BP plc · LSE:BP.
BP — Q3 2004 Earnings Presentation
21 slides from BP's earnings presentation, Oct 26, 2004
Slide 1: 3Q 2004 results webcast
3Q 2004 results webcast tuesday 26th october 2004
Slide 2: Forward Looking Statements Cautionary Statement
Forward Looking Statements Cautionary Statement This presentation and the associated slides and discussion contain forward looking statements, particularly those regarding BP’s asset portfolio and changes to it, capital expenditure, cash flow, cash returns, costs, divestments, dividends and other di
Slide 3: Byron Grote, chief financial officer: 3Q 2004 results
Byron Grote chief financial officer 3Q 2004 results
Slide 4: 2004 – first nine months' highlights
2004 – first nine months’ highlights ! record first 9 months’ results and strong cash flow ! strategy on track ! major projects as planned ! strong growth from TNK-BP ! full year production growth estimated >10% to around 4mmboe/d ! increased margin capture in customer-facing segments ! cash returns
Slide 5: Trading environment
trading environment $/bbl $/mcf $/bbl $/te 45 6 9 160 40 8 petrochemicals 140 oil 5 35 7 120 30 4 6 100 25 gas 5 refining 3 80 20 4 15 2 3 60 10 2 40 1 5 1 20 0 0 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2003 2004 2003 2004 ∆ % vs 2003 ∆ % vs 2003 average realisations 3Q 9mths indicator margins
Slide 6: Financial results
financial results $bn % change ! results for the third quarter vs 3Q03 !pro forma 3.9 +43 !replacement cost 3.5 +53 !historical cost 4.5 +91 !post-tax adjusted operating cash flow* 6.1 +49 ! results for the nine months vs 9mths 03 !pro forma 12.6 +26 !replacement cost 11.1 +35 !historical cost 13.2
Slide 7: Exceptional & non-operating items
exceptional & non-operating items 2004 $m 1Q 2Q 3Q 9 mths $bn exceptional items 1,300 (99) 18 1,219 post-tax non-operating items and UPIS (123) (159) (419) (701) 1.5 Total 1,177 (258) (401) 518 1.0 0.5 0.0 (0.5) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2003 2004
Slide 8: Return on average capital employed
return on average capital employed % 35 competitor range* 30 BP 25 20 15 10 5 0 (5) (10) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2002 2003 2004 *BP, ExxonMobil, Shell, ChevronTexaco, Total ROACE = (pro forma result + after tax finance interest + MSI) / pro forma average capital employed
Slide 9: Pre-tax cash returns
pre-tax cash returns % 45 40 35 30 25 20 15 10 5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2002 2003 2004 pre-tax cash return = pro forma RCP before interest & tax – exceptional items – non-operating items + pro forma DD&A / pro forma average operating capital employed
Slide 10: 9mths 04 vs 9mths 03 result
9mths 04 vs 9mths 03 result pro forma basis $bn post-tax inflation & base decline 14 r&m 12 gas oil int. expense 10 exceptionals & e&p start-ups non-operating customer-facing items volumes 8 6 4 2 0 9mths 03 e&noi prices & forex a&d dd&a other 9mths 04 margins
Slide 11: 2004 strategic progress: exploration and production
2004 strategic progress: exploration and production ! production volumes !scheduled turnarounds in Alaska & North Sea !hurricane Ivan !ramp-up in 4Q from new projects ! capital spending !additional sector-specific inflation !partially mitigated by supply chain management !forex impact of weak $
Slide 12: E&P 2005 capital spending estimate
e&p 2005 capital spending estimate $ bn original plan (set in 03; range $8.0 - $8.5bn) 8.5 foreign exchange / weak $ 0.2 inflation of 3% between 03 and 04 0.3 9.0 inflation of 6% between 04 and 05 0.6 total 9.6
Slide 13: 2004 strategic progress: exploration and production
2004 strategic progress: exploration and production exploration discoveries major project start-ups 1H 1H ! Angola: Venus !Algeria: In Salah ! Egypt: Polaris, Taurt, !Trinidad: Atlas Methanol Temsah and Raven 3Q 3Q ! Russia: Sakhalin Pela Lache !Australia: NWS T4 !Angola: Kizomba A expected 4Q !Deep
Slide 14: TNK-BP
TNK-BP 2Q04 3Q04 $m impact on BP results BP share of TNK-BP net income 374 521 deferred shares consideration accretion (26) (22) impact on BP net income 348 499 production mboed 891 945 • $25m credit in 3Q relating to prior periods • new export tariffs from 1st August 2004 • rising prices, benefits
Slide 15: 2004 strategic progress: refining & marketing
2004 strategic progress: refining & marketing ! margin benefit from wider light-heavy differentials ! supply optimisation to refineries ! marketing volumes maintained ! continued success in Accelerator markets
Slide 16: 2004 strategic progress: gas, power & renewables
2004 strategic progress: gas, power & renewables ! growth in natural gas sales, NGL sales and equity gas into LNG plants ! secured LNG sales agreements for over 7.5mtpa to cover a two-train launch of the Tangguh project ! 4 more LNG carriers ordered
Slide 17: 2004 strategic progress: petrochemicals
2004 strategic progress: petrochemicals ! 9 months' production up 4% vs 2003 due to new capacity and higher utilisation ! Olefins & Derivatives separation remains on track for possible IPO during 2H05 ! Fabrics and Fibres disposal on track for year end completion
Slide 18: Sources and uses of cash
sources and uses of cash $bn post-tax 25 9 months' 03 9 months' 04 pensions disposals 20 disposals buybacks 15 dividends 10 acquisitions operations operations 18.7* 15.5* 5 organic capex 0 sources uses sources uses *post-tax adjusted operating cash flow before discretionary pension contributions of
Slide 19: Gearing
gearing % 40 35 30 25 20 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2001 2002 2003 2004 pro forma gearing = net debt/(net debt + equity – acquisition adjustment)
Slide 20: Shareholder distributions
shareholder distributions 9mths 04 $bn dividend 20.95 ¢/share 12 buybacks $5.5bn 10 8 buybacks 6 dividends share issues 4 2 0 (2) (4) 2001 2002 2003 9mths 04 ytd'04
Slide 21: Q&A session
q&a session Byron Grote chief financial officer Fergus MacLeod head of investor relations