ORLEN Spolka Akcyjna · GPW:PKN
ORLEN Spolka Akcyjna — PKN Orlen — Q4 2011 Earnings Presentation
40 slides from ORLEN Spolka Akcyjna's earnings presentation, Feb 9, 2012
Slide 1: Strategy realisation in face of market challenges
Strategy realisation in face of market challenges PKN ORLEN consolidated financial results for 4 quarter 2011 Jacek Krawiec, CEO Sławomir Jędrzejczyk, CFO 9 February 2012 1
Slide 2: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 2
Slide 3: PKN ORLEN achievements in 2011 - financial parameters
PKN ORLEN achievements in 2011 Financial parameters Tough macro environment: increase in crude oil price by 40% (y/y) to 111 USD/bbl. strong depreciation of PLN against USD and EUR. decrease in model refining margin and URAL/Brent differential in total by (-) 1,4 USD/bbl (y/y) to 3,8 USD/bbl. increa
Slide 4: PKN ORLEN achievements in 2011 - operational parameters
PKN ORLEN achievements in 2011 Operational parameters 27,8 mt crude oil throughput i.e. (-) 1% (y/y) due to carried out maintenance shutdowns of key installations. Increase in throughput capacity in Plock refinery from 15,1 mt/y to 16,3 mt/y as a result of launching Europe’s most advanced petrochemi
Slide 5: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 5
Slide 6: Unfavourable macro environment in 4Q 2011 (y/y)
Unfavourable macro environment in 4Q 2011 (y/y) Crude oil price increase by 26% Decrease in total of refining margin and U/B diff by 35% Average Brent Crude Oil price, USD/bbl Model refining margin and Ural/Brent differential, USD/bbl differential margin + 22 USD/bbl - 1,7 USD/bbl 117 113 109 105 4,
Slide 7: Lower GDP growth and high prices influence fuel consumption
Lower GDP growth and high prices influence fuel consumption GDP increase1 Fuel consumption (diesel, gasoline) Change (%) to respective quarter of last year mt 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 4Q112 4Q10 4Q112 + 5% 4,7 4,5 4,3 4,2 4,1-4,3 - 1% 3,08 3,23 Poland 1,01 1,00 + 1% 4,6 + 3% 3,8 8,37 8,49 2,9 2
Slide 8: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 8
Slide 9: Over PLN 100 bn of revenues in 2011
Over PLN 100 bn of revenues in 2011 4Q10 3Q11 4Q11 PLN m 12M10 12M11 Increase of revenues in 2011 by 28% (y/y): sales growth, crude oil price + 31% + 28% increase and weakening of PLN against 28 682 29 976 106 973 foreign currencies. 22 931 Revenues 83 547 Decrease of EBIT acc. to LIFO in 2011 by PL
Slide 10: Over PLN 900 m of operating profit according to LIFO in 2011
Over PLN 900 m of operating profit according to LIFO in 2011 4Q10 3Q11 4Q11 change y/y PLN m 12M10 12M11 change y/y 1 343 1 392 763 -43% EBITDA 5 546 5 634 2% 747 778 128 -83% EBIT, of which: 3 123 3 254 4% 248 216 -531 - EBIT acc. to LIFO 1 715 905 -47% 610 335 346 -43% Refining 2 481 2 219 -11% 14
Slide 11: Record high annual sales volumes of over 35 mt
Record high annual sales volumes of over 35 mt of products and goods 4Q10 3Q11 4Q11 kt 12M10 12M11 Total sales volumes in 4q11 increased + 3% by 3% (y/y) to 9,2 mt. + 4% 8 888 9 626 9 153 34 177 35 446 Refining sales increase by 1% (y/y) Sales volumes achieved in Polish market and lower sales in Cze
Slide 12: Crude oil throughput decrease by 5% (y/y) as a result of shutdowns
Crude oil throughput decrease by (-) 5% (y/y) as a result of shutdowns in Unipetrol and limited production in ORLEN Lietuva due to economic reasons Crude oil throughput Utilisation ratio mt % 100 100 97 - 5% 94 100 7,5 7,4 7,2 96 90 6,4 6,8 90 87 87 90 85 85 79 80 83 74 69 70 4Q10 1Q11 2Q11 3Q11 4Q1
Slide 13: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 13
Slide 14: Safe level of debt and financial ratios
