Analyst Meeting Presentationinvestor.pttgcgroup.com/newsroom/20111213-PTTGC-analystMeetin… ·...
Transcript of Analyst Meeting Presentationinvestor.pttgcgroup.com/newsroom/20111213-PTTGC-analystMeetin… ·...
Analyst MeetingPresentation
December 9, 2011
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Agenda
Strategic Direction and Investment Update
Synergy Project
3Q/11 Performances and PTTGC Financial Position
3
Professional Management Team
Business Units
Ethylene
Propylene
Mix C4
Pygas
HDPE
LDPE
LLDPE
EO / EG
Ethanolamine
Ethoxylate
PhenolBenzene
Paraxylene
Othoxylene
Mixed Xylenes
Toluene
Cyclohexane
Phenol
LPG
Reformate
Light Naphtha
Jet
Diesel
Fuel Oil
Olefins Aromatics Refinery Polymer EO Based
Green HVS Other Services
ME
Fatty Alcohol
Glycerin
Fatty Acid
Ozone Acid
Oil Fuel Chemical
Polylactic Acid
Succinic Acid
D(‐) Lactic Acid
Plastic Additives
Tank Farms
Utilities
Logistics
Engineering
Technique
Consulting
4
Megatrend and Implications to Business
Next billion consumers are not“another billion.”
Required cost structure that support large
production volume at low price
Aging populations represent challenges and
opportunities
New population mainly from developing countries, still low
income consumers
Shift in global growth from West to East
1
shifting to higher value added service and tech
based economy
The “war for talent” will intensify
Smarter, healthier population
2
Access to education& basic healthcare system
support
5
Tech and innovation society
3
Megatrend and Implications to Business
Tech makes highly customized products
at lower price
“Soft innovation”Offers “wealthy”
customers premium products/ services as substitutes for common
consumer purchases
Competing for resources4
Volatility of commodity price and inflation
Focus on Scenario Planning to prepare for shocks and maintain
flexibility in business models
Scramble for basic goods
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AEC 2015 (ASEAN Economic Community 2015)
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Opp
ortu
nit
ies
for
PTT
GC
ASEAN connectivity via basic infrastructure
(Road, Rail, Air) and
virtual linkage(ASEAN Single Window) • Shorten service time
• Lower logistics cost• Expand market coverage along borders
Bring talents inand
Leverage our expertise regionally • Available “Pool of Talents”
• Leverage our expertise outside to explore business opportunity
ASEAN, 20.00%
REW, 80.00%
ASEAN, 21.30%
REW, 78.70%
Export Import
ASEAN is both TH’s key export market and import source
Regional sourcing and
Key target marketMarket Size in 2009: $176,620 mil$199,590 mil
China 12th Five Year of Development Plan (FYP)
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Restructure the economy11
Domestic Demand
International Demand
Domestic consumption dominant economy
Improving social equality22 Protecting the environment33
High energy efficiency and low emission
Opportunities for PTTGC
Govt. support in infrastructure
building
Abundant cheap labor in West side
New complex in resource rich location
(West)Support green
technology, bio-plastic, biodegradable
Promote R&D, specialty chemicals, engineering and high performance
plastics
Business Model from Market Back Megatrends and other external factors
New Products
Elec. & Electronic
Construction
Auto & Transp.
Existing Core
Packaging
Textiles
Home & Personal
End Used Platform PTTGC Business
Shift in global growth
Smarter, healthier population
Tech& innovation society
Competing for resources
Olefins Aromatics Refinery
Polymer EO Based
Green
HVS
Growing of middle class
Aging society
Emerging markets
Urbanization
Alternative energy
Green tech
New patternsof consumption
Water scarcity
Climate change
Fossil fuel scarcity
AEC 2015
ASEAN connectivity
CHN 12th FYP
Mar
ket
back
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Strategic Direction
“To be a Leading Chemical Company for Better Living”
M&A
Organic growth
Corporate Venture fund
Entry Strategies
JV/Alliance
10
Integrated Plant Covering Major Petrochemical Building Blocks with New Product Opportunities
Flexible FeedstockFlexible Feedstock UpstreamUpstream IntermediatesIntermediates DownstreamDownstream
Petroleum ProductsPetroleum Products
New Product Opportunities
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Packaging, Films, Toys, Furniture, Construction
Health and Personal Care products,Pharmaceutical,
Textiles,Packaging, Furniture,
Bio‐Diesel
New Product Opportunities
Packaging, Electronic and Electrical Appliances,Automotives
Current Products New Product Opportunities
Product Applications
Automotives, Electronic and Electrical Appliances,Packaging, Construction,Paints
Automotives, Textiles, Agriculture
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Investment in
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PerstorpHolding AB
Perstorp Holding France SAS
49% 51%
Investment capital of Euro 114.8 million (approximately baht 4,830 million)
Owner of technology and a major manufacturer of Isocyanates in Europe and Asia
Xxx Group of Companies
Investment: Perstorp Holding France SAS
Perstorp France(France)
Perstorp France(France)
Perstorp Coating Inc.
