Annual General Meeting 2016 - Repsol...20th May Annual General Meeting 2016 Environment and Outlook...

20th May

Annual General Meeting 2016

Environment and Outlook

2015 Milestones and Results

Proposals for the Annual General Meeting

Annual General Meeting 2016: Contents

Environment and

Outlook

20

40

60

80

100

120

2014 2015 2016

2014 average

98.9

1Q 2016 average

33.9

$/barrel

2015 average

52.4

1,5

2,5

3,5

4,5

5,5

2014 2015 2016

2015 average

2.7

1Q 2016

average

2.1

$/MBtu

2014 average

4.4

Crude oil and gas prices

Prolonged drop in crude prices and slow recovery in 2016

// Henry Hub // // Brent //


4

1

1,1

1,2

1,3

1,4

1,5

$/€

2014 2015 2016

2014 average

1.33

1Q 2016 average

1.10

2015 average

1.11

Exchange rate

Favourable evolution of exchange rate due to strong dollar

// $/€ Exchange rate //

5


Downstream

Favourable environment for Downstream

0

2

4

6

8

10

12

1Q 2016 average

6.3 2014 average

4.1

2014 2015 2016

$/barrel

2015 average

8.5

// Refining Margin Indicator //

2008 2009 2010 2011 2012 2013 2014 2015

0.2%

-3.5%

-6.4% -6.4%

-1.2%

-5.6%

-4.3%

4.5%

// Annual impact of gasolines and diesel

demand in Spain //

• Demand growth in 2015, after a fall of 30% in gasolines and 20% in

diesel from 2007 to 2014

6


7.4

6.3

5.3 4.9

4.6 4.0

5.4

4.2 3.5 3.3 3.4

3.1

3.1

1.7 1.2 1.2

1.8

1.9 0

-1.0

-2.6

-1.7

1.4

3.2

-4

-2

0

2

4

6

8

Gross Domestic Product

Spain growing at 3.2% in 2015

Source: International Monetary Fund (IMF, WEO, April 2016)

