Omv Ag · VIE:OMV
Omv — OMV Aktiengesellschaft — Non-Deal Roadshow (May 2020)
67 slides from Omv's roadshow presentation, May 14, 2020
Slide 1: OMV Capital Market Story
OMV CAPITAL MARKET STORY May 2020 OMV Aktiengesellschaft
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements. Forward looking statements may be identified by the use of terms such as “outlook”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “target”, “objective”, “estimate”, “goal”, “may”, “will” and similar terms, or by their context.
Slide 3: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 3 | OMV Capital M
Slide 4: OMV – The energy for a better life
OMV – The energy for a better life Ready for a changing and volatile world ► HSSE – Top priority Safety first ► Aim for ZERO harm – NO losses Financial ► Integrated portfolio across the value chain stability ► Balanced regional footprint ► Become a digital leader Innovation & ► Provide solutions for
Slide 5: One integrated company along the value chain
One integrated company along the value chain Upstream DOWNSTREAM Downstream Gas Monomers and GAS Refining Sales channels polymers 5 core regions: CEE, Natural gas sales MEA, North Sea, OMV to increase its stake Top European ~2,100 retail sites in volumes of 137 TWh Russia and Asia-Pacific
Slide 6: Why invest in OMV
Why invest in OMV Prospective project pipeline in Upstream – focus on low-cost gas projects Growth in operating cash generation Top European refiner and strong position in Abu Dhabi – benefitting from demand growth in emerging markets thanks to Resilient cash flows internationalization of Downst
Slide 7: Multi-billion action plan to safeguard financial strength in the current challenging environment
Multi-billion action plan to safeguard financial strength in the current challenging environment Reduce organic investments by more than 25% 1 to below EUR 1.8 bn in 2020 OMV is responding the 2 Cut costs by more than EUR 200 mn in 2020 current situation with targeted measures to safeguard the com
Slide 8: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 8 | OMV Capital M
Slide 9: Growing world population and improving living standards drive demand for oil and gas products
Growing world population and improving living standards drive demand for oil and gas products World primary energy demand IEA World Energy Outlook 2019, Mtoe Oil and gas will remain main 17.7 sources of primary energy in the 16.3 next decade 14.3 13.8 8.4 13.3 Natural gas is an important 7.5 Oth
Slide 10: Petrochemicals markets with strong growth perspectives
Petrochemicals markets with strong growth perspectives driven by economic growth and improving living standards Polyolefins 1 demand 2008 - 2028 Mt, CAGR ► Fast growing market: CAGR ~4% until 2028, above GDP growth +3.9% 256 ► Asia is the main driver of growth (CAGR ~5%) ► Growth triggered by econom
Slide 11: OMV Strategy 2025 in a nutshell
OMV Strategy 2025 presented at the Capital Markets Day in March 2018 in a nutshell Profitable growth Expand integrated portfolio ► Clean CCS Operating Result of ► Leverage on proven concept of ≥ EUR 5 bn in 2025 integration ► ROACE target ≥ 12% mid- and ► Significantly internationalize long-term Ups
Slide 12: The move towards a low-carbon future is embedded in the OMV Strategy 2025
The move towards a low-carbon future is embedded in the OMV Strategy 2025 More gas, More valuable Innovative less oil products, burn less technology We will increase the gas We will shift oil products We will allocate EUR 500 mn to share in our Upstream towards higher value and innovative ener
Slide 13: More gas – Strong pipeline of gas projects
More gas – Strong pipeline of gas projects, driving OMV’s production towards the 600 kboe/d target Production, production split Kboed, % SapuraOMV Achimov 4A/5A SapuraOMV Nawara Upside: Neptun SARB and Umm Lulu ~35% 43% ~40% 52% 48% 348 57% 487 ~60% 440-470 1 >65% ~600 2017 2019 2020 202
Slide 14: Extending the value chain towards more valuable products
Extending the value chain towards more valuable products – Acquisition of a controlling interest in Borealis OMV Upstream OMV Refining OMV Monomers Industries Borealis Monomers Borealis Polymers & Fertilizers Automotive Gas Consumer Energy Oil & Gas production Refining Polymers Healthcare Fertilizer
Slide 15: Plastic to Oil – OMV’s proprietary ReOil technology
