Industries Qatar Investor Relations Presentation 31 December 2019 “One of the region’s industrial giants with interests in the production of a wide range of petrochemical, fertilizer and steel products. ” Publication Date: March […], 2015
DISCLAIMER The companies in which Industries Qatar Q.P.S.C. directly and indirectly owns investments are separate entities. In this presentation, “IQ” and “the Group ” are sometimes used for convenience in reference to Industries Qatar Q.P.S.C. This presentation may contain forward-looking statements concerning the financial condition, results of operations and businesses of Industries Qatar Q.P.S.C. All statements other than statements of historical fact are deemed to be forward-looking statements, being statements of future expectations that are based on current expectations and assumptions, and involve known and unknown risks and uncertainties that could cause actual results, operations and business performance or events impacting the group to differ materially from those expressed or as may be inferred from these statements. There are a number of factors that could affect the realization of these forward-looking statements such as: (a) price fluctuations in crude oil and natural gas, (b) changes in demand or market conditions for the group’s products, (c) loss of market share and industry competition, (d) environmental risks and natural disasters, (e) changes in legislative, fiscal and regulatory conditions, (f) changes in economic and financial market conditions and (g) political risks. As such, results could differ substantially from those stated, or as may be inferred from the forward-looking statements contained herein. All forward-looking statements contained in this presentation are made as of the date of this presentation. Industries Qatar Q.P.S.C., its Directors, officers, advisors, contractors and agents shall not be liable in any way for any costs, losses or other detrimental effects resulting or arising from the use of or reliance by any party on any forward-looking statement and / or other material contained herein. Industries Qatar Q.P.S.C., its subsidiary, joint ventures and associated companies are further in no way obliged to update or publish revisions to any forward-looking statement or any other material contained herein which may or may not be known to have changed or to be inaccurate as a result of new information, future events or any reason whatsoever. Industries Qatar Q.P.S.C. does not guarantee the accuracy of the historical statements contained herein. GENERAL NOTES IQ’s accounting year follows the Gregorian calendar year. No adjustment has been made for leap years. Where applicable, all values refer to IQ’s share. Values expressed in QR billions and percentages have been rounded to 1 decimal point. All other values have been rounded to the nearest whole number. Values expressed in US $ ’s have been translated at the rate of US $1 = QR3.64. DEFINITIONS Adjusted Free Cash Flow: Cash Flow From Operations - Total CAPEX - Dividends • CAGR: Compound Annual Growth Rate • Cash Realisation Ratio: Cash Flow From Operations / Net Profit x 100 • Debt to Equity: (Current Debt + Long-Term Debt) / Equity x 100 • Dividend Yield: Total Cash Dividend / Closing Market Capitalisation x 100 • EBITDA : Earnings Before Interest, Tax, Depreciation and Amortisation calculated as (Net Profit + Interest Expense + Depreciation) • EPS: Earnings per Share (Net Profit / Number of Ordinary Shares outstanding at the year end) • Free Cash Flow: Cash Flow From Operations - Total CAPEX • HBI: Hot Briquetted Iron • mmBTU: Million British Thermal Units • Payout Ratio: Total Cash Dividend / Net Profit x 100 • P/E: Price to Earnings (Closing market capitalisation / Net Profit) • utilization: Production Volume / Rated Capacity x 100) 2 Industries Qatar, IR Presentation, YE 2019
About Industries Qatar 3 Industries Qatar, IR Presentation, YE 2019
About IQ • • Industries Qatar Q.P.S.C. (“IQ” or “the group” ; QE IQ is credit rated by Standard & Poor’s ticker: IQCD) was incorporated on April 19, 2003 (A+; stable) and Moody’s (A1; stable); and listed on the Doha Securities Market (precursor to the Qatar Stock Exchange) in 2003; • Qatar Petroleum provides most head office functions through a comprehensive • The issued share capital consists of 6.05 billion service-level agreement. shares ◦ The free float consists of 2.97 billion ordinary shares, with 49% of the market capitalization as a foreign ownership limit, and a • The operations of the subsidiary and joint maximum shareholding size for general ventures remain independently managed shareholders of 2.0% of the issued share capital; by their respective Boards of Directors and senior management teams; 4 Industries Qatar, IR Presentation, YE 2019