Safe level of debt and financial ratios Good financial standing Net debt and financial gearing % Financial in PLN bn, % gearing Stable level of debt and gearing 30,9%. - 0,2 bn Covenant net debt / (EBITDA + dividend from Polkomtel) 8,5 9,3 7,8 7,9 7,6 1,29. PLN 3,7 bn inflow from sales of Polkomtel
Slide 15: Over PLN 5,5 bn of cash flow from operations
Over PLN 5,5 bn of cash flow from operations change change 4Q10 3Q11 4Q11 PLN m 12M10 12M11 y/y y/y Cash flow from operations 1 389 734 1 320 -69 5 235 5 571 336 before working capital change -663 346 -1 701 -1 038 Working capital change without initiatives -3 425 -2 507 918 2 100 -600 -300 -2 400 C
Slide 16: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 16
Slide 17: Energy: new projects and improvement of efficiency of assets held
ENERGY New projects and improvement of efficiency of assets held NEW PROJECTS 1. Building of gas power plant to 500 MWe in Włocławek Advanced preparation of investment: we have the environmental decision, agreement for connection to the energy network and the permission to build energy block. Agreem
Slide 18: Upstream: Shale gas – realization of exploratory projects
UPSTREAM Shale gas – realization of exploratory projects PKN ORLEN has 8 licenses for shale gas Status of projects exploration in Poland Lublin Shale project: A minimum of 2 exploratory drills are planned in 2012 Wierzbica Finishing of vertical drill in December 2011. Start-up of horizontal drills f
Slide 19: Upstream: Conventional projects – crude oil and gas
UPSTREAM Conventional projects – crude oil and gas 1. Latvian shelf Off-shore project on Latvian shelf is realized together with Kuwait Energy Company. 2 exploration and upstream licenses. A minimum of 1 drill is planned in 2012. Status of project: Analysis of newly acquired 3D seismic data and choi
Slide 20: Agenda
Agenda Achievements in 2011 Macroeconomic environment Financial and operating results in 4Q 2011 Liquidity Energy and upstream Summary of 2011 20
Slide 21: Summary of 2011
Summary of 2011 Results under the pressure of tough macro environment Over PLN 900 m of operating profit according to LIFO Positive influence of non-cash effect of inventories valuation of PLN 2,3 bn and profit from Polkomtel sale PLN 2,3 bn. Over PLN 100 bn of sales revenues. Over 35 m tones of sal
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: PKN ORLEN: Negative impact of revaluation of assets
PKN ORLEN Negative impact of revaluation of assets PLN m 1.000 PLN -619 m 160 900 228 800 747 700 600 -321 500 400 300 200 128 100 -686 0 EBIT 4Q2010 Inventories Macro Volumes Others EBIT 4Q2011 valuation Positive impact of inventories valuation (y/y) as a result of growing crude oil prices in PLN.
Slide 25: Refining segment
Refining segment Unfavorable influence of tough market environment and legislation changes PLN m PLN - 264 m 800 172 700 610 600 500 -226 -81 400 346 300 -129 200 100 0 EBIT 4Q2010 Inventories Macro Volumes Others EBIT 4Q2011 valuation Positive impact of crude oil prices changes on inventories valua
Slide 26: Retail segment
Retail segment Pressure on fuel margins due to high prices of fuels PLN m 250 PLN -184 m 224 200 150 6 47 100 -144 50 40 -93 0 EBIT 4q2010 Fuel margins Volumes Non-fuel sales Others EBIT 4q2011 High prices of fuels maintained which limited the level of retail margins were partially offset by higher
Slide 27: Petrochemical segment
Petrochemical segment PTA as a lever of growth for increase of petrochemical segment result PLN m PLN - 319 m 300 262 200 117 100 -12 0 -95 -100 -200 -474 -202 -300 EBIT 4q2010 Inventories Macro Volumes Others EBIT 4q2011 valuation Lower petrochemical margins partially offset by high quotations of p
