Total S.A. (now TotalEnergies SE) — 2019 Form 20-F summary
Reporting period: Fiscal year ended December 31, 2019. Although the request metadata says “2019 Q4,” this filing is an annual report and does not provide a standalone fourth-quarter results breakdown. Financial statements are audited and prepared under IFRS as issued by the IASB and adopted by the EU.
Business and financial performance
Total is an integrated energy group with Exploration & Production, Integrated Gas, Renewables & Power, Refining & Chemicals, and Marketing & Services businesses. Unless stated otherwise, amounts below are in U.S. dollars.
| Metric | 2019 | 2018 | Change / context |
|---|---|---|---|
| Revenue from sales | $176.249bn | $184.106bn | Down 4% |
| Net income, Group share | $11.267bn | $11.446bn | Down 2% |
| Adjusted net income | $11.8bn | Not clearly stated in this excerpt | Down 13% |
| Diluted earnings per share | $4.17 | $4.24 | Down 2% |
| Cash flow from operating activities | $24.685bn | $24.703bn | Broadly flat; working capital was a $1.718bn use of cash |
| DACF | $28.501bn | $26.067bn | Up 9%; management-defined measure before working-capital changes and financial charges |
| Net investments | $17.449bn | $15.568bn | Higher, reflecting acquisitions and investment in LNG and deep offshore |
| Non-current financial debt | $47.773bn | $40.129bn | Up; IFRS 16 lease accounting also affected reported debt metrics |
| Cash and cash equivalents | $27.352bn | $27.907bn | Down slightly |
| Net-debt-to-capital ratio | 20.7% | 15.5% | 16.7% excluding capitalized leases, per management |
The filing does not give a clear consolidated profit-margin figure. Non-Group sales, a separately presented measure, were $200.316bn, down 4% from $209.363bn. Total assets were $273.294bn and Group shareholders’ equity was $116.778bn. The company said working capital was sufficient for present requirements and reported $11.585bn of unused long-term confirmed credit lines.
Material changes and segment trends
- Hydrocarbon production rose 9% to 3,014 thousand barrels of oil equivalent per day, supported by project start-ups and ramp-ups; LNG sales rose 57% to 34.3 million tonnes.
- Lower commodity prices weighed on results: average Brent fell to $64.2/b from $71.3/b; realized liquids prices declined 7%, realized gas prices 20%, and European refining variable-cost margin 9%.
- Exploration & Production adjusted net operating income declined 12% to $7.509bn. Integrated Gas, Renewables & Power was broadly stable at $2.389bn; Refining & Chemicals fell 11% to $3.003bn; Marketing & Services was essentially flat at $1.653bn.
- Operating cash flow remained nearly unchanged despite lower prices, as new projects supported cash generation. Net cash flow was $8.983bn, compared with $8.961bn in 2018.
- Total repurchased 52.4 million shares during 2019 and completed $1.75bn of buybacks under its shareholder-return program. The proposed full-year dividend was €2.68 per share, subject to shareholder approval.
Outlook, risks and unusual items
- Management described the outlook as unusually uncertain: COVID-19 was already affecting demand in early 2020, and the March 6, 2020 breakdown in OPEC–Russia cooperation was followed by a sharp oil-price decline. These are post-year-end developments, not 2019 operating results.
- Management estimated that a $10/b quarterly decrease in average liquids selling prices would reduce adjusted net operating income by about $725m and operating cash flow by about $825m.
- For 2020, the company expected organic production growth above 2%, LNG sales above 30 million tonnes per year, and net investments of about $18bn in a $60/b oil-price environment. It also targeted more than $5bn of cumulative savings in 2020 and completion of a $5bn asset-sale program over 2019–2020. These were forecasts and depended on market conditions and project execution.
- The pre-dividend organic cash breakeven was stated to be below $25/b. Management highlighted flexibility in investment plans, including short-cycle upstream capital expenditure.
- 2019 net income included a negative $561m impact from adjustments, mainly asset impairments including Utica and Chinook in the United States. IFRS 16 was adopted on January 1, 2019 and increased recognized lease debt, affecting year-over-year leverage comparisons.
- Key risks include oil and gas prices, refining margins, foreign exchange, reserves and project execution, cost control, regulation and taxation, geopolitical disruption, financing and liquidity, industrial accidents, and hedging effectiveness. The filing states that guarantees for major LNG and other projects existed but were not considered likely to have a material effect; contractual obligations totaled $217.812bn, including $147.516bn of purchase obligations.
The auditors issued an unqualified opinion on the consolidated financial statements and on the effectiveness of internal control over financial reporting at December 31, 2019. Impairment testing and reserve estimates were identified as critical audit matters.
Important facts for investors to verify
- Review the incorporated audited financial statements and notes for cash-flow definitions, debt and lease treatment, impairment assumptions, and reconciliations of adjusted measures to IFRS results.
- Track the effect of COVID-19, oil-supply developments, and realized prices on cash flow, liquidity, and the stated sub-$25/b breakeven.
- Check delivery and economics of LNG and upstream projects, planned production growth, and the level and flexibility of 2020 investment.
- Confirm completion of asset disposals, savings targets, dividend approval, and buyback commitments against subsequent filings.
- Assess the maturity and nature of debt, lease obligations, purchase commitments, asset-retirement obligations, and project guarantees; compare leverage both including and excluding leases.