Slide 1: OMV Q2/16 conference call
OMV Q2/16 conference call Rainer Seele Chairman of the Executive Board and CEO August 10, 2016 OMV Aktiengesellschaft
Slide 2: Disclaimer
Disclaimer This document does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract, investment decisions or commitment whatsoever.
Slide 3: Key messages
Key messages ► Positive free cash flow after dividends ► 2016 CAPEX guidance reduced to EUR 2.2 bn ► Cost reduction ahead of schedule ► Rebalancing of the Upstream portfolio well on track: Sale agreement for a 30% stake in the Rosebank field signed 3 | OMV Group, results presentation Q2/16
Slide 4: HSSE – Safety is our top priority
HSSE – Safety is our top priority Safety record Sustainability highlights LTIR 1 OMV Group ► Major accident prevention policy implemented across the Group ► Specific training programs to raise 0.7 awareness of ► road and electrical safety 0.5 ► fork-lift truck operation 0.4 0.4 ► hazard awareness an
Slide 5: Development of economic environment
Development of economic environment Oil price Brent OMV indicator refining margin in USD/bbl in USD/bbl 80 8 7.8 7.8 60 6 62 5.9 40 50 4 5.1 44 46 4.7 20 34 2 0 0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Gas prices Ethylene/propylene net margin 2 in EUR/MWh in EUR/t 25 21 600 521
Slide 6: Financial performance Q2/16
Financial performance Q2/16 Key financials Q2/16 Q2/15 ∆ (%) in EUR mn Clean CCS EBIT 214 375 (43) Clean CCS net income 222 364 (39) attributable to stockholders Clean CCS 0.7 1.1 (39) Earnings Per Share (EPS), in EUR Cash flow from operating activities 1,036 858 21 Free cash flow before dividends 5
Slide 7: Financial performance 6m/16
Financial performance 6m/16 Clean CCS EBIT Clean CCS net income Free cash flow in EUR mn attributable to stockholders in EUR mn in EUR mn 708 406 600 27 381 396 (421) (950) 6m/15 6m/16 6m/15 6m/16 6m/15 6m/16 58 40 Brent price in USD/bbl Free cash flow before dividends 7.6 4.9 OMV indicator refining
Slide 8: Portfolio developments
Portfolio developments Rosebank ► Sale agreement for a 30% stake in Rosebank field signed ► Initial payment of USD 50 mn on closing and up to USD 165 mn on FID Gazprom / OMV asset swap ► Negotiations regarding swap assets continuing ► Signing expected in H2/16 Gas Connect Austria ► Sale of minority
Slide 9: 2016 CAPEX guidance reduced to EUR 2.2 bn
2016 CAPEX guidance reduced to EUR 2.2 bn Group CAPEX Well on track to reduce CAPEX incl. capitalized E&A, in EUR bn ► Focus on profitable barrels and sustainable reduction of unit CAPEX (21)% cost 2.7 ► Main investments in 6m/16: 2.4 2.2 ► Field redevelopment projects as well as workovers and drill
Slide 10: 26% reduction of E&A expenditure in 2016
26% reduction of E&A expenditure in 2016 E&A expenditure EUR 450 mn of E&A expenditure in in EUR mn 2016 confirmed ► Lower activities across the portfolio (26)% ► Focus on low cost regions and near- 607 field opportunities 450 ► Main activities in H2/16 in the Middle 300 East, in Romania and in the
Slide 11: Ahead of schedule to reduce the cost base
Ahead of schedule to reduce the cost base Operating cost 1 reduction in EUR mn 150 Delivery of EUR 100 mn >150 New target already in 2016E >50 mn EUR 100 100 100 Original target 50 100 mn EUR 0 Baseline 2015 Dec. 2016 Dec. 2017 1 On comparable basis. 11 | OMV Group, results presentation Q2/16
Slide 12: OMV Q2/16 conference call – CFO
OMV Q2/16 conference call Reinhard Florey Chief Financial Officer August 10, 2016 OMV Aktiengesellschaft
Slide 13: Income statement summary
Income statement summary in EUR mn Q2/16 Q2/15 ∆ (%) Clean CCS net income attributable to stockholders EBIT (300) 222 n.m. in EUR mn Financial result 72 92 (21) 364 Thereof Borealis 111 127 (12) Taxes 111 (23) n.m. 222 Net income (117) 292 n.m. Thereof attributable to non-controlling interests 25 73
