The Management Board of Grupa Kęty S.A. hereby informs that the Supervisory Board, at its meeting held on 1 February 2018, approved of the Company’s and the Group’s budget for 2018. In relation to the presentation of the forecast of consolidated financial results for 2018 and the presentation of comparative information, the Management Board also publishes preliminary financial results for 2017.
The Management Board assumes that 2018 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:
In 2018, consolidated sales revenue will amount to 2.9 billion PLN and will be higher by 9% than the revenue generated in 2017. The Management Board is projecting that consolidated operating profit will amount to 317 million PLN, i.e. it will be higher than in the previous year by 5%. EBITDA will amount to 448 million PLN, i.e. it will increase by 6%. The expected financing activities balance in 2016 will amount to -22 million PLN and it is based solely on the calculation of loan costs. In addition, when calculating the net profit for 2018, the Company took account of 11 million PLN of a deferred tax asset related to business activities in the Special Economic Zone (in 2017, it was ca. 5 million PLN). As a result, consolidated net profit will amount to 253 million PLN.
The table below shows the forecast of basic consolidated financial figures for 2018 in million PLN as compared to preliminary results for 2017:
| 2017 | 2018 | change | |
| Sales revenue | 2,646 mill. PLN | 2,893 mill. PLN | +9% |
| EBIT | 303 mill. PLN | 317 mill. PLN | +5% |
| EBITDA | 423 mill. PLN | 448 mill. PLN | +6% |
| Net profit | 242 mill. PLN | 253 mill. PLN | +5% |
| Capital expenditure | 184 mill. PLN | 335.0 mill. PLN*** |
The above forecasts were prepared on the basis of the following macroeconomic ratios:
Financing: According to the Company’s estimates, at the end of 2018, the interest-related debt due to bank loans and lease will amount to ca. 848 million PLN and, taking into account estimated cash, net debt will amount to 746 million PLN. The increase in debt will be related to the continuation of the investment programme (335 million PLN), assumed dividend payment (as per the dividend policy) and the needs related to the financing of working capital. The Management Board assumes that all financial needs will be covered with the financial resources generated during the year and the financing from interest.
Potential acquisitions: The forecasts for 2018 do not take into account any effects of potential acquisition projects. Nevertheless, the Management Board takes into account two directions of potential acquisitions within existing segments and the establishment of a new segment:
Conclusion:
The Group’s business segments took great advantage of very good business conditions on the market, using their production capacities fully. Even such a demanding project as the launch of the production of polypropylene film with the capacity of over 25,000 tonnes p.a., within 12 months since its launch has been using almost 100% of its production capacity. The Group has accomplished record sales and operating results, despite the strong cost pressure. The Management Board assumes that, in 2018, the growths will continue and the Group companies, due to newly-launched investment projects (two extrusion presses, a new packaging production plant and ca. 10-20 thousand square meters of new production and storage space), will build their growth potential for 2019 and 2020. The Management Board would like to highlight that, in accordance with the strategy in 2020, the Group intends to generate 3.4 billion PLN of sales revenue, 360 million PLN of operating profit and 514 million PLN of EBITDA. Projected economic values presented in this forecast reflect the implementation of the strategy (planned for a given year), which is to lead eventually to a further increase in the Company’s value.
The Company will assess the possibility of accomplishing the projected results and make any appropriate adjustments on a quarterly basis.
