Poland’s Strong Consumption and Investment Point to Robust Growth with Mild Inflation Outlook
Ukraine Peace Deal Hopes Weigh on EUR Inflation Swaps as Real Rates Hit New Highs
Germany’s Economy: Three Years of Stagnation With Only Limited Signs of Recovery
Commodities Move on Geopolitics and Weather as Oil Rises, Gas Falls, and Nickel Faces Supply Risks
USD Overvaluation Persists as Geopolitics Dominate and JPY Faces Intervention Risks
The Group pursued the Strategy F1 successfully and realized it earlier than assumed; revenues and EBITDA beat the strategic targets (assumed at PLN 700 million and PLN 90 million, respectively, in 2023) hitting PLN 831 million and PLN 119 million, respectively, already in 2021, and all without incorporating the acquisition effectively closed in March 2021.
For the years 2022-26 the management adopted a new strategy that assumes using the Group’s competitive advantages and its stable financial condition to accelerate its growth and expand the market share. The Strategy F1R2 defines the Group’s goals and directions of development in 3 dimensions: strategy, structure, and organizational culture. It includes ESG issues as well. The new strategy is based on 4 pillars:
â– market expansion,
â– product expansion,
â– production,
â– effectiveness.
The market/ product expansion is aimed at a sales growth through market widening and product offer increase. The third pillar is supposed to support the Group’s perception as a producer through investments in production capacities, and the fourth one indicates internal transformation and elimination of the organization’s weaknesses. These last two are supposed to extend the Group’s operational flexibility and lower the risks related to unexpected changes in supply chains.
The Strategy F1R2 defines key directions of the Group’s development as:
The Company’s strategy covers M&A activities. Future acquisitions should enable the Group to take over a company offering complementary products to Ferro’s offer. A business growth potential after a takeover target has been incorporated, and means to raise capital for funding a potential acquisition are factors which play an important role in making a decision about the transaction.
The management estimates that the realization of two main assumptions of the Strategy F1R2 will allow the Company to deliver in 2026:
The discussed assumptions do not cover the Company’s acquisition plans.
The Strategy F1R2 assumes a dividend payout in the amount not less than 50% of the Company’s NI in the stable market and financial situation including, among other things, the consolidated ND/ EBITDA ratio staying ⩽ 2.5x.
The goals for 2026 assumed by the management are higher than our revenues and EBITDA forecasts by c. 20%. We assumed lower capex which is to be verified. The Company’s new strategy covering expansion, diversification, and competitive position improvement is, in our view, realistic. Given the current market circumstances, we are more concerned about our short-term forecasts, especially for the next year.
Catalysts
Risk factors
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0.
Analyst: Sylwia Jaśkiewicz, CFA
