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8/8/2019 IRpresentation September
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Petkim Petrochemical Holding Corp.
Presentation to Analysts
October 2010
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AGENDA
1 I World Economy & Petrochemical Industry
2 I A Glance at Petkim
3 I Investments
4 I Growth Plans and Strategies
5 I Key Financials
2
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-2,4
-4,1-5,2
3,32,4
9,1
-0,2
-4,7-3,6
-7,9
5,7
1
4,3
9,4
7,16,1
2
10
3,6 3,42,9
1,31,8
4,1
9,68,4
4,2
US EU Japan Russia China India Brazil Turkey C&EE
2009
2010
2011
2009 2010 2011
Advanced Econ. -3,2 2,6 2,4
Emerging Econ. 2 ,5 6,8 6 ,4
World Economy & Petrochemical Industry
0
200
400
600
800
1.000
1.200
Oca.06 Oca.07 Oca.08 Oca.09 Oca.10 Oca.11
Fiyatlar($/MT)
-100
-50
0
50
100
150
200
M
arjlar($/MT)
Nafta-Ham Petrol Ham Petrol (Brent)
Benzin (CIF NWE) Nafta (CIF NWE)
SLIGHT RECOVERY IS OBSERVED BEGINNING
FROM THE SECOND HALF OF 2009. MODESTGROWTH IS OBSERVED IN 2010.
DUE TO THE CRISIS GROWTH RATESDECELERATED IN ALMOST EVERY REGION OF
THE WORLD. BUT RECOVERY IS EXPECTED FOR2010
THE ICIS PETROCHEMICAL INDEX ROSE TO 299IN JUNE 2010, A GAIN OF %90 OVER THE
FEBRUARY READING OF 157.
RECOVERY IS EXPECTED IN OPERATING
RATES AS GLOBAL DEMAND IMPROVES.
Source: IMF, World Economic Outlook(WEO), September 2010
150
200
250
300
350
400
Mar.05 Oct-05May.06Dec-06 Jul-07 Feb-08Sep-08 Apr-09 Nov-09 Haz.10
ICIS Petrochemical Index (IPEX)*
%90
Global Basic Chemicals and EBIT ContributionDollars Per Metric Ton
Crude Oil Naphtha Gasoline Price Expectations
3
World Economic Growth Rate (%)Economic Growth in Selected Economies (%, yoy) Regional & World Ethylene Operating Rates (%)
OIL PRICES ARE EXPECTED TO REMAINBETWEEN USD 75-85 RANGE IN 2010.NAPHTHA AND GASOLINE PRICES ARE
EXPECTED TO FOLLOW CRUDE OIL.
* An indicator of average change in world petchem prices for basket of 12 essential petchem products in US, WE and Northeast Asian markets
Source: CEFIC Source: CMAI
Source: CMAI
Source: CMAI
Source: CMAI
FUTURE EARNINGS ARE EXPECTED TOSTRENGHTEN WITH THE CONSOLIDATION,M&A IN INDUSTRY AND SUCCESSFULECONOMIC STIMULUS
World North Asia South Asia India
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AGENDA
1 I World Economy & Petrochemical Industry
2 I A Glance at Petkim
3 I Investments
4 I Growth Plans and Strategies
5 I Key Financials
4
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PETKM
5
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ETHYLENE
C4
NAPHTHA-LPG
PROPYLENE
AROMATICS
ETHYLENE
C4
NAPHTHA-LPG
PROPYLENE
AROMATICSETHYLENE
Petrochemicals from Naphtha
6
LDPEBags, greenhouse covers, film,cables, toys, pipes, bottles, hoses,
packagingHDPEPackaging film, construction andwater pipes, bottles, soft drinkcrates, toys, jerry cans, barrels
MEG
Polyester fiber, polyester film,antifreeze
VCM - PVC - EDCPipes, window and door frames,blinds and shutters, cables, bottles,construction materials, packaging
film, floor tiles, serum bags
CA-CAUSTIC SODATextile, detergent
PROPYLENE
PPKnitting yarn, sacks,carpet thread, ropesand hawsers, tablecloths, napkins,
doormats, felt, hoses,radiator pipes, fishingnets, brushes, blankets
ACNTextile fibers, artificialwool, ABS (AcrylonitrileButadiene Styrene)resins
C4
BUTADIENE
RubberAutomobile tire
AROMATICS
BENZENE, TOLUENE
Detergent, white goods,Solvents, explosives,pharmaceuticals,cosmetics
O-X - PA
