Slide 1: Q4 and full-year 2018 Results Conference Call
Q4 and full-year 2018 Results Conference Call Rainer Seele Chairman of the Executive Board and CEO February 6, 2019 OMV Aktiengesellschaft
Slide 2: Disclaimer
Disclaimer This report contains forward-looking statements. Forward-looking statements may be identified by the use of terms such as “outlook,” “expect,” “anticipate,” “target,” “estimate,” “goal,” “plan,” “intend,” “may,” “objective,” “will” and similar terms or by their context. These forward-look
Slide 3: Macro environment – Higher oil and gas prices, healthy refining margins
Macro environment – Higher oil and gas prices, healthy refining margins Oil prices USD/bbl OMV indicator refining margin USD/bbl 80 74 75 6 5.7 5.7 67 69 5.2 5.2 61 4.8 5 60 68 58 61 62 4 56 40 3 Average Brent price 2 20 Average realized crude price 1 0 0 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q4/17 Q1/18 Q2
Slide 4: Key messages Q4 2018
Key messages Q4 2018 FINANCIAL STRONG DELIVERING PERFORMANCE OPERATIONS THE STRATEGY Excellent clean CCS Refineries at 98% Closed New Zealand acquisition Operating Result utilization rate Divested part of Upstream Tunisia of EUR 1.1 bn Record production of Signed agreement for a 5% share in Clean CC
Slide 5: Another strong quarter – Clean CCS Operating Result of more than EUR 1 bn achieved
Another strong quarter – Clean CCS Operating Result of more than EUR 1 bn achieved Clean CCS Operating Result Clean CCS net income attributable Clean CCS Earnings Per Share EUR mn to stockholders EUR EUR mn Upstream Corporate & Others, Consolidation Downstream 1,050 1,053 1.50 1.39 1.12 554 578 688
Slide 6: Upstream – Increased sales volumes and favorable price environment
Upstream – Increased sales volumes and favorable price environment and Clean Operating Result Q4/18 vs. Q4/17 EUR mn Realized oil price increased by 12% +234 +68% Realized gas price decreased by 4% (following acquisition in 578 Russia) 11 139 Hedging impact in Q4/18 of EUR (58) mn (vs. EUR (27
Slide 7: Downstream – Strong earnings driven by higher volumes and good margins
Downstream – Strong earnings driven by higher volumes and good margins Q4/18 vs. Q4/17 Clean CCS Operating Result EUR mn Oil Good market environment due to petrochemicals Refining indicator margin at USD 5.2/bbl (-8%) +89 Substantially higher ethylene/propylene net margin (+26%) 27 445 Impro
Slide 8: Free cash flow of EUR 0.3 bn after record dividends and major acquisitions
Free cash flow of EUR 0.3 bn after record dividends and major acquisitions Sources and uses 1 in 2018 EUR bn Cash flow from operating activities increased to EUR 4.4 bn (FY/17: EUR 3.4 bn) 4.9 +0.3 4.6 Cash inflow from disposals of EUR 502 mn mainly due 0.5 to sale of the Upstream business in Pa
Slide 9: OMV Strategy 2025 – In a nutshell
OMV Strategy 2025 – In a nutshell Profitable growth Expand integrated portfolio ► Clean CCS Operating Result ► Leverage on proven concept of ► ≥EUR 4 bn in 2020 and integration ► ≥EUR 5 bn in 2025 ► Significantly internationalize Upstream and Downstream ► ROACE target ≥12% mid- and long-term ► Build
Slide 10: 2018 – Record Clean CCS Operating Result in OMV’s history
2018 – Record Clean CCS Operating Result in OMV’s history Clean CCS Operating Result Clean CCS ROACE EUR bn In % 3.6 14 13 Target 3.0 ≥ 12% 2.0 1.2 8 1.7 7 1.5 0.1 0.0 1.5 1.5 1.8 1.6 2015 2016 2017 2018 2015 2016 2017 2018 Upstream Downstream Others 10 | OMV Group, Q4 and full-year 2018 Conference
