RomaniaCompany update

June 30, 2015

Oil&Gas Integrated Company

OMV PETROM Waiting for better times

Update We estimated 12m TP of RON 0.3817 (vs. RON 0.5238, previously) for OMV Petrom

(SNP) stock and we downgraded the stock to Hold from Buy, given the insignificant upside potential of 0.7% from current market price. Main changes to our model refer to the inclusion of: lower oil price given the latest developments on the market; lower oil&gas production following the planned reduction of CAPEX for maintaining a stable production; a revision of power segment forecasts following a more depressed view on local electricity market; a new liberalization calendar for households gas price expected to be implemented with marginal positive impact on Petrom, as the company sells more to industrials than to households; changes of WACC assumptions. However, considering our new set of estimates, we have revised downwards our EPS by 32.3% on avg. for 2015-23e and clean EBIT by 33.2% on avg. for 2015-23e.

Catalysts for the share price The outcome of drilling of exploration wells in Neptun Block and the results of the evaluation of the consolidated block potential should be the most important catalysts for the share price in coming years. The analysis of data gathered from Domino-2 exploration well hasnt been finished yet as it requires a longer period of time than initially anticipated. An improvement in spark spreads isnt seen by the end of the year, but gradually the situation might turn profitable for the company. However, marketing sales are in recovery mood and we expect to counteract to some extent the anticipated poor performance of Downstream Gas. We consider highly improbable the re-launch of the SPO for 9.84% this year, but the story might be different for the stake held by Fondul Proprietatea (FP), which is likely to decide to sell some of the SNP shares owned. Periods of higher risk aversion,triggered mainly by Eurozone debt crisis, should impede positive evolution of local stocks, including OMV Petrom one.

12m target price and methodology Our 12m TP is derived based on DCF model and exit approach to estimate terminal value. The peer group analysis showed a mixed picture with SNP stock trading at discounts to its major peers, namely 17.8%-41.9% in terms of EV/EBITDA 2015-16e in spite of better expectations of EBITDA margin for OMV Petrom, and at premium of 11.0% in terms of EV/EBIT 2015e and at discount of 24.5% in terms of EV/EBIT 2016e, respectively.

Alternative scenarios and risks to our valuation The risks related to an unstable fiscal framework are very likely to manifest mainly next year, while persistent low oil price might hinder companys investment plans with negative effects on medium-long term production outlook. Local Government might publish a new royalty regime by end of 2015, but also a potential new tax regime of the Upstream activity of oil&gas companies.

Next events IFRS H115 results to be released on 12 Aug15 and a conference call is scheduled for discussing half-year results on the same day.

Hold (12m) Price 29/06/15 12m target RON 0.3790 RON 0.3817 Sector Weighting na Last Recommendation BUY (TP:RON 0.5238) on 24 Sep14

Type of investment

Extensive offshore exploration programme

9

Lower CAPEX for mature fields 9 Efficiency increase programme 9

New royalty regime to be decided 9

1 year-Price, Volume, MA 100

Source: FactSet, BRD-GSG Research

Petrom on www.petrom.com

Share data Financial data* 12/13 12/14 12/15e 12/16e Ratios 12/13 12/14 12/15e 12/16eRIC SNPP.BX, Bloomberg SNP. RO Sales (RON,m) 24185.0 21541.3 19425.1 19744.5 Adjusted P/E (x) 5.16 5.70 10.58 10.31 52-week range 0.35-0.49 Net Income (RON,m) 4824.0 2099.7 2028.9 2081.5 Price/CFO (x) 3.12 3.14 4.27 4.11EV (RONm)DCF(Jun15) 20,707.66 CFO/share (RON) 0.142 0.121 0.089 0.092 EV/EBITDA (x) 2.70 2.86 3.97 3.75Market cap. (RON,m) 21,468.11 EPS adj** (RON) 0.086 0.067 0.036 0.037 EV/EBIT (x) 4.23 6.99 8.20 7.75Free float (%) 9.36 BVPS (RON) 0.470 0.477 0.500 0.524 P/Sales (x) 1.04 1.00 1.11 1.09 Gross Div/share (RON) 0.034 0.011 0.013 0.013 Dividend yield (%) 6% 2% 3% 3%

Performance (%) 1m 3m 12m Payout (%) 40% 30% 35% 35% Price/book value (x) 0.94 0.79 0.76 0.72

Ordinary shares -0.21 5.81 -18.9 Net Debt/equity (%) 0.1% 6.9% 0.6% -1.8% ROIC/WACC (x) 1.31 0.72 0.73 0.73

Relative to BET 3.1 1.9 -23.2 *IFRS financial statements; ** adj.for exceptional items (e.g.: impairment expenses)

Carmen Lipar

carmen.lipara@brd.ro (40) 21 301 43 70

OMV PETROM

June 30, 2015 2

Market performance

SNP vs. BET yoy share price performance, rebased

Over the last 12 months, SNP shares underperformed BET, by 15.2% on avg. SNP stock price ascribed on a downward trend starting the end of Aug14, when it reached a maximum of RON 0.49 per share, with the exception of the second part of Dec14, first part of Apr15 and second part of Jun15, when it recovered part of the losses. We believe that future oil price evolution will remain the main driver of SNP share on short term.

SNP vs. European peers price performance, rebased, RON denominated, fixed FX rate

SNP shares barely overperformed by 0.9% on avg. its European peers for the period Jun14 - Jun15, mainly because of its good performance during the second half of 2014. This year, SNP underperformed its European peers.

SNP price vs. Brent/Ural oil price, yoy evolution, rebased

The evolution of SNP share price became more correlated with Brentand Ural oil price for Jun14 Jun15, translated into a positivecorrelation coefficient with Brent oil (0.96) and Ural oil price (0.95) for this period.

Source: FactSet, BRD-GSG Research

OMV PETROM

June 30, 2015 3

Valuation

Target price calculation and fundamental valuation

We revised our rating on OMV Petrom stock to Hold from Buy, with a downward revision of our 12m target price (TP) to RON 0.3817 (Fair value per share of RON 0.3437) from RON 0.5238 (Fair value per share of RON 0.4469) and a tiny potential upside of 0.7%. DCF model is constructed based on the assumptions detailed in Key drivers and outlook section presented below.

