Joint Analyst Presentation Final

8/6/2019 Joint Analyst Presentation Final

1/29

Jo ntAna ystPresentat onFebruary25,2011 u or um, ea ce


2/29

Disclaimer

The information contained in our presentation is intended solely for your personal reference only. In

addition, such information may contain projections and forward-looking statements that reflect the

Companies current views with respect to future events and financial performance. These views are

based on assumptions subject to various risks. No assurance is given that future events will occur,

that projections will be achieved, or that the Companies assumptions are correct. Actual results may

er ma er a y rom ose pro ec e .

2

2


3/29


4/29

..

44


5/29

PTTs Group Direction

Petrochemical & Refinery Business Synergy creation Enhanced competitiveness

rom s ng grow po en a

2005

2007

2011

Flagship

Aromatics and Refinery

+

M e r g e d Co.

55


6/29

..

66


7/29

Transaction Rationale and Strategic Benefits

AchieveGlobalM e r g e d

World-ScaleCompany

Maximize

Integration

WinningFormula

Co.Create a Strong

Platform forGrowth

Reduce Volatilityof Raw Materials &

Product Prices

PTTs Petrochemical FlagshipThailands largest Gas and Liquid base Petrochemical producer with 8million tonnes production capacity

1

2g y n egra e pera ons w rong

Feedstock Position

Combined Synergy streams of 765 KTA

Strong Immediate Synergies and Identified Significant synergies of US$80m - US$154 m annually by 2015 with NPV of

3

Product Coverage Across All MajorPetrochemical Building Blocks

Combined Aromatics and Olefins feedstock with all major intermediate andderivative products

4

,

Improved Market Position

5Become top 5 market cap in Thailand and the top petrochemical companyin ASEAN

6

77

New Product Opportunities

high value added products


8/29

PTTs Petrochemical Flagship1

Thailands largest petrochemical player

Leading Aromatics, Olefins and Polymers position

Strong feedstock position with Natural Gas, Condensate and Crude supply contract and Light Naphtha/C3,C4 frome nery

Co .M e r g e d Co .

Petrochemical (KTA)

Aromatics 2,259 - 2,259 150 - 564

Olefins - 2,888 2,888 2,900 - 728

Polymers - 1,590 1,590 4,195 1,743 862

EO/EG - 495 495 - - -

Oleochemicals - 819 819 - - -

Phenol / BPA 105 105 210 - - -

Others - - - 395 1,590 -

Total (KTA) 2,364 5,897 8,261 7,640 3,333 2,154

(1)

Distillation Capacity (KBD) 280 - 280 - - 215

Petroleum Products (KBD) 228 - 228 - - 200

88

(1) Includes PTTs Phenol Capacity of 350 KTA (Phenol 200 KTA and BPA 150 KTA) proportionate by effective holdingsSOURCE: Companies Filings, Companies Website, Investor Presentations


9/29

Highly Integrated Operations with Strong Feedstock Position2

Highly secured and competitive feedstock from PTT (Natural Gas, Condensate and Crude)

Flexibility of feedstock interchange

MergedCo will have 8,261 KTA of petrochemical production capacity

Crude 145 KBD

Condensate 135 KBDNatural Gas3.5 MMTPA

PetroleumproductsOfftakeAgreements

MergedCoInte rated

Combined Synergy

Position

Benzene Propylene

(1) Combined synergy stream includes Offgas, HeavyAromatics, Heavy Gasoline, Light Cracker Bottom,Cracker Bottom and other feedstock (excluding LightNaphtha and Pygas)

Petrochemical and Petroleum Aromatics(2) Olefins(2) Petroleum

99

200KTA and BPA 150KTA) proportionate by effectiveholdings

, ,


10/29

Strong Immediate Synergies and Identified Long Term Synergies3

Feedstock and product Synergies Logistics and Utilities Synergies

Synergy projects Starting Investments BenefitsFeedstock DownstreamIntermediateUpstreamfrom (US$m) (US$m per

year)

1. Product upgradeNG

Ethane 1,300

Ethane 1,100

Propane 168C3/C4 900

Ethylene 1,000

CrackerEthylene1,000Propylene25

LDPE 300

GSP

1.1 Offgas (C2/C3+) Q3 2014 32.6 8.4 57.7

1.2 C3/C4 stream Immediate 0.1 38.4 47.9

1.3 Heav aromatics Immediate - 0.9 2.3

NGL 470Ethylene 500++

C3/C4

1.1

LLDPE 400

HDPE 300

, , , ,

CrackersI1,I4/1,I4/2

C3+

1.2

1.3

1.4 Heavy Gasoline, LightCracker Bottoms andCracker Bottoms

2013 3.9 11.4 25.9

Propy ene95++

LightCracker

Bottom

HeavyGasoline

HDPE 500

Ethylene 1,376

Propylene 4871.41.4

1.5 Pure H2 via New PSA 2013 10.3 11.9 12.8

2. Cost savings from

shared tanks and jetty

2013 37.2 7.4

BZ

Phenol

C3/C4LN

Phenol200Phenol 200C2/C3+

1.5

PureH2via

NewPSA

3. Steam cost reduction 2014 8.0 1.0

TOTAL 92.0 80.2 154.1Reformate

3,628++

Cracker

BottomDistillation

Capacity

280KBDAromatics

PX1,195KTABZ662KTA

1.4

BPA150

1010

n t:


