Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Investor Day (February 2018)
36 slides from Omv Petrom Sa's investor day presentation, Feb 23, 2018
Slide 1: OMV Petrom 2017 Results and Strategy 2021+
Cover option 1: Insert a cover picture and align grouped text freely on page, (28pt) Place, xx. Month 2013 (16pt) OMV Petrom 2017 Results and Strategy 2021+ Romanian Investors and Analysts Event February 23, 2018
Slide 2: This page is left blank intentionally
This page is left blank intentionally 2 | OMV Petrom │ Romanian Investors and Analysts Event │ February 23, 2018
Slide 3: Agenda
Agenda 10:00 – 10:55 OMV Petrom Strategy 2021+ progress – Mariana Gheorghe 10:55 – 11:40 Q&A – all EB members 11:40 – 11:50 Break 11:50 – 12:35 OMV Petrom Q4 & FY 2017 results and Outlook 2018 – Stefan Waldner 12:35 – 13:20 Q&A – all EB members 13:20 – 14:30 Networking lunch 3 | OMV Petrom │ Romania
Slide 4: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, This presentation may contain forward-looking statements. These statements and should not be construed as, constituting or forming part of, any actual reflect the Company’s current knowledge and its expe
Slide 5: Strategy 2021+ - Mariana Gheorghe, CEO
Cover option 1: Insert a cover picture and align grouped text freely on page, (28pt) Place, xx. Month 2013 (16pt) OMV Petrom 2017 Results and Strategy 2021+ Romanian Investors and Analysts Event February 23, 2018 Mariana Gheorghe, CEO
Slide 6: Global trends shaping the future of energy
Global trends shaping the future of energy Technology and Structural changes Behavioral changes Digitalization Population growth Automation on a large scale Connected lifestyles Urbanization Big data analytics Convenience and immediacy Dynamic demand and in brand interaction supply changes Internet
Slide 7: OMV Petrom's strategic directions 2021+
OMV Petrom’s strategic directions 2021+ Attractive shareholder return Enhancing competitiveness Highest integration value Operational excellence Improved recovery Streamlined producing portfolio Sustainable Developing growth options access to 100% Reserves Replacement Rate energy Exploration portfol
Slide 8: First progress towards achieving strategic objectives
First progress towards achieving strategic objectives 2017 highlights Drilling campaign ramped-up Operational efficiency increased Enhancing competitiveness Costs optimized Portfolio streamlining initiated Strong performance and attractive return Development concept selected 9.8% Clean CCS ROACE for
Slide 9: Upstream: maximize economic recovery to realize the potential of our current assets
Upstream: maximize economic recovery to realize the potential of our current assets Highlights 2017 No. of drilled wells Drilling activities ramped-up, 14 drilling rigs being active +178% in December 2017 >100 Over 1,000 workover jobs performed in 2017 69 Field Development Totea Deep and FRD1 Lebada
Slide 10: Upstream: streamline producing asset portfolio to focus on most profitable barrels
Upstream: streamline producing asset portfolio to focus on most profitable barrels Footprint development Highlights 2017 (no. of fields) 5 commercial fields relinquished -35% Mazarine transaction finalized, 19 marginal fields 232 208 divested 150 New round of divestment initiated 2016 2017 2021 Unit
Slide 11: Upstream: continued operational excellence
Upstream: continued operational excellence Increased MTBF1 Modernized facilities Automated wells3 (days) (no. of modernized facilities2) (no. of automated wells) 4,950 5,200 750 4,800 626 640 4,300 555 360 400 340 300 2016 2017 2018 2021 2016 2017 2018 2021 2016 2017 2018 2021 Going forward Maintain
Slide 12: Downstream Oil: high level of performance
Downstream Oil: high level of performance Refining Going forward Continue to: Fuel storage network Utilization rate (%) Focus on operational excellence 2005 100 Improve refinery operations to international benchmarks 90 Maintain cost discipline 80 Perform the planned turnaround in 2018, scope dimens
