Totalenergies Se · EURONEXT:TTE
Totalenergies — Investor Day (September 2013)
46 slides from Totalenergies's investor day presentation, Sep 23, 2013
Slide 1: 2013 Investors' Day: Outlook & objectives
2013 INVESTORS’ DAY Outlook & objectives London, 23 September 2013 Investors’ day – www.total.com 0
Slide 2: Oil & Gas market outlook
Oil & Gas market outlook Helle Kristoffersen Senior Vice President Strategy 2013 Investors’ day – www.total.com 2
Slide 3: Evolving oil supply mix
Evolving oil supply mix Oil supply-demand New supply by technology Mb/d Oil demand 100 +0.6% / year Tight oil Extra heavy oil Deep offshore ~55 Mb/d 50 Conventional Natural decline of fields (including EOR) ~4-5%/y on average Spare capacity 4% 5-6% 4% 2010 2015 2020 2025 2030 Significant investments
Slide 4: Oil price consistent with industry costs and geopolitical risks
Oil price consistent with industry costs and geopolitical risks Rising costs OPEC influence 2030 production capacity Upstream Capital Cost Index* Brent Base 100 in 2000 $/b 260 140 UCCI RoW 220 Brent 100 180 OPEC 60 North 45% 140 America 100 20 2004 2006 2008 2010 2012 • Cost inflation and increasin
Slide 5: Strong growth in global gas demand
Strong growth in global gas demand Evolution of gas supply-demand Bcm CAGR 5000 5,000 Between now and 2030 +2% 4000 4,000 • More than half of additional demand coming from Asia and Middle East 3000 3,000 • Need to add equivalent of existing supply to meet strong demand 2000 2,000 and offset decline
Slide 6: Gas markets vary by region
Gas markets vary by region Supply-demand in Europe Supply-demand in Asia Bcm/y Bcm/y CAGR 1200 1,200 1200 1,200 4% CAGR 800 1.3% 800 LNG imports 400 400 Pipeline imports Regional production 0 0 2012 2020 2030 2012 2020 2030 • Increasing share of spot component • All supply sources necessary in price
Slide 7: LNG, fastest growing gas segment
LNG, fastest growing gas segment LNG demand increasing at 5% per year Mt/y 600 Estimated breakeven of potential projects > 14 $/Mbtu LNG share in gas markets 500 increasing from 11% to 16% 12-14 $/Mbtu 2012-30 400 < 12 $/Mbtu Sanctioned projects offsetting 300 decline 200 North America to become new
Slide 8: Safety & CSR
Safety & CSR Christophe de Margerie Chairman and Chief Executive Officer 2013 Investors’ day – www.total.com 8
Slide 9: Safety and CSR as cornerstones of our activities
Safety and CSR as cornerstones of our activities CSR integrated into strategy to increase acceptability, create opportunities and manage risk Safety central to decision-making process • Emphasis on risk management and operational excellence • Robust policies and procedures to assess, prevent and mit
Slide 10: Upstream
Upstream Christophe de Margerie Chairman and Chief Executive Officer 2013 Investors’ day – www.total.com 10
Slide 11: Entering a new phase of Upstream growth
Entering a new phase of Upstream growth Focusing on execution Delivering new production and cash flow Reducing organic Capex Emphasizing exploration 2013 Investors’ day – www.total.com 11
Slide 12: On track to deliver top-tier projects
On track to deliver top-tier projects Status of major projects Post-2013 start-ups, % EPC progress Start-up Ekofisk South 1H 2014 1H 2014 Nearly doubling number of start-ups in CLOV next 3 years compared to previous 3 years Laggan-Tormore 1H 2014 GLNG 2015 Execution on track, within 7% of target Ofo
Slide 13: High-quality Upstream projects
High-quality Upstream projects Expected return of 2013-17 start-ups in development* IRR (%) 15 Intensive investment program with competitive profitability Peer average New projects accretive to cash flow More than 40% of 2017 Upstream cash flow 10 from operations generated by new projects Long-plate
Slide 14: Production growth targets
Production growth targets Production Mboe/d - Brent price 100 $/b ~3 Mboe/d 2.6 Mboe/d 3 95% of 2017 target in production 2.3 or under development Mboe/d 2 Reducing base decline of 3-4% through long-plateau projects and ramp-ups Upside/Downside 1 • Adco renewal • Novatek equity • Projects under stud
Slide 15: Effectively managing Upstream costs
Effectively managing Upstream costs Technical costs for Total and peers* $/boe 25 Strict cost management More resilient over a range of hydrocarbon prices DD&A/boe increasing with major project start-ups and stabilizing from 2015 0 2005 2010 2015 Lowest technical costs among the Majors * Public data
Slide 16: An industry leader in deep offshore
An industry leader in deep offshore 60% of industry oil discoveries* in past 5 years from deep offshore High tech and high return projects Total to operate 8 FPSOs with ~1.5 Mb/d capacity in 2017, a leading position among Majors 10% of Total’s production, >25% of Upstream results Technological exper
