Repsol Sa · BME:REP
Repsol Sa — Q4 2023 Earnings Presentation
72 slides from Repsol Sa's earnings presentation, Feb 22, 2024
Slide 1: Repsol Strategic Update 2024-2027: Evolving from our strengths
Repsol Strategic Update 2024-2027 Evolving from our strengths Growing sustainable returns
Slide 2: Disclaimer
ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2024 This document contains information and statements that constitute forward-looking statements about Repsol. Such estimates or projections may include statements about current plans, objectives and expectations, including statements regarding trends affectin
Slide 3: Index
Strategic Update 2024-27 Index 01 4Q & FY2023 Results 02 Delivery 2021-2023 03 Strategic Update 2024-2027 04 Leading investment proposition 2
Slide 4: 4Q & FY2023 Results
Strategic Update 2024-27 4Q & FY2023 Results 01 3
Slide 5: Market Environment
Market Environment Supportive commodity price scenario and resilient refining environment Brent Henry Hub $/bbl $/Mbtu 101 89 81 87 84 83 78 6.6 6.3 3.4 2.9 2.5 2.7 2.1 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Repsol’s Refining Margin Indicator Exchange Rate $/bbl $/€ 1.
Slide 6: Upstream
Upstream Focus on development of growth projects and portfolio transformation Adjusted Income • 554 M€ in 4Q23: -7% vs. 4Q22 Lower realization prices partially offset by higher production and lower taxes • 1.8 B€ in 2023: -41% vs. 2022 Production Production kboed • 595 kboed in 4Q23: +8% vs. 4Q22 55
Slide 7: Industrial
Industrial Strong refining environment supported by products spreads Adjusted Income • 561 M€ in 4Q23: -51% vs. 4Q22. Lower results in Refining and Wholesale & Gas Trading • 2.7 B€ in 2023: -16% vs. 2022. Lower contribution of Refining and Chemicals Refining Chemicals FY23 margins benefited from str
Slide 8: Customer
Customer Successful multi-energy strategy supports record EBITDA levels in 2023 Adjusted income • 102 M€ in 4Q23: -36% vs. 4Q22. Lower direct sales and lower margins in LPG and Retail Power & Gas • 614 M€ in 2023: +46% vs. 2022. Driven by Mobility business Record EBITDA in 2023 • Multi-energy strate
Slide 9: Low Carbon Generation
Low Carbon Generation Focus on project delivery and portfolio rotation Adjusted Income Adjusted Income • 16 M€ in 4Q23: +129% vs 4Q22. Higher renewable generation partially offset by lower contribution of CCGT’s and a lower pool price • 75 M€ in 2023: -48% vs. 2022. Higher production in wind and sol
Slide 10: 4Q & FY23 Results
Financial results 4Q & FY23 Results Results (€ Million) 4Q23 3Q23 4Q22 FY23 FY22 Upstream 554 341 598 1,779 3,029 Industrial 561 550 1,152 2,734 3,241 Customer 102 190 160 614 421 Low Carbon Generation 16 13 7 75 144 Corporate and others (38) 4 122 (191) (61) Adjusted Income 1,195 1,098 2,039 5,011
Slide 11: Key messages of 2023
Key messages of 2023 Strong financial position and delivering on shareholder remuneration commitments Solid results and cash generation in 2023 • Adjusted income of 5 B€ supported by strong operational performance in all business divisions • CFFO of 7.1 B€ aligned with latest guidance. Second- 5.0 B
Slide 12: Delivery 2021-2023
Strategic Update 2024-27 Delivery 2021-2023 02 11
Slide 13: Repsol performance under SP 21-25
Delivery 2021-2023 Repsol performance under SP 21-25 21.4 B€ 14.2 B€ -4.7 B€ 3.6 €/sh CFFO 2021-23 Adjusted Income Net debt reduction Average EPS 2021-23 2021-23 EOY ‘20 - EOY ‘23 (2.1 B€ Net debt EOY '23) 6.2 B€ 310 M 13.4 B€ Gross Capex 2021-23 32% Share Low Carbon Shareholder distributions Shares
Slide 14: Exceeding the financial targets set in SP 21-25
