Eni S.p.a. · MIL:ENI
Eni — Investor Day (February 2021)
41 slides from Eni's investor day presentation, Feb 19, 2021
Slide 1: Boosting Our Transformation: Strategy Presentation 2021-2024
BOOSTING OUR TRANSFORMATION = ; x5 ane \ < —— J STRATEGY PRESENTATION | im = | ms 2021-2024 19 February 2021
Slide 2: Disclaimer
DISCLAIMER This document contains forward‐looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In add
Slide 3: Boosting Our Transformation
BOOSTING OUR TRANSFORMATION LEADING ENERGY TRANSITION CARBON NEUTRAL BY 2050 LEVERAGING INTEGRATION COMBINING RENEWABLES & CLIENTS FINANCIAL ROBUSTNESS 2024 CASH NEUTRALITY < $ 40/BBL STAKEHOLDER VALUE CREATION ENHANCED REMUNERATION 3
Slide 4: Highlights 2020
Slide 5: 2020: Fast Reaction to Covid Crisis
2020: FAST REACTION TO COVID CRISIS PEOPLE HEALTH AND BUSINESS CONTINUITY COSTS PORTFOLIO FINANCIALS >35% CAPEX REDUCTION FID RESCHEDULING ON LEVERAGE* MAINTAINED vs original 2020 guidance LARGE UPSTREAM PROJECTS AT 30% ‐€ 1.9 BLN COST SAVINGS INCREASED CAPEX ON FIRST ISSUANCE OF HYBRID vs pre‐covid
Slide 6: 2020 Main Results
2020 MAIN RESULTS OIL, GAS, LNG CCS/CCUS AND FORESTRY NATURAL RESOURCES PRODUCTION: 1,733 KBOE/D DISCOVERED RESOURCES: 400 MBOE GAS & LNG: EBIT € 330 MLN (+70%) FORESTRY REDD+: OFFSET 1.5 MTON CO2EQ.; CCUS UK LICENSE AWARDED TRADITIONAL TO BIO, BLUE, GREEN PRODUCTS ENERGY EVOLUTION RENEWAB
Slide 7: 2020 Financials
2020 FINANCIALS CASHFLOW | € Bln 5.0 2020 CFFO GUIDANCE 6.7 ACHIEVED 1.7 CFFO CAPEX FCF LEVERAGE PRE IFRS ~30% 7 CFFO and FCF @ Replacement Cost before Working Capital Adj
Slide 8: Our Strategy
OUR STRATEGY
Slide 9: An Integrated, Zero Carbon, Energy Company
AN INTEGRATED, ZERO CARBON, ENERGY COMPANY STAKEHOLDER VALUE CREATION FINANCIAL DISCIPLINE DECARBONISATION DIVERSIFICATION FLEXIBILITY & RESILIENCE SCOPE 1,2 AND 3 IN BIO, RETAIL & RENEWABLES DEPLOYMENT OF TECHNOLOGICAL INNOVATION 9
Slide 10: Enhancing Value through Digitalization & New Technologies
ENHANCING VALUE THROUGH DIGITALIZATION & NEW TECHNOLOGIES SUPPORTING BUSINESS… ASSET SUPERCOMPUTING MODELING HSE INTEGRITY CAPACITY ALGORITHMS …SHAPING THE FUTURE CO2 CIRCULAR ECONOMY & RENEWABLES & SUSTAINABLE CCU CHEMICALS FROM BREAKTHROUGH MOBILITY TECHNOLOGIES RENEWABLES TECHNOLOGIES € 1 BLN 4YP
Slide 11: Eni Net Zero Emissions by 2050
ENI NET ZERO EMISSIONS BY 2050 ABSOLUTE NET SCOPE 1+2+3 GHG EMISSIONS ‐25% LEVERS NET CARBON FREE PRODUCTS AND SERVICES ‐65% INCREASED SHARE OF GAS ON TOTAL ZERO PRODUCTION BIO‐METHANE FOR DOMESTIC USE AND MOBILITY 2018 2030 2040 2050 BIOREFINERIES AND CIRCULAR ECONOMY BLUE AND GREEN HYDRO
Slide 12: Natural Resources 2021-2024
NATURAL RESOURCES 2021-2024
Slide 13: Upstream Flexibility and Resilience
