Q3&9M 2013 Operational and Financial Results. 12 December 2013

Transcription

1 Q3&9M 2013 Operational and Financial Results 12 December 2013

2 DISCLAIMER The information contained herein pertaining to SIBUR (the "Company") has been provided by the Company solely for use at this presentation. By attending this presentation, or by reading these presentation slides, you agree to be bound by the limitations set out below. This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of, or be relied on in connection with, any contract or investment decision relating thereto. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. The Company accepts no responsibility for any losses howsoever arising, directly or indirectly, from this presentation or its contents. The material contained in this presentation is presented solely for information purposes and is not to be construed as providing investment advice. As such, it has no regard to the specific investment objectives, financial situation or particular needs of any recipient. There may be material variances between estimated data set forth in this presentation and actual results, and between the data set forth in this presentation and corresponding data previously published by or on behalf of the Company. This presentation contains forward-looking statements, including (without limitation) statements containing the words "anticipates," "expects," "intends," "may," "plans," forecasts, "projects," "will," "would", "targets, believes and similar words. These statements are based on the current expectations and projections of the Company about future events and are subject to change without notice. All statements, other than statements of historical fact, contained herein are forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties, such that future events and actual results may differ materially from those set forth in, contemplated by or underlying such forward-looking statements. The Company may not actually achieve or realize its plans, intentions or expectations. There can be no assurance that the Company's actual results will not differ materially from the expectations set forth in such forward-looking statements. Factors that could cause actual results to differ from such expectations include, but are not limited to, the state of the global economy, the ability of the petrochemical sector to maintain levels of growth and development, risks related to petrochemical prices and regional political and security concerns. The above is not an exhaustive list of the factors that could cause actual results to differ materially from the expectations set forth in such forward-looking statements. The Company and its Affiliates are under no obligation to update the information, opinions or forward-looking statements in this presentation. 2

3 KEY 9M 2013 DEVELOPMENTS EXTERNAL ENVIRONMENT Macro and market turbulence prevailed in 9M 13 Slow-down in GDP growth in Russia; stable GDP growth in China; EU GDP continued to shrink Lower oil and naphtha prices and even weaker LPG prices Strong headwinds in synthetic rubbers Indexation of natural gas prices Growth in average 9M 13 price of 13.5% y-o-y Depreciation of RR against USD by approx. 2% Change in scope: ONE-OFF FACTORS Deconsolidation of Yugragazpererabotka from Q2 13 Consolidation of BIAXPLEN from Q2 12 Change in natural gas delivery basis to ex-field from 1 Jan 13 High base effect: trading activities in favour of the divested mineral fertilisers business continued in Q1 12 and were terminated from Q2 12 Caprolactam decommissioning completed in Q2 13 SIBUR: KEY DEVELOPMENTS Significant progress on multi-year investment programme Tobolsk-Polymer Plant: construction completed, now at rampup stage BOPP-films production facility in Tomsk launched Thermoplastic elastomers production facility in Voronezh launched Ust-Luga Transshipment Facility at commissioning stage, test loadings of LPG and naphtha tankers Memorandum of understanding between SIBUR and Rail Garant on the sale of LPG rail cars with the fleet to be made available to SIBUR under 6-year contracts. Deal closing expected in 2014 JV with SINOPEC for NBR production in Krasnoyarsk completed Controlling shareholders granted an additional 12% stake in the Company to the Group s directors and key managers Equity-settled share-based payments recorded as a non-cash charge in SIBUR s P&L International sales network expanded to 7 international sales desks in 4 countries outside Russia with focus on basic polymers 3

4 MACRO ENVIRONMENT Russian GDP Growth (1) Consumer Price Index (y-o-y) (1) Railway Tariffs Indexation (2) 4.0% 6.6% 6.1% 6.0% 7.0% 1.3% Average Exchange Rate (3) Exchange Rate (3) RR / USD RR / USD % 31.6 (4.0%) % Effective Average Electricity Tariffs RR per kw / hour % 31 Dec`11 30 Sep`12 31 Dec`12 30 Sep`13 Source: (1) Russian Federal State Statistics Service (2) Federal Tariff Service (3) CBR 4