We have included in our DCF model the 2024 estimates, so the explicit timeframe spans now over 2015-24e. We have slightly changed our parameters for the terminal value assessment following adjustments of our estimations. Thus, we have used a normalized EBITDA (EBITDAn) of RON 6.40bn (i.e: average EBITDA for 2007-24e), compared with EUR 7.51bn (average EBITDA for 2007-23e) used in our previous report to estimate terminal value. Also, we increased the multiple of EV/EBITDA to 3.5x vs. 3x in our previous report, as a result of higher multiples for mature peers multiples as compared with our previous report (average of median EV/EBITDA18 is approx. 3.7x for largest comparables) and lower discounts at which SNP stock is trading in terms of EV/EBITDA15.

As regards WACC estimations, we have included also 2024e WACC, with several major changes on WACC parameters as following:

1/ LT risk free rate revised down to 3% from 4.5% for each year of the period 2014e-2017e and from 4% for 2018-23e, respectively. Moving forward, we use 3.5% as LT risk free rate for discounting the terminal value;

2/ equity risk premium (ERP) has been reduced to 7% for 2015e and kept unchanged at 7% for 2016-18e, maintained at 6.5% for 2019-23e, and 6% starting 2024e-onwards;

3/ beta coefficient () was reduced to 1.05 from 1.1 in our previous report;

We have reduced our estimation for companys cost of debt (before tax) given local low credit demand and easing monetary policy, while we havent changed the target debt/equity from our previous report. All the above modifications led to a downward revision of WACC by 1.16% on avg. for 2015-23e.

The table below depicts WACC assumptions:

WACC assumptions

Indicator 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

LT Risk Free Rate 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.50%

Equity Risk Premium 7.00% 7.00% 7.00% 7.00% 6.50% 6.50% 6.50% 6.50% 6.50% 6.00%

1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05

Target Debt/Equity 56.25% 56.25% 56.25% 56.25% 56.25% 56.25% 56.25% 56.25% 56.25% 56.25%

levered 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54 1.54

Cost of Equity 13.80% 13.80% 13.80% 13.80% 13.03% 13.03% 13.03% 13.03% 13.03% 12.76%

Cost of Debt (before tax) 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%

WACC 10.04% 10.04% 10.04% 10.04% 9.55% 9.55% 9.55% 9.55% 9.55% 9.38%

Source: BRD-GSG Research

12M TP at RON 0.38 and fair value of RON 0.34

OMV PETROM

June 30, 2015 4

Indicator (RON,m) 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

EBIT 2,639.19 2,701.97 2,808.81 3,161.04 3,767.32 3,458.07 3,979.24 3,958.50 4,056.91 3,942.13

EBIT*(1-t) 2,190.53 2,242.63 2,331.31 2,623.66 3,126.87 2,870.20 3,302.77 3,285.56 3,367.23 3,271.96

+D&A expenses 2,805.06 2,879.35 3,029.37 3,171.02 3,305.37 3,509.50 3,629.14 3,642.69 3,748.23 3,850.96

change in Working Capital 30.11 95.94 (178.90) 43.03 (87.54) 63.55 (68.30) 57.17 (59.23) 58.01

CAPEX 4,295.00 4,295.00 4,195.00 4,235.00 4,235.00 4,235.00 4,235.00 4,235.00 4,235.00 4,235.00

FCFF 730.70 922.93 986.78 1,602.71 2,109.71 2,208.24 2,628.60 2,750.41 2,821.23 2,945.94

WACC 10.04% 10.04% 10.04% 10.04% 9.55% 9.55% 9.55% 9.55% 9.55% 9.38%

Discounted FCFF 695.95 798.81 776.13 1,145.52 1,376.46 1,315.16 1,429.05 1,364.93 1,278.04 1,220.13

Present value of FCFFs ('15 -'24e) 11,400.17 Present Value of Terminal

Value* 9,282.89 Minorities (24.59)

EV 20,707.66 (-) net debt (Mar15, 31) 1,237.52

Shareholder's value: 19,470.14 Fair value per share 0.3437

Target price 12M 0.3817 Closing Price as of 29 Jun15 0.3790

Upside(Downside) potential: 0.71% *Terminal value based on exit approach methodology Source: BRD-GSG Research

Sensitivity Analysis

We have run a sensitivity analysis for the parameters (i.e.: EBITDAn, EV/EBITDAn) used in terminal value calculations.

The sensitivity analysis results are presented in the tables below, showing significant upside of up to 31.6% for Petrom shares, while potential downside risk ranges between -4.1% and -24.0%:

Target PriceEV/EBITDAn

2.0 2.5 3.5 4.5 5.0EBITDAn-15% 0.2881 0.3102 0.3544 0.3986 0.4207 EBITDAn-10% 0.2933 0.3167 0.3635 0.4103 0.4337

EBITDAn 0.3037 0.3297 0.3817 0.4337 0.4597 EBITDAn+10% 0.3141 0.3427 0.3999 0.4571 0.4857 EBITDAn+15% 0.3193 0.3492 0.4090 0.4688 0.4987

Source: BRD-GSG Research

Upside/Downside

potentialEV/EBITDAn

2.0 2.5 3.5 4.5 5.0EBITDAn-15% -24.0% -18.2% -6.5% 5.2% 11.0%

EBITDAn-10% -22.6% -16.4% -4.1% 8.3% 14.4% EBITDAn -19.9% -13.0% 0.7% 14.4% 21.3%

EBITDAn+10% -17.1% -9.6% 5.5% 20.6% 28.2% EBITDAn+15% -15.8% -7.9% 7.9% 23.7% 31.6%

Source: BRD-GSG Research

A new Fiscal Code, which contains several fiscal measures aiming at reducing taxation as detailed in Key drivers and outlook section, was approved by local Parliament on 24 Jun15.

OMV PETROM

June 30, 2015 5

These fiscal easing measures are planned to be enforced starting with Jan16. However, given the constraints stated by the deficit targets assumed by local authorities under Fiscal Compact provisions (structural budget deficit to be equal or below 1% of GDP starting with 2015), we expect an increase of other taxes, which should counterbalance the positive effects on consumption of fiscal easing measures. The uncertainties lie ahead and it is very difficult to define and model different scenarios as unexpected changes might appear.

