17
October 2019 PKN ORLEN PKN ORLEN – Capital Group presentation ORLEN. FUELLING THE FUTURE
October 2019
PKN ORLEN
PKN ORLEN – Capital Group presentation
ORLEN. FUELLING THE FUTURE
22
PKN ORLEN – one of the biggest oil&gas companies in Europe (1)
BUSINESS SEGMENTS
� 211 m boe 2P reserves in Poland and Canada
� Average production ca 18 th. boe/d in 2018LEADER IN CENTRAL EUROPE
Refining
� Refineries located in Poland, Lithuania and the Czech Rep. with total max. crude
oil throughput of 35,2 mt/y
� Strategic location with an access to crude oil, product pipelines and sea terminals
� REBCO crude oil processing allows to benefit from Brent/Ural differential
� Diversification of crude oil supplies
Petchem
� Petrochemical assets fully integrated with refining
Energy (industrial cogeneration)
� More than 1000 MWe from new CCGT blocks in Włocławek and Płock
� Ca. 2800 fuel stations – the largest retail network in Central Europe
� Over 2100 Stop Cafe (coffee corners including convenience stores)
33
State Treasury
Polish pension funds
Others
PKN ORLEN listed on WSE since 1999
INDICES:
WIG, WIG20, WIG30, WIG Poland, WIG Paliwa
Market capitalization:
ca. PLN 44,5 bn (as of 24.10.2019)
SHAREHOLDERS STRUCTURE
Shareholders structure as of 28.12.2018
KEY DATA 2018
PLN
8,3
bn
EBITDA LIFORecord-high
EBITDA in Retail
211
m boe
2P oil and gas
reserves
33,4
mt
Record-high
throughput
PLN
2,8
bn
Record-high
EBITDA in Retail
42,9
mt
Record-high
sales volumes
Dividend
PKN ORLEN – one of the biggest oil&gas companies in Europe (2)
PLN
3,5
per share
4
THROUGHPUT AND UTILIZATION RATIOmt; %
90%
20152012
91%
20182013
84%90%
2014
86%94%
2016 2017
95%
Utilisation ratio
Downstream
Refining
COMPETITIVE ADVANTAGES
� Refinery in Plock classified as a super-site (acc. to
WoodMackenzie) considering the depth and throughput
capacity as well as integration with petchem
� Diversification of crude oil and security of natural gas supplies
� Prepared for changes in regulatory and market trends due to
execution of investment projects
� Leader in the fuel market in the Central Europe*
REFINING
PLN 3,7 bn
EBITDA LIFO
KEY DATA
� Max. throughput capacity is 35,2 mt/y, of which: 16,3 mt/y
Płock, 10,2 mt/y ORLEN Lietuva and 8,7 mt/y Unipetrol
� Ca. 60% of crude oil throughput is REBCO, which allows to
benefit from B/U differential
� Long-term contracts secure ca. 50% of throughput capacity.
Remaining crude is bought on spot market.
� Wholesale market share: gasoline (PL: 66%, CZ: 66%, LT:
81%) and diesel (PL: 54%, CZ: 60%, LT: 76%)
Data as of 30.09.2019
* Poland, Lithuania, the Czech Republic
5
Downstream
Petrochemicals
KEY DATA
� Sales in 2018 amounted to 5,0 mt
� Market share ca. 40% - 100% depending on the product
� PX/PTA – one of the most advanced petrochemical complex in
Europe with PTA production capacity of 690 kt/y
� Construction of Polyethylene Unit in Unipetrol in progress
� Petrochemicals Development Program
CAPEX: over PLN 8 bn till 2023
EBITDA: PLN 1,5 bn yearly
� building of Aromatics Compound complex
� development of Olefins complex
� development of Phenol capacity
� supported by extension of research and development facilities
COMPETITIVE ADVANTAGES
� The largest petrochemical company in Central Europe*
� Petchem assets integrated with refining allows savings
� Attractive portfolio of products including: monomers,
polymers, aromatics, PTA, fertilizers and PVC
� Strategic regional supplier for chemical industry
PETROCHEMICALS
ANWIL – CHEMICAL COMPANY
� PVC and fertilizers producer
� Ethylene pipeline connection with Plock refinery secures
feedstock for PVC production
� Synergies with a new CCGT block in Włocławek – steam,
electricity and infrastructure
PLN 2,3 bn
EBITDA LIFO
* Poland, Lithuania, the Czech Republic
Downstream
Energy
ENERGY
INSTALLED THERMAL CAPACITYMWt
INSTALLED ELECTRICAL CAPACITYMWe
Data as of 31.12.2018
* LT - Lithuania
3 658
POLAND
1 399
CZECH
REP.
1 040
LT*
POLAND
CZECH REP.
LITHUANIA
1600
142
160
COMPETITIVE ADVANTAGES
� ORLEN Group – one of the key producers of electric power and
heat used in a big portion for own purpose. Electric power
production is ca. 4,7 TWh.
