Omv Petrom Sa · BVB:SNP
Omv Petrom Sa — Investor Presentation (September 2021)
70 slides from Omv Petrom Sa's investor presentation, September 2021
Slide 1: Capital Market Story
Capital Market Story September 2021 OMV Petrom S.A.
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, This presentation may contain forward-looking statements. These statements and should not be construed as, constituting or forming part of, any actual reflect the Company’s current knowledge and its expe
Slide 3: Contents
Contents Investment proposition Strategy 2021+ Q2/21 results review Swift reaction to market environment Outlook FY20 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 rep
Slide 4: Investment proposition
Investment proposition OMV Petrom S.A.
Slide 5: OMV Petrom's Investment Proposition
OMV Petrom’s Investment Proposition Integrated Oil and Gas company Earnings resilience and capital High safety standards stewardship Cost efficiency and operational Strong cash conversion and attractive excellence shareholder return 5 | OMV Petrom Capital Market Story – September 2021
Slide 6: 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 793 filling stations, operated via 2 brands: Petrom and OMV 5.0 mn t total refined product sales (thereof 2.6 mn t retail sales) Brazi gas-fired power plant (capacity 860 MW); net ele
Slide 7: Shareholder structure and capital market environment
Shareholder structure and capital market environment OMV Petrom S.A. shareholder structure1 (%) 7% OMV2: Austria’s leading integrated international oil and gas company Fondul Proprietatea3: listed fund with ~82% of AUM invested4 in the energy sector 21% Romanian State, no special rights attached 51%
Slide 8: Attractive shareholders' return
Attractive shareholders’ return 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, in line wit
Slide 9: OMV Petrom – a sustainable choice for our stakeholders
OMV Petrom – a sustainable choice for our stakeholders Sustainability ▪ 5 pillars: HSSE, Carbon Efficiency, Innovation, Employees, strategy 2019-25 Business Principles and Social Responsibility ▪ Employees’ health and safety remain top priority Social ▪ Support for ~ 60 social projects in more than
Slide 10: Sustainability Strategy 2025
Sustainability Strategy 2025 HSSE vision: “ZERO Harm – NO Losses” Zero work related fatalities Stabilize Lost-Time Injury Rate at below 0.3 Carbon efficiency Reduce OMV Petrom’s carbon intensity of operations by 27%1 until 2025 (vs. 2010) Phase out existing routine flaring and venting latest
Slide 11: Our HSSE vision: ZERO Harm – NO Losses
Our HSSE vision: “ZERO Harm – NO Losses” 2020 LTIR1: 0.15 (2019: 0.31), the best annual performance since privatization in 2004 2020 TRIR2: 0.29 (2019: 0.68) Upstream: Asset Moesia, Asset Oltenia and Kazakhstan recorded ZERO LTI Asset Moesia achieved ~14 mn man-hours without LTI Downstream O
Slide 12: Investing to reduce the environmental impact
Investing to reduce the environmental impact GHG1 intensity: reduction by 26% in 2020 vs. 2010 CDP Climate Change score2: A- ISS ESG rating improved to C+, 1st decile rank3 Upstream: New compressor station 2 at Bustuchin to reduce energy consumption and GHG emissions Rerouting a section
Slide 13: Turning efficiency savings into cash flow
Turning efficiency savings into cash flow Clean CCS Operating Result margin1 (%) Clean CCS ROACE (%) 14.3 13.8 21 18 17 9.8 12 10 6.4 4.5 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Cash flow (RON bn) Net cash and Debt (RON bn) 1.2 2.0 1.6 1.4 0.5 7.4 6.8 6.0 5.6 4.5 7.0 7.5 5.6 4.0 -2.9 -2.4
Slide 14: Cost efficiency and operational excellence
Cost efficiency and operational excellence Total operating cost (RON mn) -116 Key drivers 2020 vs. 2019 Upstream: efficiency programs implemented led to cost base reduction by -3% Corporate Costs: -11% Headcount: -13% mainly as effect of outsourcing projects 2019 2020 Upstream Downstream Oil D
Slide 15: Strategy 2021+
Strategy 2021+ OMV Petrom S.A.
