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Eni — Investor Presentation 2019
Mar 15, 2019
4348_rns_2019-03-15_98f275db-8d8e-478f-99e3-7f127ef802c3.pdf
Investor Presentation
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STAKEHOLDER VALUE THROUGH THE ENERGY TRANSITION
IINFO
DIGITAL
SIGN
Disclaimer
This document contains forward-looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In addition, Eni's management may make forward-looking statements orally to analysts, investors, representatives of the media and others. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on capital, risk management and competition are forward looking in nature. Words such as 'expects', 'anticipates', 'targets', 'goals', 'projects', 'intends', 'plans', 'believes', 'seeks', 'estimates', variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Eni's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Eni's Annual Reports on Form 20-F filed with the U.S. Securities and Exchange Commission (the "SEC") under the section entitled "Risk factors" and in other sections. These factors include but are not limited to:
Fluctuations in the prices of crude oil, natural gas, oil products and chemicals;
- Strong competition worldwide to supply energy to the industrial, commercial and residential energy markets;
- Safety, security, environmental and other operational risks, and the costs and risks associated with the requirement to comply with related regulation, including regulation on GHG emissions;
- Risks associated with the exploration and production of oil and natural gas, including the risk that exploration efforts may be unsuccessful and the operational risks associated with development projects;
- Uncertainties in the estimates of natural gas reserves;
- The time and expense required to develop reserves;
- Material disruptions arising from political, social and economic instability, particularly in light of the areas in which Eni operates;
- Risks associated with the trading environment, competition, and demand and supply dynamics in the natural gas market, including the impact under Eni take-or-pay long-term gas supply contracts;
- Laws and regulations related to climate change;
- Risks related to legal proceedings and compliance with anti-corruption legislation;
- Risks arising from potential future acquisitions; and
- Exposure to exchange rate, interest rate and credit risks.
Any forward-looking statements made by or on behalf of Eni speak only as of the date they are made. Eni does not undertake to update forward-looking statements to reflect any changes in Eni's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Eni may make in documents it files with or furnishes to the SEC and Consob.
OUR DISTINCTIVE FACTORS
Fast monetisation of discoveries Financial discipline Access to new acreage Original renewables model Strong exploration results
Fast. Efficient. Responsible.
2019-22 STAKEHOLDER VALUE THROUGH THE ENERGY TRANSITION
STRATEGY PRESENTATION 2019-2022
DRIVING VALUE THROUGH TECHNOLOGY
* Estimated on a 100% share basis
UPSTREAM KEY TARGETS
