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2023 ReportAnnual Report 2022 Annual Report 2022 The energy for a better life. At a Glance Five-year summary Sales revenues Operating Result Profit before tax Taxes on income Net income Net income attributable to stockholders of the parent Clean CCS Operating Result1 Clean CCS net income1 Clean CCS net income attributable to stockholders of the parent1 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 2022 2021 2020 2019 2018 62,298 12,246 10,765 (5,590) 5,175 3,634 11,175 5,807 4,394 35,555 16,550 1,050 875 603 1,478 1,258 1,686 1,026 679 5,065 4,870 (2,066) 2,804 2,093 5,961 3,710 2,866 23,461 3,582 3,453 (1,306) 2,147 1,678 3,536 2,121 1,624 22,930 3,524 3,298 (1,305) 1,993 1,438 3,646 2,108 1,594 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 expenditure2 Free cash flow before dividends Organic Free cash flow before dividends3 Return On Average Capital Employed (ROACE) Clean CCS ROACE1 Return On Equity (ROE) Equity ratio Gearing ratio exluding leases Leverage ratio Earnings Per Share (EPS) Clean CCS EPS1 Cash flow per share4 Dividend Per Share (DPS)5 Payout ratio5 Employees as of December 31 Polyolefin sales volumes6 Utilization rate steam crackers Europe6 Fuels and other sales volumes Europe Production cost Total hydrocarbon production Total Recordable Injury Rate (TRIR) in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn 56,429 26,628 683 2,207 29,431 53,798 49,271 21,996 19,899 8,130 9,347 29,366 21,555 4,771 5,962 40,375 16,863 3,632 4,686 19,923 36,961 15,342 1,726 2,014 16,850 in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in % in % in % in % in % in % 9,843 7,758 4,201 3,711 5,792 4,891 17 19 20 47 3 8 8,897 7,017 2,691 2,650 5,196 4,536 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 10 13 13 41 22 21 8 5 9 40 41 32 11 11 13 42 22 22 12 13 14 42 11 12 in EUR in EUR in EUR in EUR in % 11.12 13.44 23.73 5.05 45 22,308 6.40 8.77 21.47 2.30 36 3.85 2.08 9.60 1.85 48 22,434 25,291 5.14 4.97 12.42 1.75 34 19,845 4.40 4.88 13.46 1.75 40 20,231 in mn t in % in mn t in USD/boe in kboe/d in mn hours worked 5.66 74 15.5 8.20 392 5.93 90 16.3 6.67 486 5.95 73 15.5 6.58 463 5.59 93 18.6 6.61 487 5.27 94 17.8 7.01 427 1.23 0.96 0.60 0.95 0.78 1 Adjusted for special items and CCS effects; further information can be found in Note 4 – Segment Reporting – of the Consolidated Financial Statements 2 Organic capital expenditure is defined as capital expenditure including capitalized Exploration and Appraisal expenditure excluding acquisitions and contingent considerations. 3 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) 4 Cash flow from operating activities, based on total weighted average outstanding shares 5 2022: as proposed by the Executive Board and the Supervisory Board, subject to adoption by the Annual General Meeting 2023. Includes regular and special dividend. 6 As of 2021, 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 Chemicals & Materials In Chemicals & Materials, OMV is one of the world’s leading providers of advanced and circular polyolefin solutions with total polyolefin sales of 5.7 mn t in 2022, and a European market leader in base chemicals, fertilizers1 and plastics recycling. OMV supplies services and products to customers worldwide together with 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 presence1,2StatesUnitedMexicoJapanVietnamColombiaSouth AfricaChileArgentinaBrazilSouthKoreaMoroccoEgyptIndiaThailandIndonesiaMalaysiaSingaporeChinaFinlandSwedenPolandCzech RepublicSlovakiaRomaniaCroatiaHungarySerbiaBulgariaBelgiumNetherlandsUnited KingdomGermanySpainFranceAustriaItalyTurkeyGreeceUnitedArabEmirates1 On June 2, 2022, Borealis received a binding offer from AGROFERT for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 2 Chemicals & Materials presence comprises OMV’s petrochemicals presence as well as the production plants, sales offices, and logistics hubs of Borealis and Borouge.Refining & Marketing OMV’s Refining & Marketing business refines and markets fuels as well as feedstock for the chemical industry. 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. In addition, the activities include Gas & Power Eastern Europe, where OMV Petrom operates a gasfired power plant in Romania and is engaged in gas and power sales. UnitedArabEmiratesRefining & Marketing presenceFuels & GasFuelsGasOMV refineriesGas-firedpower plantNumber of filling stations17Germany1141Czech Republic104Slovakia206Hungary69Moldova93Bulgaria63Serbia437Austria555Romania118Slovenia2Turkey1 On May 1, 2022 OMV closed the transaction to sell its filling station business (285 filling stations) in Germany to EG Group. Furthermore, a divestment agreement was signed for Avanti Germany comprising the sale of 17 unmanned filling stations to PKN Orlen in December 2022.2 OMV has agreed to sell its business in Slovenia to MOL Group. The closing of this transaction is expected in 2023. 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-Pacific1. In 2022, daily production was 392 kboe/d2 (equal to 143 mn boe), with a roughly equal share of natural gas and liquids production. At year end 2022, proven reserves amounted to 1,037 mn boe. In the Gas Marketing Western Europe business, OMV markets and trades natural gas, operates natural gas storage facilities with a capacity of 30 TWh, and holds a 65% stake in the Central European Gas Hub (CEGH). Total hydrocarbon production2Middle East and AfricaAsia-PacificCentral and Eastern EuropeNorth Sea392kboe/d91kboe/d59kboe/d137kboe/d87kboe/dIn %Production and oil and gas split Oil and NGL Natural gasExploration & Production core regionsNorth SeaCentral and Eastern Europe3Middle East and Africa4Asia-Pacific1,3505085158348524617541 On February 27, 2023, OMV announced the start of the sales process for its E&P business in the Asia-Pacific region.2 Includes gas production from a JV in Russia in the amount of 17 kboe/d in 2022. OMV no longer considers Russia a core region. Starting March 1, 2022, Russian volumes are not included anymore in total production, due to a change in the consolidation method.3 In addition, OMV holds participations in exploration licenses in Bulgaria, Georgia, Australia, and Mexico.4 In 2022 OMV signed an agreement to sell its relevant operating entities in Yemen.AustriaNorwayRomaniaMalaysiaNew ZealandKurdistanRegionof IraqLibyaUnited Arab EmiratesTunisiaYemenGas Marketing Western EuropeGasstorageCEGHLNG terminalGermanyAustriaHungaryNetherlandsBelgiumFINANCIAL CALENDAR April 12, 2023 Trading Update Q1 2023 April 28, 2023 Results January–March 2023 July 10, 2023 Trading Update Q2 2023 July 28, 2023 Results January–June and Q2 2023 October 9, 2023 Trading Update Q3 2023 October 31, 2023 Results January–September and Q3 2023 ▸ This financial calendar represents only an extract of the planned dates. 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/2022 ▸ The PDF version of this annual report can be found here: www.omv.com/annual-report-2022 6 Contents 8 1 — TO OUR SHAREHOLDERS 9 12 14 18 Statement of the Chairman of the Executive Board OMV Executive Board Report of the Supervisory Board OMV on the Capital Markets 23 2 — DIRECTORS’ REPORT 25 28 31 38 44 47 50 62 70 75 82 83 88 About OMV Market Outlook Strategy Sustainability Health, Safety, Security, and Environment Employees OMV Group Business Year Chemicals & Materials Refining & Marketing Exploration & Production Outlook Risk Management Other Information 93 3 — CONSOLIDATED CORPORATE GOVERNANCE REPORT 105 4 — CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 106 116 117 118 120 122 123 Auditor’s Report Consolidated Income Statement for 2022 Consolidated Statement of Comprehensive Income for 2022 Consolidated Statement of Financial Position as of December 31, 2022 Consolidated Statement of Changes in Equity for 2022 Consolidated Statement of Cash Flows for 2022 Notes to the Consolidated Financial Statements 239 5 — FURTHER INFORMATION 240 247 250 Consolidated Report on the Payments Made to Governments Abbreviations and Definitions Contacts and Imprint 7 TO OUR SHAREHOLDERS 8 — 22 9 — Statement of the Chairman of the Executive Board 12 — OMV Executive Board 14 — Report of the Supervisory Board 18 — OMV on the Capital Markets OMV ANNUAL REPORT 2022 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD “Success is important. But what really matters is the future.” 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/2022 Mr. Stern, what’s the first things that come to your mind when you think about 2022? First of all, I share the disbelief of everyone at the Russian attack on Ukraine. I clearly see the pain that it causes every day. I also think about the fact that, in February 2022, OMV swiftly reacted to this unprecedented situation and tackled the various consequences – thanks to our employees, who were still dealing with the ongoing effects of the COVID-19 pandemic and had to throw themselves straight into the next challenge. That deserves huge re- spect. But I don’t want the entirely new direction and transformation of our Company to get lost in all of that. We initiated this path during the difficult environment of the previous year and have been following it consequently ever since. Was it immediately clear what had to be done regarding Russia? For us, there was no option but to immediately reevaluate our entire Russian business in line with the sanctions. We removed Russia from our core regions, and decided to make no further investments there. Additionally, we undertook value adjustments for our activities in Russia and conducted a strategic assessment of our shareholding in a natural gas field. We are considering all options in this regard, including sale and withdrawal, but we’re also aware that doing that in the current legal environment is an extremely taxing endeavor. At the same time, how- ever, we’ve also been focusing on securing the supply to our customers. We have succeeded in doing this by us- ing alternative sources of supply, securing transport capacity, and pursuing a consistent storage strategy. The gas task force we set up for this purpose performed and continues to perform incredible work in this regard. OMV’s new strategic direction was almost overshadowed by the outbreak of war. Was it also superseded by the events? Not at all. We obviously had to make tactical adjustments, but the strategy was confirmed with all of its corner- stones. As a result of the war, it became clearer than ever that the world needed a new footing for its energy sup- ply. With the importance of sustainability in mind, we need to reduce our use of resources, of fossil fuels, by re- placing them with alternatives, and to find a quicker way to drive forward the circular economy. We describe in our Strategy how that might work, and implementing it is a top priority. With the development of the Strategy 2030, you’ve also redefined OMV’s very reason for being. We have chosen a fundamentally different path, analyzed future global developments, and asked ourselves what OMV will look like in ten, twenty, or thirty years’ time. The result is summarized in our purpose “Re-inventing es- sentials for sustainable living”: we see it as our duty to develop solutions to help us not only to ensure our quality of life, but more importantly to enable more people to share this sense of well-being with the smallest possible car- bon footprint. Stemming from this aspiration, 2023 sees the establishment of our revised corporate structure and OMV’s new strategic direction in all three business segments: the gradual replacement of fossil-based energy sources through sustainable operations in the new Energy business segment; the goal for the Fuels & Feedstock segment, as a leading provider of sustainable fuels and chemical feedstocks, to contribute to climate-friendly mo- bility and materials management; and for the Chemicals & Materials business to become both a world leading pro- vider of special polyolefin solutions and a leading Company in the field of circular economy. 9 OMV ANNUAL REPORT 2022 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD » The significance of energy companies has taken on a whole new dimension. Our industry is one of the key levers for a successful reversal of climate change. ALFRED STERN Chairman of the Executive Board There is also criticism. How do you convince people of the reliability of your strategy? From our point of view, there is no more meaningful path for OMV to take toward a sustainable future. The Energy business segment is proving its worth as the financial driver of our transformation. The sustainable direction of Fuels & Feedstock is taking shape. The same applies for Chemicals & Materials. We only presented the Strategy 2030 a year ago. Operationally, we’ve launched two promising geothermal projects in Austria and Germany and recently entered into an agreement to form a joint venture to develop the geothermal potential in the Vienna Basin. We’ve been able to celebrate initial success in terms of sustainable aviation fuels, are putting our ReOil ® 2000 plant into operation in Schwechat with a processing capacity of 16,000 t this year, and are working on the global licensing of the technology. Also in Schwechat, Borealis is planning a further plant for advanced recycling, and this year we will complete the largest electrolysis plant in Austria, which will produce 1,500 t green hydrogen per year. Financially, we are in a very strong position to invest in growth. By 2030, an average of 40 percent of our invest- ments will be in sustainable projects. All of this shows that we are consistently taking the path we have chosen. Geopolitical tension and climate change are placing OMV increasingly in the spotlight of public interest. How do you handle this? The significance of energy companies has taken on a whole new dimension. Our industry is one of the key levers for a successful reversal of climate change. At the same time, we need to help ensure a secure and affordable en- ergy supply – now more than ever in the wake of the Russian attack on Ukraine. If we want to fundamentally rea- lign a company under these conditions, we need not just a few but all stakeholders on board – no matter whether they’re owners, the capital market, the procurement or sales market, employees, prospective employees, politi- cians, the media, or the general public. 10 OMV ANNUAL REPORT 2022 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD The current environment is generating high profits, which are controversially being referred to as “excess profits.” What’s your opinion? The 2022 business year was an exceptionally successful one and the generated returns will need to be deployed in a focused manner: on the one hand for a secure energy supply in the future, but predominantly also for the sus- tainable, successful development of the Company over the long term. That requires enormous investment in re- search, development, and innovative production processes. Of course, we also want our shareholders to partici- pate appropriately in the success of the Company. That’s why we will propose OMV’s highest ever regular divi- dend of EUR 2.80 to the Annual General Meeting this year, and on-top of that a special dividend of EUR 2.25. In order to ensure an appropriate participation also over the long term, we have modified our dividend policy and in- troduced the special dividend as an additional instrument. With this modified dividend policy we aim to distribute approximately 20 to 30 percent of the cash flow from operating activities including net working capital effects, if sufficient funds are available and the Company’s leverage ratio is below 30 percent. You described the Chemicals & Materials business as the future growth driver of OMV. What makes you so sure of this despite the current weak market? The market will grow, especially considering the increasing number of people living in economic prosperity. At the same time, we need to keep an eye on dwindling resources and the ever-growing threat to the climate. And this is where our C&M business will play a key role, through the accelerated development and production of high-quality, sustainable chemical and plastic products, which ensure the efficient use of resources and increase energy effi- ciency of solar panels, wind farms, electricity transmission, and mobility solutions – to name just a few examples. Furthermore, we will make use of OMV and Borealis’ expertise in the area of mechanical and chemical recycling of plastics in order to take a leading role in the global circular economy. We need to succeed in decoupling economic growth and consumption of resources. This will help to lower emissions and reduce waste. Overall, this offers enormous market potential that we want to capitalize on as much as possible. A strategy has long-term targets. As the war on Ukraine shows, time and again, unforeseen events have huge implications. How is it possible to know at all times that you’re on the right path? That’s very true. As a company, you also need to be able to act on developments at short notice. A well thought out strategy provides the necessary scope and flexibility to do this. The OMV strategy has proven itself in this re- gard over the past twelve months. At the same time, however, we must never lose sight of the overarching goal, and that is and will remain simultaneously addressing the climate crisis and the ever-increasing consumption of energy and resources. This demands new solutions. For this reason, the long-term success of a company de- pends on its ability to harness sustainability as a driver of innovation and growth. We have made sustainability the starting point and the core element of our strategy, and therefore the foundation of our successful development. Vienna, March 9, 2023 Alfred Stern m.p. 11 OMV Executive Board Alfred Stern Chairman of the Executive Board and Chief Executive Officer Reinhard Florey Chief Financial Officer Daniela Vlad Executive Vice President Chemicals & Materials Martijn van Koten Executive Vice President Fuels & Feedstock Berislav Gaso Executive Vice President Energy OMV ANNUAL REPORT 2022 / REPORT OF THE SUPERVISORY BOARD Dear Shareholders, The challenges posed by the geopolitical and macroeconomic climate became even more pronounced in 2022: on top of the impact of the COVID-19 pandemic came the war in the Ukraine, a complex energy crisis and the highest rate of inflation for 70 years. Thanks to our new strategy, we’ve set the course for a sustainable future and already taken the first steps in this transformation. At the same time, however, the environment demanded short-term tacti- cal adjustments in order to be able to best secure the supply of energy. I personally believe OMV management and employees did an extraordinary job balancing these different priorities. During this time of uncertainty, both the Company’s ability to react quickly to changing circumstances and its high degree of diversification have once again been proven to be important. While in the Refining & Marketing business segment high refining margins led to a record result, the high energy prices in the chemical sector combined with a decline in demand had a negative impact. Bolstered by high oil and gas prices, the Exploration & Production seg- ment was able to make a significant contribution to the overall performance of the Company. All of this led to the best result in the history of OMV. We want to allow our shareholders to also benefit from this strong result and the stable financial situation. For this reason, we promised a special dividend of EUR 2.25 per share during the course of the 2022 financial year, and fundamentally expanded our dividend policy to include a special dividend instrument. For you, dear shareholders, this means that we will be proposing a total dividend of EUR 5.05 per share to the Annual General Meeting for the previous financial year. As a Supervisory Board, our key priorities include the strategy, succession planning for Executive Board level, governance topics, and the approval of larger investment projects. I’m able to report positive developments in all of these areas. Below, I would like to inform you about the Supervisory Board’s work during the 2022 financial year. After having initially focused predominantly on the strategy, we then moved on to the topics of corporate structure and management (Strategy, Structure, People). Composition of the Executive Board and Supervisory Board In December 2021, the Supervisory Board approved the new strategy. Because the key points of this strategy re- quire different skill sets and as we strive to achieve more diversity and internationality in general, a few amend- ments were made to the composition of the Executive Board and the Supervisory Board in 2022. At the beginning of 2023, a new organizational structure for the Group came into force – the business segments are now divided into Fuels & Feedstock, which includes refining, marketing, and trading, Chemicals & Materials, which comprises the entire chemicals value chain, and Energy, meaning the traditional exploration, production, and gas business, plus the low-carbon business. Several changes to the composition of the Executive Board had already been made in preparation for this new operating model: The areas that were formerly the Refining and Marketing & Trading business segments were combined to form the new Fuels & Feedstock business segment. Elena Skvortsova, Executive Officer Marketing & Trading, left OMV’s Executive Board at the end of October 2022 by mutual agreement. At the meeting of October 27, 2022, the Super- visory Board tasked Martijn van Koten, who had previously headed the Refining segment, with also leading the Marketing & Trading business segment from November 2022 as a result of the consolidation to form the new Fuels & Feedstock segment from January 2023. As a manager, Martijn van Koten has an extraordinary wealth of international experience in the refining and chemicals businesses, and places a strict focus on the market and cus- tomers. In November 2022, the Supervisory Board appointed external candidate Daniela Vlad as the new Executive Board member in charge of the Chemicals & Materials business segment, which was previously led by Executive Board Chairman Alfred Stern. She has been in this position since February 1, 2023. Daniela Vlad is a manager with many years of international experience in the chemicals business and in leading strategic transformations. She brings chemical and financial expertise and experience in the field of sustainable technical solutions, which are indispensable for profitable growth with emphasis on sustainability and innovation. Finally, at their meeting on December 13, 2022, the Supervisory Board appointed Berislav Gaso as Executive Board member for the Energy business segment, effective from March 1, 2023. On the same day, Johann Plein- inger handed in his resignation with effect from the end of 2022. To bridge the two-month gap, the Supervisory Board entrusted Reinhard Florey with running the Energy agenda. Berislav Gaso is a proven energy expert with extensive international experience of major transformations, and takes responsibility for exploration and production activities in 13 countries. 14 OMV ANNUAL REPORT 2022 / REPORT OF THE SUPERVISORY BOARD » In 2022, we launched the largest transformation in the Company’s history. The decisions taken around strategy, structure, and management will pave the way for a more sustainable future. MARK GARRETT Chairman of the Supervisory Board There were also changes to the Supervisory Board in 2022. At the Annual General Meeting of June 3, 2022, Edith Hlawati, Robert Stajic, and Jean-Baptiste Renard were elected to the Supervisory Board. Christine Catasta, Christoph Swarovski, and Cathrine Trattner resigned from the Supervisory Board. Edith Hlawati took on the role of the first Deputy Chairwoman of the Supervisory Board. There was one change to the employee representatives during 2022. Mario Mayrwöger was elected as successor to Gerhard Singer on the Supervisory Board with effect from June 7, 2022. 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. Following the Supervisory Board sign-off, the Executive Board presented the Strategy 2030 at the Capital Markets Day in March. The aim of the strategy is for OMV to evolve into an integrated provider of sustainable fuels, chemi- cals, and materials with a strong focus on solutions for the circular economy, and to achieve its goal of net zero emissions by 2050. The Sustainability and Transformation Committee of the Supervisory Board, founded at the end of 2021, got to work in 2022. During four meetings, it addressed topics related to ESG, with the focus naturally being on climate issues. The committee supports and oversees the transformation toward a more sustainable business model. As Chairman of the Supervisory Board of a listed company, I really value discussions with, and feedback from, investors. After two years of only being able to hold virtual meetings because of COVID-19, it was such a pleasure to combine those virtual sessions with meetings in person with our large institutional investors, a voting rights con- sultant, and two climate-protection-related associations of investors in Frankfurt and London in December 2022 as part of a Governance Roadshow. The feedback we received reinforced our commitment to our transformation strategy and confirmed our focus on ESG topics. As in the past, training specifically designed for the Supervisory Board took place in 2022. The Supervisory Board’s annual self-assessment, based on surveys, was supported by an external consultancy firm. The results are used to help decide which issues and activities to prioritize in 2023. 15 OMV ANNUAL REPORT 2022 / REPORT OF THE SUPERVISORY BOARD Activities of Supervisory Board committees In 2022, the Presidential and Nomination Committee was mainly occupied with preparing to make decisions about appointments to the Executive Board for the Fuels & Feedstock, Chemicals & Materials, and Energy busi- ness segments. Furthermore, it focused on the issue of long-term Executive Board succession planning. The Remuneration Committee handled the updates to the Remuneration Policy for the Executive Board, also taking into account feedback from the capital markets. It also discussed and agreed on the contractual conditions for the new members of the Executive Board, and the termination agreements for the Executive Board members who resigned. At the Annual General Meeting 2022, in addition to being presented with the Remuneration Reports for the Execu- tive Board and Supervisory Board, shareholders were able to vote on the revised Remuneration Policy for the Ex- ecutive Board. In this policy, the performance criteria and all variable remuneration elements had been adjusted according to the new Strategy 2030, and ESG criteria were more strongly weighted. In 2022, 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 OMV Group’s long-standing annual auditor, Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H., was present at every meeting of the Audit Committee with one exception – the meeting that took place as part of the selection process for the Group’s auditor where other auditing companies were presenting to the committee. At the ordinary Annual General Meeting in 2023, the elec- tion of a new auditing company will be on the agenda. Meetings of the Portfolio and Project Committee are held regularly prior to the meetings of the Supervisory Board. The committee used its meetings in 2022 to prepare decisions regarding key investment and M&A projects on the basis of extensive information and intensive discussions. The newly formed Sustainability and Transformation Committee met four times in 2022. Its tasks include over- seeing the strategy in terms of sustainability, ESG standards, performance, and processes, including HSSE and climate protection in particular. Further details regarding the activities of the Supervisory Board and its committees can be found in the (Consoli- dated) Corporate Governance Report. 16 OMV ANNUAL REPORT 2022 / 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 2022 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 2022 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 reviewed 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 its review, the Supervisory Board considered appropriate the Executive Board’s proposal to the Annual General Meeting to distribute (i) a regular dividend of EUR 2.80 per share, which corresponds to an increase of EUR 0.50 over the previous year, and (ii) a special dividend of EUR 2.25 per share, and supported this resolution proposal. The remaining amount of the net profit after the dividend distribution will be carried forward to new ac- count. The Supervisory Board will review the separate consolidated non-financial report (Sustainability Report) individually, and this report will be published separately 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 2022 financial year, which was marked by so much uncertainty. I would like to give special thanks to OMV’s shareholders for their continued trust as well as to all of OMV’s cus- tomers and partners. Vienna, March 9, 2023 For the Supervisory Board Mark Garrett m.p. 17 OMV ANNUAL REPORT 2022 / OMV ON THE CAPITAL MARKETS OMV on the Capital Markets 2022 was a difficult year for global equities. High inflation, the Ukraine war, and Chinese COVID-19 lockdowns were the main culprits. Oil and gas stocks strongly outperformed the market, mainly due to high commodity prices. While OMV fared better than the ATX and the wider European market, it lagged behind its peers, weighed down by concerns triggered by the Ukraine war. Financial markets High inflation rates, the Ukraine war, and China’s zero- COVID-19 policy were the main reasons why the per- formance of European equities was exceptionally weak in 2022. With the global MSCI World Index and Eu- rope’s STOXX 600 down 18% and 13% respectively according to Bloomberg, the yearly performance was the worst since the global financial crisis in 2007/2008. Fixed income could not help in the same way as it often does when equities are down. The high inflation rate drove central banks around the world to hike interest rates. The resulting tighter liquidity and raised volatility negatively affected bond market performance. On the flip side, interest on traditional “risk-free” savings ac- counts recovered in such a way that they are once again an attractive investment vehicle for the first time in over a decade. In a comparison of all sectors, energy equities per- formed best in Europe and the United States. This was mainly a consequence of surging energy prices, which were principally caused by supply concerns fueled by the war in Ukraine. On the crude oil side, the strength of the Brent price in the first half of 2022, driven by strong demand and Russian supply concerns, turned into a gradual decline mid-year that lasted through the remainder of the year. This was caused by the interest rate hikes and the COVID-19 lockdowns in China, which weighed on de- mand. However, the 2022 average of the Brent price was clearly above that of the three respective prior years. Benchmark prices for natural gas spot trading at Eu- ropean hubs continued at a record-high level during most of 2022, with a surge to unprecedented levels to- ward the end of the summer. Prices were mainly driven by the fear of a supply shortfall during the winter heat- ing season, as it was unclear whether European stor- age operators would receive sufficient volumes from Russia and whether it can potentially be replaced by deliveries from alternative sources like LNG and piped gas from Norway. Only toward the end of the year did European natural gas spot prices recede back to normal levels, as it be- came clear that storage facilities would be filled suffi- ciently and a looming supply shortfall would most likely be averted. Added to that was the unusually mild weather at the beginning of winter and the perspective of expanding supply from sources other than Russia, with Germany’s first LNG import terminal commencing operations in December. At a glance 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 ratio3 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 % 2022 327.1 15.7 9.8 58.26 36.02 48.10 11.12 58.55 23.73 5.05 45 10.5 1 2021 2020 2019 327.0 16.3 10.4 55.00 32.74 49.95 6.40 47.41 21.47 2.30 36 4.6 57 327.0 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 2018 326.7 12.5 9.1 56.24 37.65 38.25 4.40 36.44 13.46 1.75 40 4.6 (25) 1 As of December 31 2 Cash flow from operating activities, based on total weighted average outstanding shares 3 2022: as proposed by the Executive Board, subject to review by the Supervisory Board; subject to approval by the Annual General Meeting 2023. Includes regu- lar and special dividends 4 Assuming reinvestment of the dividend 18 OMV ANNUAL REPORT 2022 / OMV ON THE CAPITAL MARKETS OMV share performance Starting the year at EUR 49.95, OMV’s share price was approaching EUR 60 in mid-February (year high of EUR 58.26 reached on February 11). With the subse- quent outbreak of the Ukraine war, the stock lost al- most a third of its value within less than three weeks. However, while having to change the consolidation method for its Russian operations, OMV could prove to investors that the company was able to continue to op- erate with high profits despite the changed circum- stances. By early June, on the back of solid results and a higher dividend payment (EUR 2.30 per share), OMV’s share price was back above EUR 55 each. In the following weeks, the financial consequences of the technical incident at the Schwechat refinery in con- junction with the general natural gas supply insecurity in Europe and the natural gas trading difficulties cre- ated by the war in Ukraine led to a new downturn in OMV’s share price, resulting in the year’s low of EUR 36.02 on September 23. Persistent exceptional profitability, improving visibility regarding the supply of natural gas during the heating season, and the introduction of a new and additional special dividend option and the announcement of one helped the share price recover to the high forties during the final two months of the year. OMV’s share price closed the year at EUR 48.10. The average daily trading volume of OMV shares in 2022 was 420,539 shares (2021: 451,538). At year end, OMV’s total market capitalization stood at EUR 15.7 bn, compared to EUR 16.3 bn at the end of 2021. OMV share price performance 2022 In EUR OMV’s share price declined by 3.7% across 2022, thus showing a slightly better performance than the wider Euopean market (FTSE Eurotop 100: –7.1%) and a sig- nificantly better performance than the Vienna Stock Ex- change’s blue chip index ATX (–19.0%). However, the stock underperformed compared to the European oil and gas sector (FTSEurofirst 300 Oil & Gas +26.9%). Assuming dividend reinvestment, the total shareholder return for the year was 0.8%. Measured over a five- year period, OMV generated a better return. A EUR 100 investment in OMV stock at year end 2017 with continuous dividend reinvestment in further OMV stock would have grown by an average annual return rate of 2.7% to EUR 114 at year end 2022. 19 OMV ANNUAL REPORT 2022 / OMV ON THE CAPITAL MARKETS OMV shares: long-term performance compared with indices 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 2022 and was as follows at year end: 43.1% free float, 31.5% Österreichische Beteiligungs AG (ÖBAG, representing the Austrian state), 24.9% Mubadala Petroleum and Petrochemicals Holding Company (MPPH), 0.4% employee share programs, and 0.1% treasury shares. Shareholder structure In % Proposed regular dividend of EUR 2.80 and special dividend of EUR 2.25 per share for the business year 2022 On June 3, 2022, OMV’s Annual General Meeting ap- proved a regular dividend of EUR 2.30 per share for 2021, as well as all other agenda items, including the new Remuneration Policy for the Executive Board and Supervisory Board, the Long-Term Incentive Plan 2022, and the Equity Deferral 2022. Supervisory Board elections were also held. For the upcoming Annual General Meeting (to be held May 31, 2023), the Executive Board will propose a reg- ular dividend of EUR 2.80 per share, plus a special divi- dend of EUR 2.25 per share for 2022. This represents an annual increase of the regular dividend of 22%. Based on the total amount of dividends paid (regular plus special) of EUR 5.05 per share, the dividend yield calculated using the closing price on the last trading day of 2022 amounts to 10.5%. Amended 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 its regular dividend every year or at least to maintain the level of the respective previous year. In addition, OMV has added special dividends as a new, additional instrument to the existing dividend pol- icy. If the leverage ratio is below 30%, OMV aims to distribute approximately 20–30% of the OMV Group’s operating cash flow (including net working capital ef- fects) per year to its shareholders through its regular dividend, as a priority, and additionally, if sufficient funds are available, through the new instrument of a special dividend. In case of a leverage ratio of 30% or higher, OMV’s progressive regular dividend will be maintained, but no special dividend shall be paid. 20 OMV ANNUAL REPORT 2022 / OMV ON THE CAPITAL MARKETS An analysis of our shareholder structure carried out at the end of 2022 showed that institutional investors held 30.8% 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 24%, German share- holders made up 11%, and those based in France 9%. The share of investors from Austria was 6%, and Nor- wegian investors represented 2%. 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 2022, OMV held a to- tal of 201,674 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 ranked as best in class in various ESG ratings in 2022. OMV received an AAA, the high- est score, in the MSCI ESG Ratings assessment for the tenth year in a row. This places OMV among the top 10% of oil and gas companies globally. OMV also maintained its Prime status in the ISS ESG rating with a score of B–. This ranks us among the top 10% of oil and gas companies in terms of ESG performance. OMV’s Sustainalytics ESG Risk Rating now stands at 27.4 (from 26.7 previously), with a confirmed medium risk rating.This puts us in the top seventh percentile of oil and gas producers. OMV was also recognized by CDP with a score of A– (Leadership) in the Climate Change category for the seventh year in a row, 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 indices. Most notably, OMV was included in the Dow Jones Sustaina- bility™ Indices (DJSI World and DJSI Europe) for the fifth year in a row as the only Austrian company. OMV attained a score in the 97th percentile of its industry in S&P Global’s Corporate Sustainability Assessment (CSA), the basis of the DJSI, in 2022. The DJSI World Index represents the top 10% of the largest 2,500 com- panies 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 indices, such as the S&P Europe 350®, which is based on the S&P Global CSA (like the DJSI). OMV is included in many MSCI indices, such as the prestigious ACWI ESG Leaders Index and the ACWI Low Carbon Leaders In- dex. Furthermore, OMV maintained its position in the FTSE4Good Index Series, which is used by a wide va- riety of market participants to create and assess re- sponsible investment funds, and maintained its inclu- sion in the STOXX® Global ESG Leaders index (based on OMV’s assessment by Sustainalytics). 21 OMV ANNUAL REPORT 2022 / OMV ON THE CAPITAL MARKETS Credit ratings: Fitch upgraded outlook Investor Relations activities OMV is rated A– by Fitch and A3 by Moody’s (both with a stable outlook). While Moody’s did not take any rating action during 2022, Fitch confirmed OMV’s A– rating and revised its outlook from “negative” to “stable” on March 28, 2022. Fitch’s outlook revision reflects its ex- pectations of OMV’s strong financial performance based on its higher oil and gas price assumptions, and OMV’s new strategy gradually focusing on chemicals and materials, as well as sustainable fuels. This was confirmed on October 14, 2022. Moody’s confirmed its rating and outlook for OMV in early 2023. Analyst coverage During 2022, the total number of sell-side analysts cov- ering OMV’s share increased to 22, up from 21 at the end of 2021. This development further improves the visibility of OMV in the financial community. AlphaValue and Bank Pekao joined the list of covering brokerages, while Concorde Securities discontinued coverage. The majority of recommendations are “buy” or equivalent, with a share of 62% of all recommendations at the end of 2022. “Hold” recommendations slightly decreased to 33% and there was one “sell” recommendation (com- pared to 0 last year), representing a share of 5% of all recommendations. Following the share price develop- ment, the average target price for OMV decreased slightly to EUR 58.80 at the end of 2022, from EUR 59.83 per share a year earlier. OMV’s Investor Relations department continued the in- tensive dialogue with the capital market during 2022. The main event of the year was the presentation of OMV’s new Strategy 2030 at a Capital Markets Day held virtually on March 16. In the days that followed, a multitude of virtual conversations took place, giving OMV’s executives a chance to lay out the details of the new strategy to analysts and investors. Beginning in June 2022, easing pandemic restrictions allowed the gradual restart of a selection of in-person meetings with international investors, always in strict compliance with the respective health and safety regu- lations. In addition to these in-person meetings, the fa- miliar routine of virtual meetings remained in place, re- ducing the time, costs, and carbon emissions of Inves- tor Relations activities. In December 2022, OMV organized a governance road show with the Chairman of the Supervisory Board, both virtually and physically, in London and Frankfurt, con- tinuing the dialogue with the governance experts of some of our largest shareholders. Overall, the Investor Relations department again ful- filled its mission to provide comprehensive insight into OMV’s strategy and business operations to all capital market participants, thereby guaranteeing equal treat- ment of all stakeholders. In this way, OMV’s Executive Board was able to continue the constant dialogue with investors and analysts in Europe, North America, and Asia throughout 2022, regardless of the restrictions im- posed to control the pandemic. 22 DIRECTORS’ REPORT 23 — 91 25 — About OMV 28 — Market Outlook 31 — Strategy 38 — Sustainability 44 — Health, Safety, Security, and Environment 47 — Employees 50 — OMV Group Business Year 62 — Chemicals & Materials 70 — Refining & Marketing 75 — Exploration & Production 82 — Outlook 83 — Risk Management 88 — Other Information OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 24 OMV ANNUAL REPORT 2022 / 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 with a special focus on circular economy. In 2022, Group sales amounted to EUR 62 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 22,300 employees work at its integrated European sites. Our purpose In 2022, OMV implemented a new Group-wide purpose as a fundamental part of our new strategy for becoming a leading company in sustainable fuels, chemicals, and materials. Our new purpose, “Re-inventing essentials for sustainable living,” guides the Company like a North Star, toward its goal of becoming a net-zero emissions company. To ensure this purpose is fully embraced, we have designed new values and behaviors that align with our new direction. The new values will be launched in 2023, to empower our employees and drive our Company toward a sustainable future. Our business segments In Chemicals & Materials, OMV is one of the world’s leading providers of advanced and circular polyolefin solutions with total polyolefin sales of 5.7 mn t in 2022 (2021: 5.9 mn t). It is also a European market leader in base chemicals, fertilizers1, and plastics recycling. The Company supplies services and products to customers worldwide through OMV and Borealis, and its two joint ventures: Borouge (with ADNOC, based in the UAE and Singapore) and Baystar™ (with TotalEnergies, based in the US). 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 in the UAE. OMV’s total global processing capacity amounts to around 500 kbbl/d. Fuels and other sales volumes in Europe were 15.5 mn t in 2022 (2021: 16.3 mn t) and the retail network consists of around 1,800 filling stations in ten European countries. In the Gas & Power Eastern Europe business, OMV Petrom operates a gas-fired power plant in Romania and is engaged in gas and power sales. In 2022, natural gas sales amounted to 36.2 TWh (2021: 39.6 TWh) and net electrical output was 5.0 TWh (2021: 4.8 TWh). 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-Pacific2. Daily production was 392 kboe/d3 in 2022 (2021: 486 kboe/d), with a roughly equal share of natural gas and liquids produc- tion. In the Gas Marketing Western Europe business, OMV markets and trades natural gas with sales vol- umes amounting to 111.2 TWh in 2022 (2021: 156.8 TWh). Furthermore, OMV operates natural gas storage facilities with a capacity of 30 TWh and holds a 65% stake in the Central European Gas Hub (CEGH). Our new corporate structure To drive sustainable growth and innovation, starting with January 1st, 2023, OMV reorganized its corporate structure in three business segments: Chemicals & Ma- terials, Fuels & Feedstock, and Energy. For more information about the new corporate structure and the Strategy 2030, see the chapter Strategy. 1 On June 2, 2022, Borealis received a binding offer from AGROFERT, a.s. for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 2 On February 27, 2023, OMV announced the start of the sales process for its E&P business in the Asia-Pacific region. 3 Production figures in 2022 include 17 kboe/d from Russia (2021: 96 kboe/d); OMV no longer considers Russia a core region as of March, 2022. Furthermore, Russian volumes are no longer included in total production, due to a change in the consolidation method. 25 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Our value chain 05 Refining OMV operates three refineries in Europe and holds a 15% share in ADNOC Refining in the UAE, where it processes sustainable and fossil-based feedstocks into a wide range of refined products. 07 Base Chemicals Base chemicals are produced at five major sites in Europe and at the joint ventures of Borealis, Borouge and Baystar. Most of the base chemicals are processed internally into polyolefins. 09 Mechanical Recycling Borealis runs four mechanical recycling plants in Austria and Germany, where plastic waste is processed into high quality recyclate. 06 Chemical Recycling OMV is currently constructing a demo plant based on its proprietary ReOil® technology which will turn plastic waste, not fit for me- chanical recycling, into valuable resources. In addition, Borealis has a controlling stake in Renasci, a Belgian provider of innovative recycling solutions. 03 Circular Resources OMV aims to further increase its use of circular resources such as bio-feedstocks, for example waste and residue streams, as well as cultivated algea, plastic waste, and green hydrogen. Furthermore, OMV is also actively looking into synthetic fuels and feedstocks based on CO2. 0(cid:22) 03 0(cid:10) 0(cid:8) 0(cid:4) 02 Renewable Energy OMV is utilizing renewable energy, such as photovoltaic, primarily for powering its own operations, and plans to build up a renew- able energy portfolio with a strong focus on geothermal energy. 0(cid:20) 01 Hydrocarbon Production OMV explores, develops, and produces hydrocarbons (crude oil, natural gas and NGL). Circular Resources and Products Crude Oil and Hydrocarbon Products 01 Natural Gas Electricity a b c d e 1(cid:22) 11 0(cid:6) 1(cid:4) 1(cid:6) 0(cid:14) 13 10 1(cid:20) OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT a b c 11 16 Industries Through Borealis, OMV provides innovative and value creating plastics solutions to five end-use industries: a Consumer Products c Healthcare b Energy d Infrastructure e Mobility d e 1(cid:22) 1(cid:4) 1(cid:6) 0(cid:14) 0(cid:20) 0(cid:6) 15 Fuels & Others OMV sells its refined products via several retail filling station brands and also serves a large base of commercial customers. 14 Crude Oil & NGL Crude oil and NGL are marketed on global markets, while Austri- an and Romanian production is predominantely supplied to OMV’s refineries. 11 Polymers Through Borealis, OMV is one of the largest polyolefin (poly- ethylene and polypropylene) producers in Europe and among the top ten producers globally, serving customers in more than 120 countries. 13 10 1(cid:20) 13 Natural Gas OMV markets natural gas, from equity production and third-par- ty supply, in several European countries. 12 Electricity OMV Petrom is a licensed power supplier in Romania and offers solutions for the electricity supply to end customers. 04 Supply & Trading OMV markets and trades crude oil, natural gas, and re- fined products on global mar- kets, with a focus on securing supply and generating value. 08 Natural Gas Storage OMV runs natural gas storage facilities, which are well connected to the pipeline grid and in the vicinity of important urban areas of consumption. 10 Gas Fired Power Plant In Romania, OMV Petrom pro- duces electricity in a gas-fired combined-cycle power plant. 0(cid:22) 03 0(cid:4) 0(cid:10) 0(cid:8) 01 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Market Outlook Inflation and significant reductions in the availability of Russian commodities, especially natural gas, in Europe following the removal of almost all Russian supply to the region, were the key causes of a substantial increase in global energy prices in 2022, leading to the “first global energy crisis” as described by the IEA. This has amplified the incentive for Europe to further diversify and decarbonize its energy supply. High prices, in particular for gas and electricity, have put the focus back on security of supply. 2022 was something of a watershed year in energy mar- kets. Consumers and central banks across the globe were faced with the challenge of rapidly rising inflation already at the end of 2021 and the early part of 2022, and this was before the picture was further complicated by the Russian invasion of Ukraine at the end of February. Significant re- ductions in the availability of Russian energy, especially natural gas, in Europe following the removal of almost all Russian supply to the region were the key causes of a substantial increase in global energy prices in 2022. En- ergy commodities ended up being one of the few asset classes to post gains during 2022, as inflation and subse- quent rapid interest rate hikes by central banks saw a broad-based sell-off of riskier assets and the long bull mar- ket in equities came to an end. The developments in energy markets during 2022 have been described as the “first global energy crisis” by the IEA’s Fatih Birol. With natural gas in Europe averaging at several times its value from the last few years, the incentive for Europe in particular to further diversify and decarbonize its energy supply has been amplified. This urgency was reflected in the political landscape of 2022. The RePowerEU program and the Inflation Reduction Act in the US in particular will provide significantly expanded provision and financial support for the build-out of clean energy over the coming years. The goal of achieving net zero emissions by the middle of the century has never been shared by more governments and corporations. As of the end of 2022, countries repre- senting more than 90% of global GDP had made a com- mitment to net zero emissions. An increase of 10 percent- age points compared to the end of 2021, according to the University of Oxford’s Net Zero Tracker. Emissions cover- age has increased by an estimated 6 percentage points to 83%, compared to 2021. While this trend is encouraging, the hurdles to achieving these goals remain significant. In particular, the events of 2022 and the accompanying high prices, especially for gas and electricity, have put the focus back on security of supply. Europe’s natural gas in- frastructure is being rapidly retooled to shift from a high de- pendency on pipeline imports of gas from the east to a more diversified portfolio that includes much larger vol- umes of LNG from the global seaborne market. The ur- gency of ensuring basic supplies of energy to consumers and businesses took precedence over long-term decar- bonization goals during 2022, and it is entirely possible that this will be the case again over the next couple of years. Associated trends, such as resurgent coal demand for power generation and subsequent higher emissions in- tensity, can also be expected to recur. At the end of 2022, policymakers were occupied with the question of how se- vere recessionary effects will be during 2023, especially in Europe, where many observers have pointed to an exis- tential threat to the viability of the regional manufacturing base. Nevertheless, over the medium and long term, OMV fully expects the structure of energy supply and demand to un- dergo drastic changes as efforts are made at varying speeds and with varying degrees of success to decarbon- ize electricity production, transport, industry, and other car- bon-intensive sectors of the global economy. A viable path to a net zero global energy system by the middle of the century has to include a diverse range of technologies be- ing employed in place of the traditional fossil and biomass energy sources. No single energy source should account for more than a quarter of total primary energy supply by 2050, according to the most recent update of the IEA’s Net Zero Emissions by 2050 Scenario. On a global level, there remains a significant implementa- tion gap – the difference between the combined pledges on emissions reductions and the actual measures that have been taken to achieve them. Compared to 2021, ad- ditional announced pledges on emissions reductions from India and Indonesia have served to reduce the perceived gap between announced pledges and a net zero energy system. However, major uncertainty remains. This is re- flected in the range of modeled shares of the different en- ergy sources in the IEA’s most recent World Energy Out- look: By the end of this decade, oil and gas will supply only 46% of total global primary energy in the net-zero scenario (down from 53% in 2021). However, this number remains essentially unchanged in the IEA’s Stated Policies Sce- nario (STEPS) by 2030, and falls only to 47% by the mid- dle of the century. 28 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT IEA scenarios based on stated policies and announced pledges foresee oil demand remaining robust at least through to the end of the decade (these scenarios assume compound annual growth rates of 0.8% and 0.2% respec- tively through to the end of the current decade for total global energy supply). In these environments, the question of underinvestment in upstream oil and gas remains a per- tinent one for the energy system as a whole. Various anal- yses have shown that capital expenditure in E&P has so far not responded to the marked increases in oil and gas prices observed since the depths of the pandemic-related sell-off in the middle of 2020 in the same way that was characteristic of previous commodity cycles. World total primary energy supply 1 In EJ In addition to an entrenched demand-decline trend in the domestic market, the European refining industry is likely to face ongoing headwinds in the form of higher utility and fuel costs vs. the other refining hubs, espe- cially those in the US and the Middle East. While these higher costs are to some extent offset by higher market prices for refined products, they are nevertheless ex- pected to continue to weigh on European competitive- ness. Meanwhile, consensus demand assumptions continue to imply an advantage in the market for play- ers with petrochemical integration. It is notable that, even in the IEA’s Net Zero Emissions by 2050 Sce- nario, oil demand for non-energy use falls by only 6% by 2050 vs. 2021 levels (vs. a decline of almost 80% for oil demand overall). Global petrochemicals1 demand In mn t Source: IEA World Energy Outlook 2022 Despite these factors long term assumptions remain largely unchanged. For example, the expectation that advanced economies will see the most notable nega- tive growth trends for fossil fuels over the medium and long term remain in place. The EU sees faster declines in oil demand than any other large country or region ex- cept Japan in the IEA’s projections. The CAGR of EU oil consumption for 2021–2030 is –2% in the STEPS, falling to –3.8% in the Announced Pledges Scenario (APS). China, the engine of global oil demand growth over the last two decades, sees a CAGR on oil demand of less than 1% up to 2030 even in the STEPS. Source: Chemical Market Analytics by OPIS, a Dow Jones Company 1 Ethylene and propylene 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. By 2030, oil demand for chemical production will rise by about 2% per year. Approximately 80% of chemical and plastic demand growth will be concen- trated in emerging markets, mainly Asia, until 2030 and beyond. This region represents most of the global pop- ulation growth and the corresponding potential for im- proving living standards. 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 development, but growth rates are ex- pected to slow. Note: In its 2022 World Energy Outlook, the IEA did not include the Sustainable Development Scenario (SDS), which has been used as a reference point in the past by OMV. In terms of cumulative emissions for the global energy system, the SDS is most closely comparable to the Announced Pledges Scenario (APS). 29 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 in- crease almost threefold by 2030. OMV uses two frameworks for future market assump- tions. For 2022, these are positioned as follows: 1. 2. A base case that assumes OECD economies fol- low a decarbonization path more aggressive than the IEA‘s Announced Pledges Scenario, but fall- ing short of the net zero oil demand path, while non-OECD economies progress in line with an- nounced pledges. A stress case that sees a faster transition away from fossil fuels than that in the Sustainable De- velopment Scenarioused in the 2021 IEA report, though not as aggressive as the Net Zero Emis- sions by 2050 Scenario. This stress case repre- sents a trajectory for oil demand declines that would correspond to the upper limit of the temper- ature increases foreseen in the UN climate goals from Paris, with net zero achieved in the global energy system between 2050 and 2070. For details on climate change-related risks and their man- agement, see the chapter Risk Management and Note 2 of the Consolidated Financial Statements, as well as the OMV Sustainability Report. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Global virgin polyolefin demand In mn t Source: Chemical Market Analytics by OPIS, a Dow Jones Company Polyolefins are the largest market segment in produc- ing plastic goods. Demand for virgin polyolefins will continue to grow at a rate above global GDP until 2030, driven by the Asian market. Polyolefins will remain es- sential for various industries, including packaging, con- struction, transportation, healthcare, pharmaceuticals, and electronics. Global recycled polyolefin demand In mn t Source: Chemical Market Analytics by OPIS, a Dow Jones Company 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. 30 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Strategy OMV’s goal is to 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 to grow the distributions to its shareholders. Re-inventing essentials for sustainable living is OMV’s purpose. 1 To drive sustainable growth and innovation, starting with January 1st, 2023, OMV reorganized its corporate struc- ture in three business segments: Chemicals & Materials, Fuels & Feedstock, and Energy. Chemicals & Materials continues to cover the entire chemicals value chain, in- cluding responsibility for capturing value from the circu- lar economy. Fuels & Feedstock combines the previ- ously distinct Executive Board areas of Refining and of Marketing & Trading. The Energy segment includes the traditional Exploration & Production (E&P) business as well as the entire gas business and the new Low-Car- bon business focused on geothermal energy and carbon capture and storage (CCS). As part of the introduction of the new corporate structure, Gas & Power Eastern Europe, which includes supply, marketing and trading of gas in Romania and Turkey and one gas-fired power plant in Romania, was transferred from Fuels & Feed- stock to the Energy business segment. Strategic cornerstones OMV’s goal is to transform from an integrated oil, gas, and chemicals company into a leader in innovative sus- tainable fuels, chemicals, and materials, leveraging op- portunities 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 is building on its strengths and seizing op- portunities to position itself competitively. 2030 strategic priorities ▸ Become a net-zero emissions company by 2050; reduce Scope 1 and 2 emissions by 30% and Scope 3 emissions by 20% by 2030 ▸ Develop into a global leader in specialty polyolefin ▸ Establish a global leadership position in circular ▸ Become a leading European producer of sustaina- economy solutions solutions ble fuels and chemical feedstocks ▸ Reduce fossil production and shift to gas ▸ Enhance OMV’s shareholder value: deliver growth with strong financials and reward its shareholders through progressive regular dividend and special dividends 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- fin recycling and sustainable feedstocks and products, as well as using neutralization measures such as CCS. 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 attractive shareholder distributions. These are supported by sound capital allocation priori- ties 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 green- house gas (GHG) emissions. This strategy enhances OMV’s shareholder value, as its transformation path al- lows for a sustainable growth business model, showing the Group’s commitment to cutting GHG emissions and delivering strong financials and attractive shareholder distributions. 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 Note: The financial targets for 2025 are based on the following market nominal price 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 nominal price 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/polypropylene indicator margin Europe of EUR 480/t. 31 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT existing polyolefins business, while also building a strong and diversified chemicals and materials portfolio, by expanding into adjacent businesses and new product groups. To achieve this, OMV will target investments and initiatives that improve its returns and carbon footprint. 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 polyolefins 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 posi- tion to develop innovative products and new business models. The circular economy is crucial for a long-term sustainable chemicals business. Thus, a transition to- ward an economically viable commercial scale is needed. In this context, the Group’s target is to deliver around 2 mn t of sustainable Chemicals & Materials products by 2030. 