Presentation of financial results of QUMAK S.A. for 1H Warsaw, 28 September 2016

Transcription

1 Presentation of financial results of QUMAK S.A. for 1H 2016 Warsaw, 28 September 2016

2 Management Board Tomasz Laudy President of the Management Board Since June 2016 is a President of the Management Board of Qumak. For 20 years has been associated with an IT sector. Worked for such companies as: Ericsson, Siemens, Orange, or Roshan. Since 2013 fulfills a function of a President of the Management Board at itworks S.A. Graduated from the Warsaw University of Technology. Developed business competencies at renowned universities abroad, i.a. IESE and St. Gallen Business School. Marek Tiahnybok Vice President for Finance Has many years of experience in managerial functions of a financial profile as well as in fulfilling functions in management boards of joint-stock companies, i.a. Grupa Prokom Software S.A. and Asseco Poland. Graduated from the CUE and holds an Executive MBA from Gdańska Fundacja Menedżerów, University of Gdańsk and Rotterdam School of Management. In Qumak since June Jacek Suchenek Vice President for Realizations Since March 2013 is a Member of the Management Board of Qumak, since 2015 a Vice President. Fulfills a function of a Contracts Realization Division Director. In the company since Graduated from the Warsaw University of Technology. Wojciech Strusiński Vice President for Sales In Qumak for over 10 years. Since January 2013 is a head of Sales Division in the Company (Commercial Sector), and since June 2015 is a Member of the Management Board of the Company. Holds an Executive MBA, issued jointly by ESSEC Business School and SGGW.

3 Agenda Financial results in 1H2016 and the Company s financial standing Sales and orders portfolio in 1H2016 Growth potential of backlog ISOK undertaken actions Perspectives in the area of products Summary

4 Financial results in 1H 2016

5 Results 1H2016 vs. 1H2015 Revenue Gross income from sales Operating result -50% mln PLN mln PLN +1% mln PLN H2015 1H2016 1H2015 1H2016 1H2015 1H2016 Revenue an effect of high sales base in 1H2015. The highest sales in the history EBIT 1H2015 includes released provisions PLN 2.7 million for KGP Selective approach to contracts in public sector (resignation from submitting 33%) Focus on higher margin mln PLN Net result Closing of a 5-year investment cycle, with delay in starting the next cycle 1H2015 1H2016

6 Significant improvement in profitability 2Q vs. 1Q Results in 2Q2016 Results in 1Q mln PLN MBS EBIT NET mln PLN MBS EBIT NET 15% Profitability from sales 6.4% Operating profitability Changes in sales structure: smaller contracts but higher margin Decreased share of subcontractors Organizational optimization

7 G&Aand SG&Ato revenue G&A to revenue SG&A to revenue mln PLN / % % 1H % 1H ,0% 23,0% 22,0% 21,0% ,0% 19,0% 18,0% ,0% 16,0% 15,0% ,0% 13,0% 12,0% ,0% 10,0% 9,0% 150 8,0% 7,0% 6,0% 100 5,0% 4,0% 3,0% 50 2,0% 1,0% 0,0% 0 mln PLN / % % 1H % 1H2016 Increase of %GA smaller sales and severance for employees and managers Executed employment reduction -5% Higher sales costs i.a. because of growing number of 2-stage tenders Increase in outsourcing of specialists

8 Cash flow 1H 2016 and financing structure Cash flow Cash level CFO stage of investing in contracts CF Op. CF Inv. CF Fin. CF net mln PLN mln PLN Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 As at used available Non-interest-bearing financing or with preferential interest 7.6 X Interest-bearing financing (including factoring) Increasing leverage in 3Q with planned backlog growth Lack of net debt High cash level (ca. 60% capitalization) Financing of current capital from own resources and using cost-effective debt

9 Optimal management of working capital CKG netto w dniach The Company skillfully uses extended dates for payment and preferential financing Receivables Inventories Liabilities Cash conversion Simultaneously the Company maintains fast rotation of inventories Liabilities: trade, borrowings, bank loans, factoring, other, guarantee deposits, tax liabilities Receivables: trade and other, guarantee deposits In relation to net income Averaged values Period: 180 days

