Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Q3 2021 Earnings Presentation
42 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, Nov 5, 2021
Slide 1: Third Quarter 2021 Results
THIRD QUARTER 2021 RESULTS 5 NOVEMBER 2021
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: Agenda
AGENDA 1 HIGHLIGHTS OF THE QUARTER 4 2 KEY GROUP QUARTERLY FINANCIALS 9 3 DOWNSTREAM QUARTERLY RESULTS 16 4 CONSUMER SERVICES QUARTERLY RESULTS 20 5 UPSTREAM QUARTERLY RESULTS 24 6 SUPPORTING SLIDES 30 3
Slide 4: Highlights of the Quarter
HIGHLIGHTS OF THE QUARTER
Slide 5: Strong Q1-Q3 EBITDA driven by supportive macro
STRONG Q1-Q3 EBITDA DRIVEN BY SUPPORTIVE MACRO ANNUAL EBITDA GUIDANCE RAISED AGAIN 2020 Q1-Q3 2021 2021 RESULTS RESULTS GUIDANCE GROUP CLEAN AROUND OR ABOVE USD 2.05 BN USD 2.58 BN CCS EBITDA USD 3.2BN GROUP CAPEX USD 1.41 BN USD 996 MN USD ~1.7BN (ORGANIC) AROUND OR ABOVE SIMPLIFIED FCF1 USD 636 MN
Slide 6: High commodity prices support 1bn+ quarterly CCS EBITDA delivery
HIGH COMMODITY PRICES SUPPORT 1BN+ QUARTERLY CCS EBITDA DELIVERY EXTERNAL ENVIRONMENT* VS MOL CLEAN CCS EBITDA (USD MN) 100% 1200 85% 1000 70% 800 55% 600 40% 400 25% 200 10% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 12 12
Slide 7: 63% uplift in CCS EBITDA generation YTD 2021
63% UPLIFT IN CCS EBITDA GENERATION YTD 2021 DRIVING SIMPLIFIED FCF DELIVERY ABOVE USD 1.5BN OVER THE SAME PERIOD FINANCIAL HIGHLIGHTS Clean CCS EBITDA came in at USD 1,025mn in Q3 2021, 68% higher YoY driven by stronger oil and gas prices, supportive Downstream macro conditions and rebounding regio
Slide 8: ESG credentials recognized by Sustainalytics
ESG CREDENTIALS RECOGNIZED BY SUSTAINALYTICS SAFETY HIGHLIGHTS (TRIR/mn worked hrs) ESG RECOGNITION Sustainalytics ESG Risk Rating Report: 7th lowest risk among 256 global O&G peers (industry group): 3rd percentile (Top 3%) 1.5 1.7 1.3 1.4 1.3 1.1 3rd lowest risk among 49 global integrated O&G peers
Slide 9: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 10: Q3 2021 EBITDA topped USD 1bn
Q3 2021 EBITDA TOPPED USD 1BN MOSTLY E&P AND PETROCHEMICALS UPLIFT DROVE 63% EBITDA INCREASE YTD 2021 SEGMENT CLEAN CCS EBITDA (USD mn) COMMENTS +68% +15% Upstream 1,025 893 Q3 2021 EBITDA grew further QoQ on the back of favourable macro 396 conditions, however the positive impact of rising oil and
Slide 11: Organic spending almost reached USD 1.0bn in Q1-Q3 2021
ORGANIC SPENDING ALMOST REACHED USD 1.0BN IN Q1-Q3 2021 EXCEEDING THE BASE BY 8% TOTAL GROUP CAPEX (USD mn) TOTAL GROUP CAPEX (USD mn) 1,824 1,824 490 +18% 1 1,498 490 366 360 305 10 1 366 360 297 1 16 305 297 10 1 430 1 106 92 190 79 305 291 254 201 140 150 144 34 37 136 7 32 26 21 80 68 42 49 59 5
Slide 12: Simplified FCF up by 140% YTD 2021
SIMPLIFIED FCF UP BY 140% YTD 2021 ALL SEGMENTS GENERATED POSITIVE SIMPLIFIED FCF IN Q1-Q3 2021 SIMPLIFIED FCF* (USD mn) COMMENTS +118% +24% Group-level simplified FCF (Clean CCS EBITDA less organic capex) 666 537 rose significantly to USD 1,587mn in Q1-Q3 2021 YoY on a heavily Covid- 304 19 affecte
Slide 13: Net income jumped on higher EBITDA and inventory gains