Slide 14: Cash flow
Cash flow in EUR mn Q2/16 Q1/16 Q2/15 Net income (117) 136 292 Depreciation, amortization and impairments 1,157 538 835 Change in net working capital components 345 (73) (137) Other (349) (21) (131) Cash flow from operating activities 1,036 579 858 Cash flow used for investments (526) (745) (816) Ca
Slide 15: Market environment puts pressure on Q2/16 results
Market environment puts pressure on Q2/16 results Key financials Q2/16 Q2/15 ∆ (%) Special items and CCS effect in EUR mn Q2/16 in EUR mn Clean CCS EBIT 214 375 (43) 94 214 Thereof Upstream 0 116 n.m. Downstream 250 269 (7) (608) Corporate and Other (12) 9 n.m. Consolidation (24) (19) (26) (300) Cle
Slide 16: Upstream Q2/16 vs. Q2/15: Lower costs partly offset difficult pricing
Upstream Q2/16 vs. Q2/15: Lower costs partly offset difficult pricing environment Clean EBIT Q2/16 vs. Q2/15 in EUR mn Realized oil price down by 32% and 116 realized gas price down by 19% Positive change in stock effect in Norway Lower clean exploration expenses due 0 to reduced exploration a
Slide 17: Upstream – Key performance indicators
Upstream – Key performance indicators Hydrocarbon production Main operational developments in kboe/d 307 292 309 312 316 Production increased by 3% vs. Q2/15 mainly due to 154 154 161 161 148 Edvard Grieg being brought on stream in Q4/15 152 143 155 151 155 Gas blowdown at Gullfaks started in
Slide 18: Downstream showed solid performance
Downstream showed solid performance Clean CCS EBIT Q2/16 vs. Q2/15 in EUR mn Oil 269 Lower OMV indicator refining margin 250 Gas Decreased petrochemical margins +89 72 Turnaround activities at refineries in Oil Austria and Romania 286 (108) Gas 178 Restructuring progressing Downstream Gas
Slide 19: Downstream Oil – Key performance indicators
Downstream Oil – Key performance indicators OMV indicator refining margin Main operational developments in USD/bbl OMV indicator refining margin 7.8 7.8 down by 40% vs. Q2/15 5.9 5.1 4.7 Refining utilization rate down to 72% due to turnarounds West: 74%; East: 68% Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Slide 20: Downstream Gas – Key performance indicator
Downstream Gas – Key performance indicator Natural gas sales volumes in TWh 32.5 28.7 24.4 23.1 20.4 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 OMV Trading and EconGas OMV Petrom OMV Turkey 20 | OMV Group, results presentation Q2/16
Slide 21: OMV Petrom Group: Positive Upstream result on the back of cost reduction
OMV Petrom Group: Positive Upstream result on the back of successful cost reduction measures Key financials Q2/16 Q2/15 ∆ (%) Q2/16 vs. Q2/15 in EUR mn Positive, but lower Upstream result due to negative impact of lower prices and sales Clean CCS EBIT 49 148 (67) volumes Thereof Upstream Hydroca
Slide 22: Targeting a long-term gearing ratio of ≤30%
Targeting a long-term gearing ratio of ≤30% Net debt development Strong liquidity position as of Q2/16 in EUR bn Cash position at EUR 1.3 bn 5 4.04 4.18 3.99 Committed revolving credit facilities of 4 EUR 3.6 bn (undrawn) 3 Equity ratio development 2 Dec. 31, 2015: 44% June 30, 2016: 45% 1
Slide 23: Financial priorities in a nutshell
Financial priorities in a nutshell Improve shareholder return Focus on cash flow Maintain strong balance sheet 23 | OMV Group, results presentation Q2/16
Slide 24: Outlook for the full year 2016
Outlook for the full year 2016 ► Brent oil price: Annual average of USD 40/bbl expected H2/16 margins expected to be below H1/16 level; ► Refining: Utilization rate >90% in H2/16 ► European gas markets: Oversupply continues; H2/16 prices expected to be above H1/16 level ► Production: Slightly above
Slide 25: OMV Aktiengesellschaft
OV OMV OMWV Aktiengesellschaft OuvV Moving more. Moving the future. O M V