ASBISc Enterprises Plc
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022
Limassol, March 29
th
, 2023
2
Dear Shareholders, partners, and colleagues,
On behalf of the Board of Directors of ASBIS Group, I am pleased to present to you our Consolidated Annual
Report for the year 2022.
Undoubtedly the year 2022 was one of the most challenging years in the Company’s history, which was mostly
caused by the invasion of Russia in Ukraine. The war in Ukraine has changed the functioning of many companies,
including ASBIS.
Following the invasion of Russia in Ukraine, our priority was to provide all our colleagues and their families in
Ukraine with a safer work environment. Thanks to our teams in the neighboring countries like Poland, Slovakia,
Kazakhstan, Moldova but also in Cyprus we were able to provide it.
Back in March 2022, we had to suspend our operations in Ukraine and significantly limit our activities in Russia
and Belarus due to imposed sanctions on these two countries. Thanks to the broad geographic coverage, strong
market position, contingency plan, experience gained from previous crises and a very flexible approach, we quickly
adapted to the new reality. We were able to immediately secure or move supplies from the markets affected by
the war to safe locations and during the whole year compensate, to a large extent, lost revenues from conflict-free
markets and in particular: Kazakhstan, Armenia, Azerbaijan, Uzbekistan and Georgia but also through the
restoration of business in Ukraine.
We have strongly invested in Central Asia and Caucasus region as well as in Adriatic and Balkans regions. Due
to plans for further expansion, we doubled the area of the master distribution center in Prague (Czech) to 10,000
m2 and opened two regional distribution centers in Georgia and South Africa. The new distribution center in Tbilisi
is a distribution base for the Caucasus region while the distribution center in South Africa will serve South Africa
and the neighboring countries of the region but also countries such as Nigeria, Ghana and Ivory Coast.
Along with the above, we have been constantly improving our portfolio of products and services. Therefore, we
have made a strategic move and launched a new business division related to robotics – ASBIS Robotic Solutions
(AROS) based on two major segments – the distribution of collaborative robots (cobots) from leading global brands
in the sector as well as own robotic platforms under own brand namely “Cron Robotics”. This is a very promising
sector, which is estimated by analysts to be worth several hundred billion dollars in a few years. As regards our
own brands, the Company still keep pushing all of its own brands (Aeno, Canyon, Lorgar, Perenio, Prestigio and
Prestigio Solutions) to generate higher levels of revenues and gross profit margins.
In 2022, we have also continued to diversify our activities by investing in the regenerative medicine segment of
the biotechnology industry which is seen as a multi-billion global market. We have invested in two Cyprus-based,
startups RSL Revolutionary Labs Ltd., which is developing novel, molecularly engineered medical grade
biomaterial products for the treatment and regeneration of the skin for cancer patients and Promed Bioscience
Ltd, which is developing advanced collagen biomaterials for research and clinical applications.
It is worth mentioning that in 2022 the Company focused not only on delivering strong results but also on being
socially responsible. Since the beginning of the war, ASBIS has stood next to the Ukrainian people and assigned
more than USD 3 million to help them. We have launched a special humanitarian fund called “Ukraine Help Fund”.
Within the fund we delivered 20 fully equipped ambulances, more than 27,000 medical and first aid kits,
technological products such as generators and power banks, and many other essentials including blankets,
sleeping bags and other food items.
Moreover, in 2022, ASBIS retained its position among a select group of WSE-listed companies with the highest
ratings and cited as a “Climate Aware Company,” in the fourth edition of the Companies Climate Awareness
Survey.
3
Looking at the results, in 2022 ASBIS generated revenues of USD 2,7 billion (down only 12.60% compared to
2021). Gross profit margin much improved and reached 8.47% in 2022. Profit from operations (EBIT) reached
USD 111 million (down 2.4% compared to 2021). It is therefore worth emphasizing that despite the decline in
revenues, net profit after taxation remained extremely high, was close to the record level of the respective figure
in 2021 and amounted to USD 75.9 million, as compared to USD 77.1 million in 2021.
In 2022, we have continued our dividend policy and paid our investors a final and interim dividend from the
Company’s profits, which is in line with our strategy to reward our long-standing investors. This has also been
supported by a very strong cash flow of the Company. We want to continue our hefty dividend policy always in
combination with sufficient cash to support growth.
All in all, I am extremely satisfied with the financial and non-financial achievements in 2022. This has been the
most challenging year, taking into account the war in Ukraine, the unstable geopolitical environment and high
inflation. This is a huge success and I am very proud of the whole ASBIS team. This proves that ASBIS is one
nation and will not allow any of its members suffer and will stand next to them.
On behalf of the Board of Directors of ASBIS Group, I would like to thank our shareholders for their trust, our clients
for our successful cooperation, as well as all of our employees without whom such a successful year could not
have been achieved. I am convinced that such a strong Company with such an experienced management board
could overcome any crisis, our commitment to the company warrants success through focus.
Siarhei Kostevitch
Chairman & CEO
4
Directors’ report on the Group operations
For the fiscal year ended 31 December 2022
5
TABLE OF CONTENTS
PART I .................................................................................................................................................... 7
ITEM 1. KEY INFORMATION ............................................................................................................. 7
ITEM 2. INFORMATION ON THE COMPANY ................................................................................ 18
ITEM 3. OPERATING AND FINANCIAL REVIEW AND PROSPECTS ........................................... 38
ITEM 4. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ........................................... 53
ITEM 5. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS ............................ 58
ITEM 6. FINANCIAL INFORMATION ............................................................................................... 59
PART II ................................................................................................................................................. 61
ITEM 7. PRINCIPAL ACCOUNTANT FEES AND SERVICES ......................................................... 61
ITEM 8. ASBISC ENTERPRISES PLC STATEMENT ON NON-FINANCIAL INFORMATION
FOR THE YEAR 2021 ...................................................................................................................... 61
ITEM 9. MANAGEMENT REPRESENTATIONS ............................................................................. 63
6
ASBISc Enterprises Plc is one of the leading distributors of Information Technology ("IT") products in Europe, Middle
East and Africa (“EMEA”) Emerging Markets: Central and Eastern Europe, the Baltic States, the Former Soviet
Union, the Middle East and Africa, combining a broad geographical reach with a wide range of products distributed
on a "one-stop-shop" basis. Our main focus is on the following countries: Kazakhstan, Ukraine, Middle East
countries (i.e., United Arab Emirates, Qatar and other Gulf states), Slovakia, Poland, Czech Republic, Caucasus
region (Armenia, Azerbaijan, Georgia), Romania, Croatia, Slovenia, Bulgaria, Serbia, Hungary, and Latvia.
The Group distributes IT components (to assemblers, system integrators, local brands and retail) as well as A-
branded finished products like desktop PCs, laptops, servers, and networking to SMB and retail. Our IT product
portfolio encompasses a wide range of IT components, blocks and peripherals, and mobile IT systems. We currently
purchase most of our products from leading international manufacturers, including Apple, Intel, Advanced Micro
Devices ("AMD"), Seagate, Western Digital, Samsung, Microsoft, Toshiba, Dell, Acer, Lenovo and Hitachi. In
addition, a part of our revenues is comprised of sales of IT products under our private labels: Prestigio, Prestigio
Solutions, Canyon, Perenio, Aeno, Lorgar and Cron Robotics.
ASBISc commenced business in 1990 in Belarus and in 1995 we incorporated our holding Company in Cyprus and
moved our headquarters to Limassol. Our Cypriot headquarters support, through two master distribution centers
(located in the Czech Republic and the United Arab Emirates), our network of 31 warehouses located in 28 countries.
This network supplies products to the Group's in-country operations and directly to its customers in approximately
60 countries.
The Company’s registered and principal administrative office is 1, Iapetou Street, 4101, Agios Athanasios, Limassol,
Cyprus.
We have prepared this annual report as required by Paragraph 60 section 1 point 3 of the Regulation of the Ministry
of Finance dated 29 March 2018 on current and periodic information to be published by issuers of securities and
rules of recognition of information required by the law of non-member country as equivalent.
In this annual report, all references to the Company apply to ASBISc Enterprises Plc and all references to the Group
apply to ASBISc Enterprises Plc and its consolidated subsidiaries. Expressions such as "we", "us", "our" and similar
apply generally to the Group (including its particular subsidiaries, depending on the country discussed) unless from
the context it is clear that they apply to the stand-alone Company. “Shares” refers to our existing ordinary shares
traded on the Warsaw Stock Exchange.
Forward-Looking Statements
This annual report contains forward-looking statements relating to our business, financial condition and results of
operations. You can find many of these statements by looking for words such as "may", "will", "expect", "anticipate",
"believe", "estimate" and similar words used in this annual report. By their nature, forward-looking statements are
subject to numerous assumptions, risks and uncertainties. Accordingly, actual results may differ materially from
those expressed or implied by the forward-looking statements. We caution you not to place undue reliance on such
statements, which speak only as of the date of this annual report.
The cautionary statements set out above should be considered in connection with any subsequent written or oral
forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation
to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date of this annual report.
7
Industry and Market Data
In this annual report, we set out information relating to our business and the market in which we operate and
compete.
The information regarding our market, market share, market position, growth rates and other industry data relating
to our business and the market in which we operate consists of data and reports compiled by various third-party
sources, discussions with our customers and our own internal estimates. We have obtained market and industry
data relating to our business from providers of industry data, including:
• Gartner and GfK - leading research companies on IT,
• IDC – a dedicated organization on publishing data for IT industry, and
• Other independent research conducted on our sector
We believe that these industry publications, surveys and forecasts are reliable, but we have not independently
verified them and cannot guarantee their accuracy or completeness. The data of independent surveyors might not
have taken into consideration recent developments in the markets we operate and therefore in certain instances
might have become outdated and not represent the real market trends.
In addition, in many cases, we have made statements in this annual report regarding our industry and our position
in the industry based on our experience and our own investigation of market conditions. We cannot assure you that
any of these assumptions are accurate or correctly reflect our position in the industry, and none of our internal
surveys or information has been verified by any independent sources.
Financial and Operating Data
This annual report contains financial statements and financial information relating to the Group. In particular, this
annual report contains our audited consolidated financial statements for the twelve months ended 31 December
2022. The financial statements appended to this annual report are presented in U.S. dollars and have been prepared
in accordance with International Financial Reporting Standards ("IFRS").
The functional currency of the Company is U.S. dollars. Accordingly, transactions in currencies other than our
functional currency are translated into U.S. dollars at the exchange rates prevailing on the applicable transaction
dates.
Certain arithmetical data contained in this annual report, including financial and operating information, have been
subject to rounding adjustments. Accordingly, in certain instances, the sum of the numbers in a column or a row in
tables contained in this annual report may not conform exactly to the total figure given for that column or row.
All numbers are presented in thousands, except share, per share and exchange rate data, unless otherwise stated.
PART I
ITEM 1. KEY INFORMATION
Currency Presentation and Exchange Rate Information
Unless otherwise indicated, all references in this annual report to "U.S. $" or "U.S. dollars" are to the lawful currency
of the United States; all references to "€" or the "Euro" are to the lawful currency of the member states of the
European Union that adopt the single currency in accordance with the EC Treaty, which means the Treaty
establishing the European Community (signed in Rome on 25 March 1957), as amended by the Treaty on European
Union (signed in Maastricht on 7 February 1992) and as amended by the Treaty of Amsterdam (signed in Amsterdam
on 2 October 1997) and includes, for this purpose, Council Regulations (EC) No. 1103/97 and all references to
8
"PLN" or "Polish Zloty" are to the lawful currency of the Republic of Poland. All references to U.S. dollars, Euro,
Polish Zloty and other currencies are in thousands, except share and per share data, unless otherwise stated.
The following tables set out, for the periods indicated, certain information regarding the average of the 11:00 a.m.
buying/selling rates of the dealer banks as published by the National Bank of Poland, or NBP, for the zloty, the
“effective NBP exchange rate”, expressed in Polish Zloty per dollar and Polish Zloty per Euro. The exchange rates
set out below may differ from the actual exchange rates used in the preparation of our consolidated financial
statements and other financial information appearing in this annual report. Our inclusion of the exchange rates is
not meant to suggest that the U.S. dollars amounts actually represent such polish Zloty or Euro amounts or that
such amounts could have been converted into Polish Zloty or Euros at any particular rate, if at all.
Year ended December 31,
Year (Polish Zloty to U.S. dollar) 2018 2019 2020 2021 2022
Exchange rate at end of period .....................................
3.76
3.80
3.76
4.06 4.40
Average exchange rate during period
(1)
.........................
3.62
3.84
3.90
3.88 4.47
Highest exchange rate during period .............................
3.83
4.02
4.27
4.12 4.95
Lowest exchange rate during period .............................
3.32
3.72
3.63
3.67 4.11
__________
The average exchange rate as certified for customs purposes by NBP on the last business day of each month during the applicable period
Highest Lowest
exchange rate exchange rate
during the during the
Month (Polish Zloty to U.S. dollar) month month
January 2022 .................................................................................................
4.11 3.95
February 2022 ...............................................................................................
4.20 3.92
March 2022 ...................................................................................................
4.57 4.17
April 2022 ......................................................................................................
4.46 4.20
May 2022 .......................................................................................................
4.49 4.26
June 2022 ......................................................................................................
4.49 4.27
July 2022……………………………………………………………………………
4.83 4.50
August 2022………………………………………………………………………...
4.80 4.52
September 2022……………………………………………………………………
5.04 4.62
October 2022……………………………………………………………………….
5.02 4.72
November 2022…………………………………………………………………….
4.83 4.48
December 2022…………………………………………………………………….
4.49 4.37
The following table shows for the dates and periods indicated the period-end, average, high and low Euro to U.S.
dollar exchange rate as calculated based on the rates reported by the National Bank of Poland.
Year ended December 31 (Euro to U.S. dollar)
2018
2019
2020
2021
2022
Exchange rate at end of period .....................................
0.8743
0.8918
0.8144
0.8827 0.9386
Average exchange rate during period
(1)
.........................
0.8487
0.8935
0.8729
0.8467 0.9530
Highest exchange rate during period .............................
0.8702
0.9149
0.9207
0.8874 1.0148
Lowest exchange rate during period .............................
0.8008
0.8782
0.8575
0.8205 0.8739
The average NBP exchange rate, euro per U.S. $, on the last business day of each month during the applicable period
9
Month (Euro to U.S. dollar)
Highest Lowest
exchange rate exchange rate
during the during the
month
month
January 2022 .................................................................................................
0.8949 0.8731
February 2022 ...............................................................................................
0.8946 0.8739
March 2022 ...................................................................................................
0.9209 0.8964
April 2022 ......................................................................................................
0.9477 0.9068
May 2022 .......................................................................................................
0.9533 0.9313
June 2022 ......................................................................................................
0.9530 0.9314
July 2022……………………………………………………………………………
0.9976 0.9581
August 2022…………………………………………………………………………
1.0054 0.9671
September 2022……………………………………………………………………
1.0346 0.9818
October 2022……………………………………………………………………….
1.0314 1.0027
November 2022…………………………………………………………………….
1.0243 0.9602
December 2022…………………………………………………………………….
0.9557 0.9419
Selected Financial Data
The following table set forth our selected historical financial data for the years ended December 31 2022, and 2021
and should be read in conjunction with Item 3. “Operating and Financial Review and Prospects” and the consolidated
financial statements (including the notes thereto) included elsewhere in the annual report. We have derived the
financial data presented in accordance with IFRS from the audited consolidated financial statements.
For your convenience, certain U.S. $ amounts as of and for the year ended 31 December 2022, have been converted
into Euro and PLN as follows:
• Individual items of the balance sheet – based at average exchange rates quoted by the National Bank of
Poland 31 December 2022, that is 1 US$ = 4.4018 PLN and 1 EUR = 4.6899 PLN.
• Individual items in the income statement and cash flow statement – based at exchange rates representing
the arithmetic averages of the exchange rates quoted by the National Bank of Poland for the last day of
each month in a period between 1 January to 31 December 2022, that is 1 US$ = 4.4679 PLN and 1 EUR
= 4.6883 PLN.
10
Period from 1 January to 31 December
2022 2021
USD
PLN
EUR
USD
Revenue
2,690,039
12,018,713
2,563,564
3,077,976
Cost of sales (2,462,208) (11,000,797) (2,346,444) (2,859,448)
Gross profit
227,831
1,017,917
217,119
218,528
Gross
profit margin
8.47%
7.1
0
%
Selling expenses (69,217) (309,252) (65,963) (62,286)
Administrative expenses (47,620) (212,759) (45,381) (42,493)
Profit from operations
110,994
495,905
105,775
113,749
Financial expenses (25,694) (114,797) (24,486) (24,313)
Financial income 4,960 22,160 4,727 4,626
Other gains and losses 948 4,236 903 180
Share of loss of equity-accounted investees (162) (724) (154) 0
Profit before taxation
91,046
406,781
86,765
94,242
Taxation (15,176) (67,804) (14,462) (17,175)
Profit after taxation
75,870
338,976
72,303
77,067
Attributable to:
Non-controlling interests 3 13 3 44
Owners of the Company
75,867
338,963
72,300
77,023
USD
PLN
EUR
USD
EBITDA calculation
Profit before tax 91,046 406,781 86,765 94,242
Add back:
Financial expenses/net 20,734 92,637 19,759 19,687
Other income (948) (4,236) (903) (180)
Share of loss of equity-accounted investees 162 724 154 0
Depreciation 4,554 20,347 4,340 3,910
Amortization 1,203 5,375 1,146 1,164
EBITDA for the period 116,751 521,627 111,262 118,823
USD
(cents)
PLN
(grosz)
EUR
(cents)
USD
(cents)
Earnings per share
Weighted average basic and diluted earnings per share
from continuing operations 137.10 612.54 130.65 138.86
11
2022 2021
USD PLN EUR USD
Net cash (outflows)/inflows from operating activities (56,048) (250,415) (53,413) 41,367
Net cash outflows from investing activities (11,075) (49,482) (10,554) (15,029)
Net cash inflows from financing activities 8,555 38,227 8,154 10,899
Net (decrease)/increase in cash and cash
equivalents
(58,568)
(261,669)
(55,813)
37,237
Cash at the beginning of the year 150,920 674,285 143,823 113,683
Cash at the end of the year 92,352 412,616 88,010 150,920
As of 31 December, 2022
As of 31
December,
2021
USD
PLN
EUR
USD
Current assets
1,003,920 4,419,055 942,249 874,760
Non-current assets
59,606 262,374 55,944 48,427
Total assets
1,063,526 4,681,429 998,194 923,187
Liabilities
819,346 3,606,597 769,014 733,723
Equity
244,180 1,074,832 229,180 189,464
Definitions and use of Alternative Performance Measures:
Gross profit
Gross profit is the residual profit made after deducting the cost of sales from revenue.
Gross profit margin
Gross profit margin is calculated as the gross profit divided by revenue, presented as a percentage.
EBITDA
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is calculated as the Profit before Tax, Net
financial expenses, Other income, Share of profit/loss of equity-accounted investees, Depreciation, Amortization,
Goodwill impairment and Negative goodwill, all of which are directly identifiable in financial statements.
The use of the above Alternative Performance Measures (“APM”) is made for the purpose of providing a more detailed
analysis of the financial results
12
Risk Factors
This section describes significant risks and uncertainties affecting our business. The risks and uncertainties
described below are not the only ones we face. There may be additional risks and uncertainties not presently known
to us or that we currently deem immaterial. Any of these risks could adversely affect our business, financial condition,
our results of operations and our liquidity.
