Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — PKO BP Securities CEE Capital Markets Virtual Conference (March 2021)
64 slides from Omv Petrom Sa's conference presentation, March 2021
Slide 1: Capital Market Story
Capital Market Story March 2021 OMV Petrom S.A.
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form This presentation may contain forward-looking statements. These part of, and should not be construed as, constituting or forming part of, statements reflect the Company’s current knowledge and its any actual offe
Slide 3: Contents
Contents Investment proposition Strategy 2021+ Q4/20 and FY20 results review Swift reaction to market environment Outlook Appendix All figures throughout this presentation refer to OMV Petrom Group (herein after also referred to as “the Group”), unless otherwise stated. The financials represent OMV
Slide 4: Investment proposition
Investment proposition OMV Petrom S.A.
Slide 5: OMV Petrom’s Investment Proposition
OMV Petrom’s Investment Proposition Integrated oil and gas company Earnings resilience and High safety standards capital stewardship Strong cash conversion Cost efficiency and and attractive shareholder operational excellence return 5 | OMV Petrom Capital Market Story – March 2021
Slide 6: Operating in the integrated oil and gas sector
Operating in the integrated oil and gas sector Upstream Downstream Petrobrazi refinery, 4.5 mn t/yr capacity Romania 793 filling stations, operated via 2 brands: Petrom and OMV Production: 1P reserves: 5.0 mn t total refined product sales (thereof 2.6 mn t retail 51 mn boe 451 mn boe sales)
Slide 7: Shareholder structure and capital market environment
Shareholder structure and capital market environment OMV Petrom S.A. shareholder structure1 (%) 7% OMV2: Austria’s leading integrated international oil and gas company Fondul Proprietatea3: listed fund with ~78% of AUM invested4 in the energy sector 21% Romanian State, no special rights attached 51%
Slide 8: Attractive shareholders’ return
Attractive shareholders’ return Dividend Policy OMV Petrom S.A. is committed to deliver a competitive shareholder return throughout the business cycle, including paying a progressive dividend. We aim to increase our dividend each year or at least maintain it at the previous year’s level, in line wit
Slide 9: OMV Petrom – a sustainable choice for our stakeholders
OMV Petrom – a sustainable choice for our stakeholders Sustainability ▪ 5 pillars: HSSE, Carbon Efficiency, Innovation, Employees, strategy 2019-25 Business Principles and Social Responsibility ▪ Employees’ health and safety remain top priority Social ▪ Support for ~350 communities; EUR 13.5 mn inve
Slide 10: Sustainability Strategy 2025
Sustainability Strategy 2025 HSSE vision: “ZERO Harm – NO Losses” Zero work related fatalities Stabilize Lost-Time Injury Rate at below 0.3 Carbon efficiency Reduce OMV Petrom’s carbon intensity of operations by 27%1 until 2025 (vs. 2010) Phase out existing routine flaring and venting latest
Slide 11: Our HSSE vision: “ZERO Harm – NO Losses”
Our HSSE vision: “ZERO Harm – NO Losses” 2020 LTIR1 0.15 (2019: 0.31) Upstream: Asset Moesia, Asset Oltenia and Kazakhstan recorded ZERO LTI Asset Moesia achieved ~14 mn man-hours without LTI Downstream Oil: ZERO LTI for own employees 5 mn man-hours without LTI for own employees Downst
Slide 12: Investing to reduce the environmental impact
Investing to reduce the environmental impact GHG1 intensity: reduction by 25% in 2020 vs. 2010 CDP Climate Change score2: A- ISS ESG rating improved to C+, 1st decile rank3 Upstream: New compressor station 2 at Bustuchin to reduce energy consumption and GHG emissions Rerouting a section
Slide 13: Turning efficiency savings into cash flow
Turning efficiency savings into cash flow Clean CCS Operating Result margin1 (%) Clean CCS ROACE (%) 14.3 13.8 21 18 17 9.8 12 10 6.4 4.5 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Cash flow (RON bn) Net cash and Debt (RON bn) 1.2 2.0 1.6 1.4 0.5 7.4 6.8 6.0 5.6 4.5 7.0 7.5 5.6 4.0 -2.9 -2.4
Slide 14: Cost efficiency and operational excellence
Cost efficiency and operational excellence Total operating cost (RON mn) -116 Key drivers 2020 vs. 2019 Upstream: efficiency programs implemented led to cost base reduction by -3% Corporate Costs: -11% Headcount: -13% mainly as effect of outsourcing 2019 2020 projects Upstream Downstream Gas D
Slide 15: Strategy 2021+
Strategy 2021+ OMV Petrom S.A.
