October 02, 2024 15:45 GMT
ENERGY SECTOR: TotalEnergies Strat Update: Stronger Production And FCF Outlook
ENERGY SECTOR
A3[P]/A- EUR Spreads Muted
Production outlook higher and for a longer period. Net investment guidance unchanged while the FCF outlook looks stronger. Payout policy unchanged; buybacks maintained for FY25 as the market was likely expecting.
- Oil & Gas production will grow ~3% annually until 2030 with >3% growth in 2024 and 2025 (the 2023 strategy update guided for 2-3% growth over the next five years)
- TotalEnergies projects 4% annual growth in energy production from 2024 to 2030.
- FCF growth is seen at USD +10bn by 2030 (versus 2024 at same price deck; current FY24 guidance is for USD >2.5bn). The 2023 update had guided for USD 4bn by 2028 (from USD 2bn in 2023).
- Net investments of USD 16-18bn/year from 2025-30 (current FY24 guidance is USD 17-18bn). The 2023 update guided for USD 16-18bn/year from 2024-2028.
- Shareholder return of over 40% of CFFO through cycles with 45% in 2024 (unchanged policy). USD 8bn in buybacks in 2024 and 2025 with 2025 DPS +5% vs. 2024.
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