MOL Hungarian Oil & Gas PLC Class A · BET:MOL
MOL Hungarian Oil & Gas PLC Class A — Merger or Acquisition (August 2003)
25 slides from MOL Hungarian Oil & Gas PLC Class A's merger presentation, August 2003
Slide 1: MOL and INA: Partnership for the Future
™” EF MOL and INA: Partnership for the Future August 2003
Slide 2: Creation of the Central and Eastern European oil and gas market leader
Creation of the Central and Eastern European oil and gas market leader n MOL’s partnership with Slovakian Slovnaft set the basis and the track record for the strategic alliance with INA n Historically the leading oil and gas company of former Yugoslavia, INA is ideally placed to retain this position
Slide 3: Agenda
Agenda Strategic Fit INA as an investment opportunity Transaction overview MOL / INA partnership 3
Slide 4: MOL's strategy
MOL’s strategy Leading n Group financials among the n Outstanding operational best of the sector efficiency, competitive asset base Regional Established position Integrated n Utilization of among geographical strategic European Oil Companies n Balanced portfolio advantages and acquired based on regi
Slide 5: MOL's unique track record with Slovnaft: first step in regional consolidation
MOL’s unique track record with Slovnaft: first step in regional consolidation Transaction details Partnership at work n 36.2% strategic stake acquired for n Achieved operating synergies: US$262 mm in 2000 — US$45 mm synergy and cost n Further 31.6% stake acquired for improvements by the end of 2002
Slide 6: Alliance with INA: the second step to deliver MOL's strategic vision
Alliance with INA: the second step to deliver MOL’s strategic vision INA transaction Leadership through critical mass and regional expansion n Valuable asset base needs to be n CEE industry market leader: modernised – Hydrocarbon production of 160,000 boe/ day n Significant market share in the – Ann
Slide 7: Strategic objectives of each business segments supported by MOL-INA partnership
Strategic objectives of each business segments supported by MOL-INA partnership MOL’s strategic objectives Contribution of MOL-INA partnership n Focused growth in reserves and n Increasing E&P contribution to capital Upstream production employed and profitability n Aiming for higher US/DS integrity
Slide 8: Agenda
Agenda Strategic Fit INA as an investment opportunity for MOL Transaction overview MOL / INA partnership 8
Slide 9: Currently, INA has an attractive position in Croatia and in the region
Currently, INA has an attractive position in Croatia and in the region E&P Refining Retail Sizeable refining capacity in CEE—2001 Throughput 2002 Total reserves 2002 000s tonnes mmboe Gas Oil kb/d MOL/Slovnaft/INA 165 110 176 451 1,792 2,751 1,570 1,181 1,666 163 74 89 173 PKN 374 379 178 MOL/ OMV¹
Slide 10: Vertically-integrated company structure
Vertically-integrated company structure INA has completed an internal corporate and balance sheet restructuring Main activities of Oil and Gas exploration&production, gas INA mother Refining&Marketing company, trading supported by n Refineries in Rijeka (4.5 mtpa) and Sisak (4.0 mtpa) and n Domestic
Slide 11: Sizeable E&P portfolio: robust, but focused upstream growth
Sizeable E&P portfolio: robust, but focused upstream growth Croatia Production Currently concentrated on Croatia 21,5 mboe (44 % oil&cond, 56 % Croatia, but significant gas) Reserve 1P+2P 258 mboe (39% potential abroad oil&cond, 61% gas) Adria offshore fields in a JV with n Robust base in the Agip o
Slide 12: Gas supply and trading: moving forward towards a liberalised market
Gas supply and trading: moving forward towards a liberalised market Recent situation The gas pricing system n INA has a sole supplier license in the n The new average gas sale price for gas Croatian gas market distribution companies and for small direct industrial consumers increased by 11.1% up n G
Slide 13: Refining: best positioned assets in the former Yugoslavian market
Refining: best positioned assets in the former Yugoslavian market Competitive position among Mediterranean refineries Rijeka: Sisak: n Coastal refinery n Niche refinery, but compares well to its southern peers. n Well positioned in the Mediterranean n Various development scenarios exist, according t