Slide 16: OMV Petrom's strategic directions
OMV Petrom’s strategic directions Enhancing competitiveness Developing growth Regional options expansion ► Highest integration value ► Sustainability of the reserves base ► Selective investments in Upstream ► Operational excellence ► Exploration portfolio ► Regional gas player ► Improved recovery ►
Slide 17: Upstream strategic achievements
Upstream strategic achievements 2017 - 2020 ► ~11 USD/boe stabilized production cost despite production decline ► Neptun Deep concept selected and project maturation towards Final Investment Decision ► 28 marginal fields divested, additional 40 to be transferred in H1 2021 ► Simplified footprint, 7
Slide 18: Competitiveness and value extraction from Upstream core assets
Competitiveness and value extraction from Upstream core assets OPEX (USD/ boe) 11.7 10.9 10.9 ~11 Maintain strict cost and capital discipline Maximize economic recovery by: Applying innovative IOR/ EOR2 techniques to maximize recovery 2016 2019 2020 2021 2022/23 Workovers and drilling progra
Slide 19: IOR/EOR projects to maximize economic recovery
IOR/ EOR1 projects to maximize economic recovery Polymer Flooding Surface Concept After primary and secondary recovery, typically a large amount of oil remains in the reservoir providing a significant potential for EOR methods Polymer flooding is applied to enhance the amount of oil that can be
Slide 20: Continued commitment to operational excellence in Upstream
Continued commitment to operational excellence in Upstream Increased MTBF1 (days) 950 810 ~840 737 555 Increase MTBF1 by focusing on root cause analysis, 2016 2019 2020 2021 2022/23 2025 predictive maintenance and identification of new Automated wells2 (% in total no. of wells) technologies 80 95
Slide 21: Expand in Black Sea building on the exclusive offshore knowledge (1/2)
Expand in Black Sea building on the exclusive offshore knowledge (1/2) Romania – Neptun Deep OMV Petrom (50%), ExxonMobil (50%, Operator) Bulgaria – Han Asparuh OMV Petrom (42.86%), Total (57.14% Operator) Georgia – Block II Production Sharing Contract with the Georgian Government signed in Ma
Slide 22: Expand in Black Sea building on the exclusive offshore knowledge (2/2)
Expand in Black Sea building on the exclusive offshore knowledge (2/2) Romania – Neptun Deep Bulgaria – Han Asparuh Georgia – Block II Domino-1 discovery in 2012 (first Acquisition of OMV Offshore Bulgaria Winning bidder of the international offshore deep-water exploration well) GmbH, offering
Slide 23: OMV Petrom - Operator experience
OMV Petrom - Operator experience Experience in the Black Sea HSSE Project Management "Zero Harm - No Losses" Policy ~EUR 100 mil / year upstream investment. Unparalleled Offshore operator for more than 4 decades; currently TRIR rate1: 0.29 - industry top quartile continuity of 12 years knowledge of
Slide 24: Downstream Oil strategic achievements
Downstream Oil strategic achievements 2017-2020 Fully modernized fuel storage network 4-5 years refinery turnaround cycle MyAuchan, first convenience store in a filling station in <8% Fuel & Loss in 2020 Romania: contract signed to open ~400 MyAuchan stores in ~92% refinery utilization rat
Slide 25: High level of performance in Petrobrazi refinery
High level of performance in Petrobrazi refinery Utilization rate (%) 100 Focus on operational excellence Improve refinery operations to international 90 benchmarks 80 Maximize availability and utilization rates 4-5 year turnaround cycle, limiting disruption 2016 2019 2020 2021 2025 of produ
