43 slides from Mol Hungarian Oil & Gas Plc Class A's earnings presentation, Aug 4, 2023
Slide 1: Second Quarter 2023 Results
SECOND QUARTER 2023 RESULTS 4 AUGUST 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: On Track to Meet 2023 Guidance
ON TRACK TO MEET 2023 GUIDANCE 2022 H1 2023 2023 RESULTS4 RESULTS GUIDANCE NEW GROUP CLEAN CCS ~ USD 2.5 BN USD 4.7 BN USD 1.13 BN EBITDA OIL & GAS 92 MBOEPD 91.6 MBOEPD ~90 MBOEPD PRODUCTION1 CRUDE PROCESSING2 11.8 MT 5.9 MT ~12 MT GROUP CAPEX USD 1.52 BN USD 473 MN <1.7 BN (ORGANIC) NET DEBT/EBITD
Slide 5: EBITDA Under Pressure from Regulation and Market
EBITDA UNDER PRESSURE FROM REGULATION AND MARKET UPSTREAM AND DOWNSTREAM WEAKNESS MITIGATED BY STRONG PERFORMANCE IN CONSUMER SERVICES FINANCIALS Clean CCS EBITDA decreased by 70% YoY to USD 411mn in Q2 2023, while operating CF generation after working capital stood at USD 772mn in H1 2023 Windfall
Slide 6: TRIR Increased by 6% in H1 2023
TRIR INCREASED BY 6% IN H1 2023 TOTAL RECORDABLE INJURY RATE (TRIR) COMMENTS +6% TRIR increased by 6% YoY, standing at 1.34 in H1 2023 1.40 1.40 1.4 1.34 The deterioration in TRIR was due to a single incident 1.3 1.27 1.26 with one of our contractors in Pakistan 1.2 1.13 1.1 1.0 0.9 0.8 0.7 0.6 0.5
Slide 7: Government Take Continues to Have Significant Effect
GOVERNMENT TAKE CONTINUES TO HAVE SIGNIFICANT EFFECT EXTRA BURDEN ON 2022 LEVELS IN 2023, IMPLYING HIGHER TAKE RELATIVE TO PROFITS EXTRA GOVERNMENT TAKE 1 (USD MN) COMMENTS Ural-Brent spread Government take remains elevated in 2023 after 1,006 USD 2.3bn effect in 2022 Extra mining royalty 77 Extra r
Slide 8: Key Group Quarterly Financials
KEY GROUP QUARTERLY FINANCIALS
Slide 9: New Tax Weighed on Group EBITDA in Q2 2023
NEW TAX WEIGHED ON GROUP EBITDA IN Q2 2023 USD 315MN REVENUE-BASED EXTRA TAX FOR FY 2023 RECOGNISED AS AN EXPENSE IN Q2* SEGMENT CLEAN CCS EBITDA (USD mn) COMMENTS -70% -42% Upstream 1,355 1,449 Q2 2023 EBITDA decreased by 82%, in line with weaker price environment and the USD 122mn revenue-based ex
Slide 10: Organic Spending Reached USD 277mn in Q2 2023
ORGANIC SPENDING REACHED USD 277MN IN Q2 2023 USD 335MN INORGANIC CAPEX FOR OMV SLOVENIA IN Q2 2023 TOTAL GROUP CAPEX (USD mn) TOTAL GROUP CAPEX (USD mn) +83% +210% +83% +210% 1,014 1,014 459 612 612 334 335 330 330 335 29 330 334 71 197 87 7 29 278 422 152 78 4 197 119 224 1 39 36 78 15 33 33 256 2
Slide 11: Net Income Reached USD 687mn in H1 2023
NET INCOME REACHED USD 687 MN IN H1 2023 H1 2023 EARNINGS (USD mn) – BELOW THE EBITDA LINE ITEMS 1,125 96 Other 39 Consumer Services 301 532 20 87 98 33 1,221 Downstream 402 807 689 687 Upstream 382 Clean CCS CCS EBITDA excl. Special items DD&A and Profit from Total finance Income from Profit before
Slide 12: USD 50mn FX Driven Financial Gain in Q2 2023
