ANNUAL FINANCIAL REPORT (ACCORDING TO L. 3556/2007) MARCH 2020 FOR THE PERIOD 1 JANUARY – 31 DECEMBER 2019 TABLE OF CONTENTS: DECLARATION OF THE BoD REPRESENTATIVES DIRECTORS’ REPORT CORPORATE GOVERNANCE STATEMENT (L.4548/2018) ANNUAL FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT MOTOR OIL (HELLAS) CORINTH REFINERIES S.A. G.E.MI. 272801000 Prefecture of Attica Registration Nr 1482/06/Β/86/26 Headquarters: Irodou Attikou 12Α, 151 24 Maroussi Attica WorldReginfo - 2718c960-2be7-418c-a3f8-ae661fa73438 DECLARATION OF THE REPRESENTATIVES OF THE BOARD OF DIRECTORS OF “MOTOR OIL (HELLAS) CORINTH REFINERIES S.A.” Pursuant to the provisions of article 4 paragraph 2 item c of Law 3556/2007 we hereby declare that to the best of our knowledge: A. The single and consolidated financial statements of “MOTOR OIL (HELLAS) S.A.” (the Company) for the year ended December 31, 2019, which have been prepared in accordance with the applicable accounting standards, truly present the assets, the liabilities, the shareholders’ equity and the statement of comprehensive income of the Company and the companies included in the consolidated financial statements taken as a total, and B. The Board of Directors’ annual report truly presents the course, the performance and the position of the Company and the companies included in the consolidated financial statements taken as a total, including the description of the most important risks and uncertainties they are facing. Maroussi, March 17th, 2020 The Chairman of the BoD The Vice Chairman The Deputy Managing Director and Managing Director and Chief Financial Officer VARDIS J. VARDINOYANNIS IOANNIS V. VARDINOYANNIS PETROS T. TZANNETAKIS I.D. No K 011385/1982 I.D. No AH 567603/2009 I.D. No R 591984/1994 WorldReginfo - 2718c960-2be7-418c-a3f8-ae661fa73438 DIRECTORS’ REPORT D I R E C T O R S´ R E P O R T (ACCORDING TO ARTICLE 5 OF THE LAW 3556/2007) ON THE FINANCIAL STATEMENTS OF “MΟΤΟR ΟIL (HΕLLΑS) CORINTH REFINERIES S.Α.” AND THE CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE PERIOD ENDED 31 DECEMBER 2019 (PERIOD 01.01.2019 – 31.12.2019) Ι. REVIEW OF OPERATIONS The Group financial figures for the fiscal year 2019 compared to the fiscal year 2018 are presented hereunder: Variation 2019 2018 Amounts in thousand Euros Amount % Turnover (Sales) 9,372,543 9,519,561 (147,018) (1.54%) Less: Cost of Sales (before depreciation & amortization) 8,640,523 8,760,348 (119,825) (1.37%) Gross Profit (before depreciation & amortization) 732,020 759,213 (27,193) (3.58%) Less: Selling Expenses (before depreciation & amortization) 182,820 179,822 2,998 1.67% Less: Administrative Expenses (before depreciation & amortization) 77,756 77,050 706 0.92% Plus (Less): Other Operating Income (Expenses) 10,375 8,028 2,347 29.24% Plus (Less): Other Gains / (Losses) (7,867) (15,257) 7,390 48.44% Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) 473,952* 495,112* (21,160) (4.27%) Plus: Investment Income / share of profits (losses) in associates 2,752 5,018 (2,266) (45.16%) Plus: Financial Income 8,751 7,508 1,243 16.56% Less: Financial Expenses 47,316 49,174 (1,858) (3.78%) Earnings before Depreciation/Amortization and Tax 438,139 458,464 (20,325) (4.43%) Less: Depreciation & Amortization 134,708 103,069 31,639 30.70% Earnings before Tax (EBT) 303,431 355,395 (51,964) (14.62%) Less: Income Tax 79,197 100,682 (21,485) (21.34%) Earnings after Tax (EAT) 224,234 254,713 (30,479) (11.97%) (*) Includes government grants amortization Euro 931 thousand for 2019 and Euro 938 thousand for 2018. 2019 1 WorldReginfo - 2718c960-2be7-418c-a3f8-ae661fa73438 DIRECTORS’ REPORT The respective Company financial figures for the fiscal year 2019 compared to the fiscal year 2018 are presented hereunder: Variation Amounts in thousand Euros 2019 2018 Amount % Turnover (Sales) 6,936,469 7,237,589 (301,120) (4.16%) Less: Cost of Sales (before depreciation & amortization) 6,523,295 6,763,619 (240,324) (3.55%) Gross Profit (before depreciation & amortization) 413,174 473,970 (60,796) (12.83%) Less: Selling Expenses (before depreciation & amortization) 16,121 17,213 (1,092) (6.34%) Less: Administrative Expenses (before depreciation & amortization) 39,663 39,256 407 1.04% Plus (Less): Other Operating Income (Expenses) 2,381 1,466 915 62.41% Plus (Less): Other Gains / (Losses) (164) (7,884) 7,720 97.92% Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) 359,607* 411,083* (51,476) (12.52%) Plus: Investment Income 11,877 9,022 2,855 31.64% Less: Financial Expenses 22,648 28,095 (5,447) (19.39%) Earnings before Depreciation/Amortization and Tax 348,836 392,010 (43,174) (11.01%) Less: Depreciation & Amortization 80,171 75,015 5,156 6.87% Earnings before Tax (EBT) 268,665 316,995 (48,330) (15.25%) Less: Income Tax 63,142 88,896 (25,754) (28.97%) Earnings after Tax (EAT) 205,523 228,099 (22,576) (9.90%) (*) Includes government grants amortization Euro 931 thousand for 2019 and Euro 938 thousand for 2018. On the financial figures presented above we hereby note the following: 1. Turnover (Sales) In principle, the turnover increase or decrease of oil refining and trading companies is mainly a combination of the following factors: a) Volume of Sales b) Crude Oil and Petroleum Product Prices, and c) Euro / US Dollar parity. The industrial activity (refining) concerns sales of products produced in the refinery of the parent company while the trading activity concerns sales generated as a result of imports of finished products from the international market and their subsequent resale to customers in the domestic market and abroad. The Group has the flexibility to take full advantage of the favorable market conditions in the oil sector, whenever these arise, and it is in a position to respond to any exceptional or unpredictable conditions meeting the demand in the domestic and the international market with imports of products. 2019 2 WorldReginfo - 2718c960-2be7-418c-a3f8-ae661fa73438 DIRECTORS’ REPORT The breakdown of Group turnover by geographical market (Domestic – Foreign) and type of activity (Refining – Trading) as well as sales category in Metric Tons–Euros is presented hereunder: Metric Tons Amounts in Thousand Euros Geographical Market Variation Variation and Type of Activity 2019 2018 % 2019 2018 % Foreign Refining/Fuels 9,405,963 9,805,447 (4.07%) 4,192,879 4,589,802 (8.65%) Refining/Lubricants 264,974 249,673 6.13% 172,939 171,670 0.74% Trading/Fuels etc. 601,145 446,421 34.66% 353,219 310,096 13.91% Total Foreign Sales 10,272,082 10,501,541 (2.19%) 4,719,037 5,071,568 (6.95%) Domestic Refining/Fuels 1,671,090 1,866,223 (10.46%) 969,832 1,125,635 (13.84%) Refining/Lubricants 102,309 79,804 28.20% 72,941 62,485 16.73% Trading/Fuels etc. 1,688,954 1,411,665 19.64% 2,552,757 2,375,516 7.46% Total Domestic Sales 3,462,353 3,357,692 3.12% 3,595,530 3,563,636 0.89% Bunkering Refining/Fuels 987,026 1,174,461 (15.96%) 476,370 527,910 (9.76%) Refining/Lubricants 15,644 13,357 17.12% 17,897 15,636 14.46% Trading/Fuels etc. 767,751 425,007 80.64% 371,522 257,651 44.20% Total Bunkering Sales 1,770,421 1,612,825 9.77% 865,789 801,197 8.06% Rendering of Services 192,187 83,160 131.11% Total Sales 15,504,856 15,472,058 0.21% 9,372,543 9,519,561 (1.54%) In fiscal 2019 the turnover of the Group reached Euro 9,372.5 million from Euro 9,519.6 million in 2018 which represents a decrease of 1.54%. This development is attributed to the decrease of the average prices of petroleum products (denominated in US Dollars) by 9.76% while part of the turnover reduction was offset by the strengthening of the US Dollar against the Euro (average parity) by 5.2%. The sales volume of the Group was marginally increased (by 0.21%). In fiscal 2019, the Group had revenues from the provision of services, of which approximately 75% concerned NRG S.A. activities and the remainder concerned OFC AVIATION FUEL SERVICES S.A. activities as well as storage fees and related services. The breakdown of the consolidated sales volume confirms the solid exporting profile of the Group considering that export and bunkering sales combined accounted for 77.67% of the aggregate sales volume of fiscal 2019 compared to 78.30% in fiscal 2018, as well as the high contribution of refining activities (80.28% of the aggregate sales volume of fiscal 2019 compared to 85.24% in fiscal 2018). 2019 3 WorldReginfo - 2718c960-2be7-418c-a3f8-ae661fa73438 DIRECTORS’ REPORT The respective breakdown of Company turnover is presented hereunder: Metric Tons Amounts in Thousand Euros Geographical Market and Variation Variation Type of Activity 2019 2018 % 2019 2018 % Foreign Refining/Fuels 9,405,963 9,805,447 (4.07%) 4,192,879 4,589,802 (8.65%) Refining/Lubricants 215,185 224,837 (4.29%) 116,245 142,512 (18.43%) Trading/Fuels etc. 547,374 353,217 54.97% 274,811 199,060 38.05% Total Foreign Sales 10,168,522 10,383,501 (2.07%) 4,583,935 4,931,374 (7.05%) Domestic Refining/Fuels 1,671,090 1,866,223 (10.46%) 969,832 1,125,635 (13.84%) Refining/Lubricants 67,894 46,779 45.14% 44,067 33,095 33.15% Trading/Fuels etc.