Repsol Sa · BME:REP
Repsol Sa — Investor Presentation (November 2021)
58 slides from Repsol Sa's investor presentation, November 2021
Slide 1: Stepping up the Transition
Investor Stepping up the Transition Update Driving growth and value November 2021 1
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2021 This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to tr
Slide 3: Strategic Plan 2021-2025: Delivering a compelling investment case into the Transition
Strategic Plan 2021-2025: Delivering a compelling investment case into the Transition ‒ A legacy double-geared engine providing cash-flow and solid foundations for the Transition ‒ Profitable business platforms with leading advantaged positions: Iberia & Downstream ‒ New operating model, catalyzing
Slide 4: Index
Index 01. Repsol: New corporate model 02. Path to 2030 03. Strategy 2021-2025 04. Business strategies 05. Stepping up energy transition 06. SP summary 07. Delivery 3Q21
Slide 5: Repsol: New corporate model
Repsol: New corporate model 01.
Slide 6: New Repsol corporate model for increased accountability and value transparency
Early movement: New Repsol corporate model for increased accountability and value transparency REPSOL Group Group Corporate Center (Governance, Financial and Strategic Management and Integration synergies) Group Global Services (Efficiency and Scale) Industrial Customer-centric Low-carbon generation
Slide 7: Clear logic for Repsol new corporate model
Clear logic for Repsol new corporate model Clear differentiation of businesses profiles and equity stories within the Group Alignment of cost of capital with business profile for each business Ability to develop appropriate partnerships for each business Value crystallization and transparency Accele
Slide 8: Path to 2030
Path to 2030 02.
Slide 9: Ambitious transformation journey to thrive in Energy Transition
Ambitious transformation journey to thrive in Energy Transition De-carbonize New operating the portfolio Profitable Four verticals model FCF growth New partnerships Path to 2030 Advantaged Value transformation crystallization Towards Net Zero emissions Leading investor proposition 9
Slide 10: Repsol 2030: A more sustainable, balanced and profitable company
Repsol 2030: A more sustainable, balanced and profitable company Transforming the company's portfolio Strong cash-flow growth CE 2019 CE 2025 CE 2030 FCF (B€) 8% 7% 10% 5 % Low Carbon Retail 2% 12% Customer centric business 25% x 2.6 Renewables 34% 37% Industrial transformation (circularity, H2 & e-
Slide 11: Strategy 2021-25
Strategy 2021-25: 03.
Slide 12: Delivering financial targets while transforming the company
Delivering financial targets while transforming the company Ambition 21-25 2021 - 2022 2023 - 2025 Ensuring strong Accelerating transformation and delivering performance and financial strength growth In an uncertain economic and commodities environment ‒ Efficiency & capital discipline ‒ Portfolio o
Slide 13: Scenario assumptions
Scenario assumptions Projections (2021-2025) 2021 2022 2023 2024 2025 Brent price ($/bbl) 50 50 50 50 50 Henry Hub Price ($/Mbtu) 2.5 2.5 2.5 2.5 2.5 Repsol Refining Margin indicator ($/bbl) 3.5 4.0 4.5 5.2 5.8 Spanish average power price (€/MWh) 42.5 42.5 42.5 42.5 42.5 ± $10/bbl BRENT ± $0.5/Mbtu
Slide 14: Strong growth in per share metrics driving valuation upsides
Strong growth in per share metrics driving valuation upsides +20%CAGR +7%CAGR +10%CAGR FCF per share CFFO per share Adjusted Net Income per share 3.2 5.7 2.2 0.6 €/sh €/sh +7% €/sh CAGR 4.6 +10% 2.1 CAGR 1.5 +20% CAGR 5.0 1.8 2.6 2.1 3.3 1.0 0.8 Adjusted1 2019 2025 Adjusted1 2019 2025 Adjusted1 2019
Slide 15: Self-financed plan
Self-financed plan Cash generation Cumulative sources and uses of cash, 2021-2025 (B€) 2021-2025 B-even post-dividends ($/bbl) Shares buyback Divestments1 29.4 29.4 & Optionalities 1.4 1.4 2.0 0.4 0.6 5.0 4.7 4.4 Dividends Financials2 $50/bbl 9.3 Additional Low Carbon FCF BE capex 2021-2025 3 (inc.
