Regulatory News:
Patrick Pouyanné, Chairman and CEO, Jean-Pierre Sbraire, CFO,
and Helle Kristoffersen, President, Strategy - Innovation, will
present Total’s (Paris:FP) (LSE:TTA) (NYSE:TOT) Strategy &
Outlook in New York today. The webcast of the presentation in
English is available on total.com.
The presentation confirms Total’s implementation of its strategy
for profitable and sustainable growth for the benefit of all of its
stakeholders, taking into account the evolution of energy markets.
It also provide strong visibility on the Group’s roadmap to
2025.
Key messages of the presentation include:
Coping with volatile and changing energy markets
Total is adapting to changing energy markets to ensure a
sustainable future. Energy demand growth will benefit mainly gas
and electricity, and, within these markets, LNG and renewables will
grow the fastest.
Maintaining the Group’s breakeven below 30 $/b and strong
financial position to ensure a sustainable future
In face of volatile energy markets, Total focuses on operational
excellence and financial discipline to maintain a low breakeven and
strong balance sheet. In recent years, Total has successfully
reduced its organic pre-dividend breakeven to less than 30 $/b and
confirms its key objective to maintain it below this level to be
resilient in any price environment. Discipline on costs will be
maintained, illustrated by the additional $1 billion cost reduction
program until 2023 notably supported by a strong digital ambition.
A strong balance sheet with a gearing maintained below 20% further
strengthens the resilience of the Group.
Oil & Gas: building on our strengths for sustainable and
profitable growth
Total benefits from a large portfolio of profitable projects to
fuel its future growth post 2023 and is sanctioning more than 800
kboe/d of new production, leveraging a favorable oil service cost
environment. Renewing reserves is based on two engines: exploration
with recent discoveries in North Sea, South Africa and Guyana and
access to discovered resources.Total has also demonstrated its
agility by making counter-cyclical acquisitions that have
significantly high-graded the portfolio. Over 2015-2020, more than
11 Bboe of resources will have been added at less than 2.5 $/boe.
The acquisition of Anadarko’s African assets fits perfectly into
the strategy and improves visibility on the Group’s future.
Downstream will make significant additional contributions to cash
flow. Refining-Chemicals is focusing on growing petrochemicals
using low cost feedstock on integrated platforms and Marketing
& Services is expanding in large fast growing markets. Both
segments also invest in new businesses linked to the development of
low carbon economy (biofuels, bioplastics, plastic recycling, EV
charging points, natural gas for trucks and shipping…).
Investing in growing energy markets for sustainable long
term.
The energy transition leads to a growing role for both natural
gas (mainly LNG) and electricity in the energy mix. Total will
increase its LNG sales to 50 Mt per year by 2025, supporting CFFO
growth in integrated LNG of 2.5 times between 2018 and 2025. In low
carbon electricity, Total will invest $1.5-2 billion per year,
notably in Europe, as a power producer from renewables and natural
gas and distributor, targeting 8 million customers by 2025. Beyond
Europe, Total is leveraging strong electricity demand by investing
in renewables generation using a capital light model to ensure more
than 15% equity IRR. This strategy for LNG and electricity
contributes to the Group’s ambition to reduce the carbon intensity
of the energy products used by our customers by 15% between 2015
and 2030.
Outlook 2025 & Shareholder return
Total will generate production growth of more than 5% per year
growth between 2018 and 2021, then after a stable period between
2022-23, growth will resume at more than 3% per year driven mainly
by LNG project start-ups. Such growth will be delivered while
capital discipline will be maintained with $16-18 billion per year
capital investment over 2019 to 2023. The Group’s cash flow will
increase by more than $5 billion by 2025 in a 60 $/b environment,
an average increase of around $1 billion per year. Total targets a
ROE of 12%.
As a result of this strong outlook, the Board of Directors
decided to accelerate dividend growth for the coming years with a
guidance of increasing the dividend by 5 to 6% per year. As a
result, the proposed amount for the third interim dividend for 2019
will be 0.68€ per share, an increase of 6% compared to the third
interim dividend for 2018.
These decisions reflect the Board’s confidence in the ability of
the Group to deliver sustainable and profitable growth for the
coming years.
****
Following the Strategy & Outlook presentation, there will be
a series of Business Unit Presentations made by members of the
Executive Committee and another Senior Executive:
Developing a global and profitable LNG portfolio
Philippe Sauquet, President Gas, Renewables & Power
Arnaud Breuillac, President Exploration & Production
Laurent Vivier, Senior Vice President Gas
Sustainably growing Downstream
Bernard Pinatel, President Refining & Chemicals
Momar Nguer, President Marketing & Services
About Total
Total is a major energy player, which produces and markets
fuels, natural gas and low-carbon electricity. Our 100,000
employees are committed to better energy that is safer, more
affordable, cleaner and accessible to as many people as possible.
Active in more than 130 countries, our ambition is to become the
responsible energy major.
* * *
Cautionary note
This press release, from which no legal consequences may be
drawn, is for information purposes only. The entities in which
TOTAL S.A. directly or indirectly owns investments are separate
legal entities. TOTAL S.A. has no liability for their acts or
omissions. In this document, the terms “Total” and “Total Group”
are sometimes used for convenience where general references are
made to TOTAL S.A. and/or its subsidiaries. Likewise, the words
“we”, “us” and “our” may also be used to refer to subsidiaries in
general or to those who work for them.
This document may contain forward-looking information and
statements that are based on a number of economic data and
assumptions made in a given economic, competitive and regulatory
environment. They may prove to be inaccurate in the future and are
subject to a number of risk factors. Neither TOTAL S.A. nor any of
its subsidiaries assumes any obligation to update publicly any
forward-looking information or statement, objectives or trends
contained in this document whether as a result of new information,
future events or otherwise.
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