wintershall dea q2 2020 results presentation · 2020. 8. 19. · q2 2020 results presentation...

WINTERSHALL DEA

Q2 2020 RESULTS PRESENTATION

AUGUST 19, 2020

MARIO MEHREN (CEO), PAUL SMITH (CFO)


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)


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

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


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



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)


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


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%


COST PERFORMANCE

PAGE 13

PRODUCTION COST EVOLUTION ($/BOE) PRODUCTION AND OPERATING EXPENSES

Production Costs

Cost of Trade Goods

Other

32%

28%

40%

€333 million


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.

wintershall dea q2 2020 results presentation · 2020. 8. 19. · q2 2020 results presentation...

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