Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q2 2021 Earnings Presentation
26 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Jul 25, 2021
Slide 1: 2nd Quarter and First Half 2021 Results
2ND QUARTER AND FIRST HALF 2021 RESULTS July, 2021
Slide 2: Disclaimer
Disclaimer This document may include forward-looking statements, including, without limitation, regarding future results, namely cash flows, dividends, and shareholder returns; liquidity; capital and operating expenditures; performance levels, operational or environmental goals, targets or commitmen
Slide 3: Recent Developments
01 Recent Developments Andy Brown, CEO
Slide 4: 1H21 Highlights
1H21 Highlights Strong cash generation levered on portfolio resilience and capital discipline +€370 m YoY +€639 m YoY € 0.9 bn € 0.7 bn Adjusted operating cash flow1 Free Cash Flow +€311 m YoY -0.1x YoY € 1.1 bn 1.0x RCA Ebitda Net Debt to RCA Ebitda Capturing market recovery Already at targeted On
Slide 5: Upstream
Upstream Delivering significant value from superior cash margin and competitive portfolio 1H21 OCF and Net capex (€m) 1H21 ▪ Robust cash delivery, despite production restrictions ▪ Advancing towards new growth developments: Bacalhau FID in June 736 Outlook ▪ 2H21 to continue benefiting from macro co
Slide 6: Commercial
Commercial Leveraging on market recovery and focus on the business transformation 1H21 Outlook ▪ Slowdown in mobility as a result of Covid-19, ▪ Expected continued market recovery particularly in Q1 during Q3 ▪ Improved demand in Iberia and seasonality ▪ Increasing gas & power customer base driving
Slide 7: Industrial & Energy Management
Industrial & Energy Management Adapting to market trends and conditions 1H21 Outlook ▪ Stable raw materials processed and slight ▪ Improvement in demand improvement on refining margins ▪ Normalised regasification costs and higher ▪ Energy Management contribution still trading opportunities expected
Slide 8: Renewables & New Businesses
Renewables & New Businesses Growing a competitive renewables portfolio and developing future options 1H21 Outlook ▪ Renewables generation up in Q2 from ▪ >200 MW of new operating seasonality and more normalised capacity start-up by YE operations ▪ Acquiring projects in early stages ▪ Capturing highe
Slide 9: Strong 1H21 cash generation
Strong 1H21 cash generation with macro recovery enabling rapid deleveraging 2021 Progress vs Guidance (€ bn) Net debt to Ebitda >2.0 2.0 >1.7 2x 1.0 1x 0.5 - 0.7 1.1 0.9 0.0 Ebitda OCF Net capex 2Q20 3Q20 4Q20 1Q21 2Q21 1H21 Guidance Expecting to continue deleveraging throughout 2H21 9 2Q21 and 1H21
Slide 10: Attractive shareholder remuneration
Attractive shareholder remuneration with financial strength to support variable distribution Dividend policy Expected 2021 distribution 2021E DPS (€/share) Base Interim to be paid in Q3 (€0.25/sh) €0.50/share + Variable2 If ND/Ebitda < 1x at YE, 2Q21 ND/Ebitda at 1x amount until 1x 0.50 Further dele
Slide 11: Executing our distinctive investment proposition
Executing our distinctive investment proposition to thrive through the energy transition Growth from Growth from Competitive established businesses + Renewables businesses + shareholder distribution ▪ Moving with Bacalhau development ▪ Developing new renewables operating ▪ Financial robustness with
Slide 12: New Galp's Executive Committee
New Galp’s Executive Committee Refreshing team & organisational structure Andy Brown Thore E. Kristiansen CEO COO Production & Operations + resp. Energy Management New organisation (Upstream + Industrial businesses) following the recently updated strategy Filipe Silva Teresa Abecasis Adopting a lean
Slide 13: 2Q21 and 1H21 Results
02 2Q21 and 1H21 Results Filipe Silva, CFO
