Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Investor Presentation (May 2020)
79 slides from Mol Hungarian Oil & Gas Plc Class A's investor presentation, May 2020
Slide 1: MOL Group Investor Presentation May 2020
MOL GROUP INVESTOR PRESENTATION May 2020
Slide 2: MOL Group in Brief
MOL GROUP IN BRIEF INTEGRATED CENTRAL EUROPEAN MID-CAP OIL & GAS COMPANY CORE ACTIVITIES UPSTREAM DOWNSTREAM CONSUMER GAS SERVICES MIDSTREAM Exploration Petrochemicals Retail Production Refining Mobility CLEAN CCS EBITDA BY SEGMENTS IN 2019 (USD MN) UPSTREAM DOWNSTREAM CONSUMER GAS 1,052 866 471 187
Slide 3: MOL Group Geography
MOL GROUP GEOGRAPHY CEE-BASED INTEGRATED OPERATIONS AND INTERNATIONAL UPSTREAM SLOVAKIA UK RUSSIA NORWAY CZECH REP. KAZAKHSTAN HUNGARY AZERBAIJAN HQ SLOVENIA IRAQ PAKISTAN OMAN CROATIA ROMANIA EGYPT SYRIA (IN FORCE MAJEURE) BOSNIA SERBIA MONTENEGRO ANGOLA UPSTREAM DOWNSTREAM CONSUMER SERVICES 3
Slide 4: Agenda
AGENDA THE MOL GROUP EQUITY STORY SUPPORTING SLIDES Q1 2020 RECAP (LINK TO Q4 2019 RESULTS) DOWNSTREAM CONSUMER SERVICES EXPLORATION AND PRODUCTION FINANCIALS, GOVERNANCE AND OTHERS 4
Slide 5: The MOL Group Equity Story
THE MOL GROUP EQUITY STORY
Slide 6: Delivering Today, Ready to Deliver Tomorrow
DELIVERING TODAY, READY TO DELIVER TOMORROW Efficiency & Safety: systematic focus on efficiency and safety in each business Integration: deeply integrated business model provides remarkable cash flow stability Resilience: high-quality, low-cost asset base, breaking even at the bottom of the cycle MO
Slide 7: Downstream: Cash Engine to Drive Fuel to Chemicals Transformation
DOWNSTREAM: CASH ENGINE TO DRIVE „FUEL TO CHEMICALS” TRANSFORMATION AND GROWTH DELIVERING TODAY High-quality, low-cost asset base Market leading position in Central Europe with long-standing customer relations Strong captive markets and a deeply integrated refining-chemicals-distribution value chain
Slide 8: Consumer Services: Becoming a True Consumer Goods Retailer
CONSUMER SERVICES: BECOMING A TRUE CONSUMER GOODS RETAILER AND LEADING THE REVOLUTION OF TRANSPORTATION IN CEE DELIVERING TODAY Leading CEE fuel retailer with ~1,900 sites, market leader in 4 countries Exploiting the fuel market potential in CEE Increasing Fresh Corner penetration (45%+), rising non
Slide 9: E&P: Highly Value Accretive Barrels to Fund Inorganic Reserve Replacement
E&P: HIGHLY VALUE ACCRETIVE BARRELS TO FUND INORGANIC RESERVE REPLACEMENT DELIVERING TODAY Production to average at 115-120 mboepd in 2020, including the contribution from ACG from 16 April Strong cost discipline with an E&P cost base fit for the bottom of the cycle New measures adjusted capex and o
Slide 10: Gas Midstream: Stable, Non-Cyclical Cash Flow
GAS MIDSTREAM: STABLE, NON-CYCLICAL CASH FLOW DELIVERING TODAY Regulated domestic transmission business Profitable international transit business spanning 6 regional countries Recent years saw significant pipeline and trade infrastructure developments as well as efficiency improvements READY TO DELI
Slide 11: Robust Financial Framework Supports Strategic Transformation
ROBUST FINANCIAL FRAMEWORK SUPPORTS STRATEGIC TRANSFORMATION DELIVERING TODAY 2019: Strong delivery with EBITDA (USD 2.44bn) slightly ahead of the upgraded guidance 2020 EBITDA guidance was withdrawn due to the prevailing pandemic-related uncertainties 2020 capex was cut to below USD 1.5bn from the
