Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q3 2012 Earnings Presentation
25 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Oct 29, 2012
Slide 1: Results & Strategy execution update
29 October 2012 Results & Strategy execution update NINE MONTHS AND THIRD QUARTER 2012 Solid foundations to deliver sustainable value
Slide 2: Agenda
Key highlights Strategy execution update Business overview Final remarks Appendix 2 Nine months and third quarter 2012 results
Slide 3: Key highlights
Key highlights ▪ Key wells in Brazil de-risking portfolio ▪ Establishment of a structured relationship with ENH in Mozambique, increasing Galp Energia’s influence in the area ▪ Sines hydrocracker commissioning underway ▪ EBITDA in 3Q12 of €306 Mln, up 38% YoY, driven by crude production growth in Br
Slide 4: Strategy execution update
Key highlights Strategy execution update Business overview Final remarks Appendix 4 Nine months and third quarter 2012 results
Slide 5: Key wells in Brazil de-risking portfolio
Key wells in Brazil de-risking portfolio BM-S-8 BM-S-24 ▪ Carcará well already proved a significant oil ▪ Initial results confirmed the continuity of discovery with an over 400 meters oil column previous discovery ▪ Well already reached target depth and being ▪ Data gathering still ongoing and alrea
Slide 6: Several milestones achieved with potential additional upside
Several milestones achieved with potential additional upside Lula-11 project production (kboepd) ▪ Lula-1 project at plateau production in 3Q12 changing 120 slightly MoM due to 100 maintenance works 80 ▪ WAG and highly deviated 60 40 wells to be tested during 20 2013 to improve recovery factor 0 ▪ F
Slide 7: Working together with ENH in Mozambique
Working together with ENH in Mozambique Mozambique ▪ Formal agreement established increasing Galp Energia’s influence in the area ; Mamba NE-2 ▪ Agreement can open new Coral-1 opportunities in Mozambique ▪ Appraisal activities underway to better understand the reservoir and oil potential to be teste
Slide 8: Entering in a new refining era by the end of the year
Entering in a new refining era by the end of the year New units at Sines refinery Hydrocracker commissioning underway with steady production expected for the end of 4Q12 8 Nine months and third quarter 2012 results
Slide 9: Iberian oil market to be further impacted by austerity measures
Iberian oil market to be further impacted by austerity measures Iberian oil products market (Mton) 20,000 20,000 20,000 20,000 15,000 15,000 15,000 15,000 10,000 10,000 10,000 10,000 5,000 5,000 5,000 5,000 0 0 0 0 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 1Q 2Q 3Q 4Q Spain Portugal Ibe
Slide 10: Leveraging on international LNG tight market
Leveraging on international LNG tight market Iberian volumes (Bcm) LNG trading volumes (Bcm) 4.6 1.7 4.4 4.4 Cargoes (#): Far East: 11 3.0 Europe: 4 South 0.7 America: 3 0.5 0.3 2009 2010 2011 9M12 2009 2010 2011 9M12 Securing access to key valuable markets, through existing long-term and flexible L
Slide 11: Executing our strategy according to highly sustainable practices
Executing our strategy according to highly sustainable practices Dow Jones Sustainability Index ▪ Presence in the Dow Jones Sustainability Index (DJSI) World and the DJSI Europe for the first time ▪ Part of the restricted group of oil & gas companies in DJSI Europe ▪ Recognition of Galp Energia’s co
Slide 12: Business overview
Key highlights Strategy execution update Business overview Final remarks Appendix 12 Nine months and third quarter 2012 results
Slide 13: Net profit in 3Q12 of €98 Mln, up 58% YoY