Slide 16: Discipline, flexibility and transformation: Capex 21-25
Discipline, flexibility and transformation Capex 21-25 Updated ambitions Building up transformation within 2021-2025 Profitable decarbonization Capex (B€/y) Updated ambition 2 4.0 IRR-WACC1 (%) 3.6 Capex to Low 0.4 >10% 0.2 0.3 €6.5 B Carbon3 projects in 2021-2025 0.9 0.8 0.9 35% of total capex 2.5
Slide 17: Legacy and new businesses driving portfolio performance along the Transition
Legacy and new businesses driving portfolio performance along the Transition Contribution to portfolio financial profile 21-25 Capital Employed 2025 21-25 Capital Investment 1. Industrial includes Refining Spain and Peru R&M, Chemicals, Trading & Wholesale Gas businesses Note: Corporate values not c
Slide 18: Leading distribution and clear capital allocation framework
Leading distribution and clear capital allocation framework Capital allocation 21-25 Resilient shareholder distribution Capital allocation priorities Capital +5% over original Dividend reduction 75 M shares 2022 1 €0.63 SP commitment 4 Extra shareholder distribution 2022 1 If Price deck >1.00 improv
Slide 19: Specific gearing target range, preserving a strong financial structure
Specific gearing target range, preserving a strong financial structure 2021-2025 gearing1 25% average Strong Liquidity Position Proforma 2020 (Billion €) €8.2 B Proforma 2020 2021-22 2023-25 Same Debt with strong EBITDA growth Committed Credit lines Cash & Eq. Maturities ‒ Current liquidity covering
Slide 20: Business strategies
Business strategies 04.
Slide 21: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 21
Slide 22: Repsol E&P priorities 2021-25
Repsol E&P priorities 2021-25 1 FCF as a priority (Leading FCF B-even) 2 Resilient Value delivery 3 Focused portfolio 4 Tier 1 CO2 emissions − FCF breakeven <$40/bbl − Top leading project − Value over volume − Emissions intensity − Low capital intensity and profitability • Flexible production level
Slide 23: Focus on capital efficiency and cash generation
Focus on capital efficiency and cash generation Upstream FCF (B€) @50/2.5 FCF BE, Brent ($/bbl) OPEX reduction (B€) Emissions reduction (Mt CO2) -20% -15% x 1.5 -75% 4.50.9 < 50 2.1 10.3 0.6 1.8 < 40 -0.1 2.5 Av. 2016-18 Av. 2019-20 Av. 2021-25 2016-2020 2021-2025 Av. 2016-20 Av. 2021-25 2020 2021-2
Slide 24: Focus portfolio and capex allocation: Playing to our core areas
Focus portfolio and capex allocation: Playing to our core areas Upstream Portfolio span reduction from >25 to <14 countries ambition Highly selective new exploration strategy Successful track record discovering additional resources Alaska Norway in productive basins recently Canada UK ‒ Alaska Nor
Slide 25: Focus portfolio and capex allocation: projects self-funded 21-25
Focus portfolio and capex allocation: projects self-funded 21-25 Upstream Resilient and Flexible capital program Alaska Pikka (USA) <40 YME (Nor) <30 Self-funded projects ‒ FO: 2025 ‒ FO: 2021 ‒ Capex 21-25: 1,0 B$ ‒ Capex 21-25: 0,2 B$ ‒ Oil (Brent) ‒ Oil (Brent) <40 Shenzi (USA) ‒ SSPump, Sh. Nort
Slide 26: High grading portfolio supporting carbon intensity reduction
High grading portfolio supporting carbon intensity reduction Repsol to become tier 1 lowest carbon intensity High growth new barrels with lower with a 75% reduction emission intensity Emissions reduction Emissions intensity per barrel produced (kgCO2/boe) New production pushes down emissions intensi
Slide 27: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 27
Slide 28: Maximizing yield and developing the next wave of profitable growth
Maximizing yield and developing the next wave of profitable growth Refining1 Chemicals Trading ‒ ‒ ‒ Maximizing margin across businesses 1 Net Cash Margin 1Q Solomon and Wood Mackenzie Differentiation with high value products Maximize the integration and value from assets through a highly integrated
Slide 29: Solid cashflow generation and new businesses build up
Solid cashflow generation and new businesses build up Industrial FCF (B€) CAPEX (B€) 2025 BE1 reduction >$1.5/bbl CO2 reduction2 by 2025 > 2 Mt CO2 Low carbon 1. For Refining business 2. Scope 1+2+3 emissions 29
Slide 30: Maintaining competitiveness in a complex environment
Maintaining competitiveness in a complex environment Refining Strong focus on Maximizing margins competitiveness increase Reducing breakeven to Refining Margin Indicator support cashflow projections progressively recovering1 Maximizing margins generation / Maximizing margins − Supply chain: Greater
Slide 31: 25/25 decarbonization program with strong contribution to margin
25/25 decarbonization program with strong contribution to margin improvement and CO2 reduction Maximizing energy efficiency with attractive returns New low carbon business selected projects C43: Waste & UCOs Investment Capacity Industrial energy efficiency treatment plant 250 kta Sustainable biofuel
Slide 32: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 32
Slide 33: Strong and growing profits and cash generation
