Repsol Sa · BME:REP
Repsol Sa — Investor Presentation (July 2019)
52 slides from Repsol Sa's investor presentation, July 2019
Slide 1: Investor Update July 2019
Investor Update July 2019
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2019 Repsol, S.A. is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored, duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or
Slide 3: Delivering value growth through the cycle
2018-2020 Delivering value growth through the cycle 1. Company overview 2. Strategic progress 3. Upstream update 4. Downstream & Low Carbon update 5. Digitalization & efficiencies 6. Financing 7. Conclusions & key targets 8. Historic data book
Slide 4: Company overview
ally . a REPSOL Company overview
Slide 5: Repsol: A unique, Integrated Global Position
Repsol: A unique, Integrated Global Position Company overview Core businesses: Upstream and Downstream ~715 kboe/d production ~2.3 billion boe proved 7.87% reserves1 Sacyr 1 Million bbl/d refining Free Float capacity 92.13% ~2.6 Millions tons of Upstream Downstream Both base chemicals3 capacity • 17
Slide 6: Strategy 2018-2020
Strategy 2018-2020 Company overview 1. Increasing shareholder returns 2. Growing our portfolio profitably • Dividend per share 8% p.a. growth with full buyback of shares • Growth across all value-creation metrics, at any oil price • Dividend target fully covered at $50/bbl • Downstream activated as
Slide 7: Strategic progress
2 Strategic progress
Slide 8: On track to deliver 2020 targets
On track to deliver 2020 targets Strategic progress 2020 2019 objective guidance €4.9 Bn EBITDA at CCS €8.8 Bn €7.8 Bn Upstream Downstream €3.1 Bn CAPEX €3.8-4 Bn per year €3.5 Bn Net production 750 Kboe/d 715 Kboe/d Dividend per share ~€1 ~ € 0.95 (1) Scrip dividend Buyback 100% 100% 1. The price o
Slide 9: Strong delivery in 2Q19 results
Strong delivery in 2Q19 results Strategic progress ADJUSTED NET EBITDA CCS CAPEX (*) NET DEBT INCOME (€M) (€M) (€M) (€M) Guidance 2019 + 35% 3,529 + 3% 3,622 Guidance 3,662 2019 2,706 - 2% + 18% 1,468 1,132 1,115 1,245 1H18 1H19 1H18 1H19 1H18 1H19 1H18 1H19 CFFO in 2Q19 and 1H19 more than covered c
Slide 10: Increasing shareholder remuneration and full buyback of scrip
Increasing shareholder remuneration and full buyback of scrip Strategic progress Dividend per share based on disbursement year CAGR +8% €/share 0.80 (*) 0.95 1.00 0.90 (*) Historic cash dividend Buybacks Historic scrip dividend Scrip dividend + buybacks 0.19 2017 2018 2019 2020 Buyback program in 20
Slide 11: Additional 5% share capital reduction
Additional 5% share capital reduction Strategic progress Self-funded plan at 50 dollars Brent Strategic update for 2018-2020 Increase shareholder remuneration to 1 €/share with scrip option and buy-back Increase Total Shareholder Return 5% Share capital reduction* Cancelation of treasury sha
Slide 12: Clear path for cashflow growth to 2020
Clear path for cashflow growth to 2020 Strategic progress At $50/bbl flat Brent 2019E (B€) +0.3 +0.33 +0.08 +0.133 +0.12 +0.06 +1.0 0.1 6.5 0.2 0.3 0.3 0.6 0.4 4.6 CAGR: + 12% UPSTREAM DOWNSTREAM CORPORATION +1 B€ + 0.8 B€ + 0.1 B€ 2017 CFFO1 @50 New RISE (efficiency & Digital International
Slide 13: Strategic Plan fully funded at $50/bbl
Strategic Plan fully funded at $50/bbl Strategic progress Fully funded at $50/bbl keeping a strong financial position Total Group’s Free Cash Flow breakeven, excluding inorganic capex and divestments, was 54 $/bbl in 2018, in line with our Sources of cash Uses of cash strategic objective €Bn 20.8 20
Slide 14: Upstream update
REPSOL Upstream update
Slide 15: Core regions in the portfolio
