Gazprom_investor_day_2019_presentation_watermark
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A NEW APPROACH TO MANAGING THE CAPITAL INVESTMENTS
CORE PORTFOLIO
•Base: sustainable projects under all development scenarios
•Strategic bets: removing uncertainty in key parts of new projects leading to FID
CORE
PORTFOLIO
OPEN OPTIONS
•new oiland gas-industry projects dependent on external environment
2019F INVESTMENTS (US$ BN)
4.0
5.0
5.9
1.9
0.9
UPSTREAM
•Development in line with 2025 Strategy
•Improving efficiency and cutting costs
•Exploiting new technologies
DOWNSTREAM
• Refinery modernisation
0.8 |
• Monetising Gazprom Group’s liquid |
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hydrocarbon reserves |
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•Developing new classes of reserves by applying breakthrough technologies
•Possible M&A
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OIL |
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HIGHER DISTRIBUTIONS TO SHAREHOLDERS
ARE BOOSTING SHAREHOLDER VALUE
ACQUISITION COSTS VS MARKET CAP AND DIVIDENDS, US$ MLN |
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ATTRACTIVE DIVIDEND YIELD1 |
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38.5
Dividends announced 17.8 2006-2018
20% interest in |
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Gazprom Neft, 2009 |
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Acquisition of a |
Current |
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market cap |
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75.68% interest in |
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Sibneft, 2005 |
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Acquisition cost |
Market cap and dividends |
11%
9%
7% |
7% |
6% |
7% |
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2% 3%
GAZPROMGazprom Lukoil |
Rosneft Gazprom Bashneft Tatneft SurgutNOVATEK |
NEFTeft |
neftegaz |
• Gazprom Neft paid more than US$14 bn in dividends to |
• Gazprom Neft has announced an interim dividend every year since |
PJSC Gazprom from 2006 through 2018, and more than |
2013 (with the sole exception of 2016) |
US$600 mln to minority shareholders |
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Source: Company data, Bloomberg
1 Dividend yield calculated as a ratio of all announced dividends through 2018 and a share price as of 1/1/2018
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OIL |
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FINANCE
MR. ANDREY KRUGLOV
Deputy Chairman of
the Management
Committee, CFO,
Gazprom
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STRONG FINANCIAL RESULTS
KEY HIGHLIGHTS:
•9m2018 EBITDA growth +54% y-o-y in dollar terms
•7 consecutive quarters of LTM EBITDA growth in dollar terms
•$6 bn1 positive Free cash flow in 9m2018 (vs. –$0.9 bn1 in 9m 2017)
•Reduction of leverage continues: Net debt1/EBITDA decreased to 0.9 vs 1.4 in 2017
KEY FACTORS:
•Record high gas exports to Europe in 2018
•Gas, oil and oil products price growth
•High level of cost control, optimization and prioritization of CAPEX schedule
•Lower costs due to Ruble weakening
•Robust oil business growth
1 Adjusted for bank deposits
.7
21.5
19.8
2016 1q17 2q17 3q17 2017 1q18 2q18 3q18
ЕBITDA LTM, USD bn
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KEY GAS
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BOVANENKOVOFIELD |
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GRYAZOVETS- |
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39 |
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SMALL-SCALE LNG |
SLAVYANSKAYA |
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167 |
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AT PORTOVAYACS |
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RUB BN |
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NORD STREAM 21 |
15 |
RUB BN |
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53 |
RUB BN |
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Ukhta |
RUSSIA |
CHAYANDA FIELD |
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RUB BN |
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120 |
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St. Petersburg |
UKHTA-TORZHOK2 |
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Torzhok |
Gryazovets |
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31 |
RUB BN |
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RUB BN
Moscow
Greifswald
GERMANY
TURKSTREAM
Anapa
26 
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PJSC Gazprom |
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(parent company) |
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2019 Investment Program |
POWER OF |
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1,326 RUB BN |
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(INCL. VAT) |
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SIBERIA |
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148 |
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RUB BN |
AMUR GPP2 |
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320
RUB BN
Amur GPP
Blagoveshchensk
KEY INVESTMENT
PROJECTS
RUB BN |
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Kiyikoy |
TURKEY |
CHINA |
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1PJSC Gazprom’s Share in Nord Stream 2 financing in 2019
22019 project CAPEX amount. Financing source is a bridge facility. Project is not included in PJSC Gazprom‘s Investment program, actual spending will be reflected in Gazprom Group CAPEX volumes.
