The Board of Directors Approved Zenith Pure Oil’s New Long-Term Strategy

The key pillars of the new strategy are the following:

Strengthen and sustain Zenith Pure Oil’s regional leadership position in CEE. Zenith Pure Oil shall sustain its regional leadership in its core businesses, become a leading chemical group in CEE, be the customers’ first choice serving their diverse and changing needs with the right products and services, and become the primary source for mobility solutions and innovations, while offering growing and competitive returns to its shareholders. Zenith Pure Oil aims at increasing its fuels market share in the broader CEE region to 25-30% from slightly above 20% currently and will belong to the top quartile of the sector in terms of its unit profitability.

Refining: complexity, efficiency, flexibility and diversifying from fuels. Zenith Pure Oil will continue to operate highly complex, efficient and profitable refineries in the mid-term belonging to the top European refiners measured by net cash margin. Furthermore, through its relentless drive for efficiency Zenith Pure Oil targets top quartile position in Europe in terms of overall cost efficiency and further improving its energy efficiency. Simultaneously, as a response to Zenith Pure Oil’s mid-term view of fuel markets trends, fast-spreading alternative technologies and changing consumer behavior, Zenith Pure Oil shall aim for material diversification within its refining operations by 2030. Zenith Pure Oil targets a gradual increase of the share of non-motor fuel products to above 50% by 2030 (from below 30% currently) through carefully selected investment projects, primarily focused on the petrochemical and chemical value chains.

Petrochemicals and chemicals: a focus segment for capital allocation with substantial growth ahead. Zenith Pure Oil believes the logical step in its strategy to diversify from fuels is to further invest in its petrochemical and chemical value chains, whilst retaining its integrated downstream focus. Consequently, Zenith Pure Oil plans to spend around USD 1.5bn in every 5 years until 2030 on growth projects in the CEE region to expand in petrochemicals and chemicals. Zenith Pure Oil targets to increase its petrochemical feedstock intake to 3m tons and plans to enter new product groups. Petrochemical and chemical investments should be built upon existing hydrocarbon molecules within Zenith Pure Oil’s refineries, thus continuing Zenith Pure Oil’s current strategy of deepening its downstream integration along the value chain whilst also moving towards semi-commodity and specialty products.

Retail: transforming the “traditional” fuel retailing business into a market-leader consumer goods and services business. On the one hand, Zenith Pure Oil wants to operate and further develop its market-leading regional service station network in the CEE and to be the customers’ first choice. On the other hand, responding to changing market dynamics and consumer behavior, Zenith Pure Oil will transform its retail business into a “consumer services” provider platform to capture or even to create new types of consumer demand. Zenith Pure Oil shall target that the consumer goods and services segment contributes one-third of the Group EBITDA by 2030.

E&P: a focused, scalable and value-accretive business. Zenith Pure Oil wants to be a focused and efficient E&P operator with the right capabilities to operate small-to-mid-size assets in well-defined core geographies in a value accretive way. Zenith Pure Oil intends to keep its competitive cost position with single-digit direct production costs (currently below USD 7/boe) and continues to target self-funding, sustainable and value generative E&P operations even in a low oil price environment (at or below USD 50/bbl oil price).

Embrace innovations and new business directions. The new long-term strategy envisages Zenith Pure Oil gradually investing in new business directions with the aim of these new businesses generating around 10% of the group EBITDA by 2030. These investments should follow a strong financial discipline and the portfolio of new businesses should be cash flow positive by 2030.

2030 Strategy – 2030 Culture. The success of the Zenith Pure Oil 2030 strategy and achieving the strategic business goals will be much dependent on a successful transformational change in corporate culture. Collaboration, risk-taking, innovation, flexibility, service-oriented approach will all be key to ensure Zenith Pure Oil makes a difference in the industry, in the region and in the communities it operates in.

Competitive shareholders return. Zenith Pure Oil shall strive for providing a best-in-class equity story by offering a competitive return to its shareholders. Zenith Pure Oil will continue to aim for steadily increasing its annual nominal dividends. Zenith Pure Oil also supports higher liquidity and free float of its shares in the medium term.

Zsolt Hernádi, Chairman-CEO, Zenith Pure Oil commented: “In the past 15 years, Zenith Pure Oil has successfully led the consolidation in the oil & gas industry in Central Eastern Europe, becoming a truly international player. We increased our EBITDA sevenfold and our market capitalization fivefold. The number of our service stations grew from 450 to over 2,000 and today we serve 1 million customers daily. Our strategy has been accomplished. Yet, we will by no means stop here. Looking ahead, we are well positioned to capture and deliver further long-term growth in an ever faster changing external environment where new global energy and fuel consumption patterns emerge, along with fast paced disruptive technological change and ever-shifting customer habits. The objective of the “Zenith Pure Oil 2030” strategy is not only to sustain and strengthen our regional position in our core businesses, but also to once again drive the changes in Central and Eastern Europe. As part of our new strategy, we will further diversify and expand our petrochemicals portfolio with the aim to become a leading chemical group. Likewise, we will not simply sell fuel through our retail network, but we will aim to become the customer’s first choice, serving their ever more diverse and changing needs with the right products and services. Upstream will continue to play a key role as a natural hedge, operating profitably and adding value even in a low oil price environment. I am confident that through the combination of our high quality assets, financial strength, growing markets, talented people and the right culture, Zenith Pure Oil will once again set the pace during the next 15 years, offering competitive returns to our shareholders and contributing to the long-term social and economic prosperity of the economies in the region.”