BP plc · LSE:BP.
BP — FY2001 Earnings Presentation
44 slides from BP's earnings presentation, Feb 12, 2002
Slide 1: Presentation to the financial community
presentation to the financial community tuesday 12th february 2002
Slide 2: Forward-looking statements
This presentation and the associated slides and discussion contain statements, particularly those regarding capital employed, capital expenditure, cashflows, costs, savings, debt, demand, disposals, dividends, earnings, efficiency, gearing, growth, margins, performance, prices, production, productiv
Slide 3: John Browne
bp } ohn Browne
Slide 4: Agenda
agenda ! results for 4Q and 2001 ! progress against strategy ! highlights by business segment !q&a
Slide 5: Overview
overview ! strategy unchanged ! targets on track
Slide 6: Targets achieved in 2001
targets achieved in 2001 " 5.5% reported production growth - 190% reserve replacement " $0.8bn cost reduction " $2bn mid-cycle RCOP increase " >10% mid-cycle earnings growth - cash dividend raised ca.10% " mid-cycle ROACE increased " $13bn capex excluding acquisitions " 26% gearing …more to come in
Slide 7: John Buchanan
bp } ohn Buchanan
Slide 8: 4Q01 and 2001 results
4Q01 and 2001 results 4Q00 3Q01 4Q01 $million 2001 2000 RC profit, before exceptional items 4,090 3,049 2,204 - adjusted proforma 13,178 14,203 2,799 2,355 1,056 - reported 9,880 11,214 average realisations 28.08 23.08 17.72 oil $/bbl 22.50 26.63 3.76 2.49 2.28 natural gas $/mcf 3.30 2.91 indicator
Slide 9: Performance delivery
performance delivery RCOP $bn $2.0bn 15 improvement 14 13 12 organic 11 portfolio 10 9 8 2000 market volumes costs tax, interest 2001 result conditions & msi result source: december GFO
Slide 10: Sources of performance delivery
sources of performance delivery 2001 feb 2001 mid cycle RCOP growth ($ bn pre-tax) delivery plan upstream 5.5% higher production 0.9 0.75 3% lower unit costs gas, power 30% higher gas sales 0.1 0.1 renewables down- 11% higher product sales/margins 1.0 1.0 stream 6% lower unit costs chemicals 3% high
Slide 11: Delivering competitive returns
delivering competitive returns % return on average capital employed 25 20 BP proforma competitor range* 15 10 5 0 1998 1999 2000 2001 * competitors: XOM, RDS, CHX, TFE; 2001 estimated source: BP data and competitor published data
Slide 12: Special and exceptional charges
special and exceptional charges $bn pre-tax 1.0 0 (1.0) (2.0) (3.0) (4.0) ’96 ’97 ’98 ’99 ’00 ’01 source: BP data
Slide 13: Balanced redeployment of cash
balanced redeployment of cash $bn 30 2000 25 2001 20 disposals* dividends 15 17.9 buybacks 16.3 acquisitions 10 operations* organic 5 capex 0 sources uses sources uses *cash from operations and disposal proceeds shown after tax source: BP data
Slide 14: Gearing maintained in target band
gearing maintained in target band % 35 30 25 20 15 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1998 1999 2000 2001 source: BP data
Slide 15: Distributions
distributions ! dividends: 2Q & 4Q increases 5.75¢/share 4Q (up 9.5% on 4Q00) $4.8bn cash paid (up 9.3% on 2000) ! buybacks: $1.3bn shares * $0.1bn ARCO preference shares * 0.7% shares purchased; net share repurchases 0.4% after issues for employee share schemes source: BP data
Slide 16: Sustainable growth
sustainable growth $bn 16 mid-cycle range 14 target payout range actual result 12 dividend paid 10 8 6 4 2 0 1998 1999 2000 2001 source: BP data
Slide 17: John Browne
bp } ohn Browne
Slide 18: Delivering strategy
delivering strategy ! organic investment ! high grade portfolio ! capital efficiency ! operating efficiency # increase mid-cycle returns # grow capital employed # grow dividend …within a disciplined financial framework
Slide 19: Capital investment
capital investment $bn 1999 2000 2001 2002 capital expenditure (organic) 6.8 10.3 13.0 12-13 net investment 4.7 8.7 11.2 8-10 source: BP data, 2002 = forecast
Slide 20: Organic investment – 2002
organic investment – 2002 2000 2001 2002 upstream 6.2 8.6 8.5 +/- 2% gas, power and 0.3 0.4 0.4 +/- 5% renewables downstream 2.1 2.4 2.6 +/- 5% chemicals 1.3 1.2 0.8 - other bus & corp 0.4 0.4 0.3 - total 10.3 13.0 12.6 12-13 source: BP data, 2002 = forecast
Slide 21: 5.5% delivery
5.5% delivery production mboed (actual/potential) 5000 february 2001 l 2001: 5.5% delivered 5.5% 4000 l projects sanctioned 3000 l base being optimised 2000 0 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 base new projects like for like adjustment source: BP data
Slide 22: Delivering strategy
delivering strategy ! organic investment ! high grade portfolio ! capital efficiency ! operating efficiency # increase mid-cycle returns # growing capital employed # growing dividend …within a disciplined financial framework
Slide 23: Portfolio: Veba transaction complete