80% of these volumes are planned to be produced in Europe, which represents around 40% of OMV’s polyolefin production capacity in Europe. OMV also aims to become a leading innovative pro- ducer of sustainable fuels and chemical feedstocks. To achieve this, the Company will optimize the interface between oil and chemicals, with a focus on the inte- grated Schwechat and Burghausen sites, by redesign- ing plants to maximize high-value fossil resources, and with a growing share of sustainable fuels and feed- stocks for chemicals production. This will significantly reduce diesel product output by 2030, while increasing the chemical yield to around 24%. The production of re- newable fuels and sustainable feedstocks will increase to approximately 1.5 mn t, while crude oil distillation throughput will decrease by 2.6 mn t. Furthermore, OMV aims to become the first choice of our customers for energy, mobility, and convenience, focusing on the sale of sustainable aviation fuels, building an EV charg- ing network and growing its non-fuel retail business. In the Energy business, OMV is focusing on maximiz- ing value and harvesting cash. OMV Energy will gradu- ally reduce its fossil production to ~350 kboe/d by 2030, with a share of around 60% of natural gas. In the same period, OMV will make significant investments in low- carbon solutions, namely in around 10 TWh of renewa- ble energy (e.g., geothermal) and around 5 mn t p.a. of CCS capacity by 2030 to reduce its GHG footprint. The 32 Energy business will act as a cash engine for the Group and will support the transformation. Chemicals & Materials (C&M) 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 chemical production capacity to ▸ Establish a leading position in renewable and circu- ▸ Diversify portfolio by entering adjacent products lar economy solutions up to 2 mn t 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 global GDP with a CAGR (2022–2030) of 4.1%. Most 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 (2022–2030) of 12%, significantly above GDP, thanks to strong end-market commitments espe- cially in the consumer goods sector, increasing regula- tory pressure, and the need for end-of-life solutions 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- mental pollution, unnecessary emissions, and accumu- lation of microplastics. Transforming the value chain from a linear into a circular model will be one of the pri- orities for a sustainable chemicals business going for- ward. However, this requires a profound transformation to enable scale at attractive profitability. Current feed- stock accessible directly from recycling is limited. For this reason, tapping into upstream and downstream feedstocks, primarily through partnerships, is critical to ensuring sufficient access to plastic waste. Partner- ships with brand owners and retailers ensure attractive long-term offtake agreements with green product pre- miums. In addition, the future operating model needs to be set up to rapidly respond to changing customer and regulatory demands, with a primary focus on the ad- vanced European landscape but also on the ability to quickly roll out successful blueprints globally. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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 decrease the Group’s carbon foot- print. C&M has a strong pipeline of organic growth projects in Europe, the Middle East, and North America. Key growth initiatives include: ▸ Expansion of the Burghausen naphtha-based ▸ Expansion of propylene production capacities in steam cracker (2022) Belgium. Building a 750,000 t propane dehydro- genation (PDH) plant in Kallo, which is expected to start up in 2024. ▸ 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 annually. The steam cracker started up in 2022, and the polyolefin plant is expected to start up in the first half of 2023. ▸ Expansion of Borouge JV through Borouge 4 build- ing an ethane-based steam cracker of 1.5 mn t and polyolefin plants with a capacity of 1.4 mn t. The steam cracker and polyolefin plants are expected to start up at the end of 2025. The C&M business is seeking to strengthen its polyole- fin and specialty product portfolio, securing attractive margins. The business aims to grow in Asia and to strengthen its North American footprint via organic and inorganic investments. In addition, to further broaden its portfolio, C&M aims to tap into adjacent pockets of value creation and develop a more broadly diversified chemicals leadership position, primarily through M&As. Key growth initiatives via organic or inorganic invest- ments include building a polypropylene position in North America, growing in differentiated specialty prod- ucts, and growing 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. 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, with a focus on Europe: 40% of OMV’s polyolefin production capacity in Europe is planned to be sustainable. This will be accomplished by accelerating ongoing (advanced) mechanical and chemical recycling initiatives in Europe, as well as by using bio-feedstocks. The sustainable products will be the result of the increasing use of bio-monomers for polyolefins and the broader chemicals portfolio, and leveraging the close integration with OMV’s Fuels & Feedstock business. Building on its European sustaina- bility leadership, C&M will utilize its global footprint to expand circular economy solutions globally with exist- ing joint ventures, new growth plat-forms, and addi- tional 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. in 2022–2030, EUR 0.3 bn p.a. of which will be allocated to sustainable and CO2 emissions reduction projects. Fuels & Feedstock (F&F) Strategic priorities ▸ Increase chemical yield to 24% in Western refiner- ▸ Grow the production of renewable mobility fuels ies and sustainable chemical feedstocks to approxi- mately 1.5 mn t, while reducing crude oil distillation throughput by 2.6 mn t ▸ Market at least 700,000 t of sustainable aviation ▸ Invest in an EV charging network and significantly fuels increase margin contribution from the non-fuel retail business ▸ Significantly reduce absolute Scope 1, 2, and 3 emissions OMV aims to become a leader in renewable and circu- lar chemicals and materials. To achieve this goal, the Group plans to capture emerging renewable and circu- Going forward, F&F will reshape its product portfolio, building on renewable mobility fuels and sustainable chemical feedstocks. The Company is focusing on safe, innovative, and ecologically and economically 33 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT sustainable operations. As a result, F&F will enable the transformation to low-carbon operations and sales while maintaining 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. F&F will proactively decrease crude oil distilla- tion throughput in the Schwechat and Burghausen re- fineries, 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 F&F 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. 80% of 2030 OMV’s feedstock requirements al- ready has a clear sourcing plan. 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 with a grow- ing share of sustainable feedstocks for chemicals pro- duction. OMV will continue to operate its three Euro- pean refineries in Austria, Germany, and Romania as an integrated system, optimizing asset utilization and maximizing margins. Furthermore, the Company is im- plementing 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 the UAE (ADNOC Refining) and Pakistan (PARCO) is to improve their commercial performance. The focus in the short to mid-term will be on operational excellence and performance culture at each asset. In the mid to long term, OMV will evaluate commercial op- tions for the production of sustainable mobility fuels and chemical feedstocks. The F&F activities in Europe secure OMV’s customer and market access. In line with changing demand pat- terns, as well as regulatory obligations, OMV will gradu- ally transform its product portfolio to include more sus- tainable fuels and services by 2030, thereby increasing 34 the resilience of its product mix. OMV will build a grow- ing business for sustainable aviation fuels (SAF) in Central Europe by establishing new market positions in the vicinity of planned production sites. F&F will market at least 700,000 t of SAF by 2030. OMV will aim to grow SAF sales volumes significantly beyond the planned regulatory framework and will target the grow- ing voluntary compliance market. Simultaneously, F&F will sustain its position of bitumen and marine fuel oil to safeguard refinery utilization, while continuing to evolve these products to lower GHG emissions. In Retail Mobility & Convenience, OMV intends to fur- ther develop existing market potential by significantly growing the non-fuel business sector. New gastronomy and service 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 margin generator by 2030. OMV Retail Mobility & Convenience will expand into e-mobility, building a leading position in out-of-home Electric Vehi- cle (EV) charging locations such as highway and transit refilling stations, as well as convenience hubs. With a to- tal investment in this segment of more than EUR 400 mn by 2030, OMV will grow the profitability of the retail business as well as monetizing the value of its assets. Total organic investments in the F&F business will av- erage EUR 1 bn p.a. in 2022–2030, EUR 0.5 bn p.a. of which will be allocated to sustainable and carbon emis- sions reduction projects. With this new strategy, OMV will accelerate the attain- ment of its goal of lowering GHG emissions by reducing fossil fuels, stepping up the production and marketing of renewable fuels and sustainable chemical feed- stocks, and implementing energy efficiency measures. Energy 2030 strategic priorities ▸ Portfolio managed as a robust cash generator to ▸ Production is expected to decline to ~370 kboe/d by support the Group’s transformation 2025 and ~350 kboe/d by 2030, excluding any po- tential divestments ▸ Low-carbon business solutions will be developed, with around 10 TWh in renewable energy (e.g., ge- othermal) and around 5 mn t p.a. CCS, to signifi- cantly reduce absolute and relative GHG emissions ▸ Upon evaluation of its portfolio, OMV announced the start of the sales process of its E&P assets in the Asia-Pacific region OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT In the context of the ongoing energy transition and to support the OMV Group’s transformation, Energy will be managed as a robust cash generator and will focus on further upgrading its competitive asset portfolio, con- centrating on the three core regions: Central and East- ern Europe, the North Sea, and Middle East and Africa. The shift of the hydrocarbon portfolio to gas will con- tinue, with further divestments of non-core positions to improve efficiency, while the low-carbon business will be ramped up to achieve a material contribution by the end of the decade. On February 27, 2023, OMV an- nounced that it started the sales process for the divest- ment of its E&P assets in the Asia-Pacific region: a 50% stake in SapuraOMV Upstream Sdn. Bhd. and 100% of the shares in OMV New Zealand Limited. Starting with 2023, the Energy business incorporates the entire value chain of gas, as Gas & Power Eastern Europe, which includes Supply, Marketing and Trading of gas in Romania and Turkey and one gas-fired power plant in Romania, was transferred from Fuels & Feed- stock to the Energy business segment. 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, and the Umm Lulu SARB Phase 2 plateau extension in the UAE, will support strong cash genera- tion by and beyond 2025. OMV expects production lev- els of ~370 kboe/d by 2025 and ~350 kboe/d by 2030, with a share of around 60% of natural gas, excluding any potential divestments. In order to sustain the above-mentioned production levels, ramp up the low- carbon business, and deliver strong cash generation, OMV Energy anticipates a total annual average CAPEX in 2022–2030 of around EUR 1.6 bn, EUR 0.6 bn of which are earmarked for low-carbon activities. OMV’s exploration and appraisal activities are being stream- lined further, and the total annual average budget is ex- pected to be around EUR 0.2 bn over the decade. To- ward the end of the decade, oil and gas CAPEX and E&A expenditure will be reduced, thereby allowing for more capital to be allocated to ramping up the low-car- bon business and the broader OMV transformation. OMV Energy plans to reinforce the competitiveness of its portfolio and resilience through a strong focus on op- erational excellence, fostered by digitalization and agile ways of working, as well as portfolio optimization. To supply its gas customers, OMV will continue to com- plement its own natural gas production in Norway, Aus- tria, and Romania with third-party supply sources on which the Group is working to diversify. The equity gas contribution to the gas sales business will decrease sig- nificantly toward the end of the decade in the North- western European region due to natural fields decline, and, as needed, will largely be replaced with green gases, such as biogas and hydrogen, primarily ob- tained from the markets, to reduce the carbon intensity of its product portfolio. New equity gas volumes from the Romanian Neptun project will keep volumes high in Southeastern Europe. OMV will also aim to direct an in- creasing share of its natural gas sales to customers from non-energy sectors, 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 Energy business and support a potential ac- celerated transition to sustainable fuels, chemicals, and materials. These opportunities may include capturing the full value potential of the asset base, e.g., low-car- bon business potential, maintaining reservoir produc- tion excellence, and optimizing costs as well as as- sessing and developing joint venture opportunities for selected assets without excluding inorganic options. To reduce its operational carbon footprint, OMV Energy will pursue the phase-out of routine gas flaring and venting, reduce fugitive methane emissions, and intro- duce portfolio optimization measures. In addition, re- newable energy projects will also be pursued for the purpose of powering OMV’s own operations, such as the photovoltaic plant developed with VERBUND in Schönkirchen (Austria). To achieve an overall reduction of both absolute and relative GHG emissions from its product portfolio, OMV Energy will leverage its existing asset base and core skills to deliver financially strong low-carbon business projects. Available opportunities will be captured to build up geothermal energy capacity that generates up to 9 TWh p.a. by 2030. In addition to geothermal, around 1 TWh from renewable power will be developed in OMV core regions with favorable sun and wind conditions to serve primarily captive demand, thereby reducing Scope 2 emissions by OMV’s own op- erations. The Energy business will further tap its exist- ing reservoirs and (sub-)surface capabilities to imple- ment opportunities that lead to a CCS capacity of ap- proximately 5 mn t p.a. of CO2 net to OMV by 2030. In addition, further opportunities where OMV Energy can leverage its strengths and capabilities are being ex- plored, e.g., hydrogen and energy storage, and will po- tentially be pursued in consideration of OMV strategic priorities. 35 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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% All reduction targets are measured against a 2019 baseline. OMV is committed to achieving net-zero emissions (Scopes 1, 2, and 3) by 2050, with interim targets for 2030 and 2040. 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 Scopes 1 and 2, OMV aims for an absolute reduction of 30% by 2030 and of 60% by 2040. For the defined cat- egories in Scope 3, OMV aims for an absolute reduc- tion of 20% by 2030 and of 50% by 2040. In terms of reducing the carbon intensity of energy supply, OMV in- tends to achieve a decrease of 20% by 2030 and 50% by 2040. OMV has also voluntarily committed to apply the Oil and Gas Methane Partnership 2.0 (OGMP 2.0) frame- work. As a result, OMV committed to: ▸ E&P methane emissions accounting shall be in line ▸ Operated E&P asset must have a source-level as a minimum with the OGMP 2.0 framework measurement of methane emissions (OGMP 2.0 level 4) in three years at the latest ▸ Reduce methane intensity to 0.2% by 2025 and to 0.1% by 2030. OMV awaits the publication of the science-based tar- gets (SBT) methodology for the oil & gas sector to eval- uate its targets against the SBT requirements and get them approved by the Science Based Target initiative (SBTi). 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 in 2022–2030, which repre- sent around 40% of total organic CAPEX. All business units will build on their existing strengths and know-how on this transformation journey. Three key initiatives will be undertaken to achieve the targeted reductions by 2030: ▸ 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, and build-up of photovoltaic electricity capacity primarily for captive use as well as geo- thermal energy ▸ Increase in Chemicals & Materials recycling and sustainable feedstocks, and delivery of approxi- mately 2 mn t p.a. of circular products: recyclate production substituting fossil chemicals and materi- als production and production from biogenic feed- stock Besides these efforts, neutralization measures will be necessary. OMV anticipates that it will use around 5 mn t of CCS capacity across all business units. All energy purchases will be 100% renewable. The inor- ganic growth of the Chemicals & Materials business will be executed in line with OMV decarbonization targets with either decarbonization path-ways 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 of ≥12% in the mid and long term ▸ Ensure sound capital allocation priorities: organic CAPEX, dividend, inorganic growth, deleveraging and special dividends1 ▸ Maintain strong balance sheet, with a mid/long-term ▸ Distribute around 20% to 30% of operating cash leverage ratio below 30% flow (including net working capital effects) per year to its shareholders through its regular dividend, as a priority, and additionally, if sufficient funds are avail- able, through special dividends, when leverage ra- tio is below 30% ▸ Commit to attractive shareholder distributions 1 Depending on OMV’s leverage ratio, the order between inorganic growth and deleveraging can reverse. 36 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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 according to a clear framework for enabling long-term profitable and resilient 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 ra- tio of below 30%, a clean CCS Operating Result of at least EUR 5 bn by 2025 and EUR 6 bn by 2030, in- creasing clean CCS net income attributable to share- holders, operating cash flow excluding net working cap- ital of around EUR 6 bn by 2025 and at least EUR 7 bn by 2030, as well as attractive shareholder distributions. When building its financial plan, OMV defined a sound capital allocation policy: first, investing in its organic portfolio; second, paying attractive dividends; third, pur- suing inorganic spending for an accelerated transfor- mation; fourth, deleveraging; and fifth, special divi- dends. In its capital allocation, the Group focuses on selecting the most competitive and resilient projects. The defined investment criteria include hurdle rates and payback periods by business reflecting respective risk and return profiles, as well as testing projects for their resilience and break-even versus relevant market KPIs. To achieve its strategic goal, OMV plans a yearly or- ganic CAPEX of around EUR 3.5 bn for the period 2022–2030. Overall, the Group is allocating more than EUR 13 bn in this period to achieve its ambitious decar- bonization targets, which represents around 40% of to- tal organic CAPEX. In addition, OMV will consider inor- ganic growth in areas of strategic importance. How- ever, this will depend on the Group’s indebtedness headroom. Moreover, the Group’s portfolio of assets can provide options through divestments to accelerate strategy execution when attractive acquisition 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 an investment-grade credit rating. The Company aims to achieve a leverage ratio of below 30% for the 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. OMV seeks to align its long-term funding policy with the Company’s sustainability strategy. Therefore, OMV is assessing the opportunity of sustainability-linked fund- ing, which links the cost of a financing instrument to the achievement of specific strategic sustainability targets, such as GHG emission reduction goals or sustainable polyolefin production targets. During the strategy period, OMV is committed to deliv- ering attractive shareholder distributions. The Group has amended its shareholder distribution policy in De- cember 2022 and added special dividends as a new, additional instrument to the existing progressive divi- dend policy. The progressive regular dividend policy is maintained and unaffected by this amendment. When OMV’s leverage ratio is below 30%, OMV aims to dis- tribute approximately 20% to 30% of the OMV Group's operating cash flow (including net working capital ef- fects) per year to its shareholders through its regular dividend, as a priority, and additionally, if sufficient funds are available, through the new instrument of a special dividend. In case of a leverage ratio of 30% or higher, OMV’s progressive regular dividend will be maintained, but no special dividend shall be paid. The dividend payments in any given year are subject to specific dividend proposals by the Executive Board and the Supervisory Board. 37 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Sustainability We are committed to building a sustainable world worth living in – for everyone. Sustainability and circular- ity 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 posi- tive relationships with our employees, communities, suppliers, and other stakeholders, including by ad- dressing the 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). ▸ 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. ▸ Targets 2025: ▸ Increase volume of sustainable (includes recy- erations cled and biobased) polyolefins or other chemi- cals production capacity to 600,000 t p.a. ▸ Increase reuse and recycling of waste from op- ▸ Reduce freshwater withdrawal ▸ Targets 2030: ▸ Establish approx. 2 mn t p.a. sustainable (in- cludes recycled and biobased) polyolefins or other chemicals production capacity ▸ Reduce natural resources use by cutting oil and gas production levels to around 350 kboe/d and reducing crude distillation throughput by 2.6 mn t ▸ Increase reuse and recycling of waste from op- ▸ Reduce freshwater withdrawal erations Our Strategy 2030 is underpinned by this Sustainability Framework, with all business decisions being guided 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, and Security, People, and Ethical Business Practices. For each of these focus areas, we have formulated concrete com- mitments, targets, and actions to be achieved by 2030, which represent OMV’s contribution to the UN 2030 Agenda for Sustainable Development. OMV’s sustainability commitments and targets Climate Change ▸ Commitments: ▸ OMV will continuously improve 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 mn t CO2e reductions from ▸ Achieve an E&P methane intensity of 0.2% or operated assets in 2020–2025 (Scope 3) by >6% vs. 2010 lower 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 ▸ Zero routine flaring and venting of associated ≥20% vs. 2019 lower gas as soon as possible, but no later than 2030 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. 38 OMV ANNUAL REPORT 2022 / 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 special ▸ Conduct human rights assessments and develop hours to a min. of 30 hours per employee needs at our main locations perience at 75% 65% action plans for OMV Group operations with a high level of human rights risks 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) 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 Sustainable Development Goals (SDGs). ▸ OMV is committed to contributing to a Just Tran- sition for our employees and communities, and addressing the 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 experience at 75% (CGM) of all sites against UN Effectiveness Cri- teria 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 Together for Sustaina- bility (TfS, further details below) and carry out sustainability evaluations of all suppliers cover- ing >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 training 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 39 OMV ANNUAL REPORT 2022 / 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 Agreement. OMV integrates risks and opportunities related to climate change impacts into the development of the Company’s business strat- egy and the planning of operational activities. In this re- gard, OMV continuously improves the carbon efficiency of its operations and product portfolio and is fully com- mitted to supporting and accelerating the energy transi- tion. 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, reducing methane emis- sions through leakage detection and repair, and im- proving 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 example, in late 2022, a new gas treatment station for Low Temperature Separation (LTS) at a Romanian E&P asset was brought on stream. As a result, gas that would normally be flared is captured and made availa- ble for sale. Consequently, through the aforementioned approach for example, GHG emissions are estimated to be reduced by 24,000 t CO2e from 2023 onward due to the elimination of routine flaring. We are also increasingly turning to renewable sources of electricity to power our operations. In Austria, follow- ing the realization of Phase II of the OMV and VER- BUND photovoltaic park at Schönkirchen, 12.9 GWh of renewable electricity was produced. It is estimated that throughout the year 15.84 GWh of renewable energy will be produced. In Romania, OMV Petrom completed the installation of PV panels at its first solar park. The park includes nearly 1,000 PV panels installed over an area of 5,500 m2. The green energy produced will be used to supply electricity for ongoing operations in the E&P segment. Also by the end of Q4/22, PV panels were installed at 380 OMV and OMV Petrom-branded filling stations. The electricity produced from these in- stallations annually is estimated at 7,000 MWh. In par- allel, several Power Purchase Agreements (PPAs) with renewable energy providers were signed by OMV Group in 2022. For instance, in October 2022, Borealis and Axpo Nordic, a subsidiary of Switzerland’s largest renewable energy provider, signed a wind PPA, which includes the annual supply of more than 130 GWh of wind power to the Borealis production location in Ste- nungsund (Sweden) over the next ten years. The elec- tricity will be generated by a new onshore wind farm lo- cated in central Sweden, with delivery expected to start in January 2024. A cornerstone of our climate strategy is increasing the share of zero-carbon products in our product portfolio, as well as decreasing fossil fuel production and sales. Oil and gas production will be decreased to around 350 kboe/d by 2030. Growth will instead come from zero-carbon products, such as geothermal energy, hy- drogen, and Sustainable Aviation Fuels. In our E&P segment, we will build up around 10 TWh of renewable energy production (including geothermal, PV, and wind). In 2022, OMV made headway in the develop- ment of two geothermal projects: one in Austria, the other in Germany. In Austria, OMV conducted a pro- duction and injection test to analyze the geothermal po- tential in the Vienna Basin. Regional and local geologi- cal studies have been progressing, and potential loca- tions for geothermal power plants have also been se- lected. In Lower Saxony (Germany) OMV and partner ZeroGeo Energy GmbH have an equal interest of 50% each in a geothermal exploration project called Thermo. The initial project aim is to collect geological data, in particular gravity and magnetic measurements, over an area of approximately 5,000 km2. The data col- lected will be used to assess the geothermal energy potential and will be part of a comprehensive evaluation of future geothermal activities in the area. Based on preliminary studies, subsurface experts indicate that the geothermal conditions in the Vienna Basin are suit- able for use as a direct heat carrier. In northern Ger- many, the geothermal energy could be used to gener- ate electricity. We aim to step up the production of renewable fuels and sustainable chemical feedstocks to approximately 1.5 mn t per year, including marketing at least 700,000 t of Sustainable Aviation Fuels (SAFs) per year. In 2022, three Memorandums of Understanding for the in- tended offtake of SAF were signed with Lufthansa Group, Ryanair, and WizzAir. The total amount of in- tended SAF offtake between 2023 and 2030 is more than 800,000 t for the Lufthansa Group, up to 160,000 t for Ryanair, and up to 185,000 t for WizzAir. Our climate targets can only be achieved with consider- able effort and capital allocation. The OMV Group has earmarked investments of more than EUR 13 bn by 2030 for this purpose, representing around 40% of or- ganic CAPEX over that period. All business units will build on existing strengths and expertise to contribute to this transformation. 40 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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, the Americas, and Europe that are defined as high risk by the Transparency International Corruption Perceptions Index. We strive to avoid the risks of bribery and corruption that are specific to our sector. We also highly value our reputation. Therefore, our highest priority is ensuring uniform compliance with our business ethics standards wherever we operate. Compliance with ethical standards is a non-negotiable value that supersedes any business interest. Absolute commitment to this objective is embedded at all levels of 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 planning business strat- egy 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 2022, 7,537 OMV Group employees were trained in business ethics. The Integrity Platform pro- vides an anonymous whistleblower mechanism for OMV employees and external stakeholders, such as suppliers. They can use this platform to report issues relating to corruption, bribery, conflicts of interest, anti- trust law, capital market law, public procurement, envi- ronmental protection, product and food safety and con- sumer 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 exist- ing and potential business partners sanctioned by the EU or international organizations, 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 precontractual 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, the procurement colleagues and business representatives select the best suppliers based on a predefined set of commercial and technical criteria during a tender process. In 2022, we continued to embed sustainability elements into sourcing activities (e.g., technologically innovative elements, carbon emis- sions, energy efficiency KPIs, CDP and EcoVadis score) during 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. During the audits, we pay special attention to the finan- cial stability of our suppliers, their strategy and organi- zation, supply chain, sustainability (e.g., human rights, carbon footprint management, environmental manage- ment, certifications, and social responsibility), and their cybersecurity performance. We also carry out yearly subject-specific audits on topics such as process safety, quality, and efficiency. During the supplier au- dits, we place great emphasis on understanding not only the management approach to the topics within the scope of the audits (e.g., HSSE aspects), but also how the topics are understood and applied by the employ- ees on site (e.g., through discussions with workers and managers). Since 2021, OMV has been a member of Together for Sustainability (TfS). As a joint initiative and global net- work of 40 companies, TfS sets the de facto global standard for the environmental, social, and governance 41 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT performance of chemical supply chains. The TfS pro- gram is based on the principles of the UN Global Com- pact and Responsible Care®. Being a TfS member helps OMV to further embed sustainability into its day- to-day business operations and further cascade sus- tainability requirements within our supply chain. We aim to continuously manage and decrease the car- bon volume of our purchased goods and services. Only by working together with our suppliers will we be able to define joint low-carbon initiatives to continuously de- crease the carbon emissions in the supply chain and meet our Paris Agreement commitments. As part of its CDP Supply Chain membership, in 2022 OMV invited 231 suppliers to respond to the CDP climate change questionnaire. Suppliers were selected based on spend, estimated carbon emissions volume, and the carbon intensity of the goods and services purchased from them. In addition to reporting their emissions, we asked the suppliers whether they have carbon reduc- tion targets in place, and invited them to share with us any initiatives or projects to reduce carbon emissions in which they would like us to participate. 75% of respond- ing suppliers have a climate target in place (vs. 63% in 2021). 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 health care, labor rights in the supply chain, edu- cation, poverty reduction, land rights, and free, prior, and informed consent. OMV respects and supports hu- man 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 4,254 employees received training on human rights topics through the e-learning tool and in-person training sessions (2021: 980). 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 2022, 35 incidents of human rights grievances were reported (2021: 7). In late July 2022, OMV’s subsidiary Borealis was con- fronted with reports of alleged human trafficking prac- tices conducted by the main contractor (IREM) and their sub-contractor on a propane dehydrogenation (PDH) plant construction site in Kallo, Belgium. The practices were reported to involve exploitation, inade- quate compensation, lack of social security, and poor housing conditions. Borealis immediately suspended and later terminated all contracts with IREM due to its non-compliance with their fundamental principles, and retendered the contracts. After careful consideration, Borealis granted the majority of the works to the con- tractor Ponticelli and implemented thorough social con- trols at the Kallo construction site to respect and value the workers there. Work on the construction site gradu- ally increased from October 2022. The OMV Group always seeks to improve, and is strongly committed to further strengthening its processes and mitigation measures to prevent any maltreatment and disrespect of workers’ human rights in the supply chain. At corporate level, we analyzed the HSSE and Procurement directives for contractor management and prepared a detailed checklist for human rights compliance to be used at site level. The revised human rights e-learning refers specifically to human rights in business relations, and the new OMV Group Human Rights Policy Statement details our human rights commitment related to labor rights and business partners in line with business best practice and international standards. Additionally, individual monitoring initiatives were implemented at local level throughout the Group to ensure our suppliers’ compliance with human rights. 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 42 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT implemented Community Grievance Mechanisms (CGM) at all operating sites. In 2022, OMV registered 776 external grievances (2021: 884) from the Commu- nity Grievance Mechanisms. All of the grievances were handled in accordance with OMV’s localized commu- nity grievance management procedures, which stipu- late a stringent approach to systematically receiving, documenting, 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 96% of all registered grievances at OMV in 2022. 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). 43 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Health, Safety, Security, and Environment Health, safety, security, and protecting 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 2022 resulted in a TRIR of 0.82 (2021: 0.54). Great ef- fort was put into broad safety and security awareness and prevention campaigns in order to establish a strong and positive safety culture. This was especially the case during the planned maintenance turnarounds that took place in the Schwechat and Burghausen refiner- ies. During the past year, special emphasis was placed on findings from incidents, leadership engagement, contractor management, and training on various emer- gency and crisis management scenarios. The con- sistent implementation of the process safety road maps and improvement initiatives was another area of focus. Exploration & Production had a TRIR of 1.09 (2021: 0.92). The numbers show that a constant effort is re- quired to minimize the occurrence of incidents. In addi- tion, we encountered 18 High Potential Incidents (HiPos) that could have resulted in serious or fatal inju- ries under slightly different circumstances. All these in- cidents were subjected to thorough incident investiga- tions and measures were taken to prevent recurrence. Contractor management continues to be a focus area in our HSSE efforts. Our activities concerning process safety management, and various other initiatives aimed at ensuring the safety and integrity of our facilities, con- tinued in 2022. 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 2022 2021 1.11 1.32 0.62 1.19 0.78 1.23 0.70 1.18 0.51 0.85 0.57 0.96 HSSE Strategy To achieve this vision, the 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: improving the ability to work through inte- ▸ Safety: establishing sustainable safety for people ▸ Security: protecting people, assets, and reputation ▸ Environment: minimizing the environmental foot- from emerging malicious intentional threats and facilities print throughout the life cycle of activities Health, safety, and security In 2022, the combined Lost-Time Injury Rate (LTIR) for OMV employees and contractors was 0.78 (2021: 0.57), and our combined Total Recordable Injury Rate (TRIR) was 1.23 (2021: 0.96). We are deeply con- cerned about the work-related fatality of a contractor who fell off a roof while carrying out repairs in France. Managing the COVID-19 pandemic remained a high priority in 2022 alongside routine HSSE management. Our main focus was to learn from incidents across the Company: videos, alerts, and communication cam- paigns were again used to reach out to all employees. The business segment Chemicals & Materials reached a TRIR of 2.85 (2021: 2.25). There was a strong focus on implementing occupational safety improvement initi- atives, holding dedicated HSSE training sessions, as well as the further strengthening of the safety culture and risk awareness. Special attention was paid to con- tractor HSSE management and learning from past inci- dents, to prevent recurrences and embed appropriate improvement measures. 44 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT The well-being and health of employees are fundamen- tal to the success of any company, as they serve as a foundation for ensuring employee productivity. The year 2022 was still strongly influenced by the worldwide COVID-19 pandemic. Our medical teams and service providers were challenged with supporting the emer- gency management teams in updating and implement- ing pandemic preparedness plans, guidelines and health information, and providing support to employees suffering from COVID-19 at home and in hospital. In addition, OMV continued its long tradition of offering health and prevention programs, such as cardiovascu- lar disease prevention programs, thyroid screenings and other voluntary health checks, vaccinations (espe- cially against flu and in some countries COVID-19), and virtual health hours, such as ideas for a healthy work- life balance or first aid measures that go far beyond le- gal requirements. In 2022, the COVID-19 pandemic again posed major challenges for safety management. At the operational level, we took preventive and business continuity-re- lated measures, such as strictly segregated teams in key areas, hygiene measures, and ongoing awareness- raising. Despite restricted travel and thanks to digital communication and collaboration tools, we were able to carry out the following important safety-related activities: ▸ We have updated our Life-Saving Rules and har- monized them across the OMV Group. This simple set of rules helps prevent fatal and severe acci- dents, and applies to all employees and contrac- tors. Training and communication materials have been produced in 18 languages for an intensive re- fresher campaign in 2023. ▸ All incidents at level 3 and higher and HiPos were investigated, and lessons learned were communicated throughout the organization. Improvement initiatives were developed and closely monitored using our HSSE reporting tool. ▸ As part of our safety culture program, we held sev- eral workshops on “making HSSE personal” at dif- ferent levels of the Company. The semi-annual meetings with the program owner were conducted online. ▸ Contractor HSSE management is key to the OMV Group’s safety performance. We introduced a new e-learning program, held webinars, and delivered over 900 trainings to more than 660 beneficiaries and procurement staff on the internal regulations framework. We also held strategic supplier meet- ings with prime contractors to share information, ex- periences, and expectations. ▸ Global HSSE training for employees and managers was completely revised and updated. An e-learning course consisting of 13 modules was developed for basic HSSE training. ▸ We developed a harmonized set of KPIs and a pro- cess safety dashboard. Furthermore, a Group Pro- cess Safety Committee has been established, in- cluding Members of the Executive Board, which meets periodically to discuss process safety perfor- mance, achievements, and challenges. ▸ We supported and followed up on the implementa- tion of process safety road maps across OMV’s ventures, assets, and refineries. In our Integrated Risk Register, we continued to analyze and priori- tize process safety risks to ensure that investments effectively lead to a significant reduction in risks. ▸ The OMV Group Process Safety Network, a large online collaboration platform, met quarterly to ex- change information and experiences in virtual meet- ings (> 200 participants). Senior management also participated. ▸ We completed the review of 15 group-wide HSSE regulations and achieved systematic alignment be- tween the OMV Group and Borealis. ▸ An important milestone has been achieved with the successful go-live of the OMV Group HSSE report- ing tool. This is a key step in our ongoing harmoni- zation and enables us to report in one single sys- tem across the OMV Group and Borealis by replac- ing all existing tools. An unstable geopolitical environment combined with complex new and enduring regional conflicts remained a constant security focus throughout 2022. The Corpo- rate Security department continued to monitor these geopolitical situations, accelerating OMV’s understand- ing of strategic events to identify any emerging threats that might interfere with business planning. This in- cluded cases of armed conflict, civil unrest, and crimi- nality at local, national, regional, and international lev- els. We updated our proven security management system in 2022, 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-re- lated challenges, the Corporate Security department continued to deliver global operational support, govern- ance, and oversight, and will maintain a comparable and effective security strategy to allow OMV to operate despite converging asymmetric threats. In 2021, OMV’s Executive Board took the decision that OMV would join the Voluntary Principles on Security 45 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT and Human Rights (VPSHR), if feasible. This set of tools provides guidance on risk assessment, public safety and security, human rights abuses, and the inter- action between companies and private and public secu- rity. OMV is committed to upholding human rights in all of its activities. During 2022, OMV Corporate Security conducted a VPSHR gap analysis using a third-party consultancy company to ensure independence. As a result of this analysis, we are now in the process of adopting their recommendations with a view to joining the VPSHR in 2023. Environmental management Due to the nature of its operations, OMV has an impact on the environment. The Group strives to minimize this impact at all times, particularly with respect to spills, en- ergy efficiency, greenhouse gas (GHG) emissions, and water and waste management. OMV strives to optimize processes to use natural resources as efficiently as possible and reduce emissions and discharges. In 2022, there were 2 major hydrocarbon spills (level 3 of five; 2021: 3 spills). The total volume of hydrocarbon spilled was higher compared to the previous year. OMV continues to work on its oil spill response preparedness and capabilities. Key environmental measures and achievements in 2022: ▸ Water management plans have been established at our main operational sites to reduce water-related risks and ensure efficient and sustainable water use. ▸ At the Schwechat refinery, we succeeded in signifi- cantly reducing water consumption and emissions to air. More than 5% of the average annual water consumption has been saved, most of it through a new control concept for cooling water in a heat ex- changer group in the ethylene plant. ▸ At our FCC unit, the installation of an additional electrostatic precipitator module reduced dust emis- sions by up to 70%. ▸ At the Petrobrazi refinery, the tank modernization program continued in 2022 with the modernization of one volatile product tank and the commissioning of a new tank, according to best available technology, which will contribute to the reduction of volatile organic compound (VOC) emissions. ▸ In 2022, OMV Petrom completed the surface aban- donment of 746 wells and 40 facilities in the E&P division. A total of 157,000 t of contaminated soil was treated in our bioremediation plants, and 13,180 t of metal scrap was recycled by authorized companies. ▸ An enhanced monitoring tool for spill prevention has been implemented at OMV Petrom. The indus- try-recognized digital well integrity tool was estab- lished to assess risks to the integrity of individual wells, prioritize inspections, and take appropriate mitigation actions. By the end of 2022, we had suc- cessfully completed the digitization of 4,000 wells, which represents more than 50% of the total. ▸ Borealis is further commited to restore and maintain a healthy and productive ocean based on the UN Sustainable Ocean Principles and the UN Global Compact membership. Furthermore, Borealis con- tinued its STOP project, a pioneering program to support cities in developing and emerging countries in establishing cost-efficient, effective, and circular waste collection systems. For more information, visit the STOP project website at www.stopo- ceanplastics.com. ▸ To honor the commitment to achieving zero pellet losses in operations and the supply chain, Borealis has incorporated all elements of Operation Clean Sweep® (OCS), an international pellet loss reduc- tion program. In addition, Borealis has proactively contributed to the development of a third-party audit and certification scheme for OCS led by the indus- try interest group Plastics Europe. Borealis’ target is to achieve full third-party OCS certification at all of its sites in Europe by 2024. ▸ We have continued to work on improving our im- pact on nature. To achieve this, we apply the miti- gation hierarchy in our projects with the following steps: Avoidance, Minimization, Restoration, Offset and Compensation. We want to make a positive im- pact on nature by implementing biodiversity initia- tives, such as our green areas project in arid parts of Tunisia. We continued our tree planting initiatives in 2022 at our Waha and Nawara sites, which in- clude an irrigation system. The goal is to create re- creational areas to improve the well-being of em- ployees and visitors. ▸ Planting continues at the Pohokura natural gas pro- duction station in New Zealand. As part of a three- year planting plan to regenerate native spe- cies, 500 specimens were planted in 2022. 46 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Employees We know that it is the combined 22,300 employees of OMV who turn the Group’s strategy into results and success. We are proud of what 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. OMV’s People & Culture Strategy In 2022, we developed a Group-wide People & Culture Strategy, which fully supports the transformation of OMV. The core of the new People & Culture Strategy is our purpose, i.e., “Re-inventing essentials for sustaina- ble living”. We have developed four strategic drivers, plus one additional pillar, Transformational Leadership: ▸ Employee Experience ▸ Growing Talent ▸ Organizational Evolution ▸ New Ways of Working Highlights of 2022 Following the announcement of the OMV Group’s Strat- egy 2030, all Human Resources (HR) functions Group- wide were renamed People & Culture (P&C). The aim of this department is to fully support the OMV Group’s Strategy 2030 by prioritizing key aspects that enable us to unlock our organization’s full potential. The new name points to the department’s aim and purpose, and emphasizes that people and culture are central to achieving the targets defined in our strategy. As such, the statement “People make it happen” not only creates the right working environment in which our employees can thrive, but also ensures that they can further de- velop their skill sets to meet the demands of our dy- namic business. In March 2022, our Group-wide purpose, “Re-inventing essentials for sustainable living”, was launched. To bring this purpose to life, a change agent and volun- teering network has been set up. We also introduced Purpose Learning Weeks, focusing on the three pur- pose enablers, namely Advancing Circular, Working Together, and Stimulating Transformation. With the Purpose Learning Weeks, we want to create deeper in- sight into each of our purpose enablers. The first Pur- pose Learning Week on Advancing Circular took place in June 2022 and addressed various topics relating to the circular economy. During the COVID-19 pandemic, which continued to af- fect our employees in 2022, many implemented em- ployment-related measures were continued to protect the health, well-being, and economic situation of our employees. In 2022, we worked specifically on our work-from-home concepts to give employees more flex- ibility. Working from home is now offered to a broader group of staff and the number of work-from-home days per month has significantly increased. 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. In September 2022, a Group-wide Pulse Check was performed throughout the OMV Group. The Pulse Check is one of our most important tools for measuring the engagement of our employees. It is an essential part of our new People & Culture Strategy relating to Employee Experience. We achieved a very high response rate of 70% on a Group level, and conclusions and subsequent actions will be agreed. In 2022, there was a focus on mandatory, legally bind- ing, and business-critical independent learning (e.g., e-learning, online learning through our partnership with LinkedIn Learning, and virtual courses/webinars). Due to the disruptions caused by COVID-19, we again con- centrated on virtual training delivery, as in 2021. All measures to support employees in the virtual and hy- brid environment were therefore continued. This in- cluded the delivery of virtual health webinars, virtual training of facilitators, and an updated personal skills SharePoint, among other things. Leadership training focused on first-time leaders, women in leadership, and how to manage remote and hybrid teams. For identified talents at executive level, a dedicated talent program focusing on enhancing execu- tive leadership skills was implemented. New ways of working also continued to be a focus point, for example through the integration of agile ways of working and the newly introduced Project Management Certification Program. In terms of graduate development, we ex- panded our portfolio offering to include a tailored gradu- ate program in Refining as well as continuing with our long-standing Integrated Graduate Development (IGD) Program in E&P. 47 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Number of training participants1,2,3 Diversity Austria Romania/Rest of Europe Middle East/Africa Rest of the world Total 2022 5,599 14,659 664 700 21,622 2021 5,632 13,762 709 784 20,887 Money spent on training per region1,2 In EUR Austria Romania/Rest of Europe Middle East/Africa Rest of the world Total 2022 2021 3,435,294 5,670,768 614,903 369,132 10,090,097 2,672,471 5,094,527 342,242 243,485 8,352,725 1 Excluding conferences and training for external employees 2 Excluding DUNATÁR, SapuraOMV, OMV Russia, DYM Solutions, MTM, and Rosier 3 Number of employees who received at least one training We have also started to work on a shared set of values across OMV, OMV Petrom, and Borealis, which we will use to guide us through this transition and in the future. These new values have been co-created together with our employees to help shape the future of the OMV Group and how we all work together. The new values will then be launched in 2023 alongside a campaign. Moreover, we are also developing leadership compe- tencies closely linked to the newly defined values, to help in identifying and developing future and present leaders. To achieve the OMV Group’s Strategy 2030, we will roll out dedicated global initiatives on Purpose and Values and a new transformational leadership program in 2023. We will also set up a Sustainability Academy that offers an ever-growing selection of varied, pre-selected learning material to support our employees in expand- ing their knowledge and enhancing their mindset when it comes to OMV’s journey to net zero. Additionally, we plan to offer specific training initiatives to support the upskilling of technical employees, for example training on low-carbon energy, geothermal energy, decision quality, and data science. An employee survey on diversity, equal opportunities, and inclusion was launched at the end of 2021. Through this, the OMV Group was able to further strengthen the culture of listening to unheard voices in our Company, and collect feedback from employees on diversity, equal opportunities, and an inclusive environment in the Company. The survey’s findings played an important part in developing OMV’s new Group-wide Diversity, Equity, and Inclusion strategy 2030, which was launched in 2022. Our focus on diversity is also being actively nurtured throughout the organization today, supported by a range of training sessions, activities, and awareness campaigns. We also continued our series of online events with external guest speakers on relevant diver- sity topics. International Women’s Day is a day to focus on equality and women’s rights worldwide. In 2022, the motto #BreakTheBias directed the focus toward preju- dices that still stand in the way of women’s equality. OMV fully supports this approach and therefore orga- nized events in March 2022, including a presentation of Diversity, Equity & Inclusion (DEI) quick poll insights and a discussion on the topic. The DEI Awareness Month took place in October 2022, with various events focusing on the topics of interest as determined by the DEI survey conducted in 2021 (gender, generations, parenting, disabilities, and unconscious bias). OMV is committed to ensuring fair treatment and equal opportunities for all employees and has zero tolerance for discrimination and harassment of any kind. In line with our commitment to equality and non-discrimina- tion, we began working on a formal non-discrimination policy in 2022. This will be introduced in 2023. We have designed and implemented targeted training programs, such as SHEnergy, a blended learning pro- gram for women at OMV, to support women’s leader- ship skills. The program focuses on active inclu- sion skills and also emphasizes the power of mentor- ing and networking in developing female leaders. As a result of these measures, the percentage of women in the Group is about 27% (2021: 27%). A total of 21.6% (2021: 20.9%) of employees in advanced and executive positions are female. 48 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Employee key figures At the end of 2022, the OMV Group employed 22,308 people. Compared with 2021, the number of employees slightly decreased by 0.6%. Employees Employees by region Austria Rest of Europe Middle East & Africa Rest of the world Total number of employees Diversity Female Male Female Executives1 Number of nationalities 1 Executives include OMV Senior Vice Presidents, OMV Petrom and Borealis Group Board members 2022 2021 5,884 14,890 583 951 22,308 5,762 15,074 634 964 22,434 in % in % in % 27 73 20 27 73 15 101 101 49 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT OMV Group Business Year In 2022, OMV has achieved a strong clean CCS Operating Result of EUR 11.2 bn. Furthermore, cash flow from operating activities excluding net working capital effects remained significant amounting to EUR 9.8 bn, and the organic free cash flow before dividends totaled EUR 4.9 bn. As a consequence, the leverage ratio decreased from 21% at the end of 2021 to 8% at the end of 2022. This financial strength is an excellent basis for OMV’s further strategic development into a leader in sustainable fuels, chemicals and materials while committing to deliver attractive shareholder returns. Business environment Global economic growth during 2022 is estimated to have been the weakest for two decades, save only for the immediate aftermath of the global financial crisis (2009) and the depths of the COVID-19-related slow- down (2020). A broad set of headwinds confronted the global economy in 2022, with annual growth expected at some 3.2%, according to the IMF. This represents a significant drop from the 6% registered in 2021. Ac- cording to UNCTAD, global trade, meanwhile, is ex- pected to have reached an outright record in 20221, with growth more concentrated in services. However, the second half of 2022 saw something of a slowdown, with global goods trade turning negative in the third quarter, before services trade followed in the fourth quarter. Effects of the COVID-19 pandemic continued to impact markets in early 2022, even before the Russian inva- sion of Ukraine tipped supply and demand further out of balance from the second half of Q1 onward. Outsized spending on goods relative to services – combined with ongoing bottlenecks in supply chains – drove rapid, marked increases in inflation in almost all large econo- mies. Headline CPI topped 8% on average over Q2 in the US, peaking in June at 9.1%. Headline inflation in the Eurozone averaged in double digits at the begin- ning of the fourth quarter of 2022, with a peak of 10.6% in October. Combating price increases for consumers and businesses became the main focus of central banks in 2022, while governments were tasked with mitigating the effects of price rises. This was especially true in Europe, where year-on-year price growth in en- ergy was the single largest contributing factor to head- line inflation. This became arguably the dominant politi- cal and economic issue for the region in 2022. The economic headwinds piled up in various metrics as 2022 progressed. Purchasing Managers’ Indices sank from mostly expansionary at the end of 2021 to mostly being in contraction territory by the middle of 2022, with only a couple of exceptions. Eurozone net exports flipped negative by Q3 (Eurostat), while essentially all other economic indicators spent the second half of the year trending lower, i.e., toward recession territory. By the end of the year, financial conditions, consumer con- fidence, and services PMIs had made their way below the 20th percentile in data going back more than 20 years. The only metric to buck this trend has been the labor market, which, as of late 2022, remains histor- ically tight, with unemployment numbers continuing to trend close to record lows. This conundrum was still in place for central banks at the end of 2022 on both sides of the Atlantic. The macro environment focus has shifted definitively to the effects of more expensive financing and the potential for this to contribute to recessionary effects in ad- vanced economies. The latest available GDP figures for the Eurozone indicate a significant decline in the third quarter of 2022. By the end of the year, the Euro- pean Central Bank had raised its key deposit rate by 250 basis points, a rapid increase necessitated by surging inflation. Higher interest rates are having and will continue to have a lagged effect on consumer and business spending. The fallout from the geopolitical upheaval following the Russian invasion of Ukraine has been wide-ranging. However, supply and trade disruptions were arguably more pronounced in energy than anywhere else. And within energy, no region saw more pronounced price effects than Europe. Following the invasion, the deci- sion by many western corporations to “self-sanction” ahead of government mandates to limit or cease the trade and import of Russian energy was a key driver of the oil price rally that peaked at the end of the second quarter of 2022. However, it was the natural gas market that was the epicenter of the energy-related difficulties experienced by Europe in 2022. The removal of the vast majority of Russian gas pipeline flows from the middle of the year posed an unprecedented challenge for the European Union, which, in 2021, sourced almost 40% of its natu- ral gas imports from Russia and which was 20% de- pendent on natural gas for power generation. The re- moval of the region’s single largest supply source from the market, combined with the government mandates 1 Source: United Nations Conference on Trade and Development (UNCTAD) Global Trade Update December 2022 50 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT for minimum storage levels ahead of the onset of the heating season and reduced liquidity, saw an unprece- dented peak in natural gas prices in August 2022 of more than EUR 300/MWh. This price level represented a tough test for both the region’s energy markets and its industrial base, with production in a range of energy- intensive industries forced lower or offline completely due to poor economics. By the end of 2022, the pressure coming from high gas and power prices had moderated significantly. How- ever, Europe’s energy markets remain fundamentally tight. This fragility means the impact of disruptions to current supply sources is potentially very significant. LNG has taken on huge importance in meeting Euro- pean demand for natural gas. Continued high imports of LNG into Europe to offset the loss of Russian pipe- line flows requires Europe to outcompete Asia as the most attractive export destination for spot cargoes on the international market. This in turn requires Europe to have the most expensive natural gas market globally. 