5 MARKET ENVIRONMENT (1) Energy Products Basic Polymers 000 USD per tonne except as stated (avg. for the period) 000 USD per tonne (avg. for the period) (3.3%) (4.3%) % +9.8% (7.6%) (7.6%) (13.7%) Naphtha LPG DAF Brest LPG Sonatrach LPG CIF ARA (large) PP LDPE Brent, USD per bbl (RHS) Synthetic Rubbers Plastics & Organic Synthesis 000 USD per tonne (avg. for the period) 000 USD per tonne (avg. for the period) % % +15.5% +3.1% (20.6%) (32.6%) +0.8% (34.7%) +4.4% Natural rubber (USD) Styrene-butadiene rubber 2-ethylhexanol Expandable polystyrene MEG Butyl acrylate Butadiene Butyl rubber PET Source: Argus, Bloomberg, ICIS, Chemease, Malaysian Rubber Board Notes: (1) For detailed market data statistics please refer to Appendix. Prices quoted in EUR are converted to USD at average EUR / USD FX rates for the respective periods. 5

6 SIBUR Q3 & 9M 2013 FINANCIAL SUMMARY Revenue EBITDA EBITDA margin, % (0.7%) % 27.9% 30.3% 28.8% +8.9% % (5.4%) Q Q Q Q Net Profit OCF Net margin, % 25.0% 13.1% 22.7% 17.4% 15.5 (23.8%) +4.2% (42.9%) % Q Q Q Q

7 REVENUE STRUCTURE AND DYNAMICS Total Revenue Energy Products Petrochemical Products Other Revenue (0.7%) % (7.5%) (42.1%) Basic polymers Synthetic rubbers Plastics & organic synthesis products Revenue Split by Product Intermediates & other chemicals Raw NGL % 8 10 MTBE & other fuels Processing services, trading & other sales Naphtha LPG Natural gas Europe Revenue Split by Region By region 9M M Asia CIS Other % 58 Russia 7

8 PERFORMANCE BY PRODUCT GROUP LPG Natural gas Naphtha MTBE Raw NGL % % % % % Basic Polymers Synthetic Rubbers Plastics & Organic Synthesis Intermediates & Other Other Revenue 17.1 (3.1%) (20.1%) % (15.8%) Trading and other sales Sales of processing services 12.0 (42.1%) 6.9 8

9 ENERGY PRODUCTS: SALES VOLUMES AND PRICE DYNAMICS LPG Sales volumes, 000 tonnes Change in effective avg. selling price, % Natural Gas Sales volumes, mln cubic metres Change in effective avg. selling price, % Naphtha Sales volumes, 000 tonnes Change in effective avg. selling price, % (0.6%) +10.0% 1,968 2,165 7,665 (5.6%) +16.5% 8,929 (1.9%) % MTBE Sales volumes, 000 tonnes Change in effective avg. selling price, % (6.4%) +14.6% Raw NGL Sales volumes, 000 tonnes Change in effective avg. selling price, % (14.4%) % 515 Key Factors Higher sales volumes in majority of the products Production growth Growth in raw NGL production on higher capacity utilisation; higher purchases from 3 rd parties Increase in natural gas sales volumes on inventory sales Lower selling prices across the product range largely following international market prices Decline in LPG export prices partially compensated by lower export duties and change in export geography in Q3 13 Lower raw NGL selling prices reflect increased supply in Russia, particularly in Western Siberia Natural gas selling price affected by a one-off change in the delivery basis to ex-field Net of this effect selling price for natural gas increased by 12.0% y-o-y 9

10 PETROCHEMICALS: SALES VOLUMES AND PRICE DYNAMICS Basic Polymers Synthetic Rubbers Key Factors Sales volumes, 000 tonnes Change in effective avg. selling price, % (0.6%) (2.5%) Plastics & Organic Synthesis Sales volumes, 000 tonnes Change in effective avg. selling price, % +7.3% % Sales volumes, 000 tonnes Change in effective avg. selling price, % +0.9% Intermediates & Other 454 (20.9%) Sales volumes, 000 tonnes Change in effective avg. selling price, % +3.6% (18.7%) 369 Basic polymers: Lower sales volumes as a result of a decrease in production due to a biennial maintenance shutdown in Tomsk partially compensated by expanded PP trading activities Largely flat prices Synthetic rubbers: Largely flat sales volumes on focused inventory sales started in Q2 13 and continued in Q3 13, largely offset by lower 3 rd -party purchases Continuous downward pricing trend for all rubber grades but butyl rubber Plastics & organic synthesis: Higher sales volumes due to launch of the second EPS production line in Q3 12 and consolidation of BIAXPLEN from Q2 12 Largely resilient demand and prices Intermediates & other chemicals: Lower sales volumes due to Caprolactam decommissioning 10

