BP plc · LSE:BP.
BP — Investor Day (June 2017)
36 slides from BP's investor day presentation, June 2017
Slide 1: Fuels Marketing – material and growing
BP DOWNSTREAM INVESTOR DAY Fuels Marketing – material and growing Andy Holmes – COO Fuels Asia-Pacific & Air BP Guy Moeyens – COO Fuels Europe & Southern Africa
Slide 2: Global and material Fuels Marketing business
Global and material Fuels Marketing business Air BP markets in Around BP Ultimate fills over 18,000 4.8 800 retail sites in 19 cars locations in > 50 countries every second countries $ 2.1bn BP retail growth markets Fuels Marketing BP retail core markets earnings in 2016 Selected Air BP locations wh
Slide 3: Earnings growth and attractive returns
Earnings growth and attractive returns Strong portfolio and material growth Strong earnings potential potential Increasing share of earnings from growth markets 2021 Material earnings growth % of earnings from growth markets 2016 >$3.5bn Good and increasing growth markets Bubble size exposure in
Slide 4: Fuels Marketing – material growth and attractive returns
Fuels Marketing – material growth and attractive returns Sources of differentiation Underlying earnings growth1 $bn 4 >$1.4bn Strong market positions & brands 3 Partnerships Technology 2 >$ 1.4bn Customer Fuels Marketing relationships growth1 still to come 1 2016 2021 4 BP DOWNSTREAM INVESTOR DAY (1
Slide 5: Differentiated retail growth – convenience partnerships
Differentiated retail growth – convenience partnerships Partners Convenience partnership sites Competitive site profitability Material growth Germany REWE convenience1 3000 ~ 2000 sites Other S. Africa Netherlands Australia UK 2000 N. America Poland 1000 Germany 0 2016 2021 Aral REWE To Standard Ara
Slide 6: Differentiated retail growth – technology and customer relationships
Differentiated retail growth – technology and customer relationships Differentiated fuels Leading loyalty programmes Premium fuels margin1 $/bbl BP rewards programme more attractive vs. other oil majors2 40% Standard grade fuel Premium fuel 20% ~ 4x More fuel purchased 0% by a loyalty customer Diese
Slide 7: Woolworths – accretive to earnings and operating cash
Woolworths – accretive to earnings and operating cash Significant sources of value Wholesale margin Strategic Network convenience EBITDA2 partnership Will establish BP as a market leading 2016 Convenience Midstream 2021 downstream partnership & refining business in Australia1 & loyalty 7 BP DOWNSTRE
Slide 8: New markets – material growth plans
New markets – material growth plans Increasing ground fuels demand Mexico retail site volumes in material growth markets1 Fuel sales more than double2 mbpd m litres / month 4 2014 2035 Established market comparator (Germany 2035) Thousands 8 2 1 6 3000 4 > 2 Retail sites by 2021 in new growth market
Slide 9: Air BP and B2B – strong and differentiated businesses
Air BP and B2B – strong and differentiated businesses Air BP – 90 years heritage as global Aviation fuel demand expert and local partner Market growth at ~1.5%p.a.2 kbd 8,000 A leading global market position 6,000 Access to growing market Technology leadership in aviation fuel 4,000 2010 2015
Slide 10: Fuels Marketing key messages
Fuels Marketing key messages STRONG PARTNERSHIPS TECHNOLOGY MARKET POSITIONS AND BRANDS CUSTOMER RELATIONSHIPS >$ 1.4bn Fuels Marketing earnings growth1 still to come 10 BP DOWNSTREAM INVESTOR DAY (1) At 2016 foreign exchange environment JUNE 2017
Slide 11: Lubricants – continued growth and attractive returns
BP DOWNSTREAM INVESTOR DAY Lubricants – continued growth and attractive returns Mandhir Singh – COO BP Lubricants A.S. Ramchander (Ram) – CMO BP Lubricants
Slide 12: A global business with a portfolio built for growth
A global business with a portfolio built for growth Industrial Commercial Cars Bikes vehicles Marine & Energy 2 BP DOWNSTREAM INVESTOR DAY JUNE 2017
Slide 13: Castrol lubricants – continued growth
