Galp Energia

Investor Presentation • Jul 26, 2021

2ND QUARTER AND FIRST HALF 2021 RESULTS

July, 2021

Disclaimer

This document may include forward-looking statements, including, without limitation, regarding future results, namely cash flows, dividends, and shareholder returns; liquidity; capital and operating expenditures; performance levels, operational or environmental goals, targets or commitments and project plans, timing, and outcomes; production rates; developments of Galp's markets; and impacts of the COVID-19 pandemic on Galp's businesses and results; any of which may significantly differ depending on a number of factors, including supply and demand for oil, gas, petroleum products, power and other market factors affecting them; the outcome of government policies and actions, including actions taken to address COVID-19 and to maintain the functioning of national and international economies and markets; the impacts of the COVID-19 pandemic on people and economies; the impact of Galp's actions to protect the health and safety of its employees, customers, suppliers and communities; actions of Galp's competitors and commercial counterparties; the ability to access short- and long-term debt markets on a timely and affordable basis; the actions of consumers; other legal and political factors, including changes in law and regulations and obtaining necessary permits; unexpected operating events or technical difficulties; the outcome of commercial negotiations, including negotiations with governments and private entities; and other factors discussed in Galp's Management Report & Accounts filed with the Portuguese Securities Market Commission (CMVM) for the year ended December 31, 2020 and available on our website at galp.com. This document may also contain statements regarding the perspectives, objectives, and goals of Galp, including with respect to energy transition, carbon intensity reduction or carbon neutrality. An ambition expresses an outcome desired or intended by Galp, it being specified that the means to be deployed may not depend solely on Galp. It is important to note that as of June 2, 2021, Galp's business plans and budgets do not fully reflect Galp's Net Zero Emissions target. Galp aims that, in the future, its business plans and budgets will progressively change to reflect in full this movement towards its Net Zero Emissions target. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements express future expectations that are 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 those 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 accuracy and 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 expectations, 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"a, "ambition", "anticipate", "believe", "consider", "could", "develop", "envision", "estimate", "expect", "goals", "intend", "may'', "objectives", "outlook", "plan", "potential", "probably", "project", "pursue", "risks", "schedule", "seek", "should", "target", "think", "will" or 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 addition to IFRS 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 amortisation, adjusted 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 from operations 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 with the 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. This document also contains non-financial performance indicators, including a carbon intensity indicator for energy products sold by Galp, that measures the amount of greenhouse gas emissions of those products, from their production to their end use, per unit of energy delivered. This indicator covers the direct GHG emissions of production and processing facilities (scope 1) and their indirect emissions associated with energy purchased (scope 2), as well as the emissions associated with the use of products by Galp's costumers (scope 3). The same emissions are considered for products purchased from third parties and sold or transformed by Galp. For a complete definition of scopes 1, 2 and 3 and the methodology used by Galp for this indicator please refer to Galp's website at galp.com. This document may include data and information from sources that are publicly available. This document may also include data and information provided by third parties, including Wood Mackenzie, Rystad and market analysts, which are not publicly available. Such data and information should not be interpreted as advice and you should not rely on it for any purpose. You may not copy or use this data and information except as expressly permitted by those third parties in writing. To the fullest extent permitted by law, those third parties accept no responsibility for your use of such data and information except as specified in a written agreement you may have entered into with those third parties for the provision of such data and information.

Galp and its respective representatives, agents, employees or advisers do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this document to reflect any change in events, conditions or circumstances. 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 subsidiaries or affiliates in any jurisdiction or an inducement to engage in any investment activity in any jurisdiction.

Recent Developments

Andy Brown, CEO

01

1H21 Highlights

Strong cash generation levered on portfolio resilience and capital discipline

Solid set of results

Capturing market recovery opportunities

Already at targeted leverage

On track for variable distribution

Upstream

Delivering significant value from superior cash margin and competitive portfolio

1H21 OCF and Net capex (€m) 1H21

• Robust cash delivery, despite production restrictions
• Advancing towards new growth developments: Bacalhau FID in June

Outlook

• 2H21 to continue benefiting from macro context
• Sépia FPSO start-up soon
• Additional inspection & maintenance activities expected during 2H21: 2021E production likely at the lower half of guidance (125-135 kboepd)

Commercial

Leveraging on market recovery and focus on the business transformation

• Slowdown in mobility as a result of Covid-19, particularly in Q1
• Improved demand in Iberia and seasonality driving oil products and power sales up in Q2

€136 m OCF €26 m Net capex¹

1H21 Outlook

• Expected continued market recovery during Q3
• Increasing gas & power customer base in Iberia
• Expanding EV charging network (c.700 installations currently)

Industrial & Energy Management

Adapting to market trends and conditions

1H21

• Stable raw materials processed and slight improvement on refining margins
• Energy Management contribution still limited by gas regasification costs and gas trading opportunities

Outlook

• Improvement in demand
• Normalised regasification costs and higher trading opportunities expected in 2022
• Advancing with green H² developments
• EU green deal support already granted in one green H² project

Renewables & New Businesses

Growing a competitive renewables portfolio and developing future options

1H21

• Renewables generation up in Q2 from seasonality and more normalised operations
• Capturing higher solar prices in Iberia

