Totalenergies Se · EURONEXT:TTE
Totalenergies — FY2019 Earnings Presentation
52 slides from Totalenergies's earnings presentation, February 2020
Slide 1: Results and Outlook
Results and Outlook February 2020
Slide 2: Safety, Total's core value
Safety, Total’s core value Cornerstone of operational efficiency & sustainability Total Recordable Injury Rate for Total and peers* 2019 average age of vessels* Per million man-hours Years 2 15 10 Contractors 1 0.8 Staff 5 2014 2019 Total Worldwide chartered Fleet flee t Deploring 4 fatalities in 20
Slide 3: Reducing CO2 emissions while growing
Reducing CO2 emissions while growing Scope 1 & 2 emissions from operated oil and gas facilities 2018 Upstream emissions intensity Mt/y – CO2 eq kgCO2 eq/boe – Scope 1&2 – Operated 46 45 Peers range 41.5 < 40 20 New: 2016-25 35 acquisitions & start-ups 2015 perimeter 25 2015 2016 2017 2018 2019 2025
Slide 4: Oil markets fundamentally volatile
Oil markets fundamentally volatile 2019 highlights • Lower demand growth than 2015-18 average (+1.5 Mb/d) +1 Mb/d +1.2 Mb/d • Supportive policy from OPEC+ demand in 2019* demand in 2020* with deeper crude cuts • Refining margins squeezed by increase in crude prices and 100 Mb/d high OECD product inv
Slide 5: Petrochemical markets 2019-20
Petrochemical markets 2019-20 PE and ethylene margins $/t Demand 1 500 • Healthy global demand growth (~3% in 2019) supported by resilient Asian markets Integrated US 1 000 (Ethane) Supply Integrated Europe • US ethylene margins (Naphtha) impacted by new production capacities 500 • Monomer-polymer i
Slide 6: Gas markets 2019-20
Gas markets 2019-20 LNG demand Demand Mt/y • Low price environment and climate policies favorable + 13% to gas + 10%/y • Key role for LNG in creating 350 + 9% more integrated markets • China n°1 worldwide LNG importer in Nov. and Dec. 2019 • 2020 supported by US-China trade deal Supply • Markets glo
Slide 7: EU electricity markets
EU electricity markets 2019 highlights EU 28 gas, solar and wind power generation TWh • Surge in cheaper LNG imports (> 80% growth) and +12% strong increase in CO2 prices creating EU power market 800 +13% arbitrage in favor of gas • Gas notably driven by Spain, Italy & Germany • Solar & wind notably
Slide 8: 2019 results: strong track record of consistently delivering
2019 results: strong track record of consistently delivering
Slide 9: Growing cash flow in a weaker environment
Growing cash flow in a weaker environment Increasing high-margin new production CFFO* 2019 cash flow allocation B$ B$ +1.9 B$ Debt Working capital 25 Capital 17.4 investment CFFO* 26.4 64 1.75 Buyback $/b 7.5 Dividend 20 2018 2019 Sourc es Uses Brent ($/b) 71 64 NBP ($/Mbtu) 7.9 4.9 Organic pre-divi
Slide 10: Consistently delivering strong results
Consistently delivering strong results Sustainable profitability with > 10% ROE in 2019 Adjusted net income B$ 13.6 11.8 Resilient results in a weaker Marketing & Services environment Refining & Chemicals Integrated Gas, E&P and iGRP production growth Renewables & Power compensating weaker hydrocarb
Slide 11: Maintaining discipline on Opex
Maintaining discipline on Opex Global Procurement Already Opex savings vs. 2014 base B$ > 900 M$ 2018-19 savings Target: 1 B$ 2018-20 > 5 B$ 4.7 B$ 4.2 Downstream & Corporate Upstream 2018 2019 2020 Extending cost reduction efforts +1 B$ in 2023 vs. 2020 2019 Results and Outlook | 11
Slide 12: Outstanding 2019 Upstream performance
Outstanding 2019 Upstream performance Increasing cash margin in lower price environment Upstream, 2019 vs. 2018 % +9% +9% Cash accretive start-ups and acquisitions • Egina, Kaombo, Yamal LNG, Ichthys Brent NBP • Fully benefiting from Maersk Oil CFFO* Production and Adnoc Offshore Maintaining pressur
Slide 13: Downstream: maintaining strong CFFO despite volatile environment
Downstream: maintaining strong CFFO despite volatile environment Best-in-class 25% ROACE CFFO Downstream ROACE B$ % – Total vs. peers 6.6 B$ 7 Non-cyclical markets 2017 2018 2019 10% 20% 30% 40% VCM* ($/t) 46 38 35 Balanced portfolio providing stability * European refining variable cost margin Note:
Slide 14: Maintaining strong balance sheet
