hellenic petroleum – a leading energy group in se europe · • balanced sales channel mix with...

Credit Update

June 2014

1 1

Contents

• Introduction – Group Overview

• Strategy update

• Industry & market developments

• Credit update

• Strategic business units (SBUs)

• Appendix

2 2

Group’s Profile

• Largest SEE independent downstream Group, with investments in Power & Gas

– €10b Turnover with 14 MT of product sales, with strong export orientation (50% exports)

– Leading Greek market position covering c. 60- 65% of local wholesale market fuels demand

– Regional footprint through subsidiaries; coastal refineries provide supply chain advantage

• Completed its strategic investment plan, with positive cash flow impact

– A €2bn investment plan with €150-200m of incremental cash flow opportunity at mid-cycle

margins; no material capex requirements

– Asset portfolio allows upside on recovery of refining margins and Greek market

• Successfully implemented a transformation competitiveness improvement plan

on Group structure and operational model

– Transformation initiatives added c.€270m annual benefits with additional opportunities of

€130m over the next 18-24 months

• Consistent delivery of strategic targets; improving balance sheet

– Achievement of strategic targets, despite Greek crisis & industry “black swans”

– Continuous support from local and international relationship banks throughout crisis

– Completion of capex cycle allows deleveraging from higher than target gearing

– Opportunities for value monetisation (DEPA/DESFA sale process)

Complex refining asset base and leading domestic market share; Group

positioned to benefit from Greek market recovery and refining industry upturn

3

• Complex refineries (Nelson index 9.6)

• Balanced sales channel mix with exports at

50% of total sales

• Leading market position with c.60-65% of

Greek wholesale domestic market and

c.30% of retail

• Regional footprint with international

subsidiaries

• 30% of capital employed in non-refining

margin driven returns from Marketing,

Petchems, Power and NatGas

Nelson/Solomon complexity benchmark margins

Group operational footprint

ROMANIA

TURKEY

BULGARIA

SERBIA

CYPRUS

FYROM

GREECE

ALBANIA

BOSNIA

MONTENEGRO

Refining

Marketing

Power & Gas

9.711.3

6.98.8

13.9

5.0

Aspropygros Elefsina Thessaloniki

NCI Solomon

5* -3* 4*

*$/bbl, average 2010-13

Shareholding & Governance Controlling shareholders’ agreement supported successful transition from state to private

sector Group, divestment of remaining 35% held by the Greek State as part of the privatisation

4

Shareholding structure

35%

9%

7%

Int’l institutionals 6%

Retail

43% POIH

Greek State

GR institutionals

Corporate Governance

Board of Directors:

• Consists of 13 members (3 executive and

10 non executive) appointed as per

Articles of Association

• Board Committees (Finance / Audit / HR)

Executive Committee:

• Key management executives with

responsibility for strategy and operations

Management structure:

• SBU structure ensures focus on key

business issues

• Regional portfolio controlled centrally

Assets overview Core business around downstream assets with activities across the energy value chain

Refining, Supply & Trading

Domestic Marketing

International Marketing

Petrochemicals

Power & Gas

DESCRIPTION METRICS

• Exploration assets in Egypt, Greece, Montenegro

• Recently upgraded refining asset base: – Aspropyrgos (FCC, 148kbpd)

– Elefsina (HDC, 100kbpd)

– Thessaloniki (HS, 93kbpd)

• Pipeline fed refinery/terminal in FYROM

• Capacity: 16MT

• NCI: 9.6

• Market share: 65%

• Tankage: 7m M3

• Leading position in all market channels (Retail,

Commercial, Aviation, Bunkering)

• c.1,800 petrol stations

• 30% market share

• Sales volumes: 3MT

• Strong positions in Cyprus, Montenegro, Serbia,

Bulgaria

• Advantage on supply chain/vertical integration

• c.280 petrol stations

• Sales volumes: 1MT

• Basel technology PP producer and seller on the

back of refineries integrated value chain

• > 50% exports in Iberia, Italy & Turkey

• Capacity (PP): 220 kt

• Second largest IPP in Greece (JV with

Edison/EdF)

• Capacity: 810 MW

(CCGT)

• 35% in Greece’s incumbent NatGas supply

company (under privatisation)

• Volumes (2013):

3.8bcm

Exploration & Production

5

Our Group in numbers – key financials (FY13)

