Slide 1: Investor Update: Strategic Plan 2012-2016
Investor Update Strategic Plan 2012-2016 “Growing from our strengths” Repsol. Investor Relations March 2015
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2015 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: Company Overview Repsol: A Transformation Story Acquisition of Talisman Energy
1. Company Overview 2. Repsol: A Transformation Story 3. Acquisition of Talisman Energy 4. Upstream 5. Downstream 6. Gas Natural Fenosa 7. Financial Position 8. Environmental, Social & Governance 9. Summary 10. Annex © 3
Slide 4: Company Overview
Company Overview 1 ©
Slide 5: Repsol today
Repsol today Company Overview Norway Russia Canada Netherlands Ireland Italy Romania Canaport LNG Spain Bulgaria USA Portugal China Venezuela Aruba Morocco Algeria Houston Libya Trinidad & Tobago Guyana Iraq Nicaragua Colombia Malaysia Liberia Singapore Ecuador Brazil Gabon Indonesia Peru Angola Bol
Slide 6: Repsol's Shareholders
Repsol’s Shareholders Company Overview 11.69* 8.89 Caixabank Sacyr 6.03 Temasek 73.39 Free Float 12 % Retail Total number of shares as of March 2015: 1,374.69 million * On 11th November 2013 CaixaBank launched a €594m 3-year Mandatory Exchangeable Bond into Repsol shares (2.5% of share capital) © 6
Slide 7: Repsol: A Transformation Story
Repsol: A Transformation Story 2 ©
Slide 8: 2012-2016 Key strategic targets
2012-2016 Key strategic targets Repsol: A Transformation Story Production growth 2011-16(1) : > 7% Strong FCF from the Downstream CAGR(1) Business RRR(2) 2011-2016: > 120% (+120% vs. average 2008-2011) Maximize Downstream average capex: Upstream average capex: High growth return on €0.7bn/
Slide 9: Turnaround plan
Turnaround plan Repsol: A transformation story FID [1] Start up New areas of Exploration Norway GoM Peru Alaska Brazil Namibia Sagari Brazil Venezuela Sapinhoa Carioca (Lapa) Carabobo (Guará) European Atlantic Cartagena Kurdistan Brazil Canada Angola BM-C-33 Peru Canaport Algeria Kinteroni Bulgaria
Slide 10: Acquisition of Talisman Energy
Acquisition of Talisman Energy 3 ©
Slide 11: Talisman: A major Canadian listed upstream company
Talisman: A major Canadian listed upstream company with a globally diversified portfolio Key facts Diversified asset portfolio Dual-listed E&P company with core assets in North America, the Asia Pacific region, Colombia and Northern Europe Headquartered in Calgary, Alberta, Canada Approximatel
Slide 12: Transaction Overview
Transaction Overview Repsol S.A. (“Repsol”) to acquire 100% of Talisman Energy Inc. (“Talisman”) outstanding Transaction common shares structure Structured as Plan of Arrangement US$8 per share, representing total all-cash consideration of US$8.3 billion1 Consideration Total enterprise value of US$1
Slide 13: Strategic Rationale
Strategic Rationale Growth Strategic Rationale Value Diversification creation Transformational deal, upgrading Repsol's portfolio and competitive advantage achieving global scale and diversification, greater exposure to Upstream, leading growth platforms and enhanced capabilities to create value © 1
Slide 14: Production, Reserves, Operatorship, OECD production
Production, Reserves, Operatorship, OECD production Reserves 1P/2P (MBoe) Operated production (%)1 55% 23p.p. 1,515 2,302 2,353 3,546 42% 1P 2P 1P 2P 19% Before Deal After Deal Before Deal After Deal Production 2014E (Kboepd) OECD production (%) 76% 25p.p. 680 36% 386 11% Before Deal After Deal Befo
Slide 15: Enhancement of upstream geographic diversification
Significant enhancement of Repsol’s upstream business geographic diversification + Talisman Capital Whole Employed in Company Upstream from 38% to 58% Upstream Downstream GNF CE: ~36 B$ CE: ~52 B$ Upstream Division Capital Employed in NA from 30% to Upstream 50%, Latam Division from 50% to North Ame
Slide 16: Adds new plays, skills & technology
Adds new plays, skills & technology Complementary capabilities World class explorer Experienced production operator Deepwater exploration experience and Unconventional experience and portfolio portfolio Broad international portfolio Broad international portfolio with strong focus on with strong focu