Slide 16: OMV Petrom’s strategic directions
OMV Petrom’s strategic directions Enhancing Developing growth Regional competitiveness options expansion ► Highest integration value ► Sustainability of the ► Selective investments in ► Operational excellence reserves base Upstream ► Exploration portfolio ► Regional gas player ► Improved recovery ►
Slide 17: Upstream strategic achievements 2017 - 2020
Upstream strategic achievements 2017 - 2020 ► ~11 USD/boe stabilized production cost despite production decline ► Neptun Deep concept selected and project maturation towards Final Investment Decision ► 28 marginal fields divested, additional 40 to be transferred in H1 2021 ► Simplified footprint, 7
Slide 18: Competitiveness and value extraction from Upstream core assets
Competitiveness and value extraction from Upstream core assets OPEX (USD/ boe) 11.7 Maintain strict cost and capital discipline 10.9 10.9 ~11 Maximize economic recovery by: Applying innovative IOR/ EOR2 techniques to maximize recovery Workovers and drilling programs 2016 2019 2020 2021 2022/
Slide 19: IOR/EOR projects to maximize economic recovery
IOR/ EOR1 projects to maximize economic recovery Polymer Flooding Surface Concept After primary and secondary recovery, typically a large amount of oil remains in the reservoir providing a significant potential for EOR methods Polymer flooding is applied to enhance the amount of oil that can be
Slide 20: Continued commitment to operational excellence in Upstream
Continued commitment to operational excellence in Upstream Increased MTBF1 (days) 950 810 ~840 737 555 Increase MTBF1 by focusing on root cause analysis, predictive maintenance 2016 2019 2020 2021 2022/23 2025 and identification of new technologies Increase degree of automation and Automated wel
Slide 21: Expand in Black Sea building on the exclusive offshore knowledge (1/2)
Expand in Black Sea building on the exclusive offshore knowledge (1/2) Romania – Neptun Deep OMV Petrom (50%), ExxonMobil (50%, Operator) Bulgaria – Han Asparuh OMV Petrom (42.86%), Total (57.14% Operator) Georgia – Block II Signing of Production Sharing Contract with the Georgian Government i
Slide 22: Expand in Black Sea building on the exclusive offshore knowledge (2/2)
Expand in Black Sea building on the exclusive offshore knowledge (2/2) Romania – Neptun Deep Bulgaria – Han Asparuh Georgia – Block II Domino-1 discovery in 2012 (first Acquisition of OMV Offshore Winning bidder of the international offshore deep water exploration well) Bulgaria GmbH, offering
Slide 23: Downstream Oil strategic achievements
Downstream Oil strategic achievements 2017-2020 4-5 years refinery turnaround cycle Fully modernized fuel storage network <8% Fuel & Loss in 2020 MyAuchan, first convenience store in a ~92% refinery utilization rate in 2020, filling station in Romania: contract signed to above European ave
Slide 24: High level of performance in Petrobrazi refinery
High level of performance in Petrobrazi refinery Utilization rate (%) 100 Focus on operational excellence 90 Improve refinery operations to international 80 benchmarks Maximize availability and utilization rates 2016 2019 2020 2021 2025 4-5 year turnaround cycle, limiting disruption of produ
Slide 25: Maximize Petrobrazi profitability and build a sustainable refining business
Maximize Petrobrazi profitability and build a sustainable refining business High-value products Explore selective petrochemicals opportunities Sustainable use of hydrocarbons to decrease carbon footprint Opportunity to increase profitability by capitalizing on refinery flexibility to adapt to
Slide 26: Leadership position in retail via dual brand strategy and partnerships
Leadership position in retail via dual brand strategy and partnerships Secure strong position on the retail market by clearly differentiating our two brands Increase throughput per Best value for money filling station in Romania Top quality leader (mn l) National brand, undisputed >5 Continue of
Slide 27: MyAuchan in Petrom, first convenience store in a filling station in Romania
MyAuchan in Petrom, first convenience store in a filling station in Romania Contract signed to expand the partnership to the entire Petrom branded filling stations. Roll- out to the 400 filling stations started in Q4 2020: shops in ~100 filling stations per year First opening in May 2017 17 prox
Slide 28: Downstream Gas strategic achievements
Downstream Gas strategic achievements 2017 - 2020 ► Strengthened leading position on the Romanian gas market ► 57 TWh record high gas sales volumes in 2020 ► Enlarged sourcing to extend supply portfolio ► 4.1 TWh record high Brazi power plant net electrical output in 2020 ► Result of the gas and pow
Slide 29: Consolidated position on the Romanian gas market