2022 saw wheels set in motion to change the European energy landscape faster than anybody would have an- ticipated at the beginning of the year but, for the time being, high energy prices should be expected to con- tinue. Natural gas demand in Europe is expected to have fallen by some 10% during 2022 vs. 2021 based on a combination of factors, by far the largest of which is price-related demand reduction. Over the first half of 2022, it was residential and commercial demand for gas in Europe that was exhibiting the fastest demand declines. This was increasingly overtaken in the second half of the year as industrial gas demand fell rapidly as wholesale prices hit extremely high levels. Industrial gas demand is expected to have fallen some 20% year on year in Europe in 2022, far exceeding the estimated 3% decline in gas demand in the region’s power generation. Natural gas was the standout performer in 2022 in price terms, but energy commodities as a whole led the mar- ket in a year when the majority of other asset classes declined. Major US and European stock indices were down significantly compared to the previous year, while bonds failed to provide any hedge against equity de- clines and posted their worst performance in decades in 2022. After European gas and electricity, other com- modities whose price benefitted directly or indirectly from the fallout of the Ukraine conflict included coal and refined products, especially middle distillates such as diesel and heating oil. Despite high prices for refined products in 2022, Europe has seen new demand for middle distillates and some other products emerge from industrial processes that have switched away from nat- ural gas due to the extremely high prices in that market. The IEA estimates that this demand, comprising mostly gasoil, will average more than 500 kbbl/d over the fourth quarter of 2022 and the first quarter of 2023. It was a year of huge volatility in the Brent price. The first half of the year was defined by rapid demand growth, as oil consumption continued to recover from its 2020 lows. This contributed to the price rally in Brent, which peaked in Q2. However, supply was in- creasingly able to catch up. Non-OPEC supply is thought to have reached almost 67 mbbl/d by Q4/22, a 2 mbbl/d increase over the same quarter in 2021. At the same time, demand growth was starting to top out. High prices have also taken a toll on demand, which is estimated to have fallen in the fourth quarter compared to the previous year. Despite the marked decline in the Brent price in the latter part of 2022 on this softening fundamental picture, the annual average increase came in at around 40%. Industry investments have so far not exhibited any appreciable increase correspond- ing to the higher oil prices of the last two years. In comparison to 2021, the olefin indicator margins were higher in 2022, driven by low feedstock prices ex- cept for the peak in the first quarter of 2022, and high monomer contract prices. On average for the year, indi- cator margins were on a healthy level. For some prod- ucts, such as benzene, indicator margins reached his- toric highs in 2022 even though the market environ- ment was challenging, which was caused by several factors, namely: the Russia/Ukraine conflict, high en- ergy costs, high inflation, and decreasing demand throughout the year. Following the attack on Ukraine, the crude slate became lighter and naphtha was readily available in the market, which led to lower feedstock prices. Furthermore, high gas prices in Europe affected demand throughout the value chain. In summer, the low water level of the Rhine caused logistical con- straints on the derivative market. All crackers in Europe reduced the throughput due to weak demand and high energy prices, especially in the second half of 2022. The cracker rates in Europe reduced to the globally near record low levels of 65% in the fourth quarter of 2022 due to extremely weak demand. French strikes and several cracker outages helped only a little in Octo- ber. The entire supply chain was under the pressure of destocking as year end came to maximize cash and minimize inventory. 51 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Margins of European polyolefins continued to normalize in Q1 from the historic highs seen in 2021. In the sec- ond quarter of 2022, margins were supported by the heavy spring turnaround season. In the second half of 2022, however, margins deteriorated, with demand de- crease seen across most grades of polyolefins due to the poor macroeconomic conditions (cost of living crisis reducing discretionary incomes of consumers). Imports of polyolefins into Europe were also ample in the sec- ond half of the year thanks to the easing of the global container freight market, which ended the year being similar to pre-pandemic levels. Arguably the most significant result of the events of 2022 has been the reemergence of energy security as a key pillar of energy policy. The reality of overdepend- ence on a single source of energy has been laid bare via numerous reversals on long-held policies, most no- tably German U-turns on coal and nuclear plant life spans, as well as a rapid build-out of infrastructure to import LNG into the region’s largest economy. The sheer size of Europe’s energy bill – and its impact on corporate competitiveness and household budgets – should prevent energy security from being neglected in what’s known as the energy trilemma at any time in the foreseeable future. Crude price (Brent) – monthly average1 In USD/bbl 1 ICE Brent generic 1st contract monthly average 52 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Financial review of the year Key financials Sales revenues Clean CCS Operating Result1 Clean Operating Result Chemicals & Materials1 Clean CCS Operating Result Refining & Marketing1 Clean Operating Result Exploration & Production1 Clean Operating Result Corporate & Other1 Consolidation: elimination of inter-segmental profits Clean CCS Group tax rate Clean CCS net income1 Clean CCS net income attributable to stockholders of the parent1,2 Clean CCS EPS1 Special items3 thereof Chemicals & Materials thereof Refining & Marketing thereof Exploration & Production thereof Corporate & Other CCS effects: inventory holding gains/(losses) Operating Result Group Operating Result Chemicals & Materials Operating Result Refining & Marketing Operating Result Exploration & Production Operating Result Corporate & Other Consolidation: elimination of inter-segmental profits Net financial result Group tax rate Net income Net income attributable to stockholders of the parent2 Earnings Per Share (EPS) Cash flow from operating activities Free cash flow before dividends Free cash flow after dividends Organic free cash flow before dividends Organic free cash flow after dividends Gearing ratio excluding leases Leverage ratio Capital expenditure4 Organic capital expenditure5 Clean CCS ROACE ROACE 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 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 % 2022 62,298 11,175 1,457 2,415 7,396 (50) (43) 48 5,807 4,394 13.44 2021 35,555 5,961 2,224 945 2,892 (62) (39) 36 3,710 2,866 8.77 Δ 75% 87% (34)% 155% 156% 19% (11)% 12 57% 53% 53% 861 (1,315) n.m. 582 774 (460) (36) 210 12,246 2,039 3,392 6,936 (86) (35) (1,481) 52 5,175 3,634 11.12 7,758 5,792 4,333 4,891 3,432 3 8 4,201 3,711 19 17 (396) (509) (398) (12) 418 5,065 1,828 451 2,910 (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 n.m. n.m. (16)% (198)% (50)% 142% 12% n.m. 138% (16)% 31% n.m. 10 85% 74% 74% 11% 11% 3% 8% (3)% (19) (14) 56% 40% 6 7 Note: As of 2022, the gas business, previously reported in Refining & Marketing, was split into Gas Marketing Western Europe reported under Exploration & Production, and Gas & Power Eastern Europe reported under Refining & Marketing. For comparison only, 2021 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 After deducting net income attributable to hybrid capital owners and net income attributable to non-controlling interests 3 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. 4 Capital expenditure including acquisitions 5 Organic capital expenditure is defined as capital expenditure including capitalized exploration and appraisal expenditure and excluding acquisitions and contin- gent considerations. 53 OMV ANNUAL REPORT 2022 / 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 % 54 2022 11,175 861 (8) 58 724 87 210 12,246 2021 5,961 (1,315) (30) (1,297) 223 (210) 418 5,065 Δ 87% n.m. 75% n.m. n.m. n.m. (50)% 142% Operating Result adjusted for special items and CCS effects, details of which are depicted in the table on the left. 2022 performance: With slightly over EUR 11 bn, OMV achieved a strong clean CCS Operating Result in 2022. All three business segments contributed significantly, supported by the overall favorable market environment. Especially the Exploration & Production segment benefitted from the rise in oil and gas prices, while results were burdened by the impact of the war in Ukraine, including the change of the consolidation method of E&P Russian assets as well as supply curtailments in Gas Marketing Western Europe. 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. 2022 performance: Coming in at 48%, the clean CCS Group tax rate in- creased by 12 percentage points compared to 36% in the previous year, stemming from an increased contri- bution from Exploration & Production, in particular from countries with a high tax regime. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Clean CCS net income attributable to stockholders of the parent In EUR mn Leverage ratio & Gearing ratio excl. leases In % Clean CCS ROACE In % Net income attributable to stockholders of the parent, adjusted for the after-tax effect of special items and CCS. 2022 performance: The clean CCS net income attributable to stockholders of the parent in the amount of EUR 4.4 bn increased significantly compared to EUR 2.9 bn in 2021 following the strong Operating Result. The leverage ratio is calculated by dividing net debt incl. leases through equity plus net debt incl. leases. The gearing ratio excl. leases is calculated by net debt (interest-bearing debts including bonds less liquid funds) excluding leases divided by equity, expressed as a percentage. 2022 performance: OMV's strong financial performance as well as positive contribution from inorganic cash flow from investing ac- tivities, such as the Borouge IPO, partial loan repay- ment from Bayport Polymers LLC (Baystar), as well as the sale of filling stations in Germany, have led to a continuous deleveraging throughout the year, resulting in a leverage ratio of 8%. The gearing ratio excluding leases came in at 3%. The clean CCS ROACE (%) is calculated as Net Oper- ating Profit After Tax (NOPAT – as a sum of the current and last three quarters) adjusted for the after-tax effect of special items and CCS, divided by average capital employed (equity including non-controlling interests plus net debt). 2022 performance: Driven by the strong operational performance, OMV was able to deliver a clean CCS NOPAT of EUR 5.7 bn in 2022, compared to EUR 3.8 bn in 2021. As average capital employed was on a comparable level, the clean CCS ROACE improved from 13% in 2021 to 19% in 2022. 55 OMV ANNUAL REPORT 2022 / 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 56 Amount of cash OMV Group generates through its ordi- nary business activities which excludes effects from net working capital positions 2022 performance: Operating cash flow excl. net working capital effects came in at EUR 9.8 bn above the EUR 8.9 bn from 2021, supported by the overall strong market environ- ment. The organic free cash flow is cash flow from operating activities less cash flow from investing activities exclud- ing disposals and material inorganic cash flow compo- nents (e.g., acquisitions). 2022 performance: An organic free cash flow before dividends of EUR 4.9 bn was recorded in 2022, slightly above prior year’s level. 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 consid- erations. 2022 performance: Organic capital expenditure increased by 40% to EUR 3.7 bn compared to EUR 2.6 bn in 2021, mainly due to non-cash leases related to the construction of the propane dehydrogenation (PDH) plant at Kallo (Bel- gium) by Borealis. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Capital Expenditure (CAPEX)1 Total CAPEX In EUR mn dehydrogenation (PDH) plant in Belgium, which in- cluded non-cash effective CAPEX related to leases in the amount of around EUR 0.5 bn and equity injection into Borouge 4 LLC to finance the Borouge 4 project. Furthermore, the CAPEX increase was driven by the construction of the ReOil ® demo plant in Austria. The increase in Refining & Marketing CAPEX was driven by turnaround activities, repair works at the Schwechat refinery, as well as investments in the co- processing unit at Schwechat. The increase in Exploration & Production CAPEX was mainly related to investments in Romania, Malay- sia and New Zealand. Chemicals & Materials CAPEX increased mainly due to investments in the construction of the new propane The reconciliation of total capital expenditure to the investments as shown in the cash flow statement is depicted in the following table: Capital expenditure 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) +/– Non-cash changes1 Cash outflow from investments in intangible assets and property, plant and equipment + Cash outflow from investments, loans and other financial assets Investments as shown in the cash flow statement 2022 4,201 (47) (490) 2021 2,691 (33) (33) 3,664 2,624 (721) 2,943 736 3,679 (127) 2,497 382 2,879 ∆ 56% (41)% n.m. 40% n.m. 18% 93% 28% 1 Non-cash changes mainly impacted by new leases for the construction of the new propane dehydrogenation plant in Belgium by Borealis 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 57 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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 po- sition Free cash flow after dividends 2022 9,843 7,758 (1,966) 5,792 (2,660) (72) 3,060 5,064 8,124 35 8,090 4,333 2021 8,897 7,017 (1,820) 5,196 (2,977) (25) 2,195 2,869 5,064 14 5,050 4,199 ∆ 11% 11% (8)% 11% 11% n.m. 39% 77% 60% n.m. 60% 3% Cash flow from operating activities amounted to EUR 7,758 mn, up by EUR 742 mn compared to 2021. This was primarily attributable to an improved market environment, however, partly offset by lower dividends received from Abu Dhabi Polymers Company Limited (Borouge). Cash flow from investing activities showed an out- flow of EUR (1,966) mn in 2022, compared to EUR (1,820) mn in 2021. Cash flow from investing ac- tivities in 2022 included inflows from the Initial Public Offering of Borouge PLC in the amount of EUR 745 mn, a partial loan repayment from Bayport Polymers LLC of EUR 602 mn, as well as the divest- ment of the retail network in Germany of EUR 432 mn. Moreover, cash flow from investing activities in 2022 contained outflows from the capital contribution to Bor- ouge 4 LLC of EUR (408) mn as well as cash disposed of EUR (208) mn related to the loss of control of JSC GAZPROM YRGM Development. In 2021, cash flow from investing activities 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, and EUR 94 mn related to the sale of the shares in Kom-Munai LLP and Tasbu- lat Oil Corporation LLP (Kazakhstan). Cash flow from financing activities showed an out- flow of EUR (2,660) mn compared to EUR (2,977) mn in 2021. Significantly higher dividend payments were made in 2022, however, this was more than offset by higher repayments of bonds in the previous year. 58 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Notes to the income statement Summarized income statement In EUR mn (unless otherwise stated) 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 (%) 2022 2021 62,298 2,512 64,811 35,555 1,533 37,087 (39,298) (6,205) (2,484) (2,689) (250) (1,639) 12,246 (20,257) (4,302) (3,750) (2,746) (280) (688) 5,065 (1,481) (194) 10,765 (5,590) 5,175 71 1,470 3,634 52 4,870 (2,066) 2,804 94 617 2,093 42 Δ 75% 64% 75% 94% 44% (34)% (2)% (11)% n.m. n.m. n.m. n.m. n.m. 85% (25)% n.m. 74% 10 Sales to third parties 2022 (2021) Total not consolidated sales 2022 (2021) In EUR mn if not otherwise stated (prior year) In EUR mn if not otherwise stated (prior year) Sales revenues increased by 75% to EUR 62,298 mn mainly due to substantially higher market prices. For the sales split by geographical areas, please refer to the Notes to the Consolidated Financial Statements (Note 4 – Segment Reporting). Other operating income increased from EUR 933 mn in 2021 to EUR 1,644 mn. 2022 was mainly impacted by EUR 409 mn gains from the sale of the filling station business in Germany, EUR 341 mn gains from the suc- cessful listing of Borouge PLC on ADX (the Abu Dhabi Securities Exchange), insurance income of around EUR 200 mn recognized with respect to the incident in the Schwechat refinery in June 2022 and higher operat- ing foreign exchange gains. For further details, please refer to the Notes to the Consolidated Financial State- ments (Note 6 – Other operating income and net in- come from equity-accounted investments). Net income from equity-accounted investments in- creased from EUR 600 mn in 2021 to EUR 869 mn in 2022 mainly due to the positive contribution of Abu 59 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Dhabi Oil Refining, partially offset by a lower result from Borouge investments, mostly as a result of lower poly- ethylene and polypropylene prices. Net expenses related to depreciation, amortization, impairments and write-ups decreased compared to 2021. This was mainly due to the fact that 2021 was burdened by impairments booked related to the at-eq- uity accounted investment ADNOC Refining CGU and the nitrogen business unit of Borealis. 2022 contained mainly a write-up of EUR 266 mn of the nitrogen busi- ness unit of Borealis based on the new offer from AG- ROFERT, a.s. and a net impairment amounting to EUR 117 mn based on the impairment testing in the Exploration & Production portfolio triggered by updated commodity price assumptions. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 7 – Depreciation, amortization, im- pairments and write-ups). Other operating expenses increased from EUR 688 mn in 2021 to EUR 1,639 mn in 2022 mainly due to deconsolidation of investments in Russia and re- measurement of the asset from reserves redetermina- tion rights with respect to the acquisition of interests in the Yuzhno-Russkoye field. For further details, please refer to the Notes to the Consolidated Financial State- ments (Note 2 – Accounting policies, judgements and estimates, section “Impact of Russia’s invasion of Ukraine and related significant estimates and assump- tions“). Notes to the statement of financial position Summarized statement of financial position 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 Net financial result decreased from (194) mn in 2021 to (1,481) mn in 2022. This development was mainly related to the impairment of the Nord Stream 2 loan in the amount of EUR (1,004) mn and the fair value ad- justment of investments in Russia in the amount of EUR (370) mn. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 2 – Accounting policies, judgements and estimates, section ”Impact of Russia’s invasion of Ukraine and re- lated significant estimates and assumptions,” and Note 18 – Financial assets). These effects were partly offset by the improved foreign exchange result and the in- creased net interest result attributable mostly to higher interest income on cash deposits. The effective tax rate increased from 42% in 2021 to 52% in 2022. The 2022 effective tax rate was mostly af- fected by a positive contribution from countries with a high tax regime. For further details on the Group’s ef- fective tax rate, please refer to the Notes to the Consol- idated Financial Statements (Note 12 – Taxes on in- come and profit). 2022 2021 Δ 32,384 22,369 1,676 33,724 18,595 1,479 26,628 15,607 13,567 626 56,429 21,996 17,216 13,677 909 53,798 (4)% 20% 13% 21% (9)% (1)% (31)% 5% Current assets: Inventories increased from EUR 3,150 mn in 2021 to EUR 4,834 mn in 2022 mainly impacted by the filling of our natural gas storage facilities and increased natural gas prices as well as increased balances for finished petroleum products. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 17 – Inventories). 60 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Cash and cash equivalents significantly increased from EUR 5,050 mn to EUR 8,090 mn. For more de- tails, please refer to the Notes to the cash flow state- ment in the Director’s Report chapter. The above described increase was partly offset by lower derivatives, which decreased from EUR 3,737 mn to EUR 2,377 mn, mainly related to the gas busi- ness. Non-current assets: Net assets held for sale and liabilities associated with assets held for sale: The increase in 2022 was mainly due to the reclassifi- cation of Rosier SA and the operating entities in Yemen to held for sale. This effect was partly offset by the sale of the filling sta- tion business in Germany. For further details please re- fer to the Notes to the Consolidated Financial State- ments (Note 20 – Assets and liabilities held for sale). Intangible assets and property, plant and equip- ment were impacted by significant CAPEX spendings. However these effects were offset mainly by deprecia- tion and impairment charges as well as the deconsoli- dation of JSC GAZPROM YRGM Development. For fur- ther details, please refer to the Notes to the Consoli- dated Financial Statements (Note 2 – Accounting poli- cies, judgements and estimates, section “Impact of Russia’s invasion of Ukraine and related significant es- timates and assumptions”). Equity-accounted investments increased by EUR 407 mn to EUR 7,294 mn impacted by EUR 408 mn capital contribution into Borouge 4 LLC, positive results especially from ADNOC Refining and Borouge investments, positive FX impacts as well as EUR 67 mn net write-up of the investment in ADNOC Refining CGU, partially offset by EUR 801 mn dividend distributions as well as EUR 430 mn disposal due to the successful listing of Borouge PLC. For further de- tails, please refer to the Notes to the Consolidated Fi- nancial Statements (Note 16 – Equity-accounted in- vestments). Financial assets included in 2021 drawdowns and the related accrued interests under the financing agree- ments for the Nord Stream 2 pipeline project, the total outstanding amount of which EUR 1 bn was fully im- paired in 2022. Furthermore, in 2021 an acquired con- tractual position towards Gazprom with regard to the reserves redetermination in the amount of EUR 432 mn was included. The fair value of this position was re- duced to zero in 2022, as OMV no longer expects it to be recoverable. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 2 – Accounting policies, judgements and esti- mates, section “Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions”). Current liabilities: Bonds increase was mainly related to short-term re- classifications of EUR 1,250 mn, which was partly off- set by a repayment in the amount of EUR 750 mn. For further details please refer to the Consolidated Finan- cial Statements (Note 24 – Liabilities). Income tax liabilities increase of EUR 1,147 mn re- lated mainly to Norway and was due to significant in- crease in taxable income. Payment of the outstanding liability in Norway will be made in the first half of 2023. Financial liabilities from derivatives decreased from EUR 3,607 mn to EUR 1,263 mn, mainly related to the gas business. Non-current liabilities: Bonds decrease was mainly related to short-term re- classifications of EUR 1,250 mn. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 24 – Liabilities). Lease liabilities increased from EUR 887 mn to EUR 1,322 mn mainly due to the new obligation related to the propane dehydrogenation (PDH) plant of Bore- alis. For further details, please refer to the Notes to the Consolidated Financial Statements (Note 15 – Prop- erty, plant and equipment). Pensions & similar obligations decrease to EUR 997 mn (2021: EUR 1,299 mn) was mainly im- pacted by various reassessment effects. For further de- tails please refer to the Consolidated Financial State- ments (Note 23 – Provisions). Other provisions decreased from EUR 643 mn to EUR 377 mn mainly due to the reassessment of provi- sions for onerous contracts. For further details, please refer to the Notes to the Consolidated Financial State- ments (Note 23 – Provisions). 61 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Chemicals & Materials In the Chemicals & Materials segment, OMV is 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 2022 1,457 967 332 582 2,039 1,896 560 534 390 486 74% 5.66 1.69 1.84 1.25 0.88 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 ∆ (34)% (33)% (38)% n.m. 12% 127% 20% 18% (33)% (34)% (16) (5)% (7)% (13)% (0)% 19% Note: Following the successful listing of 10% of the total issued share capital of Borouge PLC on June 3, 2022, Borealis now holds a 36% stake in Borouge PLC, thus lowering financial and operational contributions as of the date of listing. 1 Capital expenditure including acquisitions, notably, 2022 included an equity injection to Borouge 4 of EUR 0.4 bn 2 Pro-rata volumes of at-equity consolidated companies Financial performance The clean Operating Result declined in 2022 by 34% to EUR 1,457 mn (2021: EUR 2,224 mn). A substan- tially higher contribution from the nitrogen business and the positive impact from stronger olefin margins were more than offset by considerably weaker European pol- yolefin margins, significantly lower positive inventory valuation effects, lower sales volumes in Europe, and a reduced contribution from the Borealis JVs. The contribution of OMV base chemicals decreased despite higher ethylene and propylene indicator margins, mainly as a result of the planned turnaround of the Burghausen steam cracker and the incident at the crude distillation unit at the Schwechat refinery on June 3, 2022. The ethylene indicator margin Europe grew by 20% to EUR 560/t (2021: EUR 468/t), while the propylene indicator margin Europe increased by 18% to EUR 534/t (2021: EUR 453/t). While the first half of the year was characterized by strong demand for olefins and supply shortages, the second half saw a sharp decline in demand, which was partially compensated for by lower operational rates of European crackers. Declining naphtha prices, after the peak in the first quarter, provided support to the olefins indicator margins in a very volatile market environment. Lower production due to the reduced utilization rate at the Schwechat and Burghausen steam crackers, higher costs of the feedstock mix, which also includes other intermediates besides naphtha, and growing utility prices weighed on the result. The utilization rate of the European steam crackers operated by OMV and Borealis went down by 16 per- centage points to 74% (2021: 90%). The utilization rate in 2022 came in lower as a result of the planned turna- round of the steam crackers in Burghausen and 1 On June 2, 2022, Borealis received a binding offer from AGROFERT, a.s. for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 62 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Stenungsund, but also as a result of the incident at the crude distillation unit at the Schwechat refinery on June 3, 2022. The contribution of Borealis excluding JVs declined by EUR 470 mn to EUR 967 mn (2021: EUR 1,437 mn). This was primarily due to substantially lower polyolefin indicator margins and significantly lower positive inven- tory valuation effects, while the outstanding perfor- mance of the nitrogen business and higher olefin indi- cator margins provided some support. The Borealis base chemicals business experienced a decline despite improved olefin indicator margins, mainly caused by negative inventory valuation effects and the impact from the planned turnaround at the Stenungsund steam cracker. The polyolefin business saw a strong decline in polyolefin indicator margins and substantially lower positive inventory valuation effects. In 2021, polyolefin indicator margins experienced historic highs, driven by strong demand in the European markets coupled with a tight supply-demand balance, as a result of a heavy maintenance season and worldwide logistical con- straints. The polyethylene indicator margin Europe decreased by 33% to EUR 390/t (2021: EUR 582/t) while the polypropylene indicator margin Europe came down by 34% to EUR 486/t (2021: EUR 735/t). In the first half of 2022, polyolefin indicator margins started to normalize from the highs of 2021, at a slow pace to start, but deteriorated substantially in the sec- ond half of the year on the back of a slump in demand induced by the global economic slowdown and infla- tionary pressure on customers. In addition, increased availability of imported volumes into Europe put pres- sure on the margins. While the realized margins for standard products saw a substantial negative impact due to the emerging demand weakness and higher util- ity costs, margins for specialty products experienced slight improvements. Higher feedstock discounts and stronger prices, above market indicators, for certain product categories provided some relief. Polyethylene sales volumes went down by 7%, while polypropyl- ene sales volumes decreased by 13% compared to 2021. The decrease in sales volumes stemmed mainly from the consumer products and infrastructure indus- tries, while the mobility industry experienced a slight in- crease. The contribution from the nitrogen business saw a substantial increase compared to 2021. Fertilizer margins were substantially higher compared to 2021, as a tight supply situation more than offset the in- creased natural gas prices. The reclassification as as- set held for sale also impacted the result positively. The contribution of Borealis JVs declined by EUR 202 mn to EUR 332 mn (2021: EUR 534 mn), mainly due to lower contributions from Borouge and from Baystar. The favorable impact of a stronger USD managed to partially compensate for these effects. Pol- yethylene sales volumes from the JVs remained at the previous year’s level, while polypropylene sales volumes from the JVs increased by 19%. In 2022, Borouge sales volumes benefited in particular from the ramp-up of the new polypropylene unit (PP5). A one- time effect from pension provisions negatively impacted the result in 2022 at Borouge, and the successful listing of 10% of Borouge’s total issued share capital on June 3, 2022, lowered financial and operational contri- butions in comparison to 2021. The pricing environment in Asia weakened compared to 2021, as new polyolefin production capacities came online and consumer de- mand was dampened by COVID-19 lockdowns. Com- pared to 2021, Baystar experienced a softer market en- vironment and was impacted by the full depreciation charge after the start-up of the ethane cracker and in- creased interest expenses, while the new unit experi- enced only a slow ramp-up in light of operational chal- lenges. Net special items amounted to EUR 582 mn (2021: EUR (396) mn) and were mainly related to the success- ful listing of a 10% share in Borouge, which led to a gain from disposal of around EUR 0.3 bn. In addition, the binding offer received from AGROFERT for Bore- alis’ nitrogen business triggered a write-up of around EUR 0.3 bn. The Operating Result of Chemicals & Materials came in at EUR 2,039 mn, compared to EUR 1,828 mn in 2021. Capital expenditure in Chemicals & Materials amounted to EUR 1,896 mn (2021: EUR 835 mn). The increase was driven by an equity injection to Borouge 4 of around EUR 0.4 bn in 2022 and growth in organic capital expenditure. In 2022, besides ordinary running business investments, organic capital expenditure was predominantly related to investments by Borealis in the construction of the new propane dehydrogenation plant in Belgium, which included non-cash effective CAPEX related to leases in the amount of around EUR 0.5 bn, the construction of the ReOil® demo plant in Austria, and the turnaround at the Burghausen refinery. 63 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Business overview In the Chemicals & Materials segment, OMV is 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 OMV and Borealis and its two joint ventures: Borouge (with ADNOC, based in the UAE and Singapore) and Baystar (with TotalEnergies, based in the United States). The segment comprises the production of base chemi- cals integrated with OMV operated refineries in Austria and Germany, the Borealis business of base chemi- cals, polyolefins, and fertilizers, and the joint ventures Borouge and Baystar. With a strong European footprint through Borealis and its two joint ventures, Borouge and Baystar, 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 refinery-integrated, OMV-operated steam crackers in Schwechat and Burghausen mainly use naphtha as a feedstock, the steam crackers operated by Borealis in Stenungsund and Porvoo feature high feedstock flexibility using naphtha, ethane, propane, butane, or any LPG mix as feedstock. In Kallo, Borealis runs a propane dehydrogenation unit based on 100% propane feedstock. The OMV Group produces base chemicals such as ole- fins (ethylene, propylene, butadiene, and high-purity isobutene) and aromatics (benzene and phenol). ▸ Ethylene and propylene are important chemical building blocks for producing polyolefins (polyeth- ylene and polypropylene), for example, which are in turn used to manufacture a wide variety of con- sumer and industrial products. ▸ Aromatics such as benzene are used as starting materials for heat insulating materials and con- sumer products, including clothing, pharmaceuti- cals, cosmetics, computers, and sports equipment. ▸ C4s (e.g., butadiene and butene) are used in a vari- ety 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 polyols for coat- ings 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). The year 2022, was a challenging year with a very vol- atile market, which was caused by several main fac- tors: the Russian invasion of Ukraine, high energy costs, high inflation, and decreasing demand across the year. In comparison to 2021, the ethylene and propylene in- dicator margins were higher in 2022, driven by low feedstock prices, except for the peak in Q1/22, and high monomer contract prices. In Q1/22, even though the olefin market was tight, margins were negatively im- pacted by the war in Ukraine. Starting from April 2022, naphtha availability in Europe increased due to lighter refinery feedstock and lower demand from China. To- gether with a healthy demand in the spring turnaround season this led to historically high margins in Q2/22. Af- ter July, both the ethylene and propylene markets be- came extremely long. All crackers in Europe reduced throughput based on weak demand and high energy prices. Low Rhine water levels caused logistical con- straints on the derivative market throughout the sum- mer months. As the market was struggling with these constraints, thanks to declining naphtha prices, the healthy indicator margin could be kept throughout Q3/22. However, demand did not improve from the summer lull into fall, the dramatic collapse in demand continued until the end of the year. The cracker rates in Europe reduced to global minimum levels of 60% to 65% in Q4/22 due to extremely weak demand. The propane dehydrogenation (PDH) margin remained on a healthy level in the first half of 2022 on the back of a decent propane spread versus naphtha. Margins dropped severely in the third quarter, driven by lower- ing demand and a strengthening propane price versus naphtha due to higher propane demand, mainly in Asia. Margins improved again in the last quarter of the year driven by lowering propane demand due to lockdowns in China and a mild winter in Europe. 1 On June 2, 2022, Borealis received a binding offer from AGROFERT, a.s. for the acquisition of its nitrogen business including fertilizer, melamine and technical nitrogen products. 64 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Butadiene demand was healthy in Q1/22, but with in- creasing naphtha prices, the indicator margins were at the lowest level of the year. Starting from May, supply was low due to reduced cracker rates on a long olefin market, however, the market was still balanced as the demand was low. The skyrocketing natural gas prices in Europe put its chemical industry under great strain, with high energy prices, a significant driver of inflation, and economic weakness lowering demand. Most pro- ducers had to add energy surcharges to their prices. The highest butadiene price and indicator margin of the year was achieved in August. Following the historically high levels reached in 2021, polyolefin margins slowly normalized in the first half of 2022, supported by a busy spring turnaround season, particularly in the second quarter. As of the third quar- ter, margins deteriorated due to plummeting demand resulting from the global GDP slowdown, and inflation- ary pressure on customers. In the meantime, the robust recovery of the international container freight market, which in December 2022 had approached pre- COVID-19 levels, allowed imports to surge. Toward the end of the year, polyolefin margins recovered slightly thanks to low operating rates. Following the ISCC PLUS-certification at the Burghau- sen refinery in March 2022, OMV successfully sold its first ISCC PLUS certified benzene volumes this year. The benzene crack hit an all-time high in July at around EUR 900/t, however, the crack significantly weakened later in the year and reached around zero by year end due to volatile market conditions. Uncertainty in eco- nomics, logistical constraints and skyrocketing gas prices affected production costs and demand heavily. Polyolefins Through its subsidiary Borealis, OMV 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 addition, 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. Renewables and circular chemicals Plastics continue to play a vital role in the economy and in our business, making our lives more efficient, con- venient, and safe. Yet, when insufficient effort is made to recover and reuse plastics, most of them end up in landfill or incineration. The vision of a circular economy where we optimize resource efficiency and reuse, recy- cle and re-purpose endlessly is both a business imper- ative and an opportunity. Demand for recycled plastics is growing due to increasing public awareness of the importance of using resources sustainably to ensure a climate-neutral future. 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 that are manufactured with second-generation re- newable feedstock. While mechanical recycling has proven to be effective and will likely remain the eco-effi- cient method of choice for the foreseeable future, chemical recycling will play an increasingly important role to complement it for hard-to-recycle materials. In June, Borealis launched the Borvida™ portfolio of circular base chemicals: Borvida™ B is produced using non-food waste biomass, while Borvida™ C is made of chemically recycled waste. The traceability of these ISCC PLUS-certified products – which include eth- ylene, propylene, butene, and phenol – is ensured thanks to the mass balance method of documenting and tracking renewable-based content across complex manufacturing systems. The Borvida™ portfolio will be extended in due course with the Borvida™ A range sourced from atmospheric carbon capture. 65 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT In October 2022, planning started for the construction of a novel and advanced commercial-scale mechanical recycling plant in Schwechat (Austria) to augment the three existing polyolefin recycling operations currently operated by Borealis in Europe. The plant will be based on the proprietary Borcycle™ M technology, which transforms polyolefins-based post-consumer waste into high-performance polymers. Once operational in 2025, the new plant will have an annual production capacity in excess of 60,000 t. These large volumes will ensure the ample supply of high-quality recyclate so as to fulfill growing demand for circular products and solutions. Since 2021, Borealis has procured pyrolysis oil for the chemical recycling process from Belgium-based Re- nasci with which it manufactures Borcycle™ C circular polyolefins and base chemicals at several of its own production locations. Since then, Borealis has gradually increased the stake it holds in Renasci: from 10% in 2021 to just over 27% in November 2022, and as of January 2023 to a current majority shareholding posi- tion of 50.01%. OMV is currently constructing a demo plant based on its proprietary ReOil® technology to scale up its chemi- cal recycling capacities. The plant has a capacity of 16,000 t p.a. and is scheduled to start up in 2023. The feedstock will consist mainly of polyolefins and will be sourced in Austria 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. OMV’s next step toward an industrial-scale plant with a pro- cessing capacity of up to 200,000 t/year is planned for 2026. Fertilizers, melamine, and technical nitrogen products Through its subsidiary Borealis, OMV 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. In 2020, the OMV Group announced that it had started the divestment process for the nitrogen business unit, which includes fertilizers, technical nitrogen, and mela- mine. A binding offer received from EuroChem in Feb- ruary 2022 was declined in March after assessing the consequences of the war in Ukraine and related sanc- tions. In June 2022, Borealis received a binding offer from Czech-based AGROFERT that valued the busi- ness on an enterprise value basis at EUR 810 mn. Pending regulatory approval, closing is anticipated for the first quarter of 2023. The sale of the Company’s share in Rosier, which operates the production sites in the Netherlands and Belgium, to Yilfert Holding was completed on January 2, 2023. Joint ventures Borouge (Borealis 36%, ADNOC 54%, free float 10%) 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 Indian subcontinent, and Africa. In June 2022, Borouge, became the largest-ever IPO in Abu Dhabi when it was listed on the Abu Dhabi Securi- ties Exchange (ADX). The IPO offered 10% of Bor- ouge’s total issued share capital and raised over USD 2.0 bn in gross proceeds. It drew USD 83 bn in or- ders and was oversubscribed by nearly 42 times in ag- gregate. Baystar (Borealis 50%, TotalEnergies 50%) Baystar is a joint venture between TotalEnergies Petro- chemicals & 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. 66 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Growth projects Borouge Borouge continued to drive growth in 2022. February saw the ground-breaking ceremony for Borouge 4, the new USD 6.2 bn facility under construction at the Bor- ouge complex in Ruwais (UAE). Once operational, Bor- ouge 4 will help meet growing demand for polymers in the Middle East and Asia, and will also supply feed- stock to the adjacent TA’ZIZ Industrial Chemicals Zone. The successful start-up of PP5, the fifth Borouge poly- propylene (PP) unit, also took place in February, boost- ing total Borouge PP capacity by more than 25%. The new PP5 unit is leveraging the proprietary Borstar® technology to deliver greater quantities of polymer- based material solutions for a wide range of industries, from packaging and consumer goods to pipe and infra- structure. Baystar The largest Borealis growth project underway in North America is the Baystar™ joint venture with TotalEnergies in Port Arthur, Texas. A new ethane- based steam cracker was started up in July 2022. With an annual production capacity of 1 mn t of ethylene, the cracker supplies feedstock to Baystar’s existing polyethylene (PE) units. In the future, it will also supply ethylene to the new, 625,000 metric-ton-per-year Borstar® PE unit once construction and ramping up have been completed. Baystar is a crucial growth anchor as it enables Borealis to bring Borstar to North America for the first time. Kallo Progress was made in the first half of 2022 at the new world-scale propane dehydrogenation (PDH) plant in Kallo (Belgium). However, construction was stopped af- ter misconduct on the part of the site’s contractor, IREM, was uncovered. Borealis suspended, then termi- nated all contracts with IREM and its subcontractors due to non-compliance with fundamental contractual principles. Work resumed in October following a re-ten- dering process. Start-up of the new PDH plant is ex- pected in the second half of 2024. Borealis has zero tolerance for non-compliance in all aspects of its opera- tions and has since implemented more extensive con- trols and monitoring measures to ensure full future compliance. 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 using a pyrolysis pro- cess since 2018. This synthetic crude is then pro- cessed mainly into monomers and other hydrocarbons in the Schwechat refinery. The pilot plant has been run- ning for a total of 18,000 hours since its commissioning, enabling improvements in the thermal cracking process and supporting the further scale-up of the ReOil® tech- nology. OMV and Borealis are pursuing the clear ambi- tion of becoming a leading player in chemical and me- chanical recycling technologies. In November 2022, OMV has signed a Memorandum of Understanding with Wood, a global leader in consulting and engineering solutions in energy and materials markets, to enter into a mutually exclusive collaboration agreement for the commercial licensing of OMV’s proprietary ReOil® tech- nology. 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. Borealis is investing in R&D and new technologies in order to accelerate Value Cre- ation through Innovation, particularly in the circular sphere. Around 500 people are active in R&D at the Borealis Group. This figure includes scientists and researchers at the Innovation Headquarters in Linz (Austria) and the two innovation centers in Stenungsund and Porvoo. Borealis continues to be among the top-ranked compa- nies in Austria with respect to patent filings. In 2022, Borealis filed 128 new priority patent applications at the European Patent Office. This is just short of its previous record of 133 patent applications filed in 2021. As of January 2023, the Borealis Group holds around 11,500 individual patents or patent applications which are sub- sumed in approximately 1,450 patent families. The growing number of patents is proof positive of the Group’s dedication to Value Creation through Innova- tion. The K 2022 trade fair held in Germany in October was the ideal stage for showcasing the many new products and material solutions generated through innovation 67 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT and collaboration. Center stage was taken by the Borstar® Nextension technology, a step change for per- formance-based polyolefins. The unique combination of Borstar® technology and single-site Borstar® Nexten- sion catalysts improves PP properties and produces a wider range of tailored polyolefins. Borstar® Nextension facilitates easier recycling because its use in multilayer applications allows for the replacement of multiple dif- ferent materials with only one material; it thus encour- ages design for recycling by enabling monomaterial so- lutions. The single-site catalysts for this breakthrough technology are manufactured at a newly built Borealis plant in Porvoo (Finland). Two BorPure™ and a nonwo- ven grade based on Borstar® Nextension technology were also launched in October, each offering superior performance combined with circularity and material effi- ciency. Grades from the Bornewables™ portfolio of premium circular polyolefins based on renewably sourced feed- stocks are being used to develop an increasing number of novel applications, many of which are generated through value chain collaboration. To name just a few of the products made using grades from the Bornewa- bles™ range and presented at the K 2022: the MAM Original Pure climate-neutral baby pacifier, a coffee-to- go cup in the Tupperware ECO+ product line, a reusa- ble and fully recyclable lightweight plastic bottle co-de- veloped by Borealis and Trexel, and a series of rigid food packaging applications based on Bornewables™ and Borcycle™ C co-developed by Borealis and ITC. In the Pipe sector, collaboration with Uponor resulted in the first PE-X pipes based on Bornewables™ feed- stock, while co-operation with NUPI produced next- generation PP-RCT pipes based on Bornewables™. Other circular highlights of 2022 include three fully re- cyclable, PE monomaterial pouch solutions; lightweight and ultra-lightweight reusable cups made of Borealis PP using the patented Bockatech EcoCore plastic foaming technology; a series of flexible packaging for- mats incorporating 50% PCR; and the world’s first shoe made from carbon emissions, On’s Cloudprime, con- taining high-performance, easy-to-process ethylene vi- nyl acetate foam supplied by Borealis. In June, the first Borcycle™ M jacketing compound containing up to 50% PCR was launched, thereby promoting enhanced circularity in the Wire & Cable sector. Finally, in the au- tomotive sector, Borealis announced in October that collaboration with Tier One supplier Magna had pro- duced the first and largest-ever all-thermoplastic tail- gate for the new Volkswagen Multivan, a prime exam- ple of customer-centric innovation resulting in high-per- formance yet lighter-weight parts that help reduce the carbon footprint of vehicles. 68 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 the cus- tomer experience, it will also support the achievement of sustainability goals. In particular, digital solutions for the circular economy of plastics will become more im- portant for the success of the Group’s carbon neutrality journey. For that reason, Borealis decided in 2017 to implement a digital program and to create a state-of-the-art IT and digital organization, which led in 2018 to the creation of the Borealis Digital Studio in Brussels (Belgium). The Digital Studio is Borealis’ creative and agile enabler for developing smart solutions for customers and employ- ees. It consists of a diverse, cross-functional team of digital professionals, including designers, usability ex- perts, business analysts, software developers and engi- neers. Its mission is to support the Group’s businesses as they adapt to a rapidly changing environment and to keep Borealis sustainably profitable, by creating inno- vative digital solutions that have a positive impact on the Group, its people, and the environment. Adding value is key when creating digital solutions and end-us- ers are always at the heart of the process, as the solu- tions are built both with and for them, following the agile methodology. Together with the Borealis IT organiza- tion, the Digital Studio explores innovation options with the business functions. An innovative game-based interactive learning solution helps employees and contractors learn the Group’s Life Saving Rules and Process Safety Rules in a very im- mersive way, allowing them to apply theory to practice without stopping production or risking injury. The train- ing combines a 3D-modeled plant environment, an en- gaging story, and motivating gamification elements to simulate safety scenarios, enabling people to learn faster and retain knowledge better than traditional methods. In addition, Borealis has explored virtual real- ity technology to complement existing training methods and support the Group’s journey to reach Goal Zero. Borealis is employing artificial intelligence (AI) models to improve quality. A solution that uses image recogni- tion to trace contamination has been rolled out to multi- ple locations across the Group. It gives customers peace of mind by ensuring they receive very clean pol- ymer material, which is especially relevant for high-volt- age insulation applications in the Energy business. In addition, Borealis’ plastic recycling businesses are us- ing AI to improve their intake quality and waste sorting, OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT which in turn supports the Group with advancing the circular economy. The online portal for polyolefins customers, MyBorealis, supports customer service representatives and sales managers in their daily interactions with customers. It puts easy order management at the customers’ finger- tips, along with a complete library of order, product, 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 Europe, North America, and South America to use it. By the end of 2022, 20% of the order volume came in via the por- tal, up from 18% at the start of the year. Borealis has developed a solution for recording and fol- lowing up on the condition of equipment at its plants. The integrated digital tool allows the operator to access and enter real-time data in the field, using tablets com- pliant with ATEX, the two European Directives for con- trolling explosive atmospheres. Additionally, a failure prediction model using Borealis’ cloud-based data and analytics platform has been rolled out on rotating equip- ment. The model allows live anomaly detection and will be adapted for other equipment types, contributing to higher reliability for the Group’s production assets. Other initiatives to increase reliability include introduc- ing autonomous robots with sensors for monitoring data points from equipment, using smart glasses to enable skilled experts to provide remote assistance in the field, and creating a Group-wide data platform containing 3D scans of critical spare parts. To better support Borealis’ complex activities in plant turnarounds, a Management Tool for Turnaround and Projects has been rolled out, which fully integrates planning and progress reporting on work orders, as well as the Go4Zero tool, which supports safety follow-up for employees and contrac- tors. At the K 2022 trade fair, Borealis presented Neoni, a new carbon dioxide equivalent (CO2e) emissions calcu- lator that is currently under development. This digital tool is the first in the industry to offer CO2e emissions data down to the grade level for polyolefins, providing more transparency to Borealis’ customers so they can make informed decisions on which materials best meet their circularity goals. Neoni offers a partial carbon foot- print of products from Life Cycle Assessments (LCAs), in the form of cradle-to-gate CO2e emissions. This means the calculation includes all CO2e emissions in- curred up to the moment the grade leaves Borealis’ fa- cilities. The tool will soon offer customers the option to calculate additional CO2e emissions incurred from Bo- realis to their own operations, further enhancing its use- fulness. Neoni presents CO2e emissions for a wide range of materials, from virgin, fossil feedstock-based solutions to renewable feedstock-based grades in the Bornewables™ portfolio of circular polyolefins, as well as those in the Borcycle™ portfolio of mechanically re- cycled polyolefins. The results from the tool will be ac- cessible to customers on MyBorealis, the online plat- form for Borealis customers. 69 OMV ANNUAL REPORT 2022 / 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 & Power Eastern Europe Special items CCS effects: inventory holding gains/(losses)1 Operating Result Capital expenditure2 OMV refining indicator margin Europe based on Brent3,4 Utilization rate refineries Europe Fuels and other sales volumes Europe thereof retail 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 2022 2,415 350 605 774 202 3,392 821 14.71 73% 15.51 6.16 2021 945 (11) 188 (924) 430 451 633 3.66 88% 16.34 6.40 ∆ 155% n.m. n.m. n.m. (53)% n.m. 30% n.m. (15) (5)% (4)% Note: As of 2022, the gas business was split into Gas Marketing Western Europe reported under Exploration & Production, and Gas & Power Eastern Europe reported under Refining & Marketing. Previously, the gas business was fully reflected in Refining & Marketing. For comparison only, 2021 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 As of Q2/22, the refining indicator margin reflects the change in the crude oil reference price from Urals to Brent at OMV Petrom. For comparison only, 2021 figures are presented based on the new calculation logic. 4 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 increased signifi- cantly to EUR 2,415 mn (2021: EUR 945 mn). Excep- tional refining indicator margins, a significantly better result in Gas & Power Eastern Europe, and a remarka- ble ADNOC Refining & ADNOC Global Trading result more than compensated for the negative production ef- fects following the turnaround and incident at the Schwechat refinery, higher costs driven by turnaround activities, and a lower retail result. The OMV refining indicator margin Europe went up sharply to USD 14.7/bbl (2021: USD 3.7/bbl). Higher cracks for diesel, gasoline, and jet fuel were only partially offset by rising fuel and losses due to the further Brent price increase, and lower heavy fuel oil cracks. In 2022, the utilization rate of the European refineries decreased by 15 percentage points to 73% (2021: 88%), mainly caused by the turnaround and the incident at the Schwechat refinery, as well as the turnaround at the Burghausen refinery in the second and third quarters of 2022. At 15.5 mn t, fuels and other sales volumes in Europe decreased slightly by 5%, mainly as a consequence of lower supply availability in Schwechat and the divestment of the German retail business, partly offset by higher jet fuel 70 sales volumes. The result of the commercial business declined slightly, mainly due to the price cap regulations in several countries, especially in Hungary and Slovenia. This was partially offset by increased demand for jet fuel driven by the easing of travel restrictions. The contribution from the retail business to the result decreased significantly, mainly driven by the divestment of the German retail network in May 2022, higher utilities costs, lower fuel unit margins following the price caps in several countries, and higher fixed costs driven by inflation. This was partially offset by better performance in the non-fuel business and cost- cutting efficiency measures. In 2022, the contribution of ADNOC Refining & AD- NOC Global Trading to the clean CCS Operating Re- sult grew substantially to EUR 350 mn (2021: EUR (11) mn), mainly as a result of higher refining mar- gins, and robust operational performance at ADNOC Refining. In addition, ADNOC Global Trading provided strong support to the result compared to the same pe- riod of the previous year. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT The contribution of the Gas & Power Eastern Europe business to the result more than tripled to EUR 605 mn (2021: EUR 188 mn), mainly due to the positive impact of increasing gas selling prices, high gas margins on gas transactions outside Romania, and better power re- sults due to higher margins following higher power sell- ing prices. This was partially offset by Petrom Gas & Power being significantly regulated through extended scope of capped prices and of overtaxation, for both gas and power. Net special items amounted to EUR 774 mn (2021: EUR (924) mn) and were primarily related to the sale of the German filling stations in May 2022 and commodity derivatives. In 2021, special items were mainly related to an impairment in ADNOC Refining in the amount of EUR (669) mn. CCS effects of EUR 202 mn were rec- orded in 2022 as a consequence of increasing crude oil prices. The Operating Result of Refining & Marketing rose substantially to EUR 3,392 mn (2021: EUR 451 mn). Capital expenditure in Refining & Marketing amounted to EUR 821 mn (2021: EUR 633 mn). Organic capital expenditure in 2022 was predominantly related to the European refineries and the retail network. The in- crease in capital expenditure in 2022 was mainly due to turnaround activities, repair works at the Schwechat re- finery, and investments in the co-processing unit at Schwechat. Business overview The Refining & Marketing business segment refines crude oil and other feedstocks, and markets fuels as well as natural gas and power. Its activities include Re- fining, Supply and Trading, Commercial, Retail, and Gas & Power Eastern Europe. OMV owns a total refin- ing capacity of around 500 kbbl/d, with three wholly owned refineries in Europe and a 15% share in AD- NOC Refining and ADNOC Global Trading. In Europe, refining activities are highly integrated with marketing to serve a strong branded retail network and a broad base of commercial customers. Total fuels and other sales volumes Europe amounted to 15.51 mn t in 2022. The strongly branded retail network comprising 1,803 filling stations accounts for around 40% of the sales volumes, while commercial customers are mainly from industrial transportation and construction sectors and account for the remaining sales volumes. In the Gas & Power East- ern Europe business, OMV Petrom operates a gas- fired power plant in Romania and is engaged in gas and power sales. Refining including product supply and sales Throughout 2022, we saw exceptional refining margin strength. A boom in benchmark refining margins took hold from the end of the first quarter, when middle dis- tillate tightness really started to become apparent. The Russian invasion of Ukraine, which was followed by a raft of “self-sanctioning” measures by western firms in the trade of Russian oil, contributed significantly to this tight picture. Resurgent demand in the first half of the year also exposed significant tightness in the global re- fining system’s ability to supply additional distillate vol- umes. This distillate tightness was consistently the driver of refining economics over the course of the year. With Russia’s established role as a key supplier of distillate molecules into the European market severely curtailed, the value of distillate molecules in Europe surged. This peak was sustained throughout the second quarter, with ultra-low sulfur diesel in Rotterdam averaging a premium of close to USD 50/bbl to Dated Brent over the quarter. Jet quotations tracked a similar high-pre- mium path. The refining system’s struggle to meet de- mand was also evident in the rate at which inventories were drawn down in high-visibility hubs over the first half of the year. A significant degree of tightness in the production capacity of core refined products can in part be attributed to a raft of capacity losses since the high water mark for demand in 2019. Late in the second quarter turned out to be the high point for benchmark margins, as refinery supply in- creasingly caught up with demand as the year pro- gressed. As product supply increased in response to the unprecedented rally in middle distillate and gasoline cracks over the second quarter, headwinds in naphtha and heavy products became increasingly apparent. Naphtha cracks versus Brent in Europe lost more and more ground over the first half of 2022, averaging a dis- count of more than USD 35/bbl versus Dated Brent in June and posting only a moderate recovery over the second half of 2022. Demand for naphtha remained weak as petrochemical margins remained under signifi- cant pressure. Fuel oil cracks similarly failed to post any appreciable recovery from the declines seen over the first part of the year. High-sulfur fuel oil in Rotter- dam came off its mid-year lows when it was trading at a discount of more than USD 40/bbl versus Dated Brent, but remains heavily discounted. 