BP plc · LSE:BP.
BP — FY2020 Earnings Presentation
29 slides from BP's earnings presentation, February 2021
Slide 1: bp fourth quarter and full year 2020 financial results presentation
bp fourth quarter and full year 2020 financial results presentation
Slide 2: Craig Marshall, SVP investor relations
Craig Marshall svp investor relations
Slide 3: Cautionary statement
Cautionary statement Forward-looking statements - 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 stat
Slide 4: Bernard Looney, chief executive officer
Bernard Looney chief executive officer
Slide 5: From IOC to IEC – a year in review
From IOC to IEC – a year in review Purpose, ambition, aims Core beliefs Reimagining energy for people The world will electrify, and our planet renewables a clear winner Become a net zero company by Customers will redefine mobility 2050 or sooner and help the world and convenience get to net zero; su
Slide 6: 2020 – responding to a challenging environment
2020 – responding to a challenging environment underlying replacement Continued focus on cost loss safety and emissions reductions underlying operating cash flow1 lower capital cash cost divestment and net expenditure2 reduction3 other proceeds debt4 (1) Underlying operating cash flow is net cash pr
Slide 7: 2020 – performing while transforming
2020 – performing while transforming strong operational and strategic delivery Alaska and Resilient and focused 4 Completion of Southern Gas ~20% ~7% petrochemicals divestment 96% 94% major project reduction in unit production refining plant hydrocarbons start-ups Corridor Upstream capex cost reduct
Slide 8: Murray Auchincloss, chief financial officer
Murray Auchincloss chief financial officer
Slide 9: Environment
Environment Commodity prices $/bbl / $/mmBtu 4Q 2020 vs 3Q 2020 Brent1 RMM2 Henry Hub1 RMM / Brent Henry Hub 80 21 ▪ Average Brent price $44/bbl 3% higher 18 60 15 12 ▪ bp’s average RMM2 $5.90/bbl 40 5% lower 9 6 20 ▪ Henry Hub price3 $2.70/mmBtu 3 ~35% higher 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 10: 4Q 2020 underlying results summary
4Q 2020 underlying results summary $bn 4Q19 3Q20 4Q20 4Q 2020 vs 3Q 2020 Underlying replacement cost profit 2.6 0.1 0.1 1 ▪ Lower marketing Underlying operating cash flow 7.6 5.3 2.4 performance with volumes Underlying RCPBIT2 under pressure due to COVID-19 Upstream 2.7 0.9 0.7 Downstream 1.4 0.6 0.
Slide 11: Cash flow and balance sheet
Cash flow and balance sheet 2020 cash inflows/outflows $bn 4Q 2020 highlights 28 Share buybacks 24 Lease payments3 ▪ Cash inflow5 of $1.3bn Working capital build Inorganic capex 20 Disposals1 16 Organic capex ▪ $4.2bn disposal proceeds1 12 8 Underlying operating cash flow2 ▪ Net debt falls to $38.9b
Slide 12: A resilient financial frame and business plan
A resilient financial frame and business plan Firm principles and priorities A coherent approach to capital A resilient balance sheet with A disciplined approach to allocation with a clear set of a strong investment grade investment with clear criteria priorities for the uses of cash credit rating a
Slide 13: Delivering a disciplined approach to expenditure
Delivering a disciplined approach to expenditure Cash capex1 $bn 25 20 ~40% reduction ▪ Expect ~$13bn capex in 2021 including 15 inorganics 10 5 ▪ Investment in future growth in low carbon electricity & energy and convenience & mobility 0 2014 2015 2016 2017 2018 2019 2020 2021 100 Total cash costs
Slide 14: Deleveraging supports committed distributions
Deleveraging supports committed distributions Net debt¹ $bn 50 40 ▪ Net debt reduced to $38.9bn at end-2020 30 ▪ Expect $4-6bn divestment and other proceeds in 2021 20 10 ▪ Expect to reach net debt target of $35bn around 4Q21– 0 1Q22 with oil price in the range of $45-50/bbl1 4Q19 1Q20 2Q20 3Q20 4Q2
Slide 15: Medium term financial frame
Medium term financial frame Upstream reported 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 16: Translating strategic themes to our new reporting structure
