Outlook
Financial goals planned for the Strategy period
The Company Management Board estimated that as a result of accomplishment of the operating tasks, upon consideration of the investment plan update of 30 July 2021, the consolidated revenue will increase by PLN 1.6 billion by 2025, reaching the level of PLN 5.1 billion, EBITDA will grow by PLN 252 million, to PLN 864 million, and net profit will grow by PLN 129 million, reaching the level of PLN 508 million in 2025(2).
The table below comprises the main financial goals assumed for 2025.
Financial goals for the year 2025
| Consolidated data (PLN million) | 2020 base year | 2020(1) adjusted | 2025F* | Change 2025/2020(1) (%) |
|---|---|---|---|---|
| Sales revenue: | 3,533 | 3,467 | 5,143 | +48% |
| -of which EPS | 1,280 | 1,280 | 2,072 | +62% |
| -of which ASS | 1,605 | 1,605 | 2,286 | +42% |
| -of which FPS (1) | 938 | 872 | 1,070 | +23% |
| EBITDA (2) | 672 | 612 | 864 | +41% |
| Net profit on operating activities | 526 | 466 | 650 | +39% |
| Net profit (3) | 430 | 379 | 508 | +34% |
(1) For comparability purposes the figures have been adjusted for one-off positive effect of the lockdown generated by the FPS in the period from March to October 2020, resulting from lower plastic film imports from the Far and Middle East to Europe, in the amount estimated at PLN 66 million of sales revenue, PLN 60 million of EBITDA and EBIT, and PLN 51 million of net profit (calculated based on the effective tax rate for 2020).
(2)EBITDA – operating profit plus depreciation and amortisation
(3)Net profit attributable to owners of the parent
The above financial goals for 2025 has not been audited by a statutory auditor and have been prepared based on a series of assumptions, expectations and forecasts and is, therefore, subject to the risk of uncertainty and may change due to both external and internal factors.
Below presented are some selected assumptions, expectations and forecasts made in the financial projections for the Strategy period:
- during the Strategy period the business conditions will not change significantly, specifically as regards legal, tax and administrative regulations;
- no extraordinary one-off events will occur, which could not have been foreseen as at the date of this Strategy publication;
- the situation related to SARS-CoV-2 coronavirus spreading will not significantly affect the operating activities of the particular segments;
- the dividend paid out will comply with the policy assumed in this Strategy;
- capital expenditure will comply with the plan assumed in this Strategy;
- the Strategy does not include any major acquisition or divestment processes;
- macroeconomic assumptions;
- average annual GDP growth rate in Poland/in the Euro zone in the Strategy period: ca. 4.9%/6.0% in 2021, and ca. 3.7%/1.6% in the years 2022–2025:
- annual inflation (Poland): 1.5% in 2021 and 2.1% in the years 2022–2025
- average aluminium price: 1,900 USD/ton
- PLN/USD mean exchange rate: 3.69
- PLN/EUR mean exchange rate: 4.35
- USD/EUR mean exchange rate: 1.18
Debt level, investment plans and their financing
| PLN million | Accumulated data for 2021–2025* |
|---|---|
| Cash flow from operating activities | 2,927 |
| Cash flow from investing activities | -1,321 |
| Dividends paid out | -2,002 |
| As at the end of 2025 | |
| Net debt | 919 |
The planned accumulated capital expenditure in the Strategy period will amount to PLN 1,321 million, out of which PLN 768 million will be allocated to development projects serving systematic improvement of processes as well as development of new technologies and products in accordance with the operating tasks assumed by the Capital Group Segments. The capital expenditure plan will be financed from own cash flow from operating activities and from bank loans, whereas safe level of financial ratios shall be maintained during the Strategy period.
The planned level of net debt at the end of 2025 is estimated as PLN 919 million. The financial ratios shall be kept at safe level, as follows:
- net debt to EBITDA x 1.1,
- net debt to equity 48%.
Dividend policy
The Strategy assumes maintenance of stable dividend policy in the years 2021–2025, in accordance with which 60–100% of consolidated net profit generated in the preceding year shall be paid out to the shareholders. In the Strategy it has been assumed that the average annual payout will amount to 85% of consolidated net profit generated in the preceding year. Moreover, the assumption is that in the years 2021–2025 dividend of about PLN 2.0 billion will be paid out, which means a growth of about PLN 0.8 billion compared to the period of 2016-2020. In reference to one share, the amount is going to be about PLN 200, which will provide the shareholders with the average 7% return on shares (with the price per share of PLN 585).
When preparing the recommendation for the General Meeting with regard to the amount of dividend allocated to payout, the Company Management Board shall consider, among other things, the current and expected financial standing of the Capital Group, the amount of dividends to be received by the Company from its subsidiaries, and the value of the actual capital expenditure to be incurred in the year of the dividend payout.
Other major elements of the Strategy
The Strategy assumes organic development of the Grupa KĘTY S.A. Capital Group Segments at the rate exceeding the estimated growth rates of the particular markets.
The Strategy included as well the process of identifying interest among the potential investors in acquiring the Flexible Packaging Segment of the Capital Group of Grupa KĘTY S.A. The process was carried out in 2021 in liaison with an advisor. On 16 September 2021 the Management Board of the Company informed about its decision on rejecting the received offers for the Segment acquisition and closure of the process.