Value and capital creation model
Value creation model of the Śnieżka Group
- We build shareholder value and regularly pay dividends. We are rated as one of the leaders in communication with the market environment.
- We modernize, automate, digitize and optimize production and logistics processes within the Group, increasing flexibility and efficiency.
- We are a valued employer providing equal pay and development conditions. We promote safety and health concern.
- We incorporate the ESG approach into the Strategy and all aspects of the Group’s operations, as well as we monitor and limit the impact of our activities and products on the environment.
- We develop based on knowledge. At the heart of our business model competencies in product development and brand management can be found.
- We are a reliable, valuable partner – both for our suppliers and local communities with whom we grow and strengthen.
Financial capital
Financial capital is understood as internal and external sources of financing operational activities and investments. It consists of the financial results generated, share capital entrusted by owners, lenders and bondholders, and other types of long- and short-term liabilities.
CAPITAL DATA
| Equity | 374 144 | PLN ‘000 |
| Long-term liabilities | 223 545 | PLN ‘000 |
| Short-term liabilities | 221 097 | PLN ‘000 |
| ROA indicator | 10.1 | % |
| ROE indicator | 24.0 | % |
CAPITAL MANAGEMENT
| Funding sources | The market position and performance of the Śnieżka Group allow it to maintain constant access to verified sources of financing (including several providers of long-term loans) and guarantee a favourable negotiating position. The Group has unique experience in obtaining financing related to ESG goals (SLL– Sustainability-Linked Loan). |
| Capital expenditure | After finalizing a significant investment program, which was implemented between 2018 and 2022, the Company decided to return to the previously used approach, according to which the level of capital expenditure (CAPEX) is balanced with the level of depreciation. This approach enables, inter alia, investing in technologies that counteract the so-called technological debt. Within the Group, the main areas of allocating the capital expenditure include fixed assets and operating activities. |
| Investors Coverage | Taking care of transparency and relationships with its stakeholders, Śnieżka conducts active operations in the area of investor relations. It regularly organizes meetings, chats and videoconferences for capital market participants, and takes advantage of advanced functions of the corporate website to circulate information and materials. |
| Dividend payment | FFiL Śnieżka SA has been sharing its profits with shareholders continuously since 2003, which distinguishes it from companies listed on the WSE. For another year in a row, Śnieżka was classified by the Forbes editorial team in the ranking of Polish Private Dividend Companies. The Company’s shares are included in WIGdiv dividend index. |
CAPITAL RESULTS
| Net revenues from sale of products, goods and materials | 857 773 | PLN ‘000 |
| Profit from operating activities (EBIT) | 121 004 | PLN ‘000 |
| EBITDA | 159 415 | PLN ‘000 |
| Net cash flows from operating activities | 148 194 | PLN ‘000 |
| Net cash flow from operating activities less capital expenditures | 115 969 | PLN ‘000 |
| Number of group meetings with investors in 2023. | 4 | |
| Dividend paid in 2023 to the shareholders of the parent company | 25 236 | PLN ‘000 |
| The value of dividend paid since the debut on the WSE | 504 223 | PLN ‘000 |
Productive capital
Productive capital consists primarily of assets located in 4 countries, thanks to which the Śnieżka Group reaches customers in several markets. The potential of the plants is strengthened by logistics assets, including the Logistics Centre in Zawada near Dębica, launched in 2022.
