OMV Investor Presentation February 2015 OMV Aktiengesellschaft
OMV an integrated, international oil and gas company Upstream Downstream Downstream Oil Worldwide activities, mature core countries: 3 refineries with capacity Romania and Austria of 17.4 mn t Approximately 85% of 4,100 filling…
HSSE: Safety is our top priority Strong safety improvement record LTIR 1 OMV Group 0.7 0.7 0.5 -37% 0.4 2011 2012 2013 2014 1 Lost-Time Injury Rate: Number of lost time injuries per 1 mn hours worked 4 OMV Group,…
2014: Year of delivery Delivery 2014 results Production growth 8% y-o-y despite Upstream results impacted by lower oil shortfall in Libya price and Libya shortfall Shift of asset base to Upstream focus Strong Downstream results…
Difficult market environment 2014 Brent oil price in USD/bbl 108 01/2014 Collapse of Brent price in H2/14 European gas prices continuously weak after record low in H1/14 Instability in Middle East and North Africa Industry…
Financial performance in 2014 Clean CCS EBIT Exploration and Production in EUR mn Production increase by 8% to 309 kboe/d (2013: 288); 2,645 Q4/14 production: 318 kboe/d Higher depreciation and production costs 2,238 (15)% Gas and…
Our strategy is simple and clear Grow upstream Optimize downstream Focused Integrated Profitable 8 OMV Group, Investor Presentation
Transforming OMV: Portfolio shifted towards Upstream Downstream Asset base Upstream We aim to be a focused, integrated oil and gas 45% 65% company with improved overall profitability and growth in upstream 55% 35% 2010 2021…
2014: Delivery of strategic targets as announced in 2011 Stabilized production in Romania and Austria at 200-210 kboe/d R&M divestment program of EUR 1 bn energize OMV successfully delivered: +2% points ROACE improvement…
2014: Significant milestones achieved Upstream growth Successful build-up of North Sea region position Norway hit 50 kboe/d mark Exploration success in Wisting potential of 200-500 mn boe Black Sea: 3rd exploration well…
Selected Highlights 2014 Norway ramp-up and Petrobrazi modernization Norway hit 50 kboe/d, 2 in OMV Petrobrazi modernization meets expectations Upstream portfolio, in kboe/d Clean CCS EBIT 50 45 40 35 30 25 20 15 01/14 03/14 05/14…
Priorities 2015+ Mid-term goal: free cash flow Cash and neutrality after dividends dividend EUR 1.25 per share for 2014 1; maintaining dividend policy key priority Upstream Deliver post-FID projects growth Preserve options for…
Decisive actions to adjust to low oil price environment in EUR bn (20-35)% 3.9 2.5 - 3.0 Re-prioritize investment in mature core Reduce capital Re-phase projects expenditure Previous guidance Avg. avg. 2014-16 p.a. 2015-17…
OMV is resilient in difficult times Portfolio less sensitive to Balanced result through North Sea region: Increasing oil price drop integration share of E&P cash generation OMV production share, 2014 Share Clean CCS EBIT, Q4/14 Cash…
Mid-term CAPEX down by EUR 0.7 - 1.1 bn p.a. CAPEX adjustments Planning in a range of scenarios in EUR bn From mid-term recovery to USD 50/bbl for Previous guidance: 3.1 an extended period Exploration Other projects pre-FID 2.0 -…
Key projects in execution will be delivered Schiehallion Aasta Hansteen Adding 80 kboe/d in the mid-term 80 60 On stream 2017 On stream 2018 40 Peak 12 kboe/d Peak 18 kboe/d 20 0 Edvard Grieg 2016 2017 2018 2019 2020…
Production guidance Production in kboe/d 400 kboe/d still within reach, speed of delivery reduced 400 2 Ramp-up will continue at slower pace Key projects in execution slowed down where possible Up to 340 Reduced tail-end…
Long-term growth out of exploration Focused exploration strategy Portfolio renewal and growth Black Increased share of high impact exploration North Sea Sea Maximizing existing footprint and entering region new basins E&A…
Integrated Downstream Gas Focus on cash generation Improve core business Operating cash flow 1 Maintain gas sales market position in weak demand environment and optimize margin Maximize value of equity gas Strict cost and CAPEX…
Financial priorities 2015+ Cash Mid-term goal: free cash flow neutrality after dividends 2014 dividend proposal EUR 1.25 per share 1 Dividend Maintain dividend policy of long-term payout ratio of 30% of net income Maintain…
Upstream Exploration only Proved Exploration and production Production 2014 Reserves 1 Region mn boe kboe/d mn boe North Core Countries 74.6 204 763 Sea region Black Black Sea and Caspian 3.3 9 19 Sea North Sea region 13.5 37 141…
