Ukrproduct Group Ltd · LSE:UKR
Ukrproduct — H1 2005 Earnings Presentation
21 slides from Ukrproduct's earnings presentation, September 2005
Slide 1: Presentation of Interim Results 2005
Ukrproduct Group Ltd (‘UPG’) Presentation of Interim Results 2005 London September 2005 Sergey Evlanchik, CEO Dmitry Dragun, CFO
Slide 2: Structure of presentation
Structure of presentation (1) Executive Summary (2) UPG – Overview & Operations (3) Financials (4) Growth outlook 2
Slide 3: Executive Summary
Executive Summary UPG is Ukraine’s leading branded dairy foods business Largest market share in processed cheese and packaged butter Pan-Ukrainian sales & distribution, recognisable brands ISO-9001 certified production Highlights of the interim results 2005 Continued strong growth Sale
Slide 4: UPG – Overview & Operations
UPG – Overview & Operations Sergey Evlanchik, CEO
Slide 5: UPG – Products and services
UPG – Products and services 30 £27.1m Market leader in packaged butter & 5.4 20 £17.6m £17.3m processed cheese Sales £m 3.2 9.5 3.6 10 £7.3m £8.6m 7.7 5.1 Dried milk powder – 1.6 2.6 3.8 10.1 branded & profitable 5.8 7.3 3.4 3.0 0 2001 2002 2003 2004 1H2005 Distribution services – incremental
Slide 6: UPG – Locations
UPG – Locations Zhytomyr – 20,000 tonnes of processed cheese & 7,000 tonnes of packaged butter Starokonstantiniv – 3,500 tonnes of skimmed milk powder & 3,100 tonnes of packaged butter 8 regional depots & central warehouse including new depot at Kharkiv Manufacturing plants Distribution depots
Slide 7: UPG – Sales & Marketing
UPG – Sales & Marketing Pan-Ukrainian logistical capability provides opportunity for significant competitive advantage Countrywide sales & marketing team made up of ~300 professionals (merchandising, trade promotions, market analysis) Comprehensive data obtained from primary points of sale D
Slide 8: A Year of Growth – Headline Figures
A Year of Growth – Headline Figures Sales +57% to £17.3m EBITDA +56 % to £1.6m Net profit +78% to £1.16m Gross Margins +1.2% points to 16.7% One of Ukraine’s fastest growing companies, 55% compound annual sales growth, 2001-2004 8
Slide 9: Minimising Cyclicality – Forward Storage
Minimising Cyclicality – Forward Storage Further investment in forward storage Mitigates differences in protein content & price between the winter and summer months Ensures the stability of raw material supplies for the year Provides cost benefits The growth in production capacity continue
Slide 10: Financial Review
Financial Review Dmitry Dragun, CFO
Slide 11: Financial Highlights 1H2005
Financial Highlights 1H2005 1H2005 1H2004 Sales: £17.3 million £11.1m Gross profit: £2.9 million £1.7m Gross margin: 16.7% 15.5% EBITDA: £1.6 million £1.0m PBT: £1.3 million £0.75m Net profit: £1.16 million £0.65m Earnings per share*: 2.8p 2.1p 11 *Basic earnings per share excluding non-recurring it
Slide 12: Cash Flows
Cash Flows 6 Months to 30 June, £ 000 2005 2004 Cash flow from operating activities -57 574 Cash flow from investing activities -2,696 -970 Cash flow from financing activities 3,846 486 Effect of exchange rate changes -129 -7 Net increase in cash 964 83 Cash at the beginning of the year 300 132 Cash
Slide 13: Balance sheet
Balance sheet £ 000 30/6/2005 31/12/2004 Non-current assets 7,087 5,145 Current assets 9,843 4,869 Current Liabilities (3,781) (3,002) Net current assets 6,062 1,867 Non-Current Liabilities (926) (1,862) Net assets 5,136 5 Total shareholders' equity 12,058 5,018 Total debt 1,026 2,236 13
Slide 14: Core Business Segments
Core Business Segments Processed cheese Sales + 66.6% to £7,309 million Gross margins + 1.7 percentage points to 22.1% Market share* + 1 percentage point to 31% Packaged butter Sales + 25.7% to £5,081 million Gross margins + 4 percentage points to 14.9% Market share* stable 14 * Manageme
Slide 15: Growth Outlook
Growth Outlook Sergey Evlanchik
Slide 16: Growth Drivers
Growth Drivers Favourable consumption trends of dairy products in Ukraine Development of new products Enhancement of the distribution network Possible entry into the adjacent market segment (hard cheese) 16
Slide 17: Strategy
Strategy Expand UPG’s market share in core segments Invest in modernisation of plant facilities Enhance scale and efficiency of distribution network Launch and commercialise new products Enter the hard cheese segment 17
Slide 18: Outlook
Outlook Economic growth in Ukraine increases consumer affluence UPG core segments grow substantially Opportunities for sector consolidation open up Entry into the lucrative hard cheese segment is a possibility 18
Slide 19: Appendix
Appendix
Slide 20: Track Record of Profitable Growth
Track Record of Profitable Growth Year ended December 31, £ 000 2001 2002 2003 2004 Revenues 7,293 8,647 17,597 27,115 EBITDA 165 304 1,418 2,589 Depreciation (20) (35) (62) (520) Profit before interest and taxation 145 269 1,356 2,069 Interest payable and similar charges (82) (112) (94) (312) Profi
Slide 21: Successful Admission to AIM – Feb 2005
Successful Admission to AIM – Feb 2005 First Ukrainian trading group to be admitted to AIM Strong investor support Offer oversubscribed raising £6 million gross Market cap on admission £22 million 21