Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Investor Presentation (March 2022)
70 slides from Omv Petrom Sa's investor presentation, March 2022
Slide 1: Capital Market Story
Capital Market Story March 2022 OMV Petrom S.A.
Slide 2: Disclaimer
Disclaimer This presentation does not, and is not intended to, constitute or form part of, and None of the future projections, expectations, estimates or prospects in this should not be construed as, constituting or forming part of, any actual offer to sell presentation, including (without being lim
Slide 3: Contents
Contents 1 | Investment proposition 2 | Strategy 2030 3 | Q4/21 and FY21 results review 4 | Outlook 5 | Appendix All figures throughout this presentation refer to OMV Petrom Group (herein after also referred to as “the Group”), unless otherwise stated; figures are rounded, and they may not add up. T
Slide 4: Investment proposition
Investment proposition OMV Petrom S.A.
Slide 5: OMV Petrom investment proposition: growth, dividends and sustainability
OMV Petrom investment proposition: growth, dividends and sustainability Strong value creation Strong balance sheet Reduce carbon footprint Gearing ratio below 20% through the Net zero operations by 2050 period Rigorous capital discipline Sustainability at the core of our business CAPEX of EUR 11 bn1
Slide 6: Committed to highly competitive dividend distribution over the strategic cycle
Committed to highly competitive dividend distribution over the strategic cycle Dividend increase Special dividends Dividends p.a. on average % of operating cash flow1 In favorable market environment, at management discretion, provided that our 5%-10% CAPEX plans are funded. € ~40% DPS Dividend yield
Slide 7: Our business model
Our business model Moldova Ukraine Romania 69 Moldova Romania 160 48% 62% Production 1P reserves Black Sea 46 mn boe 419 mn boe 401 Refinery Serbia 52% 38% Gas-fired power plant Gas Oil 63 94 Bulgaria Bulgaria - Han Asparuh Bulgaria Refining & Marketing Gas & Power ► Petrobrazi refinery, 4.5 mn t/yr
Slide 8: Shareholder structure and capital market environment
Shareholder structure and capital market environment OMV Petrom S.A. shareholder structure1 Share price performance6 % Index Jan 2018 = 100 28% 51% 21% Share information Bucharest Stock Exchange Symbol SNP OMV2: Austria’s leading integrated international oil and gas company Ordinary shares 56,644,10
Slide 9: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 10: OMV Petrom: transforming for a lower carbon future
OMV Petrom: transforming for a lower carbon future We will lead the energy transition in South-East Europe, capitalizing on emerging market opportunities Romania is among the fastest growing economies in Europe, driving increasing energy demand OMV Petrom is well placed to meet this demand wit
Slide 11: OMV Petrom Strategy 2030: Transforming for a lower carbon future
OMV Petrom Strategy 2030: Transforming for a lower carbon future Strong capital discipline & dividend policy Transition to low and zero carbon Energy transition leader for Romania and SEE Optimize traditional Grow regional business gas Innovation & People & Responsible Digitalization Communities ope
Slide 12: OMV Petrom: Building a diversified, integrated energy transition business
OMV Petrom: Building a diversified, integrated energy transition business OMV Petrom portfolio 2030 Clean CCS EBIT CAPEX % % 1 7 15 35 Renewable power Gas Biofuels 35 Gas based Alternative 20 power mobility 100 92 Fuels CCU&S Adding 50 45 5 low carbon Blue and Oil business activities green H2 by 203
