OMV Group
Annual Report 2021

Plain-text annual report

Annual Report 2021 The energy for a better life. At a Glance Five-year summary Sales revenues1 Operating Result Profit before tax Taxes on income and profit Net income for the year Net income attributable to stockholders of the parent Clean CCS Operating Result2 Clean CCS net income2 Clean CCS net income attributable to stockholders of the parent2 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn 2021 2020 2019 2018 2017 35,555 5,065 4,870 (2,066) 2,804 2,093 5,961 3,710 2,866 16,550 23,461 3,582 3,453 (1,306) 2,147 1,678 3,536 2,121 1,624 1,050 875 603 1,478 1,258 1,686 1,026 679 22,930 3,524 3,298 (1,305) 1,993 1,438 3,646 2,108 1,594 20,222 1,732 1,486 (634) 853 435 2,958 2,035 1,624 Balance sheet total Equity Net debt excluding leases Net debt including leases Average capital employed Cash flow from operating activities excl. net working capital effects Cash flow from operating activities Capital expenditure Organic capital expenditure3 Free cash flow before dividends Organic Free cash flow before dividends4 Return On Average Capital Employed (ROACE) Clean CCS ROACE2 Return On Equity (ROE) Equity ratio Gearing ratio exluding leases Leverage ratio Earnings Per Share (EPS) Clean CCS EPS2 Cash flow per share5 Dividend Per Share (DPS)6 Payout ratio Employees as of December 31 Production Production cost Fuels and other sales volumes Europe7 Natural gas sales volumes Polyolefin sales volumes7 Utilization rate steam crackers Europe7 Lost-Time Injury Rate (LTIR) in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn 53,798 21,996 4,771 5,962 29,366 49,271 40,375 19,899 16,863 3,632 4,686 21,555 19,923 8,130 9,347 36,961 15,342 1,726 2,014 16,850 31,576 14,334 1,713 2,005 15,550 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in % in % in % in % in % in % 8,897 7,017 2,691 2,650 5,196 4,536 10 13 13 41 22 21 2,786 3,137 6,048 1,884 (2,811) 1,273 4,264 4,056 4,916 2,251 (583) 2,119 4,223 4,396 3,676 1,893 1,043 2,495 8 5 9 40 41 32 11 11 13 42 22 22 12 13 14 42 11 12 3,871 3,448 3,376 1,636 1,681 1,862 6 14 6 45 12 12 in EUR in EUR in EUR in EUR in % 6.40 8.77 21.47 2.30 36 22,434 3.85 2.08 9.60 1.85 48 5.14 4.97 12.42 1.75 34 25,291 19,845 4.40 4.88 13.46 1.75 40 20,231 1.33 4.97 10.56 1.50 113 20,721 in kboe/d in USD/boe in mn t in TWh in mn t in % in mn hours worked 486 6.67 16 196 5.93 90 463 6.58 15 164 5.95 73 487 6.61 19 137 5.59 93 427 7.01 18 114 5.27 94 348 8.79 18 113 5.06 86 0.57 0.32 0.34 0.30 0.34 1 Sales revenues excluding petroleum excise tax 2 Adjusted for special items and CCS effects; further information can be found in Note 4 – Segment Reporting – of the Consolidated Financial Statements 3 Organic capital expenditure is defined as capital expenditure including capitalized Exploration and Appraisal expenditure excluding acquisitions and contingent considerations. 4 Organic free cash flow before dividends is cash flow from operating activities less cash flow from investing activities excluding disposals and material inorganic cash flow components (e.g., acquisitions) 5 Cash flow from operating activities 6 2021: as proposed by the Executive Board and confirmed by the Supervisory Board, subject to confirmation by the Annual General Meeting 2022 7 As of Q1/21 the Downstream segment was split in Refining & Marketing and Chemicals & Materials. For comparison only, figures for the previous years are shown in the new structure. Fields of Activity Exploration & Production In Exploration & Production, OMV explores, develops, and produces oil and gas in its four core regions of Central and Eastern Europe, the Middle East and Africa, the North Sea, and Asia-Pacific and produces gas in a JV in Russia1. In 2021, daily production was 486 kboe/d (equal to 177.5 mn boe). While natural gas accounted for 59% of total production, oil and NGL flows made up 41%. At year- end 2021, proven reserves amounted to 1,295 mn boe. Central and Eastern Europe2 Middle East and Africa North Sea Asia-Pacific2 Russia1 Austria Romania Kurdistan Region of Iraq Libya Tunisia United Arab Emirates Yemen Exploration & Production Presence2 Norway Austria Tunisia Romania Kurdistan Region of Iraq Libya Norway Malaysia New Zealand Russia1 Production and oil and gas split In % 49 149 kboe/d 51 86 kboe/d 18 82 Central and Eastern Europe Middle East and Africa 47 21 89 kboe/d 53 67 kboe/d 79 59 North Sea Asia-Pacific 96 kboe/d Russia 100 41 486 kboe/d Total hydrocarbon production Yemen United Arab Emirates Malaysia Oil and NGL Natural gas New Zealand Central and Eastern Europe Middle East and Africa North Sea Asia-Pacific Russia1 1 OMV decided to not pursue any future investments in Russia. As a result, Russia is no longer considered one of OMV's core regions. 2 In addition, OMV holds participations in exploration licenses in Bulgaria, Georgia, Australia, and Mexico. Refining & Marketing OMV’s Refining & Marketing business refines and markets fuels and natural gas. It operates three inland refineries in Europe and holds a strong market position in the areas where its refineries are located, serving a strong branded retail network and commercial customers. In the Middle East, it owns 15% of ADNOC Refining and ADNOC Global Trading. The processing capacity of its refineries amounted to around 500 kboe/d. Fuels & Gas Fuels Austria Germany1 Hungary Romania Refining & Marketing presence Bulgaria Czech Republic Moldova Serbia Slovakia Slovenia2 United Arab Emirates Netherlands Belgium Germany1 303 Austria 434 Slovenia2 119 Serbia Bulgaria 63 94 Gas Belgium Netherlands Turkey 141 Czech Republic 100 Slovakia 204 Hungary 561 Romania 69 Moldova OMV refineries Number of filling stations Gas-fired power plant LNG terminal Equity gas CEGH Gas storage Turkey United Arab Emirates 1 OMV has agreed to sell 285 filling stations to EG Group. The closing of this transaction is expected in 2022. 2 OMV has agreed to sell its business in Slovenia to MOL Group. The closing of this transaction is expected in 2022. Chemicals & Materials In Chemicals & Materials, OMV, through its subsidiary Borealis, is one of the world’s leading providers of advanced and circular polyolefin solutions with total polyolefin sales of 5.9 mn t in 2021, and a European market leader in base chemicals, fertilizers and plastics recycling. The company supplies services and products to customers worldwide through Borealis and its two important joint ventures: Borouge (with ADNOC, based in the UAE and Singapore) and Baystar™ (with TotalEnergies, based in the US). Chemicals & Materials presence1 United Kingdom Germany Austria France Spain Finland Sweden Netherlands Belgium Russia Poland Czech Republic Slovakia Hungary Romania Croatia Serbia Bulgaria Italy Greece Turkey United States Mexico Morocco Egypt China Japan South Korea Singapore Vietnam Malaysia Thailand India Indonesia South Africa United Arab Emirates Colombia Brazil Chile Argentina 1 Chemicals & Materials presence comprises OMV’s petrochemicals presence as well as the production plants, sales offices, and logistics hubs of Borealis and Borouge. FINANCIAL CALENDAR April 8, 2022 Trading Update Q1 2022 April 29, 2022 Results January–March 2022 July 8, 2022 Trading Update Q2 2022 July 28, 2022 Results January–June and Q2 2022 October 10, 2022 Trading Update Q3 2022 October 28, 2022 Results January–September and Q3 2022 ▸ This financial calendar represents only an extract of the planned dates in 2022. The complete financial calendar and confirmation of the dates can be found at: www.omv.com/financial-calendar ▸ The HTML version of this annual report can be found here: www.reports.omv.com/en/annual-report/2021 ▸ The PDF version of this annual report can be found here: www.omv.com/annual-report-2021 6 Contents 9 1 — TO OUR SHAREHOLDERS 10 14 16 20 Interview with the Chairman of the Executive Board OMV Executive Board Report of the Supervisory Board OMV on the Capital Markets 25 2 — DIRECTORS’ REPORT 26 27 35 40 43 46 56 62 68 75 76 80 About OMV Strategy Sustainability Health, Safety, Security, and Environment Employees OMV Group Business Year Exploration & Production Refining & Marketing Chemicals & Materials Outlook Risk Management Other Information 85 3 — CONSOLIDATED CORPORATE GOVERNANCE REPORT 97 4 — CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 98 108 109 110 112 114 115 Auditor’s Report Consolidated Income Statement for 2021 Consolidated Statement of Comprehensive Income for 2021 Consolidated Statement of Financial Position as of December 31, 2021 Consolidated Statement of Changes in Equity for 2021 Consolidated Statement of Cash Flows for 2021 Notes to the Consolidated Financial Statements 227 5 — FURTHER INFORMATION 228 236 239 Consolidated Report on the Payments Made to Governments Abbreviations and Definitions Contacts and Imprint 7 8 TO OUR SHAREHOLDERS 9 – 24 10 — Interview with the Chairman of the Executive Board 14 — OMV Executive Board 16 — Report of the Supervisory Board 20 — OMV on the Capital Markets OMV ANNUAL REPORT 2021 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD “Transformation through Innovation” A conversation with Alfred Stern, Chairman of the Executive Board and CEO of OMV ▸ More information is available in the video by Alfred Stern in our online report www.reports.omv.com/en/annual-report/2021 Mr. Stern, we are conducting this interview in difficult and sorrowful times. As we speak, war is being waged in Ukraine. This saddens me and our employees as well. The war in Ukraine is a tragic and threatening situation that means great suffering for many people. Our deepest sympathy goes out to all who are directly or indirectly victims of this war. We reject all forms of violence and war and are deeply convinced that freedom and wellbeing for people can only exist in peace. OMV has had business relations with Russia for a long-standing period. How are you dealing with it now? We have carefully considered our involvement in Russia and then made a clear decision that from now on Russia is no longer a core region for OMV. This means that we will no longer pursue any future investments in Russia. For this reason, we have also immediately ended all negotiations regarding a potential participation in blocks 4A/5A of the Achimov-Formation in the Urengoy gas and condensate field. Furthermore, we have initiated a strate- gic review of our existing stake in the Yuzhno Russkoye gas field in Western Siberia. Here we will consider all op- tions, including a divestment or exit. In addition we recognize for this asset, as well as for our receivables from Nord Stream 2 AG, a value adjustment. Mr. Stern, if we turn to the topic of further development and take a look into the future. The mission of companies like OMV has always been to supply energy. What is OMV’s future mission? OMV will continue to develop and grow, and in doing so, pursue the clear goal of becoming a leader in sustainable fuels and chemicals as well as high-quality materials. That means that the OMV of tomorrow will be an innovative company that provides people with the circular resources needed for a better life in these modern times. And even further in the future, OMV will be a company with net-zero greenhouse gas emissions, a goal we aim to achieve by 2050 at the latest. To restate the question, how long can OMV afford to keep pursuing the same business model? Not a single day, if you look at it rationally. Even though we cannot radically change our business model immedi- ately, we must act today and push it in the right direction. The new OMV Strategy 2030 is our first step toward more sustainability. We will implement this strategy quickly so that we can benefit optimally from the opportunities offered by the energy and sustainability transition. I am certain that this transformation of our Company will meet with positive feedback from shareholders, the capital market, customers, and, last but not least, our employees. If you first look back and then into the future – what kind of OMV do you see? Looking back, I see a successful company that has performed very well over many decades in the market and has also prepared very well for the future recently. Looking forward, I see an innovative company that is actively driv- ing the shift toward more sustainability. I see a company that provides circular resources and products essential for our prosperity and a better life for all of us. 10 OMV ANNUAL REPORT 2021 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD » The OMV of tomorrow will be an innovative company that provides people with the circular resources needed for a better life in these modern times. ALFRED STERN Chairman of the Executive Board What does “very well prepared for the future” mean specifically? The past fiscal year underscores the financially and technologically strong position we have built. In 2021, we gen- erated record earnings. This was thanks to first-rate performance by the Exploration & Production business, to sta- ble earnings in Refining & Marketing, and especially to robust growth in Chemicals & Materials. The figures speak for themselves: We are taking the right approach. In addition, we consistently carried out the divestment program we announced in connection with the Borealis acquisition. We have successfully sold our shares in Gas Connect Austria, the E&P business in Kazakhstan, oil fields in Malaysia, and our 25-percent interest in the Wisting oil field in Norway. With this move and the support of our strong results, we were able to reduce our leverage to 22 per- cent in the past year. And OMV’s technological strength? At its core, it is our employees’ extensive knowledge of working with hydrocarbons as well as renewable raw mate- rials and recyclates. We are able to find the best solutions along the entire value chain, a major asset for the fu- ture. And, to name just one innovation, OMV and Borealis were early adopters with the foresight to begin gaining experience in the mechanical and chemical recycling of plastics. This enabled us to establish a very strong jump- ing-off point for a future leadership position in the circular economy, which will play a key role going forward. The circular economy makes it possible to protect the environment and continue to enjoy the advantages of high-qual- ity plastics at the same time. And that is precisely what will be needed. After all, plastics are essential, particularly during the energy transition. Think about heavy-duty cables, solar panels and wind turbines, and capacitors and semiconductors – none of these would be possible without high-quality plastics. It is exactly for this purpose that we offer tailored solutions as a global technological leader in this field. How would you describe OMV in 2030 in one sentence? OMV is ... ... a leader in innovative sustainable fuels, chemicals, and materials, heading toward net zero and leveraging the energy transition as a business opportunity for sustained growth. In the area of sustainable fuels and chemicals as well as high-quality materials and the circular economy in particular, we will be entering a new successful phase of our company history and acting as a role model for transformation in the industry. OMV must also have a vision for 2040. Yes, that is correct. By 2040, we hope to have established a sustainable, circular business model in the Group. And we are thinking beyond that as well. By 2050, we want to achieve net-zero greenhouse gas emissions. That also means that we are pursuing the goal of no longer producing oil and gas as an energy source by 2050. 11 OMV ANNUAL REPORT 2021 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD How do you envision the road to OMV 2030? Of course, this will mean changes in all of our businesses. In Exploration & Production, we have to incrementally move toward lower-carbon business activities. That means we will increase the share of natural gas in our portfolio as a transition fuel, but at the same time pursue sustainable energy solutions in which we can leverage our exper- tise and assets. These include geothermal energy as well as technologies for storing and utilizing CO2 and other gases. OMV already has refineries that count among the most advanced and efficient in Europe. What direction will they take? Our motto is “sustainable fuels.” In the Refining & Marketing business, we will first focus more intensely on using biogenic components in fuels and for chemical feedstock. We will also work on synthetic fuels and raw materials in the longer term. As of 2023, a pilot plant at our Schwechat refinery in Austria will use a catalyst we developed in- house to produce propanol from formerly unused glycerin, a waste product. We already supply wholesale custom- ers with EcoMotion diesel, which reduces greenhouse gas emissions by 20 to 25 percent thanks to its renewable content. Along with Austrian Airlines, we will cut carbon emissions by more than 80 percent with sustainable jet fuel. These are all key steps on our path toward a more sustainable business model. And in Chemicals & Materials? After expanding the crackers at our Burghausen site in Germany, we will produce additional ethylene and propyl- ene for the Bavarian Chemical Triangle starting in the third quarter of 2022. We are already successfully operating a new ISO C4 plant in Burghausen, in which we manufacture high-purity isobutene for the production of adhesives and vitamin C. Our propane dehydration plant in Kallo, Belgium, in which Borealis is investing around EUR 1 bil- lion, will go online next year with a capacity of 750,000 tons. We also see strong growth in Chemicals & Materials internationally in the future. This year, Borealis plans to work with TotalEnergies to increase the polyethylene capacity of our US joint venture Baystar to 1 million tons. In the United Arab Emirates, we were able to announce the successful commissioning of our fifth polypropylene plant recently. Borouge 4, a further project of our subsidiary Borealis and our partner ADNOC, involves investments of USD 6.2 billion in a polyolefin production complex. The facility has an annual capacity of 1.4 million tons. This plant aims to meet the growing demand for energy, infrastructure, and advanced packaging in the Middle East, Africa, and Asia by the end of 2025. OMV’s future in many parts of the world will depend on chemicals. Is that realistic? We have given this a lot of thought and taken this road intentionally. Everything we have seen so far confirms the correctness of this decision. This approach is a logical expansion of our value chain to include the opportunity to use our entire range of expertise to help shape a sustainable circular economy. We will expand geographically and add new, appealing products to our portfolio. The extent to which OMV is profiting from developments in the chem- ical market is demonstrated not least by our recent results. The factory of the future will look different than a chemical factory does today. It will close the raw material loop and will therefore require a combination of various process technologies. Many of these will be a combination of what we are already doing today – in our refineries on the one hand and in our chemical production facilities on the other. For this reason, I am confident that we are well prepared for the future and will be able to utilize our ex- pertise optimally to our advantage. 12 OMV ANNUAL REPORT 2021 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD In technological terms, plastics recycling is in its infancy. However, the fight against plastic waste is likely to be increasingly fierce. How will you approach this? As for the technology, we are at the forefront in mechanical as well as chemical recycling, including fields such as Design for Recycling. The early interest shown by OMV and Borealis in this topic gives us a clear advantage out of the blocks in various ways, such as access to plastic waste. It is also clear that we cannot let up. For this reason, we are making every effort to work with partners to develop these technologies and processes and making sub- stantial investments to do so. In terms of chemical recycling, OMV will convert 16,000 tons of plastic waste per year into valuable synthetic feed- stock for the chemical industry at a ReOil® demo plant at the Schwechat refinery starting in 2023. The next step will kick off in 2026 with a commercially viable, full-scale industrial plant with a processing capacity of 200,000 tons. We already produce some 100,000 tons of circular materials and chemicals. According to research, the circular plastics business will have a market potential of USD 40 to 60 billion by the middle of this decade. Will OMV capture a healthy portion of this market? The circular economy is one of the main pillars of our future business model. At the start, it will only represent a small fraction of our total production volume. However, the actual success of innovations cannot be seen until the future, of course. I am optimistic that OMV can and will play a key role in the supply of raw materials if the market and general economic conditions develop as expected and we diligently pursue our goals. What you are describing might well be the most far-reaching change in OMV’s history. How will you make this shift happen? And what does it mean for OMV’s employees? Naturally, this will result in some changes and challenges for our employees but will also provide many opportuni- ties for development. We cannot forget that OMV has always continued to develop in recent decades and has al- ways been open to progress. We will create the framework necessary and implement the measures required so that everyone who wants to can also take advantage of these opportunities. Let me again come back to our results from the past fiscal year. Our employees generated these absolute record- high earnings under never-before-seen conditions. The effects of the COVID-19 pandemic have put enormous strain on each and every one of us, but we nonetheless delivered this impressive performance. We can continue to achieve great things with this team in the future. I have already expressed my thanks for this on many occa- sions – let me do it here once again. What factors will decide OMV’s success going forward? Success always comes down to several factors. This certainly includes the Company’s financial strength. But the key factor is innovation. And for this, we need our employees, their creativity, and their openness to looking at change and seeing opportunities for new businesses. Vienna, March 9, 2021 Alfred Stern m.p. 13 OMV Executive Board Johann Pleininger Deputy Chairman of the Executive Board and Executive Officer Exploration & Production Alfred Stern Chairman of the Executive Board, Chief Executive Officer and Executive Officer Chemicals & Materials Elena Skvortsova Executive Officer Marketing & Trading Reinhard Florey Chief Financial Officer Martijn van Koten Executive Officer Refining OMV ANNUAL REPORT 2021 / REPORT OF THE SUPERVISORY BOARD Dear Shareholders, The past year was marked by numerous uncertainties despite economic growth. The societal effects of new coro- navirus variants as well as supply bottlenecks and higher raw material costs put somewhat of a damper on the global economic upswing, particularly in the second half of the year. In addition we faced increasing geopolitical tensions which unfortunately culminated in the invasion of Ukraine in the first quarter of 2022. In this challenging environment, the strength and robustness of OMV’s diversified portfolio and the advantages of the expanded value chain including chemical products once again proved their value, and we were able to gener- ate record earnings. This is only partially due to the rise in oil and gas prices. Well over half of this result stems from the Refining & Marketing and especially the Chemicals & Materials businesses, which do not profit from high oil and gas prices. At its core, this success is attributable to the commitment and expertise of our employees, who optimally leveraged the many and varied market conditions – for oil and gas as well as our refinery and chemical products. This remarkable success and OMV’s still extremely stable financial position are also reflected in the proposed pro- gressive dividend of EUR 2.30 per share, by means of which you, dear shareholders, partake in OMV’s suc- cesses. In the following, I would like to inform you about the Supervisory Board’s work during the 2021 financial year: Composition of the Executive Board and Supervisory Board On April 1, 2021, the reorganization of OMV Group approved by the Supervisory Board in February 2021 took ef- fect. This entailed the former Refining & Petrochemical Operations business being divided into Refining on the one hand and Chemicals & Materials on the other hand. The Executive Board team welcomed a new member on April 1, 2021: Alfred Stern, responsible for Chemicals & Materials, including our circular economy activities. He joins OMV as a manager with extensive international experience in the chemical industry who not only ensured the ex- cellent market positioning of Borealis’ polyolefin business but also furthered the company’s circular economy ef- forts in recent years. Thomas Gangl, OMV’s Executive Board member responsible for Refining & Petrochemical Operations, took the position of CEO of Borealis AG as of April 1, 2021. The Refining business had been under the interim leadership of Elena Skvortsova, Executive Officer Marketing & Trading, up to June 30, 2021. On July 1, 2021, Martijn van Koten took over this position as Executive Board mem- ber. Van Koten possesses extraordinarily broad international management expertise in the refinery and chemical business and, along with the Executive Board team, will pursue the transformation of OMV’s refinery activities. On April 26, 2021, former Executive Board Chairman and CEO, Rainer Seele, announced that he would not ex- tend his Executive Board contract past June 30, 2022. In its meeting on June 1, 2021, the Supervisory Board appointed Alfred Stern as his successor in the position of Executive Board Chairman and CEO effective September 1, 2021. Rainer Seele stepped down on August 31, 2021, by mutual agreement. On behalf of the entire Supervisory Board, I would like to thank Rainer Seele for his service to OMV and the further development of the Company. Rainer Seele and his Executive Board team were instrumental in reorganizing OMV’s portfolio, significantly increasing the Company’s profitability, and therefore put- ting in place good conditions for the transformation of OMV. At the same time, he spearheaded the Borealis deal, taking the first major, strategic step in this transformation process. In recruiting Alfred Stern, we succeeded in bringing on board as our new Executive Board Chairman and CEO an international chemical industry executive with substantial experience and knowledge in circular economy innovation. In 2021, some changes were also made to the Supervisory Board. Mansour Mohamed Al Mulla stepped down ef- fective at the end of the Annual General Meeting on June 2, 2021, and Saeed Al Mazrouei was elected his suc- cessor serving as Second Deputy Chairman of the Supervisory Board. Following Thomas Schmid’s resignation, Christine Catasta was elected to the Supervisory Board at the extraordinary General Meeting on September 10, 2021. She holds the position of First Deputy Chairwoman of the Supervisory Board. There were changes on the part of the employee representatives in 2021 as well. Effective January 18, 2021, Ni- cole Schachenhofer and Hubert Bunderla were nominated as new members of the Supervisory Board. Herbert Lindner stepped down as of August 31, 2021, and Alexander Auer was appointed to the Supervisory Board as his successor as of September 1, 2021. 16 OMV ANNUAL REPORT 2021 / REPORT OF THE SUPERVISORY BOARD » In this challenging economic environment, the strength and robustness of OMV’s diversified portfolio and the advantages of the expanded value chain including chemical products once again proved their value. MARK GARRETT Chairman of the Supervisory Board Supervisory Board activities The Supervisory Board carried out its activities during the financial year with great care and in accordance with the law, the Company’s Articles of Association, and the Internal Rules. It oversaw the Executive Board’s governance of OMV and advised it in decision-making processes on the basis of detailed written and verbal reports as well as constructive discussions between the Supervisory Board and the Executive Board. The EUR 2 billion divestment program begun by OMV in 2021 continued successfully in this year: The program involves the sale of our shares in Gas Connect Austria GmbH, our retail and commercial business in Slovenia, and our filling stations in Germany, as well as the sale of our E&P business in Kazakhstan, oil fields in Malaysia, and our 25-percent interest in the offshore Wisting oil field in Norway. The divestment of the Wisting oil field under- scores OMV Exploration & Production GmbH’s strategy of increasing the share of gas over oil to reduce the car- bon intensity of the product portfolio. Moreover, the final investment decision was made in 2021 to build a chemi- cal recycling demo plant based on OMV’s patented ReOil® technology. This was another step in the development of a full-scale commercial plant and an important milestone toward a circular economy and reducing CO2 emis- sions. In December, the Supervisory Board and Executive Board of OMV agreed the basic points of the Strategy 2030. The details are being worked out and will be presented in the first quarter of 2022. The strategy’s aim is for OMV to continue to grow as an integrated energy, fuel, and chemical company while becoming more sustainable and focusing on the circular economy, ultimately achieving net-zero emissions by 2050. On November 1, 2021, the Supervisory Board established a new Sustainability and Transformation Committee. The Sustainability and Transformation Committee will hold its first formal meeting in 2022 and address all issues relevant to ESG considerations, particularly the challenges of climate change. The Committee serves to support and monitor OMV’s transformation process and transition to a more sustainable business model. The Supervisory Board, and especially I as Chairman of the Supervisory Board, attach great importance to an in- tensive exchange with investors. In November and December, I therefore worked with Investor Relations to hold a number of discussions with our major institutional investors and a proxy advisor as part of our governance road- show, which took place virtually this time due to COVID-19. As in the past, trainings specifically designed for the Supervisory Board took place in 2021. The Supervisory Board’s annual self-assessment, based on surveys, was supported by an external consultant. The results are used to help decide which issues and activities to prioritize in 2022. 17 OMV ANNUAL REPORT 2021 / REPORT OF THE SUPERVISORY BOARD Activities of Supervisory Board committees The Presidential and Nomination Committee placed particular focus on the preparation of the decisions regard- ing the Executive Board mandates for the Chemicals & Materials and Refining businesses, and the position of Ex- ecutive Board Chairman and CEO. Furthermore, it focused on the issue of long-term Executive Board succession planning. In 2021, the Remuneration Committee handled issues concerning the appropriateness of the amount and struc- ture of Executive Board remuneration in line with regulatory requirements and market practice. In particular, the contract terms for the new Executive Board members and separation agreements with the Executive Board mem- bers stepping down were discussed and agreed. Shareholders were for the first time presented the Remuneration Report revised to reflect the new provisions of stock corporation law for approval at the 2021 Annual General Meeting. Since 2020, non-financial/ESG compo- nents have been included in the variable remuneration system; their weighting was increased further in 2021. The Remuneration Report presents an even more transparent overview of Executive Board and Supervisory Board remuneration than before, and includes a comparison with the relative development of the Company’s income and employee salaries. In 2021, the Audit Committee looked at important topics related to accounting processes, the internal audit pro- gram, risk management, and the Group’s internal control system. The current auditor of OMV Group, Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H., participated in each of the Audit Committee’s meetings. Meetings of the Portfolio and Project Committee are held regularly prior to the meetings of the Supervisory Board. The committee used its meetings in 2021 to prepare decisions regarding key investment and M&A projects on the basis of extensive information and intensive discussions. Further details regarding the activities of the Supervisory Board and its committees can be found in the (Consoli- dated) Corporate Governance Report. 18 OMV ANNUAL REPORT 2021 / REPORT OF THE SUPERVISORY BOARD Annual financial statements and dividend Following a comprehensive audit and discussions with the auditor during meetings of the Audit Committee and the Supervisory Board, the Supervisory Board has approved the Directors’ Report and the Consolidated Annual Re- port pursuant to section 96(1) of the Austrian Stock Corporation Act as well as the Annual Financial Statements and the 2021 Consolidated Annual Financial Statements pursuant to section 96(4) of the Austrian Stock Corpora- tion Act. Both the Annual Financial Statements and the Consolidated Annual Financial Statements for 2021 re- ceived an unqualified opinion from the auditing company Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H. The Supervisory Board also approved the (Consolidated) Corporate Governance Report audited by both the Su- pervisory Board and the Audit Committee as well as the (Consolidated) Report on Payments Made to Govern- ments. The Supervisory Board found no issues during the audits. Following the audit, the Supervisory Board ac- cepted the Executive Board’s suggestion to jointly propose in the Annual General Meeting distributing a dividend of EUR 2.30 per share, which corresponds to an increase of EUR 0.45 over the previous year. The remaining amount of the net profit after the distribution will be carried forward to new account. The Supervisory Board will audit the separate consolidated non-financial report (Sustainability Report) individually, and this report will be pub- lished separately and after the Annual Report together with the corresponding Supervisory Board report. On behalf of the entire Supervisory Board, I would like to thank the Executive Board and all employees for their commitment and extremely successful work in the difficult 2021 financial year, which was marked by so much un- certainty. I would like to give special thanks to OMV’s shareholders for their continued trust as well as to all of OMV’s customers and partners. Vienna, March 9, 2022 For the Supervisory Board Mark Garrett m.p. 19 OMV ANNUAL REPORT 2021 / OMV ON THE CAPITAL MARKETS OMV on the Capital Markets While the COVID-19 pandemic and new virus variants heightened price volatility on stock markets in 2021, the year was also characterized by strong investor optimism about the resilience of the economy, which fueled a recovery movement throughout the year. In line with the Brent oil price benchmark, OMV’s stock price strongly outperformed both the sector and the wider European market and ended the year at EUR 49.95. Financial markets With the MSCI World Index and STOXX 600 up by 21% and 22% in 2021 respectively, it was a good year for global and European equities. Growth was mainly driven by recovering economic activity and improving company earnings. With rising inflation failing to incite central banks to raise interest rates, investors were compelled to raise their risk appetite in search of higher returns: away from fixed income, and into equities. While the introduction of anti-COVID-19 vaccines in the industrialized world early in 2021 eased some of the pandemic-induced concerns about global economic development, repeated infection surges during the year kept influencing markets. Particularly the emergence of the Omicron variant of the virus in November renewed demand uncertainty, causing a price slump. However, as with every dip during 2021, ample excess liquidity and a “there-is-no-alternative” mindset among investors quickly put equities back on a growth trajectory towards the end of the year. At a glance As a consequence of the sharply rising underlying energy prices, the energy sector was among the top performing sectors during 2021, in Europe as well as in the United States. Energy prices increased not only on the crude oil side, but quite remarkably also on the natural gas side. Benchmark spot prices at European natural gas trading hubs hit record highs several times during the year’s second half. The reason for this increase was a combi- nation of factors, including: low local storage levels af- ter a longer-than-usual previous heating season, de- clining domestic European natural gas production, lim- ited supplies via pipeline from Russia, and intensifying competition for LNG deliveries between European and Asian consumers. The time lag between natural gas benchmark prices in some European markets and hub- based spot prices is the reason why the spot price surge at the hubs did not fully ripple through to all local European markets until early 2022. Number of outstanding shares1 Market capitalization1 Volume traded on the Vienna Stock Exchange Year’s high Year’s low Year end Earnings Per Share (EPS) Book value per share1 Cash flow per share2 Dividend Per Share (DPS)3 Payout ratio Dividend yield1 Total Shareholder Return (TSR)4 in mn in EUR bn in EUR bn in EUR in EUR in EUR in EUR in EUR in EUR in EUR in % in % in % 2021 327.0 16.3 10.4 55.00 32.74 49.95 6.40 47.41 21.47 2.30 36 4.6 57 2020 2019 2018 2017 327.0 10.8 9.3 50.76 16.33 33.00 3.85 42.02 9.60 1.85 48 5.6 (29) 326.9 16.4 8.2 54.54 39.32 50.08 5.14 39.80 12.42 1.75 34 3.5 36 326.7 12.5 9.1 56.24 37.65 38.25 4.40 36.44 13.46 1.75 40 4.6 (25) 326.5 17.3 8.8 54.14 32.37 52.83 1.33 34.35 10.56 1.50 113 2.8 61 1 As of December 31 2 Cash flow from operating activities 3 2021: as proposed by the Executive Board and confirmed by the Supervisory Board; subject to confirmation by the Annual General Meeting 2022 4 Assuming reinvestment of the dividend 20 OMV ANNUAL REPORT 2021 / OMV ON THE CAPITAL MARKETS OMV share performance OMV’s share price markedly outperformed both the sector and the wider European equity market, closing the year up 51%. Assuming dividend reinvestment, the total shareholder return was 57%. OMV’s share price started the year at EUR 33.00, with the bearish influ- ence of COVID-19 still present. However, early 2021 saw the start of a wide-spread anti-COVID-19 vaccina- tion effort in Europe. It sparked the optimism in the market that helped share prices embark on a recovery trajectory lasting throughout the year. OMV’s share price thus never returned to the level seen in the first week of the year, making the January 4, 2021 close of EUR 32.74 the year’s low. Repeated lockdowns in re- sponse to surging COVID-19 cases slowed the recov- ery several times during the year, but none of the pre- scribed measures exerted a similarly negative effect on OMV’s share price as the first lockdown of March 2020. The share reached its high for the year of EUR 55.00 at the end of October 2021, almost in time for the first an- niversary of the Borealis takeover. News about the Omicron variant of the COVID-19 virus in November caused the most severe price drop of the year -13% in a span of 9 trading days. However, just as with the other declines of 2021, this slump was soon made good within a few weeks, in the latter case by early January 2022. OMV closed the year at EUR 49.95, up 51%, broadly in line with the benchmark price develop- ment of OMV’s main underlying commodity, that of crude oil. The average daily trading volume of OMV shares in 2021 was 451,538 shares (2020: 621,393). At year-end, OMV’s total market capitalization stood at EUR 16.3 bn, compared to EUR 10.8 bn at the end of 2020. OMV share price performance 2021 In EUR OMV’s share price outperformed the sector as well as the wider market. The FTSEurofirst E300 Oil & Gas in- dex and the FTSE Eurotop 100 global industry bench- mark gained 21% and 23%, respectively, and the Aus- trian ATX improved by 39%. Measured over a five-year period, the return generated by OMV shares strongly outperformed index returns. A EUR 100 investment in OMV stock at year-end 2016 with continuous dividend reinvestment in further OMV stock would have grown by an average annual return rate of 13% to EUR 183 at year-end 2021. 21 OMV ANNUAL REPORT 2021 / OMV ON THE CAPITAL MARKETS OMV shares: long-term performance compared with indexes Average annual increase with dividends reinvested1 1 Source: Bloomberg. The annualized return for the holding period is assuming dividends are reinvested at spot price. OMV shareholder structure OMV’s shareholder structure remained relatively un- changed in 2021 and was as follows at year-end: 43.1% free float, 31.5% Österreichische Beteiligungs AG (ÖBAG, representing the Austrian government), 24.9% Mubadala Petroleum and Petrochemicals Hold- ing Company (MPPH), 0.4% employee share pro- grams, and 0.1% treasury shares. Shareholder structure In % Proposed dividend of EUR 2.30 per share for the business year 2021 On June 2, 2021, OMV’s Annual General Meeting ap- proved a dividend of EUR 1.85 per share for 2020 as well as all other agenda items including the new Remu- neration Policy for the Executive Board and Supervi- sory Board, the Long Term Incentive Plan 2021, the Equity Deferral 2021. Supervisory Board elections were also held. The Executive Board will propose a dividend of EUR 2.30 per share for 2021 at the next ordinary An- nual General Meeting on June 3, 2022, an increase of 24% over the previous year. The dividend yield, based on the closing price on the last trading day of 2021, amounts to 4.6%. Dividend policy OMV is committed to delivering an attractive and pre- dictable shareholder return through the business cycle. According to its progressive dividend policy, OMV aims to increase dividends every year or at least to maintain the level of the respective previous year. 22 OMV ANNUAL REPORT 2021 / OMV ON THE CAPITAL MARKETS An analysis of our shareholder structure carried out at the end of 2021 showed that institutional investors held 30.6% of OMV’s shares. At 33%, investors from the United States made up the largest regional group of in- stitutional investors. The proportion of investors from the United Kingdom amounted to 19%, while German and French shareholders made up 11% and 7%, re- spectively. The share of investors from Austria was 6%, and Norwegian investors represented 4%. Geographical distribution of institutional investors In % OMV Aktiengesellschaft’s capital stock amounts to EUR 327,272,727 and consists of 327,272,727 no-par- value bearer shares. At year-end 2021, OMV held a to- tal of 261,326 treasury shares. The capital stock con- sists entirely of common shares. Due to OMV’s adher- ence to the one-share, one-vote principle, there are no classes of shares that bear special rights. A consortium agreement between the two major shareholders, ÖBAG and MPPH, contains arrangements for coordinated ac- tion and restrictions on the transfer of shareholdings. Environmental, Social, and Governance (ESG) performance OMV continued to be rated as best in class in various ESG ratings in 2021. OMV received an AAA, the high- est score, in the MSCI ESG Ratings assessment for the ninth year in a row. This places OMV among the best 10% of oil and gas companies. OMV also maintained its Prime Status in the ISS ESG rating with a score of B–. This ranks us among the 5% best oil and gas com- panies in terms of ESG performance. In the Sus- tainalytics ESG Risk Rating, OMV scored a 26.7 (me- dium risk), putting us in the top 5th percentile of oil and gas producers. In 2021, OMV received a Platinum medal in the annual EcoVadis rating for the first time, placing OMV among the top 1% of all 75,000 compa- nies rated globally by Ecovadis. OMV was also recog- nized by CDP with a score of A– (Leadership) in the Climate Change category, earning us a place among the 20 best oil and gas companies in this ranking. Besides these outstanding achievements, OMV has maintained its inclusion in several ESG indexes. Most notably, OMV was included in the Dow Jones Sustaina- bility™ Index (DJSI World and DJSI Europe) for the fourth year in a row as the only Austrian company in the index. OMV attained a score in the 94th percentile in S&P Global’s Corporate Sustainability Assessment (CSA), the basis of the DJSI, in 2021. The DJSI World represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index based on long- term economic, environmental, and social factors. OMV was included in several other S&P indexes, such as the S&P Europe 350®, which is based on the SAM CSA (like the DJSI). OMV is included in many MSCI indexes, such as the prestigious ACWI ESG Leaders Index and the ACWI Low Carbon Leaders Index. Furthermore, OMV maintained its position in the FTSE4Good Index Series, which is used by a wide variety of market partic- ipants to create and assess responsible investment funds. OMV was additionally included in the Euronext V.E Eurozone 120 index (based on its ratings by V.E, an affiliate of Moody’s) and maintained its inclusion in the STOXX® Global ESG Leaders index (based on OMV’s assessment by Sustainalytics). 23 OMV ANNUAL REPORT 2021 / OMV ON THE CAPITAL MARKETS Solid credit ratings Investor Relations activities Even during the COVID-19 pandemic, ensuring active, candid dialogue with the capital market remains a top priority at OMV. Running investor meetings virtually via video conference has become a standard by now. By mastering this innovation, the Investor Relations de- partment fulfilled its mission to provide comprehensive insight into OMV’s strategy and business operations to all capital market participants, thereby guaranteeing equal treatment of all stakeholders. In this way, OMV’s Executive Board was able to continue the constant dia- logue with investors and analysts in Europe, North America, and Asia throughout 2021, regardless of the restrictions imposed to control the pandemic. OMV Group is evaluated by rating agencies Moody’s and Fitch. On July 7, 2021, Moody’s confirmed OMV’s A3 issuer rating while raising the outlook to stable on the back of recovering refining activity, following the easing of COVID-19-induced mobility restrictions. On March 13, 2020, Fitch confirmed OMV’s rating of A– and revised the outlook to negative. Fitch confirmed this rating in August 2020. Analyst coverage At the end of 2021, OMV was covered by 21 sellside fi- nancial analysts who regularly publish research reports on the Company. This ensures OMV good visibility in the financial community. While the share of “sell” rec- ommendations remained 0%, the share of “buy” recom- mendations decreased sightly to 62%, compared to 68% at year-end 2020. This is mainly due to the strong performance of the share price during 2021. A “hold” recommendation was issued by 38% of analysts. Fol- lowing the share price development, the average target price for OMV increased to EUR 59.83 at the end of 2021, from EUR 34.49 per share a year earlier. 24 DIRECTORS’ REPORT 25 — 84 26 — About OMV 27 — Strategy 35 — Sustainability 40 — Health, Safety, Security, and Environment 43 — Employees 46 — OMV Group Business Year 56 — Exploration & Production 62 — Refining & Marketing 68 — Chemicals & Materials 75 — Outlook 76 — Risk Management 80 — Other Information OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT About OMV OMV produces and markets oil and gas as well as chemical products and solutions in a responsible way and develops innovative solutions for a circular economy. In 2021, Group sales amounted to EUR 36 bn. With a year-end market capitalization of around EUR 16 bn, OMV is one of Austria’s largest listed industrial companies. The majority of its roughly 22,400 employees work at its integrated European sites. In Exploration & Production, OMV explores, develops, and produces oil and gas in its four core regions of Central and Eastern Europe, the Middle East and Af- rica, the North Sea, and Asia-Pacific and produces gas in a JV in Russia1. Daily production was 486 kboe/d in 2021 (2020: 463 kboe/d). While natural gas accounted for 59% of total production, liquids amounted to 41%. In Refining & Marketing, OMV operates three refineries in Europe, Schwechat (Austria) and Burghausen (Germany), both of which feature integrated petrochemical production, and the Petrobrazi refinery (Romania). In addition, OMV holds a 15% share in ADNOC Refining and in ADNOC Global Trading. OMV’s total global processing capacity amounts to around 500 kbbl/d. Fuels and other sales volumes in Europe were 16.3 mn t in 2021 (2020: 15.5 mn t) and the retail network consists of around 2,100 filling stations2. The natural gas sales volume was 196.4 TWh in 2021 (2020: 164.0 TWh). OMV owns gas storage facilities with a capacity of 30 TWh, holds a 65% share in the Central European Gas Hub (CEGH), and operates a gas-fired power plant in Romania. In Chemicals & Materials, OMV, through its subsidiary Borealis, is one of the world’s leading providers of advanced and circular polyolefin solutions with total polyolefin sales of 5.9 mn t in 2021 (2020: 5.9 mn t), and a European market leader in base chemicals, fertilizers3 and plastics recycling. The Company supplies services and products to customers worldwide through Borealis and its two important joint ventures: Borouge (with ADNOC, based in the UAE) and Baystar™ (with TotalEnergies, based in the US). Our value chain 1 OMV decided to not pursue any future investments in Russia. As a result, Russia is no longer considered one of OMV's core regions. 2 On December 14, 2020, OMV and EG Group reached an agreement for the acquisition of 285 filling stations in Germany by EG Group. The transaction is sub- ject to required regulatory approvals and the closing is expected in 2022. On February 4, 2021, OMV announced its intention to sell its business in Slovenia. The closing of this transaction is expected in 2022. 3 On February 2, 2022, Borealis received a binding offer from EuroChem for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 26 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Strategy OMV will transform from an integrated oil, gas, and chemicals company into a leader in innovative sustainable fuels, chemicals, and materials, leveraging opportunities in the circular economy. The Group aims to become a net-zero emissions company by 2050 for all three scopes of greenhouse gas emissions. By taking this path, OMV expects to deliver an operating cash flow excluding net working capital effects of around EUR 6 bn by 2025 and at least EUR 7 bn by 2030, a ROACE of at least 12%, and will continue its progressive dividend policy. Market outlook Toward the end of the last decade, global warming and cli- mate change took center stage as some of the most pressing global challenges of our times. In addition, the COVID-19 pandemic significantly impacted the energy markets in 2020. The disruption of supply and demand dy- namics has led to the current energy price escalation. It has also accelerated the emergence of sustainability as a mega trend to tackle the challenges of climate change and, consequently, the energy transition. The ultimate ob- jective of the energy transition is to reduce the greenhouse gas (GHG) footprint of the global energy system to achieve net-zero emissions and limit the global tempera- ture rise to no more than 1.5°C by 2050. The goal of achieving net-zero emissions by 2050 has emerged as a global consensus and is poised to become the new norm and license to operate for corporations. A total of 136 countries representing more than 77% of global carbon emissions and 80% of GDP have made some form of net-zero commitment as of November 2021. Businesses around the world have reacted and pledged to achieve net-zero by 2050. These include leading oil and gas, and chemical companies. The European Union is committed to transforming its net-zero objective into the EU’s Climate Law. The demand for fossil-based commodities will change dra- matically due to the restructuring of the global economy and the adaptation of consumer behavior to the net-zero path. While fossil-based energy products will face decline, new business and growth opportunities will open up in ad- jacent areas, as demand will increase for solutions that can reduce GHG emissions. These are, for example, natu- ral gas as a transition energy source, renewable energy, biofuels, hydrogen, carbon capture, utilization & storage, or CCU/S, geothermal, value chain extension toward more valuable products such as chemicals and polymer solu- tions, and growing developments toward a circular econ- omy. This expected shift to novel solutions demands in- vestment in low-GHG-emissions technologies, and circular economy solutions, where great potential is assumed even though the business models are still uncertain. Despite all the efforts aimed at reducing GHG emis- sions and generating strong growth in renewables, the oil and gas sector is anticipated to remain the main source of primary energy in the next decade. Based on the International Energy Agency World Energy Outlook (IEA WEO) 2021, total energy supply grows by 1.3% per year from 2020 to 2030 in the IEA Stated Policies Scenario (STEPS), reaching 670 exajouls (EJ) by 2030, whereas oil and gas demand growth compared to renewables is roughly split equally. The IEA STEPS assumes a fossil fuels share of 75% in the global en- ergy mix in 2030, and 66% in 2050. This expected growth trajectory might change, if current announce- ments regarding emissions targets materialize, leading to a decline of fossil fuel demand and supply. This trend is in accordance with the IEA Sustainable Devel- opment Scenario (SDS) of the WEO 2021, showing a potential path toward fulfillment of the UN climate goals, factoring in high political ambitions. Note: The financial targets for 2025 are based on the following market assumptions: Brent oil price of USD 65/bbl, THE (Trading Hub Europe) gas price of EUR 22/MWh, refining indicator margin Europe of USD 4.3/bbl, ethylene/propylene indicator margin Europe of EUR 430/t, polyethylene/polypropylene indicator margin Europe of EUR 420/t. The financial targets for 2030 are based on the following market assumptions: Brent oil price of USD 70/bbl, THE (Trading Hub Europe) gas price of EUR 24/MWh, refining indicator margin Europe of USD 4.3/bbl, ethylene/propylene indicator margin Europe of EUR 500/t, polyethylene/poly- propylene indicator margin Europe of EUR 480/t. 27 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT World total primary energy supply In EJ Source: IEA World Energy Outlook 2021 While oil consumption is expected to decline in mature markets such as North America and Europe, global growth beyond 2030 will stem from Asia, the Middle East, and Africa. Peak oil demand is anticipated in the coming decade. Natural gas, on the other hand, which leads to 10–30% lower GHG emissions compared to oil products, will provide a reliable and resilient fuel choice for the energy transition. This will lead to an increase in its demand, with strong momentum from industry and, in particular, the construction sector. Given the above-mentioned trends, the refining busi- ness model in Europe will face declining fossil fuel de- mand, triggered by the decarbonization of road trans- portation. Consequently, this sector will have to re- spond strategically to this circumstance. The retail seg- ment will be resilient but will shift increasingly from fuel to EV charging, hydrogen, and convenience. The share of biofuels, and especially advanced biofuels, an addi- tional enabler for meeting net-zero targets, is expected to increase sharply until 2030. This will be triggered by regulations and end-users, especially in hard-to-elec- trify segments, such as marine, aviation, and heavy- duty transport. Oil demand for chemical production is expected to in- crease, primarily originating from rising demand in emerging markets and closely linked to GDP develop- ment. Approximately 80% of chemical and plastic de- mand growth will be concentrated in emerging markets, mainly Asia, until 2030 and beyond. This region repre- sents most of the global population growth and the cor- responding potential for improving living standards. Av- erage oil demand for chemical products in emerging markets is expected to expand at the rate of above 1% above global GDP growth until 2030. 28 For mature markets such as Europe, North America, and Japan, demand growth is anticipated to remain healthy in the long term, in line with economic develop- ment, but growth rates are expected to slow. Polyolefins are the largest market segment in produc- ing plastic goods. Demand for virgin polyolefins contin- ues to grow at a rate above global GDP until 2030, driven by the Asian market. Polyolefins remain essen- tial for various industries, including packaging, con- struction, transportation, healthcare, pharmaceuticals, and electronics. The key success factor for medium- to long-term sus- tainable business models is growth in renewable feed- stocks, bioplastics, and the development of circular so- lutions. Recycled polyolefin demand is expected to grow at a rate significantly above global GDP until 2030, with Asia having the largest share. Over the next decade, key focus areas for the plastics industry will be continued improvement in waste collec- tion, the redesign of plastics and their applications for increased recyclability, and improvements in recycling technologies . Global recycling rates are projected to increase from 17% today to 20% by 2030, while Europe is expected to see even higher recycling rates. Based on the market development outlook, as de- scribed above, OMV developed two forward-looking en- ergy market frameworks. OMV’s base case scenario is built on the IEA Stated Policies Scenario (STEPS) taken from the World Economic Outlook and adjusted based on an assumption that the EU, the United States, China, Japan, and South Korea (with a two- year delay for political alignment and measuring effec- tiveness) follow the IEA Sustainable Development Sce- nario (SDS) and meet the Paris Agreement targets. OMV’s stress case is built on the IEA SDS Scenario, where the entire world reaches the Paris Agreement commitment of net-zero by 2070. The SDS is used for downside sensitivity analysis to generally understand how the existing and future portfolio will perform in this business scenario. In this scenario, global oil markets will start a continuous downward production trend, with a significant gradient toward 2040, and natural gas markets will peak in 2030 with a strong decline thereaf- ter. European gas demand is expected to decline by 25% by 2030, with a strong phaseout until 2050. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Strategic cornerstones OMV will transform from an integrated oil, gas, and chemicals company into a leader in innovative sustain- able fuels, chemicals, and materials, leveraging oppor- tunities in the circular economy. An integral part of the Group’s strategy is its ambition to become a net-zero emissions company by 2050 for Scope 1, 2, and 3 emissions. In view of the ongoing transformation in the energy industry and a global goal of net-zero emis- sions, OMV builds on its strengths and seizes opportu- nities to position itself competitively. 2030 strategic priorities ▸ Become a net-zero emissions company by 2050; solutions reduce Scope 1 and 2 emissions by 30% and Scope 3 emissions by 20% by 2030 economy solutions ▸ Develop into a global leader in specialty polyolefin ▸ Establish a global leadership position in circular ▸ Become a leading European producer of sustaina- ▸ Reduce fossil production and shift to gas ▸ Enhance OMV’s shareholder value: deliver growth ble fuels and chemical feedstocks with strong financials and continue the progressive dividend policy The Chemicals & Materials business will be the core growth engine of the Group. OMV aims to become a global leader in specialty polyolefin solutions, with a significantly stronger position in the Middle East, Asia, and North America. The Group will strengthen its exist- ing polyolefins business, while also building a strong and diversified chemicals and materials portfolio, by ex- panding into adjacent businesses and new product groups. To achieve this, OMV will target investments and initiatives that improve its returns and carbon foot- print. Moreover, OMV will expand its geographical reach, pursuing high-growth markets, such as Asia and North America. This will be achieved through in-market investments and partnerships based on differentiated technologies and application portfolios. Furthermore, the Company will diversify its presence beyond polyole- fins by entering into specialty chemicals and materials to build leadership positions. An important pillar of OMV’s strategy is the ambition to become a leader in renewable and circular chemicals and materials. The Group will capture the potential of emerging renewable and circular markets by leveraging its integrated technology platform and end-to-end position to develop innovative products and new busi- ness models. The circular economy is crucial for a long- term sustainable chemical business. Thus, a transfor- mation toward an economically viable commercial scale is needed. In this context, the Group’s target is to de- liver around 2 mn t of sustainable C&M products by 2030. OMV also aims to become a leading, innovative pro- ducer of sustainable fuels and chemical feedstocks. As a result, the Western European refineries will reduce their crude distillation throughput by 2.6 mn t and shift to an increased chemical feedstock share of 24% by 2030. The plan is to increase production of renewable fuels and sustainable feedstocks to approximately 1.5 mn t instead. In Marketing, OMV aims to become the first choice of our customers for energy, mobility and convenience, focusing on the sale of sustainable avia- tion fuels, building an EV recharging network, and growing its non-fuel retail business. In the Exploration & Production business, OMV is fo- cusing on maximizing the value and harvesting cash. E&P will reduce gradually its fossil production to below 400 kboe/d by 2030, with an overweight on gas. In the same time, OMV will make significant investments into the low-carbon solutions, namely in around 10 TWh re- newable energy (e.g., geothermal) and around 5 m t p.a. of CCS capacity by 2030 to reduce its GHG foot- print. The E&P business will act as a cash engine for the Group and will support the transformation. The gas sales and logistics business excluding OMV Petrom will be consolidated in the E&P business start- ing 2022. Toward the end of the decade, equity gas contribution to the Gas Sales business portfolio will de- crease due to natural fields decline, and will be pre- dominantly replaced by primarily traded green gas products in order to reduce the carbon intensity of the product portfolio. OMV is committed to becoming a net-zero emissions company by 2050 (Scopes 1, 2, and 3) and has set in- terim targets for 2030 and 2040, with well-defined ac- tions to meet the targets by 2030. By 2030, OMV aims to reduce its Scope 1 and 2 emissions by 30% and its Scope 3 emissions by 20%. The Group also aims to re- duce its intensity in energy supply by 20% by 2030. This will be achieved by decreasing fossil fuel sales, in- creasing zero-carbon energy sales, increasing polyole- fins recycling and sustainable feedstocks and products, as well as using neutralization measures such as CCS. 29 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT This path will enable OMV to deliver operating cash flow excluding net working capital effects of around EUR 6 bn by 2025 and at least EUR 7 bn by 2030, a ROACE of at least 12% in the mid- and long term, and continuation of its progressive dividend policy. These are supported by sound capital allocation priorities and a strong balance sheet, with a mid/long-term leverage ratio of below 30%. Building on its current strengths and a vision of leader- ship in technology and innovation, OMV will be well po- sitioned to thrive sustainably in a world with low GHG emissions. This strategy enhances OMV’s shareholder value, as its transformation path allows for a sustaina- ble growth business model, showing the Group’s com- mitment to cutting GHG emissions, delivering strong fi- nancials, and maintaining its progressive dividend pol- icy. Chemicals & Materials solutions 2030 strategic priorities North America and Asia ▸ Develop into a global leader in specialty polyolefin ▸ Grow in attractive markets with a particular focus on ▸ Grow sustainable polyolefin production to up to ▸ Establish a leading position in renewable and circu- ▸ Diversify portfolio by entering adjacent products ~40% of total polyolefin production in Europe lar economy solutions and new product groups Demand for chemical products will continue to grow ahead of global GDP, even in a low GHG emission world. Virgin polyolefin demand is expected to grow slightly above GDP with a CAGR (2021–2030) of 3.6%. The majority of this demand growth stems from high- growth markets in Asia and is associated with a variety of different end-user markets and applications, provid- ing a natural hedge against the volatility of individual in- dustries. Recycled polyolefins are projected to grow with a CAGR (2021–2030) of 11.7%, significantly above GDP, thanks to strong end-market commitments especially in the consumer goods sector, increasing regulatory pressure, and the need for end-of-life solu- tions for plastic waste. Polyolefins play a critical role as eco-efficient enablers for a sustainable future, e.g., making lighter weight au- tomotive solutions and packaging that reduces food waste and increases shelf life possible. The current lin- ear value chain in polyolefins faces significant chal- lenges: mismanaged and unmanaged waste, environ- 30 mental pollution, unnecessary emissions, and micro- plastic accumulation. Turning the value chain from a linear to a circular model will be one of the priorities for a sustainable chemicals business going forward. How- ever, this requires a profound transformation to enable scale at attractive profitability. Current feedstock acces- sible directly from recycling is limited. For this reason, tapping into up- and downstream feedstocks, primarily through partnerships, is critical to ensuring sufficient access to plastic waste. Partnerships with brand own- ers and retailers ensure attractive long-term offtake agreements with green product premiums. In addition, the future operating model needs to be set up to rapidly respond to changing customer and regulatory de- mands, with a primary focus on the advanced Euro- pean landscape but also on the ability to quickly roll out successful blueprints globally. OMV aims to strengthen its polyolefins business by building on existing strengths and capabilities and fully exploiting competitive advantages to grow into adjacent markets, targeting investments and initiatives that im- prove returns and decreases the Group’s carbon foot- print. Chemicals & Materials has a strong pipeline of organic growth projects in Europe, Middle East and North America. plant, 2023) Key growth initiatives include: ▸ Expansion of propylene capacities in Europe (Kallo ▸ Expansion of the Burghausen naphtha-based ▸ Expansion of Borouge JV through Borouge 4 – steam cracker (2022) building an ethane-based steam cracker of 1.5 mn t and polyolefin plants with a capacity of 1.4 mn t. Steam cracker and polyolefin plants expected to start at the end of 2025. ▸ Expansion of North American footprint through Bay- star JV, building a 1 mn t ethane-based cracker and expanding the polyethylene plants capacity to 1 mn t annual capacity. The steam cracker and the poly- olefin plants expected to start in 2022. Chemicals & Materials business targets to strengthen its polyolefin and specialty product portfolio, securing attractive margins. The business aims to grow in Asia and aims to strengthen its North American footprint via organic and inorganic investemnts. In addition, to fur- ther broaden its portfolio, Chemicals & Materials aims to tap into adjacent pockets of value creation and de- velop a broader diversified chemicals leadership posi- tion, primarily through M&As. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Key growth initiatives include: ▸ Build polypropylene position in North America ▸ Grow in differentiated specialty products ▸ Grow in Asia in specialty polyolefins and circular solutions In addition to overall market attractiveness, strategic fit, and value creation, key investment criteria for potential diversification opportunities are sustainability and geo- graphical footprint. A continued focus on innovation will be essential to maintaining technology leadership. OMV aims to become a leader in renewable and circu- lar chemicals and materials. To reach this goal, the Group plans to capture emerging renewable and circu- lar market potential by leveraging its integrated technol- ogy platform and end-to-end position to establish new products and novel business models. The aim is to deliver approximately 2 mn t p.a. of sus- tainable products by 2030 to reduce product carbon footprint and meet OMV’s emission targets. This will be accomplished by accelerating ongoing (advanced) me- chanical and chemical recycling initiatives in Europe as well as by using bio feedstocks. The sustainable prod- ucts will be the result of the increasing use of bio-feed- stocks for polyolefins and the broader chemicals portfo- lio, and leveraging the close integration with OMV’s Re- fining & Marketing business. Building on its European sustainability leadership, Chemicals & Materials will uti- lize its global footprint to expand circular economy solu- tions globally with existing joint ventures, new growth platforms, and additional partnerships across Asian and North American assets. OMV’s C&M business will be the major growth engine of the group. With a portfolio of various growth initia- tives, it will balance sustainability, risk, and returns and strengthen resilience against market dynamics. The C&M strategy has significant growth and value creation potential. Total organic investments in Chemicals & Materials will average EUR 0.9 bn p.a., EUR 0.3 bn p.a. of which will be allocated to sustainable and CO2 emissions reduc- tion projects. Refining & Marketing 2030 strategic priorities ▸ Reduce crude distillation throughput by 2.6 mn t while growing the production of renewable mobility fuels and sustainable chemical feedstocks to ap- proximately 1.5 mn t ▸ Produce and market at least 700,000 t of sustaina- ▸ Invest in a EV charging network and significantly in- ble aviation fuels crease margin contribution from Retail non-fuel business ▸ Significantly reduce absolute Scope 1, 2, and 3 emissions Going forward, R&M is reshaping its product portfolio, building on renewable mobility fuels and sustainable chemical feedstocks. The company is focusing on safe, innovative, and ecologically and economically sustaina- ble operations. As a result, R&M will enable transfor- mation to low-carbon operations and sales while main- taining strong profitability. European fossil refining market potential will decrease significantly up to 2030, as both volumes and refining margins are expected to be under pressure driven by the pace of the energy transition in Europe. In the same time horizon, strong growth will materialize for renewa- ble mobility fuels as well as sustainable chemical feed- stocks. Refining will proactively decrease crude oil dis- tillation throughput in the Schwechat and Burghausen refineries, from 12.9 mn t in 2019 to approximately 10.3 mn t in 2030, in line with changing demand pat- terns. This adaptation will significantly reduce heating oil and diesel product output by 2030, while increasing the chemical yield to around 24% for the Western refin- eries. To leverage the opportunities of the ongoing en- ergy transition, the refining division is developing a sus- tainable production portfolio for renewable fuels and sustainable chemical feedstocks, such as the co-pro- cessing of biogenic feedstocks in Schwechat, reaching approximately 1.5 mn t in total by 2030. In this context, the sourcing of bio-feedstocks will be a critical success factor. OMV will optimize the interface between oil and chemi- cals with a focus on the integrated Schwechat and Burghausen sites by reconfiguring plants and sites to maximize high-value fossil resources and a growing share of sustainable feedstocks for chemicals produc- tion. OMV will continue to operate its three European refineries in Austria, Germany, and Romania as one in- tegrated system, optimizing asset utilization and max- imizing margins. Furthermore, the company is imple- menting energy and operational efficiency measures within the existing refinery assets to maintain a leading cost position in Europe. OMV’s goal with its international, non-operated refining positions in UAE (ADNOC Refining) and Pakistan (PARCO) is to improve their commercial performance. The focus in the short to mid-term will be on operational 31 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT excellence as well as performance culture at each asset. In the mid- to long-term, OMV will evaluate commercial options for the production of sustainable mobility fuels and assess strategic options for capital reallocation. The Marketing & Trading activities in Europe secure OMV’s customer and market access. In line with chang- ing demand patterns, as well as regulatory obligations, OMV will gradually transform its product portfolio to in- clude more sustainable fuels and services by 2030, thereby increasing the resilience of its product mix. OMV will build a growing business for sustainable avia- tion fuels (SAF) in central Europe by establishing new market positions in the vicinity of planned production sites, such as in Belgium and in Romania. OMV Mar- keting & Trading will market at least 700,000 tons of SAF by 2030. OMV will aim to grow SAF sales volumes significantly beyond the planned regulatory framework and will target the growing voluntary compliance mar- ket. Simultaneously, Marketing & Trading will sustain its position of bitumen and marine fuel oil to safeguard re- finery utilization, while continuing to evolve these prod- ucts to lower GHG emissions. In Retail Mobility & Convenience, OMV intends to further develop existing market potential by significantly growing the non-fuel business sector. New gastronomy and ser- vice concepts, as well as cooperation in the food logistics sector, are expected to significantly increase the volume and margin of the non-fuel business by 2030. In parallel, the company will further increase its premium fuel share to more than 30% as a differentiator and significant mar- gin generator by 2030. OMV Retail Mobility & Conven- ience will expand into e-mobility, building a leading posi- tion in out-of-home Electric Vehicle (EV) charging loca- tions such as highway and transit refilling stations, as well as convenience hubs. With a total investment in this segment of more than EUR 400 mn by 2030, OMV will grow the profitability of the retail business as well as monetize the value of its assets. Total organic investments in the R&M business will av- erage at EUR 1 bn p.a. in 2022–2030, EUR 0.5 bn p.a. of which will be allocated to sustainable and carbon emissions reduction projects. With this new strategy, OMV will accelerate attainment of its goal of lowering GHG emissions by reducing fos- sil fuels, stepping up the production and marketing of renewable fuels and sustainable chemical feedstocks, as well as implementing energy efficiency measures. Exploration & Production 2030 strategic priorities ▸ Portfolio managed as a robust cash generator to ▸ Production of at least 450 kboe/d is expected by support the Group’s transformation 2025 and below 400 kboe/d by 2030, with an over- weight on gas1 ▸ Production cost below USD 7/boe ▸ Low-carbon business solutions developed, with around 10 TWh in renewable energy (e.g., geother- mal) and 5 mn t p.a. CCS, to significantly reduce absolute and relative GHG emissions ▸ Portfolio optimization measures will be evaluated In the context of the ongoing energy transition and to support OMV Group’s transformation, E&P will be man- aged as a robust cash generator and will focus on fur- ther upgrading its competitive asset portfolio, concen- trating on the four core regions: Central and Eastern Europe, the North Sea, Middle East and Africa, and Asia Pacific. The shift of the hydrocarbon portfolio to gas will continue, with further divestment of non-core positions to improve efficiency, while the low-carbon business will be ramped up to achieve a material contri- bution by the end of the decade. Boosting value delivery and cash generation are the main goals and criteria for managing and developing the portfolio of oil and gas assets, with a strong empha- sis on gas. The delivery over the mid-term of key pro- jects in the portfolio such as the Neptun Development in Romania, Jerun in Malaysia, and Umm Lulu SARB Phase 2 plateau extension in the UAE will support strong cash generation by and beyond 2025. With the current portfolio, OMV expects to maintain production levels of at least 450 kboe/d, with around 60% gas by 2025.1 Thereafter, OMV expects to reduce its oil and gas production levels to below 400 kboe/d by 2030, keeping the overweight on gas.1 The production decline will occur primarily in the second part of the decade, as no new large-scale projects (re-)developments are be- ing pursued. In order to sustain the above-mentioned production levels, ramp up the low-carbon business, and deliver strong cash generation, E&P anticipates a total annual average CAPEX over the decade of around EUR 1.6 bn, EUR 0.6 bn of which is earmarked 1 The contribution from Russia is estimated to be around 80 kboe/d in 2025 and to be around 40 kboe/d in 2030. In light of the latest developments, OMV decided not to pursue any future investments in Russia and initiated a strategic review of the interest in Yuzhno Russkoye, including the possibility to divest. As a result, Russia is no longer considered one of OMV's core regions. Any potential impact from this strategic review is not reflected in this target. 