Orlen Spolka Akcyjna · GPW:PKN
Orlen Spolka Akcyjna — Orlen — Investor Day (January 2025)
69 slides from Orlen Spolka Akcyjna's investor day presentation, Jan 9, 2025
Slide 1: ORLEN Group 2035 Strategy
Warsaw, 9 January 2025 ORLEN Group 2035 Strategy the energy of tomorrow starts today
Slide 2: Our Role & Market Opportunity
Our Role & Market Opportunity 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 2
Slide 3: We power Central Europe's energy transition
We power Central Europe’s energy transition 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 3
Slide 4: Today, we provide the region with the energy it needs
provide the Today, we provide theregion regionwith withthe theenergy energyititneeds needs We deliver natural gas for the Polish economy ~20 [bcm] 9.1 [bcm] Norway of natural gas delivered of natural gas production to target markets in Poland, Norway, Canada, and Pakistan lithuania We deliver fuels
Slide 5: CEE is Europe's economic powerhouse, and we are best positioned to lead
CEE is Europe's economic powerhouse, and we are best positioned to lead its energy transition Nominal GDP growth 2025-2050 Central Europe comparison [%] germany & austria + The CEE region is increasingly western europe leveraging its highly educated talent pool to drive growth 3.7 + The region seeks
Slide 6: The CEE region is in the midst of energy transition
The CEE region is in the midst of energy transition, but conventional energy sources are still required to fuel the region's growth Gas as a transition fuel during coal phase-out Moving towards decarbonised transport sector Need for zero-emission energy sources Poland Gas Demand Outlook [bcm] Final
Slide 7: Customer preferences are constantly evolving
Customer preferences are constantly evolving, creating both challenges and new opportunities for ORLEN’s multi-energy portfolio Mega trends impacting consumer ~1.8 MWh Transition towards sustainable Power Consumption energy sources at home Increasing demand for decentralised renewable energy solutio
Slide 8: Key trends and fundamental principles guiding our transformation
Based on key trends and future market changes, we have defined fundamental principles guiding our transformation UPSTREAM & SUPPLY downstream energy consumers & products Gas as a transition fuel Moving towards Need for zero-emission Consumer-centricity during coal phase-out decarbonising transport e
Slide 9: Our Ambitions
Our Ambitions 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 9
Slide 10: We will deliver attractive and progressive dividend to our shareholders
We will deliver attractive and progressive dividend to our shareholders EBITDA [PLN bn] +4% Solid EBITDA generation from integrated segments cagr +2% Upstream & Supply as financing vehicle for transformative cagr +12% ~53-58 projects by 2030 cagr ~41-46 ~43-47 Ø EBITDA ’31-’35: Stable profits from D
Slide 11: Our strategy is set on solid foundations and pillars
Our strategy is set on solid foundations and pillars to integrate and streamline our business orlen 2035 Value maximisation Innovative & sustainable Asset optimisation Capital stewardship product portfolio Bringing the cash home Transforming for the future Derisking the model Finding the right capit
Slide 12: A set of ambitious targets for a responsible transition
A set of ambitious targets fits with our strategic principles and allows us to deliver a responsible transition orlen 2035 Value maximisation Innovative & sustainable Asset optimisation Capital stewardship product portfolio Bringing the cash home Transforming for the future Derisking the model Findi
Slide 13: Approach of pragmatic energy transition
To accomplish these targets, we follow an approach of pragmatic energy transition Low-carbon investments Strategic flexibility and Understanding of target Strategic alignement Partnerships in the integrated system investment scalability landscape to accelerate and rigid capital accelerating innovati
Slide 14: ORLEN's target ecosystem as a platform for transformation
ORLEN’s target ecosystem will serve as a platform for transformation from conventional to low-carbon solutions CCUS DOWNSTREAM R e ining f CCUS bio fuels syn fuels & h2 consumers petr oc hemi als c & products upstream & supPly fuel s les a & c o e env ni nce c onvini e e es|nc| fu l EV H2 bio es|s f
