Slide 1: Investor Update 2018
Investor Update 2018 2016 – 2020 Value & Resilience May © 2018
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2018 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
2016-2020 Value & Resilience 1. Company overview 2. 2017 results and strategic delivery 3. Upstream update 4. Downstream update 5. Financing 6. 2018 objectives and strategic update 7. Annex – databook 3 © 3
Slide 4: Company overview
Company overview 1 4 © 4
Slide 5: Through the value chain and across the globe
Through the value chain and across the globe Company overview Our shareholders (2) 9.5% Core businesses: Caixabank S.A. Upstream and 7.9% Sacyr Vallehermoso, S.A. Downstream 4.0% Temasek ~700 kboepd Free Float production 78.6% ~2.4 billion boe ~1 Million bpd refining proved reserves (1) capacity © (
Slide 6: 2016 to 2020: Value and Resilience
2016 to 2020: Value and Resilience Company overview Challenge: a volatile, uncertain and complex environment Strategic Plan 2016-2020 Long term value capture Portfolio Value • Keep financial and operating Management discipline: synergies and efficiencies • Shift from growth to value • Capex flexibil
Slide 7: Upstream: 3 core regions in the portfolio
Upstream: 3 core regions in the portfolio Company overview North America: Growth Unconventional portfolio, operatorship and valuable midstream positions SouthEast Asia: FCF & Growth 174 Kboe/d Self-financed growth, relationship with 72% governments/NOCs 85 Kboe/d 79% 70% Latin America: FCF 27% / 55%
Slide 8: Downstream: Sustainable cash flow generator
Downstream: Sustainable cash flow generator DOWNSTREAM Company overview Refining Petrochemicals ̴1 million barrels of CORUÑA All three sites are refining capacity per BILBAO managed as a single day. petrochemical hub TARRAGONA Top quartile position among Chemical sites and crackers European
Slide 9: Gas Natural Fenosa – divestment at february 2018
Gas Natural Fenosa – divestment at february 2018 Company overview 20% stake sold – Value crystalized €3.8Bn proceeds Premium to market price at 19€/share 8.7x EV/EBITDA 2017 Above comparable trading multiples Around 400 M€ of capital gains Guidelines for redeployment of capital Aim to build a higher
Slide 10: 2017 Strategic Delivery & Q1 Results
2017 Strategic Delivery & Q1 18 Results 2 ©
Slide 11: Operational highlights Q1 2018
Operational highlights Q1 2018 2017 Strategic Delivery & Q1 18 Results Upstream Production: Exploration program: 1Q18 = 727 Kboe/d 33Kboe/d increase QoQ 6 exploratory wells completed (1 positive) New barrels/ramp up in: Algeria, Trinidad & Tobago, UK, New exploration acreage acquired in: M
Slide 12: Key messages Q1 2018
Key messages Q1 2018 2017 Strategic Delivery & Q1 18 Results Main variables & company targets USD/Bbl 66.8 USD/MBtu 3.5 59.0 3.0 2018 Budget Q1 18 2018 Budget Q1 18 Brent Henry Hub USD/€ 1.23 Bn€ 1.16 3.4 FY 0.6 2018 Budget Q1 18 2018 Budget Q1 18 (1) Exchange rate Capex © (1) Capex is equivalent to
Slide 13: Key messages Q1 2018
Key messages Q1 2018 2017 Strategic Delivery & Q1 18 Results Main variables & company targets Bn€ ~7.0 Bn€ ~4.0 FY FY ~3.0 FY 1.8 1.1 0.7 2018 Budget Q1 18 2018 Budget Q1 18 2018 Budget Q1 18 Upstream Downstream EBITDA CCS EBITDA CCS Breakdown Kboe/d USD/Bbl 727 ~6.8 >700 6.6 2018 Budget Q1 18 2018
Slide 14: 2017 Results: 1.9 Bn€ of Net Debt reduction
2017 Results : 1.9 Bn€ of Net Debt reduction at 54 USD/Bbl 2017 Strategic Delivery & Results 2015 2016 2017 Net Debt (M€) 11.9 8.1 6.3 ND/EBITDA (X) 2.7 1.6 0.9 Bn€ (3.0) 5.5 (0.5) (0.3) 0.2 1.9 Operating Financial Dividends & Reduction Capex other equity Others (2) Cash Flow (1) expenses instrument