Delivery 2021-2023 Exceeding the financial targets set in SP 21-25 Sources and uses of cash 2021-23 B€ 27.8 27.8 Exceeding the financial targets we set in the SP 21-25 Sale 25% stakes in for 2021-23 Repsol Upstream 4.2 4.7 Net debt reduction & LCG, and others1 • CFFO: 7.1 B€/y (actual) vs. 5.6 B€/y
Slide 15: Highlights: Intense activity across our portfolio
Highlights Intense activity across our portfolio to deliver on our strategy Selected milestones FID taken: • Bilbao e-fuels pilot and 10 MW electrolyzer • Start of P&G retail Startup: Portugal • Bilbao H2 pilot FID taken: • Reciclex FID taken: • Puertollano HVO Retrofit • Growth in P&G retail (+1.1
Slide 16: Highlights: Intense activity across our portfolio
Highlights Intense activity across our portfolio to deliver on our strategy Selected milestones Start-up: FIDs: • Yme-Norway (2021) • Marcellus, Eagleford phases 1, 2, 3 • Leon and Castile, Monument (GOM) • Alaska Pikka phase 1 Full control Divestment: Start-up: Repsol UK (2023) • Russia (2022) • Sh
Slide 17: Outstanding progress in SP 21-25 operational targets
Delivery 2021-2023 Outstanding progress in SP 21-25 operational targets 2023 SP 21-25 targets Progress Upstream Upstream production 21-23 avg: 573 kboed 21-25 avg: ~650 kboed Renewable fuels capacity 1.0 Mton 2025: 1.3 Mton Industrial Green H2 capacity 2.5 MW pilot 20251: 0.55 GWeq P&G: 2.2 M 2025:
Slide 18: Strategic Update 2024-2027
Strategic Update 2024-27 Strategic Update 2024-2027 03 17
Slide 19: Positive fundamentals outlook for our businesses
Macro Positive fundamentals outlook for our businesses Shifting balance on Growing energy demand Opportunities in Energy Central scenario Energy Trilemma and resilient prices transition & decarbonization '24 '25-'271 Brent ($/bbl) 80 70 • Increasing balance across • Long term secular growth in • Pos
Slide 20: Facing changing Energy Transition from a position of strength
Facing changing Energy Transition from a position of strength Leveraging our unique strengths ... ...with a bold approach to the Energy Transition • World class industrial assets • Energy mix diversification and lower carbon • Leading markets shares in our core markets • Balanced geographical footpr
Slide 21: Strategic pillars for our journey to thrive in Energy Transition
Strategic pillars for our ambitious journey to thrive in Energy Transition Towards Net Zero emissions Leading investor proposition 6 1 • Decarbonization pathway • Committed increasing on-track shareholder distributions • Strong balance sheet Fit-for-purpose corporate Advantaged and sustainable model
Slide 22: Capital allocation targets
1. Leading investor proposition Enterprise Capital Allocation framework 2024-27 with priority to shareholder pay-outs 1 25-35 % CFFO distributions Enhanced and committed shareholder distributions • Dividends + SBB: 25-35% CFFO • Total dividend growth: +3% p.a. • 2024 DPS: 0.9€/share (+30% vs. 2023)
Slide 23: Attractive and committed growing dividend proposal
1. Leading investor proposition Attractive and committed growing dividend proposal: Up to 10 B€ in total distributions Cash dividend commitment 1 Distributions policy +3% p.a. 1,162 1,197 Financial guidelines 24-27 • Increase dividend in 2024 to 1,095 1,128 €0.90 DPS 1.100 +22% – +30% growth vs. 202
Slide 24: Net capex 16-19 B€ in 2024-27
1. Leading investor proposition Net capex 16-19 B€ in 2024-27 to address the opportunities offered by our portfolio and Energy Transition 1 Net capex 16-19 B€ depending on macro scenario Active portfolio rotation to optimize capital and opportunity development deployment and finance new investment N
Slide 25: Well-defined strategic priorities across the portfolio
