Hellenic Petroleum Group

Transcription

1 Hellenic Petroleum Group Company update July 2012

2 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 1

3 A diversified regional energy player undergoing a significant transformation A leading regional energy Group, built around its strong R&M asset base Hellenic Petroleum has completed its transformational investment plan, moving to the delivery phase of a significant cash generation improvement Solid financial position throughout the cycle, enabling to successfully complete the heavy capex period and manage through Greek crisis and challenges in the region Involved in two major privatisations (HP and DEPA) 2

4 Group business overview, 2011 key metrics ASSETS Μ SALES Μ EBITDA Μ FTEs Refining, Supply & Trading 2,680 8, ,967 Domestic Marketing 428 2, International Marketing Petrochemicals Power & Gas 610 2, GROUP TOTAL 3 4,217 9, ,242 (1) Total sales (not consolidated at Group level) (2) Net income contribution (consolidated using equity method (3) As consolidated (does not include associates)

5 Geographical location supports a regional integration role and provides growth opportunities in neighboring markets BOSNIA SERBIA MONTENEGRO FYROM ALBANIA ROMANIA BULGARIA Coastal location of refineries ensures ample availability and variety of crude oil; ability to capture opportunities and respond to supply disruptions Refining Marketing Power & Gas GREECE TURKEY CYPRUS Cost advantaged to supply SEE/East Med markets with endproducts Opportunities for regional consolidation 4

6 Key Milestones Transforming stand-alone government controlled Greek companies to a leading private sector regional energy player PETROLA (Elefsina Refinery) DEP & DEPEKY (Greek E&P) Listing of new Group in ASE/LSE as part of a privatisation POIH becomes strategic investor with 25% stake Elpedison: 50/50 JV with Italy s Edison, in Greek Power generation and trading Elpedison s 2 nd CCGT Plant (420MW) in commercial operation Greek Government announces its intention to divest its shareholding in ELPE in ELDA (Aspropyrgos Refinery) ESSO- PAPPAS (Thessaloniki Refinery) ELPE increases its stake in DEPA to the Current 35% Merger with Petrola Hellas The Public Petroleum Corporation (DEP) is renamed Hellenic Petroleum and merges with DEPEKY (E&P), ELDA (Aspropyrgos refinery) and EKO (Thessaloniki refinery and Chemicals). 85% of DEPA is transferred out to the Greek State. New Group is owned 100% by the Greek State. Operation of T-Power (1 st Greek IPP) Libyan upstream concessions sold to GDF Suez for $170m Acquisition of BP s Ground Fuels business in Greece for 360m Sale of 70% stake in W. Obayed upstream concession in Egypt Thessaloniki Refinery upgrade completed Free Float c22% POIH c42% Hellenic Republic c36% Launch of DEPA privatisation process Elefsina upgraded refinery commercial operation Shareholding events 5

7 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 6

8 Focus on strengthening R&M, restructuring portfolio and transform organisation for competitiveness Upgrading & Strengthening Domestic R&M 1 Asset upgrade Expanding International R&M Developing Power & Gas, RES, and new technologies Managing Business Portfolio for Value and Growth 2 Manage Portfolio Creating best practice organisational structures 3 Fit-for-purpose organisation 7

9 Original strategy aimed at doubling operating profitability Adjusted EBITDA evolution (at historic mid cycle margins) million Historic Average Refining Assets Marketing Assets Portfolio Rationalisation Performance Improvement Medium Term Group Growth Capex (excl. Maintenance) million BP ground fuels businesses acquisition Network development 160 Growth in SEE 40 >2bn Transformation initiatives ( m) Other Elefsina upgrade Thessaloniki upgrade Domestic Refining Domestic Marketing International Marketing Other Total M2011 4Q2011 Annualised cumulative Medium Term Target impact

10 implemented despite challenging environment Adjusted EBITDA evolution million Margin uplift FY11 Refining Assets Additional Ops improvements Performance Improvement Medium Term Group Growth Capex (excl. Maintenance) million BP ground fuels businesses acquisition Network development 160 Growth in SEE 40 >2bn Transformation initiatives ( m) Other Elefsina upgrade Thessaloniki upgrade Domestic Refining Domestic Marketing International Marketing Other Total M2011 4Q2011 Annualised cumulative Medium Term Target impact

