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Transcript of ENI Italian Energy 2012-2015 Strategy
7/29/2019 ENI Italian Energy 2012-2015 Strategy
http://slidepdf.com/reader/full/eni-italian-energy-2012-2015-strategy 1/44
en i .com
2012-2015 Strategy
15 March 2012
7/29/2019 ENI Italian Energy 2012-2015 Strategy
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en i: well-positioned to deliver a decade of sustainable growth
2 0 1 2 - 2 0 1 5 2 0 2 12 0 1 1
E & P
Confirmed growth profile
Start-up of giants with long plateau
Increased investment in exploration
Libya restart
Strengthenedresource base
A decade of sustainablegrowth
G & P Recover profitability in a difficult market
Consolidate competitiveness of supply
Focus on key segments and markets
Strong positionto benefit frommarketrecovery
R & M
C h e m
i c a l s Continued efficiency
Integration of refinery system,consolidation of marketing
Refocusing chemicals portfolio onadded-value products
Selectivepresence inR&M
Competitiveplayer inChemicals
Streamlinedoperations
Improvedsupply
Growth in keymarkets
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E&P: consistent exploration success ...
Mamba South(Mozambique)
Skrugard (Norway)
Hadrian Nord (US-GOM)
Jangkrik NE (Indonesia)
Lira 1 (Angola)
Gye Nyame 1 (Ghana)
Sangos-Ngoma
(Angola)
Kitan (JPDA)
Culzean (UK)
Sankofa (Ghana)
Perla (Venezuela)
Cabaca Norte (Angola) Area D (Libya)
Heidelberg (US)
Perla (Venezuela)
Jangkrik (Indonesia)
Sankofa (Ghana) Cabaca Sud Est
Mpungi (Angola)
2 0 0 8 - 2 0 1 1
~ 4 b n b o e o f
n ew
exp lo ra t i on
resources
New exploration resources(mboe)
Total resources(bboe)
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... drives organic growth, in the plan period...
Adjusting for force majeure in Libya in 2012 (180k boe/d)CAGR
Brent 2011-13: 90 USD/bl; 2014-15: 85 USD/bl
> 3 % CA GR 2 0 1 1 - 1 5
in a h igh er o i l p r i ce scenar io
Strong contribution fromexploration successes
Confirmed focus on giant,conventional projects
Increased exposure to oil
Best-in-class operating costs
IRR of new projects over 20%2011 2015
k b oe/ d
Pr o d u c t i on g r o w t h
> 3 % ad j
Russia and Caspian
Sub-Saharan Africa
North Africa and ME
Far EastLatin America
Europe and North America
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Pr o d u c t i on g r o w t h
k b oe/ d
Russia and Caspian
Sub-Saharan Africa
North Africa and ME
Far East
Latin America
Europe and North America
~ 3 %
2015 2021
2 0 1 5 - 2 1 CA GR in c rea se d f r o m 2 % t o 3 %
Price scenario: 85$/bbl 2015; +2%/year afterwards
Resilient contribution driven by Barents Sea
Junin 5 & Perla FF developments
Major contribution from Angola Block 15/06and Mozambique, additional explorationpotential
Yamal giants, Kashagan ramp up, furtherpotential from Kashagan development
... and beyond
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G&P: positioned to tackle difficult short term scenario...