2. Advantaged and sustainable portfolio Well-defined strategic priorities across the portfolio 2 Upgrade Create advantaged Leverage Iberian stronghold Upstream portfolio low carbon platforms across energy chains Upstream: Yield and Industrial: Yield and Customer: Yield and LCG: Grow upgrade portfoli
Slide 26: Leveraging integration advantage across OECD focused portfolio
2. Advantaged and sustainable portfolio Leveraging integration advantage across OECD focused portfolio (~90% CE in 2030) 2 Iberia Hinterland USA Vertical integration in Iberia, 2023 Key integration advantages in our conventional businesses and new Industrial LC platforms 70% conventional1 • Diversif
Slide 27: Investment profile aligned with portfolio transformation
2. Advantaged and sustainable portfolio Investment profile aligned with portfolio transformation on an attractive opportunity set 2 Business Net capex breakdown 2024-2027 Net Capex 3-4 16-19 IRR hurdles Low Carbon 2.0-2.2 15-25% >10%1 15-25% B€ Other Low Carbon3 2-3 12-14% >12% >35% 55-65% 15-25% LC
Slide 28: Capital allocation across businesses aligned with strategic intent
2. Advantaged and sustainable portfolio Capital allocation across businesses aligned with strategic intent Industrial Conventional 2 2024-27 FCF1 B€ 8 4.9/5.2 B€ FCF 2024-27 6 Customer FCF 4 1.9/2.1 B€ generating FCF 2024-27 Upstream business 2 5.2/6.2 B€ FCF 2024-27 0 Industrial LCB Growth -1.0/0.0
Slide 29: A more sustainable, resilient and profitable company
3. More profits, greater return on capital A more sustainable, resilient and profitable company 3 An evolving portfolio footprint with ... with strong cash flow growth… ... and generating solid returns advantaged business platforms… Capital Employed CFFO Adjusted income B€ B€ B€ ~8 4,4 5% 37-40 6.4
Slide 30: Building low carbon business platforms with strong right-to-win
4. Capital discipline Building low carbon business platforms with strong right-to-win and attractive returns 4 Core business LCG crystalizing value advantage creation in short time-frame Achieving attractive rate of Low carbon industrial Key figures at 25% equity sale in 2022 return on LCG projects
Slide 31: Capital framework ensuring resilient distributions
4. Capital discipline Capital framework ensuring resilient distributions with attractive upside 4 Enhanced and committed shareholder Central scenario distributions Lower scenario • 25-35% CFFO Sources and uses of cash 2024-27 • Committed 4.6 B€ cash dividend Sources and uses of cash 2024-27 B€ 31-33
Slide 32: Commitment to our Net Zero path
6. Towards Net Zero emissions Commitment to our Net Zero path with firm short-term targets 6 Carbon intensity indicator reduction targets gCO2/MJ reduction, % • Net zero absolute emissions (Scope 1+2) by 2050 MtCO2e, % -42% 2016 2025 2030 2040 2050 25.4 -55% 22.8 0% -12% -100% 14.8 11.4 -25% Net0.0
Slide 33: Strategic priorities
Strategic priorities Upstream Industrial Customer Low carbon generation Yield and Upgrade Yield & Develop LC Yield and Scale-up Grow advantaged portfolio platforms multi-energy platform Corporate strategic enablers 32
Slide 34: Upstream: International portfolio in world class basins
Upstream International portfolio of positions in world class basins Key metrics (2023) Repsol Upstream geographies Production1 Operated Exposure to top North Strong operated North ~600 kboed ~50% American plays Sea portfolio Unc.1: 200 kboed Conv: 18 kboed 48 kboed Unconv.1 Conventional 200 kboed 40
Slide 35: Strong progress against SP 21-25 objectives
Upstream Strong progress against the different objectives set out in the SP 21-25 Strong Free Cash Flow generation c.75% CO2 emission reduction FCF 21-23 Carbon Intensity B€ kgCO2/boe +180% 7.5 >60 -75% 2.7 <15 FCF 21-23 SP Total FCF 21-23 2016 2023 FCF as key priority Tier 1 CO2 emissions Key proje
Slide 36: Repsol Upstream main strategic lines 24-27