Slide 26: Maximize Petrobrazi profitability and build a sustainable refining business
Maximize Petrobrazi profitability and build a sustainable refining business High-value products Explore selective petrochemicals opportunities Sustainable use of hydrocarbons to decrease carbon footprint Opportunity to increase profitability by capitalizing on refinery flexibility to adapt to
Slide 27: Leadership position in retail via dual brand strategy and partnerships
Leadership position in retail via dual brand strategy and partnerships Secure strong position on the retail market by clearly differentiating our two brands Increase throughput per filling Best value for money station in Romania (mn l) Top quality leader >5 National brand, undisputed leader in C
Slide 28: MyAuchan in Petrom, first convenience store in a filling station in Romania
MyAuchan in Petrom, first convenience store in a filling station in Romania Contract signed to expand the partnership to the entire Petrom branded filling stations. Roll-out to the 400 filling stations started in Q4 2020: shops in ~100 filling stations per year First opening in May 2017 17 proxi
Slide 29: Downstream Gas strategic achievements
Downstream Gas strategic achievements 2017 - 2020 ► Strengthened leading position on the Romanian gas market ► 57 TWh record high gas sales volumes in 2020 ► Enlarged sourcing to extend supply portfolio ► 4.1 TWh record high Brazi power plant net electrical output in 2020 ► Result of the gas and pow
Slide 30: Consolidated position on the Romanian gas market
Consolidated position on the Romanian gas market Diversify gas Enhanced Origination and sales channels Portfolio management Gas sales in Romania (TWh) 54.0 55.4 Sustainably preserve leading gas market position 50.4 51.4 47.3 47.0 Diversify sales channels and portfolio structure Grow beyond equ
Slide 31: Gas and power operations in the neighboring markets
Gas and power operations in the neighboring markets Shift from domestic supplier to regional energy player leveraging market opportunities and existing business footprint Grow regionally with Neptun volumes monetization Transport capacities planned existing 31 | OMV Petrom Capital Market Story –
Slide 32: IMO 2020: OMV Petrom capitalized on market opportunities
IMO 20201: OMV Petrom capitalized on market opportunities despite challenging environment New sulfur limit (0.5%) imposed for ships: potential opportunity for refiners2 OMV Petrom’s flexibility and resilience proved in 2020: Entered Constanta market with new product: very low-sulfur MFO3 blend
Slide 33: Success built on three core strategic enablers
Success built on three core strategic enablers People & Technology & Sustainability Organizational Culture Innovation ► Supporting Business Growth ► Digital Journey: Upstream ► Safety: ZERO Harm - NO losses; DigitUp; Downstream Keep leading position in Process ► Leadership Development DigitalMotion;
Slide 34: OMV Petrom Digital Journey: smart opportunities across the value chain
OMV Petrom Digital Journey: smart opportunities across the entire value chain Flagship digitalization program in Upstream Digital Rig of the future: automation, digital controls, automated workflows GeoWorkspace: remote access to all critical applications live in Romania Visual Inspection app:
Slide 35: Q2/21 results review
Q2/21 results review OMV Petrom S.A.
