Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Non-Deal Roadshow (May 2017)
65 slides from Omv Petrom Sa's roadshow presentation, May 2017
Slide 1: Capital Markets Story
Cover option 1: Insert a cover picture and align grouped text Capital Markets freely on Sustainable access to energy page, (28pt) Story for2013 Place, xx. Month everyday (16pt) modern life May 2017
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This page is left blank intentionally 2 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 3: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, This presentation may contain forward-looking statements. These statements and should not be construed as, constituting or forming part of, any actual reflect the Company’s current knowledge and its expe
Slide 4: Contents
Contents At a glance Strategy Update 2021+ Q1/17 results review Outlook 2017 Appendix All figures throughout this presentation refer to OMV Petrom Group (herein after also referred to as “the Group”), unless otherwise stated. The financials represent OMV Petrom Group’s consolidated results prepared
Slide 5: At a glance
Chapter divider slide: Design must be alike to chosen cover style At a glance (28pt) At a glance
Slide 6: We are the leading industrial company in Romania
We are the leading industrial company in Romania One of the largest private #1 energy supplier employers Accounts for ~40% of oil, gas and fuel supply, and can cover up to c.15,000 direct employees and 10% of power generation in more than 45,000 indirect jobs1 Romania Substantial investor Largest co
Slide 7: Operating in the integrated oil and gas sector
Operating in the integrated oil and gas sector Upstream Downstream Oil Petrobrazi refinery, 4.5 mn t/yr capacity Romania 783 filling stations, operated via 2 brands: 3.66 mn toe/yr crude oil and NGL Petrom (479, Romania, Moldova) and OMV (304, Romania, Bulgaria, Serbia) 5.25 bcm/yr gas 2.6 mn t reta
Slide 8: Focused on safeguarding our employees and the environment
Focused on safeguarding our employees and the environment Improved LTIR1 in 2016 vs. 2012 Significant reduction of GHG3 and Water Intensity Offshore operations: more than 2 years GHG and Water Intensity Indices reduced by without LTI2 ~6% in 20164 vs. 2015 Downstream Oil LTIR: 0.09 Downstream Oil ac
Slide 9: Proving resilience in a challenging market
Proving resilience in a challenging market Clean CCS EBIT 2014 - 2016 Oil and Gas Price evolution (2012 - 2016) 160 50 (RON mn) 40 -52% 120 5.202 30 80 654 20 40 10 0 0 -33% Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 2.522 Brent (USD/bbl) - left axis CEGH (EUR/MWh) - right
Slide 10: Strong execution of efficiency plans
Strong execution of efficiency plans Upstream CAPEX Operating cost savings FCF1 OPEX in USD/boe RON bn RON mn RON bn +1.2 -10% -34% 13.16 3.9 -500 1.6 11.85 2.6 0.3 2015 2016 2015 2016 2015 2016 2015 2016 Corporate Downstream Oil Downstream Gas Upstream 1 FCF before repayment of loans and dividend p
Slide 11: 2016 Strong financial resilience
2016 Strong financial resilience + + Profitability impacted by Strengthened balance sheet Restoration of dividend ongoing market backdrop distributions RON 1.7 bn Clean CCS EBIT, Switched from RON 1.3 bn net 2016 dividend: RON 0.015/share -33% yoy debt at end 2015 to RON 0.2 bn Dividend yield1: 4.7%
Slide 12: Turning efficiency savings into cash flow…
Turning efficiency savings into cash flow… Operating cash flow (RON bn) Lowered OPEX (USD/bbl) 17.3 8.0 7.2 6.8 15.4 15.5 5.3 4.5 13.2 11.8 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Operating cash flows / Capex (%) Gearing ratio (%) 173 7 152 5 146 136 3 1 109 2012 2013 2014 2015 2016 2012 2
Slide 13: …and cash flow into returns to shareholders
…and cash flow into returns to shareholders Dividend Policy Petrom is committed to deliver a competitive shareholder return through the business cycle, including paying an attractive dividend, subject always to maintaining a strong balance sheet that will enable the Company to finance its investment
