Bp Plc · LSE:BP.
Bp — Q1 2020 Earnings Presentation
32 slides from Bp's earnings presentation, Apr 28, 2020
Slide 1: BP 1Q 2020 Financial results
BP 1Q 2020 Financial results 28 April 2020 1 1
Slide 2: Craig Marshall, Head of IR
Craig Marshall Head of IR 2 Good morning everyone and welcome to BP’s first quarter results presentation for 2020. Similar I’m sure to many of you listening, we are presenting our results today while working from home. While this is a departure from the usual process, it is something we are all gett
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, CEO
Bernard Looney CEO 4 Thanks Craig and good morning everyone. I hope you and your families are keeping safe and well. And thank you for joining our call. We are in a very different world today than any of us would have imagined just a few weeks ago. The coronavirus pandemic has gripped our world. Peo
Slide 5: Three priorities: performing with purpose
It is a simple frame that helps us balance complex and competing demands. Between keeping our people safe and running the business. Helping society in a time of real need. And safeguarding the company for our shareholders. And it works well for us – we think of it as “performing with purpose” – and
Slide 6: Supporting our people and communities
Supporting our people and communities 5 First and foremost, I want to say how much I am in awe of what our people are doing. Our frontline staff are making real sacrifices every day out in the field or running our retail network. And they are getting brilliant support from everyone working from home
Slide 7: Supporting employees and communities
working so that our global workforce stays fully connected; and – We have been enhancing psychological support for our employees, because they are dealing with stressful demands. This pandemic is causing anxiety – and job security is going to be a major concern. With that in mind, we have committed
Slide 8: Delivering for our shareholders and strengthening our finances
Delivering for our shareholders and strengthening our finances 6 These actions in no way compromise our long-term commitment to shareholders – if anything I believe they strengthen it. And we are hugely grateful for the support we have been receiving. At the same time – we are focused on doing every
Slide 9: Near-term objectives and dividend
– Drive our cash balance point lower – Strengthen our balance sheet; and – Enable the energy transition On the cash balance point objective – through the actions we are taking we now expect to drive the cash balance point in 2021 down further. To less than $35 per barrel Brent – which is below our p
Slide 10: Reinforcing our commitment to our purpose, ambition and aims
Reinforcing our commitment to our purpose, ambition and aims 7 Considering everything going on, some have understandably questioned our commitment to our ambition – and to reinventing BP. On the 12th February we talked about our new purpose to reimagine energy for people and our planet. We shared ou
Slide 11: Brian Gilvary, CFO
Brian Gilvary CFO 8 Thanks Bernard and good morning everyone. 8
Slide 12: Environment
Environment Commodity prices $/bbl Brent / Brent1 WTI1 RMM2 WTI RMM 80 24 ▪ 74% decline in Brent over 1Q, averaging $50/bbl 60 18 ▪ Henry Hub average of 40 12 $1.95/mmBtu in 1Q 20 6 ▪ BP RMM2 average of $8.80/bbl in 1Q 0 0 -20 -6 -40 -12 -60 -18 Jan Feb Mar Apr (1) Source: Platts (2) Refining Marker
Slide 13: Outlook uncertainty
costs in the United States. Looking forward, there remains an exceptional level of uncertainty regarding the near-term outlook for prices and product demand. There is the risk of more sustained consequences depending on the efforts of governments, and the public and private sector, to manage the hea
Slide 14: 1Q 2020 results summary
1Q 2020 results summary $bn 1Q19 4Q19 1Q20 1Q 2020 vs 4Q 2019 Underlying replacement cost profit 2.4 2.6 0.8 ▪ Lower liquid and gas 1 5.9 7.6 1.2 realisations Underlying operating cash flow Underlying RCPBIT2 ▪ A higher effective tax rate Upstream 2.9 2.7 1.9 ▪ Lower Rosneft contribution Downstream
Slide 15: 1Q 2020 sources and uses of cash
1Q 2020 sources and uses of cash Organic cash inflows/outflows $bn 8 Share buybacks ▪ Organic cash outflow of 6 $5.7bn Dividends2 ▪ Working capital build of 4 Lease payments3 $3.7bn Working capital build ▪ ~$32bn of liquidity5 2 Organic capex ▪ Completed share buyback Underlying cash flow1 programme
Slide 16: Handover to Murray
It’s been an absolute privilege for me to serve the company, our people and our shareholders. And with that, I would like to hand over to Murray to outline the actions we are taking to position the company for the future. 11
