DEVELOPMENT STRATEGY FOR THE YEARS 2020-2022
The Management Board of MOSTOSTAL ZABRZE S.A. on March 18, 2020, adopted the “Development Strategy of the MOSTOSTAL ZABRZE Group for the years 2020-2022” (“Strategy”), which on the same day has been approved by the Company’s Supervisory Board.
The main themes of the Development Strategy for the years 2020-2022:
- Actively searching and focusing on the most attractive markets (reallocation),
- Implementation of effective processes of recruitment, assessment and staff development,
- Increasing the efficiency of the entire organization.
The objective of the development strategy is to increase the net profit from operating activities (excluding extraordinary events) and to obtain positive cash flow at the level of net profit. In this area, we intend to focus on maximizing the gross profit on sales and reducing general and administrative expenses.
The aspirational objective is to achieve a net result of PLN 20 million during the implementation of the Development Strategy. Due to the four macroeconomic risks listed below, the deadline for achieving this objective has not been precisely defined:
- the global economic recession as a result of the continuing pandemic,
- problem of obtaining qualified human resources from the domestic market,
- climate changes that may directly or indirectly influence the profitability of production (investments) through regulations,
- climate changes that may directly or indirectly impact on the profitability of production (investments) through regulations,
- the possibility of restricting access to foreign markets (protectionism).
We plan replacement and development investments at the depreciation level. It does not apply to possible acquisitions of other companies or organized parts of enterprises, which – if they occur – may exceed the value of current investments.
Assumption of a global recession
We forecast a global recession resulting from the pandemic that we are preparing for. We assume that in the coming years the level of private investments will be much lower than in the previous years. However, due to cost pressure, the transfer of production and design from Western Europe to Poland will be continued. Therefore, direct and indirect exports will grow. The weakening zloty will improve the profitability of exports
We plan to strengthen relationships with key clients from Western Europe and develop cooperation, including the expansion of export activities to Switzerland (repairs and services for waste incineration plants), development of sales of repair and maintenance services at refineries, power plants and waste incineration plants, mainly in Western Europe. We assume greater availability of direct employees, although we are still focused on acquiring employees from the East.
Strengthening the financial position of the Mostostal Zabrze Group
We rebuilt the stable cash position of the Mostostal Zabrze Group – we reduced our net debt to a low level and improved the debt structure. We want to maintain this good position by managing working capital and selling non-productive assets, but above all by generating positive cash flow from operating activities.