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Financial information
The past year ushered in a series of challenges for the companies in the fuel sector. The decisions made by us have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Segment performance
The segmental management model we have implemented enhances management efficiency, delivering cost and revenue synergies across the organization.
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Letter from the Vice-President of the Board
2014 ushered in a series of challenges for the companies in the fuel sector. The decisions made by the LOTOS Group have demonstrated that we are able to take rapid steps to adapt to a demanding environment and ensure the desired profitability for our projects.
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Business environment
The key factor that had a strong impact on both the global and Polish petroleum markets in 2014, with significant consequences for the LOTOS Group’s performance, was the price of crude oil, which also determined the price of petroleum products.
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Strategic objectives
The LOTOS Group’s Strategy is designed to strengthen our position as a strong, innovative and efficient business which plays a major role in ensuring national energy security.
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Business model
Our operations consist in crude oil production and processing, as well as wholesale and retail sale of petroleum products, among which are: fuels (unleaded gasoline, diesel oil and light fuel oil), heavy fuel oil, bitumens, aviation fuel, naphtha, propane-butane LPG and base oils.
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Risk and opportunities
At the LOTOS Group, we identify a range of diverse risks, which may affect all areas of our business. The key risks in terms of their impact on our operations are the financial risks as well as risks affecting the exploration and production area. In the analysis of the risks, we also factor in issues related to sustainable development.
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Key data 2014
With revenue of ca. PLN 28.5bn in 2014, we rank fourth in the group of 500 largest businesses in Poland.
Brand
STATEMENT
A strong brand is a valuable corporate asset, playing an important part as a source of competitive advantage and value growth. Higher shareholder value is delivered by companies with strong brands, which are associated with good offering for customers, fair treatment of employees and positive CSR performance.
Anna Goliszewska
Brand Management Office Director, Grupa LOTOS, CSR Strategy Leader in the Market Partnership to Raise LOTOS Brand Awareness area
Appropriate management of customer relationships, good relations with stakeholders and community outreach initiatives may yield measurable benefits to a company by strengthening its reputation and image.
Fostering the image and strength of the LOTOS brand is one of the priorities for Grupa LOTOS. Our ambition is to create a brand that is dynamic and competent, friendly and trustworthy, and associated not only with offering top quality goods and services, but also with striving to meet the expectations of its stakeholders so they can pursue their own goals and dreams. The LOTOS brand has been consistently supporting promotion of product brands by establishing lasting relations with customers and linking the respective brand messages with areas of our core expertise as an oil company.
We support every area of the LOTOS Group’s activities, be they of strategic importance, such as the ‘2013−2015 Effective and Rising’ Programme, or non-strategic outreach and sports projects. Seeking to associate the LOTOS brand with positive emotions, we sponsor the National Ski Jumping Development Programme for the youngest ski-jumping hopefuls, entitled ‘In Search of the Champion’s Successors’. We are proud to say that last year its beneficiaries proved their worth by competing successfully during the winter Olympics. Another ambitious and exciting initiative spearheaded by the LOTOS brand is the newly launched cooperation with the Polish Football Association and the support for the Polish national football team, whose attitude and successful performance unite all Poles.
The 2014 image campaign ‘LOTOSTORY − The world of the LOTOS brand’ shows the brand’s close relationship with people and their needs. Our story combined the spectacular scale of the Company’s operations with sincere human feelings, because we want our customers to see that the LOTOS brand is more than the refinery, service stations and drilling rigs − it is also an innovative, helpful and friendly business supporting people in their everyday travels.
All of these image-building initiatives are reflected in the brand’s value. In the 11th edition of Poland’s Most Valuable Brands ranking, published by the Rzeczpospolita daily, the LOTOS brand was valued at PLN 1.245bn. Since 2014, its value has increased by over one billion złoty, driven by our consistent efforts to maximise the brand’s strength, and our innovative approach to image building. LOTOS entrenched its position among Poland’s top ten most valuable brands.
In monitoring the brand’s standing and the progress of our CSR strategy, we also measure the social capital index which indicates whether the LOTOS Group is considered an environmentally-minded business, supporting culture and engaging in community outreach projects.
Our policy of enhancing brand value and image was fully acknowledged in 2014, when Grupa LOTOS received two Superbrand titles for the strongest and most recognisable brands in Poland − the Business Superbrand award for the best business brand, and the ‘2013/2014 Created in Poland’ award, given to Polish brands that have developed an outstanding public image enabling them to compete against foreign brands.
