Galp Energia, Sgps S.a. Class B · EURONEXT:GALP

Galp Energia, Sgps S.a. Class B — Galp Energia — 9M 2007 Earnings Presentation

27 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Nov 15, 2007

  1. Slide 1: Nine Months 2007 Results

    NINE MONTHS 2007 RESULTS Lisbon, 15 November 2007

  2. Slide 2: Disclaimer

    DISCLAIMER Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "continue," “should” and similar expres

  3. Slide 3: Market Overview

    MARKET OVERVIEW © galp energia

  4. Slide 4: Weak performance of gasoline markets and USD/EUR drove Euro refining margins down

    WEAK PERFORMANCE OF GASOLINE MARKETS AND USD/EUR DROVE EURO REFINING MARGINS DOWN Rotterdam Cracking and Rotterdam Brent price (Usd/bbl) (Hydro + Aromatics)4 (Usd/bbl) 80 10 75 8 70 6 65 60 4 55 2 50 0 45 40 -2 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Jan-06 Mar-0

  5. Slide 5: Highlights

    HIGHLIGHTS Orn energia

  6. Slide 6: Adjusted EPS increased by 18% to €0.45

    ADJUSTED EPS INCREASED BY 18% TO €0.45 IFRS Adjusted 9M061 9M07 % Ch. € Million 9M061 9M07 % Ch. 9,393 9,136 (2.7%) Sales 9,317 9,132 (2.0%) 818 930 13.6% EBITDA 656 712 8.5% 611 735 20.4% EBIT 458 526 14.7% 30 46 56.8% Income from Associates 30 46 56.8% 448 589 31.6% Net Income 319 377 18.2% 0.54 0

  7. Slide 7: Adjusted EBITDA increased by 9% on a pro forma basis

    ADJUSTED EBITDA INCREASED BY 9% ON A PRO FORMA BASIS • Growth in E&P activity driven by higher production more than compensated lower EBITDA generation in R&M and G&P businesses due to less favorable market conditions Pro forma adjusted EBITDA (M€) 100 (39) 712 (5) 656 1 2 9M 06 E&P R&M G&P 9M 07 1

  8. Slide 8: Business Overview

    BUSINESS OVERVIEW © galp energia

  9. Slide 9: Sustained growth production driven by BBLT field

    SUSTAINED GROWTH PRODUCTION DRIVEN BY BBLT FIELD • Premium to Brent increased from -4.9 Usd/bbl to -0.3 Usd/bbl driven by BBLT lighter crudes • Still a reduced contribution from TL lighter oil Total Equity Production by Field (million bbl) 3.9 1.4 TL 2.4x 1.1 BBLT Kuito 0.7 1.6 0.4 0.0 3Q 06 4Q 06 1

  10. Slide 10: 9M Galp Energia refining margin down 3% in Euro terms

    9M GALP ENERGIA REFINING MARGIN DOWN 3% IN EURO TERMS • Usd depreciation, from 1.24 to 1.34, impacted refining margins in euro terms, from 4.4 to 4.3 Eur/bbl • Q3 07 refining margins down by 32% YoY in Usd and 37% in Euro terms Galp Energia vs Benchmark Refining Margin (Usd/bbl) Spread over Benchmar

  11. Slide 11: Stronger contribution from marketing activities

    STRONGER CONTRIBUTION FROM MARKETING ACTIVITIES • Higher volumes sold in the Portuguese market despite market decrease (-3%) • Sales to direct clients up by 3.2%, increasing the cover ratio of refining throughput to 71% Million tons 9M 2006 9M 2007 % Ch. Refining throughputs 10.4 9.8 (5.7%) Total vo

  12. Slide 12: Natural gas volumes up by 4.6%

    NATURAL GAS VOLUMES UP BY 4.6% • Trading volumes more than compensated lower sales to power companies driven by better hydro conditions in 2007 • Volumes sold to distribution and industrial segments confirming growth potential of Portuguese market Natural gas sales (M m3) Q3 726 3,765 289 H1 1,317 1

  13. Slide 13: Adjusted EBIT increased by 15% on a pro forma basis

    ADJUSTED EBIT INCREASED BY 15% ON A PRO FORMA BASIS • Higher production and crude prices boosted E&P EBIT • Lower R&M results due to depreciation of refining margins in euro terms • Less favorable conditions for trading margins penalized G&P results 9M 2007 Adjusted EBIT1 (M€) 526 145 260 121 E&P R&

  14. Slide 14: Financial Overview

    FINANCIAL OVERVIEW © galp energia

  15. Slide 15: Adjusted EPS increased by 18% to €0.45

    ADJUSTED EPS INCREASED BY 18% TO €0.45 IFRS Adjusted 9M061 9M07 % Ch. € Million 9M061 9M07 % Ch. 9,393 9,136 (2.7%) Sales 9,317 9,132 (2.0%) 818 930 13.6% EBITDA 656 712 8.5% 611 735 20.4% EBIT 458 526 14.7% 30 46 56.8% Income from Associates 30 46 56.8% 448 589 31.6% Net Income 319 377 18.2% 0.54 0

