INVESTOR PRESENTATION September 2017

Transcription

1 INVESTOR PRESENTATION September 2017

2 GRUPA AZOTY AT A GLANCE AMONG THE LARGEST CHEMICAL COMPANIES IN THE EU LARGEST CHEMICAL GROUP IN POLAND NO. 2 IN THE EU IN MINERAL FERTILIZERS NO. 3 IN THE EU IN COMPOUND FERTILIZERS STRONG GROUP BUILT THROUGH ACQUISITIONS BALANCED GEOGRAPHICAL PRESENCE MEMBER OF TRADE ASSOCIATIONS STABLE FINANCIAL POSITION LISTED ON WSE SINCE 2008 FEATURED IN MSCI AND FTSE INDICES RESPECT INDEX FTSE4GOOD EM INDEX GRUPA AZOTY AT A GLANCE 2

3 SHAREHOLDING STRUCTURE Others 26,10% EBRD 2,87% TFI PZU S.A. 8,60% Opansa Enterprises Limited 9,50% ING OFE (Open Pension Fund) 9,96% Norica indirectly 19,47% Rainbee Holdings Limited 9,90% State Treasury 33,00% Norica 0,07% Latest notification 28th June 2017 GRUPA AZOTY AT A GLANCE 3

4 DIVISION OF RESPONSIBILITIES AMONG MANAGEMENT BOARD MEMBERS President of the Management Board W. Wardacki Vice President of the Management Board P. Łapiński Vice President of the Management Board W. Szczypiński Vice President of the Management Board J. Rojek Vice President of the Management Board T. Hinc Vice President of the Management Board G. Kądzielawski Member of the Management Board A. Kopeć Management and HR Finance Director General Grupa Azoty S.A. Investments Logistics Infrastructure Production assets Audit and risk Planning and controlling Agro Segment Development strategy Procurement strategy Research and development Technical safety and infrastructure Communication IT Plastics Segment Strategic and technical procurement Environmental protection CSR Investor relations Organic Synthesis Segment Social dialogue President of the Management Board Grupa Azoty POLICE Production integration GRUPA AZOTY AT A GLANCE 4

5 ACQUISITIONS SINCE controlling interest in Puławy (up to 95.98%) 85% interest in Siarkopol (98.82% in 2017)* 55% interest in AIG, Senegal (GA Police) % interest in Puławy in the first tender offer % interest in Police 41% interest in Kędzierzyn % interest in ATT Polymers GmbH 53% interest in Kędzierzyn e Consolidated revenues PLN bn * Up to 98.82% in 2017 due to the acquisition of employee shares GRUPA AZOTY AT A GLANCE 5 Exchange rates as at Sept, 7th 2017 EUR 1 = PLN USD 1 = PLN

6 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, AS, 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, UAN Plasticizers, Z. A. Chorzów S.A. NPK, N, P, K GRUPA AZOTY AT A GLANCE 6

7 BUSINESS

8 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. 5 in OXO Alcohols No. 5 in Polyamide 6³ No. 3 in Melamine LARGEST CHEMICAL COMPANIES IN POLAND based on 2016 revenues Anwil Ciech Synthos Notes: ¹ Compound fertilizers in total (AP, NPK, PK); ² Compound fertilizers + nitrogen fertilizers; ³ Among integrated producers BUSINESS 8

9 BROAD PRODUCT PORTFOLIO SEGMENTS BY SHARE IN 2016 REVENUE PRODUCTS APPLICATIONS AND USE FERTILIZERS 57% AN, CAN, NPK, AS, ASN UREA UAN, 57% AMMONIA SULFUR MINING 55% IN AGRICULTURE TO INCREASE HARVEST VOLUMES AND QUALITY CHEMICALS 26% OXO PRODUCTS MELAMINE, 12% PIGMENTS TECHNICAL-GRADE UREA AUTOMOTIVE, CONSTRUCTION, FOIL AND COATING, HOUSEHOLD APPLIANCES, FOOD PROCESSING AND TEXTILE INDUSTRIES PLASTICS 12% POLYAMIDE CAPROLACTAM PLASTICS AND AUTOMOTIVE INDUSTRIES ENERGY OTHER 3% 2% ELECTRICITY AND HEAT CATALYSTS, LABORATORY SERVICES, OTHER OWN CONSUMPTION, SALES OF ELECTRICITY AND HEATING WATER TO LOCAL USERS CATALYST PRODUCTION, SUPPORT SERVICES, LABORATORIES LOGISTICS, MANAGEMENT, ENVIRONMENTAL PROTECTION BUSINESS 9

