Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Investor Presentation (November 2017)
77 slides from Mol Hungarian Oil & Gas Plc Class A's investor presentation, November 2017
Slide 1: MOL Group Investor Presentation November 2017
MOL GROUP INVESTOR PRESENTATION November 2017
Slide 2: Presentation Manual
PRESENTATION MANUAL LINKS ( )ARE AVAILABLE THROUGHOUT THE PRESENTATION THAT DIRECT YOU TO MORE INFORMATION ON THE SELECTED TOPIC. A NAVIGATION BAR ON THE TOP OF EACH SLIDE IS ALSO AVAILABLE, WITH THE FOLLOWING BUTTONS: HOME: GO TO THE SUMMARY SLIDE HELP: GO TO PRESENTATION MANUAL BACK: GO TO PREVIOU
Slide 3: MOL Group in Brief
MOL GROUP IN BRIEF INTEGRATED CENTRAL EUROPEAN MID-CAP OIL & GAS COMPANY CORE ACTIVITIES UPSTREAM DOWNSTREAM CONSUMER GAS SERVICES MIDSTREAM Exploration Petrochemicals Retail Production Refining Mobility CLEAN CCS EBITDA BY SEGMENTS IN 2016 (USD MN) UPSTREAM DOWNSTREAM CONSUMER GAS 675 1,147 307 194
Slide 4: MOL Group Geography
MOL GROUP GEOGRAPHY CEE-BASED INTEGRATED OPERATIONS AND INTERNATIONAL UPSTREAM SLOVAKIA UK RUSSIA NORWAY CZECH REP. KAZAKHSTAN HUNGARY HQ IRAQ SLOVENIA ITALY PAKISTAN OMAN CROATIA ROMANIA EGYPT SYRIA (IN FORCE MAJEURE) BOSNIA SERBIA ANGOLA UPSTREAM DOWNSTREAM CONSUMER SERVICES 4
Slide 5: Agenda
AGENDA THE MOL GROUP EQUITY STORY SUPPORTING SLIDES Q3 2017 RECAP (LINK TO THIRD QUARTER 2017 RESULTS) DOWNSTREAM CONSUMER SERVICES EXPLORATION AND PRODUCTION FINANCIALS, GOVERNANCE AND OTHERS 5
Slide 6: The MOL Group Equity Story
THE MOL GROUP EQUITY STORY
Slide 7: Delivering Today, Transforming for Tomorrow
DELIVERING TODAY, TRANSFORMING FOR TOMORROW Efficiency & Safety: systematic focus on efficiency and safety in each business Integration: deeply integrated business model provides remarkable cash flow stability Resilience: high-quality, low-cost asset base, breaking even at the bottom of the cycle MO
Slide 8: Downstream: Cash Engine to Drive Fuel to Chemicals Transformation
DOWNSTREAM: CASH ENGINE TO DRIVE „FUEL TO CHEMICALS” TRANSFORMATION AND GROWTH DELIVERING TODAY High-quality, low-cost asset base Market leading position in Central Europe with long-standing customer relations Strong captive markets and a deeply integrated refining-chemicals-distribution value chain
Slide 9: Consumer Services: Leading Fuel Retailer
CONSUMER SERVICES: LEADING FUEL RETAILER TO DRIVE THE REVOLUTION OF TRANSPORTATION DELIVERING TODAY Leading CEE fuel retailer with 1900+ sites and 1 mn daily transactions Earnings doubled since 2013 driven by rising consumption, margins and M&A Non-fuel increasingly a growth driver due to new store
Slide 10: E&P: Highly Value Accretive Barrels to Fund Inorganic Reserve Replacement
E&P: HIGHLY VALUE ACCRETIVE BARRELS TO FUND INORGANIC RESERVE REPLACEMENT DELIVERING TODAY Exploration & Production adjusted to be fit and to prosper at the bottom of the cycle Proven capabilities to operate mature, onshore assets in a cost-efficient way Existing 2P reserves generate substantial val
Slide 11: Gas Midstream: Stable, Non-Cyclical Cash Flow