ExxonMobil BP Shell Chevron Petrobras Supermajors Total Statoil ConocoPhillips Majors Eni Upstream Novatek Anadarko Occidental 24 OMV Group, Investor Presentation Apache Devon Energy Chesapeake…
OMV Upstream asset base 2,824 Key figures 2014 Clean EBIT 2,099 2,154 2,086 1,669 EUR mn 1,516 OMV produced an average of 309 kboe/d and its proven reserves amounted to 1,090 mn boe 2009 2010 2011 2012 2013 2014…
Safety first Lost-Time Injury Rate 1 E&P group-wide Shared safety standards for OMV and contractors -59% 4 key focus areas for continuous 1.29 improvement: Visibility and Leadership Process Safety Contractor Management 0.53…
Highlights 2014 309 kboe/d average production 8% production increase (2013: 288 kboe/d) Norway hit 50 kboe/d mark Mature core: Stabilized production at 200-210 kboe/d Norway, Pakistan and New Zealand compensating political unrest…
Operational highlights Projects update Exploration Gudrun, Norway Maari, New Zealand Black Sea Gudrun (Norway) production ramping up Seven new licenses offshore Croatia Maari Growth (New Zealand): Seismic finalized in Gabon and…
Upstream priorities 2015+ Gudrun, Norway Safety and Safe operations performance Increase operational efficiency Flexibility and Managing expenditures and optionality Manage investment level cash Adjust further if…
High focus on reducing cost base Strong cost management in recent years 2015 OPEX reduced Tight contractor management Production cost indexed, 2008=100 Purchasing cost reduction 250 High focus on additional cost reduction 200…
Mature core: minimizing the decline Beating the decline Cost / CAPEX reductions have production Production in Romania and Austria, in kboe/d impact, no compromise on HSSE top priority CAGR Prioritized drilling and workover…
Self funded, profitable growth Upstream free cash flow neutral Flexible and financially robust portfolio in the mid-term Self funded expenditure profile Providing flexibility and optionality Resilient even in a prevailing low…
Solid portfolio to reach sustainable RRR Proved (1P) RRR Projects in execution 3 year average, % Edvard Grieg Schiehallion 87 Aasta Hansteen 55 Projects under appraisal for next wave of 2008 2014 reserves addition 1…
Exploration update and high impact wells1 Exploration only Exploration and production New ventures Wisting OMV/Marathon consortium awarded 7 licenses offshore Croatia North Sea Region Hagar negotiating PSAs Blackrock Seismic…
Exploration North Sea region (Norway, United Kingdom, Faroe Islands) Drilling further up to three high impact wells 2015 in the region Norway Additional appraisal drilling planned for 2015 to confirm oil discovery in operated…
Exploration Black Sea Neptun Deep (Romania) OMV Petrom (50%), ExxonMobil (Operator, 50%) Domino-1 gas discovery in 2012: a play opener Drilling campaign 2014/15: Domino-2 well drilling completed, data under evaluation; Pelican…
1 bn barrels project pipeline New ventures Exploration Appraisal Development Execution Middle East Black Sea Domino (Black Sea) FRDs (Romania) FRDs (Austria, Romania) Africa Norway FRDs (Austria, Romania) Rosebank (UK) Habban…
Major projects under development New ventures Exploration Appraisal Development Execution Production Peak Project Working Project Country Type 2P reserves Operated start production investments interest primary year mn boe kboe/d…
Major projects under appraisal New ventures Exploration Appraisal Development Execution Production Cumulative Working Project Country Type Operated start production interest primary year mn boe % FRD Romania Oil/Gas 2014-2017 200…
E&P going forward ZERO fatalities North Manage cash flow Sea region Black Deliver growth Sea Optimize portfolio Core Stable core countries Focus on best opportunities North Sea Retain options Sub- Saharan Africa Black Sea…
Downstream Oil Refining and Marketing Figures from 2014 Refining Capacity 17.4 mn t/year 89% utilization Refined product sales: 31.1 mn t Fuels storage capacity: 4.26 mn m - thereof seaside: 1.3 mn m Marketing Filling stations:…
Downstream Gas Gas and Power Figures from 2014 Equity gas supply 67 TWh (6 bcm) Gas sales 123 TWh (11 bcm) Captive use through 1.7 GW Brazi 860 MW gas-fired power generation Gas logistics business Gas transportation volume…
Downstream priorities 2015+ Cash Strong free cash flow One downstream organization Integration Strong value chain integration Restructure non-core G&P assets Performance Strong focus on efficiency and operational…
