Galp Energia SGPS S A : Results release - 2Q - 2021

2nd

QUARTER AND

FIRST HALF RESULTS 2021

July, 2021

INDEX

Cautionary Statement

This document may include forward-looking statements, including, without limitation, regarding future results, namely cash flows, dividends, and shareholder returns; liquidity; capital and operating expenditures; performance levels, operational or environmental goals, targets or commitments and project plans, timing, and outcomes; production rates; developments of Galp's markets; and impacts of the COVID-19 pandemic on Galp's businesses and results; any of which may significantly differ depending on a number of factors, including supply and demand for oil, gas, petroleum products, power and other market factors affecting them; the outcome of government policies and actions, including actions taken to address COVID-19 and to maintain the functioning of national and international economies and markets; the impacts of the COVID-19 pandemic on people and economies; the impact of Galp's actions to protect the health and safety of its employees, customers, suppliers and communities; actions of Galp's competitors and commercial counterparties; the ability to access short- and long-term debt markets on a timely and affordable basis; the actions of consumers; other legal and political factors, including changes in law and regulations and obtaining necessary permits; unexpected operating events or technical difficulties; the outcome of commercial negotiations, including negotiations with governments and private entities; and other factors discussed in Galp's Management Report & Accounts filed with the Portuguese Securities Market Commission (CMVM) for the year ended December 31, 2020 and available on our website at galp.com. This document may also contain statements regarding the perspectives, objectives, and goals of Galp, including with respect to energy transition, carbon intensity reduction or carbon neutrality. An ambition expresses an outcome desired or intended by Galp, it being specified that the means to be deployed may not depend solely on Galp. It is important to note that as of June 2, 2021, Galp's business plans and budgets do not fully reflect Galp's Net Zero Emissions target. Galp aims that, in the future, its business plans and budgets will progressively change to reflect in full this movement towards its Net Zero Emissions target. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements. Forward-looking statements express future expectations that are based on management's expectations and assumptions as of the date they are disclosed and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such those statements. Accordingly, neither Galp nor any other person can assure that its future results, performance or events will meet those expectations, nor assume any responsibility for the accuracy and completeness of the forward-looking statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Galp to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections, and assumptions. These forward-looking statements may generally be identified by the use of the future, gerund or conditional tense or the use of terms and phrases such as "aim", "ambition", "anticipate", "believe", "consider", "could", "develop", "envision", "estimate", "expect", "goals", "intend", "may'', "objectives", "outlook", "plan", "potential", "probably", "project", "pursue", "risks", "schedule", "seek", "should", "target", "think", "will" or the negative of these terms and similar terminology. Financial information by business segment is reported in accordance with the Galp's management reporting policies and shows internal segment information that is used to manage and measure the Group's performance. In addition to IFRS measures, certain alternative performance measures are presented, such as performance measures adjusted for special items (adjusted operational cash flow, adjusted earnings before interest, taxes, depreciation and amortisation, adjusted earnings before interest and taxes, and adjusted net income), return on equity (ROE), return on average capital employed (ROACE), investment return rate (IRR), equity investment return rate (eIRR), gearing ratio, cash flow from operations and free cash flow. These indicators are meant to facilitate the analysis of the financial performance of Galp and comparison of results and cash flow among periods. In addition, the results are also measured in accordance with the replacement cost method, adjusted for special items. This method is used to assess the performance of each business segment and facilitate the comparability of the segments' performance with those of its competitors. This document also contains non-financial performance indicators, including a carbon intensity indicator for energy products sold by Galp, that measures the amount of greenhouse gas emissions of those products, from their production to their end use, per unit of energy delivered. This indicator covers the direct GHG emissions of production and processing facilities (scope 1) and their indirect emissions associated with energy purchased (scope 2), as well as the emissions associated with the use of products by Galp's costumers (scope 3). The same emissions are considered for products purchased from third parties and sold or transformed by Galp. For a complete definition of scopes 1, 2 and 3 and the methodology used by Galp for this indicator please refer to Galp's website at galp.com. This document may include data and information from sources that are publicly available. This document may also include data and information provided by third parties, including Wood Mackenzie, Rystad and market analysts, which are not publicly available. Such data and information should not be interpreted as advice and you should not rely on it for any purpose. You may not copy or use this data and information except as expressly permitted by those third parties in writing. To the fullest extent permitted by law, those third parties accept no responsibility for your use of such data and information except as specified in a written agreement you may have entered into with those third parties for the provision of such data and information.