Slide 28: Main P&L elements breakdown by key companies in 4Q2011
Main P&L elements breakdown by key companies in 4Q2011 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group Change (unconsolidated) Lietuva excludings 3Q11 3Q10 Revenues 21 944 4 257 6 872 -3 097 29 976 22 931 31% EBITDA 1 131 -218 -83 -67 763 1 343 -43% Depreci
Slide 29: Operating results breakdown by key segments and companies in 4Q2011
Operating results breakdown by key segments and companies in 4Q2011 Others & ORLEN ORLEN PKN ORLEN 4) ORLEN IFRS, PLN m Unipetrol 4) consolidation Group Group Change (unconsolidated) Lietuva excludings 4Q11 4Q10 EBIT 858 -355 -192 -183 128 747 -83% EBIT acc. to LIFO 209 -394 -166 -180 -531 248 - 1)
Slide 30: ORLEN Lietuva Group key elements of the profit and loss account
ORLEN Lietuva Group Key elements of the profit and loss account 1 change change 4Q10 3Q11 4Q11 IFRS, USD m 12M10 12M11 y/y y/y 1 743 2 218 2 096 20% Revenues 5 786 8 170 41% 39 -7 8 -79% EBITDA 104 110 6% 15 -24 -14 - EBIT 11 31 178% -24 -6 -6 75% EBIT acc. to LIFO -40 -1 98% 1 -38 -24 - Net result
Slide 31: UNIPETROL Group key elements of the profit and loss account
UNIPETROL Group Key elements of the profit and loss account 1 change change 4Q10 3Q11 4Q11 IFRS, CZK m 12M10 12M11 y/y y/y 22 014 24 065 24 327 11% Revenues 85 967 97 428 13% 983 505 -1 778 - EBITDA 5 174 1 118 -78% 122 -230 -2 554 - EBIT 1 678 -1 989 - -499 -228 -2 778 -457% EBIT acc. to LIFO 670 -
Slide 32: Key production data
Key production data change change change Key production data 4Q10 3Q11 4Q11 (y/y) (q/q) 12M10 12M11 (y/y) 1 Refinery in Poland Processed crude (tt) 3 788 3 953 3 814 1% -4% 14 452 14 547 1% Utilisation 100% 97% 94% -6 pp -3 pp 96% 89% -7 pp 4 Fuel yield 80% 75% 76% -4 pp 1 pp 78% 76% -2 pp 5 Middle
Slide 33: Macro environment – comparison 2011 vs 2010
Macro environment – comparison 2011 vs 2010 8 2010 av erage 2011 2011 av erage 2010 PKN ORLEN Group model refining margin 6 4 3.8 USD/bbl 2.1 USD/bbl 2 0 -2 January February March April May June July August September October November December 5 2010 av erage 2011 2011 av erage 2010 Ural/Brent differ
Slide 34: Macro environment in 1Q 2012
Macro environment in 1Q 2012 Crude oil price increase Increase 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 + 2 USD/bbl differential margin + 2,5 USD/bbl 117 113 109 111 105 5,6 4,4 4,3 0,9 3,4 3,1 2,9 2,9
Slide 35: Macro environment in 2012
Macro environment in 2012 10 PKN ORLEN Group model refining margin 2011 av erage 2012 2012 av erage 2011 8 6 4.7 USD/bbl 4 2.1 USD/bbl 2 0 -2 January February March April May June July August September October November December 5 Ural/Brent differential 2011 av erage 2012 2012 av erage 2011 4 3 2 1.
Slide 36: Maintenance shutdowns of key installations in 2011
Maintenance shutdowns of key installations in 2011 1Q 11 2Q 11 3Q 11 4Q 11 HDS V CDU III Hydrogen Unit Hydrocracker H-Oil FCC Refinery Litvinov - refinery Litvinov - petrochemical Kralupy - HDS Paramo - refinery HDS – Diesel Hydrodesulphurization Unit CDU – Crude Distillation Unit H-Oil – Hydrodesul
Slide 37: Maintenance shutdowns schedule of key installations for 2012
Maintenance shutdowns schedule of key installations for 2012 Q1’12 Q2’12 Q3’12 Q4’12 CDU III HDS VI PX/PTA Olefin Unit Hydrogen Unit H-Oil Refinery Litvinov - refinery Litvinov - petrochemical Kralupy - HDS Paramo - refinery CDU – Crude Distillation Unit HDS – Diesel Hydrodesulphurization Unit PX/PT
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