UPSTREAM FLEXIBILITY AND RESILIENCE RESILIENCE 2021‐2024 UPSTREAM CAPEX COVERAGE| $/Bbl CAPEX ‐24% 37 € 4.5 BLN AVERAGE PER YEAR 28 FLEXIBILITY >55% UNCOMMITTED IN 2023‐24 2021 2024 Upstream capex coverage = Brent price at which upstream capex are covered by upstream CFFO 13
Slide 14: Exploration Led by Gas, Time to Market & Efficiency
EXPLORATION LED BY GAS, TIME TO MARKET & EFFICIENCY MAIN BASINS & DISCOVERY EXPECTATIONS IN 4Y PLAN Barents 2021‐2024 WELLS Norwegian Sea North Sea NEAR FIELD 12% Levantine Nile Delta 44% PROVEN Western Desert BASINS 44% Sureste Arabic Gulf FRONTIER Berkine Oman Transform Margin Andamane Lower Congo
Slide 15: Cash Flow Growth
CASH FLOW GROWTH PRODUCTION | Kboe/d UPSTREAM CFFO | € Bln 4 % CAGR 2020‐2024 2,000 2,000 10.4 9 8.7 8 1,600 1,600 6.5 1,200 AVG CAPEX 1,200 2021‐2024 ~€ 4.5 BLN 800 2021 2022 2024 2021 2022 2024 New production Eni 4YP Scenario Flat $50/bbl Brent ($/bbl) 50 55 61.2 2024 PROVEN RESERVES: 55% GAS 2021
Slide 16: Gas & LNG Enhancing Equity Monetization
GAS & LNG ENHANCING EQUITY MONETIZATION BUILDING THE LNG PORTFOLIO LNG GROWTH: 14 MTPA in 2024 Europe CONTRACTED VOLUMES Far and Egypt Qatar Middle East Nigeria Indonesia Angola Australia EQUITY SHARE: Mozambique >70% in 2024 Equity Projects Third Parties Core Markets 2021‐2024 CUMULATIVE FCF: € 0.8
Slide 17: Reducing Our Carbon Footprint Towards Net Zero Emissions
REDUCING OUR CARBON FOOTPRINT TOWARDS NET ZERO EMISSIONS FORESTRY INITIATIVES MAIN CCS PROJECTS IN OPERATION AFRICA: PLANNED Angola, DR Congo, Ghana, Malawi, Mozambique, Zambia UK ‐ LIVERPOOL BAY NORWAY ‐ SLEIPNER LATIN AMERICA: Colombia, Mexico ITALY ‐ RAVENNA UK ‐ TEESSIDE LIBYA ‐ BES ASIA: UAE ‐
Slide 18: Energy Evolution 2021-2024
ENERGY EVOLUTION 2021-2024
Slide 19: Refining & Marketing: Progressive Conversion to Bio-Products
REFINING & MARKETING A PROGRESSIVE CONVERSION TO BIO‐PRODUCTS Adj. EBIT* | € Bln BIO‐REFINERIES CAPACITY Bio‐Refining and Marketing 1.4 Oil Refining (incl. Adnoc) 1.1 1.1 2 MTPA MTPA 0.6 2020 2024 PALM‐OIL FREE IN 2023 Scenario Flat Scenario Scenario Eni 2021 Eni 2021 2024 DOUBLING RESULTS BY 2024 1
Slide 20: Retail + Renewable: Increasing Integration Along Green Power Value Chain
RETAIL + RENEWABLE INCREASING INTEGRATION ALONG THE GREEN POWER VALUE CHAIN INSTALLED RENEWABLE GEOGRAPHICAL FOOTPRINT CAPACITY| GW RETAIL BASE| MLN CLIENTS 15 15 >11 >10 4 0.7 2021 2024 2030 VALUE ADDED PROPOSITION LEVERAGING OUR RETAIL BASE 20 20
Slide 21: Retail + Renewable: Maximising Value Generation
RETAIL + RENEWABLE INCREASING INTEGRATION ALONG THE GREEN POWER VALUE CHAIN Adj. EBITDA | € Bln RENEWABLE RETAIL 1 0.6 MAXIMISING VALUE GENERATION 2021 2024 21
Slide 22: Financials 2021-2024
2021-2024 FINANCIALS
Slide 23: Financial Strategy: Strong Balance Sheet
