Omv Ag · VIE:OMV
Omv — OMV Aktiengesellschaft — Q2 2013 Earnings Presentation
51 slides from Omv's earnings presentation, Aug 13, 2013
Slide 1: OMV results January – June and Q2 2013
OMV results January – June and Q2 2013 August 13, 2013 OMV Aktiengesellschaft
Slide 2: Strategic highlights and results January – June 2013
Strategic highlights and results January – June 2013 Gerhard Roiss, Chairman of the Executive Board and CEO OMV Aktiengesellschaft
Slide 3: Market environment 6m/13
Market environment 6m/13 Brent oil price in USD/bbl 113 06/2013 01/2013 102 Oil price: Decreasing to average USD 108/bbl (6m/12:114) Operating environment: Instability in Middle East and North Africa Gas prices: Ongoing spread spot vs. long-term Refining margins: Volatile at lower level 3 | OMV Grou
Slide 4: Highlights in 6m/13
Highlights in 6m/13 1.6 EUR bn free cash flow after dividends (6m/12: EUR 194 mn) ~1 bn boe E&P project pipeline up to 6 bcm p.a. Neptun potential gas production, OMV Petrom share 50% 6 new exploration licenses awarded in Norway 870 MW new gas-fired power capacity on stream 4 | OMV Group, Results Ja
Slide 5: Financial performance in 6m/13
Financial performance in 6m/13 Clean CCS EBIT in EUR mn Exploration and Production (17)% Production decrease to 299 kboe/d (6m/12: 302) and 1,665 Brent price down to USD 107.5/bbl (6m/12: 113.6) 1,584 Gas and Power (39)% EconGas significantly burdened by negative gas 1,510 1,251 margins: persisting
Slide 6: Solid financial basis for growth
Solid financial basis for growth 6m/13, in EUR bn ~3.5 Group CAPEX 6m/13: EUR 1.1 bn thereof NWC Debt 75% in E&P 0.9 reduction 1.7 EUR 0.9 mn net working capital Cash flow reduction 1.4 Dividend Gearing ratio down from 26% (2012) to 0.1 0.6 15% (June 2013) Investments 0.9 1.1 1 0.1 0.2 Sources
Slide 7: Focus on upstream activities
Focus on upstream activities 7 | OMV Group, Results January - June and Q2 2013
Slide 8: Grow Upstream to 350 kboe/d
Grow Upstream to 350 kboe/d OMV Production in kboe/d ~350 2 Production in core countries stabilized at 208 kboe/d 299 Growth: >2/3 of Group CAPEX in E&P ~1 bn boe project pipeline; increased exploration activities 126 Black Sea: 3D seismic Neptun completed North Sea: FID Aasta Hansteen, si
Slide 9: Optimize Downstream
Optimize Downstream R&M: Executed divestments: Marketing businesses in Bosnia- Herzegovina and Croatia Lubricants business EUR 1.4 bn cash generation in 6m/13 Strong operating cash flow Several working capital reduction measures G&P: Renegotiations with Gazprom and Statoil progressed
Slide 10: Results Q2/13
Results Q2/13 David C. Davies, Deputy Chairman of the Executive Board and CFO OMV Aktiengesellschaft
Slide 11: Q2/13 Highlights
Q2/13 Highlights Clean CCS EBIT in EUR mn Average Brent oil price at USD 102/bbl, down by 5% 865 Production at 297 kboe/d 733 Lower liftings mainly in Libya G&P burdened by negative EconGas 743 performance 597 Increased refining result at Petrom driven by higher volumes and lower costs S
Slide 12: Economic environment
Economic environment Oil price and EUR/USD Gas prices in EUR/MWh OMV indicator refining margin in USD/bbl 140 1.4 35 5.5 135 30 1.31 29 5.0 1.28 30 130 1.3 4.5 4.15 125 4.0 25 28 120 1.2 26 3.5 115 20 108 3.0 2.48 110 1.1 102 15 13 2.5 105 11 2.0 100 1.0 10 1.5 95 90 0.9 1.0 5 85 0.5 80 0.8 0 0.0 Q2
Slide 13: Results in Q2/13
Results in Q2/13 Clean CCS net income attributable in EUR mn Q2/13 Q2/12 to stockholders in EUR mn 1 EBIT 667 621 7% Financial result (109) (26) n.m. Taxes (216) (236) (9)% Effective tax rate 39% 40% (3)% 455 Net income 343 360 (5)% Minorities and hybrid capital (117) (76) 54% owners 321 Net inco
Slide 14: Cash flow
Cash flow 6m/13 in EUR mn 6m/13 6m/12 in EUR mn Net income 1,294 986 31% Depreciation and 998 1,003 (0)% amortization 851 Other (536) (324) 65% (536) (1,175) 998 (616) Sources of funds 1,756 1,665 5% 783 1,599 Change in net working 1,294 851 130 n.m. capital Cash flow from 2,607 1,795 45% operatin