CAPITAL DATA
| Number of production facilities in Poland | 4 | Lubzina, Brzeźnica, Pustków, Radom |
| Number of production facilities in Hungary | 1 | Bócsa |
| Number of production facilities in Ukraine | 1 | Yavoriv |
| Number of production facilities in Belarus | 1 | Zhodino near Minsk |
| Śnieżka Group Logistics Centre | 44 500 m2 | Zawada |
| Value of the investment program 2018-2022 | 580 PLN mln | Including PLN 270 mln in the Logistics Centre |
CAPITAL MANAGEMENT
| Robotization | Robotization applies to most activities that are burdensome or cause a decrease in efficiency. This translates into a significant reduction in employee workload and improved efficiency. This includes the process of preparing pallets for shipment and the use of autonomous forklifts. The flagship project in this category in 2023 was the robotization of putty palletization at a plant in Ukraine. The Group strives to equalize the level of robotization at the level of all production facilities, including those located outside Poland. |
| Management of the production and warehouse logistics process | Owing to the construction of the Logistics Centre in Zawada, it was possible to permanently transform the distribution model and flatten the production level within a year. Consequently, the impact of seasonality on the Group’s operations was significantly reduced and the needs for employment levels were stabilized. The new Logistics Centre also enabled notable optimization of raw material inventory management. Combined with significant investments in automation and robotization, it has become possible to manage production capacity and inventories in real time. It is possible to package up to 2,000 pallets per day. |
| Digitization | Since 2022 the Group has been benefiting from the largest company’s digitization project in the entire Central and Eastern Europe region. The implementation has radically changed the manner of managing the supply chain. The flow of data between warehouse and production assets has become crucial for order fulfilment, in particular regarding the availability of raw materials. Integration with the systems of most logistics operators cooperating with the Group has also been carried out. |
| Automation | Automation enables to increase the accuracy of recipe reproduction and repeatability of processes, which contributes to the quality of products. |
CAPITAL RESULTS
| Production level | >140 mln kg | of decorative and construction products per year |
| A wide range of products | ~5 000 SKU | stock keeping unit |
| Market position | Śnieżka belongs to TOP3, the largest manufacturers of paints and varnishes in Poland in the segment of decorative products, one of the largest players of decorative paints in Hungary, as well as one of the leaders in the manufacture of construction chemicals and white paints in Ukraine. According to the ranking of the „European Coatings” magazine, the Śnieżka Group is one of the 25 largest producers of paints and varnishes in Europe. In the ranking, Śnieżka is the only company from Central and Eastern Europe. In turn, in „The 2023 Top Companies Report” prepared by „Coatings World”, the Śnieżka Group was classified as the 59th largest producer of paints and varnishes in the world and the only one representing Poland. |
Human capital
Employees are the strength of the Śnieżka Group, and thanks to their commitment and creativity it is possible to build a strong market position and implement new solutions. Śnieżka’s priority is to build a safety culture and provide employees with conditions for continuous development.
CAPITAL DATA
| The number of employees | >1 100 | An international team located in countries where the Group has production assets |
| Employees with an employment contract for an indefinite period | 91.05 % | |
| Percentage of employees participating in upskill training (2023) | 40.4 % | |
| Planned budget for benefits for 2024 | PLN 1 850 | (data for FFiL Śnieżka SA and ToC) |
| Number of issues of the printed internal magazine “In Colour” in 2023 | 3 pcs. | 52 since the beginning of the magazine’s launch in 2006 (data for FFiL Śnieżka SA and ToC) |
| Number of newsletters addressed to employees in 2023 | 99 pcs. | (data for FFiL Śnieżka SA and ToC) |
CAPITAL MANAGEMENT
| Professional development – culture of continuous feedback | Development conversations with employees carried out in recent years are complemented by a culture of continuous feedback. This approach uses tools such as formulating quarterly tasks and regular conversations. |
| Transparent remuneration system |
The evaluation of job positions by the Evaluation Committee is one of the key tools for determining the value of individual positions for the organization and is an element of building a remuneration system. In 2023, the Committee evaluated all positions filled in FFiL Śnieżka SA and Śnieżka ToC. In 2023, two remuneration reviews were conducted, which embraced all employees of both companies. Additionally, as a result of the work of the Evaluation Committee and the comparison of remuneration in companies to the market level, the level of the lowest remuneration was raised above the minimum wage. |
| Employer branding and communication with employees | Dialogue with employees is conducted on many levels. Employees of three key companies regularly received newsletters and the printed quarterly In Colour. For strategic topics, a precisely planned information cascade is planned, in which directors and team managers play a key role. Additionally, employees engage in dialogue through elected representatives (representing the Team in contacts with the Management Board) and the social committee. |
| Onboarding and adaptation process | Onboarding and adaptation at FFiL Śnieżka SA and Śnieżka ToC cover the first weeks of work. The purpose of these processes is to introduce a new team member to the principles of operation of the company and to equip them with the tools necessary for a given position. |
