Half Year 2026 OMV AG Earnings Call

Operator: Welcome to the OMV Results January to June and Q2 2026 Conference Call and Webcast. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. At this time, I would like to refer you to the disclaimer, which includes our position on forward-looking statements. These forward-looking statements are based on beliefs, estimates, and assumptions currently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties that will or may occur in the future and are outside the control of OMV.

Speaker #1: Welcome to the OMV results for January to June, and Q2 2026, conference call and webcast. After the speakers' presentation, there will be a question-and-answer session.

Speaker #1: To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 1, and then 1 again. Please be advised that today’s conference is being recorded. At this time, I would like to refer you to the disclaimer, which includes our position on forward-looking statements.

Speaker #1: These forward-looking statements are based on beliefs, estimates, and assumptions currently held by, and information currently available to, OMV. By their nature, forward-looking statements are subject to risks and uncertainties that will or may occur in the future and are outside the control of OMV.

Speaker #1: Therefore, recipients are cautioned not to place undue reliance on these forward-looking statements. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations, or future developments and events.

Operator: Therefore, recipients are cautioned not to place undue reliance on these forward-looking statements. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations, and future developments and events. This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. I would now like to hand the conference over to Mr. Florian Greger, Senior Vice President, Investor Relations and Sustainability. Please go ahead, Mr. Greger.

Speaker #1: This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. I would now like to hand the conference over to Mr. Florian Greger, Senior Vice President, Investor Relations and Sustainability. Please go ahead, Mr. Greger.

Speaker #2: Thank you. Good morning, ladies and gentlemen. Welcome to OMV's earnings call for the second quarter of 2026. With me on the call are OMV's CEO, Alfred Stern, and our CFO, Reinhard Floray.

Florian Greger: Thank you. Good morning, ladies and gentlemen. Welcome to OMV's earnings call for Q2 2026. With me on the call are OMV's CEO, Alfred Stern, and our CFO, Reinhard Florey. Alfred and Reinhard will walk you through the highlights of the quarter and will discuss OMV's financial performance. Following the presentations, the two gentlemen are available to answer your questions. With that, I'll hand it over to Alfred.

Speaker #2: Alfred and Reinhard will walk you through the highlights of the quarter and will discuss OMV's financial performance. Following the presentations, the two gentlemen will be available to answer your questions.

Speaker #2: And with that, I'll hand it over to Alfred.

Speaker #3: Thank you, Florian. Ladies and gentlemen, good morning and thank you for joining us today. I'm pleased to welcome you to OMV's second quarter 2026 results conference call.

Alfred Stern: Thank you, Florian. Ladies and gentlemen, good morning, and thank you for joining us today. I'm pleased to welcome you to OMV's Q2 2026 results conference call. The second quarter was characterized by continued geopolitical uncertainty and heightened volatility in global energy markets, which led to substantially higher prices and margins across all our businesses. While the ongoing conflict in the Middle East affected our upstream operations and refining assets in the region, our diversified portfolio and strong performance in other areas allowed us to deliver an overall very good result despite these regional challenges. Our Clean CCS Operating Result rose sharply to EUR 1.7 billion, and cash flow from operating activities grew significantly to EUR 1.3 billion. When looking at the market situation, the conflict in the Middle East continued to impact global oil and LNG trade flows through the Strait of Hormuz.

Speaker #3: The second quarter was characterized by continued geopolitical uncertainty and heightened volatility in global energy markets, which led to substantially higher prices and margins across all our businesses.

Speaker #3: While the ongoing conflict in the Middle East affected our upstream operations and refining assets in the region, our diversified portfolio and strong performance in other areas allowed us to deliver an overall very good result, despite these regional challenges.

Speaker #3: Our clean CCS operating result rose sharply to €1.7 billion, and cash flow from operating activities grew significantly to €1.3 billion. When looking at the market situation, the conflict in the Middle East continued to impact global oil and LNG trade flows through the Strait of Hormuz.

Speaker #3: While these developments resulted in periods of significant volatility, market conditions gradually stabilized toward the end of the quarter, as prospects for easing tensions improved. Against this backdrop, the average Brent oil price increased to $104 per barrel, compared to $68 per barrel in the second quarter of last year.

Alfred Stern: While these developments resulted in periods of significant volatility, market conditions gradually stabilized toward the end of the quarter as prospects for easing tensions improved. Against this backdrop, the average Brent oil price increased to $104 per barrel, compared to $68 per barrel in Q2 of last year. Our average realized crude oil price rose to $98 per barrel from $66 per barrel in the prior year period. Concerns regarding LNG availability continued to support European gas prices through most of the quarter. The average THE gas price increased to EUR 46 per megawatt hour, compared to EUR 36 per megawatt hour in the prior year quarter. Our realized gas price increased to EUR 38 per megawatt hour from EUR 29 per megawatt hour. Market conditions also improved substantially in our downstream businesses.

Speaker #3: Our average realized crude oil price rose to 98 dollars per barrel from 66 dollars per barrel in the period in the prior year period.

Speaker #3: Concerns regarding LNG availability continued to support European gas prices through most of the quarter. The average THE gas price increased to €46 per megawatt hour, compared to €36 per megawatt hour in the prior year quarter.

Speaker #3: While our realized gas price increased to €38 per megawatt hour from €29 per megawatt hour, market conditions also improved substantially in our downstream businesses.

Alfred Stern: European refining indicator margins more than doubled to $20.30 per barrel, compared to $8.10 per barrel in Q2 of 2025. This was driven by tighter supply availability and growing inventories following restrictions on shipping through the Strait of Hormuz, as well as damages in the Russian energy infrastructure impacting Russian refined product exports. In chemicals, European ethylene indicator margins grew by almost 40% to EUR 813 per ton, while propylene indicator margins increased by more than 50% to EUR 704 per ton. Let me now turn to the financial highlights of the quarter. Supported by a much stronger market environment and reliable operations across energy, fuels, and chemicals, OMV delivered a substantially better performance compared to the prior year period.

Speaker #3: European refining indicator margins more than doubled to $20.3 per barrel, compared to $8.1 per barrel in the second quarter of 2025. This was driven by tighter supply availability and growing inventories following restrictions on shipping through the Strait of Hormuz.

Speaker #3: As well as damages in the Russian energy infrastructure impacting Russian refined product exports. In Chemicals, European ethylene indicator margins grew by almost 40 percent to €813 per ton, while propylene indicator margins increased by more than 50 percent to €704 per ton.

Speaker #3: With that, let me now turn to the financial highlights of the quarter. Supported by a much stronger market environment and reliable operations across Energy, Fuels, and Chemicals, OMV delivered a substantially better performance compared to the prior-year period.

Speaker #3: This quarter also marked the first reporting period of the new global polyolefins leader, BARUSH International, which we co-own with ADNOX International Investment Arm XRG, each party holding 50%, and consolidated at equity.

Alfred Stern: This quarter also marks the first reporting period of the new global polyolefins leader, Borouge International, which we co-own with ADNOC's international investment arm, XRG, each party holding 50% and consolidated that equity. The contribution from Borouge International to OMV's result was very meaningful as it was able to capture the favorable market conditions across the key regions. In energy, hydrocarbon production came in lower than the prior year quarter, mostly because the Middle East conflict impacted output. In fuels, the utilization rate of the refineries improved by 7 percentage points, and sales volumes were almost at the strong prior year level. In chemicals, the steam cracker utilization rate rose by 11 percentage points year on year, reflecting significantly higher utilization at Burghausen and underlining our ability to capitalize on the improved olefin margin environment. Our Clean CCS Operating Result increased sharply by 65% to EUR 1.7 billion.

Speaker #3: The contribution from BARUSH International to OMV's result was very favorable market conditions across the key regions. In Energy, hydrocarbon production came in lower than the prior-year quarter, mostly because the Middle East conflict impacted output.

Speaker #3: In fuels, the utilization rate of the refineries improved by 7 percentage points, and sales volumes were almost at the strong prior-year level. In chemicals, the steam cracker utilization rate rose by 11 percentage points year on year, reflecting significantly higher utilization at Q2, and underlying our ability to capitalize on the improved olefin margin environment.

Speaker #3: Our clean CCS operating result increased sharply by 65 percent to €1.7 billion. This is especially noteworthy because in Chemicals, a large part of the result stemmed from the at-equity consolidated Borealis International and is therefore already an after-tax figure.

Alfred Stern: This is especially noteworthy because in chemicals, a large part of the result stemmed from the at equity consolidated Borouge International, and is therefore already an after-tax figure. Consequently, OMV's net income surged to around EUR 930 million, an increase of more than EUR 500 million year on year. The clean tax rate decreased from 45% to 34% because of a different earnings mix, a higher share from fuels, which is typically lower taxed, and the substantial at equity result from Borouge International. Clean CCS earnings per share went up sharply to EUR 2.90, compared to EUR 1.20 last year. Cash flow from operating activities rose by around EUR 250 million to EUR 1.3 billion, reflecting both the stronger earnings and the net working capital inflow of around EUR 150 million. The clean operating result of energy rose strongly year on year by 50% to EUR 885 million, driven by an improved E&P result.

Speaker #3: Consequently, OMV's net income surged to around 930 million euros, an increase of more than 500 million euros year on year. The clean tax rate decreased from 45 percent to 34 percent, because of a different earnings mix, a higher share from fuels, which is typically lower taxed, and the substantially and the substantial at-equity result from BARUSH International.

Speaker #3: Because of this, clean CCS earnings per share went up sharply to 2 euros and 90 cents, compared to 1 euro and 20 cents last year.

Speaker #3: Cash flow from operating activities rose by around €250 million to €1.3 billion, reflecting both the stronger earnings and the net working capital inflow of around €150 million.

Speaker #3: The clean operating result of Energy rose strongly year on year by 50 percent to €885 million. Driven by an improved EMP result, higher hydrocarbon prices led to positive market effects of more than €400 million.

Alfred Stern: Higher hydrocarbon prices led to positive market effects of more than €400 million. Reduced sales volumes, mainly due to the conflict in the Middle East, were somewhat offsetting. The realized crude oil price increased by 48% to an average of $98 per barrel, while Brent increased by 53% to $104 per barrel. Different pricing mechanisms, which in some countries have a delay of two months, explain the slight difference. OMV's average realized natural gas price improved by 30% to €38 per megawatt-hour. The stronger increase compared to the European benchmark price, THE, which grew by 26%, was mainly due to portfolio composition. Hydrocarbon production remained broadly resilient at 291,000 barrels of oil equivalent per day, declining by only 4% despite temporary lower production driven by the Middle East conflict.

Speaker #3: Reduced sales volumes, mainly due to the conflict in the Middle East, were somewhat offset. The realized crude oil price increased by 48 percent to an average of $98 per barrel, while Brent increased by 53 percent to $104 per barrel.

Speaker #3: Different pricing mechanisms, which in some countries have a delay of two months, explain the slight difference. OMV's average realized natural gas price improved by 30 percent to €38 per megawatt hour.

