Good afternoon, ladies and gentlemen. Welcome to Galp's fourth quarter and full year 2022 results and outlook presentation. I will now pass the floor to Otelo Ruivo, Head of Investor Relations. Hello, everyone. Welcome to the analyst Q&A session related with Galp's fourth quarter and 2022 results. Earlier this morning, we released all the results materials and a video presentation from Filipe, highlighting the key achievements during the year and covering the financial results. We also announced divestment from our Angola upstream assets, as I'm sure you also saw. After some initial words from Filipe, we'll go straight to Q&A. We have Filipe, Teresa, Georgios, and Thore from the executive team, and Rodrigo, our head of energy management, here to take your questions. Before we start, I would like to remind you all that we will be making forward-looking statements that refer to our estimates. Actual results may differ due to factors included in the cautionary statement presented at the end of our presentation that we advise you to read. Filipe, the line is yours. Thank you, Otelo. Good afternoon. During 2022, Galp met most of its operating targets. Very, very strong performance across our physical asset base. Helped by the macro operating cash flow was over EUR 2.8 billion as per guidance. This allowed us to make very good progress with our growth and transformation investments and reinforce our financial position while allowing for a competitive return to our shareholders. The dividend goes up 4%, and we will go ahead with EUR 500 million in share buybacks as expected. Going forward, we will keep average net CapEx at EUR 1 billion per year until 2025, and we will continue to grow this company and at the same time drive its gradual transformation from gray to green. We will continue to grow upstream to 2030, even with the divestment in Angola we announced today. This is the basis on which we will continue to expand our renewables business, which will also help decarbonize our industrial and commercial footprints. Let's go straight to Q&A. Let me just say this before. With the Galp share, you are getting growth, you are getting a competitive yield, so good returns, and you are actively participating in the energy transition with meaningful value creation. Thank you. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To ensure everyone has the opportunity to ask a question today, please limit yourselves to just two questions. We will now go to our first question. Your first question comes from the line of Biraj Borkhataria from RBC Capital Markets. Please go ahead. Your line is open. Hi, there. Thanks for taking my question, and appreciate the more condensed format. Two questions, please. The first one is on the EUR 1 billion net CapEx guidance. When you're building that up, do you only include the Angola divestment in there to get to the net, or are you assuming you'll do further divestments over the 2023-2025 period? The second question is on low carbon growth and financing. One of your peers talked about basically reducing the use of project financing, given the way interest rates have moved and how balance sheets have improved. Could you talk about any changes in assumption there between, you know, project financing and how much you're gonna take as equity financing? Thank you. Thank you. Thank you, Biraj. So the net CapEx guidance is net. Why is Galp so focused on the net number? If you have less divestments, then we can do less investments. We target overall net number. It keeps the discipline to rotate assets and to high-grade the assets within an envelope that is preset. As we invest more in renewables and because we have now consolidated renewables, we want to show green EBITDA as part of our overall mix of EBITDA. Could there be more divestments? There could be, depending on how quickly we want to ramp up other low carbon initiatives, and that is not just renewables, it can be the pace at which we do hydrogen, for example, and the pace at which we do HVO. What is important is that we continue to invest in upstream very significantly. But the overall envelope for upstream is net zero, frankly. Even for renewables, if we see value in rotating renewable assets, we will do so as well to keep within the guidance. On low-carbon project finance, now there is. You will have seen this morning's publication that almost all of Galp's net debt is already green and will be completely green very, very soon. No need for Galp to issue a green bond because we are green almost by definition, given the legacy free cash flow release of the high-carbon businesses. The appetite from lenders for green project is immense. Because we consolidate those, we set up structures whereby we get a bit of benefit of project finance allocated or earmarked for green project, but they will sit on the balance sheet without necessarily