Consolidated position on the Romanian gas market Diversify gas Enhanced Origination and sales channels Portfolio management Gas sales in Romania (TWh) Sustainably preserve leading gas market 55.4 50.4 51.4 54.0 position 47.3 47.0 Diversify sales channels and portfolio structure Grow beyond equ
Slide 30: Gas and power operations in the neighboring markets
Gas and power operations in the neighboring markets Shift from domestic supplier to regional energy player leveraging market opportunities and existing business footprint Grow regionally with Neptun volumes monetization Transport capacities planned existing 30 | OMV Petrom Capital Market Story –
Slide 31: IMO 2020: OMV Petrom capitalized on market opportunities
IMO 20201: OMV Petrom capitalized on market opportunities despite challenging environment New sulfur limit (0.5%) imposed for ships: potential opportunity for refiners2 OMV Petrom’s flexibility and resilience proved in 2020: Entered Constanta market with new product: very low-sulfur MFO3 blend
Slide 32: Success built on three core strategic enablers
Success built on three core strategic enablers People & Technology & Sustainability Organizational Culture Innovation ► Supporting Business ► Digital Journey: Upstream ► Safety: ZERO Harm - NO Growth DigitUp; Downstream losses; Keep leading DigitalMotion; DigiCore position in Process Safety ► Leader
Slide 33: OMV Petrom Digital Journey: smart opportunities across the value chain
OMV Petrom Digital Journey: smart opportunities across the entire value chain Flagship digitalization program in Upstream Digital Rig of the future: automation, digital controls, automated workflows GeoWorkspace: remote access to all critical applications live in Romania Visual Inspection app:
Slide 34: Q4/20 and FY20 results review
Q4/20 and FY20 results review OMV Petrom S.A.
Slide 35: Economic environment
Economic environment Oil price (USD/bbl) and FX (RON/USD) OMV Petrom indicator refining margin (USD/bbl) 4.8 4.8 4.8 4.8 4.9 6.75 4.3 4.4 4.4 4.1 4.1 4.68 63.1 50.1 43.4 44.4 62.8 1.85 2.00 29.9 48.1 44.2 0.94 42.9 29.6 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Avg Urals price in U
Slide 36: Romanian environment
Romanian environment Fiscal and regulatory Macroeconomic environment framework Authorities’ reaction to COVID: GDP growth: State of alert prolonged until mid-February Q4/201: -1.7% yoy; 20201: -3.9% yoy Vaccination program ongoing 2021e2: +3.8% yoy Health and social, fiscal and monetary me
Slide 37: Key messages Q4/20
Key messages Q4/20 performance Clean CCS Operating Cash Clean CCS Dividend Financial Operating result Flow ROACE proposal 1 RON 0.5 bn RON 1.2 bn 6.4% RON 1.8 bn Managed crisis with no business interruptions, good net working capital and asset utilization Operational highlights Upstream Natural de
Slide 38: Operational KPIs
Operational KPIs Upstream Downstream Oil Downstream Gas Hydrocarbon production Refinery utilization rate Gas sales volumes (kboe/d) (%) (TWh) -8% -2% -2% 0% 152 150 147 141 140 98 -33% -10% 96 96 19.85 18.61 72 72 71 69 67 13.06 12.11 13.25 89 80 79 76 73 73 86 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1
Slide 39: CAPEX and E&A
CAPEX and E&A Organic CAPEX Group organic CAPEX* 2020 at RON 3.0 bn: (RON bn) 63 new wells and sidetracks 830 workovers -28% -28% Securing long-term logistic access to Petrobrazi refinery 4.2 Bio-compliance blending project -4% -4% 3.0 2021E at RON ~2.9 bn: 2.9 Wells and sidetracks: up
Slide 40: Income Statement highlights
Income Statement highlights Clean CCS Operating Result (RON bn) Q4/20 Clean CCS Operating Result reflects: -50% 4.57 ► Lower oil and gas prices -58% 2.29 ► Weak refining margin 1.12 0.47 ► Decreased fuel sales volumes partially offset by solid margins Q4/19 Q4/20 2019 2020 Co&O and Cons Downstream
Slide 41: Clean CCS Operating Result
Clean CCS Operating Result Upstream (RON mn) Lower oil and gas prices 700 Hydrocarbon sales -7% -653 Lower clean exploration expenses 26 -103 19 64 Ongoing cost optimization Q4/19 Market Volume Exploration Other Q4/20 effects Lower depreciation Downstream (RON mn) Significantly stronger
Slide 42: Clean CCS Operating Result
Clean CCS Operating Result Upstream (RON mn) 2,845 Lower oil and gas prices One-off positive effect in Q1/19 -2,872 7 Lower clean exploration expenses -183 123 95 2019 Market Volume Exploration Other 2020 Ongoing cost optimization effects Downstream (RON mn) Significantly stronger power pe
Slide 43: Cash Flow highlights
Cash Flow highlights Cash Flow from Operating Activities (RON bn) -18% 6.8 5.6 -30% 7.1 4.6 Q4/20 CFO: lower decrease than Operating Result due 1.8 1.2 0.2 to improved net working capital 1.8 1.0 1.0 -0.3 -0.1 Q4/19 Q4/20 2019 2020 Sources of funds Net Working Capital Free Cash Flow 1 (RON bn) -26
Slide 44: Swift reaction to market environment
Swift reaction to market environment OMV Petrom S.A.
