Message to the Stakeholders

Message to the Stakeholders

At the close of 2023, we are pleased to announce that the first phase of HELLENiQ ENERGY’s transformation from a pure refining and marketing petroleum products company to an organisation that is active across the entire energy spectrum, incorporating ESG criteria into its business strategy and significantly improving its carbon footprint, in line with its integrated strategic plan “Vision 2025”, has been successfully completed.

Notably, the company has made further operational improvements to its traditional activity. Concurrently, it intensified efforts to build a diversified and robust portfolio focused on Renewable Energy Sources and alternative fuels, gradually entering new markets with more environmentally friendly products and services. In addition, it boosted its marketing presence abroad, accelerated the implementation of its digital transformation, and steadily proceeded with renewing its human resources.

As a result of the Group’s increased productivity and extroversion, at an operational level, in 2023 the Group recorded its second-highest profitability in its history, reflecting its commitment to its vision towards a green low-carbon economy that contributes to Europe’s energy security and makes it less vulnerable to adverse geopolitical developments.

Moving towards a sustainable future with realism and guided by the strategic plan “Vision 2025”

In a volatile environment with unprecedented challenges, a rapid transition to a new model of sustainable development has become imperative. Special emphasis is now being placed on energy adequacy and security of supply, using at the same time all available technologies to ensure a fair transition, while taking into account ambitious climate goals.

As demonstrated at the last COP28 Climate Summit in Dubai, hydrocarbons play a role in reducing the carbon footprint of the energy value chain. The conclusion of the Summit is clear. Extreme non-implementable solutions do not solve the problem. On the contrary, they have a negative effect, as they prevent investments for improvements in existing energy sectors that could provide significant environmental benefits, impacting costs and energy security, particularly in Europe. Liquid fuels are therefore necessary for the energy transition and can be used thanks to emission capture technologies, but also as ‘transition fuels’. At the same time, the shift to a green, low-carbon economy is an absolute necessity and requires rapid, high-cost investments in RES projects and alternative energy, which will, however start to pay off over time.

HELLENiQ ENERGY, with its deep sector knowledge and anticipation of future developments, is rapidly transforming by implementing its “Vision 2025” plan. Specifically, it is evolving into an energy Group with a significant presence in traditional activities while accelerating growth in RES and alternative fuels, aiming to improve profitability and increase contributions from new, more sustainable revenue sources.

HELLENIQ ENERGY’s strategy now focuses on 4 main pillars: operational excellence in core activities, the development of new energy market activities such as biofuels, electromobility, and alternative energy, the further development of the RES and energy storage portfolio and, finally, the improvement of the operating model through digital transformation, human resources evolution and constant governance system upgrades.

By implementing the transformation plan, the Group lays the foundation for sustainable and dynamic long-term development. It creates value for its shareholders, its people and society at large by boosting profitability and increasing contributions from activities that improve its carbon footprint.

Furthermore, the digital transformation program is being successfully implemented, incorporating innovative solutions, utilising digital technologies and introducing best practices in HELLENiQ ENERGY’s business activities. This transformation follows 4 main lines of action, the Digital Refinery, Digital Operations at the Group level, the modernisation of the operational resources management system, and the digitalisation of the fuel station network. It is worth noting that cumulative financial gains by 2025 are expected to reach €160 million.

“Vision 2025” is an ongoing process, a dynamic tool updated in line with international conditions and the challenges of the climate crisis and energy transformation, positioning the Group a leading player in these developments.

Expanding and further developing a strong energy portfolio

HELLENiQ ENERGY promotes energy transformation in all markets where it operates by embracing innovation and developing new initiatives with the main objective of becoming the leading provider of low-carbon energy solutions.

In 2023, the Group focused on implementing energy autonomy and energy-saving projects at its refinery facilities with the aim of developing the “refinery of the future”. HELLENiQ ENERGY made investments in the production of advanced biofuels through the Hydrogenated Vegetable Oil cogeneration plant, currently under development at the Thessaloniki refinery. It is also considering investments in Greece’s first Sustainable Aviation Fuel production plant in Aspropyrgos, CO₂ capture in Elefsina, and the production of green hydrogen and synthetic fuels in Elefsina and Thessaloniki.