71 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT The extreme divergence of product cracks throughout 2022 reflects the forced rearrangement of interregional crude and product flows as Russia, a major supplier of both, was shut out of many importing markets. At the same time, European in particular and to some extent Asian gross margins had to reflect the much higher cost of refinery production (i.e., energy and refinery fuel) throughout 2022, which is itself a function of the changes in the European natural gas market on the back of geopolitical upheaval. In sum, the cost of sup- plying the marginal diesel barrel to the market in 2022 was significantly higher than in 2021. OMV’s European refineries achieved a utilization rate of 73% in 2022, which was influenced strongly by the planned turnaround activities in the Schwechat and Burghausen refineries, and the incident at the crude oil distillation unit in Schwechat. During the legally re- quired water pressure test as part of the final work on the OMV Schwechat refinery’s turnaround, significant damage occurred to the crude oil distillation unit on June 3, following a mechanical incident. After repair work completed in record time, and without a single in- cident, the crude oil distillation unit resumed full opera- tions on October 7, 2022. Despite the challenging environment caused by the un- stable geopolitical situation and the incident at the Schwechat refinery, commercial sales delivered ahead of expectations in many areas. The Operating Result was mainly driven by well-executed price management, even with lower volume availability. To closely reflect the market developments and market outlook, OMV’s commercial products and services are being expanded, including the launch of several new, more sustainable products. Sustainable Aviation Fuel (SAF), for example, contributes to a reduction of CO2 emissions of more than 80% as a result of processing regionally sourced used cooking oil. Starting with the production of around 2 kt of Sustainable Aviation Fuel in 2022, OMV plans to scale production up and to market 700 kt per year by 2030. In terms of sales, OMV is already delivering SAF to Austrian Airlines at Vienna Airport. In addition, MoU agreements with Lufthansa, Ryanair and Wizz Air were signed in 2022, for the supply of up to 1,145 kt SAF in the period 2023–2030. ADNOC Refining & Trading Alongside majority shareholder ADNOC (65%) and Eni (20%), OMV is a strategic partner in ADNOC Refining after acquiring 15% of the company’s shares at the end of July 2019. In 2022, ADNOC Refining operated its major refinery in Ruwais, which is the world’s fourth largest refining complex with integrated petrochemicals. In comparison to 2021, in 2022 the ADNOC Refining business benefitted from a higher margin environment and improved operational performance. With the same ownership structure as ADNOC Refining, ADNOC Global Trading (AGT) trades the majority of ADNOC Refining’s export volumes of products and supplies non-domestic crudes, condensates, and other liquids for processing. AGT extends the successful Refining & Marketing busi- ness model into key geographic regions and to strate- gic partners. By continuously optimizing trade flows, it allows ADNOC Refining to access competitive non-do- mestic feedstock sources and implement best practices such as risk management. During 2022, AGT performance was strong, continuing to pursue its business ambition and substantially grow- ing its third-party trading. Refining capacities 2022 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 a challenging environment due to both the war in Ukraine and the shortage in supply, mostly as a re- sult of the crude oil distillation unit incident at the Schwechat refinery, the retail business achieved a re- markable result in 2022 and proved again to be a sta- ble outlet for refinery products and a strong cash gener- ator. Total sales partially recovered to 6.1 mn t, equivalent to approximately 7.6 bn l, strongly supported by an ongo- ing growing cards business. At the end of the year, the network comprised 1,803 filling stations (2021: 2,088). OMV especially benefitted from its proven multi-brand strategy in this challenging price environment. The OMV brand is positioned as a premium brand, with VIVA representing a strong shop, gastronomy, and ser- vice offering, while the unmanned Avanti brand in Aus- tria and the Petrom brand in Romania serve price-sen- sitive customer groups. Sales of OMV’s premium-brand fuels MaxxMotion have been under pressure due to the overall consumer price environment, but still contrib- uted to the overall Retail result as a high margin prod- uct. The non-fuel business, including VIVA conven- ience stores and car washes, continued to grow and 72 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT outperformed 2021. In Austria and Slovakia, a new third-party store partnership with REWE has been suc- cessfully introduced. In multiple countries, the loyalty system has been successfully upgraded by utilizing state-of-the-art digital solutions. footprint. Gas transactions executed outside Romania, diversifying the supply portfolio with LNG, and the en- larged customer portfolio (including small businesses and even residential customers) were successfully managed, improving the results. The OMV network partners with third parties to provide EV-charging facilities at more than 150 sites, and has introduced the first OMV owned and operated EV chargers in Austria. Further investments in OMV’s own EV-charging infrastructure will be one of the strategic key pillars within the Retail business. Approximately 380 sites are equipped with photovoltaic installations, underlining OMV’s focus on sustainability and resili- ence. Following a clear strategy of active portfolio manage- ment, OMV has decided to divest certain parts of its re- tail network. Closing of the divestment of the OMV net- work in Germany (285 filling stations) to the EG Group took place in April 2022. The announced divestment of OMV Slovenia (118 filling stations) to the MOL Group is dependent on the Merger Clearance process carried out by EU authorities. Furthermore, a divestment agreement was signed for Avanti Germany comprising the sale of 17 unmanned filling stations to PKN Orlen in December 2022. Gas & Power Eastern Europe In 2022, the European gas market was characterized by unprecedented high gas prices and significant vola- tility. This situation is expected to continue. Similarly, in Romania, both gas and power markets faced unseen volatility and unpredictability levels with high prices and a drop in demand. A series of regula- tory interventions and market constraints significantly impacted operations and results, and will continue to do so in the future. In Romania, OMV Petrom’s gas and power activities once again delivered a record high Operating Result, reflecting outstanding business performance built on the profitable optimization of product, market, and cus- tomer portfolios. Natural gas sales volumes to third par- ties reached 35.8 TWh in 2022 compared to 38.4 TWh in 2021, a very strong performance given the market environment. As the overall market demand was signifi- cantly down, OMV Petrom’s gas volumes covered an increasing share of the overall consumption. OMV Petrom managed to source high gas volumes from third parties, thus successfully covering its sales channels. In addition, activities in the neighboring markets, both for gas and power, have been expanded, laying a strong foundation for further extension of our regional OMV Petrom’s net electrical output increased to 5.01 TWh, +5% compared to 2021, and a record high level of production since the start of operations. The Brazi power plant covered around 9% of the national power generation mix, reaching a record high contribu- tion to the security of the national power system. The Brazi power plant celebrated in August 2022, ten years since its commissioning, having generated over 34 TWh of electricity during this period. Looking for- ward, the Brazi power plant remains a pillar of the Ro- manian power market, natural gas being a good fit for renewable energy. Nord Stream 2 OMV is a financial investor in the Nord Stream 2 pipe- line project along with four other European companies. In 2022, OMV decided to impair the entire outstanding loans and accrued interest (approximately EUR 1 bn). For further details, please refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant es- timates and assumptions’. Innovation and new technologies OMV actively explores alternative feedstocks, technolo- gies, and fuels with the aim of developing a well-diver- sified, competitive future portfolio. Additional attention is given to the production of conventional and ad- vanced biofuels, synthetic fuels, and green hydrogen as precursors for sustainable feedstock for chemicals. OMV is in the execution phase of the Co-Processing project at the Schwechat refinery. This technology ena- bles OMV to process biogenic feedstocks (e.g., domes- tic rapeseed oil) together with fossil-based materials in an existing refinery hydrotreating plant during the fuel refining process. This will reduce OMV’s carbon foot- print by up to 360,000 t by substituting fossil diesel. Op- erations are scheduled to begin in 2023. In 2022, OMV started pilot production of Sustainabile Aviation Fuel (SAF) from another co-processing route in Schwechat, and completed the first conversion runs of biogenic feedstock to ethylene in the refinery in Burghausen. OMV secured a long-term contract with AustroCel Hal- lein to supply OMV with advanced bioethanol totalling up to 1.5 mn l per month starting in January 2021. This 73 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT will reduce emissions by around 45,000 t of CO2 per year. Digitalization Digitalization remains a significant part of optimizing our value and operational efficiency with activities in 2022 bringing EUR 26 mn benefit over the coming four years. Highlighted examples for 2022 include: A digitalized predictive cleaning schedule for the heat exchangers in our crude distillation units in Austria and Romania resulted in both better energy efficiency and higher throughput. These data-driven optimizations generated savings of EUR 1.7 mn p.a. and contributed to our sustainability targets by saving approximately 37,000 t CO2 p.a. Our new digital Customer Engagement Platform saw the launch of our customer portal in 2022, which ena- bles customers to enjoy the benefits of a modern col- laboration platform with features such as instant infor- mation on placed orders or checking available credit lines. The significant digital milestone for our retail business came with the launch of the OMV MyStation app, a mo- bile app that went live in 2022 in five countries. The app had already counted approximately 402,000 users by the end of 2022, and digitalized OMV’s loyalty program, among other functions. To further improve the cus- tomer experience, future functionality will aim to also in- clude options in the areas of sustainability and cus- tomer service. The loyalty club, enhanced by the app, contributed to an increase in our premium fuels share, which for a loyalty member is double that of a non- member (34% share of premium fuels for members). Over the last two years, the Robotic Process Automa- tion (RPA) has automated 107 routine processes and delivered benefits of over EUR 2.8 mn of year-on-year savings. OMV is assessing the potential production of advanced fuels made out of residue or waste streams. Unlike conventional biofuels, the use of advanced fuels is not capped. The principal sources of advanced fuels in- clude biomass fraction from mixed municipal or indus- trial waste, straw, animal manure, or residues from for- estry and wood processing, as well as waste streams. OMV is currently constructing a pilot plant for the con- version of advanced glycerine to propanol. Commis- sioning is expected in the second half of 2023. OMV also collaborates with technology providers, industry partners, and academic institutions to assess the pro- duction of advanced biofuels and chemicals. While the above mentioned bio- and synthetic products will predominantly be sold as fuels initially due to a mandated market, they can also be used as chemical feedstock. OMV and its partners are working on the UpHy project with the intention of producing green hydrogen for use in both the mobility sector and the refining process. OMV is building an electrolysis plant at the Schwechat refinery for this purpose, to be powered with renewable electricity in order to produce zero-carbon hydrogen. The green hydrogen will initially be used for fuel hydro- genation, including biofuels and Sustainable Aviation Fuels. OMV, together with partners including BASF and thyssenkrupp Uhde, has initiated the consortium Meth- anol-to-SAF (M2SAF). The aim of the M2SAF project is to develop a novel process technology to facilitate the selective production of SAF that can be used as a drop- in fuel up to 100%. This production process should generate only minimal additional CO2 emissions and should be easy to integrate into existing production plants. The starting point of the process is sustainably produced methanol from CO2 and green hydrogen. As part of the overall concept of renewable fuels, the M2SAF development project is being funded to the tune of EUR 3.1 mn by the German Federal Ministry for Digital and Transport (BMDV). In addition to catalyst development, process development, plant integration, and the design of a demo plant, the project also in- cludes techno-economic and environmental analysis, as well as related support for the certification and anal- ysis of the new jet fuels. 74 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Exploration & Production In the Exploration & Production business segment, OMV boosted value delivery and cash generation from the portfolio of oil and gas assets, while building up a dedicated Low Carbon Business unit in line with the ongoing energy transition and to support the OMV Group’s transformation. At a glance Clean Operating Result thereof Gas Marketing Western Europe 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 price2,3 Average realized natural gas price2,4 in EUR mn 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 2022 7,396 (300) (460) 6,936 1,443 202 250 8.20 392 379 1,037 2021 2,892 55 18 2,910 1,194 210 281 6.67 486 462 1,295 in USD/bbl in USD/bbl in EUR/MWh 101.32 95.04 53.78 70.91 65.60 16.49 Δ 156% n.m. n.m. 138% 21% (4)% (11)% 23% (19)% (18)% (20)% 43% 45% n.m. Note: As of 2022, the gas business was split into Gas Marketing Western Europe reported under Exploration & Production, and Gas & Power Eastern Europe reported under Refining & Marketing. Previously, the gas business was fully reflected in Refining & Marketing. For comparison only, 2021 figures are presented in the new structure. 1 Capital expenditure including acquisitions 2 Average realized prices include hedging effects. 3 As of Q2/22, the transfer price at OMV Petrom between the E&P segment and the R&M segment is based on Brent instead of Urals. Previous figures have not been restated. 4 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 2,892 mn to EUR 7,396 mn in 2022. Exceptionally strong market effects of EUR 5,280 mn as a consequence of substantially higher oil and gas prices were partially offset by negative operational effects of EUR (679) mn due to the missing contribution of Russia following the change in the consolidation method, and a substantially lower Gas Marketing Western Europe result. In addition, production decreased in Romania, Malaysia, and Libya, while production increased in the United Arab Emirates after a revision of OPEC+ restrictions. Sales volumes decreased to a slightly lesser extent compared to production as a consequence of the scheduling of liftings. Depreciation of EUR (97) mn weighed on results, mainly driven by higher production in the United Arab Emirates and Norway. Gas Marketing Western Europe lowered the result, mainly due to losses caused by the Russian supply curtailments and volatility, receivables impairments, and valuation adjustments. A change in the reporting logic for LNG activities had a partially positive offsetting effect. Net special items amounted to EUR (460) mn in 2022 (2021: EUR 18 mn), which were mainly caused by the change in the consolidation method for Russian operations and the fair value adjustment to contractual position related to the reserve redetermination for the Yuzhno-Russkoye natural gas field. Valuation effects of commodity derivatives in Gas Marketing Western Europe and temporary hedging effects were partial offsets. The release of a provision in the LNG business also had a positive effect. The Operating Result reached EUR 6,936 mn (2021: EUR 2,910 mn). Production cost excluding royalties increased to USD 8.2/boe in 2022 (2021: USD 6.7/boe), mainly driven by the change in the consolidation method of Russian operations as of March 1, 2022, and general price inflation. The total hydrocarbon production volume decreased by 95 kboe/d to 392 kboe/d, caused above all by the change in the consolidation method of Russian operations as of March 1, 2022. Natural decline in Romania, planned maintenance in Malaysia, and force majeure in Libya following politically motivated closures were the most prominent additional 75 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT adverse factors. Production increased in the United Arab Emirates after a revision of OPEC+ restrictions. production. The average realized gas price in EUR/MWh more than tripled to EUR 53.80/MWh. Total hydrocarbon sales volumes dropped by a lesser extent than production volumes, to 379 kboe/d (2021: 462 kboe/d). The deviation between production and sales volumes is explained by the scheduling of liftings. In 2022, the average Brent price reached USD 101.3/bbl, a substantial growth of 43% compared to the previous year. The Group’s average realized crude price improved by 45%, supported by a change in the transfer price calculation for Romanian crude oil Production Capital expenditure including capitalized E&A was raised to EUR 1,443 mn in 2022 (2021: EUR 1,194 mn), rebounding from the previous austerity-induced level. Organic capital expenditure was primarily directed at projects in Romania, New Zealand, and Norway. Exploration expenditure was EUR 202 mn in 2022, and was thus broadly on a similar level compared to 2021. It was mainly related to activities in Malaysia, Romania, and Norway. 2022 2021 Oil and NGL in mn bbl Natural gas¹ in bcf in mn boe in mn boe Total Romania² Austria Kazakhstan² Norway Libya Tunisia Yemen Kurdistan Region of Iraq United Arab Emirates New Zealand Malaysia² Russia Total 20.9 3.3 – 14.7 10.4 0.9 0.6 1.0 15.4 3.0 0.6 – 70.8 122.0 19.7 – 102.2 – 14.7 – 15.8 – 47.1 60.0 37.7 419.2 22.6 3.3 – 17.0 – 2.4 – 2.6 – 7.8 10.0 6.3 72.1 43.5 6.6 – 31.7 10.4 3.4 0.6 3.6 15.4 10.8 10.6 6.3 143.0 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 1.0 10.8 3.5 1.7 – 72.9 129.9 20.6 0.7 102.3 – 17.3 – 15.6 – 51.8 64.5 210.6 613.2 24.0 3.4 0.1 17.0 – 2.9 – 2.6 – 8.6 10.8 35.1 104.6 46.4 7.0 0.8 32.3 12.0 3.8 1.1 3.6 10.8 12.1 12.4 35.1 177.5 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 The year 2022 marked the highest financial results for E&P, with a record clean CCS Operating Result of EUR 7.4 bn, driven by high oil and gas prices. Despite the production and supply impact of the Russia-Ukraine conflict, E&P has formed strategy implementation teams to focus on key strategic initiatives and made progress with identifying options for optimizing its port- folio, as well as starting the development of its Low Carbon Business. Shortly after the Russia-Ukraine con- flict started, OMV deconsolidated the participation in the Yuzhno-Russkoye natural gas field and ceased to consider Russia as a core region. Total average hydro- carbon production came in at 392 kboe/d for 2022, with a natural gas share of around 50%. 76 The key strategic focus of the E&P segment remains to increase the share of natural gas over that of crude oil and reduce carbon intensity across the portfolio. In 2022, E&P progressed well with its five major natural gas development projects: Neptun (Romania), Jerun (Malaysia), Berling (Norway), Ghasha (UAE), and Māui B (New Zealand). In 2019, OMV New Zealand announced the intended divestment of its 69% interest in the Maari field to Jadestone Energy. After ongoing engagement with Jadestone Energy, a mutual decision has been made to no longer pursue the transaction. In Yemen, the sales contract for OMV’s assets in the country were signed in December 2022. In Norway, the farm-out agreements for a 20% interest in the Oswig and Velo- cette licenses were signed on May 9, 2022, to Long- boat Energy. On February 27, 2023, OMV announced OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT that it started the sales process for the divestment of its E&P assets in the Asia-Pacific region: a 50% stake in SapuraOMV Upstream Sdn. Bhd. and 100% of the shares in OMV New Zealand Limited. In Q1/22, E&P integrated the Gas Marketing Western Europe business from Refining & Marketing. In light of market developments, E&P set up a Gas Task Force assigned with the following duties: ensuring that stor- age facilities in Austria were filled to 100% before the gas winter season 2022/23, establishing new payment conditions with Gazprom Export while complying with European sanctions, and securing additional supply contracts and pipeline capacities, mitigating the risk for OMV. Central and Eastern Europe In Romania, 55 new wells and sidetracks were drilled and 647 workover jobs performed. Also, 700 subsur- face abandonments were performed in 2022. OMV Petrom successfully and safely finalized the major planned maintenance works at both offshore and on- shore facilities. One new well was particularly success- ful in 2022, as it was put into production in the same year with excellent results. production there came back on stream by mid-July, it remained stable until the end of the year. In Yemen, production was stable for most of 2022 until political unrest started in Q4/22 and disrupted the ship- ping of crude oil for all oil and gas companies in the country. In Tunisia, stable production at the Nawara natural gas field was maintained. The front-end compression sys- tem execution project started in 2022 and an infill drill- ing project will commence in 2023. Both projects aim at increasing the life span of field production at the Na- wara asset. North Sea In Norway, several new production wells have come on stream. On Gullfaks, nine wells were delivered. The Gudrun Phase 2 Improved Oil Recovery (IOR) project was com- pleted. This project consists of one infill well, two water production wells, and two water injectors. Infill drilling on Edvard Grieg was completed during 2022 and all five wells from the Solveig field are now producing to- ward the Edvard Grieg platform. OMV Petrom continued to focus on the most profitable barrels and there are ongoing activities related to selec- tive divestments. The Hywind Tampen offshore wind project is now deliv- ering renewable wind power to the Gullfaks field. In Austria, the second and final phase of the photovol- taic plant Schönkirchen was commissioned success- fully in 2022. The plant now delivers total peak produc- tion of 15.32 MWp for a total power generation of around 15.84 GWh p.a. In 2022, OMV Austria placed significant emphasis on process safety topics. Hazard and operability studies were performed in seven facili- ties. Middle East and Africa In 2022, the Middle East and Africa region delivered strong production results despite a challenging security situation in Libya, Kurdistan, and Yemen. Operations were frequently disrupted and some projects delayed. Berling (formerly known as Iris/Hades) progressed to FID followed by the submission of the Plan for Develop- ment and Operations (PDO) to the Norwegian Ministry in December 2022. Asia-Pacific The Jerun natural gas project in Malaysia is progress- ing according to plan. Detailed engineering is well on track, and the first deliveries of structural steel have ar- rived at the fabrication yard. In New Zealand, OMV continued the redevelopment and optimization of the Māui and Pohokura natural gas assets. This strong production was due to an easing of the OPEC quota and several OMV-driven initiatives to im- prove the uptime and reliability of the offshore facilities in Umm Lulu and SARB in the UAE. Throughout this, the operations team have remained focused on keeping the gas flowing and prioritizing op- portunities to further reduce site emissions. In Libya, in the first half of the year, the production from our non-operated assets was heavily constrained due to several force majeure events. This production defer- ment was induced by security shutdowns as a result of the political instability in the country. But as soon as In Pohokura, the infill well was hooked up to the Poho- kura onshore facility, with the well producing as ex- pected. 77 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Workovers at Maari continued through to the end of 2022, and a strong focus on asset integrity and corro- sion management has allowed for life span extension initiatives to be pursued with no major issues identified to date. and the Deep Gas Development (also containing sev- eral fields). The Hail & Ghasha megaproject reached several milestones in 2022, with four out of the eleven artificial islands being completed. Key projects Neptun (Romania, OMV 50%) Starting in August 2022, OMV Petrom is now operator of the Neptun Deep offshore license block with new non-operating partner Romgaz. The Declaration of Commerciality (DoC) was successfully submitted to Ro- manian authorities in December 2022. The declaration of commercial discovery, while a significant milestone, represents an intermediate step in the process of mak- ing the final investment decision. Together with its new partner, OMV Petrom is planning FID in mid-2023. Other major projects (Romania, OMV 100%) The successful completion of an exploration well in July 2022 led to the discovery of large resources in the X Craiova Block. It is currently in experimental produc- tion. This discovery unlocks significant development opportunities, including the drilling of appraisal and de- velopment wells in the coming years. The commissioning of a photovoltaic park in 2022 marked a first for OMV Petrom. As part of an energy ef- ficiency program, we will use the power it generates for our own consumption within the Exploration & Produc- tion segment. The Enhanced Oil Recovery (EOR) project consisting of the injection of viscous salt water started in May 2022 and has been producing initial results. Umm Lulu and SARB (United Arab Emirates, OMV 20%) Record production was achieved in the Umm Lulu and SARB fields in 2022. Throughout most of the year, only a minimal OPEC quota was applied, so that production in both fields was close to its full potential. Development drilling continued during the year, using five rigs in total. Seven wells in SARB and 13 wells in Umm Lulu were drilled, while 22 new wells were brought on stream. 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), 78 In the Dalma project, activities on the onshore and off- shore Engineering, Procurement, and Construction (EPC) packages are progressing, with first gas targeted by the middle of the decade. Khor Mor (KRI, OMV 10%) The Khor Mor field exceeded production expectations despite several insurgent attacks during the year. Due to the deteriorating security situation since June, con- struction work on the Khor Mor expansion project is currently on hold. The operator will evaluate the situa- tion in the first half of 2023. Gullfaks (Norway, OMV 19%) In 2022, the Equinor-operated Gullfaks field delivered strong production volumes, mainly due to reduced nat- ural gas injection. Norway’s first floating wind farm Hywind Tampen started electricity production in No- vember 2022. The wind farm is expected to meet about 35% of the field’s electricity demand. By the end of 2022, seven out of eleven turbines had started produc- tion. The remaining four were assembled in late 2022 and will be installed onsite during 2023. Nine wells were part of the Gullfaks annual activity program in 2022. Gudrun (Norway, OMV 24%) The water injection project Gudrun Phase 2 has started on the Gudrun field in the North Sea. The Improved Oil Recovery (IOR) project will increase the oil recovery from the main reservoir on the field and extend produc- tion lifetime by two years, changing the drainage strat- egy from pressure depletion to pressure support by wa- ter injection. Berling (Hades/Iris) (Norway, OMV 30%) As the operator, OMV changed the name of the Hades/Iris field development project to Berling. The project is progressing toward FID followed by the sub- mission of the PDO to the Norwegian Ministry in De- cember 2022. Offers for rig charters are currently being reviewed. Production start-up is expected in 2028. 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. Phase 2 of the license, the Jerun project, is progressing well according to the construction plan. Fabrication of OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT the jacket and topside is well underway and continues to progress as planned. Works continue on the installa- tion of mechanical equipment, piping spools, and pull- ing electrical and instrument cables for topsides. Māui A Crestal Infill (New Zealand, OMV 100%) Two additional MACI wells following the successful drill- ing program earlier this year were started. Drilling is ex- pected to be completed in 2023. Māui B IRF Phase 3 (New Zealand, OMV 100%) The project scope of the Māui B IRF Phase 3 infill drill- ing comprises the drilling, completion, tie-in, and com- missioning of five sidetrack wells on the Māui B plat- form. Three out of the five wells were delivered during 2022. Exploration and appraisal highlights In 2022, OMV, OMV Petrom, and SapuraOMV drilled twelve exploration and appraisal wells in six different countries. Eight of these wells were completed before year end, while the other four were either drilling or testing in early January 2023. OMV operated or participated in a number of key wells, including two successful appraisals in offshore UAE, natural gas/condensate discoveries in Norway and Tu- nisia, and a successful natural gas appraisal well in New Zealand. OMV Petrom drilled three onshore explo- ration wells in Romania resulting in two oil discoveries. The SapuraOMV-operated Kanga drilling in Australia was completed in June 2022. The well did not discover any producible hydrocarbons. The drilling of four wells in Austria, New Zealand, the UAE, and Mexico was still ongoing at year end. These are expected to be finalized in Q1/23 or Q2/23. Exploration and appraisal expenditure slightly de- creased to EUR 202 mn in 2022 (2021: EUR 210 mn). Earlier in the year, SapuraOMV was awarded a 40% working interest in a Production Sharing Contract for the Offshore Exploration Block SB412 in Malaysia. Looking to Q1/23, new wells scheduled for spudding in January are foreseen in Romania, New Zealand, and Tunisia. Reserves development Proved reserves (1P) as of December 31, 2022, de- creased to 1,037 mn boe (thereof OMV Petrom: 380 mn boe), with a one-year Reserve Replacement Rate (RRR) of (80)% in 2022 (2021: 77%). The three- year rolling average RRR is 40% (2021: 105%). There were material proved reserves additions realized in Norway and the United Arab Emirates, with a commit- ment to execute more development drilling and encour- aging reservoir performance in both countries. These additions were offset by the exclusion of reserves in Russia since OMV ceased fully consolidating and eq- uity accounting Russian entities. Proved plus probable reserves (2P) decreased to 1,892 mn boe (thereof OMV Petrom: 741 mn boe), dominated by the exclusion of reserves in Russia, which overshadowed the positive revision in Romania from the maturation of the Black Sea Neptun Deep project. Gas supply, marketing, and trading OMV markets and trades natural gas in eight European countries. In 2022, natural gas sales volumes amounted to 111.2 TWh (2021: 156.8 TWh). The foun- dation of the natural gas sales business is a diverse supply portfolio, which consists of equity gas from Aus- tria and Norway (amounted to 36.3 TWh in 2022) and a variety of international suppliers. In addition to mid- and long-term activities, short-term activities at Europe’s main international trading hubs complement OMV’s supply portfolio. OMV Gas Marketing & Trading GmbH’s (OMV GAS) sales activities are focused on a diverse customer port- folio in the large-scale industry and municipality seg- ments in Austria, Germany, Hungary, the Netherlands, and Belgium. Italy, Slovenia, and France are covered by opportunistic origination activities. In 2022, the importance of the LNG business increased enormously and OMV fully utilized its allotted capacity at the Gate regasification terminal in the Netherlands. Several LNG contracts for 2023 and 2024 have already been concluded and concern non-Russian gas only. This makes the LNG business a very important building block for OMV to diversify the natural gas supply portfo- lio, thereby enhancing supply security. In 2022, the European natural gas market was charac- terized by the unprecedented energy market crisis stemming from the war in Ukraine, with very high natu- ral gas prices, extreme price volatility, and unpredicta- ble supply cuts from Russia. This situation is expected to continue. Degrading market conditions and deteriorating supply reliability drove OMV to restructure its natural gas busi- ness in 2022. A task force has been set up to minimize the adverse effects stemming from the war in Ukraine, 79 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT while securing a continuous and diversified supply stream. This involves regular reporting of the security of supply status regarding OMV’s portfolio in terms of the overall natural gas supply situation, storage filling lev- els, and a continuous definition and adjustment of hedging strategies that mitigate the inherent price risk of gas supply disruptions. Natural gas supply diversifi- cation strategies were defined and executed, and OMV has successfully secured additional natural gas trans- portation capacities. Furthermore, OMV was able to fully utilize the capacity of its storage facilities. These measures have succeeded in securing OMV’s portfolio and in increasing the resilience of the supply situation for the coming years. This will mitigate the impact of Russian gas supply curtailments in Germany and Aus- tria. Gas logistics OMV operates natural gas storage facilities in Austria and Germany with a capacity of 30 TWh. Additionally, OMV holds a 65% stake in the Central European Gas Hub (CEGH), the leading natural gas trading hub in Central and Eastern Europe. The unprecedented energy market crisis caused by the war in Ukraine has had a significant impact on the Eu- ropean storage market. The storage utilization period of 2022 started with very low levels all over Europe. Global demand, based on recovery from the pandemic, shortage of supply, and market uncertainty due to the war led to an inverse summer/winter spread, with sum- mer prices exceeding winter prices. European regula- tions concerning storage filling levels and unprece- dented volatility of prices across the entire energy com- plex dominated the market. In this difficult environment, OMV was able to fill its storage capacity in Austria and Germany to 100% by mid-October 2022, storage level at year end was at 97%. At the Central European Gas Hub, 633 TWh of natural gas was nominated at the Virtual Trading Point (VTP) in 2022. This volume corresponds to approximately seven times Austria’s annual natural gas consumption. The EEX CEGH Gas Market traded total volumes of 425 TWh in Austria, an increase of 84%, and 51 TWh in the Czech Republic, an increase of 79%. Low Carbon Business By 2030, OMV aims to invest around EUR 5 bn in low- carbon geothermal energy, Carbon Capture and Stor- age (CCS), and further renewable power solutions like photovoltaic or onshore and offshore wind power gen- eration. OMV will also explore opportunities in energy storage solutions, e.g., subsurface storage of hydro- gen. With these investments, OMV expects to generate an operating cash flow of EUR 0.5 bn per annum by 2030. All of the above-mentioned targets play a key role in OMV’s Strategy 2030. E&P started 2021 with the establishment of a dedicated Low Carbon Business unit, which has since gained sig- nificant momentum, both on a national and an interna- tional level, with a variety of initiatives started and sev- eral projects initiated and/or executed. OMV conducted a production and injection test in fall 2022 to analyze the geothermal potential in the Vienna Basin (Lower Austria). The test took place in the base- ment of the Vienna Basin. The aim of the geothermal test was to determine important reservoir parameters and to obtain samples of the formation water in order to decide whether this formation is suitable for producing geothermal energy for direct heat use. In Germany, OMV has a 50% interest in a geothermal exploration project called Thermo in Lower Saxony. This involves a small aircraft taking gravity and mag- netic measurements over an area of around 5,000 km² to gather geological information. This information will be used to assess the geothermal energy potential and will be part of a comprehensive evaluation of future ge- othermal activities in the area. In partnership with Complexul Energetic Oltenia (CE Oltenia), OMV Petrom will build four photovoltaic (PV) parks with a total power capacity of ~450 MW. Accord- ing to current estimates, the PV parks should supply electricity to the national energy system starting 2024. Further opportunities for photovoltaic projects in Lower Austria, as well as in other Austrian and international locations, are currently under evaluation. A strong focus of the OMV Low Carbon Business is on Carbon Capture and Storage (CCS), particularly to sup- port the hard-to-abate industry sectors in their goal of reducing their CO2 emissions. One of OMV’s focus ar- eas is offshore Norway, where currently, several CCS opportunities and projects are being assessed together with dedicated, experienced partners. Innovation and new technologies The Innovation & Technology department provides key expertise and cutting-edge technologies to ensure OMV’s strategic goal of decarbonization and becoming a net-zero emissions company. 80 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Technology scouting, innovation, and development is performed by a highly integrated team covering the en- tire value chain of energy projects: Surface, Subsur- face, Laboratory, and IT Solutions, in strong collabora- tion with OMV Petrom and renowned universities like Stanford. Multidisciplinary project teams focus on evaluating technologies and performing essential work for the en- ergy transition by building and providing expertise for future technology applications in hydrogen generation, geothermal energy, as well as carbon capture, utiliza- tion, and storage. Development of state-of-the-art online monitoring, artifi- cial intelligence and machine learning subsurface work- flows, water treatment, and drone technologies ensure safe, sustainable, and stable operations worldwide. The Innovation & Technology team demonstrates its position as a reliable technology and innovation partner by delivering technology to product solutions, support- ing major field developments in the UAE for ADNOC, and enabling stable natural gas production and supply through the deployment of technology for the OMV Petrom Neptun Deep project in Romania. Technology deployment in the area of Smart Oil Recov- ery (SOR) – an innovative method to optimize En- hanced Oil Recovery (EOR) in mature reservoirs – al- lows for incremental oil production. In the next genera- tion of EOR, we will use alkaline viscous salt water with increased mobilization effects especially in our Austrian reservoirs. Technologies that OMV successfully implements are showcased to the public at the OMV Innovation & Technology Center (ITC) in Austria. The Tech Center & Lab team in Austria and OMV Petrom Upstream Labor- atories (ICPT) in Romania support all OMV assets glob- ally as centers of excellence for analyses, testing, tech- nology research, and consulting. Digitalization The year 2022 was a pivotal year for OMV, as the group embarked on a journey toward a circular busi- ness model along the pathways laid out in OMV’s new Strategy 2030. Digitalization and innovation will play a key role on this journey. The tools and systems we have been putting in place for the E&P division over the last several years, as well as the new ways of working in cross-geographical, multidisciplinary teams are bear- ing fruit and will enable us to apply the available tech- nology in new markets, such as low-carbon business. In 2022, OMV joined forces with partners to implement the innovative DELFI environment across the majority of our operated ventures. This subsurface data and in- terpretation platform allows multidisciplinary teams to collaborate using the same data, both onsite and re- motely. Over the course of the year, over 200 users and almost 1 petabyte of data were migrated to the new public cloud platform using over 80 individual ap- plications. In 2023, the full rollout of DELFI across the organization will be completed. Building on the successful implementation of the DELFI platform, OMV’s best-in-class machine learning-sup- ported stochastic reservoir modeling and decision anal- ysis workflow was implemented in DELFI. The workflow is based on the results of the OMV-Stanford University project. The workflow leads to the integration of energy production optimization, economics, and decision-mak- ing. It includes OMV proprietary elements. Construction of our Operations Cockpit began at our base in Gänserndorf (Austria). Once completed, it will connect experts globally to optimize production and op- erating costs. OMV implemented a 3D intelligent digital twin and aug- mented reality inspection and maintenance tool for our operations in New Zealand, significantly enhancing the preparation and planning of maintenance activities there. We are utilizing the 3D visualization of our facili- ties to build inspection plans and complete the inspec- tions using iPads and the HoloLens. In 2022, OMV continued to automate its drilling activi- ties. We commissioned the construction of the first au- tomated onshore rig in OMV’s portfolio in Romania as part of our automated well delivery process. The auto- matic rig will improve HSSE performance by removing people from the rig’s danger zones. It will increase drill- ing efficiency by reducing time and costs due to a more effective execution of tasks. We expect that it will help us reduce the overall drilling cost per well by almost 10%. In addition, CO2 emissions will be reduced by 80 t per well. Following our AI (Artificial Intelligence) Strategy, we have established a new AI Ecosystem capability to fos- ter the increasing importance of AI and Machine Learn- ing (ML). The ecosystem provides all of the organiza- tional, technical, and process-related prerequisites for delivering customer-centric AI and ML products, so as to enable the in-house development of AI use cases and products by our Data Analytics experts. 81 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Outlook On January 1, 2023, the Group introduced a new cor- porate structure, designed to fully enable the delivery of Strategy 2030. Following the reorganization and start- ing from Q1/23, the Group will report on the following business segments: Chemicals & Materials, Fuels & Feedstock (former Refining & Marketing), and Energy (former Exploration & Production). As part of the intro- duction of the new corporate structure, Gas & Power Eastern Europe, which includes Supply, Marketing, and Trading of gas in Romania and Turkey and one gas- fired power plant in Romania, was transferred from Fuels & Feedstock to the Energy business segment. Market environment In 2023, the polyethylene sales volumes excluding JVs are projected to be around 1.8 mn t (2022: 1.69 mn t). The polypropylene sales volumes excluding JVs are expected to be around 2 mn t (2022: 1.84 mn t). Organic CAPEX related to Chemicals & Materials is predicted to be around EUR 1.1 bn in 2023 (2022: EUR 1.4 bn). Fuels & Feedstock In 2023, the OMV refining indicator margin Europe is expected to be between USD 10/bbl and USD 15/bbl (2022: USD 14.7/bbl). In 2023, OMV expects the average Brent crude oil price to be above USD 80/bbl (2022: USD 101/bbl). For 2023, the average realized gas price is anticipated to be around EUR 35/MWh (2022: EUR 54/MWh), with a THE price forecast between EUR 60/MWh and EUR 70/MWh (2022: EUR 122/MWh). In 2023, fuels and other sales volumes in OMV’s mar- kets in Europe are projected to be slightly higher than in 2022 (2022: 15.5 mn t). Commercial margins are forecast to be above those in 2022. Retail margins are forecast to be around the 2022 level. Group In 2023, organic CAPEX is projected to come in at around EUR 3.7 bn1 (2022: EUR 3.7 bn), including non- cash effective CAPEX related to leases of around EUR 0.2 bn. In 2023, the utilization rate of the European refineries is expected to be around 95% (2022: 73%). A turnaround at the Petrobrazi refinery is planned in Q2. Organic CAPEX in Fuels & Feedstock is forecast at around EUR 1.0 bn in 2023 (2022: EUR 0.8 bn). Chemicals & Materials Energy In 2023, the ethylene indicator margin Europe is ex- pected to be around EUR 530/t (2022: EUR 560/t). The propylene indicator margin Europe is expected to be around EUR 480/t (2022: EUR 534/t). In 2023, the steam cracker utilization rate in Europe is expected to be around 90% (2022: 74%). Turnarounds are planned at the Schwechat cracker in Q2 and at the Porvoo cracker in Q3. In 2023, the polyethylene indicator margin Europe is forecast to be around EUR 350/t (2022: EUR 390/t). The polypropylene indicator margin Europe is expected to be around EUR 400/t (2022: EUR 486/t). OMV expects total production to be around 360 kboe/d in 2023 (2022: 392 kboe/d) due to the exclusion of the Russian volumes and natural decline, in particular in Norway and Romania. Organic CAPEX for Energy is anticipated to come in at around EUR 1.6 bn in 2023 (2022: EUR 1.4 bn). Exploration and Appraisal (E&A) expenditure is ex- pected to be between EUR 200 mn and EUR 250 mn (2022: EUR 202 mn). 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. 82 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Risk Management As an international oil, gas, and chemicals company with operations extending from hydrocarbon exploration and production through to the trading and marketing of mineral oil products, chemical products, and natural gas, 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 the 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. A cross-functional committee chaired by the OMV Group CFO with senior management members of the OMV Group – the Risk Committee – ensures that the EWRM process effectively captures and manages ma- terial risks across the OMV Group. 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 the OMV Group to facilitate effective risk communica- tion, whereby ESG risks play a key role in the OMV risk taxonomy. Twice a year, the results of this process are consolidated and presented to the Executive Board and the Audit Committee of the Supervisory Board. In com- pliance with the Austrian Code of Corporate Govern- ance, the effectiveness of the EWRM system is evalu- ated by an 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 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. Enterprise-Wide Risk Management Financial and non-financial risks are regularly identified, assessed, and reported through the Group’s Enter- prise-Wide Risk Management (EWRM) process. The main purpose of the 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. The OMV Group is constantly enhancing the EWRM process based on internal and external re- quirements, for instance developing ESG (Environmen- tal, Social, and Governance) reporting standards and frameworks. 83 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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 chemicals company, OMV has a significant exposure to oil, natural gas, and chemicals prices. Substantial FX exposure includes the USD, RON, NOK, NZD, and SEK. The Group has an economic net USD long position, mainly resulting from oil production sales. The comparatively less significant exposure in RON, NOK, NZD, and SEK, originating 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 the OMV Group’s cash flow and liquidity are reviewed quarterly by the Risk Committee, which is chaired by the CFO and com- prises the senior management of the business seg- ments 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 Explo- ration & Production segment. In the Refining & Marketing and Chemicals & Materials businesses, OMV is especially exposed to volatile refin- ing and chemicals margins and natural gas prices, as well as inventory risks. Corresponding optimization and hedging activities are undertaken in order to mitigate those risks. They include margin hedges as well as stock hedges. An optimization, trading, and hedging risk control governance system defines clear mandates including risk thresholds for such activities. In addition, Emission Compliance Management ensures a bal- anced position 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 expenses from floating rate deposits and borrow- ings. 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. In light of a challenging geopolitical and economic environment with high inflation, volatile commodity prices, rising in- terest rates, and distorted supply chains, special atten- tion is paid to early warning signals like changes in pay- ment 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 in ac- cordance with the Group’s defined risk management process. Control and mitigation of assessed risks take place at all organizational levels using clearly defined risk policies and responsibilities. The key Group risks are governed centrally to ensure the Group’s ability to meet planning objectives through corporate directives, including those relating to health, safety, security, envi- ronment, legal matters, compliance, human resources, and sustainability. The process safety incident at the Schwechat refinery that occurred on June 3, 2022, has led to a delayed start-up of the refinery after the regular maintenance turnaround. Immediately after the incident, a broad- based on-site task force was set up with the remit of in- vestigating the incident and at the same time working on restoring operations. At the end of September, the legally required water pressure test on the main column of the crude distillation unit was successfully com- pleted. After the precisely prepared commissioning pro- cess, the OMV Schwechat refinery was fully restarted in mid-October. For the duration of the repairs, OMV had successfully established an alternative supply sys- tem to ensure continuous supply to its customers. 84 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Project risks In implementing its Strategy 2030, OMV will invest in both organic and inorganic growth projects following a mature project risk management process, identifying, analyzing, and monitoring project risks on a regular ba- sis. OMV has vast experience in managing major capi- tal projects and mitigating project risks. OMV may experience operational, political, technologi- cal, or other risks beyond its control, both of its own and of its contractual partners, which may delay or hin- der the progress of its projects. By way of example, the execution of major onshore and offshore projects in Romania, Norway, or the UAE may be affected by changes to the respective regulatory or fiscal frameworks, by the unavailability of contractors, or the lack of qualified staff. Project costs may be nega- tively impacted by price inflation, labor shortages, or the disruption or reorganization of supply chains. Pro- jects, in particular in recycling and sustainable fuels and feedstocks, may be affected by insufficient availa- bility of required feedstock supply, by the inability to commercially scale up new technologies, or by the lack of regulatory clarity. In new business areas in particu- lar, OMV may more often invest through partnerships and joint ventures, which may expose the Company to increased governance and credit risks and may nega- tively impact project execution. The effect of any of these risks may have a material adverse impact on OMV’s business, results of operations, and financial condition. ESG risk OMV places special emphasis on five Sustainability fo- cus areas: Climate Change; Natural Resources Man- agement; People; Ethical Business Practices; and Health, Safety, and Security. OMV Executive Board members regularly (at least quarterly) discuss current and upcoming environmental, climate, and energy-related policies and regulations, re- lated developments in the fuels, chemicals, and natural gas markets, the financial implications of carbon emis- sions trading obligations, the status of innovation pro- ject implementation, and progress on achieving sus- tainability-related targets. OMV focuses on assessing the potential vulnerabilities of the Company to climate change (e.g., water deficiency, droughts, floods, land- slides), the impact of the Company on the environment, and the mitigation actions that will ensure a successful transition to a low-carbon environment (e.g., carbon emission reductions, compliance with new regulatory requirements). The short- and mid-term physical vulner- abilities related to climate change are identified and re- ported in the EWRM process; they do not exceed OMV’s reporting threshold. Additionally, OMV has per- formed a robust climate and vulnerability assessment for most of its main assets to identify its resilience to physical risks related to climate change using the Inter- governmental Panel on Climate Change (IPCC) sce- narios corresponding to the time horizon suggested by the EU taxonomy. OMV’s operations impact our employees and the com- munities where we operate. As a signatory to the United Nations Global Compact, OMV follows the Hu- man Rights Due Diligence Process, including the as- sessment of the human rights risk associated with our current and future business activities, and taking risk management actions. This ongoing process makes use of external resources and expertise, and includes exter- nal stakeholders, in particular impacted groups. In July 2022, upon becoming aware that the authorities were conducting an investigation into alleged human trafficking practices by a (sub)contractor at the propane dehydrogenation plant construction site in Kallo (Bel- gium), Borealis immediately offered support and pro- vided all requested information to the authorities, in full transparency. Borealis immediately suspended and later terminated all contracts with the respective (sub)contractor. Borealis has zero tolerance for any malpractice and puts stringent measures in place to mitigate related risks. After careful consideration, Bore- alis granted the majority of the works to a different con- tractor and implemented thorough social controls at the Kallo construction site. Work on the construction site gradually increased from October 2022. The prolonged standstill and gradual restart of the project might affect the project timeline. 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. 85 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Strategic risks In order to identify strategic risks that might have poten- tially long-term effects on the Company’s objectives, OMV continuously monitors its internal and external en- vironment. Geopolitical and regulatory risks OMV thoroughly monitors geopolitical developments, in particular the ongoing Russian war on Ukraine and any additional sanctions and countersanctions resulting from it. The Company regularly reviews the impact of potential further escalations on its business activities. Continued and/or intensified disruptions in Russian commodity flows to Europe could result in further in- creases in European energy prices. Sanctions on Rus- sia and countersanctions issued by Russia could lead to further disruptions in global supply chains and short- ages of products related to energy, raw materials, agri- culture, and metals, and consequently lead to further increases in operational costs. OMV experienced ongoing curtailments of natural gas delivery volumes purchased by OMV under long-term supply agreements with Gazprom in Germany and Aus- tria. This required replacement purchases on the mar- ket as well as adjustments to OMV’s hedging ratios, re- sulting in a negative financial impact for OMV. The un- certainty regarding future curtailments and delivery vol- umes remains and could result in further substantial losses, especially if actual deliveries materially deviate from previously hedged volumes, thus leading to par- tially unmitigated gas price exposure from Gazprom supply contracts. In the event of further, or even full, natural gas supply disruptions from Russia, OMV can use gas in storage to supply customers and has access to other liquid gas market hubs in Europe. Additionally, OMV managed to secure 40 TWh of additional transport capacities to Austria for the current gas year (October 1, 2022–Sep- tember 30, 2023) at Oberkappel (pipeline from Ger- many) and Arnoldstein (pipeline from Italy) transfer points. OMV continues to closely monitor developments and regularly evaluates the potential impact on the Group’s cash flow and liquidity position. High volatility in natural gas prices can potentially lead to peak liquidity demands to satisfy margin calls for ex- change trading activities at short notice. OMV has un- used committed and uncommitted credit facilities to meet such short-term requirements if needed. OMV is responding to the situation with targeted measures to safeguard the Company’s economic stability as well as the secure supply of energy. 86 As a direct consequence of the energy crisis in Europe, regulatory measures like price caps, subsidy schemes, and the EU solidarity contribution are being imple- mented in some of the countries OMV is active in. New regulatory and fiscal interventions may also impact the financial position of the OMV Group. The Council Reg- ulation (EU) 2022/1854 introduced a solidarity contribu- tion, which was transposed into the local legislation of the Member States by the end of 2022 and applies to 2022 and/or 2023. It represents a contribution of sur- plus profits of companies operating in the crude petro- leum, natural gas, coal, and refinery sectors. It is calcu- lated based on the taxable profits of those companies, as determined under national tax rules, that are more than 20% higher than the average taxable profits gen- erated in the period 2018 to 2021. Based on the legisla- tion in Austria, it is expected that two Austrian entities of the OMV Group will be subject to the solidarity con- tribution (Energy Crisis Contribution) for the second half of 2022. Romania transposed this regulation via GEO 186/2022, approved and published in December 2022. This Government Emergency Ordinance (GEO) will subsequently follow the parliamentary approval pro- cess, so it may be subject to change. Based on OMV Petrom’s 2022 accounts and the provisions of this Emergency Ordinance, OMV Petrom is not subject to the EU solidarity contribution for the fiscal year 2022, having less than 75% of its turnover in the defined ar- eas: extraction of crude, extraction of natural gas, ex- traction of coal, and refining business. No solidarity contribution is expected for OMV Group entities in Ger- many for the year 2022 either. In addition to the above-mentioned geopolitical ten- sions, OMV’s operations are exposed to further geopo- litical risks such as the expropriation and nationalization of property, restrictions on foreign ownership, civil strife and acts of war or terrorism, and political uncertainties, in particular related to Libya, Yemen, and Tunisia, as well as other countries where OMV operates and has fi- nancial investments. However, OMV has extensive ex- perience in dealing with the political environment in emerging economies. Also, possible regulatory changes may lead to disruptions or limitations in pro- duction or an increased tax burden. OMV continuously observes political and regulatory developments in all markets that affect OMV’s operations. Country-specific risks are assessed before entering new countries. Personnel risks Through systematic employee succession and develop- ment planning, Corporate Human Resources targets suitable managerial employees to meet future growth requirements and mitigate personnel risks. 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. For further details on project-related risks and their man- agement, see the OMV EMTN Prospectus dated June 17, 2022. OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Macroeconomic risks The COVID-19 pandemic continues to have a consider- able impact on global economic development, in partic- ular driven by changes in China’s zero COVID-19 pol- icy and the emergence of new variants. In addition, ge- opolitical developments, disruptions in supply chains, high price inflation, and the impact of rising interest rates could lead to a significant deterioration in eco- nomic growth. Climate change-related risks OMV consistently evaluates the Group’s exposure to risks related to climate change, in addition to the mar- ket price risk from European Emission Allowances. Such risks comprise the potential impact of acute or chronic events like more frequent extreme weather events, 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, and therefore integrates the related risks and opportu- nities into the development of the Company’s business strategy. Measures implemented to manage or mitigate such risks are set out in the relevant sections of this re- port, particularly in Sustainability and Strategy. Business transformation risks OMV’s transformation into a leading provider of sus- tainable fuels, chemicals, and materials, as well as sus- tainable energy solutions, is influenced by a variety of uncertainties. Such risks comprise the availability of skilled employees, technology and scale-up risks, avail- ability of sustainable feedstock in sufficient quality and quantity, and governance risks related to joint ventures and partnerships. 