11 NET OPERATING EXPENSES STRUCTURE AND DYNAMICS Net Operating Expenses (1) Feedstock & Materials Processing Services Y-o-Y dynamics 73% 75% +2.1% Structure Repairs & maintenance Goods for resale Depreciation & amortisation Staff costs Other Energy & utilities % 9M 2013 Feedstock & materials Transportation & logistics 21% 24% RR 5.0 bln % 0% 2% RR 2.8 bln % Growth Factors Transportation & Rent (2) Depreciation & Amortisation The increase attributable to Higher feedstock and materials on higher hydrocarbon feedstock purchasing volumes and APG purchase price Growth in processing services due to Yugragazpererabotka deconsolidation Higher D&A expenses due to commissioning of new production facilities, as well as consolidation of BIAXPLEN from Q2 12 Higher rent expenses on increase of leased rolling stock due to Russian Railways bottlenecks Increase in transportation & logistics costs on higher average railway tariff, longer delivery distances and higher transported volumes largely compensated by decline in natural gas transportation costs Note: (1) Operating expenses before equity-settled share-based payment plans. (2) Transportation and logistics, rent expenses. x% 16% 16% RR 1.7 bln % 32.6 Transportation & logistics Rent expenses % of revenue 4% 4% RR 1.3 bln %

12 NET OPERATING EXPENSES STRUCTURE AND DYNAMICS (CONT D) Y-o-Y dynamics 73% 75% +2.1% Net Operating Expenses (1) Structure Repairs & maintenance Goods for resale Depreciation & amortisation Staff costs Other Energy & utilities Feedstock & materials % 9M Transportation & logistics Energy & Utilities 11% 10% ( RR 2.9 bln) 22.1 (13.1%) 19.2 Goods for Resale 4% 3% ( RR 2.3 bln) 7.8 (30.3%) 5.5 Compensating Factors Staff Costs Other Items The increase in net OpEx partially compensated by: Lower energy and utilities costs primarily due to Yugragazpererabotka deconsolidation Lower purchases of goods for resale on discontinuation in Q2 12 of trading activities in favour of mineral fertilisers business divested in 2011 lower purchases of synthetic rubbers under 3 rd -party processing arrangements PP reclass Lower staff costs due to one-off charge in Q2 12 Net effect of Yugragazpererabotka deconsolidation, since higher third-party processing services offset by deconsolidation of energy & utilities, staff costs, repairs & maintenance, etc. Note: (1) Operating expenses before equity-settled share-based payment plans. x% 10% 10% ( RR 1.4 bln) 20.6 (6.7%) 19.2 % of revenue 7% 7% 14.6 ( RR 1.1 bln) 13.5 (7.5%) 12

13 CASH FLOW STATEMENT HIGHLIGHTS Key Developments Net cash from operating activities increased by 4.1% y-o-y primarily due to positive impact from WC changes partially offset by decline in EBITDA Net cash used in investing activities increased by 87.3% y-o-y on low base effect due to proceeds from disposals of non-core businesses in 2012 CapEx growth of 9.2% y-o-y low base effect due to switch from project to equity financing of RusVinyl Net cash used in financing activities decreased by 69.9% y-o-y due to semi-annual dividend in H1 13 vs. FY 11 dividend in H1 12 lower net debt repayment RR mln, except as stated Nine months ended 30 September Change % Net cash from operating activities 57,175 54, % Changes in working capital 8,930 1, % Net cash used in investing activities, including (55,642) (29,707) 87.3% PPE (52,605) (48,165) 9.2% Additional contribution to the share capital of joint ventures (3,200) - n/m Proceeds from disposal of non-core businesses (1) - 14,335 (100.0%) Net cash used in financing activities, including (9,194) (30,586) (69.9%) Dividends (7,625) (21,785) (65.0%) Effect of exchange rate changes on cash and cash equivalents Key Highlights (63) (398) (84.2%) Net decrease in cash and cash equivalents (7,724) (5,795) 33.3% Notes: (1) Includes proceeds from disposal of the mineral fertilisers business net of related income tax of RR 900 mln, as well as proceeds from the disposal of Voronezh Tyre Plant and Kirov Tyre Plant. 13

