Slide 1: Investor Update 2017
Investor Update 2017 2016 – 2020 Value & Resilience ©
Slide 2: Disclaimer
Disclaimer ALL RIGHTS ARE RESERVED © REPSOL, S.A. 2017 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: 2016-2020 Value & Resilience
2016-2020 Value & Resilience 1. Company overview and strategy 2. Upstream 3. Downstream 4. Gas Natural Fenosa 5. Financing 6. 2017 Outlook 3 3
Slide 4: Company overview and strategy
Company overview and strategy 1 4 4
Slide 5: Key messages 1Q 2017
Key messages 1Q 2017 Company overview and strategy Continued delivery on strategic objectives Bn€ ~6.5 ~6.5 (X) 1.1 ~1.1 1.7 Strong EBITDA CCS generation Net Debt/EBITDA in line with projections (1) Upstream Downstream Kboe/d 693 USD/Bbl 7.1 ~680 6.4 Production volumes ahead of plan Refining margin
Slide 6: Operational highlights 1Q 2017
Operational highlights 1Q 2017 Company overview and strategy Upstream Production: Exploration program: (1) 1Q17 = 693 Kboe/d 2% increase QoQ 5 exploratory & appraissal wells completed (2 positive) Return of Libya 20 Kboe/d in the quarter Alaska confirmed the potential of the Nanushuk p
Slide 7: Through the value chain and across the globe
Through the value chain and across the globe Company overview and strategy Upstream main Both projects Our shareholders Core businesses: Upstream and Downstream ~700 kboepd ~1 Million bpd refining production capacity ~2.4 billion boe 20% stake in GNF proved reserves (*) (*) As at 31/12/2016 7
Slide 8: 2016 - A year of strategic progress
2016 - A year of strategic progress Company overview and strategy Group FCF breakeven Divestments $/Bbl ~50 • 10% stake in GNF € 1.9 Bn ~42 ̴ 60 • Piped LPG € 0.7 Bn Target ~40 ̴ 43 • Tangguh € 0.3 Bn • TSP € 0.1 Bn • Others (eg: LPG Ecuador and Peru) € 0.6 Bn TOTAL CASH RECEIVED € 3.6 Bn Net Debt K
Slide 9: 2016 to 2020: Value and Resilience
2016 to 2020: Value and Resilience Company overview and strategy Challenge: a volatile, uncertain and complex environment Strategic Plan 2016-2020 Long term value capture Portfolio Value • Keep financial and operating Management discipline: synergies and efficiencies • Shift from growth to value • C
Slide 10: Delivery on commitments
Delivery on commitments Company overview and strategy COMMITMENT 2016 DELIVERY 0.3B€ impact in 2018 In 2016 0.3B€ already achieved Synergies New target of 0.4B€ Efficiencies (Opex & Capex) IMPLEMENTATION 0.8B€ in 2016; 1.8B€ in 2018 2016: 1,3B€; 2017 1.8B€ Capex flexibility ̴3.9 B€ average per annum
Slide 11: Efficiencies and Synergies Update
Efficiencies and Synergies Update Company overview and strategy Pre-tax cash savings COMMITMENT DELIVERY ESTIMATED // 2016 BUDGET // // 2016 // // 2017 // Synergies €0.2 B €0.3 B €0.3 B Upstream Opex & Capex efficiency €0.6 B €0.8 B €1.2 B Downstream profit improvement €0.2 B €0.3 B €0.4 B and effic
Slide 12: Resilience in the lower part of the cycle
Resilience in the lower part of the cycle Company overview and strategy 2015 2016 Upstream 2015 2016 2015 2016 Brent price ($/Bbl) 52.4 43.7 Refining margin Break (*) Even($/Bbl) ̴ 94 ̴ 61 Indicator ($/Bbl) 8.5 6.3 HH ($/MBtu) 2.7 2.5 EBITDA CCS (Billion €) 5.1 5.0 2016 • Upstream: Lower cash 3.8 20
Slide 13: Portfolio management
Portfolio management Company overview and strategy Completed 10 % Stake GNF Piped LPG Alaska dilution Eagle Ford-Gudrun 10 % Stake CLH UK wind power LPG Peru & Ecuador Exploratory licences Canada Brynhild Norway ….Latest transactions Tangguh TSP TOTAL DIVESTED 5.1 B€ 13
Slide 14: Self-financed SP 2016-2020 - 40% net cash delivered
Self-financed SP 2016-2020 - 40% net cash delivered Company overview and strategy Cash movements 2016-2020 (*) Sensitivities 5 years accumulated 2016 3.8 -0.3 3.6 -3.2 4.0 Adj. Net Contribution Bn€ FCF Income 1.5 1.3 Bn€ Brent +/- $5/bbl ~6 ~21 -1.5 -1.3 ~29 ~4 Adj. Net Bn€ FCF Income 0.8 0.6 HH +/-
Slide 15: Upstream
UPSTREAM 2 15
Slide 16: 3 core regions in the portfolio
3 core regions in the portfolio Upstream North America: Growth Production 2016: ~182 kboepd Operatorship: ~79% SouthEast Asia: FCF & Growth Gas production (2016): 71% Production 2016: ~98 kboepd • Unconventional portfolio Operatorship: ~37% • Operatorship Gas production (2016): 77% • Valuable midstr
Slide 17: 2016 Upstream Results
2016 Upstream Results Upstream RESERVES PRODUCTION (**) kboepd 690 800 +23% 2015 700 2014 2016 600 +57% 559 1P Reserves (Mboe) 1,539 2,373 2,382 500 400 355 300 (*) 200 RRR (%) 118 159 124 100 0 2014 2015 2016 (*) Organic RRR (**) It includes Talisman since the 8th of May of 2015 (***) EBITDA PROJEC
