Bp Plc · LSE:BP.
Bp — Q1 2021 Earnings Presentation
37 slides from Bp's earnings presentation, Apr 27, 2021
Slide 1: bp first quarter 2021 financial results presentation
bp first quarter 2021 financial results presentation 1Q 2021 financial results 1
Slide 2: Craig Marshall, SVP investor relations
Craig Marshall svp investor relations 1Q 2021 financial results Good morning everyone and welcome to bp’s first quarter 2021 results presentation. I’m here today with Bernard Looney, chief executive officer and Murray Auchincloss, chief financial officer. Before we begin today, let me draw your atte
Slide 3: Cautionary statement
Cautionary statement In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement: The discussion in this results announcement
Slide 4: Bernard Looney, Chief executive officer
Bernard Looney Chief executive officer 1Q 2021 financial results Thanks Craig. Good morning and welcome everyone, it’s great to have you join us today. As ever, I hope everyone is staying safe in what continues to be the most challenging of times. 4
Slide 5: Strong set of results, $35bn net debt target achieved, buybacks commencing
Strong set of results $35bn net debt target achieved buybacks commencing Disciplined strategic progress 1Q 2021 financial results Today we report our first quarter results – and it has been a strong quarter. We are making great progress right across the business, underpinned by our continued focus o
Slide 6: Net debt reduced by $5.6 billion, target of $35 billion achieved
As a result, net debt reduced by $5.6 billion, and we achieved our target of $35 billion during the quarter, around a year earlier than expected. We are commencing share buybacks during the second quarter starting with the intent to offset the full year dilution from employee share schemes. Murray w
Slide 7: Murray Auchincloss, Chief financial officer
Murray Auchincloss Chief financial officer 1Q 2021 financial results Thanks Bernard. 6
Slide 8: Environment
Environment Commodity prices $/bbl / $/mmBtu 1Q 2021 vs 4Q 2020 Brent RMM* Henry Hub RMM / Brent Henry Hub ▪ Average Brent price $61/bbl 38% higher ▪ bp’s average RMM* $8.70/bbl 47% higher ▪ Average Henry Hub1 price $3.50/mmBtu 40% higher Source: Platts - all data 1 January 2021 to 23 April 2021 (1)
Slide 9: 1Q21 underlying results summary
1Q21 underlying results summary $bn 1Q20 4Q20 1Q21 * 2.4 1.0 4.7 1Q 2021 vs 4Q 2020 Underlying RCPBIT Gas & low carbon energy 0.8 0.2 2.3 ▪ Exceptional gas marketing and Oil production & operations 0.9 0.6 1.6 trading performance Customers & products 0.9 0.1 0.7 * Rosneft (0.0) 0.3 0.4 Other busines
Slide 10: $35bn net debt target achieved
$35bn net debt target achieved 1Q21 cash inflows/outflows $bn ▪ $11.0bn cash inflow* ▪ $6.1bn operating cash flow ▪ $4.8bn disposal proceeds* ▪ $5.6bn net debt reduction ▪ $35bn net debt target achieved – $33.3bn at end-1Q21 ▪ $1.7bn surplus cash flow* at end-1Q21 ▪ Expect surplus cash flow deficit
Slide 11: Looking ahead to the second quarter, cash flow expectations
Looking ahead to the second quarter, we continue to expect cash flow to be impacted by: — The $1.2 billion pre-tax annual Gulf of Mexico oil spill payment; — Further severance payments associated with our reinvent programme; and — A smaller improvement in realised refining margins relative to the qu
Slide 12: Progressing to the next phase of our financial frame
Progressing to the next phase of our financial frame Phase 1 – delivered Phase 2 – clear hierarchy of priorities Resilient dividend 1 Resilient dividend Deleverage to $35bn net debt Strong investment 2 – target now retired grade credit rating Low carbon* and convenience and Low carbon* and convenien
Slide 13: Committed distributions – buybacks commencing in 2Q21