Slide 12: Sustainable: Transforming to Low Carbon World
SUSTAINABLE: TRANSFORMING TO LOW CARBON WORLD DELIVERING TODAY Sustainable Development Committee integral part of the Board of Directors Minimize environmental footprint in line with climate change policy Only Emerging European corporation member of the Dow Jones Sustainability Index Strong sustaina
Slide 13: MOL Group 2030: Delivering Today, Ready to Deliver Tomorrow
MOL GROUP 2030: DELIVERING TODAY, READY TO DELIVER TOMORROW TODAY TOMORROW Significantly reducing motor fuel yield FROM FUELS Becoming the leading CEE chemicals company TO CHEMICALS FROM FUEL Becoming a true consumer goods retailer TO CONSUMER RETAILING Leading the revolution of transport in CEE GOO
Slide 14: MOL 2030: Tracking Progress in 2017-19
MOL 2030: TRACKING PROGRESS IN 2017-19 – WE ARE DELIVERING INTERIM TARGETS 2017-2019 STATUS DS2022 EFFICIENCY DELIVERED USD 110MN IN 2018, DOWNSTREAM EFFICIENCY ADDED USD 40MN IN 2019 ENTER NEW CHEMICAL POLYOL PROJECT ON SCHEDULE, ON BUDGET, REACHED 50% COMPLETION, PRODUCT LINE(S) CONSTRUCTION START
Slide 15: Downstream
DOWNSTREAM 15
Slide 16: Integrated Downstream Model in CEE
INTEGRATED DOWNSTREAM MODEL IN CEE 11 COUNTRIES 5 19 SALES OF mtpa REFINED PRODUCTS AND 1.11mtpa PETROCHEMICALS EMPLOYEES 9,400 16
Slide 17: High Quality Core Refining Assets
HIGH QUALITY CORE REFINING ASSETS COMPLEX REFINERIES WITH VERY HIGH WHITE PRODUCT YIELD REFINERY NELSON COMPLEXITY OF PEERS1 GROUP REFINERY YIELD, 2019 (%) 16 6.1 Mtpa 8.9% 2.4% 9.4% 14 8.1 Mtpa LPG 12 11.5 4.5 Mtpa 10.6 10.0% 8.1% Naphta 10 9.1 2.3% Motor gasoline NCI 8 18.4% 3.5% Middle distillate
Slide 18: Deep Downstream Integration
DEEP DOWNSTREAM INTEGRATION MARKET LEADING POSITION WITH STRONG CUSTOMER RELATIONS IN CEE MARKET SHARE (%)1 DOWNSTREAM INTEGRATION (FUELS)2 ~24% CRUDE INTAKE: • Russian: 66% • Seaborne: 26% ~85% ~39% • Own Refining production: 8% ~80% ~37% captive ~45% market <10% 10-20% 20-40% 40+% Retail own marke
Slide 19: Petrochemicals in MOL's Integrated Downstream Value Chain
PETROCHEMICALS IN MOL’S INTEGRATED DOWNSTREAM VALUE CHAIN MOL PETROCHEMICAL VALUE CHAIN Capacity HDPE 420 kt OLEFINS (ETHYLENE, PROPYLENE, LDPE 285 kt C4 STREAM) Refining Ethylene PP 535 kt Petchem 890 kt Internal feedstock1: Butadiene 130 kt SSBR 60 kt ~2.1 Mt in 2019 AROMATICS2 350 kt LDPE4: 220 k
Slide 20: Improving Margin Capture by 2023
IMPROVING MARGIN CAPTURE BY 2023 DS 2022 PROGRAM TARGETS OFFSETTING POTENTIAL MACRO NORMALIZATION DS EBITDA PROFITABILITY EVOLUTION (2017-23, USD/BBL)1 • MOL group ref.: USD 4-5/bbl • Petchem: EUR 300-400/t 11.4 0.8 ~3.5 4.0-4.5 Higher CO2 price Wage pressure in CEE 6.9 ~1.5 R&M 12+ 7.0-7.5 Petchem
Slide 21: Proven Efficiency Track Record
PROVEN EFFICIENCY TRACK RECORD GRADUALLY INCREASING FOCUS ON GROWTH AND TRANSFORMATION PROGRAM SCOPE FINANCIALS 3 200+ 0 0 0 500 150 years Actions Enabler1 Operational2 Large USD mn USD mn program actions actions projects3 EBITDA4 CAPEX 3 300+ 0 0 8 500 1,200 years Actions Enabler1 Operational2 Larg
Slide 22: Downstream to Continue to Deliver Net Efficiency Gain
