INVESTOR PRESENTATION May #GrupaAzoty1Q18

Transcription

1 INVESTOR PRESENTATION May #GrupaAzoty1Q18

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 NO 3 IN POLYAMIDE & MELAMINE IN EU NO 5 IN PLASTICIZERS & OXO IN EU 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 EBRD 2,87% TFI PZU S.A. 8,60% Others 26,10% Opansa Enterprises Limited 9,50% ING OFE (Open Pension Fund) 9,96% State Treasury 33,00% Norica directly/indirectly 19,47% Rainbee Holdings Limited 9,90% Norica 0,07% Latest notification 28th June 2017 GRUPA AZOTY AT A GLANCE 3

4 4 GRUPA KAPITAŁOWA GRUPA AZOTY DIVISION OF RESPONSIBILITIES AMONG MANAGEMENT BOARD MEMBERS President of the Management Board W.Wardacki Vice President of the Management Board W.Szczypiński Vice President of the Management Board G.Kądzielawski Vice President of the Management Board P.Łapiński Wiceprezes Zarządu Józef Rojek Member of the Management Board A.Kopeć Management and HR Director General Grupa Azoty S.A. Infrastructure Finance Investments Production assets Audit and Risk Agro Segment Research and development IT Growth Strategy Technical safety and infrastructure Communication Plastics Segment Organic Synthesis Segment IR Strategic and Technical Procurment Logistics Energetic resources procurement Environmental protection Social dialogue CSR President of the Management Board Grupa Azoty POLICE Production Integration M&A

5 ACQUISITIONS SINCE controlling interest in Puławy (up to 95.98%) 99.33% interest in Siarkopol (99.33% in 2018)* 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 Consolidated revenues PLN bn * Up to 99.33% in 2018 due to the acquisition of employee shares GRUPA AZOTY AT A GLANCE 5

6 CORE BUSINESS 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 #GrupaAzoty1Q18

8 BROAD PRODUCT PORTFOLIO SEGMENTS BY SHARE IN 1Q2018 REVENUE PRODUCTS APPLICATIONS AND USE FERTILIZERS 49% AN, CAN, NPK, AS, ASN UREA UAN, 57% AMMONIA SULFUR MINING 55% IN AGRICULTURE TO INCREASE HARVEST VOLUMES AND QUALITY CHEMICALS 31% OXO PRODUCTS MELAMINE, 12% PIGMENTS TECHNICAL-GRADE UREA AUTOMOTIVE, CONSTRUCTION, FOIL AND COATING, HOUSEHOLD APPLIANCES, FOOD PROCESSING AND TEXTILE INDUSTRIES PLASTICS 16% POLYAMIDE CAPROLACTAM PLASTICS AND AUTOMOTIVE INDUSTRIES ENERGY 3% ELECTRICITY AND HEAT OWN CONSUMPTION, SALES OF ELECTRICITY AND HEATING WATER TO LOCAL USERS OTHER 1% CATALYSTS, LABORATORY SERVICES, OTHER CATALYST PRODUCTION, SUPPORT SERVICES, LABORATORIES LOGISTICS, MANAGEMENT, ENVIRONMENTAL PROTECTION BUSINESS 8

9 REGIONAL STRUCTURE OF SEGMENTS GEOGRAFIC STRUCTURE IN 2017 North America 0.5% 26% 1% 34% European Union 1 35% 0% 0% 34% 25% 41% Other Europe 3% 1% 58% 32% 9% Asia 4% 1% 7% 92% Poland 55% 39% 4% 3% 3% 25% 65% South America 1% 28% Africa 2% 79% 17% 4% 5% 67% Agro Fertilizers Plastics Chemicals Energy Other Activities 1 Excluding Poland BUSINESS 9 9

10 COST STRUCTURE Other 171 Depreciation 518 Labour costs Taxes 323 Services Other Depreciatio 165 n 587 Labour costs Taxes 338 Services 990 RAW MATERIALS Gas 36% Other 17% Energy 9% Raw materials (PLNm) Raw materials Benzene 4% Fine coal Phosphate 6% Phenol rock 7% 6% Potassium chloride 7% Propylene 8% BUSINESS 10

