Press releases

12 April 2018

DANWOOD HOLDING S.A. PUBLISHES PROSPECTUS AND LAUNCHES PUBLIC OFFERING

DANWOOD HOLDING S.A. PUBLISHES PROSPECTUS AND LAUNCHES PUBLIC OFFERING

Danwood Holding S.A. (the “Company” or the “Group”), one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction, published its prospectus today and is launching its initial public offering (the “Offering”).

The maximum price has been set at PLN 15,00 per share, which means that the value of the public offering may be up to PLN 360  million.

The bookbuilding process among Institutional Investors will occur between 12–24 April 2018. Pekao Investment Banking S.A. will act as Global Coordinator, Joint Bookrunner and Offering Agent. mBank S.A. and Wood & Company Financial Services, a.s. S.A. (Oddział w Polsce) will act as Joint Bookrunners.

Individual Investors may file subscription orders for shares between 13–23 April 2018 at selected Customer Service Points of the Retail Consortium in Poland. The Retail Consortium includes Centralny Dom Maklerski Pekao, Dom Maklerski Pekao, Dom Inwestycyjny Xelion, Dom Maklerski mBanku, Biuro Maklerskie Alior Banku, Dom Maklerski PKO Banku Polski and Dom Maklerski Banku Ochrony Środowiska.

The strategic aim of Danwood Holding S.A. is to deliver over 1,900 houses to customers in 2020, with over 95% of them completed to the turnkey standard.

DETAILS OF THE PUBLIC OFFERING

  • The Offering will consist exclusively of existing shares. The main offering (the “Main Offering”) may include up to 20,000,000 existing series B ordinary shares, representing up to 50% of the Company’s share capital, belonging to the Selling Shareholder, Polish Enterprise Fund VII (indirectly, via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors. Additionally, the Selling Shareholder may offer up to a further 4,000,000 existing series B ordinary shares representing up to 10% of the Company’s share capital (“Additional Offer Shares”). Thus, on the basis of the Prospectus, the Selling Shareholder will offer in total up to 24,000,000 existing series B ordinary shares, representing up to 60% of the Company’s share capital.
  • In light of its business model enabling the Company to generate large positive operating cash flows with limited need for capital expenditures, the Company does not plan to increase its share capital in order to raise additional funds in the Offering. 
  • The Offering is addressed to individual and institutional investors in Poland and selected international institutional investors outside of the United States of America in reliance on Regulation S (“Regulation S”) under the US Securities Act of 1933 (the “US Securities Act”). 
  • The Selling Shareholder’s intention is to offer Individual Investors up to 10% of the Main Offering, and in the case of offering Additional Offer Shares, up to 10% of the Offer Shares.
  • The shares belonging to the Selling Shareholder will be subject to a lock-up obligation not to sell the shares for a period of 360 days from the first listing of the Company’s shares on the WSE. The Company also undertakes not to conduct any new issue of shares for a period of 360 days. The members of the Company’s Management Board undertake not to sell the shares they take up immediately after the IPO under the incentive program, for a period of 720 days.
  • The Company’s shares will be listed on the regulated (main) market of the WSE. 

ANTICIPATED ABBREVIATED SCHEDULE OF OFFERING

DATE

ACTION

12–24 April 2018

Bookbuilding among Institutional Investors

13–23 April 2018

Subscriptions accepted from Individual Investors

no later than 24 April 2018

Publication of the Sale Price for Individual Investors and the Sale Price for Institutional Investors, the final number of Offer Shares in the Offering, and the final number of Offer Shares for specific categories of investors

25–27 April 2018

Subscriptions accepted from Institutional Investors

30 April 2018

Allotment of Offer Shares

on or about 11 May 2018

Anticipated listing on the WSE

STRATEGY OF DANWOOD HOLDING


The overriding strategic aim of the Group is to supply over 1,900 houses to customers in 2020, with over 95% of them completed to the turnkey finishing standard.
The forecast rate of growth in the segment of turnkey houses is the highest on the market across all categories of one- and two-family homes, and thus the Group intends to concentrate its activity on this area, focusing on projects from the medium price range. 

The Group’s main strategic aims are: 

    1. Reinforcing its market position in Germany as the leader of the turnkey segment which is expected to generate the main portion of business growth. The share of the Group’s revenue from the German market, which in 2017 was 87.4%, may  in subsequent years be reduced due to the robust growth of sales in other markets, but Germany will remain a strategic market for the Group’s operations.

    2. Gaining a major position in this segment on other markets where the Group is already present, i.e. the UK and the Alpine countries.

    3. Potential expansion to new geographical markets in the future, e.g. Scandinavian markets, primarily Sweden and Norway. 

    4. Continual improvement in EBITDA margin by achieving effects of scale and strict cost controls.

The Group intends to achieve its strategic goals through: 

  • Concentration on building houses from the medium price shelf under the turnkey standard
  • Growth and improvement of the Group’s unique model for combining online promotion and marketing with a sales network
  • Expansion (in 2018–2019) of the Group’s own production capacity by another 500 houses annually, i.e. to 2,000 houses by 2019—the Group estimates the capital expenditures for this at about PLN 38m
  • Expansion of the segment of more expensive houses by marketing new designs in the offering at a higher price with a higher standard of finishing, aimed at a more demanding and less price-sensitive customer group, including cooperation with well-known design studios
  • Gradual and periodic intensification of the employee  recruitment process in particular  production employees as well as assembly and finishing employees. 