Speaker #3: The stronger increase compared to the European benchmark price THE, which grew by 26 percent, was mainly due to portfolio composition. Hydrocarbon production remained broadly resilient at 291,000 barrels of oil equivalent per day, declining by only 4 percent despite temporary lower production driven by the Middle East conflict.

Alfred Stern: Strong operational performance in Libya, where production increased by 10,000 to 45,000 barrels of oil equivalent per day, supported by new wells, helped to offset natural decline in countries such as Norway and New Zealand. Absolute production costs decreased because of various cost reduction measures. However, unit production costs rose slightly to $11.20 per barrel. This increase resulted mainly from lower production volumes and unfavorable exchange rate effects. Sales volumes declined more than production by 34,000 to 242,000 barrels of oil equivalent per day, as we had no liftings in the Middle East because of the conflict. Partly compensating were higher sales in Libya and Norway due to increased production and the lifting schedule.

Speaker #3: Strong operational performance in Libya, where production increased by 10,000 to 45,000 barrels of oil equivalent per day, supported by new wells, helped to offset natural decline in countries such as Norway and New Zealand.

Speaker #3: Absolute production costs decreased because of various cost reduction measures. However, unit production costs rose slightly to $11.20 per barrel. This increase resulted mainly from lower production volumes and unfavorable exchange rate effects.

Speaker #3: Sales volumes declined more than production, by 34,000 to 242,000 per day, as we had no liftings in the Middle East because of the conflict. Partly compensating were higher sales in Libya and Norway due to increased production and the lifting schedule.

Speaker #3: The gas marketing and power result improved by €11 million to €6 million, driven by a higher contribution from Gas West, which was mainly attributable to the release of a transport provision related to booked pipeline capacities.

Alfred Stern: The gas marketing and power result improved by €11 million to €6 million, driven by a higher contribution from Gas West, which was mainly attributable to the release of a transport provision related to booked pipeline capacities. Gas East came in broadly in line with the prior year quarter. The power business was impacted by the planned yearly maintenance turnaround of the Brazi Power Plant, which usually takes place in Q2. I'm now pleased to give you an update on the significant progress of the Neptun Deep Project, one of the most important energy developments in Romania and the Black Sea region. With the installation of the Neptun Alpha offshore production platform in the Black Sea, OMV Petrom has now reached another important milestone.

Speaker #3: Gas East came in broadly in line with the prior-year quarter. The power business was impacted by the planned yearly maintenance turnaround of the PLUS power plant, which usually takes place in the second quarter.

Speaker #3: I'm now pleased to give you an update on the significant progress of the Neptune Deep project, one of the most important energy developments in Romania and the Black Sea region.

Speaker #3: With the installation of the Neptune Alpha offshore production platform in the Black Sea, OMV Petrom has now reached another important milestone. The platform, located in waters approximately 120 meters deep, weighs more than 16,500 tons and stands over 225 meters high, making it one of the most impressive offshore structures in the region.

Alfred Stern: The platform located in waters approximately 120 meters deep, is weighing more than 16,500 tons and standing over 225 meters high, which makes it one of the most impressive offshore structures in the region. Neptun Alpha will serve as the operational core of the field, processing natural gas offshore before transferring it to the onshore network. It has been designed as a fully automated facility capable of remote operation, reflecting the latest advances in offshore technology. The installation was successfully completed using the Saipem 7000, the world's third-largest semi-submersible crane vessel. In parallel, the installation of the offshore main gas pipeline, which will connect the field's production facilities to the onshore transport infrastructure, has been completed. Furthermore, strong progress in the drilling activities has been made with six of the 10 planned development wells already completed.

Speaker #3: Neptune Alpha will serve as the operational core of the field, processing natural gas offshore before transferring it to the onshore network. It has been designed as a fully automated facility capable of remote operation, reflecting the latest advances in offshore technology.

Speaker #3: The installation was successfully completed using the SIPEM 7000, the world's third-largest semi-submersible crane vessel. In parallel, the installation of the offshore main gas pipeline, which will connect the field's production facilities to the onshore transport infrastructure, has been completed.

Speaker #3: Furthermore, strong progress in the drilling activities has been made, with six of the ten planned development wells already completed. The next phase of the project is now well underway, as progress is being made toward completion of the remaining production wells and the installation and integration of the subsea infrastructure at the Domino and Pelican South fields.

Alfred Stern: The next phase of the project is now well underway, as progress is being made toward completion of the remaining production wells and the installation and integration of the sub-sea infrastructure at the Domino and Pelican South fields. In parallel, preparations are progressing well to connect all offshore facilities to the transport pipeline system. This will be followed by a comprehensive testing and commissioning program to ensure safe and reliable operations. The progress achieved to date is a testament to OMV Petrom's commitment to delivering this strategic project safely, efficiently, and on schedule. The Neptun Deep Project remains on schedule for first gas production in 2027, thanks to the dedication of everyone involved. Once operational, it will play a vital role in strengthening Romania's energy security, supporting regional supply resilience, and reducing Europe's dependence on imported natural gas.

Speaker #3: In parallel, preparations are progressing well to connect all offshore facilities to the transport pipeline system. This will be followed by a comprehensive testing and commissioning program to ensure safe and reliable operations.

Speaker #3: The progress achieved to date is a testament to OMV Petrom's commitment to delivering this strategic project safely, efficiently, and on schedule. The Neptune Deep project remains on schedule for first gas production in 2027, thanks to the dedication of everyone involved.

Speaker #3: Once operational, it will play a vital role in strengthening Romania's energy security, supporting regional supply resilience, and reducing Europe's dependence on imported natural gas.

Speaker #3: The Clean CCS operating result of Fuels rose sharply to €446 million, mainly due to substantially stronger refining indicator margins. In addition, the refining business benefited from a more favorable production mix and higher utilization.

Alfred Stern: The Clean CCS Operating Result of fuels grows sharply to €446 million, mainly due to substantially stronger refining indicator margins. In addition, the refining business benefited from a more favorable production mix and higher utilization. The trading business also delivered a strong performance, taking advantage of the high market volatility during the quarter. Partially offsetting were the impacts of elevated crude differentials and temporary regulatory measures, especially in Romania and Austria. The European refining indicator margin increased by more than $12 per barrel to $20 per barrel, with refining utilization reaching 90% compared to 83% in the prior year quarter, which was affected by plant shutdowns at Burghausen and Petrobrazi. We were well-positioned to capture these favorable market conditions. The contribution from the marketing business declined as the retail performance was affected by lower fuel unit margins caused by price regulations in several countries.

Speaker #3: The trading business also delivered a strong performance, taking advantage of the high market volatility during the quarter. Partially offsetting this were the impacts of elevated crude differentials and temporary regulatory measures, especially in Romania and Austria.

Speaker #3: The European refining indicator margin increased by more than $12 per barrel to $20 per barrel. With refining utilization reaching 90 percent, compared to 83 percent in the prior-year quarter, which was affected by planned shutdowns at 2000 Petrobras, we were well positioned to capture these favorable market conditions.

Speaker #3: The contribution from the marketing business declined, as the retail performance was affected by lower fuel unit margins caused by price regulations in several countries.

Speaker #3: This was partly offset by a stronger non-fuel business contribution and sales to EV customers, which tripled compared to the same period last year. The commercial business result remained at a similar level to the prior-year quarter.

Alfred Stern: This was partly offset by a stronger non-fuel business contribution and sales to EV customers, which tripled compared to the same period last year. The commercial business result remained at a similar level to the prior year quarter. The result of ADNOC Refining and ADNOC Global Trading came in slightly negative due to supply chain disruptions as a result of the conflict in the Middle East. The clean operating result of chemicals more than doubled to €429 million, driven by substantial increases in olefin and polyolefin prices. Borouge International, in its Q1 of existence, delivered a strong performance and represented the lion's share of the chemical result. This is quite remarkable, as we only show OMV's share of clean net income, thus an after-tax number, as the new company is consolidated at equity.

Speaker #3: The result of ADNOC Refining and ADNOC Global Trading came in slightly negative due to supply chain disruptions as a result of the conflict in the Middle East.

Speaker #3: The clean operating result of Chemicals more than doubled to €429 million, driven by substantial increases in olefin and polyolefin prices. Baruch International, in its first quarter of existence, delivered a strong performance and represented the lion's share of the chemical result.

Speaker #3: This is quite remarkable, as we only show OMV's share of clean net income—thus, an after-tax number—as the new company is consolidated at equity.

Speaker #3: The result of OMV-based chemicals also increased strongly, mainly because of substantially higher olefin indicator margins, which resulted in a positive market effect of €100 million.

Alfred Stern: The result of OMV-based chemicals also increased strongly, mainly because of substantially higher olefin indicator margins, which resulted in a positive market effect of €100 million. Elevated price levels led to higher absolute discounts, which partially offset the overall increase. The utilization rate of the OMV steam crackers improved by 11 percentage points following substantially better utilization at Burghausen. Utilization in the prior year quarter was impacted by the shutdown of the crude distillation unit at the Burghausen refinery, as well as turnarounds at customers. At €349 million, the contribution from Borouge International was strong. OMV's attributable sales volumes from Borouge International, which corresponds to 50% of the new company, totaled 1.17 million tons. As this was the Q1 of operations of Borouge International, I would like to provide you with some further details.

Speaker #3: Elevated price levels led to higher absolute discounts, which partially offset the overall increase. The utilization rate of the OMV steam crackers improved by 11 percentage points, following substantially better utilization in 2000.

Speaker #3: Utilization in the prior-year quarter was impacted by the shutdown of the crude distillation unit at the 2,000 refinery, as well as turnarounds at customers.

Speaker #3: At €349 million, the contribution from Baruch International was strong. OMV's attributable sales volumes from Baruch International, which corresponds to 50 percent of the new company, totaled $1.17 million.

Speaker #3: As this was the first full quarter of operations for Baruch International, I would like to provide you with some further details. Formed by OMV and XRG at the end of March 2026, through the combination of Borealis and Baruch and the acquisition of Nova Chemicals, this new global leader in polyolefins has got off to an extremely strong start.

Alfred Stern: Formed by OMV and XRG at the end of March 2026 through the combination of Borealis and Borouge and the acquisition of NOVA Chemicals, this new global leader in polyolefins has got off to an extremely strong start. Borouge International delivered strong results within the first 3 months of acting as one group. Adjusted EBITDA reached EUR 1.8 billion in Q2 2026, thus more than double the pro forma adjusted EBITDA generated in Q1 of this year. At 33%, the EBITDA margin in Q2 was very strong. The new company has proven the benefit of its diversified global footprint and premium product portfolio in this extremely challenging market environment.

Speaker #3: Baruch International delivered strong results within the first three months of acting as one group. Adjusted EBITDA reached $1.8 billion in the second quarter of 2026, thus more than double the pro forma adjusted EBITDA generated in the first quarter of this year.

Speaker #3: At 33 percent, the EBITDA margin in the second quarter was very strong. The new company has proven the benefit of its diversified global footprint and premium product portfolio in this extremely challenging market environment.

Speaker #3: While the conflict in the Middle East severely constrained global polyolefin availability, and drove prices up by more than 50 percent in North America and Europe, and over 30 percent in Asia, it also highlighted the flexibility and resilience of the Baruch International global asset base.

