Capital Markets Day November 2019
Today’s Agenda Topic Presenter Introduction & Strategy Update Andreas Shiamishis Our Value Proposition Andreas Shiamishis Strategic Business Units – Refining, Supply & Trading Dinos Panas Strategic Business Units – Petrochemicals Dinos Panas Q&A Session #1 Strategic Business Units – Marketing Andreas Shiamishis New Businesses: ▪ Renewables George Alexopoulos ▪ Power & Gas ▪ E&P Q&A Session #2 Financial Profile Vasilis Tsaitas Q&A Session #3 2
01 Introduction & Strategy Update
Hellenic Petroleum at a Glance 2,029 344kbpd Service Stations 1 Capacity 1 >30% c.60% Fuels Marketing Market Wholesale Market Share in Greece 2 Operations Share in Greece 2 Financial € 730m € 572m 11.1% FY 2018 FY 2018 ROACE 3 FY 2018 FCF 4 Adj. EBITDA 150% € 229m FY 2018 Dividends Last 3Y TSR 1 Shareholder Returns Sources: Company financials, CapIQ and BBG, HELPE. 1 As of Q3 2019. 2 As of fiscal year 2018. Fuels Marketing includes retail, commercial, aviation and bunkering. 3 Defined as Adjusted Net Income + Interest Paid Before Tax / Average Capital Employed. 4 4 Adjusted EBITDA – Capex.
Southeast Europe’s Leading Downstream Group with Presence along the Energy Value Chain POIH 1 HRADF 2 Free Float 45.5% 35.5% 19.0% c. Av. 2016-9M LTM 2019 EBITDA, € M Wholesale, Refining 278 Petrochemicals 98 253 Marketing 106 New Businesses Supply & Trading Power 3 344kbpd 240kt 16.5MT Domestic Marketing 810MW Refining capacity Capacity (PP) Total sales 1,722 Petrol stations Integrated system 80% vertical ~3.8m M³ Gas 4 ~0.4m M³ of 3 refineries integration Product tank capacity 3.3bcm Product tank capacity Aspropyrgos, Elefsina, Supply of propylene Volumes (2018) Thessaloniki International Renewables Marketing ~3.6m M³ >60% >50% 307 Petrol stations in 600MW Crude tank capacity Exports Exports Pipeline 5 countries E&P 9.3 NCI 26kt ~0.7m M³ 9 Exploration Complexity Capacity (BOPP) Product tank capacity licenses in Greece Source: Company filings. 5 1 Paneuropean Oil and Industrial Holdings S.A. 2 Hellenic Republic Asset Development Fund. 3 Elpedison JV. 4 DEPA.
Integrated Business Model with Trading Operations Complementing Our Refining Performance Refining Trading / Wholesale Marketing ( Platt’s + Sales Premia) (Med Benchmark + Overperformance) 45% High Value Crude Highly Domestic ground fuels market Product Supply Complex Yield 1 Flexibility Asset Base 4.5Mt 60% HELPE Domestic 3.9Mt 5% 12% Refining 10% Bunkering Platt ’s System Platt ’s 22% 1.8Mt 88% Aviation 51% 16.5Mt Sales 0.9Mt 12% 16% 344kbpd International LPG High Sulphur 55% NCI: 9.3 Naphtha/Other Low Sulphur Marketing 1.2Mt Exports, Intra-group Gasoline 17.2Mt Middle Distillates 1.5Mt Gross Production Fuel Oil Wholesale 0.7Mt Exports, 3rd Parties Synergies of PETCHEMS 8.0Mt Integrated Refining (Benchmark Pricing Plus Premia) Systems Strong High Value Domestic and international Export Networks markets (PP + BOPP – 240kt) Orientation 16.5Mt 5.8Mt >35% of volumes sold Total Sales to end customers Source: HELPE as of 2018. 6 1 Normalized operations based on current configuration.
Growth Over 10 Years from Simple Refiner to Leading Regional Energy Player Pre-2007 HELPE 2007-2018 Strategy 2019 HELPE Elefsina Refinery Upgrade ▪ Assets State-of-the-art, high complexity 12.0 ( € 1.4bn Capex) refining system Low complexity 1.5 ▪ refineries Well placed to benefit from IMO NCI¹ NCI¹ 2020 Pre-upgrade Post-upgrade HELPE’s Flow Portfolio ▪ Refining Integrated refining assets and Petchems Thessaloniki Standalone business silos with Naphtha, downstream activities SRAR 2 limited integrated portfolio SRAR, VGO 2 Trading ▪ Elefsina Targeted positioning in growing Naphtha, Integrated management UCO 2 with Aspropyrgos gas and power markets Marketing Opex % of Capital Employed Operations ▪ Efficient operations, with strong (18)% cash flow generation High cost structure 15% 13% ▪ and inefficient 300m of annual pre-tax cash flow operations improvement vs. baseline 2007 2018 Export Volume, MT Markets ▪ +168% Over 50% of volumes exported, 9.4 Almost exclusively while maintaining leadership in 3.5 focused and resurgent Greek market dependent on Greece 2007 2018 Finance Deleveraging ▪ Stronger balance sheet and Limited access to 4.6x available liquidity; capacity for capital markets 2.0x cash conversion 2011 2018 Highly successful repositioning over past decade led by current management team 1 As reported by HELPE. 7 2 SRAR (Straight Run Atmospheric Residue), VGO (Vacuum Gas Oil) and UCO (Unconverted Oil) are intermediate products.
