OVERVIEW OF 2015

2015 Highlights

• Historically the strongest financial performance with USD 1.65bn clean CCS EBITDA, 89% above 2014 in USD terms building on the foundations of internal improvements
• The first year of MOL Group Downstream’s three year efficiency program was successfully completed with USD 210mn improvement as all business lines exceeded their yearly targets
• Petrochemicals and Retail contributed ~50% of Downstream clean CCS EBITDA, further continuing with the integration of the business

Outlook

• Macro conditions remain supportive, well above mid-cycle levels, however superior 2015 conditions likely to fade
• Downstream operation continues based on its strategic directions: efficiency increase in Refining, organic and inorganic growth in Petrochemicals and Retail businesses
• The Next Downstream Program continues with the aim of supporting the overall Downstream EBITDA and mitigate a potential shortfall caused by a softening in the external macro. The 2017 CCS EBITDA target of USD 1.3-1.4bn, based on 2014 premises, includes:
  • USD 350mn asset and market efficiency improvements
  • USD 150mn contribution from strategic growth projects
• The Downstream business’s normalized CAPEX by 2017 should land between USD 400 – 500mn which provides an excellent free cash-flow generation opportunity

I am glad that we fully harvested the opportunities of the external conditions in both refining, petrochemicals and retail during 2015. However the historically high USD 1.65bn clean EBITDA is not only a result of favourable external conditions, but also reflects substantial internal efficiency improvements. In the Next Downstream Program we are well on track and added USD 210mn improvement already in 2015. With an action plan in place, we are very confident that the programme will be delivered with a total contribution of USD 500mn. In addition to the business actions of the Next Downstream Program, we have decided to devote more time and attention to improve our internal working culture based on our core values and behaviours. I believe that this is the milestone of making all continuous efficiency improvement programmes sustainable in the longer term and to get closer to the highest level of operational excellence.

Ferenc Horváth – Executive Vice President, Downstream

Competitive advantage

MOL Group’s Downstream division is made up of different business activities that are part of an integrated value chain. This value chain turns crude oil into a range of refined products, which are moved and marketed for household, industrial and transport use. The products include, among others, gasoline, diesel, heating oil, aviation fuel, lubricants, bitumen, sulphur and liquefied petroleum gas (LPG). In addition, it produces and sells petrochemicals worldwide and holds a leading position in the petrochemical sector in the Central Eastern Europe region.

Our “Six production unit model” with a total capacity of 20.9 mtpa refining and 2.2 mtpa petrochemicals benefits from the synergistic operations of our complex high quality asset base. Our high net cash margin-producing refineries in Hungary and Slovakia make the most of their geographical locations, as well as their well-balanced product and customer portfolios. MOL Group Petrochemicals brings distinct advantages to MOL Group’s refineries whilst delivering high quality products to our customers. With widening our value chain by completing the new 130 kt capacity Butadiene unit and finalizing in the first quarter of 2016 the LDPE-4 unit, MOL Group is aiming to become more competitive on the petrochemicals market. Our retail network is composed of more than 1900 stations in eleven countries predominantly located in the supply radius of our refineries which enables us to maximize synergies between refining & marketing and retail.

Feedstock optimisation ensures we select the most appropriate raw materials for all of our refineries from a wide slate of crude oil types. Based on actual crude oil market trends and as a result of successful rehabilitation and expansion of the Friendship I pipeline, between 2012 and 2015 we achieved a continuous increase in alternative crude processing in our refineries, compared to the Urals. Crude and raw materials supplies and low-cost product distribution are achieved through our extensive pipeline system and increased storage depot coverage.