having to have all the strings attached of a typical project finance exercise, including high cash balances, high debt service coverage ratios. Thank you. Thank you. We will now go to our next question. The next question comes from the line of Joshua Stone from Barclays. Please go ahead. Your line is open. Thanks, good afternoon. Two questions, please. First, if we could just go to Brazil and the volume guide, it does look about 6,000 barrels a day, 7,000 barrels a day lighter than your previous guide. Can you just better flesh out what's going on there? Are the reservoirs declining more quickly than you first thought? If that is the case, what confidence can you give us that that's not gonna be an ongoing area of disappointment? Secondly, on the Angolan disposal, congratulations for getting that away. It's an attractive price. You talked about using those proceeds for increased CapEx, but is there any or to what extent could you consider using some of those proceeds for distributions to shareholders? Thank you. Thank you, Josh. Let me try to answer you first regarding Brazilian production. You know, what we have done over the last few years is that we have worked enormously internally in order to develop better methodology, in order to be able to predict how the production is going to be. As you know, we are not standing on the wells ourselves. This is really non-operated assets. We have actually developed a very good, I think, you know, probabilistic model in order to try to forecast production, hence also what happened last year, where we really were spot on on our forecasting. We are doing the same this year, factoring in that, you know, there is a significant larger downside than there is upside. On a good day, we are producing one percentage point better. On a bad day, it's close to zero. This is then factoring in that the assets in Brazil have reached peak for now on Tupi and Iracema in particular, but also in Jaca. It will come. This is then a prudent way to try to forecast where we will be in the next two years until Bacalhau comes on stream. I think I will underline it. I think it is prudent, but that is also the way we should be guiding you. The decline rate for Tupi Iracema is still, in my 36 years of experience in this business, astounding that it doesn't decline faster. We see a decline rate that is below 5% per year. It is still a very good reservoir, but it has peaked and there is natural decline and that is what we're trying to factor in. It's still really, really profitable barrels that is coming out for Galp in Brazil. Thank you. Filipe? Josh, on Angola divestments. you know, we like to be in giant low carbon intensity reservoirs, even if we are a minority. Focusing on the Brazil pre-salt, which includes Lula, Bacalhau of course, which are much younger fields, and they're very also long life. Our Angolan assets had or have CO2 emissions per barrel pretty much in line with industry average, which is reasonable. Our Brazilian barrels have an emission intensity which is well below that. This divestment also improves our overall intensity. You ask about use of proceeds. Our upstream is still growing. Bacalhau will bring some 40,000 new barrels per day. Angola was just 12,000 and declining. Bacalhau alone is EUR 1.6 billion of CapEx to Galp. That's two times the Angolan proceeds. As I said before, we need to keep... If we're taking net zero seriously in 2050, we need to keep discipline in overall upstream, increased exposure to upstream. We need to rotate and we need to high-grade. Word of caution that São Tomé and Namibia could change this if they are successful, you know, given the sheer size of those two assets. The market was not attributing also the value we managed to crystallize Angola at. You know, EUR 830 is quite above market consensus, which by the way, this applies to most of our assets. The use of the proceeds is to keep the overall net CapEx number within, you know, EUR 1 billion as we develop Bacalhau, as we invest in decarbonizing industry and build up the renewable portfolio. The market was concerned as we consolidate renewables, that our CapEx numbers will be much higher than EUR 1 billion. Keeping the EUR 1 billion is our way of using the proceeds. Thank you. Thank you. Thank you. We will now go to our next question. The next question comes from the line of Alessandro Pozzi from Mediobanca. Please go ahead. Your line is open. Oh, hi there. Thank you for taking my questions. The first one is on the long-term production outlook. Certainly Bacalhau coming on stream gives a bit of a boost. But I was a bit of surprised to see a bit of a production coming down soon after Bacalhau. At the same time, I see that you haven't included much upside from Mozambique, and I was wondering whether you believe Mozambique is now coming on stream before 2030, or you're just taking a more prudent