14 DEBT STRUCTURE AND MATURITY PROFILE Key Highlights Total debt remained largely flat Net debt increased by 7.3% y-o-y due to lower cash and cash equivalents on CapEx financing and semi-annual dividend payment, primarily in Q2 13 RR 4.5 bln (1) in debt to RN Holding deconsolidated due to change in accounting treatment of Yugragazpererabotka As of 30 Sep 13, all of the debt was unsecured, except for RR 15.4 bln outstanding under the Tobolsk-Polymer project finance facility, except as stated Key Figures 30 Sep Jun Dec 2012 Change, % vs 31 Dec 2012 Debt (1.8%) Cash & cash equivalents (56.9%) Net debt % Average loan tenor (years) Available credit lines 71.8 (2) (3.1%) Debt / EBITDA 1.19x 1.21x 1.17x Net debt / EBITDA 1.12x 1.16x 1.00x EBITDA / Interest (3) 16x 16x 22x Debt Maturity Profile Debt Currency Split 30 Sep 13 RR 30 Sep EUR USD % <1y 1-2y 2-5y >5y 83 Notes: (1) Includes principal amounts of debt owed by SIBUR to RN Holding and debt owed by Yugragazpererabotka to RN Holding. Excludes accrued interest. (2) Of which an equivalent of RR 21,156 mln was committed. (3) Interest represents accrued interest, i.e. includes interest expense and capitalised interest. 14

15 FINANCIAL CALENDAR 2014 Event Date FY 2013 Operational and Financial Results Week of 17 March 2014 Q Operational and Financial Results Week of 16 June 2014 MAR 2014 M T W T F S S JUN 2014 M T W T F S S Q2 and H Operational and Financial Results Week of 8 September 2014 Q3 and 9M 2014 Operational and Financial Results Week of 8 December 2014 SEP 2014 M T W T F S S DEC 2014 M T W T F S S

16 Questions and Answers 16

17 Appendix 17

18 EQUITY-SETTLED SHARE-BASED PAYMENT PLANS Increase in Management s Stake On 28 June 2013, the Group s majority shareholders decreased their stake in the Group's share capital in favour of the Group s current and former directors and key management increase in the Group s directors and key management s stake to 17.5% from 5.5% grant of equity-settled share-based payment plans Management motivation for long-term employment Transaction has no impact on the Group s operations and financial results Payment Plans The programme comprises two plans with different vesting conditions: First Plan: granted shares vested to each participant in 5 tranches of 20% of the total shares granted conditional on their employment non-cash charges of RR 3,787 mln expected to be recorded on quarterly basis through H1 14 afterwards the first tranche will be completed and the quarterly charge will decrease Second Plan: granted shares immediately vested one-time non-cash charge of RR 340 mln According to IFRS 2 Share-Based Payment the Group has to: recognise current and past service costs associated with the payment plans as non-cash operating expenses in P&L record the corresponding amounts as an increase in equity in balance sheet There are no current or future cash payments or liabilities under these plans P&L IFRS Treatment 9M 13 9M 12 Revenue 197, ,957 Net OpEx (149,170) (146,093) Equity-settled sharebased payment plans (4,127) - Total OpEx (153,297) (146,093) Operating profit 44,301 52, Income tax expense (7,715) (10,326) Profit for the reporting period 34,410 45,176 Balance Sheet As of 30 Sep 13 As of 31 Dec 12 Equity Ordinary share capital 21,784 21,784 Share premium 9,357 9,357 Equity-settled sharebased payment plans 4,127 - Retained earnings 190, ,624 Total equity attributable to the Group s shareholders 226, ,765 18

19 MARKET PRICES Energy Products Basic Polymers Rebased to 100 Rebased to % 9M M M M % 100% 80% 100% 60% 40% Brent LPG DAF Brest LPG CIF ARA (large) Naphtha CIF NWE LPG Sonatrach 80% LDPE CFR China film, Spot PP rafia China Main Port, Spot Synthetic Rubbers Plastics & Organic Synthesis Products Rebased to % 9M 2012 Rebased to 100 9M % 9M M % 110% 100% 80% 60% 40% Styrene butadiene rubber, ESBR 1500 Spot, FD NWE Natural Rubber, NR SMR 20 Butadiene Contract, FD NWE Butyl rubber, IIR 1751 (yanshan) 90% 70% 50% Polystyrene, EPS block FOB Korea 2-ethylhexanol Spot, FD NWE PET FOB China, Spot MEG Contract, FD NWE T2 Butyl acrylate Spot, FD NWE Source: Argus, Bloomberg, ICIS, Malaysian Rubber Board, Chemease 19

20 MARKET PRICES (CONT D) PRODUCT QUOTE SOURCE ENERGY PRODUCTS Oil Brent (USD per bbl) Bloomberg Naphtha Naphtha CIF NWE Argus LPG DAF Brest Argus LPG LPG Sonatrach Argus LPG CIF ARA (large) Argus BASIC POLYMERS LDPE LDPE CFR China film, Spot ICIS PP PP rafia China Main Port, Spot ICIS SYNTHETIC RUBBERS Natural rubber NR SMR 20 Malaysian Rubber Board Butyl rubber IIR 1751 (yanshan) Chemease Butadiene Butadiene Contract, FD NWE ICIS Styrene-butadiene rubber ESBR 1500 Spot, FD NWE ICIS PLASTICS & ORGANIC SYNTHESIS PRODUCTS PET PET FOB China, Spot ICIS Monoethylene glycol (MEG) MEG Contract, FD NWE T2 ICIS 2-ethylhexanol (alcohol) 2-ethylhexanol Spot, FD NWE ICIS Butyl acrylate Butyl acrylate Spot, FD NWE ICIS Expandable polystyrene Polystyrene, EPS block FOB Korea ICIS 20

