INVESTOR PRESENTATION November 2015

Transcription

1 INVESTOR PRESENTATION November 2015

2 GRUPA AZOTY AT A GLANCE ONE OF MAJOR EUROPEAN CHEMICAL PRODUCERS NO. 1 IN POLAND IN FERTILIZERS, POLYAMIDES, OXO PRODUCTS MELAMINE, AND TITANIUM WHITE NO. 2 IN THE EU IN MINERAL FERTILIZERS NO. 3 IN THE EU IN COMPOUND FERTILIZERS GROWTH IN SCALE THROUGH M&A ACTIVITY BALANCED GEOGRAPHICAL PRESENCE GRUPA AZOTY ON BOARDS OF IFA AND FE STABLE FINANCIAL POSITION LISTED ON THE WARSAW STOCK EXCHANGE SINCE 2008 GRUPA AZOTY IN FTSE EMERGING MARKETS AND MSCI INDICES CONTINUED PRESENCE IN THE RESPECT INDEX GRUPA AZOTY AT A GLANCE 2

3 GRUPA AZOTY AT A GLANCE CORE BUSINESS AfriG S.A. Phosphorites Grupa Azoty Police Urea, NPK, NP, NS, Ammonia, TiO 2 ZMPP Port BBM Terminal Fosfory NPK, P Grupa Azoty Puławy AN, UAN, Urea, Melamine, CPL Grupa Azoty Siarkopol Sulfur Grupa Azoty ATT Polymers PA 6 Grupa Azoty S.A. AN, CAN, ASN, AS, CPL, PA 6, POM Compounding Logistics Production Grupa Azoty Kędzierzyn AN, CAN, Urea, OXO, Plasticizers Z. A. Chorzów S.A. NPK, N, P, K GRUPA AZOTY AT A GLANCE 3

4 GRUPA AZOTY AT A GLANCE BROAD PORTFOLIO REVENUES Fertilizers - Agro Plastics 2014 Jan-Sep % 60% 14.7% 13% AN,CAN, NPK, AS, ASN UREA UAN, AMMONIA MINING: SULFUR, PHOSPHORITES POLYAMIDE CAPROLACTAM Chemicals 25.3% 23% OXO PRODUCTS MELAMINE TECHNICAL GRADE UREA Energy 2.0% 2% ELECTRICITY AND HEAT Other 1.6% 2% LABORATORY SERVICES CATALYSTS, OTHER ACTIVITY GRUPA AZOTY AT A GLANCE 4

5 STRONG POSITION IN TARGET MARKETS 90% of revenue derived from sales to EU markets Poland 54% +2% North America 0.3% +0.1% European Union 1 34% -1% Other Europe 1% -1% Asia 5% -0.1% South America 4% +0.1% Jan-Sep 2014 Africa 2% +0.1% Jan-Sep Excluding Poland GRUPA AZOTY AT A GLANCE 5 5

6 BUSINESS

7 GRUPA AZOTY IS AN IMPORTANT PRODUCER IN THE REGION FERTILIZERS No. 1 in compound fertilizers¹ No. 1 in mineral fertilizers² No. 1 in fertilizers containing sulfur No. 1 in nitrogen fertilizers PLASTICS, OXO, PIGMENTS, MELAMINE No. 1 in Polyamides No. 1 in OXO Alcohols and Plasticizers No. 1 in Titanium White No. 1 in Melamine FERTILIZERS No. 3 in compound fertilizers No. 2 in mineral fertilizers PLASTICS, OXO, MELAMINE No. 5 in Plasticizers No. 7 in OXO Alcohols No. 6 in Polyamide 6³ No. 2 in Melamine LARGEST CHEMICAL COMPANIES IN POLAND based on 2014 revenues Anwil Ciech Synthos Notes: ¹ Compound fertilizers in total (AP, NPK, PK); ² Compound fertilizers + nitrogen fertilizers; ³ Among integrated producers BUSINESS 7

8 GAS DIVERSIFICATION PGNIG'S NEW PRICING POLICY The PGNiG Tariff sets a maximum gas price The new discount scheme is linked to quoted market prices of gas NATURAL GAS DEMAND (BCM) Increased pricing differentiation, with prices depending on the volumes and stability of gas consumption over a gas year, reduces diversification of gas sources FROM OUTSIDE THE SYSTEM % 47% GAS PRICES (EUR/MWh) EUR/MWh PGNiG tariff Average natural gas price paid by the Group TTF DA* Source: ICIS. * Day Ahead prices at Title Transfer Facility, a virtual trading point for natural gas in the Netherlands, no transfer costs. BUSINESS 8

