Slide 1: OMV Petrom Q2/16 conference call
OMV Petrom Q2/16 Cover option 1: Insert a cover conference call picture and align grouped text Mariana Gheorghe, CEO freely on page, Place, xx. Month (28pt) 2013 (16pt) August 10, 2016
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, constituting or forming part of, any actual offer to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares issued by the Company or any
Slide 3: Key messages Q2/16
Key messages Q2/16 ► Positive free cash flow supported by efficiency enhancement measures ► Upstream result impacted by lower oil and gas prices, partly offset by cost reduction initiatives ► Downstream Oil affected by weaker refining margins and turnaround; retail volumes up ► Improved operational
Slide 4: Safety remains our top priority
Safety remains our top priority LTIR1 1.0 Operational safety – our key focus LTIR substantially improved > 65% 0.5 0.48 0.49 reduction In the last 12 months the combined LTIR 0.42 for OMV Petrom Group was constantly 0.30 below IOGP2 benchmark 0.33 0.16 0.17 0.0 2010 2011 2012 2013 2014 2015 6m
Slide 5: Romanian macroeconomic and fiscal environment
Romanian macroeconomic and fiscal environment Q1/16 GDP growth1: +4.2% CPI annual inflation: -0.7% end-June;12-month average: -2.0% Macroeconomic Budget balance: -0.5% of GDP end-June environment FDI: EUR 1.1 bn in Jan-May, +15% higher yoy Investment grade rating: stable Demand in Q2/16
Slide 6: Economic environment
Economic environment Oil price (USD/bbl) and FX (USD/RON) OMV Petrom Indicator refining margin (USD/bbl) 90 4.5 10 8.95 4.02 3.98 6.82 61 44 30 3.0 5 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Avg Urals price (left scale) Avg USD/RON (right scale) Gas prices (EUR/MWh)1 Power prices
Slide 7: Financial performance 6m/16
Financial performance 6m/16 Key financials 6m/16 6m/15 Δ (%) in RON mn EBIT 561 1,280 (56) Net income attributable to stockholders 408 1,041 (61) Clean CCS EBIT 638 1,251 (49) Clean CCS net income 458 914 (50) attributable to stockholders 1,2 Clean CCS 0.0081 0.0161 (50) Earnings Per Share (RON) Cas
Slide 8: CAPEX discipline and efficiency continued
CAPEX discipline and efficiency continued Group CAPEX Well on track to reduce CAPEX incl. capitalized E&A, in RON bn 6m/16 CAPEX down by RON 732 mn, -35% (20)% yoy 3.9 Upstream CAPEX down by RON 883 3.2 mn mainly due to projects prioritization Downstream CAPEX up by RON 149 3.5 mn mainly due t
Slide 9: Significant reduction of E&A spending
Significant reduction of E&A spending E&A expenditure Significantly lower E&A in RON bn ► Peak level reached in 2015, due to Neptun Deep drilling campaign and onshore deep (60)% exploration (JV with Repsol) 1.4 ► Lower activity level in 2016 in the Black Sea due to finalization of drilling activitie
Slide 10: OMV Petrom Q2/16 conference call - CFO
OMV Petrom Q2/16 Cover option 1: Insert a cover conference call picture and align grouped text Andreas Matje, CFO freely on page, Place, xx. Month (28pt) 2013 (16pt) August 10, 2016
Slide 11: Income statement summary
Income statement summary Clean CCS net income Q2/16 Q2/15 Δ (%) attributable to stockholders in RON mn in RON mn EBIT 218 786 (72) 481 Financial result (86) 43 n.m. Taxes (15) (138) 89 Net income 117 691 (83) thereof attributable to non-controlling interests (1.09) (1.46) 25 127 thereof attributable
Slide 12: Cash flow
Cash flow in RON mn Q2/16 Q1/16 Q2/15 Profit/(loss) before tax 132 343 829 Depreciation, amortization and impairments 917 830 974 Net interest received/(paid) (21) (13) 142 Tax on profit paid (25) (81) (147) Other 1 (138) (64) Sources of funds 1,003 942 1,735 Change in net working capital (120) (54)
Slide 13: Key financials
Key financials in RON mn Q2/16 Q2/15 Δ (%) Special items and CCS effect in Q2/16 in RON mn Clean CCS EBIT 229 657 (65) 229 44 (55) Thereof Upstream 210 551 (62) 218 Downstream 135 220 (39) Thereof Downstream Oil 166 304 (45) Downstream Gas (31) (84) 63 Corporate and Other (8) (10) 26 Clean CCS gains
Slide 14: Upstream – Clean EBIT impacted by lower oil prices
