Repsol Sa · BME:REP
Repsol Sa — Investor Presentation (August 2021)
56 slides from Repsol Sa's investor presentation, August 2021
Slide 1: Driving growth and value
August 2021 Driving growth and value 1
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2021 This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to tr
Slide 3: Strategic Plan 2021-2025: Delivering a compelling investment case into the Transition
Strategic Plan 2021-2025: Delivering a compelling investment case into the Transition ‒ A legacy double-geared engine providing cash-flow and solid foundations for the Transition ‒ Profitable business platforms with leading advantaged positions: Iberia & Downstream ‒ New operating model, catalyzing
Slide 4: Index
Index 01. Repsol: New corporate model 02. Path to 2030 03. Strategy 2021-2025 04. Business strategies 05. Stepping up energy transition 06. SP summary 07. Delivery 1Q21
Slide 5: Repsol: New corporate model
Repsol: New corporate model 01.
Slide 6: New Repsol corporate model for increased accountability and value transparency
Early movement: New Repsol corporate model for increased accountability and value transparency REPSOL Group Group Corporate Center (Governance, Financial and Strategic Management and Integration synergies) Group Global Services (Efficiency and Scale) Industrial Customer-centric Low-carbon generation
Slide 7: Clear logic for Repsol new corporate model
Clear logic for Repsol new corporate model Clear differentiation of businesses profiles and equity stories within the Group Alignment of cost of capital with business profile for each business Ability to develop appropriate partnerships for each business Value crystallization and transparency Accele
Slide 8: Path to 2030
Path to 2030 02.
Slide 9: Ambitious transformation journey to thrive in Energy Transition
Ambitious transformation journey to thrive in Energy Transition De-carbonize New operating the portfolio Profitable Four verticals model FCF growth New partnerships Path to 2030 Advantaged Value transformation crystallization Towards Net Zero emissions Leading investor proposition 9
Slide 10: Repsol 2030: A more sustainable, balanced and profitable company
Repsol 2030: A more sustainable, balanced and profitable company Transforming the company's portfolio Strong cash-flow growth CE 2019 CE 2025 CE 2030 FCF (B€) 5 % Low Carbon Retail Customer centric business Renewables Industrial transformation (circularity, H2 & e-fuels) 10 % Low Carbon Industrial U
Slide 11: Strategy 2021-25
Strategy 2021-25: 03.
Slide 12: Delivering financial targets while transforming the company
Delivering financial targets while transforming the company Ambition 21-25 2021 - 2022 2023 - 2025 Ensuring strong Accelerating transformation and delivering performance and financial strength growth In an uncertain economic and commodities environment ‒ Efficiency & capital discipline ‒ Portfolio o
Slide 13: Scenario assumptions
Scenario assumptions Projections (2021-2025) 2021 2022 2023 2024 2025 Brent price ($/bbl) 50 50 50 50 50 Henry Hub Price ($/Mbtu) 2.5 2.5 2.5 2.5 2.5 Repsol Refining Margin indicator ($/bbl) 3.5 4.0 4.5 5.2 5.8 Spanish average power price (€/MWh) 42.5 42.5 42.5 42.5 42.5 ± $10/bbl BRENT ± $0.5/Mbtu
Slide 14: Strong growth in per share metrics driving valuation upsides
Strong growth in per share metrics driving valuation upsides +10%CAGR Adjusted Net Income per share 2.2 0.8 Adjusted1 2019 2025 Adjusted1 2019 2025 Adjusted1 2019 2025 Acid scenario @$40/bbl Brent & $2.5/Mbtu HH High scenario @$60/bbl Brent & $3/Mbtu HH 1. 2019 @$50/bbl & $2.5 HH Note: Base scenario
Slide 15: Self-financed plan
Self-financed plan Cash generation 2021-2025 B-even post-dividends ($/bbl) $50/bbl FCF BE (inc. SBB) 18.3 12.6 < $45/bbl Sources Uses FCF BE pre-SBB Corporate Low carbon gen. CCB Industrial Upstream 1. Includes RES portfolio divestments. Other potential inorganic transactions driven by new corporate
Slide 16: Discipline, flexibility and transformation
Discipline, flexibility and transformation Capex 21-25 Building up transformation within 2021-2025 Profitable decarbonization €5.5 B (30% of total CAPEX) Capex to Low Carbon1 projects in 2021-2025 2019 Avg. 2021-2025 5.5 Customer-Centric Business Low carbon Generation Industrial Upstream 2021-25 Low
