Corporate Presentation Financial Results of Q2 and FY 2015 September 2016
Agenda 1. PGNiG Group & Polish Gas Market 2. PGNiG Segments Exploration and Production Trade and Storage Distribution Generation 3. Strategy, CAPEX, Debt 4. Appendix - Financial Results of Q2 and FY 2015
PGNiG Group and Polish Gas Market
Polands no.1 integrated group in the oil and gas sector Natural gas Conventional and (direct sales) unconventional PL, NR, deposits Crude oil in Poland, PAK Norway and Pakistan Geological, geophysical and drilling services…
Fourth largest Polish company on the Warsaw Stock Exchange** Listed on WSE since Stock performance since January 1st, 2016 PLN September 2005 5,75 Market cap. of PLN 31bn (EUR 6.9bn, USD 7.9bn)* 5,25 Significant share in WIG…
Gas market in Poland: Low consumption with growth potential Natural gas consumption by country in 2015 Primary energy consumption by fuel in 2015 bcm 80 74,6 100% 12% 5% 70 16% 80% 13% 60 Nuclear energy 50 22% 26% Renewables 60%…
Gas market worldwide Primary energy consumption by fuel Natural gas demand m tonnes oil eq. 40% 5000 Oil 4 428 4 136 3 874 4000 3 521 30% Oil 30% Coal 3 066 3 160 Gas 26% 2 880 Coal 25% 3000 2 505 Gas 20% 2 182 1 925 1 768…
Operating segments of PGNiG Group
PGNiG Groups financials 2010-2015 Fifth biggest company in Central PGNiG Groups EBITDA** PLNbn and Eastern Europe* 7 6,4 6,1 Third biggest oil company in the 6 5,6 region* 5 4,4 4,6 3,1 2,4 Stable EBITDA level due 4 1,2 3,5…
Exploration & Production summary PGNiG SA is a leader Production volumes* in production of gas and crude mboe 40,32 39,12 39,95 41,68 37,59 37,88 oil in Poland 40 4,9 3,2 3,2 3,9 2,1 3,1 Average daily production over 35 31,34…
Exploration & Production financial results Low oil price affects E&Ps Exploration and Productions EBITDA PLNbn results 4,0 Revenue from sales of oil and condensate in 2015 down by PLN 0.7bn 3,0 Net impairment losses, dry wells…
International E&P activities Norway Licenses 19 USD 360m (Skarv) Licence cost NOK 1.95bn (Morvin, Vale, Vilje, Gina Krog) Skarv CAPEX approx. USD 800m (PGNiGs part) 59 mboe Reserves of the (Skarv) licence (2P) for 29 mboe Skarv…
International E&P activities Africa and Asia African assets: Lybia Asian assets: Pakistan Ghadames/Murzuq concession Kirthar concession agreement February 25th 2008 agreement May 18th 2005 shares PGNiG - 100% PGNiG 70%…
Gas supply & sales Trade and Storage segment comprises: Sources of gas supply of PGNiG SA in Poland bcm sales of natural gas both imported and domestic to retail and 18 wholesale markets, sales and trading of electricity 15,2 15,3…
Trade & Storages financial results Lower unit gas purchase costs Trade and Storages EBITDA PLNbn coupled with pressure on selling 1,2 prices 1,0 0,8 0,6 1,0 0,4 0,8 Segments results for FY 2015 0,5 0,6 0,2 PLNm -0,1…
Gas trading and retail sales in Poland after August 1st 2014 Gas sold to key customers: above 25 mcm annually 4.6 bcm in 2014 4.3 bcm in 2015 Production PGNiG SA Direct sales 0.93 bcm in 2014 0.72 bcm in 2015 Gas purchase Polish…
Distribution PSG (Polish Gas Company), Stable networks growth and increase of distributed volumes (+1.6% CAGR 2005-2015) a PGNiGs subsidiary has 97% thou. km 150 bcm 11 market share 140 10 Supplies natural gas from gas 130 9…
Distributions financial results Tariff prices up 3% year on year Distributions EBITDA PLNbn Volumes up 2% year on year 2,5 PSGs strategic goal is to 2,0 generate EBITDA at PLN 16bn in 2016-2022 1,5 2,3 2,3 1,0 2,0 Segments…
Heat and Power Generation PGNiG Termika - the largest heat producer in PGNiG Termika operating data Poland with over 23% of heat capacities Covering approx. 75% of the total heat demand in Installed heat power 4,782 MWt Warsaw, as well…
Heat and Power Generation Heat and electricity prices up Generations EBITDA with volumes slightly down PLNbn 0,8 Reduced fuel prices and 0,7 attractive tariff boost results 0,6 0,5 0,4 0,68 0,3 Segments results for FY 2015…
