Galp Energia

Earnings Release • Jul 31, 2023

2Q23 Results

31 July 2023

$\bullet$

galp

Comption

Recentide $\hat{\boldsymbol{\Theta}}$ ODM ents Pott -15

An S

$447.7$

2Q23 Highlights

Strong performance leading to robust cash generation

$\epsilon$ 916 m Ebitda

€702 m OCF

€207 m Net capex

$\epsilon$ 503 m FCF

$\epsilon$ 1.4 bn Net debt

$0.4_x$ Net debt to Ebitda

Operating contribution leading to improved Ebitda & OCF QoQ

Midstream delivering solid performance

Net Debt stable in lower price environment

Maintaining 2023 Ebitda & OCF guidance, despite lower macro, supported by operating momentum

2023 dividend of €0.54/sh (+4% YoY)¹ with interim payment expected at end of August (€0.27/sh)

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¹ Following distribution to shareholders guidelines on DPS progression. Subject to AGM approval.

Upstream

Cash engine delivering on strong fundamentals

117 kboepd

WI Production (exc. Angola)

$74$ $s/bbl$ Oil realisations

2Q23

• $\bullet$ Solid WI production (exc. Angola) with increased efficiencies despite higher planned maintenance in Brazil QoQ
• Bacalhau FPSO hull sail-away to Singapore for topsides $\bullet$ integration, whilst D&C progressing according to plan

$\mathbf{S}$

End of Brazilian oil export levy, which had a net consolidated $\bullet$ impact of c.€40 m in 1H23¹

Outlook

• 2023 WI production expected at >115 kboepd supported by improved performance in Brazil and ramp-up of Coral Sul
• Bacalhau North appraisal well planned to start in 3Q23 key to provide insights into phase II development concept
• Rig and well services' contract secured to spud the first of two $\bullet$ exploration wells in Namibia in 4Q23 (PEL83, Galp operator)

Renewables & New Businesses

Capturing seasonal high irradiation despite lower Iberian solar prices

$1.4_sw$

Renewables installed capacity

775 GWh

Equity renewable generation

$64$ $\epsilon$ /MWh

Renewables realised sales price

$c.15%$ LTM OCF¹ / Invested Capital (operating assets)

2Q23

• Equity generation increase 50% YoY, following Titan Solar full acquisition and capacity build-up
• Progressing with portfolio de-risking and advancing on Iberian developments

$\mathbf{S}$

Outlook

• Persistent licensing bottlenecks in Iberia and challenging market dynamics in Brazil limiting FIDs
• Expecting to deploy c.200 MW renewable solar capacity in Iberia until YE23

Industrial & Midstream

High refinery availability and solid contribution from gas operations

$21.7_mboe$

Raw materials processed

$7.7$ \$/boe Refining margin

$2.9$ \$/boe Refining operating costs

$12.7$ TWh

NG / LNG supply & trading

2Q23

• High availability of the refinery allowing to capture robust cracks environment
• Refining costs normalised following Q1 turnaround, $\bullet$ although impacted by demurrages and inflation
• Midstream results supported on improved oil, gas and power supply & trading

Outlook

• Overall planned maintenance in Sines refinery during 4Q23

$\mathbf{S}$

• Preparation of Sines HVO & green H2 low carbon projects $\bullet$
• FY23 Ebitda I&M now expected >€700 m, despite $\bullet$ persistent gas sourcing constraints and lower prices

Commercial

Reflecting tighter market environment in Iberia and Africa

$1.8_mton$ Oil products sales

$4.2$ TWh

Gas & Power sales

$2.8_k$

Current EV charging network

Convenience 1H23 Ebitda

2Q23

· Oil volumes sales slowdown following a more pressured environment in B2B segments in Iberia and Africa

• Retail maintained its resilient performance, also supported on increased convenience contribution

Outlook

● FY23 Ebitda expected slightly below €300 m given 1H23 market dynamics

$\mathbf{S}$

• Continue transformation towards increased integration and contribution from lower carbon business

