We’re starting to deliver the synergies inside that. We see tremendous opportunity to introduce biofuels into it to enhance margins. We’re probably going to beat the synergies on that. The company was not as efficient as we thought it might have been so that delivers more opportunity as well. We’ll have Lightsource bp coming in that will allow us to grow that business and absorb that EBITDA as well. And in Emma’s business, we do continue to see really strong growth despite recessionary forces and convenience, 9% year-on-year despite recessions, despite COVID, you name it. We’ve got a fantastic team that we brought in, that’s really driving growth in that space as well. EV, earnings positive in 2 countries. We’ll get everything to breakeven by 2025 as well.
And of course, we’ll tighten. We’ll really tighten the focus on origination, not spend as much money on origination and really focus on what we’re going to deliver moving forward. So I feel comfortable. It’s a bold target to hit 3 or 4, but I feel comfortable with it based on what we’ve done and I look forward to reporting back to you on that over the coming quarters. Kate?
Katherine Thomson: Thanks. Michele, thanks for your question. Let me just step back a minute and just make sure everyone is still very clear that the balance sheet and the credit rating, the stronger investment grade credit rating remains the second priority. That’s fundamental to us. I think resilience of the company from a financial position is more than just net debt. And I like the way that the credit rating agencies think about the ratio of the cash that we’re generating versus the total of our debt like liabilities. I think that’s a good measure of resilience. The change we’re making today, which is moving away from targeting progress within the rating to being clear around progress within the metrics is I’ve got control over that.
We’ve got a great relationship with the rating agents. We speak to them very regularly, but we can’t control the rating outcome and neither should we. We did get upgraded by Fitch in November. We remain on positive outlook with S&P and Moody’s. So let’s see. We are well within the metrics for an upgrade, but that’s it for them to decide. But from my perspective, it’s around making sure that we are maintaining a balance sheet that is resilient, allows us to see through volatility, allows us to tolerate a perspective of environment that is going to move but also cash flows that are going to move around within quarter. So you’ve seen from the guidance where we’re guiding to heavier CapEx in the first half and heavier divestments in the second half.
You’re going to see our net debt move around. That’s okay. We strengthened it so significantly in the last few years, down to this level, which is the lowest in a decade. That gives us a lot of confidence that we can tolerate that level of momentum. So I’m not going to put a net debt target out. I’m going to tell you I’m comfortable with where it sits right now and our ability to tolerate movement, and remind you that we will continue to obviously be putting around 20% of our surplus cash flow to the balance sheet. So it’s going to continue to deleverage just at a slightly slower pace.
Biraj Borkhataria: It’s Biraj Borkhataria, RBC. I’ve got two questions. The first one is on your EBITDA targets over the — more for 2030 than 2025. In the footnote, when you presented that in the past, you’ll say CapEx at the higher end of the range. And in ’22, you were at 16%, ’23, 16% and now you’re guiding to the middle for ’24 and ’25, so basically half the plan. So could you talk about the sort of, let’s say, EBITDA sacrifice for not spending that extra $2 billion, and where it’s coming from and how to think about that? And then the second question is on the dividend. So you referenced the 4% at 60, are you looking to explicitly link that to the buyback scheme? You’re obviously buying back shares faster than any of your peers as your chart showing? Or do you see the most 2 separate things and your preference for the buyback here?
Murray Auchincloss: Great. I’ll tackle the first one. Kate, you grab the second one. So the long-term guidance on capital frame has not changed, $14 billion to $80 billion through the decade. What we are changing is we’re getting more disciplined with ’24 and ’25 year, tightening in on a $16 billion range for these 2 years. I think the way that I relate to this, Biraj, is that we’ve done a lot of acquisitions recently, EDF, Archaea, TravelCenters of America, Lightsource. These are big transactions. They represent north of 2% of our overall value, which is similar to some of the big transactions you’ve seen in the United States from some of our competitors on an equity basis. And, it’s injecting a lot of people into the business.
19,000 alone inside TravelCenters of America. So it’s time now to pause on acquisitions. We might do a few more, but to pause on them and instead focus on that hard work of integrating the systems, the people, the processes, the cultures of these entities, and that’s really what we’re focused on right now. As far as an EBITDA sacrifice, I remain very comfortable with our 2025 targets I think in a $0.20, $0.30. We haven’t really deviated from the ’25 to ’30 time frame so it’s not anything material. So I think the latest numbers adjusted give or take, on our 46 to 49 target in 2025. We’re at about 44. So I’m feeling pretty good about that as well. Strong, strong growth inside the upstream. And so I feel comfortable about ’25. No change to 2030 at this stage.
And in due course, we’ll update the market on what we’re thinking about for targets for 2030. Those, of course, are aims right now, Biraj. Hope that helps. And over to Kate.
Katherine Thomson: Thanks, Biraj. So on dividend, look, making sure that it’s a resilient dividend, is really important to us, which is why we are keeping it as our first priority in the financial frame today. The reason we haven’t created and I don’t think we should create a link to share buyback is, of course, with the share buyback progress, the share count reduction occurs over time. We’ve got a very significant decrease in our share count reduction to date. That’s going to continue, given what we’ve just laid out today. That gives the Board an ability to move the dividend per share up. But of course, the Board is going to take into consideration facts and circumstances every quarter, as it looks at the dividend, which will be depending on cash flow generation to date, what the outlook looks like, environment momentum.
And they will take that decision as and when we get to each quarter. I don’t think linking it to a particular buyback share count reduction is helpful because it removes flexibility. We want to retain flexibility so that when we’re considering it as a Board, we can take into consideration that basket of considerations that will allow us to make the right decision for the company and the shareholders.
Murray Auchincloss: I think balance point is the key, isn’t it? The thing that we feel really, really anchored to is that balance point of affordability on the dividend at . And of course, share count reduction helps drive that balance point down, but balance point is what we’re obsessed about. Chris?
Christopher Kuplent: Chris Kuplent from Bank of America. Two quick questions. Murray, you’ve mentioned in your speech, Aker BP and some of the value creation you’ve now achieved off balance sheet with Angola as well. And I wonder whether you can contrast against that, how you’re bringing Lightsource into fully your realm of control? We’ve seen the asset swap with Equinor, TA and all those acquisitions were fully owned, fully in control. So maybe you can compare and contrast a little bit why it matters to you in those situations? And my second question, Kate, I noticed the $14 billion 2-year guidance is based on current market conditions. Where do you — how do you feel about current market conditions? I noticed that, yes, refining margins have come down a lot, but they still sit above your balance point comment, Brent, likewise. Give us a little bit of a feel how comfortable that current market condition comment can be interpreted?
Murray Auchincloss: Yes. Great. Okay. Chris, I’ll start and Kate, can go second. So Aker BP, a fantastic transaction, unique circumstances associated with it. We were in declining assets late in life, made sense to exit the basin. That north — the counterpart was in growth mode, but they needed cash generation to be able to grow. They just didn’t have enough cash generation themselves. So we found after many years of discussions that we could bring those two companies together and create something pretty special. I don’t know what the current numbers are, but we — it was worth about $1 billion when we did the transaction. I think it’s up around $3 billion or $4 billion now. So tremendous value creation for both sides. No loser inside that one.
