Bp Plc · LSE:BP.
Bp — Q2 2021 Earnings Presentation
37 slides from Bp's earnings presentation, Aug 3, 2021
Slide 1: bp second quarter 2021 financial results presentation
bp second quarter 2021 Financial results presentation 3 August 2021 1
Slide 2: Welcome to bp's second quarter 2021 results presentation
svp investor relations 2Q 2021 financial results Good morning everyone and welcome to bp’s second quarter 2021 results presentation. I’m here today with Bernard Looney, chief executive officer and Murray Auchincloss, chief financial officer. Before we begin today, let me draw your attention to our c
Slide 3: Cautionary statement
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 statement: The discussion in this results announcement
Slide 4: Welcome to our second quarter results for 2021
Chief executive officer 2Q 2021 financial results Thanks Craig. Good morning everyone and welcome to our second quarter results for 2021. Thank you for joining us. 4
Slide 5: Another strong set of financial results
Strong results and Growth of resilient Executing buyback Strong progress continued net debt* dividend within a from surplus cash flow* in our transformation reduction in an improving disciplined financial frame to an integrated environment energy company for 2Q21 for 1H21 underlying earnings cash fl
Slide 6: Performing while transforming
− Improve operating efficiency and reliability; − Deliver the next wave of high-margin major projects; and − Grow our convenience and mobility business. All while transforming bp for the longer term, by taking disciplined investment decisions in support of our transition to an integrated energy comp
Slide 7: Chief financial officer
Chief financial officer 2Q 2021 financial results Thanks Bernard and hello everyone – I hope you and your families are safe and healthy. 6
Slide 8: Environment
Environment Oil price1 $/bbl Natural gas price1 $/mmbtu Refining marker margin1 $/bbl Brent Henry Hub JKM RMM* NW Europe US Midwest Source: Platts - all data 1 January 2021 to 28 July 2021 (1) Spot price 2Q 2021 financial results As usual, let’s begin with the macro environment, where sentiment has
Slide 9: Refining marker margin outlook
RMM averaging $13.70 per barrel, the highest level since third quarter 2019. However, the recovery has been uneven across products and regions with much of the increase in bp’s RMM driven by higher US markers. This reflects a strong rebound in US gasoline demand and a near doubling of the cost of US
Slide 10: 2Q21 underlying results summary
2Q21 underlying results summary $bn 2Q20 1Q21 2Q21 Underlying RCPBIT (7.4) 4.7 4.7 Gas & low carbon energy (0.8) 2.3 1.2 Oil production & operations (7.7) 1.6 2.2 Customers & products 1.4 0.7 0.8 2Q 2021 vs 1Q 2021 * Rosneft (0.1) 0.4 0.7 ▪ Higher oil prices and Other businesses and corporate (0.2)
Slide 11: Business results commentary for the second quarter
In gas & low carbon energy the second quarter result reflects higher realisations offset by a strong gas marketing and trading result following the exceptional performance in the first quarter. It also reflects a higher DD&A charge as a result of major project ramp-up this quarter. In oil production
Slide 12: Cash flow and balance sheet
Cash flow and balance sheet ▪ $5.4bn 2Q21 operating cash flow* including 1H21 cash inflows/outflows $bn ▪ $1.2bn Gulf of Mexico pre-tax oil spill payments within the $0.5bn working capital1 build ▪ $2.5bn cash cost* savings run-rate delivered in 2Q212 ▪ $0.5bn share buybacks – offsetting dilution fr
Slide 13: Financial frame – clear hierarchy of priorities
Financial frame – clear hierarchy of priorities 5.46¢ 40% ~$ 13bn $500m 60% per ordinary share 2021 surplus cash flow* 2021 capital expenditure* 2021 plan completed 2021 surplus for 2Q21 allocated to further deleverage in 2Q21 cash flow* allocated 4% growth for 2Q21 $1.4bn 1H21 Capacity for annual 2
Slide 14: Share buybacks and dividend growth outlook
share buybacks. On average, based on bp’s current forecasts, at around $60 per barrel Brent, and subject to the board’s approval each quarter, we expect to be able to deliver a buyback of around $1.0 billion per quarter, and to have capacity for an annual increase in the dividend per ordinary share
Slide 15: Chief executive officer
Chief executive officer 2Q 2021 financial results 11
Slide 16: Strategic progress across the business
Resilient & focused hydrocarbons Low carbon electricity & energy ▪ Driving synergies through single ▪ Net renewables pipeline* more than doubled, to 21GW operating model ▪ Offshore wind growth, 3.7GW net added ▪ 8 major project start-ups – underpinning to pipeline with UK and US entry 2021 target of
Slide 17: Thorntons JV and convenience
Thorntons JV. Once complete, the transaction will position bp as one of the leading convenience operators in the Midwest, and combine Thornton’s customer-first culture with our existing US retail network. We expect to deliver further value from synergies with our existing ampm brand and through inte
Slide 18: Integrating energy systems
Integrating energy systems… …to create multi-energy customer solutions along and across value chains Upstream production ▪ ~100mbd Capabilities amplify value Offshore wind Incumbent regional ▪ 1.5GW net CCUS preferred bidder in ▪ Net Zero Teesside expertise Irish Sea ▪ Northern Endurance Partnership
Slide 19: UK energy transition plan
