Omv Ag · VIE:OMV
Omv — OMV Aktiengesellschaft — Non-Deal Roadshow (April 2020)
54 slides from Omv's roadshow presentation, Apr 3, 2020
Slide 1: OMV Capital Market Story
OMV CAPITAL MARKET STORY March 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
Multi-billion action plan to safeguard financial strength in the current challenging environment Reduce organic investments by around EUR 500 mn 1 to below EUR 2 bn in 2020 OMV is responding the current situation with targeted measures 2 Cut costs by around EUR 200 mn in 2020 to safeguard the comp
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 population and 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 ► Leverage on proven concept of ► ≥ EUR 4 bn in 2020 1 and integration ► ≥ EUR 5 bn in 2025 ► Significantly internationalize ► ROACE target ≥
Slide 12: Low-carbon future embedded in 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 ~40% ~35% 43% 52% 48% 348 57% 487 ~60% ~500 1 >65% ~600 2017 2019 2020 2025 G
Slide 14: Extending the value chain – controlling interest in Borealis
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 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, March 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: Agreement for increasing 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 – disciplined organic investments
OMV stand alone perspective – focus on disciplined organic investments Organic CAPEX EUR bn 2020 CAPEX reduced by around EUR 500 mn to 3.1 cope with current situation CAPEX planning for 2020 2.0 - 2.5 reduced by around EUR 500 mn 2.3 from EUR 2.4 bn to below <2.0 EUR 2 bn in 2020 to cope with 1.8
Slide 40: Cash outflows related to growth mostly in 2020/21
Cash outflows related to growth mostly in 2020/21 Borealis organic Capex excluding leases and excluding Baystar JV Borealis Organic Capex EUR bn Running business capex to remain ~1.0 below EUR 500 mn Growth capex in 2020/21 mainly driven by PDH plant ~0.7 Acquisition of additional 50% in Nov
Slide 41: 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 28% ≤30% excluding leases 23% 22% Q1/19 – closing of the acquisition 21% of a 50% stake in SapuraOMV Upstream for USD
Slide 42: Balanced maturity profile and strong liquidity position
Balanced maturity profile and strong liquidity position Maturity profile 1 EUR bn OMV committed 1.5 acquisition facility OMV cash position Acquisition of controlling As of end 2019, EUR bn interest in Borealis, EUR bn 1.0 2.9 4.0 OMV undrawn Borealis liquidity 0.5 committed credit reserves facilitie
Slide 43: Multi-billion action plan to safeguard financial strength
Multi-billion action plan to safeguard financial strength Reduce organic investments by around EUR 500 mn in 2020 1 OMV 2020 CAPEX reduced from EUR 2.4 bn to below EUR 2.0 bn Further optimization of combined business with Borealis in 2021/22 Cash flow impact in 2020 from Cut costs by around EUR
Slide 44: First steps of the divestment program initiated
First steps of the divestment program initiated 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 compl
Slide 45: Progressive dividend policy reconfirmed
Progressive dividend policy reconfirmed – Record dividends for 2019 Dividend Per Share EUR CAGR 2.00 +19% 1.75 Record dividend of EUR 2.00 1 per share 1.50 for 2019 (+14% vs. 2018) We are committed to delivering an 1.20 attractive and predictable shareholder 1.00 return through the business cycl
Slide 46: Appendix
Appendix 46 | OMV Capital Market Story, March 2020
Slide 47: Outlook 2020 as published with Q4/19 results
Outlook 2020 as published with Q4/19 results 2019 Outlook 2020 Brent oil price (USD/bbl) 64 60 Average realized gas price (EUR/MWh) 11.9 <11.9 Total hydrocarbon production (kboe/d) 487 ~500 1 OMV indicator refining margin (USD/bbl) 4.4 >5.0 Ethylene/propylene net margin (EUR/t) 433 <400 Utilization
Slide 48: Sensitivities of the OMV Group results in 2020
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 Ethylene/propylene net margi
Slide 49: Market assumptions from Capital Markets Day March 2018
Market assumptions as published at the Capital Markets Day in March 2018 Medium term Long term Brent oil price USD/bbl 70 70 – 80 Central European Gas Hub price EUR/MWh 20 20 – 22 OMV indicator refining margin USD/bbl 5 ≤5 FX EUR/USD rate 1.20 1.15 – 1.20 49 | OMV Capital Market Story, March 2020
Slide 50: Strong credit rating
Strong credit rating A3 A- Outlook negative Outlook negative March 16, 2020 March 13, 2019 50 | OMV Capital Market Story, March 2020
Slide 51: Successful financing activities
Successful financing activities Date of issue Bond Amount in EUR mn Coupon in % Maturity July 2019 Eurobond (XS2022093434) 500 0.00 fixed 03/07/2025 July 2019 Eurobond (XS2022093517) 500 1.00 fixed 03/07/2034 December 2018 Eurobond (XS1917590876) 500 0.75 fixed 04/12/2023 December 2018 Eurobond (XS1
Slide 52: External recognition of Best-in-Class ESG performance
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 since 2014 Highe
Slide 53: OMV's performance relative to peers
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 score is presente
Slide 54: OMV Aktiengesellschaft
The energy ouv for a better life. O M V
OMV Aktiengesellschaft — Non-Deal Roadshow (April 2020) on 6ix