Slide 11: A new level of sustainable cash generation and potential for increase above EUR 5 bn mid-term
A new level of sustainable cash generation and potential for increase above EUR 5 bn mid-term Cash generation and oil price development 1 Sources of funds, EUR bn Growth Turnaround ≥5.0 4.3 3.9 3.3 3.2 3.0 Downstream 99 72 Oil price 2 54 Upstream 52 44 Corporate 3 2014 2015 2016 2017 2018 Mid-term 3
Slide 12: Upgraded and cost-competitive Upstream portfolio
Upgraded and cost-competitive Upstream portfolio Production volume Production cost In Kboe/d In USD/bbl +41% +41% (47)% -47% 427 13.2 Asia-Pacific MEA 348 10.6 303 311 North Sea 8.8 Russia 7.0 CEE 2015 2016 2017 2018 2015 2016 2017 2018 12 | OMV Group, Q4 and full-year 2018 Conference Call, February
Slide 13: Strengthened reserves base
Strengthened reserves base 1P Reserves Mn boe 2.0 Reserve Replacement Rate 3 years Ø, % 1.1 1.3 160 As of end of 2018 1.0 1.0 Reserves life years 2015 2016 2017 2018 2025 Target 8 As of end of 2018 13 | OMV Group, Q4 and full-year 2018 Conference Call, February 6, 2019
Slide 14: Strong project pipeline for further production growth
Strong project pipeline for further production growth Sapura Upstream Production growth Achimov 4A/5A Kboe/d Sarb and Umm Lulu Upside: Neptun Asta Hasteen Sapura Upstream ~600 Sarb and Umm Lulu Nawara Sapura Upstream 500 1 >500 427 348 2017 2018 2019 2020 2025 Production cost 1 El
Slide 15: Downstream – Consistently strong cash generator
Downstream – Consistently strong cash generator Clean CCS Operating Result Downstream Free Cash Flow EUR bn EUR bn 1.7 1.8 0.2 1.6 1.3 1.5 1.5 0.1 0.1 0.2 Downstream Gas 1.3 0.6 0.2 0.1 0.1 0.6 0.6 0.6 Petrochemicals 0.8 0.6 0.1 1.4 Organic free cash flow 1.2 1.1 0.9 0.8 0.8 0.8 Fuels 0.6 (0.02) Cas
Slide 16: Excellently positioned for IMO 2020 to capture upside
Excellently positioned for IMO 2020 to capture upside No investment required Positioned to capture significant upside Middle Heavy fuel No refinery Balanced distillate yield oil yield turnaround sour/sweet in 2019 and 2020 crude slate 50% 2% Diesel crack spread HFO crack spread Able to produce new A
Slide 17: OMV and ADNOC form a strategic downstream partnership
OMV and ADNOC form a strategic downstream partnership – Decisive step to deliver OMV Strategy 2025 ► OMV acquires a 15% interest in ADNOC Refining and in a to-be-established Trading Joint Venture (ADNOC 65%, ENI 20%) ► OMV becomes a strategic partner in the 4th largest refinery in the world, integra
Slide 18: Benefitting from an integrated position in Abu Dhabi
Benefitting from an integrated position in Abu Dhabi ─ One of the world’s major oil and gas centers OMV’s integrated value chain in Abu Dhabi enhances profitability, increases optionality and reduces volatility Upstream Refining & Trading Petrochemicals / Polymers Sarb and Umm 20.0% 15.0% ADNOC Refi
Slide 19: Healthy balance sheet with substantial gearing headroom
Healthy balance sheet with substantial gearing headroom Net debt and gearing ratio EUR bn Gearing ratio target ≤30% 28% Cash position EUR bn 1 21% Gearing 2.6 headroom 4.0 14% 13% 4.0 Undrawn revolving credit facilities 3.0 EUR bn 1 2.0 2.0 Net debt 3.5 1 As of end of 2018 2015 2016 2017 2018 19 | O
Slide 20: Focus on disciplined organic investments
