Thessaloniki, 19-20 June 2013 · Arpechim units are closing down Lietuva demand and poor Mongstad...
Transcript of Thessaloniki, 19-20 June 2013 · Arpechim units are closing down Lietuva demand and poor Mongstad...
Other HO ADO Petrol
2,82,9 3,0
3,1 3,23,3 3,4
3,5
3,63,7 3,8 3,9
4,0 3,9 4,1
3,73,3
2,9
-36%
2.4%
2012
9.1
2.2
2.0
2.1
2011
10.7
2.3
2.9
2.2
2010
11.7
2.5
2.9
2.5
2009
13.5
3.2
3.4
2.8
2008
13.7
3.8
3.0
3.0
2007
13.9
3.8
3.5
2.7
2006
14.4
3.8
4.0
2.6
2005
14.1
3.8
3.8
2.6
2004
14.1
3.9
3.8
2.7
2003
14.4
3.9
4.2
2.7
2002
13.6
4.0
3.6
2.4
2001
13.0
3.8
3.5
2.3
2000
12.8
3.9
3.3
2.3
1999
12.4
3.7
3.2
2.2
1998
12.4
4.0
3.1
2.2
1997
12.1
4.0
2.8
2.2
1996
11.8
4.0
2.7
2.2
1995
11.1
3.9
2.3
2.0
•Total domestic fuels consumption has declined by 36% since its peak in 2006 and has returned to the levels of 1990
Fuels consumption evolution (MMT) – Domestic market
Market Environment: Greece
Arpechim
Lietuva
Mongstad
Harburg
Rome,
Pantano
Cremon
a
Porto Marghera
Berre
Reichstett Gonfreville
Dunkirk
Petit Couronne
Coryton
Milford
Haven
Lindsey
Teesside
Humber
•Many refineries in Europe are closing down, sold or used as storage hubs due to oversupply, reduced demand and poor margins
•This trend seems to be continued in the medium term
•The situation is similar in North America, Japan and Australia, where units are closing down
Refineries that have stopped or reduced operation or are up for sale due to poor results
Falconara
Gela
Whitegate Wilhelmshaven
Paramo
Market Environment: Europe
•The situation is aggravated by the opening of new complex units in developing countries …
•… a significant part of which will affect our region
Capacity decrease in OECD countries
Capacity increase in developing countries
Evolution of global refining capacity (kbpd) Some refining projects in the Middle East (kbpd)
Estimated increase in capacity from upgrading projects in Russia (kbpd)
2012 2013 2014 2015-
2020
Total
Rosneft 130 352 48 56 586
Tatneft 194 - - - 194
Gazprom - - 126 22 148
Lukoil 40 42 - 30 112
Others - 18 30 128 176
Total 364 412 204 236 1,216
2,000
1,600
Market Environment: The World
•These developments dictate the new business model in the European refining sector:
• High complexity of plants
• Competitive operating costs
• Extraversion / integration
• Healthy cash flows
ONLY THE FITTEST WILL SURVIVE!
Market Environment: The New Business Model
Aviation & Bunkering
C&I (Construction, wholesale)
Retail
3rd party Imports
60-65% 25-30%
0-10%
Greek Refining capacity: 25MMT
Domestic market: 12.5MMT
ELPE Group subsidiaries:
3.5MMT (30%)
MOH captive market: 2.5MMT
(20%)
Independent marketing
companies: 5MMT (40%)
ELPE exports: 7MMT
3rd party exports:
5MMT
16MMT
ELPE Group subsidiaries:
2MMT
24%
Other
5%
Bunkers 25%
Jet 7%
Gasoil
21%
Diesel 18%
Gasoline
Greek market product breakdown
Specialty markets (PPC, public
sector): 1.5MMT (10%)
Greek Petroleum Market Overview
HELLENIC PETROLEUM Corporate Identity
Our Vision
To be a leading regional Energy Group with sustainable growth embedded in our strategy
Our Mission
“Energy for Life” To produce and offer top quality products and services in the energy sector, serving our customers in the Greek and international markets with efficiency and innovation
Our Principles
1. Safety is always our first priority 2. We offer Value to our Customers 3. We operate Responsibly towards Society and the Environment 4. We respect our Colleagues and Partners promoting Meritocracy, Teamwork, Innovation, Continuous
Improvement and Results Orientation 5. We invest for Sustainable Development 6. We continuously enhance Competitiveness 7. We apply high standards of Corporate Governance 8. We create value for our Shareholders and focus on the continuous improvement of our Results and
Cash Flows
Our Attributes
Integrity, Professionalism, Commitment, Judgment, Initiative, Extraversion
Coastal location of refineries ensures wide crude oil sourcing options
Cost advantaged to supply SEE/East Med markets with end-products
Opportunities for regional consolidation and synergies on logistics footprint
ROMANIA
TURKEY
BULGARIA
SERBIA
CYPRUS
FYROM
GREECE
ALBANIA
BOSNIA
MONTENEGRO
Refining
Marketing
Power & Gas 11.0
8.1 7.3
11.0
13.9
7.0
Aspropygros Elefsina Thessaloniki
NCI Solomon
Nelson/Solomon complexity – benchmark margins ($/bbl, average 2011-12)
5 -3 4
HELLENIC PETROLEUM At A Glance
Refining, Supply & Trading
Domestic Marketing
International Marketing
Petrochemicals
Power & Gas
DESCRIPTION METRICS
• Exploration assets in Egypt: West Obayed (30%),
Mesaha (30%)
• Recently upgraded refining asset base:
– Aspropyrgos (FCC, 145kbpd)
– Elefsina (HDC, 100kbpd)
– Thessaloniki (HS, 95kbpd)
• Owner of only refinery in FYROM
• Capacity: 16MMT
• NCI: 9.3
• Market share: 65%
• Tankage: 7MM3
• Leading position in all market channels (Retail,
Commercial, Aviation, Bunkering)
• c.1,900 petrol stations
• 29% market share
• Sales volumes: 4MMT
• Presence in Cyprus, Montenegro, Serbia, Bulgaria
• Significant advantage on supply chain/vertical
integration
• c.280 petrol stations
• Sales volumes: 1MMT
• Sole producer and main marketer in Greece with
strong export orientation
• PP value chain integrated with refineries
• Capacity (PP): 220 KMT
• Second largest IPP in Greece (JV with Edison/EdF) • Capacity: 810 MW
(CCGT)
• 35% in Greece’s incumbent NatGas supply company • Volumes (2012): 4.2BCM
Exploration & Production
HELLENIC PETROLEUM Value Chain
HELLENIC
PETROLEUM
EKO S.A.