Nevertheless, we have decided to gather all possible additional taxes or increases of current taxes that might influence OMV Petroms performance negatively under the royalty tax, although only a part of amount is strictly referring to royalty tax. In our base case scenario, we have used a royalty tax of 16% (average) starting with 2016-onwards and we have derived 12m TP of RON 0.3817 per share. Consequently, we have run another sensitivity analysis on different values of royalty tax that might be applied in two periods with 5 years the first one and 4 years the second one. All the other assumptions were kept unchanged from base case scenarios, and the modifications on fair value and 12mTP are presented below:

Assumption on royalty tax Fair Value (RON/share)

12mTP (RON/share)

Chg. of 12mTP (%) to 12mTP

16% in 2016-2020; 12% for 2021-2024 0.3583 0.3978 +4.2%

12% in 2016-2020; 10% for 2021-2024 0.3906 0.4337 +13.6%

10% in 2016-2020; 8% for 2021-2024 0.4104 0.4557 +19.4%

14% in 2016-2024 0.3635 0.4037 +5.8%

Peers comparison We have noticed a significant reduction of OMV Petrom (SNP) shares trading discounts compared to its peers from our last report. Currently, SNP shares are trading at discounts of around 17.8%-41.9% in terms of EV/EBITDA for 2015-16e. In terms of P/E, SNP shares are trading at premium of 8.6% for 2015e and at discount of 33.1% for 2016, respectively. The expectations in terms of EBITDA margin for Petrom (avg. of 36.32% for 2015-16e) have been maintained at higher levels as compared to its peers (avg. of 11.97% for 2015-16e). However, the unfavourable local fiscal environment, low oil price and increasing risk aversion triggered by a possible Grexit might refrain investors from taking significant positions. The results of peers analysis are presented in the table below (closing prices as of 26 Jun15):

14 15e 16e 14 15e 16e 14 15e 16e

MOL Hungarian Oil & Gas Plc Class A HUNGARY 45.95 4,463 8.92 8.82 6.44 3.83 3.88 3.64 8.56 8.62 8.42Polish Oil & Gas Co. POLAND 1.58 7,133 9.34 12.05 10.29 5.16 5.90 5.24 7.87 9.66 10.45Unipetrol as CZECH REPUBLIC 5.91 975 37.90 7.52 25.63 Hellenic Petroleum SA GREECE 4.68 2,146 18.88 7.42 12.10 8.11 4.60 6.56 15.62 6.15 5.91OMV AG AUSTRIA 25.42 11,137 8.65 12.66 7.24 3.17 3.77 2.67 4.92 9.96 7.65Polski Koncern Naftowy ORLEN S.A. POLAND 17.48 4,289 13.02 9.09 9.47 5.85 5.44 4.98 12.95 7.30 9.25OMV Petrom SA ROMANIA 0.09 5,754 5.60 10.87 6.09 2.83 3.88 2.68 4.38 9.26 6.29Average 16.12 10.01 9.11 5.61 4.72 4.62 12.59 8.34 8.34Discount/premium -65.3% 8.6% -33.1% -49.5% -17.8% -41.9% -65.2% 11.0% -24.5%

P/E EV/EBITDA EV/EBITCompany Country Price(EUR) Mk Cap(EURm)

Source: FactSet, BRD-GSG Research

OMV PETROM

June 30, 2015 6

Key drivers and outlook

Upstream (former E&P)

We made several changes to our estimates in the E&P segment to reflect a new outlook on oil prices and on oil and gas production levels for 2015-24e. SNP share price lost approx. 18.3% yoy, while EuroStoxx/Oil&Gas (RON, fixed) declined by 13.2% yoy, losses driven by declining crude oil Brent price from USD 113.8/bbl on 26 Jun14 to USD 62.8/bbl on 26 Jun15. Below, we include the summary of adjustments in our assumptions: 9 Groups hydrocarbon production outlook for the company is strong correlated with oil

price forecasts. The low oil price environment isnt supportive for investments in increasing and/or maintaining production, especially in case of OMV Petrom (SNP) which has significant mature fields. Companys officials stated that the investments allocated to workover jobs and new wells drilled will be scaled down, while negative effects on hydrocarbon production will be seen in coming future. The Q115 results have already shown that workover jobs dropped by 17% yoy in Q115, while for the entire year the estimates are for 30% yoy decline, and number of new wells to be drilled are seen to halve as compared to 2014. We estimated the Groups hydrocarbon production to go down by 2.2% yoy in 2015, as a consequence of lower investments in Romania, and in spite of good results posted in Q115, which were triggered by previous years CAPEX. We dont expect improvements in Kazakhstan production level due to technical constraints and we estimate a drop of 7.5% yoy. As regards domestic production, we expect a decline by 1.9% yoy, mainly on lower gas production (-2.3% yoy), and oil production is estimated to decrease by 1.5% yoy in 2015. All in all, we expect the Groups production to go down by 0.8% CAGR 2015-24e, with risks tilted for a higher downside. However, the investments in offshore exploration will continue, with ongoing drilling campaign in Neptun Deep as Pelican South-1 exploration well finalized in Mar15, Dolphin-1 well completed early May15, while Ocean Endeavor drilling rig moving to the new drilling location. The data from Domino-2 exploration well are being evaluated and the announcement of the results was delayed from initial estimation (early 2015). For the moment, we havent included in our model any potential hydrocarbon production from Neptun Block, as further assessments are required. Also, the company mentioned the focus on deep exploration targets in partnerships with the current status of exploration wells as following: 4000 Piscuri (Repsol JV) reached target depth and is preparing for testing, good hydrocarbon showing in multiple reservoirs; 6500 Baicoi Deep (Repsol JV) will resume drilling in 2016. The 700 Burcioaia (Hunt Oil JV) drilling has been completed, plugged and abandoned. OMV Petrom, unlike some of its peers, has a low gearing ratio (5.6% as of end-Mar15) and a large maneuver space to raise additional financing sources to cover its investment program, even if low oil price environment continues to persist. On 21 May15, OMV Petrom (SNP) announced that it contracted a multi-currency credit line worth EUR 1bn from 17 national and international banks with 5 years maturity that can be extended for another 2 years. The company decided to replace a similar credit facility worth EUR 930m contracted in 2011 maturing in 2016, which hasnt been used up to now. The credit line will be used by OMV

E&P EBIT15e seen at RON 2.4bn vs. RON 4.4bn, mainly due to lower oil price and lower hydrocarbon production

OMV PETROM

June 30, 2015 7

Petrom (SNP) for financing current operations when needed in a low oil price environment. No details regarding the costs of the credit line have been disclosed.

