Uruguay or Greece ? Marine CARRE - Fadil DAAKIR - Matthieu DIWO - Miloš IVKOVIĆ INSEEC FINANCE 03 – December 2013
Nov 19, 2014
Uruguay or Greece ?
Marine CARRE - Fadil DAAKIR - Matthieu DIWO - Miloš IVKOVIĆ
INSEEC FINANCE 03 – December 2013
Company profile
Repsol S.A., through subsidiaries, explores and produces crude oil and natural gas, refines petroleum.
CEO Antonio Brufau Niubo
repsol.com
Financial report
2012 2013 (e) 2014 (e)Turnover 58.924.000 57.806.000 58.512.000EBITDA 6.956.000 6.861.000 6.828.000EBIT 4.321.000 4.097.000 4.101.000Debt 12.772.000 10.517.000 9.730.000Net income 2.135.000 3.212.000 2.238.000Market Capitalisation - 25.124,68 bn -Free float - 904.10 bn -Earnings per share (EPS) 2,18 2,21 1,57Dividend 0,97 0,99 1,00PER 11,58 11,96 12,35
© Thomson-Reuters
Company ratings
Long-Term Debt ratings
Fitch Moody’s Standard & Poor’s Dagong
BBB- Baa3 BBB- -
Short-Term Debt ratings
Fitch Moody’s Standard & Poor’s Dagong
F-3 P-3 A-3 -
repsol.com
Matrice de Porter
Threat of new competitors :Weak.
The weight of capital hold by Repsol is huge, the company is amongst the 100 richest companies in the world.
Bargaining power of clients : Weak.
Everybody is suffering from constantly rising high prices.
Threat of Substitutes : High.
Rising of the sustainable development with the green energy, electric cars…
Bargaining power of suppliers : Weak.
Repsol holds the productivity process. The company has a strong power over
sucontractor in case of outsourcing.
Plenty of competitors on the market, many of them are listed amongst the 100 wealthiest companies in the world. Strong battle to get and keep market shares, and for new crude oil field (ex : Consortium Libra = Petrobras got 40
% in October 2013)
Key success
STRENGHTS WEAKNESSES
1.Spanish oil and gas company with global operations
2.Strong distribution
3.Strong brand
4.Partnership with Honda racing in MotoGP
5. Employing over 40,000 people globally
6.Mergers and acquisitions have strengthened position
7. Innovative culture and philosophy
8. Unique products help distinguish REPSOL from competitors
9. Strong management
1.Declining oil reserves
2.Environmental hazards
3. Work inefficiencies (an inefficient work environment means
that REPSOL’s goods and services are not being utilized
properly)
4.Bad acquisitions (can hurt REPSOL by increasing their costs
and reducing the value of their combined businesses.
Acquisitions can also distract from the core business and merge
cultures that don’t complement each other… …)
Strategic gap
OPPORTUNITIES THREATS
1.New oil explorations
2.Expansion of refineries
3.Processed Petrol
4.Emerging markets : are fast growing regions of the
world that enable REPSOL to quickly expand
5.International markets offer REPSOL new opportunities
to expand the business and increase sales
6.New products : can help REPSOL to expand their
business and diversity their customer base
7. New markets : allow REPSOL to expand their business
and diversify their portfolio of products and services.
1.Government regulations
2.High Competition/International competitors
3.Environmental laws
4.Fuel free automobiles
5.Development of new resources
6.Volatile currencies : make REPSOL’s investments
difficult, because costs and revenues change so rapidly
7.Mature markets : are competitive. In order
for REPSOL to grow in a mature market, it has to
increase market share, which is difficult and expensive
8.Changes to government rules and regulations can
negatively affect REPSOL
9.The availability of substitute products
URUGUAY GDP: $ 49,06 bn
Capital Montevideo
Area 175.016 km²
Currency 1,00 EUR = 28,42 UYU
Language Spanish
Population 3.447.778
HDI 0.851 (43th)
URUGUAY
WTO Member since 1995
No restrictions on: Imports or repatriation of
capital Foreign-exchange market Contracts in foreign currency Equal treatment to local and
foreign investors
Deloitte report (2012)
Ratings / Rates
Sovereign Long-Term Debt ratings
Fitch Moody’s Standard & Poor’s Dagong
BB Ba1 BB BB+
Sovereign Short-Term Debt ratings
Fitch Moody’s Standard & Poor’s Dagong
F3 - A-3 BB+
countryeconomy.com
Tax rates
Income tax rate Corporate tax rate Sales tax
25 % 25 % 22 %
Debt ratio
2011 2012 (e)2013 (e)2014 (e)20150
10
20
30
40
50
60
70
33.37
53.55 53.2556.94
60.80
19.45 22.217.3
26.9 27.36
GDP/Debt (USD billion)GDP
Debt
econstats.com
Main trade partners
Massachussets Institute of Technology
EXPORT / IMPORT
Unemployment
2011 2012 2013 (e)2014 (e)2015 (e)2016 (e)2017
6,1 % 6 % 6,1 % 6 % 6 % 6 % 6 %
Inflation(Consumer Price Index)
2011 2012 2013 (e)2014 (e)2015 (e)2016 (e)2017
8,1 % 7,5 % 6,6 % 6 % 6 % 6 % 6 %
Consumer Price Index or CPI measures changes in the prices paid by consumers for a basket of goods and services.