€19 m Pro-forma OCF¹

€66 m Net capex²

Outlook

• 200 MW of new operating capacity start-up by YE

• Acquiring projects in early stages of development
• Additional expansion planned in & outside Iberia

c.4 GW

Current portfolio

Strong 1H21 cash generation

with macro recovery enabling rapid deleveraging

2021 Progress vs Guidance (€ bn) Net debt to Ebitda

Expecting to continue deleveraging throughout 2H21

Attractive shareholder remuneration

with financial strength to support variable distribution

Executing our distinctive investment proposition

to thrive through the energy transition

• Moving with Bacalhau development after taking FID in June
• Increasing power sales and EV penetration
• Developing new renewables operating capacity
• Preparing expansion outside Iberia
• Advancing with green hydrogen projects
• Financial robustness with ND/Ebitda already at targeted level
• Variable distribution likely to be paid at current macro

New Galp's Executive Committee

Refreshing team & organisational structure

Andy Brown

CEO + resp. Energy Management

Thore E. Kristiansen

COO Production & Operations (Upstream + Industrial businesses)

Filipe Silva

CFO

Teresa Abecasis

COO Commercial

Carlos Costa Pina

COO Corporate Centre

TBD

COO Renewables & New Businesses

New organisation following the recently updated strategy

Adopting a leaner and more agile management mode

In the process of hiring a new COO for Renewables & New Businesses

2Q21 and 1H21 Results

Filipe Silva, CFO

02

2Q21 RCA Ebitda of €571 m

driven by Upstream and partial recovery in Iberia

2Q21 P&L (€ m)

Upstream supported by the higher oil prices

Commercial reflecting higher oil products demand

Industrial & EM with pressured refining, although supported by derivative effects

Renewables pro-forma Ebitda¹ of €17 m driven by higher generation and solar prices

RCA Ebit also including Upstream exploration impairments of €50 m

Associates flat YoY reflecting the contribution from international pipelines and renewables JV

Financial results of -€4 m including positive FX differences and a reclassification to Ebitda (Others) of premium paid for expired Brent put options

IFRS net income considers special items of -€137 m and a €68 m positive inventory effect

2Q21 OCF of €470 m

driven by stronger operational and macro conditions

equity stakes. ¹⁵ 2Q21 and 1H21 Results

¹ Capex net of divestments, economic perspective. ²Pro-forma considers all renewables projects as if they were consolidated according to Galp's

Strong FCF generation during 1H21

with operational contribution and capital discipline allowing rapid deleveraging

CFFO impacted by a WC build driven by higher commodity prices

Net capex of €8 m considering the €368 m proceeds from the GGND divestment in 1H21

Net debt reduction in H1 already considering €368 m of dividends paid to minorities and Galp shareholders during Q2

1H21 Cash flow (€ m)

Appendix

3

Upstream results

extracting value from oil price recovery

kboepd	132.2	125.2	128.4
kbpd	118.6	112.2	114.9
kboepd	130.3	123.5	126.6
kbpd	12.7	11.3	11.6
kboepd	117.6	112.2	115.0
USD/boe	-7.8	-6.5	-8.9
USD/boe	2.8	1.8	1.2
USD/boe	13.4	13.7	13.4
€ m	204	438	467
€ m	-32	314	290
€ m	123	390	346
€ m	82	149	135

		2Q20	1Q21	2Q21
Dated Brent price	USD/bbl	29.6	61.1	69.0

WI production up QoQ, supported by lower operational restrictions

Ebitda up QoQ following the higher production and more supportive oil prices

OCF down QoQ as 1Q21 included higher dividends received from associates and lower oil tax payments

Ebit impacted by impairments of €50 m related with exploration assets

Capex mostly reflecting the development activities in Brazil, with 70% allocated to growth projects

Commercial results

supported by Iberian demand recovery

		2Q20	1Q21	2Q21
Commercial sales clients to
Oil products	mton	1.2	1.3	1.5
Natural gas	TWh	4.8	4.9	4.5
Electricity	GWh	678	950	1,020
RCA Ebitda	€ m	59	69	73
RCA Ebit	€ m	36	44	48
OCF	€ m	55	67	69
Capex	€ m	26	4	22

Higher oil products and lower natural gas sales following seasonality, whilst higher electricity sales benefitted from customer acquisition

Ebitda and OCF up on the back of higher oil products and electricity sales

Capex mostly related to the retail segment in Portugal

Industrial & Energy Management results

driven by EM contribution

		2Q20	1Q21	2Q21
Raw materials processed	mboe	13.4	19.7	21.0
Galp refining margin	USD/boe	1.8	1.9	2.4
Oil products supply1	mton	2.5	3.6	3.6
NG/LNG supply & trading volumes1	TWh	11.7	18.3	18.1
Trading	TWh	3.7	8.3	9.1
Sales of electricity from cogeneration	GWh	324	331	269
RCA Ebitda	€ m	19	-6	50
RCA Ebit	€ m	-60	-67	-9
OCF	€ m	49	-9	64
Capex	€ m	23	7	11