NET INCOME JUMPED ON HIGHER EBITDA AND INVENTORY GAINS Q1-Q3 2021 EARNINGS (USD mn) – BELOW THE EBITDA LINE ITEMS 2,583 Cash tax: USD 176mn 123 0 Deferred tax: USD -173mn Consumer Services 490 Q3: USD -111mn Q3: USD 16mn 1,200 Q3: 15mn negative CCS modification Downstream 1,137 58 26 3 75 2,706 1,50
Slide 14: Robust operating cash flow delivery in Q1-Q3 2021
ROBUST OPERATING CASH FLOW DELIVERY IN Q1-Q3 2021 PARTLY OFFSET BY INCREASING WORKING CAPITAL OPERATING CASH FLOW IN Q1-Q3 2021 (USD mn) 2,832 108 266 739 2,093 1,200 1,474 USD 332mn NWC build in Q3 996 Profit Before Tax DD&A Income tax paid Other Operating CF before WC Change in WC Operating CF Org
Slide 15: Net debt to EBITDA further decreased in Q1-Q3 2021
NET DEBT TO EBITDA FURTHER DECREASED IN Q1-Q3 2021 NET DEBT TO EBITDA (x) GEARING (%) 2.0 30 28 27 25 25 1.61 25 1.48 22 1.5 1.38 21 1.31 20 20 20 19 17 16 0.97 1.0 0.91 15 0.79 0.82 0.78 12 0.74 0.65 10 0.5 0.41 5 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 H1 2021 Q1-Q3 2012 2013 2014 2
Slide 16: Downstream Q3 2021 Results
DOWNSTREAM Q3 2021 RESULTS
Slide 17: Downstream CCS EBITDA more than doubled in Q3 2021 YoY
DOWNSTREAM CCS EBITDA MORE THAN DOUBLED IN Q3 2021 YOY MAINLY DRIVEN BY VERY STRONG PETROCHEMICALS CONTRIBUTION QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL PRODUCT SALES (kt) Petchem R&M +116% -2% Total petrochemicals products 3rd party sales Own production 447 436 +7% +11% 5,253 4,914 4,734 4,518 367
Slide 18: Demand driven refining margin improvement continues
DEMAND DRIVEN REFINING MARGIN IMPROVEMENT CONTINUES PETCHEM MARGIN NORMALIZING SOMEWHAT FROM Q2 2021 HIGHS REFINERY MARGIN1 (USD/bbl) COMMENTS 8.0 Widening Brent-Ural spread and recovering motor fuel cracks lent 8 +470% further support to the refinery margin in Q3 2021, partially offset by 7.3 6.7 6
Slide 19: Outstanding macro drives YoY and YTD EBITDA uplift
OUTSTANDING MACRO DRIVES YOY AND YTD EBITDA UPLIFT YTD 2021 CCS EBITDA DELIVERY ABOVE USD 1.1BN WITH PETCHEM CONTRIBUTING OVER 60% DOWNSTREAM CLEAN CCS EBITDA YoY, Q3 2021 VS. Q3 2020 (USD mn) COMMENTS 436 Petchem margin rose materially YoY (+EUR 327/t) on 17 16 421 16 the back of favourable polymer
Slide 20: Consumer Services Q3 2021 Results
CONSUMER SERVICES Q3 2021 RESULTS
Slide 21: Q3 2021 EBITDA reached USD 211mn
Q3 2021 EBITDA REACHED USD 211MN SUPPORTED BY SALES VOLUMES AND NON-FUEL MARGIN UPLIFT QUARTERLY EBITDA (USD mn) EBITDA YoY, Q3 2021 VS. Q3 2020 (USD mn) +15% +14% 16 15 208 211 3 183 24 211 183 164 111 128 115 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 EBITDA Q3 2020 Fuel volume Non-fuel margi
Slide 22: Q3 2021 fuel sales volume surpassed pre-COVID levels
Q3 2021 FUEL SALES VOLUME SURPASSED PRE-COVID LEVELS RESULTING IN IMPROVING FUEL THROUGHPUT TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE (mn litres) 9% 9% 0.92 0.93 1 727 0.86 0.88 0.85 1 689 1 589 4Y CAGR: 1 473 +1.8% 1 330 1 182 1 218 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2019
Slide 23: Solid non-fuel margin expansion of 23% in Q3 2021 YoY
