Omv Ag · VIE:OMV
Omv — OMV Aktiengesellschaft — Investor Day (June 2024)
54 slides from Omv's investor day presentation, Jun 13, 2024
Slide 1: Update Strategy 2030
Update Strategy 2030 Alfred Stern Chief Executive Officer and Chairman of the Executive Board London – June 13, 2024
Slide 2: Disclaimer
Disclaimer © 2024 OMV Aktiengesellschaft, all rights reserved, no reproduction without our explicit consent. This presentation contains forward-looking statements. forward-looking statements may be identified by the use of terms such as “outlook”, “believe”, “expect”, “anticipate”, “intend”, “plan”,
Slide 3: Three strong integrated pillars delivering value over the long-term
Three strong integrated pillars delivering value over the long-term Financial strength through the cycle Strong underlying core businesses generating Chemicals Fuels & Feedstock Energy high cash flows • Base chemicals • Refining • E&P • Polyolefins • Marketing • Gas Marketing & Power Responsible tra
Slide 4: Delivering on the integrated model
Delivering on the integrated model Cash flow from operating activities 2021-2023 average1 +12% Clean CCS EPS CAGR 2019-2023 Chemicals ~30% +30% Energy EUR 6.8 bn ~50% Dividend per Share CAGR 2019-2023 Fuels & Feedstock 12% ~20% Clean CCS ROACE Average 2019-2023 1 incl. NWC effects; OMV increased sha
Slide 5: Strategy 2030 implementation progress to date
Strategy 2030 implementation progress to date Strategic pillars as announced in 2022 Strengthen, Strengthen, Establish a Become a expand Reduce fossil expand andand global leadership leading European diversify position in production and diversify chemicals producer of chemicals circular processing
Slide 6: Delivering on emission reduction
Delivering on emission reduction Absolute net GHG Scope 1 & 2 Absolute net GHG Scope 3 emissions mt CO2e mt CO2e • Improved energy and operational -25% -10% efficiency 13.7 114.5 103.2 10.3 • Significant decrease of routine flaring and venting led also to a reduction of methane emissions 2019 1 2023
Slide 7: Changes in the macro environment since 2022 and updated market assumptions
Changes in the macro environment since 2022 and updated market Market assumptions assumptions 2025-2030 Brent oil ~80 USD/bbl • Ongoing cost of living crisis following geopolitical conflicts THE gas price 25-30 • High inflation, placing pressure on required capex for transformation EUR/MWh • Energy
Slide 8: An integrated sustainable chemicals, fuels and energy company
An integrated sustainable chemicals, fuels and energy company – with a strong focus on value Net zero by 2050 in Scope 1, 2 and 3 Strengthen, Establish a expand and leading position in Become a Grow share of gas diversify renewable and leading European and low-carbon chemicals circular economy produ
Slide 9: Borealis and OMV Petrom – key drivers for our strategy
Borealis and OMV Petrom – key drivers for our strategy Global polyolefin producer with leading R&D capabilities Leader in the energy transition in South-East Europe, • Proprietary technology leader in specialty products capitalizing on growing market opportunities and plastic waste recycling technol
Slide 10: GHG absolute emission reduction targets maintained
GHG absolute emission reduction targets maintained Absolute net GHG Scope 2030 2040 2050 2030 ↘ -60% Flaring and Scope 1&2 mt CO2e -30% venting 0% Net zero Methane Scope 3 mt CO2e -20% ↘ -50% emissions ≤0.1% Member of OGMP 2.0 -15-20% ↘ ↘ Carbon intensity -50% 0% gCO2e/MJ Note. Baseline of the targe
Slide 11: Transforming while increasing profitability
Transforming while increasing profitability Clean CCS Operating Result Cash flow from operating activities EUR bn EUR bn ≥6.5 ≥7.5 6.0 ≥7.0 Sustainable Chemicals ≥6.0 ~20% 2% F&F Traditional 35-40% 5.7 27% Energy ~50% 15-20% 72% ~20% ~45% ~30% 2023 As of CMD Updated 2023 As of CMD Updated 2022 targe
Slide 12: Business strategies: Chemicals
Business strategies 01 02 03 Chemicals Fuels & Energy Feedstock OMV CAPITAL MARKETS DAY, JUNE 13, 2024 12
Slide 13: Strengthen, expand and diversify chemicals portfolio
Strengthen, expand and diversify chemicals portfolio Strategic priorities 2030 strategic targets • Grow polyolefin specialty sales volumes +30% • Deliver on ongoing growth projects (Baystar, Kallo, Borouge 4) Specialty sales volumes vs. 2023 and increase geographical diversification • Establish a le
Slide 14: Global footprint in Chemicals with a strong foundation in Europe
Global footprint in Chemicals with a strong foundation in Europe based on innovation strength Capacity Polyolefin sales • Global footprint with two strong partners in Region mn t volumes 2023 the US and Middle East • Integrated olefin-polyolefin player in all Olefins 4.2 0.7 regions Europe Other bas