USD 50MN FX DRIVEN FINANCIAL GAIN IN Q2 2023 ASSOCIATES CONTRIBUTION SUPPORTED BY PEARL CCS effect, gain / loss (USD mn) Comments +292% -224% +57% CCS gain impacted by replacement modification due to 37 59 96 -47 25 increasing Ural prices Q2 2022 Q1 2023 Q2 2023 H1 2022 H1 2023 DD&A (USD mn) -12% -2
Slide 13: Income Tax Expense Lower Due to Drop in Net Income
INCOME TAX EXPENSE LOWER DUE TO DROP IN NET INCOME INTERSEGMENT AND C&O EXPENSE DRIVEN BY ONE-OFF EVENTS Income tax expenses (USD mn) Comments Deferred 31 -30 -70 61 -101 tax: -107% -114% -77% Revenue based tax and other extra taxes lead to a decrease in income tax expense 198 386 101 -14 87 Q2 2022
Slide 14: Operating Cash Flow Generation Covered Organic Capex
OPERATING CASH FLOW GENERATION COVERED ORGANIC CAPEX SUPPORTED BY SIGNIFICANT RELEASE OF WORKING CAPITAL OPERATING CASH FLOW FOR TOTAL OPERATION IN H1 2023 (USD mn) 532 Discontinued 797 Operation (UK) 809 2 772 Continuing 473 operation 636 807 408 136 Profit Before Tax DD&A Income tax paid Other Ope
Slide 15: Net Debt to EBITDA Increased Q2-o-Q1 to 0.3x
NET DEBT TO EBITDA INCREASED Q2-O-Q1 TO 0.3X INDEBTEDNESS REMAINS AT LOW LEVELS WELL BELOW GUIDANCE THRESHOLD 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 0.97 1.0 15 0.82 12.0 0.74 11.4 0.65 0.65 10.0 10 0.5 0.41 6.3 0.30 0.30 5 0.16 0 2014 2015 2
Slide 16: Downstream Q2 2023 Results
DOWNSTREAM Q2 2023 RESULTS
Slide 17: Decreasing Downstream Contribution in Q2 2023
DECREASING DOWNSTREAM CONTRIBUTION IN Q2 2023 USD 193 MN REVENUE BASED EXTRA TAX HINDERED EBITDA GENERATION QUARTERLY CLEAN CCS EBITDA (USD mn) TOTAL CRUDE PROCESSED (kt)1 TOTAL PRODUCT SALES (kt) Petchem R&M -88% -66% -1% +18% 861 5,168 84 741 4,836 4,779 +7% +5% 4,601 4,307 277 310 4,063 3,110 2,9
Slide 18: Refining Margin Continued to Normalize in Q2 2023
REF. MARGIN CONTINUED TO NORMALIZE IN Q2 2023 WHILE PETCHEM MARGINS ARE SLOWLY INCREASING REFINING MARGIN (USD/bbl) COMMENTS Brent-based MOL Group refinery margin (USD/bbl) (Ex-Ural) refining margins weakened considerably in Q2 2023 driven by 18 Brent-based Complex refinery margin (MOL+Slovnaft) (US
Slide 19: DS EBITDA Hit by Lower Fuel Margins
DS EBITDA HIT BY LOWER FUEL MARGINS REVENUE-BASED TAX ALSO CONTRIBUTED TO THE DECLINE DOWNSTREAM CLEAN CCS EBITDA YoY, Q2 2022 VS. Q2 2023 (USD mn) COMMENTS 861 R&M price: ex-Ural refining margins deteriorated by over 10 USD/bbl, compared to Q2 2022 and the Brent- Revenue based 402 extra tax Ural sp
Slide 20: Consumer Services Q2 2023 Results
CONSUMER SERVICES Q2 2023 RESULTS
Slide 21: CS EBITDA Almost Quadrupled Q2 2023 YoY
CS EBITDA ALMOST QUADRUPLED Q2 2023 YOY BOTH FUEL & NON-FUEL CONTRIBUTION SUPPORTED THE RESULTS QUARTERLY EBITDA (USD mn) EBITDA YoY, Q2 2023 VS. Q2 2022 (USD mn) +279% 38% +253% 175 163 12 8 17 175 91 121 127 46 89 64 46 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 EBITDA Q2 2022 Fuel volume Non
Slide 22: Q2 2023 Fuel Sales Volume Increased by 16%