Risk factors relating to our business and industry
The war between Russia and Ukraine and sanctions imposed on Russia and Belarus
The war between Russia and Ukraine (which were, before the war, the two major markets for ASBIS) constituted a
major disruption in demand in both countries, the whole region and the globe. The war has created the most
unfavorable business environment in both countries. Despite the large geographical presence of the Group, it is not
possible to totally weather the impact of a full-scale war between these two countries. The Company considers the
situation as critical, and it is extremely difficult to judge how this will evolve.
We have a mutual understanding with all our vendors and service providers that our partnerships will continue but
we cannot warrant that the business can be retained due to the sanctions imposed on Russia. These sanctions are
significant and limit the ability of the Group to sell specific products; this is expected to continue to adversely impact
our revenues. The Group being fully compliant to the directions given by the EU and its suppliers, has undertaken
all necessary actions to prevent sales of sanctioned products to sanctioned entities and/or individuals.
Spreading of the Covid-19 Virus in the markets we operate
The COVID-19 pandemic has had and continues to have a significant impact around the world. The COVID-19
pandemic has at times caused significant volatility and disruption in global financial markets. The shutdown of the
economies is no longer an option, however, the zero-COVID policy in China and Chinese Covid lockdowns have
disrupted the supply chain and made consumers much concerned about the overall situation.
Having seen the development of the pandemic, the Company managed all related issues that have arisen and is
expecting that soon this will be declared as finished.
The in-country financial conditions affecting our major markets, gross profit, and gross profit margin
Throughout the years of operation, the Company has from time to time suffered from specific in-country problems,
emanating from the deterioration of specific countries’ financial situation, due to a number of issues including but
not limited to political instability. We need to monitor any developments, react fast and weather every risk showing
up in a specific market to secure our results.
The Company needs to keep in mind that different in-country problems might arise at any time and affect our
operations. Even though we have improved our procedures, we cannot be certain that all risks are mitigated.
Fluctuation in the value of currencies in which operations are conducted and activities are financed relative
to the U.S. dollar could adversely affect our business, operating results, and financial condition.
The Company’s reporting currency is the U.S. dollar. In 2022 a good portion of our revenues was denominated in
U.S. dollars, while the balance is denominated in Euro, Ruble, UAH, KZT and other currencies, certain of which are
linked to the Euro. Our trade payable balances are principally (about 85%) denominated in U.S. dollars. In addition,
approximately half of our operating expenses are denominated in U.S. dollars and the other half in Euro or other
currencies, certain of which are linked to the Euro.
As a result, reported results are affected by movements in exchange rates, particularly in the exchange rate of the
U.S. dollar against the Euro and other currencies of the countries in which we operate, including the Russian Ruble,
the Ukrainian Hryvnia, the Czech Koruna, the Polish Zloty, the Croatian Kuna, the Kazakhstani Tenge and the
Hungarian Forint.
13
In particular, a strengthening of the U.S. dollar against the Euro and other currencies of the countries in which we
operate may result in a decrease in revenues and gross profit, as reported in U.S. dollars, and foreign exchange
loss relating to trade receivables and payables, which would have a negative impact on our operating and net profit
despite a positive impact on our operating expenses.
On the other hand, a devaluation of the U.S. dollar against the Euro and other currencies of the countries in which
we operate may have a positive impact on our revenues and gross profit, as reported in U.S. dollars, which would
have a positive impact on operating and net profit despite a negative impact on our operating expenses. In addition,
foreign exchange fluctuation between the U.S. dollar and the Euro or other currencies of the countries in which we
operate may result in translation gains or losses affecting foreign exchange reserve. Furthermore, a major
devaluation or depreciation of any such currencies may result in a disruption in the international currency markets
and may limit the ability to transfer or to convert such currencies into U.S. dollars and other currencies.
Despite all efforts of the Company, there can be no assurance that fluctuations in the exchange rates of the Euro
and/or other currencies of the countries in which we operate against the U.S. dollar will not have a material adverse
effect on our business, financial condition and results of operations. Especially at extreme cases, like the acts of
war, we have suffered due to the governmentally driven exchange rates and the ability of the Company to undertake
hedging has been significantly affected. Therefore, careful observation of the currency environment remains a
crucial factor for our success.
Worldwide financial environment
The overall financial environment and the economic landscape of each country we operate in, always play a
significant role in our performance. The revised strategy and adaptation to the new environment, i.e., by rebuilding
our product portfolio, has paid off in terms of profitability and sales in the last three years.
However, there are many uncertainties about the world economy following the war in Ukraine, the volatility of
currencies and the fragility of demand in many markets. Additionally, from time to time, unpredictable situations may
happen in selected markets.
We believe that the Company is much more flexible and better prepared to weather any obstacles that may arise
due to the worldwide financial environment, however we can see that a full-scale war between these two countries
brings unprecedented consequences.
In addition to the above, recently it has been noticed that multiple raw materials and finished product prices have
risen dramatically, and this might significantly impact demand generation. This must be closely monitored, and the
Company is alerted to manage any market anomalies.
Credit risk faced by us due to our obligations under supply contracts and the risk of delinquency of
customer accounts receivable could have a material adverse effect on our business, operating results, and
financial position.
The Company buys components and finished products from its suppliers on its own account and resells them to its
customers. The Company extends credit to some of its customers at terms ranging from 7 to 90 days or, in a few
cases, to 120 days.
The Company’s payment obligations towards its suppliers under such agreements are separate and distinct from its
customers' obligations to pay for their purchases, except in limited cases where the Company’s arrangements with
its suppliers require the Company to resell to certain resellers or distributors. Thus, the Company is liable to pay its
suppliers regardless of whether its customers pay for their respective purchases.
As the Company’s profit margin is relatively low, in the event where the Company is not able to recover payments
from its customers, it is exposed to financial liquidity risk. The Company has in place credit insurance which covers
such an eventuality for the majority of its revenues.
14
Despite all efforts to secure our revenues, certain countries remained non-insured (Ukraine), therefore it is very
important for us to ensure that we find other sources of securities which help us minimize credit risk. The Board of
Directors decided to enhance the Company’s risk management procedures.
These do not guarantee that all issues will be avoided, however, they have granted the Company with confidence
that is in a position to weather any possible major credit issue that may arise.
Competition and price pressure in the industry in which we operate on a global scale may lead to a decline
in market share, which could have a material adverse effect on our business, operating results, and financial
condition.
The IT distribution industry is a highly competitive market, particularly with regards to products selection and quality,
inventory, price, customer services and credit availability and hence is open to margin pressure from competitors
and new entrants.
The Company competes at the international level with a wide variety of distributors of varying sizes, covering
different product categories and geographic markets. In particular, in each of the markets in which the Company
operates it faces competition from:
1. International IT and CE distributors with presence in all major markets we operate
2. Regional IT and CE distributors who cover mostly a region but are quite strong
3. Local distributors who focus mostly on a single market but are very strong
4. International IT and mobile phone brokers, who sell opportunistically in any region and/or country
Competition and price pressures from market competitors and new market entrants may lead to significant
reductions in the Company’s sales prices.
Such pressures may also lead to a loss of market share in certain of the Group's markets. Price pressures can have
a material adverse effect on the Company’s profit margins and its overall profitability, especially in view of the fact
that its gross profit margins, like those of most of its competitors, are low and sensitive to sales price fluctuations.
The IT distribution and mobile devices business have low-profit margins, which means that operating
results are highly sensitive to increased operating costs, which if not successfully managed could have a
material adverse effect on our business, results of operations and financial condition.
The Company’s business is comprised of both a traditional distribution of third-party products and own brands. This
allows the Company to deliver healthier gross profit margins when conditions are favorable.
In the traditional distribution business, the Company’s gross profit margins, like those of other distributors of IT
products, are low and the Company expects that in the distribution arm of its business they will remain low in the
foreseeable future.
Increased competition arising from industry consolidation and low demand for certain IT products may hinder the
Company’s ability to maintain or improve its gross margins. A portion of the Company’s operating expenses is
relatively fixed, and planned expenditures are based in part on anticipated orders that are forecasted with limited
visibility of future demand.
As a result, the Company may not be able to reduce its operating expenses as a percentage of revenue to mitigate
any reductions in gross margins in the future.
To increase gross margins, the Company has dynamically developed its own brand business as this allows for
higher gross profit margins. At the end of 2022 we have added to our portfolio a new own brand namely “CRON
Robotics” operating under a new business division - AROS - ASBIS Robotic Solutions. The Company is also
constantly investing in the VAD business which delivers higher gross profit margins.
15
Inventory obsolescence and price erosion in the industry in which we operate may have a material adverse
effect on our business, financial condition, and results of operations.
The Company is often required to buy components and finished products according to forecasted requirements and
orders of its customers and in anticipation of market demand. The market for IT finished products and components
is characterized by rapid changes in technology and short product shelf life, and, consequently, inventory may
rapidly become obsolete. Due to the fast pace of technological changes, the industry may sometimes face a
shortage or, at other times, an oversupply of IT products.
As the Company increases the scope of its business and of inventory management for its customers, there is an
increasing need to hold inventory to serve as a buffer in anticipation of the actual needs of the Company’s customers.
This increases the risk of inventory becoming devalued or obsolete and could affect the Company’s profits either
because prices for obsolete products tend to decline quickly, or because of the need to make provisions or even
write-offs.
In an oversupply situation, other distributors may elect to proceed with price reductions to dispose of their existing
inventories, forcing the Company to lower its prices to stay competitive. The Company’s ability to manage its
inventory and protect its business against price erosion is critical to its success.
Several of the Company’s most significant contracts with its major suppliers contain advantageous contract terms
that protect the Company against exposure to price fluctuations, defective products and stock obsolescence.
Our business is highly dependent on distribution contracts with a limited number of suppliers; a loss of or
change in the material terms of these contracts could have a material adverse effect on our business,
operating results and financial condition.
The part of our business consisting of the distribution of third-party products is dependent on the decisions and
actions of a limited number of suppliers. In the year ended 31 December 2022, the Company held contracts with
Apple, Intel, Advanced Micro Devices (AMD), Seagate, Western Digital, Microsoft, Dell, Toshiba, Acer, Lenovo and
other international suppliers. Contracts with these suppliers are typically on a non-exclusive basis, allow for
termination with or without cause and are open-ended with respect to requirements and output rather than imposing
any commitment to a specific volume of business or scope of work.
We face a risk of termination of our distribution agreements, in the event that we do not perform pursuant to the
supplier's expectations or for any other reason, including a number of factors outside our control. Changes in the
suppliers' business strategies, including moving part or all of their distribution arrangements to our competitors, or
directly distributing products to end-users, could result in the termination of the respective distribution contracts. Any
of these suppliers may merge with, acquire or be acquired by any of our competitors which already has its own
distribution network in the market. Any supplier may consider us redundant as a distributor and may terminate our
distribution agreement or may experience financial difficulties, as a result of which it may not be able to grant
beneficial credit terms and/or honour financial terms in the relevant distribution agreements, such as those relating
to price protection, stock returns, rebates, performance incentives, credit from returned materials and
reimbursement of advertising expenses incurred during joint promotion campaigns. Termination or material change
in the terms of a vendor contract due to any of the aforesaid factors could have a material adverse effect on our
business, results of operations and financial condition.
Our inability to maintain or renew our distribution and supply contracts on favourable terms with key
customers and suppliers could have a material adverse effect on our business, operating results and
financial condition.
In the part of our business related to the distribution of third-party products, we have significant contracts with a
limited number of customers and other business partners, some of which are oral agreements, the precise terms of
which and the enforceability of which, remain uncertain, or are agreements that may be terminated without cause
or by written notice at the expiry of their term.
In addition, a number of our most significant contracts with our major suppliers contain terms that protect us against
exposure to price fluctuations, defective products and stock obsolescence.
16
Specifically, our contracts terms including terms such as (i) a price protection policy, which allows us to request
reimbursement from the suppliers for inventory in transit or held at our warehouses in the event that product prices
decline; (ii) a stock rotation policy under which we have the right to return to the supplier slow moving inventory in
exchange for credit, which reduces our exposure to obsolescence of inventory; and (iii) a return material
authorization policy under which we can return defective items to our suppliers in return for either credit,
replacements or refurbished products.
If we are unable to maintain or enforce our significant contracts, or if any of our significant suppliers refuse to renew
contracts with us on similar terms, or new significant suppliers of ours do not make such terms available to us, we
could face a higher risk of exposure to price fluctuations and stock obsolescence, which given our narrow gross
profit margins, could have a material adverse effect on our business, operating results and financial condition.
Our suppliers' increasing involvement in e-commerce activities, which would enable them to directly sell to
our customers, could threaten our market share, and therefore adversely affect our business, operating
results and financial condition.
In the third-party products distribution part of our business, we operate as a distributor, or a "middleman", between
manufacturers and our customers. Manufacturers are sometimes able to outsource their sales and marketing
functions by engaging the services of a distributor and concentrating on their core competencies.
With the emergence, however, of new internet technologies and e-commerce, more manufacturers are developing
their own online commerce platforms with the capability to accept orders and conduct sales through the internet.
Global distributors have also set up their own web-sites to enable sales and purchases to be conducted online.
Although we have developed the IT4Profit platform, an online purchasing platform for electronic dealing with our
customers (B2B), there can be no assurance that any of our suppliers or competing distributors will not successfully
implement similar electronic purchasing platforms and manage to fully satisfy our customers' needs, in which case
our risks losing a significant part of our business.
In addition, market prices of components may deteriorate as a result of increasing online competition, as online
customers have the ability to search globally for the cheapest available components.
If we are unable to effectively leverage our internet technologies and e-commerce or successfully compete with
emerging competitors offering online services, this could have a material adverse effect on our business, operating
results and financial condition.
Our success is dependent on our own logistics and distribution infrastructure and on third parties that
provide those services, a loss of which could adversely affect our business, operating results and financial
performance.
Currently, ASBIS has two main distribution centers (Czech Republic and United Arab Emirates) covering the vast
majority of its operations. We have recently added another two regional distribution centers in Georgia and South
Africa. As a result, we are highly dependent on third-party providers for logistics such as courier and other
transportation services. An interruption or delay in delivery services causing late deliveries could result in loss of
reputation and customers and could force us to seek alternative, more expensive delivery services, thereby
increasing operating costs, which would have an adverse effect on our business, operating results and financial
performance. An important part of our strategy to achieve cost efficiencies while maintaining turnover growth is the
continued identification and implementation of improvements to our logistics and distribution infrastructure. We need
to ensure that our infrastructure and supply chain keep pace with our anticipated growth. The cost of this enhanced
infrastructure could be significant and any delays to such expansion could adversely affect our growth strategy,
business, operating results and financial performance. Therefore, any significant disruption to the services of these
third-party providers could have a material adverse effect on our business, results of operations and financial
condition. Recently, we have observed a significant increase in transportation costs, as well as an increase in raw
material prices. The Group has to constantly search and find ways of mitigating such increases and offer competitive
pricing to customers.
17
Our inability to recruit and retain key executives and personnel could have a material adverse effect on our
business, operating results and financial condition.
Our business depends upon the contribution of a number of our executive Directors, key senior management and
personnel, including Siarhei Kostevitch, our Chief Executive Officer and Chairman of the Board of Directors. There
can be no certainty that the services of Mr Kostevitch and of other of our key personnel will continue to be available
to us. We have in the past experienced and may in the future continue to experience difficulty in identifying expert
personnel in our areas of activity, and particularly in the areas of information technology and sales and marketing,
in the countries in which we operate. In addition, we do not currently maintain "key person" insurance.
If we are not successful in retaining or attracting highly qualified personnel in key management positions, this could
have a material adverse effect upon our business, operating results and financial condition.
High cost of debt
The distribution business entails a higher need for cash available to support growth. The Group has managed to
raise cash from various financial institutions, however, in certain cases, the cost of quite high.
The Company has already negotiated improved terms with some of its financiers and is currently undertaking certain
extra steps to further lower its cost of financing. Base rates (US Libor, Euribor, other local base rates) have recently
shown a significant uptrend and this has increased the Company’s WACD.
The weighted average cost of debt (WACD) in 2022 has increased to 10.5%, from 6% in 2021.
Development of own brand business
The Company’s strategy is to focus more on profitability than on revenues, thus we continue to develop the own-
brand business that allows for higher gross profit margins. This includes the development of tablets and other
product lines that are sold under Prestigio and Canyon brands in all regions of the Company’s operations. The
Company has also invested in another own brand, Perenio - which includes sales of smart-home, smart-security
sensors and other products. The results from Perenio brand were not the ones we expected to see; thus, we
currently undertake certain corrective actions. At the end of 2021, the Company launched two new own brands:
Lorgar - a brand of ultimate accessories for gamers and Aeno - a brand of smart home appliances.
At the end of 2022, the Company has launched a new own brand “Cron Robotics” operating under a new business
division – AROS (ASBIS Robotic Solutions). The core business of this division is based on two major segments –
the distribution of collaborative robots (cobots) from leading global brands in the sector as well as own robotic
platforms under own brand. In order to keep quality under control and achieve the maximum possible gross profit
margins, the Company’s Directors have decided to operate under a “back-to-back scheme”. This implies that orders
are placed with ODMs, only if they are in advance confirmed by customers. The Company is undertaking a number
of quality control measures to mitigate this risk but given the volumes and a large number of factories used to
produce these products, these controls might not be sufficient. Moreover, competition has already been intensified
and the Company may not be able to sustain its profitability levels.
Environmental and Climate Changes
In terms of transition risks that arise from the transition to a low-carbon and climate-resilient economy, we may face
the following risks: policy and legal risks (there may be laws or policies put in place that may require a more
environmentally cautious approach to raw materials and land use), technology risks (changes in technology used to
produce IT equipment) – these both may lead to growing prices in terms of IT equipment and solutions. We may
also face market risk with consumers switching to more energy-efficient appliances or making more savvy purchases
to limit their own impact on the environment. We will monitor these trends and introduce the latest hardware for our
customers. We may also face reputational risks with difficulties in attracting customers, business partners and
employees if we do not take strong enough actions against climate changes. In terms of physical risks resulting from
climate changes, we may face both acute and chronic risks.
18
Acute physical risks may arise from weather-related events in the form of floods, fires or droughts that may damage
factories in certain regions, cause factories to limit or temporarily stop their production or disrupt our supply chain in
other ways.
These may result in temporary limitations in our product offering or rising prices of hardware and components.
Chronic physical risks - i.e., risks that may result from long-term changes in the climate, may also affect ASBIS.
Growing temperatures worldwide may cause a need for more temperature-resilient hardware and appliances and
may also result in more hardware malfunctions that may increase warranty claims.
ITEM 2. Information on the Company
History and Development of Asbisc Enterprises Plc and Business Overview
Asbisc Enterprises Plc. is the parent entity for the Group described in this chapter, in the section "Group Structure
and Operations".
ASBISc Enterprises Plc is one of the leading distributors of Information Technology ("IT") products and Consumer
Electronics (CE) in Europe, Middle East and Africa (“EMEA”) Emerging Markets: Central and Eastern Europe, the
Baltic States, the Former Soviet Union, the Middle East and Africa, combining a broad geographical reach with a
wide range of products distributed on a "one-stop-shop" basis. Our main focus is on the following countries:
Kazakhstan, Ukraine, Middle East countries (i.e., United Arab Emirates, Qatar and other Gulf states), Slovakia,
Poland, Czech Republic, Caucasus region (Armenia, Azerbaijan, Georgia), Romania, Croatia, Slovenia, Bulgaria,
Serbia, Hungary, and Latvia.
