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Eni Presentation
to the Financial Community
London, March 1st, 2005
2
Disclaimer
This presentation contains forward-looking statements regarding future events and the future results of Eni that are based on current expectations, estimates, forecasts, and projections about the industries in which Eni operates and the beliefs and assumptions of the management of Eni. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management and competition are forward-looking in nature. Words such as ‘expects’, ‘anticipates’, ‘targets’, ‘goals’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Eni’s actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, the impact of competition, political and economic developments in the countries in which Eni operates, regulatory developments in Italy and internationally and changes in oil prices and in the margins for Eni products. Any forward-looking statements made by or on behalf of Eni speak only as of the date they are made. Eni does not undertake to update forward-looking statements to reflect any changes in Eni’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Eni may make in documents it files with the US Securities and Exchange Commission.
Eni Strategy
Vittorio MincatoCEO
London, March 1st, 2005
4
Industry Challenges and Priorities
� High and volatile oil price in medium term
� Robust gas demand
� Production and Reservereplacement challenges
� Access to new frontier areas
� Rising Costs
� Capital Discipline
� Strong production increaseand solid reservereplacement
� Well placed in frontier areaspursuing long term profitablegrowth
� Expanding in internationalgas sector
� Operational efficiency and strong cash flow generation
� High returns to shareholder
Eni positionCurrent market scenario
5
� Reported net profit: € 7.3 billion� All time record adjusted net income: € 6.7 billion� All time record cash flow: € 12.4 billion
� E&P:• 4% organic production growth
(6.4% before PSA impact) • 105% organic reserve replacement
� G&P: • 8% increase in overall gas sales• Power Generation capacity doubled
� R&M:• 8% growth in volumes processed in owned
refineries• 15% increase in retail network sales abroad
� € 0.90/share dividend, up 20% � 2004 Total Shareholders’ Return: 28.5%
2004 Results TacklingIndustry Challenges
Financialresults
Shareholders’return
Growth in core business
2004
Delivery
on target
and
shareholders’
return
6
� E&P:• Efficient production growth• Focus on reserve replacement
� G&P: • Acting proactively in the Italian market• Expansion in LNG and in European gas markets
� R&M: • Improving refineries performance• Development in selected European regions
2005-2008: continuity in growth and shareholders’ return
� Focus on efficiency and unit costs
� Capital and financial discipline� Dividend� Share buy back
Efficiency
Shareholderreturn
Growth in core business
Sustain attractive returns leveraging on business integration
and technological innovation
7
(kboe/d)E&P: robust production trend
2003 2004
1,5621,624
+4%
20042003
Before PSA impact:
+6.4% 2004 production marked by:� Organic growth
� Delivery on projects start-ups
IV Q 04 average production:1,704 kboe/d
8
E&P: confirming strong production growthin 2005-2008(kboe/d)
1,624
1,187
2,0001,900
Target2007
20042000 2008
CAGR
>5%
+8.2%
CAGR
05/08 GROWTH
� Driven by projects build up and new start-ups
� Asset management
9
E&P: delivering on reservereplacement
� Solid organic RRR in a high oil price scenario
� Reserve booking in line withSEC criteria
RRR target2005-2008
>100%
(Million boe)
132%
118%
30* $/bl
105%
91%
40.5 $/bl
2004
REPLACEMENT RATIO
All sources
Organic
* Proforma data based on 31st December 2002
and 2003 Brent price
10
Enhance Upstream PortfolioValue and Quality
� Leading position in operating costs� Reduction in discovery costs � Focus on F&D costs� Strong cash flow per boe
� Exploration:� High selectivity� Focus on materiality
& synergies
Strong cash generation& efficiency
Portfolio
� Develop world scale projects leveraging on distinctive execution skills
KASHAGAN FIELD
GREENSTREAM
Western Libya gas project
11
High quality portfolio fueling growth in
05/08 and…
Sustaining long term growth
Well Positioned to seizeFuture Developments in Upstream
� New initiatives in producing regions
� Access to high potential areas � New themes
Existing porfolio
Oppotunities
E&P growthleveraging on:
� Operatorship
� Legacy countries
� Technologydevelopment
� Integrated gas projects
12
2001 2003 2004 2008
An International Player in the Growing Gas Market
� Growth in international gas sales leveraging on:
• Expansion in European valuable markets
• Expansion in LNG
28.830.4 30.0
CAGR∼∼∼∼ 4.0%
+7.5%
30÷35
% %
2001 2003 2004 2008
~120102.2
82.3
58.9 52.8 54.1
23.4 42.3 48.1
95.1
E&P AND G&P GAS SALES
∼∼∼∼ 120102.295.1
82.3 17.784.5
16.878.314.9
67.4
(Bcm)
Monetizingequity gas through
integrated projects
Monetizingequity gas through
integrated projects
Equity gasContracted gas
E&P direct sales
Italy
International
G&P
~70
~50
13
2002-2004Compliant with
Italiangas market
ceiling
G&P 2004 Achievements consistentwith Strategy
78.368.7
Italy
International
Bcm
2002 2003
16.1*
52.6**
25.5*
52.8**
84.5
54.1**
30.4*
CAGR +7.8%
20041st Jan.
