Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Investor Presentation (September 2019)
66 slides from Omv Petrom Sa's investor presentation, September 2019
Slide 1: Capital Market Story
Capital Market Story September 2019 OMV Petrom S.A.
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Slide 3: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form This presentation may contain forward-looking statements. These part of, and should not be construed as, constituting or forming part of, statements reflect the Company’s current knowledge and its any actual offe
Slide 4: Contents
Contents Investment proposition Strategy 2021+ Q2/19 and 6m/19 results review Outlook 2019 FY18 results review Appendix All figures throughout this presentation refer to OMV Petrom Group (herein after also referred to as “the Group”), unless otherwise stated. The financials represent OMV Petrom Grou
Slide 5: Investment proposition
Investment proposition OMV Petrom S.A.
Slide 6: OMV Petrom's Investment Proposition
OMV Petrom’s Investment Proposition Integrated oil and gas company Earnings resilience and High safety standards capital stewardship Strong cash conversion Cost efficiency and and attractive shareholder operational excellence return 6 | OMV Petrom Capital Market Story – September 2019
Slide 7: Operating in the integrated oil and gas sector
Operating in the integrated oil and gas sector Upstream Downstream Petrobrazi refinery, 4.5 mn t/yr capacity Romania 794 filling stations, operated via 2 brands: Petrom and OMV Production: 1P reserves: 5.0 mn t total refined product sales (thereof 2.7 mn t retail 56 mn boe 509 mn boe sales)
Slide 8: Focused on safeguarding our employees and the environment
Focused on safeguarding our employees and the environment Our vision: “ZERO Harm – NO Losses” 2018 LTIR1: 0.26, in line with international benchmarks (IOGP2 2017: 0.27) Upstream: 3 out of 9 Assets in Romania recorded ZERO LTI in 2018 Downstream: ZERO LTI in Petrobrazi in 2018, including 2 mill
Slide 9: Proven history of integration delivering value
Proven history of integration delivering value Synergies and earnings resilience delivered in depressed oil price environment Clean CCS Operating Result RON bn 71 Upstream 2015-2018: lower personnel, 52 54 4.8 material and services 44 3.3 costs 2.5 1.7 1.2 1.1 1.8 1.7 Downstream: stable contribu
Slide 10: Cost efficiency and operational excellence
Cost efficiency and operational excellence Total operating cost1 Key drivers 2018 vs. 2015 (RON mn) -945 -945 Upstream: efficiency programs implemented led to cost base reduction by 24% Downstream: reduced maintenance costs, energy efficiency improvements and 3rd party contracts renegotiation, -
Slide 11: Turning efficiency savings into cash flow…
Turning efficiency savings into cash flow… Clean CCS Operating Result margin1 (%) Clean CCS ROACE (%) 21 14 17 14 10 10 6 5 2015 2016 2017 2018 2015 2016 2017 2018 Cash flow (RON bn) Net cash and Debt (RON bn) -0.5 1.2 2.0 1.6 7.4 5.3 6.0 5.6 4.5 4.0 2.0 -2.9 -2.4 0.8 -5.0 -4.3 -1.5 -1.1 -0.7 -2.1 -
Slide 12: …and cash flow into returns to shareholders
…and cash flow into returns to shareholders Dividend Policy OMV Petrom S.A. is committed to deliver a competitive shareholder return throughout the business cycle, including paying a progressive dividend. We aim to increase our dividend each year or at least maintain it at the previous year’s level,
Slide 13: Shareholder structure and capital market environment
Shareholder structure and capital market environment OMV Petrom S.A. shareholder structure1 (%) 10% OMV2: Austria’s leading integrated international oil and gas company Fondul Proprietatea3: listed fund with ~79% of AUM invested4 in the energy sector 21% Romanian State, no special rights attached 51
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Slide 15: Strategy 2021+
Strategy 2021+ OMV Petrom S.A.
