Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Investor Day (February 2020)
46 slides from Galp Energia, Sgps S.a. Class B's investor day presentation, Feb 18, 2020
Slide 1: Capital Markets Day
Slide 2: Cautionary statement
Cautionary statement By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and_ restrictions. This presentation has been prepored by Galp Energia, SGPS, S.A. ("Galp” or the "Compony”) and may be amended and supplemented, but may not be relied u
Slide 3: 2019 in review
2019 in review Another year of strong delivery Upstream Refining & Midstream Commercial Renewables & New Businesses Top ranked in sustainability indexes Start of 2 FPSOs in Brazil and 1in Angola Mozambique Rovuma LNG main EPC awarded Refining efficiency initiatives (+$1/boe) Strong NG & LNG business
Slide 4: A consistent growth path
Aconsistent growth path reflecting a successful strategy execution ] 5-year operating performance 2015 2016 2017 2018 2019 — Ebitda(€ m) — CFFO(€m) ® Ebitda guidance (€ m) Brent (100 basis) —— Ref. margin (100 basis) 4 | Capital Markets Day ~ February 2020 Integrated profile leads to resilient perfo
Slide 5: 01 Strategy Overview
Slide 6: Competitive portfolio for the future of energy
for the future of energy Competitive Energy long-life transition portfolio Increase resilience and competitiveness under different scenarios Invest for growth along Focus on project returns the energy value chain and financial discipline 6 | Capital Markets Day ~ February 2020 ‘4 galp@)
Slide 7: Integrating energy transition across all business units
Integrating energy transition across all business units Refining & Midstream Build a competitive Increase energy Customer centric renewable generation efficiency and adapt approach with unique Value driven and sustainable portfolio to market trends and integrated offer business regulation Low cost p
Slide 8: Upstream to sustain a value driven strategy
to sustain a value driven strategy NPV breakeven <25 $/bbl Technology and best Lowest breakeven amongst Maintain portfolio resilience . . eae practices enabling lower peers and competitiveness . carbon intensity 8 | Capital Markets Day - February 2020 1 Galp’s upstream carbon intensity indicator inc
Slide 9: Top tier projects delivering differentiated growth
Top tier projects delivering differentiated growth Production Targeting initiatives High return wi th supported by to increase value projects, resilient grow Gas weight existing projects extraction to low oil prices c.10% c.309 CAGR 3019-30 from 2025 ; an ] WI Production (kboepd) — {9} oil (prod. +
Slide 10: Refining: continuing to gradually improve
Continuing to gradually Additional improvements! c.0.5 Working towards producing cleaner and more valuable products Implementing digital initiatives to extract more value Aiming to reduce carbon footprint 10 | Capital Markets Day - February 2020 Additional gains on top of the “+$1/boe" initiatives,
Slide 11: "One Galp" client approach
“One Galp” client approach Strong Multi product client and & service asset base solutions a ot . Leverage on existing New value pools Innovation, Integrated network, new trends (mobility, ener digitalisati: d client-centric offer sue . ¥: oy gitalisarion an and opportunities services, new energies)
Slide 12: Build a competitive renewable business
Build a competitive renewable business benefiting from value chain integration ] 10 GW Total installed ) Focus in Iberia while exploring capacity by 2030 other geographies from 2023 ] Renewable power generation (TWh) 20 Operating + under development projects 10 Additional projects _— Expected power
Slide 13: Becoming a leader in Iberian solar PV generation
Becoming a leader in Iberian solar PV generation Capacity! 3.3GW 914 MW operating and 629 MW at an advanced stage of development ° Grid access permits from 2023 >1,800 Premium solar location and potential integration with eq. solar hours power sales per year >10% Equity returns supported by high qua
Slide 14: Reducing carbon intensity
while reducing carbon intensity Develop renewable Increase NG and Improve asset Lower to no carbon CCS and natural energy generation LNG weight in efficiency products offset options portfolio 14 | Capital Markets Day - February 2020 Under development Under analysis gale @)
Slide 15: Capital allocation guidelines
Capital allocation guidelines Balanced investments supporting long-term value creation Investment strategy Investing in sustainable growth across the energy value chain Capex allocation 2020+ Renewables New Businesses Energy transition >40% 10-15% Financial discipline Shareholder distribution Adding
Slide 16: Continue to deliver sustainable value growth
Continue to deliver sustainable value growth Energy transition >40% 10% p.a. Capex 2019-21 Competitive and resilient portfolio with a higher value chain integration Balance reinvestment for growth with increased shareholder remuneration Strict financial and capital allocation guidelines 16 | Capital
Slide 17: 02 Financial Outlook
Slide 18: 2019 strong cash generation keeping a robust financial position
2019 strong cash generation keeping a robust financial position ] Cash Flow (€ m) CFFO up 19% YoY despite challenging refining conditions nears 34) Solid post-dividend cash flow, already considering oe distribution increase 1,890 32) A oo Net debt to Ebitda of 0.7x and reducing El average cost of de
Slide 19: Reshaping the organisation to reflect new business profile
Reshaping the organisation to reflect new business profile r— Previous structure aml I New structure Upstream Significant cash flow growth profile RCA Ebitda 2019: €1,751 m Refining & Midstream Refining with higher volatility Midstream with a stable contribution Refining & Marketing Commercial Lower
Slide 20: Upstream
Upstream Cash engine from existing developments | 2020-22 Cash flow (€ bn) Brent: $65 - 70/bb| 2 [ % Growth % a O° CFFO Capex Mozambique! MESA © Brazil I Angola 20 | Capital Markets Day ~ February 2020 _ Net of project financing Cash flow growth supported by new pre-salt projects with higher cash ma
Slide 21: Refining & Midstream
Refining & Midstream Improving and adapting our asset base | 2020-22 Cash flow (€ bn) Fully capturing $1/boe Galp ref. margin: $4.0 - 5.0/boe refining initiatives, with additional improvements contributing after the period Ebitda expected at >€350 m ve p.a. with Midstream contribution of c.€150 m p.
