Presentation of the Polimex-Mostostal Group November 2011

Transcription

1 Presentation of the Polimex-Mostostal Group November 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 on the Polish construction and engineering market Revenues: PLN 3,468 m (for 1-3 Q 2011) Employment: 14,461 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 Dynamics of changes 1-3 Q Q 2011 YoY Revenues PLN 2,979 m PLN 3,468 m % Contracting (without consortium members) PLN 6,942 m [September 2010] PLN 8,337 m [September 2011] + 20% Employment 13,298 persons 14,461 persons 9% 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 products plant) Malarnia, (paint shop) in Siedlce Centralne Biuro Konstrukcji Kotłów SA (CBKK) (Boiler Engineering Design Office) 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 Design Offices Merger with ZREW S.A., Controlling interest in: EPN, ZRE Kraków, ZRE Rybnik TURBUD, WIBUD Production Chemistry Roads and railways Road Construction 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] (without other consortium members) 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 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 ZABRZE RUDNIK RYBNIK KRAKÓW DĘBICA LEGEND Power engeneering Production Roads and railways General construction Chemistry and enviornmental protection Designing BIELSKO-BIAŁA 8

9 No. Company/ plant name Operation profile Segment Town 1. Z 1 Production of steel structures production Siedlce Rudnik 2. Z 2 Production of platform gratings production Siedlce 3. Z 3 Hot dip galvanising plant production 4. Stalfa Production of small steel elements Executions 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. comprehensive contractorship for power engineering and chemistry Power engineering construction (general contractorship) Servicing, line maintenance and assembly for power engineering ZRE Lublin Servicing, operation 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 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. Torpol Railway construction railways Poznań 17. Prinż 1 Road construction subcontractor roads Katowice 18. Z 3 Road construction roads Warszawa Katowice 19. Turbud General construction construction Płock 20. Z 5 General construction construction Siedlce 21. Z 6 General construction construction Warszawa 22. Z 13 General construction construction Szczecin 23. Z 14 General construction construction Lublin 24. Z 11 Assembly plant construction Stalowa Wola 25. Polimex Sices Subcontractor Sices petrochemistry chemistry Płock 26 Z 17 Naftobudowa comprehensive works for refinery chemistry Kraków 27. Z 18 Naftoremont Płock chemistry Płock 28. Z Design Centre PxM WBP Zabrze Sp. Z o.o. Chemistry construction general contractorship Design office power engineering, industry, construction Designing for public infrastructure and industry chemistry designing designing 31. PxM Projekt Design office commercial and Południe office buildings designing 32. Ekonomia Design office hydraulic engineering designing 33. CBKK S.A. Boiler engineering design office designing 34. EPN Technika Spawalnicza (Welding Technology) Warszawa Gliwice Zabrze Kraków Bielsko Biała Tarnowskie Góry Research laboratory other Warszawa 35. Z 12 Operation maintanance plant other Siedlce Z 15 Quality control plant other Siedlce

10 Activity of the Polimex-Mostostal Group Stockholders The stockholding structure has positive effect on liquidity of stock turnover. In I H 2011, the average daily turnover of shares amounted to over 1,115,572 shares. Polimex-Mostostal S.A. Stockholders Total number of shares amounts to 521,154,076 * Data as at 22 November

11 Activity of the Group in 2011 Reinforcing the leading position on the construction and engineering market Polimex-Mostostal is the largest company of the engineering and construction profile in Poland with sources of revenues diversified in respect to sectors and geography. Employment: 14,461 persons Unique and complementary range of construction and installation services rendered on the general contractorship basis for the most important sectors of economy The largest 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 3 Q 2011 Polimex-Mostostal Capital Group PLN 3,468 m Chemistry and environmental protection PLN 331 m 10% Power engineering PLN 694 m 20% Construction PLN 917 m 26% Roads and railways PLN 1018 m 29% Production PLN 505 m 15% Polimex-Mostostal PLN 331 m Polimex-Mostostal PLN 550 m Polimex-Mostostal PLN 809 m Polimex-Mostostal PLN 783 m Polimex-Mostostal PLN 407 m Sefako PLN 132 m Torpol PLN 213 m 12

13 I H 2010 IH , 5 29, 9 I H 2010 I H 2011 Activity of the Polimex-Mostostal Group Business segments Chemistry and Environmental Protection 1-3 Q Q 2011 Revenues [PLN million] Share in Group sales 20.1% 9.6% Gross profit [PLN million] Gross margin 10.7% 7.2% Share in Group gross profit 21.3% 10.3% I-III Q 2010 I-III Q 2011 Revenues of Chemistry and Environmental Protection segment [PLN million] Growth outlook Program of construction of municipal waste incineration plants in all major cities of Poland Development of oil and gas transmission infrastructure, development of terminals Estimated EUR 20.0 bn EUR until 2014 to meet EU norms in potable water quality and sewage treatment Financial support for investments from EU Investment packages of future strategic investors within the industry in companies of the heavy chemical synthesis sector 64,2 24,2 I-III Q 2010 I-III Q 2011 Gross profit of Chemistry and Environmental Protection segment [PLN million] 13