Slide 14: 2Q21 RCA Ebitda of €571 m
2Q21 RCA Ebitda of €571 m driven by Upstream and partial recovery in Iberia 2Q21 P&L (€ m) Upstream supported by the higher oil prices Commercial reflecting higher oil products demand Industrial & EM with pressured refining, although supported by derivative effects Renewables pro-forma Ebitda1 of €1
Slide 15: 2Q21 OCF of €470 m
2Q21 OCF of €470 m driven by stronger operational and macro conditions Upstream Commercial 346 135 69 22 OCF Net Capex 1 OCF Net Capex1 Industrial & Energy Management Renewables pro-forma2 51 64 17 -14 OCF Net Capex1 OCF Net Capex1 1 Capex net of divestments, economic perspective. 2 Pro-forma consid
Slide 16: Strong FCF generation during 1H21
Strong FCF generation during 1H21 with operational contribution and capital discipline allowing rapid deleveraging 1H21 Cash flow (€ m) CFFO impacted by a WC build driven by higher commodity prices (79) 8 Net capex of €8 m considering the €368 m proceeds from the GGND divestment in 1H21 914 817 746
Slide 17: Appendix
3 Appendix
Slide 18: Upstream results
Upstream results extracting value from oil price recovery 2Q20 1Q21 2Q21 Working interest production kboepd 132.2 125.2 128.4 Oil production kbpd 118.6 112.2 114.9 WI production up QoQ, supported by lower Net entitlement production kboepd 130.3 123.5 126.6 operational restrictions Angola kbpd 12.7 1
Slide 19: Commercial results
Commercial results supported by Iberian demand recovery 2Q20 1Q21 2Q21 Commercial sales to clients Oil products mton 1.2 1.3 1.5 Natural gas TWh 4.8 4.9 4.5 Higher oil products and lower natural gas sales Electricity GWh 678 950 1,020 following seasonality, whilst higher electricity sales RCA Ebitda
Slide 20: Industrial & Energy Management results
Industrial & Energy Management results driven by EM contribution 2Q20 1Q21 2Q21 Raw materials processed mboe 13.4 19.7 21.0 Galp refining margin supported by the international Galp refining margin USD/boe 1.8 1.9 2.4 environment, although impacted by FCC operational constraints Oil products supply1
Slide 21: Renewables & New Businesses results
Renewables & New Businesses results supported by higher generation and solar prices 2Q20 1Q21 2Q21 Renewable power generation Gross GWh 6 191 475 Renewable generation up QoQ reflecting normalised availability and seasonally higher sunlight hours Net to Galp GWh 3 141 355 Galp average solar generatio
Slide 22: Financial statements
Financial statements P&L (RCA figures, € m) Cash flow (€ m) 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 RCA Ebitda 291 499 571 RCA Ebitda 291 499 571 Dividends from associates 34 48 42 Upstream 204 438 467 Taxes paid -85 -102 -144 Commercial 59 69 73 OCF 239 445 470 Industrial & Energy Management 19 -6 50 Special
Slide 23: Financial position
Financial position Net debt up to c.€1.7 bn to accommodate dividend payment Financial position (€ m) 31 Dec., 31 Mar., 30 Jun., 2020 2021 2021 Net fixed assets 6,259 6,374 6,284 Equity down €302 m QoQ, mostly reflecting the Rights of use (IFRS 16) 1,002 1,033 1,008 distributions to shareholders and
Slide 24: Debt indicators
Debt indicators Debt indicators (€ m) Debt reimbursement (€ m) 31 Dec., 31 Mar., 30 Jun., 2020 2021 2021 1,000 Cash and cash equivalents 1,678 1,739 1,533 800 Undrawn credit facilities 1,262 1,263 1,133 600 Gross debt 3,743 3,291 3,244 Average funding cost 1.7% 1.5% 1.4% 400 Net debt 2,066 1,552 1,7
Slide 25: Key guidance and sensitivities
Key guidance and sensitivities Guidance Sensitivities (€ m) 2021 Ebitda OCF FCF1 Macro assumptions Brent price Brent price $60/bbl $5/bbl 160-180 80-100 60-80 Galp ref. margin $2.0 – 3.0/boe Galp refining margin EUR:USD 1.20 $1/boe 65-75 50-70 50-70 Operational and financial indicators EUR:USD WI Pr
Slide 26: galp.com
galp.com