PL

ABOUT THE ORLEN GROUP

Capitals:
GRI Disclosures:

According to the CEE TOP 500 report published by Coface, currently the ORLEN Group is one of the largest corporations in Central and Eastern Europe in terms of revenue. In line with the new Strategy 2030 adopted in November 2020, the ORLEN Group's ambition is to be an active leader of energy transition in Poland and Central Europe.

The ORLEN Group's core business consists in the production and distribution of electric energy, crude oil processing, and production of fuels, petrochemical and chemical products, as well as sale of the Group's products on the retail and wholesale markets. The ORLEN Group is also engaged in hydrocarbon exploration, appraisal and production. The ORLEN Group is one of Poland's largest electricity distributors, operating an electricity grid with a total length of 191 thousand kilometres, covering approximately one-fourth of the territory of Poland. At the end of 2020 ORLEN Group managed 2,855 fuel stations. In 2020, PKN ORLEN acquired RUCH, Poland’s countrywide newsagent chain. Based on the chain of 1,209 RUCH newsagents, the Company will expand its range of stores and catering services beyond service stations. As at the end of 2020, the Group had a network of 114 electric vehicle charging stations. In 2020, the segments with the largest contribution to the ORLEN Group's consolidated EBITDA were Energy and Retail, each of which accounted for approximately 40% of the Group's total profit. The ORLEN Group companies' business also includes services: crude oil and fuel storage, transport, repair and maintenance services, laboratory, security, design, administrative, insurance and financial services.

A significant portion of the ORLEN Group's fuel output is sold through own retail network located in Poland, Germany, the Czech Republic, Slovakia and Lithuania.

The ORLEN Group's retail network is supported by wholesale and logistics infrastructure consisting of above- and underground storage tanks and long-distance pipelines.

Interactive mapof the ORLEN Group's Assets

RESULTS FINANCIAL SAFETY Net debt / EBITDA ratio: Moody's Agency rating: Fitch Agency rating: Signing a revolving credit facility agreementwith total value up to Issue 5-year corporate bonds associated with ESG rating of 1.27 Baa2 with positive outlook BBB- with stable outlook EUR 1.75 billion PLN 1 billion RESULTS Cash flow from operations: EBITDA LIFO1: Capital expenditures: Dividend paid for year 2019: PLN 1.00 / share PLN 12.4 billion PLN 7.2 billion PLN 9.0 billion PLN 0.4 billion Key figures and eventsin 2020 1 Before impairment of non-current assets of PLN (1.6) billion.
Petrochemicals EBITDA LIFO: PLN 2.1 billion ORLEN Group's utilization of Olefin installation capacity: 84% Sales volume: 5.1 million tonnes Capital expenditures: PLN 1.9 billion Largest petrochemical company and the only one in Central and Eastern Europe with fully integrated paraxylene and PTA production installations Utilization of PTA installation capacity: 79% Energy EBITDA LIFO: PLN 7.4 billion1 Production of electric andheat energy from conventionaland RES sources Over 0.5 GWe of electric power installed and almost 0.1 GWt of heating power installed in ORLEN Group from RES sources Capital expenditures: PLN 1.7 billion Total ORLEN Group's electric power installed: 4.3 GWt Total ORLEN Group's electric power installed: 2.9 GWe One of the main distributor of electric energy in Poland, with distribution network of 191 thousand kilometers, which covers 1/4 of country's area Retail EBITDA LIFO: PLN 3.2 billion Number of EV charging stations: 114 1.2 thousand of RUCH points ORLEN Group's market share: 15.8% Sales volume: 8.8 million tonnes Capital expenditures: PLN 1.3 billion Over 2.8 thousand fuel stations located in Poland, Germany, Czech Republic, Lithuania and Slovakia Over 22 thousand of Stop Cafe, Stopa Cafe Bistro and Star Connect points Refinery EBITDA LIFO: PLN -0.2 billion 6 refineries of ORLEN Groupin Poland, Czech Republicand Lithuania with maxthroughput capacity of35 million tonnes of crudeoil a year Sales volume: 23.6 milliontonnes Capital expenditures: PLN 3.2 billion Utilization of processing capacity: 84% ORLEN Group's white products yield: 79% Over 3.7 thousand kilometers of product and raw materials pipelines and 34 storage facilities Upstream EBITDA LIFO: PLN 0.3 billion Exploration and production projects in Poland and Canada Avarage production: 18 thousand boe / day Number of drillings: 8.6 net Sales volume: 0.7 million tonnes Capital expenditures: PLN 0.4 billion Crude oil and natural gas reserves (2P): 174.0 million boe ORLEN Group 1 Including PLN 4.1 billion of gain on bargain purchase of shares of ENERGA.