87 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Other Information Information required by section 243a of the Unternehmensgesetzbuch (Austrian Commercial Code) 1. 2. 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.1 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 of the Austrian Stock Cor- poration Act. The issue price and the conditions of issuance can be determined by the Executive Board with the consent of the Supervisory Board. The Annual General Meeting also authorized the Executive Board, subject to the approval of the Supervisory Board, to exclude the subscription right of the shareholders if the capital increase serves to 3. ÖBAG holds 31.5% and MPPH holds 24.9% of (i) adjust fractional amounts or 4. 5. 6. the capital stock. 1 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 Para- graph 1 of the Arbeitsverfassungsgesetz (Aus- trian Labor Constitution Act). Resolutions con- cerning the dismissal of members of the Supervi- sory Board pursuant to section 87 Paragraph 8 of the Aktiengesetz (Austrian Stock Corporation Act) require a simple majority of the votes cast. To ap- prove capital increases pursuant to section 149 of the Austrian Stock Corporation Act and altera- tions of the Articles of Association (except those concerning the Company’s objects), simple major- ities of the votes and capital represented in adopt- ing the resolution are sufficient. 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 (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 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 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 of the Austrian Commercial Code) or by third parties for the account of the Company. 1 On December 21, 2022, Abu Dhabi National Oil Company has announced its plan to take over the 24.9% stake in OMV Aktiengesellschaft from Mubadala In- vestment Company, subject to regulatory approvals. 88 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 8. As of December 31, 2022, OMV has outstanding perpetual hybrid notes in the nominal 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 Novem- ber 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 in- terest 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) un- til, but excluding, September 1, 2030, the hybrid notes of tranche 1 will bear interest per annum at a reset interest rate which is determined accord- ing 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) un- til, but excluding, September 1, 2030, the hybrid notes of tranche 2 will bear interest per annum at a reset interest rate which is determined accord- ing 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 General Meeting of OMV resolves upon a divi- dend payment on OMV shares. The hybrid notes outstanding as of December 31, 2022, 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 89 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 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 Paragraph 6 of the Austrian Commercial Code, a separate con- solidated non-financial report will be issued. Subsequent events Please refer to Note 37 in the Consolidated Financial Statements. 90 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT Vienna, March 9, 2023 The Executive Board Alfred Stern m.p. Chairman of the Executive Board and Chief Executive Officer Reinhard Florey m.p. Chief Financial Officer Martijn van Koten m.p. Executive Vice President Fuels & Feedstock Daniela Vlad m.p. Executive Vice President Chemicals & Materials Berislav Gaso m.p. Executive Vice President Energy 91 OMV ANNUAL REPORT 2022 / DIRECTORS’ REPORT 92 CONSOLIDATED CORPORATE GOVERNANCE REPORT 93 — 104 OMV ANNUAL REPORT 2022 / 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 evaluated externally by independent advisors for the 2022 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 so-called “comply or explain” rules (the “C-rules”) and all recommended rules (the “R-rules”). In the case of C-rules 27 and 28, explanations concerning the structure of the remuneration of the Executive Board and the Supervisory Board of OMV are given in the Remuneration Policy. The implementation of the policy and the performance outcomes of the financial year under review are set out in the Remuneration Report for OMV’s Executive Board and Supervisory Board, which has been prepared annually since the 2020 financial year. The Remuneration Policy and the Remuneration Report are published on www.omv.com. The next external evaluation of the compliance with the ACCG is scheduled to be carried out for the 2024 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 Board 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 business segment 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 Chemicals & Materials business segment. 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 Materials Science and a Master’s in Polymer Engineer- ing and Science, both from Montanuniversität in Leo- ben (Austria). Member of the Board of the European Chemical Indus- try Council (Cefic), Brussels Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S. A. President of the Supervisory Board Borealis AG Chairman of the Supervisory Board OMV Downstream GmbH Managing Director (until January 31, 2023) 94 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Johann Pleininger, *1962 Date of initial appointment: September 1, 2015 Johann Pleininger resigned from his positions as Dep- uty Chairman of the Executive Board, Deputy Chief Ex- ecutive Officer, and Executive Board member for the Exploration & Production business segment as of De- cember 31, 2022. Johann Pleininger started his professional career at OMV in 1977 and later studied mechanical and indus- trial engineering. During his time at OMV, he held vari- ous 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. Functions in major subsidiaries of the OMV Group Company Function OMV Petrom S. A. Member of the Supervisory Board (until December 31, 2022) OJSC Severneftegazprom Member of the Board of Directors 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 and strategy consulting. From 2002 to 2012, he worked in various positions worldwide for ThyssenKrupp 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 OMV Petrom S. A. OMV Petrom Global Solutions SRL Borealis AG Function Member of the Supervisory Board (since November 1, 2022) President of the Supervision Body Member of the Supervisory Board SapuraOMV Upstream Sdn. Bhd. OMV Exploration & Production GmbH OMV Austria Exploration & Production GmbH (until December 31, 2022) Deputy Chairman of the Board of Directors (until December 31, 2022) Managing Director (until December 31, 2022) Chairman of the Supervisory Board (until December 31, 2022) 95 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Elena Skvortsova, *1970 Date of initial appointment: June 15, 2020 Elena Skvortsova resigned from her position as Executive Board member for the Marketing & Trading business segment as of October 31, 2022. 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 OMV Petrom S. A. Function Member of the Supervisory Board (until October 31, 2022) OMV Downstream GmbH Managing Director (until October 31, 2022) 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 business segment As of November 1, he also took over the Marketing & Trading business segment. 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. Martijn van Koten joined Borealis in 2013 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. Member of the Supervisory Board Member of the Supervisory Board Borealis AG OMV Downstream GmbH Managing Director Managing Director OMV Gas Logistics Hold- (until March 31, 2022) ing GmbH 96 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Events after the balance sheet date A new corporate structure came into force on January 1, 2023, designed to fully enable the delivery of the Strategy 2030. The new organization is built on five dis- tinct areas. In addition to the CEO and CFO areas, three business segments have been established: Chemicals & Materials, Fuels & Feedstock, and En- ergy. 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. Alfred Stern was in charge of the Chemicals & Materi- als segment until January 31, 2023. On February 1, 2023, Daniela Vlad joined the Executive Board and took over responsibility for the Chemicals & Materials segment. Since January 1, 2023, Martijn van Koten has been head of the newly created Fuels & Feedstock business segment, which will consolidate the Refining and Mar- keting & Trading business units. Reinhard Florey headed the Energy segment on an in- terim basis from January 1, 2023, to February 28, 2023. On March 1, 2023, Berislav Gaso became Exec- utive Board member with responsibility for the Energy business segment. 97 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Supervisory Board OMV’s Supervisory Board consists of ten members elected by the Annual General Meeting (shareholders’ representatives) and five members delegated by the Group’s Works Council. Two of the current sharehold- ers’ representatives were elected at the 2019 Annual General Meeting (AGM), one at the 2020 AGM, one at the 2021 AGM, and six at the 2022 AGM. The mem- bers of OMV’s Supervisory Board in 2022 and their ap- pointments 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 until June 30, 2022) Seats: Umicore, Orica (since January 15, 2023) Christine Catasta, *1958 Deputy Chairwoman (until June 3, 2022) (Chief Executive Officer, Österreichische Beteiligungs AG until January 31, 2022) Seats: VERBUND AG, Telekom Austria AG, Erste Group Bank AG Edith Hlawati, *1957 Deputy Chairwoman (since June 3, 2022) (Chief Executive Officer, Österreichische Beteiligungs AG since February 1, 2022) Seats: VERBUND AG, Telekom Austria AG, Post AG Saeed Al Mazrouei, *1980 Deputy Chairman (Deputy Chief Executive Officer, Direct Investments, Mubadala Investment Company) Seats: Abu Dhabi Commercial Bank (ADCB) Karl Rose, *1961 (Strategy Advisor, Abu Dhabi National Oil Company un- til July 1, 2022) No seats in domestic or foreign listed companies Elisabeth Stadler, *1961 (Chief Executive Officer, VIENNA INSURANCE GROUP AG – Wiener Versicherung Gruppe) Seats: voestalpine AG Robert Stajic, *1979 (since June 3, 2022) (Executive Director, Österreichische Beteiligungs AG) Seats: VERBUND AG Christoph Swarovski, *1970 (until June 3, 2022) No seats in domestic or foreign listed companies Cathrine Trattner, *1976 (until June 3, 2022) 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 Aktiengesellschaft Delegated by the Group’s Works Council (employee representatives) Alexander Auer, *1969 Hubert Bunderla, *1965 Mario Mayrwöger, *1976 (since June 7, 2022) Nicole Schachenhofer, *1976 Angela Schorna, *1980 Gerhard Singer, *1960 (until June 7, 2022) Alyazia Ali Al Kuwaiti, *1979 (Executive Director Energy, Mubadala Investment Company) No seats in domestic or foreign listed companies More detailed information about all members of OMV’s Supervisory Board, including their professional careers, can be downloaded from OMV’s website at www.omv.com > About us > Supervisory Board. Stefan Doboczky, *1967 (Chief Executive Officer, Heubach Group since January 10, 2022) No seats in domestic or foreign listed companies Jean-Baptiste Renard, *1961 (since June 3, 2022) Seats: Neste Oyj (until March 30, 2022) 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 six women and four non-Austrian na- tionals (as per December 31, 2022). The members of the Supervisory Board are aged between 42 and 70. 98 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT 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 Annual 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 Annual General Meeting have declared their independence from the Company and its Executive Board during the 2022 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 Garrett, Stefan Doboczky, Jean-Baptiste Renard, Karl Rose, Elisabeth Stadler, Christoph Swarovski, Cathrine Trattner, and Gertrude Tumpel-Gugerell have made declarations to the effect that they were not sharehold- ers with a stake of more than 10% or represented such shareholders’ interests during the 2022 financial year and up to the time of making such declarations. Fur- thermore, the above-mentioned members of the Super- visory Board were nominated for election as Supervi- sory Board members by Österreichische Beteiligungs AG, which must comply with the strict independence and incompatibility criteria of the Austrian Code of Cor- porate Governance when nominating or appointing per- sons as members of the supervisory boards of its affili- ated companies, and ensure that they exercise their ac- tivities on the supervisory boards of the affiliated com- panies independently of their own interests or those of legal entities closely associated with them. 99 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Positions and committee memberships in 20221 Name Mark Garrett Edith Hlawati Christine Catasta Saeed Al Mazrouei Alyazia Ali Al Kuwaiti Stefan Doboczky Jean-Baptiste Renard Karl Rose Elisabeth Stadler Robert Stajic Christoph Swarovski Cathrine Trattner Gertrude Tumpel-Gugerell Alexander Auer Hubert Bunderla Mario Mayrwöger Nicole Schachenhofer Angela Schorna Gerhard Singer Supervisory Board and committees 20221 Term of office SB PNC PPC M2 - M DC M M4 C M5 - DC - - - M M - M - - C DC DC DC M - - - - - - - - M7 M - M10 - - C DC DC DC M M M M M M M M M M M M M M M AC M - M - DC M3 - - DC M - M C M8 M - - M M RC V3 DC C DC - - - - M3 - M - M - - - - - - STC - September 29, 2020, to 2023 AGM - June 3, 2022, to 2026 AGM DC September 10, 2021 to 2022 AGM - June 2, 2021, to 2024 AGM M May 22, 2018, to 2024 AGM C May 14, 2019, to 2025 AGM DC June 3, 2022, to 2025 AGM - May 18, 2016, to 2024 AGM DC6 May 14, 2019, to 2025 AGM M June 3, 2022, to 2025 AGM - May 14, 2019, to 2022 AGM - May 14, 2019, to 2022 AGM - May 19, 2015, to 2024 AGM M9 Since September 1, 2021 - Since January 18, 2021 M Since June 7, 2022 M Since January 18, 2021 M8 Since March 23, 2018 - September 26, 2016 to June 7, 2022 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 Until October 27, 2022 3 Since June 3, 2022 4 Since October 27, 2022 5 Chairman until June 3, 2022 6 Member until June 3, 2022 7 Since December 13, 2022 8 Since June 7, 2022 9 Until June 7, 2022 10 Until December 13, 2022 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 2022). In 2022, 8 meetings of the Supervisory Board and 28 committee meetings were held. In particular, the Executive Board and the Supervisory Board discussed OMV’s strategy. Christoph Swarovski attended fewer than half of the meetings of the Supervisory Board. Saeed Al Mazrouei attended fewer than half of the meetings of the commit- tees he has been elected to. 100 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT Attendance of Supervisory Board and committee meet- ings in 2022 was as follows: Attendance of Supervisory Board and committee meetings in 20221 Audit Committee This committee performs the duties established by sec- tion 92 (4a) of the Austrian Stock Corporation Act. The committee held seven meetings during the year. It pre- dominantly 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, the presentation of the annual financial statements as well as the procedure for the selection of the statutory auditor (Group auditor). Ger- trude Tumpel-Gugerell is the financial expert on the Au- dit Committee within the meaning of section 92 (4a) (1) of the Austrian Stock Corporation Act. PNC 5/5 3/3 2/2 2/5 5/5 RC 7/7 3/3 4/4 1/7 PPC AC 4/46 7/7 3/3 7/7 2/2 1/5 5/5 1/17 3/42 3/3 5/5 STC 1/2 4/4 4/4 1/2 5/7 4/4 2/32 2/4 2/2 3/3 0/4 3/3 6/7 7/7 3/44 7/7 7/7 3/33 2/25 2/2 4/4 2/24 5/5 5/5 5/5 5/5 5/5 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 2022, the auditors Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H. (including their network within the meaning of section 271b of the Aus- trian Commercial Code) received EUR 3.47 mn for the annual audit, EUR 0.60 mn for other assurance ser- vices, EUR 0.19 mn for tax advisory services, and EUR 0.40 mn for other engagements. SB Name 8/8 Mark Garrett Edith Hlawati2 3/3 Christine Catasta3 5/5 6/8 Saeed Al Mazrouei 8/8 Alyazia Ali Al Kuwaiti 7/8 Stefan Doboczky Jean-Baptiste Renard2 3/3 8/8 Karl Rose 8/8 Elisabeth Stadler Robert Stajic2 3/3 Christoph Swarovski3 2/5 Cathrine Trattner3 5/5 Gertrude Tumpel- Gugerell 6/8 8/8 Alexander Auer 8/8 Hubert Bunderla Mario Mayrwöger4 3/3 Nicole Schachenhofer 8/8 8/8 Angela Schorna Gerhard Singer5 5/5 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 2 Since June 3, 2022 3 Until June 3, 2022 4 Since June 7, 2022 5 Until June 7, 2022 6 Until October 27, 2022 7 Since October 27, 2022 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- ing practices (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 for appointments to the Supervisory Board. There were five meetings of the Presidential and Nomination Committee in 2022, in which discussions focused on Executive and Supervi- sory Board matters. 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 2022, five 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, as well as ESG-related standards, perfor- mance, and processes. It also focuses on performance specifically in terms of HSSE (Health, Safety, Security, and Environment) and in particular regarding climate change. Furthermore, the committee serves to support and oversee the transformation process toward a more sustainable business model, including the cultural inte- gration of strategically significant acquisitions. The committee held four meetings during the year. 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 is empowered to conclude, amend, and terminate Ex- ecutive Board members’ employment contracts and to 101 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT make decisions on the awarding of bonuses (variable remuneration components) and other such benefits to them. The Remuneration Committee met seven times during 2022. Executive Board members were invited to attend parts of some of the meetings of the Remunera- tion Committee. The hkp/// group was hired by the Remuneration Com- mittee to provide remuneration advice to the committee on the appropriate structure and level of Executive Board compensation in line with regulatory require- ments and market practice. Based on the results of a benchmarking study carried out by the hkp/// group, the remuneration of OMV’s Su- pervisory Board was adjusted in 2022. The hkp/// group also provided advice on the creation of OMV’s Remuneration Report. The consulting com- pany did not advise the OMV Executive Board on mat- ters relating to Executive Board remuneration, ensuring independence with respect to the Austrian Code of Cor- porate 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) of the Austrian Stock Corporation Act. Attention is drawn to the fact that the Supervisory Board members Mark Garrett and Elisa- beth Stadler are, or were in the reporting year, chair- persons 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, the appropriate Supervisory Board approvals have been obtained. The Internal Rules of the Supervisory Board contain detailed procedures for handling conflicts of in- terest on the part of Supervisory Board members. Employee participation 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 Annual General Meeting). Therefore, out of the 15 Supervisory Board members, 5 members are employee 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. Diversity, Equity, and Inclusion 2022 Diversity is an enormous strength that OMV actively leverages to create business value. OMV strongly believes that culturally diverse teams are more creative, resourceful, and knowledgeable, and that they generate broader perspectives, ideas, and options. Diversity, Equity, and Inclusion (DEI), therefore, have a strong impact on people and teams, improving engagement and job satisfaction, and directly contributing to the Group’s profitability and sustainability. The OMV Group is therefore expanding its DEI focus to include a broader range of diversity aspects, such as age, nationality, and special needs. Ultimately, the goal of OMV is to encourage and support all forms of diversity in the workforce and create an environment of respect where all employees are valued. This means having an inclusive culture in which the same opportunities and level of psychological safety are in place for all people to feel supported and be 102 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT successful, regardless of their nationality, gender, age, or social and health background. As a company active in an industry with a strong technical focus, it is particularly challenging for OMV to achieve a satisfactory gender balance in all fields of business activity. OMV is committed to supporting women’s advancement to managerial positions. The aim is to increase the proportion of women in management roles from 21.6%1 currently to 25% by 2025, and to 30% by 2030, through a number of initiatives such as mentoring, succession planning, specific training, and those that promote a healthy work-life balance. OMV further strengthened its training programs, such as SHEnergy, a blended learning program for women at OMV, to promote women’s leadership skills. This pro- gram focuses on active inclusion skills and also empha- sizes the power of mentoring and networking in devel- oping female leaders. The New Parent Program started in Austria, focusing on equipping future parents with information on paren- tal leave and part-time models, associated long-term fi- nancial aspects, and things to consider when returning to work. The program’s target group includes both male and female employees to encourage more equal distri- bution of childcare responsibilities. The proportion of women in the Group as a whole is 27% (2021: 27%). A total of 21.6%1 (2021: 20.9%) of employees in management and executive positions are female. In OMV’s leadership development programs, the proportion of women was 49% in 2022 (2021: 49%). In OMV’s Upstream integrated graduate devel- opment program for technical skill pools, the proportion of women was 21% in 2022 (2021: 31%). Diversity has been incorporated into all leadership development pro- grams and embedded into the OMV People & Culture Strategy. In 2022, a DEI Governance team was formed with rep- resentatives from OMV, OMV Petrom, and Borealis, and the new Group-wide Diversity, Equity, and Inclu- sion Strategy 2030 was launched. Group-wide work streams have been set up to give the actions of OMV in the areas of gender, generations, people with special needs, caregivers, and LGBTQI+ more momentum and visibility. OMV has also developed a Group-wide People & Cul- ture Ethics Guideline, which gives more details on our clear position regarding non-discrimination in the work- place. In accordance with this guideline, OMV aims to put in place Group-wide complaints procedures and in- vestigation principles for any misconduct in this regard. Throughout 2022, several events were organized to in- crease awareness of and ambition to focus on our DEI goals. In March, OMV hosted an International Women’s Day and in October, the DEI Awareness Month fea- tured several panel discussions and keynote speeches from the Executive Board and external experts. 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. OMV’s headquarters in Vienna has two company kin- dergartens attended by children of OMV employees. The Executive Board and Supervisory Board consider the described measures and programs for fostering the diversity of the workforce as a key factor in strengthen- ing 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 the balance of gender, age, and international experience, in addition to professional skills. Until the resignation of Elena Skvortsova on October 31, 2022, there was one woman on the Executive Board of OMV.2 At this point in time, the Executive Board members of OMV Aktiengesellschaft were be- tween 52 and 60 years old, came from three different countries, and had acquired extensive international management experience. With regard to the election of Supervisory Board mem- bers, the selection of potential candidates is based on various criteria, particularly the candidates’ professional skills, personal integrity, independence, and impartial- 1 Advanced & Executive Level 2 Following the resignation of Elena Skvortsova, the OMV Executive Board has once again included a woman, Daniela Vlad, since February 1, 2023. Currently, the Executive Board members of OMV Aktiengesellschaft are between 48 and 58 years old and are from four different nationalities (see also "Events after the balance sheet date"). 103 OMV ANNUAL REPORT 2022 / CONSOLIDATED CORPORATE GOVERNANCE REPORT ity. In addition, diversity aspects such as the represen- tation of both genders, a balanced age distribution, in- dustry and technical expertise, and internationality of members is taken into consideration. On December 31, 2022, the Supervisory Board of OMV included six women, corresponding to a share of 40%. In line with the strategic orientation of the Company, particular focus will be given to further strengthening in- dustry-specific expertise and the internationality of the Supervisory Board. With members aged between 42 and 70, the Supervisory Board’s age structure is bal- anced. External evaluation of Corporate Govern- ance An external evaluation of OMV’s compliance with the provisions of the ACCG is performed biennially. For the 2022 financial year, OMV engaged Deloitte Legal (Jank Weiler Operenyi Rechtsanwälte GmbH, attorney Jo- hannes Lutterotti). The official questionnaire of the Aus- trian 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, 2023 The Executive Board Alfred Stern m.p. Reinhard Florey m.p. Martijn van Koten m.p. Daniela Vlad m.p. Berislav Gaso m.p. 104 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 105 — 238 106 — Auditor’s Report 116 — Consolidated Income Statement for 2022 117 — Consolidated Statement of Comprehensive Income for 2022 118 — Consolidated Statement of Financial Position as of December 31, 2022 120 — Consolidated Statement of Changes in Equity for 2022 122 — Consolidated Statement of Cash Flows for 2022 Notes to the Consolidated Financial Statements 123 — Basis of Preparation and Accounting Policies 141 — Segment Reporting 146 — Notes to the Income Statement 156 — Notes to the Statement of Financial Position 193 — Supplementary Information on the Financial Position 212 — Other Information 229 — Oil and Gas Reserve Estimation and Disclosures (unaudited) 238 — 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. Deconsolidation and valuation of investments in 2. Russia The impact of climate change and the energy transition on the financial statements 3. Recoverability of equity-accounted investments 4. Recoverability of intangible exploration and evalu- 5. 6. ation (E&E) assets Estimation of oil and gas reserves Valuation of provision for decommissioning and restoration obligations OMV ANNUAL REPORT 2022 / 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, 2022, 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, 2022 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. 106 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter Deconsolidation and valuation investments in Russia We assessed management’s assumptions and esti- mates. The attack of Russia on Ukraine and countersanctions announced by Russia have significant impact on assets related to OMV’s prior core region Russia. OMV is represented in Russia by an interest in the Yu- zhno-Russkoye gas field. The gas is produced by the operator and the license holder, OJSC Severneftegaz- prom (SNGP), in which OMV holds 24.99% interest. The interest in SNGP was accounted for at equity until February 28, 2022. The gas is sold through the trading company JSC GAZPROM YRGM Development (YRGM), in which OMV holds one preferred share enti- tling OMV to a dividend of 99.99% of the total net profit. Up to February 28, 2022, YRGM was fully consolidated because all its activities were predetermined and OMV was fully exposed to the variability of returns. Due to the Russian countersanctions, which have an impact on the operation of foreign companies in Russia, OMV lost power to receive dividends from YRGM which led to the loss of control over YRGM and the loss of signifi- cant influence over SNGP. OMV has ceased to fully consolidate YRGM and to eq- uity account for SNGP in the consolidated financial statements. Starting March 1, 2022, the investments in SNGP and YRGM are accounted for at fair value through profit or loss according to IFRS 9. This change led to a loss of EUR 658 mn. As of December 31, 2022, the fair value of the invest- ments in YRGM and SNGP was further decreased to a book value of EUR 23 mn, leading to an additional loss of EUR 370 mn. The remaining fair value of both investments has been estimated using a DCF model considering the produc- tion profile, expected gas prices and production costs, as well as an illiquidity discount. The financial asset which is related to the reserves re- determination right out of the acquisition of the interest in the Yuzhno-Russkoye field in 2017 was fully written off with a fair value loss of EUR 432 mn. The principal risk relates to management’s assumption of losing control over YRGM and significant influence over SNGP, the recoverability of the remaining fair value of these two financial instruments as well as the valuation of the reserves redetermination right. OMV Group’s disclosures about the impact of Russia’s invasion of Ukraine and the related significant assump- tions and estimates are included in Note 2 (Accounting policies, judgements and estimates). Specifically, our work included, but was not limited to, the following procedures: ▸ Assess the criteria applied by OMV in determining the loss of control resp. significant influence over YRGM and SNGP; ▸ Inquire OMV’s executive board, legal department ▸ Assess the design and implementation of controls and gas trading management; related to estimating the key assumptions used in the calculation of the fair value of the investments and financial asset, such as estimated reserves and production profile, future gas prices and production costs; ▸ Evaluate OMV’s assessment of production profile, future gas prices and production costs, as well as the illiquidity discount used for the fair value calcu- lation with external data where available; ▸ Assess OMV’s gas reserves assumptions which led to a financial asset related to the reserves redeter- mination right and assess the subsequent write off; analysis of discount rates and inflation rates; ▸ Involve our valuation specialists to assist us in the ▸ Test the mathematical accuracy of fair value calcu- ▸ Reading of information in the director’s report (strat- lation; egy and OMV Group Business Year) and consider its consistency with the assumptions used by man- agement; and ▸ Assess the adequacy of the disclosures in the fi- nancial statements. 107 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter 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. 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 development) 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 and net zero emissions scenario analysis in Note 2 (Ac- counting policies, judgements and estimates). 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 mid-term 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 considers that OECD countries will achieve the net zero emissions goal between 2050 and 2070 (equivalent to a path between the International Energy Agency (IEA) “net zero emissions” (NZE) and “sustainable development” (SDS) scenarios) and non- OECD countries will implement all announced decar- bonization pledges in full and on time (equivalent to the IEA “announced pledges scenario” (APS)). As part of the sensitivity analysis over the recoverability of assets and valuation of decommissioning provisions, OMV performed a stress test analysis, using a decar- bonization scenario which is built on a path between the IEA SDS and IEA NZE scenarios. An additional sensitivity has been performed for as- sessing the recoverability of the oil and gas assets in the E&P segment using the Net Zero Emissions by 2050 scenario which was modeled by the IEA and shows a pathway for the global energy sector to achieve net zero CO2 emissions by 2050. 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). 108 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter Recoverability of equity-accounted investments As of December 31, 2022, the carrying value of equity- accounted investments amounted to EUR 7,294 mn (after a write-up of EUR 67 mn for Abu Dhabi Oil Refin- ing Company). We assessed management’s assessment of the recov- erability of the carrying value of equity-accounted in- vestments by evaluating if and how management deter- mines a need of impairment or reversing a previous im- pairment. Where testing the recoverable amount was required, we evaluated management’s assumptions. 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 or there is an indication that an impairment loss recognised in prior periods may no longer exist or may have decreased and in measuring any such impairment or reversal. For the equity-accounted investment Abu Dhabi Oil Re- fining Company, registered in Abu Dhabi, indicators were identified that the impairment of EUR 669 mn rec- ognized in the previous year decreased. The test of the recoverable amount performed by the management led to a reversal of previous impairment at the amount of EUR 67 mn. 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). Specifically, our work included, but was not limited to, the following procedures: ▸ Assess the design and implementation of the con- ▸ Review and evaluation of management’s assess- trols in the valuation process; ment of the existence of impairment indicators or in- dicators that impairments recognized in prior peri- ods may have decreased; ▸ Assess the determination of cash generating units; ▸ Reconcile the assumptions used within the future cash flow models to approved budgets and busi- ness plans; ▸ 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 actual performance and to prior year; ▸ Review of management’s sensitivity analysis over key assumptions and perform additional own sensi- tivity analysis in order to assess the impact of pos- sible changes of assumptions on the recoverability; and ▸ Assess the adequacy of the disclosures in the fi- nancial statements. 109 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter 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 oil and gas 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. Recoverability of intangible exploration and evalua- tion (E&E) assets The carrying value of intangible E&E assets amounted to EUR 878 mn at December 31, 2022, after an impair- ment loss of EUR 183 mn in 2022. 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), Note 8 (Exploration expenses) and Note 14 (Intangible assets). 110 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Key Audit Matter How our audit addressed the key audit matter 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 im- pact on the financial statements as they are the basis for production profiles in future cash flow estimates, de- preciation, amortization and impairment charges. 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 and de- commissioning provision estimate. 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) and Note 23 (Provisions). 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 pro- ▸ Analysis of the internal certification process for cess; 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; ▸ Analyse the latest reports of DeGolyer and Mac- Naughton (D&M) on their reviews performed in 2022 of the group’s estimated oil and gas reserves in Tunisia, Malaysia and the Kurdistan Region of Iraq; ▸ 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 and in accounting for depreci- ation & amortization; and ▸ Assess the adequacy of the disclosures in the fi- nancial statements. 111 OMV ANNUAL REPORT 2022 / 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. 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. The total provision for decommissioning and restoration obligations amounted to EUR 3,796 mn at December 31, 2022. 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). 112 OMV ANNUAL REPORT 2022 / 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. 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. 113 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements 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. 114 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Report on Other Legal and Regulatory Requirements Comments on the Directors’ 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 3, 2022. We were appointed by the Supervisory Board on July 14, 2022. 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. Alexander Wlasto, Cer- tified Public Accountant. Vienna, March 9, 2023 Ernst & Young Wirtschaftsprüfungsgesellschaft m.b. H. Mag. Alexander Wlasto m.p. Wirtschaftsprüfer/Certified Public Accountant Mag. Katharina Schrenk m.p. Wirtschaftsprüfer/Certified Public Accountant 115 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Consolidated Income Statement for 2022 Note 4, 5 6 6, 16 17 7 7, 8 9 31 11, 31 11, 31 11, 31 2022 2021 62,298 1,644 869 64,811 35,555 933 600 37,087 (39,298) (4,542) (1,663) (2,484) (2,689) (250) (1,639) 12,246 11 269 (417) (1,345) (1,481) 10,765 12 (5,590) 5,175 3,634 71 1,470 11.12 11.11 13 13 (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 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 116 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Consolidated Statement of Comprehensive Income for 2022 Consolidated Statement of Comprehensive Income In EUR mn Net income for the year Currency translation differences Gains/(losses) arising during the year Reclassification of (gains)/losses to the income statement Gains/(losses) on hedges Gains/(losses) arising during the year Reclassification of (gains)/losses to the income statement 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 2022 5,175 2021 2,804 21 3, 6, 9 28 16 23 18 28 16 603 250 354 40 377 (338) 0 946 883 63 210 386 (176) 0 643 1,156 263 2 (67) 6 53 (1) 17 (0) 204 69 (5) (41) 21 (26) (30) 8 (33) 21 817 5,992 4,381 71 1,540 1,192 3,996 3,164 94 739 117 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Consolidated Statement of Financial Position as of December 31, 2022 Note 2022 2021 14 15 16 18 19 25 17 18 18 19 26 20 2,510 19,317 7,294 1,999 115 1,150 32,384 4,834 4,222 3,929 97 1,198 8,090 22,369 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 1,676 56,429 1,479 53,798 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 118 OMV ANNUAL REPORT 2022 / 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 2022 2021 327 2,483 16,339 19,149 327 2,483 12,695 15,505 7,478 26,628 6,491 21,996 997 6,030 1,322 1,359 3,714 377 489 124 1,194 15,607 5,259 1,290 155 128 2,449 82 505 2,172 1,527 13,567 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 13,677 626 56,429 909 53,798 22 21 23 24 24 24 23 23 24 24 25 24 24 24 24 23 23 24 24 20 119 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Consolidated Statement of Changes in Equity for 2022 Consolidated Statement of Changes in Equity in 2022¹ In EUR mn Share capital Capital reserves Hybrid capital Revenue reserves Currency translation differences January 1, 2022 Net income for the year Other comprehensive income for the year Total comprehensive income for the year Dividend distribution and hybrid coupon Share-based payments Increase/(decrease) in non-controlling interests Reclassification of cash flow hedges to balance sheet December 31, 2022 327 — — — — — — — 327 1,514 — — — — 4 — — 1,517 2,483 — — — — — — — 2,483 12,008 3,705 206 3,911 (847) — 5 — 15,076 (910) — 543 543 — — (2) — (370) 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 Share-based payments Increase/(decrease) in non-controlling interests Reclassification of cash flow hedges to balance sheet December 31, 2021 327 — — — — — — — — 327 1,506 — — — — — 8 — — 1,514 3,228 — — — — (745) — — — 2,483 10,502 2,187 61 2,248 (699) (43) — — — 12,008 (1,785) — 875 875 — — — — — (910) 1 See Note 21 – Equity of stockholders of the parent and Note 22 – Non-controlling interests 120 OMV ANNUAL REPORT 2022 / 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 173 — (6) (6) — — — 33 200 (86) — 4 4 — — — — (82) (3) — — — — 1 — — (2) 15,505 3,705 746 4,451 (847) 4 3 33 19,149 6,491 1,470 71 1,540 (621) — 45 23 7,478 21,996 5,175 817 5,992 (1,467) 4 48 56 26,628 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) 8 — (13) 15,505 6,159 617 121 739 (268) — — (147) 8 6,491 19,899 2,804 1,192 3,996 (967) (789) 8 (147) (5) 21,996 121 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Consolidated Statement of Cash Flows for 2022 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 Disposals Proceeds in relation to non-current assets and financial assets Proceeds from the sale of subsidiaries and businesses, net of cash disposed Cash disposed due to the loss of control Cash flow from investing activities Increase in long-term borrowings Repayments of long-term borrowings Increase/(decrease) in short-term borrowings Increase in non-controlling interest Decrease in non-controlling interest Dividends paid to stockholders of the parent (incl. hybrid coupons) Dividends paid to non-controlling interests 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 2022 5,175 2,667 85 5,505 (4,266) 68 (344) (879) 812 154 (182) (264) 247 (13) (195) 1,274 9,843 (2,188) (397) 501 (2,084) 7,758 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 14, 15 18 (2,943) (736) (2,497) (382) 1,487 440 (214) (1,966) 0 (1,047) (184) 30 (1) (847) (612) (2,660) (72) 3,060 5,064 8,124 35 397 661 — (1,820) 250 (2,287) 61 — (4) (733) (265) (2,977) (25) 2,195 2,869 5,064 14 26 26 26 22 21 22 26 26 26 8,090 5,050 122 OMV ANNUAL REPORT 2022 / 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 chemicals company with activities in the divisions Chemicals & Materials, Refining & Marketing, and Exploration & Production. 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 accounting policies adopted are consistent with those of the previous financial year, ex- cept where otherwise indicated. The consolidated financial statements for 2022 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, 2022. 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 2022 were approved and released for publication by the Supervi- sory Board on March 9, 2023. 2 Accounting policies, judgements and estimates 1) Significant judgements and estimates Preparation of the consolidated financial statements re- quires management to make estimates and judge- ments that affect the amounts reported for assets, lia- bilities, income and expenses, as well as the amounts disclosed in the notes. These estimates and assump- tions are based on historical experience and other fac- tors that are deemed reasonable at the date of prepara- tion of these financial statements. Actual outcomes could differ from these estimates. Significant estimates and assumptions were required in particular with regards to the effects from the climate crisis and energy transition as well as the Ukraine-Rus- sia-crisis. These estimates and assumptions are de- scribed below in section a) and b). In addition, estimates and assumptions with significant impact on OMV Group result were made with respect to oil and gas reserves, the recoverability of assets, provisions, lease contracts, and taxes on income. These are described together with the relevant ac- counting policies in section 2 of this note and high- lighted in grey. a) Significant estimates and assumptions in as- sessing climate-related risks OMV has considered the short- and long-term effects of climate change and energy transition in preparing the consolidated financial statements. They are subject to uncertainty and they may have significant impacts on the assets and liabilities currently reported by the Group. In 2022, OMV defined the first time concrete short-, medium-, and long-term targets for its emissions reduc- tions and committed to becoming a net-zero emissions company by 2050 (Scopes 1, 2, and 3). For Scopes 1 and 2 emissions, OMV is aiming for an absolute reduc- tion of at least 30% by 2030 and of at least 60% by 123 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 2040. For Scope 3 emissions, OMV is striving for a re- duction of at least 20% by 2030 and of 50% by 2040.1 The significant accounting estimates performed by management 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 risks and energy tran- sition to lower carbon energy sources together with management’s best estimate on global supply and de- mand, including forecasted commodities prices. 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, financial reporting under IFRS requires the use of assumptions that represent management’s current best estimate of the range of ex- pected future economic conditions, which may differ from such targets. These assumptions include expecta- tions about future worldwide decarbonization efforts and the transition of economies to net zero emissions. OMV uses two different scenarios which were devel- oped by the internal Market Intelligence department: the base case and the stress case. The scenarios differ in the underlying expectations about the pace of the fu- ture worldwide decarbonization and lead to different as- sumptions for demand, prices and margins of fossil commodities. The base case is used for the mid-term planning as well as for estimates going into the meas- urement of various items in the group financial state- ments, including impairment testing of non-financial as- sets and the measurement of provisions. The stress case which is based on a faster decarbonization path than the base case is used for calculating sensitivities in order to recognize the uncertainty in the pace of the energy transition and to better understand the financial risk from energy transition on the existing assets of OMV. Both scenarios, the base and stress case, reflect more climate change mitigation efforts and a faster de- carbonization path than the scenarios used in the prior year. But OMV still expects to see energy transition at different paces in different parts of the world. The base case is built on a scenario in which OECD countries will achieve the net zero emissions goal be- tween 2050 and 2070 (equivalent to a path between the IEA “net zero emissions” (NZE) and “sustainable development” (SDS) scenarios) and non-OECD coun- tries will implement all announced decarbonization pledges in full and on time (equivalent to the IEA “an- nounced pledges scenario” (APS)).2 For the stress test analysis, a decarbonization scenario is used which is a potential trajectory to reaching the climate goals according to the Paris Agreement. In this scenario, it is assumed that advanced economies will reach the net zero emissions goal by 2050, while mid- dle-income and developing economies will only follow at a later point but not later than 2070. This scenario is built on a path between the IEA SDS and IEA NZE sce- narios. The entire world following the commitments of the Paris Agreement leads to lower global demand for oil and gas and consequently to lower oil and gas prices than in the base case. In addition, this scenario incorporates other possible effects such as slower eco- nomic growth in the short term. In an additional sensitivity analysis for assessing the re- coverability of the oil and gas assets in the E&P seg- ment, OMV used the Net Zero Emissions by 2050 sce- nario which was modeled by the IEA.3 It shows a path- way for the global energy sector to achieve net zero CO2 emissions by 2050. For investment decisions, business cases are calcu- lated based on the same price and demand assump- tions as are used for the mid-term planning and impair- ment tests. In addition, a business case calculation based on the stress case assumptions is mandatory for all investment decisions in order to assess the eco- nomic viability under a “Paris aligned” scenario. The IEA NZE scenario is not used for investment decisions. Costs for CO2 emissions are taken into account in busi- ness case calculations, impairment tests as well as the stress case scenario calculations to the extent carbon pricing schemes are in place in the respective coun- tries. Estimates for the CO2 prices in the European Un- ion are disclosed in Note 2.2j. 1 The base for the emission reduction targets are the Group’s emissions in 2019 adjusted for the emissions of Borealis in which OMV acquired a majority stake in 2020. In addition to the emission reduction targets based on absolute reductions, the Group defined also targets based on carbon intensities. 2 Based on World Energy Outlook 2021 report published by International Energy Agency (IEA). The sustainable development scenario (SDS) which was not in- cluded in the IEA World Energy Outlook 2022 report is a normative scenario used to model a “well below 2°C” pathway as well as the achievement of other sustainable development goals and its outcomes are close to the “announced pledges scenario” (APS). 3 Based on the World Energy Outlook 2022 report published by International Energy Agency (IEA) 124 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Recoverability of assets Commodity price assumptions have a significant impact on the recoverable amounts of E&A assets, PPE and goodwill. For the impairment tests, the price set as de- fined for the mid-term planning and incorporating the energy transition scenario as described above was used. Disclosures on the impairment tests – including the detailed price set – are included in Note 2.2j as well as Note 7 – Depreciation, amortization, impairments and write-ups. The outcome of the impairment tests is not in line with the goals of the Paris Agreement. segment. In order to further assess the risk from differ- ent decarbonization scenarios and its impact on OMV’s oil and gas assets, an additional calculation of a possi- ble effect of using the oil and gas prices in a 1.5°C compatible Net Zero Emission by 2050 (NZE) scenario by the International Energy Agency (IEA) has been per- formed. CO2 price assumptions were the same as in the stress case calculation. They are in line with the IEA NZE scenario for the European Union. But no CO2 prices were taken into account in countries without CO2 pricing systems in place. The sensitivities calculated based on the stress case indicate that there is mainly a risk for impairments in a Paris-aligned scenario for oil and gas assets in the E&P The impact of the OMV stress case and the “NZE by 2050” calculation on the carrying amounts of oil and gas assets are summarized in the table below. Sensitivities on oil and gas assets1 OMV stress case scenario IEA NZE scenario Decrease of car- rying amounts of oil and gas assets Remaining carry- ing amounts of oil and gas assets Brent oil price in real terms 2030/2040/20502 Gas price THE in real terms 2030/2040/20502 in EUR bn in EUR bn (5.3) (6.1) 6.9 6.0 USD/bbl 47/27/20 36/30/25 EUR/MWh 18/18/18 15/13/12 1 Including oil and gas assets with unproved and proved reserves, E&P at-equity investments and E&P related goodwill 2 In 2027 real terms Whereas the recoverability of the refineries in the R&M segment would also be impacted through globally de- clining demand for almost all products, resulting in lower margins and cracks in a scenario assuming a quicker decarbonization path, the carrying amounts of assets in the C&M segment are not expected to be at risk. in Note 2.2h which is based on proved reserves. Ac- cording to the current production plans, 31% of proved reserves as at December 31, 2022, will be left by 2030, 5% by 2040, and less than 1% by 2050. The existing oil and gas assets with proved reserves will therefore be significantly depreciated until 2030 and, with the excep- tion of one field, fully depreciated until 2050. More details on the stress tests including a description of the assumptions applied are included in Note 2.2j. As OMV doesn’t see the C&M segment materially im- pacted by the energy transition, there is also no mate- rial impact on useful lives in this segment expected. Useful lives The pace of energy transition may have an impact on the remaining useful lives of assets.The depreciable fixed assets in the refineries will in average be fully de- preciated over the next 9 years and in retail over the next 5 to 10 years. Demand for petroleum products is expected to stay robust over this period of time. It is therefore not expected that energy transition has a ma- terial impact on the expected useful lives of prop- erty, plant, and equipment in the R&M segment. In the E&P segment, oil and gas assets are depreci- ated using the unit-of-production method as described Decommissioning provisions The maturity profile of decommissioning provisions is included in Note 23 - Provisions. The economic cut-off date of oil and gas assets does not shift significantly under the stress case scenario. The impact on the car- rying amount of the decommissioning provisions is therefore expected to be immaterial. For refineries, no decommissioning provisions are rec- ognized. OMV’s refinery sites are expected to continue to be used for production under a Paris-aligned energy transition scenario. There are significant investments planned in the next years with the goal to adapt OMV’s 125 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS refinery sites in Europe in the direction of renewable fuels and chemical feedstock production with deeper chemicals integration. Furthermore, ADNOC Refining is expected to continue to operate under such a scenario because of its favourable positioning in the market. b) Impact of Russia’s invasion of Ukraine and re- lated significant estimates and assumptions The attack of Russia on Ukraine on February 24, 2022, led to developments that had a significant impact on the consolidated financial statements. OMV is represented in Russia by an interest in the Yu- zhno-Russkoye gas field. The gas is produced by the operator and the license holder, OJSC Severneftegaz- prom (SNGP), in which OMV holds a 24.99% interest. The interest in SNGP was until February 28, 2022, ac- counted for at equity. The gas is sold through the trad- ing company JSC GAZPROM YRGM Development (YRGM), in which OMV holds one preferred share enti- tling OMV to a dividend of 99.99% of the total net profit. Until February 2022, YRGM was fully consolidated be- cause all its activities are predetermined and OMV was fully exposed to the variability of returns. In response to the sanctions of the Western countries, Russia passed several countersanctions, which have an impact on the operation of foreign companies in Russia. According to these countersanctions, among others, OMV lost power to receive dividends from YRGM, which led to the loss of control over YRGM and the loss of significant influ- ence over SNGP. For this reason, OMV ceased to fully consolidate YRGM and to equity account for SNGP in the consolidated financial statements. Starting March 1, 2022, the investments in SNGP and YRGM are accounted for at fair value through profit or loss according to IFRS 9. The deconsolidation led to a loss of EUR 658 mn; of that amount, EUR 399 mn was related to the recycling of the cumulative currency dif- ferences originally recognized in other comprehensive income. The total amount was included in other operat- ing expenses. In addition, the deconsolidation had a negative impact on the cash flow from investing activi- ties in the amount of EUR 208 mn due to the derecog- nized cash balance of YRGM, shown in the line “Cash disposed due to the loss of control.” As of Decem- ber 31, 2022, the fair value of the investments in YRGM and SNGP was further decreased to a book value of EUR 23 mn, leading to an additional loss of EUR 370 mn in the financial result. The fair value measurement takes into account the further deterioration of the politi- cal and legal environment in Russia and is based on a DCF model considering the production profile, ex- pected gas prices, and production costs, as well as an illiquidity discount of 90% on the remaining net present value of the cash flows and the cash balance. OMV has a contractual position toward Gazprom from the redetermination of the reserves of the Yuzhno Russkoye gas field, which was taken over as part of the acquisition of the participation in this field in 2017. Ac- cording to this agreement, the volume of gas reserves in the Yuzhno Russkoye field is contractually defined 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 have profited in the future from higher sales volumes) or Gazprom could be obligated to compensate OMV. The payment for the reserve redetermination is linked to the actual amount of the gas reserves. A fair value calculation which was based on three dif- ferent scenarios, one of them based on an internal esti- mate by OMV, led to a positive value. In the current dif- ficult political and legal environment in Russia, OMV, however, no longer expects this contractual position to be recoverable. As a consequence, a fair value loss of EUR 432 mn was recognized in other operating ex- penses, which reduced the fair value of this position to zero. In 2021, the fair value measurement was based on OMV’s internal reserve estimates and led to an asset with a value of EUR 432 mn. An external assessment of the reserves in Yushno Russkoye as of December 31, 2020, showed a signficant deviation from the inter- nal estimate. In an additional expert-opinion by an inde- pendent, external expert OMV’s approach for determin- ing the reserves was, however, deemed appropriate. An increase of the estimated reserves over the contrac- tually defined reserves could lead to a financial liability toward Gazprom. The total payments made by OMV as financial investor under the financing agreements for Nord Stream 2 amounted to EUR 729 mn. The total outstanding amount including accrued interest as of March 5, 2022, amounted to EUR 1 bn and was fully impaired, nega- tively impacting the financial result (carrying amount as of December 31, 2021: EUR 987 mn). Whereas OMV purchased on average 7.6 TWh per month of natural gas under long-term supply agree- ments with Gazprom in Austria and Germany in the first quarter of 2022, there were curtailments of gas delivery volumes since mid of June and no deliveries to Ger- many since end of August 2022. In the second half of 2022, OMV imported on average 2.6 TWh per month of natural gas based on these contracts. The curtailments 126 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS of gas delivery volumes required adjustments to OMV’s hedging ratios and replacement purchases on the mar- ket resulting in a negative financial impact. The uncer- tainty regarding future curtailments and delivery vol- umes remains and could result in further substantial losses in particular, in case actual deliveries materially deviate from previously hedged volumes leading to par- tially unmitigated gas price exposure from Gazprom supply contracts. No onerous contract provisions have been recognized for the long-term gas supply contracts with Gazprom. The pricing of these contracts is based on current hub prices and it is not possible to estimate any negative impact from future gas curtailments. The hedges re- lated to the supply from these contracts are measured at fair value and not subject to hedge accounting. 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. OMV took various measures to replace Russian gas supplies and to ensure that it can meet all of its supply obligations. This included the establishment of routes for deliveries from North Western Europe (e.g. Norwe- gian equity gas and liquified natural gas (LNG) supply via the Gate terminal) and Italy. In July, OMV managed to secure 40 TWh of additional transport capacities to Austria for the current gas year (October 1, 2022 – September 30, 2023) at the transfer points Oberkappel (pipeline from Germany) and Arnoldstein (pipeline from Italy). Furthermore, storages have been filled to maxim- ize possible withdrawals in case of supply cuts and OMV has access to liquid gas market hubs in Europe, if needed. As a direct consequence of the energy crisis in Europe, regulatory measures like the EU solidarity contribution and price caps were implemented in some of the coun- tries in which OMV is active. The impact from the EU solidarity contribution on the group financial statements is disclosed in Note 12 – Taxes on income and profit. When goods such as crude oil, LNG, oil and chemical products and similar goods are sold, the delivery of each quantity unit normally represents a single perfor- mance 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 deter- mined on the basis of the Incoterm agreed in the con- tract with the customer. These sales are done with nor- mal 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 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. 2) Significant accounting policies 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. 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 127 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 contracts contain a stand-ready obligation for providing storage 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 services which have a term of more than one year. In principle, IFRS 15 requires the disclosure of the total amount of transaction 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 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 2.2f), 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 the line- 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 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 over- hauls). 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 decommission- ing provision is recognized (see 2.2s). Costs for re- placements of components are capitalized and carrying values of the replaced parts are derecognized. Costs 128 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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, see 2.2h) 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 Chemical 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, are recognized in the period in which they are incurred. The costs of wells are capitalized and re- ported as intangible assets until the existence or ab- sence of potentially commercially viable oil or gas re- serves is determined. Wells which are not commercially viable are expensed. The costs of exploration wells whose commercial viability has not yet been deter- mined continue to be capitalized as long as the follow- ing conditions are fulfilled: ▸ 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 there is no further intention to develop a 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 129 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 The oil and gas reserves are estimated by the Group’s petroleum engineers in accordance with in- dustry standards and reassessed at least once per year. In addition, external reviews are performed regularly. In 2022, the reserves of the oil and gas as- sets (as of December 31, 2021) in Tunisia, KRI and Malaysia were externally reviewed by DeGolyer and MacNaughton (D&M). The reserves of the other sig- nificant oil and gas assets were externally reviewed the year before. The results of the external reviews did not show sig- nificant deviations from the internal estimates, apart from few exceptional cases. In case of significant deviations, OMV performs further analysis, involving additional independent experts, where necessary. Oil and gas reserve estimates have a significant im- pact on the assessment of the recoverability of car- rying amounts of the Group’s oil and gas assets. Downward revisions of these estimates could lead to impairment of the asset’s carrying. In addition, changes to the estimates of oil and gas reserves im- pact prospectively the amount of amortization and depreciation. 