The Group’s organisation supports the implementation of its ambitious strategic goals of increasing the efficiency and value of production and retail assets and strengthening the market position through effective segment management.
ORLEN Group structure
The ORLEN Group comprises PKN ORLEN (the Parent) and companies based in Poland, Germany, the Czech Republic, Lithuania, Malta, Sweden, the Netherlands, Slovakia, Switzerland, Estonia, Latvia and Canada. As at December 31st 2014, the Group consisted of 84 companies, including 77 subsidiaries.
ORLEN Group companies are engaged in a wide range of activities, spanning the following areas:
- Production and sales – crude oil processing, production of refining, petrochemical and chemical products and semi-products, and wholesale and retail sale of fuels, other refining products and petrochemicals;
- Services – crude oil and fuel storage, road and rail transport, maintenance and repair, lab, security, design, administrative, insurance and financial services;
- Exploration for and appraisal of hydrocarbon deposits, and power generation, transmission, distribution and trade.
For management purposes, the ORLEN Group is organised into the following operating segments:
- Downstream,
- Retail,
- Upstream,
- Corporate Functions.
ORLEN Group segment structure
As at December 31st 2014.
ORLEN Group organisation and management rules
The Group’s organisation supports the implementation of its ambitious strategic goals of increasing the efficiency and value of production and retail assets and strengthening the market position through effective segment management.
Segment management allows the Group to carry out its activities in a coordinated manner, enhance its operating efficiency, and unlock its potential for economies of scale and synergies. The adopted management model guarantees uniform corporate standards and procedures, and helps to optimise investment, procurement, HR management, PR and marketing processes.
Initiatives in the said areas are facilitated by the ORLEN Group Constitution, comprising the ORLEN Group Cooperation Agreement and the ORLEN Group Rules, which have been implemented across Group companies.
The principal advantage of the ORLEN Group Constitution has been a further improvement in management efficiency at the Group, achieved through standardisation of rules and policies governing the flow of information and effective monitoring of key business decisions. The implementation of uniform organisational standards amplified this effect.
The ORLEN Group Rules serve to regulate internal relations within the Group, sanctioning a uniform corporate governance framework and supporting the delivery of the Group’s objectives in line with the principle of cohesion. This principle is applied in practice by each Group company co-operating with PKN ORLEN and other Group companies.
A vital component of the system for managing the ORLEN Group are the Rules of Owner Supervision over ORLEN Group companies, which define the remits of individual organisational units at PKN ORLEN. They reflect the assignment of Group companies to the individual organisational segments and the units’ authority to oversee their respective business activities.
The Rules of Owner Supervision include the rules for appointing the chairpersons of the supervisory boards and audit committees at ORLEN Group companies and rules governing the representation of PKN ORLEN in dealings with Group companies. Furthermore, the document also contains the rules governing liability of persons appointed as chairpersons of the supervisory boards and audit committees at Group companies and persons representing PKN ORLEN in dealings with Group companies.
Key companies operating on individual markets
POLAND
PKN ORLEN (Polski Koncern Naftowy ORLEN Spółka Akcyjna)
PKN ORLEN’s principal activity consists in crude oil processing, production of refining and petrochemical products, and their wholesale and retail sale. The Company was created as a result of the merger of Centrala Produktów Naftowych, the main distributor of motor fuels in Poland, with Polski Koncern Naftowy, a fuel producer, which was completed in September 1999. On April 12th 2000, it changed its business name to Polski Koncern Naftowy ORLEN Spółka Akcyjna.
Key financial and operating data of PKN ORLEN (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 27,659 | 28,091 | 27,394 | (432) | (1.5%) |
| Revenue | PLNm | 76,972 | 84,040 | 88,349 | (7,068) | (8.4%) |
| LIFO-based operating profit before amortisation/depreciation (LIFO-based EBITDA) and impairment losses |
PLNm | 2,891 | 2,074 | 2,947 | 817 | 39.4% |
| Operating profit before amortisation/depreciation (EBITDA) | PLNm | 648 | 1,479 | 2,866 | (831) | (56.2%) |
| Net profit/(loss) 1) | PLNm | (4,672) | 618 | 2,128 | (5,290) | - |
|
Equity |
PLNm | 16,302 | 23,135 | 22,920 | (6,833) | (29.5%) |
| Total assets | PLNm | 37,978 | 42,063 | 41,407 | (4,085) | (9.7%) |
| Employee headcount as at Dec 31 | persons | 4,543 | 4,409 | 4,445 | 134 | 3.0% |
1) The PKN ORLEN’s 2014 net loss includes recognition of impairment losses of PLN (-)4,967m on shares in related entities AB ORLEN Lietuva and ORLEN Upstream.
