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WINTERSHALL DEA
Q2 2020 RESULTS PRESENTATION
AUGUST 19, 2020
MARIO MEHREN (CEO), PAUL SMITH (CFO)
Q2 2020 RESULTS PRESENTATION
DISCLAIMER
PAGE 2
This document has been prepared by
Wintershall Dea GmbH (“the Company”) for
information purposes only.
The information contained in this document has
not been independently verified and no
representation or warranty, express or implied,
is made as to, and no reliance should be placed
on, the fairness, accuracy, completeness or
correctness of the information or opinions
contained herein. None of the Company or any
of their respective affiliates, advisors, or
representatives shall have any liability
whatsoever (in negligence or otherwise) for any
loss whatsoever arising from any use of this
document, or its contents, or otherwise arising in
connection with this document.
This document does not constitute, or form part
of, an offer or invitation to purchase any
securities and neither it nor part of it shall form
the basis of, or be relied upon in connection with,
any contract or commitment whatsoever.
Forward-Looking Statements
This document includes projections and other
“forward-looking statements”, which are based
on expectations of the Company’s management
and projections about future events and
financial performance as of the date of the
presentation. These forward-looking statements
involve a number of risks, uncertainties, and
assumptions about the Company and its
subsidiaries, which are beyond the control of the
Company. In light of these risks, uncertainties
and assumptions, actual results may not occur
or may differ materially from those predicted in
the forward-looking statements and from the
past performance of the Company. As a result,
you should not rely on these forward-looking
statements. The Company accepts no obligation
to update any forward-looking statements set
forth herein or to adjust them to future events
or developments.
Non-GAAP and Non-IFRS Financial Measures
This document contains certain non GAAP and
non IFRS measures and ratios, including for
example EBITDAX, net debt and adjusted net
income that are not required by, or presented in
accordance with, any GAAP or IFRS.
These non GAAP and non IFRS measures and
ratios may not be comparable to similarly titled
measures used by other companies and have
limitations as analytical tools and should not be
considered in isolation or as a substitute for
analysis of our operating results as reported
under IFRS or any GAAP.
Q2 2020 HIGHLIGHTS
PAGE 3
TBU
0
10
20
30
40
50
60
70
80
Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20
0
2
4
6
8
Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20
MACROECONOMIC BACKDROP
BRENT PRICE DEVELOPMENT ($/BBL)
Q2 2020 RESULTS PRESENTATION
TTF PRICE DEVELOPMENT($/MSCF)
7.1 4.8 3.6 4.7 63 69 62 63
PAGE 4
3.7 50
SOURCE: HEREN/ARGUS/PLATTS; FX CONVERSION ACCORDING TO ECB
302.1Quarterly
averages
PAGE 5
SECOND QUARTER PERFORMANCE
OPERATIONAL FINANCIAL HEALTH AND SAFETY
Production(1)
Production Cost
606mboe/d
3.5$ per boe
367€ million
Q2 2019(2): 614 mboe/d
Q2 2019(2): $4.1/boe
CAPEX(3)
Q2 2019(2): €465 million
254€ million
EBITDAX
Free Cash Flow-294€ million
90€ million
Q2 2019(2): €683 million
Q2 2019(2): €33 million
Adj. Net Income
0.58 LTIF
TRIR1.57
Q2 2019: 0.36
Q2 2019: 3.49
Q2 2019(2): €330 million
1) EXCLUDING LIBYA ONSHORE PRODUCTION
2) LIKE-FOR-LIKE PRESENTATION, AGGREGATING THE INCOME STATEMENT OF THE WINTERSHALL GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE), THE INCOME STATEMENT OF THE DEA GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE) AND THE
INCOME STATEMENT OF THE WINTERSHALL DEA GROUP FOR MAY - JUNE 2019, EFFECTS FROM THE PURCHASE PRICES ALLOCATION ONLY INCLUDED FROM 1 MAY 2019 ONWARDS
3) INCLUDING CAPITALIZED EXPLORATION AND ACQUISITIONS
Q2 2020 RESULTS PRESENTATION
DELIVERING ON CRISIS ACTIONS
PAGE 6
TOP PRIORITIES
IMPLEMENTED
DECISIVE MEASURES
Production and development capex
budget reduced by 30%✓
Exploration budget reduced by 20%✓
Opex budget reduced by 10%✓