14 I H 2010 IH 2011 Activity of the Polimex-Mostostal Group Business segments Power engineering 1-3 Q Q 2011 Revenues [PLN million] Share in Group sales 20.6% 20.0% Gross profit [PLN million] Gross margin 12.3% 5.8% Share in Group gross profit 25.0% 17.1% I-III Q 2010 I-III Q 2011 Revenues of Power Engineering segment [PLN million] Growth outlook Construction of new high-capacity units (500 MW minimum) in Rybnik, Warsaw, Kozienice, Opole, and in Germany 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 engineering equipment in Poland (boilers, turbines) Development of the Independent Power Producer market, especially in industrial power engineering Use of alternative fuels in prototype systems (coal residues, bio-fuels) Announcements concerning the construction of nuclear plants in Poland 75,5 40 I-III Q 2010 I-III Q 2011 Gross profit of Power Engineering segment [PLN million] 14

15 Activity of the Polimex-Mostostal Group Business segments General Construction 1-3 Q Q 2011 Revenues [PLN million] Share in Group sales 29.3% 26.5% Gross profit [PLN million] 52 55,5 Gross margin 6.0% 6.0% Share in Group gross profit 17.3% 23.7% Growth outlook Continuation of direct foreign investments as a source of new projects in sectors: traffic and transport, environmental protection and commercial buildings Construction contracts across many EU and CIS states Increasing demand for sales space in shopping centres I-III Q 2010 I-III Q 2011 Revenues of Construction segment [PLN million] 52 55,5 I-III Q 2010 I-III Q 2011 Gross profit of Construction segment [PLN million]* 15

16 Activity of the Polimex-Mostostal Group Business segments Roads and Railways 1-3 Q Q 2011 Revenues [PLN million] Share in Group sales 15.8% 29.4% Gross profit [PLN million] 57,6 54 Gross margin 12.2% 5.3% Share in Group gross profit 19.1% 23.1% I-III Q I-III Q Revenues of Roads and Railways segment [PLN million] Growth outlook Increased CAPEX in road and railway infrastructure thanks to the use of regional development funds available and central budget funds (e.g. National Road Fund) Positive impact of growing share of direct foreign investments on development of local road and railway infrastructure Continuation of the program of 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 57,6 54 I-III Q 2010 I-III Q 2011 Gross profit of Roads and Railways segment [PLN million] 16

17 Activity of the Polimex-Mostostal Group Business segments Galvanising Production and Services 1-3 Q Q 2011 Revenues [PLN in million] Share in Group sales 14.2% 14.6% Gross profit [PLN in million] 52,2 60,4 Gross margin 12.4% 12.0% Share in Group gross margin 17.3% 25.8% Growth outlook Good prospects for the production in the construction sector despite the recent economic slowdown. High profitability is expected in steel structure production, hot-dip galvanising services. Expected growth of demand for steel structures and products for road and rail investments and for heavy industry and general construction Increasing demand for environment-friendly power equipment I-III Q 2010 I-III Q 2011 Revenues of Production segment [PLN million] 52,2 60,4 I-III Q 2010 I-III Q 2011 Gross profit of Production segment [PLN million] 17

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

19 20% Value of the portfolio of orders by sectors The value of the portfolio of orders amounts to PLN 8.8 bn (PLN 12.0 bn including the revenues of the consortium members)* With the consortium members % Without the consortium members % 36.1% 8.7% I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 Polimex - Mostostal Chemistry Power engineering Construction Roads and railways Production % calculated for changes in the value of the portfolio excluding the consortium members participation *) Contracts in the last stage of negotiation the amount of PLN 0.5 bn 19

20 Portfolio of orders Important contracts 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 A-4 motorway section: Rzeszów (Rzeszów Wschód junction) Jarosław (Wierzbna junction) (PLN 1.8 bn) Modernization of the Łódź Fabryczna railway station (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) Construction of a tank terminal at the port of Rotterdam (Euro 52 m) 20

22 Accomplishments and development directions Company s accomplishments Record high value of portfolio of orders The value of the contracts signed to be executed in 2012 and subsequent years amounted to PLN 8.3 bn (PLN 11.5 bn including the consortium members) at the end of September 2011 Increase in the scope of activities Organic development and development by acquisitions reinforces the Group's own execution and design capacities in the most prospective industries: power engineering, chemistry, general and railway construction as well as steel products manufacturing. The incorporation of seven companies of the Capital Group operating in power engineering and chemistry sectors. The creation of the strongest organisation capable of executing the largesy power engineering contracts in Poland. Economic results Maintaining high revenues from sales in the amount of PLN 3,468 m (1-3 Q 2011). An increase by 16.4% when compared to 1-3 Q

23 Accomplishments and development directions Strategic objectives Directions of strategic activities of Polimex-Mostostal: Organic growth Cost optimization and profitability improvement i.a. owing to execution of contracts with higher profit margins Optimization of organizational strategy and use of synergy effects resulting from incorporation of 7 companies operating in the chemistry and power engineering sectors Acquisitions Monitoring of the engineering and construction market in respect of potential acquisitions that can increase the potential of Polimex-Mostostal in the mosts prospective areas. Divestment Selling certain assets, mainly real property and land for development. 23