Slide 15: Net Zero: commitment to reduce emissions across our ecosystem
The commitment to reduce emissions is a principle across our entire ORLEN ecosystem we have updated the two decarbonisation targets, extending their pathways to 2035 2030 target 2035 target 2050 AIM Absolute emissions1 [ Scope 1+2 ] -13 % -25 % Emissions intensity2 [ Scope 1 ] Net Zero -40 % -55 % f
Slide 16: Delivering Transition
Delivering Transition Strategic overview 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 16
Slide 17: The Energy of tomorrow starts today
The Energy of tomorrow starts today Responsible changing needs Downstream Consumers Transition of our fuel mix & products towards a greater share of Integration and digitisation of renewable energy in consumer services transport Secure New zero upstream & supPly and low-emission Supplies of energy c
Slide 18: Upstream & Supply
Upstream & Supply 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 18
Slide 19: Combining own gas production with LNG trading to secure supplies
Upstream & Supply Combining own gas production with LNG trading will secure gas supplies for the Polish economy gas production [bcm] poland norway other Robust own gas production in Poland and abroad 12.0 12.0 Ensuring a flexible portfolio of LNG contracts 9.1 Ensuring security of Secured infrastruc
Slide 20: Carbon transport and storage value chain for CCUS
Upstream & Supply Carbon transport and storage value chain will allow ORLEN to provide CCUS services within and outside of the Group ORLEN positioning across CCUS value chain [mtpa] 2035 Capture & Utilisation Transport Storage Offshore / Onshore CO2 capture potential from ECO2CEE terminal storage2 O
Slide 21: Downstream
Downstream 01_nasza 01_Our Role rola & Market w transformacji Opportunity 02_nasze 02_Our ambicje ambitions 03_kierunki 03_Delivering strategiczne Transition 04_dekarbonizacja o4_Delivering naszejtransformation działalności 05_wyniki 05_Decarbonising finansowe our 06_czynniki business wspierające 06
Slide 22: Transforming refining: alternative fuels and lower emissions
DOWNSTREAM: TRANSFORMING REFINING Focus on expanding alternative fuel production as well as reducing emissions from existing assets to drive decarbonisation of the transport sector Share of renewable energy ORLEN RED III ambition in fuel mix1 [%] Biofuels and e-fuels production optimised for Orlen's
Slide 23: Deepening the petrochemical product portfolio
DOWNSTREAM: petrochemicals Deepening the product portfolio across the petrochemical value chain, with an increasing share of products based on circular and renewable feedstocks Product sales based on Strategic review of petrochemical assets in light of challenging circular & renewable feedstocks [%]
Slide 24: Expanding capabilities in biofuels production and supply
downstream: biofuels ORLEN will while expand capabilities in biofuels production and supply, pursuing feedstock partnerships and establishing a dedicated organisation K y abl e en ers K ya v e cti ities H gh f a b l y i e si i it L wf a bl y o e si i it er a g b f l h gh ly v l m t r et io ue s Incr
Slide 25: Downstream hydrogen: renewable H2 and low carbon supply plans
downstream: hydrogen ORLEN will consume ~350 kt of renewable or low-carbon hydrogen per year, s upplied from own production or imports ORLEN demand for low carbon and green H2 [kt] 2 035 ORLEN renewable H2 and low carbon supply plans Own production H2 for refinery production We are currently expan
Slide 26: Biomethane demand driven by road transport
downstream: biomethane Biomethane demand up to 2035 is driven by road transport. Significant growth in Downstream demand beyond 2035 creates a need to ensure its availability Current needs of ORLEN Future needs of ORLEN Current demand driver Future demand drivers Power Generation and Heating Biometh
Slide 27: Energy
Energy 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 27
Slide 28: Investing in 12.8 GW of RES supported by BESS
ENERGY: RENEWABLES Supporting transition of the regional energy sector by investing in 12.8 GW of RES capacity supported by BESS res installed capacity [gw] Enabling decarbonisation of Power, Industry and Transport sectors through development of renewable energy sources Regional RES leader Completio
Slide 29: Development of four offshore concessions