Castrol lubricants – continued growth Sources of differentiation Underlying earnings growth1 $bn Thousands >$0.6bn 2 Strong brands >$ 0.6bn Differentiated technology Customer relationships Lubricants growth1 1 still to come 2016 Growth Premium 2 2021 countries lubricants 3 BP DOWNSTREAM INVESTOR DAY
Slide 14: Strong brands
Strong brands Leading brands End-users more loyal to Castrol1 Power brands create advantage in focus segments Loyalty 23 10 9 42 25 21 72 57 55 Familiarity 82 74 66 Shell Mobil 4 BP DOWNSTREAM INVESTOR DAY (1) 2015 Millward Brown Brand Health study comprising US, Australia, Vietnam, Indonesia, India
Slide 15: Solving customer problems with differentiated technology
Solving customer problems with differentiated technology Gross margin from unique or first to market product launches1 $m 200 100 ~$ 200m gross margin in 20161 0 from unique or first to 2014 2015 2016 market product launches 5 BP DOWNSTREAM INVESTOR DAY (1) Launched since 2013 at 2016 foreign exchan
Slide 16: Truly loyal customers drive competitive advantage
Truly loyal customers drive competitive advantage 60% of our Customers are truly loyal1 60% of our customers are truly loyal1 ORIGINAL EQUIPMENT Accessible MANUFACTURERS Truly Loyal Accessible Truly Loyal PARTNERSHIPS 5% 60% Landscape of >2,000 Distributors ATTITUDES 8% 51% ~15,000 SALES PEOPLE Loya
Slide 17: Well positioned in key growth countries
Well positioned in key growth countries Key growth countries1 Key growth countries earnings1,3 Car & motorcycle lubricant volumes CAGR $bn Market2 Castrol 1.2 10% 10% 0.8 5% 5% 0.4 0% 0% 0 2011-16 2011-16 2016-21 2016-21 2014 2016 2021 7 BP DOWNSTREAM INVESTOR DAY (1) Key growth countries: China, In
Slide 18: Product & brand portfolio positioned to premium lubricants
Product & brand portfolio positioned to premium lubricants Premium products1 volume CAGR Portfolio quality and brand strength3 Unit gross margin $/litre Market2 Castrol 8% Castrol 4% Competition 0% 2011-16 2016-21 2010 2012 2014 2016 8 BP DOWNSTREAM INVESTOR DAY (1) Premium products: low-viscosity e
Slide 19: Longer term growth
Longer term growth ACCELERATE LOWER LUBRICANTS CARBON MOBILITY DIGITAL 9 BP DOWNSTREAM INVESTOR DAY JUNE 2017
Slide 20: Continued growth and attractive returns
Continued growth and attractive returns STRONG LOYAL BRANDS CUSTOMERS STRONG >$ 0.6bn DIFFERENTIATED GROWTH MARKET AND Lubricants growth1 TECHNOLOGY PREMIUM still to come PRODUCT 2016-21 POSITIONS 10 BP DOWNSTREAM INVESTOR DAY (1) At 2016 foreign exchange environment JUNE 2017
Slide 21: Advantaged Manufacturing – significant progress and more to come
BP DOWNSTREAM INVESTOR DAY Advantaged Manufacturing – significant progress and more to come Rita Griffin – COO Petrochemicals Douglas Sparkman – COO Fuels North America
Slide 22: Advantaged manufacturing session overview
Advantaged manufacturing session overview Safety – our core value and first priority Our portfolio – where we operate and why it is advantaged Delivering value through business improvement plans – Globally consistent business improvement plans, executed locally – Staffed by world class capabil
Slide 23: Refining – high graded and advantaged portfolio
Refining – high graded and advantaged portfolio 11 ~ 1.9 >$ bn 1 Configuration advantage Location advantage refineries on refining underlying 4 continents capacity improvement (mbd) 2014-161 Feedstock advantage and Synergies with marketing flexibility and supply & trading BP operated refineries Non-
Slide 24: Significant progress and more to come
Significant progress and more to come Business Improvement Plans Underlying earnings growth1 delivering sustainable value $bn Advantaged Reliability & efficiency ~$1bn feedstocks ~$ 1bn 2016 2016 Reliability &Advantaged Crude & Commercial 2021 efficiencyfeedstocks Feedstockoptimisation 2021 Refining
Slide 25: Reliability and efficiency
