Boryszew : to have nearly PLN 37 million of net profit

Boryszew SA signed a conditional purchase agreement with Mitsui & Co. Ltd., Tensho Electric Industries Co. Ltd. and Sanko Corp. Ltd. for the acquisition of Tensho Poland Corporation. The agreement applies to the purchase of the plastic component factory in Ostaszewo near Toruń in Pomeranian Special Economic Zone. The transaction value is EUR 10.6 million.

On 18 April this year, Boryszew SA singed a conditional purchase agreement to buy 80 per cent of shares for € 1.6 million while taking over TPC debt for $ 9 million. The total transaction value is € 10.6 million.
Upon the purchase agreement, Boryszew SA and TPC signed a cooperation agreement. Its aims at helping new partners to exploit Boryszew's potential of distribution and sales power. At the same time, Boryszew will benefit both from the new technology and support while exploring new regions, such as Mexico.
'Another automotive acquisition does not only strengthens our position on this market but also builds new opportunities for acquiring new contracts outside the sector. Acquired facility is modern and well-organized. It also manufactures high-tech components for home appliances which is the business segment that we focus on. Therefore, it is a chance to build our experience and create new competencies,' says Piotr Szeliga, Boryszew's President of the Board.
Tensho Poland Corporation Sp. z o. o. is a part of TENSHO ELECTRIC INDUSTRIES, a Japanese group. TPC manufactures high-quality plastic products, including components for TV industry (both external and internal assembly parts), automotive, packaging and other products for logistics (plastic pallets containers, boxes) as well as containers for medical waste. Tensho Group has plants in Japan, China and North America.
'The factory which is located in Pomeranian Special Economic Zone produces automotive parts, including Volkswagen cars,' says Paweł Surówka, Board Member of Boryszew who is responsible for the automotive sector.
'The acquisition of the factory develops existing cooperation with car manufacturers swiftly providing additional production capacity. Additionally, it provides access to other Japanese car manufacturers, such as Toyota and Honda. Of note, the factory holds 17 modern units and 2 fully equipped painting lines and a team of 150 well-trained employees,' he adds.
The factory in Ostaszew has a team of approx. 150 employees producing high-tech components for companies like Sharp and Toshiba. Also, Tensho is the supplier of T1 for Subaru and VW and T2 for Honda, Nissan, Toyota and Hino Motors.

The Extraordinary General Meeting of Boryszew SA introduced Janusz Siemienic and Jan Bogolubow as the Supervisory Board members. New members will replace Sebastian Bogusławski and Dariusz Jarosz who resigned from their duties.
'I am sure that the experience of new Supervisory Board members will meet our shareholders' needs and bring value add to Boryszew Group,' says Piotr Szeliga, Boryszew's President of the Board.
Apart from the new members, Boryszew's Supervisory Board consists of: Arkadiusz Krężel, Zygmunt Urbaniak, Mirosław Kutnik oraz Tadeusz Pietka.
Professional experience and formal qualifications of the new Supervisory Board members:

Janusz Siemieniec is a graduate of Wrocław University of Technology of the Faculty of Electrical Engineering.
For the last eight years he has managed many renewable energy projects while serving as a Board Member of an investment company Nordwind Ltd. and NordEnergy Ltd. In 2000 - 2006 he was President of the Board of Spółka Restrukturyzacji Kopalń SA in Katowice (a restructuring company involved in decommissioning of mines) and Supervisory Board Member of Kopex SA. Since 1990 till 2000 he was the CEO of KWK Nowa Ruda in Nowa Ruda and Chairman of the Supervisory Board of Węglozbyt SA. Previously, he held management positions in energy and mining companies.
Upon completing enterprise management course at the French Institute of Management (IGF), Mr. Siemieniec has completed several trainings organized by the Ministry of Treasury for Management and Supervisory Board Members of commercial law companies.