portfolio: Veba transaction complete 2002 cash $bn forecast cash from ops./ 1.0 divestments acquisition (4.2) upstream sale 1.6 Ruhrgas sale 2.1 total 0.5 debt (0.9) • market share 15% retail market share > 18% • $200m of synergies 10-18% • accretive in 2003 < 10% source: BP & Petrofinance data
Slide 24: Delivering strategy
delivering strategy ! organic investment ! high grade portfolio ! capital efficiency ! operating efficiency # increase mid-cycle returns # growing capital employed # growing dividend …within a disciplined financial framework
Slide 25: Capital efficiency: internal indicators
capital efficiency: internal indicators 1999 2000 2001 20021 drilling productivity 34.7 33.7 31.8 28.6 days/10k ft upstream projects 2 4 4 3 productivity2 retail capex productivity n/a 2.7 2.3 2.1 $m/site downstream/ chems n/a 9 9 8 project productivity2 1 2002 BP plan 2 % gap vs lead company in IPA
Slide 26: Operating efficiency
operating efficiency unit cost availability 1998=100 (%) 110 100 100 r&m 95 90 chemicals r&m 90 80 chemicals e&p e&p 85 70 60 80 '98 '99 '00 '01 '02* '98 '99 '00 '01 *BP forecast source: BP data
Slide 27: Delivering strategy
delivering strategy ! organic investment ! high grade portfolio ! capital efficiency ! operating efficiency # increase mid-cycle returns # growing capital employed # growing dividend …within a disciplined financial framework
Slide 28: 2002 performance potential
2002 performance potential mid cycle RCOP growth $bn feb 2002* feb 2001 upstream 5.5% volume growth 0.6 0.7 6% lower unit lifting costs gas, power volume and margin growth 0 0.05 renewables down- 2% higher retail fuel sales/margins 0.4 0.55 stream 1.5% unit cost reduction chemicals 2500 kte volume g
Slide 29: 2002 trading environment
2002 trading environment ! global economy & demand ! OPEC ! gas ! refining margins ! chemical margins
Slide 30: Highlights
highlights chemicals Byron Grote downstream Doug Ford gas, power & renewables John Manzoni upstream Dick Olver summary John Browne q&a
Slide 31: Global position
restructuring the portfolio 5 year market growth projection (% per annum) 0 2 4 6 8 10 1 HDPE strengthen by Nitriles Acetyls PX PTA 2 organic growth PP 3 global position PP 4 5 Ethylene 6 before Veba, 7 re-positioned EC & Solvay Ethylene bubble size represents relative volume HDPE
Slide 32: Transforming the business
transforming the business ! reducing the cost base ! focusing the footprint ! emphasising cash delivery ! delivering improved returns
Slide 33: Highlights
highlights chemicals Byron Grote downstream Doug Ford gas, power & renewables John Manzoni upstream Dick Olver summary John Browne q&a
Slide 34: Growing retail
growing retail improved site utilisation growth through brands sites volume per site sites stores sales (mlpa) index 30000 4.20 140 BP Sites BP helios sites ave fuel volume convenience growth 10000 130 4.00 120 27500 3.80 5000 110 3.60 100 25000 3.40 0 90 2000 2001 2002* 1999 2000 2001 2002* source:
Slide 35: Downstream growth in China
downstream growth in china liaoning 2001 shandong 200 sites in Guangdong shanghai Future zhejiang fujian 1,000 sites in 4 Provinces guangdong 500 sites in 3 cities
Slide 36: Highlights
highlights chemicals Byron Grote downstream Doug Ford gas, power & renewables John Manzoni upstream Dick Olver summary John Browne q&a
Slide 37: Gas, power & renewables
gas, power & renewables purpose • monetise upstream gas • build downstream gas markets • create a material renewables business medium-term targets • LNG growth >15% • gas sales growth >10% • solar sales growth >30%
Slide 38: Highlights
highlights chemicals Byron Grote downstream Doug Ford gas, power & renewables John Manzoni upstream Dick Olver summary John Browne q&a
Slide 39: 2001 production delivery
2001 production delivery mboed ! growth: 9 of 9 new projects delivered 4000 ! base: robust +5.5% base example; NA gas mmscfd 4000 3500 3000 3000 2500 2000 1500 2000 1000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2000 2001 1999 2000 2001 base new projects source: BP data
Slide 40: 2002 delivery builds on 2001
2002 delivery builds on 2001 new projects mboed mboed 4000 600 +5.5% 500 400 300 3000 200 100 0 2000 2001 2002* 2000 1999-2000 2001 2002 2000 2001 2002* base new projects ! growth: 2002 ramp-ups & 5 new project start-ups source: BP data *BP forecast
Slide 41: New project production
new project production mboed reserves 1750 1500 18% 21% 1250 12% 1000 49% 750 500 250 0 1999 2000 2001 2002 2003 2004 2005 2006 producing under construction 02 sanctions pre-sanction engineering source: BP data BP forecast 2002 – 06
Slide 42: Long-term growth
long-term growth Alaska North Sea Russia Caspian GoM Trinidad Middle Indonesia East Angola
Slide 43: Highlights
highlights chemicals Byron Grote downstream Doug Ford gas, power & renewables John Manzoni upstream Dick Olver summary John Browne q&a
Slide 44: Summary …and more to come
summary ! strategy is unchanged ! targets are on track …and more to come