Slide 1: OMV Q2/16 conference call
OMV Q2/16 conference call August 10, 2016 Rainer Seele Chairman of the Executive Board and CEO Reinhard Florey Chief Financial Officer The spoken word applies 1/44 | OMV
Slide 2: OMV Q2/16 conference call, August 10, 2016 2/44 | OMV
OMV Q2/16 conference call, August 10, 2016 2/44 | OMV
Slide 3: Key messages
OMV Q2/16 conference call, August 10, 2016 Rainer Seele Ladies and gentlemen, good morning and thank you for joining us. I am happy to review OMV’s Q2 financial performance together with our CFO Reinhard Florey, who joined the team at the beginning of July. Let me start with the key messages. Slide
Slide 4: OMV Q2/16 conference call, August 10, 2016 4/44 | OMV
OMV Q2/16 conference call, August 10, 2016 4/44 | OMV
Slide 5: HSSE – Safety is our top priority
OMV Q2/16 conference call, August 10, 2016 Slide 4: HSSE – Safety is our top priority Health, Safety and Security is a top priority for OMV and critical to the responsible delivery of energy. This is why we apply stringent corporate regulations, hazard identification and foster a culture of care to
Slide 6: OMV Q2/16 conference call, August 10, 2016 6/44 | OMV
OMV Q2/16 conference call, August 10, 2016 6/44 | OMV
Slide 7: Development of economic environment
OMV Q2/16 conference call, August 10, 2016 Slide 5: Development of economic environment Now, I would like to briefly talk about OMV’s market environment. Let’s start with the oil market: Average oil prices recovered from 34 US Dollar per barrel in Q1/2016 to 46 US Dollar per barrel in Q2/2016. Specu
Slide 8: OMV Q2/16 conference call, August 10, 2016 8/44 | OMV
OMV Q2/16 conference call, August 10, 2016 8/44 | OMV
Slide 9: Financial performance Q2/16
OMV Q2/16 conference call, August 10, 2016 Slide 6: Financial performance Q2/16 I will now highlight the key figures of the second quarter and Reinhard will comment on them in greater detail later. Clean CCS EBIT declined from 375 million Euro to 214 million Euro due to lower Upstream and Downstream
Slide 10: OMV Q2/16 conference call, August 10, 2016 10/44 | OMV
OMV Q2/16 conference call, August 10, 2016 10/44 | OMV
Slide 11: Financial performance 6m/16
OMV Q2/16 conference call, August 10, 2016 Slide 7: Financial performance 6m/16 Moving on to our financial performance in the first half of 2016, OMV realized solid operating results despite the 31 percent decrease in the oil price. OMV reported a clean CCS EBIT of 381 million Euro, 46 percent lower
Slide 12: Portfolio developments
OMV Q2/16 conference call, August 10, 2016 Slide 8: Portfolio developments As we announced on August 9, 2016, we will be selling 30 percent of our share in the Rosebank project to Suncor Energy, headquartered in Canada. As you know, Rosebank was part of the Statoil deal in August 2013. At that time,
Slide 13: Portfolio developments (continued)
OMV Q2/16 conference call, August 10, 2016 [Continued] Slide 8: Portfolio developments In the second quarter of 2016, we continued our negotiations with Gazprom on the asset swap. As you know, OMV has been offered a stake of 24.98 percent in the Achimov IV/V project. In turn, Gazprom would receive a
Slide 14: OMV Q2/16 conference call, August 10, 2016 14/44 | OMV
OMV Q2/16 conference call, August 10, 2016 14/44 | OMV
Slide 15: 2016 CAPEX guidance reduced to EUR 2.2 bn
OMV Q2/16 conference call, August 10, 2016 Slide 9: 2016 CAPEX guidance reduced to EUR 2.2 bn OMV’s objective is to focus on profitable barrels and a sustainable reduction on unit CAPEX cost. Therefore, OMV has a rigorous CAPEX discipline. At the beginning of 2016, we estimated CAPEX to come in at 2
Slide 16: OMV Q2/16 conference call, August 10, 2016 16/44 | OMV
OMV Q2/16 conference call, August 10, 2016 16/44 | OMV
Slide 17: 26% reduction of E&A expenditure in 2016
OMV Q2/16 conference call, August 10, 2016 Slide 10: 26% reduction of E&A expenditure in 2016 In 2016, we will reduce exploration and appraisal by 26 percent to 450 million Euro. In the first half, we spent 164 million Euro mainly related to the Wisting well in Norway and exploration and appraisal a
Slide 18: OMV Q2/16 conference call, August 10, 2016 18/44 | OMV
OMV Q2/16 conference call, August 10, 2016 18/44 | OMV
Slide 19: Ahead of schedule to reduce the cost base
OMV Q2/16 conference call, August 10, 2016 Slide11: Ahead of schedule to reduce the cost base OMV is making good progress implementing the cost reduction and efficiency program. At our Strategy Day in February we told you that OMV plans to achieve a cost reduction of 100 million Euro by 2017. The pr
Slide 20: OMV Q2/16 conference call, August 10, 2016 20/44 | OMV
OMV Q2/16 conference call, August 10, 2016 20/44 | OMV
Slide 21: Reinhard Florey: income statement summary
OMV Q2/16 conference call, August 10, 2016 Reinhard Florey Slide12: Intro chart Good morning ladies and gentlemen also from my side. I am very pleased to be speaking to you today and I am looking forward to meeting many of you during my upcoming roadshows. Slide 13: Income statement summary Here you
Slide 22: OMV Q2/16 conference call, August 10, 2016 22/44 | OMV
OMV Q2/16 conference call, August 10, 2016 22/44 | OMV
Slide 23: Cash flow
