INVESTOR PRESENTATION March 2015

Transcription

1 INVESTOR PRESENTATION March 2015

2 AGENDA GRUPA AZOTY AT A GLANCE BUSINESS INVESTMENT PROJECT ECONOMY AND NATURAL GAS SECTOR IN POLAND AGRICULTURE IN POLAND STRATEGY FINANCIAL HIGHLIGHTS EDUCATION AND SUPPORT 2

3 3 GRUPA AZOTY AT A GLANCE

4 GRUPA AZOTY AT A GLANCE ONE OF MAJOR EUROPEAN CHEMICAL PRODUCER NO. 1 IN FERTILIZERS, POLYAMIDE, OXO PRODUCTS MELAMINE, TITANIUM WHITE IN POLAND NO. 2 IN MINERAL FERTILIZERS IN THE EU NO. 3 IN COMPOUND FERTILIZERS IN THE EU GROWTH IN SCALE THROUGH M&A ACTIVITY BALANCED GEOGRAPHICAL PRESENCE EXPERIENCED MANAGEMENT TEAM STABLE FINANCIAL POSITION LISTED ON WARSAW STOCK EXCHANGE SINCE 2008 GRUPA AZOTY IN FTSE EMERGING MARKETS CONTINUED PRESENCE IN THE RESPECT INDEX PRESENCE IN THE MSCI INDICES GRUPA AZOTY AT A GLANCE 4

5 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 Navitrans Logistics Grupa Azoty Puławy AN, UAN, Urea, Melamine, CPL Grupa Azoty Siarkopol Sulphur Grupa Azoty ATT Polymers PA 6 Grupa Azoty S.A. AN, CAN, ASN, AS, CPL, PA 6, POM Compounding Grupa Azoty Folie sp. z o.o. Grupa Azoty Compounding sp. z o.o. Logistics Production Grupa Azoty ZAK S.A. AN, CAN, Urea, OXO, Plasticizers Z. A. Chorzów S.A. NPK, N, P, K GRUPA AZOTY AT A GLANCE 5

6 GRUPA AZOTY AT A GLANCE WIDE PORTFOLIO 2014 REVENUES Fertilizers - Agro Plastics 56% 15% AN,CAN, NPK, AS, ASN UREA UAN, AMMONIA MINING : SULPHUR, PHOSPHATES POLYAMIDE CAPROLACTAM Chemicals Energy 25% 2% OXO PRODUCTS MELAMINE UREA TECHNICAL GRADE ELECTRICITY AND HEAT Others 2% LABORATORY SERVICES CATALYSTS, OTHER ACTIVITY GRUPA AZOTY AT A GLANCE 6

7 STRONG INTERNATIONAL POSITION Almost 90% of revenues derived from sales to EU markets Poland 56% -3% North America 1% -0.5% European Union 1 32% +2% Non-EU countries 2% +0.4% Asia 6% +0.04% South America 4% -0,3% Africa 1% +1% GRUPA AZOTY AT A GLANCE 1 Excluding Poland 2 G.A. Puławy from 19th January 2013, Siarkopol from 7 October 31st

8 KEY DEVELOPMENTS IN 2014 GRUPA AZOTY PLACED ON THE LIST OF THE POLISH STATE TREASURY STRATEGIC ENTERPRISES GRUPA AZOTY REPRESENTED ON GOVERNING BODIES OF INTERNATIONAL FERTILIZERS ASSOCIATION AND FERTILIZERS EUROPE BUILDING OF THE VALUE OF GRUPA AZOTY OPERATIONALIZATION OF THE STRATEGY FOR IMPLEMENTATION OF AN OPERATIONAL EXCELENCE PROGRAMME KEY INVESTMENT PROJECTS: POLYAMIDE 6 PLANT GRANULATION PLANT II POWERPLANT - KĘDZIERZYN (I PART) the exchange rate as at Dec 31st 2014 EUR 1 = PLN 4,2623 USD 1 = PLN 3,5072 GRUPA AZOTY AT A GLANCE 8

9 BUSINESS

10 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 sulphur No. 1 in nitrogen fertilizers PLASTICS, OXO, PIGMENTS, MELAMINE No. 1 in Polyamide 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. 5 in Polyamide 6³ No. 2 in Melamine MAIN CHEMICAL COMPANIES IN POLAND Anwil Ciech Synthos Notes: ¹ Compound fertilizers in total (AP, NPK, PK); ² Compound fertilizers + nitrogen fertilizers; ³ Among integrated producers BUSINESS 10

11 GAS DIVERSIFICATION methane-rich natural gas (E), high nitrogen natural gas (Lw), (Ls) transit gas pipeline local sources Mallnow Lasów NATURAL GAS DEMAND (BCM) Q2014 2,1 0,57 FROM OUTSIDE THE SYSTEM ,4% 38,6% 4Q2013 4Q % 46,1% USD/MBTU Source: ICIS BUSINESS PGNiG Tariff Average natural gas price paid by the Group Heren TTF 11

