Petrol d d : Report on the operations of the petrol group and petrol d.d., ljubljana in the first three months of 2024

REPORT ON THE OPERATIONS

OF THE PETROL GROUP AND PETROL D.D., LJUBLJANA

IN THE FIRST THREE MONTHS OF 2024

Public

TABLE OF CONTENTS

PUBLIC

CONTENTS
INTRODUCTION	4
1.	Statement of the Management's Responsibility	4
2.	Introductory notes	5
3.	Business highlights of the Petrol Group	5
4.	Alternative performance measures	8
5.	The Petrol Group in the region	9
6.	Strategic orientation	10

BUSINESS REPORT	11
7.	Business performance analysis	11
8.	Operations by product groups	22
9.	Investments	32
10.	Risk management	33
11.	Share and ownership structure	37

SUSTAINABLE DEVELOPMENT	41
12.	Responsibility towards the natural environment	41
13.	Employees	41
14.	Quality control	42
15.	Social responsibility	43

OTHER INFORMATION	45
16.	General Meeting of Petrol d.d., Ljubljana	45
17.	Management Board and Supervisory Board of Petrol d.d., Ljubljana	45
18.	Credit rating	45
19.	Events after the end of the accounting period	45

FINANCIAL REPORT	46
20.	Financial performance of the Petrol Group and Petrol d.d., Ljubljana	46
21.	Notes to the financial statements	54
22.	Segment reporting	55
23.	Notes to individual items in the financial statements	58
24.	Financial instruments and risks	72
25.	Related party transactions	86
26.	Contingent liabilities	88
27.	Events after the reporting date	88
Appendix 1: Organisational structure of the Petrol Group	89

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

3

PUBLIC

INTRODUCTION

1. Statement of the Management's Responsibility

Members of the Management Board of Petrol d.d., Ljubljana, which comprises Sašo Berger, President of the Management Board, Drago Kavšek, Member of the Management Board, Marko Ninčević, Member of the Management Board, Jože Smolič, Member of the Management Board, Metod Podkrižnik, Member of the Management Board and Zoran Gračner, Member of the Management Board and Worker Director, declare that to their best knowledge:

• the financial report of the Petrol Group and Petrol d.d., Ljubljana, for the first three months of 2024 has been drawn up in accordance with International Financial Reporting Standards as adopted by the EU and gives a true and fair view of the assets and liabilities, financial position, financial performance and comprehensive income of Petrol d.d., Ljubljana, and other consolidated companies as a whole;
• the business report of the Petrol Group and Petrol d.d., Ljubljana, for the first three months of 2024 gives a fair view of the development and results of the Company's operations and its financial position, including the description of material risks that Petrol d.d., Ljubljana, and other consolidated companies are exposed to as a whole;
• the report of the Petrol Group and Petrol d.d., Ljubljana, for the first three months of 2024 contains a fair presentation of significant transactions with related entities, which has been prepared in accordance with International Financial Reporting Standards.

Sašo Berger	Drago Kavšek	Marko Ninčević
President of the	Member of the	Member of the
Management Board	Management Board	Management Board

Metod Podkrižnik	Jože Smolič	Zoran Gračner
Member of the	Member of the	Member of the Management
Management Board	Management Board	Board and Worker Director

Ljubljana, 9 May 2024

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

4

INTRODUCTION

PUBLIC

2. Introductory notes

The report on the operations of the Petrol Group and Petrol, d.d., Ljubljana, Dunajska 50, in the first three months of 2024 has been published in accordance with the Market in Financial Instruments Act, the Ljubljana Stock Exchange Rules, Guidelines on Disclosure for Listed Companies and other relevant legislation.

The figures and notes regarding the operations have been prepared based on the unaudited consolidated financial statements of the Petrol Group and the unaudited financial statements of Petrol d.d., Ljubljana, for the first three months of 2024, in compliance with the Companies Act and IAS 34 - Interim Financial Reporting.

Subsidiaries are included in the consolidated financial statements, which have been prepared in accordance with IFRS, on the basis of the full consolidation method, while jointly controlled entities and associates are included on the basis of the equity method.

In accordance with IFRS, investments in subsidiaries, jointly controlled entities and associates are carried at historical cost in the separate financial statements.