In addition, the polypropylene production plant is expanding, which is expected to contribute to decoupling from fuel sales and further improving the Group’s environmental footprint.

Our key priorities in Retail Marketing are to continuously improve activities in Greece and dynamically expand the network abroad to ensure that HELLENiQ ENERGY continues to lead developments in Southeast Europe. Furthermore, in its effort to promote electromobility, the Group is developing an extensive network of electric chargers and electromobility services in its fuel stations and key locations in Greece and abroad.

In the field of Renewable Energy Sources, the Group is steadily building up its portfolio in Greece and abroad. Specifically, at the end of 2023, it owned 356 MW of installed capacity, while the total portfolio of projects under development exceeds 4.2 GW. According to this progress, the target of operating parks with a capacity of at least 2 GW by 2030 is becoming a reality.

Finally, in the Hydrocarbon Exploration and Production area, the Group proceeds as planned. By the end of 2024, decisions are expected to be made regarding the drilling of exploratory wells for hydrocarbon deposits based on the processing and evaluation of the data obtained so far.

Until then, we will continue to work methodically, innovate and develop new initiatives, guided by Vision “2025”.

Corporate Governance with an eye on the future

HELLENiQ ENERGY has always adhered to responsible and ethical practices, which define its entire business activity. Reliability, transparency, responsibility, and respect are the fundamental principles of its corporate governance. The company’s ongoing commitment to zero tolerance for corruption and the implementation of best practices, beyond those required by current legislation, reinforces the trust it receives from stakeholders.

To create value for the Economy, the Environment, and Society, a Sustainability Committee has been established to assist the Board of Directors in its work, confirming the Group’s long-term commitment to sustainability. With the adoption of a new holistic governance model on Sustainability issues, the Group’s organisational units have now been aligned to accelerate progress towards energy transformation.

For nearly twenty years, the Group has transparently and responsibly disclosed its economic, environmental, and social performance to stakeholders, following internationally recognised sustainability standards. In 2023, being at the forefront of developments, HELLENiQ ENERGY took into account the ESRS Standards in its materiality analysis, while also complying with the GRI Standards, the main reference for preparing this report.

In addition, HELLENiQ ENERGY has been promoting the 17 UN Sustainable Development Goals over time and has integrated the 10 principles of the UN’s Global Compact into its strategy, policies, and procedures. The Group’s environmentally and socially responsible operations are confirmed by its inclusion in the Financial Times Stock Exchange-Russell Group (FTSE), the FTSE4Good Index Series, and the ATHEX ESG Index, as well as its continuously improving performance in ESG ratings by international organisations and independent bodies such as CDP, S&P, MSCI, and Sustainalytics.

The implementation of a structured operating mode with clear rules and principles of good corporate governance allows the Group to respond to modern challenges and the constantly changing business, economic, and social conditions, ensuring its transparency and credibility in the market and society.

Health and Safety at the top of our priorities

HELLENiQ ENERGY’s unwavering commitment to a working environment that guarantees the health and safety of its people, seamless operation, and business continuity is timeless and non-negotiable.

With stakeholder safety as its primary concern, the Group works continuously to ensure zero accidents and proper management of critical incidents by creating a working environment where risks are identified, assessed, prevented, and eliminated. Every day, across the entire range of the Group’s activities, the most up-to-date and rigorous standards ensuring health and safety of employees and partners are rigorously followed. A strong corporate culture is promoted, guaranteeing workplaces free of any relevant risks. Therefore, to reinforce and consolidate a common culture, the Group’s employees and partners received more than 75,000 man-hours of Health and Safety training in 2023, exceeding 56% of the Group’s total training hours.

Recognising that readiness for seamless operations and a commitment to Health and Safety are inextricably linked to the Group’s sustainability, infrastructure upgrade projects are implemented and international best practices are adopted to prevent and eliminate potential risks, continuously improving the Group’s strong performance in these critical areas. 2023, investments of €17 million were made in the Group’s facilities in Greece and abroad to further protect the health and safety of employees, partners, and local communities near the facilities.

