Bp Plc · LSE:BP.
Bp — Q1 2022 Earnings Presentation
38 slides from Bp's earnings presentation, May 3, 2022
Slide 1: bp first quarter 2022 financial results
bp first quarter 2022 financial results 3 May 2022
Slide 2: Welcome and introductions
svp investor relations 1Q 2022 financial results Good morning everyone and welcome to bp’s first quarter 2022 results presentation. I’m here today with Bernard Looney, chief executive officer and Murray Auchincloss, chief financial officer. Before we begin today, let me draw your attention to our ca
Slide 3: Cautionary statement
Cautionary statement In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, bp is providing the following cautionary statement: The discussion in this results announcement
Slide 4: Chief executive officer
Chief executive officer 1Q 2022 financial results Thanks Craig. Hello everyone and thanks for joining us. 4
Slide 5: Reporting against the backdrop of Russia's attack on Ukraine
1Q 2022 financial results 5 As everyone is aware, we are reporting today against the backdrop of Russia’s attack on Ukraine and the terrible consequences it is having for people in the country and the region. At bp we have been supporting the humanitarian response through a financial contribution to
Slide 6: Decision to exit Rosneft shareholding
1Q 2022 financial results 6 On 27 February we took the decision to exit our 19.75% shareholding in Rosneft. In addition, we plan to exit all our other businesses in Russia. The board undertook a thorough process, concluding that Russia’s military action represented a fundamental change and that bp’s
Slide 7: Focused on delivering our IEC strategy
Focused on delivering our IEC strategy Resilient hydrocarbons Convenience and mobility Low carbon energy 1.45GW bp net ScotWind 250MW gross green hydrogen* lease option award to Rotterdam Refinery UK Powering Scotland's energy transition Advancing H2-Fifty project plan JV with Aberdeen City Council
Slide 8: Progress in convenience and mobility and low carbon energy
our Lingen refinery. In convenience and mobility we are making rapid progress executing our strategy. Here we have: − advanced our EV charging strategy - launching a strategic partnership with Volkswagen Group to roll-out an EV fast charging network in Europe and the UK, and announcing plans to inve
Slide 9: Chief financial officer
Chief financial officer 1Q 2022 financial results Thanks Bernard and good morning everyone. 8
Slide 10: A volatile macro environment
A volatile macro environment Oil price1 $/bbl Natural gas price1 $/mmbtu Refining marker margin* 1 $/bbl Brent Henry Hub JKM NBP RMM* 150 100 50 130 80 40 110 60 30 90 40 20 70 20 50 0 10 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Source:
Slide 11: Accounting impact of bp's exit from its businesses in Russia
Accounting impact of bp’s exit from its businesses in Russia ▪ Exit Rosneft shareholding and other ▪ Rosneft no longer equity accounted – ▪ $24.0bn net pre-tax charge for Rosneft businesses in Russia now reported as a financial asset shareholding: measured at fair value ▪ bp’s two nominated director
Slide 12: Reduction in equity and underlying tax rate
billion and a total reduction in equity of $14.7 billion in the first quarter. As disclosed in bp’s 2021 annual report, the exclusion of bp’s share of Rosneft net income from bp’s underlying result has increased our expected underlying effective tax rate for 2022 to around 40%. 10
Slide 13: EBITDA targets and aims restated to exclude Russia businesses
EBITDA targets and aims restated to exclude Russia businesses 2H19/1H20 2021 2025 2030 aims $51/bbl $71/bbl $66/bbl¹ $73/bbl¹ Resilient hydrocarbons2 23.6 30.6 ~31 28-33 Convenience and mobility2 4.0 4.4 ~7 9-10 Low carbon energy Growth phase 2-3 Group EBITDA*2, 3 27.3 34.4 ~38 39-46 Group EBITDA*3