Slide 15: Chemical assets well positioned on cost curve
Chemical assets well positioned on cost curve supported by high feedstock flexibility/integration • 75% of OMV chemical assets are in first two High feedstock flexibility quartiles of European cost curve1 of Nordic crackers − Nordic crackers – access to sea and storage caverns, leading to high flexi
Slide 16: Differentiation through specialty products
Differentiation through specialty products Absolute polyolefin sales margin of Borealis excl. JVs Clean unit polyolefin sales margin EUR mn Average 2018-2023, EUR/t 10-year view Standard products Europe PE/PP average Specialty products indicator margin, EUR/t 659 508 458 418 377 438 335 351 339 262
Slide 17: Growth opportunities in specialty products
Growth opportunities in specialty products End-use industry Growth target in polyolefin Europe CAGR 2023-2030 specialties volumes, mn t • Global market leader in insulation for high-voltage cables • Recent investment decisions in capacity expansion and asset Energy modernization in Sweden/Belgium +4
Slide 18: Mid-term earnings contribution from growth projects
Mid-term earnings contribution from growth projects 1st 1st 1st quartile Baystar, USA quartile PDH Kallo, Belgium quartile Borouge 4, UAE 50% Borealis 100% Borealis 40% Borealis 1.0 mn t Ethane-to-ethylene p.a. 740 kt Propylene p.a. 1.5 mn t Ethane-to-ethylene p.a. 1.0 mn t PE p.a. 2025 Start-up pla
Slide 19: Circular chemicals – a key growth opportunity
Circular chemicals – a key growth opportunity with adoption of regulations later than expected European regulations 2030 recycled and bio content targets % • EU adopted a revised packaging regulation (PPWR) in April 2024 1 L’Oreal 100% • Quotas for a minimum proportion of recycled content are to be
Slide 20: Sales volumes of sustainable base chemicals and polyolefins will grow
Sales volumes of sustainable base chemicals and polyolefins will grow up to 1.4 mn t by 2030 Sustainable base chemicals and polyolefin sales volumes kt • Renewable bio-based 1,400 − Based on sustainable feedstocks from own HVO plants − Based on green hydrogen from own electrolyzers 450 − Bio-ethylen
Slide 21: Business strategies: Fuels & Feedstock
Business strategies 01 02 03 Chemicals Fuels & Energy Feedstock OMV CAPITAL MARKETS DAY, JUNE 13, 2024 21
Slide 22: Creating a sustainable Fuels & Feedstock champion
Creating a sustainable Fuels & Feedstock champion Strategic priorities 2030 strategic targets • Become a leading innovative producer of renewable fuels and ~1.5 mn t chemical feedstock with a strong anchor in Europe Renewable fuels and chemical feedstock production capacity • Deepen integration with
Slide 23: Attractive global demand growth for renewable fuels
Attractive global demand growth for renewable fuels Global SAF demand Europe Renewable diesel (HVO) mn t • SAF mandate1 demand 15 20% mn t 30 Global Global 6% 5 2% 16 Europe2 2025 2030 2035 Europe 5 North America 11 North North America • Market-driven America incentive programs • Strong voluntary de
Slide 24: Progressing project pipeline for renewable fuels and chemical feedstock
Progressing project pipeline for renewable fuels and chemical feedstock Majority of the projects Production capacity to start 2028-2030 kt ~1,500 Co-processing plant Start-up 2024 Kallo Capacity 135 kt2 SAF/HVO plant SAF Burghausen Start-up 2028 Capacity 250 kt Schwechat Road biofuels Petrobrazi Che
Slide 25: Successful pre-marketing of SAF volumes
Successful pre-marketing of SAF volumes and development of innovative business solution Signed MoUs to supply SAF 2024-2030 ~1.5 mn t OMV SAF Business Solutions to accelerate decarbonization of corporate market • First SAF-certificates sold to • Chain-of-custody model guided by the RSB Book & Claim
Slide 26: A wide range of initiatives to ensure feedstock for our projects
A wide range of initiatives to ensure feedstock for our projects Vegetable, waste, Feedstock for bio-fuels advanced oils • Long-term supply contracts prerequisite for project FIDs and alcohols • Develop a portfolio of pre-treatment and import facilities • Backward integration via M&A and JVs (e.g.,
Slide 27: Leverage on our strong retail market position in CEE
Leverage on our strong retail market position in CEE ~1,700 sites in CEE • Multibrand strategy covering broad range of customer needs ~60% in Austria and Romania − OMV as high-end quality, Petrom as value-for-money, DISKONT and Avanti as discount brands Czech Republic • Growing fuel demand in Southe
