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The Impel Group - strategy of growth in the face of significant changes in the labour costs

31 f 2016

The Impel Group recorded over 12% increase in consolidated revenue from sales in H1 2016 totalling PLN 977.1. a considerable impact on the growth of sales was exerted by effective valorization of contracts following the regulations concerning imposing social security contributions for fixed-term agreements as of January 2016.

Wojciech Rembikowski, Impel SA Financial Director says – Revenue from newly acquired contracts and good valorization of contracts ensured stability of the Company’s results. Consolidated profit on operating activity after H1 2016 amounted to PLN 19.1 million and was lower by 9.5% than last year. Net consolidated profit was PLN12.9 million and rose by over 33%.

In August this year new regulations came into force which will have tremendous impact on the labour market.  The President of the Republic of Poland signed an act on amending minimum wage for work. The act sets the hourly rate at PLN 13 (gross amount) for workers under civil law employments contracts as of January 2017. There follows increase in labour costs, on the one hand, and increased minimum wage resulting from increased hourly rate for fixed term contracts, and increased minimum wage which according to proposed change will total PLN 2,000 (gross amount).

Grzegorz Dzik, President of Impel SA says: For the Impel Group this is another challenge following imposing social security – as of 2016. We perceive this important statutory regulation a change for further standardization of the labour market in services. A year ago we began negotiations of contracts due to increasing costs as the costs of obligatory social security contributions rose to the level of national minimum wage. Despite the termination of part contracts provided, where our customers did not agree on rise in prices for services, due to our determination, we finally completed 96% of the valorization target. As of 2016 we systematically observe we notice decrease in impact on minimum wage increased hourly rate for fixed term contracts on results. Statutory increase in wages for fixed term contracts as of 2017 is a huge challenge, but at the same time it is a great opportunity for the Impel Group and its employees. Both introduced changes mean an increase in costs, but also improve security and the wages of staff employed on contracts, therefore exert positive influence on the quality of provided services. The condition for success of valorization of prices for services, enabling valorization of prices for services, and allowing to conform to minimum wage, will be the knowledge of the customer concerning the statutory reasons and inevitability of growth of labour costs on the market. We believe that the customers will accept price proposals, which result only from the minimum wage amendment Act – says Grzegorz Dzik, President of Impel S.A. adds in our approach we take on on secure provision of services, and an optimal shaping od costs of contracts due to new statutory costs of labour. We are well prepared, have necessary experience, create new organization solutions, and conduct active communication market policy concerning changes. This is a chance for those companies which perceive outsourcing as providing the customer benefits thanks to optimization of outsourced process, and also seek new solutions and methods of operation.

 

InQ1 2016 the organizational structure of the Impel Group changed. Business areas were divided into two segments comprises cleaning services, technical maintenance of properties and manned guarding etc.), and BPO – support for business processes ( IT services, accounting and payroll service, tax consulting, archiving and digitization of documents, and cash processing). The new structure aims at generating synergy, basing on strong focus on customer and efficient management of portfolio of contracts and internal processes. 

Grzegorz Dzik, the President of Impel SA stresses that the new structure allows obtaining clarity and effectiveness in managing the Impel Group. By simplifying the structure we gain focus on core business of FM and newly-defined BPO area in which we see the greatest potential of strategic development. The market makes us compete and seek new segments of operations.

In the first half of 2016, the Group increased sales in FM segment (former FM and Manned Guarded Security of property). The revenue amounted to PLN 893.1 million i.e. higher by 12.8% compared to the same period last year.

 Bogdan Dzik, Vice-President of Impel SA Management Board and General Director of FM segment says; We strengthen our position by acquiring prestigious contracts where combine at least two services –cleaning and guarding. Recently we contracted practically two facilities from the Culture Zone in Katowice, we provided services at the NATO summit at PGE National stadium, provided security services during 73. Edition of Tour de Pologne, and provided guarding during Rihanna concert. We develop our competence in high growth potential sectors e.g. services for prestigious chain of 4 star hotels.

Bogdan Dzik, Vice-President of Impel SA Management Board stresses;- We see increasing awareness of customers for the need of valorization resulting from changes of regulations  in public procurement. Advantageous change regulations in public procurement Law conducted in 2015 and 2016 enables us to win contracts in which price is not the only choice criterion. The negative trend of minimum price criterion and lack of valorization in previous years begins to slowly reverse, by elimination of negative factors affecting our operations. This is a chance for the companies whose potential is recognized in seeking solutions together with customers having potential and competence.

Jakub Dzik, Vice-President of Impel SA Management Board and General Director of BPO segment The revenue in BPO in H1 2016 totalled i.e. higher by over 4% compared to the same period last year. The segment profitability rose – 12.6% vs. 8.2% in 2015. The growing revenue result from increase cooperation with regard to existing contracts and the new ones in IT area. – It is our mission to develop in areas which we see high profitability. Development of technology in the Group concerns also our core products integrated in FM area. The Potential of the market in Poland is still immense, and we want to join the leaders creating solutions for BPO market.

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