PKN ORLEN Capital Group

PKN ORLEN Capital Group
January 2016
PKN ORLEN – international fuel and energy group
DOWNSTREAM
Refineries in Poland (supersite in Plock), Lithuania and the Czech
Rep. with 35.2 mt/y total max. throughput capacity
Strategic location – access to key pipeline network and crude oil sea
terminals in Gdansk (Poland) and Butinge (Lithuania)
REBCO crude oil processing – benefits from B/U differential
Petrochemical assets fully integrated with the refining
Energy projects of industry cogeneration – building CCGT in
Wloclawek (463 MWe) and Plock (596 MWe)
RETAIL
2 679 fuel stations - Poland, the Czech Rep., Germany and Lithuania
UPSTREAM
Poland – exploration and E&P projects
Canada – production projects (ORLEN Upstream Canada)
SHAREHOLDERS STRUCTURE
KEY DATA
State Treasury
27,52%
Listed on WSE since 1999
OPERATIONALS
Throughput in 2015 (mt)
Sales in 2015 (mt)
ca. 30.9
ca. 38.7
FINANCIALS
Revenues (PLN bn)
2012
120.1
2013
113.9
2014
106.8
2015
88.3
5.2
3.2
5.2
8.7
WSE ticker: PKN
72,48%
Present in WIG20 index
MCap: ca. PLN 29.0 bn*
EBITDA LIFO** (PLN bn)
Free float
* Data as of 31.12.2015
** EBITDA LIFO before impairments of assets:
2012 PLN (-) 0.7 bn; 2014 PLN (-) 5.4 bn; 2015 PLN (-) 1.0 bn
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2
PKN ORLEN vision
Strong position on large and growing markets
Strong customer focus
Retail
Integrated value chain
Operational excellence
Sustainable Upstream development
Modern management culture
Downstream
Downstream
Upstream
2008
… 2013…
… 2017…
3
Downstream
Refining
HIGH-CLASS ASSETS
COMPETITIVE ADVANTAGES
Refinery in Plock classified as a super-site (acc. to
WoodMackenzie) considering the depth and throughput
capacity, integration with petrochemical operations
Modernized refining assets in Lithuania and in Litvinov
Prepared for regulatory and market trends changes thanks
to investment projects execution
Leader on the fuel market in the Central Europe**
KEY DATA
35.2 mt/y max. throughput capacity including: 16.3 mt/y
Plock, 10.2 mt/y ORLEN Lietuva, 8.7 mt/y Unipetrol
THROUGHPUT AND UTILIZATION RATIO
mt; %
Utilization ratio
90%
91%
27,9
28,2
27,3
2012
2013
2014
86% of yearly crude oil throughput is REBCO type, which
allows to get benefits from B/U differential
Fuel production in line with 2009 Euro standards in all
refineries
84%
90%
30,9
Wholesale market share*: gasoline (PL: 67%, CZ: 59%, LT:
67%) & diesel (PL: 57%, CZ: 47%, LT: 83%).
* Data as of 31.12.2015
** Poland, Lithuania, the Czech Republic
2015
4
Downstream
Petrochemicals
ASSETS INTEGRATED WITH THE REFINING
COMPETITIVE ADVANTAGES
The largest petrochemical company in Central Europe*
Integration with refinery allows for savings
Attractive portfolio of products including: monomers,
polymers, aromatics, PTA, fertilizers and PVC
Strategic regional supplier for chemical industry
KEY DATA
ANWIL – CHEMICAL COMPANY
Sales in 2015 amounted to 5.3 mt
PVC and fertilizers producer
Market share between 40% and 100% depending on the
product
Ethylene pipeline connection with Plock refinery secures
feedstock for PVC production
Polyolefins’ sales through Basell network
Synergies with new CCGT plant: steam, electricity and
infrastructure
PX/PTA – one of the most advanced petrochemical complex in
Europe with PTA production capacity of 650 kt/y
* Poland, Lithuania, the Czech Republic
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Downstream
Energy
ASSETS EFFICIENCY IMPROVEMENT
COMPETITIVE ADVANTAGES
Power plant in Plock (345 MWe, 2149 MWt) – the biggest
industrial block in Poland.
Heating oil, refining gas and natural gas - fuels used for
energy and heat production in Plock and Wloclawek plants.
PKN ORLEN the biggest gas consumer in Poland and
active participant for natural gas market liberalization.
Favorable perspectives for energy market i.e. increase of
electricity demand not addressed by new projects, increasing
supply-demand gap resulting from closures of old units and
low-emission of gas.