Slide 28: Focus on maximizing the integrated margin of classic fuels
Focus on maximizing the integrated margin of classic fuels across the value chain Strong refinery integration with demand centers Retail • Strong retail network in the proximity of 5.4 mn t refineries • High degree of forward integration into ~10 Chemical feedstock Chemicals; steam crackers embedded
Slide 29: Business strategies: Energy
Business strategies 01 02 03 Chemicals Fuels & Energy Feedstock OMV CAPITAL MARKETS DAY, JUNE 13, 2024 29
Slide 30: Investing in E&P and low-carbon solutions
Investing in E&P and low-carbon solutions Strategic priorities 2030 strategic targets • Actively manage and high-grade the oil and gas portfolio; ~350 kboe/d reposition as Europe-centric player 2030 production • Deliver the operated EUR 4 bn Neptun Deep, largest gas ~60% development project in the E
Slide 31: Refocus production portfolio in and around Europe
Refocus production portfolio in and around Europe North • High-grade portfolio in the Norwegian Continental Norway North Shelf in order to manage decline • Focus on gas • Leverage tax synergies Austria Romania CEE CEE • Leverage strong capabilities as operator of mature fields to manage decline Tuni
Slide 32: Maintain target of ~350 kboe/d production by 2030
Maintain target of ~350 kboe/d production by 2030 Production guidance kboe/d 365 330-350 ~350 • Focus on gas as transition fuel ~40% Oil <9 USD/boe • Primarily infrastructure led exploration 53% ~60% Production cost 2030 • Portfolio high-grading through organic and inorganic projects • Key investmen
Slide 33: Neptun Deep, the largest gas offshore project in the EU
Neptun Deep, the largest gas offshore project in the EU Operator: Partner: OMV Petrom (50%) Romgaz (50%) Location: Romanian Black Sea 100% project view 2P reserves: ~700 mn boe (~100 bcm) Production at plateau: ~140 kboe/d Production cost: ~3 USD/boe Unit development CAPEX: ~5.5 USD/boe IRR1: >12% G
Slide 34: Gas and Power – a significant earnings contributor
Gas and Power – a significant earnings contributor • Assets support energy security Storage and LNG • Storage business is fully hedged; profitability is a function of summer- winter spreads ~70 TWh Storage capacities in Austria and • LNG asset position covered long-term; signed long-term contracts G
Slide 35: Low Carbon Business to generate a material contribution by 2030
Low Carbon Business to generate a material contribution by 2030 and growing afterwards Low Carbon Business Energy Low Carbon Business ambition by 2030 Organic Capex 2024-2030 Cash flow from operating activities EUR mn ~4 TWh ~600 Geothermal energy ~400 Rest of Low Carbon 3-4 TWh portfolio EUR ~13 bn
Slide 36: Applying technologies to unlock geothermal energy potential
Applying existing and new technologies to unlock geothermal energy potential Open loop Produce and recycle hot thermal water ~4 TWh ≥10% existing from aquifers (“we rely on reservoirs”) Target IRR proven • First well to spud end of 2024 in Vienna basin technology • First plant (20 MW capacity) in 20
Slide 37: Build power portfolio in SEE and selectively invest in Western Europe
Build power portfolio in SEE and selectively invest in Western Europe 3-4 TWh ≥10% Target OMV Group IRR Strategic priorities Integrated power business in Romania • Investments in renewable power primarily in Southeastern Europe Equity and Gas customers: third-party gas • End users − Strong renewable
Slide 38: OMV Strategy 2030 – Key take aways
OMV Strategy 2030 – Key take aways • Grow chemical business: grow specialty volumes and explore opportunities Maximize cash generation for diversification from core business • Establish 3 transformation • Focus, high-grade and Value optimize E&P business Future lighthouses: − Geothermal energy drive
Slide 39: Update Finance Strategy 2030
Update Finance Strategy 2030 Reinhard Florey Chief Financial Officer London – June 13, 2024
Slide 40: Status quo and financial steering framework in a nutshell
Status quo and financial steering framework in a nutshell Cash Flow Positive (organic) free cash flow after dividends Sustainability Net zero 2050 focus on resilience & Strong results and ability to transform cash generation in 2023 and Q1/24 Competitive shareholder returns Profitability Balance She
Slide 41: Integrated portfolio shows financial strength and sustainable growth
Integrated portfolio shows financial strength and sustainable growth during atypical market conditions Clean CCS Operating Result Cash flow from operating activities incl. NWC effects EUR bn EUR bn CAGR +14.2% 11.2 CAGR +8.9% 7.8 7.0 6.0 6.0 5.7 4.1 3.5 3.1 1.7 1.8 1.5 2019 2020 2021 2022 2023 Q1/24
