Repsol Sa · BME:REP
Repsol Sa — Investor Presentation (March 2020)
46 slides from Repsol Sa's investor presentation, March 2020
Slide 1: Investor Update March 2020
Investor Update March 2020
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2020 Repsol, S.A. is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored, duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or
Slide 3: Delivering value growth through the cycle
2018-2020 Delivering value growth through the cycle 1. Company overview 2. Strategic progress 3. Upstream update 4. Downstream & Low Carbon update 5. Digitalization & efficiencies 6. Financing 7. Guidance 2020 8. Conclusions & key targets 9. Historic data book
Slide 4: Company overview
1 Company overview
Slide 5: Repsol: A unique, Integrated Global Position
Repsol: A unique, Integrated Global Position Company overview Core businesses: Upstream and Downstream ~709 kboe/d production 8.2% ~2.1 billion boe proved reserves1 1 Million bbl/d refining capacity Sacyr 91.8% Free Float ~2.6 Millions tons of Upstream Downstream Both base chemicals3 capacity • 17%
Slide 6: Strategy 2018-2020
Strategy 2018-2020 Company overview 1. Increasing shareholder returns 2. Growing our portfolio profitably • Dividend per share 8% p.a. growth with full buyback of shares • Growth across all value-creation metrics, at any oil price • Dividend target fully covered at $50/bbl • Downstream activated as
Slide 7: Strategic progress
2 Strategic progress
Slide 8: Strong operating cash flow growth in challenging scenario
Strong operating cash flow growth in challenging scenario Strategic progress Brent Price (USD/Bbl) Refining Margin Indicator (USD/Bbl) 71.3 6.7 6.2 68.8 5.5 5.6 63.1 64.2 62.0 5.0 4Q18 3Q19 4Q19 FY18 FY19 4Q18 3Q19 4Q19 FY18 FY19 Henry Hub (USD/MBtu) Exchange rate (USD/€) 3.6 1.18 3.1 2.5 2.6 1.14 1
Slide 9: Clear path for cashflow growth to 2020
Clear path for cashflow growth to 2020 Strategic progress At $50/bbl flat Brent 2019 (B€) +0.3 +0.52 - +0.132 +0.1 +0.11 +1.1 0.1 6.5 0.3 0.3 0.2 0.6 0.4 4.6 CAGR: + 12% UPSTREAM DOWNSTREAM CORPORATION +1 B€ + 0.8 B€ + 0.1 B€ 2017 CFFO1 New RISE (efficiency & International Profitability E
Slide 10: Increasing shareholder remuneration and full buyback of scrip
Increasing shareholder remuneration and full buyback of scrip Strategic progress Dividend per share based on disbursement year CAGR +8% €/share 0.80 (*) 0.95 (*) 1.00 0.90 (*) Historic cash dividend Buybacks Historic scrip dividend Scrip dividend + buybacks 0.19 2017 2018 2019 2020 Buyback program i
Slide 11: Additional 5% share capital reduction
Additional 5% share capital reduction Strategic progress Self-funded plan at 50 dollars Brent Strategic update for 2018-2020 Increase shareholder remuneration to 1 €/share with scrip option and buyback Increase Total Shareholder Return 5% Share capital reduction to be executed in 2020* Cance
Slide 12: Strategy towards achieving net zero emissions in 2050
Strategy towards achieving net zero emissions in 2050 Strategic progress 1st oil & gas company: Sustainability embedded in decision making to support the Kyoto Protocol • Management and Employees remuneration linked to align with the Paris Agreement to delivery of Sustainability targets to ass
Slide 13: Upstream update
7 REPSOL Upstream update
Slide 14: Core regions in the portfolio
Core regions in the portfolio Upstream North America Europe, Africa & Brazil Unconventional portfolio, operatorship and High margin barrels, key development valuable midstream positions projects from exploration succes 182 kboe/d 167 kboe/d 73% 25 % 84% 1% / 51% Latin America South East Asia Regiona
Slide 15: Progressing on our short-cycle projects
Progressing on our short-cycle projects Upstream Pipeline of Repsol’s short-cycle projects… DUVERNAY YME • Early production of liquid rich sweet spot • In 2018 the redevelopment received the approval from local authorities. • Fast track development with FO in 2H20 EAGLE FORD • Production ramp-up MAL
Slide 16: New opportunities: attractive pipeline in the Gulf of Mexico
New opportunities: attractive pipeline in the Gulf of Mexico Upstream Buckskin First Oil (June 14th 2019) Joint development of Leon and Moccasin Last example of Repsol development strategy Growing the future Breakeven Price 79 $/bbl Leon and Moccasin: Buckskin ~150 Mboe recoverable Development Capex
