OMV AG · VIE:OMV
OMV — OMV Aktiengesellschaft — Erste Group Investor Conference 2016
29 slides from OMV's conference presentation, Oct 10, 2016
Slide 1: Erste Group Investor Conference
Erste Group Investor Conference Magdalena Moll, SVP Investor Relations Stegersbach October 10, 2016 Value creation through performance OMV Aktiengesellschaft
Slide 2: Disclaimer
Disclaimer This document does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract, investment decisions or commitment whatsoever.
Slide 3: OMV – an international, integrated oil and gas company
OMV – an international, integrated oil and gas company Upstream ► Three core regions: CEE, North Sea, Middle East and Africa ► Production: 303 kboe/d (~50% oil, ~50% gas) ► 1P reserves at year-end: 1.03 bn boe (reserves life of 9.3 years) ► ~90% of production in EU and OECD countries Downstream Oil
Slide 4: HSSE – Safety is our top priority
HSSE – Safety is our top priority Safety record Sustainability highlights LTIR 1 OMV Group ► Major accident prevention policy implemented across the Group 0.66 ► Specific training programs implemented 0.52 ► HSSE efforts not compromised by cost 0.44 reduction programs 0.38 0.27 2012 2013 2014 2015 6
Slide 5: 6m/16: Key messages
6m/16: Key messages ► Positive free cash flow after dividends ► 2016 CAPEX guidance reduced to EUR 2.2 bn ► Cost reduction ahead of schedule ► Rebalancing of the Upstream portfolio well on track: OMV closed the sale of a 30% stake in the Rosebank field 5 | OMV Group, Erste Group - Investor Conferenc
Slide 6: 6m/16: Financial performance
6m/16: Financial performance Clean CCS EBIT Clean CCS net income Free cash flow in EUR mn attributable to stockholders in EUR mn in EUR mn 708 600 406 27 381 396 (421) (950) 6m/15 6m/16 6m/15 6m/16 6m/15 6m/16 58 40 Brent price in USD/bbl Free cash flow before dividends 7.6 4.9 OMV indicator refinin
Slide 7: Ahead of schedule to reduce the cost base
Ahead of schedule to reduce the cost base Operating cost 1 reduction in EUR mn 150 Delivery of EUR 100 mn >150 New target already in 2016E >50 mn EUR 100 100 100 Original target 50 100 mn EUR 0 Baseline 2015 Dec. 2016 Dec. 2017 1 On comparable basis 7 | OMV Group, Erste Group - Investor Conference,
Slide 8: Portfolio developments
Portfolio developments Rosebank ► Closing of the sale of a 30% stake in the Rosebank field ► Initial payment of USD 50 mn received; additional payment up to USD 165 mn on Financial Investment Decision Gas Connect Austria ► Sale of 49% minority stake in Gas Connect Austria to a consortium of Allianz
Slide 9: Outlook for the full year 2016
Outlook for the full year 2016 ► Brent oil price: Annual average of USD 40/bbl expected H2/16 margins expected to be below H1/16 level; ► Refining: Utilization rate >90% in H2/16 ► European gas markets: Oversupply continues; H2/16 prices expected to be above H1/16 level ► Production: Slightly above
Slide 10: Strategy in a nutshell
Strategy in a nutshell Upstream Downstream Exploration Development Production Downstream Downstream Gas Oil Restructure and Strong cash Value over volume growth grow volume generator 10 | OMV Group, Erste Group - Investor Conference, October 10, 2016
Slide 11: Upstream activities will be focused
Upstream activities will be focused Edvard Grieg (Lundin), Norway Urengoy, Russia (source Gazprom) Schönkirchen, Austria New Abu Dhabi, UAE Zealand Core regions contribute ≥ 50 kboe/d Core region 1 – CEE Core region 3 – MEA Core region 2 – North Sea Development areas (Russia, UAE, Iran) Note: Some e
Slide 12: Value over volume growth in Upstream: Maintain base production of ~300 kboe/d
Value over volume growth in Upstream 1: Maintain base production of ~300 kboe/d OMV production in kboe/d 360 Upside Russia (Achimov IV/V) potential Libya/Yemen 5-10% Base Upstream 303 300 CAPEX, production cumulative 2016-2020 90-95% 2015 2020 Resilience of portfolio: ~90% of current production is o
Slide 13: Middle East and Russia among the lowest cost upstream regions in the world
Middle East and Russia among the lowest cost upstream regions in the world Russia Middle East Northern Europe Reserves 719 410 remaining 1, 2 42 in bn boe Acquisition cost 2P 3 9 11 in USD/boe 2 43 Finding, development 10 11 and production cost 4 in USD/boe 1 Commercial and Technical 2 Wood Mackenzi
Slide 14: 26% reduction of E&A expenditure in 2016
