Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Investor Day (March 2012)
27 slides from Galp Energia, Sgps S.a. Class B's investor day presentation, Mar 6, 2012
Slide 1: Financial outlook
Financial outlook Claudio De Marco Chief Financial Officer Capital Markets Day - March 6th 2012
Slide 2: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 2 | Capital Markets Day - March 6th 2012
Slide 3: Solid foundations built over years of demanding capex
Solid foundations built over years of demanding capex Gearing evolution Downstream transformational 1,800 150% projects responsible for financial effort 1,200 High potential upstream projects being developed 600 Gearing level increased rapidly 2011 net debt to equity of 119% 0 0% 2008 2009 2
Slide 4: A cash in of $5.2 bln
A cash in of $5.2 bln Galp Energia’s Brazilian portfolio Sinopec to hold 30% of Petrogal Brasil1, after the subscription of the capital increase Partnership with one of the largest energy groups worldwide Development of Brazilian projects fully funded 1 Petrogal Brasil and other related subsid
Slide 5: Transaction executed in a challenging market environment
Transaction executed in a challenging market environment Galp Energia’s Brazilian assets Financial environment deteriorated Several interested parties in the Basin # projects % Galp Energia Operator deal, but few committed bidders Potiguar 5 20% Petrobras Santos 6 10-20% Petrobras Implicit val
Slide 6: Flexibility to manage extra-cash at the holding level
Flexibility to manage extra-cash at the holding level Sinopec Brazilian transaction ending a period $4.8 bln of stretched balance sheet 10% to 20% of $4.8 bln to be $0.4 bln Petrogal Brasil1 retained to fund short-term capex Intragroup loan needs reimbursement The remaining to be lent to share
Slide 7: Control and full consolidation maintained
Control and full consolidation maintained Petrogal Brasil’s Board of Directors to be appointed proportionally by Galp Energia and Sinopec Full consolidation of operations by Galp Energia Net profit at the holding level impacted by Sinopec’s 30% share accounted in minority interests Capex to
Slide 8: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 8 | Capital Markets Day - March 6th 2012
Slide 9: Capital allocation reflects the Company's strategic path
Capital allocation reflects the Company’s strategic path Upstream Downstream Reinforcing exploration budget to address Absorbing only maintenance capex new opportunities Developing world class projects Investing towards higher operational safety and energy efficiency 9 | Capital Markets Day
Slide 10: 2012: a year of capital allocation shift towards upstream
2012: a year of capital allocation shift towards upstream Capex by segment 2011 2012 2013 - 2016 €1bln €1 - €1.2bln c.€1.2bln/year E&P R&M G&P 10 | Capital Markets Day - March 6th 2012
Slide 11: Strengthening and diversifying our exploration portfolio
Strengthening and diversifying our exploration portfolio E&P capex 2012 exploration capex Brazil Mozambique 2011 2012 Exploration Development Angola Other and new ventures 11 | Capital Markets Day - March 6th 2012
Slide 12: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 12 | Capital Markets Day - March 6th 2012
Slide 13: Strong cash generation from projects already implemented
Strong cash generation from projects already implemented Upstream Downstream Earnings growth by developing upstream Stable contribution from R&M business projects uplifted by upgrade project Oil price exposure increasing on cash G&P business to maintain solid generation contribution to earni
Slide 14: Strategy path to be materialized in earnings from 2012 onwards
Strategy path to be materialized in earnings from 2012 onwards Ebitda by segment 2011 2012 2016 €0.8 Bln €0.9 – 1.1Bln CAGR1 ≈25% E&P R&M G&P Ebitda growth supported by upstream production ramp up 1 CAGR 2011-2016 14 | Capital Markets Day - March 6th 2012
Slide 15: Exposure to Iberian economic environment will decrease going forward
Exposure to Iberian economic environment will decrease going forward Ebitda 2011 vs 2016 >60% <35% 2011 2016 Iberia Other areas 15 | Capital Markets Day - March 6th 2012
Slide 16: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 16 | Capital Markets Day - March 6th 2012
Slide 17: Free cash flow consistently increasing
Free cash flow consistently increasing Cash flow profile Downstream assets cash flow positive 2012 onwards Brazil self-financed and cash flow positive after 2016 Current portfolio development fully funded 2011 2012E 2013E 2014E 2015E 2016E Downstream EBITDA Upstream EBITDA Capex 17 | Capital M
Slide 18: Sustainable and balanced capital structure going ahead
Sustainable and balanced capital structure going ahead Net debt to equity 119% 37% <30% <10% 2011 2011 2011 Galp Energia 1 2 pro-forma Peer average target One of the most robust capital structures amongst peers Source: Bloomberg 1 Assumes loan to Sinopec 18 | Capital Markets Day - March 6th 2012 2 P
Slide 19: Financial management to ensure a sound and flexible capital structure
Financial management to ensure a sound and flexible capital structure Building up Enabling new Mitigating Rewarding company’s venture execution risk shareholders flexibility opportunities Start of a new growth era with a sound capital structure 19 | Capital Markets Day - March 6th 2012
Slide 20: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 20 | Capital Markets Day - March 6th 2012
Slide 21: Rewarding shareholders through a consistent growing dividend
Rewarding shareholders through a consistent growing dividend €0.32/ share €0.20/ share 2007-2008 2009-2011 2012E 2013E 2014E 2015E 2016E Dividend policy to be driven by an era of progressive earnings growth 21 | Capital Markets Day - March 6th 2012 Dividend relates to net income of the corresponding
Slide 22: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 22 | Capital Markets Day - March 6th 2012
Slide 23: The start of a new growth era with a solid balance sheet
Commitment to maintain a sound financial position is a key strategic foundation The start of a new growth era with a solid balance sheet Execution risk mitigated and enhanced flexibility in project development Cash flow from world class projects coming on-stream Well balanced cash flow mix
Slide 24: Financial slack successfully achieved
Financial slack successfully achieved Capital allocation towards upstream Project delivery enhancing cash generation Committed to a sound capital structure New sustainable dividend policy Final remarks Appendix 24 | Capital Markets Day - March 6th 2012
Slide 25: 2012-2016 Business plan assumptions
2012-2016 Business plan assumptions Mid-cycle assumptions 2010 2011 Average 2012-2016 Oil price $/bbl 79.5 111 95 Benchmark refining margin $/bbl1 2.66 1.33 2.41 EUR:USD 1.33 1.39 1.40 1 New post-upgrade benchmark refining margin = 42.5% cracking margin + 45.0% hydrocracking margin + 5.5% aromatics
Slide 26: Acronyms
Acronyms # Number GWh Gi ga Wa tt hour $ Uni ted States dol l a r HSE Hea l th, Sa fety a nd Envi ronment % Percentage IPO Ini tia l Publ i c Offeri ng 2D Two di mens i ona l s ei s mi c Kboepd Thous a nd ba rrel s of oi l equi va l ent per da y 3D Three di mens i ona l s ei s mi c Kbpd Thous a nd b
Slide 27: Disclaimer
Disclaimer Financial outlook figures are RCA figures except otherwise noted. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,”