The Group distributes IT components (to assemblers, system integrators, local brands and retail) as well as A-
branded finished products like desktop PCs, laptops, servers, and networking to SMB and retail. We also have a
very strong consumer arm where we distribute our products to the leading retailers, e-tailers and telcos across the
markets we operate. Our IT product portfolio encompasses a wide range of IT components, blocks and peripherals,
and mobile IT systems. We currently purchase most of our products from leading international manufacturers,
including Apple, Intel, Advanced Micro Devices ("AMD"), Seagate, Western Digital, Samsung, Microsoft, Toshiba,
Dell, Acer, Lenovo and Hitachi. In addition, a part of our revenues is comprised of sales of IT products under our
private labels: Prestigio, Prestigio Solutions, Canyon, Perenio, Aeno, Lorgar and Cron Robotics.
ASBISc commenced business in 1990 in Belarus and in 1995 we incorporated our holding Company in Cyprus and
moved our headquarters to Limassol. Our Cypriot headquarters support, through two master distribution centers
(located in the Czech Republic and the United Arab Emirates), our network of 31 warehouses located in 28 countries.
This network supplies products to the Group's in-country operations and directly to its customers in approximately
60 countries.
The Company’s registered and principal administrative office is at 1, Iapetou Street, 4101, Agios Athanasios,
Limassol, Cyprus.
Our revenues amounted to U.S. $ 2,690,039 in 2022, compared to U.S. $ 3,077,976 in 2021, following our strategy
to increase profitable business and improve market share alongside with improving gross profit margins. As a
consequence, the Company earned a net profit after tax of USD 75.9 million, reaching almost the same figure as
with the year before (USD 77.1 million) - the highest ever in the Company’s history.
Our headquarters are home to our centralized purchasing department and global control function, which centrally
monitors and controls our global activities, including purchasing, warehousing and transportation operations. In line
with our strategy of focusing on automation and innovation in order to increase our cost-efficiency, in 2002 we began
developing the IT4Profit platform, our online purchasing platform for electronic trading with our customers (B2B) and
electronic data interchange for the Company and its subsidiaries.
19
Within this platform, we have also implemented our end-to-end online supply chain management system, in order
to effectively manage our multinational marketplace and increase automation and reporting transparency both
internally and vis-à-vis our suppliers.
We combine international experience of our central management team with local expertise of our offices in each of
the 28 countries in which we operate. With our broad local presence, we have developed an in-depth knowledge
and understanding of fast-growing markets in regions such as Central and Eastern Europe “(CEE”) and FSU and
our diverse cultural, linguistic and legal landscape, which may form significant barriers to entry for most of our
international competitors. The Directors believe that this advantage has helped us to quickly and cost-effectively
penetrate emerging markets and strengthen our competitive position, in the markets where we operate.
History of the Group
The business has been established in Minsk, in 1990 by Mr Siarhei Kostevitch and the Company’s main activity was
the distribution of Seagate Technology products in the territory of the Former Soviet Union. Then, in 1995, the
Company was incorporated in Cyprus and moved its headquarters to Limassol together with all key management.
In 2002, in order to fund further growth, we privately placed U.S. $ 6,000 worth of shares with MAIZURI Enterprises
Ltd (formerly named Black Sea Fund Limited) and U.S. $ 4,000 with Alpha Ventures SA. In 2006, we listed our
common stock on Alternative Investment Market of London Stock Exchange («AIM»), however after the successful
listing on the Warsaw Stock Exchange (October 2007) the Board of Directors cancelled the AIM listing as of the 18
th
of March 2008. Ever since the company remained listed at the Warsaw Stock Exchange where it joined the WIG 40
index.
Strengths of the Group
The Directors consider that our key strengths are:
• Broad geographic coverage combined with a strong local presence.
Unlike most of our international competitors, we operate with active local presence in a number of countries across
different regions. Since many of our competitors target the same markets from a number of different locations in
Western Europe, we benefit from increased logistical cost efficiencies. In particular, our broad geographic coverage,
combined with our centralized structure and automated processes, results in reduced shipping costs and lower
revenue collection expense, as well as a consistent marketing approach, as compared to our competitors. As a
result, we have become an authorized distributor for leading international suppliers wishing to penetrate a number
of fast-growing markets served by us, offering them the ability to penetrate these markets in a cost-efficient manner
and through a consistent marketing approach.
• Experienced management team combined with local expertise.
Our management is a team of experienced executives. Our Chief Executive Officer has been with the Company
since its inception in 1990, while the majority of our key executives have served for more than twenty years.
Business entities of ASBIS Group are managed by skilled local experts who have a strong understanding of the
diverse markets, considerable knowledge, and a complete grasp of the regulatory environment in their countries.
The Directors believe that local presence represents a significant competitive advantage for us over our multinational
competitors.
• A critical mass of operations.
Having revenues of 2.7 billion U.S. Dollars, sales in approximately 60 countries and facilities in 28 countries, we
believe that we have become a strong partner for leading international suppliers of IT components and finished
products, including Apple, Intel, AMD, Seagate, Western Digital, Samsung, Microsoft, Hitachi, Dell, Toshiba,
Logitech, etc. in most of our regions of operations. Thanks to our size and the scope of our regional reach, we have
achieved authorized distributor status with leading international suppliers, either on a pan-European, regional, or on
a country-by-country basis, thus enjoying a number of beneficial commercial terms and achieving agreements with
respect to the distribution of products offering higher profit margins.
20
• Price protection and stock rotation policy for inventory.
As an authorized distributor for a number of leading international suppliers of IT components, we are able to benefit
from certain beneficial contract terms that provide protection from declining prices or slow-moving inventory.
In particular, such terms allow us to return part of the inventory to the respective distributors at the event market
prices decline or such inventory becomes obsolete. See "Our Main Suppliers - Price Protection Policy and Stock
Rotation Policy". In contrast, in some of the countries in which we operate, many of our major competitors tend to
buy from the open market, which leaves them exposed to the risk of price changes and obsolete stock.
• One-stop-shop for producers and integrators of IT equipment.
We have a diverse portfolio with a large range of A-branded final products like tablets, smartphones, laptops, desktop
computers, servers, networking equipment, and software as well as IT components – such as complete solutions,
building blocks, and peripherals. As a result, we serve as a one-stop-shop, providing complete solutions to
producers and integrators of the server, mobile and desktop segments in the countries in which we operate. The
Directors consider this to be a significant advantage over competitors with more limited product offerings.
• Own brands business improving our profitability
In the past years, we have invested in the development of our own brands and built a strong market position.
In 2022, the Company has launched a new own brand “Cron Robotics” operating under a new business division –
AROS - ASBIS Robotic Solutions. The core business of this division is based on two major segments – the
distribution of collaborative robots (cobots) from leading global brands in the sector as well as own robotic platforms
under own brand, following our decision to strengthen our brand portfolio and having seen how promising this sector
is. We try to keep pushing our seven own brands (Aeno, Canyon, Cron Robotics, Lorgar, Perenio, Prestigio and
Prestigio Solutions) to generate higher levels of revenues and at the same time higher gross profit margins with
good cash flow. The Directors consider own brands to be a valuable reinforcement to our profitability if it is developed
as an addition to the distribution business. Thus, the development of this segment is and will be continued.
• Ability to adjust our cost structure to the new business environment and the Company needs.
This is considered a very big advantage of the Company. It has been proven that the Company could quickly adjust
its cost structure to any turbulent business environment.
Group Structure and Operations
The following table presents our corporate structure as at December 31
st
, 2022:
Company Consolidation
Method
ASBISC Enterprises PLC Mother company
Asbis Ukraine Limited (Kiev, Ukraine) Full (100%)
Asbis PL Sp.z.o.o (Warsaw, Poland) Full (100%)
Asbis Poland Sp. z o.o. (Warsaw, Poland) Full (100%)
Asbis Romania S.R.L (Bucharest, Romania) Full (100%)
Asbis Cr d.o.o (Zagreb, Croatia) Full (100%)
Asbis d.o.o Beograd (Belgrade, Serbia) Full (100%)
Asbis Hungary Commercial Limited (Budapest, Hungary) Full (100%)
Asbis Bulgaria Limited (Sofia, Bulgaria) Full (100%)
Asbis CZ,spoI.s.r.o (Prague, Czech Republic) Full (100%)
UAB Asbis Vilnius (Vilnius, Lithuania) Full (100%)
Asbis Slovenia d.o.o (Trzin, Slovenia) Full (100%)
21
Asbis Middle East FZE (Dubai, U.A.E) Full (100%)
Asbis SK sp.l sr.o (Bratislava, Slovakia) Full (100%)
ASBC F.P.U.E. (Minsk, Belarus) Full (100%)
E.M. Euro-Mall Ltd (Limassol, Cyprus) Full (100%)
OOO ‘Asbis’-Moscow (Moscow, Russia) Full (100%)
Asbis Morocco Sarl (Casablanca, Morocco) Full (100%)
Prestigio Plaza Ltd (Limassol, Cyprus) Full (100%)
Perenio IoT spol. s.r.o. (Prague, Czech Republic) Full (100%)
Asbis Kypros Ltd (Limassol, Cyprus) Full (100%)
“ASBIS BALTICS” SIA (Riga, Latvia)
Full (100%)
Asbis d.o.o. (Sarajevo, Bosnia Herzegovina) Full (90%)
ASBIS Close Joint-Stock Company (Minsk, Belarus) Full (100%)
ASBIS Kazakhstan LLP (Almaty, Kazakhstan) Full (100%)
Euro-Mall SRO (Bratislava, Slovakia) Full (100%)
Asbis China Corp. (former Prestigio China Corp.) (Shenzhen, China) Full (100%)
ASBIS DE GMBH, (Munchen, Germany) Full (100%)
EUROMALL BULGARIA EOOD (Sofia, Bulgaria) Full (100%)
E-Vision Production Unitary Enterprise (Minsk, Belarus) Full (100%)
iSupport Ltd (Kiev, Ukraine) (former ASBIS SERVIC Ltd) Full (100%)
I ON LLC (Kiev, Ukraine) Full (100%)
ASBC MMC LLC (Baku, Azerbaijan) Full (65.85%)
ASBC KAZAKHSTAN LLP (Almaty, Kazakhstan) Full (100%)
Atlantech Ltd (Ras Al Khaimah, U.A.E) Full (100%)
ASBC LLC (Tbilisi, Georgia) Full (100%)
Real Scientists Limited (London, United Kingdom) Full (55%)
i-Care LLC (Almaty, Kazakhstan) Full (100%)
ASBIS IT Solutions Hungary Kft. (Budapest, Hungary) Full (100%)
Breezy LLC (Minsk, Belarus) (former Café-Connect LLC) Full (100%)
MakSolutions LLC (Minsk, Belarus) Full (100%)
Breezy Kazakhstan TOO (Almaty, Kazakhstan) (former TOO “ASNEW”) Full (100%)
Breezy LLC (Kiev, Ukraine) Full (100%)
I.O.N. Clinical Trading Ltd (Limassol, Cyprus) Full (70%)
R.SC. Real Scientists Cyprus Ltd (Limassol, Cyprus) Full (85%)
ASBIS CA LLC (Tashkent, Uzbekistan) Full (100%)
Breezy Service LLC (Kiev, Ukraine) Full (100%)
Breezy Trade-In Ltd (Limassol, Cyprus) (former Redmond Europe Ltd) Full (80%)
I.O. Clinic Latvia SIA (Riga, Latvia) Full (100%)
SIA Joule Production (Riga, Latvia) Full (100%)
ASBC LLC (Yerevan, Armenia) Full (100%)
Breezy Georgia LLC (Tbilisi, Georgia) Full (100%)
ASBC Entity OOO (Tashkent, Uzbekistan) Full (100%)
ACEAN.PL Sp. z o.o (Warsaw, Poland) Full (100%)
Entoliva Ltd (Limassol, Cyprus) Full (100%)
ASBIS HELLAS SINGLE MEMBER S.A. (Athens, Greece) Full (100%)
Prestigio Plaza Kft (Budapest, Hungary) Full (100%)
ASBC SRL (Chisinau, Moldova) Full (100%)
Breezy-M SRL (Chisinau, Moldova) Full (100%)
Breezy Poland Sp. z o.o.(Warsaw, Poland) Full (100%)
22
Asbisc Enterprises Plc is the parent company of the Group. Our subsidiaries are involved in diverse activities related
to the distribution of IT products and components and mobile devices. In particular, our subsidiaries operating under
the ASBIS name are involved in the distribution of IT components, mobile devices, finished products and equipment,
including distribution of products from worldwide leading manufacturers such as Apple, Intel, AMD, Seagate,
Western Digital, Samsung, Microsoft, Hitachi Dell, Acer, Toshiba and many other well-known international suppliers.
Our subsidiaries operating under Prestigio, Canyon and Perenio brands are primarily responsible for the
procurement, quality control, marketing, and wholesale distribution of our private label (Canyon, Prestigio and
Perenio) IT products.
Changes in the Group’s structure
During the year ended December 31
st
, 2021, there were the following changes in the structure of the Company and
the Group:
On April 12th, 2022, the Issuer has acquired 100% of shares of the company ACEAN.PL Sp. z. o.o (Warsaw,
Poland). The Issuer holds 100% in this subsidiary, being equal to share capital of PLN 1,000 (USD 235). We
acquired this entity for second-hand IT products trading.
On May 19th, 2022, the Issuer has disposed 100% of shares of the company Private Educational Institution
“Center of excellence in Education for executives and specialists in Information Technology” (Minsk, Belarus)
for zero consideration.
On July 22nd, 2022, the Issuer has disposed 100% of shares in the company OOO Must (Moscow, Russia)
for a consideration of USD 14.
On August 8th, 2022, the Issuer has acquired 100% of shares of the company Entoliva Ltd (Limassol, Cyprus).
The Issuer holds 100% of shares in this subsidiary, being equal to share capital of EUR 10 (USD 10). We
acquired this entity for land development.
On November 8th, 2022, the Issuer has established the company Breezy Poland (Warsaw, Poland). The Issuer
holds 100% in this subsidiary, being equal to share capital of PLN 500,000 (USD 110,084). We established
this entity to provide warranty services.
On November 8th, 2022, the Issuer has established the company ASBC SRL (Chisinau, Moldova). The Issuer
holds 100% in this subsidiary, being equal to share capital of MDL 4,874,000 (USD 254,412). We established
this entity to distribute IT products.
On November 18th, 2022, the Issuer has established the company ASBIS HELLAS SINGLE MEMBER S.A.
(Athens, Greece). The Issuer holds 100% in this subsidiary, being equal to share capital of EUR 100,000 (USD
103,280). We established this entity to distribute IT products.
On November 21st, 2022, the Issuer has established the company Prestigio Plaza Kft (Budapest, Hungary).
The Issuer holds 100% in this subsidiary, being equal to share capital of HUF 200,000,000 (USD 532,368).
We established this entity to expand our retail business.
On December 8th, 2022, the Issuer has established the company Breezy-M (Chisinau, Moldova). The Issuer
holds 100% in this subsidiary, being equal to share capital of MDL 962,500 (USD 49,509). We established this
entity to provide warranty services.
23
Regional operations
We operate as a one-stop-shop for the desktop PC, server, laptop, tablet PC, smartphones, and software segments.
The management believes that the Company is currently the only IT component and A-branded finished products
distributor that covers substantially all of Eastern Europe, as part of a single supply chain with highly integrated
sales and distribution systems. We also have operations in the Baltic States, the Balkans, the Former Soviet Union,
the United Arab Emirates, and other Middle East countries.
We also provide technical support for all new products that we stock through product line sales managers. Sales
personnel receive internal training and focus groups are established that have an in-depth knowledge of their
respective product lines.
Our sales staff are also trained by our suppliers, such as Apple, Intel, AMD, Seagate, Western Digital, Samsung,
Microsoft, Hitachi, and others, as a result of our status as an authorized distributor of their products. The Directors
consider that this organizational process allows us to provide added value to our customers and differentiate us
from our competitors.
Key markets and regions
Historically, the regions of the Former Soviet Union (“FSU”) and Central Eastern Europe (“CEE”) have been the
largest revenue contributors of the Group. This has not changed in 2022. However, due to the war in Ukraine and
in consequence of the sanctions on Russia and Belarus, the contribution of certain regions – like the CEE region,
in total revenues of the Company for 2022 has changed as compared to 2021. Central and Eastern Europe
contribution has grown to 24.30% in 2022 (from 21,25% in 2021) while the F.S.U. region decreased to 52.31% in
2022 (from 57,66% in 2021). The Middle East and Africa contribution has increased to 15.16% in 2022, from 10,65%
in 2021.
The following table presents a breakdown of our revenue by regions for the years ended 31 December 2022, 2021,
and 2020:
Year ended 31 December
2022
2021
2020
%
%
%
Former Soviet Union
52.31
57.66 54.49
Central and Eastern Europe
24.30
21.25 24.27
Middle East & Africa
15.16
10.65 11.81
Western Europe
6.81
8.66 7.23
Other
1.4
2
1.77 2.20
Total revenue
100
100
100
Products
We engage in the sales and distribution of a variety of products including IT components, mobile devices, laptops,
server and mobile building blocks and peripherals to third-party distributors, OEMs, retailers and e-tailers and
resellers. Our customers are located mainly in Central and Eastern Europe, the Former Soviet Union, Western
Europe, North and South Africa and the Middle East.
24
We engage in the following primary business lines:
• Sales and distribution of IT components and blocks described below that we purchase from a variety of
suppliers such as Intel, AMD, Seagate, and Western Digital
• Value-add distribution (“VAD”) of Apple products in certain Former Soviet Union countries
• Sales of accessories and gaming products (like Logitech)
• Sales of a wide range of finished products from worldwide manufacturers (Dell, Apple, Acer) as well as
software (Microsoft and antivirus software producers)
• Sales of premium consumer products (i.e., Bang & Olufsen)
• Sales of a range of private label products (such as tablet PCs, multiboards, data storage devices, GPS
devices, peripherals, accessories, security solution, products in the field of servers, mass storage, solutions
for data centers, robots (cobots)) with larger volumes and profit potential selected by us and manufactured
by ODM/OEM producers in the Far East under our own private label brands: Canyon, Prestigio, Perenio,
Aeno, Lorgar and Cron Robotics.
The products that are purchased from suppliers and distributed by us are divided into various categories and are
presented in the table below:
Year ended 31 December
2022
2021
(U.S. $)
Smartphones
949,226 895,664
PC mobile (laptops)
253,519 305,333
Central processing units (CPUs)
248,903 441,968
Peripherals
140,754 148,669
Audio devices
117,158 137,456
Servers & server blocks
113,673 119,608
Hard disk drivers (HDDs)
87,498 149,644
Smart devices
80,244 72,735
Networking products
71,646 71,308
Solid-state drivers (SSDs)
71,166 136,080
Display products
67,957 60,607
Software
65,115 69,331
Multimedia
57,972 58,204
PC desktop
54,516 76,589
Tablets
48,422 59,266
Memory modules (RAM)
46,415 63,578
Accessories
36,704 36,190
Other
179,150 175,745
Total revenue
2,690,039 3,077,976
25
Revenues in 2022 declined by only 12.60% as compared to the ones of 2021, despite the ongoing full-scale war in
Ukraine which excluded or limited sales on our three main markets.
In 2022, mainly due to the war in Ukraine but also due to the deteriorating economic situation and high inflation,
multiple product lines have recorded a decrease.