Jarosław K. Jurak, CEO of Danwood Holding S.A., commented: “In line with our strategy, we are steadily growing the scale of our business, reinforcing our position on the German market, where we are a leader, and increasing our presence on other European markets, particularly the British market. We are also considering entering new geographical markets in the future, including Sweden and Norway. We want to focus on what we do best: building medium price turnkey houses. Within the next two years we plan to expand our production capacity to 2,000 houses per year, devoting about PLN 38 million to this purpose. We entered 2018 with a solid backlog of orders including about 2,300 houses, which ensures achievement of our sales targets through the end of the 1st quarter of 2019. We see excellent prospects for the market of prefabricated houses of timber-frame construction in Europe and its growing importance in comparison to traditionally built homes. In my view, all of this can make the Company attractive for investors.”

NUMBER OF HOUSES DELIVERED AND ORDER BACKLOG

The number of houses delivered to customers by the Danwood Holding Group has steadily grown, from 332 in 2008 to 1,215 in 2017. Over 20 years of operations, the Group has delivered over 8,500 homes to customers.

Number of homes delivered by the Group in 2015–2017:

units 2017  2016  2015 

Number of homes

1.215 995 838

Number of new contracts signed:

units 2017 2016  2015 

Number of new contracts 

1.992 1.594 1.452

As of the end of 2017 the Company’s order backlog stood at approx. 2,300 homes.

FINANCIAL RESULTS

Selected financial data of the Group in 2015–2017:

PLN million

2017  Change %
2017/2016
2016  Change %
2016/2015

2015

Sales revenue

848,3 +26% 672,0 +27%

528,6

EBITDA*

69,5 +25% 55,8 +34%

41,6

EBITDA

61,2 +24% 49,4 +31%

37,6

Net profit *

51,6 +51% 34,1 +26%

27,2

Net profit 

43,4 +54% 28,2 +25%

22,6

* results adjusted with one-off events described in the prospectus 

For more information please contact:
Beata Cioczek, M+G
tel. +48 22 416 01 02, +48 508 385 432
e-mail: beata.cioczek@mplusg.com.pl

KEY INFORMATION ABOUT THE COMPANY

Danwood Holding S.A. Group is one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction, which it sells under its own Danwood brand. 

The Group is the leader in the German market in terms of the number of prefabricated turnkey homes sold, with a market share of 10–11%, and the third-largest player in the market in the overall segment of prefabricated homes. The group generates approx. 90% of its revenue from the German market. 

Apart from the German market, the Group is also present in the UK, Austria, Switzerland and Poland. On the Polish market the Group is one of the largest producers of prefabricated homes.

Danwood’s offer is concentrated on turnkey houses in the mid-price segment, in which the Company is an undisputed leader in the German market.

The Group’s product line is one of the most comprehensive and varied on the market, offering a selection of over 130 designs for one- and two-family houses, with an area from 80 m2 to over 300 m2, functionally and stylistically diverse and adapted to local expectations. For customers seeking non-standard solutions, the Group offers modifications of standard designs as well as individual designs. Key competitive advantages of the Group are high quality and affordable prices of houses. In a customer satisfaction survey, Danwood customers also indicated high quality of service. According to the study, 86% of customers had already recommended the Group’s products to others or intended to do so. 

Danwood Holding has a modern production facility in Bielsk Podlaski, with a current production capacity, after expansion in 2015–2016, of 1,500 homes per year, with the possibility of further increases as more houses are delivered. The Group plans to spend PLN 38 million of its own funds on production facility expansion in the next two years. 

The owner of 100% of the shares of Danwood Holding S.A. is Polish Enterprise Fund VII (indirectly via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors, one of the largest private equity firms in Central & Eastern Europe. As of the end of 2017 the Danwood Holding Group employed 1,740 people. 

UNIQUE BUSINESS MODEL

The Group has a unique, cost-effective marketing and distribution model focused on online communication, unlike competitors which mainly rely on model houses located in show house exhibitions. The Group’s show houses are located in residential areas and are owned and financed by the Group’s agents, and thus the Group does not incur costs for their construction and operation.

Danwood houses are constructed on land plots belonging to the Group’s customers, meaning that the Company does not bear the risks connected with selection of the location and purchase of the plot, and does not invest in a land bank. Construction of the houses is financed out of funds paid in by the customers.

Regardless of the country of operations, finishing and fit-out of homes is conducted by the Group’s own crews, which significantly raises the efficiency of operations and the availability and ability to offer houses to a turnkey standard. A key competitive advantage of Danwood is access to qualified workers, enabling the Company to satisfy the growing demand for its homes and to offer customers houses finished to a turnkey standard. Combined with the modern production facility in Bielsk Podlaski, this enables the Group to supply customers with high-quality turnkey homes of diverse design and surface area. 

The Group’s unique marketing and sales model, as well as access to a skilled workforce, translates into a higher rate of growth for Danwood compared to the competition, and a consistent increase in its market share. 

MARKET ENVIRONMENT

The share of prefabricated houses in the overall number of newly delivered one- and two-family houses is steadily growing. The rate of growth in turnkey-standard homes exceeds that for sales of prefabricated homes in general. In the markets where the Group operates, the average annual growth (CAGR) in 2014–2017 for turnkey prefabricated homes was 7.3%, for single-family prefabricated homes 6.1%, and for all single-family homes 5.3%. 

Along with growth in the number of prefabricated homes sold, in particular turnkey units, the unit price of homes is rising each year. This is a product of the expectations of customers, who prefer increasingly higher fit-out standards, as well as rising costs of construction assuming an unchanging fit-out standard. The increase in costs is generated by inflation and also by the rising costs of hiring workers involved in production, installation and fit-out of homes. 

