GROUP OVERVIEW
2007RESULTS
Zürs, April 2008
• Core regions
• Onshore Croatia
• Offshore Croatia
• Middle East (Syria)
• North and West Africa• Sale/Import of natural gas
• Integrated Oil Serv ices
• Tw o fuel refineries
• Rijeka (4.5MMt)
• Sisak (4.0MMt)
• Marketer of 4.90 MMt of fuel products in Croatia and South East Europe (2007)
• Lubricants business
• LPG business
• Operator of 413 ow n petrol stations in Croatia, 20 ow ned by subsidiaries,43 in Bosnia and Herzegovina, 6 in Slov enia
• In 2007 MOL/INA consortium closed the acquisition of the ow nership over Energopetrol d.d.(Bosnia and Herzegovina) - 67 % of share capital
Maintenance Ser vices
Safety and Security Ser vices
Exploration and ProductionExploration and Production Refining and MarketingRefining and Marketing RetailRetail Corporate and OtherCorporate and Other
Focused E&P Portfolio w ith Development Upside
Focused E&P Portfolio w ith Development Upside
Refineries underModernisation;
an Extensive Logistics Network
Refineries underModernisation;
an Extensive Logistics Network
Premier Retail NetworkPremier Retail NetworkOperating on SAP systemimplemented wall-to-wall
Jan 2007
Operating on SAP systemimplemented wall-to-wall
Jan 2007
• Corporate –supportserv ices
• Other – otheractiv ities
SloveniaUnited Kingdom
Germany Hungary BiH Belarus
Angola
Egypt
Macedonia
Albania
Syria
Iran
Turkey
UAE
Indonesia
AzerbaijanCuba
Serbia
China
Namibia
Russia
Yemen
Italy
Myanmar
LibyaTunisiaAlgeriaGabon
Jordan
INA WORLDWIDEMontenegro
ZAGREB CROATIA
INA PRIVATISATION PROCESS
Privatisation Phase I Phase II (IPO)
Up to 2003 2003 2005 2006 2007
Phase III
* Lock-up period 6-12 months from mid November 2007
As at 31 Dec 2007
Republicof Croatia
100%MOL25%
Republicof Croatia
75%
MOL25%
Republicof Croatia
68%
VeteransFund7%
MOL25%
Republicof Croatia
51%Free Float
15%
VeteransFund7%
GreenShoe2%
Republicof Croatia44,85%
Free Float16,87%
Employees*6,28%
VeteransFund
7,00%
MOL25,00%
Price (HRK/share)Turnover (HRK)
INA, d.d. share trading on Zagreb Stock Exchange(Jan 2007 - April 2008)
2,000
2,500
3,000
3,500
-
10,000,000
20,000,000
30,000,000
40,000,000
Share price (HRK)
Turnover (HRK)
ATTRACTIVE SOUTH-EAST EUROPE MARKETS
• INA’s Core Region comprises Croatia, Slovenia, Bosnia-Herzegovina, Serbia, Montenegro, Macedonia and Albania
• Area of sustained above-average economic growth in the period 2002 -2006
• EU accession key driver of growth
• Increasing energy and oil products demand as a result of continued GDP growth
MKAL
TR
GR
SLO RO
BG
I
SK
A
HR
CG
SCG
D UA
MD
UA
Other South East European C ountries (“South East Europe”)
INA’s Strategic Focus Area (“Core Region”)
Macedonia
Albania
Turkey
Greece
Slovenia Romania
Bulgaria
Ital y
Slovakia
Austria
Hungary
Croatia
Bosni a-Herzegovi na
Monte-negro
Serbia
Germany Ukraine
Moldova
Ukraine
INA’s Strategic Focus Area
0
100
200
300
400
500
600
200 7 200 8 200 9 201 0 20 11
Upstream Ref ining&Wholesale Retail Other
CAPEX by 2011
200250
300
350
400450
500550
600
2007 2008 2009 2010 2011
CAPEX
CAPEX by SEGMENT
USD mill
USD mill
• Exploration and Production– Completion of current projects
– Offshore Croatia
– Onshore Syria and Croatia (EOR)
– Continue with intensive exploration activities
• Refineries and Marketing– Complete the modernisation of Rijeka and