GAS MIDSTREAM: STABLE, NON-CYCLICAL CASH FLOW DELIVERING TODAY Stable FCF generation in domestic transmission Profitable international transit business spanning 6 regional countries Recent years saw significant pipeline and trade infrastructure developments, as well as efficiency improvements TRANSF
Slide 12: Robust Financial Framework Supports Strategic Transformation
ROBUST FINANCIAL FRAMEWORK SUPPORTS STRATEGIC TRANSFORMATION DELIVERING TODAY 2017: a strong year with materially upgraded guidance for cash generation USD 2.0-2.2bn annual Clean CCS EBITDA under normalized assumptions Existing assets require around USD 1.0-1.1bn „sustain” capex annually Simplified
Slide 13: Sustainable: Sole Regional Member of DJSWI
SUSTAINABLE: SOLE REGIONAL MEMBER OF DJSWI, ADAPTING TO A LOW CARBON WORLD DELIVERING TODAY Sustainable Development Committee integral part of the Board of Directors Minimize environmental footprint in line with climate change policy Only CEE corporation member of the Dow Jones Sustainability World
Slide 14: MOL 2030: Tracking Progress Towards 2021
MOL 2030: TRACKING PROGRESS TOWARDS 2021 TARGET 2017 STATUS NXDSP SLIGHTLY BEHIND; DOWNSTREAM EFFICIENCY NEW TARGETS SET IN DS2022 ENTER NEW CHEMICAL ALL POLYOL TECHNOLOGY PRODUCT LINE(S) LICENSE AGREEMENTS SIGNED EBITDA 2017 Q1-Q3: USD 282MN, CONSUMERS EBITDA 2021: USD 450MN +17% YOY RISING NON-FUE
Slide 15: Downstream
DOWNSTREAM
Slide 16: Top 15% in Sustainability
TOP 15% IN SUSTAINABILITY A COMMITMENT TO THE INTEGRATION OF ECONOMIC, ENVIRONMENTAL AND SOCIAL FACTORS INTO EVERYDAY OPERATIONS Zero Lost-time injury frequency (LTIF) (own HEALTH & SAFETY and on-site contractors) and fatalities Decrease direct and indirect GHG CLIMATE CHANGE emissions by 200 kt1 th
Slide 17: Integrated Downstream Model in CEE
INTEGRATED DOWNSTREAM MODEL IN CEE 12 COUNTRIES 18 mtpa REFINED PRODUCTS SALES OF AND 1.25 mtpa PETROCHEMICALS TO WHOLESALE CUSTOMERS WORLDWIDE 15,000 SERVICE STATIONS 1,900+ FUEL SOLD ~5.2 bnliters 17
Slide 18: High Quality Core Refining Assets
HIGH QUALITY CORE REFINING ASSETS COMPLEX REFINERIES WITH 70%+ WHITE PRODUCT YIELD REFINERY NELSON COMPLEXITY OF PEERS1 GROUP REFINERY YIELD, 2016 (%) 16 6.1 Mtpa 9.3% 2.5% 7.6% 14 8.1 Mtpa 12 11.5 10.6 4.5 Mtpa 9.7% LPG 10 9.1 2.2 Mtpa 70%+ 18.9% Naphta NCI 8 6.5% Motor gasoline 6 6.1 white 4 produ
Slide 19: Deep Downstream Integration
DEEP DOWNSTREAM INTEGRATION MARKET LEADING POSITION WITH STRONG CUSTOMER RELATIONS IN CEE MARKET SHARE (%)1 DOWNSTREAM INTEGRATION (FUELS)2 ~24% CRUDE INTAKE: • Russian: 67% • Seaborne: 25% ~85% ~40% • Own Refining production: 8% ~80% ~36% captive ~45% market Retail <10% 10-20% 20-40% 40+% own marke
Slide 20: Petrochemicals in MOL's Integrated Downstream Value Chain
PETROCHEMICALS IN MOL’S INTEGRATED DOWNSTREAM VALUE CHAIN MOL PETROCHEMICAL VALUE CHAIN Capacity HDPE 420 kt OLEFINS (ETHYLENE, PROPYLENE, LDPE 285 kt C4 STREAM) Refining Ethylene PP 535 kt Petchem 890 kt Internal feedstock1: Butadiene 130 kt SSBR 60 kt ~1.5 Mt in 2015 AROMATICS2 350 kt LDPE4: 220 k
Slide 21: Proven Efficiency Track Record
