Sniezka: pandemic with a positive impact on the company’s results
The Sniezka Capital Group achieved very good sales and financial results in 2020, to which the unexpected spring repair boom and the very good results generated by the Group’s two most important foreign companies contributed. The time was also marked by investments in logistics, IT and production lines. Sniezka also completed a key stage in the process of implementing a new operating model based on competence centres.
The past year was exceptionally successful for the manufacturers of paints and preparations for wood protection and decoration. In Poland – on the market which is the most important for the Sniezka Group – lockdowns and other effects of the COVID-19 pandemic have forced Poles to spend more time in their homes. As a result, many people decided to carry out repairs – painting walls or other renovation works in their flats, houses and gardens. Even greater interest in decorative products was evident in Hungary, the Group’s second most important market.
In 2020, the total sales revenue of all companies in the Sniezka Capital Group was PLN 821.3 million, recording an increase of 14.5% compared to the previous year.
– Polish customers, just like Hungarian or Ukrainian ones, eagerly reached for decorative paints, especially those of higher quality. The COVID-19 pandemic therefore did not translate negatively into our results in our two main markets, but actually supported them. The positive influence was visible mainly in the first part of the season, while in the following months demand normalized and returned to the levels observed before the pandemic – comments Piotr Mikrut, Chairman of the Board of FFiL Sniezka SA.
In the time of increased uncertainty customers chose brands which they trust the most. That is why the high recognition of the Group’s brands – including Magnat, Sniezka, Vidaron, Rafil and Foveo-Tech on the Polish market and Poli-Farbe on the Hungarian market – played a significant role in the time of the pandemic.
In 2020, the Group’s consolidated net profit increased by 37.6%, reaching PLN 86.2 million. As a result of the increase in consolidated sales revenue, accompanied by a lower increase in costs, EBIT also increased – to PLN 102.5 million (+29.8%) and EBITDA – to over PLN 136.1 million (+27.4% y/y). Margins have also improved in most cases.
Sniezka focuses on competence centres and logistics
In 2020, after a period of intensive growth – also internationally – the Group started implementing the change in the operating model and management concept planned many years ago. The foundation of this change was the separation of competence centres for the Group’s core business areas. The key stage of this process was transferring from the beginning of 2021 the Trading Division (conducting marketing and sales activity) from the structures of FFiL Sniezka SA to a subsidiary controlled in 100% by it – Sniezka Trade of Colours Sp. z o.o.
As a result of the change, FFiL Sniezka SA, apart from setting the strategy and managing the Group, has become the centre of competence in supply chain management (purchase, distribution, warehousing, logistics, information flow), IT, production and technology as well as research and development. The parent company will also act as a shared services centre. In turn, Śnieżka Trade of Colours has become a competence centre for sales and marketing.
Strategies, processes and best practices developed by these centre companies will then be introduced in the remaining companies of the Group – both in Poland and abroad (taking into consideration the specific nature of local markets). The changes will enable a long-term increase in effectiveness and competitiveness of the Group.
Sniezka plans further expansion
Apart from implementing the new operating model based on competence centres in FFiL Sniezka and Sniezka ToC, the Group will focus on further strengthening its position on key markets: in Poland, Hungary, Ukraine and Belarus.
– One of the priorities in this area will be the fight for market shares in Hungary, in product segments which are the most attractive for us. After last year’s work to increase Poli-Farbe’s operational efficiency, we are very well prepared for this – says Piotr Mikrut.
Logistics will also be an important area of the Group’s development in the nearest future. Efficient supply chain management is an important element of the Group’s competitiveness as a modern organisation. It was reflected in the appointment of a new member of the Board of FFiL Sniezka SA who will be responsible for this area.
Providing the market with products quickly, responding efficiently to current sales trends and maintaining the optimum balance between the level of production and warehouse stock will be influenced by the launch of the Logistics Centre. In 2020 Sniezka completed the first stage of the investment and started its second stage. The facility is scheduled to be commissioned in the first months of 2022.
Challenges on the horizon
At the same time, there are several challenges on the horizon, such as the effects of the COVID-19 pandemic, which generates high volatility both in terms of consumer trends, supply chain continuity and the broader macroeconomic environment. In particular, the situation in the raw materials market will require careful monitoring and appropriate responses.
– Current problems of some suppliers raise the risk of temporary limitations in access to certain raw materials used in production, resulting in price increases. As in the case of most manufacturing companies in Poland, this poses challenges in terms of pricings and maintaining the level of margins achieved. It will be a dynamic year, but we believe that Sniezka will do better than the competition – adds the President of Sniezka.