DOWNSTREAM TO CONTINUE TO DELIVER NET EFFICIENCY GAIN AND VISIBLE CONTRIBUTION FROM THE FIRST ROUND OF STRATEGIC, TRANSFORMATIONAL PROJECTS BY 2023 CLEAN CCS EBITDA EVOLUTION (USD MN) Consumer Services Ref. margin: -2.0 USD/bbl Petchem margin: -150 EUR/t ~320 1,600+ 1,530 940 ~400 358 1,200+ ~560 1,
Slide 23: Downstream Strategy Is Built on Four Pillars
DOWNSTREAM STRATEGY IS BUILT ON FOUR PILLARS FUEL TO PETCHEM VALUE CHAIN EXTENSION Polyol Fuel conversion options Diversification opportunities Steam cracker capacity expansions Compounding FUEL TO Drivers PETCHEM Results VALUE CHAIN Decreasing fuel EXTENSION demand Resilient investment portfolio co
Slide 24: Fuel to Petchem: Significant Shift in Yields by 2030
FUEL TO PETCHEM: SIGNIFICANT SHIFT IN YIELDS BY 2030 AND BEYOND PETCHEM FEEDSTOCK, OTHER HIGH-VALUE PRODUCTS TO INCREASE BY 1-2 MN TONS GROUP REFINERIES’ YIELD (Mt) NON-FUEL YIELD INCREASE ROADMAP 2015 2030 Short-to-mid term opportunities, shifting 500-700kt: Utilizing existing flexibility to produc
Slide 25: Value Chain Extension in Chemicals: Polyol
VALUE CHAIN EXTENSION IN CHEMICALS: POLYOL EARLY R&D, MARKETING EFFORTS TO SUPPORT GRADUAL PRODUCTION RAMP-UP PRODUCTION RAMP-UP OF THE POLYOL PLANT MARKET OPPORUNITIES OF POLYETHER POLYOL Propylene-glycol 100% Polyol capacity • CASE (1) VALUE ADDED • Rigid foam • Flexible foam 2021 2022 2023 Mid-cy
Slide 26: How to Pick the Right Product/Market?
HOW TO PICK THE RIGHT PRODUCT/MARKET? REPLICATING THE DOWNSTREAM SUCCESS STORY WITH STRONG CEE FOCUS INVESTMENT LOGIC VAST OPPORTUNITIES TO EXPAND ALONG THE PETCHEM VALUE CHAIN Crude oil (naphtha) based chemistry and feedstock integration Attractive end-user markets (Demand) Polyethylenes Limited re
Slide 27: Naphtha-Based Propylene Chemistry
NAPHTHA-BASED PROPYLENE CHEMISTRY ENTERING THE POLYURETHANES VALUE CHAIN Petchem feedstock Basic chemicals Intermediates / pre-polymers Polymers nitro- benzene MDI/PMDI benzene propylene Polyurethanes naphtha propylene polyols -oxide (PUR) nitro- toluene TDI toluene PUR FORMULATORS OLEFIN „SYSTEM HO
Slide 28: Attractive End-User Markets
ATTRACTIVE END-USER MARKETS WIDESPREAD APPLICATION OF POLYOL AS PUR COMPONENT DRIVES DEMAND GLOBAL POLYURETHANE DEMAND BY INDUSTRY (% OF GROWTH DRIVERS GLOBAL DEMAND Improving access to „essentials of life”, increasing comfort ~30% needs FURNITURE & INTERIOR Improving life expectancy and population
Slide 29: Limited Regional Competition
LIMITED REGIONAL COMPETITION MOL TO BECOME THE SOLE INTEGRATED REGIONAL POLYOL PRODUCER Netherlands Legend: LOCATION Multiple units 984 ktpa Marl POLYOL UNIT LyondellBasell 80 ktpa Sasol 18 ktpa PG UNIT Multiple units 1013 ktpa Schwarzheide PO UNIT (TECHNOLOGY) (PO/SM, PO/TBA) Dormagen/Cologne Stade
Slide 30: A High Margin Semi-Commodity Product
A HIGH MARGIN SEMI-COMMODITY PRODUCT WITH AN EXPECTED USD 170MN+ MID-CYCLE EBITDA CONTRIBUTION PROPYLENE VS. POLYOL SPREADS1 (EUR/T) POLYOL PLANT EBITDA & SENSITIVITY (USD MN) Relative deviation: PO – propylene: 18% PP – propylene: 36% 170+ 1.200 1.000 ~100 800 600 400 200 0 2003 2004 2005 2006 2007
Slide 31: Sustainability: First Steps Towards Decarbonization
SUSTAINABILITY: FIRST STEPS TOWARDS DECARBONIZATION Strategic partnership for solvent-based recycling SOLVENT RECLYING Cooperation started in 2018 Acquisition of German recycled plastic compounder COMPOUNDING Closing expected by end of 2019 Proprietary technology to recycle used tires since 2013 Exp
