Operating segments

The system of organization and management of the Group is established on the basis of separated operating segments. The division into operating segments is made on the basis of factors taking into account, inter alia, type of products and services offered, characteristics of the production process, type of customers and other economic similarities. The Group does not combine operating segments for reporting purposes, and therefore each operating segment is presented separately.

Assessments of the operating segments’ financial results and decisions on allocation of resources are performed mainly on the basis of EBITDA. EBITDA is one of a measure of the efficiency of the activity, which is not defined in the IFRS. The ORLEN Group defines EBITDA as net profit/(loss) for the reporting period before taking into account the impact of the income tax, effects of financing activities and depreciation and amortization costs.

Revenues from transactions with external customers and transactions with other segments are carried out on an arm’s length basis.

In 2022, the Group presented the entire value of the provisional gain on a bargain purchase resulting from the merger with LOTOS Group and PGNiG Group within the Corporate Functions segment, as this is a one-off event that does not affect the Group's decisions on how to allocate resources and the assessment of the performance of individual operating segments.

In connection with the merger with PGNiG, the Group has identified a new Gas segment, which includes mainly the sale of imported natural gas, extracted from deposits and purchased on gas exchanges, as well as the distribution of natural gas through the distribution network to individual, industrial and wholesale customers, as well as the operation, renovation and development of distribution network.