Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Q4 2022 Earnings Presentation
43 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, Feb 17, 2023
Slide 1: Fourth Quarter 2022 Results
FOURTH QUARTER 2022 RESULTS 17 FEBRUARY 2023
Slide 2: 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
Slide 3: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER
Slide 4: EBITDA, SFCF delivery significantly above 2022 upgraded guidance
EBITDA, SFCF DELIVERY SIGNIFICANTLY ABOVE 2022 UPGRADED GUIDANCE 2021 2022 UPDATED 2022 RESULTS4 GUIDANCE5 RESULTS5 GROUP CLEAN CCS EBITDA USD 3.53 BN USD 4.1-4.4 BN USD 4.70 BN GROUP CAPEX (ORGANIC) USD 1.54 BN UP TO USD 1.7 BN USD 1.52 MN SIMPLIFIED FCF1 USD 1.98 BN ABOVE 2.4 BN USD 3.18 BN OIL &
Slide 5: USD 4.7bn EBITDA delivery despite regulatory headwinds in 2022
USD 4.7BN EBITDA DELIVERY DESPITE REGULATORY HEADWINDS IN 2022 SUPPORTED MAINLY BY UPSTREAM AND REFINING CONTRIBUTION FINANCIALS Clean CCS EBITDA amounted to USD 1,074mn in Q4 2022 and USD 4,702mn in 2022, however a USD 1,448mn working capital build weighed on CF generation; accordingly operating CF
Slide 6: TRIR above tolerable limit driven by small injuries, targeted mitigation actions in place
TRIR ABOVE TOLERABLE LIMIT DRIVEN BY SMALL INJURIES, TARGETED MITIGATION ACTIONS IN PLACE SAFETY HIGHLIGHTS (TRIR) UPDATE ON ESG RATINGS 2.0 Tolerable limit for 2022 (original) 1.5 MOL Group managed to keep the overall ‚B’ rating for the second 1.0 1.92 1.2 1.67 year in the climate change survey 1.4
Slide 7: 2023: Key operational and financial targets
2023: KEY OPERATIONAL AND FINANCIAL TARGETS 2021 2022 2023 RESULTS4 RESULTS5 GUIDANCE OIL & GAS PRODUCTION1 110 MBOEPD 92 MBOEPD AROUND 90 MBOEPD CRUDE PROCESSING2 12.0 MT 11.7 MT AROUND 12 MT GROUP CAPEX (ORGANIC) USD 1.54 BN USD 1.52 MN UP TO USD 1.7 BN NET DEBT/EBITDA 0.6X 0.3X <1.0X HSE – TRIR3
Slide 8: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 9: Sequentially lower EBITDA generation QoQ
SEQUENTIALLY LOWER EBITDA GENERATION QOQ CLEAN CCS EBITDA STILL EXCEEDED USD 1.0BN IN Q4 2022 BRINGING THE ANNUAL FIGURE TO USD 4.7BN SEGMENT CLEAN CCS EBITDA (USD mn) COMMENTS +21% -26% Upstream 1,449 Q4 2022 EBITDA decreased somewhat QoQ in line with lower price 1,345 realization following market
Slide 10: Organic spending reached USD 1.5bn in 2022
ORGANIC SPENDING REACHED USD 1.5BN IN 2022 IN LINE WITH BASE PERIOD SPENDING TOTAL GROUP CAPEX (USD mn) TOTAL GROUP CAPEX (USD mn) +78% +204% +78% +204% 1,014 1,014 459 459 568 568 29 29 354 330 334 334 108 135 1 447 7 29 421 354 330 334 334 286 222 278 256 239 85 245 134 68 92 100 49 56 67 159 69 Q
Slide 11: (Ex-UK) net income above USD 1.6bn
(EX-UK) NET INCOME ABOVE USD 1.6BN AMOUNTING TO HUF 928 EARNINGS PER SHARE IN 2022 2022 EARNINGS (USD mn) – BELOW THE EBITDA LINE ITEMS 4,702 Consumer Services 320 101 0 1,263 Total Profit for the period to Downstream 2,240 206 77 2,270 equity holders of the parent 4,601 1,223 Discontinued 607 Opera
Slide 12: FX driven financial gain in Q4 2022
