41 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, May 12, 2023
Slide 1: First Quarter 2023 Results
FIRST QUARTER 2023 RESULTS 12 MAY 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: Strong year start in 2023 supported by internal delivery
STRONG YEAR START IN 2023 SUPPORTED BY INTERNAL DELIVERY Q1 2022 Q1 2023 2023 RESULTS4 RESULTS GUIDANCE OIL & GAS 94 MBOEPD 96 MBOEPD ~90 MBOEPD PRODUCTION1 CRUDE PROCESSING2 3.1 MT 2.9 MT ~12 MT GROUP CAPEX USD 323 MN USD 196 MN <1.7 BN (ORGANIC) NET DEBT/EBITDA 0.70X 0.16X <1.0X HSE – TRIR3 1.2 1.
Slide 5: USD 714mn EBITDA amid continued regulatory headwinds in Q1
USD 714MN EBITDA AMID CONTINUED REGULATORY HEADWINDS IN Q1 SUPPORTED MAINLY BY REFINING AND UPSTREAM CONTRIBUTION FINANCIALS Clean CCS EBITDA amounted to USD 714mn in Q1 2023 representing a 14% decrease YoY, while operating CF generation after working capital stood at USD 744mn in Q1 2023 Although t
Slide 6: TRIR is slightly above the ambitious tolerable limit of 2023
TRIR IS SLIGHTLY ABOVE THE AMBITOUS TOLERABLE LIMIT OF 2023 INTRODUCED PREVENTIVE MEASURES TRIGGERED IMPROVEMENTS TOTAL RECOVERABLE INJURY RATE (TRIR) TOTAL SCOPE 1 + 2 GHG EMISSIONS (Mt CO2e) Tolerable limit for 2023 (1.1) 1.40 1.40 8.0 1.4 -5% 1.27 1.21 7.6 1.2 1.13 1.16 7.6 0.1 1.0 0.3 7.2 7.2 0.
Slide 7: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 8: 14% lower EBITDA generation YoY in Q1 2023
14% LOWER EBITDA GENERATION YOY IN Q1 2023 LOWER UPSTREAM CONTRIBUTION PARTLY OFF-SET BY HIGHER DS, CS, GAS MIDSTREAM SEGMENT CLEAN CCS EBITDA (USD mn) COMMENTS -14% -34% 1,449 1,345 Upstream Q1 2023 EBITDA decreased in line with shrinking realized prices and the negative effect of the increased roy
Slide 9: Organic spending reached USD 196mn
ORGANIC SPENDING REACHED USD 196MN IN Q1 2023 39% BELOW BASE PERIOD SPENDING TOTAL GROUP CAPEX (USD mn) TOTAL GROUP CAPEX (USD mn) -40% -81% -40% -41% 1,014 1,014 459 568 568 29 135 330 331 334 330 334 7 7 300 422 84 245 447 29 197 197 1 224 278 1 157 69 78 4 222 13 78 15 162 2 23 93 92 100 134 58 2
Slide 10: Net income reached USD 458mn in Q1 2023
NET INCOME REACHED USD 458 MN IN Q1 2023 Q1 2023 EARNINGS (USD mn) – BELOW THE EBITDA LINE ITEMS 714 37 Other 4 Consumer Services 127 268 10 48 101 18 Downstream 299 751 541 483 458 Upstream 283 Clean CCS CCS EBITDA excl. Special items DD&A and Profit from Total finance Income from Profit before Inc
Slide 11: USD 48mn FX driven financial gain
USD 48MN FX DRIVEN FINANCIAL GAIN IN Q1 2023 ASSOCIATES CONTRIBUTION SUPPORTED BY PEARL CCS effect, gain / loss (USD mn) Comments -40% -136% 62 37 A CO2 quota related adjustment fully off-set replacement -103 modification Q1 2022 Q4 2022 Q1 2023 DD&A (USD mn) +33% -39% Q1 DD&A stood at normal levels
Slide 12: Operating cash flow before WC at USD 654mn
OPERATING CASH FLOW BEFORE WC AT USD 654MN IN Q1 2023 OPERATING CF FURTHER SUPPORTED BY A WORKING CAPITAL RELEASE OF USD 90MN OPERATING CASH FLOW FOR TOTAL OPERATION IN Q1 2023 (USD mn) 79 744 268 78 654 90 543 Discontinued Operation (UK) 2 Continuing operation 541 196 Profit Before Tax DD&A Income
Slide 13: Net debt to EBITDA decreased to 0.16x by end of Q1 2023
NET DEBT TO EBITDA DECREASED TO 0.16X BY END OF Q1 2023 IN LINE WITH MORE THAN 0.5BN SFCF GENERATION 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 18.1 17.5 16.0 0.97 1.0 15 0.79 0.82 12.0 0.74 11.4 0.65 0.65 10 0.5 0.41 6.3 0.30 5 0.16 0 2013 2014 2015 2016
Slide 14: Downstream Q1 2023 Results
DOWNSTREAM Q1 2023 RESULTS
Slide 15: Increasing Downstream contribution YoY