Core regions in the portfolio Upstream North America Europe, Africa & Brazil Unconventional portfolio, operatorship and High margin barrels, key development valuable midstream positions projects from exploration succes 175 kboe/d 165 kboe/d 73% 19 % 79% 6% / 47% Latin America South East Asia Regiona
Slide 16: Progressing on our short-cycle projects
Progressing on our short-cycle projects Upstream Pipeline of Repsol’s short-cycle projects… DUVERNAY MARCELLUS YME • Early production • Increase to 2 development rigs • In 2018 the redevelopment • Low breakeven asset received the approval from • Scale synergies; low cost local authorities. LIBYA rep
Slide 17: Improving Upstream returns with profitable growth
Improving Upstream returns with profitable growth Upstream AROUND 3 % PRODUCTION GROWTH IN 2018 WITH IMPORTANT CONTRIBUTION FROM PROFITABLE SHORT-CYCLE PROJECTS ̴ 3% production growth in 2018 in line with Around 28 kboe/d of new production from short-cycle commitment (2.6% CAGR by 2020) projects in
Slide 18: New opportunities: attractive pipeline in the Gulf of Mexico
New opportunities: attractive pipeline in the Gulf of Mexico Upstream Buckskin First Oil (June 14th 2019) Joint development of Leon and Moccasin Last example of Repsol development strategy Growing the future Breakeven Price 79 $/bbl Leon and Moccasin: Buckskin ~150 Mboe recoverable Development Capex
Slide 19: New opportunities: Indonesia a value creation history
New opportunities: Indonesia a value creation history Upstream Sakakemang: largest discovery in 18 years in Indonesia(1) Indonesia new additional production 800 700 Gross MMscfd (2) Corridor extension 600 Sakakemang fast track 500 400 300 200 100 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2
Slide 20: Working on our 2020+ project pipeline
Working on our 2020+ project pipeline Upstream Mid and long-term projects with attractive Repsol's new projects have competitive returns and phased developments full-cycle IRR and NPV breakeven Alaska (US) Duvernay (Canada) • 2 appraisal wells • 10 wells were drilled in 2018. were conducted, • Curre
Slide 21: Working on our 2020+ project pipeline: Accelerating Alaska
Working on our 2020+ project pipeline: Accelerating Alaska Upstream Nanushuk path to success Leveraging our capabilities Huge interests in prolific formation to build a new core region Pikka Unit >500 Mboe (2C) Gross Kboe/d FID slated for mid-2020 200 Phase I FO in 2022 (30 Kboed) FFD in 2024 150 10
Slide 22: Building strong exploration portfolio in core areas
Building strong exploration portfolio in core areas Upstream Indonesia Norway Gulf of Mexico Guyana, Brazil • Sakakemang discovery, • Telesto discovery in the • Blacktip discovery in the deep water US GoM • 1 exploration well to be at least 2 TCF of North Sea (12-28 MMbbl • Partnership with LLOG to
Slide 23: Downstream & Low carbon update
4 Downstream & Low carbon update
Slide 24: World-class position
World-class position Downstream & Low Carbon Refining Chemicals CORUÑA BILBAO • 1 million bbl/d of refining capacity • High performing integrated and regional leader • Highly competitive EU 1Q in Solomon NCM1 TARRAGONA • Capability for more than 35% light benchmark and fully invested for IMO2 feedst
Slide 25: Solid historical performance and sustainable value growth
Solid historical performance and sustainable value growth Downstream & Low Carbon EBITDA EBITDA Refining-Trading At $50/bbl flat Brent +€1B 4.4 €B IMO 3.4 Chemicals 3.3 Commercial Strategic Update Low Carbon 1.5 2017 2020 €4.4B 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FX $/€ 1.33 1.39
Slide 26: Strategy summary
Strategy summary Downstream & Low Carbon CAPEX(2-3) Refining Trading Chemicals Mobility LPG LAS Low Carbon 2018-2020 SUSTAIN EXPAND EXPAND EXPAND SUSTAIN EXPAND Businesses (€B) • Energy efficiency • Maximize value • Energy efficiency • Customer- • Customer-centricity • Maintain 2.7 • IMO readiness f
