Presentation of the Polimex-Mostostal Group September 2011

Transcription

1 Presentation of the Polimex-Mostostal Group September 2011

2 Table of contents Activity of the Polimex Mostostal Group Portfolio of orders Accomplishments and development directions Financial results

3 Activity of the Polimex-Mostostal Group Leading position in the Polish construction and engineering market Revenues: PLN 2,106 m ( I H 2011) Employment: 14,175 persons Unique and complementary scope of construction and installation services provided on the general contractorship basis to the most important sectors of the economy The largest Polish manufacturer and exporter of steel products Growth dynamics YoY Revenues PLN 1,806 m PLN 2,106 m % Contracting (without consortium members) PLN 6,201 m [August 2010] PLN 8,543 m [August 2011] % Employment 14,767 persons 14,175 persons -4% 3

4 Activity of the Polimex-Mostostal Group Company history over 65 years of experience Polimex-Mostostal was established in 2004 in the merger of Polimex-Cekop SA and Mostostal Siedlce SA. Over the years the company has built a strong brand and become the market leader in general contractorship and steel manufacturing. Beginning of the operation of Polimex-Cekop Polimex Cekop SA privatisation Polimex-Cekop acquires majority share in Mostostal Siedlce Zakład Budownictwa Drogowego Z-10 road construction plant established New name: Polimex- Mostostal SA; Torpol acquisition Taking control over Coifer - a Romanian- Italian group Formal incorporation of 7 subsidiaries finalised Mostostal Siedlce established Mostostal Siedlce debuts on the Warsaw Stock Exchange Polimex-Cekop and Mostostal Siedlce merge to create Polimex-Mostostal Siedlce SA ZREW subsidiary incorporated; Energomontaż Północ under control New plants established: Centrum Projektowe (design centre), Zakład Wyrobów Stalowych (steel works) Malarnia, (coating) in Siedlce Centralne Biuro Konstrukcji Kotłów SA acquired 4

5 Activity of the Polimex-Mostostal Group Historical data Capital Group Power engineering Construction Production Chemistry Composition proceedings, reorganisation of the Capital Group, optimisation of costs Power Engineering Division in PxM Merger with Mostostal Siedlce S.A. Roads and railways Revenues of the Capital Group [in thousand PLN] Net profit of the Capital Group [in thousand PLN] Employment within the Capital Group 544, ,941 1,357,887 5,930 14,016 37,814 6,427 6,765 7,225 5

6 Activity of the Polimex-Mostostal Group Historical data Capital Group Power engineering Construction 2 Engineering and Design Offices Merger with ZREW S.A., Controlling interest in: EPN, ZRE Kraków, ZRE Rybnik TURBUD, WIBUD Production Chemistry Roads and railways Road Division PXM TORPOL Elmont Kostrzyń Revenues of the Capital Group [in thousand PLN] Net profit of the Capital Group [in thousand PLN] Employment within the Capital Group 1,849,903 2,483,405 3,720,486 42,793 62, ,073 7,223 8,607 12,092 6

7 Activity of the Polimex-Mostostal Group Historical data Capital Group Design Office Power engineering Construction Production Chemistry EceRemont Coifer Capital Group (Romania) Organic development, own expenditures (approx. PLN 400 m) Merger with: Energomontaż-Północ Naftobudowa Naftoremont ZRE Kraków ZRE Lublin EPE Rybnik ECE Remont Acquisition of CBKK Roads and railways Revenues of the Capital Group [in thousand PLN] (wihout consortia partners) Net profit of the Capital Group [in thousand PLN] Employment within the Capital Group 4,061,921 4,396,778 4,160, , , ,658 13,464 14,595 14,252 7

8 Activity of the Polimex-Mostostal Group Capital Group territorial deployment of plants in Europe GDYNIA SZCZECIN POLIMEX-MOSTOSTAL Ukraine ZKM Ukraine 1109 ZIELONA GÓRA POZNAŃ SOCHACZEW PŁOCK WARSZAWA SOKOŁÓW PODLASKI SIEDLCE GRANDE MECCANICA Italy COIFER Romania CZĘSTOCHOWA LUBLIN TARNOWSKIE GÓRY SĘDZISZÓW KATOWICE STALOWA WOLA GLIWICE RYBNIK ZABRZE RUDNIK KRAKÓW DĘBICA LEGEND Power engeneering Production Roads and railway Bgeneral construction Chemistry and enviornmental protection PDesigning BIELSKO-BIAŁA 8

