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Capital Markets Day – OMV Group

OMV Group · Mar 13, 2018 · 77 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Capital Markets Day – OMV Group – slide 1
    2025 OMV STRATEGY CAPITAL MARKETS DAY London March 13, 2018
  2. Capital Markets Day – OMV Group – slide 2
    invest in a growing company OMV Capital Markets Day Rainer Seele Rainer Seele CEO and Chairman of Chief Executive Officer Chairman of the Executive Board the Executive Board London March 13, 2018 March 13, 2018 OMV…
  3. Capital Markets Day – OMV Group – slide 3
    Created a more focused, higher performing OMV Clean CCS Operating Result Focused on cash and costs drastically reduced EUR bn free cash flow break-even, outperformed cost reduction target 3.0 Transformed Upstream into a…
  4. Capital Markets Day – OMV Group – slide 4
    Improved profitability Oil price free cash flow break-even 1 Clean CCS ROACE After dividends excluding acquisitions and disposals, USD/bbl % +75% (64)% 70 14 8 35 7 25 2015 2016 2017 2015 2016 2017 1Calculation of the…
  5. Capital Markets Day – OMV Group – slide 5
    OMVs integrated and balanced portfolio pays off strong cash flow and resilience Cash generation and oil price development 1 EUR bn 3.9 Increased cash generation despite sharp oil price decline from USD 3.3 3.2 3.0 Downstream…
  6. Capital Markets Day – OMV Group – slide 6
    Global oil and gas demand continues to grow Global primary energy demand Bn toe + 16% 16.0 15.0 1 13.8 2.8 Renewables 2.4 1.9 0.8 0.9 Nuclear Global primary demand expected to 0.7 increase by 16% by 2030 3.9 Coal 3.8 3.8…
  7. Capital Markets Day – OMV Group – slide 7
    Global oil demand growth will support new investments Global oil demand Bn tons 4.6 4.7 4.3 1 0.5 0.5 Others 0.4 Global oil demand will continue 0.5 0.5 Europe 0.6 to increase 1.2 1.2 Americas Asia Pacific, Middle East, Africa…
  8. Capital Markets Day – OMV Group – slide 8
    Global gas demand will increase by 20% until 2030 Global gas demand Bn toe 3.7 3.4 0.1 Others 3.0 0.1 0.5 Europe Asia Pacific, Middle East and 0.5 0.1 Africa drive the demand growth 0.5 1.1 Americas 1.0 Existing and…
  9. Capital Markets Day – OMV Group – slide 9
    Asia Pacific main driver for demand growth Fuels demand Petrochemical products demand Mn tons Mn tons 1,830 430 1,750 1,510 340 220 710 690 660 480 490 420 90 70 80 25 30 15 Europe Middle East Asia Pacific Europe Middle…
  10. Capital Markets Day – OMV Group – slide 10
    Market assumptions Medium term Long term Brent oil price USD/bbl 70 70 80 Central European Gas Hub price EUR/MWh 20 20 22 OMV indicator refining margin USD/bbl 5 5 FX EUR/USD rate 1.20 1.15 1.20 11 Capital Markets Day, March…
  11. Capital Markets Day – OMV Group – slide 11
    OMV 2025 Higher performance and more value ahead Leverage on proven concept of integration Significantly internationalize Upstream and Downstream Build strong gas market presence in Europe Extend record of operational…
  12. Capital Markets Day – OMV Group – slide 12
    Higher-quality Upstream portfolio Focused international player 100% 4+1 600 Reserve core 500 Replacement regions Rate 1 348…
  13. Capital Markets Day – OMV Group – slide 13
    Downstream Oil Further strengthen European position and grow internationally 1 quartile st 1 Shift to higher value products Further increase captive sales volumes Export successful European business model internationally…
  14. Capital Markets Day – OMV Group – slide 14
    Downstream Gas Build strong market presence in Europe Leading integrated supplier from North West to South East Europe Monetize increasing equity supply 80% gas to be imported by 2030 Double sales revenues and increase overall…
  15. Capital Markets Day – OMV Group – slide 15
    Continue to grow value Clean CCS Operating Result EUR bn 5 Capex 4 Acquisitions 0.75 Downstream Positive free cash flow after Capex dividends 3 Acquisitions 0.75 Long term gearing ratio target of 30% Progressive dividend…
  16. Capital Markets Day – OMV Group – slide 16