(USA)
Perstorp Coating Inc.
(USA)
100%
Capacity (KTA)TDI 125 ‐HDI 30 15
Isocyanates‐ Toluene diisocyanate (TDI)‐Methylene diphenyl diisocyanate(MDI)‐ Hexamethylene diisocyanate (HDI)
Polyols‐Polyether Polyols
Polyuret‐hane(PU)
1. PU Foam (69%)
2. PU Coating (16%)
3. PU Elastomers and Others (15%)
Total PU Consumption~ 14,369 KTA
•Technology is Major Barrier to entry.• Few major player control market.
Propylene Oxide (PO)
TolueneBenzene
Propylene
System House
Formulation
Major Player1
2
3
• Company’s direction to enter into High-Volume Specialty Business Unit
Polyurethane Business (PU)
15
200
24
24
27
30
45
75
80
85
90
93
120
125
236
390
512
0 100 200 300 400 500 600
All othersShanghai Hua Yi
SinopecPIERO
FormosaOCI Company
Organika ZachemHebei
Dow ChemicalBorsodchem
Tomen CorporationYinguang Chemical
PerstorpMitsui Chemicals
BayerBASF
TDI Global Major Players
TDI Global Major Players
2010 Global Capacity 2,156 KTA
• Top 4 Players account for ~ 65% of Total Capacity• TDI average demand growth in Asia between 2011-
2014 is 6.4%
2010 capacity
Perstorp is TDI producer no.4 globally
Part of Wanhua
own Technology
• Perstorp is one of the key players in Isocyanate business in Europe and Asia• A strategic move to obtain technology through joint venture mode of entry
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Our Next Step
Step in HVS (High Volume Specialty Business)
Downstream derivative using co feed of Olefin and Aromatics chain
Debt free and Cash free scheme
Low impact to PL and BS in short run
Obtain technology and knowhow for TDI market
Build second plant potentially in Asia
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Investment in
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Investment: NatureWorks LLC
World’s leading biopolymer player World scale manufacturing facility located in Blair, Nebraska Annual nameplate capacity of 300mm lbs (140 KTA) Over 20 applications in more than 70,000 store shelves
globally Customers include Wal-Mart, Frito-Lay, and Coca-Cola
About NatureWorks LLC
Biopolymer producer ‐ capacity (mm lbs)
Investment Stake 50%
Investment Amount USD 150 Million
The Investment
PTTGC
PTTCH Inter
PTTGC USA
300
110 99
31 22 10 4 0 00
50
100
150
200
250
300
350
Commercial stageUnder constructionPilot stage
RenewableBiodegradable
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ApplicationsWhat is biopolymer (PLA)?
NatureWorks LLC
NatureWorks’ polylactic acid (PLA) is made from dextrose (sugar) from field corn through fermentation process. PLA is a compostable polymer used in a wide range of packaging (primarily for food), film and fiber application.
