CIECH a modern, diversified chemical group on a stable path of growth. Presentation of the CIECH Group

Transcription

1 CIECH a modern, diversified chemical group on a stable path of growth Presentation of the CIECH Group

2 The CIECH Capital Group Who are we and what do we do? The CIECH Capital Group Who are we and what do we do?

3 The CIECH Group We are one of the leaders of the Polish chemical market and an important player in the European market years in world markets more than 10 years at the Warsaw Stock Exchange (GPW) 8 production plants more than 3.7 thousand employees in the Group

4 The CIECH Group We are supported by a stable, strategic shareholder 4 Since 9 June 2014, KI Chemistry (a company from the Kulczyk Investments group) has been the majority shareholder of CIECH KI confirms its long-term involvement in the process of building the company s market value. With particular emphasis on its intention of transforming CIECH into one of the leading chemical companies in the world. Open Pension Fund (OFE) Nationale-Nederlanden 9% KI Chemistry 51% Others (including Investment Fund Companies (TFI), Open Pension Funds (OFE), Asset Management companies, the Government of Norway, individual investors) 52,699,909 shares = 52,699,909 votes 40% As of 16 May 2016

5 The CIECH Group Our business model is diversified Data for Soda segment PLN 2,241 million of revenues PLN 656 million of EBITDA (Adj.) Organic segment PLN 770 million of revenues PLN 85 million of EBITDA (Adj.) Transport Segment PLN 123 million of revenues PLN 13 million of EBITDA (Adj.) PLN 3,273 million of revenues PLN 748 million of EBITDA (Adj.) Silicates and glass segment PLN 175 million of revenues PLN 33 million of EBITDA (Adj.) EBITDA (Adj.) adjusted EBITDA; the Group also reports the Other segment which covers consolidation exclusions and corporate functions

6 Soda segment Strong market position and diversification inside the segment Segment 6 Soda ash Baking soda Salt Used mainly to produce glass and granular detergents Used mainly to produce animal feed and food Used mainly in chemical and food industries and in water treatment processes

7 Organic segment Dynamic development and market expansion Segment 7 Plant protection products Used mainly by farmers (herbicides, fungicides, insecticides) Resins Used mainly to produce powder coating, varnishes, as well as in construction and transport industries Polyurethane foams Used mainly in production of upholstery furniture

8 Silicates and glass segment Stable position and continued growth Segment 8 Glass products Used in niche markets: ornamental lanterns for candles, jars with glass tops and twist-off jars for food products Silicates Used for production of precipitated silica (applied mainly in the tyre industry), detergents, various types of seals, coatings and waterproof layers

9 Transport Segment Concentration on services inside the Group Segment 9 Transshipment Rail transport Logistics inside the Group

10 Production activity Advantage connected with location of plants 10 We have 8 production plants located in Poland, Germany and Romania. CIECH Pianki Bydgoszcz CIECH Soda Deutschland Stassfurt CIECH Vitrosilicon Żary, Iłowa CIECH Soda Polska Inowrocław, Janikowo CIECH Sarzyna Nowa Sarzyna Soda segment Organic segment Silicates and glass segment CIECH Romania Ramnicu Valcea

11 Our activities are set by the Strategy adopted in 2014

12 Development of the CIECH Group Maximization of the CIECH s value through organic development 12 Strategy of the CIECH Group for ** 1. Growth of revenues in the soda segment 2. Twofold increase of the share in the Polish market of plant protection products 3. Growth of adjusted EBITDA 4. Growth of the Company s market value approx. PLN 3.8 billion average annual revenues from sale* approx. PLN 660 million average annual adjusted EBITDA* approx. 17% average annual adjusted EBITDA margin* <1 Net debt to EBITDA ratio in 2019 * **Strategy of the CIECH Chemical Group for approved on 3 November 2014 by the Supervisory Board of CIECH

13 Previous years brought effective optimization activities and significant investments

14 Financial situation We constantly generate higher profits and margins 14 Revenues [mpln] EBITDA (Adj.) [mpln] Result on sale [mpln] EBITDA Margin (Adj.) [mpln] ,9% ,7% 12,7% 15,8% EBITDA (Adj.) adjusted EBITDA (adjusted by non-typical one-off events); data reported in the statement for a given year, also covers discontinued activity

15 Development of the CIECH Group The most important implemented projects 15 Soda +200 Project increase of the soda production capacity by additional 200 thousand tonnes per year MCPA installation state-of-art installation for manufacture of an active substance for production of plant protection products Modernization of the salt production installation intensification of dry salt production Extension of plastics production installation increase of the production capacity of saturated polyester resins by 100% New calcinator at the plant in Romania increase of the production capacity

16 Financial situation Significant decrease in financial costs 16 Refinancing of the debt in 4Q2015 Was 9.5%* Savings at the level of PLN 70 milion per year Is <2% High Yield bonds of EUR 245 million revolving credit of up to PLN 100 million other credit facilities double-currency credit in PLN and EUR (of up to PLN 1.34 million) and revolving credit (of up to PLN 250 million) Moody's rating: Ba3 / positive perspective Standard & Poor s rating: BB- / stable perspective * HY bond interest