The period of the twelve months of 2022 has shown that despite the ongoing full-scale war in Ukraine, high inflation
and the general, uncertain geopolitical situation, ASBIS has not slowed down but rather steamed up its engine and
continued its strategy of focusing on profitability, developing its markets and refining its product portfolio. We have
continued investing in Central Asia and Caucasus region and in particular: Kazakhstan, Azerbaijan, Uzbekistan,
Georgia and Armenia. We have also dynamically invested in Adriatic and Balkans regions.
To meet all customers’ needs, we have doubled the area of the distribution center in Prague (Czech) to 10,000 m2
and opened two regional distribution centers in Tbilisi (Georgia) with an area of over 3,000 m2 and in Johannesburg
(South Africa) with an area of 500 m2 with the possibility to increase to 8,500 m2.
Currently, we have two main distribution centers (Czech Republic and United Arab Emirates) and two regional
distribution centers (in Georgia and South Africa) with a total area of 26,300 m2, including additional space available
in South Africa.
The chart below indicates trends in sales per product line:
26
The chart below indicates trends in smartphones sales
Sales of smartphones, which contribute to the majority of our revenues, increased by 6.0% in 2022, as compared to
the ones in 2021 as a result of higher demand and higher sales of a different mix of iPhones, including the latest
iPhone 14 series.
Private labels: Canyon, Lorgar, Prestigio, Prestigo Solutions, Perenio, Aeno and Cron Robotics
ASBIS creates, develops, and promotes several proprietary brands – Canyon and Lorgar, Prestigio, Perenio, Aeno
and Cron Robotics. We carefully research the needs of the users in the market and form our portfolio of categories
for each own brand with the most popular and innovative products.
We cooperate directly with reliable factories and suppliers of components and products in the Far East, particularly
in China. Our engineers check and improve each product before it goes into production. There is a strong quality
control system ASBIS. We have high requirements for quality and attentively test products step by step before
entering the consumer market. All ASBIS brand products have the required certificates of conformity to quality in
international format.
In the countries where ASBIS operates, we sell products under our own brands with improved characteristics and
capabilities at competitive prices.
Canyon is a brand with 20-years of history.
Canyon's product portfolio includes over 250 items, including mobile and PC accessories, wearable devices such
as smart watches and fitness trackers. Products are designed for young lovers of urban culture, people of the big
city, and those who strive for innovation. Canyon motivates the younger generation to be themselves, regardless of
body shape, skin color or gender, and change this world for the better - their creativity, their history, their eco-
responsibility, tolerance, humanity, desire to help and share, their reasonable consumption - it is a very valuable
contributions to this world.
The brand pays special attention to compliance with EU environmental standards. The packaging of almost all
devices is made from recyclable materials, avoiding plastic components, and boasts a vibrant and captivating
aesthetic.
Gaming solutions are produced under the Canyon Gaming sub-brand. This is a series of mice, keyboards and other
PC accessories designed for amateur gamers and those who are just beginning their journey in the big gaming
world. Canyon Gaming series have special extra-gaming features: programmable buttons and onboard memory
modules. Devices are produced in a singular and distinctive style while remaining affordable.
27
According to GFK reports, as of the end of 2022, Canyon held a significant market share in several product
categories across different countries. In the Czech Republic, the brand has a market share of 3% in the category of
wireless mice. In Ukraine, Canyon holds a 2% market share in gaming mice, 7% in webcams, 5% in kids’
smartwatches and 2% in adult smartwatches.
At the moment, Canyon products are sold in more than 30 countries. In 2023, Canyon expanded its cooperation
with major distributors in Germany, Spain, the Netherlands, France, Italy, the UAE, Iraq, Kuwait, and Saudi Arabia
and plans to strengthen its presence in the markets of Western Europe and the Middle East.
As part of Canyon's brand strategy for the upcoming year, the brand plans to focus on developing several product
categories. This includes the development of smartwatches in collaboration with global industrial designers, as well
as the expansion of the BT devices, PC accessories, and chargers.
www.canyon.eu I www.gaming.canyon.eu
Lorgar is a brand of highly functional gaming devices for advanced gamers who value and enjoy gaming as their
hobby.
The brand catalog includes several product categories: mice, keyboards, headsets, mousepads, gamepads, web
cameras, microphones, gaming chairs and other accessories. These products released new series starting in the
4th quarter of 2022 and are already available for purchase in Poland, the Czech Republic, Latvia, Lithuania, Estonia,
Bulgaria, Romania, Croatia, Ukraine and other countries.
The brand made its first public appearance at the major European exhibition IFA 2022 in Berlin. Gaming devices at
Lorgar attracted great interest among visitors and partners.
Lorgar creates and promotes high-tech devices for passionate fans of gaming for whom this is a favorite hobby. For
the brand customers, gaming is an important and exciting hobby that is part of real life. This is a comfort zone in
everyday life and the best way to switch the mind from routine to an interesting screenplay. Lorgar shares this
passion for the virtual world and gaming. The brand's motto: “Play Game. Live Life”.
The brand’s mission is to deliver lively and bright emotions from gaming with high-quality devices, inspired by the
requirements of the best gamers.
www.lorgar.eu
Aeno is a new Small Domestic Appliances brand with a focus on smart devices.
The product portfolio includes cleaning and cooking appliances: air purifiers, heaters, steam mops, vacuum
cleaners, garment steamers, kettles, blenders, electric ovens, Sous-Vide, vacuum sealers, and toothbrushes.
In 2022, Aeno launched an innovative, premium, eco-friendly smart heater that uses combined infrared and
convection technology. The product is one-of-a-kind and has no direct competition in any market. An energy-saving
heater can help customers save up to 50% on energy costs over the entire heating season. The Aeno heater works
without blowing air or raising dust and does not produce pollutants, odors or noise.
The brand is working towards its sustainable vision of smart home appliances that align with consumers' lifestyles,
needs, and values. Aeno's mission: to make smart technologies more accessible by taking on an everyday routine
and lessening the burden of housework. That enables a more fulfilling life, freeing time for family and friends, self-
development, and creativity.
The brand also hopes to contribute to society through its environmentally friendly eco-packaging. All packaging is
made from 100% recyclable materials, doesn’t consist of plastic components, which is in keeping with its strong
commitment to build a sustainable future.
28
All models of Aeno are created in the same style. The aesthetics of technology are inseparable from its functions:
devices work together in a single ecosystem that provides access to individual settings. The Aeno app allows
consumers to control all home appliances with their smartphones, manually or with voice assistants, and integrate
home appliances into various automation scenarios.
The brand entered the markets of Ukraine, Belarus, and the Baltics at the start of 2022. However, it soon faced
challenges due to the crisis and had to expand its focus to include Eastern European countries and find suitable
solutions. During the 2nd quarter of 2022, AENO launched its products in Romania, Poland, Slovakia, the Czech
Republic, and Bulgaria. Then, in the following quarter, it further expanded its reach to include Western Europe, and
established partnerships with major distributors in Germany, Switzerland and Spain.
In 2023, Aeno aims to increase the share of eco-friendly smart devices within its product portfolio and enhance its
presence in Western European markets.
https://aeno.com/
Prestigio. Prestigio is an international brand offering a wide range of consumer electronics for home, education,
and office for 20 years. It combines two business directions: Prestigio consumer electronics for the B2C segment
and Prestigio Solutions with cases for B2B partners. Brand sells products in more than 27 countries around the
world.
Prestigio consumer portfolio includes eight categories so far: tablets, laptops, TVs, devices based on
TouchOnKeys™, wine accessories, wireless chargers, portable accumulators, and auto electronics, among which
are unique devices developed by its own design bureau.
A brand pays a lot of attention to product design and details and uses high-quality materials in production. Prestigio
keyboards Click&Touch and Click&Touch 2 even won Red Dot Design Awards in 2020 and 2021 for its outstanding
design.
www.prestigio.com
Prestigio Solutions™ is an international brand of technological solutions for business and education. Prestigio
Solutions™ helps companies to modernize, automate, and simplify their business processes and introduce
advanced technologies at affordable prices. Its sustainable development began in 2013 under the Prestigio brand
with the Multiboard interactive panel. In 2021, Prestigio Solutions™ became an independent brand, offering a wide
range of high-quality and efficient IT solutions for the B2B and B2G segments in 28 EMEA countries. It has
production, design, and technical facilities in Europe and China.
At the moment, the Prestigio Solutions™ brand line includes the MultiBoard interactive panels, Digital Signage AV
solutions, video conferencing systems, business and education software, and RFID solutions.
https://prestigio-solutions.com /
Perenio. Perenio was launched in 2018. Perenio is innovative, all-around technological company specializing in the
Internet of Things, Smart Home/Office, Smart Health. Over 40 engineering team members (including industrial
designers, hardware and firmware engineers, application and server software programmers) work together to
develop complex solutions and products such as IoT platforms, IoT routers, smart sensors, and smart health
devices. Perenio ecosystem includes its own base software platform and a wide range of connected smart devices.
To expand the product portfolio and prepare for market launches, the team is constantly conducting market research,
developing and testing new product ideas.
www.perenio.com
Cron Robotics. At the end of 2022, the Company has launched a new own brand “Cron Robotics” operating under
a new business division – AROS - ASBIS Robotic Solutions. The core business of this division is based on two
major segments – the distribution of collaborative robots (cobots) from leading global brands in the sector as well
as own robotic platforms under own brand Cron Robotics.
29
Complex solutions of AROS bring efficiency in areas like:
1. Automation of conveyor operations in production lines
2. Robotic solutions for automation of warehouse operations
3. Welding of metal constructions
4. Robotic cleaning of the commercial spaces
5. Security patrolling by autonomous mobile platforms
6. Delivery cobots and robotic service kiosks
7. Robotic solutions for education
https://aros.asbis.com/
Suppliers and Procurement
Our Main Suppliers/Partners
We believe that establishing strong supplier relationships is a critical success factor for our business and have
devoted considerable resources over the years to establish strong relationships based on mutual trust with our key
suppliers. In that direction, we strive to provide full visibility to our suppliers by reporting to them crucial information
on a daily/weekly basis, including stock levels, sales-out reports by country, thus assisting them in monitoring
customer demand and allowing them time to comprehend and react to specific market peculiarities, trends and
dynamics.
In 2022, a significant portion of our revenues was generated from our ten biggest suppliers. However, the
management believe that we place no reliance on any of our suppliers since we carry for every product category a
wide portfolio of brands.
Acting as a non-exclusive distributor, we are generally responsible for promoting, marketing, advertising, selling,
and providing training and after-sales support for each supplier's products in the respective markets. A monitoring
mechanism is established by the suppliers to ensure that minimum sales targets are met, pursuant to which we are
responsible for providing our suppliers with various reports, including weekly inventory reports and monthly point of
sales reports.
Price Protection Policy. In an attempt to reduce distributors' exposure to market price fluctuations, a number of
our large suppliers provide in their standard contractual terms for protection from a decline in product prices by
allowing such distributors, including us, to request, within an agreed time frame, reimbursement for inventory in
transit or held in warehouses. This is not, however, usually the case with smaller suppliers, with whom we are more
exposed to potential price variations.
Stock Rotation Policy. Our exposure to the risk of obsolescence of inventory is limited through the stock rotation
policy provided by many of our large suppliers, but not generally under arrangements with smaller suppliers.
In general, under a stock rotation policy, we have the right to return to the supplier, within a predefined time frame,
slow-moving inventory in exchange for credit. In practice, we can return a certain percentage of products we hold
immediately after the end of each quarter, usually based on our sales performance in the preceding quarter.
Return Material Authorization Policy (“RMA”). Subject to the specific provisions of each suppliers' RMA policy,
we have the flexibility to return defective items to our major suppliers in return for either credit, replacements, or
refurbished products.
Procurement Policies
We operate a system of centralized purchasing through our headquarters in Limassol, Cyprus. Country managers
communicate expected sales levels and targets, analyzed by product lines and suppliers, to our Product Line
Managers ("PLMs") who then identify purchasing requirements for the forthcoming three weeks and in turn forward
this information to the Product Marketing Director who verifies and, upon agreement, consolidates the information.
30
The Product Marketing Director then presents the relevant information to management, holding weekly meetings to
review and approve requirements.
We strive to keep our stock, including stock in transit, for our main product lines at a level of four weeks of sales
revenues, and to cover four to five weeks of sales revenues for other product lines in order to ensure adequate
supply, while reducing the length of time over which we hold our inventory at our warehouses. Since we maintain a
stable supplier base, there is no need for any formal supplier take-on procedures.
Sales and Marketing
We focus on developing an efficient online sales infrastructure and a rewarding profit commission scheme, as well
as on investing in training our sales managers in order to instill a thorough understanding of our product offerings
with the goal of enhancing customer satisfaction. We also have the possibility to use some of our main supplier's
marketing funds, to increase our sales and our clients’ satisfaction.
Our marketing department is divided into two groups. The product marketing group establishes pricing policies,
oversees product supply, and communicates with suppliers with regards to the training of PLMs; the channel
marketing group responsible for both central and in-country activities such as public relations, marketing and website
content management.
Our marketing team consists of the Central Marketing Group and the Local Marketing Coordinators, both of which
work in close coordination with suppliers, product managers and sales teams.
Distribution
Distribution model. Our distribution model is based on a system of centralized purchasing operations at our
headquarters in Cyprus, which is in direct contact with the suppliers.
Suppliers replenish their product stocks with our warehouses weekly or even several times per week, after receiving
our product orders, most of them by shipping their products directly to our two master distribution centres, leading
to significant cost savings for us. Local in-country operations place their orders online through our IT4profit online
platform and receive their goods directly from one of the two distribution centres.
On the other hand, products such as memory modules and our private label products with small size, high-price
dynamics and high value are supplied directly to our local in-country operations from the suppliers' factories.
Distribution centers. The distribution network of ASBIS is based on more than 40 in-country stock points - across
CEE, FSU, Gulf, Caucasus, and Africa - replenished via two master distribution centers located in Prague (the
Czech Republic) and Dubai (the United Arab Emirates) and two regional distribution centers located in Tbilisi
(Georgia) and Johannesburg (South Africa).
The facility in Prague is responsible for distribution across whole Europe; Dubai serves our operations in the Middle
East and Africa and certain Central Asian countries.
The distribution center in Johannesburg is served as a fast-reloading station to ASBIS customers located not only
throughout South Africa, but also in the central regions of the continent, while the distribution center in Tbilisi is a
distribution base for the Caucasus region.
The total warehouse space of ASBIS, including main, regional and local distribution centers, currently amounts to
approximately 63,000 m2.
31
The table below presents information with respect to the size and ownership of each of our four distribution centers:
Facility Location Office area (m2) Warehouse area (m2) Total area (m2) Ownership
Prague NEW DCCZ 1,000 13,000 14,000 Leased
Dubai 952 3,294 4,246 Owned
Johannesburg –
South Africa
(including 3PL
bonded storage)
500 3,500 4,000 Leased + 3PL
Tbilisi – Georgia
DCGE Caucasus
Bonded
- 3,000 3,000 3PL
In order to ensure visibility and bottom-line efficiencies of our warehousing environment, we have connected our
warehouse management system ("WMS") to IT4Profit. Thus, when an order is placed on IT4Profit, this is
communicated to our relevant master distribution centre, which can then process the order for delivery. This WMS
is currently functional in the Prague and Dubai warehouses. The Directors believe that the advantages of operating
the WMS connected through IT4Profit include the ability to meet or exceed shipping commitments, instant visibility
of inventory movements, consistency of inventory management records, reduction of inventory write-offs and
simplicity in shipment planning, lot replenishment and storage activities.
In-Country Operations. We operate through 31 local offices in 28 countries. Customer orders are mainly served
through the supply of local offices, and - to the event that local inventory levels are insufficient, additional inventory
is drawn from one of the two distribution centers. Each local office operates its own logistics function and is
responsible for direct shipments to its customers. Our headquarters monitor and assess the performance of each
local logistics center by using a number of key performance indicators, including transit time of incoming shipments,
order fulfilment, (such as pick, pack and ship time and the percentage of orders shipped to commitment by date and
time), on-time delivery, transport, cost per kilogram shipped and cycle count performance.
Distribution Operations Management - "Asbis on IT4Profit"
The Directors consider that an efficient logistics and distribution model is one of the key contributors to maintaining
our success in the distribution industry. Each in-country logistics centre is focused on continuous improvement with
key performance indicators in place to measure performance.
IT4Profit is our online supply chain management software owned by us, which was internally developed, and which
we continuously improve. We use IT4Profit to effectively manage the flow of goods within our distribution network.
This system collaborates and exchanges business data with our key suppliers, master distribution centres,
subsidiaries and customers. Local subsidiaries place their orders online through our e-market place on
www.IT4Profit.com and receive their goods directly from one of the two distribution centres. In addition, local logistics
staff use this online system to ensure that every online order is picked, packed, and shipped within the allocated
timeframe.
IT4Profit provides the following functions:
• interconnectivity with suppliers;
• B2B and B2C online shops to our customers for both front and back-office administration;
32
• online supply chain management;
• statistics for product pricing and product content management and
• comprehensive operational reports and a balanced scorecards management system.
Disaster Recovery
We have developed and will continue to enhance, an enterprise-wide business plan, incorporating a disaster
recovery plan that will enable us to restore all major procedures from offices around the world.
For our servers, we use Intel, Dell and IBM hardware.
In case of a system failure, spare servers kept at a number of locations where we operate can be made available
within 24 hours. In addition to the daily back-ups that we maintain in Cyprus, we have our storage space resources
in Lithuania for performing daily back-ups. In the event of a system failure, we can restore applications and recover
data. In such an instance, this will enable us to continue operating with electronic means and servicing our clients.
ASP services have a different scheme of high availability.
On the main host in Lithuania, the services have fully duplication hardware according to the active-standby scheme
with full online replication. Additionally, data is being replicated with 15 minutes delay to the standby host in Prague
and every day a full back-up of each service is taken.
Customers
We served 20,000 customers in approximately 60 countries in 2022. We have no reliance on any single customer,
as our biggest customer is only responsible for around 5.6% of total revenues. Approximately 60% of our total sales
were conducted on-line, based on our IT4Profit platform described above.
Industry overview and competition
Market characteristics
The markets we operate in are characterized by multi-culture environment and significantly lower per capita income
when compared to the Western European markets.
Despite differences in GDP per person, our markets have been proving quite technology-oriented that consist of
very much educated and demanding consumers.
Distributors are considered to be a basic component of the industry since the major suppliers of technology would
rather deal with distribution, instead of own in-country operational investment.
This is particularly true of the European market, where a diversity of national business practices, as well as cultural
and language differences make it difficult to pursue efficient hardware distribution models without having a strong
local presence. In the Central and Eastern European and Former Soviet Union markets, different currencies, varying
levels of economic development, import regulations and periodic episodes of political and economic instability create
additional impediments to IT distribution not found in Western Europe. At the same time, leading manufacturers of
IT do not want to rely solely on multinational OEMs and world-wide distributors for distribution as this would reduce
producers' bargaining power.
For companies having own brands business, like us, it is important to find new niches all the time and leverage on
market position and brand recognition. The need for new product lines is very important since we need to timely
replace saturated product segments.
Market trends
The year 2022 was the most challenging year for ASBIS, mainly due to the war in Ukraine but also high inflation,
increasing interest rates and an uncertain geopolitical situation. The full-scale war in Ukraine has changed the
functioning of many companies, including ASBIS.
