The year 2018 in TIM Group: record-high turnover, increase in net profit by 1295%, the highest consolidated EBITDA in history

Over PLN 830.2 million of revenue from sales (+15.4% y/y) and almost PLN 15.1 million net profit (as compared to PLN 3.8 million loss) was recorded in 2018 by TIM Capital Group. TIM SA, responsible for 90.5% of the Group’s revenues, also closed the year with the highest turnover in history (PLN 751.5 million, +14.6% y/y). The Group’s revenues from the sale of logistics services provided by 3LP SA increased by as much as 251% y/y, to PLN 14.4 million.

Intensive pro-sales activities combined with the strengths that constitute TIM’s competitive advantage have brought another record of the level of turnover of both the company and the entire Group.

– We win against other players on the market primarily thanks to the wide range of products, constantly adapted to the customers’ expectations and its availability. At the end of 2018, our warehouse offer, which is constantly available in the logistics centre and shipped to the customer within 24 hours of placing the order, included over 68 thousand unique products – emphasizes Krzysztof Folta, the President of the Management Board of TIM SA.

We have reasons to be satisfied

Growing turnover is accompanied by the increase in the number of TIM customers. In 2018, over 30,000 customers made purchases at TIM, by 10.5% more than a year earlier. The number of TIM key customers, i.e. those whose purchases over the last 12 months were worth over PLN 1500 thousand increased by 9.8% y/y to almost 11.2 thousand.

Almost 71% of TIM’s revenues (and over 70% of the revenues of the entire Group) was generated by online sales.

– Google Analytics data shows that in 2018 was included in the top five hundred Polish online platforms. The number of sessions in our e-shop exceeded 8 million and the average session time was 8 minutes and 10 seconds. Both ratios increased by 7% as compared to 2017 – accounts Piotr Nosal, Commercial Director, and as of 1 April 2019 also a Board Member of TIM SA. – If to all this we add the fact that the sales through on a business day in 2018 was almost 17% higher than that of 2017, we do have reasons to be satisfied. We thank our customers for their trust – adds Piotr Nosal.

Profitable year

In 2018 TIM SA recorded a net profit of PLN 10.2 million, which means an increase of almost 1295% as compared to 2017 (PLN 732). This is primarily due to record-high revenues from sales. However, it is also worth paying attention to the increase in operating costs (to PLN 736.7 million, + 12.5% y/y) which, however, was by 2.1 pp. lower than the growth of revenues.

TIM Capital Group closed the year 2018 with a net profit of almost PLN 15.1 million as compared to PLN 3.8 million a year before. The operating profit reached almost PLN 19.9 million (vs PLN 3.2 million in 2017). At the EBITDA level (operating profit increased by depreciation costs) the Group achieved the highest result ever – over PLN 31 million, by 328% more than in 2017.

– Such a significant improvement in operating profit is primarily the effect of the improvement of profitability of TIM’s core business and of the logistics company – 3LP SA. The Group’s net result was also affected by the positive result on other operating activities related to the sale of real estate by 3LP – explains Piotr Tokarczuk, Board Member and Financial Director of TIM SA.

Historic year of 3LP

The 3LP SA’s sale to customers outside the TIM Group (excluding rents) increased to almost PLN 15.6 million, which means an increase by as much as 317%. In the area of logistics services the share of customers outside the TIM Capital Group was 27.5%. This indicator means that one of the main strategic goals, which assumed achievement of the share in revenues from external customers at the level of 25-30% in 2018, had been achieved. Total revenues of 3LP SA in 2018 amounted to PLN 74.2 million, over 23% more than in 2017.

2018 was a breakthrough year for the logistics company of TIM Group. For the first time 3LP recorded positive financial results at all levels of the income statement. It also generated positive cash flows from operating activities in the amount of over PLN 6 million.

The past year was the time of changes for other subsidiaries of TIM. The company Sun Electro Sp. z o.o. was put into liquidation. In December 2018 TIM withdrew completely from Elit SA and increased its involvement to 100% in the Bydgoszcz company SA (in the TIM Group since 2011) which reported record-high revenues from sales (PLN 61.3 million) and PLN 123 thousand net profit against PLN 664 thousand loss in 2017.

First integrated report

Management report on the operations of TIM Capital Group for the year 2018 has, for the first time in history, the form of an integrated report, which means that it has been the first time TIM Group is reporting non-financial data on such a large scale.

– We decided to take this step, although the Group is not yet subject to the legal obligation to publish non-financial information – emphasizes Barbara Matkowska-Włosek, Marketing Director of TIM SA. – This is also largely the result of the first in the history of TIM consultation meeting with stakeholders conducted in line with the principles of the AA1000SES standard in the form of a dialogue session. Its course confirmed that stakeholders are deeply interested in our approach to the principles of responsible business. During the meeting, our business and social partners provided us with their recommendations regarding, among other things, the scope of the reported non-financial information. At the same time we conducted a survey on our social commitment among all employees – adds Barbara Matkowska-Włosek.

TIM Group’s integrated report has been prepared in accordance with the guidelines of the international non-financial reporting standard – Global Reporting Initiative (GRI Standards).