FY12 ANALYST MEETING INTERCONTINENTAL HOTEL...

39
FY12 ANALYST MEETING INTERCONTINENTAL HOTEL BANGKOK FEBRUARY 21, 2012 – 10.30-12.00 hrs

Transcript of FY12 ANALYST MEETING INTERCONTINENTAL HOTEL...

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FY12 ANALYST MEETING INTERCONTINENTAL HOTEL BANGKOK

FEBRUARY 21, 2012 – 10.30-12.00 hrs

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Disclaimer

This presentation includes forward-looking statements that are subject to risks and uncertainties, including

those pertaining to the anticipated benefits to be realized from the proposals described herein. This

presentation contains a number of forward-looking statements including, in particular, statements about

future events, future financial performance, plans, strategies, expectations, prospects, competitive

environment, regulation and supply and demand.

PTTGC has based these forward-looking statements on its views with respect to future events and

financial performance. Actual financial performance of the entities described herein could differ

materially from that projected in the forward-looking statements due to the inherent uncertainty of

estimates, forecasts and projections, and financial performance may be better or worse than anticipated.

Given these uncertainties, readers should not put undue reliance on any forward-looking statements.

Forward-looking statements represent estimates and assumptions only as of the date that they were

made. The information contained in this presentation is subject to change without notice and PTTGC does

not undertake any duty to update the forward-looking statements, and the estimates and assumptions

associated with them, except to the extent required by applicable laws and regulations.

2

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Agenda

FY12 Highlights

Strategy and Execution

FY12 Operating Results

Market Outlook

3

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Macroeconomic View

4

Year 2012 is the year of challenge for many petrochemical

players due to shrinking demand from uncertainty in global

economy and volatility of oil prices

Year 2013, however, petrochemical industry expected to be

improving as a result of demand recovery and tight supply

especially in PX market for 1H13 and MEG market for FY13

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FY12 Business Environment and Operations

5

Dubai price remained high throughout the

year, with FY12 averaged at 109 USD/bbl,

and 4Q12 averaged at 107 USD/bbl

Opening-closing Dubai showed the reflection

of inventory gain/loss • 2012 : 106 – 108 USD/bbl, 2011: 92 – 105

USD/bbl

Price/spread in mixed performance

compared to previous year • HDPE 1,380 USD/ton +1% YoY

• PX-Condensate 553 USD/ton - 11% YoY

• BZ- Condensate 263 USD/ton + 46% YoY

• Gasoil- Dubai 17 USD/bbl - 6% YoY

• MEG 1,179 - 10% YoY

THB appreciation of 1.05 THB/USD with

disciplined currency hedge contributed to FX

gained of THB 911 million

70.00

80.00

90.00

100.00

110.00

120.00

130.00

140.00

150.00

Jan 1

1

Feb 1

1M

ar-

11

Apr-

11

Ma

y-1

1

Jun-

11

Jul-1

1

Aug-1

1

Sep-1

1

Oct

-11

Nov-1

1

Dec-

11

Jan-1

2

Feb-1

2

Mar-

12

Apr-

12

Ma

y-1

2

Jun-

12

Jul-1

2

Aug-1

2

Sep-1

2O

ct-1

2

Nov-1

2

Dec-

12

Jan-1

3

Feb-1

3

Dubai 2011-2012 ($/bbl)

Poor US, EU and China

economic data Uncertainty of

stability in EU

Explosion in many

refinery plants

Unrest in MENA

29.50

30.00

30.50

31.00

31.50

32.00

THB against USD 2011-2012

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Key Financial Highlights YoY Stronger on volume driven

6

2011 2012 % YoY 4Q/2012

Revenue 500,305 562,811 12% 144,595

EBITDA 54,423 55,879 3% 16,281

Net Income 30,033 34,001 13% 10,389

EPS (THB/share) 6.7 7.5 13% 2.3

Adjusted EBITDA* 48,920 55,045 13% 16,312

Note* Exclude impact of inventory value and commodity hedging

Unit in THB million

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-56%

5%

-10%

1%

3%

46%

-13%

-6%

10%

13%

39%

26%

15%

2%

-1%

26% Refinery

Aro

(BTX)

Olefins

Polymers

MEG

Green

Phenol

Gas

Year-Over-Year Volume and Price Trends Volume driven, utilization rates improved while prices were in mixed performance

