First time with over PLN 1 billion of TIM Group’s annual revenues. Plans provide for the expansion of the logistics centre

Over PLN 1.06 billion of consolidated (+19.6% y/y) and PLN 935.7 million (+17.2% y/y) of individual revenues from sales and EBITDA at the level of over PLN 80.4 and 51.5 million (+51.8% and +43.8% y/y), respectively – these further records are the best summary of the past year in the TIM Capital Group.  In 2020, for the first time, the revenues of 3LP SA exceeded PLN 100 million reaching the level of nearly PLN 115 million (+33% y/y) and in the IV quarter alone, more than half of the revenues from 3LP SA’s logistics services came from outside the TIM Group.  

The year 2020 was exceptional in a number of aspects. The outbreak of the SARS-CoV-2 coronavirus pandemic has been the reason the most important issue, in terms of business, was to maintain organizational efficiency and create the safest possible working conditions. 

– At TIM, where almost 100% of staff have switched to remote work, during the last year we maintained, and perhaps even increased, efficiency of the implemented processes and communication. In case of 3LP, such a change was not an option. Our logistics company, thanks to the implemented safety and employee responsibility procedures, remains fully operationally efficient, continuously since the outbreak of the pandemic – emphasizes Krzysztof Folta, President of the Management Board of TIM SA. 

This exceptional mobilization allowed, in 2020, to acquire and handle a record high number of customers who placed the highest number of orders in history (TIM received over 545 thousand of them through the online channel alone). These, in turn, translated into 1.08 million shipments (only to TIM customers as in 2020 the 3LP logistics centre released a total of over 4.34 million parcels). 

New customers open to e-commerce 

The share in revenues from online sales in TIM’s turnover, in 2020, remained virtually unchanged at the level of approx. 70%. Last year, TIM continued – as per the mid-term strategy for the years 2019-2021 – the development of alternative sales models such as hybrid marketplace and B2B2C. Thanks to the first one, the offer of the platform included, or significantly developed, such product categories as audio and video devices, household appliances, consumer electronics, computer accessories, hobbies or even health and tourism. 

– As a result, we were able to, fairly quickly and in an optimal manner as regards costs, offer our customers a record number of products with specific availability and clearly defined lead time. At the end of 2020 the warehouse offer included over 168 thousand unique indexes – emphasizes Piotr Nosal, Member of the Management Board and Commercial Director of TIM SA. 

The segment of photovoltaic solutions was developing dynamically. TIM started expansion of this offer already in 2019 facing the first edition of the program „Mój Prąd Initially, it was based on products offered through the hybrid marketplace, i.e. from the warehouses of third party suppliers. In 2020, it was expanded to offer the assortment from its own warehouse, i.e. the logistics centre operated by 3LP SA. As a result, a comprehensive product offer generating 3.6% of TIM SA revenues from sales was created. In 2021 and the coming years TIM assumes the share of the photovoltaic assortment in total revenues from sales to be at the level of at least 5%. 

Pro-sales activities carried out, basically remotely, by the sales network and intensive work on the optimization of’s perceptibility on the Internet have made the number of users of this e-commerce platform exceed 2020 million (2 million, 2.23 % y/y) for the first time in 9 and the number of sessions approached the record high 8.95 million (+8.8% million, y/y). The search for safe ways to do shopping in the pandemic era resulted in the increase of the share of people aged 55 and older in the age structure of users. The Group, which 7-8 years back was reluctant to accept the change of the business model and TIM’s turning to online channel, in 2020 already accounted for nearly a quarter of the total users (in 2019 it was less than 17%). 

– We attract new customers, including those who so far have been sceptical about shopping online. This is the effect of the pandemic, as also the consequence of the activities we have been implementing for eight years by running the platform – says Krzysztof Folta. – In my opinion this trend is going to continue not only due to the pandemic but also due to the change in shopping habits. This is confirmed by the results of a survey conducted in summer 2020 by McKinsey & Company on a sample of over 3600 companies from 11 countries. It shows that nine out of ten B2B decision makers expect the remote model to continue to operate in the long run, also after the pandemic is over In turn, PwC estimates that in 2020 e-commerce market in Poland increased by 35% and forecasts an average annual growth of 12% in the years 2021-2026. At TIM we want to grow at least at the same pace – adds Krzysztof Folta. 

TIM SA plans to further develop the platform by investing in technologies improving UX, extending and optimizing the offer and additional services for customers. Thanks to this, the company will increase the customer bases and, consequently, will maintain high dynamics of revenue increase. 

Financial target achieved 

Net profit of the TIM Group in 2020 was 89.8% higher than that achieved in 2019 (PLN 37.1 vs. 19.6 million). The Group’s EBITDA increased, as already mentioned, by 51.8% y/y. In TIM SA, net profit increased by 58.7% (to PLN 36 million) and EBITDA by 43.8% y/y (to PLN 51.5 million). 

–  Both, at the consolidated and individual level, the operating profitability improved abruptly, as was the case a year before. The increase in the scale of operations while maintaining cost discipline are the main factors that influenced the net result and EBITDA – comments Piotr Tokarczuk, Member of the Management Board and Financial Director of TIM SA. – It is also worth noting that the TIM Group, due to its very good liquidity situation, decided at the end of 2020 to repay lease liabilities in the amount of PLN 17.5 million before its maturity date, which will translate into over PLN 760 thousand of savings in financial costs in the year 2021 – he adds. 

The year 2020 brought the Group the revenues from the sale of logistics services higher by more than 55%. This is the effect of further development of 3LP SA and of the growing demand for logistics services for the e-commerce sector which lies in the field of expertise of this company. In the entire year, the share of customers from outside the TIM Group in the area of ​​logistics services was 47% as compared to 39.1% in 2019 

–  3LP currently manages almost 75 square meters of logistics space, of which 50 thousand has been occupied by the logistics centre in Siechnice near Wrocław with its registered office located there. The rest is located in the Wrocław East Logistics Park in Wojkowice on the A4 highway – enumerates Piotr Tokarczuk. – 3LP’s development strategy assumes extension of the facility in Siechnice by another warehouse hall with the area of ​​approx. 25 thousand square meters, equipped with the state-of-the-art warehouse automation, as also a launch of branches in other regions of Poland – he adds. 

Responsible business in the times of pandemic

Management report on the operations of the TIM Capital Group for the year 2020 has, for the third time, taken the form of an integrated report and contains a wide range of non-financial data prepared in accordance with the guidelines of the international standard Global Reporting Initiative (GRI Standards). The year 2020 was the second year of TIM pro’s responsible business strategy. 

– We continued the activities initiated in 2019, however, we could not remain indifferent to the pandemic situation. In spring, together with other companies and individuals, we supported the Wrocław COVID-19 hospital and during the Christmas period we organized the Santas’ TIM campaign. We have decided to provide real, financial support for local foundations and institutions instead of printing calendars and buying Christmas gifts for customers. The customers themselves have helped with the choice A total of PLN 221 thousand went to 17 organizations from all over Poland, largely thanks to the commitment of our suppliers – says Krzysztof Folta. – Also our employees focused their attention to institutions and organizations in need of special support during the pandemic by submitting their applications in subsequent editions of the grant program – he adds. 

Santas’ TIM and the grant program are two of TIM’s twelve activities within the area of ​​responsible business and sustainable development which were included in the 19 edition of the “Responsible Business in Poland. Good Practices” report published by the Responsible Development Forum on 15 April 2021. A year ago, the publishing house included eight practices reported by TIM SA, whereas in TIM’s debut two years ago – three.