11 Leading to different cash flow profile Cash Flow profile during investment phase* ( mil) Pre-upgrade Cash Flow profile post upgrade investment* ( mil) -250 EBITDA Capex Pre Tax Free Cash Flow Post-upgrade EBITDA Capex Pre Tax Free Cash Flow (*): Pro forma, based on mid-cycle margin scenario ( average), assuming no changes in working capital 10

12 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 11

13 Overview of Refining and Upgrades Upgrade - Key Facts Investment Plan Elefsina Refining upgrade Capex c 1.2bn Units 40 kbd hydrocracker 20 kbd flexicoker Emissions SO 2 70% PM 84% Upgrade - - Key Facts (Completed) Investment Plan Thessaloniki Refining upgrade Capex c. 0.2bn 200m Units + 20kbd C.D.U 95kbd 15 kbd CCR Emissions SO 2 60% PM 60% Transformation Improve 2 Quartiles in Solomon Index Improve Net Cash margin by $/bbl Refining Assets NCI evolution Aspropygros Elefsina Thessaloniki Pre upgrade Post upgrade FCC HDC/FXC HS 145kbpd 100kbpd 95bpd N.C.I: Nelson Complexity Index Benchmark med refining margins (2011) 6 12

14 Greek Refining, Supply & Trading Economics Group Value Chain Refining (Med benchmark returns & operations performance) Markets (sales premia varying across channels) 4.5 MT 8.0 MT Elefsina NCI kbpd HDC Aspropyrgos NCI kbpd FCC Cracking Refined Products (16.0m MT) Domestic market (Import parity pricing) Aviation & Bunkering (Med competitive pricing) 6-7 MT 3 MT $ / 3.5 MT Thessaloniki NCI kbpd Hydroskimming 16 MT Exports, Intra-Group (Platts Med FOB based + premia) 2 MT MT Imported Products (1-1.5m MT) Exports, 3 rd parties (Platts Med FOB based) 4-6 MT 13

15 Greek Refining, Supply & Trading Economics Upgrading refining assets enhances refining returns, thus reducing dependency on Greek market 12% Pro-forma EBITDA break-down International Exports 20-25% 10-15% 30-35% Domestic market premia 30-35% Benchmark Margins & Yield 14

16 Elefsina Refinery Upgrade Overview Elefsina Refinery, a 100kbpd coastal topping refinery with private port and a tank farm of 3,3 mln M3, is transformed to a top cash net-back refinery through a major upgrade Largest manufacturing project in SEE Europe: Second fully converted European refinery combining a hydrocracker and a flexicocker Middle distillates and naphtha producer Event-free commissioning phase; commercial operation over the next few weeks Start-up teams and new refinery organisation fully in place Elefsina Refinery upgrade will impact Group cash generation from 3Q12 onwards Incremental export capacity reduces Group s dependence on Greek market 15

17 Elefsina refinery: 3D Upgrade configuration BPSD 16

18 Elefsina refinery: summary configuration 100kbpd Propane Light Ends Recovery LPG Crude Existing Units Atmospheric Distillation 45kbpd Diesel Desulphurization Kerosene Sweetening Hydrogen (Haldor Topsoe) 20kbpd 40kbpd Hydrocracker (UOP) Naphtha Jet Fuel Heating Diesel Auto Diesel Marine Diesel New Units c.50% of CDU output Vacuum Unit Flexicoker (Exxon Mobil) New units, Sulphur, Amine, SWS Petcoke or Flexigas Sulphu r Nelson complexity raised to 7.2 All emissions significantly reduced (eg SO2 by 70% and PM by 84%) 17

19 Elefsina Project Update Transformational investment in Elefsina significantly enhancing competitiveness Elefsina Utilisation rate 100% 100% * Upgrade impact on product yield million tonnes / year 75% 50% 74% 53% 55% 35% 25% 6% 0% FY07 FY08 FY09 FY10 FY E (*) over operational availability (i.e. post start-up) ULSD HSFO spread $/T Cracking margins Aspropyrgos vs Elefsina 25 $/bbl Average 2011 ($/bbl) Aspropyrgos 2.87 Elefsina Jan 09 M ar 09 M ay 09 Jul 09 Sep 09 Nov 09 Jan 10 M ar 10 M ay 10 Ju l 10 Sep 10 N o v 10 Jan 11 M ar 11 M ay 11 Ju l 11 Sep 11 N o v 11 Jan 12 M ar 12 M ay 12-5 JAN07 APR07 JUL07 OCT07 JAN08 APR08 JUL08 OCT08 JAN09 APR09 JUL09 OCT09 JAN10 Aspropyrgos APR10 JUL10 OCT10 JAN11 Elefsina APR11 Jul-11 Oct-11 Jan-12 Apr-12 18