Slide 17: Legacy and new businesses driving portfolio performance along the Transition
Legacy and new businesses driving portfolio performance along the Transition Contribution to portfolio financial profile 21-25 Capital Employed 2025 21-25 Capital Investment 1. Industrial includes Refining Spain and Peru R&M, Chemicals, Trading & Wholesale Gas businesses Note: Corporate values not c
Slide 18: Leading distribution and clear capital allocation framework
Leading distribution and clear capital allocation framework Capital allocation 21-25 Capital allocation priorities If Price deck 4 Extra shareholder distribution improves 3 Additional Low carbon CAPEX €0.6/sh dividend committed 2 Shareholder distribution @$40/bbl At base case 1 Value CAPEX RESILIENT
Slide 19: Specific gearing target range, preserving a strong financial structure
Specific gearing target range, preserving a strong financial structure 2021-2025 gearing1 25% average Strong Liquidity Position Proforma 2020 (Billion €) €8.2 B Proforma 2020 2021-22 2023-25 Same Debt with strong EBITDA growth Committed Credit lines Cash & Eq. Maturities ‒ Current liquidity covering
Slide 20: Business strategies
Business strategies 04.
Slide 21: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 21
Slide 22: Repsol E&P priorities 2021-25
Repsol E&P priorities 2021-25 1 FCF as a priority (Leading FCF B-even) 2 Resilient Value delivery 3 Focused portfolio 4 Tier 1 CO2 emissions − FCF breakeven <$40/bbl − Top leading project − Value over volume − Emissions intensity − Low capital intensity and profitability • Flexible production level
Slide 23: Focus on capital efficiency and cash generation
Focus on capital efficiency and cash generation Upstream FCF (B€) @50/2.5 FCF BE, Brent ($/bbl) OPEX reduction (B€) Emissions reduction (Mt CO2) 1. In our operated assets, vs. 2018 2. In our operated assets, vs. 2017 23
Slide 24: Focus portfolio and capex allocation: Playing to our core areas
Focus portfolio and capex allocation: Playing to our core areas Upstream Portfolio span reduction → from >25 to <14 countries ambition Highly selective new exploration strategy Successful track record discovering additional resources Alaska Norway in productive basins recently Canada UK ‒ Alaska Nor
Slide 25: Focus portfolio and capex allocation: projects self-funded 21-25
Focus portfolio and capex allocation: projects self-funded 21-25 Upstream Resilient and Flexible capital program Self-funded projects
Slide 26: High grading portfolio supporting carbon intensity reduction
High grading portfolio supporting carbon intensity reduction Repsol to become tier 1 lowest carbon intensity High growth new barrels with lower with a 75% reduction emission intensity Emissions reduction projects in most intensive assets Sakakemang: CCS project in FFD phase with 1.5-2 Mt CO2 per yea
Slide 27: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 27
Slide 28: Maximizing yield and developing the next wave of profitable growth
Maximizing yield and developing the next wave of profitable growth Refining1 Chemicals Trading ‒ ‒ ‒ Maximizing margin across businesses 1 Net Cash Margin 1Q Solomon and Wood Mackenzie Differentiation with high value products Maximize the integration and value from assets through a highly integrated
Slide 29: Solid cashflow generation and new businesses build up
Solid cashflow generation and new businesses build up Industrial FCF (B€) CAPEX (B€) 2025 BE1 reduction >$1.5/bbl CO2 reduction2 by 2025 > 2 Mt CO2 Low carbon 1. For Refining business 2. Scope 1+2+3 emissions 29
Slide 30: Maintaining competitiveness in a complex environment
Maintaining competitiveness in a complex environment Refining Strong focus on Maximizing margins competitiveness increase Reducing breakeven to Refining Margin Indicator support cashflow projections progressively recovering1 Maximizing margins generation / Maximizing margins − Supply chain: Greater
Slide 31: 25/25 decarbonization program with strong contribution to margin improvement and CO2 reduction
25/25 decarbonization program with strong contribution to margin improvement and CO2 reduction Maximizing energy efficiency with attractive returns New low carbon business selected projects C43: Waste & UCOs Investment Capacity Industrial energy efficiency treatment plant 250 kta Sustainable biofuel