Maintaining strong balance sheet Targeting gearing < 20% Limited impairments underpinning healthy portfolio Net-debt-to-capital 2019 impairment %, Total vs. peers B$, Total vs. peers 30 20 10 Including Excluding leases impact* 5 10 leases impact * Estimated for peers (BP, Chevron, Exxon, Shell) 2019
Slide 15: Track record of consistent execution
Track record of consistent execution Delivering 2019 objectives Predictable and reliable delivery Adj. NOI from segments B$ Target Realized in 2019 Capital investment ~18 B$* 17.4 B$ 16.0 14.6 2019-20 asset sale 1.9 B$ realized 5 B$ program 2.9 B$ announced 11.9 Cost reduction 4.7 B$ 4.7 B$ 10 Upstr
Slide 16: Outperforming peers in 2019
Outperforming peers in 2019 2019 Net income vs. 2018 2019 CFFO* increase vs. 2018 % % 10% -10% -40% -80% -30% ROACE ROE % % 10% 10% Estimated for peers (BP, Chevron, Exxon, Shell) * Excl. working capital variation 2019 Results and Outlook | 16
Slide 17: Delivering strategy for sustainable & profitable growth
Delivering strategy for sustainable & profitable growth
Slide 18: Upstream: capitalizing on strengths
Upstream: capitalizing on strengths Value over volume Delivering operational Focusing on value Highgrading portfolio excellence by playing to our strengths and renewing reserves Safety Technical expertise Renewed exploration strategy focusing on prolific basins Actively reducing scope 1&2 • Deepwate
Slide 19: Outstanding production growth
Outstanding production growth Upstream production growth Mboe/d 2-4%* +9% Delivering 2018-19 cash accretive start-ups 3 +8% Increasing LNG production by > 40% in 2019 2.5 Benefiting of low ~3% decline rate thanks to high share of long plateau 2 2017 2018 2019 2020 In line with > 5%* CAGR over 2018-2
Slide 20: Strong E&P cash flow
Strong E&P cash flow 2019 increase despite weaker oil & gas prices E&P CFFO 2020 cash margin B$ CFFO – $/boe – 60 $/b 20 30 10 2016 2017 2018 2019 2020 2018-19 60 start-ups Brent ($/b) 44 54 71 64 2019 Results and Outlook | 20
Slide 21: Competitive advantage on Opex
Competitive advantage on Opex Leveraging synergies and Total Global Services Maersk Oil synergies delivered quicker than expected Production costs* $/boe ~350 M$/y 2020+ synergies Target > 300 15 Exxon 9.9 Chevron 10 Shell BP 5.7 5.4 5 2014 2019 2020 Targeting 5 $/boe * ASC 932 2019 Results and Outl
Slide 22: Successfully replacing reserves
Successfully replacing reserves ~20 years of proved and probable reserves 2019 proved reserve replacement rate Proved reserves % % 100% 157% 124% Gas 100% 50% Condensates & LPG Organic Oil 1-ye ar 5-ye ar 5-ye ar End 2019 average average (2015-19) (2014-18) Peers ~12 years of proved reserves ~60% ga
Slide 23: Capturing promising deepwater exploration acreage
Capturing promising deepwater exploration acreage First discovery in Surinam Block 58 in Surinam: 50% WI Op.* Block C-M-541 in Brazil: 30%** WI Op. Marlim BRAZIL Canje Rio de Janeiro Seat Gavea Joe Jethro PdA Maromba Stabroek C-M-541 Orinduik (30%**) discoveries Maka-1 Buzios Mero Kanuku Gato Block
Slide 24: Launching next wave of profitable projects
Launching next wave of profitable projects > 800 kboe/d to fuel growth post-2023 > 15% Troll, Ekofisk Arctic LNG 2 IRR* at 50 $/b Glendronach Johan Sverdrup 2 Dunga Ph. 3 Cameron LNG Extension Energia Costa Azul Anchor NLNG T7** Al Shaheen 2 Ballymore Ikike Sohar LNG A6 North Platte Preowei Owowo Ti
Slide 25: Refining & Chemicals: a focused strategy
Refining & Chemicals: a focused strategy Consistently delivering > 20% ROACE Investing in Priority to integrated platforms Growing Petrochemicals low carbon solutions > 70% capital employed in 2025 Building on low cost feedstocks Biofuels and Bioplastics Improving energy efficiency by Leveraging gro
Slide 26: Priority to integrated platforms
Priority to integrated platforms Antwerp: Total’s largest integrated site in Europe Refining & Chemicals CFFO B$ 750 M$ CFFO in 2019 > 95% refinery utilization rate 4 2018 2019 2020 VCM ($/t)* 38 35 35 • Harvesting benefit of Antwerp modernization (1.3 B$ Capex) • 340 kb/d high conversion refinery r
Slide 27: Growing Petrochemicals