INDUSTRY COGENERATION PROJECTS
The highest profitability / the lowest risk , thanks to guarantee
of permanent receiving of steam, which enables to achieve
very high efficiency
PLANS FOR BLOCKS CLOSURES IN POLAND
# block as a % of total, 2012-2040*
78%
80
Building a CCGT plant in Wloclawek (463MWe)
43%
Planned start-up 2Q16
CAPEX PLN 1,4 bn
Building a CCGT plant in Plock (596 MWe)
24%
25
29%
44
30
Planned start-up 4Q17
CAPEX PLN 1,65 bn
2017
* PKN ORLEN analysis
2025
2030
2040
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Retail
MODERN SALES NETWORK
COMPETITIVE ADVANTAGES
The largest retail network in Central Europe
ORLEN brand – strong, recognizable and the most valuable in
Poland (PLN 4,5 bn)
Successful differentiation strategy of fuel stations brands
and offered fuels.
Further development of nonfuel sales by extension of Stop Cafe
and Stop Cafe Bistro
KEY DATA
STOP CAFE & STOP CAFE BISTRO IN POLAND
#
2679 fuel stations* including: 1749 Poland, 565 Germany, 339
the Czech Rep. , 26 Lithuania
Market share*: 37% Poland, 16% in the Czech Rep ., 6%
Germany, 4% Lithuania
1404 Stop Cafe and Stop Cafe Bistro in Poland.
Every 0.8 second we sell 1 hot-dog (38 m yearly) and over 8 m
liters of hot drinks yearly (3.5 Olympic swimming pools)
Large group of loyal customers: 0.7 m active FLOTA customers
and 2.7 m active VITAY customers
1 500
1 400
1 300
1 200
1 100
1 000
900
800
700
600
1 404
1 250
1 308
1 149
1 047
813
869
708
2Q12
* Data as of 31.12.2015
** According to „The most valuable brands” ranking published by „Rzeczpospolita” dated 30 November 2015
4Q12
2Q13
4Q13
2Q14
4Q14
2Q15
4Q15
7
Upstream
Exploration projects in Poland
Poland
Total reserves of crude oil and gas (2P)
Ca. 8 m boe (100% gas)
Currently 15 wells were done
11 vertical and 4 horizontal as well as 3 fracking of horizontal wells
2015:
1 wells was done
Project and analytics works were continued and acquisition/processing
of seismic 2D and 3D data were started. Preparation works of areas
development and administration works connected with adoption of
concessions were in process.
Closing of 100% FX Energy acquisition, which increase portfolio of
conducted projects in Poland by 3 new E&P areas. Production in
December from acquired assets amounted to 1,3 th. boe/d. Assets
consolidated from 31 December 2015.
EBITDA*: PLN (-) 30 m
CAPEX: PLN 96 m
Exploration assets
With cooperation: Warsaw South (51% of shares), Bieszczady (49% of shares)
ORLEN Upstream 100% of shares : Karbon, Lublin Shale,
Mid-Poland Unconventional, Karpaty, Miocen, Edge
Requested areas
Exploration and production assets
With cooperation: Sieraków (49% of shares), Płotki** (49% of shares)
ORLEN Upstream 100% of shares: Edge
* Data before impairments of assets in the amount of PLN (-) 429 m
** Production from Płotki project (100% gas)
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Upstream
Production projects in Canada
Canada
Assets located in Canadian Alberta province in 5 areas: Lochend, Kaybob, Pouce
Coupe, Ferrier/Strachan and Kakwa
Total reserves of crude oil and gas (2P)
Ca. 89** m boe (46% liquid hydrocarbons, 54% gas)
2015:
Drilling of 13 new wells (11,6 net*) were started
Closing acquisition of Kicking Horse Energy Ltd., thanks to which 2P reserves
in Canada increased by ca. 40 m boe. Production in December from acquired
assets (Kakwa area) amounted to 4,6 th. boe/d. Assets consolidated from 31
December 2015.
Average production: 7,1 th. boe/d (44% liquid hydrocarbons)
