Orlen Sa

Good morning, everyone. Please welcome to the presentation of Q4 of 2025 Financial and Operating Results of Orlen Group. We are sitting here in Warsaw in Orlen headquarters together with Sławomir Jacek, Component CFO. Konrad Włodarczyk, IR team, Marcin Wiechota, IR team, Damian Wieczorek, head of controlling. My name is Jakub Frejlich, I'm heading investor relations. We're going to have a presentation that will be followed with the Q&A session. Without further ado, I will now hand over to Sławomir, please. The floor is yours.

Thank you, Kuba. Good morning, ladies and gentlemen. It's my pleasure as always to present you fourth quarter Oren financial results. And I will start by saying that it was absolutely a very good quarter for us and that the whole year 2025 was very good. So if you look into slide number two, where we present the main financial indicators, we delivered a beta-LIFO in the fourth quarter of 12.2, and altogether almost 42 billion polis lotus for the full 25 year. And I will just add one remark, if we assume the same macro conditions for the past years, as we were operating in 2025, definitely that was the record high year for Orlan. We delivered very robust cash flow from operations, 12.9 in the fourth quarter, all together 47.4 billion poris lotis. We continue our capex program, so 11.5 in the fourth quarter, all together 32.6 billion for the full year and what's very important our net debt position is very very strong namely is a negative meaning cash flow positive of one point i mean cash position of 1.4 billion polis rotis so now let's move to slide number three where we present operating parameters As you know, we operate in upstream and supply downstream energy consumer and products. So let's start with upstream and supply. The market environment was unfavorable for us, meaning crude oil price and gas price was lower in the fourth quarter as compared to last year. However, we continue production of crude oil and gas at the same level roughly, but we increased gas share of one percentage point. And what's very important, we increased our sale of gas of 44%. Basically, half of this increase is better volumes on Polish market due to the weather conditions. And the second half is seizing opportunities on German market by our trading branch in Germany. Basically, the spread was favorable, so we took this opportunity to increase the sale. If we move to downstream, downstream environment was favorable. As we know, refining margin and differential altogether almost doubled as compared to last year. Petchem a little bit better. It's, of course, too early to say that the market environment in Petchem is going to be better. However, this is a positive signal, I believe. Altogether, we have crude oil throughput of 96% utilization, so it's very good, 100% in our Polish refineries, and this led to increase in the wholesale, if you will, increase of 5% year-on-year. Slight decrease in petrochemical, but this is, as we all know, due to the situation in the pet chem environment. As regards energy, from the market environment perspective, energy prices increased. And what's very important, we increased electricity generation, heat generation and electricity distribution and gas distribution. As you can see, effectively 18%, 2%, 5% and 3%. So those are very good results from energy sector. As regards consumer and products, market environment from the consumption point of view was favorable for us. Basically consumption increased in gasoline, diesel, as well as electricity and gas. So as a result, retail gas saved by 4% and retail electricity saved by 8%. So now let's move to slide number 4, where we present a beta delivered by each segment. So this slide absolutely proves, and our results in the fourth quarter and the full year 25, prove that we build a very diverse, a diversified operating model that gives us resilience in this challenging macro environment. So starting from the fourth quarter, abstinence supply, 4.2 billion for Islotes. That's lower than last year. However, last year it was in much better macro environment with much higher gas prices and crude oil prices. So you may say that this year, this quarter, fourth quarter, this year is a kind of normalized EBITDA. In downstream, increased by 2.7 billion, so we achieved 3.7 billion in the fourth quarter. This is a result of more volumes, as I described earlier, and better refining margins. In energy, slight increase of 100 million. That was basically due to the higher distribution EBITDA and the production, higher production was offset by higher CO2 costs. So as a result 100 million increased. As regards consumer and products 1.2 billion delivered in the fourth quarter. This is a kind of normalized level because last year it was negative 200 million but that was due to worse market environment and at the same time there was one of, like, purchase price allocation that decreased the result last year. But what's very important, if we look into the full year, on the right-hand side, upstream and supply delivered 16.2, so 2.3 billion less than last year. As we described, lower crude oil and gas prices, downstream increased to 9.5, due to refining margins and volumes, and energy increased by 1.6 to 12.5, and consumer and products delivered 6 billion for its lot. So altogether, very diversified and really resilient business model. If we move to slide number five, When we present cash flow for 2025, that was absolutely great year for us, we delivered 47.4 operating cash flow. You may of course say that a few billion polis lot was a kind of extra money we generated due to the fact that crude oil prices and gas prices dropped. But now that it's 47.4 billion, and we spend this money for investment programs for 2.5. We paid, as we remember, six lotto per share dividend, which was 7 billion for his lotto. So altogether, we managed to decrease net debt by 8.5 billion. So as I said at the beginning, our net cash position is 1.4 billion dollars. at the end of 25. What's very important for us, we keep investment grade ratings, Moody's H3 stable outlook and Fitch Ratings BBB Plus stable outlook. If you look into slide number six, we not only generate very good cash flow, but of course we have very strong balance sheet and diversified sources of financing, so we are very positive as regards looking ahead because we know that we have quite significant investment program in place. However, our balance sheet is really strong. We present here diversified sources of financing. So basically we have credit and loans, but we have all different kind of bonds as well. Euro, green, Euro, US and corporate bonds. And so 25.1 billion gross debt at the end of 25. If we move to CapEx, Slide number seven. So here we present our realisation for 2025 as compared to plan 2025, and I will start with that. Maintenance was rationalised, I would say, so 400 million less. In upstream and supply we communicated