Slide 18: Assets & Projects
Assets & Projects Upstream // Exploration // AMERICA GoM Contingent resources NORTH Duvernay Marcellus Eagle Ford /Midcontinent (Canada) (USA) (USA) (USA) • Unconventional North America WI: ~31% in basin WI: 100% WI: ~89% and 37% in JV WI: 28%/~11% • Brazil: Campos-33, Sagitario • Russia: Karabashky
Slide 19: Capex optimization
Capex optimization Upstream Organic RRR (%) Average 2017-2020 118% 159% 124% ̴100% Bn$ 8 7 6 5 4 3 2 1 0 2014 2015 2016 2017 2018-2020 Exploration Capex Development Capex Average Capex 2018-2020 19
Slide 20: Efficiency program: delivering our target
Efficiency program: delivering our target Upstream ~400 M€ ~1,200 2017 Original ~350 Target 850 M€ 2016 ~50 Original Target (*) ~800 550 M€ 2016 Savings already New Savings 2017 Savings achieved in to be Target 2016 impacting achieved in (accelerated in 2017 2017 from 2018) Note: Excluding synergies
Slide 21: Downstream
3 Downstream 21
Slide 22: Sustainable cash flow generator
Sustainable cash flow generator DOWNSTREAM Downstream Refining Petrochemicals ̴1 million barrels of CORUÑA All three sites are refining capacity per BILBAO managed as a single day. petrochemical hub TARRAGONA Top quartile position among Chemical sites and crackers European peers along the cy
Slide 23: 2016 Downstream Results
2016 Downstream Results Downstream European Integrated Margin of R&M EBITDA CCS (*) Industry peer group Repsol position M€ ($/Bbl) 12 4,000 3,788 3,173 10 3,400 8 6 2,800 4 2 2,200 0 -2 1,600 -4 -6 1,000 -8 2014 2015 1Q16 2Q16 3Q16 2016 400 Source: Company filings. 2015 1Q16 2Q16 3Q16 4Q16 Peers : R
Slide 24: 2016-2020 Downstream strategy
2016-2020 Downstream strategy Downstream Maximizing value and cash generation leveraged on fully invested assets European Integrated Margin of R&M Average investments Industry peer group maximum margin Repsol position Industry peer group minimum margin Downstream resilience reinforced by the integra
Slide 25: Repsol's refining margin indicator
Repsol’s refining margin indicator Downstream $/Bbl 8 6.3 6.4 6 0.4 0.7 0.7 3.2 3.0 3.0 4 2.7 2 2.7 2.7 0 2016 Refining Margin Indicator Estimated Refining Margin Indicator 2017-2020 Base Repsol Crack Index Additional margin from projects pre-SP Efficiency and margin improvement program 25
Slide 26: Gas Natural Fenosa
Gas Natural 4 Fenosa 26
Slide 27: Gas Natural Fenosa
Gas Natural Fenosa Rationale 10% stake sold 20% remaining stake Liquid investment provides €1.9Bn proceeds financial optionality Executed with no discount to market price at 19€/share 8.6% above GNF’s unaffected Strong profitability performance through dividend stream market price of €17.5
Slide 28: Financing
FINANCING 5
Slide 29: Financial Strategic Plan 2016-2020
Financial Strategic Plan 2016-2020 Financing Sound track record Resilient Plan with stronger Conservative in managing adverse business profile financial policy conditions Commitment to reduce debt and maintain investment grade The three Rating Agencies, Standard & Poor’s, Moody’s and Fitch, confirme
Slide 30: Net Debt Evolution
Net Debt Evolution Financing €Bn 12 3.2 0.5 10 8 (3.8) (3.6) 6 11.9 Breakeven at $42 per barrel 4 8.1 2 0 Net Debt 31st Operating Cash Capex Dividends Paid Divestments Net Debt 31st Dec 2015 Flow & Others Dec 2016 Targeting FCF Breakeven at $40/Bbl 30
Slide 31: Strong liquidity position
Strong liquidity position Financing Short Term: Bn€ 1.5 ECP 1.2 Bonds 10.6 10.7 9.3 0.7 Loans Operating 0.5 Credits 9.2 committed Credit Lines 0.5 7.2 Structural committed 3.9 Credit Lines 5.5 3.9 Cash & 4.9 Equivalents 3.9 1.6 1.7 2.0 1.4 0.1 Liquidity as of 2017 2018 2019 2020 2021 2022 31st Dec 2
Slide 32: Delivery of Commitments
Delivery of Commitments Financing • Piped Gas Business, Offshore Wind, TSP, Tangguh Divestments • E&P portfolio management: Alaska, Norway GNF monetization • Sale of 10% participation in GNF • Repsol dividend reduction Dividend • Scrip dividend Synergies and Efficiencies • Efficiencies and synergies
Slide 33: Industry Context - 2017 Outlook
Industry Context 2017 OUTLOOK 6 33
Slide 34: Outlook for 2017
Outlook for 2017 2017 Outlook Our assumptions (*) 2016 2017B 2016 2017B Brent price ($/Bbl) 43.7 55.0 Refining Margin ($/Bbl) 6.3 6.4 HH ($/MBtu) 2.5 3.2 Exchange rate ($/€) 1.11 1.05 Guidance 2016 2017B 2016 2017B Production (KBoepd) 690 ̴ 680 FCF Breakeven ($/Bbl) 42 (**) ̴ 40 Capex (Bn€) 3.2 ̴ 3.
Slide 35: Investor Update 2017
Investor Update 2017 2016 – 2020 Value & Resilience ©