* Adjusted for outcome of renegotiations and Libya impact
Marke t i ng : f ac ing d i f f i cu l t scenar i o Slower than expected demand
growth
Spot/LT differential remainssignificant in 2012
e n i 2 0 1 2 - 2 0 1 5 s t r a t e g y
Leverage on more competitive
supply portfolio to grow marketshare in Italy and key Europeanmarkets
Further increase exposure to moreresilient retail segment
Capture benefits of marketvolatility through enhanced tradingcapabilities
Gradu a l recovery inp ro f i t ab i l i t y
TMPC, TTPC, Greenstream, BSPC,other regulated business
Stable profitability and cash flowthroughout the plan
Snam
TAG/TENP/Transitgas
Othe r
G& P
M ar ke t i ng
Regula ted/ Low - r i s kbus iness
Assetdisposed/
to be disposed
TMPC, TTPC, Greenstream, BSPC,other regulated business
Stable profitability and cash flowthroughout the plan
2011 EB I TDA p ro - fo rm a ad jus ted*(€ mln)
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… and capture medium-term recovery opportunities
European dem and r ecove ry : St r ong Eu ropean m arke t p os it i on
Consolidated brand
Expertise in innovative offering structure
Divers i f ied and f lex ib le supp lyp o r t f o l i o
Competitive cost position in tightenedmarket
Increased equity gas supply
N e w p r o f i t o p p o r t u n i t i e s
Enhanced LNG presence
Cross-regional and cross-commodities
synergies in trading
EU 27 (b cm)
- 8 %
~ 1 8 %
Economic growth Energy/environmental policies
T igh ten ing supp l y capaci t y :
Increasing Far East demand Increasing MENA domestic gas consumption Declining European domestic production Limited LNG capacity for the Atlantic basin
Long- te rm scenar i o
Wel l posi t i oned to cap tu r ea d d it i o n a l g r o w t h
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R&M: increasing efficiency and complexity
Refining: a cyclical business in a difficult
short term scenario Increased focus on complexity and efficiency
to benefit from potential scenario recovery
EST completion by 2012
Increased system integration
Exploit flexibility and asset-backed trading
Opt im isa t i on
& e f f i c iency
+ € 4 00 m
Marketing: confirming profitability
Consolidation of Italian leadership
Network enhancement and automation
Expansion of non-oil activities
I t a l ia n r e ta i l
m a r k et sh a r e> 3 0 %
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Chemicals: a new turnaround strategy
More e f f i c ien tand i n teg ra ted Savings >€200m by 2015
Enhancedd i f f e ren ta t i on
Increase revenues fromadded value productsfrom <30% to >40%
I n t e r n at i o n alexpans ion
> 10% of revenues fromoutside Europe by 2015
Licensing, productionalliances/JVs
Rega in ingcompe t i t i venessw i t h i n ch e m ica l s
bus iness
2 0 1 5 t a r g et
> € 4 0 0 m o f EBI T a tconstan t scena r io
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GalpSnam
Separation by September 2013
Process evaluated on 3 criteria:
Benefits to en i shareholders
Protection of the interests of Snamshareholders
Consolidation of en i balance sheet
Non-core shareholding
High potential business, with excitingpositions in Brazil, Mozambique
Upside from market value recovery
enhanced value creation opportunities from non-core listed assets
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en i .com
Exploration & Production
Claudio Descalzi
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Strong focus on exploration strategy and execution Fast time-to-market of exploration discoveries
Rapid and efficient development of project pipeline
Effective reservoir management and production
optimization activities
Leading-edge technology to fight depletion of giant fields
Consolidate and deploy competencies and technology
Increase direct control of assets through operatorship
Maintain geographical diversification
Phase financial exposure in large-scale, complex projects
Org a n i c g ro w t h &va lue c rea t ion
Manag ingu n c e r t a i n t i e s
E&P strategic goals and drivers
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Dr i l l ed w e l l s
HSE results
Lost t im e i n j u ry f r equency ra te *
* n. of LTI/Mln of worked hours
Company Contractor Global
Avg 2007-2010 2011
0.66
0.770.73
0.41 0.42 0.41
2005 2008 2011
0.00 0.000.00
250
327
437
Drilled wells per year
Blow-out frequency(per thousand)
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Materiality and
