Q2 2017 FINANCIAL RESULTS
6M/Q2 2017 FINANCIAL RESULTS SIPCHEM Q2 2017 EARNINGS CALL 02 AUGUST 2017, 15:30 KSA, 13:30 UK, 08:30 EST
DISCLAIMER Disclaimer and important information in relation to this presentation This presentation has been prepared solely for use at the investor presentation concerning the financial results of Saudi International Petrochemical Company (Sipchem). By attending the investor presentation, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation has been prepared by Sipchem solely for use by you at the investor presentation, held in connection with Sipchem’s financial results. The information contained in this presentation does not purport to be comprehensive and has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. The information set out in this presentation may be subject to updating, revision, verification and amendment and such information may change materially. Sipchem is under no obligation to update or keep current the information contained in this presentation and any opinions expressed in it is subject to change without notice. None of Sipchem or any of its affiliates, advisers or representatives: (i) makes any representation or warranty, express or implied, as to the truth, fairness, accuracy or completeness of the information in this presentation (or whether any information has been omitted from this presentation); or (ii) shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this presentation or its contents, or otherwise arising in connection with this presentation. The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons. This presentation does not constitute or form part of any offer to sell or issue or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of Sipchem or any of its subsidiaries or affiliates, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. The information and opinions contained in this presentation are provided as at the date of the presentation and are subject to change. Certain statements in this presentation constitute "forward-looking statements". These statements include records of intentions, beliefs or expectations with respect to, amongst other things, operations, financial conditions, liquidity, prospects, growth, strategies and the dividend policy of Sipchem, its subsidiaries, affiliates and the industries in which they operate. These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Sipchem’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, commodity price volatility and risks relating to technology, shared utilities, competition and price, financing, litigation, general operations, environment, feedstock supply and price, project interface and foreign exchange, as well as different market conditions and the prospects for growth anticipated by the management of Sipchem. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this presentation. As a result, you are cautioned not to place undue reliance on such forward-looking statements. Sipchem disclaims any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made in this presentation, except where it would be required to do so under applicable law.
SIPCHEM Q2 2017 EARNINGS CALL
2
6M/Q2 2017 RESULT
Highlights Operations Financials
SIPCHEM Q2 2017 EARNINGS CALL
3
SIPCHEM HIGHLIGHTS AT A GLANCE…. Key Message: Improved market conditions, netback contribution and cost advantage position
‒ EBITDA percent of Revenue for 6 months ended June 2017 of 36.4% is
Profitability and Performance
outpacing the 12 months ended 2016 rate of 33.2% reflecting a 9.6% change in growth. The increase is due mainly to increases in net backs for most all products.
‒ Capital Expenditures for 6 months ended 2017 of SAR 325 million are
Capital Structure and Investment Risk
outpacing the 12 months ended 2016 capital expenditures of SAR 479 million due the announced construction at the Methanol plant. ‒ ROCE 6 months ended 2017 of 6.2% is higher than the year ended 2016 rate of 3.1% reflecting benefits of increased product netbacks.
‒ Average days on-stream in Q2 of 66% has decreased the 6 months YTD level
Efficiency and Effectiveness
to 80%. The decrease is mainly due to decreases in the Acetyls plants for announced scheduled downtime. Efficiency at the Methanol and Polymers plants remain strong.
‒ Cash from operations for 6 months 2017 of SAR 868 million is outpacing the
Liquidity and Stability SIPCHEM Q2 2017 EARNINGS CALL
12 months cash from operations of SAR 927 million due to higher product netbacks and improved operations. Improvements in the current ratio in June 2017 of 2.22 vs. December 2016 ratio of 1.58 reflects improved risk management of current liabilities. 4
SIPCHEM HIGHLIGHTS AT A GLANCE…. Key Message: Improved market conditions, netback contribution and cost advantage position Capabilities Focus
Growth Focus
Profitability and Performance
Capital Structure, Investment / Financial Risk
SAR Million
2014
2015
2016 IFRS
Sales
4,124
3,515
3,515
2,117
EBITDA
1,747
1,234
1,165
771
EBITDA Margin
42.4%
35.1%
33.2%
36.4%
6 MOS 2017 IFRS
Efficiency and Effectiveness 2015
2016 IFRS
6 MOS 2017 IFRS
Capex/Depreciation (x)
1.8
1.0
0.7
1.02
Avg days on Stream-YTD %
84%
88%
90%
80%
Avg days on Stream-cur Qtr
90%
84%
90%
66%
Sales/employee
3.9
3.0
3.4
2.3
SIPCHEM Q2 2017 EARNINGS CALL
SAR Million
2014
2015
2016 IFRS
6 MOS 2017 IFRS
Capital Expenditure
1,027
711
479
325
ROCE (%)
8.9%
7.5%
3.1%
6.2%
Dividend Cover (x)
1.25
0.6
0
na
2014
2015
2016 IFRS
Current Ratio (x)
2.60
2.01
1.58
2.22