Slide 32: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 32
Slide 33: Strong and growing profits and cash generation
Strong and growing profits and cash generation Customer-Centric Businesses Strategy 2021-25 Mobility leader in Key Longstanding Iberian continuous High-growth power foundations Energy Leader customer business transformation Multi-energy Cross-sell to current customers and channels, adding new servic
Slide 34: Launching Repsol's Transversal Loyalty Program
Launching Repsol's Transversal Loyalty Program to orchestrate customer-centric multienergy approach across customer base Engage customers repsol.es >8 M customers Transversal by 2025 loyalty Program >35 M >24 M >10 M 2M Repsol registered Repsol digital Mobility ‒ Integrated customer data Home app En
Slide 35: Growth ambition with strong FCF generation
Growth ambition with strong FCF generation Customer Centric Business Digital customers ('000) EBITDA (B€) FCF (B€) 2020 2025 2019 2020 2025 2019 2020 2025 P&G + 1,100 k 2,000 k Mobility contribution margin (M€) x 1.15 E-Mobility customers Non-oil contribution margin (M€) x 1.25 35
Slide 36: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 36
Slide 37: Developing a competitive RES player with international platforms
Developing a competitive RES player with international platforms Estimated low carbon operating capacity (GW)1 Capex (B€) Gross EBITDA2 (M€) − Launch organic growth – development Phase I of Ready to Build and earlier stage 2019 3.0 Gw assets − Develop RES capabilities and project pipeline − Build an
Slide 38: Strong portfolio of advanced stage projects with short term material growth
Strong portfolio of advanced stage projects with short term material growth and robust profitability Spain Chile Boosting project returns through +3-4% 482MW 1 275 MW management IRR3 PI 175 MW Add. pipeline DELTA 335 MW Elena 2021 (137.5 MW) excellence and scale 2022 (137.5 MW) Castilla y León 2021/
Slide 39: Repsol RES project portfolio in Spain and Chile with attractive economics
Repsol RES project portfolio in Spain and Chile with attractive economics Low carbon generation Wind Solar Levered IRR 10% - 12% SPAIN 12% - 18% CHILE (3 projects) (3 projects) 1. Note 1: Repsol COD 2020-23 projects Levelized Cost of Energy vs. BNEF1 Spain LCOE references. Note 2: Repsol COD 2021-23
Slide 40: Stepping up energy transition
Stepping up energy transition 05.
Slide 41: Decarbonization is an opportunity to build business platforms as technology evolves
Decarbonization is an opportunity to build business platforms as technology evolves 2025-2030 +2030 2020-2025 Advanced biofuels, biogas and recycling Industrial transformation Renewable hydrogen Synthetic fuels (e-fuels) Hybrid plants Renewable generation Stationary energy storage Low carbon power r
Slide 42: Renewable Hydrogen: ambition to become a leader in the Iberian Peninsula
Ambition to become a leader in the Iberian Peninsula Renewable Hydrogen Clear ambition2 to become Iberian leader Multi-technology approach providing flexibility, and optimizing production Electrolysis Biomethane Photoelectrocatalysis in existing SMRs1 proprietary technology Transportation Industrial
Slide 43: Repsol with clear advantages in renewable hydrogen production
Repsol with clear advantages in renewable hydrogen production Renewable Hydrogen Repsol's with an advantageous position resulting in tier#1 LCOH1 ~30% Spain, the best EU location to produce hydrogen with lower vs. a local renewable H2 producer electrolyzers − Renewable H2 production from biomethane
Slide 44: Repsol becoming an advantaged producer
Repsol becoming an advantaged producer Sustainable biofuels Repsol best positioned for sustainable Reaching > 2 Mta of sustainable With a multi-technology and raw biofuels production biofuels in 20301 material approach Sustainable biofuels gross production (Mta) Use of wastes as feedstock Already a
Slide 45: CII evolution: Repsol speeds up the transformation by increasing its carbon reduction targets
CII evolution: Repsol speeds up the transformation by increasing its carbon reduction targets from 20% to 25% by 2030 CII reduction breakdown by decarbonization lever A clear decarbonization pathway towards net zero in 2050 Further Technology evolution and offsetting initiatives supporting Net zero
Slide 46: SP summary
SP summary 06.