� ORLEN Group possess energy units in 3 countries, of which:
� the biggest industrial block in Poland: EC Płock (415 MWe,
2150 MWt).
� modern Combined Cycle Gas Turbines in Poland:
CCGT Włocławek and CCGT Płock. In total over 1000 MWe.
� PKN ORLEN – one of the biggest gas consumers in Poland, ca.
2,5 bn m3. In total gas consumption is ca. 2,7 bn m3.
LOW-EMISSION ENERGY PROJECTS
� PKN ORLEN holds concessions for the construction of a
wind farm in the Baltic Sea with a maximum capacity of
1200 MWe. The license expires in 2027.
� The target farm power will depend on many factors, such
as e.g. geological conditions of the Baltic bottom,
environmental conditions and technical parameters of
turbines.
� The investment process, in the case of a positive
evaluation of the project, could start in 2023.
6
7
COMPETITIVE ADVANTAGES
� Modern and the largest network of fuel stations in Central
Europe*
� ORLEN – strong, recognizable and the most valuable brand in
Poland (PLN 4,7 bn)
� Attractive loyalty programs
� Dynamic growth of non-fuel offer by launching new Stop Cafe
locations including convenience stores O!SHOP
Retail
RETAIL
PLN 2,8 bn
EBITDA LIFO
KEY DATA
� 2807 fuel stations, of which: 1784 Poland, 584 Germany, 413
Czech Rep., 25 Lithuania, 1 Slovakia
� Market share: 34% Poland, 24% Czech Rep., 7% Germany, 5%
Lithuania, 0% Slovakia
� 2108 Stop Cafe locations, of which: 1681 Poland (including 459
O!SHOP), 298 Czech Rep., 106 Germany and 23 Lithuania
� In 2018 we sold 47,8 million hot-dogs (1,5 per second) and ca.
12,5 million litres of coffee (almost 6 olympic swimming pools)
� At the end of 2018 very large group of loyal customers: 0,6
million active FLOTA customers and 5,0 million active VITAY
customersData as of 30.09.2019
* Poland, Lithuania, the Czech Republic
COFFEE CORNERS AND CONVENIENCE STORES
#
1 7261 7371 765
1 8151 875
1 9071 947
2 0162 047 2 069
2 108
1 500
1 600
1 700
1 800
1 900
2 000
2 100
2 200
3Q184Q171Q17 2Q17 2Q183Q17 1Q18 4Q18 1Q19 2Q19 3Q19
+161
Upstream
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Data as of 31.12.2018
* Data before impairments of assets in amount of PLN (-) 82 m regarding mainly upstream assets
UPSTREAM
PLN 0,3 bn
EBITDA LIFO*
18,0 th. boe/d
TOTAL RESERVES OF CRUDE OIL AND GAS (2P)
211 m boePOLAND
AVERAGE PRODUCTION IN 2018
Total reserves of crude oil and gas (2P)
Ca. 13 m boe (4% liquid hydrocarbons, 96% gas)
EBITDA*: PLN 18 m
CAPEX: PLN 206 m
Total reserves of crude oil and gas (2P)
Ca. 198 m boe* (56% liquid hydrocarbons, 44% gas)
EBITDA*: PLN 284 m
CAPEX: PLN 534 m
CANADA
COMPETITIVE ADVANTAGES
� Flexible response to changes in the oil and gas market
� Adjusting capital expenditure plans to the macro situation
� Leveraging segment synergies in Poland and Canada
Poland: ca. 1,0 th. boe/d (100% gas)
Canada: ca. 17,0 th. boe/d (47% liquid hydrocarbons)
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PKN ORLEN competitive advantages
� Integrated, high-class assets and strong position on competitive market
� New units and attractive portfolio of products offered on developing markets
� Best locations and synergies of gas-fired power plants with other segments
� Modern and the largest sales network in the region with strong and recognizable
brand
� Upstream assets in Poland and Canada – cautious continuation strategy
Financial
strength
Value
creation
People
� Diversified financing
� Average maturity in 2021
� Investment grade: BBB - stable outlook (Fitch), Baa2 stable outlook (Moody’s)
� Financial gearing – below 30%
� Net debt / EBITDA LIFO – below 2
� Dividend – paid every year since 2013
� The World’s Most Ethical Company 2019
� Top Employer Polska 2019
� Platts 2019 TOP250 – 45th place among the largest energy companies in the world
� The Best Annual Report 2018