Galp and its respective representatives, agents, employees or advisers do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this document to reflect any change in events, conditions or circumstances. This document does not constitute investment advice nor forms part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or otherwise acquire securities of Galp or any of its subsidiaries or affiliates in any jurisdiction or an inducement to engage in any investment activity in any jurisdiction.

INDEX

Table of Contents

1. Results highlights ____________________________________________________________________________________________________________ 4
2. Upstream _________________________________________________________________________________________________________________ 10
3. Commercial ________________________________________________________________________________________________________________ 13
4. Industrial & Energy Management _______________________________________________________________________________________________ 16
5. Renewables & New Businesses _________________________________________________________________________________________________ 20
6. Financial Data ______________________________________________________________________________________________________________ 23

1. Income Statement ________________________________________________________________________________________________________________________________ 24
2. Capital Expenditure _______________________________________________________________________________________________________________________________ 26
3. Cash flow _______________________________________________________________________________________________________________________________________ 27
4. Financial position _________________________________________________________________________________________________________________________________ 29
5. Financial debt____________________________________________________________________________________________________________________________________ 30
6. IFRS consolidated income statement _________________________________________________________________________________________________________________ 33
7. Consolidated financial position ______________________________________________________________________________________________________________________ 34

1. Basis of reporting ___________________________________________________________________________________________________________ 36
2. Appendices ________________________________________________________________________________________________________________ 38

1. Governing bodies _________________________________________________________________________________________________________________________________ 39
2. Statement of compliance of information presented ______________________________________________________________________________________________________ 41
3. Unaudited Condensed Consolidated Financial Statements for the period ended 30 June 2021_____________________________________________________________________44

9. Definitions ________________________________________________________________________________________________________________ 78

RESULTS HIGHLIGHTS

5

2Q21 RESULTS JULY 2021

1. RESULTS HIGHLIGHTS

Second quarter 2021

Galp's adjusted operating cash flow (OCF)1 reached €470 m, up €231 m YoY, considering the very challenging macro conditions during 2020, supported by a higher Upstream contribution as well as a better downstream performance. Cash flow from operations (CFFO) was €440 m.

Free cash flow (FCF) generation was strong at €228 m, with net capex during the period of €186 m.

Net debt at the end of the period was €1,711 m, with net debt to RCA Ebitda decreasing to 1.0x.

RCA Ebitda was €571 m, with the following highlights:

• Upstream: RCA Ebitda was €467 m, a €263 m increase YoY, reflecting the higher oil price environment, which more than offset the lower production and the depreciation of the USD against the Euro.
• Commercial: RCA Ebitda of €73 m, up 22% YoY, reflecting the higher demand of oil products from a partial relief of lockdown measures in Iberia.
• Industrial & Energy Management: RCA Ebitda was €50 m, up €31 m YoY, with margins still pressured by the international environment. Energy Management

1 Adjusted operating cash flow (OCF) indicator represents a proxy of Galp's operational performance excluding inventory effects, working capital changes and special items. The reconciliation of this indicator with CFFO using IFRS is in chapter 6.3 Cash Flow.

Ebitda benefited from timing differences on trading gas derivatives, which should be partially reverted during 2H21.

• Renewables & New Businesses: No relevant RCA Ebitda as most of the operations are not consolidated. The pro-forma Ebitda 2 of the Renewables operations reached €17 m in the period, driven by robust Iberian solar capture prices in Iberia.

RCA Ebit was up €362 m YoY to €305 m, supported by the stronger operational performance, whilst including €50 m of impairments in exploration assets in Upstream.

RCA net income was €140 m. IFRS net income was €71 m, with an inventory effect of €68 m and special items of -€137 m.

First half 2021

Galp's OCF1 was €914 m, 68% higher YoY, while RCA Ebitda was €1,071 m, 41% higher YoY, given the improved macro conditions.

Capex totalled €402 m, with Upstream accounting for 71% of total investments, whilst the downstream activities represented 11% and Renewables & New Businesses 16%. Net capex represented a gain of €8 m, considering the proceeds from divestments during the period, most notably the stake in GGND.

FCF amounted to €746 m, with the strong cash generation supported by operational performance and the GGND divestment.

Considering dividends paid to shareholders of €290 m and to non-controlling interests of €78 m, as well as other adjustments, net debt decreased €354 m, compared to the end of last year.

2 Pro-forma considers all Renewables projects as if they were consolidated according to Galp's equity stakes.