Interest rate
Private sector
doingbusiness.org
Business ranking
Democracy Index
2011 2012 (e)20130
1
2
3
4
5
6
7
8
9
10
8.17 8.17 8.2
3 2.83.2
Democracy Index Corruption Index
The Economist & Transparency International
Insecurity
One homicide per day (Montevideo)
Hyperviolence: Local drug gangs
Increase of local drug consumption
Increase of drug consumption amongst high school
students in Uruguay went up 50% in 10 years
Important transhipment point for illicit narcotics
(mexican and colombian drug traffickers)insidecrime.com
Prices
Value of oil imports (USD billion)
2011 2012 (e)2013 (e)2014 (e)20150.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2.46
2.84 2.92 2.97 2.99
Petrol prices in 2013 (USD)
Aug. Sep. Oct. Nov.1.65
1.7
1.75
1.8
1.72 1.72
1.75
1.78
globalpetrolprices.com
Competitors
GREECE GDP: $ 249,10 bn
Capital Athens
Area 132.000 km²
Currency Euro
Language Greek
Population 11.000.000
HDI 0.860 (29th)
GREECE
WTO Member since 1995
No restrictions on: Imports or repatriation of
capital Contracts in foreign currency Equal treatment to local and
foreign investors
Export of Forex must be made through a licensed commercial bank
Deloitte report (2012)
Ratings
Long-Term ratings
Fitch Moody’s Standard & Poor’s Dagong
B- Caa3 B- CC
Short-Term ratings
Fitch Moody’s Standard & Poor’s Dagong
B C B- CC
countryeconomy.com
Tax rates
Income tax rate Corporate tax rate Sales tax
40 % 24 % 23 %
Debt ratio
2011 2012 (e)2013 (e)2014 (e)20150
50
100
150
200
250
300
350
400
208.53
249.10211.94
174.48137.04
355.2
303.9
373.01
306.91
234.2
GDP/Debt (USD billion) GDP
Debt
tradingeconomics.com & europa.eu
Main trade partners
EXPORT / IMPORT
Massachussets Institute of Technology
Unemployment
2011 2012 2013 (e)2014 (e)2015 (e)2016 (e)2017
21,4 % 24,3 % 27,6 % 25,7 % 24,0 % 20,0 % 17,0 %
Inflation(Consumer Price Index)
2011 2012 2013 (e)2014 (e)2015 (e)2016 (e)2017
7 % 4 % -0,8 % -0,4 % 0,3 % 1 % 2 %
Interest rate
Private sector
Business ranking
doingbusiness.org
Greece is not ranked.
Democracy Index
2011 2012 (e)20130
1
2
3
4
5
6
7
8
9
10
7.65 7.65 7.6
6.67.2 7.5
Democracy Index Corruption IndexThe Economist & Transparency International
Insecurity
Increase of right-wing movement : Golden Dawn
Increase of euro-skepticism
New right-wingers deputies in Greek parliament
Seven out of 10 people aged between 18 and 24 say they want to
emigrate
People are scared they'll lose their savings if they leave the Eurozone.
Migrants are being attacked by right-wing thugsinsidecrime.com
Prices
Value of oil imports (USD billion) Petrol prices in 2013 (USD)
2011 2012 (e)2013 (e)2014 (e)201519.5
20
20.5
21
21.5
22
22.5
23
23.5
24
24.524.09
22.4
21.77
21.25 21.1
Aug. Sep. Oct. Nov.2.15
2.2
2.25
2.3
2.35
2.4
2.342.36
2.3
2.25
globalpetrolprices.com
Competitors
Uruguay or Greece ?
Population
indexmundi.com
Index Percent
Natural increase + 0,46 %
Fertility rate 1,89 child/woman
Life expectancy 76,33 years
Index Percent
Natural increase + 0,18 %
Fertility rate 1,28 child/woman
Life expectancy 79,24 years
Mix Marketing
Dani Pedrosa is a motorcycle ricer, a real winner. He’s been sponsored by Repsol for a
while.
No discount or anything else, petrol is petrol, you have to pay the full price.
PRICE (at station)PRODUCT
PLACE
PROMOTION
Uruguay : Here we go
WHY URUGUAY ?
Emerging country in petrol world (big oilfields)
Decrease of unemployment Rising of petrol prices Increase of CPI and imports Repsol is also in all South
America except Uruguay and Paraguay: quick and easy
Good politic context Well ranked as "ease of doing
business"
WHY GREECE IS PUT ASIDE ?
Systemic crisis Strong economic instability Strong politic instability Mass violence Increase of unemployment Decrease of petrol prices Decrease of investments Decrease of loans to private
sector Unemployment is too high Prices and imports are going
down.
Forecast
Income statement dec. 12 dec. 14 %Revenues 58 924 000 60 270 596 2%
COGS 8 190 000 8271900 1%SG&A 45 848 000 48 867 147 7%
EBITDA 4 886 000 3 131 548 -36%Taxes 1 581 000 1 013 298 -36%
Net income 2 135 000 2 118 249 -1%
2012 2011 2010 2009 2008 Evo.Revenues 58 924 000 61 502 000 55535000 4582700057740000 Variation 0,96 1,11 1,21 0,79 1,02Expenses 44 471 000 42 904 000 36184000 3143300040861000 Variation 1,04 1,19 1,15 0,77 1,04