PL

The forecast of financial results for 2016 and preliminary results for 2015

The Management Board of Grupa Kęty S.A. hereby informs that the Supervisory Board, at its meeting held on 10 February 2016, approved of the Company’s and of the Capital Group’s budget for 2016. In relation to the presentation, on 11 February 2015, of the forecast of financial results for 2016, and the presentation of comparable data, the Management Board also publishes preliminary financial results for 2015.

The Management Board assumes that 2016 will be another year of the growth of the Group’s sales and profits. On the basis of adopted assumption concerning the prices of raw materials and exchange rates, particular segments forecast the following sales revenue:

  • Extruded Products Segment – 860 million PLN (+5%)
  • Aluminium Systems Segment − 930 million PLN (+9%)
  • Flexible Packaging Segment – 470 million PLN (+8%)
  • Other segments – 170 million PLN (-1%)

Consolidated sales revenue will amount to 2,145 million PLN and will be ca. 6% higher than the revenue generated in 2015.  The Management Board is projecting that consolidated operating profit will amount to 250 million PLN, i.e. it will be higher than in the previous year by 5%. EBITDA (operating profit less depreciation and amortisation) will amount to 360 million PLN, i.e. it will increase by 9%. The expected financing activities balance in 2016 will amount to -16.5 million PLN and it is based solely on the calculation of loan costs. In addition, when calculating the net profit for 2016, the Company took account of 50 million PLN of a deferred income tax asset related to the business activities in the Special Economic Zone. As a result, consolidated net profit will amount to 245 million PLN.

The table below shows the forecast of basic consolidated financial figures for 2016 in million PLN as compared to preliminary results for 2015:

2015* 2016**  change
Sales revenue PLN 2,027 mln  PLN 2,145 mln  + 6%
EBIT PLN 239 mln PLN 250 mln 5%
EBITDA PLN 331 mln PLN 360 mln 9%
Net profit PLN 207 mln PLN 245 mln 18%
Investment expenses PLN 205 mln   PLN 359 mln***
*preliminary results before the audit by a statutory auditor
** forecast
*** including PLN 36 million of shifted payments from investment projects 2015

The above forecasts were prepared on the basis of the following macroeconomic ratios:

  • aluminium price – 1,600 USD/ton
  • average USD exchange rate − 4.05 PLN
  • average EUR exchange rate − 4.30 PLN
  • EUR/USD relation − 1.06
  • GDP growth – 3.6%

Financing: According to the Company’s estimates, at the end of 2016, the interest-related debt due to bank loans and lease will amount to ca. 564 million PLN, so it will be higher by ca. 250 million PLN than at the end of 2015, mainly due to the record-level investment programme (359 million PLN), assumed dividend payment (as per the dividend policy) and the needs related to the financing of working capital. The Management Board expects that credit lines held by the companies of the Group along with cash generated during the year satisfy the needs for the financing of the assumed expenditure.

Dividend policy: Despite the record level of investments, the the Management Board upholds its decision to increase the dividend payment ratio to 60% of consolidated net profit.

Potential acquisitions: The forecasts for 2016 do not take into account any effects of potential acquisition projects. However, the Management Board is considering two directions of potential acquisitions:

  • In the Extruded Products Segment – they may be related to the development of existing competences or the acquisitions of new competences in the area of profiles processing and the production of components based on aluminium profiles. Potential projects may be related to entities with sales revenue of up to 50 million EUR.
  • In the Aluminium Systems Segment – they may be related to the geographic or product-related development on new markets. Potential projects may be related to entities with sales revenue of up to 20 million EUR.

Conclusion:

The year 2016 will be the second year of the implementation of the new strategy for 2015-2020, approved of by the Supervisory Board of Grupa Kęty S.A. at the beginning of 2015. The projected economic values presented in this forecast reflect the implementation (planned for a given year) of the strategy, which will lead eventually to a significant increase in the Company’s capitalization.

The Company will assess the possibility of accomplishing the forecasted results and make any appropriate adjustments on a quarterly basis.