12 Planed optimization ENERGY CONSUMPTION FOR AMMONIA PRODUCTION Net energy consumption (GJ/tNH3) 45 Energy consumption (GJ/tNH3) GA ZAP S.A. IInd line 33,4 40 GA ZAP S.A. Ist line 34, % -19 % 25 GA S.A. GA ZAK S.A. 33,4 32, ,5 36, GA ZCh Police S.A. 36, Russia Saudi Arabia Older instalation in Azoty Group Planed New industrial optymization plants Theoretical efficiency Grupa Azoty ZAK ~2,4 GJ/t Grupa Azoty PUŁAWY Grupa Azoty S.A. ~1GJ/t ~1GJ/t AMMONIA Total production capacity: 2.35 mt, inclusive of captive use - about 90% Grupa Azoty Police ~2-2,5 GJ/t Based on the Fertilizers Europe BUSINESS 12

13 FERTILIZERS REVENUES 2013: 57% EXTENSIVE PORTFOLIO OF FERTILIZERS MANUFACTURER AS UREA AN CAN ASN UAN AP/NP K/ MIX ACHEMA AZOMURES BASF Q3 2014: 55% EUROCHEM CAPACITIES (JAN 2014) FERTIBERIA YARA GRUPA AZOTY (GK) Grupa Azoty (GK) Borealis GPN (GK) FERTIBERIA Poland GROWHOW UK JSC Grodno Azot 1 ACHEMA NITROGENMUVEK AZOMURES EU OCI NITROGEN Eurochem (Antwerpen) INA PETROKEMIJA 2 SKW PIESTERITZ OCI Nitrogen YARA [tt] Source: Fertilizer Europe BUSINESS 13

14 PLASTICS REVENUES Polyamide 6 (PA6) Polyacetal (POM) 2014: 15% Caprolactam Cykloheksanon 2013: 15% POLYAMIDE 6 BASF DOMO (Xentrys) Kubyshevazot Togliatti DSM Eng. Plastics Lanxess Radici Fibers SpA Grupa Azot JSC Grodno Khimvolokno Aquafil SpA Arco Beaulieu-Nylon JSC Kursk Khim. Julon JSC Khimvol. Amtel Kuzbas Shchekino JSC Khim Others [tt] Poland 1 Europe 5* KEY SEGMENT APPLICATION Other Household appliances Consumer goods Electrical and electronic applications Machine building Films and coatings Automotive % * Integrated Source: CMAI, 2012 BUSINESS 14

15 CHEMICALS REVENUES 2013: 24% 2014: 25% Melamine OCI Melamine Grupa Azoty Borealis Agrolinz Melamine Deutschland GmbH BASF SE Borealis Agrolinz Melamine GmbH Azomures S.A. Poland 1 EU 2 Plasticizers * OXO** [tt] Exxon Mobil BASF Evonik Polynt Grupa Azoty Poland 1 BASF OXEA Oxochimie (j.v. Arkema i INEOS) Poland 1 OXEA Oltchim Perstorp DEZA INEOS [tt] EU Perstorp Grupa Azoty Oltchim [tt] EU 5 * Production capacities of phthalate plasticisers and terephthlate plasticisers ** Production capacities of 2-EH, N-butanol, isobutanol Source: Plasticizers Alkohols 2013 i Plasticizers (UE) 2013 BUSINESS 15

16 INCREASING PRODUCTION CAPACITY Planned CAPEX of PLN 1.35bn AMMONIA PRODUCTION Balancing ammonia production within the Group; improving energy efficiency in ammonia production MECHANICAL GRANULATION improving quality of nitrate fertilizers; expanding fertilizer product mix 2,357 2,422 2, ,400* 1,075 1, RSM UREA AMMONIUM NITRATE SOLUTION Increasing production capacity and expanding the RSM and RSM S logistics network 1,165 1, PHOSPHORIC ACID PRODUCTION Increasing production capacity; improving quality; reducing phosphogypsum volumes Polyamides balancing caprolactam production within the Group for internal polyamide production OXOPLAST OT increasing production capacity; expanding product mix * Considering CAN production in Grupa Azoty PUŁAWY Strategy implementation

17 STRATEGY

18 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 gone up by more than 295% since the IPO. Constant development by organic growth, operational excellence and mergers and acquisitions. We actively diversify our sources of key raw materials to increase the security of supplies. We introduce new and invest in existing product lines to boost their effectiveness and improve production quality. We constantly enhance our product mix. We extend product chains, tailoring our products to meet customer requirements. Dividend policy: the Management Board will recommend to the General Meeting dividend distributions between 40% and 60% of the Company s separate net profit. Dividend for the year Net profit (PLN '000) Dividend amount (PLN '000) Dividend per share % of net profit allocated to dividend ,935 39,899 PLN % , ,793 PLN % ,117 19,839 PLN % the exchange rate as at Dec 31st 2014 EUR 1 = PLN 4,2623 USD 1 = PLN 3,5072 STRATEGY 18