Slide 32: Diversified Project Pipeline Supports Transformation by 2030
DIVERSIFIED PROJECT PIPELINE SUPPORTS TRANSFORMATION BY 2030 <20% PROBABILITY 100% CAPEX UNDER CONSIDERATION (USD BN) THINK ASSESS SELECT DEFINE IMPLEMENT Fuels to Petchem 5.5 Aromatic Unit Revamp Base Oil and Wax production strategy MPC SC2 Metathesis MOL Blending Intensification alternative crudes
Slide 33: Transformation Program of INA R&M
TRANSFORMATION PROGRAM OF INA R&M DELAYED COKER RECEIVED FID IN Q4 2019 COMPLEX UPGRADE OF THE RIJEKA RIJEKA REFINERY REFINERY Continuing the upgrade of the refinery USD via the installation of a Delayed Coker 100+ (DC) unit enabling full conversion and TRANSFORM SISAK INTO AN INDUSTRIAL Average yea
Slide 34: Crude Diversification Continues
CRUDE DIVERSIFICATION CONTINUES TARGETING 33% SEABORNE SUPPLY BY 2022 ADRIATIC PIPELINE ACCESS ESTABLISHED CRUDE DIVERSIFICATION1 Increased pipeline capacity: 6Mtpa = SN Ural 97% (Friendship pipeline) Seaborne Increased 3% 16% 33% pipeline capacity: 14Mtpa = MOL+SN 2011 2019 2022 ENHANCING FEEDSTOCK
Slide 35: Consumer Services
CONSUMER SERVICES 35
Slide 36: A Leading Regional Network
A LEADING REGIONAL NETWORK CZECH R. MARKET POSITION: 2 MARKET LEADING MARKET SHARE: 20% SLOVAKIA MARKET POSITION: 1 MARKET SHARE: 48% IN 60% OF THE NETWORK HUNGARY TOP 3 MARKET POSITION: 1 MARKET SHARE: 44% IN 90% OF THE NETWORK SLOVENIA MARKET POSITION: 3 MARKET SHARE: 10% ROMANIA 9 COUNTRIES MARKE
Slide 37: Three Strategic Goals with Upgraded Targets
THREE STRATEGIC GOALS WITH UPGRADED TARGETS STRATEGIC GOALS STATUS STRATEGIC TARGETS USD 600mn+ EBITDA target by 2023 Becoming a true consumer EBITDA: USD 471mn 1. RETAIL goods retailer Non-fuel margin contribution to reach 35% by Non-fuel margin: 29% of total 2023 margin in 2019 Build proficient re
Slide 38: Market-Driven Tailwind Likely to Slow Down
MARKET-DRIVEN TAILWIND LIKELY TO SLOW DOWN INCREASING MARKET SHARE MAY DRIVE FURTHER GROWTH IN FUEL MARGIN 4.5% TOTAL MOL GROUP FUEL VOLUME (BN LITERS) POSITIVE MID-TERM OUTLOOK +14% Volume 8 5.55 5.71 5.98 CEE markets may grow further albeit at a lower 6 5.24 2.05 pace than in the previous years 1.
Slide 39: Significant Upside Remains in Non-Fuel Margin
SIGNIFICANT UPSIDE REMAINS IN NON-FUEL MARGIN NON-FUEL MARGIN CONTRIBUTION TO RISE CLOSE TO 35% BY 2023 NON-FUEL SALES (MN USD) FRESH CORNER ROLLOUT (SITES) 1,400 +39% 1,400 1,200 1,200 1,000 1,000 800 800 600 1,098 1,238 600 1,250 890 990 877 400 400 687 200 200 447 248 0 0 23 2016 2017 2018 2019 2
Slide 40: Strengthening Control over the Supply Chain
STRENGTHENING CONTROL OVER THE SUPPLY CHAIN BUILDING UP OWN LOGISTICS AND FOCUSING ON ACTIVE SUPPLIER MANAGEMENT RESULTS OF LOGISTICS OPERATIONS SUPPLIER CONTRIBUTION OF NON-FUEL MARGIN (%) 94.6% 97.7% 20 Ambition: to close gap until 3.5 100 20% (FMCG retailer 3.0 74.5% benchmark) in next years 80 2
Slide 41: Coffee Is the Biggest Contributor to Non-Fuel Margin Growth
COFFEE IS THE BIGGEST CONTRIBUTOR TO NON-FUEL MARGIN GROWTH COFFEE HELPS TO BUILD THE FRESH CORNER BRAND AND EXPERIENCE IN DEVELOPING GASTRO OFFERS SHARE OF COFFEE OF TOTAL CONSUMER GOODS COFFEES SOLD/SITE IN TOP5 MARKETS MARGIN (%) ’000 cups/site/year 20 +18% 15 CZ 37 44 51 10 18.7 17.2 2017 2018 2
Slide 42: What Will Be the Next Coffee?