Slide 14: Shareholder structure and capital market environment
Shareholder structure and capital market environment OMV Petrom S.A. shareholder structure1 (%) 12.57% OMV2: Austria’s leading integrated international oil and gas company Fondul Proprietatea: listed fund with ~81% of AUM invested3 in the energy sector Romanian State, no special rights attached 51.0
Slide 15: Strategy Update 2021+
Chapter divider slide: Design must be alike to chosen cover style At a glance (28pt) Strategy Update 2021+
Slide 16: Leading integrated regional player
Our vision Committed to enhance customer experience Leading integrated regional player Regional growth leveraging Romanian expertise Sustainable access to energy for everyday modern life 16 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 17: Proven history of integration delivering value
Proven history of integration delivering value Changes in performance contribution reflect market dynamics Clean CCS EBIT evolution 2012-2014 Average 2015-2016 Average 6% Synergies and earnings resilience delivered in depressed oil price 40% environment 60% Downstream Oil clean CCS EBIT in 2016 up ~
Slide 18: Strong track record of capital management
Strong track record of capital management Performance 2012 - 2016 UPSTREAM DOWNSTREAM Improved operational OPEX reduced Refinery utilization rate increased from USD 15/boe to USD 12/boe from 73% to 89% efficiency Limited production decline to ~4.7%1 Indicative refinery margins improved FCF3 average
Slide 19: 2021+ Centered around three key pillars
2021+ Centered around three key pillars Enhancing Developing Regional competitiveness in growth options expansion the existing portfolio Commitment to deliver attractive shareholder returns 19 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 20: Exploiting potential in existing upstream field portfolio
Exploiting potential in existing upstream field portfolio Maximize economic recovery Oil and Gas recovery rates Mature contingent resources through: 28% 55% infill drilling campaigns 50% 25% selected field redevelopment programs Adding ~150 mn boe1 reserves from existing fields Current 2016 Ultimate
Slide 21: Relentless pursuit of operating efficiencies
Relentless pursuit of operating efficiencies Focus on the most profitable barrels Commitment to operational excellence Upstream Further reduction of unit costs Modernization and simplification of installations and facilities Capturing of highest integrated operational value Maximization of availabil
Slide 22: Downstream: Clear operational targets set
Clear operational targets set Increase MTBF1 (days) Refinery - maintain high utilization and reduce fuels & losses 750 Utilization Fuels & Losses 100% 9.4% 555 8.8% 90% 8.2% 80% 7.6% Downstream Upstream 70% 7.0% 2016 2017 2018 2019 2020 2021 2016 2021 Utilization Fuels & Losses Modernize facilities
Slide 23: Technology enabling efficiency progression
Technology enabling efficiency progression Digital Oil Field – well automation and online condition monitoring Upstream Drones used for aerial photogrammetry, imaging or videos Automated processes and optimized predictive maintenance Predictive Analytics – electronic coordination and management of t
Slide 24: Mature Neptun Deep opportunity
Mature Neptun Deep opportunity OMV Petrom (50%), ExxonMobil (50%, Operator) First exploration drilling campaign in 2011 – 2012 Domino-1 well gas discovery: a play opener Two seismic acquisition campaigns: 2009; 2012 – 2013 Second exploration drilling campaign 2014 - 2016 Seven wells drilled; most of
Slide 25: Rejuvenated exploration portfolio in Romania
Rejuvenated exploration portfolio in Romania Estimated production contribution1 Continue to unlock deep onshore opportunities in ~10 kboe/day existing licenses Participate in new licensing rounds 2021 Contribution to RRR2 target depending on timing and Existing commitments Targeted exploration optio
Slide 26: Strong near-field and exploration opportunities in existing portfolio
