Repsol Sa · BME:REP
Repsol Sa — Investor Presentation (April 2016)
48 slides from Repsol Sa's investor presentation, April 2016
Slide 1: Investor Update 2016: 2016-2020 Value & Resilience
Investor Update 2016 Repsol Investor Relations © 2016-2020 Value & Resilience
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2016 Repsol, S.A. is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored, duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or
Slide 3: 2016-2020 Value & Resilience agenda
2016-2020 Value & Resilience 1. Company Overview 2. Key strategic lines 2016-2020 3. Upstream 4. Downstream 5. Gas Natural Fenosa 6. Financial Outlook 7. 2016 Outlook 8. 2015 Results
Slide 4: Company Overview
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Slide 5: Repsol today
2016-2020 Value & Resilience Repsol today An integrated company operating across the entire value chain ~2.4 billion boe Integrated Delivery on proved reserves business model commitments >700 kboepd Diversified and global production portfolio ~1 million bpd World-class explorer refining capacity Cor
Slide 6: Repsol's Shareholders
2016-2020 Value & Resilience Repsol´s Shareholders 12.33% (*) Caixabank S.A. 8.48% Sacyr Vallehermoso, S.A. 4.95% Temasek Institutional Free Float Retail Free Float Investor 60.04% 14.20% Total number of shares as of March 2016: 1,442 million (*) % of capital before the transaction of the exchangeab
Slide 7: Key strategic lines 2016-2020
Key strategic lines 2016-2020 2
Slide 8: Key strategic lines 2016-2020
2016-2020 Value & Resilience Key strategic lines 2016-2020 VALUE RESILIENCE Shift from growth to value Top tier resilience among integrated delivery, prepared companies for the next growth wave Self-financing strategy even in a Commitment to maintain shareholder stress scenario compensation FCF brea
Slide 9: Shift from growth to value: upstream production evolution
2016-2020 Value & Resilience Key strategic lines 2016-2020 Shift from growth to value // Upstream production evolution // kboepd 1,000 • Achieved critical mass in E&P business 800 x2 • Extensive portfolio of assets and 600 development projects 400 200 • Optionality to improve portfolio value by dive
Slide 10: Portfolio management achievement
2016-2020 Value & Resilience Key strategic lines 2016-2020 Portfolio management achievement. Delivery of the € 3.1 Bn target for 2016-2017 Sale of our offshore wind power business in the UK for 238 million euros • After tax capital gain of 109M€ Sale of Repsol’s 10% stake in CLH • We sold our stake
Slide 11: Additional investment reduction for 2016 and 2017
2016-2020 Value & Resilience Key strategic lines 2016-2020 Additional Investment reduction for 2016 and 2017 around €1.8Bn // Group annual Investment (1) // $B 8 • Capex optimization and implementation ~ 46% ~ 35% of our efficiency measures. 6 • Low Downstream capital requirements 4 + • Deferring no
Slide 12: Strict accountability on Efficiency Program
2016-2020 Value & Resilience Key strategic lines 2016-2020 Strict accountability on Efficiency Program Pre-tax cash savings // 2016 // // 2018 // • Recurrent synergies target increased to Synergies €0.2 B €0.3 B 400M$ • 50% of synergies already implemented Upstream Opex & Capex efficiency €0.6 B €1.
Slide 13: Synergies from Talisman integration
2016-2020 Value & Resilience Key strategic lines 2016-2020 Synergies from Talisman integration are already being delivered // €250M in 2016 of which ~200M already captured // M$ 450 $ 400 M/y 400 $ 350 M/y • Finance: repurchase of Talisman bonds and joint 350 financial optimization 300 • People and
Slide 14: Breakevens
2016-2020 Value & Resilience Key strategic lines 2016-2020 Breakevens // Group FCF breakeven after dividends and interests (2016-2017)(*) // $/bbl 60 45 30 15 0 Strategic Update Plan (*) Scenario used to estimate breakevens (Stress case): Brent price of 40 $/bbl for 2016 – 2017, and 50 $/bbl flat 20
Slide 15: Downstream/Upstream leverage versus peers
2016-2020 Value & Resilience Key strategic lines 2016-2020 Repsol profits from a high Downstream/Upstream leverage // Avg 2010-15 R&M integrated margin (1) x 2015E // Avg 2010-15 R&M integrated margin (1) x 2015E Downstream / Upstream leverage ($/bbl) // Downstream / Upstream liquids leverage ($/bbl
Slide 16: Self-financed Strategic Plan even under stress scenario
