Summary of 2017
In 2017, Mangata Holding performed in relation to its subsidiaries corporate functions in the area of strategic and financial management as well as the tasks of further integration of subsidiaries in the Group. The Holding also started activities to establish a common personnel policy for the Holding. It continued projects in the area of optimization and improvement of efficiency in operational processes, aimed at further improvement of margins of conducted businesses and better focus on customer needs.
In 2017, the Holding carried out further reorganization activities. In the fittings and castings segment, the process of merging two entities was finalized, as a result of which the production of fittings was concentrated in one economic entity (Zetkama Sp. z o.o.) with the maintenance of two production locations (Ścinawka Średnia and Sosnowiec). As part of the reorganization of the merged companies, synergies are achieved, among others, in the areas of management, production and sales. In the non-production area, as a result of merger (Zetkama Nieruchomości Sp. z o.o. and Siskin 5 Sp. z o.o. S.K.A.), one entity was established – Zetkama Nieruchomości Sp. z o.o. dealing in management of non-productive property in the field of property sales and rental of production, storage and office space.
In the past year, a significant change in the shareholding took place, the previous majority owner consolidated the share package of Mangata Holding SA, concentrating shares in one entity – Capital MBO spółka akcyjna sp.k., which became the owner of 66% of the company’s shares. The owners have maintained the intention of long-term investment. As part of building a further development strategy and responding to shareholders’ expectations, the Management Board of the Holding introduced a dividend policy as part of ensuring a balance between the amount of dividend paid to the Company’s shareholders and the Company’s ability to use its resources to conduct a sustainable and effective policy of further development. The dividend policy assumes that in a period of not less than 5 years, the Management Board of Mangata Holding S.A. will recommend to the General Meeting the payment of part of the profit generated by the Company in subsequent financial years. The Management Board maintained the intention of recommending the 2017 dividend during the result conference.
In terms of the holding business areas, in 2017 the market situation varied in individual segments as well as key markets. In 2017, the Group experienced a significant increase in the purchase prices of the main raw materials and basic production materials in all business segments. The lower level of investment and production in the construction and assembly industry in Poland in the first half of 2017 translated into the lack of realization of the expected sales revenues in the segment of industrial fittings and fasteners. Postponements in the implementation of projects in the automotive industry had an impact on lower than expected sales results in the segment of subassemblies for the automotive industry. Significantly lower than planned results of the Techmadex S.A. subsidiary were caused by lower than expected revenues from realized contracts. In 2017, similarly to other companies in Poland, the Mangata Holding Group recorded an unfavorable situation on the labor market and a gradual increase in wages.
In 2017, the MANGATA Holding Group generated revenues of 617,482 TPLN and this is result better by 9% compared to 2016 (568,251 TPLN). Satisfactory and stable increase in revenues from sales was recorded by the Holding in the automotive segment, where thanks to the implementation of new projects and favorable economic conditions, it successfully used the market potential. Sales of this segment increased by 15% and at the end of 2017 represented 54% of the total sales of the Group. The industrial fittings segment achieved sales comparable to 2016. The increase in sales was recorded in the area of own fittings and goods. The lower sales of castings compared to the plan resulted from technical problems with the existing foundry infrastructure. Realization of some of the orders was postponed to 2018. The fittings segment achieved higher sales than in 2016 on export markets (mainly on the Russian market), which allowed to balance lower domestic sales. In the field of industrial automation, where Techmadex operates, parts of the contracts planned for 2017 were not realized. The fasteners segment recorded higher sales to companies operating in the railway sector and lower in the mining industry. For 2018, an increase in sales resulting from plans for the modernization of railway tracts is assumed. Total segment sales was at a comparable level of yoy.
The Group’s EBITDA for 2017 amounted to 82,746 TPLN. The net profit for 2017 amounted to 41,078 TPLN. Profitability measured by the EBITDA ratio was achieved at 13.4%, and net profitability at 6.7%.
In 2017, the Group implemented investments at the level of approximately 64 million PLN. They concerned modernization and reconstruction as well as the purchase of new machining centers, a new furnace for heat treatment and production lines for clients from the automotive industry. In 2016-2017, expenditures related to the introduction of modern ERP systems were also incurred. For 2018, the Group companies have planned investments at the level of 75 million PLN. Key directions of investments assume automation and robotization of production lines, expansion of the R&D department’s potential, continuous optimization of production processes and increase in the quality of the products offered.
In 2018 the goal of the Holding will be further development. The increase in the value of the Group will take place through organic growth using the existing production potential of companies, additional development projects, especially in the automotive segment, integration of entities forming the Group and acquisitions.
Mangata Holding S.A. has published forecasts for 2018.
|Revenues from sales||694.4 million PLN|
|EBITDA||98.3 million PLN|
|Net profit||51.4 million PLN|
with the following assumptions:
- maintaining favorable economic conditions and implementation of new development projects in the automotive segment;
- favorable economic conditions in the area of fittings and fasteners (railway industry) on the domestic market and maintaining favorable economic situation on foreign markets; and
annual average EUR exchange rate at PLN 4.20.
The company estimates that the first quarter is in line with the budget, in the opinion of the Management Board the annual forecast presented is not at risk.