Benefit Systems is well prepared to rebuild its results

The Benefit Systems Capital Group continues its activities that aim at process and cost optimisation. It also adjusts the MultiSport Programme offer to the current regulations and the epidemic situation. At the end of the third quarter, sports cards were used by over one million people in Poland and abroad. During this period nearly half a million employees had access to cafeteria programmes.

05/11/2020

-– The undoubted success of the first nine months of this year was our quick and effective response to changes related to the pandemic, thanks to which we maintained the customer base, optimised costs and developed new, attractive solutions for the users. In this way, we have achieved significant savings, and the experience gained during this time allowed us to efficiently resume operations and systematically rebuild the user base in individual markets. In recent months we have observed a strong trend of returning to training. Currently, it is difficult to estimate the impact of the epidemic on the economy, but many years of experience and actions taken in recent months allow us to be optimistic about rebuilding the results – explains Bartosz Józefiak, Management Board Member at Benefit Systems responsible for the Capital Group’s finances.

In the third quarter, consolidated sales revenues amounted to PLN 313.5 million (-17% Y/Y), operating profit amounted to PLN 33.4 million (-40% Y/Y), while the net profit attributable to the shareholders of the parent company decreased by 32% Y/Y, to the level of PLN 18.1 million. In the first nine months of 2020 Benefit Systems generated PLN 861.0 million of sales revenues (compared to PLN 1,103.7 million in the corresponding period of 2019), operating profit of PLN 42.5 million (compared to PLN 125.7 million a year earlier) and a net loss attributable to the shareholders of the parent company of PLN -20.6 million (compared to PLN 83.0 million of profit for nine months of 2019). The Group's net debt was significantly reduced compared to the previous periods and amounted to PLN 5 million (the net debt/EBITDA ratio was at the level of 0x). At the same time, during the three quarters of 2020 Benefit Systems had strong operating cash flow. In October, the balance sheet was additionally supplied with funds from the bonds issue in the amount of PLN 100 million.

The revenues of the Poland Segment in the third quarter of 2020 decreased by 24% Y/Y to the level of PLN 214.6 million and by 33% over the nine months of 2020, reaching the value of PLN 579.0 million. The segment's results were weighed down by, among others, costs of activities supporting Benefit Systems sports partners. At the end of October this year there were 797,800 MultiSport card users on the domestic market. Currently, the company offers them an extended range of online services and access to over 2,700 sports and recreational facilities operating in accordance with the current Regulation of the Council of Ministers. These include fitness clubs belonging to the Group – 60 selected facilities conduct organised sports activities in an increased sanitary regime.

– In recent months, we have taken numerous steps to ensure financial liquidity within the Group. We have also introduced new sales solutions both in sports cards and B2C passes. We strengthened them with dedicated educational and promotional campaigns, displaying a wide range of services in the MultiSport Programme as well as the offer of our fitness chains and the Yes2move platform as part of the “Pump up your immunity” campaign. We saw the effects of these activities, among others, in September sales results – adds Bartosz Józefiak.

In the Foreign Countries Segment, in the third quarter of this year revenues increased to PLN 90.6 million (i.e. by 11% Y/Y) and in the last nine months of this year – to PLN 262.0 million (i.e. by 13% Y/Y). In foreign markets Benefit Systems currently runs 25 own clubs and over 304,000 people have sports cards. – Foreign companies achieved good results, which was mainly due to cost optimisation and shorter periods for closing sports facilities than in Poland, as well as the effective recovery of the customer base from before the lockdown. Currently, due to the closure of fitness clubs in the Czech Republic and Slovakia, we do not generate any revenues from MultiSport cards and B2C passes, but we managed to obtain rent and salary subsidies for our companies in Croatia and the Czech Republic. After the first quarter of 2021, unless the macroeconomic situation deteriorates significantly due to the pandemic, we expect a return to the double-digit growth dynamics of sports cards in foreign markets – comments Bartosz Józefiak.

In the Cafeteria Segment, where the number of users increased by 10% Y/Y (from 444,300 to 489,600), the turnover amounted to PLN 90.3 million. The impact of the pandemic on this business segment is relatively small.
The quarterly consolidated report of the Benefit Systems Capital Group is available at https://www.benefitsystems.pl/dla-inwestora/artykul/skonsolidowany-raport-kwartalny-grupy-kapitalowej-benefit-systems-za-3q-2020/ .