconomic environment Financial and operating results in 1Q 2011 Liquidity ` Realization of priorities Summary 16
Slide 17: Consistent realization of operations increasing PKN ORLEN value
Consistent realization of operations increasing PKN ORLEN value ACTIONS RELEASING CAPITAL OPERATIONAL EFFICIENCY PKN ORLEN Sales: ` Increase of sales volumes despite high prices limiting margins. Investments: POLKOMTEL ` Start of production and sales of PTA. Signing of sales ` Distribution of inform
Slide 18: Continuing of upstream and energy projects
Continuing of upstream and energy projects CONVENTIONAL RESERVES 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. ` First analysis findings in mid 2011. UPSTREAM ` T
Slide 19: Agenda
Agenda Achievements in 1Q 2011 Macroeconomic environment Financial and operating results in 1Q 2011 Liquidity Realization of priorities ` Summary 19
Slide 20: Summary
Summary ` Good results in difficult macro environment ` PLN 1,3 bn of operating profit, improvement of result by PLN 0,9 bn (y/y). ` PLN 1,1 bn of net profit, improvement of result by PLN 0,5 bn (y/y). ` Increase of sales volumes by 7% (y/y) to the level of over 8 mt. ` Stable liquidity situation `
Slide 21: 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 21
Slide 22: Agenda: Supporting slides
Agenda ` Supporting slides 22
Slide 23: Improvement of operating result mainly due to crude oil price increase
PKN ORLEN Improvement of operating result mainly due to crude oil price increase PLN m PLN + 875 m 1.400 393 1.339 1.200 1.000 474 31 -23 800 600 464 400 200 0 EBIT 1Q’10 Inventory valuation Macro Volumes Other EBIT 1Q’11 ` Positive impact of inventory valuation (y/y) due to growing crude oil prices
Slide 24: Refining segment: Product slate improvement at non-full capacity utilization
Refining segment Product slate improvement at non-full capacity utilization PLN m 1.200 PLN + 602 m 358 1.028 1.000 468 800 600 -208 -16 426 400 200 0 EBIT 1Q’10 Inventory valuation Macro Volumes Other EBIT 1Q’11 ` Positive impact of inventories valuation due to growing prices of crude oil limited b
Slide 25: Retail segment: Market pressure on fuel margins
Retail segment Market pressure on fuel margins PLN m PLN - 49 m 80 75 70 20 60 -2 50 40 -30 30 26 20 -37 10 0 EBIT 1Q’10 Fuel margins Volumes Non-fuel sales Other EBIT 1Q’11 ` Lower retail margins in Poland and the Czech Republic partially offset by the growth of sales volume by 4% (y/y) achieved on
Slide 26: Petrochemical segment: Improvement of petrochemical margins
Petrochemical segment Improvement of petrochemical margins PLN m PLN + 280 m 400 62 385 350 27 185 300 250 200 150 105 6 100 50 0 EBIT 1Q’10 Inventory valuation Macro Volumes Other EBIT 1Q’11 ` Growing margins showing market recovery in petrochemical segment. ` Increase in sales volumes by 1% (y/y)
Slide 27: Main P&L elements breakdown by key companies in 1Q 2011
Main P&L elements breakdown by key companies in 1Q 2011 Others & ORLEN ORLEN PKN ORLEN 3) ORLEN IFRS, PLN m Unipetrol consolidation Group Group (unconsolidated) Lietuva3) 1Q11 1Q10 excludings Revenues 16 756 3 738 5 077 -2 897 22 674 17 442 EBITDA 1 153 222 202 316 1 893 1 065 Depreciation & 213 135
Slide 28: Operating results breakdown by key segments and companies in 1Q 2011
Operating results breakdown by key segments and companies in 1Q 2011 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group (unconsolidated) Lietuva excludings 1Q11 1Q10 EBIT 940 87 100 212 1 339 464 EBIT acc. to LIFO 363 -8 -104 199 450 49 1) Refinery 845 8 135 4
Slide 29: ORLEN Lietuva Group Key elements of the profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account1 change change 1Q10 4Q10 1Q11 IFRS, USD m 3M10 3M11 y/y y/y 1 073 1 743 1 754 63% Revenues 1 073 1 754 63% 8 38 73 813% EBITDA 8 73 813% -14 15 53 - EBIT -14 53 - -23 -29 -18 22% EBIT acc. to LIFO -23 -18 22% -28 1 52 - Net result -28 5
Slide 30: UNIPETROL Group Key elements of the profit and loss account
UNIPETROL Group Key elements of the profit and loss account1 change change 1Q10 4Q10 1Q11 IFRS, CZK m 3M10 3M11 y/y y/y 18 039 22 014 23 088 28% Revenues 18 039 23 088 28% 1 352 983 1 379 2% EBITDA 1 352 1 379 2% 517 122 571 10% EBIT 517 571 10% -15 -499 -10 33% EBIT acc. to LIFO -15 -10 33% 309 -68
Slide 31: Key production data
Key production data change change Key production data 1Q10 4Q10 1Q11 (y/y) (q/q) Refinery in Poland 1 Processed crude (tt) 3 495 3 788 3 301 -6% -13% Utilisation 93% 100% 87% -6 pp -13 pp Fuel yield 4 73% 80% 79% 6 pp -1 pp M iddle distillates yield 5 41% 45% 43% 2 pp -2 pp Light distillates yield 6
Slide 32: Macro environment in 2Q 2011
Macro environment in 2Q 2011 Crude oil price increase 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 + 18 USD/bbl 123 6,5 - 0,4 USD/bbl 105 87 1,8 4,8 78 77 4,0 4,4 4,0 1,5 0,9 2,9 4,7 3,9 3,1 3,3 1,
Slide 33: Macro environment forecasts for 2011
Macro environment forecasts for 2011 8 PKN ORLEN Group model refining margin 2010 av erage 2011 2011 av erage 2010 6 3.8 USD/bbl 4 2 1.2 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
Slide 34: Refinancing for PKN ORLEN secured
Refinancing for PKN ORLEN secured The biggest debt refinancing agreement on the Polish market ` Credit agreement with syndicate of 14 banks for refinancing four credit lines that fall due in 2011 - 2012: `EUR 1 bn, given by syndicate of eleven banks in December 2005, `EUR 800 m, given by syndicate o
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 Department
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