Committed distributions – buybacks commencing in 2Q21 2021 implementation 2021-25 average annual per share distributions* c/share ▪ Resilient dividend at 5.25 cents per share per quarter* Dividend Total buybacks* ▪ Share buybacks comprising two elements: ▪ Offset expected full-year dilution from emp
Slide 14: Bernard Looney, Chief executive officer
Bernard Looney Chief executive officer 1Q 2021 financial results Great, thanks Murray. As I mentioned earlier, in addition to driving performance of the business, we’ve been making disciplined progress in advancing our strategy. I thought it might be helpful to share some examples with you. Let me s
Slide 15: Delivering disciplined strategic progress
Delivering disciplined strategic progress Advanced offshore wind Partnerships with Growing high margin Continued roll-out EV transition strategy countries, cities oil and gas business in of strategic Castrol Strong hopper growth and industries expanded Gulf of Mexico convenience sites e-fluids launc
Slide 16: Hopper of offshore wind and solar opportunities increased
During the first quarter we increased our hopper of offshore wind and solar opportunities by 15 gigawatts, while continuing to high-grade – turning down projects that did not meet our strategic or returns requirements. Net to bp, our hopper now stands at 35 gigawatts of opportunities that could be p
Slide 17: Electrification in Europe
Electrification in Europe Rapidly scaling to provide the fastest, most convenient and reliable network of chargers Customers Convenience and mobility Success factors Roll-out of EV-only ultra-fast EBITDA* nearly charging hubs Potential future demand pool for doubling from ~$5bn Fast and convenient c
Slide 18: Aral retail sites and EV charging plans
Aral retail sites. We plan 500 ultra-fast charging points at our sites by the end of this year and we expect to capture significant integration value with our convenience offer. Third, we have recently signed a memorandum of understanding with Volkswagen Group to explore the expansion of ultra-fast
Slide 19: UK offshore wind
UK offshore wind Driving value through our distinctive capabilities and integration Why bp? UK offshore wind Low carbon ▪ Two 60 year ▪ 3GW gross electricity and Supply chain leases in the potential energy strategy Irish Sea Scale Project management ▪ Favourable shallow water location Capability − 3
Slide 20: Leveraging established offshore supply chain and experience
We plan to leverage our established offshore supply chain using our scale and experience to manage costs and supplier relationships, for example with turbine manufacturers; and Decades of offshore project management experience will help us plan and execute the projects efficiently. In the operationa
Slide 21: A single operating model
A single operating model Maximising value through efficiencies and integration We expect the single operating model to bp \solutions Significantly contribute Principles Sharing best practices across to $1.5bn cost savings our global portfolio to add value included in our $3-4bn Centralised and stand
Slide 22: Deploying compressor expertise and agile working
− We’ve deployed compressor expertise from the Whiting refinery to a construction yard in Mexico to support the commissioning plan for the Cassia Compression major project. And, looking to our low carbon businesses. In addition to leveraging our established supply chain and project management experi
Slide 23: Strong set of results, $35bn net debt target achieved, buybacks commencing
Strong set of results $35bn net debt target achieved buybacks commencing Disciplined strategic progress 1Q 2021 financial results So in summary – those are just three examples of our strategy in action – and they illustrate the momentum we see in our business. I hope they help you understand what an
