Ergis

Press Release

20 February 2014, 13:13

The Ergis Group after four quaters of 2013: Further sales growth and significant improvement of operating results

THE ERGIS GROUP AFTER FOUR QUARTERS OF 2013: FURTHER SALES GROWTH AND SIGNIFICANT IMPROVEMENT OF OPERATING RESULTS

 

After four quarters of 2013, the Ergis Group, a leader of plastics processing in Central and Eastern Europe, generated revenue in the amount of PLN 673.3 million (an increase of 6.4% compared to the previous year), operating profit of PLN 25.4 million (72.7% more than achieved after four quarters of 2012) and net profit of PLN 11.4 million (an increase by 54% compared to the previous year).

 

Growth in profitability is a result of achieving the expected sales volume of nanoErgis films, as well as increasing the sales volume and undertaking reorganizational measures with respect to the rigid films business, the production of which has been partly relocated from Berlin to Wąbrzeźno.

 

The Group is currently undertaking a major investment which consists in launching the second line for the production of nanoErgis in the Oława Plant by the end of the first quarter of 2014. This investment will cost approx. PLN 18 million. Its completion is scheduled for the end of the first quarter of 2014.

 

FINANCIAL RESULTS - DETAILS

 

The financial results of the ERGIS Group after four quarters of 2013 are presented in the table below:

 

in PLN '000

Q4 2013

Q4 2012

Change

4Qs 2013

4Qs 2012

Change

Revenue

153,251

149,469

+2.5%

673,309

633,073

+6.4%

Operating profit

2,017

1,835

+9.9%

25,366

14,685

+72.7%

EBITDA

7,147

7,043

+1.5%

46,535

35,352

+31.6%

Unrealised foreign exchange differences

707

1,305Xx

- 45.8%

-1,337

5,271

n/a

Net profit

2,167

85

+2,449.4%

11,353

7,359

+54.3%

 

The Ergis Group has achieved good financial results, both in the fourth quarter of 2013 and cumulatively after four quarters.

 

In the fourth quarter of 2013 the prices of the main strategic raw materials (PVC, DINP, LLDPE, PET) were slightly lower as compared to both the previous quarter and the same quarter of the previous year (only the price of LLDPE was slightly higher than in the fourth quarter of 2012). However, none of the prices of the raw materials decreased by more than 10%. Therefore, it can be said that during the fourth quarter of 2013 the situation with the raw materials was favourable. Throughout the whole year the prices of raw materials (with the exception of LLDPE) were stable.

 

The revenue generated by the Group for four quarters increased by 6.4% as compared to the result achieved in the previous year with a slightly higher (by 0.09%) average euro exchange rate.

 

Attention must be paid to an increase in industrial packaging by 20.3% resulting from higher sales of stretch films (by 23.6%) achieved due to development of the innovative 33-layer nanoErgis film. In turn, a better use of installed production capacity resulted in higher sales of printed packaging by 7.2%, and a gradual rebuilding of market position brought an increase in sales of rigid packaging films. A decrease in the sales of soft PVC films (by 3.1%) regards mainly products related to construction industry (veneer films and wallpaper base films). A drop in sales recorded in the “other sales” item (by 25.6%) is attributable to the Group’s withdrawal from the sales of panels and windowsills and discontinuation of production and distribution of wallpapers.

 

To sum up, the year 2013 was advantageous for the Group with regard to operating profitability. Operating profit, which increased by 72.7%, to PLN 25.4 million, and EBITDA, amounting to PLN 46.5 million compared to PLN 35.4 million in 2012 (up by 31.6%), stand at a significantly higher level.

 

Higher profitability of the packaging goods segment was recorded both by the Parent and its subsidiaries. The increase in profitability results from boosted sales volume, the undertaken reorganisation actions conducted mainly in the rigid films business, including the relocation of production means from Germany to Poland, as well as from the successful sales of the nanoErgis film.

 

Despite an adverse effect of unrealised exchange gains on the gross profit (in 2012 the exchange gains added to the gross profit by PLN 5.3 million, while in 2013 they were responsible for reducing the gross profit by PLN 1.4 million), it amounted to PLN 15.2 million compared to PLN 10.2 million a year before (increase by 49%). The net profit achieved PLN 11.4 million compared to PLN 7.4 million after four quarters of 2012 (up by 54.3%).

 

Tadeusz Nowicki, President of ERGIS-EUROFILMS: “It was a successful year, the year of good financial results. The visibly improved profitability of the Group is primarily attributable to an increase in sales volume and rearranging the rigid films business, which included a transfer of a part of the production from Berlin to Wąbrzeźno. The results were also under positive influence of the nanoERGIS films sales. Now we are focusing on launching the second line for the production of nanoERGIS films in our Oława plant.”

 

For more information, contact:

 

Małgorzata Kot, ERGIS-EUROFILMS S.A.

tel. 604 159 103, 604 159 159

e-mail: m.kot@ergis.eu

 

Magda Kołodziejczyk, M+G

tel. (22) 416 01 02, 501 16 88 07

e-mail: magda.kolodziejczyk@mplusg.com.pl

 

 

ADDITIONAL INFORMATION

 

The ERGIS Group is a leader in plastics processing in the Central and Eastern Europe. Out of its six manufacturing plants, four are situated in Poland and two in Germany. The Group’s profile includes manufacturing of packaging for food (films and PVC and PET-based barrier laminates, printed multilayer laminates) and industrial packaging (LLDPE stretch films and PET films). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro-insulating films and PVC compounds. In 2013 the Group’s revenue exceeded PLN 673 million.

 

Additional information on the Company is also available at www.ergis.eu

 

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