32 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT for low-carbon activities. OMV’s exploration and ap- praisal activities are being streamlined further, and the total annual average budget is expected to be around EUR 0.2 bn over the decade. Toward the end of the decade, oil and gas CAPEX and E&A expenditures will be reduced, thereby allowing for more capital to be allo- cated toward ramping up the low-carbon business and the broader OMV transformation. E&P plans to reinforce the competitiveness of its portfo- lio and resilience against market volatility amid the rap- idly changing demands of the oil and gas industry. The strong focus on operational excellence, fostered by dig- italization and agile ways of working, in addition to port- folio optimization, will ensure that production cost re- mains below USD 7/boe beyond 2025. The Gas sales business and logistics excluding OMV Petrom will be consolidated in the E&P business starting 2022. Over the next decade, European production will decline, while demand is expected to remain resilient. To close the supply-demand gap, OMV will continue to com- plement its own natural gas production in Norway, Aus- tria, and Romania with long-term gas supply contracts from Russia and is working to identify and develop addi- tional sources of supply. The equity gas contribution to the Gas sales business will decrease significantly toward the end of the decade in Northwestern region due to nat- ural fields decline, and will largely be replaced with green gases, such as biogas and hydrogen, primarily obtained through trading, to reduce the carbon intensity of its product portfolio. New equity gas volumes from the Ro- manian Neptun project will keep volumes high in the Southeastern region. OMV will also aim to direct an in- creasing share of its natural gas sales to customers from non-energy sectors, such as the chemicals industry, to further reduce its Scope 3 portfolio emissions. The Group will explore a range of opportunities and portfolio choices that enhance cash flow generated by the current Exploration and Production business and support a potential accelerated transition to sustainable fuels, chemicals, and materials. These opportunities may include capturing the full value potential of the as- set base, e.g., low carbon business potential, maintain- ing reservoir production excellence and optimizing costs as well as assessing and developing joint venture opportunities for selected assets without excluding inor- ganic options. To reduce its operations carbon footprint, E&P will pur- sue the phase out of routine gas flaring and venting, re- duce fugitive methane emissions, and introduce portfo- lio optimization measures. In addition, renewable en- ergy projects will also be pursued for the purpose of powering OMV’s own operations, such as the photovol- taic plant developed with VERBUND in Schönkirchen, Austria. To achieve overall reduction of both absolute and relative GHG emissions from its product portfolio, E&P will leverage its existing asset base and core skills to deliver financially strong low-carbon business pro- jects. Available opportunities will be captured to build up geothermal heat capacity that generates up to 9 TWh p.a. by 2030. In addition to geothermal, a mini- mum of 1 TWh from renewable power will be devel- oped in OMV core regions with favorable sun and wind conditions to serve captive demand, thereby reducing Scope 2 emissions by OMV’s own operations. E&P will further tap its existing reservoirs and (sub-)surface ca- pabilities to implement opportunities that lead to a CCS storage capacity of approximately 5 mn t p.a. of CO2 net to OMV by 2030. In addition, further opportunities where E&P can leverage its strengths and capabilities are being explored, e.g., hydrogen and energy storage, and will potentially be pursued in consideration of OMV strategic priorities. Decarbonization strategy 2030 strategic priorities ▸ Reduce OMV Group Scope 1 and 2 emissions by ▸ Reduce OMV Group Scope 3 emissions by 20% ▸ Reduce OMV Group’s carbon intensity of energy 30% supply by 20% OMV is committed to achieving net-zero emissions (Scopes 1, 2, and 3) by 2050, with interim targets for 2030 and 2040. OMV is awaiting the publication of the science based targets (SBT) methodology for the oil & gas sector to evaluate its new targets against the SBT requirements with the ultimate ambition to get them ap- proved by the Science Based Target initiative (SBTi). OMV targets are set at an absolute and intensity level with the ultimate goal of achieving net-zero emissions in Scopes 1, 2, and 3 by 2050. For Scope 1 and 2, OMV aims for an absolute reduction of 30% by 2030 and of 60% by 2040. For the defined categories in Scope 3, OMV aims at the reduction by 20% by 2030 and by 50% by 2040. In terms of reducing the carbon intensity of energy supply, OMV intends to achieve a decrease of 20% by 2030 and 50% by 2040. These emission reductions can only be achieved with considerable effort and capital allocated: The Group has earmarked organic investments of more than EUR 13 bn for this purpose. All business units will build on their existing strengths and know-how on this transfor- mation journey. Three key initiatives will be undertaken to achieve the targeted reductions by 2030: 33 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT ▸ Decrease in fossil fuel sales: Significant decrease in fossil fuels and a less steep decline in natural gas sales ▸ Increase in zero-carbon energy sales: significant in- crease in sustainable and biobased fuels, green gas sales, build-up of photovoltaic electricity capac- ity for captive use as well as geothermal heat ▸ Increase in Chemicals & Materials recycling and sus- tainable feedstocks and delivery of approximately 2 mn t p.a. of circular products: recyclate production substituting fossil chemicals and materials production and production from biogenic feedstock Besides these efforts, neutralization measures will be necessary. OMV anticipates that it will use 5.0 mn t of CCS capacity across all business units. All energy pur- chases will be 100% renewable. The inorganic growth of the Chemicals & Materials business will be executed in line with OMV decarbonization targets with either de- carbonization pathways in place or to be implemented following a possible acquisition. Finance 2030 strategic priorities ▸ Generate operating cash flow excluding net working capital effects of EUR ~6 bn by 2025 and EUR ≥7 bn by 2030 ▸ Target a ROACE ≥12% in the mid- and long term ▸ Ensure sound capital allocation priorities: organic CAPEX, dividend, inorganic growth, and deleverag- ing1 ▸ Maintain strong balance sheet, with a mid/long-term ▸ Continuously deliver on the progressive dividend leverage ratio below 30% policy The Group’s financial strategy aims to increase the company’s value and shareholder return, while ensur- ing a robust balance sheet, along with a financially re- silient portfolio that thrives in a low-carbon world and has attractive growth potential well into the future. The value-driven finance strategy operates on a clear framework for enabling long-term profitable and resili- ent growth and aims to achieve a ROACE of at least 12%, positive free cash flow after dividends, a strong balance sheet, with a mid/long-term leverage ratio of below 30%, a Clean CCS Operating Result of at least EUR 5 bn by 2025 and EUR 6 bn by 2030, increasing clean CCS net income attributable to shareholders, op- erating cash flow excluding net working capital of around EUR 6 bn by 2025 and at least EUR 7 bn by 2030, as well as a progressive dividend policy. When building its financial plan, OMV set a sound capi- tal allocation policy: first, investing in its organic portfo- lio; second, paying attractive dividends; third, pursuing inorganic spending for an accelerated transformation; and fourth, deleveraging1. In its capital allocation, the Group focuses on selecting the most competitive and resilient projects. The defined investment criteria in- clude hurdle rates and payback periods by business re- flecting respective risk and return profiles, as well as testing projects for their resilience and break-even ver- sus relevant market KPIs. To achieve its strategic goal, OMV plans a yearly or- ganic CAPEX around EUR 3.5 bn for the period from 2022 to 2030. Overall, the Group is allocating more than EUR 13 bn, in total, for 2022–2030 to achieve its ambitious decarbonization targets. In addition, OMV will consider inorganic growth in areas of strategic im- portance. However, this will depend on the Group’s in- debtedness headroom. Moreover, the Group’s portfolio of assets can provide options through divestments to accelerate strategy execution when attractive acquisi- tion targets in targeted growth areas become available. The Group’s strategy, supported by disciplined capital allocation, will enable OMV to generate increasing and resilient cash flows and higher earnings. These solid fi- nancials ensure a strong balance sheet for the Group. In its financial framework, OMV has made a significant commitment to ensuring a robust balance sheet and a investment-grade credit rating. The Company aims to achieve a leverage ratio of below 30% for mid- and long term. Depending on portfolio measures, the lever- age ratio can exceed 30%, however this will then be followed by a deleveraging program to ensure the bal- ance sheet is strengthened. During the strategy period, OMV will continue to deliver on its progressive dividend policy. The Group therefore aims to increase the dividends every year, or to at least maintain dividends at the respective previous year’s level. This underlines the Group’s commitment to its progressive dividend policy. 1 Depending on the leverage ratio of OMV, the order between inorganic growth and deleveraging can reverse. 34 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Sustainability We are committed to building a sustainable world worth living in – for everyone. Sustainability and circu- larity lie at the center of our Group strategy. We aim to become a net-zero business by 2050, accelerate the energy transition, and proactively expedite the transition from a linear to a circular economy. We build positive relationships with our employees, communities, suppliers, and other stakeholders, including by addressing social and economic effects of the transition to an environmentally sustainable economy. Our Sustainability Framework is built around the three pillars Environmental, Social, and Governance (ESG). Our Strategy 2030 is underpinned by this sustainability framework, with all business decisions being informed by our ambition to become a net-zero business. Within this sustainability framework, we have established five strategic focus areas: Climate Change; Natural Re- sources Management; Health, Safety & Security; Peo- ple; and Ethical Business Practices. For each of these focus areas, we have formulated concrete commit- ments, targets, and actions to be achieved by 2030, which mark OMV’s contribution to the UN 2030 Agenda for Sustainable Development. OMV’s sustainability targets and commitments Climate Change ▸  Commitments: ▸ OMV continuously improves the carbon effi- ciency of its operations and product portfolio. OMV is fully committed to supporting and accel- erating the energy transition, and aims to be- come a net-zero business by 2050 or sooner. by ≥30% vs. 2010 ▸ Targets 2025: ▸ Reduce carbon intensity of operations (Scope 1) ▸ Reduce carbon intensity of product portfolio ▸ Achieve at least 1 m t CO2 reductions from oper- ▸ Achieve an E&P methane intensity of 0.2% or (Scope 3) by >6% vs. 2010 ated assets in 2020–2025 lower ▸ Zero routine flaring and venting of associated gas as soon as possible, however, no later than 2030 ▸ Targets 2040: ▸ Reduce Scope 1 and 2 emissions by ≥60% vs. ▸ Reduce Scope 31 emissions by ≥50% vs. 2019 ▸ Reduce carbon intensity of energy supply by 2019 ≥50% vs. 2019 Natural Resources Management ▸ Commitments: ▸ OMV is fully committed to taking action on re- sponsible natural resources management and will proactively expedite the transition from a lin- ear to a circular economy. ▸ OMV aims to minimize environmental impacts by preventing water and soil pollution, reducing emissions, efficiently using natural resources, and avoiding biodiversity disruption. tions ▸ Targets 2025: ▸ Triple volume of recycled polyolefins to 350 kta ▸ Increase waste reuse and recycling from opera- ▸ Reduce freshwater withdrawal ▸ Targets 2030: ▸ Produce approx. 2,000 kta sustainable (includes ▸ Reduce natural resources use by cutting oil and recycled and biobased) polyolefins 2019 ▸ Targets 2030: ▸ Reduce Scope 1 and 2 emissions by ≥30% vs. ▸ Reduce Scope 31 emissions by ≥20% vs. 2019 ▸ Reduce carbon intensity of energy supply by ▸ Achieve an E&P methane intensity of 0.1% or ≥20% vs. 2019 gas production levels to below 400 kboe/d and by reducing crude distillation throughput by 2.6 mn t ▸ Increase reuse and recycling of waste from op- ▸ Reduce freshwater withdrawal erations lower 1 The following scope 3 categories are included: category 11 – Use of sold products for OMV’s energy segment, category 1 – Purchased goods (feedstocks), and category 12 – End of life of sold products for OMV’s non-energy segment. 35 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Health, Safety, and Security ▸ Commitments: ▸ Health, safety, and security have the highest pri- ority in all activities. OMV is fully committed to proactive risk management in realizing its HSSE vision of “ZERO harm – NO losses.”. ▸ Targets 2025: ▸ Achieve a Total Recordable Injury Rate (TRIR) ▸ Achieve zero work-related fatalities ▸ Maintain leading position in Process Safety of around 1.0 per 1 mn hours worked Event Rate ▸ Targets 2030: ▸ Stabilize the Total Recordable Injury Rate ▸ Achieve zero work-related fatalities ▸ Maintain leading position in Process Safety (TRIR) at below 1.0 per 1 mn hours worked Event Rate to 30% (stretch target 30%) ▸ Targets 2030: ▸ Increase share of women at management level ▸ Min. 20% female Executive Board members ▸ Increase share of international management to ▸ Keep share of executives with international ex- ▸ Increase average number of annual learning ▸ Increase support for employees with disabilities ▸ Conduct Human Rights Assessment in high-risk hours to a min. of 30 hours per employee at our main locations perience at 75% 65% country business for all OMV Group operations and develop action plans every five years ▸ Direct at least 1% of Group investment per year toward social goals (based on previous year’s reported net income attributable to stockholders of the parent) by 2030 People ▸  Commitments: ▸ OMV is committed to building and retaining a tal- Ethical Business Practices ▸ Commitments: ▸ OMV strives to uphold equally high ethical ented expert team for international and inte- grated growth. We embrace our difference(s) and use our diversity of thought and experience as a catalyst for growth and creativity. ▸ OMV is committed to ensuring fair treatment and equal opportunities for all employees, and has zero tolerance for discrimination and harassment of any kind. ▸ As a signatory to the United Nations Global Compact, OMV is fully committed to the UN Guiding Principles on Business and Human Rights, and aims to contribute to the UN’s 2030 Agenda for Sustainable Development by pursu- ing a social investment strategy that addresses local needs and the SDGs. ▸ OMV is committed to contributing to a Just Tran- sition for our employees and communities, and addressing social and economic effects of the transition to an environmentally sustainable economy. to 25% ▸ Targets 2025: ▸ Increase share of women at management level ▸ Keep high share of executives with international ▸ Train all OMV Group employees in human rights ▸ Assess Community Grievance Mechanism of all experience at 75% sites against UN Effectiveness Criteria 36 standards at all locations. We aim to earn our stakeholders’ confidence by implementing a high standard of corporate governance and by main- taining high standards of transparency and pre- dictability. ▸ OMV is committed to implementing sustainable procurement, which means caring about the en- vironmental, social, and economic impacts of the services and goods the Company intends to pur- chase. ▸ Targets 2025: ▸ Be an active member of TfS and run sustainabil- ity evaluations for all suppliers covering >80% of Procurement spend ▸ Engage with suppliers covering 80% of Procure- ment spend and assess their carbon footprint as a foundation to define and run joint low-carbon initiatives ▸ Promote awareness of ethical values and princi- ples: conduct in-person or online business ethics trainings for all employees ▸ Targets 2030: ▸ Extend sustainability evaluations to all suppliers ▸ Ensure all suppliers covering >80% of Procure- covering 90% of Procurement spend ment spend have carbon reduction targets in place OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Climate Change OMV recognizes climate change as one of the most im- portant global challenges and fully supports the goals set forth by the Paris Climate Change Agreement. OMV integrates risks and opportunities related to climate change impacts into the development of the Company’s business strategy and the planning of operational activ- ities. In this regard, OMV continuously improves the carbon efficiency of its operations and product portfolio, and is fully committed to supporting and accelerating the energy transition. We aim to become a net-zero business by 2050 or sooner. OMV implements measures aimed at optimizing its op- erational processes, increasing energy efficiency, re- ducing flaring and venting, and reducing methane emis- sions through leakage detection and improvement of asset integrity. We will continue phasing out routine flaring and venting as soon as possible, but no later than 2030, as part of OMV’s commitment to the World Bank’s “Zero routine flaring by 2030” initiative. For in- stance, in Yemen, one of our most flaring-intense oper- ations, we commissioned two gas engines for power generation at the central processing facilities in Decem- ber 2021. The gas engines will support the reduction of flaring as they will consume gas which was previously flared. They will also replace diesel generators, which further reduces GHG emissions. We are also increas- ingly turning to renewable sources of electricity to power our operations. In 2021, Borealis installed its first solar photovoltaic rooftop array for generating electricity for production purposes at the Borealis plant in Monza (Italy). The company has also signed long-term renew- able energy supply deals for its assets in Sweden and Belgium. A cornerstone of our climate strategy is increasing the share of zero-carbon products in our product portfolio as well as decreasing fossil fuel sales. Oil and gas pro- duction will be decreased to below 400 kboe/d by 2030. OMV focuses on high-quality refinery products such as low-emission premium fuels and feedstocks for the chemical industry. We aim to increase polyolefins recy- cling and gradually replace fossil polyolefins production with production from biogenic feedstock. In addition, we also plan to significantly increase sustainable and bi- obased fuels and green gas sales, as well as build up renewable electricity production to around 10.0 TWh (including geothermal, solar/wind). We aim to step up the production of renewable fuels and sustainable chemical feedstocks to approximately 1.5 m t per year, including producing and marketing at least 700,000 t of sustainable aviation fuels per year. For instance, OMV and Austrian Airlines (AUA) are pro- ducing and using regional Sustainable Aviation Fuel (SAF) in Austria. The two companies agreed on the production and fueling of 1,500 t of SAF in the coming year 2022. The use of 1,500 t of SAF by Austrian Air- lines will reduce carbon emissions by around 3,750 t. This is equal to the CO2 emissions of 333 Vienna–Lon- don flights with a typical short to medium-haul AUA air- craft (Airbus A320). Our climate targets can only be achieved with consider- able effort and capital allocation. OMV Group has ear- marked investments of more than EUR 13 bn for this purpose. All business units will build on existing strengths and expertise in this transformation journey. In 2021, OMV achieved an outstanding CDP Climate Change score of A– (Leadership) for the sixth time in a row. With its CDP Climate Change score, OMV is among 20 companies in the global oil and gas sector that achieved a leadership score and among the top 7 companies across all sectors in Austria. Business principles and social responsi- bility performance Business ethics and compliance OMV is a signatory to the UN Global Compact and has a Code of Business Ethics in place that applies to all employees. Although we are headquartered in Austria – a country with high business ethics standards – we operate in several countries in the Middle East, North Africa, Asia-Pacific, and Central and Eastern Europe that are defined as high risk by the Transparency Inter- national Corruption Perception Index. We strive to avoid the risks of bribery and corruption that are spe- cific to our sector. We also highly value our reputation. Therefore, our highest priority is ensuring uniform com- pliance with our business ethics standards wherever we operate. Compliance with ethical standards is a non-negotiable value that supersedes any business in- terest. Absolute commitment to this objective is embed- ded at all levels at OMV from top management to every employee. Our business partners are also expected to share the same understanding of and commitment to ethical standards. Every Company activity, from plan- ning business strategy to daily operations, is assessed for compliance with ethical standards, such as the Code of Conduct and Code of Business Ethics. A dedicated cross-regional compliance organization en- sures that OMV standards are consistently met across the Group. In 2021, 16,020 OMV Group employees were trained in business ethics. This number is com- 37 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT posed of 9,020 e-learnings and 477 face-to-face train- ings at OMV, and 5,996 CodeOne e-learnings and 527 in-person trainings at Borealis. The Integrity Platform provides an anonymous whistleblower mechanism for OMV employees and external stakeholders, such as suppliers. They can use this platform to report issues relating to corruption, bribes, conflicts of interest, anti- trust law, or capital market law. In 2021, the scope of the Integrity Platform was expanded, and the platform can now also be used to make reports of perceived vio- lations in the following legal areas: public procurement, environmental protection, product and food safety and consumer protection, corporate tax regulations, and data protection. Supplier Compliance Implementing sustainable procurement means caring about the environmental, social, and economic impacts of the goods and services the Company intends to pur- chase. OMV has a Code of Conduct in place that en- sures that suppliers support OMV’s principles. It is of paramount importance to our organization to be fully compliant with all applicable legal requirements, as well as with our internal safety, environmental protection, and human rights standards while managing our supply chain. OMV has a process in place to ensure that par- ties sanctioned by the EU or international organiza- tions, such as the United Nations, are not accepted as procurement partners. To mitigate supply chain risks including forced labor, slavery, human trafficking, and corruption, OMV im- poses the legal requirements and internal rules and standards applicable to OMV on its suppliers. Our sup- pliers and supply chain partners are obligated to sign and fully comply with the content of the Code of Con- duct. In addition, our suppliers must accept the General Conditions of Purchase, which further detail our busi- ness standards (e.g., labor rights), as an integral part of our contractual agreements. OMV reserves the right to terminate relationships with suppliers if non-compliance is discovered or not addressed in a timely manner. Supplier prequalification is a part of pre-contractual ac- tivities during which OMV collects information from a potential supplier for the purpose of evaluating compli- ance with our HSSE and other sustainability require- ments. The goal of the prequalification process is to screen potential suppliers before bringing them on board or during the tender stage to ensure that only those suppliers who meet our HSSE and sustainability standards can be considered for future collaboration. Following prequalification, Procurement together with business representatives select the best suppliers based on a predefined set of commercial, legal, HSSE, and technical criteria during a tender process. In 2021, we started embedding sustainability elements into the evaluation matrix (e.g., technologically innovative ele- ments, carbon emissions, energy efficiency KPIs) in several pilot projects. OMV conducts supplier audits as part of the prequalifi- cation process and/or during contract execution. The aim of the audits is to measure the performance of our suppliers and define actions that will enable them to op- timize their performance and meet OMV requirements. Among the focus areas of the audits are the financial stability of our suppliers, their strategy and organiza- tion, and the supply chain sustainability (e.g., human rights, carbon management, environmental manage- ment, certifications, and social responsibility). In 2021, we added a new cybersecurity dimension to our sup- plier audits. We also perform yearly subject-specific au- dits on topics such as process safety, quality, and effi- ciency. In 2021, OMV joined Together for Sustainability (TfS) and expanded the membership held by Borealis since 2017 to Group level. Together for Sustainability, a joint initiative and global network of 34 chemical companies, sets the de facto global standard for environmental, so- cial, and governance performance of chemical supply chains. The TfS program is based on the UN Global Compact and Responsible Care® principles. OMV aims to build on Borealis’ expertise and cover a broader range of ESG assessments of our suppliers in the coming years. Becoming a TfS member will help OMV to further embed sustainability in day-to-day busi- ness operations and cascade sustainability require- ments in our supply chain. We aim to continuously manage and decrease the car- bon emissions of our purchased goods and services. For this reason, OMV became a CDP Supply Chain member in 2021. As part of CDP Supply Chain, OMV invited around 140 suppliers to answer the CDP Cli- mate Change questionnaire in 2021. In addition to re- porting their emissions, we asked the suppliers whether they have carbon reduction targets in place and invited them to share with us any initiatives or projects to re- duce carbon emissions in which they would like us to participate. A total of 63% of suppliers assessed by CDP Supply Chain have declared that they have cli- mate targets in place. 38 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Community Relations and Development OMV maintains an active partnership with local commu- nities in all countries in which the Company does busi- ness and is committed to adding value to these socie- ties. As part of OMV’s stakeholder dialogue, we have implemented community grievance mechanisms at all operating sites. In 2021, OMV registered 884 griev- ances (2020: 812) from the community grievance mechanisms. All of the grievances were handled in ac- cordance with OMV’s localized Community Grievance Management (CGM) procedures, which stipulate a stringent approach to systematically receiving, docu- menting, addressing, and resolving grievances in all of the countries where we operate. OMV has set the goal of aligning the CGM system at all sites with the effectiveness criteria of the United Na- tions Guiding Principles. We are striving to achieve this target by conducting assessments that include reviews of management processes and consultations with inter- nal and external stakeholders. The assessments result in recommendations and tailored action plans to im- prove grievance management at site level. The action plans are implemented by local management and moni- tored by headquarters. The sites already assessed rep- resent 99% of all registered grievances at OMV in 2021.  For more information about OMV’s Environmental, Social, and Governance (ESG) ratings and the indices in which OMV is included, see the chapter OMV on the Capital Mar- kets.  For management approaches and performance details for all material topics, see the stand-alone OMV Sustainability Report. This report also serves as the separate consoli- dated non-financial report of OMV Aktiengesellschaft in ac- cordance with section 267a of the Austrian Commercial Code (UGB). Human Rights Human rights are universal values that guide our con- duct in every aspect of our activities. Our responsibili- ties in the area of human rights include, but are not lim- ited to, equality and non-discrimination, decent wages, working hours, employee representation, security, pri- mary healthcare, labor rights in the supply chain, edu- cation, poverty reduction, land rights, and free, prior, and informed consultation. OMV respects and supports human rights as described in the Universal Declaration of Human Rights and in internationally recognized trea- ties, including those of the International Labour Organi- zation (ILO). We have been a signatory to the UN Global Compact since 2003 and are fully committed to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational En- terprises. We fully support the aims of the UK Modern Slavery Act 2015 and are committed to operating our business and supply chain free of forced labor, slavery, and human trafficking. OMV considers human rights to be an important aspect of our risk management ap- proach, which is integrated into our decision-making processes. OMV recognizes its responsibility to re- spect, fulfill, and support human rights in all business activities and to ensure that OMV does not become complicit in any human rights abuses as defined under current international law. We conduct human rights risk assessments at country level to identify and assess ongoing and emerging hu- man rights impacts and the resulting potential risks rel- evant to OMV business activities in the country in order to prevent and mitigate human rights risks and impacts. A total of 980 employees received training on human rights topics through the e-learning tool and in-person training sessions (2020: 2,304). As professional training is essential to ensure compliance with our human rights commitment, we have set ourselves the goal of training all employees in human rights topics by 2025. In addi- tion, internal awareness campaigns on human rights were implemented. In 2021, seven incidents of human rights grievances were reported (2020: 0), related to aspects such as working hours and rest times and al- leged cases of bullying, harassment, defamation, unfair treatment and disrespectful behavior. 39 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Health, Safety, Security, and Environment Health, safety, security, and protection of the environment are key values at OMV. The integrity of OMV’s operating facilities, loss prevention, proactive risk management, and climate change mitigation are essential for attaining OMV’s HSSE vision of “ZERO harm – NO losses.” The HSSE performance of Refining & Marketing in 2021 was overshadowed by a road accident resulting in a fatality of a contractor employee. Efforts therefore went into a broad awareness campaign about road transportation safety and the development of an en- hanced framework of safety requirements for future lo- gistics contractors. Another focus area was the imple- mentation of the process safety roadmap including two external process safety management assessments in the refineries. We encountered 23 HiPos. The TRIR in 2021 was 0.56 (2020: 0.59). Special emphasis during the year was placed on leadership engagement, safety culture, contractor management, and training on vari- ous emergency and crisis management scenarios. In Chemicals & Materials, OMV Group’s definitions and incident reporting criteria were fully rolled out to Bore- alis. These are more stringent than those used previ- ously. The business division achieved a TRIR of 2.24 (2020, Borealis only: 3.89). Occupational safety initia- tives focused on further rolling out a virtual Life Saving Rules training, preventing employees from becoming infected with COVID-19, and achieving ISO 45001 cer- tification for Borealis. Regarding process safety, the fo- cus was on introducing the Process Safety Rules, start- ing a Quantitative Risk Assessment Study for hydrocar- bon processing activities at Porvoo and developing a concept to improve quality of process hazard assess- ments. Borealis continued the positive downward trend of process safety events from 19 in 2020 to 16 in 2021. OMV Group safety performance In mn hours worked Company Lost-Time Injury Rate Total Recordable Injury Rate Contractors Lost-Time Injury Rate Total Recordable Injury Rate Total (Company and contractors) Lost-Time Injury Rate Total Recordable Injury Rate 2021 2020 0.70 1.18 0.51 0.85 0.57 0.96 0.43 0.83 0.27 0.48 0.32 0.60 HSSE Strategy To achieve this vision, OMV Group’s HSSE Strategy was established as an integral part of the OMV Sustainability Strategy. The HSSE Strategy focuses on the cross-functional goals of strong HSSE commitment and leadership, increased efficiency and effectiveness of HSSE processes, management of HSSE risks, and skilled people, as well as subject matter goals in the areas of grated health management ▸ Health: improve the ability to work through inte- ▸ Safety: build on sustainable safety for people and ▸ Security: protect people, assets, and reputation ▸ Environment: minimize the environmental footprint from emerging malicious intentional threats plants throughout the entire lifecycle of activities Health, safety, and security In 2021, the combined Lost-Time Injury Rate (LTIR) for OMV employees and contractors was 0.57 (2020: 0.32), and our combined Total Recordable Injury Rate (TRIR) was 0.96 (2020: 0.60). We are deeply con- cerned about three work-related fatalities, all three re- lated to road transportation activities of contractor com- panies in Austria and Romania. Managing the COVID- 19 pandemic remained a high priority in 2021 on top of routine HSSE management. We focused primarily on learning from incidents throughout the whole Company: Videos, alerts, and communication campaigns were used to reach out to all employees. In Exploration & Production, the TRIR was 0.92 (2020: 0.58). Tragically, two contractor employees died in two fatal work accidents in 2021. We also encountered 19 High Potential Incidents (HiPos) that could have re- sulted in serious or even fatal injuries under slightly dif- ferent circumstances. All fatalities and HiPos have been thoroughly investigated, and measures were put in place to prevent reoccurrence. Contractor manage- ment was and continues to be a focus area in our HSSE efforts. We continued to focus on process safety management, and various initiatives ensured the relia- bility of production. 40 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Employee wellbeing and health are the foundation for successful company performance as they are core ele- ments of ensuring the ability to work. The year 2021 was dominated by the worldwide COVID-19 pandemic. Our medical teams and service providers were chal- lenged to support the emergency management teams in updating and implementing pandemic preparedness plans, guidelines, and health information while also supporting COVID-19-infected employees at home and in hospitals. In addition, OMV continued its long tradi- tion of offering healthcare and preventive health pro- grams, such as cardiovascular disease prevention pro- grams, voluntary health checks, vaccinations (mainly flu and in some countries COVID-19), and virtual health hours, which far exceed local statutory requirements. During 2021, the COVID-19 pandemic also brought sig- nificant challenges to safety management. At opera- tional level, we implemented preventive and business- continuity-related measures such as strictly separated teams in key areas, hygiene measures, and constant awareness building. Despite travel limitations and thanks to digital communication and collaboration tools, we conducted several key safety-related activities: ▸ We continued broad communication about the Life Saving Rules by means of videos with senior man- agement statements to remind our employees about simple rules to prevent the hazards that have the greatest potential to cause serious injuries. ▸ All incidents at level 3 and above and HiPos were investigated, and lessons-learned reports were communicated throughout the organization. Improvement initiatives were developed and closely monitored with our HSSE reporting tool Synergi. ▸ As part of our Safety Culture program, we con- ducted several workshops on “making HSSE per- sonal” at different levels of the organization. The half-yearly meetings with the program owner were conducted online. ▸ Contractor HSSE management is key to OMV Group’s safety performance. We updated our group-wide regulation and continued training of beneficiaries and procurement staff on the internal regulations framework. We conducted strategic supplier meetings with the main contractors to share information, experience, and expectations. ▸ We further developed a harmonized set of KPIs and a dashboard for process safety. We supported and followed up on the implementation of process safety road maps in our ventures, assets, and refin- eries. In our new Integrated Risk Register, we im- plemented a novel approach for analyzing and pri- oritizing process safety risks in order to ensure that investments effectively lead to a significant reduc- tion of risks. The OMV Group process safety net- work, a large online collaboration platform, grew further (>200 participants), and gathered quarterly to exchange information and experiences in virtual meetings. Senior management also attended. ▸ We undertook a deep analysis and review of 15 group-wide effective HSSE regulations and our cloud-based HSSE reporting tool in order to pre- pare and achieve progress on a systematic align- ment between OMV Group and Borealis. An unstable geopolitical environment combined with complex and enduring regional conflicts remained a consistent security focus throughout 2021. Corporate Security continued to monitor these geopolitical situa- tions, accelerating OMV’s understanding of strategic events, to proactively identify any emergent threat that might intersect with business planning. This included incidents of armed conflict, civil unrest, targeted activ- ism, and criminality at local, national, regional, and in- ternational levels. Our crisis management and resilience procedures as- sisted in the effective management of the COVID-19 pandemic in 2021. Local Emergency Management Teams worked closely with their corporate counterparts to ensure local responses aligned with the Company’s pandemic strategy. We updated our proven security management system in 2021, enabling us to anticipate or respond to a broad spectrum of geopolitical, regional, or isolated security incidents. The security risk assessment platform contin- ued to provide real-time oversight of asset risk expo- sure levels as influenced by geopolitical or security events. Despite various geopolitical and pandemic challenges, Corporate Security continued to deliver global operational support, governance, and oversight, and will maintain a comparable and effective security strategy allowing OMV to operate despite converging asymmetric threats. OMV is committed to upholding human rights in all ac- tivities. To this end, OMV aims to join the Voluntary Principles on Security and Human Rights (VPSHR), an initiative focused on human rights, public safety and se- curity, and the interaction between companies and pri- vate and public security. Corporate Security will under- take a VPSHR pre-qualification review to determine the feasibility of attaining full accreditation in the coming years. 41 ▸ OMV Petrom completed the surface abandonment of 718 wells and 30 facilities in the E&P division. A total of 184,000 t of contaminated soil were treated in our bioremediation plants, and 14,500 t of metal- lic scrap were recycled by authorized companies. ▸ The modernization of the Ghercești tank farm at Asset Oltenia was completed, including the installation of two new tanks with a vapor recovery system. In addition to the optimization of the oil treatment process, environmental impacts were reduced considerably (VOC emissions). The improved water system will save up to 5,000 m³ water per year. ▸ Borealis became a member of the UN Global Com- pact and signed the UN Sustainable Ocean Princi- ples. These commit companies to restoring and maintaining a healthy and productive ocean. More- over, Borealis has initiated Project STOP, a pio- neering program to support cities in developing and emerging countries to establish cost efficient, effec- tive, and more circular waste collection systems. Read more on the Project STOP website. ▸ We continued to implement biodiversity initiatives, such as our green areas project in arid locations in Tunisia. Starting by planting 512 trees in Waha in 2020, we continued expanding to Nawara with 1,200 trees in 2021. The project includes an irriga- tion system. The goal is to provide recreation areas to improve the wellbeing of personnel and visitors, and to promote forestation. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Environmental management Due to the nature of its operations, OMV has an impact on the environment. The Group strives to minimize that impact at all times, particularly in terms of spills, energy efficiency, greenhouse gas (GHG) emissions, as well as water and waste management. OMV aims to opti- mize processes to use natural resources as efficiently as possible and to reduce emissions and discharges. In 2021, there were 3 major hydrocarbon spills (level 3 out of five levels; 2020: 2). The total volume of hydro- carbon spilled increased compared to the previous year. OMV continues to improve its oil spill response preparedness and capabilities. Key environmental actions and achievements in 2021: ▸ Our operations in Yemen implemented new water management plans. The wastewater treatment plants were upgraded, now allowing the treated wa- ter to be used for irrigation in a very arid environ- ment. ▸ At the Schwechat refinery, more than 800,000 m3/year of water, which is equivalent to more than 5% of average annual water consump- tion, are being conserved, most of it from a new control concept for the cooling water in a heat ex- changer group in the ethylene plant. ▸ At the Petrobrazi refinery, the tank modernization program continued with the installation of internal floating membranes or double sealing of six product tanks and the commissioning of one new tank, contributing to the reduction of volatile oganic compounds (VOC). 42 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Employees We know that it is the combined 22,400 employees of OMV who turn the Group’s strategy into results and success. We are proud of the results we have achieved together. Trust and pride in the organization fuel our employees’ energy and determination to tackle challenges and to focus on innovative solutions to make us even stronger. tricks for improving virtual teams through the use of technology. Learning Collections were provided to as- sist employees with leadership during times of crisis as well as managing stress and virtual work. Information and advice are regularly provided on all employee-rele- vant questions. Free psychological support was offered to all employees, enabling them to talk to a professional about coping with the pandemic. Based on the wish ex- pressed by our staff to keep working from home as the “new normal,” a flexible home office policy was intro- duced in 2021. In 2020, we introduced an employee engagement strat- egy whereby we check in with our employees on how they are doing and how they are dealing with the pan- demic situation. With the second OMV quick poll launched at the end of 2021, we wanted to further strengthen the culture of listening in our company and gather feedback on diversity, equal opportunities, and an inclusive environment at OMV. The poll’s findings will play an important part in developing our new Group-wide Diversity, Equity, and Inclusion Strategy for 2030. In 2021, there was a focus on mandatory, legally bind- ing, business-critical, and low-cost learning consisting of e-learning, online learning through our partnership with LinkedIn Learning, and virtual courses/webinars. Leadership training focused on first-time leaders, women in leadership, and managing remote and hybrid teams. Another priority was supporting staff in develop- ing their virtual skills, for example by offering virtual fa- cilitation courses. In terms of business skills, the focus was on sales training and, as before, on graduating new cohorts from our Integrated Graduate Develop- ment (IGD) Program. OMV’s People Strategy In 2021, the COVID-19 situation again required consid- erable additional focus from our organization’s HR function. We continue to build on our strategic priorities to unlock our organization’s full potential and to strengthen the foundation for growth and success: ▸ Increase engagement with employees ▸ Increase organizational agility ▸ Increase focus on diversity and inclusion ▸ Ensure OMV remains a great place to work Highlights of 2021 Our employees once again showed outstanding flexibil- ity and commitment to the Company in this challenging year marked by COVID-19. During the coronavirus pandemic, many new employment-related measures were implemented to protect the health, well-being, and economic situation of our employees. By closely moni- toring the constant legislative output, we succeeded in maintaining full labor law compliance while also offering our staff new options to help with their pandemic-in- duced personal situations and needs. Employees were offered various new solutions (depending on the local jurisdiction) to combine work duties and care obliga- tions more flexibly. All employees were provided the option to work from home where practically and techni- cally feasible. We developed virtual collaboration programs and re- mote leadership capabilities to ensure organizational agility and excellence and to make OMV a great place to work during these challenging times. Our new man- ager training was delivered completely virtually, and a new program called Remote Leadership supported our executives and managers in managing remote teams of employees either working from home or in a different country. OMV’s culture and performance were safe- guarded by growing our leaders’ virtual and remote col- laboration skills. We developed the Working from Home Guide, which is an online guide containing tips and 43 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Number of training participants1,2 Diversity During 2021, OMV continued to be strongly committed to delivering its Diversity Strategy. Dedicated diversity targets were established in 2018 as part of our Sustainability Strategy 2025. This enabled us to set clear commitments in this area and measure improvement in the two main focus areas defined: Gender Equality and Internationality. Our focus on diversity is also being actively nurtured throughout the organization today, supported by a range of trainings, activities, and awareness campaigns, including a Diversity & Inclusion Week held in March and built around International Women’s Day. We also continued our series of online events with external guest speakers on relevant diversity topics such as remote leadership, working across cultures, and the intersection of inclusion and technology. We designed and implemented targeted training pro- grams, such as SHEnergy, a blended-learning program for women at OMV, to support women’s leadership skills. The program focuses on active inclusion skills and also emphasizes the power of mentoring and networking in developing female leaders. As a result, the percentage of women in the Group is about 27% (2020: 25%). A total of 20.9% (2020: 20.7%; excluding Borealis) of employees in management and executive positions are female. Austria Romania/Rest of Europe Middle East/Africa Rest of the World Total 20213 5,632 13,762 709 784 20,887 20204 3,662 10,914 769 699 16,044 Money spent on training per region1 In EUR Austria Romania/Rest of Europe Middle East/Africa Rest of the World Total 20213 2,672,471 5,094,527 342,242 243,485 8,352,725 20204 1,512,514 2,477,244 134,197 225,262 4,349,217 1 Excluding conferences and trainings for external employees 2 Number of employees who received at least one training 3 Excluding DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft., SapuraOMV Upstream, DYM Solutions, MTM, Ecoplast and Rosier 4 Excluding Avanti GmbH, Borealis Group, DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft. Gas Connect Austria GmbH, and SapuraOMV Upstream In 2021, we launched the New Parent Program in Austria focused on equipping future parents with information on parental leave and part-time models, the related long-term financial aspects, and things to consider when returning to work. The program’s target group includes male as well as female employees to encourage more equal distribution of childcare responsibilities. We are working on new HR strategies and a new HR purpose in line with the Company’s new strategy. Over the past year, the HR teams from OMV Petrom, OMV, and Borealis have collaborated increasingly to share best practices and find a common way forward. Great synergies have been unlocked in recruitment, provider sharing (e.g., LinkedIn digital learning), and training programs on the oil, gas, and chemical industries. 44 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Employee key figures At the end of 2021, OMV Group employed 22,434 per- sons. Compared with 2020, the number of employees decreased by 11.30%. Employees Employees by region Austria Rest of Europe Middle East & Africa Rest of the World Borealis Group Total number of employees Diversity Female Male Female Executives Number of nationalities 20211 2020 5,762 15,074 634 964 – 22,434 3,938 12,539 587 974 7,253 25,291 in % in % in % 27 73 152 25 75 153 101 1014 1 Regional split available for OMV Group including Borealis as of January 1, 2021 2 Executives include OMV Senior Vice Presidents and OMV Petrom and Borealis Group Board members 3 Excluding Avanti GmbH, Borealis Group, DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft. Gas Connect Austria GmbH, and SapuraOMV Upstream 4 Excluding Avanti GmbH, DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft. Gas Connect Austria GmbH, and SapuraOMV Upstream 45 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT OMV Group Business Year In 2021, OMV recorded a clean CCS Operating Result of EUR 6.0 bn, representing the highest clean CCS Operating Result in OMV’s history. Furthermore, an all-time record cash flow from operating activities excluding net working capital effects of EUR 8.9 bn was achieved, leading OMV to a whole new level of cash generation. As a consequence organic free cash flow before dividends came in at EUR 4.5 bn, stemming from a strong operational performance coupled with a positive market environment. Business environment After the exceptional situation in 2020 marked by COVID-19, the world developed along a solid economic recovery path. Nevertheless, the year was shaped by unequal vaccination access and differing vaccination rates, new and more infectious COVID-19 mutations (Delta and Omicron), recurring regional lockdown peri- ods, and strong economic policy support. Many raw materials and commodities were impacted by global supply and demand disruptions, leading to ex- ceptionally tight markets and significantly elevated prices. After more than seven years, inflation reached new highs and raised concerns about loose monetary policy and interest rates. In 2022, significant uncertainty remains, and the global pandemic will continue to have an adverse effect on the economy. Climate change and global decarbonization policies gained more political momentum, showing the need for a smooth energy transition in the mid to long run. Global economic output increased by 5.9% in 2021 (– 3.1% in 2020), surpassing pre-crisis levels based on a strong economic recovery in Asia. All sectors reliant on contact-intensive interactions (tourism, travel, hospitality, culture, and entertainment) recovered partly but remained adversely affected. Employment in advanced economies was strongly impacted by short- to medium-term containment measures but recovered nearly fully to 2019 levels thanks to strong economic policy support. Global trade rebounded by more than 9% in 2021 (after –8.2% in 2020). Developments were influenced by sub- stantial distortions along global supply chains with ex- traordinary implications on industrial production and trade in various sectors. The varying regional speed of pandemic waves has led to huge disparities in economic performance on differ- ent continents. In Europe, the economic recovery path was significantly impacted by containment effects with Eurozone’s gross domestic product (GDP) increasing by 5.2% in 2021 (after –6.4% in 2020) but still lagging behind pre-crisis levels. In the emerging and develop- ing Asian countries, this figure grew by 7.2% (after – 0.9% in 2020), especially due to rigorous vaccination, quarantine, and contact tracing measures and enabled a return to pre-crisis growth levels. The economic environment in Central and Eastern European countries kept pace with the EU average, with GDP increasing between 2.7% (Germany) and 7.2% (Croatia), mostly above 2019 levels. The difference in GDP growth rates can also be attributed to the differing regional duration and scale of lockdowns and sector composition in country’s GDP. Massive government spending in all countries supported the economic recovery, however this increased national debt to record levels. Germany’s GDP increased by 2.7% in 2021. This was the result of domestic COVID-19 restrictions as well as disruptions in raw material imports impacting the indus- try sector (especially the automotive industry). In Aus- tria, GDP grew by 4.1% in 2021 amid stronger lock- down restrictions and the affected tourism and service sectors accounting for a larger share of the economy. Romania’s economy expanded by 6.8% based on the recovery of the industrial sector and the continued strengthening of the service sector (especially retail, transportation, and information and telecommunica- tions). Inflation rates have increased rapidly worldwide. Euro- zone inflation stood at an average of 2.2% in 2021 and showed monthly peaks in the fourth quarter of 2021, while US inflation rose to levels around 7% at the end of 2021. In most cases, rising inflation reflects pan- demic-related supply/demand mismatches and higher commodity prices compared to their low baseline from a year ago. In 2021, global oil demand recovered by 5.6 mn bbl/d. However, it is still 3% below 2019 levels. As a result of the continental divergence of COVID-19 pandemic waves, the Asian continent has already surpassed pre- crisis level in 2021, in contrast to many other countries, which remain below 2019 levels. European oil demand grew by 0.7 mn bbl/d in 2021.All major oil products saw growth in 2021 as soon as COVID-19 containment re- strictions were eased. Road transportation fuels, includ- ing gasoline and gasoil/diesel increased by around 3.1 mn bbl/d globally and jet fuel/kerosene recovered slowly by 0.5 mn bbl/d with air travel and mobility re- strictions still in effect. It will take at least until 2022 for 46 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT (+ 3.2% compared to 2020), with demand for fuels up and demand for heating oil decreasing due to the re- bounding price levels and declining stocks. The Roma- nian oil product market grew faster than the EU aver- age by 7.4% compared to 2020. Low commodity prices and an unstable financial and li- quidity environment continued to trigger reduced oil and gas investments in 2021 (approximately –30% com- pared to 2019). This trend will most likely have to be compensated for in the coming years to ensure the re- quired oil and gas production for covering future global oil demand. Global demand for natural gas recovered above pre-cri- sis levels in 2021. However, the global natural gas sup- ply (mainly LNG exports) continued to rise significantly, stimulated by an investment cycle in recent years. In the first half of 2021, Asian demand exceeded expecta- tions due to a cold winter and a strong economy, and led to tight markets globally. In Europe, gas prices soared to new levels of around EUR 40/MWh during the summer period. The combination of low storage volumes and tight supply conditions to Europe esca- lated during autumn and led to record natural gas prices of EUR >180/MWh before year-end. Moreover, Nord Stream 2, a new supply corridor to Europe, has not been put into operation. Overall, the average CEGH gas price was roughly EUR 46/MWh 2021. In Austria, natural gas demand grew by 7.3% in 2021, while natural gas imports and domestic production dropped by –8.5% and –11.5%, respectively. This was compensated for by higher storage withdrawal rates (+50%), in particular due to a temporary cold spell in late spring. jet demand to return to 2019 levels when global tourism fully recovers. Increasing oil output kept pace with the global demand recovery, helped by a clear steer of the OPEC+ alli- ance. OPEC+ member states agreed to a stepwise nor- malization of oil production throughout 2021, which was implemented with a high production compliance rate and supported by geopolitical constraints in some countries. Most of OPEC supply growth came from Saudi Arabia and Libya, which rapidly increased pro- duction after domestic constraints. US crude oil produc- tion was up slightly in 2021, however, a production time lag following an increasing rig count is expected to ma- terialize in 2022 (still limited by shareholder expecta- tions and financial limitations). Whereas Iran and Vene- zuela remained affected by US sanctions and infra- structure constraints, Iran nevertheless was able to in- crease its production by a sizeable measure relative to the 2020 average. The price of Brent crude increased from around USD 55/bbl at the beginning of 2021 to some USD 74/bbl by the end of the year, driven by the global recovery of economic activity, particularly in Asia, and effective OPEC+ supply management. This was also fueled by the positive sentiment around vaccination roll- out programs and economic stimulus measures in many countries. New infection waves and mutations of COVID-19 confirmed the uncertainty about the recov- ery path and led to short-term market volatility. Overall, the average Brent crude price was nearly USD 71/bbl in 2021. Oil product demand in the Central and Southeast Euro- pean countries relevant to OMV followed the European recovery trend. Transportation fuel demand grew by around 3.6% for gasoline and diesel and by more than 27% for jet fuel in the relevant markets in 2021. Aus- tria’s market volume reached more than 10 mn t Crude price (Brent) – monthly average In USD/bbl 47 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Financial review of the year Key financials In EUR mn (unless otherwise stated) Sales revenues1 Clean CCS Operating Result2 Clean Operating Result Exploration & Production2 Clean CCS Operating Result Refining & Marketing2 Clean CCS Operating Result Chemicals & Materials2 Clean Operating Result Corporate & Other2 Consolidation: elimination of inter-segmental profits Clean CCS Group tax rate Clean CCS net income2 Clean CCS net income attributable to stockholders of the parent2,3 Clean CCS EPS2 Special items4 thereof Exploration & Production thereof Refining & Marketing thereof Chemicals & Materials thereof Corporate & Other CCS effects: inventory holding gains/(losses) Operating Result Group Operating Result Exploration & Production Operating Result Refining & Marketing Operating Result Chemicals & Materials Operating Result Corporate & Other Consolidation: elimination of inter-segmental profits Net financial result Group tax rate Net income Net income attributable to stockholders3 Earnings Per Share (EPS) Cash flow from operating activities Free cash flow before dividends Free cash flow after dividends Organic free cash flow before dividends5 Organic free cash flow after dividends Gearing ratio excluding leases Leverage ratio Capital expenditure6 Organic capital expenditure7 Clean CCS ROACE ROACE 2021 2020 16,550 in EUR mn in EUR mn 35,555 5,961 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in % in EUR mn in EUR mn in EUR 2,837 1,001 2,224 (62) (39) 36 3,710 2,866 8.77 1,686 145 996 519 (47) 74 32 1,026 679 2.08 Δ 115% n.m. n.m. 1% n.m. (31)% n.m. 4 n.m. n.m. n.m. in EUR mn (1,315) (220) n.m. in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in % in EUR mn in EUR mn in EUR in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in % in % in EUR mn in EUR mn in % in % (398) (509) (396) (12) 418 5,065 2,439 922 1,828 (74) (51) (194) 42 2,804 2,093 6.40 7,017 5,196 4,199 4,536 3,539 22 21 2,691 2,650 13 10 (1,282) 22 1,049 (9) (416) 1,050 (1,137) 592 1,568 (56) 83 (175) (69) 1,478 1,258 3.85 3,137 (2,811) (3,690) 1,273 394 41 32 6,048 1,884 5 8 69% n.m. n.m. n.m. n.m. n.m. n.m. 56% 17% (33)% n.m. (11)% 111% 90% 66% 66% 124% n.m. n.m. n.m. n.m. (19) (11) (56)% 41% 8 2 1 Sales revenues excluding petroleum excise tax 2 Adjusted for special items and CCS effects; further information can be found in Note 4 – Segment Reporting – of the Consolidated Financial Statements 3 After deducting net income attributable to hybrid capital owners and net income attributable to non-controlling interests 4 The disclosure of special items is considered appropriate in order to facilitate the analysis of the ordinary business performance. To reflect comparable figures, certain items affecting the result are added back or deducted. Special items from equity-accounted companies and temporary hedging effects for material trans- actions are included. 5 Organic free cash flow before dividends is cash flow from operating activities less cash flow from investing activities excluding disposals and material inorganic cash flow components (e.g., acquisitions) 6 Capital expenditure including acquisitions 7 Organic capital expenditure is defined as capital expenditure including capitalized exploration and appraisal expenditure and excluding acquisitions and contin- gent considerations. 48 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Notes to key financials Clean CCS Operating Result Special items and CCS effects In EUR mn Clean CCS Operating Result1 Special items thereof: personnel restructuring thereof: unscheduled depreciation / write-ups thereof: asset disposal thereof: other CCS effects: inventory holding gains/(losses) Operating Result Group 1 Adjusted for special items and CCS effects Clean CCS Operating Result In EUR mn Clean CCS Group tax rate In EUR mn 2021 5,961 (1,315) (30) (1,297) 223 (210) 418 5,065 2020 1,686 (220) (39) (1,084) 19 885 (416) 1,050 Δ n.m. n.m. 22% (20)% n.m. n.m. n.m. n.m. Operating Result adjusted for special items and CCS effects, details of which are depicted in the table on the left. 2021 performance: With almost EUR 6 bn OMV achieved an all-time record clean CCS Operating Result in 2021. All three business segments contributed significantly based on a strong operational performance, a favorable market environ- ment as well as a result of the full consolidation of Bo- realis. Group tax rate adjusted for special items and CCS ef- fects. It represents the average rate at which the Group's profit before tax is taxed. 2021 performance: Coming in at 36% the clean CCS Group tax rate in- creased by 4 percentage points compared to 32% in the previous year, stemming from an increased contri- bution from Exploration & Production, in particular from countries with a high tax regime. 49 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Clean CCS net income attributable to stockholders In EUR mn Gearing ratio excl. leases & leverage ratio In EUR mn Clean CCS ROACE In EUR mn 50 Net income attributable to stockholders, adjusted for the after-tax effect of special items and CCS. 2021 performance: The clean CCS net income attributable to stockholders in the amount of EUR 2.9 bn increased significantly compared to EUR 679 mn in 2020 following the strong Operating Result. Net debt (interest-bearing debts including bonds less liquid funds) excluding leases divided by equity, ex- pressed as a percentage. The leverage ratio is calcu- lated by dividing net debt incl. leases through equity plus net debt incl. leases. 2021 performance: OMV's strong financial performance as well as the suc- cessful divestment program have led to a continuous deleveraging throughout the year, resulting in a gearing ratio excluding leases of 22%, thus even surpassing the target level of 30%. The clean CCS Return on Average Capital Employed (%) is calculated as Net Operating Profit After Tax (NOPAT - as a sum of current and last three quarters) adjusted for the after-tax effect of special items and CCS, divided by average capital employed (equity in- cluding non-controlling interests plus net debt). 2021 performance: Driven by an outstanding operational performance OMV was able to deliver a record clean CCS NOPAT of EUR 3.8 bn, thus further increasing the clean CCS RO- ACE up to 13% in 2021 despite higher average capital employed. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Cash flow from operating activities excl. net working capital effects In EUR mn Organic free cash flow In EUR mn Organic capital expenditure In EUR mn Amount of cash OMV Group generates through its ordi- nary business activities which excludes effects from net working capital positions 2021 performance: The all-time record operating cash flow excl. net work- ing capital effects came in at EUR 8.9 bn well above the EUR 2.8 bn from 2020, mainly due to a strong oper- ational performance, a favorable market environment as well as higher dividend contributions from equity-ac- counted investments and the contribution from the fully consolidated Borealis. Amount by which operating cash flow exceeds its work- ing capital needs and capital expenditures. The organic free cash flow after dividends is cash flow from operat- ing activities less cash flow from investing activities ex- cluding disposals and material inorganic cash flow components (e.g. acquisitions). 2021 performance: A record organic free cash flow before dividends of EUR 4.5 bn was recorded in 2021, thus being consider- ably above prior years level. This was mainly due to the outstanding cash flow from operating activities in 2021. The amount is defined as capital expenditure including capitalized exploration and appraisal expenditure, ex- cluding equity injections into at-equity and fully consoli- dated companies, acquisitions and contingent consider- ations. 2021 performance: Organic capital expenditure increased by 41% to EUR 2.6 bn compared to EUR 1.9 bn in 2020, mainly due to the full consolidation of Borealis. 51 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Capital Expenditure (CAPEX) Total CAPEX In EUR mn The increase in Exploration & Production CAPEX was mainly related to investments in Norway, New Zealand and Malaysia. The increase in Refining & Marketing CAPEX was driven by investments in the European refineries and retail stations. Chemicals & Materials CAPEX decreased as capital expenditure in 2020 was mainly related to the acquisi- tion of an additional 39% stake in Borealis, yet, besides the effect from the Borealis acquisition, Chemicals & Materials CAPEX have been higher, mainly driven by the investments into the PDH plant in Kallo. The reconciliation of total capital expenditure to the investments as shown in the cash flow statement is depicted in the following table: Capital expenditure1 In EUR mn Total capital expenditure +/– Changes in the consolidated Group and other adjustments – Investments in financial assets Additions according to statement of non-current assets (intangible and tangible as- sets) 2021 2,691 2020 6,048 (33) (33) (3,954) (156) 2,624 1,938 +/– Non-cash changes Cash outflow from investments in intangible assets and property, plant and equipment (127) 2,497 + Cash outflow from investments, loans and other financial assets + Acquisitions of subsidiaries and businesses net of cash acquired Investments as shown in the cash flow statement 382 — 2,879 21 1,960 194 3,880 6,034 ∆ (56)% 99% 79% 35% n.m. 27% 97% n.m. (52)% 1 Includes expenditures for acquisitions as well as equity-accounted investments and other interests; adjusted for capitalized decommissioning costs, exploration wells that have not found proved reserves, borrowing costs and other additions that by definition are not considered capital expenditure Notes to the cash flow statement Summarized cash flow statement In EUR mn Cash flow from operating activities excluding net working capital effects Cash flow from operating activities Cash flow from investing activities Free cash flow Cash flow from financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period thereof cash disclosed within assets held for sale Cash and cash equivalents presented in the consolidated statement of financial position Free cash flow after dividends 2021 2020 8,897 7,017 (1,820) 5,196 (2,977) (25) 2,195 2,869 5,064 14 5,050 4,199 2,786 3,137 (5,948) (2,811) 2,808 (66) (69) 2,938 2,869 15 2,854 (3,690) ∆ n.m. 124% (69)% n.m. n.m. n.m. n.m. (2)% 77% (7)% 77% n.m. 52 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Cash flow from operating activities amounted to EUR 7,017 mn, up by EUR 3,880 mn compared to EUR 3,137 mn in 2020. This was primarily attributable to an improved market environment and the contribu- tion of Borealis, partly offset by negative effects from net working capital components. Cash flow from investing activities showed an out- flow of EUR (1,820) mn in 2021, compared to EUR (5,948) mn in 2020 as 2020 included a cash out- flow of EUR (3,870) mn related to the acquisition of an additional 39% stake in Borealis AG. Cash flow from in- vesting activities in 2021 comprised cash inflows of EUR 443 mn related to the divestment of Gas Connect Austria, EUR 290 mn related to the sale of the stake in the Norwegian oil field Wisting as well as EUR 94 mn related to the sale of the shares in Kom Munai LLP and Tasbulat Oil Corporation LLP (Kazakhstan). Cash flow from financing activities showed an out- flow of EUR (2,977) mn compared to an inflow of EUR 2,808 mn in 2020. The deviation was mainly re- lated to repayments of bonds in 2021 (EUR 1.55 bn), while 2020 contained the issuance of bonds of EUR 3.25 bn and hybrid bonds of EUR 1.25 bn. Notes to the income statement Summarized income statement In EUR mn Sales revenues Other operating income and net income from equity-accounted investments Total revenues and other income Purchases (net of inventory variation) Production and operating expenses incl. production and similar taxes Depreciation, amortization, impairments and write-ups Selling, distribution and administrative expenses Exploration expenses Other operating expenses Operating Result Net financial result Profit before tax Taxes on income and profit Net income for the year thereof attributable to hybrid capital owners thereof attributable to non-controlling interests Net income attributable to stockholders of the parent Effective tax rate (%) 2021 2020 35,555 1,533 37,087 16,550 1,915 18,465 (9,598) (2,218) (2,418) (1,896) (896) (389) 1,050 (20,257) (4,302) (3,750) (2,746) (280) (688) 5,065 (194) 4,870 (2,066) 2,804 94 617 2,093 (175) 875 603 1,478 84 136 1,258 42 (69) Δ 115% (20)% 101% 111% 94% 55% 45% (69)% 77% n.m. 11% n.m. n.m. 90% 12% n.m. 66% 111 53 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Sales to third parties 2021 (2020) Total not consolidated sales 2021 (2020) In EUR mn if not otherwise stated (prior year) In EUR mn if not otherwise stated (prior year) Sales revenues increased mainly due to additional revenues stemming from the full consolidation of Bore- alis as well as higher gas sales volumes and substan- tially higher market prices, especially gas prices. The sales split by geographical areas can be found in the Notes to the Consolidated Financial Statements (Note 4 – Segment Reporting). Net income from equity-accounted investments in- creased from EUR 38 mn in 2020 to EUR 600 mn in 2021 mainly due to the positive contribution of Abu Dhabi Polymers Company Limited (Borouge) and Bor- ouge Pte. Ltd. Both investments are held by Borealis and therefore the deviation is mainly impacted by the full consolidation of Borealis since October 29, 2020. Other operating income decreased from EUR 1,877 mn in 2020 to EUR 933 mn in 2021. 2020 was mainly impacted by EUR 1,284 mn gains from re- valuation and recycling effects related to the previously held at-equity share of 36% in Borealis. This effect was partly offset in 2021 with EUR 261 mn gains from the sale of the stake in the Norwegian oil field Wisting. Depreciation, amortization, impairments and write- ups increased mainly due to the full consolidation of Borealis leading to higher depreciation charges, the im- pairment losses recognized for the nitrogen business unit of Borealis and the impairment of the at-equity ac- counted investment ADNOC Refining. Details can be found in the Notes to the Consolidated Financial State- ments (Note 7– Depreciation, amortization, impair- ments and write-ups). The decrease of exploration expenses was mainly re- lated to the impairments booked in 2020 as OMV up- dated its mid-term plan and revised its long-term plan- ning assumptions in 2020. 54 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT acquisition of additional shares in Borealis that led to write-up of deferred tax assets in the Austrian tax group (among other effects). For further details on the Group’s effective tax rate, please refer to Note 12 – Taxes on income and profit – of the Consolidated Fi- nancial Statements. 2021 2020 Δ 33,724 18,595 1,479 35,695 12,112 1,464 21,996 17,216 13,677 909 53,798 19,899 18,020 10,616 736 49,271 (6)% 54% 1% 11% (4)% 29% 24% 9% This effect was partly offset by the sale of the Gas Con- nect Group. For further details please refer to Note 20 – Assets and liabilities held for sale – of the Consolidated Financial Statements. Equity (including non-controlling interest) rose by 11% in comparison to 2020. Non-current liabilities were impacted mainly by repay- ment of EUR 800 mn bonds. For further details please refer to Note 24 – Liabilities – of the Consolidated Fi- nancial Statements. Net financial result decreased chiefly due the lower net interest result which was partly offset by an im- proved foreign exchange result. For further details refer to the Notes to the Consolidated Financial Statements (Note 11 – Net financial result). The effective tax rate increased from (69%) in 2020 to 42% in 2021. The 2020 effective tax rate was signifi- cantly affected by income from tax synergies from the Notes to the statement of financial position Summarized statement of financial position (condensed) In EUR mn Assets Non-current assets Current assets Assets held for sale Equity and liabilities Equity Non-current liabilities Current liabilities Liabilities associated with assets held for sale Total assets/equity and liabilities Non-current assets: Intangible assets and property, plant and equip- ment decreased by EUR 916 mn compared to 2020 impacted by held for sale classifications, especially of the nitrogen business unit of Borealis. Equity-accounted investments decreased by EUR 1,434 mn to EUR 6,887 mn driven by EUR 1,876 mn dividend distributions from Abu Dhabi Polymers Company Limited (Borouge) as well as by EUR 669 mn impairment of the investment in ADNOC Refining, partly offset by positive result contributions especially from Abu Dhabi Polymers Company Limited (Borouge) as well as positive FX impacts. Assets held for sale and liabilities associated with assets held for sale increased mainly due to the re- classification of the nitrogen business unit of Borealis and the retail network in Slovenia to held for sale. 55 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Exploration & Production In the Exploration & Production business segment, OMV delivered excellent performance while reshaping its portfolio in line with the focus on increasing the share of natural gas in production. Despite COVID-19- related restrictions, production reached 486 kboe/d, the production cost stood at USD 6.7/boe, and the clean Operating Result increased substantially. At a glance Clean Operating Result Special items Operating Result Capital expenditure1 Exploration expenditure Exploration expenses Production cost Total hydrocarbon production Total hydrocarbon sales volumes Proved reserves as of December 31 Average Brent price Average realized crude oil price2 Average realized natural gas price2,3 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in USD/boe in kboe/d in kboe/d in mn boe in USD/bbl in USD/bbl in EUR/MWh 2021 2020 2,837 (398) 2,439 1,173 210 281 6.67 145 (1,282) (1,137) 1,090 227 896 6.58 486 462 1,295 70.91 65.60 16.49 463 439 1,337 41.84 37.97 8.94 Δ n.m. 69% n.m. 8% (8)% (69)% 1% 5% 5% (3)% 69% 73% 84% 1 Capital expenditure including acquisitions. 2 Average realized prices include hedging effects. 3 The average realized gas price is converted to MWh using a standardized calorific value across the portfolio of 10.8 MWh for 1,000 cubic meters of natural gas. Financial performance The clean Operating Result rose sharply from EUR 145 mn to EUR 2,837 mn in 2021. Exceptionally strong market effects of EUR 2,282 mn as a consequence of substantially better oil and gas prices were reinforced by very positive operational effects of EUR 507 mn. They could be achieved thanks to the return to full operations in Libya, revised OPEC quota restrictions in the United Arab Emirates, and the commissioning of a new natural gas field in Tunisia. Sales volumes followed the production development. Depreciation increased by EUR 97 mn in line with production increases. Net special items amounted to EUR (398) mn in 2021 (2020: EUR (1,282) mn), which were mainly related to temporary hedging effects. While net special items in 2020 were mainly related to the impairments triggered by OMV’s revision of its long-term Brent crude oil price planning assumptions, the 2021 amount was impacted by the EUR (383) mn value adjustment of receivables connected to certain E&P assets. The Operating Re- sult reached EUR 2,439 mn (2020: EUR (1,137) mn). Production cost excluding royalties was flat at USD 6.7/boe in 2021 (2020: USD 6.6/boe). The total hydrocarbon production volume increased by 23 kboe/d to 486 kboe/d. Libyan production was at full capacity during almost the entire period, while it had been severely affected by a force majeure situation for most of the previous year. Output in the United Arab Emirates grew on the back of revised OPEC quota restrictions and in Tunisia after the commissioning of a new natural gas field. Natural decline in Romania and Austria, the full divestment of operations in Kazakhstan in May 2021, and lower natural gas extraction in New Zealand stifled production growth to some extent. Total hydrocarbon sales volumes rose to 462 kboe/d (2020: 439 kboe/d), following the production development. In 2021, the average Brent price reached USD 70.9/bbl, a substantial growth of 69%. The Group’s average realized crude price improved by 73%. The average realized gas price in EUR/MWh advanced by 84%. 56 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Capital expenditure including capitalized E&A was raised to EUR 1,173 mn in 2021 (2020: EUR 1,090 mn), rebounding from the previous austerity-induced level. Organic capital expenditure was primarily directed at projects in Romania, Norway, and New Zealand. Exploration expenditure was EUR 210 mn in 2021, a reduction of 8% compared with 2020. It was mainly related to activities in Norway, Romania, and at SapuraOMV. Production Romania² Austria Kazakhstan² Norway Libya Tunisia Yemen Kurdistan Region of Iraq United Arab Emirates New Zealand Malaysia² Russia Total 2021 2020 Oil and NGL in mn bbl Natural gas¹ in bcf in mn boe in mn boe Total Oil and NGL in mn bbl Natural gas¹ in bcf in mn boe Total in mn boe 22.4 3.6 0.7 15.3 12.0 0.9 1.1 129.9 20.6 0.7 102.3 – 17.3 – 24.0 3.4 0.1 17.0 – 2.9 – 46.4 7.0 0.8 32.3 12.0 3.8 1.1 23.4 3.8 2.1 15.1 2.4 0.6 1.3 146.5 24.9 2.0 97.5 – 7.0 – 27.1 4.2 0.3 16.2 – 1.2 – 50.5 8.0 2.5 31.3 2.4 1.7 1.3 1.0 15.6 2.6 3.6 1.0 14.6 2.4 3.4 10.8 3.5 1.7 – 72.9 – 51.8 64.5 210.6 613.2 – 8.6 10.8 35.1 104.6 10.8 12.1 12.4 35.1 177.5 8.4 3.8 2.7 – 64.7 – 57.7 53.3 208.4 612.0 – 9.6 8.9 34.7 104.7 8.4 13.4 11.6 34.7 169.4 1 To convert natural gas from cf to boe, the following conversion factor was applied in all countries: 1 boe = 6,000 cf. In Romania, the following factor was used: 1 boe = 5,400 cf. 2 The figures above include 100% of all fully consolidated companies. Portfolio developments In 2021, the COVID-19 pandemic continued to affect the global economy and energy demand. Although the pandemic continued to pose operational challenges in all production assets, OMV made significant progress with implementing its E&P strategy. It aims to increase the share of natural gas over that of crude oil and re- duce carbon intensity across the portfolio. SapuraOMV completed the sale of all mature oil assets in Peninsu- lar Malaysia in August, and in December, OMV di- vested its 25% share in the Wisting oil discovery in Nor- way. Further portfolio optimization milestones were the divestment of all E&P assets in Kazakhstan in May and of 40 marginal fields in Romania in December. In New Zealand, OMV continues to work toward completing the sale of its 69% stake in the Maari oil field. Central and Eastern Europe OMV Petrom continued its portfolio optimization efforts in 2021 with the sale of 40 onshore oil and gas fields in Southeastern Romania. OMV Petrom also sold all of its holdings in E&P assets in Kazakhstan. Negotiations for a production-sharing contract for Block II off the shore of the Republic of Georgia were successfully concluded. A seismic campaign is in prep- aration there for 2022. In Romania, we drilled 36 new wells and sidetracks (2020: 63), and 695 workover jobs were performed. The first total shutdown of the Petromar asset was suc- cessfully and safely finalized in October. In September and October, modernization and upgrades as well as necessary maintenance work were performed at the offshore platforms and the Midia terminal. In Austria, phase 1 of the country’s largest ground- mounted photovoltaic plant commenced operations in January. It generated 12.1 GWh of carbon-neutral elec- tricity for in-house use from January to December. The second and final construction phase started in Q4/21. This phase will raise generation capacity to a total of 15.32MWp and is expected to go online in Q3/22. Once fully operational, the plant will generate around 14.25 GWh of electricity. A three-week turnaround at the Aderklaa sour gas plant was finalized in May. Thanks to a new inspection method, the turnaround interval was extended to six years. 