    Focused investments CAPEX Acquisitions EUR bn EUR bn 2.0 - 2.5 10 2.1 Downstream 8 years 1.8 Upstream 3 years 2015-2017 2018-2025 2015-2017 2018-2025 p.a. p.a. Efficient capital allocation Value adding acquisitions…
  17. Capital Markets Day – OMV Group – slide 17
    Capital allocation priorities 1 CAPEX ROACE TARGET 2 Acquisitions 12% 3 Dividends Mid- and long- term 4 Debt reduction 18 Capital Markets Day, March 13, 2018
  18. Capital Markets Day – OMV Group – slide 18
    OMVs growth strategy will be implemented in a safe, responsible and carbon efficient manner Safety first Carbon efficiency Recognition Carbon intensity Lost Time Process safety GHG emissions per unit Injury Rate events OMV Operations…
  19. Capital Markets Day – OMV Group – slide 19
    OMV Higher performance and more value ahead Well positioned for profitable growth Growth along the entire value chain Drive strong cash flow generation Solid basis for growth and dividends Leverage on integrated portfolio…
  20. Capital Markets Day – OMV Group – slide 20
    Capital Markets Day Johann Pleininger Deputy Chairman Upstream Executive Board Member London, March 13, 2018 OMV Aktiengesellschaft
  21. Capital Markets Day – OMV Group – slide 21
    OMV Upstream in a nutshell Focused international player 2017 0.28 1.15 bn boe 348 kboe/d Lost Time Injury Rate 1P reserves Production 82% 52:48 USD 8.8 per boe EUR 1.2 bn Production from EU/OECD countries Oil:Gas Production…
  22. Capital Markets Day – OMV Group – slide 22
    We delivered on our promises: Lower cost, increased earnings Cost development 1 Production Clean Operating Result EUR bn Kboe/d EUR mn 10x (42) -42%% 3.8 1,225 +15% 348 2.6 303 311 2.2 CAPEX E&A expenditure Production 117…
  23. Capital Markets Day – OMV Group – slide 23
    We delivered on our promises: Strengthened reserve base 1P Reserves Reserve Replacement Rate 1P Reserve Replacement Cost Mn boe 3 years RRR, % 1 year , USD/boe 1,146 1,028 1,030 116 58 73 70 77 31 17 10 2015 2016 2017…
  24. Capital Markets Day – OMV Group – slide 24
    We delivered on our promises: Portfolio upgraded, new core region Russia established UK Russia Country exit Acquisition of 24.99% in Yuzhno Russkoye Romania Pakistan Sale of marginal fields Upstream exit 1 Tunisia Libya…
  25. Capital Markets Day – OMV Group – slide 25
    Upstream strategy 2025 Renew and improve the quality of our asset base Double reserves Extend track record of operational excellence Increase cash generation Higher-quality portfolio generating more cash 26 Capital Markets…
  26. Capital Markets Day – OMV Group – slide 26
    Drive production organically and via acquisitions Production growth Kboe/d 600 500 Acquisitions 420 Production cost 348 Organic growth both in 2020 and 2025 e.g. Neptun, Nawara, USD/boe Aasta…
  27. Capital Markets Day – OMV Group – slide 27
    Ensure sustainable reserve replenishment 1P Reserve development Bn boe 2.0 1P Reserves Reserve life years 2x 8-10 1.1 Reserve Replacement Rate Gas share 3 years , % % 100 50 2017 2025 28 Capital Markets Day, March 13,…
  28. Capital Markets Day – OMV Group – slide 28
    Increase international footprint: 4 + 1 North Sea Russia CEE Australasia MEA 1 Australia New Zealand OMV Upstream regions Core region CEE Core region North Sea Core region MEA Core region Russia Development region…
  29. Capital Markets Day – OMV Group – slide 29
    Exploration: Faster and more disciplined approach Excellent Barents Sea track record Increase size and quality of E&A portfolio Grow in OMV core and development regions Achieve faster monetization of discoveries Apply proven…
  30. Capital Markets Day – OMV Group – slide 30
    Technology drives recovery and reduces downtime Highlights Mean-time-between-failure of producing wells of over 1,900 days (Austria) Reduced number of well interventions per year from over 150,000 to below 6,000 (Romania 1) Low cost…
  31. Capital Markets Day – OMV Group – slide 31
    Transform OMV Upstream into a top digital player Project examples Drilling cockpit for real-time collaboration Latest 3D visualization technology for geological interpretation Machine learning and cloud solutions for seismic data…
  32. Capital Markets Day – OMV Group – slide 32
