GROUP STRATEGY Philippe Sauquet, Directeur Strategy-Innovation Assemblée Générale de l'atee, le 15 juin 2017
Our challenges for the next 20 years Meeting the energy needs of a burgeoning world population Integrating climate change into our strategy Anticipating and meeting changes in customer expectations and their relationship with energy Source: IEA CO2 emissions from fuel combustion 2016 STI - GROUP STRATEGY May 2017 2
Our ambition: to become the responsible energy major Produce, process and supply affordable energy while meeting the highest HSE standards Supply a responsible energy mix consistent with the IEA s 2 C scenario Introduce solutions that promote responsible energy use by our customers Be recognized for our convenient, quality local service STI - GROUP STRATEGY May 2017 3
Group strategy: fundamentals Safety, a core value: targeting zero fatalities Building on our strengths: leveraging our integrated business model STI - GROUP STRATEGY May 2017 4
Group strategy integrating 2 C roadmap Strategy in line with anticipated market trends: Focusing on low breakeven Oil projects Expanding along the Gas value chain Growing profitable low carbon business Gradually decreasing the carbon intensity of our production mix STI - GROUP STRATEGY May 2017 5
Tackling short term challenges Safety, our core value (Mbd) 100 99 98 97 96 95 94 93 92 91 90 Sources : IEA, TOTAL World oil supply & demand (Mbd) Supply Demand Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Delivery Project execution to deliver an average production growth of +5% per year 2014-2020 Cost discipline Saving 4 G$ Opex by 2018 Sustainable Capex level: 15-17 G$/y (2017-2020) Cash Increase cash flow from operations: Downstream: aiming for sustainable contribution of 7 G$/year. Upstream: adding >7 G$ from new start-ups in 2020. Focusing on cash generation Operational excellence and project delivery STI - GROUP STRATEGY May 2017 6
Exploration & Production Strategy and business objectives Affordable: Upgrade portfolio: relentlessly reduce Opex, limit FID to 1st and 2nd quartile assets, fix or divest 4th quartile assets. Invest with discipline: be selective, develop good enough designs, focus on cash and lower capital employed, deliver projects on time and within budgets. Reliable: Grow production at market pace: renew reserves, build on technological and geographical strengths, develop new areas. Extract maximum value from assets: raise production efficiency, maximize recovery, leverage technical expertise. Clean: Lower environmental footprint: reduce emissions, improve energy efficiency, integrate a CO2 price in project sanctions, install renewables on sites. Promote energy with low carbon emissions: be a leader in the fast growing gas markets, get proactive access to gas resources, develop CCUS. E&P resilient and profitable in a volatile environment STI - GROUP STRATEGY May 2017 7
Gas, Renewables & Power Strategy and business objectives Develop Downstream Integration in Gas value chain: Open up new LNG markets Broaden Gas and Electricity B2B/B2C portfolio Develop Integration in Solar chain: SunPower: Upstream + North America Downstream / Distributed Generation Total Solar: Solar farms + Africa/Asia Distributed Generation Develop Energy Storage: Saft profitable specialties Energy Storage Solutions (ESS) Make Customers the Core Focus of our Activities: Anticipate customer needs and design new packaged commercial offers Energy efficiency as a service Open innovation through Total Energy Ventures (TEV) Develop profitable low carbon businesses 1 G$ CFFO by 2020 STI - GROUP STRATEGY May 2017 8
SAFT S POSITION IN THE BATTERY MARKET INDUSTRY Standard industrial applications 80% lead-acid CONSUMER High volumes Alkaline Lithium-ion Carbon-zinc AUTOMOTIVE High volumes 80% lead-acid Lithium-ion emerging SAFT PRESENCE IN INDUSTRY & MOBILITY Worldwide market $125bn High performance and customized applications Nickel-cadmium Lithium Lithium-ion Silver A Group with recognised expertise ~100 YEARS OF HISTORY LEADERSHIP POSITION ON 75-80% OF REVENUE BASE REVENUE OF 738 MILLION IN 2016 High-tech storage in a variety of sectors (% OF 2016 REVENUES) Civil Electronics : 36% Transportation, Telecom & Grid : 32% Industrial Stand-by : 21% Space & Defense : 11% Saft: energy storage is key to growing a profitable renewables business 9