Sisak refineries
• Retail– Modernisation of existing petrol stations
and construction of new
– Acquisitions in Croatia and neighbouring countries
Exploration and ProductionExploration and Production
• Increased production and operating profit
• Reduced loss on regulated gas market
Refining and MarketingRefining and Marketing
RetailRetail
2007 INA GROUP HIGHLIGHTS
Corporate and Other
• Increased production of EURO IV fuels
• Total throughput and production increased by 9%
• Network development in line with the retail strategy
• Average throughput per site in level with 2006
• Efficiency programmes ongoing
• SAP fully integrated
INA GROUP - highlightsINA GROUP - highlights
• Sales revenues reached HRK 25.8 billion
• Operating profit increased 4.7% to HRK 1.02 billion
• EBITDA reached HRK 2.8 billion (13.3% increase)
9
Brent FOB Med (USD/bbl) Economy growth rates ( % )
Premium unleaded petrol spread (USD/t )
BUSINESS ENVIRONMENT
25
50
75
100
2007 2006
4.9
2.5
5.8
0
4
8
2003 2004 2005 2006 2007e
World Europe Middle and East Europe
0
50
100
150
2005 2006 2007
USD
USD
10
DOMESTIC BUSINESS ENVIRONMENT
5.3
4.3 4.34.8
5.9
0
3
6
2003 2004 2005 2006 2007
% 1.82.1
3.3 3.22.9
0
2
4
2003 2004 2005 2006 2007
%
GDP growth (%) CPI Inflation (%)
Exchange rate movement
2
6
10
2002 2003 2004 2005 2006 2007
HRK/Eur HRK/USD
15,34517,988
21,07023,434
25,848
2003 2004 2005 2006 2007
Sales revenuesHRK millions
Net profitHRK millions
EBITDAHRK millions
594
1,130
885 883 869
2003 2004 2005 2006 2007
1,756
2,985 2,966
2,4742,803
2003 2004 2005 2006 2007
KEY FINANCIAL INDICATORS
Exploration and
Production
Exploration and
Production
El Alameincommercial discovery
• Sidi Rahman 1 production start-up
Refining and
Marketing
Refining and
Marketing
RetailRetail
KEY DEVELOPMENTS
INA – MOL partnership
• Hydrocarbon reserves found in PodravskaSlatina region
• Novi GradacJoint venture
CROSCO acquires Rotary
• Internationalexpansion in drilling and other wellservices
Hayan block -Syria
• Jazal development phase
• Mustadira Notice of commercial discovery
Sisak refinery
Isomerisationunit contract
awarded
Sisak refinery
I. phase of theClaus unit completed
Rijeka refinery
Hydrogen generation unit
contract awarded
Rijeka refinery
HDS unit contractawarded
Shop sales
increased by 5.9%5 new premium sites built in line with
the new retail strategy
13
Gearing (%) Total debt (HRK mill)
23.5520.55
13.29
0
10
20
30
2005 2006 2007
%
4,923
3,938
2,182
0
2,500
5,000
2005 2006 2007
GEARING
14
117
850
140212
985
1,747
382
1,559
Corporate&other Retail Refining&Marketing Exploration&Production
2006 2007
CAPITAL EXPENDITURE
HRK mill
EXPLORATION AND PRODUCTION
16
EXPLORATION AND PRODUCTION
R e s u l t s (HRK millions)
Sales revenues 6,794 8,133 19.7Operating profit 1,623 2,045 26.0CAPEX 1,747 1,559 (10.8)
2006 2007 % change
Operating profit up by 26%
Higher hydrocarbon production
New discoveries of oil and gas
EXPLORATION AND PRODUCTION
49.2 47.7
15.7 24.1 40.6
42.5
0
30
60
90
120
2005 2006 2007On shore Of shore Syria
Natural gas production (Bcf)
800
1,700
2005 2006 2007Av erage Sales price Import price
Natural gas prices (HRK/Mcm/33.34MJ)
-1200
-900
-600
-300
02005 2006 2007
Eligible Tariff Total
Import price differential (in HRK/Mcm/33.34 MJ)Gas production in 2007: 86.1 Bcf.