Slide 27: Top quartile position among European peers
Top quartile position among European peers Downstream - Refining (1) 5 refineries optimized as a single system Top quartile position among European peers CORUÑA % FCC Equivalent BILBAO 100% TARRAGONA 1Q 2Q 3Q 4Q 80% 60% PUERTOLLANO 40% CARTAGENA 20% 0% 0 2 4 6 8 10 12 14 Oil pipeline Repsol Oil pipe
Slide 28: IMO 2020 will change relative prices of crude oil and products
IMO 2020 will change relative prices of crude oil and products Downstream - Refining IMO compliance is guaranteed… …and brings a structural change 8 Total Bunkering business volumes 7 LNG 85% 6 5 LNG GO LNG GO 4 VLSFO GO 3 VLSFO 2 HSFO of total fuel consumption is concentrated in only 1 VLSFO HSFO 2
Slide 29: Repsol perfectly positioned to benefit from IMO 2020
Repsol perfectly positioned to benefit from IMO 2020 Downstream - Refining TOP EUROPEAN PLAYER1 IN CONVERSION, STRONGEST COKING CAPACITY AND ONE OF THE LOWEST HSFO YIELD 2018 Peers Conversion-to-crude Capacity Ratio vs 2017 HSFO yield Leader in EU coking Of the total EU coking capacity 25% (while on
Slide 30: Competitive positioning
Competitive positioning Downstream - Chemicals Iberian Peninsula petrochemical sites Dynasol Joint Venture Panjin, China Santander, Spain Alava, Spain Tarragona Houston, USA Altamira, Production capacity (Thousand tons) Mexico Madrid, Spain Base petrochemicals 2.603 Nanjing, China Puertollano Ethyle
Slide 31: Transformation to a resilient business and future ambitious targets
Transformation to a resilient business and future ambitious targets Downstream - Chemicals ENERGY CONSUMPTION LIGHT FEEDSTOCK TO CRACKERS – LPG´s (%) Asset restructuring and energy efficiency investments have optimized the business % Light Feedstock: Crackers have evolved to get a ~35% light feedsto
Slide 32: More than service stations
More than service stations Downstream- Commercial businesses FUEL MARKET SHARE Transforming and expanding our >4,900 Service Stations 5 SPAIN 37% (#1) 2.5 M Countries Mobility business Clients served daily >1,000 PORTUGAL 26% (#2) 6.5 M ROACE > 20% Operated sites PERU 26% (#2) Loyalty cards WHOLESAL
Slide 33: Ambitious growth targets
Ambitious growth targets Downstream- Commercial businesses Mexico: Building a top 5 position in an opening growth market San Luis Potosí: 4 LPG Lubricants, Asphalts & Specialities Wholesale Mobility Sonora 3 Guanajuato: 28 1500 Querétaro: 1 EBITDA Baja California Sur Hidalgo: 1 (€M) 11 Edo. Mex.: 21
Slide 34: Strengthening Repsol's position as a multi-energy supplier
Strengthening Repsol’s position as a multi-energy supplier Low Carbon Low carbon Integrated generation business Retail gas & Customer power centric Operated New operated Multi-energy business model supplier Focus on Synergistic liberalized position Profitable Enhancing businesses capabilities 33
Slide 35: Ambition to develop a new operated business
Ambition to develop a new operated business Low Carbon Repsol is swapping a €5-6B exposure to a medium … To an operated and synergistic position in low carbon businesses through GNF… carbon businesses Gas • Non-operated • Operated business with full synergies Natural • No synergies exploited • Lever
Slide 36: Roadmap to 2025
Roadmap to 2025 Low Carbon Wholesale Gas Retail G&P Low carbon generation Top Leverage our industrial self consumption as the Strong brand and ~10M clients base with Technical capabilities and experience in capability largest gas consumer in Spain direct contact managing large scale projects • Creat
Slide 37: Accelerated delivery of 2025 objectives in Low Carbon