Consequently, it may be anticipated that the rate of growth in the value of sales of turnkey prefabricated homes will significantly exceed the rate of growth in the number of homes sold. The average annual growth (CAGR) in value of sales of turnkey prefabricated homes for the Group’s operating markets was 10.6% in 2014–2017 and is projected to be 7.0% in 2017–2022 (all data from Roland Berger report from January 2018, available at https://‌www.rolandberger.com/en/Publications/pub_pre_fab_houses.html). 

More information about the Company’s operations at www.danwood-holding.pl 

The information contained herein is not for publication or distribution, directly or indirectly, in the United States of America. The materials do not constitute an offer of securities for sale or the solicitation of an offer to purchase securities, in the United States of America, nor may the securities be offered or sold in the United States of America without registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the Offering in the United States of America or to conduct a public offering of securities in the United States of America.

This document is an advertisement and not an issue prospectus for the purposes of applicable measures implementing EU Directive 2003/71/EC (as amended) (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive and other applicable regulations, the “Prospectus Directive”). The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. An issue prospectus prepared pursuant to the Prospectus Directive is published, following approval by the Polish Financial Supervision Authority – the Polish capital markets authority, is the sole legally binding document containing information on Danwood Holding S.A. (the “Company”) and the offering of the Company’s securities in Poland as well as on their admission and introduction to trading on the regulated market organised by the Warsaw Stock Exchange and which, following publication, is obtained from the website of the Company (http://www.danwood-holding.pl).

It may be unlawful to distribute this document in certain jurisdictions. This document is not for distribution in Canada, Japan or Australia. The information in this document does not constitute an offer of securities for sale in Canada, Japan or Australia.

The information contained herein may constitute forward-looking statements. Such forward-looking statements can be identified by the use of terminology referring to the future, such as e.g. “may”, “will be”, “anticipates”, “is expected”, “should”, “estimates”, “believes”, “think”, “assume”, or, in each case, their negatives or other variations or comparable terms. Forward-looking statements involve known and unknown risk and uncertainty, and other factors that may cause the Company's and its subsidiaries’ actual results, performances and achievements to differ materially from any of the expected future results. Subject to the binding provisions of law, the Company disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein upon the occurrence of any future events, becoming aware of any new information or the occurrence of any other circumstances.

11 April 2018

POLISH FINANCIAL SUPERVISION AUTHORITY APPROVES PROSPECTUS OF DANWOOD HOLDING S.A. 

Today the Polish Financial Supervision Authority (“KNF”) approved the prospectus of Danwood Holding S.A. (the “Company” or the “Group”), one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction. The Company plans to publish the Prospectus on 12 April 2018. 

Pekao Investment Banking S.A. will act as Global Coordinator, Joint Bookrunner and Offering Agent. mBank S.A. and Wood & Company Financial Services, a.s. S.A. (Oddział w Polsce) will act as Joint Bookrunners.

The Company’s shares will be listed on the regulated (main) market of the WSE.

It is anticipated that the Offering will consist exclusively of existing shares. The main offering (the “Main Offering”) may include up to 20,000,000 existing series B ordinary shares, representing up to 50% of the Company’s share capital, belonging to the Selling Shareholder, Polish Enterprise Fund VII (indirectly, via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors. Additionally, the Selling Shareholder may offer up to a further 4,000,000 existing series B ordinary shares representing up to 10% of the Company’s share capital (“Additional Offer Shares”). Thus, on the basis of the Prospectus, the Selling Shareholder will offer in total up to 24,000,000 existing series B ordinary shares, representing up to 60% of the Company’s share capital.

The Offering will be addressed to individual and institutional investors in Poland and selected international institutional investors outside of the United States of America in reliance on Regulation S (“Regulation S”) under the US Securities Act of 1933 (the “US Securities Act”). 

Jarosław K. Jurak, CEO of Danwood Holding S.A., commented: “We are pleased with today’s approval of the prospectus and plan to launch the public offering without delay. We have ambitious growth plans and are generating excellent financial results and increasing our revenue faster than our competitors. We see excellent prospects for the market of prefabricated houses of timber-frame construction in Europe and its growing importance compared to traditional home building technology. Listing the Company’s shares on the WSE will be the next important milestone in the Group’s development.”

Detailed information about the Offering is found in the Prospectus approved by the KNF, which will be available on the Company’s website at www.danwood-holding.pl

For more information please contact:
Beata Cioczek
M+G
tel. +48 22 416 01 02, +48 508 385 432
e-mail: beata.cioczek@mplusg.com.pl

KEY INFORMATION ABOUT THE COMPANY

Danwood Holding S.A. Group is one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction, which it sells under its own Danwood brand. 

The Group is the leader in the German market in terms of the number of prefabricated turnkey homes sold, with a market share of 10–11%, and the third-largest player in the market in the overall segment of prefabricated homes. The group generates approx. 90% of its revenue from the German market. 

Apart from the German market, the Group is also present in the UK, Austria, Switzerland and Poland. On the Polish market the Group is one of the largest producers of prefabricated homes.

Danwood’s offer is concentrated on turnkey houses in the mid-price segment, in which the Company is an undisputed leader in the German market.

The Group’s product line is one of the most comprehensive and varied on the market, offering a selection of over 130 designs for one- and two-family houses, with an area from 80 m2 to over 300 m2, functionally and stylistically diverse and adapted to local expectations. For customers seeking non-standard solutions, the Group offers modifications of standard designs as well as individual designs. Key competitive advantages of the Group are high quality and affordable prices of houses. In a customer satisfaction survey, Danwood customers also indicated high quality of service. According to the study, 86% of customers had already recommended the Group’s products to others or intended to do so. 