• RUB BN — CAPEX 2019 (INCL. VAT)
FINANCE
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STRATEGIC PROJECTS TO DELIVER PROFIT GROWTH
2019 Commissioning of strategic projects
Nord Stream 2,
TurkStream and Power of Siberia put into operation
Expansion of direct access to European and Turkish markets
•Annual positive effect of Nord Stream 2 and TurkStream on EBITDA and FCF;
•NPV >$17 bn @ 9% discount rate
Expansion to AsiaPacific region
PROJECT DESIGN |
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VOLUMES OF GAS |
BCM |
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DELIVERIES TO |
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CHINA |
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via Power of Siberia |
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pipeline |
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2019 |
… |
2025 |
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By 2025
•Additional export volumes to China
•Up to 10% gas production and 20% gas exports growth1
1 |
Compared with 2018 levels |
FINANCE |
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CAPEX1 OUTLOOK
PJSC GAZPROM – PARENT COMPANY |
GAZPROM NEFT |
GAZPROM ENERGOHOLDING |
(MOST OF GAS BUSINESS PROJECTS) |
(OIL BUSINESS) |
(POWER GENERATION BUSINESS) |
RUB bn |
RUB bn |
RUB bn |
1600 |
800 |
400 |
1400 |
600 |
300 |
1200 |
400 |
200 |
1000 |
200 |
100 |
800 |
0 |
0 |
2017 |
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2018 |
2019 |
2020 |
2021 |
2017 |
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2018 |
2019 |
2020 |
2021 |
2017 |
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2018 |
2019 |
2020 |
2021 |
KEY |
• |
Power of Siberia incl. upstream |
KEY |
• |
Key greenfieldsdevelopment |
KEY |
• |
Grozny TPP |
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PROJECTS: |
• |
Nord Stream 2 |
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PROJECTS: |
• |
Brownfields maintenance |
PROJECTS: |
• |
Svobodnenskaya TPP |
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• |
TurkStream |
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• |
Downstream projects: |
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• |
Panchevo TPP |
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• |
Kharasaveyskoye field |
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Moscow and Omsk Refineries |
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• |
Maintenance |
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COMPLETION OF |
• |
Start of production at Yamal Peninsula |
KEY PRIORITIES: |
• Ramp up of exports to China incl. Amur GPP |
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2010-2020 |
• |
Direct export routes to Europe |
2020-2030 |
• Additional gas export projects to China |
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INVESTMENT CYCLE: • |
Beginning of export to China |
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• |
Yamal fields and Northern corridor development |
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• Development of oil and utilities business |
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• |
Baltic LNG and 3rd train of Sakhalin 2 |
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1 |
Incl. VAT |
FINANCE |
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FCF RECOVERS DESPITE PEAK CAPEX
FCF vs. CAPEX
RUB bn |
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Cash CAPEX |
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OCF adj.1 |
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FCF adj.1 |
2,055 |
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2000 |
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1,610 |
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1,494 |
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1,430 |
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1,426 |
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1500 |
1,369 |
1,406 |
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1,192 |
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1000 |
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445 |
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500 |
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369 |
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125 |
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24 |
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0 |
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2016 |
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2017 |
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9M2018 |
9M2018 LTM |
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1 |
Adjusted for changes in short-term bank deposits |
FINANCE |
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FCF FROM GAS BUSINESS, OIL AND POWER GENERATION
ADJ. FCF BREAKDOWN1
USD bn |
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8.0 |
7.5 |
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6.3 |
6.0 |
6.0 |
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4.0 |
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3.0 |
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2.3 |
1.9 |
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2.2 |
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2.0 |
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0.5 |
1.1 |
0.8 |
0.4 |
0.8 |
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0.0 |
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-0.2 |
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-1.0 |
-0.9 |
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-2.0 |
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-1.5 |
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2015 |
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2016 |
2017 |
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9M2018 |
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Gas business |
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Oil business |
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Power generation business |
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Gazprom Group |
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•In 9M2018 50% of FCF was generated by oil and power business segments
•Peak capex in gas business in 2018-2019, capex moderation after 2020
•Past investments in oil and power generation now bring healthy returns
1 |
Adjusted for short-term deposits |
FINANCE |
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49 |
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KEY DEBT METRICS
TOTAL DEBT AND NET DEBT adj. |
1.5 |
1.4 |
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6,000 |
RUB bn |
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1.5 |
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0.9 |
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0.9 |
4,000 |
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1.0 |
2,000 |
1,491 |
1,083 |
1,199 |
1,308 |
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0.5 |
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1,952 |
1,747 |
2,068 |
2,204 |
0 |
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0.0 |
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2015 |
2016 |
2017 |
3Q2018 |
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Net debt adj. for bank deposits |
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Cash&Cash equivalents (incl. deposits) |
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Net Debt adj./Adj.EBITDA 1 |
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3Q2018 ADJUSTED NET DEBT STRUCTURE |
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CREDIT RATINGS OF GAZPROM |
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4,000
3,000
2,000
1,000
0
RUB bn |
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1.1 |
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886 |
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0.9 |
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421 |
1 |
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3,512 |
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2,627 |
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2,204 |
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Total Debt |
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Cash & |
Net Debt ST deposits LT deposits |
Net Debt |
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equivalents |
reported |
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adjusted |
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1.5 |
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Gazprom’s rating |
Sovereign rating of Russia |
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Fitch2 |
BBB– (positive) |
BBB– (positive) |
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1 |
(investment grade) |
(investment grade) |
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Moody's2 |
Baa2 (stable) |
Baa 3 (positive) |
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0.5 |
(investment grade) |
(investment grade) |
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S&P2 |
BBB– (stable) |
BBB– (stable) |
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0 |
(investment grade) |
(investment grade) |
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Dagong |
AAA (stable) |
A (stable) |
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NET DEBT ADJ./ADJ.EBITDA 1 |
ACRA |
AAA (RU) (stable) |
- |
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1 Calculated using dollar values of Net debt and EBITDA. Net Debt adjusted for the bank deposits reported as a part of Other current and non-current assets |
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2 |
Gazprom’s ratings are caped by sovereign ceiling of Russia |
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FINANCE |
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50 |
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