Slide 16: OMV Petrom's strategic directions
OMV Petrom’s strategic directions Attractive shareholder return Enhancing competitiveness Highest integration value Operational excellence Improved recovery Streamlined producing portfolio Developing growth options Leading 100% Reserve Replacement Rate integrated Exploration portfolio re
Slide 17: Progress towards achieving strategic objectives
Progress towards achieving strategic objectives Strong performance and attractive shareholder return Intensive drilling campaign Continuous optimization of the Enhancing producing portfolio Increased operational efficiency competitiveness Successful Petrobrazi turnaround 2018 Highlights In
Slide 18: Upstream: focus on the most profitable barrels
Upstream: focus on the most profitable barrels No. of drilled wells Footprint development Unit cost development (no. of fields) (USD/boe) 100-150 110 232 208 208 69 150 11.7 10.9 11.2 ~10.5 36 2016 2017 2018 2021 2016 2017 2018 2021 2016 2017 2018 2021 Highlights 2018 Going forward Intensified dri
Slide 19: Upstream: continued operational excellence
Upstream: continued operational excellence Increased MTBF1 Modernized / automated facilities Automated wells2 (days) (% in total no. of facilities) (% in total no. of wells) 900 95 800 90 700 80 626 70 67 555 58 57 53 45 42 2016 2017 2018 2021 2025 2016 2017 2018 2021 2025 2016 2017 2018 2021 2025 G
Slide 20: Downstream Oil: high level of performance
Downstream Oil: high level of performance Refining Going forward Fuel storage network Utilization rate (%) Focus on operational excellence 2005 100 Improve refinery operations to international benchmarks 90 Maintain cost discipline After 45-day, EUR 45 mn 80 turnaround in 2018, 4-year turnar
Slide 21: IMO 2020: OMV Petrom well positioned to benefit (1/2)
IMO 2020: OMV Petrom well positioned to benefit from the new regulations (1/2) IMO 2020 regulations Compliant with IMO generate supportive Financial impact 2020 regulation market conditions Advantaged by crude oil Middle distillates demand Expected impact in refining slate…: and crack spreads
Slide 22: IMO 2020: OMV Petrom well positioned to benefit (2/2)
IMO 2020: OMV Petrom well positioned to benefit from the new regulations (2/2) IMO global sulfur regulations Heavy Fuel Oil Yield (%) 9% Global sulfur limit for ships: from 4.5% in 2005, to 3.5% in 2012 and 0.5% in 2020 <1% Sulfur Ship owners have the following options: 1. Continue to use Heavy
Slide 23: Downstream Gas: consolidate position in Romanian gas market
Downstream Gas: consolidate position in Romanian gas market Diversify gas sales channels Capture the highest integrated (% in total sales) gas and power value + 15% small and medium customers vs. 2017, both gas and power 40 40 45 Strong integration of Brazi power plant 48 50 38 • 92% availabilit
Slide 24: 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 Resources Domino-1 discovery of 125 - 250 mn boe1 Two seismic acquisition campaigns
Slide 25: 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 of approx. EUR 65 mn Construction started in 2017, mechanical completion in December 2018, plant operational in March 2019 Explore technol
Slide 26: Downstream Oil: enhance offer and customer experience in retail
Downstream Oil: enhance offer and customer experience in retail Secure strong position 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 Together for Romania We care more Strategic
Slide 27: MyAuchan in Petrom – first convenience store in a filling station
MyAuchan in Petrom – first convenience store in a filling station in Romania Save time through convenient Fair, accessible pricing Refreshed, welcoming (24/7) one-stop destination at every customer point on-site look & feel May 2017 May /Jun 2017 Mar /Apr 2018 3 stores open 3 stores open First April
Slide 28: Regional expansion to complement portfolio
Regional expansion to complement portfolio Leverage our local know-how Upstream Downstream Gas Transport capacities planned existing Diversify sales (subject to regulatory Capture synergies with existing operations framework and interconnectors’ development) ~80 mn boe reserves targeted from n
Slide 29: 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 29 | OMV Petrom Capital Market Story – September 2019
Slide 30: Upstream: Technology and Innovation for a sustainable future
Upstream: Technology and Innovation for a sustainable future Digital Oil Field - well automation and online condition monitoring Standardized Narrow Band-Internet of Things (NB-IoT) - connectivity for the wells located in isolated areas and solution for cyber security Production automated fore
Slide 31: Downstream: Automation and digitalization
Downstream: Automation and digitalization Digital Solutions in Refinery Electronic coordination and management of the maintenance and operations Refinery Dashboard - Data gathering and processing for monitoring and prediction Refinery Virtual Operator Training - Desktop-based 2D & 3D simulator
Slide 32: Our path to long-term success
Our path to long-term success Deliver Defined Solid Foundation Vision Clear Strategy Sustainable Execution Plan Value Creation Sustainability of reserves base Integrated Operational Provider of Enhance business model efficiency Attractive sustainable competitiveness delivers value Valu
Slide 33: Q2/19 and 6m/19 results review
Q2/19 and 6m/19 results review OMV Petrom S.A.