Slide 36: Improving economic environment
Improving economic environment Oil price (USD/bbl) and FX (RON/USD) OMV Petrom indicator refining margin (USD/bbl) 4.8 4.8 4.9 4.9 4.9 4.27 4.0 4.1 4.4 4.1 69.0 2.80 4.1 61.1 43.4 44.4 67.3 1.85 2.00 60.0 29.9 42.9 44.2 0.94 29.6 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Avg Urals price in USD/bbl (left axis) A
Slide 37: Romanian environment recovered to pre-COVID levels
Romanian environment recovered to pre-COVID levels Q2/211: 13.6% yoy; +1.8% qoq; GDP growth above pre-COVID level 2021e2: +7.4% yoy June 21/June 201: 3.9% CPI on an upward trend 2021: 4.1%3 Demand Q2/21 6m/21 6m/21 yoy yoy vs. 6m/19 Fuels4 +28% +11% +12% Gas5 +12% +8% +9% Power6 +14% +8% +1%
Slide 38: Key messages Q2/21
Key messages Q2/21 Clean CCS Operating Operating Cash Clean CCS Financial result Flow ROACE resilience RON 0.9 bn RON 1.5 bn 7.4% >3X yoy +23% yoy vs. 10.3% in Q2/20 • Despite higher yoy contribution from drilling • Neptun: ready to act as Operator for and workovers, impact of natural decline Neptun
Slide 39: Operational performance reflects recovering, yet challenging market environment
Operational performance reflects recovering, yet challenging market environment Upstream Downstream Oil Downstream Gas Hydrocarbon production (kboe/d) Refinery utilization rate (%) Gas sales volumes (TWh) -9% -2% -14% -4% +2% +1% 147 141 140 139 14.36 134 13.06 13.25 96 12.11 95 11.21 71 69 67 67 65
Slide 40: CAPEX and E&A: cautious approach maintained in a volatile market
CAPEX and E&A: cautious approach maintained in a volatile market Group organic CAPEX* Organic CAPEX (RON bn) 6m/21 at RON 1.2 bn: 22 new wells and sidetracks; ~380 workovers Projects in the tank farm area in Petrobrazi -28% -28% Preliminary works for coke drums replacement in Petrobrazi 4.2
Slide 41: Income Statement: results mainly supported by improved commodity prices
Income Statement: results mainly supported by improved commodity prices Clean CCS Operating Result (RON bn) 20% +20% Q2/21 Clean CCS Operating Result evolution reflects: 209% +207% 1.50 ► Higher oil prices 1.25 0.85 ► Higher refining margin 0.28 ► Lower contribution from refining hedges and power
Slide 42: Clean CCS Operating Results: improved commodity prices and refining margins
Clean CCS Operating Results: improved commodity prices and refining margins Upstream (RON mn) Realized crude price +139% Higher gas price -168 473 -11 -27 Lower exploration expenses 808 Hydrocarbon sales -10% (130) Negative FX effect Q2/20 Market Volume Exploration Other Q2/21 effects Down
Slide 43: Clean CCS Operating Results: improved oil price
Clean CCS Operating Results: improved oil price Upstream (RON mn) Realized crude price +69% Lower depreciation -300 784 18 15 Lower exploration expenses 1,025 27 Hydrocarbon sales -9% 6m/20 Market Volume Exploration Other 6m/21 effects Negative FX effect Downstream (RON mn) Improved marg
Slide 44: Cash Flow: higher commodity prices impact net working capital
Cash Flow: higher commodity prices impact net working capital Cash Flow from Operating Activities (RON bn) +3% +23% +23% 2.7 2.6 1.5 1.2 2.2 3.3 Q2/21 CFO: increase driven by Operating Result has been reduced by 0.8 1.7 negative working capital impact due to upward trend in commodity prices 0.5 -0
Slide 45: Swift reaction to market environment
Swift reaction to market environment OMV Petrom S.A.
Slide 46: OMV Petrom continues to promptly manage COVID-19 crisis
OMV Petrom continues to promptly manage COVID-19 crisis Ability to cope with challenges ► Proven track record in managing economic crises ► Integrated business model supports financial results ► Resilience in highly volatile market, underpinned by business optimization and strict cost discipline ► 2
Slide 47: Strong response to adjust to the weak market environment
Strong response to adjust to the weak market environment Planned reductions of Targets achieved ~RON 2.0 bn (2020 vs. 2019) ✓ ▪ Rephased and optimized long-term delivery projects RON 1.2 bn1 Reduced ▪ Cut of non-committed CAPEX (30%)2, 3 CAPEX ▪ Decrease by >30% of number of wells drilled ▪ Decrease
Slide 48: Prepared to cope with challenges
Prepared to cope with challenges Net Debt/(Cash) (RON bn) 1.3 40 Strong balance sheet -0.2 No gearing -2.9 -4.9 -6.0 -6.5 2015 2016 2017 2018 2019 2020 Group’s Clean CCS Operating Result breakdown (RON bn) 71 64 52 54 Integrated business model supports financial 4.8 44 4.6 42 results 3.3 2.5 2
Slide 49: Outlook
= OMV Petrom The energy for a better life.