PROVEN EFFICIENCY TRACK RECORD GRADUALLY INCREASING FOCUS ON GROWTH AND TRANSFORMATION PROGRAM SCOPE FINANCIALS 3 200+ 0 0 0 500 150 years Actions Enabler1 Operational2 Large USD mn USD mn program actions actions projects3 EBITDA4 CAPEX 3 300+ 0 0 8 500 1,200 years Actions Enabler1 Operational2 Larg
Slide 22: NxDSP: USD 350MN Asset & Efficiency Improvement
NXDSP: USD 350MN ASSET&EFFICIENCY IMPROVEMENT ADDITIONAL USD 150MN TARGETED FROM GROWTH PROJECTS EFFICIENCY IMPROVEMENT GROWTH PROJECTS’ CONTRIBUTION 2 1 (CUMULATIVE, USD MN) (USD MN) 350 Production USD ~270MN 1. Availability and USD ~70MN DELIVERED SO FAR DELIVERED SO FAR maintenance (ONLY USD 10MN
Slide 23: Downstream: Outstanding Margin Capture
DOWNSTREAM: OUTSTANDING MARGIN CAPTURE CREATES AMPLE HEADROOM TO ABSORB EXTERNAL SHOCKS FACT SENSITIVITY AS-IS: 2017 H1 MARGIN, EBITDA, CAPEX AND FCF IN MID-CYCLE MACRO (USD/BBL) EBITDA (USD/BBL) PUBLISHED MARGINS PUBLISHED MARGINS • MOL Group ref.: USD 4.5/bbl • MOL Group refining: • Petchem: EUR 4
Slide 24: Transforming to Beyond the Fuel Age
TRANSFORMING TO „BEYOND THE FUEL AGE” FOSSIL FUEL DOMINANCE TO DIMINISH BY 2030, BUT DEMAND STILL SUBSTANTIAL ASSUMPTIONS MOL 2030 TRANSFORM… Fossil fuel demand likely to decline by 2030, but will still …FUEL TO CHEMICALS remain material Alternative fuels and Increase share of non-motor (petro)chemi
Slide 25: 50% Valuable Non-Fuel Production by 2030
50% VALUABLE NON-FUEL PRODUCTION BY 2030 TRANSFORMATION AWAY FROM MOTOR FUELS GROUP REFINERIES’ YIELD STRATEGIC PRIORITIES ACTIONS 2010 2015 2030 1 Benefit from profitable products (jet, base oils, LPG) ~60% ~70% 2 Increase petchem feedstock up to First round of 3 mtpa actions defined in DS2022 prog
Slide 26: Move Along the Downstream Value Chain Towards Higher Value-Added Chemicals
MOVE ALONG THE DOWNSTREAM VALUE CHAIN TOWARDS HIGHER VALUE-ADDED (PETRO)CHEMICALS (PETRO)CHEMICAL TRANSFORMATIONAL JOURNEY CRITERIA FOR SEGMENT CHOICE REFINING PETROCHEMICALS CHEMICALS MARKET/PRODUCT DIMENSION Demand COMMODITY SEMI-COMMODITY SPECIALITY NICHE Growth potential KNOWLEDGE COMPETITIVE AD
Slide 27: Several Options to Expand Along the Value Chain
SEVERAL OPTIONS TO EXPAND ALONG THE VALUE CHAIN Polyethylenes (LDPE, HDPE) Polyols Propylene glycol ethers source: www.petrochemistry.eu 27
Slide 28: Entering the Polyurethanes Value Chain
ENTERING THE POLYURETHANES VALUE CHAIN Petchem feedstock Basic chemicals Intermediates / pre-polymers Polymers nitro- benzene MDI/PMDI benzene propylene naphtha propylene polyols polyurethanes -oxide nitro- toluene TDI toluene PUR FORMULATORS „SYSTEM HOUSES” OLEFIN END- REFINING PRODUCERS CHEMICAL C
Slide 29: Polyol – An Attractive Propylene Derivative
POLYOL – AN ATTRACTIVE PROPYLENE DERIVATIVE MOL LACKS SUFFICIENT AMOUNT OF OWN FEEDSTOCK TO EXPAND IN PP FORWARD INTEGRATION OPTIONS ALONG THE SELECTION CRITERIA PROPYLENE VALUE CHAIN Other Propylene Further analysis is in progress Derivatives Market size 1 WE/CE: 5/0.4 mt/y 2 to recognize other att
Slide 30: A High Margin, Growth Product
