Orlen (PKN) Strategy Update (Q&A) summary

Strategic priorities and transformation

• Four strategic pillars: Upstream and Supply, Downstream, Energy, and Consumers and Products, focusing on flexibility and pragmatism in the energy transition.

• Gas remains a key transition fuel, with plans to deliver 27 bcm to the regional market by 2035 and significant investments in renewables, SMR, and BESS technology.

• Emphasis on decarbonization, aiming for -13% emissions by 2030 and -25% by 2035 in Upstream and Downstream, and a net carbon intensity reduction of -10% by 2030 and -15% by 2035.

• Corporate governance, asset optimization, and capital structure are highlighted as foundational for future growth.

• Responds to evolving consumer preferences, including demand for sustainable energy, electrification of transport, and digital solutions.

Strategic vision and market opportunity

• Positioned as a leader in Central and Eastern Europe's energy transition, leveraging a highly educated workforce and strong EU integration.

• Provides energy security through significant natural gas production, major refining operations, and a large retail network across seven countries.

• Anticipates continued demand for conventional fuels during the transition, with gas as a bridge fuel and a growing focus on zero-emission energy sources.

Financial framework and capital allocation

• Targeting average annual EBITDA growth of 5.5%, from PLN 33 billion to PLN 53–58 billion by 2031/2035, with a shift in EBITDA contribution from Upstream to Energy.

• CapEx and M&A investment is front-loaded, peaking in the first five years, then declining to PLN 15–18 billion by the end of the strategy term.

• Maintenance and regulatory CapEx are considered committed, while growth CapEx and M&A are flexible and subject to market conditions.

• Leverage expected to peak at 1.4x net debt/EBITDA in 2027, with a commitment not to exceed 2.0x and a plan to deleverage to 0.5x by the end of the strategy.

• Plans average annual CAPEX of PLN 32–35 billion, prioritizing energy transition investments, with disciplined capital allocation and risk management.