57 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Phase 1 of the Smart Oil Recovery (SOR) drilling workover campaign was finalized. Eight new wells started production at the end of January 2022. Middle East and Africa In 2021, the Middle East and Africa region delivered strong results. Operations were safe and remained un- disrupted, and all key projects continued as planned, despite the impact of COVID-19 and the tense geopolit- ical situations in Libya, Tunisia, and Yemen. In Libya, production remained stable for almost the en- tire year. In mid-January 2022, we were able to lift the force majeure that had to be declared on crude oil ex- ports from two Libyan ports following a political dispute in December 2021. In the United Arab Emirates, drilling continued at the SARB and Umm Lulu fields. This allowed the produc- tion ramp-up to continue despite OPEC quota re- strictions. While Yemen’s security situation continuously poses significant challenges, OMV was able to complete the workover campaign in Block S2 and commission two power generation units for the central processing facil- ity in Q4/21. Russia In October 2021, the Yuzhno-Russkoye field reached the important milestone of full Turonian reservoir devel- opment with the commissioning of the last of a total of 88 wells. Together with the 12 wells in the first start-up complex commissioned in 2019, 100 wells are now in operation and produce the hard-to-recover natural gas of the field’s Turonian reservoir. A further step to maintain the production level of the field was the successful launch of a new booster com- pressor station. Asia-Pacific In line with its strategy, SapuraOMV sold all of its inter- ests in various mature oil-producing assets located off- shore Peninsular Malaysia. The effective date of the transaction is January 1, 2021. The Jerun natural gas project is progressing according to plan. Detailed engineering is well on track, and the first deliveries of structural steel have arrived at the fab- rication yard. In New Zealand, OMV continued the redevelopment and optimization of the Māui and Pohokura natural gas assets. In Tunisia, the production rate at the Nawara natural gas field was stabilized in 2021, owing to the building of operational capabilities and the implementation of digi- tal technologies. The Pohokura onshore well intervention was success- fully completed. The Māui natural gas field re-develop- ment in New Zealand is on track, with the Māui A Crestal Infill completed and the Māui B IRF Phase 3 progressing well. North Sea In line with the strategy of reducing the product portfo- lio’s carbon intensity, OMV sold its entire 25% stake in the Wisting oil discovery. The economic effective date of the transaction is January 1, 2021. The Hywind Tampen project is on track to deliver initial power to Gullfaks in 2022. Upon completion, it will be the world’s first wind farm to power offshore platforms and reduce CO2 emissions by 200,000 t per year. The concept selection for the Iris/Hades development was confirmed in November 2021. A number of developments were completed in 2021 that will extend plateau production for the Gudrun and the Edvard Grieg fields. These include two tie-ins to the Gudrun field, a new extended well test at the Rolvsnes field, a tie-back to the Solveig field, and three new infill wells to the Edvard Grieg platform that were put into production. OMV’s divestment of its 69% share in the Maari oil field is expected to close in 2022. Key projects Neptun (Romania, OMV 50%) In 2021, Romanian state-controlled natural gas com- pany Romgaz made a binding offer to acquire Exx- onMobil’s 50% stake in the Neptun Deep license off- shore Romania. OMV Petrom will become operator of the project once Romgaz completes the takeover, ex- pected for 2022. Preparations for the ownership take over are underway. OMV Petrom maintains a keen in- terest in seeing the Black Sea resources developed. However, the final investment decision depends on a range of factors including a stable and competitive fis- cal framework. Changes to the Romanian offshore law are expected to be effected during 2022. 58 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Other major projects (Romania, OMV 100%) At the Petromar asset, a new offshore well was put into production in March and set a record for the longest section drilled offshore by OMV Petrom measuring 2,902 m. A number of installations were added to Petromar as part of a rejuvenation program, including new cranes, a new helideck, and new gas-to-power installations. The Enhanced Oil Recovery (EOR) pilot project that was initiated at the Moldova asset was extended and the initial results, water cut decrease in certain produc- tion wells, were observed. Encouraged by the results of this pilot, a full field application in another field in the Muntenia Vest asset has been launched. These pro- jects aim to increase recovery from these mature as- sets by injecting a viscous water mixture into the reser- voir. Nawara (Tunisia, OMV 50%) We were able to stabilize production at the Nawara nat- ural gas field in 2021. The building of operational capa- bilities and the implementation of digital technologies were the key success factors. A new gas discovery that had been made late in 2019 was connected to Na- wara’s Central Processing Facility (CPF). Umm Lulu and SARB (United Arab Emirates, OMV 20%) Uninterrupted operations were maintained at the Umm Lulu and Satah Al Razboot (SARB) fields. Drilling activ- ities also continued in both fields. This allowed produc- tion to continue to ramp up despite the OPEC quota re- strictions. Ghasha concession (United Arab Emirates, OMV 5%) The Ghasha concession is being developed as three projects in parallel, namely Hail & Ghasha, the Dalma project (containing several fields in the Dalma area), and the Deep Gas Development (also containing sev- eral fields). Dalma is expected to deliver first gas in 2025, with the field eventually producing around 54 kboe/d of natural gas. The award of the Engineering Procurement and Construction (EPC) contracts in No- vember was a major milestone for the Ghasha conces- sion. The construction of ten artificial islands is pro- gressing as planned. Khor Mor (KRI, OMV 10%) The Khor Mor field achieved steady production exceed- ing expectations. The capacity expansion project is pro- gressing as per plan with early civil engineering works completed. The project is on track for first gas in 2023. Gullfaks (Norway, OMV 19%) In 2021, the Equinor-operated Gullfaks field delivered strong production volumes, mainly due to reduced nat- ural gas injection. Phase 1 of the Hywind Tampen con- struction (consisting of 11 floating wind turbines) was fi- nalized in Q2/21. The generation output of 5 out of the 11 turbines will be used to reduce natural gas-fired power generation at Gullfaks. The project is on track to deliver first power in 2022. Once the construction of the substructures is complete in spring 2022, the windmills will be assembled and towed to the field. Gudrun (Norway, OMV 24%) Phase 2 of the Gudrun field redevelopment is delayed due to COVID-19-induced personnel restrictions off- shore. First water injection from the new wells is sched- uled to start in mid-2022. Edvard Grieg (Norway, OMV 20%) The Edvard Grieg field produced above expectations in 2021 due to higher export capacity availability. Three infill wells were completed during the year to support production capacity. In Q3/21, production from the nearby Solveig field com- menced. The Solveig field is developed with seabed in- stallations tied to the Edvard Grieg platform for further processing. In addition, the extended well test from the Rolvsnes field commenced in early August. These two near-field tiebacks to Edvard Grieg will extend its plat- eau production phase. Edvard Grieg is the first field in the world to be awarded the CarbonClear certification, Intertek’s new independent upstream carbon intensity certification for oil and gas producers. Hades/Iris (Norway, OMV 30%) Hades/Iris is the first OMV-operated development pro- ject in Norway. The concept selection was approved by all license partners in November and will allow the pro- ject to progress toward front-end engineering and de- sign (FEED) studies. OMV is planning to make the final investment decision (FID) in late 2022 and submit the plan for development and operations (PDO) to the au- thorities by year-end 2022 to take part in temporary Norwegian tax incentives. Production start-up is expec- ted in 2026. 59 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT SK408 (Malaysia, OMV 40%) In Malaysia, the phase 1 development of the SK408 li- cense (the Gorek, Larak, and Bakong fields) continued to produce at a high level. A 3D seismic survey was started in Romania in Q4/21 and completed in Q1/22. As a result of the Schönkir- chen 3D seismic survey, a drilling opportunity was iden- tified in Austria and will be developed further in 2022. Phase 2 of the license, the Jerun project, received the JV’s final investment decision in March 2021. The main engineering, procurement, construction installation, and commissioning (EPCIC) contract could thus be awarded shortly after. Construction started in Septem- ber, and the main construction milestones for 2021 were met. Exploration and appraisal expenditure decreased to EUR 210 mn in 2021 (2020: EUR 227 mn). New explo- ration license applications were submitted in Norway and Malaysia, focused on infrastructure-led natural gas opportunities. License award announcements are ex- pected in Q1/22. Māui A Crestal Infill (New Zealand, OMV 100%) The Māui A Crestal Infill (MACI) project is part of a NZD 500 mn investment in the Māui and Pohokura fields and is critical for ensuring the security of New Zealand’s domestic energy supply. All six wells were completed as planned. Māui B IRF Phase 3 (New Zealand, OMV 100%) The project scope of the Māui B IRF Phase 3 infill drill- ing comprises drilling, completion, tie-in and commis- sioning of five sidetrack wells on the Māui B platform. The commissioned rig arrived in New Zealand and is expected to commence the drilling campaign in Q1/22. Exploration and appraisal highlights In 2021, OMV drilled eight exploration and appraisal wells in six different countries, six of which were com- pleted and four were classified as discoveries. OMV Petrom drilled one exploration well in Romania resulting with an oil discovery, evaluation is ongoing. OMV finalized three exploration wells in Norway in 2021. While Eidsvoll in the southern North Sea proved dry, Solveig Seg D and Ommadawn were oil discover- ies. The commercial options for these discoveries are under evaluation, and results are expected in 2022. In New Zealand, OMV drilled the MA-14B (Māui East) exploration well and discovered natural gas. The SapuraOMV-operated Eagle-1 drilling in Australia was completed in June 2021. The well did not discover any producible hydrocarbons. The drilling of one well in Tunisia and one in the United Arab Emirates was still ongoing at year-end. These are expected to be finalized in 2022. Reserves development Proved reserves (1P) as of December 31, 2021, de- creased to 1,295 mn boe (thereof OMV Petrom: 419 mn boe), with a one-year Reserve Replacement Rate (RRR) of 77% in 2021 (2020: 102%). The three-year rolling average RRR is 105% (2020: 138%). Proved re- serves were added through successful drilling and de- velopment activities in Malaysia, New Zealand, and Norway, and improvement in reservoir performance in Norway, Romania, and the United Arab Emirates. These additions were offset to some extent by divest- ments in Kazakhstan, Romania, and Malaysia. The im- provement in global oil prices also had a positive im- pact on the proved reserves position as of the end of 2021. Proved and probable reserves (2P) decreased to 2,197 mn boe (thereof OMV Petrom: 680 mn boe), im- pacted by the divestments in Kazakhstan, Romania, and Malaysia. Innovation and new technologies OMV’s E&P strategy is to apply state-of-the art technol- ogies developed in-house to well-maintained assets to pilot these technologies and to promote rapid global im- plementation. The current focus of research and devel- opment is on improving recovery rates and extending the lifetimes of mature fields. Technologies that OMV successfully implements are made available to the pub- lic at the OMV Innovation&Technology Center (ITC) in Austria. Smart Oil Recovery (SOR) is an innovative method to optimize Enhanced Oil Recovery (EOR) in mature res- ervoirs like the Austrian Matzen field from 40% up to 60%. The life of the field is extended by injecting vis- cous salt water into the reservoir. The drilling workover campaign of SOR Project Phase 1 covering eight wells was finalized successfully and production commenced in Q1/22. 60 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT The Tech Center & Lab Teams in Austria and OMV Petrom Upstream Laboratories (ICPT) in Romania sup- port all OMV assets globally as a center of excellence for analysis, testing, technology research, and consult- ing. In 2021, a new product line –geochemical model- ling – was developed, and the first alkali viscous salt- water pilot was set up. Digitalization In 2018, the E&P Business Segment announced a vi- sion to become a digital frontrunner in the industry and launched its digitalization initiative – DigitUP. The COVID-19 pandemic has reinforced the importance of digitalization within the operational processes and has been a catalyst for accelerating the digital transfor- mation around the world. As part of the DigitUP pro- gram, E&P continued digitalizing its operations. These activities ranged from AI-driven data analytics in sub- surface applications to increasing value-driven deci- sions and reducing project development time. In addi- tion the use of robotics and remote real-time operation supported systems to increase production and drilling efficiency, while reducing HSSE risks at the same time. In 2021, the DigitUP program portfolio began transition- ing from conceptualizing and piloting projects to deploy- ing the technology in our fields, with some 40% of a to- tal of 100+ projects slated for deployment. A dedicated program was established at our largest operated ven- ture, OMV Petrom Romania, to facilitate the arrival of technology at the assets in the field. The digitalization journey is supported by change management activities and continuous cultural and diversity programs throughout the entire OMV Group. To fully seize the potential of these initiatives, E&P set up a public cloud infrastructure to increase flexibility, security, and performance globally, and equipped our employees with a “future-proofed” skill set to enable a completely new way of working. In Austria, OMV implemented an AI-driven application that systematically and automatically detects produc- tion system underperformance at all levels. It helps with reaching maximum production capacity by making use of data-driven AI modelling. The resulting production gain for OMV’s first asset is estimated at 0.5% per year above the current production level. A new integrated planning, economics, portfolio, and reserves management system was rolled out to 400 employees in all E&P countries. The solution im- proves collaboration across functions by way of inte- grated workflows and consistent data, and supports major E&P business processes for diverse disciplines. Full integration of the application and the seamless flow of data across business functions enables faster, higher-quality calculations. A cloud-based document record and management sys- tem was commissioned at all OMV E&P locations. Over 5 mn business critical documents were secured, allow- ing the business to collaborate globally across the or- ganization. This has significantly reduced the search time for retrieving information that is required for day- to-day operations. The strategic partnership between OMV and Schlum- berger started in 2020. A new solution integrates the results from drilling projects into a single, shared data- base, allowing teams in all areas –operations, geology, petrophysics, or completions – to work across the same platform, with the most up-to-date data and insights at their fingertips. In 2021, well-planning teams in Roma- nia and Austria were able to access and visualize off- set-well data more easily, without having to research past reports. As a result, eight wells were mapped out in the time it would normally take to plan one. Improving the safety of personnel in areas of higher risk exposure is a key objective for the use of robots. They can complete repetitive tasks more precisely and quickly than their human counterparts. In addition, they offer operational benefits since they can perform tasks where personnel have limited opportunity to intervene, particularly in hard-to-reach areas. In 2021, an autono- mous inspection robot was tested in Austria, and there are plans to deploy it at other OMV E&P assets, too. 61 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Refining & Marketing OMV’s Refining & Marketing business refines and markets fuels and natural gas. It operates three inland refineries in Europe and holds a strong market position in the areas where its refineries are located, serving a strong branded retail network and commercial customers. In the Middle East, it owns 15% of ADNOC Refining and ADNOC Global Trading. At a glance Clean CCS Operating Result1 thereof ADNOC Refining & Trading thereof gas Special items CCS effects: inventory holding gains/(losses)1 Operating Result Capital expenditure2 OMV refining indicator margin Europe3 Utilization rate refineries Europe Fuels and other sales volumes Europe thereof retail sales volumes Natural gas sales volumes in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in USD/bbl in mn t in mn t in TWh 2021 1,001 (11) 252 (509) 430 922 654 2020 996 (107) 337 22 (425) 592 570 2.44 86% 3.67 88% 16.34 6.40 196.39 15.45 5.88 164.01 ∆ 1% 90% (25)% n.m. n.m. 56% 15% 50% 2 6% 9% 20% Note: As of Q1/21, the Downstream business segment was split into Refining & Marketing and Chemicals & Materials. For comparison only, 2020 figures are presented in the new structure. 1 Adjusted for special items and CCS effects; further information can be found in Note 4 – Segment Reporting – of the Consolidated Financial Statements 2 Capital expenditure including acquisitions 3 Actual refining margins realized by OMV may vary from the OMV refining indicator margin due to factors including different crude oil slate, product yield, and operating conditions. Financial performance The clean CCS Operating Result was stable at EUR 1,001 mn (2020: EUR 996 mn). Stronger refining margins, improved performance by ADNOC Refining & Trading, and higher demand were offset almost entirely by a lower contribution from margin hedges and a weaker result from the gas business and oil trading. The OMV refining indicator margin Europe increased by 50% to USD 3.7/bbl (2020: USD 2.4/bbl), mainly as a consequence of a stronger macro environment. Sub- stantially higher gasoline, naphtha, and jet cracks were only partly offset by weaker diesel cracks, which only rebounded toward the end of the year. In 2021, the uti- lization rate of the European refineries reached a re- silient level of 88% (2020: 86%). At 16.3 mn t, fuels and other sales volumes in Europe increased by 6%, mainly on account of robust demand recovery. In the commercial business, demand for jet fuel and diesel grew thanks to the easing of travel restrictions, while margins remained fairly constant, pushing up sales vol- umes. The result from the retail business improved de- spite lower margins, following an increase of 9% in re- tail sales quantities, as well as due to a higher contribu- tion from the non-fuel business. In 2021, the contribution of ADNOC Refining & Trad- ing came in at EUR (11) mn (2020: EUR (107) mn), mainly due to better operational performance and a higher refining margin environment. The result was fur- ther improved by ADNOC Global Trading following its successful launch at the end of 2020. The result of the gas business declined by 25% to EUR 252 mn (2020: EUR 337 mn), mainly following the divestment of Gas Connect Austria to VERBUND at the end of May 2021. In addition, higher storage, CO2, gas, and energy expenses, as well as a negative impact from power forward contracts lowered the result. The ability to benefit from high market volatility through sup- ply and sales contracts, higher revenues from the elec- tricity balancing market, and the one-off revenues fol- lowing the reversal of certain provisions partly compen- sated for this development. Natural gas sales vol- umes rose significantly from 164.0 TWh to 196.4 TWh, thanks to primarily higher sales quantities in Germany and the Netherlands. This was partially offset by lower sales in Romania. 62 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Net special items amounted to EUR (509) mn (2020: EUR 22 mn) and were primarily related to an impair- ment in ADNOC Refining amounting to EUR (669) mn, which was due to lower assumed refining margins and production volumes. This was partially offset by the ef- fect of commodity derivatives. CCS effects of EUR 430 mn were recorded in 2021 as a consequence of a substantially higher crude oil price level, while CCS effects in 2020 amounted to EUR (425) mn following the sharp drop in crude oil prices. The Operating Re- sult of Refining & Marketing increased significantly to EUR 922 mn (2020: EUR 592 mn). Capital expenditure in Refining & Marketing amounted to EUR 654 mn (2020: EUR 570 mn). Organic capital expenditure in 2021 was predominantly related to in- vestments in the European refineries and retail sta- tions. Business overview R&M refines and markets fuel products in Central and Eastern Europe as well as in the Middle East through OMV’s 15% interest in ADNOC Refining and ADNOC Global Trading. OMV’s European downstream busi- ness model is characterized by a high degree of physi- cal integration along the value chain from crude supply to refining, retail, and commercial sales. Total fuels and other sales volumes Europe amounted to 16.34 mn t in 2021. Commercial fuel customers are mainly from in- dustrial transportation and construction sectors and ac- count for more than 60% of the sales volume, while the strongly branded retail network comprising 2,088 filling stations accounts for the remaining sales volumes. OMV owns gas storage facilities with a capacity of 30 TWh, holds a 65% share in the Central European Gas Hub (CEGH), and operates a gas-fired power plant in Romania. Natural gas sales volumes amounted to 196.4 TWh. Refining including product supply and sales The year 2021 has been a story of two halves with re- gards to refining margins. The first half of the year was characterized by depressed margins and low product cracks across the board as demand was still under sig- nificant pressure. The second half of 2021 is a story of recovering margins and a strong upside, with various factors contributing to the improvement in refining eco- nomics. In terms of the different products, naphtha prices in a way defied the trend of the two different halves and were strong throughout 2021 as petrochemical demand remained resilient. Naphtha cracks rose to unprece- dented levels in the autumn months. This can be at- tributed to the demand for naphtha in gasoline blending and to LPG use growing significantly because of rising prices for competing petrochemical feedstock. This led to certain levels of switching away from LPG towards naphtha as feedstock for petrochemicals, which sup- ported naphtha demand. The gasoline market started recovering in summer as demand especially in Europe and the US was approaching pre-pandemic levels and continued receiving a boost from Hurricane Ida-related supply disruptions in the United States in autumn. On the middle distillate side, the start of the year was characterized by a supply overhang and high global in- ventories, which kept both diesel and jet cracks de- pressed. An upside was only seen toward the autumn months when diesel demand picked up from the trans- portation, industrial, and agricultural sector and jet de- mand grew as a result of a slight improvement in global travel, although it remained far from typical levels. To- ward the end of the year, the jet market came under re- newed pressure with the emergence of the new COVID-19 variant, Omicron. In fact, jet demand in 2021 was only around 65% of the pre-COVID-19 level, while other road transportation fuels were very close to 2019 levels (approximately 95%+). Nevertheless, refining margins at the end of 2021 remained solid as Brent prices fell. High gas prices in the second half of 2021 also put pressure on operating costs at some refineries. Natural gas is needed for hydrogen production, which is used in the hydrocracking and desulphurization processes. In the markets served by OMV’s Schwechat and Burghausen refineries, we saw higher demand in fuels versus 2020 and sustained very high demand in petro- chemicals. Fuels demand in Romania also showed an increase versus 2020 following higher diesel demand. OMV’s European refineries therefore achieved a high utilization rate of 88%. Despite the challenging environment and unstable de- mand during the year, commercial sales were ahead of expectations in many areas. Well-executed price man- agement, in both futures and spot markets, enabled de- livering margins above the previous year. In some product segments, volumes and margins even ex- ceeded pre-COVID-19 levels, thanks to a strong boost from OMV rapidly capitalizing on local market opportu- nities. Throughout the year, a strong focus was set on understanding customer needs and increasing cus- tomer satisfaction. To closely reflect the market devel- 63 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT opments and market outlook, OMV’s commercial prod- ucts and services are being expanded, including launching several new, more sustainable products. ADNOC Refining & Trading Alongside majority shareholder ADNOC (65%) and Eni (20%), OMV remains a strategic partner in ADNOC Re- fining after acquiring 15% of the company’s shares at the end of July 2019. In 2021, ADNOC Refining oper- ated its major refinery in Ruwais, which is the world’s fourth largest refining complex with integrated petro- chemicals, and its Abu Dhabi refinery, which closed at the end of 2021 as part of ongoing efficiency and com- petitiveness improvement initiatives. In comparison to 2020, ADNOC Refining’s business performance in 2021 benefitted from better operational performance and a higher margin environment, particu- larly in the second half of the year. With the same ownership structure as ADNOC Refin- ing, ADNOC Global Trading (AGT) has the mission to trade the majority of ADNOC Refining’s export volumes of products as well as to supply non-domestic crudes, condensates, and other liquids for processing. AGT extends the successful Refining & Marketing busi- ness model into key geographies and to strategic part- ners. By continuously optimizing trade flows, it allows ADNOC Refining to access attractive non-domestic feedstock sources, maximize netback for products on global markets (e.g., Asia-Pacific), and implement best practices such as risk management. In 2021, AGT continued on a solid ramp-up trend, clos- ing the first year of operations overall according to plan. Refining capacities 2021 In kbbl/d Schwechat (Austria) Burghausen (Germany) Petrobrazi (Romania) ADNOC Refining (United Arab Emirates)1 Total 1 Equivalent to OMV‘s 15% share in ADNOC Refining 204 79 86 138 507 Retail Despite an ongoing challenging environment due to the COVID-19 pandemic, the retail business set a new rec- ord Operating Result in 2021. The retail business again proved to be a stable outlet for refinery products and a strong cash generator. Total sales partially recovered to 6.4 mn t, equivalent to approximately 7.9 bn l, strongly supported by a growing cards business. At the 64 end of the year, the network comprised 2,088 filling sta- tions (2020: 2,085). OMV continues to focus on its proven multi-brand strategy. The OMV brand is posi- tioned as a premium brand, with VIVA representing a strong shop, gastronomy, and service offering. This is rounded out by the unmanned and value-for-money concepts of the Avanti and Petrom brands. This strat- egy has continued to deliver solid results, and profitabil- ity per site has increased. Sales of OMV’s premium MaxxMotion-brand fuels continued to be strong, thus contributing to record margins and proving the pre- mium-quality advantage, even during the COVID-19 cri- sis. The non-fuel business, including VIVA convenience stores and car washes, continued to perform well (es- pecially the former), growing about 10% compared to 2020 (excluding the Petrom branded network in Roma- nia where a third-party store partnership with Auchan was introduced). The focus on high-quality products and services in the premium filling station network re- mains one of OMV’s key differentiators. In June 2021, a divestment agreement was signed with MOL Group for OMV Slovenia comprising the sale of 119 filling stations. This follows the OMV Group strat- egy of focusing the retail business on countries where OMV has a strong market position and refinery integra- tion. The closing of the divestment of the OMV network in Germany is expected in 2022; OMV has agreed to sell 285 filling stations to EG Group. In July 2021, OMV and VERBUND reached an agree- ment on the sale of OMV’s 40% stake in Smatrics, a joint venture in electromobility, to VERBUND. Gas supply, marketing, and trading OMV markets and trades natural gas in nine European countries and in Turkey. In 2021, natural gas sales vol- umes amounted to 196.4 TWh (2020: 164.0 TWh), an increase of 20%. The foundation for natural gas sales growth is a diverse supply portfolio, which consists of equity gas and a variety of international suppliers. In addition to mid- and long-term activities, short-term ac- tivities at the main international hubs (VTP, THE, TTF, PSV) complement OMV’s dynamic supply portfolio. OMV Gas Marketing & Trading GmbH’s (OMV Gas) sales activities are focused on a diverse and resilient customer portfolio in the large-scale industry and mu- nicipality segments. OMV Gas conducts sales activities in Austria, Germany, Hungary, the Netherlands, and Belgium, where 2021 sales amounted to 156.2 TWh, up 36% over 2020. Italy, Slovenia, and France are cov- ered by opportunistic origination activities. Increased sales were achieved despite the very challenging and OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT competitive market environment as margins remained under pressure. In 2021, the European gas market was characterized by unprecedented high gas prices and significant vola- tility. This situation is expected to continue. In Romania, OMV Petrom’s gas and power activities delivered a record Operating Result, reflecting strong power business performance and the optimization of both product and customer portfolios. Natural gas sales volumes to third parties reached 38.4 TWh in 2021, a decrease compared to 47.8 TWh in 2020. In 2020, ANRE initiated a gas release program in Romania, whereby natural gas producers are obligated to offer 40% of their production volume to the centralized mar- kets. In Romania, net electrical output increased to 4.8 TWh in 2021 (2020: 4.2 TWh), with the Brazi power plant contributing approximately 8% of Romania’s electricity production. The plant is also an important player on the power balancing market. In 2021, OMV Gas again improved the capacity utiliza- tion of the Gate regasification terminal. Furthermore, the LNG business provides an additional natural gas source to meet OMV’s ambitious sales growth targets in Northwest Europe, while enhancing supply security for OMV’s geographically diverse supply portfolio. The LNG business also supports portfolio integration of the supply, marketing, and trading businesses. Gas logistics OMV operates gas storage facilities in Austria and Ger- many with a storage capacity of 30 TWh. Additionally, OMV holds a 65% stake in the Central European Gas Hub (CEGH), the leading gas trading hub in Central and Eastern Europe. On May 31, 2021 OMV closed its divestment of its entire 51% stake in Gas Connect Aus- tria to VERBUND. In 2021, a long cold season that lasted until April re- duced the storage levels all over Europe to historically low levels. High global demand, based on recovery from the pandemic and shortage of supply, led to an in- verse summer/winter spread, with summer prices ex- ceeding winter prices. Unprecedented volatility of prices across the entire energy complex dominated the market. European storages reached their highest filling levels at the end of October (77%) and decreased to 55% at year-end. At the Central European Gas Hub, 749 TWh of natural gas was nominated at the Virtual Trading Point (VTP) in 2021. This volume corresponds to approximately nine times Austria’s annual gas consumption. The EEX CEGH Gas Market traded total volumes of 231 TWh in Austria, an increase of 35%, and 28 TWh in the Czech Republic, an increase of 117%. OMV is a financing partner of the Nord Stream 2 pro- ject. OMV’s total payments under the financing agree- ments for Nord Stream 2 amounted to around EUR 729 mn. Nord Stream 2 AG announced mechani- cal completion of the offshore part of the first line on June 10, 2021, and of the second line on Septem- ber 10, 2021. The first fill of technical gas was com- pleted for the first line on October 18, 2021, and for the second line on December 29, 2021. Following the an- nounced US sanctions on Nord Stream 2 AG on Febru- ary 22, 2022, OMV will recognize a value adjustment charge of EUR 987 mn (loan plus accrued interest as of December 31, 2021) due to the fact that receivables from Nord Stream 2 AG may be unrecoverable. Please refer to Note 37 „Subsequent Events” of the Financial Statements for the most recent developments of the Russia-Ukraine crisis and the expected impact on OMV Group’s financials. Innovation and new technologies OMV actively explores alternative feedstock, technolo- gies, and fuels with the aim of developing a well-diver- sified, competitive future portfolio. Efforts and re- sources focus on chemical recycling for post-consumer plastic waste. Additional attention is given to the pro- duction of conventional and advanced biofuels, syn- thetic fuels, and green hydrogen as future fuels for the hard-to-electrify transportation segment, and as precur- sors for sustainable chemicals. OMV has taken important steps in 2021 for reducing the carbon footprint of the fuels product portfolio by launching the new innovative fuels OMV EcoMotion Diesel and OMV EcoPerform Diesel for business cus- tomers. OMV EcoMotion Diesel contains up to 33% re- newable components. Thanks to this high share of bio- components and carbon offsetting of the remaining share, this 100% carbon-neutral diesel is the first of its kind in Austria. OMV has also taken steps to implement the Co-Pro- cessing technology in the Schwechat refinery. This technology enables OMV to process biogenic feed- stocks (e.g., domestic rapeseed oil) together with fossil- based materials in an existing refinery hydrotreating plant during the fuel refining process. The final invest- ment decision amounting to around EUR 200 mn for 65 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT converting a refinery plant to produce 160,000 t of bio- fuels per year was made in 2020. This will reduce OMV’s carbon footprint by up to 360,000 t by substitut- ing fossil diesel. Operations are scheduled to begin by 2023. OMV signed a supply contract with AustroCel Hallein to supply OMV with advanced bioethanol totaling up to 1.5 mn l per month starting in January 2021. This will reduce emissions by around 45,000 t of CO2 per year. Unlike conventional biofuels, advanced fuels do not compete with food production. The amount that can be blended into the fuel pool is not capped, as is the case with waste-based fuels. The principal sources of ad- vanced fuels include biomass fraction from mixed mu- nicipal or industrial waste, straw, animal manure, or residues from forestry and wood processing as well as waste streams. OMV is developing its own proprietary technology to convert one of these biomasses into ad- vanced fuel. The next step is a pilot plant at the Schwechat refinery. OMV also collaborates with tech- nology providers, industry partners, and academic insti- tutions to produce advanced biofuels at scale. While the above bio- and synthetic products will pre- dominantly be sold as fuels initially due to a mandated market, they can also be used as chemical feedstock. OMV and its partners working on the UpHy project in- tend to produce green hydrogen for use in both the mo- bility sector and the refining process. OMV is develop- ing an electrolysis plant at the Schwechat refinery for this purpose, to be powered with renewable electricity, to produce zero-carbon hydrogen. The green hydrogen will initially be used for fuel hydrogenation. However, the ultimate goal is to develop commercial hydrogen fuel cells for transportation applications such as com- mercial buses and trucks. As a pioneer in hydrogen mobility, OMV operates five hydrogen filling stations in Austria. In 2020, OMV together with Daimler Trucks AG, IVECO, Shell, and the Volvo Group launched the H2Accelerate program. These partners are committed to creating the conditions necessary for a mass-market roll-out of hydrogen trucks in Europe. Fleets are ex- pected to operate first in regional clusters and along European high-capacity corridors. Over time, the clus- ters are going to be interconnected into a pan-Euro- pean network. OMV opened its first LNG filling station for heavy-duty trucks in Himberg in September 2021. This is another step toward the future of alternative fuels and sustaina- ble mobility underpinned by the freedom provided by technological solutions. During 2021, OMV continued installing photovoltaic panels on filling stations in multiple countries. They have now been installed on 170 filling stations with the aim of continuing this expansion in 2022. The panels reduce the carbon footprint of filling stations and im- prove the economic efficiency of operations. Digitalization In 2021, OMV continued its digitization journey. Several digital projects have been implemented, creating imme- diate value and accelerating our business strategy im- plementation. Predictive analytics is an integral part of our refineries and enables OMV to achieve its goals faster. As an ex- ample of this, the first phase of predicting the cleaning schedule of heat exchangers went live. This project will generate annual savings of EUR 1.7 mn thanks to data- driven optimization and contribute significantly to our sustainability strategy by preventing carbon emissions totaling 25,000 t per year. Additional projects improved the performance of OMV’s Refining business. These included the digitalization of the shift book to optimize the efficiency of maintenance planning and the visualization of steam cracker assets in a 3D digital twin, which will speed up turnaround ac- tivities. The expected overall benefit of up to EUR 11 mn over the next five years clearly shows that digitalization is al- ready generating tangible value in OMV’s Refining business. In Marketing, the team kicked off a digital customer journey, which will grow sales and service activities as well as further improve customer experience using the latest Salesforce platform. Combined with a new cus- tomer portal as a one-stop shop for all requests, in- voices, and orders, we deliver a single platform cover- ing end-to-end customer interactions. Personalized offers and experiences for our retail cus- tomers developed using data-driven insights boosted loyalty growth significantly. In 2021, personalized offers resulted in a 18% spend increase and 75% reduction in the churn rate of OMV’s loyalty program participants. The new mobile payment concept in retail aims to virtu- alize the B2B card and move towards a fully digital end- to-end experience to meet the emerging needs of a fast, simple, and secure fuel supply. The integration of this service into the new B2C mobile app will take cus- tomer experience to the next level. 66 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT The new state-of-the-art digital outdoor payment termi- nal was launched successfully in seven selected filling stations (five in Romania, one in Austria, and one in Slovenia), which led to reduced waiting time and in- creased customer satisfaction. A steady growth in num- ber of transactions at the new terminals was registered; almost 25% of all transactions were paid by using the new digital service already. OMV is a European market pioneer in switching to SAP’s latest enterprise resource planning system, S/4HANA. This is one of the backbones of OMV’s fu- ture digitalization activities and sets new standards for data management, business process automation, and digitalization in finance, supply, logistics, refining, sales, and retail. The automation of business processes replaced ap- proximately 250,000 hours of manual work for total hours freed up valued at over EUR 2.5 mn per year. Projects applying artificial intelligence unlocked an ad- ditional business value of more than EUR 1.2 mn. Ex- amples of such projects include decreased sample test- ing costs in our refinery laboratories and the prevention of stock shortages as a result of an improved fuel sales forecast in our retail network considering seasonality and COVID-19 effects. 67 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Chemicals & Materials In the Chemicals & Materials segment, OMV is now one of the world’s leading providers of advanced and circular polyolefin solutions and a European market leader in base chemicals, fertilizers1, and plastics recycling. The Company supplies services and products to customers around the globe through Borealis and its two joint ventures: Borouge (with ADNOC, based in the UAE and Singapore) and Baystar (with TotalEnergies, based in the United States). At a glance Clean Operating Result thereof Borealis excluding JVs thereof Borealis JVs Special items Operating Result Capital expenditure1 Ethylene indicator margin Europe Propylene indicator margin Europe Polyethylene indicator margin Europe Polypropylene indicator margin Europe Utilization rate steam crackers Europe Polyolefin sales volumes thereof polyethylene sales volumes excl. JVs thereof polypropylene sales volumes excl. JVs thereof polyethylene sales volumes JVs2 thereof polypropylene sales volumes JVs2 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR/t in EUR/t in EUR/t in EUR/t in mn t in mn t in mn t in mn t in mn t 2021 2,224 1,437 534 (396) 1,828 835 468 453 582 735 90% 5.93 1.82 2.13 1.25 0.74 2020 519 219 81 1,049 1,568 4,360 435 364 350 413 73% 5.95 1.76 2.12 1.30 0.77 ∆ n.m. n.m. n.m. n.m. 17% (81)% 8% 25% 67% 78% 17 (0)% 3% 1% (4)% (4)% Note: As of Q1/21, the Downstream business segment was split into Refining & Marketing and Chemicals & Materials. For comparison only, 2020 figures are presented in the new structure. Following the closing of the acquisition of the additional 39% stake on October 29, 2020, Borealis is fully consolidated in OMV’s figures and the at-equity contributions stemming from Borealis JVs are reported separately. 1 Capital expenditure including acquisitions, notably the acquisition of an additional 39% stake in Borealis in Q4/20 for USD 4.68 bn 2 Pro-rata volumes of at-equity consolidated companies Financial performance The clean Operating Result more than quadrupled to EUR 2,224 mn (2020: EUR 519 mn), mainly attributa- ble to substantially higher European polyolefin margins, positive inventory valuation effects, and the full consoli- dation of Borealis. The contribution of OMV base chemicals increased, mainly fueled by higher ethylene and propylene indica- tor margins. The ethylene indicator margin Europe grew by 8% to EUR 468/t (2020: EUR 435/t), while the propylene indicator margin Europe increased by 25% to EUR 453/t (2020: EUR 364/t). Both saw strong demand throughout the year, in particular in the second half. Propylene indicator margin was able to benefit from a demand recovery in the automotive sector. The utilization rate of the European steam crackers operated by OMV and Borealis improved significantly by 17 percentage points to 90% in 2021 (2020: 73%). 2020 was impacted by the unplanned outage of the Stenungsund steam cracker that began in Q2/20. The contribution of Borealis excluding JVs soared by EUR 1,219 mn to EUR 1,437 mn (2020: EUR 219 mn), primarily due to the outstanding performance of the pol- yolefin business and increased contributions from the base chemicals and nitrogen businesses. The Borealis base chemicals business improved largely on account of positive inventory valuation effects and higher capac- ity utilization at the Stenungsund steam cracker. The polyolefin business saw an unprecedented rise in re- sults, which was driven by a steep increase in margins and positive inventory valuation effects, but also bene- fited from higher volumes. The polyethylene indicator margin Europe increased by 67% to EUR 582/t (2020: EUR 350/t) while the polypropylene indicator margin Europe saw a stronger increase, by 78%, to EUR 735/t 1 On February 2, 2022, Borealis received a binding offer from EuroChem for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 68 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT (2020: EUR 413/t). Both indicator margins were sup- ported by strong demand in the European markets cou- pled with a tightening supply-demand balance. In par- ticular at the beginning of 2021, a heavy maintenance season limited regional supply while logistic constraints throughout the year inhibited additional supply from outside of Europe. Polyethylene sales volumes im- proved by 3%, while polypropylene sales volumes grew by 1% compared to 2020. The energy and healthcare industries in particular drove demand, while volumes in the consumer industry softened. The contri- bution from the nitrogen business grew compared to 2020, mainly due to positive inventory effects and a positive effect from the reclassification as an asset held for sale. The contribution of Borealis’ JVs grew substantially to EUR 534 mn in 2021 (2020: EUR 81 mn). The full con- solidation of Borealis and the subsequent separate re- porting of the JVs were the main factors in this in- crease, while much higher polyolefin prices in the Asian markets and in the United States fueled the result. Pol- yethylene and polypropylene sales volumes generated by the JVs decreased by 4% compared to 2020, mainly on account of lower Borouge sales volumes due to lo- gistics constraints in Asia. Baystar sales volumes re- mained stable in 2021 despite being impacted by the Texas freeze in the first quarter of 2021. Net special items amounted to EUR (396) mn (2020: EUR 1,049 mn) and were mainly related to the impair- ment of the nitrogen business of Borealis. In 2020, net special items were mainly related to a step-up in the valuation of the previously owned 36% share in Bore- alis. The Operating Result of Chemicals & Materials grew to EUR 1,828 mn compared to EUR 1,568 mn in 2020. Capital expenditure in Chemicals & Materials amounted to EUR 835 mn (2020: EUR 4,360 mn). Cap- ital expenditure in 2020 was mainly related to the ac- quisition of an additional 39% stake in Borealis for USD 4.68 bn. In 2021, besides ordinary running business in- vestments, organic capital expenditure predominantly related to investments for the construction of the new propane dehydrogenation plant in Belgium by Borealis. Business overview The Chemicals & Materials segment was established at the beginning of 2021, following the acquisition of the majority stake in Borealis at the end of 2020. OMV sub- stantially grew its chemical business and extended the value chain into polymers with this acquisition. Through its subsidiary Borealis, OMV is now one of the world’s leading providers of advanced and circular polyolefin solutions and a European market leader in base chemi- cals, fertilizers, and plastics recycling. The segment comprises base chemicals production in- tegrated with the refineries in Austria and Germany op- erated by OMV; the Borealis business of base chemi- cals, polyolefins, and fertilizers; and the joint ventures Borouge and Baystar. With a strong European footprint and activities through Borealis and its two joint ven- tures, Borouge (with ADNOC, based in the UAE and Singapore) and Baystar (with TotalEnergies, based in the United States), the Group is active in over 120 countries. Base chemicals Base chemicals are building blocks for the chemical in- dustry and are transformed into plastics, packaging, clothing, and many other consumer products. While the OMV-operated steam crackers in Schwechat and Burghausen mainly use naphtha as a feedstock, the steam crackers operated by Borealis in Stenung- sund and Porvoo feature high feedstock flexibility and are able to use naphtha, butane, ethane, propane, or LPG mix as feedstock. In Kallo, Borealis runs a pro- pane dehydrogenation unit based on 100% propane feedstock. OMV Group produces base chemicals such as olefins (ethylene and propylene), aromatics, butadiene, high- purity isobutene, benzene, phenol, and acetone. ▸ Olefins (ethylene and propylene) are important chemical building blocks to produce, among other things, polyolefins (polyethylene and polypropyl- ene), which are in turn used to manufacture a wide variety of consumer and industrial products. ▸ Aromatics such as benzene are used as starting materials for consumer products, including clothing, pharmaceuticals, cosmetics, computers, and sports equipment. 69 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT ▸ C4s (e.g., butadiene, butenes) are used in a variety of applications, with butadiene primarily used in manufacturing synthetic rubber, making it a funda- mental material for the tire and automotive indus- tries. Butenes are used in specialty chemicals, such as oxo-alcohols for plasticizers and as polyols for coatings and synthetic lubricants. ▸ High-purity isobutene is a feedstock for key chemical products like adhesives, lubricants, and vitamins. ▸ Phenol and acetone are sold mainly to the polycar- bonate and epoxy resin industries. Phenol is also used in phenolic resins and in caprolactam. Ace- tone is also an ingredient in solvents and MMA for PMMA (plexiglass). In general, the 2021 market environment for base chemicals was characterized by a recovery from COVID-19, bad weather conditions in the US Gulf Coast region, and logistics constraints throughout the whole year. In comparison to 2020, high feedstock prices drove prices for base chemicals upwards in 2021 and did not negatively impact indicator margins. In Q1/21, margins remained at 2020 levels, but strongly recovered for all products from Q2/21 onward. This development was at- tributable to overall robust base chemicals demand in all derivates and received particular support from con- tinued strong global demand in polyolefins. Propane dehydrogenation (PDH) margins remained at a satis- factory level, despite increasing propane prices, as the demand for propylene remained elevated. In the sec- ond half of 2021, ethylene and propylene indicator mar- gins remained at high levels. Toward the end of the year, contract prices reached all-time highs due to strong demand and a tight supply amid high power and natural gas prices. Butadiene indicator margins also improved again in Q2/21, reflecting a recovery in the automotive sector. However, recovery was limited due to supply chain constraints, in particular regarding the availability of semiconductor chips. It was mainly the weak Asian de- mand that negatively impacted butadiene margins in the last quarter of 2021. Demand for benzene was healthy throughout the year. Prices, and consequently margins, showed high volatil- ity, mainly on account of supply/demand balances. Due to weather events in the United States and unplanned plant outages, peak margins were reached in Q2/21. Despite a weak fourth quarter, the average indicator margin for benzene in 2021 by far outpaced levels seen in 2020. 70 Polyolefins Following the acquisition of the majority stake in Borealis, OMV Group extended its value chain to poly- mers and became one of the world’s leading providers of advanced and circular polyolefin solutions. Through Borealis, the Company is the second largest polyolefin producer in Europe and among the top ten producers globally. Borealis operates seven polyolefin plants located in Schwechat, Stenungsund, Porvoo, and Burghausen, where they are integrated with steam crackers, as well as in Beringen and Kallo, where they are integrated with the existing PDH facility, and in Antwerp. In addi- tion, Borealis operates several compounding plants in Europe, the United States, South Korea, and Brazil. The value-add polyolefin products manufactured by Bo- realis are the foundation of many valuable plastics ap- plications that are an intrinsic part of modern life. Ad- vanced Borealis polyolefins have a role to play in sav- ing energy along the value chain and promoting more efficient use of natural resources. Borealis works closely with its customers and industry partners to pro- vide innovative plastics solutions that create value in a variety of industries and segments. These solutions make end products safer, lighter, more affordable, and easier to recycle. In short: They enable more sustaina- ble living. Borealis offers advanced polyolefins for virgin and circular economy solutions, servicing the following key industries: consumer products, energy, healthcare, infrastructure and mobility. In 2021, margin development in the polyolefins industry was affected by high demand and limited supply. To- ward the end of 2020, demand had started to improve, following government economic policies meant to stim- ulate the economy after COVID-19 containment measures. This trend continued in 2021, where margin development in the polyolefins industry was affected by high demand paired with limited supply. These sup- ply/demand imbalances were caused by a combination of multiple factors. At the end of 2020, force majeure caused multiple EU producers to halt operations at a time when stock levels are normally kept low for the year-end, resulting in pressure on customers. Further- more, the situation worsened at the beginning of 2021 due to three key factors. Firstly, a number of plants paused their operations to perform routine mainte- nance, which in many cases was rescheduled from 2020. Secondly, an unprecedented winter storm im- pacted polyolefin production capacity in the US state of Texas. Thirdly, logistics constraints restricted the ability to redirect volumes toward imbalanced markets. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT The above-mentioned capacity constraints, combined with disruption in the shipping industry, exacerbated supply scarcity throughout Q2/21, until eventually im- ports – mainly from the Middle East – started increas- ing, offering some relief to the market. From Q3/21 onwards, new dynamics continued to im- pact the market. A sudden feedstock, material, and util- ities cost increase, as well as the spread of new COVID-19 variants, followed by subsequent contain- ment measures, led to high levels of market uncer- tainty. The Borealis polyolefins segment was able to continue serving its customers successfully throughout this pe- riod, offering high-quality products and a highly secure supply. Renewables and circular chemicals Plastics continue to play a vital role in the economy and in our business, making our life more efficient, conven- ient, and safe. Yet, when insufficient effort is made to recover and reuse plastics, most of them end up in landfills. The vision of a circular economy – where we optimize resource efficiency and reuse, recycle and re- purpose endlessly – is both a business imperative and an opportunity. Demand for recycled plastics is growing due to increasing public awareness of the importance of using resources sustainably for a climate-neutral fu- ture. The circular economy opens up new ways to reinvent the economy in the interest of preserving natural capital and minimizing waste. OMV and Borealis are pursuing various initiatives in mechanical and chemical recy- cling, design for recycling (DfR), and circular polyole- fins, manufactured with second generation renewable feedstock. While mechanical recycling has proven to be effective and will likely remain the eco-efficient method of choice in the foreseeable future, chemical recycling will play an increasing role to complement mechanical recycling. To expand and accelerate its chemical recycling activi- ties, Borealis took a minority stake in Renasci N.V., a provider of innovative recycling solutions and creator of the novel Smart Chain Processing (SCP) concept. The SCP concept is a proprietary method (EP patent appli- cation approved) of maximizing material recovery to achieve zero waste. As part of the agreement, Borealis will source a projected 20 kt of circular pyrolysis oil an- nually from Renasci’s Oostende facility to produce chemicals and polyolefins based on chemically recy- cled feedstock. The Group also plans to purchase me- chanically recycled material. Borealis will collaborate closely with Renasci to advance and scale-up the SCP technology. This includes developing facilities which operate entirely on household waste as feedstock. In December 2021, OMV took a major step in scaling up its chemical recycling capacities by making the final investment decision to build a chemical recycling demo plant based on its proprietary ReOil® technology. The plant has a capacity of 16,000 t p.a. The feedstock will consist mainly of polyolefins and will be sourced in Aus- tria in close cooperation with local waste management companies. Examples of such plastic waste include food packaging, plastic cups, lids from takeout coffee, and confectionery packaging. This is OMV’s next step toward an industrial-scale plant with a processing ca- pacity of up to 200,000 t/year planned for 2026. Fertilizers, melamine, and technical nitrogen products OMV, through its subsidiary Borealis, is a leading Euro- pean manufacturer and distributor of fertilizers, tech- nical nitrogen products, and melamine: The Company is Europe’s third largest nitrogen fertilizer manufacturer and the world’s third largest melamine producer by pro- duction capacity utilized. Borealis produces and then distributes and supplies fertilizers and technical nitro- gen products each year via its commercial organiza- tion, Borealis L.A.T. This comprises more than 60 ware- houses across Europe and has an inventory capacity of over 700,000 t. Early 2021, Borealis and TOMRA announced the oper- ational start of their advanced mechanical recycling demo plant in Lahnstein, Germany. This is a state-of- the-art plant that processes both rigid and flexible plas- tic waste from households. The purpose of this demo plant is to generate high-quality material fit for use in highly demanding applications. Technical success will set the groundwork for a commercial-scale advanced mechanical recycling plant. In 2020, OMV Group announced that it had started the divestment process for the nitrogen business unit, which includes fertilizers, technical nitrogen, and mela- mine. The Company’s share (77.5%) in Rosier, which operates the production sites in the Netherlands and Belgium, is not being considered in this sales process. In February 2022, Borealis received a binding offer from EuroChem for the acquisition of its nitrogen busi- ness. 71 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Joint ventures Borouge Established in 1998, Borouge is a true success story of the long-term partnership with ADNOC. The joint ven- ture has successfully combined the leading-edge Borstar® technology with competitive feedstock and ac- cess to growing Asian markets. Through Borouge, the Group’s footprint reaches all the way to the Middle East, the Asia-Pacific region, the In- dian subcontinent, and Africa. Production company Borouge ADP (Borealis 40%, ADNOC 60%) is based in the United Arab Emirates, while Borouge PTE, which handles sales and marketing (Borealis 50%, ADNOC 50%), is headquartered in Singapore. The company employs over 3,000 people, serving customers in 50 countries. In 2021, Borouge recorded another successful year of production, optimizing operations with the available feedstock. Continued focus on innovation and commer- cial excellence, supported by an elevated market price environment, enabled Borouge to achieve higher prices compared to 2020. Baystar (Borealis 50%, TotalEnergies 50%) Baystar is a joint venture between TotalEnergies Petro- chemicals and Refining USA, Inc. (TEPRI), a wholly owned subsidiary of TotalEnergies SE and Novealis Holdings LLC (Novealis), a wholly owned subsidiary of Borealis AG. TotalEnergies contributed its award-winning Bayport fa- cilities to the JV and will be the operator of the cracker in Port Arthur. Borealis brings its proprietary Borstar® technology to North America for the first time along with the Bayport site for unique polyethylene grades for the most demanding applications. Baystar achieved a record net profit in 2021 supported by favorable market conditions. The record result was achieved despite the negative impact from winter storm Uri, which hit Texas in February 2021, resulting in over- all lower sales and production volumes compared to previous years. Baystar’s readiness efforts have pro- gressed through the year as the Baystar organization prepares to become a fully integrated 1 mn t polyeth- ylene company with the start-up of the ethane cracker and Borstar Bay 3 plant. Growth projects Despite the ongoing adverse effects of the pandemic, Borealis has been able to make meaningful progress on its important global growth projects in the Middle East, North America, and Europe in 2021. Borouge’s fifth Borstar polypropylene plant (PP5) was started up successfully in February 2022. It increases Borouge’s current production capacity to around 5 mn t/year. Despite COVID-19-related disruptions, the pro- ject was completed on time and without cost overruns. In November 2021, Borealis and ADNOC signed a USD 6.2 bn final investment agreement to build the fourth facility at the Borouge polyolefin manufacturing complex in Ruwais (UAE). Borouge’s expansion is vital for serving growing customer demand for differentiated polyolefins solutions in energy, infrastructure, and ad- vanced packaging in Asia, Africa, and the Middle East. After completion of the Borouge 4 expansion, Borouge will be the world’s largest single-site polyolefin com- plex. Cutting-edge technologies will be employed to im- prove energy efficiency and reduce emissions. The plan is to eliminate continuous flaring altogether. The new facility will draw on renewable energy sources to power some of its operations. An exploratory study cur- rently underway will determine whether the installation of a carbon capture unit could lower Borouge 4 emis- sions by up to 80%. In the state of Texas in the United States, the Bay- star™ growth project will add more than 1 mn t of an- nual polyolefin production capacity and, most crucially, enable Borealis to supply locally manufactured Borstar products to its North American customers for the first time. The unusually hard winter freeze that hit the re- gion in 2021 had adverse effects on nearly all petro- chemical operations on the Texas Gulf Coast, and the Baystar project was no exception. While start-up of the new ethane-based steam cracker has been delayed, on-site construction of the polyethylene unit is continu- ing apace. The new world-scale PDH plant under construction in Kallo (Belgium) adjacent to the existing PDH facility, it is planned to begin operations in 2023. With an invest- ment of around EUR 1 bn, this is among the largest projects in the petrochemical industry in Europe today, and the largest ever for Borealis on the continent. A stellar safety record has been achieved despite the enormity of the project, which includes delivery of one of the largest single pieces of equipment ever shipped in one piece to the Port of Antwerp. 72 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT In July, Borealis announced it had acquired a 10% mi- nority stake in Renasci N.V., a Belgium-based provider of innovative recycling solutions and creator of the novel Smart Chain Processing concept. This purchase was subsequent to an earlier offtake agreement with Renasci to source around 20 kt per year of circular py- rolysis oil, a product of chemical recycling which can be used as feedstock. Taken together, the agreements help accelerate the shift to plastics circularity in an eco- efficient way. Innovation and new technologies OMV’s ReOil® proprietary thermal cracking technology was developed to meet the European Commission’s targets for the circular economy and to fulfill future packaging recycling quotas. The ReOil® plant at the Schwechat refinery, which has a capacity of 100 kg/h, has been recycling post-consumer and post-industrial plastics into synthetic crude oil in a pyrolysis process since 2018. This synthetic crude is then processed mainly into monomers and other hydrocarbons in the Schwechat refinery. The pilot plant has been running for a total of 13,000 hours since its commissioning and thus enabled an improvement in the thermal cracking process and supported the further scale-up of the Re- Oil® technology. OMV and Borealis are pursuing the clear ambition of becoming a leading player in chemical and mechanical recycling technologies. At Borealis, innovation is fundamental for contributing to the circularity of polyolefins and creating a more sus- tainable way of life. It also helps the Group improve its competitiveness and enhance its efficiency and sus- tainability – and therefore has a direct impact on peo- ple, the planet, and profit. The change in Borealis’ own- ership structure and subsequent partnership with OMV has further increased the Group’s focus on the circular- ity of polyolefins and the availability of renewable hy- drocarbons. In the polyolefins business, our innovation activities concentrate on providing solutions to societal chal- lenges as defined in the United Nations Sustainable Development Goals. Examples include best-in-class materials for producing water and gas pipes, insulation for cables, and capacitor film used for transporting goods. In the Polyolefins business unit, key achievements in 2021 included: ▸ Infrastructure: The PE100 RC Pipe product family was completed with the introduction of colored and low-sagging grades, offering performance that is among the best in the market and enabling the even wider application of PE pipes in the construc- tion industry. ▸ Consumer products: The stiff/tough film product FX1003 was launched. The product performs at least as well as the best available materials on the market and has a superior ability to blend with post- consumer recyclates. ▸ Circular economy solutions: Borealis launched the white, 100% post-consumer recyclate grade AH1040MO-90, which has been developed for in- jection molding for houseware products and large thin-wall packaging items. The polyolefins business commercially launched 47 new products, beating its “21 in 2021” target. Achieving these launches in such a challenging year demon- strates that Borealis is a market leader in innovation and remains true to its purpose of reinventing for more sustainable living. Similarly, in the base chemicals business, Borealis looks to find innovative approaches for using new feed- stock sources, improving resource efficiency, and re- ducing energy consumption and flaring, which in turn reduces emissions of greenhouse gases and other sub- stances such as dust. These activities also include CO2 avoidance and CO2 utilization opportunities, as well as chemical recycling. During 2021, Borealis launched six new grades pro- duced with renewable feedstock material as part of the Bornewables™ portfolio. Bornewables offer product properties equal to fossil-based products. This allows our partners to have a quick and easy transition from fossil-based polypropylene to a renewable feedstock- based polypropylene. 73 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT The online portal for polyolefins customers (MyBore- alis) supports customer service representatives and sales managers in their daily interactions with custom- ers. It puts easy order management at the customer’s fingertips, along with a complete library of order, prod- uct, and complaint documentation. The application works around the clock, providing instant access to up- to-date information, with ordering fully integrated with supply chain and IT processes. A single global portal supports eight languages, allowing organizations in Eu- rope, North America, and South America to use it. By the end of 2021, 18% of the order volume was via the portal, up from 14% at the start of the year. In 2021, a project to explore the possibilities of using autonomous robots was kicked off. The activities suited to such robots, such as carrying out inspections, are being researched in a proof of concept to assess the feasibility of this kind of solution. Technologies such as virtual reality (for safety training and technical instruc- tions/training), smart glasses (for remote assistance in the field), and 3D technology (for printing machinery parts) are also in the prototype-building or set-up phase. Interactive Safety Training for the Five Life Saving and Process Safety Rules is an innovative gamified interac- tive learning solution that helps employees and con- tractors learn the rules through remote training and tests. The training combines a 3D-modelled plant envi- ronment, an engaging story, and motivating gamifica- tion elements to simulate scenarios, enabling better knowledge retention and faster learning than traditional methods. Employees learn the Life Saving Rules and Process Safety Rules in a very immersive way and can apply theory to practice without stopping production or risking actual injury. Around 14,000 training modules have already been completed across the entire Bore- alis workforce. Projects relating to circular economy solutions (CES) are ongoing to explore collaboration opportunities with start-up companies, to create product and digital solu- tions for scalable and traceable closed-loop material flows, and to reuse systems (e.g., coffee cups and food trays). These systems use a digital platform built by the Borealis Digital Studio and give the necessary data in- sights to maximize reuse, accommodate closing the loop, and recycle plastic waste once it can no longer be reused and reaches the end of its life. The systems thereby create new and profitable business solutions. Borealis entered into collaborations with various organi- zations with complementary competencies in 2021. The aim here is to accelerate Borealis’ progress towards achieving circularity in manufacturing and using poly- olefins, and reducing its carbon footprint. The following are the main partnerships: ▸ Borealis reached an agreement with Renasci Oost- ende Recycling NV to acquire the entire output of its chemical recycling plant. The first quantities of the raw material obtained through chemical recy- cling were successfully processed at the Porvoo cracker during a test run in September 2021. Bore- alis expects to establish regular supply of the recy- cled material, which will be used as an important source of raw materials for polyolefins production. ▸ Together with TOMRA and Zimmerman, the Group has started a state-of-the art recycling plant to pro- duce recyclates that perform very close to a virgin material. ▸ Borealis has an extensive patent portfolio, compris- ing around 8,300 granted patents and around 3,000 pending patent applications. In 2021, Bore- alis filed 133 new priority patent applications, which further contribute to safeguarding Borealis’ proprie- tary technologies and protecting its licensees. Many patents also protect products and applications. Digitalization Stepping up digitalization in Chemicals & Materials is one of the key drivers for transformation. Not only will it increase the Group’s productivity and improve cus- tomer experience, it will also support achieving sustain- ability goals. In particular, digital solutions for the circu- lar economy of plastics will become more important in achieving the Group’s carbon neutrality journey. For that reason, in 2017 Borealis decided to implement a Digital Program, which led to the creation of the Bore- alis Digital Studio in 2018. The Digital Studio is Bore- alis’ creative and agile enabler for developing smart so- lutions for customers and employees. It works closely with the IT department and consists of a diverse, cross- functional team of digital professionals, including de- signers, usability experts, business analysts, software developers, and engineers. Its mission is supporting the Group’s businesses to adapt to a rapidly changing environment and keeping Borealis sustainably profita- ble by creating digital, innovative solutions that have a positive impact on the Group’s people and business, and the environment. Adding value is key when creat- ing digital solutions, and end-users are always at the heart of the process, as the solutions are built both with and for them, following the agile methodology. 74 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Outlook Market environment In 2022, OMV expects the average Brent crude oil price to be around USD 75/bbl (2021: USD 71/bbl). For 2022, the average realized gas price is anticipated to be above EUR 25/MWh (2021: EUR 16.5/MWh). Group In 2022, organic CAPEX is projected to come in at around EUR 3.5 bn1 (2021: EUR 2.6 bn), including non- cash effective CAPEX related to leases of around EUR 0.6 bn. Exploration & Production OMV expects total production to be around 470 kboe/d in 2022 (2021: 486 kboe/d). Organic CAPEX for Exploration & Production is anticipated to come in at around EUR 1.3 bn in 2022 (2021: EUR 1.1 bn). Exploration and Appraisal (E&A) expenditure is expected to be around EUR 220 mn in 2022 (2021: EUR 210 mn). Refining & Marketing The OMV refining indicator margin Europe is expected to be around USD 4.5/bbl in 2022 (2021: USD 3.7/bbl). In 2022, fuels and other sales volumes in OMV’s mar- kets in Europe are projected to be slightly higher than in 2021 (2021: 16.3 mn t). Retail and commercial mar- gins are forecast to be slightly below those in 2021. In 2022, the utilization rate of the European refineries is expected to be around the prior-year level (2021: 88%). Turnarounds are planned at the Schwechat refinery in the second quarter and at the Burghausen refinery in the third quarter. In 2022, natural gas sales volumes are projected to be slightly below the 2021 level (2021: 196.4 TWh). Organic CAPEX in Refining & Marketing is forecast at around EUR 0.8 bn in 2022 (2021: EUR 0.6 bn). Chemicals & Materials In 2022, the ethylene indicator margin Europe is ex- pected to be around the 2021 level (2021: EUR 468/t). The propylene indicator margin Europe is expected to be around the 2021 level (2021: EUR 453/t). In 2022, the steam cracker utilization rate in Europe is expected to be slightly below the 2021 level (2021: 90%). Turnarounds are planned at the Stenungsund steam cracker in the second quarter and at the Burghausen steam cracker in the third quarter. In 2022, the polyethylene indicator margin Europe is forecast to be around EUR 400/t (2021: EUR 582/t). The polypropylene indicator margin Europe is expected to be around EUR 600/t (2021: EUR 735/t). In 2022, the polyethylene sales volumes excluding JVs are projected to be above the 2021 level (2021: 1.82 mn t). The polypropylene sales volumes excluding JVs are expected to be slightly above the 2021 level (2021: 2.13 mn t). Organic CAPEX related to Chemicals & Materials is predicted to be around EUR 1.3 bn in 2022 (2021: EUR 0.8 bn).  For information about the longer-term outlook, see the Strategy chapter. 1 Organic capital expenditure is defined as capital expenditure including capitalized Exploration and Appraisal expenditure and excluding acquisitions and contin- gent considerations. 75 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Risk Management Like the oil, natural gas, and chemical industry as a whole, OMV is exposed to a variety of risks – including market and financial risks, operational risks, and strategic risks. The Group’s risk management processes focus on identification, assessment, and evaluation of such risks and their impact on the Group’s financial stability and profitability. The objective of these activities is to actively manage risks in the context of the Group’s risk appetite and defined risk tolerance levels in order to achieve OMV’s long- term strategic goals. It is OMV’s view that the Group’s overall risk is signifi- cantly lower than the sum of the individual risks due to its integrated nature and the fact that various risks par- tially offset each other. The balancing effects of indus- try risks, however, can often lag or weaken. OMV’s risk management activities therefore focus on the net risk exposure of the Group’s existing and future portfolio. The interdependencies and correlations between differ- ent risks are also reflected in the Company’s consoli- dated risk profile. Risk management and insurance ac- tivities are centrally coordinated at the corporate level by the Treasury and Risk Management department. This department ensures that well-defined and con- sistent risk management processes, tools, and tech- niques are applied across the entire organization. Risk ownership is assigned to the managers who are best suited to oversee and manage the respective risk. The overall objective of the risk policy is to safeguard the cash flows required by the Group and to maintain a strong investment-grade credit rating in line with the Group’s risk appetite. OMV is closely monitoring the development of the con- sequences of the COVID-19 pandemic and regularly evaluating the impact on the Group’s cash flow and li- quidity position. OMV monitors the increasing geopolitical tensions and deepening crisis between Russia and Ukraine on a continuous basis and regularly reviews the potential im- pact on our business activities and assets. In particular, OMV assessed and continues to assess the risks re- lated to international sanctions on Nord Stream 2 AG and the impact on repayment of the loan provided to Nord Stream 2 AG by OMV. From today’s point of view no direct impact on OMV’s Russian equity gas produc- tion is expected. However, OMV continues to monitor potential restrictions to related dividend flows. The credit risk portfolio associated with counterparties and banks located in Russia and / or potentially targeted by international sanctions (or restrictions on international money transfers) is under close review. International trade restrictions and sanctions could also lead to a fur- ther devaluation of the Russian Ruble against the Euro and the US Dollar. Disruptions in Russian commodity flows to Europe could result in further increases in Eu- ropean energy prices and accelerate the risk of cost in- flation. From today’s point of view, OMV does not ex- pect natural gas exports from Russia to stop. In the event of short-term gas supply disruptions from Russia, OMV can use the remaining gas in storage to supply customers and has access to other liquid gas market hubs in Europe. In such an event, an emergency team will be set up based on pre-defined internal processes. This emergency team will continuously analyze and evaluate the situation so that appropriate measures can be taken if necessary. It is also responsible to com- municate and coordinate all activities with the Austrian regulator e-control. Please refer to Note 37 „Subse- quent Events” of the Financial Statements for the most recent developments of the Russia-Ukraine crisis and the expected impact on OMV Group’s financials. Enterprise-Wide Risk Management Financial and non-financial risks are regularly identified, assessed, and reported through the Group-wide Enter- prise Wide Risk Management (EWRM) process. The main purpose of OMV Group’s EWRM process is to deliver value through risk-based management and decision-making which is ensured by applying a “three lines of defense model” (1. business management, 2. risk management and oversight functions, 3. internal audit). The assessment of financial, operational, and strategic risks helps the Group leverage business op- portunities in a systematic manner. This ensures that OMV’s value grows sustainably. Since 2003, the EWRM system has helped enhance risk awareness and improve risk management skills across the entire organization, including at subsidiaries in more than 20 countries. OMV Group is constantly enhancing the EWRM process based on internal and external require- ments such as, for example, newly developing ESG (Environmental, Social, and Governance) reporting standards and frameworks. A cross-functional committee chaired by OMV Group CFO with senior management members of the OMV Group – the Risk Committee – ensures that the EWRM process effectively captures and manages material risks across OMV Group. 