Financial results of the ES-SYSTEM Group for the first half of the

ES-SYSTEM
Warsaw, August 27, 2009
Press release
FINANCIAL RESULTS OF THE ES-SYSTEM GROUP FOR THE FIRST HALF OF THE YEAR 2009
ECONOMIC SLOWDOWN IN THE CONSTRUCTION INVESTMENT SECTOR – THE CAUSE OF
THE DECLINE IN THE REVENUES AND PROFITS OF THE ES-SYSTEM GROUP
Change
2009 to 2008
Item
Description (value in PLN thousand)
1.
Revenue from sales of products, goods
and materials
67 214
80 800
-16,81%
2.
Gross profit from sales
25 598
31 049
-17,56%
3.
Operating profit (EBIT)
3 356
7 447
-54,93%
4.
Return on profit EBIT
4,99%
9,22%
5.
EBITDA
6 258
9 738
-35,74%
6.
Gross profit
3 932
7 354
-46,53%
7.
Net profit
2 363
5 735
-58,80%
8.
Return on net sales (Profit)
3,52%
7,10%
30.06.2009
30.06.2008
DECLINE IN REVENUES AS THE EFFECT OF SEASONAL TRENDS AND ECONOMIC
SLOWDOWN IN THE SECTOR
Revenues on sales of the Capital Group after the first half of the year 2009 were lower by 16,81% in
comparison with adequate period of the last year. Domestic sale decreased by 16,03%, whereas the
export sale recorded a decrease of 19,42%.
In the Q2 the domestic sale went down by 24,62% yoy in comparison with 5,22% decrease in the 1Q
of the current year. Decrease in the export sale in the 2Q was slightly lesser than in the 1Q of 2009,
that is respectively 17,24% yoy compared to 21,30% yoy.
In the Q2 the stagnation on the domestic construction investment market had negative influence on
sales in the key activity segments of the Group, that is in the architectural (decrease by 22% yoy) and
in the industrial segment (decrease by 27% yoy). Those segments together constitute about 72% of
the Group’s sale.
In the Q2 of 2009 were postponed completions of few significant investments, e.g.: office facilities in
Lodz, Gdansk, Poznan; shopping centers in Rumia, Lublin, Rzeszow, Krakow, Jelenia Gora. Those
projects will be carried out in the Q3 and Q4 of the current year.
Seasonal trends were important factors which influenced the financial results of the Group in the first
half of the year 2009. Seasonal trends are natural phenomena in the professional lighting sector and
alleviation of their influence in the years 2007-2008 was the effect of a very good economy in the
construction sector in those days.
www.essystem.pl
[email protected]
ES-SYSTEM S.A. z siedzibą w Krakowie, ul. Przemysłowa 2, 30-701 Kraków wpisaną przez Sąd Rejonowy dla Krakowa – Śródmieścia w Krakowie Wydział XI Gospodarczy KRS
do Rejestru Przedsiębiorców Krajowego Rejestru Sądowego pod numerem 0000113760, o numerze NIP 679-25-51-640 i numerze REGON 351610904, o kapitale akcyjnym
14.145.000, 21 zł (w całości wpłaconym), o zarządzie w składzie:
Prezes Zarządu – Bogusław Pilszczek, Wiceprezes Zarządu – Leszek Ciupiński, Wiceprezes Zarządu – Jacek Wysocki.
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ES-SYSTEM
Also in the 1-st half of 2009 in the lighting sector the pricing pressure deepened and search for the
least expensive lighting solutions was more intensive. The Company does not submit to the dumping
pressure even at the cost of lesser number of orders from the present market.
DECLINE IN OPERATING AND NET PROFITS DESPITE REDUCTION OF SALE COSTS AND
GENERAL COST OF THE MANAGEMENT BOARD
Operating profit after the 1-st half of 2009 decreased by 54,93% and amounted to PLN 3,36 mln
with the decrease by 5,3% of sale costs and general cost of the Management Board. As the result the
Group’s return on profit EBIT reached the level of 4,99% in comparison with 9,22% in the first half of
the year 2008. Considerable decrease of profit and return on operating profit of the Group derives from
the decrease in sales in the investment area in the Q2 of 2009. The Group tried to compensate the
lack of orders in the investment segment by increasing wholesale, which was achieved by lowering
margins.
Net profit in the 1-st half of 2009 amounted to PLN 2,36 mln and was lower by 58,80% than the
result in the first half of 2008. Return on net sales reached the level of 3,52% compare to 7,10% in
2008. Direct reason for this considerable worsening of the net profit was weaker result of the operating
activities. Another reason was the deferred income tax expense in the amount of PLN 600 000
resulting mainly from the difference between the value of the balance depreciation and the tax
depreciation.