9 No. Company/ plant name Operation profile Segment Town 1. Z 1 Production of steel construction production Siedlce Rudnik 2. Z 2 Production of platform grating production Siedlce 3. Z 3 Galvanising line production 4. Stalfa Production of small steel elements Realizations for power 5. engineering, shipbuilding EPN Gdynia industry and offshore sector, dry dock available production production Siedlce Dębica Częstochowa Sokołów Podlaski Gdynia 6. Energop Production of pipelines production Sochaczew 7. Z 7 8. Z 8 9. Z Z 19 Energomontaż Płn. complex contractorship for power engineering and chemistry Power engineering construction GW Servicing, line maintenance and assembly for power engineering ZRE Lublin Servicing, line maintenance and assembly for power engineering 11. Z 20 ZRE Kraków 12. Z 21 EPE Rybnik 13. Sefako Production of boilers for power engineering 14. Z 22 ECE Remont 15. Elektra Construction of power networks Activity of the Polimex-Mostostal Group Capital Group territorial deployment of plants power engineering/ chemistry power engineering power engineering power engineering power engineering power engineering power engineering power engineering power engineering Warszawa Warszawa Warszawa Lublin Kraków Rybnik Sędziszów Zielona Góra Zielona Góra No. Company/ plant name Operation profile Segment Town 16. Z 1 Rail construction railways Poznań 17. Z 2 Road construction subcontractor roads Katowice 18. Z 3 Road construction roads Warszawa Katowice 19. Stalfa General construction construction Płock 20. EPN Gdynia General construction construction Siedlce 21. Energop General construction construction Warszawa 22. Z 7 General construction construction Szczecin 23. Z 8 General construction construction Lublin 24. Z 16 Zakład montażu construction Stalowa Wola 25. Z Z 20 Subcontractor Sices petrochemistry Naftobudowa complex works for refinery chemistry chemistry Płock Kraków 27. Z 21 Naftoremont Płock chemistry Płock 28. Sefako Chemistry construction GW chemistry Warszawa 29. Z 22 Design office power engineering, industry, construction designing Gliwice 30. Elektra 31. Z Z Z 3 Designing for public infrastructure and industry Design office commercial and office buildings Design office hydraulic engineering Centrall Office of Constructing Boliers designing designing designing designing Zabrze Kraków Bielsko Biała Tarnowskie Góry 34. Stalfa Research centre other Warszawa 35. EPN Gdynia Facilities maintanance plant other Siedlce 36. Energop Quality control plant other Siedlce 9

10 Activity of the Polimex-Mostostal Group Stockholders The stockholding structure has positive effect on liquidity of stock turnover. In I H2011, the average daily turnover at the stock exchange amounted to over 1,115,572 shares. Polimex-Mostostal S.A. Stockholders 10,07% 7,76% 9,95% 2,52% Pioneer Pekao TFI ING Open Pension Fund Aviva Open Pension Fund AVIVA BZ WBK Polimex-Cekop Development sp. z o.o. Others 69,70% Total number of shares amounts to 521,154,076 * Data as at 5 May

11 Activity of the Group in 2011 Reinforcing the leading position on the construction and engineering market Polimex-Mostostal is the largest in Poland company of the engineering and construction profile with sources of revenues diversified in respect to sectors and geography. Employment: 14,175 persons Unique and additional range of constrction and assembly services rendered as general contractorship for the most important sectors of economy The biggest manufacturer and exporter of steel products in Poland Main markets on which the Polimex - Mostostal Capital Group conducts its activity in Europe. - main market of activity - other markets 11