76 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT The process is facilitated by a Group-wide IT system supporting the established individual process steps: risk identification, risk analysis, risk evaluation, risk treatment, reporting, and risk review through continu- ous monitoring of changes to the risk profile. The over- all risk resulting from the bottom-up risk management process is computed using Monte Carlo simulations and compared against planning data. This is further combined with a top-down approach from the senior management view to capture risks associated with the Group’s strategy. The process also includes companies that are not fully consolidated. The EWRM process uses common risk terminology and language across OMV Group to facilitate effective risk communication, whereby ESG risks play a key role in the OMV risk tax- onomy. Twice a year, the results from this process are consolidated and presented to the Executive Board and the Audit Committee. In compliance with the Austrian Code of Corporate Governance, the effectiveness of the EWRM system is evaluated by the external auditor on an annual basis. The key financial and non-financial risks identified with respect to OMV’s medium-term plan are: ▸ Financial risks including market price risks and for- ▸ Operational risks, including all risks related to phys- eign exchange risks ical assets, production risks, project risks, person- nel risks, IT risks, HSSE, and regulatory/compli- ance risks ▸ Strategic risks arising, for example, from climate change, changes in technology, risks to reputation, or political uncertainties, including sanctions Financial Risk Management Market price and financial risks arise from volatility in the prices of commodities including the market price risks from European Emission Allowances, foreign ex- change (FX) rates, and interest rates. Also of im- portance are credit risks, which arise from the inability of a counterparty to meet a payment or delivery com- mitment. As an oil, gas, and chemical company, OMV has a significant exposure to oil, natural gas, and chemical prices. Substantial FX exposures include the USD, RON, NOK, NZD, SEK, and RUB. The Group has a net USD long position, mainly resulting from oil pro- duction sales. The comparatively less significant short positions in RON, NOK, NZD, SEK, and RUB originate from expenses in local currencies in the respective countries. Management of commodity price risk, FX risk, Eu- ropean Emission Allowances The analysis and management of financial risks arising from foreign currencies, interest rates, commodity prices, European Emission Allowances, counterparties, liquidity, and insurable risks are consolidated at the cor- porate level. Market price risk is monitored and ana- lyzed centrally in respect of its potential cash flow im- pact using a specific risk analysis model that considers portfolio effects. The impact of financial risks (e.g., commodity prices, currencies) on OMV Group’s cash flow and liquidity are reviewed quarterly by the Risk Committee, which is chaired by the CFO and comprises the senior management of the business segments and corporate functions. In the context of commodity price risk and FX risk, the OMV Executive Board decides on hedging strategies to mitigate such risks whenever deemed necessary. OMV uses financial instruments for hedging purposes to pro- tect the Group’s cash flow from the potential negative impact of falling oil and natural gas prices in the E&P segment. In the downstream business (including Refining & Mar- keting as well as Chemicals & Materials segments), OMV is especially exposed to volatile refining and chemical margins and natural gas prices, as well as in- ventory risks. Corresponding optimization and hedging activities are undertaken in order to mitigate those risks. Those include margin hedges as well as stock hedges. An optimization, trading, and hedging risk con- trol governance system defines clear mandates includ- ing risk thresholds for such activities. In addition, Emis- sion Compliance Management ensures a balanced po- sition of emission allowances by selling the surplus or covering the gap. Management of interest rate risk To balance the Group’s interest rate portfolio, loans can be converted from fixed to floating rates and vice versa according to predefined rules. OMV regularly analyzes the impact of interest rate changes on interest income and expense from floating rate deposits and borrow- ings. Currently the effects of changes in interest rates are not considered to be a material risk. Management of credit risk Significant counterparty credit risks are assessed, mon- itored, and controlled at the Group and segment level using predetermined credit limits for all counterparties, banks, and security providers. The procedures are gov- erned by guidelines at OMV Group level. Based on the high economic uncertainty resulting from the COVID-19 77 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT pandemic, special attention is paid to early warning sig- nals like changes in payment behavior. Operational risks The nature of OMV’s business operations exposes the Group to various health, safety, security, and environ- mental (HSSE) risks. Such risks include the potential impact of natural disasters as well as process safety and personal security events. Other operational risks comprise risks related to the delivery of capital projects or legal/regulatory non-compliance. All operational risks are identified, analyzed, monitored, and mitigated fol- lowing the Group’s defined risk management process. Control and mitigation of assessed risks take place at all organizational levels using clearly defined risk poli- cies and responsibilities. The key Group risks are gov- erned centrally to ensure the Group’s ability to meet planning objectives through corporate directives, in- cluding those relating to health, safety, security, envi- ronment, legal matters, compliance, human resources, and sustainability. Pandemic risk The global outbreak of the COVID-19 pandemic contin- ues to have a major impact on global economic devel- opment. Increases in COVID-19 cases around the world following the emergence of new virus variants combined with disruptions in supply chains and high price inflation could lead to delays in expected demand recovery. The consequences of the COVID-19 pan- demic and other disruptions currently being observed, as well as the extent and duration of the economic im- pact, cannot be reliably estimated at this time. OMV is responding to the situation with targeted measures to safeguard the Company’s economic stability and the secure supply of energy. The health and wellbeing of every employee is the top priority. ESG risk OMV puts a special emphasis on five Sustainability Strategy areas: HSSE, Carbon Efficiency, Innovation, Employees, Business Principles, and Social Responsi- bility. OMV Executive Board members regularly (at least quarterly) discuss current and upcoming environ- mental, climate, and energy-related policies and regula- tions; related developments in the fuels and natural gas markets; the financial implications of carbon emissions trading obligations; the status of innovation project im- plementation; and progress on achieving sustainability- related targets. OMV focuses on assessing the poten- tial vulnerabilities of the Company to climate change (e.g., water deficiency, droughts, floods, landslides), the impact of the Company on the environment, and 78 the mitigation actions that will ensure a successful tran- sition to a low-carbon environment (e.g., carbon emis- sion reductions, compliance with new regulatory re- quirements). IT risks As OMV’s activities rely on information technology sys- tems, the Group may experience disruption due to ma- jor cyber events. Security controls are therefore imple- mented across the Group to protect information and IT assets that store and process information. IT-related risks are assessed, monitored regularly, and managed actively with dedicated information and security pro- grams across the organization. OT (Operational Tech- nology) related risks are reflected in the assessment of process safety risks. Strategic risks In order to identify strategic risks which might have po- tential long-term effects on the Company’s objectives, OMV continuously monitors its internal and external en- vironment. Personnel risks Through systematic employee succession and develop- ment planning, Corporate Human Resources targets suitable managerial employees to meet future growth requirements in order to mitigate personnel risks. Political and regulatory risks In certain countries in its portfolio, OMV’s operations are exposed to geopolitical risks, including expropria- tion and nationalization of property; restrictions on for- eign ownership; civil strife and acts of war or terrorism; and political uncertainties in particular related to Libya, Yemen, Russia, and Tunisia, as well as other countries where OMV operates and has financial investments. However, OMV has extensive experience in dealing with the political environment in emerging economies. Also, possible regulatory changes may lead to disrup- tions or limitations in production or an increased tax burden. OMV continuously observes political and regu- latory developments in all markets that affect OMV’s operations. Country-specific risks are assessed before entering new countries. OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT OMV also evaluates the risk of potential US or EU sanctions and their impact on planned or existing oper- ations. OMV will ensure to stay in full compliance with all applicable sanction laws. In particular, risks due to political and regulatory developments both inside and outside Europe with potential unfavorable effects on the Nord Stream 2 project and on OMV’s activities in Rus- sia and the Black Sea region are regularly assessed and monitored. Climate change-related risks OMV consistently evaluates the Group’s exposure to risks related to climate change in addition to the market price risk from European Emission Allowances. Such risks comprise the potential impact of acute or chronic events like more frequent extreme weather events, or systemic changes to our business model due to a changing legal framework, or substitution of OMV’s products due to changing consumer behavior. OMV recognizes climate change as a key global challenge. We thus integrate the related risks and opportunities into the development of the Company’s business strat- egy. Measures that we implement to manage or miti- gate such risks are set out in the relevant sections of this report, particularly in Sustainability and Strategy.  For further details on risk management and the use of fi- nancial instruments, please refer to Note 28 of the Consoli- dated Financial Statements.  For further details on climate-change-related risks and their management, see the OMV Sustainability Report as well as Note 2 of the Consolidated Financial Statements.  For further details on health, safety, security, and environ- mental risks, please refer to the chapter Health, Safety, Security, and Environment in the Directors’ Report. 79 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Other Information Information required by section 243a of the Unternehmensgesetzbuch (Austrian Commercial Code) 1. 2. 3. 4. 5. 6. The capital stock amounts to EUR 327,272,727 and is divided into 327,272,727 bearer shares of no par value. There is only one class of shares. There is a consortium agreement in place be- tween the two core shareholders, Österreichische Beteiligungs AG (ÖBAG) and Mubadala Petro- leum and Petrochemicals Holding Company L.L.C (MPPH), which provides for coordinated behavior and certain limitations on transfers of sharehold- ings. ÖBAG holds 31.5% and MPPH holds 24.9% of the capital stock. All shares have the same control rights. Employees who are shareholders directly exer- cise their voting rights at the Annual General Meeting. The Company’s Executive Board must consist of two to six members. The Company’s Supervisory Board must consist of at least six members elected by the Annual General Meeting and of the members nominated under section 110 (1) of the Arbeitsverfassungsgesetz (Austrian Labor Consti- tution Act). Resolutions concerning the dismissal of members of the Supervisory Board pursuant to section 87 (8) of the Aktiengesetz (Austrian Stock Corporation Act) require a simple majority of the votes cast. To approve capital increases pursuant to section 149 of the Austrian Stock Corporation Act and alterations of the Articles of Association (except those concerning the Company’s ob- jects), simple majorities of the votes and capital represented in adopting the resolution are suffi- cient. 7. 7.a) As the authorized capital granted by the Annual General Meeting on May 14, 2014 expired on May 14, 2019, the Annual General Meeting de- cided upon a new authorized capital on Septem- ber 29, 2020. Specifically, it authorized the Exec- utive Board until September 29, 2025 to increase the share capital of OMV with the consent of the Supervisory Board – at once or in several tranches – by an amount of up to EUR 32,727,272 by issuing up to 32,727,272 new no-par value common voting shares in bearer form in return for contributions in cash. The capi- tal increase can also be implemented by way of indirect offer for subscription after taking over by one or several credit institutions according to Sec- tion 153 Paragraph 6 Austrian Stock Corporation 80 Act. The issue price and the conditions of issu- ance can be determined by the Executive Board with the consent of the Supervisory Board. The Annual General Meeting also authorized the Ex- ecutive Board, subject to the approval of the Su- pervisory Board, to exclude the subscription right of the shareholders if the capital increase serves to (i) adjust fractional amounts or (ii) satisfy stock transfer programs, in particular long- term incentive plans, equity deferrals or other par- ticipation programs for employees, senior employ- ees and members of the Executive Board/man- agement boards of the Company or one of its af- filiates), or other employees’ stock ownership plans. In addition, the Supervisory Board was authorized to adopt amendments to the Articles of Associa- tion resulting from the issuance of shares accord- ing to the authorized capital. 7.b) On May 18, 2016, the Annual General Meeting authorized the Executive Board for a period of five years from the adoption of the resolution, therefore, until including) May 17, 2021, upon ap- proval of the Supervisory Board, to dispose of or utilize stock repurchased or already held by the Company to grant treasury shares to employees, senior employees and/or members of the Execu- tive Board/management boards of the Company or one of its affiliates, including for purposes of share transfer programs – in particular, long-term incentive plans including matching share plans or other stock ownership plans – under exclusion of the general purchasing possibility of shareholders (exclusion of subscription rights). The authoriza- tion can be exercised as a whole or in parts or even in several tranches by the Company, by a subsidiary (section 189a, number 7, of the Aus- trian Commercial Code) or by third parties for the account of the Company. 7.c) On June 2, 2021 the Annual General Meeting au- thorized the Executive Board for a period of five years from the adoption of the resolution, there- fore, until and including June 1, 2026, subject to the approval of the Supervisory Board, to dispose of or utilize repurchased treasury shares or treas- ury shares already held by the Company to grant to employees, executive employees and/or mem- bers of the Executive Board/management boards OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT of the Company or its affiliates including for pur- poses of share transfer programs, in particular long term incentive plans including equity defer- rals or other stock ownership plans, and to thereby exclude the general purchasing right of shareholders (exclusion of subscription rights). The authorization can be exercised as a whole or in parts or even in several tranches by the Com- pany, by a subsidiary (Section 189a Number 7 Commercial Code) or by third parties for the ac- count of the Company. 8. As of December 31, 2021, OMV has outstanding perpetual hybrid notes in the amount of EUR 2,500 mn which are subordinated to all other creditors. According to IFRS, the net proceeds of the hybrid notes in the amount of EUR 2,483 mn are fully treated as equity because the repayment of the principal and the payments of interest are solely at the discretion of OMV. On December 7, 2015, OMV issued hybrid notes with an aggregate principal amount of EUR 1,500 mn, in two tranches of EUR 750 mn each: (i) The hybrid notes of tranche 1, with a first call date in 2021, were called and redeemed at their princi- pal amount (plus interest accrued) on November 30, 2021. (ii) The hybrid notes of tranche 2 bear a fixed interest rate of 6.250% per annum until, but excluding, December 9, 2025, which is the first call date of tranche 2. From December 9, 2025 (including), tranche 2 will bear an interest rate per annum at the relevant five-year swap rate for the relevant interest period plus a specified margin and a step- up of 100 basis points. Interest is due and payable annually in arrears on December 9 of each year, unless OMV elects to defer the relevant interest payments. The out- standing deferred interest must be paid under certain circumstances, in particular, if the Annual General Meeting of OMV resolves upon a divi- dend payment on OMV shares. On June 19, 2018, OMV issued a hybrid bond with a principal amount of EUR 500 mn. The hy- brid bond bears a fixed interest rate of 2.875% per annum until, but excluding, June 19, 2024. From June 19, 2024 (including), until, but exclud- ing, June 19, 2028 the hybrid notes will bear inter- est at a rate corresponding to the relevant five- year swap rate plus a specified margin. From June 19, 2028 (including), the notes will bear an interest rate per annum at the relevant five-year swap rate for the relevant interest period plus a specified margin and a step-up of 100 basis points. Interest is due and payable annually in ar- rears on June 19 of each year, unless OMV elects to defer the relevant interest payments. The outstanding deferred interest must be paid under certain circumstances, in particular, if the Annual General Meeting of OMV resolves upon a dividend payment on OMV shares. On September 1, 2020, OMV issued hybrid notes with an aggregate principal amount of EUR 1,250 mn, in two tranches (Tranche 1: EUR 750 mn; Tranche 2: EUR 500 mn) with the following interest payable: (iii) The hybrid notes of tranche 1 bear a fixed interest rate of 2.500% per annum until, but excluding September 1, 2026, which is the first reset date of tranche 1. From the first reset date (including), until, but excluding, September 1, 2030, the hy- brid notes of tranche 1 will bear interest per an- num at a reset interest rate which is determined according to the relevant five-year swap rate plus a specified margin. From September 1, 2030 (in- cluding), the hybrid notes of tranche 1 will bear an interest rate per annum at the relevant five-year swap rate for each interest period thereafter plus a specified margin and a step-up of 100 basis points. (iv) The hybrid notes of tranche 2 bear a fixed interest rate of 2.875% per annum until, but excluding September 1, 2029, which is the first reset date of tranche 2. From the first reset date (including), until, but excluding, September 1, 2030, the hy- brid notes of tranche 2 will bear interest per an- num at a reset interest rate which is determined according to the relevant five-year swap rate plus a specified margin. From September 1, 2030 (in- cluding), the hybrid notes of tranche 2 will bear an interest rate per annum at the relevant five-year swap rate for each interest period thereafter plus a specified margin and a step-up of 100 basis points. Interest is due and payable annually in arrears on September 1 of each year, unless OMV elects to defer the relevant interest payments. The out- standing deferred interest must be paid under certain circumstances, in particular, if the Annual 81 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT General Meeting of OMV resolves upon a divi- dend payment on OMV shares. The hybrid notes outstanding as of December 31, 2021 do not have a scheduled maturity date and they may be redeemed at the option of OMV un- der certain circumstances. OMV has, in particular, the right to repay the hybrid notes at certain call dates. Any accrued unpaid interest becomes pay- able when the notes are redeemed. In the case of a change of control, for example, OMV may call the hybrid notes for redemption or else the appli- cable interest rate will be subject to an increase according to the terms and conditions of the hy- brid notes. 9. The material financing agreements to which OMV is a party and bonds issued by OMV contain typi- cal change of control clauses. 10. There are no agreements between the Company and members of the Executive Board and Super- visory Board or employees regarding the payment of compensation in the event of a public takeover bid. 11. The most important elements of the internal con- trol and risk management system regarding the accounting process are the following: Govern- ance for the internal control system is defined by internal corporate regulations (ICS Directive and its Annexes). Corporate Internal Audit controls the compliance with these principles and require- ments through regular audits, based on the an- nual audit plan approved by the Audit Committee of the Supervisory Board, or through ad hoc au- dits. The results of those audits are presented to the Audit Committee of the Supervisory Board. For the main “end-to-end” processes (e.g. purchase- to-pay, order-to-cash), Group-wide Minimum Con- trol Requirements are defined. Based on a de- fined time plan, the implementation and the effec- tiveness are being monitored. The establishment of Group-wide standards for the preparation of annual and interim financial statements by means of the corporate IFRS Accounting Manual is also regulated by an internal corporate regulation. The Group uses a comprehensive risk management system. The essential processes of the financial reporting system have been identified and ana- lyzed. In addition, the effectiveness of the risk management system is regularly evaluated by ex- ternal auditors. The results of the evaluation are reported to the Audit Committee of the Supervi- sory Board. 12. In accordance with section 267a (6) of the Com- mercial Code, a separate consolidated non-finan- cial report will be issued. Subsequent events  Please refer to Note 37 in the Consolidated Financial Statements. 82 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT Vienna, March 9, 2022 The Executive Board Alfred Stern m.p. Chairman of the Executive Board, Chief Executive Officer and Executive Officer Chemicals & Materials Johann Pleininger m.p. Deputy Chairman of the Executive Board and Executive Officer Exploration & Production Reinhard Florey m.p. Chief Financial Officer Elena Skvortsova m.p. Executive Officer Marketing & Trading Martijn van Koten m.p. Executive Officer Refining 83 OMV ANNUAL REPORT 2021 / DIRECTORS’ REPORT 84 CONSOLIDATED CORPORATE GOVERNANCE REPORT 85 — 96 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Consolidated Corporate Governance Report OMV, as a publicly listed company with its headquarters in Austria, is dedicated to the principles of sound corporate governance and has always sought to comply with best practice in corporate governance to ensure responsible management and control of the OMV Group, a high level of transparency for every stakeholder, and, ultimately, the sustainable and long-term creation of value. Austrian law, the Articles of Association, the Internal Rules for the corporate bodies, and the Austrian Code of Corporate Governance (ACCG) provide the core legal framework for OMV’s corporate governance. OMV adheres to the ACCG issued by the Austrian Working Group for Corporate Governance. The code is publicly accessible at www.corporate-governance.at. OMV’s compliance with the ACCG was last evaluated externally by independent advisors for the 2020 financial year. The report on the evaluation is available at www.omv.com and confirms OMV’s compliance with the ACCG in relation to all compulsory “comply or explain” rules (the “C-rules”) and all recommended rules (the “R-rules”). As for C-rules 27 and 28, explanations concerning the structure of the compensation for the Executive Board and the Supervisory Board of OMV is described in the Remuneration Policy. The implementation of the policy and the performance outcomes of the financial year under review are set out in the annual Remuneration Report for OMV’s Executive Board and Supervisory Board prepared starting with the 2020 financial year. The Remuneration Policy and the Remuneration Report are published on www.omv.com. The next external evaluation is scheduled to be carried out for the 2022 financial year. For OMV Petrom S.A., a company consolidated in the OMV Group and the shares of which are publicly listed on the Bucharest Stock Exchange as well as on the London Stock Exchange, the relevant Corporate Gov- ernance Report can be found at www.omvpetrom.com/en/about-us/corporate-govern- ance-aboutus. In accordance with the recommendation in the AFRAC opinion on the Corporate Governance Report, the Cor- porate Governance Report of the parent company and the consolidated Corporate Governance Report are combined in one report. Executive Board1 Alfred Stern, *1965 Date of initial appointment: April 1, 2021 End of the current period of tenure: August 31, 2024 Chairman of the Executive Board and Chief Executive Officer, Executive Board member for the Chemicals & Materials division On September 1, 2021, Alfred Stern became Chairman of the Executive Board of OMV Aktiengesellschaft, hav- ing already served as Executive Board member for Chemicals & Materials since April 1, 2021. He took over management of the Company five months after his appointment as Executive Board member for the newly established Chemicals & Materials division. Before that, he had served as CEO of Borealis since July 2018. He had been an Executive Board member for the preced- ing six years as well, with responsibility for the areas of Polyolefins and Innovation & Technology. His career at Borealis began in 2008 as Senior Vice President Inno- vation & Technology. Prior to joining Borealis, Alfred Stern was at DuPont de Nemours and held various management positions in R&D, Sales & Marketing, and Quality & Business Management in Switzerland, Ger- many, and the United States. Alfred Stern has a PhD in Material Science and a Masters in Polymer Engineering and Science, both from Montanuniversität in Leoben (Austria). Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S.A. Borealis AG President of the Supervisory Board (since September 1, 2021) Chairman of the Executive Board (until April 1, 2021) Member of the Supervisory Board (since April 1, 2021) Chairman of the Supervisory Board (since September 1, 2021) OMV Downstream GmbH Managing Director (since April 1, 2021) 1 The Supervisory Board of OMV Aktiengesellschaft has approved a reorganization of the OMV Group involving splitting and expanding the current area of Refin- ing & Petrochemical Operations into two areas: Refining, on the one hand, and Chemicals & Materials, on the other hand. The changes took effect as of April 1, 2021. 86 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Rainer Seele, *1960 Date of initial appointment: July 1, 2015 Rainer Seele resigned from his position as Chairman of the Executive Board and Chief Executive Officer as of August 31, 2021. Johann Pleininger, *1962 Date of initial appointment: September 1, 2015 End of the current period of tenure: August 31, 2023 Deputy Chairman of the Executive Board and Deputy Chief Executive Officer, Executive Board member for the Exploration & Production division Rainer Seele received his PhD in chemistry at the Uni- versity of Göttingen and subsequently held senior ap- pointments at the BASF Group, where he first became a member of the Executive Board in 2000. He was sub- sequently Chairman of the Executive Board at WINGAS GmbH. From 2009 until 2015, he served as Chairman of the Board of Directors of Wintershall Hold- ing GmbH. Functions in major subsidiaries of the OMV Group Company Function Johann Pleininger started his professional career at OMV in 1977 and later studied mechanical and eco- nomic engineering. During his time at OMV, he held various senior positions. From 2007 to 2013, he was an Executive Board member at OMV Petrom in Bucharest, responsible for Exploration & Production. Prior to his appointment as Executive Board member of OMV, he was the Senior Vice President responsible for the core Upstream countries Romania and Austria as well as for the development of the Black Sea region. OMV Petrom S.A. Borealis AG President of the Supervisory Board (until August 31, 2021) Chairman of the Supervisory Board (until August 31, 2021) Member of the Supervisory Board of FK Austria Wien AG Functions in major subsidiaries of the OMV Group Function Member of the Supervisory Board Company OMV Petrom S.A. OJSC Severneftegazprom Member of Board of Directors Deputy Chairman of Board of SapuraOMV Upstream Directors Sdn. Bhd. Managing Director OMV Exploration & Pro- duction GmbH OMV Austria Exploration & Production GmbH Chairman of the Supervisory Board 87 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Reinhard Florey, *1965 Date of initial appointment: July 1, 2016 End of the current period of tenure: June 30, 2024 Chief Financial Officer Reinhard Florey graduated with a degree in mechanical engineering and economics from Graz University of Technology while also completing his music studies at the University of Fine Arts. He started his career in cor- porate consulting and strategy consulting. From 2002 to 2012, he worked in various positions worldwide for Thyssen Krupp AG. Until June 2016, he was CFO and Deputy CEO of Outokumpu Oyj. Member of the Supervisory Board of Wiener Börse AG Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S.A. Borealis AG Deputy Chairman of the Supervi- sory Board (until April 28, 2021) Member of the Supervisory Board Elena Skvortsova, *1970 Date of initial appointment: June 15, 2020 End of the current period of tenure: June 14, 2023 Executive Board member for the Marketing & Trading division. From April 1, 2021 until June 30, 2021 she was Executive Board Member for the Refining division on an interim basis. Elena Skvortsova studied at Moscow State Linguistic University and the Thunderbird School of Global Man- agement in the United States. In 1994, she began her professional career at Bayer AG as an international management trainee; her last position at Bayer was As- sociate Director of Bayer Corporation (Healthcare). Starting in 2001, Elena Skvortsova held various leader- ship positions at Baxter International in the United States, Central and Eastern Europe, and the United Kingdom. Her tenure there lasted 13 years. In 2015, she moved to Linde AG and was responsible for man- aging the Middle East and Eastern Europe region. From March 2019 to April 2020, following the merger of Linde and Praxair, she was head of Praxair Canada Inc., a 100% subsidiary of Linde plc. Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S.A. Member of the Supervisory Board (since April 28, 2021) OMV Downstream GmbH Managing Director 88 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Martijn van Koten, *1970 Date of initial appointment: July 1, 2021 End of the current period of tenure: June 30, 2024 Executive Board member for the Refining division Martijn van Koten was born in the Netherlands, where he studied Chemical Engineering at Delft University of Technology. He began his professional career at Shell in 1994, taking on several management and technical positions in the refining and downstream business in the UK, Germany, and the Netherlands. Starting 2004, Martijn van Koten held manufacturing site general man- ager positions at Shell in Sweden and Singapore, be- fore becoming Vice President Manufacturing East & Middle East in Singapore in 2009 and Vice President Supply & Distribution Americas in the United States in 2013. In 2013, Martijn van Koten joined Borealis as Ex- ecutive Board Member Operations, HSE & PTS, in Austria. From 2018 to June 2021, he was Borealis’ Ex- ecutive Board Member Base Chemicals & Operations in Austria. Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S.A. Borealis AG Member of the Supervisory Board (since August 1, 2021) Member of the Executive Board (until June 30, 2021) Member of the Supervisory Board (since September 1, 2021) OMV Downstream GmbH Managing Director (since July 1, 2021) Managing Director (since July 14, 2021) OMV Gas Logistics Holding GmbH Thomas Gangl, *1971 Date of initial appointment: July 1, 2019 Thomas Gangl resigned as member of the Executive Board responsible for the Refining & Petrochemical Op- erations division as of March 31, 2021. Thomas Gangl began his OMV career in 1998 as a pro- cess engineer at the Schwechat refinery after studying process engineering at Vienna University of Technol- ogy and mechanical engineering at the University of Salford (Manchester). In 2011, he became General Manager of OMV Deutschland GmbH and Site Man- ager in Burghausen. He was appointed Site Manager in Schwechat in 2014 and took over the role of Senior Vice President of the Refining & Petrochemicals Busi- ness Unit with responsibility for all three OMV refineries in 2016. On April 1, 2021, Thomas Gangl became the Chairman of the Executive Board of Borealis AG. Functions in major subsidiaries of the OMV Group Company OMV Petrom S.A. Borealis AG Function Member of the Supervisory Board (until April 28, 2021) Member of the Supervisory Board (until April 1, 2021) Chairman of the Executive Board (since April 1, 2021) OMV Downstream GmbH Managing Director OMV Gas Logistics Holding GmbH (until March 31, 2021) Managing Director (until March 31, 2021) Working practices of the Executive Board The approval requirements, responsibilities of individual Executive Board members, decision-making proce- dures, and the approach to conflicts of interest are gov- erned by the Internal Rules of the Executive Board. The Executive Board holds meetings at least every two weeks to exchange information and issue decisions on all matters requiring plenary approval. 89 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Supervisory Board OMV’s Supervisory Board consists of ten members elected by the General Meeting (shareholders’ repre- sentatives) and five members delegated by the Group’s Works Council1. Six of the current shareholders’ repre- sentatives were elected at the 2019 Annual General Meeting (AGM), two at the 2020 AGM, and two at the 2021 AGM. The members of OMV’s Supervisory Board in 2021 and their appointments to supervisory boards of other domestic or foreign listed companies as well as any management functions held are shown below. Mark Garrett, *1962 Chairman (Chief Executive Officer, Marquard & Bahls AG) Seats: Axalta Coating Systems (Chairman until August 2021), Umicore Thomas Schmid, *1975 Deputy Chairman (until July 5, 2021) (Chief Executive Officer, Österreichische Beteiligungs AG until July 5, 2021) Seats: VERBUND AG, Telekom Austria AG (until July 5, 2021) Christine Catasta, *1958 Deputy Chairwoman2 (since September 10, 2021) Chief Executive Officer, Österreichische Beteiligungs AG until January 31, 2022) Seats: VERBUND AG, Telekom Austria AG Saeed Al Mazrouei, *1980 Deputy Chairman (since June 2, 2021) (Deputy Chief Executive Officer, Direct Investments, Mubadala Investment Company) Seats: Abu Dhabi Commercial Bank (ADCB) Mansour Mohamed Al Mulla, *1979 (until June 2, 2021) (Platform CFO Petroleum & Petrochemicals, Mubadala Investment Company PJSC) Seats: Aldar Properties PJSC Stefan Doboczky, *1967 (Chief Executive Officer, Heubach Group since January 10, 2022; Chief Executive Officer, Lenzing AG until September 30, 2021) Seats: no seats in domestic or foreign listed companies Karl Rose, *1961 (Strategy Advisor, Abu Dhabi National Oil Company) Seats: no seats in domestic or foreign listed companies Elisabeth Stadler, *1961 (Chief Executive Officer, VIENNA INSURANCE GROUP AG – Wiener Versicherung Gruppe) Seats: voestalpine AG Christoph Swarovski, *1970 (Chief Executive Officer, Tyrolit AG) Seats: no seats in domestic or foreign listed companies Cathrine Trattner, *1976 Seats: no seats in domestic or foreign listed companies Gertrude Tumpel-Gugerell, *1952 Seats: Commerzbank Aktiengesellschaft, VIENNA IN- SURANCE GROUP AG Wiener Versicherung Gruppe, AT&S Austria Technologie & Systemtechnik Aktienge- sellschaft Delegated by the Group’s Works Council (employee representatives) Alyazia Ali Al Kuwaiti, *1979 Deputy Chairwoman (until June 2, 2021, since then member) (Executive Director Upstream & Integrated, Petroleum & Petrochemicals, Mubadala Investment Company) Seats: no seats in domestic or foreign listed companies Alexander Auer, *1969 (since September 1, 2021) Hubert Bunderla, *1965 (since January 18, 2021) Herbert Lindner, *1961 (until August 31, 2021) Nicole Schachenhofer, *1976 (since January 18, 2021) Angela Schorna, *1980 Gerhard Singer, *1960 1 Due to the resignation of Christine Asperger (October 1, 2020) and Alfred Redlich (December 2, 2020), three members delegated by the Group’s Works Council were part of the Supervisory Board at the end of 2020 until January 18, 2021. 2 Christine Catasta declared in a letter dated January 25, 2022 that she would resign from the Supervisory Board with effect from the end of the Annual General Meeting that resolves on the discharge for the financial year 2021. 90 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT More detailed information about all members of OMV’s Supervisory Board, including their professional careers, can be obtained from OMV’s website at www.omv.com > About us > Supervisory Board. Diversity The main considerations in selecting the members of the Supervisory Board are relevant knowledge, per- sonal integrity, and experience in executive positions. Furthermore, aspects of diversity of the Supervisory Board with respect to the internationality of the mem- bers, the representation of both genders, and the age structure are taken into account. The Supervisory Board includes seven women (as per December 31, 2021) and three non-Austrian nationals. The members of the Supervisory Board are aged between 41 and 69. Independence The Supervisory Board has defined the criteria that constitute independence (resolutions dated March 21, 2006, and March 25, 2009). In addition to the guide- lines set out in Annex 1 of the ACCG, the Supervisory Board has established the following criteria with regard to its members elected by the General Meeting: ▸ A Supervisory Board member shall not serve on the ▸ A Supervisory Board member shall not hold stock Executive Board of an OMV Group company. options issued by the Company or any affiliated company, or receive any other performance-related remuneration from an OMV Group company. ▸ A Supervisory Board member shall not be a share- holder with a controlling interest in the meaning of EU Directive 83/349/EEC (i.e. an interest of more than 50% of the voting rights or a dominant influ- ence, e.g. through the right to appoint Board mem- bers) or represent such a shareholder. All members elected by the General Meeting have de- clared their independence from the Company and its Executive Board during the 2021 financial year and up to the time of making such declarations (C-rule 53 of the ACCG). Under C-rule 54 of the ACCG, Mark Gar- rett, Stefan Doboczky, Karl Rose, Elisabeth Stadler, Christoph Swarovski, Cathrine Trattner, and Gertrude Tumpel-Gugerell have made declarations to the effect that they were not shareholders with a stake of more than 10% or represented such shareholders’ interests during the 2021 financial year and up to the time of making such declarations. Furthermore, the above- mentioned members of the Supervisory Board were nominated for the election as Supervisory Board mem- bers by Österreichische Beteiligungs AG, which must comply with the strict independence and incompatibility criteria of the Austrian Code of Corporate Governance when nominating or appointing persons as members of the Supervisory Boards of its affiliated companies and ensure that they exercise their activities on the Supervi- sory Boards of the affiliated companies independently of their own interests or those of legal entities closely associated with them. 91 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Positions and committee memberships in 20211 Name Mark Garrett Christine Catasta Thomas Schmid Saeed Al Mazrouei Alyazia Ali Al Kuwaiti Mansour Mohamed Al Mulla Stefan Doboczky Karl Rose Elisabeth Stadler Christoph Swarovski Cathrine Trattner Gertrude Tumpel-Gugerell Alexander Auer Hubert Bunderla Herbert Lindner Nicole Schachenhofer Angela Schorna Gerhard Singer Supervisory Board and committees 20211 SB PNC PPC AC RC STC Term of office C DC DC DC M2 M M M M M M M M M M M M M C DC DC DC M2 M – – – – – – – M – M – – M DC DC DC M2 M M C – – – – M M M M – M3 M M M – DC – – – DC – M C – M M3 – M M DC C C DC –2 – – – – M – M – – – – – – – September 29, 2020, to 2023 AGM DC September 10, 2021 to 2022 AGM4 – May 14, 2019, to July 5, 2021 – June 2, 2021, to 2024 AGM DC May 22, 2018, to 2024 AGM – May 22, 2018, to 2021 AGM C May 14, 2019, to 2022 AGM – May 18, 2016, to 2024 AGM M May 14, 2019, to 2022 AGM – May 14, 2019, to 2022 AGM – May 14, 2019, to 2022 AGM – May 19, 2015, to 2022 AGM M Since September 1, 2021 – Since January 18, 2021 – June 1, 2013, to August 31, 2021 M Since January 18, 2021 – Since March 23, 2018 – Since September 26, 2016 1 Abbreviations: SB = Supervisory Board, PNC = Presidential and Nomination Committee, PPC = Portfolio and Project Committee, AC = Audit Committee, RC = Remuneration Committee, STC = Sustainability and Transformation Committee, C = Chairman/Chairwoman, DC = Deputy Chairman/Chairwoman, M = Member, AGM = Annual General Meeting 2 Deputy Chairwoman until June 2, 2021 3 Member until January 18, 2021 4 Christine Catasta declared in a letter dated January 25, 2022 that she would resign from the Supervisory Board, to which she was originally elected until the 2024 AGM, with effect from the end of the AGM that resolves on the discharge for the financial year 2021. Working practices of the Supervisory Board The Supervisory Board fulfills its duties – in particular supervising the Executive Board and advising it on strategy – by discussing the Company’s situation and objectives during board meetings. Decisions are also taken at these meetings, except in urgent cases where resolutions can be taken by circular vote. Five commit- tees ensure that the best possible use is made of the Supervisory Board members’ expertise. Brief descrip tions of these committees are given below (see also the Report of the Supervisory Board for an overview of the individual committees’ main activities in 2021). In 2021, 9 meetings of the Supervisory Board and 21 committee meetings were held. In particular, the Executive Board and the Supervisory Board discussed OMV’s strategy1. No member of the Supervisory Board attended fewer than half of the meetings of the Supervisory Board. Mr. Al Mazrouei attended fewer than half of the meetings of the committees he has been elected to. 1 Further information can be found in the OMV Annual Report 2021 / Chapter „Strategy”. 92 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Attendance of Supervisory Board and committee meet- ings in 2021 was as follows: Attendance of Supervisory Board and committee meetings in 20211 SB Name 9/9 Mark Garrett Christine Catasta2 2/2 Thomas Schmid3 6/6 Saeed Al Mazrouei4 3/3 Alyazia Ali Al Kuwaiti 8/9 Mansour Mohamed Al Mulla5 4/6 7/9 Stefan Doboczky 8/9 Karl Rose 8/9 Elisabeth Stadler 7/9 Christoph Swarovski 9/9 Cathrine Trattner 9/9 Gertrude Tumpel-Gugerell Alexander Auer6 3/3 Hubert Bunderla7 9/9 Herbert Lindner8 6/6 Nicole Schachenhofer7 9/9 9/9 Angela Schorna 9/9 Gerhard Singer AC 6/6 2/2 3/3 6/6 RC 6/6 1/1 3/3 1/3 3/35 PNC 6/6 1/1 5/5 0/1 6/6 3/5 PPC 3/3 2/2 1/1 0/2 3/3 1/1 3/3 3/3 5/6 6/6 5/6 6/6 6/6 6/6 6/6 5/6 2/2 5/5 3/3 1/19 1/1 5/5 3/3 1/19 1 Abbreviations: SB = Supervisory Board, PNC = Presidential and Nomination Committee, PPC = Portfolio and Project Committee, AC = Audit Committee, RC = Remuneration Committee 2 Since September 10, 2021 3 Until July 5, 2021 4 Since June 2, 2021 5 Until June 2, 2021 6 Since September 1, 2021 7 Since January 18, 2021 8 Until August 31, 2021 9 Until January 18, 2021 Pursuant to C-rule 36 of the ACCG, the Supervisory Board is tasked with discussing the efficiency of its ac- tivities annually, in particular its organization and work procedures (self-evaluation). Presidential and Nomination Committee This committee is empowered to take decisions on matters of urgency. The Supervisory Board may trans- fer other duties and powers of approval to the Presi- dential and Nomination Committee on an ad hoc or per- manent basis. In its capacity as the Nomination Com- mittee, this body makes proposals to the Supervisory Board for the appointment or replacement of Executive Board members and deals with succession planning. It also makes recommendations to the General Meeting for appointments to the Supervisory Board. There were six meetings of the Presidential and Nomination Com- mittee in 2021, in which discussions focused on Execu- tive and Supervisory Board matters. Audit Committee This committee performs the duties established by sec- tion 92 (4a) Austrian Stock Corporation Act. The com- mittee held six meetings during the year. It predomi- nantly dealt with preparations for the audit of the annual financial statements, a review of the auditors’ activities, internal audit, the internal control and risk management systems, as well as the presentation of the annual fi- nancial statements. Gertrude Tumpel-Gugerell is the fi- nancial expert on the Audit Committee within the mean- ing of section 92 (4a) (1) Austrian Stock Corporation Act. Auditors The Supervisory Board monitors the auditors’ inde- pendence and reviews a breakdown of the audit fees and fees for additional services besides auditing activi- ties. In 2021, the auditors Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H. (including their network within the meaning of section 271b Austrian Commercial Code) received EUR 3.55 mn for the an- nual audit, EUR 0.53 mn for other assurance services, EUR 0.56 mn for tax advisory services, and EUR 0.07 mn for other engagements. Portfolio and Project Committee This committee supports the Executive Board in pre- paring complex decisions on key issues where neces- sary and reports on these decisions and any recom- mendations to the Supervisory Board. In 2021, three meetings of the Portfolio and Project Committee were held. Sustainability and Transformation Committee The purpose of the Sustainability and Transformation Committee is to support the Supervisory Board in re- viewing and monitoring OMV’s strategy with regard to sustainability, and ESG-related standards and perfor- mance. It also focuses on processes and performance specifically in HSSE (Health, Safety, Security, and En- vironment) and in particular regarding climate change. Furthermore, the committee serves to support and oversee the transformation process toward a more sus- tainable business model, including the cultural integra- tion of strategically significant acquisitions. This com- mittee was established by resolution of the Supervisory Board on October 28, 2021, and met for the first time on March 9, 2022. Remuneration Committee This committee deals with all aspects of the remunera- tion of Executive Board members and with their em- ployment contracts. The committee’s membership does not include employee representatives. The committee 93 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT is empowered to conclude, amend, and terminate Ex- ecutive Board members’ employment contracts and to make decisions on the awarding of bonuses (variable remuneration components) and other such benefits to them. The Remuneration Committee met six times dur- ing 2021. Executive Board members were invited to at- tend parts of some of the meetings of the Remunera- tion Committee. hkp/// group was hired by the Remuneration Committee to provide remuneration advice to the committee on the appropriate structure and level of Executive Board compensation in line with regulatory requirements and market practice. In 2021, hkp/// group was also commissioned by OMV and OMV Petrom to provide advice to OMV on govern- ance processes between OMV and OMV Petrom, and to OMV Petrom on the development and drafting of the Remuneration Policy for the Executive Board and Su- pervisory Board of OMV Petrom. hkp/// group provided advice on the development of OMV’s Remuneration Report. This consulting company did not advise the OMV Executive Board in matters relating to Executive Board remuneration, ensuring independence with re- spect to the Austrian Code of Corporate Governance. Conflicts of interest and dealings by members of the Supervisory Board requiring approval There were no transactions requiring approval in ac- cordance with section 95 (5) (12) Austrian Stock Corpo- ration Act. Attention is drawn to the fact that the Super- visory Board members Mark Garrett, Stefan Doboczky, and Elisabeth Stadler are or were in the reporting year chairpersons of the executive boards of companies with which supply contracts and insurance and related con- tracts, respectively, were concluded under normal mar- ket and industry terms and conditions (including consid- eration). Although these contracts do not raise con- cerns in relation to a potential conflict of interest, re- lated Supervisory Board approvals have been obtained. The Internal Rules of the Supervisory Board contain detailed procedures for handling conflicts of interest on the part of Supervisory Board members. Employee participation1 The Group’s Works Council holds regular meetings with the Executive Board in order to exchange infor- mation on developments affecting employees. Further- more, the Group’s Works Council has made use of its right to delegate members to the Supervisory Board (one employee representative for every two members elected by the General Meeting). Therefore, out of the 15 Supervisory Board members, 5 members are em- ployee representatives. Rights of minority shareholders ▸ General Meeting: An Extraordinary General Meet- ing must be convened at the request of sharehold- ers holding not less than 5% of the shares. ▸ Agenda items must be included at the request of shareholders holding not less than 5% of the shares. ▸ Shareholders holding not less than 1% of the shares may submit resolution proposals on all agenda items. Such resolution proposals must be posted on the website upon request of the respec- tive shareholders. ▸ Shareholders holding not less than 10% of the shares may require an extraordinary audit in the event of grounds for suspicion of irregularities, or gross violations of the law or the Articles of Associ- ation. ▸ All shareholders, having duly provided evidence of their shareholding, are entitled to attend General Meetings, ask questions, and vote. ▸ Election of the Supervisory Board: If elections for two or more positions to the Supervisory Board are held at the same General Meeting, separate votes must be held for each position. If elections for three or more seats on the Supervisory Board are held at the same General Meeting, and if prior to the vote on the last position to be assigned it is found that at least one-third of all the votes have been cast in fa- vor of the same person but he or she has not been elected, then this person must be declared as Su- pervisory Board member. Women’s Advancement and Diversity Concept Diversity is an enormous strength that OMV actively builds on now, and in the future. Consequently, OMV strives to continuously develop new initiatives and measures that promote diversity and equal opportuni- ties. OMV is committed to its Group diversity strategy focusing on gender and internationality. As a company active in an industry with a strong technical focus, it is particularly challenging for OMV to achieve a satisfac- tory gender balance in all fields of business activity. OMV is committed to supporting women’s advance- ment to managerial positions. The strategic objective is 1 Due to the resignation of Christine Asperger (October 1, 2020) and Alfred Redlich (December 2, 2020), three members delegated by the Group’s Works Council were part of the Supervisory Board at the end of 2020 until January 18, 2021. 94 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT with regard to gender, age, employee background, sen- iority as well as salaries, OMV is ensuring fair treatment and contributing to equal opportunities among men and women at all career stages. Female employees initiated a Diversity Network to raise awareness of diversity topics and to boost the careers of women in technical fields through a collaboration site and joint activities. OMV’s Head Office in Vienna has two company kinder- gartens attended by children of OMV employees. The Executive Board and Supervisory Board consider the described measures and programs to foster the di- versity of the workforce as a key factor in strengthening the diversity of the internal pool of Executive Board succession candidates. The Presidential and Nomina- tion Committee concerns itself at least once a year with the identification and development of high-potential em- ployees. In addition to internal succession planning, the Supervisory Board also makes use of external recruit- ments in order to best fill open Executive Board posi- tions. When selecting Executive Board members – be it internally or externally – special attention is given to balance gender, age, and international experience in addition to professional skills. Since Elena Skvortsova joined on June 15, 2020, there is one woman on the Executive Board of OMV. The Ex- ecutive Board members of OMV Aktiengesellschaft are between 51 and 59 years old, are from three different nationalities, and have acquired extensive international management experience. Since 2019, ÖBAG has had a legal mandate to pro- pose candidates for the Supervisory Boards of its shareholdings. The ÖBAG management proposal is subject to approval by the ÖBAG presidium, after sub- mission of the proposal by the Supervisory Board of OMV Aktiengesellschaft and before the election by the Annual General Meeting of OMV AG takes place. The selection of candidates is based on various criteria, particularly the candidates’ professional skills, personal integrity, independence, and impartiality. In addition, di- versity aspects such as the representation of both gen- ders, a balanced age distribution, and internationality of members is taken into consideration. to achieve the best diversity mix at the senior management level. The aim is to increase the proportion of women in management roles, from 20.9%1 currently to 25% by 2025, through a number of initiatives such as mentoring, succession planning, specific trainings, as well as initiatives to promote a healthy work/life balance. The proportion of women in the Group as a whole is 27% (2020: 25%), 20.9%1 of whom are in management and executive positions. In OMV’s leadership develop- ment programs, the proportion of women was 49% in 2021 (2020: 42%). In OMV’s Upstream integrated grad- uate development program for technical skill pools, the proportion of women was 31% in 2021 (2020: 31%). The topic of diversity has been incorporated into all Leadership Development programs and embedded into the OMV People Strategy. We designed and implemented targeted training pro- grams, such as SHEnergy, a blended-learning program for women at OMV, to support women’s leadership skills. The program focuses on active inclusion skills and also emphasizes the power of mentor- ing and networking in developing female leaders. We also held Career Aspiration Talks to make women at OMV more visible and in doing so to also strengthen our pipeline of future female leaders. In 2021, we launched the “New Parent Program” in Austria focused on equipping future new parents with information on parental leave and part-time models, the related long-term financial aspects, and things to con- sider when returning to work. The program’s target group includes male as well as female employees to encourage more equal distribution of childcare respon- sibilities. In March 2021, we hosted a Diversity & Inclusion Week built around International Women’s Day to create awareness and support the topic. OMV promotes talents from different backgrounds, thus ensuring the best mix in diverse teams. OMV especially supports the recruitment and development of women in technical positions. By using gender-neutral language in OMV’s job adver- tisements and publishing all job advertisements inter- nally, together with the constant monitoring of equality 1 Advanced & Executive Level 95 OMV ANNUAL REPORT 2021 / CONSOLIDATED CORPORATE GOVERNANCE REPORT At the end of 2021, the Supervisory Board of OMV in- cluded seven women, corresponding to a share of 47%. In line with the strategic orientation of the Com- pany, particular focus will be given to further strength- ening industry-specific expertise and the internationality of Supervisory Board members. With members aged between 41 and 69 years, the Supervisory Board’s age structure is balanced. External evaluation of Corporate Governance An external evaluation of OMV’s compliance with the provisions of the ACCG is performed biennially. For the 2020 financial year, OMV had engaged Deloitte Legal (Jank Weiler Operenyi Rechtsanwälte GmbH, attorney Johannes Lutterotti). The official questionnaire of the Austrian Working Group for Corporate Governance was used for the evaluation, and the result was that OMV is in full compliance with the Austrian Code of Corporate Governance including all non-compulsory recommen- dations. The report on the evaluation is available for download on OMV’s website (www.omv.com). Vienna, March 9, 2022 The Executive Board Alfred Stern m.p. Johann Pleininger m.p. Reinhard Florey m.p. Elena Skvortsova m.p. Martijn van Koten m.p. 96 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 97 — 226 98 — Auditor’s Report 108 — Consolidated Income Statement for 2021 109 — Consolidated Statement of Comprehensive Income for 2021 110 — Consolidated Statement of Financial Position as of December 31, 2021 112 — Consolidated Statement of Changes in Equity for 2021 114 — Consolidated Statement of Cash Flows for 2021 Notes to the Consolidated Financial Statements 115 — Basis of Preparation and Accounting Policies 131 — Segment Reporting 136 — Notes to the Income Statement 145 — Notes to the Statement of Financial Position 179 — Supplementary Information on the Financial Position 198 — Other Information 216 — Oil and Gas Reserve Estimation and Disclosures (unaudited) 225 — Executive Board Key Audit Matters Key audit matters are those matters that, in our profes- sional judgment, were of most significance in our audit of the consolidated financial statements of the fiscal year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We considered the following matters as key audit mat- ters for our audit: 1. The impact of climate change and the energy transition on the financial statements 2. Recoverability of equity-accounted investments 3. Recoverability of intangible exploration and evalu- 4. 5. ation (E&E) assets Estimation of oil and gas reserves Valuation of provision for decommissioning and restoration obligations OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Auditor’s Report1 Report on the Consolidated Financial Statements Audit Opinion We have audited the consolidated financial statements of OMV Aktiengesellschaft, Vienna, and of its subsidiaries (the Group) comprising the con- solidated statement of financial position as of Decem- ber 31, 2021, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the fiscal year then ended and the notes to the consolidated financial statements except for "Oil and Gas Reserve Estimation and Disclosures (unaudited)". Based on our audit the accompanying consolidated fi- nancial statements were prepared in accordance with the legal regulations and present fairly, in all material respects, the assets and the financial position of the Group as of December 31, 2021 and its financial per- formance for the year then ended in accordance with the International Financial Reporting Standards (IFRSs) as adopted by EU, and the additional requirements un- der Section 245a Austrian Company Code (UGB). Basis for Opinion We conducted our audit in accordance with the regula- tion (EU) no. 537/2014 (in the following "EU regulation") and in accordance with Austrian Standards on Auditing. Those standards require that we comply with Interna- tional Standards on Auditing (ISA). Our responsibilities under those regulations and standards are further de- scribed in the "Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Group in accordance with the Austrian General Accepted Accounting Princi- ples and professional requirements and we have ful- filled our other ethical responsibilities in accordance with these requirements. We believe that the audit evi- dence we have obtained until the date of this auditor’s report is sufficient and appropriate to provide a basis for our opinion by this date. 1 This report is a translation of the original report in German, which is solely valid. Publication or sharing with third parties of the consolidated financial statements together with our auditor's opinion is only allowed if the consolidated financial statements and the directors’ report for the Group are identical with the German audited version. This audit opinion is only applicable to the German and complete consolidated financial statements with the directors’ report for the Group. Sec- tion 281 paragraph 2 UGB (Austrian Company Code) applies to alternated versions. 98 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter We evaluated management’s key assumptions related to climate change and energy transition risks and how it impacted the critical accounting estimates and judge- ments on different areas of the financial statements. Specifically, our work included, but was not limited to, the following procedures: ▸  Assess the design and implementation of controls in the estimation processes, with a focus on how the impact of climate change and energy transition was considered for the key assumptions; ▸ Analyse with those responsible for group strategy and group reporting OMV’s view on the impact of climate change and energy transition on key as- sumptions used in the base case scenario and stress test analysis; ▸ Reading of information in the director’s report (strat- egy and sustainability) and consider its consistency with the assumptions used by management when preparing its energy transition base case scenario and stress test analysis; ▸ Assessing OMV’s mapping of the impact of climate change and energy transition risks into accounting estimates and judgements included in the financial statements; ▸ Evaluate OMV’s assessment of key assumptions (oil and gas price, CO2 price, refining and petro- chemical margins and cracks, power prices and spreads, volume develop-ment) used in the base case comparing it to external market data and other resources where available; and ▸ Assess the adequacy of the disclosures made in the financial statements regarding the impact of cli- mate change and energy transition, including the sensitivities due to the stress test analysis in Note 2 (Accounting policies, judgements and estimates). The impact of climate change and the energy tran- sition on the financial statements Climate change and energy transition impact many ar- eas of accounting estimates and judgements. The risk is that accounting estimates and judgement do not properly reflect the impact of material climate change and energy transition. As included in Note 2 (Accounting policies, judgements and estimates) to the financial statements, OMV has considered the short- and long-term effects of climate change and energy transition in preparing the consoli- dated financial statements. The note also explains, that IFRS’s requires the use of assumptions that represent management’s current best estimate of the range of expected future economic con- ditions, which may differ from company ambitions and public climate targets. OMV’s management has established for its midterm plan assumptions a base case scenario, which is used for estimates in various areas of the Financial State- ments, including amongst others impairment of assets, useful lives and decommissioning provision. The base case scenario is aligned with IEA Stated Policies Sce- nario (STEPS) taken from the World Economic Outlook and adjusted such that the EU, the United States, China, Japan and South Korea (with a two-year delay for political alignment and measuring effectiveness) are following the IEA Sustainable Development Scenario (SDS) and meeting the Paris Agreement targets. In addition, OMV performed a stress test analysis, us- ing a decarbonization scenario which is built on the IEA SDS Scenario, where the entire world reaches the Paris Agreement commitment to be net-zero by 2070, in order to assess the impact of this scenario on the re- coverability of assets and valuation of liabilities. OMV Group’s disclosures about the impact of climate change and energy transition on the financial state- ments, including sensitivities due to the stress test analysis, are included in Note 2 (Accounting policies, judgements and estimates). 99 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter We assessed management’s assessment of the recov- erability of the carrying value of equity-accounted in- vest-ments by evaluating if and how management de- termines a need of impairment. Where an impairment test was required, we evaluated management’s as- sumptions. Specifically, our work included, but was not limited to, the following procedures: trols in the valuation process; ▸  Assess the design and implementation of the con- ▸ Review and evaluation of management’s assess- ▸ Assess the determination of cash generating units; ▸ Reconcile the assumptions used within the future ment of the existence of impairment indicators; cash flow models to approved budgets and busi- ness plans; impact in the cash flow models; ▸  Assess the consideration of COVID-19-pandemic ▸ Check the mathematical accuracy of the cash flow ▸ Compare of cash flow projections with external ▸ Involve our valuation specialists for analyzing of the market data and other available external sources models; discount-, exchange- and growth rates and as- sessing the valuation models; ▸ Assess the historical accuracy of management’s budgets and forecasts by comparing them to actu- al performance and to prior year; ▸ Review of management’s sensitivity analysis over key assumptions and perform additional own sen- sitivity analysis in order to assess the impact of possible changes of assumptions on the recover- ability; and ▸ Assess the adequacy of the disclosures in the fi- nancial statements. Recoverability of equity-accounted investments As of December 31, 2021, the carrying value of equity- accounted investments amounted to EUR 6,887 mn (after an impairment charge of EUR 669 mn for Abu Dhabi Oil Refining Company). Under IFRS, an entity is required to assess, whether impairment indicators or indications for the reversal of impairment losses recognised in prior periods exist and if they exist, an impairment test is required. The assessment of the recoverability of the carrying amount of equity-accounted investments requires judgement in assessing whether there is an indication that the investment should be impaired and in measur- ing any such impairment. For the equity-accounted investment Abu Dhabi Oil Re- fining Company, registered in Abu Dhabi, impairment indicators were identified. The impairment test per- formed by the management led to an impairment. The principal risk relates to management’s estimates of future margin assumptions, production volumes, cash flows and discount rates, which are used to project the recoverability. OMV Group’s disclosures about equity-accounted in- vestments and the impairment testing related hereto are included in Note 2 (Accounting policies, judgements and estimates), Note 7 (Depreciation, amortization, im- pairments and write ups) and Note 16 (Equity-ac- counted investments). 100 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter Recoverability of intangible exploration and evalua- tion (E&E) assets The carrying value of intangible E&E assets amounted to EUR 967 mn at December 31, 2021, after a write-off (impairment) of EUR 184 mn in 2021. Under IFRS 6, Exploration for and Evaluation of Min- eral Resources, exploration and evaluation assets shall be assessed for impairment when facts and circum- stances suggest that the carrying value of an explora- tion and evaluation asset may exceed its recoverable amount. The assessment of the carrying value requires man- agement to apply judgement and estimates in as- sessing whether any impairment has arisen at year end, and in quantifying any such impairment. The principal risks relate to the assessment of manage- ment’s intention to proceed with a future work program for a prospect or licence, the likelihood of licence re- newal, and the success of drilling and geological analy- sis to date. In addition, the recoverability of exploration and evaluation assets may also be impacted by climate risk and energy transition as described in the key audit matter above. OMV Group’s disclosures about intangible E&E assets and related impairment testing are included in Note 2 (Accounting policies, judgements and estimates), Note 7 (Depreciation, amortization, impairments and write-ups) and Note 14 (Intangible assets). We evaluated management’s assessment of the carry- ing value of intangible E&E assets performed with ref- erence to the criteria of IFRS 6 and the Group’s ac- counting policy. Specifically, our work included, but was not limited to, the following procedures: ▸  Inquire whether management has the intention to carry out exploration and evaluation activity in the relevant exploration area which included the review of management’s budget and discussions with sen- ior management as to the intentions and strategy of the Group; ▸ Read Executive Board minutes of meetings and consider whether there were negative indicators that certain projects might be unsuccessful; ▸ Discuss with management about the status of the ▸ Assess whether the Group has the ability to finance largest exploration projects; any planned future exploration and evaluation activ- ity; ▸ Identify the existence of any fields where the Group’s right to explore is either at, or close to, ex- piry and review management’s assessment whether there are any risks related to renewal of the license; ▸ Review of management’s assumptions where an E&E asset has been impaired and review of the val- uation; ▸ Assess the adequacy of the disclosures in the fi- ▸ The procedures described in the key audit matter nancial statements; and  regarding climate change and energy transition above. 101 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter Our procedures have focused on management’s esti- mation process in the determination of oil and gas re- serves. Specifically, our work included, but was not limited to, the following procedures: ▸  Walkthrough and understand the Group’s process and controls associated with the oil and gas re- serves estimation process; ▸  Test controls of the oil and gas reserves review ▸ Analysis of the internal certification process for process; technical and commercial specialists who are re- sponsible for oil and gas reserves estimation; ▸ Assess the competence of both internal and exter- nal specialists and the objectivity and independ- ence of external specialists, to consider whether they were appropriately qualified to carry out the estimation of oil and gas reserves; ▸ Analyze the latest reports of DeGolyer and Mac- Naughton (D&M) on their reviews performed in 2021 of the group’s estimated oil and gas reserves in Romania, UAE, Austria, New Zealand, Norway and Libya; ▸ Test whether significant additions or reductions in oil and gas reserves were made in the period in which the new information became available and in compliance with Group’s Reserves and Resources Guidelines; ▸ Test that the updated oil and gas reserve estimates were included appropriately in the Group’s consid- eration of impairment, in accounting for deprecia- tion & amortization and the valuation of the financial asset related to the reserves redetermination right; and ▸ Assess the adequacy of the disclosures in the fi- nancial statements. Estimation of oil and gas reserves Oil and gas reserves are an indicator of the future po- tential of the group’s performance.They have an impact on the financial statements as they are the basis for ▸ production profiles in future cash flow estimates; ▸  depreciation, amortization and impairment charges ▸ the valuation of the financial asset at the amount of and EUR 432 mn related to the reserves redetermina- tion right out of the acquisition of an interest in the Yuzhno Russkoye field in 2017. The estimation of oil and gas reserves requires judge- ment and assumptions made by management and en- gineers due to the technical uncertainty in assessing quantities. The principal risk of the oil and gas reserves estimate is the impact on the group’s financial statements through impairment testing, depreciation & amortization, de- commissioning provision estimate, and the valuation of the financial asset related to the reserves redetermina- tion right. OMV Group’s disclosures about oil and gas reserves and related impairment testing are included in Note 2 (Accounting policies, judgements and estimates), Note 7 (Depreciation, amortization, impairments and write ups), Note 9 (Other operating expenses), Note 18 (Financial assets) and Note 23 (Provisions). 102 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter Valuation of provision for decommissioning and restoration obligations We assessed management’s estimation of the provi- sion for decommissioning and restoration obligations. The total provision for decommissioning and restoration obligations amounted to EUR 3,756 mn at December 31, 2021. Group’s core activities regularly lead to obligations re- lated to dismantling and removal, asset retirement and soil remediation activities. The principal risk relates to management’s estimates of future costs, discount rates and inflation rates, which are used to project the provision for decommissioning and restoration obligations. In addition, the valuation of provision for decommissioning and restoration obliga- tions may also be impacted by climate risk and energy transition as described in the key audit matter above. OMV Group’s disclosures about the provision for de- commissioning and restoration obligations are included in Note 2 (Accounting policies, judgements and esti- mates) and Note 23 (Provisions). Specifically, our work included, but was not limited to, the following procedures: ▸ Assess the design and implementation of the con- trols over the decommissioning and restoration obli- gations estimation process; ▸ Compare current estimates of costs with actual de- commissioning and restoration costs previously in- curred. Where no previous data was available, we reconciled cost estimates to third party support or the Group’s engineers’ estimates; ▸ Inspection of supporting evidence for any material ▸ Confirm whether the decommissioning dates are revisions in cost estimates during the year; consistent with the Group’s budget and business plans; analysis of discount rates and inflation rates; ▸ Involve our valuation specialists to assist us in the ▸ Test the mathematical accuracy of the decommis- ▸ Assess the adequacy of the disclosures in the fi- ▸ The procedures described in the key audit matter sioning and restoration obligation calculation; nancial statements; and regarding climate risk and energy transition above. 103 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Other Information Management is responsible for the other information. The other information comprises the information in- cluded in the annual report and the annual financial re- port, but does not include the consolidated financial statements, the directors’ report for the Group and the auditor’s report thereon. We received the "Consolidated Corporate Governance Report" and the "Consolidated Report on the Payments Made to Government" until the date of this audit opinion, the rest of the annual report and the annual financial report is estimated to be pro- vided to us after the date of the auditor's report. Our opinion on the consolidated financial statements does not cover the other information and we do not ex- press any form of assurance conclusion thereon. In connection with our audit of the consolidated finan- cial statements, our responsibility is to read the other information and, in doing so, to consider whether the other information is materially inconsistent with the con- solidated financial statements or our knowledge ob- tained in the audit, or otherwise appears to be materi- ally misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other infor- mation, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and of the Audit Committee for the Consoli- dated Financial Statements Management is responsible for the preparation of the consolidated financial statements in accordance with IFRS as adopted by the EU, and the additional require- ments under Section 245a Austrian Company Code (UGB) for them to present a true and fair view of the assets, the financial position and the financial perfor- mance of the Group and for such internal controls as management determines are necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless manage- ment either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The Audit Committee is responsible for overseeing the Group’s financial reporting process. 104 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Auditor’s Responsibilities for the Audit Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU regulation and in accordance with Austrian Standards on Auditing, which require the application of ISA, always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered mate- rial if, individually or in the aggregate, they could rea- sonably be expected to influence the economic deci- sions of users taken on the basis of these financial statements. As part of an audit in accordance with the EU regula- tion and in accordance with Austrian Standards on Au- diting, which require the application of ISA, we exercise professional judgment and maintain professional scep- ticism throughout the audit. We also: ▸  identify and assess the risks of material misstate- ment of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and ob- tain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of in- ternal control; ▸ obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effective- ness of the Group’s internal control; ▸ evaluate the appropriateness of accounting policies used and the reasonableness of accounting esti- mates and related disclosures made by manage- ment; ▸ conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or con- ditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or condi- tions may cause the Group to cease to continue as a going concern; ▸ evaluate the overall presentation, structure and content of the consolidated financial statements, in- cluding the disclosures, and whether the consoli- dated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; ▸ obtain sufficient appropriate audit evidence regard- ing the financial information of the entities or busi- ness activities within the Group to express an opin- ion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we iden- tify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical require- ments regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Audit Com- mittee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit mat- ters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circum- stances, we determine that a matter should not be communicated in our report because the adverse con- sequences of doing so would reasonably be expected to outweigh the public interest benefits of such commu- nication. 