Growing Petrochemicals Leveraging low cost feedstock Petrochemicals production* % JV Total-Novealis (50%-50%) JV Hanwha-Total (50%-50%) 1 Mt/y ethane cracker > 80% completed Gas cracker & PP expansion started in 2019 100% 0.6 Mt/y PE capacity > 15% completed 0.4 Mt/y PE start-up in 1Q 2020 Naphtha E
Slide 28: Investing in low carbon solutions
Investing in low carbon solutions 10% of Refining & Chemicals Capex Growing in biofuels and bioplastics • Started up La Mede bio-refinery (500 kt/y) in 2019 • Started up PLA plant in Thailand (75 kt/y) in 2019 Expanding in plastics recycling • Acquired Synova in 2019, leader in recycled propylene fo
Slide 29: M&S: growing selectively and delivering non-cyclical cash flow
M&S: growing selectively and delivering non-cyclical cash flow Expanding in large fast Developing Growing in growing markets non-fuel revenues low carbon fuels > 4,000 stations targeted in new Increasing Shop Food & EV charging: 150,000 charge markets (China, India, Brazil, Services revenues in Euro
Slide 30: Expanding in large fast-growing markets
Expanding in large fast-growing markets M&S CFFO Mexico Saudi Arabia China B$ 200 stations 300 stations* 300 stations 2.5 Lubricants Specialties Retail Brazil Angola India 300 stations starting operations starting operations in 2020 in 2020 2018 2019 New markets Retail ~1,000 stations in new markets
Slide 31: Increasing non-fuel revenues
Increasing non-fuel revenues Rolling out new Mobility shop concept in 2020 European retail CFFO B$ 0.8 Non-fuel Expanding fleet management services worldwide • Acquired card solutions in 2019 for expansion in Africa • Qualified to collect toll fees in Germany in 2020 2018 2019 Growing Total Wash sal
Slide 32: Growing in low carbon solutions
Growing in low carbon solutions ~10% of Marketing & Services Capex Developing top tier positions Marketing gases for road Growing clean marine fuels in Electro-Mobility transportation 0.6 Mt/y LNG bunker supply 16,000 operated charging points Expanding NGV contracts with CMA CGM in 2019 (+40% vs. 20
Slide 33: iGRP: investing in growing markets
iGRP: investing in growing markets Building strong positions along the integrated gas and electricity chains Global LNG Electricity in Europe Renewables worldwide Expanding Integrating along the Profitably investing in solar and global LNG portfolio electricity value chain from wind electricity gene
Slide 34: iGRP: contributing to the energy transition
iGRP: contributing to the energy transition Investing in sustainable long-term cash generation CFFO B$ 4 2018 2019 2020 NBP ($/Mbtu) 7.9 4.9 5 HH ($/Mbtu) 3.1 2.5 2.5 ~15% of Group CFFO in 2019 2019 Results and Outlook | 34
Slide 35: Integrated LNG: harvesting benefits from portfolio and market growth
Integrated LNG: harvesting benefits from portfolio and market growth LNG sales CFFO Mt/y B$ +1.5 B$ 4 Spot 30 Supply from 3rd party (growth from USA) Supply from equity JVs Equity JV sales to 3rd party 2018 2019 2020 2018 2019 Russia 2019 Value from scale and arbitrage Strong contribution from Yamal
Slide 36: Integrated and diversified portfolio with a global reach
Integrated and diversified portfolio with a global reach Yamal LNG Snøhvit LNG Artic LNG 2 Rotterdam Cove Point LNG Skikda Driftwood LNG* Arzew ELNG ECA LNG* Cameron LNG Sohar LNG Freeport LNG Sabine Pass LNG Qatargas Qalhat LNG & Oman LNG Adnoc LNG Oman Yemen LNG Nigeria LNG Singapore Equity produc
Slide 37: Developing along the integrated electricity value chain in Europe
Developing along the integrated electricity value chain in Europe CCGT Renewables Marketing Supply & Trading ~2 GW in 2019 ~2 GW in 2019 (x2 vs. 2018): Leveraging brand recognition Acquired 700 MW solar and digitalization ~50% utilization rate in 2019 (> 30% in 2018) (Novernergia), 160 MW wind > 4 M
Slide 38: Profitably investing in renewables
Profitably investing in renewables Building on expertise of > 10,000 employees Accelerating renewables Renewable worldwide gross Expanding storage growth capacity solutions GW 6 Qatar: awarded 800 MW large- China: partnering with scale solar power plant 10% Tianneng to scale up e-mobility and energy
Slide 39: Growing cash flow and shareholder return
Growing cash flow and shareholder return
Slide 40: Integrating climate into strategy