| Development of employee competences | All employees can benefit from training and development initiatives, regardless of age or gender. The main criteria for their availability are the needs and business capabilities of the organization, the need to have specific knowledge, authorizations, skills or competences, and the employee’s development needs diagnosed in the assessment process (consistent with the scope of the position). The internal iWIEM platform is a tool supporting the training. |
| Sharing knowledge | The Group runs the Śnieżka Academy internal trainer program. In the first edition, 8 trainers were selected to train in thematic areas essential for Śnieżka. |
| Digital transformation of the HR area | Solutions in areas such as working time and leave management were digitized, which ensured efficiency in the HR and payroll area. |
| Employee satisfaction survey | In 2023, a multidimensional employee satisfaction survey was conducted. Important aspects of the declared tendency to recommend Śnieżka SA and Śnieżka ToC as employers are the „team and the atmosphere in the company”, remuneration and benefits, work organization, training and development, good prospects for the company as well as the attitude towards the employee and the relationship with the superior. |
| Benefits | The Group offers employees extensive non-wage benefits, e.g. subsidies for group life insurance, employee meals, summer camps for children and foreign language learning. The team also has the opportunity to take advantage of private medical healthcare. |
| Health prevention | 93% of eligible employees (managerial staff and line workers from the locations Brzeźnica, Pustków, Zawada, Lubzina) participated in additional First Aid training. The plants have also been equipped with defibrillators. The “Śnieżka paints the world pink” campaign is held on an annual basis, in which employees are spurred to undergo preventive tests financed by the Group. In addition, team members are offered an extended package of periodic tests. |
CAPITAL RESULTS
| eNPS Level (employee Net Promoter Score) | 6 | With a turnout of 88% |
| Number of training hours | 11 795 h | Number of training hours per employee 26,81. |
| Adjusted wage gap | 3.41 % | Data for Śnieżka SA and ToC |
Natural capital
The Śnieżka Group systematically and responsibly manages the impact of its activities on the natural environment, as well as the health and safety of product users. It develops the organization’s carbon footprint management, implements a number of optimization and reduction initiatives (water, energy) and as part of purchasing processes, analyzes suppliers’ activities in terms of meeting ESG criteria.
CAPITAL DATA
| Water consumption | 55 894 m3 |
| Electricity consumption | 9 583 MWh |
| Gas consumption (heating) | 552 238 m3 |
CAPITAL MANAGEMENT
| Carbon footprint counting and reduction targets | The Śnieżka Group calculates the carbon footprint in the scope of 1, 2 and 3.
For FFiL Śnieżka SA and Śnieżka TOC, a target has been set to reduce greenhouse gas emissions in Scope 1 and Scope 2 (in total) by 45% in 2023 and 50% by 2025 compared to the 2020 level (according to the market-based method). The process of calculating and developing reduction assumptions will cover all Group companies in the future. |
| Green energy | All electricity purchased by FFiL Śnieżka SA in 2023 came from renewable energy sources, which is confirmed by guarantees of origin and documents confirming their redemption issued by the Polish Power Exchange. At the same time, photovoltaic systems were installed in the Group’s companies in Hungary and Ukraine, which will produce „green” electricity from 2024. |
| Saving projects | In 2023, work began on optimizing electricity consumption in production processes. An analysis and assessment of possible measures to increase energy efficiency was carried out. One of them is to shorten the grinding times of raw materials in individual product production processes. In 2023, tests in production departments were initiated. Initiatives are also being implemented to reduce water consumption by closing the cycle and reducing the amount of washings. |
| Risk assessment of the substances used | At the product design stage, operational conditions and risks are assessed, which allows for proper control of threats to human health and the environment. The analysis covers the entire life cycle of the substance, including its formulation, industrial and professional end use, consumer use and use in products. |
| Product certification management | In 2023, the Śnieżka Group expanded its offer of eco-friendly and allergy-free certified products. |
CAPITAL RESULTS
| Total greenhouse gas emissions: Scope of 1, 2 and 3 (market-based method) | 143 620 t CO2e |
| Total greenhouse gas emissions: Scope of 1, 2 and 3 (location-based method) | 149 090 t CO2e |
| % of recycled plastic packaging by weight | >5 % |
| % of industrial waste generated in FFiL Śnieżka SA sent for recycling or reuse, neutralization in order to avoid its disposal in landfills | 100 % |
| (91% in GK) | |
| Share in the sale of eco-friendly and allergy-free certified products. | 38 % |
| Share in the sale of water-based products. | 82 % |
Intellectual capital
The central element of the Group’s business model is not production assets, but competences focused on developing products, managing strong brands and organizing digitally supported processes within the Group, enabling us to always be close to our customers. Intellectual capital consists of recipes and technologies, information management processes built as part of the Change IT project – including feedback from partners and customers – as well as a knowledge management system.