10 REGIONAL STRUCTURE OF SEGMENTS GEOGRAFIC STRUCTURE IN 2016 North America 0.6% 12% 9% 0% 2% European Union 1 33% 0% 32% 23% 45% 0% Other Europe 2% 0% 64% 3% 26% 7% Asia 4% 2% 8% 90% Poland 57% 77% 5% 3% 2% 20% 70% South America 2% 1% 0% 2% Africa 2% 0% 0% 81% 17% 2% 97% Agro Fertilizers Plastics Chemicals Energy Other Activities 1 Excluding Poland BUSINESS 10 10

11 AGRO - FERTILIZERS (PLNm) H2016 1H2017 Change H/H EXTENSIVE PORTFOLIO OF FERTILIZERS Segment revenue including: Nitrogen fertilizers, and ammonia Compound fertilizers CAPACITIES YARA Grupa Azoty % % % EBITDA % EBITDA margin 16% 12% 18% 14% -4 p.p. MANUFACTURER AS UREA AN CAN ASN UAN YARA Grupa Azoty Agrofert Borealis Fertiberia Eurochem AP/ NPK/ MIX Agrofert Borealis Fertiberia POLAND 1 Achema JSC Timac Agro Eurochem Achema JSC Timac Agro EU 2 Azomures Azomures [tt] Source: Fertilizers Europe BUSINESS 11

12 STRATEGY FOR THE AGRO FERTILIZERS SEGMENT TARNÓW Granulation Plant II 1200 t/d STRATEGIC INITIATIVES Ongoing investment projects: New fertilizer production unit in Puławy Completion of granulation plant project in Tarnów Optimisation of production processes Extending the value chain towards specialised products PUŁAWY Nitric acid unit 1000 t/d Neutralisation unit 1300 t/d Fertilizers production line 600 t/d Entering the market of services for precision agriculture Reorganisation of trade and distribution Adapting the product mix to customer expectations Taking up M&A opportunities as they arise BUSINESS 12

13 CHEMICALS (PLNm) H2016 1H2017 Change H/H MELAMINE Segment revenue including: % OCI Melamine OXO alcohols % Plasticizers % Urea (technical grade) % Grupa Borealis Grupa Azoty Poland 1 Melamine % Titanium white % EBITDA % EBITDA margin 6% 12% 15% 12% -3 pp. PLASTICIZERS* BASF SE Azomures S.A. [tt] OXO** EU 3 ExxonMobil BASF BASF Evonik Polynt Grupa Azoty Poland 1 Oxea Group Oxochimie Poland 1 OXEA GROUP Oltchim SA DEZA Perstorp Oxo AB Boryszew S.A. [tt] EU Perstorp Oxo AB Grupa Azoty Oltchim SA [tt] EU 5 * Production capacities for phthalate plasticizers and terephthalate plasticizers ** Production capacities for 2-EH, N-butanol, isobutanol Source: Plasticizers Alkohols 2013 and Plasticizers (UE) 2013 BUSINESS 13

14 STRATEGY FOR THE CHEMICALS SEGMENT PRODUCTION CAPACITIES [tt] STRATEGIC INITIATIVES Ongoing investment projects: R&D work on extension of the product chain, with particular focus on polyesters and non-phthalate plasticizers Melamine Puławy Titanium white Police OXO alcohols Kędzierzyn Optimisation of production processes Development of specialist esters Development of the catalyst segment Developing new masterbatch applications BUSINESS 14