cost-effectiveness
Short time to
market
Focus on
emerging basins
W est A f r i ca
Transform margin play in Ghana, Togo,
Liberia
Pre-salt play in Angola, Congo, RDC
Near f i e l d exp lo r a t i on
East A f r ica Gas (Mozam bique)
Exploit full potential of tertiaryplays in the Rovuma basin
B ar en t s Sea ( No r w ay )
Large upside GoM (USA)
P ac i f i c gas ( I ndones ia and A us t r a l i a )
High potential in profitable gasmarket
Main ta in ing leade rsh ip on d i scove red vo lum es
a n d u n i t e x p l o rat i o n c os t s
Dr i ve rs
Fontier high potential Proven basins/near field
exploration objectives
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focus on exploration: Norway - Barents sea
2 0 1 2 - 2 0 1 5 w o r k p r o g r am
Resources upside in the area: 500mboe
8 wells in the Barents Sea: €220mequity investments
Synerg ies
Havis/Skrugard hub servicing 50km radius
Onshore services
Add i t i ona l p rospect i v i t y
12 blocks for an acreage of 4,600sqkm
With Statoil, maintain leadershipposition in the next round
Discover ies
500 Mbbl of recoverable oil inSkrugard and Havis
PL226
PL533
PL529
PL201PL489
PL229Goliat
PL608 PL532Sk r u g a r d / Hav i s
PL657
H a v is / Sk r u g a r d h u b
operated
not operated
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Area 4
M a m b aN o r t h 1
Ter t i a ryp rovengas p lay
M a m b aNor th E as t 1
M a m b aS ou th 1
focus on exploration: Mozambique – Rovuma basin
2 0 1 2 - 2 0 1 5 w o r k p r o g r am
Up to 8 exploration and appraisalwells
2,000 sqkm of 3D and 2,100 sqkm2D seismic
€400m expected equityinvestments
Synerg ies
Unitization of Mamba complex withArea 1
Evaluation of additional stand-alone resources in Area 4
Mamba d i scove ry
Gas in place estimate at 30 Tcf High gas quality
Expected rate in productionconfiguration up to 140 mmsfcdper well
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2 0 1 2 - 2 0 1 5 w o r k p r o g r am
Resources upside: ~500 Mboe
24 wells: €300m equity investments
Synerg ies
Indonesia: Jangkrik hub
Australia: upstream developmentand synergies with LNG facilities
Add i t i ona l p rospec t i v i t y
16,000 sqkm of new acreageadded in 2011
Discover ies
~700 Mboe already discovered inAustralia and Indonesia
en i assets New acreage
BUKAT/ BULUNGAN
Nor th Gana l
JANGKRI K JANGKRI K NE
A r gun i 1
N T/ P6 8 -Heron
N T/ 4 8 -EvansShoal
focus on exploration: Pacific Area
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2 0 1 2 - 2 0 1 5
2012-152011-14
b ln €
5 .5
3 .6
+ ~ 5 0 %
By a rea By t ype
exploration capex
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* P1 + P2 + P3 + contingent resources + risked exploration
b ln boe
Bren t($/boe)
1 1 1
L i fe index(years)
5 0
2P reserves Other reserves/resources
9 0 % w i t h f i r st o i l i n p r od u ct i o ni n < 8 y e ar s
Mozamb ique
32 .131.0
7 9
4 7
Tota l resour ces*2 0 0 9 - 2 0 1 1d iscover ies
time to market: from resources to production…
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Main s ta r t - ups
4 -y e a r p l an s t a r t - u p s : ~ 7 0 0 k b o e d @ 2 0 1 5
S ambur skoyeY a r o / Y akh inskoye
Ur engoskoye
ALNGKizomba Sat . Ph.1
W es t Hub
Per la EPJun in 5 EP
Jangk r i k
Ja uKuta i Bas in
CBM FF
Sk r u g a r d / H a v is
East Hu b
Great Hadr ianarea
2 0 1 2 - 2 0 1 5 Hubs
Jasm ineW.Frank l in Ph.2
Culzean
OPL 245 FFBrass LNG
Kashagan EP
Goliat
… through identified and solid start-ups
YevoSevero
Beyond 2015
Perla FFJun in 5 FF
ML ECAFC
El Merk
W a facompr ess ion
Mamba
S anko faGye Nyame
Hadr i an
S ou th
Kashagan Ph.2Karachaganak Ph.3
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Yamal Nenets region: new gas giants
Samburgskoye and Urengoskoyesanctioned in 2011
GSA signed with Gazprom
Samburgskoye start up confirmed 2012
Samburgskoye
UrengoskoyeSevero- Chaselskoye
Yaro-Yakhinskoye
Sambu rgskoye Produc t i on ( k boed , equ i t y )
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Barents Sea: Goliat first oil development
Barent s Sea
First oil development in the Barents Sea
Subsea templates installation campaigncompleted in 2011 and ready for drilling
FPSO delivery in 2013
Produc t i on ( kboed , equ i t y )Gol iat
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Kashagan
Karachaganak
Kashagan EP
Construction completion and
commissioning ongoing
Tranches 1&2 progress for KCP:
99%, in line with commercial