Slide 14: Underlying results
Underlying results $bn 1Q21 4Q21 1Q22 Underlying RCPBIT* 4.7 7.0 10.2 1Q 2022 vs 4Q 2021 Gas & low carbon energy 2.3 2.2 3.6 Oil production & operations 1.6 4.0 4.7 ▪ Exceptional trading result Customers & products 0.7 0.6 2.2 Other businesses and corporate1 0.2 0.2 (0.3) Of which ▪ Higher oil reali
Slide 15: Cash flow and balance sheet
Cash flow and balance sheet 1Q22 highlights 1Q22 cash inflows/outflows $bn ▪ $8.2bn operating cash flow* including 10 ▪ $4.1bn working capital*1 build Disposal proceeds* 8 ▪ $4.1bn surplus cash flow* ▪ $1.6bn share buyback 6 Share buybacks ▪ $1.1bn of $1.5bn announced with 4Q21 results – Cash divide
Slide 16: Continued discipline in executing the financial frame
Continued discipline in executing the financial frame 5.46¢ 40% $14-15bn 60% per ordinary share for 1Q22 2022 surplus cash flow* 2022 capital expenditure* 2022 surplus cash flow*1,2 Capacity for annual increase of the Intend to allocate 40% 2022 2023-2025: $14-16bn Commitment to allocate ≥60% divide
Slide 17: Chief executive officer
Chief executive officer 1Q 2022 financial results Thanks Murray. 15
Slide 18: Our investor proposition
Our investor proposition Growing value and returns ▪ 7-9% adjusted EBIDA*1 per share CAGR*2 Profitable ▪ Growing ROACE* to 12-14%3 growth Compelling cash distributions Sustainable ▪ Resilient dividend4, ~4% p.a. value growth Committed Investing in transition; ▪ ≥60% surplus cash flow* as distributio
Slide 19: 1Q 2022 financial results
1Q 2022 financial results 17
Slide 20: 1Q 2022 financial results
1Q 2022 financial results 18
Slide 21: Guidance
Guidance Full year 2022 2Q22 vs 1Q22 Capital expenditure* $14-15bn ▪ Expect second-quarter 2022 underlying upstream production to be lower than DD&A Similar level to 2021 first-quarter 2022, primarily in gas & low carbon energy, reflecting base decline and seasonal maintenance. On a reported basis,
Slide 22: Gas and low carbon energy
Gas and low carbon energy 1Q21 4Q21 1Q22 Underlying RCPBIT* $bn Production volume 4.0 3.6 Liquids (mbd) 112 122 121 Natural gas (mmcfd) 4,623 4,941 4,897 3.0 2.3 2.2 Total hydrocarbons (mboed) 909 974 966 1.8 Average realisations* 2.0 1.2 Liquids ($/bbl) 55.38 71.63 86.09 1.0 Natural gas ($/mcf) 3.9
Slide 23: Gas and low carbon energy: renewables pipeline
Gas and low carbon energy Developed renewables to FID* and Renewables pipeline* Renewables hopper* renewables pipeline* bp net, GW by technology bp net bp net Solar Offshore wind 0.2 7.0 21% 1.4 29.21 16.3 active projects 79% 4.4 Developed Americas Asia Europe Other Developed to FID* Pacific + pipel
Slide 24: Oil production and operations
Oil production and operations 1Q21 4Q21 1Q22 Underlying RCPBIT* $bn Production volume1 5.0 4.7 Liquids (mbd) 997 1,004 948 4.0 4.0 Natural gas (mmcfd) 1,810 2,053 1,964 Total hydrocarbons (mboed) 1,309 1,358 1,286 3.0 2.5 2.2 Average realisations* 2.0 1.6 Liquids ($/bbl) 52.92 71.07 83.47 Natural ga
Slide 25: Customers and products
Customers and products 1Q21 4Q21 1Q22 Underlying RCPBIT* $bn Customers – convenience & mobility Customers - convenience & mobility Products - refining & trading Total Customers – convenience & mobility 1.0 1.0 0.8 adjusted EBITDA* 3.0 2.2 Castrol1 adjusted EBITDA* 0.4 0.2 0.3 2.0 Capital expenditure
Slide 26: Aiming for EBITDA growth to 2030
Aiming for EBITDA growth to 2030 ▪ Oil and gas ▪ Retail fuels ▪ Refining ▪ Castrol, aviation, B2B/midstream ▪ Convenience ▪ Renewables ▪ Bioenergy from transition ▪ EV charging ▪ Hydrogen* growth businesses Integration All numbers represent 2030 aims, at $60/bbl Brent (2020, real) and bp planning as
Slide 27: Increasing exposure to transition growth businesses