6

€ million, IFRS 2009 2010 2011 2012 2013

Income Statement

Sales Volume (MT) - Refining 15,885 14,502 12,528 12,796 12,696

Net Sales 7,424 8,477 9,308 10,469 9,674

Segmental EBITDA

- Refining, Supply & Trading 269 338 259 345 57

- Marketing 92 114 66 53 68

- Petrochemicals 20 50 44 47 57

- Other -19 -28 -6 0 -5

Adjusted EBITDA * 362 474 363 444 178

Adjusted associates’ share of profit 18 30 67 69 57

Adjusted Net Income * 150 205 137 232 -117

Balance Sheet / Cash Flow

Capital Employed 3,927 4,191 4,217 4,350 3,905

Net Debt 1,419 1,659 1,687 1,855 1,689

Capital Expenditure Incl. Refinery upgrade program 614 709 675 521 112

Free Cash flow -561 17 165 25 404

(*) Calculated as Reported less the Inventory effects and other non-operating items

7

€ million

Adjusted EBITDA 57 57 25 44 57*

Capital Employed 2,517 129 527 400 692**

Free Cash Flow 267 36 53 64 n/a

FCF % of CE 11% 28% 10% 16% n/a

* Income from associates (reported below EBITDA)

** investment in associates

*** Segments include Intra-segment transactions

HELLENIC PETROLEUM

Adjusted EBITDA: €178 m

Capital Employed: €3,905 m

Free Cash flow: €420 m

INTERNATIONAL REFINING PETCHEMS RETAIL POWER &

GAS

Key segmental financials Non-refining segments make a significant contribution to Group profitability;

FCF at 12-15% of ACE over the last years (adj. for refinery upgrade).

8 8

Contents


• Strategy update


• Credit update


• Appendix

2007-12 Strategy review Delivery of strategic targets despite prolonged crisis; new refineries amongst most

competitive in the Med

9

1

2

5

Upgrade Refining Assets

Manage Portfolio for value

Fit-for-purpose

organisation

3

Enhance vertical integration

4 Improve competitiveness

• Completed Elefsina and Thessaloniki upgrades

successfully

• €150-200m additional cashflow opportunity (benchmark

margin driven)

• Doubled domestic market share - BP network

• Increased benefit of regional integration

• Refocus E&P

• Power generation portfolio JV

• Refining improvements (DIAS)

• Marketing competitiveness

• Procurement (BEST 80)

• Cost structure

• Reduced headcount by 21% by 2012

• Established Group culture

• Shared services

10

2013-2017 Strategy Update Refocuses on operational excellence; maximise cash flows to deleverage

1

2

5

Consolidate market position

leveraging on new asset base

Develop our people and continue to

build culture of excellence

3 Enhance competitiveness

improvement momentum

4 Leverage business portfolio

Realise full benefit of the new

investment 1

2 Deleverage Group

3 Diversify funding mix

4 Reduce funding costs

Improve profitability

BUSINESS TARGETS FINANCIAL TARGETS

* Assuming mid cycle margins

Recent results reflect new refinery start-up process and record low margins. Company

performance rebased post investments and competitiveness improvements; further

upside driven by Greek economy and margin recovery.

178

400-700

50-60

70-10020-30

40-60

2013 Elefsina

optimisation

Performance

Improvement

Greek market 2014 runrate Performance Margins and

FX*

Medium Term

Adjusted EBITDA projected evolution (€ mil)

400 (700)

(300)

EBITDA Capex Pre Tax Free Cash

Flow

Investment phase

400-700

(100)-(150) 250-550

EBITDA Capex Pre Tax Free Cash

Flow

Post-upgrade

Cash Flow profile pre and post-investment plan** (€ mil)

11 (*) $1/bbl sensitivity in margins results to €90m, assuming full utilisation of refineries and €/$ at 1.3

(**) assuming mid-cycle margins

2013 margin

($2.1/ bbl) 300-350

Medium term

performance driven by

refining margins.

-4

-2

0

2

4

6

8

12

Elefsina Refinery Upgrade Full residue conversion, with 75% middle distillates yield, positioning Elefsina as a top

net cash margin refinery in the Med basin

47%

24%

11%11%

17%25%

64%

Pre upgrade Current

Other

Jet

Diesel/Gas oil

Fuel oil

New refinery schematic Product slate

European Med refineries Net Cash margins*

*Wood Mackenzie 2018 Net cash margin projection, Med basin refineries

Elefsina

Solomon complexity index: 13.9

Refinery utilisation (%)

71

95

8376

1Q14 2H13 1H13 Q412

13

Operational improvement projects reduced overhead gearing FY14 target for additional benefits exceeding €80m, with a further €50m earmarked for

2015; 1Q14 on track with plan, at €18m on incremental contribution

2013

3.680

2008

5.138

-28%

Group Headcount (FTEs)

