Investors Presentation NDR in Malaysia with CIMB January 20, 2014 Refinery Olefins EO Based Performance HVS High Volume Specialties Aromatics Polymers Green Chemicals Services and Others
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. 2
Agenda PTTGC Business Overview Strategy and Execution Recent Happenings 9M/13 Operating Results Market Outlook 3
Overview of PTTGC Thailand s largest ethane-base cracker with integrated aromatics and refining businesses Highly competitive cost structure with pricing arrangement for gas feedstock based upon equitable return on investment for both PTT and PTTGC Fully integrated petrochemical and refinery operations with diversified product portfolio covering full hydrocarbon chain Strong footprint in fast growing regions with 5 operating countries worldwide Committed to operational excellence targeting best in class/ first quartile business efficiency PTT s Chemical Flagship Incorporated on October 19, 2011 from the amalgamation of PTTAR and PTTCH Profile Top 5 Shareholders 2012 Sales : $18.8bn; EBITDA: $1.9bn Asset size: $13.3bn (as of 30/9/2013) Foreign Limit <= 37% Dividend Policy >=30% Total petrochemical capacity: 8.72 MTA Total distillation capacity: 280 KBD Number of employees 3,590 persons 1. PTT 48.89% 2. NVDR 8.50% 3. HSBC (Singapore) Nominees PTE 2.33% 4. State Street Bank Europe Ltd 1.86% 5. HMC Polymers Co. Ltd 1.85% as of Oct. 31, 2013 4
Flexible Feedstock and Highly Competitive Cost Structure Feedstock Supply Product Marketing Olefins Customers Others Ethane, Propane, LPG Olefins / Polymers C 2 -C 4 100% Polymers (1) 54% (2) Others Condensate Aromatics C 5 -C 9 46% (2) Crude Oil Refinery C 10 -C 25 30% (2) 70% (2) Others Flexible Feedstock and By-Product Enhancement Feedstock Supply Commercial Agreements PTTGC's refinery (145 KBD) is one of the most complex refineries in Thailand, with Nelson Index of 10.17 and refining capacity accounting for 13% of country s total capacity Value enhancement from by-product exchange among Olefins, Aromatics and Refinery units highlights operational integration and efficiency: - CR from Aromatics units sent to Refinery to produce middle distillate - Pygas from Olefins unit sent to Aromatics for BTX - Offgas from Refinery sent to Cracker for olefins products 1. PTT owns 50%, PTTGC and IRPC each owns 25% in PTTPM. 2. FY12 USD/Ton 1,200 1,000 800 600 400 200-103 318 Product Marketing Commercial Agreements Global Ethylene Cash Cost by Region 2012E (3) 799 824 830 883 951 967 1,006 MDE NAM NEA LPG NAM MDE LPG MDE NEA SEA WEP Ethane Ethane Naphtha Naphtha Naphtha Naphtha Naphtha Source: IHS (formerly CMAI) as of July 2012. Note: MDE = Middle East, NAM = North America, NEA = Northeast Asia, SEA = Southeast Asia, WEP = Western Europe. 3. PTTGC ethylene cash cost is based on Company estimate and ethane cracker only. 2012 PTTGC cash cost takes into account the effect of the renewal of gas price agreement. 4. MDE cash costs are average values of Iran and Saudi Arabia. (4) (5) (5) 5
Fully Integrated Petrochemical and Refinery Operations with Diversified Product Portfolio Feedstock Upstream Intermediates Downstream Proximity to Suppliers and Customers Exchange Stream Products By-Products Ethylene EO MEG HDPE LDPE LLDPE Natural Gas Light Naphtha Cracker Propylene EB/SM PO Polyols Ethanolamine Ethoxylate PS ABS OffGas Mixed C4 Butadiene PP Condensate Reformate, Heavy Naphtha Pygas Aromatics Plants C3,C4 Benzene Toluene PTT Phenol Cumene Cyclohexane SBR Phenol PC BPA Acetone Epoxy Resins MMA PMMA Caprolactam Nylon 6 Crude Crude Palm Oil REFINERY & SHARED FACILITIES Refinery Condensate Residue, Hydrogen Cracker Bottom, Hydrogen Paraxylene Orthoxylene Oleochemicals AROMATICS OLEFINS POLYMERS TDI/HDI PTA PA Fatty Alcohol Methyl Ester (B-100) EO-BASED PERFORMANCE Potential Product Opportunities (1) GREEN CHEMICALS PU PET Fiber/Resin Plasticizer Petroleum Products Petroleum Products - LPG LPG - Reformate Reformate - Light Naphtha Naptha - Jet Fuel - Diesel - Fuel Fuel Oil Oil HIGH VOLUME SPECIALTIES 1. PTTGC does not currently produce these products. 6
Agenda PTTGC Business Overview Strategy and Execution Recent Happenings 9M/13 Operating Results Market Outlook 7
PTTGC s Strategies Overview Increasing distance from core To be a Leading Chemical Company for Better Living Growth initiatives Core uplift initiatives One Step Adjacency New Geography Bio-Plastic Operational New Products VAO Excellence PU Chain Marketing PC Chain Excellence BV Derivatives Synergy Project Excellence Nylon 6,6 26 Plants Globally Debottlenecking / PMMA Expansion ROIC 12% ROIC Uplift 2% 14% ROIC >14% Business As Usual REF ARO OLE POL EOB GRN XVS Green Business 8
