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MarketScreener Homepage  >  Equities  >  Wiener Boerse  >  OMV Aktiengesellschaft    OMV   AT0000743059

OMV AKTIENGESELLSCHAFT

(OMV)
  Report
Real-time Estimate Quote. Real-time Estimate Tradegate - 12/01 03:59:59 pm
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OMV : Q3 2020 Results Conference Call

10/29/2020 | 11:00am EST

Q3 2020 Results Conference Call

Rainer Seele

Chairman of the

Executive Board and CEO

October 29, 2020

OMV Aktiengesellschaft

Disclaimer

This report contains forward-looking statements. Forward-looking statements may be identified by the use of terms such as "outlook," "expect," "anticipate," "target," "estimate," "goal," "plan," "intend," "may," "objective," "will", and similar terms or by their context. These forward-looking statements are based on beliefs and assumptions currently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties, both known and unknown, because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of OMV. Consequently, the actual results may differ materially from those expressed or implied by the forward-looking statements. Therefore, recipients of this report are cautioned not to place undue reliance on these forward-looking statements.

Neither OMV nor any other person assumes responsibility for the accuracy and completeness of any of the forward-looking statements contained in this report. OMV disclaims any obligation to update these forward-looking statements to reflect actual results, revised assumptions and expectations, and future developments and events. This report does not contain any recommendation or invitation to buy or sell securities in OMV.

2 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Macro environment - improved crude oil price, but significantly lower refining margin

Oil prices

USD/bbl

70

62

63

60

59

61

50

50

43

40

47

30

37

30

Average Brent price

20

Average realized crude price

26

10

0

Q3/19

Q4/19

Q1/20

Q2/20

Q3/20

Gas prices

EUR/MWh

14

13.0

Realized gas price (Upstream) 1

11.2

11.0

Central European Gas Hub

12

10

11.3

8.2

10.7

10.6

8.8

8

7.3

6

6.7

4

2

0

Q3/19

Q4/19

Q1/20

Q2/20

Q3/20

OMV indicator refining margin Europe

USD/bbl

6

5.5

5.0

4.9

5

4

3

2.3

2

1

0

Q3/19

Q4/19

Q1/20

Q2/20

Ethylene/propylene net margin 2

EUR/t

500

441

363

459

393

400

300

200

100

0

Q3/19

Q4/19

Q1/20

Q2/20

0.9

Q3/20

375

Q3/20

Note: All figures are quarterly averages.

3 | OMV Group, Q3 2020 Conference Call, October 29, 2020

1 Converted to MWh using a standardized calorific value across the portfolio

2

Spread between market prices of ethylene/propylene and naphtha including standard processing consumption

Key messages

FINANCIAL

PERFORMANCE

Clean CCS Operating Result of

EUR 317 mn

(67)% y-o-y

+119% q-o-q

Quarterly cash flow from operating

activities of EUR 0.8 bn

STRONG

OPERATIONS

Quarterly production of

444 kboe/d

Production cost at USD 7.5/boe

Refinery utilization rate of

90%

Strong gas storage business

DELIVERING THE

STRATEGY

Long-term oil price revision

Signed sale agreement with

VERBUND for 51% stake in Gas

Connect Austria

4 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Clean CCS Operating Result substantially impacted by lower oil and gas prices and reduced demand

Clean CCS Operating Result

EUR mn

Upstream

Corporate & Other

Downstream

949

449

145

317

490

309

335

9

(24)

6

(152)

(12)

Q3/19

Q2/20

Q3/20

Clean CCS net income attributable to stockholders

EUR mn

457

6580

Q3/19Q2/20Q3/20

Clean CCS Earnings Per Share

EUR

1.40

0.200.24

Q3/19Q2/20Q3/20

5 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Upstream - significantly weaker oil and gas prices and missing contribution from Libya

