Retail Strategy 2005 - 2009

The strategy primarily aims to reverse the current negative trend in fuel market share, to achieve a minimum 30 per cent share by 2009. Moreover, PKN ORLEN plans to increase its share of non-fuel products to total margin (by 10 percentage points up to around 30 per cent).

At present, PKN ORLEN serves customers in Poland’s largest retail network of 1,906 stations, which accounts for 25 per cent of the country’s outlets. PKN ORLEN’s share of domestic fuel sales in 2004 stood at 28.6 per cent, and since 2002 the Company’s market share has been narrowing – by 7 per cent in the last three years. The outlook for the Polish retail network indicates an annual sales increase of 4.3 per cent in coming years.

PKN ORLEN intends to focus more on its business customers, both large corporations as well as small and medium sized businesses. As a result, PKN ORLEN forecasts that by 2009, 20 per cent of fuel sales will originate through the Flota programme. In total by 2009 PKN ORLEN plans to sell around 4.9 bln liters of fuel per annum, with an average throughput per company owned station expected to exceed 2.5 million liters per annum.

These targets will be achieved through the segmentation of the network into two standards: Premium and Economy. The planned structure of the network will comprise of around 1,000 Premium stations (under the ORLEN brand) and around. 900 Economy stations. As part of this, approximately 50 Premium and 130 Economy stations will be renovated or built annually, with the additional acquisition of around 40 Premium stations and 70 Economy stations per year. PKN ORLEN also plans to increase its number of LPG facilities to 720 by 2009. Annual capital expenditure is planned to total on average PLN 390m during 2005-2009.