163

125

2013 2011

30%

Propylene production (MT’000)

16

12

2013 2011

4%

Middle distillates yield of

Aspropyrgos Hydrocracker %

16

9

2013 2009

7%

Procurement savings vs spent (%)

Evolution of transformation initiatives (€m)

2014 target: >€80m

400

290

22745

Medium

Term Target

YTD 1Q14

18

2013 2008-12

14 14

Contents


• Strategy update


• Credit update


• Appendix

Recent Industry developments Challenging refining environment in the region driven by regional crude supply issues

and weak growth

15

• 2013 the worse refining macro backdrop in the Med region for at least a decade

• Curtailed supply for crude due to developments in Iran (sanctions), Iraq, Libya (internal frictions),

Russia (crude directed to the East and domestic refineries)

• Weak demand in Europe, particularly in the South due to recession

• Competitive advantage of US refineries on energy cost and crude spreads, due to shale oil and gas,

led to reversal of product flows across the Atlantic

Med hydrocracking margins (2004- 2014) Med FCC margins (2004- 2014)

Shale oil SE sovereign crisis

7.0 6.9 6.8 6.5

3.7 4.4

2.9

4.7

2.4 2.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

12.5

10.8 10.9

15.1

2.8

4.9 5.9 5.4

3.7 4.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *

* year to 30 May

*

16 16

Regional market – Diesel shortage in the Med ELPE middle distillates yield suited to expected increasing shortage in the region

Greek market evolution Signs of stabilisation in domestic market demand, post significant contraction due to

recession; mild weather conditions reflected in heating gasoil market in 1Q14, while

transport fuels demand remained flat

17

Domestic Oil products demand 2008-2013 million tonnes / year

1,679

3,117

4,408

1,616

3,4223,283

9,239

10,125

11,41310,832

2011 2010 2009 2008 1H12 2H12 1H13 2H13

2009 vs 2013 -42%

-29% +4% y- o- y

-4%

1Q13 1Q14

Source: Ministry of Energy, Environment and Climate Change

18 18

Contents


• Strategy update


• Credit update


• Appendix

Pro forma Cap structure Weak refining environment and Elefsina optimisation process led to increased leverage

ratio vs historical trend

€ million Maturity 2013 pro-forma**

HP & HPF €605m Syndicated Facilities 2016 586

EIB €200m Facility A* 2022 189

EIB €200m Facility B – Guaranteed by Commercial Bank* 2022 189

HP €400m syndicated Facility 2015 225

Eurobond 2017 490

USD Eurobond ($400m) 2016 292**

Bond loan (€200m) 2015 200

Other bilateral lines n/a 771

Gross Debt 2,942

Cash and cash equivalents (1,052)**

Restricted Cash* (260)

Net Debt 1,690

Gearing ratio (Net Debt/Capital Employed under IFRS) 43%

Leverage ratio (Clean EBITDA + associates’ share of Net Income) 7.2 x

Pro forma Leverage ratio (excluding debt equal to investment in associates) 5.6 x

Pro forma Leverage on mid cycle historical EBITDA (2010-2012 avg) 2.3 x

(*) Contract review in progress; cash collateral in relation to EIB loan guarantee

(**) based on FY13 financials, adjusted for ELPE GA 4.625% May 2016 19

1.4

1.6

1.7

1.9

1.8

1.7

36%

41% 41%

43% 44%

43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0

0.5

1.0

1.5

2.0

2.5

FY09 FY10 FY11 FY12 1H13 FY13

Gearing Net Debt

NET DEBT DEBT/CAPITAL EMPLOYED

Gearing Growth capex of >€2bn during 2008-12 led to Net Debt peak in FY12; Deleveraging is a

priority with expected DESFA proceeds later in 2014, earmarked for debt reduction

(1) calculated as Net Debt / Capital Employed

Net debt and gearing(1) levels (%) - €bn

20

112

521

675

709

614

333

FY13 FY12 FY11 FY10 FY09 FY08

Capex evolution 2008-2013 (€m)

21

DEBT STRUCTURE AND FUNDING STRATEGY Aiming towards increasing markets participation in funding mix and reducing costs

Drawn Credit facilities by

source

2012

27%

73%

0

100

200

300

400

500

600

700

800

2022 2017 2016 2015 2014

New USD Bond*

• DCM provides capacity optionality, tenor

and competitive pricing

100%

Markets Banks

1Q14 Target

Term lines maturity overview* (€m)

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

ELPE 8% 2017 GGB 10YR ELPE 4.625% 2016

ELPE GA Bonds Mid YTM (%)