Strong near-field and exploration opportunities in existing portfolio onshore and shallow offshore Readiness to drill 2017 2018 2019 2021+ Legend1 Lead Prospect NFO Target depth <3000m Lead Prospect NFO Target depth >3000m Mamu N D Batran ToteaS 4200m 4800m E Videle Sierra Usurei 2200m 4400m 1600m 8
Slide 27: Capture downstream opportunities
Capture downstream opportunities Increase integrated value Conclude modernization of fuel Explore value-adding through refining and retail storage network opportunities for gas investments Finalise last depot modernization in Polyfuel project to upgrade production 2018 Explore technological mix (ope
Slide 28: Downstream: Enhance offer and customer experience
Enhance offer and customer experience Increase throughput per filling station in Romania (mn l) >5 Downstream 4.6 Value for money High quality leader Oil 2016 2021 Innovation and partnerships to strengthen Petrom and OMV brand positioning Downstream Gas Develop partnerships Expanding domestic Produc
Slide 29: Regional expansion to complement portfolio
Regional expansion to complement portfolio Leverage our local know-how Upstream Downstream Gas Transport capacities planned existing Capture synergies with existing operations Diversify sales channels for current production (subject to interconnectors ~80 mn boe reserves targeted from near-term deve
Slide 30: Portfolio investments
Portfolio investments EUR ~5 bn cumulative Capex anticipated over 2017 - 2021 Cumulative Capex allocation Upstream portfolio 100% Maximize value of current mature field portfolio Secure improved recovery from contingent 80% resources Deliver further growth in Romania 60% Drive regional expansion 40%
Slide 31: Success built on three core strategic enablers
Success built on three core strategic enablers People and Organizational Culture We are the energy Sustainability Respect the future Technology and Innovation Innovate for the future 31 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 32: Generate positive outcomes for shareholders
Generate positive outcomes for shareholders + + Enhanced Strong Attractive profitability balance sheet shareholder returns 32 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 33: 2021 Clear, robust targets
2021 Clear, robust targets RRR1 Clean CCS ROACE3 100% by 2021 > 10% by 2021 CAPEX Gearing EUR ~1 bn p.a. Maintain a strong balance sheet FCF2 after dividends Dividend Positive for majority of period Attractive returns 1 Reserves Replacement Rate; 2 Free Cash Flow; 3 Clean Current Cost of Supply Retu
Slide 34: Dividend considerations
Dividend considerations Commitment to deliver a competitive shareholder return by paying an attractive dividend Considerations 2016 DPS2: RON 0.015 EUR mn 347 Earnings Stress tested forecasts under various pricing points and FX assumptions Oil & Gas prices 189 Upcoming CAPEX CAPEX FCF1 generation, c
Slide 35: Our path to long-term success
Our path to long-term success Deliver Defined Execution Solid Foundation Vision Clear Strategy Sustainable Value Plan Creation Sustainability of reserves base Integrated business Operational Provider of model delivers Enhance efficiency sustainable access value through the competitiveness of Value c
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Slide 37: Q1/17 Results review
Chapter divider slide: Design must be alike to chosen cover style At a glance (28pt) Q1/17 Results review
Slide 38: Key messages Q1/17
Key messages Q1/17 Continued to deliver a strong Upstream: production 170 free cash flow of RON 646 mn kboe/d; OPEX 10.5 USD/boe Clean CCS Operating Result at RON 767 mn; more than half contribution from Upstream Downstream Oil: retail sales +4% yoy; refinery utilization rate at 95% Clean CCS EPS up
Slide 39: Economic environment
Economic environment Romanian macroeconomic environment Oil price (USD/bbl) and FX (USD/RON) 2016 GDP growth1: 4.8% yoy 4.25 Q1/17 average monthly CPI: -0.1% yoy 4.08 52 Budget balance: +0.2% of GDP end March 2017 FDI: EUR 655 mn in Jan-Feb, -1% yoy Investment grade rating: Moody’s revised 32 prospe
