Year 2017 in the TIM Group: record-breaking turnover of PLN719.2 million, more and more clients of the logistics company

In the past year, the sales revenue of the TIM Capital Group increased by 7.8% YOY, exceeding PLN 700 m for the first time in the history. The increase in turnover of TIM SA was significant, too (6.6%) – it amounted to over PLN655.7 million. The online channel earned 71% of that amount. The sale of logistics services provided by 3LP SA to customers outside GK TIM is growing dynamically.

The higher revenue from sales in TIM SA is the effect of intense sale-promoting actions, making the range of the products offered more attractive as well as of the higher number of customers, including loyal ones and those engaged in regular purchases.

“TIM offers its regular customers attractive discounts and very often the best prices in Poland. In addition, we constantly analyze the sale level of individual products to improve the offer in such product groups which enjoy the greatest interest and generate higher margin, and to possibly resign of the products with the weakest rotation. The effectiveness of our actions is confirmed by the increase in the profitability of gross sales by one percentage point on one hand, and on the other hand – by more than 8% increase in the number of key customers,”  says Krzysztof Folta, the President of the Management Board of TIM SA. Those are the customers whose purchases exceeded PLN1500 per month in the last 12 months.

However, it is worth noting that the share of cables and wires in the revenue from sales is decreasing year by year. In 2017 that group of products earned PLN 215,7 m, i.e. 2.7% less than in 2016. That resulted from purposeful actions on the part of TIM SA. Cables and wires are sensitive to downturns in the construction market, from which TIM is getting gradually independent in recent years and, in addition, they have lower margins than those that are earned by other product groups. At the same time, the sale of specialty wires and cables used in industry and especially in maintenance is growing. It allows for the use of 24/7 bulk breaking for an individual customer and generates a higher level of margin.

Lower individual profit

In 2017, TIM SA achieved sales result of 701 thousand (compared to PLN3.07 m in 2016), PLN 1.28 million of operating profit (PLN8.2 million in 2016), almost PLN1.1 million gross profit (PLN7.94 million in 2016) and PLN 732 thousand net profit (PLN 5.67 million in 2016).

The result on sales achieved by TIM, higher by 2.8 million, was the most influenced by impairment losses and the liquidation of inventories as well as by PLN7.5 million higher costs of logistic services resulting from the dynamic growth of the sales volume. “The profit on the remaining operations that is much lower than in 2016 (PLN 577 thousand vs. 5.13 million) results from a one-off transaction of sale of the company’s property in Wroclaw in 2016,” explains Peter Tokarczuk, a Member of the Management Board and Chief Financial Officer of TIM SA.

Almost 100-percent increase in the sales of services

In 2017, the TIM Capital Group recorded PLN 3.84 million net loss compared to PLN1.67 million net profit in 2016.

“The financial result was most significantly influenced by the net loss recorded by 3LP SA due to the fact that the potential of the logistics centre in Siechnice near Wrocław has not been fully used so far,” says Piotr Tokarczuk.

However, last year was a period of really dynamic development of 3LP SA. The company’s revenue increased up to over PLN 60 million and was earned both from the sale of logistics services to the TIM Capital Group and from the acquisition of subsequent external business partners, representing both industry and the services sector. They include one of the largest e-sellers of tires and car accessories in Poland and Europe as well as an international online distributor of dietary supplements which sends orders from Siechnice to 12 countries of the European Union. The share of customers from outside the TIM Group in the company revenue amounted to 12.06%.

‘We expect that 3LP is going to achieve full operational capability in the middle of 2018. In the near future, the share of revenues from services provided for customers outside the TIM Capital Group will increase up to 25-30%. Our long-term goal is for 3LP SA to achieve 50% of revenues from services provided to customers outside the Group, ” declares Krzysztof Folta.

The reasons for optimism

We would like to remind you that, as follows from preliminary estimates, quarter I of 2018 was the second best quarter in terms of revenues from the net sales of goods and services directly related to sales in the entire 30-year-long history of TIM SA.

The company’s turnover exceeded PLN 76.7 million and was almost 20% higher than in the corresponding period of 2017. Online sales throughout the entire first quarter of 2018 earned over PLN 123,88 m, which means 16.6% growth in relation to the first three months of 2017.