the PBG conference presentation by alicejenny


									       PBG SA

                    Company you can relay on, according Forbes & PID rating


                        October 2006

       PBG SA – Company listed on the Warsaw Stock Exchange

               IPO – issue price of PLN 32 per share (June 2004)
               Debut price on the WSE – PLN 35 (July 2nd 2004)     PBG stock performance
               SPO – issue price of PLN 92 per share (Jan 2006)
                                                                          on the WSE
               Current market price – PLN 189 (September 29th2006)

                 Shareholders structure (in votes)

           Jerzy Wiśniewski
               52,36%                         Tomasz Woroch
                                                BZ WBK AIB AM

                                                 ING TFI


   Managing Personnel
  Jerzy Wiśniewski, MBA – President of the Management Board, graduate of the Civil Engineering
  Faculty of Politechnika Poznańska [Poznań University of Technology].
  Małgorzata Wiśniewska, MBA – Vice-President of the Management Board, graduate of the Civil
  Engineering Faculty of Politechnika Poznańska [Poznań University of Technology]. Post-
  graduate studies in Public Relations at the Finance and Banking Faculty of Wyższa Szkoła
  Biznesu [Business College] of Poznań.
  Tomasz Woroch, MBA – Vice-President of the Management Board, graduate of the Social
  Studies Faculty of Uniwersytet im. Adama Mickiewicza of Poznań [Poznań University].
  Przemysław Szkudlarczyk, MBA – Vice-President of the Management Board, graduate of the
  Building Machine and Vehicle Faculty of Politechnika Poznańska [Poznań University of
  Tomasz Tomczak – Vice-President of the Management Board, graduate of the Building
  Machine and Vehicle Faculty of Politechnika Poznańska [Poznań University of Technology].
  Mariusz Łożyński – Member of the Board, graduate of Politechnika Poznańska [Poznań
  University of Technology], Civil Engineering Faculty

          Business Profile
       General execution of natural gas, crude oil and water installations in turn-key

                      A. PRODUCTION                         B. TRANSMISSION
                             of                                       of
                         natural gas                              natural gas,
                        and crude oil                              crude oil
                                                                  and water

                                         C. STORAGE
                                  of natural gas, fuels and LNG

                       D. DISTRIBUTION                 E. ENVIRONMENTAL
                        of natural gas                     PROTECTION &
                          and water               1.   Water & sewage systems
                                                       2.    Hydro construction
                                                             3.    Renovations

       Business Profile

       A. Production of natural gas and crude oil
          Above-ground installations for crude oil and natural gas production
          Installations for liquefaction of natural gas (LNG)
          LPG separation stations
          Crude oil desulphurization units
       B. Transmission of natural gas, crude oil and water
          Steel pipelines and structures for transmission of natural gas, crude oil and water, including:
               steel water pipelines and collectors, crude oil pipelines and high-pressure gas pipelines
               Gas pressure-reduction and measuring stations, mixing plants, separation nodes, gas compressor
                stations, etc.
          LNG transport
       C. Storage of natural gas, fuels and LNG
          Installations for storage and degasification of LNG
          Storage stations for LPG and C5+
          Fuel depots
          Above-ground installations of underground gas storage facilities

       Business Profile

       D. Distribution of natural gas and water
          Polyethylene pipelines and installations for distribution of natural gas and water
          Heat-generation infrastructure (boiler houses, heat generating plants, heat
           distribution centres)
          Co-generation (combined heat and power generation from natural gas)
       E. Environmental protection and sanitary systems
          Water and wastewater systems, including:
               Water pipelines
               Sewage systems
               Wastewater and water treatment plants
               Water intakes
               Incinerating plants
          Hydro-engineering structures

       Completed Projects
•      Natural Gas Plant in Kościan   •   Crude Oil Plant in Sławoborze

 •     LNG Installation               •   LPG Separation and Storage Station in Władysławowo

       •   WWTP – Zabrze         •   NRU Grodzisk Wlkp

       •   Fuel Depots - Orlen   •   Stage of fall in Malczyce

               Activity                            Domestic competition                    Foreign competition

Natural gas and crude oil plants         Naftomontaz Krosno                        ABB

Gas and crude oil transmission systems   Naftomontaz Krosno, Gazobudowa Zabrze,
                                         Gazobudowa Poznan, Gazomontaz Wołomin,

Underground gas storages                 -                                         ABB, Sofregas

LNG installations                        Polimex Mostostal                         Tractebel, Linde, Costain, Air

Fuel depots                              Hydrobudowa 6 Warsaw, Polimex Mostostal   Bilfinger Berger

Construction of sewage and water         Hydrobudowa 6 Warsaw, Hydrobudowa 9       SKANSKA, STRABAG, Ferrovial
systems                                  Poznan, POL-AQUA, Mitex, Hydrobudowa
                                         Gdansk, Budimex, Polimex Mostostal

Renovation of sewage and water           -                                         Per Aarslef, Diringer&Scheidel,
systems                                                                            Ludwig Pfeifer

Hydro-construction                       -                                         SKANSKA, Bilfinger Berger, Ferrovial

        PBG Group

                                 99,75%                        91,84%                                    58,10%
                                                                Hydrobudowa-                      Hydrobudowa
                                  INFRA Sp. z o.o.
                                                                Włocławek S.A.                      Śląsk S.A.