24 Accomplishments and development directions Organic growth Recent Group investments Production capacity development Design potential development Completion of expanding Group s production capacity and achieving its maximum level in steel structure divisions in Siedlce and Sefako power boilers factory Execution of the investment program for Energomontaż- Gdynia. Purchase of the part of Gdynia Shipyard property. Developing the output capacity on the wharf in Civitavecchia by Grande Meccanica SpA Expansion of design potential by the purchase of Centralne Biuro Konstrukcji Kotłów S.A. (Boiler Engineering Design Office) effect effect effect Doubled output capacity in respect of steel products and doubled volume in the power boiler production. Modern galvanizing line launched. Investments within the Tarnobrzeg and Starachowice Special Economic Zone. Company enjoys tax benefits. Investment in Gdynia within the Pomorze Special Economic Zone. Company enjoys substantial tax benefits. Increasing the competitive advantage due to new technology. Gaining the possibility of assembling large apparatus elements. Increasing the Group s competitiveness and more efficient execution of investments based on Design-and-Build scheme 24

25 Accomplishments and development directions Growth through M&A Acquisition made in recent years: Acquisition of Elektra Sp. z o.o. specialising in construction and repair 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. specialized service provider within the scope of water and industrial waste treatment (February 2009) Acquisition of the part of ECE-Remont specializing in repair and maintenance works as well as assembly of power engineering equipment (December 2008) Acquisition of Romanian/Italian Coifer Group which executes projects as general contractor, specializes in 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 operating within 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. have become Polimex-Mostostal divisions Polimex-Mostostal took over all rights and obligations of incorporated subsidiaries. Merger provides a range of tangible benefits such as: more attractive offer for investors cost optimisation reduced risks in the operating activity increased share of own resources in execution of works, offer extended to include new products and services greater output capabilities and comprehensive execution of large-scale investments better preparation for the planned large-scale investments in the Polish power engineering sector consolidation of 100% of results of the incorporated companies 26

27 Accomplishments and development directions Growth through restructuring New organisational structure was implemented. It comprises the centralisation of supporting services and the retained autonomy of new seven first-line departments. The applied solution corresponds to the current market requirements, where medium-sized and small contracts are executed. Further optimisation of the structure aiming at increasing executiont capabilities will be continued at the moment of commencement of execution of large power engineering contracts. Efforts to create synergy effects are continued. Mechanisms to reduce costs are launched. Central purchasing system has been implemented. Strategic development departments, sales services, etc. have been strengthened. In all the SAP system has been implemented. The restructuring program highly increased opportunities to obtain large-scale contracts in the power engineering sector. 27

28 Accomplishments and development directions Macroeconomic environment vs Group operations Opportunities Threats New plant operator function Investments in the power engineering sector i.a. in connection with strict environmental standards and necessity for modernisation of systems and increasing the output Necessity to continue government programs in the field of road and rail construction Incoming financial support from EU and foreign investments Outlook on rising profitability of infrastructural projects thanks to Public-Private Partnership regulations and Public Procurement Law Assuming operator functions Perspective of new contracts in Arab countries and North Africa.. Impact of crisis on global economy 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 in respect of some projects incurred by the State Treasury and local governments 28

30 Financial results of PXM Group in 2011 Selected financial results for 1-3 Q I-III Q 2010 I-III Q 2011 Revenue from sales [ PLN million] 2,979 3,468 EBITDA [PLN million] EBITDA margin 6.8 % 4.4 % Operating profit [PLN million] Operating profit margin 4.3 % 2.3 % Net profit [PLN million] Net profit margin 2.0 % 1.2 % 30

31 Financial results of PXM Group in 2011 Results after 3 III Revenues from sales 16.4 % Net profit -32.1% I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q 2011 Operating profit EBITDA % % I-III Q 2010 I-III Q 2011 I-III Q 2010 I-III Q

32 Financial results after III Q 2011 Gross margins on sales In values [PLN million] TOTAL REVENUE Production Roads and railways Construction Power engineering Chemistry I I-III H 2010 Q revenues I-III I H Q 2010 gross margin I-III I H 2011 Q revenues I-III I H 2011 Q gross margin In percentage 20% 15% 10% 5% 0% 12,4% 10,1% 12,2% 12,3% 7,2% 12,0% 10,7% 6,7% 6,0% 6,0% 5,3% 5,8% TOTAL Production Roads and railways Construction Power engineering Chemistry I-III I H Q 2010 gross margin I-III I H Q 2011 gross margin

33 Financial results Revenues by segments Value share of individual segments in the Group s revenues [PLN million] Chemistry Power engineering Construction Roads and railways Production Percentage representation of each segment in the Group s revenues 14% Chemistry 20% Power engineering 16% Construction Roads and railways 21% Production 29% 29% 15% 10% 26% 20% I-III Q 2010 I-III Q

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