Slide 13: Downstream Gas: consolidate leading position in Romanian gas market
Downstream Gas: consolidate leading position in Romanian gas market Stable gas sales (TWh) Capture the highest integrated Optimize business portfolio. gas and power value Focus on core activities 50 51 50 50 150 new end customers added to Dorobantu Wind park divested the portfolio with 1.6 TWh gas a
Slide 14: Upstream: Neptun Deep opportunity, the most important growth option
Upstream: Neptun Deep opportunity, the most important growth option OMV Petrom (50%), ExxonMobil (50%, Operator) First exploration drilling campaign in 2011 – 2012 Domino-1 well gas discovery: a play opener Two seismic acquisition campaigns: 2009; 2012 – 2013 Second exploration drilling campaign 201
Slide 15: Downstream Oil: growth and technological opportunities in refining
Downstream Oil: growth and technological opportunities in refining Polyfuel project Increase output of high-demand and high-value products Total investment estimated at approx. EUR 60 mn Construction started in 2017 Fully operational in 2019 Explore technological opportunities capitalizing on skills
Slide 16: Downstream Oil: enhance offer and customer experience in retail
Downstream Oil: enhance offer and customer experience in retail Secure strong positioning on the retail market by clearly differentiating two brands Increase throughput per filling Value for money station in Romania (mn l) High quality leader 4.9 5.0 >5 4.6 Diversification of the services offered We
Slide 17: Regional expansion to complement portfolio
Regional expansion to complement portfolio Leverage our local know-how Upstream Downstream Gas Transport capacities planned existing Capture synergies with existing operations Diversify sales channels for current production (subject to interconnectors’ development) ~80 mn boe reserves targeted from
Slide 18: 2021 Clear targets sustained by high investments
2021 Clear targets sustained by high investments CAPEX (EUR bn) FCF after dividends Clean CCS ROACE1, % (EUR mn) EUR ~5 bn cumulative 1.0 400 Positive for the majority of the period > 10% 2016 2017 2018 2021 2016 2017 2021 Strong net cash position supporting Neptun Deep and regional expansion invest
Slide 19: Success built on three core strategic enablers
Success built on three core strategic enablers People and Organizational Culture We are the energy Sustainability Respect the future Technology and Innovation Innovate for the future 19 | OMV Petrom │ Romanian Investors and Analysts Event │ February 23, 2018
Slide 20: OMV Petrom
GA OMV Petrom
Slide 21: Results - Stefan Waldner, CFO
Cover option 1: Insert a cover picture and align grouped text freely on page, (28pt) Place, xx. Month 2013 (16pt) OMV Petrom 2017 Results and Strategy 2021+ Romanian Investors and Analysts Event February 23, 2018 Stefan Waldner, CFO
Slide 22: Key messages 2017
Key messages 2017 Free cash flow of RON 2.7 bn Upstream: production 168 after RON 0.8 bn dividend paid kboe/d, -4% yoy; OPEX USD 10.9/boe, -7% yoy Clean CCS Operating Result at RON 3.3 bn Downstream Oil: refining margins USD +0.8/bbl yoy; Clean CCS EPS up > 2 times yoy retail sales volumes +6% yoy D
Slide 23: Romanian environment
Romanian environment Macroeconomic environment Fiscal framework 2017 GDP growth1: 7% yoy; Supplementary gas taxation5 extended Q4/17 GDP growth: 7% yoy Tax on special constructions CPI annual inflation: 3.3% end- eliminated starting January 1, Dec; 12-month average: 1.3% 2017 Demand: Engagement with
Slide 24: Economic environment
Economic environment FX (RON/USD) Oil price (USD/bbl) 4.25 61 4.17 4.14 61 54 52 49 50 52 51 3.92 48 3.90 48 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Avg RON/USD Avg Urals price in USD/bbl Avg Brent price in USD/bbl Gas prices (EUR/MWh)1 Power prices in Romania (EUR/MWh)1 19.5 67