2016-2020 Value & Resilience Key strategic lines 2016-2020 Self-financed Strategic Plan even under the stress scenario €B // Cash movements 2016-2020 // • Reduction of our capex budget in 2016 below 35 €4Bn 30 • Investment reduction for 2016 and 2017 around ~4 ~6 ~29 €1.8Bn 25 Cash for dividend & •
Slide 17: Upstream
Upstream 3
Slide 18: Upstream core regions in the portfolio
2016-2020 Value & Resilience UPSTREAM 3 core regions in the portfolio North America: Growth Production 2016: ~180 kboepd Operatorship: ~79% Gas production (2016): 71% • Unconventional portfolio Latin America: FCF SouthEast Asia: FCF & Growth • Operatorship Production 2016: ~360 kboepd • Valuable mid
Slide 19: An extensive pipeline of organic opportunities
2016-2020 Value & Resilience UPSTREAM An extensive pipeline of organic opportunities // Exploration // Contingent resources • Unconventional North America • Brazil: Campos-33, Sagitario • Russia: Karabashky • Colombia: CPO9 & Niscota • Alaska: Colville High • GOM: Leon • Indonesia: Sakakemang North
Slide 20: Projects activity in 2016
2016-2020 Value & Resilience UPSTREAM Projects activity in 2016 NORTH AMERICA NORTH SEA ALGERIA Redevelopment Reganne & Mon-Arb and Sud-Est-Illizi Flyndre Cawdor Duvernay/G. Edson Marcellus Eagle Ford VIETNAM Red Emperor Gulf of Mexico COLOMBIA Akacias MALAYSIA Redevelopment Kinabalu and Bunga Pakma
Slide 21: Portfolio management: flexibility to optimize capital allocation
2016-2020 Value & Resilience UPSTREAM Portfolio management: Flexibility to optimize capital allocation // Upstream Investments(1) // (Billion $) 6.7 ~ 53% 1.9 ~ 44% 3.7 ~ 17% 1.0 3.1 (2) + 0.4 4.8 2.8 2.7 2014 2015 2016 Exploration Development ($/bbl) // CAPEX(3) per barrel produced W.I // 30 25.4 2
Slide 22: Portfolio management: Capex
2016-2020 Value & Resilience UPSTREAM Portfolio management: Capex “Capex optimization has no impact on production because we are benefiting from the end of the previous investment cycle from Repsol's legacy assets (Average RRR 2011-2013: 214 %) ” kboepd 800 // Production evolution // 600 RRR: 159%(*
Slide 23: E&P Cost Efficiency Program
2016-2020 Value & Resilience UPSTREAM E&P Cost Efficiency Program // Levers // €1.1 B/y Business units • Technical standardization savings • Operational uptime increase (Opex & Operational • Procurement & logistics optimization by 2018 Capex) • Organizational right-sizing • Post -FID projects: Effic
Slide 24: Examples of improvements in Talisman legacy assets
2016-2020 Value & Resilience UPSTREAM Examples of improvements in Talisman legacy assets UK MARCELLUS Improved Recovery Factor: Marcellus Fracking pricing: • Develop a prioritized inventory of qualifying Marcellus frac cost per stage capital projects to be used in the asset USD Thousands/year strate
Slide 25: Downstream
Downstream 4
Slide 26: Downstream to provide sustainable value
2016-2020 Value & Resilience DOWNSTREAM Downstream to provide sustainable value Maximize • Taking advantage of the integration between refining and performance marketing businesses with focus on reliability • Discipline in capital allocation Capital discipline • Divestments of non-core assets for va
Slide 27: Repsol's refining margin indicator evolution
2016-2020 Value & Resilience DOWNSTREAM Repsol’s refining margin indicator evolution Margins back to a mid cycle scenario Base Repsol Crack Index1 2005-2020 Repsol Refining margin index evolution ($/bbl) ($/bbl) 10 -28% 10 8.8 0.5 8 8 6.4(*) 4.0 6 6.6 6 0.7 4 3.0 4 Avg. 3.6 4.3 2 2.7 2 4.3 2.7 1.5 3
Slide 28: Fundamentals support sustained Repsol refining margins
2016-2020 Value & Resilience DOWNSTREAM Fundamentals support sustained Repsol refining margins Lower Opex Lower oil and gas prices Growing refined Average demand growth of 1.2% for 2016-2020 on top of strong 2015 demand products demand Spain fuels demand growth at 4% in 2015 European refinerie
Slide 29: Downstream efficiency and margin improvement program
2016-2020 Value & Resilience DOWNSTREAM Downstream efficiency and margin improvement program ~€0.5 B/y from Downstream efficiency improvement in 2018 // Projects // // Levers // // EBIT increase by 2018 // • Energy cost reduction • Improved planning to increase crude supply flexibility Refining ~€25
Slide 30: 2016-2020 Downstream strategy