33
Following the invasion of Russia in Ukraine, in March 2022, we had to suspend our operations in Ukraine and
significantly limit our activities in Russia and Belarus due to the imposed sanctions on these two countries. But
thanks to the broad geographic coverage, strong market position, contingency plan and experience gained from
previous crises, we were able to limit the negative effects of the war in Ukraine. We have also managed to regain,
to a large extent, lost revenues from the markets affected by the war. We have secured or moved supplies from
these countries to safe locations and intensified sales in non-conflicted markets. We have invested in Central Asian
markets, which have huge growth potential, increased the gross margin and entered a new market segment -
robotics, which is estimated by analysts to be worth several hundred billion dollars in a few years.
So, in summary it was a difficult year, but full of business successes for ASBIS.
We look into 2023 with confidence and optimism. We have many areas of growth; we are investing further in the
development of new product segments such as the robotics and in new markets such as Central Asia and Africa.
Competitive Landscape – traditional distribution
Distribution of IT and mobile devices in Central and Eastern Europe and the Former Soviet Union is fragmented.
Major multinational players who dominate the U.S. and Western European markets are present in a few countries
each.
A large number of local distributors operate mostly in a single country with only a few operating in more than one
country. Typically, these local players have the largest share in each of the countries.
The Directors consider the Company to be one of the largest distributors of IT components in Eastern Europe, with
a distribution network covering the majority of countries in Eastern Europe, and one of the three largest distributors
in the EMEA region for IT components such as HDDs and CPUs. As no other distributor has a pan-regional
presence like ASBIS, we believe we are very much protected with our current set up and infrastructure.
We compete with local distributors, but the Directors consider that none of them has comparable geographic
coverage, nor carry as diverse a portfolio as we do. The Directors consider that we do not have one main competitor
but rather a group of competitors varying from country-to-country.
As some consolidation is seen on the market, and this trend may continue due to the effects of the recent world’s
financial crisis and limited abilities of the smaller distributors to finance themselves, ASBIS is ready to benefit from
any opportunities that may arise.
Competitive Landscape – Private Labels
The private labels, Canyon, Prestigio, Prestigio Solutions, Perenio, Aeno, Lorgar and Cron Robotics are competing
with a variety of brands in all markets we operate. The market leaders of the tablet and smartphone segments are
Apple and Samsung. We do not consider our Prestigio brand to be competing with these conglomerates since we
are not considered as an A-brand. We are positioning ourselves as a B-Brand with a limited amount of product
offerings and limited countries of presence. Recently the market was flooded by cheap brands, thus we have
decided not to compete on price but rather on quality and decreased our product lines and number of models to
achieve better margins.
We continue our own brand business on a back-to-back basis and expect it to be responsible for a good share of
our total revenues. This will allow us to benefit from its higher profitability, but we try not to carry any other related
risks, such as inventory obsolescence.
Directions of further development
Our strategy is to grow our business and increase profitability by improving our operational efficiency in the
distribution of IT products within all of the regions we operate in, upgrading our product portfolio and increasing
sales of our private label products.
34
We intend to achieve this by:
a) increasing or retaining sales and market share in countries of Central and Eastern Europe, some
particular markets of Former Soviet Union, Western Europe and the Middle East and Africa and
taking advantage of the weaknesses of the competition
b) benefiting from increased Apple business, keep enhancing the IT component business, adding
more third-party products to our portfolio, and improving the gross profit margin
c) further optimizing our private label business
d) further developing of the VAD business
e) decreasing cost of financing
f) engaging in alternative investments and new technologies
g) controlling our cost structure, enhancing operating efficiency and automated processes, including
our online sales channels
h) continuing our successful foreign exchange hedging and other risk management activities
a) Increasing or retaining sales and market share in countries of Central and Eastern Europe, some
particular markets of Former Soviet Union and the Middle East and Africa and taking advantage of
the weaknesses of the competition
In 2022, despite the ongoing full-scale war in Ukraine, suspended operations in Russia, and limited activity in
Belarus, ASBIS was able to compensate, to a large extent, lost revenues from other markets and in particular:
Kazakhstan, Armenia, Azerbaijan, Uzbekistan and Georgia but also through the restoration of its business in
Ukraine. We have built very solid foundations which allow us to adapt to the current market situation and generate
high revenues. We look into 2023 with confidence and optimism. We have many areas of growth; we are investing
further in the development of new product segments such as the robotics and in new markets such as Central Asia
and Africa.
b) Benefiting from increased Apple business, keep enhancing the IT component business, adding more
third-party products to our portfolio, and improving gross profit margin.
For 2023, we plan to retain our strong market position and strengthen our relationship with customers and suppliers,
following the most challenging but successful year. The Company will focus on the acquisition and servicing of large
business projects. The success of the last three years with Data Centers and other projects is expected to be
replicated, despite losing out the Russian business. We remain focused in all other markets.
For 2023 we expect significant growth in the smartphone segment, both new and used following the dynamic
development of Breezy - the largest Trade-In provider in the countries of its operations.
According to independent analysts worldwide IT spending is projected to total $4.5 trillion in 2023, an increase of
2.4% from 2022. While inflation continues to erode consumer purchasing power and drive device spending down,
overall enterprise IT spending is expected to remain strong.
The software and IT services segments are projected to grow in 2023 by 9.3% and 5.5% in 2023, respectively. The
devices segment is forecast to decline by 5.1% this year as both consumers and enterprises lengthen device refresh
cycles.
35
The traditional IT components segment is characterized by high volumes and low gross profit margins. The
component business is the backbone of our company and the Company expects that they will remain low in the
foreseeable future.
To increase gross margins, the Company has dynamically developed its own brand business as this allows for
higher gross profit margins. In 2022 we have added to our portfolio a new own brand namely “Cron Robotics”
operating under a new business division - AROS - ASBIS Robotic Solutions. The Company is also constantly
investing in the VAD business which delivers higher gross profit margins
c) Further optimizing of Private Labels
Our private label (branded) product lines, Canyon, Prestigio, Prestigio Solutions, Perenio, Aeno, Lorgar and Cron
Robotics are manufactured by leading Original Equipment Manufacturers (“OEM”) in the Far East (China), often
based on designs developed by us, selected on the basis of their quality and potential for achieving high-profit
margins in our markets. We market and sell these products under our own brands, successfully competing with
products of comparable quality marketed under international brands.
We believe that keeping a share of private label business in our total revenues at healthy levels will have a positive
impact on the overall profitability, as these products deliver a higher profit margin, compared to international
suppliers' products distributed by us. We will increase such sales though only to the extent this comes with high
gross and net margins and healthy cash flow.
We aim to continue expanding the range of our private label products and strengthening their promotion in our
markets and we expect that this will have a positive impact on our profitability.
d) Further developing of the VAD business
Development of Value-Added-Distribution (VAD) solutions is a key priority of the Group. Following the changes in
the market trends and the significant increase in storage as well as other commercial services leave no room but to
ensure that we are re-enforcing our presence in this segment.
e) Decreasing cost of financing
The distribution business entails a higher need for cash available to support growth. The Group has managed to
raise cash from various financial institutions, however, in certain cases, the cost of this financing is expensive.
The Company has already negotiated improved terms with some of its financiers and is currently undertaking certain
extra steps to further lower its cost of financing. Base rates (US Libor, Euribor, other local base rates) have recently
shown a significant uptrend and this has increased the Company’s WACD.
The weighted average cost of debt (WACD) has increased to 10.5% in 2022, as compared to 6% in 2021.
f) Engaging in alternative investments and new technologies
In the last two years ASBIS has made strategic investments, investing in companies from the biotechnology sector,
operating in a growing market and at an early stage of development like: EMBIO Diagnostics Ltd, Promed Bioscience
Ltd and RSL Revolutionary Labs Ltd.
Scientific innovation is the path to a healthier society and ASBIS has innovation in its DNA. So, we have decided to
invest in companies that can play an important role in our life and can bring real value to our lives and improve its
quality.
Given the applicability of innovative products of the above-mentioned companies, in both professional (B2B) and
individual (B2C) settings, we see these investments representing new streams of growth for ASBIS.
36
g) Controlling our cost structure, enhancing operating efficiency and automated processes, including
online sales channels.
We continue to focus on improving our operating efficiency and enhancing our automated processes, with a view to
reducing operating expenses and increasing our profit margins.
In 2022, SG&A expenses grew by 7% YoY mainly due to higher gross profit and investments made in human capital
in all regions of our operations but scaled well compared to increase in gross and net profitability.
The cost structure will continue to be under strict control in the coming years.
h) Continuing our successful foreign exchange hedging and other risk management activities
In 2022 our FX hedging strategy has successfully shielded our results. However, since there is no such thing as
perfect hedging, the currency environment needs to be closely monitored and FX hedging strategies updated as
soon as new developments are visible in the markets.
Managing also credit risk and transactional risk is also part of our success path. In the transactional risk we also
include the ability of the Group to properly manage its compliance in all rules and regulations imposed by the relevant
authorities in sanctioned territories.
Real property and other tangible assets
The table below presents our main real properties:
Area (m
2
)
Name of company
Country
Land
Office
Warehouse
Total
ASBISc Enterprises Plc
Cyprus
10,520
10,130
1,429
22,079
Asbis CZ, spol s.r.o.
Czech Republic
5,000
622
1,220
6,842
Asbis Ukraine Limited
Ukraine
-
2,660
334
2,994
ASBC Ltd
Belarus
-
1,056
-
1,056
Asbis SK sp.l. sr.o.
Slovakia
10,397
2,276
4,622
17,295
Asbis Middle East FZE
United Arab Emirates
-
952
3,294
4,246
CJSC ASBIS (Asbis BY)
Belarus
-
1,205
1,030
2,235
ASBIS Bulgaria Ltd
Bulgaria
3,855
-
-
3,855
TOTAL 60,602
Our remaining premises are under lease.
Information regarding real property owned by us and relevant encumbrances are provided in the annual consolidated
audited financial statements included elsewhere in this report. Other than this real property, we do not hold any
other significant tangible assets.
Intellectual Property
We have registered (or registration is pending) the following trademarks, including their word and graphical
representations in color and design.
a. ASBIS
b. "CANYON", CANYON LED
c. "PRESTIGIO", "PRESTIGIO SOLUTIONS" and its product group trademarks, which include Nobile,
Cavaliere, Signore, Visconte, Emporio, Prestigio Multi-Pad and Prestigio Grace
d. “PrestigioPlaza
e. Lorgar
37
f. Perenio, Perenio Ionic Shield, Perenio Smart Health, Perenio Making Life Easy
g. Aeno
h. TopDevice
i. iSpace
j. iON
k. iSupport
l. BREEZY
m. MacSolutions
n. Joule, and
o. ACEAN
Most of these trademarks are registered and protected in the countries in which we operate, both under international,
regional, and national registration schemes and systems, to the extent and other terms set forth in the provisions
based on which they were registered. The registrations are mostly in the international class of goods 09 (computers
and IT products), and related classes of services 35, 37 (sales, distribution, repair).
In addition, we have registered a number of domain names for ASBIS, E.M. Euromall, Canyon, Perenio, Prestigio,
Breezy, Acean and other private labels.
Insurance
We hold two different types of insurance: products or “cargo” insurance and credit insurance.
Products insurance. We have a products insurance policy with M.N. Leons B.V. We assume the risks of products
we receive from our suppliers only upon transfer of legal title, and thereafter.
Under our product insurance policy, covering twelve months and ending 1 January 2022 with tacit renewal thereafter
our products are insured for a maximum of U.S. $ 4,000 from any single shipment of computers, monitors and
supplies of accessories transported from country to country or warehouse to warehouse. Typical shipment values
for each warehouse are as follows: Czech Republic: U.S. $ 120 and the Middle East: U.S. $ 140.
Furthermore, goods held in storage at both distribution centers (i.e., both the Czech Republic and Middle East)
and certain local warehouses are insured up to US 10,000.
The aforementioned insurance coverage approximates the typical value of stock held in each warehouse.
Credit Insurance: We have a major credit insurance policy in place with Atradius Credit Insurance N.V. reducing
our exposure in respect to possible non-recoverability of our receivables. The insurers have agreed to indemnify us
for losses due to bad debts in respect of goods delivered and services performed during the policy period, which
covers a term of twelve months, subject to annual renewal. We insured about 75% of our 2022 revenues.
The major insurance policy is held with Atradius Credit Insurance N.V. which was signed in April 2008 and is renewed
every year. It covers Asbisc Enterprises PLC, Asbis Middle East FZE, Asbis D.o.o. (Slovenia), Asbis Doo (Serbia),
ASBIS Romania, ASBIS Bulgaria, E.M Euromall, ASBIS Poland, ASBIS CZ Republic, ASBIS Kazakhstan and
ASBIS Hungary. Each buyer, primarily our large customers, who have an approved credit limit is insured for a
coverage amounting to 85%. Atradius also offers us a discretionary credit limit up to a maximum of U.S. $ 60.
We also hold stand-alone credit insurance policies with Atradius in Slovakia covering the receivables of the country.
We use both Coface SA and Euler Hermes in cases where Atradius in not granting limits.
38
ITEM 3. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following Management's discussion and analysis of our financial position and results of operations review our
historical financial results as at, and for the years ended, 31 December 2022 and 2021. The reader shall read the
following discussion in conjunction with our audited financial statements as at 31 December 2022 and 2021,
including the accompanying notes thereto, which are included elsewhere in this Annual Report, and have been
prepared in accordance with IFRS and audited by KPMG Limited, our independent auditors and in conjunction with
the information set forth under "Risk Factors" and "Information on the Company".
Unless we indicate otherwise, references to U.S. $, PLN and € are in thousands except for share and per share
data.
Summary
The principal events of 2022 were as follows:
• Revenues in 2022 decreased by only 12.60% to U.S. $ 2,690,039 from U.S. $ 3,077,976 in 2021.
• Gross profit in 2022 increased by 4.26% to U.S. $ 227,831 from U.S. $ 218,528 in 2021.
• Gross profit margin in 2022 much improved to 8.47% from 7.10% in 2021.
• Selling expenses in 2022 increased by 11.13% to U.S. $ 69,217 from U.S. $ 62,286 in 2021.
• Administrative expenses in 2022 grew by 12.07% to U.S. $ 47,620 from U.S. $ 42,493 in 2021. These expenses
include costs for the support of Ukraine.
• EBITDA in 2022 was positive and reached U.S. $ 116,751 in comparison to U.S. $ 118,823 in 2021.
• The net profit after tax in 2022 amounted to U.S. $ 75,870 and was almost the same as the highest ever in 2021.
We consider this as an incredible achievement which proves that the Company is well prepared to weather any
difficulties and able to quickly adapt to the new realities.
Principal Factors Affecting Financial Condition and Results of Operations
In 2022, the Company’s results of operations have been affected and are expected to continue to be affected by a
number of factors.
Below we present all factors that have affected and continue to affect our business:
War between Russia and Ukraine and sanctions imposed on Russia and Belarus
The war between Russia and Ukraine (the two major markets for ASBIS before the war) is a key factor which has
affected our results. Despite the large geographical presence of the Group, it would not be possible to totally weather
the impact of this war. The Company proven to be well prepared to defend its position considering the sanctions
imposed on Russia and Belarus; however, the Company considers the situation as critical and difficult to judge as
to how it will evolve. We are strictly abiding with all sanctions that the EU imposed, and we are making the utmost
to support our Ukrainian colleagues and operations.
39
Spreading of the Covid-19 virus in the markets we operate
The COVID-19 pandemic has had, and continues to have, a significant impact around the world. The shutdowns of
the economies are no longer options, however Chinese covid lockdowns have disrupted supply chains and made
consumers much concerned about the overall situation.
The Company closely monitors the evolution of this virus and has already undertaken certain measures to weather
the situation. Despite that the pandemic has not adversely affected our results so far, we are ready to take more
actions following any developments over this situation.
The in-country financial conditions affecting our major markets, gross profit and gross profit margin
Throughout the years of operation, the Company has from time to time suffered from specific in-country problems,
emanating from the deterioration of specific countries’ financial situation, due to a number of issues including but
not limited to political instability. We need to monitor any developments, react fast and weather every risk showing
up in a specific market to secure our results.
The Company needs to keep in mind that different in-country problems might arise at any time and affect our
operations. Even though we have improved our procedures, we cannot be certain that all risks are mitigated.
Currency fluctuations
The Company’s reporting currency is the U.S. dollar. In 2022 a good portion of our revenues was denominated in
U.S. dollars, while the balance is denominated in Euro, Ruble, UAH, KZT and other currencies, certain of which are
linked to the Euro. Our trade payable balances are principally (about 85%) denominated in U.S. dollars. In addition,
approximately half of our operating expenses are denominated in U.S. dollars and the other half in Euro or other
currencies, certain of which are linked to the Euro.
As a result, reported results are affected by movements in exchange rates, particularly in the exchange rate of the
U.S. dollar against the Euro and other currencies of the countries in which we operate, including the Russian Ruble,
the Ukrainian Hryvnia, the Czech Koruna, the Polish Zloty, the Croatian Kuna, the Kazakhstani Tenge and the
Hungarian Forint.
In particular, a strengthening of the U.S. dollar against the Euro and other currencies of the countries in which we
operate may result in a decrease in revenues and gross profit, as reported in U.S. dollars, and foreign exchange
loss relating to trade receivables and payables, which would have a negative impact on our operating and net profit
despite a positive impact on our operating expenses.
On the other hand, a devaluation of the U.S. dollar against the Euro and other currencies of the countries in which
we operate may have a positive impact on our revenues and gross profit, as reported in U.S. dollars, which would
have a positive impact on operating and net profit despite a negative impact on our operating expenses. In addition,
foreign exchange fluctuation between the U.S. dollar and the Euro or other currencies of the countries in which we
operate may result in translation gains or losses affecting foreign exchange reserves.
Furthermore, a major devaluation or depreciation of any such currencies may result in a disruption in the
international currency markets and may limit the ability to transfer or to convert such currencies into U.S. dollars and
other currencies.
Despite all efforts of the Company, there can be no assurance that fluctuations in the exchange rates of the Euro
and/or other currencies of the countries in which we operate against the U.S. dollar will not have a material adverse
effect on our business, financial condition and results of operations. Therefore, careful observation of the current
environment remains a crucial factor for our success.
Competition and price pressure
The IT distribution industry is a highly competitive market, particularly with regards to products selection and quality,
inventory, price, customer services and credit availability and hence is open to margin pressure from competitors
and new entrants.
40
The Company competes at the international level with a wide variety of distributors of varying sizes, covering
different product categories and geographic markets. In particular, in each of the markets in which the Company
operates it faces competition from:
1. International IT and CE distributors with presence in all major markets we operate
2. Regional IT and CE distributors who cover mostly a region but are quite strong
3. Local distributors who focus mostly on a single market but are very strong
4. International IT and mobile phones brokers, who sell opportunistically in any region and/or country
Competition and price pressures from market competitors and new market entrants may lead to significant
reductions in the Company’s sales prices.
Such pressures may also lead to a loss of market share in certain of the Group's markets. Price pressures can have
a material adverse effect on the Company’s profit margins and its overall profitability, especially in view of the fact
that its gross profit margins, like those of most of its competitors, are low and sensitive to sales price fluctuations.
Gross profit margins sustainability
The Company’s business is comprised of both a traditional distribution of third-party products and own brands. This
allows the Company to deliver healthier gross profit margins when conditions are favorable.
In the traditional distribution business, the Company’s gross profit margins, like those of other distributors of IT
products, are low and the Company expects that in the distribution arm of its business they will remain low in the
foreseeable future.
