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Eni Investor Presentation 2020
4348_rns_2020-02-28_3a843302-cc55-4e6b-b10d-b8af70478256.pdf
Investor Presentation
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THE NEW ENI CREATI NG VALUE THROUGH THE ENERGY TRANSI TI ON
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 documentsit files with or furnishes to the SEC and Consob.
SHAPING OUR FUTURE ENI 'S JOURNEY T O 2050
ENI'S FRAMEWORK
EXPLORATION & PRODUCTION: FLEXIBLE & RESILIENT
| RESILIENCE | FLEXIBILITY | |
|---|---|---|
| CONVENTIONAL ASSETS LOW BREAKEVEN RAPID TIME TO MARKET |
PRODUCTION CAGR 2019 - 2025 |
3.5% CONFIRMED |
| FLEXIBLE PRODUCTION PROFILE FROM 2025 | ||
| PRODUCTION PLATEAU @ 2025 | ||
| SHARE OF GAS | ||
| 60% @2030 |
~85% @2050 |
NET ZERO UPSTREAM SCOPE 1 & 2 @2030
EXPLORATION & PRODUCTION: RESILIENCE
8
EXPLORATION & PRODUCTION: FLEXIBILITY - NO STRANDED ASSETS
RENEWABLES: A GLOBAL INTEGRATED OPERATOR IN THE GREEN POWER VALUE CHAIN
DEPLOYING DIVERSIFIED TECHNOLOGIES
ENI GAS E LUCE: GROWING IN RETAIL TO CAPTURE MARKET VALUE
CUSTOMER BASE | mln SERVICES CONTRIBUTION | % EXPECTED EBITDA
Commodity
Centinaia
MAXIMIZING VOLUMES FROM EQUITY SOURCES
AN INCREASING SHARE OF VALUE GENERATED BY SERVICES
GAS & LNG MARKETING AND POWER: FOCUS ON EQUITY FLOWS
CARBON CAPTURE AND STORAGE – LEVERAGING UNIQUE OPPORTUNITIES
FORESTRY
DEVELOPING PROJECTS ACCORDING TO REDD+ PROGRAMME
REFINING: A PROGRESSIVE CONVERSION TO BIO-PRODUCTS
WORLDWIDE ECOFINING TECHNOLOGY DEPLOYMENT
MARKETING: SUSTAINABLE FUELS AND SERVICES
100% SUSTAINABLE PRODUCTS
- SMART MOBILITY
- LOGISTICS HUB
- ENHANCED FOOD OFFER
- MULTISERVICES
WIDESPREAD OFFER OF SERVICES
VERSALIS: INCREASING EFFICIENCY TOWARD BIO AND RECYCLED PRODUCTS
EFFICIENCY
- HIGH QUALITY HIGH PERFORMANCE POLYMERS FROM UPGRADED PROCESSES
- DEVELOPMENT OF CHEMICALS FROM RENEWABLES
- INTEGRATED PLATFORM FOR PLASTIC WASTE RECYCLING
INTERMEDIATES AND POLYMERS SALES VOLUMES | Mton BIO AND RECYCLED PRODUCTS SALES VOLUMES | Mton
ENI LIFECYCLE EMISSIONS: A FULLY COMPREHENSIVE MODEL
SETTING A UNIQUE METHODOLOGY* TO ACCOUNT SCOPE 1+2+3 EMISSIONS (EQUITY)
FULLY COMPREHENSIVE OF ALL ENERGY PRODUCTS IN ENI VALUE CHAIN
* Reviewed, independently, by experts from Imperial College London (via Imperial Consultants) and verified by RINA
TARGETS ON NET LIFECYCLE EMISSIONS
ALL BUSINESSES NET ZERO SCOPE 1+2 CARBON FOOTPRINT BY 2040
THE NEW ENI TOWARDS 2050
GHG LIFECYCLE EMISSIONS REDUCTION
2020-2023 ACTI ON PLAN
2020 - 2023 KEY TARGETS
| KEY TARGETS | |||
|---|---|---|---|
| UPSTREAM | MID-DOWNSTREAM | GREEN INVESTMENTS | |
| 2019-23 PRODUCTION | 2023 ADJ. EBIT | 2020-23 | |
| 3.5 % ~ CAGR |
2 ~ € bln 3X VS 2019 |
4 ~ € bln +30% vs PREVIOUS 4YP |
ORGANIC VALUE CREATION
| CASH NEUTRALITY IN 2023 |
45 \$ /bbl |
FCF GENERATION 2020-2023 |
23 € bln |
|---|---|---|---|
| ---------------------------- | ------------------ | ----------------------------- | ---------------- |
UPSTREAM TARGETS
A DISTINCTIVE INTEGRATED MODEL
DIVERSIFIED RANGE OF EXPLORATION OPPORTUNITIES
MAIN BASINS
DEVELOPMENT AND OPERATIONS DISTINCTIVE FACTORS
A FAST TRACK AND LOW COST MODEL