Slide 17: Portfolio management: Opportunities to optimize capital allocation
Portfolio management: Opportunities to optimize capital allocation A broader portfolio together with a sound financial position provides a better capacity to create and unlock value through portfolio management, allocating capital to the most valuable projects and assets Portfolio management criteri
Slide 18: A strategic combination to accelerate growth
A strategic combination to accelerate growth, diversify asset base and drive shareholder value Talisman acquisition consistent with Repsol strategy to strengthen Repsol’s upstream business while providing a platform for future growth Creating Value: IRR above WACC Creates a truly globally diversifie
Slide 19: Price and Trading Multiples
Price and Trading Multiples The transaction offers competitive multiples for Repsol, especially considering the long term value of the asset EV/EBITDA 2015E (x) 1 EV/2013 1P & 2P reserves ($/boe) 2 6 18 5 15 4 12 3 9 5.0 15.4 2 6 10.4 1 3 0 0 Talisman at US$ 8 Talisman at US$ 8 Talisman at US$ 8 EV/
Slide 20: Net debt proforma post Talisman deal
Net debt proforma post Talisman deal Resilient credit metrics under stress scenarios Net Debt Estimated Post Deal(1) Net Debt (2) / EBITDA (x) (3) (4) (€bn) Resilient credit metrics under stress scenarios 1. Exchange rate of US$/€ 1.21 as of 31 December 2014 2. Net debt 2015-2017 includes: US$ 1 bil
Slide 21: Upstream
Upstream Our businesses strategy 4 ©
Slide 22: Countries with drilling activity during 2014
Countries with drilling activity during 2014 34 wells finalized in 2014 Norway Alaska Russia Romania Spain Irak Algeria Libya GoM T&T Mauritania Offshore Liberia Colombia Angola Bolivia Brazil Namibia 12 wells with a positive result in 2014 Reserve Replacement Ratio Operated 2010 131 % 2011 162 % Op
Slide 23: Setting the basis for the new waves of growth: Focus on Exploration
Setting the basis for the new waves of growth Focus on Exploration 2015 exploration strategy based on lower risk than in previous years. Reserve Replacement Ratio 2010 131 % Exploration Capex : 2011 162 % THREE YEAR 2012 204 % ROLLING AVERAGE : 2015 (E) USD 1.2bn/year 2015 (E) trying to reduce high
Slide 24: 10 key growth projects in 2012-2016
10 key growth projects in 2012-2016 Delivering Growth Low risk of delivery: 7 projects already producing Post 2016: Next wave of growth Exploration Russia AROG • Contingent resources (Russia) – Alaska 6 50 Kboed – Campos - 33 (Seat, WI: 49% Gavea, Pao de Açucar) USA - FO: 2012 – Presalt Albacora –
Slide 25: Delivering Growth: Targets
Targets Delivering Growth CAGR(1) >7% 2012-2016 Reserve Replacement Ratio(2) In 2014 average production 2013: 346 kboed RRR 2014 198% growth of 2.5%. With Libya at 2014: 355 kboed Reserves 2014 1,539 Mboe normal levels, 8% increase in production. Contingent Resources 2013 2.1 Bn boe Contingent Resou
Slide 26: Downstream
Downstream Our businesses strategy 5 ©
Slide 27: Improve profitability on operational excellence and efficiency
Improve profitability on operational excellence and efficiency Maximize return on investment and cash generation Refining Petrochemicals Reduce energy costs Maximize value of integration with refining o Fuel consumption & losses down by 6% at Competitive Plan: 2016 o Higher-value applications
Slide 28: Downstream strategy 2010-2014: Increased competitiveness
Downstream strategy 2010-2014: Increased competitiveness of Downstream business Competitive Downstream business, linked to quality assets and geographical situation Integrated R&M margin (Repsol vs. Sector) Presence in a premium market for refining Completion of expansion and conversion projects
Slide 29: Downstream strategy 2010-2014: Increased competitiveness
Downstream strategy 2010-2014: Increased competitiveness of Downstream business Improved competitiveness of refining assets Oil pipeline Repsol Oil pipelines CLH % FCC equivalent 100% 1Q 2Q 3Q 4Q CORUÑA BILBAO 80% 60% TARRAGONA 40% 20% PUERTOLLANO 0% CARTAGENA 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1