    CEE: Sustain value generation in Romania and Austria, realize Black Sea potential Maximize profitable recovery 196 kboe/d 55% 100% Infill drillings, workovers, selected field re-developments mostly onshore gas operated 1 production…
  33. Capital Markets Day – OMV Group – slide 33
    Secure long-term sustainable contribution in North Sea 79 kboe/d Snefrid Nord Bring Aasta Hansteen on stream offshore production development approval First gas in Q4 2018 Cumulative gas production of up to 43 mn boe 65% Peak…
  34. Capital Markets Day – OMV Group – slide 34
    Build upon huge potential of Russia Realize organic growth potential 106 kboe/d 1 100% 100 kboe/d from Yuzhno Russkoye over next years onshore production gas Upside from Turonian reservoir layer Production cost Continue growth path…
  35. Capital Markets Day – OMV Group – slide 35
    Grow and access potential in Middle East & Africa Secure stable contribution from Libya 47 kboe/d 71% 20% Maintain and grow production level onshore production oil operated 1 Assess Nafoora field expansion Evaluate exploration…
  36. Capital Markets Day – OMV Group – slide 36
    Expand footprint in Australasia 17 kboe/d 53% 35% offshore production gas operated 1 Realize upside of current position in New Zealand Strong and stable cash generator Highly profitable production Exploit promising exploration…
  37. Capital Markets Day – OMV Group – slide 37
    Upstream strategy 2025 Key takeaways Renew and improve the quality of our asset base Double reserves Extend track record of operational excellence Increase cash generation 38 Capital Markets Day, March 13, 2018
  38. Capital Markets Day – OMV Group – slide 38
    Capital Markets Day Manfred Leitner Downstream Executive Board Member London, March 13, 2018 OMV Aktiengesellschaft
  39. Capital Markets Day – OMV Group – slide 39
    OMV Downstream in a nutshell 2017 Focus on Europe 15% 0.4 17.8 mn t 2.5 mn t Gas Lost Time Injury Rate Refining capacity Petrochemical capacity EUR 1.8 bn 50% 2,039 36% 11 bcm Clean CCS Fuels Retail sites Share in Borealis…
  40. Capital Markets Day – OMV Group – slide 40
    We delivered on our promises 2016 commitments DOWNSTREAM OIL DOWNSTREAM GAS CASH GENERATION Improved operational Created lean basis for IN DOWNSTREAM OIL excellence European gas sales business Maintained strict capital and cost…
  41. Capital Markets Day – OMV Group – slide 41
    Strong contributor to OMV Group financials Improvement in operations Strong cash flow generator Attractive returns Clean CCS Operating Result, EUR bn Free cash flow, EUR bn 2 RONA in % 18 1.8 1.7 Downstream 1.5 1.5 0.2 Gas 14…
  42. Capital Markets Day – OMV Group – slide 42
    Key success factors for OMV Downstream DOWNSTREAM OIL DOWNSTREAM GAS 1st quartile European refiner 1 Integrated gas value chain from and olefin producer 2 well to customer High share of secure product outlets Long-term reliable…
  43. Capital Markets Day – OMV Group – slide 43
    Downstream strategy 2025 Europe Downstream Oil: Further strengthen competitive position Downstream Gas: Become the leading integrated supplier with a strong market presence from North West to South East Europe International…
  44. Capital Markets Day – OMV Group – slide 44
    Europe further grow competitive position Cash generator Operational excellence Shift to higher value products Further increase captive sales channels Double gas sales volumes Stringent cost management 45 Capital Markets…
  45. Capital Markets Day – OMV Group – slide 45
    OMV will upgrade its European refining assets to market changes European market OMV European production 2016 - 2025 volume 2025 Change 2025 volumes Up to EUR 1 bn planned investments +12% 2.8 mn t for upgrades in 2018 - 2025…
  46. Capital Markets Day – OMV Group – slide 46
    Continuous efforts on operational excellence SCHWECHAT 3 refining sites = 1 integrated refinery concept Optimize asset utilization through intermediate product exchanges Increase the share of higher value products with minimum…
  47. Capital Markets Day – OMV Group – slide 47