Clean Operating Result

Q3/20 vs. Q3/19

EUR mn

(474)-106%

449

398

  • Significantly weaker market environment
    • Average realized oil price decreased by 37%
    • Average realized gas price declined by 32%
    • Negative FX impact
  • Production of 444 kboe/d (-36 kboe/d)
    • Libya (-35 kboe/d)
    • New Zealand (-10 kboe/d)
    • Romania (-9 kboe/d)
    • Norway and Russia (each -4 kboe/d)
    • Malaysia (+26 kboe/d) due to ramp-up of SK408 gas field

Sales volumes decreased by 43 kboe/d due to lower production

163

(24)

Production costs increased to USD 7.5/boe (+18%) due to lower

87

production and FX effect

Q3/19

Market effects 1

Operational

DD&A 2

Q3/20

performance

  1. Market effects defined as oil and gas prices, foreign exchange impact, price effect on royalties, and hedging, selling, and distribution costs in Russia
  2. Depreciation, Depletion, and Amortization
  • Lower depreciation due to lower production volumes and effect of impairments

6 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Downstream - significantly weaker market environment, partially offset by positive hedging impact and higher gas contribution

Clean CCS Operating Result

Q3/20 vs. Q3/19

EUR mn

Weaker market environment

(155)

Refining indicator margin at USD 0.9/bbl (-84%)

490

Ethylene/propylene net margins at EUR 375/t (-15%)

At-equity

65

Operational performance

contributions

European refinery utilization rate at 90%

Gas

28

169

Lower total refined product sales (-16%)

Petchem

59

70

56

335

Improved retail performance

10

78

Decreased commercial fuels performance mainly caused by

significant fall in jet fuel demand

Fuels &

47

Positive contribution from margin hedging

Others

338

Better storage result and trading activities; significantly higher

power result in Romania

200

At-equity contributions

Negative ADNOC contribution due to significantly lower

refining margin and lower utilization rate

Q3/19

Market effects1 Operational

At-equity

Q3/20

Decreased Borealis contribution, as a result of lower

performance

contributions

integrated polyolefin margins and lower fertilizer result,

1 Market effects defined as refining indicator margin and petrochemical margins

partially offset by positive inventory effects and higher volumes

7 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Solid organic free cash flow of EUR 1.1 bn in 9m/20

Organic cash flow 9m/20

Cash flows 9m/20 vs. 9m/19

EUR bn

Decrease of EUR 1.3 bn in cash flow from operating activities excl. net

3.3

working capital change

Net working capital effects of EUR 502 mn (9m/19: EUR (227) mn)

Cash flow from operating activities of EUR 2.5 bn (9m/19: EUR 3.1 bn)

Organic cash flow from investing activities 1 at EUR (1,311) mn

(9m/19: EUR (1,334) mn)

2.0

Organic free cash flow before dividends of EUR 1,147 mn

1.7

(9m/19: EUR 1,741 mn)

1.1

Payment of dividends of EUR 220 mn (9m/19: EUR 772 mn), thereof:

OMV Petrom minorities: EUR 174 mn (9m/19: EUR 154 mn)

Gas Connect Austria minority: EUR 28 mn (9m/19: EUR 29 mn)

Hybrid owners: EUR 14 mn (9m/19: EUR 14 mn)

OMV stockholders: EUR 0 (9m/19: EUR 572 mn)

9m/19

9m/20

Inorganic cash flow from investing activities of EUR (187) mn

Cash flow from operations excl. net working capital change

Organic free cash flow before dividends 2

  1. Organic cash flow from investing activities is cash flow from investing activities excluding divestments and material inorganic cash flow components (e.g. acquisitions).
  2. Organic free cash flow before dividends is cash flow from operating activities less organic cash flow from investing activities.