20 Refinery upgrades will substantially improve the Group s crude and product slate, thus delivering strong cash flows Crude slate Group-wide Product slate Group-wide High sulphur 10% 11% 23% 21% Other 61% 67% 9% 8% Gasoline Medium sulphur 32% 45% Jet 22% 16% 17% 18% Current Post upgrade Low sulphur 26% Current 15% Post upgrade Diesel/Gas oil Fuel oil Crude slate Elefsina Product slate Elefsina 17% 25% Other 59% High sulphur 11% 11% 100% 24% Jet 41% Medium sulphur 47% 64% Diesel/Gas oil Fuel oil Current Post upgrade Current Post upgrade 19

21 Middle distillates exhibit a large and growing deficit in the Med area Oil products demand f million tonnes / year CAGR 1.1% Refined Oil products balances f million tonnes / year Surplus Deficit Auto-fuels Other fuels Deficit in Middle distillates continues to grow Non-European Med countries drive demand higher Source: Wood Mackenzie, Regional Outlook, Mediterranean 20

22 Domestic marketing: Leading position on the back of logistics and footprint; route to market / vertical integration benefit with 45% of refinery output through EKO/HF Sales evolution (MT) Retail network evolution (# PS) 4,637-12% 4,070 2,345 2,186 2,022 1,249 1, ,422 2,219 1,170 1,175 1, ,078 1,041 FY10 Bunkers & Aviation C&I Retail FY EKO HF Domestic marketing business affected by Greek crisis, due to increased duties and pressure on income; 2012 demand remains under pressure while margins show stabilising trends Product launches ( Ekonomy 95 and BP Ultimate 95 ) enhance customer value proposition and support market share increase Restructuring of the business to achieve fit-for-purpose organisation: Headcount reduction of 125, with an annual benefit of c. 10m Supply chain optimisation through the closure of 5 terminals Additional savings from network rationalisation 21

23 International Marketing: Market diversification strategy and value chain integration; 10% of supply chain from Greek refineries soon to become 15% Operating a network of c.295 stations in 7 countries exceeding 1MT of annual sales International: Regional footprint Maintain market leadership in: Cyprus (EKO): 35% market share FYROM (OKTA): 90% market share (wholesale) Montenegro (JPK): 54% market share Strategic targets: Enhance footprint: added 156 petrol stations since 2004; continue growing on selected markets Secure top-3 position in all markets Secure supply advantage (Northern hub, in-market logistics, strategic supply agreements) On the look out for potential acquisitions/strategic partnerships in SEE/East Med Exit non-core markets, divested Georgian business 27 SEE* & Turkey (mtpa) % * Albania, Romania, Bulgaria, FYROM, Bosnia, Montenegro, Greece, Serbia, Croatia Source: WoodMac 45 Jet Gasoline Diesel/GO 22

24 Petrochemicals: Vertical integration aimed at extracting additional value and maximising regional trading advantage Position: Only petrochemicals producer in Greece with material presence Domestic market share exceeds 50% in all products, produced or traded Strong competitive advantage in polypropylene - vertical integration play Exports account for 60% of total sales; strong export markets in Italy, Iberia and Turkey Petrochemicals supply chain Aspropyrgos Refinery Thessaloniki Refinery Propylene Splitter PP Plant (220 kt) Solvents Plant (90 kt) BOPP Film (26 kt) M A R K E T Targets Debottleneck polypropylene production Expand product portfolio: Add new commodity plastics (PE) Increase selectively PP resin grade portfolio Increase selectively BOPP film types Leverage regional market access through increased trading Imported Chemicals NaCI Imports Distribution Centre (90 kt) Caustic/Chlorine Plant 23

