CONTENT I. Executive summary 4 II. Upstream 18 III. Downstream 34 IV. Financials 52 V. Appendix 63 2
KEY GOALS AND MESSAGES: Around USD 2BN CCS GROUP EBITDA in 2015 at 60 USD/bbl environment with GROUP/FINANCIALS resilient integrated business model USD 1.5-1.8BN ORGANIC CAPEX (2015) with Upstream focus, financed from Operating…
I. EXECUTIVE SUMMARY 4
Executive Summary MOL GROUP: A MID-CAP INTEGRATED INTERNATIONAL OIL&GAS COMPANY INTEGRATED BUSINESS MODEL COMPANY OVERVIEW Market capitalization - end of 2014; bn USD 4.7 Countries of operation 40 2014FY CCS EBITDA (USD BN)…
Executive Summary UPSTREAM: GROWING INTERNATIONAL PORTFOLIO WITH STRONG, STABLE CEE PRESENCE KEY DATA OF 2014 13 Exploration and 8 Production Countries Organic Reserve Replacement Ratio at 103% in 2014 Low cost producer: avg. unit…
Executive Summary INCREASING ORGANIC PRODUCTION AND ACTIVE PORTFOLIO MANAGEMENT FOR FURTHER GROWTH BALANCE RISK AS WELL AS SEEK NEW ACCRETIVE GROWING PRODUCTION EXPLORATION AND DEVELOPMENT OPPORTUNITIES Gradual ramp up of…
Executive Summary DOWNSTREAM: DEEP INTEGRATION GUARANTEES EXTENDED MARGIN CAPTURE CLEAN CCS-BASED DS UNIT EBITDA(1) (USD/BBL) 14 Peer range 12 MOL-Group MOL-Group ex. INA 10 8 Bratislava 6 Danube Rijeka 4 Sisak 2…
Executive Summary TARGETS USD 500MN ADDITIONAL IMPROVEMENT BY 2017 ON A 2014 BASIS DOWNSTREAM FREE CASH FLOW GENERATION BY 2017 (MN USD)1 Key Contributors 1 2 USD 350mn asset & market 1300 - 1400 1 efficiency improvement mostly…
Executive Summary NATURAL GAS TRANSMISSION ACTIVITY PROVIDES STABLE RETURNS COMPETITIVE ADVANTAGES & MAIN DRIVERS Sole transmission system operator license Strategic location in the heart of CEE region for potential transit…
Executive Summary FINANCIALS: STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: organic CAPEX financed from operating cash flow 1.3X NET DEBT TO EBITDA & BELOW 20% NET GEARING (year-end 2014) Around USD 2BN CCS…
Executive Summary RESILIENT BUSINESS MODEL CAPABLE OF GENERATING USD 2BN IN 2015, EVEN AT 60USD/BBL ENVIRONMENT EBITDA TARGET AND SENSITIVITY CAPEX PLAN MOL is relatively well shielded against the oil Scope adjustments and potential…
Executive Summary DIVIDEND: PREDICTABLE PAY-OUT WITH BALANCE SHEET STABILITY IN THE FOCUS DIVIDEND HISTORY OF LAST 3 YEARS (HUF BN) AND KEY PRINCIPLES 60 Pay out dividend to Special dividend shareholders whilst Regular dividend…
Executive Summary MOL EXECUTIVE TEAM, TOP MANAGEMENT AND INCENTIVE SCHEMES EXECUTIVE BOARD MANAGEMENT INCENTIVE SCHEMES Stable and Proved SHORT TERM INCENTIVES: Executive Management Maximum opportunity between 0.85x and 1x of base…
Executive Summary SHAREHOLDER STRUCTURE MOL shares are listed on the Budapest, Luxembourg and Warsaw Stock Exchanges. Our depository receipts are traded on Londons International Order Book and OTC in the USA. SHAREHOLDER STRUCTURE…
Executive Summary CORPORATE COMMITMENT TO SD & HSE IMPROVEMENT SUSTAINABLE DEVELOPMENT FRAMEWORK AT DJSI PERFORMANCE OF MOL GROUP MOL GROUP 100 Sustainable Development Framework: All 90 levels of the organization have a focus on…
II. UPSTREAM OPERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel in November 2014 18
