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ANNUAL
REPORT
of the Petrol
Group and
Petrol d.d.,
Ljubljana,
2022
Annual Report of the Petrol Group and Petrol d.d., Ljubljana, 2022
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Petrol, Slovenska energetska družba, d.d., Ljubljana
Dunajska cesta 50, 1000 Ljubljana
Registration number: 5025796000
Companies Register entry: District Court of Ljubljana, entry number: 1/05773/00
Share capital: EUR 52,240,977.04
VAT ID: SI80267432
Telephone: +386 (0)1 47 14 232
www.petrol.eu, https://www.petrol.si/
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TABLE OF CONTENTS
INTRODUCTION .................................................................................................................... 4
1. Business highlights of 2022 ............................................................................................5
2. Letter from the President of the Management Board ......................................................7
3. Statement of the Management’s Responsibility ............................................................ 11
4. Report of the Supervisory Board .................................................................................. 12
5. The Petrol Group in its region ....................................................................................... 16
BUSINESS REPORT ........................................................................................................... 18
6. Strategic Orientation .................................................................................................... 19
7. Plans for 2022 ............................................................................................................... 23
8. Corporate governance statement ................................................................................. 25
9. Non-financial statement ................................................................................................ 44
10. Performance analysis of the Petrol Group 2022 .......................................................... 66
11. Alternative performance measures ............................................................................. 87
12. Events after the end of the accounting period ............................................................. 88
13. Risk management ....................................................................................................... 90
14. Operations by product groups .................................................................................. 101
15. Investments .............................................................................................................. 124
16. Share and ownership structure ................................................................................. 127
17. Internal Audit ............................................................................................................. 134
18. Information technology .............................................................................................. 136
SUSTAINABLE DEVELOPMENT ...................................................................................... 139
19. Strategic orientations and goals for the sustainable development of the Petrol Group
....................................................................................................................................... 140
20. Responsibility towards employees ............................................................................ 143
21. Responsibility towards customers ............................................................................. 151
22. Responsibility to the natural environment .................................................................. 159
23. Quality control ........................................................................................................... 163
24. Social responsibility .................................................................................................. 165
THE PETROL GROUP ....................................................................................................... 168
25. Companies in the Petrol Group ................................................................................. 169
26. The parent company ................................................................................................ 170
27. Subsidiaries ............................................................................................................. 172
28. Jointly Controlled Entities .......................................................................................... 181
29. Associates ................................................................................................................ 181
FINANCIAL REPORT ........................................................................................................ 182
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INTRODUCTION
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1. Business highlights of 2022
The Petrol Group Unit 2022 2021
Index
2022/2021
Sales revenue EUR million 9,456.7 4,960.1 191
Adjusted gross profit
1
EUR million 393.4 543.4 72
Operating profit EUR million -7.9 151.1 -
Net profit EUR million -2.7 124.5 -
Equity EUR million 860.2 908.7 95
Total assets EUR million 2,740.6 2,403.8 114
EBITDA
1, 2
EUR million 96.3 238.1 40
EBITDA/Adjusted gross profit
1, 2
% 24.5 43.8 56
Operating costs/Adjusted gross profit
1
% 118.9 79.7 149
Net debt/Equity
1
0.60 0.56 108
Net debt/EBITDA
1, 2
5.4 2.1 252
Return on equity (ROE)
1
% -0.3 14.3 -
Return on capital employed (ROCE)
1
% -0.5 10.8 -
Added value per employee
1, 2
EUR thousand 41.3 70.3 59
Earnings per share attributable to owners of the controlling company
3
EUR 0.1 2.9 -
Share price as at last trading day of the year
3
EUR 20.0 25.4 79
Volume of fuels and petroleum products sold thousand tons 4,095.2 3,284.9 125
Volume of natural gas sold TWh 18.9 35.4 54
Volume of electricity sold TWh 12.0 13.8 87
Revenue from the sales of merchandise and services EUR million 520.1 469.5 111
3
2021 - recalculated by taking into account the share split.
