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I quarter of 2020 in TIM Group: double-digit dynamics of record-high revenues, EBITDA higher by 5.5%

This has been the best opening of the year in the history of the TIM Group. The first three months of 2020 brought PLN 240.1 million in consolidated and PLN 213.2 million in individual revenues from sales, i.e. 15.7% and 13.4%, respectively, more than in the corresponding period of 2019. The consolidated operating profit amounted to PLN 7.3 million, which means an increase by 2.3% y/y.

The share of e-commerce in the turnover of TIM SA in I quarter of 2020 amounted to 72%, and the SARS-CoV-2 pandemic, which reached Poland in March 2020, has only confirmed the appropriateness of the TIM’s decision to focus on the hybrid sales model, that is, the dominant share of the online channel with the support of qualified employees of the sales network.

– Even before the outbreak of the pandemic, the value of online sales in Poland grew by over 18 percent year-on-year. This ratio will probably grow even more. The quarantine period has made many companies accelerate entering e-commerce market – often to merely survive – says Krzysztof Folta, the President of the Management Board of TIM SA.

Strengthening the Position and New Customers

Although historically the first three months of the year generate lower turnover in TIM than the other quarters, it is worth noting that March 2020 with the revenues from sales exceeding PLN 78.5 million is currently the second best month in the company’s entire history. – We have been here for years now so the last weeks for us are not the time of nervous movements and attempts to find ourselves in the new reality but of strengthening the position and even better adjustment of the offer to the current customers’ needs – adds Krzysztof Folta.

Growing turnover is accompanied by the increase in the number of TIM customers. The sustained upward trend confirms that the change of TIM’s business model has effectively influenced the company’s detachment from the construction sector, as also from the rest of the electrotechnical industry, where in the recent months the development dynamics is visibly smaller than in the case of TIM and it is even declining – The pandemic has brought us new customers who have been attracted by our safe alternative as opposed to shopping at traditional wholesalers they had been using before – says Piotr Nosal, Board Member and Commercial Director of TIM SA. – There are also customers who, due to integration with TIM IT systems, have begun the process of preparation, during the epidemic threat, to transfer their sales to e-commerce – he adds.

Increase of turnover by almost 1/4 in ROTOPINO.PL, very high cash flow in TIM

The main part of the TIM Group revenues has of course been generated by TIM SA, however, the share in revenues of the other companies forming the Group – ROTOPINO.PL SA and 3LP SA – was record-high and exceeded the level of 11.1% in I quarter of 2020. The dynamic increase in revenues of 3LP SA is related to the growing, up to 44%, share of external customers (from outside the TIM Group) in the area of logistics services provided by this company. Let’s remember that one of the main strategic goals is the achievement by 3LP of a 50% share in the revenue from external customers. Turnover dynamics of ROTOPINO.PL SA operating exclusively in the e-commerce channel on the Polish and Western European markets is also impressive and amounted to 23% y/y.

Due to high foreign exchange losses (PLN 4.7 million) net profit of the TIM Capital Group in I quarter of 2020 amounted to PLN 539 thousand. Such high foreign exchange losses are the result of rapid weakening of the Polish zloty against the euro and are of purely accounting nature, and relate mainly to the valuation of liabilities under long-term rental of warehouse halls by August 2031. – Within the financial data, it is also worth noticing that the level of the consolidated EBITDA was record-high in the first quarter and amounted to PLN 12.5 million (increase by 5.5% year-on-year) and positive cash flows were very high. During the first three months of 2020, the TIM Group generated positive cash flows of over PLN 7 million from operating activities as compared to PLN 3.1 million in the first quarter of 2019 – comments Piotr Tokarczuk, Board Member and Financial Director of TIM SA.