Financial standing

The Śnieżka Group

The level of the Group’s balance sheet values is influenced by the phenomenon of seasonality related to the volatile intensity of renovation and construction works in particular periods of the year (described in more detail in item 7.6 of the Report).

The Śnieżka Group’s assets

Group’s assets	31.12.2023	31.12.2022	Change (y/y)
Fixed assets, including:	564 088	572 889	-1.5%
– Tangible fixed assets	492 172	496 131	-0.8%
– other fixed assets	71 916	76 758	-6.3%
Current assets, including:	254 698	220 946	15.3%
– Inventory	116 169	124 553	-6.7%
– Trade and other receivables	58 760	65 339	-10.1%
– Cash and cash equivalents	65 665	19 916	229.7%
– other current assets	14 104	11 138	26.6%
Non-current assets classified as held for sale	–	180	-100.0%
Total	818 786	794 015	3.1%

As at 31 December 2023, the value of assets of the Śnieżka Group amounted to PLN 818,786 thousand, which accounts for n increase by 3.1% (by PLN 24,771 thousand y/y) compared to the end of December 2022.

The value of the Group’s fixed assets (representing 68.9% of its total assets) decreased by 1.5% over the year to PLN 564,088 thousand.

The value of the Group’s current assets amounted to PLN 254,698 thousand, increasing by 15.3% compared to December 31, 2022. The main part of the Group’s current assets were inventories valued at PLN 116,169 thousand. Their value compared to the end of the previous year decreased by a total of 6.7%. The second largest item was trade receivables and other receivables worth PLN 58,760 thousand, which is 10.1% lower than the year before. In addition, as at December 31, 2023, the Group held PLN 65,665 thousand cash (increase by 229.7% y/y).

The Śnieżka Group’s liabilities

Group’s liabilities	31.12.2023	31.12.2022	Change (y/y)
Total equity, including:	374 144	321 242	16.5%
– Equity (attributable to the shareholders of the parent company)	347 799	292 942	18.7%
– Equity of non-controlling interests	26 345	28 300	-6.9%
Total liabilities	444 642	472 773	-6.0%
Long-term liabilities	223 545	244 850	-8.7%
Short-term liabilities, including:	221 097	227 923	-3.0%
– Trade and other liabilities	101 448	103 216	-1.7%
– Short-term liabilities on loans and borrowings	77 775	70 904	9.7%
– Other short-term liabilities	41 874	53 803	-22.2%
Total	818 786	794 015	3.1%

As at 31 December 2023, the Group had equity in the amount of PLN 374,144 thousand, i.e. higher by 16.5% than by the end of December 2022. At the same time, its level of external debt decreased. Consequently, the Group financed its operations from its own resources at 45.7%, which denotes an increase of this ratio by 5.2% over the year.

At the end of the reporting period, the Group’s long-term liabilities amounted to PLN 223,545 thousand, which account for 8.7% fall (PLN 21,305 thousand) y/y. Liabilities due after twelve months from the balance sheet date accounted for 27.3% of the balance sheet total.

The Group’s short-term liabilities amounted to PLN 221,097 thousand, lower by 3.0% y/y and accounted for 27.0% of the balance sheet total. Their decline stems primarily from a decrease in the liability for the option to purchase shares in Poli-Farbe (it is included in the short-term item since such a liability may potentially be due in 2024).

Compared to the end of December 2022, the Group’s trade and other liabilities decreased by -1.7% (a decrease of PLN 1,768 thousand y/y).

Put and call options

The Group’s balance sheet includes a put option, i.e. a liability under the option to purchase shares of Poli-Farbe Vegyipari Kft. held by a minority shareholder. It reduces the Group’s equity. The essence of this option is that Lampo Kft. – the other shareholder of Poli-Farbe Vegyipari Kft. – has the right to sell (put option), and FFiL Śnieżka is obliged to purchase the remaining 20% of shares in this company. Details are described in note 2.2.4 of the Consolidated Financial Statements for 2023.

Whereas the call option entitles the Company, in special circumstances, to acquire the remaining 20% of shares.

Fabryka Farb i Lakierów Śnieżka SA

Similarly as in the case of the Group, the level of balance sheet values of FFiL Śnieżka SA is affected by seasonality.

