Press Releases

21/09/2016

AB Group - leader in the IT distribution market - increases its competitive advantage: in FY 2015/2016 scale of business over PLN 7,5 milliard

Summary of financial results year-on-year:

 

 

FY 2015/2016

2nd quarter 2016

 

PLN mln

PLN mln*

Amendment*

PLN mln

PLN mln*

Amendment*

Revenue

7.543,1

7.543,1

+11,0%

1.986,8

1.986,8

+30,0%

EBITDA

112,3

115,9

+7,0%

25,7

26,2

+6,7%

Net profit

64,6

69,1

+1,0%

14,1

14,9

+5,1%

(*) Values adjusted by migration costs of logistics (temporary)

 

Record year and quarter

The past financial year and quarter were record-breaking for AB Group, the largest distributor of IT, radio and television/household appliances in Central-Eastern Europe. For the first time in the financial year, the Group exceeded the threshold of PLN 7 milliard, and during the last quarter of the trading year - it was significantly closer to the level of PLN 2 milliard.  It is practically twice as much as the closest competitor - the competitive advantage of AB Group is growing rapidly. 

 

All-time highest EBITDA result

AB Group generated over PLN 7,5 milliard of revenue in the financial year 2015/2016 (ended on June 30, 2016) and confirmed its leading position on the market as well as rightness of the long-term development strategy, whose effects are particularly noticeable in the demanding, less predictable market environment.  The EBITDA result, upon adjustment by the migration costs to the logistics centre in Magnice falling within this period (temporary process), increased by 7% year-on-year, up to PLN 116 million. It must be remembered that the comparability of financial results year-on-year at lower levels additionally distorts the commencement of calculation in the 4th quarter of 2015 of depreciation in the new distribution centre (approx. PLN 1 mln/quarter) and bearing of financing costs related to the new investment.

 

Surge in the 2nd quarter

In the past quarter, i.e. from April to June 2016 (2nd quarter of calendar year, 4th quarter of financial year 2015/2016), AB Group significantly increased its business expansion, recording an increase of revenue by as much as 30% year-on-year, due to very good sales of telco products, especially Apple, Samsung and Huawei, in the Czech Republic. The EBITDA result, upon adjustment by the migration costs to the logistics centre in Magnice falling within this period, increased by 7% year-on-year, up to PLN 26.2 million. Analogically adjusted net profit up to PLN 14.9 million.

- Since our two largest competitors on the Polish market are undergoing a serious crisis or are having serious problems - the first one defends itself against the creditors in the restructuring procedure, whereas the other one recorded a decrease of the net profit by nearly 80% year-on-year - we show very clearly that we are able to run stable and safe business and continuously create value – said Andrzej Przybyło, President of the Management Board of AB SA.

 

IT market appreciates AB Group

- Last quarter clearly showed that our business model based on long-term activity was the right decision, which has been confirmed by, among other things, honesty, transparency, and building of relationships with contracting parties. We perform our daily duties with proper care and diligence. Our core business is distribution. We also take pride in our know-how, the largest financial basis, the most modern logistics infrastructure with our own distribution centres as well as and above all - the trust of business partners.  Therefore, AB Group is the natural first choice of distributor for both vendors and resellers, which is confirmed by a number of awards received - said President Przybyło.

In August 2016, CONTEXT, an organization dealing with market analyses and price strategies within the scope of ICT sector, hence, the largest research in that field in Europe, carried out among over 5,000 resellers, honoured AB Group with three titles of the "Broadline Distributor of 2015". The distinction was awarded in Poland, the Czech Republic and Slovakia.  On the basis of votes of resellers in Poland, AB Group was awarded the title of the "Distributor of the Year" by CNR magazine - the title awarded sixth year in a row. Additionally, President Andrzej Przybyło was honoured with the tile of the "IT Personality of the Year" by CNR magazine, and Ms. Patrycja Gawarecka won the category - "Head of Partner Channel". AB Group also received a number of awards from vendors, including HP and Dell. President Andrzej Przybyło is the winner of "Wektor" prize and title of the Entrepreneur of the Year by Ernst&Young.