Slide 15: CAPEX and EBITD
CAPEX and EBITD 6m/13 Key investments in Q2/13 in EUR mn 2,856 Petrom drilling, workovers and redevelopments Field developments in Norway (Aasta Hansteen and Edvard Grieg) 1,830 Schiehallion redevelopment in UK 1,120 130 EBITD contains EUR 440 mn one-time result 842 impact from completed sal
Slide 16: Special items and CCS effect
Special items and CCS effect Q2/13 in EUR mn Q2/13 Q2/12 in EUR mn Clean CCS EBIT 733 865 733 CCS gains/(losses) (67) (104) (67) 667 (1) 0 (3) 5 Clean EBIT 666 761 Personnel related costs (1) (23) Unscheduled depreciation 0 (101) Asset disposals (3) (0) Other 5 (15) Total special items 1 (139) EBIT
Slide 17: Exploration and Production Clean EBIT
Exploration and Production Clean EBIT in EUR mn Q2/13 vs. Q1/13 Q2/13 vs. Q2/12 743 (20) 653 597 (119) 597 (72) 17 (3) 2 (41) 34 Q1/13 Realization Volume Exploration Other Q2/13 Q2/12 Realization Volume Exploration Other Q2/13 expenses expenses Lower oil price Lower oil price and weaker USD vs.
Slide 18: Exploration and Production Key Performance Indicators
Exploration and Production Key Performance Indicators Hydrocarbon production (1,000 boe/d) Q2/13 vs. Q1/13 305 309 301 302 297 Production down by 2% Technical issues in Austria and 164 168 159 163 159 Kazakhstan Security problems and strikes in Libya 141 141 142 139 138 Higher production in
Slide 19: Exploration and Production Petrom group
Exploration and Production Petrom group Hydrocarbon production (1,000 boe/d) Q2/13 vs. Q1/13 182 182 183 183 184 Clean EBIT of EUR 297 mn down by 8%, mainly due to 89 88 88 89 88 lower oil price and oil sales partly offset by lower exploration expenses and higher gas price 93 94 95 94 96 Rom
Slide 20: Gas and Power Clean EBIT
Gas and Power Clean EBIT in EUR mn Q2/13 vs. Q2/12 19 (46) (30) 2 (2) (3) Q2/12 Supply, Gas logistics Power Other Q2/13 marketing and trading Supply, marketing and trading: Negative EconGas performance and decrease of gas sales volume Gas logistics improved due to better cost position Power: W
Slide 21: Gas and Power Key Performance Indicators
Gas and Power Key Performance Indicators Gas sales volumes in TWh Q2/13 vs. Q2/12 136 129 Total gas sales volumes down by 5% 100 89 85 driven by EconGas Petrom sales volumes increased by 3% Renegotiations with Gazprom and Q2 /12 Q3 /12 Q4 /12 Q1 /13 Q2 /13 Statoil progressed Trading EconGas Sa
Slide 22: Refining and Marketing Clean CCS EBIT
Refining and Marketing Clean CCS EBIT in EUR mn Q2/13 vs. Q2/12 (19) 25 25 160 129 Q2/12 Fuels Petrochemicals Marketing Q2/13 Improved result in Petrom refining due to six-week shutdown in Q2/12 and lower costs Lower petrochemicals margins Improved marketing result due to better retail margins
Slide 23: Refining and Marketing Key Performance Indicators
Refining and Marketing Key Performance Indicators Refining utilization rate in % Q2/13 vs. Q2/12 97 94 93 95 92 89 87 86 76 Refining utilization at 94%, up by 18% 43 Marketing sales volumes increased Marketing business in Croatia and Bosnia-Herzegovina divested Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
Slide 24: Key financial indicators
Key financial indicators Gearing ratio in % 31 28 26 15 15 Key financial principles Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Long-term gearing ratio target of ≤30% Payout ratio and DPS 1.20 Maintain a strong investment grade rating 1.00 1.00 1.10 Sustainable dividend policy: Long-term payout 52 32 32 29
Slide 25: Outlook 2013
Outlook 2013 Market environment Brent price: Above USD 100/bbl on average Gas market: More determined by hub prices Romania: Gas price liberalization in implementation Refining margins: Lower levels than in 2012 Business outlook CAPEX: Around EUR 2.8 bn before acquisitions; ~70% in E&P F
