2. 2
Light impressions
1. Market environment
2. Financial data
3. The most important events of the year 2013
4. Prospects of the year 2014
energyenergy savingsaving
4. Prospects of the year 2014
3. 3
Light impressionsES-SYSTEM Capital Group – financial data 2013
PLN 166.4 M – decrease by 1.7% yoy
PLN 4.5 M – increase by 3.3% yoy
PLN 4.7 M – decrease by 16.4% yoy
PLN 12.7 M – decrease by 4.5% yoy
NET REVENUES
NET PROFIT
EBIT
EBITDA
energyenergy savingsaving
PLN 12.7 M – decrease by 4.5% yoy
2.8% v. 3.3% yoy
2.7% v. 2.6% yoy
at the end of the period: PLN 21.5 M – increase by 47.28% yoy
Return on
operational activities
Status of CASH
Return on net sale
4. 4
Light impressionsThe lighting sector in comparison to the construction market
32,2
12,0
3,5
8,1 6,2
-5,1
-8,8
-5,0
-17,8
-3,6
-5,3
-16,1
-11,4
-18,5 -18,3
-5,2
-11,1
-4,8 -3,2 -2,9
5,8
I II III IV V VI VII VIII IX X XI XII
Changes in the construction and assembly output (yoy), 2012-2013 (in %)
energyenergy savingsaving
Dynamics of the construction and assembly output yoy (-12%):
Declines in the areas of: commercial and service buildings (-1.5%), hotels (-2.6%), public utility buildings
(-6.1%), office buildings (-9.7%), road construction (-30.9%), sports and leisure.
A decrease in the sales of leading operators in the wholesale market by about 3%.
The Lighting sector at the level of the year 2012.
-17,8
-24,8
-16,1 -18,5
-23,1
-27,5
-18,3
2012 2013
5. 5
Light impressions
34 485
38 073
43 769
52 996
34 779
36 197
42 010
53 431
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
55 000
Stable revenues, increase gross profit on sale
-
4.93%+
0.85%
-
4.02%
+
0.8%
energyenergy savingsaving
0
5 000
10 000
I Q 12/13 II Q 12/13 III Q 12/13 IV Q 12/13
Revenues at the level PLN 166,4 M what is a decrease by 1.7% yoy, a derivative of booking cash bonuses for
clients.
Due to the change in the documentation of cash bonuses for wholesale clients and recognizing them as
corrections in sales revenue instead of charging the cost of sales in the current year as in the corresponding
period before, the Group’s revenue includes a correction based on the aforementioned fact, amounting to
PLN 3.24 M. The revenue correction due to the above amounted to PLN 0.96 M in revenue in 2012.
Gross profit on sale amounted PLN 59.4 M, which is an increase by 1.1% yoy
Margin (in %) on total sale in 2013 was higher in comparison to the year 2012.
6. 6
Light impressionsSprzedaż w kraju zgodnie z planem
In 4Q 2013 the Group’s sale in the domestic market was at the level of PLN 39.5 M, which is a
decrease by 1.2% yoy – slightly lower than the results of the same period in 2012.
Accumulatively, domestic sales amounted PLN 130 M, which is a decrease by 1.4% yoy
The Group’s domestic sales in segments in 2013:
A decrease by 3.1% yoy in the architectural lighting segment, industrial lighting at a comparable level
(increase by 1.1%), outdoor lighting denoted a decrease by 12.1% (delays of street lighting
modernization projects funded by the NFOŚ SOWA program).
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Sales to the wholesale channel amounted to PLN 59.3 M, which constitutes 35.7% of the total sales –
the same level yoy
Significant, 26% increase in the emergency lighting sector – the result of new implementations,
mainly LED products, as well as obtained certificates.
Sales of luminaires with LED technology constitutes 14.9% of the total sales, in comparison
with 7.6% in 2012.
7. 7
Light impressionsExport sales under the pressure of recession in the EU
Sweden
20.5%
Germany
12.8%
Kuwait
France
3.0%
Denmark
2.8%
Other
24.7%
energyenergy savingsaving
In Q4, the Group’s export sales came in at the level of PLN 13.9 M, which presents an increase by 7.1% yoy.
A decrease during the whole of 2013 by 2.8% yoy – due to the slow recovery from the recession in the Western
European markets and organizational changes within the export department.
Sweden, Germany and Russia remain the Group’s main export markets.
The share of LED luminaires in export sales denoted an increase from 9.3% in 2012 to 15.9% in 2013
Most projects based on LED technology in Sweden, Germany, Austria, Czech Republic and the Netherlands.
Russia
12.3%
CzechRepublic
6.6%
Hungary
6.3%
Austria
4.2%
GreatBritain
3.6%
Kuwait
3.3%
8. 8
Light impressionsEBIT under the pressure of one-off events
-615
705 649
4 857
-429
1 107
2 409
1 592
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
+
57.02%
+
271.19
%
-
67.2%
energyenergy savingsaving
-615 -429
-1 000
-500
I Q 12/13 II Q 12/13 III Q 12/13 IVQ 12/13
In 2013, the Group’s operational profit amounted to PLN 4.7 M, which is a decrease by 16% yoy. Return on EBIT: 2.8%.
