MOL expands its Consumer Services portfolio in Poland

MOL Plc. (“MOL”) hereby notifies the market participants of the following:

MOL today signed a set of agreements with PKN Orlen and Grupa Lotos covering the sale and purchase of several portfolio elements within Consumer Services. Accordingly MOL acquired 417 service stations in Poland including 270 company owned sites with a country-wide coverage and the potential to reach a top 3 position in the local fuel retail market. An additional long-term agreement provides motor fuel supply for the acquired network in Poland at competitive terms.

Today’s deal provides an outstanding inorganic expansion opportunity and an excellent fit to the Consumer Services segment’s ambitious growth strategy:

1. Strategic rationale: through the completion of the acquisition MOL’s regional footprint will be further diversified and the captive market extended in the largest economy of the CEE region. The purchased set of assets would provide a basis for future growth in the country, where MOL had limited presence thus far.
2. Purchased assets: the acquired Lotos branded, Lotos Paliwa owned network captures particularly strong market positions amongst highway stations with further organic growth opportunity and significant upside to expand non-fuel sales. The transaction covers trademark licence arrangements and the takeover of fuel cards issued by Lotos Paliwa. The average throughput of the MOL service station network is expected to improve following the closing of the transaction.
3. Financial implications: the transaction is expected to have a mid-term positive annual EBITDA generation potential of around USD 70mn to the Consumer Services segment and will be financed from available liquidity. The deal would have no adverse effect to MOL’s previously communicated dividend payment capacity.

The agreed total purchase price amounts to USD 610mn, the sum of a cash consideration and a financial lease liability in relation to the purchase transaction. Closing of the transaction is subject to, among others, obtaining the approval of the European Commission.

Subject to the final approval of the above acquisition MOL divests 185 service stations to PKN Orlen located in Hungary and Slovakia for a total consideration of USD 259mn. The divested assets include 144 service stations in Hungary and 41 stations in Slovakia.

The sale and purchase prices are subject to net debt and working capital adjustments upon closing and both the deals are expected to be closed within 12 months.

Zsolt Hernádi, Chairman and CEO of MOL Group commented:

“For MOL this deal represents a major step on the strategic transformational journey we started in 2016 and accelerated last year by our updated strategy. Acquisition of the ACG asset in Azerbaijan, construction of the new polyol plant in Hungary and our entry to Poland are all important milestones on the way to deliver on our goals. By this acquisition, we will gain access to the biggest economy in Central and Eastern Europe as well as to reach almost 40 million potential customers with our products and services. Hungarians and Poles are sharing the same historical experiences, our common goal is to ensure the safe energy supply of the CEE region, I believe that the North-South energy corridor will strengthen further with this agreement.”

Péter Ratatics, Executive Vice President of Consumer Services of MOL Group commented:

“A bit less than 1 year ago we introduced MOL’s 2030+ strategy and our aim was to expand our service station network to 2200 units further in the CEE by 2025. By completing this transaction, we would even surpass this target as we welcome Poland in our Consumer Services portfolio.  We won’t stop here as we believe that Consumer Services has a great potential along the way of the energy transition. Our aim is to serve an increasing number of customers and to provide mobility solutions in line with changing consumer habits, along with the best quality services and goods. Lotos’s great network will be an excellent base for it”