SARAS FY 2018 and Q4 2018 results and Business Plan 2019 - 2022 4 th March 2019 4 March 2019 Saras SpA 1
AGENDA Highlights Segments Review Outlook and Business Plan 2019 – 2022 Additional Information DISCLAIMER Certain statements contained in this presentation are based on the belief of the Company, as well as factual assumptions made by any information available to the Company. In particular, forward-looking statements concerning the Company’s future results of operations, financial condition, business strategies, plans and objectives, are forecasts and quantitative targets that involve known and unknown risks, uncertainties and other important factors that could cause the actual results and condition of the Company to differ materially from that expressed by such statements
FY/18 and Q4/18 highlights Change Change EUR million FY 2018 FY 2017 Q4/18 Q4/17 % % Reported EBITDA 323.7 504.3 -36% (124.3) 201.2 -162% Reported Net Result 140.4 240.8 (13.7) 131.4 -42% -110% Comparable 1 EBITDA 364.8 522.5 -30% 92.0 109.8 -16% Comparable 1 Net Result 132.6 217.4 -39% 73.6 55.8 32% Net Financial Position 46 87 46 87 FY/18 refining impacted by lower refining margins (higher oil price) and volumes (also as effect of the fire on Sept.). Strong Marketing segment results and Power Generation Q4/18 Refining influenced by volatility and shrinking heavy-light diff. in part offset by good industrial and commercial performance. Marketing delivered sounds results. Power stable Positive Net Financial Position (+EUR 46 M) even after investing EUR 243 M in our business and paying EUR112m of dividends Proposal of a dividend equal to EUR 0.08 per share, equal to 56% of comparable net profit, corresponding to a DY of 4.6% at current market price (2) 1. In order to give a better representation of the Group’s operating performance, and in line with the standard practice in the oil industry, EBITDA and the Net Result are displayed valuing inventories with FIFO methodology, excluding unrealised inventories gain and losses, due to changes in the scenario, by valuing beginning-of-period inventories at the same unitary value of the end-of-period ones. Moreover the realised and unrealised differentials on oil and exchange rate derivatives with hedging nature which involve the exchange of physical quantities, are reclassified in the operating results, as they are related to the Group industrial performance, even if non accounted under the hedge accounting principles. Non-recurring items by nature, relevance and frequency and derivatives related to physical deals not of the period under analysis, are excluded by the operating results and the Net Result. EBITDA and Net Result calculated as above are called “comparable”. Based on closing price of 1 st March 2019 2. 4 March 2019 Saras SpA 3
Highlights: Diesel and Gasoline Crack Spreads Med: Gasoline Crack spread vs Brent Med: Gasoline Crack spread vs Brent monthly averages monthly averages 25 25 2018 2017 20 20 '13-'17 avg '13-'17 range 15 15 US$/bl US$/bl 10 10 5 5 0 0 -5 -5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Med: Diesel Crack spread vs Brent monthly averages 30 2018 2018 2017 2017 25 '13-'17 avg '13-'17 avg '13-'17 range '13-'17 range 20 US$/bl 15 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4 March 2019 Saras SpA 4
Highlights: Historical Crack Spreads and Ratios to Brent Ratios of Product Cracks FOB Med to Brent Dated 90 130 Cracks CIF Med / Brent Dated (%) 70 115 50 100 Brent Dated ($/bl) 30 85 10 70 -10 55 -30 40 -50 25 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 % Crack ULSD FOB Med / Brent Dated % Crack UNL FOB Med / Brent Dated % Crack LSFO FOB Med / Brent Dated Brent Dated Platts Crudes premium / discount vs Brent 1.10 1.05 1.00 Ratio vs Brent dtd 0.95 0.90 0.85 0.80 0.75 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Azeri Light / Brent dtd Ural RCMB / Brent dtd Bashra Light /Brent dtd Arabian Heavy / Brent dtd Note: Updated until February 26 th , 2019 4 March 2019 Saras SpA 5