11/29

Product Coverage Across All Major Petrochemical Building Blocks4

PTTs Petrochemical Flagship covering all Upstream Productswith Diversification Downstream and Room for Optimization

Inputs Basic Building Blocks Intermediates Derivatives Customers

NaturalGas

Ethylene

HDPE

LDPE

LLDPE

OlefinsEthane,Propane,

NGL

Ethylene oxide

Ethanolamine

Ethoxylate

MEG

Propylene

Light Naphtha,C3,C4

Benzene

X lene

Condensate

Aromatics

CrudePalm Oil Oleochemicals

Heavy Naphtha,

Reformate

Methyl Ester

Fatty Alcohol

CondensateResidue

Cumene

Cyclohexane

Phenol, acetone

Toluene

Petroleum

BPA

Crude Oil

1111

PTTCHPTTAR PTT Phenol


12/29


13/29

New Product Opportunities6

[

New product opportunities in high value added products Differentiated products with higher margins

Increases integration and cycle resilience

HigherMargins

Current products Opportunities

Increases integration

Higher margins

Polyurethane

Cycle resilience

Propylene

Oxide

BPA

PMMA

Polycarbonates

Polymers

Phenol Oleochem

ME/FA

Caprolactam

Olefins

Differentiated Products

EO/EG/EA

roma cs

1313


14/29


15/29

2010 Pro-Forma Financial Highlights

274 375

13

35 617

Sales1 (Proforma, THB bn) EBITDA2 (Proforma, THB bn) Net Profit (Proforma, THB bn)

99

1710

M e r g e d M e r g e d M e r g e d .. .. ..

409230 110

Total assets (Proforma, THB bn) Shareholders equity (Proforma, THB bn) Net debt (Proforma, THB bn)

168

153

106

63

1515

Co .Co . Co .Co . Co .Co .

Note:1 Sales includes only sale of goods. Excludes sales revenue from rendering of services2 EBITDA excludes gain on forex, interest income and share of income of associates


16/29

..

1616


17/29

MergedCo : An Initial View

Amalgamation (PTTAR+PTTCH = MergedCo) MergedCo will assume PTTARs and PTTCHs assets, liabilities and obligations

PTTAR and PTTCH automatically dissolve once MergedCo registered with the Ministry of Commerce

TransactionStructure

To be determined by shareholders during the joint meeting of PTTAR and PTTCH shareholdersName ofMergedCo

45,129,302,690 Baht

44,949,269,610 Baht

eg stere ap taPaid Up Capital

, , , s ares

Par value of 10 Baht

Mer edCo to combine business o erations from PTTAR and PTTCH as PTTs Petrochemical Fla shi withCore Business

strongly integrated refinery business

Listing Status Automatic Listing on the Stock Exchange of Thailand upon allocation of new MergedCo shares and

registration of MergedCo with the Ministry of Commerce

Swap Ratio 1 PTTAR Share for 0.501296791 MergedCo Shares

1717

1 PTTCH Share for 1.980122323 MergedCo Shares


18/29

Transaction Roadmap

24 Feb 11 Feb Mar 11 20/21 Apr 11 Apr-Jul 11

Creditors

approvalRoadshow AGM Objection

Period

M e r e d JointSH

RegistrationWith

ListingOn

BoD meeting toapprove

Co.

Meeting MoC SET

AGM to approveamalgamation

ama gamat on

Joint analystMeeting

Investor

2-month period ofcreditor objection

presentation

1818


19/29

1919


20/29

..

2020


21/29

verv ew overv ew o

2121


22/29


23/29

ransac on e a sransac on e a s

2323


24/29

Share Purchase From Dissenting Shareholders

Conditions to the Offer of PTT

PTT reserves the right to withdraw or cancel its declaration of intention to purchase PTTCH's shares from the shareholders whodisapprove the amalgamation of PTTAR and PTTCH, if PTT considers that:

1) PTT's shareholders disapprove PTT's purchase of PTTAR's and PTTCH's shares for this purpose

2) There are more than 10 percent of the total voting rights of PTTARs and PTTCH's shareholders who attend the meeting and.

3) The price of PTTAR and/or PTTCH ordinary shares to be purchased from the shareholders who disapprove the amalgamationis higher than:

.

