Letter to Shareholders

Letter to Shareholders

Dear Sirs! The year 2015 was again a year full of challenges. Owing to the increase in the competition on the market and climate changes in Poland we continued the reconstruction of the business with the history of over twenty years.

In the whole of 2015 we experienced a drop in turnover by 1.4% YoY. In the winter – summer – fall season (Q2 and Q3) we obtained a 3% increase in sales. However in the main winter months we faced a decrease (-5% in January, -9% in December YoY).

Our actions – optimisation of the retail space, sales focused on the whole-year categories, saving costs incurred by the economic activity (on the comparable stores by over 4%) – were productive; after three quarters of the year 2015 we managed to reach the gross profit of PLN 688,000 and EBITDA PLN 6,912,000. This positive trend of improving results was ruined by the lack of winter aura and poor sales by the end of the year. Only in December 2015 the Company obtained the income lower by 9.2% YoY (mainly due to the poor sales of winter goods), which significantly decreased the margin on the stores.

In 2015 we developed EBITDA of PLN 5,079,000, whereas the gross start had amounted to PLN 3,811,000. The main reason for the lower financial outcome in 2015 was obtaining the margin on sales lower by PLN 1,495,000 in YoY terms. Lower margin was the result of poor sales of winter goods (particularly in December 2015) and the sale of seasonal products, which only decreased the stock as at 31st December 2015 by 15% YoY – the positive effect of this action, that is the increase in the margin will be seen in 2016.

Again, for the second consecutive year on-line sales on our internet platform, esklep.intersport.pl increased. We want to invest much in this form of selling; hence in the fall of 2015 we had started advanced project works in order to implement a state-of-the-art Multi-channel Commerce platform, which will be launched in the middle of 2016.

We are looking forward to the year 2016. Our customers are more and more aware – want to be “fit” and needs professional products in order to achieve it. Not only is the price the matter, but also the quality – thus “Intersport” stores with its good products and comprehensive service shall become more and more significant. Besides the customer satisfaction, in 2016 we aim at improving the financial results and the increase in margin shall become the leverage.

Yours sincerely
Artur Mikołajko
The President of INTERSPORT Polska S.A. Management Board

sport to the people