7

Diesel-Dubai

PX-Cond

BZ-Cond

Ethylene

HDPE

MEG

ME-CPO

Phenol-BZ

FY12 Key Sales Volume Indicators FY12 Key Product Price/Spread Indicators

PTTGC’s Plants Utilization Rate

Better gas flow from GSP – 3.1 Mton,

increased 10% from year 2011 at 2.81 Mton

Volume driven thus higher utilization rates

FY11 FY12

Refinery 90% 100%

Aromatics 88% 86%

Olefins 80% 88%

Polymers 80% 96%

MEG 65% 88%

Green - FA 81% 101%

Green - ME 62% 93%

Phenol 115% 119%

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2012 Key Milestones

8

A Focus on

Integration

Building a

Strong

Fundamental

Expanding

Globally

PTTAR & PTTCH culture alignment

Work process integration - 1SAP system, IMO alignment

Synergy projects value expected of USD 80-150 million

Linear programming to optimize major plants operation (Refinery, Aromatics,

Olefins and major Olefins Derivatives)

Business restructure to streamline business operations and management i.e. TEA

to be combined with TOCGC (Others are in consideration)

3 Excellence Projects (Operation excellence, marketing excellence, CAPEX

excellence from 2012-2017

Completed transactions with Nature Works and Vencorex

MOU with Sinochem

MOU with partners in Petronas RAPID

USD 1 bn bond issuance

Footstep in Myriant to build a semi-commercial plant to be complete by mid

2013

Nature Works: Study possibility of constructing second PLA plant in Asia

Key Development

in Sustainable

Growth

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48%

20%

21%

2% 3% 6%

Segmental Results – FY12 Olefins and Olefins Derivatives Business contributed greatly to EBITDA

9

204

141

105

11 16 23

270

114 116

13 16 33

Refinery Aromatics Olefins andDerivative

Green Phenol Others

FY11 FY12

6.6 4.7

29.6

0.8 3.1 4.1

8.2 8.8

31.6

0.8 1.0

4.6

Refinery Aromatics Olefins andDerivative

Green Phenol Others

FY11 FY12

Unit in THB billion Unit in THB billion

Adjusted EBITDA Margin by Core BU

Revenue Breakdown Adjusted EBITDA Breakdown

15%

16%

57%

2% 2%

8%

FY12 Revenue Breakdown (%) FY12 EBITDA Breakdown (%)

Refinery Refinery

Aromatics

Aromatics Olefins

Olefins

Phenol

Green

Green

Phenol Others Others

FY11 FY12

Refinery 3% 3%

Aromatics 3% 8%

Olefins and Derivatives 28% 27%

Phenol 20% 6%

THB

563 Bn

THB

55 Bn

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FY12 Sales Portion by Business Unit

10

68%

32%

Refinery

Aromatics

31%

69%

Export

Domestic 8%

92%

Export

Domestic

Export Domestic

Olefins

Export

65%

Domestic 35%

Polymers

Export

Domestic 30%

70%

EO-Based

Export

Domestic 23%

77%

Green (ME, FA)

Total Sales

THB 563 billion

39%

22% PTTGC

Others 39%

34%

35%

31%

PTTGC

34% 33% PTTGC

Others

Others 33%

By Thailand’s Market Share

HDPE

LDPE

LLDPE

Import

Import

Import

Sales portion in quantity (ton)

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Agenda

FY12 Highlights

Strategy and Execution

FY12 Operating Results

Market Outlook

11

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PTTGC’s Strategies Overview

“In 2012, we achieved

EBITDA uplift of USD 87

million from operational

excellence, marketing

excellence, and synergy

projects”

12

We remain committed to:

1. Enhancing our core uplift

2. Creating long-term value via HVS growth

3. Emerging into green business models

A Focus on Execution

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Operational Excellence

13

------- LAGGARDS-------- -------- LEADERS ------

To achieve 1st quartile of energy efficiency and reliability

Refinery

- Alternative feedstock

- Opportunity crude and

condensate

- Processed high tan crude

- Reliability Improvement

- Catalyst improvement

- Yield improvement

- Plant flexibility improvement

- New feedstock sourcing (Condensate)

- Yield Improvement

- Shutdown I-4/1 in Nov for Quench

Tower Modification

- Variable cost improvement

- Energy saving program for HDPE I-1

- Hexane/nitrogen recovery unit

installation

Aromatics

Olefins and Olefins Derivatives Major Activities in 2012

Benefit Expected per Year

2013-2017

~91 MUSD

2012 Achievement

EBITDA uplift

53 MUSD

CAPEX for Op Ex

2013-2017

~150 MUSD

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Marketing Excellence

14

- Expanded domestic sales portion of - LLDPE product 34% (2012 target = 27%)

- LDPE product 34% (2012 target = 30%)

- Total PE product: 36% (2012 target = 32%)

