Engine No. 1 Activist Presentation Deck
This strategy has contributed to a decade of value
destruction
...
ExxonMobil invested over $300 billion in capex from 2011-2020, which failed to
produce even an equivalent amount of value in undiscounted dollars
ā
ā
In US$ Billions
We estimate that unproductive capex has destroyed at least ~$175 billion in value,
using current prices and before allocating any cost of capital
A Decade of Capital Destruction at ExxonMobil
$700
$600
$500
$400
$300
$200
$100
$377
Starting Asset Value
(EV as of 12/31/2010)
$309
Investment in assets
(Capex 2010-20)
$200
Capital returns
(Dividends + Buyback,
2010-20)
$486
Starting Asset Value +
Investment - Capital
Return
$312
Ending Asset Value I
(EV as of 3/31/21)
Chart Source: ExxonMobil 10-Ks for Capex, Dividends and Share buybacks. Pricing data from Bloomberg. Enterprise Value (EV) taken as a proxy for Asset
value. EV chosen as of 3/31/2021 so as to not penalize the company for the poor commodity price environment (EV as of 12/31/2020 was ~$60B lower at
$250B). Also, while other factors (such as investor sentiment & oil prices) also play a role in value creation, above analysis shows the scale of capital
expenditure and destruction in asset value. Chart does not take into account any cost of capital, which would increase the level of value destruction that would
accrue to both equity and debt holders.
$40+ share of
value destruction
$174
Potential
Value destruction
REENERGIZE
EXXON//
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