Slide 1: OMV Results January – December and Q4 2014
OMV Results January – December and Q4 2014 February 19, 2015 OMV Aktiengesellschaft
Slide 2: 2014 full year results and strategy
2014 full year results and strategy Gerhard Roiss, Chairman of the Executive Board and CEO OMV Aktiengesellschaft
Slide 3: 2014: Year of delivery
2014: Year of delivery Delivery 2014 results ► Production growth 8% y-o-y despite ► Upstream results impacted by lower oil shortfall in Libya price and Libya shortfall ► Shift of asset base to Upstream focus ► Strong Downstream results contribution achieved ahead of schedule ► R&M optimization concl
Slide 4: HSSE: Safety is our top priority
HSSE: Safety is our top priority Strong safety improvement record LTIR 1 OMV Group 0.7 0.7 0.5 -37% 0.4 2011 2012 2013 2014 1 Lost-Time Injury Rate: Number of lost time injuries per 1 mn hours worked 4 | OMV Group, Results January - December and Q4 2014
Slide 5: Difficult market environment 2014
Difficult market environment 2014 Brent oil price in USD/bbl 108 01/2014 ► Collapse of Brent price in H2/14 ► European gas prices continuously weak after record low in H1/14 ► Instability in Middle East and North Africa ► Industry refining margins increased in H2/14 due to falling crude prices ► Str
Slide 6: Financial performance in 2014
Financial performance in 2014 Clean CCS EBIT Exploration and Production in EUR mn Production increase by 8% to 309 kboe/d (2013: 288); 2,645 Q4/14 production: 318 kboe/d Higher depreciation and production costs 2,238 (15)% Gas and Power Positive contribution from renegotiation of gas 2,086 sup
Slide 7: 2014: Delivery of strategic targets as announced in 2011
2014: Delivery of strategic targets as announced in 2011 ► Stabilized production in Romania and Austria at 200-210 kboe/d ► R&M divestment program of EUR 1 bn ► “energize OMV” successfully delivered: +2% points ROACE improvement ► Gas-fired power generation: 1.7 GW on-stream by 2012 ► Nabucc
Slide 8: 2014: Significant milestones achieved
2014: Significant milestones achieved Upstream growth ► Successful build-up of North Sea region position ► Norway hit 50 kboe/d mark ► Exploration success in Wisting – potential of 200-500 mn boe ► Black Sea: 3rd exploration well ongoing Consolidation of Downstream ► Merger of R&M and G&P into singl
Slide 9: Norway ramp-up and Petrobrazi modernization
Selected Highlights 2014 Norway ramp-up and Petrobrazi modernization Norway hit 50 kboe/d, #2 in OMV Petrobrazi modernization meets expectations Upstream portfolio, in kboe/d Clean CCS EBIT 50 45 40 35 30 25 20 15 01/14 03/14 05/14 07/14 09/14 11/14 Week 52 2009 2010 2011 2012 2013 2014 12/14 ► Gudr
Slide 10: Priorities 2015+
Priorities 2015+ ► Mid-term goal: free cash flow Cash and neutrality after dividends dividend ► EUR 1.25 per share for 2014 1; maintaining dividend policy key priority Upstream ► Deliver post-FID projects growth ► Preserve options for long-term growth ► Review of non-core assets Performance ► Effici
Slide 11: Decisive actions to adjust to low oil price environment
Decisive actions to adjust to low oil price environment in EUR bn (~20-35)% ~3.9 ~2.5 - 3.0 ► Re-prioritize investment in mature core Reduce capital ► Re-phase projects expenditure Previous guidance Avg. avg. 2014-16 p.a. 2015-17 p.a. in EUR bn (~25)% ► Focus on Black Sea, North Sea region Reduce an
Slide 12: OMV is resilient in difficult times
OMV is resilient in difficult times Portfolio less sensitive to Balanced result through North Sea region: Increasing oil price drop integration share of E&P cash generation OMV production share, 2014 Share Clean CCS EBIT, Q4/14 Cash generation, 2014 1 Oil Gas Upstream Co&O, Consolidation Rest of Nor