105 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Report on Other Legal and Regulatory Requirements Comments on the Director’s Report for the Group Pursuant to Austrian Generally Accepted Accounting Principles, the directors’ report for the Group is to be audited as to whether it is consistent with the consoli- dated financial statements and as to whether the direc- tors’ report for the Group was prepared in accordance with the applicable legal regulations. Management is responsible for the preparation of the directors’ report for the Group in accordance with Aus- trian Generally Accepted Accounting Principles. We conducted our audit in accordance with Austrian Standards on Auditing for the audit of the directors’ re- port for the Group. Opinion In our opinion, the directors’ report for the Group was prepared in accordance with the valid legal require- ments, comprising the details in accordance with Sec- tion 243a Austrian Company Code (UGB), and is con- sistent with the consolidated financial statements. Statement Based on the findings during the audit of the consoli- dated financial statements and due to the thus obtained understanding concerning the Group and its circum- stances no material misstatements in the directors’ re- port for the Group came to our attention. Additional information in accordance with article 10 EU regulation We were elected as auditor by the ordinary general meeting on June 2, 2021. We were appointed by the Supervisory Board on June 22, 2021. We are auditors without cease since 2011. We confirm that the audit opinion in the Section "Report on the consolidated financial statements" is consistent with the additional report to the audit committee re- ferred to in article 11 of the EU regulation. We declare that no prohibited non-audit services (arti- cle 5 par. 1 of the EU regulation) were provided by us and that we remained independent of the audited com- pany in conducting the audit. Responsible Austrian Certified Public Accountant The engagement partner is Mr. Gerhard Schwartz, Cer- tified Public Accountant. Vienna, March 9, 2022 Ernst & Young Wirtschaftsprüfungsgesellschaft m.b. H. Katharina Schrenk m.p. Wirtschaftsprüfer/Certified Public Accountant Gerhard Schwartz m.p. Wirtschaftsprüfer/Certified Public Accountant 106 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 107 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Consolidated Income Statement for 2021 Consolidated Income Statement In EUR mn Sales revenues Other operating income Net income from equity-accounted investments Total revenues and other income Purchases (net of inventory variation) Production and operating expenses Production and similar taxes Depreciation, amortization, impairments and write-ups Selling, distribution and administrative expenses Exploration expenses Other operating expenses Operating Result Dividend income Interest income Interest expenses Other financial income and expenses Net financial result Profit before tax Taxes on income and profit Net income for the year thereof attributable to stockholders of the parent thereof attributable to hybrid capital owners thereof attributable to non-controlling interests Basic Earnings Per Share in EUR Diluted Earnings Per Share in EUR Note 4, 5 6 6, 16 17 7 7, 8 9 31 11, 31 11, 31 11, 31 12 13 13 2021 2020 35,555 933 600 37,087 16,550 1,877 38 18,465 (20,257) (3,645) (658) (3,750) (2,746) (280) (688) 5,065 19 161 (334) (40) (194) 4,870 (2,066) 2,804 2,093 94 617 6.40 6.40 (9,598) (1,892) (325) (2,418) (1,896) (896) (389) 1,050 19 177 (280) (91) (175) 875 603 1,478 1,258 84 136 3.85 3.85 108 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Consolidated Statement of Comprehensive Income for 2021 Consolidated Statement of Comprehensive Income In EUR mn Net income for the year Currency translation differences Gains/(losses) arising during the year, before income taxes Reclassification of (gains)/losses to net income Gains/(losses) on hedges Gains/(losses) arising during the year, before income taxes Reclassification of (gains)/losses to net income Share of other comprehensive income of equity-accounted investments Total of items that may be reclassified (“recycled”) subsequently to the income statement Remeasurement gains/(losses) on defined benefit plans Gains/(losses) on equity investments Gains/(losses) on hedges that are subsequently transferred to the carrying amount of the hedged item Share of other comprehensive income of equity-accounted investments Total of items that will not be reclassified (“recycled”) subsequently to the income statement Income taxes relating to items that may be reclassified (“recycled”) subsequently to the income statement Income taxes relating to items that will not be reclassified (“recycled”) subsequently to the income statement Total income taxes relating to components of other comprehensive income Other comprehensive income for the year, net of tax Total comprehensive income for the year thereof attributable to stockholders of the parent thereof attributable to hybrid capital owners thereof attributable to non-controlling interests Note 2021 2020 2,804 1,478 21 3, 6, 9 28 16 23 18 28 16 21 21 946 (1,234) 883 63 210 386 (176) 0 (1,233) (1) 38 419 (380) (102) 1,156 (1,298) 53 (1) 17 (0) 4 (2) (113) (6) 69 (118) (41) (10) 8 (33) 18 8 1,192 3,996 3,164 94 739 (1,407) 70 (4) 84 (9) 109 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Consolidated Statement of Financial Position as of December 31, 2021 Note 2021 2020 14 15 16 18 19 25 17 18 18 19 26 20 3,161 18,569 6,887 3,730 113 1,265 33,724 3,150 4,518 5,148 107 621 5,050 18,595 3,443 19,203 8,321 3,447 103 1,179 35,695 2,352 3,316 3,018 36 537 2,854 12,112 1,479 53,798 1,464 49,271 Assets In EUR mn Intangible assets Property, plant and equipment Equity-accounted investments Other financial assets Other assets Deferred taxes Non-current assets Inventories Trade receivables Other financial assets Income tax receivables Other assets Cash and cash equivalents Current assets Assets held for sale Total assets 110 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Equity and Liabilities In EUR mn Share capital Hybrid capital Reserves Equity of stockholders of the parent Non-controlling interests Total equity Provisions for pensions and similar obligations Bonds Lease liabilities Other interest-bearing debts Provisions for decommissioning and restoration obligations Other provisions Other financial liabilities Other liabilities Deferred taxes Non-current liabilities Trade payables Bonds Lease liabilities Other interest-bearing debts Income tax liabilities Provisions for decommissioning and restoration obligations Other provisions Other financial liabilities Other liabilities Current liabilities Liabilities associated with assets held for sale Total equity and liabilities Note 2021 2020 327 2,483 12,695 15,505 327 3,228 10,184 13,739 6,491 21,996 6,159 19,899 1,299 7,275 887 1,415 3,683 643 587 118 1,309 17,216 4,860 795 131 350 1,301 72 360 4,367 1,440 13,677 1,458 8,019 943 1,280 3,926 576 454 135 1,229 18,020 4,304 850 141 703 278 72 304 3,095 868 10,616 909 53,798 736 49,271 22 21 23 24 24 24 23 23 24 24 25 24 24 24 24 23 23 24 24 20 111 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Consolidated Statement of Changes in Equity for 2021 Consolidated Statement of Changes in Equity in 2021¹ In EUR mn Share capital Capital reserves Hybrid capital Revenue reserves Currency translation differences January 1, 2021 Net income for the year Other comprehensive income for the year Total comprehensive income for the year Dividend distribution and hybrid coupon Changes in hybrid capital Disposal of treasury shares Share-based payments Increase/(decrease) in non-controlling interest Reclassification of cash flow hedges to balance sheet December 31, 2021 327 — — — — — — — — — 327 1,506 — — — — — 1 7 — — 1,514 3,228 — — — — (745) — — — — 2,483 10,502 2,187 61 2,248 (699) (43) — — — — 12,008 (1,785) — 875 875 — — — — — — (910) Consolidated Statement of Changes in Equity in 2020¹ In EUR mn January 1, 2020 Net income for the year Other comprehensive income for the year Total comprehensive income for the year Capital increase Dividend distribution and hybrid coupon Disposal of treasury shares Share-based payments Increase/(decrease) in non-controlling interests Reclassification of cash flow hedges to balance sheet December 31, 2020 1 See Note 21 – OMV equity of the parent Share capital Capital reserves Hybrid capital Revenue reserves Currency translation differences 327 — — — — — — — — — 327 1,506 — — — — — 3 (3) — — 1,506 1,987 — — — 1,241 — — — — — 3,228 9,832 1,341 (3) 1,338 — (673) — — 5 — 10,502 (694) — (1,091) (1,091) — — — — — — (1,785) 112 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Share of other compr. income of equity- Hedges accounted investments Treasury shares Equity of stockholders of the parent Non-controlling interests Total equity 51 — 134 134 — — — — — (13) 173 (86) — 0 0 — — — — — — (86) (3) — — — — — 0 — — — (3) 13,739 2,187 1,071 3,258 (699) (789) 2 7 — (13) 15,505 6,159 617 121 739 (268) — — — (147) 8 6,491 19,899 2,804 1,192 3,996 (967) (789) 2 7 (147) (5) 21,996 Share of other compr. income of equity- Hedges accounted investments Treasury shares Equity of stockholders of the parent Non-controlling interests Total equity 41 — (61) (61) — — — — — 71 51 18 — (107) (107) — — — — — 3 (86) (4) — — — — — 1 — — — (3) 13,012 1,341 (1,262) 80 1,241 (673) 4 (3) 5 73 13,739 3,851 136 (146) (9) — (209) — — 2,519 8 6,159 16,863 1,478 (1,407) 70 1,241 (882) 4 (3) 2,524 81 19,899 113 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Consolidated Statement of Cash Flows for 2021 Consolidated Statement of Cash Flows In EUR mn Net income for the year Depreciation, amortization, impairments and write ups Deferred taxes Current taxes Income taxes paid Tax refunds Losses/(gains) from disposal of non-current assets and businesses Income from equity-accounted investments and other dividend income Dividends received from equity-accounted investments and other companies Interest expense Interest paid Interest income Interest received Increase/(decrease) in personnel provisions Increase/(decrease) in provisions Other changes Cash flow from operating activities excluding net working capital effects Decrease/(increase) in inventories Decrease/(increase) in receivables Increase/(decrease) in liabilities Changes in net working capital components Cash flow from operating activities Investments Intangible assets and property, plant and equipment Investments, loans and other financial assets Acquisitions of subsidiaries and businesses net of cash acquired Disposals Proceeds in relation to non-current assets Proceeds from the sale of subsidiaries and businesses, net of cash disposed Cash flow from investing activities Increase in long-term borrowings Repayments of long-term borrowings Increase/(decrease) in short-term borrowings Decrease in non-controlling interest Dividends paid to stockholders of the parent (incl. hybrid coupons) Dividends paid to non-controlling interests Increase hybrid bond Cash flow from financing activities Effect of foreign exchange rate changes on cash and cash equivalents Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Thereof cash disclosed within Assets held for sale Cash and cash equivalents presented in the consolidated statement of financial position Note 7 12 12 6, 9 6, 18, 31 16, 35 11, 31 11, 31 23 23 26 17 18, 19 24 2021 2,804 3,935 10 2,056 (1,135) 24 (267) (619) 2,007 175 (207) (156) 78 (13) (16) 221 8,897 (1,084) (1,932) 1,136 (1,881) 7,017 2020 1,478 3,197 (846) 244 (402) 45 (12) (57) 228 168 (164) (160) 53 (60) 21 (948) 2,786 288 145 (82) 351 3,137 14, 15 18 3 (2,497) (382) — (1,960) (194) (3,880) 397 661 (1,820) 250 (2,287) 61 (4) (733) (265) — (2,977) (25) 2,195 2,869 5,064 14 72 15 (5,948) 3,338 (797) (96) — (673) (206) 1,241 2,808 (66) (69) 2,938 2,869 15 26 26 26 21 22 21 26 26 26 5,050 2,854 114 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Basis of Preparation and Accounting Policies 1 Basis of preparation OMV Aktiengesellschaft (registered in the Austrian Register of Companies with its office based at Trabrennstraße 6–8, 1020 Vienna, Austria), is an inte- grated, international oil, gas and chemical company with activities in Exploration & Production, Refining & Marketing and Chemicals & Materials. These financial statements have been prepared and are in compliance with International Financial Re- porting Standards (IFRSs) as adopted by the EU and in accordance with the supplementary account- ing regulations pursuant to Sec. 245a, Para. 1 of the Austrian Commercial Code (UGB). The financial year corresponds to the calendar year. The consolidated financial statements are in general based on the historical cost principle, except for certain items that have been measured at fair value as de- scribed in Note 2 – Accounting policies, judgements and estimates. The consolidated financial statements for 2021 have been prepared in million EUR (EUR mn, EUR 1,000,000). Accordingly, there may be rounding differences. The consolidated financial statements comprise the fi- nancial statements of OMV Aktiengesellschaft and the entities it controls (its subsidiaries) as at December 31, 2021. The financial statements of all consolidated com- panies are prepared in accordance with uniform group- wide accounting policies. A list of subsidiaries, equity- accounted investments and other investments is in- cluded under Note 38 – Direct and indirect investments of OMV Aktiengesellschaft – including consolidation method, business segment, place of business and in- terest held by OMV. The consolidated financial statements for 2021 were approved and released for publication by the Supervi- sory Board on March 9, 2022. 2 Accounting policies, judgements and estimates 1) Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year, except for the changes as described below. The Group has adopted the following amendments to standards from January 1, 2021: Rent Concessions ▸ Amendment to IFRS 16 Leases: Covid-19-Related ▸ Amendment to IFRS 16 Leases: Covid-19-Related ▸ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 Rent Concessions beyond 30 June 2021 These amendments are relevant for the following types of hedging relationships and financial instruments of the Group, all of which extend beyond 2021: ▸ Interest rate swaps that are designated as cash flow hedging instruments and indexed to USD LI- BOR ▸ Other financial instruments like loan receivables, loans and borrowings, derivative financial instru- ments for which hedge accounting is not applied, and commitments, indexed to LIBOR (mainly USD LIBOR, JPY LIBOR) and IFRS 16: Interest Rate Benchmark Reform - Phase 2 The application of the amendments affects the Group as follows: The amendments did not have any material impact on OMV’s group financial statements. Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform - Phase 2 The Group adopted the phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 in which the IASB addressed the issues that arise during the re- form of an interest rate benchmark rate, including the replacement of one benchmark rate with an alternative one. ▸ Changes to contractual cash flows: The basis for determining the contractual cash flows of financial assets or financial liabilities to which the amortised cost measurement applies can change as a result of IBOR reform, for example, if the contract is amended to replace the benchmark rate with an al- ternative one. The Phase 2 amendments provide a practical expedient to account for these changes in the basis for determining contractual cash flows as a result of interest rate benchmark reform. Under the practical expedient, entities will account for 115 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS these changes by updating the effective interest rate without the recognition of an immediate gain or loss. For the year ended 31 December 2021, the Group applied the practical expedient to the JPY loan. ▸ Hedge accounting: When the phase 1 amendments cease to apply, the Group will amend its hedge designation to reflect changes which are required by IBOR reform and will update its hedge documen- tation by the end of the reporting period in which the changes are made. It is not required to discon- tinue its hedge relationships. The Group has not made any amendments to its hedge documentation in the reporting period relating to IBOR reform. When the Group amends its hedge designation, the accumulated amount outstanding in the cash flow hedge reserve is deemed to be based on the alter- native benchmark rate. ▸ Additional disclosures related to interest rate benchmark reform are required. For details refer to Note 28 – Risk Management. 2) New and revised standards not yet mandatory OMV has not applied the following new or revised IFRSs that have been issued but are not yet effective. They are not expected to have any material effects on the Group’s financial statements. EU endorsement is still pending in some cases. Standards and amendments Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework Amendments to IAS 16 Property, Plant and Equipment: Proceeds before intended use Amendments to IAS 37: Onerous Contracts - Cost of Fulfilling a Contract Annual Improvements to IFRS Standards 2018-2020 IFRS 17 Insurance Contracts and Amendments to IFRS 17 Amendments to IAS 1: Classification of Liabilities as Current and Non-Current Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies Amendments to IAS 8: Definition of Accounting Estimates Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction IASB effective date January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 3) Significant accounting policies, judgements and assumptions Use of estimates and judgements Preparation of the consolidated financial statements requires management to make estimates and judge- ments that affect the amounts reported for assets, li- abilities, income and expenses, as well as the amounts disclosed in the notes. These estimates and assumptions are based on historical experience and other factors that are deemed reasonable at the date of preparation of these financial statements. Actual outcomes could differ from these estimates. The estimates and assumptions having the most sig- nificant impact on OMV Group results are high- lighted below and should be read together with the relevant notes mentioned. Significant estimates and assumptions have been made particularly with re- spect to - - - oil and gas reserves (see 2.3h), provisions for decommissioning and restoration obligations (see 2.3s and 23), provisions for onerous contracts (see 2.3s and 23), - - the recoverability of intangible assets, property, plant and equipment and equity-accounted in- vestments (see 2.3j and 7) as well as the recoverability of other financial assets, which mainly refer to the contractual position to- wards Gazprom with regard to the reserves re- determination of Yuzhno Russkoye field and the expenditure recoverable from the Romanian State related to decommissioning, restoration and environmental obligations (see 2.3m and 18). Effect of climate-related matters and energy tran- sition OMV has considered the short- and long-term ef- fects of climate change and energy transition in pre- paring the consolidated financial statements. The significant accounting estimates performed by man- agement incorporate the future effects of OMV’s own strategic decisions and commitments on having its portfolio adhered to the energy transition targets, short and long-term impacts of climate-related mat- ters and energy transition to lower carbon energy 116 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS sources together with management’s best estimate on global supply and demand, including forecasted commodities prices. OMV is aware of its responsibility and will live up to its commitment to the Paris Agreement and the EU climate targets. OMV is committed to becoming a net-zero emissions company by 2050 (Scopes 1, 2, and 3) and has set interim targets for 2030 and 2040, with well-defined actions aiming to meet the targets by 2030. Notably, by 2030, OMV aims to re- duce its Scope 1 and 2 emissions by 30% and its Scope 3 emissions by 20%. Nevertheless, there is significant uncertainty around the changes in the mix of energy sources over the next 30 years and the extent to which such changes will meet the ambitions of the Paris Agreement. While companies can commit to such ambitions, fi- nancial reporting under IFRS requires the use of as- sumptions that represent management’s current best estimate of the range of expected future eco- nomic conditions, which may differ from such ambi- tions. OMV operates on a global market with global prod- ucts and expects to see energy transition at different pace in different parts of the world. Hence, OMV’s mid term plan (MTP) assumptions, which are used for estimates in different areas of the group financial statements, including impairment of assets, useful lives and decommissioning provisions, are based on a scenario which is based on the IEA Stated Policies Scenario (STEPS) taken from the World Economic Outlook and adjusted such that the EU, the United States, China, Japan, and South Korea (with a two- year delay for political alignment and measuring ef- fectiveness) are following the IEA Sustainable De- velopment Scenario (SDS) and meeting the Paris Agreement targets. To recognize the uncertainty in the pace of the en- ergy transition, OMV performed a stress test analy- sis, using a decarbonization scenario which is built on the IEA SDS Scenario, where the entire world reaches the Paris Agreement commitment to be net- zero by 2070. The goal of this analysis is to assess the impact of this scenario on the recoverability of assets and valuation of liabilities. The entire world following the Paris agreement tar- gets has an impact on the global demand which im- pacts the oil and gas price assumptions, CO2 price assumptions, refining and petrochemical margins and cracks, power prices and spreads as well as volume development expectations which have been used in the stress test analysis. Recoverability of assets Commodity price assumptions may have a signifi- cant impact on the recoverable amounts of E&A as- sets, PPE and goodwill. Oil and gas price assumptions have already been revised in 2020 to reflect the potential impact of en- ergy transition and led to a pre-tax impairment of E&P oil and gas assets of EUR 1.2 bn. In 2021, the oil and gas price assumptions in the MTP scenario did not materially change in comparison to 2020. Consequently, no impairment losses or rever- sals of impairments due to changes in price assump- tions were recorded. Management continues to monitor the relevant com- modity price assumptions in the future. This might lead to additional impairment losses or reversals of impairments. In the stress test, OMV assumes for the E&P seg- ment a USD 15-20 lower long term oil price than in the MTP scenario and the long term gas price to be lower by EUR/MWh 5. According to this stress case, the carrying amounts of the oil and gas assets with proved reserves would have to be decreased by EUR 4.2 bn. In addition, goodwill would decrease by EUR 0.3 bn and some oil and gas assets with un- proved reserves would be abandoned (pre-tax P&L impact of EUR 0.3 bn). The remaining carrying amount of PPE of oil and gas fields with a share of oil production higher than 55% would be EUR 2.2 bn in this stress case scenario. In the R&M segment, the stress case reflects glob- ally declining volume developments for almost all products resulting in negative growth rates and fur- ther decline in margins and cracks compared to the MTP scenario. This would lead to a further decrease in the carrying amounts in total of EUR 1.0 bn re- lated to the Romanian refinery and the investment in ADNOC refining. The refineries Schwechat and Burghausen are resilient to such a scenario due to the strong focus of these refineries on petrochemical production. OMV doesn’t see the C&M segment materially im- pacted by the energy transition, hence there haven’t been stress test assumptions different from the MTP scenario. 117 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS The stress case was calculated using a simplified method. The calculation is based on a DCF model similar to a value in use calculation where no future investments for enhancements, improvements and restructuring have been considered. In the E&P seg- ment, the cash flows are based on an adjusted mid- term planning for five years and a life of field plan- ning for the remaining years until abandonment. In the R&M segment, the cash flows of the 5-year mid- term planning and a terminal value are included. The (negative) growth rates used for calculating the terminal value are estimated in line with the ex- pected changes in the demand of the various prod- ucts over the next 20 years. The stress case does not include any other changes to input factors than prices and volumes. It does not consider conse- quential changes that management could imple- ment such as cost reductions, reserve reviews, di- vestments, and changes in business plans. The amounts presented above should therefore not be seen as a best estimate of an expected impairment impact following such a scenario. Useful lives The tangible assets in R&M will in average be fully depreciated over the next 7 years. Demand for pe- troleum products is expected to stay robust over this period of time. It is therefore not expected that en- ergy transition has a material impact on the ex- pected useful lives of property, plant, and equipment in the R&M segment. In the E&P segment, the re- maining average life of field based on 2P re- serves is 12 years and depreciation is calculated based on the “unit-of-production” method, therefore OMV does not expect that energy transition has a material impact on the useful lives of property, plant and equipment in the E&P segment. As OMV doesn’t see the C&M segment materially impacted by the energy transition, there is also no material im- pact on useful lives in this segment expected. Decommissioning provisions The economic cut-off date of E&P oil and gas assets does not shift significantly under the stress case scenario. The impact on the carrying amount of the decommissioning provisions is therefore expected to be immaterial. For refineries, no decommissioning provisions are recognized. The refinery sites of OMV are ex- pected to continue to be used for production even under a Paris-aligned energy transition scenario. Whereas the refineries in Europe have a strong fo- cus on the production of chemicals and further measures for transformation of these refineries will 118 be taken, also ADNOC Refining is expected to con- tinue to operate under such a scenario. a) Business combinations and goodwill Business combinations are accounted for using the ac- quisition method. Assets and liabilities of subsidiaries acquired are included at their fair value at the time of acquisition. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportion- ate share of the acquiree’s identifiable net assets. Any contingent consideration is measured at fair value at the date of acquisition. Contingent consideration classified as financial asset or liability is subsequently measured at fair value with the changes in fair value recognized in profit or loss. Goodwill is calculated as the excess of the aggregate of the consideration transferred, the amount recognized for non-controlling interest and the fair value of the eq- uity previously held by OMV in the acquired entity over the net identifiable assets acquired and liabilities as- sumed. Goodwill is recorded as an asset and tested for impairment at least yearly. Impairments are recorded immediately through profit or loss, subsequent write- ups are not possible. Any gain on a bargain purchase is recognized in profit or loss immediately. b) Sales revenue Revenue is generally recognized when control over a product or a service is transferred to a customer. It is measured based on the consideration specified in a contract with a customer and excludes amounts col- lected on behalf of third parties. When goods such as crude oil, LNG, oil and petro- chemical products and similar goods are sold, the deliv- ery of each quantity unit normally represents a single performance obligation. Revenue is recognized when control of the goods has transferred to the customer, which is the point in time when legal ownership as well as the risk of loss has passed to the customer and is determined on the basis of the Incoterm agreed in the contract with the customer. These sales are done with normal credit terms according to the industry standard. Revenue from the production of crude oil, in which OMV has an interest with other producers, is recog- nized according to the sales method. This means that revenue is recognized based on the actual sales to third parties, regardless of the Group’s percentage in- terest or entitlement. An adjustment of production costs OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS is recognized at average cost for the difference be- tween the costs associated with the output sold and the costs incurred based on entitlement to output, with a counter entry in the other assets or liabilities. In the R&M retail business, revenues from the sale of fuels are recognized when products are supplied to the customers. Depending on whether OMV is principal or agent in the sale of shop merchandise, revenue and costs related to such sales are presented gross or net in the income statement. OMV is principal if it controls the goods before they are transferred to the customer, which is mainly indicated by OMV having the inventory risk. At filling stations, payments are due immediately at the time of purchase. OMV’s gas and power supply contracts include a single performance obligation which is satisfied over the agreed delivery period. Revenue is recognized according to the consumption by the customer and in line with the amount to which OMV has a right to invoice. Only in exceptional cases long-term gas supply contracts contain stepped prices in different periods where the rates do not reflect the value of the goods at the time of delivery. In these cases revenue is recognized based on the average contractual price. In some customer contracts for the delivery of natural gas, the fees charged to the customer comprise a fixed charge as well as a variable fee depending on the volumes delivered. These contracts contain only one performance obligation which is to stand-ready for the delivery of gas over a certain period. The revenue from the fixed charges and the variable fees is recognized in line with the amount chargeable to the customer. Gas and power deliveries are billed and paid on a monthly basis. Gas storage and gas transportation contracts contain a stand-ready obligation for providing storage or transportation services over an agreed period of time. Revenue is recognized according to the amount to which OMV has a right to invoice. These services are billed and paid on a monthly basis. There are some customer contracts in OMV for the delivery of oil and gas as well as for the provision of gas storage and transportation services which have a term of more than one year. In principle, IFRS 15 requires the disclosure of the total amount of trans- action prices allocated to unperformed performance obligations for such contracts. Contracts for the delivery of oil contain variable prices based on market prices as at delivery date, as it is common in the oil industry. For these contracts it is, therefore, not possible to allocate the transaction price to unsatisfied performance obligations. For gas delivery and gas storage and transportation contracts OMV applies the practical expedient according to IFRS 15.121 (b) according to which this information need not be disclosed for contracts where revenue is recognized in the amount to which the entity has a right to invoice. OMV, therefore, does not disclose this information. c) Other revenues Other revenues include revenues from commodity con- tracts which are in the scope of IFRS 9. Sales and purchases of commodities are reported net within other revenues when the forward sales and purchase contracts are determined to be for trading purposes and not for the final physical delivery. In addition, other revenues include an adjustment of revenues from considering the national oil company’s profit share as income tax in certain production sharing agreements in the E&P segment (see 2.3f), realized and unrealized results from hedging of sales transactions as well as lease and rental income. d) Exploration expenses Exploration expenses relate exclusively to the business segment E&P and comprise the costs associated with unproved reserves. These include geological and geophysical costs for the identification and investigation of areas with possible oil and gas reserves and administrative, legal and consulting costs in connection with exploration. They also include all impairments on exploration wells where no proved reserves could be demonstrated. Depreciation of economically successful exploration wells is reported as depreciation, amortization, impairment charges and write-ups. e) Research and development Expenditure related to research activities is recognized as expense in the period in which it is incurred. Research and development (R&D) expenses, which are presented in the income statement within other operating expenses, include all direct and indirect materials, personnel and external services costs incurred in connection with the focused search for new insights related to the development and significant improvement of products, services and processes and in connection with research activities. Development costs are capitalized if the recognition criteria according to IAS 38 are fulfilled. f) Exploration and production sharing agreements Exploration and production sharing agreements (EPSAs) are contracts for oil and gas licenses in which the oil or gas production is shared between one or 119 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS more oil companies and the host country/national oil company in defined proportions. Exploration expenditures are carried by the oil companies as a rule and recovered from the state or the national oil company through so called “cost oil” in a successful case only. Under certain EPSA contracts the host country’s/national oil company’s profit share represents imposed income taxes and is treated as such for purposes of the income statement presentation. g) Intangible assets and property, plant and equipment Intangible assets and property, plant and equipment are recognized at costs of acquisition or construction (including costs of major inspection and general overhauls). The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset when a decommissioning provision is recognized (see 2.3s). Costs for replacements of components are capitalized and carrying values of the replaced parts are derecognized. Costs relating to minor maintenance and repairs are treated as expenses in the year in which they are incurred. Intangible assets and depreciable property, plant and equipment (except for oil and gas assets and a contract-related intangible asset in E&P, see 2.3h) are amortized or depreciated on a straight-line basis over the useful economic life. Useful life Intangible assets Years Goodwill Software Concessions, licenses, contract-related intangible assets etc. Business-specific property, plant and equipment Indefinite 3–7 3–20, contract duration or unit-of production method E&P R&M Oil and gas wells Pipelines Gas power plant Storage tanks Refinery facilities Filling stations Petrochemical production facilities C&M Other property, plant and equipment Production and office buildings Other technical plant and equipment Fixtures and fittings Unit-of-production method 20-30 8–30 40 25 5–20 15-20 20–50 10–20 3–15 h) Oil and gas assets E&P activities are recorded using the successful efforts method. The acquisition costs of geological and geo- physical studies before the discovery of proved re- serves form part of expenses for the period. The costs of wells are capitalized and reported as intangible as- sets until the existence or absence of potentially com- mercially viable oil or gas reserves is determined. Wells which are not commercially viable are expensed. The costs of exploration wells whose commercial viability has not yet been determined continue to be capitalized as long as the following conditions are satisfied: ▸ Sufficient oil and gas reserves have been discov- ered that would justify completion as a production well. ▸ Sufficient progress is being made in assessing the economic and technical feasibility to justify begin- ning field development in the near future. ▸ The period for which the entity has the right to ex- plore in the specific area has not expired. Significant estimates and judgements: Recover- ability of unproved oil and gas assets There may be cases when costs related to unproved oil and gas properties remain capitalized over longer periods while various appraisal and seismic activities continue in order to assess the size of the reservoir and its commerciality. Further decisions on the opti- mum timing of such developments are made from a resource and portfolio point of view. As soon as 120 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS there is no further intention to develop the discovery, the assets are immediately impaired. Exploratory wells in progress at year-end which are de- termined to be unsuccessful subsequent to the state- ment of financial position date are treated as non-ad- justing events, meaning that the costs incurred for such exploratory wells remain capitalized in the financial statements of the reporting period under review and will be expensed in the subsequent period. License acquisition costs and capitalized exploration and appraisal activities are not amortized as long as they are related to unproved reserves, but tested for impairment when there is an indicator for a potential im- pairment. Once the reserves are proved and commer- cial viability is established, the related assets are re- classified into tangible assets. Development expendi- ture on the construction, installation or completion of in- frastructure facilities such as platforms and pipelines and drilling development wells is capitalized within tan- gible assets. Once production starts, depreciation com- mences. Capitalized exploration and development costs and support equipment are generally depreciated based on proved developed reserves by applying the unit-of-production method; only capitalized exploration rights and acquired reserves are amortized on the ba- sis of total proved reserves, unless a different reserves basis is more adequate. Significant estimate: Oil and gas reserves OMV Group’s oil and gas reserves are estimated by the Group’s petroleum engineers in accordance with industry standards and reassessed at least once per year. In addition, external reviews are performed regularly. In 2021, DeGolyer and MacNaughton (D&M) reviewed the reserves as of year-end 2020 of the majority of the oil and gas assets. The 2021 re- view did not include the reserves of the oil and gas assets in Russia and Malaysia (last review in 2020) and in Tunisia, KRI and Yemen (last review in 2018). An external review of the oil and gas assets not re- viewed in 2021 is planned for 2022. The results of the external reviews did not show sig- nificant deviations from the internal estimates, ex- cept for one case. In order to obtain a reasonable assurance on the reserves numbers of the field with a material deviation to D&M as of 31 December 2020, OMV engaged an independent external spe- cialist to provide an opinion on OMV’s approach for determining the reserves, which was deemed appro- priate. Oil and gas reserve estimates have a significant im- pact on the assessment of recoverability of carrying amounts of oil and gas assets of the Group. Down- ward revisions of these estimates could lead to im- pairment of the asset’s carrying. In addition, changes to the estimates of oil and gas reserves impact prospectively the amount of amorti- zation and depreciation as well as the valuation of the financial asset related to the reserves redetermi- nation right out of the acquisition of an interest in the Yuzhno Russkoye field. i) Associated companies and joint arrangements Associated companies are those entities in which the Group has significant influence, but not control nor joint control over the financial and operating policies. Joint arrangements, which are arrangements of which the Group has joint control together with one or more par- ties, are classified into joint ventures or joint operations. Joint ventures are joint arrangements in which the par- ties that share control have rights to the net assets of the arrangement. Joint operations are joint arrange- ments in which the parties that share joint control have rights to the assets, and obligations for the liabilities, re- lating to the arrangement. Investments in associated companies and joint ven- tures are accounted for using the equity method, under which the investment is initially recognized at cost and subsequently adjusted for the Group’s share of the profit or loss less dividends received and the Group’s share of other comprehensive income and other move- ments in equity. Significant joint exploration and production activities in the E&P segment are conducted through joint opera- tions which are not structured through a separate vehi- cle. For these joint operations, OMV recognizes in the consolidated financial statements its share of the as- sets held and liabilities and expenses incurred jointly with the other partners, as well as the group’s income from the sale of its share of the output and any liabili- ties and expenses that the group has incurred in rela- tion to the joint operation. Acquisitions of interests in a joint operation, in which the activity of the joint opera- tion constitutes a business, are accounted for accord- ing to the relevant IFRS 3 principles for business com- bination accounting (see 2.3a). In addition, there are contractual arrangements similar to joint operations in the Group which are not jointly controlled and therefore do not meet the definition of a joint operation according to IFRS 11. This is the case 121 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS when the main decisions can be taken by more than one combination of affirmative votes of the involved parties or where one other party has control. OMV as- sesses whether such arrangements are within or out of scope of IFRS 11 on the basis of the relevant legal ar- rangements such as concession, license or joint oper- ating agreements which define how and by whom the relevant decisions for these activities are taken. The accounting treatment for these arrangements is basi- cally the same as for joint operations. As acquisitions of interests in such arrangements are not within the scope of IFRS 3, OMV’s accounting policy is to treat such transactions as asset acquisitions. j) Impairment of assets Intangible assets, property, plant and equipment (in- cluding oil and gas assets) and investments in associ- ated companies and joint ventures are tested for im- pairment whenever events or changes in circum- stances indicate that an asset may be impaired. Impair- ment tests are performed on the level of the asset or the smallest group of assets that generates cash in- flows that are largely independent of those from other assets or groups of assets, called cash-generating units (CGUs). If assets are determined to be impaired, the carrying amounts are written down to their recoverable amount, which is the higher of fair value less costs of disposal or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market as- sessments of the time value of money and the risks specific to the asset or CGU. The pre-tax discount rate is determined by way of iteration. The cash flows are generally derived from the recent budgets and planning calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are al- located. The fair value less costs of disposal is determined on the basis of the recent market transactions, if available. If no such transactions can be identified, an appropriate valuation model is used. If the reasons for impairment no longer apply in a sub- sequent period, a reversal is recognized in profit or loss. The increased carrying amount related to the re- versal of an impairment loss shall not exceed the carry- ing amount that would have been determined (net of amortization and depreciation) had no impairment loss been recognized in prior years. Significant estimates and judgements: Recover- ability of assets Evaluating whether assets or CGUs are impaired or whether past impairments should be reversed, re- quire the use of different estimates and assumptions such as price developments, production volumes and discount rates. The key estimates and assumptions used bear the risk of change due to the inherent volatile nature of the various macro-economic factors and the uncer- tainty in asset or CGU specific factors like reserve volumes and production profiles, which can impact the recoverable amount of assets and/or CGUs. The key valuation assumptions for the recoverable amounts of E&P assets are the oil and natural gas prices, production volumes, exchange and discount rates. The production profiles were estimated based on reserves estimates (see Note 2.3h) and past ex- perience and represent management’s best estimate of future production. The cash flow projections for the first five years are based on the mid-term plan and thereafter on a “life of field” planning and there- fore cover the whole life term of the field. The nominal commodity price assumptions and the EUR-USD exchange rates are listed below: 2021 Brent oil price (USD/bbl) EUR-USD exchange rate Brent oil price (EUR/bbl) Realized gas price (EUR/MWh) CO2 price (EUR/t) 122 2022 2023 2024 2025 2026 65 1.22 53 15 55 65 1.22 53 14 58 65 1.22 53 14 61 65 1.22 53 14 64 65 1.22 53 15 68 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 2020 Brent oil price (USD/bbl) EUR-USD exchange rate Brent oil price (EUR/bbl) Realized gas price (EUR/MWh) CO2 price (EUR/t) 2021 2022 2023 2024 2025 50 1.15 43 10 28 60 1.15 52 12 30 60 1.15 52 13 33 65 1.15 57 14 35 65 1.15 57 13 35 For the years 2027 until 2030, OMV assumed a Brent oil price of USD 65/bbl which is expected to gradually decline to USD 60/bbl until 2035. From 2035 onwards, OMV applied a Brent oil price of USD 60/bbl. All before mentioned assumptions for the years after 2026 are based on 2026 real terms. Gas prices are assumed to remain stable in real terms af- ter 2026. As there were no significant changes in the assump- tions in 2021 in comparison to 2020, there was no indication for an impairment due to price changes in the E&P segment in 2021. In 2020, OMV revised its long-term oil and gas price assumptions in order to take into account the uncer- tainty over the pace of the energy transition to a lower-carbon energy sources. In addition, the short- term oil and gas price assumption were updated in order to reflect the significant decrease in oil and gas prices due to the impact of the COVID-19 pan- demic. The assumptions used for oil and gas prices for short and medium term are based on management’s best estimate and were consistent with external sources. The long-term assumptions were con- sistent with data provided by external studies and consider long-term views of global supply and de- mand. In particular, OMV’s long term assumptions and the inverse price curve applied for Brent oil, take into consideration the impacts of climate-related matters and energy transition to lower-carbon en- ergy sources. In the R&M and C&M business, the main assump- tions for the calculation of the recoverable amounts are the relevant margins, volumes as well as dis- count, inflation and growth rates. The value in use calculation is based on the cash flows of the 5- year mid-term planning and a terminal value. k) Assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amounts are to be real- ized by sale rather than through continued use. This is the case when the sale is highly probable, and the as- set or disposal group is available for immediate sale in its present condition. Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Property, plant and equipment and intangible as- sets once classified as held for sale are no longer amortized or depreciated. l) Leases OMV as a lessee recognizes lease liabilities and right- of-use assets for lease contracts according to IFRS 16. It applies the recognition exemption for short-term leases and leases in which the underlying asset is of low value and therefore does not recognize right-of-use assets and lease liabilities for such leases. Leases to explore for and use oil and natural gas, which comprise mainly land leases used for such activities, are not in the scope of IFRS 16. The rent for these contracts is recognized as expense on a straight-line basis over the lease term. Non-lease components are separated from the lease components for the measurement of right-of-use assets and lease liabilities. Lease liabilities are recognized at the present value of fixed lease payments and lease payments which depend on an index or rate over the determined lease term with the applicable discount rate. Right-of-use assets are recognized at the value of the lease liability plus prepayments and initial direct costs and presented within property, plant and equip- ment. OMV as a lessor entered into contracts which were as- sessed as operating leases, for which fixed and varia- ble rent is recognized as revenue from rents and leases over the period of the lease. 123 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Significant estimates and judgements: Leases OMV has a significant number of contracts in which it leases filling stations. Many of those contracts in- clude prolongation and termination options. Prolon- gation options or periods after termination options are included in the lease term if it is reasonably cer- tain that the lease is prolonged or not terminated. When determining the lease term the Group takes into account all relevant facts and circumstances that create an economic incentive for shortening or prolonging the lease term using the available op- tions. When assessing the lease term of leases in filling stations for periods covered by prolongation or termination options, the assumption was applied that the lease term will not exceed 20 years. Optional periods, which have not been taken into ac- count in the measurement of the leases, exist mainly for E&P equipment in Romania, office buildings, a plot of land in Belgium and gas storage caverns in Germany. The prolongation option for the office buildings and the gas storage caverns can only be exercised in the distant future. m) Non-derivative financial assets At initial recognition, OMV classifies its financial assets as subsequently measured at amortized cost, fair value through other comprehensive income (OCI) or fair value through profit or loss. The classification depends both on the Group’s business model for managing the financial assets and the contractual cash flow charac- teristics of the financial assets. All regular way trades are recognized and derecognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Debt instruments are measured at amortized cost if both of the following conditions are met: ▸ the asset is held within the business model whose objective is to hold assets in order to collect con- tractual cash flows; and ▸ the contractual terms of the financial asset give rise on specific dates to cash flows that are solely pay- ments of principal and interest on the principal amount outstanding. These assets are subsequently measured at amortized cost using the effective interest method less any impair- ment losses. Interest income, impairment losses and gains or losses on derecognition are recognized in profit or loss. 124 OMV recognizes allowances for expected credit losses (ECLs) for all financial assets measured at amortized costs. The ECL calculation is based on external or in- ternal credit ratings of the counterparty and associated probabilities of default. Available forward-looking infor- mation is taken into account, if it has a material impact on the amount of valuation allowance recognized. ECLs are recognized in two stages. Where there has not been a significant increase in the credit risk since initial recognition, credit losses are measured at 12 month ECLs. The 12 month ECL is the credit loss which results from default events that are possible within the next 12 months. The Group considers a fi- nancial asset to have low credit risk when its credit risk rating is equivalent to the definition of ‘investment grade’. Where there has been a significant increase in the credit risk since initial recognition, a loss allowance is required for the lifetime ECL, i.e. the expected credit losses resulting from possible default events over the expected life of a financial asset. For this assessment, OMV considers all reasonable and supportable infor- mation that is available without undue cost or effort. Furthermore, OMV assumes that the credit risk on a fi- nancial asset has significantly increased if it is more than 30 days past due. If the credit quality improves for a lifetime ECL asset, OMV reverts to recognizing allow- ances on a 12 month ECL basis. A financial asset is considered to be in default when the financial asset is 90 days past due unless there is reasonable and sup- portable information that demonstrates that a more lag- ging default criterion is appropriate. A financial asset is written off when there is no reasonable expectation that the contractual cash flows will be recovered. For trade receivables and contract assets from con- tracts with customers a simplified approach is adopted, where the impairment losses are recognized at an amount equal to lifetime expected credit losses. In case there are credit insurances or securities held against the balances outstanding, the ECL calculation is based on the probability of default of the insurer/securer for the insured/secured element of the outstanding balance and the remaining amount will take the probability of default of the counterparty. Non-derivative financial assets classified as at fair value through profit or loss (FVTPL) include trade re- ceivables from sales contracts with provisional pricing and investment funds because the contractual cash flows do not represent solely payments of principal and interest on the principal amount outstanding. Further- more, this measurement category includes portfolios of OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS trade receivables held with an intention to sell them. These assets are measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. Equity instruments are either measured at fair value through profit or loss (FVTPL) or at fair value through OCI (FVOCI). OMV elected irrevocably to classify as investments at FVOCI the majority of its non-listed equity investments which are held for strate- gic purposes and not trading. Gains and losses on eq- uity investments measured at FVOCI are never recy- cled to profit or loss and they are not subject to impair- ment assessment. Dividends are recognized in profit or loss unless they represent a recovery of part of the cost of an investment. OMV derecognizes a financial asset when the contrac- tual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to an- other party. Significant estimates and judgements: Fair value and recoverability of financial assets The management is periodically assessing the re- ceivable related to expenditure recoverable from the Romanian State related to obligations for decommis- sioning and restoration costs in OMV Petrom SA. The assessment process is considering inter alia the history of amounts claimed, documentation process related requirements, potential litigation or arbitration proceedings. As part of the acquisition of the interest in Yuzhno Russkoye gas field in 2017, OMV took over a con- tractual position towards Gazprom with regard to the reserves redetermination. The volume of gas re- serves in Yuzhno Russkoye field is contractually agreed and, in case the reserves are higher or lower than what was assumed in the agreement, either OMV could be obligated to compensate Gazprom (but would profit in the future from higher sales vol- umes) or Gazprom could be obligated to compen- sate OMV. The payment for the reserve redetermi- nation is linked to the actual amount of the gas re- serves. The actual volume of gas reserves in Yu- zhno Russkoye is expected to be agreed in 2023. The estimated volume of gas reserves is regularly reviewed by the Group’s petroleum engineers as part of the yearly review process and is assumed to be lower than the contractually agreed volume (see Note 18 – Financial Assets – for more details). n) Derivative financial instruments and hedge ac- counting Derivative instruments are used to hedge risks resulting from changes in currency exchange rates, commodity prices and interest rates. Derivative instruments are recognized at fair value. Unrealized gains and losses are recognized as income or expense, except where hedge accounting according to IFRS 9 is applied. Those derivatives qualifying and designated as hedges are either ▸ a fair value hedge when hedging exposure to changes in the fair value of a recognized asset or li- ability, ▸ a cash flow hedge when hedging exposure to varia- bility in cash flows that is attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction, or ▸ a net investment hedge when hedging the foreign exchange risk in a net investment in a foreign oper- ation. For cash flow hedges, the effective part of the changes in fair value is recognized in other comprehensive in- come, while the ineffective part is recognized immedi- ately in the income statement. Where the hedging of cash flows results in the recognition of a non-financial asset or liability, the carrying value of that item will be adjusted for the accumulated gains or losses recog- nized directly in OCI. Hedges of net investments in foreign operations are ac- counted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in OCI and accumu- lated in the reserve for currency translation differences. The gain or loss relating to the ineffective portion is rec- ognised immediately in profit or loss. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is disposed of or sold. The Group applies hedge accounting to hedges which are affected by the interest rate benchmark reform. For the purpose of evaluating whether there is an economic relationship between the hedged items and the hedging instruments, the Group assumes that the benchmark interest rate is not altered as a result of interest rate benchmark reform (see Note 2.1a). Contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument are accounted for as financial instruments and measured at fair value. Associated gains or losses are recognized in profit or loss. However, contracts that are entered into 125 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Group’s expected purchase, sale or usage require- ments are not accounted for as derivative financial in- struments, but as executory contracts. o) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualified assets are capi- talized until these assets are substantially ready for their intended use or sale. All other costs of borrowing are expensed in the period in which they are incurred. p) Government grants Government grants are recognized as income or de- ducted from the related asset where it is reasonable to expect that the granting conditions will be met and that the grants will be received. q) Inventories Inventories are recognized at the lower of cost and net realizable value. Costs incurred are generally deter- mined based on the individual costs for not inter- changeable goods, the average price method for oil and gas inventories or the FIFO method for petrochem- ical products. Costs of production comprise directly at- tributable costs as well as fixed and variable indirect material and production overhead costs. Production-re- lated administrative costs, the costs of company pen- sion schemes and voluntary employee benefits are also included. In refineries, a carrying capacity approach is applied according to which the production costs are al- located to product groups on the basis of their relative market values at the end of the period. r) Cash and cash equivalents Cash and cash equivalents include cash balances, bank accounts and highly liquid short-term investments with low realization risk, i.e. negligible short-term ex- change and interest risks. The maximum maturity at the time of acquisition for such investments is three months. s) Provisions A provision is recorded for present obligations against third parties when it is probable that an obligation will occur and the settlement amount can be estimated reli- ably. Provisions for individual obligations are based on the best estimate of the amount necessary to settle the obligation, discounted to the present value in the case of long-term obligations. Decommissioning and environmental obligations: The Group’s core activities regularly lead to obligations related to dismantling and removal, asset retirement 126 and soil remediation activities. These decommissioning and restoration obligations are principally of material importance in the E&P segment (oil and gas wells, sur- face facilities) and in connection with filling stations on third-party property. At the time the obligation arises, it is provided for in full by recognizing the present value of future decommissioning and restoration expenses as a liability. An equivalent amount is capitalized as part of the carrying amount of long-lived assets. Any such obli- gation is calculated on the basis of best estimates. The unwinding of discounting leads to interest expense or income (in case of a negative discount rate) and ac- cordingly to increased or decreased obligations at each statement of financial position date until decommission- ing or restoration. For other environmental risks and measures, provisions are recognized if such obligations are probable and the amount of the obligation can be estimated reliably. Significant estimates and judgements: Decom- missioning provisions The most significant decommissioning obligations of the Group are related to the plugging of wells, the abandonment of facilities and the removal and dis- posal of offshore installations. The majority of these activities are planned to occur many years into the future, while decommissioning technologies, costs, regulations and public expectations are constantly changing. Estimates of future restoration costs are based on reports prepared by Group engineers and on past experience. Any significant downward changes in the expected future costs or postpone- ment in the future affect both the provision and the related asset, to the extent that there is sufficient carrying amount, otherwise the provision is reversed to income. Significant upward revisions trigger the assessment of the recoverability of the underlying asset. Provisions for decommissioning and restoration costs require estimates of discount rates, which have material effects on the amounts of the provi- sion. The real discount rates applied for calculating the provision for decommissioning and restoration costs were between –1.97% and 5.22% (2020: –1.96% and 3.10%). Pensions and similar obligations: OMV has both de- fined contribution and defined benefit pension plans. In the case of defined contribution plans, OMV has no obligations beyond payment of the agreed premiums, and no provision is therefore recognized. The reported OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS expense corresponds to the contributions payable for the period. In contrast, participants in defined benefit plans are entitled to pensions at certain levels and are generally based on years of service and the employee’s average compensation. These defined benefit plans expose the Group to actuarial risks, such as longevity risk, interest rate risk, inflation risk (as a result of indexation of pen- sion) and market risk. Defined benefit pension obliga- tions are accounted for by recognizing provisions for pensions. Employees of Austrian Group companies whose ser- vice began before December 31, 2002 are entitled to receive severance payments upon termination of em- ployment or on reaching normal retirement age. The entitlements depend on years of service and final com- pensation levels. Entitlements to severance payments for employees whose service began after December 31, 2002 are covered by defined contribution plans. Similar obligations as entitlement to severance pay- ments also exist in other countries, where the Group provides employment. Employees in Austria and Germany are entitled to jubi- lee payments after completion of a given number of years of service. These plans are non-contributory and unfunded. Provisions for pensions, severance payments and jubi- lee payments are calculated using the projected unit credit method, which divides the costs of the estimated benefit entitlements over the whole period of employ- ment and thus takes future increases in remuneration into account. Actuarial gains and losses for defined benefit pension and severance payment obligations are recognized in full in the period in which they occur in other comprehensive income. Such actuarial gains and losses are not reclassified to profit or loss in subse- quent periods. Actuarial gains and losses on obliga- tions for jubilee payments are recognized in profit or loss. Net interest expense is calculated on the basis of the net defined benefit obligation and disclosed as part of the financial result. Differences between the return on plan assets and interest income on plan assets in- cluded in the net interest expense is recognized in other comprehensive income. Provisions for voluntary and mandatory separations un- der restructuring programs are recognized if a detailed plan has been approved by management and commu- nicated to those affected prior to the statement of finan- cial position date and an irrevocable commitment is thereby established. Voluntary modifications to employ- ees’ remuneration arrangements are recognized on the basis of the expected number of employees accepting the employing company’s offer. Provisions for obliga- tions related to individual separation agreements which lead to fixed payments over a defined period of time are recognized at the present value of the obligation. Significant estimates and judgements: Pensions and similar obligations The projected unit credit method calculation of provi- sions for pensions, severance and jubilee entitle- ments requires estimates for discount rates, future increases in salaries and future increases in pen- sions. For current actuarial assumptions for calculat- ing expected defined benefit entitlements and their sensitivity analysis see Note 23 – Provisions. The biometrical basis for the calculation of provi- sions for pensions, severance and jubilee entitle- ments of Austrian Group companies is provided by AVÖ 2018 P – Rechnungsgrundlagen für die Pen- sionsversicherung (Biometric Tables for Pension In- surance) – Pagler & Pagler, using the variant for sal- aried employees. In other countries, similar actuarial parameters are used. Employee turnover was com- puted based on age or years of service respectively. The expected retirement age used for calculations is based on the relevant country’s legislation. Provision for onerous contracts are recognized for contracts in which the unavoidable costs of meeting a contractual obligation exceed the economic benefits ex- pected to be received under the contract. These provi- sions are measured at the lower amount of the cost of fulfilling the contract and any potential penalties or compensation arising in the event of non-performance. Significant estimates and judgements: Provi- sions for onerous contracts OMV concluded in the past several long-term, non- cancellable contracts that became onerous due to negative development of market conditions. This led to the recognition of onerous contract provisions in the Group’s financial statements for the unavoidable costs of meeting the contract obligations. The estimates used for calculating the positive con- tributions that partly cover the fixed costs were based on external sources and management expec- tations. For more details see Note 23 – Provisions. 127 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Emission allowances received free of cost from gov- ernmental authorities (EU Emissions Trading Scheme for greenhouse gas emissions allowances) reduce fi- nancial obligations related to CO2 emissions; provisions are recognized only for shortfalls (see Note 23 – Provi- sions). t) Non-derivative financial liabilities Liabilities are carried at amortized cost, with the excep- tion of derivative financial instruments, which are recog- nized at fair value. Long-term liabilities are discounted using the effective interest rate method. u) Taxes on income and deferred taxes In addition to corporate income taxes and trade earn- ings taxes, typical E&P taxes from oil and gas produc- tion like the country’s/national oil company’s profit share for certain EPSAs (see 2.3f) are disclosed as in- come taxes. Deferred taxes are recognized for tempo- rary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the unused tax losses, unused tax credits and deductible temporary differences can be utilized. Significant estimates and judgements: Recover- ability of deferred tax assets The recognition of deferred tax assets requires an assessment of when those assets are likely to re- verse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets when they reverse. This assessment of re- coverability requires assumptions regarding future taxable profits and is therefore uncertain. In OMV, this assessment is based on detailed tax plannings which covers in E&P entities the whole life of field and a five year period in the other entities. Changes in the assumptions regarding future taxa- ble profits can lead to an increase or decrease of the amount of deferred tax assets recognized which has an impact on the net income in the period in which the change occurs. Deferred tax assets and liabilities at Group level are shown net where there is a right of set-off and the taxes relate to matters subject to the same tax jurisdiction. v) Long Term Incentive (LTI) Plans and Equity De- ferral The fair value of share-based compensation expense arising from the Long-term Incentive Plan (LTIP) – 128 OMV’s main equity settled plan – is estimated using a model which is based on the expected target achieve- ments and the expected share prices. For cash-settled awards, a provision based on the fair value of the amount payable is built up over the vesting period, so that by the end of the vesting period the fair value of the bonus shares to be granted is fully provided for. The provision is remeasured at the end of each report- ing period up to the date of settlement, with any changes in fair value recognized in profit or loss. For share settled awards, the grant date fair value is recog- nized as an expense (including income tax), with a cor- responding increase in equity, over the vesting period of the awards. The amount recognized as expense is adjusted to subsequent changes in parameters other than market parameters. In addition, the Equity Deferral part of the annual bonus is settled in shares. Accord- ingly, the related expense is recognized against equity. For share-based awards, the award is settled net of tax to the participants. w) Fair value measurement The fair value is the amount for which an asset or liabil- ity could be transferred at the measurement date, based on the assumption that such transfers take place between participants in principal markets and, where applicable, taking highest and best use into account. Fair values are determined according to the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities. For OMV Group this category will, in most cases, only be relevant for securities, bonds, investment funds and futures contracts. Level 2: Valuation technique using directly or indirectly observables inputs. In order to determine the fair value for financial instruments within Level 2, usually forward prices of crude oil or natural gas, interest rates and foreign exchange rates are used as inputs to the valuation model. In addition counterparty credit risk as well as volatility indicators, if applicable, are taken into account. Level 3: Valuation techniques such as discounted cash flow models using significant unobservable inputs (e.g. long-term price assumptions and reserves estimates). OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 4) Foreign currency translation Monetary foreign currency balances are measured at closing rates, and exchange gains and losses accrued at statement of financial position date are recognized in the income statement. The financial statements of Group companies with functional currencies different from the Group’s presen- tation currency are translated using the closing rate method. Differences arising from statement of financial position items translated at closing rates are disclosed in other comprehensive income. Income statement items are translated at average rates for the period. The use of average rates for the income statement cre- ates additional differences compared to the application of the closing rates in the statement of financial position which are directly adjusted in other comprehensive in- come. The main rates applied in translating currencies to EUR were as follows: Foreign currency translation Bulgarian lev (BGN) Czech crown (CZK) Hungarian forint (HUF) New Zealand dollar (NZD) Norwegian krone (NOK) Romanian leu (RON) Russian ruble (RUB) Swedish krona (SEK)1 US dollar (USD) 1 Only applicable for Borealis Group (see below) 2021 2020 Statement of financial position date 1.956 24.858 369.190 1.658 9.989 4.949 85.300 10.250 1.133 Statement of financial position date 1.956 26.242 363.890 1.698 10.470 4.868 91.467 10.034 1.227 Average 1.956 25.641 358.520 1.672 10.163 4.922 87.153 10.147 1.183 Average 1.956 26.455 351.250 1.756 10.723 4.838 82.725 n.a. 1.142 In 2020, the items in the income statement related to Borealis Group were converted by using the monthly average rates instead of the annual average rate for the period after the acquisition on October 29, 2020. 129 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 3 Changes in group structure A full list of OMV investments as well as changes in consolidated group can be found in Note 38 – Direct and indirect investments of OMV Aktiengesellschaft. Major changes in consolidated Group are described be- low. The above listed sales transactions did not have a sig- nificant impact on the income statement. Chemicals & Materials There were no significant changes in group structure in 2021. Exploration & Production As per May 14, 2021, OMV Petrom finalized the sale of its 100% share in Kom-Munai LLP and Tasbulat Oil Corporation LLP (both based in Aktau, Kazakhstan) to Magnetic Oil Limited. On October 29, 2020 OMV increased its stake in Bore- alis Group from 36% to 75% which led to obtaining con- trol and consequently full consolidation of Borealis Group and discontinuation of the equity method. Refining & Marketing On May 31, 2021, OMV closed the transaction to sell its 51% interest in Gas Connect Austria GmbH (based in Vienna) to VERBUND. The purchase price agreed for the 51% OMV stake in Gas Connect Austria GmbH amounted to EUR 271 mn, less dividend payouts for the 2020 business year totaling around EUR 33 mn (for the 51% OMV interest). In addition, VERBUND as- sumed the outstanding liabilities of Gas Connect Aus- tria GmbH to OMV of around EUR 212 mn. Under the conditions of the purchase agreement, VERBUND has paid approximately EUR 451 mn to OMV. OMV has settled a cash pool liability to a subsidiary of Gas Con- nect Austria GmbH of around EUR 7 mn. Cash flow impact of divestments In cash flow from investing activities, the line “Proceeds from the sale of subsidiaries and businesses, net of cash disposed” was mainly attributable to a cash inflow of EUR 443 mn related to the divestment of Gas Con- nect Group and EUR 94 mn related to the divestment of Kom-Munai LLP and Tasbulat Oil Corporation LLP, as well as to prepayments received for the planned di- vestments of the retail business in Germany (EUR 75 mn) and of OMV’s business in Slovenia (EUR 35 mn). More details are shown in the following tables: Net cash inflows from disposal of subsidiaries and businesses In EUR mn Consideration received Less cash disposed of Net cash inflows from disposal of subsidiaries and businesses Net assets of disposed subsidiaries and businesses In EUR mn Non-current assets Current assets Non-current liabilities Current liabilities Net assets of disposed subsidiaries and businesses 2021 700 (39) 661 2021 965 117 312 81 689 130 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Segment Reporting 4 Segment Reporting Changes in segment reporting Starting with Q1/21 the OMV Group structure was reor- ganized, which involved splitting and expanding former operating Business Segment Downstream into two ar- eas: Refining & Marketing and Chemicals & Materials. Internal reporting and the relevant information provided to the chief operating decision-maker in order to assess performance and allocate resources has been updated to reflect the current organization structure. Business operations and key markets For business management purposes, OMV is divided into three operating Business Segments: Exploration & Production, Refining & Marketing, and Chemicals & Materials, as well as the segment Corporate and Other (Co&O). Each segment represents a strategic unit with different products and markets. Each Business Seg- ment is managed independently. Strategic business de- cisions are made by the Executive Board of OMV. With the exception of Co&O, the reportable segments of OMV are the same as the operating segments. Exploration & Production (E&P) engages in the busi- ness of oil and gas exploration, development and pro- duction and focuses on the regions Central and East- ern Europe, North Sea, Middle East and Africa and Asia-Pacific. The Refining & Marketing (R&M) Business Segment refines and markets crude and other feedstock. It oper- ates the refineries Schwechat (Austria), Burghausen (Germany) and Petrobrazi (Romania) with an annual capacity of 17.8 mn t. In these refineries, crude oil is processed into petroleum products, which are sold to commercial and private customers. Furthermore, it op- erates across the gas value chain with a successful gas sales and logistics business in Europe. OMV markets storage capacities in Austria and Germany. The busi- ness segments’ activities also cover supply, marketing, and trading of gas in Europe and Turkey and the Group’s power business activities, with one gas-fired power plant in Romania. OMV has a strong position in the markets located within the areas of its supply, serving commercial cus- tomers, and operating a retail business of approxi- mately 2,100 filling stations. OMV holds minority stakes in various equity-accounted investments, the most significant one is the 15% partici- pation in ADNOC Refining (United Arab Emirates) with annual capacity of 7.1 mn t OMV share. The Chemicals & Materials (C&M) Business Segment is one of the world’s leading providers of advanced and circular polyolefin solutions and a European market leader in base chemicals, fertilizers, and plastics recy- cling. Since the full consolidation of Borealis in 2020, OMV has a production capacity, including joint ventures, of 7.0 mn t base chemicals, 5.8 mn t polyolefins, 0.4 mn t compounding and 4.3 mn t fertilizers. The majority of production is located in Europe, with two overseas manufacturing facilities in the United States, one in Bra- zil and one in South Korea. In addition, OMV holds mi- nority stakes in various equity-accounted investments, the most significant ones being Borouge (United Arab Emirates) a Borealis’ joint venture with ADNOC that op- erates the largest petrochemical complex in the world and the Baystar joint venture (United States) which serves the customer base in the North American mar- kets. A new plant based on Borstar technology on the site in Pasadena is currently under construction. OMV group is pursuing various initiatives in mechanical and chemical recycling and renewable polyolefins. Group management, financing and insurance activities and certain service functions are concentrated in the Corporate & Other (Co&O) segment. One of the key measures of operating performance for the Group is Clean CCS Operating Result. Total assets include intangible assets as well as property, plant and equipment. Sales to external customers are split up by geographical areas on the basis of where the risk is transferred to the customers. The net revenues of com- modity trading activities within the scope of IFRS 9 and hedging results are reported in the country in which the reporting subsidiary is located. Accounting policies of the operating segments are the same as those de- scribed in the summary of significant accounting poli- cies, with certain exceptions for intra-group sales and cost allocations by the parent company, which are de- termined in accordance with internal OMV policies. Management is of the opinion that the transfer prices of goods and services exchanged between segments cor- respond to market prices. Business transactions not at- tributable to operating segments are included in the re- sults of the Co&O segment. The disclosure of special items is considered appropri- ate in order to facilitate analysis of ordinary business performance. To reflect comparable figures, certain items affecting the result are added back or deducted. 