Eni S.p.a. · MIL:ENI

Eni — Investor Day (April 2018)

42 slides from Eni's investor day presentation, Apr 18, 2018

  1. Slide 1: Eni 2018-2021 Strategy Presentation, 18 April

    18 April 20

  2. Slide 2: Disclaimer

    Disclaimer This document contains forward-looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In add

  3. Slide 3: Eni's 2018-2021 Strategy Presentation

    Enis 2018-2021 Strategy Presentation 2014-17 COMPANY POSITIONED FOR A LOWER SCENARIO 2 2018-21 VALUE EXPANSION IN ALL BUSINESSES 3 DIGITALIZATION AND DECARBONIZATION IN THE PLAN 4 FINANCIAL PLAN AND DISTRIBUTION POLICY

  4. Slide 4: Relentless efforts on HSE improvements

    Relentless efforts on HSE improvements People Safety | TRIR Upstream Methane Emissions | MTCO2 eq. Flaring down | MSmc Upstream GHG intensity vs production Eni top performer since 2012 -15% TCO2E /TOE since 2014: on track to reach 2025 target (-43%) 2.5 5 10000 2 4 8000 1.5 Industry 3 6000 average 1

  5. Slide 5: FIT to GROW

    Eni 2014-17 strategy 4YP 2014-17 2018-2021 COMPANY POSITIONED FOR A LOWER SCENARIO TRANSFORMATION into a fully integrated O&G FIT to GROW UPSTREAM enhancement MID-DOWNSTREAM restructuring FINANCIAL resilience 5

  6. Slide 6: UPSTREAM enhancement

    UPSTREAM enhancement F&D Costs| $/boe Dual Cash in from disposal $ 10.3 bln since 2013 EXPLORATION 35 30 25 Integrated 20 $/boe MODEL 15 NPV of Projects from exploration since 2014 $ 8.8 bln 10 5 kboed 1816 0 Production 2013-15 2014-16 2015-17 RECORD 1598 Eni Peers average 2014 2017 6 Peers:, BP, RD

  7. Slide 7: MID-DOWNSTREAM restructuring

    MID-DOWNSTREAM restructuring  Structurally underlying positive Cumulative CFFO| € bln  Long-term contracts alignment to market level  Take or Pay recovery 2017 1.8  Cost reduction G&P 6.1  Production efficiency  Logistics rationalization  2 sites converted to bio- plants  Halved refining bre

  8. Slide 8: FINANCIAL discipline

    FINANCIAL discipline GEARING DIVIDEND CASH NEUTRALITY* | $/bbl WHILE PRESERVING BUSINESS GROWTH Peers adopting scrip dividend 18% 114 Change since 2013 % points) 14% 39 10% Dual including Exploration dual 57 effect exploration 6% model 2% -2% 1 2 3 4 5 0% 10% 20% 30% 40% 2014 2017 2017 Gearing % 8 P

  9. Slide 9: 2018-21 Value Expansion in All Businesses

    2018-21 2 VALUE EXPANSION IN ALL BUSINESSES

  10. Slide 10: Eni strategic evolution: business integration along the value chain

    Eni strategic evolution BUSINESS INTEGRATION along the value chain UPSTREAM enhancement UPSTREAM-MIDSTREAM VALUE GROWTH UPSTREAM - DOWNSTREAM UPSTREAM - RENEWABLES EFFICIENCY FINANCIAL DISCIPLINE DECARBONIZATION PATH DIGITALIZATION & & GREEN ENERGIES INNOVATION 10

  11. Slide 11: Upstream key targets in the 4YP

    Upstream key targets in the 4YP 3.5% 2 bln CAGR 2017-21 organic boe 4YP expl. resources ~40 22 Upstream CAPEX $/bbl € bln 4YP upstream FCF COVERAGE 11

  12. Slide 12: A global range of exploration opportunities

    A global range of exploration opportunities Barents Sea North Slope Net Acreage 400,000 km2 at YE 2017 Porcupine Equity Basin Risked Potential 10 acreage| Eni net sq km Morocco Egypt & Oman Mexico offshore Levantine offshore Vietnam bln boe offshore Transform Lamu Myanmar Margin 4YP Spending * Lower

  13. Slide 13: Mexico: the power of exploration

    Mexico: the power of exploration A rapidly-growing / high-quality portfolio, coupled with a fast track development of material resources Block 24 Area 1 Eni Mexico (65%) Qatar Petroleum (35%) Zona Sur  Eni Operator with 100% working interest  Fields: Amoca, Miztón, Tecoalli Block 10  Shallow wate

  14. Slide 14: Ramp-ups and start-ups driving growth

    Ramp-ups and start-ups driving growth MAIN ONSTREAM PROJECTS OIL & GAS PRODUCTION | kboed 15 MAJOR START-UPS  Zohr 2018  OCTP Gas CAGR 2021-2025  West Hub - Ochigufu  Jangkrik Complex CAGR 2017-2021 3%  Bahr Essalam Ph.2 3.5%  Wafa Compression  Nidoco Ph. 2/3 2018 4%  East Hub  Area 1 Mexic

