poland today business review+ no. 023

No. 023 / 17th February 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

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HEALTHCARE British firm McKinlay Development open their first Polish retail park page 11

MANUFACTURING & PROCESSING

Finnish Cargotec to relocate Hiab crane production from Sweden to Poland page 3

BANKING & FINACE

Top lender PKO BP seeks to launch new mortgage banking unit page 4

WSE gets green light to acquire UK-based Aquis Exchange page 5

ENERGY & RESOURCES

Finnish Fortum in talks on EUR 150m CHP project in Płock page 5

EBRD provides EUR 22m loan for large new wind farm in Eastern Poland page 7

TRANSPORT & LOGISTICS Parcel delivery innovators Integer.pl seek financing for US and Asia entry page 8

MEDIA

Swedish Bonnier Group buys Polish book publisher page 9

CONSUMER GOODS & RETAIL

IKEA boosts sales in Poland but faces delay on Lublin project page 10 Polish developer Napollo to expand shopping centre chain page 11

HEALTHCARE

Tar Heel Capital buys diagnostic imaging company KIE page 11

TECHNOLOGY

Belgium's Materialise acquires Polish 3D printing company page 12

IT & TELECOM

Regulator cancels LTE spectrum auction page 13

POLITICS & ECONOMY

Q4 2013 GDP growth below expectations page 14

KEY FIGURES

Up-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 15-17

GM makes Opel Astra and Cascada cars in Gliwice and diesel engines in Tychy. Photo: GM Company

GM to invest EUR 250m in engine plantGM to invest EUR 250m in engine plantGM to invest EUR 250m in engine plantGM to invest EUR 250m in engine plant US carmaker GM has decided to allocate production of a new diesel engine range to the Polish factory in Tychy, which will be expanded at the cost of EUR 250m. The investment is very good news for the company's 3,500 employees in Poland. page 2

Integer.pl seekInteger.pl seekInteger.pl seekInteger.pl seekinginginging new investorsnew investorsnew investorsnew investors After installing 3,000 self-service parcel terminals across 19 countries, Polish postal services company Integer.pl is raising up to EUR 150m to finance rollout in America and Asia. page 8

Registration till 20 March 2014:www.prospectsinpoland.com

During the 3rd logistics conference in Gliwice, representatives of the City, sector experts, investors interested in the region, as well as those who have already put their money in, will discuss how to maximise the potential of the city and its surroundings.

Conference: Hub Silesia – logistics as a driver of the region's economic growth 26 March 2014, hotel Silvia Gold, Gliwice

Organizer Media Patrons

weekly newsletter # 023 / 17th February 2014 / page 2


GM annGM annGM annGM announces new ounces new ounces new ounces new investment in Tychyinvestment in Tychyinvestment in Tychyinvestment in Tychy; ; ; ; pppprice tagrice tagrice tagrice tag ---- EUR 250mEUR 250mEUR 250mEUR 250m

Last year when General Motors acquired full control of the former Isuzu engine plant in Tychy and later merged it into a single business unit with the Opel fac-tory in Gliwice, it seemed only a matter of time before the US carmaker would reveal its true intentions. The big announcement came last week, with GM saying it would launch production of a new generation midsize diesel engine family at the GM Manufacturing Poland plant in Tychy. The related capital expenditure is to reach EUR 250m, making it the largest investment the Tychy plant has seen to-date, and bringing total GM investments in Poland in excess of EUR 1bn. According to GM, production of the all-aluminum 1.6liter four-cylinder diesel engines is to launch in 2017, with maximum annual capacity being envisaged at 200,000 units. The new engine family, which will meet Euro 6 emission standards, is to be installed in a wide range of Opel/Vauxhall models. "The new midsize diesel engine family is an important part of our engine offensive. We appreciate the good quality and high efficiency of our Polish location and look forward to implementing this exciting project,” says Peter Thom, Member of the Management Board, Adam Opel AG and Vice President Manufacturing Eu-rope. Launched in 1999 and located in the Katowice special economic zone, the Tychy engine factory used to be part of Japan's Isuzu Motors. GM acquired a 60% stake in the business back in 2002 and purchased the

outstanding 40% last year. According to the company, the transaction underlined Europe's importance of Europe for GM, as "one of the most competitive car markets in the world with highest customer demands in terms of fuel economy and CO2 standards." With a staff of just over 500, the Tychy factory currently makes the Circle L 1.7l diesel engines. Since its found-ing, the plant has turned out more than 2.5m engines.

The new diesel unit will replace the Circle L 1.7l diesel engines currently made in Tychy (pictured above), which are slowly becoming outdated due to increas-ingly strict EU emissions norms. Photo: GM Company

The new investment will enable the extension and modernization of the plant’s infrastructure. The build-ing's surface area will increase by 30% with the addi-tion of the storage area as well as high tech production and testing lines. This expansion takes the plant's technological competence to the next level and trans-forms the assembly facility into a full production plant, GM said. Construction and installation of the new production equipment will continue until 2016. "The Tychy plant had been awaiting GM's decision on the new engine range with much anticipation because the investment defines the future of this factory. Look-ing at GM's investments in Hungary, one can only

hope that similar decisions will follow in the future," Rafał Orłowski of automotive industry think tank AutomotiveSuppliers.pl tells Poland Today.

Automotive industry in decline Passenger & LCV production in Poland and automotive exports

14

1 5

16

17

18

19

20

2008 2009 2010 2011 2012 *2013

400

500

600

700

800

900

1,000

Automotive expo rts in EURbn, left axis

Vehicle output in '000, r ight axis

Source: Samar, AutomotiveSuppliers.pl *) exports figure projected

GM's main Polish production unit is the Opel plant in Gliwice, which made some 108,500 cars last year, down by some 16,800 units from the 2012 level and well below its total annual capacity of 207,000 units. Opel employs some 3,000 staff in Gliwice and cooper-ates with an estimated 100 suppliers in Poland. The Polish plant manufactures the Astra IV compact in several versions (hatchback, sedan, GTC, and OPC). Recently it has added the new Cascada convertible to the mix, which required investments to the tune of EUR 55m. The Cascada is part of Opel's multibillion euro model offensive introducing 23 new vehicles and 13 new powertrains from 2012 through 2016. In mid-2015 GM seeks to launch production of the next gen-eration Astra V in Gliwice, which will require capital expenditures to the tune of EUR 200m. Despite a slight improvement in automobile sales, Po-land-based car manufacturers turned out 575,117 pas-senger cars and light commercial vehicles last year, marking a 9.6% drop from 2012, according to market


researcher Samar. Although Fiat Auto Poland retained its position as the country's number one carmaker, its share in the total vehicle output dropped by 3.4 pps, down to 51.4%. The Poznań-based Volkswagen plant came second with a 29.7% share (+4.2 pps), whereas Opel Polska's factory in Gliwice saw its share shrink by less than 1 pps, reaching 18.9%.

GM is Poland's No. 3 car manufacturer Car production in Poland by maker in '000 units

0

100

200

300

400

500

600

VW

Opel

Fiat

2009

2010

2011

2012

2013

Source: Samar

Poland's automotive exports totaled EUR 17.7bn in 2012, 8% down on the prior year, according to esti-mates by AutomotiveSuppliers.pl. The largest prod-ucts group were parts and components, representing more than 37.4% of the total figure, followed by pas-sengers cars and LCVs (30.5%) and Diesel engines (12.9%). Besides GM, also Japan's Toyota produces Diesel engines in Poland and their joint exports were worth close to EUR 2.1bn in 2012. "Based on data from the first ten months of 2013 we expect the full-year figure to be slightly better than in 2012. Following a weak beginning of the year, since April 2013 exports have been going up, chiefly thanks

to growth in the key product group – parts and com-ponents, as well as stabilization in vehicle production. In 2014 we are expecting a further single-digit im-provement," Mr. Orłowski tells Poland Today.


Cargotec to relocate Cargotec to relocate Cargotec to relocate Cargotec to relocate Hiab crane production Hiab crane production Hiab crane production Hiab crane production from Sweden to Polandfrom Sweden to Polandfrom Sweden to Polandfrom Sweden to Poland

Finnish crane manufacturer Cargotec is relocating more production from Sweden to Poland in a move to "achieve a long-term sustainable profitability level" amid "tightening competition and increasing pressure for cost efficiency." The company plans to shut down all production in Hudiksvall, Sweden, shifting the unit's focus from manufacturing to product develop-ment and testing, as well as after sales and spare parts support. The Hiab-branded loader cranes will now be built at Cargotec's multi-assembly unit in Stargard Szczecinski (30km east of Szczecin) in Poland. A year ago, when Cargotec began talks with trade un-ions on restructuring, the company was considering keeping some production (a portion of loader cranes as well as recycling and forestry cranes) in Sweden, but the final decision has been to discontinue all man-ufacturing operations, resulting in the number staff at Hudiksvall being halved from 300. Assembly opera-tions in Hudiksvall would cease gradually by the first quarter of 2015. Hiab said that it expected to save ap-proximately EUR 11m annually from the changes with full effect from the year 2016. It also predicted to gen-erate restructuring costs of approximately EUR 14m. "I want to emphasize that this plan is not because of any dissatisfaction with the current assembly work.

The plan is entirely based on the need to improve Hiab's profitability and to reduce our cost structure to a competitive level," says Mika Selänne, Vice Presi-dent, Hiab Supply.