25 Gas: 35% participation in DEPA, Greece s incumbent gas company Driven by new gas-fired power plants and increasing retail penetration, gas consumption in Greece is expected to double by 2020 DEPA: Owns 100% of DESFA, Greece s gas grid owner and operator Owns 51% of the local supply companies (EPAs), with rights until 2036 to sell gas to small industrial, commercial and all residential customers Long-term contracts on pipeline gas (Russian & Azeri) and capacity rights on two in-bound interconnecting pipelines Long-term contracts with power generators (PPC, ELPEDISON) and existing EPAs Participates in ITGI, South Stream (via DESFA) and Interconnector Greece-Bulgaria pipelines DEPA joint sale process with HRADF launched on 29 Feb;14 interested parties qualified for bidding process Natural gas transmission network DEPA s contribution to Group Net Income Sales volume (bcm) Associate income (35% of DEPA s net income - in m) * As a % of Group Adjusted Net Income * DEPA is consolidated via the equity method % 27% 12% 16% 49% 24

26 Power: Thisvi plant commercial start-up renders ELPEDISON second largest generator; development of a renewable energy portfolio Owned by Elpedison, a 50/50 joint venture between Hellenic Petroleum and Edison, Italy s 2 nd largest electricity producer and gas distributor Largest independent power producer in Greece, owns and operates 810MW of installed CCGT capacity: a 390MW plant in Thessaloniki since 2005 and a 420MW in Thisvi since Dec 2010 Active in power trading & marketing albeit with limited exposure due to Greek market crisis Thisvi 420MW CCGT power plant Hellenic Petroleum is targeting a renewables portfolio exceeding 100MW (wind, PV, biomass); currently >80MW in various development stages 25

27 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 26

28 Transformation initiatives Total annual benefit since launch at 165m Evolution of transformation initiatives ( m) Group Reorganisation & HR Procurement Processes Marketing Competitiveness Refining Excellence (DIAS) Q2012 Annualised cumulative impact -30 Annual Cumulative Impact Medium Term Target 27

29 Supporting Group results through a period of weak margins and Greek crisis Evolution Group adjusted EBITDA ( m) vs benchmark FCC cracking margins ($/bbl) 800 EURm Benchmark FCC cracking margins Contribution from transformation initiatives

30 A growth story As well as a transformational journey Turnover ( m) Group Headcount (FTEs) +90 % -17% ` Asset base ( m) Group opex ( m) +89 % -16% ` 29

31 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 30

32 Debt Profile Committed facilities maturity overview Credit lines by Bank breakdown Q12 2Q12 3Q12 4Q12 1Q13 3Q Greek 67% 33% 100% - International 33% 67% - - EIB % Diversified funding strategy proved an advantage during Greek crisis Refi for maturities in process; implementation delayed due to Greek risk Elefsina start-up allows gradual deleveraging DEPA share divestment not included in Group refinancing plans, however will accelerate degearing 31

33 Contents Introduction - Group overview Strategy and delivery Group business units Enhancing competitiveness Funding Financials 32

34 GROUP KEY FINANCIALS 1Q 2012 FY million, IFRS 1Q Δ% Income Statement Figures Sales Volume (MT) - Refining % Sales Volume (MT) - Marketing % Net Sales % 335 EBITDA % 67 Associates' share of profit % 242 EBIT (including Associates' share of profit) % 114 Net Income % 0,37 EPS ( ) 0,39 0,23-40% 363 Adjusted EBITDA * % 271 Adjusted EBIT * (including Associates) % 137 Adjusted Net Income * % 0,45 Adjusted EPS ( ) * 0,15 0,15 1% Balance Sheet / Cash Flow Items Capital Employed Net Debt Capital Expenditure % (*) Calculated as Reported less the Inventory effects and other non-operating items 33

35 1Q 2012 FINANCIAL RESULTS GROUP PROFIT & LOSS ACCOUNT FY IFRS FINANCIAL STATEMENTS 1Q 2011 MILLION Δ % Sales % (8.657) Cost of sales (2.193) (2.551) (16%) 650 Gross profit (27%) (467) Selling, distribution and administrative expenses (108) (99) 9% (4) Exploration expenses (1) (0) 69% (5) Other operating (expenses) / income - net* 9 2 (79%) 175 Operating profit (loss) (47%) (68) Finance costs - net (17) (11) 31% (11) Currency exchange gains /(losses) (32%) 67 Share of operating profit of associates (19%) 163 Profit before income tax (42%) (46) Income tax expense / (credit)** (40) (24) 41% 118 Profit for the period (42%) (4) Minority Interest (3) Net Income (Loss) (40%) 0,37 Basic and diluted EPS (in ) 0,39 0,23 (41%) 335 Reported EBITDA (35%) (*) Includes headcount reduction (**) Does not include special contribution tax 34

