Renta 4 | According to information published in the press, the update of Repsol’s (REP) Strategic Plan for the coming years, which will be announced in March, plans to double the size of the lubricants business, exceeding €1 billion in turnover and reaching around €120 million in EBITDA (vs ~€480 million in sales and ~€64 million in EBITDA in 2024), increasing production from around 220,000 tpy to ~320,000 tpy in 2030.
To this end, the oil company is launching the ‘Full Potential’ plan, with an investment of around €80 million in production centres, digitalisation, marketing, product development and internal capabilities, without giving up on continuing to grow inorganically.
The main drivers of growth will come from i) gaining market share in the markets where it already operates, taking advantage of the capacity of the Puertollano plant, which has a capacity of around 135,000 tonnes compared to current production of around 105,000, as well as its joint ventures in Mexico (Bardahl), Indonesia/Singapore (United Oil) and the Philippines (Unioil), which allow production to be brought closer to the markets; and ii) focusing on a more premium product, which will enable it to increase revenue and margins at a time of fierce competition from rivals offering low-priced products.
In this regard, the Company signed an agreement to be the exclusive supplier of lubricants for Moto2 and Moto3 in the MotoGP World Championship between 2026 and 2030.
Assessment: This is positive news that begins to highlight the Company’s objectives and growth drivers for the coming years. In addition, we note that Repsol has already managed to double its EBITDA in lubricants between 2018 and 2024 with a strategy based on international expansion and growth through inorganic operations and joint ventures (Indonesia, Mexico, and the Philippines). We do not expect a significant impact on the share price.Recommendation and Target Price ‘Under review’ (previously Overweight €15.1/share).