Upstream CONTINUE PRODUCTION INCREASE AND UTILISE ALL OPPORTUNITIES THAT ARISE FROM CURRENT LOWER OIL PRICE ENVIRONMENT 105-110 MBOEPD production targeted for 2015 Substantial REDUCTION IN CAPEX SPENDING compared to original plan…
Upstream PRODUCTION ACTIVITIES IN 8 COUNTRIES Provide a good basis for the next years CEE total Production (2014): 98 mboepd Russia Reserves (SPE 2P 2014): 555 MMboe Reserves: 75 MMboe Croatia, Hungary Production: 8 mboepd…
Upstream 103% ORGANIC RESERVES REPLACEMENT RATIO IN 2014 With further 630 MMboe1 exploration potential from current assets 103% ORGANIC RESERVES REPLACEMENT RATIO IN ABOVE 100% RESERVE REPLACEMENT RATIO 2014 TARGETED IN 3 YEARS…
Upstream CONTINUOUS INCREASE OF PRODUCTION IN THE FOLLOWING YEARS Targeting 105-110 mboepd this year PRODUCTION OUTLOOK (RISKED, ENTITLEMENT BASED) 105-110 MBOEPD TARGET FOR 2015 Accelerated field development Without KRI…
Upstream SUBSTANTIAL REDUCTION IN CAPEX SPENDING COMPARED TO ORIGINAL PLAN OF OVER USD 1BN Utilise all opportunities and make all necessary steps the oil price environment implies GEOGRAPHICAL BREAKDOWN OF CAPEX SPENDING ORGANIC…
Upstream KURDISTAN R.I.: COMMERCIAL PRODUCTION FROM BOTH BLOCKS Gradual increase expected in the coming years KURDISTAN REGION OF IRAQ (15 MMBOE*) 3 commercial discoveries (Bijell, Bakrman, Shaikan) Field Development Plan…
Upstream AKRI BIJEEL: INTENSIVE DRILLING CAMPAIGN TO FULLY UNDERSTAND BLOCK VALUE Complete the information acquisition campaign on Akri-Bijeel, with more focus on Triassic AKRI BIJEEL WORK PROGRAMME Akri-Bijeel in appraisal/early…
Upstream NORTH SEA: A STRATEGIC STEP TO CREATE NEW HUB In a lower risk offshore operation which should serve as a hub of know-how technology STRATEGIC CONSIDERATIONS Strategic step to enhance offshore experience and create a new hub…
Upstream SIZEABLE MID-TERM PRODUCTION With 8-9 mboepd contribution already in 2015 NORTH SEA (30 MMBOE) OVERVIEW OF MAIN PRODUCING ASSETS Successfully entered the region in 2014 established local Block W.I. Operating Other…
Upstream CEE: MITIGATE THE PRODUCTION DECLINE AND MAXIMISE CASH FLOW Well optimisation and EOR projects target growing production in Croatia HUNGARY+CROATIA (124+194 MMBOE) - PRODUCTION OUTLOOK 80 Unique know-how and well developed…
Upstream HUNGARY: KEEP PRODUCTION DECLINE RATE BELOW 5% Along with several efficiency improvement measures to maximise cash-flow HUNGARY (124 MMBOE) More than 75 years of E&P experience with more than 40 years of EOR/EGR…
Upstream PAKISTAN: OVER 15 YEARS OF SUCCESSFUL OPERATION Continue field development of TAL block and fully explore upside of Karak, Ghauri and Margala North blocks HIGHLIGHTS AND KEY FOCUS AREAS 8 discoveries since 1999 in 3…
Upstream CIS: MOVING FORWARD TOWARDS VALUE MONETISATION Successful appraisal programme closed on FED with additional 24 MMboe reserve booking RUSSIA (75 MMBOE) STILL A CORE COUNTRY WITH GROWTH POTENTIAL Portfolio restructured after…
Upstream M&A: BALANCE RISK AS WELL AS SEEK NEW ACCRETIVE EXPLORATION AND DEVELOPMENT OPPORTUNITIES PURSUING OPPORTUNITIES TO FURTHER BALANCE ENHANCE INTERNATIONAL EXPLORATION PORTFOLIO OUR COUNTRY RISK PROFILE OMAN, NORTH PAK,…