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Our Next Step
Build second plant potentially in Asia
Study the possibilities to use feedstock from other region
Use PLA as a basis to design other new products
Develop a more cost effective production process
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Agenda
Strategic Direction and Investment Update
Synergy Project
3Q/11 Performances and PTTGC Financial Position
Feedstock and product Synergies Logistics and Utilities Synergies
Strong Immediate and Identified Long Term Synergies
Synergy Projects Starting fromInvestments
(US$m)
Benefits(US$m/year)
1. Product upgrade
1.1 Offgas (C2/C3+) Q3 2014 32.6 8.4 – 57.7
1.2 C3/C4 stream Immediate 0.1 38.4 – 47.9
1.3 Heavy aromatics Immediate ‐ 0.9 – 2.3
1.4 Heavy Gasoline, Light Cracker Bottoms and Cracker Bottoms
2013 3.9 11.4 – 25.9
1.5 Pure H2 via New PSA
2013 10.3 11.9 – 12.8
2. Cost savings from shared tanks and jetty
2013 37.2 7.4
3. Steam cost reduction
2014 8.0 1.0
TOTAL 92.0 80.2 – 154.1
Feedstock DownstreamIntermediateUpstream
Unit : KTA
NG
Ethane 1,300
Ethane 1,100Propane 168C3/C4 900
NGL 470
Reformate 3,628 ++
Propylene 95++
Ethylene 1,000
Ethylene 500++
CrackerBottom
BZ
Phenol
C3/C4LN
C3/C4
HA
Light CrackerBottom
Heavy Gasoline
1.1
CrackerEthylene 1,000Propylene 25
LDPE 300
LLDPE 400
HDPE 300
HDPE 500
Phenol 200
DistillationCapacity280 KBD
Aromatics
PX 1,195 KTABZ 662 KTA
GSP1,2,3,5,6
Phenol 200
CrackersI1,I4/1,I4/2
Ethylene 1,376Propylene 487
C2/C3+
Pygas
C3+
1.2
1.3
1.4
1.4
1.4
1.5Pure H2via
New PSA
BPA 150
Significant synergies of US$80m - US$154 m annually by 2015 with NPV of US$535 m – US$1,055 m over 15 yrs at 10% discount rate
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Agenda
Strategic Direction and Investment Update
Synergy Project
3Q/11 Performances and PTTGC Financial Position
3.6 4.2 3.8
6.17.0
6.0 6.2
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Jan‐10 Feb‐10 Mar‐10 Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Jan‐11 Feb‐11 Mar‐11 Apr‐11 May‐11 Jun‐11 Jul‐11 Aug‐11 Sep‐11
Dubai ULG 95 Jet Gas Oil Fuel OilDubai Price (USD/BBL)Dubai Price (USD/BBL)
7876 74 84 100 111 106▲2 ▼4 ▲10 ▲16 ▲11 ▼5
ULG95-Dubai Fuel Oil-Dubai
• Dubai price was lower amid concerns over global recession
• Middle distillate cracks remained strong as regional demand picked up while Shell (500 KBD) declared a force majeure
• Strong bunker demand and increased requirement of blending components
• Market GRM remained flat QoQ with positive outlook towards fourth quarter
912 13 14
20 20 19
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
Jet-Dubai
911 12 13
18 19 18
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
Gas Oil-Dubai
13
9 911
13 1417
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
‐3
‐7
‐5
‐8 ‐8 ‐8‐5
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
Oil Price Movement & Cracks
1Q/10 2Q/10 3Q/10 4Q/10 1Q/11 2Q/11 3Q/11
Unit: USD/BBL
Market GRM
25
338
242197
236276
149 170
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
0200400600800
10001200140016001800
Jan‐10 Feb‐10 Mar‐10 Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Jan‐11 Feb‐11 Mar‐11 Apr‐11 May‐11 Jun‐11 Jul‐11 Aug‐11 Sep‐11
Condensate PX FECP BZ SEA SPOT
Aromatics Price Movement & Cracks
620
• Condensate price remained volatile following crude prices
• PX‐Condensate spread improved QoQ due to tightened supply as many plants undertake shutdowns.
• BZ‐Condensate spread improved QoQ and currently weak from shrinking demand due to gloomy economic outlook.
Condensate Price (USD/Ton)
Condensate Price (USD/Ton)
▲28▼24 ▲90 ▲146
▲120 ▼43
1Q/10 2Q/10 3Q/10 4Q/10 1Q/11 2Q/11 3Q/11
PX FECP ‐ Condensate BZ SEA SPOT ‐ Condensate
Unit: USD/Ton
648 624 714 860 980 937
435359
289
460
692619 595
1Q/10 2Q 3Q 4Q 1Q/11 2Q 3Q
26
3.15
5.78 6.290.08
(0.85)
0.03
0.22
1.83
(0.75)
3Q/10 2Q/11 3Q/11
Market GIMHedging Gain/(Loss)Stock Gain/(Loss) net LCM
165 157 161
110 116 118
3Q/10 2Q/11 3Q/11
Crude + Other Feedstocks
Condensate + Other Feedstocks
Total Intake
Maximized Production with High Flexibility
MillionBBL 25.28 24.85 25.72
Unit: KBD
279275 273
• In 3Q/11, AR1 (refinery) had a planned shutdown during 4‐11 Sep 11 to clean up visbreakingunit (VBU), yet total intake remains high QoQ and YoY
• Market GIM of 5.57 USD/bbl or accounting to 4,335 million Baht, contributed from higher market GIM QoQ and YoY following increased product spreads, though a few stock loss as oil prices were volatile during the quarter.