Slide 50: Outlook: 2021 oil price estimate revised upwards
Outlook: 2021 oil price estimate revised upwards Assumptions/ Targets Assumptions/ Targets Indicators Actual 2020 2021 2022-2023 averages USD 65-70/bbl Brent oil price USD 41.84/bbl USD 60/bbl (prev. USD 60-65/bbl) Decline ~6% yoy1 Production 145 kboe/d Decline ~5% yoy1 (prev. ~5% yoy1) USD ~4/bbl R
Slide 51: Sensitivities in 2021
Sensitivities in 2021 OMV Petrom Group main sensitivities Operating Result impact Brent oil price USD +1/bbl ~EUR +20 mn Equity gas price EUR +1/MWh ~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 +35 mn 51 | OMV P
Slide 52: FY20 results review
FY20 results review OMV Petrom S.A.
Slide 53: CAPEX and E&A
CAPEX and E&A Organic CAPEX Group organic CAPEX* (RON bn) 2020 at RON 3.0 bn: 63 new wells and sidetracks 830 workovers -28% -28% Securing long-term logistic access to Petrobrazi refinery 4.2 Bio-compliance blending project -4% 3.0 2021E at RON ~2.9 bn: 2.9 Wells and sidetracks: up to
Slide 54: Income Statement highlights
Income Statement highlights Clean CCS Operating Result (RON bn) Q4/20 Clean CCS Operating Result reflects: -50% 4.57 ► Lower oil and gas prices -58% 2.29 ► Weak refining margin 1.12 0.47 ► Decreased fuel sales volumes partially offset by solid margins Q4/19 Q4/20 2019 2020 Co&O and Cons Downstream
Slide 55: Clean CCS Operating Result
Clean CCS Operating Result Upstream (RON mn) 2,845 Lower oil and gas prices One-off positive effect in Q1/19 -2,872 7 Lower clean exploration expenses -183 123 95 2019 Market Volume Exploration Other 2020 Ongoing cost optimization effects Downstream (RON mn) Significantly stronger power pe
Slide 56: Cash Flow highlights
Cash Flow highlights Cash Flow from Operating Activities (RON bn) -18% -18% 6.8 5.6 -30% 7.1 4.6 Q4/20 CFO: lower decrease than Operating Result due 1.8 1.2 to improved net working capital 1.8 -0.1 0.2 1.0 -0.3 1.0 Q4/19 Q4/20 2019 2020 Sources of funds Net Working Capital Free Cash Flow 1 (RON bn
Slide 57: Upstream KPIs
Upstream KPIs OPEX1 Key drivers 2020 vs. 2019 (USD/boe) 0% -0% 11.69 10.90 11.18 10.90 10.88 OPEX in USD/boe terms stabilized: Ongoing cost optimization Lower production available for sale 2016 2017 2018 2019 2020 Hydrocarbon production (kboe/d) Total Upstream production -5%, due to: 174 -5% -5%
Slide 58: Downstream Oil KPIs
Downstream Oil KPIs OMV Petrom Indicator refining margin Key drivers 2020 vs. 2019 (USD/bbl) 7.75 6.98 6.28 -38% -38% 4.67 Refining margin -38% due to lower products spreads 2.89 2016 2017 2018 2019 2020 Retail sales volumes (mn t) and Retail Operating Result per filling station (trend) -8% -8% 2.
