Results after 4Q2003 Record-breaking results achieved by PKN ORLEN February 2004 1
A milestone year for PKN ORLEN z ROACE 8,6%* WACC 9,0% z Record-breaking net profit - 1041 mln PLN z Savings of 144 mln PLN after 6 months of the cost cutting program implementation z Sale of 25 non-core companies z Headcount…
ROACE at relatively high level even after excluding one-offs ROACE ROACE ROACE Value streams change 2003 2006 target PKN ORLEN Group 3.7pp 7.3% 8.8% Production, Wholesale and Logistic 8.9pp 13.5% 9 12.3% Retail 2.3pp 8.1%…
Cost cutting Full implementation of the programme in 2003 800 Savings (sustainable) Investments and M&A (one-offs) 450-500 144 9 One-off spendings -M&A -33 -46 - -Implementation costs -16 -18 - -Capex -1 -40 -40 -50 -104…
Market environment in oil & gas sector Favourable conditions utilized Crude oil price, Brent (USD/b) 2003 vs 2002 33 31 z Average increase in crude oil 29 prices (Brent) in Y03 by 15.3% from USD 25.04 to USD 28.86 (y-o-y)…
Market environment Poland Noticable recovery in the economy Real GDP growth 4.7E% 5% FY estimation: 3.0- 3.5% 4% z Visible GDP growth confirms 3% economic recovery. Estimated 2% Y03 GDP growth rate at 3,7%. 1% Unemployment rate…
Profit restructuring results reflected in profitability z Surge in revenues due to consolidation IFRS, m PLN 2003 2002 change of German* activities as well as higher Revenues 24 412 16 902 44,4% prices of refinery products Cost of…
Operating CF vs organic CAPEX Operating CF Disinvestments PLN 1.7 bln Change of debt 32% PLN 245m PLN 57m * Dividend and M&A interests PLN 325m 600 Production and PLN 175m 500 wholesale 400 Retail 300 Petrochemical…
Cost cutting and further margin optimization main drivers of the efficiency increase Refining and wholesale z Substantial shift between gasoline/diesel&LPG IFRS, mln PLN 2003 2002 change z Results of our strategy of maximising the total…
Significant improvement of ORLEN network recognition and development of non-fuel goods sales driving the success Retail z Decreased volumes of gasoline are IFRS, mln PLN 2003 2002 change compensated by increase in volume of diesel…
Robust profitability in petrochemicals Petrochemicals IFRS, mln PLN 2003 2002 change z Increase of sales volume in Revenues 4 545 4 166 9,1% monomers and fertilizers resulted Total cost of in total sales growth of 8.7% 4 127 3…
Completion of all announced strategic goals Promise 2003 Result Goal 2004 Efficient take-over of German Completion of full activities + SWAP agreements resulting in extra rebranding process + SWAP agreements for 9 Net profit over…
supported by implementation of operational targets. Promise 2003 Result Target 2004 Cost cutting PLN 100 m 2003, PLN 144 m 9 PLN 450 m PLN 800 m by 2005 sales Total sales volume* -1% -0.6% 9 6% Retail sales** 5% 1.1% 2%…
Supporting slides VBM and cost cutting programme 14
SVA retail Change y-o-y Fuel margin Throughput per station PLN 57m ( 109 th. liter) Unit margin ( PLN 0.01/litre) Av. shop area ( 3.6m2) SVA Non fuel margin PLN 23m Sales per m2 ( PLN 809) PLN 25m PLN 29m Unit margin ( PLN…
Production and logistics as the pillars of the cost cutting programme in 2003 PLN 144m 24 33 36 16 Target 2003 95 84 Logistic Production & Savings M&A Implementation Savings at the Technology achieved in costs EBIT level…
Implementation of support infrastructure 1* Implementation Cost cutting team independently leads team/ procedure implementation from January 2004 2 Realization in budget in 2004 Project Initiatives in infrastructure budget 3…
Realization of voluntary redundancy scheme Programme is opened till the end of March 2004 520 Relatively big 400 interest in programme despite of the early stage About 400 declarations February Target VRS 2004 till the end…
Supporting slides Other operating and financial data 19
Balance sheet Financial strengthening of PKN ORLENs position IFRS basis, in PLN m 2003 2002 change Non current assets 10 751 9 814 9,5% Current assets, of which 6 435 5 259 22,4% Inventories 3 059 2 868 6,7% z Increase in assets as a…
Operating highlights 2003 Higher production efficiency IFRS basis, in PLN m 2003 2002 change z Increase in total retail sales of light products as a result of German activity Retail sales of motor 3 623 2 176 66,5% consolidation…
Support slides Fuel stations in Germany and BOP 22
All stations in Germany are operating under new brands z By the end of the year the rebranding process of all German stations was fully completed Planned break even result for the first 10 months of operations in 2003 achieved (PLN…
Influence on consolidated statement of ORLEN Deutschland and BOP Balance sheets - selected item s (PLNm )* 2003 Orlen Deutschland Property, plant and equipment 851 Inventories 130 Trade and other receivables 336 Cash and cach…
Supporting slides 4Q2003 results 25
Market environment in gas & oil sector Satisfactory level of refinery margins Crude oil price, Brent (USD/b) 4q 2003 vs 4q 2002 32 30 USD/bbl 28 9,8% z Increase in crude oil prices 26 (Brent) in 4q by 9.8% from 26.83…
Profit & Loss account Significant increase in earnings per share zDue to consolidation of sales from IFRS basis, m PLN 4Q 03 4Q 02 change Deutschland, PLN 1.9m, PKN ORLEN Group revenues increased by 4.5% Revenue 6 908 4 777 44,6% Cost…
Refining and wholesale Increase segment profitability Refining and wholesales IFRS basis, mPLN 4Q03 4Q02 change z Economic upturn visible in total increase in light product Revenue 4 372 4 188 4,4% Total costs sales of 4.5% 4 118…
Retail Margin optimisation Retail IFRS basis, mPLN 4Q03 4Q02 change Revenue 3 174 1 064 198,3% z Excluding German activity retail Total costs revenues increase by 18.1% 3 184 1 114 185,8% of the segment Profit of -10 -50 - z…
Petrochemicals Promising profitability Petrochemicals z Impact of polyolefin sales taken over by BOP visible in slight decrease IFRS basis, mPLN 4Q03 4Q02 change of PKN ORLEN revenues Revenue 1 164 1 171 -0,6% Total costs 1 092 1…
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