Jan Bogolubow holds a doctoral degree in technical sciences with the focus on chemical technology. He also holds an MBA degree from University of Management and Marketing in Warsaw (Partner of the University of Denver in USA). Mr. Bogolubow completed studies both in marketing and management and Polish and Dutch European Studies (European integration).
Since October 2007, Mr. Bogolubow is the President of the Board of Zarządca Rozliczeń SA. In 1999 - 2008 he was a member and chairman of several Supervisory Boards in companies owned by State Treasury, including Huta Katowice SA and Jastrzębska Spółka Węglowa SA where he was the Chairman of the Board. Since 1999 he worked at the Ministry of Economy as Chief Specialist, Minister Counselor and Department of Energy's (DOE) Deputy Chief.
In 1993 - 1998 he was the Chief Specialist, Deputy Head of Department, Head of Delegation at Węglokoks SA. Since 1986 until 1993, he was the independent technologist, Shift Supervisor, Head of Sales Division, Head of the Sales Office of "Przyjaźń" coke plant in Dąbrowa Górnicza.

Boryszew's net profit in Q3 2013 was PLN 47,4 million with operating profit of PLN 93,1 million and sales revenue of PLN 3,7 billion.

Q3 2013 financial results

Boryszew Group reported a third quarter 2013 operating profit of PLN 93,1 million with EBITDA of PLN 188,6 million. Boryszew's net profit in the third quarter was PLN 47,4 million.
''In the third quarter of 2013 we reported a slight reverse of market trends compared to the first half of the year,'' - says Piotr Szeliga, President of the Board of Boryszew S.A. ''Europe's decline in car sales, affecting the results of Boryszew's automotive activity, hasn't yet been compensated by our growing businesses in Brazil, China and Russia. However, the market is now recovering, and combined with Maflow's nearly completed restructuring and BAP's rapid progress, the situationappears cautiously optimistic. We are also happy about Impexmetal's results, particularly in the aluminum and copper segments. We are working on maintaining this trend and further increase of margins and sales volumes,'' - adds President of the Board of Boryszew.
After three quarters of 2013, Boryszew Group generated PLN 3.7 billion of sales revenue, which is 0.7% less than in the same period of 2012.
''This slight decrease in the Group's revenue is related mainly to the automotive market's condition in Europe,'' - says President of the Board of Boryszew. "Also, the aluminum segment, despite achieving its tonnages, recorded a sales decrease. It is linked directly to the decrease in metal prices on the London Stock Exchange. Copper,zinc, and lead segments recorded sales volume increases. It's worth noting that Walcownia Metali Dziedzice achieved historically high results in addition to ZM Silesia Oława Branch delivering steady growth.'' Piotr Szeliga adds: "What's more important is that this year's results don't include one-off events and this provides a solid foundation for development.''

Boryszew ERG - a Boryszew Group member company - has established a long-term co-operation with the Maria Curie-Skłodowska University in Lublin. It will offer student internships and the chance to conduct research together with the BORYSZEW ERG team and mass-produced innovative chemicals.

On 30 October Boryszew ERG signed a long-term co-operation agreement with the Maria Curie-Skłodowska University in Lublin.
''The agreement is multi-dimensional. On one hand, Marie Curie-Skłodowska University students from the reputable Faculty of Chemistry will have the opportunity to get internships in our facilities and this will surely be a starting point for their careers. On the other hand, we hope that students and our researchers will work on new and innovative products which will ultimately be implemented and mass-produced,''- says Marlene Krohn, CEO of Boryszew ERG.

The company, together with the university, plans to use National Research and Development Centre funds.

''We want to make use of the maximum of grants from NRDC funds supporting researchers and entrepreneurs during their research,'' - says Marlene Krohn. ''This will help us achieve these ambitious projects which had been grounded due to the lack of budget," - the CEO of Boryszew ERG adds.

***
Boryszew Group is one of the largest Polish industrial groups with a quickly growing segment of non-ferrous metals and automotive. The Group member companies specialised in manufacturing and trading, employ nearly 9,000 staff on three continents. Boryszew S.A. income in 2012 reached over PLN 5 billion with net income exceeding PLN 96 million.

***
Boryszew ERG is the only Polish manufacturer with over fifty years of tradition and experience in the production of monoethylene glycol and monopropylene glycol, used in the anti-freeze liquids Borygo® for car radiators. The Company's portfolio includes brake fluids and windshield wipers in addition to ergo lids, adhesives, plasticizers, heat stabilizers and other chemical products.

Impexmetal from Boryszew Group became the 20th member of Central Europe Energy Partners (CEEP). This is one of the largest production and trading holdings. Impexmetal companies produce aluminum, copper, zinc, lead and bearings.