Q2 2023 FUEL SALES VOLUME INCREASED BY 16% AVERAGE QUARTERLY THROUGHPUT INCREASED SLIGHTLY IN Q2 2023 YOY TOTAL VOLUMES SOLD (mn litres) FUEL THROUGHPUT/SITE1 (mn litres) 3% +16% +16% 4Y CAGR: +3.18% 0.91 0.93 1 916 1 977 0.82 1 810 0.79 1 705 1 706 1 465 0.64 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
Slide 23: Non-Fuel Margin Expanded by 40% YoY in Q2 2023
NON-FUEL MARGIN EXPANDED BY 40% YOY IN Q2 2023 WHILE THE NON-FUEL MARGIN SHARE TO THE TOTAL MARGIN REMAINED FLAT AND STOOD AT 34% NON-FUEL MARGIN (USD MN – CONST. FX) TOTAL NON-FUEL TURNOVER (USD MN – CONST. FX) +40% +27% +28% +17% 117.4 421.7 101.9 375.5 361.8 91.8 92.5 330.3 340.4 83.9 287.4 64.5
Slide 24: Total Fuel Volume Increased by 31% Since Q2 2019
TOTAL FUEL VOLUME INCREASED BY 31% SINCE Q2 2019 RESULTING IN A SIGNIFICANT MARKET SHARE EXPANSION FUEL VOLUMES SOLD 2019 Q2 - 2023 Q2 (mn liters) COMMENTS +31% +16% 1,977 31% increase of total sold volumes in Q2 2023 vs Q2 2019: 1,705 1,507 1,473 597 Supported by a 16% uplift without the impact of
Slide 25: Upstream Q2 2023 Results
UPSTREAM Q2 2023 RESULTS
Slide 26: E&P EBITDA Declined to USD 99mn in Q2 2023
E&P EBITDA DECLINED TO USD 99MN IN Q2 2023 HUNGARIAN REVENUE BASED TAX HAD USD 122MN ONE-OFF EFFECT QUARTERLY EBITDA (ex-spec) (USD mn) OIL PRICES 134.0 -83% -65% 140 113.8 120 101.4 100.9 107.5 103.9 100 97.1 88.7 102.4 79.7 93.6 94.5 77.8 78.1 68.8 73.5 81.2 80 61.1 76.0 74.4 69.0 81.8 81.8 60 64.
Slide 27: Unit Free Cash Flow at 3 USD/bbl in Q2 2023
UNIT FREE CASH FLOW AT 3 USD/BBL IN Q2 2023 GOVERNMENT TAKE ALSO DENTED UNIT EBITDA, FCF QUARTERLY PRICE REALIZATION, EBITDA, SFCF (USD/boe) 140 134 120 114 101 102 100 108 101 81 94 78 80 80 Brent price 72 89 60 63 62 78 Realized HC price 40 67 62 68 36 52 44 20 25 15 Unit EBITDA 0 3 Unit FCF** Q1
Slide 28: Lower Prices and Windfall Taxation Leading to Decreasing EBITDA
LOWER PRICES AND WINDFALL TAXATION IN HUNGARY LEADING TO DECREASING EBITDA UPSTREAM EBITDA QoQ, Q1 2023 VS. Q2 2023 (USD mn) COMMENTS 283 284 Realized hydrocarbon prices decreased by -11 0 -72 USD/bbl in line with Brent and Gas QoQ market prices -21 +2 0 -89 Production 8% lower due to export shutdow
Slide 29: Production Dropped but H1 Still Above 2023 Target
PRODUCTION DROPPED BUT H1 STILL ABOVE 2023 TARGET KRI EXPORT PIPELINE SHUT HINDERING PERFORMANCE PRODUCTION BY COUNTRY (mboepd) COMMENTS 94.1 95.9 Series 92.4 90.9 91.6 90.5 9.7 10.8 87.3 88.3 Associated 9.1 90 mboepd 2023 guidance 9.2 9.1 10.0 companies* 2.2 2.2 9.2 2.2 2.2 4.6 2.1 4.6 4.5 2.2 Othe
Slide 30: Group Level Unit Opex Remained Below 6 USD/boe in Q2 2023
GROUP LEVEL UNIT OPEX REMAINED BELOW 6 USD/BBL IN Q2 2023 REPRESENTING A 22% INCREASE YOY UNIT OPEX (USD/boe) UNIT OPEX YTD (USD/boe) 6.5 +22% GROUP (INCL. JVS/ASSOC.) FULLY CONSOLIDATED SUBS. 6.4 +17% 6.3 +16% 6.0 5.9 5.7 5.6 5.9 5.7 5.5 5.4 5.3 5.2 5.5 5.1 6.31 5.75 5.37 5.2 4.95 5.0 5.1 5.0 4.8 4
Slide 31: Supporting Slides
