NIS.EU

NIS GROUP’S PERFORMANCE PRESENTATIONfor first quarter of 2020

27th April, 2020Anton CherepanovFinance, Economics, Planning and Accounting Function

Impact of COVID-19 pandemicMacroeconomic Indicators

2

10

20

30

40

50

60

70

I II III

2019 Average 2019 2020 Average 2020

I II III

USD/RSD rate +2% Brent oil price, $/bbl -20%

100

102

104

106

108

110

I I III III2019 Average 2019 2020 Average 2020

I II III

COVID-19 pandemic: effects and limitations: State of emergency in the Republic of Serbia to limit the spreading of the Covid-19 virus Reduced fuel demand Average oil price will most likely remain under 40$ until the year end

Compared to the first quarter of the previous year, the price of Brent oil decreased by 20%.

The average USD/RSD exchange rate is almost at the same level as in the first quarter of last year.

3

NIS in Q1 2020

Exploration and production Block

NIS drilled

14 development wells and

1 exploration well in Serbia

Since March 31, NIS is a 100% owner of JadranNaftagas affiliated company.

Due to the global oil price reduction and the pandemics NIS is working on optimizing its capital and operating costs

The main goal in the first quarter of 2020 in the Exploration and Production Block was to fulfill the planned production ofhydrocarbons, to realize projects of geological exploration works and to increase the efficiency of geological and technicalactivities.

CAPEX1

4.7 bn RSD

EBITDA

5.3 bn RSD

1 financing

4

NIS in Q1 2020

Downstream division - Refining

Refining in the conditions of low oil prices and in line with the current health and safety situation, taking the necessary measures

CAPEX: 2.6 billion RSD

Planned repairs on units S-2400 and S-2450

Participation in the precommissioning of theDCU

The refinery completed the routine overhaul of the bitumen unit

CO boiler cleaning is in progress

The first quarter of 2020 in the Refining Block was marked by operations in an extremely volatile environment,as a result of the drastic fall of the world oil price and the emergence of the Corona virus.

5

NIS in Q1 2020

Downstream division – Sales and distribution

5 new products launched under the corporate trade mark

Two petrol stations under the NIS brand have been reopened in Serbia after full reconstruction:- Koceljeva 2 PS- Leskovac 6 PS

Due to the Covid-19 pandemics, the Lubricants Department successfully developed the formulation and beganproducing a new product, a disinfectant called NISOTEC Antisepsol, for the needs of the entire Company.

CAPEX

0.3 billion RSD

EBITDA

3,6 billion RSD

Otopeni petrol station opened in Romania

6

NIS in Q1 2020

Approximatelly EUR 298.5 million was invested in the project

The detailed design was completed and all licenses obtained

100% of equipment and material were delivered

The construction and installation works on the complex are at 98.62%

Basic project parameters

Investments, mn EUR 300

Start of production 2020

Coke furnaceCoke belt conveyer and

spherical tank

Implementation of the Bottom of the Barrel Project in Q1 2020:

Bottom-of-the-Barrel Project

Taking into account the restrictions caused by the outbreak ofthe COVID-19 pandemic (entry of foreign experts into thecountry - representatives of equipment suppliers, licenseesholders, delivery of spare materials, reduction of the number ofconstruction site workers), active measures are implemented toreduce delays in pre-commissioning and commissioningoperations of the Bottom-of-the-Barrel Project to a minimum.

7

NIS in Q1 2020

Realization of contract with EPC contractor around EUR 97mn., or 61% of the total projected amount

The engineering activities completed and building permits obtained for all construction stages of TE-TO Pančevo

Manufacturing of primary and auxiliary equipment completed. Complete equipment delivered to the site. Finishing of main equipment on foundations completed.

Basic project parameters

Expected total investments, mn. EUR up tp 180

Nominal electric power of the power plant, МWt up to 200

The overall progress of the project (as of March 2020) at the level of 85.4%.

Implementation of TE-TO Pančevo Project in Q1 2020:

Steam-turbine plant

Gas-turbine plant

The introduction of a state of emergency to prevent thespread of COVID-19 in Serbia has a significant impact on thedynamics of the implementation of the TE-TO Pančevo project(reduction of the number of local subcontractors andreduction of working hours, impossibility of the arrival ofcontrol representatives from China and Italy, limitation of thework of connecting the TE-TO with RNP…) and the deadlinefor the commissioning of the facility is expected.