Slide 45: OMV Petrom continues to promptly manage COVID-19 crisis
OMV Petrom continues to promptly manage COVID-19 crisis Ability to cope with challenges ► Proven track record in managing economic crises ► Integrated business model supports financial results ► Resilience in highly volatile market, underpinned by business optimization and strict cost discipline ► 2
Slide 46: Strong response to adjust to the weak market environment
Strong response to adjust to the weak market environment Planned reductions of Targets achieved ~RON 2.0 bn (2020 vs. 2019) ✓ ▪ Rephased and optimized long-term delivery projects ▪ Cut of non-committed CAPEX RON 1.2 bn1 Reduced ▪ Decrease by >30% of number of wells drilled (30%)2, 3 CAPEX ▪ Decrease
Slide 47: Prepared to cope with challenges
Prepared to cope with challenges Net Debt/(Cash) (RON bn) 1.3 40 Strong balance sheet -0.2 -2.9 No gearing -4.9 -6.0 -6.5 2015 2016 2017 2018 2019 2020 Group’s Clean CCS Operating Result breakdown (RON bn) 71 64 Integrated business model supports financial 54 results 52 44 4.8 4.6 42 3.3 2.5 2
Slide 48: Outlook
Outlook ert res OMV Petrom S.A. @ OMV Petrom The energy for a better life.
Slide 49: Sensitivities in 2021
Sensitivities in 2021 OMV Petrom Group main sensitivities Operating Result impact Brent oil price USD +1/bbl ~EUR +20 mn Equity gas price EUR +1/MWh ~EUR +20 mn OMV Petrom indicator refining margin USD +1/bbl ~EUR +25 mn USD appreciation by 5 USD Exchange rates (EUR/USD) ~EUR +35 mn cents 49 | OMV P
Slide 50: Outlook
Outlook Assumptions/Targets Assumptions/Targets Indicators Actual 2020 2021 2022-2023 averages Brent oil price USD 41.84/bbl USD 50-55/bbl USD 60/bbl Production 145 kboe/d Decline ~5% yoy1 Decline ~5% yoy1 Refining margin USD 2.9/bbl >USD 4/bbl USD ~5/bbl CAPEX2 RON 3.0 bn RON ~2.9 bn RON ~3.8 bn FC
Slide 51: Upstream KPIs
Upstream KPIs OPEX1 Key drivers 2020 vs. 2019 (USD/boe) -0% 0% 11.69 11.18 10.90 10.90 10.88 OPEX in USD/boe terms stabilized: Ongoing cost optimization Lower production available for sale 2016 2017 2018 2019 2020 Hydrocarbon production Total Upstream production -5%, due to: (kboe/d) Natural d
Slide 52: Downstream Oil KPIs
Downstream Oil KPIs OMV Petrom Indicator refining margin Key drivers 2020 vs. 2019 (USD/bbl) 7.75 6.98 Refining margin -38% due to lower products 6.28 -38% -38% 4.67 spreads 2.89 2016 2017 2018 2019 2020 Retail sales volumes (mn t) and Retail Operating Result per filling station (trend) -8% -8% 2.