WHAT WILL BE THE NEXT COFFEE? COFFEE WITH ~30% SALES CAGR; FURTHER POTENTIAL IN GROCERY AND NON-COFFEE GASTRO 2019 NON-FUEL SALES AND MARGIN BREAKDOWN (%) 2017-2019 SALES CAGR OF GROCERY AND GASTRO (USD MN) Grocery 100% 100% +12% Grocery 16% Gastro coffee 31% 181 202 Gastro non-coffee 161 6% Nonfood
Slide 43: Gradual Build-Up of Mobility Services
GRADUAL BUILD-UP OF MOBILITY SERVICES GOES ACCORDING TO PLAN Alternative fuels (EV charging) Fleet management Car sharing Public transport Future plans Strategic aims Build capabilities Connect MOL Develop Exploring are to develop to manage the brand and capabilities and additional only high future
Slide 44: Early Benefit from Advanced Analytics in Hungary
EARLY BENEFIT FROM ADVANCED ANALYTICS IN HUNGARY IMPLEMENTATION ON OTHER MARKETS IS IN PROGRESS Workforce Grocery Pricing Digital Signage Efficiency Optimization Measurement Optimizing human Improving grocery Margin increase through resource need at service margin through location- product display o
Slide 45: Exploration and Production
EXPLORATION AND PRODUCTION
Slide 46: Production in 9 Countries
PRODUCTION IN 9 COUNTRIES NO RUSSIA UK RUSSIA KAZAKHSTAN Reserves: 26.2 MMboe CEE TOTAL Production: 4.6 mboepd AZERBAIJAN Croatia, Hungary KAZAKHSTAN Reserves: 159.6 MMboe IRAQ Reserves: 23.5 MMboe Production: 65.3 mboepd HU PAKISTAN RO EGYPT PAKISTAN o/w CEE offshore HR Reserves: 14.5 MMboe Reserve
Slide 47: New Production Guidance Is 115-120 mboepd for 2020
NEW PRODUCTION GUIDANCE IS 115-120 MBOEPD FOR 2020 PRODUCTION (MBOEPD) COMMENT 111 111 111 115-120 107 2020 Q1: stable production in the first quarter of the year ACG will add to production around 20 mboepd or more as entitlement production share is to increase in low oil price environment (PSA regi
Slide 48: Key Projects in 2020-23
KEY PROJECTS IN 2020-23 CAPEX BUDGET UNDER REVIEW, TO BE ADJUSTED TO CHANGES IN THE EXTERNAL ENVIRONMENT CEE INTERNATIONAL HUNGARY PAKISTAN: Maintain and extend production plateau, Shallow gas exploration exploration drillings Production optimization UK: Catcher near-field development, Scott in-fill
Slide 49: Successful Closure of the ACG Transaction
SUCCESSFUL CLOSURE OF THE ACG TRANSACTION DEAL SUMMARY USD 1.5bn transaction value includes Chevron’s 9.57% interest in ACG, 8.9% stake in the BTC pipeline and related midstream assets A major step towards the 2030 strategic targets of transforming MOL E&P into an international platform; it adds exp
Slide 50: The ACG PSA Regime/Profile
THE ACG PSA REGIME/PROFILE ACG PSA SCHEME HIGHLIGHTS Investing Government Original PSA signed in 1994 companies Signature Latest amendment in 2017 with the expiry date Bonus of 2049 ACG shareholders have access to own Gross Production entitlement production OPEX Limit of 100% of revenues per quarter
Slide 51: Strong Unit Cash Flow in Q1 2020 Despite Lower Prices
STRONG UNIT CASH FLOW IN Q1 2020 DESPITE LOWER PRICES PRICE REALIZATION, EBITDA, SIMPLIFIED FCF1 (USD/BOE) 71 64 52 54 50 Brent price 44 Realized HC price Unit EBITDA 24 Unit Simplified FCF 15 18 7 11 1 2015 2016 2017 2018 2019 Q1 2020 87 260 548 992 715 106 SFCF (USD mn) Notes: Simplified free cash
