Inetum made a leap of several years thanks to the acquisition
Inetum made a leap of several years thanks to the acquisition
Interview with Marek Pokorski - CEO of Inetum Polska and Maciej Kubiak - Head of Regional Operations in Inetum Polska
The Polish branch of an international IT group together with the acquired JCommerce will help companies undergo a digital transformation. It is already preparing for what awaits the market in a decade.
We have seen the most active beginning of the year for many years in terms of the number of transactions, and traditionally most of the activity has taken place in the TMT sector (telecommunications, media technologies). The French giant Inetum, which specializes in a digital transformation, has contributed to this. The Polish branch of the company, which employs 27,000 people in 26 countries and has revenues of EUR 2.2 billion, has taken over JCommerce, a Polish company with a similar profile of economic activity.
- We have aimed to accelerate growth and provide more value to customers and more interesting projects to employees. JCommerce has reached the stage where it has been recognized that it has needed an impetus to scale up. Joining forces with organizations that are complementary in terms of competence, geography and culture is hitting the bull’s eye - comments Marek Pokorski, CEO of Inetum Polska.
After the merger the company employs about 750 people and plans to increase this number by several percent by the end of the year. It takes over the whole JCommerce team - except for Piotr Zyguła and Grzegorz Koziołek, who manage the company - and believes that it can fully use its potential.
Piotr Zyguła and Grzegorz Koziołek are two of several shareholders of JCommerce, and the first is also a co-founder. They both have decided to develop towards a different direction.
- We have provided succession in the company and have acquired a large, sound investor, ensuring a continuity of the chosen path of development, so we have made a decision that it is the right time to leave. Together with Grzegorz Koziołek we intend to develop the Power Jobs company, in Poland and abroad. Furthermore, I plan to devote more time to my private life, travel and more competitive sports, in particular running marathons and high altitude climbing - says Piotr Zyguła, former CEO of JCommerce.
Marek Pokorski, CEO of Inetum Polska, believes that the acquisition of JCommerce will enable to implement more innovative projects, strengthening a position of the company in the whole group. He emphasizes that our country is very important for Inetum both because of the local growth and the possibility to serve other prospective markets from here.
New opportunities due to the acquisition
Inetum (formerly Gfi) entered the Polish market in 2016 by acquiring Impaq - a company that had been active for several years on both the Polish and Western European markets.
– ‘We have focused on an organic growth, with great success - within six years we have tripled our turnover, growing by 10-15 percent every year, as well as our employment. We have many innovative projects to our credit,’ says Marek Pokorski.
The Inetum Group has been growing through acquisitions - in Europe and beyond - so since the beginning of 2020, the Polish branch has been trying to make acquisitions on its domestic market. Marek Pokorski highlights that JCommerce has also grown organically so far, but this model is limited by demand and access to employees. The acquisition will accelerate growth by several years.
- Moreover, the larger scale allows us to respond faster to new needs of our business partners and build larger project teams for the most demanding clients - so far, we have sometimes been limited. The acquisition also enables us to increase the effectiveness of projects and cross-selling - explains the head of Inetum Polska.
JCommerce generates half of its revenues from abroad, and Inetum more or less three quarters - it is strong in Switzerland, Great Britain and Germany, it also wants to conquer Scandinavia. Poland is very important for both companies. Inetum has most offices in the north of the country and JCommerce in the south. Together they will find it easier to compete for employees.
- We have a similar portfolio of competencies, but certain elements complement each other. JCommerce has a unique offer in marketing, mobile applications and Apple's infrastructure. We, on the other hand, are strong in nearshoring and have extensive experience in telecommunications and aviation - emphasizes Maciej Kubiak, head of regional operations in Inetum Polska.
- Both companies have a strong focus on supporting clients in terms of the digital transformation, however, JCommerce has mainly provided competent employees, while we have primarily implemented projects - adds Marek Pokorski.
A change for the better
An ownership change is expected to take place at Inetum within a few months. The company announced in January that Mannai Corporation QPSC holding company intends to sell the stake to a group of investors led by Bain Capital Private Equity - a firm with over 1,100 investments and assets under management of around USD 160 bn. The group of new shareholders also includes NB Renaissance, which manages EUR 2.3 bn.
Upon the change in ownership, we do not anticipate an immeasurable change for Inetum Polska. We are positive about the fact that the new owner seems to be much more active than the previous one. Bain Capital is already helping us in making strategic decisions and customizing our offer and business model in terms of the individual markets, comments Marek Pokorski.
Stable growth is of importance
Within the pandemic 2020, JCommerce increased revenue by 8.9 percent, to PLN 71.3 million, operating profit by almost five times, to PLN 7.2 million, and EBITDA by four times, to PLN 8.1 million. It nearly fully met the plan set for 2021: PLN 74.6 million of revenue with PLN 6.8 million of operating profit and PLN 7.7 million of EBITDA.
Inetum Poland, on the other hand, recorded in 2020, for the first time in many years, a decrease in revenue - by about 5 percent, to PLN 84.5 million. It generated PLN 12.6million of operating profit and PLN 18.4 million of EBITDA. In 2021, it wanted to increase sales by at least 10 per cent, which ended up with 19 percent and exceeding PLN 100 million - initially with PLN 17.2 million of operating profit and PLN 27.6 million of EBITDA.
– The year 2020 brought a breakthrough for us, with almost half of our revenue coming from serving the aviation and automotive industries, deeply affected by the pandemic. However, we retained clients, and these came back after the recovery with even greater needs - this translated into success in 2021. This year we are aiming at a revenue growth, taking into account the consolidation with JCommerce, of 18 percent year-on-year. We strive to exceed EUR 50 million. After the results in the first quarter, we conclude that the objective is within our reach - says Marek Pokorski.
He is not a fan of revenue increases on a regular basis, e.g., by half, because it is difficult to build a stable organization and provide employees with appropriate development opportunities. He would like his company to be like a tree - it has strong roots and grows
- In our industry, even a small margin reduction would enable us to increase sales significantly, but we are concentrated on maintaining service quality with a double-digit organic growth. At the same time, we notice that the market is consolidating strongly and we want to be part of this process. When taking a decision, however, we need to be sure that, as in the case of JCommerce, adding one to one will yield more than two. We want to complete the integration by the end of the year, but we are already looking around the market - emphasises Marek Pokorski.
Inetum Polska looks into the future with optimism. Maciej Kubiak believes that the IT industry will continue to develop very quickly for at least another decade, as it allows other companies to significantly increase a scale while reducing costs.
– It is being encouraged by trends accelerated by the pandemic, including the use of artificial intelligence and data analytics. This applies not only to the rapidly growing e-commerce industry, but also to other sectors. Additionally, in the current geopolitical situation, cyber security will become increasingly important, and for this it is necessary to have the highest quality IT services and products – explains Maciej Kubiak.
In the view of Marek Pokorski, the digital transformation has just begun - not only in Poland, but even in the most developed Western countries.
– The pandemic has strongly accelerated changes; thus, we have moved from the phase of ‘playing at transformation’ to the phase of achieving real business results. However, at least until the end of the decade we will still be gathering experience and learning, and only after 2030 will the transformation move into full swing, for which we are already preparing. We want to remain on the wave of innovation – says Marek Pokorski.
The interview was published on 18 May in Puls Biznesu