Annual report 2018
The Śnieżka Group is formed by companies operating in concert and connected by ownership and production links Comprehensive organization and responsible management of resources and procurement translates into efficient operation of the Group and higher profits for Shareholders. The cooperation involves mutually complementary activities, exchange of know-how and synergistic benefits. Fabryka Farb i Lakierów Śnieżka SA plays a leading role in these processes.
FFIL ŚNIEŻKA SA, as the parent company, performs control functions in the supervisory bodies of the subsidiaries. In addition, it establishes a development strategy and coordinates the development of the entire Group in all aspects of its operations. Each member company enjoys decision-making autonomy, as long as the decisions are consistent with the Group’s strategy and the subsidiaries’ key functions cooperate closely with their counterparts in the Parent Company. All transactions with related entities made by the Company and its subsidiaries are performed at arm's length.
Fabryka Farb i Lakierów Śnieżka SA was entered into the National Court Register under number 0000060537 at the District Court in Rzeszów, XII Commercial Division of the National Court Register. The company was registered with the Central Statistical Office and received the following REGON number: 690527477 and tax identification number: 818-14-33-438.
The Company’s seat is located in Warsaw:
Warsaw– 00-854 Warsaw, Aleja Jana Pawła II 23, mazowieckie province
Phone - headquarters: 14 681 11 11 or 22 221 93 19
Fax: 14 682 22 22
www.sniezka.pl
The Company’s production facilities are located in:
Table 17.
A list of entities comprising the Group consolidated or valuated using the equity method (as at 31.12.2018)
In 2018 the Śnieżka Group’s structure was affected by the following changes:
On 16 February 2018 the Management Board of FFiL Śnieżka SA accepted the offer submitted by Radomska Fabryka Farb i Lakierów S.A. to subscribe all the shares of E series through private subscription. As a result of the signed agreement, the Company acquired 2,500,000 shares in the share capital of Radomska Fabryka Farb i Lakierów SA of PLN 1.00 each - preference with a voting right, where each share entitles to two votes at the general meeting - at the issue price equal to the nominal price. At the same time, the Company’s Management Board decided to offer the shareholders of Radomska Fabryka Farb i Lakierów SA the purchase of shares of A, B, C and D series in the amount of 1,601,580 shares by 31 December 2018 - in order to obtain the largest possible share in the company's share capital until the end of 2018.
The Company informed about it in report no. 3/2018 of February 16, 2018.
After registering the share capital increase on 28 March 2018, the E series shares belonging to the Issuer corresponded to 60.95% of the share capital of Radomska Fabryka Farb i Lakierów SA. As a result of the E shares acquired, the Company was entitled to 36.57% of votes at the general meeting of Radomska Fabryka Farb i Lakierów SA, as at the day of the share capital increase.
In the Company’s opinion it has exercised control over the above-mentioned entity since the registration of the share capital increase on 28 March 2018, due to the fact that it exercises control over the entity (including the option of independently managing its financial and operational policy and is exposed to its variable financial results and may influence them). Since the control was taken over, the Company consolidated the financial statements of Radomska Fabryka Farb i Lakierów SA.
On June 28, 2018 the Company obtained the status of parent company toward Radomska Fabryka Farb i Lakierów SA. The Company informed about it in report no. 19/2018 of February 28, 2018.
As at December 31, 2018 and the day of publishing the report, the shares owned by the Company provided 89.44% of votes at the general meeting of Radomska Fabryka Farb i Lakierów SA and corresponded to 91.06% of its share capital.
September 28, 2018 - based on the entry in the Register of Legal Persons of the Russian Federation maintained by the Federal Tax Service - the liquidation process of Sniezka EastTrade Sp. z o.o. was completed.
The Company informed about it in report no. 21/2018 of October 31, 2018.
