BP plc · LSE:BP.
BP — Q4 2019 Earnings Presentation
27 slides from BP's earnings presentation, Feb 4, 2020
Slide 1: BP 4Q and full year 2019 Results presentation
BP 4Q and full year 2019 Results presentation 4 February 2020 keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 1
Slide 2: Craig Marshall, Head of Investor Relations
Craig Marshall Head of Investor Relations BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 2
Slide 3: Cautionary statement
Cautionary statement Forward-looking statements - cautionary statement In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, BP is providing the following cautionary stat
Slide 4: Helge Lund, Chairman
Helge Lund Chairman BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 4
Slide 5: Bob Dudley, Group Chief Executive
Bob Dudley Group Chief Executive BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 5
Slide 6: Safety and operational risk
Safety and operational risk Safety Trust Value A core value Meet our obligations Value over volume Actively managed portfolio ~70% reduction in Share our learnings process safety events1 with partners, industry and Partnerships and relationships governments Strong growth opportunities <0.2 RIF2 - lo
Slide 7: Rebuilding trust in BP
Rebuilding trust in BP Safety Trust Value A core value Meet our obligations Value over volume Actively managed portfolio ~70% reduction in Share our learnings process safety events1 with partners, industry and Partnerships and relationships governments Strong growth opportunities <0.2 RIF2 - lowest
Slide 8: Delivering value growth for our shareholders
Delivering value growth for our shareholders Safety Trust Value A core value Meet our obligations Value over volume Actively managed portfolio ~70% reduction in Share our learnings process safety events1 with partners, industry and Partnerships and relationships governments Strong growth opportuniti
Slide 9: The BP proposition
The BP proposition Safe, reliable and Safer efficient execution Growing sustainable free Fit for the A distinctive portfolio fit cash flow and distributions future for a changing world to shareholders over the long-term Focused on Value based, disciplined returns investment and cost focus keep advan
Slide 10: Brian Gilvary, Chief Financial Officer
Brian Gilvary Chief Financial Officer BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 10
Slide 11: 2019 highlights
2019 highlights Full year Operational and Advancing the financial results strategic delivery energy transition $10.0bn underlying 5 major project start ups Formed BP Bunge Bioenergia – replacement cost profit a world-class bioenergy 5 Final Investment Decisions company $28.2bn underlying operating I
Slide 12: Macro slide
Macro slide Brent oil price1 Refining Marker Margin2 $/bbl $/bbl 80 24 75 20 70 16 65 12 60 8 55 4 50 45 0 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 (1) Source: Platts, data updated to 31 January 2020 (2) Refining Marker Margin (RMM) based on BP’s portfolio updated to 31
Slide 13: 4Q 2019 results summary
4Q 2019 results summary $bn 4Q18 4 3Q19 4Q19 4 Underlying replacement cost profit 3.5 2.3 2.6 4Q 2019 vs 3Q 2019 Underlying operating cash flow1 7.1 6.5 7.6 ▪ Higher production Underlying RCPBIT2 ▪ Strong commercial performance in refining Upstream 3.9 2.1 2.7 ▪ Lower Rosneft contribution Downstream
Slide 14: Sources and uses of cash
Sources and uses of cash 2018 organic cash inflows/outflows1 $bn 2019 organic cash inflows/outflows $bn 30 30 Share buybacks 24 Share buybacks 24 Dividends3 18 Dividends3 18 Underlying Lease payments4 Underlying cash flow2 cash flow2 12 12 Organic capex Organic capex 6 6 0 0 18 Other inflows/outflow
Slide 15: 2020 guidance