12 Financial results of PXM Group in 2011 Structure of revenues after I H 2011 Capital Group Polimex-Mostostal PLN 2,106 m Chemistry and environmental protectiona PLN 227 m 11% Power engineering PLN 424 m 20% Construction PLN 597 m 28% Roads and railways PLN 533 m 25% Production PLN 325 m 16% Polimex-Mostostal PLN 225 m Polimex-Mostostal PLN 336 m Polimex-Mostostal PLN 526 m Polimex-Mostostal PLN 426 m Polimex-Mostostal PLN 268 m Sefako PLN 81 m Torpol PLN 96 m 12

13 Activity of the Polimex-Mostostal Group Business segments Chemistry and Environmental Protection Revenues [PLN million] Share in Group sales 20.4% 10.8% Gross margin [PLN million] Gross margin 11.0% 13.2% Share in Group gross margin 20.6% 17.5% Revenues of Chemistry and Environmental Protection segment [PLN million] Growth outlook Expansion and modernisation of infrastructure related to liquid fuels warehousing estimated CAPEX USD 0.5 bn Development of industrial infrastructure in oil and gas, development of terminals Financial support for investments from EU Estimated EUR 20.0 bn CAPEX until 2014 to meet EU norms in potable water quality and sewage treatment New city waste incineration plant program for all major cities of Poland Investments of future strategic investors in stateowned enterprises 40,5 29,9 Gross margin of Chemistry and Environmental Protection segment [PLN million] 13

14 Activity of the Polimex-Mostostal Group Business segments Power engineering Revenues [PLN million] Share in Group sales 20.9% 20.1% Gross margin [PLN million] Gross margin 11.8% 7.2% Share in Group gross margin 22.7% 17.8% Revenues of Power Engineering segment [PLN million] Growth outlook Adaptation of energy sector in Poland to European CO2 emission standards PLN bn CAPEX until 2017 Wider use of natural gas and renewable energy sources Broad modernisation program for power equipment in Poland (boilers, turbines) Development of Independent Power Producer market, especially in industrial power engineering Investments in new high-capacity units (500 MW minimum) in Rybnik, Warsaw, Kozienice, Opole, and in Germany Use of alternative fuels in prototype systems (coal residues, bio-fuels) Announcements concerning the construction of nuclear plants in Poland Gross margin of Power Engineering segment [PLN million] 14

15 Activity of the Polimex-Mostostal Group Business segments General Construction Revenues [PLN million] Share in Group sales 31.9% 28.4% Gross margin [PLN million] Gross margin 7.4% 7.9% Share in Group gross margin 21.7% 27.6% Growth outlook Direct foreign investments as a source of new projects in sectors: traffic and transport, environment protection and commercial buildings Construction contracts across many EU and CIS states Increasing demand for sales space in shopping centres Revenues of Construction segment [PLN million] Gross margin of Construction segment [PLN million]* 15

16 Activity of the Polimex-Mostostal Group Business segments Roads and Railways 250 Revenues [PLN million] Share in Group sales 13.8% 25.3% Gross margin [PLN million] Gross margin 12.5% 5.4% Share in Group gross margin 15.9% 16.8% 533 Revenues of Roads and Railways segment [PLN million] Growth outlook Increased CAPEX in road and railway infrastructure thanks to new regional development funds available and expected increase of central budget funding (e.g. National Road Fund) Positive impact from growing share of direct foreign investments on development of local road and railway infrastructure Continuation of the program for construction and modernisation of motorways,express roads and ring roads Railway investments related to modernisation of existing railway system and its adaptation to highspeed travel Gross margin of Roads and Railways segment [PLN million] 16

17 Activity of the Polimex-Mostostal Group Business segments Steel Products and Galvanising Services Revenues [PLN in million] Share in Group sales 12.9% 15.5% Gross margin [PLN in million] Gross margin 16.1% 10.7% Share in Group gross margin 19.1% 20.3% Growth outlook Good prospects despite the recent slowdown. High profitability is expected to continue in steel structure production, hot-dip galvanising and power boiler production. Expected growth of demand for steel structures and products for roads and rail investments and for heavy industry and general construction Increasing demand for environment-friendly power equipment Revenues of Production [PLN million] Gross margin of Production [PLN million] 17