The report on the operations in the first three months of 2024 has been published on the website of Petrol d.d., Ljubljana, (www.petrol.eu, www.petrol.si), and is available on demand at the registered office of Petrol d.d., Lju- bljana, Dunajska cesta 50, 1000 Ljubljana, every working day between 8 am and 3 pm.

The Company's Supervisory Board discussed the report on the operations of the Petrol Group and Petrol d.d., Ljubljana, in the first three months of 2024 at its meeting held on 16 May 2024.

PROFILE OF THE PARENT COMPANY, PETROL D.D., LJUBLJANA, AS AT 31 MARCH 2024

Company name	Petrol, slovenska energetska družba, d.d., Ljubljana
Abbreviated company name	Petrol d.d., Ljubljana
Registered office	Dunajska cesta 50, 1000 Ljubljana
Telephone	[phone]
Website	www.petrol.eu, www.petrol.si
Activity code	47.301
Company registration number	5025796000
Tax number	SI 80267432
Share capital	EUR 52.24 million
Number of shares	41,726,020
President of the Management Board	Sašo Berger
Members of the Management Board	Drago Kavšek, Marko Ninčević, Jože Smolič, Metod Podkrižnik, Zoran Gračner (Worker Director)
President of the Supervisory Board	Janez Žlak

3. Business highlights of the Petrol Group

In the first quarter of 2024, the Petrol Group's operations were in line with the set plans, yet still under a negative influence of the energy price regulation. At the end of 2023, which ended with energy price stabilisation, we were faced with further tightening of the regulatory framework for petroleum products in Slovenia and the still unresolved issue regarding the compensation for the damage due to the natural gas price regulation on the Croatian market.

According to international institutions, GDP in Slovenia's main trading partners will strengthen in 2024 compared to 2023, although not as much as projected in the autumn. Higher economic growth is also forecast for Petrol's two largest markets, that is, Slovenia and Croatia.

Despite the challenging situation, the Petrol Group generated good business results in the first three months of 2024. The EBITDA amounted to EUR 49.2 million; due to the stricter regulation of prices on key markets, it is

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

5

INTRODUCTION

PUBLIC

lower compared to the same period last year but due to the additional activities in the field of cost management, we nevertheless achieved a result which is slightly above the plan.

For 2024, the Petrol Group projects sales revenue of EUR 5.8 billion, a gross profit of EUR 705.6 million, the EBITDA of EUR 304.6 million and the net profit of EUR 156.5 million. Unforeseen interventions in the price policy by regulators can cause deviations from the set targets, but we nonetheless believe that if the business situation normalises and regulation becomes more moderate, we could achieve the set year-end targets.

As set out in our business plan, our aim was to earmark EUR 130.0 million for investments, of which 44 percent for energy transition projects. However, the current margins, which are too low, make it impossible to cover all costs and have affected the Petrol Group's investment capacity, especially with regard to the energy transition projects which are vital in making a transition to green fuels. The energy price regulatory framework should take into account the additional costs arising from the energy transition, such as biofuel blending, CO2 tax and potential fines for failing to meet environmental targets. This is the key reason why our anticipated investments are behind the dynamic of our plan.

THE PETROL GROUP						Index	Index
	Unit	1-3 2022	1-3 2023	1-3 2024	2024/2023	2024/2022
Revenue from contracts with customers	EUR	million	1,936.8	1,826.5	1,472.4	81	76
Gross profit1	EUR	million	162.2	145.7	147.0	101	91
Gross profit + Net Derivative Financial Instruments for Commodities1	EUR	million	143.1	158.9	149.1	94	104
Operating profit	EUR	million	38.9	34.0	24.1	71	62
Net profit	EUR	million	32.4	24.8	15.0	60	46
Equity3	EUR	million	860.2	923.0	964.7	105	112
Total assets3	EUR	million	2,740.6	2,635.3	2,513.5	95	92
EBITDA1, 2	EUR	million	65.6	59.1	49.2	83	75
EBITDA/Gross profit1		%	40.4	40.6	33.5	82	83
EBITDA / (Gross profit + Net Derivative Financial Instruments for		%	45.8	37.2	33.0	89	72
Commodities)1
Operating costs/Gross profit1		%	73.5	89.6	87.9	98	120
Operating costs / (Gross profit + Net Derivative Financial Insruments for		%	83.3	82.2	86.7	105	104
Commodities)1
Net debt/Equity1, 3			0.6	0.5	0.5	95	82
Net debt/EBITDA1, 3, 4			5.4	1.7	1.5	91	29
Added value per employee1	EUR thousand	16.8	16.6	16.2	98	97
Earnings per share attributable to owners of the controlling company		EUR	0.7	0.6	0.4	64	55
Net investments1	EUR million	8.2	18.3	16.2	89	199
Volume of fuels and petroleum products sold	thousand tons	906.4	884.1	855.7	97	94
Volume of natural gas sold		TWh	5.7	4.6	5.7	124	100
Volume of electricity sold		TWh	2.9	2.6	3.1	120	107
Revenue from the sales of merchandise and services	EUR million	101.5	118.3	138.0	117	136