Reliability and efficiency Reliability: reaching top quartile Efficiency: ~20% improvement in Solomon availability1 non-energy cash costs1,2 % % 100 96 94 80 92 Top quartile 90 60 Solomon availability 2014 2016 2021 2014 2016 2021 5 BP DOWNSTREAM INVESTOR DAY (1) 2017 Portfolio basis JUNE 2017 (2) A
Slide 26: Advantaged feedstocks
Advantaged feedstocks Increase in advantaged feedstocks1 % Advantaged location and configuration 40 Coordination with supply and trading to identify and access feedstocks 20 Flexibility to optimise 45% feedstock mix ~ advantaged 0 feedstocks1 in 2021 2014 2016 2021 6 BP DOWNSTREAM INVESTOR DAY
Slide 27: Commercial optimisation
Commercial optimisation Reaching top quartile utilisation1 10% Higher utilisation 84 Improved production planning and modelling 80 Strong linkage to supply and 76 Utilisation improvement trading equivalent to adding a medium 72 sized US refinery 2014 2016 2021 7 BP DOWNSTREAM INVESTOR DAY (1)
Slide 28: More competitive, more resilient and more to come
More competitive, more resilient and more to come Top quartile net cash margin1 $/bbl Competitively advantaged portfolio Industry Globally consistent strategic top programmes, locally executed quartile range >$1bn earnings improvement in 2016 versus 2014 Top quartile ~$1bn earnings growth st
Slide 29: Petrochemicals – technology enabled growth
Petrochemicals – technology enabled growth 16 18.6m > 500 sites in 10 tonnes p.a. patents on countries capacity proprietary technology PX PTA Acetyls O&D and Specialties Purified Terephthalic Paraxylene Acetyls (Acetic Acid Olefins and Derivatives Acid (PTA) (PX) and Methanol) (O&D) and Specialities
Slide 30: Petrochemicals market dynamics
Petrochemicals market dynamics Continued demand growth for our products1 200 Indexed PTA/PX Demand growth of 4 - 6% per annum Acetic Acid 150 100 Reduced utilisation due to capacity 2010 2015 2020 2025 overbuild Global PTA & Acetic Acid industry utilisation1 100 % 100% PTA Acetic Acid Utilisat
Slide 31: Repositioning and growing earnings
Repositioning and growing earnings Business Improvement Plans Pre-tax earnings growth – 2016 to 20211 delivering sustainable value $bn Technology deployment & 0.8 Efficient operations licensing 1 Environ- ment2 0.4 Portfolio Significant earnings growth 0.0 2016 Technology 2021 deployment & Double di
Slide 32: Efficient operations
Efficient operations Reducing costs Right sizing the organisation Cash cost per tonne Year end roles 3000 ~25% reduction ~15% reduction 2000 ~ 20% reduction in cash cost / tonne 20 1000 2016 - 2021 2014 2016 2021 2014 2016 2021 12 BP DOWNSTREAM INVESTOR DAY JUNE 2017
Slide 33: Technology deployment and licensing
Technology deployment and licensing PTA investment lowers variable costs Licenses won 2012 – 2017 Indexed ~80% licence bids won 100 Pre-iPlan Post-iPlan Oman India China PTA ~6 mte 50 60 S Korea $ /tonne China PX ~6 mte cost advantage on India PTA vs conventional 0 technology Industry China Europe U
Slide 34: Commercial optimisation and feedstock
Commercial optimisation and feedstock Improving asset performance Utilisation1 % Sales growth - improved 95 utilisation Feedstock sourcing 85 Debottlenecks and speciality product growth 75 > 10% increase in sales Transition to lower carbon future volumes 65 2016 - 2021 2014 2016 2021 14 BP D
Slide 35: More resilient, more competitive and more to come
More resilient, more competitive and more to come Repositioning the business Petrochemicals cash breakeven1 and growing earnings Indexed 100 Access to growth products >40% reduction Operations excellence enabled by industry-leading proprietary 75 technology Repositioning cost structure to impr
Slide 36: Advantaged Manufacturing – key messages
Advantaged Manufacturing – key messages SAFETY REFINING PETROCHEMICALS # 1 Top quartile > 40% Reduction in cash Core value net cash margin breakeven by 2018 BUSINESS ADVANTAGED IMPROVEMENT PLANS MANUFACTURING Globally consistent, >$ 1bn executed locally underlying earnings growth1 still to come 16 B