Cargotec will make its Hiab loader cranes at the Polish factory in Stargard Szczeciński. Image: Cargotec/Hiab

Cargotec's multi-assembly unit in Poland started oper-ations in 2010 and it has delivered a wide range of Cargotec equipment to customers globally. Phase one of the investment, started in 2009, cost EUR 35m to complete and the second phase, announced in 2012, came to EUR 20m. In the autumn of 2012, the compa-ny decided to relocate production of reachstackers and empty container handling equipment to Poland and let 130 go in Lidhult in Sweden. The Cargotec plant in Stargard has around 550 employees at the moment, up from 300 little more than a year ago. Asked whether the planned relocation of production from Hudiksvall will result in many new positions and require addi-tional investments, Mr. Selänne replies: "As we are in the start-up mode we expect productivi-ty to increase instead of adding many new staff. How-


ever the expectation is that by the end of 2014, if we proceed according to the plan, we will have roughly 600 employees in Stargard, both for Kalmar and Hiab. We already have enough assembly space in Stargard and we are just starting up a new paint shop and there-fore only some small investments in production and testing equipment will be needed." Cargotec manufactures cargo and load-handling ma-chinery for ships, ports, terminals and local distribu-tion with a portfolio of well-known brands, such as Hiab, Kalmar and MacGregor. The Helsinki-listed company has six factories in Europe, including Stargard, producing reachstackers, heavy forklift trucks, truckmounted forklifts, taillifts, demountables. and loader cranes. Cargotec employs approximately 11,000 people and its revenues totaled EUR 3.2bn in 2013. Hiab, Cargotec's on-road load handling equip-ment division, employs approximately 2,800 staff at the moment. "At the moment, we produce some 3,000 Kalmar and Hiab products per year in Stargard. According to our plans we expect that number to continue to grow sig-nificantly but by how much and how fast depends on market conditions," Mika Selänne tells Poland Today.

BANKING & FINANCE

Top lender Top lender Top lender Top lender PKO BPPKO BPPKO BPPKO BP seeks to launch new seeks to launch new seeks to launch new seeks to launch new mortgage banking unitmortgage banking unitmortgage banking unitmortgage banking unit

Poland"s leading lender, PKO BP has applied to the financial market watchdog KNF for permission to set up its own mortgage bank. The new unit is to be op-erational at the turn of the year with PKO BP hoping to sell up to a third of mortgages through the new sub-

sidiary, which may also take on a part of PKO BP's ex-isting home loan portfolio. "The creation of a new mortgage unit is a part of our 2013-2015 strategy," PKO BP's CEO Zbigniew Jagiełło said in a press release. "It should increase the capital group's safety by eliminating the mismatch in the ma-turities of credits and deposits and opening the door for diversification of long-term financing at lower cost vs. non-secured notes," mortgage bank project head Rafał Kozłowski added. Polish banks have been lobbying over the past months for the introduction of mortgage-backed securities and asset-backed bonds to the Polish market, which would speed up the development of mortgage banking in the country. Commercial banks in Poland keep mortgages on their own books and have no easy legal means of securitizing the exposure. The introduction of mort-gage-covered bonds would allow banks to improve their long-term liquidity, thus meeting new standards set by the Basel Committee, Andrzej Reich of the fi-nancial market watchdog KNF said during the last year's Retail Banking Congress. Although mortgage-backed securities have played a controversial role in the global financial crisis, the bankers as well as many experts, believe they could provide Polish banks with better access to long-term financing and lower borrowing costs, especially for the banks that are heavily involved in mortgage lending. If mortgage-covered bonds financed only 20% of the mortgage portfolio, it would translate into issuance of PLN 50-60bn of such papers, significantly increasing sector stability and releasing capital, bankers say. Polish banks have limited access to long-term financ-ing, which means that in the case of mortgage lending they are forced to finance long-term loans through short-term securities. Creating a market for bonds, in-cluding those backed by assets, could remedy the situ-

ation to some degree. According to earlier reports, the regulator would like to see these instruments traded on the Warsaw bourse's bond market Catalyst after is-suers meet strict regulatory requirements promoting transparency, liquidity and proper guarantees. Back in 2011 the regulator said it was working on the legal framework necessary for such instruments to be in-troduced in Poland, but little has been done since. At the moment only two banks in Poland are licensed to fund their activities via mortgage-backed securities. They are Pekao SA and mBank subsidiaries. A few months ago mBank said it would direct 30% of its re-tail mortgage sales through a mortgage subsidiary in an attempt to double sales as it funds retail mortgages with mortgage-backed bonds. So far, their mortgage unit mBank Hipoteczny has been focused on com-mercial real estate. As of end June 2013, its mortgage covered bonds amounted to PLN 1.85bn and were se-cured by a cover pool of PLN 2.5bn of assets.

DATA BOX: BANKS IN 2013

• According to preliminary figures published by

financial market regulator KNF, Polish banks had a

combined net profit of PLN 15.43bn in 2013, which is

0.4% down from 2012. Their Q4 profits came to PLN

3.6bn, marking a 4.8% increase y/y. At

• Their total net interest income amounted to PLN

34.14bn last year, down 3.8% y/y, with the Q4 2013

result at PLN 9.2bn, up 7.7% y/y.

• Net fee income amounted to PLN 14bnfor the whole

year, down by 2.3% y/y. Net fee income in Q4 alone

measured PLN 3.5bn, and was down 1.7% y/y.

Source: KNF


BANKING & FINANCE

WSE gets green light WSE gets green light WSE gets green light WSE gets green light to acquire UKto acquire UKto acquire UKto acquire UK----basedbasedbasedbased Aquis ExchangeAquis ExchangeAquis ExchangeAquis Exchange

Warsaw Stock Exchange received an approval from the UK Financial Authority to acquire 30% stock in the UK-based multilateral trading facility Aquis Exchange Ltd, which launched at the end of No-vember 2013, enabling trading in top British, French and Dutch securities. Back in August, WSE signed an agreement to acquire 384,025 shares, accounting for a 30% stake in the firm, for GBP 5m (see PT Business Review No. 001 page 3). Established in late 2012, Aquis Exchange seeks to es-tablish a pan-European securities trading platform. Back in August last year the WSE said in a statement that the investment aims at diversifying sources of revenues and strengthening its recognition and inter-national position in the global financial markets. The agreement is in line with WSE's strategic interest in developing a financial hub for Central Europe in War-saw. Any potential plans of Aquis Exchange concern-ing operations in the region will be settled with WSE. The team behind Aquis had earlier built Chi-X Eu-rope into a leading platform of that kind in Europe. Their newest brainchild is hoping to shake up its com-petition by offering a mobile phone-style "pay for what you consume" data fee for traders. Launched in 2007, Chi-X Europe sold to Bats Global Markets in 2011 for USD 365m or approximately 180 times its earnings. "The Polish capital market creates huge opportunities for WSE and is definitely our main focus, however, in a competitive and highly challenging environment,

business diversification at an international level is a must for our company. The recent acquisition of orga-nized commodity markets in Poland and investment in Aquis Exchange are examples of this strategy. Interna-tionalization is also fundamental for the business we run. WSE is already the biggest exchange in the CEE region, with some 65% share in equity turnover (as at June 2013), but we are still looking for new opportuni-ties. Our objective is to do this with brave visionaries such as the Aquis Exchange team," Adam Maciejewski, president and chief executive of Warsaw Stock Ex-change, commented on the deal last year.

WSE capitalization in PLNm, year-end*

0

100

200

300

400

500

600

1997 1999 2001 2003 2005 2007 2009 2011 2013

Source: WSE *) domestic stocks

Created in 1991 to facilitate privatization, WSE lists about 450 companies on its main market, including PKO BP, the largest Polish bank, and PZU, the coun-try's biggest insurer, with a combined value of about PLN 841bn (including PLN 593.5bn worth of domestic stocks) as of end of 2013. The number of companies doubled in the last decade, with 81 new listings in 2007 and 23 last year. The main shareholder in the ex-change is the Polish Treasury, which holds 35% of its shares and a voting majority. The bourse was privat-ized in 2010 through an IPO. Since 15 April 2013 the WSE has been running NYSE Euronext's Universal Trading Platform, which allows Warsaw to accept high-frequency orders but also binds it through a

technological partnership with the global giant. Re-cently WSE has engaged in talks with the CEE Stock Exchange Group (CEESEG), which unites the stock exchanges of Vienna, Budapest, Ljubljana and Prague, regarding potential consolidation.

ENERGY & RESOURCES

Finnish Fortum Finnish Fortum Finnish Fortum Finnish Fortum in in in in talks on EUR 150m talks on EUR 150m talks on EUR 150m talks on EUR 150m CHP project CHP project CHP project CHP project in Płockin Płockin Płockin Płock

Finnish energy company Fortum and the central Polish city of Płock have inked a letter of intent re-garding the potential development of a brand new heat and power plant at the cost of EUR 140-150m. According to Fortum, the new station could be equipped with a multifuel boiler, enabling the co-firing of certain types of municipal solid waste, or fuel derived from it, alongside biomass and coal. Developed in line with the strictest environmental safety standards, Fortum's new heat & power plant would be connected to Płock's district heating net-work and cooperate with the existing energy provid-ers. Fortum said it was embarking on the pre-engineering analyses, based on which a final invest-ment decision will be made. The local authorities will help the investor find a suitable location far from the city center but within Płock city limits. According to Fortum a project of this size normally takes some 2-3 years to complete, following the final go-ahead. "This investment will enable us to increase Płock's en-ergy security and upgrade the municipal waste man-agement system. This is why we can see the space for a new cogeneration plant in Płock, one that would co-operate with the existing local producer."