Financial Overview

$\overline{2}$

2023

2Q23 robust earnings

in a context of lower commodities prices and increased taxes

Strong FCF generation

supported by operating contribution and disciplined investment execution

2Q23 Cash flow $(\epsilon m)$

OCF & CFFO up QoQ driven by increased contribution from Upstream and Midstream

Net capex reflecting slower pace of investments in Industrial and Renewables

Net debt flat at $\epsilon$ 1.4 bn with net debt to RCA Ebitda at 0.4x

FY2023 guidance maintained

despite lower price deck

FY2023 (€ bn)

Current assumptions: Brent c.\$75/bbl | Refining margin c.\$9/boe | EUR:USD 1.10 Solar captured price c.€80/MWh | Iberian PVB gas price c.€40/MWh

Previous assumptions: Brent \$85/bbl | Refining margin c.\$9/boe | EUR:USD 1.15 | Solar captured price c.€120/MWh | Iberian PVB gas price c.€60/MWh

Stronger operating performance driven by improved upstream production and higher midstream contribution

Net capex reflecting disciplined execution and supported by divestment proceeds

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Updated Guidance for 2023

Operating indicators		Previous	Current
Upstream
WI production	kboepd	$>110$	>115
Production costs	$$/$ boe	c.3	c.3
Renewables
Renewable capacity by YE	GW	1.6	1.6
Industrial & Energy Management
Sines refining throughput	mboe	c.75	c.75
Sines refining costs 1	$\frac{1}{2}$ /boe	$3 - 4$	$3 - 4$
Commercial
Oil products sales to direct clients	mton	7.4	7.4
Convenience Ebitda growth YoY (from €70 m)	$\%$	$+10$	$+10$

FY2023 Financial indicators		Previous	Current
RCA Ebitda (unchanged)	€ bn	c.3.2	c.3.2
Upstream	€ bn	>2	C.2
Renewables & NB	$\epsilon$ m	$>180$	>130
Industrial & Midstream	$\epsilon$ m	>550	>700
Commercial	$\epsilon$ m	c.300	$<$ 300
OCF (unchanged)	€ bn	c.2.2	c.2.2
Net capex $2$	€ bn	c.1	$0.4 - 0.6$

Current macro assumptions:

Brent c.\$75/bbl (vs. \$85/bbl) Refining margin c.\$9/boe (unchanged) EUR: USD 1.10 (vs. 1.15) Solar captured price c.€80/MWh (vs. c.€120/MWh) Iberian PVB gas price c.€40/MWh (vs. c.€60/MWh)

Disclaimer

This document may include forward-looking statements. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements express future expectations based on management's expectations and assumptions as of the date they are disclosed and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from th expressed or implied in such those statements. Accordingly, neither Galp nor any other person can assure that its future results, performance or events will meet those expectations, nor assume any responsibility for the ac completeness of the forward-looking statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Galp to market risks and statements expressing management's expectatio beliefs, estimates, forecasts, projections, and assumptions. These forward-looking statements may generally be identified by the use of the future, gerund or conditional tense or the use of terms and phrases such as "aim", "anticipate","believe", "consider","could", "develop", "envision", "estimate", "expect", "qoals", "intend", "may", "objectives", "outlook", "plan", "potential", "probably", "project", "pursue", "risks", "schedule", "seek", the negative of these terms and similar terminology.

Financial information by business segment is reported in accordance with the Galp's management reporting policies and shows internal segment information that is used to manage and measure the Group's performance. In additi measures, certain alternative performance measures are presented, such as performance measures adjusted for special items (adjusted operational cash flow, adjusted earnings before interest, taxes, depreciation and amortisa earnings before interest and taxes, and adjusted net income), return on equity (ROE), return on average capital employed (ROACE), investment return rate (IRR), equity investment return rate (eIRR), gearing ratio, cash flow and free cash flow. These indicators are meant to facilitate the analysis of the financial performance of Galp and comparison of results and cash flow among periods. In addition, the results are also measured in accordance replacement cost method, adjusted for special items. This method is used to assess the performance of each business segment and facilitate the comparability of the segments' performance with those of its competitors.

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This document does not constitute investment advice nor forms part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or otherwise acquire securities of Galp or any of its su in any jurisdiction or an inducement to engage in any investment activity in any jurisdiction.

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