Danwood Holding has a modern production facility in Bielsk Podlaski, with a current production capacity, after expansion in 2015–2016, of 1,500 homes per year, with the possibility of further increases as more houses are delivered. The Group plans to spend PLN 38 million of its own funds on production facility expansion in the next two years. 

The owner of 100% of the shares of Danwood Holding S.A. is Polish Enterprise Fund VII (indirectly via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors, one of the largest private equity firms in Central & Eastern Europe. As of the end of 2017 the Danwood Holding Group employed 1,740 people. 

FINANCIAL RESULTS

Selected financial data of the Group in 2015–2017:

PLN million

2017  Change %
2017/2016
2016  Change %
2016/2015

2015 

Sales revenue

848,3 +26% 672,0 +27%

528,6

EBITDA*

69,5 +25% 55,8 +34%

41,6

EBITDA

61,2 +24% 49,4 +31%

37,6

Net profit *

51,6 +51% 34,1 +26%

27,2

Net profit 

43,4 +54% 28,2 +25%

22,6

* results adjusted with one-off events described in the prospectus 

More information about the Company’s operations at www.danwood-holding.pl 

The information contained herein is not for publication or distribution, directly or indirectly, in the United States of America. The materials do not constitute an offer of securities for sale or the solicitation of an offer to purchase securities, in the United States of America, nor may the securities be offered or sold in the United States of America without registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the Offering in the United States of America or to conduct a public offering of securities in the United States of America.
This document is an advertisement and not an issue prospectus for the purposes of applicable measures implementing EU Directive 2003/71/EC (as amended) (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive and other applicable regulations, the “Prospectus Directive”). The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. An issue prospectus prepared pursuant to the Prospectus Directive will be published, which when approved by the Polish Financial Supervision Authority – the Polish capital markets authority, will be the sole legally binding document containing information on Danwood Holding S.A. (the “Company”) and the offering of the Company’s securities in Poland as well as on their admission and introduction to trading on the regulated market organised by the Warsaw Stock Exchange and which, when published, will be obtained from the website of the Company (http://www.danwood-holding.pl)
It may be unlawful to distribute this document in certain jurisdictions. This document is not for distribution in Canada, Japan or Australia. The information in this document does not constitute an offer of securities for sale in Canada, Japan or Australia.
The information contained herein may constitute forward-looking statements. Such forward-looking statements can be identified by the use of terminology referring to the future, such as e.g. “may”, “will be”, “anticipates”, “is expected”, “should”, “estimates”, “believes”, “think”, “assume”, or, in each case, their negatives or other variations or comparable terms. Forward-looking statements involve known and unknown risk and uncertainty, and other factors that may cause the Company’s and its subsidiaries’ actual results, performances and achievements to differ materially from any of the expected future results. Subject to the binding provisions of law, the Company disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein upon the occurrence of any future events, becoming aware of any new information or the occurrence of any other circumstances.

3 April 2018

DANWOOD HOLDING S.A. CONFIRMS ITS INTENTION TO CONDUCT A PUBLIC OFFERING AND LISTING ON THE WARSAW STOCK EXCHANGE

Danwood Holding S.A. (the “Company” or the “Group”), one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction, confirms its intention to conduct an initial public offering (the “Offering”) and listing of the Company’s shares on the regulated market operated by the Warsaw Stock Exchange (the “WSE”).

The final decision on the schedule of the Offering will depend on the market situation at the time. 

Detailed information about the Offering will be published in the prospectus once approved by the Polish Financial Supervision Authority (“KNF”). 

DETAILS OF THE PLANNED PUBLIC OFFERING:

  • It is anticipated that the Offering will consist exclusively of existing shares. The main offering (the “Main Offering”) is expected to include up to 20,000,000 existing series B ordinary shares, representing up to 50% of the Company’s share capital, belonging to the Selling Shareholder, Polish Enterprise Fund VII (indirectly, via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors. Additionally, the Selling Shareholder may offer up to a further 4,000,000 existing series B ordinary shares representing up to 10% of the Company’s share capital (“Additional Offer Shares”). On the basis of the Prospectus, the Selling Shareholder will offer in total up to 24,000,000 existing series B ordinary shares, representing up to 60% of the Company’s share capital.
  • In light of the Company’s business model generating substantial positive operating cash flows with limited need for capex, the Company does not plan to conduct a capital increase to raise additional funds in the Offering.
  • The Offering will consist of a public offering to individual and institutional investors in Poland, and an offering to selected international institutional investors outside of the United States of America in reliance on Regulation S (“Regulation S”) under the US Securities Act of 1933 (the “US Securities Act”).
  • Any shares in the Company held by the Selling Shareholder will be subject to a lock-up agreement for a period of 360 days from the date of first listing of the Company’s shares on the WSE. The Company will be subject to a lock-up agreement for a period of 360 days in respect of any new issuance of shares. The members of the Company’s Management Board will be subject to a 720-day lock-up period in respect of the shares they take up immediately following the IPO pursuant to an incentive programme.
  • Pekao Investment Banking S.A. will act as Global Coordinator, Joint Bookrunner and Offering Agent. mBank S.A. and Wood & Company Financial Services, a.s. S.A. (Oddział w Polsce) will act as Joint Bookrunners.
  • The Company’s shares will be listed on the regulated (main) market of the WSE. 
  • The conduct of the Offering is dependent on market conditions and and fulfilment of other conditions typically pertaining to international share offerings, including obtaining all necessary approvals from supervisory authorities (including, among other things, approval of the Prospectus by KNF) and registration of the Company’s shares in the Polish National Depository for Securities (Krajowy Depozyt Papierów Wartościowych S.A.), as well as adoption of the relevant corporate decisions by the Selling Shareholder.

