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STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA

PKN Orlen SA · Aug 16, 2005 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 1
    PSGJAN05EPK2_OVERVIEW(01).PPT Consolidated financial results of PKN ORLEN S.A. Q2 2005 (IFRS)1 Strategy implementation update Igor Chalupec, CEO Pawe Szymaski, CFO 16 August 2005 1) Excluding Unipetrol results 1
  2. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 2
    Agenda Summary of financial results and macroeconomic environment Strategy update Financial results Q205 Supporting slides 2
  3. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 3
    Financial results Q205 PKN ORLEN Group consolidated (excluding Unipetrol) Key financial data Q205 1 Operating data Q205 z ROACE2 14.4% z Cost cutting5 PLN 210 m ROACE (without provision) 22.8% z Wholesale volume sales6 + 12%…
  4. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 4
    Agreements with Agrofert and ConocoPhillips Key facts and action taken Summary of key facts Steps undertaken by the present Management Within the years 2003 2004 the then Management of PKN ORLEN The present Management asked…
  5. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 5
    EBITDA and ROACE Q205 vs. Q2041 Good results of PKN ORLEN despite one-offs (provisions) EBITDA (PLN m) ROACE (%) (in comparable market enviroment)1 (in comparable market enviroment)1 25,0 1 269 1200,0 21 Without 20,0 1000,0 956…
  6. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 6
    Macroeconomic environment in Q205 Exchange rate averages in Q2051 Refinery margin 5.5/b average in Q2053 Decrease of 7% Q205/Q204 5,0 PLN/USD PLN/EUR 10 2kw '2005 PLN/USD 2005 E 2 PLN/EUR 2005 E 2 2kw 2004 2005 E 4,5 8 4,0 6 3,5 4…
  7. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 7
    Agenda Summary of financial results and macroeconomic environment Strategy update Financial results Q205 Supporting slides 7
  8. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 8
    Despite one-off provision made it does not change Managements positive opinion regarding the companys presence in the Czech market, or the chances of a satisfactory return on this investment Further steps in the integration process…
  9. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 9
    The successful restructuring of the regional corporate structure will improve management and internal efficiency Key restructuring goals include improved efficiency of the back-office, decentralisation of sales management, and…
  10. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 10
    Expansion of polyolefin installations at BOP is in line with PKN ORLENs strategy regarding investment in middle distillates and petrochemicals In October, 2005 new Polyethylene HDPE and Capacity (tonnes per year) Polypropylene…
  11. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 11
    Key facts on other major strategic projects performed by PKN ORLEN management Series of efficiency-improvement projects launched Project Actions results So far in 2005 divestment of 8 companies was performed, the merger or…
  12. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 12
    Aiming to become the regional leader, PKN ORLEN is also involved in international ventures All capital investments in which PKN ORLEN decides to participate have to fulfil various financial-operational requirements. In order to be…
  13. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 13
    Agenda Summary of financial results and macroeconomic environment Strategy update Financial results Q205 Supporting slides 13
  14. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 14
    Unipetrol transaction1 presented in the condensed consolidated financial statement of PKN ORLEN on August 16th 2005 Methodology of presenting the transaction Result of the acquisition3 of Unipetrol assets Financial item Value in…
  15. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 15
    Revenues by segment Dynamic revenues increase in refinery segment IFRS basis, PLN m Q1' 04 Q1'05 y/y Comment Revenue total 7 473 8 400 12% zHigher revenues due to higher of which volume sales and increase in Refining1) 3 362 4 244…
  16. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 16
    Expenses Operating costs grew by less than revenues IFRS basis, PLN m Q2'04 Q2'05 y/y Comment Raw m aterials and energy 2 967 3 600 21,3% 21.3% z Increase of raw materials and energy by Costs of goods for resale 2 652 2 530 -4,6% -4.6%…
  17. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 17
    Operating profit by segment Visible improvement in results across all core business segments IFRS basis, PLN m Q2'04 Q2'05 y/y Comments Operating profit 587 640 9,0% 9.0% z The significant increase in operating of which: profit was…
  18. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 18
    Profit and loss account EBITDA margin increase, excluding one-off item Comments IFRS, PLN m Q2'04 Q2'05 y/y Revenues 7 473 8 400 12.4% 12,4% zCost cutting visible in decrease of administrative expenses of PLN34 m Cost of sales -5…
  19. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 19