TE-TO Pančevo Project

HSE Indicators

8

Increasing transparency

LTIF RAR

Q1 2019 Q1 2020

16,607 12,809

353 243

15 20

0 0Majorevents

Medium events

Minorevents

HIPO

1.42(7 LTI)

1.68(8 LTI)

Q1 2019 Q1 2020

Q1 2019

Q1 2020

18%

0.32(3 RAR)

0.12(1 RAR)

Q1 2019 Q1 2020

Q1 2019

Q1 2020

63%

Key IndicatorsNIS Group

9

Key indicators UoM Q1 2020 Q1 2019 ∆ (%)

Brent Dtd $/bbl 50.3 63.2 -20%

Sales revenues bn RSD 52.6 53.5 -2%

EBITDA bn RSD 5.2 6.3 -18%

Net income bn RSD -1.1 0.2 -8x

OCF bn RSD -1.6 11.3 -114%

Accrued liabilities based on public revenues bn RSD 39.9 40.0 -0.2%

Oil and gas output thou. TOE 319 321 -0.7%

Crude oil and semi-finished products output thou. tons 860 599 +44%

Total petroleum products sales volumes thou. tons 778 726 +7%

CAPEX bn RSD 7.7 8.3 -7%

Total debt to banks(total debt to banks + letters of credits)

mn EUR 619 575 +8%

10

Motor Fuel Market TrendsQ1 2020/2019

Slovenia

-1%

Croatia

-0.8%

Bosnia andHerzegovina

-3%Bulgaria

-1.5%

Romania

-1.1%

Hungary

0.9%

Serbia-0.9%

Serbia

• Motor fuel consumption trend was compliant with the regional developments; the decline of 0.9% was recorded in Serbia in Q1 this year.

• A more accurate estimate of consequences of the crisis will be available after first 6M 2020.

Consumption of motor fuels in the regionexperienced a changing trend in Q1. Untill the start ofMarch, the whole region saw a distinct growth trendthat resulted both from the low base in the previousyear and transport growth; in March, however, due tothe pandemic (Covid-19), the trend changed towardsthe dramatic decline in consumption that followedthe virtually simultaneous introduction of measuresacross the region, which influenced the decreasedconsumption of petroleum products.

Market Share – SerbiaPetroleum Products Market

11

Petroleum products market volumes, thou. tons1 -6% • Total consumption of petroleum products in Q1

experienced a changing trend. The growth of the firsttwo months was followed by a sharp decline in Marchcaused by the outbreak of the pandemic (Covid-19).

NIS market share is growing, which is primarily linked to thesignificantly increased share of bitumen (in the same periodlast year we had a turnaround of the refinery). At the sametime, imports of products that NIS does not sell (coke) werealso reduced, which had a positive impact.

245(29%)

188(24%)

597(71%) 603

(76%)

841791

Q1 2019 Q1 2020

Others NIS

1Including CPG

Market Share – SerbiaMotor Fuel Retail Market

12

NIS market share is growing, the growing share in all threesegments – diesel, gasoline and LPG – contributes to that.

• The same situation is observed in the retail segment.Following the changing trend and sharp decline in March,Q1 fell by -1%.

Retail market, thou. tons1

-1%

213(56%)

207(55%)

169(44%)

172(45%)

382 379

Q1 2019 Q1 2020

Others NIS

1including CNG

13

Market Share – RegionQ1 2020/2019

Bosnia and Herzegovina

No. of PSs : 37% total market: 19.5%% retail market: 9.0%

Romania

No. of PSs: 19% total market: 1.2%% retail market: 1.6%

Bulgaria

No. of PSs: 35% total market: 5.0%% retail market: 4.5%

Operating IndicatorsExploration and Production

14

• Planned volume of hydrocarbonproduction achieved (3% higher thanplanned)

Oil and gas output,thou. TOE -0.7%

214 210

99 96

7 12

321 319

Q1 2019 Q1 2020

Domestic oil Domestic gas Foreign projects

Operating IndicatorsRefining

15

Refining of oil and semi-finished products, thou. tons

+44%• Increase in refining volume by

+44% as a result of a capitaloverhaul carried out in the firsthalf of 2019.