Accelerated delivery of 2025 objectives in Low Carbon Low Carbon Developing a strong position in Spain Viesgo acquisition led the way with 2.9 GW of installed capacity to develop our key capabilities to become the 5th G&P player in Spain 2.5 GW Exploring 4.5 Million Clients Opportunities ~90% achie
Slide 38: Accelerated delivery of 2025 objectives in Low Carbon
Accelerated delivery of 2025 objectives in Low Carbon Low Carbon 37
Slide 39: Renewables business to be developed with an industrial approach
Renewables business to be developed with an industrial approach, requiring new skills across value chain Low Carbon Repsol will leverage on existing key capabilities and is already developing the necessary new ones… DEVELOPMENT ENGINEERING & CONSTRUCTION OPERATION PERFORMANCE MANAGEMENT Finance / Ta
Slide 40: Digitalization & Efficiencies
5 Digitalization & Efficiencies
Slide 41: Digitalization and efficiency as levers for cash flow growth
Digitalization and efficiency as levers for cash flow growth Digitalization & efficiencies CFFO impact (B€) at 50$/Bbl Upstream Downstream 0.9 Better maintenance, reduction of Improving integrated logistics and decommissioning margin, process costs and initiatives in gas digitalization commercializa
Slide 42: Digitalization and efficiency initiatives
Digitalization and efficiency initiatives Digitalization & efficiencies: Examples • Integrated Operations Center (IOC) Integrated real-time control room identifying trends and anomalies over the medium term, improving safety, production and efficiency in its operations. Successfully tested in United
Slide 43: Financing
—_ REPSOL FINANCING
Slide 44: Strong liquidity position
Strong liquidity position Financing (Billion €) (Billion €) 12 12 10.0 10 10 1.6 x 7.5 7.4 8 8 Term deposits w/ 6.7 immed.availab. * 1.4 1.4 5.6 6 6 1.9 4.8 1.9 Undrawn Credit Lines 4 4 Cash & 4.6 4.8 4.6 4.8 Equivalents 2 2 2.5 1.2 0.1 0.7 0.7 0 0 Liquidity as of Short term 2H20 2021 2022 2023 >202
Slide 45: Conclusions & Key targets
7 Conclusions & Key targets
Slide 46: On track to deliver 2020 strategic objectives
On track to deliver 2020 strategic objectives Conclusions & key targets 1. Increasing shareholders returns 2. Growing our portfolio profitability • Strong CFFO generation : on track to deliver • Dividend increase by 6% in 2019 to 0.95€/share* 2020 objective • 100% buyback of scrip dividend • Resilie
Slide 47: Key metrics to 2020 @ $50/Bbl Brent flat
Key metrics to 2020 @ $50/Bbl Brent flat Conclusions & key targets Production CFFO EPS DPS 2.6% CAGR +€1.9B growth +€0.6/share growth 8% CAGR CAGR DPS paid kboe/d 2.6% € Billion EPS on year €/share €/share CAGR +8% 750 CAGR +12% CAGR +12% 695 0.8 1.0 6.5 2.0 4.6 1.4 0.2 2017 2020 20171 2020 20171 20
Slide 48: Historic data book
8 Historic data book
Slide 49: Environment and Repsol group
Environment and Repsol group Historic data book M AC R O E NVIR O NM E NT International R eferences Unit 201 6 201 7 201 8 S preads vs. B rent ($/bbl) 201 6 201 7 201 8 B rent ($/B bl) 43.7 54.2 71 .3 Maya - B rent [1 1 .6] [9.7] [1 0.6] WTI ($/B bl) 43.5 50.9 64,9 Ural - B rent [1 .2] [0.9] [1 .1 ]
Slide 50: Upstream
Upstream Historic data book Production Proven reserves Kboe/d Mboe 2016 2017 2018 2016 2017 2018 Europe 52 51 60 62 59 102 M ain figures (M €) 201 6 201 7 201 8 Latin America 342 348 342 1,525 1,490 1,419 Adjusted Net Income 52 632 1 ,325 North America 182 174 175 496 504 535 E B IT (87) 1 ,009 2,51
Slide 51: Downstream
Downstream Historic data book Downstream Assets Refining capacity Refining Converson index (%) Businesss Unit 2016 2017 2018 (kbbl/d) Spain 896 63 Refining Bilbao (Petronor) 220 63 Distillation utilization Tarragona 186 44 Spain % 88.0 93.6 92.9 Coruña 120 66 Peru % 68.9 89.8 81.7 Puertollano 150 66
Slide 52: Repsol Investor Relations
Investor Update July 2019 Repsol Investor Relations investorsrelations@repsol.com 51 51