Earnings call transcript: Grupa KĘTY SA Q1 2025 sees revenue growth

Grupa KĘTY SA reported a notable increase in consolidated revenues for the first quarter of 2025, driven significantly by the integration of ZELT company. Despite the market’s challenging landscape, the company’s strategic investments and expansion plans have positioned it for continued growth. The stock price experienced a positive movement, increasing by 1.22% following the earnings release. According to InvestingPro data, the company maintains strong financial health with an overall score of 2.97 (GOOD), particularly excelling in profitability metrics with a score of 4.17 out of 5.

Key Takeaways

• Consolidated revenues increased by PLN 100 million in Q1 2025.
• Export sales are projected to grow from 50% to nearly 55%.
• The company plans a significant investment of PLN 1.7 billion over five years.
• Grupa KĘTY SA is targeting a transition to a leading European player in aluminum processing.
• The stock price rose by 1.22% following the earnings announcement.

Company Performance

In the first quarter of 2025, Grupa KĘTY SA demonstrated robust financial performance, with consolidated revenues increasing by approximately PLN 100 million. The growth was partly attributed to the consolidation of ZELT company, which contributed to half of the revenue increase. The company is also focusing on expanding its export sales, aiming to increase from 50% to almost 55%. This performance aligns with the company’s strategy to achieve a 50% higher growth rate than the market average.

Financial Highlights

• Revenue: Increased by PLN 100 million in Q1 2025.
• Export sales: Expected to grow to nearly 55%.
• EBITDA: Maintained above budgetary assumptions.

Outlook & Guidance

Grupa KĘTY SA has outlined an ambitious plan to invest PLN 1.7 billion over the next five years, with a focus on replacement and modernization investments amounting to PLN 1 billion. The company is targeting €2.6 billion in revenues and a 45% increase in EBITDA compared to current levels. Additionally, Grupa KĘTY SA is maintaining an 85% profit dividend policy, projecting a 6-7% dividend yield, and aiming for a potential total shareholder return of 13% annually.

Executive Commentary

Roman Przybylski, the incoming CEO, emphasized the company’s ambition to become a leading player in the aluminum processing industry. "We want Grupacante as a whole body to really be one of the leading players in the aluminum processing," he stated. Outgoing CEO Darius Maniko added, "We have managed to operate really well in these turbulent times," highlighting the company’s resilience and effective strategy execution.

Risks and Challenges

• Market volatility: Fluctuations in aluminum and petrochemical prices could impact profitability.
• Economic conditions: Slower-than-expected growth in the Eurozone could affect demand.
• Competitive pressures: The company faces strong competition in the aluminum processing and construction sectors.
• Execution risks: The ambitious investment plan requires careful management to ensure successful implementation.

Q&A

During the earnings call, analysts inquired about the company’s approach to geographic acquisitions. Grupa KĘTY SA confirmed a flexible strategy, not excluding opportunities in Central and Eastern Europe. The company expressed confidence in its Q2 performance across all segments, while remaining transparent about potential market challenges.

Full transcript - Grupa KĘTY SA (KTY) Q1 2025:

Unidentified Moderator, Conference Moderator, Kante Group: Good morning, ladies and gentlemen. I would like to welcome you at today’s conference So the first topic, this is the results for the February. And the second topic is relates to the yesterday’s publication, namely the presentation of the assumptions of the strategy for 2025 to 2029. So we will present this in a limited number of speakers.

There will be three persons presenting. Presents is president, Arushmanikov, Roman Przybylski, vice president, and Rafal Varpehovski, member of the management board and the financial director. But the management board in full composition and is ready to answer the questions, your questions in the Q and A session after the presentation. We have also with us Rafael Elhovic who manages the segment of flexible packaging. So we are strong and ready for answering the questions.

And I think that we can start. Darius Maniko, the president CEO, will start. I would like to welcome you. Thank you very much to all the people who arrived here in Warsaw. I also can talk to you after the conference because this is my last conference.

So I will I could I I could have also the talks, with you after the formal part of today’s conference. And, so I will make this presentation in two blocks or in three blocks. So the first is the first quarter of twenty twenty five and then the summary of the strategy, which was binding, and the next information is the strategy for the coming years. I will start from the February of regarding the current situation. So the first quarter, as for the performance of Kante Group was very good despite a lot of worries, because it was difficult to realize the year 02/2024.

It was difficult to enter 02/2025. Here, you remember from the last conference, we were talking about a very fierce price war, about the lack of orders, that this demand was quite weak. And, of course, we put a lot of effort in this, extruded product segment. This is a very important segment for us. This is the barometer for us of what can happen.