INCREASING DOWNSTREAM CONTRIBUTION YOY IN Q1 2023 TOTAL CLEAN CCS EBITDA AMOUNTED TO USD 299MN QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL CRUDE PROCESS (kt)1 TOTAL PRODUCT SALES (kt) Petchem R&M -6% -12% +18% -22% 861 5,168 4,652 4,836 4,601 741 -7% +1% 4,307 280 4,057 3,223 359 3,110 2,969 325 2,850
Slide 16: Supportive refining margin in Q1, strong correction in April
SUPPORTIVE REF. MARGIN IN Q1, STRONG CORRECTION IN APRIL PETROCHEMICAL MARGINS STILL REFLECT BOTTOM OF THE CYCLE MARKET CONDITIONS REFINING MARGIN (USD/bbl) COMMENTS +911% (Ex-Ural) refining margins remained strong over the Q1 2023 period 18 16.6 supported by high motor fuel cracks while the energy
Slide 17: DS contribution improved by USD 45mn
DS CONTRIBUTION IMPROVED BY USD 45MN IN Q1 2023 95% WINDFALL TAX HIT PROFITABILITY BY AROUND USD 190MN DOWNSTREAM CLEAN CCS EBITDA YoY, Q1 2022 VS. Q1 2023 (USD mn) COMMENTS R&M price: refining margins improved by around 9 107 USD/bbl on an ex-Ural basis and the Brent-Ural spread also jumped vs Q1 2
Slide 18: Consumer Services Q1 2023 Results
CONSUMER SERVICES Q1 2023 RESULTS
Slide 19: CS EBITDA almost doubled YoY
CS EBITDA ALMOST DOUBLED IN Q1 2023 YOY EASING REGULATORY INTERVENTION, STRONG NON-FUEL CONTRIBUTION SUPPORTED THE RESULTS QUARTERLY EBITDA (USD mn) EBITDA YoY, Q1 2023 VS. Q1 2022 (USD mn) +97% 42% +97% 4 15 9 126 127 1 -13 116 121 127 89 Retail tax 64 46 60 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
Slide 20: Q1 2023 fuel sales volume increased by 16%
Q1 2023 FUEL SALES VOLUME INCREASED BY 16% AVERAGE QUARTERLY THROUGHPUT REMAINED FLAT IN Q1 2023 TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE1 (mn litres) 1% 16% -6% 0.79 0.79 1 916 0.71 1 810 0.70 1 705 1 706 0.65 4Y CAGR: 1 452 1 465 +2.71% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1
Slide 21: Non-fuel margin expanded by 43% YoY
NON-FUEL MARGIN EXPANDED BY 43% YOY IN Q1 2023 WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL MARGIN STOOD AT 34% NON-FUEL MARGIN (USD MN – CONST. FX) TOTAL NON-FUEL TURNOVER (USD MN – CONST. FX) +26% +6% +43% +1% 101.9 375.5 361.8 91.8 92.5 330.3 340.4 83.9 286.5 287.4 70.3 64.5 Q4 2021 Q1 2022 Q2 20
Slide 22: Total fuel volume increased by 31% since Q1 2019
TOTAL FUEL VOLUME INCREASED BY 31% SINCE Q1 2019 RESULTING IN A SIGNIFICANT MARKET SHARE EXPANSION FUEL VOLUMES SOLD 2019 Q1 - 2023 Q1 (mn liters) COMMENTS +31.4% +16.4% 1,706 31% increase of total sold volumes in Q1 2023 vs Q1 2019: 1,465 1,299 1,300 493 Supported by a 15% uplift without the impact
Slide 23: Upstream Q1 2023 Results
UPSTREAM Q1 2023 RESULTS
Slide 24: E&P EBITDA reached USD 283mn
E&P EBITDA REACHED USD 283MN IN Q1 2023 WEAKENING COMMODITY PRICES AND GOVERNMENT INTERVENTIONS HINDERED THE RESULTS QUARTERLY EBITDA (ex-spec) (USD mn) OIL PRICES -44% -42% 140 113.8 134.0 120 101.4 100.9 102.4 100 103.9 79.7 93.6 94.5 107.5 81.2 68.8 73.5 88.9 80 81.8 97.1 77.8 61.1 76.0 64.3 69.0
Slide 25: Unit free cash flow at USD 25/bbl in Q1 2023
UNIT FREE CASH FLOW AT 25 USD/BBL IN Q1 2023 RESULTING IN A QUARTERLY USD 200+MN SFCF GENERATION QUARTERLY PRICE REALIZATION, EBITDA, FCF (USD/boe) 140 134 120 114 101 102 100 108 82 101 81 80 94 80 80 89 Brent price 72 60 63 62 54 78 Realized HC price 40 62 68 36 Unit EBITDA 52 50 20 40 25 Unit FCF
Slide 26: Lower oil and gas prices negatively impacted Q1 2023
LOWER OIL AND GAS PRICES NEGATIVELY IMPACTED Q1 2023 WINDFALL ROYALTY FURTHER AMPLIFIED THE IMPACT OF LOWER PRICES UPSTREAM EBITDA QoQ, Q4 2022 VS. Q1 2023 (USD mn) COMMENTS 492 Realized hydrocarbon prices decreased by 25 -17 475 USD/bbl QoQ as oil prices fell by 8 USD/bbl, gas Extra royalties (Hung
Slide 27: Production above 95 mboepd in Q1 2023