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 2.2a). In addition, there are contractual arrangements similar to joint operations which are not jointly controlled and therefore do not meet the definition of a joint operation according to IFRS 11. This is the case 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 assesses whether such arrangements are within or out of scope of IFRS 11 on the basis of the relevant legal arrangements such as concession, license or joint operating agreements which define how and by whom the relevant decisions for these activities are taken. The accounting treatment for these arrangements is basically the same as for joint operations. As acquisitions of interests in such ar- rangements 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) as well as investments in associated companies and joint ventures are tested for impairment 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 130 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 various estimates and assumptions such as price and margin developments, production volumes and discount rates. Changes in the economic situation, expectations about climate-related risks or other facts and circum- stances might require a revision of these assump- tions and could lead to impairments of assets or re- versals of impairments within the next financial year. Significant assumptions The price and margin assumptions used in impair- ment testing are reviewed annually by management and approved by the Supervisory Board within the mid-term planning (MTP). They are based on man- agement’s best estimate and were consistent with external sources. Whereas prices in the near term are anchored in recent forward prices and market developments, long-term price assumptions are de- veloped using a variety of long-term forcasts by rep- utable experts and consultants and consider long- term views of global supply and demand. OMV’s long-term assumptions take into consideration the impacts of the climate change and the energy transi- tion to lower-carbon energy sources (see section 1 of this note). During the reporting period, OMV increased its near- term assumptions for Brent oil taking into account the tighter post-COVID-19 market. The long-term oil prices were kept on the same level as in the prior year. European gas prices were increased signifi- cantly in the near term after Russia’s invasion of Ukraine and the sharp decline of Russian gas flows into the European market. In the long term, Euro- pean gas prices are assumed to stay slightly above the assumptions of 2021 also due to lower supply of Russian gas to Europe and despite a faster decar- bonization assumed than in 2021. The price assumptions as well as the EUR-USD ex- change rates are listed below (in nominal terms in the first 5 years and afterwards in 2027 real terms in 2022 and 2026 real terms in 2021): 2022 Price assumptions for impairment testing Brent oil price (USD/bbl) EUR-USD exchange rate Brent oil price (EUR/bbl) Gas price THE (EUR/MWh) CO2 price EUA (EUR/t) 2023 2024 2025 2026 2027 2030 2040 2050 80 1.10 73 91 85 75 1.10 68 64 92 70 1.10 64 46 100 65 1.10 59 36 107 65 1.10 59 27 114 65 1.10 59 24 129 60 1.10 55 24 142 60 1.10 55 24 118 131 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 2021 Price assumptions for impairment testing Brent oil price (USD/bbl) EUR-USD exchange rate Brent oil price (EUR/bbl) Gas price THE (EUR/MWh) CO2 price EUA (EUR/t) 2022 2023 2024 2025 2026 2030 2040 2050 65 1.22 53 25 55 65 1.22 53 22 58 65 1.22 53 22 61 65 1.22 53 22 64 65 1.22 53 22 68 65 1.22 53 22 93 60 1.22 49 22 117 60 1.22 49 22 — The key valuation assumptions for the recoverable amounts of E&P assets are prices and margins, pro- duction volumes, exchange and discount rates. The production profiles were estimated based on re- serves estimates (see Note 2.2h) and past experi- ence 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 therefore cover the whole life term of the field. The increase in gas prices was considered as an in- dication for reversal of impairments of European gas assets which were recognized in prior years. On the contrary, the expected production volume of some oil and gas fields in Romania decreased due to higher expected natural decline rates and the cost base increased. The results of the impairment tests are disclosed in Note 7 – Depreciation, amortization, impairments and write-ups. 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. 2022 Price assumptions for stress case sensitivities As far as refining margins in the Middle East are concerned, they were assumed to increase in the near term but to stay in the long run on the same level as in the previous period. The margin improve- ment in the near term was considered as an indica- tion for reversal of the impairment recognized on the ADNOC Refining investment in 2021. The growth rate included in the terminal value calculation was assumed as 1%. Sensitivities based on stress case Sensitivities based on a stress case scenario have been calculated to test the resilience of assets against risks from a slower economic growth and the Russia-Ukraine crisis in the near term and from cli- mate-related risks in the longer term. Long-term price and margin assumptions are based on a Paris- aligned scenario with a worldwide transition to net zero emissions between 2050 and 2070 (for more details see section 1 of this note). The assumptions used in the sensitivity analysis are included in the table below (prices in nominal terms in the first 5 years and afterwards in 2027 real terms): Brent oil price (USD/bbl) EUR-USD exchange rate Brent oil price (EUR/bbl) Gas price THE (EUR/MWh) CO2 price EUA (EUR/t) 2023 2024 2025 2026 2027 2030 2040 2050 65 1.20 54 69 100 60 1.20 50 48 107 55 1.20 46 35 114 50 1.20 42 27 121 50 1.20 42 20 129 47 1.20 39 18 142 27 1.20 23 18 194 20 1.20 17 18 232 The stress case sensitivities were calculated using a simplified method. The calculation was based on a DCF model similar to a value in use calculation where no future investments for enhancements and improve- ments were considered. The calculations do not con- sider consequential measures that manage- ment could implement such as divestments and changes in business plans. The amounts presented should therefore not be seen as a best estimate of an expected impairment impact following such a sce- nario. In the E&P segment, the cash flows are based on an adjusted mid-term planning for five years and a life of 132 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS field planning for the remaining years until abandon- ment. The stress case does not include any other changes to input factors than prices and volumes and does not consider any restructuring measures. Under this stress test scenario, the carrying amounts of the oil and gas assets with proved reserves (incl. E&P at-equity investments) would have to be de- creased by EUR 4.4 bn and goodwill would decrease by EUR 0.6 bn. In addition, some oil and gas assets with unproved reserves would be abandoned with a pre-tax P&L impact of EUR 0.3 bn. For E&P oil and gas assets, an additional sensitivity based on oil and gas prices according to the IEA Net Zero by 2050 scenario was calculated and showed a decrease in the carrying amount of oil and gas assets with proved and unproved reserves (incl. E&P goodwill) of EUR 6.1 bn (see section 1 of this note). In the R&M segment, the stress case reflects globally declining demand for almost all products resulting in lower margins and cracks compared to the impair- ment test scenario. Under the stress case scenario, the carrying amounts related to refineries (including the investment in ADNOC Refining) would have to be decreased by in total EUR 0.6 bn, mainly related to ADNOC Refining investment and Petrobrazi in Roma- nia. The Schwechat and Burghausen refineries are more resilient against impairment risks in such a sce- nario due to the strong focus of these refineries on petrochemical production. In the stress test calculations for the refineries, the cash flows of the 5-year mid-term planning were ad- justed for the lower margins. The refining indicator margins Europe were assumed to be lower by approx- imately 50% in the stress case than in the mid-term planning. The terminal value for the refineries in Eu- rope was calculated based on the cash flows derived from the last detailed planning period and a growth rate which is equivalent to the CAGR derived from a long-term estimate of margins and sales volumes. The growth rates are in the range between (3.17)% and 1.0%. In addition, cash flows assumed for the ter- minal value incorporate a significant decrease in oper- ating costs and CAPEX. 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. 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 133 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 as well as the contractual cash flow characteristics 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. 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 demonstrating that a more lagging default criterion is appropriate. A financial asset is writ- ten 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 for the remaining amount on the probability of de- fault 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 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 decided 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 a 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 134 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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. Details on the valuation of the investments meas- ured at fair value through profit or loss in the gas field Yuzhno Russkoye and the contractual position towards Gazprom with regard to the reserve redeter- mination can be found in section 1 of this note. n) Derivative financial instruments and hedge ac- counting Derivative financial instruments are used to hedge risks resulting from changes in currency exchange rates, commodity prices and interest rates. Derivative instru- ments are recognized at fair value. Unrealized gains and losses are recognized as income or expense, ex- cept 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. Contracts to buy or sell non-financial items 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 and continue to be held for the purpose of the receipt or delivery of non-financial items 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 carrying amount of the related assets, where it is reasonable to expect that the granting condi- tions 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 chemical products. Costs of production comprise directly attribut- able costs as well as fixed and variable indirect material and production overhead costs. Production-related ad- ministrative costs, the costs of company pension schemes and voluntary employee benefits are also in- cluded in the cost of production. In refineries, a carrying capacity approach is applied according to which the 135 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS production costs are allocated 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 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 or 136 by partner companies and on past experience. Any significant downward changes in the expected future costs or postponement 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 and inflation rates, which have material effects on the amounts of the provision. The assumptions used are disclosed in Note 23 – Provisions. 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 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 severance payments upon termination of employment or upon reaching the normal retirement age. The enti- tlements depend on years of service and final compen- sation levels. Entitlements to severance payments for employees whose service began after December 31, 2002, are covered by defined contribution plans. Simi- lar obligations as entitlement to severance payments 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 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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. Expenses related to such restruc- turing programs are included in the line Other operating expenses in the Consolidated Income Statement. Vol- untary modifications to employees’ remuneration ar- rangements are recognized on the basis of the ex- pected number of employees accepting the employing company’s offer. Provisions for obligations related to in- dividual separation agreements which lead to fixed pay- ments 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 of discount rates, future in- creases in salaries and future increases in pensions. For current actuarial assumptions for calculating ex- pected defined benefit entitlements and their sensi- tivity 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, respec- tively. The expected retirement age used for calcula- tions 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 developments of market conditions. This led to the recognition of onerous contract provisions in the Group’s financial statements for the unavoida- ble 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. Emission allowances received free of chargefrom governmental authorities (EU Emissions Trading Scheme for greenhouse gas emissions allowances), re- duce financial obligations related to CO2 emissions; provisions are recognized only for shortfalls (see Note 23 – Provisions). 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. Financial guarantee contracts are recognised as a fi- nancial liability at the time the guarantee is issued. The liability is initially measured at fair value and subse- quently measured at the higher of the amount of the loss allowance determined according to the expected credit losses model and the amount initially recognized less the cumulative income recognized according to IFRS 15. 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 2.2f) are disclosed as in- come taxes. Deferred taxes are recognized for tempo- rary differences. 137 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 an evaluation 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 life span 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, when 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) – 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. 138 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). x) 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. OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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) Swedish krona (SEK) US dollar (USD) 2022 2021 Statement of financial position date 1.956 24.116 400.870 1.680 10.514 4.950 11.122 1.067 Statement of financial position date 1.956 24.858 369.190 1.658 9.989 4.949 10.250 1.133 Average 1.956 24.566 391.290 1.658 10.103 4.931 10.630 1.053 Average 1.956 25.641 358.520 1.672 10.163 4.922 10.147 1.183 3) Changes in accounting policies The Group has adopted the following amendments to standards from January 1, 2022: The amendments did not have any material impact on OMV’s group financial statements. Reference to the Conceptual Framework ▸ Amendment to IFRS 3 Business Combinations: ▸ Amendment to IAS 16 Property, Plant and Equip- ▸ Amendments to IAS 37: Onerous Contracts - Cost ▸ Annual Improvements to IFRS Standards 2018- ment: Proceeds before intended use of Fulfilling a Contract 4) 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. 2020 Standards and amendments IASB effective date IFRS 17 Insurance Contracts and Amendments to IFRS 17 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 Amendments to IAS 1: Classification of Liabilities as Current and Non-Current Amendments to IFRS 16: Lease Liability in a Sale and Leaseback Amendments to IAS 1: Non-current Liabilities with Covenants January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024 January 1, 2024 139 OMV ANNUAL REPORT 2022 / 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. Chemicals & Materials On June 3, 2022, Borouge PLC has successfully listed on ADX, the Abu Dhabi Securities Exchange. Following the IPO (Initial Public Offering), the shareholding in Borouge PLC has changed to Borealis owning a 36% stake in Borouge PLC and Abu Dhabi National Oil Company owning 54% respectively. For details refer to Note 16 – Equity-accounted investments. Based on the final offer price of AED 2.45 per share, the IPO has raised gross proceeds of EUR 1.9 bn for the offering of 10% of the company’s total issued share capital. This transaction led to a net gain (including FX recycling effects) of EUR 341 mn, which is part of the line “Other operating income” in the consolidated in- come statement. Refining & Marketing On May 1, 2022, OMV closed the transaction to sell its filling station business in Germany to EG Group. The agreed purchase price before customary closing adjust- ments amounted to EUR 485 mn. The transaction led to a gain of EUR 409 mn recognized in the line “Other operating income” in the consolidated income state- ment. Exploration & Production OMV ceased to fully consolidate JSC GAZPROM YRGM Development (YRGM) and to equity account for OJSC Severneftegazprom (SNGP) and therefore, start- ing March 1, 2022, the investments in SNGP and YRGM are accounted for at fair value through profit or loss according to IFRS 9. For further details refer to Note 2 – Accounting policies, judgements and esti- mates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. Cash flow impact of changes in group structure Cash flow from investing activities included inflows from the IPO of Borouge PLC in the amount of EUR 745 mn, shown in the line “Proceeds in relation to non-current assets and financial assets”. Furthermore, cash flow from investing activities contained an inflow related to the divestment of the filling station business in Germany in the amount of EUR 432 mn, presented in the line “Proceeds from the sale of subsidiaries and businesses, net of cash disposed” and an outflow of EUR 208 mn related to the loss of control of JSC GAZPROM YRGM Development, included in the line “Cash disposed due to the loss of control.” Further details are presented in the following tables: Cash impact from sale of subsidiaries and businesses and cash disposed due to the loss of control In EUR mn Consideration received Less cash disposed of Net cash inflows from disposal of subsidiaries and businesses Cash disposed due to the loss of control Net assets of disposed subsidiaries and businesses and subsidiaries over which control has been lost In EUR mn Non-current assets Current assets Non-current liabilities Current liabilities Net assets 140 2022 446 (6) 440 (214) 2022 681 404 245 179 661 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Segment Reporting 4 Segment Reporting Changes in segment reporting Starting with Q1/22 the OMV Group structure was reor- ganized, which involved the transfer of Gas Marketing Western Europe, which includes Supply, Marketing, Trading and Logistics, from Refining & Marketing to Ex- ploration & Production in order to extract synergies from the entire end-to-end gas value chain. Internal re- porting and the relevant information provided to the chief operating decision-maker in order to assess per- formance and allocate resources has been updated to reflect the current organizational structure. Business operations and key markets For business management purposes, OMV is divided into three operating Business Segments: Chemicals & Materials, Refining & Marketing, and Exploration & Pro- duction, as well as the segment Corporate and Other (C&O). Each segment represents a strategic unit and operates in different markets. Each Business Segment is managed independently. Strategic business deci- sions are made by the Executive Board of OMV. With the exception of C&O, the reportable segments of OMV are the same as the operating segments. 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. OMV Group has a production capacity, including joint ventures, of 7.5 mn t base chemicals, 5.9 mn t polyole- fins, 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 Brazil and one in South Korea. In addition, OMV holds minority stakes in various equity-accounted in- vestments, the most significant ones being Borouge (United Arab Emirates) a Borealis’ joint venture with ADNOC that operates the largest petrochemical com- plex in the world and the Baystar joint venture (Pasa- dena, United States) which serves the customer base in the North American markets and operates Port Ar- thur Refinery with the production capacity of 0.5 mn t OMV share. OMV group is pursuing various initiatives in mechanical and chemical recycling and renewable polyolefins. A new polyethylene plant based on Borstar technology on the site in Pasadena is currently under construction with the target to deliver a broad range of products to meet the growing global demand of sustainable and high energy efficient plastic products. The Refining & Marketing (R&M) Business Segment refines and markets crude oil and other feedstock. It operates the refineries Schwechat (Austria), Burghau- sen (Germany) and Petrobrazi (Romania) with an an- nual capacity of 17.8 mn t. In these refineries, crude oil is processed into petroleum products, which are sold to commercial and private customers. The activities of this business segment also cover supply and marketing of gas in Eastern Europe 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 1,800 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. 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. In addition, E&P is engaged in gas supply, marketing, trading, and logistics in Western Europe. Group management, financing and insurance activities as well as certain service functions are concentrated in the Corporate & Other (C&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 C&O segment. 141 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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. 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 CCS effect is eliminated from the accounting result. The CCS effect, also called inventory holding gains and losses, is the difference between the cost of sales cal- culated using the current cost of supply, and the cost of sales calculated using the weighted average method after adjusting for any changes in valuation allowances. In volatile energy markets, measurement of the costs of petroleum products sold based on historical values (e.g. weighted average cost) can have distorting effects on reported results. This performance measurement enhances the transparency of results and is commonly used in the oil industry. OMV, therefore, publishes this measure in addition to the Operating Result determined according to IFRS. 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 & 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 Clean Operating Result CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 C&M R&M E&P C&O Total Consoli- dation OMV Group 2022 13,450 28,634 30,857 (1,181) (2,818) (6,661) 12,269 25,816 24,197 548 857 181 60 1,478 825 327 6,936 1 252 — 207 460 7,396 — 7,396 332 533 477 422 7 266 2,039 — (263) (315) (4) (582) 15 68 3,392 2 (47) (409) (321) (774) 1,457 2,618 (202) 2,415 — 1,457 5,964 1,285 5,179 424 (407) 17 73,365 (11,067) 11,067 — 62,298 (11,067) 62,298 — 62,298 58 — 41 1,644 869 2,474 853 7 — 660 (86) 12,281 4 — — 31 36 8 (58) (724) (87) (861) — — — 1,644 869 2,474 853 — — 660 (35) 12,246 — — — — — 8 (58) (724) (87) (861) (50) 11,420 (35) 11,385 — (50) 11,218 (202) (8) (210) (43) 11,175 4,223 826 1,765 11,407 1,512 350 234 41 — 21,826 3,664 7,294 — — — 21,826 3,664 7,294 1 Including intersegmental 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 142 OMV ANNUAL REPORT 2022 / 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 2021: Segment reporting In EUR mn Sales revenues1 Intersegmental 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 Clean Operating Result CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 2021 restated C&M R&M E&P C&O Total 11,618 16,547 14,650 (1,109) (2,452) (3,713) 10,509 14,095 10,937 376 (361) 14 43,191 (7,636) 35,555 246 10 427 717 3 451 7 375 56 1,399 326 0 2,910 14 713 (7) 212 924 1,376 (430) 945 101 (209) 75 (18) 2,892 — 2,892 63 — 41 0 — (74) 9 — (6) 9 12 (62) — (62) 933 600 2,401 1,538 4 5,115 30 1,297 (223) 210 1,315 6,430 (430) 5,999 249 534 535 495 — 1,828 — 483 — (87) 396 2,224 — 2,224 5,283 724 5,133 Consoli- dation OMV Group (7,636) 35,555 — 7,636 35,555 — — — — — — (51) — — — — — (51) 12 (39) 933 600 2,401 1,538 4 5,065 30 1,297 (223) 210 1,315 6,379 (418) 5,961 3,894 619 1,320 12,312 1,253 433 241 28 — 21,730 2,624 6,887 — — — 21,730 2,624 6,887 1 Including intersegmental 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 143 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Segment reporting In EUR mn 2021 reported C&M R&M E&P C&O Total Sales revenues1 Intrasegmental sales Sales to third parties 11,618 25,928 (1,109) (2,780) 10,509 23,148 Other operating income Net income from equity-accounted invest- ments 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 Clean Operating Result CCS effect Clean CCS Operating Result Segment assets2 Additions in PPE/IA3 Equity-accounted investments4 249 534 535 495 — 1,828 — 483 — (87) 396 2,224 — 2,224 5,283 724 5,133 6,712 (4,828) 1,884 347 55 1,396 325 0 2,439 14 100 (209) 492 398 2,837 — 2,837 376 (361) 14 44,634 (9,079) 35,555 63 — 41 0 — (74) 9 — (6) 9 12 (62) — (62) 933 600 2,401 1,538 4 5,115 30 1,297 (223) 210 1,315 6,430 (430) 5,999 274 12 429 718 3 922 7 713 (7) (204) 509 1,431 (430) 1,001 Consoli- dation OMV Group (9,079) 35,555 — 9,079 35,555 — — — — — — (51) — — — — — (51) 12 (39) 933 600 2,401 1,538 4 5,065 30 1,297 (223) 210 1,315 6,379 (418) 5,961 3,989 621 1,325 12,217 1,251 429 241 28 — 21,730 2,624 6,887 — — — 21,730 2,624 6,887 1 Including intersegmental 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 144 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Other special items mainly consisted of non-cash val- uation effects related to the reassessment of reserves redetermination rights of the Yuzhno Russkoye field in Russia and the effects of deconsolidation of the Rus- sian entities. For further details see Note 2 – Account- ing policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. In addition, other special items consisted of temporary hedging effects and the release of a provision in the LNG business. In 2022 special items for unscheduled depreciation and write-ups were mainly driven by the revaluation of the fertilizer business, partly offset by the non-cash net impairment charges related to E&P assets. For further details on write-ups and impairments see Note 7 – De- preciation, amortization, impairments and write-ups. Special items for asset disposals were related to the sale of the German filling station business in May 2022 and the Borouge IPO on ADX (the Abu Dhabi Securi- ties Exchange). For further details see Note 6 – Other operating income and net income from equity-ac- counted investments and Note 16 – Equity-accounted investments. Information on geographical areas In EUR mn Sales to third parties 14,911 987 14,102 10,149 1,584 212 598 1,644 7,548 7,454 3,110 62,298 — 62,298 2022 Segment assets1 4,365 1,950 1,200 5,437 1,219 — 864 1,677 554 1,848 2,162 21,274 552 21,826 Equity- accounted investments2 External sales 16 45 31 — — — — 6,073 — 22 1,107 7,294 — 7,294 5,326 854 8,499 4,433 1,003 642 443 784 5,246 5,968 2,356 35,555 — 35,555 2021 Segment assets1 4,207 1,247 1,061 5,628 1,508 592 550 1,671 556 1,893 2,289 21,201 529 21,730 Equity- accounted investments2 14 24 31 — — 117 — 5,352 — 22 1,328 6,887 — 6,887 Austria Belgium Germany Romania Norway Russia3 New Zealand United Arab Emirates Rest of CEE4 Rest of Europe Rest of the world5 Allocated 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 Sales in 2022 relate to the period before the change in the consolidation method (for further details see Note 2 - Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’). 4 Including Turkey 5 Rest of the world: Principally Algeria, Argentina, Brazil, Canada, Chile, China, Colombia, Cuba, Egypt, India, Libya, Malaysia, Morocco, Mexico, Nigeria, Peru, Qatar, Saudi Arabia, South Africa, South Korea, Tunisia, United States of America and Yemen Not allocated assets contained goodwill in amount of EUR 342 mn (2021: EUR 322 mn) related to the cash- generating unit ‘Middle East and Africa’ and EUR 210 mn (2021: EUR 198 mn) related to the cash generating unit ‘SapuraOMV’ as these CGUs are oper- ating in more than one geographical area. In 2021, not allocated assets also included goodwill in the amount of EUR 9 mn related to cash generating unit ‘Refining West’. 145 OMV ANNUAL REPORT 2022 / 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 sources1 Sales revenues 2022 2021 53,827 18 58 8,396 62,298 34,792 15 65 683 35,555 1 The increase in revenues from other sources is mainly driven by commodity trading transactions. Revenues from contracts with customers In EUR mn Crude Oil, NGL and condensates Natural gas and LNG Fuel, heating oil and other refining products Chemical products Other goods and services1 Revenues from contracts with customers Crude Oil, NGL and condensates Natural gas and LNG Fuel, heating oil and other refining products Chemical products Other goods and services1 Revenues from contracts with customers Chemicals & Materials Refining & Marketing Exploration & Production Corporate & Other OMV Group — — — 12,160 126 12,286 — — — 10,347 160 10,507 860 2,389 16,390 54 2,625 22,318 1,071 915 10,460 56 1,278 13,780 2022 1,519 17,520 — — 168 19,208 2021 1,057 9,235 — — 199 10,491 — — — — 16 16 — — — — 13 13 2,379 19,909 16,390 12,214 2,935 53,827 2,128 10,150 10,460 10,403 1,651 34,792 1 Mainly retail non-oil business and power sales in Refining & Marketing 146 OMV ANNUAL REPORT 2022 / 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 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 2022 298 — — 766 579 1,644 2021 127 126 191 282 207 933 937 (68) 869 638 (38) 600 Foreign exchange gains from operating activities were mainly impacted in 2022 and 2021 by USD for- eign exchange rate development. 2021 was mainly impacted by the gains on the sale of Wisting oil filed in Norway of EUR 261 mn. Gains from fair value changes of trading invento- ries in 2021 referred to emissions certificates held for trading in Refining & Marketing and Chemicals & Mate- rials (Austria and Germany). Gains from fair value changes of other derivatives in 2021 were related to forward contracts of emissions certificates in Refining & Marketing and Chemicals & Materials (Austria and Germany). Gains on the disposal of businesses, subsidiaries, tangible and intangible assets related mostly to gains on the sale of the filling stations business in Germany and gains on the Borouge PLC IPO. On May 1, 2022 OMV closed the transaction to sell its filling station business in Germany to EG Group. The agreed sales price before customary closing adjust- ments amounted to EUR 485 mn and the transaction led to a gain of EUR 409 mn. For further details see Note 3 – Changes in group structure. On June 3, 2022, Borouge PLC was successfully listed on ADX, the Abu Dhabi Securities Exchange. This transaction led to a gain of EUR 341 mn including FX recycling effects. For further details see Note 16 – Eq- uity-accounted investments. Residual other operating income contained mostly compensation from the Romanian State for the sale of natural gas and electricity at capped prices as well as the subsidies supporting voluntary price reductions for the sale of diesel and gasoline. These measures were introduced via several Government Emergency Ordi- nances in order to mitigate the consequences of the energy crisis. In addition, residual other operating income in 2022 in- cluded insurance income of around EUR 200 mn re- lated to the incident at OMV Schwechat refinery in June 2022 and storage income related to Erdöl-Lagergesell- schaft m.b.H. of EUR 34 mn. 2021 contained mostly storage income related to Erdöl- Lagergesellschaft m.b.H. (EUR 43 mn) and insurance compensation related to 2020 process safety incident in Borealis cracker in Sweden (EUR 34 mn). Income from equity-accounted investments was mainly impacted by Abu Dhabi Oil Refining Company and Borouge investments. Expenses from equity-ac- counted investments were predominantly stemming from Bayport Polymers LLC. For further details see Note 16 – Equity-accounted investments. 147 OMV ANNUAL REPORT 2022 / 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 2022 2,474 (660) 670 2,484 2021 2,401 (4) 1,353 3,750 2022 670 183 853 2021 1,353 185 1,538 2022 2,474 — 2,200 274 (660) — (660) (0) 853 183 660 10 2021 2,401 — 2,144 257 (4) — (0) (3) 1,538 185 1,303 49 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 Impairments and write-ups in Chemicals & Materi- als In 2022, a write-up of EUR 266 mn was recognized re- lated to the the sale of the nitrogen business unit of Bo- realis group including fertilizer, melamine, and technical nitrogen products. The valuation was based on a bind- ing offer from AGROFERT, a.s. as of June 2, 2022 to reflect the fair value less cost to sell. The binding offer received from EuroChem in February 2022 was de- clined in March 2022 after assessing developments re- sulting from the war in Ukraine and related sanctions. 148 In 2021, impairment losses of EUR 444 mn were recog- nized for the nitrogen business unit of Borealis Group to reflect the fair value less cost to sell as of Decem- ber 31, 2021. The valuation was based on the binding offer from EuroChem for the acquisition of the disposal group received on February 2, 2022. OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Impairments and write-ups in Refining & Marketing In 2022, there was a net write-up of EUR 67 mn of the ADNOC Refining and Trading CGU, mainly related to the impairment testing triggered by the positive near- term margin outlook for refining margins in Middle East. In 2021, the deterioration in the margin 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 due to lower refin- ing margins and production volumes in ADNOC Refin- ing. Impairments and write-ups in Exploration & Pro- duction In Q4/22, OMV updated its commodity price assump- tions. Whereas the European gas prices increased for the near and long-term, the expected production vol- ume of some oil and gas assets in Romania decreased due to higher expected natural decline rates and oper- ating costs increased. These effects led to pre-tax im- pairments of EUR 117 mn (net of write-ups) of some development and production oil and gas assets, related to assets in Romania, New Zealand and Austria. For more details on price assumptions see Note 2 – Ac- counting policies, judgements and estimates. Exploration & Production impairments and write-ups based on impairment testing in Q4/22 In EUR mn Country New Zealand Romania Austria Pre-tax impair- ments net of write-ups Value in use of assets impacted (173) 367 (78) 881 1,910 1,090 After-tax discount rate 8.93% 10.28% 8.94% In 2022 reported impairment losses attributable to ex- ploration and appraisal (EUR 183 mn) were mainly re- lated to unsuccessful exploration wells and exploration licenses in Norway, New Zealand, Romania and Aus- tralia. Additionally, impairments in 2022 included mainly un- successful workovers, obsolete or replaced assets in Romania (EUR 84 mn) and a production license in Libya (EUR 70 mn). In 2021 based on impairment testing EUR 111 mn of exploration and appraisal assets were impaired, mainly related to assets in Norway, New Zealand, Mexico and Tunisia. Furthermore, impairment losses in 2021 in- cluded impairments of EUR 74 mn mainly related to un- successfull exploration wells and exploration licenses in Australia, Norway, Romania and New Zealand. Other impairments in 2021 were mainly related to un- successful workovers and obsolete or replaced assets in Romania (EUR 87 mn). The planned sale of OMVs relevant operating entities in Yemen in Q2/22 led to the reclassification to “held for sale”, which triggered a pre-tax impairment of EUR 48 mn. For more details please see Note 20 – As- sets and liabilities held for sale. For further information related to significant judgements and assumptions with regards to impairment testing re- fer to Note 2 – Accounting Policies, judgements and es- timates. 149 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 8 Exploration expenses The following financial information represents the amounts included in the Group totals relating to explo- ration 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 2022 2021 183 67 250 878 103 149 185 95 280 967 85 (169) 1 Overall amount reported in 2021 represents a net cash inflow due to the sale of OMV’s 25% stake in the Wisting oil field in Norway leading to a cash inflow of EUR 290 mn. 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 2022 268 685 432 43 3 65 142 1,639 2021 121 48 317 9 22 58 113 688 Foreign exchange losses from operating activities in 2022 and 2021 were mainly impacted by USD for- eign exchange rate development. Losses on disposals of businesses, subsidiaries, tangible and intangible assets contained mostly losses from deconsolidation of the Russian entities in the amount of EUR 658 mn. For further details see Note 2 – Accounting policies, judgements and esti- mates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. Losses from fair value changes of financial assets contained losses related to asset from reserves rede- termination rights with respect to the acquisition of in- terests in the Yuzhno Russkoye field. For further details see Note 2 – Accounting policies, judgements and esti- mates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. In 2021, these losses related to fair value adjustments of asset from reserves redetermination rights with respect to Yuzhno Russkoye field (EUR 256 mn) and financial assets from the reassessment of contingent considera- tion from the divestment of the 30% stake in Rosebank and OMV (U.K.) Limited (EUR 61 mn). Net impairment losses on financial assets meas- ured at amortized cost were mainly related to impair- ments of receivables in Tunisia amounting to EUR 20 mn (2021: EUR 9 mn). Further information on personnel reduction schemes is included in Note 10 – Personnel expenses. Residual other operating expenses contained ex- penses relating to various digitalization initiatives amounting to EUR 40 mn (2021: EUR 45 mn) as well as storage expenses related to Erdöl-Lagergesellschaft m.b.H. in amount of EUR 45 mn (2021: EUR 51 mn). 150 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 10 Personnel expenses Personnel expenses In EUR mn Wages and salaries Costs of defined benefit plans Costs of defined contribution plans Personnel reduction schemes Other employee benefits Taxes and social contribution Personnel expenses 2022 1,314 30 77 3 275 309 2,009 2021 1,273 28 62 22 267 302 1,953 Higher net expenses for personnel reduction schemes in 2021 were mainly related to restructuring expenses from outsourcing activities in Romania. benefits. For further information please refer to Note 32 – Share-based payments. Share-based payments were part of other employee Additional details on defined benefit plans are in- cluded in Note 23 – Provisions. 11 Net financial result Interest income In EUR mn Cash & cash equivalents Discounted receivables Other financial and non-financial assets Loans Interest income 2022 2021 193 5 20 51 269 27 5 9 120 161 Interest income on cash and cash equivalents in 2022 was primarily related to interest income on RON, USD and EUR bank deposits. Interest income from loans included EUR 17 mn (2021: EUR 92 mn) related to the Nord Stream 2 fi- nancing agreement and EUR 32 mn (2021: EUR 27 mn) related to loan agreement towards Bay- port Polymers LLC. For further details see Note 18 – Fi- nancial assets. 151 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 schemes and other employee benefits Provisions for pensions and severance payments Provisions for onerous contracts Other Interest expenses, gross Capitalized borrowing costs Interest expenses 2022 2021 120 30 47 196 3 14 14 11 435 (18) 417 142 26 26 114 2 12 17 8 348 (14) 334 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 2022 were im- pacted by the negative reassessment effects of receiv- ables from the Romanian State amounting to EUR 65 mn (2021: EUR 41 mn). The remaining part of interest expenses on provisions for decommissioning and restoration obligations related entirely to unwinding effects. Both effects increased in 2022 due to the in- crease in discount rates. The interest expenses on pension provisions were netted against interest income on pension plan assets which amounted to EUR 6 mn (2021: 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 construc- tion of the ReOil and Bio-Oil plant in Austria. 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 2022 (10,857) 10,811 (46) 95 (1,393) (1,345) 2021 (9,348) 9,315 (33) 9 (17) (40) In 2022 net foreign exchange gains were predomi- nantly impacted by USD and were partly offset by NOK. The position Other was mainly related to impairment of the Nord Stream 2 loan (EUR 1,004 mn) and fair value adjustment of investments in Russia (EUR 370 mn). For further details see Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. 152 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 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 Changes in deferred taxes1 In EUR mn Deferred taxes January 1 Deferred taxes December 31 Changes in deferred taxes Deferred taxes accounted for in OCI or directly in equity Changes in consolidated Group, exchange differences and other changes2 Deferred tax expense 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 tax balances reclassified to held for sale. 2 In 2022 these effects were mainly related to deconsolidation of JSC GAZPROM YRGM Development (EUR 116 mn). 2022 10,765 5,505 37 85 5,590 2021 4,870 2,056 6 10 2,066 2022 2021 30 — 30 42 (8) 33 2022 2021 (87) (78) 9 (38) 132 (85) (96) (327) 9 329 (57) (87) (30) (42) 22 (10) 3 88 (40) (61) 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. 153 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Tax rate reconciliation Theoretical taxes on income based on Austrian income tax rate 2,691 25.0 1,218 2022 2021 In EUR mn In % In EUR mn Tax effect of: Differing foreign tax rates Non-deductible expenses Non-taxable income and tax incentives Income and expenses related to at-equity accounted investments Change in tax rate Permanent effects within tax loss carryforwards Tax write-downs and write-ups on investments in subsidiaries Change in valuation allowance for deferred taxes Taxes related to previous years Other Total taxes on income and profit 2,755 612 (160) (414) 96 (9) (430) 327 60 61 5,590 25.6 5.7 (1.5) (3.8) 0.9 (0.1) (4.0) 3.0 0.6 0.6 51.9 1,270 217 (346) (200) (3) 5 32 (88) 32 (71) 2,066 In % 25.0 26.1 4.4 (7.1) (4.1) (0.1) 0.1 0.7 (1.8) 0.7 (1.4) 42.4 Differing foreign tax rates effects in 2022 mostly re- late to subsidiaries operating in tax jurisdictions with high corporate income tax rates (Norway, United Arab Emirates and Libya). Increase in the effects related to differing foreign tax rates as compared to 2021 was mostly due to significant growth in profit before tax of those subsidiaries. Effects related to the change in tax rate mainly re- lated to decrease in deferred tax rate for Austrian enti- ties. Based on the Eco Social Tax Reform Act which was adopted by the National Parliament of Austria in January 2022, corporate income tax rate will be de- creased from 25% to 24% in 2023 and further to 23% from 2024 onward. Non-deductible expenses contained mainly losses from fair value changes of financial assets, effects re- lated to deconsolidation of JSC GAZPROM YRGM De- velopment and permanent effects from depreciation, depletion and amortization. Tax write-downs and write-ups on investments in subsidiaries in 2022 were mainly related to the tax im- pairment of the investment in JSC GAZPROM YRGM Development. Non-taxable income and tax incentives in 2022 mainly related to non-taxble gains on the sale of the fill- ing station business in Germany. 2021 was predomi- nantly impacted by the gains on the sale of Wisting field and tax incentives in Norway. Income and expenses related to at-equity ac- counted investments effects in 2022 were mainly re- lated to share of profit from equity-accounted invest- ments, gains from the sucessful listing of Borouge PLC on ADX (the Abu Dhabi Securities Exchange) and write -up of investment in ADNOC Refining. 2021 was mainly impacted by the share of profit from equity-accounted investments and ADNOC Refining impairment. For fur- ther details see Note 16 – Equity-accounted invest- ments. Change in valuation allowance for deferred taxes was predominately impacted by the increase in valua- tion allowances on deferred tax assets in Austria. For further details see Note 25 – Deferred Taxes. Taxes related to previous years in 2022 were mainly related to the effects on the sale of the filling stations business in Germany and effects related to differences between functional currency and tax currency of certain subsidiaries. Other effects in 2022 included EU solidarity contribu- tion in the amount EUR 90 mn. As a direct conse- quence to the energy crisis in Europe, regulatory measures like price caps, subsidy schemes and the EU solidarity contribution are being implemented in some of the countries the OMV Group is active in. The Coun- cil Regulation (EU) 2022/1854 introduced a solidarity contribution, which was transposed into the local legis- lation of the Member States by the end of 2022 and is 154 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS applicable for 2022 and/or 2023. It represents a contri- bution for surplus profits of companies operating in the crude petroleum, natural gas, coal and refinery sectors and is calculated based on the taxable profits of those companies, as determined under national tax rules, which are above a 20% increase of the average taxable profits generated in the period 2018 to 2021. Based on the legislation in Austria, it is expected that two Austrian entities of OMV Group will be subject to the solidarity contribution (Energy Crisis Contribution) for the second half of 2022. Romania transposed this regulation via GEO (Government Emergency Ordi- nance) 186/2022, approved and published in Decem- ber 2022. This GEO will subsequently follow the Parlia- mentary approval process, thus may be subject to changes. Based on OMV Petrom 2022 financials and the provisions of this Emergency Ordinance, OMV Petrom is not subject to the EU solidarity contribution for the fiscal year 2022, having less than 75% of its turnover in the defined areas: extraction of crude, ex- traction of natural gas, extraction of coal and refining business. Also, for OMV Group entities in Germany no solidarity contribution is expected for 2022. 13 Earnings Per Share Earnings Per Share (EPS) In EUR mn Earnings attributable to stockholders of the parent in EUR mn 2022 Weighted average number of shares out- standing Basic Diluted 3,634 3,634 326,897,763 327,136,798 Earnings attributable to stockholders of the parent in EUR mn 2021 Weighted average number of shares out- standing 2,093 2,093 326,854,031 327,272,727 EPS in EUR 11.12 11.11 EPS in EUR 6.40 6.40 The calculation of diluted Earnings per Share took into account the weighted average number of shares in is- sue following the conversion of all potentially diluting ordinary shares. This included 239,035 (2021: 421,342) contingently issuable bonus shares related to Long Term Incentive Plans and the Equity Deferral. 155 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Notes to the Statement of Financial Position 14 Intangible assets Intangible assets In EUR mn Concessions, software, licenses, rights Development costs Oil and gas assets with unproved reserves 2022 Goodwill Total 2,199 (236) (662) 31 5 (0) (6) 1,330 979 (85) (234) 108 6 (0) (1) (5) 769 1,220 562 2,120 53 61 9 (23) (22) 2,199 850 11 162 0 0 (22) (22) 979 1,271 1,220 464 — — 110 — — (2) 572 52 (0) — 31 3 — — (1) 86 411 486 389 0 61 14 — — 464 8 — 29 12 3 — — 52 381 411 1,876 36 (36) 172 (141) 27 (122) 1,811 909 25 (36) 0 179 (24) 1 (121) 934 967 878 2021 2,195 58 134 (336) (74) (101) 1,876 934 33 0 184 (147) — (95) 909 1,260 967 562 28 — — — — (6) 585 — — — — — — — — — 562 585 531 31 — — — — 562 — — — — — — — — 531 562 5,101 (172) (699) 313 (136) 27 (136) 4,298 1,940 (60) (270) 140 189 (24) (0) (127) 1,788 3,161 2,510 5,235 142 257 (313) (96) (123) 5,101 1,792 44 191 196 (143) (22) (117) 1,940 3,443 3,161 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 Changes in consolidated Group 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 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 31 156 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Changes in consolidated group in 2022 of EUR 428 mn were related to the deconsolidation of JSC GAZPROM YRGM Development. For details see Note 3 – Changes in group structure and Note 2 – Ac- counting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related sig- nificant estimates and assumptions’. Additions to intangible assets in 2022 included EUR 37 mn (2021: EUR 33 mn) additions for internally generated assets mainly related to capitalized develop- ment costs. The transfers were mainly related to the shift of Berling project (Norway) to development assets following the fi- nal investment decision. Intangible assets with a total carrying amount of EUR 27 mn were reclassified back from assets held for sale to intangible assets, mainly related to OMV’s share in the Maari field in New Zealand. For details see Note 20 – Assets and liabilities held for sale. In 2021 the intangible assets transferred to assets held for sale amounted to EUR 74 mn, mainly related to OMV’s 25% stake in the Norwegian oil field Wisting, which was sold in Q4/21. Further details on impairments and write-ups can be found in Note 7 – Depreciation, amortization, impair- ments and write-ups. 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 2022 2021 342 210 552 — 7 26 33 322 198 520 9 7 26 42 585 562 In 2022, the goodwill allocated to Exploration & Produc- tion increased due to favorable currency translation dif- ferences. 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 10.47% (2021: 9.44%) and for goodwill allocated to SapuraOMV an after-tax discount rate of 9.07% (2021: 8.00%) was used. An after-tax discount rate of 12.67% (2021: 12.73%) re- lated to the goodwill allocated to Middle East and Africa would lead to zero headroom. The increase of 1 per- centage in the after-tax discount rate for the goodwill al- located to SapuraOMV would led to an after-tax impair- ment of EUR 38 mn. For details regarding changes in price assumptions including the impact on goodwill re- fer to Note 2 – Accounting policies, judgements and es- timates. For details on contractual obligations for the acquisition of intangible assets refer to Note 15 – Property, plant and equipment. 157 OMV ANNUAL REPORT 2022 / 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 Plant and machinery Other fixtures, fittings and equipment Assets under construction Total 2022 3,398 25,042 11,254 1,989 1,511 43,195 (17) 111 174 1,244 (4) 1,268 (20) 3,352 (169) 678 (21) 539 (59) (220) (3) 51 0 88 (12) (68) (74) 127 236 (200) — (690) (10) (13) 26,549 12,002 2,043 2,061 15,451 6,085 18 1,390 595 22 241 (195) (317) 17,205 9,591 9,344 (106) 671 8 (8) (55) (211) (7) 6,378 5,169 5,624 1,383 (3) 144 2 6 (9) (66) — 1,457 606 586 8 0 — 8 2 (1) (9) (2) 6 1,503 2,055 4 69 (18) (35) 3,512 1,698 (8) 138 6 1 (6) (24) (0) 1,805 1,700 1,706 (90) 133 136 (537) 46,168 24,626 (98) 2,342 619 24 170 (505) (327) 26,851 18,569 19,317 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 Write-ups December 31 Carrying amount January 1 Carrying amount December 31 158 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Property, plant and equipment including right-of-use assets In EUR mn Oil and gas assets with proved reserves Land and buildings Plant and machinery Other fixtures, fittings and equipment Assets under construction 3,584 (2) 85 2 39 (282) (28) 3,398 1,669 0 145 0 (2) (96) (17) 1,698 1,915 1,700 23,445 660 1,047 (335) 334 (1) (107) 25,042 13,695 364 1,255 93 148 0 (105) 15,451 9,750 9,591 2021 11,483 1,967 (50) 172 30 320 (493) (208) 11,254 5,640 (20) 674 41 (3) (49) (200) 6,085 5,843 5,169 (5) 69 — 91 (51) (84) 1,989 1,346 (3) 143 1 4 (28) (80) 1,383 622 606 1,081 (1) 994 — (468) (91) (4) 1,511 7 0 — 1 — (0) (0) 8 1,073 1,503 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 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 The transfers were mainly related to the shift of Berling project (Norway) from intangible assets to development assets following the final investment decision. business in Germany and the planned sale of Borealis’ share of Rosier fertilizer business. For more details see Note 20 – Assets and liabilities held for sale. Property, plant and equipment with a total carrying amount of EUR 34 mn (2021: EUR 745 mn) were trans- ferred to assets held for sale, mainly related to OMV’s relevant operating entities in Yemen, the Avanti retail 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 2022 326 1,410 1,736 2021 326 1,149 1,474 In 2022 the contractual commitments for acquisitions of fixed assets were mainly related to activities in Explora- tion & Production and Chemicals & Materials. The in- crease of contractual obligations in 2022 was mainly re- lated to commitments in Norway and Romania. OMV as a lessee The increase in right of use assets is mainly driven by new leasing contracts for storage infrastructure related to the propane dehydrogenation plant (PDH) in Kallo, Belgium. 159 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Additionally, right-of-use assets included mainly leases of filling station sites and buildings, other land, vessels, pipelines and office buildings. In addition, OMV leases mainly a hydrogen plant at Petrobrazi refinery in Roma- nia, technical equipment and vehicles. assets held for sale, mainly related to the planned sale of the Avanti retail business in Germany and are repre- sented in the line other movements. Leases not yet commenced in 2022 but committed amounted to EUR 10 mn (2021: EUR 26 mn). Right-of-use assets with a total carrying amount of EUR 7 mn (2021: EUR 53 mn) were transferred to Right-of-use assets recognized under IFRS 16 In EUR mn Land and buildings Plant and machinery Other fixtures, fittings and equipment 555 102 (63) (13) 581 593 72 (67) (43) 555 2022 42 498 (35) (1) 504 2021 48 18 (17) (7) 42 174 40 (64) (2) 149 194 57 (62) (15) 174 Total 771 640 (162) (16) 1,233 836 147 (146) (66) 771 2022 2021 37 10 35 11 30 26 January 1 Additions Depreciation Other movements December 31 January 1 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. 160 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 16 Equity-accounted investments Material associates and joint ventures Following the Initial Public Offering (IPO) on June 3, 2022 the shareholding in Borouge PLC (PLC) has changed to Borealis owning a 36% stake in Borouge PLC and Abu Dhabi National Oil Company owning 54% respectively. The Borouge 4 project, which is currently being executed, has not been part of the offering. It is intended to recontribute Borouge 4 at a later point in time. PLC is registered in Abu Dhabi and is the holding company for its 100% interest in Abu Dhabi Polymers Company Limited (Borouge) (ADP) and its 84.75% interest in Borouge Pte. Ltd. (PTE). Before the IPO OMV held a 40% stake in ADP, which also included the Borouge 4 project, and a 50% stake in PTE. In 2022, OMV’s share in PTE changed, following the IPO, from a 50% (direct) share in 2021 to a 45.76% share (15.25% direct share and 30.51% indirect share through PLC). For the impact on the consolidated in- come and cash flow statement refer to Note 3 – Changes in group structure. As of December 31, 2022, the fair value of the Group’s interest in PLC, which is listed on the Abu Dhabi Secu- rities Exchange of United Arab Emirates (UAE), was EUR 6,989 mn, based on the quoted market price available on the stock exchange of UAE. The corre- sponding book value of PLC was EUR 3,944 mn as of December 31, 2022. The “Borouge investments” (representing total OMV share in PLC, ADP, PTE) are a leading provider of innovative, value-creating plastic solutions for energy, infrastructure, automotive, healthcare and agriculture industries as well as advanced packaging applications and also responsible for marketing and sales of the products produced. Due to the restructuring of the Borouge entities triggered by the IPO in 2022 the previous control assessment was revised. Given the fact that no Board Reserved Matters, which are affecting all relevant activities, can be decided without an affirmative vote of Borealis, OMV has joint control over the three investments. Furthermore, it was concluded that already in previous years joint control was exercised and therefore the presentation within this Note was adjusted accordingly (included in below tables as ‘joint venture’ instead of ‘associate’). Bayport Polymers LLC, registered in Pasadena (incorporated in Wilmington), successfully started its operations of the new one million ton-per-year ethane cracker at the Port Arthur Refinery and is currently building a polyethylene unit in Pasadena with the target to deliver a broad range of products to meet the growing global demand of sustainable and high energy efficient plastic products. As OMV has joint control over Bayport Polymers LLC (50/50 share split) and rights to the net assets, it therefore accounts the company as joint venture. OMV also holds a 15% (2021: 15%) interest in Abu Dhabi Oil Refining Company, registered in Abu Dhabi, which runs a refinery hub with integrated petrochemicals. According to the contractual agreement between the shareholders, OMV has strong participation rights which represent significant influence as per IAS 28 definition. In 2022, a net write-up of EUR 67 mn was recognized in ADNOC Refining and Trading CGU (in 2021 impairment of EUR 669 mn). For further details please refer to Note 7 – Depreciation, amortization, impairments and write-ups. 161 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS The tables below contain summarized financial infor- mation for the material associates and joint ventures. Statement of comprehensive income In EUR mn 2022 Joint Ventures Associate 2021 Joint Ventures Associate Abu Dhabi Oil Refining Company Borouge investments Bayport Polymers LLC Abu Dhabi Oil Refining Company Abu Dhabi Polymers Company Limited (Borouge)1 Bayport Polymers LLC Sales revenue Net income for the year Other comprehensive income Total comprehensive income Group’s share of comprehensive income 36,241 2,054 2 2,056 12,027 1,055 20 1,075 601 (116) — (116) 21,760 (233) — (233) 308 407 (58) (35) 4,630 1,139 1 1,140 456 588 73 — 73 36 1 Included 40% stake in the Borouge 4 project, which was transferred in 2022 to the newly founded company Borouge 4 LLC (included in 2022 in individually im- material joint ventures) 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 2022 Joint Ventures Associate Associate Abu Dhabi Oil Refining Company Borouge investments Bayport Polymers LLC Abu Dhabi Oil Refining Company 17,084 3,888 6,363 628 13,982 2,097 — (573) 1,524 6,901 3,924 4,107 2,021 4,698 1,704 2,058 268 4,030 4,002 194 2,635 166 1,396 698 — (24) 674 17,905 2,979 6,100 1,093 13,691 2,054 — (873) 1,181 2021 Joint Ventures Abu Dhabi Polymers Company Limited (Borouge)1 Bayport Polymers LLC 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 1 Included 40% stake in the Borouge 4 project, which was transferred in 2022 to the newly founded Borouge 4 LLC (included in 2022 in individually immaterial joint ventures) 162 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Carrying amount reconciliation In EUR mn 2022 Joint Ventures Associate 2021 Joint Ventures Associate Abu Dhabi Oil Refining Company Borouge investments Bayport Polymers LLC Abu Dhabi Oil Refining Company Abu Dhabi Polymers Company Limited (Borouge)1 Bayport Polymers LLC January 1 Currency translation differences Transfer2 Net income Other comprehensive income Dividends distributed Write-up (Impairment) Other changes December 31 1,181 83 — 308 0 (116) 67 — 1,524 4,061 248 337 400 7 (592) — (430)3 4,030 688 44 — (58) — — — — 674 1,747 138 — (35) — — (669) — 1,181 5,062 419 — 456 0 (1,876) — — 4,061 620 53 — 36 — (21) — — 688 1 Included 40% stake in the Borouge 4 project, which was transferred in 2022 to newly founded Borouge 4 LLC (included in 2022 in individually immaterial joint ventures) 2 Mainly comprises the transfer of the direct share in PTE, which is part of “Borouge investments” and therefore included in material joint ventures from 2022 on- wards 3 Refers to the partial disposal of ADP and PTE as a result of ADX listing in 2022. For details refer to the description above. Individually immaterial associates and joint ven- tures OMV holds 55.6% (2021: 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%, 2021: 25%), registered in Abu Dhabi, and Pak-Arab Refinery Limited (PARCO; indirect interest of OMV amounts to 10%, 2021: 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. Since March 2022, OMV has 40% interest through Bo- realis in Borouge 4 LLC, registered in Abu Dhabi. The company executes the ongoing Borouge 4 project by developing an ethane-based steam cracker, two poly- olefin plants, a 1-Hexene unit, a cross-linked polyeth- ylene plant (XPLE) and an in-depth study for carbon capture unit. It was previously part of the 40% direct in- terest in ADP but scoped out of the IPO in June 2022, as described above, and therefore transferred to this newly founded company. However, it is intended to re- contribute Borouge 4 at a later point. Given the fact that no Board Reserved Matters, which are affecting all rel- evant activities can be decided without an affirmative vote by Borealis, OMV has joint control over Borouge 4 LLC and accounts for it as joint venture. In June 2021, OMV subscribed through Borealis to a new share issue, thus acquiring 10% in Renasci N.V., a company incorporated in Belgium. On November 9, 2022 as a result of the debt conversion into newly is- sued shares, OMV has increased its stake in Renasci N.V. from 10% to 27.42%. The nominal amount of the loan converted was EUR 24 mn. Renasci N.V. is princi- pally engaged in the development of the proprietary processes and know-how about various technologies 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. Therefore, the investment is accounted for as an associated company. 