2016-2020 Value & Resilience DOWNSTREAM 2016-2020 Downstream strategy Maximizing value and cash generation leveraged on fully invested assets // Sustainable value from quality assets // // Investment discipline // Repsol in leading position among european peers $/bbl European Integrated Margin of R&
Slide 31: Gas Natural Fenosa
gasNatural » fenosa Gas Natural Fenosa
Slide 32: Gas Natural Fenosa: strong profitability with long term vision
2016-2020 Value & Resilience Gas Natural Fenosa Strong profitability with long term strategic vision (*) (*) Dividends received in 2012-2015 period ~ € 1.1 bn 32
Slide 33: Financial outlook
Financial outlook 6
Slide 34: Financial Strategic Plan 2016-2020
2016-2020 Value & Resilience Financial outlook Financial Strategic Plan 2016-2020 Sound track record Resilient Plan with Conservative in managing adverse stronger business profile financial policy conditions Commitment to reduce debt The three Rating Agencies, Standard & Poor’s, Moody’s and Fitch, c
Slide 35: Cash available covers short term maturities
2016-2020 Value & Resilience Financial outlook Cash available covers short term maturities (Billion €) 11.1 11.8 0.6 2.0 9.1 9.8 Operating committed 0.6 Credit Lines 5.7 7.9 6.0 5.7 Structural committed Credit Lines 2.0 4.0 3.1 3.8 2.7 2.0 1.8 1.9 2.0 Cash & 2.8 2.8 Equivalents Liquidity as Long Ter
Slide 36: 2015 full year results: financial aspects
2015 FULL YEAR RESULTS FINANCIAL ASPECTS (Billion €) 16 12.0 (5.4) 14 4.7 (0.7) 0.5 (0.1) (1.0) 11.9 12 4.0 TALISMAN DEBT 10 8 6 8.0 € 1 Bn of cash flow generation for debt reduction 4 ACQUISITION PRICE 1.9 2 0 Net Debt Talisman Operating CAPEX Divestments Dividends paid Others Hybrid Net Debt 31st
Slide 37: 2016 Outlook
2016 Outlook 7
Slide 38: 2016 Outlook
2016-2020 Value & Resilience 2016 Outlook In July Repsol will pay a complementary dividend of €0.30 gross per share. 2016 Downstream business free cash flow ~€3 billion. Keep our production level at around 700,000 barrels per day in 2016. Capex and Opex optimization to protect Free Cash Flow
Slide 39: 2015 Results
2015 Results 8
Slide 40: Main events
2015 FULL YEAR RESULTS MAIN EVENTS • Integration of Talisman • Strategic Plan 2016-2020: Value and Resilience • Challenging macro scenario • EBITDA CCS of €5Bn • Cash Flow from operating activities of €5.4Bn • Cash neutrality break-even below 50$ in 2015 • Debt reduction of €1Bn excluding the effect
Slide 41: Prices continued negative trend
2015 FULL YEAR RESULTS PRICES CONTINUED NEGATIVE TREND // 2015 Brent and Henry Hub // ($/bbl) ($/Mbtu) 100 Average 2014: 98.9 $/bbl 5 90 4.5 Average 2014: 4.4 $/MBtu 80 4 -47% 70 3.5 -39% 60 3 50 2.5 Average 2015: 2.7 $/MBtu 40 Average 2015: 52.4 $/bbl 2 30 1.5 20 1 Jan’15 Dec’15 Jan’15 Henry Hub De
Slide 42: Strong cash generation in a challenging scenario
2015 FULL YEAR RESULTS STRONG CASH GENERATION IN A CHALLENGING SCENARIO // Maintaining EBITDA CCS 2015 vs. 2014 // EBITDA CCS FY 2015 / FY 2014 (%) // at much lower crude prices // Repsol EBITDA Excluding Talisman 106% CCS (B€) 100% contribution: 92% 5.5 Group (€4,375M) €5Bn 80% 4.5 71% Downstream 3
Slide 43: Sources and uses of cash
2015 FULL YEAR RESULTS SOURCES AND USES OF CASH // Sources and Uses of cash in 2015 // • Repsol integrated model delivering strong € Bn 7 results in difficult Upstream environment 6 Disposals • Downstream acting counter-cycle leveraging: 5 Dividends • Increased oil product demand 4 • Higher industry
Slide 44: Adjusted net income and net income by business segments
2015 FULL YEAR RESULTS ADJUSTED NET INCOME AND NET INCOME BY BUSINESS SEGMENTS Note: Repsol Group made the decision in 2014, prompted by the business reality and in order to make its disclosures more comparable with those in the sector, to disclose as a measure of the result of each segment the recu
Slide 45: Economic and operational data
2015 FULL YEAR RESULTS ECONOMIC AND OPERATIONAL DATA 45
Slide 46: Operating result by business segments and geographical areas
2015 FULL YEAR RESULTS OPERATING RESULT BY BUSINESS SEGMENTS AND GEOGRAPHICAL AREAS 46
Slide 47: Adjusted net income by business segments and geographical areas
2015 FULL YEAR RESULTS ADJUSTED NET INCOME BY BUSINESS SEGMENTS AND GEOGRAPHICAL AREAS 47
Slide 48: EBITDA by business segments and geographical areas
2015 FULL YEAR RESULTS EBITDA BY BUSINESS SEGMENTS AND GEOGRAPHICAL AREAS 48