ES-SYSTEM Capital Group reported financial results for Q3 2012, with net revenues decreasing 3.15% year-over-year to PLN 116.3 million. Net profit decreased 97.46% to PLN 233,000, and EBIT decreased 93.15% to PLN 739,000. Domestic sales decreased slightly by 0.17% due to market conditions, while export sales decreased more at 12.93% due to delays in large project completions. Operating profit and net profit decreased significantly in Q3 2012 compared to prior year. While the company optimized costs, overall operational costs increased 8.48% cumulatively, pressuring profits. The company aims to maximize Q4 2012 profits and
2. ES-SYSTEM Capital Group – financial data, status as of September 30, 2012
NET REVENUES from sales: PLN 116 327 k – decrease by 3.15% yoy
NET PROFIT: PLN 233 k – decrease by 97.46% yoy
EBIT: PLN 739 k – decrease by 93.15% yoy
Return on operational activities: 0.64%, in comparison with 8.99% in the same period
of the previous year
ES-SYSTEMLIGHT IMPRESSIONS
of the previous year
Return on net sale: 0.20% in comparison with 7.65% in the same period of the
previous year
Status of CASH at the end of the period: PLN 14 728 k – decrease by PLN 2 812 k
yoy
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3. ES-SYSTEM – stable revenues of the Group despite of decrease on
market
29 571
38 866
45 409
48 457
33 776
36 462
49 874
33 776
36 462
49 874 49 549
34 485
38 073
43 769
10 000
20 000
30 000
40 000
50 000
+
14.22
%
-
6.19%
+
9.83%
+
2.25%
+
2.10%
+
4.42%
-
12.24
%
ES-SYSTEMLIGHT IMPRESSIONS
0
10 000
I Q 10/11 II Q10/11 III Q 10/11 IV Q 10/11 I Q 11/12 II Q 11/12 III Q 11/12
• Revenues from sales of ES-SYSTEM Group in Q3 2012 decreased by 12.24% yoy, to the level
PLN 43.8 M.
• Cumulatively, at the end of September of the current year revenues were lower by 3.15% yoy and
amounted to PLN 116.3 M.
• Generated revenues are the result of:
– maintaining share in the domestic market despite decreases in the branch,
– lower export sale due to a delay in completion of a few projects.
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4. Domestic sale
• In Q3 2012 the Group realized domestic sale at the level PLN 35.5 M, meaning a decrease
by 6.6% yoy.
• In Q1–Q3 2012 the domestic sale decreased by a symbolic 0.17% yoy to the level PLN
91.9 M:
- Despite worsening market conditions the ES-SYSTEM Group maintained its share in the
domestic sale market
ES-SYSTEMLIGHT IMPRESSIONS
• In Q1-Q3 2012 increases in outdoor lighting sector (more than 20% yoy) and emergency
lighting sector (more than 5% yoy).
• Significant increase by 50% yoy in LED lighting sector (in Q3).
• At the end of September of the current year the value of domestic orders increased by 63%
yoy, allowing to assume sale increase in Q4 2012.
• With maintaining assumed schedules of projects completion lesser sale in Q3 of the
current year should be partially made up for in Q4 2012.
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5. EXPORT – postponement of completion deadlines, perspectives for the
next quarters
ES-SYSTEMLIGHT IMPRESSIONS
• In Q3 of the current year the export sale amounted to PLN 8.2 M, that is a decrease by 30.4%
yoy.
• Cumulatively, at the end of September export decreased by 12.93% to the level PLN 24.4 M
– The main reason for sales slowdown was a lack of large projects such as shopping centers,
which in Q3 2011 considerably increased the result of the export sale. Currently the
Company is completing 3 such projects but work schedule was altered due to the situation
on markets. Completion of those projects is planned for 2013.
• In the period Q1-Q3 2012 the biggest percentage increase of sales was recorded on the markets:
Dutch, Russian and Czech. In the value presentation the Russian market is the export leader.
- Significant slowdown of sales is observed on the EU markets.