Key achievements Downstream Oil: Downstream Gas: Strategic milestones First steps towards completed restructuring Divestments completed Refining capacity reduced by 1/3 Gazprom renegotiation finalized successfully Marketing…
Market environment improved towards year-end Margins picked up significantly Spread increased again OMV indicator refining margin (left axis) Border contract tracker Ethylene/propylene net margin (right axis) CEGH USD/bbl EUR/t…
Downstream business supports OMVs resilience to lower oil price environment Stable Downstream contribution in Increasing share of Groups Clean CCS EBIT lower oil price environment % of Groups Clean CCS EBIT Clean CCS EBIT, in EUR…
Strict cost management contributes to robust performance Clean cash cost development of Downstream (10)% Optimized asset base Performance program energize OMV successfully implemented Continued cost focus will be supported…
European refineries face competitive pressure from other regions; more closures to follow Pressure on Europes oil product market, Further 10% closures in mid-term impacting especially coastal refineries required for healthy utilization…
OMV downstream market grows despite European trend EU-28 market 1 OMV market 1, 2 in mn t 2013-23, mn t 605 107 103 546 +3% -10% Turkey Turkey 2013 2023 2013 2023 1Oil market products: LPG, naphtha, gasoline, jet/kero,…
EUR 1 bn divestments in R&M completed by end of 2014 November February March K-PET Marketing business Croatia 45% stake in Marmara terminal (Turkey) 2011 2012 2013 2014 45% stake in Bayernoil September Petrom LPG…
Modernization of upstream integrated refinery Petrobrazi led to significant yield improvements 2010 2011 2012 2013 2014 2015 Concept, Execution phase Crude distillation Coker upgrade & Vacuum gasoil First full year of…
Petrochemicals integration adds significant value to R&M business Petrochemicals business contributes strongly to R&M results OMV increases the petrochemical capacity OMV R&M Clean CCS EBIT in EUR mn in kt/a Benzene and Butadiene…
Borealis contributes strongly to R&M results Successful partial start-up of Borouge 3 Solid contribution to OMVs bottom line in 2014 from Borealis (OMV share 36%) kt p.a. EUR mn 2,470 4,470 960 205 186 172 1,510 152 2,000…
Retail focus of OMV is on operational excellence Efficient sites in core markets Retail strategy 2013, throughput per station in mn liters Market leader in core markets 5 OMV Brand portfolio designed to maximize value 4 Country…
Strong business integration and further increased asset utilization Domestic equity crude % of refining capacity Competition 2013 1 11% OMV 2013 21% OMV 2015 25% Refinery E&P Refining utilization rate 2 Retail sales vol. % of…
European gas markets remain oversupplied EU 28 and Turkey: Contracted gas supply exceeds demand, in bcm Gas demand 2014 EU 28 and Turkey Demand expected to be 10% lower than 2013, -10% mainly due to above average winter…
Challenging gas market environment in EUR/MWh NCG NBP Zeebrugge CEGH Border contract tracker TTF PSV Long-term supply decoupled Hub prices across Europe Low summer/winter spreads, but from oil-indexation converge current forecasts…
Strong supply position essential in competitive market Improved competitiveness due to finalized Focus on increasing share of re-negotiations long-term contracts equity gas in OMVs gas portfolio Statoil Adjusted terms of 2012…
Gas marketing activities focused on OMVs core equity gas regions Core gas marketing region North Sea Austria: 1 bcm equity gas and long-term contract Romania: 4 bcm 1equity gas and potential additional volumes from Black Sea…
Gas to Power: Spark spreads affected by weak market conditions EUR/MWh Spark spreads, Turkey 23 CCPP Samsun (870 MW) on stream since June 2013 18 16 15 Spark spreads 2014 benefited from dry weather and 10 4% demand increase 8…
Gas market liberalization in Romania Gas prices in Romania in EUR/MWh 1 Liberalized prices for non-households 40 starting January 2015 No price increase for regulated households 29 28 28 28 29 for H1/15; deadline for…
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Q4/14 Highlights Clean CCS EBIT in EUR mn Production at 318 kboe/d, up by 15% 545 Average Brent price down by 30% to USD 77/bbl 443 Lower exploration expenses offset by higher 262 depreciation and production costs in E&P Lower…
Results in Q4/14 in EUR mn Q4/14 Q4/13 Clean CCS net income attributable EBIT (424) 99 n.m. to stockholders 1 in EUR mn Financial result (70) (80) (13)% Profit from ordinary activities (493) 19 n.m. Taxes 150 41 n.m. 348…