SOLID NON-FUEL MARGIN EXPANSION OF 23% IN Q3 2021 YOY WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL ALSO INCREASED FURTHER NON-FUEL MARGIN (USD MN) NON-FUEL MARGIN / SITE (’000 USD) +23% +22% 51.9 4 YEAR 44.0 42.6 CAGR: 38.6 +13% 32.2 96.9 79.0 81.1 68.8 65.1 60.4 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2
Slide 24: Upstream Q3 2021 Results
UPSTREAM Q3 2021 RESULTS
Slide 25: Very strong Q3 2021 EBITDA on the back of favourable macro
VERY STRONG Q3 2021 EBITDA ON THE BACK OF FAVOURABLE MACRO COUPLING WITH STRONG SIMPLIFIED FCF GENERATION QUARTERLY EBITDA (ex-spec) (USD mn) HYDROCARBON PRICES +87% +18% 100 94.0 90 80 73.5 396 68.8 68.8 308 336 70 69.8 61.9 63.3 61.1 65.2 212 181 64.8 64.3 112 60 58.4 60.2 57.6 50.3 55.2 53.8 50 4
Slide 26: Unit free cash flow reached 32 USD/boe in Q3 2021
UNIT FREE CASH FLOW REACHED 32 USD/BBL IN Q3 2021 ROBUST CASH GENERATION ON EXISTING BARRELS QUARTERLY PRICE REALIZATION, EBITDA, FCF (USD/boe) 80 73 69 Brent price 70 61 64 60 Realized HC price 55 50 44 47 43 40 43 Unit EBITDA 37 36 29 33 32 30 24 20 20 17 32 Unit FCF* 10 11 22 24 13 8 0 5 Q2 2020
Slide 27: Soaring oil and gas prices boosted Q3 and YTD 2021 results
SOARING OIL AND GAS PRICES BOOSTED Q3 AND YTD 2021 RESULTS UPSTREAM EBITDA QoQ, Q3 2021 VS. Q2 2021 (USD mn) COMMENTS 397 396 Realized gas prices increased by 50% QoQ 10 0 1 2 0 336 344 60 driven by spot market gas uplift favourably 7 179 impacting Hungarian and Croatian non- 217 regulated sales Pos
Slide 28: Production reached 107 mboepd in Q3 2021
PRODUCTION REACHED 107 MBOEPD IN Q3 2021 THE DECREASE IS MAINLY DRIVEN BY LOWER NET ENTITLEMENT BARRELS AT ACG QOQ QUARTERLY PRODUCTION BY COUNTRY (mboepd) COMMENTS 126.9 125.4 Q3 2021 QoQ (vs. Q2 2021): Estimate 8.9 ACG: -2.6 mboepd as a result of higher oil prices reducing net 117.3 9.1 116.8 Asso
Slide 29: Unit opex remained at very competitive level in Q3 2021
UNIT OPEX REMAINED AT VERY COMPETITIVE LEVEL IN Q3 2021 UNIT OPEX (USD/boe) COMMENTS 7.9 Unit opex remained largely flat at a competitive level of 5.9 USD/boe 8.0 7.5 7.0 7.1 7.2 +3% (both on Group level, including JVs and associates and consolidated 6.9 7.0 6.4 6.5 6.5 6.6 subsidiaries) 6.3 6.4 6.5
Slide 30: Supporting Slides
SUPPORTING SLIDES
Slide 31: Upstream & Downstream EBITDA changes
UPSTREAM & DOWNSTREAM EBITDA CHANGES UPSTREAM EBITDA YoY Q3 2021 VS. Q3 2020 (USD mn) 84 397 396 18 0 5 1 255 179 212 217 EBITDA ex- Prices & FX Volumes Exploration Lifting cost Other EBITDA ex-oneoff ACG PSA- EBITDA ex- Depreciation EBIT ex-oneoff oneoff Q3 2020 Expenses Q3 2021 and ex- related adj
Slide 32: Working interest based production diminished slightly QoQ in Q3 2021
WORKING INTEREST BASED PRODUCTION DIMINISHED SLIGHTLY QOQ IN Q3 2021 QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY (mboepd) 149.4 152.1 156.6 156.1 148.3 147.3 Associated companies* 14.9 15.3 15.6 16.2 15.5 15.4 Other 4.6 4.7 4.8 4.7 4.6 4.4 6.7 6.4 7.0 8.0 8.1 7.7 KRI UK 16.8 15.2 17.2 14.5 12.9
