Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — FY2021 Earnings Presentation
44 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, February 2022
Slide 1: 4Q21 & FY21 Results and 2022 Outlook
4Q21 & FY21 RESULTS and 2022 OUTLOOK February 2022 1 4Q21 & FY21 Results and 2022 Outlook
Slide 2: Disclaimer
Disclaimer Unaudited figures for 2021 financials, emissions and carbon intensity indicators. This document may include forward-looking statements, including, without limitation, regarding future results, namely cash flows, dividends, and shareholder returns; liquidity; capital and operating expendit
Slide 3: Strategy overview
01 Strategy overview 2021 & outlook 3 4Q21 & FY21 Results and 2022 Outlook
Slide 4: 2021 key performance indicators
2021 key performance indicators Solid operational …through responsible …delivering robust results performance… practices… during 2021 127 kboped Upstream WI -28 % Emissions operations € 2.3 bn 1.1x or 0.8 x 1 production reduction (scope 1 & 2) RCA Ebitda Net debt to RCA Ebitda 3.3 $/boe -4 % € 1.9 b
Slide 5: 2021: strategic realignment to thrive through the energy transition
2021: strategic realignment to thrive through the energy transition New purpose Refreshed strategy Reshaped organisation Portfolio reshaping built upon solid Restructured Executive and foundations Leadership team Regenerate the future together Growth from established and low New People strategy Resh
Slide 6: Showcasing strategic execution
Showcasing strategic execution 2021 snapshot on milestones delivery Change pic Upstream Downstream Renewables New Growth Transformation Growth Energies Strong cash generation Creation of an integrated Boosting organisational JV with Northvolt to develop Energy Management unit capabilities and presen
Slide 7: Galp decarbonisation roadmap
Galp decarbonisation roadmap Delivering towards our commitments 2021 2030 targets Absolute Emissions’ reduction from operations -28% -40% Progressive (Scope 1 & 2) c.3 mtonCO2e decarbonisation towards Carbon Intensity Production-based -13% -40% Net Zero by approach 81.5 gCO2e/MJ 2050 (Scopes 1, 2 &
Slide 8: Refreshed strategy
Refreshed strategy Reshaping portfolio to thrive through the energy transition c.50% of net capex allocated to low carbon Increased operational contribution from low carbon businesses during 2021-25 & transformational businesses >20% Upstream ≥15% Industrial & EM Illustrative Expected IRR1 10-20% €0
Slide 9: A leading energy transition strategy
A leading energy transition strategy Growing from one of the lowest carbon footprints of the sector One of the lowest carbon intensity Galp with a lower carbon Upstream Galp holding the largest integration of players of the sector portfolio renewable generation (in relative terms) Relative carbon in
Slide 10: Competitive shareholders' distribution
Competitive shareholders’ distribution now combining progressive dividend and buybacks 2021 fiscal year proposal1 2022+ revised guidelines € 0.50/sh € 0.52/sh Cash dividend Progressive baseline dividend 1/3 of OCF as per previous guidance 4% p.a. increase starting in 2022 Total expected distribution
Slide 11: Distinctive investment proposition
Distinctive investment proposition Combining sustainable growth and value #1 In the World Growth Growth Competitive from established from low carbon shareholder Top 3 businesses businesses distribution (AAA) Out of 30 Upstream growth from Expanding Progressive cash Integrated low cost & low carbon r
Slide 12: Businesses overview
02 Businesses overview 2021 & outlook 12 4Q21 & FY21 Results and 2022 Outlook
Slide 13: Upstream in 2021
Upstream in 2021 Strong contribution whilst delivering on key milestones Tupi & Iracema (Brazil) Performance supported by a top New Plan of Development submitted to quality portfolio ANP to maximize value creation Bacalhau (Brazil) € 0.9 bn 127 kboepd 2021 Upstream WI production FID for Bacalhau I F
Slide 14: 2022+ outlook for Upstream
2022+ outlook for Upstream Maximise value ahead of next growth phase WI Production from sanctioned projects (kboepd) WI production to remain flat +c.25% until start of Bacalhau in 2024 127 Improving realisations following new gas contracts in Brazil and High-potential exploration activities optimisi
Slide 15: Industrial to capture improved refining conditions
Industrial to capture improved refining conditions after normalised operations 2021 Planned & unplanned maintenance impacting refining availability Resilient refining margin despite higher energy and CO2 costs 3.3 $/boe 2.0 $/boe 77 mboe Refining margin Opex Raw materials processed Outlook for 2022