And this segment performed very well. It was 9,500 tons And this is a very important signal for us that we are in a position to to give work to this segment that we can keep the production rhythm. And this is very important in a sense of the technological regime. And I’m talking about this as a power meter because those aluminum systems, they go to different sectors of economy.

So finding ourselves in this difficult segment of the extruded products. So first of all, we performed our tasks in our budgets in terms of the volume of production, but in the same time, it allows us to dilute the fixed costs and also to reach the given profit on EBITDA level. And this is very important indicator. Indicator. It has been even for twenty years the most important indicator and a very important information in first quarter.

How we will start and what will be the load on the pressing machines. If this is the 7,000 tons, so this will be a big problem afterwards. And and this fight for reaching the the the budget over the three quarters could be we could fail in this. As for the other segments, so they were also traditionally well performing. Traditionally well performing.

So, ASS presented very good results for the first quarter. And the managers for these segments, they are coping well well with the market and also very well in the purchasing area. And this mix gives give us good EBITDA, which is very satisfying result above our budgetary assumptions in the first quarter of this year. The statistical data show that the economy is doing better, and we can’t see that. This is rather more from the our work that we, have done earlier and also in this quarter and not the the market in itself somehow is dynamically growing.

We are not feeling that. But if it will happen, if it will be like this in the second or the third quarter, for sure, we can expect even better results for Kante Group because also we can fight for better margins for the group. As for the financial results, so I would like the financial director to present shortly the results of the first quarter. Thank you And from the so I would like to be short in my presentation, the first quarter above the budgetary assumptions on the level of the focus that we showed you.

So the consolidated revenues, they’re increasing by around PLN 100,000,000. And also, this is the signal that half of this growth, this is the effect of including into the consolidation of Zeld company, Zeld company. And that is why the EBITDA with the growing revenues above as compared with the last year, from the operating operating activities on the same level and the financial costs higher as compared to what we can expect because at the end of the year, as you remember, in the fourth quarter, our debt increased because of acquiring ZELT and also the comparable data that was the very low level of credits. And the other element that speaks for the exceptional nature, this is a deferred tax. We were finalizing the investments in EPS and in AAS.

So we have €20,000,000 of deferred tax, and these tax liabilities are coming back to the normal. And that is why the profit is a bit is as compared to the previous year despite the fact that the, operationally speaking, the levels and EBITDA level are even better. Shortly about the segments, we are very happy, and this is what was mentioned, a very strong position of EPS in terms of volumes. So we have 80% of full capacity after the extension of the segment that was completed last year. We are in a position with this capacity to generate robust results despite the fact maybe a little bit worse than last year, but the situation, as you know, is still under pressure.

And this segment sells 7% more of volumes speaks for our efficiency, operational, commercial and production skills. And of course, we are using this synergy in the scale of the growth that we have talked about. So it means the lengthening of the value chain. So this is the integration with the ASS and FPS. So within the group, so the growth is utilized in these two segments.

And thanks to this, the total margin stays within the group. And as for the structure, of course, the construction is better than last year because these internal streams are directed to a as as classified to this category. And the foreign sales, as we know, this environment is very demanding, and the Polish lottery is be is getting stronger. So a little bit drop of exports. And the two segments that we have only positive trends, it means, a, as as in terms of volume and higher levels of margin and then the improvement of the results.

And here, we included the consolidation of this aluminum system. And then this is the sun protection systems, 20,000,000 sales in the first quarter or so. As you know, this company is characterized by seasonality. So the quarter fourth and the first are these quarters with lower possibilities, but it’s still several million zloty added. And then the flexible packaging segment, so we can say that that stable sale on a difficult market because this market for many years is very demanding, and this segment stabilizes our profits, our results, and also stabilizes our cash flow.

And that is why the flexible packaging faced a lot of challenges, but the robust results improvement on year to year basis, 8%. So we are very happy about it. But then the investments, the level at the beginning of the year, a few percent advancement, but we are entering into this cycle. As for the investment projects to starting the projects, we can’t see now any delays. 330,000,000 plan for this year.

So as of today, we are happy that we will reach our targets in investments and the debt in the quarter. So good result, lower low investments still, so the company reduced the the the 150,000,000 zloty and because of the good EBITDA mainly and also without the considerable impact of the working capital on the operating activities. And the same is with the credits, lower share of euro credits, but still we are trying to be able this is a 20% to 25% to keep it within this bracket. And so this is our half yearly economic exposure so that we so this is naturally secured. And in two words of summary, so the second quarter is full of challenges, but this is a situation that we’ve been talking about for many quarters.

