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Report of the Supervisory Board

Dear Shareholders,

As the new Chairman of the Supervisory Board, I am delighted to be addressing you for the first time about topics related to the Executive and Supervisory Board.

After some very turbulent years, the conditions on the energy market in 2023 were somewhat stable again and raw material prices were much lower on average. The chemical sector was in a steep decline, which had a negative impact on the Borealis result. However, by diversifying we were able to achieve an exceptional overall result – the second-highest in OMV’s history – for which I would like to offer my sincere congratulations to the management team and all the staff, who were instrumental in this success. Thanks to our strategy, we have set the course for a sustainable future and are taking further steps in this transformation. We are proud of the successful diversification of gas sources, which has allowed us to maximize our contribution to safeguarding the supply of energy.

Taking a look at the performance of the business segments, we can see that this high degree of diversification proved its worth once again in 2023. While the high refining margins in the Fuels & Feedstock segment generated a strong result, the Chemicals & Materials segment experienced much softer demand. Bolstered by the continuous high oil and gas prices in a long-term comparison, the Energy segment made a significant contribution to the overall performance of the Company.

We want to let our shareholders benefit from this strong Group result and the stable financial situation. Combined with the strong result, our dividend policy allows us to recommend payment of a special dividend once again. For you, dear shareholders, this means that we will be proposing the payment of a total dividend of EUR 5.05 per share to the Annual General Meeting for the financial year now ended.

Our key priorities in the Supervisory Board include strategy, Executive Board matters, governance topics, and approval of larger investment projects. Below, I would like to inform you about the Supervisory Board’s work during the 2023 financial year.

Composition of the Executive Board and Supervisory Board

At the beginning of 2023, a new organizational structure for the Group came into force to support the chosen strategy – the business segments are now divided into Chemicals & Materials, which comprises the entire chemicals value chain, Fuels & Feedstock, which includes refining, marketing, and trading, and Energy, which covers the exploration and production business, the gas business, and the low-carbon business. The corresponding changes to the composition of the Executive Board were completed in 2023 – the team on the Executive Board is already functioning well and consists of a balanced mix of experienced, long-standing OMV Group managers and new members to ensure an injection of new ideas.

Appointed by the Supervisory Board in November 2022, new Executive Board member Daniela Vlad has been in charge of the Chemicals & Materials business segment since February 1, 2023, which was previously led by Executive Board Chairman and CEO Alfred Stern. Daniela Vlad is a manager with many years of international experience in the chemical 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.

Appointed by the Supervisory Board as a new member of the Executive Board in December 2022, Berislav Gaso started in March 2023 as Executive Vice President Energy. Prior to this, CFO Reinhard Florey lead the Energy business segment for two months after Johann Pleininger stepped down with effect from the end of 2022. Berislav Gaso is a proven energy expert with extensive international experience of major transformations and recently held responsibility for exploration and production activities in 13 countries.

Also in March, the Supervisory Board decided to exercise an extension option and extend the position for Executive Vice President for Fuels & Feedstock, Martijn van Koten, by two years. In June 2023, the same decision was made for CEO Alfred Stern, with the mandate for both Executive Board members being extended until 2026. In October 2023, CFO Reinhard Florey was reappointed until 2025, with a mutual extension option until 2027.

Lutz Feldmann, Chairman of the Supervisory Board (photo)

»In 2023, the Supervisory Board established an Executive Board team to sustainably and successfully shape the transformation of OMV.«

Chairman of the Supervisory Board

There were also changes to the Supervisory Board in 2023. After Mark Garrett announced at the start of the year 2023 that he would not be available for another term of office, I was elected to the Supervisory Board at the Annual General Meeting on May 31, 2023 and took on the position of Chairman of the Supervisory Board. There was one change to the employee representatives: Alfred Redlich was delegated to the Supervisory Board with effect from August 30, 2023, as successor to Mario Mayrwöger.

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.

Feedback from investors plays a crucial role in the work of the Supervisory Board. As your new Chairman of the Supervisory Board, I have allowed myself and see it as my responsibility to take the necessary time before making myself available to investors to answer questions on governance topics. For this reason, we have slightly postponed the Governance Roadshow, which traditionally takes place in Q4. I enjoyed attending in-person and virtual meetings with major institutional investors as well as with one proxy advisor in Frankfurt and London in February 2024. The feedback we received reinforced our commitment to our transformation strategy and confirmed our focus on topics.

As in the past, training specifically designed for the Supervisory Board took place in 2023. 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 2024.

Activities of Supervisory Board committees

Several staffing decisions were made by the Supervisory Board in 2023. The Presidential and Nomination Committee was therefore mainly occupied with preparing decisions about extensions to positions on the Executive Board for the CEO, the CFO, and the Fuels & Feedstock business segment.

The Remuneration Committee dealt with topics such as the achievements of the goals of the expired incentive plans and setting targets in the new plans. Furthermore, the contractual terms for the extensions to existing Executive Board contracts and a new Executive Board contract were discussed and approved.

In 2023, the Audit Committee looked at important topics related to accounting processes, the internal audit program, risk management, and the Group’s internal control system. The OMV Group’s auditor – which until the end of May 2023 was Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H., followed by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna, who was appointed as the new auditor at the Annual General Meeting in May 2023 – attended every meeting of the Audit Committee.

Meetings of the Portfolio and Project Committee are held regularly prior to the meetings of the Supervisory Board. The committee used its meetings in 2023 to prepare decisions regarding key investment and M&A projects on the basis of extensive information and intensive discussions.

The Sustainability and Transformation Committee met four times in its second year since being established. Its tasks include overseeing the strategy in terms of sustainability, ESG standards, performance, and processes, including and climate action in particular.

Further details regarding the activities of the Supervisory Board and its committees can be found in the (Consolidated) Corporate Governance Report.

Annual financial statements and dividends

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 Group Directors’ Report pursuant to section 96(1) of the Austrian Stock Corporation Act, as well as the Annual Financial Statements and the 2023 Consolidated Annual Financial Statements. Therefore, the Annual Financial Statements were adopted pursuant to section 96(4) of the Austrian Stock Corporation Act. Both the Annual Financial Statements and the Consolidated Annual Financial Statements for 2023 received an unqualified opinion from the auditors, KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna. The Supervisory Board also approved the (Consolidated) Corporate Governance Report reviewed by both the Supervisory Board and the Audit Committee as well as the (Consolidated) Report on the Payments Made to Governments. The Supervisory Board found no issues during the audits.

Following its review, the Supervisory Board considered the Executive Board’s proposal to the Annual General Meeting to distribute (i) a regular dividend of EUR 2.95 per share, which corresponds to an increase of EUR 0.15 over the previous year, and (ii) a special dividend of EUR 2.10 per share as appropriate and supported this resolution proposal. The remaining amount of the net profit after the dividend distribution will be carried forward to new account. 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 express my appreciation of the Executive Board and all employees for their commitment and extremely successful work in the 2023 financial year. I would like to give special thanks to OMV’s shareholders for their continued trust as well as to all of OMV’s customers and partners.

Vienna, March 7, 2024

For the Supervisory Board

Lutz Feldmann m.p.

Environmental, Social, and Governance
Health, Safety, Security, and Environment