Cepsa posts 48% increase in 9-month EBITDA to €1,346 million, in line with the performance of previous quarters

Thursday, November 4, 2021

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9M September 2021 – Significant improvement vs 2020 as recovery continues

In the first nine months of 2021, Cepsa achieved a strong performance thanks to continued management focus on efficiencies, operational excellence and an improved market environment. This is despite the challenges of increasing energy costs and demand that remains below pre-pandemic levels.

EBITDA was €1,346 million up to September 2021, a 48% increase on the same period of 2020 (€910 million), boosted by higher crude prices and increased production in Upstream, improved margins and higher production in Refining plus a sustained strong performance in both Commercial and Chemicals.

Cepsa continues to advance in its holistic Multi-year Efficiency Program (MEP), a 3-year plan aimed at improving Gross Margin and capturing sustainable operating costs savings. As of September 2021, €295 million of EBITDA improvement has already been delivered, in addition to the €73 million achieved in 2020 as part of the Contingency Plan.

Results by Business Unit:

In Upstream, Cepsa reported a significant improvement in results, with EBITDA at €615 million for the nine months ending September 2021, up 83% vs the same period of 2020. The improved YoY performance was mainly due to higher crude prices (+66%), lower production costs, with Opex (as measured in $/bbl) decreasing 11% YoY, and a slight increase in production (+1%).
In Refining, despite margins strongly impacted by the increase in energy costs, increased production at refineries and successful implementation of cost efficiency measures translated into an EBITDA of €117 million for the nine months ended September 2021 vs €34 million in the same period of 2020 (+240%).
Despite sales volumes around 15% below pre-pandemic levels, Commercial EBITDA continued to improve to €345 million in the nine months ended September 2021. This is a 12% increase compared to the same period of 2020 due to a sustained margin performance and rigorous cost efficiency focus.
Chemicals continued to deliver very solid results with EBITDA of €355 million for the nine months ended September 2021 which is a 35% increase compared to the same period of 2020 (and +91% vs the same period of 2019). The improvement was mainly driven by the positive impact of an enhanced commercial strategy, plus a sustained trend of record operational performance since 2019. During the quarter, Cepsa’s Chemicals business achieved a significant milestone with the production of the first volumes of LAB from vegetable oils.

CCS Net Income during the nine months ending September 2021 was €295 million, a significant improvement vs the €31 million registered for the same period of 2020. IFRS Net Income was €498 million, positively affected by the increase in commodity prices and materially above the net loss of €810 million registered in the same period of 2020, which was affected by asset impairments, lower prices and subdued demand.

Cepsa continued to optimize capex, with investments for the nine months ended September 2021 of €310 million, compared to €464 million during the same period of 2020.

Free cash flow before working capital up to September showed a significant improvement, from €55 million in 2020 to €918 million in 2021, mainly due to improved results.

CEO appointment

On October 15th, Cepsa announced the appointment of Maarten Wetselaar as CEO of the company, effective 1st January 2022. Current CEO Philippe Boisseau will remain with the Company after his handover, as an advisor to Maarten and the Board.

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"We have achieved a strong performance YTD and prospects are good for the remainder of 2021, despite the recent volatility in global energy markets and the increase in European natural gas prices. The solid 2021 performance is thanks to management-led initiatives put in place since the onset of the Covid-19 crisis and continued focus on efficiencies, both in costs and investments. These results provide a strong foundation to implement our green energy transition plan.

During 2021 we have achieved significant progress in building a new organization and preparing and reorienting the business to take full advantage of the opportunities that the energy transition has to offer. In addition, we have put in place an ambitious optimization plan, which is on track and already delivering very solid results, with approximately €300 million of positive EBITDA impact achieved in the first nine months of the year."

Philippe Boisseau, Cepsa CEO

For further information on Q3 2021 results, please refer to the Quarterly Report available at www.cepsa.com/en/investors

Cepsa posts 48% increase in 9-month EBITDA to €1,346 million, in line with the performance of previous quarters

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