Slide 16: Executing our Industrial transformation
Executing our Industrial transformation From a grey refinery to a green energy hub 2017 2030 Grey refinery Green energy hub -50% Concentrating Expand advanced biofuels Grow green H2 operations operations in Sines production (HVO) opportunities emissions1 Refining reconfiguration Sines HVO project Si
Slide 17: Unlock Energy Management potential
Unlock Energy Management potential 2021 performance …although maintaining a strong focus on … to boost integrated value impacted by headwinds… strategy execution… creation One off added 1 Enhance integrated Energy Management unit >€ 300 m Value contribution by 2025 regassification costs in included
Slide 18: Commercial in 2021
Commercial in 2021 Encouraging first steps to deploy new value pools Recovering energy sales Transforming our offer Powering our electric offer Volumes following Iberian Convenience contribution margin Rapid expansion of EV network and demand recovery already over 2019 levels fast-growing electricit
Slide 19: 2022 outlook for Commercial
2022 outlook for Commercial Accelerating transformation Leveraging on a leading market presence c. 7.0 mton 2022 oil volumes sold estimate supported on B2B improved contribution Keep expanding non-oil offering > 150 2x new & upgraded stores Convenience Mobility with focus on customer journey contrib
Slide 20: Renewables in 2021
Renewables in 2021 Competitive renewable footprint in place to accelerate capacity build up Iberia portfolio of c. 4.1 GW c.4.7 GW Maintaining leading solar Pipeline capacity presence in Iberia c.1 GW Entering sizable Under production Brazilian market entirely in Iberia Expanding organizational c.1
Slide 21: 2022+ outlook for Renewables
2022+ outlook for Renewables Developing the most integrated renewable energy in the European IEC’s Operating capacity at YE (GW) 12 GW >€ 600 m Secure a competitive early-stage portfolio OCF pro-forma 1 2021-25 >4 GW Disciplined execution of 3.7 GW 1.4 GW current projects pipeline 1.0 GW 2021 2022 2
Slide 22: New Businesses: tapping Li-ion battery value chain
New Businesses: tapping Li-ion battery value chain capturing a competitive advantage in a high-growth opportunity Aurora JV (Galp + Northvolt): Develop the first and most sustainable lithium conversion facility in Europe Conducting technical and economic analysis 50 % up to 35 kton 2026 Use proven c
Slide 23: Financial overview
03 Financial overview 2021 results & outlook 23 4Q21 & FY21 Results and 2022 Outlook
Slide 24: 4Q21: Strong operating results
4Q21: Strong operating results supported in a strong Upstream contribution P&L Group RCA Ebitda of €644 m despite Upstream downstream temporary restrictions (c.€80 m in Strong cash € 593 m € 426 m € 145 m I&EM) € 644 m contribution from macro environment RCA Ebitda OCF Net capex1 RCA Net Income of €
Slide 25: FY2021: Capturing favourable macro conditions
FY2021: Capturing favourable macro conditions with strong upstream offsetting weaker downstream performance Upstream Commercial Industrial & EM Renewables pro-forma2 (€bn) (€m) (€m) (€m) € 2.3 bn 2021 Group RCA Ebitda +48% YoY € 1.9 bn 2.0 325 288 113 98 142 2021 Group OCF 1.5 266 +49% YoY 67 64 76
Slide 26: Strong operating contribution
Strong operating contribution Although cash conversion impacted by temporary working capital effects FY21 Cash flow (€ m) CFFO impacted by WC build from refining Includes €0.6 bn from constraints and gas derivatives margin derivatives margin accounts accounts (to be reversed throughout 2022; 376 CFF
Slide 27: Maintaining a disciplined investment criteria
Maintaining a disciplined investment criteria to support portfolio reshape and growth Net capex Focus on high-quality developments and business transformation c.€ 1.0 bn 2022 net capex c.50% of net capex allocated towards low carbon €0.8-1.0 bn p.a. Assumes higher 2021-25 avg. concentration of Upstr
Slide 28: 2022 financial guidance
Asset base in place to capture supportive environment while reshaping portfolio 2022 financial guidance 2022 operating contribution Upstream growth Very competitive platform to continue c.€ 2.7 bn capturing supportive macro environment RCA Ebitda RCA Ebitda expected at c.€2.2 bn and OCF consolidated
Slide 29: 2022 strong cash conversion expected
2022 strong cash conversion expected enabling significant de-leverage and supporting increased shareholder returns Group Sources & Uses 2022 (€ bn) 2021 fiscal year distributions: 3 • €0.25/sh paid in Sep. 2021 €0.6 bn WC release from • €0.25/sh to be paid after 2022 AGM derivatives margin • €150 m