Highlights: Refining and Power Generation Margins 14 $/bl 12 10.4 9.3 9.4 10 9.2 9.1 8.8 8.1 8.2 8.1 3.4 8 3.3 3.3 3.4 6.6 3.9 3.8 3.3 7.0 3.8 6 4.3 6.1 5.8 3.2 6.0 5.2 5.0 4.9 4 4.6 4.3 3.8 3.8 3.4 3.5 3.3 2 2.3 2.2 2.4 2.0 1.7 1.6 0 2017 2018 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Refinery Margin IGCC margin EMC Benchmark Refinery margins: ( comparable Refining EBITDA + Fixed Costs) / Refinery Crude Runs in the period IGCC margin: (Power Gen. EBITDA + Fixed Costs) / Refinery Crude Runs in the period EMC benchmark: margin calculated by EMC (Energy Market Consultants) based on a crude slate made of 50% Urals and 50% Brent 4 March 2019 Saras SpA 6
Segments Review
Segment Review: Refining Q4/18 Comparable EBITDA 125 Comparable EBITDA at EUR 24.2M (vs. EUR 45.8M in Q4/17) EUR M Crude throughput at 26.5Mbl (+3% vs. Q4/17) thanks to a lighter 96.7 100 maintenance cycle and a stronger operating performance. Less favorable reference scenario and high volatility: higher 70.1 69.6 75 average oil price and lower gasoline crack spread, partially compensated by stronger diesel crack spread and the 50.5 strengthening of USD versus EUR. Higher unitary prices for 45.8 50 electricity, CO2 and hydrogen boost variable costs. 24.2 Good industrial performance despite the disoptimization deriving 20.8 25 from the effects of the fire occurred in September 9.1 Strong commercial performance 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 FY/18 Comparable EBIT Comparable EBITDA at EUR 104.6M (vs. EUR 282.2M in 125 FY/17) EUR M 100 Refinery crude oil runs at 98.6 million barrels (-4% versus FY 2017) due to lower operating performance (Q2/18) and to the effect of the 67.4 fire which, the night of 18th September, involved a service area of 75 the distillation unit that were temporarily shut down. 42.30 42.1 50 Macro: higher oil price, weaker gasoline and negative effect from 21.9 exchange rate only partially offset by strong middle distillates 25 13.8 0 EUR million Q4/18 Q4/17 FY/18 FY/17 -6.8 -5.8 Comparable EBITDA 24.2 45.8 104.6 282.2 -25 -17.1 Comparable EBIT (5.8) 13.8 (7.8) 165.6 -50 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 4 March 2019 Saras SpA 8
Segment Review: Refining – Crude Oil Slate and Production REFINERY RUNS Q4/18 2017 2018 Lower crude runs due to Crude oil K tons 3,631 14,060 13,512 operating performance and Complementary feedstock K tons 355 1,291 1,319 stop of distillation units at the end of September (as effect of the fire that affected a service area) CRUDE OIL SLATE Q4/18 2017 2018 Light extra sweet 37% 37% 36% Light sweet 11% 12% 12% Changes in crude slate Medium sweet/extra sweet 0% 0% 0% (more light extra sweet 34% 34% Medium sour 37% and less medium sour) Heavy sour/sweet 18% 17% 15% due to different supply mix on the market ° API Average crude gravity 33.8 33.7 33.7 PRODUCTION Q4/18 2017 2018 (From crude runs and feedstock) LPG k tons 66 318 291 Yield 1.7% 2.1% 2.0% Slightly higher gasoline Naphtha + gasoline k tons 1,059 4,152 4,132 and middle distillates yield yield 26.6% 27.0% 27.9% Middle distillates k tons 2,095 7,742 7,558 yield 52.6% 50.4% 51.0% Fuel oil & others k tons 198 1,077 755 Low fuel oil yield Yield 5.0% 7.0% 5.1% TAR k tons 323 1,085 1,141 yield 8.1% 7.1% 7.7% Balance to 100% are Consumption & Losses 4 March 2019 Saras SpA 9
Segment Review: Refining – Fixed & Variable costs Q4/18 2017 2018 Refinery RUNS Million barrels 26.5 102.6 98.6 Exchange rate 1.14 1.13 1.18 EUR/USD Fixed costs EUR million 55.8 259.0 257.5 2.4 2.9 3.1 $/bl Variable costs 58.8 175.6 195.4 EUR million 2.5 1.9 2.3 $/bl 4 March 2019 Saras SpA 10
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