Increased competition arising from industry consolidation and low demand for certain IT products may hinder the
Company’s ability to maintain or improve its gross margins. A portion of the Company’s operating expenses is
relatively fixed, and planned expenditures are based in part on anticipated orders that are forecasted with limited
visibility of future demand.
As a result, the Company may not be able to reduce its operating expenses as a percentage of revenue to mitigate
any reductions in gross margins in the future.
To increase gross margins, the Company has dynamically developed its own brand business as this allows for
higher gross profit margins. In 2022 we have added to our portfolio a new own brand namely “CRON Robotics”
operating under a new business division - AROS - ASBIS Robotic Solutions. The Company is also constantly
investing in the VAD business which delivers higher gross profit margins.
Inventory obsolescence and price erosion
The Company is often required to buy components and finished products according to forecasted requirements and
orders of its customers and in anticipation of market demand. The market for IT finished products and components
is characterized by rapid changes in technology and short product shelf life, and, consequently, inventory may
rapidly become obsolete. Due to the fast pace of technological changes, the industry may sometimes face a
shortage or, at other times, an oversupply of IT products.
As the Company increases the scope of its business and of inventory management for its customers, there is an
increasing need to hold inventory to serve as a buffer in anticipation of the actual needs of the Company’s customers.
This increases the risk of inventory becoming devalued or obsolete and could affect the Company’s profits either
because prices for obsolete products tend to decline quickly, or because of the need to make provisions or even
write-offs.
In an oversupply situation, other distributors may elect to proceed with price reductions to dispose of their existing
inventories, forcing the Company to lower its prices to stay competitive. The Company’s ability to manage its
inventory and protect its business against price erosion is critical to its success.
Several of the Company’s most significant contracts with its major suppliers contain advantageous contract terms
that protect the Company against exposure to price fluctuations, defective products and stock obsolescence.
41
Credit risk
The Company buys components and finished products from its suppliers on its own account and resells them to its
customers. The Company extends credit to some of its customers at terms ranging from 7 to 90 days or, in a few
cases, to 120 days.
The Company’s payment obligations towards its suppliers under such agreements are separate and distinct from its
customers' obligations to pay for their purchases, except in limited cases where the Company’s arrangements with
its suppliers require the Company to resell to certain resellers or distributors. Thus, the Company is liable to pay its
suppliers regardless of whether its customers pay for their respective purchases.
As the Company’s profit margin is relatively low compared to the total price of the products sold, in the event where
the Company is not able to recover payments from its customers, it is exposed to financial liquidity risk. The
Company has in place credit insurance which covers such an eventuality for the majority of its revenue.
Despite all efforts to secure our revenues, certain countries remained non-insured (Ukraine), therefore it is very
important for us to ensure that we find other sources of securities which help us minimize our credit risk. The Board
of Directors decided to enhance the Company’s risk management procedures.
These do not guarantee that all issues will be avoided, however, they have granted the Company with confidence
that is in a position to weather any possible major credit issue that may arise.
Worldwide financial environment
The overall financial environment and the economic landscape of each country we operate in, always play a
significant role in our performance. The revised strategy and adaptation to the new environment, i.e., by rebuilding
our product portfolio, has paid off in terms of profitability and sales in the last three years.
However, there are many uncertainties about the world economy following the war in Ukraine, the volatility of
currencies and the fragility of demand in many markets. Additionally, from time to time, unpredictable situations may
happen in selected markets.
We believe that the Company is much more flexible and better prepared to weather any obstacles that may arise
due to the worldwide financial environment, however we can see that a full-scale war between these two countries
brings unprecedented consequences.
In addition to the above, recently it has been noticed that multiple raw materials and finished product prices have
risen dramatically, and this might significantly impact demand generation. This must be closely monitored, and the
Company is alerted to manage any market anomalies.
Seasonality
Traditionally the IT distribution industry in which the Company operates experiences high demand during the months
prior to and leading up to the Christmas and New Year holiday period. In particular, IT distributors’ demand tends to
increase in the period starting from September till the end of the year.
Development of own brand business
The Company’s strategy is to focus more on profitability than on revenues, thus we continue to develop the own-
brand business that allows for higher gross profit margins.
This includes the development of tablets and other product lines that are sold under Prestigio and Canyon brands
in all regions of the Company’s operations. The Company has also invested in another own brand, Perenio - which
includes sales of smart-home, smart-security sensors and other products. The results from Perenio brand were not
the ones we expected to see; thus, we currently undertake certain corrective actions.
At the end of 2021, the Company launched two new own brands: Lorgar - a brand of ultimate accessories for gamers
and Aeno - a brand of smart home appliances.
42
In 2022, the Company has launched a new own brand “Cron Robotics” operating under a new business division –
AROS - ASBIS Robotic Solutions. The core business of this division is based on two major segments – the
distribution of collaborative robots (cobots) from leading global brands in the sector as well as own robotic platforms
under own brand.
In order to keep quality under control and achieve the maximum possible gross profit margins, the Company’s
Directors have decided to operate under a “back-to-back scheme”. This implies that orders are placed with ODMs,
only if they are in advance confirmed by customers.
The Company is undertaking a number of quality control measures to mitigate this risk but given the volumes and a
large number of factories used to produce these products, these controls might not be sufficient. Moreover,
competition has already been intensified and the Company may not be able to sustain its profitability levels.
Despite the Company’s efforts, there can be no assurance of a similar development pace in the own-brand business
in future periods. This is because there may be a significant change in market trends, customer preferences or
technology changes that may affect the development of own-brand business and, therefore, its results.
The high cost of debt
The distribution business entails a higher need for cash available to support growth. The Group has managed to
raise cash from various financial institutions, however, in certain cases, the cost of this financing is expensive.
The Company has already negotiated improved terms with some of its financiers and is currently undertaking certain
extra steps to further lower its cost of financing. Base rates (US Libor, Euribor, other local base rates) have recently
shown a significant uptrend and this has increased the Company’s WACD.
Environmental and Climate Changes
In terms of transition risks that arise from the transition to a low-carbon and climate-resilient economy, we may face
the following risks: policy and legal risks (there may be laws or policies put in place that may require a more
environmentally cautious approach to raw materials and land use), technology risks (changes in technology used to
produce IT equipment) – these both may lead to growing prices in terms of IT equipment and solutions.
We may also face market risk with consumers switching to more energy-efficient appliances or making more savvy
purchases to limit their own impact on the environment. We will monitor these trends and introduce the latest
hardware for our customers.
We may also face reputational risks with difficulties in attracting customers, business partners and employees if we
do not take strong enough actions against climate changes. In terms of physical risks resulting from climate changes,
we may face both acute and chronic risks.
Acute physical risks may arise from weather-related events in the form of floods, fires or droughts that may damage
factories in certain regions, cause factories to limit or temporarily stop their production or disrupt our supply chain in
other ways.
These may result in temporary limitations in our product offering or rising prices of hardware and components.
Chronic physical risks i.e., risks that may result from long-term changes in the climate, may also affect ASBIS.
Growing temperatures worldwide may cause a need for more temperature-resilient hardware and appliances and
may also result in more hardware malfunctions that may increase warranty claims.
43
Financial position and results of operations / in U.S.$ thousand/
Year ended December 31, 2022, compared to year ended December 31, 2021
Revenues: Revenues in 2022 decreased by only 12.60% to U.S. $ 2,690,039 from U.S. $ 3,077,976 in 2021, mainly
due to the full-scale war in Ukraine, and by far lower sales in all three countries involved. This also destabilized the
CEE region and negatively affected our business in countries involved in the war as well as nearby countries.
Despite the war in Ukraine, suspended operations in Russia, and limited activity in Belarus, ASBIS was able to
compensate, to a large extent, lost revenues from other markets and in particular: Kazakhstan, Armenia, Azerbaijan,
Uzbekistan and Georgia but also through the restoration of its business in Ukraine.
The table below sets a breakdown of revenues, by product lines, for the years ended 31 December 2022 and 2021:
2022 2021
U.S. $ thousand % of total revenues
U.S. $ thousand
% of total
revenues
Smartphones 949,226 35.29% 895,664 29.10%
PC mobile (laptops) 253,519 9.42% 305,333 9.92%
Central processing units
(CPUs)
248,903 9.25% 441,968 14.36%
Peripherals 140,754 5.23% 148,669 4.83%
Audio devices 117,158 4.36% 137,456 4.47%
Servers & server blocks 113,673 4.23% 119,608 3.89%
Hard disk drives (HDDs) 87,498 3.25% 149,644 4.86%
Smart devices 80,244 2.98% 72,735 2.36%
Networking products PC
desktop
71,646 2.66% 71,308 2.32%
Solid-state drives (SSDs) 71,166 2.65% 136,080 4.42%
Display products 67,957 2.53% 60,607 1.97%
Software 65,115 2.42% 69,331 2.25%
Multimedia 57,972 2.16% 58,204 1.89%
PC desktop 54,516 2.03% 76,589 2.49%
Tablets 48,422 1.80% 59,266 1.93%
Memory modules (RAM) 46,415 1.73% 63,578 2.07%
Accessories 36,704 1.36% 36,190 1.18%
Other 179,150 6.66% 175,745 5.71%
Total revenue 2,690,039 100% 3,077,976 100%
Starting from the 24th of February 2022, revenues have been under a serious pressure caused by the invasion of
Russia in Ukraine that affected sales in a number of countries across our operations. Covid lockdowns in China and
reduced spending due to economic slowdown have also negatively affected sales. As a result, in 2022 revenues
from all main product lines (except from smartphones) decreased as compared to 2021.
44
The chart below indicates the trends in sales per product line:
In 2022 the main drivers in terms of revenues were smartphones, laptops and CPUs.
On a year-on-year basis revenues from CPUs decreased by 43.7% in 2022. Sales of HDDs decreased by 41.5% in
2022. In 2022 revenues from software decreased by 6.1%. Laptop business decreased by 17.0% in 2022. Revenues
from SSDs decreased by 47.7% in 2022. PC desktop business declined by 28.8% in 2022. The tablet segment
recorded a decline by 18.3% in 2022.
From” Other” product lines, in 2022 a positive trend has been noticed in smart devices (+10.3%) and display products
(+12.1%).
As regards our own brands, the Company’s intention is to continue developing its seven own brand sales to the
extent they bring targeted gross margin and deliver healthy cash flow.
The chart below indicates the trends in smartphones sales:
45
Sales of smartphones, which contribute the majority of our revenues, increased by 6.0% in 2022, as compared to
the ones in 2021 as a result of higher demand and a different mix of iPhones, including the latest iPhone 14 series.
The table below presents a geographical breakdown of sales for the years ended 31 December 2022 and
2021:
2022 2021
U.S. $
thousand
% of total
revenues
U.S. $
thousand
% of total
revenues
Former Soviet Union 1,407,196 52.31% 1,774,834 57.66%
Central and Eastern
Europe
653,643 24.30% 654,117 21.25%
Middle East and Africa 407,717 15.16% 327,799 10.65%
Western Europe 183,088 6.81% 266,607 8.66%
Other 38,395 1.43% 54,619 1.77%
Total 2,690,039 100% 3,077,976 100%
The table below presents a country-by-country breakdown of sales for our most important markets for the
years ended 31 December 2022 and 2021:
2022
2021
Country Sales in U.S.
$ thousands
% of total
revenues
Country Sales in U.S.
$ thousands
% of total
revenues
1.
Kazakhstan 584,849
21.74% Russia
575,615
18.70%
2.
Ukraine 326,143
12.12% Ukraine
475,303
15.44%
3.
United Arab
Emirates
312,705
11.62% Kazakhstan
383,141
12.45%
4.
Slovakia 239,905
8.92%
United Arab
Emirates
219,940
7.15%
5.
Russia 134,520
5.00% Slovakia
197,708
6.42%
6.
Czech Republic 97,583
3.63% Belarus
190,028
6.17%
7.
Azerbaijan 91,414
3.40% Czech Republic
107,577
3.50%
8.
Poland 85,780
3.19% The Netherlands
78,746
2.56%
9.
Georgia 80,942
3.01% Poland
77,981
2.53%
10.
Germany 79,540
2.96% Romania
64,067
2.08%
46
Gross Profit: Gross profit in 2022 increased by 4.26% to U.S. $ 227,831 from U.S. $ 218,528 in 2021.
Gross profit margin (gross profit as a percentage of revenues): Gross profit margin in 2022 much improved to
8.47% from 7.10% in 2021. This was a result of products shortage and the continuation of the current Company’s
strategy to mostly focus on high margin products and IT solutions.
47
Selling Expenses: largely comprise of salaries and benefits paid to sales employees (sales, marketing, and logistics
departments), marketing and advertising fees, commissions, and travelling expenses. Selling expenses usually grow
together (but not in-line) with growing sales and, most importantly, gross profit.
Selling expenses in 2022 increased by 11.13% to U.S. $ 69,217 from U.S. $ 62,286 in 2021.
Administrative Expenses: largely comprise of salaries and wages of administrative personnel.
Administrative expenses in 2022 increased by 12.07% to U.S. $ 47,620 from U.S. $ 42,493 in 2021.
EBITDA: EBITDA in 2022 was positive and amounted to U.S. $ 116,751 in comparison to U.S. $ 118,823 in 2021.
Profit After Taxation: The net profit after tax in 2022 is considered to be excellent given the full-scale war in Ukraine,
high inflation, uncertain geopolitical situation and the fact that the net profit after tax in 2021 was the highest ever in
the Company’s history. The Company has proved once again its operational readiness to face the difficulties and
changing geopolitical situation.
Liquidity and Capital Resources
The Company has in the past funded its liquidity requirements, including ongoing operating expenses and capital
expenditures and investments, for the most part, through operating cash flows, debt financing and equity financing.
Cash flow for 2022 has been negatively impacted by increased working capital utilization (mainly due to increased
inventories). Nevertheless, the management team has managed to turn
h full ear cash from operations positive.
48
The following table presents a summary of cash flows for the twelve months ended December 31
st
, 2022, and 2021
(in U.S. $ thousand):
Twelve months ended December 31
st
2022 2021
Net cash (outflows)/inflows from operating
activities
(56,048) 41,367
Net cash outflows from investing activities (11,075) (15,029)
Net cash inflows from financing activities 8,555 10,899
Net (decrease)/increase in cash and cash
equivalents
(58,568) 37,237
Net cash outflows from operations
Net cash outflows from operations amounted to U.S. $ 56,048 for the twelve months of 2022, compared to inflows
of U.S. $ 41,367 in the corresponding period of 2021.
Net cash outflows from investing activities
Net cash outflows from investing activities were U.S. $ 11,075 for the twelve months of 2022, compared to outflows
of U.S. $ 15,029 in the corresponding period of 2021.
Net cash inflows from financing activities
Net cash inflows from financing activities were U.S. $ 8,555 for the twelve months of 2022, compared to inflows of
U.S. $ 10,899 in the corresponding period of 2021.
Net decrease in cash and cash equivalents
As a result of the increase in working capital utilization (mainly due to increased inventories) in 2022, cash and cash
equivalents reached U.S. $ 92,352, as compared to U.S. $ 150,920 at the end of 2021.
Capital Resources
The Company’s management believe that the Company has ample resources to finance its operations, as described
in the audited financial statements attached to this annual report, going forward.
As at 31 December 2022, we had a total short-term and long-term debt (excluding amounts due to factoring creditors
and lease liabilities) of U.S. $ 141,169 (including U.S. $ 553 of current maturities due within one year from 31st,
December 2022), compared to U.S. $ 103,947 (including U.S. $ 123 of current maturities, as at 31 December 2021).
49
The table below presents our principal debt facilities as at 31 December 2022:
Entity Creditor Type of, facilities
Credit
limit
Currency Rate
US$
Equivalent
Valid from
Valid till
ASBIS Middle East
FZE
NATIONAL BANK
OF FUJAIRAH
Short Term
Loan/Revolving Loan
27 000 000 AED 3,67 7 346 938,78 01/06/2022 non term
ASBIS Middle East
FZE
EMIRATES
ISLAMIC BANK
PJSC
Short Term
Loan/Revolving Loan
18 000 000 AED 3,67 4 897 959,18 25/10/2022 non term
ASBIS Middle East
FZE
NATIONAL BANK
OF
FUJAIRAH
Factoring with recourse 3 000 000 AED 3,67 816 326,53 01/06/2022 non term
ASBIS Middle East
FZE
NATIONAL BANK
OF FUJAIRAH
Factoring with recourse 8 000 000 AED 3,67 2 176 870,75 01/06/2022 non term
ASBIS Middle East
FZE
EMIRATES
ISLAMIC BANK
PJSC
Factoring with recourse 7 000 000 AED 3,67 1 904 761,9 25/10/2022 non term
ASBC MMC, AZ
Az119 APR
AlmaSore
-
> iSpace
KAPITAL BANK Short Term
Loan/Revolving Loan
200 000 AZN 1,7 117 647,06 07/06/2021 07/06/2023
ASBC MMC, AZ
Az119 APR
AlmaSore
-
> iSpace
KAPITAL BANK Short Term
Loan/Revolving Loan
200 000 AZN 1,7 117 647,06 01/07/2022 31/07/2023
ASBC MMC, AZ
Az119 APR
AlmaSore
-
> iSpace
PASHA BANK Short Term
Loan/Revolving Loan
600 000 AZN 1,7 352 941,18 20/09/2022 20/05/2023
ASBIS d.o.o. (BA) RAIFFEISEN BANK
D.D. BOSNA I
HERCEGOVINA
BGs/SBLCs 300 000 KM 1,83 163 603,2 17/01/2020 30/06/2027
ASBIS d.o.o. (BA) ASA BANKA D.D.
SARAJEVO
BGs/SBLCs 300 000 KM 1,83 163 603,2 20/06/2019 31/12/2027
ASBIS d.o.o. (BA) ASA BANKA
NASA I SNAZNA
D.D. SARAJEVO
BGs/SBLCs 150 000 KM 1,83 81 801,6 03/02/2022 13/01/2023
ASBIS d.o.o. (BA) UNICREDIT BANK BGs/SBLCs 300 000 KM 1,83 163 603,2 01/09/2022 09/08/2024
ASBIS d.o.o. (BA) ASA BANKA D.D.
SARAJEVO
Long Term Loan 656 524 KM 1,83 358 031,96 26/12/2022 31/12/2027
ASBIS d.o.o. (BA) ASA BANKA D.D.
SARAJEVO
Short Term
Loan/Revolving Loan
500 000 KM 1,83 272 671,99 10/12/2020 31/12/2027
ASBIS d.o.o. (BA) ASA BANKA D.D.
SARAJEVO
Short Term
Loan/Revolving Loan
1 000 000 KM 1,83 545 343,99 21/04/2021 31/12/2027
ASBIS d.o.o. (BA) RAIFFEISEN BANK
D.D. BOSNA I
HERCEGOVINA
Short Term
Loan/Revolving Loan
1 500 000 KM 1,83 818 015,98 01/01/2022 31/12/2024
ASBIS d.o.o. (BA) ASA BANKA D.D.