production start up within 2012
Karachaganak
Previous development phases
currently producing >100 kboed
equity
Agreed settlement with Republic of
Kazakhstan
Kazakhs tan Produc t i on ( k boed , equ i t y )
Kazakhstan: near-term growth and significant long-term potential
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Venezuela: super giants with long-term plateau
Junín-5Perla Perla
Gas Sales Agreement and FID for Phase
1 achieved in 2011
Phase 1: construction and installation of
three offshore platforms, 60-km pipeline
to shore, onshore processing facility
Junìn EP
Finalizing all the major engineering
contracts
Seeking anticipated early production in
2012, using synergies with PDVSAexisting facilities
Venezue la Produc t i on ( k boed , equ i t y )
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Sub-Saharan: legacy area with further growth prospects
Development of Sangos, Ngoma, Cinguvu
fields (1,250-1,450m water depth)
16 wells (10 producers, 6 injectors)
First drilling campaign: ongoing
FPSO will be delivered in 1Q 2014
* exploration potential excluded
B lo ck 1 5 / 0 6 W e st H u b Pr o d u c t i o n * ( k b o e d, e q u it y )
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investment plan
Onshore
Offshore
Deepwater
By t ype
N. Africa/M. East America
Europe Asia Pacific
Central Asia/Russia West Africa
By area
b ln €
Development
Exploration
Other
Capex 2012 -2015
Mozambique
44 .8
39 .1
+ 1 4 %
1.83.6
5.5
1.7
3.1
33.7 37.6
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Bren t( $ / b oe)
2012/2013 2014/2015 2015
9 0 8 5 + 2 %
> 3 %~ 3 %
CAGR
Or g a n i c p r o d u ct i o n g r o w t h
Strong productiongrowth of over 3% ayear to 2015 adjustedfor Libya in 2011
Resilient to oil priceincreases: 2011-2015CAGR at 100$/bbl ~3%
Long-term growth targetraised from ~2% to~3%
our commitment: production
New productionLibya force majeure
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our commitment: value
Sol id cash genera t ion
90
100
110
120
2010 2015
NPV 2P by ar eas
Sub-Saharan Africa
Europe & America Asia & Pacific
North Africa
CF/ b o e ( % )
Bren t avg
($/boe)
Cash f low
8 5 8 5
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Gas & Power
Umberto Vergine
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European gas market: a difficult short term environment…
Pers i st i ng ove r supp ly i n Eu rope i n t h e nea r t e rm
Spot -LT p r ice d i f f e ren t ia l rem a ins sign i f i can t
Con t i nu ing com pe t i t i ve p r essu re
S upp ly Demand
Weak economic situation inEurope impacting industrialclients
Increased competition inpowergen from renewablesources
Relatively stable demand fromresidential customers
Increasing capacity fromRussia (North Stream)
Availability of lower-pricedmake up gas
No additional LNG capacity
from Qatar
Continued domestic productiondecrease
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... gradually rebalancing in the medium term
Prog ressi ve t i gh ten ing i n Eu ropean m arke t t o 2015
Fu r t h e r m a r k e t i m p r o v e m e n t b e y on d
Am ericas Paci f ic Basin
Europe
Demand escalation inemerging markets (+89bcm)
New high-cost
liquefaction capacity fromAustralia (+15 bcm) fullyabsorbed in the region
Premium prices attractsupply from Atlanticbasin
Demand recovery (+60bcm 2015vs. 2011)
Domestic production decline (-17bcm)
Marginal shale gas contribution
Increased interconnectivity opensnew market opportunities (11
new projects)
North Americanproduction continues toexpand
Effect of North
American exportslimited and subject toregulatory uncertainty
Increasing LatinAmerican demand forspot LNG
Mena
Increasing domesticconsumption in North Africa
Qatari production at 2011 levels
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O b j e c t i v e
• Alignmentbetween en i cost positionand average
costs of supplyin the market
I m
p l e m e
n t a t i o n
• Negotiation of market-likeprices in long-
term contractprice revisions
• Improved andfasterresponsivenessto market
changes
• Reduction of minimumvolumes,
possibility toreopennegotiations if required
• Founda t i on fo rc o m p e t i t i v epos it i on ing i nt h e m a r k e t
Pr ice F lex ib i l i t yMa rke t
re f l ec t i v i t y
en i strategy: building on a more competitive supply portfolio …
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… to grow sales to business customers…