1
Alternative performance measure (APM) as defined in chapter Alternative Performance Measures.
2
EBITDA = Operating profit + Net Allowances for operating receivables + Depreciation and amortisation charge.
The Petrol Group Unit
31 December
2022
31 December
2021
Index
2022/2021
Number of employees 6,224 6,237 100
Number of service stations 594 593 100
Number of e-charging points operated by the Petrol Group 417 296 141
Number of electricity customers thousand 225.7 224.6 101
Number of natural gas customers (data for Geoplin d.o.o., Ljubljana are not included) thousand 60.4 47.4 128
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EBITDA Net profit or loss
Net debt/EBITDA Structure of invested assets
Volume of fuels and petroleum products sold Number of service stations
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2. Letter from the President of the Management Board
Dear shareholders, business partners and co-workers,
2022 was a special year in many respects. It was marked by extraordinary events in the
geopolitical and economic environment, which could not have been foreseen and that left a
strong mark on the European and Slovenian economies. The regulation of energy product
prices to mitigate the effects of the energy crisis had a negative impact on the Petrol Group’s
business performance. It deviates from the ambitious Petrol Group Business Plan 2022, as the
business situation was significantly different from the assumptions made at the time of the
annual planning.
Concentration of emergencies: energy crisis, energy transition and the price regulation
of energy products
2022 has been a very challenging year for the economy. The heightened geopolitical situation
due to the war in Ukraine, the energy crisis and rising inflation have created numerous and
complex challenges. EU Member States have sought to reduce the burden of the extremely
high energy product price increases on their populations and economies by regulating energy
product prices, and have sought ways to replace Russian energy supplies, including by placing
greater emphasis on the provision and use of renewable energy sources.
A well-established risk management system, enhanced cooperation with the Supervisory
Board and a swift but measured response to extremely challenging business conditions have
helped the Petrol Group mitigate the impact of negative developments in the business
environment as much as possible. In the Petrol Group, 2022 will be remembered not only for
the challenges posed by the crisis, but also for the successes that have strengthened us in
these difficult circumstances.
The effective integration of Petrol Group companies
With the acquisition of Crodux derivati dva d.o.o. in 2021, Petrol has become the second
largest supplier of petroleum products in Croatia with 202 points of sale. The legal merger of
Petrol d.o.o. with the Croatian company Petrol d.o.o., one of the largest business acquisitions
in the Petrol Group’s history, was completed at the beginning of November 2022, two months
ahead of schedule. With more than 2,100 employees, Petrol d.o.o. is one of the largest
Croatian companies and strengthens Petrol’s position as a comprehensive energy solutions
provider in Croatia.
In 2021, the acquisition of E 3, d.o.o. strengthened our market share and expertise in the
electricity market. In 2022, we enhanced the merger by integrating the entire business of E 3,
d.o.o. into Petrol’s information system.
We paid particular attention to the management of Geoplin d.o.o. Ljubljana, and the measures
taken to stabilise the business and mitigate the operational damage resulting from the non-
delivery of natural gas under the long-term agreement with Russia’s Gazprom. Geoplin d.o.o.
Ljubljana has signed a medium-term agreement with Sonatrach for the supply of natural gas
from Algeria to Slovenia in November 2022. This agreement is an important step towards
ensuring the further diversification of natural gas supply sources, thus further increasing the
security of supply for Geoplin d.o.o. Ljubljana’s customers.
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In 2022, we successfully completed the implementation of the SAP ERP system in all the key
companies of the Petrol Group. By further introducing process organisation and functional
management throughout the Petrol Group, we have strengthened synergies and pursued a
more uniform approach in the markets of our subsidiaries.
Steadfastly moving towards a zero-carbon future
We remain committed to the green transition, following our strategic vision to become an
integrated partner in the energy transition with an excellent customer experience.