Jarosław K. Jurak, CEO of Danwood Holding S.A., commented: “We are constantly increasing the scale of our operations and strengthening our position on the German market, where we already enjoy a market leadership position, and increasing our footprint in other European markets, particularly in the UK. We have a solid backlog of orders of approx. 2,300 homes (as of the end of 2017), securing our revenue targets through the end of the 1st quarter of 2019. In 2017 we signed 1,992 new contracts for house deliveries, a 25% increase over 2016. We are generating excellent financial results and increasing our revenue faster than the competition. We see excellent growth prospects for the prefabricated houses market in Europe and its growing importance compared to traditional home building technology. We operate in the most attractive segment of the market—turnkey prefabricated houses, which, according to market forecasts, is expected to grow in 2017-2022F at a rate of  7% per year in terms of the value on the markets where we operate.”

KEY INFORMATION ABOUT THE COMPANY
Danwood Holding S.A. Group is one of Europe’s leading suppliers of prefabricated turnkey houses of timber-frame construction, which it sells under its own Danwood brand. 

The Group is the leader in the German market in terms of the number of prefabricated turnkey homes sold, with a market share of 10–11%, and the third-largest player in the market in the overall segment of prefabricated homes. The group generates approx. 90% of its revenue from the German market. 

Apart from the German market, the Group is also present in the UK, Austria, Switzerland and Poland. On the Polish market the Group is one of the largest producers of prefabricated homes.  

Danwood’s offer is concentrated on turnkey houses in the mid-price segment, in which the Company is an undisputed leader in the German market.

The Group’s product line is one of the most comprehensive and varied on the market, offering a selection of over 130 designs for one- and two-family houses, with an area from 80 m2 to over 300 m2, functionally and stylistically diverse and adapted to local expectations. For customers seeking non-standard solutions, the Group offers modifications of standard designs as well as individual designs. Key competitive advantages of the Group are high quality and affordable prices of houses. In a customer satisfaction survey, Danwood customers indicated also high quality of service. According to the study, 86% of customers had already recommended the Group’s products to others or intended to do so. 

Danwood Holding has a modern production facility in Bielsk Podlaski, with a current production capacity, after expansion in 2015–2016, of 1,500 homes per year, with the possibility of further increases as more houses are delivered. The Group plans to spend on production facility expansion PLN 38 million of its own funds  in the next two years. 

The owner of 100% of the shares of Danwood Holding S.A. is Polish Enterprise Fund VII (indirectly via DHH S.à r.l., registered in Luxembourg), managed by Enterprise Investors, one of the largest private equity firms in Central & Eastern Europe. As of the end of 2017 the Danwood Holding Group employed 1,740 people. 
 

NUMBER OF HOUSES DELIVERED AND ORDER BACKLOG
The number of houses delivered to customers by the Danwood Holding Group has steadily grown, from 332 in 2008 to 1,215 in 2017. Over 20 years of operations, the Group has delivered over 8,500 homes to customers.

Number of homes delivered by the Group in 2015–2017:

units

2017  2016 

2015 

Number of homes

1.215 995

838

Number of new contracts signed:

units

2017  2016 

2015 

Number of new contracts signed:

1.992

1.594

1.452

As of the end of 2017 the Company’s order backlog stood at approx. 2,300 homes.

FINANCIAL RESULTS

Selected financial data of the Group in 2015–2017:

PLN million

2017  Change %
2017/2016
2016  Change %
2016/2015

2015 

Sales revenue

848,3 +26% 672,0 +27%

528,6

EBITDA*

69,5 +25% 55,8 +34%

41,6

EBITDA

61,2 +24% 49,4 +31%

37,6

Net profit *

51,6 +51% 34,1 +26%

27,2

Net profit 

43,4 +54% 28,2 +25%

22,6

* results adjusted with one-off events described in the prospectus 
 

UNIQUE BUSINESS MODEL
The Group has a unique, cost-effective marketing and distribution model focused on online communication, unlike competitors which mainly rely on model houses located in show house exhibitions. The Group’s show houses are located in residential areas and are owned and financed by the Group’s agents, and thus the Group does not incur costs for their construction and operation.

Danwood houses are constructed on land plots belonging to the Group’s customers, meaning that the Company does not bear the risks connected with selection of the location and purchase of the plot, and does not invest in a land bank. Construction of the houses is financed out of funds paid in by the customers.

Regardless of the country of operations, finishing and fit-out of homes is conducted by the Group’s own crews, which significantly raises the efficiency of operations and the availability and ability to offer houses to a turnkey standard. A key competitive advantage of Danwood is access to qualified workers, enabling the Company to satisfy the growing demand for its homes and to offer customers houses finished to a turnkey standard. Combined with the modern production facility in Bielsk Podlaski, this enables the Group to supply customers with high-quality turnkey homes of diverse design and surface area. 

The Group’s unique marketing and sales model, as well as access to a skilled workforce, translates into a higher rate of growth for Danwood compared to the competition, and a consistent increase in its market share. 

MARKET ENVIRONMENT
The share of prefabricated houses in the overall number of newly delivered one- and two-family houses is steadily growing. The rate of growth in turnkey-standard homes exceeds that for sales of prefabricated homes in general. In the markets where the Group operates, the average annual growth (CAGR) in 2014–2017 for turnkey prefabricated homes was 7.3%, for single-family prefabricated homes 6.1%, and for all single-family homes 5.3%. 

