Shareholders,
Just look east to see, where the subordination of media by authorities can lead to. Conscious of our important social role, in 2021 we focused specifically on people who did not want us to write about them. The persistence and courage of the Wirtualna Polska and several other editorial teams resembled the march of the Roman Testudo formation. Despite the unfriendly environment for independent media we revealed to the public many hidden, reprehensible behaviours. Thus dominating, in the second half of 2021, the most cited media list in Poland.
The economic strength of the entire group, whose EBITDA grew by as much as 38% last year stands behind the WP editorial team’s independence. Our WP Media advertising business has been growing above the market for the past four years, and 2021 was another year with high growth, this time at 30%.
This does not mean that the advertising business has not been undergoing a transformation. For the first time in WP’s history, media houses were no longer the first sales channel (although they will always be an important channel to us). Changes in the structure of the market make us focus our long term strategic media projects on development of brokerage activities - WPartner and self-service panel WP Ads. The 1login project is growing dynamically, increasing conversion rates for our clients (e-commerce stores) by up to 57%. In the coming years, we will be even more willing to make our technology, particularly our advertising systems, available to local competitors. Only together can we build a counterbalance to global platforms.
As an online travel agent operating under the Wakacje.pl brand we support tour operators in their effective battle against Google’s pressure. The level of dependence on paid and free traffic flowing from the Mountain View player exceeds 50% for some tour operators. At the beginning of 2022 we had every reason to be optimistic about the development prospects for the second largest company of our group. Currently, it is difficult to clearly assess the situation, which depends on the further course of the war in Ukraine.
Superauto.pl is the third largest entity of the group and the growth leader in 2021. The biggest challenge ahead for the Chorzów team is to continue the digital transformation of the business while controlling the engagement of working capital needed to secure the supply of cars.
In regard to our smaller companies, which together accounted for less than 10% of group EBITDA in 2021, before February 24, we had a good start of 2022 in Nocowanie.pl which is facing the transformation from a subscription led to a transactional business model. No less are the challenges faced by Domodi.pl and Homebook.pl. Domodi.pl is evolving from its aggregation model to an advertising one via a merger with WP Media and Homebook to a deeper marketplace model. Extradom.pl is facing deregulation changes in construction law and the rising cost of building a house, while Totalmoney.pl is dealing with interest rates hikes. The uncertainty brought by the war in Ukraine in recent weeks has to be taken into account too.
Whenever we see disturbing events beyond our control, when we fly into a dense market fog, we focus on the grassroots work. We accelerate or increase long-term investments in our team, in our products and in our services. It is also a good opportunity to take care of a better future for our planet, through our investments in solar farms and our ESG strategy for the coming years. This is the only approach guaranteeing that a stronger, more socially responsible organization will be built and that we will be prepared for the new market landscape which usually comes soon afterwards.
Best regards,
Jacek Świderski