Quick Ratio (x)
2.26
1.64
1.22
1.79
Cash from Operations
1,612
927
927
868
Liquidity and Stability
2014
SAR Million
Sustainability Focus
SAR Million
6 MOS 2017 IFRS
5
SEGMENTATION OVERVIEW Key Message: Netback contribution and low cost advantage lead the way…
REVENUES
YTD 2017
YTD 2016 6%
10%
OTHER
+4%
25%
23%
POLYMERS
67%
68%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
MARGIN OTHER POLYMERS
YTD 2017
YTD 2016 9%
8%
+14%
37%
29% 63%
54%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
SIPCHEM Q2 2017 EARNINGS CALL
6
SEGMENTATION OVERVIEW Key Message: Netback contribution and low cost advantage lead the way…
EBITA MARGIN
YTD 2017 6%
OTHER
YTD 2016 9%
22% 71%
POLYMERS
+2%
31% 60%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
Key Message YTD 2017 SEGMENTATION – – – – –
Control activities and cash conversion Strategic initiatives including customer segmentation Value Chain Planning and Centralized Procurement support netback contribution Optimization within Operations, and Logistic performance Market Stabilization and Cyclicality impact
SIPCHEM Q2 2017 EARNINGS CALL
7
FINANICAL RESULTS
13% 20%
-28%
136%
-7%
SIPCHEM Q2 2017 EARNINGS CALL
9
6 MOS 2017 VS 2016 CASH FLOW Cash flow
-1
-1%
121%
-12%
-19%
1
SIPCHEM Q2 2017 EARNINGS CALL
1
48%
10
30 JUNE 2017 COMPARED TO PREVIOUS PERIODS Balance Sheet
SIPCHEM Q2 2017 EARNINGS CALL
11
SIPCHEM GROWTH OBJECTECTIVES
SUSTAIN
Fix
Continue to pursue leadership in corporate sustainability
Address capability gaps, build a solid foundation
STEP-OUT Evaluate potential step-out growth opportunities
FOCUS Grow
C1, light olefins (C2,C3)
Take advantage of regional and longer term growth opportunities globally
SIPCHEM Q2 2017 EARNINGS CALL
13
For further enquiries, please contact:
Faisal Al-Modlij Manager Investor Relations E-mail: [email protected] Office: +966 13 801 9399
SIPCHEM Q2 2017 EARNINGS CALL
14
Q&A
SIPCHEM Q2 2017 EARNINGS CALL
15
THANK YOU,
DISCLAIMER Disclaimer and important information in relation to this presentation This presentation has been prepared solely for use at the investor presentation concerning the financial results of Saudi International Petrochemical Company (Sipchem). By attending the investor presentation, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation has been prepared by Sipchem solely for use by you at the investor presentation, held in connection with Sipchem’s financial results. The information contained in this presentation does not purport to be comprehensive and has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. The information set out in this presentation may be subject to updating, revision, verification and amendment and such information may change materially. Sipchem is under no obligation to update or keep current the information contained in this presentation and any opinions expressed in it is subject to change without notice. None of Sipchem or any of its affiliates, advisers or representatives: (i) makes any representation or warranty, express or implied, as to the truth, fairness, accuracy or completeness of the information in this presentation (or whether any information has been omitted from this presentation); or (ii) shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this presentation or its contents, or otherwise arising in connection with this presentation. The information in this presentation is given in confidence and may not be reproduced or redistributed to any other persons. This presentation does not constitute or form part of any offer to sell or issue or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of Sipchem or any of its subsidiaries or affiliates, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. The information and opinions contained in this presentation are provided as at the date of the presentation and are subject to change. Certain statements in this presentation constitute "forward-looking statements". These statements include records of intentions, beliefs or expectations with respect to, amongst other things, operations, financial conditions, liquidity, prospects, growth, strategies and the dividend policy of Sipchem, its subsidiaries, affiliates and the industries in which they operate. These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect Sipchem’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, commodity price volatility and risks relating to technology, shared utilities, competition and price, financing, litigation, general operations, environment, feedstock supply and price, project interface and foreign exchange, as well as different market conditions and the prospects for growth anticipated by the management of Sipchem. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this presentation. As a result, you are cautioned not to place undue reliance on such forward-looking statements. Sipchem disclaims any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made in this presentation, except where it would be required to do so under applicable law.
SIPCHEM Q2 2017 EARNINGS CALL
2
6M/Q2 2017 RESULT
Highlights Operations Financials
SIPCHEM Q2 2017 EARNINGS CALL
3
SIPCHEM HIGHLIGHTS AT A GLANCE…. Key Message: Improved market conditions, netback contribution and cost advantage position
‒ EBITDA percent of Revenue for 6 months ended June 2017 of 36.4% is
Profitability and Performance
outpacing the 12 months ended 2016 rate of 33.2% reflecting a 9.6% change in growth. The increase is due mainly to increases in net backs for most all products.
