The year 2016 in the TIM Group: record turnover, the first profit on sales in TIM SA since 2014
In the past year, for the first time in the history of TIM SA and the TIM Group, the sales revenues exceeded PLN 600 m (PLN 614.8 and 666.2 m). TIM – despite the decrease in the production and assembly production – earned PLN 8.2 m of operational profit and PLN 5.7 m of net profit.
The turnover of TIM SA and the group increased by 14.9% and 15.7%, respectively. Almost 70% of the sales revenue gained by TIM in 2016 came from the online channel.
The breakthrough year
The result after 2016 is undoubtedly a huge success of the unique hybrid sales model of TIM SA deployed in 2013. The unique combination of competence of the experienced traders with the continually perfected TIM.pl online platform allowed us to achieve the above-average increases, while the construction and assembly production dropped last year by more than 14%,” comments Krzysztof Folta, the President of the Management Board of TIM SA.
Although the positive effects of the business model change could be seen earlier, it was the past year that brought a real breakthrough. TIM SA, for the first time since 2014, achieved profit on sales (close to PLN 3.1 million). The operating profit of the company increased last year to PLN 8.2 million (by 16.4% compared to 2015), while the net profit to PLN 5.7 million (+8.2% YOY).
Launching of a new company
The operating results and net results of the TIM Capital Group that are lower than last year (decrease by 47.5% and 66.1% to 3.6 million and PLN1.7 million, respectively) result from launching of 3LP SA, the new entity within the Group, operating since July 1, 2016. The company provides logistics services for the benefit of the entire TIM Capital Group and for external companies. As with any new business ventures, at the beginning of its activities it caused loss – PLN 4.6 m on EBIT level and PLN 2.3 m on EBITDA level. “The objective of the 3LP SA Management Board in the year 2017 is a positive result on EBITDA level,” says Krzysztof Folta, who is also the Chairman of the Supervisory Board of 3LP SA.
Along with the increase in turnover, there are more and more new customers of TIM.pl. That carries the risk of acquiring customers less reliable financially. However, the restrictive and secure policy applied by TIM SA for years with regard to the limits of credit granting has resulted in the lowest level of receivables that are more than 30 days overdue in the nearly 30-year history of the company in proportion to the total receivables (only 0.89% in December 2016).
“It is also due to the change of our business model. The characteristics of the sale through the e-commerce channel include the increased number of transactions paid for online, just after the order is placed, as well as a smaller balance and more frequent purchases compared with traditional sale. And that translates into more timely payments from customers and increased security in terms of timely inflow of receivables, ” explains Krzysztof Folta.