Repsol S.A. — Call Transcript 2020

Jul 23, 2020

REPSOL CONFERENCE CALL

Second Quarter 2020 Results

23 July 2020 Josu Jon Imaz, CEO

Disclaimer

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© REPSOL, S.A. 2020

This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends affecting Repsol's financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates and are generally identified by the words "expects", "anticipates", "forecasts", "believes", estimates", "notices" and similar expressions. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol's control or may be difficult to predict. Within those risks are those factors described in the filings made by Repsol and its affiliates with the "Comisión Nacional del Mercado de Valores" in Spain and with any other supervisory authority of those markets where the securities issued by Repsol and/or its affiliates are listed.

Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized.

This document mentions resources which do not constitute proved reserves and will be recognized as such when they comply with the formal conditions required by the system "SPE/WPC/AAPG/SPEE/SEG/SPWLA/EAGE Petroleum Resources Management System" (SPE-PRMS) (SPE – Society of Petroleum Engineers).

In October 2015, the European Securities Markets Authority (ESMA) published its Guidelines on Alternative Performance Measures (APMs). The guidelines apply to regulated information published on or after 3 July 2016. The information and breakdowns relative to the APMs used in this presentation are included in Annex 1 "Alternative Performance Measures" in the interim Management Report for 1H 2020 and the Repsol website.

This document does not constitute an offer or invitation to purchase or subscribe shares, pursuant to the provisions of the Royal Legislative Decree 4/2015 of the 23rd of October approving the recast text of the Spanish Securities Market Law and its implementing regulations. In addition, this document does not constitute an offer to purchase, sell, or exchange, neither a request for an offer of purchase, sale or exchange of securities in any other jurisdiction.

The information contained in the document has not been verified or revised by the External Auditors of Repsol.

Index

01. Key messages and market environment

02. Operational highlights

03. Financial results

04. Resilience plan 2020 delivery and outlook

Delivering on 2020 objectives in challenging scenario

2Q20 fully impacted by
COVID-19 crisis

• Health, safety and continuity of operations as main priority
• Lower commodity prices and depressed demand
• Positive CFFO in complex macro environment
• Negative Adjusted Net Income in 2Q20 (- €258 M)
• CFFO: + €268 M in 2Q20 ; + €864 M in 1H20 (positive in all divisions)
• Resilience plan 2020 performing as planned
• On track to surpass the €2.2 Bn cash savings target for 2020
• Additional measures to reinforce liquidity and financial strength
• Delivered shareholder remuneration
  • commitments for 2020
• July dividend effective with scrip option
• Treasury stock position at the end of 2Q20 allows to remove dilution of 2020 scrips
• €1.3 Bn post-tax impairment of
  • Upstream assets
• Reduced 2020 & 2021 oil and gas price assumptions

Market environment

Brent stabilizes above 40 \$/bbl after bottoming below 20 \$/bbl in April

Upstream: immediate response to the COVID-19 crisis through instant capex flexibility and opex efficiencies

Exploratory success and portfolio management

Exploration activity in 1H20 focused in core regions

• 8 wells completed
  • 6 positive
  • 1 negative
  • 1 under evaluation

Portfolio management actions

- Bulgaria

Industrial businesses impacted by COVID-19

Premium in the CCS unit margin despite adverse scenario and lower utilization Refining

• All refineries remained operational during the crisis
• 3.0 \$/bbl Refining margin indicator
• 69.9 % distillation utilization
• 82.4 % conversion utilization
• Resilience through the crisis Chemicals
• Higher international margins offset by lower prices and narrow naphtha-propane differential
• IQOXE¹ back onstream in May

Strong quarter

Trading • Leveraged on volatility and contango Solid performance

Peru • Stronger refining margins y-o-y

Repsol will undertake two major pioneering decarbonization projects

One of the world's largest plants to manufacture net zero emissions fuels

• Benefiting from Spain's renewable resource to reduce the CO2 emissions associated to the use of our products (Scope 3)

Plant for generation of gas from urban waste

• Replacing part of Petronor's production process traditional fuels, reducing emissions from our operations (Scope 1+2) and promoting circular economy

Anticipating the refinery of the future and moving towards our net zero CO2 ambition

Commercial and Renewables: Mobility getting back to normal, while progress in Low Carbon continues