Slide 53: Downstream Gas KPIs
Downstream Gas KPIs Gas sales volumes Key drivers 2020 vs. 2019 (TWh) +4% +4% 54.84 57.03 50.36 51.40 47.32 Record high gas sales volumes, built on third party acquisitions Gas sales to regulated market in H1/20: 6.97 TWh 2016 2017 2018 2019 2020 Net electrical output (TWh) +23% +23% 4.17 Reco
Slide 54: Appendix
Appendix ert res OMV Petrom S.A. @ OMV Petrom The energy for a better life.
Slide 55: Upstream Romania map
Upstream Romania map 1 55 | OMV Petrom Capital Market Story – March 2021
Slide 56: Romanian oil market overview in 2020
Romanian oil market overview in 2020 Supply IMPORTS: 67% 33% PRODUCTION various TRANSPORTATION: Conpet Refineries (combined nameplate capacity ~13 mn tpa) 70% 30% processed crude oil ~10.31 mn tpa (of which ~6.8 mn t from Refineries import) Petroleum Products Imports Petrobrazi Rompetrol (Petromidia
Slide 57: OMV Petrom Group fuel retail sales (mn l)
OMV Petrom Group fuel retail sales (mn l) 117 117 120 105 97 77 2016 17 18 19 2020 2,922 2,746 2,573 2,746 2,798 Republic of Romania Moldova Serbia 2016 17 18 19 2020 172 170 171 175 158 402 147 Bulgaria Black Sea 342 328 318 312 243 2016 17 18 19 2020 63 2016 17 18 19 2020 93 Total number of fillin
Slide 58: Romanian gas market overview in 2020
Romanian gas market overview in 2020 Regula- Regulatory Body tory Romanian Energy Regulatory Authority (ANRE) IMPORTS: various 18% 82% PRODUCTION: , Romgaz, … STORAGE: Supply TRANSPORTATION: Transgaz Romgaz, Depomures, Amgaz SUPPLY: , Romgaz, Engie Romania, E.ON Energie Romania, ... Distribu- tion D
Slide 59: Romanian power market overview in 2020
Romanian power market overview in 2020 Regulatory Regulatory Body Romanian Energy Regulatory Authority (ANRE) Coal Gas Nuclear Hydro Renewables Supply Production Imports 17% 18% 21% 28% 16% Transport & Distribution System Operator (TSO&DSO) Market(s) Ancillary services & Mid/long term fwd market(s)
Slide 60: Cash flow Statement
Cash flow Statement RON mn 2016 2017 2018 2019 2020 Cash flow from operating activities (CFO) 4,454 5,954 7,385 6,803 5,556 Thereof, Change in net working capital -27 -199 32 -256 964 (NWC) Cash flow from investing activities (CFI) -2,896 -2,446 -4,261 -3,556 -3,163 Cash flow from financing activiti
Slide 61: Income Statement
Income Statement RON mn 2016 2017 2018 2019 2020 Sales1 16,647 19,435 22,523 25,485 19,717 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 Thereof Upstream 575 1,674 3,224 2,845 7 Downstream Oil 1,112 1,533 1,335 1,501 1,454 Downstream Gas 11 220 360 282 718 Corporate and Other -62 -74 -87
Slide 62: Operating Result
Operating Result RON mn 2016 2017 2018 2019 2020 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 Thereof Upstream 575 1,674 3,224 2,845 7 Downstream Oil 1,112 1,533 1,335 1,501 1,454 Downstream Gas 11 220 360 282 718 Corporate and Other -62 -74 -87 -89 -84 Consolidation 65 -80 -28 34 193 Op
Slide 63: Key financial indicators (consolidated) – restated
Key financial indicators (consolidated) – restated1 in RON mn 2016 2017 2018 2019 2020 Q1/20 Q2/20 Q3/20 Q4/20 Sales 16,647 19,435 22,523 25,485 19,717 6,086 3,984 5,053 4,595 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 975 276 570 467 2 Operating Result 1,476 3,270 5,213 4,245 1,467 83
Slide 64: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations Tel: +40 372 161 930 E-mail: investor.relations.petrom@petrom.com Homepage: www.omvpetrom.com 2021 Financial Calendar April 27: Annual General Meeting of Shareholders April 29: Q1 2021 results July 28: Q2 2021 results October 29: Q3 2021 resul
OMV Petrom — PKO BP Securities CEE Capital Markets Virtual Conference (March 2021) on 6ix