Fortum has a number of ambitious projects lined up in Poland, but so far its biggest investment has been the PLN 530m heat & power plant it delivered back in 2010 in Częstochowa. The company had plans to build a 400MW power/290MW heat gas-fired plant in Wrocław at an estimated cost of PLN 1.5bn as well as a multi-fuel cogeneration unit in Zabrze. Fortum oper-ates the district heating network in Wrocław, with France's EDF-controlled Kogeneracja being its main supplier. According to Fortum, the Wrocław unit were to generate more electricity than heat, giving the investor more flexibility in determining heat prices, and improving the overall profitability of the project. The new Fortum CHP in Wroclaw were to go online in 2016, but that deadline seems to be getting increas-ingly unrealistic, as investments have been delayed due to regulatory uncertainty on the Polish market making it hard to establish benchmarks for different types of renewable energy projects.

Fortum's Polish investments Fortum's heat & power projects in Poland, est. capex in PLNbn

0.0 0.5 1.0 1.5

Czeestochowa

*Płock

*Zabrze

*Wroclaw

Source: Fortum, PT archives *) planned

A few years ago Fortum closed the acquisition of two cogeneration plants in Zabrze and Bytom. The existing cogeneration plant in Zabrze is to be maintained as a backup power source, but Fortum had sought to de-velop a brand new coal & biomass-fired facility in the city at the cost of some PLN 1bn. The new Zabrze heat & power unit were to rely on biomass to a much great-

er degree than Fortum's Częstochowa unit, where coal represents 70% of all fuel.

So far Fortum's largest greenfield project in Poland has been the Częstochowa CHP, built at the cost of PLN 530m. Photos: Fortum Power & Heat Polska

The Wroclaw-based Fortum Power & Heat Polska op-erates district heating network in Płock, Częstochowa and Upper Silesia and a staff of almost 700 in Poland. In recent years, the company has been divesting small local heat & power plants, in a move to strengthen its focus on its few large metropolitan markets. Besides construction of new heat and power units and expan-sion of its district heating networks, Fortum's strategy for Poland used to include also development of munic-ipal thermal waste treatment plants, but so far the company has failed to achieve much in this respect on the Polish turf. Helsinki-listed Fortum is the world's fourth largest producer of heat. Apart from Finland, Norway, and Sweden, the company has in-vested in Russia, Poland and the Baltics. With 9,900 employees, Fortum turned over EUR 6.1bn in 2013, reaching an operating profit of EUR 1.6bn.

Poland Today talks to: Mikael Lemström, CEO of Fortum Power & Heat Polska

• PT: According to your initial projections, what would be the estimated capacity of the proposed Płock unit? Mikael Lemström: We are still at a very initial stage of the project, so it is premature to estimate the planned capacity. It will be determined at later stages. We as-sume that the unit may be similar in size to our CHP in Klaipeda, opened last year [the Klaipeda unit produces approximately 140 GWh of electricity and 400 GWh of heat annually; ed.]. • PT: When do you expect the feasibility studies for Płock to reach completion?

ML: The first feasibility study has already been done. Next we will enter the pre-engineering phase. Once it is completed, we will make decisions on our next steps. • PT: The press release emphasizes the new plant's complementary role vis-à-vis the existing heat & power suppliers in Płock. How can this cooperation be ensured, considering that Fortum is the network's operator and your new CHP will almost certainly be much more cost effective and environmentally friendly than any existing facilities?


ML: The new CHP will certainly be environmentally friendly, but it will not cover the entire heat demand of Płock. We will need to buy a significant amount from the existing CHP. We have a very good working rela-tionship with the current supplier and we intend to co-operate extensively with them in order to alleviate any possible concerns and ensure continued good co-operation in the future. • PT: When we spoke a year ago, Fortum's invest-ments were on hold due to regulatory uncertainty in Poland. Have the regulatory situation improved enough since then for Fortum to start planning new investments? The renewables law is still in the mak-ing…

ML: There are positive signs that the new RES law will be enacted this year and therefore we look posi-tively upon the future. However, as you say, the final investment decisions by Fortum will depend onthe le-gal environment and the support for renewable energy generation technologies, among other issues. Another positive sign is the new waste law, which is already in place. It has improved opportunities to utilize munici-pal and industrial waste-based fuels in heat and elec-tricity production, thus creating a positive impact on our investment plans in Plock. • PT: What is happening to your Wrocław and Za-brze projects? Are they on hold? When do you hope to begin construction and commission those CHPs?

ML: The projects are not on hold. On the contrary, Wroclaw and Zabrze projects are both still very much under development, but due to uncertainties in the in-vestment environment in Europe and in Poland, we cannot currently give any timetable for the future.

ENERGY & RESORUCES

EBRD provides loan EBRD provides loan EBRD provides loan EBRD provides loan for large new wind for large new wind for large new wind for large new wind farm in Eastern Polandfarm in Eastern Polandfarm in Eastern Polandfarm in Eastern Poland

The European Bank for Reconstruction and Develop-ment (EBRD) has agreed to co-finance a 37.5MW wind farm project in Orla, eastern Poland, developed by a German consortium including turbine maker Nordex. The loan of up to PLN 94m (EUR 22m) will be used to finance the construction and operation of phase one of the project, with an installed capacity of 22.5MW. "The project is of special significance. Power genera-tion in Poland remains dominated by coal and lignite-fired plants and the country is lagging behind its green energy targets agreed with the European Commission. To reach the 20% share of renewable energy in the to-tal energy mix in 2021 as mandated by the govern-ment, a major push to reinvigorate the renewables sec-tor is required," EBRD said in a statement. "Despite general consensus on wind energy as one of the viable green alternatives, the expansion of the sector was se-verely affected by regulatory uncertainty. The EBRD's loan is intended to overcome the gap in available funds by providing financing and comfort to private inves-tors." At full capacity, the wind farm will consist of 15 N100 2.5 MW Nordex turbines which will be able to gener-ate a maximum of 37.5 MW and will save approxi-mately 57,400 tons of CO2 a year. Construction of the first phase is expected to be finalized in December 2014, while the final phase is scheduled for completion in mid-2015. The entire project is to cost some PLN 269m (EUR 64m).

The small village of Orla (50km south of Białystok) gained media attention a few years ago after Swedspan, part of Sweden's furniture, retail, and property giant IKEA, had chosen to build a factory of HDF furniture boards and a sawmill there at the cost of EUR 140m. The factory is operational and continues to grow and the wind farms are to bring about further improvements to the local infrastructure. "We are proud to support the development of the wind farm in Orla as this project is fully in line with our efforts to strengthen green energy in Poland. We have a strong track-record in the sector and with this project will be able to build on our experience and ex-pertise," commented Grzegorz Zielinski, EBRD Re-newables Coordinator.

Poland's installed wind energy capacity in MW

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: URE

To date the EBRD has invested more than EUR 6.3bn in all sectors of the Polish economy with a combined project value exceeding EUR 33bn. The London-based institution continues to support the renewable energy sector with over EUR 1.1bn invested in nearly 50 pro-jects across its region. In December, EBRD agreed to provide PLN 469m (EUR 112m) in two long-term debt facilities to Portugal's EDP Renewables (EDPR) for the latter's Polish wind farm developments with a


combined capacity of 130MW. According to EDPR, contracting long-term debt in local currency at com-petitive prices enabled the company to mitigate the re-financing risk and to reduce the foreign exchange risk by having a natural hedge between revenues and costs. Poland's installed renewable energy capacity came to 5,509 MW as of end of 2013 , up by over 1,093 MW compared to end-2012, according to energy market regulator URE. Wind power capacity increased the most, reaching 3,390 MW as of December, followed by hydro-power capacity amounting to 970 MW and bi-omass-fueled plants with 987 MW, the data showed. Renewable energy currently represents slightly over 10% of Poland's energy supply. The country seems to be way on its way to reach its 15% target for the share of renewable sources in gross final consumption of en-ergy in 2020.

IN BRIEF: Slovak energy firm GGE, which had been hoping to

raise close to PLN 190m from an initial public offering

on the Warsaw Stock Exchange (see PT Business Re-

view+ No. 021 page 6), decided to suspend its IPO due

to unfavorable market conditions, the firm said in a

statement. According to the issue prospectus, pub-

lished at the end of January, the IPO were to take place

on 21st March. GGE, subsidiary of Grafobal Group, set

the maximum price of up to 5m new shares at PLN 38.

Natural gas firm PGNiG has discovered a deposit of

high-methane natural gas estimated at several billion

cb.m and expects to launch production from the depos-

it in H2 2015, the company announced last week. The

new deposit was discovered in the Zalesie-Jodłówka-

Skopów license in Podkarpackie region, southeastern

Poland. PGNiG expects gas output from the deposit to

reach 100,000 cubic meters daily in the first year of ex-

traction.