Baht 150.00 per share for PTTCH ordinary share

4) From the date on which PTT declares its intention to purchase shares from the shareholders who disapprove theamalgamation of PTTAR and PTTCH until the last date of the share purchase period:

4.1) The trading and the price of PTTAR and/or PTTCH's ordinary shares are not normal as they should have been onthe SET;

4.2) There is an event or circumstance that may materially affect PTTARs and/or PTTCH's business operation,

financial status or assets and such event or circumstance does not occur as a result of the act done by PTT

5) If PTT withdraws or cancels the purchase of PTTAR's or PTTCHs ordinary shares, PTT will withdraw the purchase of theother companys ordinary shares as well

2424


25/29

Key Approvals Required

Shareholders AGM of PTTCH and PTTAR to approve the transaction with at least 75% of voting of shareholders

attending and eligible to vote

Joint shareholder meeting of PTTCH and PTTAR to approve details of Merge Co, for instance,

share allocation, company name, corporate legal documents, directors, audit committee, auditor,

etc., with majority vote

Creditors Right of PTTCHs and PTTARs creditors to object the transaction within 2 months after AGM

PTTCH and PTTAR to manage to obtain consents for the transaction from major creditors in late

A ril to late June 2011

Regulatory/ PTTCH and PTTAR to submit letter stating intention to amalgamate to BOI and Merge Co to

obtain approval from BOI in respect of investment promotion certificate on the date of registration

to MOC accordingly

PTTCH and PTTAR is required to seek approval from the Energy Regulatory Commission on the

amalgamation to obtain the Energy License for the MergedCo

2525


26/29

n us ry p a en us ry p a e

2626


27/29

Industry Update

Olefins

With recovery expected in the overall economy, ethylene

Olefins Prices and Spreads (US$/Ton)

1,750

and propylene demand is expected to remain robust

A significant part of new capacities have come on stream in2010, some additional capacities are coming on stream in

2011 350

700

1,050

1,400

Prices and spreads are tending upwards for Jan 2011 0Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Oct-

10

Nov-

10

Dec-

10

Jan-

11

Ethylene Spread Propylene Spread Propylene SEA

Eth lene SEA Na htha MOPS

Polyethylene Polyethylene Prices and Spreads (US$/Ton)

2,100

Source: CMAI

,demand is expected to resume strong growth by 2011,estimated at over five percent per year

Benefits deriving from the resumption in demand growth, in700

1,050

1,400

1,750

,

Prices and spreads are tending upwards for Jan 2011across all products

0

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Oct-

10

Nov-

10

Dec-

10

Jan-

11

HDPE Spread LDPE Spread LLDPE Spread Ethylene SEA

2727

HDPE SEA LDPE SEA LLDPE SEASource: CMAI


28/29

Industry Update (contd)

MEG

MEG was under pressure in 2010 as new supply from Asia

MEG Price and Spread (US$/ton)

1 750

and Middle East came online in 1HY partially offset bymaintenance shutdowns

Positive outlook with limited new capacity coming on stream

and sustained strong polyester and PET demand 350

700

1,050

1,400

0

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Oct-

10

Nov-

10

Dec-

10

Jan-

11

Spread MEG - 0.65 Ethylene MEG ASP Ethylene SEA

PX PX Price and Spread (US$/ton)

ource:

350

700

1,050

1,400

,economic crisis hit in 2009

With current tight supply and recovery of demand,especially in Asia, margins are in an uptrend

0

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Oct-

10

Nov-

10

Dec-

10

Jan-

11

Spread PX-Naphtha PX ACP Naphtha MOP J

2828

Source: CMAI


29/29

Industry Update (contd)

BZ

The benzene market situation is improving with lesser 1,400

Benzene Price and Spread (US$/Ton)

excess capacity than previously expected, largely due tolimited feedstock in US and Western Europe

While, demand continues to recover, supply has been

constrained due to the by-product nature of benzene 350

700

1,050

BZ spreads are forecasted to rebound significantly in 2011and can sustain healthy margin in future periods

0

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-

10

Aug-

10

Sep-

10

Oct-

10

Nov-

10

Dec-

10

Jan-

11

Spread BZ-Naphtha BZ SEA Naphta SEA

Economic recovery, in particular, in Asia leading to

Singapore products margins (US$/bbl)GRM

ource:

mprove re ne pro uc s eman

Global and Asian demand for middle distillates (diesel, jetfuel, kerosene and gasoil) is projected to grow faster thangasoline demand

-

0

5

10

15

Overall GRM especially in Asia gaining more upwardmomentum

-10

10-

Jan

10-

Feb

10-

Mar

10-

Apr

10-

May

10-

Jun

10-

Jul

10-

Aug

10-

Sep

10-

Oct

10-

Nov

10-

Dec

11-

Jan

Mogas 95 Unl (S'pore) - Dubai Jet - DubaiGasoil - Dubai Fuel Oil Crack

2929

Source: CMAI

Joint Analyst Presentation Final

Documents

Transcript of Joint Analyst Presentation Final