Slide 17: Murray Auchincloss, CFO Designate
Murray Auchincloss CFO Designate 12 Thank you Brian, and good morning everyone. BP entered this challenging period with a strong portfolio, a disciplined financial framework and a strong liquidity position. That we have this is testament to Brian’s stewardship as CFO over the last decade and I would
Slide 18: Adapting our financial frame
Adapting our financial frame Near term objectives Taking decisive action Resilient financial framework Balance sheet − ~$32bn liquidity1 including new Reinforce liquidity $10bn RCF2 Balance 2021 organic cash − ~$7bn additional bond issue flows at: Lower cash balance point − <$35/bbl Brent Divestment
Slide 19: Capital expenditure and cash cost actions
Looking ahead, as we complete the current phase of major project delivery our capital plans become increasingly flexible as we expect to transition towards shorter-cycle investments, such as in our BPX business, as well as opportunities around infrastructure led investment in our existing production
Slide 20: Alaska sale and divestments
As announced, we have reconfirmed our commitment to completing the sale of our Alaska business to Hilcorp in 2020, subject to regulatory approvals. The total consideration of up to $5.6 billion is unchanged but the structure of the consideration and phasing of payments have been revised to respond t
Slide 21: 2020 guidance
2020 guidance Second quarter Full year Upstream Upstream production Lower than excluding Rosneft 20191 Lower reported production subject to: ▪ Significant uncertainties around implementation of OPEC+ restrictions Organic capital ~$12bn expenditure ▪ Price impacts on entitlement volumes Slightly belo
Slide 22: Second quarter and full year outlook
quarter. Our full year guidance in this area is unchanged. Finally, the working capital position in the second quarter continues to be uncertain due to demand destruction and price volatility. Overall, we expect the second quarter to represent a period of reset for our business, as we continue to na
Slide 23: 2021 price assumptions and capital markets day
$2.50 per million British thermal units and a refining marker margin of $11 per barrel in 2021. The price assumptions for Henry Hub and refining marker margin are around 25% below our prior guidance. And as Bernard described, this underpins our continued commitment to sustainably grow free cash flow
Slide 24: Bernard Looney, CEO
Bernard Looney CEO 15 Thanks Murray. 15
Slide 25: Reimagining energy for people and our planet
Reimagining energy for people and our planet 16 I’ll summarise in a moment, however before I do that, I’d like to cover two important issues. Our AGM is approaching next month, and our strong recommendation is you vote now and appoint the chairman of the meeting as your proxy to ensure your votes co
Slide 26: Summary
have learned from you over many years. So, let me then quickly sum up what you have heard today. First, BP is operating well thanks to good work done in recent years, as well as the outstanding courage and commitment of our team today. Continuing to operate well, and staying safe, is our absolute fo
Slide 27: Q&A
Q&A Brian Gilvary Bernard Looney Murray Auchincloss Craig Marshall CFO CEO CFO Designate Head of IR 17 17
Slide 28: Appendix
Appendix 18
Slide 29: 1Q 2020 summary
1Q 2020 summary $bn 1Q19 4Q19 1Q20 % Y-o-Y % Q-o-Q Upstream 2.9 2.7 1.9 Downstream 1.7 1.4 0.9 Other businesses and corporate (0.4) (0.3) (0.6) Underlying business RCPBIT 1 4.2 3.9 2.2 (47%) (42%) 2 Rosneft 0.6 0.4 (0.0) Consolidation adjustment – unrealised profit in inventory (0.0) 0.0 0.2 1 Under
Slide 30: Upstream
Upstream Volume mboed Underlying RCPBIT3 $bn 4000 Group production1 5.0 Non-US US Total 3500 4.0 3.4 2.9 3000 Upstream production 2.7 3.0 excluding Rosneft 2.1 1.9 2500 2.0 2000 1.0 1500 0.0 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Realisations2 1Q19 4Q19 1Q20 1Q 2020 vs 4Q 2019 Liquids ($/
Slide 31: Downstream
Downstream Underlying RCPBIT2 $bn 96 % Refining availability1 Refining environment 1Q19 4Q19 1Q20 Fuels Lubricants Petrochemicals Total 2.0 1.9 4Q19: 96% RMM ($/bbl) 10.2 12.4 8.8 1.7 1.4 1.5 1.4 1Q 2020 vs 4Q 2019 ▪ Lower industry refining margins; 1.0 0.9 ▪ Weaker fuels and lubricants demand drive
Slide 32: 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 0.0 0.2 2017 2018 2019 0.0 1.1mmboed 1Q19 2Q19 3Q19 4Q19 1Q20 -0.2 BP share of Rosneft production3 (1) On a replacement cost basis and adjusted for non-operating items;