The Shareholders' Newsletter Spring 2023

Chairman’s message

CHAIRMAN’S MESSAGE

© Khanh Renaud

“The Board of Directors proposes to the Shareholders’ Meeting,the distribution of a final 2022 dividend of €0.74 per share, an increase of 6.5% for the ordinary 2022 dividend to €2.81 per share, plus the special dividend of €1 per share paid in December 2022. In addition, the Board of Directors confirmed an increase in interim dividends of more than 7% to €0.74 per share.”
Patrick PouyannéChairman and Chief Executive Officer of TotalEnergies

Dear‑Shareholders,

Once again in 2022 we demonstrated the relevance of our multi-energy model and the quality of our global portfolio. Over the year, strong tensions emerged on oil and gas prices, generated by the international context and the war in Ukraine. Our Company mobilized to contribute to energy security in Europe, with a 15% increase in our LNG sales, owing to our unique position on the continent. Strong oil and gas prices and refining margins in supply-constrained markets, created a favorable environment for TotalEnergies.

In 2022, the Company generated $45.7 billion of cash flow. IFRS net income was $20.5 billion including nearly $15 billion in provisions related to Russia (for and adjusted net income of $36.2 billion). Return on equity was 32% and return on capital employed was 28%, the best result among the Majors.

In 2022, the iGRP segment posted adjusted net operating income of $12 billion and a cash flow of $11 billion. The Company took full advantage of its global LNG portfolio. The Integrated Power activity (covering the electricity and renewables business) generated $1 billion of cash flow over the year, with a production of 33 Twh, up 57%, and nearly 17 GW of gross renewable capacity installed at the end of 2022. In order to provide shareholders with a better understanding of the Company’s growth strategy in LNG and electricity/renewables, the Board of Directors decided that, as from the first quarter of 2023, iGRP’s results will separately report the contributions of the Integrated LNG and Integrated Power activities.

Exploration & Production made a strong full-year contribution of $26 billion to the Company’s cash-flow. Two new discoveries, in Cyprus and Brazil, add to the discoveries already made in Namibia and Suriname in 2022.

Downstream achieved historic performance in 2022, with $8.9 billion in adjusted net operating income and $10.1 billion in cash flow, supported by a refinery utilization rate of 82% that fully captured high refining margins. TotalEnergies continues to grow in petrochemicals with the launch of the Amiral project, a worldclass integrated complex in Saudi Arabia.

In line with the policy announced in September 2022, TotalEnergies implemented a balanced cash allocation in 2022 between shareholders (37.2% payout), investments ($16.3 billion or 36% of cash-flow, including $4 billion in low-carbon energies) and deleveraging (reducing net debt by $12.2 billion, or 27% of cash flow) to end 2022 with gearing of 7%. In addition, the Company has ensured balanced profit sharing with its employees (exceptional bonus and wage increases taking into account the inflation rate observed in the various countries) and with its customers through rebates on various energy products to mitigate the increase in energy prices. Governments have also benefited from more than $33 billion in taxes worldwide, more than double the amount in 2021, mostly paid to producing countries.

In view of the growth in structural cash flow forecast for 2023 and the share buybacks carried out in 2022 (5% of the share capital), the Board of Directors proposes to the Shareholders’ Meeting, the distribution of a final 2022 dividend of €0.74 per share, an increase of 6.5% for the ordinary 2022 dividend to €2.81 per share, plus the special dividend of €1 per share paid in December 2022. In addition, the Board of Directors confirmed a shareholder return policy for 2023 targeting a pay-out between 35% 40%, which will combine an increase in interim dividends of more than 7% to €0.74 per share and share buybacks of $2 billion in the first quarter.

Thank you for your loyalty.

Patrick Pouyanné

Chairman and Chief Executive Officer of TotalEnergies