Selena Group, a global manufacturer and distributor of construction chemicals, has released its financial results for the first half of 2022. The company has posted record-high revenues of PLN 921 million, up 16.9% year-on-year. Operating profit (EBIT) has increased by 9.9% year-on-year to PLN 53 million. The Group achieved net profit of PLN 48.6 million (up 22.2% year-on-year), and pre-tax profit of PLN 59.6 million, up 20.8% from the year-ago period.
Selena’s financial results for first half of 2022 were not adversely affected by the geopolitical situation or supply chain disruptions. With its strategy of flexible response to changing market conditions, the company recorded a major increase in revenues and earnings compared to the previous year.
“The robust operating profit for the first half of the year is the effect of our work on product margins and results from market price increases. Cash flows connected with investing in working capital, mainly inventories, certainly posed a challenge during the reporting period. Three factors played a key role here. Firstly, the overall increase in prices: of raw materials, production inputs and finished goods. On the other hand, we have also built up our inventories due to the low availability of some raw materials. The third factor is related to the natural increase in inventories in anticipation of increasing sales,” says Jacek Michalak, CEO of Selena Group.
The solid set of results for H1 2022 is also the result of the sales markets diversification.
“The complicated and uncertain situation in the East mobilized us to increase the Group’s presence in Western markets, where we previously had a smaller part of our business. Investments in Western Europe turned out to be a very good move that enabled us to achieve our business goals and objectives set for this period. We’d like to maintain the market diversification going forward, but we are still observing the situation with hope and count on return to the Eastern markets. As a matter of fact, we are already making preparations to grow sales in the Ukrainian market after the end of the war,” Jacek Michalak emphasizes.
The challenge – resulting from the COVID-19 pandemic and the market upheaval continuing for 1.5 years – is the significant shortage of raw material supplies, including petroleum products, which are among the main inputs for the production of construction chemicals. Some large producers ward off losses by making very frequent, even daily, price list updates. The correlation of crude oil prices with the petroleum products that are significant for Selena Group is not immediate in time, which makes it possible to search for alternative suppliers or commodities.
The rising energy costs are a factor that will certainly be of great importance to Selena and to other companies and industries. The Group is ready to flexibly adjust prices to those increases. Selena is already introducing measures to maintain production continuity, also in the area of bituminous products.
The first half of 2022 saw significant changes affecting the entire construction industry with a slump in demand for products, mainly due to increases in housing loan prices, and with growing construction costs. According to the latest data from PSB Group provided by Builder, the volume of construction chemicals has decreased by 10% and this trend may accelerate in the months to come.
“We cope with the falling demand by introducing innovative products. We also see a major growth potential in the sectors of foam adhesives, hybrid adhesives and sealants. We have recently introduced the next generation Tytan MOCARNY sealant and adhesive, which meet the needs of even very discerning users. In line with the idea of sustainability, we are also putting new, more environmentally friendly products on the market. Also, with those products in mind, during the last six months we launched a biopolymer production installation at the Nowa Ruda plant,” says Roman Dziuba, COO of Selena Group. “We’re working hard on new solutions that fit the concept of sustainable construction. We invest, for example, in products for thermal insulation of buildings. The lines of development for the sector in the coming periods will be marked by methods of reducing the impact of growing costs of heating fuels. This trend will also be supported by EU programs. At the same time, despite the difficult market situation, we are still investing in automation and modern production technologies, increasing efficiency and ergonomics, among other things,” Roman Dziuba adds.
In addition to decisions related to margins and product offer expansion, modernization of production or reorienting growth to Western markets, Selena’s strong financial performance was also helped by the activities aimed at developing employees’ competences.
“We continued training and development programs for our management, organized with the ICAN Institute. We are also preparing to implement a global training program for our sales force. Selena’s management activities were recognized, for example, by the first Polish edition of Best Managed Companies, a competition organized by Deloitte, verifying companies in the areas of corporate culture, strategy, innovation and financial performance. Selena was awarded among the 20 best managed private companies in Poland,” notes Andrzej Zygadło, Chief HR Officer at Selena Group.