CAPITAL DATA
| Strong, key brands | 6 | Śnieżka, Magnat, Poli-Farbe, Vidaron, Rafil, Foveo-Tech |
| Own Research & Development Centre | 1 | Research and development activities of all companies of the Śnieżka Group are carried out in the Research and Development Centre (R&D). This unit consists of the Research and Development Department and the Quality and Climate Assurance Department. |
CAPITAL MANAGEMENT
| Management of brands and related products | The owner of the commercial brands of the Śnieża Group is Śnieżka Trade of Colours Sp. z o.o. (with the exception of brands belonging to Poli-Farbe Vegyipari Kft.) The company features the following competences: shaping the pricing policy, analysing the market and consumer behaviour and introducing changes to the portfolio. The product development process is always assigned to a specific brand and involves close cooperation between the marketing team, the Research and Development Centre and the team responsible for production. The process takes into account the specificity of individual markets and is built on internal resources, including the market research team. |
| Recipe and production technology management | The essence of the work of the Research and Development Centre (R&D) is to develop recipes and implement new products and technological solutions, which contribute to high quality of manufactured products and their safety for customers and the environment. Thanks to the developed and acquired technologies and automation of production processes, not only is efficiency increased, but it is also possible to reduce the amount of production waste as well as water and energy consumption. Our own research laboratories (including microbiological and chromatographic ones) enable specialized testing of raw materials, recipes and products. |
| Digitization of processes | The Group implemented one of the largest – in terms of scale – digitization process in the region of Central and Eastern Europe. It has streamlined many business processes in all areas of Śnieżka’s operations and is being developed as part of current initiatives and business needs. Its direct effects are the ability to manage knowledge about customers, their satisfaction and preferences – which translates into the product creation process. We facilitate processes and increase efficiency. |
CAPITAL DATA
| High awareness of the Śnieżka, Magnat, Vidaron brands | In the top 5 in its category |
| Number of recipes available in the mixer | >150 000 |
| Annual capital expenditure and operating expenses related to IT (without depreciation) | PLN 14.9 mln |
Relational social capital
In the Group’s business model, relationships are of key importance. Distribution channels are built through them. A stable supply chain requires mature dialogue with entities guaranteeing continuity of production. The Snieżka’s strength as an attractive employer stems from its relations with the social environment, especially on a regional scale.
CAPITAL DATA
| Minimum budget for social activities (2-year cycle) | 1.0 | % of gross profit of Śnieżka SA |
| Śnieżka SA’s expenses on social activities (2023) | PLN 888.4 | 000 |
| Value of the Śnieżka’s Foundation World in Colours project (2023 r.) | PLN 280 | 000 |
| Value of the Śnieżka’s Foundation “Przeogarniacze” project (in one edition) | PLN 51 | 000 |
| Percentage of suppliers informed about the Supplier Code | 100 | % |
CAPITAL MANAGEMENT
| „KOLORATORIUM” | A nationwide social project for primary schools in towns with a population of up to 20k residents. The aim of the initiative is to popularise chemistry among students of grades 4-8 – a field in which Śnieżka specializes as a paint manufacturer. |
| “Przeogarniacze” | A project addressed to fourth grade primary school students. During five 90-minute workshops, issues related to economics, entrepreneurship and pro-social and pro-environmental activities are presented. |
| World in Colours | A comprehensive renovation program of hospital wards, which translates into improved treatment conditions for patients and the comfort of work of medical staff. |
| Relations with suppliers | The Group’s objective is to liaise with business partners who, similarly to Śnieżka, develop in a sustainable manner. In order to be abele to cooperate with the Śnieżka Group, each supplier is required to confirm the knowledge and compliance with the rules of the code of conduct, which are attached in a form of a document to each new agreement with suppliers. Suppliers are required to sign the acknowledgment of the Śnieżka Group’s Supplier Code, thus declaring their readiness to undertake ethical business activities. |
| Dialogue with the environment | We carry out systematic activities to build lasting and transparent relationships with stakeholders, diversifying channels of access and the scope of information to meet their needs, and developing innovative tools. |
| Membership in external organizations | The group focuses on participation in organizations and associations supporting the transformation of enterprises in the field of sustainable development. These are: Polish Association of Paint and Adhesive Producers, Polish Plastic Pact, Polish ESG Association. |
CAPITAL RESULTS
| Number of laboratories funded under the Koloratorium project in 2018-2022 | 34 | In previous editions, Śnieżka funded 34 studios with a total value of PLN 590,000. |
| Hospital wards renovated as part of the World in Colours Program in 2005-2023 | 35 | Including renovation of two hospital wards in 2023 with a total value of PLN 275,000.
The project implemented by the Śnieżka Foundation. |
| Number of students covered by the Przeogarniacze project in 2016-2023 | 1 827 | 1 827 students from 106 fourth grades from 35 primary schools in the Dębica district, which gives 1 144 teaching hours and over 792 hours of education in the field, during classes carried out during educational trips. |
| Percentage of active suppliers who have signed the Supplier Code | 34 % | |
| Percentage of strategic and key suppliers who have completed the self-assessment survey | 61 % |