TRANSPORT & LOGISTICS

Parcel delivery Parcel delivery Parcel delivery Parcel delivery innovators innovators innovators innovators Integer.plInteger.plInteger.plInteger.pl seek seek seek seek financing forfinancing forfinancing forfinancing for US & US & US & US & Asia entry Asia entry Asia entry Asia entry

Polish postal services company Integer.pl is deter-mined to speed up the global expansion of its innova-tive parcel locker concept InPost. With 3,000 self-service parcel dispatch and collection terminals in op-eration across 19 countries, the Kraków-based busi-ness is now seeking financing for phase two of its global rollout. "Our goal is to be present in both Americas and Asia over the coming 3-4 years. In the US alone, we plan to launch 10,000 parcel lockers by the end of 2016. We are currently in the process of securing a further 6,000 locations for our terminals," Rafał Brzóska, founder and CEO of Integer.pl tells Poland Today. "The biggest challenge for us is time, as we want to be the pioneer in many markets, which is why we are pushing for rap-id rollout." The global expansion, which has taken Integer.pl's parcel lockers to eight CEE markets as well as the UK, Iceland, Ireland, Saudi Arabia, Latin America, and Australia, has been partially financed by PineBridge Investments, the global multi-asset class investment manager. Two years ago the two companies agreed to invest EUR 108m in the easyPack venture that drives the international expansion, with PineBridge contrib-uting EUR 50m, and the Warsaw-listed Integer.pl – the outstanding EUR 58m. But the original funding is beginning to run dry, especially since by 2016 the total investment outlays may reach EUR 1bn.

"Last year alone our capex came to PLN 300m and this year we are projecting a similar amount," CEO Rafał Brzóska tells Poland Today. "This month we are start-ing a formal search for a second private equity partner for easyPack. However, since we do not want to dilute our shareholding and lose majority ownership, Inte-ger.pl will also take part in the equity boost. Our tar-gets are fully dependent on the kind of financing we manage to attract. I expect the total figure to be somewhere between EUR 50-150m. If we raise less than EUR 100m, our focus will be on Europe and entry to the USA. Should we get EUR 100-150m, Canada, Brazil and China will be added to the mix."

One of Integer.pl's, most recent inventions (devel-oped with the ATM technology giant NCR) are modular terminals that enable collection and dis-patch of parcels, letters, and cash. Image: Integer.pl

In recent weeks the Poles have won a tender orga-nized by "4-72", a parcel delivery arm of Colombia's national post operator. Initially, Integer.pl is to install eight of its trademark self-service parcel dispatch and collection terminals in Colombia, but the full-year tar-get is 100 locations. The Polish firm first appeared in South America back in 2011, when it began cooperat-ing with the Chilean national operator Correos de Chile. Integer.pl has since installed several dozen par-cel terminals in the country, and customers embraced


the product. According to a survey by Correos de Chile, as many as 99% of users said they would use the terminals again, with 97% saying they would recom-mend them to others.

"We are really determined to speed up our global expan-sion," says Rafał Brzóska, CEO of Integer.pl

"South America's e-commerce has been growing at a very fast rate. In Colombia alone it has expanded by an impressive 41% over the past five years - the world's 4th fastest growth, which means that the demand for convenient and fast delivery of goods is enormous there. Our terminals are unique in the sense that they guarantee 24/7 availability in the best possible loca-tions. We are certain that following the planned ex-pansion of our network in that region of the world, InPost parcel lockers will become the basic tool used by e-retailers in South America," says Rafał Brzóska. The company has also sold 10 terminals to Aeropost - the leading e-commerce operator from Central Ameri-ca and the Caribbean Region, which will install them in the coming months in Costa Rica, El Salvador and Guatemala. Overall, the Central American operator seeks to launch more than 100 parcel lockers, across 30 countries and islands. Meanwhile, expansion in Europe continues as planned. At the end of 2013 Integer.pl won a tender organized by Íslandspóstur, Iceland's national postal

services operator. The first batch of 18 parcel lockers is to be delivered to Iceland by the end of this year.

Integer.pl Group key figures

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010 2011 2012

0

8

16

24

32

40

48

Turnover in PLNm, left axis

Net pro fit in PLNm, right axis

Source: Integer.pl

"We are really determined to speed up our interna-tional growth. We have just recently signed contracts with top e-retailers in Norway, France, Italy, and Spain, and we are starting to install our terminals in those markets. Our long-term goal is to have 1,000 ma-chines in Italy, 1,500 in France, 800 in Spain and at least 200 in Norway. At the same time we continue to expand our network in the UK, where we already have more than 800 locations." Integer.pl Group was founded in 1999 and today con-sists of 10 companies specializing in the distribution of addressed and non-addressed mailing and direct mar-keting materials. In 2006 Integer.pl started addressed mail handling and delivery services through its InPost subsidiary which is currently the largest, independent postal operator in Poland. The company went public in 2007 and launched the parcel terminal locker busi-ness two years later. In the first three quarters of 2013 Integer.pl net-earned PLN 17.3m (down from PLN 49.7m in Q1-Q3 2012) on revenues of PLN 239.7m (PLN 199.5m). The respective full year figures for 2012 came to PLN 47.2m and PLN 281.9m.

MEDIA

Swedish Bonnier buys Swedish Bonnier buys Swedish Bonnier buys Swedish Bonnier buys Polish book publisher Polish book publisher Polish book publisher Polish book publisher

Bonnier Books New Markets, a part of Swedish media giant Bonnier, has entered Poland's book pub-lishing sector by inking a joint venture with a Warsaw-based publisher Marginesy. Marginesy was founded in 2008 by Hanna Mirska-Grudzińska. Since its start, the company has published a considerable number of bestsellers, by authors such as Jaume Cabré and biographies of Polish celebrities, which has enabled the publisher to grow rapidly. Last year Marginesy turned over PLN 4m and posted a net profit. The company publishes an average of 20 titles a year, with estimated sales of 10,000 copies per title. The former owners, Hanna Mirska-Grudzińska and Krzysztof Grudziński, will both stay in the company as shareholders as well as part of the management board. Bonnier, which has been in the book publishing busi-ness publishing since 1804, has acquired a 51% stake in Marginesy. The Swedes have ambitious plans with re-gard to Poland, aiming to introduce more bestsellers, explore the e-book segment, launch new brands and carry out further acquisitions Bonnier Books New Markets was launched last year in Germany with a focus on strategic acquisitions and development of new business areas within the book segment, primarily in Europe with the exception of the Nordic countries, where Bonnier already has a strong presence. So far, Bonnier's key business in Po-land has been the business daily Puls Biznesu.


"We are convinced that joining the strengths and ca-pabilities of old owners and new shareholders will al-low us to continue the dynamic development of the Marginesy publishing house," says Krzysztof Grudziński, President of Marginesy. "At the same time, we believe that the mix of local experience with inter-national publishing know-how will open new possibil-ities of growth to Marginesy."

RETAIL

IKEA boosts sales IKEA boosts sales IKEA boosts sales IKEA boosts sales in in in in Poland Poland Poland Poland but but but but faces dfaces dfaces dfaces delay elay elay elay on Lublin projecton Lublin projecton Lublin projecton Lublin project

Despite economic slowdown in the country, the Polish stores of Swedish flat pack furniture giant IKEA wel-comed 20m customers and posted robust results in 2013. "Last year and this year, Poland has been within the top three growth countries for IKEA globally," IKEA Poland Retail Manager & Managing Director Evelyn Higler tells Poland Today. "Economic conditions were tough in the beginning of 2013 but the upturn was vis-ible for the rest of the year. IKEA achieved significant growth in Poland in fiscal year 2013 [September 2012 – August 2013; ed.] and the growth pace was similar to previous years. Our sales grew by 9% and amounted to PLN 2bn," she says. Globally, IKEA's sales revenues and net earnings grew by 3.1%, reaching EUR 27.9bn and EUR 3.3bn respec-tively. Including rental income from retail properties owned by the group, the turnover came to EUR 28.5bn (+3.2%).

IKEA Retail Polska, which operates eight stores in Po-land, was hoping to launch its 9th location this year in Lublin, but the project is yet to get underway due to delaying bureaucratic procedures. According to plans, the two-story retail cluster is to total approximately 80,000 sq.m GLA, and will encompass an IKEA store, shoping gallery (49,000 sq.m), hypermarket (11,000 sq.m), food court, and 3,000 parking spaces. "In Lublin we are still waiting for final approval of all road construction permits. Afterwards, we will update our work schedule and inform about further develop-ments accordingly," says Evelyn Higler.

"Poland is a priority market for IKEA," says Evelyn Higler, Retail Manager and Managing Director at IKEA Poland

A few years ago the company acquired an investment site in Opole and rumors circulated about possible store openings in Szczecin and Rzeszów. Asked about other potential projects in their pipeline, Ms. Higler refrains from disclosing any details. "IKEA is interest-ed in further expansion in Poland and becoming avail-able to more people. Poland is a priority market for IKEA. We will inform about any new developments in due time," she replies. As for IKEA's retail property arm Inter IKEA Center Group (IICG), tenants at its eight Polish retail parks

reported a 4% y/y increase in sales, while footfall grew by 3%. IICG's biggest investment last year was the ex-pansion of the Franowo retail park, which opened in September 2013. The company added 14,000 sq.m of retail space to the park, expanding its total area to 80,000 sq.m. This year, their focus will be on Wrocław, where IICG will begin construction of phase two of Bielany retail park. The extension will bring the project's total total size to 145,000 sq.m of commercial space with 200 retail and service units. IICG expects to complete the work in 2015.

