Śnieżka summarizes the 2021 season on the paints and varnishes market
The Śnieżka Group published the results for the Q3 of 2021, ending this year's renovation and construction season. The achieved results are lower than the year before, due to, inter alia, slightly lower demand for decorative products and unprecedented price increases of raw materials.
In the period between January and September 2021, the Śnieżka Group generated sales revenues in the amount of PLN 650.4 million, i.e. 4.7% lower than the year before. Sales in Poland in the first three quarters of this year amounted to PLN 434.3 million. It is only slightly less (-0.9%) than last year – that is, during the record-breaking season in which Poles were very eager to carry out renovations due to the closure of the economy and the transition of many companies to remote work.
However, the sales dynamics achieved by the Śnieżka Group on the Polish market is more favourable than for the entire market of paints and wood products, which has shrunk in terms of both value and volume compared to the previous year. The Group’s performance in Poland is the result of marketing and sales activities, the follow-up trend of selecting extravagant, better-quality products (higher sales of Magnat paints and wood products of the Vidaron brand) and a properly shaped pricing policy.
The Śnieżka Group also generated good sales results in Ukraine, where revenues (converted into PLN) after the first three quarters of 2021 amounted to PLN 62.7 million (+ 0.5% y/y). They would have been higher if it had not been for the lower UAH/PLN exchange rate year-on-year, which is used to convert the results obtained on the Ukrainian market. The overall performance of the season was mainly influenced by lower revenues in Hungary (PLN 117.0 million, -13.1% y/y) and Belarus (PLN 13.8 million, -29.4% y/y).
Another season with pandemic in the background
The renovation and construction season, which has come to an end recently, was different than the others. On the one hand, it was devoid of the main reason for storming DIY stores and the renovation boom, recorded particularly in May and June last year – i.e. the lockdowns introduced as a result of the fight against the COVID-19 pandemic. On the other hand, the postponed customer’s spending on other purposes, started to be carried out this year, affecting the purchase of renovation materials.
In turn, manufacturers have to struggle with additional costs related to the situation on the raw materials market. Especially in connection with the increase of the EUR/PLN exchange rate, which additionally increased the cost of purchasing raw materials used in production. The Group’s performance was also negatively affected by fluctuations and changes in exchange rates in which the Group’s contracts are settled, in particular the Ukrainian hryvnia (UAH) and the Belarusian ruble (BYN).
equently, in the first three quarters of 2021, the Śnieżka Group generated a consolidated net profit of PLN 64.3 million (-26.9% y/y), operating profit of PLN 76.6 million (-28.5% y/y) and EBITDA of PLN 103.4 million (-21.8% y/y). The net profit attributable to the shareholders of the parent company reached PLN 59.8 million (-25.7% y/y).
A very unusual season has just passed, including an unprecedented scale of increase in the prices of raw materials and packaging and a slightly lower demand for decorative products, which was the aftermath of last year's renovation boom. As regards the challenges we had to face, the Śnieżka Group’s performance for the first three quarters of 2021, also in comparison to the market, can be assessed positively.
Following the end of the so-called peak season, the Group is preparing for the next one. In 2022, the record-breaking investment cycle in the history of Śnieżka is to come to an end, during which the largest expenditure ever has been made and another is to take place in the next few quarters to finalize the new Logistics Centre in Zawada near Dębica. Its commissioning is scheduled for the first quarter of 2022.