Slide 15: Delivery on strategic commitments
Delivery on strategic commitments 2017 Strategic Delivery & Results COMMITMENT 2016 & 2017 DELIVERY Synergies 0.3Bn€ impact in 2018 In 2017 0.4Bn€ already achieved Efficiencies (Opex & Capex) IMPLEMENTATION 0.8Bn€ in 2016; 1.8B€ in 2018 2016: 1.3Bn€; 2017 2.0Bn€ Capex flexibility ̴3.9Bn€ average per
Slide 16: Upstream update
Upstream update 3 © 16
Slide 17: 2017 Upstream Results
2017 Upstream Results Upstream Operational data & Results 18.3 33% 2015 2016 2017 1P Reserves (Mboe) 2,373 2,382 2,355 12.3 Production (Kboed) 559 690 695 1.6 2.1 3.5 (1) RRR 3 year average (%) 123 2015 2016 2017 EBITDA (Bn€) Opex (USD/Boe) 2017 Projects - Delivered Flyndre Red Emperor Angelin Kinab
Slide 18: Assets & Projects
Assets & Projects Upstream // Exploration // Contingent resources AMERICA NORTH Duvernay Marcellus Eagle Ford GoM/Shenzi GoM/Buckskin (Canada) (USA) (USA) (USA) (USA) • Unconventional North America WI: ~31% in basin • Brazil: Campos-33, Sagitario WI: 100% WI: ~89% and 37% in JV WI: 28% WI: 22.5% • C
Slide 19: ACDC+1 - Alaska
ACDC + 1 - Alaska Upstream update Location map Main data Pikka Unit Limits Project Alaska Appraisal Area Armstrong Op.(51%) Repsol (49%) Country USA *Oil Search Op. (25.5%) Armstrong (25.5%) ConocoPhillips 2018 Nanushuk wells Operator Armstrong Working Interest (Pikka) 49% Working Interest (Horsesho
Slide 20: ACDC+1 - Akacias
ACDC + 1 - Akacias Upstream update Location map Main data Project Akacias (CPO9) Country Colombia Operator Ecopetrol Working Interest 45% FID (1st/2nd stage) (1) 1Q18/1Q19 First Oil / First Gas Producing Gross plateau production (Kboed) ~50 (1) FID: Final Investment Decision. Dates estimated Onsho
Slide 21: ACDC+1 - Duvernay
ACDC + 1 - Duvernay Upstream update Location map Main data Project Duvernay Country Canada Operator Repsol Working Interest 100% Acreage >300 Kacres Final Investment Decision Staged 2019/20 First Oil / First Gas Producing Gross peak production (Kboed) ~100 Operated liquid-rich unconventional asset
Slide 22: ACDC+1 – Campos 33
ACDC + 1 – Campos 33 Upstream update Location map Main data Project Campos-33 Country Brazil Operator Statoil Working Interest 21% Final Investment Decision ~2020 First Oil / First Gas ~2024 Contingent resources (Mboe) ~1,200 Gross plateau production (Kboed) ~210 Giant gas/condensate ultra-deep wa
Slide 23: ACDC+1 – Sagitario
ACDC + 1 – Sagitario Upstream update Location map Main data Project Sagitario (BM-S-50) Country Brazil Operator Petrobras Working Interest 12% Contingent resources (Mboe) - Sagitario Discovery announced in 2014 located in ultra-deep waters of the Santos Basin pre-salt. The test revealed carbonate
Slide 24: Strategic Context
Strategic Context Upstream update Volumes CAPEX (2) Organic portfolio potential Bn€ Kboe/d 2.5-3.0 2.4 2.1 (1) 690 695 750 2016 2017 2018-2020 (3) 2016 2017 2020 Hurdle rate new projects: NPV = 0 with Brent < 50 USD/Bbl Reserve Replacement Ratio Production 16-20: 3 Regions & 3 play types Onshore cor
Slide 25: Downstream update
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Slide 26: 2017 Downstream Results
2017 Downstream Results Downstream update Indicator Refining Margin & Brent Utilization: Distillation and conversion Distillation Conversion 52.4 54.2 43.7 2017 93.6% 104.4% 8.5 6.8 6.3 2016 88.0% 102.9% 2015 2016 2017 2015 88.9% 103.7% RMI (USD/Bbl) Brent (USD/Bbl) (1) EBITDA & CAPEX FCF & Divestme