8 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Healthy balance sheet

Net debt excluding leases

Gearing ratio excluding leases

EUR bn, %

26%

22%

21%

19%

Gearing ratio 1

19%

excluding

leases

12%

11%

3.7

11%

3.6

3.2

3.4

2.7

Net debt

1.7

1.7

1.8

excluding

leases

2015

2016

2017

2018

2019

Q1/20

Q2/20

Q3/20

1 Defined as net debt to equity

9 | OMV Group, Q3 2020 Conference Call, October 29, 2020

End of Sept. 2020

OMV cash position

EUR 7.3 bn

End of Sept. 2020 OMV undrawn committed credit facilities

EUR 3.2 bn

Good progress on EUR 2 bn divestment program

Divestment of OMV retail

Divestment of 51% share

network in Germany

in Gas Connect Austria

Signing expected in Q4/20

Signed on Sept. 23, 2020

Closing expected in H1/21

Closing expected in H1/21

Net debt reduction

EUR 2 bn

EUR (570) mn

Divestments in Upstream

  • Maari field in New Zealand - closing expected in Q4/20
  • Kazakhstan Upstream operations
  • Four oil fields in Malaysia

Other assets

to be announced

10 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Updated outlook 2020

2019

Outlook 2020

Brent oil price (USD/bbl)

64

40

Average realized gas price (EUR/MWh)

11.9

<10

Total hydrocarbon production (kboe/d)

487

450-4701

OMV European indicator refining margin (USD/bbl)

4.4

~ 2.5 (previously ~3.0)

Ethylene/propylene net margin (EUR/t)

433

<433

Utilization rate European refineries (%)

97%

~85%

Organic CAPEX (EUR bn)

2.3

~1.7 2

E&A expenditures (EUR mn)

360

250

  1. Depending on the security situation in Libya and potential imposed production cuts by governments
  2. Excluding Borealis consolidation after closing

11 | OMV Group, Q3 2020 Conference Call, October 29, 2020

OMV completes the acquisition of additional 39% share in Borealis

Schwechat site, Austria

  • OMV acquires additional 39% share in Borealis, increasing its share to a controlling interest of 75%
    • Purchase price of USD 4.68 bn
    • Cash-out(net of cash acquired) of EUR 3.8 bn paid in full at closing
    • Borealis will be fully consolidated in OMV's financials
    • EPS accretive from first year onward
    • Synergies of more than EUR 800 mn until 2025
  • OMV becomes #1 in European ethylene and propylene capacity and #8 in global polymer capacity

12 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Very resilient operating cash flow of Borealis of EUR 1.1 bn

OMV

Operating cash flow

EUR bn

2.9

Downstream

excluding2.3

Borealis 1.2 dividends

1.5

Borealis

Operating cash flow (incl. Borouge dividends)

EUR bn

Upstream 1.9

1.11.1

1.0

OMV

OMV

Borealis

Borealis

9m/19

9m/20

9m/19

9m/20

13 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Disciplined capital spending supports high free cash flows from combined businesses

OMV

Borealis

Organic CAPEX

CAPEX

EUR bn

EUR bn

1.9

~ 1.7

0.7

0.5

2017-19

2020

2017-19

2020

average

average

OMV & Borealis combined organic CAPEX

EUR bn

2.5 - 3.0

~ 2.4 1

2020 2021+

1 Pro-forma illustration including full year Capex of Borealis. OMV will consolidate it only starting with October 29, 2020

14 | OMV Group, Q3 2020 Conference Call, October 29, 2020

BACKUP

OMV Aktiengesellschaft

Upstream - improved crude oil price, partially offset by lower gas price and weaker USD/EUR

Clean Operating Result

Q3/20 vs. Q2/20

EUR mn

Slightly improved market environment

+128

Realized oil price increased by 46%

Realized gas price decreased by 12%

Realized hedging loss

Negative effect due to weaker USD/EUR

14

(24)

Production of 444 kboe/d (-19 kboe/d)

29

Norway (- 10 kboe/d)

Russia (-10 kboe/d)

Romania (-6 kboe/d)

Malaysia (+13 kboe/d)

85

Lower sales volumes (-11 kboe/d); overlifting of oil volumes in

Norway

Production costs increased to USD 7.5/boe (+ 21%) due to lower

(152)

produced volumes

Q2/20

Market effects 1

Operational

DD&A 2

Q3/20

Lower depreciation due to decreased production

performance

  1. Market effects defined as oil and gas prices, foreign exchange impact, price effect on royalties and hedging, selling and distribution costs in Russia
  2. Depreciation, Depletion, and Amortization

