WINTERSHALL DEA Q2 2020 RESULTS PRESENTATION - MARIO MEHREN (CEO), PAUL SMITH (CFO)
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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
Wintershall Dea GmbH (“the Company”) for
This document includes projections and other This document contains certain non GAAP and
information purposes only.
“forward-looking statements”, which are based non IFRS measures and ratios, including for
The information contained in this document has on expectations of the Company’s management example EBITDAX, net debt and adjusted net
not been independently verified and no and projections about future events and income that are not required by, or presented in
representation or warranty, express or implied, financial performance as of the date of the accordance with, any GAAP or IFRS.
is made as to, and no reliance should be placed presentation. These forward-looking statements
These non GAAP and non IFRS measures and
on, the fairness, accuracy, completeness or involve a number of risks, uncertainties, and
ratios may not be comparable to similarly titled
correctness of the information or opinions assumptions about the Company and its
measures used by other companies and have
contained herein. None of the Company or any subsidiaries, which are beyond the control of the
limitations as analytical tools and should not be
of their respective affiliates, advisors, or Company. In light of these risks, uncertainties
considered in isolation or as a substitute for
representatives shall have any liability and assumptions, actual results may not occur
analysis of our operating results as reported
whatsoever (in negligence or otherwise) for any or may differ materially from those predicted in
under IFRS or any GAAP.
loss whatsoever arising from any use of this the forward-looking statements and from the
document, or its contents, or otherwise arising in past performance of the Company. As a result,
connection with this document. you should not rely on these forward-looking
statements. The Company accepts no obligation
This document does not constitute, or form part
to update any forward-looking statements set
of, an offer or invitation to purchase any
forth herein or to adjust them to future events
securities and neither it nor part of it shall form
or developments.
the basis of, or be relied upon in connection with,
any contract or commitment whatsoever.
PAGE 2
TBU
Q2 2020 HIGHLIGHTS
PAGE 3Q2 2020 RESULTS PRESENTATION
MACROECONOMIC BACKDROP
TTF PRICE DEVELOPMENT ($/MSCF) BRENT PRICE DEVELOPMENT ($/BBL)
Quarterly 63 69 62 63 30
7.1 4.8 3.6 4.7 3.7 2.1 50
averages
80
8 70
60
6
50
40
4
30
20
2
10
0 0
Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20
SOURCE: HEREN/ARGUS/PLATTS; FX CONVERSION ACCORDING TO ECB
PAGE 4Q2 2020 RESULTS PRESENTATION
SECOND QUARTER PERFORMANCE
OPERATIONAL FINANCIAL HEALTH AND
SAFETY
606 Production(1) 254 EBITDAX
0.58 LTIF
mboe/d Q2 2019(2): 614 mboe/d € million Q2 2019(2): €683 million
Q2 2019: 0.36
3.5 Production Cost -294 Free Cash Flow 1.57 TRIR
$ per boe Q2 2019(2): $4.1/boe € million Q2 2019(2): €33 million Q2 2019: 3.49
367 CAPEX(3) 90 Adj. Net Income
Q2 2019(2): €330 million
€ million
€ million Q2 2019(2): €465 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 PAGE 5Q2 2020 RESULTS PRESENTATION
DELIVERING ON CRISIS ACTIONS
IMPLEMENTED CONTINUING
TOP PRIORITIES DECISIVE MEASURES TO DELIVER
Protecting our people Production and development capex No material impact to production
✓
budget reduced by 30%
Business continuity
✓ Exploration budget reduced by 20%
Record low production costs of
Balance sheet $3.5/boe in Q2 achieved
✓ Opex budget reduced by 10%
Positive free cash flow outlook for
✓ Dividend suspended 2020
PAGE 6Q2 2020 RESULTS PRESENTATION
SECOND QUARTER OVERVIEW
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
Financial performance impacted by low commodity prices
- €776 million post-tax impairment charge taken
Delivering on crisis actions
- Spending cuts on track
- Record low production costs at $3.5/boe
Forecasting Free Cash Flow positive Full Year Outlook
- Temporary tax incentives in Norway DVALIN DEVELOPMENT CONCEPT
Reaffirmed credit ratings at Baa2/BBB (neg/sta)
PAGE 7FINANCIAL AND
OPERATIONAL RESULTS
PAGE 8Q2 2020 RESULTS PRESENTATION
RESULTS SUMMARY
Unit Q2 2020 Q2 2019(2)
Environment
Production(1) mboe/d 606 614
Brent $/boe 30 69
Gas TTF $/mscf 2.1 4.8
EBITDAX € million 254 683
Financial Results
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
Balance Sheet
Liquidity
Net Debt € million 5,999 5,713
Leverage Ratio (LTM) x 2.9 2.3