Slide 52: 2020 E&P Portfolio Breakeven Reduced to USD 25/boe
2020 E&P PORTFOLIO BREAKEVEN REDUCED TO USD 25/BOE 2020 E&P PORTFOLIO SIMPLIFIED CASHFLOW BREAKEVEN PRICE (USD/BOE) KEY MESSAGES -5 Comprehensive set of measures put in ~30 place to adjust our operating and capital expenditure ~25 Portfolio break-even reduced by USD ~5/boe to USD ~25/boe Original Po
Slide 53: Financials, Governance and Others
FINANCIALS, GOVERNANCE AND OTHERS 53
Slide 54: Q1 2020: Holding Up; 2020 Guidance Withdrawn/Revised
Q1 2020: HOLDING UP; 2020 GUIDANCE WITHDRAWN/REVISED WITH THE ESSENTIAL FUNDAMENTAL BUILDING BLOCKS IN PLACE 2020 2019 Q1 2020 TARGETS RESILIENT GROUP CLEAN GUIDANCE INTEGRATED CCS EBITDA USD 2.44 BN USD 622 MN WITHDRAWN BUSINESS MODEL GROUP CAPEX USD 2.08 BN USD 294 MN UP TO USD 1.5 BN (ORGANIC) FI
Slide 55: April Operational Update and Revised Guidance for 2020
APRIL OPERATIONAL UPDATE AND REVISED GUIDANCE FOR 2020 OPERATIONAL UPDATE FOR APRIL Upstream Liquids offtake issues constrain production in Pakistan in April, TAL block is currently producing at around 50% of capacity ACG acquisition completed; net entitlement production can be in a wide range of 20
Slide 56: Robust EBITDA Generation
ROBUST EBITDA GENERATION CLEAN CCS EBITDA (USD BN) 2.7 2.5 2.4 2.4 2.2 0.7 0.9 1.3 0.7 1.1 1.4 1.2 1.0 1.2 0.9 0.6 0.3 0.3 0.4 0.4 0.5 0.2 0.2 0.2 0.2 0.2 -0.1 -0.2 -0.2 -0.2 -0.1 2015 2016 2017 2018 2019 2020 Q1 US DS CS GM C&O (incl. intersegment) 56
Slide 57: Sustain Capex at Around USD 1.0-1.3bn
„SUSTAIN” CAPEX AT AROUND USD 1.0-1.3BN ACG WILL LIKELY BRING „NORMALIZED” SUSTAIN CAPEX TO THE HIGHER END OF THE HISTORIC RANGE SUSTAIN CAPEX (USD BN) 1.3 1.3 1.1 0.4 1.0 1.0 0.3 0.7 0.3 0.4 0.6 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.1 0.1 0.1 2015 2016 2017 2018 2019 Q1 2020 Organic US Organic DS Organic C
Slide 58: USD 3bn+ Downstream Strategic Capex Planned for 2019-23
USD 3BN+ DOWNSTREAM STRATEGIC CAPEX PLANNED FOR 2019-23 COVID-19 MAY AFFECT TIMING OF THE STRATEGIC PROJECTS STRATEGIC/TRANSFORMATIONAL CAPEX (USD BN) 0.78 0.75 (?) 0.09 Other strategic (DS2022) 0.60 (?) Polyol (DS2022) 0.50 (?) 0.50 (?) 0.69 0.50 0.50 0.17 0.07 0.10 0.13 Q1 2018 2019 2020E 2021E 20
Slide 59: Robust Simplified Free Cash Flow in 2015-2019
ROBUST SIMPLIFIED FREE CASH FLOW IN 2015-2019 TRANSFORMATIONAL CAPEX REDUCES FCF FROM 2019 SIMPLIFIED FCF (USD BN) 1.4 1.4 1.2 1.2 0.5 0.2 1.0 0.4 1.0 0.5 0.8 0.7 0.7 0.3 0.4 0.3 0.2 0.2 0.3 0.2 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.1 -0.5 2014 2015 2016 2017 2018 2019 Q1 2020 Upstream Consumer Services C&O
Slide 60: 2020 Dividend Payment to Be Revisited Later
2020 DIVIDEND PAYMENT TO BE REVISITED LATER STEADILY RISING BASE DPS IN 2014-19, COMPLEMENTED BY SPECIAL DIVIDEND IN 2018 AND 2019 DIVIDEND PER SHARE1 (HUF) 3.6% 3.5% 3.0% 2.9% 2.5% 2.9% 3.3% 3.0% +1% +2% +1.5% +1.5% Special dividend 48 BASE DPS: +10% 43 Regular dividend CAGR IN 2014-19 16 95 78 85
