Action S.a. · GPW:ACT
Action — H1 2007/2008 Earnings Presentation
30 slides from Action's earnings presentation, Apr 10, 2008
Slide 1: Investing in logistics and IT: our competitive edge and key to success
Investing in logistics and IT our competitive edge and key to success 10 April 2008
Slide 2: Our Business
OUR BUSINESS The ACTION Group is a leader in IT products distribution in Poland (second largest market player) and a major manufacturer of computer hardware ACTION is the largest manufacturer and the primary server vendor in Poland The Company has been building its market position for 17 years ACTIO
Slide 3: ACTION as IT Distributor
ACTION AS IT DISTRIBUTOR ACTION distributes IT hardware products of over 250 manufacturers Company's business partners include a majority of industry leaders, such as Samsung, Microsoft, Sony, LG, Intel, Creative, Asus, AMD or Lenovo The Company addresses its offering to independent resellers, SME s
Slide 4: Sales Channels
SALES CHANNELS Distribution Corporate Sales Department Retail sales channel – ACTION Ukraina Retail sales channel – Sferis Online sales channel – A.pl 4
Slide 5: Sales Structure
SALES STRUCTURE Sales structure by gross sales generated: IT Components Dept Portable Equipment Dept Multimedia Dept Software Department Corporate Sales Dept Consumer Electronics Dept ActiveJet Department Advanced Technologies Dept Network Solutions Dept Other 5
Slide 6: Distribution Structure
DISTRIBUTION STRUCTURE By sales methods: Sales Corporate Sales Commercial Sales Sales Sales Export Department Sales Department Chains Department Department Department Department Department Department 6
Slide 7: Customers of ACTION
CUSTOMERS OF ACTION The Company has a base of 40,000 customers, 9,000 of whom buy from Action at least once per month Action exports its goods to 200 customers The Company is a supplier to most retail chains in Poland The Company is a partner to largest systems integrators on the public tender marke
Slide 8: Warehouse Facilities
WAREHOUSE FACILITIES Apart from the ACTION office buildings, the HQ location at Zamienie includes a huge warehouse complex used for order processing and constantly developed The warehouse base has just been expanded: at the end of 2007 another storage building was commissioned contributing an additi
Slide 9: Warehouse Performance
WAREHOUSE PERFORMANCE Distribution warehouse • Roller conveyor system • Conveyor speed – 0.7 m/sec., max. 1.2 m/sec. • currently 10,000 shipments dispatched daily • the maximum system capacity allows processing 15,000 shipments per day • a total of 16,500 price list items on offer • it only takes 25
Slide 10: ACTION Private Brands
ACTION PRIVATE BRANDS The ACTION Group has 2 private brands: servers, PCs consumables and office products, UPS units, batteries and chargers, power protectors, cables • At present the share of private branded products in Group's sales is approx, 10 % • ACTION assumes its increase to 15 % in financia
Slide 11: ACTION in Ukraine
ACTION IN UKRAINE Since 2004 the Company has been developing its business in Ukraine At present, it owns a total of 15 retail shops with IT products, household appliances and consumer electronics, operating as the SHOK and KREZ chains SHOK – one of the first supermarket chains in Ukraine KREZ – a ch
Slide 12: Sferis
SFERIS Sferis - a retail chain, which has recently started offering Orange mobile telephony services Now part of the ACTION Group, Sferis runs 53 of its own shops The target size of the chain is 250 shops, 100 of which is to offer mobile products and services Those objectives are to be attained by 2
Slide 13: A.PL
A.PL An online shopping galleria launched in 2007 Unique domain name Almost 92,000 products 114,000 images Departments: delicatessen food, consumer electronics, household appliances, IT, mobile telephony, multimedia (music, films, games), books, office products, pet products, premium wines Dedicated
Slide 14: Results of the ACTION Group for Q2
Results of the ACTION Group for Q2
Slide 15: Key Events of Quarter 2
KEY EVENTS OF QUARTER 2 Sales dynamics of 33% Performance gain on further expansion of warehouse facilities – present area: 11,500 sqm Opera FIZ increased ownership share in the Company to 10.08 % All-times high share price of 35 PLN (7 Dec 2007) New brands added to the distribution offering: Kingst