Peers: BP, CVX, EQNR, XOM, RDS, TOT, COP 2019 F&D data for peers not available
MAIN FIELDS DRIVING GROWTH
GROWTH PROFILE | MBOED 4YP START UPS
| Indonesia - Merakes Congo - Nené ph.2B Algeria – Berkine Gas UAE - Sharjah |
2020 |
|---|---|
| Angola - Cabaça North Norway - Fenja Mexico - Area1 FF |
2021 |
| Mozambique - Coral FLNG Norway - Johan Castberg Norway - Balder X UAE - Dalma gas Angola - Northern Gas Complex |
2022 |
| Congo - Nené ph.3 Libya - A/E Structures Libya - Bouri GUP Angola - Ndungu Norway - Breidablikk |
2023 |
THE RISE OF UPSTREAM FREE CASH FLOW
UPSTREAM FCF GROWS > 2 X DIVIDEND
MID-DOWNSTREAM KEY TARGETS
| 2023 ADJ. EBIT |
2 ~€ Bln |
|
|---|---|---|
| STRONGER | 4YP CAPEX | 5 € Bln |
| AND GREENER |
4YP CFFO | 9 € Bln Driven by Retail Gas and R&M |
MORE THAN TRIPLING EBIT & FCF (2019 vs 2023)
Mid-downstream includes G&P, R&M and Chemicals
GAS & POWER – AN INTEGRATED AND OPTIMIZED MODEL
Adj EBIT | € bln FREE CASH FLOW | € bln
2019 EBIT excludes oil trading results
RETAIL GROWING CUSTOMERS AND SERVICES
R&M – MORE SUSTAINABLE AND DIVERSIFIED
BIO REFINERIES
RENEWABLES GROWTH
CAPACITY | GW OUR BUSINESS MODEL
Mainly organic growth
Enhancing integration with retail clients
2020-2023 F I N ANCI AL PLAN
MAINTAINING CAPITAL DISCIPLINE & FLEXIBILITY
UPSTREAM: FOCUS ON PROJECTS UNDER DEVELOPMENT
GROUP CASH FLOW AND CAPEX
2019 2020 2023
2019 2020 2023
0
0
4
4
8
8
12
12
16
16
HI GHLI GHT S & REMUNERATI ON
2019: MAIN RESULTS
| UPSTREAM | 1,871 RECORD PRODUCTION KBOE/D DISCOVERED RESOURCES: 820 MBOE RESERVE REPLACEMENT RATIO: 117% CREATED 2ND LARGEST PLAYER IN NORWAY |
|---|---|
| GAS & POWER | BEST RESULT SINCE 2010 RETAIL EBIT + 38% |
| DOWNSTREAM | ADNOC REFINING DEAL STRONG MARKETING RESULT |
| RENEWABLES & DECARBONIZATION |
200 MW RENEWABLES INSTALLED – 9% UPSTREAM GHG EMISSION INTENSITY |
| FINANCIAL | 12.1 CFFO € BLN 7.7 CAPEX € BLN 3.4 DIVIDEND + BUYBACK € BLN |
ORGANIC CASH BALANCE
2019 ORGANIC CASH BALANCE | € bln
PROGRESSIVE DISTRIBUTION TO SHAREHOLDERS
DIVIDEND: progressive with underlying earnings and FCF
below 20%*
BUYBACK: € 400 mln/year @ Brent \$60 - 65/bbl Leverage steadily € 800 mln/year @ Brent >65/bbl
2020
DIVIDEND: € 0.89 per share BUYBACK: € 400 mln
BACK-UP
ASSUMPTIONS AND SENSITIVITY
| 4YP Scenario | 2020 | 2021 | 2022 | 2023 | |||
|---|---|---|---|---|---|---|---|
| Brent dated (\$/bbl) | 60 | 68 | 70 | 71.4 | |||
| FX avg (\$/€) |
1.115 | 1.16 | 1.2 | 1.21 | |||
| Ural MED c.i.f. - Med Dated Strip (\$/bbl) |
-1.6 | -1.5 | -1.5 | -1.5 | |||
| Std. Eni Refining Margin (\$/bbl) | 5.5 | 5.1 | 4.7 | 4.7 | |||
| NBP (\$/mmbtu) |
4.1 | 6.8 | 6.9 | 7.4 | |||
| PSV (€/kcm) |
150 | 221 | 221 | 232 | |||
| Sensitivity 2020 |
EBIT adj (€ bln) |
net adj (€ bln) |
FCF (€ bln) | ||||
| Brent (+1 \$/bbl) |
0.24 | 0.14 | 0.15 | ||||
| Spot Gas (+1 \$/mmbtu) |
0.32 | 0.3 | 0.3 | ||||
| Std. Eni Refining Margin (+1 \$/bbl) | 0.15 | 0.11 | 0.15 | ||||
| Exchange rate \$/€ (-0.05 \$/€) |
0.39 | 0.24 | 0.32 |
Brent sensitivity applies to liquids and oil-linked gas Sensitivity is valid for limited price variations
ENI LIFECYCLE EMISSIONS: INDICATORS