Group Structure • Through its group companies, IQ operates in 3 business segments - Petrochemical, Fertilizer and Steel; • Production facilities are principally located in the State of Qatar ▫ head count is circa 5,700 employees; • 51% Qatar Petroleum • 21.04% General Retirement 50% IQ and Social Insurance Authority IQ 20% OPIC Middle East Corp 15% LCY Middle East Corp 15% International Octane Ltd 75% IQ 80% IQ 25% Yara Netherland BV 20% Total 100% IQ Petrochemicals Qatar QAFCO QAPCO QAFAC Steel Qatar Solb QVC GFC Qatofin QPPC Foulath Melamine Steel RLOC QZ FZE QMCC 5 Industries Qatar, IR Presentation, YE 2019
Board of Directors • The Board of Directors of the group consists of: H.E. Mr. Saad Sherida Al-Kaabi Chairman and Managing Director Mr. Abdulaziz Mohammed Al-Mannai Mr. Abdulla Ahmad Al-Hussaini Vice Chairman Member Mr. Abdulrahman Mohammed Al- Dr. Mohammed Yousef Al-Mulla Suwaidi Member Member Mr. Khalid Sultan Al-Kuwari Mr. Mohammed Nasser Al-Hajiri Member Member 6 Industries Qatar, IR Presentation, YE 2019
Competitive Advantages • • Assured feedstock Solid liquidity position supply • No debt • Economies of scale • Strong cash flow • Synergy benefits generation even under • difficult conditions Operationally • diversified Sound dividend record • Stable EBITDA margin • A+ / A1 rated Strong Low cost financial producer position Experienced Market senior leadership leadership team • • Major steel producer in 51% held by QP the region • Industry experts in the • World’s largest single senior management site urea producer team • • Dedicated marketing Reputable partners support (Total, Yara etc.) • Reputed listed entity 7 Industries Qatar, IR Presentation, YE 2019
Results at a glance (2013-2019) 8 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 8
Results at a Glance (2013-2019) Production (M MT’s) Sales Volumes (M MT’s) Production grew from 16.3 million MT’s in 2013 and peaked to reach 17.4 million MT’s in 2015, thereafter continued to remain relatively stable ▪ The sales volume grew over the period and reached its highest in 2018 ▪ Selling prices were affected significantly due to economic cycles Selling Prices (USD / MT) Utilization (%) 9 Note: CAGR refers to Compounded Annual Growth Rate Industries Qatar, IR Presentation, YE 2019
Results at a Glance (2013-2019) Revenue (QR Bn) Net income (QR Bn) Revenue trends moved in line with the selling prices ▪ Movements in revenue together with operating costs affected the net income growth ▪ Cash across the Group continued to grow and reached its peak in 2018 Total Assets (QR Bn) Net Cash / (Debt) (QR Bn) under IAS31 10 Note: CAGR refers to Compounded Annual Growth Rate Industries Qatar, IR Presentation, YE 2019
Results at a glance (For the year ended 2019) 11 INDUSTRIES QATAR | Quarterly Financial Update (2014 Q4) | Page 11
Key Highlights Production (MT’000) Sales Volumes (MT’000) Selling Prices ($ / MT) MT’s, Production of 17.0 million Sales volumes of 9.5 million MT’s, Average Selling price for the year is marginally down on 2018. marginally down on 2018. In line with USD 405 / MT down by 14% versus Production affected by periodic weaker market dynamics and lowered 2018. planned maintenance and production, sales volumes were down unplanned shutdowns. on last year. Net profit ( QR Billion ) Net Cash / (Debt) ( QR Billion ) Revenue (QR Billion) IAS 31 IFRS 11 Group Revenue of QR 13.7 billion, down Net income of QR 2.6 billion, significantly Total cash across the Group stands at QR 16% on last year, driven by combined down by 49% on 2018. Lower revenue 12.4 billion. Cash decreased from last year effect of lower prices and volumes. driven by lower price / volume mix led to due to payment of 2018 dividends of QR lower net income for the year. 3.6 billion, despite the Group generated QR 3.5 billion net cash from its operations. 12 12 Industries Qatar, IR Presentation, YE 2019
Net Profit Variance Analysis Net profit of QR 2.6 billion, significantly down on last year ● driven by lower prices, sales volumes, partially offset by other income and income from associates ● OPEX decreased primarily due to lower production / sales. 13 Industries Qatar, IR Presentation, YE 2019 13
Geographic analysis – IQ Group revenue Asia remained the Group’s largest market in 2019, while its presence in Americas and Indian sub-continent continued to be substantial Europe 4% Qatar North America 9% Middle East Asia 7% 15% 43% South America Indian sub-continent Africa 5% 13% 4% 14 Industries Qatar, IR Presentation, YE 2019 14
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