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SECOND QUARTER 2013 RESULTS7 AUGUST 2013
LUCA BETTONTE, CEO
2
DISCLAIMER
This document contains certain forward-looking information that is subject to a number of factors that may influence the accuracy of the statements and the projections upon which the statements are based.There can be non assurance that the projections or forecasts will ultimately prove to be accurate; accordingly, the Company makes no representation or warranty as to the accuracy of such information or the likelihood that the Company will perform as projected.
3
AGENDA
2Q 2013 Highlights✓ Key Figures✓ Recent Developments in Renewables
Results Review✓ Business Environment✓ 2Q 2013 Group EBITDA✓ Results by Segments
Key Financials✓ Profit & Loss✓ Investments ✓ Cash Flow Statement
2013 Guidance and ConclusionsAppendix
4
RC Ebitda Adj (€mn)
HIGHLIGHTS: KEY FIGURES
27%
43%
Leverage
RC Net Profit (€ mn)
Strong Renewables and Power, weak R&M
POWER & GAS
RENEWABLES
REFINING & MARKETING
CORPORATE
722
1,462
030/06/2013
DERIVATIVESNFP EXCL. DERIVATIVES1,298
(1) Adjusted Net Financial Position does not include NFP of ISAB Srl
164
638
84
31/12/2012
(1)
205
293
0
159
73
(14)(14)
322(8)
1H 20122Q 2013
1H 2013 2Q 2012
94120
175
150
(16)(16)
6785
58
(14)(9)
1H 20122Q 2013
(9)
0
25
(10)
(2)
1H 2013 2Q 2012
Highlights
5
FURTHER EXPANSION IN EASTERN EUROPE
• On June 20, 2013 LUKERG Renew has signed an agreement with Vestas to purchase Gebeleisis wind farm (70MW), fully operational since February 2013
• EV of €109.2mn (€1.56mn/MW)
• Producibility: 2,300heq
• Closing took place on June 28, 2013
Romania
• On June 20, 2013 LUKERG Renew has signed an agreement with Vestas to purchase Hrabrovo wind farm (14MW), fully operational since March 2012
• EV of €17.6mn (€1.26mn/MW)
• Producibility: 2,400heq
• Located near Tcherga wind farm but with no grid limitations
• Closing expected in 3Q 2013, after the Antitrust approval
Bulgaria
• Securing targeted growth in Eastern Europe (+100MW in 2013-15 Business Plan)
• Boosting geographical diversification: 20% of installed capacity will be abroad
• Strengthening ERG Renew partnership with Vestas
ERG Renew strategy
Highlights
6
INTEGRATION IN THE O&M ACTIVITIES
• On July 26, 2013 ERG reached an agreement with Maluni to acquire a 100% stake in a Newco responsible for O&M at ERG Wind’s Italian wind farms
• EV of €10mn
• 136 workforce highly specialized in the O&M of wind farms
• Closing to take place in 4Q 2013 after clearance from ERG Wind’s Lenders
• Further acquisition of technical skills to manage wind farms in an integrated way
• Margin internalization in excess of €5mn per year, boosting profitability at ERG Wind
• Possibility to expand O&M activities to ERG Renew wind parks in Italy and abroad under study, with a high potential of further costs optimization
Strategic rationale
Highlights
Deal description
7
RESULTS REVIEW
FINANCE DIRECTOR
PAOLO MERLI
8
BUSINESS ENVIRONMENT
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
ITALIAN PRICE ZONAL PRICE SICILY CIP6
Electricity Prices (€/Mwh)
118115
9086
73
57
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
EMC Margin ($/bbl)
0.99
(1.04)
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
Industry Retail Fuels Volumes (M tons)
6.09
5.70
Results Review
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
Renewables: Electricity Prices (€/Mwh)
150148
8990
96 96
(1) Italian price is theoretical price based on National Average Electricity Price (PUN) + GC
FRANCE ITALY BULGARIA GERMANY(1)
95 94
9
1,292
2Q 2012
0
94