Slide 26: energize OMV update
energize OMV update David C. Davies, Deputy Chairman of the Executive Board and CFO OMV Aktiengesellschaft
Slide 27: energize OMV – 2% points ROACE increase in 2014 on track
energize OMV – 2% points ROACE increase in 2014 on track ROACE impact Date of Progress since status June 2013 finalization program start Stabilize production in Austria and 2014 Romania Accelerate production growth in Tunisia Upstream 2014 and Pakistan Ongoing development and 2014 operational excell
Slide 28: Expected ROACE impact in 2014
Expected ROACE impact in 2014 Impact of energize OMV on ROACE in 2014 (in % points) Achievements: Commingling successes growing: ~1,500 boe/d achieved by 6m/13 (~600 boe/d in 2012) 2014 Debottlenecking initiatives in E&P finalized H2/13 (~2,000 boe/d freed up) ~0.5% realized H1/13 Target 2% Im
Slide 29: Exploration and Production Update
Exploration and Production Update Jaap Huijskes, Executive Board member responsible for E&P OMV Aktiengesellschaft
Slide 30: E&P project summary Q2/13
E&P project summary Q2/13 Further strengthened project pipeline to ~1bn boe Zidane ~500 mn boe under appraisal Rosebank New FRD projects established in Romania: FRD Bustuchin, FRD Muntenia, FRD Istria Bina Bawi (Kurdistan Region of Iraq) field FRD Muntenia development plan progressing, testi
Slide 31: Major projects under development
Major projects under development New ventures Exploration Appraisal Development Execution Production 2P Peak Project Working Project Country Type Operated start reserves production investments interest primary year mn boe kboe/d EUR mn % STOD 1 Oil 2012 ~4 ~2 t.b.d. 50.0 OP FRD Romania Oil/Gas 2013-
Slide 32: Major projects under appraisal
Major projects under appraisal New ventures Exploration Appraisal Development Execution Production Cumulative Working Project Country Type Operated start production interest primary year mn boe % Bina Bawi Oil/Gas 2013 1 t.b.d. 36.0 OP FRD Romania Oil/Gas 2014-2017 150-200 100.0 2 OP FRD Austria Oil
Slide 33: Exploration summary Q2/13
Exploration summary Q2/13 High impact drilling: Bonna Wisting Central Norway: Bonna-1 spud (July); Wisting (operated) spud (Aug.) Australia: Bianchi-1 appraisal well successful – discovered Cambo-5 112 m net gas pay UK: Cambo 5 – dry Taggart Further drilling: Pakistan: Sofiya-2 drilling Tu
Slide 34: High impact wells in 2013/14
High impact wells 1 in 2013/14 Exploration and Production Working Well Country Basin/Block Type 2 Spud date Operated Exploration interest Apollo NO Bønna Barents Sea E Drilling 20% n Bønna Wisting Wisting Central Barents Sea E Q3/13 25% OP y Cambo-5 Wisting Main Barents Sea E Q3/13 25% OP y Apollo B
Slide 35: OMV commitment to Norway growth rewarded with successful license award
OMV committment to Norway growth rewarded with successful license award Norway is currently a global exploration hot spot 2 Wisting Bønna 6 new exploration licenses in 22nd licensing round 4 non-operated in the Barents Sea 2 operated in the Norwegian Sea (Aasta Hansteen area) Drill or drop
Slide 36: Upstream – Key energize OMV achievements
Upstream – Key energize OMV achievements Stabilize production in Romania Accelerate production growth in Ongoing development and and Austria Tunisia and Pakistan operational excellence in rest of world Facilities debottlenecked Accelerate South Tunisia Oil Growing contribution of cost ~1,100 b
Slide 37: Gas and Power update
Gas and Power update Hans-Peter Floren, Executive Board member responsible for G&P OMV Aktiengesellschaft
Slide 38: Integrated gas: Optimizing OMV’s equity gas positions
Integrated gas: Optimizing OMV’s equity gas positions Short-term focus on improving Build up competitiveness equity gas position Build on strong gas logistics and sales positions Maintain Mid- and long-term position focus on new equity gas supply Equity gas Storage Gas-fired power plant Expand