    OMV Retail strong brands driving value growth OMV Petrom Avanti and Diskont 65% of network 25% of network 10% of network Premium fuels; share in sales doubled since 2012 Most trusted retail brand in Perceived as most Leading shop…
  48. Capital Markets Day – OMV Group – slide 48
    Retail ambitions for the future Profitability turnaround in last 6 years Highly efficient retail stations AT average DE average Operating Result per filling station, EUR 1,000 1 Average throughput per station, mn liters 1 2 RO average…
  49. Capital Markets Day – OMV Group – slide 49
    Strong petrochemicals position in Europe and potential for future growth Production capacity Clean CCS Operating Result petrochemicals Mn t p.a. EUR mn 2.8 300 +12% 2.5 Butadiene and 2.3 aromatics 245 1.8 Propylene 109 104…
  50. Capital Markets Day – OMV Group – slide 50
    The share in Borealis is a core asset in OMV Downstream and a basis for further growth Polyolefin production capacity Mn t p.a. Borealis Borealis contribution to 6 in polyolefins globally (incl. 100% of Borouge) OMVs Clean CCS…
  51. Capital Markets Day – OMV Group – slide 51
    OMV will further improve its best in class captive sales volume Refineries Sales Retail sales volume % of refining capacity Equity crude oil processed 24% Captive sales outlets % of refining capacity % 35% 9% 40% 31% 25% 47%…
  52. Capital Markets Day – OMV Group – slide 52
    Europe needs more natural gas EU-28 gas supply and demand Bcm 500 +40 460 40 Increasing European gas demand supported by the Imports 330 switch from coal to gas 375 Declining European indigenous production requires further gas…
  53. Capital Markets Day – OMV Group – slide 53
    OMV aims to double the natural gas sales and build a strong market presence in Europe Nord Stream 1 Yamal-Europe Increase equity gas volumes in Norway, Romania and Russia Nord Stream 2 Urengoy-Uzhgorod Leverage Nord Stream 2 to…
  54. Capital Markets Day – OMV Group – slide 54
    Develop international Downstream Oil position Export successful European model to growing markets Establish 1-2 core regions outside Europe; MoU with ADNOC Long term Expand petrochemical position Nearly double refining capacity…
  55. Capital Markets Day – OMV Group – slide 55
    The majority of demand growth driven by Asia Development of fuels and petrochemicals demand 2016 to 2030 Mn t +20 +7 +18 1 Europe Russia (60) +320 +32 +70 +12 +15 Americas +210 Middle East +50 Fuel products +18…
  56. Capital Markets Day – OMV Group – slide 56
    Increase in demand triggers substantial capacity additions Global refinery capacity vs. demand 1 Petrochemicals capacity vs. demand Mn t p.a. Mn t p.a. 155 250 145 200 = = 5,400 880 4,950 Borouge 35 x 580 25 x Schwechat…
  57. Capital Markets Day – OMV Group – slide 57
    Strong oil demand required utilization rates above 80% in Asia, Middle East and Russia Europe Russia Middle East Asia Africa 84% 88% 85% 85% 82% 82% 73% 73% Refinery utilization rate 1 65% 61% 2017 - 2030 2017 2030 2017…
  58. Capital Markets Day – OMV Group – slide 58
    Downstream strategy 2025 Key takeaways EUROPE Stay Downstream Oil champion Become the leading integrated supplier of natural gas INTERNATIONAL Export our know-how to international growth markets 59 Capital Markets Day, March…
  59. Capital Markets Day – OMV Group – slide 59
    Capital Markets Day Reinhard Florey Chief Financial Officer London, March 13, 2018 OMV Aktiengesellschaft
  60. Capital Markets Day – OMV Group – slide 60
    We deliver on our financial targets 2016 commitments Reduced annual Generated free cash CASH CAPEX 1 by 40% to flow after dividends 4 EUR 1.7 bn since 2015 of EUR 1 bn in 2017 Saved EUR 330 mn 2 Deleveraged OMV and substantially…
  61. Capital Markets Day – OMV Group – slide 61
    and create shareholder value Annualized Total shareholder return Last five 2017 Last three years years OMV 61% 39% 18% Peers 1 20% 27% 13% ATX 2 34% 19% 10% FTSEUR1ST 300 OIL & GAS 2 6% 10% 6% FTSE EUROTOP 100 2 9% 6%…
  62. Capital Markets Day – OMV Group – slide 62
    Active portfolio management We successfully transformed our portfolio at the same time we built the foundation for and disposed non-core assets profitable growth OMV UK Libya Smaller non-core assets Yuzhno Russkoye Minority in…