A GLOBAL RANGE OF EXPLORATION OPPORTUNITIES
FOCUS BLOCK 15/06 STRATEGY PRESENTATION 2019-2022
TECHNOLOGY: OUR COMPETITIVE ADVANTAGE
START UPS DRIVING GROWTH
| PRODUCTION GROWTH | 4YP MAIN START UPS | ||||||
|---|---|---|---|---|---|---|---|
| Mboed 1.88 1.85 |
>2.1 | 2.4 | CAGR 2018-22 |
2019 Algeria – Berkine & BRN Pipeline Egypt – Baltim SW Mexico – Area 1 Norway – Trestakk |
2020 Indonesia - Merakes Congo - Nené ph.2B Egypt - Meleiha ph.2 Norway - Smorbukk |
||
| = new project start-ups and ramp-ups | 3.5 % | 2021 Angola – Cabaça North, Northern Gas Complex Italy - Cassiopea Norway – Fenja, Balder X |
2022 Congo – Nené ph.3 Libya – A/E Structures Mozambique – Coral FLNG Norway – Johan Castberg UAE – Dalma gas |
LONG TERM GROWTH: CAGR @ 2025 3.5%
AREAS OF UPSTREAM GROWTH
LONG PIPELINE OF NEW PROJECTS
| Coral ph.2 (Mozambique) |
2019 - 2022 |
||||||
|---|---|---|---|---|---|---|---|
| Bonga SWA (Nigeria) |
Kalimba cluster (Angola) |
# MAIN FIDs | |||||
| (Libya) Balder X Meleiha ph.2 (Norway) (Egypt) Dalma gas Berkine (UAE) (Algeria) |
A/E Structures Nené ph.3 (Congo) |
Lower Zakum | Rovuma LNG ph.2 (Mozambique) Minsala (Congo) Lower Zakum LTDP-2 (UAE) |
18 | |||
| FID 2019 |
2020 | 2021 - 2022 |
2023-2030 | ||||
| Umm Shaif gas ph.1 Hail & Ghasha (UAE) (UAE) NGasComplex Rovuma LNG ph.1 (Angola) (Mozambique) |
Bouri GUP (Libya) |
Umm Shaif (UAE) UDR gas |
LTDP-1 | Umm Shaif LTDP-2 (UAE) Kalamkas (Kazakhstan) |
2019 - 2022 RRR |
||
| Kashagan (Kazakhstan) |
Compression | (UAE) Karachaganak ph.3 (Kazakhstan) |
Umm Shaif gas ph.2 (UAE) D Structure (Libya) |
>100% | |||
| F/Q Structures (Libya) |
| CAPEX | UPSTREAM CFFO € bln | ||
|---|---|---|---|
| 14 | |||
| ~ € 6.5 BLN PER YEAR |
13 | ||
| 12 | 13.6 | ||
| FCF 2019 - 2022 |
11 | 11.5 | |
| 10 | |||
| 22 | 2019 | 2022 | |
| € bln |
Brent \$/bl | 62 | 70 |
| Exchange Rate €/\$ | 1.15 | 1.21 |
~2X COVERAGE OF DIVIDEND WITH UPSTREAM FCF
MID-DOWNSTREAM KEY TARGETS
RETAIL WILL DOUBLE EBIT RESULT
FAST GROWING CUSTOMER BASE
TOTAL CUSTOMERS IN 2022 +26% vs 2018 12 mln
HIGH VALUE CUSTOMER BASE
EXTRA - COMMODITY
LNG: DOUBLING OUR PORTFOLIO
GAS: A KEY TRANSITIONAL RESOURCE
R&M – BIGGER AND MORE PROFITABLE
* Include the pro-forma contribution of ADNOC Refining
DECARBONISATION:
THATA
AHATA
HATTA
AHARAN
HARTHART
HARTHART
THE DUAL CHALLENGE OF ENERGY STRATEGY PRESENTATION 2019-2022
Energy Demand IEA New Policies Scenario 21 CO2 Emissions IEA Sustainable Development Scenario
UPSTREAM NET ZERO EMISSIONS* BY 2030 (SCOPE 1)
DIRECT INTERVENTION IN FORESTRY
> 20 MTON CO2/Y CAPTURED @ 2030
CIRCULAR ECONOMY
CAPEX 2019-2022 > € 950 Mln
10:30 11:00 $11:30$ $12:00$ FINANCIAL PLANAND DISTRIBUTION POLICY
GBPUSD
EUR 1,17 USU
USD 785 HKD
USD 110,35 JPY
GBR 1,33 USD
USD 1,33 CAD
$12:30$
1.30 +0.0032(0.24 %
USDCAD
EUR/USD
USD/JPY
GBP/USD
USD/CAD
B400 ABOOO 00099:0088
8100.00000 CEP/USD 8000.00000 7900,00000 7800.00000
7700,00000
7600,00000
7500,00000
Step 1
Step 2
USDHKD
USD/JPY
$\approx$
Change
EUR/USD
400.00000
Change
Exchange Rate:
8/25/2018
USDYIPY
$10:00$
2021
2022
2023
. . . . . . . . . .