Slide 34: Economic environment
Economic environment Oil price (USD/bbl) Gas prices (EUR/MWh) 74 75 69 69 63 25.1 25.0 25.9 73 74 69 22.1 68 63 21.3 19.5 24.5 4.22 22.6 15.5 4.17 18.2 4.08 3.90 4.00 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Avg Urals price in USD/bbl (left scale) Avg USD/RON (right scale) Romania
Slide 35: Key messages Q2/19 performance
Key messages Q2/19 performance Operating Clean CCS Financial Cash Flow Clean CCS Operating RON 1.4 bn ROACE result 16.4% RON 1.0 bn Upstream: New shallow offshore drilling campaign started Hurezani gas treatment system completed Projects Downstream Oil: Optimization of fuel storage network com
Slide 36: Operational KPIs
Operational KPIs Upstream Downstream Oil Downstream Gas OPEX OMV Petrom Indicator Gas sales volumes (USD/boe) refining margin (USD/bbl) (TWh) -4% -4% -11% -11% 11.67 11.66 11.20 -43% -43% 10.41 10.73 6.72 12.88 12.23 6.62 5.27 10.51 9.74 9.39 3.62 3.85 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q2/18 Q3/18 Q4/18
Slide 37: CAPEX and E&A
CAPEX and E&A Group CAPEX incl. capitalized E&A CAPEX incl. capitalized E&A (RON bn) 6m/19 at RON 1.7 bn: -7% 45 new wells and sidetracks drilled 4.3 4.0 ~480 workovers performed Coker Closed Blowdown system -19% CCPP Brazi planned shut down 2.1 1.7 2019E RON ~4.0 bn: Drilling ~100 wells
Slide 38: Income Statement highlights
Income Statement highlights Clean CCS Operating Result (RON bn) +31% Clean CCS Operating Result reflects: 2.22 +36% 1.69 ► Favorable FX development and prices for fuel products 0.74 1.00 and natural gas ► Higher sales volumes of fuels Q2/18 Q2/19 6m/18 6m/19 ► Low base effect due to refinery turna
Slide 39: Clean CCS Operating Result
Clean CCS Operating Result Upstream (RON mn) Favourable FX 820 110 -90 774 Higher realized gas prices -22 -43 Lower crude prices Sales volumes -5% Q2/18 Market Volume Exploration Other Q2/19 effects Higher exploration expenses Downstream 94% refining utilization rate (RON mn) 322 Q2/18
Slide 40: Clean CCS Operating Result
Clean CCS Operating Result Upstream (RON mn) Favourable FX 1,599 Higher realized gas prices 1,465 267 -160 -9 36 Clarification of a tax topic Lower crude prices 6m/18 Market Volume Exploration Other 6m/19 effects Sales volumes -5% Downstream 95% refining utilization rate; (RON mn) 699
Slide 41: Cash Flow highlights: Dividends paid RON 1.5 bn
Cash Flow highlights: Dividends paid RON 1.5 bn Operating Cash Flow (RON bn) -8% +3% 3.18 2.93 Q2/19 Net working capital: cash outflow RON 251 mn 1.39 1.43 Adjustments for Other non-cash income Q2/18 Q2/19 6m/18 6m/19 Free Cash Flow (RON bn) -7% 1.21 1.13 -5% Q2/19 OCF1 +3% yoy 0.48 0.46 Q2/
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Slide 43: Outlook 2019
Outlook 2019 OMV Petrom S.A. @ OMV Petrom The energy for a better life.
