Retail

2019
RETAIL STATIONS		units	ORLEN Group	Poland	Germany	Czech Republic	Slovakia	Lithuania
	Total sales	thousand t	9,817	5,883	2,961	895	Nd	78
	Market share	%	16.4	34.1	6.6	24.6	nd	4.7
	Number of stations, including:	number	2,836	1,800	585	416	10	25
	Premium	number	1,930	1,737	–	160	10	23
	Economical	number	851	38	568	245	–	–
	Other	number	55	25	17	11	–	2
	CODO/COCO1	number	2,294	1,361	497	401	10	25
	DOFO/DODO1	number	542	439	88	15	–	–
CATERING OUTLETS		units	ORLEN Group	Poland	Germany	Czech Republic	Slovakia	Lithuania
	Total, including:	number	2,421	1,699	385	306	8	23
	Stop Cafe	number	967	820	–	125	7	15
	Stop Cafe Bistro	number	342	321	–	21	–	–
	Stop Cafe 2.0.	number	727	558	–	160	1	8
	star connect	number	117	–	117	–	–	–
	star cafe	number	268	–	268	–	–	–

Current status for June 2020

The ORLEN Group is the undisputed leader in retail fuel sales in Central Europe. At the end of 2019, it operated a total of 2,836 service stations, including 10 sites in Slovakia, the Group’s new home market.

The number of stations and market share of the ORLEN Group on operating markets at the end of 2019

Source: Own preparation.

More information on the ORLEN Group shares on individual markets and competitors can be found in the „Competitive Environment” section.

In 2019, the volume of sales of the ORLEN Group’s Retail segment increased by 3.9% year on year, to 9,815 thousand tonnes, as a result of improved sales of all fuels across all operating markets (with the exception of LPG in Germany and Lithuania).

The ORLEN Group sales in the retail segment [PLN million/thousand tonnes]

Structure of sales revenue of the ORLEN Group in the retail segment

The ORLEN Group’s retail home markets include Poland (where the retail business is managed by PKN ORLEN), Germany (with a retail chain operated by ORLEN Deutschland), the Czech Republic and Slovakia (service stations under the Benzina brand, a member of the Unipetrol Group – a subsidiary of the ORLEN Group), and Lithuania (a service station chain managed by AB ORLEN Baltics Retail, a subsidiary).

Sales volume of the ORLEN Group in the retail segment on domestic markets [thousands tonnes]

In 2019, the volume of fuel sales in the Retail segment grew by 3.3% year on year. A technical upgrade of our stations, expansion of the retail chain to include new outlets with strong sales volume capabilities and a higher number of service stations in which our new store and food & drink service format was deployed translated into an improved average annual flow per CODO station, to 4.8 million litres.

Sales volume of the ORLEN Group in the retail segment on the Polish market [thousands tonnes]

Structure of sales volume of the ORLEN Group in the retail segment on the Polish market

As part of our efforts to expand the ORLEN retail chain in Poland, a number of sites were secured for the construction of new service stations in the coming years, including seven in Motorway Service Areas.

During 2019, more than 120 stations underwent technical upgrades. The rebranding of the Bliska chain to ORLEN is nearing completion. In 2019, the number of both CODO and DOFO Bliska stations was reduced from 54 to 38.

In 2019, PKN ORLEN’s fleet sales volume rose 2.4% year on year, reaching their highest level on record (of almost 2.4 billion litres). CRT sales (to transport companies) remained broadly unchanged from the previous year, while other segments recorded higher sales year on year.

Year 2019 also saw strong non-fuel sales, with combined store and food & drink service sales going up by 10% year on year. PKN ORLEN continued its product development projects for proprietary brands (VERVA, Stop.Cafe, „O!”), with eight new items added to the proprietary brand product mix. The ‘Loteria z Kubicą’ advertising campaign encouraged many customers to buy products sold under our proprietary brands (Verva, O! and Stop.Cafe), appreciating their quality and reasonable prices.

The Stop Cafe 2.0 food & drink service concept was rolled out at a further 186 locations, which brought the number of PKN ORLEN stations featuring this format to 558 (including 63 DOFO stations) at the end of 2019. In total, PKN ORLEN had 1,699 stations offering food services across all formats (Stop Cafe, Stop Cafe Bistro and Stop Cafe 2.0).

In 2019, the largest Retail Sales project was to change the existing distribution model, i.e. to replace distributors by a logistics operator and establish direct business relationships with suppliers of store and food & drink service products.

PKN ORLEN also took a range of measures to improve its customer service. Further stations made available the ‘Mobile Cashier’ service, enabling payments in the driveway when traffic is at its heaviest. Some service stations (including those at MSAs) rolled out the ‘Fast Lane’ service, which consists in directing fuel customers to selected pumps supported by ‘Mobile Cashier’. Most of the stations were covered by the filling queue system, whereby another filling can be made before the previous one is paid for, which reduces customer waiting times. More than 460 service stations offer the possibility of refuelling a car on both sides, regardless of the fuel tank flap location, thanks to appropriately designed infrastructure. The roll-out of ORLEN Mobile, an application dedicated to mobile payments to enable customers to pay at the pump, was continued. Currently, all service stations are prepared to support mobile payments.