     100%             99,56%                                 99,98%        92,24%                    15,0%

        KB GAZ S.A.   Metorex Sp. z o.o.             KRI Sp. z o.o.              PGS Sp. z o.o.

ATG Sp. z o.o.

  Employment PBG Capital Group - 2104 (05.09.06)

    Structure of the PBG Group
   Company        Interest                                                Business profile
ATG Sp. z o.o          100%   Trading, including supply of materials and equipment, comprehensive supplies to companies operating
                              in the gas, oil, heat-generation, as well as water and wastewater industries, organisation of purchases
                              for the PBG Group – optimisation of purchasing terms.
KB GAZ S.A.            100%   Infrastructure investment, environmental protection, such as waterworks and wastewater systems,
                              pumping stations and water treatment plants; low-, medium and high-pressure gas supply systems. It is
                              a pioneer on the Polish market in terms of using directional drilling technologies for laying underground
KRI Sp. z o.o.        99.9%   Transmission, distribution of and trade in natural gas, generation and distribution of heat,
                              Advisory services in the area of fund raising for and implementation of investment projects relating to
                              the use of natural gas and generation of heat, as well as application of the LNG technology to the
                              distribution of natural gas.
INFRA Sp. z o.o      99.75%   Specialist services in the area of rehabilitation of water pipes and sewage systems

METOREX Sp.           99.6%   Construction of water-pipe networks, sewage systems, heat and gas distribution networks,
z o.o                         land melioration networks, hydro-engineering, wastewater treatment plants, road and square
PGS Sp. z o.o.       92.24%   Specialist services in the area of road transport, mainly of LNG, road transport by specialist and
                              universal vehicles, transport via pipelines, handling and storage of goods.
HYDROBUDOWA           91.8%   Comprehensive execution and servicing of investment projects in the area of civil engineering, hydro-
Włocławek S.A.                engineering, as well as environmental protection, water supply and sewage systems.

HYDROBUDOWA           65,9%   Execution of huge water supply and sewage systems and hydro-engineering

    PBG Group’s 2002–2006 Financial Highlights [PLN’000]
                                                                                                           operating profit
  800 000                                                                 702135
                                                                                    45 000                                                     41331
                                                                                    40 000
  600 000                                                                           35 000
                                                                 408539             30 000                                    25 880
                                                                                    25 000
  400 000                                                                           20 000                14 290
                                 180 666           216 131
                 162 141                                                            15 000      9 181
                                                                                    10 000
  200 000                                                                            5 000
        0                                                                                        2002      2003                2004             2005

                  2002            2003                 2004      2005     2006E                             Net margin

                                                                                    9,0%                                      8,4%
                                               net profit                           7,0%                  6,3%
        50 000                                                                      6,0%
        40 000
        30 000
        20 000                                          13 947                                   2002     2003                2004             2005
                                      11 301
        10 000           4 626                                                                                     Amount                 In year
                                                                                                                   [mPLN]              2006    2007…
                         2002         2003               2004      2005   2006E
                                                                                             Backlog of
                                                                                                                      1506,2           760,0   756,00

12/23                      forecast
                                                                                                                    Revenue structure 2005

           Revenue Structure 2002-2005 [PLN ‘000]                                                                     1% 3%
                                                                                                              38%                                           5%

                    environmental protection                  transmission
                    industrial infrastructure and buildings   storage
                    production                                natural gas distribution
                    distribution systems                      sales of w ater and w astew ater treatment
          450 000

          400 000
                                                                                                                                             2 863
                                                                                                                                             5 062
                                                                                                                                             12 623
          350 000                                                                                                                            19 418
                                                                                                                                             52 547
          300 000
                                                                                                                                             65 758

          250 000

          200 000                                                                                          2 794
                                                                                                             502                             79 847
                                                                2 160
                                       0                        23 401                                     42 437
          150 000                    30 138                     10 365
                                                                                                           5 018
                                     15 428                     39 661                                     26 414
          100 000                                               9982
                                     47 655                                                                58 918                        149 738
                                     8 592                      67 439
           50 000
                                     33 097
                                                                                                           50 572
                                     22 512                     26 042
                                      2002                       2003                                      2004                              2005