Along with growth in the number of prefabricated homes sold, in particular turnkey units, the unit price of homes is rising each year. This is a product of the expectations of customers, who prefer increasingly higher fit-out standards, as well as rising costs of construction assuming an unchanging fit-out standard. The increase in costs is generated by inflation and also by the rising costs of hiring workers involved in production, installation and fit-out of homes. 

Consequently, it may be anticipated that the rate of growth in the value of sales of turnkey prefabricated homes will significantly exceed the rate of growth in the number of homes sold. The average annual growth (CAGR) in value of sales of turnkey prefabricated homes for the Group’s operating markets was 10.6% in 2014–2017 and is projected to be 7.0% in 2017–2022 (all data from Roland Berger report from January 2018, available at https://‌www.rolandberger.com/en/Publications/pub_pre_fab_houses.html). 

For more information please contact:

Beata Cioczek, M+G
tel. +48 22 416 01 02, +48 508 385 432
e-mail: beata.cioczek@mplusg.com.pl

More information about the Company’s operations at www.danwood-holding.pl 

The information contained herein is not for publication or distribution, directly or indirectly, in the United States of America. The materials do not constitute an offer of securities for sale or the solicitation of an offer to purchase securities, in the United States of America, nor may the securities be offered or sold in the United States of America without registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the Offering in the United States of America or to conduct a public offering of securities in the United States of America.
This document is an advertisement and not an issue prospectus for the purposes of applicable measures implementing EU Directive 2003/71/EC (as amended) (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive and other applicable regulations, the “Prospectus Directive”.) The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. An issue prospectus prepared pursuant to the Prospectus Directive will be published, which when approved by the Polish Financial Supervision Commission – the Polish capital markets authority, will be the sole legally binding document containing information on Danwood Holding  S.A. (the “Company”) and the offering of the Company’s securities in Poland as well as on their admission and introduction to trading on a regulated market organised by the Warsaw Stock Exchange and which, when published, will be obtained from the website of the Company (http://wwwwww.danwood-holding.pl)
It may be unlawful to distribute this document in certain jurisdictions. This document is not for distribution in Canada, Japan or Australia. The information in this document does not constitute an offer of securities for sale in Canada, Japan or Australia.
The information contained herein may constitute forward-looking statements. Such forward-looking statements can be identified by the use of terminology referring to the future, such as e.g. “may”, “will be”, “anticipates”, “is expected”, “should”, “estimates”, “believes”, “think”, “assume”, or, in each case, their negatives or other variations or comparable terms. Forward-looking statements involve known and unknown risk and uncertainty, and other factors that may cause the Company's and its subsidiaries actual results, performances and achievements to differ materially from any of the expected future results. Subject to the binding provisions of law, the Company disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein upon the occurrence of any future events, becoming aware of any new information or the occurrence of any other circumstances

20 February 2018

DANWOOD HOLDING S.A. IN 2017: GROWTH IN SCALE OF OPERATIONS AND FINANCIAL RESULTS AT ALL LEVELS 

In 2017, the Danwood Holding S.A. Group, one of Europe’s leading suppliers of prefabricated turnkey homes of wood construction, which it sells under the Danwood brand, generated normalized EBITDA of PLN 69.8 million (an increase of 25% from 2016) and a normalized net profit of PLN 51.8 million (up 52% year-on-year). The group had sales revenue in 2017 of PLN 848.3 million (an increase of 26%). The group is generating very good financial results on all levels thanks to a steady increase in its scale of operations and strict cost controls. 

The group’s current portfolio of orders (as of 31 December 2017) is about 2,200 homes, which will cover production for about the next 15 months. 

In 2017 the group delivered 1,215 homes to customers, as compared to 995 the year before, an increase of 22% y/y. 

FINANCIAL RESULTS – DETAILS

Selected financial data of the group in 2016–2017:

 

PLN milion

2017 rok 2016 rok

Change %

Sales revenue

848,3 672,0

+26%

EBITDA*

69,8 55,8

+25%

EBITDA

61,2 49,4

+24%

Net profit*

51,8 34,1

+52%

Net profit

43,4 28,2

+54%

* results normalized after excluding one-off events 

Number of homes delivered by the Group in 2015–2017:

units

2017  2016 

2015 

Number of homes

1215 995 838


“We are steadily increasing the scale of our operations and reinforcing our position on the German market, where for five years we have been the leader in the segment of turnkey prefabricated homes,” said Jarosław K. Jurak, CEO of Danwood Holding S.A. “Our portfolio of orders is growing and currently stands at about 2,300 homes. We are also gradually reinforcing our presence on other European markets, particularly in the UK. In 2017 and 2016 we generated double-digit growth in the number of homes we delivered, at 22% and 19% y/y respectively. We have developed our own cost-effective business model, positioning us to grow faster than our German competitors, supplying our customers with high-quality homes and also generating solid results. Another competitive advantage of ours is better access to qualified workers than in the case of German firms, which are strongly impacted by a shortage of skilled labour.”
The CEO added: “We operate in the most promising segment of the market—turnkey prefabricated homes. The importance of prefabricated residential construction is growing in Europe, as it is less labour-intensive than traditional home construction, with higher quality and greater predictability of construction costs and time. We are also observing a growing share of turnkey homes within the total number of prefabricated homes, and in this segment (turnkey homes) we are the leader on the German market. Danwood concentrates on the mid-price range, and in this segment, which is the largest and most attractive, we are also the market leader in Germany.”

UNIQUE BUSINESS MODEL

The group has developed and is expanding a unique, cost-effective model for promotion and reaching customers online, unlike competitors mainly relying on model homes at showrooms. The group’s model homes are located at residential estates and are owned by the group’s agents, and thus the group does not incur costs for their construction and operation.

