Slide 1: OMV Q4 and full-year 2016 conference call
OMV Q4 and full-year 2016 conference call February 16, 2017 Rainer Seele Chairman of the Executive Board and CEO Reinhard Florey Chief Financial Officer The spoken word applies 1/54 | OMV Group
Slide 2: OMV Q4 and full year 2016 conference call, February 16, 2017 2/54 | OMV
OMV Q4 and full year 2016 conference call, February 16, 2017 2/54 | OMV Group
Slide 3: Development of economic environment
OMV Q4 and full year 2016 conference call, February 16, 2017 Rainer Seele Ladies and gentlemen, good morning and thank you for joining us. Let me start with a review of the economic environment in 2016. Slide 3: Development of economic environment In 2016, oil markets were characterized by significa
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OMV Q4 and full year 2016 conference call, February 16, 2017 4/54 | OMV Group
Slide 5: OMV delivered on strategy in 2016
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 4: OMV delivered on strategy in 2016 In such a volatile market environment, OMV stayed on track delivering on its strategy. OMV countered these challenges by successfully achieving important milestones in 2016. First: We reshaped the
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OMV Q4 and full year 2016 conference call, February 16, 2017 6/54 | OMV Group
Slide 7: Strategic steps towards building sustainable Upstream portfolio
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 5: Strategic steps towards building sustainable Upstream portfolio We made significant progress in focusing OMV’s Upstream activities and created a more sustainable portfolio. Our actions comprised divestments, acquisitions and build
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OMV Q4 and full year 2016 conference call, February 16, 2017 8/54 | OMV Group
Slide 9: OMV in Libya: Operations restarted
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 6: OMV in Libya: Operations restarted Let me now come to Libya in more detail. In 2016, OMV restarted production in both the Murzuq and the Sirte basins in Libya. As announced on February 2, 2017 during my visit to Tripoli, OMV acqui
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OMV Q4 and full year 2016 conference call, February 16, 2017 10/54 | OMV Group
Slide 11: Asset swap between Gazprom and OMV progressing well
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 7: Asset swap between Gazprom and OMV progressing well Now let me give you some more color on the asset-swap with Gazprom. In December 2016, we signed the binding basic agreement with Gazprom to swap participations in assets of equiv
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OMV Q4 and full year 2016 conference call, February 16, 2017 12/54 | OMV Group
Slide 13: Optimized Downstream portfolio
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 8: Optimized Downstream portfolio Let’s turn to our Downstream business now. The most important impact on the optimization of Downstream will come from the divestment of OMV Petrol Ofisi. We have received binding offers and we expect
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OMV Q4 and full year 2016 conference call, February 16, 2017 14/54 | OMV Group
Slide 15: Solid performance in 2016
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 9: Solid performance in 2016 Now I would like to discuss some highlights of our operational performance in 2016. OMV realized solid operating results in the full year 2016, despite the decrease in oil and gas prices as well as the re
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OMV Q4 and full year 2016 conference call, February 16, 2017 16/54 | OMV Group
Slide 17: Strict cost discipline
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 10: Strict cost discipline While the business environment did not support our cash flow in 2016, OMV’s good operational performance was the result of our strict cost discipline. Upstream production cost decreased by 12 percent to 11.
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OMV Q4 and full year 2016 conference call, February 16, 2017 18/54 | OMV Group
Slide 19: Financial resilience: oil price free cash flow break-even lowered
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 11: Financial resilience: oil price free cash flow break-even lowered Now let’s come to an essential question: What oil price does OMV need to be free cash flow neutral after dividends? In 2015, the actual oil price averaged 52 US do
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OMV Q4 and full year 2016 conference call, February 16, 2017 20/54 | OMV Group
Slide 21: Financial highlights
OMV Q4 and full year 2016 conference call, February 16, 2017 Reinhard Florey Slide 12: Intro chart Good morning ladies and gentlemen from my side as well. Slide 13: Financial highlights Let me present the financial highlights of the year 2016 to you. In 2016 OMV managed a significant turnaround with
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OMV Q4 and full year 2016 conference call, February 16, 2017 22/54 | OMV Group
Slide 23: Cash flow development
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 14: Cash flow development Now let’s have a closer look at the details of our cash flow development in Q4/2016. At 611 million Euros, cash flow from operating activities was well above Q4/2015. Changes in net working capital resulted
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OMV Q4 and full year 2016 conference call, February 16, 2017 24/54 | OMV Group
Slide 25: Solid operational result
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 15: Solid operational result Let me now turn to the performance of our operating segments. Clean CCS EBIT increased by 68 percent to 315 million Euros in Q4/2016. The increase was mainly driven by Upstream, which rose from minus 62 m
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OMV Q4 and full year 2016 conference call, February 16, 2017 26/54 | OMV Group
Slide 27: Income statement summary
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 16: Income statement summary Here you can see the income statement summary of Q4 and the full year 2016. In Q4 the 396 million deviation between Clean CCS EBIT and reported EBIT was mainly attributable to net special items of 415 mil