Anchored by an IKEA store, the new centre in Lublin were to open in Q4 2014 with a GLA of 80,000 sq.m, but now 2015 seems like a more realistic deadline. Image: Inter IKEA Center Group

As part of the IKEA group, IICG Poland is responsible for preparation, implementation and management of commercial property projects. In Poland, the group owns eight shopping centers, which are situated in Gdańsk, Łódź, Poznań, Wrocław, Katowice and War-saw (three centers: Janki, Targówek and Wola Park). The latter is IICG first acquisition in Poland and also the only IICG project in the country that is not an-chored by an IKEA store. The Swedes are hoping to begin expanding Wola Park this year, seeking to trans-form it into Warsaw's second largest shopping center. The plan is to add 17,565 sq.m of GLA to the project, and IICG has signed up DIY retailer Castorama to fill 10,000 sq.m of it.


"As part of our long term plan for Poland we are con-sidering further acquisitions of existing shopping cen-ters. As we intend to stay and grow on the Polish mar-ket, they should be well established shopping centers in good locations, with good sustainable offers. At this stage we are only looking at a limited number of larger regional capitals, where we believe it is important for us to be present. On the development side, besides the aforementioned projects, such as Franowo, we will continue with more extensions in all our existing retail centers as well as keep working on increasing com-mercial and non-commercial offers in these locations. Regarding new developments, we are looking at 4-5 new locations around Poland and this includes new enclosed shopping centers as well as retail parks with strip-malls and big box tenants," Mikael Andersson, Managing Director of Inter IKEA Center Group told Poland Today in September 2013.

RETAIL PROPERTIES

Polish developer Polish developer Polish developer Polish developer Napollo expands Napollo expands Napollo expands Napollo expands shopping centre chainshopping centre chainshopping centre chainshopping centre chain

Polish developer Napollo, formerly known as Nap Invest Group, is developing a chain of neighborhood shopping centers in medium-sized Polish towns under the "Centrum Zakupów" brand. The company has just unveiled details of two projects in Silesia, in the towns of Żory and Tarnowskie Góry, both of which are to open in 2016. "This February we changed our name to Napollo in a move to emphasize our new, ambitious strategy that prioritizes expansion in the retail property segment. Our goal for 2014 is to secure a land bank that would enable the company to deliver some 100,000 sq.m of

GLA, and since the beginning of the year we have al-ready acquired a quarter of our target volume. We are focusing on locations with high retail potential in cit-ies of less than 100,000 inhabitants as well as large residential areas." " Napollo's Agnieszka Podbielska tells Poland Today.

Centrum Zakupów Świdnik is one of several retail Project Napollo seeks to complete over the coming years. Image: Napollo

With a GLA of 15,000 sq.m, Centrum Zakupów Żory will offer up to 50 retail units ranging from 30 sq.m to 1,500 sq.m in size as well as 350 parking spaces. Situ-ated some 40m south-west of Katowice, Żory has a population of 60,000 people. A smaller project (8,200 sq.m GLA, 120 parking spaces) is to be opened in Tarnowskie Góry, a town of 60,000 located just north of Katowice. Napollo's Silesian pipeline includes also a small strip-mall (2,800 sq.m GLA) in Czerwionka-Leszczyny (30km south-west of Katowice). Besides the Silesian projects, Napollo is to break ground this year on Centrum Zakupów Świdnik, which is to reach completion in 2015 with a GLA of 7,200 sq.m. The same year, a project of similar size (6,500 sq.m) is to be launched in Sochaczew, some 50km west of Warsaw. Their long-term strategy is to develop retail properties of up to 20,000 sq.m GLA in the vicinity of large cities.

"Our Centrum Zakupów concept encompasses neigh-borhood shopping plazas located in densely populated residential areas as well as city centre retail galleries, like our projects in Żory, Tarnowskie Góry, and Sochaczew. Besides their basic retail function, covered by fashion, electronics, or food outlets, they serve as convenience and community centers, offering crucial everyday services and creating local meeting places. Many clients visit such centers regularly, several times a week, without the need to commute by car. Conven-ient locations are therefore key for such projects," says Agnieszka Podbielska. Nap Invest has been operating since 2007. Its past de-velopments include Centrum Zakupów Zgierz (3,500 sq.m)), Centrum Zakupów Ząbki (3,000 sq.m), both opened in 20111, and Galeria Renova Warszawa (13,000 sq.m), re-launched in November last year as a modernized version of the former Galeria Rembielińska in Warsaw's Targówek district. Besides retail developments, Napollo is active also in the resi-dential sector, with two projects under construction in Lublin and two planned in Warsaw.

HEALTHCARE

Tar Heel Capital buys Tar Heel Capital buys Tar Heel Capital buys Tar Heel Capital buys diagnostic imaging diagnostic imaging diagnostic imaging diagnostic imaging company KIEcompany KIEcompany KIEcompany KIE

Polish private equity firm Tar Heel Capital has ac-quired an 85% stake in medical diagnostic imaging firm KIE. The company operates 12 computed tomog-raphy and magnetic resonance facilities – under the TOMMA brand – and offers maintenance and teleradiology services to nearly 40 other centers.


Over the past 12 months KIE has invested in excess of PLN 15m in the opening of four new facilities and de-velopment of proprietary medical IT solutions. Ac-cording to Tar Heel Capital, the exceptional expertise of KIE's team in medical equipment and IT solutions was one of the key drivers behind their investment. "Last year KIE carried out more than 32,000 tests at its proprietary centers, and an even bigger number of checkups was performed by external clients using KIE's equipment. With five new proprietary centers in its network the company is bound to see a significant growth this year," Andrzej Różycki, Partner at Tar Heel Capital, tells Poland Today. "We believe that our experience in financing growth and acquisitions will help speed up KIE's organic growth and play an active role in the consolidation of this market segment," says Mr. Różycki. "We are ready to invest a further tens of millions PLN into the pro-ject, and additionally support its growth also with credit and leasing. Our goal is to boost the number of tests carried out at existing centers as well as opening new locations. As far as acquisitions are concerned, we are interested in all good diagnostic centers, both in-dependent ones as well as companies much larger than KIE. Our investment horizon for this project is 5-8 years." The investment was made via the firm’s Tar Heel Cap-ital II FIZAN vehicle, with KIE founder Karol Konieczny remaining a minority shareholder. KIE is the second investment from the fund which raised EUR 50m in 2013 dedicated to investments in Polish SMEs. Last year the fund acquired Polish industrial hydraulic systems specialist Rockfin. Founded in 2008, Tar Heel Capital had previously invested in Euroad, Radpol and Apreo Logistics, while the Fund I portfolio currently includes LiveChat, Greenbet, Ekobet-Siekierki and FAM GK.

According to market research companies PMR and Dr. Kalliwoda Research, Poland's medical imaging market, which remains relatively fragmented, is likely to see more mergers and acquisitions in the near future with a number of private equity firms and strategic inves-tors seeking to secure a solid foothold in the sector. Last year saw Lux Med, the Polish arm of UK healthcare giant Bupa, acquire Toruń-based Tomograf as well as the imaging units of Szpital Swissmed in Gdańsk and CM Św. Jerzego in Poznań. Asked whether the big healthcare players do not pose a threat to independent operators, Mr. Różycki replies: "The economy has always evolved towards specializa-tion. The only reason why this trend could be reversed is legislation that favors one business model over an-other. I strongly believe that companies that specialize in a given field are more effective than universal pro-viders. Which does not mean both types of firms can-not share the same building." PMR estimated the value of Poland's diagnostic imag-ing market (measured as the value of diagnostic equipment sold) at PLN 1bn in 2012, following a few years of double digit growth. The sector has seen some large-scale investments over the past decade, largely thanks to EU funding.

TECHNOLOGY

Belgium's Materialise Belgium's Materialise Belgium's Materialise Belgium's Materialise acquires Polish 3D acquires Polish 3D acquires Polish 3D acquires Polish 3D printing companyprinting companyprinting companyprinting company

Belgian 3D printing company Materialise has ac-quired e-Prototypy, Poland's leading provider of rap-id prototypes and 3D printing. e-Prototypy has been

active in the Polish market since 2008 and has grown to become the market leader in the region. e-Prototypy offers a broad range of 3D printing solutions, with a specialization in the production of laser sintered com-ponents, and has invested in scanning and reverse en-gineering services in recent years. The Leuven-based Materialise has been an active player in the global additive manufacturing (popularly known as 3D printing) market since the early 1990s. Besides Europe's largest 3D printing capacity, Materi-alise also provides software solutions for 3D printing. The Belgian firm is a major provider of prototyping and simulation services for the medical and industrial markets. Its clients include automotive, consumer electronics, and consumables companies, hospitals, re-search institutes, and clinicians, as well as to consum-ers interested in bringing their own unique creations to life through the company's online suite. Materialise has been a market leader in the Czech market, through its subsidiary in Usti Nad Labem, since 2004. "With the acquisition of e-Prototypy, Materialise shows its commitment to further invest in the east-European market," says Bart Van Der Schueren, Vice President Industrial Production, Materialise. "Thanks to the acquisition, Polish customers will be gaining ac-cess to the vast production capacity of Materialise. Furthermore, current Materialise customers will ben-efit from access to the scanning and reverse engineer-ing services of e-Prototypy." e-Prototypy is Poland's first comprehensive prototype center specializing in the production of fully function-al prototypes using 3D printing and 3D scanning and in the direct production of small series (Direct Digital Manufacturing) . Additionally, the company provides 3D scanning services - color deviation maps, reverse engineering, dimensional control of the physical detail with documentation. Dimensional scanning allows for the creation of a digital model using a physical object


(Reverse Engineering), which e-Prototypy can then edit or change as well as make copies using incremen-tal technologies.

