Śnieżka Group generated PLN 402.6 million ($106 million) in sales revenue in H1 2024, down 7.3% year-on-year. In the period under review, EBITDA amounted to PLN 67.4 million ($17.6 million) and net profit to PLN 31.7 million ($8.3 million), down 15.9% and 23.2%, respectively, year-on-year.

The weakening of results is primarily a consequence of the decline in sales in volume terms on the scale of the entire market, as well as the strengthening of the złoty against the forint and hryvnia. Relatively unfavorable macroeconomic conditions also continue.

Despite difficult external conditions, the Śnieżka Group maintained its share in the Polish market. In Q2 2024 alone, the value of sales in Poland amounted to PLN 161.5 million, which means a year-on-year increase of 4.1%. The Group’s net debt/EBITDA ratio fell to 2.08 at the end of June 2024 from 2.35 a year earlier.

The decorative paints market is struggling with a decline in sales volumes, but recent industry data indicates that the pace of this decline has slowed to a single-digit level. The strong position of the złoty against the euro, the currency in which the group mostly buys raw materials, allows it to better control production costs.

On the other hand, the strengthening of the złoty against the hryvnia and the forint has an unfavorable effect, reducing revenues, as revenues from the Hungarian and Ukrainian markets, when converted into złoty, are lower.

“Despite difficult external conditions, we maintained our share in the domestic market. In Q2 alone, we recorded a 4.1% increase in sales in Poland, to PLN 161.5 million. In the period under review, we also reduced our debt in terms of net debt to EBITDA, and we implemented CAPEX expenses according to plan. It is also worth adding that the value of the dividend paid in May was almost PLN 40 million, which gave PLN 3.17 per share,” said Joanna Wróbel-Lipa, VP of the Management Board.

The group’s profitability in H1 2024 was reduced, in addition to the decline in sales, by a 13% year-on-year increase in selling and general administrative costs. EBITDA profitability in H1 2024 was 16.7%, down 1.7 percentage points year-on-year, but this is a very good result compared to the industry. In the period under review, the group achieved a 48.4% gross sales profitability, up 5.6 percentage points year-on-year, despite the difficult market environment.

“Current market conditions are largely shaped by purchasing power and consumer sentiment, which affect limited demand in our industry. These factors are influenced by the geopolitical situation, real wage growth and the currently observed demand structure, where customers are more likely to choose services over durable goods. In such an environment, the challenge is to maintain sales volumes comparable to 2023,”  Wróbel-Lipa concluded.