And we think that we can cope with it. And for sure, today’s day is this day that we can communicate that we will focus on the implementation of operationalization of new strategy and integration with CELT and as for finances. So I would say that we recommended yesterday as we raise a report, opinionated positively, recommendations with management board, and we would like to pay out 85% of the consolidated profit as dividend. So should be about 7%, six seven % dividend yield this year. So we assume that this quarter is well developed on the close on the level that is a little bit higher than we expected in the budget.

Thank you very much.

Darius Maniko, Outgoing CEO, Kante Group: Thank you very much. And we will now move to part two of our presentation. But after it is only after this part that you’ll be able to ask questions. And we’ll ask questions that will be sent by persons following our discussion. The assumptions of this strategy for 2025 to 2029.

And there was last yesterday’s communication that presented the assumptions. And at present, they will be commented on again, Mr. CEO will start again. So ladies and gentlemen, well, tears comes to my eyes, and I’m closing the fourth strategy that I presented implemented in the KENTIGROUP strategy from 2024. We’re closing it.

We have 2025 now. And you can see what the situation is. Well, success is everywhere profit and revenues. And I’m extremely happy that the foreign services grow. We had this ambition and we promised ourselves that we will get 50% in the particular sectors.

The flexible packaging was very pushing for sales growth in this area. And this was the most important indicators for us internally because it was expected to answer a question whether the group has such good products and can manage these products so well in logistic and sales terms that they will find appreciation in the eyes of demanding Western European customers and those global consumers. And we got the answer because foreign sales at the €550,000,000 level, all the products that come from Grupo Quinte are high quality products, and they are products that Western consumers buy with are very willing to buy. So this is the greatest success. And it responded to the most important questions where we can think about that we can hope for the Grupacente become a European player with a large capital letters, a player that competes with Hydro, Aluminium, Chico, the most the largest competitors that we have now on the market.

And the foundation has been built, as I said, in all the areas of our OPCOP activities. And as a result, it gave to you persons who represent the funds, the shareholders, very good increase in the capital engaged in all the shares of the Grupo Acantho. It’s hard work, and we have nothing to be ashamed of. And as a result of this work, we have €6,006,000,000 as a result. So I would like to thank all the employees because it’s also their efforts.

And we’ve managed over the years to build a very competent team at all the levels, the highest levels of directors down to the lowest level, the persons that worked in the production or packaging unit. And everyone knew what we were doing and everybody was important in this action. I can thank, ladies and gentlemen, both to you, because you criticized when it was necessary and you appreciated our work it was due. It was very important for me as the CEO of the company to have this feedback from the market, whether to find out if we were on the right track. So thank you very much to the Supervisory Board of all the terms that stayed with me all the time as the CEO of the Group Acunti.

And at all times, I treated this company as my own. And I guess we all did, all the members of management board who worked so much time all these years. We treated it as our own. And we didn’t all this lottery was spent well to implement the strategy in a way that was impeccable. Without it, we wouldn’t have been able to achieve such results.

We wouldn’t be able to achieve such capitalization at the end of the strategy implementation. So we did a lot of good work by technologists, by persons who take care of production. So we must be clear, we have grown organically over the years, over the period of the last strategy. And this organic growth gave us very strong foundations to attack Europe. And the time has come where Conte is ready in all possible terms in terms of technology, people, production to think about its position as a large player in Europe.

Of course, the answer would be what then? And the question would be what then? And we need to engage over next years. We need to have a vision and see this development in the with our imagination, how this company would look like in a matter of years. I have no problems with having this vision.

I’ve never had. And every five years, I presented the strategy to you and implemented it. And it’s very important for me and very and many managers say there’s no need to have strategy because something may happen and it has happened. There was a crisis and COVID and there’s a war. Many things are happening.

Still, this road sign, this direction is nothing changed. It is always the same. There are some fluctuations over the implementation of five years of the implementation of strategy. But in fact, the direction of the strategy, the vision should never change, and it has never changed. And I can say today that we have packaging on the shelves all over Europe.

We have buildings in Europe that are standing in Europe. We have profiles that have been installed in the best cars possible that are produced in Europe. You can we can say that we have reached the peak, but it has never the end of the road. What remains to build the company with international status, a company that would operate in Europe Western Europe in the same way it will have its position in Western Europe. And the question arises what to do.