Upstream – Clean EBIT impacted by lower oil prices Clean EBIT Q2/16 vs. Q2/15 in RON mn Realized oil price in USD/bbl down by 551 31% Group hydrocarbon production decreased by 2% (603) 210 Decreased exploration expenses due to lower spending in Neptun block 228 Other: lower production cost a
Slide 15: Upstream – Key performance indicators
Upstream – Key performance indicators Hydrocarbon production in kboe/d Q2/16 vs. Q2/15 181 174 176 175 177 ► Total hydrocarbon production declined 85 83 81 81 81 by 2% due to: ► reduced investments 96 91 96 94 96 ► increased number of uneconomic wells Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 ► planned maintena
Slide 16: Downstream – Lower contribution to Group results
Downstream – Lower contribution to Group results Clean CCS EBIT Q2/16 vs. Q2/15 in RON mn 220 Downstream Oil 44 Indicator refining margin down 24%, impacted by lower product spreads (138) 135 304 Approx. one month planned refinery turnaround 166 Retail volumes supported by higher market demand
Slide 17: Downstream Oil – Key performance indicators
Downstream Oil – Key performance indicators Refinery utilization rate in % -13pp Q2/16 vs. Q2/15 94 92 94 81 68 Refinery utilization rate down to 68% due to the planned turnaround Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Fuel and losses at 9.5% Total refined product sales dropped by 7% Group refined prod
Slide 18: Downstream Gas – Key performance indicators
Downstream Gas – Key performance indicators Gas sales1 in TWh +2% Q2/16 vs. Q2/15 13.3 14.0 10.6 10.9 10.7 Higher gas sales volumes, supported by integration with the Brazi power plant, despite the 16% drop in national Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 demand2 Net electrical output Significantly hig
Slide 19: Strong balance sheet despite difficult market conditions
Strong balance sheet despite difficult market conditions Net debt development in RON bn Main developments 2 1.37 Gearing ratio stable at approx. 5% 1.29 1.26 1 Equity ratio 0 ► end-2015: 62% Dec. 31, 2015 March 31, 2016 June 30, 2016 ► end-June 2016: 64% Gearing 5% 5% 5% ratio, % Clean CCS ROACE
Slide 20: Outlook 2016
Outlook 2016 ► Oil price: Brent annual average estimated at USD 40/bbl ► Refining margins: H2/16 level expected to be below H1/16 ► Fuels market: Demand supported by low oil prices and increased private consumption; higher competition ► Gas market: Demand expected to decline; prices to reflect stron
Slide 21: OMV Petrom Q2/16 conference call - EB Member
OMV Petrom Q2/16 Cover option 1: Insert a cover conference call picture and align grouped text Peter Zeilinger, EB Member freely on page, Place, xx. Month (28pt) 2013 (16pt) August 10, 2016
Slide 22: Upstream High safety and efficiency focus
Upstream High safety and efficiency focus Upstream Romania LTIR Operations safety - our top priority LTIR improvement sustainable 1.0 > 60% 6m/16: kept at the lowest level since privatization reduction 0.8 Lower than IOGP1 international benchmark 0.63 0.60 0.6 0.53 Reduction of GHG2 intens
Slide 23: Upstream Key performance indicators
Upstream Key performance indicators Hydrocarbon production Group, kboe/d 6m/16 vs. 6m/15 KAZ RO Group 182.6 180.3 178.6 182.3 176.3 11.2 8.9 9.0 9.3 8.7 ► Total hydrocarbon production lower by 3% 173.0 reflecting our efforts to manage decline in current low 171.4 171.4 169.6 167.6 oil price environm
Slide 24: Upstream Production costs
Upstream Production costs Production costs, USD/boe Production cost reduced by 11% in 6m/16 yoy -11% 13.70 ► Lower services and materials costs, due to 12.17 contract renegotiations and strict cost management ► Lower personnel expenses, due to rightsizing ► Favorable FX effects, more than compensati
Slide 25: Upstream Group CAPEX was adjusted to the low oil price environment
Upstream Group CAPEX was adjusted to the low oil price environment Upstream CAPEX (excl. E&A) in RON mn 6m/16 vs. 6m/15 -37% ► CAPEX (excl. E&A) reduced by 37%: ► Reduced number of Integrated FRD oil (incl. wells) 6m/15 6m/16 projects ► Reduced water injection, workovers activities and Upstream E&A
Slide 26: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations 2016 Financial Calendar Nov 9: Q3/16 results Tel.: +40 372 161 930 E-mail: investor.relations.petrom@petrom.com Homepage: www.omvpetrom.com 26 | OMV Petrom results Q2/16