Focus on disciplined organic investments Organic CAPEX EUR bn 3.1 2.0 – 2.5 2.3 1.8 Increase in 2019 organic Capex guidance reflects a strong pipeline of growth projects 2013-2015 2016-2018 2019 2019-2025 Ø p.a. Ø p.a. Ø p.a. 20 | OMV Group, Q4 and full-year 2018 Conference Call, February 6, 2019
Slide 21: Shift in capital allocation priorities
Shift in capital allocation priorities Previous priorities New priorities Organic Capex 1 Organic Capex ROACE TARGET Acquisitions 2 Dividends ≥12% Mid- and long-term Dividends 3 Debt reduction Debt reduction 4 Acquisitions 21 | OMV Group, Q4 and full-year 2018 Conference Call, February 6, 2019
Slide 22: Delivering on our progressive dividend policy – Record dividends in 2018
Delivering on our progressive dividend policy – Record dividends in 2018 Dividend per share EUR CAGR 1.75 Record dividend of EUR 1.75 per share for 2018 +21% 1.5 proposed (+17% vs. 2017) 1.20 We are committed to delivering an attractive and 1.00 predictable shareholder return through the busines
Slide 23: Outlook 2019
Outlook 2019 2018 Outlook 2019 Brent oil price (USD/bbl) 71 65 NCG gas price (EUR/MWh) 23 <23 Total hydrocarbon production (kboe/d) 427 500 1 OMV indicator refining margin (USD/bbl) 5.2 ~5.0 Ethylene/propylene net margin (EUR/t) 448 <448 Utilization rate refineries (%) 92 >92 Organic Capex (EUR bn)
Slide 24: OMV Aktiengesellschaft
OV OMV OMV Aktiengesellschaft ouv OMV
Slide 25: BACKUP
BACKUP OMV Aktiengesellschaft
Slide 26: Upstream – Result supported by higher realized prices
Upstream – Result supported by higher realized prices Clean Operating Result Q4/18 vs. Q3/18 EUR mn +24 Realized oil price decreased by 8% Realized gas price increased by 7% 578 554 14 77 Hedging impact in Q4/18 of EUR (58) mn 38 (vs. EUR (27) mn in Q4/17 and EUR (59) mn in Q3/18) Positive F
Slide 27: Downstream – Improved operational performance and higher refining margins
Downstream – Improved operational performance and higher refining margins Clean CCS Operating Result EUR mn Q4/18 vs. Q3/18 (39) Oil Market environment stronger due to petrochemicals 484 49 54 Lower refining margin (-8%) 26 34 445 Improved ethylene/propylene net margins (+17%) 64 Gas Maintai
Slide 28: Operational KPIs
Operational KPIs Hydrocarbon production Refined product sales Retail sales kboe/d mn t mn t 447 5.50 5.25 1.74 406 4.95 1.55 1.58 377 Q4/17 Q3/18 Q4/18 Q4/17 Q3/18 Q4/18 Q4/17 Q3/18 Q4/18 Hydrocarbon sales Refinery utilization rate Natural gas sales mn boe % TWh 39.4 92 98 98 31.1 32.7 33.0 35.2 23.
Slide 29: Full-year 2018 Clean CCS Results
Full-year 2018 Clean CCS Results Clean CCS Operating Result Clean CCS net income attributable Clean CCS Earnings Per Share EUR mn to stockholders EUR EUR mn Upstream Corporate & Others, Consolidation Downstream 3,646 4.97 4.88 1,624 1,594 2,958 2,027 3.52 1,148 1,225 3.05 995 1,737 117 1,535 40 1,54
Slide 30: Strong balance sheet
Strong balance sheet Balance Sheet Dec 31, 2018 vs. Sep 30, 2018 Highlights EUR bn 37.0 37.0 Assets 35.8 35.8 Acquisition of Shell’s Upstream business in New Zealand impacting balance sheet, especially increase Stockholders’ equity 11.9 in tangible and intangible assets and provisions 11.5 Tangibl
Slide 31: Sensitivities of OMV Group in 2019
Sensitivities of OMV Group in 2019 Annual impact 1 Clean CCS Operating Operating cash flow in EUR mn Result Brent oil price (USD +1/bbl) +60 +30 OMV invoiced gas price (EUR +1/MWh) +150 +105 CEGH/NCG gas price 3 (EUR +1/MWh) +50 +25 OMV indicator refining margin (USD +1/bbl) 2 +105 +80 Ethylene/prop