Sniezka paint points out expanding Polish independent market distribution influences reults

Listed paint producer Sniezka pointed out that the expnansion of the distribution market on the independent market in Poland, among other, will influence the results in the coming quarters, Piotr Mikrut, Sniezka CEO told a press conference. Sniezka's EBITDA amounted to PLN 26.3 million (EUR 6.16 mln) in the first quarter of 2024 and the revenue amounted to PLN 172.3 million (EUR 40.35 mln).

"External factors, which will influence the group's results is expanding the distribution model on the independent market in Poland, growing the product offering in the existing sales channels and focus on the group's key markets," Piotr Mikrut, Sniezka's CEO said.

"The factors in the mid term perspective are also factors independent from the company, macroeonomic factors, first of all the GDP growth. I want to remind that we expect that approximately 85 percent of our products are bought for renovation purposes, with maximum 15 percent being new investments, both housing and public," he added.

The CEO pointed out that both wages and currency exchange rates will influence the group's results and the most important one is PLN appreciation. He added that inflation and interest rate levels, as well consumer sentiment will have an influence.

Mikrut pointed out that the war in Ukraine is an important factor for the group, with the market growing despite tough circumstances. In Ukraine the group noted a revenue increase compared to the previous year.

The sales on the Ukrainian market amounted PLN 18.9 million (EUR 4.43 mln), which is a 13.8 percent growth year on year. In Hungary, the revenues dropped by 14.8 percent year on year, amounting to PLN 23 million (EUR 5.39 mln).

Sniezka's EBITDA in the first quarter of 2024 amounted to PLN 26.3 million (EUR 6.16 mln) and revenues amounted to PLN 172.3 million (EUR 40.35 mln). The PAP Biznes consensus was for PLN 39.8 million (EUR 9.32 mln) EBITDA and PLN 211.7 million (EUR 49.57 mln) in revenue.

The parent unit's net profit for the first quarter of 2024 was PLN 9.9 million (EUR 2.32 mln) and EBIT was PLN 16.9 million (EUR 3.96 mln). Analysts had expected approximately PLN 20.4 million (EUR 4.78 mln) in net profit and PLN 30.2 million (EUR 7.07 mln) in EBIT.

As stated in the press release, the decline in results is a consequence of the strengthening of the PLN against the HUF and the UAH and the implementation of changes in the distribution model in the independent market in Poland.

It was pointed out that in the long term, however, the expansion of the distribution model is an important step in the group's further development and building its competitive advantages.

In addition to the decrease in sales, the group's profitability was impacted by a 21.2 percent year on year increase in general and administrative expenses and an 8.0 percent year on year increase in cost of sales.

The EBITDA margin in the first quarter of 2024 was 15.3 percent, a year on year decrease by 3.3 percent.

At the end of March 2024, the group's net debt to EBITDA ratio was 1.88, compared to 2.72 a year earlier.

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