approach there. Also, I think if you can give us maybe a bit more color on DD&A in the upstream, how that will change in 2023. Of course, we're gonna have the addition of Coral South, but also, Angola is coming out. I was wondering if maybe if you can give us an update on where DD&A gonna go in 2023. Thank you. If I then start with the first, thank you, Alessandro, and I'd like me to start then first on your question regarding the production outlook. First and foremost, the key focus. Could you mute your line actually, Alessandro, because we get a lot of noise there? Thank you very much. First and foremost, our key focus is now to get Bacalhau on stream. As we have said, mid-2025 is now our focus. It's an extremely profitable asset for Galp. It's significant, as Filipe has said, with 40,000 barrels per day, but it's also with a very high level of profitability. That's number one. Number two, as you correctly are alluding to, for sure there is upside in Mozambique. It is promising and interesting to see that our colleagues in TotalEnergies has just recently been to Mozambique. The reports from the ground is pointing to that the security situation is improving. That is a very positive sign with respect to also the further development of Mozambique. By the way, let me also say that we are extremely happy so far with how Coral South is ramping up. It's an astounding achievement by the teams that has been involved that an FLNG product is already producing the way it is doing. Yes, Mozambique represent an upside. Let me underline once more, which Filipe just did in his previous intervention, Galp has two really big diamonds in its portfolio being Namibia, where in my view, we have the best ZIP Code. We have around 2,000 meters water depth, or some of our colleagues, that is neighboring blocks, operates at 3,000 and deeper. Of course, if we make a discovery there, this can be extremely profitable barrels. Also São Tomé and Príncipe, you know, we have drilled the first well. Being in a region where we drilled 66 wells before we found any oil, this actually hit. In the first well, we proved there's a working petroleum system in São Tomé and Príncipe. Galp sits very well positioned in three very interesting opportunities in São Tomé, Block 6, 11, and 12. I think you should look forward to further de-risking of that in the next years to come. Yes, Galp has for sure upside in its on its longer term production outlook. I think you can expect more profitable barrels to come on stream. I'll leave the DD&A. Yeah. On Mozambique, is there any update on a potential second floating vessel? Alessandro, what is being evaluated in Mozambique is one, is to look into is there a fast way to further develop the Coral part of the reservoir? Then, but where the majority of the efforts are now is actually, what should be then the onshore development so that we really can materialize these significant resources? As you know, we think there are around 85 trillion cubic feet of natural gas in place in just Area 4. That is onshore. We're looking into smaller train, modularized train, learning from what has so successfully have been done in the U.S. That is what is now being discussed intensively in the partnership. It's also being matured so that as soon as we feel confident on the ground situation, there could be new products that is being launched in Mozambique. Thank you. Alessandro, on DD&A, we will have less DD&A from Angola. Of course, we have a bit per barrel. We have less DD&A in Brazil. The overall DD&A, even with Coral, will go down meaningfully next year. From 13, 14, if I'm not mistaken, per barrel to something around $10 per barrel overall portfolio. Thank you. Thank you. Thank you. We'll now go to our next question. The next question comes from the line of Pablo Cuadrado from Kepler. Please go ahead. Your line is open. Hi, good afternoon, everyone. Just two quick questions on my side. The first one will be on the upstream guidance. I was probably keen if you can drive us a little bit with the difference between the guidance you are providing for this year and next year. I mean, as you reported EUR 3.1 billion EBITDA, and now you are guiding for more than EUR 2 billion. Clearly, I reckon that the commodity prices, Forex assumptions that you are making are clearly different and you have Angola disposal. Running through the sensitivities that you are providing, it looks to me at least that the EUR 1.1 billion drop for me is difficult to get. If you can probably help us a little bit to understand what's driving the EUR 1.1 billion EBITDA drop on upstream? The second one will be quick, I mean, quick one on working capital. Clearly, last year, as you were widely highlighting last year, there was like a dual effect, clearly much more negative in H1, but much more positive in H2. To the best of your knowledge and looking, you