10 Low debt very good financial situation Profitability ratios 1H2016 1H2015 Financing structure ratios As at As at Sales profitability (gross) 9.6% 4.8% EBITDA profitability 0.9% 1.5% Operating profit margin -0.2% 1.1% Gross profitability -0.6% 0.6% Net profitability -3.6% 0.5% General debt ratio Interest-bearing debt to assets ratio Coverage of fixed assets with equity ratio Equity indebtedness ratio Rules of calculation: Sales profitability (gross) = gross profit from sales/ income from sales EBITDA profitability = (loss from operations + depreciation)/ income from sales Operating profit margin = loss from operations/ income from sales Gross profitability = loss before taxes/ income from sales Net profitability = net loss/ income from sales Rules of calculation: General debt ratio = liabilities and provisions for liabilities in total/ assets in total Interest-bearing debt to assets ratio = interest-bearing indebtedness/ assets in total Coverage of fixed assets with equity ratio = equity/ fixed assets Equity indebtedness ratio = interest-bearing indebtedness/ equity Liquidity ratios As at As at Current liquidity ratio (current ratio) Quick liquidity ratio (quick ratio) Rules of calculation: Current ratio = current assets/ short-term liabilities Quick ratio = (current liabilities inventories short-term accruals)/ short-term liabilities

11 Sales and orders portfolio 1H 2016

12 Market environment Very poor use of means in the new financial Perspective of the European Union , by estimations below 10% Decrease in investments in 2Q by 4.9% y/y significantly lower GDP dynamics than expected Double-digit decrease in public procurement for infrastructure sector 73% of tenders in the IT segment involves delivery of hardware and licenses Lowest number of tenders since 3 years. Dynamics -54% vs. 2014* Value of tenders -39% vs Value of public procurement -39% Noticeable increase of investments of companies, particularly financial, in specialized IT solution, mainly IT Security Large interest of enterprises in outsourcing looking for savings and optimization. According to experts, this will be one of the market segments with most potential in the next years mln PLN Q Q2016 *By PPO data

13 Sales 1H 2015/1H 2016 Significant decrease in sales in lines of large exposure to public market mln PLN Change in sales in particular business lines y/y. -89,4 Sales structure in 1H16 Data Center Airport Automation 15% 18% Building Automation Software Development 17% 7% -40,5 +4,2-0,7-11,3 +0,5-10,0-29, H2015 AirAuto BuildAuto DataCen HardSof SofDev Multim DMS Other 1H2016 Multimedia Exhibitions DMS Hardware and Licenses 10% 10% 7% 16% Biggest impact on decrease in sales y/y finishing large infrastructure projects Other segments

14 Current backlog in next years Effectiveness of acquiring orders 27% Commercial 26% Public Over a year of delay in distributing projects in the perspective Rok 2016 Expected growth of portfolio within several months mln PLN Rok Rok 2016 Total backlog PLN 286 million * * As at 31 July

15 Backlog in Deliveries of hardware/licenses 12% Other Data Center 12% Enterprise AM 6% DMS 8% Backlog wg linii biznesowych Building Automation 24% Airport Automation 8% Mutlimedia Exhibitions 23%

16 Growth potential of backlog submitted offers

17 Pipeline of value PLN 292 million Management and maintenance of computer and telecom systems Buidling Automation Security IT Data Center Deliveries of hardware/licen ses Smart City Enterprise AM Airport Automation Other 22% 20% 15% 8% 8% 7% 4% 4% 12% Diversification: 174 clients Double-digit margin I Share of public market < 30 %

18 ISOK current state and undertaken actions

19 ISOK current situation and undertaken actions Received notice on rescinding the realization of stage 5 of ISOK. Without a negative impact on future results Realization works in a developer environment have been finished. System ready to be implemented in the ordering party s environment was secured and placed in a court s depository Decision on the next steps in the project is on the ordering party s side, Qumak sustains the ability to finish the performance of this Project The Company will claim its rights in court

20 Perspectives in the area of products

21 Simulator SIMTRAQ EN57 Cab simulator EN57; Can be installed on a 6-axes platform; Physical cockpit, physical recreation of a driver s cab. SIMTRAQFull VR EN57 Simulator of virtual reality; Seat on a 6-axes mini-platform; Goggles and gloves for interaction.

22 Innovative simulator of the most popular multiple unit in Poland EN57 (rolling stock ca items). Enthusiastic reception on the largest world transport fair INNOTRANS Achieved ability to produce any cab locomotive in around 6 months (rolling stock ca items) Ability to construct a simulator of any machine in a year instead of even 3 years Cooperation with vocational schools and universities 60 mln Own software can be an engine of any simulation in augmented reality (AR); Use of behavioral mechanisms and artificial intelligence to simulate behaviors of people, vehicles, security forces: offer i.a. for airports, military, police, anti-crisis services, intelligence. Potencjalne rynki estimated market of rail simulators in Poland

23 Smart City innovative products for municipalities Products in groups already developed or under development Energy sector (sustainability) Transport systems Security e- administration Communication platforms

