Shares and shareholding structure

In 2021, the blue-chip WIG20 index increased by 14.26% (y/y) while the all-cap WIG index was up 21.52% (y/y). The price of PKN ORLEN shares rose by 28.79% in that period. The absolute annual rate of return on PKN ORLEN shares (i.e., with dividend reinvested in the stock) was 35.19% in PLN. In 2021, 278,362,144 PKN ORLEN shares were traded on the main market, a decrease of 27% on 2020.

PKN ORLEN shareholding structure*

* PKN ORLEN shareholding structure as at the date of authorisation of this Report.

• The share capital of PKN ORLEN is divided into 427,709,061 ordinary bearer shares with a par value of PLN 1.25 per share. PKN ORLEN shares are freely transferable.
• The PKN ORLEN Management Board has no knowledge of any agreements which would results in future changes of holdings of Company shares.
• In 2021, the ORLEN Group did not operate any employee stock option scheme.
• In 2021, PKN ORLEN did not buy back its own shares.
• As at December 31st 2021, members of the PKN ORLEN Management Board did not hold any Company shares.
• As at December 31st 2021, no PKN ORLEN shares were held by any member of the Parent’s Supervisory Board.

In 2021 and until the date of authorization of the „Management Board Report on the Activities of the ORLEN Group and PKN ORLEN S.A. for 2021 „, there were no changes in the structure of shareholders holding over 5% of the share capital of PKN ORLEN. The number of shares held by shareholders is presented on the basis of the most up-to-date, official information held by the Company.

The Company’s Articles of Association do not impose any restrictions on the transferability of PKN ORLEN shares. However, such restrictions may be stipulated by generally applicable laws including, without limitation, the Act on State Property Management and the Act on Control of Certain Investments.

Key data regarding PKN ORLEN’s shares

As part of the ORLEN Group Strategy for 2021–2030 introduced in November 2020, PKN ORLEN also adopted a dividend policy which assumes annual dividend payments of at least PLN 3.50 per share starting from 2021. The Group’s dividend policy takes into account its liquidity situation as well as the ability to deliver strategic financial objectives. The recommendation as to distribution of PKN ORLEN’s profit for 2020 is presented in Section 14.9.5. of Consolidated Financial Statement for 2021.

Detailed rules for the exercise of special control powers and voting rights are laid down in PKN ORLEN’s Articles of Association. According to the provisions of the Articles of Association, one PKN ORLEN share confers one voting right at the Company’s General Meeting. The voting rights of shareholders have been capped in the Articles of Association so that none of them may exercise more than 10% of total voting rights existing at the Company as at the date when the General Meeting is held. The cap on voting rights does not apply to the State Treasury and the depositary bank which has issued, on the basis of an agreement with the Company, depositary receipts in respect of Company shares (if this entity exercises voting rights conferred by Company shares).

Shareholders whose voting rights are aggregated or reduced are jointly referred to as a “Shareholder Grouping”. Detailed rules of such aggregation and reduction are specified in the Articles of Association. Shareholders forming a Shareholder Grouping may not exercise more than 10% of total voting rights existing at the Company as at the date when the General Meeting is held.

If the aggregated number of shares registered at the General Meeting by shareholders forming a Shareholder Grouping exceeds 10% of total voting rights at the Company, the voting rights resulting from the number of shares held are subject to reduction, the rules of which have been specified in detail in the Articles of Association.

The cap on voting rights described above does not apply to subsidiaries of the State Treasury.

The State Treasury, represented by the entity authorised to exercise the rights attached to the shares held by the State Treasury, has the right to appoint and remove one member of the Supervisory Board. In addition, one member of the PKN ORLEN Management Board is appointed by the entity authorised to exercise the rights attached to the shares held by the State Treasury as long as the State Treasury holds at least one share in the Company; such member of the PKN ORLEN Management Board is removed by the Supervisory Board.

Additionally, in accordance with the Articles of Association, as long as the State Treasury is entitled to appoint a member of the Supervisory Board, a resolution granting consent for transactions involving any sale or encumbrance of shares in the following companies: Naftoport Sp. z o.o., Inowrocławskie Kopalnie Soli S.A. as well as the company to be established to operate the pipeline transport of liquid fuels, will require a vote in favour of its adoption by the Supervisory Board member appointed by the State Treasury.

In 2021, PKN ORLEN’s investment grade ratings granted by two leading rating agencies Fitch Ratings and Moody’s Deuchland GmbH were maintained at the level of BBB- with a stable outlook and Baa2 with a positive outlook, respectively. In May 2021, Fitch Ratings placed PKN ORLEN on positive rating watch in view of the planned acquisitions of the LOTOS Group and PGNiG. According to this agency, PKN ORLEN’s acquisition processes, which help to consolidate Poland’s energy sector, will contribute to diversifying the Group’s business and improving stability of its cash flows. The agency also stresses that PKN ORLEN intends to finance the transactions primarily with its own shares issued through capital increase, while keeping debt to adjusted EBITDA at a conservative level not exceeding 2.0x-2.5x.

For a description of the ratings assigned to the bonds and notes issued by the ORLEN Group, see Section 5.3.3. of Management Board Report on the Operations of ORLEN Group and PKN ORLEN S.A. for the year 2021.