know, the environment at the moment, what's are the digital expectations for this year? Hi, Pablo. The upstream EBITDA guidance. Yes, do bear in mind the guidance is ex Angola. We have assumed lower oil prices. Do bear in mind we're using the dollar at $1.15 to the EUR. If you look at the sensitivities page on the appendix, $0.05 on the dollar is about $120 million overall Galp, a lot of this is driven by upstream. On working capital, what happened in 2022 was exactly as we had expected and as we had explained throughout the year. We had very significant margin calls underlining our hedges to protect risk. These have rolled off as expected throughout the year, that money is no longer tied up. During 2022, the commodity prices went way up, so we have a lot more normal working capital tied up in inventories and client receivables. Assuming what we are assuming on micro commodity assumptions, we would not expect working capital to change much from end of 2022. Thank you. Thank you. We'll go to our next question. The next question comes from the line of Sasikanth Chilukuru from Morgan Stanley. Please go ahead. Your line is open. Hi. Thanks for taking my questions. I had two, please. The first, I just wanted to understand more on the production at the Tupi field. When I look at the data provided by A&P, I do calculate an annual decline rate of around 7% actually for the Tupi field, which includes, of course, Iracema. In fact, some of the annual decline rates in some FPSOs, including P-69 and P-66, is close to 20% in 2022. I was just wondering if you could kinda comment on the decline rates, especially on some of these facilities there. Is it fair to assume such kind of level of decline rates? Also along with the Tupi, I just wanted to understand the progress made for the Tupi redetermination plan, especially the importance of this for the operator Petrobras, who has, of course, other growth projects to focus on as well. When you talk about this 30% increase in production between 2023 to 2026, have you included any contribution from the Tupi redetermination plan at all? If yes, is it possible to highlight from when do you expect this contribution to come from? The second question was on net debt. Just wanted to understand, will net debt increase or decrease by end 2023 in your current guidance of EUR 2.2 billion OCF, EUR 500 million of buyback, dividend payments of around EUR 400 million Angolan cash proceeds as well? I was just wondering, what's the trajectory of the net debt levels, including these guidance as well? Thanks. Thank you, Sasi, for your question. If I then try to take the first regarding the production and the redetermination. What we see based on our own in-house reservoir models is that we see a decline rate for our Brazilian assets that is below 5%. That is what we have in our business plan and what we have factored in. I believe that is prudent. You are correct that on Iracema there is a higher decline rate than there is on the rest of the Tupi field, just to mention that. It has to do with the fact that of course it's a much significantly smaller resource pool that the Iracema is producing from than from Tupi. But overall, what we see is a decline rate in the order that is just below 5% for our Brazilian assets. We have... With respect to redetermination, that has just kicked off. We have just had the first initial, sort of you know, alignment meeting in the partnership. It is way too early to factor in any results of that. This is going to be a lengthy process that will go over several years. We have not factored in any outcome of this process at this stage. Thank you. Thank you. Sasi on net debt. The guidance we are providing are, these are really averages 23 to 25. It is not, it's not a year by year guidance. Having said this, net debt is pretty controlled. I would also say, given the mix of our assets and the long life nature of our assets, and the weight of renewable assets in our portfolio going forward, we're actually happy conceptually to see net debt going up in euro terms. The asset is increasingly green. You know, our green competitors have net debt to EBITDA of four times for example, or five times. We are at 0.4 times. It is a very low base, and there's no reason on how this new Galp in transformation would continue to stick with such low oil and gas net debt in its balance sheet. Thank you. Thank you very much. Thank you. We will now go to the next question. The next question comes from the line of Henri Patricot from UBS. Please go ahead. Your line is open. Yes, hello everyone. Thank you for the update. I have two questions please. The first one, actually just a bit of a follow-up on what we just discussed, on the CapEx guidance for the for the three years. Can you give us a sense of how that will be split across the period? Maybe not from a NetCapEx, but if you can give a sense