Slide 30: Appendix
04 Appendix galp.com
Slide 31: Appendix Index
Appendix Index 01 | Macro assumptions + sensitivities 08 | Debt indicators 02 | Key guidance 09 | Renewables portfolios 03 | P&L and balance sheet 10 | Carbon-related targets 04 | Upstream: Operations + financials 11 | Upstream Reserves and Resources 05 | Commercial: Operations + financials 12 | Exe
Slide 32: Macro assumptions and sensitivities
Macro assumptions and sensitivities Macro assumptions 2022E 2023-25E Brent price $75/bbl $60/bbl real terms 2020 Galp refining margin $4 – 5/boe $3 – 4/boe Solar captured price €150/MWh €50/MWh EUR:USD 1.15 1.20 2022 sensitivities (€ m) Change Ebitda OCF Brent price $5/bbl 160 90 Galp refining margi
Slide 33: Key guidance for 2022
Key guidance for 2022 Operational indicators Financial indicators (consolidated, except otherwise stated) Upstream RCA Ebitda € bn c.2.7 Flat YoY WI production kboepd Upstream € bn c.2.2 (2021: 127) Upstream production costs $/boe <3 Commercial €m c.300 Commercial Industrial & Energy Management €m 2
Slide 34: 2021 results
2021 results supported by a strong Upstream contribution despite downstream temporary restrictions P&L (€ m) Balance Sheet (€ m) 31 Dec., 30 Sep., 31 Dec., 4Q20 3Q21 4Q21 FY2020 FY2021 2020 2021 2021 410 607 644 RCA Ebitda 1,570 2,322 Net fixed assets 6,259 6,484 6,667 319 522 593 Upstream 1,111 2,0
Slide 35: Upstream results
Upstream results Strong operational contribution driven by macro environment 4Q20 3Q21 4Q21 FY2020 FY2021 122.8 128.2 124.8 Working interest production kboepd 130.0 126.7 111.1 117.5 111.2 Oil production kbpd 116.9 114.0 121.1 126.6 123.0 Net entitlement production kboepd 128.2 124.9 WI production d
Slide 36: Commercial results
Commercial results Increased sales although contribution pressured by price environment 4Q20 3Q21 4Q21 FY2020 FY2021 Higher oil products QoQ driven by the B2B Commercial sales to clients segment, despite the lower seasonal sales in 1.5 1.8 1.8 Oil products mton 6.0 6.5 B2C 5.8 4.4 4.5 Natural gas TW
Slide 37: Industrial & Energy Management results
Industrial & Energy Management results Refinery constraints and persistent gas sourcing restrictions limiting contribution Refining throughout impacted by planned & 4Q20 3Q21 4Q21 FY2020 FY2021 unplanned maintenances 23.5 22.3 13.6 Raw materials processed mboe 87.1 76.6 1.6 4.1 5.6 Galp refining mar
Slide 38: Renewables & New Businesses results
Renewables & New Businesses results capturing higher solar prices in Iberia 4Q20 3Q21 4Q21 FY2020 FY2021 Renewable power generation Solar capture prices in Iberia reflecting 170 408 213 Gross GWh 327 1,288 increased prices for natural gas and CO2 125 304 157 Net to Galp GWh 238 958 licenses 40.4 110
Slide 39: Debt indicators
Debt indicators Debt Indicators Debt reimbursement (€m) 31 Dec., 30 Sep., 31 Dec., 1,400 2020 2021 2021 Cash and cash equivalents 1,678 1,257 1,942 1,200 Undrawn credit facilities 1,262 1,133 816 1,000 Gross debt 3,743 3,285 4,300 800 Average funding cost 1.7% 1.4% 1.4% 600 Net debt 2,066 2,028 2,35
Slide 40: Renewables portfolio
Renewables portfolio Galp renewable capacity (GW) Operating Under construction Under development Total Gross renewable capacity 963 393 3,390 4,746 Spain 950 249 2,445 3,645 Portugal 12 144 351 507 Brazil 0 0 594 594 Equity to Galp 719 331 2,968 4,018 Spain 713 187 2,023 2,923 Portugal 6 144 351 501
Slide 41: Upstream Reserves and Resources
Upstream Reserves and Resources mboe 2020 2021 Change Reserves 1P 385 410 7% Oil 288 333 16% Gas 97 77 -20% 2P 700 712 2% Oil 553 612 11% Gas 147 100 -32% 3P 923 950 3% Oil 749 849 13% Gas 174 101 -42% Contingent resources (mboe) 1C 525 417 -21% 2C 1,720 1,521 -12% 3C 3,471 3,179 -8% Prospective res
Slide 42: Carbon-related targets
Carbon-related targets Metrics and methodology Metric Methodology 2017 2021 2030 2050 (reference year) (vs 2017) (vs 2017) Absolute Emissions’ c.4 c.3 reduction from operations Emissions related to Galp’s operations (scopes 1 & 2) mtonCO2e mtonCO2e -40% (Sc. 1 & 2) (Sc. 1 & 2) Carbon Intensity Net Z
Slide 43: Galp's Executive Committee
Galp's Executive Committee Andy Brown Filipe Silva Thore E. Kristiansen Teresa Abecasis Georgios Papadimitriou CEO & VP CFO COO Productions & COO Commercial COO Renewables & New Operations Businesses Over 35 years of Over 25 years Over 30 years Over 20 years of Over 20 years of experience in the Oil
Slide 44: galp.com
galp.com