AB Group increases market share on the IT distribution market, intensifies multidirectional development into new sectors as well
· Long-term success of business projects: AB Group shares its experience and competence to develop other businesses, where it achieved spectacular increases in the last fiscal year - Digital Signage (+53%), Gaming (+221%);
· Notable effects of the long-term development strategy: AB Group, being an absolute leader in the IT distribution sector, keeps increasing its market share (increase in Q2 2018 by 4% YoY), among other things, thanks to the broadest, available "on the spot" product offer, e-commerce tools and automation of logistic processes;
· Increased profitability in Q2 2018: positive effects of sales strategy focused on product and channel diversification;
· Situation after FY 2017/2018: strong market leader's position in Poland and the whole CEE region in the sector of IT distribution and consumer electronic goods;solid profits, safe financial ratios, the industry’s lowest SG&A expenses in the demanding market conditions;
According to the information gathered by Context, a research agency, Poland, the Czech Republic and Slovakia, i.e. the main operating markets of AB Group, constitute, overall, the fifth largest market in Europe of 8% of the value of the IT distribution market in the Old Continent. The market is already larger than that in Spain and is catching up with markets in Italy or France.
- Poland, the Czech Republic and Slovakia constitute the great potential market and thanks to our know-how as well as financial and logistic strength, we still have a lot of room for development – says Andrzej Przybyło, President of the Board of AB S.A.
- We are truly pleased with the results of the multidirectional development of business projects, say household appliances & audio/video devices or VAD. We still have many new ideas and already launched projects, which we would like to implement in the future – says Przybyło.
The product portfolio of AB Group has expanded within the last few years by, among other things, ICT solutions, network servers and solutions, digital signage, gaming products and distribution of cloud software (AB Group is a strategic partner of Microsoft). Many of the above-mentioned projects increase by at least several dozen per cent. A good example are the gaming products (+221% YoY in FY 2017/2018). In this area, AB Group provides a comprehensive offer, including Microsoft X-Box and Logitech. In the field of gaming, AB Group uses the competencies from the Czech and Slovak markets, where it launched a new franchise network in the form of the shop-in-shop (X-Play) - i.e. already 203 retail outlets - on the local market. Besides, the competencies of AB Group in terms of retail franchise networks constitute another competitive advantage of a strategic nature, which ensures strong leadership in the broad sales channel. AB Group manages the largest industry's network of this type in the region, which covers nearly 1.9k retail outlets - in Poland, i.a. Alsen (IT equipment, sponsor of e-sport team - A-Team).
On the other hand, Smart Life is an example of a new portfolio of AB Group. The segment gathers product categories that are closely interlinked - smart home (intelligent home solutions), HVAC (heating, ventilation, and air conditioning), CCTV and Security (television surveillance systems, monitoring, IT security, alarm systems). Additionally, AB sales channels also include installers and electrotechnical wholesale outlets.
- Smart Life is the effect of a long-term development strategy, which also includes diversification. In this area, just like in other segments in the past, we are planning to develop the market and create it with added value for our partners and end customers – stresses Andrzej Przybyło.
The e-commerce sector is especially important for AB Group, where you can see further stages of the on-going revolution in terms of increasing significance of digital sales channels. In this area, AB Group observes dynamics much higher than the broad market, generating sales in a completely automated manner via XML (full system integration), by sharing with its clients, among other things, Allegro module, and professionally presenting the products.
- We are the leader in the e-commerce partner services. We lead the way in innovation and automation of sales processes. Our competitive advantage is based, among other things, on advanced warehouse automation. What is more, we also go for new product areas. We keep investing in training, advisory and partnership programs – says Zbigniew Mądry, Member of the Board, Sales Director of AB S.A.
It should be mentioned that it was a subsequent year in a row when AB Group is the first choice distributor in the traditional IT sector. In the rating of resellers, i.e. "Distributor of the Year" organized by the well-known research agency - Context, AB and ATC won in the category of the first choice distributor by a clear majority of votes.
Therefore, AB Group achieves good financial results. In the financial year 2017/1018, which ended on 30 June 2018, the revenue of AB Group exceeded EUR 1.9 billion. The results led to very good financial results: over EUR 26 million of EBITDA ratio and almost EUR 14.4 million of net profit despite difficult market conditions in Poland. The above confirms the opinion about AB Group that despite difficult market situation, the company continues to implement its strategy based on safe and diversified development. When analyzing the results in the last quarter, EBITDA measure of EUR 6.2 million and net profit of EUR 2.8 million on EUR 0.4 billion revenue are worth mentioning. What is also important is the fact that on the year-on-year basis, net profits, EBITDA margin and profitability at the level of gross sales profit increased.
- Our long-term strategy of sustainable development brings measurable effects. Our reseller database, including over 16k entities, which is the largest in Poland and CEE region, constitutes one of our main competitive advantages, similarly to our ultramodern logistic and e-commerce services or the broadest choice of products available on site. – says Andrzej Przybyło, President of the Management Board of AB S.A.
Strong cash flow generated by AB Group due to its operating activities (EUR 20.4 million in the financial year 2017/2018) allowed to significantly reduce the company's net borrowing up to less than EUR 64 million (-16% YoY).
- We have reduced our debts and accumulated more cash. Long-term development requires long-term financing based on solid foundations. In combination with "sane" balance sheet, it means very good ratings in banks and insurance agencies – mentions Grzegorz Ochędzan, Member of the Board, CFO of AB S.A.
The net debt to equity ratio decreased in AB Group at the end of June 2018 to as little as 39%, whereas the net debt to EBITDA ratio decreased to 2.5, hence, equity constituted 2.7 times of fixed assets. The quick liquidity ratio increased to 0.85. Thanks to our top quality of financial settlements, AB Group has been also awarded by many financial institutions, e.g. "Golden Payer " award given by Euler Hermes for the highest payment ethics.