Net profit in 3Q12 of €98 Mln, up 58% YoY Profit & Loss (€Mln) 3Q12 3Q11 YoY QoQ 9M12 YoY ▪ EBITDA increase driven by higher Brazilian Turnover 4,925 4,277 +15% +8% 14,276 +15% production and LNG EBITDA 306 222 +38% +9% 786 +33% trading volumes E&P 110 63 +74% +11% 297 +60% R&M 86 75 +14% (17%) 218
Slide 14: Sound financial structure maintained
Sound financial structure maintained Balance sheet (€Mln) Sep.2012 Jun.2012 Sep - Jun Dec.2011 Sep - Dec ▪ Net debt increase followed capex, dividend Fixed assets 6.430 6.154 +276 6.002 +428 payment and Setgás Work in progress 2.559 2.399 +160 2.174 +385 acquisition during 3Q12 Other assets (liabili
Slide 15: Short term outlook
Short term outlook ▪ 4Q12 working interest production targeted at c.24 kboepd ▪ Benchmark refining margin to decrease QoQ impacted by the end of maintenance season ▪ Marketing volumes down YoY, impacted by the Iberian macro economic environment ▪ Natural gas volumes to decrease QoQ mainly due to ele
Slide 16: Final remarks
Key highlights Strategy execution update Business overview Final remarks Appendix 16 Nine months and third quarter 2012 results
Slide 17: Final remarks
Final remarks ▪ Lula development project being successfully executed with upside to be tested ▪ Forthcoming exploration results with potential to unlock value ▪ Strategic agreement with ENH with potential to open new opportunities in Mozambique ▪ Sound capital structure to fund current transformatio
Slide 18: Appendix
Key highlights Strategy execution update Business overview Final remarks Appendix 18 Nine months and third quarter 2012 results
Slide 19: Lula-1 project steady production during 3Q12
Lula-1 project steady production during 3Q12 Main E&P data ▪ Lula-1 project drove 3Q12 3Q11 YoY QoQ 9M12 YoY production growth with an Working interest production kboepd 25.9 20.8 +24% +1% 24.8 +20% average production of 10.9 Net entitlement production kboepd 19.5 12.2 +60% +4% 18.3 +54% kboepd Ango
Slide 20: EBITDA was 14% higher YoY on the back of improved refining margins
EBITDA was 14% higher YoY on the back of improved refining margins Main R&M data ▪ Refining business benefited 3Q12 3Q11 YoY QoQ 9M12 YoY from increase in benchmark Galp Energia refining margin $/bbl 4.4 0.9 n.m. n.m. 2.6 n.m. refining margins Spread over benchmark $/bbl 0.5 1.3 (65%) +66% 0.8 (52%)
Slide 21: EBIT 29% higher YoY supported by LNG trading activity
EBIT 29% higher YoY supported by LNG trading activity Main G&P data 3Q12 3Q11 YoY QoQ 9M12 YoY ▪ LNG trading activity weighting 33% of natural NG supply total sales volumes M m3 1,470 1,159 +27% (2%) 4,696 +19% gas supply volumes Electrical M m3 407 490 (17%) +82% 998 (32%) Industrial M m3 493 480 +
Slide 22: Capex shift to upstream materialized
Capex shift to upstream materialized Capital expenditure (€Mln) ▪ 72% of total capex in G&P 3Q12 allocated to E&P R&M E&P - Production activities E&P - Exploration 808 ▪ Lula project responsible for the majority of E&P 613 development capex ▪ Downstream capex 222 190 decreased with the end of refine
Slide 23: Competitive interest rate of 4.4% maintained despite sovereign risk
Competitive interest rate of 4.4% maintained despite sovereign risk M/L-term debt reimbursement profile (€Mln) 1,000 ▪ Total net debt of €1.4 Bln 800 or €0.4 Bln if adjusted by 600 loan to Sinopec 400 200 ▪ Upcoming maturities to be 0 2012 2013 2014 2015 +2016 refinanced Debt structure as of Septemb
Slide 24: Disclaimer
Disclaimer RCA figures except otherwise noted. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "co
Slide 25: Investor Relations team
Investor Relations team Tiago Villas-Boas, Head of IR Cátia Lopes Inês Santos Maria Borrega Pedro Pinto Samuel Dias +351 21 724 08 66 investor.relations@galpenergia.com www.galpenergia.com Results & presentation weblink For further information on Galp Energia, please go to: www.galpenergia.com www.g