(and
subsidiaries) HPI AG
HELLENIC
FUELS S.A. HP SERBIA LTD
HP BULGARIA
LTD
HPM CYPRUS
LTD
JPK
MONTENEGRO
ELPET
VALKANIKI Shipping
companies
ELPEDISON
B.V.
HPF plc
(treasury)
Domestic Marketing International Marketing
DEPA
Group
Gas supply,
transportation &
distribution
50%
Power Generation &
Trading Asprofos
S.A.
Engineering Services
PetChems
(BOPP film)
DIAXON
S.A.
35%
Gas & Power associates
63%
VARDAX
OKTA
International Refining Other
80%
82%
HELLENIC PETROLEUM Summary Group Structure
PETROLA ( Elefsina
Refinery)
DEP &
DEPEKY (Greek E&P)
ELDA ( Aspropyrgos
Refinery)
ESSO -
PAPPAS ( Thessaloniki
Refinery)
PETROLA ( Elefsina
Refinery)
DEP &
DEPEKY (Greek E&P)
ELDA ( Aspropyrgos
Refinery)
ESSO -
PAPPAS ( Thessaloniki
Refinery)
1998 1960 –
1998 2003 2007 2008 2009 2013
Elpedison: 50/50 JV
with Italy’s Edison,
in Power
Libyan upstream
concessions sold to
GDF Suez for $170m
2010
Thessaloniki Refinery
upgrade completed
Sale of 70% stake in
W. Obayed upstream
concession in Egypt
Acquisition of BP’s
Ground Fuels business
in Greece
Merger with
Petrola
Hellas
Elpedison’s 2nd CCGT
Plant (420MW) in
commercial operation
Shareholding events
Listing of
new Group in
ASE/LSE
Greek Government
announces its
intention to divest
its shareholding in
ELPE
2011
DESFA
privatisation
process at final
stage
Elefsina
upgraded refinery
commercial
operation
POIH becomes
strategic investor
with 25% stake
Float
22%
Greek State
36%
POIH 42%
2012
HELLENIC PETROLEUM Group History Milestones
• A €10bn turnover Group, with leading position in SEE and East Med
• Successful implementation of a €3bn investment plan delivering €200m incremental EBITDA
Transformation initiatives with €230m full year benefits enhancing competitiveness and an upside of €70m
“Fit-for-purpose” Group structure and organisation
• Strong financial performance
Achievement of strategic targets, despite Greek crisis, industry “black swans” and regional challenges
Capex cycle completed signaling end to higher than target gearing as new investment returns kick in
Successful refinancing of €1.2bn in Dec 2012-Jan 2013, partly with own funds
Successful execution of inaugural €500m Eurobond issuance
o Books closed early (24hrs) due to strong demand at €3.5bn, an oversubscription of 7 times
o Significant interest from international investors, exceeding 80% of order book
HELLENIC PETROLEUM: A diversified regional energy player, having completed its significant transformation strategy, well positioned for earnings growth with no capex risk
Vac
uu
m
Un
it
Atm
osp
her
ic D
isti
llati
on
Hyd
rocr
acke
r (U
OP
)
Fle
xico
ker
(Ex
xon
Mo
bil)
Ke
rose
ne
Swe
ete
nin
g
New units, Sulphur, Amine, SWS
Die
sel
De
sulp
hu
riza
tio
n
LPG
Naphtha
Jet Fuel
Auto Diesel
Petcoke or Flexigas
Sulphur
Propane
Heating Diesel
Marine Diesel
Ligh
t En
ds
Re
cove
ry
Crude
Existing Units
New Units
Hydrogen (Haldor Topsoe)
20kbpd
40kbpd
c.50% of CDU output
• Nelson complexity raised to 8.1
• All emissions significantly reduced (e.g. SO2 by 70% and PM by 84%)
100kbpd
45kbpd
Elefsina Refinery: Summary Configuration
74%
53% 55%
35%
6%
30%
100%
0%
25%
50%
75%
100%
FY07 FY08 FY09 FY10 FY11 FY12 Pro
forma(*) over operational availability (i.e. post start-up)
-5
0
5
10
15
20
25
Jan-0
7
Apr-
07
Jul-07
Oct-
07
Jan-0
8
Apr-
08
Jul-08
Oct-
08
Jan-0
9
Apr-
09
Jul-09
Oct-
09
Jan-1
0
Apr-
10
Jul-10
Oct-
10
Jan-1
1
Apr-
11
Jul-11
Oct-
11
Jan-1
2
Apr-
12
Jul-12
Oct-
12
Jan-1