131 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS These items can be divided into four subcategories: personnel restructuring, unscheduled depreciation and write-ups, asset disposals and other. Furthermore, to enable effective performance management in an envi- ronment of volatile prices and comparability with peers, the Current Cost of Supply (CCS) effect is eliminated from the result. The CCS effect, also called inventory holding gains and losses, is the difference between the cost of sales calculated using the current cost of supply based on purchases from the most recent month and the cost of sales calculated using the weighted average method, after adjusting for any changes in valuation al- lowances. In volatile energy markets, measurement of the costs of petroleum products sold based on histori- cal values (e.g. weighted average cost) can have dis- torting effects on reported results. This performance measurement indicator enhances the transparency of results and is commonly used in the oil industry. OMV, therefore, publishes this measure in addition to the Op- erating Result determined according to IFRS. Segment reporting In EUR mn Sales revenues1 Intersegmental sales Sales to third parties 2021 E&P R&M C&M Co&O Total 6,712 25,928 (4,828) 1,884 23,148 (2,780) 11,618 (1,109) 10,509 Consoli- dation OMV Group (9,079) 35,555 — 9,079 35,555 — — — — — — (51) — — — — — 12 (39) 933 600 2,401 1,538 4 5,065 30 1,297 (223) 210 1,315 (418) 5,961 376 (361) 14 44,634 (9,079) 35,555 63 — 41 0 — (74) 9 — (6) 9 12 — (62) 933 600 2,401 1,538 4 5,115 30 1,297 (223) 210 1,315 (430) 5,999 241 28 — 21,730 2,624 6,887 — — — 21,730 2,624 6,887 Other operating income Net income from equity-accounted invest- ments Depreciation and amortization Impairment losses (incl. exploration & ap- praisal) Write-ups Operating Result Special items for personnel restructuring Special items for unscheduled depreciation and write-ups Special items for asset disposal Other special items Special items CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 347 274 55 1,396 325 0 2,439 14 100 (209) 492 398 12 429 718 3 922 7 713 (7) (204) 509 — 2,837 (430) 1,001 12,217 1,251 429 3,989 621 1,325 249 534 535 495 — 1,828 — 483 — (87) 396 — 2,224 5,283 724 5,133 1 Including intra-group sales 2 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale 3 Excluding additions in assets reclassified to held for sale and additions to decommissioning assets 4 Excluding assets held for sale 132 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Segment reporting information of earlier periods has been adjusted consequently to comply with IFRS 8.29. The tables below depict the segment reporting information as restated after the reorganization and re- ported in 2020: Segment reporting In EUR mn Sales revenues1 Intersegmental sales Sales to third parties Other operating income Net income from equity-accounted invest- ments Depreciation and amortization Impairment losses (incl. exploration & ap- praisal) Write-ups Operating Result Special items for personnel restructuring Special items for unscheduled depreciation and write-ups Special items for asset disposal Other special items Special items CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 2020 restated E&P R&M C&M Co&O Total 3,705 (2,178) 1,527 180 13,996 (1,345) 12,651 265 2,884 (515) 2,368 1,391 352 (348) 4 56 20,937 (4,387) 16,550 1,892 Consoli- dation OMV Group (4,387) 16,550 — 4,387 16,550 — 1,877 (15) 31 1,335 (202) 444 210 147 1,452 120 (1,137) 31 1,185 (9) 75 1,282 — 145 12,662 1,150 389 9 111 592 4 0 — 1,568 — (101) (9) 84 (22) — — (1,049) (1,049) 425 996 3,955 509 1,912 — 519 5,767 251 6,020 — 39 0 — (56) 5 — (1) 5 9 38 1,965 1,462 230 967 39 1,084 (19) (885) 220 — — — — 83 — — — — — 38 1,965 1,462 230 1,050 39 1,084 (19) (885) 220 — (47) 262 28 — 425 1,612 22,646 1,938 8,321 (10) 74 — — — 416 1,686 22,646 1,938 8,321 1 Including intra-group sales 2 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale 3 Excluding additions in assets reclassified to held for sale and additions to decommissioning assets 4 Not including assets held for sale 133 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Segment reporting In EUR mn Sales revenues1 Intrasegmental sales Sales to third parties Other operating income Net income from equity-accounted investments Depreciation and amortization Impairment losses (incl. exploration & appraisal) Write-ups Operating Result Special items for personnel restructuring Special items for unscheduled depreciation and write-ups Special items for asset disposal Other special items Special items CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 2020 reported U/S D/S Co&O Total 3,705 (2,178) 1,527 180 31 1,335 1,452 120 (1,137) 31 1,185 (9) 75 1,282 — 145 12,662 1,150 389 15,082 (63) 15,019 352 (348) 4 19,139 (2,589) 16,550 1,656 7 591 10 111 2,160 4 (101) (9) (965) (1,071) 425 1,514 9,721 760 7,932 56 — 39 0 — (56) 5 — (1) 5 9 1,892 38 1,965 1,462 230 967 39 1,084 (19) (885) 220 — (47) 425 1,612 262 28 — 22,646 1,938 8,321 Consoli- dation OMV Group (2,589) 16,550 — 2,589 16,550 — (15) — — — — 83 — — — — — (10) 74 1,877 38 1,965 1,462 230 1,050 39 1,084 (19) (885) 220 416 1,686 — — — 22,646 1,938 8,321 1 Including intra-group sales 2 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale 3 Excluding additions in assets reclassified to held for sale and additions to decommissioning assets 4 Not including assets held for sale 134 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS In 2021 special items for unscheduled depreciation and write-ups were mainly driven by non-cash impair- ment charges related to ADNOC Refining, E&P assets and the nitrogen business of Borealis. For further de- tails on impairments see Note 7 – Depreciation, amorti- zation, impairments and write-ups. Special items for asset disposals were mainly stem- ming from a gain from the sale of the stake in the Nor- wegian oil field Wisting. Other special items mainly consisted of non-cash val- uation effects of financial assets, especially related to the reassessment of reserves redetermination rights of the Yuzhno Russkoye field in Russia, and temporary hedging effects in Exploration & Production. In Refining & Marketing and Chemicals & Materials other special items were mainly related to temporary hedging effects. In 2020 other special items in Exploration & Produc- tion mainly consisted of the reassessment of reserves redetermination rights related to the field Yuzhno Russ- koye and temporary hedging effects. Refining & Mar- keting mainly included temporary hedging effects. Chemicals & Materials other special items were mainly related to revaluation effects for previously held 36% shares in Borealis AG triggered by the acquisition of 39% additional shares. Information on geographical areas In EUR mn Sales to third parties 5,326 8,499 4,433 1,003 642 443 784 5,246 6,823 2,356 35,555 — 35,555 2021 Allocated assets1 4,207 1,061 5,628 1,508 592 550 1,671 556 3,140 2,289 21,201 529 21,730 Equity-accoun- ted invest- ments2 External sales 14 31 — — 117 — 5,352 — 45 1,328 6,887 — 6,887 3,466 3,268 3,456 584 448 402 325 2,878 1,126 598 16,550 — 16,550 2020 Allocated assets1 4,388 1,105 6,106 1,675 619 607 1,479 639 3,187 2,343 22,148 498 22,646 Equity-accoun- ted invest- ments2 78 33 — — 102 — 6,874 6 21 1,207 8,321 — 8,321 Austria Germany Romania Norway Russia New Zealand United Arab Emirates Rest of CEE3 Rest of Europe Rest of the world4 Subtotal Not allocated assets Total 1 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale 2 Equity-accounted investments are allocated based on the seat of the registered office of the parent company, not including assets held for sale 3 Including Turkey 4 Rest of world: Principally Algeria, Argentinia, Brazil, Chile, China, Colombia, Egypt, India, Libya, Malaysia, Marocco, Mexico, Nigeria, Peru, South Africa, South Korea, Singapore, Tunisia, United States of America and Yemen Not allocated assets contained goodwill in amount of EUR 322 mn (2020: EUR 297 mn) related to the cash- generating unit ‘Middle East and Africa’, EUR 198 mn (2020: EUR 183 mn) related to the cash generating unit ‘SapuraOMV’ and EUR 9 mn (2020: EUR 18 mn) re- lated to the cash-generating unit ‘Refining West’ as these CGUs are operating in more than one geograph- ical area. 135 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Notes to the Income Statement 5 Sales revenues Sales revenues in EUR mn Revenues from contracts with customers Revenues from fixed lease payments Revenues from variable lease payments Revenues from other sources Sales revenues 2021 2020 34,792 15 65 683 35,555 16,076 11 58 406 16,550 Revenues from contracts with customers In EUR mn Crude Oil, NGL, condensates Natural gas and LNG Fuel, heating oil and other refining products Chemical products Gas storage, transmission, distribution and transportation Other goods and services1 Revenues from contracts with customers Crude Oil, NGL, condensates Natural gas and LNG Fuel, heating oil and other refining products Chemical products Gas storage, transmission, distribution and transportation Other goods and services1 Revenues from contracts with customers Exploration & Production Refining & Marketing Chemicals & Materials Corporate & Other OMV Group 1,057 1,043 — — 11 32 2,143 769 715 — — 11 27 1,521 1,071 9,107 10,460 56 140 1,294 22,129 615 3,280 6,932 15 231 1,115 12,188 2021 — — — 10,347 — 160 10,507 2020 — — — 2,314 — 50 2,363 — — — — — 13 13 — — — — — 3 3 2,128 10,150 10,460 10,403 151 1,500 34,792 1,384 3,995 6,932 2,329 242 1,194 16,076 1 Mainly retail non-oil business and power sales in Refining & Marketing 136 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 6 Other operating income and net income from equity-accounted investments Other operating income and net income from equity-accounted investments In EUR mn Foreign exchange gains from operating activities Gains from fair value changes of financial assets Gains from fair value changes of trading inventories Gains from fair value changes of other derivatives Gains on the disposal of businesses, subsidiaries, tangible and intangible assets Residual other operating income Other operating income Income from equity-accounted investments Expenses from equity-accounted investments Net income from equity-accounted investments 2021 127 — 126 191 282 207 933 2020 159 28 90 68 22 1,510 1,877 638 (38) 600 250 (212) 38 Foreign exchange gains from operating activities were mainly impacted in 2021 and 2020 by USD for- eign exchange rate development. Gains from fair value changes of financial assets in 2020 included mainly positive discounting effects of the asset from reserves redetermination rights related to the acquisition of interests in the Yuzhno Russkoye field. For further details see Note 18 – Financial assets. Gains from fair value changes of trading invento- ries refer to emissions certificates held for trading in Refining & Marketing and Chemicals & Materials (Aus- tria and Germany). For further details on Emissions cer- tificates see Note 23 – Provisions. Gains from fair value changes of other derivatives were related to forward contracts of emissions certifi- cates in Refining & Marketing and Chemicals & Materi- als (Austria and Germany). Gains on the disposal of businesses, subsidiaries, tangible and intangible assets relate mostly to gains on the sale of Wisting oil field. On December 17, 2021, OMV (NORGE) AS, closed the divestment of its entire 25% stake in the Wisting licenses to Lundin Energy AB. The purchase price before customary closing adjust- ments was USD 320 mn, with a contingent payment of up to USD 20 mn depending on final project CAPEX. The economic effective date of the transaction was January 1, 2021. The transaction led to a gain of EUR 261 mn. Residual other operating income contained mostly storage income related to Erdöl-Lagergesellschaft m.b.H. (EUR 43 mn) and insurance compensation re- lated to 2020 process safety incident in Borealis cracker in Sweden (EUR 34 mn). 2020 contained gains from revaluation and recycling ef- fects related to the previously held 36% interest in Bo- realis AG (EUR 1,284 mn), storage income related to Erdöl-Lagergesellschaft m.b.H. (EUR 50 mn) as well as insurance compensation related to a process safety in- cident in Borealis cracker in Sweden (EUR 41 mn). Income from equity-accounted investments was mainly impacted by Abu Dhabi Polymers Company Limited (Borouge). 2020 primarily contained income from the previously held 36% interest in Borealis AG amounting to EUR 172 mn. Expenses from equity-accounted investments were mainly impacted by Abu Dhabi Oil Refining Company. For further details see Note 16 – Equity-accounted in- vestments. 137 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 7 Depreciation, amortization, impairments and write-ups Impairment losses are part of the income statement line “Depreciation, amortization, impairments and write-ups”, except for impairment losses related to ex- ploration and appraisal assets which are shown in “Exploration expenses”. The following tables provide a reconciliation to the amounts reported in the income statement. Depreciation, amortization, impairments (excluding exploration & appraisal) and write-ups In EUR mn Depreciation and amortization Write-ups Impairment losses (excl. exploration & appraisal) Depreciation, amortization, impairment losses (excluding exploration & appraisal) and write-ups Impairment losses (including exploration & appraisal) In EUR mn Impairment losses (excl. exploration & appraisal) Impairment losses (exploration & appraisal) Impairment losses (including exploration & appraisal) Depreciation, amortization, impairments and write-ups – split per function In EUR mn Depreciation and amortization attributable to exploration expenses attributable to production and operating expenses attributable to selling, distribution and administrative expenses Write-ups attributable to exploration expenses attributable to production and operating expenses attributable to selling, distribution and administrative expenses Impairment losses (incl. exploration & appraisal) attributable to exploration expenses attributable to production and operating expenses attributable to selling, distribution and administrative expenses 2021 2,401 (4) 1,353 3,750 2020 1,965 (230) 683 2,418 2021 1,353 185 1,538 2020 683 779 1,462 2021 2,401 — 2,144 257 (4) — (0) (3) 1,538 185 1,303 49 2020 1,965 — 1,717 248 (230) — (227) (3) 1,462 779 673 10 Impairments and write-ups in Exploration & Pro- duction Based on impairment testing EUR 111 mn of explora- tion and appraisal assets were impaired in 2021, mainly related to assets in Norway, New Zealand, Mexico and Tunisia. Furthermore, in 2021 reported impairment losses attributable to exploration and appraisal (EUR 74 mn) were mainly related to unsuccessful ex- ploration wells and exploration licenses in Australia, Norway, Romania and New Zealand. Moreover, impairments in 2021 included mainly unsuc- cessful workovers and obsolete or replaced assets in Romania (EUR 87 mn). In 2020 the significant drop in the oil and gas prices led to the change in OMV’s price assumptions and have triggered impairment testing throughout the Exploration & Production portfolio. This led to pre-tax impairments of EUR 1,222 mn (intangible assets EUR 614 mn and tangible assets EUR 608 mn) and pre-tax write-ups of EUR 91 mn in 2020 for exploration and appraisal, de- 138 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS velopment and production oil and gas assets. The im- pairments have been recorded in different countries across the portfolio, mainly related to assets in New Zealand, Romania, Austria and United Arab Emirates. Moreover, the planned sale of assets in Kazakhstan by OMV Petrom (51% subsidiary of OMV) in 2020 led to the reclassification to “held for sale”, which triggered a pre-tax write-up of EUR 28 mn. Other impairments in 2020 were mainly related to unsuccessful workovers and obsolete or replaced assets in Romania (EUR 58 mn). Furthermore, impairment losses in 2020 included impairments of EUR 149 mn related to un- sucessfull exploration wells and exploration licenses in Malaysia, Austria, Norway and New Zealand. Impairments and write-ups in Refining & Marketing The deterioration in the margin outlook led to a change in price assumptions and triggered impairment testing in the ADNOC Refining and Trading CGU which is ac- counted for at-equity. This led to an impairment of EUR 669 mn due to lower refining margins and produc- tion volumes in ADNOC Refining using an after-tax dis- count rate of 6.61%. A decrease in the margin of USD 1/bbl for all years would lead to an additional impair- ment of approximately EUR 600 mn. In 2020 there were no significant impairments in the segment Refining & Marketing. The long-term power and CO2 price assumptions were revised in 2020, tak- ing into account the improved power generation market in Romania. This led to the full reversal of impairments for the Brazi gas-fired power plant in Romania amount- ing to EUR 107 mn pre-tax based on an after-tax dis- count rate of 4.26%. Impairments in Chemicals & Materials Impairment losses of EUR 444 mn were recognized for the nitrogen business unit of Borealis Group to reflect the fair value less cost of disposal as of December 31, 2021. The valuation was based on the binding offer from EuroChem for the acquisition of the diposal group received on February 2, 2022. The lack of profitability in recent years and the signifi- cant deviation in 2021 of the financial performance of the Rosier Group from the budget qualified as a trigger- ing event for an impairment test. The main reasons were the market conditions being increasingly competi- tive with the pressure of the vertically integrated com- petitors and disruption in the raw material supply during the year. As a result, property, plant and equipment was impaired by EUR 39 mn in 2021. 8 Exploration expenses The following financial information represents the amounts included within the Group totals relating to ex- ploration for and appraisal of oil and natural gas resources. All such activities are recorded within the Exploration & Production segment. Exploration for and appraisal of mineral resources In EUR mn Impairment losses (exploration & appraisal) Other exploration expenses Exploration expenses Total intangible assets – exploration and appraisal expenditure incl. acquisition of unproved reserves Net cash used in operating activities Net cash used in investing activities1 2021 2020 185 95 280 779 117 896 967 85 (169) 1,260 106 122 1 Overall amount reported in 2021 represents a net cash inflow due to the sale of OMVs 25% stake in the Wisting oil field in Norway leading to a cash inflow of EUR 290 mn. 139 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 9 Other operating expenses Other operating expenses In EUR mn Foreign exchange losses from operating activities Losses on disposals of businesses, subsidiaries, tangible and intangible assets Losses from fair value changes of financial assets Net impairment losses on financial assets measured at amortized cost Personnel reduction schemes Research and development expenses Residual other operating expenses Other operating expenses 2021 2020 121 48 317 9 22 58 113 688 135 8 (0) 12 39 61 134 389 Foreign exchange losses from operating activities in 2021 and 2020 were mainly impacted by USD for- eign exchange rate development. Losses on disposals of businesses, subsidiaries, tangible and intangible assets included a loss from the sale of Haramidere Depoculuk Anonim Şirketi of EUR 26 mn stemming from the reclassification of FX losses from other comprehensive income to the income statement. Losses from fair value changes of financial assets included EUR 256 mn losses related to the asset from reserves redetermination rights with respect to the ac- quisition of interests in the Yuzhno Russkoye field, which were triggered by reserves reassessment and partly offset by positive discounting effects. In addition, losses from the fair value changes of financial assets included EUR 61 mn losses from the reassessment of contingent consideration from the divestment of the 30% stake in Rosebank and from the divestment of OMV (U.K.) Limited resulting from a delay of expected date of final investment decision. In 2020, the Group recognized a gain from the fair value changes of finan- cial assets of EUR 28 mn (Note 6 – Other operating in- come and net income from equity-accounted invest- ments). For further details please refer to Note 18 – Fi- nancial assets. Net impairment losses on financial assets meas- ured at amortized cost were mainly related to impair- ments of receivables in Tunisia amounting to EUR 9 mn (2020: EUR 9 mn). Residual other operating expenses contained ex- penses relating to various digitalization initiatives amounting to EUR 45 mn (2020: EUR 36 mn) as well as storage expenses related to Erdöl-Lagergesellschaft m.b.H. in amount of EUR 51 mn (2020: EUR 56 mn). 10 Personnel expenses Personnel expenses In EUR mn Wages and salaries Costs of defined benefit plans Costs of defined contribution plans Net expenses for personnel reduction schemes Other employee benefits Taxes and social contribution Personnel expenses 2021 1,273 28 62 22 267 302 1,953 2020 944 9 33 39 128 155 1,308 Higher net expenses for personnel reduction schemes in 2020 were mainly related to restructuring expenses from outsourcing activities in Romania. Additional details on defined benefit plans are included in Note 23 – Provisions. 140 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 11 Net financial result Interest income In EUR mn Cash & cash equivalents Discounted receivables Other financial and non-financial assets Loans Other Interest income 2021 2020 27 5 9 120 (0) 161 38 17 30 88 3 177 Interest income from other financial and non-finan- cial assets in 2020 primarily contained late payment interest income in relation to successful arbitration in Romania and positive effects of discounting of receiva- bles from the Romanian State. Interest income from loans included EUR 92 mn (2020: EUR 84 mn) related to the Nord Stream 2 fi- nancing agreement and EUR 27 mn (2020: EUR 4 mn) related to loan agreement towards Bayport Polymers LLC. For further details see Note 18 – Financial assets. Interest expenses In EUR mn Bonds Lease liabilities Other financial and non-financial liabilities Provisions for decommissioning and restoration obligations Provisions for jubilee payments, personnel reduction plans and other employee benefits Provisions for pensions and severance payments Provisions for onerous contracts Other Interest expenses, gross Capitalized borrowing costs Interest expenses 2021 142 26 26 114 2 12 17 8 348 2020 136 24 20 74 2 11 15 5 287 (14) 334 (7) 280 For further details on bonds see Note 24 – Liabilities. For OMV Petrom SA the unwinding expenses for de- commissioning provision are included net of the un- winding income for related Romanian State receiva- bles. For further details see Note 18 – Financial assets. Interest expenses on provisions for decommission- ing and restoration obligations in 2021 were im- pacted by the negative reassessment effects of receiv- ables from the Romanian State amounting to EUR 41 mn (2020: nil). The interest expenses on pension provisions were netted against interest income on pension plan assets which amounted to EUR 5 mn (2020: EUR 5 mn). Provisions for onerous contracts included the un- winding expenses for the Gate LNG obligation and as- sociated transportation commitments of OMV Gas Mar- keting & Trading GmbH. For further details see Note 23 – Provisions. Capitalized borrowings costs applied to the carrying value of qualifying assets were mainly related to pro- pane dehydrogenation plant under construction at the Borealis production site in Kallo, Belgium and oil and gas development assets in Norway. 141 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Other financial income and expense In EUR mn Carrying amount of sold trade receivables Proceeds on sold trade receivables Financing charges for factoring and securitization Net foreign exchange gains/(losses) Other Other financial income and expense 2021 (9,348) 9,315 (33) 9 (17) (40) 2020 (5,212) 5,189 (24) (53) (14) (91) In 2020 net foreign exchange losses were predomi- nantly impacted by RUB. The position Other was mainly related to bank charges. 12 Taxes on income and profit Taxes on income and profit In EUR mn Profit before tax Current taxes thereof related to previous years Deferred taxes Taxes on income and profit Changes in deferred taxes1 In EUR mn Deferred taxes January 1 Deferred taxes December 31 Changes in deferred taxes Deferred taxes accounted for in equity Changes in consolidated Group, exchange differences and other changes2 Deferred taxes per income statement The deferred taxes per income statement comprise the following elements: Change in tax rate Release of and allocation to valuation allowance for deferred taxes Adjustments within loss carryforwards (not recognized in prior years, expired loss carryforwards and other adjustments) Reversal of temporary differences, including additions to and use of loss carryforwards 1 Deferred tax balances also include deferred taxes balances reclassified to held for sale. 2 2020 included the effect related to acquisition of additional shares in Borealis AG which amounted to EUR 510 mn. Taxes on income and profit accounted for in other comprehensive income In EUR mn Deferred taxes Current taxes Taxes on income and profit accounted for in other comprehensive income 142 2021 4,870 2,056 6 10 2,066 2021 (57) (87) (30) 42 (22) (10) 3 88 (40) (61) 2020 875 244 2 (846) (603) 2020 (445) (57) 388 17 441 846 12 320 59 456 2021 2020 42 (8) 33 (8) (0) (8) OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS OMV Aktiengesellschaft forms a tax group in accord- ance with section 9 of the Austrian Corporate Income Tax Act 1988 (KStG), which aggregates the taxable profits and losses of all the Group’s main subsidiaries in Austria and possibly arising losses of one foreign subsidiary (OMV AUSTRALIA PTY LTD). Dividend income from domestic subsidiaries is in gen- eral exempt from taxation in Austria. Dividends from EU- and EEA-participations as well as from subsidiar- ies whose residence state has a comprehensive mutual administrative assistance agreement with Austria are exempt from taxation in Austria if certain conditions are fulfilled. Dividends from other foreign investments that are comparable to Austrian corporations, for which the Group holds a 10% investment share or more for a minimum period of one year, are also excluded from taxation at the level of the Austrian parent company. Change in valuation allowance of deferred taxes for the Austrian tax group was reported in the income state- ment, except to the extent that the deferred tax assets arose from transactions or events which were recog- nized outside profit or loss, i.e. in other comprehensive income or directly in equity. The effective tax rate is the ratio of income tax to profit before tax. The tables hereafter reconcile the effective tax rate and the standard Austrian corporate income tax rate of 25% showing the major influencing factors. Tax rate reconciliation In % Austrian corporate income tax rate Tax effect of: Differing foreign tax rates Non-deductible expenses Non-taxable income Change in tax rate Permanent effects within tax loss carryforwards Tax impairments and write-ups on investments at parent company level Change in valuation allowance for deferred taxes Taxes related to previous years Other Effective Group income tax rate Tax rate reconciliation In EUR mn Theoretical taxes on income based on Austrian income tax rate Tax effect of: Differing foreign tax rates Non-deductible expenses Non-taxable income Change in tax rate Permanent effects within tax loss carryforwards Tax impairments and write-ups on investments at parent company level Change in valuation allowance for deferred taxes Taxes related to previous years Other Total taxes on income and profit 2021 25.0 26.1 3.7 (10.4) (0.1) 0.1 0.7 (1.8) 0.7 (1.4) 42.4 2020 25.0 (8.3) 22.6 (55.7) (1.3) 0.1 (14.1) (36.5) (6.2) 5.5 (68.8) 2021 1,218 2020 219 1,270 178 (508) (3) 5 32 (88) 32 (71) 2,066 (73) 198 (487) (12) 1 (123) (320) (55) 49 (603) Differing foreign tax rates effects in 2021 mostly re- lated to subsidiaries operating in tax jurisdictions with high corporate income tax rates (Norway, Libya and United Arab Emirates). Increase in the effects related to differing foreign tax rates as compared to 2020 was mostly due to significant increase in profit before tax of those subsidiaries. 143 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Non-deductible expenses contained mainly losses from fair value changes of financial assets and perma- nent effects from depreciation, depletion and amortiza- tion. the previously held 36% interest in Borealis AG, posi- tive result contribution from equity-accounted invest- ments as well as tax incentives in Norway. Non-taxable income in 2021 mainly related to non-tax- ble gains on the sale of Wisting field, positive result contribution from equity-accounted investments and tax incentives in Norway. 2020 was predominantly im- pacted by revaluation and recycling effects related to Change in valuation allowance for deferred taxes was predominately impacted by release of valuation al- lowances on deferred tax assets in Austria and Ger- many. For further details see Note 25 – Deferred Taxes. 13 Earnings Per Share Earnings Per Share (EPS) In EUR mn Earnings attributable to stockholders of the parent in EUR mn 2021 Weighted average number of shares out- standing Basic Diluted 2,093 2,093 326,854,031 327,272,727 Earnings attributable to stockholders of the parent in EUR mn 2020 Weighted average number of shares out- standing 1,258 1,258 326,830,270 326,989,851 EPS in EUR 6.40 6.40 EPS in EUR 3.85 3.85 The calculation of diluted Earnings per Share took into account the weighted average number of ordinary shares in issue following the conversion of all poten- tially diluting ordinary shares. This included 421,342 (2020: 159,581) contingently issuable bonus shares related to Long Term Incentive Plans and the Equity Deferral. 144 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Notes to the Statement of Financial Position 14 Intangible assets Intangible assets In EUR mn Development of costs January 1 Currency translation differences Additions Transfers Assets held for sale Disposals December 31 Development of amortization January 1 Currency translation differences Amortization Impairments Transfers Assets held for sale Disposals December 31 Carrying amount January 1 Carrying amount December 31 Development of costs January 1 Currency translation differences Changes in consolidated Group Additions Transfers Assets held for sale Disposals December 31 Development of amortization January 1 Currency translation differences Amortization Impairments Transfers Assets held for sale Disposals Write-ups December 31 Carrying amount January 1 Carrying amount December 31 Concessions, software, licenses, rights Oil and gas assets with unproved reserves Goodwill Total 2,509 53 122 23 (23) (22) 2,663 857 11 191 13 4 (22) (22) 1,032 1,652 1,631 1,936 (266) 887 68 3 (91) (29) 2,509 895 (61) 113 1 (0) (54) (29) (9) 857 1,041 1,652 2021 2,195 58 134 (336) (74) (101) 1,876 934 33 0 184 (147) — (95) 909 1,260 967 2020 2,860 (106) — 117 (514) — (162) 2,195 360 (29) — 768 (5) — (160) (0) 934 2,500 1,260 531 31 — — — — 562 — — — — — — — — 531 562 622 (53) — — — (38) — 531 — — — — — — — — — 622 531 5,235 142 257 (313) (96) (123) 5,101 1,792 44 191 196 (143) (22) (117) 1,940 3,443 3,161 5,418 (425) 887 185 (511) (129) (191) 5,235 1,255 (90) 113 769 (5) (54) (189) (9) 1,792 4,163 3,443 145 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Additions to intangible assets in 2021 included EUR 33 mn additions for internally generated assets mainly related to capitalized development costs. in the Norwegian oil field Wisting, which was sold in Q4/21. For details see Note 20 – Assets and liabilities held for sale and Note 26 – Statement of cash flows. The transfers were mainly referring to the shift of the in- tangible assets related to Maui in New Zealand to tan- gible assets as the status of proved reserves was achieved. Further details on impairments and write-ups can be found in Note 7 – Depreciation, amortization, impair- ments and write-ups. Intangible assets with a total carrying amount of EUR 74 mn (2020: EUR 75 mn) were transferred to as- sets held for sale, mainly related to OMV’s 25% stake Goodwill arising from business combinations has been allocated to the following CGUs and groups of CGUs, for impairment testing: Goodwill allocation In EUR mn Middle East and Africa SapuraOMV Goodwill allocated to Exploration & Production Refining West Retail Slovakia Refining Austria Goodwill allocated to Refining & Marketing Goodwill 2021 2020 322 198 520 9 7 26 42 562 297 183 480 18 7 26 52 531 In 2021, the goodwill allocated to Exploration & Produc- tion increased due to favorable currency translation dif- ferences. to SapuraOMV an after-tax discount rate of 8.0% (2020: 7.88%) was used. In the Refining & Marketing Segment, the goodwill allo- cated to Refining West decreased due to unfavorable currency translation differences. Goodwill impairment tests based on a value in use cal- culation have been performed and did not lead to any impairments. For the impairment test of the goodwill al- located to Middle East and Africa, an after-tax discount rate of 9.44% (2020: 9.23%) and for goodwill allocated An after-tax discount rate of 12.73% related to the goodwill allocated to Middle East and Africa and an af- ter-tax discount rate of 9.19% related to SapuraOMV goodwill would lead to zero headroom. For details re- garding changes in price assumptions and the impact on Goodwill refer to Note 2 – Accounting policies, judgements and estimates. For details on contractual obligations for the acquisition of intangible assets refer to Note 15 – Property, plant and equipment. 146 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 15 Property, plant and equipment Property, plant and equipment including right-of-use assets In EUR mn Oil and gas assets with proved reserves Land and buildings Other fixtures, fittings and equipment Assets under construction Plant and machinery 2021 3,584 23,445 11,483 1,967 1,081 (2) 85 660 1,047 (50) 172 30 320 (493) (208) (335) 334 (1) (107) 25,042 11,254 13,695 364 1,255 93 148 0 (105) 15,451 9,750 9,591 5,640 (20) 674 41 (3) (49) (200) 6,085 5,843 5,169 2 39 (282) (28) 3,398 1,669 0 145 0 (2) (96) (17) 1,698 1,915 1,700 (5) 69 — 91 (51) (84) 1,989 1,346 (3) 143 1 4 (28) (80) 1,383 622 606 (1) 994 — (468) (91) (4) 1,511 7 0 — 1 — (0) (0) 8 1,073 1,503 Development of costs January 1 Currency translation differences Additions New obligations and change in esti- mates for decommissioning Transfers Assets held for sale Disposals December 31 Development of depreciation January 1 Currency translation differences Depreciation Impairments Transfers Assets held for sale Disposals December 31 Carrying amount January 1 Carrying amount December 31 Total 41,560 603 2,367 (303) 316 (919) (430) 43,195 22,358 342 2,218 137 147 (173) (402) 24,626 19,203 18,569 147 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Property, plant and equipment including right-of-use assets In EUR mn Oil and gas assets with proved reserves Land and buildings Other fixtures, fittings and equipment Assets under construction Plant and machinery 2020 3,520 23,974 8,987 2,120 (33) 396 96 11 40 (430) (15) (1,032) — 965 101 512 (901) (175) (21) 3,025 263 29 175 (920) (55) (15) 85 108 — 27 (300) (58) 415 (3) 624 320 — (242) (33) (0) 3,584 23,445 11,483 1,967 1,081 1,714 13,433 5,875 1,504 (17) 142 4 (0) (163) (9) (1) 1,669 1,806 1,915 (525) 1,182 658 8 (768) (173) (119) 13,695 10,541 9,750 (28) 406 17 (0) (480) (51) (98) 5,640 3,111 5,843 (10) 129 1 0 (221) (56) (0) 1,346 616 622 11 (0) — 0 (3) (1) 0 — 7 404 1,073 Total 39,017 (1,104) 4,129 1,753 141 511 (2,584) (303) 41,560 22,538 (581) 1,858 679 5 (1,633) (289) (219) 22,358 16,479 19,203 Development of costs January 1 Currency translation differences Changes in consolidated Group Additions New obligations and change in esti- mates for decommissioning Transfers Assets held for sale Disposals December 31 Development of depreciation January 1 Currency translation differences Depreciation Impairments Transfers Assets held for sale Disposals Write-ups December 31 Carrying amount January 1 Carrying amount December 31 The transfers were mainly referring to the shift of the in- tangible assets related to Maui in New Zealand to tan- gible assets, as the status of proved reserves was achieved. planned sale of Borealis’s nitrogen business and the re- tail business in Slovenia. For more details please see Note 20 – Assets and liabilities held for sale. Property, plant and equipment with a total carrying amount of EUR 745 mn (2020: EUR 950 mn) were transferred to assets held for sale, mainly related to the Further details on impairments and write-ups can be found in Note 7 – Depreciation, amortization, impair- ments and write-ups. Contractual obligations for acquisitions In EUR mn Intangible assets Property, plant and equipment Contractual obligations 2021 326 1,149 1,474 2020 327 1,202 1,529 148 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS In 2021 the contractual commitments for acquisitions of fixed assets were mainly related to activities in Explora- tion & Production and Chemicals & Materials. The de- crease of contractual obligations in 2021 was mainly re- lated to commitments in Norway and the project PDH Kallo in Borealis. OMV as a lessee Right-of-use assets included mainly leases of filling sta- tion sites and buildings, other land, vessels and office buildings. In addition, OMV leases mainly a hydrogen plant at Petrobrazi refinery in Romania, technical equip- ment and vehicles. Right-of-use assets with a total carrying amount of EUR 53 mn were transferred to assets held for sale, mainly related to planned sale of the retail business in Slovenia as well as the nitrogen business in Borealis and are represented in the line other movements. Leases not yet commenced in 2021 but committed amounted to EUR 26 mn. Right-of-use assets recognized under IFRS 16 In EUR mn January 1 Additions Depreciation Other movements December 31 January 1 Changes in consolidated Group Additions Depreciation Other movements December 31 Amounts recognized in the consolidated income statement In EUR mn Reported in operating result Short-term lease expenses thereof capitalized short-term lease expenses Reported in net financial result Interest expense from lease liabilities For information on lease liabilities see Note 24 – Liabili- ties. Land and buildings Plant and machinery Other fixtures, fittings and equipment 593 72 (67) (43) 555 667 75 62 (66) (145) 593 2021 48 18 (17) (7) 42 2020 37 19 12 (14) (6) 48 194 57 (62) (15) 174 111 76 57 (46) (3) 194 Total 836 147 (146) (66) 771 815 170 131 (126) (155) 836 2021 2020 35 11 30 16 26 24 149 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 16 Equity-accounted investments Material associates and joint ventures Abu Dhabi Polymers Company Limited (Borouge), registered in Abu Dhabi, is a leading provider of innova- tive, value-creating plastic solutions for energy, infra- structure, automotive, healthcare and agriculture indus- tries as well as advanced packaging applications. As OMV, with its 40% interest (2020: 40%) does not have joint control over Abu Dhabi Polymers Company Lim- ited (Borouge), the company is accounted for as an as- sociated company. Bayport Polymers LLC, registered in Pasadena (in- corporated in Wilmington), is currently building a poly- ethylene facility as well as an ethane steam cracker with the objective of supplying the abundantly available and competitively priced ethane in the United States to its polyethylene units. As OMV has joint control over Bayport Polymers LLC (50/50 share split), it accounts the company as joint venture. OMV also holds a 15% (2020: 15%) interest in Abu Dhabi Oil Refining Company, registered in Abu Dhabi, which runs a refinery hub with integrated petro- chemicals. According to the contractual agreement be- tween the shareholders, OMV has strong participation rights which represent significant influence as per IAS 28 definition. In 2021 the deterioration in the mar- gin outlook led to a change in price assumptions and triggered impairment testing in the ADNOC Refining and Trading CGU. This led to an impairment of EUR 669 mn. For further details please refer to Note 7 – Depreciation, amortization, impairments and write- ups. The above mentioned companies are not listed on pub- lic exchanges thus quoted market prices do not exist. The tables below contain summarized financial infor- mation for the material associates and joint ventures. Statement of comprehensive income In EUR mn Sales revenue Net income for the year Other comprehensive income Total comprehensive income Group’s share of comprehensive income Dividends distributed 2021 Associates Abu Dhabi Polymers Company Limited (Borouge) Joint Venture Bayport Polymers LLC Abu Dhabi Oil Refining Company 4,630 1,139 1 1,140 456 1,876 588 73 — 73 36 21 11,361 (1,296) — (1,296) (194) — 2020 Associates Abu Dhabi Polymers Company Limited (Borouge)1 715 64 (9) 55 Joint Venture Bayport Polymers LLC1 75 14 — 14 22 — 7 21 Abu Dhabi Oil Refining Company 21,760 (233) — (233) (35) — 1 In 2020 income statement and other comprehensive income for Abu Dhabi Polymers Company Limited (Borouge) and Bayport Polymers LLC represent amounts since inclusion in OMV Group on October 29, 2020. 150 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Statement of financial position In EUR mn Non-current assets Current assets Non-current liabilities Current liabilities Equity Group’s share Goodwill OMV Group adjustments Carrying amount of investment Carrying amount reconciliation In EUR mn 2021 Associates Abu Dhabi Polymers Company Limited (Borouge) Joint Venture Bayport Polymers LLC Abu Dhabi Oil Refining Company 6,696 1,826 3,603 558 4,361 1,744 1,917 400 4,061 3,379 163 1,913 206 1,423 711 — (23) 688 17,207 4,137 4,943 3,311 13,089 1,963 64 (280) 1,747 2020 Associates Abu Dhabi Polymers Company Limited (Borouge) Joint Venture Bayport Polymers LLC 6,422 1,515 335 461 7,142 2,857 1,770 436 5,062 2,543 332 1,515 76 1,284 642 — (22) 620 Abu Dhabi Oil Refining Company 17,905 2,979 6,100 1,093 13,691 2,054 — (873) 1,181 2021 Associates Abu Dhabi Polymers Company Limited (Borouge) Joint Ventures Bayport Polymers LLC Abu Dhabi Oil Refining Company 2020 Associates Abu Dhabi Polymers Company Limited (Borouge) Joint Ventures Bayport Polymers LLC Abu Dhabi Oil Refining Company January 1 Changes in the consolidated group Additions and other changes Currency translation differences Net income Other comprehensive income Dividends Impairment December 31 1,747 — — 138 (35) — — (669) 1,181 5,062 — — 419 456 0 (1,876) — 4,061 620 — — 53 36 — (21) — 688 2,109 — — (168) (194) — — — 1,747 — 5,290 — (250) 26 (3) — — 5,062 — 515 143 (24) 7 — (21) — 620 Individually immaterial associates and joint ven- tures OMV holds 55.6% (2020: 55.6%) of Erdöl-Lagerge- sellschaft m.b.H (ELG), registered in Lannach, which is holding the major part of the emergency stock of crude and petroleum products in Austria. In spite of holding the majority of voting rights in the general as- sembly, OMV does not have control over ELG. The sig- nificant decisions on the financial and operating policies are delegated to the standing shareholder’s committee in which a quorum of two thirds of the share capital is required for decisions. OMV exercises joint control over Abu Dhabi Petro- leum Investments LLC (ADPINV, OMV’s interest 25%, 2020: 25%), registered in Abu Dhabi, and Pak-Arab Refinery Limited (PARCO; indirect interest of OMV amounts to 10%, 2020: 10%), registered in Karachi, and accounts both investments at-equity. ADPINV is a holding company for its 40% interest in PARCO. As unanimous consent of the parties is required for deci- sions about relevant activities and OMV has rights to the net assets based on the legal structure, OMV clas- sified the companies as joint ventures according to IFRS 11. 151 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Furthermore, OMV has a 10% interest (2020: 10%) in Pearl Petroleum Company Limited, registered in Road Town, British Virgin Islands, which is involved in exploration and production of hydrocarbons in the Kur- distan Region of Iraq. According to the contractual agreement between OMV and Pearl Petroleum Com- pany Limited (Pearl), OMV has significant influence within the meaning of IAS 28, as unanimous consent is required for some strategic decisions. Therefore Pearl is accounted for using the equity method although OMV‘s share is just 10%. OMV also holds 50% share (2020: 50%) in Borouge Pte.Ltd., based in Singapore, which is responsible for marketing and sales of the products produced by Abu Dhabi Polymers Company Limited (Borouge). Even though OMV holds a 50% interest in Borouge Pte. Ltd., OMV has no joint control and thus accounts for it as an associated company. In June 2021, OMV subscribed through Borealis Group to a new share issue, thus acquiring 10% in Renasci N.V., a company incorporated in Belgium. Renasci N.V. is principally engaged in the development of the propri- etary processes and know how about various technolo- gies regarding waste treatment and recycling. Through the shareholder agreement, Borealis is guaranteed two seats on the board of Renasci N.V. and participates in major significant financial and operating decisions. The Group has therefore determined that it has significant influence over this entity, even though it only holds 10% of the voting rights. Therefore, the investment is ac- counted for as an associated company. As per September 30, 2021, OMV finalized the sale of its 40% share in SMATRICS GmbH & Co KG (based in Vienna) and its 40% share in E-Mobility Provider Austria GmbH (based in Vienna) to VERBUND AG. For further details, please refer to Note 38 – Direct and indirect investments of OMV Aktiengesellschaft. Statement of comprehensive income for individually immaterial associates and joint ventures – Group’s share In EUR mn Sales revenue Net income for the year Other comprehensive income Total comprehensive income 2021 2020 Associates Joint ventures Associates Joint ventures 8,557 129 1 130 273 14 — 14 1,177 28 (2) 25 136 0 — 0 Carrying amount reconciliation for individually immaterial associates and joint ventures In EUR mn 2021 2020 Associates1 Joint ventures 91 802 59 25 — 129 1 (55) (92) 868 (2) (15) — 14 — — — 89 Associates1 553 (69) 322 13 28 (2) (1) (42) 802 Joint ventures 150 (9) 7 — 0 — (54) (5) 91 January 1 Currency translation differences Changes in consolidated Group Additions and other changes Net income Other comprehensive income Disposals and other changes Dividends distributed December 31 1 Includes associated companies accounted at-cost 152 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 17 Inventories Inventories In EUR mn Crude oil Natural gas Other raw materials Work in progress Finished petroleum products Other finished products1 Inventories 2021 673 204 537 146 645 945 3,150 2020 427 122 466 74 540 723 2,352 1 The balance of other finished products is mainly attributable to the finished products of Borealis Group, i.e. polyolefins and base chemicals. Purchases (net of inventory variation) In EUR mn Costs of goods and materials Inventory changes1 Write-downs to net realizable value and write-offs of inventories Reversal of inventories write-downs Purchases (net of inventory variation) 1 Mainly related to the petrochemical products The reversal of inventories write-downs in 2020 were related to the gas business resulting from increased prices. 2021 16,610 3,615 41 (9) 20,257 2020 8,992 540 134 (68) 9,598 153 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 18 Financial assets Financial assets1 In EUR mn Valued at fair value through profit or loss Valued at fair value through other comprehen- sive income Valued at amortized cost Total carrying amount thereof short-term thereof long-term Trade receivables from contracts with customers Other trade receivables Total trade receivables Investments in other companies Investment funds Bonds Derivatives designated and effective as hedging instruments Other derivatives Loans Other sundry financial assets Total other financial assets Financial assets Trade receivables from contracts with customers Other trade receivables Total trade receivables Investments in other companies Investment funds Bonds Derivatives designated and effective as hedging instruments Other derivatives Loans Other sundry financial assets Total other financial assets Financial assets 258 — 258 1 30 — — 4,220 — 432 4,683 4,941 71 — 71 1 35 — — 2,502 — 744 3,283 3,353 — — — 16 — — 398 — — — 415 415 — — — 14 — — 71 — — — 84 84 2021 3,671 589 4,260 — — 63 — — 2,015 1,703 3,781 8,041 2020 1,806 1,440 3,245 — — 64 — — 1,720 1,313 3,097 6,343 3,929 589 4,518 17 30 63 398 4,220 2,015 2,135 8,879 13,397 1,876 1,440 3,316 15 35 64 71 2,502 1,720 2,058 6,464 9,780 3,929 589 4,518 — — 24 312 3,425 115 1,272 5,148 9,667 1,876 1,440 3,316 — — 0 63 2,105 85 765 3,018 6,334 — — — 17 30 40 87 795 1,900 862 3,730 3,730 — — — 15 35 63 8 397 1,636 1,293 3,447 3,447 1 Excluding financial assets that were reclassified to assets held for sale, which are described in Note 20 – Assets and liabilities held for sale. The carrying amount of financial assets at fair value through profit or loss as at December 31, 2021 was EUR 4,941 mn (2020: EUR 3,353 mn). These mainly consisted of financial assets held for trading. Moreover, it included an acquired contractual position towards Gazprom with regard to the reserves redeter- mination in amount of EUR 432 mn (2020: EUR 688 mn) in connection with the acquisition of inter- ests in the Yuzhno Russkoye field. In 2020 this position included also financial assets amounting to EUR 57 mn related to the contingent considerations from the divest- ment of the 30% stake in Rosebank and from the di- vestment of OMV (U.K.) Limited, which are dependent on the date when the Rosebank project coventurers will approve the final investment decision. In 2021 the fair value of these financial assets was reduced to zero. For details with regards to valuation of these financial assets at fair value through profit or loss please refer to Note 9 – Other operating expenses. 154 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS In 2021, the position loans included drawdowns and the related accrued interests under the financing agree- ments for the Nord Stream 2 pipeline project in amount of EUR 987 mn (2020: EUR 953 mn). The increase was mainly related to a higher position of accrued inter- est. This position also included drawdowns and the re- lated accrued interests under a member loan agree- ment towards Bayport Polymers LLC in amount of EUR 987 mn (2020: EUR 736 mn). The drawdowns made during 2021 amounted to EUR 183 mn (2020: EUR 93 mn). For further details see Note 11 – Net fi- nancial result as well as Note 35 – Related Parties. Other sundry financial assets included expenditure recoverable from Romanian State amounting to EUR 372 mn (2020: EUR 493 mn) related to obliga- tions for decommissioning and environmental costs in OMV Petrom SA. The receivables consisted of EUR 352 mn (2020: EUR 442 mn) for costs relating to de- commissioning and EUR 20 mn (2020: EUR 51 mn) for costs relating to environmental cleanup. On March 7, 2017, OMV AG, as party in the OMV Petrom privatization agreement, initiated arbitration proceedings against the Romanian Ministry of Environ- ment, in accordance with the International Chamber of Commerce Rules, regarding certain claims unpaid by this ministry for cost incurred by OMV Petrom relating to well decommissioning and environmental remedia- tion works amounting to EUR 58 mn. On July 9, 2020, the Arbitral Tribunal issued the Final Award on the arbi- tration and requested the Romanian Ministry of Envi- ronment to reimburse to OMV Petrom almost entirely the amount claimed and related interest. During 2021, the amount of EUR 58 mn representing the principal was collected. On October 2, 2020, OMV AG, as party in the privatiza- tion agreement, initiated arbitration proceedings against the Romanian Ministry of Environment in accordance with the International Chamber of Commerce Rules, re- garding certain claims unpaid by the Romanian Ministry of Environment in relation to well decommissioning and environmental remediation works amounting to EUR 31 mn. As of December 31, 2021, the arbitration procedure is ongoing. Additionally, other sundry financial assets contained re- ceivables towards partners in the Exploration & Produc- tion business as well as seller participation notes in Carnuntum DAC (see Note 36 – Unconsolidated struc- tured entities – for further details). Equity investments measured at FVOCI In EUR mn Investment Fair value 2021 Fair value adjustment through OCI Dividend recognized as income Fair value 2020 Fair value adjustment through OCI Dividend recognized as income APK-Pensionskasse Aktiengesellschaft BSP Bratislava-Schwechat Pipeline GmbH Wiener Börse AG FSH Flughafen-Schwechat-Hydranten-Gesell- schaft GmbH & Co OG WAV Wärme Austria VertriebsgmbH Bockatech Limited Oil Insurance Limited Other Equity investments measured at FVOCI 2 — 4 2 2 3 — 2 16 (0) — (0) — — — — — (1) 0 — 1 — 0 — 4 4 9 3 — 5 2 2 — 0 2 14 0 (3) 0 — — — — 0 (2) — — 0 0 0 — 2 0 3 155 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Probability of default Risk Class 1 Risk Class 2 Risk Class 3 Risk Class 4 Risk Class 5 Equivalent to external credit rating Probability of default AAA, AA+, AA AA-, A+, A, A- BBB+, BBB, BBB- BB+, BB, BB- B+, B, B-, CCC/C SD/D 2021 2020 0.07% 0.24% 1.21% 10.37% 100.00% 0.07% 0.25% 1.19% 10.26% 100.00% 2021 61 2020 62 (2) (6) (0) (1) 51 (2) 4 (2) (1) 61 2021 1,653 1,133 944 538 43 4,311 (51) 4,260 2020 999 981 1,031 238 57 3,306 (61) 3,245 For further details on the credit risk management see Note 28 – Risk Management. Impairment of trade receivables In EUR mn January 1 Amounts written off Net remeasurement of expected credit losses Currency translation differences Reclassification to assets held for sale December 31 Net remeasurement of expected credit losses was mainly related to the trade receivables from contracts with customers. Credit quality of trade receivables In EUR mn Risk Class 1 Risk Class 2 Risk Class 3 Risk Class 4 Risk Class 5 Total gross carrying amount Expected credit loss Total 156 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Impairment of other financial assets at amortized cost In EUR mn 12-month ECL Lifetime ECL not credit impaired Lifetime ECL cre- dit impaired Total January 1 Amounts written off Net remeasurement of expected credit losses Currency translation differences Reclassification to assets held for sale December 311 January 1 Net remeasurement of expected credit losses Currency translation differences Reclassification to assets held for sale December 311 7 (0) 2 0 — 9 5 2 (0) — 7 2021 73 — 0 6 — 79 2020 80 (0) (7) — 73 155 (2) 13 (1) (2) 162 154 11 (3) (3) 155 235 (2) 15 5 (2) 251 238 13 (10) (3) 235 1 “12-month ECL” included an amount of EUR 1 mn (2020: EUR 1 mn) and “Lifetime ECL credit impaired” an amount of EUR 10 mn (2020: EUR 9 mn) related to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. Credit Quality other financial assets at amortized cost In EUR mn Lifetime ECL not credit im- paired Lifetime ECL credit impaired 12-month ECL 12-month ECL Total Lifetime ECL not credit im- paired Lifetime ECL credit impaired Risk Class 1 Risk Class 21 Risk Class 3 Risk Class 4 Risk Class 5 Total gross carrying amount Expected credit loss2 Total 2,069 1,464 209 14 0 3,756 (9) 3,747 2021 113 — — — — 19 10 2 22 111 2,202 1,473 210 36 111 113 (79) 34 162 (162) — 4,032 (251) 3,781 1,252 1,554 217 0 0 3,022 (7) 3,016 2020 154 — — — — 9 9 4 22 111 154 (73) 81 155 (155) (0) Total 1,415 1,563 221 22 111 3,332 (235) 3,097 1 “12-month ECL” included an amount of EUR 373 mn (2020: EUR 494 mn) and “Lifetime ECL credit impaired” an amount of EUR 10 mn (2020: EUR 9 mn) re- lated to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. 2 “12-month ECL” included an amount of EUR 1 mn (2020: EUR 1 mn) and “Lifetime ECL credit impaired” an amount of EUR 10 mn (2020: EUR 9 mn) related to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. 157 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 19 Other assets Other assets In EUR mn Prepaid expenses Advance payments on fixed assets Other payments on account Receivables from other taxes and social security Contract assets Emission rights1 Emission rights to be received from customers1 Other non-financial assets Other assets 1 For further details refer to Note 23 – Provisions. 20 Assets and liabilities held for sale Assets and liabilities held for sale In EUR mn 2021 2020 Short-term Long-term Short-term Long-term 60 83 107 185 8 58 99 21 621 18 14 22 39 8 — — 12 113 57 38 91 227 — 37 72 14 537 12 — 13 39 7 — — 30 103 OMV retail business Germany OMV retail business Slovenia Total Exploration & Production Refining & Marketing Chemicals & Materials Corporate & Other OMV Group 27 32 — — 58 10 1 2 1 14 73 — — 10 247 — 44 301 24 43 0 0 67 368 0 114 85 23 — 85 10 — 10 95 52 189 40 28 67 257 2021 10 366 — 44 420 76 93 1 2 173 593 0 149 23 54 227 79 75 153 380 0 119 — 0 119 52 51 1 2 106 225 0 35 — 2 37 39 47 86 123 1 260 6 27 294 221 222 62 11 516 810 62 5 12 41 120 236 78 314 434 — 3 — — 3 — — — — — 3 — — — — — — — — — 38 661 6 71 776 308 316 65 14 703 1,479 63 154 120 95 432 325 153 477 909 Intangible assets Property, plant and equipment At-equity accounted investments Other assets incl. deferred taxes Non-current assets Inventories Trade receivables Other assets Cash in hand and at bank Current assets Total assets Provision for pensions and similar obligations Lease liabilities Provisions for decommissioning and restoration obligations Other liabilities incl. provisions and deferred taxes Non-current liabilities Trade payables Other liabilities incl. provisions Current liabilities Total liabilities 158 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Assets and liabilities held for sale In EUR mn Intangible assets Property, plant and equipment At-equity accounted investments Other assets incl. deferred taxes Non-current assets Inventories Trade receivables Other assets Cash in hand and at bank Current assets Total assets Provision for pensions and similar obligations Lease liabilities Other interest bearing debts Provisions for decommissioning and restoration obligations Other liabilities incl. provisions and deferred taxes Non-current liabilities Trade payables Provisions for decommissioning and restoration obligations Other liabilities incl. provisions Current liabilities Total liabilities Gas Connect Group OMV retail business Germany Other Total Exploration & Production Refining & Marketing 26 255 — 13 293 14 9 27 15 64 358 — 3 — 186 7 197 21 11 15 47 243 2020 10 231 — 4 245 19 36 0 — 56 301 0 125 — 23 — 148 52 — 22 75 223 — 10 — — 10 — — — — — 10 — — — — — — — — — — — 77 870 54 17 1,018 25 53 9 0 88 1,106 59 129 147 27 13 374 76 — 42 118 492 68 629 54 13 763 6 17 9 0 32 795 58 4 147 5 13 226 24 — 19 43 269 OMV Group 104 1,124 54 30 1,312 39 62 36 15 152 1,464 59 131 147 214 20 571 97 11 56 165 736 Exploration & Production On May 14, 2021, OMV Petrom finalized the sale of its 100% share in Kom-Munai LLP and Tasbulat Oil corpo- ration LLP (both based in Aktau, Kazakhstan) to Mag- netic Oil Limited. On August 1, 2021, SapuraOMV Upstream Sdn. Bhd. sold its entire share in SapuraOMV Upstream (PM) Inc., which held various producing assets located off- shore Peninsular Malaysia, to Jadestone Energy PLC, a Singapore-based, London-listed independent oil and gas company. On December 1, 2021, OMV Petrom finalized the sale of 40 marginal onshore oil and gas fields in Romania. The above mentioned sales transactions did not have a significant impact on the income statement. 2021 whereas the economic effective date of transac- tion was January 1, 2021. For further details regarding the effects of the sale of Wisting licenses please refer to Note 6 – Other operating income and net income from equity accounted investments – and Note 26 – Statement of cash flows. As of December 31, 2021, assets held for sale and lia- bilities associated with assets held for sale in Explora- tion & Production entirely consisted of a 69% interest in Maari field, located in New Zealand’s offshore Taranaki Basin. Refining & Marketing On May 31, 2021, OMV closed the transaction to sell its 51% interest in Gas Connect Austria GmbH (based in Vienna) to VERBUND. The sales transaction did not have a significant impact on the income statement. During 2021 OMV (NORGE) AS decided to sell its en- tire 25% stake in the Wisting licenses to Lundin Energy AB. Sale transaction was closed on December 17, During 2021, OMV Downstream GmbH decided to sell its 40% shares in SMATRICS GmbH & Co KG and E- Mobility Provider Austria GmbH (both based in Vienna) 159 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS to VERBUND. The sales transaction was closed on September 30, 2021. On December 3, 2021, OMV finalized the sale of its 100% share in Haramidere Depoculuk Anonim Şirketi (based in Instanbul) to CAN ULUSLARALASI YATIRIM ANONIM SIRKETI. As of December 31, 2021, assets held for sale and lia- bilities associated with assets held for sale in Refining & Marketing related to OMV retail businesses in Ger- many and Slovenia. On December 14, 2020, OMV and EG Group reached an agreement for EG Group to acquire the OMV retail business (285 filling stations) in Germany. The transac- tion is subject to required regulatory approvals and closing is expected in 2022. During 2021 OMV decided to sell its retail business in Slovenia (120 filling stations) which led to the reclassifi- cation to assets and liabilities to held for sale. This re- classification did not lead to an impairment loss. On June 8, 2021 OMV and MOL Group reached an agree- ment for MOL Group to acquire OMV Slovenia. The transaction is subject to required regulatory approvals and closing is expected in 2022. Chemicals & Materials As of December 31, 2021, assets held for sale and lia- bilities associated with assets held for sale in Chemi- cals & Materials related entirely to the nitrogen busi- ness unit of Borealis Group. During 2021 OMV decided to sell the nitrogen business unit in Borealis Group (75% held by OMV) including fer- tilizer, technical nitrogen and melamine products. This led to the reclassification of the disposal group to as- sets and liabilities held for sale without having an im- pact on the income statement at that time. The Borealis Group’s share in fertilizer production sites in the Neth- erlands and Belgium (“Rosier”) is presently not being considered within the potential sales process. Closing of the sales transaction is expected in 2022. OMV determines the net position of emission certifi- cates for the Group. As of December 31, 2021 an obli- gation to surrender 2,277,248 emission certificates (market value: EUR 172 mn) related to the nitrogen business unit was not included in the balance sheet line “Liabilities associated with assets held for sale”, due to the net presentation policy. The result of the measurement at fair value less cost of disposal of the nitrogen business as of December 31, 2021 has led to an impairment which is described in more details in the Note 7 – Depreciation, amortization, impairments and write-ups. 160 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 21 Equity of stockholders of the parent Capital stock The capital stock of OMV Aktiengesellschaft consists of 327,272,727 (2020: 327,272,727) fully paid no par value shares with a total nominal value of EUR 327,272,727 (2020: EUR 327,272,727). There are no different classes of shares and no shares with spe- cial rights of control. All shares are entitled to dividends for the financial year 2021, with the exception of treas- ury shares held by OMV Aktiengesellschaft. As the authorized capital granted by the Annual Gen- eral Meeting on May 14, 2014 expired on May 14, 2019, the Annual General Meeting decided upon a new authorized capital on September 29, 2020. Specifically, it authorized the Executive Board until September 29, 2025 to increase the share capital of OMV with the con- sent of the Supervisory Board – at once or in several tranches – by an amount of up to EUR 32,727,272 by issuing up to 32,727,272 new no-par value common voting shares in bearer form in return for contributions in cash. The capital increase can also be implemented by way of indirect offer for subscription after taking over by one or several credit institutions according to Sec- tion 153 Paragraph 6 Austrian Stock Corporation Act. The issue price and the conditions of issuance can be determined by the Executive Board with the consent of the Supervisory Board. Further, the Annual General Meeting authorized the Ex- ecutive Board, subject to the approval of the Supervi- sory Board, to exclude the subscription right of the shareholders if the capital increase serves to (i) adjust fractional amounts or (ii) satisfy stock transfer pro- grams, in particular long term incentive plans, equity deferrals or other participation programs for employees, senior employees and members of the Executive Board/management boards of the Company or one of its affiliates, or other employees stock ownership plans. In addition, the Supervisory Board was authorized to adopt amendments to the Articles of Association result- ing from the issuance of shares according to the au- thorized capital. Capital reserves Capital reserves have been formed by the contribution of funds into OMV Aktiengesellschaft by its sharehold- ers over and above the capital stock, on the basis of their ownership relationship. Hybrid capital The hybrid capital recognized in equity in the amount of EUR 2,483 mn consists of perpetual, subordinated hybrid notes. According to IFRS, the net proceeds of the hybrid notes are fully treated as equity because the repayment of the principal and the payments of interest are solely at the discretion of OMV. On December 7, 2015, OMV issued hybrid notes with an aggregate principal amount of EUR 1,500 mn, in two tranches of EUR 750 mn: ▸ The hybrid notes of tranche 1, with the first call date in 2021, were called and redeemed at their principal amount (plus interest accrued) on November 30, 2021. ▸ The hybrid notes of tranche 2 bear a fixed interest rate of 6.250% per annum until, but excluding, De- cember 9, 2025, which is the first call date of tranche 2. From December 9, 2025 (including), tranche 2 will bear an interest rate per annum at the relevant five-year swap rate for the relevant interest period plus a specified margin and a step-up of 100 basis points. Interest is due and payable annually in arrears on De- cember 9 of each year, unless OMV elects to defer the relevant interest payments. The outstanding deferred interest must be paid under certain circumstances, in particular, if the Annual General Meeting of OMV re- solves upon a dividend payment on OMV shares. On June 19, 2018 OMV issued a hybrid bond with a principal amount of EUR 500 mn. The hybrid bond bears a fixed interest rate of 2.875% per annum until, but excluding, June 19, 2024. From June 19, 2024 (in- cluding), until, but excluding, June 19, 2028, the hybrid notes will bear interest at a rate corresponding to the relevant five-year swap rate plus a specified margin. From June 19, 2028 (including), the notes will bear an interest rate per annum at the relevant five-year swap rate for the relevant interest period plus a specified margin and a step-up of 100 basis points. Interest is due and payable annually in arrears on June 19 of each year, unless OMV elects to defer the relevant in- terest payments. The outstanding deferred interest must be paid under certain circumstances, in particular, if the Annual General Meeting of OMV resolves upon a dividend payment on OMV shares. 161 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS On September 1, 2020, OMV issued hybrid notes with an aggregate principal amount of EUR 1,250 mn, in two tranches (Tranche 1: EUR 750 mn; Tranche 2: EUR 500 mn) with the following interest payable: ▸ The hybrid notes of tranche 1 bear a fixed interest rate of 2.500% per annum until, but excluding Sep- tember 1, 2026, which is the first reset date of tranche 1. From the first reset date (including), until, but excluding, September 1, 2030, the hybrid notes of tranche 1 will bear interest per annum at a reset interest rate which is determined according to the relevant five-year swap rate plus a specified mar- gin. From September 1, 2030 (including), the hybrid notes of tranche 1 will bear an interest rate per an- num at the relevant five-year swap rate for each in- terest period thereafter plus a specified margin and a step-up of 100 basis points. ▸ The hybrid notes of tranche 2 bear a fixed interest rate of 2.875% per annum until, but excluding Sep- tember 1, 2029, which is the first reset date of tranche 2. From the first reset date (including), until, but excluding, September 1, 2030, the hybrid notes of tranche 2 will bear interest per annum at a reset interest rate which is determined according to the relevant five-year swap rate plus a specified mar- gin. From September 1, 2030 (including), the hybrid notes of tranche 2 will bear an interest rate per an- num at the relevant five-year swap rate for each in- terest period thereafter plus a specified margin and a step-up of 100 basis points. Interest is due and payable annually in arrears on Sep- tember 1 of each year, unless OMV elects to defer the relevant interest payments. The outstanding deferred interest must be paid under certain circumstances, in particular, if the Annual General Meeting of OMV re- solves upon a dividend payment on OMV shares. The hybrid notes outstanding as of December 31, 2021 do not have a scheduled maturity date and they may be redeemed at the option of OMV under certain circum- stances. OMV has, in particular, the right to repay the hybrid notes at certain call dates. Any accrued unpaid interest becomes payable when the notes are re- deemed. In the case of a change of control, for exam- ple, OMV may call the hybrid notes for redemption or else the applicable interest rate will be subject to an in- crease according to the terms and conditions of the hy- brid notes. Revenue reserves The Group’s revenue reserves included the net in- come and losses of consolidated subsidiaries and eq- uity accounted investments, as adjusted for the pur- poses of consolidation. Treasury shares The Annual General Meetings for the years 2000 to 2011 (with the exception of 2010) and 2019 approved the repurchase of treasury shares. The costs of repur- chased shares have been reflected as a reduction in equity. Gains or losses on the re-issue of treasury shares (issue proceeds less acquisition cost) result in an increase or a reduction in capital reserves. On May 18, 2016, the Annual General Meeting author- ized the Executive Board for a period of five years from the adoption of the resolution, therefore, until (includ- ing) May 17, 2021, upon approval of the Supervisory Board, to dispose of or utilize stock repurchased or al- ready held by the Company to grant treasury shares to employees, senior employees and/or members of the Executive Board/management boards of the Company or one of its affiliates including for purposes of share transfer programs, in particular long term incentive plans including matching share plans or other stock ownership plans, under exclusion of the general pur- chasing possibility of shareholders (exclusion of sub- scription rights). The authorization can be exercised as a whole or in parts or even in several tranches by the Company, by a subsidiary (section 189a number 7 Aus- trian Commercial Code) or by third parties for the ac- count of the Company. On June 2, 2021 the Annual General Meeting author- ized the Executive Board for a period of five years from the adoption of the resolution, therefore, until and in- cluding June 1, 2026, subject to the approval of the Su- pervisory Board, to dispose of or utilize repurchased treasury shares or treasury shares already held by the Company to grant to employees, executive employees and/or members of the Executive Board/management boards of the Company or its affiliates including for pur- poses of share transfer programs, in particular long term incentive plans including equity deferrals or other stock ownership plans, and to thereby exclude the gen- eral purchasing right of shareholders (exclusion of sub- scription rights). The authorization can be exercised as a whole or in parts or even in several tranches by the Company, by a subsidiary (Section 189a number 7 Austrian Commercial Code) or by third parties for the account of the Company. 162 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS The gains and losses recognized directly in other comprehensive income and their related tax effects were as follows: Tax effects relating to each component of other comprehensive income In EUR mn Currency translation differences Gains/(losses) on hedges Remeasurement gains/(losses) on defined benefit plans Gains/(losses) on equity investments Gains/(losses) on hedges that are subsequently transferred to the carrying amount of the hedged item Share of other comprehensive income of equity-accounted investments Other comprehensive income for the year Before-tax (expense) income 946 210 53 (1) 2021 Tax (expense) benefit1 13 (54) 11 0 Net-of-tax (expense) income) Before-tax (expense) income 2020 Tax (expense) benefit1 959 155 64 (0) (1,234) 38 4 (2) (2) (8) (8) (0) Net-of-tax (expense) income (1,236) 31 (4) (2) 17 (3) 14 (113) 26 (88) 02 n.a. 0 (108)2 n.a. (108) 1,225 (33) 1,192 (1,415) 8 (1,407) 1 Includes valuation allowances for deferred tax assets for the Austrian tax group. For further details please refer to Note 12 – Taxes on income and profit. 2 Represent net-of-tax amounts For the financial year 2021, the Executive Board of OMV Aktiengesellschaft proposed a dividend of EUR 2.30 per eligible share, which is subject to confirmation by the Annual General Meeting in 2022. The dividend for 2020 was paid in June 2021 and amounted to EUR 605 mn (EUR 1.85 per share). In 2020, dividend payment amounted to EUR 572 mn (EUR 1.75 per share). The interest paid for hybrid bonds in 2021 amounted to EUR 94 mn (2020: EUR 101 mn). Treasury shares January 1, 2020 Disposals December 31, 2020 Disposals December 31, 2021 Number of shares 372,613 (74,767) 297,846 (36,520) 261,326 Cost EUR mn 4.1 (0.8) 3.3 (0.4) 2.9 163 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Number of shares in issue January 1, 2020 Used for share-based compensations December 31, 2020 Number of shares Treasury shares Shares in issue 327,272,727 — 327,272,727 372,613 (74,767) 297,846 326,900,114 74,767 326,974,881 Used for share-based compensations December 31, 2021 — 327,272,727 (36,520) 261,326 36,520 327,011,401 22 Non-controlling interests Subgroups with material NCI In EUR mn Subgroups OMV Petrom Group Borealis Group SapuraOMV Group Gas Connect Group Other subsidiaries OMV Group 2021 Net income allocated to NCI Accumulated NCI 294 307 (8) 20 5 617 3,364 2,876 238 — 13 6,491 % NCI 49% 25% 50% — n.a. n.a. 2020 Net income allocated to NCI Accumulated NCI 131 (21) (27) 51 3 136 3,302 2,442 229 155 32 6,159 % NCI 49% 25% 50% 49% n.a. n.a. The proportion of ownership corresponds to the propor- tion of voting rights of the non-controlling interests (NCI) in all cases. The main activities of the OMV Petrom Group are ex- ploration and production of hydrocarbons (in Romania), refining of crudes (in Romania), marketing of petroleum products (in Romania, Bulgaria, Serbia and Moldova) and of natural gas as well as production and the sale of electricity (in Romania). Since October 29, 2020 Borealis Group is fully-consoli- dated, following the acquisition of an additional 39% stake in Borealis AG. Borealis Group is one of the world’s leading providers of advanced and circular poly- olefin solutions and a European market leader in base chemicals, fertilizers, and plastics recycling. The major- ity of Borealis’ production is located in Europe, with two overseas manufacturing facilities in the United States, one in Brazil and one in South Korea. SapuraOMV group is an oil and gas company based in Malaysia with strong growth prospects consisting of sizeable discovered resources and a strong portfolio of exploration prospects. Apart from Malaysia, it has ac- cess to exploration blocks in New Zealand, Australia and Mexico. Gas Connect Group operates a natural gas high-pres- sure pipeline grid in Austria, markets transportation ca- pacity to meet domestic natural gas demand and sup- ports export to Europe and acts as distribution or mar- ket area manager throughout the Federal territory of Austria. In 2020, the Gas Connect Group has been re- classified to assets and liabilities held for sale. On May 31, 2021, OMV closed the transaction to sell its 51% in- terest in Gas Connect Austria GmbH (based in Vienna) to VERBUND (see Note 3 – Changes in group struc- ture). 164 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS The following tables summarize the financial infor- mation of the subgroups with material non-controlling interests: Statement of comprehensive income1 In EUR mn Sales revenue Net income for the year Total comprehensive income Attributable to NCI Dividends paid to NCI 2021 2020 OMV Petrom Group Borealis Group OMV Petrom Group Borealis group2 5,285 582 596 292 172 9,862 1,256 1,882 463 38 4,075 267 258 126 175 1,106 (79) (320) (81) 0 1 Figures refer to subgroup level, i. e. including at-equity consolidation and after elimination of intercompany transactions and balances within the subgroup. 2 Figures reflect amounts from acquisition date on October 29, 2020 until reporting date. Statement of financial position as of December 311 In EUR mn Non-current assets Current assets Assets held for sale Non-current liabilities Current liabilities Liabilities associated with assets held for sale 2021 2020 OMV Petrom Group Borealis Group OMV Petrom Group Borealis group 6,598 3,496 3 1,528 1,655 — 10,933 4,655 810 2,553 1,892 434 7,088 2,517 177 1,817 1,087 85 11,829 2,159 — 2,527 1,719 — 1 Figures refer to subgroup level, i. e. including at-equity consolidation and after elimination of intercompany transactions and balances within the subgroup. Statement of cash flows1 In EUR mn 2021 2020 OMV Petrom Group Borealis Group OMV Petrom Group Borealis group2 Operating cash flow Investing cash flow Financing cash flow Net increase /(decrease) in cash and cash equivalents 1,422 (458) (389) 577 2,916 (1,086) (355) 1,475 1,148 (654) (397) 97 280 (269) (8) 3 1 Figures refer to subgroup level, i. e. including at-equity consolidation and after elimination of intercompany transactions and balances within the subgroup. 2 Figures reflect amounts from acquisition date on October 29, 2020 until reporting date. 165 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 23 Provisions Provisions In EUR mn January 1, 2021 Currency translation differences Usage and releases Payments to funds Allocations Transfers Reclassified to liabilities associated with assets held for sale December 31, 2021 thereof short-term as of December 31, 2021 thereof short-term as of January 1, 2021 Pensions and similar obligations 1,458 Decom- missioning and restoration obligations Other provisions 881 3,999 (4) (114) (22) 54 (12) (62) 1,299 — — 69 (520) — 220 — (12) 3,756 72 72 1 (251) — 360 25 (13) 1,003 360 304 Total 6,337 66 (885) (22) 634 13 (86) 6,057 432 377 Pensions and similar obligations include mainly pro- visions for pensions, severances and anniversary bo- nuses. More information on material IAS 19 employee benefits is included in chapter Provisions for pensions and similar obligations. Decommissioning and restoration details are in- cluded in chapter Provisions for decommissioning and restoration obligations. Other provisions include mainly provisions for oner- ous contracts, provisions for shortfall of emission certifi- cates and other personnel provisions. More information is provided in chapter Other provisions. Provisions for pensions and similar obligations ac- counted for according to IAS 19 Following tables include details on funded and un- funded pension plans (mainly Austria, Germany, Swe- den and Belgium) as well as severance plans (mainly in Austria) and medical plans (in Belgium). The majority of pension commitments of several OMV companies were transferred to a country-specific exter- nal pension funds. Pension commitments were calcu- lated based on country- and plan-specific assumptions. Refer to Note 2 – Accounting policies, judgments and estimates – for more details. Defined benefit pension plans, obligations for severance and other plans In EUR mn Present value of funded obligations Market value of plan assets Provision for funded obligations Present value of unfunded obligations Provision for unfunded obligations Present value of obligations of severance and other plans Effect of asset ceiling Total 2021 1,053 (595) 458 586 586 150 — 1,194 2020 2019 2018 1,102 (589) 513 619 619 197 3 1,332 840 (473) 366 499 499 141 — 1,007 729 (436) 293 463 463 135 — 891 2017 764 (453) 311 479 479 144 — 935 166 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Present value of obligations In EUR mn Present value of obligation as of January 1 Changes in the consolidated group Currency translation differences Reclassification to liabilities associated with assets held for sale Current service cost Past service cost1 Interest cost Benefits paid Expected defined benefit obligations as per De- cember 31 Actual defined benefit obligations as per Decem- ber 31 Remeasurements of the period (OCI) thereof changes in demographic assumptions thereof changes in financial assumptions thereof experience adjustments 1 mainly related to outsourcing activities in Romania Market value of plan assets In EUR mn Market value of plan assets as of January 1 Currency differences Changes in the consolidated group Reclassification to held for sale Interest income Allocation to funds Benefits paid Remeasurements of the period (OCI) Market value of plan assets as of December 31 2021 2020 Pensions 1,722 — (2) (27) 26 — 15 (85) 1,648 Severance & other plans 197 — (1) (34) 6 (2) 2 (14) 153 Pensions 1,339 519 4 (79) 8 — 13 (72) 1,733 1,639 150 1,722 (9) (1) 1 (9) (3) — — (3) (11) — (2) (9) Severance & other plans 141 78 (1) (11) 5 (5) 2 (18) 192 197 5 — 2 3 2021 589 1 — (10) 5 22 (52) 40 595 2020 473 0 177 (33) 5 10 (41) (1) 589 The majority of pension commitments are attributable to plans in Austria and Belgium and were transferred to external pension funds managed by APK Pension- skasse AG in Austria as well as Vivium and KBC Asset Management in Belgium. The investment of plan assets in Austria is governed by section 25 Austrian Pension Fund Act and the Investment Fund Act. In addition to these regulations, the investment guidelines of APK- Pensionskasse AG regulate the spread of asset alloca- tion, the use of umbrella funds and the selection of fund managers. The investment plans in Belgium follow the investment strategy of the respective insurance com- pany as well as local legal regulations. The allocation of plan assets was mainly in debt securi- ties and insurance contracts. Except for the insurance contracts, which are not quoted, the majority of plan as- sets are invested in liquid active markets for which quoted prices are available. In 2022, defined benefit related contributions for 2021 to external pension funds of EUR 3 mn are planned. 