ROADSHOW WITH PHATRA : INVESTOR PRESENTATION MAY 31, 2016
2 Disclaimer This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
3 Agenda PTTGC’s BUSINESS OVERVIEW 2016 HIGHTLIGHT STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS
4 Agenda PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS
5 Overview of PTTGC PTTGC at a Glance • Incorporated on October 19, 2011 from the amalgamation of PTTAR PTT Group’s Chemical Flagship Thailand’s largest ethane-base cracker with integrated aromatics and refining business and PTTCH Highly competitive cost structure with pricing arrangement for gas feedstock based • 2015 Sales : $11.7 bn; upon equitable return on investment for both PTT and PTTGC Adj. EBITDA: $1.5 bn Fully integrated petrochemical and refinery operations with diversified product • Asset size: $11.0 bn portfolio covering full hydrocarbon chain (as of Dec 31, 15) Committed to operational excellence targeting best in class/ first quartile business • Number of employees: efficiency 6,113 persons Ranked in Dow Jones Sustainability Indices’ Chemicals Sector for the 3 rd Consecutive Year Strong footprint in fast growing regions Shareholding Historical Dividend with 6 operating countries Structure Payment 1st Half 2nd Half Payout Ratio 7.00 80% 71% 70% 61% 6.00 60% 5.00 46% 45% 45% 50% 4,509 mil 4.00 2.98 3.40 3.40 2.80 40% shares 2.37 3.00 30% 1.78 1.30 2.45 1.30 2.00 20% 1.37 1.00 10% 1.68 1.62 1.50 0.95 1.00 0.00 0% 2011 2012 2013 2014 2015 Foreign Limit <=37% Dividend Policy >=30%
6 Agenda PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS
7 2016 Highlight : New capacity on stream PTTGC is anticipated to benefit from on stream of new capacity of expansion / debottleneck project in this year . By including MEG plant improvement project that completed since late of last year, this will deliver additional volume by 7%. • Commission : Dec 2015 • Commission : Feb 2016 • COD : May 2016 • COD : May 2016 • Capacity : • Capacity : • PX 115 KTA, • PH 250 KTA • BZ 35 KTA, • AC 155 KTA • OX 20 KTA • CAPEX : 345 MUSD ARO II Expansion • EBITDA Uplift /Y*: 63 MUSD • CAPEX : 128.8 MUSD Phenol II on stream • EBITDA Uplift /Y*: 24 MUSD commissioning • Commission : 2Q/2016 • Commission : 2Q/ 2016 • COD : 3Q/2016 • COD : 3Q/2016 • Capacity : • Capacity : • HDI Deriv. 12 KTA • HDI Mono. 70 KTA • CAPEX : 43 MUSD • CAPEX : 18 MUSD • Product : HDI derivative • Product : HDI monomer • EBITDA Uplift /Y*: 9 MUSD VCR FR ready for • EBITDA Uplift /Y*: 24 MUSD VCR TH ready for commissioning commissioning *EBITDA Uplift per year at mid cycle price
8 2016 Highlight : Operation improvement Positive trend in projected oil price Refinery Outlook Rebound in oil price is anticipated to support Lower utilization rate mainly due to planned HDPE price to be average at 1,160$/T. This also shutdown in 2Q/16. GRM is expected to slightly translated to downside risk on stock loss. decrease to approximately $ 4.7/bbl 70 61.3 50 51.9 49.7 42.2 30 40.7 39.7 30.4 10 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16(F) 2016 (F) 2016 Highlight Upside in Aromatic Improved in Ethane flow and OLE U-rate Maximize benefit by expecting to receive high Aromatic is expected to benefit from higher ethane flow average 264T/h, maximum 280T/h in utilization rate, from 74% last year to 88%, May, with 95% run rate in olefins plant. which based on higher BTX nameplate capacity since early of this year. Ethane Flow (Ton/hour) 264 251 249 241 This translated to fully benefit on surge in BTX 236 spread especially in 1H of this year. 2012 2013 2014 2015 2016 (F)