21 TOBOLSK-POLYMER PLANT Design capacity: Propane dehydrogenation: 510,000 tonnes p.a. of propylene Polypropylene (PP) production: 500,000 tonnes p.a. Leading global players involved: Licensors: UOP, INEOS EPC contactors: Tecnimont, LINDE CapEx: ~RR 60 bln (excl. VAT) Project Description Construction completed, official opening in October 2013, at ramp-up stage Production Scheme Strategic Importance for SIBUR Advantageous feedstock access Growing supplies of raw NGL virtually stranded in the region Efficient feedstock delivery via own raw NGL pipeline Monetisation of stranded feedstock through petrochemicals production Infrastructural synergies Infrastructure shared with existing production site (Tobolsk- Neftekhim) Close proximity to Tobolsk GFU SIBUR`s main feedstock processing facility Market potential PP demand growth in Russia and CIS; import substitution Access to key export markets: Europe and Asia Strategic Importance for Russia Raw NGL 3.8 mtpa (6.6 mtpa after 2014 ) GFU Propane 612 ktpa Dehydrogenation Propylene 510 ktpa TOBOLSK-POLYMER PP-500 Contribution to the development of Russian economy, inter alia through production of high-quality materials needed to upgrade and modernise the country s infrastructure Contribution to the development of the region`s economy, including creation of approximately 1,000 new jobs (incl. vendors and contractors) Tobolsk-Polymer is on the government s top-priority project list in the region Part of the government s APG utilisation programme 21

22 UST-LUGA TRANSSHIPMENT FACILITY IN THE LENINGRAD REGION Project Description LPG and light oils transshipment facility at Ust-Luga sea port in the Leningrad region Estimated storage and loading capacity: LPG: 1.5 mln tonnes p.a. Light oils: 2.5 mln tonnes p.a. The project is aimed to support growth in LPG exports to premium W. European markets Currently at commissioning stage Test loadings of LPG and naphtha tankers began in May 13 Expected launch in 2013 year-end Completion Stage 30 September 13 Overall status: 97% completed Design Equipment & Procurement Construction 100% 100% 97% 22

23 PUROVSK PYT-YAKH TOBOLSK PIPELINE FOR RAW NGL TRANSPORTATION Project Description Construction of a new 1,100 km raw NGL pipeline between Purovskiy gas condensate plant, Yuzhno-Balykskiy GPP (near Pyt- Yakh) and Tobolsk GFU Estimated throughput capacity: c.4 mtpa (Purovskiy GCP Noyabrsk loading rack) c.5.5 mtpa (Noyabrsk loading rack Yuzhno-Balykskiy GPP) c.8.0 mtpa (Yuzhno-Balykskiy GPP Tobolsk GFU) Section between Purovskiy GCP and Yuzhno-Balykskiy GPP: Construction completed and commissioning works started Launch of the section is scheduled for 2014 Estimated launch of the entire pipeline: 2015 Gas condensate pipeline Urengoy - Surgut (Gazprom) Purovskiy GCP Gubkinskiy PUROVSK GPP Completion Stage 30 September 13 Overall status: 57% completed Design Equipment & Procurement Construction 51% 80% 100% Urengoy Center I, II gas pipeline (Gazprom) Nyagan GPP Yuzhno-Balykskiy GPP Urengoy - Chelyabinsk gas pipeline (Gazprom) Muravlenkovskiy GPP Kholmogorskaya CS Yuzhny CTF NOYABRSK Surgutskiy GPP Zapadno-Lovinskaya Surgutskiy ZSK CS Surgutskaya Power Severo-Danilovskaya Station CS NEFTEYUGANSK Pravdinskaya CTF PYT-YAKH TOBOLSK Vyngapurovskiy CGTU GPP Bakhilovskaya Tyumen CS-3 CS CS MEGION Lokosovskiy GPP Vyngayakhinskaya CS Belozerniy GPP Nizhnevartovskiy GPP Nizhnevartovskaya Power Station Nizhnevartovsk Parabel Kuzbass gas pipeline (Gazprom) Tobolsk production site (SIBUR flagship GFU) 23