Presentation of the Polimex-Mostostal Group March 2011

Transcription

1 Presentation of the Polimex-Mostostal Group March 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 Highest revenues in the industry: 4165 million PLN (2010) Employment: 13,000 persons Leading position in the Polish construction and engineering market 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 million PLN million -5,3 % Backlog PLN million [February 2010] mln PLN million [February 2011] +12 % Employment persons persons -6 % 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 Coifer under control, a Romanian- Italian group Formal incorporation of 7 subsidiaries finalised Mostostal Siedlce established Mostostal Siedlce debuts on 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, 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 Composition proceedings, reorganisation of the Capital Group, optimisation of costs Power Engineering Division in PxM Merger with Mostostal Siedlce S.A. Chemistry 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

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

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 (approximately 400 million PLN) 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 consortia partners Net profit of the Capital Group [in thousand PLN] Employment within the Capital Group

8 Activity of the Polimex-Mostostal Group Capital Group 8

9 Activity of the Polimex-Mostostal Group Structure of revenues 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. Main markets on which the Polimex - Mostostal Capital Group conducts its activity in Europe. - main activity market - other markets 9

10 Activity of the Polimex-Mostostal Group Stockholders The stockholding structure has positive effect on liquidity of stock turnover. In 2010, the average daily turnover at the stock exchange was 1,140,421 shares. Polimex-Mostostal Stockholders. Pioneer Pekao TFI ING Open Pension Fund PZU Złota Jesień Open Pension Fund Aviva Open Pension Fund AVIVA BZ WBK Polimex-Cekop Development sp. z o.o. Others Total stocks 520,918,203 * Data as at 9 Feb,

11 Activity of the Polimex-Mostostal Group Structure of revenues I-IV Q 2010 Capital Group Polimex-Mostostal m PLN Chemistry and environmental protection 718 m PLN 17% Power engineering 847 m PLN 20% Construction 1235m PLN 30% Roads and railways 774 m PLN 19% Production 591 m PLN 14% Polimex-Mostostal 474 m PLN Polimex-Mostostal 479 m PLN Polimex-Mostostal m PLN Polimex-Mostostal 493 m PLN Polimex-Mostostal 524 m PLN Naftobudowa 152 m PLN Sefako 140 m PLN Coifer 114 m PLN Torpol 274 m PLN Energomontaż-Północ 21 m PLN Naftoremont 93 m PLN Energomontaż-Północ 184 m PLN 11

12 Activity of the Polimex-Mostostal Group Business segments Chemistry and Environmental Protection Revenues [m PLN] Share in Group sales 16.9% 17.2% Gross margin [m PLN] Gross margin 10.9% 9.2% Share in Group gross margin 15.9% 14.7% Segment revenue for Chemicals and Environment [PLN m] 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

13 Activity of the Polimex-Mostostal Group Business segments Power engineering Segment revenue for Energy [PLN m] Revenues [PLN m] Share in Group sales 23.6% 20.3% Gross margin [PLN m] Gross margin 11.4% 10.6% Share in Group gross margin 23.2% 20.2% 846 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 new nuclear plants in Poland 2009 Q

14 Activity of the Polimex-Mostostal Group Business segments Roads and Railways Segment revenue for Roads and Railways [PLN m] Revenues [PLN m] Share in Group sales 16.6% 18.6% Gross margin [PLN m] Gross margin 9.7% 14.0% Share in Group gross margin 13.9% 24.3% 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

15 Activity of the Polimex-Mostostal Group Business segments General Construction Revenues [PLN m] Share in Group sales 30.9% 29.7% Gross margin [PLN m] Gross margin 9.6% 8.9% Share in Group gross margin 25.5% 24.5% Growth outlook Direct foreign investments as a source of new projects in sectors: traffic and transport, environment and commercial buildings Construction contracts across many EU and CIS states Increasing demand for sales space in shopping centres Segment revenue for General Construction [PLN m]

16 Activity of the Polimex-Mostostal Group Business segments Steel Products and Galvanising Services Segment revenue for Production [PLN m] Revenues [PLN m] Share in Group sales 12% 14.2% Gross margin [PLN m] Gross margin 20.7% 12.3% Share in Group gross margin 21.5% 16.3% 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 Demand for steel structures related to Euro 2012 event projects