SARAJEVO
Short Term
Loan/Revolving Loan
1 000 000
KM 1,83 545 343,99 26/08/2022 31/12/2027
ASBIS d.o.o. (BA) UNICREDIT BANK Short Term
Loan/Revolving Loan
1 300 000 KM 1,83 708 947,19 01/09/2022 09/08/2024
ASBIS d.o.o. (BA) RAIFFEISEN BANK
D.D. BOSNA I
HERCEGOVINA
Overdraft 300 000 KM 1,83 163 603,2 17/01/2020 31/12/2024
ASBIS d.o.o. (BA) UNICREDIT BANK Overdraft 400 000 KM 1,83 218 137,6 01/09/2022 09/08/2024
ASBIS BULGARIA
EOOD
UNICREDIT
BULBANK AD
Overdraft 5 500 000 BGN 1,83 2 999 383,76 01/10/2022 29/09/2023
ASBIS BULGARIA
EOOD
UNICREDIT
BULBANK AD
Factoring with recourse 300 000 BGN 1,83 163 602,75 01/09/2022 31/08/2023
ASBIS BULGARIA
EOOD
UNICREDIT
BULBANK AD
Factoring with recourse 2 500 000 BGN 1,83 1 363 356,26 29/09/2022 29/09/2023
ASBIS BULGARIA
EOOD
UNITED
BULGARIAN BANK
(UBB)
Factoring with recourse 1 700 000 BGN 1,83 927 082,25 30/11/2022 31/08/2023
ASBIS Belarus CJSC VTB BANK
(BELARUS)
Short Term
Loan/Revolving Loan
2 170 000 BYN 2,73 793 012,72 06/08/2021 05/08/2024
ASBIS Belarus CJSC VTB BANK
(BELARUS)
Short Term
Loan/Revolving Loan
8 680 000 BYN 2,73 3 172 050,87 06/08/2021 05/08/2024
ASBIS Belarus BANK BELVEB
OJSC
Short Term
Loan/Revolving Loan
12 600 000
BYN 2,73 4 604 589,97 25/10/2021 24/10/2024
ASBIS Belarus BANK DABRABYT
JSC
Short Term
Loan/Revolving Loan
3 500 000 BYN 2,73 1 279 052,77 01/04/2022 16/01/2023
ASBIS Belarus BANK DABRABYT
JSC
Short Term
Loan/Revolving Loan
3 517 914 USD 1 3 517 914,07 01/04/2022 16/01/2023
ASBIS Belarus BANK BELVEB
OJSC
Short Term
Loan/Revolving Loan
4 000 000 BYN 2,73 1 461 774,59 14/11/2022 24/10/2024
ASBIS Belarus BANK DABRABYT
JSC
Overdraft 2 700 000 BYN 2,73 986 697,85 02/02/2022 01/02/2023
ASBIS Belarus PRIORBANK Factoring with recourse
3 000 000
BYN 2,73 1 096 330,95 07/12/2020 19/09/2023
ASBIS Belarus BANK DABRABYT
JSC
Factoring with recourse 3 300 000 BYN 2,73 1 205 964,04 02/02/2022 02/01/2024
50
ASBIS Belarus BANK DABRABYT
JSC
Factoring without
recourse
2 000 000 BYN 2,73 730 887,3 18/11/2022 17/11/2024
ASBC TUE, BY BANK DABRABYT
JSC
Short Term
Loan/Revolving Loan
480 000 BYN 2,73 175 412,95 01/12/2022 28/11/2023
ASBIS KYPROS
LTD
ANCORIA BANK
LTD
Overdraft 100 000 EUR 0,93 106 600 16/01/2017 non term
ASBIS KYPROS
LTD
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
Overdraft 500 000 EUR 0,93 533 000 02/05/2022 01/05/2023
ASBIS KYPROS
LTD
BANK OF CYPRUS
PLC-FACTORING
DIVISION
Factoring with recourse 800 000 EUR 0,93 852 800 19/06/2019 non term
ASBISC Enterprises
PLC
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
BGs/SBLCs 30 000 EUR 0,93 31 980 22/05/2021 21/05/2023
ASBISC Enterprises
PLC
VSEOBECNA
UVEROVA BANKA
A.S (VUB, A.S.)
BGs/SBLCs 1 000 000 USD 1 1 000 000 26/05/2021 25/05/2023
ASBISC Enterprises
PLC
UNICREDIT BANK
CZECH REPUBLIC
AND SLOVAKIA,
A.S.
BGs/SBLCs 391 943 EUR 0,93 417 811,67 31/01/2022 30/01/2023
ASBISC Enterprises
PLC
RAIFFEISEN BANK
INTERNATIONAL
AG
BGs/SBLCs 4 650 000 USD 1 4 650 000 18/03/2022 24/03/2023
ASBISC Enterprises
PLC
BARCLAYS BANK
PL
BGs/SBLCs 5 350 000 USD 1 5 350 000 01/05/2022 non term
ASBISC Enterprises
PLC
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
BGs/SBLCs 22 000 000 USD 1 22 000 000 26/09/2022 25/09/2023
ASBISC Enterprises
PLC
SOCIETE
GENERALE
CYPRUS LIMITED
BGs/SBLCs 5 000 000 USD 1 5 000 000 05/10/2022 04/10/2023
ASBISC Enterprises
PLC
CYPRUS
DEVELOPMENT
BANK PUBLIC
COMPANY
LTD
LCs 125 000 USD 1 125 000 01/01/2022 non term
ASBISC Enterprises
PLC
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
LCs 331 550 USD 1 331 550,86 19/12/2022 08/01/2023
ASBISC Enterprises
PLC
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
Overdraft 10 400 000 USD 1 10 400 000 30/04/2021 29/04/2023
ASBISC Enterprises
PLC
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
Overdraft 500 000 EUR 0,93 533 000 30/04/2021 29/04/2023
ASBISC Enterprises
PLC
CYPRUS
DEVELOPMENT
BANK PUBLIC
COMPANY LTD
Overdraft 5 000 000 EUR 0,93 5 330 000,02 22/06/2021 non term
ASBISC Enterprises
PLC
SOCIETE
GENERALE
CYPRUS LIMITED
Overdraft 1 500 000 USD 1 1 500 000 01/06/2021 non term
ASBISC Enterprises
PLC
VSEOBECNA
UVEROVA BANKA
A.S (VUB, A.S.)
Overdraft 8 000 000 USD 1 8 000 000 08/11/2021 02/01/2023
ASBISC Enterprises
PLC
RAIFFEISEN BANK
INTERNATIONAL
AG
Overdraft 5 350 000 USD 1 5 350 000 21/03/2022 non term
ASBISC Enterprises
PLC
BANK OF CYPRUS
PLC-FACTORING
DIVISION
Factoring with recourse 18 000 000 USD 1 18 000 000 21/07/2021 29/04/2023
ASBISC Enterprises
PLC
ADF PFS Supply Chain
Financing/Reverse
Factoring
15 500 000 USD 1 15 500 000 26/09/2022 non term
ASBISC Enterprises
PLC
MT – FIMBANK PLC
Supply Chain
Financing/Reverse
Factoring
5 000 000 USD 1 5 000 000 16/08/2022 23/02/2023
PRESTIGIO PLAZA
LIMITED
(ACEAN.CY)
BANK OF CYPRUS
PUBLIC COMPANY
LIMITED
Overdraft 50 000 EUR 0,93 53 299,22 30/04/2022 29/04/2023
ASBIS CZ spol s r.o. CESKOSLOVENSKA
OBCHODNI BANKA,
A.S.
BGs/SBLCs 113 361 EUR 0,93 120 875,26 27/01/2022 31/12/2023
ASBIS CZ spol s r.o. CESKOSLOVENSKA
OBCHODNI BANKA,
A.S.
Short Term
Loan/Revolving Loan
140 000 000
CZK 22,61 6 190 307,75 11/06/2021 non term
ASBIS CZ spol s r.o. VSEOBECNA
UVEROVA BANKA,
A.S.
Overdraft 2 000 000 EUR 0,93 2 132 561,02 16/11/2020 non term
ASBIS CZ spol s r.o. CESKOSLOVENSKA
OBCHODNI BANKA,
A.S.
Overdraft 15 000 000 CZK 22,61 663 247,26 01/04/2022 non term
51
ASBC LLC, GE
Ge119
TBC BANK Overdraft 630 000 GEL 2,7 233 160,62 28/10/2021 31/12/2022
ASBISc-CR d.o.o. OTP BANKA
HRVATSKA D.D.
BGs/SBLCs 300 000 HRK 7,06 42 468,65 05/07/2019 non term
ASBISc-CR d.o.o.
ERSTE AND
STEIERMAERKISCHE
BANK D.D.
Short Term
Loan/Revolving Loan
15 000 000 HRK 7,06 2 123 432,29 07/09/2020 06/09/2023
ASBISc-CR d.o.o.
ERSTE AND
STEIERMAERKISCHE
BANK D.D.
Short Term
Loan/Revolving Loan
2 500 000 HRK 7,06 353 905,38 28/12/2022 28/12/2023
ASBIS IT Solutions
Hungary Kft.
CIB BANK LTD. Overdraft 100 000 000
HUF 375,68 266 183,99 29/06/2022 29/06/2023
ASBIS
KAZAKHSTAN TOO
HALYK BANK BGs/SBLCs 500 000 USD 1 500 000 14/09/2022 31/12/2022
ASBIS
KAZAKHSTAN TOO
HALYK BANK BGs/SBLCs 500 000 USD 1 500 000 03/10/2022 31/12/2022
ASBIS
KAZAKHSTAN TOO
ALFA BANK JSC SB Short Term
Loan/Revolving Loan
1 600 000
000
KZT 462,65 3 458 337,84 30/10/2020 30/10/2023
ASBIS
KAZAKHSTAN TOO
HALYK BANK Short Term
Loan/Revolving Loan
24 000 000
000
KZT 462,65 51 875 067,55 20/05/2022 19/05/2025
ASBIS
KAZAKHSTAN TOO
JSC BANK
CENTERCREDIT
Factoring with recourse 22 000 000
000
KZT 462,65 47 552 145,25 11/07/2022 30/07/2023
ASBIS
KAZAKHSTAN TOO
HALYK BANK Factoring with recourse 6 000 000
000
KZT 462,65 12 968 766,89 14/09/2022 14/09/2023
ASBIS BALTICS
SIA
OP CORPORATE
BANK PLC LATVIA
BRANCH
Overdraft 3 300 000 EUR 0,93 3 519 779,99 01/09/2022 31/08/2023
ASBIS BALTICS
SIA
OP CORPORATE
BANK PLC LATVIA
BRANCH
Factoring without
recourse
4 888 000 EUR 0,93 5 213 540,79 31/12/2022 non term
ASBIS POLAND Sp.
z o.o.
CREDIT AGRICOLE
BANK POLSKA S.A.
BGs/SBLCs 1 000 000 USD 1 1 000 000 11/05/2016 15/05/2023
ASBIS POLAND Sp.
z o.o.
CREDIT AGRICOLE
BANK POLSKA S.A.
Overdraft 4 000 000 PLN 4,4 908 719,16 01/08/2021 30/06/2023
ASBIS POLAND Sp.
z o.o.
BANK PEKAO S.A Overdraft 5 000 000 PLN 4,4 1 135 898,95 14/06/2022 10/06/2023
ASBIS ROMANIA
SRL
ALPHA BANK
ROMANIA SA
Short Term
Loan/Revolving Loan
17 000 000 RON 4,63 3 668 061,97 15/09/2019 15/02/2023
ASBIS ROMANIA
SRL
BRD - GROUPE
SOCIETE GENERALE
SA
Short Term
Loan/Revolving Loan
5 000 000 RON 4,63 1 078 841,76 13/07/2021 12/07/2023
ASBIS ROMANIA
SRL
BRD - GROUPE
SOCIETE GENERALE
SA
Factoring without
recourse
1 500 000 RON 4,63 323 652,53 14/12/2017 non term
ASBIS ROMANIA
SRL
BRD - GROUPE
SOCIETE GENERALE
SA
Factoring without
recourse
1 000 000 RON 4,63 215 768,35 24/10/2016 non term
ASBIS ROMANIA
SRL
BRD - GROUPE
SOCIETE GENERALE
SA
Factoring without
recourse
6 000 000 RON 4,63 1 294 610,11 03/11/2020 non term
ASBIS ROMANIA
SRL
BRD - GROUPE
SOCIETE GENERALE
SA
Factoring without
recourse
16 000 000
RON 4,63 3 452 293,62 10/12/2020 non term
ASBIS d.o.o.
EUROBANK AD
BGs/SBLCs 35 000 000 CSD 110,15 317 744,2 05/03/2022 05/03/2023
ASBIS d.o.o.
EUROBANK AD
Long Term Loan 50 000 000 CSD 110,15 453920,28 03/06/2020 03/06/2023
ASBIS d.o.o.
UNICREDIT BANK
SRBIJA AD BEOGRAD
Short Term
Loan/Revolving Loan
500 000 EUR 0,93 532 594,8 31/03/2022 30/03/2023
ASBIS d.o.o.
EUROBANK AD
Short Term
Loan/Revolving Loan
300 000 EUR 0,93 319 556,88 13/07/2022 13/07/2023
ASBIS d.o.o.
ADDIKO BANK A.D.
BEOGRAD
Short Term
Loan/Revolving Loan
500 000 EUR 0,93 532 594,8 21/09/2022 21/09/2023
ASBIS d.o.o.
OTP BANKA SRBIJA
AD
Short Term
Loan/Revolving Loan
35 000 000 CSD 110,15 317 744,2 01/11/2022 01/11/2023
Asbis OOO
SBERBANK
Short Term
Loan/Revolving Loan
350 000 000
RUR 70,33 4 976 008,53 18/05/2022 07/07/2023
Asbis OOO
SBERBANK
Overdraft 522 289 000
RUR 70,33 7 425 470,06 21/03/2022 10/01/2023
Asbis OOO
ABSOLUT FACTORING
LIMITED COMPANY
Factoring with recourse 150 000 000
RUR 70,33 2 132 575,08 27/03/2020 non term
Asbis OOO
NATIONAL
FACTORING
COMPANY (NFK)
Factoring with recourse 200 000 000
RUR 70,33 2 843 433,45 15/11/2021 non term
Asbis OOO
BANK SOYUZ
Factoring with recourse 700 000 000
RUR 70,33 9 952 017,06 28/03/2022 non term
Asbis OOO
BANK SOYUZ
Factoring with recourse 300 000 000
RUR 70,33 4 265 150,17 01/06/2022 non term
Asbis OOO
BANK SOYUZ
Factoring with recourse 20 000 000 RUR 70,33 284 343,34 01/07/2022 non term
Asbis OOO
OFISMARKET LLC
Factoring without
recourse
100 000 000
RUR 70,33 1 421 716,72 01/01/2021 non term
Asbis OOO
SBERBANK
Factoring without
recourse
70 000 000 RUR 70,33 995 201,71 01/01/2021 non term
Asbis OOO
SBERBANK
Factoring without
recourse
20 000 000 RUR 70,33 284 343,34 01/01/2021 non term
52
Asbis OOO
RAIFFEISENBANK
ZAO
Factoring without
recourse
235 000 000
RUR 70,33 3 341 034,3 29/05/2021 non term
Asbis OOO
SBERBANK
Factoring without
recourse
2 000 000
000
RUR 70,33 28 434 334,46 01/09/2021 non term
Asbis OOO
ST.-PETERSBURG
FACTORING
COMPANY LTD
Factoring without
recourse
20 000 000 RUR 70,33 284 343,34 15/11/2021 non term
Asbis OOO
SBERBANK
Factoring without
recourse
600 000 000
RUR 70,33 8 530 300,34 29/11/2021 non term
Asbis OOO
ST.-PETERSBURG
FACTORING
COMPANY LTD
Factoring without
recourse
250 000 000
RUR 70,33 3 554 291,81 01/04/2022 non term
Asbis OOO
BANK SOYUZ
Factoring without
recourse
150 000 000
RUR 70,33 2 132 575,08 21/04/2022 non term
Asbis OOO BANK SOYUZ Factoring without
recourse
200 000 000
RUR 70,33 2 843 433,45 30/05/2022 non term
Asbis OOO
BANK SOYUZ
Factoring without
recourse
250 000 000
RUR 70,33 3 554 291,81 30/05/2022 non term
Asbis OOO
RUSSIAN
AGRICULTURAL
BANK
Factoring without
recourse
50 000 000 RUR 70,33 710 858,36 03/06/2022 non term
Asbis OOO
BANK SOYUZ
Factoring without
recourse
150 000 000
RUR 70,33 2132575,08 01/07/2022 non term
Asbis OOO
BANK SOYUZ
Factoring without
recourse
50 000 000 RUR 70,33 710 858,36 01/07/2022 non term
Asbis OOO
MTS BANK
Factoring without
recourse
120 000 000
RUR 70,33 1 706 060,07 12/07/2022 non term
Asbis OOO
ST.-PETERSBURG
FACTORING
COMPANY LTD
Factoring without
recourse
50 000 000 RUR 70,33 710 858,36 01/12/2022 non term
Asbis OOO
RAIFFEISENBANK
ZAO
Supply Chain
Financing/Reverse
Factoring
250 000 000
RUR 70,33 3 554 291,81 01/01/2022 non term
Asbis OOO
RAIFFEISENBANK
ZAO
Supply Chain
Financing/Reverse
Factoring
250 000 000
RUR 70,33 3 554 291,81 01/01/2022 non term
Asbis OOO
RAIFFEISENBANK
ZAO
Supply Chain
Financing/Reverse
Factoring
300 000 000
RUR 70,33 4265150,17 01/08/2022 non term
ASBIS d.o.o.
Slovenia
ADDIKO BANK D.D.
Long Term Loan 300 000 EUR 0,93 319 795,33 02/11/2022 24/10/2025
ASBIS d.o.o.
Slovenia
ADDIKO BANK D.D.
Short Term
Loan/Revolving Loan
300 000 EUR 0,93 319 795,33 25/11/2022 24/11/2023
ASBIS SK spol. s r.
o.
VSEOBECNA
UVEROVA BANKA A.S
(VUB, A.S.)
Overdraft 20 000 000 EUR 0,93 21 331 999,94 04/11/2019 31/01/2023
ASBIS SK spol. s r.
o.
TATRA BANKA A.S.
Overdraft 23 000 000 EUR 0,93 24 531 799,93 23/02/2022 30/10/2023
Asbis-Ukraine ltd
TASCOMBANK JSC
(FORMERLY BANK
BUSINESS
STANDARD)
Short Term
Loan/Revolving Loan
150 000 000
UAH 36,56 4 101 879,75 19/05/2021 03/06/2025
Asbis-Ukraine ltd
FIRST UKRAINIAN
INTERNATIONAL
BANK
Short Term
Loan/Revolving Loan
50 000 000 UAH 36,56 1 367 293, 25 14/05/2021
03/05/2024
Asbis-Ukraine ltd
JOINT-STOCK
COMPANY OTP BANK
Short Term
Loan/Revolving Loan
100 000 000
UAH 36,56 2 734 586,5 01/08/2021 21/07/2026
Asbis-Ukraine ltd
RAIFFEISEN BANK
Short Term
Loan/Revolving Loan
157 500 000
UAH 36,56 4 306 973,74 01/09/2021 01/12/2023
Asbis-Ukraine ltd
JSC «ALFA-BANK»
Short Term
Loan/Revolving Loan
350 000 000
UAH 36,56 9 571 052,76 29/11/2021 31/12/2025
Asbis-Ukraine ltd
PRAVEX-BANK JOINT-
STOCK COMPANY
COMMERCIAL BANK
Short Term
Loan/Revolving Loan
77 902 000 UAH 36,56 2 130 297,58 22/12/2022 04/08/2024
Asbis-Ukraine ltd
CREDIT AGRICOLE
BANK PJSC
Short Term
Loan/Revolving Loan
109 705 800
UAH 36,56 3 000 000 26/12/2022 28/04/2023
Asbis-Ukraine ltd
JOINT-STOCK
COMPANY OTP BANK
Overdraft 70 000 000 UAH 36,56 1 914 210,55 02/12/2022 21/07/2026
Asbis-Ukraine ltd
FIRST UKRAINIAN
INTERNATIONAL
BANK
Factoring with recourse 20 000 000 UAH 36,56 546 917,3 21/03/2019 27/10/2023
Asbis-Ukraine ltd
JSC «ALFA-BANK»
Factoring with recourse 350 000 000
UAH 36,56 9 571 052,76 01/02/2022 31/12/2025
Asbis-Ukraine ltd
JOINT-STOCK
COMPANY OTP BANK
Factoring with recourse
70 000 000
UAH 36,56 1 914 210,55 05/12/2022 21/07/2026
Asbis-Ukraine ltd
TASCOMBANK JSC
(FORMERLY BANK
BUSINESS
STANDARD)
Factoring with recourse
250 000 000
UAH 36,56 6 836 466,26 23/12/2022 03/06/2025
53
Capital Expenditure
Our total capital expenditure for tangible and intangible assets amounted to U.S. $ 17,861 for the year 2022,
compared to U.S. $ 16,448 for the year 2021.