Upstream Repsol Upstream main strategic lines 24-27 Unconventionals Conventionals Low Carbon Solutions Reduce breakeven and gain scale Produce higher margin / Reduce emissions and build lower carbon barrels a focused business • Increase operated production • Deliver safely key projects in • Accelera
Slide 37: Unconventionals: investing 2.2 B€
Upstream Unconventionals - Investing 2.2 B€ in an increasingly core business platform for Repsol Positive track record of production growth and breakeven1 Plan to deploy c. 2.2 B€ in unconventionals in 2024-27 Production2 Marcellus kboed CAGR: +36% 180-200 182 Eagle Ford 50-60 Eagle Ford 63 Capex 24
Slide 38: Conventionals: attractive projects bringing new production
Upstream Conventionals - Attractive projects bringing material new production and high-margin barrels Alaska Pikka (USA) Main conventional projects • WI: 49% • Capex 24-27 = 1.1 B€ • FO = 2026 Monument (USA) 2027 2030 • WI: 20% Leon/Castile (USA) • Prod 2027: 32 kboed • WI: 50% (Leon) / 36% (Castile
Slide 39: Deep-dive into key development projects
Upstream Deep-dive into key development projects in the portfolio BMC 33 Alaska Pikka Leon/Castile B29 Polok/Chinwol Largest pre-salt discovery One of the largest discoveries A strategic discovery in Future growth and potential in the Campos basin in US onshore the Gulf of Mexico basin consolidator
Slide 40: Portfolio management: upgrading and focusing portfolio
Upstream Portfolio management - Upgrading and focusing portfolio to reinforce positioning as leading International Independent Key goals for Repsol Upstream Repsol Upstream focusing portfolio on core growth areas portfolio management 24-27 • Active management of optionalities for portfolio upgrade a
Slide 41: Upstream main targets 24-27
Upstream Main targets 24-27 EIG valuation $19 B Potential listing event Transformation 2026-2027 2023 Value growth, project delivery and decarbonization Attractive Cash Flow Disciplined Capital Allocation De-carbonization CFFO CFFO/boe B€ $/boe kgCO2/boe -33% +15% <15 +30% 3.3 2.9 18.5 ~10 14.2 2023
Slide 42: Strategic priorities
Strategic priorities Upstream Industrial Customer Low carbon generation Yield and Upgrade Yield & Develop LC Yield and Scale-up Grow advantaged portfolio platforms multi-energy platform Corporate strategic enablers 41
Slide 43: Highly competitive industrial system
Industrial Highly competitive industrial system with strong economic and sustainability performance Ongoing Low Carbon World-class assets Strong performance transformation Scope 1&2 CO2 Low Carbon • Leading position in EU refining benchmarking CFFO Avg. 21-23 FCF Avg. 21-23 reduced 2025 Fuels 2025 B
Slide 44: Industrial strategic lines 24-27
Industrial Strategic lines 24-27: Building resilience in premium assets and delivering new business platforms Maximize the level of profitable activity Develop renewable fuels hubs 1 Reduce the 2 New role of 3 Transform 4 Leading 4+ Potential to breakeven (B/E1) Trading current renewable expand and
Slide 45: Improving competitiveness across conventional businesses
Industrial Improving competitiveness across the conventional businesses Reduce Refining and Chemicals breakeven New role of Trading driving returns growth 01 and decarbonize operations 02 and protecting refining utilization Trading & WGT EBIT B/E2 reduction targets -1.1 $/bbl -26 €/t 2024-2027 +20%
Slide 46: Focused technology roadmap in Industrial Low Carbon
Industrial Leveraging Repsol sites to develop profitable transformational projects and leading renewable platforms Subject to fiscal and regulatory framework A focused technology roadmap in Industrial Low Carbon business… …with a highly attractive project pipeline Fuels platform Strategic rationale