163 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Furthermore, OMV has a 10% interest (2021: 10%) in Pearl Petroleum Company Limited, registered in Road Town, British Virgin Islands, which is involved in explo- ration and production of hydrocarbons in the Kurdistan Region of Iraq. According to the contractual agreement between OMV and Pearl Petroleum Company Limited (Pearl), OMV has significant influence within the mean- ing 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%. 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 share1 In EUR mn Sales revenue Net income for the year Other comprehensive income Total comprehensive income 2022 2021 Associates Joint ventures Associates Joint ventures 5,889 189 0 190 461 30 (2) 27 3,314 86 — 86 5,516 58 1 58 1 The presentation within this table was adjusted for 2021 due to control re-assessment for PTE: included as ‘joint venture’ instead of ‘associate’ Carrying amount reconciliation for individually immaterial associates and joint ventures1 In EUR mn January 1 Currency translation differences Changes in consolidated group3 Transfer4 Additions and other changes Net income Other comprehensive income Disposals and other changes Dividends distributed December 31 2022 Associates2 Joint ventures 416 541 (8) (89) — 24 189 0 (1) (88) 568 (13) — (337) 4095 30 (2) — (5) 498 2021 Associates2 Joint ventures 501 33 25 — — 86 — (55) (50) 541 391 24 (15) — — 58 1 — (42) 416 1 The presentation within this table was adjusted for 2021 due to control re-assessment for PTE: included as ‘joint venture’ instead of ‘associate’ 2 Includes associated companies accounted at-cost 3 Changes in consolidated group represent the deconsolidation of OJSC Severneftegazprom. For further details refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. 4 Mainly comprises the transfer of the direct share in PTE, which is part of “Borouge investments” and therefore included in material joint ventures from 2022 on- wards (for details refer to the description above). 5 Refers mainly to the capital contribution to Borouge 4 LLC 164 OMV ANNUAL REPORT 2022 / 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 2022 824 936 677 231 1,112 1,053 4,834 2021 673 204 537 146 645 945 3,150 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 petrochemical products In 2022 the line ‘write-downs to net realizable value and write-offs of inventories’ was mainly related to gas in storage. 2022 2021 34,811 4,047 466 (25) 39,298 16,610 3,615 41 (9) 20,257 165 OMV ANNUAL REPORT 2022 / 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 136 — 136 24 26 — 10 2,867 — — 2,927 3,063 258 — 258 1 30 — — 4,220 — 432 4,683 4,941 — — — 19 — — 370 — — — 389 389 — — — 16 — — 398 — — — 415 415 2022 3,351 735 4,086 — — 52 — — 711 1,850 2,612 6,699 2021 3,671 589 4,260 — — 63 — — 2,015 1,703 3,781 8,041 3,487 735 4,222 42 26 52 380 2,867 711 1,850 5,928 10,150 3,929 589 4,518 17 30 63 398 4,220 2,015 2,135 8,879 13,397 3,487 735 4,222 — — 32 263 2,114 82 1,437 3,929 8,151 3,929 589 4,518 — — 24 312 3,425 115 1,272 5,148 9,667 — — — 42 26 20 116 753 628 412 1,999 1,999 — — — 17 30 40 87 795 1,900 862 3,730 3,730 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 of December 31, 2022, was EUR 3,063 mn (2021: EUR 4,941 mn). These mainly consisted of financial assets held for trading. expenses which reduced the fair value of this position to zero. For further details refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant es- timates and assumptions’. In 2021 it included also an acquired contractual position towards Gazprom with regard to the reserves redeter- mination in amount of EUR 432 mn in connection with the acquisition of interests in the Yuzhno Russkoye field. As OMV no longer expects the contractual posi- tion towards Gazprom to be recoverable, a fair value loss of EUR 432 mn was recognized in other operating 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. The total outstanding amount of EUR 1 bn including accrued interest as of March 5, 2022, was fully impaired, negatively impacting 166 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS the financial result. For further details refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related sig- nificant estimates and assumptions’. The position loans in 2022 included drawdowns and the related accrued interests under a member loan agreement towards Bayport Polymers LLC in amount of EUR 657 mn (2021: EUR 987 mn). During 2022 the loan was partially repaid in amount of EUR 602 mn, partly offset by additional drawdowns made amounting to EUR 227 mn (2021: EUR 183 mn). For further de- tails see Note 35 – Related Parties as well as Note 28 – Risk Management. Other sundry financial assets included expenditure recoverable from Romanian State amounting to EUR 326 mn (2021: EUR 372 mn) related to obliga- tions for decommissioning and environmental costs in OMV Petrom SA. The receivables consisted of EUR 318 mn (2021: EUR 352 mn) for costs relating to decommissioning and EUR 8 mn (2021: EUR 20 mn) for costs relating to environmental cleanup. On March 7, 2017, OMV Aktiengesellschaft, as party in the OMV Petrom privatization agreement, initiated arbi- tration proceedings against the Romanian Ministry of Environment, in accordance with the International Chamber of Commerce Rules, regarding certain claims unpaid by this ministry for costs incurred by OMV Petrom relating to well decommissioning and environ- mental remediation works, amounting to EUR 58 mn. On July 9, 2020, the Arbitral Tribunal issued the Final Award on the arbitration and requested the Romanian Ministry of Environment to reimburse to OMV Petrom almost entirely the amount claimed and related interest. The amount of EUR 58 mn representing the principal and the amount of EUR 17 mn representing default in- terest were collected in 2021 and 2022, respectively. On October 2, 2020, OMV Aktiengesellschaft, as party in the privatization agreement, initiated arbitration pro- ceedings against the Romanian Ministry of Environ- ment in accordance with the International Chamber of Commerce Rules, regarding certain claims unpaid by the Romanian Ministry of Environment in relation to well decommissioning and environmental restoration obligations amounting to EUR 31 mn. On August 30, 2022, the Arbitral Tribunal issued the Final Award on the arbitration and requested the Ministry of Environ- ment to reimburse to OMV Petrom the amount of EUR 31 mn and related interest. In October 2022, the Ministry of Environment challenged the award in front of Paris Court of Appeal, procedure which is ongoing as of December 31, 2022. Furthermore, in Q4/22, OMV Aktiengesellschaft, as party in the privatization agreement, initiated two other arbitration proceedings against the Romanian Ministry of Environment, in accordance with the International Chamber of Commerce Rules, regarding certain claims unpaid by this ministry in relation to well decommission- ing and environmental remediation works amounting to EUR 47 mn. As of December 31, 2022, the arbitration procedure is ongoing. Moreover, in 2022 this position included receivables re- lated to insurance proceeds of around EUR 200 mn with regards to the incident at the crude distillation unit at the Schwechat refinery in June 2022. Additionally, other sundry financial assets contained re- ceivables towards partners in the Exploration & Produc- tion business as well as seller participation notes and complementary notes in Carnuntum DAC (see Note 36 – Unconsolidated structured entities – for further de- tails). 167 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Equity investments measured at FVOCI In EUR mn Investment Fair value 2022 Fair value adjustment through OCI Dividend recognized as income Fair value 2021 Fair value adjustment through OCI Dividend recognized as income APK Pensionskasse AG Wiener Börse AG FSH Flughafen-Schwechat-Hydranten-Gesell- schaft GmbH & Co OG WAV Wärme Austria VertriebsgmbH Bockatech Ltd. Oil Insurance Limited Other Equity investments measured at FVOCI 2 7 2 2 3 0 2 19 (0) 3 — — — — — 2 0 1 0 0 — 4 0 6 2 4 2 2 3 0 2 16 (0) (0) — — — — — (1) 0 1 — 0 — 4 4 9 Probability of default Risk Class 1 Risk Class 2 Risk Class 3 Risk Class 41 Risk Class 51 Risk Class 6 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 2022 2021 0.13% 0.44% 1.18% 8.52% 29.54% 100.00% 0.07% 0.24% 1.21% 10.37% 10.37% 100.00% 1 In 2022 the previous Risk Class 4 with the equivalent external ratings B+, B, B- and CCC/C was split into two different risk classes (Risk Class 4 and 5) in order to provide a more transparent view on the credit risk position of the group. Former Risk Class 5 became the new Risk Class 6. For further details on the credit risk management see Note 28 – Risk Management. Impairments 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 Changes in consolidated group December 31 Net remeasurement of expected credit losses was mainly related to the trade receivables from contracts with customers. 168 2022 2021 51 (4) 23 0 (4) (1) 65 61 (2) (6) (0) (1) — 51 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Credit quality of trade receivables In EUR mn Risk Class 1 Risk Class 2 Risk Class 3 Risk Class 4 Risk Class 5 Risk Class 6 Total gross carrying amount Expected credit loss Total 2022 1,457 1,239 927 333 153 42 4,151 (65) 4,086 Impairments of other financial assets at amortized cost In EUR mn 12-month ECL Lifetime ECL not credit impaired Lifetime ECL cre- dit impaired January 1 Amounts written off Net remeasurement of expected credit losses1 Currency translation differences December 312 January 1 Amounts written off Net remeasurement of expected credit losses Currency translation differences Reclassification to assets held for sale December 312 9 0 2 0 10 7 (0) 2 0 — 9 2022 31 — 12 2 44 2021 26 — 0 4 — 31 211 (5) 1,100 4 1,311 202 (2) 13 1 (2) 211 2021 1,653 1,133 944 375 163 43 4,311 (51) 4,260 Total 251 (5) 1,114 6 1,365 235 (2) 15 5 (2) 251 1 “Lifetime ECL credit impaired” includes fully impaired gross carrying amount of loan receivables including accrued interests related to the financing agreements for the Nord Stream 2 pipeline project in amount of EUR 1.1 bn. 2 “12-month ECL” included an amount of EUR 1 mn (2021: EUR 1 mn) and “Lifetime ECL credit impaired” an amount of EUR 9 mn (2021: EUR 10 mn) related to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. 169 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 52 Risk Class 6 Total gross carrying amount Expected credit loss3 Total 1,014 702 826 4 35 0 2,580 (10) 2,570 2022 86 — — — — — 86 80 9 2 — 1,112 109 1,180 710 827 4 1,147 109 1,311 3,977 (44) 42 (1,311) — (1,365) 2,612 2,069 1,464 209 9 5 0 3,756 (9) 3,747 2021 65 — — — — — 65 (31) 34 68 10 2 — 22 111 211 (211) — Total 2,202 1,473 210 9 27 111 4,032 (251) 3,781 1 “12-month ECL” included an amount of EUR 327 mn (2021: EUR 373 mn) and “Lifetime ECL credit impaired” an amount of EUR 9 mn (2021: EUR 10 mn) re- lated to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. 2 “Lifetime ECL credit impaired” includes fully impaired gross carrying amount of loan receivables including accrued interests related to the financing agreements for the Nord Stream 2 pipeline project in amount of EUR 1.1 bn. 3 “12-month ECL” included an amount of EUR 1 mn (2021: EUR 1 mn) and “Lifetime ECL credit impaired” an amount of EUR 9 mn (2021: EUR 10 mn) related to expenditure recoverable from Romanian State, which are outside the scope of IFRS 9. 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. 2022 2021 Short-term Long-term Short-term Long-term 84 72 194 395 — 223 36 194 1,198 15 14 16 40 8 — — 22 115 60 83 107 185 8 58 99 21 621 18 14 22 39 8 — — 12 113 The increase in ‘Other non-financial assets’ is driven by the receivables from Romanian authorities in relation to the compensations for the natural gas sales at cap prices to clients allocated to the Company as Supplier of Last Resort and for electricity sales at capped prices, as well as receivables in relation with the subsidies supporting half of the 0.50 RON per liter voluntary price reduction for the sale of diesel and gasoline in Roma- nia. 170 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 20 Assets and liabilities held for sale Assets and liabilities held for sale In EUR mn Nitrogen business unit Rosier Total OMV retail business Slovenia Other Total C&M R&M E&P C&O OMV Group 2022 3 0 662 121 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 decommis- sioning and restoration obligations Other liabilities incl. provi- sions and deferred taxes Non-current liabilities Trade payables Other liabilities incl. provisions Current liabilities Total liabilities 3 658 6 27 694 275 150 151 12 588 1,282 49 7 0 4 — 1 5 33 8 2 4 47 52 — 1 6 28 699 308 159 153 16 635 1,334 49 8 11 — 11 37 105 229 124 353 458 1 1 9 3 12 13 38 106 238 127 365 471 — 0 121 46 63 6 5 120 241 0 27 0 1 29 22 43 65 94 0 13 — 4 17 1 — — — 1 19 — — 1 — 1 — 1 1 2 0 134 — 4 139 48 63 6 5 121 260 0 27 1 1 30 22 44 66 96 — 20 — — 20 16 0 30 14 59 79 14 — — 20 34 12 13 25 59 — 3 3 819 — — 3 — — — — — 3 — — — — — — — — — 6 32 860 371 221 189 35 816 1,676 63 35 13 59 170 272 184 456 626 171 OMV ANNUAL REPORT 2022 / 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 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 Nitrogen business unit OMV retail business Germany OMV retail business Slovenia Total C&M R&M E&P C&O OMV Group 2021 1 260 6 27 294 221 222 62 11 516 810 62 5 12 41 120 236 78 314 434 10 247 — 44 301 24 43 0 0 67 368 0 114 23 52 189 40 28 67 257 0 119 — 0 119 52 51 1 2 106 225 0 35 — 2 37 39 47 86 123 10 366 — 44 420 76 93 1 2 173 593 0 149 23 54 227 79 75 153 380 27 32 — — 58 10 1 2 1 14 73 — — 85 — 85 10 — 10 95 — 3 — — 3 — — — — — 3 — — — — — — — — — 38 661 6 71 776 308 316 65 14 703 1,479 63 154 120 95 432 325 153 477 909 Chemicals & Materials As of December 31, 2022, assets held for sale and lia- bilities associated with assets held for sale in Chemi- cals & Materials were related mostly to the nitrogen business 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”) was not considered as part of the potential sales process at that time and its assets and related liabilities do not belong to the Bore- alis nitrogen business unit held for sale. The period to complete the sale was extended by events and circumstances beyond OMV’s control. The developments resulting from the war in Ukraine and re- lated sanctions caused Borealis to decline a binding of- fer received from EuroChem in February 2022 and to consider other options. On July 28, 2022, Borealis ac- cepted a new binding offer from AGROFERT, a.s. which was received on June 2, 2022, after the manda- tory information and consultation procedures with em- ployee representatives were finalized. On the same date, both companies entered into an agreement to sell and transfer all shares in the legal entities included in the scope of the transaction. The transaction itself re- mains subject to certain closing conditions and regula- tory approvals. In 2022 a write-up was recognized based on the offer received from AGROFERT, a.s. while in 2021 impair- ment loss was recognized based on the binding offer from EuroChem. For further details see Note 7 – De- preciation, amortization, impairments and write-ups. OMV determines the net position of emission certifi- cates for the Group. As of December 31, 2022, an obli- gation to surrender 2,133,124 emission certificates 172 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS (market value: EUR 179 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. As of December 31, 2022, the remaining part of assets held for sale and liabilites associated with asset held for sale in Chemicals & Materials was related to Rosier. On September 26, 2022, a binding agreement for the ac- quisition of Borealis’ shares in Rosier S.A. was signed with the YILDIRIM Group’s YILFERT Holding. This led to the reclassification of Rosier to assets and liabilities held for sale without having material impact on the in- come statement at that time. Refining & Marketing On May 1, 2022, OMV finalized the sale of the filling station business in Germany to EG Group (285 filling stations in southern Germany, with a focus on Bavaria and Baden-Württemberg). For further details regarding the effects of the sale please refer to Note 6 – Other operating income and net income from equity ac- counted investments. As of December 31, 2022, assets held for sale and lia- bilities associated with assets held for sale in Refining & Marketing related mostly to OMV retail business in Slovenia. 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 2023. Other assets and liabilities held for sale in Refining & Marketing related mostly to 17 Avanti filling stations in Germany. During 2022, OMV decided to sell the filling stations in Germany held under “Avanti” brand which led to the reclassification to assets and liabilities to held for sale. This reclassification did not have an impact on the income statement. Closing of the transaction is ex- pected in 2023. Exploration & Production As of December 31, 2022, assets held for sale and lia- bilities associated with assets held for sale in Explora- tion & Production were entirely related to Yemen oper- ating entities. During 2022, OMV decided to sell its rel- evant operating entities in Yemen and signed the sales agreement, which led to the reclassification to assets and liabilities to held for sale. As of the date of reclassi- fication, the result of the measurement at fair value less cost of disposal has led to an impairment (see Note 7 – Depreciation, amortization, impairments and write-ups). 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. After ongoing engagement with Jadestone En- ergy as a potential buyer, a mutual decision has been made to no longer pursue the transaction. Therefore, assets and liabilites related to Maari field were reclassi- fied back from the assets held for sale and liabilities as- sociated with asset held for sale. 173 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 21 Equity of stockholders of the parent Capital stock The capital stock of OMV Aktiengesellschaft consists of 327,272,727 (2021: 327,272,727) fully paid no par value shares with a total nominal value of EUR 327,272,727 (2021: 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 2022, 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. 174 OMV ANNUAL REPORT 2022 / 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, 2022, do not have a scheduled maturity date and they may be redeemed at the option of OMV under certain circumstances. OMV has, in particular, the right to re- pay the hybrid notes at certain call dates. Any accrued unpaid interest becomes payable when the notes are redeemed. 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 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. 175 OMV ANNUAL REPORT 2022 / 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 2022 Tax (expense) benefit1 603 40 (2) (3) 263 (35) 2 (67) 1 8 Net-of-tax (expense) income Before-tax (expense) income 2021 Tax (expense) benefit1 Net-of-tax (expense) income 602 37 228 3 946 210 53 (1) 13 (54) 11 0 959 155 64 (0) (58) 17 (3) 14 62 n.a. 6 02 n.a. 0 847 (30) 817 1,225 (33) 1,192 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 2022, the Executive Board of OMV Aktiengesellschaft proposed a regular dividend of EUR 2.80 per eligible share, as well as a special divi- dend of EUR 2.25 per eligible share, which are subject to confirmation by the Annual General Meeting in 2023. The dividend for 2021 was paid in June 2022 and amounted to EUR 752 mn (EUR 2.30 per share). In 2021, dividend payment amounted to EUR 605 mn (EUR 1.85 per share). The interest paid for hybrid bonds in 2022 amounted to EUR 94 mn (2021: EUR 94 mn). Number of shares 297,846 (36,520) 261,326 (59,652) 201,674 in EUR mn 3.3 (0.4) 2.9 (0.7) 2.2 Treasury shares January 1, 2021 Disposals December 31, 2021 Disposals December 31, 2022 176 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Development of number of shares in issue January 1, 2021 Used for share-based compensations December 31, 2021 Number of shares Treasury shares Shares in issue 327,272,727 — 327,272,727 297,846 (36,520) 261,326 326,974,881 36,520 327,011,401 Used for share-based compensations December 31, 2022 — 327,272,727 (59,652) 201,674 59,652 327,071,053 22 Non-controlling interests Subgroups with material NCI In EUR mn Subgroups OMV Petrom Group Borealis Group SapuraOMV Group Other subsidiaries OMV Group 2022 Net income allocated to NCI Accumulated NCI 1,023 424 21 1 1,470 3,980 3,212 274 13 7,478 % NCI 49% 25% 50% n.a. n.a. 2021 Net income allocated to NCI Accumulated NCI 294 307 (8) 24 617 3,364 2,876 238 13 6,491 % NCI 49% 25% 50% 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). On November 3, 2022, OMV Petrom SA completed the share capital increase, as a result the non-controlling interests in OMV Petrom Group increased by EUR 39 mn. The cash received from third party shareholders amounted to EUR 30 mn and is shown in the consolidated Statement of Cash flows in the line item “Increase in non-controlling inter- est”. Borealis Group is one of the world’s leading providers of advanced and circular polyolefin solutions and a Eu- ropean market leader in base chemicals, fertilizers, and plastics recycling. The majority 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. 177 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS The following tables summarize the financial infor- mation of the subgroups with material non-controlling interests: Statement of comprehensive income of subgroups with material NCI1 In EUR mn Sales revenue Net income for the year Total comprehensive income Attributable to NCI Dividends paid to NCI 2022 2021 OMV Petrom Group Borealis Group OMV Petrom Group Borealis Group 12,440 2,089 2,079 1,019 436 11,686 1,690 1,941 488 175 5,285 582 596 292 172 9,862 1,256 1,882 463 38 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 financial position as of December 31 of subgroups with material NCI1 In EUR mn Non-current assets Current assets Assets held for sale Non-current liabilities Current liabilities Liabilities associated with assets held for sale 2022 2021 OMV Petrom Group Borealis Group OMV Petrom Group Borealis Group 6,509 5,109 3 1,647 1,791 — 11,043 5,177 1,334 2,782 1,472 471 6,598 3,496 3 1,528 1,655 — 10,933 4,655 810 2,553 1,892 434 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 flows of subgroups with material NCI1 In EUR mn 2022 2021 OMV Petrom Group Borealis Group OMV Petrom Group Borealis Group Operating cash flow Investing cash flow Financing cash flow Net increase /(decrease) in cash and cash equivalents 2,299 (629) (872) 795 1,572 (58) (824) 691 1,422 (458) (389) 577 2,916 (1,086) (355) 1,475 1 Figures refer to subgroup level, i.e. including at-equity consolidation and after elimination of intercompany transactions and balances within the subgroup. 178 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 23 Provisions Provisions In EUR mn January 1, 2022 Currency translation differences Changes in consolidated group Usage and releases Payments to funds Allocations Transfers Reclassified to liabilities associated with assets held for sale December 31, 2022 thereof short-term as of December 31, 2022 thereof short-term as of January 1, 2022 Pensions and similar obligations Decom- missioning and restoration obligations Other provisions 1,299 3,756 1,003 (10) — (314) (18) 55 (10) (5) 997 — — 0 — (449) — 400 (0) 89 3,796 82 72 0 (1) (698) — 582 10 (13) 882 505 360 Total 6,057 (9) (1) (1,461) (18) 1,037 (0) 71 5,676 587 432 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 country-specific external pension funds. Pension commitments were calculated based on country- and plan-specific assumptions. Re- fer to Note 2 – Accounting policies, judgments and esti- mates – for more details. Pensions and similar obligations In EUR mn Present value of funded pension obligations Fair value of plan assets Provision for funded pension obligations Present value of unfunded pension obligations Present value of obligations for severance and other plans Provision for pensions, severance and other plans Present value of obligations for other long-term benefits Total provision for pensions and similar obligations 2022 832 (526) 305 470 135 910 87 997 2021 1,053 (595) 458 586 150 1,194 105 1,299 179 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Present value of obligations In EUR mn 2022 2021 Present value of obligation as of January 1 Current service cost Past service cost Interest cost Amounts recognised in the income statement Adjustments due to changes in demographic assumptions Adjustments due to changes in financial assumptions Experience adjustments Total remeasurements of the period (OCI) Actual benefit payments Currency translation differences Reclassification to liabilities associated with assets held for sale Present value of obligation as of December 31 1 Mainly related to outsourcing activities in Romania Fair value of plan assets In EUR mn Fair value of plan assets as of January 1 Interest income Return on plan assets (OCI) Actual benefit payments Actual employer contributions Currency translation differences Reclassification to liabilities associated with assets held for sale Fair value of plan assets as of December 31 Pensions 1,639 24 — 18 42 (0) (334) 56 (279) (91) (10) — Severance and other plans 150 10 — 2 12 1 (16) 3 (12) (10) 0 (5) Pensions 1,722 Severance and other plans 197 26 — 15 41 (1) 1 (9) (9) (85) (2) (27) 6 (2)1 2 5 — — (3) (3) (14) (1) (34) 150 1,302 135 1,639 2022 2021 595 6 (39) (54) 18 (0) — 526 589 5 40 (52) 22 1 (10) 595 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. Expected contributions to post-employment benefit plans for the year 2023 are EUR 23 mn. Moreover, in 2023, defined benefit related contributions related to 2022 to external pension funds of EUR 55 mn are esti- mated. 180 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Provisions and expenses In EUR mn Provision as of January 1 Current service cost Past service cost Net interest cost Amounts recognised in the income statement Adjustments due to changes in demographic assumptions Adjustments due to changes in financial assumptions Experience adjustments Return on plan assets Total remeasurements of the period (OCI) Actual benefit payments Actual employer contributions Currency translation differences Reclassification to liabilities associated with assets held for sale Provision as of December 31 1 Mainly related to outsourcing activities in Romania 2022 2021 Pensions Severance and other plans Pensions Severance and other plans 1,044 150 1,135 197 24 — 12 36 (0) (334) 56 39 (240) (37) (18) (10) — 10 — 2 12 1 (16) 3 — (12) (10) — 0 (5) 26 — 10 36 (1) 1 (9) (40) (50) (33) (22) (3) (20) 6 (2)1 2 5 — (3) — — (3) (14) — (1) (34) 775 135 1,044 150 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 2022 2021 Pensions Severance and other plans Pensions Severance and other plans 3.20-5.40% 3.40-5.00% 2.25-3.50% 3.50-8.00% 3.40-4.90% — 1.00-2.60% 2.50-5.00% 1.70-2.25% 0.80-5.22% 2.50-3.50% — 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 and other plans Capital market interest rate Future increases in salaries Future increases in pensions +0.50% (5.25)% (4.21)% (0.50)% 5.77% 4.56% +0.25% 0.86% 2.06% (0.25)% (0.81)% (1.97)% +0.25% 2.56% — (0.25)% (2.44)% — 2022 181 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Sensitivities - absolute change In EUR mn Capital market interest rate Future increases in salaries Future increases in pensions +0.50% (0.50)% +0.25% (0.25)% +0.25% (0.25)% 2022 Pensions Severance and other plans (69) (7) 76 7 11 3 (11) (3) 34 — (32) — Duration profiles and average duration of defined benefit obligations as of December 31 In EUR mn Pensions Severance and 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 2022 Duration profiles 1–5 years 6–10 years >10 years 363 47 338 47 599 40 Duration in years 11 9 2022 2021 15% 29% 5% 36% 15% 100% 18% 35% 4% 30% 12% 100% Provisions for decommissioning and restoration obligations 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. 182 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Provisions for decommissioning and restoration obligations In EUR mn January 1, 2022 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, 2022 thereof short-term as of December 31, 2022 thereof short-term as of January 1, 2022 Carrying amount 3,756 53 198 (332) 150 89 (117) 3,796 82 72 The reduction arising from revisions in estimates was mainly driven by increased real interest rates for USD and EUR compared to 2021. The decommissioning provision related to OMV’s share in the Maari field in New Zealand was reclassified back from liabilities associated with assets held for sale. For details see Note 20 – Assets and liabilities held for sale. Main assumptions for calculating decommissioning and restoration obligations as of December 311 Eurozone (EUR) New Zealand (NZD) Norway (NOK) Romania (RON) United States (USD) 2022 Discount rate Inflation rate 2.36-2.55% 4.53-4.73% 3.09-3.13% 8.35% 3.88-4.15% 2.35% 2.61% 2.31% 4.56% 2.51% Real discount rate 0.01-0.20% 1.92-2.13% 0.78-0.82% 3.79% 1.37-1.64% 1 Based on the main currencies of the underlying obligations. Multiple discount rates per currency arise due to different maturities. Estimation of maturities and cash outflows of decommissioning and restoration obligations1 In EUR mn ≤1 year 1 – 10 years 11 – 20 years 21 – 30 years >30 years Total 2022 Carrying amount Undiscounted real costs 86 1,320 5,174 1,776 747 9,102 82 899 2,138 481 196 3,796 1 Mainly related to decommissioning and restoration obligations in Exploration & Production business segment A decrease of 1 percentage point in the real discount rates used to calculate the decommissioning provi- sions, would lead to an additional provision of EUR 612 mn, in an opposite case provision would de- crease by EUR 504 mn. 183 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS The provision for decommissioning and restoration costs included obligations in respect of OMV Petrom SA amounting to EUR 1,397 mn (2021: EUR 1,260 mn). Part of the obligations is to be recovered from the Romanian State in accordance with the privatization agreement. As of December 31, 2022, OMV Petrom SA held receivables from the Romanian state related to decommissioning and restoration costs amounting to EUR 326 mn (2021:EUR 352 mn). Other provisions Other provisions In EUR mn Environmental costs Onerous contracts Other personnel provisions Emissions certificates Residual other provisions Other provisions 2022 2021 Short-term Long-term Short-term Long-term 11 64 149 35 247 505 77 176 18 — 105 377 14 24 148 113 60 360 77 431 16 — 120 643 As at December 31, 2022, the provision for environ- mental costs included EUR 52 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, 2022, was EUR 32 mn (2021: EUR 390 mn). This steep decrease in provision reflects the change in LNG market condititions with higher realized LNG volumes and margins experienced in 2022, which is expected to persist to a certain extent also in the near future. 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 2.53% (2021: 4.51%). As per end of 2022, the provision for the related non- cancellable transportation commitments of OMV Gas Marketing & Trading GmbH amounted to EUR 188 mn (2021: EUR 65 mn). The increase in provision is mainly driven by additional transport capacities which were booked in order to secure alternative supply routes for Austria. The calculation is based on the difference be- tween the fixed costs for using the capacities and the net profit from usage expected to be generated by us- ing the capacities. The discount rate applied is 2.53% (2021: 4.51%). Besides the discount rate, the key as- sumptions are the gas prices at the relevant gas hubs which are based on forward rates or on management’s best estimates of future prices. Other personnel provisions included short-term provi- sions related to personnel reduction schemes of EUR 13 mn (2021: EUR 17 mn).The remaining amount was mainly related to boni provisions. Residual other provisions increased in 2022 mainly in connection with other risks assessed by the Group in the area of gas and power taxation in Romania. 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 184 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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. 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 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 In 2023 OMV expects to surrender 9,859 thousand emissions certificates from European Trading Scheme, 3,531 thousand BEHG certificates and 2,292 thousand NZ certificates for (not yet externally verified) emis- sions, out of which 2,187 thousand emissions certifi- cates are expected to be transferred to OMV from cus- tomers in New Zealand. Emissions certificates Number of certificates, in thousands Certificates held as of January 1 Free allocation for the year Certificates surrendered1 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 11,731 7,742 (10,792) 4,889 — 13,569 2022 NZ Trading Scheme 252 — (2,567) 293 3,924 1,901 DE Trading Scheme 3,617 — (3,833) 3,398 — 3,183 European Trading Scheme 12,210 5,891 (10,795) 4,424 — 11,731 2021 NZ Trading Scheme 112 — (2,884) 1,150 1,873 252 DE Trading Scheme — — — 3,617 — 3,617 185 OMV ANNUAL REPORT 2022 / 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 1,290 128 155 5,259 2,172 1,527 10,531 2022 Long- term 6,030 1,359 1,322 — 489 124 9,325 Total 7,320 1,487 1,476 5,259 2,662 1,652 19,856 Short- term 2021 Long- term Total 795 350 131 4,860 4,367 1,440 7,275 1,415 887 — 587 118 11,943 10,282 8,070 1,765 1,018 4,860 4,955 1,558 22,225 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. Lease liabilities increased mainly due to the new leas- ing contracts for storage infrastructure related to the propane dehydrogenation plant (PDH) in Kallo, Bel- gium. For further details on lease contracts please refer to Note 15 – Property, plant and equipment. For further details on cash and non-cash effective changes in bonds, other interest-bearing debts as well as lease liabilities please refer to Note 26 – Statement of cash flows. 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. 186 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Bonds International corporate bonds In EUR mn Nominal 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 International corporate bonds Bonds and other interest-bearing debts As at December 31, 2022, 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 2023/2022 (short-term component of long-term financing) 2024/2023 2025/2024 2026/2025 2027/2026 2028/2027 and subsequent years Total for 2023/2022 onwards Coupon Repayment 2022 2021 Carrying amount December 31 Carrying amount December 31 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 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 — 749 500 504 498 315 996 752 506 499 748 758 496 7,320 2022 65 1,353 1,417 1,353 823 1,149 1,185 871 3,360 8,742 754 747 499 503 497 319 994 751 505 499 748 758 496 8,070 2021 254 891 1,145 891 1,277 822 1,174 1,183 4,233 9,581 187 OMV ANNUAL REPORT 2022 / 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 Total Variable rates2 EUR USD Other currencies Total Other short-term interest-bearing debts EUR USD 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 2022 2021 Weighted average interest rate Weighted average interest rate 8,187 279 8,466 50 190 36 276 65 — 65 1.34% 4.24% 1.44% 3.13% 5.04% 0.45% 4.10% 0.07% — 0.07% 8,959 312 9,271 77 194 38 310 1.45% 4.27% 1.54% 0.77% 1.24% 0.46% 1.02% 250 4 254 (0.22)% — (0.22)% 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 1,263 41 1,222 910 2,172 3,607 102 3,506 760 4,367 2022 353 4 349 137 489 2021 471 — 471 116 587 1,615 44 1,571 1,047 2,662 4,079 102 3,977 876 4,955 188 OMV ANNUAL REPORT 2022 / 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 liabilities1 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) ≤1 year 1 – 5 years >5 years Total 2022 1,351 141 186 5,259 1,260 910 9,107 3,394 1,018 514 — 350 100 5,375 3,160 393 1,131 — — 102 4,786 7,905 1,552 1,831 5,259 1,610 1,111 19,268 870 373 155 4,860 3,608 761 10,627 2021 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 1 Includes the book value of the financial guarantee issued by Borealis to Bayport Polymers LLC, allocated to ≤ 1year maturity; for further details on the guaran- tees as well as the maximum exposure related to it please refer to Note 28 – Risk management. 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 Short-term Long-term Total 1,040 57 148 282 1,527 1,027 128 129 155 1,440 2022 0 14 79 32 124 2021 — 16 98 4 118 1,040 71 227 314 1,652 1,027 144 228 159 1,558 The increase in other sundry liabilities was mainly im- pacted by non-financial liabilities related to oil product exchange contracts concluded between OMV Group and national stockholding companies in Germany and Slovakia. For more details please refer to Note 28 – Risk management. 189 OMV ANNUAL REPORT 2022 / 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 2022 228 (0) 2021 214 1 (126) (80) 125 — 227 95 (1) 228 The contract liabilities consisted mainly of non-re- fundable prepayments of storage fees received from Erdöl-Lagergesellschaft m.b.H., Lannach on the basis of long-term service contracts. 190 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 25 Deferred taxes Deferred taxes In EUR mn Intangible assets Property, plant and equipment Inventories Derivatives Receivables and other assets Deferred taxes reclassified to assets and liabilities associated with assets 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 assets 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 assets 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 assets held for sale Deferred taxes as per statement of financial position Deferred tax assets total Deferred tax assets not recognized Deferred tax assets recognized Deferred tax liabilities 159 120 38 226 85 153 204 1,217 112 350 684 1,635 120 5,103 197 163 38 667 88 39 263 1,307 125 259 115 1,546 433 5,240 2022 — 3 — — 20 135 89 14 — 0 — 816 — 1,076 159 117 38 226 65 18 116 1,203 112 350 684 819 120 4,027 244 2,564 56 683 297 52 107 0 32 16 — — 54 4,105 (2,877) (2,877) 1 35 1,150 1,194 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 1,309 191 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Deferred taxes were mainly related to different valua- tion methods, differences in impairments, write-offs, write-ups and depreciation and amortization as well as different definition of costs. Decrease in deferred tax liabilities (DTL) related to in- tangible assets was mainly driven by deconsolidation of JSC GAZPROM YRGM Development. For further de- tails see Note 2 - Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assump- tions’. Increase in deferred tax assets (DTA) related to tax im- pairments was mainly drived by the impairment of in- vestment in JSC GAZPROM YRGM Development. For further details see Note 12 – Taxes on income and profit. In 2022 as well as in the previous year, a valuation al- lowance for DTA for the Austrian tax group was recog- nized. DTA recognized for the AT Tax Group as of De- cember 31, 2022 reflects the expected utilization of de- ductible temporary differences of balance sheet items and tax losses carried forward based on the mid term plan for the period 2023 - 2027. Limitation to the usage of tax losses of 75%, as stipulated by the Austrian Cor- porate Income Tax Act, was considered in the assess- ment of the recoverable DTA within the planning pe- riod. Remaining DTL after the planning period are mainly expected to be offset with DTA from temporary differences. Any remaining DTL after netting is as- sumed to be offset with DTA from tax losses, therefore the limitation to the usage of tax losses have not been considered after the planning period. This is also sup- ported by the fact that tax losses can be carried forward for an unlimited period of time. The overall net DTA position of tax jurisdictions which suffered a tax loss either in current or preceding year amounted to EUR 682 mn, thereof EUR 522 mn is at- tributable to the Austrian tax group (2021: EUR 901 mn, thereof Austrian tax group EUR 658 mn). As of December 31, 2022, OMV recognized tax losses carryforward of EUR 6,758 mn before allowances (2021: EUR 5,839 mn), thereof EUR 3,460 mn (2021: EUR 3,202 mn) are considered recoverable for calcula- tion of deferred taxes. Eligibility of losses for carryforward expires as follows: Tax losses carryforward1 In EUR mn 2022 2023 2024 2025 2026 2027 After 2027/2026 Unlimited Tax losses carryforward 2022 2021 Base amount (before allo- wances) Base amount (before allo- wances) thereof not recognized thereof not recognized — 18 2 11 3 3 55 6,666 6,758 — 18 2 11 3 3 0 3,261 3,298 30 18 2 11 3 0 0 5,774 5,839 30 18 2 11 3 0 0 2,573 2,637 1 Tax losses carryforward related to disposal groups reclassified to held for sale are excluded. The majority of tax losses carryforward not recog- nized referred to the Austrian Tax Group and France. As of December 31, 2022, 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 10,123 mn (2021: EUR 7,475 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. 192 OMV ANNUAL REPORT 2022 / 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 2022 808 7,316 8,124 2021 997 4,067 5,064 Significant non-cash items The line “Other changes” of the consolidated statement of cash flows for 2022 included non-cash effects re- lated to the impairment of the Nord Stream 2 loan. Moreover the line contained impacts from the deconsol- idation of JSC GAZPROM YRGM Development (YRGM) and OJSC Severneftegazprom (SNGP) as well as the fair value changes related to the investments in YRGM and SNGP and the contractual position towards Gazprom from the redetermination of the reserves of the Yuzhno Russkoye gas field. For further details please refer to Note 2 – Accounting policies, judge- ments and estimates, section ‘Impact of Russia’s inva- sion of Ukraine and related significant estimates and assumptions’. In 2022 non-cash additions to fixed assets included mainly effects from new lease contracts as well as the reassessment of decommissioning and restoration obli- gations. Cash flow from investing activities For details about the cash flow effect from divestments of subsidiaries and businesses, the loss of control of YRGM and the Initial Public Offering of Borouge PLC 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 a bond with a nominal value of EUR 750 mn. 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 2022 Other interest- bearing debts 1,765 Lease liabilities 1,191 0 (114) (184) (298) 31 — (11) — 20 — (183) — (183) 2 (123) 1 6361 515 Bonds 8,070 — (750) — (750) — — 0 — 0 Total 11,026 0 (1,047) (184) (1,230) 33 (123) (11) 636 535 December 31 7,320 1,487 1,524 10,331 1 Mainly related to new lease agreements 193 OMV ANNUAL REPORT 2022 / 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 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 The total cash outflow related to lease liabilities amounted to EUR 212 mn (2021: EUR 199 mn). Financing commitments provided to related parties are detailed in Note 35 – Related parties. As of December 31, 2022, the Group had available EUR 5,291 mn of undrawn committed borrowing facili- ties that can be used for future activities without any re- strictions (December 31, 2021: EUR 4,415 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, there is either no present obligation and/or the outflow is remote and/or they will not materially affect the Group’s financial posi- tion. OMV entered into guarantees as part of the ordinary course of the group’s business, mainly under credit fa- cilities granted by banks, without cash collateral. No material losses are likely to arise from such. Further in- formation on financial guarantees are included in Note 28 – Risk Management. 194 OMV holds a 10% share in Pearl Petroleum Company Ltd. (Pearl) following an acquisition through a Share Sales Agreement of May 2009 (SSA). OMV was faced with a pending arbitration proceeding since 2020 (un- der the London Court of International Arbitration (LCIA) rules) launched by Crescent and Dana in respect of certain reserve-based contingent payments and alleged unjustified enrichment based on the SSA. In a final binding arbitral award of February 2023 the LCIA tribu- nal ruled in favor of OMV rejecting those claims and stating that there is no entitlement of Dana and Cres- cent of a contingent payment by OMV. 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 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 and 2022, 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 under- taking for the financial year prior to the sanctioning de- cision. 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, 2022, 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. 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 cap- ital market confidence, as well as to provide a sustaina- ble financial foundation for the future operational devel- opment 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 leverage ratio (defined as net debt including leases / (equity + net debt includ- ing leases) of below 30%. Capital Management – key performance measures In EUR mn (unless otherwise stated) Bonds Lease liabilities1 Other interest-bearing debts1 Debt including leases Cash and cash equivalents1 Net Debt including leases Equity Leverage ratio including leases in % 1 Including items that were reclassified to assets or liabilities held for sale 2022 2021 7,320 1,524 1,487 10,331 8,070 1,191 1,765 11,026 8,124 2,207 5,064 5,962 26,628 21,996 8 21 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 to 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, 2022, the average weighted ma- turity of the Group’s debt portfolio (excluding lease lia- bilities) has been 4.6 years (as of December 31, 2021: 5.1 years). OMV Group’s operational liquidity management is mainly handled via cash pooling systems, which enable 195 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS optimum use of existing cash and liquidity reserves to the benefit of every individual member of cash pooling system and the Group as a whole. Details of OMV Group’s financial liabilities are shown in Note 24 – Liabilities. Financial Guarantee Contracts On April 19, 2022, Bayport Polymers LLC, which is ac- counted for using the equity method, partially re-paid the loan to the Group in the amount of EUR 602 mn. The repayment was financed from the two tranches of senior notes in the amount of EUR 324 mn and EUR 278 mn, which mature in 2027 and 2032, respec- tively. Senior notes issued by Bayport Polymers LLC are fully guaranteed by Borealis AG. For further details see chapter ‘Credit Risk Management’. 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. For the purpose of mitigating market price risks, the Group enters into derivative financial instruments such as OTC swaps, options, futures and forwards. 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 premi- ums on purchased options are payable when the con- tract is concluded; where options are exercised, pay- ment of the difference between strike price and aver- age market price for the period takes place at contract expiration. Commodity price risk management 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 ac- tivities (marketing margin, inventories up to a defined threshold) and producing power (spark spreads) in ad- dition to proprietary trading positions. Limited proprietary trading activities may be performed for the purpose of creating market access within the oil, power and gas markets up to a defined threshold. 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 mostly 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 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. 196 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Nominal and fair value of open derivative financial instruments In EUR mn 2022 Fair value assets Fair value liabilities Nominal 2021 Fair value assets Fair value liabilities Nominal Commodity price risk Oil incl. oil products Gas Power Commodity hedges (designated in hedge relation- ship)1 1,337 10 351 47 — 320 (35) (3) (2) 536 101 252 20 1 377 1,697 367 (41) 889 398 (35) (57) (1) (93) 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 SEK Other Foreign currency hedges (valued at fair value through profit or loss) 7,808 17,730 779 220 5 2,365 282 209 (22) 5,233 (1,374) 32,640 849 285 (133) (2) 2 3,586 260 364 (50) (3,418) (492) (0) 26,537 2,862 (1,531) 39,008 4,213 (3,960) 266 157 423 1,207 2,493 8 26 238 3,972 7 — 7 4 1 — 0 1 5 (0) (4) 183 161 (4) 344 (10) (26) (0) (0) (3) 1,685 1,163 — — 169 (39) 3,017 — 0 0 3 6 — — 0 9 (6) (2) (8) (5) (11) — — (1) (17) Interest rate risk Interest rate hedges (designated in hedge relationship)1 103 6 — 109 — (1) 1 Including ineffective part of hedges designated in a hedging relationship 2 Includes derivatives for European Emission Allowances From 2022 onwards, the amounts reclassified from the cash flow hedge reserve to the income state- ment related to cash flow hedges of power and gas used in production were shown in line item ‘Produc- tion and operating expenses’. Corresponding amounts in 2021 were included in line item ‘Purchases (net of inventory variation)’. Re- statements according to IAS 8.42 compared to the presentation in the previous years were not made due to immateriality of amounts. 197 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS The Group’s hedging reserve disclosed in the Con- solidated Statement of Changes in Equity relates to the following hedging instruments: Cash flow hedging – Impact of hedge accounting In EUR mn Cash flow hedge reserve as of January 1 (net of tax) Gains/(losses) of the period recognized in OCI Amounts reclassified to the income statement Amounts reclassified to balance 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 income statement Amounts reclassified to balance sheet Tax effects Cash flow hedge reserve as of December 31 (net of tax) Hedge ineffectiveness recognized in the income statement (1) Hedge ineffectiveness recognized in the income statement 1 (10) — 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 Amounts reclassified to the income statement Tax effects Reserve as of December 31 (net of tax) 1 Included in currency translation differences within other comprehensive income 198 Forecast purchases Forecast sales Foreign cur- rency, other Interest rate Total Commodity price risk Foreign currency risk 2022 Interest rate risk 243 (9) (6) 2 230 360 (422) 57 8 245 (40) 63 — (5) 8 1 (16) 21 6 (3) 3 — 2021 7 — — (2) 7 — 310 (338) 63 (2) 264 (1) 26 31 8 0 65 531 (237) (5) (72) (115) 65 — 11 (14) (3) 0 4 243 (9) (6) 2 — — (0) 2 — 403 (176) (5) (57) 230 (9) Foreign currency risk 2022 (5) (13) 2 3 (13) 2021 7 (16) — 4 (5) OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS At December 31, 2022 (December 31, 2021: nil), the Group held the following items designated in a fair value hedge relationship: Impact of fair value hedge accounting on the income statement and statement of financial positions In EUR mn Hedged Item Carrying amount Liabilities Cumulative amount of fair value hedge adjustment in- cluded in the carry- ing amount of the hedged item Effective gains(losses) of the period recognized in the income statement Line item in the statement of finan- cial positions Non-financial liability 132 2022 2 (6) Other liabilities At December 31, 2022 and December 31, 2021, the Group held the following cash flow, fair value and net investment hedging relationships. The table shows the profile of the timing (maturity) of the nominal amount of the hedging instruments. Impact of hedge accounting on the statement of financial positions In EUR mn Forecast purchases Forecast sales Recognized liability Net invest- ment hedge Foreign currency, other Commodity price risk Foreign currency risk Interest hedges Interest rate risk Total 385 385 — 176 176 — 1,168 999 169 357 37 713 608 106 398 93 2022 2021 150 38 113 n.a. n.a. 191 — 191 n.a. n.a. 145 145 — 10 4 — — — — — 423 423 — 7 4 344 344 — 0 8 103 — 103 6 — 109 12 97 — 1 2,374 1,989 385 380 44 1,533 1,139 394 398 102 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 fi- nancial 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 199 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS allowances and manages it using derivative instru- ments (spots and forwards) traded bilaterally on the secondary market (so-called over-the-counter or OTC transactions). Chemicals & Materials For the petrochemical production, some of the fore- casted cracker feedstock purchases and finished prod- uct 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 classified as fair value through profit or loss and stated at fair value. Borealis hedges its forecasted electricity purchases us- ing electricity swaps. Refining & Marketing Refining & Marketing is exposed to market price risks arising from trading and non-trading activities, covering production, refining and marketing activities associated with crude oil, oil products, gas and electricity, in addi- tion to limited proprietary trading positions aiming to create market access within oil and oil product markets. In Refining & 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, 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. 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. Furthermore, operational commodity price risk manage- ment in Exploration & Production includes hedging of 200 market price risk exposure arising from non-trading and trading activities of gas marketing (hedge of the price risk on inventory fluctuations and the differences in terms and conditions of purchases and sales) as well as limited proprietary trading positions for the purpose of creating market access within the gas markets. For all these derivative instruments no hedge account- ing was applied. Hedge Accounting in Chemicals & Materials and Refining & Marketing In the Chemical & Materials and Refining & Marketing 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. The risk management objective is to harmonize the pricing of product sales and purchases in order to re- main within an approved range of priced stocks at all times, by means of undertaking stock hedges so as to mitigate the price exposure. The range is a defined maximum deviation from the target stock level, as de- fined in the Annual Plan for hedging activities. 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 activi- ties. 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. For refinery margin hedges, hedge accounting is ap- plied to a limited extent. In 2022, physical oil product exchange contracts have been concluded between OMV Group and national stockholding companies in Austria, Germany and Slo- vakia. In order to reduce the risk of market price fluctu- ations between the withdrawal and return of products, derivative swap deals (sell fix, buy floating at the time OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS of withdrawal and buy fix, sell floating at the time of re- turn) were concluded and designated in a fair value hedge relationship (hedge of a recognized liability). As of December 31, 2022, the product exchange transac- tion with the Austrian national stockholding company was fully completed. Stock hedges are used to mitigate price exposure whenever actual priced stock levels deviate from target levels. Forecast sales for oil products and forecast pur- chase 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 / Ar- gus 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 derivatives are identical to the hedged risk components. Hedge inef- fectiveness can arise from timing differential between derivative and hedged item delivery and pricing differ- entials (derivatives are valued on the future monthly av- erage price (or other periods) and sales/purchases on the pricing at the date of transaction/delivery). For ‘Forecast purchases’ as well as the ‘Hedge of a recognized liability’ the hedge ineffectiveness is in- cluded 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, NOK, NZD and SEK). Movements of these currencies against the EUR are also important sources of risk. Other currencies have only a limited impact 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 re- viewed at least on a semiannual basis and the sensitiv- ity 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. Trans- lation risk arises on the consolidation of subsidiaries with functional currencies different from EUR. The larg- est exposures result from changes in RON, USD, 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 investment in a joint venture 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 investment hedge is the risk of a weakening USD against the EUR that will result in a re- duction in the carrying amount of the Group’s net in- vestment in the joint venture in USD. The EUR/USD im- pact on the measurement of the loans is recognized in other comprehensive 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 201 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS the hedging instrument is identical to the hedged risk component. Hedge ineffectiveness will arise when the amount of the investment in the foreign joint venture becomes lower than the amount of the borrowing. 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 2022 the impact of interest rate swaps has not been material (2021: 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. Interest rate benchmark reform (IBOR Reform) The Group continuously evaluates contractual terms in respect of the London Inter-Bank Offered Rate (LIBOR) transition exposures. Where necessary, agreements will be amended to provide for alternative benchmark rates, which will be in accordance with Loan Market As- sociation (LMA) standard at the time, to apply in rela- tion to the affected currencies. Where applicable, the Group will transition USD LIBOR agreements during the first half of 2023. As per end of December 31, 2022, for the EUR 1 bn (2021: EUR 1 bn) multicurrency Revolving Credit Facil- ity (RCF) a drawdown waiver is in place for currencies where IBOR rates were discontinued as a Screen Rate from December 31, 2021 (CHF, GBP, JPY). The RCF drawdown waiver will cease to have effect if the Facility is amended to provide for alternative benchmark rates, which will be in accordance with LMA standard at a time. In addition, a JPY loan tranche of EUR 36 mn (2021: EUR 38 mn) has been successfully transitioned to To- kyo Overnight Average 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 103 mn (2021: EUR 97 mn) in total and a cross currency interest rate swap of EUR 36 mn (2021: EUR 38 mn). Their hedging period spans be- yond 2022 when uncertainties about the existence of the USD LIBOR rates arise. OMV Group expects that the hedging instrument and the hedged risk of the hedged item will not change as a result of the reform. However, any hedge ineffectiveness would be ac- counted for in the income statement. Benchmark Carrying Value (notional amount for derivatives) 2022 2021 USD LIBOR USD LIBOR JPY LIBOR 657 190 36 47 56 36 987 189 38 44 53 38 Impact of Interest Rate Benchmark Reform In EUR mn Non-derivative financial assets Loan receivable Non-derivative financial liabilities Loan liabilities Loan liabilities1 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) USD LIBOR USD LIBOR JPY LIBOR to USD LIBOR 1 JPY LIBOR has been successfully transitioned to Tokyo Over-night Average Rate (TONAR). 202 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Impact of Interest Rate Benchmark Reform In EUR mn Undrawn commitments Financing commitments provided Committed borrowing facilities - available RCF USD LIBOR Multicurrency 2022 46 1,000 2021 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 the income statement or other comprehensive income depends on the type of derivative used and on whether hedge ac- counting is applied. Market price sensitivity for deriva- tives to which cash flow hedge accounting is applied is shown in the sensitivity table for other comprehensive income. Sensitivity to market price fluctuations for all other open derivatives is shown in the sensitivity tables for profit before tax. Sensitivity analysis for open commodity derivatives affecting profit before tax In EUR mn Oil incl. oil products Oil incl. oil products - designated in a hedge relationship1 Gas Power Other2 Total 2022 2021 Market price +10% Market price (10)% Market price +10% Market price (10)% 4 14 10 13 43 83 (4) (14) (10) (13) (43) (83) (25) — (2) (43) 65 (4) 25 — 2 43 (65) 5 1 Includes hedging instruments designated in a fair value hedge relationship related to product swaps with national stockholding companies in Germany and Slo- vakia. For further details see chapter ‘Hedge Accounting in Chemicals & Materials and Refining & Marketing’ 2 Includes derivatives for European Emission Allowances 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) 2022 2021 Market price +10% Market price (10)% Market price +10% Market price (10)% (39) 5 48 15 39 (5) (48) (15) 3 3 57 64 (3) (3) (57) (64) For financial instruments, sensitivity analysis is per- formed for changes in foreign exchange rates of cur- rencies material to the Group. On Group level, the EUR-RON sensitivity not only includes the net RON ex- posure 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. 203 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Sensitivity analysis for financial instruments affecting profit before tax1 In EUR mn EUR-RON EUR-USD EUR-NZD EUR-NOK EUR-SEK 2022 2021 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 8 8 (2) 23 (3) (8) (8) 2 (23) 3 (2) (114) (4) 23 (6) 2 114 4 (23) 6 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 Sensitivity analysis for financial instruments affecting other comprehensive income1 In EUR mn 2022 2021 10% apprecia- tion of the EUR 10% deprecia- tion of the EUR 10% apprecia- tion of the EUR 43 (16) (43) 16 39 (16) 10% deprecia- tion of the EUR (39) 16 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. Credit risk exists in relation to the financial guarantee issued by Borealis to Bayport Polymers LLC, which is accounted for using the equity method, where the maxi- mum outstanding exposure for Borealis amounts to EUR 623 mn (2021: nil). For further details refer to chapter ‘Liquidity Risk’. The guarantee terminates earliest upon payment and/or termination of the obligation in 2027 and 2032, respectively and could be called at any time. Generally, a payment under the guarantee agreement is triggered by the non-performance by the guaranteed party of the obligation covered by the guarantee. Therefore, a fi- nancial liability initially measured at fair value was rec- ognized. The Group is exposed to additional credit risks arising from credit exposures with customer accounts receiva- bles (see Note 18 – Financial assets), from its operat- ing activities as well as from its financial activities such as financial investments, including deposits with banks and financial institutions (see Note 26 – Statement of cash flows), foreign exchange transactions and other fi- nancial instruments (see Note 18 – Financial assets). EUR-USD EUR-SEK 1 Including sensitivity of the net investment hedge 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 and Segment level using predeter- mined criteria and limits for all counterparties, banks and security providers. On the basis of a risk assess- ment, counterparties, banks and security providers are assigned a credit limit, an internal risk class and a spe- cific limit validity. The risk assessments are reviewed 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 deriv- ative financial instruments have investment grade credit ratings. OMV uses commercial trade insurance for parts of its receivables in some business areas to miti- gate credit risk. Based on the high economic uncer- tainty resulting from current geopolitical situation, spe- cial attention is paid to early warning signals like changes in payment behavior. 