- Increased portion of high value products

(HVP) from 7% to 10% of total

polymers revenue, and expanded 7

grades of HVP

Major Activities for Polymers BU in 2012

Benefit Expected per Year

2013-2017

~85 MUSD

2012 Achievement

EBITDA uplift

25.1 MUSD

CAPEX for Mkt Ex

2013-2017

~10 MUSD

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Natural Gas

Crude

Condensate

Cracker

Aromatics Plants

Refinery

Reformate, Heavy

Naphtha

Pygas

Condensate Residue,

Hydrogen

Light Naphtha

C3,C4

OffGas

Cracker Bottom,

Hydrogen

Synergy Projects Update

15

Exchange Stream

Products

By-Products

2012 Achievement

EBITDA uplift 9.07 MUSD

Synergy Projects Expected

Investment (M. USD)

Expected

Benefit per

year (M. USD)

Target

Completion Progress

1.Product upgrade

1.1 Offgas 177.7 76.7 4Q/14

- BoD approved additional budget for

enclosed ground flare, pipe-rack and

pipeline around 35.7 MUSD.

- Tie-in works in each plant are on going.

1.2 C3/C4 Stream 5.5 35.1 End of

2012

- Completed.

- Benefit capture depends on economic

and supply availability of each feed

type. (subject to HDPE spread)

1.3 Heavy Aromatics 0.0 1.3 Jan. 1,

2012

- Completed.

1.4

Heavy Gasoline,

Light Cracker

Bottoms and

Cracker Bottom

5.7 28.8 End of

2012

- Completed.

- 1st batch of 3-stream was transferred

to refinery on Dec 20th, 2012.

1.5 Pure H2 via New

PSA 19.8 6.6 2Q/14

- Construction is 24%- on schedule

- Completed commercial negotiation for

PSA package.

- BOI approved PSA project to get

investment promotion.

2. Cost Saving from

share tanks and jetty 0.0 0.6 2Q/12

- Signed contract with Thai Tank Terminal

to maximize utilization of existing idle

facility – completed.

3. Stream cost

reduction

Under

Study

Under

Study 4Q/14

- Construction permit for box culvert is on

going to discuss with external related

parties, plan to get permit within

Q1/2013.

Total 208.7 149.2

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1. Debottleneck - PTTPE Cracker and Polymer Plants Under study of plant configurations, expected additional capacity of 15-20%

Downstream debottleneck expansion to capture fully-integrated margin by converting additional

ethylene into downstream products

2. Debottlenecking - PX capacity Increases existing capacity at AROII from 655Kton to 770Kton

(total PX capacity from AROI and ARO II to increase from 1,195 Kton to 1,310 Kton)

Expects completion by 3Q/15

3. Quench oil tower modification project Under study on technical and planning

To reduce naphtha: gas portion (liquid/vapor ratio) from 0.95 to 0.60 at I4-1 (mixed feed cracker)

Additional gas of 18 ton/hour

Expects completion by end 2014

4. C4 Value Enhancement Investment of USD 262 mn

ST: Export mixed C4 to maximize value

LT: To complete BV Project (C4 upgrading to Butadiene (75 kton)/Butene-1 (25kton)

Expects completion by 2013 and starts commercial operation 1Q/14

Debottleneck/ By-Product Value Enhancement

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2011 Target2017

Target2022

Operational Excellence, Marketing Excellence, Capital Expenditure Excellence

Continues to Strive for Strong Profitable Growth

17

Synergy Project Excellence

Debottleneck

563

HVS

Green

Sales in THB Bn

Phase 1: Foundation for Growth Phase 2: The Growth Mode

We aim to grow ~5 percent p.a. in the next ten years

HVS

Green

New Global Hub

Expected EBITDA Benefit

Uplift 15-30%

~ 620 - 650

Actual

2012

Based on constant Dubai crude year 2012 at USD 109 per bbl

~ 800 - 900

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Agenda

FY12 Highlights

Strategy and Execution

FY12 Operating Results

Market Outlook

18

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Performance Summary 2012 vs 2011

1. Refinery

Diesel spread decreased 6%; volume increased 26% - GRM down

2. Aromatics

BZ spread increased 46%, PX spread down 11%; BTX volume down

1% - however P2F better from efficient management of feedstock

sourcing

3. Olefins and Olefins Derivatives

Average prices went down; higher ethane feed (17% up) from PTT

4. Green (ME)

ME spread up 5%, higher volume 39% - u-rates improved

5. Phenol

Spread down 56%; volume increased 13% - U-rate 119% (from 115%)