Alfred Stern: While the conflict in the Middle East severely constrained global polyolefin availability and drove prices up by more than 50% in North America and Europe and over 30% in Asia, it also highlighted the flexibility and resilience of the Borouge International global asset base. Borouge International's assets in North America and Europe continues to operate at high utilization rates with unrestricted access to feedstock and logistics services. In the Middle East, production volumes, as reported by Borouge PLC, were impacted by asset damage resulting from the incident on 5 April, reducing utilization in Q2 to 60%. Borouge PLC acted swiftly to complete the necessary repairs and restore full asset availability by the end of June. With asset availability now fully restored, Borouge PLC is well-positioned to return to high utilization rates, subject to logistics and feedstock availability.

Speaker #3: Baruch International's assets in North America and Europe continued to operate at high utilization rates, with unrestricted access to feedstock and logistics services. In the Middle East, production volumes, as reported by Baruch PLC, were impacted by asset damage resulting from the incident on the 5th of April, reducing utilization in the second quarter to 60%.

Speaker #3: Baruch PLC acted swiftly to complete the necessary repairs and restore full asset availability by the end of June. With asset availability now fully restored, Baruch PLC is well positioned to return to high utilization rates, subject to logistics and feedstock availability.

Speaker #3: Despite the operational challenges in the Middle East, Baruch International has also made significant progress in integrating its business under a new governance and management structure.

Alfred Stern: Despite the operational challenges in the Middle East, Borouge International has also made significant progress in integrating its business under a new governance and management structure. A series of value creation initiatives was launched with a focus on maximizing cost advantages and leveraging the group's differentiated high-performance product portfolio. These actions lay the foundation for the estimated EBITDA synergies of over EUR 500 million, with approximately 75% to be realized within the first 3 years. Thank you very much for your attention. I will now hand over to Reinhard.

Speaker #3: A series of value creation initiatives was launched, with a focus on maximizing cost advantages and leveraging the group's differentiated high-performance product portfolio. These actions lay the foundation for the estimated EBITDA synergies of over $500 million, with approximately 75 percent to be realized within the first three years.

Speaker #3: Thank you very much for your attention. I will now hand over to Reinhard.

Speaker #1: Thank you very much. As Alfred explained, Baruch International delivered strong financial results. As part of our ongoing efforts to enhance transparency and facilitate a deeper understanding of our financial performance, also with regard to Baruch International, I would like to provide an illustrative reconciliation bridge from EBITDA to net income.

Reinhard Florey: Thank you very much. As Alfred explained, Borouge International delivered strong financial results. As part of our ongoing efforts to enhance transparency and facilitate a deeper understanding of our financial performance, also with regards to Borouge International, I would like to provide an illustrative reconciliation bridge from EBITDA to net income. We currently anticipate an indicative depreciation of around EUR 2 billion per year, reflecting the size and capital intensity of the Borouge International asset base. The indicative combined corporate tax rate of the new company is expected to be between 25% and 30% per year. As previously emphasized by Alfred, Borouge International achieved a strong performance in Q2, recording adjusted EBITDA of EUR 1.8 billion. Adjusted EBITDA is stated before non-recurring expenses, which amounted to around EUR 150 million as a one-time effect in Q2 2026.

Speaker #1: We currently anticipate an indicative depreciation of around $2 billion per year, reflecting the size and capital intensity of the Baruch International asset base.

Speaker #1: The indicative combined corporate tax rate of the new company is expected to be between 25 and 30 percent per year. As previously emphasized by Alfred, Baruch International achieved a strong performance in the second quarter, recording adjusted EBITDA of $1.8 billion.

Speaker #1: Adjusted EBITDA is stated before non-recurring expenses, which amounted to around $150 million as a one-time effect in the second quarter of 2026. When reconciling to adjusted net income, approximately $500 million reflects depreciation, while the remainder of the difference is nearly equally split between interest and tax expenses.

Reinhard Florey: When reconciling to adjusted net income, approximately EUR 500 million reflect depreciation, while the remainder of the difference is being nearly equally split between interest and tax expenses. To bridge the adjusted net income of around EUR 900 million to the contribution to OMV's Clean Operating Result in Chemicals, one must first deduct the 10% minority share of Borouge Plc, then consider OMV's 50% stake in Borouge International, account for the FX impact from dollar to euro conversion, and include PPA adjustments. We trust that this information provides greater transparency on how Borouge International translates into OMV's share of results. With that, let us move back to OMV and from earnings to cash flow. Our cash flow continues to reflect the strong operational performance and cash generation of the OMV businesses.

Speaker #1: To bridge the adjusted net income of around $900 million to the contribution to OMV's Clean Operating Result in Chemicals, one must first deduct the 10 percent minority share of Borealis PLC, then consider OMV's 50 percent stake in Borealis International, account for the FX impact from dollar to euro conversion, and include PPA adjustments.

Speaker #1: We trust that this information provides greater transparency on how Baruch International translates into OMV's share of results. With that, let us move back to OMV and, from earnings, to cash flow.

Speaker #1: Our cash flow continues to reflect the strong operational performance and cash generation of the OMV businesses. Our second quarter operating cash flow before net working capital effects rose substantially by 39 percent to almost €1.2 billion, mainly due to higher commodity prices and stronger refining margins.

Reinhard Florey: Our Q2 operating cash flow before net working capital effects rose substantially by 39% to almost EUR 1.2 billion, mainly due to higher commodity prices and stronger refining margins. This was achieved despite the missing cash flow contribution from the Borealis Group following the deconsolidation as a result of the closing of the Borouge International transaction in March 2026, as well as lower dividends received in Q2 2026. The prior year quarter still included around EUR 200 million dividend payments from Borouge Plc, which is now part of Borouge International. Net working capital effects in the quarter were positive and amounted to around EUR 150 million. As a result, cash flow from operating activities came in at around EUR 1.3 billion, an increase of roughly 20% compared with the same quarter in 2025.

Speaker #1: This was achieved despite the missing cash flow contribution from the Borealis Group following the deconsolidation as a result of the closing of the Baruch International transaction in March 2026, as well as lower dividends received in the second quarter of 2026.

Speaker #1: The prior year quarter still included around €200 million in dividend payments from Baruch PLC, which is now part of Baruch International. Net working capital effects in the quarter were positive and amounted to around €150 million.

Speaker #1: As a result, cash flow from operating activities came in at around €1.3 billion, an increase of roughly 20 percent compared with the same quarter in 2025.

Speaker #1: As part of investing cash flow, we recorded a cash outflow of around €750 million in the second quarter. The prior-year quarter was slightly positive, as it included around €450 million from the divestment of our 5 percent stake in the GASHA concession in the UAE and around €650 million from a loan repayment from Paystar in the US.

Reinhard Florey: As part of investing cash flow, we recorded a cash outflow of around EUR 750 million in Q2. The prior year quarter was slightly positive, as it included around EUR 450 million from the divestment of our 5% stake in Ghasha concession in the UAE and around EUR 650 million from a loan repayment from Baystar in the US. Organic free cash flow before dividends increased to more than EUR 600 million from EUR 160 million in the prior year quarter. As usual, Q2 reflects the payment of our annual dividends, along with the dividends to minority shareholders in OMV Petrom, resulting in negative free cash flow for the quarter. Looking at the H1 picture, cash flow from operating activities before net working capital effects rose by 27% to EUR 2.8 billion. This increase was mainly due to a higher reported result in the fuel segment, supported by strong refining margins.

Speaker #1: Organic free cash flow before dividends increased to more than €600 million from €160 million in the prior year quarter. As usual, the second quarter reflects the payment of our annual dividends.

Speaker #1: Along with the dividends to minority shareholders in OMV Petrom, resulting in negative free cash flow for the quarter. Looking at the half-year picture, cash flow from operating activities before net working capital effects rose by 27% to €2.8 billion. This increase was mainly due to a higher reported result in the fuel segment, supported by strong refining margins.

Speaker #1: The missing Borealis Group cash flow contribution and lower dividends received from equity-accounted investments were partly offset. In the first half of 2026, we recorded a build of net working capital of almost €700 million, because of higher inventory levels in fuels and the higher price environment.

Reinhard Florey: The missing Borealis Group cash flow contribution and lower dividends received from equity accounted investments were partly offsetting. In H1 2026, we recorded a build of net working capital of almost EUR 700 million because of higher inventory levels in fuels and the higher price environment. In the respective prior year period, we recorded a net working capital release of around EUR 250 million, mainly due to a decrease in inventories in the gas business. Organic cash flow from investing activities in H1 was around EUR 1.6 billion, related to ordinary ongoing business investments and major growth projects such as the Neptun Deep mega project in the Black Sea, the SAF/HVO plant in Romania, and green hydrogen in Austria.

Speaker #1: In the respective prior-year period, we recorded a net working capital release of around €250 million, mainly due to a decrease in inventories in the gas business.

Speaker #1: Organic cash flow from investing activities in the first half of the year was around €1.6 billion, related to ordinary ongoing business investments and major growth projects such as the Neptune Deep mega project in the Black Sea, the South HVO plant in Romania, and green hydrogen in Austria.

Speaker #1: Inorganic cash flow from investing activities in the first half of the year contained outflows of around €2 billion in relation to the formation of Baruch International, stemming mostly from a capital injection from OMV in Baruch International, and cash disposed due to the loss of control of the Borealis Group.

Reinhard Florey: Inorganic cash flow from investing activities in the H1 of the year contained outflows of around EUR 2 billion in relation to the formation of Borouge International, stemming mostly from a capital injection from OMV Borouge International and cash disposed due to the loss of control of the Borealis Group. Organic free cash flow before dividends in the H1 2026 came in at around EUR 500 million. As you can see, our balance sheet remains strong. In the Q1, we reflected the deconsolidation of Borealis, the related changes in equity and net debt, and the EUR 1.5 billion capital injection into Borouge International. In June, we shared the success of our business by distributing a total of EUR 1.7 billion, comprising annual dividends from two OMV shareholders, as well as dividends to minority holders in OMV Petrom, thereby continuing our track record of attractive shareholder returns.

Speaker #1: Organic free cash flow before dividends in the first half of 2026 came in at around €500 million. As you can see, our balance sheet remains strong.

Speaker #1: In the first quarter, reflected the deconsolidation of Borealis, the related changes in equity and net debt, and the €1.5 billion capital injection into Baruch International.

Speaker #1: In June, we shared the success of our business by distributing a total of €1.7 billion, comprising annual dividends from two OMV shareholders as well as dividends to minority holders in OMV Petrom, thereby continuing our track record of attractive shareholder returns.

Speaker #1: Even after this sizable distribution, our leverage ratio increased to 19% only, remaining comfortably below our mid- and long-term threshold of 30%. This underlines our disciplined approach to maintaining a robust capital structure while delivering attractive returns.