(*) Matched by equal cash balance increase

• ELPEGA € 8% 2017: < 5%

• ELPEGA $ 4,625% 2016: < 4%

22 22

Contents

• Introduction - Group overview

• Strategy update


• Credit update

• Strategic Business Units (SBUs)

• Appendix

Aviation &

Bunkering

C&I (Construction,

wholesale)

Retail

23

Greek petroleum market overview and route to market Leading domestic market position through vertical integration and good logistics assets;

well positioned to capture Greek recovery

3rd party

Imports

60-65% 25-30%

0-10%

Greek Refining capacity: 25MT

Domestic market: 11.5MT

ELPE Group

subsidiaries: 3MT

(30%)

MOH Group

subsidiaries: 2MT

(20%)

Independent

marketing

companies: 5MT

(40%)

ELPE exports: 6-8MT

3rd party exports:

5MT

16MT

ELPE Group

subsidiaries: 2MT

8%

22%

8%

Greek market product breakdown

Specialty markets

(PPC, public sector):

1.5MT (10%)

Gasoline

Diesel

Gasoil Jet

Bunkers

Other

23%

23%

23%

24

Greek Refining, Supply & Trading economics USD based value chain with trading premia adding to refining net backs; export sales

exceeding 50%.

Markets

(sales premia varying

across channels)

Refining

(Med benchmark returns

& operations performance)

Refined Products

(14.0m MT)

Imported Products

(1-1.5m MT)

Aviation & Bunkering

(Med competitive pricing)

Exports, Intra-Group

(Platts Med FOB based + premia)

Domestic market

5 MT

3 MT

Exports, 3rd parties

(Platts Med FOB based)

2 MT

5 MT

Aspropyrgos

NCI 9.7

145kbpd

FCC

Thessaloniki

NCI 6.9

95kbpd

Hydroskimming

Elefsina

NCI 11.3

100kbpd

HDC

16 MT

1-1.5 MT

$ / €

Total ELPE capacity

1,175 1,078 1,041 982 942

1,170 1,108

981 949

874

2009 2010 2011 2012 2013

EKO HF

25

Marketing Leading position in the Greek market with both EKO and BP enhanced following BP

brands; subsidiaries in neighboring markets increases downstream integration

Auto-fuels domestic market share

evolution (%)

Domestic Retail network evolution (# PS)

1,931

International Marketing: Regional footprint

30

15

2012 (post BP

acquisition)

2008 (EKO only)

International Marketing: Sales volumes evolution

(MT)

194 220 222 336 367

126 152 150117 115

256243 237

215 211

379 404

2012

1,072

2011

1,041

438

1,072

2013

433

2010

1,051

436

2009

1,014

SER JPK CY BU

1,816

2,345 2,186

2,022

26 26

Petrochemicals Operations centred on vertical integration for higher value product; trading geared to

exports markets

Polypropylene value chain

Propane

Propylene splitter

90%

Thessaloniki PP plant

(220 kt)

PP

Propylene imports

10%

Propylene

10%

90%

Domestic and international

market

BOPP film plant (26kt)

Position:

• Competitive advantage in polypropylene - vertical

integration exceeding 85% of total production

• Exports account for 50- 60% of total sales; strong

export markets in Turkey, Italy and Iberia

• Domestic market share in petchems exceeds 50% in

all products, produced or traded

Targets:

• Increase propylene production capturing propane

conversion value

• Exploit niche markets:

– Increase PP resin grade portfolio and BOPP film

types with tangible cash benefits

– Add new commodity plastics

• Leverage regional positioning and in-market

presence to increase trading

27 27

Power: second largest IPP in Greece; development of a renewable energy

portfolio

Thisvi 420MW CCGT power plant

Consolidated as Associate

• Elpedison BV, is a 50/50 JV between Hellenic

Petroleum and Edison, Italy’s 2nd largest electricity

producer and gas distributor (EdF Group)

– Owns 75% of 810MW of installed CCGT

capacity: a 390MW plant in Thessaloniki and a

420MW in Thisvi

– Increasing power trading & marketing, within

predefined credit metrics

• Energy market in Greece under restructuring;

current model targets system stability during a

transitional phase

• Renewables portfolio target > 100MW (wind, PV,

biomass) subject to fiscal environment and market

developments

28 28

Gas: 35% participation in DEPA, Greece’s incumbent gas company (in sale

process)

DEPA

– Long-term contracts on pipe gas (Russian & Azeri) and

capacity rights on two in-bound interconnecting pipelines

– Long-term contracts with power generators, eligible

industrial customers and existing EPAs

– Owns 51% of the local supply companies (EPAs), with

rights until 2036

DESFA (RAB)