ANWIL S.A. (along with the ANWIL Group)
ANWIL S.A. was incorporated on March 15th 1993 following transformation of a state-owned enterprise into a state-owned stock company. As at December 31st 2014, the company was wholly-owned by PKN ORLEN. ANWIL S.A. manufactures nitrogen fertilisers, plastics (polyvinyl chloride, PVC granulates, PVC-based mixes, and PVC sheets) and chemicals for the processing industry and agriculture (ammonia, chlorine, nitric acid, salt separated, sodium hydroxide).
Key financial and operating data of the ANWIL Group (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes |
1,898 | 1,783 | 1,821 | 115 | 6.4% |
| 0 | - | |||||
| Revenue | PLNm | 3,291 | 3,338 | 3,358 | (47) | (1.4%) |
| Operating profit before amortisation/depreciation (EBITDA) and impairment losses |
PLNm | 297 | 317 | 342 | (20) | (6.3%) |
| Operating profit/(loss) before amortisation/depreciation (EBITDA)1) | PLNm | 79 | 317 | (223) | (238) | (75.1%) |
| Net profit/(loss) | PLNm | 2 | 213 | (235) | (211) | (99.1%) |
| Equity | PLNm | 863 | 1,668 | 1,446 | (805) | (48.3%) |
| Total assets | PLNm | 1,590 | 2,418 | 2,165 | (828) | (34.2%) |
| Employee headcount as at Dec 31 | persons | 2,843 | 3,122 | 3,148 | (279) | (8.9%) |
1) The ANWIL Group’s operating profit for 2014 and 2012 was reduced by PLN (-)218m and PLN (-)565m, respectively, following remeasurement of net impairment losses on ANWIL Group companies’ assets. The impairment losses recognised in 2014 and 2012, of PLN (-)154m and PLN (-)565m respectively, were reversed as part of the consolidation process in connection with the classification of ANWIL assets to the petrochemical segment of the ORLEN Group and tests carried out within that segment.
Rafineria Trzebinia S.A. (ORLEN Południe S.A.)
In December 2014, the Extraordinary General Meeting of Rafineria Trzebinia S.A. and Rafineria Nafty Jedlicze S.A. resolved to merge the two companies. The combination took place on January 5th 2015. In connection with the consolidation processes, the company was renamed ORLEN Południe S.A.
Under an agreement of June 16th 1997 executed with Nafta Polska S.A., PKN ORLEN had acquired 74.88% of shares in Rafineria Trzebinia. As at December 31st 2014, the company’s shareholders included PKN ORLEN (99.46%) and other shareholders (0.54%).
The company’s business consists in crude oil processing, production of biofuels and oils, as well as provision of logistic and storage services.
Key financial and operating data of Rafineria Trzebinia S.A. (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 567 | 565 | 409 | 2 | 0.4% |
| 0 | - | |||||
| Revenue | PLNm | 1,678 | 1,830 | 1,497 | (152) | (8.3%) |
| LIFO-based operating profit before amortisation/depreciation (LIFO-based EBITDA) |
PLNm | 71 | (32) | 67 | 103 | - |
| Operating profit/(loss) before amortisation/depreciation (EBITDA) | PLNm | 58 | (34) | 59 | 92 | - |
| Net profit/(loss) | PLNm | 57 | (106) | 27 | 163 | - |
| Equity | PLNm | 355 | 299 | 404 | 56 | 18.7% |
| Total assets | PLNm | 594 | 753 | 711 | (159) | (21.1%) |
| Employee headcount as at Dec 31 | persons | 492 | 519 | 546 | (27) | (5.2%) |
LITHUANIAN MARKET
AB ORLEN Lietuva (along with the ORLEN Lietuva Group)
AB ORLEN Lietuva is the parent of the ORLEN Lietuva Group, registered with the Lithuanian Registry Court on January 24th 1991 as AB Mazeikiu Nafta. On December 15th 2006, PKN ORLEN purchased a majority interest in the company from Yukos International UK B.V., and on April 29th 2009 it became its sole owner following the purchase of company shares from the Lithuanian government. Since September 1st 2009, the company has operated under the name AB ORLEN Lietuva.