SUPPORTING SLIDES
Slide 32: SFCF Deteriorated in Q2 in Line with External Environment
SFCF DETERIORATED IN Q2 IN LINE WITH EXTERNAL ENVIRONMENT NEW REVENUE BASED TAX HAD SIGNIFICANT IMPACT SIMPLIFIED FCF* (USD mn) -87% -74% 1,050 1,115 505 517 520 500 206 709 221 134 12 105 142 75 54 10 7 -16 -90 -57 -181 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 US DS CS GM C&O (incl. inters)
Slide 33: Working Interest Based Production Declined Mainly Due to KRI Export Pipeline Shutdown
WORKING INTEREST BASED PRODUCTION DECLINED MAINLY DUE TO KRI EXPORT PIPELINE SHUTDOWN QUARTERLY WORKING INTEREST PRODUCTION BY COUNTRY* (mboepd) 132.0 130.0 129.0 129.3 130.4 117.4 Associated 16.2 15.5 15.7 15.5 17.2 15.7 companies* Other 4.2 4.2 4.2 4.4 4.4 4.2 8.4 8.2 8.3 7.8 0.1 KRI 8.6 5.9 Pakis
Slide 34: Upstream: Operational Update (1)
UPSTREAM: OPERATIONAL UPDATE (1) Hungary Croatia EXPLORATION EXPLORATION Vecsés-2 extended well test continuation. Block DR-03: V. Rastovac-1 drilling finished, well test to follow; preparatory activities for Obradovci-1 J drilling are ongoing. One Shallow Gas well was successfully drilled and well
Slide 35: Upstream: Operational Update (2)
UPSTREAM: OPERATIONAL UPDATE (2) Pakistan Russia EXPLORATION 2023 well workover program continued with 4 workovers delivered. TAL block (Operated): Kot West 3D seismic designing study contract signing QoQ production has been kept at a steady level; YoY production decreased in progress. due to reduce
Slide 36: Upstream Capex by Region and by Type in Q2 2023
UPSTREAM CAPEX BY REGION AND BY TYPE IN Q2 2023 ORGANIC CAPEX BY REGION AND BY TYPE (USD mn) HUN CRO KRI PAK AZE OTHER Total – H1 2023 Total – H1 2022 EXP 14.6 5.7 0.0 (3.1) 0.0 (0.2) 17.0 13.7 DEV 23.9 17.4 10.5 0.0 67.4 8.1 127.3 130.1 Other 4.8 9.7 4.2 0.1 1.8 0.1 20.7 11.8 Total – H1 2023 43.3 3
Slide 37: Gas Midstream: Key Financials
GAS MIDSTREAM: KEY FINANCIALS EBITDA (USD mn) CAPEX (USD mn) +286% -25% -17% +22% 13 79 61 60 9 48 38 6 5 4 15 2 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 KEY FINANCIALS (USD mn) COMMENTS YoY YoY EBITDA rose by 286% YoY in Q2 2023 to USD 59.5 mn
Slide 38: Sustainability Indicators
SUSTAINABILITY INDICATORS CO2 under ETS (mn t) HC Spill above 1bbl (m3) Tier1 PSE +1% +1% -80% -67% 2.0 -95% -71% 6 5 1.54 1000 1.40 1.40 1.41 1.40 1.41 916.8 4 1.5 4 3 1.0 155.4 2 2 100 2 1 0.5 41.9 44.7 8.6 6.0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
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 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 Q2
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 Q12023 ©@22023 @22022 Che Macro figures (overage) ‘HI 2023 ‘HI20220 Ch%® 81,2) 78) 13,9) (3) Brent dated (USD/bbI) 79,7 107.9 (26) 315 503 776) (27),_|UralBlend (usb/ob)™ 538 827 (35) (325) 233) (34.8) (36)|_[Urok-Brentspread (UsD/eb). (7a) _(32)__—1300 537 351 2|__(65)|_| TTF go