ENERGY: RENEWABLES Development of four existing offshore concessions and preparation of further projects - both in Poland and abroad Current ORLEN offshore development plans capacity1 [GW] 1.2 [ ongoing ] 1.0 [ within strategy horizon ] C oncession 1 0.8 C oncession 2 1.2 [ 2 PROJECTS within strateg
Slide 30: Stable energy supply through low emission power plants
ENERGY: LOW EMISSION Ensuring a stable supply of energy through low emission power plants CCGT installed capacity [gw] ORLEN enables energy system transition with 4.3 GW 4.3 4.3 Guarantee of stable of gas power plants energy supply through CCGTs and nuclear as the available technologies to support z
Slide 31: Support for power and gas distribution networks
energy: low emission Support for power and gas distribution networks as a foundation to enable the energy transition Map of Orlen’s distribution networks ORLEN investments in distribution networks [PLN bn] Counties covered by the Polska Spółka Gazownictwa gas network Gas distribution Electricity dis
Slide 32: Consumers & Products
Consumers & Products 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 32
Slide 33: Energy transition of transport through ultrafast EV charging
CONSUMERs & products Supporting energy transition of the transport sector by delivering energy to EVs through own network of ~6 thousand ultrafast charging points VITAY ecosystem users1 [mn] Creating customer centric organization offering integrated ORLEN 10 product portfolio for at least 10 million
Slide 34: Integrated consumer convenience ecosystem around VITAY
CO N S U ME R s & pro d ucts ORLEN integrated consumer convenience ecosystem will be built around client-centricity, driven by partnerships and VITAY platform Target integration of the VITAY platform in 2035 10mn Electromobility Customers Fuel retail PLN 7.3 bn ~33% of Polish market EBITDA per stati
Slide 35: Delivering Transformation
Delivering Transformation Strategic initiatives deep-dive 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 35
Slide 36: Upstream & Supply: contract and production portfolio optimisation
Upstream & S upply Focusing on contract & production portfolio optimisation to secure the supply of the gas Initiatives Description Strategic targets poland Gas production [bcm] Building and developing a balanced and integrated portfolio of onshore Optimisation of production in Poland and offshore p
Slide 37: Downstream: value maximisation, decarbonisation, asset optimisation
downstream Centering around value maximisation, decarbonisation of production and asset optimisation Initiatives Description Strategic targets Annualized development CAPEX [Bn PLN] Strategic Development CAPEX Creation of long-term asset management plan aimed at coordination 8.5-9.5 Allocation of gro
Slide 38: Ambitious RES development supported by BESS
ENERGY: RENEWABLES Ambitious RES development, supported by BESS integration initiatives Description Strategic targets I ll d y Off h s ore w d in O h ns ore W d in PV Hyd ro 12,8 nsta e capacit by tech lno og y[ GW ] 9,0 2,1 Completion of Baltic Power and development in partnership of a Expansion of
Slide 39: Low emission energy: decarbonisation and efficiency
ENERGY: LOW EMISSION Our low emission energy business will focus on decarbonisation and efficiency improvements across our asset base initiatives Description Strategic targets Installed Gas PP'S capacity1 [GWe] Development of new gas power plants and securing reliable, cost-effective Completion of o
Slide 40: Building a robust multi-energy offering
CONSUMERs & products Overarching goal of ORLEN Consumer is to build and implement a robust multi-energy offering and leveraging a combined customer portfolio initiatives Description Strategic targets Integration of fuel and energy retail, leveraging a combined database of customers in Segment integr
Slide 41: Decarbonising Our Business
Decarbonising Our Business 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 41
Slide 42: Reducing Upstream and Downstream emissions by 25% by 2035
By 2035, ORLEN Group is comitted to reduce its emissions from Upstream and Downstream by 25% Reduction of GHG emissions in Upstream and Downstream1 [Mt CO2e] -25% -13% 16.8 14.5 12.5 Low-carbon Energy Upstream CCUS Low-carbon Energy Upstream energy efficiency emission energy efficiency emission sour
Slide 43: Reducing emissions intensity of Energy operations by 55%