Selected financial-operating highlights of 2019-2020

Item

unit

2020

2019

I.  MACROECONOMIC DATA (average value for the period)

Brent oil

USD/bbl

 41.8

 64.2

Ural oil

USD/bbl

 41.7

 63.0

WTI oil

USD/bbl

 39.2

 57.0

Ural/Brent differential1

USD/bbl

 0.6

 0.8

Natural gas

PLN/MWh

 53

 69

Electric Energy

PLN/MWh

 209

 230

Emission allowances

EUR/t

 24.8

 24.8

Model Downstream margin1

USD/bbl

 7.3

 10.7

Model refining margin1

USD/bbl

 2.2

 5.2

Model petrochemical margin1

EUR/t

 839

 859

Average exchange rate USD/PLN

PLN

 3.8978

 3.8399

Average exchange rate EUR/PLN

PLN

 4.4449

 4.2988

Average exchange rate EUR/USD

USD

 1.1404

 1.1195

II. OPERATING ACTIVITY

Sales of products and goods, including:

‘000

 38,260

 43,293

Refinery

‘000

 23,560

 27,553

Petrochemicals

‘000

 5,106

 5,187

Retail

‘000

 8,852

 9,817

Upstream

‘000

 742

 736

Production, sales and distribution of electric energy, including:

 

 

 

Net electric energy production

TWh

 8.9

 8.6

Electric energy production from RES

TWh

0.8

0.0

External wholesale

TWh

 5.0

 4.6

External retail sale

TWh

 1.2

 1.1

External distribution

TWh

 0.7

 0.7

Crude oil throughput in the ORLEN Group, of which:

‘000

 29,485

 33,879

Crude oil throughput in PKN ORLEN

‘000

 15,306

 16,207

Crude oil throughput in the Unipetrol Group

‘000

 6,076

 7,854

Crude oil throughput in the ORLEN Lietuva Group

‘000

 7,847

 9,515

III. FINANCIAL ACTIVITY

3.1. Consolidated statement of profit or loss and other comprehensive income

Sales revenues

mln PLN

 86,180

 111,203

Profit from operations under LIFO2 increased by depreciation and amortization3

mln PLN

 12,410

 9,172

Refinery

mln PLN

 (237)

 2,783

Petrochemicals

mln PLN

 2,077

 2,314

Energy

mln PLN

 7,440

 1,570

Retail

mln PLN

 3,232

 3,045

Upstream

mln PLN

 322

 295

Corporate Functions

mln PLN

 (424)

 (835)

Profit from operations under LIFO increased by depreciation and amortization

mln PLN

10,819

8,993

LIFO effect2

mln PLN

 (2,374)

 (131)

rofit from operations increased by depreciation and amortization (“EBITDA2”)

mln PLN

 8,445

 8,862

Depreciation and amortization

mln PLN

 4,537

 3,497

Profit / (loss) from operations (“EBIT2”)

mln PLN

 3,908

 5,365

Net profit / (loss)

mln PLN

 2,825

 4,298

Profit/(Loss) attributable to shareholders of the Parent Company per share (EPS2)

PLN/share

 6.44

 10.05

3.2. Consolidated statement of financial position

Total assets

mln PLN

 83,827

 71,202

Equity

mln PLN

 42,379

 38,607

3.3. Consolidated statement of cash flows

Net cash from operating activities

mln PLN

 7,247

 9,319

Net cash used in investing activities, including:

mln PLN

 (8,495)

 (3,994)

Increase in non-current assets

mln PLN

 8,992

 5,457

Free cash flow4

mln PLN

 (1,248)

 5,325

Net cash used in financial activities

mln PLN

 (3,711)

 (3,363)

Dividends paid

mln PLN

 (428)

 (1,497)

 

Item

unit

2020

2019

3.4. Basic ratios2)

Liquidity ratios, including:

Current liquidity ratio

x

 1.1

 1.7

Quick liquidity ratio

x

 0.5

 0.9

Turnover ratios, including:

Receivables turnover

days

 34

 29

Liabilities turnover

days

 34

 28

Inventory turnover

days

 58

 48

Profitabilities ratios, including:

Return on assets (ROA)

%

 4.8

6.2

Return on equity (ROE)

%

 9.4

11.5

Return on capital employed (ROACE)

%

 9.2

 10.9

Return on capital employed under LIFO (ROACE LIFO)

%

 13.2

 11.2

Gross margin on sales

%

 5.2

 5.0

Net margin on sales

%

 4.8

 4.0

Debt ratios, including:

Net debt

mln PLN

 13,120

 2,448

Net debt / EBITDA

x

 1.27

 0.27

1) For the calculation formula, see Glossary.
2) For definitions of financial parameters and indicators as well as a description of the LIFO method of inventory valuation, see Glossary.
3) The operating results in 2019 and 2020 include impairment losses of PLN (179) million and PLN (1,591) million, respectively.
4) Free cash flow = net cash from operating activities + net cash from investing activities.