We need to do a lot. We need to reorganize the group to make large efforts so that on this foundation that we managed to build over the last twenty years, we will be able to be in Europe. I came to the conclusion that I this is not a task for me because we need to be because this would mean ten years of work. We don’t need to be a hypocrite that I would say I will work from dawn to tonight, and that’s the way it should be if I want to involve all the people that are working with me now and also new people that will be moving very well, navigating very well in Europe. And just to be an example, so I would need to lead this army that’s trying to win the European market.

So the question the answer is, I don’t have enough strength because of my age. I can only say that I would weaken this, March of canto towards Europe. We ’ve managed fortunately to gain very good manager, Mr. Przybylski, who will take over from me. And from the May 28, he will be the CEO.

And he is young enough, intelligent and determined, well educated. So I believe that after working together for eighteen months now, we have we are clear that we have a common position on the vision on how Kanto should look like. I said I’ve always said that design is a nulliprove. If we will live to see to take our grandchildren to go and see, some skyscrapers in Europe and in The United States that will be built with Polish with Polish technical thought with his grandfather. This is his father who was a designer in Malloprop has conceived this facade and I have worked out these contracts.

So we have a huge satisfaction there so that we can boast of such achievements, which few companies in Poland can speak with such satisfaction that they are present in Europe and globally. So I had this vision to lead me, and I have implemented this vision. I am satisfied. But the vision that CEO Przybylski will present shortly, I believe will be a common vision that so to enable to see KNT in ten years, I want to talk about the presentation before it’s shown. So when you ask in ten years about our company in Germany in ten years, they will know us in this sector.

Will if you ask about us in France, they will know us. And, there are possibilities. There are great products in place. It’s a marvelous task, an ambitious task for our the group of managers that will implement the strategy for the next years. I can only say thank you and to be grateful able to work in such a group with such in such good company.

And from all the employees, I don’t want to miss anyone. Also, the Supervisory Board and the owners and you that helped us. So with all my heart, I wish you all the best, and I will support you as much as I can, advising the management board possibly to ensure that the strategy that this year we present today will be implemented so that we can proudly say that this is yet another strategy that’s been implemented by this group, KENTY, that has brought such clear benefits for our shareholders. And finally, I would like to say that I would like to see the pension funds to implement invest all the resources that they have. All the pensioners that will be using this if they these funds had used all the investment money in Kanti, all the pensioners will be much worthy wealthier.

So I would like this strategy to be as clear as possible because this will provide a link to you between you and the it’s a new strategy and the new and I keep my fingers crossed for the strategy, for the people that will implement it at your disposal. And I can talk to you after the conference is over. Thank you very much. And we’d like you to present the assumptions, details of the strategy. I would like to ask Mr.

CEO, Szczybylski to Ron Szczybylski. Thank you very much to the CEO for this introduction and warm words. So as the President has said, the strategy that we show you is an effect of our joint work, a vision that has been there and has been worked out and pre specified. But this was really vision that had to be done. That really was clear from our conversation between the CEO and the management board.

It carried it was as some vision of development, revolution. And the next step is self it’s not really self evident, but it’s a natural development based on this huge foundation that has been built over the years. And also, the bar has been set very high by the existing management board with a capitalization of 8,000,000,000 is a very ambitious starting point. But this starting point for the next stage is imposed so by it has to be more ambitious. That’s the idea.

We need to need to know where we want to build further. We need to grow further. And together, we have a clear, specified vision. And out of these elements that the CEO mentioned, I can confirm, one, which is determination to do it to absolute determination and consistency to do this strategy, which is to build a European, powerful, recognizable and important player in its sector. So going from top Polish league, where we are already now, we want to move the first league in Europe.

So we want Grupacante as a whole body to really be one of the leading players in the aluminum processing and particularly in the construction sector broadly understood. It’s a deliberate decision because we know where the aluminum profiles are consumed, where we can have this growth. And also based on our reflection where we are in which segments or sectors of the market, we have the huge development where we have the strongest, where we have the to where you can develop what we have been building over the years based on extending the value chain vertically and horizontally using the synergy and based on the economic growth in the housing sector, so these will be the consequences.

Unidentified Moderator, Conference Moderator, Kante Group: And this is defined and this is what defines our core business. And we are also not forgetting about our second leg. It means one this is Aluminum Group and the one powerful leg and the other leg, which is the flexible packaging segment. And this is, strategically speaking, a very good diversification tool because, as you know, we have the roller coaster of the economy, and one decision causes that the stock exchange go up and down. And we have these two parts.

