OMV Capital Markets Day: Strategy 2030 delivers financial strength and enables responsible transformation

• Integrated business model continues to deliver strong operating earnings, cash flow and attractive dividends
• 2030 Targets Increased: Clean CCS Operating Result EUR ≥6.5 bn and Cash Flow from Operating Activities  EUR ≥7.5 bn
• Capital allocation priorities confirmed: Organic CAPEX  EUR 3.8 bn per year, thereof 40-50 percent in sustainable projects; Progressive dividend policy with clear framework for special dividends
• Financial strength to lay foundation for driving OMV’s responsible transformation and enabling energy transition
• OMV remains committed to becoming a net-zero company by 2050 in Scopes 1, 2, 3
• Focus on becoming an integrated sustainable chemicals, fuels and energy company
• OMV Petrom to develop into an energy transition leader in Romania and SEE
• Chemicals: Broaden global footprint based on innovation and technologies and advance circular economy solutions
• Fuels & Feedstock: Become leading European producer of renewable fuels and chemical feedstock
• Energy: Focus on becoming a Europe-centric player and build a strong geothermal business

At its Capital Markets Day in London, OMV today announced a progress update of its Strategy 2030, including recent achievements, financial targets and project roadmaps. The integrated chemicals, fuels and energy company continues on its path to become net-zero by 2050.

Since its launch in March 2022, OMV Group’s Strategy 2030 has delivered key transformation milestones in all three business segments. Notably, it included Borealis starting up its world-scale polyolefins plant in the US, doubling its mechanical recycling capacities and successfully divesting its fertilizer business. In addition, the ultra-fast charging network grew rapidly in the European retail business, while the initial production and sales volume of Sustainable Aviation Fuel (SAF) increased and will be further supported by new production capacities in Romania. OMV diversified its supply of non-Russian gas and is divesting its Malaysian Exploration and Production (E&P) assets, while OMV Petrom successfully made its final investment decision on Neptun Deep and has significantly advanced the natural gas project in Romania. 

These strategic highlights have been achieved against the backdrop of geopolitical uncertainty, a chemicals market downcycle, high inflationary pressure and volatile commodity prices. OMV has been able to deliver resilient results under atypical market conditions. In the last five years, clean CCS Operating Result has achieved a compound annual growth rate (CAGR) of 14.2 percent, while cash flow from operating activities including net working capital effects had a CAGR of 8.9 percent. Furthermore, OMV’s total dividends per share recorded a CAGR of 30 percent since 2019.

In terms of greenhouse gas (GHG) emissions, OMV has achieved a 25 percent reduction compared to the 2019 baseline in Scope 1 and 2 and a 10 percent reduction in Scope 3. In methane intensity, as well as flaring and venting, the company has already achieved a reduction of over 70 percent compared to 2019. These developments are driven by overall improved energy and operational efficiency and a significant decrease in routine flaring and venting. The improvement in Scope 3 was led primarily by higher petrochemicals production and lower fossil fuel sales. 

Alfred Stern, Chairman of the Executive Board and CEO of OMV AG: “Drawing upon the strength of our integrated business model, the OMV Group has demonstrated the ability to deliver on our strategic goals in these extraordinary times. We are advancing the biggest transformation in the company’s history with a continued focus on our financial strength, while enabling more sustainable living in the national and international markets we operate in. We will stay agile in the face of the evolving macro-economic environment and move steadfastly ahead with Strategy 2030. Our key priorities will be on maximizing cash generation from our current core activities, growing our chemicals business, transforming OMV Petrom into an energy transition leader in Southeastern Europe (SEE), and firmly establishing OMV as a frontrunner in geothermal energy, SAF and circular chemicals.”

Financial targets with focus on value creation and shareholder returns

Toward 2030, OMV increases its targeted clean CCS Operating Result to greater than or equal to EUR 6.5 billion, compared to EUR 6 billion previously. In addition, the targeted cash flow from operating activities amounts to greater than or equal to EUR 7.5 billion, compared to EUR 7 billion previously. These increases reflect a more favorable market environment for brent oil, natural gas, and refining margins. Cash flow generation will be supported by a comprehensive efficiency program in the context of increasing inflationary pressure. It will deliver at least EUR 500 million by the end of 2027.