ENERGY EFFICIENCY SOLUTIONS FOR OPTIMISING ENERGY USAGE Innovative and tailored solutions Consulting in energy performance Allow industrial and tertiary-sector clients to improve productivity Average reduction of 2 to 15% in energy consumption Energy bill savings of up to 30%. 10
Refining & Chemicals Strategy and business objectives Industrial competitiveness: Optimize our production base (availability, energy efficiency, costs). Focus our investments on our major integrated platforms. Expansion in petrochemicals: Leverage cost-advantaged feedstock. Target high-growth markets (Asia, US). Innovation in low carbon: Drive Bio-based solutions (biofuels, polymers) Promote energy efficiency of our customers (lightweight materials). A safe, innovative and efficient R&C Redeploying towards growing markets STI - GROUP STRATEGY May 2017 11
Marketing & Services Strategy and business objectives Profitable growth Differentiate through customer proximity and by promoting responsible energy consumption. Retail: continuing the transformation of our stations into One Stop Shops community hubs at the service of mobility and transport, consolidating our positions in Western Europe (E5) and Africa. Lubricants: 5% market share, World #3 in 2021 B2B (fuels and specialties): becoming the reference proximity partner Being a brand of choice, close to and creating value for each and every customer. Delivering more than 2G$ CFFO STI - GROUP STRATEGY May 2017 12
CONCLUSION: THE RESPONSIBLE ENERGY MAJOR COMMITTED TO BETTER ENERGY Total is the world s 4 th -ranked international oil and gas company * and a global leader in solar energy through our affiliates SunPower and Total Solar. WITH OPERATIONS IN MORE THAN 130 COUNTRIES we have 98,000 employees who are COMMITTED TO BETTER ENERGY To providing affordable, reliable, clean energy * Based on market capitalization in U.S. dollars at December 31, 2016 Total in Brief 2017 13
STI - GROUP STRATEGY May 2017 14
APPENDICES STI - GROUP STRATEGY May 2017 15
Demand in the New Policies scenario New Policies Scenario mboed 350 300 280 341 Solar, Wind Modern Bio. Demand growth sustained at +1.1% CAGR until 2035 250 200 150 100 50 0 80 60 87 94 78 82 2016 1 2035 2 Trad. Bio Hydro Nuclear Gas Oil Coal Fossil fuels demand up by +31 Mboe/d, accounting for 50% of energy growth Rise of global temperature expected to be 3.5 C (source: IEA, World Energy Outlook, 2016) STI - GROUP STRATEGY May 2017 16
Creating an Energy Mix that Meets the 2 C Target 2 C Scenario mboed 300 250 200 150 100 50 0 293 280 60 66 87 72 78 47 2016 1 2035 2 Solar, Wind Modern Bio. Trad. Bio Hydro Nuclear Gas Oil Coal Renewables soar from 15% to 27% by 2035, in particular «new renewables» (solar, wind ), from 2% to >9% for Demand growth limited to +0.3% CAGR until 2035 Fossil energy mix changing Coal down from 28% in 2016 to 16% in 2035 Oil decreasing from 31% to 25% Gas increasing from 21% to 23% (source: IEA, World Energy Outlook, 2016) STI - GROUP STRATEGY May 2017 17
Gas and Renewables are Key for Power Generation 2 C Scenario mboed 120 100 105 115 4 23 Solar, Wind Bio. Coal down from 46% in 2016 to 17% by 2035 80 14 Hydro Gas to remain around 20% 60 40 20 24 48 28 23 Nuclear Gas Oil New renewables (solar, wind ) increase over the same periode from 4% to 20% 0 19 2016 1 2035 2 Coal (source: IEA, World Energy Outlook, 2016) STI - GROUP STRATEGY May 2017 18
Integration of climate into our strategy leading to business objectives Improving the Carbon Intensity of Our Production Mix ~60 % gas in our hydrocarbon production mix in 20 years time Developing Renewable Energies 20 % low-carbon businesses in 20 years' time Improving Energy Efficiency Promote responsible energy use in our operations and by our customers STI - GROUP STRATEGY May 2017 19