A HIGH MARGIN, GROWTH PRODUCT MOL TO BECOME THE SOLE INTEGRATED REGIONAL POLYOL PRODUCER CE POLYOL MARKET PROPYLENE VS. POLYOL SPREADS1 (USD/T) source: MOL Group Su p p ly ~3% CAGR Relative deviation: PO – propylene: 13% Deman d PP – propylene: 47% 1.200 ~80kt ~150 1.000 deficit 800 600 400 Current
Slide 31: Widespread Application of Polyol
WIDESPREAD APPLICATION OF POLYOL … AS AN ESSENTIAL POLYURETHANE COMPONENT GLOBAL POLYURETHANE DEMAND BY DRIVERS INDUSTRY % of global demand Improving access to „essentials of life”, increasing comfort needs ~30% Improving life expectancy and population growth FURNITURE & INTERIOR Improving energy ef
Slide 32: DS2022: A Major Milestone Towards MOL 2030
DS2022: A MAJOR MILESTONE TOWARDS MOL 2030 OTHER GROWTH STRATEGIC TRANSFORMATION (POLYOL) USD 140 MN USD 180 MN EBITDA EFFICIENCY & EBITDA UPLIFT UPLIFT FLEXIBILITY ROADMAP EFFICIENCY 2030 DS EBITDA USD 180 MN EBITDA 1.5+ UPLIFT USD BN SAFETY EMPLOYEES' ENGAGEMENT 1ST BEST IN THE QUARTILE REGION CUS
Slide 33: USD 500MN Incremental EBITDA by 2022
USD 500MN INCREMENTAL EBITDA BY 2022 FROM TRANSFORMATIONAL PROJECTS AND EFFICIENCY (USD 2.1BN TOTAL CAPEX) INCREMENTAL EBITDA CONTRIBUTION (USD MN) CAPEX SPENDING (USD MN) 135 500 170 25 2,100 Growth (Polyol) 690 Other strategic 140 Efficiency 175 1,020 830 180 40 50 900 100 270 180 115 180 2018 201
Slide 34: DS2022 to More Than Offset Macro Decline
DS2022 TO MORE THAN OFFSET MACRO DECLINE SUPERIOR MARGIN DELIVERY TO BE MAINTAINED, FURTHER UPSIDE AFTER 2022 DS2022 IMPACT ON CAPTURED EBITDA MARGIN (USD/BBL) 1.3 2.1 1.3 1.0 1.0 10.6 8.2 2016 NxDSP 2017 Growth (Polyol) Other strategic Efficiency Macro decline 2022 EBITDA Superior margin delivery t
Slide 35: First Milestone of Petchem Transformation
FIRST MILESTONE OF PETCHEM TRANSFORMATION TEAMING UP WITH WORLD-CLASS PARTNERS FOR 200 KT/PA POLYOL PROJECT WHAT HAS BEEN REACHED? Key contracts of HPPO technology licenses signed with Evonik and thyssenkrupp Fluor Corporation selected as project management consultant (PMC) Selected licensor for pol
Slide 36: Other Strategic (Brownfield) Projects
OTHER STRATEGIC (BROWNFIELD) PROJECTS LARGE, TRANSFORMATIONAL INVESTMENTS ALONG 2030 STRATEGIC GOALS GOALS EXAMPLES HCK revamp in Bratislava refinery Start up: 2019 11 projects FCC revamp in Duna refinery Enhancing USD 900 mn flexibility & Start up: 2021 CAPEX Debottlenecking INA delayed coker Start
Slide 37: Efficiency: USD 180MN EBITDA Uplift
EFFICIENCY: USD 180MN EBITDA UPLIFT MOSTLY COMING FROM IMPROVED ENERGY EFFICIENCY AND NON-FUEL FOCUS INCREMENTAL EBITDA CONTRIBUTION BY ACTION (USD MN) 22 Butadiene 20 sales Energy portfolio Key areas: 18 efficiency Strengthen market position 16 Group Fuel 100+ 14 margin ACTIONS Energy efficiency LU
Slide 38: Crude Diversification
CRUDE DIVERSIFICATION TARGETING 33% SEABORNE SUPPLY BY 2021 ADRIATIC PIPELINE ACCESS ESTABLISHED CRUDE DIVERSIFICATION1 Increased pipeline capacity: 6Mtpa = SN REB 97% 75% Seaborne Increased 3% 25% 33% pipeline capacity: 14Mtpa = MOL+SN 2011 2016 2021 ENHANCING FEEDSTOCK FLEXIBILITY Number of purcha
Slide 39: Consumer Services
CONSUMER SERVICES
