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FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA

PKN Orlen SA · Mar 2, 2005 · 32 slides

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Slides

  1. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 1
    PSGJAN05EPK2_OVERVIEW(01).PPT Financial results: FY 2004 and financial assumptions for the 2005 plan Igor Chalupec, CEO 2 March 2005 1
  2. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 2
    Financial results 2004 The highest net profit in PKN ORLENs history Key financial data 20041 Operating data 2004 z ROACE2 19.0% z Cost cutting5 PLN 637 m z EBITDA PLN 4.0 bn z Wholesale volume sales6 + 8.0% z Net profit3 PLN 2.4 bn…
  3. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 3
    Agenda z Summary of 2004 financial results z Assumptions for 2005 financial plan z Supporting slides 3
  4. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 4
    Macroeconomic environment in 2004 Extraordinary favourable conditions in oil & gas business Refinery margin 5.6/b average in 2004 Exchange rate average in 20041 Increase of 84% 2004/2003 2) 1) 5.0 12 2004 2 2003 3 4.5 10 8 4.0 6…
  5. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 5
    Revenues in segmental breakdown Dynamic increase across all segments IFRS basis, PLN m 2003 2004 y/y Revenues increased by 25% across all segments Revenue total 24 412 30 535 25% due to growth of fuels of which sales volume by 5.6%…
  6. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 6
    Operating cost Variable costs grew less than revenues IFRS basis, PLN m 2003 2004 y/y Increase due to the growth Raw m aterials and energy 11 005 12 407 12.7% of fuel prices in Orlen Deutschland (39.8%)1 Costs of goods for resale 7…
  7. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 7
    Operating costs and segment split of operating profit 2004 vs. 2003 Operating profit IFRS basis, PLN m 2003 2004 change improvement due to a favourable refining and Operating profit 1 267 2 777 119.2% petrochemical margin, the…
  8. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 8
    Profit and loss account Record net profit Reduction of distribution cost IFRS basis, PLN m 2003 2004 change and administrative expenses by PLN 187 m Revenue 24 412 30 535 25.1% (2004/2003) Cost of sales -19 986 -24 403 22.1%…
  9. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 9
    Operating activity main driver supporting 2.5x increase in net profit 2003 2004 PLN m 3 000 58 50 325 (21) 2 500 (326) (141) 2 000 1510 1 500 Operating profit increase more than 2 442 119% shows unquestionable 1 000…
  10. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 10
    EBITDA and ROACE in 2004 compared to adjusted 2003 results1 EBITDA (PLN bn) ROACE (%) 4.4 20.0 19.8 4.3 4.3 4.2 19.0 19.0 4.1 4.0 4.0 18.0 3.9 3.8 17.0 3.7 3.6 3.5 16.0 1 1 2003 - adjusted 2004 2003 - adjusted…
  11. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 11
    Refining segment1 Increase in operating efficiency through favourable macroeconomic conditions PLN m 2003 2004 3 500 62 17 151 219 3 000 (43) (96) 2 500 733 (155) Effective realisation of cost cutting programme (254) 2 000…
  12. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 12
    Retail segment Improvement results due to cost cutting programme PLN m 2003 2004 7 18 200 (20) 150 (25) 141 Keeping favourable (87) 100 trend in non-fuel products sales (23) Poor Orlen Deutschland 50 result confirms the…
  13. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 13
    Petrochemical Almost double increase in segment result mainly due to petrochemical margins improvement 2003 2004 PLN m 26 1200 63 (28) (29) 1000 147 (98) (112) 800 (70) 493 Anwil took advantage of 600 favourable…
  14. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 14
    Agenda z Summary of 2004 financial results z Assumptions for 2005 financial plan z Supporting slides 14
  15. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 15
    Macroeconomic assumptions for 2005 Macro assumptions1 2004 2005 Refinery margin2: 5.6/b 3.4/b Brent/Ural differential: 4.1/b 3.5/b Brent crude oil: 38.3/b 36.0/b Exchange rate PLN/USD2 3.65 3.20 Exchange rate PLN/EUR2 4.53…
  16. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 16
    Operating assumptions for 2005 Wholesale volume sales increase 4% (gasoline, diesel, Jet, LHO) Retail volume sales increase 5% (gasoline, diesel, LPG) Petrochemical volume sales increase: 5% Crude oil processed 13.1 m tonnes…
  17. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 17
