CONTENT I. Executive summary 4 II. Upstream 18 III. Downstream 32 IV. Financials 50 V. Appendix 61 2
KEY GOALS AND MESSAGES: GROUP/FINANCIALS Around USD 2.2BN CCS GROUP EBITDA in 2015 at 60 USD/bbl environment with resilient integrated business model Up to USD 1.3BN ORGANIC CAPEX (2015), financed from Operating Cash Flow Strong…
I. EXECUTIVE SUMMARY 4
Executive Summary MOL GROUP: A MID-CAP INTEGRATED INTERNATIONAL OIL&GAS COMPANY INTEGRATED BUSINESS MODEL COMPANY OVERVIEW Market capitalization (30 Jul 2015; bn USD) 5.5 Countries of operation 40 2014FY CCS EBITDA (USD BN)…
Executive Summary UPSTREAM: GROWING INTERNATIONAL PORTFOLIO WITH STRONG, STABLE CEE PRESENCE KEY DATA 14 Exploration and 8 Production Countries Organic Reserve Replacement Ratio at 103% in 2014 Low cost producer: avg. unit OPEX at…
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 Bratislava 8 Danube 6 Rijeka Sisak 4 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 2.2BN…
Executive Summary RESILIENT BUSINESS MODEL CAPABLE OF GENERATING USD 2.2BN IN 2015, EVEN AT 60USD/BBL ENVIRONMENT EBITDA TARGET AND SENSITIVITY CAPEX PLAN MOL is relatively well shielded against the oil Scope adjustments and…
Executive Summary DIVIDEND: PREDICTABLE PAY-OUT WITH BALANCE SHEET STABILITY IN THE FOCUS DIVIDEND HISTORY OF LAST 4 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 Around 105 MBOEPD production targeted for 2015 OVER 30% 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 (H1 2015): 103 mboepd Russia Reserves (SPE 2P 2014): 555 MMboe Reserves: 75 MMboe Croatia, Hungary Production: 7 mboepd…
Upstream 103% ORGANIC RESERVES REPLACEMENT RATIO IN 2014 With further 1160 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 around 105 mboepd this year PRODUCTION OUTLOOK AROUND 105 MBOEPD TARGET (RISKED, ENTITLEMENT BASED) FOR 2015 mboepd Accelerated field (re)development 120…
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, PAK, RUS,…
Upstream CEE: MITIGATE THE PRODUCTION DECLINE AND MAXIMISE CASH FLOW Well optimisation and EOR projects target growing production in Croatia HUNGARY AND CROATIA (124+194 MMBOE) - PRODUCTION OUTLOOK 80 Unique know-how and well…
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 CEE: OPTIMISATION CONTRIBUTES TO MITIGATION OF NATURAL DECLINE Field development Well performance GOALS strategy on portf. level improvement - reserve transfer ALS optimisation Maximize extraction of Fracking profitable…
Upstream KURDISTAN R.I.: INCREASE EXPECTED IN THE COMING YEARS KURDISTAN REGION OF IRAQ (15 MMBOE*) Shaikan: producing from 9 wells through two production facilities Exports started from Shaikan in Q1 2014 Akri-Bijell:…
Upstream SHAIKAN: ON-GOING COMMERCIAL PRODUCTION THROUGH 40MBOEPD CAPACITY PRODUCTION FACILITIES SHAIKAN HIGHLIGHTS (GROSS FIGURES) Injection 9.2 billion barrels STOIIP estimated for base case (CPR point estimate March 2014)…
Upstream NORTH SEA, UK: SIZEABLE MID-TERM PRODUCTION With 6 mboepd contribution already in 2015 NORTH SEA, UK (30 MMBOE) Successfully entered the region in 2014 established local office in Aberdeen with experienced team Majority…
Upstream EXPANDING OUR NORTH SEA PORTFOLIO ENTERING NORWAY Further balancing the country risk profile & doubling the resource potential of the Groups exploration portfolio ACQUISITION OF ITHACA PETROLEUM NORGE Acquiring 100%…
Upstream PAKISTAN: OVER 15 YEARS OF SUCCESSFUL OPERATION Continue highly successful campaign in TAL with exploration in nearby blocks HIGHLIGHTS AND KEY FOCUS AREAS 16 MMBOE 9 discoveries since 1999 in 3 different blocks…
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…
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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, %)…
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 SUCCESSFUL NEW DOWNSTREAM PROGRAM DELIVERY (USD 500MN) NDSP DELIVERY 2011 VS 2014 (MN USD) 160 140 874 Petchem margin Impact of IES conversion increase (+85 EUR/t) ; Non-realized NDSP 500 Brent price drop (-12…
Downstream : MAXIMISE FREE CASH FLOW GENERATION WITH FURTHER EFFICIENCY IMPROVEMENT AND ADD- ON GROWTH PROJECTS Wholesale GOALS Normalized DS CCS Retail 2017 EBITDA fuel volume fuel volume free cash flow1 USD 500mn 150%…
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 6 FS/kbpd of ref. Capacity 5 Slovnaft 316 4 Czech Republic Slovakia Slovnaft 252 3 57 2…
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 Increased pipeline pipeline capacity 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 (2015YE) Around USD 2.2BN CCS GROUP EBITDA IN 2015 at…
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 UP TO USD 1.3BN CAPEX PLANNED FOR 2015 DOWNSTREAM UPSTREAM Strict control on sustain Balance between early CAPEX cash generation in home-based markets DS Finalize profitable strategic 38% growth projects (CEE) US…
Financials MOL HAS SUFFICIENT LIQUIDITY FOR ACQUISITIONS EUR 4.1bn total available liquidity as of Q2 2015 DRAWN VERSUS UNDRAWN FACILITIES TOTAL AVAILABLE LIQUIDITY (EUR MILLION) (EUR MILLION) 7 000 4 500 EUR 4 089m 732 6…
Financials FROM DIVERSIFIED FUNDING SOURCES Cost rationalization keeping diversification in mind MID- AND LONG-TERM COMMITTED FUNDING RECENT EVENTS PORTFOLIO Multilateral Other bilateral Syndicated / USD 1.5bn Revolving Credit…
Financials AVERAGE MATURITY OF 2.4 YEARS Maturity structure enhanced with newest transaction 2 500 2 000 1 500 EUR M 1330 1 000 110 6 1050 1 148 57 500 750 750 452 447 37 54 0 39 39 39 39 Reported 2015 2016…
Financials CREDIT RATING ABOVE SOVEREIGN RATING AT FITCH, ONE NOTCH BELOW AT S&P (AFTER RECENT UPGRADE) MOL to follow FFO*/NET DEBT HISTORICAL FOREIGN LONG TERM RATINGS MOL S&P Hungary S&P MOL Fitch Hungary Fitch 50% A 45% A-…
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 NORTH SEA REGION - UK Entry in 2014 Operating Block W.I. Other partner(s) shareholder Dana (21%), Apache Scott 22% Nexen (42%) (10%), Maersk (5%) Rochelle 15% Nexen (41%) Endavour (44%) Broom 29% Enquest (63%) Ithaca…
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…
Appendix AKRI-BIJEEL 66
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) 67
Appendix STRUCTURE OF OUR PRODUCTION SHARING CONTRACTS SIMPLIFIED PSA SCHEME (SHAIKAN) Oil produced Royalty Oil 10% of total Crude oil 40% Available crude Oil Cost oil Total Profit Oil Recovery oil Based on R factor…
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