Slide 13: Results Q4/14
Results Q4/14 David C. Davies, Deputy Chairman of the Executive Board and CFO OMV Aktiengesellschaft
Slide 14: Q4/14 Highlights
Q4/14 Highlights Clean CCS EBIT in EUR mn Production at 318 kboe/d, up by 15% 545 Average Brent price down by 30% to USD 77/bbl 443 Lower exploration expenses offset by higher 262 depreciation and production costs in E&P Lower G&P result 257 41 Strong refining performance Gearing ratio a
Slide 15: Economic environment
Economic environment Oil price and EUR/USD Gas prices in EUR/MWh OMV indicator refining margin in USD/bbl 2 140 1.36 1.4 30 28 6 5.2 130 1.25 1.3 24 25 27 5 4.2 120 1.2 23 20 4 109 110 1.1 15 20 15 3 100 1.0 10 2 90 0.9 1.2 80 77 5 1 0.8 70 0.7 0 0 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q4/13 Q1/14 Q2/14 Q3/
Slide 16: Results in Q4/14
Results in Q4/14 in EUR mn Q4/14 Q4/13 Clean CCS net income attributable EBIT (424) 99 n.m. to stockholders 1 in EUR mn Financial result (70) (80) (13)% Profit from ordinary activities (493) 19 n.m. Taxes 150 41 n.m. 348 Effective tax rate 30% (219)% n.m. Net income (344) 59 n.m. Minorities and
Slide 17: Special items and CCS effect
Special items and CCS effect Q4/14 in EUR mn Q4/14 Q4/13 in EUR mn 545 Clean CCS EBIT 545 443 CCS gains/(losses) (296) (43) (296) Clean EBIT 249 400 (12) Personnel related costs (12) (12) (590) Unscheduled depreciation (590) (277) Asset disposals (22) 12 (22) (48) Other (48) (24) (424) Total special
Slide 18: Cash flow
Cash flow 2014 in EUR mn in EUR mn 2014 2013 Net income 613 1,729 (65)% (410) 405 Depreciation and 3,058 2,296 33% amortization Other (410) (548) (25)% 3,058 Sources of funds 3,262 3,476 (6)% (3,910) Change in net working 405 647 (37)% capital components 613 Cash flow from 3,666 4,124 (11)% opera
Slide 19: CAPEX and EBITD
CAPEX and EBITD 2014 in EUR mn Key investments in Q4/14 4,110 3,832 Romania and Austria: drilling, workovers and field redevelopments Field developments in Norway (Edvard Grieg, Gullfaks, Aasta Hansteen and Gudrun) 2,951 3,292 Schiehallion field redevelopment in the UK Maari Growth project i
Slide 20: Exploration and Production Clean EBIT
Exploration and Production Clean EBIT in EUR mn Q4/14 vs. Q3/14 Q4/14 vs. Q4/13 455 (108) (214) 158 75 (53) (37) 262 257 (69) 262 37 (209) 234 Q3/14 Realization Volume Exploration DD&A Other Q4/14 Q4/13 Realization Volume Exploration DD&A Other Q4/14 expenses expenses Lower oil prices by 25% Low
Slide 21: Exploration and Production Key Performance Indicators
Exploration and Production Key Performance Indicators Hydrocarbon production (kboe/d) Q4/14 vs. Q3/14 318 Production up by 2% 311 297 311 277 Norway production ramped-up as two 162 145 163 164 new Gudrun wells came on stream 138 Higher production in Romania 139 149 152 149 154 Q4/13 Q1/14 Q2/1
Slide 22: Exploration and Production OMV Petrom group
Exploration and Production OMV Petrom group Hydrocarbon production (kboe/d) Q4/14 vs. Q3/14 181 182 180 178 182 Clean EBIT at EUR 128 mn (down by 59%) Higher production volumes 87 87 84 84 84 More than offset by lower oil price and higher depreciation 94 95 95 95 97 Q4/13 Q1/14 Q2/14 Q3/14 Q4/
Slide 23: Gas and Power Clean EBIT
Gas and Power Clean EBIT in EUR mn Q4/14 vs. Q4/13 (41) 4 80 0 (2) 41 Q4/13 Supply, Gas logistics Power Other Q4/14 marketing and trading Higher impact of the price revision in Q4/13 than in Q4/14, lower LNG result and weak market environment Positive performance of the power plant Samsun in Tur
