bp downstream investor day lubricants … downstream investor day lubricants – continued growth...
TRANSCRIPT
Mandhir Singh – COO BP Lubricants A.S. Ramchander (Ram) – CMO BP Lubricants
BP DOWNSTREAM INVESTOR DAY
Lubricants – continued growth and attractive returns
BP DOWNSTREAM INVESTOR DAY 2 JUNE 2017
A global business with a portfolio built for growth
Cars Bikes Commercial
Vehicles
Industrial
Marine & Energy Cars Bikes
Commercial vehicles
Industrial
Marine & Energy
JUNE 2017 BP DOWNSTREAM INVESTOR DAY 3
Castrol lubricants – continued growth
>$0.6bn
2
Underlying earnings growth1
$bn
(1) At 2016 foreign exchange environment
(2) Excludes growth countries
Customer relationships
Strong brands
Differentiated technology
1
2
2016 Growthcountries
Premiumlubricants
2021
Thousa
nds
>$0.6bn Lubricants growth1 still to come
Sources of differentiation
BP DOWNSTREAM INVESTOR DAY 4 JUNE 2017
Strong brands
(1) 2015 Millward Brown Brand Health study comprising US, Australia, Vietnam, Indonesia, India, China, Turkey & Russia markets
Power brands create advantage in focus segments
End-users more loyal to Castrol1
Loyalty
Familiarity
Shell
Leading brands
Mobil
82
72
42
23
74
57
25
10
66
55
21
9
BP DOWNSTREAM INVESTOR DAY 5 JUNE 2017
Solving customer problems with differentiated technology
~$200m gross margin in 20161 from unique or first to market product launches
0
200
400
2014 2015 2016
(1) Launched since 2013 at 2016 foreign exchange environment
0
100
200
2014 2015 2016
Gross margin from unique or first to market product launches1
$m
BP DOWNSTREAM INVESTOR DAY 6 JUNE 2017
Truly loyal customers drive competitive advantage
Landscape of >2,000 Distributors
~15,000 SALES PEOPLE
> 150,000 INDEPENDENT WORKSHOPS
60
(1) Castrol Customer Heartbeat 2016 survey
High Risk Trapped
5% 60%
10% 25%
Loyalty to competition
8% 51%
24% 17%
BEHAVIOURS
AT
TIT
UD
ES
60% of our Customers are truly loyal1
Accessible Truly Loyal
ORIGINAL EQUIPMENT MANUFACTURERS PARTNERSHIPS
60% of our customers are truly loyal1
Accessible Truly Loyal
BP DOWNSTREAM INVESTOR DAY 7 JUNE 2017
Key growth countries earnings1,3 $bn
Key growth countries1 Car & motorcycle lubricant volumes CAGR
Well positioned in key growth countries
(1) Key growth countries: China, India, Vietnam, Brazil, Mexico, Russia, Indonesia, Kingdom of Saudi Arabia, Thailand, Turkey
(2) Source: Kline & Company
Market2 Castrol
(3) At 2016 foreign exchange environment
0
0.4
0.8
1.2
2014 2016 2021
0%
5%
10%
2011-16 2016-212011-16 2016-21
0%
5%
10%
BP DOWNSTREAM INVESTOR DAY 8 JUNE 2017
Product & brand portfolio positioned to premium lubricants
(3) Source: Jagger Advisory LLC
Portfolio quality and brand strength3
Unit gross margin $/litre
(1) Premium products: low-viscosity engine oils (0W, 5W)
(2) Source: Kline & Company >20%
Return on sales. Higher than Coca-Cola and Unilever
0%
4%
8%
2011-16 2016-21
Market2 Castrol
Premium products1 volume CAGR
Castrol
2010 2012 2014 2016
Competition
2011-16 2016-21
0%
4%
8%
BP DOWNSTREAM INVESTOR DAY 9 JUNE 2017
Longer term growth
DIGITAL
ACCELERATE LUBRICANTS
LOWER CARBON
MOBILITY
BP DOWNSTREAM INVESTOR DAY 10 JUNE 2017
Continued growth and attractive returns
(1) At 2016 foreign exchange environment
LOYAL CUSTOMERS
DIFFERENTIATED TECHNOLOGY
>$0.6bn
Lubricants growth1 still to come
2016-21
STRONG BRANDS
STRONG GROWTH MARKET AND PREMIUM PRODUCT POSITIONS