26% reduction of E&A expenditure in 2016 E&A expenditure EUR 450 mn of E&A expenditure in in EUR mn 2016 confirmed ► Lower activities across the portfolio (26)% ► Focus on low cost regions and near- 607 field opportunities 450 ► Main activities in H2/16 in the Middle 300 East, in Romania and in the
Slide 15: 2016 CAPEX guidance reduced to EUR 2.2 bn
2016 CAPEX guidance reduced to EUR 2.2 bn Group CAPEX Well on track to reduce CAPEX incl. capitalized E&A in EUR bn ► Focus on profitable barrels and sustainable reduction of unit CAPEX (21)% cost 2.7 ► Main investments in 6m/16: 2.4 2.2 ► Field redevelopment projects as well as workovers and drilli
Slide 16: Downstream Gas: Restructure and grow
Downstream Gas Restructure and grow ► Create lean Northwest European gas volume sales business ► Sale of 49% minority stake in Gas Connect Austria signed ► Minimize power activities 16 | OMV Group, Erste Group - Investor Conference, October 10, 2016
Slide 17: Create lean Northwest European gas sales business
Create lean Northwest European gas sales business Northwest Europe: Growing supply position Increase market share to prepare for future supply volumes Launch sales offensive in Germany; 2 bcm Target market share of 10% by 2025 Northwest Europe 4 bcm Focus on industrial customers and municipali
Slide 18: Divestment of a 49% minority stake in Gas Connect Austria
Divestment of a 49% minority stake in Gas Connect Austria ► Sale of a 49% share in Gas Connect Austria to a consortium composed of Allianz and Snam S.p.A. (high quality, long-term oriented partners) ► Sale supports the financial stability and cash flow of OMV without giving up control of Gas Connect
Slide 19: Downstream Oil: Strong cash generator
Downstream Oil Strong cash generator ► Maintain strict capital and cost discipline ► Strengthen integrated margin ► Divest OMV Petrol Ofisi 19 | OMV Group, Erste Group - Investor Conference, October 10, 2016
Slide 20: Strong cash generator Downstream Oil
Strong cash generator Downstream Oil Strong free cash flow contribution even in times of low refining margins in EUR bn 2 1 Ø annual cash contribution Cash flow from without divestments divestments Free cash flow w/o divestments 0 2012 2013 1 2014 2 2015 OMV indicator refining margin 3.8 1.9 3.3 7.2
Slide 21: Financial priorities in a nutshell
Financial priorities in a nutshell Improve shareholder return Focus on cash flow Maintain strong balance sheet 21 | OMV Group, Erste Group - Investor Conference, October 10, 2016
Slide 22: OMV in 2020 – Sustainable resource base with improved profitability
OMV in 2020 – Sustainable resource base with improved profitability ► Cash: Broadly free cash flow neutral after dividends ► Production: 360 kboe/d including upside from Russia and Libya/Yemen ► Reserve Replacement Rate: 100% ► Downstream Gas: Restructured, profitable European gas business ► Downstr
Slide 23: OMV Aktiengesellschaft
IV Aktiengesellschaft ouv Moving more. Moving the future. oO M Vv
Slide 24: Backup
Backup OMV Aktiengesellschaft
Slide 25: Development of economic environment
Development of economic environment Oil price Brent OMV indicator refining margin in USD/bbl in USD/bbl 80 8 7.8 7.8 60 6 62 5.9 40 50 4 5.1 44 46 4.7 20 34 2 0 0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Gas prices Ethylene/propylene net margin 2 in EUR/MWh in EUR/t 25 21.5 600 52
Slide 26: Asset swap between long-term strategic partner Gazprom and OMV progressing well
Asset swap between long-term strategic partner Gazprom and OMV progressing well Expected production development Project fully in line with new strategic direction Indicative production Achimov IV/V in % of plateau Upstream investment in a low cost area Condensate Gas Enabling exploration and app
Slide 27: OMV Petrol Ofisi divestment in progress
OMV Petrol Ofisi divestment in progress Generate additional cash flow through exit of non-strategic asset ► Despite difficult political situation in Turkey, the divestment process is progressing according to plan ► Information memorandum has been sent to prospective buyers ► OMV Petrol Ofisi holds a
Slide 28: Targeting a long-term gearing ratio of ≤30%
Targeting a long-term gearing ratio of ≤30% Net debt development Strong liquidity position as of Q2/16 in EUR bn Cash position at EUR 1.3 bn 5 4.04 4.18 3.99 Committed revolving credit facilities of 4 EUR 3.6 bn (undrawn) 3 Equity ratio development 2 ► Dec. 31, 2015: 44% ► June 30, 2016: 45% 1
Slide 29: OMV Aktiengesellschaft
IV Aktiengesellschaft ouv Moving more. Moving the future. oO M Vv
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