Slide 24: Gas and Power Key Performance Indicators
Gas and Power Key Performance Indicators Gas sales and trading volumes in TWh Q4/14 vs. Q4/13 147 132 118 118 Gas sales volumes down by 4% mainly 89 due to lower demand in Austria Gas trading volumes up by 37% Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Decreased net electrical output due to Trading volumes
Slide 25: Refining and Marketing Clean CCS EBIT
Refining and Marketing Clean CCS EBIT in EUR mn Q4/14 vs. Q4/13 10 (4) 90 187 91 Q4/13 Fuels Petrochemicals Marketing Q4/14 Higher OMV indicator refining margin Lower petrochemicals volumes Strict cost management supports marketing result As of Q1/14, figures for 2013 were adjusted according t
Slide 26: Refining and Marketing Key Performance Indicators
Refining and Marketing Key Performance Indicators Refining utilization rate in % Q4/14 vs. Q4/13 103 101 96 90 95 88 92 90 82 Overall refining utilization rate at 59 86%, down by 9% Marketing sales volumes decreased due to Bayernoil divestment Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 West East Slightly l
Slide 27: Financial priorities 2015+
Financial priorities 2015+ Cash Mid-term goal: free cash flow neutrality after dividends 2014 dividend proposal EUR 1.25 per share 1 Dividend Maintain dividend policy of long-term payout ratio of 30% of net income Maintain strong investment grade credit rating Rating Strong balance sheet (
Slide 28: Actions to enhance cash flow
Actions to enhance cash flow Group CAPEX reduced in EUR bn Strong focus on CAPEX and OPEX Previous guidance: efficiency ~3.9 ~2.5 - 3.0 Further ramp-up of Norwegian production ongoing ~3.1 Projects in execution will contribute in the short-term ~0.8 Divestment options under review Average 20
Slide 29: Outcome long-term USD 50/bbl stress test
Outcome long-term USD 50/bbl stress test: Operations resilient, growth path impacted 1 Current operations resilient 2 Growth path would be impacted >80% of current production Slow-down of growth path EBIT positive Re-engineering required for pre-FID Substantially all current projects product
Slide 30: Sensitivities on OMV Group
Sensitivities on OMV Group Operating EBIT cash flow Libyan production Libyan production 2015 impact in EUR mn 100% 0% 100% 0% Brent oil price (+USD 1/bbl) +50 +40 +40 +35 OMV indicator refining +100 +100 +75 +75 margin (+USD 1/bbl) EUR-USD (USD appreciates +250 +200 +185 +170 by 10 US cents) Note: M
Slide 31: Upstream
Upstream Jaap Huijskes, Executive Board member responsible for Upstream OMV Aktiengesellschaft
Slide 32: Highlights 2014
Highlights 2014 309 kboe/d average production 8% production increase (2013: 288 kboe/d) Norway hit 50 kboe/d mark Mature core: Stabilized production at 200-210 kboe/d Norway, Pakistan and New Zealand compensating political unrest in Libya and Yemen 87% reserve replacement rate (three-yea
Slide 33: Operational highlights
Operational highlights Projects update Exploration Gudrun, Norway Maari, New Zealand Black Sea ► Gudrun (Norway) production ramping up ► Seven new licenses offshore Croatia ► Maari Growth (New Zealand): ► Seismic finalized in Gabon and East Abu Dhabi First well on stream ► Successful wells in Norway
Slide 34: Upstream priorities 2015+
Upstream priorities 2015+ Gudrun, Norway Safety and ► Safe operations performance ► Increase operational efficiency ► Flexibility and ► Managing expenditures and optionality Manage investment level cash ► Adjust further if ► Renegotiate key cost elements needed ► Minimize impact on underlying core p
Slide 35: Mid-term CAPEX down by EUR ~0.7 - 1.1 bn p.a.
