Press Release

25 February 2011, 18:03

Ergis Group after Q4 2010- systematic increase in sales



The Ergis Group achieved its strategic goal for 2010 and recorded a marked increase in sales in that period. In consequence, revenue for the whole year 2010 reached the level of almost PLN 600 million, which means an increase by over 8.6% as compared to 2009. The strong increase in sales was achieved primarily due to dynamics of the Polish market. The Group’s net profit after four quarters amounted to PLN 9.96 million.

Key events:

   Revenue of the ERGIS Group after four quarters of 2010 increased by more than 8.6%, and amounted to PLN 597 million. Only in the fourth quarter of 2010 the Group’s value of sales increased by almost 14% as compared to the value generated in the analogous period of 2009, which was mainly the effect of strong increase in revenue of Ergis-Eurofilms S.A.

­    In total, after four quarters of 2010, the sales on the Polish market increased by 19% up to PLN 294.5 million as compared to PLN 247 million in the previous year. On the other hand, the sales on foreign markets amounted to PLN 302.5 million and achieved the level of 2009, despite a decrease in the average EUR exchange rate by approx. 8.5%, which occurred in that period, thus overcoming the downward trend of preceding quarters.

­   Ergis-Eurofilms S.A. pursues the project of creating a new packaging film manufacturing plant in Wąbrzeźno. The value of the investment is estimated at approx. PLN 22 million. The Company makes preparations for relocation of a part of means for rigid film manufacturing from MKF Folien GmbH.


Financial results of the ERGIS Group after four quarters of 2010 are presented in the table below:


PLN '000

Q1-Q4 2009

Q1-Q4 2010










Operating profit








Net profit





PLN '000

31 Dec. 2009

31 Dec. 2010







The results in 2009, to which the results for 2010 are compared, were record-breaking at the level of realised margins, EBITDA and operating profit. In its notes to the 2009 results, the Company advised of the very high unlikelihood of repeating such results in successive years.


In the fourth quarter of 2010, the macroeconomic environment and immediate market environment remained factors adversely affecting the Group’s results. The prices of all basic raw materials were higher than in 2009, i.e.:

-        PVC – prices higher by 15%

-        DOP – prices higher by 65%

-        PET – prices higher by 42%

-        LLDPE – prices higher by 25%

Although PVC prices have ceased to grow and stabilised at a level similar to that from the previous quarter and the fourth quarter of 2009, still the level is regarded as rather high.

In 2010 the Group observed considerable difficulties in transferring an increase in prices of raw materials onto the prices of its products. The situation slightly improved towards the end of 2010.


In 2010 the ERGIS Group implemented the strategy of developing sales in anticipation of the improvement in the prices of strategic raw materials. The Group has achieved its goal and for the first time in its history has recorded sales revenue amounting to nearly PLN 600 million.

The value of sales in the fourth quarter of 2010 increased by 4% compared to the analogous period of 2009 with the EUR exchange rate being lower (about PLN 4 in Q4 2010 compared to PLN 4.16 in Q4 2009). Cumulatively, sales of the Group were also higher than last year – by 8.6% and amounted to PLN 597 million. It was primarily Ergis-Eurofilms S.A. that was responsible for the growth in sales. Quarterly sales dynamics in the Company accounted for as much as 18.3%, and cumulatively – for 15.9%.

High dynamics of sales of the stretch film is worth noting (a 13.2% increase in quantity, a 28.13% increase in value). As far as greenstrap is concerned, a quantitative increase in sales by 32.9% was recorded. High sales dynamics was also seen in printed packaging, resulting from investments made at Flexergis in 2008-2009. The market of PVC compounds for cable industry has been gradually recovering. The sales of moulded products continue to be unsatisfactory. Negative dynamics of sales of laminates and PET films is partially apparent, as it is affected by a decrease in the EUR exchange rate. As far as PET films are concerned, the value of sales in EUR remained at the last year’s level.


The increase in sales experienced by Ergis-Eurofilms S.A. translated into good results of the Company and the Group. The level of EBITDA generated by the Group in Q4 2010 amounted to PLN 4.96 million which means a minimal increase in comparison with Q4 2009 (PLN 4.89 million.) The level of EBITDA generated by Ergis-Eurofilms S.A. amounted to PLN 4.45 million with PLN 2.91 million generated in the analogous period of 2009. Since profit was generated by an increase in sales, margin ratios remain only slightly lower than those of last year.

The annual performance as regards EBITDA is very optimistic for Ergis-Eurofilms S.A., which achieved EBITDA in the amount of PLN 29.17 million. This is only slightly lower than the amount of PLN 30.91 million generated in 2009 when the market and raw materials situation was exceptionally favourable. After four quarters the level of EBITDA recorded by the whole Group amounted to PLN 36.05 million compared to PLN 55.31 million recorded in the record-breaking 2009. This was related to a deterioration of the situation of the German companies. The Company’s Management Board believes that in 2010 Ergis-Eurofilms S.A. created the foundations to significantly enhance profitability and the volume of profit in the future, as market conditions, and primarily the raw materials situation, are likely to improve.


It is also worth noting that the Group’s indebtedness decreased by 22.5% from PLN 142 million at the end of 2009 to PLN 110 million at the end of 2010.

Tadeusz Nowicki, President of the Management Board of ERGIS-EUROFILMS commented: “In 2010 our goal was to increase sales despite unfavourable market trends. The results were really satisfactory: for the first time in the history of our Group, we managed to achieve a record-breaking level of annual revenue on sales amounting to nearly PLN 600 million. This can be largely credited to the increase on the Polish market, but I would also like to highlight that we have also managed to overcome a downward trend in foreign sales. The Group’s main goal for this year is to enhance its profitability, despite increasing prices of raw materials and strengthening of the zloty in 2010, as well as to increase production capacities in its most successful segments.”


 ERGIS Group is Poland’s largest as well as Central and Eastern Europe's leading manufacturer of PVC products: films, compounds, wallpapers, wall panelling, and windowsills. The Company's offer includes films laminated with a layer of another film, paper, woven and non-woven fabric, etc. printed films, insulation films, packaging films (including films for packaging pharmaceuticals), bus floor covering, compounds for cable manufacturing, interior and exterior wall panels, expansion joint tapes, artificial leather, coated fabrics, tablecloths, and vinyl and paper wallpapers. Additionally, the Group is Poland's largest manufacturer of stretch films (tensile films, used e.g. for wrapping loads on pallets, PVC thermoshrink films (used, e.g. for food packaging) and PET and PP tapes (used for fastening medium heavy and heavy products and loads), as well as a distributor of polypropylene BOPP film (used mainly for packaging manufacturing). The Group manufactures also packaging film for food industry (laminates, single layer films, rigid films, flexible films, ‘skin’ films), as well as flexible packaging films and multi-layer laminates.


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