Poland Today talks to: Bart Van der Schueren, Vice President Industrial Production at Materialise

• PT: Who have been the main clients of e-Prototypy so far and will the target group change following the ac-quisition by Materialise? Bart Van der Schueren: e-Prototypy has been working primarily for industrial customers in different sectors like automotive, consumer goods and aerospace. Since mid-2013 the company has also targeted creative pro-fessionals through its web platform www.personalise.pl. These are also the clients that al-so Materialise is working with, and therefore the tar-get group will not change, on the contrary, Materialise will offer its full product portfolio to these Polish cus-tomers. • PT: e-Prototypy's scanning and reverse engineering services – are these capabilities new to Materialise? BS: These capabilities are not new to Materialise. But until now we haven't been able to exploit these ser-vices in full. At the moment we use scanning technol-ogies primarily for internal quality control purposes. Since about 2 years ago we have been offering engi-

neering services to our customers. Through these en-gineering services we aim to help our customers who are developing products that will be produced in low volumes. If these products are produced by 3D Print-ing technologies they need dedicated engineering which takes knowledge of those printing technologies into account. Scanning and reverse engineering are important tools in these engineering services. So, the acquisition of e-Prototypy offers us the chance to de-velop this activity further. • PT: What are your plans with regard to the Polish business? What role will it play within Materialise? BS: During the next year we will work on the integra-tion of the Polish services into the broad portfolio of Materialise services and in this period we will develop the strategy for further growth. The activities of e-Prototypy fit in the industrial production segment of Materialise. This segment is one of the three segments in which Materialise is active. Although e-Prototypy is relatively small compared to Materialise, it has devel-oped a significant market share in Poland. As such the Polish branch of Materialise has a high importance in the group.

IT & TELECOM

Regulator cancels LTE Regulator cancels LTE Regulator cancels LTE Regulator cancels LTE spectrum auctionspectrum auctionspectrum auctionspectrum auction

Poland's telecommunications watchdog UKE has can-celled the much-awaited albeit controversial LTE fre-quency auction last week citing legal uncertainty. UKE boss Magdalena Gaj said the regulator wanted to elim-inate any doubt about the legality of the proceedings that had been the target of heavy criticism by one of Poland's four leading mobile operators.

The auction notice was published on 30 December 2013. The original deadline for the submission of pre-liminary bids was 13 February. Through the planned sale of 800 MHz and 2.6 GHz bands, UKE sought to support the further development of LTE networks, which have already started in Poland in the 1.8 GHz band. The cancelled auction will included five lots or 50 MHz total in the 800 MHz band and 14 lots or 140 MHz total in the 2.6 GHz band. In accordance with the regulations, operators who paid for the auction documentation could ask the UKE president to clarify details the auction, no later than 21 days before the deadline for submitting offers. Alt-hough UKE published the requested clarification be-fore the 6th February deadline, the text was temporar-ily inaccessible on that day due to technical problems, which prompted the regulator to extend the deadline for initial offers to 14 February. This, in turn, was not to everyone's liking. Polish mobile operator Polkomtel, which has been critical of the auction from the start, said UKE's actions lacked transparency.

Polkomtel (Plus) is No. 4 player Mobile operators in Poland, market shares as of Q2'13*

Other

2%Play18%

Plus25%

T-Mobile29%

Orange27%

Source: Telepolis *) based on SIM card numbers


According to Ms. Gaj, although the auction process and all accompanying documentation had been properly prepared in accordance with the law, as a regulatory authority, UKE had to ensure that all mar-ket participants were given equal treatment and there-fore decided to revoke the auction. This decision means that the procedure will have to be repeated, with UKE already working on a new schedule. In ac-cordance with the law, the first step in this process will be an announcement of the auction documenta-tion for consultation with stakeholders. This notice will be published in the next few days. According to Polkomtel, the terms of the original ten-der favored its competitors Orange Poland and T-Mobile. In a recent letter to UKE, Polkomtel's owner Zygmunt Solorz-Żak argued that certain provisions of the LTE auction (mainly the spectrum cap for the 800 and 900 MHz bands) drastically reduced Polkomtel's chances vis-à-vis its rivals. In his opinion, that spec-trum cap should apply only to the 800 MHz band, and not the 900 MHz band, which supports both 2G and 3G technology, while the 800 MHz band is intended for LTE only. Moreover, the spectrum cap should ap-ply to any form of shared use of frequencies, Solorz said. Otherwise, the ban on holding two blocks in the 800 MHz band would apply only to one mobile opera-tor in Poland - Polkomtel. Polkomtel demanded UKE cancels the auction and holds a new consultation once T-Mobile and Orange provide proper disclosure on their shared use of spec-trum in the 900 and 1,800 MHz bands. Polkomtel said their infrastructure-sharing joint venture should be investigated, as it is distorting competition. The Polish operator warned it would take the issue to the compe-tition watchdog UOKiK as well as relevant govern-ment and parliamentary bodies.

POLITICS & ECONOMY

Q4 2013 GDP growth Q4 2013 GDP growth Q4 2013 GDP growth Q4 2013 GDP growth below expectationsbelow expectationsbelow expectationsbelow expectations

Poland's economy accelerated for a third quarter, though less quickly than economists estimated, ac-cording to Friday's flash estimate from the central sta-tistical office GUS. Gross domestic product, unadjust-ed for seasonal effects, rose 2.7 % y/y in Q4 2013 after a 1.9% gain in the previous three months. That’s below the 2.9% median estimate of 34 economists surveyed by Bloomberg. Seasonally adjusted GDP grew 0.5% from the previous quarter, slowed from 0.7% in Q3.

Gross Domestic Product (y/y)

0%

1%

2%

3%

4%

5%

6%

Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Q4'12 Q2'13 Q4'13

Seasonally unadjusted Seasonally adjusted

Source: GUS

"The result was weaker than expected after the stronger-than-expected 2013 flash GDP published in late January boosted Q4 growth expectations. The ris-ing pace of growth through 2013 bodes well for 2014 and we see upside risk to our 2014 GDP growth esti-mate of 3.0% y-o-y compared to 1.6% in 2013," com-mented Agata Urbańska, CEE Chief Economist at HSBC.

DATA BOX: JANUARY INFLATION Poland's January consumer prices were flat at 0.7%

y/y and up by 0.1% m/m versus consensus expecta-

tions for 0.9% y/y growth, stats office GUS informed in

a statement. Analysts surveyed by Polish press agency

PAP expected consumer prices to rise by 0.3% m/m in

January.

CPI inflation in Poland (y/y)

0%

1%

2%

3%

4%

5%

Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14

Source: GUS

IN BRIEF: Poland's Prime Minister Donald Tusk dismissed the head

of Poland's anti-monopoly and consumer protection of-

fice UOKiK Malgorzata Krasnodębska-Tomkiel, who has

been in the office since June 2008, UOKiK said in a

press statement. Krasnodębska-Tomkiel will be acting

head of UOKiK until her replacement is appointed. Gov-

ernment spokesperson Małgorzata Kidawa-Błońska said

that Krasnodebska-Tomkiel’s dismissal is continuation

of government’s reconstruction started in autumn last

year. “Prime Minister made some changes in the gov-

ernment lineup last year and now is looking at the offic-

es under his supervision. We face new challenges and

they have to be met”, Kidawa-Błońska said.


KEY STATISTICS

Consumer PriceConsumer PriceConsumer PriceConsumer Pricessss

Data in (%) Oct '13 Nov '13 Dec '13 Jan '14

Sector y/y m/m y/y m/m y/y m/m y/y m/m

Food & bev +1.9 -0.1 +1.9 +0.3 +1.5 +0.7 +1.6 +1.4

Alcohol, tobacco +3.6 +0.1 +3.6 +0.1 +3.7 0.0 +4.2 +0.8

Clothing, shoes -4.8 +3.5 -4.9 -0.2 -4.9 -0.6 -5.3 -3.9

Housing +1.8 +0.2 +1.8 +0.1 +1.8 0.0 +2.1 +0.2

Transport -2.3 -1.0 -2.3 -1.2 -0.9 0.4 -1.2 -1.0

Communications -7.2 +2.8 -11.7 -4.9 -11.6 0.0 n/a n/a

Gross CPI +0.8 +0.2 +0.6 -0.2 +0.7 +0.1 +0.7 +0.1

IIIInflationnflationnflationnflation

-1%

0%

1%

2%

3%

4%

5%

Ja

n 1

2

Ma

r 12

Ma

y 1

2

Ju

l 12

Se

p 1

2

No

v 1

2

Ja

n 1

3

Ma

r 13

Ma

y 1

3

Ju

l 13

Se

p 1

3

No

v 1

3

Ja

n 1

4

y/y m/m

Retail Retail Retail Retail TurnoverTurnoverTurnoverTurnover

Month Aug '13 Sep '13 Oct '13 Nov '13 Dec '13

m/m (%) -0.7 -0.9 +3.6 -5.8 +17.3

y/y (%) +3.4 +3.9 +3.2 +3.8 +5.8

Year 2009 2010 2011 2012 2013

Turnover in PLNbn 582.8 593.0 646.1 676.0 n/a

y/y (%) +4.3 +5.5 +11.6 +5.6 +2.3

Residential ConstructionResidential ConstructionResidential ConstructionResidential Construction

Dwellings

(in '000 units)

