Press Releases

23/11/2017

Diversified business of the AB Group is the best prepared to changes in the business environment

 

·         Strong position no. 1 in the Polish market and the whole CEE region; similarly as in the previous periods, also in Q3 2017 revenues and profits are decidedly higher than the ones of other companies in the industry.

 

·         Continuing development based on safe foundations: a decrease in the net debt to EBITDA ratio to only 1,68 , high operating cash flow EUR 33,3 million, the lowest SG&A costs in the industry.

 

·         A dynamic increase in the segments: cloud, gaming, VAD and digital signage as well as development of a complementary offer apart from IT: radio and television/home appliances, toys, smart home.

 

In the first quarter of the financial year 2017/2018 (ended on 30 September this year) the AB Group noted approximate revenues year-on-year (EUR 435 million) and higher EBITDA result (EUR 5,8 million), which allowed to generate a net profit of EUR 3 million. This is a good start of the new financial year following the best one so far – record results of the AB Group for the financial year 2016/2017 amounted to EUR 1.92 billion revenues, EUR 27 million of the EBITDA result and EUR 15,7 million of the net profit.

 

- We are satisfied with generated quarterly results. The AB Group is a stable and predictable entity whose business model and action strategy works in any market condition – underlines Andrzej Przybyło, the founder, the father of the success and the President of the Management Board of AB SA.

 

In the last quarter Czech and Slovak markets stood out in the AB Group’s business, which is diversified with regard to product and geography. Furthermore, one should indicate the development of activity in the following segments: radio and television/home appliances, telco, could, as well as value added sale (VAD). Obtained results allowed repeating brilliant results from the previous year when the Group generated approximately a 25 percent increase in revenues.

 

Solid financial foundations

 

In the 1st quarter of the financial year 2017/2018 the AB Group generated high positive cash flows from operating activity (EUR 33,3 million), has resources for effective sale service in the seasonally best quarter of the year, has safe and diversified debts. Credit facilities were used in less than one fifth and the AB Group’s three quarters of indebtedness is of a long term character. At the same time, at the end of the quarter the net debt to EBITDA result for the last 12 months amounts to only 1,68 (a decrease by 44% YtY).

 

- We care for the cash position and safe debt. These aspects are appreciated by banks and companies insuring receivables. Furthermore, a large financial space allows us to use the possibility of a further increase with a security ingrained in our DNA – says Grzegorz Ochędzan, Member of the Management Board for Finance of AB SA.

 

What is important, the AB Group is also no. 1 with regard to the effectiveness, which constitutes a great competitive advantage in the distribution market. It results from a restrictive cost policy and large investments in innovativeness such as e-commerce and stock automation. For years the AB Group has maintained the lowest in the industry ratio of the cost of general governance and sale to turnover (SG&A  2,7%), as a result of which it has had a competitive advantage in the changing external conditions, irrespectively of the current market business cycle.

 

- We have own distribution centre in Magnice, next to Wroclaw, adjusted to own purposes and equipped with high-tech automation which ensures high scalability together with an increase in the sale value – says Grzegorz Ochędzan.

 

The largest offer, dynamic increases

 

The AB Group is the biggest distributor in the region with an offer of almost 100 thousand products is stock and is systematically extending the product portfolio. In the last quarter new distribution agreements were signed with companies, such as: Logitech and Gembird (computer accessories) as well as Eterio (servers). Furthermore, the AB Group has been also developing distribution outside the IT area. In the home appliances segment a distribution agreement is worth noticing, as a result of which the offer will include products under a well-known brand Sharp, and in the scope of a new smart home segment – with a company Fibaro (a leader in the Polish market of intelligent buildings). It is worth mentioning that the AB Group is the main partner in the CEE region to global IT giants, such as, among others: Microsoft, HP, Lenovo, Asus, Dell and Apple (on the grounds of the previous years, it can be deducted that the current premiere of the following models: iPhone 8 and X will be another huge success).

 

In the scope of the IT offer, another very good quarter in the AB Group has been noted in the cloud computing segment, where the AB platform was the customers’ first choice and the AB Group has strategically partnered with the global leader in the software market – Microsoft. Whereas, in the 3rd quarter of 2017 the market increased by 8% YtY, the AB Group’s sale in the software segment increased by as many as 27% YtY. Sale of the gaming assortment including over 7 thousand products noted an even higher increase, similarly as the value added distribution (VAD). The radio and television/home appliances segment maintained a dynamic increase (+29% YtY), and the franchise network Kakto (225 points of sale in Poland) generated an increase in sale by 42% YtY.