Slide 13: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 14: Romania is one of Europe's fastest growing economies, in a rapidly changing energy context
Romania is one of Europe’s fastest growing economies, in a rapidly changing energy context European energy environment is going through Romanian GDP per capita set to significant transformation grow1 CAGR, % 4.3 3.4 Energy security Fit for 55 2.3 1.5 0.4 -0.5 2010-20 2021-30 Romania Other SEE EU Tec
Slide 15: Strong growth in energy demand in Romania to 2030
Strong growth in energy demand in Romania to 2030 Gas - household Power - household Gas demand Power demand consumption1 consumption1 Romania2 Romania2 MWh per capita MWh per capita TWh TWh 2.3 Romania Other SEE +20% -10% EU 1.7 1.6 1.5 121 +10% 1.0 +10% 60 0.4 2019 2019 2019 2030 2040 2019 2030 204
Slide 16: Economic growth and rising living standards drive fuel consumption growth to 2030
Economic growth and rising living standards drive fuel consumption growth to 2030 Motorization rate1 Diesel demand2,3 Gasoline demand2,3 Jet demand2,3 cars/1000 inhabitants mn t mn t mn t +20% +10% +5% -30% -15% +10% 12.9 2.6 1.1 570 1.0 2.4 0.9 10.8 2.2 440 9.0 360 Fossil Bio 2019 2019 2030 2040 20
Slide 17: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 18: Key directions to decarbonization
Key directions to decarbonization Decarbonize current operations Expand lower carbon gas business Pursue new low and zero carbon business opportunities 18 | OMV Petrom Capital Market Story – March 2022
Slide 19: Paving the way to Net Zero operations in 2050
Paving the way to Net Zero operations in 2050 Scope 1 – 21 emissions Scope 1 – 2 carbon intensity2 mn t CO2 eq reduction % 4.9 -50% E&P Refining Power 4.3 -30% > 15% > 20% Gas & Power Refining & Marketing Exploration & Production > 70% 2010 2019 2030 -30% Actions aimed at reducing Scope 1 & 2 by 203
Slide 20: Carbon intensity of energy supply to drop ~20% by 2030
Carbon intensity of energy supply to drop ~20% by 2030 Scope 1 – 3 Net carbon intensity of energy supply g CO2 eq/MJ -35% 80 -20% 70 ~ 20% reduction in Scope 1-3 carbon emissions1 EU Taxonomy eligible CAPEX to reach 35%2 Lower and zero carbon energy for customers, to account for ~60% in total
Slide 21: Photovoltaic: capturing Romania's solar potential
Well positioned to capture Romania's solar potential and develop a renewable power portfolio Photovoltaic Renewable Opportunities OMV Petrom target total capacity, power including partnerships, GW Photovoltaic ► Romania: the highest solar potential in the region ► > 10% contribution to the 2030 tota
Slide 22: Biofuels to exceed 15% in our total fuel production in 2030
Biofuels to exceed 15% in our total fuel production in 2030 Biofuels Biofuel Opportunities OMV Petrom target capacity, kt/year Advanced ethanol: ► Romania: unique combination of straw availability and cost Cellulosic ethanol ► Upgrading agricultural residues with potential for carbon- 0 50 150 from
Slide 23: Future mobility: capturing new energy mix opportunities
Future mobility: capturing new energy mix opportunities Electro Mobility Charging points with alternative fuels Grow e-mobility offer and become the preferred partner for electric fleets > 500 H2 mobility Active contribution to the development of H2 mobility - solution to decarbonize heavy duty tran
Slide 24: Unique opportunities in new energy technologies
Unique opportunities in new energy technologies Carbon capture, utilization & storage Hydrogen ► Romania: significant on- & offshore long-term CO2 storage ► Romania: gas production and renewable energy availability - potential to be evaluated opportunity for blue and green H2 production ► OMV Petrom