Slide 22: Commercial
Commercial Unlocking value from a customer driven approach ] 2020-22 Cash flow (€ bn) Higher contribution from an integrated commercial approach 1.0 : Ebitda expected at €400 - 450 mp.a. during 2020-22 0.5 Accelerating investments to tap new value pools 0.0 CFFO Capex © Growth i Recurrent ll Efficie
Slide 23: Renewables & New Businesses
Renewables & New Businesses Accelerating portfolio developments ] 2020-22 Investments (€ bn) ] Solar projects expected returns? (%) 2.9 GW solar PV acquisition, development and construction costs of c.€2.2 bn 2 10 - 15% of Group’s future equity capex, more frontloaded 10% 3.3 GW installed capacity b
Slide 24: Strong cash generation to fund long term growth and distributions
Strong cash generation to fund long term growth and distributions ] Sources & Uses of cash 2020-22! (€ bn) Brent: $65 - 70/bbl Galp ref. margin: $4.0 - 5.0/boe . -_ See Minorities 4 Net capex? 2 O Sources Uses 24 | Capital Markets Day - February 2020 _! See appendix for more information on macro ass
Slide 25: Growth supported by strong financial discipline
Growth supported by strong financial discipline Superior growth from highly Committed to a disciplined competitive portfolio capital allocation and solid financial position 2015 2020E 2025E 25 | Capital Markets Day ~ February 2020 9 galp@
Slide 26: 03 Upstream Update
Slide 27: 2019: successfully executing our upstream strategy
2019: successfully executing our upstream strate P gy WI production 4x higher than 5 years ago WI Production +14% YoY 3 years average RRR of 125% and R/P of 9.3 years Rovuma LNG and 2P Reserves 739 2% YoY Bacalhau first phases mmboe to be sanctioned soon Carbon intensity! 9.4 2C Resources 1 ,680 +1%
Slide 28: Top tier projects to deliver unparalleled growth
Top tier projects to deliver unparallel growth NPVig breakeven <25 ] WI production (kboepd) $/bbl CAGR c.10% wo EAGR CTO% . 2020-22 Axeraull (sanctioned) Sépial Coral FLNG 2022-25 Lula West (pre-sanctioned) | Bacalhau | Rovuma LNG | N -----6-----4---- 2025+ Rovuma LNG (subs. phases) Bacalhau II Suru
Slide 29: Lula & Iracema
Lula & |racema A unique cash generation case... Installed NPV, capacity breakeven! c.1.3 : c.15 mmbpd S/bbl 29 | Capital Markets Day - February 2020 Gale's, Vie ution f gale @)
Slide 30: With further potential to maximise extraction
..with further potential to maximise extraction Tie-back Infill wells and efficient aR P development options | WAG strategy | Field life extension ] Recovery factor! (%) >40% 34% 31% || Previous Current LT ambition estimate estimate 30| Capital Markets Day - February 2020 —_'Galp's view.
