Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Q1 2018 Earnings Presentation
25 slides from Omv Petrom Sa's earnings presentation, 2018
Slide 1: Christina Verchere and Stefan Waldner, Q1/18 results
Christina Verchere Chief Executive Officer and President of the Executive Board Stefan Waldner Chief Financial Officer The spoken word applies. Check against delivery. 1
Slide 2: CEO introduction speech
Christina Verchere - OMV Petrom - CEO Slide 1 – Intro Good afternoon ladies and gentlemen, I am excited and honored to lead OMV Petrom and I am looking forward to playing my part in growing the company and enhancing its competitiveness. In my first few months, I will be getting out and meeting as ma
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Slide 4: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, constituting or forming part of, any actual offer to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares issued by the Company or any
Slide 5: Slide 2 – Legal Disclaimer
Slide 2 – Legal Disclaimer Thank you, Christina, and good afternoon to you all. Before I start the actual presentation, please let me draw your attention to our Legal Disclaimer, which you can read in detail on slide 2. 5
Slide 6: Key messages Q1/18
Key messages Q1/18 y \ Upstream: production 162 Free cash flow of RON 729 mn { kboe/d, -5% yoy; OPEX USD 11.89/boe, +13% yoy 4 fj A\ Clean CCS Operating Result at _ RY FICINISEES al Downstream Oil: refining A \ \ ( -__\ margins USD -1.0/bbI yoy; Je */ retail sales volumes +1% yoy #{ Clean CCS EPS up
Slide 7: Slide 3 – Key messages Q1/18
Slide 3 – Key messages Q1/18 Let me start with some key highlights for Q1/18 on slide 3. In this quarter, market conditions were supportive, with increased crude and natural gas prices. However, refining margins and electricity spark spreads declined. As a result, we generated an improved free cash
Slide 8: Economic environment
Economic environment Q4/17 GDP growth’: 6.9% yoy, Q1/18 CPI": 5% yoy ot >» Demand Q1/18 yoy: Fuels?: +1.8%; Gas*: stable; Power*: +3% > Offshore Law in approval process; expected new draft Royalty Law Qty Q2n7 O37 Q4i7 Qs > Updated gas royalties methodology "—+— Avg Urals price in USDibbI (left scal
Slide 9: Slide 4 – Economic environment
Slide 4 – Economic environment On slide 4, we provide some macroeconomic highlights for Romania and an overview of the pricing environment in our industry. Romania had another quarter of solid economic performance, with impressive GDP growth, although its sustainability is questionable given the rec
Slide 10: Commodity price and exchange rate commentary
In the chart on the upper right you can see the Urals price, shown in green, which in Q1/18 averaged USD 65/bbl, higher year-on-year by 25%. A similar trend can be seen for Brent, shown by the blue line, with an increase of 24% year-on-year. The price spread between Brent and Urals has increased in
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Slide 12: Operational KPIs
Operational KPls | upstream Downstream on] OPEX OMV Petrom Indicator Gas sales volumes (USD/boe) refining margin (USD/bb1) (TWh) 12.44 44.89 15.50 1052 10.42 10.23 13.41 14:20 1179 40.70 Qty QIMT ARNT AAMT AINR Qi7 27 Q317 47 aQ1ig Q147 QINT ART Qan7 AIMR Hydrocarbon production Retail sales volumes
Slide 13: Slide 5 – Operational KPIs
Slide 5 – Operational KPIs On slide 5, I would like to present to you some operational KPIs for each business segment. Let me start with Upstream. Although the total production costs in RON terms were lower in Q1/18, the average unit production cost in USD/boe increased compared to Q1/17. This incre
Slide 14: Cash Flow highlights
Cash Flow highlights Operating Cash Flow (RON bn) 2, 1.26 151 180 = UlULhCUSCUr Qiiy Q4i7 Qs Investing Cash Flow (net outflow, RON bn) (RON bn) Q1/18 OCF" up due to higher Operating Result Q1/18 NWC*: cash inflow RON 22 mn Q1/17 NWC*: cash outflow RON 176 mn Q1/18 CAPEX more than double yoy CFE foll
