orlen koltrans and zcp euronaft trzebinia...orlen koltrans and zcp euronaft trzebinia –...
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© Copyright PKP CARGO S.A.
PKP CARGO purchases
ORLEN KolTrans and ZCP Euronaft Trzebinia
© Copyright PKP CARGO S.A.
AGENDA
‖ Deal summary
‖ Liquid fuel market
‖ Refinery product logistics
‖ Financial and operational data
© Copyright PKP CARGO S.A.
Purchase Net debt Enterprise value
EV/EBITDA multiplier* Share in the Polish rail
freight market: petroleum
refinery products
Stable backlog
✓
✓
✓
PLN 228
million
PKP CARGO’s return to the attractive liquid fuel market
– deal’s key parameters
total EV
of the two entities
pro forma net debt (net cash)
of the two entities as at 31 December 2014
-PLN 23.9
million
~ 6.3x 22%
Portfolio of
long-term
contracts
3
ORLEN KolTrans + ZCP Euronaft Trzebinia
according to freight volume in 2014
* EBITDA of the two entities for the 12 M period ended 30 September 2015, incorporating a minimum synergies level of PLN 10 milion.
ORLEN KolTrans (99.85%)
ZCP Euronaft
Trzebinia
© Copyright PKP CARGO S.A.
Strengthening its position in the liquid
fuel segment
Growth through acquisitions
Product diversification
CARGO’20
– an important element in building the PKP CARGO Group’s value
Long-term contracts with the
PKN ORLEN Group
Competences in logistics
concerning hazardous products
Rolling stock and commercial synergies
Growing liquid fuel segment
Excellent financial standing of the
entities being acquired
Limited ability to switch from rail
freight to other means of
transport for important product
groups
4
© Copyright PKP CARGO S.A.
Replace the leased multi-system locomotives
with PKP CARGO’s locomotives
SYNERGIES SYNERGIES
Lease 9 ET-22 locomotives
from PKP CARGO
Perform regular repairs and maintenance
in PKP CARGO
Joint Shared Services Center,
to move services
from PKN Orlen’s Shared Services Center
to PKP CARGO’s Shared Services Center
Integration of IT systems
Procurement group
Commercial synergies
Significant synergies
– at least PLN 10 million per annum
5
Maximum usage of resources
through regular deliveries
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Best market practices in M&A
– project execution in a few months
6
NDA signing,
distribution of the Information
Memorandum
1
Due diligence
2
Submission of preliminary proposal
3
Confirmatory due diligence
4
5
Submission of final proposal Negotiation of transaction
documentation
6 SPA / APA
signing
© Copyright PKP CARGO S.A.
AGENDA
‖ Deal summary
‖ Liquid fuel market
‖ Refinery product logistics
‖ Financial and operational data
© Copyright PKP CARGO S.A. 8
Non-organic growth in a forward-looking segment
2% CAGR liquid fuel market growth until 2020
5.4
5.2
5.8
5.6
5.0
4.6
4.8
4.4
4.2
4.0
2017 2014
5.2
2019 2013 2020
5.5
5.8
2012
4.7
2015 2010 2016 2011 2018
Source: Own review based on PKP CARGO’s strategy
Source: GUS (Central Statistical Office of Poland)
Market: rail freight turnover in the liquid fuel segment
mln tkm
2%
CAGR
2015-20
8%
Rail freight turnover growth in 2014 versus 2013:
2% Petroleum refinery products
Petroleum and natural gas
8
Petroleum refinery products thousand tonne
Petroleum and natural gas thousand tonne
Rail transport market in the
liquid fuel segment
in 2015
7 484 8 146
1 393 1 625
8 877 9 771
8m'14 8m'15
228
1 254
214
16
443
1 270
8m'14 8m'15
10%
187%
© Copyright PKP CARGO S.A.
AGENDA
‖ Deal summary
‖ Liquid fuel market
‖ Refinery product logistics
‖ Financial and operational data
© Copyright PKP CARGO S.A.
No alternative to rail freight
– petrochemical and refinery industry logistics chain
Source: PKP CARGO, PKN ORLEN, EY
Product logistics Petroleum and petrochemical products
Commodity logistics Petroleum
Distribution Petroleum products (fuels)
Fuel
stations
Tankers
Rail transport Chemical
plants
Tankers
Fuel
terminals
Refineries
Extraction
Tanker ships
Oil pipelines
Rail transport
Tankers
Product pipelines
Transportation of important
products, that cannot be
transported
by alternative means
of transport (e.g. pipelines),
due to density.
For many directions
rail transport cannot be
replaced due to limited
network of product pipelines.