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III. DOWNSTREAM OPERATION 34
Downstream CEE STRONGHOLD: INTEGRATED OPERATION OF COMPETITIVE ASSET BASE Deep downstream integration instead of pure refining concept guarantees extended margin capture on our landlocked markets Delivered USD 500mn Clean EBITDA…
Downstream DEEP DOWNSTREAM INTEGRATION GUARANTEES EXTENDED MARGIN CAPTURE IN OUR LANDLOCKED MARKETS DOWNSTREAM INTEGRATION (FUELS)1 23% Other wholesale 45% Bratislava Captive wholesale Bratislava Danube 89% 79% Rijeka…
Downstream REFINING ASSET COMPLEXITY AND PROFITABILITY ABOVE PEER GROUP AVERAGE REFINERY NELSON COMPLEXITY OF THE PEER CLEAN CCS-BASED DS UNIT EBITDA2(USD/BBL) GROUP1 14 6.1 Mtpa 14 Peer range 11.5 8.1 Mtpa MOL-Group 12 10.6…
Downstream MID-CYCLE REFINERY MARGIN SUPPORTED BY LOWER OIL PRICE ENVIRONMENT Demand growth of CEE is still well ahead of Western-Europe GROUP REFINERY MARGIN EXPECTATIONS (USD/BBL) MOTOR FUEL DEMAND CHANGE (2014/2013, %) 5…
Downstream MOL DELIVERED SIGNIFICANT IMPROVEMENT IN A PERSISTENTLY TOUGH MACRO THROUGH THE IMPLEMENTATION OF THE EFFICIENCY IMPROVEMENT PROGRAM GROUP REFINERY MARGIN VS CLEAN CCS EBITDA DOWNSTREAM NORMALIZED CASH FLOW (MN USD) MOL…
Downstream CLEAR EVIDENCE OF SUCCESSFUL NEW DOWNSTREAM PROGRAM DELIVERY (USD 500MN) NDSP DELIVERY 2011 VS 2014 (MN USD) 160 140 869 Petchem margin Impact of IES conversion increase (+85 EUR/t) ; Non-realized NDSP 500 Brent…
Downstream : MAXIMISE FREE CASH FLOW GENERATION WITH FURTHER EFFICIENCY IMPROVEMENT AND ADD- ON GROWTH PROJECTS DS CCS Wholesale GOALS Normalized Retail 2017 EBITDA fuel volume free cash flow1 USD 500mn 150% fuel volume…
Downstream TARGETS USD 500MN ADDITIONAL IMPROVEMENT BY 2017 DOWNSTREAM FREE CASH FLOW GENERATION BY 2017 (MN USD)1 Any potential future add-on projects (e.g. Rijeka DC, 1 2 Sensitivity to SSBR, petchem projects, 1300 - 1400…
Downstream PRODUCTION ROADMAP TARGETS UPTIME INCREASE, 1 ENERGY EFFICIENCY & YIELD IMPROVEMENT A 97% 96,0% 96% HSE 95% 94,7% Operational Availability Optimize maintenance costs and increase operational availability 94% of…
Downstream SUPPLY & SALES: GROWING CONTRIBUTION THROUGH 1 DELIVERING VOLUMETRIC INCREASE B CENTRAL REGION: SALES AND MARGIN GROWTH 1 Sales volume growth 2 Margin revenue growth TRADING BELT: 150% SALES TO NEW MARKETS / NEW…
Downstream WELL ESTABLISHED RETAIL NETWORK IN THE CEE WITH FURTHER GROWTH POTENTIAL GROUP RETAIL NETWORK RETAIL NETWORK INTEGRATION Takeover of 125 stations 6 FS/kbpd of ref. Capacity in Czech Republic and 41 in Slovakia is…
Downstream CONCEPTUAL CHANGE IN RETAIL TO IMPROVE 1 FINANCIAL CONTRIBUTION C VISION PILLARS RETAIL TARGETS To be customers Growing number of retail stations (network optimization first choice in fuel and M&A): and convenience…
Downstream DEEPLY INTEGRATED PETROCHEMICAL PORTFOLIO PETCHEM VALUE CHAIN1 A TOP 10 European polymer producer and the biggest producer in CEE: 420 kT HDPE Naphtha Efficient assets & up-to-date product portfolio Gasoil LDPE 285…