Slide 17: A top-tier position in LNG
A top-tier position in LNG Upstream & downstream LNG positions* Mt/y Highest growth gas segment, led by Asian demand 30 Downstream Shell LNG** From third 20% of Total’s production, parties >25% of Upstream results From equity BG production Exxon BP Leveraging strong upstream 15 and downstream po
Slide 18: 2 major long-plateau projects for the future
2 major long-plateau projects for the future > 25 years > 25 years Net Cash Flow Net Cash Flow Yamal, a competitive LNG project Fort Hills, a robust oil sands project • Giant proved and probable reserves • Giant proved and probable reserves 32 Tcf gas, 196 Mb condensate > 2.5 Bb bitumen • 16.5 Mt/y
Slide 19: Progressing with bold exploration program
Progressing with bold exploration program 2013 discoveries Leading acreage holder in new frontiers* 2013 main new acreage in thousand km2 2013-14 big cat and elephant wells to drill 250 0 TOTAL RDS XOM BP CVX Iraq Taza Ivory Coast CI 100 Gabon Diaba Bolivia Incahuasi-2 Argentina Vaca Muerta Drilling
Slide 20: Reducing organic Capex and increasing free cash flow
Reducing organic Capex and increasing free cash flow Upstream organic Capex Upstream free cash flow** B$ B$ 20 10 0 0 2012 2013 2015 2017 2012 2015 2017 Base* Projects under development Projects under study • Starting-up new projects on-time and in-budget • Cash flow from operations increasing by ~3
Slide 21: Refining & Chemicals
Refining & Chemicals Christophe de Margerie Chairman and Chief Executive Officer 2013 Investors’ day – www.total.com 21
Slide 22: R&C capturing initial benefits from restructuring
R&C capturing initial benefits from restructuring Net operating income 1 B$ Priority to safety and environment +70% Adapt capacities to demand evolution in Europe and focus on integrated platforms 0.6 B$ Expand profitably in Middle East and Asia Consolidate and seize opportunities in the United Stat
Slide 23: Six major platforms shaping the future of R&C
Six major platforms shaping the future of R&C Antwerp Reducing exposure to conversion feedstock imports Valorizing off-gas as feedstock for steam crackers Normandy Reducing petrochemicals capacities Reduced distillation capacity Port Arthur Modernizing key Jubail platform units Upgraded to allow Dae
Slide 24: Reducing footprint in Europe
Reducing footprint in Europe Total’s refining and petrochemicals 2006-13 Total’s European capacity reduction European exposure Base 100 end-2011 -23% -20% 2006 2011 2017 Before end-2011 After end-2011 Disposal Reduction / closure (incl. CEPSA, Fertilizers) Carling: subject to information and/or cons
Slide 25: Capturing synergies and efficiencies
Capturing synergies and efficiencies Synergies Efficiency plans Net operating income Net operating income First synergies in 400 M$ Normandy and Antwerp 91% availability Renegotiated energy Energy efficiency contracts First benefits First benefits of rightsizing from cost central services saving pla
Slide 26: On track to achieve profitability target
On track to achieve profitability target Profitability roadmap ROACE in 2010 environment (ERMI 27 $/t) Efficiencies / synergies +2.5% 13% Portfolio changes +2.5% Major projects Specialty on main chemicals platforms +0.5% +1.5% 9.5% 6% in 2013 Port Arthur Normandy Cepsa 200 M$ Qatar Dunkirk in 2013 o
Slide 27: Growing contribution to Group results
Growing contribution to Group results R&C organic Capex R&C free cash flow* B$ B$, with ERMI = 35 $/t in 2017 3000 -30% 2500 3 20002 2 1500 10001 1 500 0 2012 2013 2015 2017 2012 2015 2017 Strong capital discipline enhancing sustainable contribution * Free cash flow = cash flow from operations - net
Slide 28: Marketing & Services
Marketing & Services Philippe Boisseau President Marketing & Services 2013 Investors’ day – www.total.com 28
Slide 29: Marketing & Services key businesses
Marketing & Services key businesses Worldwide oil products demand growth Worldwide lubricants demand growth -5% OECD 5% decrease increase 25% 40% increase Non-OECD increase 2010 2020 2010 2020 Average retail network market share Fast-growing worldwide • 13%, leader in high return Africa lubricants s
Slide 30: Investing to strengthen and rebalance M&S
Investing to strengthen and rebalance M&S M&S organic Capex Capital employed B$ 2 100% Americas Asia 1 Africa and Middle East Europe and CIS 2012 2013 2015 2017 2012 2017 Marketing & Services restructured to unlock value Excluding New Energies 2013 Investors’ day – www.total.com 30
Slide 31: Growing while delivering high profitability
