Bp Plc · LSE:BP.
Bp — Q4 2023 Earnings Presentation
37 slides from Bp's earnings presentation, Feb 6, 2024
Slide 1: Full-year and 4Q 2023 financial results
Full-year and 4Q 2023 financial results 4Q 2023 financial results
Slide 2: Craig Marshall, SVP investor relations
Craig Marshall SVP investor relations Good morning, everyone and welcome to bp’s fourth quarter and full year 2023 results presentation. I’m delighted to be here today with our newly appointed chief executive officer and chief financial officer – Murray Auchincloss and Kate Thomson. Before we begin
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 presentation
Slide 4: Murray Auchincloss, Chief executive officer
Murray Auchincloss Chief executive officer 4
Slide 5: From IOC to IEC
4Q 2023 financial results 5 Hello everyone, thanks for joining today. We’ve done this before… …but it is the first set of results where I have the privilege to talk to you as CEO of bp. This is a great company with great people. And it’s an honour to lead it. Our destination is unchanged. IOC to IEC
Slide 6: Three value chains with lower emissions
with lower emissions. Over 60 years ago we started to create the second value chain – natural gas fields, linked to domestic pipeline systems and eventually liquefaction plants. We’re now introducing biogas, carbon sequestration and lower carbon electricity to the customer. Why – because we can deli
Slide 7: Safety and focus on value and returns
We’re making good progress but there is always more we can do. Delivering safety is very important to me and its very personal. Four generations of my family have worked in the sector, my great grandfather died in an industrial accident and I can remember my father teaching me about the dangers of H
Slide 8: Simpler, more focused, higher value company
And finally, you can expect to see us continuing to make full use of our creative commercial muscle to optimise how we invest and create value – with Akerbp and Lightsource bp providing excellent examples for the future. So to sum up… The destination is unchanged – but we are going to deliver as a s
Slide 9: 2023 – A year of delivery
2023 – A year of delivery Resilient operational and financial performance ▪ $43.7bn EBITDA* ▪ $32.0bn operating cash flow* ▪ $20.9bn net debt* ▪ 18.1% ROACE* Executing our strategy with discipline ▪ Started-up four oil and gas major projects* ▪ Acquisition of TravelCenters of America ▪ Agreement to
Slide 10: 2023 – Strong operations and strategic momentum
2023 – Strong operations and strategic momentum bpx Managed Exploration Unit production production base decline access costs* +13% ~ 4% 44blocks <$6/boe 2018-23 average GoM, Canada, 5% lower unit Upstream Major LNG Future proofing Brazil, Trinidad production cost YoY production projects* portfolio T
Slide 11: Transition growth engines progress
gas assets by the end of 2023, a very important milestone. Turning to our transition growth engines. In Bioenergy, we increased: − Our biofuels production by 18% year-on-year and − Biogas supply volumes by 80% year-on-year reflecting the uplift from Archaea. In Convenience, we delivered over 60% gro
Slide 12: Kate Thomson, Chief financial officer
Kate Thomson Chief financial officer 8
Slide 13: 4Q23 Underlying results
4Q23 Underlying results $bn 4Q22 3Q23 4Q23 4Q 2023 vs 3Q 2023 Brent ($/bbl) 88.9 86.8 84.3 Henry Hub ($/mmbtu) 6.3 2.5 2.9 ▪ A strong gas marketing and trading result NBP (p/therm) 166.5 82.0 98.7 RMM ($/bbl) 32.2 31.8 18.5 ▪ Higher oil and gas realisations* * Underlying RCPBIT 9.3 6.1 6.1 Gas & low
Slide 14: Segment results commentary
marketing volumes as well as higher costs in support of our transition growth engines. - In products, the underlying loss was $80 million compared to $1.4 billion underlying profit in the third quarter. The result reflects significantly lower industry refining margins, albeit with a smaller decrease
Slide 15: 4Q23 Cash flow and balance sheet
4Q23 Cash flow and balance sheet $bn 4Q22 3Q23 4Q23 Shareholder distributions IFRS operating cash flow* 13.6 8.7 9.4 ▪ 10% dividend per share growth Working capital (build)/release *1 4.2 2.0 2.1 since 4Q22 to 7.270 cents per Capital expenditure* (7.4) (3.6) (4.7) ordinary share Divestment and other
Slide 16: Our financial frame to 2025
Our financial frame to 2025 Resilient Strong investment Disciplined investment Share dividend grade credit rating allocation buybacks 7. 270¢ ‘A’ range ~$ 1 6 bn $ 3.5 bn per ordinary share for 4Q23 credit metrics through cycle 2024-25 p.a. capital expenditure* 1H242 Resilient $40/bbl cash balance p
Slide 17: Share buybacks and surplus cash flow commitment
announced today for the fourth quarter of 2023. Over 2024-25, and subject to maintaining a strong investment grade credit rating, our expectation assuming current market conditions, is to announce at least $14 billion of share buybacks in total. And on a point forward basis, we are now committed to
Slide 18: Guidance
Guidance Full year 20241 1Q24 vs 4Q231 Reported and underlying * Slightly higher than 2023, of which OPO higher and Reported upstream production upstream production GLCE lower ▪ expected to be higher Growth from convenience, including TravelCenters of America; stronger Castrol, bp pulse margin growt
Slide 19: Murray Auchincloss, Chief executive officer
Murray Auchincloss Chief executive officer 13
Slide 20: Drive to 2025 – delivering $46-49bn EBITDA
Drive to 2025 – delivering $46-49bn EBITDA 1 >2x biofuels Start-up 6 oil and bpx – deliver 2 central co-processing volumes gas major projects* processing facilities and grow biogas supply Integrate TravelCenters Expand LNG supply of America and grow to 25mtpa EV charging energy sales Maintain base E