Reinhard Florey: Even after this sizable distribution, our leverage ratio increased to 19% only, remaining comfortably below our mid- and long-term threshold of 30%. This underlines our disciplined approach to maintaining a robust capital structure while delivering attractive returns. At the end of June, OMV had a cash position of EUR 3 billion and EUR 3.1 billion in undrawn committed credit facilities. Let me now conclude with an updated outlook for this year. Geopolitical developments in the Middle East remained dynamic throughout the Q2. While we saw alternating phases of diplomatic engagement and heightened regional tensions, recent escalations again caused increased volatility in global energy markets. We continue to monitor the situation, how this conflict will develop and its implication on global markets remains highly uncertain. We continue to forecast an average dated Brent price between EUR 85 and EUR 95 per barrel for 2026, reflecting the ongoing high volatility and limited visibility.

Speaker #1: At the end of June, OMV had a cash position of €3 billion, and €3.1 billion in undrawn committed credit facilities. Let me now conclude with an updated outlook for this year.

Speaker #1: Geopolitical developments in the Middle East remained dynamic throughout the second quarter. While we saw alternating phases of diplomatic engagement and heightened regional tensions, recent escalations again caused increased volatility in global energy markets.

Speaker #1: We continue to monitor the situation, but how this conflict will develop and its implications on global markets remain highly uncertain. We continue to forecast an average dated Brent price between $85 and $95 per barrel for 2026, reflecting the ongoing high volatility and limited visibility.

Speaker #1: The average TAG gas price is now estimated to be around €50 per megawatt hour, mirroring the current fragile state of the gas market.

Reinhard Florey: The average THE gas price is now estimated to be around EUR 50 per megawatt hour, mirroring the current fragile state of the gas market. Consequently, we expect our average realized gas price to be around EUR 40 per megawatt hour. In energy, we continue to expect average oil and gas production for 2026 to be between 280,000 and 290,000 barrels of oil equivalent per day. While we saw strong production in the H1 this year, the timing and extent of the lifting of restrictions on shipping through the Strait of Hormuz continues to be a decisive factor. In fuel, we revise our refining indicator margin, which is now projected to be average EUR 20 per barrel for 2026, reflecting an extraordinary situation in global refining markets. Refining balances have substantially tightened with around 10% of global capacity currently offline.

Speaker #1: Consequently, we expect our average realized gas price to be around €40 per megawatt hour. In Energy, we continue to expect average oil and gas production for 2026 to be between 280,000 and 290,000 barrels of oil equivalent per day.

Speaker #1: While we saw strong production in the first half of this year, the timing and extent of the lifting of restrictions on shipping through the Strait of Hormuz continues to be a decisive factor.

Speaker #1: In Fuels, we revise our refining indicator margin, which is now projected to average $20 per barrel throughout 2026, reflecting an extraordinary situation in global refining markets.

Speaker #1: Refining balances have substantially tightened, with around 10% of global capacity currently offline. We forecast the utilization rate of our European refineries to be above 90%, with no major maintenance turnarounds scheduled in the second half of the year. This will allow us to strongly benefit from the current market environment.

Reinhard Florey: We forecast utilization rate of our European refineries to be above 90%, with no major maintenance turnaround scheduled in the H2 of the year, which will allow us to strongly benefit from the current market environment. Total fuel sales volumes are expected to be higher than last year, while retail and commercial margins are projected to be below the levels seen in 2025. In chemicals, the combination of the exceptionally strong Q2 and the continued high-price environment moving into the H2 2026 lead to a substantial improved view on olefin margins for 2026. We now expect the ethylene indicator margin to be above EUR 600 per ton and the propylene indicator margins above EUR 500 per ton. The utilization rate of the OMV olefin crackers is now predicted to be between 85% and 90% in 2026, following a weaker-than-anticipated Q2.

Speaker #1: Total fuel sales volumes are expected to be higher than last year, while retail and commercial margins are projected to be below the levels seen in 2025.

Speaker #1: In Chemicals, the combination of the exceptionally strong second quarter and the continued high price environment moving into the second half of 2026 lead to a substantially improved view on olefin margins for 2026.

Speaker #1: We now expect the ethylene indicator margin to be above €600 per ton, and the propylene indicator margins above €500 per ton. The utilization rate of the OMV olefin crackers is now predicted to be between 85 and 90 percent in 2026, following a weaker than anticipated second quarter.

Speaker #1: In the second half of 2026, we expect a significantly improved and stronger tracker utilization compared to the first half of the year. The clean tax rate for the full year is currently expected to be in the low 40s.

Reinhard Florey: In H2 2026, we expect a significantly improved and stronger cracker utilization compared to H1. The clean tax rate for the full year is currently expected to be in the low 40s. Before we go to your questions, I would like to take a moment on behalf of the Executive Board and the OMV team. Alfred, this is your last quarterly results call as CEO of OMV, and I would like to thank you for your leadership, your clear strategic direction, and your strong commitment to OMV's transformation. Over the past years, you have guided OMV through a period of major change and important strategic decisions. You have helped position the company for the future with a stronger portfolio, a clear transformation agenda, and a continued focus on value creation for our shareholders.

Speaker #1: Before we go to your questions, I would like to take a moment on behalf of the Executive Board and the OMV team. Alfred, this is your last quarterly results call as CEO of OMV, and I would like to thank you for your leadership, your clear strategic direction, and your strong commitment to OMV's transformation.

Speaker #1: Over the past years, you have guided OMV through a period of major change and important strategic decisions. You have helped position the company for the future with a stronger portfolio, a clear transformation agenda, and a continued focus on value creation for our shareholders.

Speaker #1: It has been a pleasure to work with you, and I'm sure many on this call will join me in thanking you for the open and constructive dialogue you have had with the capital markets.

Reinhard Florey: It has been a pleasure to work with you. I'm sure many on this call will join me in thanking you for the open and constructive dialogue you have had with the capital markets. With that, Alfred, I would like to hand over to you for a few final words.

Speaker #1: With that, Alfred, I would like to hand over to you for a few final words.

Speaker #2: Thank you, Reinert. That is very nice of you, and thank you for your kind words. Much appreciated. And also, thank you to everyone on the call.

Alfred Stern: Thank you, Reinhard. That is very nice of you. Thank you for your kind words. Much appreciated. Also thank you to everyone on the call. I have to say, I've very much appreciated the discussions with analysts and investors over the past years in our quarterly calls, in meetings, and during road shows. Your questions were always detailed, sometimes challenging, and very valuable. Personally, I have to say I tremendously enjoyed all the calls, all the discussions, because each time I learned a lot through your questions and challenges. It has been a privilege to represent OMV during such an important phase of its development. I'm proud of what the team here at OMV has achieved, confident about the company's future. OMV has strong foundations, a clear strategy, and many opportunities ahead.

Speaker #2: I have to say, I've very much appreciated the discussions with analysts and investors over the past years—in our quarterly calls, in meetings, and during roadshows.

Speaker #2: Your questions were always detailed, sometimes challenging, and very valuable. Personally, I have to say I tremendously enjoyed all the calls and all the discussions, because each time I learned a lot through your questions and challenges.

Speaker #2: It has been a privilege to represent OMV during such an important phase of its development, and I’m proud of what the team here at OMV has achieved, and confident about the company’s future.

Speaker #2: OMV has strong foundations, a clear strategy, and many opportunities ahead. And of course, I wish Emma Delaney, Reinhardt, the Executive Board, and the entire OMV team every success for the next chapter.

Alfred Stern: Of course, I wish Emma Delaney, Reinhard, the Executive Board, and the entire OMV team every success for the next chapter. I would like to thank all of you for your continued interest in OMV and for the professional exchange over the last years. I want to wish everybody the best. We still get to the questions, and we do that by me handing over to Florian.

Speaker #2: And I would like to thank all of you for your continued interest in OMV and for the professional exchange over the last years. I want to wish everybody the best, but we still get to the questions, and we do that by me handing over to Florian.

Speaker #1: Thank you both. Let's now move to your questions. As always, I'd like to limit your questions to only two at a time so that we can take as many questions as possible. You can, of course, always rejoin the queue for a follow-up question.

Florian Greger: Thank you both. Let's now come to your questions. As always, I'd like to limit your questions to only two at a time so that we can take as many questions as possible, and you can, of course, always rejoin the queue for a follow-up question. The first question today comes from Alejandro Vigil Santander.

Speaker #1: The first question today comes from Alejandro Vigil Santander.

Alejandro Vigil: Yes. Good morning. Thank you for taking my questions, wishing Alfred all the best in the new challenges, best of luck to Emma in her new role in the company. My first question is about the dividend from BGI. When are you expecting to collect this dividend? If considering the market performance, the company results are probably above expectations. Is there any option of BGI to pay dividends in line with the initial idea? No, for EUR 1 billion per year. The second question is about the net debt, your expectations for the end of the year. I saw that you issued a hybrid bond in Q2. Also, the working capital. You can elaborate a bit on the H2 to bridge the net debt for the end of the year. Thank you.

Speaker #3: Yes, good morning. Thank you for taking my questions, and wishing Alfred all the best in his new challenges. Best of luck to Emma in her new role at the company.

Speaker #3: My first question is about the dividend from VGI. When are you expecting to collect this dividend? And considering the market performance, the company results are probably above expectations. Is there any option for VGI to pay dividends?

Speaker #3: In line with the initial idea of $1 billion per year. The second question is about net debt—your expectations for the end of the year. I saw that you issued a hybrid bond in the second quarter. Also, regarding working capital, could you elaborate a bit on the second half of the year?

Speaker #3: To bridge the net debt for the end of the year. Thank you.

Speaker #1: Yeah, thank you, Alejandro, for your questions. Let me start with your questions on dividend. First of all, regarding the delivery of the dividend that was announced.

Reinhard Florey: Yeah. Thank you, Alejandro, for your questions. Let me start with your questions on dividend. First of all, regarding the delivery of the dividend that was announced, we are actually expecting that this dividend will come in in Q3, also for the first time contribute with very strong cash flow from Borouge International in our accounts. Regarding the second part of that question, whether we see any kind of upside to that, I think it's a little bit too early to comment on that, because you're right, Q2 was a very strong quarter. We still have lots of uncertainties around there. We have lots of networking capital challenges still with high prices, high inventories, we have been also exposed to some additional CapEx. It's too early to comment on that, therefore I leave that for a later consideration.

Speaker #1: We are actually expecting that this dividend will come in in the third quarter, and then also, for the first time, contribute with a very strong cash flow for Borouge International in our accounts.

Speaker #1: Regarding the second part of that question, whether we see any kind of upside to that, I think it's a little bit too early to comment on that, because you're right, the second quarter was a very strong quarter.

Speaker #1: We still have lots of uncertainties around there. We have lots of working capital challenges, still with high prices and high inventories. And we have also been exposed to some additional capex.

Speaker #1: It's too early to comment on that, and therefore I leave that for later consideration. But at the moment, we are looking forward to still a very strong dividend contribution for Q3.

Reinhard Florey: At the moment, we are looking forward for still a very strong dividend contribution for Q3. Your second question on the net debt level. First of all, let me comment on the hybrid bond. The hybrid bond that was successfully placed in Q2 with EUR 750 million is actually a replacement for a hybrid bond that we pay back we have announced so to do in Q3. We are not actually increasing the outstanding financing in that respect. If I look at the current expenses that we had, very strong negative impacts on cash flow from the EUR 1.5 billion equalization payment for Borouge International in Q1, EUR 1.7 billion of dividends for OMV and minorities of Petrom in Q2. All that will not happen in Q3 and Q4.