Slide 24: Q&A
Q&A 1Q 2021 financial results
Slide 25: Appendix
Appendix 1Q 2021 financial results
Slide 26: Investor proposition
Investor proposition Resilient dividend of 5.25 cents per Committed share per quarter* distributions ≥60% surplus cash as share buybacks1 7-9% EBIDA* Profitable per share CAGR* growth Growing ROACE to 12-14%2 >20% capital Sustainable employed in transition3 value (1) At least 60% of surplus cash as
Slide 27: Guidance
Guidance Full year 2021 2Q21 vs 1Q21 Total capital ▪ Higher product demand across our customer businesses as ~$13bn expenditure restrictions begin to ease and vaccination rollouts continue DD&A Similar level to 2020 Gulf of Mexico oil ▪ This should help provide some support to industry refining ~$1b
Slide 28: Medium term financial frame
Medium term financial frame Reported upstream production lower than 2020 2.6mboed 2.4mboed ~2.0 mboed (ex. Rosneft) slightly higher underlying basis $19.4bn $14.1bn Capital expenditure ~$13bn $14-16bn $15.2bn ex. inorganic $12bn ex. inorganic Cash cost saving $3-4bn in 2023 N/A 12% reduction $2.5bn
Slide 29: 1Q 2021 summary
1Q 2021 summary $bn 1Q20 4Q20 1Q21 % Y-o-Y % Q-o-Q Gas & low carbon energy 0.8 0.2 2.3 Oil production & operations 0.9 0.6 1.6 Customers & products 0.9 0.1 0.7 Other businesses and corporate (0.4) (0.1) (0.2) * Underlying business RCPBIT 2.2 0.7 4.3 94% 489% * Rosneft (0.0) 0.3 0.4 Consolidation adj
Slide 30: Gas and low carbon energy
Gas and low carbon energy Production volume 1Q20 4Q20 1Q21 Underlying RCPBIT* $bn Liquids (mbd) 96 98 112 Natural gas (mmcfd) 4,665 4,049 4,623 Total hydrocarbons (mboed) 900 796 909 Realisations * 1Q20 4Q20 1Q21 Liquids ($/bbl) 45.70 36.51 55.38 Natural gas ($/mcf) 3.51 3.37 3.94 Total hydrocarbons
Slide 31: Gas and low carbon energy
Gas and low carbon energy Building scale and capability with capital discipline and a returns focus Developed to FID* and pipeline* Pipeline* Hopper* GW bp net By technology bp net bp net GW active projects an increase of 15GW from 4Q20 Developed to FID* and 30 projects developed to FID* pipeline* ~
Slide 32: Oil production and operations
Oil production and operations Production volume 1 1Q20 4Q20 1Q21 Underlying RCPBIT* $bn Liquids (mbd) 1,211 1,021 997 Natural gas (mmcfd) 2,723 1,962 1,810 Total hydrocarbons (mboed) 1,679 1,359 1,309 Realisations * 1Q20 4Q20 1Q21 Liquids ($/bbl) 47.64 38.58 52.92 Natural gas ($/mcf) 1.44 2.38 4.11
Slide 33: Customers and products
Customers and products Customers - convenience & mobility 1Q20 4Q20 1Q21 Underlying RCPBIT* $bn Customers - convenience & mobility EBITDA * 1.0 1.0 1.0 1 * Castrol EBITDA 0.2 0.3 0.4 Capital expenditure 0.3 0.4 0.3 2 bp retail sites - total 18,900 20,300 20,300 2 bp retail sites in growth markets 1,
Slide 34: Rosneft
Rosneft bp share of underlying net income* $bn bp share of Rosneft dividend* $bn Production volume 1 1Q20 4Q20 1Q21 Liquids (mbd) 916 876 827 Natural gas (mmcfd) 1,275 1,360 1,294 Total hydrocarbons (mboed) 1,136 1,111 1,050 1Q 2021 financial results (1) bp share of Rosneft production
Slide 35: Glossary
Glossary 1Q 2021 financial results
Slide 36: Glossary
Glossary 2021-25 average Dividend assumes 5.25 cents per ordinary share per quarter plus total Developed Total generating capacity for assets developed to FID by all entities where bp annual per share buyback expenditure divided by projected share count renewables to has an equity share (proportiona
Slide 37: Glossary
Glossary OB&C Other businesses and corporate Surplus cash Non-GAAP measure and refers to surplus of sources of cash, after reaching flow the $35 billion net debt target, including operating cash flow and divestment Pipeline Renewable pipeline includes projects that have achieved pre-set milestone an