• Benefit Systems Group with a good result of sports cards sale and positive effects of consolidation of the fitness segment.
• Sales revenues of the Benefit Systems Group increased by 26% to PLN 1,527,400.
• In this period the operating profit of the Benefit Group amounted to PLN 155,460,000, which is 18% more than in 2018 (clean net attributable income).
• At the end of 2019, the MultiSport Programme was used by 1,453,400 users in Poland and abroad, while in the first quarter the number of cards increased to the level of 1,548,900.
• The company expects a negative impact of the epidemic on the results in 2020 (commentary).
– We have a good and busy year behind us.We are pleased with the very good increase in the number of MultiSport Programme users and revenues of fitness clubs.The key challenge on the operational side for us was the process of integrating fitness chains in Poland, which we carried out efficiently thanks to the commitment of the entire Fitness Segment team.Last year, we also undertook numerous activities related to the optimisation of purchasing processes, renegotiation of selected contracts, centralisation of functions and increasing sales efficiency.We saw the first positive effects in the second half of last year, although we still have a lot of work to do.Last year, despite many business challenges, the Group's operating profit in 2018 (clean net attributable income) increased by 18% year on year.We also generated strong operating cash flow, and our debt at the end of December was at the level of 0.5x net debt/EBITDA – says Bartosz Józefiak, Management Board Member at Benefit Systems.
At the end of 2019, Benefit Systems recorded a very good result regarding selling sports cards, which reached the level of 1,453,400 (increase by 21% year on year). As many as 1,118,800 of them were serviced in Poland (an increase of 15.2% year on year), while 334,600 were used on foreign markets (an increase of 50.1% year on year). Last year the Benefit Systems Group also continued to invest in the development of its own sports infrastructure (to a limited extent), focusing on 17 club openings in Poland and 6 on foreign markets (161 and 24 own clubs respectively). In this period investment expenses amounted to PLN 152 million.
Last year, the revenues of the Polish Segment increased by 21% compared to 2018 and reached the level of PLN 1,179,700. The increase resulted both from a greater number of sports cards, a growing network of clubs and improved sales at existing facilities. The operating profit of this part of business (clean net attributable income in 2018) increased by 12% year on year.
The Foreign Countries Segment recorded another year with high dynamics of revenues, which increased by over 48% year on year to the level of PLN 322.8 million. The costs of building sales structures and investments in product development are still incurred on foreign markets. – The systematic increase in popularity of the MultiSport Programme outside of Poland confirms that we can successfully replicate our business model in other markets.Last year we observed the high efficiency of our Croatian company, which built a partner network and sales structure within just a few quarters. It also generated a great interest in the MultiSport card both among employers and the card users.Our companies in the Czech Republic, Bulgaria and Slovakia, where we have a more established position, also achieved good results – comments Bartosz Józefiak.
Last year, Benefit Systems Group’s cafeteria platforms focused on increasing the scale of their operations. At the end of 2019, MyBenefit and MultiKafeteria platforms were used by 463,000 people, i.e. 82,000 more compared to the previous year. Turnover on these platforms increased by 27% year on year to PLN 375 million.
Commentary on the current situation related to the COVID-19 outbreak
Despite the very good results in 2019 and the effectiveness of undertaken actions that aimed at the Group’s effective use of market opportunities in Poland and abroad, at present Benefit Systems must face the challenges arising from the closure of sports facilities and fitness clubs in Poland and other markets in connection with COVID-19 epidemic. Therefore, the scope of online services for the MultiSport Programme users is being expanded in Poland, under which active card holders have access to, among others online workouts, including classes conducted by partner facilities. At the same time, Benefit Systems offers its customers in the country a reduction in rates or suspension of cards during this period. The company estimates that in April this year around 70% of cards will be suspended in Poland. On foreign markets, the MultiSport Programme does not provide for online services at the moment. Accordingly, a significant decline in revenues in the Foreign Countries Segment is expected in the second quarter of 2020.
Both in Poland and on foreign markets, during the closing of sports facilities, B2C customers of fitness chains are not charged with any fees for subscription cards. As a result, according to the Management Board's estimates, the epidemic will have a negative impact on the Group's revenues and the operating result in the second quarter of this year. This impact will be partly offset by savings and cost optimisation at the clubs and at headquarters level as well as in foreign companies. However, the final impact of the epidemic on the Group's results is not predictable.
