Shareholders,
In 2018, advertising sales provided most of Wirtualna Polska Holding’s EBITDA proteins. The year was so fruitful both for us and the entire industry that even our media competitors could feel special.
Despite our long-term strategy concentrating on e-commerce, aware of the strength of our legs, Wirtualna Polska proved we are not slowing down in the media race. Improving ad viewability and introducing the new currency – vCPM allowed us to enter 2018 stronger. All the way from January till December our growth rate outpaced the market.
It was not only the financial indicators that grew last year. Work at the grass roots level of our media product also bore the expected fruit. With 22 million Poles using our services in December, we left all our local competitors far behind. WP Media Advertising Office was once again awarded the title of the leader of the industry. Our journalistic efforts made WP the most often quoted online medium in 2018. And Joanna Pawlak, the newly appointed vice president of the holding responsible for media, received the prestigious Person of the Year award. Achieving profitability of the WP TV was much like removing burrs from the fur of a kicking and bleating sheep, but once again we succeeded.
The media successes will not change our strategy. E-COMMERCE is still spelled with a capital E at WP, as e-commerce dynamics was again the highest in the holding. Nevertheless, 2018 undermined the trustworthiness of all those who predicted the upcoming end of our advertising business.
Did we have any slips from the original plan or the budget? Unavoidably, yes. This time it was due to unexpected weather. The extremely hot summer surprised not only weather forecasters but also the clothing industry. It meant a slower growth rate for us, but also resulted in a financial instability for some of our clients. The weather, along with short-term profit optimization focusing on the pre-arranged purchase of the remaining shares from the previous owners of Domodi, resulted in a mutual decision to part ways two years before the original plan. Also to be able to potentially cooperate in the future. We settled the earn-out agreement, we reached independence and we got on track to maximize the long-term gains. We’ve healed and now we’re awaiting the results.
By the end of 2018, our e-commerce&media two-master happily reached the destination. We’re at the point we’d promised to reach. We still have the giant Google floating ahead of us. Slower and slower, Facebook was drifting away behind us since September – a duel we expected to take many months more. What’s next? Where are we headed in 2019?
After a couple of years of dynamic growth in the autonomous companies within the holding, we are now strengthening the internal cooperation. We do not accept the absurd situation where our companies buy advertising services from one another using Google with its 22% commission fee. We see the possibilities to increase the effectiveness of the holding’s eco-system. Our holding’s IT specialists will deal with the tsunami of data, so that the services we offer to our clients and users are even closer to perfect.
But ships like Wirtualna Polska are not built to be anchored at the port. We reach new fisheries under full sails.
We’ve already made public our new investments in services concentrating on building houses and searching for new vehicles. Will there be next returns truculent? New acquisition boardings? Certainly yes. For ages, Poland has been hungry for and open to digital transformation. Wirtualna Polska is not planning to stay aside. We’re not satisfied with the role of a chronicler. We have the mission, ambition and courage to create the new, digital Poland.
Yours sincerely,
Jacek Świderski
CEO