Slide 15: Slide 6 – Cash Flow highlights
Slide 6 – Cash Flow highlights On slide 6, I would like to start with the highlights of our cash flow statement. In Q1/18, we achieved an operating cash flow of about RON 1.8 billion, mainly on the back of a strong operating result. This, in turn, was supported by improved crude and petroleum produc
Slide 16: Income Statement highlights
Income Statement highlights Clean CCS Operating Result (RON bn) & 0.96 0.77 0.57 || Q1i7 Q4/17 Clean GCS Net Income" Q118 (RON bn) > 0.75 0.59 Q17 Q417 Net Income’ (RON bn) Q1i7 Q417 Q118 Q118 » Clean CCS Operating Result reflects: Market conditions (prices, demand) Strict cost discipline Lower expl
Slide 17: Slide 7 – Income Statement highlights
Slide 7 – Income Statement highlights On slide 7, I would like to discuss some highlights of the Income Statement, with a focus on Q1/18 versus Q1/17 developments. Sales increased by 5% year-on-year, supported by higher prices for petroleum products and natural gas and increased electricity sales vo
Slide 18: Upstream Clean Operating Result supported by higher realized prices
Upstream Clean Operating Result supported by higher realized prices Upstream Clean Operating Result Key drivers Q1/18 vs. Q1/17 (RON mn) a 646 > Higher realized oil prices, +27% |: ro s00 > Lower total production costs >» Lower exploration expenses | >» Negative FX development Q1N7 —Marketeffects Vo
Slide 19: Slide 8 – Upstream Clean Operating Result
Slide 8 – Upstream Clean Operating Result supported by higher realized prices Let me move on to slide 8, which shows the major building blocks for the development of the Upstream Clean Operating Result in Q1/18. With the realized oil price increasing by around 27% year-on-year to USD 57/bbl in Q1/18
Slide 20: Downstream Clean CCS Operating Result: operational performance offset market effects
Downstream Clean CCS Operating Result: operational performance offset market effects Downstream Clean CCS Operating Result Key drivers Q1/18 vs. Q1/17 (RON mn) att 321 rn » Improved power business oe | » Higher fuel sales following increased retail i _____| demand » Lower refining margins Qnty Marke
Slide 21: Slide 9 – Downstream Clean CCS Operating Result
Slide 9 – Downstream Clean CCS Operating Result: operational performance offset market effects Moving to slide 9, the Q1/18 Clean CCS Operating Result of Downstream increased by 3%, reflecting an improved operational performance that offset the negative market effects. In Downstream Oil, we had a lo
Slide 22: CAPEX and E&A
CAPEX and E&A Group CAPEX incl. capitalized E&A CAPEX incl. capitalized E&A (RON bn) >» Q1/18 at RON 0.8 bn: > 22 new wells and sidetracks drilled 37 > ~230 workovers performed » 2018E maintained at RON 3.7 bn: » Drilling >100 development wells and sidetracks ~1,000 workovers > |__| > Refinery turna
Slide 23: Slide 10 – CAPEX and E&A
Slide 10 – CAPEX and E&A Slide 10 provides an overview of CAPEX and E&A activities including an outlook for 2018. In Q1/18, our total CAPEX was around RON 0.8 billion. The majority was dedicated to Upstream. We continued our drilling activities, with eleven active rigs at the end of March. Thus, in
Slide 24: Outlook 2018
Outlook 2018 Brent oil price Refining margin Production FCF after dividends "Not includng portfolo optimization initatives ® 11 | owveetwom | aris Resuts 24 Actual 2017 USD 54/bbl USD 7.75/bbl 168 kboe/d RON 3.0 bn RON 2.7 bn OMV Petrom @® OMV Petrom
Slide 25: Slide 11 – Outlook 2018
Slide 11 – Outlook 2018 Let me finish my presentation with the outlook for the full year 2018, on slide 11. Here I would like to highlight our main market assumptions as well as the targets we have set for 2018 and how they compare to the actual 2017 figures. Throughout the first months of this year