Slide 1: Investor Update March 2019
Investor Update March 2019
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2019 Repsol, S.A. is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored, duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or
Slide 3: Delivering value growth through the cycle
2018-2020 Delivering value growth through the cycle 1. Company overview 2. Strategic progress 3. Upstream update 4. Downstream update 5. Low Carbon update 6. Digitalization & efficiencies 7. Conclusions & key targets 8. Historic data book
Slide 4: Company overview
1 Company overview
Slide 5: Repsol: A unique, Integrated Global Position
Repsol: A unique, Integrated Global Position Company overview Core businesses: Upstream and Downstream ~715 kboe/d production ~2.3 billion boe proved 7.87% reserves1 Sacyr 1 Million bbl/d refining Free Float capacity 92.13% ~2.6 Millions tons of Upstream Downstream Both base chemicals3 capacity • 18
Slide 6: Strategy 2018-2020
Strategy 2018-2020 Company overview 1. Increasing shareholder returns 2. Growing our portfolio profitably • Dividend per share 8% p.a. growth with full buyback of shares • Growth across all value-creation metrics, at any oil price • Dividend target fully covered at $50/bbl • Downstream activated as
Slide 7: Strategic progress
2 Strategic progress
Slide 8: Strong delivery on 2018 commitments
Strong delivery on 2018 commitments Strategic progress ADJUSTED NET EBITDA CCS CAPEX (*) NET DEBT INCOME (€M) (€M) +16% 7,619 (€M) (€M) Guidance 6,580 2018 6,267 -45% 3,874 Guidance +32% Guidance 3,439 2018 2,939 2018 2,131 +10% 2,352 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 CFFO in 2018 more than co
Slide 9: All 2018 targets were achieved
All 2018 targets were achieved Strategic progress COMMITMENT DELIVERY EBITDA at CCS €7.5 Bn €7.6 Bn CAPEX €3.8-4 Bn €3.9 Bn NET DEBT €3.5 Bn €3.4 Bn IMPLEMENTATION Organic FCF Breakeven 50 $/bbl (avg. 2018-2020) 54 $ /Bbl (1) Dividend per share ~ € 0.9 ~ € 0.9 (2) Share Buyback 100% 100% Net product
Slide 10: Increasing shareholder remuneration and full buyback of scrip
Increasing shareholder remuneration and full buyback of scrip Strategic progress Dividend per share based on disbursement year CAGR +8% €/share 0.80 (*) 0.95 1.00 0.90 (*) Historic cash dividend Buybacks Historic scrip dividend Scrip dividend + buybacks 0.19 2017 2018 2019 2020 Buyback program in 20
Slide 11: Clear path for cashflow growth to 2020
Clear path for cashflow growth to 2020 Strategic progress At $50/bbl flat Brent 1 ROACE 6% +3 % >9% 1. Adjusting values to $50/bbl and excluding Spain extraordinary tax refund effect. CFFO in 2017 was €5.5 Bn. 2. RISE production impact considered in new production >10% @ $60/bbl 10 3. Refers to sust
Slide 12: Strategic Plan fully funded at $50/bbl
Strategic Plan fully funded at $50/bbl Strategic progress Fully funded at $50/bbl keeping a strong financial position Core portfolio capex in line with historical levels Sources of cash Uses of cash €Bn 20.8 20.8 €Bn GNF 3.8 4.0 Expansion capex1 4 divestment 4.2 Dividend & Buybacks 11 11 1.6 Financi
Slide 13: Capex in core and expand portfolios
Capex in core and expand portfolios Strategic progress 2018 ACTUAL CAPEX IN LINE WITH 18-20 GUIDANCE. 2018-20 CAPEX GUIDANCE: €15Bn (€11Bn ORGANIC AND €4Bn FLEXIBILITY TO FULFILL THE PERIOD COMMITMENT EXPANSION1) 0.9 Viesgo 4 €Bn Mexico €Bn Valdesolar Corporation 0.1 0,9 11 0,9 1.0 Downstream 6.8 3.