FINANCIAL STRATEGY FLEXIBILITY AND SELECTIVITY IN THE CAPEX PLAN M&A TO SPEED UP PORTFOLIO TRANSFORMATION STRONG BALANCE NEW BUSINESS COMBINATIONS TO FOCUS AND MAXIMIZE GROWTH SHEET NEW FINANCIAL TOOLS LINKED TO SUSTAINABILITY KPIs A PROGRESSIVE AND COMPETITIVE DISTRIBUTION POLICY 23
Slide 24: Selective Capex and High Value Portfolio
SELECTIVE CAPEX AND HIGH VALUE PORTFOLIO AVG CAPEX ~ € 7 BLN IRR – RENEWABLES IRR – UPSTREAM 14% 20% 65% 18% 10% 16% 6% 20% 15% 2% ‐20% Eni Scenario +20% Unlevered Levered UPSTREAM GREEN+RETAIL OTHERS Projects in execution Green: Decarbonisation, Circular and Renewables FOCUS ON GREEN & RETAIL AND S
Slide 25: Portfolio Optimization Strategy
PORTFOLIO OPTIMIZATION STRATEGY 2021 ‐ 2024 UPSTREAM DISPOSAL RATIONALIZATION OF NON CORE ASSETS PLAN € >2 BLN OTHER BUSINESSES GROSS ASSETS OPTIMIZATION NEW BUSINESS COMBINATIONS (REPLICATE VÅR ENERGI SUCCESS) 25
Slide 26: Resilient Cash Generation and Flexibility
RESILIENT CASH GENERATION AND FLEXIBILITY CFFO| € Bln 15 4YP FCF @Eni Scenario 10 AVG CAPEX 2021‐2024 € 17 BLN ~ € 7 BLN 5 4YP FCF @$50/bbl 0 2021 2022 2024 € 12 BLN Eni Scenario @50$/bbl 2024 CASH NEUTRALITY @ FLOOR DIVIDEND < $40/BBL CFFO and FCF @ Replacement Cost before Working Capital Adj. Eni
Slide 27: Remuneration Policy
REMUNERATION POLICY DIVIDEND BASED UPON ENI’S ANNUAL BRENT SCENARIO* | €/share 0.75 TOTAL OLD DIVIDEND 0.7 DIVIDEND NEW DIVIDEND 0.61 0.56 0.49 0.45 0.45 0.36 0.39 0.41 0.36 $43 Brent $45 Brent $48 Brent $50 Brent $55 Brent $60 Brent PROGRESSIVE €0.36 dividend when Brent Scenario is $43 / bbl or abo
Slide 28: Conclusions
CONCLUSIONS DECARBONISATION CARBON NEUTRAL BY 2050 DIVERSIFICATION RETAIL + RENEWABLES EBITDA > € 1 Bln @2024 FLEXIBILITY & RESILIENCE CASH NEUTRALITY < $ 40/bbl @2024 DIVIDEND INCREASE AND ENHANCED REMUNERATION ACCELERATED BUYBACK 28
Slide 29: Back Up
Slide 30: Scenario Assumptions
SCENARIO ASSUMPTIONS 4YP Scenario 2021 2022 2023 2024 Brent dated ($/bbl) 50 55 60 61.2 FX avg ($/€) 1.190 1.190 1.200 1.230 Ural MED c.i.f. ‐ Med Dated Strip ($/bbl) ‐1.0 ‐1.4 ‐1.5 ‐1.7 Std. Eni Refining Margin ($/bbl) 3.8 4.5 4.6 4.6 NBP ($/mmbtu) 4.3 4.9 5.2 5.7 PSV (€/kcm) 147 163 167 181 Sensit
Slide 31: Remuneration Policy: Total Dividend
REMUNERATION POLICY TOTAL DIVIDEND | €/share 0.86 0.86 0.84 0.81 0.79 0.77 0.75 0.72 0.69 0.66 0.63 0.61 0.58 0.56 0.53 0.51 0.49 0.47 0.45 0.43 Floor 0.41 0.38 0.39 dividend 0.36 $43 $44 $45 $46 $47 $48 $49 $50 $51 $52 $53 $54 $55 $56 $57 $58 $59 $60 $61 $62 $63 $64 $65 $66 BUYBACK (€ Mln) 300 300
Slide 32: Main Plan Targets
MAIN PLAN TARGETS DECARBONISATION DIVERSIFICATION FLEXIBILITY & RESILIENCE BIO REFINING: 2 MTPA UPSTREAM +70% vs 2020 2024 GROUP CFFO: NET EMISSIONS € 13 BLN RENEWABLES: 4 GW installed SCOPE 1+2 4X vs 2020 installed + sanctioned UPSTREAM CAPEX COVERAGE ‐50% vs 2018 RETAIL: >11 MLN CLIENTS $28/BBL +1
Slide 33: Natural Resources: Upstream + Global Gas&LNG Targets