In February 2022, Petrol’s Supervisory Board approved an investment in solar power plants in
Knin, Croatia. It consists of three large solar power plants with a total installed capacity of 22
MW and an expected electricity production of 29 GWh, which will be operational by summer
2023. In the Kraljevo region of Serbia, the Grajići small hydropower plant completed its test
run and went into commercial operation at the beginning of the year. The plant has a capacity
of 1.0 MW and is expected to produce around 3.2 GWh per year, enough to supply 1,000
households in Serbia. In May, together with Cinkarna Celje, we commissioned Slovenia’s
largest solar power plant, which consists of 2,222 solar modules with a total rated output of 1
MW. It is expected to produce 1,160 MWh of electricity per year, enough to supply around 330
average households. In Serbia, we and our partners successfully completed a project to
renovate public lighting in the municipality of Kikinda in July 2022. This is the sixth project of
its kind in Serbia and the 30
th
in Petrol’s portfolio of energy-efficient public lighting projects in
the region. In 2022, the first phase of the Petrol Green project - the installation of solar power
plants on the roofs of our points of sale and facilities - was launched. The aim is to gradually
equip the entire Petrol network in Slovenia with solar power plants.
We launched a project to digitise the Oil & Gas supply chain for service stations, heating oil
and gas deliveries and cylinder sales, which will be completed in spring 2024. It will automate,
integrate and digitise logistics processes. The project will also have an important sustainability
aspect - up to 10 percent fewer emissions per year.
At the point of sale, we also continued to build a quality and sustainable relationship with our
customers. Q Max fuel was named Product of the Year for the third time in February 2022,
and for the first time, the “Na Poti” app was also awarded this title. In June, we became
one of the first energy companies in Europe to receive the European Quality Certification
EQTM from the European Organisation for Quality (EOQ) for the Q Max family of fuels.
Record sales under energy product price regulation fell short of targets
High energy prices and rising inflation have led to the government regulation of fuel, electricity
and natural gas prices in all markets where the Group operates (in Slovenia alone, no less
than 37 regulations were adopted for this purpose in 2022), which has had a significant impact
on the Group’s business and thus on the achievement of the Petrol Group’s business plan for
2022. The performance of Geoplin d.o.o. Ljubljana, which was exposed to the non-delivery of
Russian natural gas and the high volatility of natural gas prices, also had a significant negative
impact on the Petrol Group’s business performance.
For 2022, the Petrol Group planned sales revenues of EUR 5.9 billion, with the total sales
revenues reaching a record EUR 9.5 billion, an increase of 91 percent compared to 2021. In
addition to the higher purchase and selling prices of fuels and energy products, the increase
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in sales revenues compared to the previous year was also driven by low-cost volume sales of
fuels and petroleum products and the incorporation of Crodux derivati dva d.o.o. into the Petrol
Group. The Petrol Group sold 4.1 million tons of fuels and petroleum products in 2022, an
increase of 25 percent compared to the previous year. Due to the high purchase prices of all
energy products and the impact of the regulation of motor fuels and other energy products, this
increase in sales is not reflected in the adjusted gross profit. It amounted to EUR 393.4
million, down 28 percent year-on-year.
The Petrol Group’s EBITDA reached EUR 96.3 million in 2022, a decrease of 60 percent
compared to 2021. The largest negative impact on this was due to the regulation of motor fuels
in all markets, amounting to EUR 188.9 million, while the Petrol Group’s EBITDA was also
affected by the damage caused to Geoplin d.o.o. Ljubljana due to the non-delivery of natural
gas and the price regulation of other energy products in the Slovenian and Croatian markets.
In 2022, the Petrol Group achieved a net profit of EUR -2.7 million.
The changed circumstances have also required the Petrol Group to adjust its investment funds.
In 2022, investments amounted to EUR 59.8 million, of which 48 percent for energy transition
projects, while the amount set aside for further development in the 2022 plan stood at EUR
100 million.