and Repsol’s Economic Research Division

2010 2011 2012 2013 2014 2015

% // Real GDP growth //

7

Emerging countries

Global economy

Advanced countries

Spain


2015: volatility of the supply and demand balance

// 2015 Balance //

Demand Supply

NON CONVENTIONALS

non-OCDE

48.5

OCDE

46.2

OPEP crude oil

+ líquids

38.8

no-OPEP

57.7

• 2015 Demand

o 94.7 million boepd/day

o +2% vs. 2014

• 2015 Supply


o +2.8% vs. 2014

2015: nearly 2 Million boepd /day misalignment between demand and supply 8

Million boepd/day


2015 OPEP production determined by increases in Irak and Saudi Arabia

// Changes in OPEP production (1) vs. September 2014 //

2015 volatility marked by an excess of production

1. Includes crude oil and Gas Natural liquids

-1,0

-0,5

0,0

0,5

1,0

1,5

20

14 S

ep

20

14 O

ct

20

14 N

ov

20

14 D

ec

20

15 J

an

20

15 F

eb

20

15 M

ar

20

15 A

pr

20

15 M

ay

20

15 J

un

20

15 J

ul

20

15 A

ug

20

15 S

ep

20

15 O

ct

20

15 N

ov

20

15 D

ec

20

16 J

an

20

16 F

eb

20

16 M

ar

20

16 A

pr

Sep 2

014

Oct 2014

Nov 2

014

Dec 2

014

Jan 2

015

Feb 2

015

Mar

2015

April 2015

May 2

015

Jun 2

015

Jul 2015

Aug 2

015

Sep 2

015

Oct 2015

Nov 2

015

Dec 2

015

Jan2016

Feb 2

016

Mar

2016

April 2016

Total OPEP

Iraq

Iran

Saudi Arabia

Other

9


Billion boepd/day

2016: start of the return to balance between supply and demand

Demand Supply

NON CONVENTIONALS

non-OCDE

49.8

OCDE

46.1

OPEP crude oil

+ liquids

39.7

non-OPEP

56.8

• 2016 Demand


o +1,3% vs. 2015

• 2016 Supply


o 0% vs. 2015

// 2016 Balance //

2016: stabilization of supply and demand growth 10


Million boepd/day

Upward price forecast

// Brent // // Henry Hub //

Analysts Average

42

56

65

36 43

49

2016 2017 2018

$/barrel

2.34

2.88

3.15

2.33 2.58

2.83

2016 2017 2018

$/Mbtu

Recovery in prices expected since late 2016/ early 2017

Rating agencies average Analysts average Rating agencies average

11


Energy Challenge: Climate Change- COP 21

// CO2 Emissions sector //

1900 1925 1950 1975 2000 2025 2050

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Million Tons CO2 e

Historical emissions

Emissions under current

policies

Emissions

under 450 ppm

scenario (2ºC)

Source: International Energy Agency (IEA), 2016.

COP 21

Scenario

Commitment to a sustainable, fair and responsible energy supply (COP 21) 12


Energy challenges: Demand growth

Source: International Energy Agency (IEA), World Energy Outlook 2015.

1. CAGR: Compound Annual Growth Rate. 2. COP 21 scenario is assimilated to the New Policies scenario defined by the International Energy Agency

Mtoe

8.000

10.000

12.000

14.000

16.000

18.000

20.000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Historical Forecasts

// Primary energy demand //

The energy will continue to grow in all scenarios

Current Policies Scenario

COP 21 Scenario(2)

450ppm Scenario

1.4%

1.1%

0.4%

CAGR (1)

2013 - 2035

13


Energy challenges Environment and Outlook

Repsol, committed to energy and environmental objectives of the XXI century 14

Securing the supply Competitiveness

Accessibility and universality Sustainability of the planet

The four

challenges of

energy

31% 24% 27% 28%

21% 22%

23% 23%

29%

18% 25% 29%

5%

10%

7% 5%

10%

14% 11% 10%

8% 4%

0%

25%

50%

75%

100%

2013 450 ppm scenario COP 21 scenario Current Policiesscenario

Other renewables

Bioenergy

Hydro

Nuclear

Coal

Gas

Oil

Primary energy demand

// Oil and gas will supply broadly 50% of primary demand in all scenarios in 2035 //

All energy sources will be needed in the future, with increasing role of gas, Repsol is well

positioned to take this opportunity 15

Source: International Energy Agency (IEA), World Energy Outlook 2015

1. COP 21 scenario is assimilated to the New Policies scenario defined by the International Energy Agency. 2. CAGR: Compound Annual Growth Rate

(1)


+0.6% +1.4% +1.7%

-0.7% +0.5% +0.9% xx% CAGR 2013-2035

1% 3%

16

Final energy demand

// Matrix of energy demand expected in 2035 //


40% 32% 37% 38%

15% 17%

17% 16%

10% 9%

9% 9%

22% 25%

25% 26%

13% 16% 12% 11%

0%

25%

50%

75%

100%

2013 Columna1 450 ppm scenario COP 21 scenario Current Policiesscenario

(1)

Coal in residential

Gas

Oil

Bioenergy

Electricity

Oil and natural gas will play a key role, to contribute more than 50% of

final energy demand in the world


1. COP 21 scenario is assimilated to the New Policies scenario defined by the International Energy Agency

Energy

CO2 emissions sources

Source: International Energy Agency (IEA), CO2 Emissions from Fuel Combustion - Highlights 2015

// Global emissions

anthropogenic in origin //

// Energy Sector: global CO2

emissions by segment //

Others

14%

Agriculture 11%

Industrial

Processing 7%

Energy

68%

Others

7% Services

3%

Residential

6%

Industrial 19%

Transport

23%

Electricity

42%


Electricity generation is now the main source of CO2,

but there is a broad field of action to reduce emissions 17

// CO2 emissions in

electricity generation //

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

1990 2013

Coal Oil Gas Others

MT CO2

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Not all oil use emits CO2

13%

5%

8%

13%

6%

55% Transport

Energy generation

Petrochemicals

Other(1)