Slide 40: A Leading Regional Network
A LEADING REGIONAL NETWORK USD 307MN EBITDA IN 2016 CZECH R. MARKET POSITION: 2 MARKET LEADING MARKET SHARE: 20% SLOVAKIA MARKET POSITION: 1 MARKET SHARE: 47% IN 60% OF THE NETWORK HUNGARY TOP 3 MARKET POSITION: 1 MARKET SHARE: 44% IN 90% OF THE NETWORK SLOVENIA MARKET POSITION: 3 MARKET SHARE: 10%
Slide 41: A Value Generating Network
A VALUE GENERATING NETWORK… …AS EBITDA PER SITE ALMOST DOUBLES EBITDA (REPORTED, USD MN) NORMALIZED FCF (USD MN1) 0 56 193 200 29 179 307 126 204 221 151 2013 2014 2015 External Internal FX 2016 2013 2014 2015 2016 EBITDA (CONSTANT, USD MN 2) EBITDA PER SITE (USD TH1) COMMENTS 164 Fuel is still the
Slide 42: Fuel Sales on the Rise
FUEL SALES ON THE RISE GROWTH MOSTLY DRIVEN BY RISING CEE FUEL CONSUMPTION; M&A CONTRIBUTES M&A DRIVEN NETWORK EXPANSION FUEL SALES (MN LITERS) CZECH R. HUNGARY SLOVAKIA SLOVENIA 5,239 ROMANIA BOSNIA MONTENEGRO 4,837 SLOVENIA CZECH R. SLOVENIA CZECH R. 4,292 4,323 ITALY CROATIA BOSNIA CROATIA AUSTRI
Slide 43: Non-Fuel Increasingly a Growth Driver
NON-FUEL INCREASINGLY A GROWTH DRIVER CONCEPTUAL CHANGE, COCO/A OPERATING MODEL SUPPORT GROWTH NEW CONCEPT AND A COMPLETE REVAMP MEASURING PERFORMANCE Introducing a non-fuel concept: Increasing focus on in-store and mobility sales, revenues and profitability Number of Investment in and development o
Slide 44: A Unique Transformational Journey
A UNIQUE TRANSFORMATIONAL JOURNEY TO TURN A FUEL RETAILER INTO A CONSUMER SERVICES HUB 2021 OBJECTIVES Leading fuel retailer Successful consumer goods retailer Strategically positioned to drive revolution of transportation in the CEE 2030 TO BECOME A USD 450MN EBITDA LEADING CEE CONSUMER SERVICES HU
Slide 45: 2021 Strategic Priorities
2021 STRATEGIC PRIORITIES EXPLOIT POTENTIAL IN FUEL, ACCELERATE SHIFT TOWARDS NON-FUEL MARGIN DEVELOPMENT 2021 STRATEGY 6 1 Exploit fuel potential: improve fuel quality and brand messaging 4 5 2 Continuously improve operations: 2 3 category management, loyalty, purchase price management etc. 24% 3 O
Slide 46: Exploration and Production
EXPLORATION AND PRODUCTION
Slide 47: Top 15% in Sustainability
TOP 15% IN SUSTAINABILITY A COMMITMENT TO THE INTEGRATION OF ECONOMIC, ENVIRONMENTAL AND SOCIAL FACTORS INTO EVERYDAY OPERATIONS We operate safely or we don’t operate. HEALTH & SAFETY Implement actions aiming at zero incidents and zero fatalities2 Decrease GHG emissions from CLIMATE CHANGE flaring b
Slide 48: Production in 8 Countries
PRODUCTION IN 8 COUNTRIES RUSSIA Reserves: 50 MMboe CEE TOTAL Production: 6.3 mboepd Croatia, Hungary KAZAKHSTAN Reserves: 262 MMboe Reserves: 60 MMboe Production: 78.2 mboepd PAKISTAN o/w CEE offshore Reserves: 10 MMboe Reserves: 10 MMboe Production: 8.5 mboepd Production: 8 mboepd OTHER INTERNATIO
Slide 49: E&P Adjusted to Be Fit and to Prosper at the Bottom of the Cycle
E&P ADJUSTED TO BE FIT AND TO PROSPER AT THE BOTTOM OF THE CYCLE NEW UPSTREAM PROGRAM (USD MN, MBOEPD) CONTROLLABLE OPEX ORGANIC CAPEX CEE PRODUCTION ~-18% +5% -51% 877 681 432 81 77 79 2015 2016 2014 2015 2016 2014 2015 2016 GROUP DIRECT UNIT OPEX1 (USD/BOE) 9 8 7 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 50: Creating Value Below 50 USD/bbl Oil Price
