Summary of financial results for Q4 2015:

(*) Values corrected for the logistics centre migration cost (transitional)

In the period from October to December 2015 (Q2 of the FY 2015/2016), AB Group, the largest distributor of IT solutions in Central and Eastern Europe has noted over 2.35 billion PLN in revenues (+13% year-to-year). The EBIDTA score, after correcting for the costs of migrating the company to the new logistics centre in Magnice (which is an event of a transitional nature) has increased by approximately 9.0% y/y, to 40.1 million PLN. Consequently, the corrected net profit has increased by 2.2% to 26.1 million PLN. It is also worth remembering about the high comparative basis, resulting from the positive effects of the implementation of our long-term development strategy of the AB Group.

“The financial situation of the AB Group after the end of the quarter enables further expansion of the business. We are taking advantage of the favourable macroeconomic situation in the Czech Republic, where our subsidiary, ATC, favourably finances stock increase with debt, which will ensure higher sales in the subsequent period”, said Grzegorz Ochędzan, CFO at AB S.A.

“The results for Q4 2015 are very positive. In Poland, we were the number one for the entire 2015. The situation is similar in Czech Republic and in Slovakia, where our business grew by over 30% in the past quarter”, said Andrzej Przybyło, Chairman of the Board of AB S.A.

The safety, which is a part of the AB Group development strategy, combined with the Group’s operational excellence resulted in winning the trust of the largest players in the worldwide IT market.

“Once again I can say that the AB Group is the strongest entity on the IT distribution market in CEE from both the financial and operational standpoint. This is why we are chosen as a regional partner in prestigious contracts, such as in the case of Apple and Microsoft. The Group also has unique opportunities to develop mutually beneficial large-scale cooperation with global companies such as HP or Lenovo”, said Andrzej Przybyło.

The constant increase in added value for the integrators, delivered by the AB Group in the area of advanced IT solutions, a team of experienced and certified engineers, as well as project consulting results in time savings for the clients, higher efficiency in project realisation and the possibility to create a comprehensive offer, also in the area of advanced products, complemented by training services. As a result, after the intensive development period of the enterprise channel, the market share of the AB Group in the segment increased by 44% in 2015, compared year to year. The model of AB Group’s operation in this segment of the market is based on supporting the trading partners and relying on a large number of projects with smaller value, thus ensuring business stability, instead of bidding on large tenders directly, like many competitors do, which significantly contributes to the high variability of the achieved results.

The AB Group is also able to dynamically develop its operations in new distribution areas, where the company already established its structures and gained the necessary know-how.

“We are especially excited about the success of the distributor of toys and children’s accessories – Rekman. After the acquisition and restructuring, we are now starting a new phase, in which the first results of the introduced changes will start being visible. In Q4 2015, the company has noted a spectacular increase in revenue and profit. Of course, the distribution of this product range is not that significant in the overall revenue of the AB Group; however, in the upcoming reporting periods it will surely be more visible in the published figures”, said Andrzej Przybyło.

“The examples of Rekman and ATC confirm the strategic efficiency of the AB Group in the area of acquisitions. When we decide to finalise a transaction, we achieve our goals”, he added.

Since the summer of 2015, the new Distribution Centre in Magnice is an asset, which enables further business development of the AB Group. The solutions used in the warehouse make it one of the most innovative logistics centres in Europe. Currently, the logistics operations are migrated from the current warehouse in Wrocław, in March-April 2016 the doubling of operations, introduced as a safety measure, will slowly come to an end.

“Then we will decide about the future of the warehouse in Wrocław, taking into consideration both purchase offers, as well as the opportunity to conduct logistics operations for other entities. Our knowledge and skills in the field of logistics are high, which may in turn cause it to become a significant part of our business, partially because of the warehouse in Magnice, fully adapted to the state-of-the-art e-commerce solutions. We currently serve 108 on-line stores in 22 countries. In 2015 we noted a year-to-year increase of 69% in sales. The trend of the increasing significance of e-commerce is indisputable, and our know-how, automated operations, as well as the opportunity to offer widespread new generation services, such as dropshipping, make us a leading player in the market”, said Andrzej Przybyło.

Looking forward to the upcoming months, the AB Group is fully prepared for the growth stimulus on the Polish market, connected with the first payments connected with the Family 500+ government programme payouts, announced for the 2nd quarter of 2016. This is made even more important because of the fact that the AB Group has effective sales channels, including its own franchise network.

“Looking at the sheer scale of the project – 23 billion PLN in subsidies for 2.7 million Polish families annually – and the fact that 25% of them are declaring their will to purchase additional consumer electronics, we are expecting an increase in sales and an opportunity to further expand our product portfolio. As of now, we offer over 60 000 products for home and the family, including computers, photography equipment, telecommunications equipment, lighting, office supplies, tools, consumer electronics, small and large household appliances, toys, children’s accessories, feeding and hygiene products, products for children’s room, school supplies and electronics for kids”, said Chairman of the Board of AB S.A., Andrzej Przybyło.

After the first six months of the 2015/2016 fiscal year, the AB Group declares its will to continue the policy of sharing the profits with the shareholders.

“We have high profitability indicators, our debt is safe, we successfully manage the cash conversion cycle, and our cash position is strong. We effectively hedge foreign currency risk, which does not have any results on our margins. This allows us to take advantage of the opportunities given to us by the market, and we have space for investing in the development and growth, as well as for paying dividends”, said Grzegorz Ochędzan.

Since the beginning of its existence – for over 25 years – the AB Group has listened to the needs of its clients and creates innovative solutions – including in the e-commerce sector. We also focus on a sustainable, multidirectional growth with strong emphasis put on generating added value in the distribution, as well as safety inscribed within the development strategy. It is worth noting that the results of the sustainable growth of AB S.A are appreciated by a group of experts and practitioners. In January 2016, the Chairman of the Board of AB S.A., Andrzej Przybyło received the prestigious Vector 2015 award from Employers of Poland organisation for the creation of the largest IT distribution company in Central and Eastern Europe, as well as for achieving financial success.