FFIL ŚNIEŻKA SA’s assets

Company’s assets	31.12.2023	31.12.2022	Change (y/y)
Fixed assets, including:	657 287	659 754	-0.4%
– Tangible fixed assets	423 732	422 896	0.2%
– Shares and stocks in other entities	201 476	202 856	-0.7%
– other fixed assets	32 079	34 002	-5.7%
Current assets, including:	175 380	173 054	1.3%
– Inventory	88 071	84 185	4.6%
– Trade and other receivables	72 617	76 879	-5.5%
– Cash and cash equivalents	745	1 547	-51.8%
– other current assets	13 947	10 443	33.6%
Total	832 667	832 808	-0.0%

As at 31 December 2023, the value of Company’s assets amounted to PLN 832,667 thousand and was at the same level as at the end of 2022.

The value of the Company’s fixed assets (representing 78.9% of its total assets) decreased by 0.4% during the year to PLN 657,287 thousand. The greatest contributor to this was the decline in other fixed assets by PLN 1,923 thousand (-5.7% y/y) resulting mainly from the redemption of intangible assets.

The value of the Company’s current assets amounted to PLN 175,380 thousand, i.e. it was 1.3% higher than as at December 31, 2022. The core assets were inventories, which were 4.6% higher than in the previous year, valued at PLN 88,071 thousand. The increase in inventories, on the one hand, is a derivative of the increase in raw material prices, which translates into higher prices of finished products in stock. On the other hand, it is the aftermath of optimization of supply chain management, including: launching a logistics centre and investing in the digitization of the supply chain. The second largest current assets were trade and other receivables (PLN 72,617 thousand), which decreased by 5.5% compared to 2022.

At the end of December 2023, the Company had PLN 745 thousand cash and cash equivalents (decline by 51.8% y/y) and PLN 13,947 thousand of other current assets in the form of income tax receivables.

FFIL ŚNIEŻKA SA’s liabilities

Company’s liabilities	31.12.2023	31.12.2022	Change (y/y)
Equity	266 850	223 175	19.6%
Total liabilities	565 817	609 633	-7.2%
Long-term liabilities, including:	415 378	473 549	-12.3%
– Long-term interest-bearing loans and borrowings	402 239	464 472	-13.4%
– Other long-term liabilities	13 139	9 077	44.8%
Short-term liabilities, including:	150 439	136 084	10.5%
– Trade and other liabilities	63 491	69 509	-8.7%
– Current portion of interest-bearing loans and borrowings	75 417	58 094	29.8%
– Other short-term liabilities	11 531	8 481	36.0%
Total	832 667	832 808	-0.0%

As at December 31, 2023, FFiL Śnieżka SA financed its activities in 32% from its own funds, which denotes a decrease of this ratio by 5.2% compared to 2022. This is the result of a reducing the level of external financing.

At the end of the reporting period, the long-term liabilities of the Company amounted to PLN 415,378 thousand (decrease by PLN 58,171 thousand y/y) and accounted for 49.9% of the balance sheet total. The Company’s short-term liabilities, however, increased by 10,5% (PLN 14,355 thousand). This balance sheet item was largely affected by the increase in the Company’s current credit liabilities by PLN 17,323 thousand (up to PLN 75,417 thousand), as well as an increase in other liabilities by PLN 3,050 thousand (up to PLN 11,531 thousand), which resulted mainly from the increase in the liability under options for the purchase of shares owned by minorities. Pursuant to the agreement of acquiring 80% shares in Poli-Farbe, the Sellers are entitled to put option, under which 2 years after the completion of the first stage of the Transaction, Śnieżka is obliged to acquire, at the Sellers’ request, the remaining 20% shares in Poli-Farbe.

As at the balance sheet date, the Company’s trade liabilities decreased by 8.7% (by PLN 6,018 thousand y/y).

As part of the liabilities presented in the report, the Company has a loan from its subsidiary – Śnieżka ToC, which is an element of liquidity management in the Group. The total value of this loan is PLN 233,143 thousand including PLN 231,806 thousand (long-term liability) and PLN 1,337 thousand (short-term liability).

Sales volumes

Cash flows