11 GRUPA AZOTY GROUP Raw materials EUR/MWh 25 PRICES OF NATURAL GAS USD/MWh DAILY QUOTATIONS Q Q Q Q Q Q Q Q Q Q Q Q Q PPX* TTF DA* GPL DA * Russia Federal Tariff Service USD / MWh * bez przesyłu PRICES OF ELECTRICITY PRICES OF HARD COAL PLN/MWh Q Q Q Q Q Q Q Q Q Q Q Q42017 Q IRDN FX USD/t Q Q Q Q Q Q Q Q Q Q Q Q42017 Q ARA BUSINESS

12 AGRO - FERTILIZERS (PLNm) Jan- March 2017 Jan- March 2018 Change Q/Q EXTENSIVE PORTFOLIO OF FERTILIZERS Segment revenue including: Nitrogen fertilizers, and ammonia Compound fertilizers CAPACITIES YARA Grupa Azoty % % % EBITDA % EBITDA margin 12% 9.6% 17.0% 13.9% -3.1 pp 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 Azomures EU 2 Azomures Petrokemija Petrokemija [tt] Source: Fertilizers Europe BUSINESS 12

13 STRATEGY FOR THE AGRO FERTILIZERS SEGMENT TARNÓW Granulation Plant II 1200 t/d CAPEX PLN 141m 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 CAPEX PLN 695m Fertilizers production line 600 t/d CAPEX PLN 385m 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 13

14 CHEMICALS (PLNm) Jan- March 2017 Jan- March 2018 Change Q/Q MELAMINE Segment revenue including: % OCI Melamine OXO alcohols % Plasticizers % Grupa Borealis Poland 1 Urea (technical grade) % Grupa Azoty Melamine % Titanium white % EBITDA % BASF SE Azomures S.A. EU 3 EBITDA margin 12% 12.5% 15.6% 16.5% 0.9 pp PLASTICIZERS* [tt] OXO** ExxonMobil Basf Evonik Poland 1 Basf Oxea Group Poland 1 Polynt Ineos Grupa Azoty OXEA GROUP EU Perstrop OXO AB EU DEZA 5 Grupa Azoty 5 Perstorp OXO AB Oltchim SA [tt] [tt] * 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 14

15 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 15

16 PLASTICS (PLNm) Jan- March 2017 Jan- March 2018 Change Q/Q Segment revenue, including: Polyamide 6 (PA6) Polyamide % Caprolactam Caprolactam % EBITDA %% EBITDA margin -3% 15.6% 16.1% 14.6% -1.5 pp. POLYAMIDE 6 BASF* Lanxess* APPLICATIONS IN KEY SEGMENTS* % Automotive Grupa Azoty* Aquafil* DSM* Radici Domo* Rhodia Nyobe Ube* Nurel [tt] Poland 1 Europe Films and coatings Machine building Electrical and electronic applications Consumer goods Household appliances Other Source: PCI Nylon, YellowBook 2015 Integrated BUSINESS 16 *Consumption in Europe Source: IHS 2017

17 STRATEGY FOR THE PLASTICS SEGMENT PA6 PRODUCTION CAPACITIES [tt] STRATEGIC INITIATIVES +80 tt Guben Tarnów Finished investment projects: - Construction of new Polyamide Unit in Tarnów - Increasing cap. by t. Intensive development of high-margin compounds Balancing caprolactam production volume within the Grupa Azoty Group Entering new markets with highly specialised plastics BUSINESS 17

18 STRATEGY

19 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

20 FINANCIAL STRATEGY CELE KORPORACYJNE EBIT MARGIN 8% EBITDA MARGIN 14% DIVIDENT PAYOUT <60% ROCE 10% ROE MARGIN 10% STRATEGY 20

21 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 % 2017 recomendation 354, ,994 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 21

22 22 GRUPA AZOTY GROUP Investments made in (PLNbn) Other 0.2 Grupa Azoty ZAK 0.2 Grupa Azoty POLICE 0.2 Grupa Azoty PUŁAWY 0.6 Grupa Azoty S.A Plan 2018 Plan 2018 Rozwój biznesu Mandatowe Pozostałe Utrzymania biznesu Zakup Gotowych Dóbr Komponenty By type By company * as per the Acquisition of property, plant and equipment, intangible assets and investment property item of the consolidated statement of cash flows

23 INVESTMENTSGANIC GROWTH New CHP plant at Kędzierzyn phase 1 Polyamide Unit at Tarnów Upgrade of the ammonia unit at Police Pulgran/PulgranS at Puławy Flue Gas Treatment Unit at Tarnów Co-financed under the Norwegian Financial Mechanism INWESTMENTS 23