Dividend suspended✓
Protecting our people
Business continuity
Balance sheet
CONTINUING
TO DELIVER
No material impact to production
Record low production costs of $3.5/boe in Q2 achieved
Positive free cash flow outlook for 2020
Q2 2020 RESULTS PRESENTATION
Q2 2020 RESULTS PRESENTATION
SECOND QUARTER OVERVIEW
PAGE 7
DVALIN DEVELOPMENT CONCEPT
Strong operational performance
- Stable production
- 2020 project delivery on track
- Two near field discoveries in Norway -
- Evaluation of Mexico discoveries and follow-up potential
ongoing
Forecasting Free Cash Flow positive Full Year Outlook
- Temporary tax incentives in Norway
Financial performance impacted by low commodity prices
- €776 million post-tax impairment charge taken
Reaffirmed credit ratings at Baa2/BBB (neg/sta)
Delivering on crisis actions
- Spending cuts on track
- Record low production costs at $3.5/boe
FINANCIAL AND OPERATIONAL RESULTS
PAGE 8
Ba
lan
ce
Sh
ee
t
Liq
uid
ity
RESULTS SUMMARY
Unit Q2 2020 Q2 2019(2)
Production(1) mboe/d 606 614
Brent $/boe 30 69
Gas TTF $/mscf 2.1 4.8
EBITDAX € million 254 683
Operating Cash Flow € million 99 494
Capex(3) € million 367 465
Free Cash Flow € million -294 33
Adjusted Net income(4) € million 90 330
30.06.2020 31.03.2020
Net Debt € million 5,999 5,713
Leverage Ratio (LTM) x 2.9 2.3
Liquidity € million 1,797 2,441(5)
Q2 2020 RESULTS PRESENTATION
En
vir
on
me
nt
Fin
an
cia
l R
esu
lts
(1) EXCLUDING LIBYA ONSHORE PRODUCTION; THE PERIOD Q2 2019 COMPRISES PRODUCTION FOR WINTERSHALL DEA GROUP ON AL LIKE-FOR-LIKE BASIS (AGGREGATING PRODUCTION FOR WINTERSHALL GROUP FOR APRIL 2019, THE PRODUCTION FOR DEA GROUP FOR APRIL 2019 AND THE PRODUCTION FOR WINTERSHALL DEA GROUP FOR MAY
– JUNE 2019) ON A WORKING INTEREST BASIS; INCLUDING PROPORTIONAL PRODUCTION FROM AT EQUITY ACCOUNTED COMPANIES
(2) LIKE-FOR-LIKE PRESENTATION, AGGREGATING THE INCOME STATEMENT OF THE WINTERSHALL GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE), THE INCOME STATEMENT OF THE DEA GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE) AND THE INCOME STATEMENT OF THE WINTERSHALL DEA GROUP FOR MAY -
JUNE 2019, EFFECTS FROM THE PURCHASE PRICE ALLOCATION ONLY INCLUDED FROM 1 MAY 2019 ONWARDS.
(3) INCLUDING CAPITALIZED EXPLORATION AND ACQUISITIONS
(4) ADJUSTED FOR SPECIAL ITEMS LIKE IMPAIRMENT LOSSES AND EXPENSES RELATED TO THE MERGER SUCH AS RESTRUCTURING AND INTEGRATION
(5) AS REPORTED, INCLUDING WORKING CAPITAL LINES SIGNED AFTER QUARTER END
205 210 186 200 207 199
306 280264
307 300 287
41 4859
55 4946
74 7680
75 7074
626 614589
638 626 606
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Northern Europe Russia MENA Latam
PRODUCTION
PAGE 10
% Gas 72% 72% 71% 73% 73%
Russia Gas
Russia CondensateArgentina
Gas
Other Non-Europe Gas
Europe Spot Gas
Brent Crude
606(mboe/d)
38%
10%
7%
18%
17%
9%
PRODUCTION(1) (WI, MBOE/D) Q2 2020 PRODUCTION(1) COMPOSITION
~36% of total production linked directly to spot Brent and European gas prices
(1) INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES
Q2 2020 RESULTS PRESENTATION
73%
REALIZATIONSQ2 2020 RESULTS PRESENTATION
2.3
1.2
Q2 2019 Q2 2020
41
19
55
26
Q2 2019 Q2 2020
Realized price Realized price, excl. Russian condensate
69BRENT
($/BBL) 30
PAGE 11
1) AVERAGE REALIZED LIQUIDS PRICE INCLUDING OIL PRICE HEDGE RESULT
(1)
-53%-48%
GAS ($/MSCF) LIQUIDS ($/BOE)
4.8TTF
($/MCF) 2.1-57%-56%
PROFITABILITY
PAGE 12
379
118
105
37
95
43
65
27
78
58
-39 -29
683
254
Q2 2019 Q2 2020
Northern Europe Russia MENA OtherMidstreamLatam
EBITDAX (€ MILLION) ADJUSTED NET INCOME (€ MILLION)
330
90
Q2 2019 Q2 2020
-63% -73%
Q2 2020 RESULTS PRESENTATION
COST PERFORMANCE
PAGE 13
PRODUCTION COST EVOLUTION ($/BOE) PRODUCTION AND OPERATING EXPENSES
Production Costs
Cost of Trade Goods
Other
32%
28%
40%
€333 million
Q2 2020 RESULTS PRESENTATION
1) COST OF TRADE GOODS INCLUDES PRIMARILY TRADING ACTIVITIES. OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES AND OTHER COST OF SALES
(1)
5.7
5.4
4.34.1
3.5
2017 2018 2019 Q2 2019 Q2 2020
1,091
447
99-393
-294
-7033
-313
BoP Cash Operating CF Investing CF Free CF Financing CF Other EoP Cash