9 AGRO - FERTILIZERS REVENUES 2014: 55% EXTENSIVE PORTFOLIO OF FERTILIZERS MANUFACTURER AS UREA AN CAN ASN UAN AP/ NPK/ MIX ACHEMA CAPACITIES YARA (GK) Grupa Azoty Interagro* Agrofert Borealis Fertiberia Jan-Sep 2015: 60% Poland 1 AZOMURES BASF EuroChem EUROCHEM FERTIBERIA GRUPA AZOTY GROWHOW UK NITROGENMUVEK INTERAGRO OCI NITROGEN Eurochem Achema JSC Timac Agro (Groupe Roullier) Azomures S.A. [tt] EU TIMAC AGRO SKW PIESTERITZ YARA Source: Fertilizers Europe *Interagro with partners BUSINESS 9

10 PLASTICS REVENUES Polyamide 6 (PA6) Polyacetal (POM) 2014: 15% Caprolactam Cyclohexanone Jan-Sep 2015: 13% POLYAMIDE 6 APPLICATIONS IN KEY SEGMENTS BASF Lanxess DSM Radici Domo Grupa Azoty Aquafil Poland Julon 1 Rhodia Beaulieu Nylon Ube EU Nurel 5* Nexis Fibers Caffaro FP Savinesti [tt] Other Household appliances Consumer goods Electrical and electronic applications Machine building Films and coatings Automotive % Source: PCI Nylon, YellowBook 2015 *Integrated BUSINESS 10

11 CHEMICALS REVENUES 2014: 25% Melamine OCI Melamine Borealis Group Grupa Azoty Poland 1 Jan-Sep 2015: 23% BASF SE Azomures S.A. EU 3 Plasticizers* [tt] OXO** Exxon Mobil BASF Evonik Polynt Grupa Azoty OXEA Oltchim Perstorp DEZA INEOS [tt] Poland Source: Plasticizers Alkohols 2013 and Plasticizers (UE) 2013 * Production capacities for phthalate plasticizers and terephthalate plasticizers ** Production capacities for 2-EH, N-butanol, isobutanol BUSINESS 1 EU 5 BASF OXEA Oxochimie (j.v. (j.v. of Arkema i INEOS) and INEOS) Perstorp Grupa Azoty Oltchim [tt] 11 Poland 1 EU

12 RAW MATERIALS TO PRODUCTS - GRUPA AZOTY Ilmenite Titanium White Titanium Slag Oxygen Natural Gas Nitrogen Ortoxylene Propylene Methanol Benzene Sulfur Sulfuric Acid Production of Synthesis Gas Urea Napthalene Aldehydes Formalin Maleic Anhydride Phenol Oleum Ammonia UAN Phosphorites Phtalic Anhydride OXO Alcohols Trioxane C-none Mixed Acid Nitric Acid Phosphoric Acid Plasticizers POM Caprolactam Dolomite Stone AS NP Fertilizers NPK / PK Fertilizers PA 6 Ammonium Sulfate CAN Potassium Salt Melamine Compounded Polymers ASN BUSINESS 12

13 STRATEGY

14 WHY IS IT A GOOD IDEA TO INVEST IN GRUPA AZOTY? Grupa Azoty is a long-term investment generating real profits its share price has moved up by more than 450% since the IPO Continuous development through organic growth, operational excellence and M&A activities We actively diversify our sources of key raw materials to increase security of supplies We launch new and invest in existing product lines to enhance their efficiency and improve production quality We constantly enhance our product mix We extend product chains, tailoring our products to customer requirements STRATEGY 14

15 DIVIDEND POLICY The guiding principle behind Grupa Azoty s dividend policy is to make distributions proportionate to the Company s earnings and financial standing The Management Board will recommend to the General Meeting dividend distributions of 40%-60% of the Company s net profit. Any decisions on dividend payment will take account of a number of factors concerning the Company and the Grupa Azoty Group, including business outlook, future profits, cash requirements, financial standing, growth plans, and legal requirements. STRATEGY Dividend for the year Net profit (PLN '000) Dividend amount (PLN '000) Dividend per share Payout ratio ,935 39,899 PLN % , ,793 PLN % ,117 19,839 PLN % Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN

16 REMITS OF THE GRUPA AZOTY MANAGEMENT BOARD MEMBERS President of the Management Board P. Jarczewski Vice-President of the Management Board A. Skolmowski Vice-President of the Management Board W. Szczypiński Vice-President of the Management Board K. Jałosiński Vice-President of the Management Board M. Kapłucha Vice-President of the Management Board M. Rybak Member of the Management Board A. Kopeć Corporate Affairs and HR Finance Tarnów Police Supply Chain Puławy Social Dialogue Audit, Risks and Compliance Planning and Controlling Plastics Feedstock Supply Integration and Maritime Logistics Investments Technical Safety and Environmental Protection Communication IT Organic Synthesis Strategy and Development Agro Business IR Production Integration STRATEGY 16

17 STRATEGY CORPORATE OBJECTIVES VISION FOR GRUPA AZOTY Grupa Azoty to deliver industry-leading rates of return for shareholders Grupa Azoty to remain one of the three leading players in the European fertilizer market Grupa Azoty to join the blue-chip index of the Warsaw Stock Exchange 2020 ROCE 14% 2020 EBITDA MARGIN > 14% 2020 EBIT MARGIN > 8% Organic growth Operational excellence Mergers and acquisitions PLN 7bn to be spent on organic growth Consolidating a top-three position in fertilizer manufacturing in EU STRATEGY 17

18 ORGANIC GROWTH PLN 7bn CAPEX PROJECTS 32% 30% 19% 11% 4% 2% 2% CORPORATE PROJECTS FERTILIZERS ENERGY PLASTICS OXOPLASTS MELAMINE PIGMENTS Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN STRATEGY 18

19 PIPELINE OF STRATEGIC INVESTMENT PROJECTS PLN 7bn 68 investment projects GRUPA AZOTY POLICE Propylene production plant PLN 1.7bn (2019) Upgrade of the ammonia unit PLN 156m (by 2016) Flue gas purification unit and upgrade of the EC II CHP plant PLN 164m (by 2016) GRUPA AZOTY PUŁAWY Puławy Power Plant PLN 1,125m (2019) Extension of nitric acid unit PLN 695m (2021) Nitrate mechanical granulation plant two lines PLN 385m (line 1 by 2018, line 2 by 2020) GRUPA AZOTY KĘDZIERZYN CHP Plant PLN 600m (2019) UAN production unit PLN 29.5m (2015) GRUPA AZOTY S.A. Polyamide plant PLN 320m (2016) Mineral fertilizer granulation plant PLN 140m (2016) Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN STRATEGY 19

20 OPERATIONAL EXCELLENCE PRODUCTION PRODUKCJA ENERGY INTENSITY REPAIRS AND OVERHAULS PROCUREMENT AND LOGISTICS SUPPORT FUNCTIONS Process output APC Cost of Quality TOP 60 White Energy Best practices for generation and transmission Best practices for energy use in production processes KPIs in repair/ overhaul contracts TPM Preventive maintenance Optimisation of outbound logistics Best procurement practices across categories Commitment building programme Periodic evaluation system Objective-based incentive system Flexible working hours Operational control Purpose of the Azoty PRO scheme: PLN 300m plus in annual benefits after completion of the project STRATEGY 20

21 MERGERS AND ACQUISITIONS TARGET SELECTION PROCESS 1 Grupa Azoty business tree 2 Long list of potential targets 3 Business segment maps and matrices 4 Short list of potential targets 5 Company profiles Start of analysis ca. 2,000 entities over 100 entities over 50 entities top 10 entities ACQUISITIONS SINCE controlling interest in ZA Puławy (up to 95.98%) 85% interest in Siarkopol 55% interest in AIG, Senegal (GA Police) % interest in ZA Puławy in the first tender offer % interest in ATT Polymers GmbH 53% interest in ZAK % interest in ZCh Police 41% interest in ZAK Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN Consolidated revenues PLN bn STRATEGY 21

22 FINANCIAL HIGHLIGHTS

23 REPORTED FINANCIAL DATA PLNm Jan-Sep 2014 Jan-Sep 2015 Revenues 9,821 9,898 7,342 7,521 EBIT EBITDA 1, Net profit Equity 6,271 6,488 6,488 6,998 Net debt STRUCTURE OF THE GROUP'S CONSOLIDATED REVENUES IN % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Grupa Azoty S.A. Grupa Azoty ZAK Group Grupa Azoty POLICE Group Grupa Azoty PUŁAWY Group Other Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN FINANCIAL HIGHLIGHTS 23