Modern production support in Bielsk Podlaski, combined with the group’s own installation and fit-out teams, enables the group to supply customers with high-quality turnkey homes of diverse design and surface area. 

The unique business model and access to a qualified workforce translates into achievement of a higher rate of growth in revenues than in the case of key competitors.

Homes are erected on plots belonging to Danwood’s customers, meaning that the company does not bear the risks connected with selection of the location and purchase of the plot, and does not invest in a land bank. Construction of the homes is financed out of funds paid in by the customers.

MARKET ENVIRONMENT

The share of prefabricated homes in the overall number of newly delivered one- and two-family homes is steadily growing. The rate of growth in turnkey-standard homes exceeds that for sales of prefabricated homes in general. On the markets where the group operates, the average annual growth (CAGR) in 2014–2017 for turnkey prefabricated homes was 7.3%, for single-family prefabricated homes 6.1%, and for all single-family homes 5.3%. 

Along with growth in the number of prefabricated homes sold, in particular turnkey units, the unit price of homes is rising each year. This is a product of the expectations of customers, who prefer increasingly higher fit-out standards, as well as rising costs of construction assuming an unchanging fit-out standard. The increase in costs is generated on the one hand by inflation, and on the other hand by the costs of hiring workers involved in production, installation and fit-out of homes, which are rising much faster than inflation. Consequently, it may be anticipated that the rate of growth in the value of sales of prefabricated homes will significantly exceed the rate of growth in the number of homes sold. The average annual growth (CAGR) in value of sales of turnkey prefabricated homes for the group’s operating markets was 10.6% in 2014–2017 and is projected to be 7.0% in 2017–2022 (all data from Roland Berger report from January 2018). 

For more information please contact:

Beata Cioczek
M+G
tel. +48 22 416 01 02, +48 508 385 432
e-mail: beata.cioczek@mplusg.com.pl


ABOUT DANWOOD:

The Danwood Holding S.A. Group is one of Europe’s leading suppliers of prefabricated turnkey homes of wood construction, which it sells under the Danwood brand. 

The group is the leader on the demanding German market in terms of the number of prefabricated turnkey homes sold, with a market share of 10–11%, and the third-largest player on the market in the overall segment of prefabricated homes (with a market share of 4–5%). The group generates about 90% of its revenue on the German market.

Apart from the German market, the group is also present in the UK, Austria, Switzerland and Poland, where it is one of the largest producers of prefabricated homes.

The group’s product line is one of the most comprehensive and varied on the market, offering a range of over 130 designs for one- and two-family homes, with an area from 80 m2 to over 300 m2, functionally and stylistically diverse and adapted to local expectations. For customers seeking non-standard solutions, the group offers individual designs. The competitiveness of the group’s offer results from the high quality and affordable prices of its homes.

Danwood aims its products at the middle-income range, and it is the leader in this price segment among prefabricated homes on the German market.
Danwood has a modern production facility in Bielsk Podlaski, with a current production capacity, after expansion in 2015–2016, of 1,500 homes per year, with the possibility of further increase as more homes are delivered.

The owner of 100% of the shares of Danwood Holding S.A. is Polish Enterprise Fund VII (indirectly via DHH S.à r.l. registered in Luxembourg), represented by Enterprise Investors, one of the largest private equity firms in Central & Eastern Europe.

As of the end of 2017 the Danwood Holding Group employed 1,740 people.

The number of homes delivered to customers by the Danwood Holding Group has steadily grown, from 332 in 2008 to 1,215 in 2017. In its over 20 years of operation the group has delivered over 8,500 homes to customers.

More information about the group’s operations at www.danwood.pl 

The material herein is exclusively of promotional character and does not constitute the basis for the acquisition of the securities of Danwood Holding S.A. (the „Company”). The offering prospectus (the “Prospectus”) prepared in connection with the public offering of the Company’s securities in Poland and admission of the Company’s securities to trading on the Warsaw Stock Exchange (the “WSE”) is the sole legally binding document containing information on the Company and the public offering of the Company’s securities in Poland (the “Offering”). The company will be able to conduct the Offering in Poland after the Prospectus has been approved by the Polish Financial Supervision Authority and its publication. In connection with the Offering in Poland and admission of the Company’s securities to trading on the WSE, the Prospectus will be available on the Company's website.

30 January 2018

DANWOOD HOLDING S.A. FILES PROSPECTUS WITH KNF

Danwood Holding S.A. has filed on 25th January 2018 a prospectus with the Polish Financial Supervision Authority (KNF) in connection with its plans to conduct a public offering of shares in the first half of 2018 and debut on the Warsaw Stock Exchange.

The group is one of Europe’s leading suppliers of prefabricated turnkey homes of wood construction, which it sells under the Danwood brand. In its over 20 years of operation the group has delivered over 8,500 homes to customers.

The public offering will involve only existing shares belonging indirectly to Polish Enterprise Fund VII, LP (via DHH S.à r.l. registered in Luxembourg), managed by Enterprise Investors.


“In recent years we have been growing dynamically, steadily increasing the number of homes delivered,” said Jarosław K. Jurak, CEO of Danwood Holding S.A. “In 2017 we delivered 1,215 homes to customers, 22% more than the year before. We have a full portfolio of orders for 2018 and early 2019. We built our position primarily based on the very attractive German market, where we are the leader in the segment of turnkey prefabricated homes. We are growing our business on the British market, which we also have great hopes for. We operate on the most promising segment of the market. It is estimated that the sales value on the turnkey prefabricated homes market in which we operate will grow at an average annual rate of 7% over 2017–2022. We have determined with our shareholder that the current stage of growth is a good moment to take the company public and list it on the WSE. We plan to target the offering to investors in Poland and abroad. The ultimate decision on conducting the public offering, and the schedule, will depend on the selling shareholder and the market situation.”