Strong and growing profits and cash generation Customer-Centric Businesses Strategy 2021-25 Mobility leader in Key Longstanding Iberian continuous High-growth power foundations Energy Leader customer business transformation Multi-energy Cross-sell to current customers and channels, adding new servic
Slide 34: Launching Repsol's Transversal Loyalty Program
Launching Repsol's Transversal Loyalty Program to orchestrate customer-centric multienergy approach across customer base Engage customers repsol.es >8 M customers Transversal by 2025 loyalty Program >35 M >24 M >10 M 2M Repsol registered Repsol digital Mobility ‒ Integrated customer data Home app Re
Slide 35: Growth ambition with strong FCF generation
Growth ambition with strong FCF generation Customer Centric Business Digital customers ('000) EBITDA (B€) FCF (B€) X 1.3 X 1.4 X 4.0 8,000 1.4 0.8 0.6 1.0 0.5 0.9 2,000 2020 2025 2019 2020 2025 2019 2020 2025 P&G + 1,100 k 2,000 k Mobility contribution margin (M€) x 1.15 E-Mobility customers Non-oil
Slide 36: Setting the new business priorities
Setting the new business priorities Upstream Industrial Customer-centric Low-carbon generation Yield and Focus Yield and New Platforms Yield and Transformation Business Build 36
Slide 37: Developing a competitive RES player with international platforms
Developing a competitive RES player with international platforms Estimated low carbon operating capacity (GW)1 Capex (B€) Gross EBITDA2 (M€) − Launch organic growth – development Phase I of Ready to Build and earlier stage 2019 3.0 Gw assets − Develop RES capabilities and project pipeline − Build an
Slide 38: Strong portfolio of advanced stage projects with short term material growth
Strong portfolio of advanced stage projects with short term material growth and robust profitability Spain Chile Boosting project returns through +3-4% 482MW 1 275 MW management IRR3 PI 175 MW Add. pipeline DELTA 335 MW Elena 2021 (137.5 MW) excellence and scale 2022 (137.5 MW) Castilla y León 2021/
Slide 39: De-risking the ambition: Hecate acquisition
De-risking the ambition: Hecate acquisition The acquisition of a stake in Hecate Energy allows Repsol to Well-diversified footprint across the Early and mid term projects create a high growth renewable platform with strong most attractive US energy markets… development capabilities in the US 16.8 GW
Slide 40: Strong capabilities through the value chain driving operational excellence
Strong capabilities through the value chain driving operational excellence resulting in superior value creation Doubl e digit IRR Original De-risked Project Development Energy & risk Construction Engineering, Operations Structuring Energy Management Operations Financing Portfolio Portfolio Managemen
Slide 41: Stepping up energy transition
Stepping up energy transition 05.
Slide 42: Decarbonization is an opportunity to build business platforms
Decarbonization is an opportunity to build business platforms as technology evolves 2025-2030 +2030 2020-2025 Advanced biofuels, biogas and recycling Industrial transformation Renewable hydrogen Synthetic fuels (e-fuels) Hybrid plants Renewable generation Stationary energy storage Low carbon power r
Slide 43: Renewable Hydrogen: ambition to become a leader in the Iberian Peninsula
Ambition to become a leader in the Iberian Peninsula Renewable Hydrogen Clear ambition2 to become Iberian leader Renewable H2 capacity under development [GWeq] Multi-technology approach New ambitions 3 1.9 GWeq providing flexibility, and optimizing production Electrolysis Biomethane Photoelectrocata
Slide 44: Repsol with clear advantages in renewable hydrogen production
Repsol with clear advantages in renewable hydrogen production Renewable Hydrogen Repsol's with an advantageous position resulting in tier#1 LCOH1 ~30% Spain, the best EU location to produce hydrogen with lower vs. a local renewable H2 producer electrolyzers − Renewable H2 production from biomethane
Slide 45: Repsol becoming an advantaged producer: sustainable biofuels
Repsol becoming an advantaged producer Sustainable biofuels Repsol best positioned for sustainable Reaching > 2 Mta of low carbon With a multi-technology and raw biofuels production fuels in 20301 material approach Low carbon fuels gross production (Mta) Use of wastes as feedstock Already a leading
Slide 46: Repsol to develop widespread, smart, conveniently-located charging network
Repsol to develop widespread, smart, conveniently-located charging network e-Mobility Ultra / Fast +1,000 2022 chargers every A very synergistic business with public attractive economics for Repsol 50km chargers The economics of E-Mobility & home power consumption are even Committed to develop a mor
Slide 47: Renewed decarbonization ambition
Renewed decarbonization ambition Repsol decarbonization pathway Carbon Intensity Indicator reduction targets [gCO2/MJ] Absolute emissions reduction (%) Scope 1&2 operated emissions [Mt CO2eq] Scope 1,2&3 net emissions [Mt CO2eq] -55% -30% 2016 2030 2016 2030 Methane intensity reduction 2025 vs 2017
Slide 48: SP summary
SP summary 06.