EXPLORATION DISTINCTIVE FACTORS
| STRATEGY | COMPETENCES & PROCESSES | TECHNOLOGY | ||||
|---|---|---|---|---|---|---|
| CONVENTIONAL |
PROPRIETARY IMAGING ALGORITHMS | FASTEST |
||||
| DESIGN TO COST SHORT CYCLES |
CENTRALISED AND INTEGRATED PROCESS | SUPERCOMPUTER IN INDUSTRY |
||||
| NEAR FIELD HIGH EQUITY STAKE |
DEEP KNOWLEDGE OF BASINS AND SUPERBASINS | STATE OF THE ART DRILLING |
||||
| DISCOVERIES BLN BARRELS / YEAR 10 years average ~1.3 |
UNIT EXPL. COST \$ / BARREL 10 years average >3.0 |
DUAL EXPLORATION Cash Inflow in the last 7 years |
||||
| 0.5 | 1.1 | 11 \$ bln |
||||
| Eni Peers |
Eni Peers |
|||||
| BEST-IN-CLASS RESULTS FOR OVER A DECADE |
Source: peers' data from WoodMackenzie Majors exploration benchmarking, October 2019 (conventional discoveries only) Peers: BP, CVX, EQNR, XOM, RDS, TOT
COMPETITIVE PIPELINE OF CONVENTIONAL PROJECTS
KEY PROJECTS STARTING UP IN 4YP 2020-23 [1/2]
| ALGERIA | Berkine North & BRN Pipeline 49% WI GAS |
ANGOLA | Nené ph. 2B 65% WI |
|---|---|---|---|
| LIQ Gas Start up: Feb 2020 Production (kboed): 70 (100%) – 34 (equity )@2021 |
LIQ LIBYA LIBYA CONGO |
Start up: 1H 2020 Progress: 24% Production (kboed): 15 (100%) – 10 (equity) @ 2022 |
|
| Merakes 65% WI GAS |
UAE (SHARJAH) GAS |
Mahani 50% WI |
|
| INDONESIA | Full Field Start up: 2H 2020 Progress: 50% Production (kboed): 72 (100%) – 42 (equity )@2021 |
Start up: 2H 2020 Progress: 5% Production (kboed): 22 (100%) – 11 (equity ) @2021 |
|
| Area 1 100% WI |
Agogo EP 37% WI |
||
| MEXICO | Full Field Start up: 2021 LIQ Progress: 36% 2020 Equity : 18 kboed (EP) Production (kboed): 95 (100%) - 66 (equity) @2022 |
LIQ ANGOLA |
Early Prod. ph.2 Start up: 2022 2020 Equity : 7 kboed Production (kboed): 33 (100%) – 11 (equity) @2023 |
| Balder X 63% WI |
GAS | Northern Gas Complex 26% WI |
|
| INDONESIA | Start up: 2022 LIQ Progress: 5% Production (kboed): |
Start up: 2022 Progress: FID (2020) Production (kboed): |
|
| NORWAY 47 |
87 (100%) – 55 (equity) @2023 |
ANGOLA | 88 (100%) – 23 (equity) @ 2024 |
NOTE: Average yearly production in peak year/ at plateau
KEY PROJECTS STARTING UP IN 4YP 2020-23 [2/2]
Coral FLNG 25% WI Start up: 2022 Progress: 66% Production (kboed): 98 (100%) – 26 (equity) @2023
Dalma Gas 25% WI
Start up: 2022 Progress: 10% Production (kboed): 53 (100%) – 13 (equity) @2023
48
Johan Castberg 21% WI Start up: 2022 Progress: 43% Production (kboed): 205 (100%) – 43 (equity) @2024
A & E Structures 50% WI Start up: 2023 Progress: FID (2021) Production (kboed): 165 (100%) @'26 – 72 (equity) @'25
| Breidablikk | 29% WI | |
|---|---|---|
| LIQ | Start up: 2023 | |
| Progress: FID (2020) | ||
| Production (kboed): |
||
| NORWAY | 47 (100%) – 14 (equity) @2024 |
MAGNETIC FUSION – A BREAKTHROUGH TECHNOLOGY FOR CLEAN AND RELIABLE ENERGY
COLLABORATIONS ON A GLOBAL SCALE
COMMONWEALTH FUSION SYSTEM & MIT
FOR THE
DEVELOPMENT OF THE FIRST COMMERCIAL PLANT
ITALIAN NATIONAL RESEARCH COUNCIL (CNR)
FOR
STUDIES ON PLASMA, SUPERCONDUCTORS & MATERIALS
ITALIAN NATIONAL AGENCY ENEA
FOR THE
CONSTRUCTION OF THE DIVERTOR TOKAMAK TEST
INTEGRATED PLATFORM FOR PLASTIC WASTE RECYCLING
