Integrated Annual Report of LOTOS Capital Group 2016

2016: work on the LOTOS Group’s strategy

In 2016, Grupa LOTOS carried out extensive analyses to develop a strategic plan for 2017−2022. The Supervisory Board actively participated in the development of the new strategy: nine panel sessions with the Board were organised, devoted to defining strategic objectives. 

The strategy development began with identifying growth directions and analysing the LOTOS Group’s current assets. In this way we identified the directions and assets that offer prospects/opportunities for value creation in the next five years. 

Work on the 2017−2022 strategy was guided by the following objectives: 

  • Resumption of regular dividend payments 
  • Sustainable and effective development of complementary business segments 
  • Integrated margin optimisation
  • Poland’s energy security, supported by diversified sources of raw materials.

The strategy has been widely consulted throughout the LOTOS Group during numerous meetings with the management and employees of the LOTOS Group companies. The Controlling Team contributed strongly to the final document by building a financial model that enabled simulation of various macroeconomic scenarios, definition of strategic paths for strategic KPIs, and detailed allocation of objectives to the LOTOS Group’s individual business segments.

More information
Directors’ Report on the operations of Grupa LOTOS S.A. and the LOTOS Group in 2016

Chapter 2.3. Stability and sustainable growth − LOTOS Group Strategy 2017−2022

Chapter 2.1. Summary of execution of the 2011–2015 strategy

We are lengthening the value chain

For the LOTOS Group, 2016 was a time of hard work not only on the new strategy, but also on the development of products and services which would build the Company’s competitive edge in the long term. The expertise gained during product development supported the ongoing work on the LOTOS Group’s strategy for the next five years. As a result, the following new projects were carried out at the LOTOS Group companies in 2016: 

  • The LOTOS Group expanded the pool of global customers. LOTOS-Air BP started deliveries of aviation fuel to Emirates Airline and Air China. 
  • LOTOS Paliwa introduced non-fuel services and products at its service stations, together with a dedicated sales model. Those initiatives translated into a record high performance in 2016 in terms of retail fuel sales, with LOTOS Paliwa’s adjusted EBITDA for 2016 reaching PLN 156m. 
  • LOTOS Kolej opened its new, sixth Transport Division in Poznań, which is used to develop its services in Germany.
  • LOTOS Kolej started to transport grains and fodder after it had been certified for compliance with the GMP+ B4 standard. The company operates its own new rail cars.
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