18 Activity of the Polimex Mostostal Group Portfolio of orders Accomplishments and development directions Financial results

19 37.8% Value of the portfolio of orders division per sectors The value of the profolio of orders amounts to PLN 9 bn (PLN 12.3 bn inclusive of the revenues of consortia partners)* With consortia partners % Without consortia partners % 17.8% % Polimex - Mostostal Chemistry Power engineering Construction Roads and railways Production % calculated for changes of the value of the portfolio exclusive of the consortia partners participation *) Contracts in the last stage of negotiation the amount of PLN 0.4 bn 19

20 Portfolio of orders Important contarcts in the segments: Roads and Railways, Power Engineering, Construction, Chemistry PROJECT I II III IV I II III IV I II III IV I II III IV I II III IV Construction of motorway A-4 section: Rzeszów (Rzeszów Wschód junction) Jarosław (Wierzbna junction) (PLN 1.8 bn) Modernization of the railway station Łódź Fabryczna (PLN 1.43 bn) Construction of a heating unit at Bielsko-Biała Heat and Power Generating Plant (PLN 500 m) Construction of the Museum of the History of Polish Jews in Warsaw (PLN 152 m) European Center of Solidarity (PLN 157 m) Contract for the construction of a tank terminal at the port of Rotterdam (Euro 52 m) 20

22 Accomplishments and development directions Company s accomplishments Extensive portfolio of orders The value of orders as in August 2011 amounted to PLN 8.6 PLN bn (PLN 11.9 bn inclusive of consortia partners ) due to proactive and effective acquisition of new contracts. Increase of the scope of activities Organic development reinforces the Group's own execution and design capacities in the most perspective industries: power engineering, general and railway construction as well as steel products manufacturing. The incorporation of seven companies with the Capital Group operating in power engineering and chemistry sectors. The creation of the strongest organisation capable of realising the biggest energy contracts in Poland. Economic results Maintaining of high revenues from sales in the amount of PLN 2,106 m (I H 2011). 22

23 Accomplishments and development directions Strategic objectives Strategic directions in Polimex-Mostostal CG operations for the following years: Organic growth Cost optimization and contract profitability improvement i.a. owing to engaging in contracts with higher profit margins Optimization of functions and synergy effects Group restructuring based on incorporation of 7 subsidiaries in chemistry and power engineering M&A Monitoring the engineering and construction market with the view of potential acquisitions that can supplement the structure of the value chain of Pollimex-Mostostal in the mosts perspective areas. Divestment Selling certain assets, mainly real property and land. 23

24 Accomplishments and development directions Organic growth Recent Group investments Production capacity development Design potential development Completion of expanding Group s production capacities, including the steel constructions plant in Siedlce and Seafco boilers factory Realisation of the investment programme for Energomontaż- Gdynia. Purchase of the part of Gdynia Shipyard. Developing the capacity on the wharf in Civitavecchia by Grande Meccanica SpA Expansion of design potential by the purchase of Centralne Biuro Konstrukcji Kotłów SA effect effect effect Doubled production output in steel products and doubled volume in power boiler production. Modern zincing line launched, investment within the Tarnobrzeska and Starachowicka Special Economic Zone. Company enjoys tax benefits. Investment in Gdynia within the Pomorska Special Economic Zone. Company enjoys substantial tax benefits. Increasing the cometitive edge due to new technology. Achieving the possibility for assemblying large-size apparatus elements. Increasing the Group s competitiveness and more efficient performance in infrastructural projects based on Design-and-Build scheme 24

25 Accomplishments and development directions Growth through M&A M&A activity in Acquisition of Elektra Sp. z o.o. specialising in construction and repairs of power networks (2010 ) Acquisition of Centralne Biuro Konstrukcji Kotłowych (Boiler Engineering Design Office) (2010 ) Acquisition of shares in Pracownia Wodno-Chemiczna (Hydrochemical Laboratory) EKONOMIA Sp. z o.o. specialised service provider in water and industrial waste treatment (February 2009) Merger of Energotechnika and Biprokwas, new headquarters in Gliwice (January 2009) Acquisition of ECE-Remont a contractor in renovation and maintenance works and assembly of power equipment (December 2008) Acquisition of Romanian/Italian Coifer Group which offers general contractorship, steel structure production, high-pressure equipment design and manufacturing (February 2008) 25