Buildings

Other industries

Almost 40% of oil demand is for uses that do not emit CO2 during use

~39%

• 95 million barrels are consumed

everyday worldwide

Source: IEA World Economic Outlook 2015

1. Others include agriculture, transformation, and non-energy uses (asphalts and lubricants)

18


The transportation of the future will be a combination of the

internal combustion engine, hybrids and electric vehicles

gr CO2 eq/km

0

20

40

60

80

100

120

140

160

180

Internal Combustion (IC)2014

Hybrids + Bios EV Germany EV Spain EV EU EV 100% Renewable

Transportation

Manufacturing

50%

23

Vehicle

Life

cycle

Vehicle

manufacturing

Battery

manufacturing

Obtaining

energy

Use of energy

in the vehicle

Vehicle

scrapping

management

Battery waste

management + +

Electric vehicles

• Emissions from electric vehicles in motion depend on the generation mix

• Electric vehicle manufacturing emits two times more than conventional car manufacturing

due to the battery

45% coal

Internal combustion engine

• Already available technology will allow for a

reduction of 50% of emissions by 2020

// Vehicle emissions by type //

Vehicle

Battery

Emissions for each type of vehicle must take into account the entire life cycle


~50% Energy efficiency

Energy efficiency, a shared responsibility and main driver of emissions

reductions

// Contribution from energy efficiency in the reduction of global emissions //

~50%

24

25,0

27,0

29,0

31,0

33,0

35,0

37,0

39,0

2015 2017 2019 2021 2023 2025 2027 2029

• Industrial sector: Greater energy efficiency in

non-energy-intensive industries

• Residential sector: Change in lighting,

appliances, insulation, etc.

• Transport: Improvement in combustion engine

efficiency

// Main measures included in efficiency //

35 000

Mt CO2 e COP 21 Scenario(1)

450 Scenario

The International Energy Agency projects a 50% contribution from energy efficiency

in reaching scenarios compatible with the Paris Agreement roadmap


1. The COP 21 scenario is included in the New Policies defined by the International Energy Agency

25 000


Repsol is commited to reduce emissions

Innovation and technology will be key to achive our emission reduction

objectives

// Improvements in our fuels //

• “Premium” fuels

• Mix of biofuels

• Hydrogenated vegetable oils

• Automotive LPG

• R+D. New developments

25

// Different models to reduce emissions//

• Repsol reduced 9 Mt CO2 in 2008-2012 (21 Mt

in 2006-2015), equivalent to ~15% of its total

emissions

Repsol has assumed the cost of

reducing its CO2 emissions with

own resources, incorporating it to

its business model

Renewable generation model in

Spain

Economic-Industrial return and

Social return Subsidized financial return


Repsol is prepared to take on the challenges of the future

All energy types must play their part without confrontation in the energy

scenario of the future 26

...Repsol will be a stronger, more agile, and more competitive company

• Operating in the free market

• Notable technological component

• Special emphasis on natural gas

• Clear action lines in all forms of transport

• Absolute priority for energy efficiency and reducing emissions

• High asset quality

• Geographic presence in the most competitive markets

• Human team capable of successfully completing all the challenges the future holds


2015 Milestones and

Results

Main milestones of 2015

2015 marks the transformation of Repsol Group

TALISMAN

A transformational transaction

STRATEGIC PLAN

Create value in any scenario and increase resilience


28

Production of

~700 000 boepd

~2.3 billion boe proved

reserves

~1 million bpd

refining capacity

Core businesses:

Upstream and Downstream

Non-operated shareholding:

GNF

Integrated business model

Tier 1 Downstream

Global and diversified

portfolio with presence in

40 countries

World-class explorer

Capable and talented

workforce

// Talisman Acquisition// May 2015: Closing

• Transformative deal with long term view

• Competitive multiples:

EV/2P reserves ~$10/bbl

• E&P portfolio and competitiveness upgrade

• Global scale and diversification

• Generates new opportunities

• Enhanced value-creation capabilities

Repsol today

An integrated company, operating across the entire value chain


29

2016-2020 Key strategic lines

VALUE RESILIENCE

Shift from growth to value delivery, prepared for

the next growth wave

Commitment to mantain a competitive

shareholder compensation

Top tier resilience among integrated

companies

Self-financing strategy even in a stress

scenario

FCF breakeven after dividends at

$40/barrel Brent

PORTFOLIO MANAGEMENT EFFICIENCY

Synergies and Efficiency Program

with strict accountability

€2.1B/year savings

(Opex: €1.5B/year + Capex: €0.6B/year)

Capex flexibility

(~40% reduction vs 2014 Capex)

Creating value through

portfolio management

(€6.2B in divestments)

Creating value even in a stress scenario through efficiency and portfolio management


30

Strategic Plan 2016-2020: Synergies and Efficiency Programme

New Efficiency

Programme

2.1 billion euros in savings per year (more than half in 2016)

Synergies €0.36B

• Savings from integration of companies

• Benefits from enhanced portfolio

• Other synergies

€0.5B

• Capture of cost deflation

• Efficiency improvement

• Cultural change

€0.6B

€0.5B

• Maximisation of integration benefits

• Operational optimisation

• Reliability of facilities

€0.2B • Optimisation of support functions

• Simplification and value creation

€1.5B €0.6B

// 2018 Opex impact //

Upstream Opex and

Capex efficiency

Corporatation right-sizing

Downstream profit

efficiency and

improvement

// 2018 Capex impact //

• 65% of synergies already captured

• More than 1,300 efficiency

initiatives identified in

Upstream

• Downstream and Corporate progress according to

schedule


31

46% 40%

Billion dollars (2)

8000

6000

4000

2000

0

+

2017-2020 2016 2014

Strategic Plan 2016-2020: Capex reduction

• Upstream assets in advanced stage of development

• Limited presence in new capital-intensive development projects

• High share of unconventionals

(Capex responsive to crude prices)

• Portfolio optimisation after Talisman integration

• Limited commitments in exploration

o Expenses reduced(3) from ~$2.1B/year (2011-2014) to ~$0.9B/year (2016-2020)

• Low Downstream capital needs

High flexibility to manage investments

// Group Annual Capex (1) //

1. Repsol and Talisman were two separate companies in 2014 2. Figures in dollars with an exchange rate of $1.07/€ during the SP 3. Exploration expenses include G&G and G&A


32

Strategic Plan 2016-2020: From growth to value

// Production Evolution //

0

1 000

800

600

400

200

x2

2020 Portfolio

Management

2020 organic production

2016 2014

kboepd

• Achieved Critical mass in E&P business

• Extensive portfolio and development projects

• Optionality to improve portfolio value by

divestment


Upstream: with optimal size and portfolio achieved, the focus now shifts to value creation 33

Strategic Plan 2016-2020: Production

// Production ~700 kboepd by 2020 // // Focus: 3 regions and 3 play types //

Offshore

shallow

33%

Onshore

core plays

35%

Non-operated

offshore deep

9%

Unconventional

23%

2016-2020 production

~90% of production from core regions (2016-2020)

North America Latin America South-east Asia

1 000

800

600

400

200

0

kboepd

Portfolio

management

A larger and more focused Exploration & Production portfolio

2020 2014


34

0

25

20

15

10

5

30

35

~29

Investments

~10

Divestments

~21

Operating cash flow post

tax

~6 ~4

Financial expenses Cash for dividend

and debt

Billion euros

// Cash movements 2016-2020 (accumulated) // (Stress scenario)

Self-financed strategic plan even under the stress scenario

Strategic Plan 2016-2020: Self-financed 2015 Milestones and Results

35

36

Strategic Plan 2016-2020: Value and Resilience

Stress scenario

x1.6

0

5,000

7,900

2015 2020

// EBITDA(2) //

Stress scenario

~€10B

// Cash for dividends and debt (2016-2020) //

1. Free cash flow breakeven after dividends 2. EBITDA at CCS (calculated based on inventories valuation at current cost of supplies)