– Greece’s gas grid and LNG import terminal owner and

operator

– International pipelines: Participation in Greece-Bulgaria

Interconnector

• SPA for sale of 66% of DESFA to SOCAR for €400m signed

on 21 Dec 2013; regulatory approvals in process for

completion of transaction

DEPA snapshot financials (€m)

2008 2009 2010 2011 2012* 2013

EBITDA 240 166 211 288 287 209

Net Income 120 61 91 191 197 170

* Adjusted for settlement with PPC

Natural gas transmission network

DEPA Volumes 2007-13 (bcm)

Consolidated as Associate

3.8 4.0 3.6

3.3

4.3 4.2 3.8

2007 2008 2009 2010 2011 2012 2013

29

Contents

• Introduction - Group overview

• Strategy update


• Credit update


• Appendix

30 30

Key Milestones Transforming stand-alone government controlled Greek companies to a leading private

sector regional energy player

PETROLA ( Elefsina

Refinery)

DEP &

DEPEKY (Greek E&P)

ELDA ( Aspropyrgos

Refinery)

ESSO -

PAPPAS ( Thessaloniki

Refinery)

PETROLA

(Elefsina

Refinery)

DEP &

DEPEKY (Greek E&P)

ELDA ( Aspropyrgos

Refinery)

ESSO -

PAPPAS ( Thessaloniki

Refinery)

1998 1960 –

1998 2003 2007 2008 2009 2014

Elpedison: 50/50 JV

with Italy’s Edison,

in Power

Libyan upstream

concessions sold to

GDF Suez for $170m

2010

Thessaloniki Refinery

upgrade completed

Sale of 70% stake in

W. Obayed upstream

concession in Egypt

Acquisition of BP’s

Ground Fuels business

in Greece

Merger with

Petrola

Hellas

Elpedison’s 2nd CCGT

Plant (420MW) in

commercial operation

Shareholding events

Listing of

new Group in

ASE/LSE

Greek Government

announces its

intention to divest

its shareholding in

ELPE

2011

Agreement to

DESFA sale for

€212m

Elefsina

upgraded refinery

start up

POIH becomes

strategic investor

with 25% stake

Float 21%

Greek State

36%

POIH 43%

2012 2013

Issue of €500m

Eurobond

Acceleration of

transformation

programs targeting

c.80m of benefits

31

Refineries complexity upgrade impact on the Group’s crude and product slate

26%

12%

32%

45%

9% 10%

23% 25%

10% 8%

Pre upgrade Current

Other

Gasoline

Jet

Diesel/Gas oil

Fuel oil

15% 11%

10%

0%

75%

89%

Pre Upgrade Current

High sulphur

Medium sulphur

Low sulphur

47%

24%

11%

12%

17%24%

64%

Pre upgrade Current

Other

Jet

Diesel/Gas oil

Fuel oil

Crude slate — Group-wide Product slate — Group-wide

Crude slate — Elefsina Product slate — Elefsina

41%

59%

100%

Pre upgrade Current

High sulphur

Medium sulphur

32

Group Key financials: 2004 - 2013 Strong track record of consistent delivery and balance sheet resilience

(*) Calculated as Reported less the Inventory effects and other one-off non-operating items and special income taxes

€ million, IFRS (Published) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Income Statement Figures

Sales Volume (MT)- Refining 15,807 16,525 16,952 17,130 16,997 15,885 14,557 12,528 12,796 12,696

Sales Volume (MT)- Marketing 4,793 4,727 4,790 5,236 4,910 4,787 5,735 5,126 4,434 4,043

