Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — FY2018 Earnings Presentation
25 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Feb 11, 2019
Slide 1: FY2018 Results & Outlook
Slide 2: Cautionary Statement
2 Cautionary Statement By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepored by Galp Energia, SGPS, S.A. (“Galp” or the “Company") and may be amended and supplemented, but may not be relied
Slide 3: 2018 Nutshell
2 O1 8 Nutshell Upstream Successfully developing and accessing top Pre-Salt projects (Brazil) Start of production from Kaombo (Angola) PoD submission for Rovuma LNG mega trains (Mozambique) ha Downstream ESG recognitions Increasing refining efficiency ) . Solid performance from oil and gas marketing
Slide 4: Our high quality resources base
our high quality resources base 2.4 bn boe | 2P+2C 415% vor on the Brazil and Mozambique developments a20% potential prospective Securing Accessing new high stake (Uirapuru and C-M-791) galp©
Slide 5: 2018 | Delivering on our commitments
2 O17 8 | Delivering on our commitments WI production Ebitda oops Net debt cro (YoY growth) (€bn) (€bn) to Ebitda 2.2 €1,594 m 20% il [ < 2.0x 1.0 ° © © a 19 15% l 09 — 1.8 (IFRS 16) €619 m @actur ene SMPIE. a Adlusted, 5 | FY2018 Results & Outlook 1CMD18 guidance adjusted for average 2018 Brent, re
Slide 6: Strategy execution
‘Strategy execution
Slide 7: Developing our competitive upstream portfolio
7 Developing our competitive upstream portfolio Main upstream activities expected during 2019/20 Lula & Iracema 9 FPSO producing, o.w. 2 ramping-up lara First oil in Berbigdo/Sururu in 2019 and Atapu in 2020 Carcara Preparing Phase 1 while appraising Phase 2 Virapuru First exploration well | FY2018
Slide 8: Increasing potential of long-term production growth
Increasing potential of long-term production growth WI production from existing portfolio (kboepd) CAGR >10% Adjusting Lula and lara timeline, reflecting P67 and P68 units’ later start-up T ' ' ' ' «-------/ 8-12% : 1 : 1 ' . ont H y Increasing contribution from 107 existing portfolio (Brazil and J
Slide 9: Enhancing efficiency and flexibility
Enhancing efficiency and flexibility Refining Marketing to deliver full of operations and contribution by 2020 strengthening regional presence Developing the digitalisation programme while improving fuel : Galp system to produce and non-fuel offering compliant low sulphur fuel oil, with expected pos
Slide 10: Adapting sourcing and power portfolio to market trends
10 | FY2018 Results & Outlook sourcing and power portfolio to market trends Gas & Power Low Carbon & New business solutions Building new NG/LNG with renewable power generation through solar Power projects in Iberia commercial position in Portugal and Spain services, including an electric offer
Slide 11: 2018 dividend proposal
2018 Strengthening financial dividend Position while entering into a proposal new cash cycle Maintaining a resilient and competitive portfolio Working on the next growth cycle (2020*) Ongoing developments strengthening our Commitment to shareholder value creation TI | FY2018 Results & Outlook galp ©
Slide 12: Financial update
S Financial update
Slide 13: Solid cash generation in 2018 despite working capital build
Solid cash generation in 2018 despite working capital build 2018 Cash flow (€m) 2,438 Ba 1594 1,253 16 ae Ebit (IFRS) + Taxes Working Capital CFFO Net interests Net capex Pre-expansion Expansion Minorities Dividends Post-dividend DDEA + (pre-expansion) FCF capex paid FCF Associates 4qis) v4) (195) 1
Slide 14: Organic CFFO
Organic CFFO 2018-20 CAGR of 10-15% CFFO (€m) >10% Upstream CFFO 2018-20 cace Upstream to benefit from production growth and reflecting lower oil taxes from lara Downstream performance supported by improved operations and efficiency initiatives 2018 2019E ‘OE IMO regulation expected to positively im
Slide 15: Organic capex of c.€1 bn p.a.