Galp refining margin supported by the international environment, although impacted by FCC operational constraints

Supply & Trading volumes in line QoQ supported by natural gas network trading

Ebitda and OCF reflecting increased industrial contribution (refining, cogeneration) whilst trading gas benefited from derivative gains which should be partially revered during 2H. These more than offset higher regasification costs

Capex mostly allocated to the improvement of the efficiency in the refining system

Renewables & New Businesses results

supported by higher generation and solar prices

		2Q20	1Q21	2Q21
Renewable power generation
Gross	GWh	6	191	475
Net Galp to	GWh	3	141	355
Galp average solar generation sale price	EUR/MWh	-	42	69
RCA Ebitda	€ m	-4	-2	-6
RCA Ebit	€ m	-9	-3	-5
OCF	€ m	-4	-2	-2
Capex	€ m	2	15	51
		2Q20	1Q21	2Q21
Galp1 Renewables pro-forma - Equity to

Galp1 Renewables pro-forma - Equity to
Ebitda	€ m	-1	2	17
Ebit	€ m	-1	-3	11

		2Q20	1Q21	2Q21
price2 Iberian baseload pool	EUR/MWh	23.2	45.2	71.8
price2 Iberian solar captured	EUR/MWh	23.3	42.7	69.2

Renewable generation up QoQ reflecting normalised availability and seasonally higher sunlight hours

Ebitda mainly reflecting G&A and corporate expenses as businesses are mostly not consolidated

Renewables pro-forma Ebitda up QoQ benefiting from the higher availability of the plants, capturing the increased solar prices in Iberia

Capex mostly allocated to the ongoing deployment of solar PV projects in Iberia

Financial statements

P&L (RCA figures, € m) Cash flow (€ m)

	2Q20	1Q21	2Q21
RCA Ebitda	291	499	571
Upstream	204	438	467
Commercial	59	69	73
Industrial & Energy Management	19	-6	50
Renewables & New Businesses	-4	-2	-6
Ebit RCA	-57	284	305
Associates	24	0	26
Financial results	-10	-55	-4
Taxes1	-20	-181	-153
Non-controlling interests	12	-22	-34
RCA Net Income	-52	26	140
IFRS Net Income	-154	161	71

	2Q20	1Q21	2Q21
RCA Ebitda	291	499	571
Dividends from associates	34	48	42
paid Taxes	-85	-102	-144
OCF	239	445	470
Special items	33	11	-20
effect Inventory	-116	133	92
Changes working capital in	4	-212	-102
Cash Flow from Operations	160	377	440
Net capex	-149	195	-186
financial expenses and Net IFRS 16 interest	-34	-54	-25
Realised income from derivatives	-43	0	0
from Proceeds equalisation	83	0	0
Cash Flow Free	16	518	228
Dividends paid non-controlling interests to	-86	0	-78
Dividends paid Galp shareholders to	-318	0	-290
Reimbursement of principal leases IFRS 16	-27	-27	-28
Others	-21	22	9
Others	-21	22	9
Change in financial debt net	436	-513	159

Financial position

Net debt up to c.€1.7 bn to accommodate dividend payment

Financial position (€ m)

	31 Dec., 2020	31 Mar., 2021	30 Jun., 2021
fixed Net assets	6,259	6,374	6,284
Rights of use (IFRS 16)	1,002	1,033	1,008
Working capital	703	916	1,017
Other assets/liabilities	-710	-1,119	-1,267
Capital employed	7,254	7,204	7,042
debt Net	2,066	1,552	1,711
(IFRS 16) Leases	1,089	1,125	1,105
Equity	4,100	4,527	4,225
Equity, debt and op. leases net	7,254	7,204	7,042

Equity down €302 m QoQ, mostly reflecting the distributions to shareholders and to minorities

Net debt up €159 m, considering dividend payments in the period, net debt to Ebitda down to 1.0x¹

Debt indicators

funding Average cost	1 7%	1 5%	1.4%
Net debt	2 066 ,	1 552 ,	1,711
(IFRS 16) Leases	1 089 ,	1 125 ,	1,105
debt RCA Ebitda1 Net to	1 5x	1 1x	1.0x
Debt fixed % at rate	48%	40%	40%

Cash and cash equivalents 1,678 1,739 1,533

Undrawn credit facilities 1,262 1,263 1,133

Gross debt 3,743 3,291 3,244

31 Dec., 2020

31 Mar., 2021

30 Jun., 2021

Debt indicators (€ m) Debt reimbursement (€ m)

Key guidance and sensitivities

Macro assumptions
Brent price	\$60/bbl
Galp ref. margin	\$2.0 – 3.0/boe
EUR:USD	1.20
Operational and financial indicators
WI Production	125 – 135 kboepd
Ebitda	>€2.0 bn
OCF	>€1.7 bn
Net Capex	€0.5 – 0.7 bn

Guidance Sensitivities (€ m)

2021		Ebitda	OCF	FCF1
	Brent price
	\$5/bbl	160-180	80-100	60-80
	Galp refining margin
	\$1/boe	65-75	50-70	50-70
	EUR:USD
	0.05	80-100	50-60	20-40

galp.com