9 Brent oil price evolution has been in a recovery mood in the past months, after reaching the minimum level of the last five years on 13 Jan15 at USD 46.59/bbl. Since the lowest level, oil price increased by 36% as of Jun15, but the upward trend isnt expected to continue in coming months. SG analysts expressed their view for rangebound trading of crude oil (for WTI, Brent and the global oil complex) in coming 18 months in SG Commodities Review report One swallow does not a summer make released on 3 June 2015. SG analysts believe that the global rebalancing will be driven by US crude oil production in the next 18 months, especially in the second half of next year. US supply has finally stopped growing due to sharp cuts in Upstream spending and drilling, hitting a plateau in the last three months, with declines expected soon. This has already provided support for prices, and helped to set a floor. On the other hand, according to the above mentioned report, US oil rig counts should stabilise and increase gradually in Q315. US supply will increase gradually, but once again with a long 3-6 month lag to rig count increases. As this dynamic develops, and the markets look ahead toward US supply increasing, this will exert downward pressure on prices, and will help to set a ceiling. As regards OPEC decisions impact on future evolution of oil price, SG analysts expect that OPEC will continue to let prices to balance the market, without any policy or quotas change. In case of an agreement with Iran regarding its nuclear policy, which is highly expected by international analysts, Iran oil exports wont weigh significantly on the market, as it should take some time for resuming oil production. So, Iran production should have a marginal and gradual influence until 2016, according to SG analysts. The latest SG forecasts for ICE Brent oil are: USD 62.3/bbl for 2015e (vs. USD 55.2/bbl previously), USD 65/bbl in 2016e (flat as compared with previous estimation published in Mar15), USD 70/bbl for 2017e (flat as compared with previous estimation published in Mar15), USD 75/bbl for 2018e (vs. USD 72.5/bbl, previously) and USD 75/bbl starting with 2019e-onwards. We have incorporated a slightly different evolution pattern for Brent oil price (as presented in the table below) together with our estimation for differential Brent-Ural, which should be narrower given the poor oil price environment. As a result, Groups average realized price is seen to fluctuate between USD 52.89/bbl in 2015e and USD 71.65/bbl in 2024e. OMV Petrom entered into oil price hedges for a volume of 15,000 bbl/d of the Upstream oil production (approx. 20% of the group annual oil production) to protect the Groups cash flow from potential negative impact of oil price between Jul15 and Jun16. Via a zero premium collar program, OMV Petrom has secured a Brent price floor of USD 55/bbl by giving away the upside above USD 69/bbl throughout Jul15 to Dec15, above USD 73/bbl through Jan16 to Mar16, and above USD 82/bbl through Apr16 to Jun16. As our estimates are above the collars floor and below the collars cap for the periods specified in the hedging contract, we havent included any profit from hedging instruments above presented for the time being.

9 We believe that two forces will trigger Groups production costs in opposite directions, mainly on short term. One factor is related to FX developments, as appreciation of USD against EUR and indirectly against RON should prove supportive for a decline of domestic production costs in local currency. Also, the reduction of tax on special constructions to 1% in 2015 from 1.5% previous year and its elimination starting 2016 together with low inflationary expectations with influence on material costs are other factors weighing on

OMV PETROM

June 30, 2015 8

decreasing production costs in Romania. On the other hand, the expected decline of Groups production should increase average production cost per bbl. Thus, we have included in our model, Groups production cost between USD 14.25/bbl in 2015e and USD 17.06/bbl in 2024e. Otherwise, we expect a tight control of cost management in order to preserve to some extent companys EBIT during period of low oil price.

9 We have made changes to the estimated USDRON FX rate based on BRD and SG economists estimates to reflect central banks monetary policy decisions and prospects for US and Eurozone economic growth. USDRON is seen at 4.0 for 2015e, at 3.95 for 2016e, at 3.85 for 2016e and at 3.6 from 2017e-onwards.

9 We have made also changes to the liberalization calendar of gas market for households as detailed in Downstream Gas. However, the largest impact of gas market deregulation calendar is reflected in Upstream, and not in Downstream Gas.

9 In a low oil price environment, fiscal outlook becomes critical in assessing companys

future performance. After two years of relative stability regarding taxes, although at higher levels as compared with 2012, changes to current regulatory framework included in the new Fiscal Code and Fiscal Procedure Code have been approved by the Parliament on 24 Jun15. Among the most important modifications expected to be applied starting with Jan16, we may mention: the cut in regular VAT rate from 24% to 19%, elimination of tax on special constructions, the cancelation of the additional excise duties of Euro 0.07 per 1 liter of fuels introduced back in Apr14. These fiscal easing measures should have a positive influence on demand, but they might not prove sustainable under the restriction of meeting public deficit targets. Hence, is likely to see other taxes to be raised in order to diminish higher fiscal deficits foreseen starting 2016.

Another unknown variable is the royalty regime, which has been subject of negotiations between local authorities and oil&gas producers for the past two years, at least. We reiterate the fact that the public authorities announced their intention to set a new level of royalty tax to be applied for new exploration licenses and also that they will establish a different royalty for on-shore and off-shore licenses. Under current circumstance, chances for higher royalty tax for on-going licenses as a result either of higher tax rate or of methodology changes are going up. Another possibility is to introduce new taxes in relation with the exploitation of hydrocarbon fields which will rise the level of overall taxes paid by the company.

Moreover, the applicability of the windfall tax expires in 2015, and we believe it wont be renewed for 2016. As we have previously mentioned in this report, its rather difficult to foresee what fiscal regulatory changes might be applied for coming period, but is likely to see new taxes in order to counterbalance the cut of VAT rate, mainly. We tried to reflect potential new taxes and a higher level of royalty tax under a generic name of royalty tax.

Overall, we see clean EBIT E&P to fluctuate between a minimum of RON 2.36bn (2016) and a maximum of RON 3.15bn (2021), but any change in fiscal regulations, CAPEX pursued and exploration activities success within the next years might have a significant impact on EBIT estimation.

OMV PETROM

June 30, 2015 9

The table below presents the main assumptions for the E&P segment:

Key assumptions E&P segment 2014

# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

Total hydrocarbon production (mn boe) new 65.82 64.38 63.19 62.03 61.27 60.60 59.93 59.73 59.73 59.73 59.73

Total hydrocarbon production (mn boe) prev 66.32 66.40 66.43 66.46 66.50 66.53 66.57 66.60 66.63 66.67 nav

Crude oil and NGL production (mn bbl) new 30.74 30.12 29.71 29.32 29.05 28.85 28.65 28.45 28.45 28.45 28.45

Crude oil and NGL production (mn bbl) prev 31.95 31.99 31.99 31.99 31.99 31.99 31.99 31.99 31.99 31.99 nav

Natural gas production (bcm) new 5.79 5.64 5.50 5.36 5.29 5.21 5.14 5.14 5.14 5.14 5.14

Natural gas production (bcm) prev 5.69 5.70 5.70 5.71 5.71 5.72 5.72 5.73 5.73 5.74 nav