1. Alternative performance measure (APM) as defined in chapter Alternative Performance Measures.
2. EBITDA = Operating profit + Net Allowances for operating receivables + Depreciation and amortisation charge.
3. Data for 2022 and 2023 as at 31 December, data for 2023 as at 31 March.
4. For 2022 and 2023, calculated at the annual level. EBITDA for 2024 is the annually planned one.

THE PETROL GROUP		31 December	31 December	31 March	Index	Index
Unit	2022	2023	2024	2024/2023	2024/2022
Number of employees		6,224	5,945	5,963	100	96
Number of service stations		594	594	594	100	100
Number of e-charging points operated by the Petrol Group		417	495	509	103	122
Number of electricity customers	thousand	226	224	222	99	98
Number of natural gas customers (data for the Geoplin Group are	thousand	60	61	62	101	102
not included)

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

6

INTRODUCTION

PUBLIC

EBITDA, IN EUR MILLION						NET PROFIT OR LOSS, IN EUR MILLION
1-3 2021	54.0				1-3 2021	27.8
1-3 2022	65.6		1-3 2022	32.4
1-3 2023	59.1			1-3 2023	24.8
				15.0
1-3 2024		49.2		1-3 2024

THE NUMBER OF SERVICE STATIONS				VOLUME OF PETROLEUM PRODUCTS SOLD, IN MILLION TONS
31. 12. 2021	593			1-3 2021	0.64
31. 12. 2022	594		1-3 2022	0.91
31. 12. 2023	594		1-3 2023	0.88
			594				0.86
31. 3. 2024			1-3 2024

NUMBER OF EMPLOYEES

31.  12. 2022	2,155	3,059		1,010
31.  12.	2023	2,252	2,837	856
31.  3.	2024	2,428		2,836			699

Third-party managed service stations in Slovenia

Subsidiaries

Petrol d.d., Ljubljana

STRUCTURE OF INVESTED ASSETS, IN %
Fuels and petroleum products, merchandise and services − retail
Energy transition and digitalization
			21.0
Fuels and petroleum products − logistics
	4.9
Other
	9.3

6,224

5,945

5,963

64.8

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

7

INTRODUCTION

PUBLIC

4. Alternative performance measures

To present its business performance, the Petrol Group also uses alternative performance measures (APMs) as defined by ESMA (The European Securities and Market Authority). The APMs we have chosen provide additional information about the Petrol Group's performance.

LIST OF ALTERNATIVE PERFORMANCE MEASURES

Alternative performance
measures	Calculation information	Reasons for choosing the measure
Gross profit	Gross profit = Revenue from the sale of merchandise and services -	The Petrol Group has no direct influence over global energy prices,
	Cost of goods sold	which makes the gross profit more appropriate to monitor business
		performance.
Gross profit + Net DFI for	Gross profit + Net Derivative Financial Instruments for Commodities	Net derivative financial instruments for commodities are intended for
Commodities		hedging price and volumetric risks and, hence, the amount of sales
		revenue and the cost of goods sold. In terms of comparison with the
		previous period, the ratio is more appropriate than merely the gross
		profit.

EBITDA	EBITDA = Operating profit + Net Allowances for operating receivables
	+ Depreciation and amortisation charge.
EBITDA/Gross profit	Ratio = EBITDA/Gross profit

EBITDA indicates business performance and is the primary source for ensuring returns to shareholders.

The ratio is a good approximation of the share of free cash flows from operating activities in gross profit.