Slide 21: 2025 targets in convenience, EV charging and hydrogen
to start-up between 15 to 20 new plants per year through 2025. − In Convenience and EV Charging, we plan to deliver EBITDA of more than $1.5 billion in 2025. − In convenience, − We are focused on the roll-out of strategic convenience sites supported by customer offers, strategic partnerships and dig
Slide 22: Growing the value of bp
Growing the value of bp Focus on six priorities... 1 2 3 4 5 6 Improve Drive Deliver next Deliver Optimise Grow safety focus efficiency growth wave of ROACE shareholder returns and reduce into the projects emissions business Actively managing Technology and global Progress to sanction >18% return on
Slide 23: Closing remarks and shareholder returns
shareholders through share buybacks. We know exactly what we need to do. And some of the key measures are up on the slide. You can monitor our progress quarter to quarter as we drive to 2025. In conclusion, we are investing in today’s oil and gas system and building out tomorrow’s… all in service of
Slide 24: Appendix
Appendix 4Q 2023 financial results 16
Slide 25: Financial summary – full year 2023
Financial summary – full year 2023 (1) Adjusted for inventory holding gains or losses*, fair value accounting effects* and other adjusting items (2) Includes share buybacks to offset the expected full-year dilution from the vesting of awards under employee share schemes. In 2022, bp completed $500m
Slide 26: Gas and low carbon energy
Gas and low carbon energy 4Q22 3Q23 4Q23 Underlying RCPBIT* $bn Production volume 4.0 Liquids (mbd) 121 106 99 3.5 3.1 Natural gas (mmcfd) 4,844 4,875 4,637 3.0 Total hydrocarbons (mboed) 956 946 899 2.2 Average realisations* 2.0 1.8 Liquids ($/bbl) 80.50 76.69 78.87 1.3 9.40 5.38 6.18 1.0 Natural g
Slide 27: Oil production and operations
Oil production and operations 4Q22 3Q23 4Q23 Underlying RCPBIT* $bn Production volume 5.0 4.4 Liquids (mbd) 966 1,011 1,024 4.0 Natural gas (mmcfd) 1,989 2,155 2,305 3.5 3.3 3.1 Total hydrocarbons (mboed) 1,309 1,382 1,421 3.0 2.8 Average realisations* 2.0 Liquids ($/bbl) 80.43 71.10 76.22 Natural g
Slide 28: Customers and products
Customers and products 4Q22 3Q23 4Q23 Underlying RCPBIT* $bn Customers – convenience & mobility Customers - convenience & mobility Products - refining & trading Total Customers – convenience & mobility 1.0 1.2 1.3 adjusted EBITDA* 3.5 2.8 Castrol1 adjusted EBITDA 0.1 0.2 0.3 2.5 2.1 0.7 0.4 0.8 1.9
Slide 29: Transition growth engines – full year 2023
Transition growth engines – full year 2023 Capex* EBITDA* $bn FY23 FY23 2025 target 2030 aim Bioenergy 0.7 0.5 ~2 >4 Convenience 1.31 0.8 >1.5 >4 EV charging 0.5 (0.3) Hydrogen 0.2 (0.3) — 2-3 Renewables & power 1.1 0.4 Total transition growth engines* 3.8 1.0 3-4 10-12 2 (1) Includes share of Trave
Slide 30: Momentum in our strategic delivery
Momentum in our strategic delivery 2019 2022 2023 2025 target Oil and gas production 2.6 2.3 2.3 ~2.3 Resilient (mmboed) ~3.8 incl. Russia production hydrocarbons Biofuels production (mbd) 23 27 32 ~50 Biogas supply volumes* 10 12 22 ~40 (mboed) Excl. Archaea Energy Incl. Archaea Energy LNG portfoli
Slide 31: Strategic progress – last 12 months
Strategic progress – last 12 months Resilient hydrocarbons Convenience and mobility Low carbon energy Scaling-up our bioenergy business Strategic convenience partnership Renewables pipeline* growth • Official start-up of Archaea Energy’s original Archaea Modular Design RNG • Extended convenience par
Slide 32: Glossary – abbreviations
Glossary – abbreviations Barrel (bbl) 159 litres, 42 US gallons. mboed Thousand barrels of oil equivalent per day. bcm Billion cubic meters. mmboed Million barrels of oil equivalent per day. boe Barrels of oil equivalent. mmbtu Million British thermal units. CCS Carbon, capture and storage. mmcfd Mi
Slide 33: Glossary
Glossary Adjusting items Include gains and losses on the sale of businesses and fixed assets, Convenience It is calculated as RC profit before interest and tax for the customers & impairments, environmental and other provisions, restructuring, integration gross margin products segment, excluding RC
Slide 34: Glossary
Glossary Fair value Difference between the way bp manages the economic exposure and Rapid/rapid Includes electric vehicle charging of ≥50kW accounting internally measures performance of certain activities and the way those charging effects activities are measured under IFRS. Realisations Result of d
Slide 35: Glossary
Glossary Retail sites Include sites operated by dealers, jobbers, franchisees or brand licensees Surplus cash flow Refers to the net surplus of sources of cash over uses of cash, after or JV partners, under the bp brand. These may move to and from the bp reaching the $35 billion net debt target. Sou
Slide 36: Glossary
Glossary Underlying 2023 underlying production, when compared with 2022, is production after Working capital Movements in inventories and other current and non-current assets and production adjusting for acquisitions and divestments, curtailments, and entitlement liabilities as reported in the conde
Slide 37: Resources
Resources bp's website includes information Useful links Investor events about our financial performance, reports and information on investing Why invest in bp 7 May 2024 First quarter results in bp, dividend payments, AGM and strategy events. Modelling guidance 30 July 2024 Second quarter results D