16 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Downstream - higher earnings due to improved Retail and Borealis performance

Clean CCS Operating Result

Q3/20 vs. Q2/20

EUR mn

Weaker market environment

+26

Lower refining margin at USD 0.9/bbl (-61%)

4

335

Lower ethylene/propylene net margin (-5%)

309

10

At-equity

Operational performance

6

74

contributions

52

78

Utilization rate increased from 79% to 90%

Gas

89

Higher total refined product sales by 13%

47

Significantly higher retail performance due to higher fuel and

Petchem

41

non-fuel business sales, partially offset by lower fuel margins

Slightly lower commercial fuels performance

Higher petrochemical sales

Fuels &

200

Decreased gas result due to decreasing

summer/winter

spreads

Others

173

Borealis and ADNOC contributions

Lower ADNOC contribution impacted by a significant

decrease in refining margin

Q2/20

Market effects 1 Operational

At-equity

Q3/20

Significantly higher Borealis contribution on account of higher

performance

contributions

polyolefin sales and positive inventory effects, partially offset

1 Market effects defined as refining indicator margin and petrochemical margins

by lower integrated margins

17 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Operational KPIs

Hydrocarbon production

Refined product sales

kboe/d

mn t

480

464

444

5.60

4.68

4.16

Q3/19 Q2/20 Q3/20Q3/19 Q2/20 Q3/20

Hydrocarbon sales

Refinery utilization rate

kboe/d

%

466

434

422

96

90

79

221

173

165

Oil & NGL

261

Natural gas

244

258

Q3/19

Q2/20

Q3/20

Q3/19

Q2/20

Q3/20

Retail sales

mn t

1.81

1.75

1.23

Q3/19 Q2/20 Q3/20

Natural gas sales

TWh

32.333.3

27.2

Q3/19 Q2/20 Q3/20

18 | OMV Group, Q3 2020 Conference Call, October 29, 2020

Strong balance sheet

Balance sheet September 30, 2020 vs. June 30, 2020

EUR bn

42.9

42.9

41.1

41.1

Stockholders' equity

12.3

12.7

Tangible &

19.0

intangible assets

17.5

Non-controlling interests

3.7

3.7

Trade payables

2.6

2.4

Other

8.5

8.3

10.0

non-current assets

Bonds and other

9.9

interest-bearing debts

Inventories

1.6

1.4

1.8

1.5

Trade receivables

5.7

Provisions

5.7

Cash

5.8

7.3

Liabilities associated

0.6

0.6

Assets held for sale

1.2

with assets held for sale

Other current assets

5.4

1.2

Other liabilities

6.3

7.7

3.5

Jun 30, 2020

Sep 30, 2020

Sep 30, 2020

Jun 30, 2020

  • Decrease of tangible and intangible assets impacted by impairments triggered by reassessment of long-term price assumptions
  • Hybrid bonds with a nominal value of EUR 1.25 bn issued in Sept 20, leading to increased cash and equity position

19 | OMV Group, Q3 2020 Conference Call, October 29, 2020

OMV Aktiengesellschaft

Disclaimer

OMV AG published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 15:59:04 UTC


© Publicnow 2020
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Sales 2020 18 021 M 21 686 M 21 686 M
Net income 2020 -71,7 M -86,2 M -86,2 M
Net Debt 2020 7 711 M 9 279 M 9 279 M
P/E ratio 2020 55,0x
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EV / Sales 2020 0,94x
EV / Sales 2021 0,71x
Nbr of Employees 19 228
Free-Float 43,5%
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Mean consensus OUTPERFORM
Number of Analysts 18
Average target price 32,40 €
Last Close Price 28,40 €
Spread / Highest target 39,8%
Spread / Average Target 14,1%
Spread / Lowest Target -8,45%
EPS Revisions
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NameTitle
Rainer Seele Chairman-Executive Board & Chief Executive Officer
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