Plastic to Oil – OMV’s proprietary ReOil® technology Synthetic Refinery/ Converts used plastics under moderate crude oil petchem process pressure and normal refinery operating temperatures into synthetic crude oil Synthetic crude oil can be used as refinery feedstock to produce base materials or
Slide 16: OMV is committed to the goals of the Paris Climate Change Agreement
OMV is committed to the goals of the Paris Climate Change Agreement and implements climate action measures SCOPE 1 SCOPE 3 Reduce the carbon intensity of OMV’s Reduce the carbon intensity of OMV’s operations 1 by product portfolio 2 by 19% by 2025 (vs. 2010) 4% by 2025 (vs. 2010) Reduce routine fl
Slide 17: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 17 | OMV Capital
Slide 18: Active portfolio management towards higher returns
Active portfolio management towards higher returns – Net acquisitions of EUR 3 bn Major divestments Major acquisitions Divested high cost and capex Established Russia as an Upstream core intensive OMV UK region Sold minority stake in regulated Established an integrated value chain in Gas Connect Aus
Slide 19: Stringent cost discipline
Stringent cost discipline Cost savings EUR mn >460 >430 Operational efficiency in both Upstream and Downstream >330 Process optimization and harmonization Capture economies of scale and >200 strict management of overhead costs Leverage digitalization and optimize IT processes Procurement s
Slide 20: Successful strategy execution in Upstream
Successful strategy execution in Upstream Developed Asia-Pacific Expanded footprint in New Zealand by increasing stake in existing into core region producing assets Partnered with Sapura’s upstream business in Malaysia – Platform for further regional growth, capitalizing on growing Asian markets
Slide 21: Upstream – Improved portfolio, lower cost
Upstream – Improved portfolio, lower cost Production volume Production cost Kboe/d USD/boe +61% +61% (50)% -50% 487 13.2 Asia-Pacific 427 MEA 10.6 348 8.8 303 311 North Sea 7.0 6.6 Russia CEE 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 21 | OMV Capital Market Story, May 2020
Slide 22: Downstream – Consistent strong cash generator
Downstream – Consistent strong cash generator Clean CCS Operating Result Downstream Organic Free Cash Flow EUR bn EUR bn 1.8 0.1 1.6 1.7 1.5 1.5 0.2 0.2 0.2 Downstream Gas 0.1 0.1 1.4 1.4 0.2 1.2 0.6 0.6 0.6 0.6 1.1 Petrochemicals 0.6 0.8 0.9 0.9 0.8 0.8 Fuels 0.6 0.0 2015 2016 2017 2018 2019 OMV Pe
Slide 23: Internationalization of Downstream Oil – Integrated position in UAE
Internationalization of Downstream Oil – Benefitting from an integrated position in UAE OMV’s integrated value chain in the United Arab Emirates enhances profitability, increases optionality and reduces volatility Upstream Refining & Trading Petrochemicals/Polymers Sarb and Umm 20.0% 15.0% ADNOC Ref
Slide 24: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 24 | OMV Capital
Slide 25: OMV signs transformative agreement for increasing its share in Borealis to 75%
OMV signs transformative agreement for increasing its share in Borealis to 75% OMV acquires additional 39% share in Borealis, increasing its share to a controlling interest of 75% Purchase price of USD 4.68 bn Purchase price will be paid in two tranches, with USD 2.34 bn being due at closing,
Slide 26: Strategic rationale – OMV repositions in a low-carbon world
Strategic rationale – OMV repositions in a low-carbon world CEO Rainer Seele: “We will change our portfolio towards products that are demanded in a low-carbon world … ~60% of plastic production expected to be based on recycled … and, we want to become a feedstock by 2050 according to leading player
Slide 27: Borealis – Leading polymer producer with a focus on innovation
Borealis – Leading polymer producer with a focus on innovation Key financials Market presence Employees Sales 2019 2 Leading polyolefin producer Major operations in Austria, Employees excluding JV Belgium, France, Nordics and 5.7 mt Germany EUR 9.8 bn #8 globally European base ~6,900 3 Net profit 20
Slide 28: Borealis – Technology leader with innovative solutions
Borealis – Technology leader with innovative solutions Innovative company Borstar® 6,900 patents granted Borstar® is a multi-modal proprietary and 3,000 patents technology that yields special properties and pending as of 2019 structural benefits PE and PP with good processability for demanding a