Slide 61: Sources and Applications of Cash
SOURCES AND APPLICATIONS OF CASH SOURCES AND APPLICATIONS OF CASH, 2012-19 (USD MN)1 180 -613 348 78 716 115 546 557 162 354 738 579 402 205 270 196 383 164 202 575 350 473 302 261 427 2 687 37 2 524 2 477 2 447 2 435 2 308 322 164 2 183 2 153 111 2 079 1 689 1 211 1 258 1 290 1 034 1 011 1 037 2012
Slide 62: Balance Sheet Remains Robust Post-ACG Completion
BALANCE SHEET REMAINS ROBUST POST-ACG COMPLETION NET DEBT TO EBITDA (X) MOL 2030 2.5 ACG transaction lifted leverage upon completion to around 1.5-1.6x (end-of-Q1 2020, pro-forma), still well within 2.0 our comfort zone 1.5-1.6 ACG is immediately EBITDA accretive, hence will 1.5 contribute to bringi
Slide 63: Ample Financial Headroom
AMPLE FINANCIAL HEADROOM FROM DIVERSIFIED FUNDING SOURCES AVERAGE MATURITY OF 3.7 YEARS Reported cash & cash equivalents Senior Unsecured Bonds Medium term loan Long term loan (multilaterals) Undrawn facilities 2,500 2,000 719 USD mn 1,500 486 2,396 1,000 62 31 9 1,381 500 822 614 0 16 9 15 18 87 22
Slide 64: Full Investment Grade Rating Preserved
FULL INVESTMENT GRADE RATING PRESERVED EVEN UNDER CURRENT UNPRECEDENTED AND CHALLENGING MARKET CONDITIONS HISTORICAL FOREIGN LONG TERM RATINGS FFO ADJUSTED NET LEVERAGE (3Y AVG. 2016-2018) PKN Orlen, BBB- 0.44 MOL, BBB- 0.89 Bashneft, BBB- 1.16 OMV, A- 1.38 Total, AA- 1.64 Tupras, BB- 2.14 Repsol, B
Slide 65: MOL 2030 Works With or Without INA
MOL 2030 WORKS WITH OR WITHOUT INA FOCUS ON SECURING RETURN ON INVESTMENT REALITIES AND PRIORITIES STRONG REGIONAL ASSET BASE MOL 2030 strategy can be and will be executed with or Low-cost E&P in Croatia* (both onshore and without INA off-shore) Good geographical fit and untapped efficiency upside i
Slide 66: The History of INA & MOL, 2003-2019
THE HISTORY OF INA & MOL, 2003-2019 STORYLINE SHAREHOLDER AGREEMENTS UNDER THE FASHA, MOL DELEGATES FIVE OUT OF 1ST SHAREHOLDER RIGHTS AGREEMENT (SHA): MOL AND THE GOVT OF CROATIA SIGN THE GAS NINE MEMBERS TO THE SUPERVISORY BOARD MOL ALLOWED TO NOMINATE TWO MEMBERS 1ST AMENDMENT MASTER AGREEMENT (G
Slide 67: MOL-Croatia Arbitration Status
MOL-CROATIA ARBITRATION STATUS UNCITRAL ARBITRATION ICSID ARBITRATION (CROATIA VS. MOL) (MOL VS. CROATIA) INITIATED GOVERNMENT OF CROATIA MOL BY WHEN 17 JANUARY 2014 26 NOVEMBER 2013 PCA (PERMANENT COURT OF ARBITRATION), GENEVA ICSID (INTERNATIONAL SETTLEMENT OF INVESTMENT FORUM UNDER UNCITRAL (UNIT
Slide 68: Shareholder Structure
SHAREHOLDER STRUCTURE1 MUFG Treasury shares UniCredit Bank AG 7.0% 3.4% 1.3% ING Bank N.V. 4.8% Foreign investors (mainly institutional) 31.5% OTP Bank Plc. 4.9% Free-float OmanOil (Budapest) Limited 7.1% 46.3% 10.0% Maecenas Corvini Foundation2 8.5% Domestic institutional 5.1% 15.2% 1.2% Domestic p
Slide 69: Solid, Consistent EBITDA Generation (Until Mid-March)