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

18 Portfolio of orders The value of the portfolio of orders amounts to 7.1 billion PLN ( 9.8 billion PLN including revenues of consortia partners) +12% -3% With consortia partners -1% +93% Without consortia partners -32% +27% -23% IV Q 2009 IV Q 2010 IV Q 2009 IV Q 2010 IV Q 2009 IV Q 2010 IV Q 2009 IV Q 2010 IV Q 2009 IV Q 2010 IV Q 2009 IV Q 2010 Polimex - Mostostal Chemistry Power engineering Construction Roads & Railways Production 18

19 Portfolio of orders Important contracts in the Chemistry and environmental protection segment PROJECT I II III IV I II III IV I II III IV I II III IV I II III IV Construction of a PTA system at the Terephthalic Acid Production Plant in Włocławek for PKN Orlen (550 million PLN) A part of the 10+ programme for the Lotos Group (327 million PLN) Contract for the construction of a tank terminal at the port of Rotterdam (52 million EUR) Construction and modernisation of an industrial water treatment plant for Lotos SA and ZA Kędzierzyn (104 million PLN) 19

20 Portfolio of orders Important contracts in the Power Engineering segment PROJECT I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Delivery of a turbine set to Żerań Heat and Power Generating Plant million PLN Construction of a Water Treatment Plant at the Zakłady Azotowe Kędzierzyn SA 60.9 million PLN Construction of a heating unit at Bielsko-Biała Heat and Power Generating Plant (500 million PLN) Exhaust gas desulphurisation system at Kozienice Power Plant (77.3 million EUR) Installation of parts of two power units at Hamm-Uentrop (Germany) 31.3 million EUR Installation of pressure parts of 5 boilers at Neurath, Bełchatów and Westfalen Power Plants (250 million PLN) 20

21 Portfolio of orders Important contracts in the General Construction segment PROJECT I II III IV I II III IV I II III IV I II III IV I II III IV Construction of the Raczyński s Library in Poznan(44.5 million PLN) Construction of Football Stadium in Gliwice (44.4 million PLN) Construction of the Legia Football Stadium in Warsaw (374.1 million PLN) Construction of the Artistic Education Centre in Gorzów Wielkopolski (106.9 million PLN) Construction of the Museum of the History of Polish Jews in Warsaw (152 million PLN) 21

22 Portfolio of orders Important contracts in the Roads and railways segment PROJECT I II III IV I II III IV I II III IV I II III IV I II III IV Construction of the S-69 expressway section Mikuszowice (788.1 million PLN) Construction of the A4 motorway section Szarów-Brzesko (779 million PLN) Construction of the A2 motorway section Stryków-Konotopa (884 million PLN) Construction of the A1 motorway section Sośnica- Maciejów (899,6 million PLN) Modernisation of the E-65 railway line section Warsaw-Gdynia (144.6 million PLN) Construction of the A-4 motorway section Rzeszów (the Rzeszów East junction) Jarosław (the Wierzbna Junction). (1.8 mld PLN ) 22

24 Accomplishments and development directions Company's accomplishments Extensive portfolio of orders The value of orders as in February 2010 amounted to 7.1 PLN billion ( 9.8 PLN billion with 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. Economic results Maintaining of high revenues from sales worth PLN million (2010). 24

25 Accomplishments and development directions Strategic objectives Strategic directions in Polimex-Mostostal CG operations for next years: Organic growth Cost optimization and contract profitability improvement i.a. thanks to engagements in contracts with higher profit margins Optimization of functions and synergy effects Group restructuring based on incorporation of 7 subsidiaries in Chemistry and Energy M&A Further acquisitions both in sectors where Polimex- Mostostal operates and increasing diversification of activity Divestment Selling certain assets, mainly real property and land 25