 

Solid market position no. 1

In the first half of 2016, AB Group consolidated its position of a leader in the CEE region, being number 1 on both Polish and Eastern markets - in the Czech Republic and Slovakia.

- Our market shares are increasing and the sales are growing thanks to healthy business relationships, operating efficiency, know-how developed for over 25 years, investments in innovativeness, leading position in the field of e-commerce and the broadest product portfolio (96,000 products), including products actually in our warehouses, available for immediate delivery, not only with offer - said Andrzej Przybyło, President of the Management Board of AB SA.

 

The strongest financial condition

The results of the past quarter confirm business and financial strength of AB Group.

- We maintain very high profitability when compared with other companies in the industry, and our debts are safe and diversified.  For many years, we have been having the highest equity in the industry, which consistently increases year by year. Therefore, we have the greatest business development potential and we are also the safest company for our suppliers, clients and financial institutions - said Grzegorz Ochędzan, Finance Member of the Management Board of AB SA.

- Moreover, despite dynamic growth of the scale of business, our net borrowing quarter-to-quarter decreased. We also observed strong cash flow. AB Group is not only the strongest operational entity in the IT industry in the region, but also the strongest entity in terms of finance - added Grzegorz Ochędzan.

 

AB as the first-choice distributor

AB Group, the leader on the IT distribution market in CEE, is chosen as regional partner in case of prestigious contracts signed with such companies as Apple and Microsoft. The Group may also foster global cooperation with such industry giants as HP and Lenovo. In the financial year 2015/2016, AB Group signed new or renewed present distribution contracts concluded with, among other things, the following companies: Lenovo (data centre), Sony (software), Canon (IP protection), iGo3D (3D printing), Samsung (telecom accessories), Vileda (household articles), OKI (printers and consumables), Huawei (telecom accessories), Trust (accessories for players), Kaspersky (software subscriptions), Sophos (IT security devices), Fnatic (accessories for players), Philips (RTV), Aruba – HP Enterprise (network devices). 

- We are especially proud of strong boost in AB Group within the Value Added Distribution segment (VAD), where we recorded an increase by 23% year-on-year in Poland, whereas the entire market dropped by 4%. Furthermore, we have also executed some important contracts, such as those signed with Lenovo, Sophos and Aruba, which give us a possibility of further dynamic business development in VAD.  Therefore, we do not have to bear the activity costs on the M&A market - stressed Patrycja Gawarecka, Sales Director at AB SA.

 

Efficient development of sales channels

AB Group is consistently active in all sales channels, offering the broadest range of products and the best e-commerce solutions, additionally managing the franchise network that is the largest in the CEE region (1,600 retail outlets; franchise without new tax on retail sales). Thanks to efficient business diversification, AB Group is a leading player in Poland, the Czech Republic and Slovakia, in the field of "telecom" products (accessories, navigation, fixed telephony, mobile telephony, smartphones), photography equipment and IT. AB Group is building its strong position in the field of distribution of toys (in the 2nd quarter of 2016, increase by 61% year-on-year) as well as radio and television/household appliances (increase by 80% year-on-year), and strengthening its share in advanced equipment (servers and storage, digital signage, security, software, networks, power supply). 

AB Group has three logistics centres - one in the Czech Republic and two in Poland. The facility in Magnice, launched this year, is of a size of 4 full-sized football pitches, and its cubic capacity is twice as powerful as the Centennial Hall. Group AB invested nearly PLN 129 million into this project, which was appreciated for its innovativeness and hence received PLN 24,3 million of EU funding. The applied warehouse and dispatch systems are currently the most cutting-edge solutions and fully satisfy the requirements of even the most demanding markets, such as e-commerce, tender or retail network.