We are more resistant to it. In aluminum and construction business, we are more dependent. And as for the flexible packaging segment, so we have diversification in sense of consumption. So these two legs fit into our strategy, and we would like to invest. And as for the flexible packaging, so we are defining whether this is connected with the foil BOPP, which the biggest potential.

So this relates to the big trends. They are widely discussed. This is, first of all, ecology recycling, which, actually imposes, on the sector the use of the monocultures, the materials that are that could

Darius Maniko, Outgoing CEO, Kante Group: be

Unidentified Moderator, Conference Moderator, Kante Group: recyclable. And this indicates the foil. Therefore, we took a decision, and we decided that we will invest in the next production line for the production of foil of the film. So that this so that the values and the recognition of the segment, are reinforcing and, in parallel to the reinforcing of the aluminum group. So speaking about speaking about this, so we here, we mark that we are not exclude excluding the these investments from the packaging segment, but only in this situation when we assume that we have the situation that which will create a big value for the shareholders because of this move.

So in practice, it can mean that we can grow as much as the growth through the acquisition projects, and then the replacement of one asset with the big valuation makes sense. So we could have such scenario or maybe we will just run this business in a long perspective, we as a group. And now important elements of this strategy and this evolution that the Aluminium Group has. So they are included in a couple of elements, which are the natural continuation of our strategy and also the reflection of what we could do to grow further. And the first reflection is that we, as a group, we have a very strong export position because many products are exported and re exported by our customers.

But still, our shares in the foreign markets, especially in big economies of the European Union, are still small. So if we would like to grow, we have to do it abroad, and it must be on the markets of the rich, markets. And so maybe you can also use kind of a crisis on the market for us. So it means that, we shouldn’t waste some crisis. Always, we can use it.

So it should you know, it has to be abroad. So in order to to have this large scale operations abroad, so we have to do it in a more integrated way. So we believe that one group as one strong aluminum group, we can join our efforts, And also our confidence is built over years and the technological backup and not as we are doing now in the in the one or two three segments acting as the independent companies with independent structures on different brands. So the stronger integration within the group within one business will result in this that many functions we can leverage. So it means that extending our value chain.

So we have have influence on the quality of the production and also where we should invest and where we should should create the competences, which are difficult to build because how to manage the operations abroad so we can do it more effectively as one company, as one group, as one strong entity. So this integration of the aluminum group is the first point. The second point is that we would like to put in one hands, in one structure the management of the foreign businesses for these reasons. Today, each segment has the independent companies and manages them independent. Today, we’ll have we’d like to have the situation when the companies are the group companies.

And so then the company will visit, and the group will sell different segment products, and there will be one unit managing this. And this is Alloprof International. This is what was called. And according to the next step that we are talking about, we talk about the Brea Brea and Alloprof because this is this brand that is more recognizable. This this in the in the business world, this brand, not only in Poland, but also has this international recognition and this strength, and we would like to leverage this strength also to other segments.

So we are talking here about the rebranding, whereas a group, we can promote one brand, YJON Pro. The brand, it means Alloprof, of course. This could be with the dedicated sub brands. We call them at Alluprov, Extrusion Alluprov, sun protection. But about one strong brand, we have to talk so that each spends, naughty or euro, will reinforce this brand between the segments and between the countries so that we are this big powerful international player because this is our vision.

And, this growth on the European markets, we would like to gain into in different ways. And this is also important pillar of the strategy for the coming five years. So all so through organically speaking, and also we take into account active, running of acquisition projects. Projects. And both these ways are very important.

And I would like to emphasize here this organic growth element because we do not want to escape into acquisition as some companies do. We believe that each of our businesses could have the robust foundations, robust structures, and has to have the ability of organically growing. And this is our assumption. It means that each of the segments that we will treat as the units could be on its market grow healthy. I will not read the figures, but this organic growth for each of the segments is assumed ahead of the market.

And on the top, to the organic growth, we would like also to be active in acquisitions. We can do this because we have funds and also we are invested in a sense of production capacity. We have EPS and the production possibilities to be used. And as of SS or SPS, buying the company’s sale last year also increased our production capacity. So this was largely extended.

We have to fill it in. We have to scale up. And from this capital intensive growth in Poland, except for the third line for SPs, we would like to derive the financial possibilities to grow through acquisitions. We would like to plan it. We would like to carry out acquisitions which comply with our vision.

So it could be both acquisitions in Poland of the production companies, which could create this production capacity. So it means that they fit into the extension of the value chain, but also they will fit into the building of the Alloproof brand. So they will be around this construction spectrum where we have the role of architects, consultants, and the recognition of this brand matters. And the second growth, which is key from the point of view of the to be on the foreign markets is the foreign acquisitions, and we’re looking for them. We’ll be looking for the acquisitions that will fit into our two basic market segments.