Important domestic projects in the Q2 of 2009:
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Adam Mickiewicz University - Kalisz (Z)
Office building of the bus factory SOLARIS - Murowana Goslina near Poznan (Z)
Production hall FRITOLAY - Poznan (Z)
Modernization of the park lighting - Szczecin (Z)
Power Station Belchatow; II stage of building 858MW power unit (T)
Cross Point Office Building - Lodz (T)
Music Theatre – Lodz; II stage (T)
ABB offices - Lodz (Z)
Hospital PSK4, Oncology - Lublin (T)
Galerry Olimp IV - Lublin (Z)
MONDI production plant - Swiecie (Z)
Expansion of the Shopping Centre ALFA - Olsztyn (Z)
Słoneczny Młyn Hotel - Gdansk (Z)
Shopping Centre „Sadecka” - Nowy Sacz (T)
Gemmini Park - Bielsko Biala (Z)
Aqua Park - Paniowki near Gliwice (Z)
Galeria „Niva” - Oswiecim (T)
Selected export projects in the Q2 of 2009:
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Kampus Brno – gym, continuation (Z/T)
SYSMEX BRNO – medical analyses laboratory (Z)
Warehouse complex „Southern Gate”; I stage, Moskow (Z/T)
British American Tobacco office buildings - Istanbul (Z)
Hotel Kaj - Zagrzeb (T)
Arabella - Monachium (T)
(Z) – finished, (T) – during realization (Z/T) – partially finished
In the first half of the year 2009 increase of the orders value was recorded on 28 export markets of
the Group, in comparison with the year 2008. Decrease of the orders value was recorder on also
28 markets.
www.essystem.pl
[email protected]
ES-SYSTEM S.A. z siedzibą w Krakowie, ul. Przemysłowa 2, 30-701 Kraków wpisaną przez Sąd Rejonowy dla Krakowa – Śródmieścia w Krakowie Wydział XI Gospodarczy KRS
do Rejestru Przedsiębiorców Krajowego Rejestru Sądowego pod numerem 0000113760, o numerze NIP 679-25-51-640 i numerze REGON 351610904, o kapitale akcyjnym
14.145.000, 21 zł (w całości wpłaconym), o zarządzie w składzie:
Prezes Zarządu – Bogusław Pilszczek, Wiceprezes Zarządu – Leszek Ciupiński, Wiceprezes Zarządu – Jacek Wysocki.
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ES-SYSTEM
In the first half of the year 2009 the Company added to its clients’ portfolio 9 new markets:
Argentina, Australia, Cyprus, India, Canada, Costa Rica, Malaysia, the Republic of South Africa,
Uruguay.
ANTI-CRISIS STRATEGY
In the opinion of the Management Board the Q2 of the current year was one of the worst quarters for
the lighting sector since the crisis in 2001-2003. Taking into consideration present situation on the
market and appearing signals of the economic growth in the investment sector, autumn of this year
should bring stabilization. The potential of further market growth is still limited by difficulties in access
to bank financing.
Current evaluation of the Company’s situation despite the stagnation on the market allows for
cautious optimism. First positive symptoms of implemented changes and new marketing strategies are
appearing. Intensive activities in the sector of modernization of lighting installations resulted in first
revenues from the area of street, industrial and school lighting. In the nearest future the Company will
put emphasis on further development in this sphere of its activities. Information regarding portfolio
of future orders to be finalized in the next months show possibility of growth of Group’s sales
in the Q3 and Q4 of 2009.
According to the Management Board’s evaluation ES-SYSTEM Capital Group is in a very good
financial condition. The status of free cash at the end of the first half of 2009 amounted to PLN 20,19
mln. Liquidity ratios are at the level higher than considered safe. The level of the overall and own
capital indebtedness is low.
Additional information:
Anna Przyczyna
Administrative Office of ES-SYSTEM S.A.
Tel. +48 (12) 295 80 39
e-mail: [email protected]
ES-SYSTEM S.A. is the largest Polish company in the lighting sector in the section of professional lighting technology for constructions: general,
architectural, residential, industrial, specialist and exterior. The Company forms specialized Capital Group with its own three production plants.
The Group determines direction of the branch’s development in the areas of innovatory technological solutions, energy saving and design. For the
last few years ES-SYSTEM has been recording a double digit increase in income along with distinct improvement of profitability ratios at the same
time. Development strategy of the Group assumes strengthening the position of the national leader in the sector and dynamic increase in export
sales on the EU market and other highly developed countries.
www.essystem.pl
[email protected]
ES-SYSTEM S.A. z siedzibą w Krakowie, ul. Przemysłowa 2, 30-701 Kraków wpisaną przez Sąd Rejonowy dla Krakowa – Śródmieścia w Krakowie Wydział XI Gospodarczy KRS
do Rejestru Przedsiębiorców Krajowego Rejestru Sądowego pod numerem 0000113760, o numerze NIP 679-25-51-640 i numerze REGON 351610904, o kapitale akcyjnym
14.145.000, 21 zł (w całości wpłaconym), o zarządzie w składzie:
Prezes Zarządu – Bogusław Pilszczek, Wiceprezes Zarządu – Leszek Ciupiński, Wiceprezes Zarządu – Jacek Wysocki.
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