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Selena Group on the growth path – impressive performance in the first half of 2021

Grupa Selena – jeden z czołowych producentów i dystrybutorów Selena Group, one of the leading manufacturers and distributors of construction […]

Grupa Selena – jeden z czołowych producentów i dystrybutorów Selena Group, one of the leading manufacturers and distributors of construction chemicals and the owner of the TYTAN PROFESSIONAL brand – from January to June 2021, posted revenue from sales of PLN 788 million, up by an impressive 30.8% year-on-year. This success results from the Group’s high flexibility in adapting to the rapidly changing market reality and consistent delivery of goals. The Group achieved net profit of PLN 39.8 million (up 24.4% year-on-year), and operating profit (EBIT) reached PLN 48.2 million, up 9.4% compared to the same period of the previous year.

For Selena Group, the first half of the year was marked by stable business development and steady implementation of its previously adopted strategy. In the year to June, the Group recorded strong financial performance, and despite the difficulties affecting most economies around the world, continued to grow in key markets. Certain minor adjustments included adaptation of business in selected regions and an increased focus on service improvement for end-users.

The increase in revenue and profit was largely due to the return of demand, which after a temporary drop built up very quickly in the market and over time even began to grow in relation to prior months. The spring of 2021 saw a relatively high demand for construction chemicals in all markets, which stood in contrast to the significant fluctuations in costs, particularly the cost of purchase of raw materials. Selena Group flexibly responded to the rapid changes, adjusting its strategy in individual locations. “We are very satisfied with how well we navigated the period of turbulent changes in the market.

 If the pandemic situation does not worsen significantly during the coming months, we will expect to see further balance in the prices of raw materials. This, in turn, will be conducive to strengthening our sales and market position,” says Jacek Michalak, CEO of Selena Group.

The continued increase in the prices of raw materials for the manufacture of our main product groups was a major driver of our gross profit margin, which stood at 29%, down 4.7 percentage points compared to the same period of 2020. Selena Group’s margin was helped by the scale effect, which cushioned local price fluctuations and major changes in selected markets, while ensuring financial and business security for the whole Group. Although this year the margin decreased as a result of growing raw material prices, the mass of the margin has increased.

The robust performance at the Group level in the first half of this year was also buoyed by further investments in portfolio development and delivery of new products to the market. Selena’s offer was primarily strengthened by e.g. the new product for drywall assembly – Tytan Professional Drywall System. “This innovative solution for joining plasterboards has met with major recognition and great interest from end users.

We’re aware that in today’s highly competitive environment constant improvement of the quality of service is the key to success. For this reason, on the one hand, we steadily introduce new products to our offer, and on the other hand, we are constantly developing our global marketing program, by adding more applications, among other things. We note that investments in this area increasingly boost sales and build user engagement, now not only in analogue channels, but above all in digital ones,” emphasizes Christian Doelle, Chief Marketing & Strategy Officer at Selena Group.

Another example of activities in the area of innovation was the implementation of Tytan WINS systems, which are based on Selena-developed standard for the assembly and insulation of windows and doors. In the first half of 2021, Selena Group also introduced further improvements for end users, who can now benefit from full support of the new digital platform.

Sustainable construction remains an extremely important area of the Group’s growth. In the first half of this year, the Group continued development of environmentally friendly products, thus responding to both legislative changes and the growing market demand. “We are working hard on new sustainable construction projects and are putting much hope in the production processes that are already in place, including those relating to sealants and products for thermal insulation of buildings. Today we are among the top global leaders in the development of modern construction chemicals, and in some segments we offer unique technologies. Our goal is to maintain this position moving forward,” says Christian Doelle.

In the first half of 2021, Selena Group successfully completed its participation in the European Union’s “Horizon 2020” program. As part of it, the R&D department of Selena Labs received grants for the development and implementation of further innovative products. Selena was a leader of one of the projects under the program, which perfectly corresponds with the Group’s strategy of implementing innovation and supporting sustainable construction.

Selena’s outstanding performance is also owed to the efforts of nearly two thousand of the Group’s employees around the world. One of the company’s strategic pillars is continuous investment in staff development with dedicated training for employees, including management teams.

In the following months and years, Selena Group intends to continue its strategy of further dynamic growth, including on the back of increased production capacity. “We have sufficient production capacity to ensure the security of supplies to customers over the next two years. However, we are already thinking of new investments, whose impact will be visible in 2023. Except for the largest chemical installations, we’re able to close most of the investment cycles in two years. Most of these investments will be implemented in Poland, with about a third to be located outside of the country. Invariably, Europe and Central Asia remain the key business markets,” the CEO Jacek Michalak says, adding that the Group is also considering investments outside of Europe. ”We are closely looking at e.g. the United States, which is the market that is currently recording major growth.  We are also considering emerging markets. 18 months ago we invested in Mexico and in retrospect we believe it was a good decision”.

Jacek Michalak, CEO of Selena Group

In order to maintain high efficiency of operations, in the coming months Selena Group will strive to maintain high strategic flexibility, an approach which proved to work very well at the operational level and provided the Group with the ability to quickly adapt to the rapidly changing market reality. Further development is to be also enabled by the economic recovery plans, including the Recovery Fund. “This money will be put on the market in the form of investments that will build further demand for our products. We hope that along with the expected housing development, this will be reflected in increased sales,” Michalak notes.

In the future, continued growth is also to be achieved by an active search for acquisition targets, mainly in Western Europe and Central Asia. “This is an area that we know and in which we can move smoothly. It’s easier for us to compete in places where our market share is already big. However, the pandemic has necessitated more caution and patience in the context of acquisitions. This is why we’re considering our future targets very carefully and in even greater detail. We’re looking for mature, well-established companies that will allow us to quickly increase our share in other markets,” Michalak sums up.

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