ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q1 2004 Earnings Presentation
19 slides from ORLEN Spolka Akcyjna's earnings presentation, May 14, 2004
Slide 1: Q1 2004 Results
Q1 2004 Results Increase of net profit y-o-y 14 May 2004
Slide 2: Full use made of positive refinery market conditions
Full use made of positive refinery market conditions z The highest net profit in the company’s history* -> PLN 397 m z ROACE 13.7%** >> WACC 8.9% z PLN 143 m savings in Q1 04 due to cost cutting programme z Increase in wholesale volume by over 7%*** y-o-y – driven by long-term contracts with foreign
Slide 3: ROACE at relatively high level
ROACE at relatively high level* ROACE ROACE Value streams Q1 04 2006 PKN ORLEN** 10.1% 9 8% Production, Wholesale and Logistics 15.8% 9 12% Retail 5.6% 14% Corporate centre na na Strategic expansion costs na na Subsidiaries & strategic investments na na * Results according to LIFO valuation of inven
Slide 4: Operating cost reduction in PKN ORLEN Q1 plan fully realised
Operating cost reduction in PKN ORLEN Q1 04 plan fully realised ~800 Savings (sustainable) Investments and M&A (one-offs) 450-500 143* One-off spending - M&A -7 -46 - - Implementation cost -22 -18 - - Capex -1 -40 -40 -30 -104 -40 % of target 34 100 completed Q1 04 Plan – FY 04 FY 05 - achieved * Sa
Slide 5: Market environment in oil & gas sector
Market environment in oil & gas sector Favourable conditions utilised Crude oil price, Brent (USD/b) Q1 04 vs Q1 03 35 z Crude oil price increased by 1.7% 33 on average in Q1, from 31.52 USD/b USD/bbl 31 to 32.05 USD/b (y-o-y) 29 1.7% z 21.6% fall in refinery margin from 27 4.79 USD/b to 3.76 USD/b
Slide 6: Market environment – Poland: Noticeable recovery in the economy
Market environment – Poland Noticeable recovery in the economy Real GDP growth 5.6E% 6% z Visible increase of GDP proves stable 5% economic recovery. High 4% unemployment rate continues – 20.5% 3% (fall of 0.1pp y-o-y vs. increase of 2% 0.5 pp q-o-q) 1% z Increase of new car sales by 22.5%E 0% (Q1 0
Slide 7: Profit – result of restructuring reflected in net profit
Profit – result of restructuring reflected in net profit*** ⇑ z c.2% increase of revenues, IFRS basis, PLN m Q1 04 Q1 03 change excluding German operations* Revenues* 6 325 4 962 27,5% z Visible effect of cost reduction, Cost of sales* -5 112 -3 793 34,8% excluding German operations: Distribution co
Slide 8: Operating CF >> organic CAPEX
Operating CF >> organic CAPEX Proper cash flow management Operating CF Sale of assets PLN 22 m PLN 604 m ⇓ Decrease in ⇑ 135% debt PLN 181 m Purchase of * assets Dividend and PLN 11 m interest ⇓ PLN 19 m 90 80 Organic 70 60 R&M investment 50 Retail 40 Petrochemicals PLN 322 m Others 30 ⇑ 38% 20 10 0
Slide 9: Consequent quarter of satisfactory profitability in refinery segment
Consequent quarter of satisfactory profitability in refinery segment Refining and wholesale z Recovery in domestic fuel IFRS basis, PLN m Q1 04 Q1 03 change consumption Revenue 3 958 3 942 0,4% z Increase of light product sales by Total costs 3 534 3 441 2,7% 6.8%* due to long term contracts with of
Slide 10: Seasonality of retail sales visible in segment's profit
Seasonality of retail sales visible in segment’s profit Retail IFRS basis, PLN m Q1 04 Q1 03 change z Totalvolume of sales increased by Revenue 2 478 1 695 46,2% 18.2%, mainly due to consolidation of Total costs German operation 2 497 1 719 45,3% of the segment z Decrease of gasoline volumes Profit
Slide 11: High profitability: Fertilizer market recovery
High profitability Fertilizer market recovery Petrochemicals z After excluding positive effect IFRS basis, PLN m Q1 04 Q1 03 change of in kind contribution to BOP Revenue 1 270 1 257 1,0% result in Q1 03, performance was Total costs 1 068 1 047 2,0% at comparable level of PLN 98 m of the segment Pro
Slide 12: Supporting slides: Cost cutting programme
Supporting slides Cost cutting programme 12
Slide 13: Positive influence of cost cutting programme on Q1 results
Positive influence of cost cutting programme on Q1 04 results In PLN m PLN 143 m 7 32 22 59 114 52 Savings Implementation Savings on Production & Logistics M&A EBIT level in and sales achieved in costs Technology Q1 04 other segments 13
Slide 14: Supporting slides: ORLEN Deutschland
Supporting slides ORLEN Deutschland 14
Slide 15: Orlen Deutschland Q1 performance and plans for 2004
Orlen Deutschland Q1 04 performance and plans for 2004 ¾Q1 04 trends: • Fuel margin in Q1 04 was much lower compared to Q1 03 due to tough competition and the increase in oil prices since the beginning of the year • Sales volumes are traditionally negatively influenced by lower fuel consumption in w
Slide 16: ORLEN Deutschland Financial highlights Q1
ORLEN Deutschland Financial highlights Q1 04 Balance sheets - selected items (PLN m) Q1 04 Orlen Deutschland Property, plant and equipment 807 Inventories 128 Trade and other receivables 310 Cash and cach equivalents 368 Total assets 1 661 Equity 544 Provisions 60 Long term liabilities 124 Short ter
Slide 17: Supporting slides: Other data
Supporting slides Other data 17
Slide 18: Operating highlights
Operating highlights z Increase of gasoline retail sales by IFRS basis, in PLN m Q1 04 Q1 03 change 18% and diesel of 20%, mainly due to Retail sales of motor consolidation of German operation 752 632 19,0% fuels (tt)* (252 th.t. on retail level). Light product sales (tt) 2 238 1 896 18,0% z Higher
Slide 19: Balance sheet: Low gearing
Balance sheet Low gearing IFRS basis, in PLN m Q1 04 2003 change Non current assets 10 684 10 715 -0,3% z Positive impact on financing Current assets, of which 6 972 6 434 8,4% costs due to change in structuring of liabilities - Inventories 3 148 3 058 2,9% reduction of short term interest Cash and