Strategy, CAPEX, financing
Strategy of PGNiG Group for 2014-2022 Following a review of the PGNiG Group Strategy for 20142022, the PGNiG Group's vision and primary objective have been updated 1 Mission statement To increase PGNiG's value through 2 Vision…
Pillars of the PGNiG Group Strategy for 2014-2022 Strategy of the PGNiG Group for 20142022 A Maintaining stable value of sales (both in retail and wholesale) B Maximising cash flows from infrastructure and generation areas C…
Key strategic objectives 1 2 3 Stabilisation of EBITDA at PLN 7.4bn in 2022 Hydrocarbon production in Poland Increase in average annual capital Diversifying PGNiG's gas supply maintained at approximately expenditure on organic…
CAPEX estimate for the years 2014-2022: PLN 40-50 billion Annual CAPEX 2009 2015 CAPEX breakdown for 2014-2022 (excl. potential M&As) Generation 8% Trade and Storage 10% PLNbn CAPEX until Exploration and 8,0 7,5 2022:…
Debt and sources of financing Dividend per share Sources of funding (as at June 30th 2016) PLN PLNm 0,30 10000 available used 0,20 8000 0,10 6000 4000 8,500 0,00 2,000 3,100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
Appendix
Financial highlights 2015 EBITDA down 4%, with oil [PLNm] 2014 2015 % and gas prices declining Revenue 34,304 36,464 6% Operating expenses (excl. D&A) (27,959) (30,384) 9% EBITDA 6,345 6,080 (4%) Depreciation and amortisation…
Performance drivers Marked impact of recent Yoy appreciation of USD and EUR In Q2 2016, 9-month average of crude oil against PLN prices down 46% yoy and down 18% qoq periods' tariff reductions on PLN 4,5 USD/bbl 120 4.37 gas…
Efficiency Improvement Programme almost PLN 1bn in savings by 2017 The Programme aims to Programme objectives: permanently reduce the To set efficiency improvement targets for the individual segments and entities within manageable…
Gas transport routes Supply diversification: LNG TERMINAL POLAND Increasing the level of supply security (I stage - 5 bcm) LITHUANIA Avoiding interruptions in gas supply (1.7/2.4 bcm, Reducing dependence on one source of 2021)…
Trade and Storage PGNiG Group (PGNiG SA, PGNiG Retail, PGNiG Supply&Trading) Margin on gas fuel (high-methane gas) gas sales volumes by customer group bcm Polish Power 3,74 12% Exchange (TGE) 8,33 cumulatively quarterly…
Development of underground gas storage facilities UGS Capacity: 2005-2015: +1,5 bcm Existing UGS Important data: UGS in construction/extension Current no. of storage facilities 9 Capacity: actual/planned - including salt caverns 2…
Changes on the Polish gas market Gas market deregulation Gas sales volume [mcm] 2014 2015 H1 2016 is affecting PGNiG's share in imports and sales Total PGNiG Group 18,609 23,000 12,724 structure Comments: PGNiG SA 13,751 13,177…
Tariff Model in Poland Type of activity Regulatory mechanism Monthly average gas prices in European import contracts and PGNiG tariff price PLN / ths. cm Direct sales None 2000 Gas sales Cost of gas + operating costs + margin…
Statement of financial position, statement of cash flows, financial ratios and headcount Group's statement of financial position (as at June 30th 2016) Headcount (at year end) PLNm thousand 60 000 40 Non-current Current Equity 50…
Production and sales volumes NATURAL GAS PRODUCTION, PGNiG Group (mcm) Q2 2016 Q1 2016 FY 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 FY 2014 Q4 2014 Q3 2014 Q2 2014 Q1 2014 HIGH-METHANE GAS (E) 487 509 2,031 508 515 507 501 1,876 440 475 482…
Glossary 2P Proven reserves of fossil fuels bbl barrel BGK Bank Gospodarstwa Krajowego boe / mboe Barrel of oil equivalent / Million barrel of oil equivalent (one barrel is approx. 0.136 tonnes) CAGR Compound annual growth rate…
Additional information Dates of publication of periodical reports Aleksandra Dobosiewicz IR Manager November Desk: +48 22 589 46 71 Mobile:+48 665 004 847 Fax: +48 22 691 81 23 E-mail: aleksandra.dobosiewiczpgnig.pl 9 Q3…
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