Last year, the Group generated a consolidated net profit of PLN 62.7 million, i.e. 1.2% lower than in the previous year. The EBITDA increased to PLN 106.8 million (+ 8.6% y/y), although higher selling costs and general administrative expenses contributed to the EBITDA margin, which amounted to 14.9% (decrease by 1.9% y/y). The gross margin also increased slightly to 42.4% – mainly due to the continuing demand for paints and varnishes from the premium and average price segments both in Poland, Hungary and Ukraine.
Record-breaking expenditure on investments
Capital expenditure within the Group’s companies in 2019 reached a record level of PLN 196.4 million, which denotes an increase by 165.7% compared to the previous year. The largest Śnieżka’s investment was the acquisition of shares in Poli-Farbe, which allowed it to promptly take a significant position on the Hungarian market.
Concurrently, high financial expenditure was allocated to developing manufacturing facilities in Poland – including the boost of manufacturing capacity, improvement of product quality and optimization of production costs. Last year the work was related to modernization (including automation) and expansion of the colour paints production line at the facility in Lubzina and white paints in Pustków. The Group’s parent company, Fabryka Farb i Lakierów Śnieżka SA, also implemented the key stages arranged as part of the digital transformation (Change IT project), connected with sales management and maintaining customer relations.
At the end of 2019, the net debt/EBITDA ratio for the Śnieżka Group was 1.71. After completing the current investment cycle, the Group’s debt is to be gradually reduced to a conservative level of 1x EBITDA.
Further development with the coronavirus in the background
The Group’s strategy for the coming years assumes concentration on its four key markets (Poland, Hungary, Ukraine, Belarus). FFiL Śnieżka is the leader on the market of paints and varnishes in Poland and desires to hold this position. Intensive measures are also to take place to improve the profitability of the Hungarian company Poli-Farbe Vegyipari Kft.