Translating strategic themes to our new reporting structure Oil production & Customers & Gas & low carbon Other business operations products energy & corporate including innovation & engineering Resilient and focused • Oil production • Refining • Gas production hydrocarbons¹ • Fuels (developed marke
Slide 17: Bernard Looney, chief executive officer
Bernard Looney chief executive officer
Slide 18: Resilient and focused hydrocarbons
Resilient and focused hydrocarbons growing EBITDA from a high-graded, higher margin portfolio Oil and gas production Oil, gas and refining unit EBITDA1,2% EBITDA1 $bn Completed divestments <$15/boe $15-30/boe >$30/boe 2.6mmboed ~2.0mmboed Planned divestments Oil and gas production 2H19-1H20 2025 2H1
Slide 19: Convenience and mobility
Convenience and mobility customer focused growth EBITDA1 growth $bn Customer touchpoints >10 11.5 >15 >20 per day (million) bp retail sites in 1,270 2,700 7,000 >8,000 growth markets2 Castrol revenues >6.5 5.4 ~7.5 >8.0 ($bn) COVID recovery Strategic >1,600 1,900 >2,300 >3,000 convenience sites2 EV
Slide 20: Low carbon electricity and energy
Low carbon electricity and energy building scale and capability with capital discipline and a returns focus Developed1 and pipeline Pipeline2 Hopper3 GW bp net by technology bp net 0.1 Solar Offshore wind 3.7 20% > GW active 0.8 projects 14.1 11GW net 6.3 80% > GW declined 3.1 3.3 opportunities in 4
Slide 21: Adding value through partnerships and integration
Adding value through partnerships and integration Clean energy Strategic partnership Amplifying value Growing portfolio ▪ Zaragoza province, Spain ▪ Lightsource bp ▪ Structured financing − Sourcing ▪ Recent acquisition ▪ 247MW across 5 solar plants − Developing ▪ De-risked by PPA of 1GW pipeline − C
Slide 22: Our investor proposition
Our investor proposition Resilient dividend of 5.25 cents per Committed share per quarter¹ distributions ≥60% surplus cash as share buybacks² 7-9% EBIDA³ Profitable per share CAGR⁴ growth Growing ROACE to 12-14%⁵ >20% capital Sustainable employed in transition⁶ value (1) Dividend per ordinary share
Slide 23: Q&A
Q&A Bernard Looney Murray Auchincloss Craig Marshall CEO CFO SVP IR Secret 23
Slide 24: Appendix
Appendix
Slide 25: Guidance
Guidance Full year 2021 1Q21 vs 4Q 2020 Upstream reported Lower than 2020 due to the impact of the ongoing Oil and gas production production (ex. Rosneft) divestment programme ▪ Slightly higher reported production Slightly higher than 2020 due to the ramp-up of major Upstream underlying1 projects, p
Slide 26: 4Q 2020 summary
4Q 2020 summary $bn 4Q19 3Q20 4Q20 % Y-o-Y % Q-o-Q Upstream 2.7 0.9 0.7 Downstream 1.4 0.6 0.1 Other businesses and corporate (0.3) (0.1) (0.1) 1 Underlying business RCPBIT 3.9 1.4 0.7 (81%) (47%) 2 Rosneft 0.4 (0.2) 0.3 Consolidation adjustment – unrealised profit in inventory 0.0 0.0 (0.1) 1 Under
Slide 27: Upstream
Upstream Volume mboed Underlying RCPBIT3 $bn Non-US US Total 4000 Group production1 4 2.7 1.9 2 0.9 0.7 3500 0 3000 Upstream production excluding Rosneft (2) 2500 (4) (6) 2000 (8.5) (8) 1500 (10) 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Realisations2 4Q19 3Q20 4Q20 4Q 2020 vs 3Q 2020 Liquid
Slide 28: Downstream
Downstream 96% Underlying RCPBIT2 $bn Refining 4Q19 3Q20 4Q20 Fuels Lubricants Petrochemicals Total environment Refining availability1 1.6 1.4 1.4 RMM ($/bbl) 12.4 6.2 5.9 3Q20: 96% 1.4 1.2 0.9 4Q 2020 vs 3Q 2020 1.0 0.8 0.6 ▪ Lower marketing performance, with volumes 0.6 remaining under pressure du
Slide 29: Rosneft
Rosneft bp share of underlying net income1 $bn bp share of Rosneft dividend2 $bn Dividend paid 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0.0 0.0 2018 2019 2020 (0.2) (0.4) 4Q19 1Q20 2Q20 3Q20 4Q20 1.1mmboed bp share of Rosneft production3 (1) On a replacement cost basis and adjusted for non-operating