15 PLASTICS (PLNm) H2016 1H2017 Change H/H Segment revenue, including: % Polyamide 6 (PA6) Polyamide % Caprolactam % Polyacetal (POM) Caprolactam EBITDA % EBITDA margin -1% -3% -4% 16% 20 p.proc. POLYAMIDE 6 BASF* Lanxess* DSM* Radici Domo* Grupa Azoty* Aquafil* Julon* Rhodia Beaulieu Nylon Ube* Nurel Nexis Fibers Caffaro FP Savinesti [tt] Source: PCI Nylon, YellowBook 2015 * Integrated BUSINESS Poland EU 5* 15 APPLICATIONS IN KEY SEGMENTS % Automotive Films and coatings Machine building Electrical and electronic applications Consumer goods Household appliances Other

16 STRATEGY FOR THE PLASTICS SEGMENT PA6 PRODUCTION CAPACITIES [tt] STRATEGIC INITIATIVES Guben Tarnów % Ongoing investment projects: - Construction of new Polyamide Unit in Tarnów - Processing of caprolactam into PA6 Intensive development of high-margin compounds 40% increase in PA6 production capacities Balancing caprolactam production volume within the Grupa Azoty Group Entering new markets with highly specialised plastics BUSINESS 16

17 STRATEGY

18 STRATEGIC GROWTH DIRECTIONS Complete the Group consolidation process 1. Reinforce leadership in agricultural solutions in Europe 2. Our mission Create value for the Company and the national economy by delivering safe, useful and innovation-driven chemical products Our vision Strengthen the second operating pillar by expanding non- 3.fertilizer business Develop and implement innovations to drive growth of the 4. chemical industry Deploy state-of-the-art and comprehensive chemical industry solutions that meet stakeholder expectations STRATEGY 5

19 FINANCIAL STRATEGY CELE KORPORACYJNE EBIT MARGIN 8% EBITDA MARGIN 14% DIVIDENT PAYOUT <60% ROCE 10% ROE MARGIN 10% STRATEGY 19

20 DIVIDENT POLICY Dividend for the year Net profit (PLN '000) Dividend amount (PLN '000) Dividend per share Dividend payout ratio ,935 39,899 PLN % , ,793 PLN % ,117 19,839 PLN % ,055 83,324 PLN % ,775 78,364 PLN % With the execution of ambitious investment projects in mind, which would support Grupa Azoty s business growth and ensure the highest level of longterm financial security, the Company decided not to set a lower limit for the dividend payout ratio, and to maintain the upper limit at 60%. Our ambition is to maintain dividend payout close to the upper limit, while ensuring financial security and consistent implementation of other elements of our strategy STRATEGY 20

21 INVESTMENTSGANIC GROWTH OPERATONALIZATION bn PLN New CHP plant at Kędzierzyn phase 1 (PLNm) H2017 CAPITAL EXPENDITURES INCLUDING: GROWTH CAPEX Pulgran/PulgranS at Puławy MAINTENANCE MANDATORY PURCHASE OF FINISHED GOODS CAPEX bn PLN Upgrade of the ammonia unit at Police Mechanical granulation II at Tarnów INWESTMENTS 21

22 FINANCIAL HIGHLIGHTS

23 GRUPA AZOTY GROUP: FINANCIAL HIGHLIGHTS ANNUAL RESULTS SEMI-ANNUAL RESULTS (PLNm) ** /2015 1H2016 1H2017 H/H Revenue EBIT EBIT margin EBITDA 9,821 9,898 10,008 8,956-11% % 7% 3% 8% 5% - 1, ,309 1,006-23% EBITDA margin 13% 8% 13% 11% - Net profit % % % 9,4% 9,1% % 15% 14,7% % 12.7% 8.3% 13.1% 11.2% EBITDA 15,0% 14.7% EBITDA (adjusted)* EBITDA margin (PLNm) H2016 1H2017 * In 2013 adjusted for gain on bargin purchase of Grupa Azoty PUŁAWY, Grupy Azoty SIARKOPOL, AIG and impairment loss on the polyoxymethylene plant. In 2014 adjusted for impairment loss on the phthalic anhydride unit recognised. In 2015 adjusted for impairment loss on the benzene derived c-non production unit, fat processing plant, and carbon disulfide plant In 2016 adjusted for estimated impairment loss recognised by AIG, impairment loss on the AIG field and fat processing plant. In fat processing plant. ** Restated following application of uniform accounting policies across Grupa Azoty (see Section 2.2.c of the Supplementary information to the financial statements) FINANCIAL HIGHLIGHTS 23