Slide 29: Borealis – Strong profit contribution from specialties
Borealis – Strong profit contribution from specialties Total Sales by Specialty products in segment, 2019 Borealis margin, 2019 At-equity pro- Specialty products rata sales 1 17% EUR Fertilizers & 15% ~60% ohers 9.8 bn 53% Base 15% chemicals 2 Polyolefins 1 including 40% Borouge sales 2 Base chemica
Slide 30: Borealis has a global footprint
Borealis has a global footprint Stenungsund Porvoo • Ethylene: 380 kt • PE: 390 kt • Ethylene: 620 kt • Propylene: 230 kt • PP: 220 kt • Propylene: 230 kt • Aromatics & butadiene: 175 kt • Phenol & Acetone: 300 kt • PE: 770 kt Antwerp • Comp.: 42 kt Geleen • PE: 120 kt • Others: 120 kt • Comp: 90 kt
Slide 31: Borouge, the largest polyolefin site in the world
Borouge, the largest polyolefin site in the world – benefitting from competitive feedstock and access to Asian growth markets ► The world’s largest integrated polyolefins complex ► JV between ADNOC (60%) and Borealis (40%) established in 1998, first operations started in 2001 ► Following the start u
Slide 32: Well positioned for growth in cost-advantaged locations
Well positioned for growth in cost-advantaged locations Europe Americas Middle East Belgium – new PDH 1 plant in Kallo, Texas (US) – Baystar JV with Total Abu Dhabi – Borouge located in proximity to port of Antwerp ► 1,000 kt p.a ethane cracker; in ► New Borstar® PP plant at Borouge 3 ► Cost advanta
Slide 33: OMV to become #1 in ethylene and propylene capacity in Europe
OMV to become #1 in ethylene and propylene capacity in Europe Top ethylene & propylene capacities in Europe Mn t ► OMV’s global monomer capacity will increase by over 50% to 6.4 mn t OMV 2.0 2.0 0.7 4.7 ► Thereof European ethylene and DOW 4.4 propylene: 4.0 mn t Ineos 3.9 ► Thereof aromatics and but
Slide 34: OMV extends value chain into polymers
OMV extends value chain into polymers, immediately becoming one of the world’s leading producers Top 10 polyolefins capacities Globally, 2018 Mn t ► Extension of value chain provides a Sinopec 13.5 natural hedge against cyclicality Exxon 12.9 ► Integrated value chain allows margin optimization Lyond
Slide 35: OMV aims to become a significant player in circular economy
OMV aims to become a significant player in circular economy Total investments of up to EUR 1 bn for innovative sustainable solutions planned until 2025 & Design for recycling & Chemical recycling Waste collection mechanical recycling ► Co-founder of the project ► Technology leader within the ► ReOil
Slide 36: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 36 | OMV Capital
Slide 37: OMV to reach a new level of operating cash flow
OMV to reach a new level of operating cash flow Illustrative – OMV Operating Cash flow 5.4 excluding changes in net working capital Borealis EUR bn including 40% 1.4 4.3 dividends 3.9 4.2 from Borouge Downstream 3.2 3.0 excluding 1.7 Borealis Downstream dividends including 36% in Borealis 2.5 Upstre
Slide 38: Borealis – Highly cash generative operations
Borealis – Highly cash generative operations Operating cash flow 1 Borealis investments EUR bn (excluding leases) EUR bn 1.4 1.3 1.3 1.2 Dividends 1.0 from Borouge 0.5 0.5 Borealis AG operating 0.4 0.4 0.4 Growth cash flow Running business 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1 excl. ch
Slide 39: OMV stand alone perspective – Focus on disciplined organic investments
OMV stand alone perspective – Focus on disciplined organic investments Organic CAPEX EUR bn 2020 CAPEX reduced by more than 25% to cope 3.1 with current situation CAPEX planning for 2020 2.0 - 2.5 reduced by more than 25% from 2.3 EUR 2.4 bn to below EUR 1.8 bn in 2020 to cope with current economi
Slide 40: Borealis – Cash outflows related to growth mostly in 2020/21
Borealis – Cash outflows related to growth mostly in 2020/21 Borealis organic Capex Borealis Organic Capex excluding leases and excluding Baystar JV Running business capex to remain EUR bn below EUR 500 mn ~1.0 Growth capex in 2020/21 mainly 2020 Resilience driven by PDH plant Program Acquis
Slide 41: OMV has a healthy balance sheet despite major acquisitions and record dividends
OMV has a healthy balance sheet despite major acquisitions and record dividends Net debt excluding leases, Gearing ratio excluding leases EUR bn, % Long-term gearing ratio target 26% ≤30% excluding leases 23% 22% Q1/19 – closing of the acquisition 19% of a 50% stake in SapuraOMV 19% Upstream for
