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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.
About us
This 2014 Integrated Annual Report provides an overview of the activities of the LOTOS Group (the “LOTOS Group”), with a particular focus on the LOTOS Group’s parent – Grupa LOTOS S.A. (“Grupa LOTOS”, the “Company” or “we”).
We are one of Europe’s major and most efficient oil companies and the second largest producer of fuels in Poland. We are the sole company producing hydrocarbons in the Polish Exclusive Economic Zone of the Baltic Sea, and have almost exclusive rights to carry out exploration and production work in the Baltic Sea. We also produce crude oil in the Norwegian Continental Shelf and have access to onshore oil deposits in Lithuania. Our refinery in Gdańsk is one of the newest and most advanced refineries in Europe in terms of applied technologies and environmental protection.
With revenue of ca. PLN 28.5bn in 2014, we rank fourth in the group of 500 largest businesses in Poland. 1
Grupa LOTOS shares have been listed on the Warsaw Stock Exchange since June 2005. Since November 2009, LOTOS shares have also been a constituent of the Warsaw Stock Exchange’s RESPECT Index of socially responsible companies.
The LOTOS Group employs more than 5,000 people in Poland and abroad.
1 500 largest companies listed by the Rzeczpospolita daily as at May 13th 2015.
LOTOS Group workforce structure by sex as at December 31st 2014
| Item | Men | Women | Total |
|---|---|---|---|
| blue-collar jobs | 2,537 | 168 | 2,705 |
| white-collar jobs | 1,409 | 992 | 2,401 |
| Total | 3,946 | 1,160 | 5,106 |
Apart from Grupa LOTOS (the parent and operator of the Gdańsk-based refinery with a nominal throughput capacity of 10.5m tonnes of crude oil per year), the LOTOS Group comprises 14 other companies operating under the LOTOS name. Two of them are based outside Poland, in Lithuania and Norway.
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. Our operations consist in crude oil production and processing, as well as wholesale and retail sale of petroleum products. We achieve our business objectives with due regard to corporate social responsibility and sustainable development, and contribute to the development of local communities in the areas where we are present and economic growth of the entire country. In 2014, the LOTOS Group paid taxes in the total amount of PLN 11,403,606,000.
The LOTOS Group’s main market is Poland, but our foreign sales are also steadily rising. In 2014, we ranked third among Poland’s largest exporters, with exports revenue of ca. PLN 9.5bn. 2
2 500 largest companies listed by the Rzeczpospolita daily as at May 13th 2015.
We export our products to 75 countries all over the world.
Poland’s third largest chain of service stations operates under the LOTOS brand. Through this chain, we offer products and services in the premium segment, which also comprises motorway service stations. One-third of our stations operate in the economy segment, under the LOTOS Optima brand. Expansion of the LOTOS chain and enhanced sales strengthened the LOTOS Group’s presence on the retail market, pushing its share up to 9% at the end of 2014 (vs. 8.5% in 2013).