19

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4.0

-2.0

5.1

1.6

10.0

7.5

1.5 1.9 2.9

2.0

6.6

8.2

1Q/12 2Q/12 3Q/12 4Q/12 2011 2012

EBITDA Adjusted EBITDA

4Q/11 3Q/12 4Q/12 2011 2012 +/-

Market GRM 3.73 5.94 4.66 4.96 4.71 -5%

Hedging Gain/(Loss) -0.40 0.02 0.63 -0.73 0.35 -148%

Stock Gain/(Loss) Net NRV 1.7 2.51 -0.63 2.50 -0.30 -112%

Accounting GRM 5.03 8.47 4.66 6.73 4.76 -29%

YearQuarter

Refinery BU Performance Market GRM softened QoQ, YoY upon lower spreads, however, sales increased from plant’s smooth run

20

13% 13% 14% 14% 14%

46% 52% 50% 48% 50%

12% 9% 8% 11% 9%

28% 27% 28% 27% 27%

4Q/11 3Q/12 4Q/12 FY11 FY12

Total Production Volume in %

Ref+LN+Others

Jet

Diesel

Fuel Oil

149 147 146 131 146

36 55 55

31

51

103% 101% 101%

90%

100%

65%

70%

75%

80%

85%

90%

95%

100%

105%

0

50

100

150

200

250

4Q/11 3Q/12 4Q/12 FY11 FY12

Crude CR+Other feed CDU Rate

Total Intake in KBD CDU Rate

CR+Other

feed

Crude

54 mbbl 69 mbbl

Unit in THB bn

2011 2012

Dubai in 4Q/12 started at 109 usd/bbl and ended at 108 usd/bbl

4Q/11 3Q/12 4Q/12 2011 2012 +/-

Dubai crude 106 106 107 106 109 3%

ULG95-Dubai 10 16 14 14 15 7%

Jet-Dubai 18 20 19 19 18 -5%

Diesel-Dubai 17 19 18 18 17 -6%

FO-Dubai -2 -2 -9 -6 -4 -33%

Quarter Year

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1.9 1.0

3.4 4.1

6.9

9.6

1.0 1.3 2.3

4.2 4.7

8.8

1Q/12 2Q/12 3Q/12 4Q/12 2011 2012

EBITDA Adjusted EBITDA

4Q/11 3Q/12 4Q/12 2011 2012 +/-

Market P2F 121 243 387 181 257 42%

Hedging Gain/(Loss) 0 0 -5 0 -2 -900%

Stock Gain/(Loss) Net NRV 1 64 -2 35 13 -64%

Accounting P2F 122 307 380 216 268 24%

Quarter Year

21

22% 23% 22% 24% 23%

13% 14% 14% 15% 14%

23% 25% 24% 22% 24%

42% 39% 40% 39% 39%

80%

90% 91% 88% 86%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

20%

40%

60%

80%

100%

120%

4Q/11 3Q/12 4Q/12 FY11 FY12

Total Production Volume in % Total intake in %

LN+Others

CR

BZ+CX PX+Xylene

group

Aromatics BU Performance Strong BZ spread and higher discount on condensate contributed to high margins YoY

84% 89% 84% 84% 86%

16% 11% 16% 16%

14%

0%

20%

40%

60%

80%

100%

120%

4Q/11 3Q/12 4Q/12 FY11 FY12

Reformate+

Other feed

Condensate

Unit in THB bn

2011 2012

4Q/11 3Q/12 4Q/12 2011 2012 +/-

Condensate 923 918 925 926 946 2%

PX FECP-Condensate 560 426 604 615 538 -13%

BZ SPOT KR-Condensate 74 259 431 160 261 63%

Naphtha-Condensate -26 -3 19 12 -3 -125%

Quarter Year

1,360 kton

255 kton

5,082 kton

829 kton

Import

39% Import

30%

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22

92%

86% 89%

87% 87%

8% 14% 11% 13% 13%

75%

80%

85%

90%

95%

100%

105%

4Q11 3Q12 4Q12 FY11 FY12

Gas NaphthaTotal intake

7.2 7.7 8.3 8.4

29.6 31.6

1Q 2Q 3Q 4Q FY11 FY12

Olefins and Olefins Derivatives Adjusted EBITDA in THB bn

Olefins and Olefins Derivatives BU Performance Better performance YoY thanks to higher gas feed while prices were in mixed performance

Price and Spread in USD/ton

Sales Volume in Kton and Utilization Rates

*External sales

+/-Sale Volume

(K Ton)

Utilization

Rate

Sale Volume

(K Ton)

Utilization

Rate

Sale Volume

(K Ton)

Utilization

Rate

Sale Volume

(K Ton)

Utilization

Rate

Sale Volume

(K Ton)

