AB significantly increases its profits and profitability

AB SA, a leading IT, household appliances and audio/video device distributor, reports a year-to-year net profit increase of 72%, up to PLN 10.63 M, in the third quarter of FY 2013/2014. Profits for the last three quarters have already surpassed last year’s Group results. AB has also significantly improved its profitability index.

The results for the first three quarters show that the Group’s net profitability has increased by one third and is now above 1%. It is so because of i.a. a strong sales increase in high-margin sectors, mostly the company’s own brands, as well as household appliances, audio/video devices and e-commerce. The Group has also increased its EBITDA margin and reduced debt.

Construction works of a new AB SA warehouse in Magnice were launched in March. New WMS and warehouse automation solutions implemented at the site will create one of the most technologically advanced systems in the region and will provide AB with a strong market advantage in the e-commerce, which is one of the company’s priorities.

– E-commerce is our strategic development direction. That is why we continue to invest in this channel. We are a new generation distributor who offers automatic order handling services, including a vast number of products, to its partners. We provide a complete set of tools that are necessary to run an online business. For us personally, e-commerce is also a means of increasing profitability and providing cross-selling services. We believe that the sector offers many opportunities and growth possibilities – says Andrzej Przybyło, President of the Management Board, AB SA.

Yearly revenues of AB’s own brands are increasing at a double-digit rate. The number of clients who use their products also shows a year-to-year increase of over 12%. AB plans to introduce new product categories under the brand name TB between Q2 and Q3 of 2014.

As for the IT industry, AB has recently signed two major distribution agreements covering Poland with Dell and Western Digital. Continued market share growth in the household appliances and audio/video device sector is expected in the following quarters. AB aims at 10% market share in this sector in Poland. Rekman, a toy distributor owned by AB, also presents an enormous potential. Its EBITDA margin varies from 4 to 6% and is over twice as high as for the rest of the Group. ATC Computers is growing at a much faster rate than the market (a year-to-year growth of 19%). It continues to consolidate the market. The company is currently introducing digital home and telco solutions (telephones and accessories).

Due to the increasing results and sound financial condition AB is seriously considering dividend payment. The final decision regarding this matter will be made upon the end of the financial year. – The dividend may amount to 20% of this year’s profit, provided that no negative macroeconomic changes occur. In the following years, we also want to share profits with our shareholders, but in a way that will allow us to maintain a high growth rate of the Group. – adds Andrzej Przybyło, Chairman of the Management Board, AB SA.