24 24 GRUPA AZOTY GROUP Major capex projects in 2018 (PLN 000) Project name Company Project budget in 2018 Upgrade of steam generator to reduce NOx emissions ZAP 44,000 Exhaust gas treatment unit and upgrade of EC II CHP plant ZCH 21,000 Upgrade of synthesis gas compression unit supplying ammonia plant ZAK 50,807 Raw gas compressor (GHH) ZAK 17,678 Upgrade of partial combustion unit at Ammonia Department ZAK 14,000 Facility for production of ammonium nitrate-based granulated fertilizers ZAP 131,280 Chemical Technology and Development Centre ZAT 68,270 Expansion of production capacity of technical-grade nitric acid unit Upgrade of existing and construction of new nitric acid units, and facilities for neutralisation and production of new nitric acid-based fertilizers ZAT 58,090 ZAP 51,290 Plan 2018 Komponenty Pozostałe Zakup Gotowych Dóbr Mandatowe Utrzymania biznesu Rozwój biznesu Special Esters I ZAK 37,505 Change of phosphoric acid production method (DA-HF technology) ZCH 33,295 Utilisation of purge gases from ammonia synthesis unit ZAT 22,350 Increasing the volumes of and optimising liquid CO 2 production ZAP 19,200 Expansion of water demineralisation station ZAP 13,112 Pilot humic acid unit ZAT 11,830 Purchase and installation of synthesis compressor ZAP 10,392

25 STRATEGY FOR THE NEW SEGMENT POLYPROPYLENE Decision of the special purpose vehicle to expand the project scope to include polypropylene unit Budgeted cost of the project: EUR 1.27bn Start of construction end of 2019 Commercial commissioning 2022 Location: Pomeranian Special Economic Zone (up to PLN 428m of state aid) Corporate approval at Grupa Azoty MANUFACTURING COMPLEX PROPYLENE UNIT POLYPROPYLENE UNIT SEA TERMINAL WITH FEEDSTOCK TANK FARM AUXILIARY AND LOGISTICS INFRASTRUCTURE BENEFITS: diversification of revenue streams, additional profits for the Group, expansion of the Group's product portfolio, flattening of business cycles INVESTMENTS 25

26 FINANCIAL #GrupaAzoty1Q18

27 GRUPA AZOTY GROUP: FINANCIAL HIGHLIGHTS ** Jan- March (PLNm) 2018 Revenue 9,898 10,008 8, EBIT EBIT margin 3% 8% 5% 6% 9.5% EBITDA 822 1,309 1, EBITDA margin 8% 13% 11% 12.3% 16.1% Net profit Jan-March 2017 Jan- March 2018 Q/Q % % 11.9% 9.5% -2.4 pp % 16.9% 16.1% -0.8 pp % EBITDA 16,9% EBITDA (skorygowana)* Marża EBITDA 12, , , , , ,1% 403 (PLNm) Q2017 1Q2018 * 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 27

28 GRUPA AZOTY GROUP REVENUE, QUARTERLY (PLNm) REVENUE AND NET PROFIT Revenue Net profit (right axis) EBITDA EBITDA DANE FINANSOWE 28

29 29 GRUPA AZOTY GROUP Grupa Azoty Group financials as at March 31st 2018 FINANCIAL RATIOS Q Q Profitability ratios AVAILABLE FUNDS/UNDRAWN FACILITIES* (mln PLN) EBIT margin (%) EBITDA margin (%) ROCE (%) corporate loans overdrafts and multipurpose credit facilities ROE (%) Liquidity ratios 0 other financial assets Current ratio Debt ratios Total debt ratio (%) Net debt (PLNm) Net debt/12m EBITDA FINANCING STRUCTURE 8% 6% 86% corporate loans * Following entry into a new EUR 145m loan agreement with EIB on January 25th 2018, the available funds (undrawn corporate facility limits) rose by approximately PLN 600m. overdrafts and multi-purpose credit facilities other financial assets

30 30 Part or section title Stock price Growth since June 30th 2008: Change since January 3rd 2018: 221% - 26% Max (December 8th 2015) Min (February 3rd 2009) PLN PLN Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 0 Wolumen Cena

31 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. 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