Utilization

Rate

Sales

Volume

Olefins* 172 77% 188 91% 169 88% 737 80% 748 88% 2%

HDPE 181 85% 198 92% 203 100% 758 95% 778 99% 3%

LLDPE 117 113% 111 113% 117 111% 337 89% 396 100% 18%

LDPE 33 59% 96 113% 63 71% 158 56% 273 88% 72%

MEG 87 78% 91 93% 101 96% 279 65% 350 88% 26%

4Q/11 3Q/12 4Q/12 20122011

759 928 897 3,222 3,574

Unit: USD/Ton 4Q/11 3Q/12 4Q/12 2011 2012 +/-Naphtha 888 915 944 938 943 1%

HDPE 1,329 1,343 1,393 1,373 1,380 1%

HDPE-Naphtha 441 428 449 434 437 1%

LLDPE 1,217 1,341 1,399 1,339 1,354 1%

LLDEP-Naphtha 328 426 455 401 411 2%

LDPE 1,408 1,327 1,369 1,602 1,362 -15%

LDPE-Naphtha 520 412 425 664 419 -37%

MEG 1,362 1,065 1,247 1,314 1,179 -10%

MEG-0.65 Ethylene 672 285 411 542 379 -30%

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81%

19%

Phenol Performance Weaker YoY from lower spreads and BPA unplanned shutdown

23

0.2 0.2 0.3 0.2

3.1

1.0

1Q 2Q 3Q 4Q FY11 FY12

Adjusted EBITDA in THB bn

Sales Volume in Kton and Utilization Rates

Phenol and BPA P2F in USD/ton

USD/Ton4Q/2011 3Q/2012 4Q/2012 2011 2012 YoY

Phenol-BZ 303 264 165 613 267 -57%

BPA-Phenol 241 212 189 384 205 -47%

Phenol and BPA Market Spread in USD/ton

P2F = PH + 0.62 AC – 0.872 BZ – 0.468 PY

P2F = BPA - 0.853 PH – 0.275 AC

YoY

4Q/11 3Q/12 4Q/12 2011 2012

Phenol Margin 378 401 366 721 435 -42%

BPA Margin 196 171 167 379 157 -56%

Quarter Year

Sales Portion of all Products in Quantity (%)