Commitments and contingencies
Commitments and contingencies are presented in the audited financial statements included elsewhere in this annual
report.
Critical Accounting Policies
The preparation of our financial statements under IFRS requires Management to select and apply certain accounting
policies that are important to the presentation of our financial condition and results of operations. Certain of our
accounting policies have been identified as critical accounting policies. A "critical accounting policy" is one that both
(i) is significant to our financial condition and results of operations (in that the application of a different accounting
principal or changes in related estimates and assumptions that Management could reasonably have used or followed
would have a material impact on our financial condition and results of operations) and (ii) requires difficult, complex
or subjective analysis to be made by Management based on assumptions determined at the time of analysis.
Our accounting policies are reviewed on a regular basis and Management believe that the assumptions and
estimates made in the application of such policies for the purposes of preparing our financial statements are
reasonable; actual amounts and results, however, could vary under different methodologies, assumptions or
conditions. Our accounting policies and certain critical accounting estimates and judgments with respect to the
preparation of our financial statements are described in Note 2 to the financial statements included elsewhere in
this annual report.
ITEM 4. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Board of Directors
The Board of Directors is responsible for formulating, reviewing, and approving our strategy, budgets, and corporate
actions. We intend to hold Board of Directors meetings at least four times each financial year and at other times as
and when required.
The following table sets out our current Directors:
Name
Year of
Birth
Position Appointed to the Board
Expiry of term
Nationality
Siarhei Kostevitch 1964
Chairman,
Chief Executive Officer
30 August 1999 2023 Cypriot
Marios Christou 1968 Chief Financial Officer 28 December 2001 2023 Cypriot
Constantinos Tziamalis
1975 Deputy CEO 23 April 2007 2025 Cypriot
Julia Prihodko 1982
Chief Human Relations
Officer
7 May 2021 2025 Ukrainian
Tasos A. Panteli 1976 Non-Executive Director 18 April 2019 2024 Cypriot
Maria Petridou 1977 Non-Executive Director 29 March 2021 2024 Cypriot
54
The biographical details of the members of our Board of Directors are set out below:
Siarhei Kostevitch, born in 1964, holds a master’s degree in radio engineering design from the Radio Engineering
University of Minsk (1987). Between 1987 and 1992, Siarhei worked as a member of the Research Center at the
Radio Engineering University in Minsk, where he published a series of articles on microelectronics design in local
and worldwide specialist magazines. In 1990, Siarhei established a design and manufacturing business in Minsk,
Belarus, and within 15 years has built it into the leading computer component distributor in Eastern Europe and the
Former Soviet Union. Siarhei is the Chairman and the CEO of the Group.
Marios Christou, born in 1968, holds a B.A., dual major in Accounting and Information Systems and Economics,
from Queens College of the City University of New York (C.U.N.Y.) (1992), and an M.B.A. in International Finance
from St. John's University, New York (1994). Marios is also a Certified Public Accountant (CPA) and a member of
the American Institute of Certified Public Accountants (AICPA). Marios worked with Deloitte & Touche Limassol,
Cyprus, for four years, as an audit manager. Marios then worked as a Financial Controller at Photos Photiades
Breweries Ltd (part of the Carlsberg Group of companies) for three years. Marios joined the Company in August
2001 and is the Chief Financial Officer.
Constantinos Tziamalis, born in 1975, holds a B.Sc. in Banking and Financial Services (1998) and a Masters (M.Sc.)
in Finance (1999) from the University of Leicester. Constantinos Tziamalis worked at the private banking department
of BNP Paribas in Cyprus and then joined a brokerage house, Proteas Asset Management Limited, for 3 years as
Investor Accounts Manager. Constantinos joined the Company in January 2002 as Financial Project Manager.
He was promoted to the position as Corporate Credit Controller & Investor Relations in March 2003 and became
Director of Risk and Investor Relations as of 23 April 2007. In January 2010 Constantinos has been also appointed
as head of the FX Risk Management team. In February 2022, he was nominated to the newly created position of
Deputy CEO.
Julia Prihodko, born in 1982, holds a Masters (M.Sc.) in Psychology. Julia Prihodko started her career in a Ukrainian
recruiting agency as a Recruiting Manager, held the position of Head of HR Department at “NOVA” Insurance
Company and Investment Consulting Center for 2 years, and worked for PJSC "Insurance Company" Alfa Insurance"
(part of the European private investment holding company ABH Holdings S.A. (ABHH)) for 7 years as Head of
Human Resources Department.
Julia joined the Company in May 2015 as Human Relation Manager of ASBIS Ukraine. She was promoted to the
position of Chief Human Relations Officer in February 2019. On the 7
th
of May 2021, Julia Prihodko was appointed
to the Board of Directors as an Executive Director.
Mr. Tasos A.Panteli joined the Group in 2019. Tasos started his professional career at Nicos Chr. Anastasiades &
Partners (Advocates – Legal Consultants), holding the position of Advocate in 2001. Since 2005, Tasos has been
working at Andreas M. Sofocleous & Co LLC (Advocates – Legal Consultants) as Advocate (Advocate - Partner
since 2010).
He received a Bachelor of Laws (LLB) from the Queen Mary and Westfield College (1999), a Postgraduate Diploma
in Legal Skills from the City University London, Inns of Court School of Law (2000). In the same year, he completed
the Bar Vocational Course at the City University London, Inns of Court School of Law and was Called to the Bar. In
2001 he received a Master of Laws (LLM) from the King’s College London. In 2002 he was admitted to the Cyprus
Bar Association. He is a member of the Board of Directors of Cyprus Hydrocarbons Company (CHC) Ltd, a member
of the Cyprus Bar Association and a member of the Honourable Society of Lincoln’s Inn (Barrister at Law). Tasos is
one of the two Non-Executive Directors of the Company.
Mrs. Maria Petridou joined the Group in 2021. She started her professional career at KPMG Metaxas, Loizides,
Syrimis (Limassol, Cyprus), holding the position of Audit Supervisor (1998-2002). In 2002, Mrs. Maria Petridou
joined EFG EUROBANK SA (Athens, Greece) as an Assistant Manager in the Finance and Control Department.
Between the years 2006 and 2007, she worked for KOMMUNALKREDIT INTERNATIONAL BANK LTD (Limassol,
Cyprus) as a Manager in the Accounting Department. In 2008, she held the position of Finance Lead, in the SOX
Compliance Office of MF GLOBAL LIMITED (London, UK). Between the years 2011 and 2012 she worked for
Versatile Apparel Ltd (London, UK), holding the position of Finance Director. In 2013, she joined AMF Horwath
DSP (Limassol, Cyprus) as the Head of the Fund Administration Services department. Since 2016 she has been
engaged in accounting and financial services projects as a consultant. Between the years 2018 and 2021, she held
the position of Chief Accountant at Agri Europe Cyprus Limited.
55
Mrs. Maria Petridou received a Bachelor of Arts in accounting and financial management (1998) and was awarded
an Upper Second-Class Honours degree from the UNIVERSITY OF ESSEX (Colchester, England). She is a member
of the Institute of Chartered Accountants in England and Wales (ICAEW).
Directors’ remuneration
Unless determined by ordinary resolution, the number of Directors shall be not less than three and there shall be no
maximum number of Directors.
Subject to our Articles of Association, we may by ordinary resolution appoint a person who is willing to act as a
Director, either to fill a vacancy or as an addition to the existing Board of Directors.
The remuneration of the Directors will from time to time be determined by the general meeting on the
recommendation of the remuneration committee.
Any Director performing special or extraordinary services in the conduct of our business or in discharge of his or her
duties as Director, or who travels or resides abroad in discharge of his or her duties as Director may be paid such
extra remuneration as determined by the Directors, upon recommendation by the remuneration committee.
Executive Directors are also entitled to receive a bonus every quarter depending upon quarterly results. The bonus
consists of a certain amount or percentage which is agreed and described in each Director’s service agreements or
contracts, as applicable, however, Directors only receive such a bonus to the extent profit meets certain pre-set
budgetary figures. All such bonus amounts are included in the remuneration tables set forth below.
The following table presents the remuneration (including bonuses) of Directors for the years ended 31 December
2022 and 2021, in U.S.$:
Name of the
director, Position
Year
1
Fixed remuneration
2
Variable remuneration
3
Extraordinary
items
4
Provident
Fund
5
Total
remuneration
Basic Fees Fringe
benefits
One-
year
variable
Multi-year
variable
Siarhei Kostevitch,
Chairman,
Executive
(Chief Executive Officer)
2021 228 851 0 7 1,086
2022 205 773 0 6 984
Marios Christou,
Executive
(Chief Financial Officer)
2021 138 115 0 4 257
2022 123 170 0 4 297
Costas Tziamalis,
Executive
(Deputy CEO)
2021 138 120 0 4 262
2022 123 170 0 4 297
Julia Prihodko
Executive
(Chief Human Relations
Officer)
2021 31 20 0 1 52
2022 50 35 0 2 87
Yuri Ulasovich,
Executive
(Chief Operating Officer)*
2021 43
4
0 1 48
2022 - - - - -
Demos Demou,
Non-executive
(Non-executive Director)*
2021 7
0
0 0 7
2022 - - - -
Tasos Panteli,
Non-executive
(Non-executive Director)
2021 14 0 0 0 14
2022 13 0 0 0 13
Maria Petridou
Non-executive
(Non-executive Director)
2021 11 0 0 0 11
2022 13 0 0 0 13
*Yuri Ulasovich and Demos Demou resigned as directors in 2021
56
Information about non-financial remuneration components due to each board member and key manager
Executive members of the Board of Directors are entitled to a car, phone, and medical insurance.
Significant amendments of the remuneration policy in the last financial year or information about their
absence.
During 2022, there were no significant changes in the Company’s remuneration policy.
Assessment of the implementation of the remuneration policy
The Board of Directors positively evaluates the functioning of the remuneration policy from the point of view of
achieving its objectives, in particular, the long-term shareholder value growth and the stability of the Company's
operations.
Shares ownership
The table below presents the beneficial interests of Directors in the Company’s issued share capital as at the date
of the publication of this annual report:
Name Number of Shares % of the share capital
Siarhei Kostevitch (directly and
indirectly) *
20,448,127 36.84%
Constantinos Tziamalis 556,600 1.00%
Marios Christou 463,061 0.83%
Julia Prihodko 0 0%
Tasos A. Panteli 0 0%
Maria Petridou 0 0%
* Siarhei Kostevitch holds shares as the ultimate beneficial owner of KS Holdings Ltd.
To the best of the Company's knowledge, the members of the Board of Directors do not have any rights to the
Company’s shares.
In 2022 Mr. Siarhei Kostevitch and Mr. Constantinos Tziamalis purchased 5,000 and 450 of ASBIS shares
respectively.
57
Committees
The Audit Committee of the Company was comprising Tasos A. Panteli and Maria Petridou (both non-executive
Directors) and Marios Christou (as attending member) and is chaired by Maria Petridou. The Audit Committee meets
at least twice a year. The Audit Committee is responsible for ensuring that the Group’s financial performance is
properly monitored, controlled, and reported. It also meets the auditors and reviews reports from the auditors relating
to accounts and internal control systems. The Audit Committee meets at least once a year with the auditors.
The Remuneration Committee of the Company was comprising Tasos A. Panteli and Maria Petridou (both non-
executive Directors) and Siarhei Kostevitch (as attending member) and is chaired by Tasos A. Panteli. It sets and
reviews the scale and structure of the executive Directors’ remuneration packages, including share option schemes
and terms of their service contracts.
The remuneration and the terms and conditions of the non-executive Directors are determined by the Directors with
due regard to the interests of the Shareholders and the performance of the Group. The Remuneration Committee
also makes recommendations to the Board concerning the allocation of share options and/or treasury stock
allocation to directors, managers and employees of the Company.
Changes in main management rules
There were no changes to main management rules in 2022.
List of all agreements signed with directors that gives the right to compensation in a case the person resigns
or is fired
There were no changes in the service agreements of any of the directors.
Information about ownership of shares of any related parties - owned by the Directors
None of our Directors holds shares of any of our subsidiary companies, other than disclosed.
Employees
During 2022 we have employed an average number of 2,222 employees, of whom 220 were employed by the
Company and the remainder in the rest of the Group’ s offices worldwide.
The split of employees by area of activity in 2022 and 2021 is as follows:
2022 2021
Sales and Marketing 1,213 1,093
Administration and IT 338 358
Finance 200 197
Logistics 471 431
Total 2,222 2,079
58
ITEM 5. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Major Shareholders
The following table presents shareholders possessing more than 5% of our shares as of the date of publication of
this report, according to our best knowledge. The information included in the table is based on the information
received from the shareholders pursuant to Art. 69, sec. 1, point 2 of the Act on Public Offering, conditions governing
the introduction of financial instruments to organized trading and public companies.
Name
Number of shares
% of the
share capital
Number of votes
% of
votes
KS Holdings Ltd* 20,448,127 36.84% 20,448,127 36.84%
ASBISc Enterprises Plc
(buy-back program) 328,800 0.59% 328,800 0.59%
Free-float 34,723,073 62.57% 34,723,073 62.57%
TOTAL
55,500,000
100%
55,500,000
100%
*Siarhei Kostevitch holds shares as the ultimate beneficial owner of KS Holdings Ltd
Information on the buy-back program:
On March 31st, 2022, the Company started to execute the buy-back program which was approved by the
Extraordinary General Meeting of Shareholders held on February 28th, 2022. According to the resolution, the Board
of Directors has been authorized to buy-back up to 2,000,000 shares for a maximum of USD 1,000,000.
Within the buyback program, the Company during market sessions between 31st March 2022 - 1st September 2022,
purchased a total number of 328,800 own shares. The average unit price of the purchase was PLN 13.32 per share.
The purchased own shares is 0.592% of the Company’s share capital and gives 328,800 votes (0.592%) at the
AGM.
Besides the above-mentioned buy-back program, there were no changes in the number of shares possessed by
major shareholders in 2022.
Related Party Transactions
During the year ended 31 December 2022, the Company did not have any material related party transaction other
than typical or routine transactions. For the ordinary course of business transactions, please refer to the notes on
the audited financial statement attached on this annual report.
In the year 2022, a number of transactions have occurred between the Company and its subsidiaries and between
our subsidiaries. In our opinion, all of these transactions were based on terms that did not vary from market terms
and their nature and conditions resulted from ongoing needs and operations of the Company and of the Group, such
as contracts related to the purchases of goods for onward distribution to external clients. All of these transactions
and related outstanding balances were eliminated in the Financial Statements included in this Annual Report and,
as a result, did not have any impact on our consolidated financial results and on our financial position as a whole.
59
ITEM 6. FINANCIAL INFORMATION
Legal Proceedings
Currently, there are no legal significant proceedings pending against us or any of the members of our Group.
Information on loans granted to any other party
During the year ended 31
st
December 2022, we have not granted any loan to any other party other than to our
subsidiaries which are disclosed in another part of this report (audited financial statements).
Information on granted guarantees
We grant certain guarantees to some of our vendors and to certain customs authorities. All our guarantees are
reported in the financial statements section of this annual report.
The total corporate guarantees the Company has issued, as at December 31st, 2022, to support its subsidiaries’
local financing, amounted to U.S.$ 176,223.
The total bank guarantees and letters of credit raised by the Group (mainly to Group suppliers) as at December
31st, 2022, was U.S.$ 41,960 – as per note number 19 to the financial statements.
Evaluation of financial resources management (including the ability to pay back commitments) and
information about actions undertaken to avoid risks
This has been discussed in note 34 of our financial statements to this annual report under the headline Financial
Risk management.
Evaluation of the possibility of realization of investment intentions
The Company has completed almost all of its current investments in prior years and in 2022 intends to mainly grow
organically, therefore there is low risk connected with the realization of current investment intentions.
Characteristics of the structure of assets and liabilities in the consolidated balance sheet including
characteristics from the point of view of Company liquidity
The structure of assets and liabilities in the balance sheet including characteristics from the point of view of the
Company’s liquidity has been discussed in detail in the financial statements included in this annual report:
a) note 16 - Trade receivables - Ageing analysis of receivables
b) note 34 – Financial risk management – point 1.3. Liquidity risk
60
Information about the structure of main deposits and capital investments in 2022
There were no deposits other than those disclosed as pledged deposits in the financial statements to this annual
report.
There were no other capital investments than the ones disclosed in note 10 of the financial statements included in
this annual report.
Information about relevant off-balance sheet positions as at December 31
st
, 2022
There were no relevant off-balance sheet positions as at December 31
st
, 2022, other than Bank Guarantees
disclosed in note 19 of the audited financial statements.
Dividend Policy
Our dividend policy is to pay dividends at levels consistent with our growth and development plans while maintaining
a reasonable level of liquidity.
On the 4
th
of May 2022, the Annual General Meeting of Shareholders adopted a resolution on a final dividend
payment for the year ended December 31
st
, 2021, amounting to USD 0.10 per share and USD 5,550,000 in total, in
line with the recommendation of the Company’s Board of Directors. The Annual General Meeting has also
acknowledged the decision of the Board of Directors to approve an interim dividend of USD 11,100,000, paid in
December 2021. Thus, the total dividend payment from the Company's profit for 2021 amounted to U.S.$ 0.30 per
share, a total payment of USD 16,650,000.
On the 2
nd
of November 2022, the Company’s Board of Directors decided on the payment of an interim dividend
from 2022 profits. The interim dividend of USD 0.20 per share was paid out on the 1
st
of December 2022. The interim
dividend record date was on the 17
th
of November 2022.
On the 29
th
of March 2022, the Company’s Board of Directors decided to recommend to the Annual General Meeting
of Shareholders the payment of the final dividend from the Company’s 2022 profits of USD 0.25 per share.
Any future dividends will be solely at the discretion of the Board of Directors and the General Meeting of shareholders
after considering various factors, including business prospects, future earnings, cash requirements, financial
position, expansion plans and requirements of the Cyprus law.
The Cyprus law does not limit dividends that may be paid out except that it states that dividends may only be paid
out of profits and may not be higher than those recommended by the Board of Directors.
Throughout recent years the Group has always followed a steady Dividend Policy, by not paying anything more than
50% of the profitability of the precedent year.