Slide 25: Investing in low and zero carbon businesses generating attractive return
Investing in low and zero carbon businesses generating attractive return Future mobility (EV, H2, Gas) Capex1 Biofuels New technologies ~EUR 3.7 bn (CCS, H2 etc.) IRR 9-15% Renewable power 1 Projects selection and prioritization will be based on risk and return assessments, including regulatory deve
Slide 26: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 27: Neptun Deep: a strategic gas project for OMV Petrom
Neptun Deep: a strategic gas project for OMV Petrom OMV Petrom’s perspective1 FID2 2022/23 Estimated ~50 end-year recoverable resources bcm First Gas2 2026/27 Net to OMV Petrom Production at plateau ~70 Development CAPEX <2 Neptun Deep kboe/d EUR bn Net to OMV Net to OMV Petrom Petrom Black Sea Op
Slide 28: Build additional opportunities in the Black Sea
Build additional opportunities in the Black Sea New offshore exploration wells 2-4 By 2030 Exploration expenditures EUR mn ~30 Annual average 2022-2030 Bulgaria – Han Asparuh OMV Petrom (42.9%), TotalEnergies (57.1% Operator) Black Sea Status: 5,000 km2 3D seismic data processing Bulgaria - Han
Slide 29: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 30: Maximize potential of current E&P assets
Maximize potential of current E&P assets Focus on most profitable Value over volume Strict cost management barrels Maximize economic recovery: Enhance competitiveness Portfolio optimization through cost optimization > 400 workovers p.a. Disciplined approach on Streamline footprint and ca
Slide 31: Transforming while delivering strong cash flows
Transforming while delivering strong cash flows Hydrocarbon production Production cost Operating cash flow kboe/d USD/boe USD/boe > 160 -35% 138 > 5% 30% ~13 CAGR 11 ~100 46% 50% ~7 11 70% 54% 50% 2020 2025 2030 2020 2025 2030 2020 2025 2030 Gas Oil 31 | OMV Petrom Capital Market Story – March 2022
Slide 32: Petrobrazi to capture demand growth
Petrobrazi to capture demand growth Refinery utilization1 > 95 % Annual average 2022-2030 Expand aromatics kt/year +50 2026 Black liquid products yield2 -50% 2030 vs 2020 Bottom of the barrel upgrade3 ~200 kt/year 2030 1 Refers to crude distillation unit; 2 Fuel oil yield decreases from 6% in 2020;
Slide 33: Dual brand strategy to drive new value
Dual brand strategy to drive new value Customer focus Throughput per filling station1 Profitability per filling station2 Non-fuel business margin2 mn l k EUR EUR mn 20% 20% 100% 5 80 2020 2025 2030 2020 2025 2030 2020 2025 2030 1 In Romania ; 2 Data refer to OMV Petrom operating region which include
Slide 34: Mobility services of the future
Mobility services of the future #The future is diverse #Mobility and service hub #Digitally enabled smart mobility Customer access – is a competitive Service stations – enable our network One single digital gate to our brand – advantage which will allow us to make to increase receptiveness to custom
Slide 35: Support gas and power customers in their energy transition
Support gas and power customers in their energy transition Total gas sales TWh 70 2030 Customers increase 20x 2030 vs 2020 Net electrical output TWh/year > 3.5 Average 2022-2030 Green power sales volume % in total > 20% 2030 35 | OMV Petrom Capital Market Story – March 2022
Slide 36: Strategy 2030: Transforming for a lower carbon future
1 | Strategy overview 2 | Energy context 3 | Transition to low and zero carbon Strategy 2030: 4 | Grow regional gas Transforming for a 5 | Optimize traditional business lower carbon future 6 | Financial frame OMV Petrom S.A.
