H Operational and Financial Results. 15 August 2017

Transcription

1 H Operational and Financial Results 15 August 2017

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 OPERATIONAL & FINANCIAL HIGHLIGHTS H Operational Results APG processing volumes flat y-o-y at 10.9 bcm (1) Natural gas production flat y-o-y at 9.5 bcm (1) Raw NGL fractionation volumes increased by 7.7% y-o-y to 3.5 mt LPG production volumes increased by 6.4% y-o-y to 3.0 mt PP production increased by 11.3% y-o-y to 335 kt PE production increased by 9.4% y-o-y to 138 kt Elastomers production increased by 11.3% y-o-y to 243 kt Financial Results Revenue reached RR bln, an increase of 8.1% y-o-y EBITDA reached RR 75.2 bln, an increase of 15.0% y-o-y, EBITDA margin at 35.5% Adj. EBITDA reached RR 78.9 bln (2), Share of JV EBITDA at RR 3.8 bln Net Debt to EBITDA at 1.7x as of 30 Jun 17 Corporate Sale of Uralorgsintez for RR 22 bln ZapSib financing totaled RR 38.8 bln (net of VAT) Overall completion at 56% as of 31 Jul 17 (1) Including Gazprom Neft s share in the processing / production volumes of Yuzhno-Priobskiy GPP. (2) EBITDA including the Group s portion in joint ventures and associates EBITDA 3

4 ZAPSIB PROGRESS UPDATE Progress Update as of 31 July 2017, % Detail Engineering Procurement Construction Project Residual Budget for H (1) 41% $ 33% 26% Project Budget $ 5.2 bln 64% 8% 28% Funding Sources SIBUR own funds NWF and RDIF (2) ECA (3) Recent Milestones Overall execution progress as of 31 Jul 17: 56% vs. 47% as of 30 Apr 17 Overall progress by major units as of 31 Jul 17: Steam cracker 59% PE unit 50% PP unit 52% More than 13,000 construction workers at the site in Jul 17 First deliveries of heavy lift equipment for ethylene cracker and PE unit arrived at Tobolsk port Remaining batch of equipment is on the way on schedule and will be delivered within tight summer-autumn navigation season Significant part of foundations laid Underground pipe laying and works on concrete above the ground level at advanced stage Financing for the project in H1 17 totaled RR 38.8 bln (excl. VAT) The overall progress advanced 53% vs 38% in H1 17 RR 231 bln (excl. VAT) invested as of 30 Jun 17 since the project launch Please follow the link for the video of the construction site: (1) Data as of 30 June Numbers and respective percentages calculated based on exchange rates as of 30 June 2017; RR/USD at 59.1, RR/EUR at (2) Cash balances as of 30 June NWF stands for National Wealth Fund. RDIF stands for Russian Direct Investment Fund. (3) Undrawn amount of ECA (Export Credit Agency). 4

5 MACRO ENVIRONMENT Average Oil Price (Brent) (1) Russian GDP (2) CPI & PPI (y-o-y) (2) USD % % 2016/ /2016 (0.5%) 7.5% 4.4% 5.7% 2.9% CPI PPI Average Exchange Rate (3) RR / USD 70.3 (17.5%) 58.0 EOP Exchange Rate (3) RR / USD (11.8%) (2.6%) Indexation Rate Tariffs Indexation Effective Date 6% Jan 2017 Description Railway Transportation Tariff 9% Jan 2016 Railway Transportation Tariff 31 Dec'15 30 Jun'16 31 Dec'16 30 Jun'17 (1) Bloomberg (2) Russian Federal State Statistics Service (3) CBR 5

6 EBITDA STRUCTURE EVOLUTION AGAINST MOVEMENTS IN OIL Brent (USD/bbl) (47%) SIBUR EBITDA (USD mln) F&E EBITDA O&P EBITDA PE&I EBITDA Unallocated 2, ,053 (17%) 2, (17%) +14% (6%) +18% 2, , , , H LTM SIBUR EBITDA margin 28.5% 35.7% 33.9% 34.9% F&E 34.7% 35.1% 30.9% 34.5% O&P 21.3% 38.8% 45.5% 42.9% PE&I 14.1% 26.4% 23.8% 22.3% Volumes, 000 tonnes Raw NGL fractionation 5,788 6,573 7,246 7,500 % growth 14% 10% 3% Gross petchem production 6,798 7,615 8,111 8,305 % growth 12% 7% 2% (1) (1) Twelve months ending 30 June

7 PRICING ENVIRONMENT Oil and FX Feedstock and Energy (17.5%) 000 USD per tonne (avg. for the period) 000 USD per thousand cubic metres of natural gas (avg. for the period) % 21.2% 27.8% % % 60.2% Brent (USD/bbl) RR/USD Naphtha LPG CIF ARA (large) LPG DAF Brest Eurobob FOB Rotterdam Natural gas (RHS) Olefins and Polyolefins 000 USD per tonne (avg. for the period) Plastics, Elastomers and Intermediates 000 USD per tonne (avg. for the period) % 9.3% 12.1% % 160.5% 15.7% 23.8% 29.1% 13.6% 23.3% 0.6 PP LDPE PP (Russia) 0.4 MTBE PET MEG Expandable polystyrene Natural rubber Butadiene Styrene Source: Argus, Platts, Bloomberg, ICIS, Chemease, Malaysian Rubber Board, Federal Tariff Service of Russian Federation 7

