Press releases

More than PLN 1 billion of annual operating profit of Mercator Medical Group

The Mercator Medical Group, a manufacturer of medical gloves and distributor of single-use medical supplies with its re…

The Mercator Medical Group, a manufacturer of medical gloves and distributor of single-use medical supplies with its registered office in Kraków, has generated record-high financial results in 2020 – over PLN 1.8 billion in revenue, more than PLN 1 billion of operating profit and EBITDA and almost PLN 936 million of net profit. One third of this amount may be distributed to the shareholders in connection with the buyback of own shares.

Selected consolidated financial results:

 

2019

2020

YOY

 

PLN million

PLN million

value

%

Revenues

539.7

1834.2

+1294.5

+240%

EBITDA

24.6

1066.1

+1041.5

+4228%

EBITDA margin

4.6%

58.1%

+53.6 pp

+1174%

Operating profit

7.2

1047.6

+1040.4

+14465%

EBIT margin

1.3%

57.1%

+55.8 pp

+4186%

Net profit/loss

-2.0

935.6

+937.6

-

Operating cash flow

38.5

712.4

+673.9

+1749%

Equity

134.5

1043.1

+908.7

+676%

The situation on the global market of single-use gloves is favourable to the Mercator Medical Group, which has just published its annual report for the record-high 2020 year, surpassing the results of previous years many times over. At the same time, according to earlier announcements, the Management Board recommends the General Meeting to include a payment to the shareholders in the allocation of the generated profit. The recommendation is to allocate the entire unconsolidated net profit (PLN 312), i.e., one-third of the consolidated result, to the buyback of own shares in the price range of PLN 400–770 per share, where the minimum is defined by the last ABB transaction, and the maximum – by the highest listings so far.

– We intend to conduct this buyback in the form of an invitation to sell – for all shareholders, under the same fair and transparent terms. The final decision will, naturally, be made by the General Meeting. However, I am confident that even if the buyback is finalised at the highest of the proposed prices, it will be beneficial to the company because, in our opinion, the shares are fundamentally worth a lot more, and every passing month will bring about an increase of cumulative profits and progress of strategic development projects – indicates dr Wiesław Żyznowski, President of the Management Board, and leading shareholder of Mercator Medical S.A.

We also reaffirm our declaration to keep most of the profit within the Group to ensure the maximum possible growth both in the existing business areas and in new areas. We will expand our distribution operations in Europe and selected countries outside Europe and add new products, market segments and selling methods. We will also prepare for an expansion of our production capability, and, around the end of the year, we will commission the first production lines at our third glove factory. We will, in all probability, make the decision to develop a new business this year, which will be synergic to our existing operations, and which will present us with new opportunities, particularly with respect to innovation and scalability – adds dr Wiesław Żyznowski.

In the context of these plans of development, it is important that Mercator Medical has not only generated record-high profits but was also able to convert them into cash. The operating cash flow on the consolidated level amounted to over PLN 712 million, which means that, at the end of the year, the company had almost PLN 400 million in cash on its accounts, and further PLN 149 million were temporarily invested in units of open-ended investment funds with conservative investment profiles.

- The growing scale of our business and the challenging conditions imposed by the suppliers in the situation of the supply gap on the glove market naturally translate into a significantly increased demand for working capital. Still, we can generate very large amounts of cash, which will also be important to us in future periods – states Witold Kruszewski, Board Member for Finance at Mercator Medical S.A.

It is worth noting that following the growing interest of investors in the Mercator Medical Group, which is reflected in the company's capitalisation and liquidity of its shares, securities of Mercator Medical advanced to the mWIG40 index in June 2020, and the company’s securities futures have been traded on the Warsaw Stock Exchange since October last year. Since December, the company has been included in the MSCI Small Caps index, and during the annual index revision the shares of Mercator Medical advanced in March 2021 to the primary, prestigious index – WIG20. The company and its managers are also recognised and appreciated in many competitions and contests, where dynamic business growth, geographical expansion and strong increase of capitalisation at the WSE are emphasised. On Tuesday, the company was announced the winner of the “Stock Exchange Company of the Year” (Giełdowa Spółka Roku) survey of capital market participants organised by Puls Biznesu in the “Success 2020” (Sukces 2020) category, and it was also awarded the title of the WSE Champion (Mistrz GWE). Mercator Medical and dr Wiesław Żyznowski, founder and president of the company, received the title of the “Family Ambassador of the Year” (Rodzinny Ambasador Roku) from the Forbes magazine. Mercator Medical was awarded a distinction in the Foreign Investment Pioneer (Pionier Inwestycji Zagranicznych) category of the competition “Polish Company – International Champion” (Polska Firma – Międzynarodowy Czempion) organised by PwC Polska and Puls Biznesu. The company debuted in the 22nd edition of the “Lista 500” ranking compiled by Rzeczpospolita and received the Eagle of the Republic award (Orzeł Rzeczpospolitej) in the Debut category; in addition, it was awarded the Investor Without Borders title (Inwestor bez granic) granted annually as part of the European Economic Congress in Katowice to the most effective Polish investors expanding internationally.

At the same time, since the beginning of the pandemic, Mercator Medical has been actively involved in the fight against COVID-19 by donating personal protective equipment from its own portfolio to numerous medical and care facilities. To date, Mercator Medical has already donated over 1.8 million examination gloves and 50,000 face masks to almost 70 different institutions, mainly hospitals, nursing homes, hospices and foundations, as well as to the Police Headquarters, the Material Reserves Agency and the Ministry of Health. At present, the company is carrying out the #TogetherAgainstTheVirus (#WspólniePrzeciwWirusowi) campaign to support medical and care facilities by donating personal protective equipment from its own portfolio.