  15. Slide 15: Production trends

    Production trends GEOGRAPHICAL SPLIT % New producing Countries 2017 2021 Caspian Europe Abu Dhabi America Mexico North Africa Asia Pacific & Middle East 15 Africa Sub-Saharan

  16. Slide 16: Asia Pacific & Middle East: an expanding high-potential area

    Asia Pacific & Middle East: an expanding high-potential area Asia Pacific and Middle East Production contribution @ 2021 >250 kboed Exploration activity JANGKRIK Oman offshore Vietnam MERAKES Myanmar NASR ABU DHABI UMM SHAIF East LOWER ZAKUM Kalimantan 16

  17. Slide 17: Zohr is ramping up

    Zohr is ramping up RAMP UP BCF/D 2.7 2.0 Accelerated start-up 0.4 Ramp-up to plateau 01/2018 01/2019 01/2020 Accelerated start-up Ramp-up to plateau Plateau Extension  6 wells + 26’’ line + 14” line  14 additional wells + 2x30’’ export lines  5 additional wells + 2x30’’ export lines  1 control p

  18. Slide 18: Value expansion of production growth

    Value expansion of production growth CASH FLOW PER BARREL | $/boe 4YP start up 4YP start up 25.2 24.5 $22/boe @ $70 18 scenario 17.5 16.7 legacy 15.8 legacy 15.5 @ $60/bl scenario 14 @ 2017 scenario 2017 2018 2020-21 HIGH QUALITY LONG TERM CASH FLOW 18

  19. Slide 19: The rise of upstream cash flow

    The rise of upstream cash flow Upstream CFFO € bln 13 Upside @ $ 70/bl 11 9 7 Capex Upstream 5 3 2017 2018 End of plan Brent $/bbl 60 60 60 FULL COVERAGE OF DIVIDEND WITH UPSTREAM FCF 19

  20. Slide 20: Mid-downstream key targets

    Mid-downstream key targets 2 4.7 € bln € bln EBIT end of plan Total 4YP FCF 20

  21. Slide 21: Gas & Power - bigger and stronger

    Gas & Power - bigger and stronger EBIT | € bln Gas & LNG Marketing and  Integration with upstream Gas & LNG Marketing and Power Retail – Eni gas e luce 0.8 Power  Focus on Asia and new markets  2025 contracted volumes: 14 MTPA 0.3 0.2  Contract modernization with key gas suppliers 2017 2018 End

  22. Slide 22: A top player in the LNG market

    A top player in the LNG market LNG SUPPLY - EQUITY VS THIRD PARTY 15 2017 2021 10 30% 70% 5 0 2017 2018 2021 2025 Equity Third Party LNG Equity existing LNG Equity New LNG Third Party LNG contracted volumes 12 MTPA @ 2021 22

  23. Slide 23: R&M - leaner and greener

    R&M – leaner and greener EBIT | € bln Refining  Breakeven margin $3/bbl end 2018 Refining 0.9  Deep conversion proprietary Marketing technology licensing 0.5 0.6  Asset optimization Biofuels  Venice and Gela plants onstream  Ecofining proprietary technology 2017 2018 End of plan  2021: 1 Mton/

  24. Slide 24: Versalis - an international player

    Versalis – an international player EBIT | € bln Chemicals  Consolidation industrial footprint 0.5  Strengthening international 2017 0.4 presence Scenario 0.3  Business integration effect Differentiated products  New products’ development 2017 2018 End of plan  Focus on high margin products  Ac

  25. Slide 25: New energy solutions

    New energy solutions AN INTEGRATED MODEL Capacity end year| GWp 5 ~1  Synergies with Eni assets and activities  International expansion in Eni Countries 2018 2019 2020 2021 2025  Solar, Wind and Hybrid Technologies  R&D Deployment 4YP CAPEX € 1.2 Bln 25

  26. Slide 26: Digitalization and Decarbonization in the Plan

    DIGITALIZATION AND 3 DECARBONIZATION IN THE PLAN

  27. Slide 27: Digital transformation

    Digital transformation 2017 2021 BUILD ON OUR DIGITAL ACCELERATION along our value chain SUCCESSFUL DIGITAL Upstream Mid- Downstream HISTORY Exploration Development Drilling Operations Refining/Chemicals Trading Retail INVESTMENT IN Enhanced Seismic Imaging & data processing ASSET INTEGRITY Blockcha

  28. Slide 28: Carbon footprint reduction

    Carbon footprint reduction TARGETS @ 2025 O&G resources | % UPS UNITARY -43% DIRECT EMISSIONS vs 2014 ROUTINE GAS FLARING zero Oil Gas FUGITIVE -80% EMISSIONS | MtCH4 vs 2014 28