Pigments, plasticizers,synthetic chemicals,polyester
P-X - PTAPolyester fiber, polyesterresin, polyester film
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Company Overview
Established in 1965/Second complex commissioned in 1985
The sole petrochemical producer in Turkey
25% domestic market share and well positioned assets inan ever growing market
USD 1.412 mn net sales (9M 2010) USD 99 mn EBITDA (9M 2010)
15 main plants, 8 auxiliary units
Located in Aliaa near Izmir
Sits on a land of 19 mn sqm Harbour, water dam, power generation unit (226 MW)
Adjacent to Tpra Aliaa Refinery
PETKM
FACILITIES
MAINFEEDSTOCK
PRODUCTS
PRODUCTION
Naphtha, LPG, C4, Condensate
Main product goups: olefins, polyolefins, vinylchain, aromatics and other basic chemicals
2.399 th. tons of gross production realized in 9M 2010
Realized capacity utilization rate of 97,7% (planned as
96% in 2010)
7
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Relative Performance
100
120
140
160
180
200
220
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
ISE 100 PETKIM
Petkims Ownership Structure
Share Information (26 October 2010)
Stock Price Performance
Ownership Profile
Privatization process was completed in May2008. SOCAR&Turcas Consortium acquired51% stake in Petkim at an amount of USD
2.04 bn.
Closing Price (TRY/Share) 2,62
Market Cap (mn TRY) 2.620Market Cap (mn $) 1.854
Free Float (%) 38,7
Source: Reuters
Source: Reuters
Strong Performance
8
Free Float
38,7%
SOCAR Turcas
51,0%
PA
10,3%
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Petkim: The Strong & Tangible Symbol of Economical & Strategical Partnership
TURCAS is the first privately-ownedpetroleum company in Turkey focusingon distrubution of oil products andenergy investments through itsinternational strategical partnerships
SOCAR, with large-scale investments inAzerbaijan is one of the worlds oldestpetroleum companies. SOCAR is a
shareholder and major supplier of the 50million ton capacity BTC crude oilpipeline and the BTE natural gaspipeline, which transports 6,6 billioncubic meters of natural gas to Turkey
PETKM
A BRIDGE LINKING AEGEAN TO CASPIAN
9
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Products and Capacity
PETKIMALIAGA COMPLEX
START-UP 1985
TOTAL
Capacity 1,916,000 ton/yr
Other Products
1
Capacity954,000 ton/yr
Fiber Raw Materials
Capacity249,000 ton/yr
Thermoplastics
Capacity 713,000 ton/yr
1 Ethylene (520,000),VCM (152,000),
PA (34,000),Chlorine (100,000),Benzene (134,000),
MB (10,000),Plastic Products(4,000)
ETHYLENE 520
PROPYLENE 240
C4 140
PY-GAS 390
AROMATICS 320
BENZENE 134
P-X 136O-X 50
CHLORINE 100
VCM 152
PVC 150
LDPE 323
HDPE 96
PP 144
MEG 89
ACN 90
PTA 70
PA 34Power (MW) 226
Product Capacities(thousand tons)
PLANT CAPACITIES
10
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1.371 1.3911.442
1.049
1.208
364 385 444
0
200
400
600
800
1000
1200
1400
1600
2007 2008 2009 9M 09 9M 10 Q3 09 Q2 10 Q3 10
Petkim: Net Sales
Net Sales (thousand tons)
Breakdown of Sales Volume 9M 2010
Net Sales (million USD)
Breakdown of Sales Revenues 9M 2010
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Petkim: Exports
Breakdown of Exports Revenues by Product Type 9M 2010
Breakdown of Exports by Region 9M 2010
Exports Revenues by Years (million USD)
Petkim products are exported to nearly 60 different
countries Benzene, C4, LDPE, Py-Gas and P-X are the mainexports products.
The second exporter in chemical industry in Turkey in2009.