''The addition of Impexmetal Group will surely strengthen our business,'' says Janusz Luks, Managing Director of Central Europe Energy Partners .. ''It is both due to its business scope and its international character,'' Janusz Luks adds.
Impexmetal is a WSE-listed company with over 50 years of experience in foreign trade of non-ferrous metals and its semi-finished products and bearings. Impexmetal's shares have been listed on the Warsaw Stock Exchange since 1997. Since 2005, the Company has been part of the Boryszew Group.
IMPEXMETAL SA is the owner or majority shareholder in 12 companies including six manufacturing plants. The key players are Huta Aluminium Konin, Hutmen SA Baterpol S.A. and FLT Bearings. Impexmetal was in the ranking of the 500 largest companies in CEE countries, prepared in co-operation with the international consulting firm Deloitte and published in Rzeczpospolita daily. The ranking included 955 companies from 19 countries.
The cost of energy and energy sources such as natural gas - crucial both for heating and in terms of raw materials - are very important components of production costs. Greenhouse gas emission policies and other initiatives of the EU over in 2030 and 2050 are also critical to the business. UE competitiveness among other countries is a foundation for the development of EU industry. This is the reason why Impexmetal decided to join CEEP.

CEEP is an international non-profit association based in Brussels. The Association represents the energy sector in Central Europe. CEEP's main goal is to promote the integration of Central European energy sector under a common energy and security policy. Also, the ultimate aim of the Association is to share the knowledge and practical know-how and co-operation among energy sector and research institutes in this part of Europe.

CEEP has been operating since June 2010. Association members include companies and research institutes from Lithuania, Slovakia, Czech Republic, Romania, Hungary and Poland. Today, CEEP has 20 members. Potential future members represent CEEP region and such countries as Latvia, Estonia, Bulgaria and Croatia.

In 2013, within eight months, Boryszew's Maflow, which is an A/C assembly manufacturer, gained 27 new contracts.

New orders

Volkswagen Group (VW, Audi, Porsche, Skoda, Seat, Bentley, Scania, MAN), Jaguar Landrover, BMW, Renault, Paccar Group, Volvo Car have chosen Boryszew for new contracts which will provide Maflow's revenue till 2023.

''Apart from VW Group, Boryszew gained new contracts from Jaguar, BMW and Renault which proves our restructuring process has been successful. Manufacturing plants without any contracts and managed by trustees, acquired by Boryszew in 2011, needed merely two years toachieve operational stability,'' says Piotr Szeliga, Boryszew's President of the Board, ''It is a big achievement for a Polish company to successfully compete with automotive leaders,'' Piotr Szeliga adds.

''The new projects will provide an income for Boryszew's Maflow till 2023. However, we have to remember that in the automotive industry the largest margins are only achieved in the first years of the contracts. Therefore, in order to keep up the profitability we have to actively seek new contracts," says Paweł Surówka, Board Member of Boryszew in charge of automotive development.

Maflow is successful not only in Europe. The company has orders in its manufacturing plants located on various continents. Currently, Maflow's Chinese branch in Dalian is implementing production of parts for the German company BMW for six future projects. Jaguar Landrover - another well-known car manufacturer which currently belongs to Tata Motors - co-operates with Maflow's plant in Shanghai. In India, Maflow will produce A/C assembly for Dacia Logan, Renault Group. The production will be held in Maflow's Indian plant in Pune.
Contractors
The biggest customer of Boryszew's Maflow is VW Group which provides around 40% of the company's turnover. Additionally, the famous sports car manufacturer Porsche, which belongs to VW Group is now also in Maflow's portfolio. Also, from 2015 Maflow will also supply Boxter and Caju - the latest version of PorscheBoxter and Cajun.

''It is interesting that we are becoming a major player for VW group for A/C assembly for hybrid and electric vehicles. It includes mainly such brands as Porsche Panamera Hybrid, Audi A6 and Audi A8 Hybrid and the latest VW E -Golf and E-UP; in the very near future they will be joined by Audi Q7 Hybrid,'' says Piotr Wiśniewski, Managing Director in Maflow.

Research and development
As our client portfolio expands, Maflow invests in new production technologies, ie. induction brazing, bending processes after installation, an automatic assembly line as well as in products themselves i.e. IHX cables (Internal heat exchange - will increase efficiency of A/C systems while reducing the compressor si