The company’s principal areas of operation include crude oil processing, manufacture of refining products, wholesale of the company’s products on local markets, as well as their export by land and by sea, using the Klaipėdos Nafta terminal. In July 2014, PKN OLREN acquired AB VENTUS Nafta (part of the ORLEN Lietuva Group), responsible for retail sales in Lithuania.
Key financial and operating data of the ORLEN Lietuva Group (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 7,737 | 9,083 | 8,684 | (1,346) | (14.8%) |
| 0 | - | |||||
| Revenue | PLNm | 19,589 | 25,445 | 26,131 | (5,856) | (23.0%) |
| LIFO-based operating profit before amortisation/depreciation (LIFO-based EBITDA) and impairment losses | PLNm | (194) | (23) | 580 | (171) | (743.5%) |
| Operating profit/(loss) before amortisation/depreciation (EBITDA) | PLNm | (4,365) | (67) | 565 | (4,298) | (6414.9%) |
| Net profit/(loss) | PLNm | (4,575) | (416) | 115 | (4,159) | (999.8%) |
| Equity | PLNm | 253 | 3,830 | 4,349 | (3,577) | (93.4%) |
| Total assets | PLNm | 1,918 | 7,400 | 8,343 | (5,482) | (74.1%) |
| Employee headcount as at Dec 31 | persons | 1,650 | 2,158 | 2,284 | (508) | (23.5%) |
1) The ORLEN Lietuva Group’s operating result for 2014 was reduced by PLN (-)4,181m following remeasurement of net impairment losses on its assets.
CZECH MARKET
Unipetrol a.s. (along with the Unipetrol Group)
Unipetrol a.s. is the parent of the Unipetrol Group, which was established in 1994 following the restructuring of the Czech petroleum sector. Apart from Unipetrol a.s., the Group includes Kaucuk, Chemopetrol, Benzina, Ceska Rafinerska, Unipetrol Trade, Spolana, Paramo and Unipetrol Rafinerie. In 2005, PKN ORLEN acquired a 62.99% stake in Unipetrol a.s.
The Group’s principal business consists in crude oil processing and production and distribution of refining, petrochemical and chemical products.
Key financial and operating data of the Unipetrol Group (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 6,042 | 4,729 | 5,534 | 1,313 | 27.8% |
| 0 | - | |||||
| Revenue | PLNm | 18,873 | 16,062 | 17,857 | 2,811 | 17.5% |
| LIFO-based operating profit before amortisation/depreciation (LIFO-based EBITDA) and impairment losses |
PLNm | 1,230 | 255 | 610 | 975 | 382.4% |
| Operating (loss) before amortisation/depreciation (EBITDA)1) | PLNm | 200 | 245 | (147) | (45) | (18.4%) |
| Net profit/(loss) | PLNm | (72) | (201) | (519) | 129 | 64.2% |
| Equity | PLNm | 4,336 | 4,236 | 4,792 | 100 | 2.4% |
| Total assets | PLNm | 7,437 | 7,536 | 8,269 | (99) | (1.3%) |
| Employee headcount as at Dec 31 | persons | 3,878 | 3,967 | 4,062 | (89) | (2.2%) |
1) The Unipetrol Group’s operating result for 2014 and 2012 was reduced by PLN (-)752m and PLN (-)688m, respectively, following remeasurement of net impairment losses on Unipetrol Group companies’ assets.
GERMAN MARKET
ORLEN Deutschland GmbH was established after PKN ORLEN acquired a service station network operating in northern and eastern Germany. The transaction between PKN ORLEN and Deutsche BP AG was completed in December 2002. As at December 31st 2014, the company was wholly-owned by PKN ORLEN. ORLEN Deutschland GmbH’s principal area of operations is retail sale of fuels in Germany.
