Solaris Bus & Coach S.A. publishes the 2005 results

In 2005 Solaris Bus & Coach S.A. posted a 24% increase in sales from a 42% increase in turnover when compared with the previous year. Just like in previous years, exports accounted for the

major chunk of sales, this time with a massive 80% jump. On the Polish market Solaris Bus & Coach yet again emerged as the leader on the city bus market.

Solaris Bus & Coach S.A. has now summed up its 2005 results. Solaris bus, trolley bus and coach sales in 2005 totalled 610 vehicles, representing an increase of 121 units over the previous year. A total of 487 vehicles were exported, while sales to Polish operators closed at 123 units.

Export sales

Solaris 2005 export sales closed at 487 buses and trolley buses which translated into a 33% growth over the previous year when 366 vehicles were exported.

Among export countries Germany was traditionally the strongest market for Solaris. German customers took delivery of 229 Solaris Urbino city buses. This number includes a batch of 131 Solaris Urbino 18 articulated buses delivered to Berliner Verkehrsbetriebe GmbH in the German capital. At the end of the year Solaris Bus & Coach had around 15% share of the German market for low-floor city buses, which gave the Polish bus manufacturer a strong third spot in this market, just behind the German bus manufacturing groups. This also makes Solaris the largest non-German supplier of city buses to the German market!

„Germany is Europe‘s largest bus market. The third spot in the low-floor city bus segment on the German market is an excellent result by any standards. Only a few years ago this market was dominated by the duo of the German bus manufacturing giants,” Krzysztof Olszewski, Solaris Bus & Coach S.A. chairman and chief executive, comments on the company‘s 2005 sales in Germany.

Other export markets for Solaris, in the order of units sold, were: Lithuania (70 vehicles), Italy (41 units), Switzerland (37 deliveries), Latvia (32 units), Czech Republic (31 units), Hungary (26 units), France (11 units), Sweden (7 units) and Slovakia (3 units).

Solaris Bus & Coach S.A. exports in 2005 (in units).

„Our plans for the last year envisaged export sales topping the 500 mark. In the event we sold a total of 487 buses. However, it is worth noting that this number includes as many as 237 18-metre Solaris Urbino 18 articulated buses Assuming that in production an articulated bus counts as one and a half standard 12-metre bus, we can be pleased with our export performance,” Krzysztof Olszewski, chairman and chief executive, says of the company‘s export sales.

Solaris Trollino trolley buses accounted for nearly one-fourth of all export sales (105 units). This compares very well with the 84 units sold in 2004. This makes Solaris Bus & Coach one of Europe‘s leading trolley bus manufacturers. This type of vehicles constitute a very promising market niche, considering that more and more often city transport operators are on the lookout for green alternatives to the traditional diesel powertrains. Today we can see the emerging trend as many European cities have either started or are considering the return to trolley bus operations.

„Such a high proportion of repeat orders is probably the best reference for our vehicles one can hope for. This means that customers who have already bought Solaris have a very good opinion of our products, - says Krzysztof Olszewski, Solaris Bus & Coach S.A. chairman and chief executive.

Sales on the home market

On the Polish market Solaris Bus & Coach S.A. sold a total of 123 vehicles last year. In terms of volume this result is identical to the 2004 sales. However, detailed breakdown into particular models looks somewhat different from the previous year. The total of 123 units sold comprised 111 Solaris Urbino low-floor city buses, four Solaris Trollino low-floor trolley buses and eight Solaris Vacanza tourist coaches.

Thanks to these sales volumes Solaris consolidated its leader‘s position on the Polish city bus for yet another successive year.

During 2005 the Polish market absorbed a total of 392 city buses. The represented an increase of 84 vehicles over 2004. Solaris, with 111 Solaris Urbino deliveries, emerged as leaders with a 28.32% market share. However, when only buses over 8 tonnes GVW are considered (the only segment in which Solaris competes), this share grows to 33.74%.

Last year Solaris Bus & Coach S.A. sold a total of 4 trolley buses on the home market and was the only supplier of new vehicles of this type of in Poland. If trolley buses are added to the city bus market segment, the Solaris share of the market soars to 34.53%.

The biggest contract for Solaris Bus & Coach on the home market was the order for 80 Solaris Urbino 18 articulated buses for the MZK Bus Transport Company in Warsaw. By the end of 2005 a total of 79 buses has already been delivered to the Warsaw-based operator.

Just like during the previous year, Solaris coach sales closed at eight Solaris Vacanza tourist coaches. This gave Solaris a 6.15% share of the tourist coach market.