Slide 44: Outlook 2019
Outlook 2019 Indicators Actual 2018 Assumptions/Targets 2019 Brent oil price USD 71/bbl USD 65/bbl USD ~5.00/bbl Refining margin USD 6.28/bbl (previously USD <6.00/bbl) Production 160 kboe/d ~ -5% yoy 1 RON 4.0 bn CAPEX RON 4.3 bn (previously RON 3.7 bn) FCF after dividends RON 2.0 bn positive 1 Not
Slide 45: Sensitivities in 2019
Sensitivities in 2019 OMV Petrom Group main sensitivities Operating Result impact Brent oil price USD +1/bbl EUR +20 mn OMV Petrom indicator refining margin USD +1/bbl EUR +25 mn Exchange rates (EUR/USD) USD appreciation by 5 USD cents EUR +52 mn 45 | OMV Petrom Capital Market Story – September 2019
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Slide 47: FY18 results review
FY18 results review OMV Petrom S.A.
Slide 48: Key messages 2018 performance
Key messages 2018 performance Clean CCS Financial Operating Clean CCS Operating Dividend 2018 Cash Flow ROACE result RON 1.5 bn RON 7.4 bn 14.3% RON 4.8 bn Neptun Deep: Strategic Projects Prerequisites for FID are currently not in place Committed to dialogue with the authorities on the way forwa
Slide 49: CAPEX and E&A
CAPEX and E&A Group CAPEX incl. capitalized CAPEX incl. capitalized E&A E&A (RON bn) 2018 at RON 4.3 bn: 110 new wells and sidetracks drilled 4.3 ~1,000 workovers performed 3.7 Refinery turnaround 3.0 2.6 2019E RON ~3.7 bn: Drilling ~100 wells and sidetracks Maintain a constant level o
Slide 50: Upstream KPIs
Upstream KPIs OPEX1 Key drivers 2018 vs. 2017 (USD/boe) 17.27 Higher OPEX, in USD/boe terms, +3%: +3% 3% 13.16 11.69 Unfavourable FX 10.90 11.18 Lower production available for sale Lower personnel and services expenses 2014 2015 2016 2017 2018 Hydrocarbon production (kboe/d) Total Upstream pro
Slide 51: Downstream Oil KPIs
Downstream Oil KPIs OMV Petrom Indicator refining margin Key drivers 2018 vs. 2017 (USD/bbl) -19% -19% 8.71 7.75 6.98 6.28 Refining margin -19% yoy, due to higher cost of crude 1.89 2014 2015 2016 2017 2018 Retail sales volumes (mn t) +1% +1% 2.53 2.56 2.70 2.74 Retail sales up 1% yoy 2.37 Ref
Slide 52: Downstream Gas KPIs
Downstream Gas KPIs Gas sales volumes Key drivers 2018 vs. 2017 (TWh) -8% -8% 51.39 50.36 51.40 47.70 47.32 Lower gas sales volumes, mainly due to lower equity production 2014 2015 2016 2017 2018 Net electrical output (TWh) Higher net electrical output due to Brazi +41% +41% power plant higher a
Slide 53: Clean CCS Operating Result
Clean CCS Operating Result Upstream Higher realized prices (RON mn) 3,224 -404 210 Lower total production costs 134 1,610 Lower exploration expenses 1,674 Negative FX development 2017 Market Volume Exploration Other 2018 Sales volumes -6% effects Downstream (RON mn) Higher electrical out
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Slide 55: Appendix
Appendix OMV Petrom S.A. @ OMV Petrom The energy for a better life.