26 Accomplishments and development directions Growth through restructuring Formal incorporation of 7 subsidiaries from Power Engineering and Chemical sectors was finalised on 31 December 2010 As a result Energomontaż Północ S.A. Naftobudowa S.A. Naftoremont Sp. z o.o. ZRE Kraków Sp. z o.o. ZRE Lublin S.A. EPE Rybnik Sp. z o.o. ECeRemont Sp. z o. o. became Polimex-Mostostal divisions Polimex-Mostostal took over all rights and obligations of incorporated subsidiaries. Merger yields a range of tangible benefits such as: increasing the attractiveness of offering for investors cost optimisation reducing the risks in operations higher share of own resources in contracts and offering expanded with new products and services higher performance capacity and end-to-end contractorship of large-scale investments better fit for expected large-scale power investments in Poland consolidation of 100% of the net profit of the incorporated companies 26

27 Accomplishments and development directions Growth through restructuring New organisation structure was implemented. It comprises the centralisation of supporting services and leaves autonomy of seven new first-line departments. The applied solution is compliant with current market demands, where middle and small contracts are realised. Further optimisation of the structure in order to increase a realisation potential will be contnued at the moment of starting large power engineering contracts. Efforts to yield synergy effects are continued. Mechanisms to reduce costs are launched. Central purchasing system has been implemented. Strategic development departments, sales force, etc. have been strengthened. All plants introduced SAP system. The restructuring program highly increased opportunities to get largescale contracts in the power engineering sector. 27

28 Accomplishments and development directions Macroeconomic environment vs Group operations Opportunities Threats New plant operator function Crisis impact on global economy Necessity to continue government programs in road and rail construction Incoming financial support from EU and foreign investments Investments in Power Engineering i.a. strict environmental standards, the necessity for modernisation of systems and increasing capacity Outlook on rising profitability of infrastructural projects thanks to Public-Private Partnership regulations and Public Procurement Law Reduction of investments in some segments (e.g. roads and railways) Reduction of margins due to competitiveness and prices of raw materials including steel. Negative impact of financial crisis on project funding opportunities in particular due to: Higher financial costs Additional collaterals expected by financial institutions Reduction of expenses for some projects by the State Treasury and local governments 28

30 Financial results of PXM Group in 2011 Selected financial results of I H 2011 Revenue from sales [ PLN million] 1,806 2,106 EBITDA [PLN million] EBITDA margin 7.2 % 5.4 % Operating profit [PLN million] Operating profit margin 4.6 % 3.1 % Net profit [PLN million] Net profit margin 2.4 % 1.2 % 30

31 Financial results of PXM Group in 2011 Results in I H 2011 Revenues from sales 16.6 % Net profit -39.7% Operating profit EBITDA % %

32 Financial results after I H 2011 Gross margins on sales In values [PLN million] TOTAL REVENUE Production Roads and railways Construction Power engineering Chemistry I H 2010 revenues I H 2010 gross margin I H 2011 revenue I H 2011 gross margin In percentage 20% 10% 10,9% 8,1% 16,1% 10,7% 12,5% 5,4% I H 2010 gross margin I H 2011 gross margin 7,4% 11,8% 11,0% 7,9% 7,2% 13,2% 0% TOTAL Production Roads and railways Construction Power engineering Chemistry 32

33 Financial results Revenues by segments Value participation of individual segments in the Group s revenues [PLN million] Chemistry Power engineering Construction Roads and railways Production I H 2011 Percentage representation of each segment in the Group s revenues 14% 13% Chemistry 20% Power engineering Construction Roads and railways 21% Production 32% 33

34 Financial results Sales in segments for 4 completed quarters (PLN million) 1 400, , ,0 800,0 600,0 400,0 200,0 0,0 Chemistry Power engineering Construction Roads and railways Production 34