OMV Q2/16 conference call, August 10, 2016 Slide 14: Cash flow Let me now turn to our cash flow which was very strong in Q2 2016. At 1,036 million Euro the cash flow from operating activities was significantly stronger than both prior quarter and previous year. Cash inflow from net working capital a
Slide 24: OMV Q2/16 conference call, August 10, 2016 24/44 | OMV
OMV Q2/16 conference call, August 10, 2016 24/44 | OMV
Slide 25: Market environment puts pressure on Q2/16 results
OMV Q2/16 conference call, August 10, 2016 Slide15: Market environment puts pressure on Q2/16 results But of course the current market environment puts pressure on Q2/2016 results. Clean CCS EBIT declined from 375 million Euro to 214 million Euro. Despite the 26 percent lower oil price, Upstream cle
Slide 26: OMV Q2/16 conference call, August 10, 2016 26/44 | OMV
OMV Q2/16 conference call, August 10, 2016 26/44 | OMV
Slide 27: Upstream Q2/16 vs. Q2/15: Lower costs partly offset difficult pricing environment
OMV Q2/16 conference call, August 10, 2016 Slide16: Upstream Q2/16 vs. Q2/15: Lower costs partly offset difficult pricing environment Here you see the Upstream clean EBIT development in Q2 versus previous year. Clean EBIT declined from 116 million Euro to zero as a result of significantly lower oil
Slide 28: OMV Q2/16 conference call, August 10, 2016 28/44 | OMV
OMV Q2/16 conference call, August 10, 2016 28/44 | OMV
Slide 29: Upstream – Key performance indicators
OMV Q2/16 conference call, August 10, 2016 Slide17: Upstream – Key performance indicators Here you see the quarterly development of two of our key performance indicators: Hydrocarbon production and operating expenditures on a unit level. Production increased by 3 percent versus last year with a roug
Slide 30: OMV Q2/16 conference call, August 10, 2016 30/44 | OMV
OMV Q2/16 conference call, August 10, 2016 30/44 | OMV
Slide 31: Downstream showed solid performance
OMV Q2/16 conference call, August 10, 2016 Slide18: Downstream showed solid performance Downstream clean CCS EBIT decreased from 269 million Euro to 250 million Euro. This was attributable to the lower refining and petrochemical margins in Downstream Oil as well as scheduled turnaround activities at
Slide 32: OMV Q2/16 conference call, August 10, 2016 32/44 | OMV
OMV Q2/16 conference call, August 10, 2016 32/44 | OMV
Slide 33: Downstream Oil – Key performance indicators
OMV Q2/16 conference call, August 10, 2016 Slide19: Downstream Oil – Key performance indicators Here you see the decrease in refining margins from 7.8 US Dollar per barrel in Q2/2015 to 4.7 US Dollar per barrel in Q2/2016. The indicator refining margin for the Western refineries decreased from 7.4 U
Slide 34: OMV Q2/16 conference call, August 10, 2016 34/44 | OMV
OMV Q2/16 conference call, August 10, 2016 34/44 | OMV
Slide 35: Downstream Gas – Key performance indicators
OMV Q2/16 conference call, August 10, 2016 Slide20: Downstream Gas – Key performance indicators At 24.4 TWh, natural gas sales volumes were 6 percent higher than in the same period of the previous year mainly due to Austria. OMV Petrom sales to third parties were slightly less because of lower deman
Slide 36: OMV Q2/16 conference call, August 10, 2016 36/44 | OMV
OMV Q2/16 conference call, August 10, 2016 36/44 | OMV
Slide 37: OMV Petrom Group: Positive Upstream result on the back of cost reduction
OMV Q2/16 conference call, August 10, 2016 Slide21: OMV Petrom Group: Positive Upstream result on the back of successful cost reduction measures This slide shows the development of operating results at the OMV Petrom Group. Clean CCS EBIT decreased significantly from 148 million Euro in Q2/2015 to 4
Slide 38: OMV Q2/16 conference call, August 10, 2016 38/44 | OMV
OMV Q2/16 conference call, August 10, 2016 38/44 | OMV
Slide 39: Targeting a long-term gearing ratio of ≤30%
OMV Q2/16 conference call, August 10, 2016 Slide22: Targeting a long-term gearing ratio of ≤30% Benefiting from the strong cash generation of the Group, OMV reported net debt just below 4 billion Euro. Despite the impairments, the gearing and equity ratios remained relatively stable at 29 and 45 per
Slide 40: OMV Q2/16 conference call, August 10, 2016 40/44 | OMV
OMV Q2/16 conference call, August 10, 2016 40/44 | OMV
Slide 41: Financial priorities in a nutshell
OMV Q2/16 conference call, August 10, 2016 Slide23: Financial priorities in a nutshell The management team has three financial priorities: focus on cash flow, maintain a strong balance sheet and improve shareholder return. Now let’s first discuss cash flow. We have to make sure that we generate suff
Slide 42: OMV Q2/16 conference call, August 10, 2016 42/44 | OMV
OMV Q2/16 conference call, August 10, 2016 42/44 | OMV
Slide 43: Outlook for the full year 2016
OMV Q2/16 conference call, August 10, 2016 Rainer Seele Slide24: Outlook for the full year 2016 For the full year 2016, we stay with our oil price assumption of 40 US Dollar per barrel on average. Due to persisting overcapacity in European markets, refining margins are projected to be below the leve
Slide 44: OMV Q2/16 conference call, August 10, 2016 44/44 | OMV
OMV Q2/16 conference call, August 10, 2016 44/44 | OMV