EBITDA***: PLN 74 m
CAPEX: PLN 195 m
Assets in Canada
* Number of wells multiplied by percent of share in particular asset
** Including acquisition of Kicking Horse Energy Ltd.
*** Data before impairment of assets in the amount of PLN (-) 423 m
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PKN ORLEN competitive advantages
Value creation
Integrated, high-class assets and strong position on competitive
market
New units and attractive portfolio of products offered on developing
markets
Best locations and synergies of gas-fired power generation with other
segments
Modern and the largest sales network in the region with strong and
recognizable brand
Poland – exploration and E&P projects
Canada – production projects (ORLEN Upstream Canada)
Financial strength
Guaranteed sources of financing – over PLN 18 bn
Diversified financing – over PLN 4 bn in retail bonds, corporate bonds
and Eurobonds
Average maturity 4Q19
Investment grade – BBB - with a stable outlook
Financial gearing – below 30%
Net debt / EBITDA LIFO – less than 1
Dividend – steady increase of DPS
People
The World’s Most Ethical Company 2015
Top Employer Polska 2015
Best managed companies in CEE 2015
ORLEN Warsaw Marathon / Verva Street Racing
ORLEN
The most valuable brand in Poland
worth PLN 4,5 bn*
* According to „The most valuable brands” ranking published by „Rzeczpospolita” dated 30 November 2015
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Thank You for Your attention
For more information on PKN ORLEN, please contact Investor Relations Department:
phone: + 48 24 256 81 80
fax:
+ 48 24 367 77 11
e-mail: ir@orlen.pl
www.orlen.pl
Agenda
Supporting slides
12
Key highlights 2015
Value creation
Financial strength
EBITDA LIFO: PLN 8,7 bn*
Financial gearing: 28,1%
Record-high throughput 30,9 mt and sales 38,7 mt
Cash flow from operations: PLN 5,4 bn
M&A of upstream assets in Canada and Poland
Dividend paid: PLN 0,7 bn / PLN 1,65 per share
New contracts for crude oil delivery up to 10,8 mt per year
Extension of average maturity for sources of financing to 4Q19
People
The World’s Most Ethical Company 2015
Top Employer Polska 2015
Best managed companies in CEE 2015
ORLEN Warsaw Marathon / Verva Street Racing
ORLEN
The most valuable brand in Poland
worth PLN 4,5 bn **
* Data before impairments of assets in the amount of PLN (-) 1,0 bn regarding mainly E&P assets of ORLEN Upstream and petrochemical assets of Unipetrol
** According to „The most valuable brands” ranking published by „Rzeczpospolita” dated 30 November 2015
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Dividend
Our aim is to pay dividend regularly
We paid dividend in years 2013-2015
DPS (PLN)
We plan to increase DPS gradually at maintained safe
level of financial ratios
1,65
1,50
2013
1,44
2014
2015
PKN ORLEN Management Board recommendation
regarding dividend payout in 2016 from unconsolidated
net profit of PKN ORLEN SA from 2015 will be presented
in FY 2015 Financial Statement that will be published 24
March 2016
Unconsolidated net profit of PKN ORLEN SA from 2015
amounted to PLN 1048 m
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ORLEN Lietuva - maximizing the possessed potential
ASSETS
Ventspils
Latvia
(20,0 mt/y)
Pump station
Illukste
(16,4 mt/y)
Butinge*
(14,0 mt/y)
Joniskis
Orlen Lietuva
Refinery
Mažeikių
Nafta
Biržai
Klaipeda
Klaipeda
Terminal
Polock
Storage depot
Crude pipeline
Products pipeline
(9,0 mt/y)
Lithuania
* ORLEN Lietuva ownership
KEY FACTS
Concentration on cash flow improvement
Reduction in overhead and employment costs below USD 10 m monthly and efficiency initiatives will improve the result by over 1
USD/bbl
CAPEX optimization to ca. USD 20 m annually
Improvement in sales efficiency and increase in capacity utilization
Releasing of cash frozen in assets
In worsening of macro situation ready to temporary refinery shut down
15
15
Unipetrol – continuation of operating efficiency improvement
ASSETS
Litvínov
5.5 mt/y
IKL
Pipeline
Kralupy
Pardubice *
3.2 mt/y
1.0 mt/y
10 mt/y
Druzhba
pipeline
KEY FACTS
9 mt/y
Mero Crude oil pipelines
CEPRO production pipelines
CEPRO depots
Speed up of Operational Excellence Initiatives in Ceska Rafinerska
Refining and retail sales enhancement upon grey zone limitation
Investing in synergies between refining and petchem segments
Regulatory affairs management in the area of renewable energy sources fee, fuels grey zone limitation and biofuel burdens
Retail segment market share increase and non-fuel sales increase driven by expected economic recovery
* Paramo refinery in Pardubice closed permanently and does not process crude oil since 3Q 2012. The production of bitumen and lubes was not affected.