167 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Provisions and expenses In EUR mn Provision as of January 1 Changes in the consolidated group thereof effect of asset ceiling1 Currency translation differences Reclassification to liabilities associated with assets held for sale Expense for the year Benefits paid Payments to funds Remeasurements for the year thereof changes in demographic assumptions thereof changes in financial assumptions thereof experience adjustments thereof return on plan assets (excluding interest income) Provision as of December 31 thereof effect of asset ceiling1 Current service cost Past service cost2 Net interest cost Expenses of defined benefit plans for the year 2021 Pensions 1,135 — — (3) (20) 36 (33) (22) (50) (1) 1 (9) (40) 1,044 — 26 — 10 36 Severance & other plans 2020 Pensions Severance & other plans 197 — — (1) (34) 5 (14) — (3) — (3) — — 150 — 6 (2) 2 5 866 345 3 5 (45) 16 (32) (10) (10) — (2) (10) 1 1,135 3 8 — 9 16 141 78 — (1) (11) 2 (18) — 5 — 2 3 — 197 — 5 (5) 2 2 1 The effect of asset ceiling from 2020 was part of the reclassification to “held for sale” in 2021. 2 Mainly related to outsourcing activities in Romania Underlying assumptions for calculating pension expenses and expected defined benefit entitlements as of December 31 Capital market interest rate Future increases in salaries Future increase in pensions 2021 Pensions 1.00-2.60% 2.50-5.00% 1.70-2.25% Severance & other plans 0.80-5.22% 2.50-3.50% — 2020 Pensions 0.79-2.60% 2.00-5.00% 1.25-2.00% Severance & other plans 0.64-3.35% 2.00-3.50% — The following actuarial assumptions for calculating pen- sion expenses and expected defined benefit entitle- ments are considered as material and are stress tested within the following ranges. The increase or decrease compared to the values accounted for defined benefit obligations in relative deviation terms and in absolute values are as follows: Sensitivities - percentage change Pensions Severance & other plans Capital market interest rate Future increases in salaries Future increases in pensions +0.50% (6.05)% (5.49)% (0.50)% 6.72% 6.14% +0.25% 1.03% 2.36% (0.25)% (0.96)% (2.24)% +0.25% 2.52% — (0.25)% (2.38)% — 2021 168 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Sensitivities - absolute change In EUR mn 2021 Capital market interest rate Future increases in salaries +0.50% (0.50)% +0.25% (0.25)% (101) (9) 112 10 17 4 (16) (4) Pensions Severance & other plans Duration profiles and average duration of defined benefit obligations as of December 31 In EUR mn +0.25% Future increases in pensions (0.25)% (40) — 42 — 2021 Duration profiles 1–5 years 6–10 years >10 years 391 47 395 56 853 48 Duration in years 13 11 Pensions Severance & other plans Allocation of plan assets as of December 31 Asset category Equity securities Debt securities Cash and money market investments Insurance contracts Other Total Provisions for decommissioning and restoration obligations Provisions for decommissioning and restoration obligations In EUR mn January 1, 2021 Currency translation differences New obligations Increase arising from revisions in estimates Reduction arising from revisions in estimates Unwinding of discounting Reclassification to liabilities associated with assets held for sale Usage, disposals and other changes December 31, 2021 thereof short-term as of December 31, 2021 thereof short-term as of January 1, 2021 2021 2020 18% 35% 4% 30% 12% 100% 18% 37% 7% 28% 10% 100% Carrying amount 3,999 69 62 76 (446) 81 (12) (74) 3,756 72 72 The reduction arising from revisions in estimates was mainly driven by increased real interest rates for NOK, NZD and RON compared to 2020. Reclassification to liabilities associated with assets held for sale was mainly related to the disposal group of nitrogen business unit of Borealis Group. For details see Note 20 – Assets and liabilities held for sale. 169 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Estimation of maturities of decommissioning and restoration obligations In EUR mn ≤1 year 1 – 5 years 5 – 10 years 10 – 20 years 20 – 30 years 30 – 40 years >40 years Total 2021 72 252 926 1,684 556 264 1 3,756 A decrease of 1 percentage point in the real interest rates used to calculate the decommissioning provisions would lead to an additional provision of EUR 601 mn. The provision for decommissioning and restoration costs included obligations in respect of OMV Petrom SA amounting to EUR 1,260 mn (2020: EUR 1,542 mn). Part of the obligations is to be recov- ered from the Romanian State in accordance with the privatization agreement. As of December 31, 2021, OMV Petrom SA held receivables from the Romanian state related to decommissioning and restoration costs amounting to EUR 352 mn (2020: EUR 442 mn). Other provisions In EUR mn Environmental costs Onerous contracts Other personnel provisions Emissions certificates Residual other provisions Other provisions 2021 2020 Short-term Long-term Short-term Long-term 14 24 148 113 60 360 77 431 16 — 120 643 13 31 134 75 51 304 90 364 6 — 116 576 As at December 31, 2021 the provision for environ- mental costs included EUR 46 mn referring to the pro- vision for soil remediation in relation to the Arpechim refinery site in Romania. The provisions for onerous contracts were mainly related to the Gate LNG obligation and associated transportation commitments of OMV Gas Marketing & Trading GmbH. The provision for the Gate LNG obligation is related to a long-term, non-cancellable contract for regasification capacity and storage that became onerous due to the negative development of market conditions for LNG ter- minal capacities in Europe. The present value of the provision as at December 31, 2021 was EUR 390 mn (2020: EUR 327 mn). The provision represents the un- avoidable costs of meeting the contractual obligations. Thereby, income and costs from future purchases and sales of LNG are taken into account, since the regasifi- cation of LNG and subsequent sale of the gas posi- tively contributes to the coverage of the fixed costs. The volume assumptions are based on management’s best estimates of available LNG volumes in the future. The prices are based on forward rates, where availa- ble. If no forward prices are available, the prices repre- sent management’s best estimate of future prices, de- rived from current market prices or forward rates of the preceding period. The calculation is based on an inter- est rate of 4.51% (2020: 3.96%). A 50% decrease in LNG margin would lead to an additional provision of EUR 135 mn, a 50% decrease in LNG volumes to an additional provision of EUR 106 mn. Furthermore, a 1 percentage point decrease in the discount rate would lead to an additional provision of EUR 25 mn. As per end of 2021, the provision for the related non- cancellable transportation commitments of OMV Gas Marketing & Trading GmbH amounted to EUR 65 mn (2020: EUR 68 mn). The calculation is based on the dif- ference between the fixed costs for using the capacities 170 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS and the net profit from usage expected to be generated by using the capacities. The discount rate applied is 4.51% (2020: 3.96%). Besides the discount rates, the key assumptions are the gas prices at the relevant gas hubs which are based on forward rates where available and on management’s best estimates for the remaining contract term. Other personnel provisions included short-term provi- sions related to personnel reduction schemes of EUR 17 mn (2020: EUR 29 mn).The remaining amount was mainly related to boni provisions. Emissions certificates Directive 2003/87/EC of the European Parliament and of the European Council established a greenhouse gas emissions trading scheme, requiring member states to draw up national plans to allocate emissions certifi- cates. Under this scheme, affected OMV Group compa- nies are entitled to yearly allocation of free emissions certificates. The New Zealand Government established a green- house gas emissions trading scheme under the Climate Change Response Act 2002. Under this scheme New Zealand companies are not entitled to receive free emission certificates. OMV has purchased certificates to meet its own use liability. Apart from purchased cer- tificates, each sale of gas to domestic customers in New Zealand creates an obligation for OMV. OMV re- ceives units of emission certificates from customers to meet this obligation. In Germany, the fuel emissions trading act (BEHG; Brennstoffemissionshandelsgesetz) came into force on December 20, 2019, and is the basis for German na- tional certificate trading scheme for emissions from fos- sil fuels. It obliges the distributors - suppliers who de- liver to end customers and/or who take the fuel from the pipeline network (origin of energy tax) - of fuels to acquire CO2 emission certificates from January 1, 2021 onwards. According to Section 38 (2) of the Energy Tax Act, the tax debtor is the supplier; therefore, all compa- nies in possession of an energy tax supplier's certificate are to be considered as distributors. Unlike under Euro- pean Trading Scheme, certificates under BEHG are not eligible for trading and are not freely allocated, but have to be purchased from the German Emissions Trading Authority (DEHSt; Deutsche Emissionshandelsstelle). In 2022 OMV expects to surrender 10,143,712 emis- sions certificates from European Trading Scheme, 3,834,557 BEHG certificates and 2,802,025 NZ certifi- cates for (not yet externally verified) emissions, out of which 2,424,921 emissions certificates are expected to be transferred to OMV from customers in New Zealand. Emissions certificates Certificates held as of January 1 Free allocation for the year Certificates surrendered1 Changes in consolidated Group Net purchases and sales during the year Certificates received from customers Certificates held as of December 31 1 According to verified emissions for the prior year European Trading Scheme 12,210,093 5,891,495 (10,794,999) — 4,424,111 — 11,730,700 2021 NZ Trading Scheme 111,798 — (2,883,744) — 1,150,465 1,873,155 251,674 2020 DE Trading Scheme European Trading Scheme — 9,331,156 NZ Trading Scheme 106,211 — — — 3,617,321 — 3,617,321 3,038,336 (6,602,598) 5,310,058 1,133,141 — 12,210,093 — (5,635,404) — 444,172 5,196,819 111,798 171 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 24 Liabilities Liabilities1 In EUR mn Bonds Other interest-bearing debts Lease liabilities Trade payables Other financial liabilities Other liabilities Liabilities Short- term 2021 Long- term 795 350 131 4,860 4,367 1,440 7,275 1,415 887 — 587 118 11,943 10,282 Total 8,070 1,765 1,018 4,860 4,955 1,558 22,225 Short- term 2020 Long- term Total 850 703 141 4,304 3,095 868 8,019 1,280 943 — 454 135 9,961 10,830 8,869 1,983 1,084 4,304 3,549 1,003 20,791 1 Excluding liabilities associated with assets held for sale, which are described in Note 20 – Assets and Liabilities held for sale. Other interest-bearing debts predominately referred to bank loans, but also included private placements and other funding instruments. OMV participates in several supplier finance programs under which its suppliers may elect to receive early payment of their invoice from a bank by factoring their receivable from the Group to the bank. Under the ar- rangement, the bank agrees to pay amounts to a sup- plier participating in the program in respect of invoices owed by the Group and receives settlement from OMV later. The principal purpose of those programs is to fa- cilitate efficient payment processing and enable the consenting suppliers to sell their receivables due from OMV to a bank before their maturity. The Group has not derecognized the majority of original liabilities to which the arrangement applies because neither legal release was obtained nor the original liability was sub- stantially modified while entering into the arrangement. Most liabilities remain within trade payables and other financial liabilities until payment. From OMV’s perspec- tive, these arrangements do not significantly extend payment terms beyond the normal terms agreed with other suppliers that are not participating in the pro- grams. Consequently, cash effects are included in the cashflow from operating activities. 172 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Bonds Bonds issued In EUR mn Private Placement International corporate bonds Nominal EUR 300,000,000 Coupon 0.106% floating1 Repayment 06/11/2021 EUR 500,000,000 EUR 750,000,000 EUR 750,000,000 EUR 500,000,000 EUR 500,000,000 EUR 500,000,000 EUR 300,000,000 EUR 1,000,000,000 EUR 750,000,000 EUR 500,000,000 EUR 500,000,000 EUR 750,000,000 EUR 750,000,000 EUR 500,000,000 4.25% fixed 2.625% fixed 0.00% fixed 0.75% fixed 1.50% fixed 0.00% fixed 1.75% fixed 1.00% fixed 3.50% fixed 2.00% fixed 1.875% fixed 0.75% fixed 2.375% fixed 1.00% fixed 10/12/2021 09/27/2022 06/16/2023 12/04/2023 04/09/2024 07/03/2025 12/10/2025 12/14/2026 09/27/2027 04/09/2028 12/04/2028 06/16/2030 04/09/2032 07/03/2034 Bonds issued 1 Rate as of 31.12.2020 Bonds and other interest-bearing debts As at December 31, 2021, OMV Group was in compli- ance with all financial covenants stipulated by the loan agreements. Bonds and other interest-bearing debts In EUR mn Short-term loan financing Short-term component of long-term financing Total short-term Maturities of long-term financing 2022/2021 (short-term component of long-term financing) 2023/2022 2024/2023 2025/2024 2026/2025 2027/2026 and subsequent years Total for 2022/2021 onwards 2021 2020 Carrying amount December 31 Carrying amount December 31 — — 754 747 499 503 497 319 994 751 505 499 748 758 496 8,070 2021 254 891 1,145 891 1,277 822 1,174 1,183 4,233 9,581 300 504 753 746 498 501 496 324 993 750 505 499 747 757 495 8,869 2020 184 1,369 1,553 1,369 844 1,303 862 1,141 5,149 10,668 173 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Breakdown of bonds and other interest-bearing debts In EUR mn Bonds and other long-term interest-bearing debts1 Fixed rates EUR USD Other currencies Total Variable rates2 EUR USD Other currencies Total Other short-term interest-bearing debts EUR USD Other currencies Total 1 Including short-term components of long-term debts 2 Rates as of year-end Other financial liabilities Other financial liabilities In EUR mn 2021 2020 Weighted average interest rate Weighted average interest rate 8,959 312 — 9,271 77 194 38 310 250 4 — 254 1.45% 4.27% — 1.54% 0.77% 1.24% 0.46% 1.02% (0.22)% — — (0.22)% 9,363 288 33 9,685 661 282 41 984 182 0 2 184 1.63% 4.27% 9.40% 1.74% 0.27% 1.56% 0.66% 0.66% 0.17% — 0.95% 0.18% Derivative financial liabilities Liabilities on derivatives designated and effective as hedging instruments Liabilities on other derivatives Other sundry financial liabilities Other financial liabilities Derivative financial liabilities Liabilities on derivatives designated and effective as hedging instruments Liabilities on other derivatives Other sundry financial liabilities Other financial liabilities Short-term Long-term Total 3,607 102 3,506 760 4,367 2,169 86 2,083 926 3,095 2021 2020 471 — 471 116 587 347 12 335 106 454 4,079 102 3,977 876 4,955 2,516 98 2,418 1,033 3,549 174 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS The table hereafter summarizes the maturity profile of the Group’s financial liabilities based on contractual un- discounted cash flows: Financial liabilities (undiscounted cash flows) In EUR mn Bonds Other interest-bearing debt Lease liabilities Trade payables Derivative financial liabilities Other sundry financial liabilities Financial liabilities (undiscounted cash flows) Bonds Other interest bearing debts Lease liabilties Trade payables Derivative financial liabilities Other sundry financial liabilities Financial liabilities (undiscounted cash flows) Other liabilities In EUR mn Other taxes and social security liabilities Payments received in advance Contract liabilities Other sundry liabilities Other liabilities Other taxes and social security liabilities Payments received in advance Contract liabilities Other sundry liabilities Other liabilities ≤1 year 1 – 5 years >5 years Total 2021 870 373 155 4,860 3,608 761 10,627 3,921 940 420 — 471 22 5,774 3,984 511 739 — — 151 5,385 8,775 1,824 1,314 4,860 4,079 934 21,786 942 723 169 4,304 2,169 926 9,233 2020 3,707 881 430 — 347 22 5,387 5,068 437 777 — — 113 6,395 9,717 2,041 1,377 4,304 2,516 1,062 21,016 Short-term Long-term Total 1,027 128 129 155 1,440 607 34 96 131 868 2021 2020 — 16 98 4 118 — 15 117 3 135 1,027 144 228 159 1,558 607 49 214 134 1,003 175 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Contract liabilities In EUR mn January 1 Currency translation differences Revenue recognized that was included in the contract liability balance at the beginning of the period Increases due to cash received, excluding amounts recognized as revenue during the period Other changes December 31 2021 214 1 2020 222 (3) (80) (71) 95 (1) 228 69 (3) 214 The contract liabilities consisted mainly of non-refunda- ble prepayments of storage fees received from Erdöl- Lagergesellschaft m.b.H., Lannach on the basis of long-term service contracts. 176 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 25 Deferred taxes Deferred taxes In EUR mn Deferred tax assets total Deferred tax assets not recognized Deferred tax assets recognized Deferred tax liabilities Intangible assets Property, plant and equipment Inventories Derivatives Receivables and other assets Deferred taxes reclassified to assets and liabilities associated with as- sets held for sale Provisions for pensions and similar obligations Provisions for decommissioning, restoration obligations and environmental costs Other provisions Liabilities Tax impairments according section 12 (3)/2 of the Austrian Corporate Income Tax Act (KStG) Tax loss carryforwards Outside basis differences Total Netting (same tax jurisdictions) Deferred taxes reclassified to assets and liabilities associated with as- sets held for sale Deferred taxes as per statement of financial position Intangible assets Property, plant and equipment Inventories Derivatives Receivables and other assets Deferred taxes reclassified to assets and liabilities associated with as- sets held for sale Provisions for pensions and similar obligations Provisions for decommissioning, restoration obligations and environmental costs Other provisions Liabilities Tax impairments according section 12 (3)/2 of the Austrian Corporate Income Tax Act (KStG) Tax loss carryforwards Outside basis differences Total Netting (same tax jurisdictions) Deferred taxes reclassified to assets and liabilities associated with as- sets held for sale Deferred taxes as per statement of financial position 197 163 38 667 88 39 263 1,307 125 259 115 1,546 433 5,240 209 137 37 539 55 27 291 1,318 121 305 226 1,654 — 4,919 2021 22 86 — — 15 — 128 15 — 0 — 706 — 972 175 77 38 667 73 39 135 1,292 125 259 115 840 433 4,268 446 2,456 67 1,086 50 82 106 0 46 7 — — 10 4,356 (2,965) (2,965) 39 82 1,265 1,309 2020 20 89 — — 17 22 151 14 — 60 — 780 — 1,153 188 48 37 539 38 5 140 1,305 121 245 226 875 — 3,765 606 2,322 27 597 53 12 111 — 34 23 — — 40 3,823 (2,581) (2,581) 5 12 1,179 1,229 177 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Deferred taxes were mainly related to different valua- tion methods, differences in impairments, write-offs, de- preciation and amortization as well as different defini- tion of costs. In 2021 as well as in the previous year, a valuation al- lowance for deferred tax assets for the Austrian tax group was recognized. The overall net deferred tax asset position of tax juris- dictions which suffered a tax loss either in current or preceding year amounted to EUR 901 mn, thereof EUR 658 mn is attributable to the Austrian tax group (2020: EUR 720 mn, thereof Austrian tax group EUR 640 mn). As of December 31, 2021, OMV recognized tax losses carryforward of EUR 5,886 mn before allowances (2020: EUR 6,302 mn), thereof EUR 3,202 mn (2020: EUR 3,331 mn) are considered recoverable for calcula- tion of deferred taxes. Eligibility of losses for carryforward expires as follows: Tax losses carryforward In EUR mn 2021 2022 2023 2024 2025 After 2026/2025 Unlimited Tax losses carryforward 2021 2020 Base amount (before allo- wances) Base amount (before allo- wances) thereof not recognized thereof not recognized — 0 0 0 0 0 5,885 5,886 — 0 0 0 0 0 2,684 2,684 5 0 2 4 48 47 6,196 6,302 5 0 2 4 17 24 2,919 2,971 The majority of tax losses carryforward not recog- nized referred to the Austrian Tax Group and France. As of December 31, 2021, the aggregate amount of temporary differences associated with fully consoli- dated and equity-accounted investments for which de- ferred tax liabilities have not been recognized amounted to EUR 7,475 mn (2020: EUR 4,657 mn). Capital gains on disposals of investments may be real- ized on various levels of the Group depending on the structuring of potential divestments. Due to the com- plexity of the group and the associated tax implications simplifying assumptions for the calculation have been made that aim to diminish cascade effects. 178 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Supplementary Information on the Financial Position 26 Statement of cash flows Cash and cash equivalents In EUR mn Cash at banks and on hand Short-term deposits Cash and cash equivalents 2021 997 4,067 5,064 2020 741 2,128 2,869 Significant non-cash items In 2021 as well as in 2020, non-cash additions to fixed assets included mainly effects related to the reassess- ment of decommissioning and restoration obligations. The line “Proceeds in relation to non-current assets” contained a cash inflow of EUR 290 mn related to the sale of the stake in the Norwegian oil field Wisting. In 2020, the remeasurement of the previously held 36% at-equity share in Borealis was included in the line “Other changes” in the statement of cash flows. Cash flow from investing activities For details about the cash flow effect from divestments of subsidiaries and businesses please refer to Note 3 – Changes in group structure. Cash flow from financing activities The line “Repayments of long-term borrowings” com- prised the repayment of bonds totalling EUR 1.55 bn. This included the repayment of a hybrid bond in the amount of EUR 750 mn. Before repayment, the hybrid bond was reclassified from equity to financial liabilities after the Executive Board had approved on October 13, 2021 that OMV exercises the right to call the hybrid bond. Changes in liabilities arising from financing activities (incl. liabilities associated with assets held for sale) In EUR mn January 1 Increase in long-term borrowings Repayments of long-term borrowings Increase/(decrease) in short-term borrowings Total cash flows related to financing activities Currency translation differences Changes in consolidated group Reclassification of hybrid bond from equity to financial liabilities Difference interest expenses and interest paid Other changes Total non-cash changes 2021 Other interest- bearing debts 2,130 Lease liabilities 1,217 250 (563) 61 (251) 48 (148) — (15) — (114) — (174) — (174) 5 (6) — 1 1491 149 Bonds 8,869 — (1,550) — (1,550) — — 789 (4) — 784 Total 12,216 250 (2,287) 61 (1,975) 53 (154) 789 (18) 149 819 Coupon payment from hybrid bond before reclassification from equity 2 (33) — — (33) December 31 8,070 1,765 1,191 11,026 1 Mainly related to new lease agreements 2 Shown in the line "Dividends paid to stockholders of the parent (incl. hybrid coupons)" in the Statement of Cash Flows 179 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Changes in liabilities arising from financing activities (incl. liabilities associated with assets held for sale) In EUR mn January 1 Increase in long-term borrowings Repayments of long-term borrowings Increase/(decrease) in short-term borrowings Total cash flows related to financing activities Currency translation differences Changes in consolidated group Difference interest expenses and interest paid Other changes Total non-cash changes 2020 Other interest- bearing debts 769 Lease liabilities 1,053 114 (164) (96) (146) (33) 1,538 (2) 4 1,508 — (133) — (133) (7) 174 0 1301 297 Bonds 5,802 3,225 (500) — 2,725 — 329 13 — 342 Total 7,624 3,338 (797) (96) 2,446 (41) 2,041 12 134 2,147 December 31 8,869 2,130 1,217 12,216 1 Mainly related to new lease agreements The total cash outflow related to lease liabilities amounted to EUR 199 mn (2020: EUR 157 mn). Financing commitments provided to related parties are detailed in Note 35 – Related parties. As of December 31, 2021, the Group had available EUR 4,415 mn of undrawn committed borrowing facili- ties that can be used for future activities without any re- strictions (December 31, 2020: EUR 4,332 mn). 27 Contingent liabilities OMV recognizes provisions for litigations if these are more likely than not to result in obligations. Manage- ment is of the opinion that litigations, to the extent not covered by provisions or insurance, will not materially affect the Group’s financial position. The production facilities and properties of all Group companies are subject to a variety of environmental protection laws and regulations in the countries where they operate. The estimated cost of known environ- mental obligations has been provided in accordance with the Group’s accounting policies. Provisions for de- commissioning and restoration are recognized if an ob- ligation exists at the statement of financial position date. Management believes that compliance with current laws and regulations and future more stringent laws and regulations will not have a material negative impact on the Group’s results, financial position or cash flows in the near future. In May 2009, OMV signed an agreement with the sellers Crescent Petroleum International Limited (Cres- cent) and Dana Gas PJSC (Dana) to acquire a 10% share in Pearl Petroleum Company Limited (Pearl), a company that holds a contract over and operates Khor Mor and Chemchemal gas fields in the Kurdistan Re- gion of Iraq. The agreement included contingent pay- ments to be made by OMV which are dependent on fur- ther reserves determinations (Earn Out Payments). The reserves determinations will have to be made by a jointly appointed independent expert. In this connection, in May 2019, OMV received an in- voice from Crescent and Dana amounting to approxi- mately USD 241 mn and later unsubstantiated and re- jected allegations of damages in an amount of up to more than one billion USD. OMV rejected the invoice due to at the time pending independent expert determi- nation before the International Chamber of Commerce (ICC) and two arbitrations before the London Court of International Arbitration (LCIA): one arbitration under 180 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS the Joint Venture Agreement (JVA) regarding inter alia the non-approval of Chemchemal and Khor Mor Field Development Plans (FDPs) by OMV (JVA Arbitration) and secondly under the Share Sales Agreement (SSA) regarding Earn Out Payments mentioned above and re- sidual demands for alleged unjustified enrichment (SSA Arbitration). In Februay 2020, a second independent expert determination was initiated by Crescent and Dana before the ICC in respect of another revision of the Chemchemal FDP. The two independent expert de- terminations before the ICC have been decided in favor of OMV and concluded that the respective Chemche- mal FDP’s were not compliant with the criteria in the JVA. In December 2021, the LCIA also ruled in OMV’s favor in respect of JVA Arbitration and all claims from Crescent and Dana against OMV in respect of dam- ages under the JVA were rejected. The SSA Arbitration is in progress.Depending on further progress of the SSA arbitration proceedings and not yet commenced reserve determinations under the SSA, a contingent payment could potentially arise; however, such event is not deemed probable at this stage, claims for unjusti- fied enrichment are deemed even less probable. OMV’s position is further strengthened by the recent LCIA decision in JVA Arbitration in favor of OMV. Therefore, no provision has been recognized in OMV’s Group Financial Statements. Furthermore, at the date of these financial statements, a reliable estimate of the potential additional payment, if any, cannot be made. On April 16, 2020, the Bulgarian Commission for Pro- tection of Competition announced the initiation of an in- vestigation regarding the determination of the prices on fuel market. OMV Bulgaria EOOD is subject to this in- vestigation, among other major manufacturers and re- tailers on Bulgarian market. During 2020 two requests of providing information were received from authorities and the responses were submitted in due time. There were no additional requests from authorities in 2021, but the investigation is not yet finalized. The sanctions for antitrust infringements are up to 10% of the total company’s turnover of the respective undertaking for the financial year prior to the sanctioning decision. At the date of these financial statements,OMV is not able to evaluate the outcome of the investigation and no provision was recorded in this respect. As of December 31, 2021, one other proceeding was pending against OMV related to local service contrac- tors in one of the subsidiaries. OMV’s share of claimed amount is around USD 330 mn. Management currently does not believe that any of the alleged matters will have a material effect on the financial position or re- sults of operations. However, this assessment is based on assumptions deemed reasonable by management including those about future events and uncertainties. The outcome of these matters is ultimately uncertain, such that unanticipated events and circumstances might occur that might cause management to change those assumptions and give rise to a material adverse effect on our financial position in the future. 181 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 28 Risk management Capital risk OMV’s financial steering framework is built upon the principles of operational efficiency, capital efficiency, fi- nancing efficiency and sustainable portfolio manage- ment. With the focus on strengthening OMV’s balance sheet, delivering a positive free cash flow and growing its profitability, the financial steering framework repre- sents sustainable, risk-monitored and future-oriented value creation for OMV and its stakeholders. OMV manages its capital structure to safeguard its cap- ital base in order to preserve investor, creditor and mar- ket confidence, as well as to provide a sustainable fi- nancial foundation for the future operational develop- ment of the Group. OMV’s financing strategy focuses on cash flow and financial stability. Principal targets are a positive free cash flow after dividends and a strong investment grade credit rating on the basis of a healthy balance sheet and a long-term gearing ratio, excluding leases, of below 30%. Capital Management – key performance measures In EUR mn (unless otherwise stated) Bonds Other interest-bearing debts1 Debt excluding leases Cash and cash equivalents2 Net Debt excluding leases Equity Gearing Ratio excluding leases in % 2021 8,070 1,765 9,835 5,064 4,771 2020 8,869 2,130 10,999 2,869 8,130 21,996 19,899 22 41 1 Including other interest-bearing debts that were reclassified to liabilities associated with assets held for sale 2 Including cash and cash equivalents that were reclassified to assets held for sale Liquidity risk For the purpose of assessing liquidity risk, yearly budg- eted operating and financial cash flows of the Group are monitored and analyzed on a monthly basis. Thus, every month the Group generates a forecasted net change in liquidity which is then compared to the total month end balances of money market deposits and loans as well as maturities of the current portfolio and the available liquidity reserves of the same month. This analysis provides the basis for financing decisions and capital commitments. To ensure that OMV Group remains solvent at all times and retains the necessary financial flexibility, liquidity reserves in the form of committed credit lines and short term uncommitted money market lines are maintained. As of December 31, 2021, the average weighted ma- turity of the Group’s debt portfolio (excluding lease lia- bilities) has been 5.1 years (as of December 31, 2020: 5.3 years). OMV Group’s operational liquidity management is done centrally via a cash pooling system, which enables opti- mum use of existing cash and liquidity reserves to the benefit of every individual member of cash pooling sys- tem and therefore the Group as a whole. Details of OMV Group’s financial liabilities are shown in Note 24 – Liabilities. Market risk Derivative and non-derivative instruments are used to manage market price risks resulting from changes in commodity prices, foreign exchange rates and interest rates, which could have a negative effect on assets, lia- bilities or expected future cash flows. Hedges are generally placed in the legal entities where the underlying exposure exists. When certain condi- tions are met, the Group may elect to apply IFRS 9 hedge accounting principles in order to recognize the offsetting effects on profit or loss of changes in the fair value of the hedging instruments at the same time as the hedged items. Derivatives are only used for economic hedging pur- poses and not as speculative investments. However, where derivatives are not designated as hedging instru- ments (i.e. hedge accounting is not applied), they are valued through profit or loss for accounting purposes. The tables hereafter show the fair values of derivative financial instruments together with their notional amounts. The notional amount, recorded gross, is the 182 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS amount of a derivative’s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of the transactions out- standing at the year-end and are not indicative of either the market risk or the credit risk. Nominal and fair value of derivative financial instruments In EUR mn 2021 Fair value assets Fair value liabilities Nominal 2020 Fair value assets Fair value liabilities Nominal Commodity price risk Oil incl. oil products Gas Power Commodity hedges (designated in hedge relation- ship)1 536 101 252 20 1 377 (35) (57) (1) 515 31 213 889 398 (93) 759 Oil incl. oil products Gas Power Other2 Commodity hedges (valued at fair value through profit or loss) Foreign currency risk USD SEK Foreign currency hedges (designated in hedge rela- tionship)1 USD NOK NZD RON SEK Other Foreign currency hedges (valued at fair value through profit or loss) Interest rate risk Interest rate hedges 5,233 32,640 849 285 2 3,586 260 364 (50) 6,305 (3,418) 20,305 209 334 (492) (0) 39,008 4,213 (3,960) 27,152 2,480 (2,417) 183 161 344 1,685 1,163 — — — 169 3,017 — 0 0 3 6 — — — 0 9 (6) (2) 168 143 (8) 311 (5) (11) — — — (1) 793 272 69 5 44 108 (17) 1,290 9 6 14 17 4 1 0 — 1 22 (1) — (1) (1) (0) (0) (0) (0) (0) (1) 109 — (1) 113 0 (4) 30 3 24 57 (71) (7) (14) (93) 445 1,932 5 98 (386) (1,996) (6) (29) 1 Including inefficient part of hedges designated in a hedging relationship 2 Includes derivatives for European Emission Allowance The Group’s hedging portfolio disclosed in the Con- solidated Statement of Changes in Equity relates to the following hedging instruments: 183 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Cash flow hedging – Impact of hedge accounting In EUR mn Forecast purchases Forecast sales Foreign cur- rency, firm commitments Foreign cur- rency, other Commodity price risk Foreign currency risk Interest rate Interest rate risk thereof cost of hedging reserve Total 2021 26 31 531 (115) — — 8 (14) 0 2 65 403 — — (237) (5) (72) 65 — 11 243 (9) n.a. (3) — (176) n.a. — — — — 0 4 — (0) (5) (57) (6) 2 230 — — — — — (9) — 5 39 — (7) 364 (62) 2020 — 10 (6) (353) n.a. (0) — 0 0 44 305 — 16 (359) n.a. Hedge ineffectiveness recog- nized in profit or loss 1 (10) Cash flow hedge reserve as of January 1 (net of tax) Gains/(losses) of the period recognized in OCI Amounts reclassified to the in- come statement Amounts reclassified to bal- ance sheet Tax effects Cash flow hedge reserve as of December 31 (net of tax) Cash flow hedge reserve as of January 1 (net of tax) Gains/(losses) of the period recognized in OCI Amounts reclassified to the in- come statement Amounts reclassified to the in- come statement because the hedged future cash flows no longer expected to occur Amounts transferred to cost of non-financial item Tax effects Cash flow hedge reserve as of December 31 (net of tax) thereof discontinued hedges 3 (24) 40 (8) 26 — — 5 31 57 — 62 — — — — Hedge ineffectiveness recog- nized in profit or loss (2) 2 Reserve for unrealized exchange gains/losses for net investment hedge1 In EUR mn Reserve as of January 1 (net of tax) Valuation of the USD loans Tax effects Reserve as of December 31 (net of tax) 1 Included in currency translation differences within other comprehensive income 184 — — (21) n.a. (0) (2) — (0) 102 (6) 65 57 8 — — 0 — — (16) — — n.a. 0 — Foreign currency risk 2021 7 (16) 4 (5) 2020 — 10 (2) 7 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS At 31 December 2021 and 31 December 2020, the Group held the following cash flow and net investment hedging relationships. The table shows the profile of the timing (maturity) of the nominal amount of the hedg- ing instruments. Impact of hedge accounting on the statement of financial positions In EUR mn Forecast purchases Forecast sales Net invest- ment hedge Foreign cur- rency, other Commodity price risk Foreign currency risk Interest hedges Interest rate risk 176 176 — 218 196 22 713 608 106 398 93 541 415 126 56 93 2021 191 — 191 n.a. n.a. 2020 176 — 176 n.a. n.a. 344 344 — 0 8 311 311 — 14 1 109 12 97 — 1 113 — 113 0 4 Total 1,533 1,139 394 398 102 1,358 921 437 71 98 Nominal Value Below one year More than one year Fair value – assets Fair value – liabilities Nominal Value Below one year More than one year Fair value – assets Fair value – liabilities Above shown Fair value assets and liabilities are pre- sented in Line item Other financial assets and Other financial liabilities in OMV’s Consolidated statement of financial position. Commodity price risk European Emission Allowances All OMV’s business segments are exposed to fluctua- tion in the price of carbon under the EU Emission Trad- ing Scheme (ETS). European Emission Allowance pur- chases are always executed in due time and it is OMV’s highest priority to fulfill all legal obligations un- der the ETS. OMV monitors price risks from emission allowances and manages it using derivative instru- ments (spots and forwards) traded billaterally on the secondary market (so-called over-the-counter or OTC transactions). Exploration & Production In order to protect the Group's result and cash flow from the potential negative impact of falling oil and gas prices as well as to ensure sufficient liquidity headroom in order to enable the Group’s growth strategy, OMV uses financial derivatives to secure favorable oil and gas prices from time to time. When doing so, OMV en- ters into derivative positions selling forward parts of its future production, thereby locking in future oil and gas prices and reducing exposure to market prices in the periods for which the hedges are concluded. OMV Group adopts a flexible approach to monetize hedges prior to their maturity with the aim to generate a positive contribution to the results. In 2021, oil and gas derivative contracts were con- cluded, resulting in a total negative Operating result im- pact of EUR (675) mn (oil: EUR (82) mn, gas: EUR (594) mn). In 2020, oil and gas derivative contracts were entered into, resulting in a total negative Operating result im- pact of EUR (37) mn (oil: EUR (30) mn, gas: EUR (7) mn). For these derivative instruments no hedge accounting was applied. Refining & Marketing Commodity price risk management in Refining and Marketing refers to analysis, assessment, reporting and hedging of market price risk exposure arising from non- trading and trading activities, covering refining (refinery margin, inventories up to a defined threshold) as well as oil and gas marketing activities (marketing margin, inventories up to a defined threshold) and producing power (spark spreads) in addition to proprietary trading positions. 185 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Limited proprietary trading activities are performed for the purpose of creating market access within the oil, power and gas markets. In Gas trading, OTC swaps, options, futures and forwards are used to hedge pur- chase and sales price risks. The aim is to hedge the price risk on inventory fluctuations and the differences in terms and conditions of purchases and sales. The risk management strategy is to harmonize the pric- ing of product sales and purchases in order to remain within an approved range of priced stocks at all times, by means of undertaking stock hedges so as to miti- gate the price exposure. The range is a defined maxi- mum deviation from the target stock level, as defined in the Annual Plan for hedging activities. In Refining and Marketing, derivative instruments are used for both hedging selected product sales and re- ducing exposure to price risks on inventory fluctuations. Crude oil and product swaps are used to hedge the re- fining margin (crack spread), which is the difference be- tween crude oil prices and bulk product prices. Furthermore, in respect of refinery margin hedges, crude oil and products are hedged separately, with the aim to protect future margins. Endorsed mandates are documented and defined within the Annual plan for hedging activities. Furthermore, exchange-traded oil futures as well as OTC contracts (contracts for difference and swaps) are used to hedge short-term purchase and sales market price risks. Swaps do not involve an investment at the time the contracts are concluded; settlement normally takes place at the end of the quarter or month. The premiums on options are payable when the contract is concluded; where options are exercised, payment of the difference between strike price and average market price for the period takes place at contract expiration. Chemicals & Materials For the chemical production, some of the forecasted cracker feedstock purchases and finished product sales are hedged through refined oil products swaps. Cash flow hedge accounting is applied to those derivatives, except for the derivatives that are used to limit the price risk on the inventory held for immediate consumption. Contracts not designated as cash flow hedges are clas- sified as fair value through profit or loss and stated at fair value. Borealis hedges its forecasted electricity purchases us- ing electricity swaps. Cash flow hedges in Refining & Marketing and Chemicals & Materials In the Refining & Marketing and Chemical & Materials Business, OMV is especially exposed to volatile refin- ing margins and inventory risks. In order to mitigate those risks corresponding hedging activities are taken, which include margin hedges, stock hedges, feedstock and commodity hedges. Additionally, cash flow hedge accounting is applied to forecast electricity purchases and forecast natural gas purchases. Also a part of the hedges done for future sales and purchases of the crackers has been designated as cash flow hedge. In case of refinery margin hedges only the product crack spread is designated as the hedged item, buying Brent Crude Oil on a fixed basis and selling the product on a fixed basis. The crack spread for different prod- ucts is a separately identifiable component and can therefore represent the specific risk component desig- nated as hedged item. There are limits set for the vol- ume of planned hedged sales to avoid over hedging. In 2020 the risk management objective for the refinery margin hedges changed and therefore most of the hedging relationships were discontinued.The accumu- lated gains and losses remained in the cash flow hedg- ing reserve upon realization of the hedged item. In ad- dition hedge accounting related to forecast sales of specific products has been terminated because cash flows have no longer been expected to occur due to the impacts of the COVID-19 pandemic. The accumulated gains and losses were immediately reclassified to profit or loss. Stock hedges are used to mitigate price exposure whenever actual priced stock levels deviate from target levels. Forecast sales and purchase transactions for crude oil and oil products are designated as the hedged item. Historically, Brent crude oil has formed the largest risk component of the stock price, however in some cases also oil products are used for stock hedges. In such cases, Platts / Argus product price is used as the risk component. Other components like product crack spreads and other local market cost components are not hedged. The hedging relationships are established with a hedge ratio of 1:1 as the underlying risk of the commodity de- rivatives are identical to the hedged risk components. Hedge ineffectiveness can arise from timing differential between derivative and hedged item delivery and pric- ing differentials (derivatives are valued on the future 186 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS monthly average price (or other periods) and sales/pur- chases on the pricing at the date of transaction/deliv- ery). For ‘Forecast purchases’ the hedge ineffectiveness is included in line item ‘Purchases (net of inventory varia- tion)’ in OMV’s Consolidated income statement. The hedge ineffectiveness and recycling of ‘Forecast sales’ for hedges where a risk component of the non-financial item is designated as the hedged item in the hedging relationship is shown in line item ‘Sales revenues’ in OMV’s Consolidated income statement. Foreign exchange risk management OMV operates in many countries and currencies, there- fore industry-specific activities and the corresponding foreign exchange rate risks need to be analyzed pre- cisely. The USD represents OMV’s biggest risk expo- sure, in the form of movement of the USD against the EUR and also against other main OMV Group curren- cies (RON, RUB, NOK, NZD and SEK). Movements of these currencies against the EUR are also important sources of risk. Other currencies have only a limited im- pact on cash flow and Operating result. The transaction risk on foreign currency cash flows is monitored on an ongoing basis. The Group’s long and short net position is reviewed at least on a semiannual basis and the sen- sitivity is calculated. This analysis provides the basis for management of transaction risks on currencies. Since OMV produces commodities that are mainly traded in USD, OMV Group has an economic USD long position. FX options, forwards and swaps are mainly used to hedge foreign exchange rate risks on outstanding re- ceivables and payables. The market value of these in- struments will move in the opposite direction to the value of the underlying receivable or liability if the rele- vant foreign exchange rate changes. When certain con- ditions are met, the Group may elect to apply IFRS 9 hedge accounting principles in order to recognize the offsetting effects on profit or loss of changes in the fair value of the hedging instruments at the same time as and the hedged items. Certain hedges which refer to a forecasted currency position are therefore classified as cash flow hedges and stated at fair value through other comprehensive income. Translation risk is also monitored on an ongoing basis at Group level, and the risk position is evaluated. Translation risk arises on the consolidation of subsidiar- ies with functional currencies different from EUR. The largest exposures result from changes in RON, USD, RUB, NOK, and SEK denominated assets against the EUR. A foreign currency exposure arises from the Group’s long-term net investment in its subsidiaries, associated companies and joint ventures in foreign currencies. Foreign exchange translation differences relating to these net investments are recognized in other compre- hensive income. Borealis has hedged part of its invest- ment in an associated company which has USD as its functional currency, by designating certain external loans in USD as hedges of the Group’s investments in its foreign operations. The hedged risk in the net invest- ment hedge is the risk of a weakening USD against the EUR that will result in a reduction in the carrying amount of the Group’s net investment in the associated company in USD. The EUR/USD impact on the meas- urement of the loan is recognized in other comprehen- sive income. To assess hedge effectiveness, the Group determines the economic relationship between the hedging instru- ment and the hedged item by comparing changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the investment in the foreign operation due to movements in the spot rate (the dollar-offset method). The Group’s policy is to hedge the net investment only to the extent of the debt principal. There is an economic relationship between the hedged item and the hedging instrument as the net investment creates a translation risk that will match the foreign ex- change risk on the USD borrowing. The Group has es- tablished a hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to the hedged risk component. Hedge ineffectiveness will arise when the amount of the investment in the foreign associated company becomes lower than the amount of the bor- rowing. Interest rate management To facilitate management of interest rate risk, OMV’s li- abilities are analyzed in terms of fixed and floating rate borrowings, currencies and maturities. Appropriate ra- tios for the various categories are established, and where necessary, derivative instruments are used to hedge fluctuations outside predetermined ranges. Interest rate swaps can be used to convert fixed rate debt into floating rate debt, and vice versa. In the year 2021 the impact of interest rate swaps has not been material (2020: no material impact). The hedge ineffectiveness and recycling of Interest rate swaps are both shown in line item ‘interest expenses’ in OMV’s Consolidated income statement. 187 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Interest rate benchmark reform (IBOR Reform) The Group is continuously evaluating contractual terms in respect of the London Inter-Bank Offered Rate (LI- BOR) transition exposures. Where necessary, agree- ments will be amended to provide for alternative bench- mark rates, which shall be in accordance with Loan Market Association (LMA) standard at the time, to apply in relation to the affected currencies. As per end of December 2021, for the undrawn mul- ticurrency EUR 1 bn Revolving Credit Facility (RCF) a drawdown waiver is in place for currencies where IBOR rates were discontinued as a Screen Rate from Decem- ber 31, 2021 (CHF,GBP,JPY). The RCF drawdown waiver shall cease to have effect if the Facility is amended to provide for alternative benchmark rates, which shall be in accordance with LMA standard at a time. In addition, a JPY loan tranche of EUR 38 mn has been successfully transitioned to Tokyo Overnight Av- erage Rate (TONAR). The Group considers that it is, in principle, exposed to uncertainties resulting from the interest rate benchmark reform in respect of its hedges of (3 month) USD LI- BOR interest risks related to the existence of two out- standing USD interest rate swaps, with a nominal amount of EUR 97 mn in total and a cross currency in- terest rate swap of EUR 38 mn. Their hedging period spans beyond 2021 when uncertainties about the exist- ence of the USD LIBOR rates arise. OMV Group ex- pects that the hedging instrument and the hedged risk of the hedged item will not change as a result of the re- form. However, any hedge ineffectiveness would be ac- counted for in the income statement. For further information in respect of IBOR reform see see Note 2 – Accounting policies, judgements and esti- mates. Impact of Interest Rate Benchmark Reform In EUR mn Non-derivative assets Loan receivable Non-derivative liabilities Loan liabilities Loan liabilities Derivatives Interest rate swap (designated in a hedge relationship) Interest rate swap (designated in a hedge relationship) Cross currency interest rate swap (valued at fair value through profit or loss) Impact of Interest Rate Benchmark Reform In EUR mn Undrawn commitments Financing commitments provided Committed borrowing facilities - available RCF Benchmark Carrying Value (notional amount for derivatives) USD LIBOR USD LIBOR JPY LIBOR USD LIBOR USD LIBOR JPY LIBOR to USD LIBOR 987 189 38 44 53 38 USD LIBOR Multicurrency 251 1,000 Sensitivity analysis For open hedging contracts sensitivity analysis is per- formed to determine the effect of market price fluctua- tions (+/–10%) on market value. The sensitivity of OMV Group’s overall earnings differs from the sensitivity shown below, since the contracts concluded are used to hedge operational exposures. The effect of market price fluctuations on profit or loss or other comprehensive income depends on the type of derivative used and on whether hedge accounting is applied. Market price sensitivity for derivatives to which cash flow hedge accounting is applied is shown in the sensitivity table for other comprehensive income. Sen- sitivity to market price fluctuations for all other open de- rivatives is shown in the sensitivity tables for profit be- fore tax. 188 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Sensitivity analysis for open commodity derivatives affecting profit before tax In EUR mn Oil incl. oil products Gas Power Other1 Total 1 Includes derivatives for European Emission Allowance 2021 2020 Market price +10% Market price (10)% Market price +10% Market price (10)% (25) (2) (43) 65 (4) 25 2 43 (65) 5 (14) (7) (20) 23 (18) 14 5 20 (23) 17 Sensitivity analysis for open commodity derivatives affecting other comprehensive income In EUR mn Oil incl. oil products Gas Power Commodity hedges (designated in a hedge relationship) 2021 2020 Market price +10% Market price (10)% Market price +10% Market price (10)% 3 3 57 64 (3) (3) (57) (64) (32) (2) 24 (10) 32 2 (24) 10 For financial instruments, sensitivity analysis is per- formed for changes in foreign exchange rates. On Group level, the EUR-RON sensitivity not only includes the net RON exposure versus the EUR but also the net RON exposure versus the USD, since the USD-RON exposure can be split into a EUR-RON and EUR-USD exposure. The same is true for the EUR-NOK, EUR- SEK and EUR-NZD exposure. Sensitivity analysis for financial instruments affecting profit before tax1 In EUR mn EUR-RON EUR-USD EUR-NZD EUR-NOK EUR-SEK 2021 2020 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR (2) (114) (4) 23 (6) 2 114 4 (23) 6 (11) (27) (4) (8) (0) 11 27 4 8 0 1 Refers only to financial instruments and is not the same as the Group’s overall foreign exchange rate sensitivity in terms of operating result 189 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Sensitivity analysis for financial instruments affecting other comprehensive income1 In EUR mn EUR-USD EUR-SEK 1 Including sensitivity of the net investment hedge 2021 2020 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 39 (16) (39) 16 33 (15) (33) 15 OMV Group holds financial assets whose market value would be affected by changes in interest rates. The ef- fect of an interest rate increase of 0.5 percentage points on the financial assets measured at FVTPL as of December 31, 2021, would have been a EUR (4) mn reduction in the market value of these financial assets (2020: EUR (9) mn). A 0.5 percentage points fall in the interest rate as of December 31, 2021 would have led to an increase in market value of EUR 4 mn (2020: EUR 9 mn). OMV regularly analyzes the impact of interest rate changes on interest income and expense from floating rate deposits and borrowings. Currently the effects of changes in interest rates are not considered to be a material risk. Credit risk management The main counterparty credit risks are assessed and monitored at Group level and Segment level using pre- determined criteria and limits for all counterparties, banks and security providers. On the basis of a risk as- sessment, counterparties, banks and security providers are assigned a credit limit, an internal risk class and a specific limit validity. The risk assessments are re- viewed at least annually or on an ad-hoc basis. The credit risk processes are governed by guidelines at OMV Group level stipulating the group-wide minimum requirements. The main counterparties with contracts involving derivative financial instruments have invest- ment grade credit ratings. OMV uses commercial trade insurance for parts of its receivables in some business areas to mitigate risk. Based on the high economic un- certainty resulting from the COVID-19 pandemic, spe- cial attention is paid to early warning signals like changes in payment behavior. Credit risk is the risk that OMV Group’s counterparties will not meet their obligation under a financial instru- ment or customer contract, leading to a financial loss. The Group is exposed to credit risk arising from credit exposures with customer accounts receivables (see Note 18 – Financial assets), from its operating activities as well as from its financial activities such as financial investments, including deposits with banks and finan- cial institutions (see Note 26 – Statement of cash flows), foreign exchange transactions and other finan- cial instruments (see Note 18 – Financial assets). 190 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 29 Fair value hierarchy Fair value hierarchy of financial assets1 and net amount of assets and liabilities held for sale at fair value In EUR mn Trade receivables Investments in other companies Investment funds Bonds Derivatives designated and effective as hedging instruments Other derivatives Loans Other sundry financial assets2 Net amount of assets and liabilities associated with assets held for sale Total Trade receivables Investments in other companies Investment funds Bonds Derivatives designated and effective as hedging instruments Other derivatives Loans Other sundry financial assets2 Net amount of assets and liabilities associated with assets held for sale Total Carrying amount Valued at amortized cost Valued at fair value Fair value level Total Level 1 Level 2 Level 3 Total 4,260 — — 63 258 17 30 — — — 2,015 398 4,220 — 4,518 17 30 63 398 4,220 2,015 1,703 432 2,135 n.a. 8,041 354 5,709 354 13,751 3,245 — — 64 — — 1,720 71 15 35 — 71 2,502 — 3,316 15 35 64 71 2,502 1,720 1,313 744 2,058 2021 2020 — — 30 — — 40 — — — 70 — — 35 — — 69 — — 258 — — — 398 4,180 — — 17 — — — — — 258 17 30 — 398 4,220 — — 432 432 (23) 4,814 377 826 354 5,709 71 — — — 71 2,433 — — 15 — — — — — 71 15 35 — 71 2,502 — — 744 744 n.a. 6,343 98 3,536 98 9,878 — 104 98 2,672 — 759 98 3,536 1 Excluding assets held for sale 2 Other sundry financial assets at fair value include an asset from reserves redetermination rights related to the acquisition of interests in the field Yuzhno Russ- koye, 2020 included in addition a contingent consideration from the divestments of the 30% stake in the field Rosebank and of OMV (U.K.) Limited. Please see Note 18 – Financial assets – for further details. 191 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Fair value hierarchy of financial liabilities1 In EUR mn Carrying amount Valued at amortized cost Valued at fair value Fair value level Total Level 1 Level 2 Level 3 Total 2021 4,860 8,070 1,018 1,765 — — — — 4,860 8,070 1,018 1,765 — 102 102 — 3,977 3,977 876 16,588 — 4,079 876 20,667 4,304 8,869 1,084 1,983 — — 2020 — — — — 4,304 8,869 1,084 1,983 98 98 2,418 2,418 1,033 17,272 — 2,516 1,033 19,788 — — — — 17 42 — 59 — — — — — 70 — 70 — — — — 85 3,935 — 4,019 — — — — 98 2,349 — 2,446 — — — — — — — — — — — — — — — — — — — — 102 3,977 — 4,079 — — — — 98 2,418 — 2,516 Trade payables Bonds Lease liabilities Other interest bearing debt Liabilities on derivatives designated and effective as hedging instruments Liabilities on other derivatives Other sundry financial liabilities Total Trade payables Bonds Lease liabilities Other interest bearing debt Liabilities on derivatives designated and effective as hedging instruments Liabilities on other derivatives Other sundry financial liabilities Total 1 Excluding liabilities associated with assets held for sale Financial assets and liabilities for which fair values are disclosed1 In EUR mn Fair Value Fair value level Level 1 Level 2 Level 3 63 63 8,586 1,742 10,328 64 64 9,652 2,002 11,654 — — 8,586 — 8,586 2020 — — 9,352 — 9,352 63 63 — 1,742 1,742 64 64 300 2,002 2,302 2021 — — — — — — — — — — Bonds Financial assets Bonds Other interest bearing debt Financial liabilities Bonds Financial assets Bonds Other interest bearing debt Financial liabilities 1 Excluding assets and liabilities that were reclassified to held for sale 192 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 30 Offsetting of financial assets and financial liabilities Financial assets and financial liabilities are offset only when the Group has a current and legally enforceable right to set-off the recognized amounts and when there is an intention to settle on a net basis or realize the as- set and settle the liability simultaneously. The tables hereafter show the carrying amounts of rec- ognized financial assets and financial liabilities that are subject to various netting arrangements. The net col- umn would be on the Group’s statement of financial po- sition, if all set-off rights were exercised. OMV enters in the normal course of business into vari- ous master netting arrangements in the form of Interna- tional Swaps and Derivatives Association (ISDA) agreements or European Federation of Energy Traders (EFET) agreements or other similar arrangements. During 2021 OMV has updated its assessment of IAS 32.42 netting criteria further to a legal assessment of the major agreements in place. Offsetting of financial assets In EUR mn Financial instruments (gross) Note Amounts set off in the statement of financial position Financial instruments in the statement of financial position (net) Liabilities with right of set-off (not offset) 21,462 6,998 2,231 30,691 (16,844) (2,480) (97) (19,420) 2021 4,619 4,518 2,135 11,271 2,573 3,325 2,058 7,955 2020 2,573 3,316 2,058 7,947 — (9) — (9) (1,421) (107) (104) (1,633) (2,023) (1,298) (104) (3,424) Derivative financial instruments Trade receivables Other sundry financial assets Total Derivative financial instruments Trade receivables Other sundry financial assets Total 18 18 18 18 18 18 Offsetting of financial liabilities In EUR mn Financial instruments (gross) Note Amounts set off in the statement of financial position Financial instruments in the statement of financial position (net) Assets with right of set-off (not offset) Derivative financial instruments Trade payables Other sundry financial liabilities Total Derivative financial instruments Trade payables Other sundry financial liabilities Total 24 24 24 24 24 24 20,922 7,340 973 29,235 (16,844) (2,480) (97) (19,420) 2,516 4,313 1,033 7,861 — (9) — (9) 2021 4,079 4,860 876 9,815 2020 2,516 4,304 1,033 7,853 (1,421) (107) (104) (1,633) (2,024) (1,298) (103) (3,424) Net 3,197 4,411 2,031 9,639 550 2,018 1,954 4,522 Net 2,657 4,753 772 8,182 492 3,006 930 4,428 193 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 31 Result on financial instruments Result on financial instruments In EUR mn Financial instruments at fair value through profit or loss Equity instruments designated as at fair value through other comprehensive income Amount Financial assets at amortized cost Financial liabilities at amortized cost (1,050) (1,050) (9) — (1,059) (1,050) 19 161 (334) 15 (33) (1) (16) — — (4) 15 (33) — — (189) (22) 111 (10) 101 19 177 (280) (62) (24) (5) (10) 111 — 111 — — 0 (62) (24) — — (183) (85) 2021 2020 — — — 19 — — — — — — 19 — — — 19 — — — — — — 19 — (9) (9) — 160 — — — (0) — — — — — — (172) — — — (16) 159 (188) — (10) (10) — 165 — — — (4) — — — — — 3 (168) — — — (10) 161 (175) Fair value changes of financial assets and derivatives Net impairment losses on financial assets Result on financial instruments within operating result Dividend income Interest income Interest expense Fair value changes of FX derivatives Financial charges for factoring and securitization Impairments of financial instruments, net Other Result on financial instruments within financial result Fair value changes of financial assets and derivatives Net impairment losses on financial assets Result on financial instruments within operating result Dividend income Interest income Interest expense Fair value changes of FX derivatives Financial charges for factoring and securitization Impairments of financial instruments, net Other Result on financial instruments within financial result The interest expense not allocated mainly referred to the unwinding of provisions. For further details see Note 11 – Net financial result. 194 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 32 Share based payments Long Term Incentive (LTI) plans LTI plans with similar conditions are granted annually to the Executive Board and selected senior managers in the Group. At vesting date, shares will be granted to the participants. The number of shares is determined depending on the achievement of defined performance criteria. The defined performance criteria may not be amended during the performance period of the LTI plans. However – in order to maintain the incentivizing character of the program – the Remuneration Commit- tee will have discretion (until LTI Plan 2020 for the Ex- ecutive Board) to adjust the threshold/ target/maximum levels of the free cash flow in case of material changes in external factors such as oil and gas prices. The ad- justment is possible in both directions and will be deter- mined by the Remuneration Committee. The Executive Board has the discretion to adjust the thresholds/tar- gets/maximum levels of the free cash flow for Senior Managers accordingly. Disbursement is made in cash or in shares. Executive Board members and senior managers as active participants of the plans are re- quired to build up an appropriate volume of shares and to hold those shares until retirement or departure from the company. For senior managers, if the LTIP eligibil- ity lapses, but they are still in an active employment with the company, the shareholding requirement ex- pires when the last LTIP is paid out. The shareholding requirement is defined as a percentage of the annual gross base salary, for the Executive Board, and as a percentage of the respective Target LongTerm Incen- tive for the senior managers. Executive Board mem- bers have to fulfill the shareholding requirement within five years after the initial respective appointment. Until fulfillment of the shareholding requirement the dis- bursement is in form of shares whilst thereafter the plan participants can decide between cash or share settle- ment. As long as the shareholding requirements are not fulfilled the granted shares after deduction of taxes are transferred to a trustee deposit, managed by the Com- pany. For share-based payments the grant date fair values are spread as expenses over the three years perfor- mance period with a corresponding increase in share- holders’ equity. In case of assumed cash-settlements a provision is made for the expected future costs of the LTI plans at statement of financial position date based on fair values. In 2021 Borealis introduced a LTI plan, which is harmo- nized with the above described LTI Plan. The share- holding requirement is only applicable to the Executive Board members of Borealis and not to senior manag- ers. 195 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Long Term Incentive Plans Start of plan End of performance period Vesting date Shareholding requirement Executive Board Chairman Executive Board Deputy Chairman Other Executive Board members Senior managers Expected shares as of December 31, 2021 Maximum shares as of December 31, 2021 Fair value of plan (in EUR mn) as of December 31, 2021¹ Provision (in EUR mn) as of December 31, 2021¹ 1 Excluding incidental wage costs 2021 plan 01/01/2021 12/31/2023 03/31/2024 2020 plan 2019 plan 2018 plan 01/01/2020 12/31/2022 03/31/2023 01/01/2019 12/31/2021 03/31/2022 01/01/2018 12/31/2020 03/31/2021 200% of annual gross base salary 200% of annual gross base salary 200% of annual gross base salary 200% of annual gross base salary 175% of annual gross base salary 175% of annual gross base salary 175% of annual gross base salary 175% of annual gross base salary 150% of annual gross base salary 150% of annual gross base salary 150% of annual gross base salary 150% of annual gross base salary 75% of the respective Target Long Term Incentive 762,590 861,806 75% of the respective Target Long Term Incentive 225,897 467,641 75% of the respective Target Long Term Incentive 329,098 391,119 75% of the respective Target Long Term Incentive — — 36 9 11 5 16 12 — — Equity Deferral The Equity Deferral serves as a long-term compensa- tion instrument for the members of the Executive Board that promotes retention and shareholder alignment in OMV, combining the interests of management and shareholders via a long-term investment in restricted shares. The holding period of the Equity Deferral is three years from vesting. The plan also seeks to pre- vent inadequate risk-taking. The Annual Bonus is capped at 180% of the target An- nual Bonus (until 2017: 200% of the annual gross sal- ary). A minimum of one third of the Annual Bonus (until 2017: 50% of the granted Annual Bonus) is granted in shares. The determined bonus achievement is settled per March 31 following the period end whereby at the statement of financial position date the target achieve- ments and the share price is estimated (the latter on basis of market quotes). In case of major changes in external factors such as oil and gas prices the Remu- neration Committee can adjust the threshold, target and/or maximum levels (but not the criteria as such nor the vesting) for the Financial Targets of the Annual Bo- nus. The granted shares after deduction of taxes are transferred to a trustee deposit, managed by the Com- pany, to be held for three years. In 2021 expenses amounting to EUR 3 mn were rec- orded with a corresponding increase in equity (2020: EUR 1 mn). 196 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Personal investment held in shares1 Active Executive Board members Stern2 Pleininger Florey Skvortsova van Koten3 Former Executive Board members Seele Gangl4 Leitner Total — Executive Board Other senior managers Total personal investment 12/31/2021 12/31/2020 12/31/2019 12/31/2018 — 53,711 46,975 1,166 — 92,632 16,147 9,344 219,975 297,385 517,360 — 50,166 30,009 — — 99,309 12,527 15,244 207,255 326,030 533,285 — 45,032 24,351 — — 91,974 10,730 44,211 216,298 368,268 584,566 — 28,511 13,401 — — 70,890 — 65,245 178,047 299,997 478,044 1 Personal investment held in shares refer to open LTI plans as well as to Equity Deferral if shares are held in the OMV trustee deposit. 2 Alfred Stern joined the Executive Board effective April 1, 2021. 3 Martijn Arjen van Koten joined the Executive Board effective July 1, 2021. 4 Thomas Gangl took part in LTIP 2018 as a senior manager. In 2019 he took part in LTIP as both senior manager as well as Executive Board member. In LTIP 2020 he took part as Executive Board member. In 2021 he took part as both Executive Board member as well as senior manager. Total Expense In 2021 Borealis implemented a transitional LTI plan for 2021 and 2022 in order to bridge the cash gaps, that arise from migrating to the new three year plan, men- tioned in the section ‘Long Term Incentive (LTI) plans’. Transitional LTIP allowances for 2021 and 2022 are measuring similar KPI’s as the three year plan for that specific year only and are settled in cash. Expenses related to all share based payment transac- tions are summarized in the below table. Expenses related to share based payment transactions1 In EUR mn Cash settled Equity settled Total expenses arising from share based payment transactions 1 Excluding incidental wage costs 2021 2020 28 10 38 (7) 2 (5) 197 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Other Information 33 Average number of employees Average number of employees1 OMV Group excluding OMV Petrom Group and Borealis Group OMV Petrom Group Borealis Group2 OMV Group 2021 2020 6,939 8,852 7,753 23,544 7,471 11,790 1,813 21,074 1 Calculated as the average of the month’s end numbers of employees during the year 2 Due to the acquisition as of October 29, 2020, the average of the month´s end numbers for October – December has been taken into account for the calculation in 2020. The decrease of employees in OMV Group excluding OMV Petrom Group and Borealis Group was impacted by the sale of Gas Connect Austria. See Note 3 – Changes in group structure – for further details. The decrease related to OMV Petrom Group was a re- sult of divestments, outsourced activities and of reor- ganization and restructuring programs as a conse- quence of process optimization and cost efficiency measures. 34 Expenses Group auditor Expenses for services rendered by the Group auditor (including the international network in terms of section 271b UGB) comprised the following: Expenses for services rendered by the Group auditor (including the international network) In EUR mn 2021 2020 Audit of Group accounts and year-end audit Other assurance services Tax advisory services Other services Total Group auditor 3.55 0.53 0.56 0.07 4.70 thereof Ernst&Young Wirtschafts- prüfungsgesell- schaft m.b.H 1.51 0.31 — 0.01 1.84 thereof Ernst&Young Wirtschafts- prüfungsgesell- schaft m.b.H 1.64 0.56 — — 2.20 Group auditor 3.57 0.89 0.10 1.15 5.70 35 Related parties Under IAS 24, details of relationships with related par- ties and related enterprises not included in consolida- tion must be disclosed. Enterprises and individuals are considered to be related if one party is able to control or exercise significant influence over the business of the other. Österreichische Beteiligungs AG (ÖBAG), Vi- enna, holds an interest of 31.5% and Mubadala Petro- leum and Petrochemicals Holding Company L.L.C., (MPPH) Abu Dhabi, holds an interest of 24.9% in OMV Aktiengesellschaft; both are related parties under IAS 24. 198 In 2021, there were following arm's-length supplies of goods and services (including the granting of licences for the use of technologies of the Group) between the Group and equity-accounted companies, except for gas purchases from OJSC Severneftegazprom which are not based on market prices but on cost plus defined margin. OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Transactions with equity-accounted investments – Sales and Receivables In EUR mn Abu Dhabi Oil Refining Company Abu Dhabi Polymers Company Limited (Borouge) ADNOC Global Trading LTD Bayport Polymers LLC Borealis AG Borouge Pte. Ltd. EEX CEGH Gas Exchange Services GmbH Erdöl-Lagergesellschaft m.b.H. GENOL Gesellschaft m.b.H. Kilpilahden Voimalaitos Oy Société d'Intérêt Collectif Agricole par Actions Simplifiée de Gouaix (SICA de Gouaix) Société d'Intérêt Collectif Agricole Laignes Agrifluides (SICA Laignes Agrifluides) Trans Austria Gasleitung GmbH1 Total 2021 2020 Sales and other income Trade receivables Sales and other income Trade receivables 3 108 3 6 — 331 1 43 124 4 1 7 4 635 2 40 1 1 — 71 0 0 17 0 — 1 — 134 4 16 1 2 897 40 1 51 93 0 — — 10 1,116 1 22 1 1 — 37 0 0 13 0 — — 1 78 1 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria disposal group. Transactions with equity-accounted investments – Purchases and Payables In EUR mn 2021 2020 Purchases and services received Trade payables Purchases and services received Trade payables Abu Dhabi Polymers Company Limited (Borouge) Borealis AG Borouge Pte. Ltd. Chemiepark Linz Betriebsfeuerwehr GmbH1 Deutsche Transalpine Oelleitung GmbH EPS Ethylen-Pipeline-Süd GmbH & Co KG Erdöl-Lagergesellschaft m.b.H. GENOL Gesellschaft m.b.H. Kilpilahden Voimalaitos Oy Neochim AD2 OJSC Severneftegazprom PetroPort Holding AB Trans Austria Gasleitung GmbH3 Total 7 — 494 4 29 3 81 0 74 10 127 3 11 843 — — 108 0 2 — 63 — — 0 14 0 — 188 0 31 51 1 27 2 68 1 0 0 133 1 23 338 1 Chemiepark Linz Betriebsfeuerwehr GmbH was reclassified to held for sale in 2021, as part of the nitrogen business unit of Borealis. 2 Neochim AD was reclassified to held for sale in 2021, as part of the nitrogen business unit of Borealis. 3 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria Disposal Group. — — 64 0 2 — 27 — 0 — 12 0 2 106 199 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Dividends distributed from equity-accounted investments In EUR mn Abu Dhabi Petroleum Investments LLC Abu Dhabi Polymers Company Limited (Borouge) Bayport Polymers LLC Borealis AG Borouge Pte. Ltd. Deutsche Transalpine Oelleitung GmbH EEX CEGH Gas Exchange Services GmbH OJSC Severneftegazprom Pearl Petroleum Company Limited Società Italiana per l'Oleodotto Transalpino S.p.A. Trans Austria Gasleitung GmbH1 Dividend distributed from equity-accounted investments 1 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria Disposal Group. Other balances with equity-accounted investments In EUR mn Kilpilahden Voimalaitos Oy Bayport Polymers LLC Renasci N.V. SMATRICS GmbH & Co KG1 Loan receivables Kilpilahden Voimalaitos Oy Renasci N.V. Neochim AD2 Advance payments Freya Bunde-Etzel GmbH & Co. KG Other receivables Abu Dhabi Polymers Company Limited (Borouge) Bayport Polymers LLC Contract assets C2PAT GmbH & Co KG Bayport Polymers LLC Other payables Contract liabilities Erdöl-Lagergesellschaft m.b.H. 2021 — 1,876 21 — 42 1 1 17 30 1 9 1,999 2021 18 987 12 — 1,017 12 10 — 22 8 8 8 7 16 1 — 1 120 2020 5 — 21 108 — 1 1 14 25 1 16 191 2020 17 736 — 2 754 13 — 3 16 7 7 1 7 7 — 143 143 144 1 SMATRICS GmbH & CO KG was sold as of September 30, 2021. 2 Neochim AD was reclassified to held for sale in 2021, as part of the nitrogen business unit of Borealis. The loan receivables (including the related accrued in- terests) towards Bayport Polymers LLC stemmed from drawdowns under a member loan agreement with a to- tal value of EUR 1,236 mn. The undrawn financing commitments provided to Bayport Polymers LLC amounted to EUR 251 mn as of December 31, 2021 (December 31, 2020: EUR 407 mn). At the reporting date, financing commitments towards Kilpilahden Voimalaitos Oy amounted to EUR 16 mn (December 31, 2020: EUR 16 mn). The entitlements are dependent on the fulfilment of specific events, as defined in the underlying contracts. At year end 2021, the Group had further financing com- mitments to grant a convertible loan towards Renasci N.V. amounting to EUR 12 mn. The entitlements are dependent on the fulfilment of certain conditions of utili- sation, as defined in the underlying contract. The contract liabilities towards Erdöl-Lagergesellschaft m.b.H. are related to a long-term contract for rendering of services. 200 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS In 2020 the other payables towards Bayport Polymers LLC were related to an equity contribution. Government-related entities Based on the OMV ownership structure, the Republic of Austria has an indirect relationship with OMV via ÖBAG and is therefore, together with companies in which the Republic of Austria is a majority shareholder, considered a related party. OMV has transactions at arm´s length in the normal course of business mainly with Österreichische Post Aktiengesellschaft, VER- BUND AG, Österreichische Bundesbahnen-Holding Ak- tiengesellschaft, Bundesbeschaffung GmbH and their subsidiaries. As per May 31, 2021 OMV closed the transaction to sell its 51% stake in Gas Connect Austria to VERBUND AG. For more details see Note 3 – Changes in group structure. Moverover, as per September 30, 2021 OMV finalized the sale of its 40% share in SMATRICS GmbH & Co KG and its 40% share in E-Mobility Provide Aus- tria GmbH to VERBUNDAG. Furthermore, OMV founded together with Lafarge Perlmooser GmbH and VERBUND Energy4Business GmbH a joint venture for the joint planning and construction of a full-scale plant by 2030 to capture CO2 and process it into synthetic fuels, plastics and other chemicals. Additionally, OMV and VERBUND AG have a cooperation agreement re- lated to the photovoltaic plant in Lobau, Austria. In 2020 the strategic energy cooperation between OMV and VERBUND AG have started up the ground- mounted photovoltaic plant in Schönkirchen-Reyers- dorf, Austria. Via MPPH, OMV has an indirect relationship with the Emirate of Abu Dhabi, which is, together with the com- panies under control of Abu Dhabi also considered a related party. In 2021, there were supplies of goods and services for instance to Compañía Española de Petróleos, S.A. (CEPSA), Abu Dhabi National Oil Com- pany (ADNOC), NOVA Chemicals Corporation (NOVA) and ADNOC Trading Limited. On October 29, 2020 OMV acquired an additional 39% share in Borealis AG from Mubadala Investment Company (Abu Dhabi). Fur- thermore, OMV cooperates with ADNOC in several Ex- ploration & Production arrangements and closed strate- gic equity partnerships with ADNOC covering both the ADNOC Refining business and a Trading Joint Ven- ture. 201 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Key management personnel compensation Remuneration received by the Executive Board In EUR mn active members of the Executive Board as of December 31, 2021 former members of the Executive Board 2021 Short term benefits Fixed (base salary) Fixed (one-off payment) Variable (cash bonus)1 Benefits in kind Post employment benefits Pension fund contributions Termination benefits Share based benefits Variable (Equity Deferral 2020) Variable (LTIP 2018)2 Remuneration received by the Executive Board Stern3 Pleininger 1.77 0.69 0.69 — — 0.01 0.18 0.18 — — — — 0.75 — 1.01 0.01 0.19 0.19 — 1.09 0.32 0.76 Florey Skvortsova van Koten7 Seele8 Gangl9 Leitner12 — 1.38 2.55 0.30 0.65 1.77 0.76 — 0.97 0.054 0.19 0.19 — 0.90 0.27 0.63 0.58 0.545 0.16 0.106 0.14 0.14 — 0.11 0.11 — Total 9.12 4.30 0.54 4.09 0.20 1.08 0.14 — 0.50 0.00 0.03 — — — — — 0.03 0.0210 0.20 — — 1.08 0.02 0.41 5.17 0.29 — — 0.01 0.07 0.07 — — 1.10 — 1.44 0.01 0.28 0.28 — 2.48 — — 0.40 2.08 0.20 —11 — 0.41 1.30 3.88 0.87 3.05 2.86 1.63 0.37 5.31 0.90 0.41 15.39 1 The variable component relates to target achievement in 2020, for which bonuses were paid out in 2021 and included 50% of the cash payments due in 2020 under the Annual Bonus 2019 for the active Executive Board members in 2020 which were postponed to January 2021. 