By 2035, we will reduce emissions intensity of our Energy operations by 55%, while phasing out coal-based power and heat generation Reduction of emissions intensity of Energy segment1 [kg CO2e/MWh] -55% Investing in RES sources: rapid expansion of onshore -40% and offshore RES capacities 377 Develop
Slide 44: Phasing out coal in power and heat generation
By the end of 2030 we will phase out coal in power generation, while by 2035 we aim to fully abandon coal-based production in district heating assets Power generation Heat generation Coal-fired Power generation in Ostrołęka B1 [TWh] Coal-fired Combined Heat and Power generation2 [TWh] 18.7 Full coal
Slide 45: Net Carbon Intensity reduction up to 15% by 2035
ORLEN Group’s energy transition will lead to reduction of Net Carbon Intensity (NCI) up to 15% by 2035 Reduction of NCI1 [g CO2e/MJ] -100% -15% -10% 78 69 67 g CO2e/MJ g CO2e/MJ g CO2e/MJ Net Zero 2019 2030 2035 2050 Zero- and low-emissions power generation: Alternative fuels production: CCS The exp
Slide 46: Financial Results
Financial Results 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 46
Slide 47: Integrated business model ensures stable returns with EBITDA growth
Our integrated business model ensures stable returns, with 5.5% annual EBITDA growth by 2035 EBITDA [PLN bn] UPSTREAM AND SUPPLY DOWNSTREAM Energy Consumers & Products CORPORATE FUNCTIONS ∑ PLN ~500-550 bn +4% +2% ~53-58 Average annual EBITDA +12% Ø ’31-’35: ~51-57 increasing form PLN ~34-36 bn ~43-
Slide 48: Continued investment in new energy sources and decarbonisation
We will continue investing in new energy sources, gas supply for the energy transition and decarbonisation of the Downstream segment Investment expenditure - UPSTREAM AND SUPPLY DOWNSTREAM Energy Consumers & Products CORPORATE FUNCTIONS CAPEX and M&A [PLN bn] ∑ PLn ~350-380 bn Average annual CAPEX ~
Slide 49: Disciplined approach to CAPEX control
We implement disciplined approach to CAPEX control with growth and M&A spending to be carefully analysed in terms of economic benefit on a continuous basis Average annual capex 2025-2035 [PLN bn] Maintenance Regulatory Growth M&A and Partnership We put stress on maintenance and regulatory CAPEX spen
Slide 50: Hurdle rates aligned with project categories
To ensure proper project returns, we adopted hurdle rates aligned with specific project categories and their financing costs Flexible investment expenditures [PLN bn] 2025-2035 hurdle rates Differentiation by emission impact Value Emission Emission maximisation Neutral increase reduction ~120-130 ~1
Slide 51: Increased number of partnerships to derisk CAPEX
We will pursue an increased number of partnerships to develop both supply capabilities and enhance know-how, while derisking our CAPEX Growth CAPEX 2025-2035 Main CAPEX pools by segment in 2025-2035 period and finance structure XX% Share of own partnership M&A partnerships KEY FOCUS potential partne
Slide 52: Sharing profits with investors with DPS increase every year
Our strategy will allow us to share profits with our investors with DPS increase every year ORLEN’s historical ORLEN’s dividend [PLN/share] average dividend [PLN/share] Base dividend Total dividend The level of the guaranteed dividend in 2025 The Management Board may recommend will be increased from
Slide 53: Strategy enablers
Strategy enablers 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 53
Slide 54: Five key enablers with a focus on integration
Our transformation will be driven by five key enablers with a focus on integration of the Group and meaningful partnerships Partnerships CAPEX Management We build partnership We implement disciplined ecosystem in key development Sustainable approach to capital spending areas to access cutting-edge D
Slide 55: People & governance: revamped operating model
people & governance Revamped operating model brings clear and coherent division of responsibilities between companies and the HQ K fu ey nctions speci fi c to the Head qu arters :Strategy, M &A , Corporate G overnance, Reg u lation, S trategic F inance, S ponsoring, Mar eting k ORLEN Main corporate
Slide 56: Safe working environment for employees
people & governance The basis for the implementation of strategic targets will be the creation of safe working environment for employees of the ORLEN Group and companies performing work for the Group, while ensuring the safety of the processes carried out We will reduce number of accidents and failu