CREATING VALUE BELOW 50 USD/BBL OIL PRICE ANNUAL PRICE REALIZATION, EBITDA, FCF (USD/boe) 120 112 109 110 99 100 90 80 76 69 70 62 60 52 52 50 43 42 41 44 Brent price 38 40 33 33 Realized HC price 30 21 19 16 Unit EBITDA 20 30 24 Unit FCF* 10 15 8 6 0 1 2012 2013 2014 2015 2016 2017 YTD Proven track
Slide 51: Production at ~110 mboepd Until 2019
PRODUCTION AT ~110 MBOEPD UNTIL 2019 ~10-15 MBOEPD NEEDED TO SUSTAIN PRODUCTION BEYOND 2020 MID-TERM PRODUCTION PROFILE KEY MESSAGES (MBOEPD) 120 112 Stable contribution from CEE ~110 ~110 ~110 New 104 ~10-15 barrels Impact of successful production required 100 optimization and EOR Pursue transfer o
Slide 52: Lower Production in Q3 2017
LOWER PRODUCTION IN Q3 2017 ON SEASONAL TURNAROUNDS AND ISSUES WITH SCOLTY & CRATHES (UK) QUARTERLY PRODUCTION BY COUNTRY (mboepd) COMMENTS QoQ: -4% -4% 113.1 UK: -2.7 mboepd; seasonal 112.4 111.2 109.2 109.0 maintenance across fields and Estimate 8.0 8.7 8.8 104.5 104.0 continued waxing problems As
Slide 53: Reserve Replacement Is on the Agenda
RESERVE REPLACEMENT IS ON THE AGENDA TO ENSURE THE LONG-TERM SUSTAINABILITY OF THE E&P BUSINESS RESERVES GAP IN 2016-21 (MMBOE) MOL’S E&P FOOTPRINT – CORE REGIONS 514 514 100-105 170-175 65-75 2015 YE 2P Production Reserves needed Reserves needed Reserves after Booked Reserves (2016-2021), to mainta
Slide 54: E&P Delivers Substantial FCF in 2017-21
E&P DELIVERS SUBSTANTIAL FCF IN 2017-21 TO FUND INORGANIC RESERVE REPLACEMENT EBITDA, CAPEX AND FCF EXPECTATIONS (2016-21, USD MN) KEY MESSAGES Brent @ 60 USD/bbl 30-40% organic +USD Less than 20% of reserve replacement ~750mn the total Upstream EBITDA CAPEX pool is rate expected Brent @ 50 committe
Slide 55: Financials, Governance and Others
FINANCIALS, GOVERNANCE AND OTHERS
Slide 56: Outstanding FCF Generation in 2017 YTD
OUTSTANDING FCF GENERATION IN 2017 YTD WITH THE ESSENTIAL FUNDAMENTAL BUILDING BLOCKS IN PLACE 2017 2016 Q1-Q3 2017 TARGETS RESILIENT GROUP CLEAN INTEGRATED CCS EBITDA USD 2.15 BN USD 1.87 BN USD 2.3 BN+ BUSINESS MODEL GROUP CAPEX USD 1.0 BN USD 605 MN USD 1.0 BN (ORGANIC) FINANCIAL DISCIPLINE SIMPL
Slide 57: Sustained Cash Generation
SUSTAINED CASH GENERATION IN 2016 AND IN THE NEXT 5 YEARS CLEAN-CCS EBITDA (USD BN) 2.5 2.3 2.5 2.2 2.2 2.3+ 0.7 2.0-2.2 0.7 1.9 1.6 1.2 1.7 1.5 1.9 Q1-Q3 0.7 0.9 0.7 0.3 0.3 0.3 0.2 0.2 -0.3 -0.3 -0.1 -0.1 -0.2 2012 2013 2014 2015 2016 2017 YTD 2017-21E Average Upstream Downstream Gas Midstream Cor
Slide 58: Strong Sustain Capex Discipline
STRONG „SUSTAIN” CAPEX DISCIPLINE SUSTAIN CAPEX (USD BN)1 Organic US Organic DS Organic GM Organic C&O (incl. intersegment) Group total 1.8 1.7 1.6 1.4 1.3 1.2 0.9 1.2 1.0 1.0 1.0-1.1 Around 1.0 1.0 0.7 0.7 0.8 0.5 0.4 0.6 0.4 0.7 0.4 0.4 0.5 0.5 0.6 0.2 Q1-Q3 0.0 2012 2013 2014 2015 2016 2017 YTD 2
Slide 59: Robust Simplified Free Cash Flow