Slide 56: Upstream Romania map
Upstream Romania map 1 56 | OMV Petrom Capital Market Story – September 2019
Slide 57: Romanian oil market overview in 2018
Romanian oil market overview in 2018 Supply IMPORTS: 69% 31% PRODUCTION various TRANSPORTATION: Conpet Refineries (combined nameplate capacity ~13 mn tpa) processed 71% 29% crude oil ~11.51 mn tpa (of which ~7.9 mn t from import) Refineries Petroleum Products Imports Petrobrazi Rompetrol (Petromidia
Slide 58: OMV Petrom Group fuel retail sales (mn l)
OMV Petrom Group fuel retail sales (mn l) 188 159 140 105 117 117 82 2013 14 15 16 17 2018 2,746 2,798 2,405 2,308 2,444 2,573 Republic of Romania Moldova Serbia 2013 14 15 16 17 2018 150 408 195 184 181 172 170 171 Bulgaria Black Sea 350 337 348 342 328 318 2013 14 15 16 17 2018 93 61 2013 14 15 16
Slide 59: Romanian gas market overview in 2018
Romanian gas market overview in 2018 Regula- Regulatory Body tory Romanian Energy Regulatory Authority (ANRE) IMPORTS: various 13% 87% PRODUCTION: , Romgaz, … STORAGE: Supply TRANSPORTATION: Transgaz Romgaz, Depomures, Amgaz SUPPLY: , Romgaz, Engie Romania, E.ON Energie Romania, ... Distribu- tion D
Slide 60: Romanian power market overview in 2018
Romanian power market overview in 2018 Regulatory Regulatory Body Romanian Energy Regulatory Authority (ANRE) Thermal Nuclear Hydro Renewables Supply Production Imports 42% 18% 28% 12% Transport & Distribution System Operator (TSO&DSO) Market(s) Ancillary services & Mid/long term fwd market(s) Day a
Slide 61: Cash flow Statement
Cash flow Statement RON mn 2012 2013 2014 2015 2016 2017 2018 Cash flow from operating activities (CFO) 7,185 8,048 6,830 5,283 4,454 5,954 7,385 Thereof, Depreciation, amortization and impairments 2,852 3,355 4,806 6,761 3,464 3,580 2,872 including write-ups Change in net working capital (NWC) 7 -7
Slide 62: Income Statement
Income Statement RON mn 2012 2013 2014 2015 2016 2017 2018 Sales1 26,574 24,492 21,862 18,493 16,647 19,435 22,523 Clean CCS Operating Result 5,857 6,019 5,213 2,529 1,700 3,273 4,804 Thereof Upstream 5,754 5,542 4,667 919 575 1,674 3,224 Downstream Oil 31 374 654 1,315 1,112 1,533 1,335 Downstream
Slide 63: Operating Result
Operating Result RON mn 2012 2013 2014 2015 2016 2017 2018 Clean CCS Operating Result 5,857 6,019 5,213 2,529 1,700 3,273 4,804 Thereof Upstream 5,754 5,542 4,667 919 575 1,674 3,224 Downstream Oil 31 374 654 1,315 1,112 1,533 1,335 Downstream Gas 361 171 -60 -145 11 220 360 Corporate and Other -104
Slide 64: Key financial indicators (consolidated)
Key financial indicators (consolidated) in RON mn 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sales 20,127 16,090 18,616 22,614 26,258 24,185 21,541 18,145 16,247 Clean CCS EBIT 3,815 1,870 3,325 5,475 5,855 6,015 5,202 2,522 1,694 EBIT 1 1,205 1,620 2,986 4,936 5,662 5,958 3,338 -530 1,469 EBITD 3
Slide 65: Key financial indicators (consolidated) – restated
Key financial indicators (consolidated) – restated1 in RON mn 2016 2017 2018 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Sales 16,647 19,435 22,523 4,875 4,976 6,260 6,413 5,420 5,900 Clean CCS Operating Result 1,700 3,273 4,804 958 735 1,685 1,426 1,227 998 2 Operating Result 1,476 3,270 5,213 1,080 701 1,
Slide 66: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations Tel: +40 372 161 930 E-mail: investor.relations.petrom@petrom.com Homepage: www.omvpetrom.com 2019 Financial Calendar October 30: Q3 2019 results 66 | OMV Petrom Capital Market Story – September 2019