24 GRUPA AZOTY GROUP REVENUE, QUARTERLY (PLNm) REVENUE AND NET PROFIT Revenue Net profit (right axis) EBITDA EBITDA FINANCIAL HIGHLIGHTS 24

25 GRUPA AZOTY GROUP FINANCING SOURCES AT JUNE 30TH 2017 FINANCING STRUCTURE AVAILABLE FUNDS 10% 9% (PLNm) 81% Corporate credit facilities Overdraft and multi-purpose facilities 923 RATIOS 1H2016 1H2017 Net debt (PLNm) month net debt/ebitda (ratio) FINANCIAL HIGHLIGHTS 25

26 RAW MATERIALS RAW MATERIALS USED IN 2016Y BY GRUPA AZOTY NATURAL GAS PRICES 30,0 EUR/MWh 25,0 20,0 Propylene 6% Coal 5% Benzene 4% Natural gas 32% 15,0 10,0 Q Q Q Q Q Q Q Q Q Q PGNiG tariff TTF DA GPL DA net of transmission costs Phenol 6% Phosphate rock 6% Potassium chloride 8% Electricity 9% Other 24% ELECTRICITY PRICES 180,0 170,0 160,0 150,0 140,0 PLN/MWh Q Q Q Q Q Q Q Q Q Q IRDN COAL PRICES 90,0 80,0 70,0 60,0 50,0 USD/t 40,0 Q Q Q Q Q Q Q Q Q Q ARA FINANCIAL HIGHLIGHTS 26

27 STOCK PRICE Growth from Jun : `239% High (Dec ) PLN Low (Feb ) PLN WIG Grupa Azoty S.A. 27

28 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. Unless required by law, the Group and its advisors are not obliged to publish any updates or modify any information, data or statements contained in this Presentation in the event of a change to the Group s strategy or plans or the occurrence of any facts or circumstances that will have an effect on the Group s strategy or plans. Please note that the only reliable source of data on the Group's and Group companies financial performance, as well as forecasts, events and indicators relating to the Group and the Group companies, are the current and periodic reports released by the Group companies to comply with the applicable disclosure requirements under Polish law. Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person shall be liable for any loss arising due to the use of this Presentation or its contents, or otherwise in connection with this Presentation. Neither the Group nor any of its shareholders, members of its bodies, officers, employees, agents or advisers nor any other person is required to provide the recipients of this Presentation with any additional information or to update this Presentation. This Presentation contains information on the chemical industry in Poland and abroad, including information on the market share of the Company and some of its competitors. In each case the source of such information is provided, and such information has not been subject to independent verification by or on behalf of the Group. This Presentation is not for distribution to or use by any person or entity in any jurisdiction where such distribution or use would be contrary to local law or would oblige the Group or any of its affiliates to obtain an authorisation, license or exemption from the registration requirements under applicable laws. Neither this Presentation nor any part hereof may be copied or transmitted into the United States, and cannot be disseminated, directly or indirectly in the United States. Failure to comply with this restriction may constitute a violation of US securities laws. Persons who come into possession of this Presentation should observe all the above limitations. Any securities referred to herein have not been and will not be registered under the US Securities Act of Any such securities may not be offered or sold in the United States, except pursuant to an exemption or in a transaction not subject to the registration requirements of the Act. DISCLAIMER 28

29 THANK YOU FOR YOUR ATTENTION For more information visit Contact: