Grupa Kety SA

WSE:KTY

Earnings Call Transcript 2018-Q3

[Michal Malina, executive]

Ladies and gentlemen, I'd like to welcome everyone to today's meetings. We'd like to thank you for joining us today.

Today's meeting shall focus on the earnings of the third quarter 2018. And of course, our gentlemen will also refer to the perspectives of the prospect of the fourth quarter 2018. After the presentation, there'll be time for your questions. And I hope that our board will be able to answer them, but just in case, anything can also be explained during the lunch because the representatives of our company will stay with us and they'll have time for you.

And we would like to also welcome our online viewers, who have the availability to ask questions, chat with us.

And the presentation will be started by Dariusz Mañko, Chairman of the Board.

[Dariusz Mañko, executive]

Good afternoon, ladies and gentleman. Welcome to yet another meeting.

We have -- well, the time is flying so fast that, well, in general another quarter is gone past. And it seems like, just a moment ago, we've seen each other. Well, my presentation will be very short because we have all the representatives, all the board members. So they'll be telling you their situation in detail. I'll be speaking shortly about the position of our company, 2 words about -- well, about the general position of the company.

Well, we feel great. The company feels great. We do our job. And the growth of sales is about 13%, and this is after the 3 months. And well, the sales is doing really fine, over PLN 2,230,000,000 of income. EBITDA profit is also good. It's over PLN 372 million after 3 months, so this is also good result. Net profit is PLN 208 million.

So about the prospect and implementation of the prospect, well, we stand by our prospects as our -- stand by our promises. We will deliver that, unless we have too many days off, but we are not expecting too many surprises here. Well, any public holidays are recognized by us. Everything is very important. However, well, according to our shifts and shipments that are so frequent, well, that can actually disturb our agenda -- work agenda.

Well, how shall I start? Well, I've been the Chairman of the Board so -- for so long. And as long as I can remember, there wasn't such a peaceful quarter. There are no disturbances in the exchange rates, which I remember that there was before. And export was problematic in the past. Well, we had problems and asked ourselves, "Should we hedge aluminium or not?" But the macroeconomic situation is so good right now, and the environment of the company allows us to continue working peacefully and to focus on the most important factors internally for the company. Now about the signals that come from the market and, well, those signals from every market, financial market or maybe KPIs, indicators that predict what's going to happen in the economy, well, they are talking. They point to a certain slowdown, but we as the company can safely say that we are not really feeling this sort of pressure. And nothing is pointing out to the slowdown -- to any slowdown of the economy. Well, surely, about the employment issues but also the salary pressure, well, this situation is already past the peak of the requests that have been. Well, other indicators, of course, we've got price pressure and competition, but we've been operating for so long in all 3 segments that we know how to deal with the situation. We can deal with a difficult macroeconomic situation, and we are prepared to fight.

Well, in general, we can say that the whole company, the group is doing fine. We are working in a very peaceful, very good situation. The investment that have been planned by us, well, they will be discussed in detail by more my colleagues as well, but I can tell you, I can actually tell the -- our investors that our company is in a very good condition.

So thank you so much. And now I give the floor to Piotr Wysocki, who will tell you about the Extruded Products.

[Piotr Wysocki, executive]

Now a couple of words about Extruded Products Segment. Well, we are a very boring segment, so to say. There are no sudden things happening. We are continuing stable works on high levels to -- right now the high levels are really high, production and sale levels. And well, you can see the numbers here quarter-on-quarter, year-on-year, 15% growth only in the quarter -- after 3 quarters, the growth is about 11%. So we remain, we keep the high levels. Over 6,000 tonnes per month. This is a record-setting result in terms of our sales, but as the Chairman has said, well, we have the sort of stabilization. There are no promises that there will be any acceleration or a slowdown. This is a stabilization on a high level, as I've said.

Well, currently the capital -- utilization of capacity falls between 95% and 100%, depending on the machines. Well, we are fully booked. And in terms of our orders, the level is, as said, the end of the year. And some of the machines are booked for the next year as well. Well, the situation on the Ukrainian market is improving. We need to say that, that during the third part -- quarter, since the beginning of our production 10 years ago, we were able to achieve EBITDA. And officially, we took the money that we earned there. Also, components production is growing. In our Slovenian company, we produce components for the home appliances and motor industry, but also in Kety plant of the processed aluminium elements, well, the production is growing as well.

There are also problems -- well, there is this big car company that were -- was experiencing some problems, but we didn't really feel that as well.

Well, a record-setting sales in terms of the history of the company. Well, the historic-high earnings in August, September, the highest sales levels that have ever been recorded in Extruded Products Segment.

Well, as far as export market is concerned, at first, we first started slower on the Czech market, but right now the market has accelerated, so we have some double-digit growths on export market. Well, British market is dealing with the planned Brexit. So the clients don't really know exactly how the situation will unravel, so the market is not doing that fine in general there.

Now talking about investment. Well, we've completed construction of the hall. Let me tell you there's 3 main investments that we've completed this year: so new press for soft alloys. Right now you can see the building, the status as at now. Right now we are doing the technology startup. On the 10th of August, that was a very important date in our industry, when the press is ready for production and everything should be harmonized. All the elements should be harmonized. This is a large technological line. So anodizing plant extension, this is a big project that we are carrying out this year. We have the environmental permit right now. This is the most important parameter in this project because this is a technological process that uses large amounts of chemical compounds. And without this sort of permit, environmental permit, this plant wouldn't be able to function, but we have received this decision, this permit, environmental permit. But now talking about the situation, at the beginning of the year, well, there was a delay, 3-quarter delay, connected with all the necessary permits. Well -- and the laws -- as of the moment, we started the project until we received the permit. Well, the laws have changed several times then. That happens.

Well, press for hard alloys, another big project that we are carrying out this year. Right now we are collecting all the technological devices, and technological equipment is being delivered. And we are talking about a transport of very specific equipment to our plant. So everything is under control.

So the first ones of investment, soft alloy press. Well, this is the device, equipment that is expected by the market right now. And as you can see, well, utilization of our capacities is -- falls between 95% and 100%. So this new press will help us to increase volume of sales by 12,000 tonnes. So this is the most expected -- right now the most expected equipment. Right now we are doing the technological sampling and technological trials, and the production should start right now. And as I've said, well, this is all. There is not really anything that would be surprising. High-level stabilization.

[Dariusz Mañko, executive]

So I need to add one thing, that with regard to our company, well, you may be used to it by now, that for instance we had some paper problems for our anodizing plant in terms of the documents and environmental permits. And yes, indeed, yes, well, there is a delay. We have to admit that, but we need to say that it's not always happening that we are able to construct a hall and put press and press and another press. And we are doing that actually, so we've been actually budgeting tight and prognosing, forecasting that, but there is a lot of work in that and focusing on the internal work and investment and everything that is external. Everything external helps us to function stably. Well, the investments, you know that you need to get the money from the bank, and it's really worth to actually invest it right now. And so this is what we are doing. We are quite efficient in investing them and completing our projects in terms of construction level and contracting -- technology contracting level and delivery of equipment, startup and so on. And my colleague said, well, the first date, the first trial startup is important, but this is something you wait for it. Because if you invest PLN 100 million, the question is did we do everything correctly. Maybe there has been some mistake done or something, so you need to check everything. So we have to say that this press will be started, for instance. And then that means that some resources are frozen.

So kudos for the Extruded Products Segment, that they were able to actually complete this investment so quickly and so efficiently. And so this is a kudos for all the technological department for the investment in this segment.

So thank you so much.

[Tomasz Grela, executive]

And now a couple to -- of words about Aluminium Systems Segment. And contrary to my colleague, I represent a very interesting segment, and I'd like to tell you about that.

As you can see here, the results are quite good, just as the whole group. The whole quarter is really good. The growth of sales on the internal market, Polish market is 22% in the third quarter. And increase 20% in sales, generally, well, that translates to good sales results and good perspectives. We are talking a lot in Poland about the drop of orders, but I have to say that our observation says -- project observation -- tells us that the whole 2019 will be really good or even better than 2018.

As the only thing that you can see, the third quarter, this is a small slowdown in export of sales have been recorded on every market, except American market. Well -- but as expected, the biggest contractor -- our biggest contract in the U.S. has been postponed till the next year, but it's not an obstacle because, as you can see, our sales is quite good. But -- well, that helped us to peacefully pilot and carry out other projects connected with ready products. As you can see, we sent ready aluminium system to the U.S. And the rest of the projects that are carried out, 3 big projects that are now conducted by us. Well, with the fourth one, we could be experiencing some troubles, but -- because it was postponed. And then we felt really good about that, so it's really good for us.

Well, the fourth quarter will also be record-setting. So October growth of sales over 20%, and we are observing really interesting signals from the -- our export markets, so the growth of the construction perspective -- prospect in Germany and, well, the growth of other European markets. And that gives us hope for really good results, earnings next year, but the only surprise is -- the only unknown is the British market because, until the final day of Brexit, well, it's really hard to forecast anything. But at the moment, this is the major export market. It's developing quite dynamically. Later on, I will show you slides of some projects on the British Isles, and you'll be able to see that we are a serious player on the market.

So we are also observing costs connected with the higher costs of employment with the planned growth of energy costs. This is PLN 4 million -- around PLN 4 million in Poland. So we realize that, similarly to this year, next year, we will have to deal with some rises, be it second or fourth quarter. We don't really know it right now, but the market is really ready for that, taking into account the higher prices of the elements that I've mentioned but also elements -- higher prices of the elements that we are forced to buy on the market while the prices are growing. And that will, in fact, translate into rising prices of sales next year. Well, that will be between the first and the second quarter next year.

And now an interesting project that we've been working on for several years. Maybe that's not directly connected with this quarter only, but it seems that the period when we'll be able to speak about it more extensively and provide you with some detailed information with some results outcomes -- well, we've been working in Europe on the fireproof segment. So for instance, internal walls, glass walls. So this is a huge work. First of all, on the construction part, right now we are offering the highest range of products, this type products, in Europe, so we are 1 step or 2 steps ahead of our competitors. Our constructors have been working on that for several years, and then also certification of those products in individual countries. Right now we are able to sell those products to 23 countries without any problems. So 23 European countries. This is a very strenuous work that is actually connected with the loss of the EU. And the efficiency is blocked by the German market. And every country has got its own rights. And so the work that should take only 1 year, it's been taking 6 years or 7 years for us. Like in each country, we have to actually complete all the works connected with research, with tests and so on. And I am mentioning that because we started it several years ago, but we are close to an end. You can see the countries with the certificates. Well, we are talking about Finland and Spain right now, mainly. Well, the certification is coming to an end. And we'll be -- we'll want to use our potential connected with products, with research and tests and that will translate to good results. In Poland, we have around 65% of the sales of this type of product. And we hope that our experience -- that everything that we've done so far will be translated into Polish situation and our earnings also outside of Poland.

Two words about investment, where we've been piloting 3 main investments: research certain (sic) [ center ], vertical paint space and hall in Opole extension. And the first one are according to plan. So the research center is closed state. The status is closed, and all the necessary equipment to start up the center are already there. The same with vertical paint space plus hall, and the construction has begun. A contract was signed with the paint shop supplier. And next year, we'll be starting it. Well, the only delay is the extension of the hall in Opole. As I've mentioned that before, we've been preparing a very thorough logistical plan so to avoid any mistakes when managing this construction, managing this object. Well, we are close to ending this process right now. We've prepared a precise project design and asked for the construction permit. And in fact, well, we will be starting construction 2019.

And finally, it's worth to mention our interesting competition that we've started several years ago for architecture contest that takes place between September and October; the most important designers from Poland and abroad, contractors and so on. And this is a very interesting event, a very popular event, one of the best in the industry. So we actually have the best project designs based on our systems. And as you can see in the 3 -- the first awards have been given to Wroclaw and Katowice object constructions. And I'm mentioning that because it was our internal idea and success. And the scale of this venture and the final effect show you, are an evidence that in Poland and outside of Poland we are perceived as a very interesting and good company. Well, that translates to the implementations that -- completions that I would like to show you. Well, that's very shortly, to show you what's happening on the market right now. You may not really see that individually, but if we put the constructions together, the projects together, you can see the scale what is happening, an interesting scale.

Well, these are the completed projects. This is the proof of what happened: well, the first slide, the most important, the most interesting projects in Poland; the second slide, well, outside of Poland, interesting projects outside of Poland. And because we are not focusing only on Poland right now, well, we have the whole Europe covered. And on the third slide, the advance status of our contracts, progress of our contracts. So 3 most important contracts: 1 in New York, then Mennica Legacy in Warsaw and then POSEJDON in Szczecin in Poland. Well, we are general contractor of those projects. And as you can see on the slides, the progress, whereas Mennica Legacy can be seen in the city center of Warsaw.

The next slide, those projects that are coming to an end but they are still under construction, but we would like to show you the progress of the process that we are implementing. Very interesting projects, for instance, in Wroclaw, in Warszawa, in Warsaw and in Gdansk. And another slide, also projects that are under implementation, and we are doing that outside of Poland. And another proof that we are doing that fine because we've got the U.K., Czech Republic, Hungary, Ukraine, Lithuania, Norway. Well, you can see that we are everywhere. And well, the final effect is really good sales earnings.

And the last slide, well, a short summary of those projects that have been won last quarter. And of course, they are not being implemented right now, but they should be noted as very interesting examples of architectural designs.

So that would be all from me. If there are any questions to me, then I'll be happy to answer them.

[Dariusz Mañko, executive]

Well, because I comment on every segment, I'd like to praise this segment and the marketing department because what you have heard from Mr. Grela, well, this is a very conscience -- conscious and consequent working on the brand. And the brand is more and more important in the architectural world. It is -- there is more awareness about it. And if we continue our work, our operation like that -- well, I've been on the gala, in the gala; and I met with the architects. And this event is becoming #1 in Poland, #1 event in Poland; well, soon in Europe. And yes, sure, the idea is really great. And I expect that with this consequence; with this hard work of the whole team, the whole group but particularly the marketing department, well, we will be able to have a very good Polish and a recognizable Polish brand.

So this is a huge success. So thanks a lot.

[Rafal Lechowicz, executive]

Good afternoon, ladies and gentlemen. I am very happy to present the results earnings of the third quarter in the Flexible Packaging Segment, and I feel really great about presenting those really great earnings.

So the first half of 2018 and the third quarter, well, the record-setting time in the sales and EBITDA level, nearly PLN 180 million worth. And EBITDA is over PLN 34 million; and the margin, EBITDA margin, is 18%. Well, we are very happy about the current activity, but we realize that there are challenges ahead in the short-term perspective and long-term perspective, 2 hot topics.

So the first one is the oversupply of the production capacity in the packaging industry on the Polish market; well, and the [ supply ] problems connected with operational activity. Well, the cost of production is growing, and we've got problems in transferring this growth of production costs to our customers. Well, ladies and gentlemen, how do we deal with that situation? Well, we increase the export. So this is a different situation that presented just a moment ago. Well, our Polish market is stable, but we are not growing significantly, whereas the export is growing significantly and very quickly, hence the next slide.

Well, on this slide, on the right, you can see the statistical information; and on the left side, some products. Let's start with statistics. I confirmed the 7 third quarters in the past 7 years. Note that export in Flexible Packaging Segment grew almost 3x during the past 7 quarters. The growth was 34%. So 2 years, 34%. And the share in the total sales, the share of export in the total sales, is growing as well. And in 2018, it reached the value of 46%. And I can say with a -- almost certainly that, in 2021, we will have a breakpoint and the export will be higher than our sales in Poland. Well, ladies and gentlemen, on the left, you can see our export markets. And if I were to tell you this, about this a couple of years ago, I would have to start with the eastern markets, so Lithuania, Latvia, Estonia, Ukraine, Belarus. They are -- were over 50% of the total export value. Now this is only 17%. The eastern markets are just 17%, well, because we have 15% or 16% in Benelux or Germany; and the remaining countries of the Visegrad Group 20%; the U.K., France, Switzerland yet again 13%. So we don't really have much choice in a situation that -- in a situation we cannot accept any price rising -- rises. So we are not really interested in actually doing pro bono business, so we are forced to limit a -- our cooperation with such customer.

Yet another slide is dedicated to another challenge. Well, this is the change of preferences, market preferences; and the customers who prefer cheaper packagings, lesser quality. So flexographic print, flexo packaging. Well, I need to remind you that we are the company that started with rotogravure print packaging. So while the cost is uncomparable, flexo is more flexible technology and much cheaper technology.

So ladies and gentleman, Director Malina has told me about the questions that you had. So you've been asking us what is the share of the sales of the printed packagings, as compared to the total sales. Right now, this year, PLN 700 million. PLN 4 million (sic) [ PLN 400 million ] worth will be printed packagings, and out of this PLN 400 million, PLN 130 million worth packaging will be flexo print. Please note that, 6 years, 7 years ago, flexo packaging sales was symbolic. And right now this is PLN 130 million within a year.

Yet another slide, ladies and gentlemen, now with regard to investment. This is traditionally last slide. I don't know if you'll remember that, 2.5 months ago, I've first shown you the progress of our Oswiecim investment. Right now we've reached the stage that you can see on the picture here. So we've completed the construction, and now we are covering the roof with metal sheets so that -- the winter is coming and we're able to continue our works, construction works. Next year, this is what we should achieve. I hope that this is what the plant will look like in spring this year. So this is on the right, the picture on the right. Well, our cost is in line with what was planned.

So thank you so much for your attention, and I'd like to give the floor to the Chairman and a word of comment to this segment.

[Dariusz Mañko, executive]

I need to tell you -- so I don't really want to mention the investment, that they build the halls and put the equipment there quicker than you do -- than you construct a single house. So with this project, what I like, well, I love that they are trying to do something new. So they -- with the new halls, so -- well, we go to this hall, and there is this beautiful parking space. There's a great reception desk, and the hall is wonderful. Everything is clean. There are really 2 elegant gentlemen with laptops, and they are producing millions of packagings a year. So this is a really fantastic thing.

So this segment always makes me optimistic because there are some levels -- they have the -- those levels where we reach a very advanced technology. And we don't really need hard human labor, but we just need very wise, very smart people. And that I'm happy to see those really interesting, so smart IT specialists, people who just graduated from the university and they are able to find employment in our company for -- and will get a really decent salary, I hope. So we create those really great conditions for them, circumstances for their development, personal development, for young Polish engineers.

So now with regard to the technology, to the progress to what is in our heads in terms of impossible barriers. Well, they are doing that really great, and well, that's confirmed by the earnings, by the results.

And now the floor to the financial director.

[Adam Piela, executive]

Let me check the microphone.

Well, that was a very good quarter, the 21st quarter in a row in which the group increased sales quarter-on-quarter. So PLN 811 million in sales; good margin to EBITDA, over 17%; PLN 140 million profit. Consolidated net profit can be translated really easily from the EBIT level because the financial operation result year-on-year has changed due to the cost of the loan interest rates, loans that we need to implement the investment plan; and the growth of capital, working capital growth; and payment of dividend. So the tax, income tax, unstable level, around 90% of the tax that has been paid. And now I need to remind you that, during the fourth quarter, we expect that we will have a deferred tax asset amounting to around PLN 11 million that is connected with the implementation of investment in the Flexible Packaging Segment.

And now the cost. The cost is growing in line with the trend that was set by sales. And so the growth of -- in the Extruded Products by 5% and Flexible Packaging by 10% quarter-on-quarter, well, that actually adds to the costs, cost of materials and to cost of energy, so external services. On the level of the second quarter, we have the growth and then higher dynamics of the cost that is connected with the implementation of the Mennica Legacy level in the aluminium system segments and to using the help of the companies that cooperated with us in implementation and completion of this project. Also, employee benefits in the third quarter were more dynamic. And the growths were more dynamics than the sales itself, but we need to remember about the growth of employment that is due to employment of new employees and teaching them for the investments that will be soon started.

Well, operating seems to be -- operating activity, operations seem to be really boring, well, as my colleagues have already said. So everything is just under control.

So the working capital in the third quarter was at the level of PLN 825 million. Growth was over PLN 100 million quarter-on-quarter, but the working capital turnover rate was almost the same level as 2017, so 91 days. So the third quarter was also very good in terms of the cash flows operating -- from operating activities the whole year. This is almost PLN 200 million of cash generated by the operating activities.

Well, in the time structure, well, the receivables, whatever is happening there, not really much changed, also in terms of the turnover rates, but well, those, the information about the bankrupt companies, about those who limit the loans, well, the signals that come -- the creditors who limit loans, well, those signals come to us as well. And maybe that may end with some smaller working capital as well.

Well, stable financing. Everything has been achieved in September post dividend payment. Net PLN 786 million, this is the net debt. So payments for the investment projects, we expect, we forecast that, in line with the contracts that we've signed, fourth quarter, PLN 140 million should be achieved.

So now with the net result and cash flows, we should have over PLN 30 million loan more at the end of the year. So the debt -- debt indicators optimum level. So right now as we sit here, well, it's really hard to say whether we should have more or less of the loans.

So generally summarizing, really good earnings in this quarter. Well, we stand by our prospects, our forecast for the year, also good forecast for the next quarters next year.

Now let's move on to the questions. Michal, do we have any online questions?

[Michal Malina, executive]

Ladies and gentlemen, are there any questions here in the room? Do you have any questions, any doubts? Would you like anything to be further explained? Or maybe there were some issues that were skipped and you are interested in that. I believe that this is a good time for your questions right now.

[Jakub Szkopek, analyst]

Jakub Szkopek, mBanku. I have a short question concerning new investment in the Extruded Products segments. I remember that, during the past meetings, you said that the volume in the fourth quarter from this project has been sold. So with regards to the delay of this project, will you be paying any penalties for the customers?

[Piotr Wysocki, executive]

No, no, no. No penalties. We are not working on contracts that would oblige us to pay any penalties, but the whole volume that has not been produced, delivered because of the delay. Well, the delay is just 1 month, technological delay. The whole volume has been distributed over other machines, equipment here in Poland and Ukraine.

[Michal Malina, executive]

There is a question from our online viewers. Dominik Niszcz from Raiffeisen. What was the energy cost in 2018? And how much can this grow in 2019? Or will Europe industry transfer the cost onto the goals?

[Unknown Executive]

Well, this is a very difficult answer depending on the business, but the budgeted energy cost for the group in 2018, well, it was -- well, I don't know the level because it was about PLN 70 million. It was all media, including energy. And this is what we budgeted for this year, but this is still in power, electric power, heat and pressure to air. So if I am to actually calculate it well or forecast it, the electricity would be about PLN 40 million. So -- and that would make it easier for me to answer the second question, about the growth of energy cost in 2019. Well, our forecast is about PLN 18 million to PLN 20 million of the higher cost -- additional cost. Well, how about transferring the growths onto prices in Europe? Well, my colleagues will answer that.

[Piotr Wysocki, executive]

And then -- well, aluminium profiles production, this is about 20 grosz per kilogram, and this is 1% of the price. Well, so the stock exchange can change $100 1 day and $100 less next day. Well, this is even -- this is much bigger, right? So we will not really have a problem with that. So well, surely, everybody will want to transfer that and translate that into customers and the prices. This is about 1% for us, as I've said, so this will not be very complicated to actually translate it into our customers. And the customers will translate it further there.

[Tomasz Grela, executive]

Well, we need to be honest here that, that was one of the most heated element of our discussions, of the board discussions because it doesn't happen every year that the energy cost is growing so high within a year. And then, well, we've discussed it. We've analyzed it, and that actually clarified everything for us. And we realize that Aluminium Systems Segment has not really big problem about it because there are other indicators that points to whether we should raise the prices or not, and this is how we do it. And between the first and the second quarter, we will be building a new price list for the products. And well, energy cost is just a very small one, minor one. So we need to say honestly that our competitors in the West Europe, well, they will not suffer from such growth of energy cost in Europe. So the advantage of Polish economy will be lesser next year and because of the growing energy cost this year. Well, our company is acting, operating rationally. And well, following our history, we focus on new technology, always new technologies, modern technologies, energy-consumption-saving technologies. And if we are to fight with European prices, well, we will be fighting, but I feel sorry for the businesses in Poland energy where the energy consumption is high. And well, starting next year, the prices will have to grow.