26
(16)18(1)
Power & GasRenewables Refining & Marketing Corporate 2Q 2013
120
2Q 2013 GROUP EBITDA
Ebitda growth driven by Renewables and Power
Results Review
10
RC Ebitda (€ mn)
RENEWABLES RESULTS
76
32
1,400
291
Volumes (Gwh)
Strong growth mainly driven by ERG Wind
73
32
2
139
0
0
Results Review
2Q 20121H 2012
4
30
(1) Bulgaria: ERG ‘s stake = 50%
655
69
4
ITALY FRANCEBULGARIA(1)GERMANY
3161
ERG Wind
29
700ERG Wind
2Q 2013
590
12
630
27
1H 2013
568
1,231
261516
286ERG Wind
2Q 2012
1H 2012
2Q 2013
1H 2013
150
58
30 54
2
0.6 22
ERG Wind
78
11
RC Ebitda (€ mn)
POWER RESULTS
Volumes (Gwh)
Strong figures in Power
Results Review
46 53
14 28
113
122
53
57
ERG POWERISAB ENERGY
159
85
0
1H 2012
2Q 2012
1H 2013
2Q 2013
175
67
3,397
1H 2012
2Q 20120
3,423
1,595 1,630
1H 2013
2Q 2013
1,978
1,419
2,109
1,314943
652
1,037
592
8
3 7
2
23
21
21
13
12
RC Ebitda (€ mn)
MARKETING RESULTS
1Q 2013
EOS TOTALERG
Market Share (%)
Still tough environment
2Q 2012 3Q 2012 4Q 2012
10.9%11.4%
1.1%0.9%
Results Review
RC Ebitda (€ mn)
24
31
0
2Q 2013
EOSTOTALERG
1H 20122Q 20121H 2013
2Q 2013
15
28
13
RC Ebitda (€ mn)
REFINING RESULTS: COASTAL AND INLAND
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
Margins ($/bbl)
0.65
1.24
(2.91)
(0.15)
Volumes(2) (k tons)
Worsened and still negative Refining(1) Inland Refining EBITDA includes Logistics(2) Volumes relate to 100% of TOTALERG stake in Rome (100%) and Sarpom (24%)
Results Review
EMC MARGIN
COASTAL REFINING MARGIN
INLAND REFINING MARGIN
(1.04)
0.99
2,316
670 1,166328
2,654
1,0281,406
555
4,970
1,698
1H 2012 1H 20130
2Q 2012 2Q 2013
2,572
883
INLAND REFININGCOASTAL REFINING
(45)
(39)
1H 20122Q 2012
(12)
(27)
(12)
(14)
01H 20132Q 2013
(9)
(36)
(8)
(21)
(26)
(29)
(1)
14
KEY FINANCIALS
15
PRO-FORMA REPLACEMENT COST P&L
Note: figures based on NO GAAP measures
Key Financials
1H 2013 1H 2012 Euro millions 2Q 2013 2Q 2012
293 205 RC Adjusted EBITDA 120 94
(143) (123) Amortization and depreciation (73) (62)
150 82 RC Adjusted EBIT 47 32
(47) (36) Net financial income (expenses) (23) (20)
3 1 Net income (loss) from equity investments 2 (0)
106 47 RC Results before taxes 27 12
(55) (32) Income taxes (17) (11)
52 14 RC Results for the period 10 1
(27) (24) Minority interests (12) (11)
25 (9) RC Net profit (2) (10)
16
ADJUSTED INVESTMENTS
(1) Renewables adjusted for LUKERG Renew (50%). (2) R&M adjusted for TOTALERG (51%) and for ISAB Srl (40% from January to August 2012).(3) It includes investment for the acquisition of Tcherga (ca. €26mn)(4) It includes investment for the acquisition of Gebeleisis (ca. €55mn)
Key Financials
CORPORATEREFINING & MARKETINGRENEWABLESPOWER & GAS
(2)(1)
2517
15 11
4975
40
64
11
10
5
6 CORPORATEREFINING & MARKETINGRENEWABLESPOWER & GAS86
60
1H 20122Q 2012
(€ mn)
0
1H 20132Q 2013
102
82
1 1 0.3 0.4
(3)
(3)
(4)
(4)
(11)
17
1,510
47%
43%
39%
Adj. Net Debt
31/03/2013
Cash Flowfrom operation
WorkingCapital CAPEX Financial
Charges
Adj. Net Debt
30/06/2013
NFP 51% TotalErg and
50% LUKERG Renew
Net Debt30/06/2013reported
Leverage
2Q 2013 ADJUSTED CASH FLOW STATEMENT
55 (229)
0
Taxesand Other
(448)
Key Financials
DividendsERG Wind
Price Adjustment
(100)
1,7991,799
27 2361
Gebeleisis Acquisition
1,462
1,233
57
18
2013 GUIDANCE AND CONCLUSIONS
CEO
LUCA BETTONTE
19
293
>500
1H 2013
2013 GUIDANCE AND CONCLUSIONS
2013 FCST
102
2013 FCST(2)
1H 2013 2013 FCST(3)
LIQUIDITY PF OTHER AT MLT
1,462 ≈1,300
EBITDA:
CAPEX:
NFP:
Strong growth consistent with new business model
RENEWABLES CORPORATER&MP&G
0
0
0
✓Economic guidance confirmed after 1H results
✓Renewables & Power to contribute in excess of 90%
