Slide 1: OMV Petrom Q2/20 Results Conference Call, July 29, 2020
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Christina Verchere Chief Executive Officer and President of the Executive Board Alina Popa Chief Financial Officer The spoken word applies. Check against delivery. Page 1 of 44
Slide 2: Intro
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Christina Verchere – OMV Petrom – CEO Slide 1 – Intro Good afternoon, ladies and gentlemen, and a warm welcome from my side. Thank you for joining our call. I hope you and your families are all safe and healthy. We just closed an exceptionally
Slide 3: Legal Disclaimer
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 2 – Legal Disclaimer Before going into details, please let me first draw your attention to our Legal Disclaimer, which you can read in detail on slide 2. Page 3 of 44
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Slide 5: Economic environment
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 3 – Economic environment Let me start with an overview of the commodities and exchange rates environment, as well as some macroeconomic, energy, and regulatory environment highlights for Romania in the second quarter of 2020. The oil mark
Slide 6: OMV Petrom Q2/20 Results Conference Call, July 29, 2020
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Slide 7: Romanian environment
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 4 – Romanian environment As a response to COVID-19, a nation-wide state of emergency was declared in Romania from mid-March until mid-May. Since then, the country has been under a state of alert. The authorities have imposed health and so
Slide 8: Romanian environment (gas market regulation)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 At the end of June, the Government Emergency Ordinance number 106 from 2020 was approved, providing for important amendments to the Energy Law 123 from 2012 that affect the gas market. The centralized market obligation was eliminated for gas pr
Slide 9: Romania GDP and energy demand outlook
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 The outlook worsened on Romania’s 2020 GDP, which is now expected to drop around 6 percent in 2020 versus 2019, based on estimates from international financial institutions, while domestic macroeconomic imbalances, such as budget or current acc
Slide 10: OMV Petrom Q2/20 Results Conference Call, July 29, 2020
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Slide 11: Key messages Q2/20
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 5 – Key messages Q2/20 On slide 5, we present the key highlights for the quarter. During this challenging period, we secured our business, proved our agility and maintained our commitment towards all our stakeholders. We ensured business
Slide 12: Key messages Q2/20 (continued)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Offshore Block II. Following the successful bidding procedure, negotiations of the production sharing contract are ongoing, estimated to be finalized by year-end. This is another milestone in our strategy to expand our upstream activities in th
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Slide 15: Operational KPIs
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 6 – Operational KPIs On slide 6, I would like to present to you the operational performance, as reflected in our KPIs in the second quarter of 2020. Let me start with Upstream. We managed to contain hydrocarbon production decline to 2.6 p
Slide 16: Operational KPIs (Downstream Gas)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 the households and district heating for households. OMV Petrom’s sales in total Romanian gas demand reached a record-high weight of approximately 60 percent. Net electrical output was 0.57 terawatt-hour, significantly higher than in the second
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Slide 19: CAPEX and E&A
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 7 – CAPEX and E&A Slide 7 provides an overview of CAPEX and exploration and appraisal activities for the first half of 2020 and the outlook for the whole year. Total CAPEX amounted to almost 1.6 billion RON, 8 percent lower year-on- year.
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Slide 21: OMV Petrom's response to COVID-19 and the new market environment
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 8 – OMV Petrom’s response to COVID-19 and the new market environment The oil and gas industry has been through difficult times this year, with the outbreak of the new coronavirus, the recent drop in oil prices and the current uncertainty
Slide 22: Response to COVID-19 (continued)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 portfolio optimization and cost reduction. Alina will provide more details on these financial measures. On the demand side, the Romanian retail fuels market saw a year-on-year drop of 43 percent in April, 22 percent in May, and 6 percent in Jun
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Slide 25: OMV Petrom – a sustainable choice for our stakeholders
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 9 – OMV Petrom – a sustainable choice for our stakeholders Besides the social aspects, the COVID-19 crisis has outlined the role of corporations in society and the link between sustainability issues and financial performance. OMV Petrom h
Slide 26: Sustainability and governance (continued)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 In addition, we invested in the installment of photovoltaic panels in 78 of our filling stations, accelerating the completion of this year’s plan and continued to support forestation projects, as well as educational initiatives for energy effic
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Slide 29: Income Statement highlights
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 11 – Income Statement highlights Thank you, Christina, and good afternoon also from my side. I will continue the presentation with slide 11, starting with some highlights from the Income Statement, with focus on the developments of the se
Slide 30: OMV Petrom Q2/20 Results Conference Call, July 29, 2020
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Slide 31: Clean CCS Operating Result
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 12 – Clean CCS Operating Result Let me go on to slide 12, which shows the major building blocks for the development of the Clean CCS Operating Result in the second quarter of 2020. The lower Upstream result was partly compensated by the h
Slide 32: Clean CCS Operating Result (Downstream Gas)
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 The development of Downstream Gas Clean Operating Result shows the benefits of our integration model and is reflected on slide 12 in the operational effects: the weaker performance of the gas business, affected by lower prices, despite higher s
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Slide 35: Cash Flow highlights
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 13 – Cash Flow highlights On slide 13, I would like to continue with the highlights of our cash flow statement. In the second quarter of 2020, we achieved an operating cash flow of 1.2 billion RON, 14 percent lower year-on-year. Operating
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Slide 37: Strong response to adjust to the weak market environment
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 14 – Strong response to adjust to the weak market environment Triggered by the challenging environment, we took swift financial measures to maintain the strength of our balance sheet. As announced with our previous results, we expect our
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Slide 39: Sensitivities in 2020
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 15 – Sensitivities in 2020 We are witnessing increased volatility and a twofold pressure on oil prices: from both the supply and the demand side, with global forecasts being currently pessimistic due to the coronavirus outbreak. Given thi
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Slide 41: Outlook 2020
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 Slide 17 – Outlook 2020 Let me conclude our presentation with the outlook for the full year 2020, on slide 17. Here I would like to highlight our main market assumptions for 2020 and how they compare to the actual figures for 2019 and for the f
Slide 42: Questions
OMV Petrom Q2/20 Results Conference Call, July 29, 2020 We are now available for your questions. Page 42 of 44
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