Continues to Strive for Strong Profitable Growth Sales in THB Bn Based on constant Dubai crude year 2012 at USD 109 per bbl ~800-900 563 Green ~620-650 HVS New Global Hub Green Debottleneck Synergy Project Excellence Operational Excellence Marketing Excellence Capital Expenditure Excellence Expected EBITDA Benefit Uplift 15-30% Actual 2012 Target 2017 Target 2022 Phase 1 : Foundation for Growth We aim to grow ~5 percent p.a. in the next ten years Phase 2: The Growth Mode 9
Execution Led by a Well Defined Strategy 1 2 3 4 5 Operational Excellence Marketing Excellence Synergy Project Excellence Debottleneck CAPEX Excellence Reliability improvement Energy efficiency improvement Cost reduction Product development Customer/Portfolio mgmt Strategic pricing Product upgrade Cost saving from share tank and facility Steam Cost reduction BV Project Quench Tower PX expansion PTTPE Cracker and Polymer Plants Debottleneck Target EBITDA Uplift of Excellence Programs and Synergy Projects 2013-2017 Capital Project Management Engineering Procurement Construction Project Mgmt. EBITDA Uplift (USD mn) * Operational Excellence Marketing Excellence Synergy Debottleneck (exclude PE expansion) 289 392 75 431 433 108 108 43 177 149 149 149 83 36 79 81 83 85 113 83 87 91 91 28 2013 2014 2015 2016 2017 * Debottleneck EBITDA Uplift includes 1Q/14 BV project starts up 3Q/15 TOCGC Plant Improvement Project 4Q/15 PX expansion starts up 10
Update Excellence Programs Core Uplift 1-Step Adjacencies Emerging Business Models Target Excellence Programs 1H/13 9M/13 FY13 1. Operational excellence 1.1 7.9 28 - Reliability improvement - Energy efficiency improvement - Cost reduction 2. Marketing excellence 84.6 111.3 113 - HVP Sales Performance exceeded target - 7 New HVP Grades and 3 New Commodities Grades - Exported Mixed C4 - Export PE to alternative markets ie. South Africa 3. Synergy projects 10.0 17.1 36 - EBITDA uplift in 3Q/13 was mainly contributed from C3/C4 Stream and 3 Streams (Heavy Gasoline, LCB, and CB) - Heavy gas (Offgas) - Construction Progress at 27.5% (End Sep) - Pure H2 via New PSA - Construction Progress at 83.2% (End Sep) 4. Opportunity Synergy Benefits 0.0 13.1 0 - Biodiesel Export to China (B-100 from TOL blend with Diesel from Refinery) - Due to I-4/1 TA, transfer excess offspec Raw Pygas (normally flare) to upgrade at ARO2 - Due to I-4/1 TA, transfer excess offspec C3C4 from PTTPE Cracker to Refinery C3C4 pool for blending Total 95.7 149.4 177.0 11
Debottlenecking Projects Core Uplift 1-Step Adjacencies Emerging Business Models EBITDA Uplift from Debottlenecking Project USD mn 153 108 45 92 16 16 PTTPE Debottleneck TOCGC Improvement 58 34 34 34 PX Debottleneck BV Project 58 58 58 58 2013 2014 2015 2016 12
Quench oil tower modification project Core Uplift 1-Step Adjacencies Emerging Business Models Quench Oil Tower Modification project at I4-1 olefins plant To reduce naphtha to gas portion in I4-1 mixed feed cracker Naphtha : Gas From 0.95 : 1.0 To 0.60 : 1.0 Project completed during I4-1 plant turnaround in Aug-Sept 2013 Passed Operational Test Status CAPEX Completed 3 MUSD Vapor Flute 13
C4 Value Enhancement (BV Project) BV Project Core Uplift 1-Step Adjacencies Emerging Business Models BV Project will enhance PTTGC s C4 value chain by upgrading to Butadiene and Butene-1, which will pave a way towards Butadiene derivatives Construction completed, now in test run period Nameplate Capacity Technology License Project Management Consulting EPC Contractor CAPEX EBITDA Uplift 75 KTA of Butadiene 25 KTA of Butene-1 ABB LUMMUS PTTME Chiyoda (Thailand) 262 MUSD Target Completed 4Q/13 58 MUSD/Year C4 From PTTGC s Cracker Butadiene Plant Butene -1 Butadiene PTTGC LLDPE Plant Synthetic Rubber Customer 90% Domestic: 10% Export Direction forward Expand into Synthetic rubber business by using butadiene from PTTGC and from JV Investment Plant 14
TOCGC Plant Improvement Project Core Uplift 1-Step Adjacencies Emerging Business Models Plant improvement to expand EOE capacity Improve catalyst usage to enhance production yield and also reduce CO2 emission. Increases EOE capacity by 90 KTA from 336 KTA to 426 KTA Additional EOE capacity will improve capacity of EO/EG depending on production mode. Progress: Construction Additional Capacity 90 KTA of EOE EPC Contractor CAPEX Samsung Engineering 94.2 MUSD EOE Capacity 336 KTA + Additional Capacity 90 KTA Purified EO Ethylene Glycol (EG) EBITDA Uplift 16 MUSD/Year Target Completion 3Q/15 15
PX Expansion Project Core Uplift 1-Step Adjacencies Emerging Business Models Increase PX and BZ capacity at ARO#2 Aromatics (KTA) Existing Debot. 2015 Total after Debot. Additional Capacity EPC Contractor CAPEX EBITDA Uplift Target Completion 115 KTA of PX 35 KTA of BZ PTTME and SK Engineering 128.8 MUSD 34 MUSD/year 4Q/15 during ARO2 TA period Paraxylene 655 +115 770 Benzene 355 +35 390 Orthoxylene 0 +20 20 Board approved and EPC Awarded Progress : construction PAREX 16
