Eni S.p.a. · MIL:ENI

Eni — FY2016 Earnings Presentation

32 slides from Eni's earnings presentation, Mar 1, 2017

  1. Slide 1: 2016 results and 2017-2020 strategy

    1 MARCH 2017 2016 results and 2017-2020 strategy A year of records Our path to long term value

  2. Slide 2: 2016 Results

    2016 RESULTS Goliat FPSO

  3. Slide 3: Highlights 2016: a year of records

    Highlights 2016: a year of records UPSTREAM MID-DOWNSTREAM MID-DOWNSTREAM EFFICIENCY FINANCIALS FINANCIALS  Exit rate at 1.86 Mboe/d  FCF: €2.3 bln € 3 bln saving (vs 2015) :  CFFO: € 8.3 bln  Exp: 1.1 Bboe @UEC $0.6/boe  EBIT adj. R&M+Chem €0.6 bln  Capex: - € 2.2 bln (-19%)  CFFO = CAPEX @

  4. Slide 4: HSE performance

    HSE performance People Safety – TRIR Upstream Methane Emissions|MtCO2 eq. Flaring down | MSmc Eni top performer since 2013 -9% TCO2eq/Tep: on track to reach 2025 target (-43% since 2014) 3 5 10,000 2016 vs. 2007 2016 vs. 2007 4 8,000 2 -57% -73% Industry 3 6,000 average 2 4,000 1 1 2,000 -21% 2016 v

  5. Slide 5: Exploration successes fuelling future production

    Exploration successes fuelling future production Cumulative discovered resources 2014-2016| bln boe 2016 RRR | % 4 200 193* 3.4 180 3 2016 Short cycles 160 P2/P3 + 30% 140 assets 50% contingent 120 2 2015 100 80 Disposed/ 70% Long life 25% under production 60 1 disposal assets 35 40 2014 FID/ 25% Un

  6. Slide 6: 2017 start ups ahead of schedule

    2017 start ups ahead of schedule East Hub – Angola OCTP – Ghana JANGKRIK - Indonesia IN PRODUCTION 8th February 2017 Execution Time 39 months Execution Time 30 months Execution Time 42 months FID FID FID FID 100% Start-up FID 85% Start-up FID 95% Start-up June 2017 June 2017 Project details Project

  7. Slide 7: Zohr: countdown to first gas

    Zohr: countdown to first gas December Aug. 2015 Feb. 2017 Feb. 2016 2017 FIRST Discovery FID 2.3 years from discovery GAS Zohr 1 Zohr 2 Zohr 3 Zohr 4 Zohr 5 Zohr 6 Zohr 7 Exploration & development Reservoir studies Engineering & Proc. Long Lead Items Onshore Construction & Installation Site Start St

  8. Slide 8: Strong cash generation from mid-downstream

    Strong cash generation from mid-downstream EBIT adj| € mln CFFO| € bln 4 569 193 Mid-downstream 3.1 3.0 3 R&M 2 Chemicals 1 G&P 0 2015 2016 G&P Chemicals R&M 2015 2016 ALL BUSINESSES FREE CASH FLOW POSITIVE 8

  9. Slide 9: Relentless focus on cost efficiency

    Relentless focus on cost efficiency Group Capex*| € bln Opex| $/boe G&A| € Mln 1445 -10% 11.5 -19% 7.2 -14% 9.3 1296 6.2 2015 2016 2015 2016 2015 2016 OVERALL COST OPTIMISATION 2016 vs 2015 € 3 BLN 9 * Including JV financing

  10. Slide 10: Best-in-class for financial discipline

    Best-in-class for financial discipline Net debt| € bln 2016 leverage and change vs 2013 45 16 Net Cash 40 Change since 2013 (% points) Flow Dividends 14 13.0 35 12 11.7 1.0 2.6 2.9 30 10 25 8 Disposals 20 pre tax 6 (incl Zohr) 15 4 10 2 5 24 0 0 Eni YE 2015 YE 2016 20 30 40 50 60 70 pro-forma pro-fo