Slide 17: New opportunities: Indonesia a value creation history
New opportunities: Indonesia a value creation history Upstream Sakakemang: largest discovery in 18 years in Indonesia(1) Indonesia new additional production 800 Gross MMscfd (2) 700 Corridor extension 600 Sakakemang fast track 500 400 300 200 100 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2
Slide 18: Working on our 2020+ project pipeline
Working on our 2020+ project pipeline Upstream Mid and long-term projects with attractive Repsol's new projects have competitive returns and phased developments full-cycle IRR and NPV breakeven Alaska (US) Duvernay (Canada) • Appraisal campaign • Current focus on de-risking Ferrier East extended Pik
Slide 19: Working on our 2020+ project pipeline: Accelerating Alaska
Working on our 2020+ project pipeline: Accelerating Alaska Upstream Nanushuk path to success Leveraging our capabilities Huge interests in prolific formation to build a new core region Pikka Unit >500 Mboe (2C) Gross Kboe/d FID slated for mid-2020 200 Phase I FO in 2022 (30 Kboed) FFD in 2024 150 10
Slide 20: Building strong exploration portfolio in core areas
Building strong exploration portfolio in core areas Upstream Indonesia Gulf of Mexico Guyana, Brazil Alaska • Sakakemang discovery, at least • Partnership with LLOG to develop • Exploration well in Kanuku block spudded in October. An • Accelerate Pikka East and 2 TCF of recoverable resources Leon an
Slide 21: Downstream & Low carbon update
4 Downstream & Low carbon update
Slide 22: World-class position
World-class position Downstream & Low Carbon Refining Chemicals CORUÑA BILBAO • 1 million bbl/d of refining capacity • High performing integrated and regional leader • Highly competitive EU 1Q in Solomon NCM1 TARRAGONA • Capability for more than 35% light benchmark and fully invested for IMO2 feedst
Slide 23: Strategy summary
Strategy summary Downstream & Low Carbon CAPEX(2-3) Refining Trading Chemicals Mobility LPG LAS Low Carbon 2018-2020 SUSTAIN EXPAND EXPAND EXPAND SUSTAIN EXPAND Businesses (€B) • Energy efficiency • Maximize value • Energy efficiency • Customer- • Customer-centricity • Maintain • IMO readiness from
Slide 24: Top quartile position among European peers
Top quartile position among European peers Downstream - Refining (1) 5 refineries optimized as a single system Top quartile position among European peers CORUÑA BILBAO % FCC Equivalent 100% TARRAGONA 1Q 2Q 3Q 4Q 80% 60% PUERTOLLANO 40% CARTAGENA 20% 0% 0 2 4 6 8 10 12 14 Oil pipeline Repsol Oil pipe
Slide 25: IMO: Opportunities to maximize our refining premium
IMO: Opportunities to maximize our refining premium Downstream - Refining Repsol: Top European player in conversion IMO´s spreads effect Gasoil 0.1%S 0.5%S Bunker fuel Heavy Fuel Oil 1.0%S Heavy Fuel Oil 3.5%S 30 30% VLSFO not 20 enough supply 10 0 Gasoil will be 20% needed to comply -10 -20 HSFO sp
Slide 26: Competitive positioning
Competitive positioning Downstream - Chemicals Iberian Peninsula petrochemical sites Dynasol Joint Venture Panjin, China Santander, Spain Alava, Spain Tarragona Houston, USA Altamira, Production capacity (Thousand tons) Mexico Madrid, Spain Base petrochemicals 2.603 Nanjing, China Puertollano Ethyle
Slide 27: More than service stations
More than service stations Downstream- Commercial businesses FUEL MARKET SHARE Transforming and expanding our >4,900 Service Stations 5 SPAIN 37% (#1) 2.5 M Countries Clients served daily Mobility business >1,000 PORTUGAL 26% (#2) 6.5 M ROACE > 20% Operated sites PERU 26% (#2) Loyalty cards WHOLESAL
Slide 28: Strengthening Repsol's position as a multi-energy supplier
Strengthening Repsol’s position as a multi-energy supplier Low Carbon Low carbon Integrated generation business Retail gas & Customer power centric Operated New operated Multi-energy business model supplier Focus on Synergistic liberalized position Profitable Enhancing businesses capabilities 27
Slide 29: Ambition to develop a new operated business
Ambition to develop a new operated business Low Carbon Repsol is swapping a €5-6B exposure to a medium … To an operated and synergistic position in low carbon businesses through GNF… carbon businesses Gas • Non-operated • Operated business with full synergies Natural • No synergies exploited • Lever