    Operating profit increase in Q205 impacted by one-off item In m PLN Q204 Q205 Excluding provision1 58 1 000 11 11 7 +376 1,003 800 86 204 Mainly dividend from (199) 53 Polkomtel of PLN 83 m 600 (83) Excluding the…
  20. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 20
    Refining segment1) Increase in operating efficiency and exploitation of favourable macroeconomic conditions In m PLN 2Q04 2Q05 1200 35 20 58 1000 (6) (9) 180 (45) 800 (139) Result of light product 217 sales increase (96)…
  21. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 21
    Retail Segment Improvement due to efficiency programme and lower provisions In m PLN Q204 Q205 100 1 5 90 80 (4) 9 70 29 60 50 Focus on margin maximization (27) 40 62 30 61 Main reason for last years loss was 20 due…
  22. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 22
    Petrochemical segment Profit increase despite planed stoppage of olefin unit (modernization) Q204 Q205 In m PLN 400 350 23 41 300 (5) 250 49 (27) 200 106 150 (122) 205 100 Mainly due to planned 143 Favourable…
  23. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 23
    Unipetrol: financial highlights Consolidated financial results 1H05 vs. 1H04 (IFRS) Comments Financial highlights, th CZK H12004 y/y H105 Total assets 71 706 745 9.2% 78 318 284 z Decrease of net debt to equity from 33.3% to 24.7%…
  24. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 24
    Cost Cutting Programme Results Delivery on track Summary of Cost Cutting Programme effects Q205 z Initiatives implemented create sufficient potential to meet target of PLN 800 m1 . Efficiency improvement PLN 210 m z PKN ORLEN is…
  25. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 25
    ORLEN Deutschland Visible improvement in retail margin and financial results Trend in Q2 2005 z Dynamic increase of retail margin by 96% in Q205 vs. Q105 may be seen as an improvement of the business climate in the sector, and raises…
  26. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 26
    Contact For more information please contact our IR Office: Press Office: phone: + 48 24 365 33 90 phone: + 48 24 365 41 50 fax: + 48 24 365 56 88 + 48 22 695 34 57 e-mail: irORLEN.pl fax: + 48 22 695 35 27 e-mail: mediaORLEN.pl…
  27. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 27
    Agenda Supporting slides Summary of Q205 financial results and macroeconomic environment Strategy update Financial results Q205 Supporting slides z CAPEX in Q205 z Macroeconomic environment z Operating and financial…
  28. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 28
    Investments in 2Q051 Focus on petrochemical activity CAPEX in Q205 272 259 2Q'04 2Q'05 PLN m 125 93 73 48 50 27 Production, Wholesale and Retail Petrochemicals Others Logistics 1)Refers to PKN ORLEN Group…
  29. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 29
    Macroeconomic environment in Poland Real GDP growth Comment 6.9% Slight increase of GDP in Q205 better 6.1% results in manufacturing, trade and 4.7% 4.9% 3.9% 4.0% 4.0% construction industry. Weak consumer 3.0% demand. Decrease…
  30. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 30
    Operating highlights Q205 Operating data1 2Q 04 1Q 05 2Q 05 y/y q/q Total sales 1 (tt) , of which 3 553 3 322 3 782 13,8% 13.8% 6,4% 6.4% - light product sales (tt) 2 2 426 2 311 2 611 13,0% 13.0% 7,6% 7.6% - other refinery…
  31. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 31
    Revenue by segment1 Dynamic increase has continued refinery is the leader of improvement IFRS basis, PLN m Q1 05 Q2 05 q/q I-VI'04 I-VI'05 y/y Revenue total 6 806 8 400 23% 13 813 15 206 10% of which Refining2) 2 990 4 244 42% 6…
  32. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 32
    Expenses1 Operating costs grew by less than revenues IFRS basis, PLN m Q1 05 Q2 05 q/q I-VI'04 I-VI'05 y/y Raw m aterials and energy 3 269 3 600 10,1% 10.1% 5 562 6 869 23,5% 23.5% Costs of goods for resale 2 198 2 530 15,1%…
  33. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 33
    Operating profit by segment 1 Visible improvement in results across all segments IFRS basis, PLN m Q1 05 Q2 05 q/q I-VI'04 I-VI'05 y/y Operating profit 791 640 -19,1% -19.1% 1 070 1 431 33.8% 33,8% of which: 2 Refining 579 778…
  34. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 34
    Profit and loss account1 Record net profit after H105 visible in level of ROACE IFRS, PLN m Q1 05 Q2 05 q/q I-VI'04 I-VI'05 y/y Revenues 6 806 8 400 23,4% 23.4% 13 813 15 206 10,1% 10.1% Cost of sales -5 341 -6 617 23,9% 23.9%…
  35. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 35
    Main results of the cost cutting programme by segment The leaders of the programme are the largest segments 78 426 PLN m 38 95 40 52 210 67 43 31 186 36 89 216 97 Production Retail Logistics Others Total - after…
  36. STRATEGY IMPLEMENTATION UPDATE – PKN Orlen SA – slide 36
    ORLEN Deutschland Financial highlights Q205 vs. Q204 Financial highlights, PLN m Q2 2004 y/y Q2 2005 Comment Total assets 1 640 -10% 1 476 zDecrease in costs of sales, distribution, and GA costs of Equity 533 -13% 465 PLN 10m due…

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