    Key Clients – Year 2005
        Client                                             %
        GOV. of the PROVINCE of OLSZTYN                 13,62%

        PKN ORLEN S.A.                                  13,29%

        PGNiG S.A.                                      10,41%

        PROCHEM S.A.                                     6,95%



        GAZ-SYSTEM Ltd.                                  2,97%

        MITEX S.A.                                       2,35%

        MEGAGAZ S.A.                                     1,82%

        CONTROL PROCESS S.A.                             1,75%

        Ministry of Defence - NATO                       1,28%

    Significant Running Contracts
                     Contract                        Signed                    Investor                          Contractor          Value

    Modernisation and extension of the             Sep 17, 2004   MPWiK (Municipal Water and          Hydrobudowa Włocławek SA,   EUR 16.49m
    Włocławek wastewater treatment plant                          Sewage Company) of Włocławek        PBG SA

    Górzyca crude oil plant                        Nov 8, 2004    PGNiG SA                            PBG SA, Thermo Design       EUR 16.9m

    Refurbishment of the existing sewage           Dec 9, 2004    ZWiK of Szczecin (Municipal Water   PBG SA, DIRINGER&SCHEIDEL   EUR 42.22m
    network of the left-bank Szczecin                             and Sewage Company of               Rohrsanierung GmbH&Co KG

    Construction of the Grzechotki –               Dec 17, 2004   Governor of the Province of         PBG SA, Hydrobudowa         EUR 13.42m
    Mamonowo road border crossing point                           Olsztyn                             Włocławek SA

    Modernisation of Storage Depot in              Feb 1, 2005    PKN ORLEN SA                        PBG SA                      PLN 45m
    Wrocław and Storage Depot in Nowa Sól

    Construction of the ”SASKA KĘPA II” floating   Jun 28, 2005   MPWiK of Warsaw                     PBG SA, Hydrobudowa         PLN 30.88m
    pumping station                                                                                   Włocławek SA

    Modernisation and extension of the fuel        Jun 30, 2005   NATO Investments Unit               PBG SA                      PLN 31.12m
    and lubricant inland depot in Cybowo

    Executing Biszcza natural gas plant            Oct 31, 2005   PGNiG SA                            PBG SA, Control Process     PLN 24.6m

    Executing Wilga natural gas plant              Oct 3, 2005    FX Energy Poland Sp. z o.o.         PBG S.A.                    PLN 19.87m

    Significant Running Contracts
                    Contract                      Signed                      Investor                 Contractor               Value

    Executing of floating pumping station and   Dec 22, 2005   MWiK Bydgoszcz                Hydrobudowa Włocławek SA,      EUR 13.99m
    wastewater collectors in Bydgoszcz                                                       WPPU Alfa Sp. z o.o., Zakład
                                                                                             Inst. Wod-Kan i C.O.

    Modernisation of sewage system in Gliwice   Nov 29, 2005   PWiK Gliwice                  Hydrobudowa Włocławek SA       EUR 4,76m

    Construction of barrage Malczyce on the     Feb 06, 2006   RZGW Wrocław                  PBG SA                         PLN 102,14 mln
    Odra river

    Modernisation and extension of the          April 2006     NATO Investments Unit         PBG SA                         PLN 20m
    fuel and lubricant inland depot in

    Construction of sewerage system and         June 2006      ZWiK of Szczecin (Municipal   KB GAZ S.A., Energopol-        EUR 22,5m
    water supply system for right riverbank                    Water and Sewage Company      Szczecin S.A. and Wiemer
                                                               of Szczecin)                  & Trachte AG
    of Szczecin

    Constructing of the sewage system in        June 2006      MPWiK Elbląg                  Hydrobudowa Włocławek          EUR 15,7m
    Elbląg                                                                                   SA, PBG, ABT, Pekum

    Construction of sewage system               June 2006      MPWiK Wrocław                 Hydrobudowa Wlocławek          EUR 22,8m
                                                                                             S.A., PBG S.A.

    Modernisation of wastewater treatment       June 2006      City of Poznan                Hydrobudowa 9, PBG S.A.        EUR 55m, (PBG
    plant, left bank of Poznan                                                                                              13,2)

    Nitrogen Removal Unit Grodzisk Wlkp.        Sept.2006      PGNiG                         PBG S.A., Chart Ind., TDE      PLN 120m

