The largest distributor of IT and consumer electronics in Poland and the CEE region, and now the seventh-largest company in the industry in Europe, will join the mWIG40 index of the Warsaw Stock Exchange (GPW) after the session on March 15. Currently, AB Group’s market capitalization stands at PLN 1.3 billion, and stock market analysts see significant potential for further stock price growth.

As part of the annual index review, AB S.A.’s shares (GPW: ABPL, ABE) will, effectively from Monday, March 18, join the group of the 60 most important companies on the Polish stock market, grouped within the WIG20 and mWIG40 indices. GPW Benchmark, the formal administrator of reference indices, considers both liquidity (trading volume) and market capitalization when determining the ranking list.

– This is another commitment for us to continue our work and achieve new goals. We will join the mWIG40 index alongside prominent Polish IT brands in the software segment, such as Comarch and Asseco Poland. We are recording record results, benefiting from being the distributor of choice for manufacturers and resellers, and our annual growth in scale over the past 20 years exceeds 16%. We are hungry for more – working every day, consistently implementing a long-term, safe development strategy, continually refining our operational efficiency, shaping the market, and listening to the needs of our largest regional base of 16,000 active customers, while also maintaining solid finances – says Andrzej Przybyło, CEO of AB S.A.

In Q1 of the 2023/2024 financial year (Q4 of the calendar year 2023), AB Group reported very strong financial results due to both sales growth and internal optimization. Consolidated revenues, adjusted for the impact of the weakening Czech koruna reported by the subsidiary ATC, exceeded PLN 5 billion for the first time in history. Thanks to maintaining the lowest industry SG&A cost ratio, further reduction of financial liabilities, decreased financial costs, and optimization of net working capital, AB Group achieved an increase in adjusted net profit to PLN 71.5 million in the last quarter. Over the last four quarters, in the calendar year 2023, AB Group’s revenues exceeded PLN 15.5 billion, EBITDA grew by over 11% year-on-year to PLN 306 million, gross profit exceeded PLN 203 million, and net profit rose to nearly PLN 162 million.

– Our return on invested capital remains above 18%, and the net debt to EBITDA ratio has dropped to a very low level of 0.6. We have plenty of financial space for growth, which is amplified by favorable macroeconomic trends and digital transformation – emphasizes Grzegorz Ochędzan, Vice President of Finance at AB S.A.

Research firm Gartner forecasts that global IT spending will exceed USD 5 trillion for the first time in 2024. Research firms Canalys and Counterpoint Research point to growing potential even in previously weaker categories like notebooks and desktops.

AB’s stock price has recently risen to around PLN 80, which still represents a book value level. Meanwhile, the price-to-earnings (P/E) ratio currently stands at 7, compared to more than twice the average value for companies in the mWIG40 index (around 15). Brokerage firms covering the company analytically (Ipopema Securities, DM BOŚ, and Trigon DM) recommend „buy,” and a comparative analysis of similar companies on foreign exchanges may suggest a two- to threefold potential for stock price growth.

AB Group has been sharing its success directly with investors for years, both through dividends and share buybacks. Among the resolutions for the upcoming General Meeting of Shareholders, scheduled for March 6, is a three-year authorization for the Management Board to conduct a buy-back program, with up to PLN 100 million allocated for this purpose. The proposed resolutions also include a dividend payment of PLN 31.65 million from last year’s profit, or PLN 2.00 per share, which is 60% higher than the previous year.

AB Group boasts a silver medal from EcoVadis, ranking among the top 9% of IT distributors in terms of ESG performance. It is also the most highly regarded business in the industry—having been named Distributor of the Year for the ninth consecutive time in the Context ChannelWatch 2023 survey, winning the IT Reseller IT Champions award for the seventh consecutive year, and receiving numerous other awards, including from global IT manufacturers.