FX DRIVEN FINANCIAL GAIN IN Q4 2022 ASSOCIATES ARE IN THE RED MAINLY DUE TO BAITEX WRITE-OFF CCS effect, gain / loss (USD mn) Comments +144% -555% -38% CCS impact in Q4 2022 driven by decreasing oil prices 100 164 41 101 -22 Q4 2021 Q3 2022 Q4 2022 FY 2021 FY 2022 DD&A (USD mn) -1% 39% -20% Q4 DD&A
Slide 13: Operating cash flow before WC at USD 5.0bn in 2022
OPERATING CASH FLOW BEFORE WC AT USD 5.0BN IN 2022 PARTLY OFFSET BY A MACRO DRIVEN WORKING CAPITAL BUILD OF USD 1.45BN OPERATING CASH FLOW FOR TOTAL OPERATION IN 2022 (USD mn) 5,005 USD 582mn decrease in Q4 454 2022 330 1,213 1,448 3,668 3,557 Discontinued USD 998mn increase in Q4 613 2022 USD 1.745
Slide 14: Net debt to EBITDA reached 0.3x by year end
NET DEBT TO EBITDA REACHED 0.3X BY YEAR END AS WORKING CAPITAL BUILD, DIVIDEND PAYMENT, M&A PARTLY OFFSET STRONG OPERATING CF IN 2022 NET DEBT TO EBITDA* (x) GEARING* (%) 2.0 30 27.3 25.2 1.61 25 1.5 20.6 1.31 19.6 20 18.6 18.3 17.5 16.0 0.97 14.3 1.0 15 0.79 0.82 12.0 0.74 11.4 0.65 0.65 10 0.5 0.4
Slide 15: Downstream Q4 2022 Results
DOWNSTREAM Q4 2022 RESULTS
Slide 16: Moderately higher Downstream contribution YoY in Q4 2022
MODERATELY HIGHER DOWNSTREAM CONTRIBUTION YOY IN Q4 2022 TOTAL CLEAN CCS EBITDA AMOUNTED TO USD 384MN QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL PRODUCT SALES (kt) Petchem R&M Total petrochemicals products 3rd party sales Own production +9% -48% 861 -1% -11% 741 20 5,251 5,168 4,652 4,836 303 4,601 3
Slide 17: Stronger refining, weaker petchem margins QoQ in Q4
STRONGER REFINING, WEAKER PETCHEM MARGINS QOQ IN Q4 PRICE REGULATION, WINDFALL TAXES STILL PLAY A MAJOR ROLE REFINING MARGIN (USD/bbl) COMMENTS +1,264% (Ex-Ural) refining margins remained strong over the Q4 2022 period 17.6 18 supported by high middle distillate fuel cracks while the energy cost 16
Slide 18: Annual DS contribution above USD 2.2bn in 2022
ANNUAL DS CONTRIBUTION ABOVE USD 2.2BN IN 2022 HUNGARIAN PRICE REGULATION, WINDFALL TAX HIT PROFITABILITY BY AROUND USD 210MN IN Q4 DOWNSTREAM CLEAN CCS EBITDA YoY, Q4 2022 VS. Q4 2021 (USD mn) COMMENTS Refining margins exploded compared to pre-war 106 levels, however the Petchem margin fell further
Slide 19: Consumer Services Q4 2022 Results
CONSUMER SERVICES Q4 2022 RESULTS
Slide 20: Improving EBITDA dynamics in Q4 2022
IMPROVING EBITDA DYNAMICS IN Q4 2022 BUT FUEL PRICE REGULATION WAS STILL A MAJOR DRIVER QUARTERLY EBITDA (USD mn) EBITDA YoY, Q4 2022 VS. Q4 2021 (USD mn) -12% Retail tax 19 8 116 5 30 101 -23% -26% 89 -38 12 211 116 121 89 64 46 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 EBITDA Q4 2021 Fuel vo
Slide 21: Q4 2022 fuel sales volume increased by 25%
Q4 2022 FUEL SALES VOLUME INCREASED BY 25% AVERAGE QUARTERLY THROUGHPUT EXCEEDED 0.9MN LTR/SITE IN Q4 2022 TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE1 (mn litres) 17% 25% -6% 0.91 1 916 1 810 0.80 1 727 0.77 0.78 1 705 4Y CAGR: 0.72 1 452 1 465 +4.28% Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022
Slide 22: Non-fuel margin expanded by 31% YoY in Q4 2022