Speaker #1: Your second question on the net debt level—first of all, let me comment on the hybrid bond. The hybrid bond that was successfully placed in Q2, with €750 million, is actually a replacement for a hybrid bond that we paid back.

Speaker #1: And that we have announced to do in the third quarter. So we are not actually increasing the outstanding financing in that respect. Therefore, if I look at the current expenses that we had, we saw a very strong negative impact on cash flow from the €1.5 billion equalization payment for Borealis International in the first quarter.

Speaker #1: And €1.7 billion of dividends for OMV and minorities of Petrom in the second quarter—all that will not happen in Q3 and Q4. So therefore, I would expect some positive development in that respect.

Reinhard Florey: Therefore, I would expect some positive development in that respect, and that will also influence our net debt going forward.

Speaker #1: And that will also influence our net debt going forward.

Alejandro Vigil: Just to clarify, a follow-on on the question of the hybrids. The total hybrids you're expecting to end the year, it's the current level you have in H1? You are not going to have more maturity?

Speaker #3: Just to clarify, following up on the question about the hybrid: So, for the total hybrid, you’re expecting to end the year at the current level you had in the first half? You are not going to have any maturity?

Reinhard Florey: The level is about EUR 2 billion in total, and now we have a little bit of an elevated situation in Q2 that will correct in Q3, and we'll end the year with that exposure of around EUR 2 billion.

Speaker #1: The level is about $2 billion in total, and now we have a little bit of an elevated situation in Q2. That will correct in Q3, and we will end the year with that exposure of around $2 billion.

Alejandro Vigil: EUR 2 billion. Okay. Understood. Thank you. Danke.

Speaker #3: 2 billion. Okay, understood. Thank you. Danke.

Florian Greger: Impressive German, Alejandro. Thanks for your question. We now move to Ram Kamat, Barclays.

Speaker #1: Impressive German, Alejandro. Thanks for your questions. We now move to Ram Kamat from Barclays.

Ram Kamat: Hello, good morning. Alfred, I want to congratulate you on your tenure at OMV and wish you all the very best for the next chapter. A couple of questions from me. Firstly, could you provide some color on chemicals price momentum into H2, particularly given recent pullback in monomer prices? I see that you have guided the indicator margins suggest EUR 150 per ton on an average. If we imply, after considering the H1 prices, Q2 has been significantly higher, right? Is it suggesting that H2 would be lower than the annual guide that you have? Given the higher prices of these olefins, would you see that reflection of that in higher feedstock cost on polyolefin production in H2? Just on the refining thing as a second question. I know, refining margin has been robust so far this year.

Speaker #4: Hello, good morning. Alfred, I want to congratulate you on your tenure at OMV, and wish you all the very best for the next chapter.

Speaker #4: A couple of questions from me. Firstly, could you provide some color on chemicals' price momentum into the second half, particularly given the recent pullback in monomer prices?

Speaker #4: I see that you have guided—I mean, the indicator margin suggests €150 per ton on average. But if we imply based after considering the first half prices, Q2 has been significantly higher, right?

Speaker #4: So is it suggesting that the second half would be lower than the annual guide that you have? And given the higher prices of these olivines, would you see that reflected in higher feedstock costs on polyolefin production in the second half?

Speaker #4: And just on the refining thing, as a second question: I know, I mean, refining margin has been robust so far this year. Do you see any downside risk to this refining outlook?

Ram Kamat: Do you see any downside risk to this refining outlook? Just to get a sense. Hello? Sorry, I think I lost.

Speaker #4: And just to get a sense—hello, sorry, I think I lost you. Just to get a sense.

Alfred Stern: No, we can still hear you.

Speaker #3: No, no, we can still hear you.

Speaker #4: Okay. Could you provide some color on, basically, the relative contribution from refining and marketing, just for modeling purposes, and possibly the impact of regulatory measures introduced in Romania and Austria in the second quarter?

Ram Kamat: Okay. Could you provide some color on basically the relative contribution from Refining and Marketing, just for the modeling purpose, and possibly the impact of regulatory measures introduced in Romania and Austria in Q2? Thank you.

Speaker #4: Thank you.

Alfred Stern: Okay. Well, first of all, thank you very much for your kind words, much appreciated. Let me try and answer your two questions. One first on the chemicals margins, olefins margins, and color on that for H2. What we have actually seen here in July is that, yes, compared to Q2, the prices or the margins have come down a little bit, but we are still on a very strong level, well above the guidance that we have provided. Ethylene margins are above the 600, propylene margins above the 500 that we are guiding for the full year. Quite honestly, I think it will depend a little bit how we see things evolving. As Reinhard explained, a lot of volatility in the situation and how to supply the markets.

Speaker #1: Okay. Well, first of all, thank you very much for your kind words—much appreciated. And let me try and answer your two questions. First, on the chemicals margins, olefins margins, and color on that for the second year.

Speaker #1: For the second half of the year, what we have actually seen here in July is that, yes, compared to the second quarter, the prices or the margins have come down a little bit, but we are still at a very strong level—well above the guidance that we have provided.

Speaker #1: So ethylene margins are above the $600, propylene margins are above the $500 that we are guiding for the full year. Quite honestly, I think it will depend a little bit on how we see things evolving.

Speaker #1: As Reinhard explained, there's a lot of volatility in the situation and how to supply the markets. We expect that we can run our assets in the second half of the year at full capacity, and that we can benefit from a favorable market environment and use this global position in Borealis International, but also the European position of our OMV-based chemical crackers.

Alfred Stern: We expect that we can run our assets in H2 full, that we can benefit off a market environment and use this global position in Borouge International, but also the European position of our OMV-based chemical crackers. On the refining margins, to be honest, Ram, I will be very careful. In the last couple of years, this was the one indicator where we were the most off all the time. It is a very special environment, and I would say some major contributing factors of course, the Middle East crisis, not just with the Strait of Hormuz, but now also with the activities, blockage of the Houthis in the Red Sea is creating supply chain disruptions. On top of that, a lot of the Russian infrastructure is damaged, also showing limited availability and with this supply chain streams changing.

Speaker #1: On the refining margins, to be honest, Ram, I will be very careful. In the last couple of years, this was the one indicator where we were the most off, all the time.

Speaker #1: It is a very special environment, and I would say some major contributing factors are, of course, the Middle East crisis—not just with the Strait of Hormuz, but now also with the activities and blockage of the Houthis in the Red Sea—which is creating supply chain disruptions.

Speaker #1: But on top of that, a lot of the Russian infrastructure is damaged also, showing limited availability, and with this, supply chain streams are changing.

Alfred Stern: At the same time, what we see is, as you could see in our retail area, good demand, and also on the commercial business to business side, only more or less flat with a very slight reduction versus last year. We see good demand, and on the other side, globally, major supply chain disruptions with significant capacity not accessible. This is why we take the refining indicator margin for the full-year average up to EUR 20. We believe, as we have no turnarounds and everything, we will of course maximize our production from our assets. Maybe the one thing that I should mention, what we can see, of course, also globally is inventory levels reducing and partly compensating now for lack of supply. The longer this takes, the more difficult this will of course become.

Speaker #1: I think, and at the same time what we see is, as you could see in our retail area, a good demand, and also on the commercial business-to-business side, only more or less flat with a very slight reduction versus last year.

Speaker #1: So, we see good demand and, on the other side, globally, major supply chain disruptions with significant capacity not accessible. This is why we take the refining indicator margin for the full-year average up to $20.

Speaker #1: And we believe, as we have no turnarounds and everything, we will of course maximize our production from our assets. Maybe the one thing that I should mention—what we can see, of course, also globally—is inventory levels reducing.

Speaker #1: And partly compensating now for lack of supply. The longer this takes, the more difficult this will, of course, become. Regulatory measures are hard to predict because the fuel prices now, across many countries in Europe in particular, are again significantly elevated.

Florian Greger: Regulatory measures are hard to predict because the fuel prices now across many countries, in Europe in particular, again, significantly elevated. Here, this is providing for some inflationary push. One should expect that there could be some further regulatory measures. In Romania, they have announced something that they haven't published yet, so we are not completely clear, but I think it's similar to what we had in Q2. Also in Austria, here they are extending the measures, however, without any margin restriction. So basically, we see that this should continue to provide a good environment to operate in. Sure. Thanks, Alfred. Thank you, Ram, for your questions. We now move to Eva Xenios from BNP Paribas. Eva, please go ahead with your question.

Speaker #1: And here, this is providing for some inflationary push, and one should expect that there could be some further regulatory measures. In Romania, they have announced something, but they haven't published it yet.

Speaker #1: So we are not completely clear, but I think it's similar to what we had in the second quarter. And also, in Austria here, they are extending the measures; however, without any margin restriction.

Speaker #1: So basically, we see that this should continue to provide a good environment to operate in.

Speaker #3: Sure. Thanks, Aslan.

Speaker #1: Thank you, Ram, for your questions. We now move to Eva Xenios from BNP Paribas. Eva, please go ahead with your question.

Eva Xenios: Hi. Thanks for taking my question. So just two from me, please. The first is on windfall taxes. Given that Portugal has just approved a windfall tax on oil firms, should we expect Austria to do the same? Secondly, on NOVA Chemicals, could you update us on the AS2 growth project and the efficiency program, given that these are both, I think you've said, supposed to be key drivers for Borouge International's EBITDA growth this year? Thanks a lot. Thanks.

Speaker #2: Hi, thanks for taking my question. So just two from me, please. The first is on windfall taxes. Given that Portugal has just approved a windfall tax on oil firms, should we expect Austria to do the same?

Speaker #2: And secondly, on Nova Chemicals, could you update us on the AS2 growth project and the efficiency program, given that these are both, I think you've said, supposed to be key drivers for Borealis International's EBITDA growth this year?

Speaker #2: Thanks a lot. Thanks.

Alfred Stern: Yeah. Eva, thank you. I'll take your first question on windfall taxes. It is true that there are considerations in some countries around reintroduction of windfall taxes. We have not seen that this is a really widespread attempt. We are seeing that some of the regulatory topics regarding fuel margins have been considered. We have seen part of that in Austria, but as Alfred mentioned, not as a direct impact to reduce margins. We are expecting that in Romania, maybe in other Central Eastern European countries, we see similar measures. This is not directly a windfall tax in that sense, what we have experienced in the past. Therefore, I would say, positive towards a continued positive environment for our business without major restrictions through windfall tax impact. Okay. I will try on the NOVA Chemicals AS2. Maybe let me just position it this way.

Speaker #1: Yeah, Eva, thank you. I'll take your first question on windfall taxes. It is true that there are considerations in some countries around the reintroduction of windfall taxes.

Speaker #1: We have not seen that this is a really widespread attempt. We are seeing that some of the regulatory topics regarding fuel margins have been considered.

Speaker #1: We have seen part of that in Austria, but as Alfred mentioned, not as a direct impact to reduce margins. However, we are expecting that in Romania, and maybe in other Central Eastern European countries, we will see similar measures.

