The growth dynamics of the results of the largest IT and consumer electronics distributor in Poland and the CEE region is accelerating.  The AB Group has been growing faster than the market thanks to its strategic preparation for accelerating digitalisation trends and its strong e-commerce footprint and leading position in two of the fastest growing geographic markets in Europe in 2020 – Poland and the Czech Republic.  In the calendar year 2020, AB Group’s revenues approached PLN 12 billion, and net profit reached PLN 100 million.  These are absolute record figures.

Financial highlights:

The Lower Silesia-based AB Group recorded over PLN 4.2 billion in revenues in the second quarter of its 2020/2021 financial year (October-December 2020, the fourth quarter of the calendar year 2020).  EBITDA (PLN 70 million) increased by almost 78%, and net profit (PLN 53 million) almost doubled.  Achieving such spectacular growth in profit is a result not only of a dynamic increase in the scale of AB Group’s business, but also a significant improvement in profitability of sales (+0.44 pp on the EBITDA level, +0.42 pp on the net level).

The AB Group has become an e-commerce company, we strongly rely on new technologies in every aspect of our business.  At the same time, we have built sustainable competitive advantages through a high level of automation of commercial transactions and logistics processes.  We have achieved a leading position in e-commerce, as well as cloud platforms.  We also use artificial intelligence to optimise our offer and increase the profitability of sales, both for ourselves and for our customers,” says Andrzej Przybyło, CEO of the AB Group.

„Thanks to tools using machine learning and business intelligence systems, we have increased the efficiency of the sales department and are optimising procurement and our commercial offer.  In just over one year, we have increased the daily percentage of commodity indices sold from 20% to over 33%, and we have attracted new customers and established ourselves as a market leader.  We have the potential to further increase margins by further optimising processes as well as by leveraging the scale of operations.  Increasing it will in turn be the result of our market advantages and the dynamics of the market itself.  We can see that in our region, and especially in Poland, the catching up of electronics has only just begun.  That is why we look to the future with optimism,” adds Zbigniew Mądry, Member of the Board, COO at the AB Group.

The latest Social Changes survey shows that only one-fourth of people in Poland have purchased at least one electronic device due to the accelerated digitalisation of life in the pandemic era.  At the same time, the infrastructure backlog is enormous.  This is well illustrated by the long-term gap in IT spending per capita.  In Poland it was still USD 107 in 2019; Poland, the Czech Republic and Slovakia combined USD 122, while the average in Western Europe was USD 187 and still rising.  In 2020, the average of Poland, the Czech Republic and Slovakia rose to USD 148, and in Western Europe to USD 204.  Research firm Gartner indicates that global spending on IT hardware will grow at a double-digit rate of more than USD 52 billion this year, exceeding USD 705 billion.  All the more so – having a completely different starting point than the largest developed markets such as the US or Western Europe – Poland and the region should continue to grow faster, catching up on many years of backlog.  Remote working, remote learning, remote handling of official business or remote medical services require further investment in IT, both on the part of end-users and of businesses and public administrations.  Online sales have also been growing very dynamically in the region – in Poland we are talking about a dynamic of +35% for 2020 with the threshold of PLN 80 billion exceeded, of which the „electronics and media” assortment was responsible for almost a quarter.

The AB Group is prepared to handle further growth in demand in the CEE region, including its home country of Poland – both operationally and in terms of financial strength.  We are favoured by the growth in demand for electronics, the growth of the e-commerce market and the macroeconomy.  In view of the high-profit dynamics, we take into account sharing business success with our shareholders.  Of course, everything will be decided by the shareholders at the end of the year during the General Meeting approving the 2020/2021 financial year, which ends on 30 June,” points out Grzegorz Ochędzan, Member of the Board, CFO in the AB Group.

It is worth noting the highest efficiency in the industry, which is expressed by the lowest cost-to-income ratio (SG&A for 2020 was only 2.2%).  Following the increase in the scale of operations, the value of networking capital naturally increased, but despite this, operating cash flows in 2020 were PLN +83.2 million.  Moreover, the AB Group recorded net debt at the end of December by 20% lower than a year earlier, which is at a low, safe level (net debt to LTM EBITDA ratio below 1.5).

Since the end of the first quarter of 2020, there has been a market boom in laptops, smartphones or gaming assortment.  The increased demand also applies to data storage and network equipment devices, among others.  There is a natural increase in sales of software subscriptions in the cloud, and the AB Competence Centre has trained over 6,000 people on numerous webinars (3 times more y/y).  It is also worth noting the advanced projects of the VAD segment – the area grew by 78% in AB, more than twice as fast as the market.

As part of the national fight against COVID-19, the AB Group launched the #AByrazem campaign, with over 100 people operationally involved and nearly 1,000 pieces of various equipment going to those in need.  As part of #AByrazem, AB S.A. has acquired and financed respirators for two hospitals in Wrocław.  It has also donated toys and accessories for children and food items to needy institutions.  In addition, together with Lenovo and Motorola, the AB Group donated computer and telecommunications equipment, and with such partners as Sharp, Whirlpool, Gorenje, Toshiba, Brita, Megabajt, Winix, the AB Group donated household appliances, required for the necessary change in the mode of work of medics (including washing machines, refrigerators and cookers) to numerous facilities across Poland.  #AByrazem continues to work and support the fight against the coronavirus pandemic in the wake of further identified needs.

The #AByrazem action was honoured with a special award for CSR activities at the IT Reseller gala.  The AB Group team also achieved a historic quadruple victory – in addition, AB was awarded the title of a distributor of the year, Patrycja Gawarecka was chosen the best sales and marketing director, and Zbigniew Mądry – AB S.A.’s member of the board for commercial matters – was honoured with the title of industry personality.

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The AB Group, as the only Polish company, is among the 8 largest IT distributors and providers of e-commerce solutions in Europe.  It is a strong number 1 in Poland and Central and Eastern Europe. It offers the widest product portfolio on the market, including the world’s largest high-tech manufacturers such as Apple, Microsoft, HP Inc.,  Hewlett Packard Enterprise (HPE), Lenovo, Samsung or Dell – to over 16,000 retail partners. It is a leading provider of cloud and value-added distribution (VAD) services.  It is also developing the distribution of household appliances/RTV and toys, already being one of the leading distributors in that sphere in Poland.  The company has the best logistics facilities and the best business efficiency in the industry.

AB Group manages its own TB, Optimus and Triline brands and its own franchise networks Alsen (Poland), Comfor (Czech Republic and Slovakia), Premio (Czech Republic) and Triline (Czech Republic), as well as Optimus (integrators – Poland), Kakto (household appliances/RTV – Poland), Digimax (mobile and smart home solutions – Czech Republic and Slovakia) and Wyspa Szkrabów (toys – Poland).  With over 1,900 retail outlets, it is the largest industry franchise network in the CEE region. Since 2016 AB S.A. has been listed on the main floor of the Warsaw Stock Exchange. For more information about the AB Group, please visit www.ab.pl.