Gross Integrated Margin (GIM)
6.76
Accounting GIM
27
3.45
5.57
Unit: USD/BBL
PTTAR: Profit and Loss Statement
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QoQ YoY Period3Q/ 2011 2Q/2011 3Q/2010 % Change % Change 1‐18 Oct 2011
Revenue 99,809 93,335 66,053 7% 51% 13,959 Feedstock Cost (93,545) (87,701) (62,317) 7% 50% (12,720)Utilities (1,369) (1,264) (1,204) 8% 14% (231)Market GIM 4,895 4,370 2,532 12% 93% 1,008 Hedging Gain/(Loss) 24 (640) 62 ‐104% ‐61% (23)Stock Gain/(Loss) net LCM (584) 1,385 171 ‐142% ‐442% (355)Accounting GIM 4,335 5,115 2,765 ‐15% 57% 630 Processing Cost (636) (806) (709) ‐21% ‐10% (356)Selling and admin cost (406) (441) (370) ‐8% 10% 226 OPEX (1,042) (1,247) (1,079) ‐16% ‐3% (130)Other income 54 561 14 ‐90% 286% 21 EBITDA 3,347 4,429 1,700 ‐24% 97% 521 Net interest expense (777) (742) (679) 5% 14% (254)Depreciation (1,400) (1,319) (1,345) 6% 4% (234)Profit/(Loss) from subsidiaries 289 402 146 ‐28% 98% 73 FX gain/(loss) (214) (237) 989 ‐10% ‐122% 270 Income before tax 1,245 2,533 811 ‐51% 54% 376 Income Tax 6 (392) (117) ‐102% ‐105% 447 Net income 1,251 2,141 694 ‐42% 80% 823 EPS 0.42 0.72 0.23 ‐42% 83% 0.27
Quarter M. Baht
Unit : $/MT 3Q‐11 2Q‐11 3Q‐10 % ChangeQoQ
% ChangeYoY
NAPHTHA (MOPS) 937 977 649 (4%) 44%ETHYLENE (SEA) 1,160 1,291 903 (10%) 28%PROPYLENE (SEA) 1,394 1,487 1,063 (6%) 31%HDPE (SEA) 1,399 1,389 1,120 1% 25%LLDPE (SEA) 1,338 1,380 1,150 (3%) 16%LDPE (SEA) 1,586 1,683 1,320 (6%) 20%MEG (SEA) 1,343 1,300 852 3% 58%
Ethylene ‐ Naphtha 223 314 254 (29%) (12%)HDPE ‐ Naphtha 462 412 471 12% (2%)LLDPE‐Naphtha 401 403 501 (0%) (20%)LDPE‐Naptha 649 706 671 (8%) (3%)MEG ‐ 0.65Ethylene 589 461 265 28% 122%
Olefins Product Prices and Spread
YoY : Overall product prices increased however the spreads decreased. This was due to the raising price of crude oil and naphtha price.
QoQ : Produce prices decreased due to the concern on the uncertain world economics, as a result, decreased in demand.
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308,608
612,408 524,020
66%
85%
72%
0%10%20%30%40%50%60%70%80%90%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
3Q/10 2Q/11 3Q/11
Olefins U‐Rate
132,460
205,437 179,402
67%
103%
89%
0%
20%
40%
60%
80%
100%
120%
‐
50,000
100,000
150,000
200,000
250,000
3Q/10 2Q/11 3Q/11
HDPE U‐Rate
97,235
59,612
94,980
96%
60%
94%
0%
20%
40%
60%
80%
100%
120%
‐
20,000
40,000
60,000
80,000
100,000
120,000
3Q/10 2Q/11 3Q/11
LLDPE U‐Rate
0
61,244
9,238 0%
82%
12%
0%
20%
40%
60%
80%
100%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
3Q/10 2Q/11 3Q/11
LDPE U‐Rate
64,557
47,041 58,780
65%48% 59%
0%
20%
40%
60%
80%
100%
‐
10,000
20,000
30,000
40,000
50,000
60,000
70,000
3Q/10 2Q/11 3Q/11
MEG U‐Rate
Olefins Production Volumes & U-Rate
Olefins HDPE
MEGLDPE
LLDPE
YoY ‐ Overall production volume and utilization rates improved mainly due to the COD of PTTPE Cracker.
QoQ ‐ Production and utilization rate of olefins, HDPE and LDPE decreased due to shutdowns in 3Q/11 for 42 days (of PTTPE Plant), 23 days, and 81 days respectively. However, LLDPE and MEG production and utilization rate improved.
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tons tons tons
tons tons
18% 15%9%
18% 18% 17% 16%7%
19% 18% 17% 22% 18% 14% 11%
82% 85%91%
82% 82% 83% 84%93%
81% 82% 83% 78% 82% 86% 89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1Q/08 2Q/08 3Q/08 4Q/08 1Q/09 2Q/09 3Q/09 4Q/09 1Q/10 2Q/10 3Q/10 4Q/10 1Q/11 2Q/11 3Q/11
Naphtha Gas
583 609 584 379 623 648 663 626 443 571 460 562 860 858 740
Decreased in total feedstock of 14% was due to the planned shutdown of PTTPE cracker. As a result, more gas feedstock were fed into I-1 and I-4/2 and feed less naphtha to I-4/1.