Increasing exposure to transition growth businesses Capital expenditure* % Capital employed*1,2 % EBITDA* $bn 50% 10 40% 30% 5 20% 10% 0% 0 2021 2025 2030 aims ▪ Bioenergy ▪ Convenience ▪ EV charging ▪ Renewables ▪ Hydrogen* (1) Excludes goodwill and cash and cash equivalent (2) Excludes Rosneft and
Slide 28: Disciplined investment allocation
Disciplined investment allocation Capital expenditure* (including inorganics) $bn 20211 2022 2023-25 2026-30 Resilient hydrocarbons 9.1 ~9 9-10 ~8 Convenience and mobility 1.6 2-3 2-3 2-3 Low carbon energy 1.6 ~2.5 3-5 4-6 Group capital expenditure* 2 12.8 14-15 14-16 14-16 (1) Capital expenditure r
Slide 29: Resilient hydrocarbons – aim to sustain EBITDA to 2030
Resilient hydrocarbons – aim to sustain EBITDA to 2030 2019 2021 2025 2030 aims Resilient hydrocarbons EBITDA*1,2 $bn EBITDA*1,2 ($bn) 29.7 30.6 ~31 28-33 Capital expenditure*2,3 ($bn) 17.2 9.1 9-10 ~8 Oil and gas production2 2.6 2.2 ~2 ~1.5 (mmboed) Unit production costs* ($/boe) ~7 ~7 ~6 ~6 Refini
Slide 30: Convenience and mobility – aim to double EBITDA by 2030
Convenience and mobility – aim to double EBITDA to $9-10bn by 2030 2019 2021 2025 2030 aims Convenience and mobility EBITDA* $bn EBITDA* ($bn) 4.9 4.4 ~7 9-10 Capital expenditure*¹ ($bn) 1.5 1.6 2-3 Customer touchpoints per >10 >12 >15 >20 day (million) COVID bp retail sites in recovery growth marke
Slide 31: Low carbon energy – aim to grow EBITDA to $2-3bn by 2030
Low carbon energy – aim to grow EBITDA to $2-3bn by 2030 2019 2021 2025 2030 aims Renewables pipeline* growth bp net, GW 23 EBITDA* ($bn) Growth phase 2-3 Capital expenditure* ($bn) 0 1.6 3-5 4-6 11 Developed renewables to FID* 2.6 4.4 20 50 (GW) 6 Low carbon hydrogen* in core Growth phase 10 market
Slide 32: Reconciling strategic themes and reporting segments
Reconciling strategic themes and reporting segments Reporting segment Oil production & Customers & products Gas & low carbon energy1 Other businesses operations & corporate Resilient ▪ Oil production ▪ Refining and products ▪ Gas production hydrocarbons ▪ Bioenergy2 ▪ Gas marketing and trading Conve
Slide 33: 1Q 2022 financial results
1Q 2022 financial results 31
Slide 34: Glossary – definitions
Glossary – definitions Adjusting items Include gains and losses on the sale of businesses and fixed assets, EBIDA / adjusted Defined as profit or loss for the period, adjusting for finance costs and net impairments, environmental and other provisions, restructuring, integration EBIDA finance expense
Slide 35: Glossary – definitions
Glossary – definitions Net debt Calculated as finance debt, as shown in the balance sheet, plus the fair value Refining marker Average of regional indicator margins weighted for bp’s crude refining of associated derivative financial instruments that are used to hedge foreign margin (RMM) capacity in
Slide 36: Glossary – definitions
Glossary – definitions ROACE Defined as underlying replacement cost profit, which is defined as profit or Underlying Calculated by dividing taxation on an underlying replacement cost (RC) basis loss attributable to bp shareholders adjusted for inventory holding gains and effective by underlying RC p
Slide 37: Glossary – definitions
Glossary – definitions Working capital Movements in inventories and other current and non-current assets and liabilities as reported in the condensed group cash flow statement. Change in working capital adjusted for inventory holding gains/losses and fair value accounting effects is a non-GAAP measu
Slide 38: Glossary - abbreviations
Glossary - abbreviations Barrel (bbl) 159 litres, 42 US gallons. boe Barrels of oil equivalent. GW Gigawatt. mbd Thousand barrels per day. mmbd Million barrels per day. mboed Thousand barrels of oil equivalent per day. mmboed Million barrels of oil equivalent per day. MW Megawatt. mmbtu Million Brit