Slide 47: Delivering a compelling investment case into the Transition
Delivering a compelling investment case into the Transition Strategic Plan 2021-2025. Driving growth and value with capital discipline FCF generation FCF 21-25: €2.2 B/y Profitable business platforms EPS 25: €1.8/share ‒ 2021-22: Resilience and Strength CFFO/share +7% CAGR 19-25 ‒ 2023-25: Accelerat
Slide 48: Main business value growth and ESG KPIs and commitments
Main business value growth and ESG KPIs and commitments Low-carbon ESG Upstream Industrial Customer-centric generation FCF (B€) 2021-25 @50/2.5 FCF (B€ 5.1 EBITDA (B€) Low-carbon capacity (GW) 2025 12% IIC reduction1 1st quartile in CHRB2 At least 40% of LTI for CEO and senior management linked to D
Slide 49: Delivery 2Q21
Delivery 2Q21 07.
Slide 50: Value-over-volume and better prices compensate lower production
Value-over-volume and better prices compensate lower production Operational highlights – Upstream Production 2Q21 vs. 1Q21 Progress on 14 key projects in SP (Kboe/d) YME • Start-up in 3Q21. 17 kboed net in 2022 Norway Eagle Ford • Re-initiating drilling activity in 2H21 Marcellus • 2 rigs in EF and
Slide 51: Inflection point in Refining. Record-level petrochemical margins
Inflection point in Refining. Record-level petrochemical margins Operational highlights - Industrial • Margin indicator: 1.5 $/bbl 2Q21 vs • Record international margins in 0.2 $ in 1Q21 1H21 Refining Chemicals • Puertollano turnaround in 2Q21 • 2Q21 Utilization: Distillation 71%; Ongoing challengin
Slide 52: Mobility closer to pre-COVID level. Increased Low Carbon generation target to 2025
Mobility closer to pre-COVID level. Increased Low Carbon generation target to 2025 Operational highlights - Commercial and Renewables Sales in Spain service stations vs. 2019 levels Mobility • Sales in Service Stations in Spain -15% vs. 2Q19 (from -22% 1Q21 vs. 1Q19) Increased • End of State of Alar
Slide 53: Renewables pipeline on track and international expansion
Renewables pipeline on track and international expansion Operational highlights - Commercial and Renewables Additional 710 MW by year-end Spain 517 MW • Electricity generated by Repsol +23% YoY PI 20 MW Castilla y León 2021 • Kappa: first solar farm with 126 MW starting operations in April 107 DELTA
Slide 54: Improved outlook to the end of 2021
Improved outlook to the end of 2021 Outlook 2021 Production 590-600 kboed • - 5% vs. previous guidance Refining Margin $2 /bbl Indicator • + €0.3 B vs previous guidance EBITDA CCS ~ €6.1 Bn • ~ 50% higher than in 2020 • + €0.3 B (Low Carbon Platforms) vs. previous guidance Capex ~ €2.9 Bn • Expected
Slide 55: Strong strategic delivery in improving macroeconomic scenario
Strong strategic delivery in improving macroeconomic scenario Conclusions • Adj. Net Income of €488 M 2Q21 vs. €497 M 2Q19 2Q21 results at pre-pandemic • Short term focus on capital discipline and cost efficiency levels • Long term strategy driven by the Energy Transition Increased renewable • Low C
Slide 56: Driving growth and value
August 2021 Driving growth and value 56