By 2019, 39 charging stations had been launched at PKN ORLEN’s urban, motorway and trunk road service stations, with further ones undergoing commissioning procedures. They can charge up to two vehicles at a time through 50 kW or 100 kW DC points, and one vehicle with up to 43 kW through the AC point. This essentially means that our charging stations are equipped with connectors supporting all electric vehicles now available on the European market. By 2021, PKN ORLEN intends to have 150 fast EV chargers deployed within its service station chain.

In 2019 an IT system was implemented to support the management of PKN ORLEN’s charging station network, Ultimately, its full implementation will enable motorists to make payments through the mobile application.

In 2019, ORLEN continued its partnership with Nextbike Polska, whereby 36 PKN ORLEN service stations launched a bike rental service, with a total of 360 (both standard and electric) bicycles available.

In 2019, the ORLEN Group recorded a 4.3% year-on-year increase in its fuel sales volume on the German market. The average annual flow per station rose to 5.0 million litres.

Sales volume of the ORLEN Group in the retail segment on the German market [thousands tonnes]

Structure of sales volume of the ORLEN Group in the retail segment on the German market

The number of service stations managed by ORLEN Deutschland was 585 (568 in the Star economy segment and 16 Famila stations), having expanded by 3 locations year on year. Almost 85% of them were CODO stations, with the remaining outlets owned by private individuals (DODO). In 2019, the chain launched 4 CODO stations and took over 2 DODO outlets. One service station was removed from the Star chain following the contract expiry. The Star connect food & drink service was launched at another 45 locations, as a result of which at the end of 2019 the format was already available at 117 ORLEN Deutschland stations. Taking all formats into account (both Star connect and Star cafe), food & drink service was available at 385 stations within the chain.

In 2019, ORLEN Deutschland recorded a 1.5% improvement in its non-fuel margin. The range of Polish products offered at Star stations was also significantly broadened.

The Star network has the highest number of car washes among all retail chains managed by the ORLEN Group (including 412 portal facilities and 54 self-service facilities). In 2019, 34 portal and three self-service washes were upgraded. Work was also commenced to test solutions designed to improve customer service. At three stations, a mobile application was launched on a pilot basis to support mobile payments for car wash services.

An important step in expanding the retail network in southern Germany was the opening of the first Star station in Bavaria (Munich) in October. As a result, since 2019 the Star network has been present in all German states.

In 2019, ORLEN Deutschland continued its partnership with ADAC, one of Europe’s largest automotive clubs with more than a dozen million members in Germany. Star is one of the three German station chains (and the first one in the economy segment) working with ADAC.

The ORLEN Group’s fuel sales on the Czech market grew again, by 6.6% year on year, and its average annual sales per station reached 2.6 million litres.

Sales volume of the ORLEN Group in the retail segment on the Czech market [thousands tonnes]

Structure of sales volume of the ORLEN Group in the retail segment on the Czech market

Its retail stations on the Czech market operated under the Benzina brand, but there was also one ORLEN-branded station. During the year, seven new service stations were added to the chain.

As at the end of 2019, the number of Benzina-branded stations on the Slovak market was ten, all of them operated under the CODO model.

In 2019, the volume of fleet sales grew on the back of a steady increase in the number of stations, new schemes and relationship models for fleet customers, and development of a pre-paid fleet card scheme for private individuals. The share of fleet sales in the total sales volume topped 37%.

Benzina continued to invest in upgrading and expanding the service station chain in the Czech Republic. The Stop Cafe 2.0 format was rolled out into another 60 outlets, so at the end of 2019 it was already available at 160 stations within the Benzina chain. In total, 306 Benzina stations offered food & drink services across all formats (Stop Cafe, Stop Cafe Bistro and Stop Cafe 2.0). In addition, automatic car washes were upgraded at 27 locations.

Thanks to the extensive investment programme and a host of replacement projects, the Benzina chain delivered improved non-fuel performance, with store sales up 11% and food & drink service sales (up 27% year on year).

In 2019, ORLEN Baltics Retail posted a 2.6% year-on-year increase in fuel sales on the Lithuanian market, as the average annual flow per station rose to 3.9 million litres.

Sales volume of the ORLEN Group in the retail segment on the Lithuanian market [thousands tonnes]

Structure of sales volume of the ORLEN Group in the retail segment on the Lithuanian market

The number of stations did not change relative to the previous year, standing at 25 COCO locations at the end of 2019. In 2019, work to construct four new service stations and one ‘Demolish and Build’ project were commenced. At the same time, upgrade work was completed at eight retail sites. As at the end of 2019, 32% of the network was operated to the Stop Cafe 2.0 standard. Extension of the offering at the upgraded stations translated into a 15% year-on-year increase in non-fuel revenue.

An increase in Lithuanian fleet sales was the main driver of the recorded increase in diesel oil sales. During 2019, the share of fleet sales grew by 1.6 pp, to nearly 48% of total sales.

In 2019, the ORLEN Group’s refining assets were the main source of fuel supplies for the Polish, Czech and Lithuanian service station chains. The Group does not operate its own production plants in Germany. Unlike in the case of other local markets, ORLEN Deutschland works with suppliers operating on the German wholesale market, including Deutsche BP AG, Shell Deutschland Oil GmbH, Total Deutschland GmbH, and Esso Deutschland GmbH. A considerable volume of fuels sold by ORLEN Deutschland comes from the Litvínov refinery run by Unipetrol RPA s.r.o., part of the ORLEN Group. In 2019, the volume of supplies from the Czech Republic did not change year on year, meeting almost 20% of ORLEN Deutschland’s fuel demand.