Slide 49: Delivering a compelling investment case into the Transition
Delivering a compelling investment case into the Transition Strategic Plan 2021-2025. Driving growth and value with capital discipline FCF generation FCF 21-25: €2.2 B/y Profitable business platforms EPS 25: €1.8/share ‒ 2021-22: Resilience and Strength CFFO/share +7% CAGR 19-25 ‒ 2023-25: Accelerat
Slide 50: Main business value growth and ESG KPIs and commitments
Main business value growth and ESG KPIs and commitments Low-carbon ESG Upstream Industrial Customer-centric generation FCF (B€) 2021-25 @50/2.5 FCF (B€) 5.1 EBITDA (B€) Low-carbon capacity (GW) 2025 Peru R&M X5 x2.8 15% IIC reduction1 5.1 + 0.34 Chemicals 1.4 8.3 Updated ambition 4.5 4.3 LAS4 New am
Slide 51: Delivery 3Q21
Delivery 3Q21 07.
Slide 52: Higher prices support stronger results. Production back to normal in October
Higher prices support stronger results. Production back to normal in October Operational highlights – Upstream Production 3Q21 vs 2Q21 CFFO per barrel Gas realization price ($/boe) ($/kscf) (Kboe/d) +110% +77% -16 -11 -4 561 530 ~580 9M20 9M21 9M20 9M21 Oil-Gas production mix Gas sales price referen
Slide 53: Recovery of refining margin and utilization. Chemicals on track to beat guidance
Recovery of refining margin and utilization. Chemicals on track to beat guidance Operational highlights - Industrial • Margin indicator: 3.2 $/bbl 3Q21 vs 1.5 $/bbl in 2Q21 • On track to surpass FY21 €1 B EBITDA objective Refining • Highest utilization rates since 1Q20: Chemicals Distillation 81%, C
Slide 54: Gradual recovery of Mobility. Progress on Renewables pipeline
Gradual recovery of Mobility. Progress on Renewables pipeline Operational highlights - Commercial and Renewables Mobility • Sales in Service Stations in Spain -10% vs Renewable 3Q19 Generation Ongoing recovery to • Completed disposal of Mobility business Progress on • Valdesolar: started operations
Slide 55: Next phase of capital allocation framework
Next phase of capital allocation framework Capital allocation Accelerated growth in Low Carbon Increased Shareholder Remuneration • Additional €1 B Low Carbon 2021-2025 investment • 2022 Cash dividend €0.63 per share, +5% above Strategic Plan commitment • Low Carbon 2021-25 capex increases from 30 t
Slide 56: Increasing our ambitions into the Energy Transition
Increasing our ambitions into the Energy Transition Capital allocation Increasing renewable and hydrogen ambition and setting new CCB targets Green H2 generation capacity 1 (GWeq) Renewable generation capacity 2,3 (GW) Customer Centric businesses +60% +60% 20 1.9 +1,000 12.7 Public PoR by 2022 in Ib
Slide 57: Improved outlook to the end of 2021
Improved outlook to the end of 2021 Outlook 2021 Production ~ 580 Kboe/d • - 3% vs. previous guidance due to longer than expected operational issues in 3Q Refining Margin >2 $/bbl • >4 $/bbl in 4Q21; ~ 4.5 $/bbl 4Q to date Indicator • + €0.6 B vs. previous guidance (prices and industrial margins) EB
Slide 58: Stepping up the Transition
Investor Stepping up the Transition Update Driving growth and value November 2021 58