OMV on the Capital Markets

2020 will be remembered for the COVID-19 pandemic and the economic recession, big swings in market sentiment, as well as significant polarization across the sectors. In contrast, OMV’s stock price outperformed the market strongly during the year’s final two months with an impressive rally and ended the year at EUR 33.00. For 2020 overall, OMV performed in line with the sector.

Financial markets

Efforts to stop the spread of COVID-19 infections led to lockdown measures in spring, causing an almost unprecedented economic decline. A number of steps taken by the ECB and the Fed to stimulate the economy led to a minor recovery until June. However, the STOXX 600 index was still down by 13% during the first half of 2020, compared to a 7% decline by the MSCI World Index in the same period.

By September, this recovery was undone by a second lockdown wave, triggered by a resurgence in COVID-19 case numbers. November finally marked a turning point, as the prospect of a vaccine first arose, establishing a powerful recovery trend on global markets. The outcome of the presidential election in the United States and the last-minute EU-UK trade deal provided further support. The year’s second half was dominated by recovery, with the performance of European equities again more subdued than the global average (MSCI World +22% vs. STOXX 600 +11%).

For the year as a whole, global equities still managed to gain value, albeit at a much slower pace than before (MSCI World +14% in 2020 vs. +25% in 2019). In comparison, European stocks suffered a loss (STOXX 600 – 4% in 2020 vs. +23% in 2019).

The oil and gas sector was hit particularly hard by the events of 2020, on a global as well as on a European scale. Before the effects of the pandemic hit, oil prices were already under pressure due to disagreements between OPEC and non-OPEC producers. However, thanks to improving market sentiment and growing commodity price support during the final two months of the year, Europe’s oil and gas stocks were able to stage an impressive comeback, strongly outperforming the wider European and global markets. In November and December, the FTSEurofirst E300 Oil & Gas Index grew by over 35%, compared to a gain of around 17% for the STOXX 600 and MSCI World. The sector was thus able to recover a large share of previously incurred losses. With OPEC+ supporting the near-term oil market, the sector is continuing its recovery during early 2021.

OMV share performance

OMV’s share price performance over the year was in line with that of the European sector, closing 2020 down 34%. Assuming dividend reinvestment, the total shareholder return was minus 29%. Starting the year at EUR 50.08, OMV’s share price came under pressure due to a number of factors. First, disagreements between OPEC and non-OPEC producer countries lowered the oil price. Then there were the adverse economic effects of the lockdown measures in reaction to the outbreak of the COVID-19 pandemic. The sentiment degrading drove OMV’s share price to its lowest value in almost 16 years, to EUR 16.33 in mid-March. However, already by June the stock had already recovered more than half of this loss. The resurgence of COVID-19 cases after the summer led to another decline that lasted into late October. The closing of the Borealis acquisition represented the inflection point. Over the final two months of the year, the share price strongly outperformed markets strongly with a 68% gain, thus fully recovering the losses incurred since summer (MSCI World and STOXX 600 each +17%). The share closed 2020 at EUR 33.00. The OMV’s daily trading volume of OMV shares in 2020 averaged at 621,393 shares (2019: 350,172). At year-end, OMV’s total market capitalization was EUR 10.8 bn compared to EUR 16.4 bn at the end of 2019.

OMV share price performance 2020

In EUR

OMV’s share price moved in line with the sector during the year, which underperformed the wider market. The FTSEurofirst E300 Oil & Gas index decreased by 31%, the Austrian ATX declined by 13%, and the FTSE Eurotop 100 global industry benchmark weakened by 8%. Measured over a five-year period, the return generated by the OMV share strongly outperformed index returns. A 100 EUR investment in OMV stock at year-end 2015 with continuous dividend reinvestment in further OMV stock would have grown by an average annual return rate of 9% to EUR 155 at year-end 2020.

OMV shares: long-term performance compared with indexes

Average annual increase with dividends reinvested ¹

¹ Source: Bloomberg. The annualized return for the holding period is assuming dividends are reinvested at spot price.

Proposed dividend of EUR 1.85 per share for the business year 2020

On September 29, 2020, OMV’s Annual General Meeting approved a dividend of EUR 1.75 per share for 2019 as well as all other agenda items including the new Remuneration Policy for the Executive Board and for the Supervisory Board, the Long Term Incentive Plan 2020, the Equity Deferral 2020 and the elections to the Supervisory Board. The Executive Board will propose a dividend of EUR 1.85 per share for 2020 at the next ordinary Annual General Meeting on June 2, 2021, an increase of 6% over the previous year. The dividend yield, based on the closing price on the last trading day of 2020, amounts to 5.6%.

Dividend policy

OMV is committed to delivering an attractive and predictable shareholder return through the business cycle. According to its progressive dividend policy, OMV aims to increase dividends every year or at least to maintain the level of the respective previous year.

OMV shareholder structure

OMV’s shareholder structure remained relatively unchanged in 2020 and was as follows at year-end: 43.1% free float, 31.5% Österreichische Beteiligungs AG (ÖBAG, representing the Austrian government), 24.9% Mubadala Petroleum and Petrochemicals Holding Company (MPPH), 0.4% employee share programs, and 0.1% treasury shares.

