Value chain and business model

By integrating all elements of the oil sector value chain, the ORLEN Group is able to match the operations of each element of the value chain to its other elements. This allows the Group to build and maintain a sustainable competitive advantage, especially in changing market conditions.

The key elements of the ORLEN Group’s value chain are:

ORLEN Group’s value chain


Links between individual business areas

Business model

Workforce

Downstream 11,288
Retail 955
Upstream 112

Workforce (no. of staff), including active and inactive staff, at the ORLEN Group companies as at December 31st 2014 (not including consolidation, excluding BOP i PPPT)

Workforce (no. of staff), including active and inactive staff, at the ORLEN Group companies as at December 31st 2014 (the figures do not account for consolidation and do not include BOP and PPPT). 

Revenue, expenses, financial results, increase in capital expenditure of the operating segments in 2014

 Downstream RetailUpstreamCorporate FunctionsEliminationsTotal
             
Revenue 85,941 36,104 298 311 (15,822) 106,832
Total operating expenses (85,971) (35,015) (271) (1,007) 15,822 (106,442)
Net other income/(expenses)1) (4,861) (4) (319) 26   (5,158)
LIFO-based operating profit/(loss) before amortisation/depreciation
(LIFO-based EBITDA) and impairment losses
4,210 1,416 152 (565) - 5,213
LIFO-based operating profit/(loss) before impairment losses 2,802 1,061 30 (671) - 3,222
Net finance income/(costs)           (1,535)
Net (loss)           (5,828)
Capital expenditure 2,714 345 499 230 - 3,788

1) Including impairment losses on non-current assets of PLN (-)5,360m, recognised in 2014, related mainly to the ORLEN Lietuva Group: PLN (-)4,181m, Unipetrol Group: PLN (-)752m, Anwil Group (Spolana): PLN (-)64m, and Rafineria Jedlicze Group: PLN (-)42m. For details of impairment losses, see Notes 6.2.2, 12.2, 14.1, 14.3 and 18 to the consolidated financial statements.

SOURCES OF COMPETITIVE ADVANTAGE OF THE ORLEN GROUP:

  • Strong position on large and promising growth markets
  • Strong and recognisable brand
  • Strong customer-oriented approach
  • Integrated value chain
  • Operational excellence
  • Sustainable growth of hydrocarbon production
  • Modern management culture