Danwood is the leader on the demanding German market in terms of the number of prefabricated turnkey homes sold, with a market share of 10–11%, and the third-largest player on the market in the overall segment of prefabricated homes (with a market share of 4–5%). The group generates about 90% of its revenue on the German market.

Apart from the German market, Danwood is also present in Austria, Switzerland, the UK and Poland, where it is one of the largest producers of prefabricated homes.

The group’s product line is one of the most comprehensive and varied on the market, offering a range of over 130 designs for one- and two-family homes, with an area from 80 m2 to over 300 m2, functionally and stylistically diverse and adapted to local expectations. For customers seeking non-standard solutions, the group offers individual designs. The competitiveness of the group’s offer results from the high quality and affordable prices of its homes.

The group aims its products at the middle-income range, and it is the leader in this price segment among prefabricated homes on the German market. 

Danwood has a modern production facility in Bielsk Podlaski, with a current production capacity, after expansion in 2015–2016, of 1,500 homes per year, with the possibility of further increase as more homes are delivered. 

The owner of 100% of the shares of Danwood Holding S.A. is Polish Enterprise Fund VII (indirectly via DHH S.à r.l. registered in Luxembourg), managed by Enterprise Investors, one of the largest private equity firms in Central & Eastern Europe.

As of the end of 2017 the Danwood Holding Group employed 1,740 people. 

The number of homes delivered to customers by the Danwood Holding Group has steadily grown, from 332 in 2008 to 1,215 in 2017. In its over 20 years of operation the group has delivered over 8,300 homes to customers.

Sales in 2017 exceeded PLN 840 million (an increase of 25% year-on-year). 

For more information please contact:

Magda Kołodziejczyk
M+G
tel. +48 22 416 01 02, +48 501 16 88 07
e-mail: magda.kolodziejczyk@mplusg.com.pl

Paulina Grocka 
M+G
tel. +48 22 416 01 02, +48 514 044 194
e-mail: paulina.grocka@mplusg.com.pl

ADDITIONAL INFORMATION—MARKET ENVIRONMENT OF DANWOOD HOLDING S.A.

The prefabrication trend observed in various fields of life is also visible in home construction. The share of prefabricated homes among the total number of homes built is growing, which is particularly visible in western and northern Europe. 

Factors contributing to this include the great functional and aesthetic diversity of available prefabricated homes, the modern technological solutions used by manufacturers, the incomparably shorter period of execution, and the attractive value to price ratio. Combined with time limitations and lack of technical knowledge on the part of investors, rising labour costs and more and more common shortages of qualified workers, this encourages customers to choose prefabricated solutions. 

Individual markets of the group’s operations differ in the share of prefabricated homes. The German market is key to the group’s business, and there the share of prefabricated homes on the overall market of one- and two-family homes is over 20%. In Austria the share is about 35%, in Switzerland, like Germany, about 20%, and in Poland and the UK below 10%. 

Specific markets differ in the expectations concerning the standard of finishing. The segment of turnkey homes is the most popular on the British and Swiss markets, where over 60% of new prefabricated homes are delivered to this standard. This share is lower on the other markets. In Germany, where about 35% of prefabricated homes are delivered in turnkey condition, this is the fastest-growing segment of single-family construction. 

The rate of growth in turnkey-standard homes exceeds that for sales of prefabricated homes in general. On the markets where the group operates, the average annual growth (CAGR) in 2014–2017 for turnkey prefabricated homes was 7.3%, for single-family prefabricated homes 6.1%, and for all single-family homes 5.3%. 

Along with growth in the number of prefabricated homes sold, in particular turnkey units, the unit price of homes is rising each year. This is a product of the expectations of customers, who prefer increasingly higher fit-out standards, as well as rising costs of construction assuming an unchanging fit-out standard. The increase in costs is generated on the one hand by inflation, and on the other hand by the costs of hiring workers involved in production, installation and fit-out of homes, which are rising much faster than inflation. Consequently, it may be anticipated that the rate of growth in the value of sales of prefabricated homes will significantly exceed the rate of growth in the number of homes sold. The average annual growth (CAGR) in value of sales of turnkey prefabricated homes for the group’s operating markets was 10.6% in 2014–2017 and is projected to be 7.0% in 2017–2022 (all data from Roland Berger report from January 2018).

Another factor contributing positively to the group’s growth prospects is the pro-ecological trend, which is consistent with energy-efficient prefabricated homes of wood construction. In light of the energy parameters of the walls and roofs as well as the ease of equipping the homes with energy-saving installations (photovoltaic panels, solar collectors, heat pumps, recuperators and so on), purchasers of such homes can count on state aid in Poland and Germany.

More information about the group’s operations at www.danwood.pl 

The material herein is exclusively of promotional character and does not constitute the basis for the acquisition of the securities of Danwood Holding S.A. (the „Company”). The offering prospectus (the “Prospectus”) prepared in connection with the public offering of the Company’s securities in Poland and admission of the Company’s securities to trading on the Warsaw Stock Exchange (the “WSE”) is the sole legally binding document containing information on the Company and the public offering of the Company’s securities in Poland (the “Offering”). The company will be able to conduct the Offering in Poland after the Prospectus has been approved by the Polish Financial Supervision Authority and its publication. In connection with the Offering in Poland and admission of the Company’s securities to trading on the WSE, the Prospectus will be available on the Company's website.