This was caused by the following:
A less satisfactory result in the 4th quarter.
Changes in the documentation method of cash bonuses for contractors and their growth yoy.
Increase in amortization by ca. PLN 0.3 M.
Creating reserves (for severance fees, liquidation of goods and materials, jeopardized receivables, warranty
repairs , retirement benefits, holiday leaves).
Financial activity in 2013 resulted in the improvement of the EBIT profit by PLN 0.3 M compared to PLN 0.5 M in 2012.
A decrease in the cost of sales and general and administrative expenses::
by 1% yoy and 7.7% yoy respectively
9. 9
Light impressionsHigher net profit, effective tax rate
-758
581 410
4 085
-212
1 259
2 088
1 323
0
500
1 000
1 500
2 000
2 500
+
116.70
%
+
409.3
%
-
67.6%
energyenergy savingsaving
-758
-1000
-500
I Q 12/13 II Q12/13 III Q12/13 IV Q12/13
The Group’s net profit in 2013 amounted to PLN 4.45 M (an increase by 3% yoy); return on net sales was
recorded at the level of 2.7% v. 2.6% yoy
Lowering the effective tax rate due to subsidiaries making profits (especially ES-SYSTEM NT operating in the
Special Economic Zone).
10. 10
Light impressionsImportant events in 2013 – optimization and restructuring of production
Strategy of optimization: merger of subsidiaries ES-SYSTEM Wilkasy and ES-SYSTEM
Rzeszów
Aims of the merger:
reduction of costs through the optimization of the use of assets in production processes
simplification and improvement of management efficiency
elimination of duplicate support functions
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elimination of duplicate support functions
concentration of the production on the newest and the most innovative LED technologies,
which are replacing traditional lighting solutions
11. 11
Light impressionsImportant events in 2013 – new offer: 100%LED
Currently, the ES-SYSTEM portfolio features
48 LED lighting systems for indoor and
outdoor applications, with tens of luminaire
versions in each system.
Among them are 20 new systems, which have
been included in the product offer along with
energyenergy savingsaving
been included in the product offer along with
the new 100% LED catalog, which was
released at the beginning of 2014.
12. 12
Light impressionsES-SYSTEM – prospects of domestic market for the year 2014
The implementation of new solutions in LED technology:
Further sales growth of luminaires with LED technology and other products is expected – downlights,
ceiling fixtures , linie świetlne, spotlights for mounting on rails.
Following the adopted strategy, there will be an increased emphasis on offering technologically sophisticated
lighting solutions enriched with control gear – for both indoor and outdoor applications.
It is expected that in 2014, the rate increase rate of the share of LED lighting in the total domestic turnover will
remain at the current level.
Acquiring new clients is currently in progress, especially in areas with the potential to increase market share,
energyenergy savingsaving
Acquiring new clients is currently in progress, especially in areas with the potential to increase market share,
like supermarkets, chain stores, as well as industry and healthcare facilities. .
Collaboration with distributional units such as wholesale chanins and shopping grouos will be continued.
13. 13
Light impressionsES-SYSTEM – prospects of export market for the year 2014
In line with the seasonal trends in investment realization, after very high sales in the last quarter of 2013, it
is to be expected that in the first quarter of 2014 that export sales will be reduced
A good prognostic for 2014: the number of submitted product bids and value of projects with ES-SYSTEM
luminaires listed in specifications is increasing.
In the Eastern Region: logistics centers are planned to be implemented in Russia. The plans for this segment
in 2014 include lighting 100 000 m2 of warehouse space with fluorescent lamps and LED lighting, as well as
implementing linear lighting systems in grocery store chains.
Lighting projects in office spaces in Moscow, Saint Petersburg and Kazan are also planned.
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Lighting projects in office spaces in Moscow, Saint Petersburg and Kazan are also planned.
A livening in Lithuania, Latvia and Estonia, where ES-SYSTEM is involved in numerious lighting projects of
sports, office and educational facilities.
In the Southern Region: due to the increasing demand for high standard commercial spaces in the Czech
Republic, Slovakia and Romania, coupled with the rapid development of the construction industry, the
demand for high quality LED lighting has also increased.
Four prestigious, large-scale industrial lighting projects are planned in the Czech and Slovak Republics,
i.e. several thousand LED luminaires are to be sold there.
14. 14
Light impressionsFrankfurt Fairs 2014
Light&Building - the most
important international fair for
the lighting industry
Exposition:
• Area of 169 square meters
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• Area of 169 square meters
• More than 70 luminaires
from 26 different systems
• Promotion of 20
completely new systems in
LED technology
15. 15
Light impressionsES-SYSTEM – 1Q 2014
In the first quarter of this year, we are observing a seasonal slowdown in the realization of investments and sales,
which will translate into the company’s first quarter results. A livening in the sector should incur in the
second quarter of this year.
As expected, there is a visible slowdown in architectural, industrial and outdoor lighting.
Growths have been noted in sales and orders pertaining to LED technology and emergency lighting for several
quarters in a row now.
energyenergy savingsaving
quarters in a row now.
The number of orders in the export market is growing, which confirms that making conceptual and organizational
changes in the export sales sector was a step in the right direction.