OMV is also targeting clean CCS earnings per share (EPS) of about EUR 10 by 2030, of which roughly 50 percent will come from the Chemicals segment, 20 percent from Fuels & Feedstock and 30 percent from Energy.
The company’s capital allocation priorities have been confirmed, including annual organic CAPEX of about EUR 3.8 billion, of which 40-50 percent will be allocated for sustainable projects. With regards to shareholder distributions, OMV aims to increase ordinary dividends every year or at least to maintain the level of the respective previous year. Special dividends will be awarded additionally if the leverage ratio is less than 30 percent. The dividend policy specifies that together with the progressive ordinary dividend, the total dividend amounts to about 20-30 percent of cash flow from operating activities .

The company’s financial strength, coupled with its stringent cost discipline, enables further growth and value creation. At the same time, OMV plans to maintain an investment grade credit rating and a mid- to long-term target leverage ratio of below 30 percent. At the end of the first quarter 2024, net debt amounted to EUR 1.2 billion and the leverage ratio stood at 4 percent.

OMV reaffirms its target of 30 percent reduction of absolute GHG emissions in Scope 1 and 2 and a 20 percent reduction in Scope 3 by 2030 in comparison to 2019. 
 

Chemicals: Broaden global footprint based on innovation and technologies and advance circular economy solutions

OMV’s Chemicals business has positioned itself as a leading player in the European base chemicals (olefins) market and the global polyolefins market through Borealis and its strong partners in the US and Middle East. It has a strong focus on value-added specialty products, which have significant growth potential and have proven to be resilient also in chemicals downcycles. Overall, polyolefin demand for the virgin and recycled product continues to show strong growth rates, with a CAGR of 4.2 percent forecast for 2023-2030.

Last autumn, Borealis started up its Borstar®-technology polyethylene plant at its Baystar 50:50 joint venture with TotalEnergies in the US. In 2025, Borealis plans to start up its Propane Dehydrogenation (PDH) plant in Kallo, Belgium and the Borouge 4 polyolefin complex with ADNOC in the UAE, in which it has a 40 percent shareholding. The first two projects are expected to have a combined EBITDA contribution of about EUR 700-800 million in the mid-term, while Borouge 4 is expected to have revenues of USD 1.5-1.9 billion per year after full-production ramp-up.

In addition, OMV sees strong growth potential in the specialty products segment for polyolefins, based on its long-standing innovation and technology capabilities. Specialty sales volumes are expected to grow by more than 30 percent to more than 2 million tons in 2030, driven by demand in the sectors of energy (e.g., insulation for high-voltage cables), mobility (e.g., lighter weighting of cars in interior and exterior and under the bonnet applications), infrastructure (e.g., durable piping), as well as healthcare (e.g., IV bags or medical packaging).

Sales of sustainable base chemicals and polyolefins are expected to grow up to 1.4 million tons per year by 2030, driven mainly by mechanical and chemical recycling projects including ReOil® to process end-of-life plastic. Feedstock supply contracts of plastic waste from Interzero and Tomra have been recently secured, ensuring the circular economy will continue to play a key role in OMV’s transformation path and along its entire value chain. OMV will also process renewable feedstock into sustainable base chemicals, leveraging its integration with the refining operations.
 

Fuels & Feedstock: Become leading European producer of renewable fuels and chemical feedstock

OMV’s Fuels & Feedstock has the strategic ambition to become a leading innovative producer of renewable fuels and chemical feedstock with a strong anchor in Europe through its three refineries. The strategy builds on the strong integrated business model of the Group. Key pillars are further increasing the integration with Chemicals through the steam crackers embedded in refineries and optimizing the integrated fuels supply chain by leveraging the strong presence in wholesale and retail markets. This strategy supports customers in the energy transition as demand for renewable fuels grows. The fossil crude oil throughput in refining is expected to gradually reduce with shrinking demand for transportation fuels. The European refining indicator margin is expected at 6-7 USD/bbl (previously targeted 4.3 USD/bbl) for 2025-2030.