9000

6000

3000

Millions of euros

Synergies and efficiency Capex flexibility

Active portfolio

management

Breakeven(1)

€2.1B/year More than 40%

700-750 kboepd

€6.2B

in divestments

~$40/bbl

pre-tax savings

by 2018

Upstream FCF

breakeven 2018+

2016-2020

Capex reduction vs 2014

Opex Capex

€1.5B €0.6B

~$60/bbl

Group FCF breakeven

2016-2020

Portfolio management and efficiency measures to create more value. ~$40/bbl breakeven


Results 2015

1. Net recurring income at CCS (calculated based on inventories valuation at current cost of supplies)

2014 2015

Upstream 0.589 (0.909)

Downstream 1.012 2.150

Gas Natural Fenosa 0.441 0.453

Corporate and adjustments (0.335) 0.166

Adjusted Net Income (1) 1.707 1.860

Equity effect (0.606) (0.459)

Non-recurring income (0.086) (2.628)

Interrupted operations income 0.597 -

Net income 1.612 -1.227

+9 %

Figures in billions of euros

The integrated business model pushed adjusted net income over €1.8B with

severely depressed prices


37

Comparison with peers

Resilient results under much lower crude oil and gas prices

// Adjusted net income 2015 vs 2014 //

Peers: BP, Statoil, BG, ConocoPhillips, Total, ExxonMobil, Chevron, and RD Shell

+9%

-18%

-50% -50% -51% -53% -58% -59%

-68%

-126% -140%

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

Repsol

Peer 1

Peer 2 Peer 3 Peer 4 Peer 5 Peer 6

Peer 7

Peer 8

Peer

Average


38

Adjusted net income - Upstream

Upstream punished by environment

• Benchmark raw material prices plummeted

o Repsol's realization prices were better than these

international benchmarks

• Lack of production in Libya due to the country’s situation

• Partially offset by higher production

2014 2015

€0.589B

€(0.909)B

// Adjusted net income //


Billions of euros

39

Exploration - Upstream

1. 32 wells: 19 exploratory + 13 appraisal (16 positive: 4 exploratory + 12 appraisal)

• 16 wells out of 32 with positive results(1)

o Algeria: Five in SE Illizi

o Brazil: Two in BM-C-33

o Bolivia: Three in Andina and one in Margarita

o U.S.: Three in Alaska

o Russia: Two in Karabashsky

• Acquisition of exploratory accreage o 190 blocks (74 from Talisman acquisition)

mainly in the U.S.

o Total net surface area (Repsol W.I.) = 112 931 km2

(93 462 km2from Talisman acquisition) Positive wells

16 positive wells in 2015

Pao de Açucar-A1 and A-2

Q-8, Q301, and Q-9

TESO-2, NDC-3, TDE-2,

TDE-3, and OTTS-1

K-4 and 6-P

MGR-8, BQN-4X,

RGD-102 and LPÑ-91


40

Production - Upstream

Production grew by 57% in 2015 and is at around 700 kboepd in 1Q 2016

kboepd

355

559

2014 2015

• Talisman assets contributed ~200 kboepd

• Sapinhoá North (Brazil) production ramp-up

• Production started in Cardón IV (Venezuela)

• Growth projects have contributed 76 kboepd

• In the first quarter of 2016 production exceeded 700 kboepd

o 330 kboepd contributed by Talisman

+57%


// Production //

41

Reserve replacement ratio - Upstream

Significant increase in reserves, higher quality, and geographic diversification

Replacement ratio (organic)

2015 Reserves

159% • Organic reserve replacement ratio: 159%

o Six years at over 100%

• Proven reserves increased 54% to 2.373B boe

o More than 1B boe reserves added

• Reserve replacement ratio including Talisman > 500%


42

Growth projects - Upstream

Average reserve replacement rate from past three years: X%

Brazil - Sapinhoá (Guará)

• Average 2015 production of 190,000 boepd (current production at 250,000 boepd)

• Well connections in 2016 to reach 270,000 boepd

Brazil - Lapa (Carioca)