Slide 25: Cash Flow highlights
Cash Flow highlights Operating Cash Flow 2017 OCF1 up due to higher Operating Result +34% (RON bn) 5.95 Q4/17 NWC2: cash outflow RON 117 mn +41% 4.45 1.07 1.51 2017 NWC2: cash outflow RON 199 mn Q4/16 Q4/17 2016 2017 Investing Cash Flow (net outflow, RON bn) -16% 2017 CAPEX higher 15% yoy 2.90 2.45
Slide 26: Income Statement highlights
Income Statement highlights Clean CCS Operating Result Clean CCS Operating Result reflects: (RON bn) +92% ► Market conditions (prices, demand) 3.27 +26% ► Higher exploration expenses 1.70 0.45 0.57 ► Insurance revenues related to power segment Q4/16 Q4/17 2016 2017 Clean CCS Net Income1 Clean CCS Ne
Slide 27: Cost efficiency and operational excellence
Cost efficiency and operational excellence Total operating cost1 Key drivers 2017 vs. 2015 (RON mn) -500 -500 -380 -380 Upstream cost base reduced with 22% Downstream Direct Cash Costs: reduced maintenance costs, energy efficiency improvements and 3rd party contracts renegotiation, -11% Corporate Co
Slide 28: Upstream KPIs: improved OPEX/boe
Upstream KPIs: improved OPEX/boe OPEX1 Key drivers 2017 vs. 2016 (USD/boe) 17.3 Improved OPEX, in USD/boe terms, -7%: 15.4 15.5 -7% -7% 13.2 11.7 Abolition of tax on special constructions 10.9 MTBF 626 days; lower services costs One-off personnel-related expense 2012 2013 2014 2015 2016 2017 Hydroca
Slide 29: Upstream Clean Operating Result supported by higher realized prices
Upstream Clean Operating Result supported by higher realized prices Upstream Clean Operating Result Key drivers 2017 vs. 2016 (RON mn) 1,674 Higher realized oil prices, +29% -333 376 -110 Decreased production costs and depreciation 1,166 575 Sales volumes -3% Higher exploration expenses 2016 Realiza
Slide 30: Downstream Oil KPIs: strong refining margins and sales
Downstream Oil KPIs: strong refining margins and sales OMV Petrom Indicator refining margin Key drivers 2017 vs. 2016 (USD/bbl) 8.71 7.75 6.98 Strong refining margin, +11% yoy 1.89 Refinery utilization rate at 93% -1.39 -2.83 2012 2013 2014 2015 2016 2017 Retail sales volumes (mn t) +6% +6% 2.56 2.7
Slide 31: Downstream Gas KPIs: higher gas sales volumes
Downstream Gas KPIs: higher gas sales volumes Gas sales volumes Key drivers 2017 vs. 2016 (TWh) +2% +2% 52.16 52.70 51.39 50.36 51.40 47.70 Higher gas volumes, built on sale portfolio optimization 2012 2013 2014 2015 2016 2017 Net electrical output (TWh) Higher spark spreads supported by -7% -7% bas
Slide 32: Downstream Clean CCS Operating Result
Downstream Clean CCS Operating Result Improved performance in both segments Downstream Clean CCS Operating Result Key drivers 2017 vs. 2016 (RON mn) Strong refining margins 1,753 209 Low base effect from 2016 turnaround 422 1,122 Higher retail sales volumes following increase in 1,533 demand 1,112 I
Slide 33: CAPEX and E&A
CAPEX and E&A Group CAPEX incl. capitalized E&A CAPEX incl. capitalized E&A (RON bn) 2017 at RON 3.0 bn: +25% +25% 64 new development wells and sidetracks drilled +15% +15% 3.7 >1,000 workovers performed 3.0 2.6 2018 at RON 3.7 bn: Drilling >100 development wells and sidetracks ~1,000 workovers Refi
Slide 34: 2017 Dividend proposal: EUR 248 mn
2017 Dividend proposal: EUR 248 mn DPS1 2017: RON 0.02 Dividend yield2 2017: 7% EUR 1.1 bn returned to shareholders in the past five years 2012-2016 Payout ratio and Dividend yield 2017 DPS1: RON 0.02 Payout ratio, % EUR mn 6.5 6.6 Dividend yield 2 , % 545 5.7 2.7 248 81 40 45% 36 30 0 2012 2013 201
Slide 35: Outlook 2018
Outlook 2018 Indicators Actual 2017 Assumptions/Targets 2018 Brent oil price USD 54/bbl USD 60/bbl Refining margin USD 7.75/bbl <USD 7.75/bbl Production 168 kboe/d ~ -4% yoy1 CAPEX RON 3.0 bn RON 3.7 bn FCF after dividends RON 2.7 bn positive 1 Not including portfolio optimization initiatives 35 | O
Slide 36: OMV Petrom
GA OMV Petrom