ING COMMERCIAL FINANCE POLAND ANNUAL REPORT 2011
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Dear Colleagues, I m pleased to present you the annual report of ING Commercial Finance Polska S.A. for the year 2011. Despite recessionary trends in Europe and rising uncertainty as a consequence of the debt crisis, especially in the eurozone, the factoring market in Poland recorded again double digit growth. The turnover of factoring companies members of Polish Factors Association increased by over 19% in 2011 to 17,9 bln EUR.. At the end of 2011 ING Commercial Finance Polska S.A. has undergone an acquisition process. On 29 December 2011 ING Bank Śląski S.A. and ING Lease Holding N.V. signed an agreement whereby ING Bank Śląski S.A. acquired all ING Commercial Finance Polska shares, effective on 1 January 2012. In 2011, ING Commercial Finance followed its strategic assumptions for 2009-2011 to maintain a high quality of service for the existing Clients and an effective credit risk management. The Company s profit for 2011 increased by 40,1% in comparison to 2010 (highest level in the Company s history ever). I d like to express my thanks to all our clients and factor correspondents for their support and trust. We do hope we will have a fruitful cooperation in the years to come. Andrzej Żbikowski CEO
Introduction ING Commercial Finance Polska S.A. was established in July 1994 as the first company in Poland providing a full range of factoring services. Since March 2006, it is a part of ING Group one of the world s largest financial institutions. With its 14.7% market share, ING Commercial Finance is one of the factoring leaders in Poland. The Company s main strength is the combination of local market expertise with ING s worldwide business solutions. In 2011 ING Commercial Finance Polska introduced some new products just to name a few: Local Government factoring, maturity factoring and invoice discounting. The Company employs top-skilled specialists offering their knowledge in receivables financing and management to diversified companies. ING Commercial Finance Polska is an active member of Polish Factors Association and Factors Chain International. The FCI network allows the Company to offer its customers foreign transactions in cooperation with over 250 factoring companies across the world. The Company s local branches are sited all over the country: in Bydgoszcz, Gdańsk, Katowice, Kraków, Łódź, Poznań, Rzeszów and Wrocław. Market Environment In 2011 the GDP in Poland increased by 4.3% y/y, compared with 3.9% in 2010. This achievement placed the polish economy on the top ranking places not only in the EU but worldwide. The GDP growth rate was largely boosted by private consumption and to a significant extent by investments (mainly stimulated by public spending on infrastructure boosted by EU funds inflows) and accompanied by conservative investing activities of enterprises as a result of the high uncertainty as to the prospects for their products demand. The accelerating growth of GDP in 2011 was accompanied by employment growth in the corporate sector of 3.2% y/y, compared with 0.8% in 2010. In 2011, the average annual inflation rate - measured with the consumer price index - increased to 4.3% y/y from 2.6% y/y in 2010. Due to above the Monetary Policy Council (RPP Rada Polityki Pieniężnej) increased interest rates by 100 b.p. in total to 4.5%.
Factoring in Poland Factoring industry performance shows double digit growth rate with 19,3 %. The volumes of Polish Factors Association members reached 67,1 bln PLN (16 bln EUR) in 2011. Entire market together with non-members of PFA is estimated at 80 bln PLN (17,9 bln EUR), what means that PFA members cover appr. 84% of the polish market. This excellent outcome is partly a result of increased interest in value added factoring products. There were 1,7 mln active SME s registered in Poland by the end of 2010. More and more companies know and make use of factoring services. Acc. to statistics disclosed by PZF, at the end of last year 4100 clients were using factoring as a mean of financing current activity. But more than 81.000 businesses have seen an assignment on their invoice! The level of bank s financing of SME s (such as overdrafts) has dropped in the Q3 2011 from 55 bln Euro by ca 1,2 bln against Q2 2011. Entire factoring market has financed its clients with ca 2,7 bln Euro, which constitutes ca 5 % of the overdrafts credits. Legal environment stays stable and there were not any tax or legal changes affecting factoring. Factoring is offered based on the Civil Code and the assignment for its validity needs notification. ING Commercial Finance strategy in 2011 To sum up, in 2011 ING Commercial Finance effectively performed its primary tasks. The company flexibly responded to developments in the external environment by a further tailoring of products, processes and credit risk management The core developments of last year s operations are summarized below: Development of cooperation with ING Bank Śląski in respect of comprehensive product range for corporate clients and integration of sales channels. Further development of products for the strategic clients segments and Local Government Units Simplification of customer service processes Organizational changes to introduce a customer centricity model.