It means ASS and SPS. We will look for other companies which will give us bigger market share and build our relations with their customers. So maybe products are recognizable in these countries. So this will be the necessary element, but our goal is to utilize or harness the production capacity in Poland and in abroad to build distribution. And also, we will be extending the distribution organically within Alloprof International based on the dependent companies, first of all, that we have today in ASS and EPS.

And the acquisitions are a very active accelerator of this process. So it means the organic development is very tedious. So it is very beginning at the beginning because the base is low, so it’s very difficult to build the logistic backup. The acquisition speeds up the entire process. And the acquisition is not about buying the company, but about the integrating of this company and managing this company, which is more difficult than managing the business in Poland because it is more expensive.

The culture are also issues. So in order to do these acquisitions, we have to be ready for that. And coming back to our elements of the change, therefore, this integration of the aluminum business within this one virtual order targeted undertaking so that these companies could be leveraged and to build as one strong entity and to go into this direction. And the rebuilding, remodeling of the group, both structurally and rebranding, rebranding, will take a while. Just following the first years of the strategy, we would like to, be more opportunistic in these acquisitions.

So we are analyzing the interesting companies, but we would like to decide, when we are sure about the acquisitions and that we can manage these companies and integrate them into our group without any further risks at the stage that we are. But in a moment, in two years’ time, we will be ready for a big step. It means that they would like to be very active on the market, and we are searching for very important companies that fit into our concept that will allow us to develop our business and grow our business. And this will be very active action, in the coming period on the strategy. You would like to concentrate on the Western countries?

Darius Maniko, Outgoing CEO, Kante Group: So in the West European country, we’re still looking at The United States, but the also but we take into account the current volatility. But The U. S. Market is very attractive because independent in terms of energy, demography, size. So we will certainly be looking constantly at United States or perhaps other non European markets.

Perhaps they may come and establish a joint venture with local partners because we are aware of the strengths that we have and we’ll certainly be able to we’re really looking for supplementing them with strengths of the local companies. And these are the solutions that we consider very seriously. As strategy element, of course, there is despite these changes variability and the some trends for correcting it. So we believe this is our duty because of taking care of the environment and social issues and also corporate governments. I will not read these small letters there, but it simply means the extension of the implementation of the offers that we’ve been carrying out on the previous strategy.

It is also means raising the bar higher, and we are setting even more ambitious goals in this respect for us. And we will consistently follow this road. And another element, which is a sort of a summary of the strategy in business terms and a bridge to the financial part. This is the dividend issue. We are a dividend issuing company, and we intend to stay this way.

And we can afford it using the money that we have. We want to invest in acquisitions, but at the same time, we want to maintain the existing dividend policy and share 85% of the profit net profit we generate with you. So it’s on the basis of the planned organic growth, we should over the duration of the strategy, we should 2,600,000,000.0 with you. Before I give the floor to the Financial Director, this projection of the financial results that I presented as part of the presentation strategy and were presented by Financial Director is a projection based on organic assumptions. So it’s faster in all the segments that the market does and also projected growth of the company over these five years.

And in addition, we want to add the acquisitions to this. As a result of this nature, it’s difficult to amounts and the date because you have this assumption of the growth financial growth and also you have this growth projection of the projections. Now we’d like to ask the Financial Director to continue. Indeed, the financial goals of the organic growth are very ambitious. And I would only say by way of introduction as regards to macro assumptions.

Several months ago, we hope that the situation will become calmer, that we will have more stability on the market. We don’t have it. But in these turbulent times, the Grupo Acunte has managed to operate really well. As a result, we provide for 1.5% in the Eurozone. And we believe that the external environment will be favorable.

And what Roman has just said, this will ensure in the medium term 2% to 3% growth on the market that we operate on. And the prices of raw materials in all the segments are very have a very aluminum, petrochemicals currency rates have very important impacts on our operations. We assumed at constant levels and that, for example, an average level in 2024. Because financial results, you can be sure that the growth trends that we showed do not stem from the macroeconomic assumptions that we made, but from operational activities, those that increase volume, margin, efficiency. So these are the exemptions that do not support directly the financial results of us.

And the slide that I’m showing that shows to the greatest extent the level of ambitions in this organic scenario of growth, this consolidated sales will grow by 8.6% annually. On the background of the market, that will grow perhaps 23%. This means that in all our areas of activities, we want to double the market average. And this is also a signal, also reflected in numbers, that we need to be more aggressive in exports. For example, the 10.5% annually, our exports sales will grow abroad.