24 PERFORMANCE BY SEGMENT SEGMENT (PLNm) REVENUE EBITDA REVENUE EBITDA Jan Sep 2014 Jan Sep 2015 Jan Sep 2014 Jan Sep 2015 Agro Fertilizers 1,210 1, ,066 4, Plastics , Chemicals ,915 1, Energy Other EBITDA positive effect on EBITDA negative effect on EBITDA ,001 Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN FINANCIAL HIGHLIGHTS 24

25 GRUPA AZOTY GROUP: STATEMENT OF FINANCIAL POSITION Ratios 2014 Profitability ratios Jan- Sep 2015 EBIT margin (%) EBITDA margin (%) ROCE (%) ROE (%) Liquidity ratios Debt ratios Current ratio Total debt ratio (%) Net debt (PLNm) Debt to equity ratio (%) Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN (PLNm) Non-current assets Current assets Dec Jan-Sep ,781 7,020 3,167 3,434 incl. cash and cash equivalents Total assets 9,948 10,454 (PLNm) Dec Jan- Sep 2015 Equity 6,488 6,998 Liabilities 3,460 3,455 incl. borrowings 986 1,083 other financial liabilities Total equity and liabilities ,948 10,454 FINANCIAL HIGHLIGHTS 25

26 COST STRUCTURE RAW MATERIALS % Lower costs of raw materials and consumables attributable to lower prices of energy resources and petroleum raw materials, as well as procurement synergies Natural gas % 40% Propylene Phosphate * 2014 Raw material and consumables used Services Labour costs Depreciation and amortisation Other Pro-forma data, including Grupa Azoty PUŁAWY and Grupa Azoty SIARKOPOL 7% 7% 5% 5% 4% 9% Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN Potassium salt Phenol Coal Electricity Other FINANCIAL HIGHLIGHTS 26

27 2015 EXTERNAL FACTORS PRICING TRENDS % -21% % -17% % % 200-3% USD/t DAP Ammonia Urea AS 0 EUR/t CPL PA6 Benzene IMPORTS TO EU (28) '000 tonnes Urea DAP NPK AS AN CAN UAN Jan Aug 2014 Jan Aug 2015 Source: EUROSTAT as at October 29th FINANCIAL HIGHLIGHTS 27

28 KEY RATIOS SINCE IPO 2008, QUARTERLY* REVENUE AND NET PROFIT (PLNm) Q Q Q Revenue Q Q Net profit (right axis) Q Q EBITDA AND NET DEBT (PLNm) *Grupa Azoty Group FINANCIAL HIGHLIGHTS Q Q Q Net debt 28 Q EBITDA 2012 Q Q Q Exchange rate s as at November18th 2015 EUR 1 = PLN USD 1 = PLN

29 DISCLAIMER The information contained herein has been prepared by the Grupa Azoty Group ( the Group ) solely for the purpose of presentation to investors ( the Presentation ). By participating in the meeting at which this Presentation is given or by referring to this Presentation you agree to the restrictions and disclaimers presented below. This Presentation does not constitute, or form any part of, and should not be considered as, an offer to sell or invitation to subscribe for, or as a guarantee of purchase or other acquisition of any securities of any of the Group companies. Neither this presentation nor any part hereof may form the basis of, or be relied upon in connection with, any subscription for or acquisition of any securities of the Group companies. Neither this Presentation nor any part hereof may form the basis of, or be relied upon in connection with, any contract or commitment or investment decision relating to any securities of the Group companies. This Presentation does not constitute a recommendation regarding any securities of the Group companies. No statement or assurance, express or implied, has been made by or on behalf of the Group or any of its shareholders, members of its bodies, officers, employees, agents or advisers or any other person as to the accuracy, completeness or reliability of the information or opinions contained in this Presentation. The discussion of various subjects in this Presentation may include forward-looking statements. Forward-looking statements are different from statements of historical fact. They can be identified by the use of such words as "expect", "intend", "plan", "believe", "anticipate", "will", "aim", "can", "would", "could", "continue" or similar expressions. Forward-looking statements include statements about the financial performance, business strategy, plans and objectives of the Group (including development plans relating to the Group). All forward-looking statements contained in this Presentation relate to matters involving known and unknown risks, issues that are impossible to predict, and other factors. Actual results and achievements of the Group may materially differ from those given in past declarations, and from the Company s past performance and achievements. Forward-looking statements are made based on various assumptions about future events, including assumptions regarding the current and future business strategies of the Group and its future business environment. Although the Group believes that its estimates and assumptions are reasonable, they may prove to be incorrect. The information, opinions and forward-looking statements contained herein are valid only on the date of this Presentation and are subject to change without notice. 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