Slide 30: Maximizing returns from the business and capital discipline
Maximizing returns from the business and capital discipline R&M EBITDA CCS R&M CAPEX €bn/year €bn/year (*) Higher margins largely derived from Downstream investment cycle expansion and conversion projects already finalized. (*) 2015 capex figure includes the investments in La Pampilla Refinery (Peru
Slide 31: Gas & Power: Access to premium markets in North America
Gas & Power Access to premium markets in North America Highly seasonal business Regasification facility and midstream assets with access to premium markets in North East USA Trading activity based in our Houston headquarters EBITDA 9M14: 238 M€ Regasification plant Canaport LNG Total capacity:
Slide 32: Gas Natural Fenosa
Gas Natural Fenosa Our businesses strategy 6 ©
Slide 33: Gas Natural Fenosa: A liquid asset, with growth capabilities
GAS NATURAL FENOSA A liquid asset, with growth capabilities and a strong cash flow generator Strong LatAm footprint, growth and strong cash generation An European leading utility company with a strong footprint and Leading Utility growth in Latin America Dividend Yield Strong cash stream for Repsol
Slide 34: Financial Position
Financial Position 7 ©
Slide 35: Financial Position
Financial Position Financial Discipline: self-financed strategic plan Net Debt Liquidity Position High Liquidity Sound Financial Position € 9,844 bn € 3.3 bn € 5.4 bn € -0.4bn € 6.5 bn X 7.6 € 2.0 bn € 1.3bn 2013 4Q14 Liquidity Short term maturities Cash and equivalents Undrawn credit lines Note: li
Slide 36: Credit Rating Agencies: Repsol's rating
Credit Rating Agencies Repsol’s rating Rating Agencies underline benefits from upstream portfolio diversification and Repsol´s flexibility to maintain target leverage ratios after acquisition of Talisman Energy Moody's affirms Repsol's long-term rating at Baa2 while changing outlook to “Negative” fr
Slide 37: Shareholder remuneration
Repsol in figures Shareholder remuneration “2015 maintaining our competitive shareholder remuneration at current levels with the scrip option” € 2,50 Dividend Yield (DY) (1) = (Gross Dividend during Year / closing price at the end of the period) € 2,00 (DY) +13% (2) € 1,50 [3] € 1.00 € 1,00 (DY) +5.
Slide 38: Environmental, Social & Governance
Environmental, Social & Governance 8 ©
Slide 39: Corporate Responsibility Model: Our commitments
Corporate Responsibility Model Our commitments Zero Accidents Embedded safety culture Excellence in spill prevention Policy on respect for human and response rights based on the UN Guiding Optimized water&waste Principles on Business and management Human Rights. Biodiversity action plans
Slide 40: Monitoring and control of the sustainability indexes
Monitoring and control of the sustainability indexes The consistency and commitment of our work has led to recognition of the company's firm commitment to continually improving its performance. Our Company has won recognition for its energy efficiency and carbon management for the third time in the
Slide 41: Summary
SUMMARY 9 ©
Slide 42: Summary
Summary Repsol has achieved all 2012-2016 strategic goals. YPF´s monetization allows Repsol to inorganically accelerate further growth in the upstream, further diversification in the asset base and further shareholder value. Positioned for growth Diversification Upstream as growth engine Bal
Slide 43: Annex
ANNEX 10 ©
Slide 44: Repsol in figures
Repsol in figures Note: Repsol Group made the decision in 2014, prompted by the business reality and in order to make its disclosures more comparable with those in the sector, to disclose as a measure of the result of each segment the recurring net operating profit at current cost of supply (CCS) af
Slide 45: Repsol in figures
Repsol in figures As of February 27th 2014 MARKET CAPITALIZATION 23.658 © 45
Slide 46: Investor Update: Strategic Plan 2012-2016
Investor Update Strategic Plan 2012-2016 “Growing from our strengths” Repsol. Investor Relations March 2015