Average Brent price (USD/bbl) new 99.10 62.30 65.00 70.00 75.00 80.00 80.00 80.00 80.00 80.00 80.00

Average Brent price (USD/bbl) prev 105.00 103.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 nav

Differential Brent-Ural(USD/bbl) new 1.15 1.00 1.00 1.00 1.10 1.10 1.10 1.10 1.10 1.10 1.10

Differential Brent-Ural(USD/bbl) prev 1.40 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 nav

Average Urals price (USD/bbl) new 97.95 61.30 64.00 69.00 73.90 78.90 78.90 78.90 78.90 78.90 78.90

Average Urals price (USD/bbl) prev 103.60 101.90 98.90 98.90 98.90 98.90 98.90 98.90 98.90 98.90 nav

Average Group realized crude price (USD/bbl) new 86.67 52.89 55.18 59.46 63.69 71.64 71.65 71.65 71.65 71.65 71.65

Average Group realized crude price (USD/bbl) prev 96.17 94.60 91.81 91.81 91.81 91.81 91.81 91.81 91.81 91.81 nav

Average Group realized crude price (RON/bbl) new 290.28 211.54 217.98 228.94 229.30 257.91 257.92 257.94 257.94 257.94 257.94

Average Group realized crude price (RON/bbl) prev 317.36 321.64 302.99 302.99 302.99 302.99 302.99 302.99 302.99 302.99 nav

OPEX (USD/boe) new 17.27 14.25 14.57 15.10 16.31 16.48 16.64 16.81 16.89 16.98 17.06

OPEX (USD/boe) prev 16.13 15.96 16.70 16.95 17.20 17.46 17.72 17.99 18.26 18.53 nav

OPEX (RON/boe) new 57.84 57.00 57.57 58.14 58.73 59.31 59.91 60.51 60.81 61.11 61.42

OPEX (RON/boe) prev 53.22 54.28 55.09 55.92 56.76 57.61 58.47 59.35 60.24 61.15 nav

USD RON new 3.35 4.00 3.95 3.85 3.60 3.60 3.60 3.60 3.60 3.60 3.60

USD RON prev 3.30 3.40 3.30 3.30 3.30 3.30 3.30 3.30 3.30 3.30 nav

Clean EBIT (RON,m) new* 3,197.0 2,403.2 2,358.5 2,489.7 2,628.2 3,117.6 2,918.6 3,153.4 3,141.8 3,038.2 2,937.3

Clean EBIT (RON,m) prev 4,555.2 4,365.1 4,512.8 4,317.1 4,164.8 4,058.4 4,347.7 4,253.7 4,210.2 4,240.7 nav

*the estimated figures for 2015 include the impact of taxes on oil producers and on gains resulted from gas market deregulation #For the 2014, the new stands for actual figures, while prev represents our estimations for 2014 indicators Source: BRD-GSG Research

Dowstream Oil and Gas (former R&M and G&P)

Downstream Gas In the past months, discussions over resuming the liberalization of gas price for households revived and apparently a new calendar is waiting Governments approval, hopefully during H215. The gas price for households is proposed to increase by RON 7/MWh to RON 60/MWh in the second half of the year. Also, an increase of RON 6/MWh will be applied annually to the households gas price until 2018, when the gas price for households is seen at RON 78/MWh. We have incorporated in our model this scenario, as we believe that is only a matter of time until the Government approves it. Regarding the industrials gas price, we dont see any change from current levels.

OMV PETROM

June 30, 2015 10

Also, we dont forecast significant transformation of the gas supply and demand pattern, with a very balanced gas market in coming years. Hence, domestic gas consumption is likely to exhibit no increase until 2018 and only 1% per year from 2019-onwards.

In Europe, the gas prices might experience an increase after recent tightening of production at Groningen, Europes largest gas field. According to SG research publication European Gas Special released on 23 Jun15, Less Groningen gas means more Russian gas and higher prices, if the tightening of gas production at Groningen lasts in coming months, following the spate of earthquakes in the region, higher need for Russian gas and a possible increase of gas prices will be recorded.

Given the above mentioned features of local gas market, we dont see gas imports growing significantly from levels recorded in Q115, so local gas price should be only marginal influenced.

Power segment After electricity prices posted gains in the last quarter of the year, the losses hit the market and drove electricity prices on Day Ahead Market below 3-year average period between Mar15 and May15. The monthly average of electricity price on Day Ahead Market declined by 5.4% yoy to RON 122/MWh in Jun15. The net domestic electricity consumption increased by 1.7% yoy in Q115, while our forecast for the whole year points to an upside of 1% yoy in 2015 and another 1% yoy for 2016. With more power supply from hydro, wind and solar power plants to come during spring and summer, we dont see major improvement of power prices from current levels.

0

50

100

150

200

250

300

May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15

RON/MWhMonthly avg. electricity price on Day Ahead Market (RON/MWh)Domestic gas price (industrial consumers) (RON/MWh)3y avg. electricity price on Day Ahead Market (RON/MWh)

Source: OPCOM, BRD GSG Research

The past months evolution pattern of domestic power prices didnt differ too much from the ones at European level, with SG analysts expecting that 2015 to be a difficult year for generators, partially driven by declining fuel prices, and by still low overall carbon prices, as stated in SG Commodities Review report One swallow does not a summer make released on 3 Jun15.

Consequently, the outlook for the power segment remains challenging with spreads under pressure. We expect Brazi power plant to operate below its capacity throughout this year, with

OMV PETROM

June 30, 2015 11

gradual improvement in coming years. Moreover, a three-week planned outage of the Brazi was in place by 7 May15.

In the table below, we have presented main assumptions for Downstream Gas segment, while the final result shows a downside revision of the combined segments.

Key assumptions Downstream Gas segment

2014# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

Consolidated gas sales (TWh) new 47.7 47.13 46.56 46.00 46.46 46.51 46.56 46.60 46.65 46.70 46.74

Consolidated gas sales (TWh) prev 45.49 52.57 53.54 54.62 55.16 55.27 55.27 55.37 55.37 55.48 52.57

Regulated gas price for industrial consumers in RON/MWh new

85.10 89.40 89.40 89.40 89.40 89.40 89.40 89.40 89.40 89.40 89.40

Regulated gas price for domestic producers in RON/MWh prev

97.35 89.40 89.40 89.40 89.40 89.40 89.40 89.40 89.40 89.40 nav

Regulated gas price for households consumers in RON/MWh new

52.30 56.65 66.00 72.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00

Regulated gas price for households consumers in RON/MWh prev

52.58 52.55 53.95 55.35 57.50 60.45 63.05 65.60 69.40 74.10 nav

Clean EBIT (RON,m) new (63) (118.4) (231.2) (223.2) 32.4 147.5 154.3 161.4 163.8 382.2 384.6

Clean EBIT (RON,m) prev 597.9 369.5 348.5 386.5 391.4 433.2 333.6 235.3 83.9 282.6 nav

#For the 2014, the new stands for actual figures, while prev represents our estimations for 2014 indicators Source: BRD-GSG Research

Downstream Oil

Downstream Oil segment seems to have embarked on a recovery path, as marketing volumes are seen to be higher this year, while the advance of refining margins on Western markets might not continue in coming months due to current overcapacity on local and European markets. The low oil price environment together with positive effects from modernization of Petrobrazi refinery should support expectations for a positive overall performance of Downstream Oil segment.