221 130 213

485429

566

81

40

81786

599

860

Q1 2018 Q1 2019 Q1 2020

Domestic oil Import oil Semifinished products

Operating Indicators Sales and Distribution

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• Retail in Serbia – increase 2%

• Wholesale in Serbia – increase 1%

• Export – increase 63%

• Foreign assets – increase 1%

Sales volumes*, thou. tons +7%

*Without internal sales

155 168 171

79 85 86

429 407 413

102 66 108

765 726778

Q1 2018 Q1 2019 Q1 2020

Retail-Serbia Foreign assets

Wholesale - Serbia Export

Compared to the first quarter of the previous year, we marked a growth of 7% in the total sales volume:

Financial IndicatorsEBITDA

17

-18%EBITDA, bn RSD

• The fall of oil prices had the impact on theprice of petroleum products, which isdisproportionately lower than the price atwhich oil was purchased and inventoryreserves

• In the second half of March, sales volumedropped due to the Covid-19 lockdown

6.35.2

Q1 2019 Q1 2020

Financial IndicatorsNet Income

18

Net income, bn RSD

• Lower EBITDA

• Higher amortization costs

• Higher negative exchange differences

0.2

-1.1

Q1 2019 Q1 2020

Financial IndicatorsOCF

19

• Higher payments on the basis of liabilitiesfor the import of crude oil (total value ofpaid oil in Q1 2020 is higher 84% comparingto Q1 2019)

• Higher payments toward state liabilities

OCF, bn RSD -114%

11.3

-1.6

Q1 2019 Q1 2020

Financial IndicatorsCAPEX

20

CAPEX, bn RSD -7% CAPEX by segments

8.3 7.7

Q1 2019 Q1 2020

61%

26%

8%4%

0% 1% Exploration andproduction Block

Bottom-of-the-barrelProject

DWS Refining

DWS Sales andproduction

The rest of DownstreamDivision

Corporate centre

Operational Efficiency Improvement MeasuresEffect on EBITDA, bn RSD

21

0.3

0.30.1

0.1

0.010.06

0.5 0.5

Exploration andproduction

Refining Sales anddistribution

DWS Others NIS Q1 2020 Prevented damage Total NIS Q1 2020

Measures Prevented damage

• The overall effect of operational efficiency improvement measures in Q1 2020 on EBITDA is RSD 0.3 billion.

22

Debt to BanksMaturity and Currency Structure of Credit Portfolio

Debt to banks, mn EURBank indebtedness, mn EUR

Debt structure:USD 0.3% EUR 95.3% Other 4.46%

16225

101125231133

2

00

552459

345306330

492607628

549575590619

714484

355316

355515

617631

552577590

619

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Letter tocredits

Debt to thebanks

193

207

22

36

197

75

140

176

33

329

359

252

323

270

133

417

467

453

547

572

587

591

553

459

345

305

330

492

607

629

549

575

590

619

31.12.'09

31.12.'10

31.12.'11

31.12.'12

31.12.'13

31.12.'14

31.12.'15

31.12.'16

31.12.'17

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31.12.'19

31.03.'20

up to 1 year

over 1 year

23

Benchmarking

23

EBITDA margin (%) EBITDA/FTE (thou. USD)* Daily volume (t/day)

Share of light products (%) OPEX ($/boe)

31.5

25.5

13.5

12.8

9.8

18.6

337.3

153.5

93.7

69.3

41.3

139.09.9

8.6

6.9

6.7

6.0

5.8

7.3

10.9

8.3

6.6

6.4

N/D

8.0

Data obtained from 12M 2019 reports. except for NIS (3M 2020)*All data for 12M 2019

83.4

80.9

80.6

78.2

73.5

79.3

24

Plans and expectations for the rest of the year

• Oil and fuel price drop• State of emergency in Serbia• Reduced demand for petroleum products• Reduced sales (both retail and wholesale)

Impact of the COVID-19 pandemicsMain goal by the end of the year:

• Liquidity increase- CAPEX reduction of at least 30%- OPEX reduction of at least 10%

Steps taken

1. Ensure positive moneyincome

2. Ensure stability on the market

3. Maintaining social stability of employees

• Agility• Flexible response to the changing environment

Preparation of crisis scenarios, long-term and short-term plans

Conclusion

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Decrease in oil price and petroleum products compared to Q1 2019

Global Covid-19 pandemics

Deacrese in demand for petroleum products

Increase in refining volume

Increase in sales volume

Reducing costs in new circumstances and maintaining social stability of employees

NIS.EU

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