• Mobility Service Stations: 48% sales decrease 2Q20 vs. 2Q19
  • Gasoline and diesel demand recovery: ~10-15% below 2019 level in July
  • Kerosene demand remains very weak: ~80% below 2019 level in July

• Higher margins foster robust performance in both businesses
• Gas & Power 64,000 net new customers (+6% YTD)
  • "A label": highest environmental certification for the electricity marketed by Repsol
  • 3 renewable power generation projects under construction ▪ Delta: 335 MW ▪ Kappa: 126 MW ▪ Valdesolar: 264 MW

Fuel demand monthly variation in Spain 2020 vs. 2019 (Mm3)

Source: CLH

Entry in Chile's renewable market

• Joint Venture with Ibereólica (50%) - option to control the JV after 2025 • Cash out does not jeopardize the Resilience Plan 2020 Diversified portfolio (52% wind and 48% solar) of up to 2.6 GW • 78 MW in operation five years: • 3 wind • 2 solar JV portfolio Initiating international expansion in renewables

• Additional 1 GW projects planned to 2030

Making important progress towards our goal of operating 7.5 GW of low carbon generation by 2025

• 1.6 GW of projects under construction (110 MW) or in advanced development stage (1.5 GW) to be installed in the next

Repsol 2Q20 Results 11

Financial results

2Q20 Results

Results (€ Million)	Q2 2020	Q1 2020	Q2 2019	1H 2020	1H 2019
Upstream	-141	90	323	-51	646
Industrial	8	288	177	296	448
Commercial and Renewables	42	121	128	163	265
Corporate and Others	-167	-52	-131	-219	-244
Adjusted Net Income	-258	447	497	189	1,115
Net Income	-1,997	-487	525	-2,484	1,133

• €1,289 M post-tax impairment in the Upstream following reduced price assumptions for 2020 and 2021:

(Real terms 2020)	2020	2021	Avg. 2020-2050
Brent (\$/bbl)	43	49	59.6
HH (\$/Mbtu)	2	2.7	3.3

• Inventory effect: €-0.3 Bn

Financial Data (€ Million)	Q2 2020	Q1 2020	Q2 2019	1H 2020	1H 2019
EBITDA	240	349	1,902	589	3,712
EBITDA CCS	641	1,455	1,819	2,096	3,622
Operating Cash Flow	268	596	1,369	864	2,530
Net Debt	3,987	4,478	3,662

• EBITDA at CCS 1H20: €2.1 Bn, even in unprecedented macro scenario
• Net Debt positively impacted by the hybrid bonds transactions executed in June
• Liquidity stands at €9,762 M and covers debt maturities beyond 2029

Resilience Plan delivering above original targets

Self-financed Resilience Plan 2020 expected to exceed the €2.2 Bn of initially targeted cash savings

	Original target	1H20 captured	New 2020 estimate
Opex savings	€350 M	> €250 M	€450 M
Capex savings	€1,000 M	> €550 M	€1,100 M
WC optimization	€800 M	> €300 M	€800 M

Reinforced liquidity position and financial strength

• 2 senior bonds for €1.5 Bn issued in April
• 2 new perpetual subordinated bonds for €1.5 Bn issued in June
• Repurchase of €0.6 Bn of the €1 Bn perpetual subordinated bond NC 2021 issued in 2015
• ~€1.6 Bn increase in committed credit lines during 1H20

Outlook

Net debt will not increase in 2020 vs. 2019 at 40\$/bbl Brent

Conclusions

Sustainable multi-energy project with reaffirmed decarbonization strategy

• Withstanding crisis supported on Repsol's strengths
• Prioritizing health, safety and continuity of operations
• Flexible portfolio and solid financial situation
• Unique track record in previous downturns
• Industry-leading dividend yield

Resilience Plan 2020 delivery

• On track to surpass the €2.2 Bn initial cash savings target
• Prudent view on short term prices but longer term unchanged
• Reduced oil and gas price assumptions for 2020 and 2021
• Price scenario to 2050 consistent with the objectives of the Paris Agreement
• New Strategic Plan to
• To be released in November 2020
• Based on the strategic implications of Net Zero Emissions by 2050 ambition 2025

REPSOL CONFERENCE CALL

Second Quarter 2020 Results

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