• FPSO in construction and equipment installation underway

• Production began in 4Q16, at 60,000 boepd by 2017

Algeria - Reggane

• In construction stage. Will produce 7 Mm3/day by 2017

UK - Monarb

• In construction stage

• Increased production in 2017 to 34,000 boepd

Malaysia - Kinabalu

• Production increase to 7,000 boepd by 2017

1

2

3

4

Note: Production figures at 100% (gross)

5


43

6

7

8

Note: Production figures at 100% (gross)

Growth projects - Upstream 2015 Milestones and Results

44

Bolivia - Margarita / Huacaya

• Margarita stage 2 completed. Stage 3 underway

• Average 2015 production was 17.6 Mm3/day. (Hitting 20 Mm3/day in March 2016)

Peru – Kinteroni/Sagari

• Kinteroni average production in 2015 was 2.4 Mm3/d

• 4.5 Mm3/d starting in May 2016

• Sagari launch in 2018 to a total of 5.7 Mm3/d

Venezuela - Cardón IV

• Production began July 2015

• Hit 13.2 Mm3/day December 2015.

• Production now at 14.2 Mm3/day

Adjusted net income - Downstream

Downstream's excellent performance doubled its results

• Downstream performance has offset Upstream’s low cycle from

the drop in crude and gas prices

• Improved margins in refining and chemicals

• Improved performance in trading

• Larger volumes commercialised

2014 2015

€1.012B

€2.15B + 113%



Billions of euros

45

-6

-4

-2

0

2

4

6

8

10

2010 2011 2012 2013 2014 2015

$/barrel

Leadership - Downstream

Downstream resilience driven by integration of commercial and industrial departments

1. Calculated as adjusted operating income (CCS) of R&M, divided by volume of crude processed for 10 companies (Repsol, Cepsa, Eni, Galp, OMV, MOL, Total, PKN Orlen, Hellenic Petroleum, Saras)

• Leadership in refining and marketing integrated

margin

• Excellent asset quality

• Investments in efficiency and operating

improvements to leverage on market’s current situation

Repsol’s integrated margin Range of comparable companies


$/barrel

46

// Refining and marketing's integrated margin(1) in Europe // (Repsol compared to industry)

Refining - Downstream

Historic Refining margins

2014 2015

4.1

8.5 $/barrel

// 2015 Utilisation //

88.9%

Distillation

• Margin indicator increased to $8.5/barrel

• More volume produced and products sold

• Refining system efficiency

o Large projects bringing in +4$/barrel

o Lower energy costs

o Higher capacity utilization

• Cutting-edge lubricants plant in Cartagena, partnered with

Korean company SKL

• Upgrade project in Pampilla refinery in Peru

// Refining margin indicator//

(Spain)

103.7%

Conversion


47

Commercial, Chemicals, Gas & Power - Downstream

Larger volume and better performance in Commercial, Trading, and Chemicals activity

• Sales growth in Marketing (+7.4%)

• Prominent position in non-oil (stores, El Corte Inglés, ONCE, Michelin, Disney, etc.)

• New business models

• Better performance in lubricants, asphalts, and

specialised products

Commercial

• Better performance in Trading

• Weaker performance in Gas & Power due to the

drop in market prices

Trading and Gas & Power

• Competitiveness Plan: efficiency and differentiation

• Sales up by 6%

• Better market situation and environment

Chemicals


48

1.9 MM€

8 MM€

(5.5 MM€) 4.7 MM€ (0.7 MM€) 0.5 MM€ (1 MM€) 11.9 MM€

0

4

8

12

16

Net DebtDecember 2014

TalismanAcquisition

Net Cash Flow CAPEX Divestments Dividends paid Hybridsissuance

Net DebtDecember 2015

€12B

Financial situation

Solid financial position

• Major impact from the purchase of Talisman

• Cash generation for debt reduction in 2015 (billion

euros)

• Bond issue (billion euros)