19 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 Auditing, risks and compliance Planning and controlling Plastics Feedstock Supply Integration and Maritime Logistics Logistics support service Investments Technical safety and environmental protection Communications IT Organic Synthesis Strategy and development Engineering support service Infrastructure service Agro Business IR Production integration Business service Energy service STRATEGY 19

20 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 STRATEGY 20

21 ORGANIC GROWTH PLN 7bn CAPEX PROJECTS 32% 30% 19% 11% 4% 2% 2% CORPORATE PROJECTS FERTILIZERS ENERGY PLASTICS OXOPLASTS MELAMINE PIGMENTS the exchange rate as at Dec 31st 2014 EUR 1 = PLN 4,2623 USD 1 = PLN 3,5072 STRATEGY 21

22 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 after completion of the project STRATEGY 22

23 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 public tender offer 9,8 9, % interest in ATT Polymers GmbH 53% interest in ZAK 1,3 1,4 1, % interest in ZCh Police 41% interest in ZAK 1,9 5,3 7, the exchange rate as at Dec 31st 2014 EUR 1 = PLN 4,2623 USD 1 = PLN 3,5072 Consolidated revenues PLN bn STRATEGY 23

24 FINANCIAL HIGHLIGHTS

25 REPORTED FINANCIAL DATA PERFORMANCE BY SEGMENT PLNm SEGMENT (PLNm) REVENUES 2013 REVENUES 2014 EBITDA 2013 EBITDA 2014 Revenues 9,821 9,989 Agro Fertilizers 5,565 5, EBIT EBITDA* Net profit Equity 6,630 6,781 Net debt STRUCTURE OF THE GROUP'S CONSOLIDATED REVENUES % 20% 40% 60% 80% 100% Grupa Azoty S.A. Grupa Azoty ZAK Group Grupa Azoty POLICE Group the exchange rate as at Dec 31st 2014 EUR 1 = PLN 4,2623 USD 1 = PLN 3,5072 Grupa Azoty PUŁAWY Group Plastics 1,467 1, Chemicals 2,385 2, Energy Other PLNm * Adjusted EBITDA BRIDGE positive effect on EBITDA negative effect on EBITDA FINANCIAL HIGHLIGHTS 25

26 GRUPA AZOTY GROUP: STATEMENT OF FINANCIAL POSITION Ratios Profitability ratios EBIT margin (%) EBITDA margin (%) ROCE (%) (PLNm) Non-current assets Current assets including cash and cash equivalents Change 6,630 6,781 2% 3,321 3,167 (5) (22) ROE (%) Liquidity ratios Current ratio Debt ratios Total debt ratio (%) Net debt (PLNm) Debt to equity ratio (%) Total assets 9,951 9,948 (PLNm) Change Equity 6,271 6,488 3% Liabilities 3,680 3,460-6% incl. borrowings 1, (20) other financial liabilities Total equity and liabilities % 9,951 9,948 FINANCIAL HIGHLIGHTS 26

27 COST STRUCTURE RAW MATERIALS % Lower costs of raw material and consumables attributable to lower prices of energy resources and petroleum raw materials, as well as procurement synergies Natural gas * 2014 Raw material and consumables used Services Labour costs Depreciation and amortisation Other 23% 7% 7% 5% 5% 4% 9% 40% Propylene Phosphate Potassium salt Phenol Coal Electricity Other Data proforma, including Siarkopol's purchases from January FINANCIAL HIGHLIGHTS 27

28 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Tys. ton Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q KEY RATIOS SINCE THE 2008 IPO - QUARTERLY BASIS* EXTERNAL FACTORS REVENUES AND NET PROFIT PRICES % 3% -5% % + 1% +1% 0.3% Revenue Net profit DAP AMMONIA UREA AS CPL PA6 BENZEN EBITDA AND NET DEBT IMPORT TO UE(28) Net debt EBITDA UREA DAP NPK AS AN CAN RSM * Grupa Azoty Group FINANCIAL HIGHLIGHTS 28 source: EUROSTAT 2013 Jan-Nov 2014

29 DISCLAIMER The information contained herein has been prepared by Grupa Azoty ( 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 as an offer to subscribe for, or as a purchase guarantee to acquire in any other way, any securities of any of the Group companies. Neither this presentation nor any part thereof may form the basis of, or be relied upon in connection with, any subscription for any securities of the Group companies, or their acquisition. 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 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 subjects discussed in this Presentation may constitute forward-looking statements. Forward-looking statements are different from statements of historical fact. Statements containing such words as "expects", "intends", "plans", "believes", "anticipates", "will", "aims", "can", "would", "could", "continues" or similar are determinants of such forward-looking statements. 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 the Company s past performance and achievements. Forward-looking statements are made based on various assumptions about future events, including numerous 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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