Net Sales 4,907 6,653 8,122 8,538 10,131 6,757 8,477 9,308 10,469 9,674

EBITDA 372 671 502 617 249 390 501 335 298 29

Adjusted EBITDA* 400 466 526 458 513 362 474 363 444 178

Net Income 128 334 260 351 24 175 180 114 86 -269

Adjusted Net Income* 149 191 277 232 216 150 205 137 232 -117

Balance Sheet / cash Flow Items

Capital Employed 2,335 2,956 3,442 3,557 3,153 3,927 4,191 4,217 4,350 3,905

Net Debt 386 699 1,044 977 679 1,419 1,629 1,687 1,855 1,689

Capital Expenditure 295 185 145 195 338 614 709 675 521 112

Dividend (€/share) 0.26 0.43 0.43 0.50 0.45 0.45 0.45 0.45 0.15 n/a

Key drivers

Brent crude ($/bbl) 38.0 55.2 68.1 72.9 98.3 62.6 80.3 111.0 111.7 108.7

FCC cracking Med margins ($/bbl) 7.2 7.3 7.3 7.1 6.8 3.7 4.4 2.9 4.7 2.4

€/$ 1.24 1.24 1.26 1.37 1.47 1.39 1.33 1.39 1.29 1.33

FY € million, IFRS 1Q

2013 2013 2014 Δ%

Income Statement

12,696 Sales Volume (MT) - Refining 2,872 2,790 -3%

4,043 Sales Volume (MT) - Marketing 862 807 -6%

9,674 Net Sales 2,241 2,077 -7%

Segmental EBITDA

57 - Refining, Supply & Trading 21 24 16%

68 - Marketing 4 11 -

57 - Petrochemicals 14 17 19%

-5 - Other -1 -1 46%

178 Adjusted EBITDA * 38 51 35%

11 Adjusted EBIT * (including Associates) 10 17 78%

-209 Finance costs - net -47 -53 -12%

-117 Adjusted Net Income * -21 -19 9%

29 IFRS Reported EBITDA -12 25 -

-269 IFRS Reported Net Income -78 -38 51%

Balance Sheet / Cash Flow

3,905 Capital Employed 4,623 4,505 -3%

1,689 Net Debt 2,188 2,333 7%

1Q 2014 GROUP KEY FINANCIALS

(*) Calculated as Reported less the Inventory effects and other non-operating items 33

25

-12

Reported EBITDA (€m)

51

38

1Q13

+35%

1Q14

Adj. EBITDA (€m)

+7%

1Q14

2.333

1Q13

2.188

Net Debt (€m)

1Q14 HIGHLIGHTS Improved results across all our businesses, as Elefsina contribution and enhanced operational

performance offset weak margins and USD

Industry and Market

• Med benchmark refining margins significantly lower y-o-y (especially for FCC), with further

negative impact due to weaker $; small improvement vs 4Q13 partly due to Brent-Urals spread

widening to $0.5-1/bbl area

• Uncertainty in Med crude market remains with due to Libya and Iraq exports

• Positive signs for domestic fuels demand as auto-fuel remain stable for a 3rd consecutive quarter;

1Q14 GDP estimate at -1.1%, lowest decline in 4 years

Financials

• 1Q14 Adjusted EBITDA at €51m (+35%), reflecting improved operational performance in all

business units, despite weak refining environment and Elefsina 4-week shut-down

• Competitiveness projects deliver additional €18m contribution, in line with plan; opex 13% lower y-

o-y

• Associates contribution at €15m affected by lower gas demand due to mild weather conditions

• Net Debt at €2.3bn, driven by operating conditions and seasonality

Business developments

• DESFA transaction regulatory approval in process; closing expected in 2014

• New CLA with ELPE refining union agreed for 3 years; annual benefits of c.€10m

• Lease agreement for West Patraikos concession signed on 14 May 2014; field studies to

commence in 2H14

34

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

20

40

60

80

100

120

140

160$/bbl

31/03/14

$107.8

31/12/1

3

$110.8

INDUSTRY ENVIRONMENT Challenging supply environment remains as Libya and Iraq flows remain uncertain

• Uncertainty in crude markets

continued, with supply availability and

Ukrainian crisis affecting Brent price

ICE Brent ($/bbl)

Brent – Urals spread ($/bbl) • Improved sweet-sour spreads in

1Q14 q-o-q

• Urals increased to c.55% of ELPE

crude slate in 1Q14

2013 2014

FY 108.7 107.9

1Q 112.6 107.9

2013 2014

FY 0.34 0.79

1Q 1.20 0.79

35

-36.0

-26.0

-16.0

-6.0

2013 2014

10.0

15.0

20.0

2013 2014

-1.0

4.0

9.0

14.0

2013 2014

INDUSTRY ENVIRONMENT Weakness in product cracks affects FCC margins; Elefsina benchmark margin more resilient

36

MOGAS cracks ($/bbl)

Med FCC benchmark margins ($/bbl)

Med Hydrocracking benchmark margins ($/bbl)

HSFO cracks ($/bbl)

ULSD cracks ($/bbl)

1.7

2.4

1.01.0

3.5

4.1

4.7

2013 4Q13

-59%

1Q14 3Q13 2Q13 1Q13 2012

4.13.7

4.7

2.92.4

4.7

5.4 -13%

1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012

(*) Does not include PPC and armed forces

DOMESTIC MARKET ENVIRONMENT Mild weather conditions account for lower heating gasoil demand; transport fuels flat with new

car registrations +19% y-o-y

457494

426361

150

168

-4%

1Q14

1.588

565

1Q13

1.646

612

Domestic Market 1Q

ΜΤ ’000*

-3%

37

-15%

8%

-8%

Aviation and Bunkering 1Q

ΜΤ ’000*

HGO

ADO

MOGAS

-2%

-3%

1%

86 80

480 474

-2%

Aviation

Bunkers Gasoil

Bunkers FO

1Q14

625

71

1Q13

636

70

CAUSAL TRACK & SEGMENTAL RESULTS OVERVIEW 1Q 2014 Improved operational performance offset weaker margins and USD with Adjusted EBITDA