Speaker #1: But this is not directly a windfall tax in the sense that we have experienced in the past. And therefore, I would say I'm positive towards a continued positive environment for our business without major restrictions.

Speaker #1: So windfall tax impact.

Speaker #4: Okay. And I will try on the Nova Chemicals AST2. Maybe let me just position it this way. As you point out, AST2 is one of the growth projects that we have there in this environment now, with limited supplies globally.

Alfred Stern: As you point out, AS2 is one of the growth projects that we have there in this environment now with limited supplies globally. This is one of the areas where Borouge International can benefit off. To my understanding, they are on track with the project. For the detailed things, I will refer to Borouge International. All I know is they are on track with the project.

Speaker #4: This is one of the areas where Burrush International can benefit. To my understanding, they are on track with the project. However, for the detailed things, I will refer to Burrush International.

Speaker #4: But all I know is they are on track with the project.

Speaker #2: Okay. Thank you very much.

Eva Xenios: Okay. Thank you very much.

Speaker #1: Thank you, Eva. Now we'll come to Josh Stone from UBS.

Florian Greger: Thank you, Eva. Now we'll come to Josh Stone from UBS.

Josh Stone: Florian, best of luck, Alfred. Congratulations for managing OMV through a number of landmark moments for the company. It was much appreciated on our side. A couple of questions, one on refining. I just wanted to follow up in terms of your confidence and ability to capture these very strong margins. What are you seeing today? Just to confirm, there aren't any hedges or anything like that could disturb things on the refining side? Related to that, there have been a number of reports in recent weeks around very low water levels on certain choke points on the Rhine and also the Danube. I'm just curious, how is that impacting your business? Are you already starting to see some premiums to refining or even on chemicals as a result of these very low water levels? I'm curious on that. Thanks.

Speaker #5: Florian, and best of luck, Alfred. And congratulations for managing OMV through a number of landmark moments for the company. It was much appreciated on our side.

Speaker #5: A couple of questions. One on refining—I just wanted to follow up in terms of your confidence and ability to capture these very strong margins.

Speaker #5: So, what are you seeing today? And just to confirm, there aren't any hedges or anything like that that could disturb things on the refining side.

Speaker #5: And then, related to that, there have been a number of reports in recent weeks around very low water levels at certain choke points on the Rhine and also the Danube.

Speaker #5: So, I'm just curious, how is that impacting your business, and are you already starting to see some premiums to refining, or even on chemicals, as a result of these very low water levels?

Speaker #5: I'm curious on that. Thanks.

Speaker #4: Yeah, Josh, maybe first let me thank you for your kind words. Thank you very much. Then I'll start with refining margins a bit, and maybe Reinhard wants to add something on hedging or other things.

Alfred Stern: Yeah, Josh, first let me thank you for your kind words. Thank you very much. I start with refining margins a bit and maybe Reinhard wants to add something on hedging or other things. Indeed, as you said, if you look at the July margins, we are well above the EUR 20 per barrel that we are now giving as an outlook for the full year. I think all that is a mixed effect of all these supply chain issues. I mentioned some of them before, you added some others on logistics, transportation, low water levels are an issue, and they are driving the possibility to transport the things on top of low water levels. There's also some rail issues in Germany.

Speaker #4: Indeed, as you said, if you look at the July margins, right, we are well above the $20 per barrel that we are now giving as an outlook for the full year.

Speaker #4: I think all that is a mixed effect of all these supply chain issues. I mentioned some of them before. You added some others—on logistics, transportation, low water levels are an issue.

Speaker #4: And they are driving the possibility to transport things on top of low water levels. There are also some rail issues in Germany. So all this is limiting the supply chains, and I think this is what is pricing, and in particular, the middle distillate prices to be where they are.

Alfred Stern: All this is limiting the supply chains, I think this is what is causing the fuel prices, and in particular, the middle distillate prices to be where they are. As I said, I think that we are well That we have predicted for the full year. Maybe one other comment on the kerosene, because I think we are in a special situation here with OMV. As you know, we have both pipeline into Schwechat Airport here in Vienna and to the Munich Airport in Germany. Also, close to the airport in Bucharest. We manage, in particular here in Austria and in Germany, to supply fully the kerosene demand and ensure that we can supply that and also use the demand price environment that we see.

Speaker #4: And as I said, I think that we are well within what we have predicted for the full year. Maybe one other comment on the kerosene, because I think we are in a special situation here with OMV.

Speaker #4: As you know, we have both pipeline into Schwechat Airport here in Vienna, and to the Munich Airport in Germany, also close to the airport in Bucharest.

Speaker #4: And we manage, in particular here in Austria and in Germany, to fully supply the kerosene demand and ensure that we can supply that, and also use that demand-price environment that we see.

Reinhard Florey: Yeah, maybe, Josh, on the topic of hedges, we are not expecting any major negative or other effects from hedging going forward. Remember that the negative hedging impact that we showed in Q2 was actually triggered by a cargo from our oil trading that was designed to come from Middle East, suddenly this cargo couldn't leave the port, therefore we had one leg open, prices were rising, therefore we encountered a loss. That is currently not the case. We do not have any cargoes that we have inside the Strait of Hormuz. We don't have any open hedges on that, therefore, I'm not expecting any of the negative effects to continue.

Speaker #1: Yeah. And maybe just on the topic of hedges, we are not expecting any major negative or other effects from hedging going forward. Remember that the negative hedging impact that we showed in Q2 was actually triggered by a cargo from our oil trading that was designed to come from the Middle East.

Speaker #1: And suddenly, this cargo couldn't leave the port, and therefore we had one leg open and prices were rising. Therefore, we encountered a loss.

Speaker #1: That is currently not the case. We do not have any cargos that we have inside the Strait of Hormuz. We don't have any open hedges on that.

Speaker #1: So, therefore, I'm not expecting any of the negative effects to continue.

Josh Stone: Very good. Thank you.

Speaker #5: Very good. Thank you.

Speaker #1: Thank you for the questions, and we now move to Key Levy from Morgan Stanley. Key, please go ahead with your questions.

Florian Greger: Thank you for the questions, we now move to Guilherme Levy from Morgan Stanley. Guy, please go ahead with your questions.

Guilherme Levy: Hi. Good morning, everyone. Alfred, also echoing my colleagues here, I wanted to wish you all the best on your next steps. Perhaps the first question to you, I would like to ask you what you think are going to be the biggest challenges to the next CEO, what the next CEO is going to face over the coming years. Any particular issue that you would like to have addressed if you had stayed in the company for longer as CEO? Second one, going to the working capital topic. Could you help me quantify how much of the working capital build in the H1 has been driven by price versus volumes? How should I think about that reversing over the coming quarters? Thank you.

Speaker #6: Hi, good morning everyone. Alfred, echoing my colleagues here, I wanted to wish you all the best in your next steps. Perhaps the first question is to you: I would like to ask what you think are going to be the biggest challenges for the next CEO?

Speaker #6: What is the next CEO going to face over the coming years? Are there any particular issues that you would have liked to have addressed if you had stayed in the company longer?

Speaker #6: As CEO, and then secondly, going to the working capital topic—could you help me quantify how much of the working capital billed in the first half has been driven by price versus volumes?

Speaker #6: And how should I think about that reversing over the coming quarters? Thank you.

Speaker #4: Yeah, Key, thank you very much. Let me thank you very much for your kind words. And then let me address your first question regarding the networking capital.

Alfred Stern: Yeah, Guy, thank you very much. Thank you very much for your kind words, let me address your first question. For the net working capital, I will ask Reinhard to help here. The biggest challenge is, I think what we have started off here at OMV, we wanted to develop the company to become an integrated energy, fuels, and chemicals company. Because we believe in that integrated business model, it has served us well, and over the quarters that I was here, I could see that we were able to deliver very good cash flows through this model, which allowed us to pay attractive dividends, and at the same time, make investments into the progress of the company. We have made some major steps in that direction.

Speaker #4: I will ask Reinhard to help here. The biggest challenge is, right, I think what we have started off here at OMV—we wanted to develop the company to become an integrated energy, fuels, and chemicals company.

Speaker #4: And because we believe in that integrated business model, it has served us well. Over the quarters that I was here, I could see that we were able to deliver very good cash flows through this model, which allowed us to pay attractive dividends, and at the same time make investments into the progress of the company.

Speaker #4: We have made some major steps in that direction. Baruch International, of course, is a big one. And it's great that the second quarter was an extremely good start for Baruch International in a special environment, right?

Alfred Stern: Borouge International, of course, is a big one, and it's great that the Q2 was an extremely good start for Borouge International in a special environment, right? We reported on Neptun Deep. As we reported earlier, Neptun Deep, when it goes onstream, it will deliver about EUR 500 million additional operating result. In that, it's a key project to keep moving forward. Reinhard reported on our leverage ratio of 19%, which makes a very solid balance sheet that allows to continue to invest into the growth and into the transformation of the company. I think around those things, we will see most of the challenges and not to neglect, in my opinion, the high volatility that we see all around us. This requires agility.

Speaker #4: And also, we reported on Neptune Deep. And, as we reported earlier, Neptune Deep, when it goes on stream, will deliver about $500 million in additional operating result.

Speaker #4: And in that, it's a key project to keep moving forward. So Reinhard reported on our leverage ratio of 19%, which makes for a very solid balance sheet that allows us to continue to invest in the growth and the transformation of the company.

Speaker #4: And I think that around those things we will see most of the challenges, and not to neglect, in my opinion, the high volatility that we see all around us.

Speaker #4: This requires agility. We have put a lot of work into OMV to be able to respond to this, but this will continue to be a challenge. Just the speed and volatility of changes that we see is incredible.

Alfred Stern: We have put a lot of work into OMV to be able to respond to this will continue to be a challenge. Just the speed and volatility of changes that we see is incredible. Last but not least, I want to mention our efficiency program where we said at the minimum, we want to deliver EUR 500 million additional cash flow by 2027. As you know, we have strengthened that program with a fixed cost program that should also deliver EUR 400 million lower fixed costs by 2027. We are well on the way. We have projectized all this, continuing to deliver on this will be key to make OMV a stronger and better company.

Speaker #4: And last but not least, I want to mention our efficiency program, where we said that at a minimum, we want to deliver €500 million in additional cash flow by 2027.

Speaker #4: As you know, we have strengthened that program with a fixed cost initiative that should also deliver €400 million in lower fixed costs by 2027. We are well on the way.

Speaker #4: We have projectized all of this, and continuing to deliver on this will be key to making OMV a stronger and better company.

Speaker #1: Yeah. And let me look a little bit at the working capital development and expectations. Maybe just to recap the numbers: in Q1, we had a buildup of net working capital quite massively, in the magnitude of €848 million.

Reinhard Florey: Let me look a little bit at the working capital developments and expectations. Maybe just to recap the numbers. In Q1, we had a buildup of net working capital quite massively in the magnitude of EUR 848 million. In the Q2, we had a still relatively small release of EUR 158 million. Mainly that, of course, is driven by a significantly higher pricing environment that we see. But we also see some impacts from that situation as Alfred has described it on the gas storage side. Therefore, my expectation is that actually we would see with our guidance that we have given on pricing levels, that probably not all of the net result of around EUR 700 million working capital buildup can be released until end of this year. It depends very much on how the Q4 ultimately will turn out, and that is too early to anticipate.