8 USD Equivalents, bln (illustrative) Russian Roubles, bln SIBUR FINANCIAL SUMMARY (1) Revenue Operating Expenses EBITDA (2) Operating Cash Flow CapEx (3) % % % % (42.6%) 48.7 Revenue Operating Expenses Adj. EBITDA EBITDA (2) Operating Cash Flow CapEx (3) +30.9% % % % (30.4%) 0.8 Share of JVs and associates EBITDA (1) Values in USD estimated based on average RR/USD rate of and in H and in H1 2016, respectively. (2) Adjusted EBITDA, including share of the Group s portion in joint ventures and associates EBITDA. (3) Includes purchase of PPE, intangible assets and other non-current assets. 8

9 EBITDA DYNAMICS AND STRUCTURE EBITDA Dynamics (1) EBITDA and EBITDA Margin by Segment 33.3% EBITDA margin 35.5% RR bln EBITDA margin $ 1.0 bln EBITDA ($ equiv.) $ 1.4 bln F&E H H % 35.2% RR 70.4 bln (1.3) 10.7 (1.5) RR 78.9 bln 3.8 O&P H H % 43.1% +12.1% (RR) PE&I H H % 23.5% % ($) Unallocated H H (2.6) (2.1) Adj EBITDA H F&E O&P PE&I Unallocated Adj EBITDA H JV EBITDA H H F&E (Feedstock & Energy) O&P (Olefins & Polyolefins) PE&I (Plastics, Elastomers & Intermediates) Unallocated Share of JVs and associates EBITDA (1) EBITDA including the Group s portion of joint ventures and associates EBITDA. 9

10 F&E (FEEDSTOCK AND ENERGY) SEGMENT HIGHLIGHTS RR bln 27% Segment Financial Performance % 35.2 External Revenue Structure H External Revenue EBITDA EBITDA margin, % Ext. Revenue: +2.3% EBITDA: +43.9% Key Factors External Revenue: Higher international benchmark prices for liquids, partially offset by RR appreciation Lower external sales volumes of liquids on lower raw NGL purchases EBITDA: Wider spreads on higher international benchmarks for liquids Higher total sales volumes of LPG on production growth (incl. intercompany sales) Lower transportation costs largely due to lower gross sales of raw NGL, partially offset by higher deliveries of LPG and naphtha to our crackers Product Revenues Development (% change y-o-y) (1) Naphtha 14 Other sales 1 Volume Price Total LPG +1.1% +18.8% +20.1% Natural gas 28 % 56 LPG Natural gas +0.6% (0.1%) +0.5% Naphtha (31.5%) 13.5% (22.3%) Raw NGL (99.9%) 13.1% (99.9%) (1) Represents external revenue 10

11 O&P (OLEFINS & POLYOLEFINS) SEGMENT HIGHLIGHTS RR bln 48% Segment Financial Performance 43% External Revenue EBITDA External Revenue Structure H Olefins Other EBITDA margin, % Ext. Revenue: (0.3%) EBITDA: (5.8%) Key Factors External Revenue: Higher sales volumes largely attributable to higher PP and PE production on increased average capacity utilisation rates Lower average selling prices for PP, PE and BOPP-films despite higher international benchmarks were attributable to RR appreciation that outpaced international benchmark prices dynamics EBITDA: Tighter spreads on higher liquids feedstock costs due to higher netbacks Product Revenues Development (% change y-o-y) (1) Volume Price Total BOPP-film PE % 46 PP PP +7.7% (4.7%) +2.6% PE +16.7% (6.9%) +8.6% BOPP-films +3.0% (12.6%) (10.0%) Olefins +0.8% +7.1% +8.0% (1) Represents external revenue 11

12 PE&I (PLASTICS, ELASTOMERS & INTERMEDIATES) SEGMENT HIGHLIGHTS RR bln 27% 66.6 Segment Financial Performance % External Revenue Structure H Intermediates and other chemicals Other sales External Revenue EBITDA EBITDA margin, % Ext. Revenue: +14.4% EBITDA: +0.6% Key Factors External Revenue: Higher elastomers revenue on the significant increase in international market prices, partially negated by the RR appreciation Higher sales of intermediates on production at O&P and PE&I EBITDA: Tighter spreads on higher liquids feedstock costs due to higher netbacks Higher MTBE trading volumes & lower production volumes Product Revenues Development (% change y-o-y) (1) Volume Price Total MTBE and fuel additives % 31 Plastics & Organic Synthesis Plastics & Organic Synthesis +1.2% (1.0%) +0.1% Elastomers +4.3% +33.8% +39.6% 36 MTBE & Fuel Additives +12.8% (7.3%) 4.6% Elastomers Intermediates and other chemicals +17.5% (3.6%) +13.3% (1) Represents external revenue 12