Slide 30: Roadmap to 2025
Roadmap to 2025 Low Carbon Wholesale Gas Retail G&P Low carbon generation Top Leverage our industrial self consumption as the Strong brand and ~10M clients base with Technical capabilities and experience in capability largest gas consumer in Spain direct contact managing large scale projects • Creat
Slide 31: Accelerated delivery of 2025 objectives in Low Carbon
Accelerated delivery of 2025 objectives in Low Carbon Low Carbon Viesgo: ~2,350 MW installed capacity ~700 MW Hydro Installed ~1.650 MW CCGT capacity ~3 GW 600 MW Cogeneration Generation WindFloat Atlantic: 5 MW Delta: 335 MW Project pipeline PI: 255 MW ~2 GW Under development Sigma: 204 MW Valdesol
Slide 32: Digitalization & Efficiencies
5 Digitalization & Efficiencies
Slide 33: Digitalization and efficiency as levers for cash flow growth
Digitalization and efficiency as levers for cash flow growth Digitalization & efficiencies CFFO impact (B€) at 50$/Bbl Upstream Downstream 0.9 Better maintenance, reduction of Improving integrated logistics and decommissioning margin, process 0.75 costs and initiatives in gas digitalization commerci
Slide 34: Digitalization and efficiency initiatives
Digitalization and efficiency initiatives Digitalization & efficiencies: Examples • Integrated Operations Center (IOC) Integrated real-time control room identifying trends and anomalies over the medium term, improving safety, production and efficiency in its operations. Successfully tested in United
Slide 35: Financing
a REPSOL FINANCING
Slide 36: Strong liquidity position
Strong liquidity position Financing (B €) (B €) 12 12 10.4 10 10 7.2 1.5 x 8 7.1 7.2 8 6.3 Term deposits w/ immed.availab. * 6 2.6 2.6 5.2 6 Undrawn Credit 4 1.8 4 1.8 Lines 5.2 5.2 2 2 Cash & 3.2 3.2 3.2 Equivalents 1.2 0.1 0.1 0.7 0 0 Liquidity as of 2020 2021 2022 2023 2024 >2025 Liquidity as of
Slide 37: Guidance 2020
a REPSOL Guidance 2020
Slide 38: Focus on operational performance and shareholder remuneration
Focus on operational performance and shareholder remuneration Guidance 2020 FY2020 GUIDANCE Dividend 1 €/share • 5% dividend increase Shareholder remuneration Scrip buy-back 100 % • Full scrip buy-back Capital reduction 5% • Subject to the approval of the AGM Production ~ 700 kboed • Value over volu
Slide 39: Conclusions & Key targets
8 Conclusions & Key targets
Slide 40: On track to deliver 2020 strategic objectives
On track to deliver 2020 strategic objectives Conclusions & key targets 1. Increasing shareholders returns 2. Growing our portfolio profitability • Removing dilution associated to the scrip dividend • Strong OCF generation: on track to deliver 2020 and increasing our dividend in 2018 and 2019 object
Slide 41: Key metrics to 2020 @ $50/Bbl Brent flat
Key metrics to 2020 @ $50/Bbl Brent flat Conclusions & key targets Production CFFO EPS DPS 2.6% CAGR +€1.9B growth +€0.6/share growth 8% CAGR CAGR DPS paid kboe/d 2.6% €B EPS on year €/share €/share CAGR +8% 750 CAGR +12% CAGR +12% 695 0.8 1.0 6.5 2.0 4.6 1.4 0.2 2017 2020 20171 2020 20171 2020 2017
Slide 42: Historic data book
9 Historic data book
Slide 43: Environment and Repsol group
Environment and Repsol group Historic data book MACRO ENVIRONMENT International References Unit 2017 2018 2019 Spreads vs. Brent ($/bbl) 2017 2018 2019 Brent ($/Bbl) 54.2 71.3 64.2 Maya - Brent [9.7] [10.6] [11.1] WTI ($/Bbl) 50.9 64,9 57.0 Ural - Brent [0.9] [1.1] [0.4] Henry Hub ($/MBtu) 3.1 3.1 2
Slide 44: Upstream
Upstream Historic data book Production Proven reserves Kboe/d Mboe 2017 2018 2019 2017 2018 2019 Main figures (M€) 2017 2018 2019 Europe 51 60 61 59 102 88 Adjusted Net Income 632 1,325 1,050 Latin America 348 342 333 1,490 1,419 1,196 EBIT 1,009 2,514 1,969 North America 174 175 182 504 535 619 EBI
Slide 45: Downstream
Downstream Historic data book Downstream Assets Refining capacity Refining Converson index (%) Businesss Unit 2017 2018 2019 (kbbl/d) Spain 896 63 Refining Bilbao (Petronor) 220 63 Distillation utilization Tarragona 186 44 Spain % 93.6 92.9 88 Coruña 120 66 Peru % 89.8 81.7 74.8 Puertollano 150 66 C
Slide 46: Repsol Investor Relations
Investor Update March 2020 Repsol Investor Relations investorsrelations@repsol.com 45 45