3
Apr-
13
Aspropyrgos Elefsina
$/T
ULSD – HSFO spread Cracking margins ($/bbl) – Aspropyrgos vs Elefsina
Elefsina Utilisation rate
*
Upgrade impact on product yield million tonnes / year
Average 2011-12 ($/bbl)
Aspropyrgos 3.78
Elefsina 4.95
0
100
200
300
400
Jan 09
Apr
09
Jul 0
9
Oct
09
Jan 10
Apr
10
Jul 1
0
Oct
10
Jan 11
Apr
11
Jul 1
1
Oct
11
Jan 12
Apr
12
Jul 1
2
Oct
12
Jan 13
Apr
13
Elefsina Refinery: Key Economics Transformational investment significantly enhancing competitiveness
26%15%
32%45%
9% 8%
23% 21%
10% 11%
Pre upgrade Current
Other
Gasoline
Jet
Diesel/Gas oil
Fuel oil
15% 11%
10%
0%
75%
89%
Pre Upgrade Current
High sulphur
Medium sulphur
Low sulphur
47%
24%
11%
11%
17%25%
64%
Pre upgrade Current
Other
Jet
Diesel/Gas oil
Fuel oil
Crude slate — Group-wide Product slate — Group-wide
Crude slate — Elefsina Product slate — Elefsina
41%
59%
100%
Pre upgrade Current
High sulphur
Medium sulphur
Significant impact of refinery upgrades on the Group’s crude and product slate, thus delivering strong cash flows
Refined Oil products balances 2000-2025f MMT / year
-30
-25
-20
-15
-10
-5
0
5
10
15
LPG Naphtha Gasoline Jet/Kero Diesel Gasoil LSFO HSFO
Bal
ance
s, M
t .
2000 2005 2010 2015 2020 2025
Surplus
Deficit
Source Wood Mackenzie, 2012
Group product balances 2011-2013 pro forma MMT / year
MD Naphtha FO MOGAS
2011 2013 Pro forma
LONG
SHORT
32%
10% 37%
20%
Domestic Oil products demand 2008-2012 MMT / year
Top European markets with expected demand increase (2013-2022) - MMT
2011
9.239
2010
10.125
7.690
2012 2008
10.832
2009
11.413
0
2
4
6
8
10
12
SER SLV HUN ROM BEL CZ BUL GR TUR NL UKR POL
Regional Market: Increased middle distillates yield leveraging on regional market dynamics
Markets (sales premia varying across channels)
Refining (Med benchmark returns & operations performance)
Refined Products (16.0 MMT)
Imported Products (1-1.5 MMT)
Aviation & Bunkering (Med competitive pricing)
Exports, Intra-Group (Platts Med FOB based + premia)
Domestic market (Import parity pricing)
6 MMT
3 MMT
Exports, 3rd parties (Platts Med FOB based)
2 MMT
5 MMT
Aspropyrgos NCI 11.0 145kbpd
FCC
Thessaloniki NCI 7.3 95kbpd
Hydroskimming
Elefsina NCI 8.1
100kbpd HDC
16 MMT
1-1.5 MMT
$ / €
Total ELPE capacity
Greek Refining, Supply & Trading Economics: USD based value chain with significant trading returns complementing refining; export sales expected to exceed 50%, with domestic market premia accounting for less than 30% of EBITDA
• Operational Excellence
– Optimize South hub refining operations
– Adapt Domestic marketing to current environment
– Maintain competitiveness improvement momentum
• Rebalance exposure to Greek market
– Grow trading capabilities on the back of refining assets
– Develop regional footprint strategy (wholesale/retail)
• Leverage business portfolio
– Maximise value out of divestment of 35% in gas incumbent (DEPA/DESFA)
– Optimise value generation for all our businesses
• Develop our people and continue to build culture of excellence
Business Priorities Financial Targets
• Improve profitability
– Medium term EBITDA growth to €700m pa
– Deliver €200-350m FCF pa
• Deleverage Group
– Reduce Debt/EBITDA < 2 within 3 years
– Decrease gearing to D/E < 0.75
• Diversify funding mix
– Increase capital markets financing
– Expand trade financing
Strategy 2013-2017: Business strategy focuses on operational improvements, risk management and cash flow maximisation