PTTPE Cracker Debottlenecking Core Uplift 1-Step Adjacencies Emerging Business Models PTTPE debottlenecking with additional capacity of 12% Downstream debottleneck expansion to capture fully-integrated margin by converting additional ethylene into downstream products Adding 1 furnace to PTTPE cracker The additional volume of gas feedstock from PTT will be ethane : LPG or 60 : 40 Progress: basic engineering package Additional Capacity of PTTPE Cracker CAPEX Expected IRR 17% Target Completion 2016 12% Increase 285 MUSD Additional Olefins Capacity Possible value added downstream m-lldpe LLDPE Expansion 17
Phenol 2 Project Road to PC/Nylon Core Uplift 1-Step Adjacencies Emerging Business Models Phenol 2 Project will capture longer value chain of benzene and propylene. Pave a way towards downstream phenol derivatives. Financing: Project Financing Scheme, D/E 2:1 Progress: Construction Nameplate Capacity 250 KTA of Phenol 155 KTA of Acetone Technology License UOP Project Management Consulting Bechtel EPC Contractor POSCO CAPEX 348 MUSD Expected IRR 17% Target Completed 3Q/15 Our 1-Step Adjacencies Direction Partner with global player Seek joint sales/mkt in ASEAN PC Compounding Phenol Chain 18
JV with PERTAMINA Core Uplift 1-Step Adjacencies Emerging Business Models Competitive advantage over size and vicinity World-scale integrated petrochemical complex covering upstream to downstream Pave a way towards HVS product offering Estimated investment of USD 4-5 bn Expected COD 2018 Updated Progress On December 10, 2013 PTTGC and Pertamina: Signed Manufacturing Joint Venture HOA which includes a world scale cracker and downstream products complex, with no investment in the refinery complex. Entered into a marketing and trading JV to initially conduct polymer products marketing and distribution throughout Indonesia. 19
Pieces of Jigsaw to our downstream aspiration Core Uplift 1-Step Adjacencies Emerging Business Models Vencorex to HDI to system house Expand HDI derivatives business in Thailand and HDI monomer in France Restructure Business in France to enhance its competitiveness. Build PU system house with Partner in Thailand for niche market Seek for JV polyols and MDI Sinochem to secure access to China downstream market Signed MoU to jointly explore potential collaboration e.g., PU and PC chains and Bio-based chemicals Strengthen sales & market in China Petronas to expand into PC and PO chain Expand downstream product portfolio (PC and PO chain) and support HVS strategic initiative Signed HoA with Petronas and Itochu, target completion by 2017 for feasibility study Estimated Investment of USD 2 bn, PTTGC expects to contribute 25% of the equity component 20
1-Step Adjacencies Direction Core Uplift 1-Step Adjacencies Emerging Business Models Near-term Mid-Term Long-Term C4 Operate Butadiene Plant (BV Project) Expand into Synthetic rubber business by using butadiene from PTTGC and from JV Investment Plant JV with key player who offer technology for synthetic rubber strategic owner business model New Product PU Expand HDI derivatives business in Thailand and HDI monomer in France To build PU system house with Partner in Thailand for niche market Seek for JV polyols and MDI Expand niche PU position to China with partner JV polyols and MDI plant Build fully integrated PU plant Full market coverage PC Partner with global player Seek joint sales/mkt in ASEAN PC Compounding Expand capacity Strengthen market position New Geography US Shale Gas China ASEAN Study, preparation, and seek opportunity for Cracker in US Strengthen sales & mkt on polymer/meg with partner Build asset in China Sales & mkt on special grade polymers / HVS products COD Pertamina petchem complex Enhance sales and mkt initiatives in AEC Buildup HVS Facilities Co-Investment with Parent/Sister Company Seeking Partnership-JV Shale Gas Field Owner/Operator Asian Company Build and Operate Back integrated to a cracker project in China Secure AEC market position 21
Biochemical to Support Future Growth Core Uplift 1-Step Adjacencies Emerging Business Models PTTGC holds 50% in NatureWorks. A manufacture of polylactic acid (PLA) and lactides, plant-based biopolymers used to manufacture plastics and fibers with world scale PLA capacity of 150,000 ton/year. Applications Planned to build second plant potentially in Asia Studied the possibilities to use alternative feedstock PTTGC holds 84.77% in Myriant Corporation. An R&D based company with proven technology platform. In April 2013, Myriant Corporation had completed the construction of a 14,000 ton/year Succinic Acid Plant in Louisiana State and is currently commissioning. 22
CAPEX to Support Growth Approved and Uncommitted CAPEX Plan for year 2013-2017 USD 4.5 Bn Uncommitted CAPEX USD 2.5 Bn from Cash Flows from Operation USD 4.5 Bn Green 5% Core Uplift 31% USD 2 Bn from Debt Financing USD 1 Bn secured from USD Bond Issued in Sep. 2012 1 Step 64%* Adjacencies 23