Slide 39: 1.7 GW gas-fired power plants on stream
1.7 GW gas-fired power plants on stream Status Brazi CCPP (Romania) Commercial operations since August 2012 860 MW net capacity ~9% market share at full capacity Equity gas-fired Most modern and flexible power plant in Investment: Romania EUR ~530 mn Two times higher efficiency than th
Slide 40: Refining and Marketing update
Refining and Marketing update Manfred Leitner, Executive Board member responsible for R&M OMV Aktiengesellschaft
Slide 41: OMV downstream market grows despite European trend
OMV downstream market grows despite European trend EU-28 market 1 OMV market 1, 2 In mn t 2012-21, mn t 615 104 99 554 +5% -10% Turkey Turkey 2012 2021 2012 2021 1 Oil market products: LPG, naphtha, gasoline, jet/kero, gasoil, fuel oil, other products. 2 Austria, Germany, Czech Republic, Slovakia, H
Slide 42: Strong business integration and further increased asset utilization
Strong business integration and further increased asset utilization Own crude oil % of refining capacity Competition 2012 1 12% OMV 2012 18% E&P Refining OMV 2015 >25% Refinery utilization rate Retail sales vol. % of refining capacity 79% Competition 2012 1 24% OMV 2012 88% Competition 2012 1 42% OM
Slide 43: Divestments of up to EUR 1 bn on track
Divestments of up to EUR 1 bn on track June Sale of lubricants business November Sale of share in K-PET February Sale of Marketing Business Croatia 2011 2012 2013 2014 Sale of 45% stake in Bayernoil Capital Markets September Day / Presen- Sale of Petrom LPG tation of new OMV strategy June No
Slide 44: Modernization of Petrobrazi leads to significant yield improvements
Modernization of upstream integrated refinery Petrobrazi leads to significant yield improvements 2010 2011 2012 2013 2014 2015 Concept, Execution phase Crude distillation Coker upgrade & Vacuum gasoil First full year of feasibility, FEED revamp desulfurization conversion benefits Middle dist
Slide 45: Strong contribution to energize OMV – R&M achievements
Strong contribution to energize OMV – R&M achievements Reduce working capital Optimize marketing Improve refining Sale of Austrian national stock Operational excellence filling Yield improvement holding business stations EUR ~5 mn EUR ~45 mn EUR ~190 mn Pricing excellence Better cost perfo
Slide 46: Borealis contributes strongly to R&M results
Borealis contributes strongly to R&M results Borouge 1 as capacity driver of Borealis, Solid contribution to OMV’s bottom line adding ~4.4 mn t per year until 2014 from Borealis (OMV share 36%) kt p.a. EUR mn ~2,400 ~4,400 1,000 186 172 1,400 ~2,000 109 52 1,400 600 12 Borouge 1-2 Borouge 3 Total 20
Slide 47: R&M´s cash generation improved significantly
R&M´s cash generation improved significantly and supports OMV’s integrated business model Cash generation bn EUR EBITD Investment NWC 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 2010 2011 2012 6m/13 47 | OMV Group, Results January - June and Q2 2013
Slide 48: Conclusions
Conclusions Gerhard Roiss, Chairman of the Executive Board and CEO OMV Aktiengesellschaft
Slide 49: Strategy “Profitable Growth”: H2/13 steps
Strategy “Profitable Growth”: H2/13 steps Deliver key growth projects; ~70% of CAPEX in E&P E&P Recommence drilling in Production start Mehar the Black Sea and Latif (Pakistan) E&P pipeline FID Nawara (Tunisia) 4 high impact growth to deliver exploration wells 350 kboe/d by 2016 Contin
Slide 50: Disclaimer
Disclaimer This document does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract, investment decisions or commitment whatsoever.
Slide 51: OMV Aktiengesellschaft
OV OMV OMV Aktiengesellschaft OuvV Moving more. Moving the future. O M V
OMV Aktiengesellschaft — Q2 2013 Earnings Presentation on 6ix