Slide 59: Downstream Gas KPIs
Downstream Gas KPIs Gas sales volumes (TWh) +4% +4% Key drivers 2020 vs. 2019 57.03 54.84 50.36 51.40 47.32 Record high gas sales volumes, built on third party acquisitions Gas sales to regulated market in H1/20: 6.97 TWh 2016 2017 2018 2019 2020 Net electrical output +23% +23% (TWh) 4.17 3.82 3
Slide 60: Appendix
~-Appendix © OMV Petrom The energy for a better life.
Slide 61: Upstream Romania map
Upstream Romania map 1 61 | OMV Petrom Capital Market Story – September 2021
Slide 62: Romanian oil market overview in 2020
Romanian oil market overview in 2020 Supply IMPORTS: various 67% 33% PRODUCTION TRANSPORTATION: Conpet Refineries (combined nameplate capacity ~13 mn tpa) processed crude oil ~10.31 mn tpa 70% 30% (of which ~6.8 mn t from import) Refineries Petroleum Rompetrol Products Petrobrazi LukOil (Petrotel) I
Slide 63: OMV Petrom Group fuel retail sales
OMV Petrom Group fuel retail sales (mn l) 117 117 120 105 97 77 2016 17 18 19 2020 2,746 2,798 2,922 2,746 2,573 Republic of Romania Moldova Serbia 2016 17 18 19 2020 172 171 175 158 402 170 147 Bulgaria Black Sea 342 328 318 312 243 2016 17 18 19 2020 63 2016 17 18 19 2020 93 Total number of fillin
Slide 64: Romanian gas market overview in 2020
Romanian gas market overview in 2020 Regulatory Regulatory Body Romanian Energy Regulatory Authority (ANRE) NET IMPORTS: various 17% 83% PRODUCTION: , Romgaz, … Supply STORAGE: TRANSPORTATION: Transgaz Romgaz, Depomures, Amgaz SUPPLY: , Romgaz, Engie Romania, E.ON Energie Romania, ... Distribution D
Slide 65: Romanian power market overview in 2020
Romanian power market overview in 2020 Regulatory Regulatory Body Romanian Energy Regulatory Authority (ANRE) Coal Gas Nuclear Renewables Hydro Supply Production Imports 17% 18% 21% 16% 28% Transport & Distribution System Operator (TSO&DSO) Market(s) Mid/long term fwd market(s) Ancillary services &
Slide 66: Cash flow Statement
Cash flow Statement RON mn 2016 2017 2018 2019 2020 Cash flow from operating activities (CFO) 4,454 5,954 7,385 6,803 5,556 Thereof, Change in net working capital (NWC) -27 -199 32 -256 964 Cash flow from investing activities (CFI) -2,896 -2,446 -4,261 -3,556 -3,163 Cash flow from financing activiti
Slide 67: Income Statement
Income Statement RON mn 2016 2017 2018 2019 2020 Sales1 16,647 19,435 22,523 25,485 19,717 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 Thereof Upstream 575 1,674 3,224 2,845 7 Downstream Oil 1,112 1,533 1,335 1,501 1,454 Downstream Gas 11 220 360 282 718 Corporate and Other -62 -74 -87
Slide 68: Operating Result
Operating Result RON mn 2016 2017 2018 2019 2020 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 Thereof Upstream 575 1,674 3,224 2,845 7 Downstream Oil 1,112 1,533 1,335 1,501 1,454 Downstream Gas 11 220 360 282 718 Corporate and Other -62 -74 -87 -89 -84 Consolidation 65 -80 -28 34 193 Op
Slide 69: Key financial indicators (consolidated) – restated
Key financial indicators (consolidated) – restated1 in RON mn 2016 2017 2018 2019 2020 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Sales 16,647 19,435 22,523 25,485 19,717 6,086 3,984 5,053 4,595 4,861 5,264 Clean CCS Operating Result 1,700 3,273 4,804 4,573 2,287 975 276 570 467 653 851 2 Operating Result
Slide 70: 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 2021 Financial Calendar October 29: Q3 2021 results 70 | OMV Petrom Capital Market Story – September 2021