   Potential Market

   Natural gas
     PGNiG Group’s published investments plans for 2006–2008 – ca PLN 8.75bn,
      including ca PLN 3.6bn in exploration and production, ca PLN 2.35bn in
      transmission and ca PLN 2.45bn in distribution (source: PGNiG’s Issue Prospectus)
     Increase in domestic natural gas production from 4.3bn m3 in 2005 up to 5.5bn
      m3 in 2008
     Increase in the capacity of underground gas storage facilities from the current
      1.5bn m3 to at least 5bn m3 – including Ist stage of extension of the Underground
      Storage in Wierzchowice from 0.5bn m3 up to 1.5bn m3 (PLN 0.4bn)
     Diversification of natural gas supply sources, including plans providing for import
      of LNG beginning in 2010 (ca 5bn m³ per annum) – LNG onshore terminal (PLN
      2bn) and adaptation of Polish gas transmission network (PLN 0.5bn)
     Construction of pipeline interconnections between the Polish and foreign gas
      systems (Norway, Germany, Ukraine)
     „Poland’s Energy Policy until 2025” – growing share of natural gas (as an
      environment friendly fuel) through its use in the commercial power sector and

   Potential Market

  Crude oil
    Discovery of new deposits in Poland and the related plans for an increase in
     production from 0.6m tonnes to 1.4m tonnes per annum over the next 3 years –
     Lubiatow-Miedzychod-Grotow (LMG) crude oil plant (PLN 0.43m)
    Construction of the crude oil pipelines from the Ukraine to Poland (Adamów-Płock
     and Odessa-Brody)

  Environmental protection and hydro-engineering
    EU funds for Poland – EUR 4.5bn in 2004–2006 assigned mainly for water and
     wastewater installations
    New EU funds for 2007–2013 – EUR 56bn for Poland
    Funds assigned for flood protection improvement projects – increase in the
     capacity of storage reservoirs in Poland from ca 2bn m³ to ca 3.3bn m³,
     reconstruction of ca 1,000 km of embankments and river engineering (ca 4,000 km)
     - „Programme for the ODRA River 2006” – estimated total cost of main investment
     projects exceeds EUR 0.52bn

   Potential Market

  Fuel storage facilities
    NATO’s investments in Poland (2004-2007)total PLN 2bn, including PLN 0.7bn in fuel
     storage depots;
    Extension of PKN ORLEN’s and Naftobazy’s fuel storage depots.

  Foreign markets
    Extension of underground storages in Latvia and Hungary
    Increasing natural gas production in the Ukraine, modernisation and reconstruction
     of gas transmission network
    LNG installations and natural gas plants in Norway
    Cooperation with Foreign Partners (Wavin, TD Williamson, Pall Corporation, Thermo
     Design Engineering, Chart, Bergen Engineering, etc.);

   Significant Potential Contracts in 2006/07
                                              Contract                               Contract     Budget

    Modernisation and extension of the fuel and lubricant inland depot in Cybowo   October      PLN 250m

    LMG crude oil plant                                                            June 2007    PLN 430m

    LNG plant in Norway                                                            November     EUR 60m

    Wastewater treatment installation „Czajka” in Warsaw                           March 2007   EUR 261m

    Racibórz reservoir on the Odra river                                           November     PLN 650m

    Modernization of a sewage system in Mysłowice                                  Nov. 2006    EUR 58m

    Sewage system modernization in Warsaw                                          November     EUR 6m

    Modernization of the filters for the waterworks in Warsaw                      November     EUR 56m

    Underground Gas Storage in Wierzchowice                                        June 2007    PLN 400m

    Competitive Advantages

           Financial capabilities – banking and insurance limits exceeding PLN 0.5bn

           Execution capabilities – development through organic growth using EU subsidy and
         acquisitions, commissioning works to companies from the PBG Group who serve as
         subcontractors, thus allowing us to fully carry out contract terms and strictly keep to

           Narrow specialisation – delivery of specialised services in several areas: natural gas,
         crude oil, water and investments in modern technologies; recruitment and
         employment of highly educated workers

           Project management – budget-driven management, extensive use of IT tools,
         including integrated management systems, virtual document circulation, data
         warehouse, analytical programs

        Quality,   effectiveness and modernity

        PBG Group’s Development Strategy
        Increasing value through:

         Strengthening on the construction market and high specialisation in executing
        transmission and distribution installations for natural gas, crude oil and water
         Expansion in the area of specialised installations for natural gas and crude oil
        production and processing, as well as fuel depots for the army and the industrial
          Expansion in the area of specialised, sanitary and hydro-engineering systems
        (including design, construction and refurbishment);
         Acquisition of contractor companies, especially companies with niche
           Procurement of high-value contracts as the General Contractor;
           Procurement of contracts on the foreign markets;
           Implementation of new products and technologies.

        Thank you for your attention

                  Contact information:

               tel. (+4861) 665 17 00, 665 17 50
                     fax. (+4861) 665 17 01,

                            PBG SA
         ul. Skórzewska 35, Wysogotowo near Poznań
                     62-081 Przeźmierowo


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