DOWNSTREAM Downstream EXTENDING THE PETROCHEMICALS VALUE CHAIN TO INCREASE PROFITABILITY LDPE4 BUTADIENE SYNTHETIC RUBBER PILLARS PILLARS PILLARS New 220 ktpa capacity LDPE unit New 130 ktpa capacity Butadiene Entering into…
Downstream ADRIATIC CONNECTION OF LANDLOCKED REFINERIES IMPROVES SECURITY OF SUPPLY ADRIATIC PIPELINE ACCESS ESTABLISHED Restore the reliable operation of Friendship 1 Increase pipeline pipeline capacity to 6Mtpa = SN Potentially…
IV. FINANCIAL OVERVIEW 52
Financials STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: organic CAPEX financed from operating cash flow 1.3X NET DEBT TO EBITDA & BELOW 20% NET GEARING (year-end 2014) Around USD 2BN CCS GROUP EBITDA IN…
Financials CONTINUOUSLY STRENGTHENING FINANCIAL POSITION Indebtedness indicators still at historical lows despite increase in FY14 NET DEBT TO EBITDA (X) GEARING (%) 3.5 3.5 Limit of Net Debt to EBITDA 45 3 40 36 35 33 31 2.5…
Financials USD 1.5-1.8 BN CAPEX PLANNED FOR 2015 WITH UPSTREAM FOCUS UPSTREAM DOWNSTREAM Balance between early Strict control on sustain cash generation... CAPEX CEE Finalize profitable strategic 37% CAPEX growth projects and…
Financials MOL HAS SUFFICIENT LIQUIDITY FOR ACQUISITIONS EUR 4.1bn total available liquidity as of Q4 2014 DRAWN VERSUS UNDRAWN FACILITIES TOTAL AVAILABLE LIQUIDITY (EUR MILLION) (EUR MILLION) 7,000 4,500 EUR 4 104m 4,000…
Financials FROM DIVERSIFIED FUNDING SOURCES Cost rationalization keeping diversification in mind MID- AND LONG-TERM COMMITTED FUNDING RECENT EVENTS PORTFOLIO Other bilateral Syndicated / club New USD 1.5bn Revolving Credit…
Financials AVERAGE MATURITY OF 2.8 YEARS Maturity structure enhanced with newest transaction 2,500 2,000 1,500 EUR M 1132 1,000 0 76 110 14 1,350 1061 500 146 750 750 452 412 0 37 15 37 37 6 0 Reported 2014…
Financials CREDIT RATING ABOVE SOVEREIGN RATING AT FITCH, IN LINE WITH THAT AT S&P FFO*/NET DEBT HISTORICAL FOREIGN LONG TERM RATINGS MOL S&P Hungary S&P MOL Fitch Hungary Fitch 50% A 45% A- 40% 35% BBB+ 30% BBB 25% 20% BBB-…
Financials KEY ITEMS OF TAXATION HUNGARY Revenue based Crisis tax abolished from 2013 HUF 30bn negative effect p.a. in 2010-12 Profit based Robin Hood nominal tax rate is 31% only energy related part of the profit affected (70%),…
Financials EXECUTIVE INCENTIVE SCHEMES On the top level, more than two thirds of total remuneration is variable and performance driven SHORT TERM INCENTIVES Maximum opportunity between 0.85x and 1x of base salary depending on…
V. APPENDIX 63
Appendix OVERVIEW OF MOLS ASSETS IN KURDISTAN REGION OF IRAQ Entry in 2007 amongst the first ones BLOCK W.I. FULLY OPERA DILUTED TOR W.I. Akri-Bijeel 80% 51.2% MOL GKP Shaikan 20% 13.6% (75%) Khor Mor 10% 10% Pearl Petrole…
Appendix AKRI-BIJEEL Drilling programme with 4+1 rigs 65
Appendix SHAIKAN: COMMERCIAL PRODUCTION STARTED, 1ST EXPORT CARGO DELIVERED IN JAN 2014 6.7/9.2/13.3 billion barrels STOIIP estimated for Low/Best/High cases (based on CPR estimate March 2014) 66
Appendix STRUCTURE OF OUR PRODUCTION SHARING CONTRACTS GEOGRAPHICAL BREAKDOWN OF CAPEX SPENDING ORGANIC CAPEX BY FIELD TYPE Oil produced Oil produced Royalty Oil Royalty Oil 10% of total Crude oil 10% of total Crude oil…
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