2008 2009 2010 2011 2012 2013 y/y

(%)

Permits 230.1 178.8 174.9 184.1 165.1 138.7 -16.0

Commenced 174.7 142.9 158.1 162.2 141.8 127.4 -10.2

U. construction 687.4 670.3 692.7 723.0 713.1 694.0 -2.6

Completed 165.2 160.0 135.7 131.7 152.5 146.1 -4.4

Source: Central Statistical Office (GUS)

GGGGross Domestic Productross Domestic Productross Domestic Productross Domestic Product

Period Growth y/y unadjusted

GDP in PLN bn current prices

Current account def. in % of GDP

Q4 2013 +2.7% n/a n/a

Q3 2013 +1.9% 404,310 -1.9%

Q2 2013 +0.8% 395,657 -2.3%

Q1 2013 +0.5% 377,815 -3.1%

2013 +1.6% 1,628,200 n/a

2012 +1.9% 1,522,736 -3.7%

2011 +4.5% 1,462,734 -5.0%

2010 +3.9% 1,416,585 -5.1%

Key Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & Projections

Indicator 2010 2011 2012 2013 *2014

GDP change +3.9% +4.5% +1.9% +1.6% +3.5%

Consumer inflation +2.6% +4.3% +3.7% +0.9% +1.2%

Producer inflation +2.1% +7.6% +3.4% -1.3% +0.6%

CA balance, % of GDP -5.1% -5.0% -3.7% -1.6% -0.8%

Nominal gross wage +3.9% +5.2% +3.7% +3.4% +4.5%

Unemployment** 12.4% 12.5% 13.4% 13.4% 12.8%

EUR/PLN 3.99 4.12 4.19 4.20 4.07

Sources: NBP, BZ WBK, GUS *) projections **) year-end

Gross WagesGross WagesGross WagesGross Wages A: avg monthly wages in PLN B: indexed avg wages, 100=2005

Sector Q4 2012 Q1 2013 Q2 2013 Q3 2013

A B A B A B A B

Coal mining 8,427 192 6,060 138 6,290 143 6,061 138

Manufacturing 3,522 154 3,491 152 3,560 155 3,625 158

Energy 6,535 198 6,196 188 5,828 177 6,021 183

Construction 3,829 163 3,556 152 3,693 157 3,766 160

Retail & repairs 3,365 143 3,432 146 3,421 146 3,408 145

Transportation 3,816 135 3,439 122 3,547 125 3,589 127

IT, telecoms 6,379 166 6,685 174 6,707 174 6,654 173

Financial sector 6,044 136 6,356 143 6,702 151 6,109 137

National average 3,878 154 3,741 149 3,613 144 3,652 145

Source: Central Statistical Office (GUS)

Construction OutputConstruction OutputConstruction OutputConstruction Output

Month Jun '13 Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13

m/m (%) +19.1 +7.8 -0.8 +9.4 +14.3 -2.9 +21.5

y/y (%) -18.3 -5.2 -11.1 -4.8 -3.2 -8.9 +5.8

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +15.5 +12.1 +5.1 +4.6 +11.8 -0.6 -12.0

Source: The Central Statistical Office of Poland, GUS

Sentiment IndicatorsSentiment IndicatorsSentiment IndicatorsSentiment Indicators

Economic sentiment and consumer confidence indicators

-40

-20

0

20

Ap

r 11

Jul

11

Oct

11

Ja

n 1

2

Ap

r 12

Ju

l 12

Oc

t 12

Ja

n 1

3

Ap

r 13

Ju

l 13

Oc

t 13

Ja

n 1

4

60

80

100

120 Co nsumer confid ence (left axis)

Economic sentiment (right axis)

The economic sentiment (1990-2010 average = 100) is a composite made up of 5 sectoral confidence indicators, which are arithmetic means of seasonally adjusted balances of answers to a selection of questions closely related to the reference variable. Source: Eurostat

Producer PriceProducer PriceProducer PriceProducer Pricessss

Month Jun '13 Jul'13 Aug'13 Sep'13 Oct'13 Nov'13 Dec'13

m/m (%) +0.7 +0.2 -0.3 +0.1 -0.7 -0.3 0.0

y/y (%) -1.3 -0.8 -1.1 -1.4 -1.4 -1.5 -0.9

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +2.0 +2.2 +3.4 +2.1 +7.6 +3.3 -1.3

Construction PriceConstruction PriceConstruction PriceConstruction Pricessss

Month Jun '13 Jul'13 Aug'13 Sep'13 Oct'13 Nov'13 Dec'13

m/m (%) -0.1 -0.1 -0.2 -0.1 -0.1 -0.1 -0.1

y/y (%) -2.0 -1.9 -1.9 -1.8 -1.8 -1.7 -1.7

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +7.4 +4.8 +0.2 -0.1 +1.0 +0.2 -1.8

Industrial OutputIndustrial OutputIndustrial OutputIndustrial Output

Month Jun '13 Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13

m/m (%) +2.6 +1.5 -4.5 +9.6 +6.0 -6.2 -9.7

y/y (%) +2.8 +6.3 +2.2 +6.2 +4.4 +2.9 +6.6

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +10.7 +3.6 -3.5 +9.8 +7.7 +1.0 +2.2


TTTTraderaderaderade

Poland exports and imports according to commodity groups, according to SITC classification

EXPORTS in PLN bn IMPORTS in PLN bn

Jan-Nov 2013

y/y (%)

share (%)

2012 share (%)

Jan-Nov 2013

y/y (%)

share (%)

2012 share (%)

Food and live animals 63,081 +8.5 10.7 61,694 10.3 43,296 +4.6 7.3 44,287 6.9

Beverages and tobacco 7,955 +6.5 1.4 7,967 1.3 3,764 +1.7 0.6 3,989 0.6

Crude materials except fuels 14,606 +10.1 2.5 14,024 2.4 19,851 -5.3 3.4 22,053 3.5

Fuels etc 27,381 +0.6 4.6 29,389 4.9 69,873 -10.4 11.8 85,280 13.4

Animal and vegetable oils 1,687 +32.5 0.3 1,342 0.2 2,430 -9.6 0.4 2,887 0.5

Chemical products 54,529 +6.9 9.3 54,295 9.1 85,948 +2.6 14.4 89,140 14.0

Manufactured goods by material 120,946 +1.3 20.5 126,161 21.1 104,027 -1.3 17.5 110,773 17.4

Machinery, transport equip. 221,253 +5.3 37.5 223,646 37.5 198,729 +3.4 33.3 203,718 31.9

Other manufactured articles 76,469 +7.1 13.0 75,925 12.7 53,487 -2.8 9.0 57,646 9.0

Not classified 1,606 n/a 0.2 2,653 0.5 14,854 n/a 2.3 18,515 2.8

TOTAL 589,513 +4.9 100 597,096 100 596,259 -0.9 100 638,288 100

Poland's ten largest trading partners, ranked according to 2012

EXPORTS in PLNbn IMPORTS in PLN bn

No Country Jan- Nov 2013

share *2012 Share No Country Jan- Nov 2013

share *2012 Share

1 Germany 147,936 25.1% 150,046 25.1% 1 Germany 128,267 21.5% 134,933 21.1%

2 UK 38,640 6.6% 40,184 6.7% 2 Russia 73,484 12.3% 91,033 14.3%

3 Czech Rep. 36,340 6.2% 37,475 6.3% 3 China 56,314 9.4% 57,235 9.0%

4 France 33,145 5.6% 34,862 5.8% 4 Italy 30,866 5.2% 32,782 5.1%

5 Russia 31,656 5.4% 32,290 5.4% 5 France 22,700 3.8% 25,303 4.0%

6 Italy 25,415 4.3% 29,067 4.9% 6 Netherlands 22,875 3.8% 24,543 3.8%

7 Netherlands 23,129 3.9% 26,678 4.5% 7 Czech Rep. 21,954 3.7% 23,327 3.7%

8 Ukraine 16,612 2.8% 17,213 2.9% 8 USA 15,956 2.7% 16,436 2.6%

9 Sweden 16,304 2.8% 15,811 2.6% 9 UK 15,594 2.6% 15,509 2.4%

10 Slovakia 15,487 2.6% 15,288 2.6% 10 South Korea n/a n/a 14,619 2.3%

Source: Central Statistical Office (GUS) *) preliminary estimates, full year

CurrencyCurrencyCurrencyCurrency

Central Bank average rates

as of 14 February 2014

100 USD 303.34 ↓

100 EUR 415.30 ↓

100 GBP 506.74 ↑

100 CHF 339.74 ↓

100 DKK 55.66 ↓

100 SEK 47.05 ↓

100 NOK 49.73 ↓

10,000 JPY 297.65 ↓

100 CZK 15.16 ↓

10,000 HUF 134.49 ↓

100 USD/EUR against PLN

300

350

400

450

28 Feb 13

10 M

ay 13

18 Jul 13

25 Sep 13

4 D

ec 13

14 Feb 14

USD EUR

MMMMoney Supplyoney Supplyoney Supplyoney Supply

in PLN m Sep '13 Oct '13 Nov '13 Dec '13

Monetary base 166,620 154,967 153,672 164,010

M1 540,873 536,237 538,837 555,851

- Currency outside banks 113,223 113,174 113,718 114,401

M2 931,042 935,095 934,713 960,361

- Time deposits 405,703 414,941 412,469 421,160

M3 947,228 955,419 953,446 978,924

- Net foreign assets 147,978 150,517 148,702 143,430 Monetary base: Polish currency emitted by the central bank and money on accounts held with it. M1= currency outside banks + demand deposits M2= M1+ time deposits (inc in foreign currencies) M3= the broad measure of money supply Source: NBP

