PKN ORLEN Capital Group

PKN ORLEN Capital Group
February 2015
Integrated oil&gas company with energy assets
DOWNSTREAM
Refineries in Poland (supersite in Plock), Lithuania and the Czech Rep.
Strategic location on key pipeline network and access to crude oil sea
terminals in Gdansk (Poland) and Butinge (Lithuania)
REBCO crude oil processing - benefiting from B/U diff
Petrochemical assets fully integrated with the refining
Building industry cogeneration (CCGT) 463 MWe in Wloclawek and
596 MWe in Plock
RETAIL
2 700 filling stations: Poland, the Czech Rep., Germany and Lithuania
UPSTREAM
Poland: exploration shale gas projects as well as conventional projects
Canada: TriOil – production assets
SHAREHOLDERS
STRUCTURE
State Treasury
27,52%
KEY DATA
Listed since 1999
WSE ticker: PKN
OPERATIONAL (mt/y):
Max. throughput capacity
Downstream sales
ca. 32.4
ca. 27.7
FINANCIAL (PLN bn):
2010
2011
2012
2013
2014
83.5
107.0
120.1
113.9
106.8
5.2*
3.2
5.2*
Mcap: ca. PLN 23 bn**
WSE indices included:
72,48%
WIG, WIG 20, WIG 30,
WIG fuels
Revenues
EBITDA LIFO
4.1
3.9*
Free float
** 30.01.2015
* EBITDA LIFO before impairments. Impairments amounted to:
2011 PLN (-) 1,8 bn; 2012 PLN (-) 0,7 bn; 2014 PLN (-) 5,4 bn
2
2
PKN ORLEN vision
Strong position on large and growing
markets
Retail
Strong customer focus
Integrated value chain
Downstream
Downstream
Operational excellence
Sustainable Upstream development
Upstream
Modern management culture
2008
… 2013…
… 2017…
3
Downstream (refining)
HIGH-CLASS ASSETS
COMPETITIVE ADVANTAGES
Refinery in Plock classified as a super-site (acc. to
WoodMackenzie) considering the volume and depth of
processing, 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
THROUGHPUT AND UTILISATION RATIO
mt; %
Utilisation ratio %
32.4 mt/y - max. throughput capacity: Plock – 16.3 mt/y,
ORLEN Lietuva – 10.2 mt/y, Unipetrol – 5.9 mt/y
Ca. 90% of crude oil throughput is REBCO type which allows
us to benefit from B/U differential
Fuel production in line with 2009 Euro standards in all
refineries
88
89
90
91
28,1
27,8
27,9
28,2
27,3
2010
2011
2012
2013
2014
84
Market share*: gasoline (PL: 65%, CZ: 39%, LT: 96%) &
diesel (PL: 59%, CZ: 36%, LT: 96%).
* Data as of 31.12.2014
** Poland, Lithuania, the Czech Republic
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Downstream (petrochemicals)
INTEGRATED ASSETS
COMPETITIVE ADVANTAGES
The largest petrochemical company in Central Europe*
Integration with refinery allows for savings.
Attractive portfolio of products including PTA, polyolefins,
butadiene
Strategic regional supplier for chemical industry
KEY DATA
ANWIL – CHEMICAL COMPANY
Petrochemical sales volumes: 5.4 mt/y
Depending on the product we have 40% up to 100% market
share in domestic consumption
Polyolefins sales within Basell network
PVC and fertilizers producer
PX/PTA - one of the most advanced petrochemical complex in
Europe with production capacity of 600 kt/y PTA
Ethylene pipeline connection with Plock refinery secures
feedstock for PVC production
Synergies with new CCGT plant: heat energy, electricity and
infrastructure
* Poland, Lithuania, the Czech Republic
5
Downstream (energy)
ASSETS EFFICIENCY IMPROVEMENT
COMPETITIVE ADVANTAGES
Power plant in Plock (345 MW, 1970 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 eg. 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)
Start-up of energy production in 4Q15
CAPEX PLN 1,4 bn
43%
24%
25
29%
44
30
Building a CCGT plant in Plock (596 MWe)
Start-up of energy production in 4Q17
2017
2025
2030
2040
CAPEX PLN 1,65 bn
* PKN ORLEN analysis
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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 4,4 bn)
Successful strategy of differentation for filling site 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