early that we moved gas ships to 26, so that was roughly 1.2 billion, and we stopped some upstream projects in Norway and Poland, so as a result 2.9 billion less capex spent in upstream. In downstream, 400 million less. That's basically our investment in Lithuania, hydrocracker. That was, you may say, moved to 26 as well. In energy, we relocated capex from upstream and supply and downstream to energy partially, so that's why we spent more on solar projects of 0.6 billion and CCG CCGT plans in Gdansk and Grudion of 0.2 billion. If we look into our plan, but this is our basic plan, so of course subject to any rationalization and reallocation, so in the base case We plan to spend 36.3 billion Polish zlotys. Maintenance, similar level to 2025. And of course, safety of our production assets is our key priority. However, this is the area definitely we can focus on as regards rationalization. Upstream, very similar level like 2025. So 7.8 billion Polish zlotys. So exploration and production projects in Norway, Poland and Canada. We'll continue that. In downstream 8.9, so this is an increase of 2.3 billion poris lotis as compared to last year, I mean 25, so In this amount, 8.9, the highest amount, as you can imagine, is Nowa Chemia. This is roughly 6.1 billion polis lotis. This is our base case. And then we have a few projects in downstream business, like HBO in Gdansk, or hydrocracking in Modrzejka, this rapeseed oil pressing plant intention altogether this gives roughly 2 billion 2.1 billion so you may say that like five biggest six biggest projects contributes to this to this amount and then energy as you can see energy is the highest the highest capex in all four segments and this is due to the fact that as you know first of all we put a lot of emphasis on modernization and expanding our gas and electricity network in this regulatory business phd and energy operator and the total capex is 6.2 billion then we continue for CCCG projects, and this is roughly 2.5 billion. So altogether, and then if you add on top of this wind and solar, you will end up with the amount of 9.8 billion. As regards consumer and products, 900 million, you may say this is evenly spread across three priorities we have in place, meaning expansion and modernization of fuel station network, Extension of non-fuel retain network and building alternatives fuel network immobility. So, now let's move to the last slide of my short introduction. This is outlook for 26. Here we present a few priorities. This is not the complete list, of course, because we are a very large business, so we have a lot of projects and a lot of priorities. However, let me start by saying, and we group those priorities into three categories, meaning investment, operations and finance. As regards investment, of course, our key priority is to continue our growth projects, however, we will put a lot of emphasis on budget discipline and project management excellence. definitely we're not in the past years very good at that and impairments we are posting is a kind of evidence maybe i will say that this quarter we posted more than 3 billion impairments 2.2 is for new chemicals projects 0.3 is for upstream and 0.5 is for retail in austria so basically another quarter with impairments however We are aware of that and we need to focus on this budget discipline to deliver projects on time and within the budget. The second priority here is, of course, the biggest investment we have in place, which is new chemicals. I can just confirm that we are in the last phase of the updating integrated schedules and creating final budget budget and signing the agreement with general contractors. So once this is ready, we'll communicate to the market. I would not give you a precise date today, because this is subject to corporate approvals. However, I can just say that this is top priority. So it should be a question of weeks rather than months. So once we are ready, we will communicate the details. And what's very important here, we not only continue the CAPEX program, but step by step we're commissioning our assets, so 26 should be the year when we complete Baltic Power, the first offshore wind plant, we'll complete CCGT in Grudion and HBO in Płock, so step by step this huge CAPEX program we have will be concluded. If we move to operations, This is absolutely our priority as well, to strengthen our operational excellence, to create a resilient and agile business. We are a very large enterprise, so it's difficult to be agile, but we try to be as agile as possible. Market environment is very challenging, it's very dynamic, so we need to be ready as a company to have, first of all, resilience. And this integrated business model proves that we are resilient. and then we need to be agile so that we can navigate in this macro environment in the best possible way the second point is here secured and diversified sources of hydrocarbon supply meaning crude oil and gas 26 is going to be the first year without hydrocarbons from Russia, so really this is our focus. However, I can confirm that we are prepared, secured, we proved this in the past quarters, so we have diversified sources of financing, we have term contracts, spot contracts, so we are absolutely on the safe side here. And then focus on maximum asset utilization, 25, it was a great year for us, 96% utilization in refinery, and webcam assets however this year we plan to have these quite big shutdowns maintenance shutdowns in czechia and in poland so you may expect that utilization rate will slightly drop however we are doing everything so that we take much out of our assets Now let's move to finance. Of course, our financing position is very strong. However, we are not just sitting, we are revolving our credit facilities. So one of that is 2 billion euro. We are in the process of finalization and we are arranging 2.5 billion euro using export credit agencies facility for new chemicals projects. And what's very important, this is the last point from my side, we are absolutely aware that our impact on macro environment is very limited. So we need to navigate in that environment. So our focus again is on market risk management. very dynamic from the commodity and from the financial standpoint, meaning crude oil, gas prices, products, effects, interest rates, CO2. So all those factors will be taken into consideration and will react accordingly to the situation. So that's all from my side and we are ready to answer your questions. Thank you.

Yes, thank you very much for this quick presentation, as you probably have noticed. We went through one of the best quarters in organ history within minutes for the sake of saving the time for you to ask questions. As usually, please, the floor is yours for the questions. I will refer and name you. according to the order you raise your hands. So, the first for the questions is Łukasz Prokopik from Bosch. Please, Łukasz, the floor is yours.