Slide 57: Responsible approach to CAPEX management
capex managment Our transformative pathway requires responsible approach to CAPEX management reflecting our strategy ORLEN Corporate Strategy Key success factors Ongoing monitoring of expected economic lifecycle Value maximisation Innovative & sustainable Capital stewardship Asset optimisation of as
Slide 58: Key drivers for partnerships creation
Partnerships Leveraging partnerships will support reaching strategic targets in nascent markets while reducing operational and financial risks Risk sharing & flexibility VITAY ecosystem De-risking new business ventures opening allowing ORLEN and its partners to foster transformation in the Key drive
Slide 59: Revised digital strategy to support growth and integration
Digitalisation & R&D Implementation of the revised digital strategy will support organisation’s growth and integration Corporate strategy Key takeaways translated onto the digitalisation strategy Segments’ integration and processes’ 1 unification as a prerequisite for system landscape & architecture
Slide 60: Sustainable development strategy: climate, environment, society
Sustainable Development ORLEN implements sustainable development strategy, focusing on the climate, environment and society climate environment employees communities governance Action to minimise Environment Occupational safety Relation with Responsible climate impact and biodiversity and well-being
Slide 61: Sponsorship and philanthropic activities
sustainable development While pursuing our business goals and building its position as a leader in the energy transformation, we implement sponsorship and philantropic activities Selected activities consistent with the ORLEN Group's Sustainability Strategy climate environment employees communities g
Slide 62: Just energy transition
SUSTAINABLE DEVELOPMENT We actively pursue just energy transition, aiming for a low-carbon future leaving no one behind Just transition People and Energy Employees Local communities energy COMPETENCES RESILIENCE COOPERATION Widespread access to sustainable Supporting employees to adapt to the Streng
Slide 63: Strategic context and trends
Strategic context and trends 01_Our Role & Market Opportunity 02_Our ambitions 03_Delivering Transition o4_Delivering transformation 05_Decarbonising our business 06_Financial Results 07_Strategy enablers 08_Strategic context and trends 63
Slide 64: Macroeconomic assumptions used in strategy creation
Macroeconomic assumptions Macroeconomic assumptions used in strategy creation process Macroeconomic Unit of measure 2025-2030 avg. 2030-2035 avg. [nominal] factor Model refining USD / bbl 6.33 8.01 margin Model petrochemical EUR / t 1,078.20 1,246.46 margin Brent crude price USD / bbl 84.77 92.35 TT
Slide 65: ETS costs among main drivers of macroeconomic changes
ETS costs to be among main drivers of macroeconomic changes within 2025-2050 period Electricity price forecast in Poland [PLN/MWh, real, 2024] EU ETS I price forecast [EUR/tCO2, real, 2024] 1,200 400 254 800 459 205 478 505 574 200 76 128 400 0 0 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 204
Slide 66: Liquid fuels remain a strong source of energy in CEE
Despite growing consumption of alternative fuels and electromobility popularisation liquid fuels will remain strong source of energy in the CEE region Consumption of final energy in transport [PJ] Diesel Biodiesel JET (incl. SAF) Gasoline Biogasoline LPG LNG/CNG H2 Electricity +0.1% +0.1% -0.9% -2.0
Slide 67: Key takeaways: gas demand in Poland
Considering its transitionary role in energy transformation, gas demand in Poland will reach ~27 bcm in early 2030s Gas demand in Poland [bcm] 2024-2050 27 27 27 27 27 26 1 26 26 25 1 1 1 1 1 Key takeaways 25 24 1 1 1 24 23 1 5 1 1 5 5 5 5 5 1 23 23 5 5 5 20 21 4 21 Ongoing replacement of coal-based
Slide 68: Legal disclaimer
Legal disclaimer This Presentation has been prepared by ORLEN ("ORLEN" or the "Company"). Reproduction, lt should be noted that forward-looking statements, including any statements concerning distribution and transmission of this Presentation in other jurisdictions may be restricted anticipated fina
Slide 69: Thank you
Thank you