9 Overview of Business Unit’s Performance YoY QoQ (Unit: Million Baht) 1Q/15 4Q/15 1Q/16 % + /(-) % + /(-) Sales Revenue 99,251 96,088 80,764 -19% -16% EBITDA 10,473 10,387 9,515 -9% -8% EBITDA Margin (%) 11% 11% 12% 1% 1% Net Profit 5,631 4,690 4,707 -16% 0% EPS (Baht/Share) -16% 1% 1.25 1.04 1.06 Adjusted EBITDA* 11,606 14,970 9,789 -16% -35% Adjusted EBITDA Margin (%) 12% 16% 12% 0% -3% Note: * Adjusted EBITDA refers EBITDA excluding impact of inventory value (Inventory and NRV) 1Q/16 Revenue and Adjusted EBITDA Structure % Adj. EBITDA Margin 1Q/15 4Q/15 1Q/16 Business Unit : Refinery 6 15 8 Aromatics 13 11 14 Olefins and Derivative 19 22 20 Green 6 11 8 9,789 80,764 HVS 12 3 (3) M.Baht M.Baht Average 12 16 12
10 Agenda PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS
11 Strategic Direction To be a Leading chemical company for Better living Sustain Core Balance Business & Social Accelerate Value Growth levers Performance International hub Sustainable excellence development Performance Maximize value chemicals Effective CSR programs creation Green business Stakeholder Map Ta Phut retrofit management
12 Sustain Core : Value Creation Top Down Study Detail Study Implementation • Due diligence • • process to Develop initiatives and Execute per plan to execution plans capture value estimate project potential 12 Weeks 6 Weeks 18 Months Plant Commercial & Operational Marketing Capex Excellence Excellence Excellence Asset Procurement Performance Excellence Excellence
13 Sustain Core :MTP Retrofit Project Scope • Build new Cracker 500 KTA ethylene for flexible feed cracker to utilize internal naphtha • Maximize utilization of the existing utilities and support facilities to reduce investment cost Project Update • Issued pre qualification enquiry package to prospect bidders. • Awarded project manager contractor • Issued conceptual design to licensors • Completed EPCa Scope package • Submitted BOI application Timeline : 2016 2018 2020 COD 2020 1Q/18 ITB Construction
14 Accelerate Growth Levers : PO & Polyols Project Project Update • Completed PO & Polyols market survey • Building sale & marketing strategy • Ongoing FEED work and preparing ITB • Preparing EIA report • Negotiating feedstock arrangement • Engaged FA and expect FID in 4Q/16 Polyols 130 KTA System House 40 KTA Timeline : -------------------------------------- Licensor PO Market Survey Polyols Market Survey ≈ 80% Reserved Volume Merchant Construction After surveyed 106 Volume customers , we have arrived 20% to Potential Customers Captive and 200 Committed KTA 80% Market survey result concluded that E&E SEA and India are the target market. • Target market growth rate average Merchant Market at 5 - 7 % during 2014 - 2023 • The highest growth rate is in Automotive Automotive segment 6.8 % Marketing strategy is to focus on 14 high value application segment
15 Accelerate Growth Levers : US Petrochemical Complex Project Overview Project Update • FEED : FEED contractors on schedule to deliver cost estimates within 3Q/16 • Feedstock : In discussion with specific names of ethane supplier to finalize contract terms • Marketing & Logistic : • Preparing marketing and sale plan as well as key terms in offtake agreement • Received proposals from barge, railcar leasing, and packing service • Discuss with potential offtaker. • Permit: Signed off on the First Energy land option agreement • Partner : Approached FA in the process to short list of potential partner Key Criteria for FID United • Investment cost justify investment return Marcellus States Shale Gas • Enough ethane capacity with competitive Reserve pricing structure • Partner can distribute products in N. America
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