  11. Slide 11: An outstanding result in 2016

    An outstanding result in 2016 2016 Cash balance| € bln 8.7 8.3 CFFO = CAPEX $ 46 /bbl vs targets $ 50 /bbl CFFO* Capex* SLASHING CASH NEUTRALITY SINCE 2013 11 * pro-forma, considering the sale of 40% of Zohr and Val d’Agri effect

  12. Slide 12: 12

    12

  13. Slide 13: FPSO Angola

    ARMADA OLOMBENDO FPSO FPSO. Angola

  14. Slide 14: Exploration and long term organic growth are the engine of our strategy

    Exploration and long term organic growth are the engine of our strategy Resources Operations Value  High impact and conventional  High level of operatorship  Upstream and G&P integration exploration  Design to cost  Enhancement in the downstream  Long term organic growth  Fast track  Active

  15. Slide 15: Best positioned to capture upside: 2017-2020 targets

    Best positioned to capture upside Upstream 70 70  Production growth CAGR 3%  Exploration resources 2-3 bln boe 2017-2020 targets Mid downstream  G&P breakeven in 2017 4YP avg  Refining breakeven at $3/bbl margin in 2018 capex cash neutrality* < $ 45 /bbl Free cash Efficiency flow  Capex vs prev

  16. Slide 16: A rich set of exploration opportunities

    A rich set of exploration opportunities Organic growth and replacement Flexibility and low break-even EXPLORATION Gas – 55% Early monetization Oil – 45% 2-3 BLN BOE EQUITY RESOURCES 16

  17. Slide 17: A large portfolio for the long term

    A large portfolio for the long term New EXPLORATION successes… Bouri ph2 Nyonie Evan Shoal FID before 2020 Mamba T3-4 IDD FID 2020+ Eldfisk ph2 Coral ph2 Bonga North Kashagan ph2 Karachaganak EP Etan &Zabazaba A&E structures Libya Bonga SW Perla Ph.2 MambaT1-2 Loango Kashagan CC01 Merakes Argo clust

  18. Slide 18: An unrivalled inventory

    An unrivalled inventory Libya Kazakhstan Italy Norway - Kashagan CC01 Bahr Essalam Ph.2 Johan Castberg Argo Cluster - Karachaganak Ph. 3 A&E structures CAGR 2020-2025 3% CAGR 2016-2020 3% 2016 2017 2020 2025 New projects/ramp ups Indonesia Egypt Jangkrik Ghana Congo Angola Mozambique Merakes Venezue

  19. Slide 19: High quality long term cash flow

    High quality long term cash flow Cash flow per barrel| $/boe 4YP start up 4YP 29 $/boe 30 start up 27 $/boe 25 20 20 15 15 Legacy 11 16 $/boe 10 Legacy 12 $/boe 5 2016 2017-18 2019-20 Brent $/Bl 43.7 57.5 67.5 19

  20. Slide 20: Gas demand continuous growth and market rebalancing

    Gas demand continuous growth and market rebalancing Supply/Demand LNG |Mtpa International prices|$/MMbtu ~ 135 Mtpa 14 500 ~ 55 Mtpa (30-40 LNG trains) (12-15 LNG trains) 12 400 10 300 8 200 6 4 100 2 0 2015 2020 2025 2030 0 2017 2018 2019 2020 2025 2030 Spot or renewals of existing contracts Contra

  21. Slide 21: A turning point for G&P

    A turning point for G&P Ebit adj| € mln 4YP Action plan > 600  Gas supply contracts aligned to the market  Logistic costs reduction ~300  Equity gas/LNG monetization avg 2017-18 avg 2019-20 2025 CUMULATIVE CFFO € 2.6 BLN IN THE 4YP 21