Share of export in total sales 9M 2010 is 26%
12
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-4
99
89
99
3439
31
-5
15
35
55
75
95
115
2008 2009 9M 09 9M 10 Q3 09 Q2 10 Q3 10
Petkim: Product Prices & Cost Breakdown
50
100
150
200
250
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Thermoplastics Naphtha
RawMaterial78,7%
Labour5,2%
Energy
9,3%
Others
6,8%
0
500
1000
1500
2000
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Naphtha Unit Price
Petkim Thermoplastics and Naphtha Price Changes
Raw Material and Product Prices (USD/ton)Raw Material and Product Prices (USD/ton)*
Cost Breakdown*
0
250
500
750
1.000
1.250
1.500
1.750
LDPE HDPE PP MEG PVC
Naphtha Cost Product Prices
Petkim EBITDA Performance (million USD)
* As of September 2010
13
Index (2007 January=100)
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Petkim: A Remarkable Turnaround Driven by Operational Efficiencies
Efficiencies on Marketable Production Per Capita
Feedstock flexibility (switching from Naphthato LPG/C4)
Fuel flexibility in power generation
Maximization of capacity utilitization (95%)
Restructuring and rejuvenation of labor force
Initiatives for energy efficiencyimprovement
Process optimization
(APC, DCS implementation)
Increasing trading opportunities
Person
14
W. Europe Ethylene Capacity Utilitization Rates
60
65
70
75
80
85
9095
100
105
110
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2008 2009 2010
Petkim Ethylene Capacity Utilitization Rates (%)
Low capacitydue to incidental outage
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AGENDA
1 I World Economy & Petrochemical Industry
2 I A Glance at Petkim
3 I Investments
4 I Growth Plans and Strategies
5 I Key Financials
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Capital Expenditures and Planned Capacity Increases
Moderate gearing of capital investments instead of fully
financing with equity as it has been in the past
Increasing capacities of existing plants with minor capex-
smart debottlenecking investments
Maximizing production of LDPE, where Petkim has acompetitive advantage
Optimizing processes in the plants ( implementation of
Advanced Process Control and Distributed Control
Systems)
Investments to enhance egergy savings and operational
efficiencies on existing plants (such as rehabilitation workfor the furnaces of the aromatics plant)
72
50
78
154
6656
46
74
54
020
40
60
80
100120
140
160
2002
2003
2004
2005
2006
2007
2008
2009
2010P
Capital Expenditures of Petkim (million USD)
16
Ethylene 520 67 587 2012LDPE-T 133 27 160 2011PA 34 15 49 2012PTA 70 35 105 2012
Planned Capacity Increases (th ton)
Plants Current Additional After DateCapacity Cap Increase Cap Increase
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Investment Highlights
PETKIMDominant producer25% market share
1998-2009 CAGRThermoplastics demand 6,5%GDP growth 3,0%
Growth Potential in the Domestic Market
One of the fastest growing markets
An attractive market, the second biggest importer ofpetrochemicals after China
More than 6000 small and medium sized companiesare active mainly in packaging, construction andautomotive fields
Petrochemical market size 6-7 billion USD
-15
-10
-5
0
5
10
15
20
25
30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Thermoplastics Domestic Growth (%) GDP Growth (%)
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2015
E
Thermoplastics
Fiber Raw
U.S.A 90 75 76W.Europe 78 69 70Turkey 45 43 45Republic of China 30 28 30World 25 24 24Brazil 23 25 27India 6 5 6
Petrochemicals Domestic Demand (thousand ton)
Kg/capita 2007 2008 2009
Plastics Consumption per Capita
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AGENDA
1 I World Economy & Petrochemical Industry
2 I A Glance at Petkim
3 I Investments
4 I Growth Plans and Strategies
5 I Key Financials
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DOWNSTREAM
ADVANTAGES OF WIDE PRODUCT
RANGE
HIGH VALUE ADDED SPECIALTYCHEMICALS
STRATEGIC PARTNERSHIPS WITHCUSTOMERS OR OTHERINVESTORS (CLUSTER MODEL)
ENERGY
PRODUCTION
LOGISTICS & TRADING
UPSTREAM
SYNERGY WITH
SOCAR&TURCASREFINERY
Growth Plan and Strategy
4 PILLARS OF GROWTH PLAN
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Feedstock Flexibility Logistics Increasing LPG utilization in feedslate of cracker