#
Over 2 700 filling stations*: Poland - 1768, Germany - 559, the
Czech Rep. - 339, Lithuania - 26
Market share*: PL: 37%, CZ: 15%, LT: 4%, DE: 6%
1250 Stop Cafe and Stop Cafe Bistro in Poland.
Every second we sell 1 hot-dog (35m hot-dogs per annum) and
over 5m litters of hot drinks yearly (2,5 Olympic swimming
pools)
The largest group of loyal customers in Poland: 2,5 m of active
customers VITAY and FLOTA programs
* Data as of 31.12.2014
1 300
1 200
1 100
1 000
900
800
700
600
500
1 250
1 047
813
626
653
4Q10
4Q11
4Q12
4Q13
4Q14
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Upstream
Exploration projects in Poland
Poland
Unconventional projects
Conventional projects
Unconventional projects
Currently 11 wells finished: : 7 vertical, 4 horizontal and 3 fracking of
horizontal wells, including 3 wells and 1 fracking in 2014
In 2015 4 wells, 1 fracking and acquisition of seismic data in a base
plan
2
Lublin Shale (11 wells)
In 4Q14 horizontal well was made (Wierzbica) and vertical well was
started (Wołomin). Processing and interpretation of 2D seismic data
were finished (Wołomin)
1
1
1
1
WodynieŁuków
1
Mid-Poland Unconventionals and Hrubieszów Shale (0 wells)
In 4Q14 works on update of geological model and assessment of
concession areas prospects were finished - realization of further
works on Hrubieszów concession was withdrawn
1
2
Garwolin
1
1
3
Wierzbica
2
Lubartów
Conventional projects
Currently 3 wells finished, including 1 well in 2014
In 2015 1 well in a base plan
Project Sieraków (2 wells)
fracking
horizontal well
vertical well
In 4Q14 continuation of analysis of data to verify area prospects and
update works schedule
Project Karbon (1 well)
Finishing of processing and interpretation of new 2D seismic data
(Lublin) in 4Q14
* Data without impairment of the value of expenditures in the amount of PLN (-) 3 m
** Data without impairment of the value of expenditures in the amount of PLN (-) 11 m
EBITDA 4Q14*: PLN (-) 10 m
EBITDA 12M14**: PLN (-) 33 m
CAPEX 4Q14: PLN 19 m
CAPEX 12M14: PLN 144 m
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Upstream
Production projects in Canada
Canada
TriOil - upstream company
Assets
Assets in Canadian Alberta province is located on four areas: Lochend,
Kaybob, Pouce Coupe and Ferrier/Strachan
Total reserves: ca. 49,5 m boe of crude oil and gas (2P)
2014:
Drilling of 36 new wells (21,7 net*)
Average production amounted to ca. 5,8 th boe/d (ca. 50% liquid
hydrocarbons, 50% gas)
2015:
Planned average production of 8,9 th boe/d and capex ca. PLN 0,4 bn
in a base plan
Update of the plan for 2015 taking into account current situation on a
crude oil market is in process.
4Q14
In 4Q14 drilling of 9 new wells (6 net*), 14 fracking (6,2 net*) were done
and 18 wells to production (8,8 net*) were included
Average production amounted to ca. 8 th boe/d (51% liquid
hydrocarbons)
Production at the end of 4Q14 amounted to 8,4 th boe/d
At the end of 4Q14 total production from 133,2 wells net*
EBITDA 4Q14**: PLN 52 m
EBITDA 12M14**: PLN 185 m
CAPEX 4Q14: PLN 121 m
CAPEX 12M14***: PLN 355 m
* Number of wells multiplied by share percentage in particular asset
** Data without impairment of the value of expenditures in the amount of PLN (-) 311 m
*** Data does not include Birchill Exploration LP acquisition in the amount of PLN 708 m in 2Q14
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PKN ORLEN competitive advantages
Integrated, high-class assets and strong position on competitive market
Downstream
New units and attractive portfolio of products offered on developing markets
Best locations and synergies of gas-fired power generation with other segments
Retail
Upstream
Modern and the largest sales network in the region with strong and
recognizable brand
Upstream in Canada and perspective shale gas licenses in Poland
Further PKN ORLEN growth
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Mission and Corporate Values
„We discover and process natural resources to fuel the
future”
RESP
ONSIBILITY
We respect our customers, shareholders, the natural environment and local communities
P
ROGRESS
We explore new possibilities
L
PEOP E
We are characterized by our know-how, teamwork and integrity
ENERGY
We are enthusiastic about what we do
DEPE
NDABILITY
You can rely on us
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Thank You for Your attention
www.orlen.pl
For more information on PKN ORLEN, please contact Investor Relations Department:
phone:
fax:
e-mail:
+ 48 24 256 81 80
+ 48 24 367 77 11
ir@orlen.pl
12 12
Agenda
Supporting slides
13
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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ORLEN Lietuva - maximizing the possessed potential
ASSETS
Sea terminal
Ventspils
Latvia
(20,0 mt/y)
Pump station
Illukste
Sea terminal
Butinge
(14,0 mt/y)
(16,4 mt/y)
Joniskis
Orlen Lietuva
Refinery
Mažeikių
Nafta
Biržai
Klaipeda
Klaipeda
Terminal
Polock
Storage depot
Crude pipeline
Products pipeline
(9,0 mt/y)
Lithuania
Rail transport
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 the level below USD 20 m annually
Improvement in sales efficiency and increase in capacity utilization, including considered crude oil throughput service
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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Dividend
Our target is to pay dividend regularly
We paid:
PLN 1.50 per share (in 2013)
PLN 1.44 per share (in 2014)
We plan to increase dividend per share gradually while
maintaining safe financial ratios.
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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
understand 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 18
www.orlen.pl
For more information on PKN ORLEN, please contact Investor Relations Department:
phone:
fax:
e-mail:
+ 48 24 256 81 80
+ 48 24 367 77 11
ir@orlen.pl
19 19