17 In 1Q 2016, continuation of very good financial results

18 Financial results for 1Q16 Rekord EBITDA (Adj.) 18 [PLN million] 1Q16 1Q15 yoy 1Q16 consensus 1Q16 forecasted range Revenue % Gross sales profit % - - Gross sales margin 29.5% 26.1% 3.4 p.p. - - EBIT ,4% EBIT margin 18.2% 14.3% 3.9 p.p. 17.0% 15.6% % EBITDA ,6% EBITDA margin 24.6% 21.2% 3.4 p.p. 23.8% 21.9% % Adjusted EBITDA ,0% Adjusted EBITDA margin 25.0% 23.6% 1.4 p.p. 23.8% 21.9% % Net result ,1% Net margin 12.4% 6.5% 5.9 p.p. 12.3% 9.2% % EBITDA (Adj.) adjusted EBITDA (adjusted by unusual one-off events, in 1Q2016, mainly a change in the level of provisions PLN -2.7 million); PAP consensus of 10 May of the current year, based on forecasts from 11 brokerage houses

19 Financial results for 1Q16 Revenue % 10% 27% 27% 5% 6% 5% 5% 12% 9% 6% 19% 27% 25% 19% 22% 22% 24% 59% 62% 61% 71% 66% 66% 72% 71% 71% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Soda segment Organic segment Glass and silicates segment Transport segment Other

20 Financial results for 1Q16 EBITDA (Adj.) % 15% 7% 11% 4% 17% 6% 9% 5% 5% 3% 15% 3% 9% 22% 77% 82% 86% 9% 101% 82% 84% 93% 92% 89% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Soda segment Organic segment Glass and silicates segment Transport segment Other EBITDA (Adj.) adjusted EBITDA (adjusted by unusual one-off events, in 1Q2016, mainly a change in the level of provisions PLN -2.7 million)

21 Financial results for 1Q16 Debt Q2016 Net debt Net debt / EBITDA (Adj.) The Group systematically reduces its debt. At the end of 1Q16, the net debt / EBITDA (Adj.) ratio amounted to 1.9. According to the adopted strategy, the Group endeavours to reduce the ratio to the level below 1 in Thanks to refinancing of the debt in 1Q 2016, the Group s costs of debt servicing were much lower [PLN million] At the end of 1Q16 At the end of 2015 change Debt ratio 64.1% 65.7% -1.6 p.p. Long-term debt ratio 45.7% 46.1% -0.4 p.p. Debt to equity ratio 178.8% 191.5% p.p. Gross financial liabilities (PLN million) 1,579 1, % Net financial liabilities (PLN million) 1,447 1, % Methodology for calculating the metrics is consistent with the financial statement

22 Effective implementation of the strategy and strategic support of the owner translated into the growth of CIECH s market value in recent years

23 Growth of goodwill CIECH share price long-term growth trend 23 Share price [PLN] 90 4Q2015 Earlier redemption of HY bonds and refinancing of indebtedness Q2014 Acquisition of the majority package of CIECH shares by KI Chemistry 2Q2014 Early redemption of bonds 4Q2014 Signature of a significant contract with Solvay for delivery of sodium silicate 4Q2014 Adoption of strategy for Q2015 End of investment of dry salt intensification 1Q2015 The end of the 1st stage of the Soda +200 Project 3Q2015 Change in the position of the President of the Management Board 4Q2015 New member of the Management Board 1Q2016 Marketing of the ZIEMOVIT brand 1Q2016 End of the Soda +200 Project Information chart

24 CIECH also has good prospects for the future

25 Outlook for future Further development of the soda segment 25 Sales of additional soda volumes from expanded installations Entry to new markets Higher quality of products and a focus on highly processed products Higher share of dry salt in revenue, lower exposure to weather conditions

26 Outlook for future Dynamic development of the organic segment 26 Developing the plant protection chemicals portfolio, including the ZIEMOVIT product line Higher efficiency of AGRO sector in CIECH Sarzyna Expanding abroad focusing on most promising directions Developing foams portfolio Focusing on high margin products

27 Outlook for future Other investments and projects 27 Increased innovation through new R&D projects Continued construction of a fume treatment installation to remove nitrogen and sulphur oxides Modernisation and expansion of the sodium silicate furnace Transport services for external clients

28 Why CIECH?

29 Innovative approach to business Modernised plants Extending the portfolio based on recent consumer trends Diversification, also within segments Dynamic development of the organic segment and increasing its share in the Group s revenue Modern and diversified chemical group on a stable progress path Stable increase in profits and margins since 2013 and potential for further effective growth in all segments Financial backing from a strong dominant shareholder

30 Załączniki 30 CONTACT FOR INVESTORS: Joanna Siedlaczek Investor Relations Expert This document has been prepared solely for informational purposes. It includes only summary information, is not exhaustive, and may not be used as a sole basis for any assessment or analysis. CIECH S.A. makes no guarantees (explicit or implicit) regarding information presented herein and such information, including forecasts, estimates and opinions, should not be unduly relied upon. CIECH S.A. does not accept any responsibility for possible mistakes, omissions or irregularities found herein. The document is based on sources of information which CIECH S.A. deems to be reliable and accurate, however, it does not guarantee them to be exhaustive nor to fully reflect the actual situation. This document does not constitute an advertisement or a public offer of securities. It may include forward-looking statements that involve investment risks or uncertainties and may significantly differ from actual results. CIECH S.A does not accept any responsibility for consequences of decisions made based on this document. The responsibility lies exclusively with the party using the document. This document is protected by the Copyright and Related Rights Act. Copying, publishing or distributing it requires prior written consent of CIECH S.A.