Olefins Feedstock Used
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Unit: K Ton
Olefins Sales Volumes
Sales of olefins and HDPE increased YoY, however decreased QoQ due to PTTPE for 1 year warranty shutdown.
Sales of LDPE decreased due to an equipment repair shutdown together with planned turnaround, in total of 81 days in 3Q/11.
Sales of MEG increased YOY and decrease QoQ due to demand of the downstream product of MEG as the concern of the world economic the market confidence to stock up.
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% Change % Change QoQ YoY
Olefins 215,873 239,367 175,690 (10%) 23%
HDPE 175,399 203,046 134,410 (14%) 30%
LLDPE 81,359 64,171 123,840 27% (34%)
LDPE 37,134 50,331 n.a. (26%) n.a.
MEG 63,032 54,425 72,158 16% (13%)
TOTAL 572,797 611,340 506,098 (6%) 13%
3Q/11 3Q/102Q/11
Unit: Ton
PTTCH: Profit and Loss Statement
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QoQ YoY PeriodM.Baht Q3/ 2011 Q2/2011 Q3/2010 % Change % Change 1‐18 Oct. 2011
Sales Revenue 34,985 38,192 24,732 ‐8% 41% 6,348 Feedstock cost (22,077) (23,735) (16,860) ‐7% 31% (3,851)Processing Cost (4,651) (4,587) (4,016) 1% 16% (921)Other Revenue 876 899 724 ‐3% 21% 154 SG&A Expenses (1,568) (1,620) (1,418) ‐3% 11% (486)EBITDA 7,566 9,148 3,163 ‐17% 139% 1,244 Depreciation & Amor. (1,864) (1,791) (1,325) 4% 41% (364)EBIT 5,702 7,357 1,837 ‐22% 210% 879 Net Interest Expense (434) (479) (539) ‐9% ‐20% (83)FX Gain(Loss) 25 (310) 908 ‐108% ‐97% 293 Share of gain from invest 467 571 323 ‐18% 45% 94 Corporate Income Tax (677) (564) (399) 20% 70% 18 Net Profit before Minority 5,084 6,575 2,130 ‐23% 139% 1,201 Earning attribut. to MI (114) (143) (117) ‐20% ‐3% (20)Net Profit 4,970 6,432 2,013 ‐23% 147% 1,182 EPS (Baht/Share) 3.27 4.24 1.35 ‐23% 143% 0.78
Quarters
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Preliminary PTTGC Day 1 Financial Position
Cash
CA
PP&E
Non‐CA
Equities
Loans
Other Liabilities
393,624 (M. Baht)
32,240
237,125
98,394
25,865 55,854
130,339
207,431
M.Baht M.Baht %Sales Revenue 414,824 100%Feedstock Cost (352,561) (85%)Processing Cost (9,135) (2%)Other Revenue 2,506 1%SG&A Expenses (6,314) (2%)EBITDA 49,320 12%Depreciation and Amor. (11,754) (3%)EBIT 37,566 9%Net Interest Expense (4,533) (1%)FX Gain (Loss) (903) (0%)Share of Gain from Invest. 284 0%Corporate Income Tax (2,678) (1%)Net Profit before Minority 29,735 7%Earning attribut. To MI (1,771) (0%)Net Profit 27,964 7%
9M/ 2011 + 18 Days
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Recap and looking forward1. Achieved project expansion and volume increase
• New 1 MTPA Ethane cracker since December 2010 and 1 MTPA of Polyethylene (HDPE 300 KTA, LLDPE 400 KTA and LDPE 300 KTA) since 2010 and beginning 2011.
• 30,000-40,000 TPA paraxylene following aromatics debottleneck
• Euro IV commercial run before target (7 November 11)
2. Expected in 2012 run with full capacity approximately 90% U rate.
3. PTT’s flagship in Chemical businesses with Full range basic petrochemical building blocks to enhance the downstream investments
4. Target strong synergy benefits in short and medium terms
• Immediate $40-50 million/year
• Within 2014 $40-100 million/year
5. Entering into PU business through the investment in Perstorp
• And diversify into bio-based plastic via investment in Natureworks
6. Strong financial position to support business growth with disciplined financial policy
Thank [email protected] www.pttgcgroup.comTel : 662‐2658500
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