Slide 14: Leaner and more efficient operator through lower breakevens
Leaner and more efficient operator through lower breakevens Strategic progress CAPEX & Shareholders’ retribution financed by organic Total Group’s Free Cash Flow breakeven, excluding inorganic capex and CFFO excluding inorganic capex and divestments divestments, was 54 $/bbl in 2018, in line with ou
Slide 15: Upstream update
7 REPSOL Upstream update
Slide 16: Core regions in the portfolio
Core regions in the portfolio Upstream North America Europe, Africa & Brazil Unconventional portfolio, operatorship and High margin barrels, key development valuable midstream positions projects from exploration succes 175 kboe/d 165 kboe/d 73% 19 % 79% 6% / 47% Latin America South East Asia Regiona
Slide 17: Improving Upstream returns with profitable growth
Improving Upstream returns with profitable growth Upstream AROUND 3 % PRODUCTION GROWTH IN 2018 WITH IMPORTANT CONTRIBUTION FROM PROFITABLE SHORT-CYCLE PROJECTS ̴ 3% production growth in 2018 in line with Around 28 kboe/d of new production from short-cycle commitment (2.6% CAGR by 2020) projects in
Slide 18: Progressing on our short-cycle projects
Progressing on our short-cycle projects Upstream Pipeline of Repsol’s short-cycle projects… DUVERNAY YME • Early production • In 2018 the redevelopment MARCELLUS received the approval from • Increase to 2 local authorities. LIBYA development rigs • Fast track development with FO in 2020 • Production
Slide 19: Working on our 2020+ project pipeline
Working on our 2020+ project pipeline Upstream Mid and long-term projects with attractive Repsol's new projects have competitive returns and phased developments full-cycle IRR and NPV breakeven Alaska (US) Duvernay (Canada) • 2 appraisal wells • 10 wells were drilled in 2018. currently • Current foc
Slide 20: Building strong exploration portfolio in core areas
Building strong exploration portfolio in core areas Upstream Mexico, Brazil and Alaska Indonesia Alaska • Strengthening our exploration • Sakakemang discovery, at least • 2 appraisal well campaign of the portfolio 2 TCF of recoverable resources) Pikka area, currently underway, with encouraging early
Slide 21: Downstream update
4 Downstream update
Slide 22: World-class position
World-class position Downstream Refining Chemicals CORUÑA BILBAO • 1 million bbl/d of refining capacity • High performing integrated and regional leader • Highly competitive EU 1Q in Solomon NCM1 TARRAGONA • Capability for more than 30% light benchmark and fully invested for IMO2 feedstock (LPGs) •
Slide 23: Strategy summary
Strategy summary Downstream Refining Chemicals Marketing LPG Lubricants Trading Sustain Grow Grow Sustain Grow Grow • Energy efficiency • Energy efficiency • TwP1 • Customer-centric • Maintain • Maximize value • IMO readiness • Digitalization and • Digitalization and digitalization leadership in fro
Slide 24: Refining: top quartile position among European peers
Refining : top quartile position among European peers Downstream (1) 5 refineries optimized as a single system Top quartile position among European peers CORUÑA BILBAO % FCC Equivalent 100% TARRAGONA 1Q 2Q 3Q 4Q 80% 60% PUERTOLLANO 40% CARTAGENA 20% 0% 0 2 4 6 8 10 12 14 Oil pipeline Repsol Oil pipe
Slide 25: Repsol perfectly positioned to benefit from IMO 2020
Repsol perfectly positioned to benefit from IMO 2020 Downstream TOP EUROPEAN PLAYER1 IN CONVERSION, STRONGEST COKING CAPACITY AND ONE OF THE LOWEST HSFO YIELD 2018 Peers Conversion-to-crude Capacity Ratio vs 2017 HSFO yield Leader in EU coking Of the total EU coking capacity 25% (while only 6% of to
Slide 26: Chemicals: competitive positioning
Chemicals: competitive positioning Downstream Iberian Peninsula petrochemical sites Dynasol Joint Venture Panjin, China Santander, Spain Alava, Spain Tarragona Houston, USA Altamira, Production capacity (Thousand tons) Mexico Madrid, Spain Base petrochemicals 2.603 Nanjing, China Puertollano Ethylen
Slide 27: Petrochemical growth in value niches
Petrochemical growth in value niches Downstream WORLD Chemical Key target products Rationale POSITION strategic goals • Strong global demand growth forecast (4-4.5% p.a.) Global scale in 1-3 PO-polyols • Established Sales & Marketing position #12 higher value products • Proprietary proven production
Slide 28: Downstream activated as growth engine
Downstream activated as growth engine Downstream New growth levers Enhancing strengths New international growth opportunities through digitalization and new businesses leveraging our competitive advantages Advanced Movility Mexico Car sharing Convenience stores 180 new SS1 Europe 2 Lubes sold +500 1
