Financial capital

Financial capital represents the available financial resources held currently by the ORLEN Group, obtained from internal or external sources and generated through our business. It plays a crucial role in funding our day-to-day operations and the pursuit of our ambitious strategic objectives.

The financial capital of the ORLEN Group includes equity and debt capital, mainly in the form of borrowings.

ORLEN Group’s equity (PLN billion)

ORLEN Group’s debt capital (PLN billion)

• The ORLEN Group will spend PLN 120bn on green projects in the area of renewable energy generation, expansion of biogas, biomethane, biofuel and biomaterial capacities, electric mobility, development of recycling and hydrogen production and distribution. By 2030, we intend to reduce CO₂ emissions by 25% (absolute emission volumes in Refining, Petrochemicals and Upstream), CO₂/MWh emissions in the Energy segment by 40%, and net carbon intensity (NCI – emissions intensity of energy products sold, measured as gCO₂e/MJ for all emission scopes) by 15%. We plan to achieve our long-term objective of becoming net zero by 2050.
• In response to trends and challenges facing the energy sector, we intend to become a leader of the energy transition in Central Europe. In 2030, the ORLEN Group will be: a leading player in Europe with a presence along the value chain and cumulative EBITDA in excess of PLN 400bn in 2023–2030; a leader of the energy transition in the region, with more than 9 GW of installed renewable energy capacity; a provider of integrated services for customers that meets their fuel, energy and convenience shopping needs, relying on existing and new channels and on digital technologies; a responsible corporate citizen investing in sustainable development, energy transition, decarbonisation, recycling and community initiatives; a stable source of value creation stemming from a responsible financial policy and a focus on maximising returns on investments combined with efforts to maintain a stable balance sheet.
• Our value is built by profitable investment projects, sustainable funding sources, and a robust balance sheet. 
• Having capped our net debt/EBITDA ratio at 2.5x, we will align the Group’s CAPEX plans with its current financing capabilities.
• We will rely on a balanced mix of funding sources with current cash flows supported by an additional debt capacity. We also use alternative funding sources, such as project finance, EU funding for innovation and energy transition projects, and engaging with external partners who co-fund selected projects.
• Initiatives aligned directly with the Group’s carbon neutrality goal are partly financed with green and sustainable bonds issued on the European capital market.
• We are taking active steps to strengthen the ORLEN Group’s long-term competitive edge both in Poland and abroad.
• We consider R&D&I a key area, and over the next decade we will spend approximately PLN 3bn in total on research, development and digital transformation. Another essential element will be the digital transformation, driving efficiency gains in production and distribution, helping mitigate the environmental footprint and strengthening customer relations. We will put in place a new management model, tailored to the scale of the Group’s operations and taking into account the ongoing acquisition processes. We will be an organisation relying on knowledge and versatile competences, investing in talent and human capital.
   

In view of ORLEN’s successful merger with Grupa LOTOS and PGNiG completed in 2022 and stable financial position, the Company was assigned the highest ratings ever. Moody’s Investors Service upgraded ORLEN’s rating to A3, while Fitch Ratings raised ORLEN’s Long-Term Issuer Default Rating (IDR) by two notches, to BBB+. 

Cumulative EBITDA in 2023–2030 after implementation of the strategy by business area (PLN billion)

Net debt / financial leverage (PLN billion/%)

In 2022, the ORLEN Group’s operating segments delivered PLN 53.2bn in EBITDA + inventory valuation." data-popup>LIFO-based EBITDA¹ before net effect of the reversal of impairment losses on assets.

¹ Earnings before depreciation and amortisation net of the effect of crude price movements on the value of inventories.

LIFO-based EBITDA by operating segment (PLN billion)

Taking into account the net effect of the reversal of impairment losses of PLN (6.3)bn (mainly related to refining assets of ORLEN, the ORLEN Unipetrol Group and the ORLEN Lietuva Group, as well as production assets of Grupa LOTOS Upstream and the ORLEN Upstream Group), the ORLEN Group's EBITDA + inventory valuation." data-popup>LIFO-based EBITDA in 2022 was PLN 46.9bn.

The effect of oil price movements on the value of inventories, reflected in EBITDA, was PLN 1.1bn. As a result, the ORLEN Group’s EBITDA for 2022 came in at PLN 48.0bn.

Effect of impairment losses and inventory write-downs on EBITDA (PLN billion)

Net cash from operating activities in 2022 was PLN 31.0bn and included mainly operating profit before depreciation and amortisation (EBITDA) of PLN 48.0bn adjusted for: a PLN (11.3)bn negative effect of an increase in net working capital (mostly as a result of higher prices of crude oil and petroleum products which drove up the value of inventories, payables and receivables), less income tax paid of PLN (5.1)bn; gain on investing activities of PLN (7.4)bn, mainly on recognition of a gain on bargain purchase of Grupa LOTOS and the PGNiG Group of PLN (14.2)bn, and recognition of net impairment losses on property, plant and equipment, intangible assets, goodwill and other assets of PLN 6.3bn, mainly in the second and fourth quarter of 2022; a PLN 9.5bn change in provisions, mainly as a result of recognition of a provision for CO₂ emissions; other adjustments of PLN (2.4)bn related mainly to margin deposits for commodity risk hedging transactions with financial institutions and commodity exchanges of PLN 3.5bn, and settlement of grants for property rights of PLN (2.9)bn; share in net profit/(loss) of equity-accounted entities of PLN (0.3)bn.

Net cash from investing activities totalled PLN 1.5bn in 2022, with key contributing items including net cash flows from the purchase and sale of property, plant and equipment, intangible assets, and right-of-use assets of PLN (20.1)bn, consolidation of cash and cash equivalents at the acquired companies of the LOTOS Group and the PGNiG Group of PLN 17.1bn, and proceeds from the sale of shares related to the Remedies implementation and the sale of 30% of shares in Rafineria Gdańska of PLN 4.6bn.

In accordance with the updated Strategy to 2030, published in February 2023, the Group has greater capacity for investment and sharing profits with the shareholders. The new dividend policy provides for annual dividend distributions at 40% of adjusted free cash flow, but no less than the guaranteed dividend of PLN 4.00 per share for 2022, to be increased progressively each year by PLN 0.15 to PLN 5.20 in 2030. This means an increase in the base (guaranteed) dividend of 49% over the decade.

Dividend distribution (PLN billion)

The updated ORLEN Group's Strategy 2030 was published after the completion of mergers with the Energa Group, Grupa LOTOS and PGNiG, a process that created a European multi-utility group with diversified revenue streams and sufficient resources to lead the energy transition in the region. The updated strategy assumes maximising value in the segments and business areas in which ORLEN already enjoys a strong strategic position, major capital expenditure projects in new growth areas (such as renewable energy), and investing in the future by exploring new promising areas. The current strategy sets more ambitious green targets for decarbonisation and installed renewable energy capacity, which align with our ambitions as the region's energy transition leader, reflect global trends, and put the ORLEN Group on a path to achieve carbon neutrality by 2050. 

Under the new strategy, the ORLEN Group’s growth is based on key pillars of business segment management. 

For more information on financial capital, see  „Financial results”