Financial results

The Solaris Bus & Coach S.A. sales success story has also been reflected in the company‘s financial results for 2005. Solaris Bus & Coach earnings for the last 12 months closed at PLN 659,834,000, up 197 million over 2004 (when earning totalled PLN 463m).

„This excellent result posted by our company has been made possible thanks to, among other things, consistent drive to improve business efficiency, including optimisation of the organisational solutions and procedures, overall improvement of internal control mechanisms and optimisation of manufacturing processes and efficiency,” Krzysztof Olszewski explains.

Products

During 2005 production of all 3rd generation bus types came fully on stream. The new Solaris product generation now includes Solaris Urbino III low-floor city buses with 10, 12, 15 and 18 metre lengths (the 18-metre buses are of articulated type), Solaris Trollino III low-floor trolley buses with 12, 15 and 18 (articulated) metre lengths, as well as Solaris Urbino LE (Low Entry) buses as well as Solaris Urbino CNG city buses running on compressed natural gas.

Company highlights

During the recent TRANSEXPO City Transport Show in Kielce last September, Solaris Bus & Coach was the firs Polish manufacturer to showcase a bus meeting the latest strict Euro 4 emission standards. It was a Solaris Urbino 12 city bus powered by a DAF PR diesel engine.

2005 also brought a number of prestigious awards and prizes for the company. Among the most important accolades was “The One Who Transforms the Polish Industry” Award given to Solaris Bus & Coach last February by the Polish Society for the Support of Business Enterprise (PTWP), "in recognition of its dynamic growth and firmly establishing itself among the largest bus manufacturers” ".

The company‘s strong export drive has also been noted and appreciated by the President of Poland who last June awarded Solaris Bus & Coach with his Economic Award in the “Top Exporter” category.

Individual accolade and the “Businessman of the Year” award has been given to Krzysztof Olszewski, Solaris Bus & Coach S.A. chairman and chief executive, for “efficient leadership, excellent financial results on the market dominated by large international players, and, specifically, for building a strong Polish brand which for very many children at schools has now become a generic name for a bus”.

2005 also brought very important recognition to Solange Olszewska, Solaris Bus & Coach S.A. Deputy President, who was presented with the prestigious „Bus Builder of the Year” award at the Busworld international show at Kortrijk in Belgium last October. The award is given to outstanding personalities of the bus industry for the outstanding personal contribution to the growth of the bus industry and the “art of building buses”. The decision about awarding the “Bus Builder of The Year” title is taken by a special jury which comprises the Busworld show organisers, trade journalists and industry specialists.

Plans for 2006

During 2006 Solaris Bus & Coach plans to start production of the range of buses meeting the Euro 4, Euro 5 and EEV emission standards. The Euro 4 and Euro 5 powertrains will be available in the Solaris range from June of this year. Buses meeting even more strict EEV emission standards will be introduced later in the year.

„This drive to introduce environment-friendly vehicles will make us one of the very first bus manufacturers in the world with such technologically advanced buses in its product portfolio. This is in line with our consistent philosophy of offering customers the latest in technology and solutions that are far advanced into the future,” stresses Krzysztof Olszewski.

In 2007 the company plans to step up production and further increase sales volume.

„Further increase in production volume will be possible thanks to the opening of our new production facility, among other things. Construction of this new facility commenced only last August. Obviously, production is not everything. We intend to continuously strive to strengthen our position on the markets where we have already established our presence, but we will also look to new sales directions for the company. We wish to have a closer look at the markets in the Middle East and South America,” Krzysztof Olszewski states.

In 2006 the company based in Bolechowo near Poznań will be celebrating its 10th anniversary.

„I very much hope that this jubilee year will be equally busy, interesting and deeply satisfying for the company as the year 2005,” Krzysztof Olszewski sums up.

„We could say that the outlook for the company is so encouraging that our further growth can be successfully financed by our own resources and bank credits only. For this reason we have taken the decision not to pursue the original intention of floating the company on the stock exchange. Only six months ago it seemed inevitable that to achieve the projected growth, we would require additional finance generated by offering company shares on the stock exchange. Today we know we can afford not to use the initial public offering option (IPO). This will enable us to preserve the family character of the company, which we think is important for the Solaris image, the way it is perceived by customers and for building successful long-term relations with customers. Obviously, the decision not to pursue the stock exchange route today does not mean we will not try to utilise the funds that stock exchange can generate some time in the future, if this strategy turns out to be the optimum choice to achieve our long-term growth objectives.”