13 OPERATING EXPENSES STRUCTURE AND DYNAMICS OpEx RR bln 76% 73% +4.0% x% - % of revenue Higher feedstock and materials higher expenses largely related to higher purchase prices for hydrocarbon feedstock due to growth of the respective export netbacks dynamics, partially mitigated by RR appreciation lower NGLs purchases Lower transportation & logistics lower transported volumes, especially raw NGL, partially compensated by higher volumes of LPG and naphtha RR appreciation impact on cost of international logistics partially offset by railway tariff indexation (+6% in Jan 2017) Key Factors Higher staff costs growth in NIPIGAZ headcount higher average salaries movements in bonus provision Higher energy & utilities production growth and higher energy and utilities tariffs Tobolsk HPP consolidation and higher fuel and electricity consumption volumes (compensated by lower heat consumption and higher external revenue from power and electricity sales) Higher D&A largely due to upgrade of polyolefins production in Tomsk in September 2016 Higher purchases of goods for resale (compensated by higher external revenue) Almost flat other expenses Feedstock and Materials Transportation & Logistics Staff costs Energy and Utilities Depreciation and amortisation Goods for resale 20% 20% 19% 15% 9% 9% 9% 9% 9% 8% 3% 5% 12.0% (13.7%) % 4.7% 2.4% 68.4%

14 CASH FLOW STATEMENT HIGHLIGHTS H Cash Flow Reconciliation H Cash Flow Reconciliation RR bln RR bln 59.9 (84.9) (12.3) (7.1) (53.8) (7.8) (105.9) (48.7) 22.1 (7.6) (9.4) (36.4) (2.8) (19.4) 41.2 Net OCF CapEx (1) Interest paid Dividends Net debt paid repayments Other Net CF Cash as of Net OCF CapEx (1) M&A Interest Dividends Net debt Other paid paid repayment Net CF Cash as of Key Factors Net cash from operating activities increased by 5.7% y-o-y due to increase in EBITDA largely offset by higher income tax paid CapEx decreased by 42.6% year-on-year despite ongoing ZapSib construction as a result of significant advances paid in H and shifts in project s payments schedule with higher amounts to be paid in the second half of 2017 Additional cash was mobilised from divestment of Uralorgsintez for RR 22.1 bln Net debt repayment lower by 32.3%, as the decrease in conventional debt was partially offset by new withdrawals from ECA-backed facilities for ZapSib funding in H (1) Includes purchase of property, plant and equipment, intangible assets and other non-current assets. 14

15 DEBT PROFILE Key Figures RR bln, except as stated 31 Jul 17 (1) 30 Jun Dec Jul 17 vs. 31 Dec 16, % Total debt (10.6%) Conventional debt (25.7%) ZapSibNeftekhim related debt % Cash & cash equivalents (22.1%) Net debt (8.1%) Conventional net debt (31.9%) ZapSibNeftekhim related net debt % WA loan tenor (years) WA Conventional debt WA ZSN related debt Available credit lines, incl % Committed (2.0%) Leverage Ratios Overview As of 31 Jul 17 vs. 31 Dec 16 total debt decreased by 10.6% mainly due to: substantial repayments of conventional debt despite new drawdowns for ZapSib funding Net debt decreased by 8.1% mainly on substantial conventional debt repayments and financing of ZapSib CapEx from additional cash balances mobilised following Uralorgsintez divestment As of 30 Jun 17 vs. 31 Dec 16 net leverage improved to 1.7x from 2.0x (1.8x from 2.2x in USD terms) conventional net leverage decreased to 0.8x from 1.2x on recent debt repayments ZapSibNeftekhim net leverage increased to 0.9x from 0.8x on on-going project financing Loan portfolio structure as of 31 Jul Jun Dec 16 Debt / EBITDA 2.0x 2.4x USD/RUB/EUR 57% 24% 19% Net debt / EBITDA 1.7x 2.0x Long-term/Short-term 87% 13% Conventional net debt 0.8x 1.2x ZSN related net debt 0.9x 0.8x Net debt / EBITDA (in $) 1.8x 2.2x Fixed/Floating Unsecured 44% 100% 56% 15

16 LIQUIDITY AND DEBT MATURITY PROFILE (1) As of 31 July 2017, RR bln 258 uncommitted credit lines 101 committed credit lines cash & cash equiv Liquidity After 2027 loans Eurobond RR bonds ECA NWF undrawn EUR ECA (1) Items denominated in USD and EUR are converted into RR at RR/USD and RR/EUR FX rates as of 31 July

17 FINANCIAL CALENDAR 2017 Event Date FY 2016 Operational and Financial Results 14 March 2017 Q Limited Operational Update 30 May 2017 H Operational and Financial Results 15 August M 2017 Limited Operational Update November