HELPE’s Vision Operating Levers to Grow through the Energy Transition Facilitate the energy 1 transition in the Eastern Improve Core …through operational excellence, digitization Business… and energy efficiency Mediterranean by maximizing returns in our core business and 2 …benefiting from prior investments in value Grow developing a diversified, upgrades, development of trading capabilities Core Business… and new routes to market best in class energy portfolio 3 … establishing significant position in renewables, Develop expand Power & Gas, create options in E&P and New Businesses… Large new opportunities linked to energy transition Size of the Business 2025+ 4 Enable …of our vision through competitiveness Long Delivery… improvements and governance 2023 term 2019 Health, Safety and Environment Small 2000 Lies at the foundation of our strategy. We aim for safe and sustainable Alignment with Energy Transition Low High operations that respect the environment and society License To Operate in the Long Term 8
Target: Evolve to a >EUR 1bn Sustainable EBITDA Business EBITDA Medium Term Projections, € M + € 250 – 300m EBITDA ~ € 700m Capex >1,000 ~730 1 2 3 Improve Core Grow Develop Average Sustain & Improve Deliver Growth Diversify & Create Opp. Medium Term Business Core Business New Businesses 2016-LTM 9M 2019¹ (2020-2025) Excl. IMO ▪ ▪ ▪ Competitiveness initiatives: Conversion units Renewables Phase I – ▪ Digital transformation Debottlenecking – ▪ Energy efficiency Increase in PP – Procurement capacity – ▪ Organizational Trading platform restructure 1 Adjusted EBITDA average of FY 2016, FY 2017, FY 2018 and LTM 9M 2019. 9
Strong Track Record in Reducing Environmental Footprint, Accelerating Actions for Further Improvement Environmental Record Reducing carbon footprint and supply of low carbon energy, low emissions solutions targeting 5% reduction of CO2 emissions in the next 5 years through energy efficiency in our core business Implement management systems to a wide range of activities, periodically verified by accredited independent parties Addressing environmental and local communities’ interests through close collaboration and relevant CSR programmes Alignment with the United Nations Sustainable Development Goals (UNSDG), planning to implement Task Force on Climate Related Financial Disclosures (TCFD) ~25% Reduction of Main Air Emission Indicators since 2014 2014 2016 2018 2015 2017 0.45 (23)% 0.40 0.35 (19)% 0.30 0.25 (26)% 0.20 (33)% 0.15 0.10 0.05 0 SOx Air Emissions NOx Air Emissions (tn PM Air Emissions CO2 /tn Crude Feed Emission Index (tn / Throughput) / Throughput) (tn / Throughput) 10
̶ ̶ ̶ ̶ Sustainable Development Is Embedded in Our Strategy through Our CSR Focus and Heath & Safety Commitment Society Health & Safety ▪ Total investments in CSR (2018): € 7m ▪ 60% reduction in Lost Workday Injuries in comparison to last year ▪ Our goals: ▪ All Injury Frequency (AIF) Index: Society: support vulnerable social groups 3.7 Youth: invest in education, research and innovation for younger generations 2.6 Environment & Sustainable Cities: offset carbon dioxide emitted during our operations 2.2 1.9 Culture & Sports: promote our cultural heritage Recent Initiatives 2014 2018 Rebuilding of areas Installation of a PV system on a HELPE & EKO Concawe affected by natural disasters high school roof 11 Source: HELPE Sustainable Development & Corporate Responsibility Report 2018.
Aligning Our Corporate Governance to Market Best Practices Actions To Further Align with Best Practices and New Legislation Our Corporate Governance Today ▪ Alignment with new corporate law enhancing Board of Directors: Related Party Transactions review and ▪ 13 members (2 executive and 11 non- disclosure framework: executive, 2 independent) – Board composition, related parties policy and ▪ Areas of improvement in Board remuneration policy operations ▪ Implementation of additional measures to evaluate the functioning of the Board of Board Committees: Directors : ▪ Audit, Remuneration & Succession – Self-assessment process and performance Planning, Oil Supply, Labour Matters, evaluation by external experts Financial and Economic Planning ▪ Review and improvement of internal Disclosure: governance: – Review of Code of Conduct, update of the ▪ Developments in Governance codes and Conflict Prevention Policy, implementation of ESG disclosure Competition Policy and manual of compliance 12
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