36 1Q 2012 FINANCIAL RESULTS GROUP BALANCE SHEET IFRS FINANCIAL STATEMENTS FY 1Q MILLION Non-current assets Tangible and Intangible assets Investments in affiliated companies Other non-current assets Current assets Inventories Trade and other receivables Held to maturity securities - - Cash and cash equivalents Total assets Shareholders equity Minority interest Total equity Non- current liabilities Borrowings Other non-current liabilities Current liabilities Trade and other payables Borrowings Other current liabilities Total liabilities Total equity and liabilities

37 1Q 2012 FINANCIAL RESULTS SEGMENTAL ANALYSIS FY 2011 million, IFRS Δ% Reported EBITDA 251 Refining, Supply & Trading % 54 Marketing % 37 Petrochemicals % 343 Core Business % -8 Other (incl. E&P) % 335 Total % 120 Associates (Power & Gas) share attributable to Group % Adjusted EBITDA (*) 259 Refining, Supply & Trading % 66 Marketing % 44 Petrochemicals % 368 Core Business % -5 Other (incl. E&P) % 363 Total % 120 Associates (Power & Gas) share attributable to Group % Adjusted EBIT (*) 182 Refining, Supply & Trading % 1 Marketing Petrochemicals % 210 Core Business % -6 Other (incl. E&P) % 203 Total % 91 Associates (Power & Gas) share attributable to Group % 1Q (*) Calculated as Reported less the Inventory effects and other non-operating items 36

38 1Q 2012 FINANCIAL RESULTS SEGMENTAL ANALYSIS II FY 2011 million, IFRS Δ% Volumes (M/T'000) Refining, Supply & Trading % Marketing % 314 Petrochemicals % Total - Core Business % Sales Refining, Supply & Trading % Marketing % 340 Petrochemicals % Core Business % Intersegment & other % Total % Capital Employed Refining, Supply & Trading Marketing Petrochemicals Core Business Refinery Upgrades Associates (Power & Gas) Other (incl. E&P) Total Q 37

39 Group Key financials million, IFRS (Published) Income Statement Figures Sales Volume (MT)- Refining 15,807 16,525 16,952 17,130 16,997 15,885 14,557 12,528 Sales Volume (MT)- Markeing 4,793 4,727 4,790 5,236 4,910 4,787 5,735 5,126 Net Sales 4,907 6,653 8,122 8,538 10,131 6,757 8,477 9,308 EBITDA Adjusted EBITDA* Net Income Adjusted Net Income* EPS (E) Adjusted EPS ( )* Balance Sheet / cash Flow Items Capital Employed 2,335 2,956 3,442 3,557 3,153 3,927 4,191 4,217 Net Debt , ,419 1,629 1,687 Capital Expenditure (*) Calculated as Reported less the Inventory effects and other one-off non-operating items and special income taxes 38

40 Disclaimer Forward looking statements Hellenic Petroleum do not in general publish forecasts regarding their future financial results. The financial forecasts contained in this document are based on a series of assumptions, which are subject to the occurrence of events that can neither be reasonably foreseen by Hellenic Petroleum, nor are within Hellenic Petroleum's control. The said forecasts represent management's estimates, and should be treated as mere estimates. There is no certainty that the actual financial results of Hellenic Petroleum will be in line with the forecasted ones. In particular, the actual results may differ (even materially) from the forecasted ones due to, among other reasons, changes in the financial conditions within Greece, fluctuations in the prices of crude oil and oil products in general, as well as fluctuations in foreign currencies rates, international petrochemicals prices, changes in supply and demand and changes of weather conditions. Consequently, it should be stressed that Hellenic Petroleum do not, and could not reasonably be expected to, provide any representation or guarantee, with respect to the creditworthiness of the forecasts. This presentation also contains certain financial information and key performance indicators which are primarily focused at providing a business perspective and as a consequence may not be presented in accordance with International Financial Reporting Standards (IFRS). 39