Slide 37: Our strategy is enabled by a resilient financial frame
Our strategy is enabled by a resilient financial frame Rigorous capital Strong financial Attractive returns to discipline performance shareholders CAPEX1 of ~EUR 11 bn We target more than 5%-10% p.a. dividend ~35% CAPEX for low & double clean CCS EBIT growth zero carbon business by 20302 D
Slide 38: Rigorous capital discipline underpins strategic directions
Rigorous capital discipline underpins strategic directions Average annual CAPEX per strategic pillar CAPEX breakdown per business segment EUR bn EUR bn 80% 1.3 1.3 1.1 1.1 IRR > 9% 0.7 0.7 IRR >12% IRR > 12% 2017-2021 2022-2025 2026-2030 2017-2021 2022-2025 2026-2030 Low and zero carbon Gas & Power
Slide 39: Strong financial performance across the entire business
Strong financial performance across the entire business Clean CCS EBIT Clean CCS EBIT Clean CCS ROACE per strategic pillar1 per business segment1 % EUR bn % > 1.5 5 > 12 40 9 ~ 0.7 7 10 0.5 60 55 33 67 30 2020 2025 2030 2020 2025 2030 2020 2025 2030 Low and zero carbon Gas & Power Regional gas Refin
Slide 40: Resilience under downside-price scenario
Resilience under downside-price scenario1 Clean CCS EBIT EUR bn Base case Downside scenario Under downside price scenario: > 1.5 2030 Clean CCS EBIT to double versus 2020 Commitment to pay progressive dividends ~1.0 maintained 0.7 CAPEX plans largely unchanged by 2030 0.5 0.5 0.4 Gearing rat
Slide 41: We deliver sustainable long-term value for our shareholders
We deliver sustainable long-term value for our shareholders Sustainable long-term value Attractive shareholders returns Delivering ~35% CAPEX for low & zero carbon sustainable 5% - 10% p.a. growth in base dividend Clean CCS EBIT more than double shareholder Potential special dividends by 203
Slide 42: Sensitivities and price assumptions
Sensitivities and price assumptions 2022 sensitivities EBIT impact Price assumptions2 2022 - 2030 Brent oil price USD +1/bbl ~EUR +17 mn Brent oil 65 - 70 USD/bbl Equity gas price EUR +1/MWh ~EUR +10-151 mn Indicator refining margin 5-6 USD/bbl OMV Petrom indicator USD +1/bbl ~EUR +25 mn CO2 55 - 10
Slide 43: Q4/21 and FY21 results review
Q4/21 and FY21 results review OMV Petrom S.A.
Slide 44: Increasing, but still volatile commodity prices
Increasing, but still volatile commodity prices Oil prices FX OMV Petrom indicator refining margin USD/bbl RON/USD, RON/EUR USD/bbl 7.2 7.5 4.9 4.9 4.9 4.9 4.9 4.1 4.1 4.2 4.3 4.0 80 4.3 74 71 78 69 67 61 60 2.8 44 44 2.0 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Avg USD/RON Avg EU
Slide 45: Romanian environment recovered to pre-COVID levels; increasing inflationary and regulatory pressure
Romanian environment recovered to pre-COVID levels; increasing inflationary and regulatory pressure Strong GDP growth; GDP: 20211: 5.6% yoy; 2022e2: +4.2% yoy CPI on an upward trend CPI: Dec 21/Dec 201: 8.2%; 2022e: 9.6% (NBR) Recent regulatory Temporary measures related to high gas and change
Slide 46: Key messages Q4/21
Key messages Q4/21 Strong financial performance Clean CCS Operating result Operating Cash Flow Clean CCS ROACE RON 1.5 bn RON 2.0 bn 12.7% +222% yoy +62% yoy vs. 6.4% in Q4/20 Good operational performance Strategic focus Dividend proposal1: 0.0341/share, 10% up yoy Record high quarterly Brazi po
Slide 47: Operational performance reflects recovering market demand in a volatile environment
Operational performance reflects recovering market demand in a volatile environment Exploration and production Refining and Marketing Gas and Power Hydrocarbon production Refinery utilization rate Gas sales volumes kboe/d % TWh +5% -7% -13% -3% +1% 100 101 14.4 13.2 12.3 140 139 134 96 95 11.2 11.1
Slide 48: CAPEX ramping up