Organic capex of c.€1 bn p.a. Annual average net capex (€m) Upstream 2019-20 capex 1,000 ° YH, 500 ie) 2018 2019-20E i Upstream @ Acquisitions @ Downstream Exploration Low carbon & New business solutions _—_¢ Previous plan Brazil ml Mozambique BW Angola & Appraisal 15 | FY2018 Results & Outlook Note
Slide 16: Organic FCF of c.€1 bn from 2020
Organic FCF of c.€1 bn from 2020 Free cash flow (€m) 3,000 _—___ 2,000 1,000 _ fe} 2018 2019E 2020E 2025E CFFO. —Fcr! Proposed 2018 dividend 16 | FY2018 Results & Outlook 'ECF net of dividend payments to minority interests, namely to Sinopec in Brazil Group’s FCF breakeven New cash cycle supported o
Slide 17: Appendix
Slide 18: Macro assumptions and plan sensitivity
Macro assumptions and plan sensitivity Galp assumptions 2018 (actual) 2019E [ee] Brent price ($/bbl) Galp refining margin ($/boe) 5.0 5.0-6.0 6.0-7.0 EUR:USD 1:18 1.20 1.20 Sensitivities (€m) Change 2019E 2020E 2019E 2020E 2019E 2020E Brent price $5/bbl 145 180 95 85 70 65 Refining margin $1/boe 90
Slide 19: c.€170 m c.€1.2 bn c.€1.2 bn
c.€170 m c.€1.2 bn = c.€1.2 bn = €0 m
Slide 20: Galp reserves and resources
Galp reserves and resources Reserves (mmboe) 2017 2018 | ch 2% 2P 748 755 1% 2% a 43% 2C 1,352 1,659 23% 3,297 3,671 1% a Unrisked 3,835 4,216 10% Risked 566 623 10% 20 | FY2018 Results & Outlook Source: Alll figures are based on DeGolyer and MacNaughton report as of 31.12.2018. galp © Reserves figu
Slide 21: 2018 results supported on strong operational performance
2018 results supported on strong operational performance Profit & Loss (€m) 2017 20 Ebitda RCA 1,786 2,218 ESP 850 1,440 REM 774 610 G&P 132 137 Ebit RCA 1,032 1,518 Associates 150 137 Financial results (34) (70) Taxes (483) (726) Non-controlling interests (88) (151) Net Income RCA 577 707 Net Incom
Slide 22: 4Q18 E&P
4Q18 ESP Higher production QoQ offset by lower realisations Main E&P data 4Q17 3Q18 AQ18 Oil production kbpd 88.6 931 99.8 Angola kbpd 5.2 74 89 Brazil kbpd 939 949 1029 Oil and gas average sale price USD/boe 53.6 65.3 61.0 Production costs USD/boe 8.0 9.0 7.0 DDSA USD/boe 10.7 10.5 88 Ebit RCA €m 2
Slide 23: 4Q18 R&M
4Q18 RSM Quarter impacted by planned maintenance in refining Main R&M data 4Q17 3Q18 4Q18 Refining cost USD/boe 19 2.0 43 Hedging impact on Ebitda USD/boe Oo; 0.0 03 Sales to direct clients mton 2.2 24 2.2 Ebit RCA €m 44 ns 24 Net Income from R&M Associates €m 2 1 (8) Capex €m 75 44 149 23 | FY2018
Slide 24: 4Q18 G&P
4Q18 G&P Resilient despite challenging power and trading Main GSP data 4Q17 3Q18 4Q18 LNG trading volumes down, Sales to direct clients mm* 1,109 1,201 1,181 reflecting the end of long term structured contracts Trading mm 790 823 544 in 3Q18 Se aU ced elec contribution from the power Ebit RCA Em 22
Slide 25: Slide 25