$9:30$
2019
2020
OUR CAPEX PLAN STRATEGY PRESENTATION 2019-2022
BALANCING CAPITAL DISCIPLINE AND SUSTAINABLE LONG TERM GROWTH
STRATEGY PRESENTATION 2019-2022
UPSTREAM: FOCUS ON PROJECTS UNDER DEVELOPMENT
CASH FLOW GROWTH STRATEGY PRESENTATION 2019-2022
All figures @ 2019 scenario: Brent \$ 62 /bl, Italian gas price (PSV) € 266 /kcm, \$/€ exchange rate 1,15
REMUNERATION POLICY STRATEGY PRESENTATION 2019-2022
| 2019 | 2020-2022 |
|---|---|
| DIVIDEND 0.86 € per share |
DIVIDEND progressive with underlying earnings and FCF |
| BUYBACK € 400 mln |
BUYBACK When leverage steady below 20%: € 400 mln/year @ Brent \$60 - 65/bbl € 800 mln/year @ Brent >65/bbl |
| Balance Sheet @ 1/1/2019 |
Cash Flow 2019 |
Income Statement 2019 |
||||
|---|---|---|---|---|---|---|
| Capital Employed Net Debt |
~6 € bln ~6 € bln |
Free Cash Flow |
~1 € bln | Operating profit Net Profit |
~0,3 € bln ~ ~ |
|
| Year end Leverage: |
~10 p.p. |
AMBITIONS TO 2030
BACK-UP
ASSUMPTIONS AND SENSITIVITY
| 4YP Scenario | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Brent dated (\$/bl) | 62 | 65 | 68 | 70 | |
| FX avg (\$/€) |
1.15 | 1.17 | 1.19 | 1.21 | |
| Std. Eni Refining Margin (\$/bl) | 5.0 | 5.5 | 5.5 | 4.7 | |
| NBP (\$/mmbtu) |
8.2 | 6.7 | 6.8 | 6.9 | |
| PSV (€/kmc) |
266 | 225 | 222 | 220 | |
| Sensitivity 2019 |
EBIT adj (€ mln) |
net adj | (€ mln) | FCF (€ mln) | |
| Brent (+1 \$/bl) |
+285 | +170 | +195 | ||
| Std. Eni Refining Margin (+1 \$/bl) | +150 | +105 | +150 | ||
| Exchange rate \$/€ (-0.05 \$/€) |
+395 | +175 | +170 |
Brent sensitivity assumes oil and gas changes are directional and proportional Sensitivity is valid for limited price variations
KEY PROJECTS 1/2
STRATEGY PRESENTATION 2019-2022
KEY PROJECTS 2/2
STRATEGY PRESENTATION 2019-2022
| CONGO | Nené ph.2B |
65% WI | NORWAY | Balder X |
70% WI |
|---|---|---|---|---|---|
| LIQ | Progress: 5% Start up: 2H 2020 Peak 100%: 13 kboed |
@2021 | LIQ | Progress: under FID (2019) Start up: 2H 2021 Plateau 100%: 40 kboed |
@2023 |
| MOZAMBIQUE GAS |
Coral FLNG | 25% WI | ABU DHABI GAS |
Dalma Gas | 25% WI |
| Progress: 29% Start up: 1H 2022 Plateau 100%: 97 kboed |
@2023 | LIQ | Progress: under FID (2019) Start up: 1H 2022 Plateau 100%: 55 kboed |
@2023 | |
| NORWAY | Johan Castberg | 21% WI | LIBYA GAS |
A & E Structures | 50% WI |
| LIQ | Progress: 20% Start up: 2H 2022 Plateau 100%: 205 kboed |
@2024 | Progress: under FID (2020) Start up: 2H 2022 Plateau 100%: 160 kboed |
@2025 | |
| MOZAMBIQUE GAS |
Rovuma LNG | 25% WI | ABU DHABI GAS |
Hail & Ghasha |
25% WI |
| Progress: under FID (2019) Start up: 2024 Plateau 100%: 425 kboed |
@2026 | LIQ | Progress: under FID (2019) Start up: 2024 Plateau 100%: 290 kboed |
@2026 |
35
PRODUCTION DETAILS
STRATEGY PRESENTATION 2019-2022
| 2018-2021 today |
2018-2021 previous plan |
|
|---|---|---|
| Exploration discoveries | 2.5 bln boe |
2 bln boe |
| Production CAGR | ~3.5% | 3.5% |
| Upstream projects breakeven | \$ 25/bbl | \$ 30/bbl |
| LNG contracted volumes 2025 | 16 MTPA | 14 MTPA |
| Refining breakeven LT | \$ 1.5/bbl | \$ 3/bbl |
| Decarbonization strategy |
Zero Upstream carbon footprint by 2030 |