of the underlying organic CapEx, whether we should expect that to be a bit more back-end loaded. Then secondly, I want to ask you about the HVO projects you expect to FID this year. Can you give us your latest thoughts around planning of startup, the fixed stock strategy? You mentioned at the beginning that you could be doing more HVO, so it's interesting to hear why you would go towards more HVO. What are you know, waiting to see before committing more materially to that business? Thank you. On CapEx, again, we're not providing gross CapEx guidance, what is organic and what is divestment, 'cause one will depend on the other. You know, we have significant leeway to pace our gross CapEx commitments, we would slow them down if there are no divestments, we would speed up investments if we can monetize some assets faster. The way where we're sitting today, it does not look as if it's going to be back-end loaded. No, it is not. Do keep in mind the EUR 1 billion net CapEx numbers as you drive your models. Thank you. With respect to the HVO project, Henry, it is moving ahead very much now according to plan. We do expect to take the final investment decision on this project during the course of this year, actually in the first half of 2023. This is a significant project for us when it comes to also turning our refinery complex into a green energy hub. We are really well advanced when it comes to securing the feedstock in two dimensions. One, and then Rodrigo might want to elaborate on this, but we are mainly sourcing this ourselves. We also have teamed up with an international partner with a strong foothold in the Far East, that we have two major legs to stand on when it comes to sourcing. As we see it, we're feeling quite comfortable with the sourcing, and we expect to start off this project in 2025. Would you like to elaborate a little bit on sourcing, Rodrigo? Thank you, Thore. As you well said, we are e xpanding the sourcing of feedstock with our existing suppliers who are already active in this business. We are doing so through increasing throughput, co-processing the refinery, tolling agreements, and also partnering with an international provider. Thank you. Thank you. We will go to our next question. The next question comes from the line of Matt Lofting from JPMorgan. Please go ahead. Your line is open. Thanks, gents, for taking the questions. Two if I could, please. First, sort of strikes me that in parallel with the value proposition that you referenced earlier, the rationalization move around Angola and the associated sort of gross to net CapEx comments that you've made. That in some respects signals a degree of fruition coming through in the more agile operating model at Galp that has been talked about in recent history. Any thoughts in terms of sort of connecting those two things in terms of how you sort of thought about the model going forward and also, are there other rationalization moves that you're looking at, and in particular, given the weight of renewable CapEx showing through to mid-decade? I wonder whether there's a case for partnerships or JVs if the right opportunity comes through over the medium term in that business. Secondly, just on cash return, I guess the one-third or up to one-third OCF policy unchanged. The threshold around that today, I think has been net debt to EBITDA being less than 1x. Given the extent to which you're showing the sort of evolution of the capital employed and net CapEx through the sort of the coming years, I wonder whether that's still the right threshold for that cash return policy or whether there's a case that commensurate with that balance sheet evolution, that threshold can also be eased as the capital employed mix changes. Thank you. Hi, Matt. Let me take that second question first. The distributions, the dividend goes up 4% per year. There's no terminal date on, it's 4% every year. It's compound. One-third of OCF remains the benchmark, remains the intention. If we continue to delever very quickly, I would have thought that the board will look at a revised distribution policy. If somehow some of our CapEx gets delayed or the micro gets different from what we're expecting, the rule is not cast in stones. If we divest and net debt becomes so low, I am sure the board will look at distributions carefully. I think your first question was on a bit our business model and partnerships. The way we're thinking longer term is, and we have a graph in the documents we published this morning on the color of the LCF. As we become greener and greener, as we invest in renewables production, have access to these green electrons to decarbonize our industrial business. Where we are an incumbent, we are an incumbent in Iberia. We have very significant asset base, we have competitive advantages. Decarbonizing the existing operations, be it with biofuels, with hydrogen, is very