Slide 42: Balanced maturity profile and strong liquidity position
Balanced maturity profile and strong liquidity position Maturity profile 1 End of March 2020 In May 2020 issued senior EUR bn OMV cash-position bonds, in particular for financing 1.5 the Borealis deal 2 EUR 2.8 bn EUR 1.75 bn 1.0 End of March 2020 Remaining OMV OMV undrawn committed committed acquis
Slide 43: Multi-billion action plan to safeguard financial strength
Multi-billion action plan to safeguard financial strength Reduce organic investments by more than 25% in 2020 1 OMV 2020 CAPEX reduced from EUR 2.4 bn to below EUR 1.8 bn Further optimization of combined business with Borealis in 2021/22 Cut costs by more than EUR 200 mn and realize synergies wi
Slide 44: Divestment program well underway
Divestment program well underway Gas Connect Austria Ownership: OMV 51%, AS Gasinfrastruktur 49% (thereof, Allianz Group 60% and Snam 40%) Central hub in the European natural gas network Clean Operating Result in 2019 of EUR 97 mn Strategic rationale: OMV intends to exit completely the regul
Slide 45: Progressive dividend policy – Record dividends for 2019 proposed
Progressive dividend policy – Record dividends for 2019 proposed Dividend Per Share EUR CAGR 2.00 +19% 1.75 Proposed record dividend of EUR 2.00 1 1.50 per share for 2019 (+14% vs. 2018) We are committed to delivering an 1.20 attractive and predictable shareholder 1.00 return through the busines
Slide 46: Appendix
Appendix 46 | OMV Capital Market Story, May 2020
Slide 47: Updated outlook 2020 as published with Q1/20 results
Updated outlook 2020 as published with Q1/20 results 2019 Outlook 2020 Brent oil price (USD/bbl) 64 40 (previously 60) Average realized gas price (EUR/MWh) 11.9 ~10 (previously <11.9) 440-470 1 Total hydrocarbon production (kboe/d) 487 (previously ~500) OMV European indicator refining margin (USD/bb
Slide 48: Economic environment – Development of the economic environment
Economic environment – Development of the economic environment Oil prices USD/bbl OMV indicator refining margin USD/bbl 69 70 63 62 63 6 5.5 5.0 4.9 60 66 50 5 61 4.0 50 60 59 4 3.2 40 47 3 30 Average Brent price 20 2 Average realized crude price 10 1 0 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q1/19 Q2/19 Q3
Slide 49: Q1/20 – Clean CCS Operating Result impacted by weaker market
Q1/20 – Clean CCS Operating Result impacted by weaker market in Upstream, partially compensated by strong Downstream Clean CCS Operating Result Clean CCS Net Income attributable Clean CCS Earnings Per Share EUR mn to stockholders EUR Upstream Corporate & Other, Consolidation EUR mn Downstream 781 75
Slide 50: Economic environment – Sensitivities of the OMV Group results in 2020
Economic environment – Sensitivities of the OMV Group results in 2020 Annual impact excl. hedging Clean CCS Operating Result Operating cash flow in EUR mn Brent oil price (USD +1/bbl) +60 +25 Realized gas price (EUR +1/MWh) +140 +90 OMV indicator refining margin in Europe (USD +1/bbl) +110 +85 Ethyl
Slide 51: ESG Ratings – External recognition of Best-in-Class ESG performance
ESG Ratings – External recognition of Best-in-Class ESG performance Member of Rated by "Leadership A–" rating in the climate change category. OMV is one of the top 14 companies in the global oil and gas sector. since 2016 since 2018 2019 Prime Status by ISS ESG, with B-score since 2018 since 2015 si
Slide 52: ESG Ratings – OMV’s performance relative to peers
ESG Ratings – OMV’s performance relative to peers Relative rating vs industry peers top 10% top 10% top 5% top 12% SCORE 70 AAA B– 2 76 3 Environmental 78 6.1 C+ 2 73 Social 66 7.4 B– 2 79 Governance 67 1 6.3 B– 2 76 1 Governance is the sub-category of Economic dimension. Here Economic dimension sco
Slide 53: Upstream – Strengthened reserve base
Upstream – Strengthened reserve base 1P Reserves Reserve Replacement Rate Mn boe 3 years Ø RRR, % 1,332 166 1,270 160 49 128 Asia-Pacific 1,146 1,030 266 285 MEA 116 120 122 North Sea 232 229 Russia 70 602 569 CEE 2016 2017 2018 2019 2016 2017 2018 2019 53 | OMV Capital Market Story, May 2020
Slide 54: Upstream – Major projects
Upstream – Major projects Development & Execution Project Country Type Production Cum. production Peak production Working interest Operated FID primary start year mn boe kboe/d % year Nawara Tunisia Gas 2020 40-50 ~10 50.0 by OMV 2014 SARB/Umm Lulu UAE Oil 2018 450 ~43 20.0 no 2013 Ghasha Phase 1 UA