Agenda PTTGC Business Overview Strategy and Execution Recent Happenings 3Q/13 Operating Results Market Outlook 24
Award and Recognition 25
Mission to be Continued Bowon Vongsinudom President and CEO PTTGC s Top Management Team s Commitment 26
New Organization Structure to Support Growth PTTGC Board of Directors Audit Committee CG Committee Nomination and Remuneration Committee Risk Management Committee VP Internal Audit President and CEO COU Up Stream Petrochemical Business COD Down Stream Petrochemical Business EVP GPC Refinery and Shared Facilities EVP GPC Aromatics EVP GPC Olefins EVP Engineering and Maintenance SVP Quality, Safety, Occupational Health and Environment EVP Polymers Business Unit EVP EO Based Performan ce Business Unit EVP Green Chemicals Business Unit SVP - High Volume Specialties Business Unit EVP Marketing, Commercial and Supply EVP Strategic Execution and Excellence EVP Corporate Strategy EVP Finance and Accounting EVP Organizational Effectiveness EVP Corporate Affairs EVP Project Executive Director Head Science and Innovation 27
Agenda PTTGC Business Overview Strategy and Execution Recent Happenings 9M/13 Operating Results Market Outlook 28
What happens in 2013? Euro crisis - US slowly recover Petchem market stronger + + China econ slowdown - PTTGC s Operating Oil price Fluctuation + Performance Fluctuation THB - Lower F/S supply (GSP 5) - Oil spill & rehabilitation - Unplanned S/D LDPE - 29
Key Financial Highlights THB mn 600,000 500,000 400,000 300,000 Sales Revenue 374,188 418,216 394,590 500,305 562,811 THB mn 120,000 100,000 80,000 60,000 45,642 11% 39,886 41,106 10% 40,609 EBITDA Adjusted EBITDA Adjusted EBITDA Margin (RHS) 11% 10% 44,273 42,569 54,423 47,645 57,168 10% 56,993 12% 10% 8% 6% 200,000 40,000 4% 100,000 20,000 2% - 9M/11 9M/12 9M/13 FY 11* FY 12-9M/11 9M/12 9M/13 FY 11* FY 12 0% THB mn 40,000 30,000 20,000 10,000 Net Profit EPS (Baht/Share) (RHS) 7.50 6.66 5.77 5.38 5.73 34,001 30,033 25,981 24,239 25,856 8.00 6.00 4.00 2.00 Dividend - Solid Payout Ratio FY11 FY 12 6M/13 EPS (THB/Share) 6.66 7.50 3.60 Dividend (THB/Share) 2.98 3.4 1.62 Payout Ratio (%) 45% 45% 45% Dividend Policy: As least 30% of Net Profit - 9M/11 9M/12 9M/13 FY 11* FY 12 - * Proforma Statements 30
Segmental Results Olefins and Olefins Derivatives Business contributed greatly to EBITDA FY12 Revenue Breakdown (%) Green 5% Olefins and Derivativ e 21% Aromatic s 20% Others HVS 0.98% 5% THB 563 Bn Refinery 48% 9M/13 Revenue Breakdown (%)* Green 5% Olefins and Derivative 23% Others 0.05% HVS 7% THB 395 Bn Aromatics 22% Refinery 43% *Refinery T/A in 1Q/13 Adjusted EBITDA Margin % by Core BU Unit:% FY 12 9M/13 Refinery 3 2 Aromatics 8 11 Olefins & Derivatives 27 28 Green 5 7 HVS 7 2 PTTGC 10 11 FY12 Adjusted EBITDA Breakdown (%) Green HVS 3% 3% Others 4.94% 9M/13 Adjusted EBITDA Breakdown (%)* Green 3% HVS Others 1% 2.96% Refinery 8% Olefins and Derivativ e 56% THB 57 Bn Aromatics 16% Refinery 16% Olefins and Derivative 61% THB 42.4 Bn Aromatics 24% 31
Strong Financial Position Cash + ST Investment CA PPE Statements of Financial Position THB 436 Bn 60 61 THB 413 Bn 50 55 101 137 98 121 240 226 238 237 Non CA 35 39 As of Dec 31, 2012 As of Sep. 30, 2013 Liab. IBD Share holders Equity Deben ture 62% Loan Type ST Loan 3% LT Loan 35% THB 121 Bn Interest Rate 68 % Fixed 56 % THB Currencies 32 % Float 44 % USD & Others Cost of long term debts ~ 5.0% (Include W/H Tax) Average loan life after refinancing - 5.0 Years Treasury policy Net IBD to Equity ratio of 0.7x Net IBD to EBITDA ratio of 2.4x THB Bn Maturity of Financial Debt* as at 30 Sep., 2013 5.2 16.4 8.4 9.6 PTTGC PPCL Others 14.8 14.3 7.7 11.6 0.5 31.4 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 * After Refinance 1.6x 1.4x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x 1.34 1.06 0.98 Key Financial Ratios 1.18 0.32 0.25 0.26 0.30 31 Dec. 12 Net IBD / EBITDA Net IBD/Equity 31 Mar. 13 30 Jun. 13 30 Sep. 13 20% 15% 10% 5% 16.15% 16.39% 10.43% ROE ROA 17.09% 16.11% 11.13% 11.83% 10.50% 31 Dec. 1231 Mar. 1330 Jun. 13 30 Sep. 13 32
Agenda PTTGC Business Overview Strategy and Execution Recent Happenings 3Q/13 Operating Results Market Outlook 33
Key Market Trends in 2014 Dubai Crude oil prices is expected to average 102 USD/BBL in 2014, softening from average 105 USD/BBL in 2013 due to addition Non-OPEC supply. IEA Demand Growth (mbd) (mbd) 2012 89.98 +1.02 2013 91.17 +1.19 2014 92.37 +1.20 Source: IEA, OMR Dec. 13 EIA Demand Growth (mbd) (mbd) 2012 89.17 +0.87 2013 90.38 +1.21 2014 91.59 +1.21 Source: EIA, STEO Jan. 14 OPEC Demand Growth (mbd) (mbd) 2012 88.90 +0.80 2013 89.80 +0.90 2014 90.80 +1.00 Source: OPEC, OMR Dec. 13 Source: JBC, Nov. 2013 World Oil Demand should grow around 1.1 MMBD in 2014, while net additional of 2.25 MMBD refinery capacities will be added. GRM should be pressure from these addition capacities. 34