Slide 14: Sales & marketing: strong position and basis for further growth in the SEE markets
Sales & marketing: strong position and basis for further growth in the SEE markets Strong marketing position in the former Network’s characteristics YU markets n Average throughput per station – 3,3 n Commercial sales: harmonised mm l sales channels, wider product slate n Average of the top 100 stat
Slide 15: Continuously improving profitability resulted in strong financial performance in 2002 and 1Q03
Continuously improving profitability resulted in strong financial performance in 2002 and 1Q03 INA’s recovery since 1999 due to Strong Strong financial financial performance performance in in 1Q 1Q (US$mm) (US$mm) internal efforts and external factors EBITDA EBIT Net income n Balance sheet and compa
Slide 16: Agenda
Agenda Strategic Fit INA as an investment opportunity Transaction overview MOL / INA partnership 16
Slide 17: Minority stake acquisition: ability to create a strong strategic partnership
Minority stake acquisition: ability to create a strong strategic partnership MOL is the best positioned to support Transaction details and keen to continue INA privatisation n MOL is acquiring 25 %+1 share Proposed ownership structure of strategic stake in INA for USD 505 INA according to the Law mm
Slide 18: MOL obtained significantly more rights than granted by the law
MOL obtained significantly more rights than granted by the law n MOL has veto rights over certain key matters (“Reserved Matters”): – Approval of Business Plan and Budget annually and any amendment thereto – Granting of security exceeding HRK80mm – Sale/acquisition of real property and other materia
Slide 19: Corporate governance rights in line with undertakings and size & nature of the investment
Corporate governance rights in line with undertakings and size & nature of the investment n MOL’s undertakings – Strengthen INA’s business in Croatia and neighbouring countries – No material disposals of business including shut-down of either refinery – Maintain and develop each of the refineries in
Slide 20: The acquisition is in line with MOL's strategic and financial targets
The acquisition is in line with MOL’s strategic and financial targets Impact of INA acquisition on MOL Value to price considerations key financial targets n Partnership with INA would n Not jeopardizing MOL’s ROACE1 provide access to valuable target of 17 % markets and fit well with MOL’s n MOL’s pr
Slide 21: Agenda
Agenda Strategic Fit INA as an investment opportunity Transaction overview MOL / INA partnership 21
Slide 22: MOL and INA together – critical mass to maintain regional leadership
MOL and INA together – critical mass to maintain regional leadership MOL and INA together Creation of the Baltic-Adriatic Corridor n CEE industry market leader: PL PL – Total combined hydrocarbon production of 160,000 boe/ day +1.3% GDP +267 1.1 %cars/1000 GDP capita – Combined annual refining capac
Slide 23: Upstream - strong base for efficient joint pursuit of new projects
Upstream - strong base for efficient joint pursuit of new projects Complementary upstream Leveraging of MOL’s 50 year operation of INA and MOL experience in the gas business n Opportunity to jointly pursue n Review possible gas storage domestic and Transdanubian and transit co-operation E&P projects
Slide 24: Refining & Marketing: benefits of large and modernised combined refining network
Refining & Marketing: benefits of large and modernised combined refining network Benefits of combined refining Joint retail network development network of MOL-Slovnaft-INA n Increasing purchasing power, n Stabilisation of the wholesale joint product trading platform market position n Platform for re
Slide 25: MOL and INA – key financials
MOL and INA – key financials US$ mm MOL INA 2002 2001 2002 2001 Sales 4,495 4,101 Sales 1,796 1,919 EBITDA 499 252 EBITDA 214 217 D&A (278) (263) D&A (114) (130) EBIT 222 (11) EBIT 100 87 Net fin. profit/ (loss) 7 (17) Net fin. profit/ (loss) 27 (44) Net income 253 4 Net income 125 43 Shareholders’
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