Slide 40: CAPEX and E&A – guidance maintained
CAPEX and E&A – guidance maintained Group CAPEX incl. capitalized E&A CAPEX incl. capitalized E&A (RON bn) Q1/17 at RON 0.35 bn: 3.6 Lower drilling activity Permitting delays 0.4 2017E maintained Q1/17 2017E Focusing on drilling, workovers and FRDs Around 70 wells planned to be drilled, of which Ups
Slide 41: Upstream KPIs – improved OPEX/boe
Upstream KPIs – improved OPEX/boe OPEX1 Key drivers Q1/17 vs. Q1/16 (USD/boe) -13% 12.1 12.0 11.6 Improved OPEX, in USD/boe terms, -13%: 11.1 10.5 elimination of tax on special constructions MTBF 595 days; lower personnel, services and materials costs favorable FX evolution Q1/16 Q2/16 Q3/16 Q4/16 Q
Slide 42: Downstream Oil KPIs – retail sales volumes up
Downstream Oil KPIs – retail sales volumes up OMV Petrom Indicator refining margin Key drivers Q1/17 vs. Q1/16 (USD/bbl) Refining utilization rate at 95% 8.06 7.58 6.82 7.14 Growth in retail sales of +4% yoy 5.96 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Strong refining margin, though slightly lower Retail sale
Slide 43: Downstream Gas KPIs – higher gas & power volumes
Downstream Gas KPIs – higher gas & power volumes Gas sales volumes Key drivers Q1/17 vs. Q1/16 (TWh) +11% 15.5 Higher gas sales volumes due to colder 14.0 14.2 weather and increased offtake by the Brazi 10.7 11.4 power plant Higher net electrical output on the back of stronger forward position Q1/16
Slide 44: Strong FCF generation in Q1/17
Strong FCF generation in Q1/17 Q1/17 vs. Q1/16 RON mn Q1/16 Q4/16 Q1/17 Q1/17 operating cash flow up 42% due to: ► higher revenues and operating profits on improved Cash flow from operating activities (CFO) 888 1,070 1,262 oil prices, higher gas and power volumes Thereof, Depreciation, amortization
Slide 45: Results summary – Net income more than double
Results summary – Net income more than double Income Statement Q1/17 vs. Q1/16 RON mn Q1/16 Q4/16 Q1/17 Improved Clean CCS Operating Result by 86% Sales 3,649 4,694 4,653 Elimination of construction tax: favorable effect of RON 63 mn Clean CCS Operating Result 412 453 767 Thereof Upstream (73) 246 4
Slide 46: Higher realized prices in Upstream
Higher realized prices in Upstream Upstream Clean Operating Result Key drivers Q1/17 vs. Q1/16 (RON mn) Realized oil price +69% 119 Decreased production costs and depreciation -100 6 460 507 Daily production -3%; quantity effect offset by OPEX reduction -73 Q1/16 Realization Volume Exploration Other
Slide 47: Increased Downstream Clean CCS Operating Result
Increased Downstream Clean CCS Operating Result Downstream Clean CCS Operating Result Key drivers Q1/17 vs. Q1/16 (RON mn) Improved Oil result on the basis of Retail and tight cost control 302 311 25 -16 Higher segment sales in Downstream Gas 255 280 Refining margins -6%, impacted by higher cost of
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Slide 49: Outlook
Chapter divider slide: Design must be alike to chosen cover style At a glance (28pt) Outlook 2017
Slide 50: Business Outlook 2017
Business Outlook 2017Diagram Slide for PowerPoint Assumptions Targets Brent at USD 55/bbl Production decline up to 3% yoy Refining margins downward trend for the rest CAPEX budget increased to EUR 0.8 bn of the year (~85% in Upstream) Fuel demand on an upward trend Positive FCF after dividends Gas d
Slide 51: Sensitivities in 2017
Sensitivities in 2017 OMV Petrom Group main sensitivities Operating Result impact Brent oil price USD +1/bbl EUR +20 mn OMV Petrom indicator refining margin USD +1/bbl EUR +25 mn Exchange rates (EUR/USD) USD appreciation by 5 USD cents EUR +46 mn 51 | OMV Petrom │ Capital Markets Story │ May 2017
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Slide 53: Appendix
Chapter divider slide: Design must be alike to chosen cover style At a glance (28pt) Appendix
Slide 54: Romanian oil market overview in 2016