Key Market Trends in 2014 Cont PX spread should be pressure from additional PX capacities in the beginning of 2014, however, should be ease from higher demand for PX from new PTA capacities BZ spread is expected to maintain at high level from 2013 into 2014 due to the limited feedstock (Pygas) due to changes of feedstock in North America cracker from shale gas. BZ import into North America is growing and robust in China due to additional BZ derivatives capacities. Source: IHS, World Petrochemical Conference 35
Key Market Trends in 2014 Cont Global Ethylene supply & demand is expected to be tight in 2014 even though new capacities are being add into the market where global operating rate to be flat YoY at 87% Global PE demand is still growing at 4.6% per year HDPE price is expected to remain at high level from improving economic and less supply coming in 2014 Source: IHS, World Petrochemical Conference 36
Thank You For further information & enquiries, please contact our Investor Relations Team at IR@pttgcgroup.com 1 Thitipong Jurapornsiridee VP - Corporate Finance & IR Thitipong.j@pttgcgroup.com +662-265-8574 2 Puvadol Vasudhara IR Manager Puvadol.v@pttgcgroup.com +662-140-8712 3 Panugorn Puengpradit IR Analyst Panugorn.p@pttgcgroup.com +662-140-8714 4 Prang Chudasring IR Analyst Prang.c@pttgcgroup.com +662-265-8327 5 Chutima Jarikasem IR Coordinator Chutima.j@pttgcgroup.com +662-140-8713 37
Agenda Appendix 3Q/13 Detail Performance Product Demand/Supply The 3 Incidents in 2013 38
3Q/13 Business Environment and Operations Recap Unrests in several oil producing countries supported Dubai crude price to average at 106 USD/BBL in 3Q/13, increased 6% from 101 USD/BBL in 2Q/13. Rising oil price contributed to a stock gain&nrv of Baht 3,768 mn Baht depreciated from US FED s signal on QE tapering from avg. 29.9 Baht/USD in 2Q/13 to 31.5 Baht/USD in 3Q/13 Higher crude price pushes products prices up while mix margin among products Most Products Price/spreads increased Diesel-Dubai 17.32 USD/BBL +3% QoQ -18% YoY PX-Cond 511 USD/Ton -5% QoQ +20% YoY USD/BBL 130 120 110 100 90 80 70 Dubai 116.1 106.4 106.3 107.4 108.2 100.7 106.3 1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 HDPE 1,489 USD/Ton +3% QoQ +11% YoY MEG 1,143 USD/Ton -3% QoQ +7% YoY Overall utilization rate of major businesses 33.00 32.00 THB/USD 3Q/12 2Q/13 3Q/13 Refinery 101% 63% 98% Aromatics 90% 84% 91% Olefins 91% 93% 75% Polymers 102% 90% 88% MEG 93% 100% 92% Green - FA 116% 112% 139% Green - ME 84% 106% 129% Phenol 128% 127% 124% 31.00 30.00 29.00 28.00 27.00 31.0 31.3 31.3 30.7 29.8 29.9 31.5 1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 39
3Q/13 Key Financial Highlights (Unit: Million Baht) 3Q/2013 3Q/2012 (Restate) 2Q/2013 YoY % + /(-) QoQ % + /(-) 9 Month Ending June 30, 2013 9 Month Ending June 30, 2012 YoY % + /(-) Sale Revenue 141,394 145,309 111,887-3% 26% 394,590 418,216-6% EBITDA 16,388 18,581 11,466-12% 43% 44,273 41,106 8% EBITDA Margin (%) 12% 13% 10% -1% 1% 11% 10% 14% Net Profit 9,610 12,879 4,172-25% 130% 25,857 24,239 7% Earnings Per Share 2.13 2.86 0.93-26% 129% 5.73 5.38 7% Adjusted EBITDA 12,619 15,306 12,888-18% -2% 42,569 40,609 5% Adjusted EBITDA Margin (%) 9% 11% 12% -2% -3% 11% 10% 1% 9M/13 Sales Split Domestic : Export Volume Refinery Aromatics Olefins Polymers EO-based Green Phenol & BPA 11% 38% Domestic 76% 64% 91% 85% 74% Export 89% 62% 24% 36% 9% 15% 26% 0% 20% 40% 60% 80% 100% 40
Refinery BU Performance USD/BBL 25 15 5-5 -15 Kbbl 20,000 15,000 10,000 5,000 - Market Price Jet-Dubai Diesel-Dubai FO-Dubai 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 USD/BBL 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 Dubai 106 107 108 101 106 Jet-Dubai 20 19 20 15 17 Diesel-Dubai 21 20 20 17 17 FO-Dubai -2-9 -7-4 -11 Sales Volume Naphtha Reformate Jet Diesel Bio Diesel FO Others 1,159 1,203 2,235 2,447 1,536 1,512 - - 2,420 2,358-2,543 10,084 9,862 544 7,952 1,349-5,804 5,421 1,482 1,503 1,946 1,454 1,226 920 1,087 1,953 1,400 1,469 1,410 780 781 876 1,204 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 Market GRM Unit: USD/BBL 3Q/12 2Q/13 3Q/13 Market GRM 5.94 2.38 3.48 CDU GRM 7.61 2.73 4.31 CRS GRM 2.73 2.38 2.90 Stock Gain/Net NRV 2.51-2.92 4.21 Accounting GRM 8.47 0.69 8.68 Utilization Rate % 3Q/12 2Q/13 3Q/13 CDU URate 101% 63% 98% Change in Price/Spread % Change QoQ YoY Dubai 6% 0% Jet-Dubai 11% -16% Diesel-Dubai 3% -18% Fuel Oil-Dubai -192% -333% Change in Sales Volume % Change QoQ YoY Jet 80% 32% Diesel 7% -42% Total 61% -9% 41