In Q115, marketing volumes went up by 5% yoy to 0.75m tons on improved demand from retail clients (+4% yoy of retails sales) and commercial clients (+6% yoy of commercial sales), mostly as a result of lower prices. The forthcoming driving season should improve further marketing performance this year, while lower taxation starting 2016 should amplify the recovery of this segment.

Consequently, we estimated clean EBIT15e at RON 448.4m (vs. RON 252.7m, previously) and EBIT16e at RON 671.1m (vs. RON 610.9m, previously), mainly because of higher volumes and poor oil price environment. In our valuation model, we did not consider positive/negative inventory effects in P&L lines, because they are not recurrent and we might have false upsides/downsides biases on EBIT.

The table below presents the main assumptions for Downstream Oil segment:

OMV PETROM

June 30, 2015 12

Key assumptions Downstream Oil segment

2014# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

Refining input new (m t) new 4.01 3.83 3.79 3.75 3.71 3.69 3.66 3.63 3.63 3.63 3.63

Refining input (m t) prev 3.46 3.78 3.78 3.78 3.78 3.78 3.78 3.78 3.78 3.78 nav

Total refined product sales (m t) new 4.81 3.77 3.84 3.94 4.06 4.23 4.20 4.32 4.32 4.32 4.32

thereof Marketing sales volumes (m t) new 3.38 3.39 3.40 3.41 3.43 3.44 3.45 3.45 3.46 3.46 3.46

Total refined product sales (m t) prev 4.71 4.85 4.85 4.85 4.85 4.85 4.85 4.85 4.85 4.85 nav

thereof Marketing sales volumes (m t) prev 3.40 3.44 3.42 3.47 3.49 3.51 3.53 3.53 3.53 3.53 nav

Clean EBIT (RON,m) new 654 448.4 671.1 641.1 601.3 605.3 490.5 771.9 762.4 748.0 733.7

Clean EBIT ( RONm) prev 213 252.7 610.9 583.8 589.5 599 603.6 634.9 667 700.6 nav

#For the 2014, the new stands for actual figures, while prev represents our estimations for 2014 indicators Source: BRD-GSG Research

Corporate&Other

We kept unchanged the assumptions for Corpporate&Other sector from our previous report.

Key assumptions Corporate segment 2014

# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

EBIT (RON,m) new (108) (94.1) (96.4) (98.7) (100.9) (103.2) (105.3) (107.4) (109.5) (111.5) (113.5)

EBIT (RON,m) prev (87.0) (92.3) (93.4) (94.5) (95.6) (96.6) (97.5) (98.4) (99.3) (100.1) nav #For the 2014, the new stands for actual figures, while prev represents the our estimations for 2014 indicators Source: BRD-GSG Research

All segments for one bottom line

We have downgraded our sales estimation by 15.9% on avg. for 2015-23e, mainly as a result of the downward revision of oil price and hydrocarbon production.

For 2015e, we expect sales of RON 19.43bn (-9.8% yoy) and clean EBIT of RON 2.64bn (-49.3% yoy). We anticipate a financial loss worth RON 194.8m (vs. financial loss of RON 277.6m, previously). Thus, gross income should reach RON 2.44bn in 2015e, by 16% lower than a year-ago period, whilst net income after minorities is seen at RON 2.03bn (-3.3% yoy), as 2014 result was dampened by one-off items (impairment in Kazakhstan and of Brazi power plant).

#For the 2014, the new stands for actual figures, while prev represents our estimations for 2014 indicators Source: BRD-GSG Research

Indicator (RON,m) 2014

# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

Sales new 21,541.3 19,425.1 19,744.5 20,148.8 20,466.2 21,231.9 21,091.7 21,347.6 21,382.0 21,397.9 21,413.9

Sales prev 27,423.5 24,119.7 23,784.5 24,013.2 24,553.3 24,800.4 24,889.6 24,968.9 25,052.7 25,140.5 nav

EBIT new 3,338.0 2,639.2 2,702.0 2,808.8 3,161.0 3,767.3 3,458.1 3,979.2 3,958.5 4,056.9 3,942.1

EBIT prev 5,945.9 4,893.8 5,377.7 5,191.8 5,049.1 4,993.1 5,186.4 5,024.6 4,860.9 5,123.1 nav Financial result new -429.1 -194.8 -194.2 -196.1 -185.2 -187.2 -205.0 -207.4 -194.3 -143.1 -142.1

Financial result prev -568.6 -277.6 -279.4 -282.2 -271.4 -274.1 -294.0 -296.7 -282.0 -224.9 nav

Gross income new 2,909.2 2,444.4 2,507.8 2,612.8 2,976.0 3,580.2 3,253.2 3,772.0 3,764.3 3,913.8 3,800.1

Gross income prev 5,377.4 4,616.3 5,098.3 4,909.6 4,777.8 4,719.0 4,892.4 4,727.9 4,578.9 4,898.2 nav

Reported net income new 2,099.7 2,028.9 2,081.5 2,168.7 2,470.0 2,971.6 2,700.2 3,130.8 3,124.4 3,248.5 3,154.0

Reported net income prev 4,398.7 3,776.1 4,170.4 4,016.0 3,908.2 3,860.2 4,002.0 3,867.4 3,745.6 4,006.7 nav

Net income seen at RON 2.03bn in 2015e (-3.3% yoy)

OMV PETROM

June 30, 2015 13

CAPEX plan and financial resources from 2015e onwards

As we have already mentioned, the company plans to reduce its CAPEX, if the low oil price environment will continue. However, the majority of capital expenditures will be directed on E&P segment, without cutting resources allocated to offshore exploration programs. OMV Petrom will put up for sale selected marginal fields in order to optimize Upstream portfolio, while in Kazakstan will pursue further water injection schemes in both TOC and Komsomolskoe fields in order to secure reservoir pressure and slow down the natural decline of production. The levels for CAPEX and clean CCS EBIT recorded by OMV Petrom for different values of Ural Crude oil price are presented in the chart below:

20

30

40

50

60

70

80

90

100

110

120

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2010 2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

Clean CCS EBIT (RONm) CAPEX E&P (RONm)

Ural Crude price (avg) (USD/bbl), rhsRONmUSD/bbl

Source: OMV Petrom, BRD-GSG Research estimates In Downstream Oil, OMV Petrom will continue the fuel terminal network optimization program with the reconstruction works at the Cluj terminal expected to be finalized by the end of 2015. The companys shareholders approved investments worth RON 5.296bn for 2015, by 20.1% lower than previous year budgeted level, and we included in our model a lower capex worth RON 4.30bn. The detailed CAPEX for 2015-24e are presented below:

Indicator (RON,m) 2014# 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e

CAPEX E&P new 5,349 3,800 3,800 3,800 4,000 4,000 4,000 4,000 4,000 4,000 4,000 CAPEX E&P prev 4,800 4,900 4,900 4,900 4,900 4,900 4,900 4,900 4,900 4,900 nav

change 11.44% -22.45% -22.45% -22.45% -18.37% -18.37% -18.37% -18.37% -18.37% -18.37% na CAPEX Downstream new 798 470 470 370 210 210 210 210 210 210 210

CAPEX Downstream old 1,000 95 95 95 95 95 95 95 95 95 nav

change -20.2% nm nm nm nm -nm nm nm nm nm na

CAPEX Corporate new 15 25 25 25 25 25 25 25 25 25 25 CAPEX Corporate prev 10 15 15 15 15 15 15 15 15 15 nav

change 50.00% 66.67% 66.67% 66.67% 66.67% 66.67% 66.67% 66.67% 66.67% 66.67% na

TOTAL CAPEX new 6,162 4,295 4,295 4,195 4,235 4,235 4,235 4,235 4,235 4,235 4,235 TOTAL CAPEX prev 5,815 5,010 5,010 5,010 5,010 5,010 5,010 5,010 5,010 5,010 nav

change 5.97% -14.27% -14.27% -16.27% -15.47% -15.47% -15.47% -15.47% -15.47% -15.47% na #For the 2014, the new stands for actual figures, while prev represents our estimations for 2014 indicators Source: BRD-GSG Research

CAPEX seen at RON 4.3bn in 2015e, down by 14.3% from our last report

OMV PETROM

June 30, 2015 14

We continue to keep our view of no threat for OMV Petrom to find resources to finance its CAPEX, keeping the medium-long term financial stability of the company. First reason to support our view is low companys gearing ratio at 5.6% as of end-Mar15 vs. 3.3% as of end-Dec14.

Second, significant operating cash flow (OCF), as our estimations point to an annual avg. OCF of RON 6.2bn for 2015-24e, will cover the forecasted CAPEX (annual average of RON 4.24bn).

Dividends

We cut payout ratio from our previous report as a result of lower cash-flow generation power with payout ratio seen at 35% for 2015-17e (vs. 30.14% for 2014), 38% for 2018-21e and 50% for 2022-24e, if our cash-flow scenario proves to be correct. Fiscal regulations changes and the developments in Black Sea might affect also the companys dividend policy.

Significant operating cash flow will cover CAPEX

OMV PETROM

June 30, 2015 15

BRD-GSG - Research

Florian LIBOCOR Chief Economist Head of Research +40 21 301 6869 florian.libocor@brd.ro

Carmen LIPAR, PhD Head of Financial Markets Research +40 21 301 4370 carmen.lipara@brd.ro

Laura SIMION, CFA Equity Analyst +40 21 301 4461 laura.simion@brd.ro

Ioan MINCU Economist +40 21 301 4472 george.mincu-radulescu@brd.ro

BRD-GSG rating system (June 2015) Premium List Selected from stocks expected to outperform the market by over 25%. Buy Expected to outperform the market by at least 10%. Hold Expected to perform in line with the market +/10%. Sell Expected to underperform the market by at least 10%. Assumptions 12 months time horizon and flat market over forecast period.

Disclaimer This publication is issued in Romania by or through BRD Groupe Socit Gnrale (BRD - GSG), which is regulated by the Romanian Securities and Exchange Commission and National Bank of Romania. The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell any securities. Investments in emerging markets can involve significant risks, such as uncertainty of dividends, of benefits or of profits, market, foreign exchange, legal, credit, tax and other risks and are not suitable for all investors. The information contained herein, including any expression of opinion, has been obtained from or is based upon sources believed to be reliable, but is not guaranteed as to accuracy or completeness although BRD - GSG believes it to be accurate, clear, fair and not misleading at the time of publication. BRD - GSG, and its affiliated companies, may from time to time to deal in, profit from the trading of, hold or act as market-makers or act as advisers, brokers or in relation to the securities, or derivatives thereof, of persons, firms or entities mentioned in this document or be represented on the board of such persons, firms or entities. Employees of BRD - GSG, and its affiliated companies, or individuals connected to them, may from time to time have a positioning or be to holding any of the investments or related investments mentioned in this document. BRD - GSG, and its affiliated companies, are under no obligation to disclose or take account of this document when advising or dealing with or for their customers and may have acted upon or made use of the information in this document prior to its publication. The views of BRD -GSG reflected in this document may change without notice. To the maximum extent possible at law, BRD - GSG does not accept any liability whatsoever arising from the use of the material or information contained herein. This research document is not intended for use by/or targeted to private customers. In case customers obtain a copy of this report, they should not base their investment decisions solely on this document, but must search for independent financial advice. Important notice The circumstances in which materials provided by BRD - GSG have been produced are in such manner (for example because of reporting or remuneration structures or the physical location of the author of the material) that it is not appropriate to characterise it the materials as independent investment research as referred to in European MIFID directive and that it should be treated as a marketing material even if it contains a research recommendation. However, it must be made clear that all publications issued by BRD GSG will be accurate, clear, fair, and not misleading. This publication is also not subject to any prohibition or dealing ahead of the dissemination of investment research. Analyst Certification Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subject securities or issuers and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report. Copyright BRD - Groupe Socit Gnrale 2015. All rights reserved. Nobody can reproduce, redistribute or pass on to any other person or publish in whole or in part for any purpose this publication.