NON-FUEL MARGIN EXPANDED BY 31% YOY IN Q4 2022 WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL MARGIN REMAINED ABOVE 35% NON-FUEL MARGIN (USD MN – CONST. FX) TOTAL NON-FUEL TURNOVER (USD MN – CONST. FX) +31% -10% +19% -9% 117.3 432.2 105.6 392.0 380.4 392.5 97.0 96.6 329.4 332.6 80.5 74.0 Q3 2021 Q4 20
Slide 23: 2025 USD ~700mn CS EBITDA target confirmed
2025 USD ~700MN CS EBITDA TARGET CONFIRMED OUR AMBITION IS TO ACHIEVE #2 POSITION IN POLAND FOLLOWING LOTOS ACQUSITIONS CS EBITDA EVOLUTION (USD MN) FIRST MOL BRANDED SES IN POLAND ~700 605 ~460 307 320 2016 2021 2022 2023 2025 MAIN DRIVERS ACQUISITION, STRATEGIC RATIONALE 2022 results have been hea
Slide 24: Upstream Q4 2022 Results
UPSTREAM Q4 2022 RESULTS
Slide 25: E&P EBITDA reached USD 492mn in Q4 2022
E&P EBITDA REACHED USD 492MN IN Q4 2022 RETREATING FROM Q3 HIGHS IN LINE WITH NORMALIZING OIL AND GAS PRICES QUARTERLY EBITDA (ex-spec) (USD mn) OIL PRICES +8% -23% 140 113.8 134.0 120 101.4 100.9 100 107.5 102.4 79.7 94.5 68.8 73.5 81.8 103.9 88.7 80 61.1 76.0 93.6 97.1 60 43.0 44.2 57.0 64.3 62.7
Slide 26: Unit free cash flow at 58 USD/bbl in 2022
UNIT FREE CASH FLOW AT 58 USD/BBL IN 2022 RESULTING IN AN ANNUAL USD 1.8BN SFCF GENERATION QUARTERLY PRICE REALIZATION, EBITDA, FCF (USD/boe) 140 134 120 114 101 102 100 82 108 101 Realized HC price 80 73 80 80 82 72 89 Brent price 60 63 62 63 54 Unit EBITDA 40 40 68 62 52 50 20 40 29 Unit FCF* 0 Q3
Slide 27: Lower oil and gas prices, regulations negatively impacted Q4 2022 results QoQ
LOWER OIL AND GAS PRICES, REGULATIONS NEGATIVELY IMPACTED Q4 2022 RESULTS QOQ UPSTREAM EBITDA QoQ, Q4 2022 VS. Q3 2022 (USD mn) COMMENTS 640 643 Realized hydrocarbon prices decreased by +3 more than 30 USD/bbl mostly in line with -184 492 475 +17 normalizing Brent and natural gas prices QoQ. +4 -1 -
Slide 28: Production above 90 mboepd in Q4 2022
PRODUCTION ABOVE 90 MBOEPD IN Q4 2022 WHILE 2022 DELIVERY STOOD AT 92 MBOEPD EXCEEDING THE (EX-UK) ANNUAL 90 KBOEPD PRODUCTION GUIDANCE PRODUCTION BY COUNTRY (mboepd) COMMENTS QUARTERLY ANNUAL Q4 2022 QoQ (vs. Q3 2022): 95.9 CEE: +0.7 mboepd improved in line with increasing gas 94.1 93.5 94.1 97.1 p
Slide 29: Group level unit OPEX remained below 6 USD/bbl in Q4 2022
GROUP LEVEL UNIT OPEX REMAINED BELOW 6 USD/BBL IN Q4 2022 UK DIVESTMENT IMPACTS UNIT LIFTING COSTS FAVOURABLY UNIT OPEX (USD/boe) COMMENTS 6.5 Group unit OPEX (of continuing operations) grew moderately QoQ to 5.5 6.2 +4% USD/boe despite significant cost pressure across the value chain YoY in Q4 6.0
Slide 30: 2P reserves stood at 348 mmboe at the end of 2022
2P RESERVES STOOD AT 348 MMBOE AT THE END OF 2022 ORGANIC RESERVE REPLACEMENT (WITH REVISIONS) REACHED 185% 2P RESERVES MOVEMENTS (MMBOE) COMMENTS Production of the year was 33 MMboe 16 Net revisions amounted to +60 MMboe: 2 15 Upward revisions brought additions in Hungary (+17 MMboe), Croatia (+15
Slide 31: Supporting Slides
SUPPORTING SLIDES
Slide 32: MOL generated over USD 3.1bn simplified FCF in 2022