Aromatics BU Performance USD/Ton Market Price P2F 1,800 1,600 1,400 1,200 1,000 Naphtha Condensate PX BZ 800 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 KTon 1,000 800 600 400 200 - USD/Ton 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 PX- Cond 426 605 669 539 511 BZ-Cond 259 431 430 415 329 Sales Volume Benzene Paraxylene Ref+LN Other By-Products 102 118 109 96 208 248 216 189 330 324 318 291 325 210 193 181 213 189 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 93 270 USD/Ton 3Q/12 2Q/13 3Q/13 Market P2F 243 325 260 Stock Gain 41-46 84 Utilization Rate % 3Q/12 2Q/13 3Q/13 BTX U-Rate 90% 84% 91% Change in Price/Spread % Change QoQ YoY Condensate 7% 1% PX-Cond -5% 20% BZ-Cond -21% 27% Change in Sales Volume % Change QoQ YoY BTX 2% -5% *Benzene = BZ+Cyclohexane Paraxylene = PX + Other BTX 42
Olefins and Olefins Derivatives BU Performance USD/Ton 1,600 1,400 1,200 1,000 Market Price Naphtha HDPE LLDPE LDPE MEG Utilization 3Q/12 2Q/13 3Q/13 Olefins 91% 93% 75% HDPE 100% 96% 106% LLDPE 113% 72% 113% LDPE 113% 99% 5% MEG 93% 100% 92% 800 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 KTon 500 400 300 200 100 0 USD/Ton 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 Naphtha 915 944 961 858 920 HDPE 1,343 1,393 1,482 1,443 1,489 LLDPE 1,341 1,399 1,477 1,433 1,490 LDPE 1,327 1,369 1,459 1,444 1,569 MEG 1,065 1,247 1,282 1,173 1,143 Sales Volume 404 383 393 96 63 75 111 117 102 334 352 25 71 119 70 188 198 169 203 200 216 218 193 208 91 101 83 104 129 95 3Q- 12 Olefins HDPE LLDPE LDPE MEG Total PE 4Q- 12 1Q- 13 2Q- 13 3Q- 13 Change in Price QoQ YoY Ethylene 5% 10% HDPE 3% 11% LLDPE 4% 11% LDPE 9% 18% MEG -3% 7% Change in Sales Volume QoQ YoY Olefins 41% -32% HDPE 8% 5% LLDPE 70% 7% LDPE -66% -74% MEG -8% 5% 43
Phenol Performance USD/Ton Market Price Utilization 300 250 200 150 Phenol-BZ BPA-Phenol 100 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 USD/Ton 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 Phenol-BZ 264 165 233 245 244 BPA-Phenol 212 189 268 188 128 3Q/12 2Q/13 3Q/13 Phenol 128% 127% 124% BPA 36% 116% 116% Change in Spread QoQ YoY Phenol-BZ 0% -8% BPA-Phenol -32% -39% Ton Sales Volume Change in Sales Volume 80,000 60,000 40,000 32,880 34,827 Phenol BPA 25,128 41,751 44,946 QoQ YoY Phenol -30% -30% BPA 8% 37% 20,000-34,407 40,988 37,842 34,436 24,099 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 44
3Q/13 Profit and Loss Statement 3Q/2012 (Restate) 2Q/2013 3Q/2013 YoY QoQ THB Mn % THB Mn % THB Mn % THB Mn % THB Mn % 1 Sales Revenue 145,309 100 111,887 100 141,394 100 (3,915) (3) 29,507 26 2 Feedstock Cost (119,602) (82) (87,594) (78) (116,522) (82) 3,080 3 (28,928) (33) 3 Product to Feed Margin 25,707 18 24,293 22 24,872 18 (835) (3) 579 2 4 Variable Cost (5,136) (4) (6,204) (6) (6,211) (4) (1,075) (21) (7) (0) 5 Fixed Cost (3,940) (3) (4,163) (4) (4,028) (3) (88) (2) 135 3 6 Stock Gain/(Loss) & NRV 3,275 2 (1,422) (1) 3,768 3 493 15 5,190 365 7 Gain/(Loss) Hedging Commodity (30) (0) 419 0 560 0 590 141 34 8 Other Income 1,311 1 1,362 1 1,235 1 (76) (6) (127) (9) 9 SG&A (2,606) (2) (2,819) (3) (3,808) (3) (1,202) (46) (989) (35) 10 EBITDA 18,581 13 11,466 10 16,388 12 (2,193) (12) 4,922 43 11 Depreciation & Amortization (4,328) (3) (4,187) (4) (4,149) (3) 179 4 38 1 12 EBIT 14,253 10 7,279 7 12,239 9 (2,014) (14) 4,960 68 13 Financing Expenses (Net Interest Earned) (1,438) (1) (1,120) (1) (1,144) (1) 294 20 (24) (2) 14 FX Gain/(Loss) 746 1 (2,726) (2) (738) (1) (1,484) (199) 1,988 73 15 Shares of gain/(loss)from investments 25 0 (22) (0) (54) (0) (79) (316) (32) (145) 16 Corporate Income Tax (562) (0) 509 0 (708) (1) (146) (26) (1,217) (239) 17 Net Profit After Income Tax 13,024 9 3,920 4 9,595 7 (3,429) (26) 5,675 145 Portion of Net Profit: 18 Shareholders 12,879 9 4,172 4 9,610 7 (3,269) (25) 5,438 130 19 Minorities 145 0 (252) (0) (15) (0) (160) (110) 237 94 20 Adjusted EBITDA 15,306 11 12,888 12 12,619 9 (2,687) (18) (269) (2) Note: Adjusted EBITDA = EBITDA Stock Gain/(Loss) &NRV 45
9M/13 Profit and Loss Statement 9M/12 9M/13 YoY THB Mn % THB Mn % THB Mn % 1 Sales Revenue 418,216 100 394,590 100 (23,626) (6) 2 Feedstock Cost (351,638) (84) (316,235) (80) 35,403 10 3 Product to Feed Margin 66,578 16 78,355 20 11,777 18 4 Variable Cost (12,271) (3) (19,318) (5) (7,047) (57) 5 Fixed Cost (10,588) (3) (12,319) (3) (1,731) (16) 6 Stock Gain/(Loss) & NRV 498 0 1,703 0 1,205 242 7 Gain/(Loss) Hedging Commodity 367 0 1,127 0 760 207 8 Other Income 4,128 1 3,921 1 (207) (5) 9 SG&A (7,605) (2) (9,196) (2) (1,591) (21) 10 EBITDA 41,106 10 44,273 11 3,167 8 11 Depreciation & Amortization (12,290) (3) (12,288) (3) 2 0 12 EBIT 28,816 7 31,985 8 3,169 11 13 Financing Expenses (Net Interest Earned) (4,136) (1) (3,379) (1) 757 18 14 FX Gain/(Loss) 502 0 (1,478) (0) (1,980) (395) 15 Shares of gain/(loss)from investments 84 0 (94) (0) (178) (212) 16 Corporate Income Tax (618) (0) (1,419) (0) (801) (130) 17 Net Profit After Income Tax 24,648 6 25,615 6 967 4 Portion of Net Profit: 18 Shareholders 24,239 6 25,857 7 1,618 7 19 Minorities 409 0 (242) (0) (651) (159) 20 Adjusted EBITDA 40,609 10 42,570 11 1,961 5 Note: Adjusted EBITDA = EBITDA Stock Gain/(Loss) &NRV 46