NATURAL RESOURCES UPSTREAM + GLOBAL GAS&LNG TARGETS 2021 4YP € 4 Bln € 18 Bln CAPEX CAPEX 2021 4YP € 2 Bln € 19 Bln FCF FCF LOWER BREAK‐EVEN AND CARBON FOOTPRINT 33 33 FCF after Working Capital
Slide 34: Energy Evolution
ENERGY EVOLUTION G&P RETAIL, RENEWABLES, POWER, R&M AND CHEMICALS 2021 4YP € 1.6 Bln € 7.9 Bln CAPEX CAPEX 2021 2024 € 0.9 Bln € 2.1 Bln ADJ. EBIT ADJ. EBIT A SELF‐FINANCED SUSTAINABLE TRANSFORMATION 34 34
Slide 35: Boundary of Eni GHG Accounting
BOUNDARY OF ENI GHG ACCOUNTING ENI’S DIRECT VS. INDIRECT EMISSIONS NEW ONGOING INITIATIVES OIL&GAS Scope 1 + 2 Scope 3 ACTIVE ENGAGEMENT 15% 85% WITH KEY STAKEHOLDERS AND INDUSTRY ENERGY TRANSITION PRINCIPLES* *bp, Eni, Equinor, Galp, Occidental, Repsol, Royal Dutch Shell, Total NEW LIFECYCLE APPROA
Slide 36: Eni's Roadmap to 2050
ENI’S ROADMAP TO 2050 MtonCO2eq 505 ‐25% vs 2018 ‐65% vs 2018 ‐100% vs 2018 360 NET GHG ABSOLUTE EMISSIONS Scope 1+2+3 167 0 2030 2040 2050 2018 2030 2040 2050 UPSTREAM ENI ENI NET ZERO NET ZERO NET ZERO gCO2eq/MJ Scope 1+2 Scope 1+2 Scope 1+2+3 68 2030 2040 2050 57 38 NET CARBON INTENSITY Scope 1+2
Slide 37: Main Decarbonisation Targets
MAIN DECARBONISATION TARGET 2021 2024 2025 2030 2030 2035 2040 2040 2050 UPS ‐50% NET ZERO CARBON FOOTPRINT SCOPE 1+2 UPS NET ZERO ENI NET ZERO @2024 NET LIFECYCLE EMISSIONS SCOPE 1+2+3 VS 2018 ‐25% ‐65% NET ZERO NET CARBON INTENSITY SCOPE 1+2+3 VS 2018 ‐15% ‐40% NET ZERO GHG PROCESS FLARING | msM3
Slide 38: Main Businesses Targets
MAIN BUSINESSES TARGETS 2021 2021 2024 2025 2030 2030 2035 2040 2040 2050 RETAIL CUSTOMER BASE | MLN POD >11 15 >20 RENEWABLES INSTALLED CAPACITY | GW 4 5 15 >25 60 PALM OIL FREE BY 2023 BIO REFINING BIO REFINING | MLN TON/Y 1.1 2 5‐6 NATURAL GAS PRODUCTION | OIL & GAS 60 >90 % ON PORTFOLIO 38
Slide 39: Key Projects Starting Up in 2021-24 [1/2]
KEY PROJECTS STARTING UP IN 2021‐24 [1/2] UAE GAS Mahani 50% WI GAS Merakes 65% WI LIQ Start up: Q2 2021 Start up: January 2021 2021 Equity: 2 kboed 2021 Equity: 34 kboed Production (kboed): Progress: 88% 18 (100%) – 9 (equity ) @2023 Production (kboed): INDONESIA 84 (100%) – 50 (equity) @2022 Cabaç
Slide 40: Key Projects Starting Up in 2021-24 [2/2]
KEY PROJECTS STARTING UP IN 2021‐24 [2/2] Agogo EP ph.2 37% WI GAS Dalma Gas 25% WI LIQ Start up: 2023 (Ph.1: Dec ‘19) LIQ 2021 Equity: 6 kboed Start up: 2023 Production (kboed): Production (kboed): 30 (100%) – 10 (equity) @2023 54 (100%) – 13 (equity) @2024 ANGOLA UAE Johan Castberg 21% WI GAS Nort
Slide 41: Renewable Future Growth
RENEWABLE FUTURE GROWTH INSTALLED CAPACITY | GW 0.3 4 15 SANCTIONED, ACCESSED, UNDER STUDY 2 GW ITALY (ENI ‐ CDP) SOLAR / WIND ONSHORE 3 GW SOUTH EUROPE (ENI – X‐elio) SOLAR / WIND ONSHORE USA (ENI ‐ FALCK REN) SOLAR / WIND ONSHORE 1 GW NORTH EUROPE WIND OFFSHORE INSTALLED & ACCESSED/ ACREAGE SANCTI