Key financial and operating data of ORLEN Deutschland GmbH (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 2,621 | 2,524 | 2,484 | 97 | 3.8% |
| 0 | - | |||||
| Revenue | PLNm | 15,965 | 16,052 | 16,527 | (87) | (0.5%) |
| Operating profit before amortisation/depreciation (EBITDA) | PLNm | 230 | 241 | 208 | (11) | (4.6%) |
| Net profit/(loss) | PLNm | 91 | 102 | 71 | (11) | (10.8%) |
| Equity | PLNm | 458 | 524 | 504 | (66) | (12.6%) |
| Total assets | PLNm | 1,567 | 1,711 | 1,661 | (144) | (8.4%) |
| Employee headcount as at Dec 31 | persons | 143 | 138 | 134 | 5 | 3.6% |
CANADIAN/POLISH MARKET
ORLEN Upstream Sp. z o.o. is the parent of the Upstream Group. As at December 31st 2014, the company was wholly-owned by PKN ORLEN. The company’s principal business consists in carrying out hydrocarbon production in Canada and exploration and production projects in Poland.
Key financial and operating data of the ORLEN Upstream Group (according to data used for consolidation purposes)
| ITEM | UNIT | 2014 | 2013 | 2012 | CHANGE | CHANGE % |
|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6=(3-4) | 7=(3-4)/4 |
| Sales volume | thousand tonnes | 258 | 17 | - | 241 | 1417.6% |
| Revenue | PLNm | 340 | 60 | 30 | 280 | 466.7% |
| Operating profit before amortisation/depreciation (EBITDA) and impairment losses | PLNm | 191 | 97 | 4 | 94 | 96.9% |
| Operating profit before amortisation/depreciation (EBITDA)1) | PLNm | (131) | 97 | 4 | (228) | - |
| Net profit/(loss) | PLNm | (139) | 76 | 4 | (215) | - |
| Equity | PLNm | 1,855 | 1 140 | 317 | 715 | 62.7% |
| Total assets | PLNm | 2,549 | 1 478 | 364 | 1,071 | 72.5% |
| Employee headcount as at Dec 31 | persons | 112 | 91 | 52 | 21 | 23.1% |
The ORLEN Upstream Group’s operating result for 2014 was reduced by PLN (-)322m following remeasurement of net impairment losses on its Canadian assets.
Selected other ORLEN Group companies
Business profiles of selected other ORLEN Group companies
| NAME | BUSINESS PROFILE |
|---|---|
| Production and trading | |
| ORLEN OIL Group | production, distribution and sale of lubricating oils, lubricants, oil bases, car cosmetics and operating fluids |
| ORLEN Paliwa Sp. z o.o. | wholesale of liquid fuels manufactured by PKN ORLEN |
| ORLEN Gaz Sp. z o.o. | wholesale of liquid gas |
| ORLEN PetroTank Sp. z o.o. | wholesale of liquid fuels manufactured by PKN ORLEN |
| ORLEN Asfalt Sp. z o.o. | sale of road bitumens, multigrade modified bitumens, industrial bitumens and bitumen specifications |
| Rafineria Nafty Jedlicze Group | processing of crude oil, regeneration of spent oils, production and sale of base oils, fuel oils and organic solvents |
| Inowrocławskie Kopalnie Soli SOLINO S.A. | storage of crude oil and fuels, packaging of salt, production of brine |
| Trading | |
| Petrolot Sp. z o.o. | distribution of aviation and vehicle fuels, warehousing, storage, loading and dispatching of fuels |
| Services | |
| ORLEN KolTrans Sp. z o.o. | railway transport of freight, services at railway car loading and unloading points, dispatching, repairs and upgrades of rolling stock |
| ORLEN Transport S.A. | transport of fuels, liquid gas and heavy chemicals |
| ORLEN Automatyka Sp. z o.o. | maintenance and repair, assembly, operation of equipment and C&I systems |
| ORLEN Wir Sp. z o.o. | major repairs and ongoing maintenance of compressors, centrifuge units, locomotive engines and power generators, upgrades of compressors and turbines and technical consultancy services |
| ORLEN Eko Sp. z o.o. | waste management using waste recovery and disposal installations, including management of hazardous waste, OHS, fire protection and environmental protection services, maintenance of rescue and fire-fighting equipment |
BUSINESS RELATIONS WITHIN THE ORLEN GROUPN
This Report presents the operations of PKN ORLEN and selected companies of the ORLEN Group.