Liquidity € million 1,797 2,441(5)
(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 ENDQ2 2020 RESULTS PRESENTATION
PRODUCTION
PRODUCTION(1) (WI, MBOE/D) Q2 2020 PRODUCTION(1) COMPOSITION
% Gas 72% 72% 71% 73% 73% 73% Brent
Crude
17%
626 638 626 Russia
614 606
589 38% Gas
74 75 70
41
76
48
80 55 49
74
46 Europe
606
59 18% (mboe/d)
Spot Gas
306 280 307 300 287
264 7%
9%
Other Non- 10%
Europe Gas Russia
Argentina Condensate
205 210 186 200 207 199 Gas
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
~36% of total production linked directly
to spot Brent and European gas prices
Northern Europe Russia MENA Latam
(1) INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES
PAGE 10Q2 2020 RESULTS PRESENTATION
REALIZATIONS
GAS ($/MSCF) LIQUIDS ($/BOE)
-48% -53%
55
2.3
26
1.2
41
19
Q2 2019 Q2 2020 Q2 2019 Q2 2020
(1)
Realized price Realized price, excl. Russian condensate
TTF -56% BRENT -57%
($/MCF) 4.8 2.1 ($/BBL) 69 30
1) AVERAGE REALIZED LIQUIDS PRICE INCLUDING OIL PRICE HEDGE RESULT
PAGE 11Q2 2020 RESULTS PRESENTATION
PROFITABILITY
EBITDAX (€ MILLION) ADJUSTED NET INCOME (€ MILLION)
-63% -73%
683
78
65
95
330
105
254
58
27
379 43 90
37
118
-39 -29
Q2 2019 Q2 2020 Q2 2019 Q2 2020
Northern Europe Russia Latam MENA Midstream Other
PAGE 12Q2 2020 RESULTS PRESENTATION
COST PERFORMANCE
PRODUCTION COST EVOLUTION ($/BOE) PRODUCTION AND OPERATING EXPENSES
Other
Production
5.7 32% Costs
5.4 40%
€333
4.3 million
4.1
3.5
28%
Cost of Trade
Goods(1)
2017 2018 2019 Q2 2019 Q2 2020
1) COST OF TRADE GOODS INCLUDES PRIMARILY TRADING ACTIVITIES. OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES AND OTHER COST OF SALES
PAGE 13Q2 2020 RESULTS PRESENTATION
CASH FLOW DEVELOPMENT AND BALANCE SHEET
CASH FLOW BRIDGE (€ MILLION) NET DEBT POSITION (€ MILLION)
99
-393 Leverage
2.9x
-294
WIGA Group cash 6,463
pooling
deconsolidation 156 -464
effect 385
1,091
1,904
-313
33
-70 5,999
Other 4,018
447
(1)
BoP Cash Operating CF Investing CF Free CF Financing CF Other EoP Cash Total debt Cash, cash eq. and financial Net debt
receivables from cash pooling
Bonds Debt to Banks At-equity Liability Leasing Liability
(1) INCLUDING FX AND CHANGE OF CONSOLIDATION
PAGE 14Q2 2020 RESULTS PRESENTATION
LIQUIDITY AND DEBT MATURITY PROFILE
LIQUIDITY EVOLUTION (€ MILLION) STABLE DEBT MATURITY PROFILE (€ MILLION)(3)
€ 2.44 billion € 1.80 billion 1,000 1,000 1,000 1,000
942 942
450
(1)
WCL
900 450 (2)
RCF
Cash
900
1,091
447
Q1 2020 Q2 2020 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Senior Notes Term Loans
(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
PAGE 15Q2 2020 RESULTS PRESENTATION
GUIDANCE AND OUTLOOK
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
Suspended until further
Common Dividend n/a n/a
notice
(1) INCLUDES IMPACT FROM BOTH CONSOLIDATED AND NON-CONSOLIDATES ENTITIES, EXCLUDING LIBYA ONSHORE PRODUCTION
(2) EXCLUDES CAPITALIZED EXPLORATION EXPENDITURES AND NON-CONSOLIDATED ENTITIES
PAGE 16APPENDIX PAGE 17
Q2 2020 RESULTS PRESENTATION
2020 FCF BREAK-EVEN AND SENSITIVITIES
2020 UPDATED SENSITIVITIES FCF BREAK-EVEN PRICES
$35-40/bbl
EBITDAX FCF
~$30/bblQ2 2020 RESULTS PRESENTATION
DEFINITIONS
Adjusted • Adjusted net income is net income adjusted for special items such as impairments, expenses related to the merger, deconsolidation effects and other
Net Income one-off effects
Break-Even
• 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.
Price
• Capex (excluding M&A, incl. capitalized exploration expenditure) for the Group consists of payments for intangible assets, property, plant and equipment and investment
CAPEX
property
• EBITDAX defined as income before tax but adjusted for the following items: financing costs, exploration expense, DD&A and impairments, acquisitions, disposals, identified
EBITDAX
items, minority interest, FX gains and losses, pensions, loss or gain in relation to disposal of fixed assets
Free cash
• 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
flow
Leverage • Net debt divided by last twelve months EBITDAX
LTIF • Lost time injury frequency per million work-hours
• 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
Net Debt
equivalents and less interest-bearing financial receivables from cash-pooling from related parties
Production
• Production costs include G&A allocation but exclude export and processing tariffs, finance items and R&D
costs
TRIR • Total Recordable Incident Rate per million hours worked
NOTE:
CERTAIN NUMERICAL FIGURES AND PERCENTAGES SET OUT IN THIS PRESENTATION HAVE BEEN SUBJECT TO ROUNDING ADJUSTMENTS.
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