Financial Position In 2011, ING Commercial Finance Polska SA reported a turnover of PLN 9,85 bln, lower by 10.45% than in 2010. This decrease was was mainly due to an one-off event: the take-over of a significant client by another sister company within ING Group. Taking into account the effects of this one-off event, the Company s factoring turnover increased by 65.62% in 2011. The total assets at the end of 2011 amounted to PLN 1.434,1 m, higher by 92.2% in comparison to prior period. Such a significant increase resulted from gaining several strategic clients characterized by a high turnover. Liabilities relating to loans for financing the factoring operations of ING Commercial Finance Polska S.A. amounted to PLN 986.5 m. The Company is fully financed by ING Group. Total sales revenues amounted to PLN 81.6 m. The main revenues were generated by commissions charged for receivables management and interest on advances paid-out. The Company s expenses mainly consist of loans, whereas the operating costs encompass employees salaries, office rental costs, amortization/depreciation and insurance of trade receivables. The Company s profit for 2011 increased by 40.1% in comparison to 2010 and amounted to PLN 19.9 m (the highest level ever). As at 31 December 2011, the Company employed 77 persons.
BALANCE SHEET (in PLN) Assets 31.12.2011 31.12.2010 Non-current assets 2 435 631 1 575 362 Intangible assets 120 923 10 490 Tangible fixed assets 897 977 647 593 Long term prepayments and deferred costs 1 416 731 917 279 Current assets 1 431 712 652 744 605 369 Short term receivables 1 431 574 247 744 467 568 Short term investments 39 871 41 146 Short term prepayments and deferred costs 98 534 96 655 Total Assets 1 434 148 283 746 180 731 Equity and Liabilities 31.12.2011 31.12.2010 Equity 62 053 877 71 907 464 Share capital 10 000 000 10 000 000 Reserve capital 32 158 693 47 702 101 Other capital reserves 7 172 7 172 Net profit 19 888 012 14 198 191 Liabilities and provisions for liabilities 1 372 094 406 674 273 267 Provisions for liabilities 94 675 92 146 Short term liabilities 1 367 543 034 671 704 111 Accruals and deferred income 4 456 697 2 477 010 Total equity and liabilities 1 434 148 283 746 180 731 PROFIT AND LOSS ACCOUNT (in PLN) Profit and loss account 31.12.2011 31.12.2010 Net revenues and net revenue equivalents 81 611 939 82 166 505 Operating expenses 22 994 246 22 043 200 Profit on sales 58 617 693 60 123 305 Other operating income 5 130 401 4 965 010 Other operating expenses 3 440 696 3 412 036 Operating profit 60 307 398 61 676 279 Financial income 170 742 57 801 Financial expenses 35 805 535 43 792 219 Gross profit 24 672 605 17 941 861 Corporate income tax 4 784 593 3 743 670 Net profit 19 888 012 14 198 191
ING Commercial Finance Polska S.A. Malczewskiego 45 Street, 02-622 Warsaw, POLAND tel.: (+48 22) 558 74 00, fax: (+48 22) 558 74 90 e-mail: sekretariat@ingcomfin.pl www.ingcomfin.pl ING Commercial Finance Polska S.A.; ul. Malczewskiego 45, 02-622 Warszawa; KRS: 0000005577, Sąd Rejonowy dla Miasta Stołecznego Warszawy, XII Wydział Gospodarczy, NIP: 527-10-01-741; Kapitał zakładowy: 10.000.000 PLN (w całości wpłacony)