Keyevents

  • Filling of a vacant position on the PKN ORLEN Management Board
  • PKN ORLEN’s consolidated financial results for Q4 2019
  • Agreement to increase oil deliveries from Saudi Aramco
  • PKN ORLEN starts designing an offshore wind farm
  • Letter of intent signed with the Municipality of Płock on cooperation in the development of zero-emission hydrogen powered public transport service
  • ORLEN becomes a co-title sponsor of Alfa Romeo Racing
  • ‘ORLEN for Firefighters’ programme
  • Żelazny Aerobatics Team joins the ORLEN Team
  • Bartłomiej Marszałek on the ORLEN Team
  • Infolines supporting quick diagnostics for the inhabitants of the city of Płock and the Counties of Płock, Gostynin and Sierpc

  • 2019 dividend recommendation

  • The European Commission’s unconditional clearance for the acquisition of the ENERGA Group

  • Construction of a plant for making bio propylene glycol in Trzebinia

  • Manufacture of hand sanitiser

  • Manufacture of surface disinfectant

  • ORLEN Foundation’s support for hospitals combating the coronavirus epidemic

  • Free hot drinks at ORLEN stations for services fighting the coronavirus

  • ORLEN actively supports motorists at the border

  • Lower fuel prices at ORLEN service stations

  • PKN ORLEN’s sports plans in 2020

  • PKN ORLEN is a patron of the 18th International Fryderyk Chopin Piano Competition

  • Call for applications in the 3rd edition of the ‘My Place on Earth’ grant programme

 

 

  • PKN ORLEN’s consolidated results for Q3 2020

  • PKN ORLEN provides its service stations with additional equipment to improve customer and employee safety

  • PKN ORLEN’s ESG rating upgrade

  • PKN ORLEN selects a trading partner under the GovTech program

  • PKN ORLEN tops the ‘National Champions’ ranking

  • PKN ORLEN employees join the state campaign to assist elderly people

  • Volunteering Week at the ORLEN Group

  • ORLEN Group Integrated Report awarded in ‘The Best Annual Report 2019’ competition

  • Athletes related to ORLEN join the battle against the pandemic

Awardsand accolades

  • The ‘Star of the Year 2020’ award in the ‘Event’ category for PKN ORLEN for its fuel merger concept; PKN ORLEN CEO Daniel Obajtek wins the ‘Star of the Year 2020’title in a survey conducted among internet users and Parkiet readers

  • PKN ORLEN CEO Daniel Obajtek wins the ‘Vector 2019’ award from Employers of Poland

  • PKN ORLEN included for the seventh time in the prestigious ranking of the world’s most ethical companies

  • PKN ORLEN’s best practices are again featured in the Responsible Business Forum Report

  • PKN ORLEN with the Baa2 rating from Moody’s

  • PKN ORLEN with the Golden CSR Leaf

  • PKN ORLEN maintains investment-grade rating from Fitch at BBB- with a stable outlook

  • PKN ORLEN ranks eighth in the 14th edition of the Responsible Companies Ranking and takes the second place in the ‘Fuels, Energy and Hydrocarbon Production’ category

  • PKN ORLEN CEO Daniel Obajtek named ‘Person of the Year’ during the Economic Forum 2020 in Karpacz

  • Moody’s raises outlook on PKN ORLEN’s credit rating to positive

  • ORLEN singled out in a survey by IBRiS Market and Social Research Institute as the most recognisable service station brand that customers in Poland like and trust the most

  • ORLEN Group 2019 Integrated Report is recognised as best-in-class in the business category of ‘The Best Annual Report’ competition, and PKN ORLEN receives ‘The Best of The Best’ title, granted to companies which have won the top award in competition at least three times

  • PKN ORLEN’s ESG Sustainalytics rating upgrade

  • PKN ORLEN tops the third edition of the ‘National Champions’ ranking of the largest and most innovative companies, published by the business and economic website Polityka Insight

  • PKN ORLEN with an award in the ‘Upholding and Reshaping Production Lines’ category of the Responsible Care Awards, organised by the European Chemical Industry Council (CEFIC)

  • CEO Daniel Obajtek receives the ‘Energy Personality 2020’ award from the Lower Silesian Institute for Energy Studies

  • PKN ORLEN wins the Polish Radio’s ‘Made in Poland – I Like That!’ award in the category ‘Businesses Succeeding in the Time of COVID-19 Pandemic’

  • PKN ORLEN with the Super Business Golden Laurels in the ‘Company of the Decade’ category

  • The ORLEN Group awarded the ‘Electromobility Leader 2020’ title from PwC Polska and the Polish Alternative Fuels Association

  • ANWIL as the winner of the ‘Employer – Provider of Safe Work’ competition

  • Daniel Obajtek named ‘Man of Freedom 2020’ by the Sieci weekly

  • ANWIL awarded the International Fertilizer Association Gold Medal for the implementation of the International Product Stewardship Programme and promoting the idea of Safety, Health and Environment (SHE) Excellence

  • ANWIL ranks as one of the three safest employers in Poland

Letter from the President of the Management Board
Shares and shareholding structure

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