� IR Magazine Awards „Best in Central & Eastern Europe” for the best IR in the
region and „Best ESG communications” for PKN ORLEN
Thank you for your attention
For more information on PKN ORLEN, please contact Investor Relations Department:
phone: + 48 24 256 81 80
fax: + 48 24 367 77 11
e-mail: [email protected]
www.orlen.pl
1111
Agenda
Supporting slides
12
Dividend
12
PLN
3,00
per share
2017
2013
PLN
1,50
per share
2014
PLN
1,44
per share
2015
PLN
1,65
per share
2016
PLN
2,00
per share
� Our goal is to pay dividend regularly
� When planning the amount of dividend per share
(DPS), we also take into account maintaining a safe
level of financial ratios
� We paid dividend in years 2013-2019
� In 2019 we paid the highest dividend in the history
(PLN 3,50 per share)
PLN
3,00
per share
2018
PLN
3,50
per share
2019
1313
Crude pipeline
Products pipeline
Pump station
Terminal
Storage depot Mažeikių
Nafta
Joniskis
Latvia
Butinge* Orlen Lietuva Refinery
Lithuania
Illukste
Biržai
Ventspils(20,0 mt/y)
(14,0 mt/y)
(16,4 mt/y)
Klaipeda(9,0 mt/y)
Polock
� Concentration on cash flow improvement
� Due to overheads and employment costs reduction below USD 10 m per month as well as implementation of efficiency initiatives,
EBITDA LIFO is higher by over 1 USD/bbl
� CAPEX optimised
� Sales efficiency improvement and higher capacity utilization
� Ready for temporary shutdown when macro will worsen
ORLEN Lietuva - maximizing the possessed potential
* ORLEN Lietuva ownership
1414
� Speed up of operational excellence initiatives in Ceska Rafinerska
� Refining and retail sales enhancement due to grey zone limitation
� Investments in petchem projects
� Market share and non-fuel sales increase in retail
IKL pipeline10 mt/y
CEPRO production pipelines
Mero crude oil pipelines
CEPRO depots
Kralupy
3.3 mt/yParamo*
1.0 mt/y
Litvínov
5.4 mt/y
Druzhba pipeline9 mt/y
* Paramo refinery in Pardubice does not process crude oil since the end of 2012. It focuses on bitumen and lubricants production.
Unipetrol – continuation of operating efficiency improvement
15
Source: Oil & Gas Journal, PKN Orlen own calculations, Concawe,Reuters, WMRC, EIA, NEFTE Compass, Transneft.ru
Refinery (capacity m tonnes p.a.; Nelson complexity index)
�Oil pipeline [capacity]
Refinery of PKN ORLEN Group
Projected Oil pipeline
Sea terminal (capacity)
Lisichansk
(8.5; 8.2)
Batman
(1.1; 1.9)
Yaroslavi
Ingolstadt
(5.2; 7.5)
Litvinov (5.4, 7.0)
Kralupy
(3.3; 8.1)
Plock
(16.3; 9.5)
Gdansk
(10.5; 10.0)
Mazeikiai
(10.2; 10.3) Novopolotsk
(8.3; 7.7)
Mozyr
(15.7; 4.6)
Bratislava
(6.0; 12.3)
Schwechat
(10.2; 6.2)
Burghausen
(3.5; 7.3)
Holborn
(3.8; 6.1)
Bayernoil
(12.8; 8.0)
Harburg
(4.7; 9.6)
Leuna
(11.0; 7.1)
Schwedt
(10.7; 10.2)
Aspropyrgos
(6.6; 8.9)
Corinth
(4.9; 12.5)
Elefsis
(4.9; 1.0)
Thessaloniki
(3.2; 5.9)
Izmit
(11.5; 6.2)
Izmir
(10.0; 6.4)
Kirikkale
(5.0; 5.4)
Duna
(8.1, 10.6)
Arpechim
(3.6; 7.3)
Petrobrazi
(3.4; 7.3)
Petrotel
(2.6; 7.6)Rafo
(3.4; 9.8)
Petromidia
(5.1; 7.5)
Rijeka
(4.4; 5.7)Sisak
(3.9; 4.1)
Novi Sad
(4.0; 4.6)
Pancevo
(4.8; 4.9)
Neftochim
(5.6; 5.8)
Drogobich
(3.8; 3.0)
Kremenchug
(17.5; 3.5)
Odessa
(3.8; 3.5)
(ex 12)
Kherson
(6.7; 3.1)
DRUZHBA
DRUZHBA
DRUZHBA
ADRIA
IKL
ADRIA
�(18) Ventspils
Butinge(14)
�
(70) Primorsk� Kirishi
Yuzhniy
(ex 4)�
Brody
Tiszaojvaro
s
�
Triest�
�
Rostock�
[Ca 55]
�[C
a 2
2]
�[C
a 3
0]
Novorossiys
k
(ex 45)
�
Trzebinia
(0,5)
Jedlicze
(0,1)
Naftoport(30)
[Ca 20][Ca 9]
[Ca 10]
[Ca 9][Ca 3,5]
�(30) Ust-Luga
BPS2
Supply routes diversification
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
understood 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.
Disclaimer
16
For more information on PKN ORLEN, please contact Investor Relations Department:
phone: + 48 24 256 81 80
fax: + 48 24 367 77 11
e-mail: [email protected]
www.orlen.pl