  29. Slide 29: Eni in Italy: our green businesses

    Eni in Italy: our green businesses NEW ENERGY Porto Marghera Energy Solutions Trecate (2 sites) PROGETTO ITALIA Green Chemicals Ferrera Installed capacity by 2021 220 MW Erbognone Green Refineries Ravenna Production capacity Up to 0.4 TWh/y Cengio (from 2022) BIO-FUELS  VENEZIA: 2nd fase – ongoing

  30. Slide 30: R&D and technologies: our engine for sustainable growth

    R&D and technologies: our engine for a sustainable growth Safety and Environmental Protection Renewable energy technologies  Upstream technologies to minimize operational risk  Biomasses to Fuel  CLEAN SEA - Continuous Long More than 50 Term Environmental and Asset World Research Center and Unive

  31. Slide 31: Financial Plan and Distribution Policy

    FINANCIAL PLAN 4 AND DISTRIBUTION POLICY

  32. Slide 32: Core financial values

    Core financial values SHAREHOLDER RETURNS SUSTAINABLE F INANCIAL GROWTH D ISCIPLINE 32

  33. Slide 33: CAPEX Plan

    CAPEX Plan 2018 capex: ~ € 7.7 bln 2018-2021 capex: < € 32 bln Other Mid-Downstream 15% 49% 3% >80% Upstream 26% 7% 4% 7% 4% Exploration Prod. optimiz. & stay in business Development Upstream G&P R&M Chemicals Energy solutions 33

  34. Slide 34: Upstream: focus on projects under development

    Upstream: focus on projects under development Cumulative Net Cash flow IRR Dual Exploration benefit not included $bln 18% 25 16% 15 5 13% -5 $50/b $60/b $70/b -15 2017 2018 2019 2020 2021 2022 2023 2024 2025 NCF NCF including dual exp model < $30/boe Anticipated payback BREAKEVEN 34

  35. Slide 35: Upside exposure and downside resilience

    Upside exposure and downside resilience Free Cash flow Cash Neutrality € bln $/bl ROACE 12% 58 15 10 53 @ 4YP €/$ exchange rate 5 CAPEX CAPEX CAPEX @ 2018 €/$ exchange rate = 1.17 0 48 2017 2018 Plan End 2017 2018 end of plan Underlying operating cash flow @ $60 Underlying operating cash flow @ $70

  36. Slide 36: Remuneration policy and cash allocation

    Remuneration policy and cash allocation Committed to DIVIDEND POLICY PROGRESSIVE WITH € 0.83 in 2018 UNDERLYING EARNINGS AND FCF + 3.75 % vs 2017 Preserving BALANCE SHEET Leverage target 0.2 – 0.25 STRENGTH Upside SHARE Excess cash BUY BACK distribution 36

  37. Slide 37: Conclusions

    Conclusions DEEPER INTEGRATION CAPITAL DISCIPLINE High margin growth Sizeable and in Upstream competitive LNG Sustainable Mid-downstream portfolio upgrade ENHANCED RETURN TO SHAREHOLDERS 37

  38. Slide 38: 1st Quarter 2018 Preview

    1st Quarter 2018 Preview Brent | $/bbl European gas prices | €/kcm Oil & Gas Production | kboed 66.8 240 227 1,900 , 219 195 53.8 1Q 2017 1Q 2018 1,850 , ~4% 1Q 2017 1Q 2018 PSV TTF PSV TTF 1,800 , Exchange rate | €/$ Std. Eni Refining Margin | $/bbl 1,750 , 1,795 1.114 1.229 4.2 1,700 , 3.0 1Q 2017

  39. Slide 39: Back up

    Back up

  40. Slide 40: Assumptions and sensitivity

    Assumptions and sensitivity 4YP Scenario 2018 2019 2020 2021 Brent dated ($/bl) 60 65 70 72 FX avg ($/€) 1.17 1.18 1.20 1.25 Std. Eni Refining Margin ($/bl) 5.0 5.0 5.0 5.0 NBP ($/mmbtu) 5.8 5.6 5.5 5.8 PSV (€/kmc) 188 178 171 175 Sensitivity* EBIT adj (€ mln) net adj (€ mln) FCF (€ mln) Brent (-1 $

  41. Slide 41: Main start-ups in the 4YP

    Main start-ups in the 4YP Equity Working Liquids/Gas Main start ups 2018-2021 Country Op Start-up peak in 4 YP kboed Interest Zohr Egypt yes Achieved 12/2017 200 50% Gas West Hub (Ochigufu) Angola yes Achieved 03/2018 <10 37% Liquids Wafa Compression Libya yes 1H18 25 50% Liquids/Gas Oil: 5/17 OCTP

  42. Slide 42: Reference TCFD dashboard

    Reference TCFD dashboard Recommendation ANNUAL REPORT SUSTAINABILITY REPORT GOVERNANCE a a Disclose the organization’s governance around climate-related Key elements Disclosure risks and opportunities. STRATEGY Disclose the actual and potential impacts of climate-related risks a a and opportunities

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