ROBUST SIMPLIFIED FREE CASH FLOW ACROSS THE CYCLE AND ACROSS ALL BUSINESS SEGMENTS SIMPLIFIED FREE CASH FLOW1 (USD BN) Organic US Organic DS Organic GM Organic C&O (incl. intersegment) Group total 1.5 1.8 1.6 1.1 1.2 1.4 1.1 0.0 1.3+ 1.2 0.2 1.0-1.1 1.3 1.0 0.9 0.8 1.2 0.5 0.6 1.0 1.3 0.3 Q1-Q3 0.4
Slide 60: Sources and Applications of Cash
SOURCES AND APPLICATIONS OF CASH SOURCES AND APPLICATIONS OF CASH, 2012-17 (USD MN) 180 -549 284 666 521 407 579 459 196 950 205 270 200 202 456 420 302 2 524 370 2 477 2 308 2 300 350 164 2 183 2 153 111 1 689 1 211 1 258 1 034 1 011 1 000 2012 2013 2014 2015 2016 2017E Clean CCS EBITDA Organic CAP
Slide 61: Robust Balance Sheet, Ample Headroom
ROBUST BALANCE SHEET, AMPLE HEADROOM REMAIN A PRIORITY IN „MOL 2030” NET DEBT TO EBITDA (X) MOL 2030 2.5 1.96 Net debt/EBITDA to be in 1.0-2.0x tolerance 2.0 1.72 range on a forward-looking basis under 1.66 1.44 „normal” circumstances (covenant 1.5 1.38 1.31 threshold at significantly higher levels)
Slide 62: Ample Financial Headroom
AMPLE FINANCIAL HEADROOM FROM DIVERSIFIED FUNDING SOURCES AVERAGE MATURITY OF 3.29 YEARS 2500 Long term loan (multilaterals) Medium term loan Senior Unsecured Bonds 2000 Reported cash&cash equivalents Undrawn facilities 1500 USD M 1000 575 1275 500 533 726 885 701 500 57 0 4 47 45 37 35 81 35 Report
Slide 63: Full Investment Grade Rating Achieved
FULL INVESTMENT GRADE RATING ACHIEVED FOLLOWING S&P UPGRADE IN NOVEMBER 2017 HISTORICAL FOREIGN LONG TERM FFO ADJUSTED NET LEVERAGE RATINGS (3Y AVG. 2014-2016) MOL Fitch MOL Moody's MOL S&P (BBB-) 1.7 BBB+ Baa1 BBB+ Baa2 (A-) 2 BBB BBB BBB- Baa3 (BBB-) 2.2 BBB- Ba1 BB+ (A-) 2.6 BB+ BB Ba2 BB (BBB) 3
Slide 64: Increasing Distribution to Shareholders
INCREASING DISTRIBUTION TO SHAREHOLDERS SECOND CONSECUTIVE YEAR WITH DOUBLE-DIGIT DPS INCREASE DIVIDEND PAYMENTS (HUF BN) Special dividend Steadily increasing dividend per share Regular dividend 13 Cash flows comfortably cover rising dividends even at oil prices below USD 50/bbl 55 58 45 46 47 50 Po
Slide 65: FCF to Cover Strategic Capex in 2017-21
FCF TO COVER STRATEGIC CAPEX IN 2017-21 AND TO CREATE HEADROOM FOR ADDITIONAL TRANSFORMATIONAL SPENDING NEXT 5-YEAR CASH FLOW GENERATION AMBITIONS, 2017-21 (USD BN)1 10-11 -1.4-1.6 -5.0-5.5 -2.0 -1.0-1.3 ~0.6 Clean CCS EBITDA Funding cost/tax/FX Sustain Capex Transformational Dividends FCF-post-divi
Slide 66: MOL 2030 Works With or Without INA
MOL 2030 WORKS WITH OR WITHOUT INA FOCUS ON SECURING RETURN ON INVESTMENT REALITIES AND PRIORITIES STRONG REGIONAL ASSET BASE MOL 2030 strategy can be and will be Low-cost E&P in Croatia* (both onshore and executed with or without INA off-shore) Good geographical fit and untapped Coastal refinery (R
Slide 67: The History of INA & MOL, 2003-2017
THE HISTORY OF INA & MOL, 2003-2017 STORYLINE SHAREHOLDER AGREEMENTS UNDER THE FASHA, MOL DELEGATES FIVE MOL AND THE GOVT OF CROATIA SIGN THE GAS 1ST SHAREHOLDER RIGHTS AGREEMENT (SHA): OUT OF NINE MEMBERS TO THE MASTER AGREEMENT (GMA) AND AN MOL ALLOWED TO NOMINATE TWO MEMBERS 1ST AMENDMENT SUPERVI
Slide 68: MOL-Croatia Arbitration Status