Slide 29: Low Carbon update
5 Low Carbon update
Slide 30: Ambition to develop a new operated business
Ambition to develop a new operated business Low Carbon Repsol is swapping a €5-6B exposure to a medium … To an operated and synergistic position in low carbon businesses through GNF… carbon businesses Gas • Non-operated • Operated business with full synergies Natural • No synergies exploited • Lever
Slide 31: Roadmap to 2025
Roadmap to 2025 Low Carbon Wholesale Gas Retail G&P Low carbon generation Top Leverage our industrial self consumption as the Strong brand and ~10M clients base with Technical capabilities and experience in capability largest gas consumer in Spain direct contact managing large scale projects • Creat
Slide 32: Accelerated delivery of 2025 objectives in Low Carbon
Accelerated delivery of 2025 objectives in Low Carbon Low Carbon Developing a strong position in Spain Viesgo acquisition led the way with 2.9 GW of installed capacity to develop our key capabilities to become the 5th G&P player in Spain 2.5 GW Million Clients Exploring Opportunities 4.5 ~70% achie
Slide 33: Digitalization & Efficiencies
6 Digitalization & Efficiencies
Slide 34: Digitalization and efficiency as levers for cash flow growth
Digitalization and efficiency as levers for cash flow growth Digitalization & efficiencies CFFO impact (€Bn) 0.9 Upstream Downstream (€0.25 Bn sustainable CFFO): better maintenance, reduction (€0.1 Bn sustainable CFFO): of logistics and decomissioning improving integrated margin, costs and initiativ
Slide 35: Digitalization and efficiency initiatives
Digitalization and efficiency initiatives Examples Integrated Operations Center (IOC) Integrated real-time control room identifying trends and anomalies over the medium term, improving safety, production and efficiency Upstream in its operations. Successfully tested in United Kingdom and Canada asse
Slide 36: Financing
a REPSOL FINANCING
Slide 37: Strong liquidity position
Strong liquidity position Financing (Billion €) (Billion €) 12 12 10.2 10 8.7 10 2.4 x Term deposits w/ 7.8 7.8 immed.availab. ** 8 1.5 7.7 Operating committed 0.3 6.9 8 1.5 Credit Lines 5.7 6 2.0 Structural committed Credit Lines 6 2.3 4 3.6 4 Cash & Equivalents 5.0 5.0 2 3.6 2 3.6 2.0 2.4 1.2 0.8
Slide 38: Conclusions & Key targets
7 Conclusions & Key targets
Slide 39: On track to deliver 2020 strategic objectives
On track to deliver 2020 strategic objectives Financing 1 Increasing shareholder returns 3 Developing an operated profitable low carbon business • Dividend increase to 0.95 €/share in • Continue transforming our company and preparing 2019 for the energy transition towards a less carbon • 100% scrip
Slide 40: Key metrics to 2020 @ $50/Bbl Brent flat
Key metrics to 2020 @ $50/Bbl Brent flat Conclusions & key targets Production CFFO EPS DPS 2.6% CAGR +€1.9B growth +€0.6/share growth 8% CAGR CAGR DPS paid kboe/d 2.6% € Billion EPS on year €/share €/share CAGR +8% 750 CAGR +12% CAGR +12% 695 0.8 1.0 6.5 2.0 4.6 1.4 0.2 2017 2020 20171 2020 20171 20
Slide 41: 2019 Guidance
2019 Guidance Conclusions & key targets 2019 2018 Budget* • Increase of development activity in Marcellus and projects Production (kboe/d) 715 ~720 comming on stream during the year (T&T, Buckskin and Akacias) Refining Margin • Acceleration of maintenance in our refineries will not Indicator ($/bbl
Slide 42: Historic data book
7 Historic data book
Slide 43: Environment and Repsol group
Environment and Repsol group Historic data book M AC R O E NVIR O NM E NT International R eferences Unit 201 6 201 7 201 8 S preads vs. B rent ($/bbl) 201 6 201 7 201 8 B rent ($/B bl) 43.7 54.2 71 .3 Maya - B rent [1 1 .6] [9.7] [1 0.6] WTI ($/B bl) 43.5 50.9 64,9 Ural - B rent [1 .2] [0.9] [1 .1 ]
Slide 44: Upstream
Upstream Historic data book Production Proven reserves Kboe/d Mboe 2016 2017 2018 2016 2017 2018 Europe 52 51 60 62 59 102 M ain figures (M €) 201 6 201 7 201 8 Latin America 342 348 342 1,525 1,490 1,419 Adjusted Net Income 52 632 1 ,325 North America 182 174 175 496 504 535 E B IT (87) 1 ,009 2,51
Slide 45: Downstream
Downstream Historic data book Downstream Assets Refining capacity Refining Converson index (%) Businesss Unit 2016 2017 2018 (kbbl/d) Spain 896 63 Refining Bilbao (Petronor) 220 63 Distillation utilization Tarragona 186 44 Spain % 88.0 93.6 92.9 Coruña 120 66 Peru % 68.9 89.8 81.7 Puertollano 150 66
Slide 46: Investor Update
Investor Update March 2019 Repsol Investor Relations investorsrelations@repsol.com 45 45