[Piotr Wysocki, executive]

In our case, I need to tell you that this is one of the elements that actually adds to the rising costs but not the only one. I need to add that, if we are investing, well, with the new press that I've mentioned, the electricity consumption is 30% less than with the older equipment. So that will help us to actually facilitate our work on this energy rising.

[Unknown Attendee]

[ Eva Pocojevska, Grupa Biznes ]. My question is will you be able to deliver the forecast this year? Will -- and next year, is the dynamics similar? And mergers, my last question, anything happening there?

[Dariusz Mañko, executive]

Well, we are very ambitious. Next year, we would like to show you more. Well, we are also a very stable company, so some -- several percentage growth of earnings, this is what we would like to present you. Now with regard to this year, it's really hard for us to tell you that the forecast will change. Well, this forecast will be delivered. So plus given our take, we will actually implement our forecast from the beginning of the year, set forth at the beginning of the year, but I don't really want to talk too much because later on we'll get a million of questions. And we can't really answer more, say more than we are just working on it because this is one of the tasks of the board, to tell you that we are working and actively seeking for mergers. But I need to tell you that this is not a good moment. Because we are not afraid. And we don't really feel anything that -- any indicators that could impact our company, but it seems that there is a -- that there may be a [ thunder ] coming. Because we are ready and prepared to whatever may happen on the market. We are not afraid of that in the situation that we are in. So adding new businesses that are not so good, so ready, so prepared as we are, so well organized, well, that may always be slightly risky. And the second thing is the fact that, as you can remember, we bought the Slovenian plant and we bought it very cheaply, a very nice company, good income. But we've been discussing profitability forever. We are really feeling good about the profitability of Kety, 70% (sic) [ 17% ], 16% EBITDA. And to whatever happens, 2% will be given away, and next year, we will catch up with it. And so we are observing companies, and if they are working on just a couple of percent of profitability, well, that stops us. That stops us from merging, from purchasing these sort of companies. So as long as -- well, we've ended this year with an interesting investment, 2 presses in packaging and BOPP line as well and the research center as well and coating line. Well, that's a lot of work. And it's really good to focus on that, on proper implementation, completion of those investments; and to actually use them and get some profit out of it, also for our shareholders because the dividend from our company is growing. So we continue working. And we are observing some potential mergers, but I can't really tell you more about that right now. So thank you so much.

[Unknown Attendee]

[ Korfman Karsky ]. I have a question for Mr. Lechowicz from the flexible packagings. Because you said that Polish customers cannot accept the growing prices. So how about your competition, what do they do? Do they sell for lower, or not? And can anything change here? Or maybe you have to focus on export and you can't do anything about the Polish market.

[Rafal Lechowicz, executive]

Thank you so much for your question. Of course, we can sell 100% of our production on Polish market. Well, I can do that, but the margin will not be higher than 19% of EBITDA. And I and the owners aren't really interested in this sort of business. We want to generate high margins, and if I am able to do that on the export market, then I choose export market. The second question, our competitors, yes, they operate on Polish market. They have some problems, but you can check whatever profits they achieve. So I don't really want to focus on that and continue on that. Well, our competitors are not really close in terms of the profits that should be expected. Well, these are 2 different worlds. There are a lot of international companies who operate in Poland and generate loss year after year. Well, the employment changes, the personnel changes, and nothing really changes in the situation. Well, there was a company that just closed a very modern plant recently. So this is just optimization of profits, nothing more.

[Michal Malina, executive]

Are there any other questions?

Well, because the weather has changed and it's much colder right now, I'd like to mention one thing that Mr. Grela did not mention, and it was shown on the presentation. I believe that this is a very optimistic thing in the context of what Director Piela has said that means the receivables in the construction industry. We had this item in our agenda in the Aluminium Systems segments. There is a positive message. So the contractors' margins have grown, so that means that the cost pressure for the companies that construct the objects -- well, this is past us, so they will be able to generate better margins, which will help them to have better cash flows. So well, we'll see whether the cash flows improve. We'll see. We'll see that. I know that the government is working on some regulations that are to improve that. We'll see how the situation unravels.

Are there any further questions? There are no online questions as well, so I'd like to thank you so much for joining us today. And now let's go for lunch. So I'd like to thank our online viewers as well.

And well, let's see each other next year. We will be talking about the forecast for 2019.

Thank you so much.