MOL-CROATIA ARBITRATION STATUS UNCITRAL ARBITRATION ICSID ARBITRATION (CROATIA VS. MOL) (MOL VS. CROATIA) INITIATED GOVERNMENT OF CROATIA MOL BY WHEN 17 JANUARY 2014 26 NOVEMBER 2013 PCA (PERMANENT COURT OF ARBITRATION), GENEVA UNDER UNCITRAL ICSID (INTERNATIONAL SETTLEMENT OF FORUM (UNITED NATIONS
Slide 69: Simpler Shareholder Structure
SIMPLER SHAREHOLDER STRUCTURE1 HIGHER FREE FLOAT AND LIQUIDITY The 8-for-1 stock split successfully executed in September 2017 CEZ exit (selling 7.4% stake in MOL) in March 2017 a major boost to free float and liquidity MOL Plc & MOL Investment Ltd. (treasury shares) 9.3% UniCredit Bank AG 3.6% ING
Slide 70: Resilient Integrated Business Model
RESILIENT INTEGRATED BUSINESS MODEL SOLID, CONSISTENT EBITDA GENERATION IN A HIGHLY VOLATILE ENVIRONMENT EXTERNAL ENVIRONMENT* VS MOL CLEAN CCS EBITDA (USD MN) 100% 800 85% 600 70% 55% 400 40% 200 25% 10% 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4
Slide 71: Key Items of Taxation
KEY ITEMS OF TAXATION CORPORATE INCOME TAX (CIT) RATES CUT IN CORE OPERATING COUNTRIES HUNGARY CIT tax rate cut to 9% as of 2017 from 19% Profit based ’Robin Hood’ with an implied tax rate of 21% Only energy related part of the profit affected (~68%), nameplate tax rate is 31% Only the Hungarian ope
Slide 72: MOL Group Carbon Footprint
MOL GROUP CARBON FOOTPRINT TARGETING A 400K T CO2E REDUCTION BY 20201 GHG CHANGES 2015-16 CARBON FOOTPRINT 2016 (MT CO2 EMISSiON) 6.07 1.33 59.14 2020 REDUCTION TARGETS DIRECT GHG EMISSIONS INDIRECT GHG EMISSIONS FROM PURCHASED ENERGY CONSUMPTION GHG EMISSIONS BY CUSTOMERS AND OTHER INDIRECT RESOURC
Slide 73: MOL Group Specific Refinery Margins
MOL GROUP SPECIFIC REFINERY MARGINS 10 9.4 MOL Group refinery margin 9 Complex refinery margin (MOL+SN) 8.6 8 7 6 5 USD/bbl 4 3 2 1 0 01.2013 06.2013 12.2013 06.2014 12.2014 06.2015 12.2015 06.2016 12.2016 06.2017 VARIABLE MARGINS WITH SIMPLE, IMPLIED YIELDS OF REFINERY MARGINS CLEAR METHODOLOGY Bas
Slide 74: Conservative Macro Assumptions for 2017-21
CONSERVATIVE MACRO ASSUMPTIONS FOR 2017-21 KEY MACRO ASSUMPTIONS EBITDA SENSITIVITY TO KEY EXTERNAL DRIVERS Sensitivity1 Est. Clean CCS EBITDA % of Group impact (USD mn) EBITDA 2016 Q1- 5Y 2017 2018- 2015 2016 Q3 +/- 50 USD/Mcm AVG E 21E ~30 1.4% 2017 Gas Price (NCG2) Brent 40- 40- crude 52 44 52 72
Slide 75: Top Management Incentive Schemes
TOP MANAGEMENT INCENTIVE SCHEMES FOR MOL GROUP EB MEMBERS, MORE THAN 2/3 OF TOTAL REMUNERATION IS VARIABLE AND PERFORMANCE DRIVEN SHORT-TERM INCENTIVES Bonus opportunity between 0.85x and 1x of annual base salary, depending on the level Payout linked to yearly performance based on financial, operati
Slide 76: Gas Midstream: Stable, Non-Cyclical Cash Flow
GAS MIDSTREAM: STABLE, NON-CYCLICAL CASH FLOW GAS MIDSTREAM EBITDA (HUF BN, USD MN) FACTS & FIGURES Domestic natural gas 60 300 256 250 252 transmission system operator 50 213 250 194 Regulated business (asset base 40 200 and return) with continuous 30 59 60 150 regulatory scrutiny 58 56 55 20 100 O
Slide 77: Disclaimer
DISCLAIMER "This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capit