✓R&M expected to remain weak
✓FY Capex guidance adjusted to take into account Gebeleisis
acquisition
✓For 6M focus will be in Renewables: advancement in Romania
and in Palazzo San Gervasio wind farm construction
✓Guidance confirmed
1H 2013(1)
≈220
(1) It does not include 20% ISAB investments (ca. €15mn); it includes €55mn for Gebeleisis wind farm acquisition in Romania (2) It includes M&A investments in Renewables: €55mn for Gebeleisis in Romania, €9mn for Hrabrovo in Bulgaria and €10mn for ERG Wind O&M activities (3) It assumes put exercise on ISAB refinery within 31.12.2013
20
APPENDIX
21
1,292
1H 2012
0
205
7716 (2) (3)
Power & GasRenewables Refining & Marketing Corporate 1H 2013
293
1H 2013 GROUP EBITDA
Ebitda growth driven by Renewables and improvement in R&M
Appendix
22
1,510
27%
43%
39%
Adj. Net Debt
31/12/2012
Cash Flowfrom operation
WorkingCapital CAPEX Financial
Charges
Adj. Net Debt
30/06/2013
NFP 51% TotalErg and
50% LUKERG Renew
Net Debt30/06/2013reported
Leverage
1H 2013 ADJUSTED CASH FLOW STATEMENT
(229)
0
Taxesand Other
800
Dividends ERG Wind Acquisition
(252)
1,799
722
(10)47
68
Gebeleisis Acquisition
1,462
1,233
48
(15)55
Appendix
23
1H AND 2Q 2013 RESULTS
Appendix
1H 2013 1H 2012 Euro millions 2Q 2013 2Q 2012
4,763 6,627 Adjusted Revenues 2,469 3,050
293 205 RC EBITDA Adjusted 120 94
150 73 - Renewables 58 32
175 159 - Power & Gas 85 67
(16) (14) - Refining & Marketing (14) 2
(16) (14) - Corporate (9) (8)
24
1H 2013 1H 2012 2Q 2013 2Q 2012
1,232 552 Installed capacity (end-period, MW) 1,232 552
of which:
1,062 487 - Italy 1,062 487
64 64 - France 64 64
20 n.a. - Bulgaria(1) 20 n.a.
86 n.a. - Germany 86 n.a.
1,400 630 Electricity Production (GWh) 590 291
of which:
1,231 568 - Italy 516 261
65 61 - France 31 30
27 n.a. - Bulgaria(1) 12 n.a.
76 n.a. - Germany 32 n.a.
148 149 ERG Renew price - Italy (Eu/MWh) 144 145
58 72 Electricity price (Eu/MWh) 54 68
91 77 Green Certificates price (Eu/MWh) 91 77
150 73 RC EBITDA (Eu mn) 58 32
(63) (31) Depreciation (Eu mn) (32) (16)
87 42 RC EBIT (Eu mn) 26 16
RENEWABLES: KEY FIGURES
Appendix(1) Bulgaria: ERG ‘s stake = 50%
25
ISAB ENERGY: KEY FIGURES
Appendix
1H 2013 1H 2012 2Q 2013 2Q 2012
2,109 1,978 Sales (Gwh) 1,037 943
313 302 Sales (€ mn) 152 149
122 113 RC EBITDA (Eu mn) 57 53
97 89 RC EBIT (Eu mn) 45 41
92% 86% Net capacity utilization (%) 90% 81%
115 118 CIP6 tariffs (Eu/MWh) 115 118
79 65 EBITDA IT GAAP (Eu mn) 36 28
26
ERG POWER: KEY FIGURES
Appendix
1H 2013 1H 2012 Euro millions 2Q 2013 2Q 2012
1,314 1,419 Electricity Production (GWh) 592 652
53 46 RC EBITDA 28 14
(14) (13) Depreciation (7) (7)
39 33 RC EBIT 21 7
27
INTEGRATED DOWNSTREAM: KEY FIGURES(1)
Appendix
(1) Figures include 51% stake inTOTALERG and 100% EOS(2) Estimated market share referring to 100% of TOTALERG
1H 2013 1H 2012 Euro millions 2Q 2013 2Q 2012
12 23 Adjusted RC EBITDA 7 16
24 31 - Marketing 15 28
(12) (9) - Inland refining and logistics (8) (12)
(29) (31) Adjusted Depreciation (16) (15)
(18) (8) Adjusted RC EBIT (9) 1
17 15 Investments 11 9
11.3% 11.3% TOTALERG retail market share(2) 11.4% 10.9%
0.9% 1.1% EOS retail market share 0.9% 1.1%
28
COASTAL REFINING: KEY FIGURES(1)
Appendix
(1) Figures are adjusted for ERG’s stake in ISAB Srl (40% from January to August 2012, 20% afterwards)(2) Investments do not include 20% ISAB investments
1H 2013 1H 2012 Euro millions 2Q 2013 2Q 2012
11 44 Gross refining margin (1) 27
(27) (36) Adjusted RC EBITDA (21) (14)
(11) (22) Adjusted Depreciation (6) (11)
(39) (59) Adjusted RC EBIT (27) (26)
0 10 Investments(2) 0 6