204 OMV ANNUAL REPORT 2022 / 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 Carrying amount Valued at amortized cost Valued at fair value Fair value level Total Level 1 Level 2 Level 3 Total 4,086 — — 52 136 42 26 — — — 711 380 2,867 — 4,222 42 26 52 380 2,867 711 1,850 — 1,850 n.a. 6,699 882 4,334 882 11,032 4,260 — — 63 — — 2,015 258 17 30 — 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 2022 2021 — — 26 — — 14 — — — 40 — — 30 — — 40 — — — 70 136 — — — 380 2,853 — — 58 3,427 258 — — — 398 4,180 — — 42 — — — — — — 136 42 26 — 380 2,867 — — 824 866 882 4,334 — 17 — — — — — 258 17 30 — 398 4,220 — — 432 432 (23) 4,814 377 826 354 5,709 Trade receivables Investments in other companies2 Investment funds Bonds Derivatives designated and effective as hedging instruments Other derivatives Loans Other sundry financial assets3 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 assets3 Net amount of assets and liabilities associated with assets held for sale Total 1 Excluding assets held for sale 2 Includes investments in JSC GAZPROM YRGM Development (YRGM) and OJSC Severneftegazprom (SNGP), which are accounted for at fair value through profit or loss according to IFRS 9 since March 1, 2022. For further details please refer to Note 2 – Accounting policies, judgements and estimates, section ‘Im- pact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. 3 2021 included an asset from reserves redetermination rights related to the acquisition of interests in the Yuzhno-Russkoye field. For further details please refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. 205 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Fair value hierarchy of financial liabilities and other liabilities at fair value1 In EUR mn Carrying amount Valued at amortized cost Valued at fair value Fair value level Total Level 1 Level 2 Level 3 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 Other liabilities at fair value2 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 2022 5,259 7,320 1,476 1,487 — — — — 5,259 7,320 1,476 1,487 — 44 44 — 1,571 1,571 1,047 — 16,589 — 132 1,747 1,047 132 18,336 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 2021 — — — — — 0 — — 0 — — — — 17 42 — 59 — — — — 44 1,571 — 132 1,747 — — — — 85 3,935 — 4,019 — — — — — — — — — — — — — — — — — — — — — 44 1,571 — 132 1,747 — — — — 102 3,977 — 4,079 1 Excluding liabilities associated with assets held for sale 2 Includes hedged items designated in fair value hedge relationships related to product swaps with national stockholding companies in Germany and Slovakia. Financial assets and liabilities for which fair values are disclosed1 In EUR mn Fair Value Fair value level Level 1 Level 2 Level 3 52 52 6,747 1,320 8,067 63 63 8,586 1,742 10,328 2022 — — 6,747 — 6,747 2021 — — 8,586 — 8,586 52 52 — 1,320 1,320 63 63 — 1,742 1,742 — — — — — — — — — — 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 206 OMV ANNUAL REPORT 2022 / 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. 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. 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. 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) 13,466 6,086 1,892 21,444 (10,219) (1,864) (42) (12,125) 21,462 6,998 2,231 30,691 (16,844) (2,480) (97) (19,420) 2022 3,247 4,222 1,850 9,318 2021 4,619 4,518 2,135 11,271 (547) (106) (1) (654) (1,421) (107) (104) (1,633) 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 11,835 7,123 1,089 20,046 (10,219) (1,864) (42) (12,125) 20,922 7,340 973 29,235 (16,844) (2,480) (97) (19,420) 2022 1,615 5,259 1,047 7,921 2021 4,079 4,860 876 9,815 (547) (106) (1) (654) (1,421) (107) (104) (1,633) Net 2,700 4,116 1,849 8,664 3,197 4,411 2,031 9,639 Net 1,068 5,153 1,046 7,267 2,657 4,753 772 8,182 207 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 31 Result on financial instruments Result on financial instruments In EUR mn Financial instruments at fair value through profit or loss Amount Equity instruments designated as measured at fair value through other comprehensive income 2022 Financial assets at amortized cost Financial liabilities at amortized cost — — — 11 — — — — — — 0 11 — — — 19 — — — — — — 19 2021 — (43) (43) — 269 — — — — (1,007) 0 — — — — — (161) — — — — (12) (739) (173) — (9) (9) — 160 — — — (0) — — — — — — (172) — — — (16) 159 (188) 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 financial instruments 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 1,029 1,029 (43) — 986 1,029 11 269 (417) (374) (186) — — (4) (374) (186) (46) (46) (1,007) (12) — 0 (1,761) (609) (1,050) (1,050) (9) — (1,059) (1,050) 19 161 (334) 15 (33) (1) (16) — — (4) 15 (33) — — (189) (22) The interest expense not allocated mainly referred to the unwinding of provisions. For further details see Note 11 – Net financial result. 208 OMV ANNUAL REPORT 2022 / 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. From 2022 onwards OMV Petrom LTIP payment is made in shares only. Executive Board members and senior managers as active participants of the plans are required to build up an appropriate vol- ume of shares and to hold those shares until retirement or departure from the company. For senior managers, if the LTIP eligibility lapses, but they are still in an active employment with the company, the shareholding re- quirement expires 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 Long Term Incentive for the senior managers. Executive Board members have to fulfill the shareholding require- ment within five years after the initial respective ap- pointment. Until fulfillment of the shareholding require- ment, the disbursement is in form of shares whilst thereafter the plan participants can decide between cash or share settlement. 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 Company. 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. 209 OMV ANNUAL REPORT 2022 / 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, 2022 Maximum shares as of December 31, 2022 Fair value of plan (in EUR mn) as of December 31, 2022¹ Provision (in EUR mn) as of December 31, 2022¹ 1 Excluding incidental wage costs 2022 plan 01/01/2022 12/31/2024 03/31/2025 2021 plan 01/01/2021 12/31/2023 03/31/2024 2020 plan 01/01/2020 12/31/2022 03/31/2023 2019 plan 01/01/2019 12/31/2021 03/31/2022 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 314,218 708,987 75% of the respective Target Long Term Incentive 601,126 847,200 75% of the respective Target Long Term Incentive 245,060 452,909 75% of the respective Target Long Term Incentive — — 15 3 29 14 12 9 — — 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 align- ment in OMV, combining the interests of management and shareholders via a long-term investment in re- stricted shares. The holding period of the Equity Defer- ral is three years from vesting. The plan also seeks to prevent inadequate risk-taking. The Annual Bonus is capped at 180% of the target An- nual Bonus. A minimum of one third of the Annual Bo- nus is granted in shares. The determined bonus achievement is settled per March 31 following the pe- riod end whereby at the statement of financial position date the target achievements and the share price is es- timated (the latter on basis of market quotes). Given the volatility of commodity prices and market conditions inherent to the industry, the variable remu- neration plans give the Remuneration Committee the authority (in line with general practices in the Oil and Gas industry) to adjust the threshold, target, and maxi- mum levels based on actual oil/gas prices and EUR/USD exchange rates compared with assumptions at the time the targets were set. Adjustments are ap- plied in both directions. They are determined by the Re- muneration Committee and published in the Remunera- tion Report. The granted shares after deduction of taxes are transferred to a trustee deposit, managed by the Company, to be held for three years. In 2022 expenses amounting to EUR 3 mn were rec- orded with a corresponding increase in equity (2021: EUR 3 mn). 210 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Personal investment held in shares1 Active Executive Board members Stern Pleininger2 Florey van Koten Former Executive Board members Seele3 Skvortsova4 Gangl5 Total — Executive Board Other senior managers Total personal investment 12/31/2022 17,158 58,227 46,068 1,084 16,157 3,335 16,680 158,709 237,825 396,534 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 Johann Pleininger resigned from the Executive Board effectively December 31, 2022. 3 Rainer Seele resigned from the Executive Board effectively August 31, 2021. 4 Elena Skvortsova resigned from the Executive Board effectively October 31, 2022. 5 Thomas Gangl took part in 2019 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. He resigned from the Executive Board effectively March 31, 2021. 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 2022 2021 15 7 22 28 10 38 211 OMV ANNUAL REPORT 2022 / 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 Group OMV Group 1 Calculated as the average of the month’s end numbers of employees during the year 2022 2021 6,664 7,837 7,833 22,334 6,939 8,852 7,753 23,544 The decrease in the number of employees in the OMV Group, excluding OMV Petrom Group and Borealis Group, was impacted by the sale of Gas Connect Aus- tria in 2021. 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 2022 2021 Audit of Group accounts and year-end audit Other assurance services Tax advisory services Other services Total Group auditor 3.47 0.60 0.19 0.40 4.65 thereof Ernst&Young Wirtschafts- prüfungsgesell- schaft m.b.H 1.58 0.48 — 0.01 2.07 thereof Ernst&Young Wirtschafts- prüfungsgesell- schaft m.b.H 1.51 0.31 — 0.01 1.84 Group auditor 3.55 0.53 0.56 0.07 4.70 212 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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. In 2022, 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 were not based on market prices but on cost plus defined margin. Transactions with equity-accounted investments – Sales and Receivables In EUR mn 2022 2021 Sales and other income Trade receivables Sales and other income Trade receivables Abu Dhabi Oil Refining Company ADNOC Global Trading LTD Bayport Polymers LLC Borouge investments1 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)2 Société d'Intérêt Collectif Agricole Laignes Agrifluides (SICA Laignes Agrifluides)2 Trans Austria Gasleitung GmbH3 Total 2 3 8 677 1 119 141 8 — 5 — 963 2 1 3 151 0 59 22 0 — — — 237 3 3 6 439 1 43 124 4 1 7 4 635 2 1 1 111 0 0 17 0 — 1 — 134 1 Includes Borouge PLC, Abu Dhabi Polymers Company Limited (Borouge) and Borouge Pte. Ltd. For more details see Note 16 – Equity-accounted investments. 2 Was reclassified to held for sale as part of the nitrogen business unit disposal group of Borealis 3 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria disposal group. Additional sales transactions in the amount of EUR 293 mn took place with Erdöl-Lagergesellschaft m.b.H., which are not disclosed in the above table as netting with expenses was applied in the income state- ment. 213 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Transactions with equity-accounted investments – Purchases and Payables In EUR mn ADNOC Global Trading LTD Borouge investments1 Chemiepark Linz Betriebsfeuerwehr GmbH2 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 Severneftegazprom3 PetroPort Holding AB Società Italiana per l'Oleodotto Transalpino S.p.A. Trans Austria Gasleitung GmbH4 Total 2022 2021 Purchases and services received Trade payables Purchases and services received Trade payables 32 416 3 48 3 208 10 116 5 24 4 2 — 873 — 88 0 7 — 27 2 — — — 0 0 — 124 — 501 4 29 3 81 0 74 10 127 3 — 11 843 — 108 0 2 — 63 — — 0 14 0 — — 188 1 Includes Borouge PLC, Abu Dhabi Polymers Company Limited (Borouge) and Borouge Pte. Ltd. For more details see Note 16 – Equity-accounted investments. 2 Was reclassified to held for sale as part of the nitrogen business unit disposal group of Borealis 3 OJSC Severneftegazprom was deconsolidated as of March 1, 2022, and reclassified to other investments at fair value through profit or loss (FVTPL). 4 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria disposal group. Dividends distributed from equity-accounted investments In EUR mn Abu Dhabi Oil Refining Company Abu Dhabi Petroleum Investments LLC ADNOC Global Trading LTD Bayport Polymers LLC Borouge investments1 Deutsche Transalpine Oelleitung GmbH EEX CEGH Gas Exchange Services GmbH Neochim AD2 OJSC Severneftegazprom3 Pearl Petroleum Company Limited Società Italiana per l'Oleodotto Transalpino S.p.A. Transalpine Ölleitung in Österreich Gesellschaft m.b.H. Trans Austria Gasleitung GmbH4 Dividend distributed from equity-accounted investments 2022 116 5 43 — 592 1 1 1 — 41 1 1 — 803 2021 — — — 21 1,918 1 1 0 17 30 1 0 9 1,999 1 Includes Borouge PLC, Abu Dhabi Polymers Company Limited (Borouge) and Borouge Pte. Ltd. For more details see Note 16 – Equity-accounted investments. 2 Was reclassified to held for sale as part of the nitrogen business unit disposal group of Borealis 3 OJSC Severneftegazprom was deconsolidated as of March 1, 2022, and reclassified to other investments at fair value through profit or loss (FVTPL). 4 Trans Austria Gasleitung GmbH was sold as of May 31, 2021, as part of the Gas Connect Austria Disposal Group. 214 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Other balances with equity-accounted investments In EUR mn Kilpilahden Voimalaitos Oy Bayport Polymers LLC Renasci N.V. Loan receivables Bayport Polymers LLC Freya Bunde-Etzel GmbH & Co. KG Other financial receivables Borouge investments1 Bayport Polymers LLC Contract assets Kilpilahden Voimalaitos Oy Renasci N.V. Advance payments C2PAT GmbH & Co KG Bayport Polymers LLC Other financial liabilities Erdöl-Lagergesellschaft m.b.H. Contract liabilities Erdöl-Lagergesellschaft m.b.H. Other non-financial liabilities 2022 40 657 — 697 29 8 37 8 — 8 11 10 21 1 28 29 100 100 27 27 2021 18 987 12 1,017 — 8 8 8 7 16 12 10 22 1 — 1 120 120 — — 1 Includes Borouge PLC, Abu Dhabi Polymers Company Limited (Borouge) and Borouge Pte. Ltd. For more details see Note 16 – Equity-accounted investments. 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 1,313 mn (2021: EUR 1,236 mn). On April 19, 2022, Bayport Polymers LLC, which is ac- counted for using the equity method, partially repaid the loan towards the Group in the amount of EUR 602 mn. The repayment was financed from the two tranches of senior notes in the amount of EUR 324 mn and EUR 278 mn, which mature in 2027 and 2032 respec- tively. Senior notes issued by Bayport Polymers LLC are guaranteed by Borealis AG and therefore a finan- cial liability in the amount of EUR 28 mn was recog- nized for the financial guarantee. For more details see Note 28 – Risk management, section ‘Credit risk man- agement’. The undrawn financing commitments pro- vided to Bayport Polymers LLC amounted to EUR 46 mn as of December 31, 2022 (December 31, 2021: EUR 251 mn). A further decrease in the position loan receivables was mainly related to debt conversion into newly issued shares of Renasci N.V. in 2022. At year end 2021, the Group had further financing commitments to grant a convertible loan towards Renasci N.V. amounting to EUR 12 mn. Due to the debt conversion the total amount was completely drawn in 2022. For more de- tails see Note 16 – Equity-accounted investments. Furthermore, a capital contribution amounting to EUR 408 mn was paid to Borouge 4 LLC in 2022. At the reporting date, financing commitments towards Kilpilahden Voimalaitos Oy amounted to EUR 10 mn (December 31, 2021: EUR 16 mn). The entitlements are dependent on the fulfilment of specific events, as defined in the underlying contracts. Other non-financial liabilities in 2022 towards Erdöl- Lagergesellschaft m.b.H. refer to product swaps. The contract liabilities towards Erdöl-Lagergesellschaft m.b.H. are related to a long-term contract for rendering of services. 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 under the control of the Republic of Austria, considered a re- lated party. OMV has transactions at arm´s length in the normal course of business mainly with Öster- reichische Post Aktiengesellschaft, VERBUND AG, Österreichische Bundesbahnen-Holding Aktiengesell- schaft, Bundesbeschaffung GmbH and their subsidiar- ies. In July 2022, the strategic energy cooperation between OMV and VERBUND has commissioned the expansion 215 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS of the ground-mounted photovoltaic plant in Schönkirchen-Reyersdorf, Austria, with equal stakes of both parties in the joint project. Furthermore, OMV and VERBUND AG have a cooperation agreement related to the photovoltaic plant in Lobau, Austria, which OMV has started up in 2022. In 2021, OMV closed the transaction to sell its 51% stake in Gas Connect Austria to VERBUND AG. Moreo- ver, OMV finalized in 2021 the sale of its 40% share in SMATRICS GmbH & Co KG and its 40% share in E- Mobility Provider Austria GmbH to VERBUND AG. Fur- thermore, OMV founded in 2021 together with Lafarge Perlmooser GmbH and VERBUND Energy4Business GmbH a joint venture for the joint planning and con- struction of a full-scale plant by 2030 to capture CO2 and process it into synthetic fuels, plastics and other chemicals. Key management personnel compensation Remuneration received by the Executive Board In EUR mn 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 2022, there were supplies of goods and services for instance to Compañía Española de Petróleos, S.A. (CEPSA), Abu Dhabi Company for Off- shore Petroleum Operations Ltd, NOVA Chemicals Corporation (NOVA), Abu Dhabi National Oil Company (ADNOC) and ADNOC Trading Limited. Furthermore, OMV cooperates with ADNOC in several Exploration & Production arrangements and closed strategic equity partnerships with ADNOC, covering both the ADNOC Refining business and a Trading Joint Venture. In 2022 OMV and ADNOC signed a Memorandum of Under- standing to explore new partnerships in delivieries of liquefied natural gas. active members of the Executive Board as of December 31, 2022 former members of the Executive Board 2022 Stern Pleininger2 1.47 1.59 Florey van Koten Skvortsova4 Seele6 Gangl7 Leitner9 — 1.16 0.12 0.85 1.57 1.55 Short-term benefits Fixed (base salary) Variable (cash bonus)1 Benefits in kind Post employment benefits Pension fund contributions Share based benefits Variable (Equity Deferral 2021) Variable (LTIP 2019) Remuneration received by the Executive Board 0.99 0.59 0.01 0.25 0.25 0.29 0.29 — 0.75 0.71 0.01 0.19 0.19 1.33 0.44 0.90 0.81 0.69 0.053 0.20 0.20 1.03 0.34 0.70 0.58 0.25 0.03 0.14 0.14 0.10 0.10 — 0.58 0.50 0.095 0.14 0.14 0.21 0.21 — 0.55 1.02 0.01 0.14 0.14 3.13 0.43 2.70 Total 8.32 4.25 3.87 0.20 1.06 — — — — — 0.70 1.06 7.16 — 0.12 — — — 0.37 0.05 0.328 — 0.70 1.85 5.31 2.12 3.00 2.78 1.10 1.51 4.84 0.49 0.70 16.54 1 The variable components relate to target achievement in 2021, for which bonuses were paid in 2022. 2 Johann Pleininger resigned from the Executive Board effectively December 31, 2022 and his contract ends on April 30, 2023. 3 Including schooling costs and related taxes 4 Elena Skvortsova resigned from the Executive Board effectively October 31, 2022 and her contract ends on June 14, 2023. 5 Including rental and storage costs and related taxes. 6 Rainer Seele resigned from the Executive Board effectively August 31, 2021 and his contract ended on June 30, 2022. 7 Thomas Gangl resigned from the Executive Board effectively March 31, 2021. 8 Thomas Gangl received additionally a cash payment in the amount of EUR 0.08 mn based on the Senior Manager LTIP 2019. 9 Manfred Leitner resigned from the Executive Board effectively June 30, 2019. 216 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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 Stern3 Pleininger 1.77 0.69 Florey Skvortsova van Koten7 Seele8 Gangl9 Leitner12 — 0.65 1.77 0.30 1.38 2.55 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 0.69 — — 0.01 0.18 0.18 — — — — 0.75 — 1.01 0.01 0.19 0.19 — 1.09 0.32 0.76 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 — — 0.41 1.08 0.02 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 ended 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. 217 OMV ANNUAL REPORT 2022 / 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 2022 2021 25.1 1.4 1.1 5.8 1.2 34.6 25.8 1.3 2.2 3.5 1.8 34.6 1 In 2022 there were on average 47 top executives (2021: 43) based on the months of service in the Group. 2 2022 included remuneration of Martijn van Koten for his previous function as Executive Board member in Boralis Group and 2021 included remuneration of Alfred Stern and Martijn van Koten in their previous 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 2022, remuneration expenses for the Supervisory Board amounted to EUR 1.1 mn (2021: 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 2022, OMV transferred trade receivables amounting to EUR 5,746 mn to Carnuntum DAC (2021: EUR 4,573 mn). As of December 31, 2022, OMV held seller participa- tion notes amounting to EUR 168 mn (2021: EUR 95 mn) and complementary notes amounting to EUR 105 mn (2021: EUR 89 mn) in Carnuntum DAC shown in other financial assets. As of December 31, 2022, the maximum exposure to loss from the securiti- zation program was EUR 196 mn (2021: EUR 110 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 37 mn in 2022 (2021: EUR 29 mn). Inter- est income on the notes held in Carnuntum DAC amounted to EUR 5 mn in 2022 (2021: EUR 2 mn). In addition, OMV received a service fee for the debtor management services provided for the receivables sold. 218 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 37 Subsequent events As of January 1, 2023 the Group introduced a new cor- porate structure, designed to fully enable the delivery of Strategy 2030. Following the reorganization and start- ing from Q1/23, the Group will report on the following business segments: Chemicals & Materials, Fuels & Feedstock (former Refining & Marketing) and Energy (former Exploration & Production). As part of the intro- duction of the new corporate structure, Gas & Power Eastern Europe, which includes Supply, Marketing and Trading of gas in Romania and Turkey and one gas- fired power plant in Romania, was transferred from Fuels & Feedstock to Energy business segment. The internal reporting and the relevant information provided to the chief operating decision maker in order to assess performance and allocate resources have been up- dated to reflect the new organizational structure. Com- parative information for 2022 has been adjusted retro- spectively and will be published together with the Q1/23 report. On January 2, 2023, the sale of Borealis’ shares in Rosier SA to YILDIRIM Group’s YILFERT BENELUX B.V. has been completed. Following the completion of the sale, Borealis no longer holds any shares in Ros- ier SA. On January 11, 2023, Borealis has further increased its stake in Renasci N.V. (Renasci) from 27.42% to 50.01%, signaling ongoing confidence in the potential of Renasci’s patented SCP concept to drive the circular transformation. The stake increase was reached through a capital increase of EUR 5 mn and the acqui- sition of 35,719 shares for EUR 10.5 mn. Following this transaction, Renasci will become a fully consolidated subsidiary in 2023 (2022: at-equity accounted). On February 3, 2023 Borouge 4 LLC as the borrower and Borealis AG as lender, entered into a shareholder loan agreement (SHL) in the amount of USD 1,068 mn to part finance the Borouge 4 CAPEX requirements of Borouge 4 LLC. The SHL is structured as a facility with a 5 year tenor. Borealis retains the right to accelerate the prepayment of the outstanding amounts at the point of reintegration. On February 27, 2023, the Executive Board of OMV has decided to explore the possibilities of selling the E&P assets in the Asia-Pacific region and to initiate the related sales process for the potential divestment of its 50% stake in the issued share capital of SapuraOMV Upstream Sdn. Bhd. in Malaysia and 100% of the shares in OMV New Zealand Limited. A potential di- vestment aims at optimizing the E&P portfolio in line with the OMV Strategy 2030. As part of the sales process, OMV, in coordination with competent regulators and governmental authorities, will invite potentially interested parties, in a first step, to submit expressions of interest and, in a second step, to submit binding offers. The sales process is expected to take place over the next months. A potential sale is still subject to the approval of the Supervisory Board of OMV and competent governmental authorities. 219 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 38 Direct and indirect investments of OMV Aktiengesellschaft Changes in consolidated group Name of company Registered Office Type of Change1 Effective date Chemicals & Materials Eifanes Beteiligungsverwaltungs GmbH2 Borouge 4 LLC3 RecycleMe Plastics GmbH3,4 Borouge PLC3 Abu Dhabi Polymers Company Limited (Borouge)3,5 Borouge Pte. Ltd.3,6 Refining & Marketing OMV Petrom Biofuels SRL OMV Retail Deutschland GmbH OMV Supply & Trading AG PETRODYNE-CSEPEL Zrt. Exploration & Production JSC GAZPROM YRGM Development OJSC Severneftegazprom3 OMV (YEMEN) Al Mabar Exploration GmbH OMV Block 70 Upstream GmbH OMV Jardan Block 3 Upstream GmbH OMV Myrre Block 86 Upstream GmbH SAPURAOMV UPSTREAM (MALAYSIA) SDN. BHD. OMV Abu Dhabi E&P GmbH OMV Gas Marketing & Trading Italia S.r.l. OMV Bina Bawi GmbH OMV Offshore Morondava GmbH OMV Middle East & Africa GmbH OMV Offshore (Namibia) GmbH OMV (NAMIBIA) Exploration GmbH OMV Petroleum Exploration GmbH S. PARC FOTOVOLTAIC ISALNITA S.A.7 S. PARC FOTOVOLTAIC ROVINARI EST S.A.7 S. PARC FOTOVOLTAIC TISMANA 1 S.A.7 S. SOLARIST TISMANA 2 S.A.7 SapuraOMV Upstream (Malaysia) Inc. SapuraOMV Upstream (Southeast Asia) Inc. OMV Green Energy GmbH OE SASR Beta Achtundvierzigste Beteiligungsverwaltung GmbH8 Vienna Abu Dhabi Herborn Abu Dhabi Abu Dhabi Singapore First consolidation First consolidation First consolidation First consolidation Deconsolidation (M) Partial disposal March 9, 2022 March 11, 2022 April 19, 2022 April 28, 2022 June 1, 2022 June 1, 2022 Bucharest Burghausen Baar Budapest First consolidation Deconsolidation Deconsolidation (L) Deconsolidation (M) March 31, 2022 May 1, 2022 August 30, 2022 December 31, 2022 St. Petersburg Krasnoselkup Vienna Vienna Vienna Vienna Kuala Lumpur Vienna Milan Vienna Vienna Vienna Vienna Vienna Vienna Târgu Jiu Târgu Jiu Târgu Jiu Târgu Jiu Nassau Nassau Vienna Deconsolidation (T) March 1, 2022 Deconsolidation (T) March 1, 2022 Deconsolidation (I) March 31, 2022 Deconsolidation (I) March 31, 2022 Deconsolidation (I) March 31, 2022 Deconsolidation (I) March 31, 2022 March 31, 2022 First consolidation Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 Deconsolidation (I) September 30, 2022 October 27, 2022 First consolidation October 27, 2022 First consolidation October 27, 2022 First consolidation October 27, 2022 First consolidation November 22, 2022 Deconsolidation (L) November 22, 2022 Deconsolidation (L) November 23, 2022 First consolidation Vienna First consolidation (A) December 12, 2022 1 “First consolidation” refers to newly formed companies, while “First consolidation (A)” indicates the acquisition of a company. “Deconsolidation (M)” refers to companies that were deconsolidated following a merger into another Group company. “Deconsolidation (L)” refers to subsidiaries that were liquidated. “Decon- solidation (T)” refers to companies that were transferred to other investments at fair value through profit or loss (FVTPL), for further details see Note 2 - Account- ing policies, judgements and estimates. Companies marked with “Deconsolidation (I)” have been deconsolidated due to immateriality. 2 Renamed to Borealis Middle East Holding GmbH 3 Company consolidated at-equity 4 Renamed to Recelerate GmbH 5 Shares transferred to Borouge PLC before the ADX listing. ADX listing changed OMV’s share in Abu Dhabi Polymers Company Limited through the shareholding in Borouge PLC from 40% to 36%. For further details see Note 16 – Equity-accounted investments. 6 Shares partly transferred to Borouge PLC before the ADX listing. ADX listing changed OMV’s share in Borouge Pte. Ltd. from 49.15% to 45.76% (thereof 15.25% direct share and 30.51% through shareholding in Borouge PLC). For further details see Note 16 – Equity-accounted investments. 7 Joint operation; accounting for OMV’s share of assets, obligations for liabilities, share of income and expenses 8 Renamed to OMV Austria Geothermal GmbH 220 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS For further information on major acquisitions and dis- posals refer to Note 3 – Changes in group structure. Number of consolidated companies 2022 2021 Full consolidation Equity consolidation Joint operation1 Full consolidation Equity consolidation January 1 Included for the first time Deconsolidated during the year December 31 thereof domiciled and operating abroad thereof domiciled in Austria and operating abroad 136 5 (18) 123 88 10 22 3 (2) 23 17 — — 4 — 4 4 — 151 3 (18) 136 93 18 23 3 (4) 22 16 — 1 Accounting for OMV’s share of assets, obligations for liabilities, share of income and expenses 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, 2022 Equity interest in % as of December 31, 2021 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, Pasadena2 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 Borealis Argentina SRL, Buenos Aires BOREALIS ASIA LIMITED, Hong Kong Borealis BoNo Holdings LLC, Port Murray (BBNHUS)2 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 BORAAG BCHIFR BCHIFR BNOVUS BSVSWE BHOLAT OMVRM OMV AG BORAAG BAGMAT BORAAG BPOBE BORAAG BORAAG BSVSWE BORAAG BUS BORAAG BORAAG BORAAG BORAAG BFR BORAAG BORAAG BUS BORAAG BORAAG BPOBE BORAAG AEJ NC NC-I AEJ C C C C C NC NC C C NC NC NC C C NC C NC NC C 100.00 34.00 50.00 100.00 39.00 32.67 3.33 100.00 100.00 90.00 10.00 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 40.00 100.00 34.00 50.00 100.00 39.00 32.67 3.33 100.00 100.00 90.00 10.00 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 10.00 100.00 221 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company BSVSWE BORAAG BABSWE BORAAG BORAAG BPOBE BORAAG BLATAT BLATAT BLATAT BLATAT BFR BORAAG BLATAT BLATAT BLATAT BORAAG BLATAT BLATAT BLATAT BORAAG BCOMUS BORAAG BORAAG BABSWE BORAAG BORAAG BORAAG BSVSWE BORAAG BORAAG BORAAG BSVSWE BORAAG BORAAG BSVSWE BORAAG BORAAG BORAAG BFR BORAAG BORAAG BORAAG BFR BORAAG BORAAG BORAAG BORAAG Type of consoli- dation1 C C C C C NC NC NC C C C NC NC NC NC NC NC NC NC C NC NC C NC NC C C C C NC NC NC C C NC NC NC C C C C Equity interest in % as of December 31, 2022 0.00 100.00 100.00 100.00 Equity interest in % as of December 31, 2021 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 0.00 100.00 100.00 0.00 100.00 100.00 99.99 0.01 100.00 100.00 100.00 0.00 100.00 100.00 0.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 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 0.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 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., České Budějovice Borealis L.A.T doo, Beograd, Belgrade 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 Middle East Holding GmbH, Vienna (BORMEH) 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 (BPODE) Borealis Polymers N.V., Beringen (BPOBE) Borealis Polymers Oy, Porvoo Borealis Polyolefine GmbH, Schwechat (BPOAT) Borealis Polyolefins d.o.o., Zagreb Borealis Polyolefins S.R.L., Bucharest Borealis Polyolefins s.r.o., Bratislava Borealis Produits et Engrais Chimiques du Rhin S.A.S., Ottmarsheim Borealis Química España S.A., Barcelona Borealis RUS LLC, Moscow Borealis s.r.o., Prague Borealis Services S.A.S., Paris Borealis Sverige AB, Stenungsund (BSVSWE) Borealis Technology Oy, Porvoo BOREALIS UK LTD, Manchester Borealis USA Inc., Port Murray (BUS) 222 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Borouge 4 LLC, Abu Dhabi Borouge PLC, Abu Dhabi (BOROLC) Borouge Pte. Ltd., Singapore 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 Hallbar Kemi i Stenungsund, Stenungsund 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) PetroPort Holding AB, Stenungsund Recelerate GmbH, Herborn Renasci N.V., Ghent Rosier France S.A.S., Arras Rosier Nederland B.V., Sas van Gent Rosier S.A., Moustier (BROSBE) 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)2 STOCKAM G.I.E., Grand-Quevilly Refining & Marketing Abu Dhabi Oil Refining Company, Abu Dhabi Abu Dhabi Petroleum Investments LLC, Abu Dhabi (ADPINV) ADNOC Global Trading LTD , Abu Dhabi Aircraft Refuelling Company GmbH, Vienna Autobahn - Betriebe Gesellschaft m.b.H., Vienna Avanti Deutschland GmbH, Berchtesgaden BSP Bratislava-Schwechat Pipeline GmbH, Vienna Parent company BORMEH BORMEH BOROLC BORMEH BORAAG BAGMAT BORAAG BORAAG OMVD BPODE OMVD BPODE BABSWE BORAAG BCHIFR BAGRFR BABSWE BABSWE BABSWE BSVSWE BORAAG BORAAG BORAAG BFEBGR BBNHUS BSBHUS OMVRM BABSWE BORAAG BCIRC BROSBE BROSBE BORAAG BCHIFR BAGRFR BCHIFR BLATAT BUS BCHIFR BAGRFR OMVRM OMVRM OMVRM OMVRM OMVRM OMVRM OMVRM Equity interest in % as of December 31, 2021 Type of consoli- dation1 AEJ AEJ AEJ Equity interest in % as of December 31, 2022 40.00 36.00 84.75 15.25 NC-I C C NC-I AEA C C NC-I NC-I NC-I NC NC-I C C AEA C C AEJ AEJ AEA C C C NC-I NC-I C NC AEA AEJ AEA NC-I NC-I C NC-I 47.50 99.75 100.00 15.46 7.73 20.66 10.33 80.00 100.00 40.00 9.98 20.00 25.00 100.00 0.00 20.00 100.00 100.00 20.30 50.00 50.00 100.00 50.00 50.00 27.42 100.00 100.00 98.09 39.97 9.93 25.00 0.00 100.00 99.00 1.00 15.00 25.00 15.00 33.33 47.19 100.00 26.00 50.00 47.50 98.71 100.00 15.46 7.73 20.66 10.33 80.00 100.00 40.00 9.98 20.00 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 15.00 25.00 15.00 33.33 47.19 100.00 26.00 223 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Equity interest in % as of December 31, 2022 50.00 50.00 32.26 100.00 55.60 29.00 100.00 25.10 100.00 99.90 0.10 100.00 100.00 100.00 100.00 100.00 100.00 0.00 75.00 25.00 100.00 100.00 92.25 99.96 99.96 0.04 100.00 100.00 100.00 100.00 40.00 100.00 20.00 33.33 32.26 50.00 33.33 32.26 Equity interest in % as of December 31, 2021 50.00 50.00 32.26 51.72 48.28 55.60 29.00 100.00 25.10 100.00 99.90 0.10 100.00 100.00 100.00 100.00 100.00 100.00 0.00 100.00 100.00 100.00 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 65.00 49.00 100.00 65.00 49.00 100.00 Type of consoli- dation1 NC AEA C AEA AEA NC NC-I C C C C C C C C C C C C C C C C C C NC C AEJ C C NC-I NC-I AEA NC-I NC-I AEA C AEA C Parent company BPOAT OMVRM OMVD PDYNHU OHUN OMVRM OMVRM OMVRM SWJS OMVRM PETROM OMVRM OMVRM OMVD OMVRM OMVRM OMVRM PETROM ROMAN PETROM OMVRM PETROM OMVRM OMVD OMVRM OMVRM PETROM OMVRM OMVRM OMVRM OMVRM OTRAD OGI ADPINV OHUN PETROM OMVRM OMVRM OMVRM OHUN OMVD OMVRM OGI HUB NZEA BTF Industriepark Schwechat GmbH, Schwechat Deutsche Transalpine Oelleitung GmbH, Munich DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft., Budapest Erdöl-Lagergesellschaft m.b.H., Lannach3 GENOL Gesellschaft m.b.H., Korneuburg KSW Beteiligungsgesellschaft m.b.H., Vienna (SWJS) KSW Elektro- und Industrieanlagenbau Gesellschaft m.b.H., Feldkirch 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 OMV Gaz Iletim A.S., Istanbul OMV Hungária Ásványolaj Korlátolt Felelösségü Társaság, Budapest (OHUN) OMV PETROM Aviation S.R.L., Otopeni OMV Petrom Biofuels 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 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 Società Italiana per l'Oleodotto Transalpino S.p.A., Trieste SuperShop Marketing Kft., Budapest TGN Tankdienst-Gesellschaft Nürnberg GbR, Nuremberg Transalpine Ölleitung in Österreich Gesellschaft m.b.H., Matrei in Osttirol Exploration & Production Central European Gas Hub AG, Vienna (HUB)4 EEX CEGH Gas Exchange Services GmbH, Vienna4 Energy Infrastructure Limited, Wellington 224 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company Energy Petroleum Holdings Limited, Wellington Energy Petroleum Investments Limited, Wellington Freya Bunde-Etzel GmbH & Co. KG, Bonn4 JSC GAZPROM YRGM Development , St. Petersburg5,6 OJSC Severneftegazprom, Krasnoselkup6 OMV Austria Geothermal GmbH, Vienna OMV (Berenty) Exploration GmbH, Vienna OMV (IRAN) onshore Exploration GmbH, Vienna OMV (Mandabe) Exploration GmbH, Vienna OMV (NAMIBIA) Exploration GmbH , Vienna6 OMV (NORGE) AS, Stavanger OMV (Tunesien) Production GmbH, Vienna OMV (TUNESIEN) Sidi Mansour GmbH, Vienna OMV (Yemen Block S 2) Exploration GmbH, Vienna OMV (YEMEN) Al Mabar Exploration GmbH, Vienna6 OMV (YEMEN) South Sanau Exploration GmbH, Vienna OMV Abu Dhabi E&P GmbH, Vienna6 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 Beteiligungsverwaltungs GmbH, Vienna OMV Bina Bawi GmbH, Vienna6 OMV Block 70 Upstream GmbH, Vienna6 OMV East Abu Dhabi Exploration GmbH, Vienna OMV Exploration & Production GmbH, Vienna (OMVEP) OMV EXPLORATION & PRODUCTION LIMITED, Douglas OMV Gas Logistics Holding GmbH, Vienna (OGI)4 OMV Gas Marketing & Trading Belgium BVBA, Brussels4 OMV Gas Marketing & Trading Deutschland GmbH, Dusseldorf4 OMV Gas Marketing & Trading GmbH, Vienna (ECOGAS)4 OMV Gas Marketing & Trading Hungária Kft., Budapest4 OMV Gas Marketing & Trading Italia S.r.l., Milan4,6 OMV Gas Marketing Trading & Finance B.V., Amsterdam4 OMV Gas Storage Germany GmbH, Cologne (OGSG)4 OMV Gas Storage GmbH, Vienna4 OMV Green Energy GmbH, Vienna (OGREEN) OMV Jardan Block 3 Upstream GmbH, Vienna6 OMV Maurice Energy GmbH, Vienna OMV Middle East & Africa GmbH, Vienna6 OMV Myrre Block 86 Upstream GmbH, Vienna6 OMV New Zealand Limited, Wellington (NZEA) OMV NZ Production Limited, Wellington OMV OF LIBYA LIMITED, Douglas OMV Offshore (Namibia) GmbH, Vienna (ONAFRU)6 OMV Offshore Bulgaria GmbH, Vienna OMV Offshore Morondava GmbH, Vienna6 OMV Oil and Gas Exploration GmbH, Vienna OMV Oil Exploration GmbH, Vienna NZEA NZEA OGSG OMVEP OMVEP OGREEN OMVEP OMVEP OMVEP ONAFRU OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP OMV AG OMVEP OAUST OAUST OMV AG PETEX OMVEP OMVEP OMV AG OMVEP OMV AG ECOGAS ECOGAS OMVRM ECOGAS ECOGAS OFS OMVDS OGI OMVEP OMVEP OMVEP OMVEP OMVEP OMVEP NZEA OMVEP OMVEP PETROM OMVEP OMVEP OMVEP Equity interest in % as of December 31, 2022 100.00 100.00 39.99 — 24.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Type of consoli- dation1 C C AEA NC-I NC-I C NC C NC NC C C NC C NC NC NC C C C C NC NC NC NC NC NC C NC C C C C C NC C C C C NC NC NC NC C C C NC C NC NC C Equity interest in % as of December 31, 2021 100.00 100.00 39.99 — 24.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 225 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Equity interest in % as of December 31, 2022 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 50.00 50.00 50.00 50.00 99.00 1.00 100.00 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 10.00 100.00 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 50.00 100.00 100.00 100.00 100.00 100.00 100.00 50.00 Type of consoli- dation1 C NC NC NC NC C C NC C C AEA NC NC C PC PC PC PC C C C C C C C C C C C C NC C Parent company OMVEP OMVEP OMVEP OMVEP NZEA PETROM PETROM OEPA OMVEP OMVEP OUPI OMVEP PETROM OMVEP PETROM PETROM PETROM PETROM SEUPMY SEMXMY SEUPMY SEOCMY SOUPMY SESABH SEUPMY SEAMMY SEOCMY SEUPMY SEUPMY SEMYBH SEUPMY SEAUMY SENZMY OMVEP PETROM NC-I 20.00 20.00 OMV AG SNO SNO SNO SNO OMV AG OMV AG C C C C C NC C 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 OMV Oil Production GmbH, Vienna OMV Orient Hydrocarbon GmbH, Vienna OMV Orient Upstream GmbH, Vienna OMV Petroleum Exploration GmbH, Vienna (PETEX)6 OMV Petroleum Pty Ltd, Perth OMV PETROM E&P BULGARIA S.R.L., Bucharest4,7 OMV PETROM GEORGIA LLC, Tbilisi OMV Proterra GmbH, Vienna OMV Russia Upstream GmbH, Vienna OMV Upstream International GmbH, Vienna (OUPI) Pearl Petroleum Company Limited, Road Town PEI Venezuela Gesellschaft mit beschränkter Haftung, Burghausen PETROM EXPLORATION & PRODUCTION LIMITED, Douglas Preussag Energie International GmbH, Burghausen S. PARC FOTOVOLTAIC ISALNITA S.A., Târgu Jiu S. PARC FOTOVOLTAIC ROVINARI EST S.A., Târgu Jiu S. PARC FOTOVOLTAIC TISMANA 1 S.A., Târgu Jiu S. SOLARIST TISMANA 2 S.A., Târgu Jiu SapuraOMV Block 30, S. de R.L. de C.V., Mexico City SapuraOMV Upstream (Americas) Sdn. Bhd., Kuala Lumpur (SEAMMY) SapuraOMV Upstream (Australia) Sdn. Bhd., Kuala Lumpur (SEAUMY) SapuraOMV Upstream (Holding) Sdn. Bhd., Kuala Lumpur (SEUPMY) SapuraOMV Upstream (Malaysia) Inc., Nassau SAPURAOMV UPSTREAM (MALAYSIA) SDN. BHD., Kuala Lumpur SapuraOMV Upstream (Mexico) Sdn. Bhd., Kuala Lumpur (SEMXMY) SapuraOMV Upstream (NZ) Sdn. Bhd., Kuala Lumpur (SENZMY) SapuraOMV Upstream (Oceania) Sdn. Bhd., Kuala Lumpur (SEOCMY) SapuraOMV Upstream (Sarawak) Inc., Nassau SapuraOMV Upstream (Southeast Asia) Inc., Nassau (SESABH) SapuraOMV Upstream (Western Australia) Pty Ltd, Perth SapuraOMV Upstream JV Sdn. Bhd., Kuala Lumpur SapuraOMV Upstream Sdn. Bhd., Kuala Lumpur (SOUPMY) Corporate & Other ASOCIATIA ROMANA PENTRU RELATIA CU INVESTITORII, Bucharest 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 226 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of at least 20% Parent company SNO PETROM OMV AG PETROM BORAAG OMVRM BORAAG OMVRM OMVRM OMV AG OMVD OMVDS OMVD OMVDS OMV AG OMV AG Type of consoli- dation1 C C C AEJ AEJ C C C C C Equity interest in % as of December 31, 2022 75.00 25.00 100.00 100.00 Equity interest in % as of December 31, 2021 75.00 25.00 100.00 99.99 25.00 25.00 25.00 25.00 90.00 10.00 99.99 0.01 99.99 0.01 100.00 51.16 25.00 25.00 25.00 25.00 90.00 10.00 99.99 0.01 99.99 0.01 100.00 51.01 OMV Petrom Global Solutions SRL, Bucharest OMV Solutions GmbH, Vienna (SNO) PETROMED SOLUTIONS SRL, Bucharest Assigned to multiple segments8 C2PAT GmbH & Co KG, Vienna C2PAT GmbH, Vienna OMV Deutschland GmbH, Burghausen (OMVD) OMV Deutschland Marketing & Trading GmbH & Co. KG, Burghausen9 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 PC Joint operation; accounting for OMV’s share of assets, obligations for liabilities, share of income and expenses 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 Incorporated in Wilmington 3 Despite majority interest not fully consolidated, but accounted for at-equity due to absence of control 4 Segment assignment was changed compared to 2021. 5 Economic share 99.99% 6 Type of consolidation was changed compared to 2021. 7 Company name changed compared to 2021. 8 Assigned to the relevant segments in the segment reporting 9 In the 2022 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 companies which are not consolidated either have low business volumes or are distribution compa- nies; the total sales, net income/losses and equity of such companies represent less than 1% of the Group totals. 227 OMV ANNUAL REPORT 2022 / 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 31.12.2022 % ownership 31.12.2021 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 Sarb & Umm Lulu Ghasha Nature of activities Principal place of business % ownership 31.12.2022 % ownership 31.12.2021 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 Offshore development and production of hydrocarbons Abu Dhabi Offshore exploration for and development of hydrocarbons Abu Dhabi 30 24 40 15 20 19 20 5 30 24 40 15 20 19 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”). 228 OMV ANNUAL REPORT 2022 / 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). Disclosed financial data refers to operating business segment Exploration & Production (E&P) excluding gas supply, marketing, trading and logistics in Western Eu- rope. Further information on OMV’s operating seg- ments is included in Note 4 – Segment Reporting. The regional structure is presented below1: Romania and Black Sea Bulgaria, Kazakhstan (until May 2021) and Romania Austria Russia North Sea Austria Russia (until February 2022) Norway Middle East and Africa Iran (evaluation on hold), Kurdistan Region of Iraq, Libya, Tunisia, United Arab Emirates, Yemen 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 2022, 2021 and 2020. Disposals & Deconsolidation Starting with March 1, 2022 OMV ceased to fully con- solidate JSC GAZPROM YRGM Development, due to the loss of control, following the Russia-Ukraine crisis. For further details refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. 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. 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). There were no major disposals during 2020. Non-controlling interest As OMV holds 51% of OMV Petrom, which is fully con- solidated; 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). Starting with March 1, 2022 OMV ceased to equity ac- count its 24.99% interest in OJSC Severneftegazprom (Russia region) due to loss of significant influence. For further details refer to Note 2 – Accounting policies, judgements and estimates, section ‘Impact of Russia’s invasion of Ukraine and related significant estimates and assumptions’. The disclosures of equity-accounted investments in be- low tables represent the interest of OMV in the compa- nies. The subsequent tables may contain rounding differ- ences. 229 OMV ANNUAL REPORT 2022 / 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. 2022 2021 2020 1,811 28,240 30,051 2,137 2,461 27,611 26,988 29,749 29,449 (19,411) 10,640 (18,136) (17,117) 11,613 12,333 2022 2021 2020 151 292 443 (76) 367 164 477 641 (99) 542 154 346 501 (76) 424 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 230 OMV ANNUAL REPORT 2022 / 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 2022 — — — 35 327 362 — — 24 21 45 — — — — — — 2 — — — — — — 59 159 219 — 10 171 181 — 26 188 214 — 48 102 150 — 202 969 1,171 — 27 — — 29 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 — — 17 163 180 — 46 60 106 7 — — 32 19 51 — — 227 778 1,005 62 231 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS 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, other costs and gas Results of operations of oil and gas producing activities In EUR mn supply, marketing, trading and logistics in Western Eu- rope are not allocated. Further information on OMV’s operating segments is included in Note 4 – Segment Reporting. Income taxes are hypothetically calculated, based on the statutory tax rates and the effect of tax credits on investments and loss carryforwards. Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total 2022 5 3,281 3,286 (512) (1,102) (28) (845) (65) (2,552) 734 (121) (32) 959 927 (91) (182) (12) (43) (15) (344) 583 (229) 206 — 206 — — — (12) (60) (72) 135 1,394 3,530 4,924 (183) — (118) (416) (131) (848) 4,077 931 1,927 2,858 (183) (312) 2 (424) (64) (980) 1,878 (28) (3,274) (1,553) 225 236 461 (87) (46) (53) 46 (2) (142) 319 (83) 302 — 302 (16) (21) (41) 3,032 9,933 12,965 (1,071) (1,663) (250) (91) (22) (191) 111 (1,785) (359) (5,128) 7,837 (34) (5,322) 613 354 107 803 325 237 77 2,516 — — 3 — 56 — — 59 2021 22 1,845 1,868 (477) (404) (43) (499) (70) (1,493) 375 (649) 432 (218) (78) (66) (5) (102) (14) (265) (483) (59) 121 562 — 562 — — — (70) (329) (399) 163 (27) 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 — 31 279 122 400 (81) (39) (18) (127) (5) (270) 130 (38) 92 — 239 — 239 (24) (13) (65) 1,884 4,762 6,646 (950) (658) (281) (101) (21) (223) 15 (1,526) (597) (4,012) 2,635 (6) (1,740) 10 — 895 55 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 232 OMV ANNUAL REPORT 2022 / 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 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) 118 228 102 330 (77) (34) (201) (384) (23) (719) (389) 107 209 — 209 (24) (4) (67) (126) (26) (246) (38) (16) 1,529 2,125 3,654 (920) (325) (896) (1,880) (619) (4,641) (987) 224 (145) (282) (53) (763) 16 — — 31 1 Includes hedging effects; Austria Region includes hedging effects of centrally managed derivatives (2022: EUR (33) mn, 2021: EUR (675) mn, 2020: EUR (37) 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. Income taxes 2022 in Austria included EU solidarity contribution. 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. 233 OMV ANNUAL REPORT 2022 / 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, 2020 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 Revisions of previous estimates Purchases Disposal Extensions and discoveries Production December 31, 2022 315.2 8.6 — — 0.5 (25.5) 298.8 4.2 — (21.4) 0.3 (23.0) 258.8 35.2 2.7 — — — (3.8) 34.0 1.0 — — — (3.6) 31.4 (8.4) — — 1.9 — — 0.1 (20.9) 229.6 — (3.3) 30.0 — — — — — — — — — — — — — — — — — — — 51.1 213.2 11.6 8.5 — — — (15.1) 44.5 17.2 — — — (15.3) 46.4 69.7 — — — (12.8) 270.2 30.3 — — — (24.8) 275.7 0.2 — — — (3.8) 8.0 7.6 — — 0.8 (3.5) 12.9 7.4 1.0 — — — (2.7) 5.7 4.9 — (2.4) — (1.7) 6.5 633.7 90.7 — — 0.5 (63.7) 661.2 65.2 — (23.8) 1.0 (71.9) 631.7 15.8 — — 32.3 — — 1.1 — — 0.4 — — 43.1 — — — (14.7) 47.6 — (27.3) 280.6 — (3.0) 11.0 — (0.6) 6.2 0.1 (69.9) 605.0 Proved developed and undeveloped reserves – Equity-accounted investments December 31, 2020 December 31, 2021 December 31, 2022 — — — — — — Proved developed reserves – Subsidiaries December 31, 2020 December 31, 2021 December 31, 2022 273.1 234.2 206.6 33.9 31.4 30.0 Proved developed reserves – Equity-accounted investments December 31, 2020 December 31, 2021 December 31, 2022 — — — — — — — — — — — — — — — — — — 18.4 17.5 16.0 32.7 40.7 39.4 172.7 189.2 234.5 — — — 15.7 14.7 15.4 — — — 5.6 6.0 9.2 — — — — — — 5.7 1.6 1.7 — — — 18.4 17.5 16.0 523.8 503.2 521.4 15.7 14.7 15.4 234 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Gas in bcf Romania and Black Sea Austria Russia North Sea Middle East and Africa Proved developed and undeveloped reserves - Subsidiaries January 1, 2020 1,020.7 177.8 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 Revisions of previous estimates Purchases Disposals Extensions and discoveries Production December 31, 2022¹ 61.3 — — 7.2 (148.6) 940.7 76.2 — (22.3) 1.5 (130.6) 865.5 68.1 — — 1.6 (122.0) 813.2 2.5 — — — (24.9) 155.3 17.7 — — — (20.6) 152.4 15.2 — — — (19.7) 147.9 — — — — — — — — — — — — — — — — — — — 422.8 58.3 — — — (97.5) 383.6 7.8 — — — (102.3) 289.2 144.4 — — — (102.2) 331.4 61.9 27.5 — — — (7.0) 82.4 80.7 — — — (17.3) 145.8 (1.3) — — — (14.7) 129.8 New Zealand and Australia Malaysia Total 315.8 335.7 2,334.7 (62.8) — — — (57.7) 195.3 115.3 — — 15.4 (51.8) 274.2 9.0 — — — (47.1) 236.1 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 (7.9) — — — (60.0) 446.8 227.6 — — 1.6 (365.6) 2,105.2 Proved developed and undeveloped reserves – Equity-accounted investments December 31, 2020 December 31, 2021 December 31, 2022 — — — — — — Proved developed reserves – Subsidiaries December 31, 2020 December 31, 2021 December 31, 2022 851.9 779.5 723.4 76.1 84.0 80.3 1,321.0 1,167.1 — — — — — — — 383.8 369.2 303.6 — — — — — — 1,704.8 1,536.4 303.6 335.7 287.0 290.8 55.2 62.5 39.9 143.5 115.4 195.9 376.3 291.9 1,838.7 1,620.2 228.9 1,559.1 Proved developed reserves – Equity-accounted investments December 31, 2020 December 31, 2021 December 31, 2022 — — — — — — 1,003.1 1,090.7 — — — — 293.5 278.9 288.3 — — — — — — 1,296.6 1,369.7 288.3 1 2022: Including approximately 67.6 bcf of cushion gas held in storage reservoirs 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 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 235 OMV ANNUAL REPORT 2022 / 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 and equity-accounted investments Romania and Black Sea Austria Russia North Sea Middle East and Africa New Zealand and Australia Malaysia Total 2022 29,864 7,435 — 14,937 26,611 2,051 2,248 83,145 (15,951) (1,424) (2,766) (246) — — (2,711) (631) (7,771) (890) (1,829) (222) (690) (213) (31,718) (3,626) 12,489 4,422 — 11,594 17,950 (1,724) (1,028) — (10,465) (13,283) 0 132 1,345 47,800 (380) (26,748) 10,765 3,394 (4,718) (1,815) 6,048 1,579 — — — — 1,129 4,667 132 965 21,053 (184) (1,547) 213 (296) (8,347) 945 — 3,120 451 345 — 669 12,705 — 451 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 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 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 236 OMV ANNUAL REPORT 2022 / 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 2020 New Zealand and Australia Malaysia Total 12,167 1,513 2,497 2,628 9,914 928 959 30,607 (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 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 2022 2021 2020 7,373 3,987 8,230 (4,102) 13,243 — 7 895 (344) 4,507 671 (9,593) 48 12,705 (2,262) 8,231 (67) 5 657 (269) 1,854 341 (4,935) (168) 7,373 (3,397) (7,040) — 22 1,031 259 757 732 3,625 (232) 3,987 451 523 333 1 Contains movements in foreign exchange rates vs. the EUR. Furthermore 2022 was impacted by the change of consolidation method of the Russian operations as well as by the reclassification of Yemen to held for sale. 237 OMV ANNUAL REPORT 2022 / FINANCIAL STATEMENTS Vienna, March 9, 2023 The Executive Board Alfred Stern m.p. Chairman of the Executive Board and Chief Executive Officer Reinhard Florey m.p. Chief Financial Officer Martijn van Koten m.p. Executive Vice President Fuels & Feedstock Daniela Vlad m.p. Executive Vice President Chemicals & Materials Berislav Gaso m.p. Executive Vice President Energy 238 FURTHER INFORMATION 239 — 250 240 — Consolidated Report on the Payments Made to Governments 247 — Abbreviations Definitions 250 — Contacts and Imprint OMV ANNUAL REPORT 2022 / 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. Activities within the scope of the report Payments made by the 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 or a department, agency, or undertaking that is controlled by that authority and includes national oil companies. In cases where a state-owned entity engages in activi- ties outside its designated home jurisdiction, 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. “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. 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 follows: 240 OMV ANNUAL REPORT 2022 / 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 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. Taxes Taxes levied on income, production, or profits of com- panies are reported. Refunds will be netted against payments and shown accordingly. Consumption taxes, personal income taxes, sales taxes, property taxes, and environmental taxes are not reported under the regulation. Although there is a tax group in place, the reported corporate income taxes for Austria relate en- tirely to the extractive activities in Austria of OMV’s sub- sidiaries, with no amounts being reported relating to OMV’s non-extractive activities in Austria. 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, 2022, 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. 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. 241 OMV ANNUAL REPORT 2022 / 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, 2022. Of the seven payment types that are required by the Austrian regulations to be reported upon, OMV did not pay any dividends, bonuses, or infrastructure improve- ments that met the defined accounting directive defini- tion, and therefore these categories are not shown. Payments overview In EUR 1,000 Country Austria Malaysia Norway New Zealand Romania Tunisia United Arab Emirates Yemen Total Production entitlements Taxes Royalties Fees Total — 393,267 — — — — — 44,369 437,637 37,418 36,234 2,172,496 66,518 1,052,059 31,255 628,147 — 4,024,127 166,805 104,314 — 50,741 418,654 17,665 298,809 4,222 1,061,210 — 27,265 1,509 7,985 24,760 201 1,556 2,327 65,603 204,223 561,081 2,174,004 125,244 1,495,473 49,122 928,512 50,919 5,588,577 No payments have been reported for Libya for the year 2022 as OMV was not the operator. its subsidiaries are fully consolidated in OMV’s Group financial statements. 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 or divestments during 2022. 242 OMV ANNUAL REPORT 2022 / 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 Malaysia In EUR 1,000 Governments Petroliam Nasional Berhad Ketua Pengarah Hasil Dalam Negeri PETRONAS Carigali Sdn Bhd Total Projects Block SK408/SK310 Total Production entitlements Taxes Royalties Fees Total — — — — — — 37,418 37,418 37,418 37,418 99,858 66,947 166,805 166,805 166,805 — — — — — 99,858 104,365 204,223 204,223 204,223 Production entitlements Taxes Royalties Fees Total 128,9021 — 264,3662 393,267 393,2674 393,267 — 36,234 — 36,234 36,234 36,234 104,3143 — — 104,314 104,3143 104,314 27,265 — — 27,265 27,265 27,265 260,481 36,234 264,366 561,081 561,081 561,081 1 Includes payments in kind for 2,843,354 bbl of oil equivalent valued using the average monthly price per boe 2 Includes payments in kind for 9,077,553 bbl of oil equivalent valued using the average monthly price per boe 3 Includes payments in kind for 3,430,118 bbl of oil equivalent valued using the average monthly price per boe 4 Includes payments in kind for 11,920,907 bbl of oil equivalent valued using the average monthly price per boe Norway In EUR 1,000 Governments Oljedirektoratet Skatteetaten Miljødirektoratet Total Projects Gulfaks Gudrun Aasta Hansteen Norway exploration projects Payments not attributable to projects Total Production entitlements Taxes Royalties Fees Total — — — — — — — — — — — 2,172,496 — 2,172,496 49 49 6 — 2,172,393 2,172,496 — — — — — — — — — — 1,435 49 24 1,509 — — — 1,509 — 1,509 1,435 2,172,544 24 2,174,004 49 49 6 1,509 2,172,393 2,174,004 243 Production entitlements Taxes Royalties Fees Total — — — — — — — — — — 66,518 — — 66,518 — — 66,518 — — — — 66,518 66,518 50,741 — 50,741 10,418 9,411 30,912 — — 50,741 7,813 171 7,985 20 7,899 13 52 — 7,985 58,554 171 125,244 10,439 17,310 30,925 52 66,518 125,244 Production entitlements Taxes Royalties Fees Total — — — — — — — — — — — — — 1,052,059 — 418,654 — — 4,672 1,470,713 4,672 — — — — — — — — 2,660 15,512 106 2,660 15,512 106 1,441 1,441 — 1,052,059 — 418,654 370 24,760 370 1,495,473 — — 156,142 895,917 1,052,059 327,343 345 90,966 — 418,654 22,913 — 407 1,441 24,760 350,256 345 247,514 897,358 1,495,473 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION New Zealand In EUR 1,000 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 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 244 OMV ANNUAL REPORT 2022 / 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 Fees Total — — — — — — — 30,040 1,216 — — 31,255 31,255 31,255 — — 12,9381 4,726 17,665 17,6651 17,665 201 — — — 201 201 201 30,241 1,216 12,938 4,726 49,122 49,122 49,122 1 Includes payments in kind for 148,529 bbl of oil equivalent 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 United Arab Emirates exploration projects Total Production entitlements Taxes Royalties Fees Total — — — — — — — — 1,556 1,556 628,147 628,147 298,809 298,809 628,147 — 628,147 298,809 — 298,809 — 1,556 962 594 1,556 926,957 928,512 927,919 594 928,512 Yemen In EUR 1,000 Governments Ministry of Oil & Minerals Total Projects Block S2 Yemen exploration projects Total Production entitlements 44,3691 44,369 44,3691 — 44,369 Taxes Royalties Fees Total — — — — — 4,2222 4,222 4,2222 — 4,222 2,327 2,327 285 2,042 2,327 50,919 50,919 48,877 2,042 50,919 1 Includes payments in kind for 450,435 boe valued at prices set by the Yemen Crude Oil Marketing Directorate 2 Includes payments in kind for 42,865 boe valued at prices set by the Yemen Crude Oil Marketing Directorate 245 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION Vienna, March 9, 2023 The Executive Board Alfred Stern m.p. Chairman of the Executive Board and Chief Executive Officer Reinhard Florey m.p. Chief Financial Officer Martijn van Koten m.p. Executive Vice President Fuels & Feedstock Daniela Vlad m.p. Executive Vice President Chemicals & Materials Berislav Gaso m.p. Executive Vice President Energy 246 OMV ANNUAL REPORT 2022 / 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) CCS/CCS effects/inventory holding gains/(losses) Current Cost of Supply Inventory holding gains and losses represent the difference between the cost of sales cal- culated 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 CPI Consumer price index 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. E ECL Expected credit losses E&P Exploration & Production busi- ness segment EPS Earnings Per Share; net in- 247 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION come attributable to stockhold- ers divided by total weighted average shares IFRSs International Financial Report- ing Standards MPPH Mubadala Petroleum and Pet- rochemicals Holding Company L.L.C. EPSA Exploration and Production Sharing Agreement Equity ratio Equity divided by balance sheet total, expressed as a percent- age F F&F Fuels & Feedstock business segment 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 248 IMF International Monetary Fund K kbbl/d Thousand barrels per day kboe Thousand barrels of oil equiva- lent 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 MW Megawatt MWh Megawatt hour N n.a. Not available NCI Non-controlling interests 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, and total net working capital less provi- sions for decommissioning and restoration 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 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION related to financing NOPAT is a KPI that shows the financial performance after tax, independent of the financing structure of the company. 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 the OMV Group’s reported fi- nancial performance. T t Metric ton toe Metric ton of oil equivalent TSR Total Shareholder Return TWh Terawatt hour U UAE United Arab Emirates O ÖBAG Österreichische Beteiligungs AG OCI Other comprehensive income OECD Organisation for Economic Co- operation and Development OTC Over-the-counter 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- 249 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION 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 Further publications OMV Factbook ▸ www.omv.com/factbook OMV Sustainability Report ▸ www.omv.com/sustainability-report Photos Title OMV Schwechat Technikum: Aron Bartolome Pages 10/12/13/15: Andreas Jakwerth 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. Notes: 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. Conse- quently, the actual results may differ materially from those ex- pressed or implied by the forward-looking statements. There- fore, 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 accuracy and completeness of any of the forward-looking statements con- tained in this report. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations, and fu- ture developments and events. This report does not contain any recommendation or invitation to buy or sell securities in OMV. 250 OMV ANNUAL REPORT 2022 / FURTHER INFORMATION 251 OMV Aktiengesellschaft Trabrennstrasse 6 – 8 1020 Vienna, Austria Tel. + 43 1 40440-0 www.omv.com www.omv.com/socialmedia 252
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