CHAIRMAN'S MESSAGE
© Surre Alexandre - Total
The Group’s ability to deliver profitable and sustainable growth means that it can accelerate dividend growth, targeting 5% to 6% per year as from now.”
Patrick Pouyanné,
Chairman and Chief Executive Officer of Total
Dear Shareholders,
On our Investor’s Day on September 24, we gave details of Total’s roadmap up to 2025 and confirmed the Group’s implementation of its strategy for profitable and sustainable growth for the benefit of all our stakeholders, taking into account the evolution of energy markets. In face of volatile energy markets, Total focuses on operational excellence and financial discipline to maintain an organic pre-dividend breakeven to less than 30 dollars per barrel and a strong balance sheet with a gearing maintained below 20%. The Group is also launching an additional 1 billion dollars cost reduction program until 2023, notably supported by a strong digital ambition. Net capital expenditures will be maintained at 16-18 billion dollars per year over 2019 to 2023.
In oil and gas, Total benefits from a large portfolio of profitable projects to fuel its future growth post 2023, and is sanctioning more than 800.000 barrels of oil equivalent per day of new production. Total has also demonstrated its agility by making counter-cyclical acquisitions that have significantly high-graded the quality of its portfolio.
The acquisition of Anadarko’s African assets fits into the strategy and improves visibility of the Group’s future. Downstream is making significant additional contributions to cash flow. Refining-Chemicals is focusing on growing petrochemicals. Marketing & Services is expanding in large, fast-growing markets. Both segments also invest in new low carbon businesses (biofuels, bioplastics, plastic recycling, EV charging points, natural gas for trucks and shipping, etc.).
The energy transition leads to a growing role for both natural gas (mainly LNG) and electricity in the energy mix. Total will increase its LNG sales to 50 million tonnes by 2025, supporting CFFO growth in integrated LNG of 2.5 times between 2018 and 2025. In low carbon electricity, Total will invest 1.5 to 2 billion dollars per year, particularly in Europe, targeting 8 million customers by 2025. Beyond Europe, Total is leveraging strong electricity demand by investing in renewables generation. This strategy for LNG and electricity contributes to the Group’s ambition to reduce the carbon intensity of the energy products used by our customers by 15% between 2015 and 2030.
In conclusion, Total will generate production growth of more than 5% per year between 2018 and 2021, then after a stable period between 2022 and 2023, growth will resume at more than 3%. The Group’s cash-flow will increase by more than 5 billion dollars by 2025 in a 60 dollars per barrel environment.
I am pleased to announce that as a result of this strong outlook, the Board of Directors decided to accelerate dividend growth, starting from the third interim dividend 2019 which will be €0.68 per share. The Board of Directors set a guidance to increase the dividend by 5 to 6% per year in the coming years.
Thank you for your loyalty.