Conso l ida t ion o f lead ingpos i t i on i n Eu rope
+18%
72
85
B2B vo lum e increase
(bcm/y)•
Dedicated and capillary direct salesforce to grow position in Italy and keyEuropean countries
• Tailor made offers for differentsegments
• Energy intensive customers Multi-country approach
Flexible contractual structures
Risk management services
Market reflective pricing
• Small and medium enterprises
Specific offers to reflect marketsegmentation
High quality post-sale service
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... and increase exposure to the retail segment
I n c reasing pene t ra t i onin to m o re resi l i en t
c u st o m e r s e g m e n t s
Reta i l cus tomer s
(mln)
• Larger retail presence in Italy andEurope
Organic growth Selected M&A opportunities
• Well-proven commercial mix
Single brand identity Distinctive product portfolio Customer driven innovation
Competitive cost to serve
• Well-balanced sales channels
Agents Teleselling iweb en i energy stores
• Best In Class program ongoing
Marketing & IT innovation Communication & brand awareness Customer care operations
+28%
9.4
12
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Financial Outlook
Alessandro Bernini, CFO
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Snam deconsolidation: a resulting strong capital structure
b ln €
Ne t deb t
en i D/E 0.46x
Snam deconsolidation 0.30x
Including cash-in <0.20x
b ln €
en i65.3
Snam
15 .4
Capi ta l em ployed
en i ROACE 9.8%
Snam deconsolidation 10.4%
Including cash-in 11.4%
Mkt va lue o fen i ’ s s take
6 .9
* data at year-end 2011
en i
9 .9
Snam
11 .2
M k t v a l u eo f en i ’ ss t a k e
6 .9
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2012-2015 capex: supporting stronger growth
59 .6
44.7
7.2
2.82.5
2.30.5
6.7
-1.1
53 .3
39.1
7.5
2.92.41.4
E&PG&PR&MSaipemOthers
2011-14capex plan
Forexeffect
E&P Others 2012-15capex plan
Mozambique
OPL245
JangkrikSkrugard/Havis
Snam
Europe/NorthAmerica
LatamFarEast
NorthAfrica/ME
SubSahara
Russia/
Caspian
Uncom-mited
Committed
b ln €
Snam
Snam
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selective capex plan
G& P R&M Chem icals
Focus on p ro j ect s f o r i n teg ra t i on , e f f i ci ency and ene rgy sav ing Ta r g e t e d i n v e st m e n t t o b o o st o r g a n i c g r ow t h i n e x i s t i n g / n e w
pr o f i t ab le bus inesses
Internationaltransport
0.1
Snam
6.2
Refining
1.9
Marketing
0.9
Marketing
0.9
To ta l €7 .2 b ln Tota l €2 .8 b ln To ta l €1 .6 b ln
Greenchemical
0.2
New
initiatives0.8
Stay inbusiness
0.4
Efficiency0.2
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efficiency programme
Almost €600m of savings achieved in 2011
4-year target increased by €600m, mainly in
R&M and Chemicals
E&P 11%
G&P 6%
R&M 11%
Chemicals
20%
E&C3%
Corporate& others49%
2004-05achievements
2006-11achievements
2012-15target
b ln €
2004-05 2006-11 2004-15
0.3
3.1
1.6
5 .0
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increasing cash flow to support investments and reduce debt
* @ 90$/bl in 2012-13; 85$/bl in 2014-15
Organic cash-flow more
than covers capex
requirements
Net debt to equity <40%
within the plan period atconstant perimeter
Additional cash-inflows
expected from disposals
Impact of Snam
deconsolidation on free
cash-flow broadly neutral
2 0 1 2 - 1 5 c a sh f l o w *
b ln €
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42
a sustainable dividend policy
2 0 1 1 : d iv i d en d + 4 % i n l i n e w i t h o u r p o li cy
Div id e n d p o l ic y o f g ro w t h i n l in e w i t h i n f l a t i o n
s u st a i n a b le t h r o u g h o u t t h e f o u r - y e ar p l a n
Con f i rmed
d iv idend
po l icy
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Closing remarks
Paolo Scaroni, CEO
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entering a new growth phase
E& P
A decade o f f as te r , sus ta inab le g row th
•
Raised production targets to 2015 and beyond• Increased exploration effort in highly promising basins
G& P
Conso l ida t ion o f lead ing pos i t ion in Eur ope
• Improved competitiveness of supply
• Medium-term recovery leveraging on secular gas demand growth
R& MChem
Re st r u c t u r i n g p o t e n t i a l
• Continuous focus on efficiencies
• Profit enhancement through integration, innovation and portfolio refocusing
Po ten t ia l va lue crea t ion f rom d isposa ls