CCCCreditreditreditredit

The financial sector's net lending in PLN bn,

loan stock at the end of period

Type of loan Aug '13 Sep '13 Nov '13 Dec '13

Loans to customers 908,106 901,288 906,298 903,890

- to private companies 262,963 260,585 262,396 259,061

- to households 560,608 559,965 563,157 562,381

Total assets of banks 1,626,489 1,612,836 1,627,119 1,601,293

Source: Central Bank NBP

IIIInterest ratesnterest ratesnterest ratesnterest rates

Average weighted annual interest rates

on loans to non-financial corporations

Term / currency Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13

PLN (up to 1 year) 4.7% 4.6% 4.5% 4.5% 4.5% 4.3%

PLN (up to 5 y ) 5.1% 5.1% 4.9% 4.9% 4.9% 4.9%

PLN (over 5 y) 4.9% 4.9% 4.8% 4.8% 4.8% 4.7%

PLN (total) 5.0% 4.9% 4.8% 4.8% 4.8% 4.7%

EUR (up to 1m EUR) 2.3% 1.9% 1.8% 2.0% 1.9% 1.9%

EUR (over 1m EUR) 3.5% 3.5% 3.2% 2.5% 3.0% 2.9%

Warsaw Inter Bank Offered Rate (WIBOR) as of 14 Feb 2014

Overnight 1 week 1 month 3 months 6 months

2.57%% 2.59% 2.61% 2.71% 2.74%

Central Bank (NBP) Base Rates

Reference Lombard NBP deposit Rediscount

2.50% 4.00% 1.00% 2.75%

Stock ExchangeStock ExchangeStock ExchangeStock Exchange

Warsaw Stock Exchange, rates in PLN

WIG-20 stocks in alphabetical

order

Price 14 Feb '14

Change 7 Feb '14

Change end of '13

→ Asseco Pol. 46.38 +1% +1%

↑ Bogdanka 119.6 +1% -5%

↑ BZ WBK 414.15 +4% +7%

↓ Eurocash 43 -2% -10%

↑ Grupa Lotos 38.8 +2% +9%

→GTC 7.18 0% -4%

↑ Handlowy 111.9 +5% +7%

↑ JSW 52.5 +3% -1%

→ Kernel 37 0% -3%

↑ KGHM 112.55 +5% -5%

↑ mBank 535 +2% +7%

↓ Orange Pol. 9.95 -7% +2%

↑ Pekao 194 +4% +8%

↑ PGE 18.5 +9% +14%

→ PGNiG 5.01 0% -3%

→ PKN Orlen 40.71 0% -1%

↑ PKO BP 43.29 +3% +10%

↑ PZU 443.6 +1% -1%

↓ Synthos 5.06 -3% -7%

↑ Tauron 4.82 +7% +10%

Source: Warsaw Stock Exchange

Key indices

as of 14 February 2014

WIG Total index

55553333,,,,397397397397....03030303 Change 1 week +2% ↑

Change end of '13 +4% ↑

WIG-20 blue chip index

2,2,2,2,444482828282....75757575 Change 1 week +3% ↑

Change end of '13 +3% ↑

WIG Total closing index

last three months

49,000

50,000

51,000

52,000

53,000

54,000

55,000

56,000

7 N

ov 13

2 D

ec 13

27 D

ec 13

23 Jan 14

14 Feb 14


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Tomasz Andryszczyk

RRRRegional Dataegional Dataegional Dataegional Data

Poland's regions

(main cities indicated

in brackets)

Industrial output

Jan-Dec 2013 *

Monthly wages (PLN)

Jan-Dec 2013 **

Unemploy-ment

Dec 2013

New dwellings Jan-Dec 2013

Indus-

try

Constru-

ction

Indus-

try

Constru-

ction

in '000 % Num-

ber

Index *

Dolnośląskie (Wrocław) 101.1 96.6 4,317 4,114 153.6 13.2 16,730 111.3

Kujawsko-Pomorskie (Bydgoszcz) 103.6 105.4 3,350 3,346 150.1 18.1 6,680 105.1

Lubelskie (Lublin) 104.6 95.9 3,736 3,080 134.0 14.4 6,892 95.9

Lubuskie (Zielona Góra) 97.4 90.7 3,388 2,990 59.8 15.7 3,322 104.8

Łódzkie (Łódź) 104.0 91.0 3,715 3,084 151.6 14.1 6,113 76.2

Małopolskie (Kraków) 98.2 92.5 3,763 3,386 164.4 11.6 15,525 101.5

Mazowieckie (Warszawa) 107.6 78.4 4,488 4,787 283.2 11.0 29,609 96.9

Opolskie (Opole) 97.9 94.4 3,500 3,192 51.6 14.3 1,747 96.0

Podkarpackie (Rzeszów) 108.3 96.8 3,276 3,093 154.2 16.4 6,192 94.9

Podlaskie (Białystok) 106.8 98.6 3,224 3,796 70.9 15.1 4,228 93.4

Pomorskie (Gdańsk-Gdynia) 102.0 97.3 3,885 3,503 114.1 13.3 11,948 84.2

Śląskie (Katowice) 97.8 92.7 4,681 3,582 208.3 11.2 10,384 106.6

Świętokrzyskie (Kielce) 101.9 90.1 3,393 3,211 90.1 16.5 2,786 90.0

Warmińsko-Mazurskie (Olsztyn) 98.9 84.1 3,178 3,076 115.9 21.7 4,768 86.8

Wielkopolskie (Poznań) 104.4 92.4 3,697 3,649 144.8 9.6 13,686 92.4

Zachodniopomorskie (Szczecin) 112.5 86.5 3,436 3,262 111.1 18.0 5,512 77.9

National average 102.2 88.7 3,959 3,729 2,157.9 13.4 146,122 95.6

Index 100 = same period of the previous year. ** without social taxes

Sources: Central Statistical Office GUS, NBP, C&W

Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)

Quarter Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13

in Poland 1,861 1,381 2,886 175 -3,020 -1,794

Polish DI 310 -550 -1,203 957 2,588 -1,529

Year 2007 2008 2009 2010 2011 2012

in Poland 17,242 10,128 9,343 10,507 14,832 4,716

Polish DI -4,020 -3,072 -3,335 5,484 -5,276 375

Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)

Period 2010 2011 2012 Q1 '13 Q2 '13 Q3 '13

Trade balance -8,893 -10,059 -5,313 -139 1,203 1,017

Services, net 2,334 4,048 4,816 1,274 1,686 1,047

CA balance -18,129 -17,977 -13,332 -2,313 486 -2,027

CA balance vs GDP -5.1% -5.0% -3.7% -3.1% -2.3% -2.0%

Source: NBP, BZ WBK

UUUUnemploymentnemploymentnemploymentnemployment

Registered unemployed, in ‘000 and

% of population in working age

1,800

2,000

2,200

2,400

2,600

Q4

10

Q2

11

Q4

11

Q2

12

Q4

12

Q2

13

Q4

13

6

9

12

15 number (left axis) % (right axis)

Source: Central Statistical Office GUS

IndustrIndustrIndustrIndustrial ial ial ial PropertiesPropertiesPropertiesProperties

by region, 1H 2013

Existing stock, sq.m

Under const ruction, sq.m

Va-cancy ratio

Effective rents EUR/ sq.m/mth

Warsaw central 2,728,000 41,000 15.9%

3.5–5.0

Warsaw suburbs 1.9–3.2

Central Poland 1,021,000 8,000 16.5% 1.9–3.1

Poznań 1,041,000 50,000 3.6% 2.3–2.9

Upper Silesia 1,478,000 33,000 5.8% 2.5–3.1

Wrocław 795,000 84,000 5.5% 2.4–3.0

Gdańsk 192,000 n/a 9.6% 3.2–4.0

Kraków 149,000 n/a 7.6% 4.0-4.1

CommercialCommercialCommercialCommercial PropertiesPropertiesPropertiesProperties

City

New apartments* Offices 1H'13 Retail rents**1H'13

Q3 '13

PLN/sq.m

Change

y/y

Rents** Vacancy Retail

centres

High

streets

Warsaw 8,146 +3.4% 11.5-25.5 10.5% 85 85

Kraków 5,989 -13.1% 13-15 2.71% 41 78

Katowice 5,898 +9.0% 13-14 8.29% 48 56

Poznań 6,351 -6.7% 14-16 14.66% 44 55

Łódź 4,780 -3.8% 12-14 14.97% 31 26

Wrocław 5,997 -4.3% 13-16 12.37% 38 41

Gdańsk 6,398 -1.2% 13-15 11.24% 39 31

*avg, offer-based ** EUR/sq.m/month; Retail units 100-150 sq.m

Country Credit RatingsCountry Credit RatingsCountry Credit RatingsCountry Credit Ratings

Agency rating outlook

Fitch Ratings A- stable

Standard & Poor's A- stable

Moody's A2 stable

Source: Rating agencies

Real EarningsReal EarningsReal EarningsReal Earnings

Average gross wage vs inflation.

100

120

140

160

180

Dec09

Aug10

Apr11

Dec11

Aug12

Apr13

Dec14

Wage CPI

Index 100 = Jan 2005. Source: GUS

poland today business review+ no. 023

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