Slide 47: Attractive economics for low carbon business
Industrial Attractive economics for low carbon business with strong synergies with conventional business Examples C43 plant in Cartagena Electrolyzer in Tarragona Commercial operation date: 2024 Commercial operation date: 2027 Integrated lipidic biofuel capacity to fulfil renewable middle Leveraging
Slide 48: Industrial main targets 2024-2027
Industrial Main targets 2024-2027 Growing cash flow generation Disciplined capex LCB growth CFFO Net Capex '24-27 2023 2027 2030 Industrial 2.4-2.7 B€ B€ Renewable Conventional fuels capacity 3.1 1.5-1.7 x1.25 Mta3 0.6 3.0-3.3 1.0 2.2-2.4 US 2.5 Iberia 5.5-6.8 1.8-2.4 Net Capex Renewable4 H2 2.5 2.5
Slide 49: Strategic priorities
Strategic priorities Upstream Industrial Customer Low carbon generation Yield and Upgrade Yield & Develop LC Yield and Scale-up Grow advantaged portfolio platforms multi-energy platform Corporate strategic enablers 48
Slide 50: Leading energy retailer in Iberian peninsula
Customer The leading energy retailer in Iberian peninsula with performing business and growth track record P&G customers Digital customers ~20% share Leading of Energy retail Million Million market shares: market in Spain Mobility, LPG, CFFO1 x2.2 x4.2 7.9 & Portugal Lubes, etc M€ 2.2 +10% 1.0 1.9 9
Slide 51: Customer strategic lines 24-27
Customer Strategic lines 24-27: transforming our business to thrive in an evolving margin pool Scale new business platforms Build multi-energy • e-Mobility advantage • Distributed Generation Strengthen • Power and Gas • Lubes international Retail growth growth core business • • New businesses Transf
Slide 52: Proven capacity to develop innovative business models
Customer Proven capacity to develop innovative business models that drive growth and advantage Waylet: Success story with major Repsol Customer business is the fastest growing impact on Customer business power retailer in Iberia with an innovative approach Successful combination of inorganic build u
Slide 53: Customer main targets 2024-2027
Customer Main targets 2024-2027 Growing cash flow generation Strengthening core business Thriving in multi-energy and growing in low carbon CFFO Non-oil margin P&G Retail customers Multi-energy Service Stations B€ 1.2 M€ 177 M# 3.5 - 4.0 % 60% x1.3 x1.3 0.9 142 x1.8 x1.7 2.2 36% 2023 2027 2023 2027
Slide 54: Strategic priorities
Strategic priorities Upstream Industrial Customer Low carbon generation Yield and Upgrade Yield & Develop LC Yield and Scale-up Grow advantaged portfolio platforms multi-energy platform Corporate strategic enablers 53
Slide 55: Successful progress in LCG strategic milestones
LCG Successful progress in LCG strategic milestones Fast growth of a sizeable Generate higher value and diversified portfolio Grow RES Consolidated Built Projects PPAs Partner Built a strong asset base in attractive intl. diversified RES developed with signed and onboard and high operation RES platf
Slide 56: Main strategic lines for 2024-2027
LCG Main strategic lines for 2024-2027 Maximize CCGTs profit & USA RES monetize group gas 9-10 capacity Iberia GW 3-4 • Maximize energy mgmt. and 2027 GW optimization (forward, spot, restrictions, real time) 4-5 GW Installed capacity breakdown Build US platform 8% 1% 5% • Accelerate Italian 15% pres
Slide 57: Optimizing financial structure through portfolio rotation
LCG Optimizing financial structure and returns through systematic portfolio rotation LCG business models adapted From LCG Capex to Repsol's LCG CE evolution to the geography net financial exposure 24-27 illustrative exposure by geography1 Cumulated 2024-27 Capex LCG Capital Employed 50% B€ B€ 8-9 8.