low-hanging fruit for us. There will come a time, I guess we're all playing the multiples game here. There'll be a time when people will look at Galp, it's no longer three or 4 times EBITDA business. It's much, much closer to, you know, a greener business. Whether we do this alone or in partnership, clearly, we don't need the money, so the partner would need to bring assets or would need to bring feedstocks, something that would complement our existing business. We want to control those businesses ourselves. Ideally, everything that is green should be consolidated so that the balance sheet and the cash flow statement, you'll see how much has become legacy and how much is going to be a high multiple business. Thank you. Thanks. Thanks, Felipe. Thank you. We will now go to the next question. The next question comes from the line of Ignacio Doménech from JB Capital Markets. Please go ahead. Your line is open. Yes, good afternoon. Thank you for taking my question. My question is on the gas trading division. You're not expecting a growing contribution. Sorry, Ignacio, we can't hear you. Hi. Is this any better? Yeah, a bit better. Thank you. Yep. Okay. Thank you. My question is on the gas trading division. You are not expecting a growing contribution up to 2025. I was wondering if you could give us the assumptions or the rationale behind these contributions. You were mentioning volumes increase in 15%, but maybe the assumptions behind this and some color on the margin on this division. Thank you. Hello, Ignacio. Regarding the outlook for gas trading business. In the slide that was provided earlier today, you have some of the big numbers on volumes and expected EBITDA. I mean, the main things I would highlight is that from a supply perspective, later this year we'll have an additional source of supply coming from the U.S., which will be FOB and free destination. And on top of that, also the highlights on the slide that we do not have relevant hedges and the pre-sold volumes, which delivers a flexible portfolio for us in 2023. Thank you. Thank you. We'll go to our next question. The next question comes from Giacomo Romeo from Jefferies. Please go ahead. Your line is open. Thank you. Two questions for me. First is for Filipe. You talked about an envelope for upstream remaining at zero, and effectively future growth will have to happen in parallel to divestments. You talked also about the fact that you think that other assets other than Angola are undervalued in your portfolio. Does it mean that you will look at potential opportunities for divestment of some of your more mature Brazilian assets at some point, or are those off the table The other question I have is related to renewables returns. Quite a lot of your peers have flagged about the concerns around the lower returns, particularly as we discussed earlier, as the leverage attractiveness from project finances is sort of is less clear. Just wondering if you made any sort of adjustments, changes to your renewables investment plans on the back of these trends and sort of how's what's your thinking around returns patterns you're seeing? Thank you. Hi, Giacomo. The net, let's call it net zero CapEx in upstream. This is guidance to 2025. Angola clearly falls in 2023. The Angolan transaction is already helping significantly into our guidance. But no, let me be very clear that Brazil is not going to be considered as a divestment candidate. We will pace investments and divestments in the group depending on net, so I insist on this, net CapEx numbers, we can play with both angles, with the how much we invest and how much we divest. After 2025, you know, today we're only spending exploration CapEx in São Tomé and Namibia. By 2025, if not well before that, we will know a lot more about these two assets. Everything could change depending on if these are discoveries or not. Let me caveat that as well. Renewable returns. I'm not surprised by the question given what we've seen some of our competitors doing over the last few years, and I hope you give us the benefit of the doubt when you look at the returns that Galp is generating in renewables. We are not in the megawatt game. If we see value, we will invest. If we don't see value, we will not invest. Renewables at Galp is to create value for the shareholders, it is not to destroy value. It is also to integrate, at least a big part of our renewables electrons will be integrated so that we decarbonize our existing operations. Thank you. Thank you. I will now hand the call back to Otelo Ruivo for closing remarks. Okay. We have now reached the end of this Q&A session. Hope it was a useful one. As always, the team is here to help on any further clarification you might need. I look forward to seeing you all soon. Take care. Thank you. This does conclude today's conference call. Thank you for participating. You may now disconnect.