Utilization of Fluid CatalyticCracking (FCC) and C4 stream
Setting up an advanced steamcracker model for the utilization ofdifferent feedstocks and the factoryoptimization
Energy saving program
Opportunity for importing NG fromAzerbaijan
Power generation from wind
New distribution centers
Increased transportation by rail
Potential strategic partnershipopportunities in port business
Capability for storage facilities leasing
Short Term Growth Plans
TradingSales&Marketing
BusinessTransformation
Capacity Increase
Meeting total needs of customers Product trading that will be conductedfrom Aliaga and also from new logisticcenters
New financial instruments to promotesales
Capacity increase by:
Ethylene and thermoplastics revamping
Debottlenecking and modernization
Maximizing asset utllitization
Reviewing the current performance Assessing potential improvementareas in organization, maintenance,energy, HSE and operations
Improving IT infrastructure with ERPand integrated Manufacturing Execution
System (MES)
Energy
20
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SECURING FEEDSTOCK WITH THE REFINERY
INTEGRATION
Mid to Long Term Growth PlansTO REACH 40% MARKET SHARE WITH
DOWNSTREAM INVESTMENTS VALUE SITE
SOCAR&TURCAS AEGEAN REFINERY
Allocation of 130 ha area for the refinery investment 10 million tons /year crude oil capacity Product slate: naphtha, LPG, diesel, kerosene, jet fuel (no gasoline)
30% investment cost reduction due to existing infrastructure Creation of synergy with the vertical integration Feedstock security for Petkim Additional revenue from services to the refinery
Available infrastructure for potential investments
Double digit demand growth in the Turkish chemical sector
Increasing competitive advantage with sinergies created
New investment opportunities with local and foreign companies
Cluster Model
21
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LOGISTICS
To become one of the key logisticsmain terminals in the region
High capacity potential of containerhandling
High capacity potential of liquidand dry cargo handling
High capacity of logistics supportunits
Direct access to national railway
hubs and national transit ways andhighways
Tank Farm
ADVANTAGES Increasing harbour capacity and
utilization rate
Storage of various solid, liquid, andgas chemicals
Paving the way for potentialinvestments on transportation
Import and export opportunities forchemicals
Growth Plan and Strategy
GROWING WITH LOGISTICS INVESTMENTS
Exclusivity agreements have been signed with one of the industry-leading companies, APM Terminals BV, for thedevelopment of Petkim port, and negotiations are currently continuing.
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Chemical Park Cluster Models
MARL Chemical Park (Germany)
Wilton International Teesside(England)
Shangay Chemical Park (China) Jurong Island (Singapore)
North-Pas de Calais (France)
Point Lisas Industrial Estate (Trinidad)
Zeitz Industrial Park (Germany)
Dow Value Park (Germany)
Antwerp (Belgium) Chemical Alliance Zone (USD)
Cluster Models
24
MARL Chemical Park (Germany) Antwerp (Belgium)
Wilton International Teesside (England)
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Year 1960
25
Today
JURONG-Singapore
JURONG ISLANDS KEY FIGURES
Total Sales (billion USD) ~75Land (hectare) 3.200# of Operated Plants (unit) 95# of Labour 30.000Refinery Capacity (million barrel/day) ~1,3
# of Crackers (unit) 5Electricity Generation Capacity (mw) 4.650
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PETKM & Jurong International
26
The world's most successful petrochemicalpark, Jurong Island, is a man-made landmass
created from seven islands, in which a numberof chemical companies co-exist.
Petkim signed a consultancy contract withJURONG International Pte Ltd. (JURONG)which has established the cluster model of
Jurong Island Chemical Park in Singapore andplanned chemical park fields in more than 40countries.
A Master Plan study is being conducted byJURONG in order to ensure the most efficientuse of the existing land and infrastructure and toestablish a chemical park that will integrate thevalue chain of upstream, downstream, energyand logistics.