The scope of activity of Sniezka EastTrade Sp. z o.o. was to promote the Company's products as well as conduct advertising and marketing activities on the Russian market. Due to insignificant scale of operations, Sniezka EastTrade Sp. z o.o. was not subject to consolidation in the Śnieżka Group’s financial statements.
On February 15, 2019, the Company acquired 0.96% shares in Śnieżka-Ukraina Sp. z o.o. in Yavoriv, for a price negotiated on the basis of an accounting value of USD 117,150 (one hundred seventeen thousand one hundred and fifty US dollars) from a partner - Żanna S. Kardasz. After acquisition of the shares, as at the date of publishing the Report, FFiL Śnieżka SA held 83.48% of shares in Śnieżka-Ukraina Sp. z o.o. in Yavoriv.
FFiL Śnieżka SA
Fabryka Farb i Lakierów Śnieżka SA is the market leader of paints and varnishes in Poland. The Company achieved such a high market position in over 35 years of its activity - the beginning dates back to 1984. The Company's roots are linked with the Podkarpacie region, where the Group's core production facilities and state-of-the-art Research and Development Center have been operating in years. Since 2003 the Company - as the only one in the industry - has been listed on the Warsaw Stock Exchange
Fabryka Farb i Lakierów Śnieżka SA is a leading brand of paints and varnishes both in domestic and Central and Eastern Europe markets. The portfolio of the Śnieżka brand is comprised of products for protection and decoration of various substrates, both for internal and external applications. The offer includes, i.a. paints for walls and facades, products for painting wood and metal, putties for walls and wood, as well as thermal insulation systems.
The Company conducts on-going research and development activities aimed at improving the market offer, which is possible, thanks to work of its own specialized research laboratories being a part of the Research and Development Centre in Brzeźnica. The Research Laboratory accredited by PCA, No. AB 855 is one of them, which obtained in 2007 the accreditation of the Polish Centre for Accreditation and became the only facility of this kind in the industry.
FFiL Śnieżka SA’s products are available in many distribution channels. Apart from various distribution channels the dominant role is played by the independent one, under which a network of "Company Stores" and "Company Showrooms" has been operating for several years. These are retail outlets that live up to specific requirements, created in partnership with our business clients based on a ready-made business cooperation model. The company applied a similar model on the Ukrainian market where it established a chain of partner stores.
Also, the Company liaises with international and local DIY chains (DIY channel). Its products can be found in Leroy Merlin, OBI, Castorama, Jula, Bricomarché chain stores as well as in outlets of the PSB Group.
Multi-channel distribution is one of the assumptions of the Company's sales growth strategy, and at the same time it minimizes the risk associated with too high reliance on one distribution channel or distributor.
On foreign markets, the sales of the Company's products is carried out primarily through a middleman model. Its products are distributed by wholesalers, retail stores and DIY stores.
The Company’s activity is based on a clearly defined set of values, as well as several years of involvement in supporting the society as part of programs and projects in the area of corporate social responsibility and through the activities conducted by the “Your Opportunity ” Śnieżka Foundation.
On December 31, 2018, the Company employed 773 employees (731 at the end of 2017), which accounted for nearly 70% of the entire Group's team.
Śnieżka-Ukraina Sp. z o.o. is a manufacturer of paints and putties as well as the market leader in the segment of the waterborne paints in Ukraine. Its products are sold under the Śnieżka brands.
Śnieżka Ukraina Sp. z o.o. is the main distributor of FFIL ŚNIEŻKA SA’s products on the local market. The Company sells products mainly through an independent channel (wholesalers, retail outlets) and a DIY channel - local DIY chains, such as Epicentr, Nowa Linia, and Leroy Merlin.
Śnieżka Ukraina Sp. z o.o. with its seat in Yavoriv was established in 1999.
On December 31, 2018, the Company's share capital amounted to UAH 415,7 thousand and was not subject to change compared to the end of 2017.
On December 31, 2018, the Company employed 213 employees (207 at the end of 2017).