PRODUCTION ABOVE 95 MBOEPD IN Q1 2023 THANKS TO IMPROVED PRODUCTION IN HUNGARY AND PEARL PRODUCTION BY COUNTRY (mboepd) COMMENTS 94.1 95.9 93.5 92.4 Associated 90.5 90.9 89.5 companies* 8.9 9.7 10.8 9.1 9.1 9.2 Other 2.2 2.2 2.2 Q1 2023 QoQ (vs. Q4 2022): 2.2 2.2 4.6 4.6 4.6 4.5 2.2 KRI 4.5 4.3 CEE:
Slide 28: Group level unit OPEX remained below USD 6/bbl
GROUP LEVEL UNIT OPEX REMAINED BELOW 6 USD/BBL IN Q1 2023 DESPITE COST PRESSURE ACROSS THE VALUE CHAIN UNIT OPEX (USD/boe) UNIT OPEX YTD (USD/boe) +11% 6.2 6.2 GROUP (INCL. JVS/ASSOC.) FULLY CONSOLIDATED SUBS. 6.0 5.9 5.9 11% 11% 5.8 5.7 5.6 5.6 5.7 5.4 5.3 5.4 5.5 5.4 5.2 5.1 5.2 5.2 6.20 5.0 5.1 5
Slide 29: Supporting Slides
SUPPORTING SLIDES
Slide 30: MOL generated over USD 500mn simplified FCF
MOL GENERATED OVER USD 500 MN SIMPLIFIED FCF IN Q1 2023 WITH US AND DS BOTH CONTRIBUTING THEIR FAIR SHARE TO SIMPLIFIED FCF SIMPLIFIED FCF* (USD mn) +2% 0% 1,115 1,040 510 517 519 206 420 357 350 221 96 139 105 42 20 46 48 75 -45 -95 -90 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 US DS CS GM C&
Slide 31: Working interest based production grew slightly after Q3
WORKING INTEREST BASED PRODUCTION GREW SLIGHTLY AFTER Q3 QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY* (mboepd) 133.7 132.0 130.0 129.0 129.3 130.4 Associated companies* 15.4 16.2 15.5 15.7 15.5 17.2 Other 4.1 4.2 4.2 4.2 4.4 4.4 KRI 8.4 8.4 8.2 8.3 7.8 8.6 Pakistan 6.7 6.5 6.3 6.1 6.1 6.0 Azerb
Slide 32: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Croatia EXPLORATION EXPLORATION Üllő 3D seismic project was completed in Q1. Block DR-03: Preparatory activities for drilling V. Rastovac-1 ongoing. In 2023 4 new Shallow Gas wells were drilled, of which 3 were successful and PRODUCTION OPTIMIZATION confirmed
Slide 33: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Pakistan Russia EXPLORATION 2023 well workover program continued with 8 workovers delivered. TAL block (Operated): Kot West 3D seismic designing study – pilot project QonQ production has been kept at a steady level, while YoY production completed. decrease is due to
Slide 34: Upstream CAPEX by region and by type
UPSTREAM CAPEX BY REGION AND BY TYPE IN Q1 2023 ORGANIC CAPEX BY REGION AND BY TYPE (USD mn) HUN CRO KRI PAK AZE OTHER Total – Q1 2023 Total – Q1 2022 EXP 9.2 2.9 0.0 0.8 0.0 (0.6) 12.4 9.2 DEV 11.0 6.6 5.5 0.0 33.0 3.2 59.4 71.3 Other 2.0 1.1 1.9 0.1 0.8 0.0 5.8 3.4 Total – Q1 2023 22.2 10.7 7.4 0.
Slide 35: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) CAPEX (USD mn) +64% +29% 19 79 +110% -68% 61 13 48 38 9 34 6 4 15 2 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 KEY FINANCIALS (USD mn) COMMENTS YoY EBITDA rose by 64% YoY in Q1 2023 to USD 79mn, due to
Slide 36: Sustainability Indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE +1511% +230% 0% -1% +50% +50% 2.0 916.8 6 5 1.49 1.54 1000 1.40 1.40 1.41 1.40 4 1.5 4 3 1.0 500 2 2 2 2 0.5 138.2 51.1 8.6 6.0 41.9 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 20
Slide 37: 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 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
Slide 38: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 38
Slide 39: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 39
Slide 40: Consolidated Statement of Cash Flow
CONSOLIDATED STATEMENT OF CASH FLOW 40
Slide 41: External Parameters
EXTERNAL PARAMETERS Q12022) Gg ~—- Macro figures (average) 022 (21) [Brent dated (USD/bbI) 876 (2)_Ural Blend (USD/bb)” (22) 167,_Urate-Brent spread (USD/bb!) 98,7, (46) _ TTF gas price (EUR/MWh) 943 ()_ Premium unleaded gasoline 10 ppm (USD/t)”” 924 (8)|_|Gos oil - ULSD 10 ppm (usDAy 852 (24) Napht