Strategy 2013-2017: supply security and profit-making
Since the release of the previous strategy in 2013 Unipetrol has become much stronger and bigger than then expected. It was planned until 2017 that, on average, it would earn CZK 5 bn of EBITDA LIFO and invest CZK 3.8 bn CAPEX per year. Actual results since 2013 exceeded the expectations. Unipetrol generated on average almost CZK 7bn of EBITDA and dedicated CZK 4.5 bn to CAPEX investments. First dividend payment since many years was realized. One of the largest industrial investments in Czech Republic ever was initiated. Full control over the production assets was achieved as acquisition of shares of Česká rafinerská from Eni and Shell was successfully completed. Change in control setup allowed for a major simplification of the capital group structure. There was increased a number of stations and market share measured by volume (achieved 17.6% in October 2016). Long term contracts with REBCO suppliers were signed and in addition there was Arab crude processed. Relations with Unipetrol’s most important strategic partners in the Czech Republic, companies MERO ČR and ČEPRO, are fully formalized and are set at market conditions.  Following the positive development of regulations Unipetrol now functions in an environment of only a minor grey zone in fuels trade.

Given the recent developments and possessed assets Unipetrol is very well positioned in the coming business reality. In Litvínov it operates one of the most integrated refinery and petrochemical complexes in Europe. Unipetrol’s retail stations network, Benzina, is the largest in the country. Unique feature of Unipetrol in comparison to regional peers is developed R&D capability – it has two research institutes and university center on site in Litvínov. Operations of Unipetrol are possible thanks to a team of high potential employees – approximately 4500 people of 14 nationalities. Relatively positive current and future macro environment at key markets of Unipetrol also supports its good perspectives.

Strategy 2017-2018: growth of profit and investments in production, innovations and employees
Given how much unpredictable the business environment is today the company shares specific numbers concerning results for the next two years horizon. Nevertheless, the strategic guidelines described in the documents are treated as binding for the mid-term perspective. At the same time Unipetrol intends to update communication about the plans for the subsequent periods more frequently so there would be maintained a good level of information for the markets.

Strategy is constructed around six strategic ambitions:
• Strengthen human capital;
• Streamline innovation;
• Build on strong petrochemical position;
• Build Retail of the future;
• Stay agile, continuously improve;
• Target new business streams.

 

The abovementioned ambitions shall constitute a framework within which Unipetrol will shape its business operations. In order to strengthen its human capital Unipetrol will be increasing its attractiveness as employer, enhancing total value proposition for employees, improving training and development opportunities and further cooperating with education sector. Streamlining innovation is meant to strengthen systematic approach to sourcing ideas from own R&D area, any other employees of Unipetrol and from external partners. Strong position in petrochemical will be used to catch the coming trends to the chemicals sector, described broadly as the Age of Application. Retail of the future will base on significantly improved offer and marketing tools that would translate into higher market share and operational efficiency of the network. Staying agile and continuous improvement is necessary in the times when changes are coming at a pace unprecedented in history – Unipetrol will be working on creating engaged leadership at all levels of organization combined with efficient centralized control that will operate within a strong and inclusive corporate culture. As Unipetrol is an organization with presence and interactions in many points of economy. It is uniquely positioned to spot and use new business opportunities with – it will be targeting new business streams that are related to current business however scope of areas where cooperation would be possible is meant to be very broad.
 
“In recent years we have confirmed that the way we started is the right one. We took steps which improved our market position quite significantly and prepared conditions to start further development. The period of 2017-2018 will be an age of Realization for Unipetrol. Completion of significant investments, improvement of position in retail as well as realization of internal synergies and continuous effort to ensure performance improvement of existing assets will set a good ground to consumption of profits and reinvestments in the following years,” said Andrzej Modrzejewski, the CEO and Chairman of Unipetrol Board of Directors.

Realization of the strategic ambitions will bring the company to achieving certain financial and operational targets. The next two years are expected to bring decent EBITDA LIFO amounts. It will be coupled with significant amounts of investments – including PE3 that is a major milestone for Unipetrol’s business development. Operational indicators at refinery will be performed at high levels allowing for its efficient usage. Retail segment will be further gaining market share. The operations of Unipetrol will be performed with the highest attention to safety issues, treating them as key to operational excellence. Following its good results Unipetrol will be targeting systematic increase of dividend-per-share ratio.

Main operational and strategic targets for 2017-2018 are as follows:
• Total combined EBITDA LIFO at the level of CZK 19.7 bn;
• Total combined CAPEX at the level of CZK 16.3 bn;
• Completion of construction of new polyethylene unit (PE3);
• Increase market share in retail – to 20.7% in 2018;
• Realization of the potential of refinery assets, with high utilization: 87% on average over 2017-2018;
• TRR  level at max. 0.9;
• Safe financial standing of the Unipetrol Capital Group and systematic increase of dividend-per-share ratio.

 

Unipetrol will be working in an environmentally responsible way. It will be ensuring compliance with new environmental regulations, reducing impact on environment and development of environmental awareness, continuing remediation works and increasing its energy efficiency.
Achievement of strategic targets will allow Unipetrol to remain active supporter to society. A new vehicle to facilitate such support will be operating – Unipetrol Foundation. The company will be engaging into support to education, charity, culture and sports.

 

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UNIPETROL, a.s., controls companies operating in the petrochemical industry in the Czech Republic. In 2005, Unipetrol became part of the PKN Orlen Group, the Central Europe’s largest crude oil processor. The Unipetrol Group is oriented mostly towards crude oil processing, fuel distribution and petrochemical production. In all of these business areas, the Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading companies in the Czech Republic in terms of revenues, and employs 4,500 people.

 

Contact:
Pavel Kaidl, spokesperson of the Unipetrol Group
Mobile phone: +420 736 502 520, E-mail: pavel.kaidl@unipetrol.cz