Special items and CCS effect Q4/14 in EUR mn Q4/14 Q4/13 in EUR mn 545 Clean CCS EBIT 545 443 CCS gains/(losses) (296) (43) (296) Clean EBIT 249 400 (12) Personnel related costs (12) (12) (590) Unscheduled depreciation (590)…
Cash flow 2014 in EUR mn in EUR mn 2014 2013 Net income 613 1,729 (65)% (410) 405 Depreciation and 3,058 2,296 33% amortization Other (410) (548) (25)% 3,058 Sources of funds 3,262 3,476 (6)% (3,910) Change in net working 405…
CAPEX and EBITD 2014 in EUR mn Key investments in Q4/14 4,110 3,832 Romania and Austria: drilling, workovers and field redevelopments Field developments in Norway (Edvard Grieg, Gullfaks, Aasta Hansteen and Gudrun) 2,951 3,292…
Exploration and Production Clean EBIT in EUR mn Q4/14 vs. Q3/14 Q4/14 vs. Q4/13 455 (108) (214) 158 75 (53) (37) 262 257 (69) 262 37 (209) 234 Q3/14 Realization Volume Exploration DD&A Other Q4/14 Q4/13 Realization…
Exploration and Production Key Performance Indicators Hydrocarbon production (kboe/d) Q4/14 vs. Q3/14 318 Production up by 2% 311 297 311 277 Norway production ramped-up as two 162 145 163 164 new Gudrun wells came on stream 138…
Exploration and Production OMV Petrom group Hydrocarbon production (kboe/d) Q4/14 vs. Q3/14 181 182 180 178 182 Clean EBIT at EUR 128 mn (down by 59%) Higher production volumes 87 87 84 84 84 More than offset by lower oil price…
Gas and Power Clean EBIT in EUR mn Q4/14 vs. Q4/13 (41) 4 80 0 (2) 41 Q4/13 Supply, Gas logistics Power Other Q4/14 marketing and trading Higher impact of the price revision in Q4/13 than in Q4/14, lower LNG result…
Gas and Power Key Performance Indicators Gas sales and trading volumes in TWh Q4/14 vs. Q4/13 147 132 118 118 Gas sales volumes down by 4% mainly 89 due to lower demand in Austria Gas trading volumes up by 37% Q4/13 Q1/14 Q2/14…
Refining and Marketing Key Performance Indicators Refining utilization rate in % Q4/14 vs. Q4/13 103 101 96 90 95 88 92 90 82 Overall refining utilization rate at 59 86%, down by 9% Marketing sales volumes decreased due to…
Actions to enhance cash flow Group CAPEX reduced in EUR bn Strong focus on CAPEX and OPEX Previous guidance: efficiency 3.9 2.5 - 3.0 Further ramp-up of Norwegian production ongoing 3.1 Projects in execution will contribute…
Outcome long-term USD 50/bbl stress test: Operations resilient, growth path impacted 1 Current operations resilient 2 Growth path would be impacted 80% of current production Slow-down of growth path EBIT positive Re-engineering…
Sensitivities on OMV Group Operating EBIT cash flow Libyan production Libyan production 2015 impact in EUR mn 100% 0% 100% 0% Brent oil price (+USD 1/bbl) +50 +40 +40 +35 OMV indicator refining +100 +100 +75 +75 margin (+USD…
Outlook 2015 Oil price Expectations range between USD 50 to 60/bbl Gas markets Remain challenging portfolio under review Refining margins Expected to come down from recent highs Marketing volumes Lower product prices expected to…
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Resourcefulness is OMVs way of achieving profitable growth in a sustainable and responsible way Water management H2 Mobility Carbon management 2nd generation biofuels Energy efficiency Revamp of waste water treatment plant,…
SRI ratings and indices Oekom research evaluated the social and environmental performance of 26 major oil and gas companies worldwide. OMV achieved Prime Status with a rating of B- on a scale from A+ to D-. [2012] OMV was added in…
Credit ratings Commitment to strong investment grade credit profile enhances the Companys high level of transparency with investors June 30, 2014 December 23, 2014 Senior unsecured: A3, outlook stable Senior unsecured: A-,…
Funding activities of the last years brought OMV in an excellent position As of December 31, 2014 Date of issue Bond Amount Coupon Maturity June 2009 Eurobond (XS0434993431) EUR 250,000,000 5.25% fix 06/22/2016 November 2014…
Overview debt structure and breakdown As of December 31, 2014 Money market 900 borrowings Bilateral, 800 syndicated, other Debt EUR 5,551 mn loans Eurobonds Cash EUR 649 mn 700 German Loan Notes Net debt EUR 4,902 mn US…
energize OMV target of +2% points ROACE impact in 2014 achieved Impact of energize OMV on ROACE in 2014 Major achievements: Clean CCS ROACE 14.5 kboe/d produced by energize initiatives mainly from Romania and Austria energize…
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