NIS.EU

NIS GROUP’S PERFORMANCE PRESENTATIONfor 9M of 2019

2019, November 8th Anton CherepanovFinance, Economics, Planning and Accounting Function

NIS in Q3 2019

2

Exploration and production Block

• 32 development and 9 exploration wells drilled in Serbia (9M 2019)• 700 km2 covered with 3D seismic surveys on Ada exploration area, Serbia, and

170 km2 covered with 3D in Romania on block Ex-2. (9M 2019)• Drilling of three wells completed in Romania• In the third quarter, the preparations for start-up of the gas conditioning

complex on ’Teremija Sever’ and ’Jimbolia’ fields completed, the documentationfor starting commercial operation submitted to the government authorities.

Division Downstream

Refinery• Continuous employee training on the

DCU complex and OTS1

• Preparation of the units for operation inwinter conditions

• In July, maximum bitumen output(56,435 tons) for the last 10 years wasrecorded

• Refining of Romanian oil began1OTS - operating training system

• 260 mn EUR invested in the project

• The Detailed Design completed and allpermits obtained

• 99.9% of equipment and material delivered

• Construction and installation works relatedto construction of the complex completed91.41%.

Status of ‘Bottom of the Barrel’ Project

NIS in Q3 2019

3

Division Downstream

Sales• Following the completion of the works on its total reconstruction, Stari Banovci PS

was commissioned in the L format (GAZPROM brand);• The works on the total reconstruction of Barajevo PS (NIS brand), Krnješevci PS

(GAZPROM brand) and Ivanjica PS (NIS brand) have commenced;• The construction of Otopeni PS in Romania has begun (GAZPROM brand);• In July, NIS sold record volumes of bitumen – 55,912 tonnes, which is the best

figure the company so far;• A new payment service, “purchase with cash back”, was introduced on petrol

stations.EnergyCCPP Pančevo • The building permit for the 220 kV switchgear were obtained.

• Gas turbines and gas turbine generators have been installed.• The contract on monitoring the construction of the connection with the Electric Power Network of Serbia has

been signed.

• МЕТ Renewables and NIS commenced joint operations on their wind farm project in Serbia• Negotiations with EPC contractors are close to conclusion• As a precondition for the implementation of this project, it is necessary to renew the status of a temporary privileged electricity

supplier. The request was submitted in August, and we are waiting for a response of the Ministry of Mining and Energy.

Project windpark Plandište

Macroeconomic IndicatorsWeakening of the dinar compared the dollar, oil price drop

4

USD/RSD rate +6% Brent crude price, $/bbl

-10%

90

100

110

I II III IV V VI VII VIII IX

2018 Average 2018

2019 Average 2019

55

60

65

70

75

80

I II III IV V VI VII VIII IX

2018. Просек 2018.

2019. Просек 2019.Average 2019

Average 2018

HSE Indicators

5

Increasing transparency

LTIF RAR

Majorevents

Medium events

Minorevents

HIPO

2.101.72

9M 2018 9M 2019

9M 2019

9M 2018

0.28 0.27

9M 2018 9M 2019

9M 2019

9M 2018

9M 2018 9M 2019

43,476 47,070

835 1,051

54 62

8 0 18%4%

Key IndicatorsNIS Group

6

Q32019

Q32018

∆ Key indicators UoM 9M2019

9M2018

∆

61.94 75.27 -18% Brent Dtd $/bbl 64.7 72.1 -10%

78.7 86.3 -9% Sales revenues bn RSD 196.2 206.8 -5%

15.3 18.1 -16% EBITDA bn RSD 31.2 42.0 -26%

7.5 10.2 -27% Net income bn RSD 10.7 21.7 -51%

25.9 23.3 +11% OCF bn RSD 41.9 32.7 +28%

56.8 51.3 +10% Accrued liabilities based on public revenues bn RSD 136.6 140.3 -3%

324 338 -4% Oil and gas output thou. TOE 965 999 -3%

1,115 1,073 +4% Crude oil and semi-finished products output thou. tons 2,318 2,769 -16%

1,102 1,076 +2% Total petroleum products sales volumes thou. tons 2,621 2,741 -4%

10.6 10.1 +5% CAPEX bn RSD 29.0 27.3 +6%

574 565 +2%Total debt to banks(total debt to banks + letters of credits)

mn EUR 574 565 +2%

7

Motor Fuel Market Trends9M 2019/2018

• The consumption of motor fuels is rising inthe entire region, in line with the positivemacroeconomic indicators.

• The largest contributors to the increase inconsumption are transport, agriculture,construction and processing industries.

Serbia

The increase in the consumption of motor fuelsis primarily due to the increase in consumptionof diesel.The main growth factors are the constructionand road industries, increase of transit traffic,increase in exports of agricultural products andproducts of the processing industry.

Slovenia

3.1%

Croatia

5.8%

Bosnia and Herzegovina

0.6%Bulgaria

1.3%

Romania

2.1%

Hungary

4.0%

Serbia+5.0%

Market Share – SerbiaPetroleum Products Market

8

Petroleum productsmarket volumes, thou. tons +2%

• The total consumption of petroleum products shows apositive growth trend. This was a result of the followingfactors:• growth in consumption of diesel, bitumen and coke;• construction and road industries are the main drivers

of diesel consumption;• good agricultural season.

• Primary gasoline (turnaround of Petrohemija) and heavyfuel oil show a downward consumption trend.

NIS has preserved its market share, whichtraditionally quite substantial. The largest marketshare jumps were in the petrol, diesel and heavyfuel oil segments, respectively.