+35%

Adjusted EBITDA causal track 1Q13 – 1Q14 (€m)

38

21 16

53

24

4

19

11 14

18

20

17

-1

2

-1

1Q13 Margins & FX Elefsina Refinery(Jan- Feb)

OperationalImprovements

(Refining, Marketing,Petchems)

Others 1Q14

51

38

FX 5

Refining,

S&T

MK

Chems

Other

(incl. E&P)

Refining,

S&T

MK

Chems

Other

(incl. E&P)

1Q 2014 FINANCIAL RESULTS GROUP PROFIT & LOSS ACCOUNT

(*) Includes derecognition of Elefsina project hedges (non-recurring)

(**) Includes 35% share of operating profit of DEPA Group 39

FY IFRS FINANCIAL STATEMENTS 1Q

2013 € MILLION 2013 2014 Δ %

9,674 Sales 2,241 2,076 (7%)

(9,369) Cost of sales (2,210) (1,997) 10%

305 Gross profit 32 79 -

(448) Selling, distribution and administrative expenses (108) (104) 4%

(3) Exploration expenses (1) (0) 38%

(50) Other operating (expenses) / income - net* 5 2 (45%)

(195) Operating profit (loss) (72) (23) 69%

(209) Finance costs - net (47) (53) (12%)

9 Currency exchange gains /(losses) (1) 1 -

57 Share of operating profit of associates** 32 14 (56%)

(338) Profit before income tax (89) (60) 33%

66 Income tax expense / (credit) 6 19 -

(272) Profit for the period (83) (41) 50%

3 Minority Interest 5 3 (44%)

(269) Net Income (Loss) (78) (38) 51%

(0.88) Basic and diluted EPS (in €) (0.25) (0.12) 51%

29 Reported EBITDA (12) 25 -

40

1Q 2014 FINANCIAL RESULTS GROUP BALANCE SHEET

(*) 35% share of DEPA Group book value (consolidated as an associate)

IFRS FINANCIAL STATEMENTS FY 1Q

€ MILLION 2013 2014

Non-current assets

Tangible and Intangible assets 3,607 3,582

Investments in affiliated companies* 692 708

Other non-current assets 172 187

4,470 4,477

Current assets

Inventories 1,005 875

Trade and other receivables 737 869

Derivative financial instruments 5 2

Cash and cash equivalents 960 344

2,707 2,090

Total assets 7,177 6,567

Shareholders equity 2,099 2,059

Minority interest 116 113

Total equity 2,214 2,172

Non- current liabilities

Borrowings 1,312 1,260

Other non-current liabilities 164 161

1,475 1,421

Current liabilities

Trade and other payables 2,125 1,532

Borrowings 1,338 1,417

Other current liabilities 24 26

3,488 2,975

Total liabilities 4,963 4,396

Total equity and liabilities 7,177 6,567

1Q 2014 FINANCIAL RESULTS GROUP CASH FLOW

41

FY IFRS FINANCIAL STATEMENTS 1Q 1Q

2013 € MILLION 2013 2014

Cash flows from operating activities

502 Cash generated from operations (276) (586)

(9) Income and other taxes paid (1) (2)

493 Net cash (used in) / generated from operating activities (277) (588)

Cash flows from investing activities

(105) Purchase of property, plant and equipment & intangible assets (10) (25)

(7) Acquisition of subsidiary - -

4 Sale of property, plant and equipment & intangible assets 1 -

8 Interest received 2 2

(3) Investments in associates - -

13 Dividends received - -

(90) Net cash used in investing activities (7) (23)

Cash flows from financing activities

(184) Interest paid (45) (33)

(46) Dividends paid (2) -

1,276 Proceeds from borrowings 776 81

(1,384) Repayment of borrowings (933) (53)

(338) Net cash generated from / (used in ) financing activities (204) (5)

65 Net increase/(decrease) in cash & cash equivalents (488) (616)

901 Cash & cash equivalents at the beginning of the period 901 960

(6) Exchange gains/(losses) on cash & cash equivalents (2) -

65 Net increase/(decrease) in cash & cash equivalents (488) (616)

960 Cash & cash equivalents at end of the period 411 344

(*) Calculated as Reported less the Inventory effects and other non-operating items