  22. Slide 22: Extracting value from integration

    Extracting value from integration Upstream gas productions Midstream Positions Focus on LNG sales | Mtpa Targets 10  Maximizing value of equity gas  Developing a competitive LNG portfolio 3.5  Leadership position in European and emerging markets 2017 2025 A PORTFOLIO PLAYER INTEGRATED WITH UPSTRE

  23. Slide 23: Downstream: building on the restructuring

    Downstream: building on the restructuring Refining & Marketing EBIT Chemicals | € Mln Breakeven Refining margin | $/bl 300 300 7.5 EBIT +€ 300 Mln EBIT 2020 4.2 self help € 900 Mln 600 3 300 2016 2020 Scenario @ constant scenario upside 2013 2016 2018 2016 2016 4YP 4YP avg avg./y onwards SERM 4.2 5.

  24. Slide 24: Capex plan

    Capex plan Capex allocation 2017-20 € Bln -8% 34.4* IRR (%) 35 Other 31.6 Mid-downstream 30 Other ≈10 + New energies 25 Upstream Production optimization > 20 -13% Mandatory 20 E&P** 15 E&P Development of new 15-20 10 production 5 Exploration 0 plan 2016-2019 plan 2017-2020 average 2017-20 CAPEX 2017

  25. Slide 25: Our enhanced disposal programme

    Our enhanced disposal programme Disposal| € bln 30 40% Zohr 25 5-7  Proved successful portfolio mgmt 20 2  Dual exploration model 15  E&P portfolio rationalization  Further financial flexibility 10 18 5 0 2013-16 2017-20 25

  26. Slide 26: Cash Flow plan

    Cash Flow plan € Bln 16,0 14,0 scenario disposal Growth & efficiency other 12,0 disposal 10,0 other 8,0 CAPEX 6,0 E&P E&P 4,0 2,0 0,0 avg 17-18 avg 19-20 Brent $/Bl 57 67 26

  27. Slide 27: Remuneration - dividend policy confirmed

    Remuneration - dividend policy confirmed Competitive distribution policy progressive with underlying earnings growth and scenario Floor dividend cash sustainability Cash neutrality  $50/bbl including disposals in 2016  $60/bbl organic in 2017  <$60/bbl organic 2018-20 Additional financial flexibi

  28. Slide 28: Unrivalled exploration, fast cash generation, low breakeven portfolio

    Unrivalled exploration Fast cash generation Low breakeven portfolio Highly leveraged to oil price Strong balance sheet

  29. Slide 29: BACK UP

    BACK UP 29

  30. Slide 30: New energy solutions

    New energy solutions 2017-2030 Guidelines  Significant growth of installed capacity  Technology neutral, with focus on hybrid projects  Technological and geographical synergy with other Eni business lines MW 500 400 300 200 100 0 2017 2018 2019 2020 Energy Solutions installed capacity 30

  31. Slide 31: Assumptions and sensitivity

    Assumptions and sensitivity 4YP Scenario 2017 2018 2019 2020 Brent dated ($/bl) 55 60 65 70 FX avg (€/$) 1.08 1.13 1.15 1.20 Std. Eni Refining Margin ($/bl) 4.0 4.0 4.3 5.5 NBP ($/mmbtu) 5.2 5.3 5.5 5.5 Cracker Contribution Margin (€/ton) 270 260 254 255 4YP sensitivity* Ebit adj (bln €) Net adj (bl

  32. Slide 32: Main start ups

    Main start ups Equity peak in 4 YP Working Liquids/Gas Main start ups 2017-2018 country op start up (kboed) Interest Nenè Ph.2A Congo yes Achieved 20 65% Liquids Block 15-16 East Hub Angola yes Achieved 20 37% Liquids OCTP Oil Ghana yes 1H17 20 56% Liquids Jangkrik Indonesia yes 2H17 45 55% Gas Zohr

Eni — FY2016 Earnings Presentation on 6ix