698(26%)

724(26%)

2,014(74%)

2,040(74%)

2,713 2,764

9M 2018 9M 2019

NIS

Others

Market Share – SerbiaMotor Fuel Retail Market

9

NIS’ sales are following the market trends and arerising in the diesel and petrol segments, whereasLPG sales are falling. Its modernised petrolstations, range of additive-enriched fuels andcarefully designed loyalty programmes ensurethat the high market share is preserved.

• Growth of retail market by 4%

• The main growth factors are an increase in purchasingpower, increase in the number of vehicles, increase oftransit traffic, and the fact that a number of transportand distribution companies have started supplying atpetrol stations.

Retail market, thou. tons+4%

725(57%)

752(57%)

545(43%)

574(43%)

1,2701,327

9M 2018 9M 2019

NIS

Others

10

Market Share – Region9M 2019/2018

Bosnia and Herzegovina

No. of PSs : 37% total market: 21.8%% retail market: 10.2%

Romania

No. of PSs: 18% total market: 0.9%% retail market: 1.3%

Bulgaria

No. of PSs: 35% total market: 4.9%% retail market: 4.4%

Operating IndicatorsExploration and Production

11

• The planned hydrocarbon output achieved (1.7% over the plan)

Oil and gas output,thou. TOE -3%

663 646

313 293

24 26

999 965

9M 2018 9M 2019

Foreignprojects

Domesticgas

Domesticoil

Operating IndicatorsRefining

12

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

-16%

659 618

1,9011,534

209

166

2,769

2,318

9M 2018 9M 2019

Semifinishedproducts

Import oil

Domestic oil

• Reduction of the volume of refining by -16% dueto the turnaround in Pančevo Oil Refinery

• As opposed to the third quarter last year, thisyear recorded a 4% increase in the volume ofrefining.

1,696

1,204

6M 2018 6M 2019

1,073 1,115

Q3 2018 Q3 2019

+4%

-29%

Operating Indicators Sales and Distribution

13

• Retail in Serbia – increase 5%

• Wholesale in Serbia – decrease -7%

• Export – decrease -20%

• Foreign assets – increase 17%

Sales volumes*, thou. tons -4%

543 572

266 311

1,501 1,392

431 345

2,7412,621

9M 2018 9M 2019

Export

Wholesale -Serbia

Foreign assets

Retail - Serbia

*Without internal sales

• Increase of the sales volume in Q3 2019by 2% compared to the same period lastyear

• In the first 9 months of 2019, the totalsales volume surpassed the volume ofrefining

Financial IndicatorsEBITDA

14

-26%EBITDA, bn RSD

42.0

31.2

9M 2018 9M 2019

• The fall of oil prices on the world market

• Capital overhaul in Pancevo Oil Refineryand turnaround costs

• The fall of oil production

Financial IndicatorsNet Income

15

Net income, bn RSD -51%

21.7

10.7

9M 2018 9M 2019

• Lower EBITDA

• Greater amortization (0.8 bn RSD)

Financial IndicatorsOCF

16

• Lower liabilities for the import of crude oil

• Lower liabilities towards the state

• Higher customs duties

• Higher derivatives duties

OCF, bn RSD+28.3%

32.7

41.9

9M 2018 9M 2019

Financial IndicatorsCAPEX

17

CAPEX, bn RSD +6%

27.3 29.0

9M 2018 9M 2019

CAPEX by segments

52%

32%

9%6%

0% 1%Exploration and productionBlock

Bottom of barrel Project

DWS Refining

DWS Sales and distribution

The rest of the Downstreamdivision

Corporate Centre

Operational Efficiency Improvement MeasuresEffect on EBITDA, bn RSD

18

The overall effect of the operational efficiency improvement measures on the EBITDA indicator in the first nine

months of 2019 amounted to 1.4 billion RSD.

1.4

1.40.5

0.3

0.2 0.3 0.01 0.11.0

2.4

Exploration andproduction

Services Refining Sales anddistribution

Technicalservices

Corporate centre NIS 2019 Perventeddamage

Total NIS 9M 2019

Measures Pervented damage

16225

101125231133

22

20

552459

345306330

492607628

549575573590574

714484

355316355

515618631

553577575592574

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Letter of credit

Debt to banks

19

Debt to BanksMaturity and Currency Structure of Credit Portfolio

Debt to banks, mn EUR

-0.4%

Bank indebtedness, mn EUR

Debt structure:USD 0.3% EUR 99.3% Other 0.4%

1932072236197

751401763

3

363

359252

323270

133417

467453

547572570584571

553459

345305330

492607629

549575573590574

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up to 1 year

over 1 year

Comparative analyses

20

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

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

34.2

26.1

15.9

13.1

12.0

20.3

166.9

72.3

43.6

25.3

16.6

64.9

9.38.3

7.66.66.5

5.5

7.3

11.4

8.6

6.9

6.1

Н/Д

8.2

83.4

80.6

77.6

77.1

75.5

78.8

Data obtained from 6M 2019 reports, except for NIS (9M 2019)*All data for 6M 2019

Conclusion

21

Deacreased refining volume due to capital overhaul

The fall of oil price comparing to the firstnine months of 2018

Growth of Operating cash flow

Improvement of HSE indicators

In the third quarter of 2019 we mark anincrease in refining volume (+4%) and anincrease in sales volume (+2%) comparedto the same period of the previous year

NIS.EU

THANK YOU FOR YOUR ATTENTION!Investor.Relations@nis.eu

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