5 – Segment Reporting

Changes in segment reporting

As of January 1, 2023, the Group introduced a new corporate structure, designed to fully enable the delivery of Strategy 2030. Following the reorganization and starting from Q1/23, the Group reports on the following business segments: Chemicals & Materials, Fuels & Feedstock (formerly Refining & Marketing), and Energy (formerly Exploration & Production).

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 Türkiye and one gas-fired power plant in Romania, was transferred from Fuels & Feedstock to the Energy business segment. Internal reporting and relevant information provided to the chief operating decision-maker in order to assess performance and allocate resources have 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 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 decisions 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 and plastics recycling.

OMV Group has a production capacity, including joint ventures, of 7.0 mn t of base chemicals, 6.3 mn t of polyolefins and 0.4 mn t of compounding. 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 investments, the most significant ones being Borouge (United Arab Emirates), a Borealis’ joint venture with ADNOC that operates the largest petrochemical complex in the world, and the Baystar joint venture (Pasadena, United States), which has operated an ethane cracker since 2022 and started up an additional polyethylene plant using the unique Borstar^® technology in 2023.

OMV group is pursuing various initiatives in mechanical and chemical recycling and renewable polyolefins. Borealis is building a propane dehydrogenation plant in Belgium to leverage expected growth in propylene demand in Europe. The new facility will have a production capacity of 0.7 mn t of propylene. Together with ADNOC, Borealis is building Borouge 4 (Ruwais, United Arab Emirates), an ethane-based steam cracker with a capacity of 1.5 mn t (OMV share 0.6 mn t) and polyolefin plants with a capacity of 1.4 mn t (OMV share 0.6 mn t) using the unique Borstar^® technology.

The Fuels & Feedstock (F&F) Business segment refines and markets crude oil and other feedstock. It operates refineries with an annual capacity of 17.8 mn t in Schwechat (Austria), Burghausen (Germany), and Petrobrazi (Romania). In these refineries, crude oil is processed into petroleum products, which are sold to commercial and private customers.

OMV has a strong position in the markets located within the areas of its supply, serving commercial customers, and operating a retail business of 1,666 filling stations.

OMV holds minority stakes in various equity-accounted investments, the most significant being the 15% participation in ADNOC Refining (United Arab Emirates) with an annual capacity of 7.1 mn t (OMV share).

Energy engages in the business of oil and gas exploration, development and production. The activities of this business segment also cover gas supply, marketing, trading, and logistics in Western and Eastern Europe and the Group’s power business activities, with one gas-fired power plant in Romania. In addition, low carbon business activities such as geothermal energy, Carbon Capture and Storage (CCS), and further renewable power solutions are covered by the Energy business segment.

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 the Clean CCS Operating Result. Total assets include intangible assets as well as property, plant, and equipment. Sales to external customers are split up according to geographical areas on the basis of where the risk is transferred to customers. The net revenues of commodity 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 described in the summary of significant accounting policies, with certain exceptions for intra-group sales and cost allocations by the parent company, which are determined in accordance with internal OMV policies. Management is of the opinion that the transfer prices of goods and services exchanged between segments correspond to market prices. Business transactions not attributable to operating segments are included in the results of the C&O segment.

The disclosure of special items is considered appropriate 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 environment 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 calculated 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, measuring 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 information from 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 as reported in 2022:

In 2023, special items for unscheduled depreciation and write-ups were mainly attributable to the net effect of impairments and write-ups of E&P assets, an impairment of the Borealis nitrogen business, as well as the write-up of the natural gas storage asset in Germany. For further details on impairments and write-ups see Note 8 – Depreciation, amortization, impairments and write-ups.

Special items for asset disposals were mainly related to the sale of OMV’s filling station and wholesale business in Slovenia. For further details see Note 7 – Other operating income.

Other special items mainly consisted of temporary valuation effects and a partial impairment of exploration & appraisal assets included in OMV’s initial purchase price allocation of its share in Pearl Petroleum Company Limited (investment accounted for at-equity).

Unallocated assets contained goodwill in the amount of EUR 330 mn (2022: EUR 342 mn) related to the cash-generating unit “Middle East and Africa” as this CGU operates in more than one geographical area. In 2022, unallocated assets also included goodwill in the amount of EUR 210 mn related to cash generating unit SapuraOMV. In 2023 the disposal group SapuraOMV was reclassified to “held for sale”. For further details, please refer to Note 22 – Assets and liabilities held for sale.