24 Smart City innovative products for cities and municipalities Selected products offered to municipalities at present Platform supporting local job market Tool for measuring environmental conditions Application for management of utilities consumption in public buildings Tool integrating e-services (transport, culture, sports, social) on a local level Platform integrating e-communication with municipal offices System of spatial information on the basis of GIS maps 115 mln estimated annual value of available market 10-25% estimated share of Qumak

25 Energy storages unique implementation Frontier implementation of Qumak for Energa-Operator received an award at the fair ENERGETAB 2016 Storage is to save energy during production and put it to use (release) when such need arises Key element of construction of modern networks Smart Grid, usage of balancing of energy system and improvement of quality of electricity Large interest from the side of Distribution System Operators (DSO) Can also support operations of traditional power stations Sales potential also in the industrial sector

26 Initial aims of the strategy Developing strategy based on the market development directions indicated by Gartner, Forester, and also on the basis of experience and predictions of managerial staff Simplifying and arranging structure changing many business lines to 4-5 synergic areas of products and services Organizational excellence through reduction of processes, flexible approach to project management, and greater stress on systematic upskilling of employees Innovative services and products (including business applications) and own solutions, i.a. in the segment of Smart City Development of outsourcing and more flexibility in employment Going abroad in terms of close cooperation with global technological partners Significant decrease of exposure to public market Maintaining market share in key areas, where the company s competencies are unique and the market position is strong

27 Summary 1H 2016

28 Summary Difficult market situation in the public segment with a large impact on infrastructure projects Significant improvement of profitability in 2Q vs. 1Q 2016, thanks to changing sales structure and decreased share of subcontractors Very good liquidity situation, lack of net debt Backlog with a high growth potential Important stage of building portfolio of products is finished: Simulation products Applications for municipalities and cities Energy storages

29 Aleje Jerozolimskie 134 PL Warszawa T: F:

30 Appendix

31 Results 1H2016 P&LA and balance sheet In PLN thousand Equity in total Fixed assets in total Working assets, including: Inventories Trade and other receivables Assets from unfinished contracts Other non-financial assets Cash and cash equivalents Assets in total Long-term liabilities, including: Long-term borrowings and bank loans Trade and other liabilities Provisions Short-term liabilities, including: Short-term borrowings, debt instruments and bank loans Trade and other liabilities Liabilities from unfinished contracts Provisions Deferred revenue Total equity and liabilities In PLN thousand 1H2016 1H2015 Change % Income from sales % Own cost of sales % Gross income from sales % Costs of sales % Costs of administration % Other operating revenue % Other operating expenses % Profit on operating activity Result on revenues and financial costs % Profit before tax Income tax and deferred income tax Net profit

32 LEGAL DISCLAIMER This presentation is not a sales offer of any securities of Qumak S.A. ( Company ), in particular does not include information on securities and conditions for acquiring them, as well as cannot be regarded as an invitation to sell securities, submit buy offers or to subscribe for the Company's securities. This presentation and any of its part, as well as its distribution, are not the grounds to enter into any contract or to incur any liability. Also it is not a source of information which can be a basis for deciding on entering into any contract or on incurring any liability. You should not rely on the information included in this presentation for any reasons, as well as assume that this information is complete, precise or reliable. All such assumptions are made at your own risk. Neither the Company, nor persons acting on its behalf, in particular members of the Management Board of the Company, and any other persons, grant any clearly stated or implied guarantees or assurances regarding the precision, completeness or reliability of information or opinions included in this presentation. Statements included in this presentation, which are not historical facts, are statements considering the future. Statements considering the future, in particular these regarding predicting revenues from particular markets or considerations regarding the Company's development, its subsidiaries, as well as associated and affiliated entities ( Capital Group ), must not be understood as binding prognoses. Neither the Company, nor persons acting on its behalf, in particular members of the Management Board of the Company, and any other persons, grant assurance that prognoses regarding the future will be met, in particular do not guarantee the compatibility of future results or events with these statements, as well as the fact that the future results of the Capital Group will not significantly differ from such predictions. Information included in this presentation can undergo substantial changes. Neither the Company, nor any other person, is obliged to update or care over updating information included in this presentation or to correct any possible inconsistencies; all opinions expressed in this presentation can undergo changes with no prior notice. Neither the Company, nor any member of its bodies, employee of higher or other position, or any other person, shall be held responsible for any damages suffered arising from the use of this presentation or its content. By taking part in this presentation or accepting a copy of this document, you accept applying to the mentioned above restrictions and conditions.