Strategia PKN ORLEN PKN ORLENna lata 2014-2017 Strategy 2014-2017 July 23rd 2014 We discover and process natural resources to fuel the future 1
Agenda Strategic credo Pillars of value creation Supporting slides 2
Consistent implementation of strategic objectives approved in 2012 Shareholders Value creation Systematic dividend payment: Record results in the Retail segment in 2013 PLN 1.5 per share for 2012 Acquisition of Canadian upstream…
PKN ORLEN strategic vision Strong position on large and growing markets Retail Strong customer focus Integrated value chain Downstream Downstream Operational excellence Sustainable Upstream development Upstream Modern…
Pillars of PKN ORLEN Strategy for 2014-2017 Value creation EBITDA: PLN 5.1 billion* Financial strength Dividend: DPS increase** People Values: ORLEN *The average annual EBITDA LIFO in 2014-2017 ** DPS, Dividend per Share…
Agenda Strategic credo Pillars of value creation Supporting slides 6
Value creation: Downstream Integrated assets and strong market position Value creation levers Integrated value chain DOWNSTREAM Integrated value chain management comprehensive downstream value chain management Refinery product…
Value creation: Retail Modern network off fuel station loyal customer base and strong brand Value creation levers Home fuel markets share increase*, % Modern network of fuel stations further development of both the 17.0 14.1…
Value creation: Upstream Increase of hydrocarbons production in stable and safe regions Hydrocarbons production, Value creation levers million boe/year 6.0 Organic growth in Poland focus on the most perspective areas of the…
Value creation: EBITDA The average annual EBITDA LIFO growth of PLN 2 billion + PLN 2 billion* -0.1 0.2 EBITDA LIFO Downstream** Retail Upstream Corporate Average EBITDA LIFO 2013 functions 2014- 2017 * Including PLN 1.6…
Value creation: CAPEX Growing spending on development projects The increase of expenditure on CAPEX structure by the type of investment, development projects 2014-2017, PLN billion PLN billion Development Maintenance 3.2 Upstream and…
Financial strength Flexibility and resilience to crisis scenarios Foundations Objectives Guaranteed sources of funding (over EUR 4 billion) Financial ratios Rating - investment grade Optimal maturity Financial gearing -…
People ORLENs values as the foundation for modern management culture RESP ONSIBILITY We respect our customers, shareholders, the natural environment and local communities P ROGRESS We explore new opportunities PEOP LE Our…
People Responsibility for people, the environment and our partners Health & Safety Environmental protection Social responsibility Safety first: zero tolerance Strengthening the image of an Responsibility towards for accidents…
People Development of the human capital and innovation Employees Leaders Innovations Investing in a continued Focusing on inspiring Systematic increase in development of employees Leaders employees spending on Research and…
Strategy 2014-2017 Summary Retail Leveraging the opportunities for further growth Value creation Downstream Profitability increase of the integrated value Financial strength chain People Upstream Consistent and balanced…
Agenda Strategic credo Pillars of value creation Supporting slides 17
PKN ORLEN Company profile Business profile Shareholders, % TOP 10 products by revenue State Treasury Diesel The largest company in Poland Gasoline and the Central Europe, holding Heavy Fuel Oil 323rd position in the Fortune…
DOWNSTREAM: Value creation foundations High-class production assets Strong position on growing in-land markets Strong position on the wholesale market in Central Integrated, high-class refinery, petrochemical and Eastern Europe, %,…
DOWNSTREAM: Value creation levers (1/2) The main development goals of the Downstream sector: further integration of the value chain, construction of flexible power energy assets and constant improvement of sales models Sales and…
DOWNSTREAM: Value creation levers (2/2) CAPEX, annual average, PLN billion Share in the Polish fuel market, +6 pp % Refining and Petrochemicals 60 1.7 1.2 0.7 Development*** 0.4 Utilization ratio - Maintenance/ 1.0 0.8…
RETAIL: Value creation foundations PKN ORLEN operates a modern and PKN ORLEN is an unquestionable leader the largest sales network in the region on a very attractive market Fuel stations in Poland, 2013 Retail market shares, 2013…
RETAIL: Value creation levers and results EBITDA LIFO 2013 2017 PLN billion +2.9 pp Share in home markets, % 14.1 0.2 1.5 1.3 +0.4 Sales per fuel station, 3.4 million liters +29 Non-fuel margin, index 100 EBITDA LIFO…
UPSTREAM: Value creation foundations Upstream development is based upon safe Organic exploration projects focused on Polish foundations licenses Production assets in Canada, 2013 Leader in the shale gas exploration: Oil and gas…
UPSTREAM: Hydrocarbons exploration and production areas Production projects in Canada Exploration projects in Poland BALTIC SEA SIERAKW PROJECT KARBON PROJECT HRUBIESZW SHALE unconventional projects LUBLIN…
UPSTREAM: Value creation levers and results 2013 2017 EBITDA LIFO Hydrocarbons PLN billion 6.0 production* million boe/y 0.1 54 Hydrocarbons reserves** 22 0.4 million boe Number of wells, 147 cumulatively, at the 14…
Crude oil pipeline network in Europe (70) Primorsk Kirishi (30) Ust-Luga Yaroslavi Sea terminal [handling capacity] (18) Ventspils BPS2 Crude oil pipeline [capacity] Planned crude oil pipelines Butinge DRUZHBA (14)…
PKN ORLEN in numbers, 2013 Nameplate Fuel Fuel Other refining Downstream capacity, yield, sales, sales, million t Sales, million t % million t thousands t Refining 35.2 77% 15.5 7.7 Petrochemicals 5 174 Poland Pock 16.3 78% 6.5 5.3…
Macro assumptions Macroeconomic factor Unit 2013 2014-2017 Model Downstream margin USD / bbl 10.7 11.0 Brent/Ural differential USD / bbl 1.0 1.0 Model Refining margin and differential USD / bbl 4.4 4.4 Model Petrochemical…
Definitions of the Key Performance Indicators Business segment Entity Definition Upstream million Production of hydrocarbons Annual volume of hydrocarbons production, i.e. oil and gas, expressed in barrels of oil equivalent (boe)…
Glossary of Terms, Acronyms and Abbreviations Term / Acronym / Definition Abbreviation barrel is an unit of fluid volume used in the oil trade. 1 barrel of oil = 42 U.S. gallons = 158.9683 l ( 159 l). In Europe, the amount of oil is…
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