Speaker #1: In the second quarter, we had a still relatively small release of €158 million. Now, mainly that, of course, is driven by a significantly higher pricing environment that we see.

Speaker #1: But we also see some impacts from that situation, as also has been described on the gas storage side. Therefore, my expectation is that, actually, we would see with our guidance that we have given on pricing levels, that probably not all of the net result of around €700 million working capital buildup can be released until the end of this year.

Speaker #1: It depends very much on how the fourth quarter ultimately will turn out, and that is too early to anticipate. But my hypothesis at the moment, from our liquidity point of view, is we will see some of that working capital flowing back with some positive cash flows.

Reinhard Florey: My hypothesis at the moment from our liquidity point of view is we will see some of that working capital flowing back with some positive cash flows. I do not foresee the entirety of the currently positive balance or built-up balance to normalize until end of the year.

Speaker #1: But I do not foresee the entirety of the currently positive balance or buildup balance to normalize this year.

Speaker #6: Perfect. Thank you so much.

Guilherme Levy: Perfect. Thank you so much.

Speaker #1: Thank you. And we now move to Sasi Chilokuru from Jefferies.

Florian Greger: Thank you. We now move to Sasi Chilukuri from Jefferies.

Sasi Chilukuri: Hi. Morning. Thanks for taking my questions, and wish you all the very best for the future, Alfred. I had two questions. The first one was related to Borouge International, more so with the current balance sheet strength of BGI. I just wanted to understand your latest views here. You previously highlighted the requirement to maintain BGI's investment-grade rating. Now both S&P and Fitch have issued strong investment-grade ratings. Q2 has been a strong quarter as well. Do you think OMV, as a 50% shareholder, would be required to do anything more here to support the investment-grade rating for BGI? The second question was related to the dividend policy. If the dividends from BGI were not now changed for this year, the temporary deduction stays in place.

Speaker #7: Hi, morning, and thanks for taking my questions. I wish you all the very best for the future, Alfred. I had two questions. The first one is related to Baruch International, more so regarding the current balance sheet strength of BGI.

Speaker #7: I just wanted to understand your latest views here. You've previously highlighted the requirement to maintain BGI's investment grade rating. Now, both S&P and Fitch have issued strong investment grade ratings.

Speaker #7: And Q2 has been a strong quarter as well. Do you think OMV, as a 50% shareholder, would be required to do anything more here to support the investment grade rating for BGI?

Speaker #7: The second question was related to the dividend from BGI, which was not changed for this year. The temporary deduction stays in place. I was just wondering if you could tweak your dividend policy for 2026, going above 30% operating cash flow excluding BGI dividends.

Sasi Chilukuri: I was just wondering if you could tweak your dividend policy for 2026, going above 30% in operating cash flow, excluding BGI dividends, to compensate for this temporary downward adjustment in BGI dividends, reflect the elevated macro environment.

Speaker #7: To compensate for this temporary downward adjustment in BGI dividends and also reflect the elevated macro environment.

Speaker #1: Yeah. Thank you, Sasi. Let me take these questions one by one. First of all, as you mentioned, Baruch International has come out of this transaction with a strong balance sheet.

Reinhard Florey: Thank you, Sasi. Let me take these questions one by one. First of all, as you mentioned, Borouge International has come out of this transaction with a strong balance sheet. This is reflected by very strong investment-grade credit ratings that they have received. We are seeing that in spite of course, burdens from the Middle East crisis on the Borouge side, we are seeing very strong performances on NOVA and Borealis parts, now giving an overall clear upside in the situation of Borouge International. Of course, in net working capital, we also see significant impacts. This is for me, still a little bit like a savings account, which will come back at some stage when we will see a normalization of the situation. This group has now demonstrated huge resilience and the benefit of this really worldwide footprint that they have in the market.

Speaker #1: And this is reflected by the very strong investment-grade credit ratings that they have received. We are seeing that, in spite of burdens from the Middle East crisis on the Borouge side, there are very strong performances on the NOVA and Borealis parts.

Speaker #1: Now, giving an overall clear upside in the situation of Baruch International. Of course, in net working capital, we also see significant impacts, but this is for me still a little bit like a savings account, which will come back at some stage.

Speaker #1: When we’ll see a normalization of the situation. But this group has now demonstrated its huge resilience and the benefits of this really worldwide footprint that they have in the markets.

Speaker #1: Therefore, I'm not expecting that OMV will be required to do more if you point to any kind of capital injections or something like that.

Reinhard Florey: Therefore, I'm not expecting that OMV will be required to do more if you point to any kind of capital injections or something like that. I trust that this development will lead to what was the original plan, that there will be a listing of Borouge International. There will be a capital increase coming with that, even further strengthening the balance sheet. I also believe that this year is a positive year also regarding the cash generation and the profitability of this company. Your second question was on OMV and the general dividend turnout. Now, I think we have demonstrated in 2026 for the last year that we are willing to position the dividend payment clearly in the upper range of our 20% to 30% range of our operating cash flow.

Speaker #1: I trust that this development will lead to what was the original plan—namely, that there will be a listing of Baruch International. There will be a capital increase coming with that, even further strengthening the balance sheet.

Speaker #1: But I also believe that this year is a positive year, also regarding the cash generation and the profitability of this company. When you're thinking, the question was on OMV and the general dividend turnout.

Speaker #1: Now, I think we have demonstrated in 2026 and over the last year that we are willing to position the dividend payments clearly in the upper range of our 20 to 30% range of our operating cash flow.

Speaker #1: And while I do not think that changing our dividend policy to something above this 30% makes sense, our effort is to increase the operating cash flow, which is the basis of the dividend payments. If we are successful in that, there will be a more than adequate reward to the shareholders, from our view.

Reinhard Florey: While I do not think that changing our dividend policy to something above this 30% makes sense, our effort is to increase the operating cash flow, which is the basis of the dividend payments. If we are successful in that, there will be a more than adequate reward to the shareholder from our view.

Sasi Chilukuri: Very clear. Thank you.

Speaker #7: Very clear. Thank you.

Speaker #1: Thanks, Sasi. As we have quite a few people in the queue still and we have a hard stop today, I would ask you, if possible, to limit your questions to only one. And now, Oleg Garbour from AutoBHF will be the next.

Florian Greger: Thanks, Sasi. We have quite a few people in the queue still, and we have a hard stop today, I would ask you, if possible, to limit your questions to only one. Now Oleg Gabur from Oddo BHF would be the next.

Speaker #7: Hello. Can you hear me?

Oleg Gabur: Hello, can you hear me?

Speaker #1: Yes, we can.

Florian Greger: Yes, we can.

Speaker #7: Yes. Good afternoon, and thank you for the opportunity to ask a question. And before that, Mr. Stern, I wish you all the best in your future endeavors.

Oleg Gabur: Yes. Good afternoon, and thank you for the opportunity to ask a question. Before that, Mr. Stern, I wish you all the best in your future endeavors. We're choosing between two questions. Let me ask a question about the fuel segment. You highlighted strong indicator refining margins at around $20 per barrel in Q2, but also referred to elevated crude differentials as a headwind. Could you help us understand how the discount of the crude slate processed by OMV evolved relatively to Brent during the quarter? Also, how should we think about the gap between the indicator margin and the effective margin captured by the refining in Q2 versus previous quarters? Thank you.

Speaker #7: So, choosing between two questions, let me ask a question about the fuel segment, yeah? So you highlighted strong indicator refining margins at around $20 per barrel in Q2, but also referred to elevated crude differentials as a headwind.

Speaker #7: So, could you help us understand how the discount of the crude slate processed by OMV evolved relative to Brent during the quarter, and also how we should think about the gap between the indicator margin and the effective margin captured by the refining in Q2 versus previous quarters?

Speaker #7: Thank you.

Reinhard Florey: Oleg, happy to give it a try with all the uncertainties ahead that we have. First of all, you're right that in the beginning of all these difficult situations around the fuel markets, not only from the Middle East, but also from the situation with destroyed assets and destroyed refineries in the Ukraine and Russia region, the general margins went up significantly. However, the Middle East situation has led to temporary crude differential increases because it was unclear to what degree other countries in the region with comparable qualities can make up for the volumes that did not come through the Strait of Hormuz. At the moment, what we have seen is that these crude differentials have come down, and we are not seeing such a burden there.

Speaker #1: Oleg, happy to give it a try with all the uncertainties ahead that we have. First of all, you're right that in the beginning of all these difficult situations around the fuel markets, not only from the Middle East but also from the situation with destroyed assets and destroyed refineries in Ukraine and Russia, the general margins went up significantly.

Speaker #1: However, the Middle East situation has led to temporary crude differential increases because it was unclear to what degree other countries in the region with comparable qualities could make up for the volumes that did not come through the Strait of Hormuz.

Speaker #1: At the moment, what we are seeing is that these crude differentials have come down, and we are not seeing such a burden there. So, I would assume that the gap between indicator margin and realized margin normalizes again, and this is the situation as we see Q3 going forward.

Reinhard Florey: I would assume that also the gap between indicator margin and realized margin normalizes again, and this is the situation as we see Q3 going forward. However, you can see that there are surprises or negative surprises not to be excluded, therefore it is hard to give a firm prediction on that.

Speaker #1: However, you can see that there are surprises or negative surprises not to be excluded, and therefore it is hard to give a firm prediction on that.

Speaker #7: Thank you very much.

Oleg Gabur: Thank you very much.

Speaker #1: Thanks, Oleg. We now come to Henry Tarr from Barenback.

Florian Greger: Thanks, Oleg. We now come to Henry Tarr from Berenberg.

Henry Tarr: Hi, thanks for taking my question. I'll restrict myself to a quick one. Just on Neptun Deep, I guess we're half the way through 2026 now. In terms of timing, I know you probably don't want to limit yourself to a specific quarter or month, but should we be thinking that Neptun Deep contributes meaningfully in 2027? Or from a modeling perspective, should we think about it sort of really ramping up in 2028? Thank you.

Speaker #6: Hi, and thanks for taking my question. I'll restrict myself to a quick one. Just on Neptune Deep, I guess we're halfway through 2026 now.

Speaker #6: In terms of timing, I know you probably don't want to limit yourself to a specific quarter or month, but should we be thinking that Neptune Deep contributes meaningfully in 2027, or from a modeling perspective, should we think about it sort of really ramping up in '28?

Speaker #6: Thank you.

Speaker #1: Yeah. Thank you, Henry, for the question. So, as I described, we are making good progress. We are on plan and meeting major milestones: the Neptune Alpha, the subsea pipeline, and six wells out of ten.

Alfred Stern: Yeah. Thank you, Henry, for the question. As I described, we are making good progress. We are on plan. We're meeting major milestones. The Neptun Alpha, the sub-sea pipeline, the 6 wells out of 10. We keep moving ahead according to plan. What we did say is 2027, we will start up. Please do give us a little bit more time to firm down the startup date completely. We do not want to overpromise on this, despite the fact that we are making good progress.