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AGENDA
1 I World Economy & Petrochemical Industry
2 I A Glance at Petkim
3 I Investments
4 I Growth Plans and Strategies
5 I Key Financials
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Balance Sheet (Million USD) (IFRS)
Financials
Receivables, Inventories and Payables (Million USD)
31/12/2008 31/12/2009
149
58
115
293
19
1.123
19
11
116
208224
89
60
897
1. 123
166
19
567
1.403
58
265
52
376
51
975
1.403
Cash&Cash Equivalents
Trade ReceivablesInventories
Other Current Assets
Current Assets
Non-Current AssetsTOTAL ASSETS
Financial Liabilities
Other Payables
Trade Payables
Short-Term Liabilities
Long-Term Liabilities
Shareholders Equity
TOTAL LIABILITIES
830 836
30/09/2010Cash&Bank Debt (Million USD)
30
167
223206
14
610
8731.483
58
235
56
348
57
1.078
1.483
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30
Financials
2007 2008 2009 Sep09 Sep10 3Q 09 2Q 10 3Q 10
Net Sales 1.671 1.795 1.342 937 1.412 377 470 491
Cost of Goods Sold (-) (1.514) (1.822) 1.269 (872) (1.305) (358) (421) (465)
Gross Profit (Loss) 157 (27) 73 65 106 19 49 26
Gross Profit (Loss) Margin 9,4% -1,5% 5,4% 6,9% 7,5% 5,1% 10,4% 5,3%
Operating Expenses (-) (74) (72) (44) (29) (42) (9) (15) (13)
Other Operating
Income/(Expenses),net (20) (3) (3) 2 (4) 1 (3) (0)
Operating Profit/(Loss) 63 (102) 26 38 61 11 31 13
Financial Income/(Expenses) (11) (20) 16 6 7 5 (6) 12
Profit/(Loss) Before Taxation 52 (122) 41 44 67 16 25 24
Deferred Tax (1) 5 34 (2) (5) 1 4 (5)
Net Profit/(Loss) for the Period 51 (117) 75 42 62 16 29 19
EBITDA 128 (4) 99 89 99 34 39 31
EBITDA Margin 7,7% -0,2% 7,4% 9,5% 7,0% 9,0% 8,4% 6,3%
Income Statement (Million USD) (IFRS )
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PetkimPetkimss TodayToday
31
FITCH RATINGS
FOREIGN
CURRENCY
LONG TERM LONG TERM NATIONAL
June, 2010 BB- (negative) BB- (negative) A (tur) (negative)
May, 2009 BB- (negative) BB- (negative) AA- (tur) (negative)
September, 2008 BB- (stable) BB- (stable) AA- (tur) (stable)
January, 2008 BB (stable) BB (stable) AA (tur) (stable)
June, 2007 BB (stable) BB (stable) AA (tur) (stable)
April, 2007 BB (stable) BB (stable) AA- (tur) (stable)
February, 2006 BB- (stable) BB (stable) AA- (tur) (stable)
DATE
LOCAL CURRENCY
While many petrochemical companies credit ratingswere downgraded all around the world,
Fitchratings affirmed Petkims rating with BB-/negative outlook.
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Corporate Governance Rating
Upgraded to an overall Corporate Governance rating of8,19 from previous one of7,71
A clear sign of a good compliance to CMB Corporate Governance Principles
An indication of imposing necessary policies and measures and confirmation of themanagement activities that are carried out at a high level of quality
Listed on the Istanbul Stock Exchange's prestigious Corporate Governance Index
Committed to improve its performance on Corporate Governance Principles compliance
Sub Categories Weight Grade Shareholders 25 % 8,00Public Disclosure and Transparency 35% 9,04Stakeholders 15% 9,26Board of Directors 25% 6,53
OVERALL 8,19
32
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We welcome your questions, comments and suggestions. Our corporate headquarters office address is:
Petkim Petrochemical Holding Corp. PO. Box.12Aliaa, 35801 zmir/ TURKEY
To contact us with respect to shareholding relations for individual and corporate investors, please call directly or sendan e-mail to
Ms. Fsun UGANFinance ManagerTel :+90 232 616 1240 (Ext:4575)Direct :+90 232 616 6127E-mail :[email protected]
Mr.
afak AYI
I
IAssistant General Manager (Finance)Tel :+90 232 616 1240 (Ext: 2150)Fax :+90 232 616 2297E-mail :[email protected]
Mr. Hayati ZTRK
General ManagerTel :+90 232 616 1240 (Ext:2040)Direct :+90 232 616 2297Fax :+90 232 616 8519E-mail :[email protected]
Also, please visit our web site at www.petkim.com.trfor further information and queries.
Investor Relations
34