III quarter of 2020 in TIM Group: record high turnover, net profit higher by 39.9% and EBITDA by 26.9% [PRESENTATION, VIDEO]
The first nine months of 2020 ended with PLN 761.4 million of consolidated and PLN 671.9 million of individual revenues from sales, which means an increase by 17.6% and 15.2% respectively as compared to the corresponding period of 2019. This is the highest level in TIM’s history. The company was established exactly 33 years ago, on 25 November 1987. Also other indicators were record high, both on an individual and consolidated level and all this with high, double-digit dynamics.
Once again increased the share of subsidiaries in the Group’s total revenues (up to 11.75%). – This is largely due to the contribution of 3LP which specializes in logistics for the recently dynamically growing e-commerce sector. The growing demand for services from external customers, i.e. from outside the TIM Group, makes 3LP increase its warehouse space also in Wojkowice near Wrocław, which is outside the Siechnice headquarters – says Krzysztof Folta, the President of the Management Board of TIM SA.
Against the Industry Trends
In two months of the third quarter of 2020 TIM’s turnover significantly exceeded PLN 80 million, whereas July turned out to be the best in history up until October 2020 when another sales record was broken. Meanwhile, the data on the industry of electrical engineering wholesalers (reported by them to SHE – the Association of Employers of Electrical Engineering Distribution) show that most part of this sector in the III quarter of 2020 generated lower revenues than in the corresponding period of the previous year. According to the same source, also the cumulative sales dynamics after the three quarters of 2020 reached negative values.
– We are, against this data, even more distinguished from the competition – notes Piotr Nosal, Member of the Management Board and Commercial Director of TIM SA. – On the one hand, we owe it to our business model. E-commerce fits perfectly within the principles of social distancing and TIM customers, if necessary, can still count on professional support and advice on the part of our sales representatives working remotely. On the other hand, in line with our medium-term strategy, we are constantly developing our product offer and new sales models. They include passive dropshipping involving sending the ordered goods to the customer directly from the supplier’s warehouse, bypassing the 3LP logistics centre. It already generates a significant sales volume. We assume that the value of the sales in alternative models in the coming periods will have an increasing share in the total sales – he adds.
Expanding the offer means both expanding it with comprehensive proposals in the area of traditional electrotechnical assortment, as also with the introduction of completely new types of products to be sold and addressed to business customers. An example of the first of the activities is a comprehensive photovoltaic offer. Its share in TIM’s September turnover was 4.5%, whereas for the nine months of 2020 almost 4% and this value has been growing systematically in recent months. As part of implementation of utterly new assortment on the TIM.pl platform appeared such product categories as gaming, personal electronic devices, home electronics and household appliances, as also bathroom and toilet. The result is the widest product offer on the market – at the end of III quarter of 2020 the permanent offer of TIM.pl included over 106 thousand unique products (including the dropshipping offer).
Stable Increases
Such an impressive quarter in terms of turnover has had a positive impact on financial indicators. TIM’s net profit for three quarters of 2020 amounted to over PLN 21.5 million and was by 18% higher than that achieved in the corresponding period of 2019. The consolidated net profit increased every year by 39.9%, to PLN 19.9 million. A similar dynamics (+38.8% y/y) was demonstrated by the operating profit (over PLN 34.1 million) and the Group’s EBITDA (PLN 50.5 million, +26.9% y/y).
– It is worth emphasizing that two-digit, significant growth dynamics of financial results can be observed both at individual and consolidated level. Additionally, we generate significant positive cash flows and the liquidity situation is very good. This allows us to continue our attractive dividend policy while maintaining the ability to finance further dynamic development of the TIM Capital Group – notes Piotr Tokarczuk, Member of the Management Board and Financial Director of TIM SA.