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16
Supply Routes Diversification
Sea terminal (capacity)
Oil pipeline [capacity]
Projected Oil pipeline
(70) Primorsk
Yaroslavi
(18) Ventspils
Butinge
(14)
Refinery of PKN ORLEN Group
[Ca 30]
Naftoport
Rostock
(30)
Holborn
Gdansk
(3.8; 6.1) Schwedt
(10.7; 10.2) (10.5; 10.0)
Harburg
(4.7; 9.6)
Leuna
(11.0; 7.1)
[Ca 22]
Refinery (capacity m tonnes p.a.;
Nelson complexity index)
Kirishi
(30) Ust-Luga
BPS2
DRUZHBA
Mazeikiai
(10.2; 10.3)
DRUZHBA
Plock
(16.3; 9.5)
Novopolotsk
(8.3; 7.7)
Mozyr
(15.7; 4.6)
[Ca 55]
Litvinov (5.5, 7.0)
TrzebiniaJedlicze
Kralupy
Drogobich
(0,1)
Brody
(0,5)
Ingolstadt IKL [Ca 10] (3.4; 8.1)
(3.8; 3.0)
(5.2; 7.5)
Bratislava
DRUZHBA
[Ca
9]
[Ca
20]
Burghausen
(6.0; 12.3)
Bayernoil
(3.5; 7.3)
[Ca 9]
(12.8; 8.0)
[Ca 3,5] Tiszaojvaro
Schwechat
s
Duna
(10.2; 6.2)
Petrotel
Rafo
(8.1, 10.6) (2.6; 7.6)
ADRIA
(3.4; 9.8)
Petrobrazi
Triest Rijeka
Novi Sad
(3.4; 7.3)
ADRIA
(4.4; 5.7)
Arpechim
Sisak
(4.0; 4.6)
(3.6; 7.3)
(3.9; 4.1)
Pancevo
(4.8; 4.9)
Kremenchug
(17.5; 3.5)
Yuzhniy
(ex 4)
Odessa
(3.8; 3.5)
(ex 12)
Petromidia
(5.1; 7.5)
Kherson
(6.7; 3.1)
Novorossiys
k
(ex 45)
Neftochim
(5.6; 5.8)
Izmit
(11.5; 6.2)
Thessaloniki
(3.2; 5.9)
Elefsis
(4.9; 1.0)
Aspropyrgos
(6.6; 8.9)
Corinth
(4.9; 12.5)
Lisichansk
(8.5; 8.2)
Izmir
(10.0; 6.4)
Kirikkale
(5.0; 5.4)
Batman
(1.1; 1.9)
Source: Oil & Gas Journal, PKN Orlen own calculations, Concawe,Reuters, WMRC, EIA, NEFTE Compass, Transneft.ru
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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, mailing, distribution or delivery of this
Presentation to any person in some jurisdictions may be subject to certain legal restrictions, and persons who may or have received this Presentation should familiarize
themselves with any such restrictions and abide by them. Failure to observe such restrictions may be deemed an infringement of applicable laws.
This Presentation contains neither a complete nor a comprehensive financial or commercial analysis of PKN ORLEN and of the ORLEN Group, nor does it present its position
or prospects in a complete or comprehensive manner. PKN ORLEN has prepared the Presentation with due care, however certain inconsistencies or omissions might have
appeared in it. Therefore it is recommended that any person who intends to undertake any investment decision regarding any security issued by PKN ORLEN or its subsidiaries
shall only rely on information released as an official communication by PKN ORLEN in accordance with the legal and regulatory provisions that are binding for PKN ORLEN.
The Presentation, as well as the attached slides and descriptions thereof may and do contain forward-looking statements. However, such statements must not be understood as
PKN ORLEN’s assurances or projections concerning future expected results of PKN ORLEN or companies of the ORLEN Group. The Presentation is not and shall not be
understood as a forecast of future results of PKN ORLEN as well as of the ORLEN Group.
It should be also noted that forward-looking statements, including statements relating to expectations regarding the future financial results give no guarantee or assurance that
such results will be achieved. The Management Board’s expectations are based on present knowledge, awareness and/or views of PKN ORLEN’s Management Board’s
members and are dependent on a number of factors, which may cause that the actual results that will be achieved by PKN ORLEN may differ materially from those discussed in
the document. Many such factors are beyond the present knowledge, awareness and/or control of the Company, or cannot be predicted by it.
No warranties or representations can be made as to the comprehensiveness or reliability of the information contained in this Presentation. Neither PKN ORLEN nor its directors,
managers, advisers or representatives of such persons shall bear any liability that might arise in connection with any use of this Presentation. Furthermore, no information
contained herein constitutes an obligation or representation of PKN ORLEN, its managers or directors, its Shareholders, subsidiary undertakings, advisers or representatives of
such persons.
This Presentation was prepared for information purposes only and is neither a purchase or sale offer, nor a solicitation of an offer to purchase or sell any securities or financial
instruments or an invitation to participate in any commercial venture. This Presentation is neither an offer nor an invitation to purchase or subscribe for any securities in any
jurisdiction and no statements contained herein may serve as a basis for any agreement, commitment or investment decision, or may be relied upon in connection with any
agreement, commitment or investment decision.
18
For more information on PKN ORLEN, please contact Investor Relations Department:
phone: + 48 24 256 81 80
fax:
+ 48 24 367 77 11
e-mail: ir@orlen.pl
www.orlen.pl