The company is targeting a production capacity of 1.5 million tons per year of renewable fuels and chemical feedstock by 2030, including the production of sustainable aviation fuel (SAF) and renewable diesel (HVO). The co-processing plant at the Schwechat refinery in Austria recently started up and will convert liquid biomass into renewable hydrogenated vegetable oil components already in 2024. Most of the remaining projects are expected to start up towards the end of the decade, including a SAF/HVO plant at the Petrobrazi refinery, Romania. 

The global renewable fuel market remains highly attractive and OMV has made notable progress in the last two years in growing its SAF customer portfolio through supply contracts to leading airlines and introduced its SAF certificate program to help companies decarbonize corporate air travel. Apart from Europe, OMV is currently exploring opportunities in North America, preferably through a local partnership, to gain a footprint in the market which currently shows strong demand also driven by regulatory programs. Middle East and Asia are other possible locations to manufacture SAF. 

OMV aims to be the sustainable mobility partner of choice for retail customers through its network of around 1,700 filling stations in Central and Eastern Europe, of which roughly 60 percent are in Austria and Romania. Alongside growing fuel demand in Southeastern Europe, OMV is installing some 5,000 fast and ultra-fast charging points at its network for cars and heavy-duty vehicles under the eMotion brand. Furthermore, there are strong growth opportunities in non-fuel business, also through expanding partnerships with convenience retailers. 
 

Energy: Focus on becoming a Europe-centric player and build a strong geothermal business 

OMV’s Energy strategy is built on becoming a Europe-centric player and developing its Low Carbon Business (LCB), while the traditional E&P portfolio will be actively managed to deliver resilient cash flow. For 2025-2030, Brent Oil is expected to be at an average of about 80 USD/bbl (previously expected 70 USD/bbl) and THE gas price at 25-30 EUR/MWh (previously expected 24 EUR/MWh).

OMV is maintaining its target of a total production of about 350 kboe/d in 2030, with a higher gas weighting of 60 percent underlining the importance of this bridging fuel. OMV will refocus its portfolio on three regions: North representing Norway; Central Eastern Europe representing mature fields in Austria and Romania, as well as growth opportunities in the Black Sea; and South representing North Africa and the Mediterranean. 

One of the centerpieces of the Energy strategy is successfully delivering the Neptun Deep project in the Romanian Black Sea, the largest natural gas offshore project in the European Union (EU). OMV Petrom, which is approaching its 20th shareholding anniversary within the OMV Group this year, is the operator and holds a 50 percent share in the EUR 4 billion project. Currently, over 90 percent of the CAPEX has been contracted. The permitting process is ongoing, with drilling to begin in 2025 and the first gas expected in 2027.

Romania will also play a key role in OMV’s LCB strategy for renewable power. Romania is the sixth most populated country in the European Union, one of the fastest growing in terms of GDP, and has favorable sun and wind conditions. OMV Petrom, which already holds a strong position in the national power generation mix, will continue to invest in renewable power such as wind and photovoltaic supported by available EU funding. OMV will also target renewable opportunities in neighboring Serbia, Bulgaria and Hungary.

Geothermal is another key pillar of OMV’s LCB strategy due to decades of experience in its traditional business of exploration and drilling.  For example, OMV and its partners will supply decarbonized and clean heating energy to cities’ district heating networks, as well as large infrastructure operators (e.g. airports) and industrial plants. The primary geographical focus is Germany and Austria due to the current regulatory environment and a strong existing presence. 

About OMV

At OMV, we are re-inventing essentials for sustainable living. OMV is transitioning to become an integrated sustainable chemicals, fuels and energy company with a focus on circular economy solutions. By gradually switching over to low-carbon businesses, OMV is striving to achieve net zero by latest 2050. The company achieved revenues of EUR 39 billion in 2023 with a diverse and talented workforce of around 20,600 employees worldwide. OMV shares are traded on the Vienna Stock Exchange (OMV) and as American Depository Receipts (OMVKY) in the U.S. Further information at www.omv.com