Slide 31: Robust contribution from high quality projects
Robust contribution from high quality projects Angola Kaombo South reached plateau in December 2019 Kaombo Brazil Berbigéo Sururu Atapu Sépia Mozambique Highest unit cash margin FPSO in Berb./Sur. ramping-up above expectations Atapu | start-up expected by 2020 and Sépia | by 2021 Sururu appraisal ca
Slide 32: Bacalhau: leveraging next pre-salt growth cycle
to leverage next pre-salt growth cycle NPV breakeven! <35 S/bbl 220 kbpd FPSO FEED contracts already awarded Evaluating development concepts FID expected during 2020 Further appraisal under evaluation Targeting first oil by 2023/24 32 | Capital Markets Day - February 2020 _? Galp's view 2 Considers
Slide 33: Rovuma LNG driving sustainable growth
driving sustainable growth NPVi9 breakeven! Galp WI prod.” <4.5 +40 $/mmbtu kboepd Advancing towards first LNG in 2025 High quality gas driving lower liquefaction costs Preparing subsequent phases 33 | Capital Markets Day — February 2020 1 FOB Mozambique. Galp's view | Capi Y y 2 Considers contribut
Slide 34: Exploration to unlock disruptive growth
to unlock disruptive growth Brazil | Uirapuru 7 | S. Tomé and Principe | Blocks 6, 11 and 12 : Currently drilling the first exploration well (Araucdria S) First exploration well in block 6 ted in 2020 ly 2021 Results expected during 1H20 expected In / early 20 . . Galp operated High potential prospe
Slide 35: Clear and focused value driven strategy
Clear and focused value driven strategy Current cash Upcoming Potentially generators value levers disruptive assets First Brazilian pre-salt wave New Brazilian pre-salt Exploration growth cycle Lula & Iracema Uirapuru Berbigdo / Sururu West Bacalhau S. Tomé and Principe Atapu C-M-791 Sépia Namibia A
Slide 36: 04 Appendix
Slide 37: Macro assumptions and sensitivities
Macro assumptions and sensitivities Galp assumptions 2022E Brent price ($/bbl) 65 (2020) | 70 (2021-22) Galp refining margin ($/boe) 4.0-5.0 EUR:USD 115 Ebitda CFFO FCF Sensitivities (€ m) 2020 - 22E 2020 — 22E 2020 — 22E Brent price $5/bbl 185 - 195 90-100 70 - 80 Refining margin S1/boe 100 - 110 7
Slide 38: 2019 results supported by operational performance
2019 results supported by operational performance | Profit & Loss (€ m) j 1 2019 + 2018 | 2019 } (wo } * IFRS16) * E6P 1,440 1,751 1,616 3n 22% REM 610415. 364.195) (32%) 53 39% rene ae ar rom 98) Associates (1%) Financial results (70) (54) 63 (16) (23%) Taxes (726) (758) (760) 32 A% Non-controlling
Slide 39: 2019 results: reconciliation by new business segments
2019 results Reconciliation considering new business segments As reported (€ m) Pro-forma — new business segments (€ m) - RCA Ebitda 1,751 RCA Ebitda 1,751 Exploration & RCA Ebit 1,189 Upstream RCA Ebit 1,189 Production Associates 36 Associates 36 RCA Ebitda 415 RCA Ebitda 208 Refining & , Refining
Slide 40: 2020 guidance
WI Production growth YoY 13-17% Refining system utilisation 6.90% Conversion units utilisation >95% Oil products sales to direct clients 8.8 —- 9 mton NG and power sales to direct clients 33 - 35 TWh Renewable power generation! >0.8 TWh Note: Refining utilisation considers planned maintenance activi
Slide 41: Debt indicators
Debt indicators | Debt indicators Gross debt! Cash and equivalents Net debt Operating leases (IFRS 16) Net debt to Ebitda? Available credit lines % Debt at a fixed rate 41 | Capital Markets Day ~ February 2020 | Debt reimbursement (€ m) 31 Dec. i 2018 2019 800 52% 40% 2020 2022 2023 =@ 31 Dec 2019 I
Slide 42: Galp reserves and resources
Galp reserves and resources Reserves (mmboe) ?P 2P 3P Contingent resources (mmboe) 1c 2c 3c Prospective resources (mmboe) Unrisked Risked 42 | Capital Markets Day ~ February 2020 Note: All fi Contingent er 2018 2019 389 404 755 739 985 982 2018 2019 425 498 1,658 1,680 3,671 3,394 2018 2019 4,303 4,
Slide 43: E&P projects: Galp's participation in key areas
ESP projects Galp’s participation in key areas Brazil Angola SGo Tomé and Principe BM-S-11 Lula 9.2% Block 14 BBLT TL Kuito 9% Block 6 45% (oper.) BM-S-11 Iracema 10% Block 14k Lianzi 4.5% Block 11 20% BM-S-11A BerbigGo 10%! Block 32 Kaombo 5% Block 12 20% BM-S-1IA Sururu 10%! BMrS-TIA Atapu 17% Moz
Slide 44: Galp's Executive Committee
Galp’s Executive Committee CEO Carlos Gomes da Silva Over 25 years of experience in Oil & Gas and a Galp Board member since 2007. Former Board executive for more than 17 years in the energy and beverage industries. ©6009 COO Upstream COO Refining & COO Commercial COO Renewables coo Midstream & New B
Slide 45: Acronyms
Acronyms $(or USD) Dollar % Percentage 6 ‘And @ At € (or EUR) Euro + Plus < Below > Above Contingent resources Proved reserves Proved and probable reserves Proved, probable and possible reserves Business to business Business to consumer Barrel Benguela-Belize-Lobito-Tomboco Billion Barrel of oil equ
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