And also, there will be a very significant growth in sales. And this will affect the third production line of this Sand Protection Systems. It will be very prospective investments that will certainly improve. And as I said, for the first quarter, we can see that both sales at home and abroad are growing uniformly because the extruded segment will be provide a very good technological background to the dynamically growing ASS and segment and others. And seven point so this represents 50% more our results represent 50% more, I.

The basis that is provided by 2024. And also the sales come from are carried out abroad. So we’re expecting very high increases. And also, the export will go from 50% to almost 55%. And the number of words about the growth of EBITDA with respect to starting with the extruded segment, which is a litmus paper of the market environment.

For a long time, it’s been under pressure. And it has felt very drastically the margin related pressure of pole demand that has been sustained. And that’s why this dynamic growth can be as much as 9% of EBITDA growth annually because for the brand sector, this is slightly lower and the present results show this difficult situation. So we are counting on a more dynamic rebound. And it is different in the combination of SASSA and SRG.

And this is the segment that has now decreased its results over the last years. Its profits have been growing up all the time. It’s at a very high level now and it’s been supported by very difficult situation in the extruded segment. So it is a segment that is responsible for the largest part of the revenues. So its expansion will be much higher in money and that’s why this growth will be greater.

It has been also supported by the purchase of Selt. We expect some synergy effects and also double digit growth with respect to the baseline. As regards the FPS, we don’t expect too much growth because its growth has been saturated. It will simply mean the conclusion of a project that has been phased in and will be able to grow very dynamically over the last two years, next two years, and our growth will be much greater. And also, after we have inquired, SELT one point five billion debt, that’s why these interest costs on these loans will cause this cost to be slightly higher.

Under deferred tax, the effective rate goes to the nominal one, although this in the we will continue to invest in SBS by way of tax allowances. They will be recognized in 2028 when this project is completed. We want to spend 1,700,000,000.0 over the five years on investments, 1,000,000,000 replacement and partly modernization investments. This is the largest item. It is for the extruded product, mostly dyes, materials that we use in the production and also the extrusions products segment will grow by a method of 30%.

So this will be growth, there will be potential to the level of our operation activities. But as regards development investments, they will focus in the strategy into such segments, partly in ASS. We are finishing the plant in Zwarto and we are increasing proportionally our capacity in varnishing, painting and the largest investment is in FPS. This is the third largest cutting edge, most effective and efficient production line in BOPP firms that corresponds to the market trends, and it will be located in Ossensim, where the previous two lines are the fully using the synergy effect. So originally, this third step was planned.

And now and the when we look look at these three years over the cash flow in terms of what we will generate, 4,600,000,000.0 of cash flow from operating activities also includes increased increased demand for working capital by about 30% or 40% compared with current situation about PLN400000, billion investments, PLN2.6 dividend that we intend to pay to shareholders. So what is less is almost PLN300 million, which gives us hundred million debt, which will be PLN 600,000,000.0 altogether. And as a result, we’ll be able to reduce reduce the net debt than Edouard.

Unidentified Moderator, Conference Moderator, Kante Group: UNIDENTIFIED 1.2. And here, so these are very good parameters that show us that as compared with today, so we will generate higher results, 50% more revenues, 45% more EBITDA. And then we reinforce the situation of financial strength. And here, we are showing, in the scenario where Roman mentioned M and A is considered or the development through additional projects is considered very seriously. So if we can estimate the safe level as for these transactions of net debt to EBITDAS2, so within the strategy, we’ll have around 1,000,000,000.

And if we can increase this factor to PLN 2,500,000,000.0, so then we’ll have PLN 1,700,000,000.0. So this illustrates this is the amount that is comparable with the five years investment plan. So it shows that, additionally, we can considerably strengthen our results of the capital group from this money and not causing any threat to the group’s situation. And in summary, I would like to say about two trends, the international international recognizable, technologically positioned group on European markets with separate segments stabilizing the results for many years, positively influencing the growth. So this is a completed investments in the area of BOPP film.

So it means fitting into the current trends in this segment. And in this variant of the organic growth, as the previous strategy, we are thinking that we are in a position to guarantee the robust growth of, as for the dividend, which on average could give 6%. And then the growths of the share prices, calculating it, with the effectors. So if we can keep these financial ratios, we will deliver also the growth of the share price and of 7% profit on a share annually. And the total return on shareholders on basis of 13% annually, but in plus so this is this area that was mentioned.