EBITDA / (Gross profit + Net	EBITDA / (Gross profit + Net Derivative Financial Instruments for
DFI for Commodities)	Commodities)
Operating costs	Operating costs = Costs of materials + Costs of services + Labour
	costs + Depreciation and amortisation + Other costs
Operating costs/Gross profit	Ratio = Operating costs/Gross profit
Operating costs / (Gross profit	Operating costs / (Gross profit + Net Derivative Financial Instruments
+ Net DFI for Commodities)	for Commodities)
Net debt/Equity	Net debt = Current and non-current financial liabilities + Current and
	non-current lease liabilities - Cash and cash equivalents; Ratio = Net
	debt/Equity

The share of EBITDA in the gross profit, increased by the net derivative financial instruments for commodities is a good approximation to

the share of free cash flow in the gross profit, increased by the net derivatives and ensures better comparability to the previous period and the plan.

The criterion is important in terms of the cost-effectiveness of operations.

The ratio is relevant because it concerns the cost-effectiveness of operations.

The ratio is relevant in terms of the operational cost efficiency and ensures better comparability to the previous period and the plan.

The ratio reflects the relation between debt and equity and is, as such, relevant for monitoring the Company's capital adequacy.

Net debt/EBITDA	Ratio = Net debt/EBITDA	The ratio expresses the Petrol Group's ability to settle its financial
		obligations, indicating in how many years financial debt can be settled
		using existing liquidity and cash flows from operating activities.

Added value/Employee	Added value per employee = (EBITDA + Integral labour costs)/Average
	number of employees. Integral labour costs = Labour costs relating to
	Petrol Group employees + Labour costs relating to third-party managed
	service stations, which stood at EUR 5.2 million in the period from
	January to March 2024 and EUR 6.9 million in the period from January
	to March 2023.
Working capital	Working capital = Operating receivables + Contract assets +
	Inventories - Current operating liabilities - Contract liabilities

This productivity ratio indicates average newly created value per Petrol Group employee.

The ratio reflects operational liquidity of the Petrol Group.

Net investments	Net investments = Investments in fixed assets (EUR 17.5 million in the
	period from January to March 2024) - Disposal of fixed assets and
	reimbursements (EUR 1.3 million in the period from January to March
	2024).

The information about investments reflects the direction of the Petrol Group's development.

Book value per share	Book value per share = equity/total number of issued shares	Book value per share reflects the value of a public limited company's
		total equity per share.

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

8

INTRODUCTION

PUBLIC

5. The Petrol Group in the region

AUSTRIA	ROMANIA

SLOVENIA

CROATIA

BOSNIA AND	SERBIA
HERZEGOVINA

MONTE-

NEGRO KOSOVO

NORTH

MACEDONIA

The Petrol Group has companies in the following countries:

• Slovenia
• Croatia
• Bosnia and Herzegovina
• Serbia
• Montenegro
• Kosovo
• North Macedonia
• Austria
• Romania

The Group also operates in other countries.

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

9

INTRODUCTION

PUBLIC

6. Strategic orientation

Our mission

Through a broad range of energy commodities, comprehensive energy solutions and digital approach, we put the user at the centre of our attention. We want to become the first choice for shopping on the go. Together with our partners, we create solutions for a simpler transition to cleaner energy sources. We are building a green energy future in a decisive and active manner, increasing the value for our customers, shareholders and society over the long term.

Our promise

Through the energy transition, we are creating a green future and making a significant contribution to protecting our environment.

Our vision

To become an integrated partner in the energy transition, offering an excellent customer experience.

Our values

• Respect: We respect fellow human beings and the environment.
• Trust: We build partnerships through fairness.
• Excellence: We want to be the best at all we do.
• Creativity: We use our own ideas to make progress.
• Courage: We work with enthusiasm and heart.

At Petrol, we feel a strong sense of responsibility towards our employees, customers, suppliers, business partners, shareholders and the society as a whole. We meet their expectations with the help of motivated and business-oriented employees, we adhere to the fundamental legal and moral standards in all markets where we operate, and we protect the environment.

PETROL REPORT ON THE OPERATIONS OF THE PETROL GROUP AND THE COMPANY PETROL D.D., LJUBLJANA IN THE FIRST THREE MONTHS OF 2024

10