• Repurchase of Talisman bonds

• Liquidity (€9.13B) covers short term maturities more than twice

// Net debt // billion euros

TALISMAN

DEBT

ACQUISITION

PRICE

Cash generation for debt reduction:

One billion euros

16

12

8

4

0


49

20%

40%

60%

80%

100%

120%

140%

1-ene-15 1-mar-15 1-may-15 1-jul-15 1-sep-15 1-nov-15 1-ene-16 1-mar-16

Repsol share

Repsol's shareholder compensation still competitive

• Impact of price environment on all oil companies

• Dividends paid out in 2015: 0.96 euros/share

• January 2016: interim dividend payout (0.466 euros/share) with high acceptance of scrip

• February: final dividend payout of 0.30 euros/share

proposed

Share behaviour associated with

crude prices


// Repsol shares and Brent // Base 100

January

2015

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb March

2016

Repsol

Brent

50

First quarter 2016 Results

Positive and increasing results in Company business units

1Q 2016

Upstream 0.017

Downstream 0.556

Gas Natural Fenosa 0.099

Corporate and adjustments (0.1)

Adjusted net income 0.572

Equity effect (0.157)

Non-recurring income 0.019

Net income 0.434

Figures in billions of euros


51

Upstream performance first quarter 2016

Positive results despite drop in prices

kboepd

355

714

4Q 2015 1Q 2016

// Production //


1Q 2015

€(0.190)B

€0.017B


Billions of euros

1Q 2016

698

1Q 2015

+101%

+2%

52

Downstream performance first quarter 2016

Strong performance of Downstream business, especially in Chemicals and Refining


1Q 2015

€0.534B

€0.556

B


Billions of euros

1Q 2016

• Robust Refining margin indicator ($6.3/barrel)

o 86% distillation use

o 103% conversion unit use

• Larger margins and volumes in Chemicals due to:

o Operational improvements

o More favourable environment

• Commercial business units in line with first quarter 2015

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Efficiency

and

synergies

programme

Meeting our commitments

Ability to reduce debt after dividend payout, even in low price

environment


// 2016 Target //

// 2016 Estimate//

Efficiencies +€0.9B

+€1B

Total +€1.1B +€1.2B

€0.2B

€0.2B Synergies

Capex

flexibility

// 2016 Target //

// Current //

Repsol Capex ~€3.9B €0.8B (4)

Divestments

and portfolio

management

// 2016-17 Target //

// Current //

Divestments €3.1B

€2.8B(1)

Production 706,000 boed (2) 714,000 boed (4) Value and

resilience

// Target //

// Current //

FCF Breakeven (3) ~$40/boe

~$40/boe (4)

Upstream FCF

breakeven ~$65/boe ~$65/boe (4)

1. Includes agreed-upon transactions and other operations. 2. 2016 annual budget. 3. Free cash flow breakeven after interest and dividends. 4. Figure corresponding to 1Q 2016.

~€0.24B recorded during first quarter

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Innovation and sustainability

Innovation and sustainability, a priority

• Cutting edge projects in Upstream

• Leaders in R&D in energy for transportation

• More flexible refining and less CO2

• 3rd year of Inspire: 98 proposals received

• Global talent

o 400 researchers in Spain, the US, and Brazil

o Networking with more than 100 universities and

research centres around the world

• 26 patents and 46 scientific publications

// Technological innovation // // Sustainability //

• 22.7 million euros in voluntary social investment

• 15 sustainability plans with over 700 activities linked to variable

(over 90% fulfilment)

• Social energy Fundación Repsol

o Social investment: 10.1 million euros

o 200 projects and 800,000 beneficiaries in 2015

o Entrepreneurs Fund: Five years (2,000 proposals and 32 projects “incubated”)