Slide 55: Downstream Oil Europe – European Downstream Oil Value Chain
Downstream Oil Europe – European Downstream Oil Value Chain 2019 figures Refinery Product supply and Petrochemical/ commercial/ Crude supply production logistics retail sales Purchase of other Purchase of Retail raw material 1.3 mn t 1 finished products 3.2 mn t 2 6.5 mn t 49% Captive market 3 Equit
Slide 56: Downstream Oil Europe – Favorable yield structure
Downstream Oil Europe – Favorable yield structure European integrated refinery yield Heavy fuel oil yield (%) 2019, % OMV vs European refineries 2019 13% LPG, naphtha (petrochemicals feedstock) 8% 17% Gasoline <1% Sulfur 50% Middle distillates 2% Heavy fuel oil 6% Bitumen, coke, other residue >1% Su
Slide 57: Downstream Oil Europe – Strong profit contribution
Downstream Oil Europe – Strong profit contribution Profitability turnaround in last 6 years Highly efficient retail stations AT average DE average Operating Result per filling station, EUR 1,000 1 Average throughput per station, mn liters 1 2 RO average OMV Group >180 >180 3.6 3.7 3.8 3.8 ~3.8 ~25%
Slide 58: ADNOC Refining – Key facts
ADNOC Refining – Key facts ► Refining capacity of 922 kbbl/d: ► Ruwais Refinery East: 420 kbbl/d ► Ruwais Refinery West: 417 kbbl/d ► Abu Dhabi Refinery: 85 kbbl/d Dubai ► Petrochemical production: 1.7 mn t p.a. Abu Dhabi ► Associated infrastructure: Ruwais site ► Advanced logistics networks, utilit
Slide 59: ADNOC Refining – Platform for further profitable growth
ADNOC Refining – Platform for further profitable growth SELF-FUNDED GROWTH Profitable long-term growth pipeline Integrate in petchem Increase feedstock value chain Detailed feasibility studies for future Operational excellence projects ongoing flexibility (eg. new refinery) Upgrade naphtha strea
Slide 60: Downstream Gas – Downstream Gas Value Chain
Downstream Gas – Downstream Gas Value Chain 2019 figures Gas supply Gas logistics Gas marketing sales Equity production in Romania 41 TWh Gas sales to third parties Equity production 137 TWh in Norway 26 TWh Sales in Europe (ex-Romania) 88 TWh Equity production Gas supply in Austria portfolio 7 TWh
Slide 61: Financing – Strong credit rating
Financing – Strong credit rating A3 A- Outlook negative Outlook negative March 16, 2020 March 13, 2019 61 | OMV Capital Market Story, May 2020
Slide 62: Financing – Successful financing activities
Financing – Successful financing activities Date of issue Bond Amount in EUR mn Coupon in % Maturity May 2020 Eurobond (XS2154347293) 500 1.50 fixed 09/04/2024 May 2020 Eurobond (XS2154347707) 500 2.00 fixed 09/04/2028 May 2020 Eurobond (XS2154348424) 750 2.375 fixed 09/04/2032 July 2019 Eurobond (X
Slide 63: Shareholders – Diversified international shareholder base
Shareholders – Diversified international shareholder base Shareholder structure 1 Geographical distribution of 0.4% 0.1% institutional investors 1 56.4% 7.4% Consortium 13% agreement – 31.5% 30% 4% ÖBAG & MPPH 5% 327.3 mn 5% 28.3% shares 5% 6% 22% 24.9% 10% 7.4% 43.0% Free float United States Austri
Slide 64: Corporate Governance – OMV has a two-tier Board structure
Corporate Governance – OMV has a two-tier Board structure Supervisory Board Two boards with distinctive roles: Executive Board (EB) responsible for managing the company and representing it vis à vis third parties Supervisory Board responsible for monitoring and guiding the EB Supervisory Boa
Slide 65: Corporate Governance – Experience, skills and diversity of Supervisory Board
Corporate Governance – Experience, skills and diversity of Supervisory Board Board Structure Analysis – OMV Benchmark Comparison, July 20191 OMV 2017 OMV 2019 Change Peers' average4 Peer's min Peer's max Governance System two tier two tier Number of Board Members 15 15 0 12 8 19 Number of non execut
Slide 66: Corporate Governance – Clear performance criteria attached to bonus plans
Corporate Governance – Clear performance criteria attached to bonus plans 2019 100% Financial targets Key elements Long Term Incentive Plan ► 50% Free ► 50% Relative Total Focus on long-term value generation Cash Flow2 Shareholder Return vs. Representative oil and gas Option to reduce payout sig
Slide 67: OMV Aktiengesellschaft
The energy ouv for a better life. O M V
OMV Aktiengesellschaft — Non-Deal Roadshow (May 2020) on 6ix