2020 guidance 2019 actual 2020 guidance 1Q2020 Upstream production Lower than 2.6mmboed Upstream excluding Rosneft 20191 Lower end of ▪ Lower reported production due to the impact Organic capital expenditure $15.2bn $15-17bn range of our ongoing divestment programme and planned seasonal maintenance
Slide 16: Deliver the Upstream plan
Deliver the Upstream plan BP net production from major projects Pre-tax free cash flow proxy2 $bn operating construction Impact of prices 900 mboed $14-15bn 0 2015 2016 2017 2018 2019 2020 2021 900mboed 35% 20% by 2021 greater cash margins lower development than 2015 base1 cost than 2015 base FIDs 2
Slide 17: Deliver the Downstream plan
Deliver the Downstream plan Pre-tax earnings1 Pre-tax free cash flow proxy3 10 $bn 10 $bn >1 0.5 ~1 2.3 1.3 in 2019 9-10 5 5 6.4 6.5 5.6 0 0 2 4 2016 Environment Underlying 2019 2019 Environment Refining Earnings 2021 growth adjustment turnarounds growth (1) Underlying RCPBIT (2) Includes refining m
Slide 18: Medium term financial frame
Medium term financial frame Organic free cash flow per share2 2020-2021 Actual price $55/bbl1 Cost and capital $15-17bn p.a. discipline organic capital expenditure Divestments ~$15bn by mid-2021 Gearing 20-30% Current full DPS3 >10% ROACE Returns by 2021 at $55/bbl1 Distributions Progressive distrib
Slide 19: Bernard Looney, Upstream Chief Executive & CEO Designate
Bernard Looney Upstream Chief Executive & CEO Designate BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 19
Slide 20: Q&A
Q&A Bob Dudley Brian Gilvary Craig Marshall Group Chief Executive Chief Financial Officer Head of Investor Relations keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 20
Slide 21: Appendix
Appendix BP 4Q and full year 2019 Results presentation keep advancing BP 4Q & FULL YEAR 2019 RESULTS PRESENTATION 21
Slide 22: 4Q 2019 summary
4Q 2019 summary $bn 4Q18 6 3Q19 4Q19 % Y-o-Y6 % Q-o-Q Upstream 3.9 2.1 2.7 Downstream 2.2 1.9 1.4 Other businesses and corporate (0.3) (0.3) (0.3) 1 Underlying business RCPBIT 5.7 3.7 3.9 (32%) 4% 2 Rosneft 0.4 0.8 0.4 Consolidation adjustment – unrealised profit in inventory 0.1 0.0 0.0 1 Underlyin
Slide 23: Upstream
Upstream Volume mboed Underlying RCPBIT3 $bn 4000 Group production1 5.0 Non-US US Total 3.9 3500 4.0 3.4 2.9 3000 Upstream production 2.7 3.0 excluding Rosneft 2.1 2500 2.0 2000 1.0 1500 0.0 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Realisations2 4Q18 3Q19 4Q19 4Q 2019 vs 3Q 2019 Liquids ($/
Slide 24: Downstream
Downstream Underlying RCPBIT2 $bn 96% Refining availability1 Refining environment 4Q18 3Q19 4Q19 Fuels Lubricants Petrochemicals Total RMM ($/bbl) 11.0 14.7 12.4 2.5 3Q19: 96% 2.2 2.0 1.9 1.7 4Q 2019 vs 3Q 2019 1.4 1.5 1.4 ▪ Lower industry refining margins ▪ A lower supply and trading contribution 1
Slide 25: Rosneft
Rosneft BP share of underlying net income1 $bn BP share of Rosneft dividend2 $bn Dividend paid 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.2 0.4 0.0 2017 2018 2019 0.2 0.0 1.1mmboed 4Q18 1Q19 2Q19 3Q19 4Q19 BP share of Rosneft production3 (1) On a replacement cost basis and adjusted for non-operating items; 4Q19
Slide 26: IFRS 16 – 4Q19 impact
IFRS 16 – 4Q19 impact Balance sheet1 Income statement Cash flow Key metrics Right-of-use assets Operating lease expenses Operating cash flow Gearing $9.0bn ~$0.6bn ~$0.5bn 31.1% Lease liabilities DD&A Capital expenditure Unit production costs $9.7bn $0.5bn ~$0.1bn $0.28/boe Interest charge Lease pay
Slide 27: Deliver the plan
Deliver the plan BP net production from major projects 24 delivered, 11 to go 900 operating construction 2016 2017 2018 mboed ▪ In Salah Southern Fields ▪ West Nile Delta ▪ Atoll Phase 1 – Taurus/Libra ▪ Thunder Horse Water ▪ Taas Expansion Injection ▪ Trinidad Onshore ▪ Shah Deniz 2 Compression ▪ P