Agenda Appendix 3Q/13 Detail Performance Product Demand/Supply The 3 Incidents in 2013 47
USD/Ton 1,600 1,395 1,400 1,200 1,000 800 600 400 200 0 Olefins Improved derivatives demand will support to Olefins market 1,306 1,297 1,336 1,265 Short-term Price Forecast 1,322 1,427 1,459 1,367 1,388 1,373 1,363 1,358 1,363 1,333 1,335 961 920 946 928 858 896 878 872 531 480 434 467 456 463 407439 402415 420 460 477 486 486 345 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F Long-term Supply/Demand Short-Term Olefins prices remain high in 2H-13 due to improve demand in derivatives markets in line with new PE plants in Asia will come on-stream However, For year 2014 the market will be pressured from 1) Additional new supply in Asia (mainly from China) 2) Turnaround and shutdown for maintenance of Asia cracker 3) Global economic outlook show the sign of recovery Unit : KMT 12,000 10,000 8,000 6,000 4,000 2,000 0-2,000 Sichuan PC China 800 KMT Q3-11 to Q4-13 ExxonMobil SG 1,000 KMT Q3-11 to Q2-13 SINOPEC Wuhan CH 800 KMT Q1-11 to Q3-13 Sinopec Zhijin China 300 KMT Q4-14 to Q2-13 OPAL India 1,100 KMT Q1-14 to Q3-14 Reliance India 1,350 KMT Q1-16 to Q3-16 Ilam Iran 458 KMT Q1-15 to Q1-16 CNOOC & Shell China 1,000 KMT Q1-16 to Q1-17 2013 2014 2015 2016 2017 2018 America Europe Middle East China Other Asia Additional demand Other Asia 17% China 35% America 24% Middle East 19% Europe 5% Additional (2013-2018) (Unit : MMT) Supply Demand 40.70 36.04 Source: CMAI January 2014 48
USD/Ton 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Polyethylene The market will be pressured from new supply in the short term 1,483 1,477 1,459 961 858 1,569 1,443 1,489 1,444 1,433 1,489 Short-term Price Forecast 1,664 1,687 1,569 1,482 1,499 1,536 1,550 1,492 1,455 1,468 1,545 1,555 1,488 1,438 1,455 920 946 928 896 878 872 718 758 522 585 568 649 621 590 595 577 569 599 627 672 586 592 596 516 560 604 583 626 498 449 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F HDPE Long-term Supply/Demand Short-Term PE prices should still be supported from growing demand in 2014 while new supplies are limited when compared to 2013 which should continue to support HDPE price to remain at high level Unit : KMT 3,000 2,500 2,000 1,500 1,000 500 0-500 Sichuan PC China 300 KMT Q1-12 to Q4-13 Saudi Polymers Saudi 550 KMT Q3-11 to Q1-13 SINOPEC Wuhan CH 300 KMT Q1-11 to Q3-13 OPAL India 350 KMT Q1-13 to Q3-14 BPCL India 110 KMT Q3-13 to Q4-14 Shanxi Coking Corp China 150 KMT Q2-15 to Q2-16 Ilam Iran 300 KMT Q1-14 to Q1-15 China 39% Other Asia 7% 2013 2014 2015 2016 2017 2018 America Europe Middle East China Other Asia Additional demand Europe 8% America 22% Middle East 24% Additional (2013-2018) (Unit : MMT) Supply Demand 12.92 11.54 Source: CMAI January 2014 49
Unit : KMT 3,500 3,000 2,500 2,000 1,500 1,000 500 0-500 LLDPE & LDPE New Capacities and Closures SINOPEC Wuhan China 300 KMT Q1-11 to Q3-13 Sichuan PC China 300 KMT Q3-12 to Q4-13 LLDPE Long-term Supply/Demand OPAL India 350 KMT Q1-13 to Q3-14 Yulin Energy China 300 KMT Q2-13 to Q2-14 Reliance India 550 KMT Q1-16 to Q4-16 LDPE Long-term Supply/Demand CNOOC & Shell China 300 KMT Q1-16 to Q1-17 Other Asia 25% China 38% 2013 2014 2015 2016 2017 2018 America Europe Middle East China Other Asia Additional demand America 20% Middle East 15% Europe 2% Additional (2013-2018) (Unit : MMT) Supply Demand 12.05 9.13 Unit : KMT 2,000 1,500 1,000 500 0-500 Borouge UAE. 350 KTA Q1-14 to Q3-14 Reliance India 400 KTA Q1-15 to Q4-16 2013 2014 2015 2016 2017 2018 China 24% Europe 18% Other Asia 8% America Europe Middle East China Other Asia Additional demand America 22% Middle East 30% Additional (2013-2018) (Unit : MMT) Supply Demand 5.96 3.80 50 Source: CMAI January 2014 50
USD/Ton 1,600 1,395 1,400 1,200 1,000 800 600 400 200 0 MEG the market remain robust due to seasonal and strong derivative demand 1,282 961 858 375 351 1,265 1,322 1,173 1,143 Short-term Price Forecast 1,427 1,459 1,208 1,204 920 946 928 284 281 256 1,363 1,307 1,370 1,420 1,333 1,335 896 878 872 503 552 421 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F Short-Term MEG market will be driven up from stronger demand in the downstream textiles and fabrics sectors in China due to high seasonal demand in 2H-2013 For year 2014, the market remain robust continuously from previous year due to strong derivative demand from new Polyester plants in China will start up Unit : KMT 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Sinopec Wuhan China 295 KTA Q1-13 to Q3-13 Ningbo Heyuan China 500 KTA Q4-12 to Q1-13 MEG Long-term Supply/Demand PetroChina Sichuan China 380 KTA Q3-13 to Q1-14 Dahua Chemical China 500 KTA Q2-15 to Q1-16 2013 2014 2015 2016 2017 2018 America Europe India Middle East China Other Asia Additional demand China 60% Other Asia 3% America 14% Europe 5% India 5% Middle East 13% Additional (2013-2018) (Unit : MMT) Supply Demand 14.98 8.89 51 Source: PCI November 2013 51