  63. Capital Markets Day – OMV Group – slide 63
    Stringent cost discipline Cost savings program 1 CAPEX 3 2015 normalized baseline, EUR mn EUR bn (40)% 330 2.8 250 1.9 200 1.7 Delivered 2Target 2 Target Delivered 100 Target 2016 2017 2015 2016 2017 1 Basedon…
  64. Capital Markets Day – OMV Group – slide 64
    Substantially improved financial performance Clean CCS net income attributable to stockholders EUR bn Clean CCS EPS 1.6 2017, EUR 2015 EUR 1.1 4.97 3.52 1.0 54 Oil price 52 USD/bbl Clean CCS Economic Value 44 Added 2017,…
  65. Capital Markets Day – OMV Group – slide 65
    Strong organic cash generation provides optionality Organic free cash flow after dividends Excluding acquisitions and disposals, EUR bn Organic free 1.2 cash flow after dividends 3.5 3.4 0.4 2.9 2.8 2.5 2.3 (0.7) 2015 2016…
  66. Capital Markets Day – OMV Group – slide 66
    Strengthened balance sheet Net debt and gearing ratio EUR bn 4.0 Cash position Target long-term 3.0 EUR bn 1 gearing ratio 28% 21% 2.0 4.0 30% 14% Undrawn revolving Gearing ratio credit facilities Net debt EUR bn 1 3.5…
  67. Capital Markets Day – OMV Group – slide 67
    Balanced maturity profile Maturity profile Strong investment grade rating EUR bn 1.5 Baa1 A- Outlook stable Outlook stable 1.0 June 12, 2017 Feb 12, 2018 Financing costs 1 0.5 2015 2017 0.0 2.45% 2018 2019 2020 2021 2022 2023…
  68. Capital Markets Day – OMV Group – slide 68
    Financial steering framework Shareholder return and strong rating Value + Cash Focus Strength of balance sheet and Growth in profitability and steady value enhancement adequate liquidity KPIs ROACE/EVA Free cash flow after…
  69. Capital Markets Day – OMV Group – slide 69
    Cost discipline remains an imperative OMVs cost discipline culture New efficiency target 1 Operational efficiency in both Upstream and Downstream 2018 - 2020 Capture economies of scale and strict management of overhead costs…
  70. Capital Markets Day – OMV Group – slide 70
    CAPEX disciplined investing while growing CAPEX 1 2018 - 2025 CAPEX 1 2018 - 2025 EUR bn EUR bn 3/4 1/3 Growth Downstream 2.0 - 2.5 2.0 - 2.5 on average p.a. on average p.a. 25% 1/4 2/3 Maintenance Upstream & mandatory 1…
  71. Capital Markets Day – OMV Group – slide 71
    M&A criteria focus on cash and value Strategic VALUEcriteria Financial criteria ROACE 12% Strategic fit Cash profile Return profile Balanced Upstream and Free cash flow positive mid-term Defined investment hurdles Downstream…
  72. Capital Markets Day – OMV Group – slide 72
    Funding the growth mid term perspective Sources of cash Uses of cash 3 years cumulative, indicative based on 2018 - 2020, EUR bn 2017 Operating cash flow, EUR bn Cash contribution Disposals and from M&A Gearing cost optimizations 2018…
  73. Capital Markets Day – OMV Group – slide 73
    Maintain resilience Oil price free cash flow break-even 1 After dividends excluding acquisitions and disposals, USD/bbl Generating cash, delivering value 70 Capturing value- Efficient CAPEX accretive growth spending opportunities…
  74. Capital Markets Day – OMV Group – slide 74
    Attractive shareholder returns Dividend per share EUR 50% ++50% 1.5 Record dividend of EUR 1.50 per share for 2017 proposed 1.2 We are committed to delivering an attractive and 1.0 predictable shareholder return through the…
  75. Capital Markets Day – OMV Group – slide 75
    Financial priorities and long-term targets in a nutshell Positive free cash flow after dividends Competitive shareholder returns Growing Gearing ratio Clean CCS net income attributable to stockholders 30% Strong investment…
  76. Capital Markets Day – OMV Group – slide 76
    Finance strategy 2025 Key takeaways Enable growth Drive performance Reward shareholders 77 Capital Markets Day, March 13, 2018
  77. Capital Markets Day – OMV Group – slide 77
    OMV 2025 Higher performance and more value ahead Higher-quality Upstream portfolio 600 kboe/d by 2025 4+1 core regions Balanced integrated portfolio International Downstream Oil Nearly double refining capacity Strengthen…

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