10
Competences of ORLEN KolTrans and ZCP Euronaft Trzebinia in the logistics chain for hazardous products
Siding operations
Rail transport
Product logistics Petroleum and petrochemical products
© Copyright PKP CARGO S.A. Source: Office of Rail Transport, PKP CARGO, PKN ORLEN
Logistics competences of the PKN ORLEN Group
► 25 fuel terminals: total storage capacity of roughly
7 million cubic meters*
* using own infrastructure and signed contracts
► Key sidings: Płock, Włocławek, Ostrów Wlkp.,
Trzebinia
► Specialization of ORLEN KolTrans in the transport
of products that cannot be transported using product
pipelines (heavy oil, paraxylene)
Acquired assest being key logistics partner – handling 24% of the
ORLEN Group’s transport needs
Rail transport c
► Key routes | Płock – Świnoujście, Płock – Warszawa,
Ostrów Wlkp. – Piekary/Radzionków
► Transport of certain product groups impossible
due to the density and viscosity – lack of alternatives
for rail freight
►Limited opportunities to replace due to the lack of
product pipelines in some relationships
Handling of sidings
► Sidings handled | Płock, Trzebinia, Jedlicze, Ostrów
Wielkopolski, Włocławek – 2 sidings:
PKN ORLEN (PTA) and Anwil
► Volumes of roughly 7.5 million tons per annum
►Capacity of the siding in Płock up to 450 kt/month;
products transported: heavy oil, jet fuel, paraxylene,
benzine, diesel
11
54% 24%
22%
Rurociągi
Kolej
Cysternysamochodowe
Fuel transport structure in the PKN ORLEN Group 2014
Pipelines
Rail
Tankers
© Copyright PKP CARGO S.A. Source: Nafta Polska, Polish Chamber of Liquid Fuels Polish Organization of the Oil Industry and Trade, PKN ORLEN, Information Memorandum, ORLEN KolTrans Sp. z o.o., ZCP Euronaft
Trzebinia Sp. z o.o., Unipetrol Doprava s.r.o., PKN ORLEN, EY
Rail transport is an alternative to pipelines
– specific nature of the refinery industry
12
Główne obsługiwane relacje
TanQuid Radzionków
OLPP Sp. z o.o.
LOTOS S.A. Group
Other
Pipelines
Pipelines considered
Oil pipelines
PKN ORLEN S.A.
Fuel bases:
LOTOS S.A. Group
PKN ORLEN S.A.
Czech
Republic
Germany
Romania Main services relations
Rail transport
► ~80% of the transport handled by
ORLEN KolTrans is conducted from
Płock
► The key destination for ORLEN KolTrans
from Płock is Świnoujście
(~50% of transport)
► International transport handled by
ORLEN KolTrans represents ~4% of
transport, mainly to the Czech Republic,
Romania and Germany
► ~43% of the transport handled by ZCP
Euronaft Trzebinia is done from Trzebinia
► ~20% the Czech Republic is the main
destination for transport in ZCP Euronaft
Trzebinia
© Copyright PKP CARGO S.A.
AGENDA
‖ Deal summary
‖ Liquid fuel market
‖ Refinery product logistics
‖ Financial and operational data
© Copyright PKP CARGO S.A.
Business model
ORLEN KolTrans and ZCP Euronaft Trzebinia
Traction energy Infrastructure
THIRD PARTIES
Handling of
sidings
Maintenance
and repair
Transport
Fuel Forwarding
THIRD PARTIES
Lease of
wagons
Human resources (seasoned, well-trained staff
holding the certificates required by law)
Source: PKP CARGO, PKN ORLEN
Rolling stock (locomotives, tankers)
Resources
Key suppliers
Services
Clients
14
© Copyright PKP CARGO S.A.
Unit 2014 Jan-Sep
2015
Freight turnover billion tkm 1.3 1.0
Freight volume (transport) million tons 3.3 3.1
Wagons units 852 1,011
- own units 665 601
- rented / leased units 187 410
Locomotives units 49 47
- own units 35 30
- rented / leased units 14 17
Freight volume of transshipment
on sidings million tons 7.5 7.0
Employees FTEs 378 369
ORLEN KolTrans and ZCP Euronaft Trzebinia
– operational highlights Operational data of ORLEN KolTrans & ZCP Euronaft Trzebinia
15 Source: PKN ORLEN, data concerning ORLEN KolTrans
Revenue structure by segment (2014)
63,8% 20,0%
9,5%
6,7%
Rail transport
Sidings
Lease of wagons
Other
Source: Office of Rail Transport, PKP CARGO, PKN ORLEN
Revenue structure by client (2014)
92,4%
7,6%
PKN ORLEN
Other
12%
33%
30%
25%
Structure of rail tankers by products transported
Liquid petrochemical
products
Gaseous petrochemical
products
Liquid refinery
products
Gaseous refinery
products
© Copyright PKP CARGO S.A.