Consolidated annual report
The consolidated, audited annual report of the Benefit Systems Capital Group for 2019 is available at www.benefitsystems.pl/dla-inwestora.
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Benefit Systems S.A. has been operating on the Polish market since 2001. The company created the MultiSport sports and recreation programme, which supports an active and healthy lifestyle of its users. Sports cards provide access to nearly 4,600 sports and recreation facilities in over 650 cities throughout the country. The Company’s sports offer is also successfully implemented in the Czech Republic, Slovakia, Bulgaria, Croatia, and Greece. An important area of Benefit Systems activities is promoting an active lifestyle at every stage of life, which is why the Company undertakes initiatives to encourage physical activity among children, adults, and seniors. www.benefitsystems.pl.
At the end of 2019, Benefit Systems recorded a very good result regarding selling sports cards, which reached the level of 1,453,400 (increase by 21% year on year). As many as 1,118,800 of them were serviced in Poland (an increase of 15.2% year on year), while 334,600 were used on foreign markets (an increase of 50.1% year on year). Last year the Benefit Systems Group also continued to invest in the development of its own sports infrastructure (to a limited extent), focusing on 17 club openings in Poland and 6 on foreign markets (161 and 24 own clubs respectively). In this period investment expenses amounted to PLN 152 million.
Last year, the revenues of the Polish Segment increased by 21% compared to 2018 and reached the level of PLN 1,179,700. The increase resulted both from a greater number of sports cards, a growing network of clubs and improved sales at existing facilities. The operating profit of this part of business (clean net attributable income in 2018) increased by 12% year on year.
The Foreign Countries Segment recorded another year with high dynamics of revenues, which increased by over 48% year on year to the level of PLN 322.8 million. The costs of building sales structures and investments in product development are still incurred on foreign markets. – The systematic increase in popularity of the MultiSport Programme outside of Poland confirms that we can successfully replicate our business model in other markets.Last year we observed the high efficiency of our Croatian company, which built a partner network and sales structure within just a few quarters. It also generated a great interest in the MultiSport card both among employers and the card users.Our companies in the Czech Republic, Bulgaria and Slovakia, where we have a more established position, also achieved good results – comments Bartosz Józefiak.
Last year, Benefit Systems Group’s cafeteria platforms focused on increasing the scale of their operations. At the end of 2019, MyBenefit and MultiKafeteria platforms were used by 463,000 people, i.e. 82,000 more compared to the previous year. Turnover on these platforms increased by 27% year on year to PLN 375 million.
Commentary on the current situation related to the COVID-19 outbreak
Despite the very good results in 2019 and the effectiveness of undertaken actions that aimed at the Group’s effective use of market opportunities in Poland and abroad, at present Benefit Systems must face the challenges arising from the closure of sports facilities and fitness clubs in Poland and other markets in connection with COVID-19 epidemic. Therefore, the scope of online services for the MultiSport Programme users is being expanded in Poland, under which active card holders have access to, among others online workouts, including classes conducted by partner facilities. At the same time, Benefit Systems offers its customers in the country a reduction in rates or suspension of cards during this period. The company estimates that in April this year around 70% of cards will be suspended in Poland. On foreign markets, the MultiSport Programme does not provide for online services at the moment. Accordingly, a significant decline in revenues in the Foreign Countries Segment is expected in the second quarter of 2020.
Both in Poland and on foreign markets, during the closing of sports facilities, B2C customers of fitness chains are not charged with any fees for subscription cards. As a result, according to the Management Board's estimates, the epidemic will have a negative impact on the Group's revenues and the operating result in the second quarter of this year. This impact will be partly offset by savings and cost optimisation at the clubs and at headquarters level as well as in foreign companies. However, the final impact of the epidemic on the Group's results is not predictable.
Consolidated annual report
The consolidated, audited annual report of the Benefit Systems Capital Group for 2019 is available at www.benefitsystems.pl/dla-inwestora.
***
Benefit Systems S.A. has been operating on the Polish market since 2001. The company created the MultiSport sports and recreation programme, which supports an active and healthy lifestyle of its users. Sports cards provide access to nearly 4,600 sports and recreation facilities in over 650 cities throughout the country. The Company’s sports offer is also successfully implemented in the Czech Republic, Slovakia, Bulgaria, Croatia, and Greece. An important area of Benefit Systems activities is promoting an active lifestyle at every stage of life, which is why the Company undertakes initiatives to encourage physical activity among children, adults, and seniors. www.benefitsystems.pl.