WINTERSHALL DEA Q2 2020 RESULTS PRESENTATION MARIO MEHREN (CEO), - - PowerPoint PPT Presentation

wintershall dea
SMART_READER_LITE
LIVE PREVIEW

WINTERSHALL DEA Q2 2020 RESULTS PRESENTATION MARIO MEHREN (CEO), - - PowerPoint PPT Presentation

WINTERSHALL DEA Q2 2020 RESULTS PRESENTATION MARIO MEHREN (CEO), PAUL SMITH (CFO) AUGUST 19, 2020 Q2 2020 RESULTS PRESENTATION DISCLAIMER This document has been prepared by Forward-Looking Statements Non-GAAP and Non-IFRS Financial Measures


slide-1
SLIDE 1

WINTERSHALL DEA

Q2 2020 RESULTS PRESENTATION

AUGUST 19, 2020 MARIO MEHREN (CEO), PAUL SMITH (CFO)

slide-2
SLIDE 2

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

  • n, the fairness, accuracy, completeness or

correctness of the information or opinions contained herein. None of the Company or any

  • f 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

  • f, 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

  • n 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

  • r 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

  • r 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.

slide-3
SLIDE 3

Q2 2020 HIGHLIGHTS

PAGE 3

TBU

slide-4
SLIDE 4

10 20 30 40 50 60 70 80 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 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

30 2.1 Quarterly averages

slide-5
SLIDE 5

PAGE 5

SECOND QUARTER PERFORMANCE

OPERATIONAL FINANCIAL HEALTH AND SAFETY

Production(1) Production Cost

606

mboe/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

TRIR

1.57

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

slide-6
SLIDE 6

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

slide-7
SLIDE 7

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
  • ngoing

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
slide-8
SLIDE 8

FINANCIAL AND OPERATIONAL RESULTS

PAGE 8

slide-9
SLIDE 9

Balance Sheet Liquidity

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

Environment Financial Results

(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

slide-10
SLIDE 10

205 210 186 200 207 199 306 280 264 307 300 287 41 48 59 55 49 46 74 76 80 75 70 74 626 614 589 638 626 606

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 Condensate Argentina 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%

slide-11
SLIDE 11

REALIZATIONS

Q2 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

69 BRENT ($/BBL) 30

PAGE 11

1)

AVERAGE REALIZED LIQUIDS PRICE INCLUDING OIL PRICE HEDGE RESULT

(1)

  • 53%
  • 48%

GAS ($/MSCF) LIQUIDS ($/BOE)

4.8 TTF ($/MCF) 2.1

  • 57%
  • 56%
slide-12
SLIDE 12

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 Other Midstream Latam

EBITDAX (€ MILLION) ADJUSTED NET INCOME (€ MILLION)

330 90

Q2 2019 Q2 2020

  • 63%
  • 73%

Q2 2020 RESULTS PRESENTATION

slide-13
SLIDE 13

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 4.3 4.1 3.5

2017 2018 2019 Q2 2019 Q2 2020

slide-14
SLIDE 14

1,091 447 99

  • 393
  • 294
  • 70

33

  • 313

BoP Cash Operating CF Investing CF Free CF Financing CF Other EoP Cash

CASH FLOW DEVELOPMENT AND BALANCE SHEET

Q2 2020 RESULTS PRESENTATION

PAGE 14

(1)

4,018 1,904

  • 464

5,999 385 156 6,463

Total debt Cash, cash eq. and financial receivables 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

slide-15
SLIDE 15

1,091 447 900 900 450 450 Q1 2020 Q2 2020 WCL RCF Cash

LIQUIDITY AND DEBT MATURITY PROFILE

Q2 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)

slide-16
SLIDE 16

GUIDANCE AND OUTLOOK

Q2 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/a Suspended until further notice

slide-17
SLIDE 17

APPENDIX

PAGE 17

slide-18
SLIDE 18

2020 FCF BREAK-EVEN AND SENSITIVITIES

Q2 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

slide-19
SLIDE 19

DEFINITIONS

Q2 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
  • ne-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.