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Impel Group - maintained growth rate and preparations for changes in labor costs in 2016

16 f 2015

Impel Group - maintained growth rate and preparations for changes in labor costs in 2016

The stable growth in the Facility Management segment and the noticeable improvement in the Security segment recorded nearly an eight percent increase in consolidated revenues from sales of the Impel Group in the first half of 2015 which amounted to PLN 873.125 million. The largest domestic provider of outsourcing services counts on the positive acceptance of new legal regulations significantly affecting labor costs in the service industry.

In the first half of 2015 the Impel Group significantly increased sales in the Security segment - revenues amounted to PLN 265.4 million and were by 13.6% higher in comparison with the corresponding period last year - The second quarter confirmed the increasing trend observed in the first three months of 2015. We assume that our market position and the change in public procurement regulations, thanks to which the price is no longer the only criterion for selection, will result in a sustained increase in this segment of our business - said Wojciech Rembikowski, Vice President of Impel S.A. The new regulations abolish some factors that adversely affected the situation in the largest segment of the Impel Group’s operations, i.e. Facility Management. In the first half, it recorded nearly 4 percent increase in revenues whose value exceeded PLN 581 million.

On 13 August 2015 the amendment to the Public Procurement Act and to the Act on the Social Insurance System was published. The new regulations allow to bring forward the process of renegotiating contracts in progress, so that the negotiations with customers could be finished till the end of this year (originally, the regulations assumed the end of this process in June 2016). The change will allow to introduce the valorization to the public procurement market related to the additional costs resulting from the extension of compulsory contributions from civil-law contracts before these regulations come into force, i.e. from 1 January 2016.

As one of the largest employers, for years we have been involved in initiatives aiming at the protection of the labor market in Poland. Its stability and balance are conditions for the development of not only the Impel Group, but also of the entire economy. As a market leader in cooperation with employers' organizations, we take actions to create such a labor market where an employer and an employee are partners in dialogue with a contracting entity. To make it possible, we need the law that will not surprise entrepreneurs and will help to create a stable climate favorable to partnerships. We will support all actions resulting in an increase in remunerations for employees, so that the minimum wage will become market reality in services. I am convinced that market rates, especially in public procurement, will secure the minimum wage to every employee in Poland because I believe that political declarations will be fulfilled - said Grzegorz Dzik, President of Impel S.A.

Sales increased by more than 40% as a part of other operations of the Group which is not included in the two main segments. It resulted from the development of highly specialized services for business in which the Impel invests under the new strategy. In December 2014, the Impel Group acquired 51% of SI-Consulting’s shares which recently has finalized the implementation of electronic circulation of purchase invoices (EOF) at the headquarters of the company and in selected branches of PGNiG S.A. Ultimately, thanks to the continued cooperation with SI-Consulting, the electronic circulation of accounting documents will be fully implemented in all branches of PGNiG S.A. - We want to develop this field of our business. It is characterized by higher profitability and is less susceptible to turbulence on the labor market of low-skilled workers - said Wojciech Rembikowski.

- Higher revenues of the Impel Group and selective approach to newly concluded contracts have consolidated the stability of the company's results in comparisons excluding one-off property sale transactions and increasing the result of the first half of the last year by PLN 4.3 million. The consolidated operating profit after the first half of 2015 was slightly lower than in the previous year (PLN 21.1 million as compared to PLN 22.3 million in 2014). After excluding the one-off transactions, the operating profit increased by more than 17.4% - explained Vice President Rembikowski.

The consolidated semi-annual net profit attributable to shareholders of the Parent Company amounted to PLN 9.6 million as compared to PLN 9.9 million in the previous year.





Impel is conducting the project preparing both the organization, market and customers for the new working conditions in Poland coming into force on 1 January 2016 which will increase its costs in result of the inclusion of civil-law contracts with social insurance contributions to the amount of up to the national minimum wage. It is the largest one-time change of labor costs on the Polish market since the political transformation and at the same time, the most marked on the labor market in competition with the lowest pay.

The valorization of contributions for services is necessary and inevitable, therefore we pay greater attention to actions of informing and explaining the new market rules to customers and employees in which we will work from the beginning of 2016. We jointly try to develop new, optimal parameters for performing work and providing services - adds President Grzegorz Dzik.