CASH FLOW DEVELOPMENT AND BALANCE SHEETQ2 2020 RESULTS PRESENTATION
PAGE 14
(1)
4,018
1,904
-464
5,999
385156
6,463
Total debt Cash, cash eq. and financialreceivables from cash pooling
Net debt
Bonds Debt to Banks At-equity Liability Leasing Liability
Leverage 2.9x
(1) INCLUDING FX AND CHANGE OF CONSOLIDATION
CASH FLOW BRIDGE (€ MILLION) NET DEBT POSITION (€ MILLION)
WIGA Group cash pooling
deconsolidation effect
Other
1,091
447
900
900
450
450
Q1 2020 Q2 2020
WCL
RCF
Cash
LIQUIDITY AND DEBT MATURITY PROFILEQ2 2020 RESULTS PRESENTATION
PAGE 15
(1) WORKING CAPITAL LINES SIGNED IN APRIL 2020
(2) UNDRAWN COMMITTED RCF, DUE 2025
(3) INCLUDES ONLY EXTERNAL DEBT; TERM LOANS DENOMINATED IN USD WITH NOMINAL SIZE $1,050 MILLION EACH, BUT DRAWN BOTH IN USD AND EUR
LIQUIDITY EVOLUTION (€ MILLION) STABLE DEBT MATURITY PROFILE (€ MILLION)(3)
1,000 1,000 1,000 1,000
942 942
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Senior Notes Term Loans
(2)
€ 2.44 billion € 1.80 billion
(1)
GUIDANCE AND OUTLOOKQ2 2020 RESULTS PRESENTATION
(1) INCLUDES IMPACT FROM BOTH CONSOLIDATED AND NON-CONSOLIDATES ENTITIES, EXCLUDING LIBYA ONSHORE PRODUCTION
(2) EXCLUDES CAPITALIZED EXPLORATION EXPENDITURES AND NON-CONSOLIDATED ENTITIES
PAGE 16
Q2 2020 H1 2020 2020 Guidance (Q1)
Production(1) 606 mboe/d 617 mboe/d 600 - 630 mboe/d
Production and Development Capex(2) €356 million €689 million €1,000 – 1,200 million
Exploration Expenditures €32 million €103 million €150 - 250 million
Common Dividend n/a n/aSuspended until further
notice
APPENDIX
PAGE 17
2020 FCF BREAK-EVEN AND SENSITIVITIESQ2 2020 RESULTS PRESENTATION
2020 UPDATED SENSITIVITIES
PAGE 18
FCF BREAK-EVEN PRICES
$35-40/bbl
~$30/bbl
<$20/bbl
Original 2020 B/E Price@ TTF of $4.0 / mcf
Revised 2020 B/E Price@ TTF of $2.6 / mcf
2021 B/E Price@ TTF of $4.0 / mcf
FCF Break-even defined as Brent price required for free cash flow before
acquisitions and dividends to be zero constant domestic prices.
Sensitivity applies only on the Brent and European gas part of the portfolio;
excludes all domestic contract-based portfolio, such as Russia, Argentina, Egypt
EBITDAX FCF
+/- 10% Brent(Assuming Brent $30.7/bbl)
+/- ~€95 million +/- ~€90 million
+/- 10% TTF(Assuming TTF $2.6/mmbtu)
+/- ~€50 million +/- ~€45 million
DEFINITIONSQ2 2020 RESULTS PRESENTATION
Adjusted Net Income
• Adjusted net income is net income adjusted for special items such as impairments, expenses related to the merger, deconsolidation effects and other one-off effects
Break-Even Price
• FCF Break-even defined as brent price required for free cash flow before acquisitions and dividends to be zero, assuming TTF of $4.0 / mcf and constant domestic prices.
CAPEX• Capex (excluding M&A, incl. capitalized exploration expenditure) for the Group consists of payments for intangible assets, property, plant and equipment and investment
property
EBITDAX• EBITDAX defined as income before tax but adjusted for the following items: financing costs, exploration expense, DD&A and impairments, acquisitions, disposals, identified
items, minority interest, FX gains and losses, pensions, loss or gain in relation to disposal of fixed assets
Free cash flow
• Free cash flow for the Group comprises the cash flow from operating activities and the cash flow from investing activities but excludes payments for acquisitions
Leverage • Net debt divided by last twelve months EBITDAX
LTIF • Lost time injury frequency per million work-hours
Net Debt• Net debt consists of liabilities to banks, bonds, interest bearing financial liabilities from cash-pooling towards related parties and leasing liabilities less cash and cash
equivalents and less interest-bearing financial receivables from cash-pooling from related parties
Production costs
• Production costs include G&A allocation but exclude export and processing tariffs, finance items and R&D
TRIR • Total Recordable Incident Rate per million hours worked
PAGE 19
NOTE:
CERTAIN NUMERICAL FIGURES AND PERCENTAGES SET OUT IN THIS PRESENTATION HAVE BEEN SUBJECT TO ROUNDING ADJUSTMENTS.