2 Including 50% of the cash payments due in 2020 under the LTIP 2017 for the active Executive Board members in 2020 (for the cash portion, if applicable) which have been postponed to January 2021. 3 Alfred Stern joined the Executive Board effectively April 1, 2021. 4 Including schooling costs and related taxes 5 Elena Skvortsova received a one-off payment in settlement of the variable remuneration demonstrably forfeited as a result of her move from Linde Group to OMV AG. 6 Including moving and rental costs and related taxes 7 Martijn van Koten joined the Executive Board effectively July 1, 2021. 8 Rainer Seele resigned from the Executive Board effectively August 31, 2021 and his contract ends on June 30, 2022. 9 Thomas Gangl resigned from the Executive Board effectively March 31, 2021. 10 Thomas Gangl received an annual leave compensation payment amounting to EUR 0.02 mn. 11 Thomas Gangl received a cash payment in the amount of EUR 0.11 mn based on the Senior Manager LTIP 2018. 12 Manfred Leitner resigned from the Executive Board effectively June 30, 2019. 202 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Remuneration received by the Executive Board In EUR mn 2020 active members of the Executive Board as of December 31, 2020 Seele Pleininger Florey Gangl6 Skvortsova8 0.50 2.27 1.30 0.79 1.34 former members of the Executive Board Leitner10 Davies11 Roiss12 — 1.12 — 1.10 0.75 0.70 0.58 0.31 — 0.333 0.83 0.01 0.28 — 0.58 0.01 0.19 — 0.56 0.054 0.18 0.28 0.90 0.41 0.49 0.19 0.52 0.18 0.53 0.29 0.24 0.28 0.255 0.10 —7 — 0.20 0.01 0.14 0.14 0.10 — — 0.199 0.08 0.08 — — — — 1.12 — — — 0.82 0.28 0.55 Total 7.33 3.44 0.33 3.29 0.27 0.86 0.86 3.20 1.35 1.85 — — — — — — 0.06 — 0.06 — — — — — — 0.27 — 0.27 Short term benefits Fixed (base salary) Fixed (functional allowance) Variable (cash bonus)1 Benefits in kind Post employment benefits Pension fund contributions Share based benefits Variable (Equity Deferral 2019) Variable (LTIP 2017)2 Remuneration received by the Executive Board 3.45 2.05 2.01 1.03 0.58 1.94 0.06 0.27 11.39 1 50% of the cash payments due in 2020 under the Annual Bonus 2019 for the active Executive Board members were postponed to January 2021. 2 50% of the cash payments due in 2020 under the LTIP 2017 for the active Executive Board members (for the cash portion, if applicable) have been postponed to January 2021. 3 Rainer Seele received a payment for the interim responsibility for "Marketing and Trading" until February 28, 2020. 4 Including schooling costs and related taxes 5 Including 50% of LTIP 2017 cash payments and additional value of transferred shares to fulfill the shareholding requirement. 6 Thomas Gangl joined the Executive Board effectively July 1, 2019. 7 Thomas Gangl received a cash payment in the amount of EUR 0.06 mn based on the Senior Manager LTIP 2017. 8 Elena Skvortsova joined the Executive Board effectively June 15, 2020. 9 Including moving and rental costs and related taxes 10 Manfred Leitner resigned from the Executive Board effectively June 30, 2019. 11 David C. Davies resigned from the Executive Board effectively July 31, 2016. 12 Gerhard Roiss resigned from the Executive Board effectively June 30, 2015. 203 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Remuneration received by top executives (excl. Executive Board)1 In EUR mn Salaries and bonuses Pension fund contribution Other post-employment benefits including termination benefits Share-based benefits Other long term benefits Remuneration received by top executives (excl. Executive Board)2 2021 2020 25.8 1.3 2.2 3.5 1.8 34.6 19.0 1.1 0.4 3.7 0.0 24.2 1 In 2021 there were on average 43 top executives (2020: 40) based on the months of service in the Group. 2 Including remuneration of Alfred Stern and Martijn van Koten in their function as Executive Board members in Borealis Group The members of the Executive Board and the members of the Supervisory Board are covered by directors and officers liability insurance (D&O) and criminal legal ex- penses insurance. A large number of other OMV em- ployees also benefit from these two forms of insurance, and the insurers levy lump-sum premiums, which are not specifically attributed to the Board members. See Note 32 – Shared based payments – for details on Long Term Incentive Plans and Equity Deferral. In 2021, remuneration expenses for the Supervisory Board amounted to EUR 0.6 mn (2020: EUR 0.6 mn). 36 Unconsolidated structured entities OMV is selling trade receivables in a securitization pro- gram to Carnuntum DAC, based in Dublin, Ireland. In 2021, OMV transferred trade receivables amounting in total to EUR 4,573 mn to Carnuntum DAC (2020: EUR 3,458 mn). As of December 31, 2021, OMV held seller participa- tion notes amounting to EUR 95 mn (2020: EUR 88 mn) and complementary notes amounting to EUR 89 mn (2020: nil) in Carnuntum DAC shown in other financial assets. As of December 31, 2021, the maximum exposure to loss from the securitization transaction was EUR 110 mn (2020: EUR 80 mn). The seller participation notes are senior to a loss re- serve and a third party investor participation. The com- plementary notes are senior to seller participation notes and are of the same seniority as the senior notes is- sued by the program. The risk retained by OMV Group is insignificant and therefore the trade receivables sold are derecognized in their entirety. The receivables are sold at their nominal amount less a discount. The dis- count was recognized in profit or loss and amounted in total to EUR 29 mn in 2021 (2020: EUR 21 mn). Inter- est income on the notes held in Carnuntum DAC amounted to EUR 2 mn in 2021 (2020: EUR 2 mn). In addition, OMV received a service fee for the debtor management services provided for the receivables sold. 204 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 37 Subsequent events On January 20, 2022, the government bill for the Eco Social Tax Reform Act passed the third reading of the National Parliament of Austria. The bill stipulates the reduction in corporate income tax rate from 25% to 24% in 2023 and further to 23% from 2024 onward. Had the new tax rates been substantially enacted as of December 31, 2021, the Group’s deferred tax assets would have decreased by EUR 42 mn. On February 2, 2022, Borealis Group has received a binding offer from EuroChem for the acquisition of Bo- realis’ nitrogen business including fertilizer, melamine and technical nitrogen products. The offer values the business on an enterprise value basis at EUR 455 mn. Borealis Group will initiate mandatory information and consultation procedures with employee representa- tives. The transaction is also subject to certain closing conditions and regulatory approvals, with closing ex- pected for the second half of 2022. Borealis Group will continue to focus on its core activities of providing inno- vative and sustainable solutions in the fields of polyole- fins and base chemicals and on the transformation to- wards a circular economy. On February 15, 2022, the Iraqi Federal Supreme Court passed the Judgment that the Kurdistan Regional Oil & Gas Law (KROGL) of 2007 violates certain Arti- cles of Iraq’s Constitution of 2005. The Judgment con- tradicts earlier analysis and also rulings. The Judgment challenges Kurdistan Regional Government’s (KRG’s) authority to enter into Oil and Gas Contracts with for- eign parties and grants the Federal Ministry of Oil a right to follow up with foreign parties the way forward for these Contracts entered into. It is unclear how the Federal Government and KRG will proceed in respect of the above and settle this dispute. OMV is in process of assessing the matter, and it is too early to determine any implications on OMV’s 10% shareholding in Pearl Petroleum Company Limited. On February 21, 2022, President Vladimir V. Putin of Russia signed decrees recognizing two pro-Russian breakaway regions in eastern Ukraine. Consequently, the European Union (EU), the United States of America (US) and the United Kingdom (UK) responded with tar- geted sanctions on Russian individuals and the Rus- sian financial system. As a direct consequence, Ger- many halted the certification process of Nord Stream 2. One day later, the US announced sanctions targeting Nord Stream 2 AG and its corporate officers. On February 24, 2022, Russia started a broad offen- sive in Ukraine with simultaneous attacks across vari- ous areas. The EU, the US and the UK imposed further sanctions including financing restrictions targeting cer- tain Russian banks and state-owned companies like Gazprom. The EU announced the resolution on enact- ment of additional and more severe sanctions for Rus- sia, specifically targeting inter alia the Russian banking system, Russian individuals and the energy and transport sectors. Gas supplies continued without inter- ruption in line with the existing contractual obligations. Russia continued the widespread attacks across Ukraine and intensified the attacks during the following days. The EU imposed sanctions against Vladimir Putin and Sergey Lavrov and announced further sanctions in- cluding but not limited to provision of loans and credits to certain listed banks and companies some of which are active in the oil business (like Gazprom Neft). The EU, the US and the UK decided to exclude seven banks from the SWIFT-System. On March 1, 2022, the Executive Board of OMV has decided to not further pursue negotiations with Gaz- prom on the potential acquisition of a 24.98% interest in the Achimov 4A/5A phase development in the Urengoy gas and condensate field and to terminate the Basic Sale Agreement dated October 3, 2018. Furthermore, OMV will review its involvement in the Nord Stream 2 Pipeline. In light of further sanctions, Russia announced counter- sanctions, in particular restrictions on dividend pay- ments to foreign shareholders in Russian companies. On March 4, 2022, the US, the EU and the UK imposed further property blocking sanctions on individuals and Russia enacted countersanctions including inter alia re- strictions on sales of shares open or closed joint-stock companies. Russia also announced property blocking sanctions against foreign individuals and companies. On March 5, 2022, the Executive Board of OMV took the decision not to pursue any future investments in Russia. The 24.99% interest in Yuzhno Russkoye will be subject to a strategic review. This review comprises all options including possibilities to divest or exit. As a consequence, OMV expects non-cash value adjust- ments of EUR 0.5 – 0.8 bn (as of December 31, 2021). In addition, OMV will recognize a non-cash value ad- justment charge of EUR 987 mn (loan plus accrued in- 205 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS terest as of December 31, 2021) due to the fact that re- ceivables from Nord Stream 2 AG may be unrecovera- ble. Overall, this means a non-cash value adjustment of EUR 1.5 to 1.8 billion that will impact the first quarter of 2022. OMV continues to monitor the escalating crisis between Russia and Ukraine and regularly reviews the potential further impact on our business activities and assets. While OMV does not have operations in Ukraine, OMV has business relationships with Russian entities and shareholdings in Russia. As of December 31, 2021, OMV reported the following net asset values related to Russian operations: Net assets In EUR mn Nord Stream 2 Loan Reserve Redetermination Rights1 JSC GAZPROM YRGM Development1 OJSC SEVERNEFTEGAZPROM1 Total Net Assets 1 related to Yuzhno Russkoye gas field in West Sibiria 2021 987 432 650 117 2,185 Disruptions in Russian commodity flows to Europe could result in further increases in European energy prices and accelerate the risk of cost inflation. OMV im- ported on average 7.34 TWh per month of natural gas under a long-term supply agreement with Gazprom to the German and Austrian gas hubs in 2021. From to- day’s point of view, OMV does not expect natural gas exports from Russia to stop. In the unlikely event of short-term gas supply disruptions from Russia, OMV can use the remaining gas in storage to supply custom- ers and has access to other liquid gas market hubs in Europe. OMV has formed a Group Emergency Man- agement Team (GEMT). This internal unit spans all rel- evant business areas and functions. The GEMT moni- tors, analyses and constantly assesses the latest situa- tion in order to take any necessary decisions quickly and implement any measures without delay. 206 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 38 Direct and indirect investments of OMV Aktiengesellschaft Changes in consolidated group Name of company Exploration & Production Energy Petroleum Taranaki Limited OMV GSB LIMITED OMV NZ Services Limited OMV Taranaki Limited Petroleum Infrastructure Limited Taranaki Offshore Petroleum Company of New Zealand KOM MUNAI LLP TASBULAT OIL CORPORATION LLP SapuraOMV Upstream (PM) Inc. OMV PETROM GEORGIA LLC OMV (WEST AFRICA) Exploration & Production GmbH in Liqu. OMV East Abu Dhabi Exploration GmbH Registered Office Type of Change1 Effective date Wellington Wellington Wellington Wellington Wellington Wellington Aktau Aktau Nassau Tbilisi Vienna Deconsolidation (M) Deconsolidation (M) Deconsolidation (M) Deconsolidation (M) Deconsolidation (M) Deconsolidation (M) Deconsolidation Deconsolidation Deconsolidation First consolidation Deconsolidation (L) January 1, 2021 January 1, 2021 January 1, 2021 January 1, 2021 January 1, 2021 January 1, 2021 May 14, 2021 May 14, 2021 August 1, 2021 August 31, 2021 December 16, 2021 Vienna Deconsolidation (I) December 31, 2021 Refining & Marketing OMV Retail Deutschland GmbH AGGM Austrian Gas Grid Management AG FE-Trading trgovina d.o.o. GAS CONNECT AUSTRIA GmbH Trans Austria Gasleitung GmbH2 OMV Kraftwerk Haiming GmbH in Liqu. E-Mobility Provider Austria GmbH2 SMATRICS GmbH & Co KG2 Avanti GmbH Haramidere Depoculuk Anonim Şirketi Enerco Enerji Sanayi Ve Ticaret A.Ş.2 Chemicals & Materials CERHA HEMPEL Leilani Holding GmbH3 Renasci N.V.2 C2PAT GmbH2 C2PAT GmbH & Co KG2 Borealis US Holdings LLC Burghausen Vienna Ljubljana Vienna Vienna Haiming Vienna Vienna Anif Istanbul Istanbul First consolidation Deconsolidation Deconsolidation (M) Deconsolidation Deconsolidation Deconsolidation (L) January 1, 2021 May 31, 2021 May 31, 2021 May 31, 2021 May 31, 2021 August 31, 2021 Deconsolidation September 30, 2021 Deconsolidation September 30, 2021 October 1, 2021 December 3, 2021 December 30, 2021 Deconsolidation (M) Deconsolidation Deconsolidation Vienna Ghent Vienna Vienna Port Murray First consolidation (A) First consolidation (A) First consolidation First consolidation Deconsolidation (L) June 22, 2021 June 24, 2021 August 6, 2021 October 8, 2021 December 7, 2021 1 “First consolidation” refers to newly formed or existing subsidiaries, while “First consolidation (A)” indicates the acquisition of a company. Companies marked with “Deconsolidation” have been sold. Companies marked with “Deconsolidation (I)” have been deconsolidated due to immateriality, while those marked with “De- consolidation (L)” were deconsolidated following a liquidation process. “Deconsolidation (M)” refers to subsidiaries that were deconsolidated following a merger into another Group company. 2 Company consolidated at-equity (in case of divestment, at-equity consolidation until reclassification to held for sale) 3 Renamed to Borealis Circular Solutions Holding GmbH For further information on acquisitions and disposals refer to Note 3 – Changes in group structure. 207 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Number of consolidated companies January 1 Included for the first time Change in consolidation type Deconsolidated during the year December 31 thereof domiciled and operating abroad thereof domiciled in Austria and operating abroad 2021 2020 Full consolidation Equity consolidation Full consolidation Equity consolidation 151 3 — (18) 136 93 18 23 3 — (4) 22 16 — 111 441 — (4) 151 105 19 19 5 (1)1 — 23 16 — 1 Represents the previously at-equity consolidated Borealis AG; since October 29, 2020 Borealis AG is fully consolidated, which led to multiple companies of Bore- alis Group being shown in line “Included for the first time”. List of Investments List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company Type of consoli- dation1 Equity interest in % as of December 31, 2021 Equity interest in % as of December 31, 2020 NZEA NZEA OPLNZ NZEA OSLNZ OPLNZ OMVEP PETROM EPTLNZ EPILNZ EPHNZ NZEA TOPNZ OMVEP OMVEP OMVEP OMVEP OMV AG OMVEP OAUST OAUST OMVEP PETEX OMVEP OMVEP OMV AG OMVEP NZEA OMVEP OMVEP OMVEP C C C C C C NC AEA C C C C C NC NC NC C C NC C NC C C C NC 100.00 100.00 100.00 — 24.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 — 100.00 38.75 20.00 18.75 16.75 6.25 24.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Exploration & Production Energy Infrastructure Limited, Wellington Energy Petroleum Holdings Limited, Wellington (EPHNZ) Energy Petroleum Investments Limited, Wellington (EPILNZ) Energy Petroleum Taranaki Limited, Wellington (EPTLNZ) JSC GAZPROM YRGM Development, St. Petersburg2 KOM MUNAI LLP, Aktau Maui Development Limited, Wellington OJSC SEVERNEFTEGAZPROM, Krasnoselkup OMV Abu Dhabi E&P GmbH, Vienna OMV Abu Dhabi Offshore GmbH, Vienna OMV Abu Dhabi Production GmbH, Vienna OMV AUSTRALIA PTY LTD, Perth (OAUST) OMV Austria Exploration & Production GmbH, Gänserndorf (OEPA) OMV Barrow Pty Ltd, Perth OMV Beagle Pty Ltd, Perth OMV (Berenty) Exploration GmbH, Vienna OMV Bina Bawi GmbH, Vienna OMV Block 70 Upstream GmbH, Vienna OMV East Abu Dhabi Exploration GmbH, Vienna3 OMV Exploration & Production GmbH, Vienna (OMVEP) OMV EXPLORATION & PRODUCTION LIMITED, Douglas OMV GSB LIMITED, Wellington OMV (IRAN) onshore Exploration GmbH, Vienna OMV Jardan Block 3 Upstream GmbH, Vienna OMV (Mandabe) Exploration GmbH, Vienna 208 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company OMV Maurice Energy GmbH, Vienna OMV Middle East & Africa GmbH, Vienna OMV Myrre Block 86 Upstream GmbH, Vienna OMV (NAMIBIA) Exploration GmbH, Vienna OMV New Zealand Limited, Wellington (NZEA) OMV (NORGE) AS, Stavanger OMV NZ Production Limited, Wellington (OPLNZ) OMV NZ Services Limited, Wellington (OSLNZ) OMV OF LIBYA LIMITED, Douglas OMV Offshore Bulgaria GmbH, Vienna OMV Offshore Morondava GmbH, Vienna OMV Offshore (Namibia) GmbH, Vienna (ONAFRU) OMV Oil and Gas Exploration GmbH, Vienna OMV Oil Exploration GmbH, Vienna OMV Oil Production GmbH, Vienna OMV Orient Hydrocarbon GmbH, Vienna OMV Orient Upstream GmbH, Vienna OMV Petroleum Exploration GmbH, Vienna (PETEX) OMV Petroleum Pty Ltd, Perth OMV PETROM GEORGIA LLC, Tbilisi OMV Proterra GmbH, Vienna OMV Russia Upstream GmbH, Vienna OMV Taranaki Limited, Wellington OMV (Tunesien) Production GmbH, Vienna OMV (TUNESIEN) Sidi Mansour GmbH, Vienna OMV Upstream International GmbH, Vienna (OUPI) OMV (West Africa) Exploration & Production GmbH in Liqu., Vienna OMV (YEMEN) Al Mabar Exploration GmbH, Vienna OMV (Yemen Block S 2) Exploration GmbH, Vienna OMV (YEMEN) South Sanau Exploration GmbH, Vienna Pearl Petroleum Company Limited, Road Town PEI Venezuela GmbH, Burghausen Petroleum Infrastructure Limited, Wellington PETROM EXPLORATION & PRODUCTION LIMITED, Douglas Preussag Energie International GmbH, Burghausen SapuraOMV Block 30, S. de R.L. de C.V., Mexico City OMVEP OMVEP OMVEP ONAFRU OMVEP OMVEP NZEA NZEA OMVEP PETROM OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP NZEA PETROM OEPA OMVEP NZEA OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OUPI OMVEP NZEA PETROM OMVEP SapuraOMV Upstream (Americas) Sdn. Bhd., Seri Kembangan (SEAMMY) SapuraOMV Upstream (Australia) Sdn. Bhd., Seri Kembangan (SEAUMY) SapuraOMV Upstream (Holding) Sdn. Bhd., Kuala Lumpur (SEUPMY) SapuraOMV Upstream JV Sdn. Bhd., Seri Kembangan SapuraOMV Upstream (Malaysia) Inc., Nassau (SEMYBH) SapuraOMV Upstream (Mexico) Sdn. Bhd., Seri Kembangan (SEMXMY) SapuraOMV Upstream (NZ) Sdn. Bhd., Seri Kembangan (SENZMY) SapuraOMV Upstream (Oceania) Sdn. Bhd., Seri Kembangan (SEOCMY) SEUPMY SEMXMY SEUPMY SEOCMY SOUPMY SENZMY SESABH SEAMMY SEOCMY SEUPMY Type of consoli- dation1 NC C C C C C C C C C C C NC C C NC NC C NC C NC C C C NC C C C C NC AEA NC C NC C C C C C NC C C C C Equity interest in % as of December 31, 2021 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 100.00 99.99 100.00 99.00 1.00 100.00 Equity interest in % as of December 31, 2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 100.00 100.00 99.99 100.00 99.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 209 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company SEMYBH SEMYBH OMVEP SEUPMY SEAUMY OPLNZ Type of consoli- dation1 C C C C C C PETROM C Equity interest in % as of December 31, 2021 100.00 50.00 100.00 100.00 Equity interest in % as of December 31, 2020 100.00 100.00 50.00 100.00 100.00 100.00 100.00 OMVRM OMVRM OMVRM OGG OGG OMVRM OMVRM OMVRM FETRAT OMVRM OMVRM OMVRM BORAAG OGI OMVD OHUN PDYNHU HUB OMVRM OMVRM OMVRM SLOVJA OGSG OGI OMVRM OMVRM GASTR OMVRM SWJS OMVRM PETROM OMVRM OMVRM OMVD OMVRM OMV AG ECOGAS ECOGAS OMVRM ECOGAS AEA AEJ AEA NC-I C NC-I NC-I C C NC-I NC C AEA C AEA AEJ AEA AEA C AEA C AEA C NC NC-I C C C C C C C C C C 15.00 25.00 15.00 33.33 47.19 100.00 26.00 50.00 50.00 65.00 32.26 48.28 51.72 49.00 55.60 39.99 29.00 100.00 25.10 100.00 99.90 0.10 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 15.00 25.00 15.00 23.13 51.00 33.33 47.19 100.00 100.00 26.00 50.00 50.00 65.00 32.26 48.28 51.72 49.00 40.00 40.00 55.60 100.00 39.99 51.00 29.00 51.00 49.00 100.00 25.10 100.00 99.90 0.10 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 SapuraOMV Upstream (PM) Inc., Nassau SapuraOMV Upstream (Sarawak) Inc., Nassau SapuraOMV Upstream Sdn. Bhd., Seri Kembangan (SOUPMY) SapuraOMV Upstream (Southeast Asia) Inc., Nassau (SESABH) SapuraOMV Upstream (Western Australia) Pty Ltd, Perth Taranaki Offshore Petroleum Company of New Zealand, Wellington (TOPNZ) TASBULAT OIL CORPORATION LLP, Aktau Refining & Marketing Abu Dhabi Oil Refining Company, Abu Dhabi Abu Dhabi Petroleum Investments LLC, Abu Dhabi (ADPINV) ADNOC Global Trading LTD, Abu Dhabi AGCS Gas Clearing and Settlement AG, Vienna AGGM Austrian Gas Grid Management AG, Vienna Aircraft Refuelling Company GmbH, Vienna Autobahn – Betriebe Gesellschaft m.b.H., Vienna Avanti Deutschland GmbH, Berchtesgaden Avanti GmbH, Anif (FETRAT) BSP Bratislava-Schwechat Pipeline GmbH, Vienna BTF Industriepark Schwechat GmbH, Vienna Central European Gas Hub AG, Vienna (HUB) Deutsche Transalpine Oelleitung GmbH, Munich DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft., Budapest EEX CEGH Gas Exchange Services GmbH, Vienna E-Mobility Provider Austria GmbH, Vienna Enerco Enerji Sanayi Ve Ticaret A.Ş., Istanbul Erdöl-Lagergesellschaft m.b.H., Lannach4 FE-Trading trgovina d.o.o., Ljubljana Freya Bunde-Etzel GmbH & Co. KG, Bonn GAS CONNECT AUSTRIA GmbH, Vienna (OGG) GENOL Gesellschaft m.b.H., Vienna Haramidere Depoculuk Anonim Şirketi, Istanbul KSW Beteiligungsgesellschaft m.b.H., Vienna (SWJS) KSW Elektro- und Industrieanlagenbau Gesellschaft m.b.H., Feld- kirch OMV – International Services Ges.m.b.H., Vienna OMV BULGARIA OOD, Sofia OMV Česká republika, s.r.o., Prague OMV Deutschland Services GmbH, Burghausen (OMVDS) OMV Enerji Ticaret Anonim Şirketi, Istanbul (GASTR) OMV Gas Logistics Holding GmbH, Vienna (OGI) OMV Gas Marketing & Trading Belgium BVBA, Brussels OMV Gas Marketing & Trading Deutschland GmbH, Düsseldorf (ECONDE) OMV Gas Marketing & Trading GmbH, Vienna (ECOGAS) OMV Gas Marketing & Trading Hungária Kft., Budapest 210 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% OMV Gas Marketing & Trading Italia S.r.l., Milan OMV Gas Marketing Trading & Finance B.V., Amsterdam OMV Gas Storage Germany GmbH, Cologne (OGSG) OMV Gas Storage GmbH, Vienna OMV Gaz Iletim A.S., Istanbul OMV Hungária Ásványolaj Korlátolt Felelösségü Társaság, Buda- pest (OHUN) OMV Kraftwerk Haiming GmbH in Liqu., Haiming OMV PETROM Aviation SRL, Otopeni OMV PETROM GAS SRL, Bucharest OMV PETROM MARKETING SRL, Bucharest (ROMAN) OMV Refining & Marketing Middle East & Asia GmbH, Vienna OMV Retail Deutschland GmbH, Burghausen OMV SLOVENIJA trgovina z nafto in naftnimi derivati, d.o.o., Koper (SLOVJA) OMV Slovensko s.r.o., Bratislava OMV SRBIJA d.o.o., Belgrade OMV Supply & Trading AG, Baar OMV Supply & Trading Italia S.r.l., Trieste OMV Supply & Trading Limited, London (OTRAD) OMV Supply & Trading Singapore PTE LTD., Singapore OMV Switzerland Holding AG, Zug Pak-Arab Refinery Limited, Karachi PETRODYNE-CSEPEL Zrt., Budapest (PDYNHU) Petrom-Moldova S.R.L., Chisinau Routex B.V., Amsterdam Salzburg Fuelling GmbH, Salzburg SMATRICS GmbH & Co KG, Vienna Società Italiana per l’Oleodotto Transalpino S.p.A., Trieste South Stream Austria GmbH, Vienna SuperShop Marketing GmbH, Budapest TGN Tankdienst-Gesellschaft Nürnberg GbR, Nuremberg Trans Austria Gasleitung GmbH, Vienna5 Transalpine Ölleitung in Österreich Gesellschaft m.b.H., Matrei in Osttirol Chemicals & Materials Abu Dhabi Polymers Company Limited (Borouge), Abu Dhabi AGRIPRODUITS S.A.S., Courbevoie (BAGRFR) AZOLOR S.A.S., Bras Sur Meuse Bayport Polymers LLC, Pasadena6 Borealis AB, Stenungsund (BABSWE) Borealis AG, Vienna (BORAAG) Borealis Agrolinz Melamine Deutschland GmbH, Wittenberg Borealis Agrolinz Melamine GmbH, Linz (BAGMAT) Borealis Antwerpen N.V., Zwijndrecht Parent company ECOGAS OFS OMVDS OGI OGI OMVRM OMVRM OGI PETROM ROMAN PETROM PETROM OMVRM OMVD OMVRM OMVRM PETROM OMVRM OMVRM OMVRM OMVRM OTRAD OGI ADPINV OHUN PETROM OMVRM OMVRM OMVRM OMVRM OGI OHUN OMVD OGG OMVRM BORAAG BCHIFR BCHIFR BNOVUS BSVSWE BHOLAT OMVRM OMV AG BAGMAT BORAAG BPOBE BORAAG Equity interest in % as of December 31, 2021 100.00 100.00 100.00 Type of consoli- dation1 C C C Equity interest in % as of December 31, 2020 100.00 100.00 C C C C C C C C C C C C C C C NC C AEJ C C NC-I NC-I AEJ AEA NC-I NC-I NC-I AEJ AEA AEA NC NC-I AEJ C C C C C 100.00 100.00 100.00 100.00 0.00 100.00 100.00 100.00 100.00 92.25 99.96 99.96 0.04 100.00 100.00 100.00 100.00 100.00 40.00 100.00 100.00 20.00 33.33 32.26 50.00 33.33 32.26 40.00 100.00 34.00 50.00 100.00 39.00 32.67 3.33 100.00 100.00 90.00 10.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 99.99 100.00 100.00 92.25 99.96 99.96 0.04 100.00 100.00 100.00 100.00 100.00 40.00 100.00 100.00 20.00 33.33 40.00 32.26 50.00 50.00 33.33 15.53 32.26 40.00 100.00 34.00 50.00 100.00 39.00 32.67 3.33 100.00 100.00 90.00 10.00 211 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Type of consoli- dation1 NC NC C C NC NC NC C C NC C NC NC C C C C C C NC NC NC C C C NC NC NC NC NC NC NC NC NC NC C NC NC C C C C Equity interest in % as of December 31, 2021 98.00 2.00 100.00 100.00 80.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 90.00 10.00 100.00 0.00 100.00 100.00 100.00 100.00 99.94 0.06 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 100.00 0.00 100.00 100.00 99.99 0.01 100.00 100.00 100.00 0.00 100.00 100.00 0.00 Equity interest in % as of December 31, 2020 98.00 2.00 100.00 100.00 80.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 90.00 10.00 100.00 0.00 100.00 100.00 100.00 100.00 99.94 0.06 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 100.00 0.00 100.00 100.00 99.99 0.01 100.00 100.00 100.00 0.00 100.00 100.00 0.00 Parent company BORAAG BSVSWE BORAAG BUS BORAAG BORAAG BORAAG BORAAG BFR BORAAG BORAAG BUS BORAAG BORAAG BPOBE BORAAG BSVSWE BORAAG BABSWE BORAAG BORAAG BPOBE BORAAG BLATAT BLATAT BLATAT BLATAT BFR BORAAG BLATAT BLATAT BLATAT BORAAG BLATAT BLATAT BLATAT BORAAG BCOMUS BORAAG BABSWE BORAAG BORAAG BORAAG BSVSWE BORAAG BORAAG BORAAG BSVSWE BORAAG BORAAG BSVSWE Borealis Argentina SRL, Buenos Aires Borealis Asia LIMITED, Hong Kong Borealis BoNo Holdings LLC, Port Murray (BBNHUS)6 Borealis Brasil S.A., Itatiba BOREALIS CHEMICALS ZA (PTY) LTD, Germiston Borealis Chile SpA, Santiago Borealis Chimie S.A.R.L., Casablanca Borealis Chimie S.A.S., Courbevoie (BCHIFR) Borealis Circular Solutions Holding GmbH, Vienna (BCIRC) Borealis Colombia S.A.S., Bogota Borealis Compounds Inc., Port Murray (BCOMUS) Borealis Denmark ApS, Copenhagen Borealis Digital Studio B.V., Zaventem Borealis Financial Services N.V., Mechelen Borealis France S.A.S., Courbevoie (BFR) Borealis Group Services AS, Bamble Borealis Insurance A/S (captive insurance company), Copenhagen Borealis ITALIA S.p.A., Monza Borealis Kallo N.V., Kallo Borealis L.A.T Belgium B.V., Beringen Borealis L.A.T Bulgaria EOOD, Sofia Borealis L.A.T Czech Republic s.r.o., Ceske Budejovice Borealis L.A.T doo Beograd, Belgrad Borealis L.A.T France S.A.S., Courbevoie Borealis L.A.T GmbH, Linz (BLATAT) Borealis L.A.T Greece Single Member P.C., Athens Borealis L.A.T Hrvatska d.o.o., Klisa Borealis L.A.T Hungary Kft., Budapest Borealis L.A.T Italia s.r.l., Milan Borealis L.A.T Polska Sp. z o.o., Warsaw Borealis L.A.T Romania s.r.l., Bucharest Borealis L.A.T Slovakia s.r.o., Chotin Borealis México, S.A. de C.V., Mexico City Borealis Plasticos. S.A. de C.V., Mexico City Borealis Plastik ve Kimyasal Maddeler Ticaret Limited Sirketi, Istanbul Borealis Plastomers B.V., Geleen Borealis Poliolefinas da América do Sul Ltda., Itatiba Borealis Polska Sp. z o.o., Warsaw Borealis Polymere GmbH, Burghausen Borealis Polymers N.V., Beringen (BPOBE) Borealis Polymers Oy, Porvoo Borealis Polyolefine GmbH, Schwechat 212 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Borealis Produits et Engrais Chimiques du Rhin S.A.S., Ottmars- heim Borealis Química España S.A., Barcelona Borealis RUS LLC, Moscow Borealis s.r.o., Prague Borealis Services S.A.S., Courbevoie Borealis Sverige AB, Stenungsund (BSVSWE) Borealis Technology Oy, Porvoo Borealis UK LTD, Manchester Borealis US Holdings LLC, Port Murray Borealis USA Inc., Port Murray (BUS) Borouge Pte. Ltd., Singapore C2PAT GmbH, Vienna C2PAT GmbH & Co KG, Vienna Chemiepark Linz Betriebsfeuerwehr GmbH, Linz DYM Solution CO., LTD, Cheonan Ecoplast Kunststoffrecycling GmbH, Wildon EPS Ethylen-Pipeline-Süd Geschäftsführungs GmbH, Munich EPS Ethylen-Pipeline-Süd GmbH & Co KG, Munich Etenförsörjning i Stenungsund AB, Stenungsund FEBORAN EOOD, Sofia (BFEBGR) Franciade Agrifluides S.A.S. (FASA), Blois Industrins Räddningstjänst i Stenungsund AB, Stenungsund KB Munkeröd 1:72, Stenungsund Kilpilahden Voimalaitos Oy, Porvoo mtm compact GmbH, Niedergebra mtm plastics GmbH, Niedergebra Neochim AD, Dimitrovgrad Novealis Holdings LLC, Port Murray (BNOVUS) OMV Borealis Holding GmbH, Vienna (BHOLAT)7 PetroPort Holding AB, Stenungsund Renasci N.V., Ghent Rosier France S.A.S., Beaumetz-Les-Loges Rosier Nederland B.V., Sas Van Gent Rosier S.A., Moustier (BROSBE) Silleno Limited Liability Partnership , Nur-Sultan Société d'Intérêt Collectif Agricole Laignes Agrifluides (SICA Laignes Agrifluides), Monéteau Société d'Intérêt Collectif Agricole par Actions Simplifiée de Gouaix (SICA de Gouaix), Paris Star Bridge Holdings LLC, Port Murray (BSBHUS)6 STOCKAM G.I.E., Grand-Quevilly Parent company BFR Type of consoli- dation1 C Equity interest in % as of December 31, 2021 100.00 Equity interest in % as of December 31, 2020 100.00 BORAAG BORAAG BORAAG BFR BORAAG BORAAG BORAAG BCOMUS BORAAG BORAAG BORAAG OMVRM BORAAG OMVRM BAGMAT BORAAG BORAAG OMVD BORAAG OMVD BORAAG BABSWE BORAAG BCHIFR BAGRFR BABSWE BABSWE BSVSWE BORAAG BORAAG BORAAG BFEBGR BBNHUS BSBHUS OMVRM BABSWE BCIRC BROSBE BROSBE BORAAG BORAAG BCHIFR BAGRFR BCHIFR BLATAT BUS BCHIFR BAGRFR C NC NC NC C C C C C AEA AEJ AEJ NC-I C C NC-I AEA C C NC-I NC-I NC NC-I C C AEA C C AEJ AEA C C C NC-I NC-I NC-I C NC 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 50.00 25.00 25.00 25.00 25.00 47.50 98.71 100.00 15.46 8.20 20.66 10.30 80.00 100.00 40.00 9.98 25.00 100.00 0.00 20.00 100.00 100.00 20.30 50.00 50.00 100.00 50.00 10.00 100.00 100.00 77.47 39.97 9.93 25.00 0.00 100.00 99.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 50.00 47.50 90.52 100.00 15.46 8.20 20.66 10.30 80.00 100.00 40.00 9.98 100.00 0.00 20.00 100.00 100.00 20.30 50.00 50.00 100.00 50.00 100.00 100.00 77.47 50.10 39.97 9.93 25.00 0.00 100.00 99.00 1.00 213 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company Type of consoli- dation1 Equity interest in % as of December 31, 2021 Equity interest in % as of December 31, 2020 PETROM NC-I 20.00 20.00 OMV AG SNO SNO SNO SNO OMV AG OMV AG SNO PETROM OMV AG PETROM OMVRM OMV AG OMVD OMVDS OMVD OMVDS OMV AG OMV AG C C C C C NC C C C C C C C C C 100.00 100.00 100.00 100.00 100.00 100.00 100.00 75.00 25.00 100.00 99.99 90.00 10.00 99.99 0.01 99.99 0.01 100.00 51.01 100.00 100.00 100.00 100.00 100.00 100.00 100.00 75.00 25.00 100.00 99.99 90.00 10.00 99.99 0.01 99.99 0.01 100.00 51.01 Corporate & Other ASOCIATIA ROMANA PENTRU RELATIA CU INVESTITORII, Bu- charest Diramic Insurance Limited, Gibraltar OMV Clearing und Treasury GmbH, Vienna OMV Finance Services GmbH, Vienna (OFS) OMV Finance Services NOK GmbH, Vienna OMV Finance Solutions USD GmbH, Vienna OMV Insurance Broker GmbH, Vienna OMV International Oil & Gas GmbH, Baar OMV Petrom Global Solutions SRL, Bucharest OMV Solutions GmbH, Vienna (SNO) PETROMED SOLUTIONS SRL, Bucharest Assigned to multiple segments8 OMV Deutschland GmbH, Burghausen (OMVD) OMV Deutschland Marketing & Trading GmbH & Co. KG, Burghau- sen9 OMV Deutschland Operations GmbH & Co. KG, Burghausen OMV Downstream GmbH, Vienna (OMVRM) OMV PETROM SA, Bucharest (PETROM) 1 Type of consolidation: C Consolidated subsidiary AEA Associated companies accounted at-equity AEJ Joint venture accounted at-equity NC-I Other not consolidated investment; associated companies and joint ventures of relatively little importance to the assets and earnings of the consolidated financial statements NC Not-consolidated subsidiary; shell or distribution companies of relative insignificance individually and collectively to the consolidated financial statements 2 Economic share 99.99% 3 Type of consolidation was changed compared to 2020. 4 Despite majority interest not fully consolidated, but accounted for at-equity due to absence of control 5 Economic share 10.78% 6 Incorporated in Wilmington 7 Company name changed compared to 2020. 8 Assigned to the relevant segments in the segment reporting 9 In the 2021 financial year, OMV Deutschland Marketing & Trading GmbH & Co. KG made use of the exemption provision for the preparation of the annual finan- cial statement and director’s report, audit and disclosure pursuant to Section 264b HGB in conjunction with Section 325 HGB. The company's exemption is men- tioned in its notes and published in the Federal Gazette with reference to this provision and an indication of the parent company. All the subsidiaries, joint ventures and associated companies which are not consolidated either have low business volumes or are distribution companies; the total sales, net income/losses and equity of such com- panies represent less than 1% of the Group totals. 214 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Material joint operations (IFRS 11) Name Nafoora – Augila1 Concession 1031 Pohokura Nature of activities Onshore development of hydrocarbons Onshore development and production of hydrocarbons Offshore production of hydrocarbons Neptun Deep Nawara Offshore exploration for hydrocarbons Onshore development and production of hydrocarbons Principal place of business Libya Libya New Zealand Romania Tunisia % ownership 31.12.2021 % ownership 31.12.2020 100 100 74 50 50 100 100 74 50 50 1 The percentage disclosed represents the Second Party Share. The state owned Libyan national oil corporation NOC is entitled to 88-90% of the production (“primary split”). Other significant arrangements Name NC 1151 NC 1861 SK 408 Aasta Hansteen Edvard Grieg Gullfaks Wisting2 Sarb & Umm Lulu Ghasha Principal place of business Nature of activities Libya Onshore development and production of hydrocarbons Libya Onshore development and production of hydrocarbons Malaysia Offshore development and production of hydrocarbons Norway Offshore production of hydrocarbons Norway Offshore production of hydrocarbons Norway Offshore production of hydrocarbons Norway Offshore exploration for hydrocarbons Offshore development and production of hydrocarbons Abu Dhabi Offshore exploration for and development of hydrocarbons Abu Dhabi % ownership 31.12.2021 % ownership 31.12.2020 30 24 40 15 20 19 — 20 5 30 24 40 15 20 19 25 20 5 1 The percentage disclosed represents the Second Party Share. The state owned Libyan national oil corporation is entitled to 88-90% of the production (“primary split”). 2 The stake in the Wisting oil field was sold to Lundin Energy AB on December 17, 2021. 215 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Oil and Gas Reserve Estimation and Disclosures (unaudited) The following tables provide supplementary information in respect of the Group’s oil and gas activities. In the absence of detailed disclosure rules in this area under IFRS, the Group has elected to voluntarily disclose the data that would have been required under the ASC 932 as if it was reporting under US GAAP. To the extent that information refers to financial state- ments data, the information is based on the primary fi- nancial statements (IFRS financial statements). The regional structure is presented below1: Romania and Black Sea Bulgaria, Kazakhstan (until May 2021) and Romania Austria Russia North Sea Austria Russia Norway Middle East and Africa Iran (evaluation on hold), Kurdistan Region of Iraq, Libya, Tunisia, United Arab Emirates, Yemen, Madagascar (until 2019) New Zealand and Australia Australia and New Zealand Malaysia SapuraOMV2 1 Regions listed in the Director’s Report ‘Central and Eastern Europe’ (includes Romania and Black Sea as well as Austria) and ‘Asia-Pacific’ (includes New Zea- land and Australia as well as Malaysia) are split further in this disclosure to provide the information in a more detailed manner. 2 Includes not only Malaysia but also SapuraOMV subsidiaries in New Zealand, Australia and Mexico. Acquisitions There were no major acquisitions during 2021 and 2020. On January 31, 2019, OMV acquired a 50% stake of the issued share capital in SapuraOMV Upstream Sdn. Bhd. As OMV has the decision power over relevant ac- tivities, the new entity and its subsidiaries are fully con- solidated. Besides future growth in daily production in Malaysian offshore gas fields, this transaction gives OMV access to exploration blocks in New Zealand, Australia and Mexico. SapuraOMV Upstream Sdn. Bdn. and its subsidiaries are depicted in the Malaysia region in the upcoming tables. Non-controlling interest As OMV holds 51% of OMV Petrom, it is fully consoli- dated; figures therefore include 100% of OMV Petrom assets and results. OMV has a share of 50% in SapuraOMV and it is fully consolidated; figures therefore include 100% of Sapu- raOMV assets and results. Equity-accounted investments OMV holds a 10% interest in Pearl Petroleum Com- pany Limited (Middle East and Africa region). OMV has a 24.99% interest in OJSC Severneftegaz- prom (Russia region). Disposals As per May 14, 2021, OMV Petrom finalized the sale of its 100% share in Kom-Munai LLP and Tasbulat Oil Corporation LLP (both based in Aktau, Kazakhstan). The disclosures of equity-accounted investments in be- low tables represent the interest of OMV in the compa- nies. On August 1, 2021, SapuraOMV Upstream Sdn. Bhd. sold its share in SapuraOMV Upstream (PM) Inc., which held interests in various producing assets lo- cated offshore Peninsular Malaysia. There were no major disposals during 2020 and 2019. The subsequent tables may contain rounding differ- ences. 216 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Tables a) Capitalized costs Capitalized costs represent the sum of capitalized oil and gas assets, including other intangible assets and property, plant and equipment such as land, plant and machinery, concessions, licenses and rights. Capitalized costs – subsidiaries In EUR mn Unproved oil and gas properties Proved oil and gas properties Total Accumulated depreciation Net capitalized costs Capitalized costs – equity-accounted investments In EUR mn Unproved oil and gas properties Proved oil and gas properties Total Accumulated depreciation Net capitalized costs 2021 2020 2019 2,137 27,611 29,749 2,461 3,211 26,988 26,830 29,449 30,041 (18,136) 11,613 (17,117) (15,484) 12,333 14,557 2021 2020 2019 164 477 641 (99) 542 154 346 501 (76) 424 173 315 489 (67) 421 217 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS b) Costs incurred Costs incurred include all costs, capitalized or ex- pensed, during the year in the Group’s oil and gas property acquisition, exploration and development ac- tivities. Costs incurred In EUR mn Subsidiaries Acquisition of proved properties Acquisition of unproved properties Exploration costs Development costs Costs incurred Equity-accounted investments Subsidiaries Acquisition of proved properties Acquisition of unproved properties Exploration costs Development costs Costs incurred Equity-accounted investments Subsidiaries Acquisition of proved properties Acquisition of unproved properties Exploration costs Development costs Costs incurred Equity-accounted investments Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total 2021 — — — — — — — — 1 41 265 307 — — 6 38 44 — — — — — 62 0 81 243 324 — 25 165 191 — 26 102 128 — 21 — 1 30 39 70 — 3 210 852 1,065 83 2020 — — — — — — — — — 51 330 380 — — 25 20 45 — — — — — 55 — 55 187 242 — 2019 — 17 163 180 — 46 60 106 7 — — 32 19 51 — — 227 778 1,005 62 — — — 1 — 1 604 605 — 93 411 504 — 53 58 112 — — — — — — 30 — 121 174 296 12 32 222 266 — 40 65 105 683 20 90 1,398 695 360 1,021 2,681 — 15 — — 45 c) Results of operations of oil and gas producing activities The following tables represent only those revenues and expenses which occur directly in connection with OMV´s oil and gas producing operations. The results of oil and gas activities should not be equated to Explora- tion & Production net income since interest costs, gen- eral corporate overhead costs and other costs are not allocated. Income taxes are hypothetically calculated, based on the statutory tax rates and the effect of tax credits on investments and loss carryforwards. 218 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Results of operations of oil and gas producing activities In EUR mn Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total Subsidiaries Sales to unaffiliated parties1 Intercompany sales Production costs Royalties Exploration expenses2 Depreciation, amortization, impairments and write-ups Other costs3 Results before income taxes Income taxes4 Results from oil and gas production Results of equity-accounted investments Subsidiaries Sales to unaffiliated parties1 Intercompany sales Production costs Royalties Exploration expenses2 Depreciation, amortization, impairments and write-ups Other costs3 Results before income taxes Income taxes4 Results from oil and gas production Results of equity-accounted investments 22 1,845 1,868 (477) (404) (43) (499) (70) (1,493) 375 (59) (649) 432 (218) (78) (66) (5) (102) (14) (265) (483) 121 562 — 562 — — — (70) (329) (399) 163 (27) 2021 876 1,345 2,221 (144) — (108) (381) (132) (766) 1,455 (981) 556 1,018 1,574 (146) (135) (43) (246) (25) (596) 979 (750) 316 (362) 135 475 229 — — 24 — 31 57 1,203 1,260 (472) (180) (179) (538) (63) (1,432) (172) 25 (25) 186 161 (77) (40) (96) (223) (16) (452) (291) 107 389 — 389 — — — (74) (343) (417) (28) 5 (148) (184) (23) — — 15 2020 569 269 838 (144) — (56) (309) (135) (644) 194 (122) 72 — 102 365 467 (125) (67) (298) (226) (14) (730) (263) 118 279 122 400 (81) (39) (18) (127) (5) (270) 130 (38) 92 — 228 102 330 (77) (34) (201) (384) (23) (719) (389) 107 239 — 239 (24) (13) (65) (101) (21) (223) 15 (6) 10 — 209 — 209 (24) (4) (67) (126) (26) (246) (38) (16) 1,884 4,762 6,646 (950) (658) (281) (1,526) (597) (4,012) 2,635 (1,740) 895 55 1,529 2,125 3,654 (920) (325) (896) (1,880) (619) (4,641) (987) 224 (145) (282) (53) (763) 16 — — 31 219 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Results of operations of oil and gas producing activities In EUR mn Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total Subsidiaries Sales to unaffiliated parties1 Intercompany sales Production costs Royalties Exploration expenses2 Depreciation, amortization, impairments and write-ups Other costs3 Results before income taxes Income taxes4 Results from oil and gas production Results of equity-accounted investments 94 1,909 2,002 (500) (250) (53) (553) (93) (1,449) 553 (88) 465 — 19 324 343 (82) (62) (45) (119) (29) (336) 7 1 8 — 550 — 550 — — — (91) (429) (520) 30 (5) 24 34 2019 891 379 1,270 (158) — (73) (414) (132) (777) 493 (402) 91 — 527 822 1,348 (124) (103) (16) (233) (45) (520) 828 (675) 153 11 335 191 526 (98) (65) (24) (199) (20) (407) 119 (25) 94 — 171 — 171 (30) (16) (18) 2,586 3,624 6,210 (991) (496) (229) (73) (13) (149) 21 (1,681) (761) (4,159) 2,051 (28) (1,222) (7) 829 — 45 1 Includes hedging effects; Austria Region includes hedging effects of centrally managed derivatives (2021: EUR (675) mn, 2020: EUR (37) mn, 2019: EUR 2 mn). 2 Including impairment losses related to exploration&appraisal 3 Includes inventory changes 4 Income taxes in North Sea and Middle East and Africa include corporation tax and special petroleum tax. d) Oil and gas reserve quantities Proved reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. Proved oil and gas reserves were estimated based on a 12-month average price, unless prices are defined by contractual arrange- ments. Proved developed reserves are those proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the costs of the required equipment are relatively minor compared with the cost of a new well and through installed extraction equipment and infrastructure operational at the time of the reserves estimate. It should be reasonably certain that the required future expenditure will be made to safeguard existing equipment within the current budget. Proved undeveloped reserves are those proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion or substantial new investment is required in order to safeguard or replace ageing facilities. 220 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Crude oil and NGL in mn bbl Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total Proved developed and undeveloped reserves – Subsidiaries January 1, 2019 Revisions of previous estimates Purchases Disposal Extensions and discoveries Production December 31, 2019 Revisions of previous estimates Purchases Disposal Extensions and discoveries Production December 31, 2020 Revisions of previous estimates Purchases Disposal Extensions and discoveries Production December 31, 2021 324.4 20.2 — (3.4) 0.1 (26.1) 315.2 8.6 — — 0.5 (25.5) 298.8 4.2 — (21.4) 0.3 (23.0) 258.8 37.0 2.1 — — — (4.0) 35.2 2.7 — — — (3.8) 34.0 1.0 — — — (3.6) 31.4 — — — — — — — — — — — — — — — — — — — 48.4 13.3 — — 6.0 (16.6) 51.1 8.5 — — — (15.1) 44.5 208.3 26.7 — — — (21.8) 213.2 69.7 — — — (12.8) 270.2 10.2 6.0 — — — (4.6) 11.6 0.2 — — — (3.8) 8.0 17.2 — — 30.3 — — 7.6 — — — (15.3) 46.4 — (24.8) 275.7 0.8 (3.5) 12.9 Proved developed and undeveloped reserves – Equity-accounted investments — December 31, 2019 — December 31, 2020 — — — — — — December 31, 2021 — — — — 15.3 18.4 17.5 Proved developed reserves – Subsidiaries 287.2 December 31, 2019 273.1 December 31, 2020 December 31, 2021 234.2 35.2 33.9 31.4 Proved developed reserves – Equity-accounted investments December 31, 2019 December 31, 2020 December 31, 2021 — — — — — — — — — — — — 37.2 32.7 40.7 179.7 172.7 189.2 — — — 14.9 15.7 14.7 — — — 7.8 5.6 6.0 — — — — — 9.5 — — (2.1) 7.4 1.0 — — — (2.7) 5.7 4.9 — (2.4) — (1.7) 6.5 — — — 5.7 5.7 1.6 — — — 628.3 68.4 9.5 (3.4) 6.1 (75.2) 633.7 90.7 — — 0.5 (63.7) 661.2 65.2 — (23.8) 1.0 (71.9) 631.7 15.3 18.4 17.5 552.7 523.8 503.2 14.9 15.7 14.7 221 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Gas In mn bcf Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total Proved developed and undeveloped reserves - Subsidiaries January 1, 2019 Revisions of previous estimates Purchases Disposals Extensions and discoveries Production December 31, 2019¹ Revisions of previous estimates Purchases Disposals Extensions and discoveries Production December 31, 2020¹ Revisions of previous estimates Purchases Disposals Extensions and discoveries Production December 31, 2021¹ 1,124.7 58.2 — (6.3) 2.2 (158.0) 1,020.7 61.3 — — 7.2 (148.6) 940.7 76.2 — (22.3) 1.5 (130.6) 865.5 196.8 10.1 — — — (29.2) 177.8 2.5 — — — (24.9) 155.3 17.7 — — — (20.6) 152.4 — — — — — — — — — — — — — — — — — — — 429.4 76.0 — — 7.4 (90.0) 422.8 58.3 — — — (97.5) 383.6 55.5 9.6 — — — (3.2) 61.9 27.5 — — — (7.0) 82.4 7.8 — — — (102.3) 289.2 80.7 — — — (17.3) 145.8 235.6 145.4 — — — (65.2) 315.8 (62.8) — — — (57.7) 195.3 115.3 — — 15.4 (51.8) 274.2 — — 351.2 — — (15.5) 335.7 2,041.9 299.3 351.2 (6.3) 9.5 (360.9) 2,334.7 93.9 — — — (53.3) 376.3 180.7 — — 7.2 (389.0) 2,133.6 212.0 — (9.1) — (64.5) 514.7 509.6 — (31.5) 17.0 (387.0) 2,241.7 Proved developed and undeveloped reserves – Equity-accounted investments — December 31, 2019 — December 31, 2020 1,376.8 1,321.0 — — — — December 31, 2021 — — 1,167.1 — 277.3 383.8 369.2 — — — — — 1,654.1 1,704.8 — 1,536.4 Proved developed reserves – Subsidiaries 923.0 December 31, 2019 851.9 December 31, 2020 December 31, 2021 779.5 110.2 76.1 84.0 — — — 407.8 335.7 287.0 57.4 55.2 62.5 203.2 143.5 115.4 124.0 376.3 1,825.5 1,838.7 291.9 1,620.2 Proved developed reserves – Equity-accounted investments December 31, 2019 December 31, 2020 December 31, 2021 — — — — 880.2 1,003.1 — — 1,090.7 — — — 262.9 293.5 278.9 — — — — — 1,143.1 1,296.6 — 1,369.7 1 2021: Including approximately 67.6 bcf of cushion gas held in storage reservoirs 2020: Including approximately 67.6 bcf of cushion gas held in storage reservoirs 2019: Including approximately 67.6 bcf of cushion gas held in storage reservoirs e) Standardized measure of discounted future net cash flows The future net cash flow information is based on the as- sumption that the prevailing economic and operating conditions will persist throughout the time during which proved reserves will be produced. Neither the effects of future pricing changes nor expected changes in tech- nology and operating practices are considered. Future cash inflows represent the revenues received from production volumes, including cushion gas held in storage reservoirs, assuming that the future production is sold at prices used in estimating year-end quantities of proved reserves (12 months average price). Future production costs include the estimated expenditures for production of the proved reserves plus any production taxes without consideration of future inflation. Future 222 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS decommissioning costs comprise the net costs associ- ated with decommissioning wells and facilities. Future development costs include the estimated costs of de- velopment drilling and installation of production facili- ties. For all three categories year-end costs without consideration of inflation are assumed. Future income tax payments are calculated on the basis of the income tax rate applicable in each of the countries in which the Group operates. The present cash value results from the discounting of the future net cash flow at a discount rate of 10% per year. The standardized measure does not purport to be an estimate of the fair value of the Group’s proven reserves. An estimate of fair value would also take into account, amongst many other fac- tors, the expected recovery of reserves in excess of proved reserves, anticipated changes in future prices and costs as well as a discount factor representative of the risks inherent in the production of oil and gas. Standardized measure of discounted future net cash flows In EUR mn Subsidiaries Future cash inflows Future production and decommis- sioning costs Future development costs Future net cash flows, before income taxes Future income taxes Future net cash flows, before discount 10% annual discount for esti- mated timing of cash flows Standardized measure of dis- counted future net cash flows Equity-accounted investments Subsidiaries Future cash inflows Future production and decommis- sioning costs Future development costs Future net cash flows, before income taxes Future income taxes Future net cash flows, before discount 10% annual discount for esti- mated timing of cash flows Standardized measure of dis- counted future net cash flows Equity-accounted investments Subsidiaries and equity-accounted investments Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total 2021 17,585 3,336 2,625 5,608 16,545 1,905 1,433 49,038 (9,221) (1,422) (1,612) (246) (2,148) — (2,293) (281) (5,419) (776) (1,647) (380) (490) (257) (22,831) (3,362) 6,942 1,479 477 3,034 10,350 (122) 685 22,845 (577) (264) (97) (2,541) (6,893) 116 (175) (10,432) 6,366 1,214 380 493 3,457 (6) 510 12,413 (3,089) (630) (71) (109) (1,100) 175 (216) (5,040) 3,276 — 584 — 309 187 384 — 2,357 336 169 — 294 — 7,373 523 12,167 1,513 2,497 2,628 9,914 928 959 30,607 2020 (7,748) (1,632) (1,159) (297) (2,276) — (1,857) (373) (3,907) (698) (1,257) (226) (450) (24) (18,654) (3,249) 2,787 (69) 2,718 58 — 58 220 (60) 399 5,308 (554) 486 8,704 (1) (2,954) 199 (104) (2,990) 160 397 2,354 (355) 382 5,714 (1,038) (5) 1 (40) (696) 153 (103) (1,727) 1,680 — 53 — 161 100 357 — 1,659 233 (202) — 279 — 3,987 333 223 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Standardized measure of discounted future net cash flows In EUR mn Subsidiaries and equity-accounted investments Romania and Black Sea Austria Russia North Sea Middle East and Africa 2019 New Zealand and Australia Malaysia Total 19,932 2,554 3,402 4,432 12,597 1,972 1,246 46,135 (9,156) (2,081) (1,704) (370) (2,779) — (2,196) (527) (3,398) (563) (1,785) (325) (461) (36) (21,480) (3,901) 8,696 479 622 1,709 8,637 (138) 749 20,754 (819) (21) (125) (959) (5,188) 101 (178) (7,191) 7,877 458 497 750 3,448 (37) 570 13,563 (3,918) (47) (117) (286) (1,025) 184 (126) (5,334) 3,960 — 411 — 381 101 464 — 2,424 136 147 — 444 — 8,230 238 Subsidiaries Future cash inflows Future production and decommis- sioning costs Future development costs Future net cash flows, before income taxes Future income taxes Future net cash flows, before discount 10% annual discount for esti- mated timing of cash flows Standardized measure of dis- counted future net cash flows Equity-accounted investments f) Changes in the standardized measure of dis- counted future net cash flows Changes in the standardized measure of discounted future net cash flows In EUR mn Subsidiaries Beginning of year Oil and gas sales produced, net of production costs Net change in prices and production costs Net change due to purchases and sales of minerals in place Net change due to extensions and discoveries Development and decommissioning costs incurred during the period Changes in estimated future development and decommissioning costs Revisions of previous reserve estimates Accretion of discount Net change in income taxes (incl. tax effects from purchases and sales) Other1 End of year Equity-accounted investments 1 Contains movements in foreign exchange rates vs. the EUR 2021 2020 2019 3,987 (2,262) 8,231 (67) 5 657 (269) 1,854 341 (4,935) (168) 7,373 8,230 (3,397) (7,040) — 22 1,031 259 757 732 3,625 (232) 3,987 9,304 (3,942) (1,810) 531 72 674 (398) 1,216 828 1,646 108 8,230 523 333 238 224 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS Vienna, March 9, 2022 The Executive Board Alfred Stern m.p. Chairman of the Executive Board, Chief Executive Officer and Executive Officer Chemicals & Materials Johann Pleininger m.p. Deputy Chairman of the Executive Board and Executive Officer Exploration & Production Reinhard Florey m.p. Chief Financial Officer Elena Skvortsova m.p. Executive Officer Marketing & Trading Martijn van Koten m.p. Executive Officer Refining 225 OMV ANNUAL REPORT 2021 / FINANCIAL STATEMENTS 226 FURTHER INFORMATION 227 — 239 228 — Consolidated Report on the Payments Made to Governments 236 — Abbreviations Definitions 239 — Contacts and Imprint OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Consolidated Report on the Payments Made to Governments Section 267c of the Austrian Commercial Code Section 267c of the Austrian Commercial Code (UGB) requires that large undertakings and public interest entities that are active in the extractive industry or logging of primary forests prepare the following consolidated report on payments to governments. This section implements Chapter 10 of the EU Accounting Directive (2013/34/EU). The “Basis of preparation” paragraph provides information to the reader about the contents of the report. This also includes information on the type of payment for which disclosure is required and how OMV has implemented the regulations in the preparation of the report. Basis of preparation Reporting entities Under the requirements of the regulation, OMV Aktiengesellschaft is required to prepare a consolidated report covering payments made to governments for each financial year in relation to extractive activities by itself and any subsidiary undertakings included in the consolidated Group financial statements. “Substantially interconnected” is defined as a set of operationally and geographically integrated contracts, licenses, leases, concessions, or related agreements with substantially similar terms that are signed with a government, giving rise to payment liabilities. Such agreements can be governed by a single contract, joint venture agreement, production sharing agreement or other overarching legal agreement. Activities within the scope of the report Payments made by OMV Group (hereafter OMV) to governments that arose from exploration, prospection, discovery, development, and extraction of minerals, oils, and natural gas deposits or other materials within extractive activities are presented in this report. Government A “government” is defined as any national, regional or local authority of a country and includes a department agency or entity undertaking that is controlled by the government authority and includes national oil companies. In cases where a state-owned entity engages in activi- ties outside its designated home jurisdiction, then it is not deemed to be a reportable governmental body for these purposes and thus payments made to such an entity in these circumstances are not reportable. Project definition The regulation also requires payments to be reported on a “project” basis as well as on a government and governmental body basis. A project is defined as the operational activities that are governed by a single contract, license, lease, concession, or similar legal agreement and form the basis for payment liabilities to the government. Where these agreements as per the aforementioned definition are substantially interconnected, these agreements are treated for the purpose of these regulations as a single project. There may be instances, for example, corporate in- come taxes, where it is not possible to attribute the payment to a single project and therefore these pay- ments are shown at the country level. Cash and payments in kind In accordance with the regulation, payments have to be reported on a cash basis. This means that they are re- ported in the period in which they are paid and not in the period in which they are accounted for on an accru- als basis. Refunds are also reported in the period in which they are received and will either be offset against payments made in the period or be shown as negative amounts in the report. Payments in kind made to a government are converted to an equivalent cash value based on the most appro- priate and relevant valuation method for each payment type. This can be at cost or market value and an expla- nation is provided in the report to help explain the valu- ation method. Where applicable, the related volumes are also included in the report. Payment reporting methodology The regulation requires that payments are to be re- ported where they are made to governments by OMV. It is required that the report reflect the substance of each transaction and activity. Based on these require- ments, OMV has considered its reporting obligation as: 228 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION ▸ Where OMV makes a payment directly to the gov- ernment, these payments will be reported in full, ir- respective of whether this is made in the sole ca- pacity of OMV or in OMV’s capacity as the operator of a joint operation. ▸ In cases where OMV is a member of a joint opera- tion for which the operator is a state-owned entity (i.e., a government), payments made to that state- owned entity will be disclosed where it is possible to identify the reportable payment from other cost re- covery items. ▸ For host government production entitlements, the terms of the agreement have to be considered; for the purpose of reporting in this report, OMV will dis- close host government entitlements in their entirety where it is the operator. Materiality Payments made as a single payment or a series of re- lated payments that are below EUR 100,000 within a fi- nancial year are excluded from this report. Reporting currency Payments made in currencies other than euros are translated for the purposes of this report at the average rate of the reporting period. Payment types disclosed Royalties Royalties relating to the extraction of oil, gas and min- erals paid to a government are to be disclosed. Where royalties are paid in kind, the value and volume are re- ported. Dividends In accordance with the regulations, dividends are re- ported when paid to a government in lieu of production entitlements or royalties. Dividends that are paid to a government as an ordinary shareholder are not re- ported, as long as the dividends are paid on the same terms as that of other shareholders. For the year that ended December 31, 2021, OMV had no such reportable dividend payments to a govern- ment. Bonuses Bonuses include signature, discovery and production bonuses in each case to the extent paid in relation to the relevant activities. Fees These include license fees, rental fees, entry fees and all other payments that are paid in consideration for ac- cess to the area where extractive activities are per- formed. Production entitlements Under production sharing agreements (PSAs), the host government is entitled to a share of the oil and gas pro- duced and these entitlements are often paid in kind. The report will show both the value and volume of the government’s production entitlement for the relevant period in barrels of oil equivalent (boe). The government share of any production entitlement will also include any entitlements arising from an inter- est held by a state-owned entity as an investor in pro- jects within its sovereign jurisdiction. Production entitle- ments arising from activities or interests outside a state- owned entity’s sovereign jurisdiction are excluded. The report excludes fees paid to a government that are not specifically related to extractive activities or access to extractive resources. In addition, payments paid in return for services provided by a government are also excluded. Infrastructure improvements The report includes payments made by OMV for infra- structural improvements, such as the building of a road or bridge that serves the community, irrespective of whether OMV pays the amounts to non-government entities. These are reported in the period during which the infrastructure is made available for use by the local community. Taxes Taxes levied on income, production or profits of compa- nies are reported. Refunds will be netted against pay- ments and shown accordingly. Consumption taxes, per- sonal income taxes, sales taxes, property taxes and environmental taxes are not reported under the regula- tion. Although there is a tax group in place, the reported corporate income taxes for Austria relate entirely to the extractive activities in Austria of OMV’s subsidiaries, with no amounts being reported relating to OMV’s non- extractive activities in Austria. 229 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Payments overview The overview table below shows the relevant payments to governments that were made by OMV in the year that ended December 31, 2021. Of the seven payment types that are required by the Austrian regulations to be reported upon, OMV did not pay any dividends or infrastructure improvements that met the defined accounting directive definition, and therefore these categories are not shown. Payments overview In EUR 1,000 Country Austria Georgia Kazakhstan Malaysia Norway New Zealand Romania Tunisia United Arab Emirates Yemen Total Production entitlements — — — 255,733 — — — — — 48,730 304,463 Taxes Royalties Bonuses Fees Total (33,488) — 1,683 20,788 230,249 39,644 228,135 4,824 102,013 — 593,847 50,215 — — 68,235 — 45,507 131,465 12,059 118,270 4,637 430,388 — 1,418 — — — — — — — — 1,418 — — — 21,275 (1,422) 8,119 23,973 194 873 1,821 54,833 16,727 1,418 1,683 366,031 228,827 93,269 383,572 17,077 221,156 55,188 1,384,949 No payments have been reported for Libya for the year 2021 as OMV was not the operator. its subsidiaries are fully consolidated in OMV’s Group financial statements. On November 30, 2017, OMV acquired a stake of 24.99% in OJSC Severneftegazprom (SNGP). As SNGP is an associated company and therefore ac- counted for using the equity method in the OMV Group Consolidated Financial Statements, it does not meet the definition of a reporting entity in the context of the Austrian Commercial Code. On January 31, 2019, OMV and Sapura Energy Berhad closed the agreement to form a strategic partnership. The new entity, SapuraOMV Upstream Sdn. Bhd., and There were no major acquisitions during 2021. As per May 14, 2021, OMV Petrom finalized the sale of its 100% share in Kom-Munai LLP and Tasbulat Oil Corporation LLP (both based in Aktau, Kazakhstan). On August 1, 2021, SapuraOMV Upstream Sdn. Bhd. sold its share in SapuraOMV Upstream (PM) Inc., which held interests in various producing assets lo- cated offshore Peninsular Malaysia. 230 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Payments by country Austria In EUR 1,000 Governments Federal Ministry of Agriculture, Regions and Tourism Federal Ministry of Finance Total Projects Lower Austria Total Georgia In EUR 1,000 Governments LEPL State Agency of Oil and Gas Total Projects Offshore Black Sea Total Kazakhstan In EUR 1,000 Governments State Revenue Committee Total Projects Tasbulat, Turkmenoi, Aktas Komsomolskoe Total Production entitlements Taxes Royalties Bonuses Fees Total — — — — — — (33,488) (33,488) 50,215 — 50,215 (33,488) (33,488) 50,215 50,215 — — — — — — — — — — 50,215 (33,488) 16,727 16,727 16,727 Production entitlements Taxes Royalties Bonuses Fees Total — — — — — — — — — — — — 1,418 1,418 1,418 1,418 — — — — 1,418 1,418 1,418 1,418 Production entitlements Taxes Royalties Bonuses Fees Total — — — — — 1,683 1,683 711 972 1,683 — — — — — — — — — — — — — — — 1,683 1,683 711 972 1,683 231 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Malaysia In EUR 1,000 Production entitlements Taxes Royalties Bonuses Fees Total Governments Petroliam Nasional Berhad Ketua Pengarah Hasil Dalem Negeri Petronas Carigali SDN BHD Total Projects Block PM323/PM329 Block AAKBNLP/PM318 Block SK408/SK310 Total 86,6911 — 169,0422 255,733 48,2794 — 207,4535 255,733 74 20,714 — 20,788 2,431 2,296 16,061 20,788 68,2353 — — 68,235 8,7866 — 59,4497 68,235 — — — — — — — — 21,275 — — 21,275 4,437 849 15,989 21,275 176,275 20,714 169,042 366,031 63,933 3,146 298,953 366,031 1 Includes payments in kind for 2,436,100 bbl of crude oil valued using the average monthly price per boe 2 Includes payments in kind for 9,402,560 bbl of crude oil valued using the average monthly price per boe 3 Includes payments in kind for 3,596,433 bbl of crude oil valued using the average monthly price per boe 4 Includes payments in kind for 848,301 bbl of crude oil valued using the average monthly price per boe 5 Includes payments in kind for 10,990,359 bbl of crude oil valued using the average monthly price per boe 6 Includes payments in kind for 154,658 bbl of crude oil valued using the average monthly price per boe 7 Includes payments in kind for 3,441,775 bbl of crude oil valued using the average monthly price per boe Production entitlements Taxes Royalties Bonuses Fees Total — — — — — — — — — — — 230,249 — 230,249 63 63 6 — 230,118 230,249 — — — — — — — — — — — — — — — — — — — — (1,469) 36 10 (1,422) — — — (1,422) — (1,422) (1,469) 230,285 10 228,827 63 63 6 (1,422) 230,118 228,827 Norway In EUR 1,000 Governments Oljedirektoratet Skatteetaten Miljodirektoratet Total Projects Gulfaks Gudrun Aasta Hansteen Norway Exploration Projects Payments not attributable to projects Total 232 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION New Zealand In EUR 1,000 Production entitlements Taxes Royalties Bonuses Fees Total Governments Inland Revenue Ministry of Business, Innovation and Employment Environmental Protection Authority Total Projects Maari Māui Pohokura New Zealand exploration projects Payments not attributable to projects Total Romania In EUR 1,000 — — — — — — — — — — 39,644 — — — 39,644 — — — — 39,644 39,644 45,507 — 45,507 7,599 5,348 32,559 — — 45,507 — — — — — — — — — — — 39,644 7,983 136 8,119 77 7,916 13 108 4 8,119 53,490 136 93,269 7,676 13,265 32,572 108 39,648 93,269 Production entitlements Taxes Royalties Bonuses Fees Total Governments State budget Local councils National Agency for Mineral Resources (ANRM) National Company of Forests CONPET SA National Authority for Electricity Regulation (ANRE) Offshore Operations Regulatory Authority (ACROPO) Total Projects Onshore production zones Onshore Joint Operations Offshore Black Sea Payments not attributable to projects Total — — — — — — — — — — — — — 228,135 — 131,465 — — — — — — — — — — 228,135 — 131,465 — — 49,657 178,477 228,135 101,893 1,177 28,395 — 131,465 — — — — — — — — — — — — — — 4,037 2,505 14,996 98 359,599 4,037 2,505 14,996 98 1,690 1,690 647 23,973 21,628 — 655 1,690 23,973 647 383,572 123,521 1,177 78,707 180,168 383,572 233 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Tunisia In EUR 1,000 Governments Receveur des Finances Receveur des Douanes Entreprise Tunisienne d’Activités Pétrolières Trésorerie Générale de Tunisie Total Projects South Tunisia Total Production entitlements Taxes Royalties Bonuses Fees Total — — — — — — — 4,332 492 — — 4,824 4,824 4,824 — — 7,7971 4,261 12,059 12,0591 12,059 — — — — — — — 194 — — — 194 194 194 4,526 492 7,797 4,261 17,077 17,077 17,077 1 Includes payments in kind for 133,740 bbl of crude oil valued using the average monthly price per boe United Arab Emirates In EUR 1,000 Governments Abu Dhabi National Oil Company (ADNOC) Emirate of Abu Dhabi – Finance Department Total Projects Umm Lulu und SARB Total Yemen In EUR 1,000 Governments Ministry of Oil & Minerals Total Projects Block S2 Block 86 Total Production entitlements Taxes Royalties Bonuses Fees Total — — — — — — — 102,013 102,013 118,270 118,270 102,013 102,013 118,270 118,270 — — — — — 873 — 873 873 873 873 220,283 221,156 221,156 221,156 Production entitlements 48,7301 48,730 48,7301 — 48,730 Taxes Royalties Bonuses Fees Total — — — — — 4,6372 4,637 4,6372 — 4,637 — — — — — 1,821 1,821 254 1,567 1,821 55,188 55,188 53,621 1,567 55,188 1 Includes payments in kind for 844,582 boe valued at prices set by the Yemen Crude Oil Marketing Directorate 2 Includes payments in kind for 80,373 boe valued at prices set by the Yemen Crude Oil Marketing Directorate 234 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Vienna, March 9, 2022 The Executive Board Alfred Stern m.p. Chairman of the Executive Board, Chief Executive Officer and Executive Officer Chemicals & Materials Johann Pleininger m.p. Deputy Chairman of the Executive Board and Executive Officer Exploration & Production Reinhard Florey m.p. Chief Financial Officer Elena Skvortsova m.p. Executive Officer Marketing & Trading Martijn van Koten m.p. Executive Officer Refining 235 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION Abbreviations and Definitions A ACC Austrian Commercial Code ACCG Austrian Code of Corporate Governance AGM Annual General Meeting B bbl Barrel (1 barrel equals approxi- mately 159 liters) bbl/d Barrels per day bcf Billion standard cubic feet (60 °F/16 °C) bcm Billion standard cubic meters (32 °F/0 °C) bn Billion boe Barrel of oil equivalent boe/d Barrel of oil equivalent per day C CAGR Compounded annual growth rate CAPEX Capital Expenditure capital employed Equity including non-controlling interests plus net debt cbm Standard cubic meters (32 °F/0 °C) 236 CCS/CCS effects/inventory holding gains/(losses) Current Cost of Supply; inven- tory holding gains and losses represent the difference be- tween the cost of sales calcu- lated using the current cost of supply and the cost of sales calculated using the weighted average method after adjusting for any changes in valuation al- lowances in case the net realiz- able value of the inventory is lower than its cost. In volatile energy markets, measurement of the costs of petroleum prod- ucts sold based on historical values (e.g., weighted average cost) can have distorting effects on reported results (Operating Result, net income, etc.). The amount disclosed as CCS ef- fect represents the difference between the charge to the in- come statement for inventory on a weighted average basis (adjusted for the change in val- uation allowances related to net realizable value) and the charge based on the current cost of supply. The current cost of supply is calculated monthly using data from supply and pro- duction systems at the Refining & Marketing level. Clean CCS net income at- tributable to stockholders Net income attributable to stockholders, adjusted for the after-tax effect of special items and CCS Clean CCS Operating Result Operating Result adjusted for special items and CCS effects. The Group clean CCS Operat- ing Result is calculated by add- ing the clean CCS Operating Result of Refining & Marketing, the clean Operating Result of other segments and the re- ported consolidation effect ad- justed for changes in valuation allowances, in case the net re- alizable value of the inventory is lower than its cost. Clean CCS ROACE The clean CCS Return On Av- erage Capital Employed is cal- culated as NOPAT (as a sum of current and last three quarters) adjusted for the after-tax effect of special items and CCS, di- vided by average capital em- ployed (%). C&M Chemicals & Materials busi- ness segment CEE Central and Eastern Europe Co&O Corporate and Other CEGH Central European Gas Hub E cf Standard cubic feet (60 °F/16 °C) CGU Cash generating unit Clean CCS EPS Clean CCS Earnings Per Share are calculated as clean CCS net income attributable to stockholders divided by weighted number of shares. ECL Expected credit losses EPS Earnings Per Share; net in- come attributable to stockhold- ers divided by total weighted average shares E&P Exploration & Production busi- ness segment OMV ANNUAL REPORT 2021 / FURTHER INFORMATION EPSA Exploration and Production Sharing Agreement kboe Thousand barrels of oil equiva- lent equity ratio Equity divided by balance sheet total, expressed as a percent- age F FVOCI Fair value through other com- prehensive income FVTPL Fair value through the state- ment of profit or loss FX Foreign exchange G G2P Gas-to-power GDP Gross Domestic Product gearing ratio Net debt divided by equity, ex- pressed as a percentage H HSSE Health, Safety, Security, and Environment I IASs International Accounting Stand- ards IFRSs International Financial Report- ing Standards K kbbl/d Thousand barrels per day kboe/d Thousand barrels of oil equiva- lent per day km2 Square kilometer KPI Key Performance Indicator KStG Austrian Corporate Income Tax Act L leverage ratio Net debt divided by capital em- ployed, expressed as a per- centage LNG Liquefied Natural Gas LTIR Lost-Time Injury Rate per mil- lion hours worked M min Minute mn Million MPPH Mubadala Petroleum and Pet- rochemicals Holding Company L.L.C. MW Megawatt MWh Megawatt hour N NCI Non-controlling interests n.a. Not available n.m. Not meaningful net assets Intangible assets, property, plant and equipment, equity-ac- counted investments, invest- ments in other companies, loans granted to equity-ac- counted investments, total net working capital, less provisions for decommissioning and resto- ration obligations net debt Interest-bearing debts including bonds and finance lease liabili- ties less liquid funds (cash and cash equivalents) net income Net operating profit or loss after interest and tax NGL Natural Gas Liquids; natural gas that is extracted in liquid form during the production of hydrocarbons NOPAT Net Operating Profit After Tax; Net income + Net interest related to financing – Tax effect of net interest related to financing NOPAT is a KPI that shows the financial performance after tax, independent of the financing structure of the company. O OCI Other comprehensive income OECD Organisation for Economic Co- operation and Development 237 OMV ANNUAL REPORT 2021 / FURTHER INFORMATION OMV Group’s reported financial performance. T t Metric ton toe Metric ton of oil equivalent TSR Total Shareholder Return TWh Terawatt hour U UAE United Arab Emirates ÖBAG Österreichische Beteiligungs AG P payout ratio Dividend per share divided by earnings per share, expressed as a percentage Pearl Pearl Petroleum Company Lim- ited R R&M Refining & Marketing business segment ROACE Return On Average Capital Employed; NOPAT divided by average capital employed ex- pressed as a percentage ROE Return On Equity; net in- come/loss for the year divided by average equity, expressed as a percentage RRR Reserve Replacement Rate; to- tal changes in reserves exclud- ing production, divided by total production S sales revenues Sales excluding petroleum ex- cise tax Special items Special items are expenses and income reflected in the fi- nancial statements that are dis- closed separately, as they are not part of underlying ordinary business operations. They are being disclosed separately in order to enable investors to better understand and evaluate 238 Contacts and Imprint OMV Aktiengesellschaft Trabrennstrasse 6 – 8 1020 Vienna, Austria Tel. + 43 1 40440-0 info@omv.com www.omv.com Investor Relations Florian Greger OMV Aktiengesellschaft Trabrennstrasse 6 – 8 1020 Vienna, Austria Tel. + 43 1 40440-21600 Fax + 43 1 40440-621600 investor.relations@omv.com Publisher OMV Aktiengesellschaft, Vienna Photos Title: Getty Images/RyanJLane Pages 11, 14, 15: Andreas Jakwerth Pages 17: Kurt Prinz Further publications OMV Factbook ▸ www.omv.com/factbook OMV Sustainability Report ▸ www.omv.com/sustainability-report Notes: Figures in the tables and charts may not add up due to round- ing differences. Differences between percentages are dis- played as percentage points throughout the document. In the interest of a fluid style that is easy to read, non-gender- specific terms have been used in the notes chapter of this an- nual report. Disclaimer regarding forward-looking statements: This report contains forward-looking statements. Forwardlook- ing statements usually may be identified by the use of terms such as “outlook,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “target,” “objective,” “estimate,” “goal,” “may,” “will” and similar terms, or by their context. These forwardlooking state- ments are based on beliefs, estimates and assumptions cur- rently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties, both known and unknown, because they re- late to events and depend on circumstances that will or may occur in the future and are outside the control of OMV. Consequently, the actual results may differ materially from those expressed or implied by the forward-looking statements. Therefore, recipients of this report are cautioned not to place undue reliance on these forward-looking statements. Neither OMV nor any other person assumes responsibility for the accu- racy and completeness of any of the forward-looking state- ments contained in this report. OMV disclaims any obligation and does not intend to update these forward-looking state- ments to reflect actual results, revised assumptions and expec- tations, and future developments and events. This report does not contain any recommendation or invitation to buy or sell se- curities in OMV. 239 OMV Aktiengesellschaft Trabrennstrasse 6 – 8 1020 Vienna, Austria Tel. + 43 1 40440-0 info@omv.com www.omv.com 240 

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