Integrating climate into strategy Focusing on Taking into account anticipated market trends oil projects with low breakeven Global energy demand Mboe/d Expanding along the 300 gas value chain Renewables Nuclear Developing Coal profitable & sizeable Oil low carbon electricity Natural gas 2018 2040 20
Slide 41: Our ambition: reducing the carbon intensity of energy products used by our customers
Our ambition: reducing the carbon intensity of energy products used by our customers Carbon intensity of energy products sold to our customers The leading Major in Base 100 in 2015 (75 gCO2e/kbtu) decarbonizing its energy mix Realized Ambition -6% -15% Over 2015-19: 2015-30 -6% carbon intensity 100
Slide 42: Act on products, Act on demand, Act on emissions
Act on products, Act on demand, Act on emissions The key levers to reach our carbon intensity ambition Liquids Gases Electrons Carbon sinks • Decarbonize oil: • Decarbonize natgas: • Focus on renewables • Support carbon blend with biofuels blend with green gas & gas for power pricing (biojet) (H2, b
Slide 43: Maintaining discipline on Capital investment
Maintaining discipline on Capital investment 16-18 B$/y over 2019-23 Capital investment* 2019-20 asset sales B$ B$ ~18 17.4 Downstream Net acq. Low carbon 4 Bboe at 5 electricity ~2.5 $/boe Low carbon LNG Capex Exploration • UK mature & Production assets • Brunei CA1 • TRAPIL 2019 2020 2019-20 Asset
Slide 44: Africa at the heart of Total strategy
Africa at the heart of Total strategy Developing deep-offshore and large LNG resources Successfully starting-up cash accretive Kaombo and Egina Bashrush-1 Accessing low cost resources Timimoun Berkine Bassine** Waha Upstream + M&S presence • Mozambique LNG M&S presence only • 25-years extension on B
Slide 45: Delivering cash flow growth
Delivering cash flow growth Debt adjusted cash flow (DACF) B$ Strong contribution from 2018-19 project start-ups: > 3.5 B$ CFFO* +1 B$/y 35 2020+ from Egina, Ichthys, Kaombo and Yamal LNG 28.5 Clear visibility over 2019-25 26.1 • iGRP: ~+3.5 B$ in 2025 vs. 2019 60 $/b • Downstream: +2 B$ in 2025 vs.
Slide 46: Clear priorities for cash flow allocation
Clear priorities for cash flow allocation 1 2 3 4 Capital Balance Share Dividend investment sheet buyback Maintain 16-18 B$ per year 5-6% increase per year gearing < 20% 5 B$ over 2018-20 over 2019-23 grade A credit rating • 6% on last 2 2019 2018-19: 3.25 B$ quarterly dividends • 5% for full year 2
Slide 47: 2019 ESG key facts
2019 ESG key facts Total, the Responsible Energy Major Total commitment recognized by rating agencies • A- grade • Transparency: issued 4th Climate Report • Public assessment of industry associations • Best score for Climate Change Environment/ membership against climate commitment* an O&G Major Cli
Slide 48: Delivering shareholder return policy
Delivering shareholder return policy 1-year TSR %, Total and peers*, 2019 2-year TSR %, Total and peers*, 2018-19 10% 10% 3-year TSR %, Total and peers*, 2016-19 30% -10% 15% Best-in-class TSR -15% Bloomberg data, NYSE * Peer group: BP, Chevron, Exxon, Shell 2019 Results and Outlook | 48
Slide 49: Actively engaged in energy transition for sustainable growth and return to shareholder
Actively engaged in energy transition for sustainable growth and return to shareholder Delivering results • Growing cash flow • Reducing breakeven to increase resilience to volatile environment • Discipline on Opex and Capex Executing announced strategy • Leveraging Upstream strengths: high-grading
Slide 50: Appendix
Appendix 2019 Results and Outlook | 50
Slide 51: Resilient sales portfolio benefiting from oil price upside
Resilient sales portfolio benefiting from oil price upside 2020 index exposure Long term contract price reviews % % 100% Price review after 2022 Open to optimization HH 50% EU gas Production Oil costs No price review Supply Sales 2019 Results and Outlook | 51
Slide 52: Disclaimer
Disclaimer This document may contain forward-looking information on the Group (including objectives and trends), as (ii) Inventory valuation effect well as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of The adjusted results of the Refining & Chemical