Slide 33: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Croatia Exploration: Exploration: Komádi-55 well was tied-in at the end of August. Well is in production Block DR-02: Ždala-1 well drilled, plugged and abandoned. Well site GB-K-13 shallow gas well was deemed sub-commercial after the well restoration is in pr
Slide 34: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Pakistan Kurdistan Region of Iraq Exploration: Shaikan production reached 4.3 mboepd in Q3 2021 (net to MOL) as a result of the successful workover operations completed in 2020 In TAL block, 3D seismic data processing/reprocessing project (~3200 sq.km) has been compl
Slide 35: 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 UK NOR AZE OTHER Total – Q1-Q3 2021 Total – Q1-Q3 2020 EXP 11.4 3.6 0.0 6.0 0.0 44.1 0.0 0.3 65.4 48.9 DEV 23.7 19.8 5.8 0.2 11.3 0.2 118.0 17.5 196.5 153.8 Other 10.3 11.1 1.2 0.3 1.5 0.0 0.9 0.0 25.3
Slide 36: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) ORGANIC CAPEX (USD mn) -30% +31% 48 26 45 43 42 23 21 30 23 7 8 5 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 KEY FINANCIALS (USD mn) COMMENTS EBITDA fell by 30% YoY in Q3 2021 to USD 30mn, as both tran
Slide 37: Sustainability indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE +9% 249.2 5.0 250 5 2.0 1.7 4.0 4.0 1.5 1.4 1.5 1.5 1.5 200 4 1.5 150 3 1.0 88.5 2.0 100 64.1 2 1.0 1.0 0.5 50 20.0 1 4.7 4.4 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2
Slide 38: Macro indicators
MACRO INDICATORS BRENT (USD/bbl) MOL REFINERY MARGIN (USD/bbl) HUF/USD (Q avg.) 120 10 MOL Group Complex 320 100 8 300 280 80 6 260 60 4 240 40 2 220 20 0 200 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 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
Slide 39: Consolidated statement of profit or loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS YoY Q2 2021 Q3 2021 Q3 2020 Income Statement (HUF mn) Q1-Q3 2021 Q1-Q3 2020 Ch % Ch % 1 434 861 1 649 384 1 049 854 57 Net sales 4 189 352 2 993 253 40 2 633 8 910 15 957 (44) Other operating income 22 395 71 406 (69) 1 437 494 1 658 294 1 065 811 56 Total op
Slide 40: Consolidated statement of financial position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Balance Sheet (HUF mn) 30 Sep 2021 31 Dec 2020 Ch % Assets Equity and Liabilities Non-current assets Equity Property, plant and equipment 3 232 690 3 232 577 0 Share capital (7) 78 163 78 249 0 Intangible assets 388 125 397 871 (2) Retained earnings and o
Slide 41: Consolidated statement of cash flow
CONSOLIDATED STATEMENT OF CASH FLOW YoY Q2 2021 Q3 2021 Q3 2020 Cash Flow (HUF mn) Q1-Q3 2021 Q1-Q3 2020 Ch % Ch % 174 826 162 240 60 768 167 Profit / (loss) before tax 440 587 (24 271) n.a. Adjustments to reconcile profit before tax to net cash provided by operating activities 122 720 112 390 138 5
Slide 42: External parameters
EXTERNAL PARAMETERS YoY Q2 2021 Q3 2021 Q3 2020 Macro figures (average) Q1-Q3 2021 Q1-Q3 2020 Ch % Ch % 69.0 73.5 43.0 71 Brent dated (USD/bbl) 67.9 41.1 65 67.0 70.6 43.2 63 Ural Blend (USD/bbl)(11) 65.8 41.0 61 (1.9) (2.3) 0.3 n.a. Urals-Brent spread (USD/bbl) (1.8) (0.6) 201 25.0 46.7 8.9 426 CEG