inlet ceilingto Italian
market: 75%
1st Jan. Italian gas
marketfully open
* Including gas sales in South America ** Including self consumption of 1.9 bcm in 2002/03 and 3.7 bcm in 2004
2001
67.48.5*
58.9
2004/2003+7.9%
� International sales: +19%� Italian sales**: +2.5%
14
� Snam Rete Gas• Sale of 9.05% stake in 2004
• Further reduction to 20% by 1st July 2007
Acting Proactively in the ItalianGas Market Opening
Regulated asset base
� Diversifing supply sources • Lybia: Greenstream project to monetize equity gas • Increase import capacity: at least 6.5 bcm by 2008• TAG (Russia) and TTPC (Algeria)
Supply
Confirmed
Powergen
* Commercial operation
2007 Target Confirmed
20042003
INSTALLED CAPACITY *
1.42.8
20042003
0.9
2.6
GAS SELF CONSUMPTION
2007
(GW) (Bcm)
2007
5-66-7
15
France: entering a new market through
commercial supplyagreements
France: entering a new market through
commercial supplyagreements
Enhance Presence in the European Gas Market
� Target markets& Shippers
� Equity *
� Iberian peninsula� Germany� Turkey� Hungary� UK & North Europe� France
CAGR 04/01: 41%
CAGR 08/04: 9%
* E&P direct sales
34
48
28
12
42
6
29
5
23
5
7
5
2001 2003 2004 2008
European sales (Bcm)
Target 2007
44
16
(Bcm)
LNG Expansion sustaining Long Term Growth
* 2003 figures
Eni equity gas reserves areas
Eni PARTICIPATION
Liquefaction
Regasification
New initiatives
Equityproduction
Reserves* (Bcm)
100÷2000÷50
DAMIETTA
OMAN
PANIGAGLIA
SINES
REGANOSA
DARWIN
BRASS
New initiatives in LNGmonetizing equity gas
SAGUNTO
BONNY
17
R&M: improving performance and strengthening integration
MARKETINGEUROPE� Continuing expansion in traditional
selected European regions
ITALY� Continuing network
requalification
2008 TARGETSItaly & Abroad
Throughputper site
(Mln lt/ss)
2.8
20082004
2.0
>19
20082004
18.4Total sales(Bln lt)
REFINING
� Balancing refining capacity vsretail sales
� Increasing conversion capacity in hydrocracking units in Italy
� Higher integration maximizing volume and value of equity oil
RefineryThroughput(Mln tons/y)
20082004
2008 TARGETSItaly & Abroad
3839.6
5763
Complexity index
18
2006
Continuing Cost CuttingBillion € real terms
Target exceeded
by 15%
Focuson unit costs
� Operating performances
� Capital efficiency in pursuing growth
∼ 2.8
1999- 2004
2.3
1999-03
3.4
∼ 0.5
Upside potential on 2006 target
2004
19
Capital discipline
Pursuing long termgrowth in core business
Competitiveyield
A flexiblelever for additional
returns to shareholders
Use of Cash: sustaining growth and shareholders’ return
Investments
Dividend
Share buy back
20
Use of Cash: capital expenditure to sustain long term growth in core businessBn €
Capital Expenditureby activity
2005-08
26.9
6%
64%
16%
10%4%
G&PR&M
E&P
OtherE&OS
� ∼∼∼∼ 95% IN CORE BUSINESS� Confirming Snam Rete Gas deconsolidation in 2007� Including new initiatives in E&P and G&P
05/08 Investments trend
21
Robust Returns to Shareholders
� Dividend up +20%
2001 2004
0.900.75
37% 62%
(Euro per share)
DIVIDEND
29%
2000
0.424
Payout
2002 2003
0.75 0.75
51% 47%
Total ShareholdersReturn 2000-04:Yearly average
15.6%
� Interim dividend distribution from 2005� Competitive dividend yield
22
Robust Returns to Shareholders
SHARE BUY-BACK PROGRAM
Remaining
2.2 billion €
2000/2004
� Authorized 5.4billion €
� Spent 3.2 billion €� Bought back 235
million shares(5.9% of share capital)
Going forwards
Resumed in January 2005
23
Final Remarks
� € 26.9 billion
� E&P production: cagr> 5%
� Gas sales abroad: cagr 9%
� Focus on unit costs and efficiency
GrowthGrowth in core business 05/08in core business 05/08
CapexCapex
EfficiencyEfficiency
� Dividendsustainability(0.90 per share)
� Cash neutrality at 20US$/bbl
� Debt to equity ceiling0.4
� Maintain currentcredit rating
2008
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