heating, electric vehicles and trucks; − Hydrogen growing and supporting heavy duty transport, industry and potentially homes, and; − Perhaps one day the UK exporting hydrogen in the form of ammonia – an exciting future opportunity. And we at bp are helping drive this transition, with a plan to: − L
Slide 20: Multi-energy customer solutions
optimise between the upstream energy flows and the different customers we interact with – from corporate PPA’s to electric charging points for individuals or fleets, to blue or green hydrogen; − Providing fixed or variable volumes, providing fixed or floating prices, in whatever currency they want w
Slide 21: Partnering with cities, corporates and industries
Partnering with cities, corporates and industries…. …to decarbonise value chains through integrated solutions 3,000 corporates High tech & consumer goods Clean fuels Our competitive advantages… CO2 Mobility capture 700 cities Global scale and reach Renewables Track record executing 30 regions Cities
Slide 22: From IOC to IEC
intelligent edge to our production facilities. In summary, for over 100 years now we have been an IOC, for the next 100 we’ll be an IEC – helping countries, such as the UK, and customers – some existing – many new – to provide energy that is affordable, reliable and clean. 14
Slide 23: Delivering long term shareholder value
Strong results and Growth of resilient Executing buyback Strong progress continued net debt* dividend within a from surplus in our transformation reduction in an improving disciplined financial cash flow* to an integrated environment frame energy company …and delivering long term shareholder value 2
Slide 24: 2Q 2021 financial results
2Q 2021 financial results
Slide 25: 2Q 2021 financial results
2Q 2021 financial results
Slide 26: Investor proposition
Investor proposition Committed Resilient dividend distributions ≥60% surplus cash as share buybacks1 Delivering 7-9% adjusted Profitable EBIDA* per share CAGR* growth Growing shareholder value ROACE* to 12-14%2 >20% capital Sustainable employed in transition3 value (1) At least 60% of surplus cash a
Slide 27: Guidance
Guidance Full year 2021 3Q21 vs 2Q21 Capital expenditure* ~$13bn ▪ Higher product demand expected across our customer business as DD&A Similar level to 2020 COVID-19 restrictions continue to ease Gulf of Mexico oil spill ~$1.5bn pre-tax ▪ Realised refining margins are expected to improve slightly, p
Slide 28: Long-term price assumptions
Long-term price assumptions Brent assumption $/bbl real (2020) 1 2 Average price over the 2021 – 2050 unchanged at around $55/bbl real (2020) (1) Source: bp 2020 annual report (2) Source: bp 2Q21 Stock Exchange Announcements 2Q 2021 financial results
Slide 29: Gas and low carbon energy
Gas and low carbon energy 2Q20 1Q21 2Q21 Underlying RCPBIT* $bn Production volume Liquids (mbd) 99 112 109 Natural gas (mmcfd) 4,463 4,623 4,440 Total hydrocarbons (mboed) 869 909 875 Average realisations* Liquids ($/bbl) 22.59 55.38 61.69 Natural gas ($/mcf) 3.12 3.94 4.14 Total hydrocarbons ($/boe
Slide 30: Gas and low carbon energy: renewables pipeline
Gas and low carbon energy Building scale and capability with capital discipline and a returns focus Developed renewables to FID* and Renewables pipeline* Renewables hopper* renewables pipeline* bp net, GW by technology bp net bp net active projects A decrease of 20GW from 1Q21 mainly due to promotio
Slide 31: Oil production and operations
Oil production and operations 2Q20 1Q21 2Q21 Underlying RCPBIT* $bn Production volume1 Liquids (mbd) 1,266 997 938 Natural gas (mmcfd) 2,262 1,810 1,786 Total hydrocarbons (mboed) 1,656 1,309 1,245 Average realisations* Liquids ($/bbl) 22.76 52.92 60.55 Natural gas ($/mcf) 1.03 4.11 3.90 Total hydro
Slide 32: Customers and products
Customers and products 2Q20 1Q21 2Q21 Underlying RCPBIT* $bn Customers – convenience & mobility Customers – convenience & mobility 0.7 1.0 1.3 adjusted EBITDA* Castrol1 adjusted EBITDA* 0.1 0.4 0.3 Capital expenditure* 0.2 0.3 0.3 bp retail sites* – total2 18,900 20,300 20,300 bp retail sites in gro
Slide 33: Rosneft
Rosneft bp share of underlying net income* $bn bp share of Rosneft dividend* $bn 0.8 1.0 0.7 0.8 0.6 0.8 0.6 0.4 0.4 0.4 0.5 0.3 0.2 0.2 0.0 2019 2020 0.0 (0.1) 2Q20 1Q21 2Q21 (0.2) Production volume1 (0.2) Liquids (mbd) 856 827 858 (0.4) Natural gas (mmcfd) 1,248 1,294 1,374 2Q20 3Q20 4Q20 1Q21 2Q2
Slide 34: 2Q 2021 financial results
2Q 2021 financial results
Slide 35: Glossary
Glossary Adjusted EBIDA Underlying replacement cost profit before interest and tax*, add back Capital Total cash capital expenditure as stated in the condensed group cash flow depreciation, depletion and amortisation and exploration expenditure written- expenditure statement. Capital expenditure for
Slide 36: Glossary
Glossary Disposal Divestments and other proceeds. Refining Represents Solomon Associates’ operational availability for bp-operated proceeds availability refineries, which is defined as the percentage of the year that a unit is available for processing after subtracting the annualized time lost due t
Slide 37: Glossary
Glossary Rosneft bp’s adjusted share of Rosneft’s earnings after Rosneft's own finance costs, Unit production Calculated as production cost divided by units of production. Production cost underlying taxation and non-controlling interests is included in the bp group income costs does not include ad v