Healthy EBIT despite weaker US dollar First half preliminary results 9 August 2007
Delivering on Strategic Plan Operational results in H1 2007 in line with expectations Organic growth and development support revised EBITDA targets Doubling of capex year over year mainly due to acquisitions to HUF 100.7 bn (USD 535 million) in H1 2007 Progress on acquisitions in Downstream and Petchem TVK, IES, Tifon Capital optimization process commenced Significant share buyback program underway Substantial increase in dividend payout ratio planned Debt ratio moving inline with sector
Highlights in H1 2007 Healthy EBIT in line with external environment Weakening of USD negatively influenced our HUF-term Upstream and Downstream EBITs The decline in hydrocarbon production has slowed down Petchem hit a new record Key indicators: EBIT excluding special items decreased by 16% to HUF 146.6 bn, and down by only 6% in USD-terms to USD 778m, y-o-y * Net profit excluding special items and financial expense on Magnolia Finance Ltd. improved by 4% to HUF 108.8 bn (up 17% to USD 577.2m) ** * Operating profit excluding the one-off gain of HUF 83.0 bn on the gas transaction and the profit of the subsidiaries sold in this transaction (Wholesale and Storage) in Q1 2006 and the one-off gain on the acquisition of TVK shares (HUF 14.4bn) realised in H1 2007. ** Net income in addition to adjustments detailed in (*) excludes in H1 2006 the benefit from MOL Plc s corporate tax holiday (HUF 24.5 bn calculated at 16% tax rate) and in H1 2007 the HUF 36.8 bn non-realized fair valuation expense on the option value of the Magnolia Finance Ltd. 3
Healthy EBIT Q2 2006 Q2 2007 Change In HUF bn H1 2006 H1 2007 Change 134.9 120.4 (11%) EBITDA 321.7 227.0 (29%) 102.3 88.4 (14%) Operating profit 257.5 160.9 (38%) 102.3 87.9 (14%) Adjusted operating profit* 174.5 146.5 (16%) 13.2 34.8 164% Net financial expenses/(gain) 39.7 33.2 (16%) 76.7 26.4 (66%) Net income adjusted ** 104.4 72.0 (31%) 943 292 (69%) Basic EPS (HUF) 2,156 936 (57%) (*) Operating profit excluding the one-off gain of HUF 83.0 bn on the gas transaction and the profit of the subsidiaries sold in this transaction (Wholesale and Storage) in Q1 2006 and the one-off gain on the acquisition of TVK shares (HUF 14.4 bn) realised in H1 2007. (**) Net income in addition to adjustments detailed in (*) excludes in H1 2006 the benefit from MOL Plc s corporate tax holiday (HUF 24.5 bn calculated at 16% tax rate). 4
Higher Downstream and record Petchem results Operating profit by segments (USDm) * 500 400 300 200 100 0-100 -200 E&P R&M Gas Transm. Petchem C&O IS H1 2006 H1 2007 * Excluding one-off gain on gas transaction in Q1 2006 and acquisition of TVK shares in H1 2007.
CAPEX increased by acquisitions CAPEX by segments (HUFbn) 55 45 35 25 15 5-5 E&P R&M Gas Petchem Corporate and other H1 2006 H1 2007 6
Continued strong financial position Launch of share buy back program on 22 June 2007 60 Gearing (%)* Board will request authorisation to cancel treasury shares at the next AGM Increase dividend payout ratio towards 40%, subject to available investment opportunities 40 20 0-20 2000 2001 2002 2003 2004 2005 2006 Q2 2007 * Net debt to the sum of net debt and total equity 2003-2005 2006-2010 7
Upstream declining crude oil prices Brent and Ural quarterly average crude oil price (USD/bbl) 80 70 60 50 40 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Brent Ural 8
Upstream production decline slowed down 100,000 Gross hydrocarbon production (boe/day) 80,000 60,000 40,000 20,000 0 2003 2004 2005 2006 H1 2007 crude oil natural gas Szőreg 1 IFRS in HUF bn H1 2006 H1 2007 Ch. % EBITDA 87.3 56.0 (36) Operating profit 70.7 39.6 (44) CAPEX 15.4 23.3 51 9
Downstream mixed spreads environment USD/t Premium unleaded crack spread (10 ppm) 210 190 170 150 130 110 90 70 50 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Diesel crack spread (10 ppm) USD/t 210 190 170 150 130 110 90 70 50 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 10
Downstream clean operating profit up 8% 10 Sales increase of our main products in Hungary and Slovakia (%) 7.5 5 2.5 0 gasoline gasoil demand sales IFRS in HUF bn H1 2006 H1 2007 Ch. % EBITDA 124.6 116.0 (7) Operating profit 93.3 84.4 (10) Clean CCS 70.2 75.2 8 CAPEX 17.2 21.5 25 11
Petrochemical continued favourable environment Integrated margin - quarterly averages (EUR/t) 600 550 500 450 400 350 300 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 12
Petrochemicals: record results Petrochemical product sales volumes (kt) 400 300 200 100 0 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 LDPE HDPE PP Ethylene & propylene Other IFRS in HUF bn H1 2006 H1 2007 Ch. % EBITDA 16.5 34.3 108 Operating profit 7.6 24.8 228 CAPEX 2.7 1.2 (56) 13
Outlook Organic growth projects support 6.5% EBITDA growth (CAGR) by 2011 based on 2006 macro environmet Two acquisitions in Downstream: IES and Tifon Assessment of range of opportunities in both Upstream and Downstream Exploration and Production Hydrocarbon production decline is expected to slow: 11% decline for the whole year of 2007 and stabilising in 2008 Refining and Marketing For 2007, we expect similar crack spreads as in 2006 (no major change is expected in the supply-demand balance) Petrochemicals Industrial forecasts expect favorable environment for 2007 14