Slide 27: 2005-2017 European Integrated Margin of R&M
2005-2017 European Integrated Margin of R&M Downstream update USD/Bbl 15 Golden age of Refining Cartagena & Bilbao Upgrades >100 USD/Bbl Brent Silver age of Refining 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -5 -10 Repsol position Industry peer group minimum and maximum
Slide 28: Refining: top quartile position among European peers
Refining : top quartile position among European peers Downstream update (1) 5 refineries optimized as a single system Top quartile position among European peers CORUÑA BILBAO Product Yield % FCC Equivalent 100% TARRAGONA Diesel/Gasoil 40-45% 1Q 2Q 3Q 4Q Gasoline 10-15% 80% Naphta 10-12% 60% Kerosene
Slide 29: Chemicals
Chemicals Downstream update Iberian Peninsula petrochemical sites Dynasol Joint Venture Panjin, China Santander, Spain Alava, Spain Tarragona Houston, USA Altamira, Production capacity (Thousand tons) Mexico Madrid, Spain Base petrochemicals 2.603 Nanjing, China Puertollano Ethylene 1.214 Mexico Cit
Slide 30: Marketing: retail distribution
Marketing: retail distribution Downstream update Spain Portugal Peru Italy Mexico Number 3.445 464 490 310 New market opportunites Market Share 31% 16% 22% 2% Service Stations More than 200 scientists and researchers are responsible for designing and producing our lubricants at the Repsol Technolo
Slide 31: Financing
Financing 5 ©
Slide 32: Net debt evolution
Net debt evolution Financing (Billion €) (X) 14 3.0 2.7 12 10 2.0 1.6 8 47% 6 11.9 0.9 1.0 4 8.1 6.3 2 0 0.0 2015 2016 2017 Net debt (Bn€) Net Debt/EBITDA (X) Net Debt reduction © 32
Slide 33: Strong liquidity position
Strong liquidity position Financing (Billion €) 14 12 11.5 10 9.1 9.1 8.5 Term deposits w/ immed.availab. (**) 8 7.4 0.2 Operating committed 0.4 Credit Lines Structural committed 6 2.1 5.4 Credit Lines 4.0 4 Cash & Equivalents 4.8 2 4.0 2.0 2.4 1.4 1.1 0.6 0.1 0 Liquidity as of 2018(*) 2019 2020 202
Slide 34: Industry Context 2018 Outlook
Industry Context 2018 Outlook 6 © 34
Slide 35: Outlook for 2018
Outlook for 2018 2018 Outlook & Strategic update Our assumptions (1) 2017 2018B 2017 2018B Brent price ($/Bbl) 54.2 59.0 Refining Margin ($/Bbl) 6.8 ̴ 6.8 HH ($/MBtu) 3.1 3.5 Exchange rate ($/€) 1.13 1.16 Guidance 2017 2018B 2017 2018B (2) Production (KBoepd) 695 >700 FCF Breakeven ($/Bbl) <40 ̴ 40
Slide 36: Annex – databook
Annex – databook 7 ©
Slide 37: Historic data book
Historic data book Environment and Repsol Group MACRO ENVIRONMENT International References Unit 2015 2016 2017 Spreads vs. Brent ($/bbl) 2015 2016 2017 Brent ($/Bbl) 52.4 43.7 54.2 Maya - Brent (13.8) (11.6) (9.7) WTI ($/Bbl) 48.8 43.5 50.9 Ural - Brent (0.5) (1.2) (0.9) Henry Hub ($/MBtu) 2.7 2.5 3
Slide 38: Historic data book
Historic data book Upstream Production Proven reserves Main figures (M€) 2015 2016 2017 Kboe/d Mboe Adjusted Net Income (925) 52 632 2015 2016 2017 2015 2016 2017 EBIT (1,107) (87) 1,009 Europe 29 52 51 51 62 59 Latin America 302 342 348 1.480 1.525 1.490 EBITDA 1,611 2,072 3,507 North America 139 1
Slide 39: Historic data book
Historic data book Downstream Downstream Assets Refining capacity Refining (kbbl/d) Converson index (%) Businesss Unit 2015 2016 2017 Spain 896 63 Refining Bilbao (Petronor) 220 63 Distillation utilization % 86.7 86.0 93.2 Tarragona 186 44 Spain % 88.9 88.0 93.6 Coruña 120 66 Peru % 67.6 68.9 89.8 P
Slide 40: Investor Update 2018
Investor Update 2018 2016 – 2020 Value & Resilience May © 2018