21 34 41

133 151

25 33 35

87

110

98%

128% 129%

114% 119%

73%

102%

83% 79% 74%

0%

20%

40%

60%

80%

100%

120%

140%

-

50

100

150

200

250

300

4Q/11 3Q/12 4Q/12 2011 2012

Phenol BPA Phenol U-Rate BPA U-Rate

Export

Domestic

Contract 76%

Spot 24%

Contract 86%

Spot 14%

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Profit and Loss Statement

24

THB mn % THB mn % THB mn % THB mn %

1 Sales Revenue 562,811 100 500,305 100 62,506 12 144,595 100

2 Feedstock Cost -470,191 -84 -423,641 -85 -46,550 -11 -117,517 -81

3 Product to Feed Margin 92,620 16 76,664 15 15,956 21 27,078 19

4 Variable Cost -16,525 -3 -10,423 -2 -6,102 -59 -4,782 -3

5 Fixed Cost -15,871 -3 -12,256 -2 -3,615 -29 -5,064 -4

6 Stock Gain/(Loss) & NRV 175 0 6,778 1 -6,603 -97 -323 -0

7 Gain/(Loss) Hedging Commodity 659 0 -1,275 -0 1,934 152 292 0

8 Other Income 5,552 1 4,294 1 1,258 29 2,205 2

9 SG&A -10,731 -2 -9,359 -2 -1,372 -15 -3,126 -2

10 EBITDA 55,879 10 54,423 11 1,456 3 16,281 11

11 Depreciation & Amortization -15,358 -3 -13,608 -3 -1,750 -13 -4,152 -3

12 EBIT 40,521 7 40,815 8 -294 -1 12,129 8

13 Financing Expenses (Net Interest Earned) -5,523 -1 -5,576 -1 53 1 -1,387 -1

14 FX Gain/(Loss) 911 0 -724 -0 1,635 226 409 0

15 Shares of gain/(loss) from investments -44 -0 161 0 -205 -127 -127 -0

16 Corporate Income Tax -1,416 -0 -3,102 -1 1,686 54 -694 -0

17 Net Profit After Income Tax 34,449 6 31,574 6 2,875 9 10,329 7

18 Portion of Net Profit: 0%

19 Shareholders 34,001 6 30,033 6 3,968 13 10,389 7%

20 Minorities 448 0 1,541 0 -1,093 -71 -59 0%

21 Adjusted EBITDA 55,045 0 48,920 10 6,125 13 16,312 11%

FY 2012 FY2011 YoY 4Q/2012

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FCF for Inv. 7,428

FCF for Inv. 9,908

FCF for Inv. 5,992

FCF for Inv. 24,346 2,003

8,146

26,795

30,532

9,431

18,054

32,787

54,878

-

10,000

20,000

30,000

40,000

50,000

60,000

1Q/12 2Q/12 3Q/12 4Q/12

FCF for Inv.Debt Service and DividendCash from Operation

34.6

240.5

238.0

100.8 136.8

60.0 61.2

Strong Financial Position

25

• Free Cash Flow for Investment

• Key Financial Ratios • Dividend – Solid Payout Ratio

As of Dec 31, 2011 As of Dec 31, 2012

THB 436 Billion THB 373 Billion

Cash

CA

PPE

Non CA

Share

holders’

Equity

Loan

Liab.

• Balance Sheet

Dec 31, 11 Dec 31, 12 ROA 8.05% 7.80% ROE 14.41% 14.28% Net IBD / Equity 0.47 0.32 Net IBD / EBITDA 1.79 1.38

FY11 FY12

EPS (Baht/Share) 6.66 7.54

Dividend (Baht/Share) 2.98 3.40

Payout Ratio (%) 45% 45%

MTHB

32.4

235.3

208.5

82.6

120.2

22.6 44.3

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2%

44% 54%

11.6 11.9

7.6 9.5

19.2

12.7

7.7

11.7

0.5

30.5

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

PTTGC PPCL Others

Diversified Debt Exposure and Repayment Schedule

26

Cost of long term debts ~ 5.0% (Include W/H Tax)

Average loan life after refinancing - 5.4 Years

Debt Profile as at Dec 31, 2012

Maturity of Financial Debt as at Dec 31, 2012

Treasury policy Net IBD to Equity ratio of ≤ 0.7x

Net IBD to EBITDA ratio of ≤ 2.4x

Debenture

ST Loan

LT Loan

63%

37%

THB

USD & Foreign

62%

38% Floated

Fixed

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Agenda

FY12 Highlights

Strategy and Execution

FY12 Operating Results

Market Outlook

27

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Key Trends for Petrochemical Industry in 2013

Oil prices slightly sees oversupply Global oil demand 90.5 MBD (+0.865 MBD) with high growth from Asia

Global oil supply 90.6 MBD from Non OPEC (US, UK, Brazil)

PX and MEG market strongly supported by outpacing derivatives demand of new PTA and polyester capacity, mainly from China PX demand growth of 10% as against supply growth of 9.8%

MEG demand growth of 7% against 5% supply growth

BZ supply remains pressured by feedstock shortage Demand growth 3.2% outpacing supply growth of 2.6%

Pygas and reformate are the main source of supply for BZ

Olefins market will be driven by derivatives demand mainly from PE Ethylene demand growth of 4% higher than supply growth of 3%

Propylene market slightly oversupply from new on-purpose units startup

PE market expected to recover with average global operating rates of 85% (from 84% in previous year) Total PE demand growth 3.8 Mton

Total PE new capacity 3.5 Mton from ME and China

28

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PTTGC’s Way Forward

For FY13, PTTGC aims to exceed sales volume as achieved

in 2012, with higher gas feed flow from GSP

Continues to strive for strong profitable growth via

excellence programs and synergy projects, remains

committed to creating long-term and sustainable value

through HVS and green pathways

CAGR ~2-3% towards 2017 with expected revenue increase to THB 620-650 bn

CAGR ~5-7% towards 2022 with expected revenue increase to THB 800-900 bn

29

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30

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Market Outlook

31

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85

86

87

88

89

90

91

92

93

94

95

-1,000

-500

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016

kbd Expected crude distillation expansion Africa

Middle East

Asia

FSU East

Europe

C&S America

North America

Net Addition

World Demand

Refining Capacity Additions 2013-2016

32

2010 2011 2012 2013 2014 2015 2016

North America -359 75 19 0 70 50 20

C&S America 70 0 -225 0 150 230 250

Europe -402 -45 -586 -170 40 60 214

FSU East 210 30 332 115 50 50 148

Asia 853 841 1,315 1,121 742 521 965

Middle East 20 261 0 145 817 510 146

Africa 0 20 93 36 48 0 0

World 393 1,182 948 1,247 1917.10 1421.00 1743.00

Net Addition 393 1,182 948 1,247 1,917 1,421 1,743

World Demand 88.33 89.15 89.77 90.88 91.94 92.89 93.75

MBD

Source: JBC Oct 2012 and PTTGC

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398 408

287 300 349

414 357 335

933 872 843 842

1,331 1,280

1,130 1,142

1,282 1,287 1,200 1,177

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q/13F 2Q/13F 3Q/13F 4Q/13F

Olefins Improved derivatives demand will affect Olefins market

USD/Ton Short-term Price Forecast

Short-Term

• Olefins prices were expected to remain high in 1H13

due to improving derivatives demand mainly from PE,

PP and MEG market - in line with the global

economic recovery

• However the market will be pressured from

1) Additional new supply in Middle East and Asia

(especially in China and Singapore) in the second

half of the year

2) Lighter turnaround plan at Asia cracker in 2013

Long-term Supply/Demand

33

Additional (2012-2017) (Unit : MMT)