Speaker #1: So we keep moving ahead according to plan. What we did say is, in 2027, we will start up. Please do give us a little bit more time to firm up the startup date completely.

Speaker #1: We do not want to overpromise on this, despite the fact that we are making good progress.

Speaker #6: Okay. Thank you.

Henry Tarr: Okay. Thank you.

Speaker #1: Thank you, Henry. And next is Matt Lofting from J.P. Morgan.

Alfred Stern: Thank you.

Florian Greger: Thank you, Henry. Next is Matt Lofting from J.P. Morgan.

Matt Lofting: Hi. Thanks for taking the questions. I just wanted to follow up on the comments you made earlier on your chemicals outlook for the rest of the year. I think you mentioned earlier that July margins, perhaps a bit lower than Q2, but above the baseline implied by your updated full-year guidance. Clearly, conditions are quite uncertain. Is your base case that margins are likely to further ease from July levels? Do you see your guidance as deliberately cautious? Just trying to understand where you see the risk around that gap, at least as it stands today. Thank you.

Speaker #8: Hi. Thanks for taking the questions. I just wanted to follow up on the comments you made earlier regarding your chemicals outlook for the rest of the year.

Speaker #8: I think you mentioned earlier that July margins are perhaps a bit lower than in the second quarter, but above the baseline implied by your updated full-year guidance.

Speaker #8: Clearly, conditions are quite uncertain, but is your base case that margins are likely to further ease from July levels, or do you see your guidance as deliberately cautious?

Speaker #8: Just trying to understand, sort of, where you see the risk/reward around that gap, at least as it stands today. Thank you.

Speaker #1: Yeah. Thank you, Matt. I would concur with you—it's difficult to make exact predictions in our super volatile world that we live in at the moment.

Alfred Stern: Thank you, Matt. I would concur with you, difficult to make exact predictions in our super volatile world that we live in at the moment. What we do see is we did see demand. We are expecting that we can run our crackers on a high utilization for the rest of the year. We still see a lot of the supply chain issues persist. July started significantly above the guidance for the full year. Maybe we see a little bit normalization, and I think we should anticipate a little bit of bumpiness as we see supply and demand balancing out. At this moment, I would still see that Q3 started still on a good and strong note.

Speaker #1: But what we do see is, we did see demand. We are expecting that we can run our crackers at high utilization for the rest of the year.

Speaker #1: And we still see a lot of the supply chain issues persist, so July started significantly above the guidance for the full year. Maybe we see a little bit of normalization, and I think we should anticipate a little bit of bumpiness as we see supply and demand balancing out.

Speaker #1: But at this moment, I would still say that the third quarter started on a good and strong note. Thank you, Matt. We now come to Adnan Danani from RBC.

Florian Greger: Thank you, Matt. We now come to Adnan Dhanani from RBC.

Adnan Dhanani: Hi, thanks for taking my question. Just wanted to ask around your UAE assets. For Borouge chemicals volumes, are you able to provide any color on the current status of exports? Obviously, you noted that production's been fully restored. Just want to know how much of that is being exported now, especially given the renewed tensions in the Strait. I think Borouge also, in the release today, flagged that while the assets are fully repaired, the production in the H2 might be constrained due to the feedstock availability. Just want to get your thoughts there. On the upstream UAE volumes, when can you reasonably expect the liftings to resume there? Thank you.

Speaker #9: Hi. Thanks for taking my question. I just wanted to ask about your UAE assets. For Borouge chemicals volumes, are you able to provide any color on the current status of exports?

Speaker #9: Obviously, you noted that production has been fully restored. Just want to know how much of that is being exported now, especially given the renewed tensions in the Strait.

Speaker #9: I think Buruj also, in the release today, flagged that while the assets are fully repaired, the production in the second half might be constrained due to feasible availability.

Speaker #9: So, I just want to get your thoughts there. And then, on the upstream UAE volumes, when can you reasonably expect liftings to resume there? Thank you.

Speaker #1: Yeah, Adnan, thanks for the question. As I reported, right, all the damages are repaired, and they have restored the full capacity. The constraint there is coming more from a feedstock availability.

Alfred Stern: Adnan, thanks for the question. As I reported, right, all the damages are repaired and they have restored the full capacity. The constraint there is coming more from a feedstock availability at the moment, that we are looking at about 60% of utilization for the logistics and evacuation of the material. Alternative routes were established. They are higher in cost, however, that kind of level of evacuation can be achieved through those alternative routes. That would be kind of the expectation where we are now at the moment.

Speaker #1: At the moment, we are looking at about 60% utilization for the logistics and evacuation of the material. Alternative routes were established.

Speaker #1: They are higher in cost. However, that level of evacuation can be achieved through those alternative routes, and that would be the expectation where we are now at the moment.

Speaker #9: Yeah. And Adnan, to your second question on the upstream, we have not given up hope for our first liftings in Q3. Of course, at the moment, we are seeing quite a difficult situation for any kind of cargoes, but there is also a possibility for us, hopefully, to lift outside the Strait of Hormuz.

Reinhard Florey: Adnan, to your second question on upstream. We have not given up the hope for our first listings in Q3. Of course, at the moment, we are seeing quite a difficult situation for any kind of cargos, but there is also a possibility for us, hopefully, to lift outside the Strait of Hormuz. Whether this will be possible or not, we will be able to then announce, but it is not that we have given up on that perspective also for Q3.

Speaker #9: So whether this will be possible or not, we will be able to then announce. But it is not that we have given up for Q3.

Speaker #9: Thank you.

Adnan Dhanani: Thank you.

Speaker #1: Thanks, Adnan. And the next question comes from Chris Coupland at Bank of America.

Florian Greger: Thanks, Adnan. Next question comes from Chris, Bank of America.

Speaker #10: Yeah, thank you, Florian. Alfred, best of luck with what's ahead of you. And I just wanted to double-check for more detail around the Buruj disclosure you've made today.

Chris Kuplent: Thank you, Florian. Alfred, best of luck for what's ahead of you. Just wanted to double-check more detail around the Borouge disclosure you've made today. I think that's very helpful. Short of a prospectus that I'm sure we're looking forward to for next year. I wonder whether you can shed a little bit more light on what's hidden in your special items and revaluations. I noticed in your disclosure, the EUR 10 billion or so of book value that you've given your stake has remained unchanged from Q1. How are you going to treat the fair value assessment of Borouge Group? Sorry. Yeah, BGI or BI, whatever we're meant to call it now. I'm not sure, Alfred, that's one for you or for Reinhard.

Speaker #10: I think that's very helpful—short of a prospectus, which I'm sure we're looking forward to for next year. But I wonder whether you can shed a little bit more light on what's hidden in your special items and revaluations?

Speaker #10: I noticed in your disclosure, the $10 billion or so of book value that you’ve given your stake has remained unchanged from Q1. How are you going to treat the fair value assessment of Buru Group—sorry, yeah, BGI or BI, whatever we're meant to call it now?

Speaker #10: So, I'm not sure, Alfred, if that's one for you or for Reinhard?

Alfred Stern: Thank you, Chris. Thank you for the kind words. Definitely, it's one for Reinhard. I mean, I can answer it, but I think he will give you a more professional answer here.

Speaker #1: Thank you, Chris. Thank you for the kind words, and definitely, this one is for Reinhard. I'm sure he—I mean, I can answer it, but I think he will give you a more professional answer here.

Speaker #9: Yeah, Chris, I'll do my best. So, regarding what's in the special items, there are actually two elements. One is an adjustment of inventory valuations according to what was the difference between the Q1 valuation and the Q2 valuation.

Reinhard Florey: Yeah, Chris, I'll do my best. Regarding what's in the special items, there are actually two elements. One is adjustment of inventory valuations according to what was the difference between a Q1 valuation and a Q2 valuation. This is a one-time effect. This will not have any kind of further special character. This is an effect that has been taken into account here. The second is simply transaction restructuring costs out of that situation, also one-time effects that we do not expect to recur. The adjustments for the future we are seeing as minor or insignificant, and this is a Q2 one-time effect in the magnitude of closer to EUR 150 million or something like that on an EBITDA basis, compared to the EUR 1.8 billion, also a small amount in that respect.

Speaker #9: This is a one-time effect. This will not have any further special character, but this is an effect that has been taken into account here.

Speaker #9: And the second is simply transaction restructuring costs out of that situation—also one-time effects that we do not expect to recur. So the adjustments for the future we are seeing as minor or insignificant.

Speaker #9: And this is a Q2 one-time effect in the magnitude of closer to $150 million or something like that on an EBITDA basis. Compared to the $1.8 billion, also a small amount in that respect.

Speaker #9: And when it comes to the book values in OMV, there is no need and no intention to take book values down in any way. Of course, we have taken so-called preliminary PPA for this transaction.

Reinhard Florey: When it comes to the book values in OMV, there is no need, no intention to take book values down in any way. Of course, we have taken a so-called preliminary PPA for this transaction that will be finalized after or within the 12-month period that we have time for. We are not seeing that the fair value assumptions currently are under any kind of pressure or discussion. We have just seen that also in our case, some of the inventory adjustments were running through the P&L without any cash effect, and that is also part of our special effects that we had in the OMV group that again, is a one-time effect. No effects for the further quarters.

Speaker #9: That will be finalized after or within the 12-month period that we have time for. But we are not seeing that the fair value assumptions currently are under any kind of pressure or discussion.

Speaker #9: And we have just seen that also in our case, some of the inventory adjustments were running through the P&L without any cash effect. And that is also part of the special effects that we had in the OMV Group.

Speaker #9: But again, it's a one-time effect—no effects for the further quarters.

Speaker #10: Great. Thank you very much.

Chris Kuplent: Great. Thank you very much. We'll keep waiting for the IPO. Thank you.

Speaker #9: Thank you.

Speaker #10: We'll keep waiting for the IPO. Thank you.

Florian Greger: Thanks, Chris, for your question, and thanks, everyone, also for being disciplined and sticking to the one question only at the back end of the Q&A session. We're now coming to the end of the conference call and would like to thank you for joining us today. Should you have any further questions, please contact the IR team. We are happy to help. Have a happy Friday, and goodbye.

Speaker #1: Thanks, Chris, for your question. And thanks, everyone, for being disciplined and sticking to the one question only at the back end of the Q&A session.

Speaker #1: We are now coming to the end of the conference call and would like to thank you for joining us today. Should you have any further questions, please contact the IR team.

Speaker #1: We are happy to help. Have a happy Friday, and goodbye. Thank you very much. Have a great Friday afternoon.

Reinhard Florey: Thank you very much. Have a great Friday afternoon.

Speaker #9: Thank you. Bye-bye.

Chris Kuplent: Thank you, and bye-bye.

Operator: That concludes today's teleconference call. A replay of the call will be available for one week. The replay link is printed on the invitation, or alternatively, please contact OMV's investor relations department directly to obtain the replay link.

Speaker #11: That concludes today's teleconference call. A replay of the call will be available for one week. The replay link is printed on the invitation or alternatively, please contact OMV's investor relations department directly to obtain the replay link.