OMV PETROM

June 30, 2015 16

Reported net income and EBIT

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

12/11 12/12 12/13 12/14 12/15e 12/16e 12/17e

RON,mReported net income EBIT

CAPEX per segment in 2015e

Upstream, RON 3,800m

Downstream, RON 470m

G&P, RON 25m

Net capital expenditure and CFO

0.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

8000.0

9000.0

12/11 12/12 12/13 12/14 12/15e 12/16e 12/17e

RON,mNet capital expenditure CFO

Major shareholders (%) as of 22 Jan15

OMV 51.01 Ministry of Economy 20.64 Property Fund 18.99 Private investors 9.36

Oil&Gas 29/06/2015 12m target

PETROM RON 0.3790 RON 0.3817

Valuation* 12/11 12/12 12/13 12/14 12/15e 12/16e 12/17e 12/18e Average no of shares (bn,diluted)

56.64 56.64 56.64 56.64 56.64 56.64 56.64 56.64

Share price (average) 0.36 0.38 0.44 0.45 0.38 0.38 0.38 0.38

EV 22091.8 23247.1 25184.5 23330.7 21635.4 20935.2 21504.5 20943.1

P/E (x) 5.38 5.49 5.21 10.22 10.58 10.31 9.90 8.69

Adjusted P/E (x) 4.80 5.03 5.16 5.70 10.58 10.31 9.90 8.69

EV/EBIT (x) 4.48 4.11 4.23 6.99 8.20 7.75 7.66 6.63

EV/EBITDA (x) 3.04 2.81 2.70 2.86 3.97 3.75 3.68 3.31

Price/book value (x) 0.96 0.93 0.94 0.79 0.76 0.72 0.69 0.66

Price/CFO (x) 3.14 3.02 3.12 3.14 4.27 4.11 4.14 3.68

Dividend yield (%) 7% 6% 6% 2% 3% 3% 3% 3%

Per share data (RON) EPS adj** 0.074 0.076 0.086 0.067 0.036 0.037 0.038 0.044

CFO 0.114 0.127 0.142 0.121 0.089 0.092 0.091 0.103

Book value 0.372 0.413 0.470 0.477 0.500 0.524 0.549 0.576

Gross Div 0.031 0.028 0.034 0.011 0.013 0.013 0.013 0.015

Income statement (IFRS, RON,m)

Sales 22613.7 26258.1 24185.0 21541.3 19425.1 19744.5 20148.8 20466.2

EBITDA 7263.8 8270.2 9312.7 8144.3 5444.3 5581.3 5838.2 6332.1

Depreciation, depletion and amort.

-2327.8 -2608.2 -3354.7 -4806.3 -2805.1 -2879.4 -3029.4 -3171.0

EBIT 4936.0 5662.0 5958.0 3338.0 2639.2 2702.0 2808.8 3161.0

Upstream EBIT 5236.0 5466.6 5529.0 3932.0 2403.2 2358.5 2489.7 2628.2

Downstream Gas EBIT 148.8 359.8 112.0 -818.0 -118.4 -231.2 -223.2 32.4

Downstream Oil EBIT -187.4 137.5 386.0 -79.0 448.4 671.1 641.1 601.3

EBIT Corporate&Other -79.0 -116.5 -97.0 -151.0 -94.1 -96.4 -98.7 -100.9

Financial result -327.2 -835.7 -259.3 -429.1 -194.8 -194.2 -196.0 -185.1

EBT 4608.6 4826.3 5698.6 2909.2 2444.4 2507.8 2612.8 2976.0

Corporate tax -850.0 -880.2 -874.6 -809.5 -415.6 -426.3 -444.2 -505.9

Net income 3758.6 3946.1 4824.0 2099.7 2028.9 2081.5 2168.7 2470.0

Cash flow statement (IFRS, RON,m)

Net income 3758.6 3946.1 4824.0 2099.7 2028.9 2081.5 2168.7 2470.0

Depreciation, depletion and amort.

2327.8 2608.2 3354.7 4806.3 2805.1 2879.4 3029.4 3171.0

Change in working capital -452.26 7.1 -77.0 -319.7 30.1 95.9 -178.9 43.0

Cash flow from operating activities

6441.6 7185.4 8048.0 6829.8 5025.7 5217.9 5181.8 5837.7

Net capital expenditure 5092.5 5055.3 4895.0 5658.1 4295.0 4295.0 4195.0 4235.0

Cash flow from investing activities

-5092.5 -5055.3 -4895.0 -5658.1 -4295.0 -4295.0 -4195.0 -4235.0

Cash flow from financing activities

-2192.6 -2219.5 -2412.0 -1333.6 -723.2 -855.3 -950.1 -1567.1

Net change in cash resulting from CF

-834.8 -87.2 741.6 -140.3 7.5 67.6 36.7 35.6

Balance sheet (IFRS, RON,m)

Total long-term assets 31021.5 32776.7 34559.9 37242.7 38732.7 40148.3 41313.9 42377.9

o/w tangible assets 26334.3 28512.6 30659.4 33394.1 34760.1 36106.8 37215.6 38227.7

Working capital 1542.0 1549.4 781.9 1312.2 1282.1 1186.2 1365.1 1322.1

Total debt 2637.3 2241.7 1442.8 1862.6 1442.8 810.2 1416.2 890.3

Shareholders' equity 21076.6 23405.3 26641.7 27005.3 28324.0 29677.0 31086.6 32618.1

Provisions 2171.5 1855.2 1253.6 1662.8 1662.8 1662.8 1662.8 1662.8

Net debt (+)/cash (-) 1883 1575 35 1863 167 -533 36 -525

Accounting ratios ROIC 17.0% 18.1% 18.0% 8.3% 7.3% 7.4% 7.2% 7.8%

ROE 17.8% 16.9% 18.1% 7.8% 7.2% 7.0% 7.0% 7.6%

Sales growth (%) 21.5% 16.1% -7.9% -10.9% -9.8% 1.6% 2.0% 1.6%

EBITDA margin 32.1% 31.5% 38.5% 37.8% 28.0% 28.3% 29.0% 30.9%

EBIT margin 21.8% 21.6% 24.6% 15.5% 13.6% 13.7% 13.9% 15.4%

Net income margin 16.6% 15.0% 19.9% 9.7% 10.4% 10.5% 10.8% 12.1%

Net debt/equity 8.9% 6.7% 0.1% 6.9% 0.6% -1.8% 0.1% -1.6%

Interest cover (x) 12.99 71.70 10.85 65.85 52.69 52.06 14.57 73.51

Payout ratio (%) 47% 40% 40% 30% 35% 35% 38% 38%

*Valuation ratios for past years are based on average price;** adj.for exceptional items (e.g.: impairment expenses)