In addition, 668 drills were conducted at the Group’s facilities to ensure smooth and safe operation of refineries, facilities, and self-operated fuel stations, as well as to reinforce the level of response and preparedness in case of emergencies. Some of these exercises were conducted jointly with the Fire Brigade, Special Disaster Response Unit (EMAK), and the Police and Port Authorities to share experiences and know-how, strengthen the spirit of cooperation, and maintain a high level of preparedness for all parties, benefiting our people, local communities, and the environment.

At HELLENiQ ENERGY, we are particularly proud that our ongoing commitment to the safety of all stakeholders has yielded positive results. In 2023, the frequency rates of lost workday accidents and total injuries decreased significantly by 28.7% and 22.8% respectively, compared to 2022 and the corresponding European indicators, which unfortunately showed an upward trend.

These results, combined with achieving the target of zero major accidents for yet another year, provide practical evidence of our strong commitment to Health and Safety, which remains the cornerstone of the Group’s daily operations.

We operate with a sense of responsibility, creating long-term value for the economy, people, and the environment

With a focus on sustainable development, and through its multidimensional activity, HELLENiQ ENERGY supports the economy and employment in the countries where it operates, drives advancements in the energy sector, and returns the value and trust it receives to society, creating a strong positive footprint. The Group’s unbreakable ties with Greece and commitment to prosperity and growth are confirmed by the recent Social and Economic Footprint Study conducted by the Foundation for Economic and Industrial Research for 2023.

In particular, HELLENiQ ENERGY’s contribution to the Greek economy last year amounted to €2.26 billion, corresponding to 1.03% of GDP, while its contribution to tax revenues approximated €2.91 billion. In addition, the Group boosted the Greek economy’s extroversion, with its exports reaching €6.14 billion, accounting for 12.1% of Greece’s total exports. The contribution to domestic employment was also significant, as it directly and indirectly supported more than 30,000 full-time jobs, equivalent to 0.62% of the country’s total employment, and indirectly supported approximately 77,000 citizens.

As one of the largest employers in our country, HELLENiQ ENERGY has created a modern working environment based on trust, respect, equality, and inclusion. By sharing the same vision with its people, it contributes broadly to the United Nations Sustainable Development Goals related to decent work, good health and well-being, and quality education. In addition, in response to modern challenges, over the past five years, it has dynamically renewed its staff by 30%, bringing in technical staff and experienced specialised personnel, contributing to the repatriation of highly qualified and skilled Greeks.

Operating as a responsible corporate citizen, HELLENiQ ENERGY meets the needs and expectations of its stakeholders through its multidimensional and integrated Corporate Responsibility strategy, which aims to support social well-being, protect the environment, and respond to emergencies in a timely and effective manner. With programs amounting to €20.8 million in 2023, the Group positively impacted the lives of more than 750,000 people in Greece and the other countries where it operates.

More specifically, through targeted programs, the Group rewards excellence and the efforts of the new generation in learning and academic excellence. It fully embraces sports by supporting the National Basketball Team, the Hellenic Paralympic Committee, the historic EKO Acropolis Rally motorsport event, and amateur teams in the neighbouring municipalities. It preserves cultural heritage by renovating historic sites such as Cine Elefsis and Adam House, leaving a lasting legacy for future generations. In addition, to protect and naturally regenerate the environment, it implements large-scale environmental interventions, such as erosion control projects in fire-affected areas in West Attica and reforestation efforts in Penteli.

Beyond its planned actions under the Corporate Responsibility program, HELLENiQ ENERGY is implementing a specially designed program to aid the recovery of economic and social activity in the Thessaly region following devastating floods.

Recognizing the unique role that HELLENiQ ENERGY plays in Greece, and motivated by our people and vision, we will continue to exceed expectations, creating increasing value for the economy and society, and ensuring energy security and sufficiency for our country, placing sustainable development at the heart of our operations and strategic transformation plan.

Andreas Shiamishis
Chief Executive Officer