Supply Demand 36.13 32.67

America16%

Middle East20%

Europe2%

China40%

Other Asia22%

Source: CMAI January 2013

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

Unit : KMT

Saudi Polymers Saudi 1,200 KMT Q3-11 to Q3-12

Reliance India 1,350 KMT Q1-16 to Q3-16

SINOPEC Wuhan CH 800 KMT Q1-11 to Q3-13

ExxonMobil SG 1,000 KMT Q3-11 to Q2-13

Shanghai PC China 600 KMT Q3-12 to Q1-14

Daqing PC China 600 KMT Q1-11 to Q3-12

Fushun PC China 800 KMT Q1-10 to Q3-12

Sichuan PC China 1,000 KMT Q3-11 to Q4-13

Ilam Iran 458 KMT Q1-15 to Q1-16

Kavyan PC Iran 1,000 KMT Q1-13 to Q3-15

CNOOC & Shell China 1,000 KMT Q1-16 to Q1-17

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-5000

5001,0001,5002,0002,5003,000

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

519 519 456

525 507 449 441

497 489 496 439

485

933 872 843 842

1,452 1,392 1,298

1,367 1,440 1,377

1,283 1,339

1,422 1,368 1,281 1,327

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q/13F 2Q/13F 3Q/13F 4Q/13F

Short-term Price Forecast USD/Ton Short-Term • PE prices will show the sign of recovery

according to the global economic

• However, new PE supply in Asia (Mainly

from China) and strong buying resistance

from end-use producers due to squeezed

margin will weigh on PE markets especially

in the second half of the year

Polyethylene The market will be recovered in the short term

HDPE Long-term Supply/Demand

34

Additional (2012-2017) (Unit : MMT)

Supply Demand 11.81 11.39

America19%

Middle East24%

Europe1%

China42%

Other Asia14%

Source: CMAI January 2013

Saudi Polymers Saudi 550 KMT Q3-11 to Q3-12

Ilam Iran 300 KMT Q1-14 to Q1-15 SINOPEC Wuhan CH

300 KMT Q1-11 to Q3-13

Saudi Polymers Saudi 550 KMT Q3-11 to Q1-13

BPCL India 110 KMT Q3-13 to Q4-14

Daqing PC China 400 KMT Q1-11 to Q3-12

OPAL India 350 KMT Q1-13 to Q3-14

Fushun PC China 575 KMT Q1-10 to Q3-12

Sichuan PC China 300 KMT Q3-11 to Q4-13

Sinopec Yanchang China 250 KMT Q3-14 to Q1-16

Unit : KMT

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LLDPE & LDPE

35 Source: CMAI January 2013

LDPE Long-term Supply/Demand

LLDPE Long-term Supply/Demand

Additional (2012-2017) (Unit : MMT)

Supply Demand 10.81 8.27

Additional (2012-2017) (Unit : MMT)

Supply Demand 5.03 3.38

America19%

Middle East30%Europe

0%

China40%

Other Asia33%

America12%

Middle East30%Europe

13%

China36%

Other Asia8%

-500

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

Unit : KMT

SINOPEC Wuhan China 300 KMT Q1-11 to Q3-13

ExxonMobil Sing. 1,300 KMT Q1-11 to Q4-12

Fushun PC China 225 KMT Q2-10 to Q3-12

Sichuan PC China 300 KMT Q3-12 to Q4-13

OPAL India 350 KMT Q1-13 to Q3-14

Yulin Energy China 300 KMT Q2-13 to Q1-14

CNOOC & Shell China 300 KMT Q1-16 to Q1-17

-500

0

500

1,000

1,500

2,000

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

Unit : KMT

QAPCO Qatar 300 KTA Q1-12 to Q3-12

Borouge UAE. 350 KTA Q1-14 to Q3-14

Reliance India 400 KTA Q1-15 to Q3-16

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Short-term Price Forecast USD/Ton Short-Term

