PKN ORLEN to take over Polska Press

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PKN ORLEN to take over Polska Press

08-12-2020

A COMMENT FROM PKN ORLEN CEO DANIEL OBAJTEK – VIDEO: https://we.tl/t-C1BAH3Qp4Z

PKN ORLEN is expanding its presence in the media market. The acquisition of one of the largest publishing groups in Poland and harnessing the potential and capabilities of the media agency Sigma Bis and RUCH will enable the Group to create a flexible, personalised and comprehensive offer delivering greater customer satisfaction. The transaction is part of PKN ORLEN’s strategic plan to strengthen its retail sales, including its non-fuel sales. With the acquisition of Polska Press from Germany’s Verlagsgruppe Passau Capital Group, PKN ORLEN will gain access to 17.4m internet users as well as the opportunity to win new customers.

‘We are consistently expanding our business interests. Based on Sigma Plus we have built from scratch a professional media agency that is steadily growing its customer base including commercial accounts. Our acquisition of RUCH will make it easier for us to enter the market of new sales points and develop our e-commerce services. The access to 17.4m users of websites managed by Polska Press will effectively strengthen sales across the entire ORLEN Group, optimise marketing costs and enable further expansion of big data tools. Our efforts are consistent with PKN ORLEN’s new strategy until 2030 and are set to effectively support a rapid growth of our retail network,’ says Daniel Obajtek, PKN ORLEN CEO.

In line with its strategy until 2030, PKN ORLEN aims to grow its retail sales by advancing modern communication channels, expanding the network of parcel collection points, digital transformation of its retail formats and building an e-commerce platform around the RUCH network. The acquisition of Polska Press fits into this strategy, particularly where it seeks to build an integrated digital services platform based on the existing customer base. These efforts will strengthen customer relationships and drive profit growth. According to a November 2020 survey by Mediapanel Polska, Polska Press’ websites are read by 17.4m users per month. This is a solid target group for PKN ORLEN, potentially enabling the Group to win new and retain existing customers.

PKN ORLEN is acquiring one of the largest publishers in Poland, with its 2019 revenue in excess of PLN 398.4m. Polska Press owns 20 out of the total 24 regional dailies and nearly 120 local weeklies published in Poland. They successfully operate in 15 out of the 16 voivodeships in Poland and are market leaders in terms of readership and sales in most of them. The Group’s portfolio also includes 500 websites, making it the leader of the online news and journalism in Poland and the undisputed leader of local and regional news media. Over recent years, the number of unique users of Polska Press has shown an upward trend, rising 45% year on year in November 2020 alone. The news website with the largest number of real users is naszemiasto.pl with 10.4m visitors.

PKN ORLEN will expand its big data tools based on the resources of Polska Press, ORLEN VITAY, Stop Cafe as well as the ENERGA Group and RUCH. Polska Press has a database of customer preferences, transactions and shopping basket values for 60.07% of all internet users in Poland. This will enable the ORLEN Group to develop new business models for improved geographical coverage and an offer tailored to the target customer group. Creating internal databases is a key trend in the advertising market, but also in retail. A company that has decided to bring sales capabilities in-house with a view to better managing the customer base and responding faster to customer needs is Walmart, one the world’s biggest retailers. In 2019, PepsiCo determined that data acquisition would be key to the company’s growth and has built its own media planning capabilities.

Companies developing in-house communication platforms as a tool to support their business and reach new customers is a global trend that has been ongoing for years. The oldest US newspaper The Washington Post was bought by the founder and CEO of Amazon.com. In 2018, the US telecommunications company AT&T acquired the media company Time Warner. In 2016, Arrow Electronics, a global electronics company, purchased UBM (now Informa), which is a complete platform of print and online media devoted to electronics. Back in 2015, Verizon, a major US telecommunications company, took over the online services provider AOL for USD 4.4bn. Two years later, the same telecom acquired another web services provider Yahoo in a USD 4.5bn transaction. Marc Benioff, co-founder and CEO of Salesforce, and his wife Lynne Benioff bought Time weekly from Meredith for USD 190m. In 2018, Patrick Soon Shiong bought The Los Angeles Times and The San Diego Union Tribune. In 2017, car maker Renault acquired a 40% stake in the French media group Challenges. The aim of both Challenges Group and Renault is to work together to create a shared platform for testing innovations and creating new editorial and technological content.

Incorporating a media company into its service portfolio will help the ORLEN Group to significantly expand its advertising offer for external customers. The acquisition of a media group offering print media and online advertising services will generate additional advertising cost savings. The potential in this field is best demonstrated by the results of the advertising market in Poland. According to Publicis Groupe estimates, in 2019 the market was worth close to PLN 10bn, a 3.2% increase year on year. Indeed, the advertising market has been growing steadily since 2013. The acquisition of Polska Press Group by PKN ORLEN will improve the efficiency of the Group’s advertising and marketing activities.

Third-party companies that actively use advertisers’ services will also benefit from the transaction. The addition of a print and digital media management company to its media portfolio will allow PKN ORLEN to develop an end-to-end, competitive suite of advertising services.

The acquisition of Polska Press by PKN ORLEN may generate significant savings on the costs of video production services across the entire Group. This type of services are costly, and the acquired publishing house has a network of state-of-the-art video production studios located throughout Poland. Sigma Bis provides PKN ORLEN with social media video production services, and the Group has also built its own internal media production capabilities. These major cost synergies could be replicated across the entire ORLEN Group. It is 53 companies in Poland alone, most of them large business organisations with their own marketing and communication structures and budgets.

The ORLEN Group’s presence in the media and advertising market could also optimise logistics costs. In order to maximise the synergies, the Group will consider developing RUCH logistics centres at Polska Press’ modern printing facilities. It is important to note that the ORLEN Group will also have full access to in-house printing resources that can be used for the purposes of large-scale marketing campaigns and other activities.

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