MOL GENERATED OVER USD 3.1BN SIMPLIFIED FCF IN 2022 WITH US AND DS BOTH CONTRIBUTING THEIR FAIR SHARE TO SIMPLIFIED FCF SIMPLIFIED FCF* (USD mn) +48% -53% 1,115 1,040 555 600 519 350 510 583 357 347 113 139 48 84 20 16 29 48 -45 -175 -136 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 US DS CS GM C
Slide 33: Working interest based production grew slightly after Q3
WORKING INTEREST BASED PRODUCTION GREW SLIGHTLY AFTER Q3 QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY* (mboepd) 134.0 133.7 132.0 130.0 129.0 129.3 Associated companies* 15.4 15.4 16.2 15.5 15.7 15.5 Other 4.4 4.1 4.2 4.2 4.2 4.4 KRI 7.7 8.4 8.4 8.2 8.3 7.8 Pakistan 6.9 6.7 6.5 6.3 6.1 6.1 Azerb
Slide 34: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Egypt EXPLORATION East Damanhur: gas discovery ED-2X exploration well was drilled. Vecsés-2 well test started at an initial rate of 600 boepd. New exploration concession East Bir El Nus in Egypt awarded to INA as Preparations are ongoing for upcoming Shallow
Slide 35: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Kurdistan Region of Iraq United Kingdom MOL successfully closed the previously announced deal with Waldorf SHAIKAN One well was drilled, and workovers were undertaken in order to Production Limited (“Waldorf”) regarding the sale of its entire E&P portfolio in maintai
Slide 36: Upstream CAPEX by region and by type
UPSTREAM CAPEX BY REGION AND BY TYPE ORGANIC CAPEX BY REGION AND BY TYPE (USD mn) HUN CRO KRI PAK NOR AZE OTHER Total – 2022 Total – 2021 EXP 12.9 16.8 0.0 14.6 0.5 0.0 2.3 47.1 69.8 DEV 36.6 61.2 20.2 1.9 0.7 152.5 14.7 287.8 270.0 Other 15.3 15.8 5.4 0.6 0.0 2.8 0.0 40.0 42.1 Total – 2022 64.8 93.
Slide 37: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) CAPEX (USD mn) +78% +61% 21 -30% +48% 61 19 48 13 38 34 30 9 6 15 2 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 KEY FINANCIALS (USD mn) COMMENTS YoY YoY Q4 2022 Q4 2021 FY 2022 FY 2021 EBITDA climbed by
Slide 38: Sustainability Indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE -16% +615% -5% -8% 0% -50% 2.0 916.8 6 5.0 1.54 1.49 1.54 1000 1.40 1.40 1.41 4.0 1.5 4 1.0 500 2.0 2.0 2.0 2.0 2 0.5 4.4 51.1 5.6 6.0 42.9 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q3 2021 Q4 2021 Q1 2022 Q2 202
Slide 39: Macro Indicators
MACRO INDICATORS BRENT (USD/bbl) MOL REFINERY MARGIN* (USD/bbl) HUF/USD (Q avg.) 120 20 450 Brent-based MOL Group 100 15 400 Brent-based Complex 80 350 10 60 300 40 5 250 20 0 200 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
Slide 40: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 40
Slide 41: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 41
Slide 42: Consolidated Statement of Cash Flow
CONSOLIDATED STATEMENT OF CASH FLOW 42
Slide 43: External Parameters
EXTERNAL PARAMETERS YoY 932022 @42022 @é2021 CP) Macro figure: (average) FY 2022 FY2021 Ch® 1008 Be 738. Ti Brentdoted (USD) Tos 709 ra 75 637 778, (8)/[UralBlend (UsD/bbi)™ 75) 88 ° (72 (6)_no.|_[Urak-Brent (USD/6b). 2 (ig)|__ 1300. 2018 1220 $40 30_TTF go: price (EUR/MWh) 1309 465, 182. 9B. 71 772