    Financial assumptions for 2005 Financial assumptions EBITDA : 14% referring to macro environment in 20041 Personnel cost: below the 2004 level2 CAPEX PLN 2.3 bn3 Dividend: recommendation of 30% payout ratio4 Total increase in…
  18. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 18
    Strategic actions in 2005 Internal strengthening of home markets Effective implementation of new retail Preparation of new cost cutting strategy programme Closing the Unipetrol acquisition Centralization of procurement…
  19. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 19
    PKN ORLEN share price performance against WSE indexes PKN ORLEN PKN Orlen price performance1 share price PKN Orlen share price Analysts Brokers comments2 comments Brokers comments Strategy will create shareholder value for…
  20. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 20
    Agenda supporting slides z Supporting slides z Macroeconomic environment z Operating and financial data for Q4 2004 z Cost cutting z ORLEN Deutschland 20
  21. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 21
    Macroeconomic environment in Q4 2004 Exchange rates1 in Q404 Refining margin 7/b average in Q404 Increase by 139% 2004/2003 5.0 12 2) 3) PLN/USD '04 PLN/EUR '04 4Q '2004 4Q 2003 4.5 10 8 4.0 6 3.5 4 3.0 2 2.5 0 10.04 11.04…
  22. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 22
    Macroeconomic environment in Poland Real GDP growth Strong growth of GDP supports 6.9% stable economic tendency. Still high 6.1% unemployment rate 19.1% 4.0% 4.7% 4.8% 4.5% (decrease by 0.9 pp y/y) 3.9% 2.3% New car sales…
  23. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 23
    Profit and loss account Q4 2004 vs. Q4 2003 IFRS basis, PLN m Q4 '03 Q4 '04 Revenue 6 908 8 313 Distribution and GA cost Cost of sales -5 775 -6 674 reduction by PLN 117 m Distribution costs -664 -585 Administrative expenses -243…
  24. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 24
    Operating highlights Q4 04 vs. Q4 03 Opearing data1 Q4 '03 Q3 '04 Q4 '04 y/y q/q Total sales (tt), of w hich 4 112 4 053 4 041 -1,7% -0,3% light product sales 2 2 721 2 743 2 754 1,2% 0,4% - other refinery products sales (tt) 801…
  25. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 25
    Refining, Wholesale and Logistics 4Q04 vs. 4Q 03 IFRS basis, PLN m Q4 '03 Q3 '04 Q4 '04 y/y q/q Revenue 4 372 6 015 5 933 36% -1% Segment costs - total 4 133 5 245 5 392 30% 3% Profit 239 770 541 126% -30% Sales (tt) 2 473 2 524 2…
  26. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 26
    Retail Q4 2004 vs. Q4 2003 IFRS basis, PLN m Q4 '03 Q3 '04 Q4 '04 y/y q/q Revenue 3 174 3 131 2 937 -7% -6% Segment costs - total 3 212 3 050 3 003 -7% -2% Profit -38 81 -66 74% -181% Sales (tt) 1 049 894 852 -19% -5% Changes…
  27. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 27
    Petrochemical 4Q 04 vs. 4Q03 IFRS basis, PLN m Q4 '03 Q3 '04 Q4 '04 y/y q/q Revenue 1 164 1 474 1 496 29% 1% Segment costs - total 1 092 1 258 1 241 14% -1% Profit 72 216 255 254% 18% Sales (tt) 563 579 569 1% -2% Changes…
  28. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 28
    Cost cutting programme in 2004 Realisation of cost cutting programme in 2004 PLN m 800 700 600 500 Savings 400 800 (sustainable) 300 637 200 100 167 Investments and 0 acquisition costs -113 (one off) -100 -208…
  29. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 29
    Positive effect of cost cutting programme on 2004 results PLN m 637 m PLN1 600 119 70 500 112 120 400 77 300 171 200 378 100 227 0 Production Logistics Retail Other Acquisition and Implementation Other Impact on EBIT…
  30. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 30
    Impact of cost cutting programme on Q404 results PLN m PLN 149 m1 140 18 18 120 26 100 2 85 1 80 41 60 40 64 20 46 0 Production Logistics Retail Others Acquisition and Implementation Impact on EBIT…
  31. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 31
    ORLEN Deutschland Volume sales higher than average for the market Trends in Q404 z Retail margin in Q404 at 4.1 cent/litre (decrease in Q404 of almost 30% compared to Q3 04). This had material effect on the financial results of…
  32. FINANCIAL RESULTS: FY 2004 AND FINANCIAL ASSUMPTIONS FOR THE 2005 PLAN – PKN Orlen SA – slide 32
    ORLEN Deutschland Financial highlights 2004 vs. 2003 Financial highlights, PLN m1 2003 y/y 2004 Total assets 1 628 -13% 1 416 Equity 571 -22% 447 PLN m2 Revenue 6 270 38% 8 634 Costs of sale - 5 946 40% - 8 315 Distribution…

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