USD/Ton 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Paraxylene Additional new supplies will pressure on PX market 1,634 961 673 858 Short-term Price Forecast 1,409 1,449 1,442 1,405 1,397 1,352 1,330 920 946 928 896 878 872 551 528 496 477 500 474 458 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F Short-Term Additional new supply in Asia and squeezed PTA margins and high inventory levels among downstream Polyester market will affect the PX market in 2H-2013 For year 2014, PX market still be pressured on more new supplies in Asia mainly from China PX Long-term Supply/Demand Unit : KMT 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Tenglong Aromatics1 China 800 KTA Q2-12 to Q3-13 SK Energy S. Korea 800 KTA Q3-12 to Q1-14 PetroRabigh Saudi. 1,400 KTA Q3-15 to Q3-16 2013 2014 2015 2016 2017 2018 China 24% Other Asia 32% America Europe India Middle East China Other Asia Additional demand America 2% Europe 3% India 15% Middle East 24% Additional (2013-2018) (Unit : MMT) Supply Demand 24.42 14.93 52 Source: PCI November 2013 52
Benzene the market will still be driven by the main products USD/Ton Short-term Price Forecast 1,600 1,389 1,287 1,256 1,283 1,315 1,400 1,231 1,203 1,219 1,200 1,000 800 961 858 920 946 928 896 878 872 600 428 429 336 387 400 337 335 325 347 200 0 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F Short-Term Benzene supply in 2H-2013 will depend on the shutdown for maintenance of Aromatics plants and higher operating rate of Cracker in Asia due to high margin For year 2014, Benzene market will be depend on volatile crude and feedstock prices and improve derivatives demand from SM and Phenol market BZ Long-term Supply/Demand Unit : KMT 2,500 2,000 1,500 1,000 500 0-500 ExxonMobil Sing. 340 KTA Q1-13 to Q2-13 Anqing PC China 54 KTA Q3-12 to Q1-13 Samsung Total PC S. Korea 422 KTA Q4-14 to Q3-14 Reliance India 260 KTA Q1-16 to Q-15 Nghi Son Vietnam 246 KTA Q1-15 to Q3-17 2013 2014 2015 2016 2017 2018 Other Asia 59% America Europe Middle East China Other Asia Additional demand America 2% China 24% Middle East 25% Additional (2013-2018) Europe (Unit : MMT) Supply Demand 3% 8.76 8.01 53 Source: CMAI January 2014 53
USD/Ton 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Phenol Will be pressured from high feedstock prices and new additional supply 1,612 1,380 397 407 403 399 Short-term Price Forecast 1,531 1,502 1,528 1,399 1,277 1,249 1,283 1,315 1,346 1,296 1,345 1,231 1,203 1,228 242 263 237 265 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14F 2Q/14F 3Q/14F 4Q/14F Short-Term Phenol market in 2H-2013 and for year 2014 remain continue to face rising cost and will be pressured from new additional supply in Asia, mainly from China Phenol Long-term Supply/Demand Unit : KMT 1,500 1,000 500 FCFC China 300 KTA Q4-13 to Q3-14 SSMC China 250 KTA Q4-13 to Q3-14 Kumho P&B S. Korea 300 KTA Q3-14 to Q1-15 INEOS/Yangzi PC China 400 KTA Q3-14 to Q1-16 Other Asia 31% Europe 1% China 68% Additional (2013-2018) (Unit : MMT) Supply Demand 2.88 1.72 0-500 2013 2014 2015 2016 2017 2018 America Europe Middle East China Other Asia Additional demand 54 Source: CMAI January 2014 54
Agenda Appendix 3Q/13 Detail Performance Product Demand/Supply The 3 Incidents in 2013 55
The 3 Incidents in 2013 LDPE Shutdown What happened? LDPE (capacity 300KTA) shutdown since July 10, 2013 to repair the cylinder of the Booster/Primary Compressor. PTTGC expected to take approximately 3.5 months to repair the LDPE plant. Impact estimated 2% of NI. What s the update? -Start up on Sep. 26, 2013, which was earlier than plan. -Resume with utilization rate of 77% in Oct. with target of over 100% for the remaining of the year. -In the process of doing Root- Cause Analysis Oil Spill What happened? On July 27, 2013 leakage in the flexible hose was found at the SPM while discharging crude oil. The leakage resulted in oil spill of 54,341 liters. On and off shore cleanup operation was done quickly and effectively. What s the update? The oil spill incident expenses, including provision, for 3Q/13 was Baht1,059 mn. - Recovery expenses Baht 192 mn - Restoration expenses Baht 791 mn - Other expenses Baht 76 mn PTTGC and the insurance company are in the process of negotiation of the reimbursement claim covered by the insurance company. GSP#5 Shutdown What happened? On August 14, 2013, thunder storm and lightning strike on the Waste Heat Recovery Unit or WHRU of PTT s GSP#5 which is the gas supplier of I4-2 plant (capacity 450 KTA) PTT anticipated that the repairs will take approximately 3-5 months. What s the update? -PTT s GSP#5 is back to run at 50% and expects to run at 100% in early 2Q/14 and 100% back to normal operation by Aug. 2014. -PTTGC s overall olefin utilization rate to be around 90% in 4Q/13. 56