Mid-term CAPEX down by EUR ~0.7 - 1.1 bn p.a. CAPEX adjustments Planning in a range of scenarios in EUR bn From mid-term recovery to USD 50/bbl for Previous guidance: ~3.1 an extended period Exploration Other projects pre-FID ~2.0 - 2.4 Leverage our investment portfolio mix Workover, drilling,
Slide 36: High focus on reducing cost base
High focus on reducing cost base Strong cost management in recent years 2015 OPEX reduced Tight contractor management Production cost indexed, 2008=100 Purchasing cost reduction 250 High focus on additional cost reduction 200 Benefit from industry deflation Further supplier cost reductio
Slide 37: Mature core: minimizing the decline
Mature core: minimizing the decline Beating the decline Cost / CAPEX reductions have production Production in Romania and Austria, in kboe/d impact, no compromise on HSSE top priority CAGR Prioritized drilling and workover activities -3% Onshore rig count dropping by ~50% -1-2% FRDs 2 in exe
Slide 38: Key projects in execution will be delivered
Key projects in execution will be delivered Schiehallion Aasta Hansteen Adding ~80 kboe/d in the mid-term 80 60 On stream 2017 On stream 2018 40 Peak ~12 kboe/d Peak ~18 kboe/d 20 0 Edvard Grieg 2016 2017 2018 2019 2020 2021 Nawara Aasta Hansteen FRDs Romania Schiehallion Edvard Grieg Nawara On stre
Slide 39: Production guidance
Production guidance Production in kboe/d ~400 kboe/d still within reach, speed of delivery reduced ~400 2 Ramp-up will continue at slower pace Key projects in execution slowed down where possible Up to ~340 Reduced tail-end production in mature core 309 Flexible and robust portfolio 294 ~3
Slide 40: Self funded, profitable growth
Self funded, profitable growth Upstream free cash flow neutral Flexible and financially robust portfolio in the mid-term Self funded expenditure profile Providing flexibility and optionality Resilient even in a prevailing low price environment Strong operating cash flow at USD 50/bbl Cash
Slide 41: E&P going forward
E&P going forward ZERO fatalities North Manage cash flow Sea region Black Deliver growth Sea Optimize portfolio Core Stable core countries Focus on best opportunities North Sea Retain options Sub- Saharan Africa Black Sea High grade E&A Flexibility of Exploration development projects Exploration onl
Slide 42: Downstream
Downstream Manfred Leitner, Executive Board member responsible for Downstream OMV Aktiengesellschaft
Slide 43: Key achievements
Key achievements Downstream Oil: Downstream Gas: Strategic milestones First steps towards completed restructuring Divestments completed Refining capacity reduced by 1/3 Gazprom renegotiation finalized successfully Marketing assets reduced Supply position improved significantly Important
Slide 44: Market environment improved towards year-end
Market environment improved towards year-end Margins picked up significantly Spread increased again OMV indicator refining margin (left axis) Border contract tracker Ethylene/propylene net margin (right axis) CEGH USD/bbl EUR/t EUR/MWh 32 5.5 500 31 30 400 29 4.0 28 27 300 3.0 26 25 200 24 2.0 23 22
Slide 45: Downstream business supports OMV's resilience to lower oil price environment
Downstream business supports OMV’s resilience to lower oil price environment Stable Downstream contribution in Increasing share of Group’s Clean CCS EBIT lower oil price environment % of Group’s Clean CCS EBIT Clean CCS EBIT, in EUR mn 700 600 500 400 ~20% ~30% 300 200 100 0 Average 2011-13 p.a. 201
Slide 46: Petrochemicals integration adds significant value to R&M business
Petrochemicals integration adds significant value to R&M business Petrochemicals business contributes strongly to R&M results OMV increases the petrochemical capacity OMV R&M Clean CCS EBIT in EUR mn in kt/a Benzene and Butadiene Propylene Ethylene Petrochemicals business 2,110 2,190 600 2,050 270 3
Slide 47: Downstream priorities 2015+
Downstream priorities 2015+ Cash Strong free cash flow One downstream organization Integration Strong value chain integration Restructure non-core G&P assets Performance Strong focus on efficiency and operational performance 47 | OMV Group, Results January - December and Q4 2014
Slide 48: Integrated Downstream Oil
Integrated Downstream Oil Robust cash generator Maximize integrated margin through strong Operating cash flow 1 integration: Upstream Retail Petrochemicals 2011 2012 2013 2014 Strengthen refineries competitiveness by increasing cross-site integration Optimized asset base Net assets Enhan
Slide 49: Integrated Downstream Gas
Integrated Downstream Gas Focus on cash generation Improve core business Operating cash flow 1 Maintain gas sales market position in weak demand environment and optimize margin Maximize value of equity gas Strict cost and CAPEX management Mid- 2011 2012 2013 2014 term Reduce asset base Restruc
Slide 50: Outlook and Conclusions
Outlook and Conclusions Gerhard Roiss, Chairman of the Executive Board and CEO OMV Aktiengesellschaft
Slide 51: Outlook 2015
Outlook 2015 Oil price Expectations range between USD 50 to 60/bbl Gas markets Remain challenging – portfolio under review Refining margins Expected to come down from recent highs Marketing volumes Lower product prices expected to support demand Production ~300 1 to ~340 kboe/d CAPEX EUR ~2.5 to 2.8
Slide 52: In a nutshell
In a nutshell Focus on cash flow and dividend Continue to deliver upstream growth Strong focus on CAPEX and OPEX efficiency 52 | OMV Group, Results January - December and Q4 2014
Slide 53: Disclaimer
Disclaimer This document does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract, investment decisions or commitment whatsoever.
Slide 54: OMV Aktiengesellschaft
OV OMV OMV Aktiengesellschaft OuvV Moving more. Moving the future. O M V