So non optional, but rather equal with others other pillars of the strategy resulting from this financial pool that we can save and use. So it means the effects of the other development projects and also transactions M and A. Thank you very much for your attention. Thank you, very much. Now we move to the questions regarding the first quarter and also the strategy itself.

I will start maybe of course, there is only one question, so I would like to read this question. There is so this refers to the first quarter. But, of course, we may go ahead with the questions. The question is about the aluminum systems segment and the current situation of the drop of the prices for aluminum when we know that the segment increased the prices recently. And now with the drop of the prices for aluminum, the market will expect the lowering of the price.

So whether these moves can affect the factors of the aluminum segment? I I would like to answer that this is the question from the competition. So this is the internal policy of regulating prices for ASS, and I think that we should not disclose it. So we are not disclosing it, the decision whether there will be any corrections or not. But the situation is very dynamic, and that temporarily speaking, the aluminum over the last two weeks, the prices for it dropped.

So but it doesn’t mean that we will have the price of $3,000, but on the the can so maybe we’ll move to the questions from you. So is there anyone who wants to ask a question both regarding the quarter or maybe about the element of the strategy? I understand that there was a long presentation. It’s one year one one hour of presentation, and maybe you feel exhausted. So I have a question about the strategy and this acquisition.

So you emphasized the Western Europe and The United States. Can you tell us what you mean by the Western Europe? Which countries? And so it means that you exclude acquisitions in the Eastern And Central Europe. No.

We do not want to be more precise. We talk about the Western Europe because these are the biggest economies and the markets. But today, we do not want to make the declarations whether it will be England, Spain, or any other countries. We are concentrating on the Western Europe, but we are not excluding the Central And Central Eastern Europe. So this is more rather the direction and not the exclusion.

And the question on CapEx. So there there is a big CapEx. Can you tell us what are these investments in ASS? I do not know whether it is that big, but, ASS, of course, this is now being optimized to be taking into account CELTA, but ASS finishes the investments in the Zuarto design flagship product, Alloprov Bis. And, plus the proportionally, the scale of operations, there are such areas as the painting.

So these are the activities we would like to do ourselves, and they will be developed. And this is the most variable segment, wide assortment segment. And there are also very big investments there. There small fragmentary, which over the scale of five years are adding to this amount, but this is not the building of the isolated single production plant. So also I would like to say about this Line four VLBP, what is the investment amount from the 300,000,000 and what would be The US assume in 02/1929?

So I would like to say that when we were you observed the two first investments, so the parameters of this investment are similar. So this very economically effective investment, and this investment also fits into this trend of the effects of the synergy and scale because this build enclose the vicinity of the localized production flow, so the infrastructure, and so on. And one line is practically speaking corresponds with the two existing lines taking into account the technological wear out. So today, it is the most effective, and we can talk about such parameters as the other two. So this line generates a lot of return of FPS three quarters to 80% growth, and it will be commissioned in 02/1928.

So 100% of effects in 02/1929, ’60 percent of effects in 02/1928. And as the previous two lines, so this will be supported with the investment reliefs. And, also, you know that we have this pillar to regulation. And as of today, we are very conservative, and we know that everyone expects, the change in the regulations of this, regard. So but the deferred tax, in considerable amount, it will be recognized in 02/1928.

What could this be amount? So this is this amount that we show in the investment scenario. This is 300,000,000 that we show in FPS. And about the current situation, because as you mentioned, we have unstable macroeconomic situation. So, could you please comment on that on the second quarter and whether the situation is translatable, into your business and if you are seeing which segments.

So this is only negative or you perceive also some positives of this instability, as I could say. So I would say that there is a ten day growing tendency. So from January till today, we can say that this situation on the market is correct or even a little bit better than we expected. So in all segments of the activities, we should reach good results also in the second quarter. Thank you.

And, also, thank you very much to to mister because over so many years, I liked all your reports on Kante Group. And, always, you you you just you were straight to the point. You had very good, projections as to our budget, and we could read this. And but, if we took your report, so we couldn’t say that you were so precise in in your descriptions that we could say that this is our budget. So so you know our company very well.

So thank you very much for all these years of of your work. Thank you very much. Are there any questions? I can’t see nothing. Actually, it was also received from Internet.

So on the basis of the presentations, so I understand that everything is clear. I would like to thank you for your, for coming, and thank you very much also to our, Internet, followers who are listening to our transmission. And, of course, I invite you, to discuss the results after the second quarter, which we’ll organize at the July. And, of course, you are invited to lunch. Thank you very much for your attention.

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