1Q 2014 FINANCIAL RESULTS SEGMENTAL ANALYSIS

42

FY 1Q

2013 € million, IFRS 2013 2014 Δ%

Reported EBITDA

-80 Refining, Supply & Trading -34 -1 98%

63 Marketing 9 10 10%

53 Petrochemicals 14 17 19%

36 Core Business -11 26 -

-8 Other (incl. E&P) -1 -1 3%

29 Total -12 25 -

102 Associates (Power & Gas) share attributable to Group 31 27 -15%

Adjusted EBITDA (*)

57 Refining, Supply & Trading 21 24 16%

68 Marketing 4 11 -


183 Core Business 39 52 32%

-5 Other (incl. E&P) -1 -1 3%

178 Total 38 51 35%


Adjusted EBIT (*)

-97 Refining, Supply & Trading -22 -7 68%

13 Marketing -9 -2 79%


-39 Core Business -21 5 -

-7 Other (incl. E&P) -1 -1 -10%

-46 Total -22 3 -


1Q 2014 FINANCIAL RESULTS SEGMENTAL ANALYSIS – II

43

FY 1Q

2013 € million, IFRS 2013 2014 Δ%

Volumes (M/T'000)

12,696 Refining, Supply & Trading 2,872 2,790 -3%

4,043 Marketing 862 807 -6%

295 Petrochemicals 68 60 -12%

17,035 Total - Core Business 3,802 3,657 -4%

Sales


3,345 Marketing 742 658 -11%


12,750 Core Business 2,918 2,667 -9%

-3,076 Intersegment & other -677 -591 13%

9,674 Total 2,241 2,077 -7%

Capital Employed


775 Marketing 900 886 -2%

129 Petrochemicals 139 138 -1%

3,152 Core Business 3,908 3,731 -5%

692 Associates (Power & Gas) 677 708 5%

62 Other (incl. E&P) 37 63 69%

3,905 Total 4,623 4,502 -3%

44

Glossary of Key Terms

Adjusted EBITDA Reported EBITDA adjusted by inventory effect (impact of the fluctuation of crude prices on BS inventories

and on the value of products sold during the related period) and other one-off non recurring items

CCGT Combined Cycle Gas Turbine

FCC Fluid Catalytic Cracking

HDC Hydrocracking

HS Hydroskimming

HSFO High Sulfur Fuel Oil

IPP Independent Power Producer

Leverage ratio Net Debt / Adjusted EBITDA (including associates share of net income)

LNG Liquefied Natural Gas

NatGas Natural Gas

Nelson Complexity Index (NCI) An index assessing the refinery conversion capacity by relating each processing unit capacity against the

crude distillation capacity and applying weighting factor.

Pro forma leverage ratio Net Debt (excluding debt equal to investment in associates ) / Adjusted EBITDA

Pro forma leverage on mid cycle

historical EBITDA (2010-2012 avg)

Net Debt (excluding investment in associates ) / Adjusted EBITDA(2010-2012 avg)

POIH Paneuropean Oil and Industrial Holdings (POIH)

PP Polypropylene

Solomon Comlexity Index Compares the relative refining configuration apart from throughput capacity. It is the total of EDC

(Equivalent Distillation Capacity) divided by the sum of the crude unit stream-day capacities.

ULSD Ultra-low-sulphur diesel (ULSD)

45

Disclaimer

Forward looking statements

Hellenic Petroleum do not in general publish forecasts regarding their future financial

results. The financial forecasts contained in this document are based on a series of

assumptions, which are subject to the occurrence of events that can neither be

reasonably foreseen by Hellenic Petroleum, nor are within Hellenic Petroleum's control.

The said forecasts represent management's estimates, and should be treated as mere

estimates. There is no certainty that the actual financial results of Hellenic Petroleum

will be in line with the forecasted ones.

In particular, the actual results may differ (even materially) from the forecasted ones

due to, among other reasons, changes in the financial conditions within Greece,

fluctuations in the prices of crude oil and oil products in general, as well as fluctuations

in foreign currencies rates, international petrochemicals prices, changes in supply and

demand and changes of weather conditions. Consequently, it should be stressed that

Hellenic Petroleum do not, and could not reasonably be expected to, provide any

representation or guarantee, with respect to the creditworthiness of the forecasts.

This presentation also contains certain financial information and key performance

indicators which are primarily focused at providing a “business” perspective and as a

consequence may not be presented in accordance with International Financial

Reporting Standards (IFRS).

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