SOLID, CONSISTENT EBITDA GENERATION (UNTIL MID-MARCH) RESILIENT INTEGRATED BUSINESS MODEL IN A HIGHLY VOLATILE ENVIRONMENT EXTERNAL ENVIRONMENT* VS MOL CLEAN CCS EBITDA (USD MN) 100% 800 85% 600 70% 55% 400 40% 200 25% 10% 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 70: Key Items of Taxation
KEY ITEMS OF TAXATION CORPORATE INCOME TAX (CIT) RATES CUT IN CORE OPERATING COUNTRIES HUNGARY CIT tax remains at 9% Profit based ’Robin Hood’ with an implied tax rate of 21% Only energy related part of the profit affected (~66%), nameplate tax rate is 31% Only the Hungarian operation of certain com
Slide 71: GHG: Downstream and Fuel Sales Biggest GHG Contributors
GHG: DOWNSTREAM AND FUEL SALES BIGGEST GHG CONTRIBUTORS SCOPE 2 IS MINIMAL TOTAL GHG EMISSIONS SCOPE 1 TOTAL GHG EMISSIONS SCOPE 3 Downstream accounts for 90% of MOL’s own GHG emissions Use of sold products, incl. refinery products (diesel, gasoline) Around 90% of all Scope 1 falls under ETS and nat
Slide 72: MOL Scenario Analysis: GHG to Decrease
MOL SCENARIO ANALYSIS: GHG TO DECREASE 2030 STRATEGY PUTS MOL GHG ON THE RIGHT TRACK IN COOPERATION WITH: MOL 2030 SCOPE 1,2,3 GHG EMISSIONS (tonnes) MOL 2030 SCOPE 1,2,3 GHG EMISSIONS (tonnes) 2030 strategy sets MOL’s total footprint on right path CPS Own emissions (Scope 1) to rise with new petroc
Slide 73: ESG: Strong Ratings, Leading in Transparency
ESG: STRONG RATINGS, LEADING IN TRANSPARENCY TOP POSITIONS ACROSS LEADING ESG1 RESEARCH, RATING AND INDEX HOUSES ESG INDEXES AND RATINGS ESG REPORTING AND DISCLOSURE Monitoring of and response to all ESG rating/index houses Engagement with ESG analysts to ensure understanding of MOL Consistently str
Slide 74: MOL Group Refinery and Petchem Margins
MOL GROUP REFINERY AND PETCHEM MARGINS MOL GROUP REFINERY MARGIN1 (USD/bbl) PETROCHEMICALS MARGIN (EUR/t)2 900 10.0 9.0 800 8.0 700 7.0 600 6.0 5.0 500 4.0 400 3.0 2.0 300 1.0 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014-2019 range 2019 202
Slide 75: Resilient, Integrated Business Model Strengthened
RESILIENT, INTEGRATED BUSINESS MODEL STRENGHTENED NO CHANGE IN MOL’S MID-TERM BASE MACRO FRAMEWORK AND ASSUMPTIONS KEY MACRO ASSUMPTIONS EBITDA SENSITIVITY TO KEY EXTERNAL DRIVERS Sensitivity Est. Clean CCS EBITDA % of Group impact (USD mn) EBITDA 2019 2016 2017 2018 2019 2020 YTD 8Y AVG +/- 50 USD/
Slide 76: Top Management Incentive Schemes
TOP MANAGEMENT INCENTIVE SCHEMES FOR EXECUTIVE MEMBERS**, AROUND 2/3 OF TOTAL REMUNERATION IS VARIABLE AND PERFORMANCE DRIVEN SHORT-TERM INCENTIVES Bonus opportunity between 0.85x and 1x of annual base salary, depending on the level Payout linked to yearly performance based on financial, operational
Slide 77: Gas Midstream: Non-Cyclical Cash Flow
GAS MIDSTREAM: NON-CYCLICAL CASH FLOW GAS MIDSTREAM EBITDA (HUF BN, USD MN) FACTS & FIGURES Domestic natural gas transmission system 70 300 256 250 252 operator 60 223 250 213 Regulated business (asset base and return) 50 194 189 187 200 with continuous regulatory scrutiny 40 150 Nearly 6,000km pipe
Slide 78: 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 79: Presentation Manual
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