Slide 58: LCG main targets 24-27
LCG Main targets 2024-27 Operating capacity growth Disciplined Capital Allocation Increasing results RES capacity CFFO Hydro GW B€ 0.4 9-10 x4 x3.5 3-4 B€ Net Capex '24-'27 Wind 0.1 Solar 2.8 2023 2027 Equity IRR target >10% 2023 2027 -1.7 / -2.7 B€ FCF 24-27 57
Slide 59: Strategic priorities
Strategic priorities Upstream Industrial Customer Low carbon generation Yield and Upgrade Yield & Develop LC Yield and Scale-up Grow advantaged portfolio platforms multi-energy platform Corporate strategic enablers 58
Slide 60: Digital, Talent and Technology as critical enablers
Strategic enablers Digital, Talent and Technology as critical enablers to underpin successful delivery of the plan 2nd Digital wave driving up Technology: innovating with Talent program supporting the use of data and Al to transformative technologies business transformation transform businesses focu
Slide 61: ESG: Improving Transparency and Performance
Strategic enablers ESG: Improving Transparency and Performance Environment Social Governance • Deployment of the decarbonization • Progress towards a just transition with a • Short and long-term salary incentives roadmap driven by our ambition of focus on employees, local communities linked to ESG (
Slide 62: Leading investment proposition
Strategic Update 2024-27 Leading investment proposition 04 61
Slide 63: Repsol to grow returns and deliver 9-11 B€ in FCF
Returns Repsol to grow returns and deliver 9-11 B€ in FCF in 2024-2027 Adjusted income CFFO CFFO 24-27 growth ~8 +24% +24% 5% LCG B€ +25% 15% Customer Lower B€ 6.8 scenario Industrial LCB Industrial Conv. 4.4 8% Upstream Lower 6.4 3.5 3.2 scenario 30% Industrial 29% Conventional Industrial LCB 39% L
Slide 64: Capital framework ensuring resilient distributions
Sources and uses Capital framework ensuring resilient distributions with attractive upside Central scenario Lower scenario Enhanced and committed shareholder Sources and uses of cash 2024-27 distributions Sources and uses of cash 2024-27 B€ 31-33 31-33 • 25-35% CFFO B€ • Committed 4.6 B€ cash divide
Slide 65: Leading investor proposition
Repsol 24-27 Leading investor proposition • Committed 4.6 B€ cash dividend '24-27 Attractive and committed shareholder distributions • Up to 10 B€ in total distributions '24-27 Strong balance sheet • Maintain current rating through the cycle Cash flow growth driven by new attractive projects • CFFO
Slide 66: Main Group targets and 2024 outlook
Repsol 24-27 Main Group targets and 2024 outlook Targets '24-'27 Outlook 2024 25-35% distributions / CFFO 30-35% distributions / CFFO Distributions DPS: 0.9 €/sh. / initial 35 M SBB launched Cash dividend total +3% p.a. +SBB (40 M sh. amortization) Balance sheet Maintain current credit rating throug
Slide 67: Main Business targets
Repsol 24-27 Main Business targets Targets '27 FCF (B€) Total '24-27: 5-6 CFFO/Boe ($/bbl) >18 Upstream Yield and Production (kboed) Average '24-27 >550 upgrade portfolio Organic decarbonization1 (kgCO2/boe) ~10 Conventional FCF (B€) Total '24-27: >5 Low Carbon Business IRR hurdle rate (%) >10-15% I
Slide 68: Appendix
Strategic Update 2024-27 Appendix 67
Slide 69: Price scenarios considered for the main indicators
Price scenarios considered for the main indicators Central scenario Lower scenario '24 '25 '26 '27 '24 '25 '26 '27 Brent ($/bbl) 80 70 71 73 80 55 56 57 WTI ($/bbl) 77 67 68 70 77 52 53 54 HH ($/Mbtu) 3.0 3.5 3.6 3.6 3.0 3.0 3.1 3.1 Ref. Margin ($/bbl) 8.0 6.0 6.1 6.2 8.0 4.5 4.6 4.7 Electric Pool S
Slide 70: Glossary
Glossary • CFFO: Operating Cash Flow including dividends from equity participations • Net Capex: Capex (including subsidies) subtracting proceeds from Financial divestments and asset rotations, and changes in debt perimeter due to project Metrics financing and portfolio management • FCF: CFFO minus
Slide 71: Major projects selected (I/II)
Major projects selected (I/II) Business Project Country Tech. W.I. FID COD Operating metrics BM-C-33 Brazil Oil/Gas 21% 2023 2028 45 kboed1 Alaska Pikka USA Oil 49% 2022 2026 32 kboed1 BPTT: Mento & Cypre2 T&T Gas 30% 2023 2024 23 kboed1 Leon/Castile USA Oil 50%/36%3 2022 2025 20 kboed1 B29 Mexico O
Slide 72: Major projects selected (II/II)
Major projects selected (II/II) Business Project Country Tech. W.I. FID COD Operating metrics P&G retail customers Spain/Portugal - 100% Yearly Yearly 3.5-4.0 M by 2027 Multienergy Service Stations Spain - 100% Yearly Yearly >2,000 by 2027 Customer Internationalization Lubes RoW - 40-50% n.d. n.d. -