Shareholder structure

In %

An analysis of our shareholder structure carried out for the end of 2020 showed that institutional investors held 28.4% of OMV’s shares. At 28%, investors from the United States made up the largest regional group of institutional investors. The proportion of investors from the United Kingdom amounted to 19%, while German and French shareholders made up 9% and 8%, respectively. The share of investors from Austria was 7%, and Norwegian investors represented 4%.

Geographical distribution of institutional investors

In %

OMV Aktiengesellschaft’s capital stock amounts to EUR 327,272,727 and consists of 327,272,727 no-par-value bearer shares. At year-end 2020, OMV held a total of 297,846 treasury shares. The capital stock consists entirely of common shares. Due to OMV’s adherence to the one-share, one-vote principle, there are no classes of shares that bear special rights. A consortium agreement between the two major shareholders, ÖBAG and MPPH, contains arrangements for coordinated action and restrictions on the transfer of shareholdings.

Environmental, Social, and Governance (ESG) performance

OMV places great importance on working with ESG rating agencies. OMV is committed to acting responsibly towards the environment and society. Our accomplishments in this regard are reflected in further improvement of our already robust ESG performance in 2020. OMV received the highest “AAA” score in the MSCI ESG Ratings assessment for the eighth year in a row. This places OMV among the best 10% of oil and gas companies. OMV also maintained its Prime Status in the ISS ESG rating with a score of B–. This positions us among the 5% best oil and gas companies in terms of ESG performance. OMV was also included in the SAM Sustainability Yearbook 2021, based on its assessment in the SAM Corporate Sustainability Assessment (CSA) in 2020. The SAM Corporate Sustainability Assessment (CSA), established by RobecoSAM, is now issued by S&P Global. OMV was also recognized by CDP with a score of A– (Leadership) in the Climate Change category, earning us a place among the 20 best oil and gas companies in this ranking. We were also assigned the highest Level 4 rating for carbon management quality by the Transition Pathway Initiative. Besides these outstanding achievements, OMV has maintained its inclusion in several ESG indexes. Most notably, OMV was included in the Dow Jones Sustainability Index (DJSI World) for the third year in a row as the only Austrian company in the index. The DJSI World represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index based on long-term economic, environmental and social factors. OMV was also included in the S&P Europe 350, which like the DJSI is based on the SAM CSA OMV was also reconfirmed as a constituent of two MSCI indexes, the ACWI ESG Leaders Index and the ACWI SRI Index. Furthermore, OMV was affirmed as a member of the FTSE4Good Index Series, which is used by a wide variety of market participants to create and assess responsible investment funds. OMV was included in the Euronext Vigeo Europe 120 index and Euronext Vigeo Eurozone 120 index, based on its ratings by V.E., an Affiliate of Moody’s, and also maintained its inclusion in the STOXX® Global ESG Leaders index, based on OMV’s assessment by Sustainalytics, and in the ECPI® indexes. After being reappraised by EcoVadis – a platform analyzing the ESG performance of suppliers – OMV maintained its Silver supplier status.

Solid credit ratings

The OMV Group is evaluated by rating agencies Moody’s and Fitch. On March 20, 2020, Moody’s confirmed OMV’s A3 issuer rating while downgrading the outlook to negative. Moody’s confirmed this rating in February 2021. On March 13, 2020, Fitch confirmed OMV’s rating of A– and revised the outlook to negative. Fitch confirmed this rating in August 2020. The rating affirmations reflect OMV’s earnings resilience thanks to the economic integration of the Upstream and Downstream business segments, along with a track record of conservative financial policies. The outlook revisions were a consequence of the adverse macroeconomic environment in combination with the greater debt assumed to fund the acquisition of the additional share in Borealis.

Analyst coverage

At the end of 2020, OMV was covered by 20 sellside financial analysts who regularly publish research reports on the company. This ensures OMV good visibility in the financial community. At the end of 2019, 59% of these analysts had issued a “buy” recommendation, 32% advised “hold,” with the remainder proposing “sell.” However, as 2020 came to a close, there were no analysts left that recommended selling OMV shares. The share of analysts recommending that their clients buy OMV stock had risen to about two-thirds, with about one-third issuing a “hold” recommendation. Following the adverse economic developments of 2020, the average target price for OMV dropped to EUR 34.49 at the end of 2020, from EUR 56.10 per share a year earlier.

Investor Relations activities

Even during the COVID-19 pandemic, ensuring active, candid dialogue with the capital market remains a top priority at OMV. By switching to virtual meetings, the Investor Relations department fulfilled its mission to provide comprehensive insight into OMV’s strategy and business operations to all capital market participants, thereby guaranteeing equal treatment of all stakeholders. In this way, OMV’s Executive Board was able to stay in constant dialogue with investors and analysts in Europe, North America, and Asia throughout 2020, regardless of the restrictions imposed to control the pandemic.