(up by 19.9%)
Lower import price differential
Regulated prices
64.871.8
86.1
EXPLORATION AND PRODUCTION
261,1 270,4
140,7 120,1 104,7
245,1
0
200
400
2005 2006 2007Proved Probable
Hydrocarbon reserves (MMboe)
Proved reserves increased by 9.3MMboe
Proved reserves replacement ratio: 141.0 %
REFINING AND MARKETING
20
• With the Refinery Modernisation Programme CAPEX rose by 16 %
• Sales of EURO IV from own production increased by 19%
• Results strongly influenced by the price cap
REFINING & MARKETING
R e s u l t s (HRK millions)
Sales revenues 18,136 18,746 3.5Operating profit 170 59 (65.3)CAPEX 850 985 15.9
2006 2007 % change
21
By market (kt) By product (kt)
577 635 730
2,9232,9183,035
1,304 1,219 1,238
0
2,000
4,000
6,000
2005 2006 2007Croatia BiH Other markets
885 914 957
1,2541,2341,278
2,753 2,624 2,681
0
3,000
6,000
2005 2006 2007
Motor gasolines Gas and fuel oil Other products
Refining & Marketing - SALES
• Total exports rose by 6%• Sales in BiH up by 15%• INA retained its strong market position
in Croatia
• Fuel sales increased by 2.5%
• Sales of EURO IV-grade fuel (from own production) grew by 19%
RETAIL SEGMENTRETAIL SEGMENT
23
RETAIL
R e s u l t s (HRK millions)
Sales revenues 5,669 5,850 3.2Operating profit 33 (90)CAPEX 117 212 81.2
2006 2007 % change
• In 2007, revenues rose by 3.2%
24
Sales (kt)
0
500
1,000
1,500
2005 2006 2007
Motor gasolines Gas and fuel oil LPG Other
•Diesel sales up by 4.4 % •INA Card in total sales: 23 % •Average throughput per site: 2,816 t
RETAIL
300
400
500
2005 2006 2007Croatia BiH Slovenia
Number of filling stations
1,0901,154 1,163
475 472 482
Targeted Annual ImprovementsTargeted Annual Improvements
EFFICIENCY IMPROVEMENT PROGRAMMES
HRK mill
• Key OptINA efficiency projects include:
- Procurement: Optimisation of purchasing of energy, travel, telecom, office supplies, MRO (spare parts), etc. Full procurement capability-building programme started to sustain savings
- Maintenance optimisation: Reduction of sub-contractor spending and improvement of work scheduling (prioritisation) and monthly budgeting
- Reduction of Rijeka refinery bottleneck
- Reduction of refining losses and own consumption: Massive energy efficiency programme at both refineries (over 65 technical projects)
- Working capital management
OptINA• Total OptINA improvements reached HRK 422 M
SAP• Went live in 2 packages; project officially closed
422
223
747652
161
0
200
400
600
800
2006 2007 2008
Actual Plan
DISCLAIMER
• Some of the information in this presentation may contain projections and other forward-looking statements regarding future performance of the Company. These statements represent plans, targets or predictions and actual results may differ materially as they are subject to risks, uncertainties and other factors such as general economic conditions, the competitive environment, exchange rates, oil and gas prices, margins, market changes, regulatory developments, etc. You are therefore cautioned not to place undue reliance on any forward-looking statements contained in this presentation.
• The Company does not undertake any obligation to release any revisions of these forward-looking statements.
CONTACTS
Željan SImeonov, BSc.Econ.IR HeadPhone: +385 1 / 64 50 102Fax: +385 1 / 64 52 102 Fax-2-Mail: +385 1 /64 52 109E-mail: [email protected]
www.ina.hr
INA - INDUSTRIJA NAFTE d.d.Av. V. Holjevca 10
10 000 ZagrebCroatia