BP plc · LSE:BP.
BP — FY2008 Earnings Presentation
22 slides from BP's earnings presentation, Feb 3, 2009
Slide 1: BP 4Q 2008 and Full-Year Results
BP 4Q 2008 and Full-Year Results 3 February 2009
Slide 2: Cautionary Statement
Cautionary Statement Forward Looking Statements - Cautionary Statement This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding continuing deepening of recession in OECD countries; lack of clarity in the short-term direction of the e
Slide 3: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 4: 2008: Financial results
2008: Financial results • Replacement cost profit − $25.6bn, up 39% − Per share 136¢, up 42% • Post-tax operating cash flow $38.1bn, up 54% • Total investment of $30.7bn - $21.7bn of organic capex, excluding acquisitions and asset exchanges* • Dividend per share 55.05¢ − Up 30% vs. last year in $ −
Slide 5: Operational momentum
Operational momentum • Safe and reliable operations • Upstream volumes in line with guidance − Growth in 2008 − Underlying 5% • Refining availability − Texas City and Whiting full economic capability restored − FY’08 at 89% versus 83% in 2007 − 4Q’08 at 91% • Costs − Down in fourth quarter despite s
Slide 6: Strategic delivery: Upstream growth
Strategic delivery Upstream growth • New access for future growth − Canadian Arctic and oil sands, North American shale gas, Gulf of Mexico • Continued exploration success − Gulf of Mexico, Angola, Algeria, Egypt, North Sea • Resource replacement of more than 200% • Reserves replacement ratio* of mo
Slide 7: Strategic delivery: Downstream turnaround
Strategic delivery Downstream turnaround • Restoring refining availability − Texas City and Whiting fully recommissioned • Six integrated Fuels Value Chains established • Simplified and focused marketing footprint − Aviation: exited 32 countries − Lubricants: intend to reduce direct presence in 30 c
Slide 8: Strategic delivery: Corporate simplification
Strategic delivery Corporate simplification • Restructuring − 3000 reduction in headcount in 2008 − On track for 5000 by mid 2009 • Delayering − Reduction in management layers − 20% senior positions removed • Focused Alternative Energy portfolio
Slide 9: Byron Grote, Chief Financial Officer
Byron Grote Chief Financial Officer
Slide 10: Trading environment
Trading environment $/bbl Liquids realization $/mcf Gas realization 120 20 100 16 80 12 60 8 40 20 4 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2007 2008 $/bbl Refining indicator margin 18 Change vs. 2007 15 4Q Year 12 Average realizations 9 Liquids $/bbl (37)% 34% 6 Natural gas $
Slide 11: Financial results
Financial results Change vs. 4Q 2007 Results for the fourth quarter $bn % % per share • Replacement cost profit 2.6 (24) (22) • Profit including inventory gains/losses (3.3) (176) (176) • Net cash provided by operating activities 5.6 31 32 ¢/ share • Dividend to be paid next quarter 14.0 4% Change v
Slide 12: Exploration & Production
Exploration & Production $bn pre-tax 10 • Weaker environment • Continued growth in underlying 8 production • Momentum in cost reduction 6 • Higher gas marketing and trading 4 contribution • TNK–BP loss from export duty lag 2 and impairments 0 4Q 07 FVAE/NOI Underlying 4Q 08 8,397 Underlying result $
Slide 13: Refining & Marketing
Refining & Marketing $bn pre-tax 0.6 • Significantly higher refining 0.4 availability 0.2 • Supply, trading and marketing 0.0 performance (0.2) • Lower costs (0.4) (0.6) • Higher realized refining margins (0.8) • Forex effects from barrels in (1.0) transit (1.2) • Prior month pricing of US pipeline
Slide 14: Other businesses & corporate
Other businesses & corporate $bn pre-tax 0.1 • Underlying annual charge 0.0 below expected range of (0.1) $1.5bn ± $200m (0.2) (0.3) (0.4) (0.5) (0.6) (0.7) (0.8) 4Q 07 FVAE/NOI Underlying 4Q 08 (340) Underlying result $m (379) (87) Non-operating items (NOI) $m (301) (427) Total result $m (680)
Slide 15: Sources & uses of cash
Sources & uses of cash $bn post tax 2007 2008 50 40 Disposals Buybacks Buybacks 30 Dividends Disposals Dividends Inorganic Operations capex 20 Inorganic capex 38.1 Operations 24.7 Organic Organic 10 capex capex 0 Sources Uses Sources Uses
Slide 16: Net debt ratio
Net debt ratio % 40 35 30 25 20 15 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 Net debt ratio = net debt / (net debt + equity) Net debt includes the fair value of associated derivative financial instruments used to hedge finance debt
Slide 17: Shareholder distribution
Shareholder distribution 24 21 18 15 12 9 6 3 0 (3) 2002 2003 2004 2005 2006 2007 2008 Dividends Buybacks Share issues
Slide 18: 2009 Outlook
2009 Outlook • Capital expenditure: $20-22bn • Divestments: ~$2-3bn • Full year effective tax rate: 36-39% • OB&C: expected quarterly charge of $400-500m • Higher DD&A of around $1bn
Slide 19: Tony Hayward, Group Chief Executive
Tony Hayward Group Chief Executive
Slide 20: Responding to a challenging world
Responding to a challenging world • Operational momentum − Production growth − Increased refining availability • Cost reduction − Corporate simplification − Deflation into the supply chain
Slide 21: BP strategy
BP strategy • Upstream growth • Downstream turnaround • Alternative Energy: focused, disciplined • Corporate simplification and cost reduction
Slide 22: Q&A
Q&A Tony Hayward Byron Grote Group Chief Executive Chief Financial Officer Andy Inglis Iain Conn Chief Executive Chief Executive Exploration & Production Refining & Marketing Vivienne Cox Fergus MacLeod Chief Executive Head of Investor Relations Alternative Energy