Slide 16: Results for Quarter 2
RESULTS FOR QUARTER 2 Sales revenue (PLN M) Operating profit (PLN M) Sales revenue increased compared to Q2 2006/2007 by 33 % Operating profit increased compared to Q2 2006/2007 by 172 % 16
Slide 17: Results for Quarter 2
RESULTS FOR QUARTER 2 Gross margin (%) Gross margin increased compared to Q2 2006/2007 by 1.5 pp Return on Equity (ROE) increased by 9.4 pp. * RoE based on net profit values for the last 4 quarters 17
Slide 18: Results for Half-Year 1
RESULTS FOR HALF-YEAR 1 Sales revenue (PLN M) Operating profit (PLN M) Sales revenue increased compared to half-year 1 of 2006/2007 by over 28 % Operating profit increased compared to half-year 1 by nearly 169 % 18
Slide 19: Results for Half-Year 1
RESULTS FOR HALF-YEAR 1 Gross margin (%) Net profit (%) Gross margin increased compared to half-year 1 of 2006/2007 by 1.7 pp. Net profit increased compared to half-year 1 of 2006/2007 by 111.9 % 19
Slide 20: Detailed Financials
DETAILED FINANCIALS Q2 Q2 Q1-Q2 Q1-Q2 2006/200 2007/200 2006/200 2007/200 Change [PLN M] 7 8 Change 7 8 940 1 206 Sales revenue 527 912 701 281 32.8 % 001 458 28.3 % Gross sales revenue 35 537 57 447 61.7 % 57 643 93 691 62.5 % Gross sales margin 6.7 % 8.2 % 1.5 pp 6.1 % 7.8 % 1.7 pp Cost of sales a
Slide 21: Financial Targets 2007/2008
FINANCIAL TARGETS 2007/2008 Results for Action Group Dynamics Attained Attained Forecast 2006/2007 vs. 2007/2008 vs. [PLN MM] 2005/06 2006/07 2007/08 2005/2006 2006/2007 Sales revenue 1 436.5 1 797.5 2 257.3 25.1% 25.6% Net profit 15.9 22.0 30.3 % margin 1.1% 1.2% 1.3% 38.7% 37.7% Sales revenue Net
Slide 22: Target Achievement Level
TARGET ACHIEVEMENT LEVEL Sales revenue (PLN MM) Net profit (PLN MM) After 2 quarters of 2007/2008 the sales revenue forecast for 2007/2008 was achieved in 53.4 % In the same period the net profit reached 61.6 % of the annual target 22
Slide 23: Development Strategy in ACTION
DEVELOPMENT STRATEGY IN ACTION Development of IT hardware distribution Further expansion of the distribution centre Development of sales systems Further growth of subsidiaries ACTION Ukraina, SFERIS, A.PL Acquisition plans 23
Slide 24: Warehouse Expansion
WAREHOUSE EXPANSION The dispatch part of the warehouse will The target complex is to have be completed in June 2008, which will the following parameters: expand the Company's operating area area 25,000 sqm by 35 000 pallet places another 2,300 sqm maximum order processing rate The main warehouse bui
Slide 25: Logistics Centre: A Beneficial Investment
LOGISTICS CENTRE A beneficial investment • An investment of value of € 7,300,000 • Increasing performance and the number of SKUs handled • Planned completion time: November 2008 Expected changes of the maximum daily metrics PRESENT FUTURE Change No. of staff 220 220 0% Performance * 26 77 196% No. o
Slide 26: Development of Sales Systems
DEVELOPMENT OF SALES SYSTEMS I-Serwis English language version of that sales & communications platform implemented for export customers Webserwis A platform which integrates the sales system of ACTION with e- commerce sites of the Company's customers I-Partner An electronic online sales system devel
Slide 27: Growth of Subsidiaries
GROWTH OF SUBSIDIARIES SFERIS Quarter 2 of 2007/2008 saw the opening of 5 new shops at new locations and 5 partner shops Chain rebranding continues: the new visual identification implemented with 40 % of the shops Further shops to be opened by the end of June 2008: 15 partner shops 5 Sferis shops 27
Slide 28: Growth of Subsidiaries
GROWTH OF SUBSIDIARIES ACTION Ukraina • At present the SHOK and KREZ chains operate a total of 15 shops • In 2008, 3 more are planned to be opened (Zaporizhia, Vinnytsia, Donetsk) A.PL • A constant growth of the number of new customers • Growing average order value • Introducing a full range of offi
Slide 29: Development Prospects
DEVELOPMENT PROSPECTS Steady growth of the commercial offer in the nearest future by approx. 5,000 items Further expansion of the logistics and shipping centre by increasing its area by 2,400 sqm Focusing on export now easier thanks to the English language version of I-Serwis Participation in numero
Slide 30: Thank You for Your Attention
THANK YOU FOR YOUR ATTENTION 30