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6. Operating result
8 631
2 000
3 000
4 000
5 000
6 000
7 000
8 000
-
-
144.12
-
92.48
%
ES-SYSTEMLIGHT IMPRESSIONS
1 394
769
-615
705 649
-1 000
0
1 000
2 000
6666
8.32%
Q1 11/12
144.12
%
Q2 11/12 Q3 11/12
• After 3 quarters the operating profit decreased by 93.15% yoy to the level PLN 739 k in comparison
with PLN 10 794 k.
• EBITDA after Q3 amounted to PLN 6 548 k.
• EBITDA margin at the end of Q3 amounted to 5.6%.
• Cumulatively, at the end of September profitability EBIT was at the level 0.64% in comparison with
8.99% yoy.
• Decrease of the Group’s profits is a derivative of a decrease of gross profit from sales and an
increase of operational costs.
7. Net result
7 844
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
-
170.25
%
+
120.91
%
-
94.77
%
ES-SYSTEMLIGHT IMPRESSIONS
1 079
263
-758
581 410
-1000
0
1 000
7777
Q1 11/12 Q2 11/12 Q3 11/12
• In Q3 of the current year the Group recorded the net profit in the amount PLN 410 k that is 94.77%
decrease yoy
• Net profitability was 0.94%
• Cumulatively, at the end of September the net profit amounted to PLN 233 k in comparison with PLN
9 186 k yoy and was lower by 97.46% yoy
• Cumulatively, net sales profitability was at the level 0.20% in comparison with 7.65% yoy
8. ZYSKI pod presją kosztów i sytuacji w branży
Decrease of the Group’s profits in the current year is a derivative of the increase of
operational costs
Operational costs of the Group increased cumulatively by 8.48% to the level PLN
39.3 M
The optimization program, introduced in 2012, brought intended effects in a form of
limited scale of increases of the Group’s costs:
ES-SYSTEMLIGHT IMPRESSIONS
limited scale of increases of the Group’s costs:
– in Q1 administrative and sales costs increased by 19.3% yoy,
– in Q2 increased by 12.9% yoy
– and in Q3 decreased by 4.05% yoy
Cumulatively at the end of June of the current year costs’ increase was at the level of
16%, at the end of September of the current year increase only by 8.48%
Management Board does not assume further significant increase of costs in Q4 2012
8888
9. ES-SYSTEM Capital Group – perspectives of Q4 2012
• Maximization of profits will be the goal for Q4 of the current year
• Completion of projects started in H1 2012 should have a positive influence on the
result in the whole 2012
• Considering costs increase and sustaining margin pressure working out a result in
2012 at the level of 2011 will not be possible in the current situation of the sector
ES-SYSTEMLIGHT IMPRESSIONS
2012 at the level of 2011 will not be possible in the current situation of the sector
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10. ES-SYSTEM Capital Group – perspectives in 2013
• H1 2013 will bring worsening of the sector’s economic situation in Poland and abroad and further
margin pressure. Signals of market stabilization may appear not until the second half of the year.
• Considering a difficult situation in the sector the Company will concentrate on maximization of
sales increase on selected markets and in selected assortment groups.
• Within realization of the development strategy the Company plans development of the product
offer and further expansion on the wholesale market, and at the same time maintaining sales in
the investment sector. H2 2013 should bring the first financial results of those sale actions.
• H1 2013 will be also dedicated to building ES-SYSTEM’s position on selected export markets.
Effect of those strategic operations in export should be noticeable by the end of 2013.
ES-SYSTEMLIGHT IMPRESSIONS
Effect of those strategic operations in export should be noticeable by the end of 2013.
• We hope to enter 2012 with the value of orders’ portfolio by 20% higher than at the beginning of
2012.
• In relations with uncertainty in the sector after Q3 of the current year the, a full evaluation of the
Capital Group’s prospects in 2013 will be possible at the turn of 2012.
• The year 2013 should bring stabilization of results but according to the Group’s strategic
guidelines, a distinct impulse of the sales growth of the ES-SYSTEM Group should take place in
the years 2014-2015.
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