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Safety and environment

Accident frequency rate

0

2

4

6

8

10

2002 2015

-90%

// Zero Accidents commitment // // Energy Efficiency //

Committed to safety and the environment

• 379,000 new tons of CO2 prevented in 2015

• Up to 4 million tons of CO2 annualy prevented

• Additional reduction of another million tons by 2020

• Less waste and better water management

• Oil&Gas Climate Initiative

• Path focused on Zero Accidents goal

• 2020 plan of proactive safety focused on people,

processes, and plants


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Conclusions

Repsol: a stronger, more agile, and more competitive company

• Highly integrated company

• Achieved the right-sizing in

Exploration and Production

• Leadership in Downstream

• Skilled and committed workforce

• Optimised portfolio: divestments

• Technology and know-how

• Focus on key areas and types of

plays

• Safety and sustainability

• Efficiency in Opex and Capex

• Flexibility in Capex management

• Maintenance of rating

• Positive cash flow at $40/barrel

Value creation Resilience


Integrated business model

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Proposals for the

Annual General

Meeting

Proposals for the Annual

General Meeting

• Points regarding the annual accounts, results allocation, management by the board and re-election of accounts

auditor

o First. Review and approval, if appropriate, of the Annual Financial Statements and Management Report of Repsol, S.A.,

the Consolidated Annual Financial Statements and Consolidated Management Report, for fiscal year ended 31 December

2015.

o Second. Review and approval, if appropriate, of the proposed results allocation for 2015.

o Third. Review and approval, if appropriate, of the management of the Board of Directors of Repsol, S.A. during 2015.

o Fourth. Appointment of the Accounts Auditor of Repsol, S.A. and its Consolidated Group for fiscal year 2016.

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• Points regarding shareholder’s remuneration

o Fifth. Increase of share capital in an amount determinable pursuant to the terms of the resolution, by issuing new common shares

having a par value of one (1) euro each, of the same class and series as those currently in circulation, charged to voluntary

reserves, offering the shareholders the possibility of selling the free-of-charge allocation rights to the Company itself or on the

market. Delegation of authority to the Board of Directors or, by delegation, to the Delegate Committee or the CEO, to fix the date

the increase is to be implemented and the terms of the increase in all respects not provided for by the General Meeting, all in

accordance with article 297.1.(a) of the Companies Act. Application for official listing of the newly issued shares on the Madrid,

Barcelona, Bilbao and Valencia stock exchanges, through the Automated Quotation System (Sistema de Interconexión Bursátil), as

well as on any other stock exchanges or securities markets where the Company´s shares are or could be listing.

o Sixth. Second capital increase in an amount determinable pursuant to the terms of the resolution, by issuing new common shares

having a par value of one (1) euro each, of the same class and series as those currently in circulation, charged to voluntary

reserves, offering the shareholders the possibility of selling the free-of-charge allocation rights to the Company itself or on the

market. Delegation of authority to the Board of Directors or, by delegation, to the Delegate Committee or the CEO, to fix the date

the increase is to be implemented and the terms of the increase in all respects not provided for by the General Meeting, all in

accordance with article 297.1.(a) of the Companies Act. Application for official listing of the newly issued shares on the Madrid,

Barcelona, Bilbao and Valencia stock exchanges, through the Automated Quotation System (Sistema de Interconexión Bursátil), as

well as on any other stock exchanges or securities markets where the Company´s shares are or could be listing.


General Meeting

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• Point regarding programs for participation in the share capital.

o Seventh. Share Acquisition Plan by Beneficiaries of Multiannual Remuneration Programmes.

• Points regarding the composition of the Board of Directors.

o Eight. Re-election of Mr. Isidro Fainé Casas as Director.

o Ninth. Ratification of the appointment by co-optation and re-election as Director of Mr. Gonzalo Gortázar Rotaeche.

• Points regarding Remuneration of the Company Directors.

o Tenth. Advisory voting on the Annual report on Repsol, S. A. Board Member Remunerations for the 2015 fiscal year.

o Eleventh. Implementation of a compensation system referred to the share value for the CEO of the Company.

•Points regarding general matters

oTwelfth. Delegation of powers to interpret, supplement, develop, execute, rectify and formalize the resolutions adopted by the

General Shareholders’ Meeting.


General Meeting

61

20th May

Annual General Meeting 2016

Annual General Meeting 2016 - Repsol...20th May Annual General Meeting 2016 Environment and Outlook...

Documents

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