Selected data from the financial report of the Benefit Systems Group for H1:

·         494,000 sports cards at the end of June 2014 (+14.9% y/y), i.e. 64,200 y/y

·         dynamic increase in revenues: PLN 223.1 million (+18.2% y/y)

·         maintained profitability: PLN 40.9 million gross profit on sales

·         lower costs of sales in relation to revenues

Increasing sales dynamics

In H1 2014, the sales revenues of the Benefit Systems Group amounted to PLN 223.1 million and were higher by 18.2% from the revenues in H1 2013. The company has maintained profitability – its gross profit on sales amounted to PLN 40.9 million.

The dynamic growth of revenues and maintaining profitability at all levels translates into a higher profit. The EBIT profit of the Benefit Systems Group amounted in the first half of the year to PLN 14.7 million and was higher by 34.8% year on year. The net profit attributable to the shareholders of the parent company in this period amounted to PLN 11.9 million and was higher by 30.6% year on year.

Historically, the first half of year is for the Benefit Systems Group seasonally weaker in terms of profitability and profit, which is why we are very pleased with this year's results and maintaining the margin. The effects of changes in management and cost control are visible, says Tomasz Józefacki, President of Benefit Systems S.A.

The stable tendency of decrease in general administrative costs in relation to the revenues has been maintained. In H1 2014 they closed with the amount of PLN 13.6 million and constituted 6.1% of the revenues. It is worth noting that after the exclusion of the costs of the incentive programme, the cost in relation to revenues would have amounted to 5.2%.

Increase in the number of sports cards

The number of sports cards at the end of June amounted to 494,000 – compared to the end of June 2013 their number increased by nearly 14.9% (64,200 cards). The increase in the number of users of the sports programme related to the sales towards new customers and additional sales to current customers, and the installation of additional terminals in clubs, had a positive impact on the gross margin on sales in the segment of sports cards. In H1 2014 it was 21.4% and increased by 2.8 p.p. in relation to H1 2013.

New products*

The revenues of the segment of new products in H1 2014 amounted to PLN 7.6 million and increased by 55.6 % year on year. The number of entries to the MultiBenefit platform, which offers subscription access to the products of Benefit Systems and its partners, reached 177,000 and increased nearly six times compared to the end of H1 2013. Currently, the sale is carried out in the promotional period, the aim of which is to build the broadest access for the users.

We are witnessing a growing interest in the MultiBenefit incentive programme – based on the subscription model – which translates into an increase in the number of customers and entries to the platform. However, it is worth noting that the new products are currently in the early stages of development, therefore, they require further investment and improvement, adds Tomasz Józefacki

Investments in the fitness industry

Benefit Systems Group will continue its consolidation efforts in the fitness industry. At the end of H1 2014 the investments of the company in the fitness industry included 39 fitness clubs throughout Poland, including 19 mature clubs**. The development strategy of the company in the fitness segment provides for the opening, by the end of this year, at least nine (9) more clubs, and a consolidation of the fitness assets in a newly created entity within the next few months. On 24 July of the current year the company extended the investment agreements with Calypso Fitness and Fabryka Formy until the end of 2025.

Summary of the financial results of the Benefit Systems Group for H1 2014 and Q2:

*** net profit attributable to the shareholders of the parent company

More information:

Rafał Janik – Benefit Systems S.A. Investor Relations  | tel. +48 22 24 24 090 | e-mail: r.janik@benefitsystems.pl

About us:

Benefit Systems is the leader of the group which is composed of entities operating on the non-wage employee benefits and fitness markets. Benefit Systems Group, in accordance with its mission, supports people and organisations in their development, achieving balance and building commitment. Using the upward trend in the leisure-time industry market, it desires to create and develop a portfolio of innovative and comprehensive solutions allowing to motivate employees in an efficient and flexible manner and to assist them in achieving a balance between work and private life. The offer of the Group includes products in the field of sports and recreation (MultiSport, FitProfit), culture and entertainment (MultiBilet, MultiTeatr), nutrition (BenefitLunch), tourism (MultiWypoczynek), custom-made cafeteria programmes (MultiKafeteria, MyBenefit), as well the MultiBenefit incentive programme. The company is listed on the main trading floor of the Warsaw Stock Exchange since April 2011. The group of clients of Benefit Systems currently includes more than 6,500 companies and institutions employing more than 2 million employees, with the sports products having themselves nearly 500,000 users, with nearly 4,000 sports and recreation facilities in almost 650 Polish towns and cities available.

Important definitions:

*) New products – other than sports cards, non-wage incentive tools in the offer of the Group

**) Mature club – an average of two (2) years from launch and achieving an operating margin of more than 10%