Romanian oil market overview in 2016 Supply IMPORTS: various 67% 33% PRODUCTION TRANSPORTATION: Conpet Refineries (combined nameplate capacity ~12 mn tpa) processed crude oil ~11.11 70% 30% mn tpa (of which ~7.5 mn t from import) Refineries Petroleum Products Imports Petrobrazi Rompetrol (Petromidia
Slide 55: Downstream Oil market environment in 2016
Downstream Oil market environment in 2016 Our operating region1 Romania Declining refining margins throughout Increased oil product demand vs. 2015 2016 Strong market competition Higher oil product demand vs. 2015 Long on both diesel and gasoline Persistent overcapacity Higher crude oil imports Comp
Slide 56: OMV Petrom Group fuel retail sales in 2016
OMV Petrom Group fuel retail sales (mn l) in 2016 188 163 159 140 105 78 2012 13 14 15 2016 2,405 2,405 2,308 2,444 2,573 Republic of Romania Moldova Serbia 2012 13 14 15 2016 219 153 401 195 184 181 172 Bulgaria Black Sea 331 350 337 348 342 90 2012 13 14 15 2016 61 2012 13 14 15 2016 56 | OMV Petr
Slide 57: Romanian gas market overview in 2016
Romanian gas market overview in 2016 Regula- Regulatory Body tory Romanian Energy Regulatory Authority (ANRE) IMPORTS: various 13% 87% PRODUCTION: , Romgaz, … STORAGE: Supply TRANSPORTATION: Transgaz Romgaz, Depomures, Amgaz SUPPLY: , Romgaz, Engie Romania, E.ON Energie Romania, ... Distribu- tion D
Slide 58: Romanian gas market liberalization
Romanian gas market liberalization Gas prices in Romania (EUR/MWh1) Prices for non-households liberalized since January 40 2015 31 Producer price for households liberalized since April 29 28 2017; end-price for households still regulated 27 27 27 26 26 24 25 Gas producers and suppliers must sell/buy
Slide 59: Romanian power market overview in 2016
Romanian power market overview in 2016 Regulatory Regulatory Body Romanian Energy Regulatory Authority (ANRE) Thermal Nuclear Hydro Renewables 96% 4% Supply Production Imports 37% 17% 28% 14% Transport & Distribution System Operator (TSO&DSO) Market(s) Mid/long term fwd market(s) Ancillary services
Slide 60: Romanian gas and power markets overview in 2016
Romanian gas and power markets overview in 2016 Gas demand1 (TWh) Power production and demand (TWh) 128 122 125 61 62 61 10 3 16 8 10 9 Renewables 22 22 21 Thermal 1 3 CCPP Brazi 118 119 109 3 Hydro 19 17 18 Import gas Nuclear Domestic gas 11 11 10 Power demand 2014 2015 2016 2014 2015 2016 Gas mark
Slide 61: Key financial indicators (consolidated)
Key financial indicators (consolidated) in RON mn 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sales 20,127 16,090 18,616 22,614 26,258 24,185 21,541 18,145 16,247 1 EBIT 1,205 1,620 2,986 4,936 5,662 5,958 3,338 -530 1,469 EBITD 3,875 4,109 5,797 7,766 8,514 9,313 8,145 6,231 4,933 Net income (loss
Slide 62: Key financial indicators (consolidated) – restated
Key financial indicators (consolidated) – restated1 in RON mn 2016 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Sales 16,647 3,649 3,733 4,571 4,694 4,653 2 Operating Result 1,476 346 220 575 335 798 Operating result before depreciation 4,940 1,176 1,137 1,425 1,202 1,590 Net income (loss) 1,038 288 117 473 160 61
Slide 63: Key operational indicators – Upstream
Key operational indicators – Upstream Hydrocarbon production (kboe/d) OPEX (USD/boe) 183 183 180 179 174 17.3 15.4 15.5 89 88 85 83 13.2 80 11.9 94 95 96 95 95 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Oil and NGL Gas 63 | OMV Petrom │ Capital Markets Story │ May 2017
Slide 64: Key operational indicators – Downstream
Key operational indicators – Downstream Refinery utilization rate (%) Refined product sales volumes (mn t) 90% 89% 88% 89% 5.00 5.22 5.03 4.81 4.93 73% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Gas sales volumes (TWh) Net electrical output (TWh) 52.2 52.7 51.4 50.4 47.7 2.93 2.86 2.65 1.68 1
Slide 65: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations Tel: +40 372 161 930 E-mail: investor.relations.petrom@petrom.com Homepage: www.omvpetrom.com 2017 Financial Calendar August 10: Q2 and HY 2017 results November 9: Q3 2017 results 65 | OMV Petrom │ Capital Markets Story │ May 2017