Slide 42: Strong capital structure serves as a good base for growth
Strong capital structure serves as a good base for growth, transformation and shareholder distribution • Strength of balance sheet results in ample financing Healthy balance sheet capacities and growth headroom EUR bn, % • In addition to strong cash flow generation, we raised ≥EUR 1 bn in 2023 from
Slide 43: Resilient and growing cash yields with competitive shareholder distribution
Resilient and growing cash yields with competitive shareholder distribution Operating cash flow yield1 2023 Shareholder Distribution Yield2 – dividends % and buybacks, % 49 15 43 44 14 13 12 33 Median 29 10 9% 28 9 9 27 8 25 8 20 20 7 17 17 17 14 11 2019 2020 2021 2022 2023 OMV Peer 1 Peer 2 Peer 3
Slide 44: Clear financial targets with focus on value creation
Clear financial targets with focus on value creation and shareholder returns while decreasing emissions Capital allocation 6.5 7.5 priorities: ≥EUR bn ≥EUR bn 1. Organic CAPEX ~EUR 3.8 bn2 p.a. ESG (2030 vs 2019) 2. Progressive dividend organic investments, 2030 clean CCS Operating Result 2030 opera
Slide 45: Strong cash flow growth generating high quality returns
Strong cash flow growth generating high quality returns Clean CCS Operating Cash flow from Clean CCS EPS 20% of CFFO to come from Result operating activities1 EUR sustainable projects by 2030 EUR bn EUR bn Chemicals Energy F&F C&O ≥7.5 ~10 By 2030, roughly 50% of EPS ≥6.5 expected to come from 8 6.0
Slide 46: Group wide efficiency program to deliver at least EUR 0.5 bn
Group wide efficiency program to deliver at least EUR 0.5 bn Macro developments led to by end of 2027 cost and margin pressures Impact on cash flow from operating activities1 Comprehensive and detailed EUR bn initiatives in every segment and ≥0.5 corporate already in execution ~30% Chemicals Benefit
Slide 47: OMV provides value generation in a future oriented portfolio
OMV provides value generation in a future oriented portfolio Stock listed participations Proven • OMV Petrom - listed on BSE, fully consolidated value Value − OMV share 51% − EUR 9.1 bn market cap.1; EUR 4.6 bn net to OMV generating • Borouge PLC - listed on ADX, at-equity consolidated − Borealis sh
Slide 48: Capital allocation priorities confirmed
Capital allocation priorities confirmed 1 2 3 4 5 Organic Progressive M&A to accelerate Deleveraging Special shareholder CAPEX dividend policy the transition rewards • Pursue the trans- • Increase ordinary • Further growth and • Mid/long-term target • Award special dividends if formation strategy di
Slide 49: Increased investments into sustainable projects
Increased investments into sustainable projects aligned with transformation Neptun Deep is a large part Average annual organic CAPEX1 of the traditional E&P organic EUR bn capex in the next 3 years 3.7 3.8 3.8 ~15% Significant decrease in 1.0 ~30% traditional Energy organic 1.2 ~10% capex after 2027
Slide 50: Competitive sustainable projects rates along the traditional businesses
Competitive sustainable projects rates along the traditional businesses Traditional business Sustainable projects Chemicals F&F Energy (all segments) Investment grade countries ≥10.5 ≥10 ≥12 ≥10 IRR minimum (%)1 Non-investment grade countries ≥13.5 ≥13 ≥15.5 ≥12.5 Payback period (years) <15 <10 <10
Slide 51: Progressive dividend policy with clear framework for special dividends
Progressive dividend policy with clear framework for special dividends → OMV aims to increase dividends every year or at least to maintain the level of the respective previous year. → Award special dividends if leverage ratio is <30%; together with progressive ordinary dividend, the total dividend t
Slide 52: Consistent increase of regular dividend and enhanced distribution
Consistent increase of regular dividend and enhanced distribution through value sharing 5.05 5.05 ~12.7% 1 2.25 2.10 Special dividend Attractive Additional instrument in dividend yield shareholder distributions 2.30 Regular dividend 1.75 1.75 1.85 According to progressive 1.50 2.80 2.95 dividend pol
Slide 53: Strategy 2030: Delivering sustainable value
Strategy 2030: Delivering sustainable value • Focus on value increase, cash flow generation, and high shareholder returns • Benefiting from integrated business model and technology leadership with strong margins • Substantial progress on Strategy 2030 implementation and transformation towards sustai
Slide 54: OMV CAPITAL MARKETS DAY, JUNE 13, 2024
OMV CAPITAL MARKETS DAY, JUNE 13, 2024