ORLEN ORLEN Group 2017
Integrated Report

Letter from the Chairwoman of the Supervisory Board

GRI INDICATORS:
Capitals:

Ladies and Gentlemen,


optimal use of the favorable macroeconomic conditions in 2017 enabled the ORLEN Group to achieve record results and maintain its leading position in the competitive market of the demanding fuel and energy industry. Now we are facing new challenges. They will require both strengthening of our business area,  for instance by accelerating the current investment projects, and further development of the innovation culture at the ORLEN Group, which will be reflected in the strategic objectives for the next years that we are currently working on.

The ORLEN Group has a solid base to build on. In 2017 it once again posted record-high LIFO-based EBITDA of PLN 10.4bn on the back of strong performance delivered by all of its business segments, in particular the retail segment with its highest ever profit. A number of investments were continued in key areas, including major projects in the Downstream segment, such as the metathesis unit in Płock or polyethylene (PE3) unit in the Czech Republic. The power generation area was being further developed by proceeding successfully with building CCGT units in Włocławek and Płock. In 2018, PKN ORLEN also announced plans to embark on a project to construct wind farms in the Baltic Sea.
 
At the beginning of 2017, PKN ORLEN shares traded at PLN 85.30, which translated into Company market value of PLN 36.5bn. In the following months, the price steadily climbed to peak in October at PLN 134, the highest level in our history, and the Company capitalisation grew to PLN 57.3 bn. At the end of 2017, PKN ORLEN was valued at PLN 3.4bn.
 
The stability of ORLEN’s financial position is best evidenced by the highest ever rating assigned to it by the renowned rating agency Moody’s Investors. The successful projects and strong financial fundamentals allowed the Company’s Management Board to recommend payment of dividend for 2017 at the same level as last year, i.e. PLN 3 per share.
 
Supporting the culture of innovation has been and will continue to be a key factor determining the competitive position of the ORLEN Group in the region. In addition to its involvement in international research programmes, such as Horizon 2020 and BioRECO2VER, PKN ORLEN can boast of a number of in-house initiatives, e.g. launching a research project to produce biocomponents from algae. The ORLEN Group’s human resources are a huge reserve of capital in this area. It is the employees and their ideas or creativity that will drive the dynamic development of the Group in the future.
 
The wide spectrum of activities pursued within the ORLEN Group requires transparency and responsibility towards all stakeholders, including the shareholders. The ORLEN Group is guided by top standards in this area, both in its information policy and corporate social responsibility initiatives. Communication with investors is of special importance. We are greatly satisfied with the distinctions we received in recognition of our efforts, and they motivate us to further enhance the effectiveness of our activities.
 
We are proud that the ORLEN Group’s integrated reporting is particularly appreciated by domestic and international experts. I am convinced that with a coherent growth vision based on a modern and innovation-oriented corporate culture, the ORLEN Group is well positioned to achieve further successes.
 

Izabela Felczak-Poturnicka
Chairwoman of the Supervisory Board of PKN ORLEN



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