Śnieżka-BelPol Wspólna Sp. z o.o. ("Śnieżka-BelPol") is a significant manufacturer of putties, paints and varnishes on the Belarusian market with a predominant position in the segment of gypsum putties. It sells its products under the Śnieżka brand via wholesale stores, DIY chains and retail outlets.
Śnieżka Ukraina Sp. z o.o. with its seat in Zhodino near Minsk was established in 2003.
On December 31, 2018, the company's share capital amounted to BYN 293,9 thousand and was not subject to change compared to the end of 2017.
On December 31, 2018, the company employed 53 employees (55 at the end of 2017).
The scope of activities of TM Investment Sp. z o.o. is:
TM Investment Sp. z o.o. with its seat in Warsaw was established in 2010.
As at December 31, 2018 the company’s share capital amounted to PLN 168,558 thousand.
At the end of 2018 the company employed 7 employees (no changes compared to the end of 2017).
Radomska Fabryka Farb i Lakierów SA is a company with 100 years of tradition. It specializes in the production of anticorrosive undercoats and topcoats for heavy-duty anticorrosion application in the heavy industry. It also produces alkyd, polyvinyl, polyurethane, epoxy and heat-resistant systems. Currently, it is one of the most recognizable brands in its industry in Poland.
The company also manufactures products for a wide range of customers. Rich in colour, tailored to private recipients’ needs, they are produced following the same standards and recipes as highly specialized industrial paints. The most recognized brands by sellers and customers are as follows: Radach, Betonmal, “Gruntoemalia na rdzę” and Raftalux.
Rafil's products are sold through a distribution network consisting of wholesalers and contractors from all over the country.
In the first half of 2018, restructuring activities were initiated at Radomska Fabryka Farb i Lakierów SA aimed at optimizing costs (including purchase costs of raw materials and employee costs). A group layoff plan was announced, reducing the number of full-time jobs from 120 as at the beginning of 2018 to 66 as at the end of 2018. The company is also working on changing the product portfolio.
Radomska Fabryka Farb i Lakierów SA was established in 1995.
As at December 31, 2018 the company’s share capital amounted to PLN 4,104 thousand and consisted of 4,101,580 shares of a nominal value of PLN 1.00 each.
On February 10, 2018, the company's share capital was increased from PLN 1,602 thousand to PLN 4,102 thousand, i.e. by PLN 2,500 thousand by issuing 2,500,000 (in words: two and a half million) registered shares of E series of a nominal value of PLN 1.00 each. The share capital was increased under private placement.
On December 31, 2018, the company employed 66 employees.
Cooperation with related entities also applies to Plastbud Sp. z o.o. in Pustków, which manufactures Colorex pigment pastes and dyestuffs for Śnieżka’s colour systems. Plastbud Sp. z o.o. is a supplier of some raw materials and goods.
7
production facilities
25
export markets in 2018
| Name | Seat | Scope of activity | Consolidation (and % in the share capital) |
|---|---|---|---|
| Śnieżka-Ukraina Sp. z o.o. |
Ukraine Yavoriv Prywokzalna 1A , |
manufacture of paints, varnishes, solvents, mortars, putties etc., wholesale and retail sales of construction materials | Full consolidation (82.52%) |
| Śnieżka-BelPol Wspólna Sp. z o.o. |
Belarus Zhodino, Dorożnaja 3/1, |
production of putties and preservatives | Full consolidation (99%) |
| TM Investment Sp. z o.o. |
Warszawa Al. Jana Pawła II 23 |
management of trademarks | Full consolidation (100%) |
| Radomska Fabryka Farb i Lakierów SA |
Radom ul. Czarna 29 |
manufacture and sales of anti-corrosive products | Full consolidation (91,06%) |
| Plastbud Sp. z o.o. | Pustków 164 b | manufacture of Colorex pigment pastes and dyestuffs for Śnieżka’s colour systems, a supplier of some materials and goods for the Group | Equity method (10.07%) |