CAPEX ramping up Group organic CAPEX1 RON bn 2021 2022E +40% RON 2.8 bn: Up to RON ~4.0 bn: Organic <4.0 CAPEX 36 new wells and sidetracks; Wells and sidetracks: ~60; ~600 -7% ~700 workovers workovers 3.0 Continued investments in Coke drums replacement 2.8 modernization of the current
Slide 49: Strategy 2030 – focus areas in 2022
Strategy 2030 – focus areas in 2022 Transition to low and Alternative mobility: ~100 recharging stations to zero carbon be installed Renewable power: develop the portfolio Bioethanol: first steps towards producing second generation bioethanol Grow regional gas Neptun: FID in 2023 Bulgaria:
Slide 50: Income Statement: results supported by strong asset utilization and demand recovery
Income Statement: results mainly supported by strong asset utilization and demand recovery Clean CCS Operating Result RON bn +90% 4.3 Q4/21 Clean CCS Operating Result reflects: +222% 2.3 ► Higher oil prices and refining margins 1.5 0.5 ► Excellent power performance Q4/20 Q4/21 2020 2021 Co&O and C
Slide 51: Clean CCS Operating Results improved on oil and power businesses
Clean CCS Operating Results improved on oil and power businesses E&P RON mn -103 -65 588 Realized crude price +88% -26 Higher gas price, offset by royalties and gas overtaxation 755 Positive FX effect on revenues Hydrocarbon sales -12% 26 Higher production costs Q4/20 Market effects1 Volum
Slide 52: Clean CCS Operating Results: improved oil price
Clean CCS Operating Results: improved oil price E&P RON mn Realized crude price +75% -640 -49 1,814 -96 Hydrocarbon sales -11% 2,592 Higher production costs Higher exploration expenses 7 Negative FX effect 2020 Market effects1 Volume Exploration Other 2021 R&M and G&P RON mn Significantl
Slide 53: Strong cash flow generation
Strong cash flow generation Cash Flow from Operating Activities RON bn +26% 7.0 Q4/21 Cash Flow from Operating Activities: 5.6 +62% ► Increase driven by Operating Result 4.6 7.4 2.0 ► Positive NWC, lower yoy 1.2 1.0 2.0 1.0 0.2 0.0 -0.4 Q4/20 Q4/21 2020 2021 Sources of funds Net Working Capital Fr
Slide 54: 2021 Dividend proposal: RON 1,932 mn
2021 Dividend proposal: RON 1,932 mn DPS1 2021: RON 0.0341, +10% yoy Dividend yield2 2021: 6.8%, (2020: 8.5%) Total shareholder return1,2 2021: +46% (2020: -12%) DPS Dividend yield1,2 2021 Financials 2021 Payout ratio RON/share % RON mn % 9.0 2,864 8.5 7.0 6.9 6.8 1,932 0.034 67% 0.027 0.031 0.0
Slide 55: Exploration & Production KPIs
Exploration & Production KPIs Production cost Key drivers 2021 vs. 2020 +17% USD/boe 12.73 10.90 11.18 10.90 10.88 Lower production available for sale Increased expenses Unfavorable FX Divestment of 40 marginal oil and gas fields in Romania 2017 2018 2019 2020 2021 Hydrocarbon production kbo
Slide 56: Refining & Marketing KPIs
Refining & Marketing KPIs OMV Petrom Indicator refining margin Key drivers 2021 vs. 2020 USD/bbl 7.75 +90% 6.28 5.47 Refining margin +90% due to better products spreads, 4.67 mainly for gasoline 2.89 2017 2018 2019 2020 2021 Retail sales volumes (mn t) and Retail Operating Result per filling stati
Slide 57: Gas & Power KPIs
Gas & Power KPIs Gas sales volumes Key drivers 2021 vs. 2020 TWh -14% -14% 54.8 57.0 51.4 48.9 47.3 Decrease from record high gas sales volumes in 2020 Lower equity gas quantities available 2017 2018 2019 2020 2021 Brazi net electrical output +15% TWh 4.8 Record high net electrical output 4.2
Slide 58: Outlook
OMV Petrom S.A. @® OMV Petrom The energy for a better life.
Slide 59: Outlook
Outlook Indicators Actual 2021 Assumptions/ Targets 2022 Brent oil price USD 70.9/bbl USD 75/bbl Production in 127 kboe/d1 Decline ~7% yoy1 Romania Refining USD 5.5/bbl USD ~6/bbl margin CAPEX RON 2.8 bn Up to RON 4.0 bn2 FCF before RON 4.7 bn Positive dividends 1 Excluding portfolio optimization; 2
Slide 60: Appendix
~-Appendix © OMV Petrom The energy for a better life.
Slide 61: Exploration and Production map
Exploration and Production map 61 | OMV Petrom Capital Market Story – March 2022
Slide 62: Romanian oil market overview in 2021
Romanian oil market overview in 2021 Supply Refineries Distribution Production: Refineries Petrobrazi combined nameplate capacity ~13 mn tpa 33% Processed crude oil Transportation: Conpet ~9.95 mn t pa of which ~6.7 mn t from import Rompetrol (Petromidia, Vega) Imports: various 62% Lukoil (Petrotel)
Slide 63: OMV Petrom Group
OMV Petrom Group Retail fuel sales mn l Moldova 3,074 2,922 2,746 2,798 2,746 69 117 117 120 97 101 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Romania 170 171 175 147 177 401 160 Black Sea 2017 2018 2019 2020 2021 Bulgaria 63 Serbia 328 318 312 243 272 Total number of 787 2017 2018 2019 2020
Slide 64: Romanian gas market overview in 2021
Romanian gas market overview in 2021 Regulatory Supply Distribution Demand Regulatory Production: Storage: Supply: Heat & Power incl. Body Romgaz, Depomures Romanian Romgaz, … Energy Industry/ Regulatory Commercial Authority Romgaz, Distrigaz Sud (ANRE) Engie Romania, (Engie), 77% E.ON Energie Delga
Slide 65: Romanian power market overview in 2021
Romanian power market overview in 2021 Regulatory Supply Market(s) Distribution Demand Regulatory Production: Mid/long term fwd Body contract market(s) Coal 19% (OPCOM / bilateral) Romanian Energy Spot (DAM / ID) Internal market Regulatory Gas 18% Transport & market (OPCOM) Authority Distribution Di
Slide 66: Cash flow Statement
Cash flow Statement RON mn 2017 2018 2019 2020 2021 Cash flow from operating activities (CFO) 5,954 7,385 6,803 5,556 6,997 Thereof, Change in net working capital (NWC) -199 32 -256 964 -433 Cash flow from investing activities (CFI) -2,446 -4,261 -3,556 -3,163 -2,253 Cash flow from financing activit
Slide 67: Income Statement
Income Statement RON mn 2017 2018 2019 2020 2021 Sales 19,435 22,523 25,485 19,717 26,011 Clean CCS Operating Result 3,273 4,804 4,573 2,287 4,346 Thereof Exploration & Production 1,674 3,224 2,845 7 1,814 Refining & Marketing 1,533 1,335 1,501 1,454 2,041 Gas & Power 220 360 282 718 781 Corporate a
Slide 68: Operating Result
Operating Result RON mn 2017 2018 2019 2020 2021 Clean CCS Operating Result 3,273 4,804 4,573 2,287 4,346 Thereof Exploration & Production 1,674 3,224 2,845 7 1,814 Refining & Marketing 1,533 1,335 1,501 1,454 2,041 Gas & Power 220 360 282 718 781 Corporate and Other -74 -87 -89 -84 -87 Consolidatio
Slide 69: Key financial indicators (consolidated) – restated
Key financial indicators (consolidated) – restated1 in RON mn 2017 2018 2019 2020 2021 Q1/21 Q2/21 Q3/21 Q4/21 Sales 19,435 22,523 25,485 19,717 26,011 4,861 5,264 6,920 8,965 Clean CCS Operating Result 3,273 4,804 4,573 2,287 4,346 653 851 1,341 1,500 Operating Result 2 3,270 5,213 4,245 1,467 3,70
Slide 70: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations Tel: +40 372 161 930 E-mail: investor.relations.petrom@petrom.com Homepage: www.omvpetrom.com Financial calendar 2022 April 27: Annual General Meeting of Shareholders April 29: Q1 2022 results July 28: Q2 2022 results October 28: Q3 2022 resul