• Buying sentiment is expected to be driven up

from stronger demand in the downstream

textiles and fabrics sectors in China due to

more new Polyester supply will start up in

year 2013

• However, more additional new MEG supply

in the second half of the year will affect the

market

432 501 542 548

933 872 843 842

1,331 1,280

1,130 1,142

1,297 1,333

1,277 1,290

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q/13F 2Q/13F 3Q/13F 4Q/12F

MEG The market will be robust due to strong derivative demand

MEG Long-term Supply/Demand

Additional (2012-2017) (Unit : MMT)

Supply Demand 13.61 9.03

America7% Europe

8%Middle

East7%

India6%

China65%

Other Asia7%

36 Source: CMAI January 2013

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2012 2013 2014 2015 2016 2017

America Europe India Middle East

China Other Asia Additional demand

PetroChina China 380 KTA Q1-12 to postpone

Tongliao Jinmei China 400 KTA Q1-13 to Q3-13

Tongliao Jinmei China 400 KTA Q1-13 to Q4-12

Qianxi Coal Chem China 400 KTA Q3-13 to Q1-14

Heyuan Chem China 500 KTA Q4-12 to Q2-13

Unit : KMT

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Short-term Price Forecast

Short-Term • PX demand in year 2013 will be supported

from new PTA plants in Asia (especially in

China) will start up in and high

manufacturing season in textile and fabric

sectors in China

• However, additional new supply in Asia and

squeezed PTA margins and high inventory

levels among downstream Polyester market

will affect the PX market

USD/Ton

716 748 714 708

933 872 843 842

1,648 1,620 1,557 1,550

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1Q/13F 2Q/13F 3Q/13F 4Q/13F

Paraxylene Tight supply will affect PX market

PX Long-term Supply/Demand

37

Additional (2012-2017) (Unit : MMT)

Supply Demand 21.43 13.93

Source: CMAI January 2013

America2% Europe

4%

Middle East30%

India15%

China17%

Other Asia32%

0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2013 2014 2015 2016 2017

America Europe India Middle East China Other Asia Additional demand

PetroRabigh Saudi. 1,400 KTA Q3-15 to Q3-16

Sinopec Hainan Ref. China 600 KTA Q1-15 to Q4-14

Unit : KMT

Tenglong Aromatics1 China 800 KTA Q2-12 to Q3-12

Tenglong Aromatics2 China 800 KTA Q3-12 to Q2-13

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Short-term Price Forecast USD/Ton

Short-Term

• Supply continue to be short due to many

refineries and Aromatics plants in Asia will

shutdown for maintenance

• In addition, Benzene market will be

depend on volatile crude and feedstock

prices and derivatives demand 505 553 580 549

933 872 843 842

1,438 1,425 1,423 1,391

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q/13F 2Q/13F 3Q/13F 4Q/13F

Benzene the market will still be driven by the main products

Additional (2012-2017) (Unit : MMT)

Supply Demand 8.61 8.28

BZ Long-term Supply/Demand

America

1%

Middle East6% Europe

2%

China

35%

Other Asia55%

38 Source: CMAI January 2013

-500

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

Daqing PC China 150 KTA Q1-13 to Q3-12

Anqing PC China 54 KTA Q3-12 to Q1-13

Samsung Total PC S. Korea 422 KTA Q4-14 to Q1-15

Nghi Son Vietnam 246 KTA Q1-15 to Q1-16

ExxonMobil Sing. 340 KTA Q1-13 to Q2-13 Unit : KMT

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Short-term Price Forecast USD/Ton

Short-Term

• Phenol market would continue to face

rising cost and weak supply/demand

balances

• Additionally, Phenol market will be

pressured from new additional supply in

Asia, mainly from China and S. Korea in

2013 219 188 189

316

1,438 1,425 1,423 1,377

1,484 1,442 1,441 1,527

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1Q/13F 2Q/13F 3Q/13F 4Q/13F

Phenol Will be pressured from high feedstock prices and new additional supply

Additional (2012-2017) (Unit : MMT)

Supply Demand 3.14 1.91

Phenol Long-term Supply/Demand

America

1%Europe

2%

China68%

Other

Asia55%

39 Source: CMAI January 2013

-500

0

500

1,000

1,500

2012 2013 2014 2015 2016 2017

America Europe Middle East China Other Asia Additional demand

Unit : KMT

Lihuayi Group Taiwan 217 KTA Q1-13 to Q4-12

SSMC China 300 KTA Q2-13 to Q4-13

Changchun PC China 400 KTA Q3-13 to Q4-13

INEOS/Yangzi PC China 400 KTA Q3-14 to Q1-15

CEPSA Quimica China 250 KTA Q3-14 to Q1-15