We are working to obtain compensation for the economic damage caused to Petrol by the
regulation. Although we have been actively seeking an agreement, we have so far been
unsuccessful and have had to take the legal route. In both Slovenia and Croatia, an out-of-
court settlement has been submitted to the state attorney’s office, amounting to EUR 106.9
million in Slovenia and EUR 55.9 million in Croatia.
Against this background, it is encouraging that, despite the tight operating conditions, S&P
Global Ratings has reaffirmed Petrol d.d., Ljubljana’s »BBB-« long-term rating, its »A-3«
short-term credit rating and its »stable« credit rating outlook in December 2022.
In an effort to make the Petrol share more attractive to smaller investors, a successful 1:20
split of the PETG share was carried out in November 2022. At the end of 2022, the Ljubljana
Stock Exchange awarded Petrol d.d., Ljubljana the First Listing Share of the Year Award.
In 2022, despite the challenging environment, we paid our highest ever gross dividend of EUR
30 per share to shareholders for 2021.
An optimistic and ambitious partner for households, businesses and the public sector
In 2023, uncertainty about the supply and price of energy products has diminished, the outlook
for economic growth has improved accordingly, and inflation is expected to moderate
gradually, although it remains high in the early months of 2023.
Even though we are facing a challenging period ahead due to the still tight energy markets, we
are cautiously optimistic about 2023. The Petrol Group’s business will continue to be
significantly impacted by the regulation of fuel and energy product sales prices, tighter
purchasing conditions and inflation, which will be addressed by adapting business processes
and optimising costs. In addition, a number of factors in the international and domestic
environment will also have an impact on business: the uncertain geopolitical and economic
situation, the state of the global oil and energy markets, and movements in the US dollar. In
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line with our strategy until 2025, we continue to pursue our core objectives of achieving
business growth while remaining committed to sustainable development. Slovenia, Croatia and
Serbia remain key markets for Petrol. In 2023, we plan to have a stable business and a positive
result at the end of the year by meeting all our financial commitments.
We have long warned that regulation has a negative impact on the Petrol Group’s business
and, consequently, on the Company’s stakeholders. We will work to deregulate or at least
adapt regulation to models that are dynamic and take into account the rising operating costs.
Margins that are too low jeopardise our business objectives such as productivity growth, sales
and green transformation. Only with a sustainable pricing model can the Petrol Group compete
in the market, invest in development, remain a supporter of socio-economic life, and at the
same time provide stable returns to shareholders and secure employment for more than 6,000
employees and business cooperation for suppliers.
The year ahead will not be easy. Our goals are ambitious but achievable. I am confident that
with the quality of our team at Petrol Group, we will be able to achieve our goals. We thank all
our customers for continuing to choose Petrol to meet their energy needs, our shareholders
for their confidence even in difficult circumstances, and our business partners and other
stakeholders for their support and cooperation. As one of the largest energy companies in the
region, we at the Petrol Group will continue to strive to provide strong support to households,
businesses and the public sector, both in meeting the challenges of the energy crisis and in
the transition to a zero carbon future.
Nada Drobne Popović
President of the Management Board
HIGHLIGHTS:
• The heightened geopolitical situation due to the war in Ukraine and the energy crisis have
brought numerous and complex challenges.
• The legal merger of Crodux derivati dva d.o.o. with the Croatian company Petrol d.o.o.,
one of the largest business acquisitions of the Petrol Group, was completed at the
beginning of November 2022, two months ahead of schedule.
• A major focus was placed on stabilising the operations of Geoplin d.o.o. Ljubljana.
• At the end of 2022, the Ljubljana Stock Exchange awarded Petrol d.d., Ljubljana with the
prestigious First Listing Share of the Year Award.
• Due to the high purchase prices of all energy products and the impact of the regulation of
motor fuels and other energy products, the increase in sales revenues is not reflected in
the adjusted gross profit.
• We are working to obtain compensation for the economic damage caused to the Petrol
Group by the regulation of energy product prices.
• The year ahead will not be easy. Our goals are ambitious but achievable. With the quality
of our team at Petrol Group, we will be able to achieve our goals.