  16. Slide 16: E&P activity responsible for 48% of total capex

    E&P ACTIVITY RESPONSIBLE FOR 48% OF TOTAL CAPEX • Higher E&P capex reflecting increase in exploration and development projects • R&M capex already include part of Porto turnaround and beginning of conversion project • Additional 556 kms of ng distribution network built and 51 thousand clients conver

  17. Slide 17: Operating cash flow more than compensated dividends and capex

    OPERATING CASH FLOW MORE THAN COMPENSATED DIVIDENDS AND CAPEX 9M 2006 (M€) 9M 2007 (M€) - 170 1,448 1,278 Unbundling - 169 976 658 489 Dividends Dividends Operations Operations 472 Capex Capex Sources Uses Sources Uses Net debt reduction 17 Nine months 2007 results

  18. Slide 18: Strong capital structure

    STRONG CAPITAL STRUCTURE Balance Sheet Items (M€) Change vs Change vs Dec. 2006 Jun. 2007 Sept. 2007 Dec. Jun. Fixed Assets 2,413 2,459 2,514 100 55 Strategic Stock 453 477 505 52 28 Other assets (liabilities) (156) (184) (138) 18 46 Working Capital 213 352 208 (5) (144) Net Debt 887 918 718 (169) (

  19. Slide 19: Final Remarks

    FINAL REMARKS © galp energia

  20. Slide 20: Recent achievements

    RECENT ACHIEVEMENTS • 2 new oil discoveries, in Block 14 and 32 in Angola E&P • Conclusion of Tupi Sul appraisal well • Signing of an MoU with PDVSA for development of future projects • Contracts signing for the conversion project with Fluor and Tecnicas R&M Reunidas • First place in Sines port tend

  21. Slide 21: Major oil discovery in Santos Basin

    MAJOR OIL DISCOVERY IN SANTOS BASIN BM-S-11 Reserves@ Mkt Cap Bn BM-S-11 FY06 (Mboe)1 Usd2 Petrobras 65% 15,023 191.8 BG Group 25% 3,532 63.8 Galp Energia 10% 50.4 13.2 Estimated volumes of recoverable light oil and natural gas between 5 and 8 billion barrels3 1 Proved + Probable reserves for BG Gro

  22. Slide 22: Galp Energia - 3rd oil company in the Santos Basin

    GALP ENERGIA - 3rd OIL COMPANY IN THE SANTOS BASIN Galp Energia Stake BM-S-8 BM-S-21/24 14% 20% 86% 80% Galp Energia Others • Petrobras is the operator • More than 10 prospects identified • 2 explorations wells being drilled 22 Nine months 2007 results

  23. Slide 23: Nine Months 2007 Results Presentation – Appendix

    NINE MONTHS 2007 RESULTS PRESENTATION – APPENDIX IRP REALLOCATION

  24. Slide 24: Basis of presentation – recent changes

    BASIS OF PRESENTATION – RECENT CHANGES • In the third quarter of 2007 the method of accounting for IRP, tax on oil revenues payable in Angola, was changed. In order to better specify the nature of costs, this tax – formerly accounted for under other operating costs – was entered as an income tax ite

  25. Slide 25: Changes in 2006 profit and loss

    CHANGES IN 2006 PROFIT AND LOSS 9M2006 9M 2006 Q3 2006 Q3 2006 M€ Change Change Former Actual Former Actual IRP (13) +13 0 (10) +10 0 Adjusted EBIT 515 +13 528 251 +10 261 Taxes (179) (13) (192) (58) (10) (68) Adjusted Net 374 0 374 207 0 207 income E&P Adjusted 26 39 24 34 EBIT IRP reallocation 25

  26. Slide 26: Changes in 1H 2007 profit and loss

    CHANGES IN 1H 2007 PROFIT AND LOSS 1H2007 1H 2007 Q3 2007 M€ Change Former Actual Actual IRP (19) +19 0 0 Adjusted EBIT 360 +19 379 147 Includes 20 M€ of IRP Taxes (107) (19) (126) (53) Adjusted Net 285 0 285 91 income E&P Adjusted 56 75 46 EBIT IRP reallocation 26 Nine months 2007 results

  27. Slide 27: Investor Relations

    Investor Relations Tiago Villas-Boas Tel: +351 21 724 08 66 Fax: +351 21 724 29 65 E-mail: investor.relations@galpenergia.com Website: www.galpenergia.com

Galp Energia — 9M 2007 Earnings Presentation on 6ix