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OMV Q4 and full year 2016 conference call, February 16, 2017 28/54 | OMV Group
Slide 29: 2016 special items mainly related to portfolio optimization
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 17: 2016 special items mainly related to portfolio optimization In 2016, we booked negative net special items of 1.4 billion Euros mainly attributable to impairments in both Upstream and Downstream assets. Upstream accounted for 1.1
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OMV Q4 and full year 2016 conference call, February 16, 2017 30/54 | OMV Group
Slide 31: Increased cost savings target for 2017
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 18: Increased cost savings target for 2017 In 2016 OMV made excellent progress implementing the cost-cutting and efficiency program. Strict cost management measures throughout the entire organization led to savings of around 200 mill
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OMV Q4 and full year 2016 conference call, February 16, 2017 32/54 | OMV Group
Slide 33: Capex guidance reduced to EUR 2 bn
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 19: Capex guidance reduced to EUR 2 bn Now let’s have a look at Capex. While we projected CAPEX to come in at 2.4 billion Euros at the beginning of the year, we only spent 1.9 billion Euros. For the next two years, we are planning CA
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OMV Q4 and full year 2016 conference call, February 16, 2017 34/54 | OMV Group
Slide 35: New dividend policy
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 20: New dividend policy Now I would like to introduce our new dividend policy to you. OMV is moving away from targeting a payout ratio of 30 percent to a progressive dividend payment. We are committed to delivering an attractive and
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OMV Q4 and full year 2016 conference call, February 16, 2017 36/54 | OMV Group
Slide 37: Financial steering framework of OMV
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 21: Financial steering framework of OMV The overriding goal of OMV’s financial steering framework is to ensure an attractive shareholder return and to have a stable rating. The two pillars to achieve this goal are value and cash. Val
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OMV Q4 and full year 2016 conference call, February 16, 2017 38/54 | OMV Group
Slide 39: Outlook 2017
OMV Q4 and full year 2016 conference call, February 16, 2017 Rainer Seele Slide 22: Outlook 2017 Let me summarize OMV’s outlook 2017 for you. For the year 2017, OMV expects the average Brent oil price to be at 55 US dollars per barrel of oil. The gas market environment in Europe continues to be ch
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OMV Q4 and full year 2016 conference call, February 16, 2017 40/54 | OMV Group
Slide 41: OMV Vision 2020: We are the energy – for a better life
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 23: OMV Vision 2020: We are the energy – for a better life Let me finalize with OMV’s vision for 2020. In February 2016 we presented our new corporate strategy to you. The main theme was where do we want to go and what are the short
Slide 42: Vision 2020 (continued)
OMV Q4 and full year 2016 conference call, February 16, 2017 according to the International Energy Agency. Considering the pivotal role of OMV’s petrochemical integration with Borealis, we see significant long term growth potential in this area. We believe in mutually benefiting from attractive and
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OMV Q4 and full year 2016 conference call, February 16, 2017 43/54 | OMV Group
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OMV Q4 and full year 2016 conference call, February 16, 2017 44/54 | OMV Group
Slide 45: Quarterly development 2016
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 26: Quarterly development 2016 Last year, oil markets were characterized by significant oversupply. Brent price reached a low at the end January with 26 US dollars per barrel, followed by a strong recovery throughout the year. In 201
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OMV Q4 and full year 2016 conference call, February 16, 2017 46/54 | OMV Group
Slide 47: Strict cost management and higher production turn Q4/2016 Upstream clean EBIT positive
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 27: Strict cost management and higher production turn Q4/2016 Upstream clean EBIT positive Upstream Clean EBIT in Q4/2016 substantially increased from minus 62 million Euros to 85 million Euros in Q4/2015 as a result of lower explora
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OMV Q4 and full year 2016 conference call, February 16, 2017 48/54 | OMV Group
Slide 49: Downstream's performance remained very strong
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 28: Downstream’s performance remained very strong Downstream clean CCS EBIT increased from 247 million Euros to 270 million Euros. This was attributable to a better Downstream Gas result. Downstream Gas clean EBIT reached 24 million
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OMV Q4 and full year 2016 conference call, February 16, 2017 50/54 | OMV Group
Slide 51: Strong balance sheet
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide 29: Strong balance sheet As OMV prepares for the value added growth phase, it can count on a strong and healthy balance sheet. The de-risking of the balance sheet can be seen by the 3.4 billion Euro reduction in tangible and intangib
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OMV Q4 and full year 2016 conference call, February 16, 2017 52/54 | OMV Group
Slide 53: Managing the maturity of debt
OMV Q4 and full year 2016 conference call, February 16, 2017 Slide30: Managing the maturity of debt Maintaining a strong and stable rating is among OMV’s key financial priorities. We are currently rated Baa1 by Moody’ and A- by Fitch. This underscores the credit worthiness of OMV and is in line with
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OMV Q4 and full year 2016 conference call, February 16, 2017 54/54 | OMV Group