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TotalEnergies 2022 Strategy & Outlook Presentation

September 28, 2022

TotalEnergies’ Board of Directors reviewed the Company’s outlook in the context of changing energy markets as a result of the energy transition.

The Board of Directors noted the relevance of the Company’s balanced multi-energy strategy in light of the developments in the oil, gas and electricity markets. Thanks to refocusing the portfolio of oil and gas assets and projects on low cost (less than $20/b), a strong growth strategy in liquefied natural gas (LNG) to position itself among the top 3 worldwide, and the accelerated development into electricity, mainly renewable to reach the top 5 worldwide, the Company is in a very favorable position to benefit from the evolution of energy markets.

With a breakeven anchored below $25/b, TotalEnergies is a much more profitable company today than it was 10 years ago: at the same oil equivalent price, it generates an additional $15 billion of cash flow and can take full advantage of favorable environments. Thus, by end-2022, the Company will have a very strong balance sheet with gearing sharply down to around 5%, providing more flexibility. It is positioned to both accelerate its transformation strategy and to offer an attractive return to the shareholder policy.

In addition, the Company expects underlying cash flow (excluding Russia) to grow by $4 billion over the coming 5 years using moderate energy price assumptions ($50/b for oil and $8/Mbtu for European gas), knowing that it would generate an additional cash flow of more than $3 billion for every $10/b increase in the price of oil. This structural cash flow growth will support dividend growth over the next 5 years.

In this context, the Board of Directors has adopted a cash flow allocation strategy for the coming years. It provides for the allocation of 35-40% of cash flow to shareholders through the cycles while accelerating the Company’s transformation strategy with net investments increasing to $14-18 billion per year over 2022-25. This increase will be dedicated in priority to the development of carbon-free energies and carbon footprint reduction programs which will represent about a third. Investments in solar and wind will exceed $4 billion in 2022 (compared to $3 billion in 2021) and a $1 billion energy savings program will be deployed globally in 2023-24 to control the cost of energy consumed and accelerate the reduction of emissions. The remaining two-thirds will be dedicated to on one hand to growing in LNG and on the other to developing low-cost, low-emission oil projects to meet demand.

Confident in TotalEnergies’ ability to ensure profitable and sustainable growth in the coming years and seeking to share with its shareholders the Company’s results in this context of high prices, the Board of Directors has taken following decisions:

allocate through the cycles 35-40% of cash flow to shareholders
for year 2022, maintain the $7 billion share buyback program as announced in July and pay a special interim dividend of 1 € per share in December 2022, in addition to the 5% increase in quarterly interim dividends already announced and implemented. The return to shareholders should therefore represent between 35 and 40% of cash flow as of 2022.

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