Growing while delivering high profitability M&S net operating income Adapting in Europe and growing 2 B$ in Africa and Middle East Developing high-return lubricants 1.3 B$ business worldwide Other specialties Focusing on cost management Lubricants Commercial Developing less capital intensive sales b
Slide 32: Maximizing results in Europe
Maximizing results in Europe Net operating income Operating expenses B$ €/t, base 100 in 2012 600 5000.5 -6% Specialties Services Cards 400 300 50 200 100 Access AS24 E-business 0 0 2012 2017 2012 2017 Low price Mid-market High value Optimizing European businesses and focusing on cost reduction 2013
Slide 33: Expanding in high-potential growth markets in Africa and Middle East
Expanding in high-potential growth markets in Africa and Middle East Retail stations Lubricant sales in Africa and Middle East Kt External Organic growth 5,400 growth 400 4,400 2012 2017 2012 2017 Capitalizing on leadership positions 2013 Investors’ day – www.total.com 33
Slide 34: Well-positioned to create value in solar
Well-positioned to create value in solar Photovoltaic global demand Share performance SunPower 55 GW NASDAQ 100 SunPower firmly established Min/Max First Solar, among world leaders Suntech, Trina, Yingli Jan Aug 2013 Differentiated technology 2011 17 GW Aggressive cost reduction plan Strong project
Slide 35: A 5-year plan to increase free cash flow
A 5-year plan to increase free cash flow M&S free cash flow* B$ 1 Marketing activities benefiting from a more intensive investment phase Strengthening leadership in solar 0.5 Delivering over 1 B$ free cash flow by 2017 2012 2015 2017 Including New Energies Excluding New Energies Expanding and rejuve
Slide 36: Corporate
Corporate Patrick de La Chevardière Chief Financial Officer 2013 Investors’ day – www.total.com 36
Slide 37: Strong balance sheet and return to shareholders
Strong balance sheet and return to shareholders Strong balance sheet Adjusted net income and dividend B$ B$ 16 Net debt Adjusted net 100 12 income 8 50 Equity 4 Dividend 0 0 Gearing 22% 23% 21% 24% Payout 50% 45% 42% 48% 2010 2011 2012 June 2010 2011 2012 1H 13 2013* annualized 20-30% target range f
Slide 38: On track to achieve asset sale target
On track to achieve asset sale target Asset sales 2010-to-date asset sales 15-20 B$ Under 15 B$ study Adapting Downstream Monetizing In progress Simplifying non-core portfolio assets (country exit, low % interest…) Completed Other 2010-11 2012 Target to date 2012-14 Reshaping portfolio and unlocking
Slide 39: Organic Capex peaking in 2013
Organic Capex peaking in 2013 Group organic Capex B$ 30 20 Investing with discipline in profitable projects Capex under study flexible 10 Active project management and effective cost control 0 2012 2013 2015 2017 Base* Projects under development Projects under study Ending an intensive investment cy
Slide 40: Accelerating free cash flow growth
Accelerating free cash flow growth Group free cash flow* B$ 15 Accelerating cash flow growth • Production growth 2012 7.5 dividend • Cash accretive Upstream start-ups • Increasing contribution of Downstream End of an intensive investment cycle 2012 2015 2017 Free cash flow to strengthen financial po
Slide 41: Conclusion
Conclusion Christophe de Margerie Chairman and Chief Executive Officer 2013 Investors’ day – www.total.com 41
Slide 42: Building long-term performance
Building long-term performance Allocation of capital employed Group increasingly leveraged to Upstream Upstream benefitting from exploration 2020 2010 and new generation of long-plateau projects Refining & Chemicals more efficient and adapted to markets Marketing & Services expanded and rebalanced U
Slide 43: Focusing on execution and delivery
Focusing on execution and delivery Increasing production Revitalizing Downstream Reducing Capex Delivering free cash flow growth Increasing return to shareholders A clear path forward 2013 Investors’ day – www.total.com 43
Slide 44: Appendix
Appendix ZONE D’IMAGE 2013 Investors’ day – www.total.com 44
Slide 45: Portfolio of major projects
Portfolio of major projects Production Mboe/d - Brent price 100 $/b Projets Countries Capacity (kboe/d) Share Op* Status ~3 Mboe/d Sulige China Gas 50 49% LT test 2.6 Mboe/d Angola LNG Angola LNG 175 13.6% Prod 3 2.3 Mboe/d Kashagan Ph.1 Kazakhstan Liquids 370 16.8% Prod End-2013 OML 58 Upgrade Nige
Slide 46: Disclaimer
Disclaimer This document may contain forward-looking information on the Group (including approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in objectives and trends), as well as forward-looking statements within the meaning of the the statement of income is, dependi