26 Recent Group investments Accomplishments and development directions Organic growth Production capacity Design potential Completion of expanding Group s production capacities, including the steel constructions plant in Siedlce and boilers factory in Sefako Investment program for Energomontaż-Gdynia Expansion of design potential by purchase of Centralne Biuro Konstrukcji Kotłów SA effect effect effect Doubled production output in steel products, cutting-edge zinc line launched, investment within Tarnobrzeska Special Economic Zone Company enjoys tax benefit on investment value for Siedlce project Doubled volume in power boiler production; investment within Starachowicka Special Economic Zone Company enjoys high tax benefits. More competitive offering and more efficient performance in infrastructural projects based on Design-and-Build scheme 26

27 M&A activity in Accomplishments and development directions Growth through M&A 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 % shares in Przedsiębiorstwo Robót Inżynieryjnych [Engineering Works Company] PRInż-9 a service provider in road construction, sewage infrastructure (September 2008) Acquisition of Romanian/Italian Coifer Group which offers general contractorship, steel structure production, high-pressure equipment design and manufacturing (February 2008) 27

28 Accomplishments and development directions Growth through restructuring Formal incorporation of 7 subsidiaries from Energy and Chemical sectors was finalised on 31 December 2010 causing to become Polimex-Mostostal divisions Polimex-Mostostal took over all rights and obligations of incorporated subsidiaries. Merger yields a range of tangible benefits, such as: more attractive offering for investors cost optimisation reduced risks in operations consolidated results of all companies 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 28

29 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.applied solution is compliant with current market demands, where middle and small contracts are realised.further optimisation of structure in order to increase realisation potential will be contnued at the moment of starting large power engineering contract Efforts continue to yield synergies and launch mechanisms to reduce costs, e.g. organisational optimisation Back office has been centralised and, this year, will cover e.g. sourcing of materials, machinery, equipment and services Strengthen departments: strategic development, sales force, etc. The restructuring program highly increased opportunities to get large-scale contracts in Energy. Expected positive influence of restructurisation on the company results: 50 mln PLN per year, starting from

30 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 Weak domestic and foreign demand in selected segments Incoming financial support from EU Works related to Euro 2012 soccer event Investments in Energy, e.g. strict environmental standards, required modernisation of systems, increase of capacities Outlook on rising profitability of infrastructural projects thanks to Public-Private Partnership regulations and Public Procurement Law Negative impact of financial crisis on project funding opportunities due to: Higher financial costs Extra collaterals expected by financial institutions Reduction of expenses for some projects by State Treasury and local governments 30

32 Financial results Selected financial results of I-IV Q Revenue from sale [in PLN million] EBITDA [in PLN million] YoY -5.3% -10.3% EBITDA margin 7.8 % 7,4 % Operating profit [in PLN million ] % Operating profit margin 6.0 % 5.3 % Net profit [in PLN million ] % Net profit margin 3.6 % 2.7 % 32

33 Financial results Selected financial results of IV Q 2010 IV Q 2009 IV Q 2010 Revenue from sale [in PLN million] EBITDA [in PLN million] YoY -9.7% 17.1% EBITDA margin 7.0 % 9.0 % Operating profit [in PLN million ] % Operating profit margin 5.6 % 7.6 % Net profit [in PLN million ] % Net profit margin 3.8 % 4.4 % 33

34 In values [in million PLN] Financial results Gross margins on sales 2009 revenues 2009 gross margin 2010 revenues 2010 gross margin Total revenue Production Roads & railways Construction Power engineering Chemistry In percentage 30% 20% 10% 0% 20,7% 11,6% 10,7% 12,3% 2009 gross margin 2010 gross margin 14,0% 9,7% 9,6% 8,9% 11,4% 10,6% 10,9% 9,2% Total revenue Production Roads & railways Construction Power engineering Chemistry 34

35 Financial results Revenue by segments Value participation of individual segments in the Group's revenues [in million PLN] Chemistry Power Engineering Construction Roads & railways Production 2010 Share segments in the Group's revenues 12% 17% 14% 17% 17% 23% Chemistry Power Engineering Construction Roads & railways 19% 20% Production 31% 30%

36 1 600, , , ,0 800,0 600,0 400,0 200,0 0,0 Financial results Sales in segments for 4 completed quarters (PLN million) Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q22010 Q Q Chemistry Power Engineering Construction Roads & Railways Production 36