‒ Capital Expenditures for 6 months ended 2017 of SAR 325 million are
Capital Structure and Investment Risk
outpacing the 12 months ended 2016 capital expenditures of SAR 479 million due the announced construction at the Methanol plant. ‒ ROCE 6 months ended 2017 of 6.2% is higher than the year ended 2016 rate of 3.1% reflecting benefits of increased product netbacks.
‒ Average days on-stream in Q2 of 66% has decreased the 6 months YTD level
Efficiency and Effectiveness
to 80%. The decrease is mainly due to decreases in the Acetyls plants for announced scheduled downtime. Efficiency at the Methanol and Polymers plants remain strong.
‒ Cash from operations for 6 months 2017 of SAR 868 million is outpacing the
Liquidity and Stability SIPCHEM Q2 2017 EARNINGS CALL
12 months cash from operations of SAR 927 million due to higher product netbacks and improved operations. Improvements in the current ratio in June 2017 of 2.22 vs. December 2016 ratio of 1.58 reflects improved risk management of current liabilities. 4
SIPCHEM HIGHLIGHTS AT A GLANCE…. Key Message: Improved market conditions, netback contribution and cost advantage position Capabilities Focus
Growth Focus
Profitability and Performance
Capital Structure, Investment / Financial Risk
SAR Million
2014
2015
2016 IFRS
Sales
4,124
3,515
3,515
2,117
EBITDA
1,747
1,234
1,165
771
EBITDA Margin
42.4%
35.1%
33.2%
36.4%
6 MOS 2017 IFRS
Efficiency and Effectiveness 2015
2016 IFRS
6 MOS 2017 IFRS
Capex/Depreciation (x)
1.8
1.0
0.7
1.02
Avg days on Stream-YTD %
84%
88%
90%
80%
Avg days on Stream-cur Qtr
90%
84%
90%
66%
Sales/employee
3.9
3.0
3.4
2.3
SIPCHEM Q2 2017 EARNINGS CALL
SAR Million
2014
2015
2016 IFRS
6 MOS 2017 IFRS
Capital Expenditure
1,027
711
479
325
ROCE (%)
8.9%
7.5%
3.1%
6.2%
Dividend Cover (x)
1.25
0.6
0
na
2014
2015
2016 IFRS
Current Ratio (x)
2.60
2.01
1.58
2.22
Quick Ratio (x)
2.26
1.64
1.22
1.79
Cash from Operations
1,612
927
927
868
Liquidity and Stability
2014
SAR Million
Sustainability Focus
SAR Million
6 MOS 2017 IFRS
5
SEGMENTATION OVERVIEW Key Message: Netback contribution and low cost advantage lead the way…
REVENUES
YTD 2017
YTD 2016 6%
10%
OTHER
+4%
25%
23%
POLYMERS
67%
68%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
MARGIN OTHER POLYMERS
YTD 2017
YTD 2016 9%
8%
+14%
37%
29% 63%
54%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
SIPCHEM Q2 2017 EARNINGS CALL
6
SEGMENTATION OVERVIEW Key Message: Netback contribution and low cost advantage lead the way…
EBITA MARGIN
YTD 2017 6%
OTHER
YTD 2016 9%
22% 71%
POLYMERS
+2%
31% 60%
CHEMICAL Chemical: “IMC, IDC, IGC, IAC, IVC, IUC, SCC EA” Polymers: “IPC, GACI Other: “SMC & Foreign subsidiaries Sipchem , SSPC”
Key Message YTD 2017 SEGMENTATION – – – – –
Control activities and cash conversion Strategic initiatives including customer segmentation Value Chain Planning and Centralized Procurement support netback contribution Optimization within Operations, and Logistic performance Market Stabilization and Cyclicality impact
SIPCHEM Q2 2017 EARNINGS CALL
7
FINANICAL RESULTS
13% 20%
-28%
136%
-7%
SIPCHEM Q2 2017 EARNINGS CALL
9
6 MOS 2017 VS 2016 CASH FLOW Cash flow
-1
-1%
121%
-12%
-19%
1
SIPCHEM Q2 2017 EARNINGS CALL
1
48%
10
30 JUNE 2017 COMPARED TO PREVIOUS PERIODS Balance Sheet
SIPCHEM Q2 2017 EARNINGS CALL
11
SIPCHEM GROWTH OBJECTECTIVES
SUSTAIN
Fix
Continue to pursue leadership in corporate sustainability
Address capability gaps, build a solid foundation
STEP-OUT Evaluate potential step-out growth opportunities
FOCUS Grow
C1, light olefins (C2,C3)
Take advantage of regional and longer term growth opportunities globally
SIPCHEM Q2 2017 EARNINGS CALL
13
For further enquiries, please contact:
Faisal Al-Modlij Manager Investor Relations E-mail: [email protected] Office: +966 13 801 9399
SIPCHEM Q2 2017 EARNINGS CALL
14
Q&A
SIPCHEM Q2 2017 EARNINGS CALL
15
THANK YOU,