Potential to enhance results further
– excellent financial condition
► In 2014 the pro forma revenues posted by ORLEN KolTrans & ZCP
Trzebinia were PLN 186.8 million vs. EBITDA of PLN 21.2 million
► In 2015 ORLEN KolTrans and ZCP Euronaft Trzebinia are meeting
their budgetary targets
► To ensure rolling stock synergies PKP CARGO will lease 9 E22
locomotives to ORLEN KolTrans and ZCP Euronaft Trzebinia
Source: PKN ORLEN, ORLEN KolTrans., ZCP Euronaft Trzebinia
ORLEN KolTrans – balance sheet highlights
PLN million 31 Dec 2013 31 Dec 2014
Fixed assets and intangible
assets 34.2 26.8
Net working capital 15.9 15.3
Net debt -22.4 25.3
Equity 52.5 50.6
16
-1.4
-5.1
0.0
-1.8
1.7
change
188.3
27.1
16.0
23.0
12.5
2013
186.8
22.0
16.0
21.2
14.2
2014
Gross profit on sales
EBITDA
EBIT
Revenues adjusted by the loading department
Net result
ORLEN KolTrans + ZCP Euronaft Trzebinia1) pro forma data (PLN million)
1) The results adjusted for a filling department transferred to the PKN in 2014
© Copyright PKP CARGO S.A.
Deal structure and schedule
acquisition of 99.85% stake in ORLEN KolTrans
acquisition of ZCP Euronaft Trzebinia
Acquisition via an SPV
tax optimization
effective utilization of external financing
10-year bank loan
to be repaid using the cash flow
generated by ORLEN KolTrans and
ZCP Euronaft Trzebinia
Assumption of operational control
Bank financing
Signing of the transaction agreement
PKP CARGOTABOR USŁUGI
(special-purpose vehicle)
Conditions precedent
1
3
2
4
5
Consent from the Office for
Competition and Consumer
Protection
Registration of the amendments
to the articles of association of Koltrans
17
© Copyright PKP CARGO S.A.
Legal disclaimer
This presentation has been prepared by PKP CARGO S.A. (“Company”, “PKP CARGO S.A.”) solely for information purposes. This presentation may
not be copied, distributed or transmitted directly or indirectly to any person, for any purpose whatsoever without PKP CARGO’s knowledge and
explicit consent. The copying, distribution and transmission of this presentation to other jurisdictions may be subject to legal limitations while those
persons who obtain it should familiarize themselves with all the limitations of this kind and submit to them. The failure to abide by these limitations
may constitute a breach of the prevailing law. The data and information contained in this presentation do not portray a thorough financial analysis of
the Company, nor do they represent a commercial offer of the Company. A detailed description of PKP CARGO’s business and financial position has
been presented in the current reports and periodic reports published on the following website: www.pkp-cargo.pl. Information about entering into
contracts on the acquisition of the assets described in this presentation has been published by PKP CARGO in current reports. The information
contained in this presentation is merely supplementary to the above information; at the same time, this information does not constitute a standalone
basis for the Company to transmit the same in the framework of discharging the reporting duties of public companies.
All the data set forth in this presentation are based on sources the Company deems to be exact and credible; however, the Company does not bear
liability for the exactitude and credibility of these sources. The Company reserves the right to alter the data and information contained in this
presentation at any time without giving prior notification to the persons to whom this presentation is furnished. This presentation may contain certain
statements referring to future events. These statements, however, cannot be understood to be the Company’s forecasts or projections concerning the
Company’s results or an indication of the Company’s future results. The assumptions adopted by the Management Board are based on the
Company’s Management Board’s current knowledge, awareness and views and are dependent on a number of factors that may cause the actual
results achieved in the future to differ materially from the results referred to in this document. PKP CARGO is not liable for damages ensuing from
third parties using this presentation. This presentation has been prepared solely for information purposes and does not constitute an offer to acquire
or sell or participate in any investment whatsoever, including the acquisition of any of the Company’s securities or other financial instruments, or to
participate in any commercial undertaking.
18
© Copyright PKP CARGO S.A.
To obtain additional information about PKP CARGO please contact the Analysis and Investor Relations Department: PKP CARGO S.A. Analysis and Investor Relations Department ul. Grójecka 17 02-021 Warsaw
Telephone: +48 22 391-47-09
Fax: +48 22 474-29-53
e-mail: [email protected]