Milkiland Foods Plc · GPW:MLK
Milkiland Foods — Milkiland — Investor Presentation (October 2011)
26 slides from Milkiland Foods's investor presentation, October 2011
Slide 1: Management presentation
Management presentation October 2011
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. IMPORTANT NOTICE By attending the meeting where this presentation is made, you agree to be bound by the following limitations. In
Slide 3: Agenda
Agenda 1. Milkiland at a glance 4 2. Attractive dairy markets 6 3. Milkiland overview 9 4. Our strategy 19 5. Financial performance 23 3
Slide 4: Milkiland at a glance
Milkiland at a glance Our markets Our products Full range of consumer dairy products and dry milk products Russian Federation 2010 Focus on cheese & butter (yellow palette) and sales whole milk products (white palette), 55% and 38% of 2010 revenues respectively Ukraine Kazakhstan Our business struct
Slide 5: Attractive dairy markets
Attractive dairy markets
Slide 6: Attractive dairy markets in Russia and Ukraine
Attractive dairy markets in Russia and Ukraine… Market split by country (2010, EUR bn*) ca. 190 million combined population ca. EUR 16.4 billion dairy market size in 2010 Ukraine 2,0 Established traditions of dairy consumption 16.4 Russia 14,4 High historical growth in key segments Market growth by
Slide 7: … with significant growth potential…
… with significant growth potential… Consumption of drinking milk (2010) Current per capita consumption lags behind 120 100 neighbouring European countries 100 (kg per capita) 73 75 80 63 57 Historical level of consumption in Russia 60 33 and Ukraine was significantly higher 40 17 20 0 Consumption o
Slide 8: … and ample room for further consolidation
… and ample room for further consolidation Top 10 dairy players in Russia and Ukraine Dairy market supply structure (2010) Sales (2010) 10,100 kt 1,368 kt 750 kt 179 kt 100 # Company Prod. assets EUR m % of total 1 Danone-Unimilk* Russia, Ukraine 1,568 9.6% 2 Wimm-Bill-Dann** Russia, Ukraine 1,302 7
Slide 9: Milkiland overview
Milkiland overview
Slide 10: Strong organic growth with selective M&A
Strong organic growth with selective M&A Acquisition Development of whole integration milk operations Brand portfolio Acquisition of Ostankino streamlining in 2008 Main cheese production capacities 270 258 acquired and modernized By 2007 Milkiland becomes the largest milk processor and cheese 200 ma
Slide 11: Milkiland today – integrated dairy company
Milkiland today – integrated dairy company Warehousing Marketing Raw milk supply Production & distribution & sales •Long-standing •11 production •Extensive distribution •Three umbrella relationships with facilities with milk network in Ukraine brands (Dobryana, suppliers across 17 processing capacit
Slide 12: Diversified and flexible business model…
Diversified and flexible business model… Ostankino Mena Revenue by geography (EUR m, 2010) Chernigiv Sumy Kyiv Romny Okhtyrka Slavuta Kharkiv Lviv Myrhorod 258 Lactis Dnipropetrovsk Donetsk Milk intake capacities: Agrolite Zaporizhya 10-50k tonnes 50-100k tonnes Odessa Revenue by product (EUR m, 201
Slide 13: …combined with secure raw milk supplies…
…combined with secure raw milk supplies… Structure of raw milk supply in Russia, Ukraine, Milkiland’s raw milk supply system and for Milkiland (2010) 31.9 Mt 11.3 Mt 0.5 Mt Third party farms 100 • Over 500 farms • Long-standing relationships • Working capital and project financing 80 Indivi- 46% • P
Slide 14: … resulting in superior and sustainable profitability
… resulting in superior and sustainable profitability EBITDA margin vs. peers 20 15.1 13.3 8.2 10.8 17 16 16 • A well-balanced product portfolio in whole- 16 milk products and cheese provide for 14 14 higher profitability of Milkiland’s business 13 13 13 vs. peers 12 EBITDA margin (%) 12 11 11 11 8
Slide 15: Innovative product offering
Innovative product offering Specialty cheeses The only successful Ukrainian producer of premium cheeses, such as Camembert, Roquefort and Parmesan- type In 2010 Milkiland supplied a quarter of Ukrainian Continuously specialty cheese market, with the rest represented by developing new imports cheese
Slide 16: Strong portfolio of local brands
Strong portfolio of local brands Share in Positioning Status revenues 2009 2010 Overview Cornerstone brand initially introduced for Medium International 36% 59% hard cheese and developed into an umbrella brand Historical brand of the Ostankino dairy Medium Regional 13% 9% plant with high consumer aw
Slide 17: Multiple sales and distribution channels
Multiple sales and distribution channels Hypermarket and supermarket Revenues by distribution channel (EUR m, 2010) chains active in the CIS Key accounts 23 key accounts in 2010, Other Key including Metro, X5, Auchan, accounts Fozzy and Furshet Local retail 258 Key distributors of cheese and Exports
Slide 18: Our strategy
Our strategy
Slide 19: Dairy market potential
Dairy market potential Dairy consumption Strong local players Milkiland is well- in Russia and can capitalize on positioned to lead Ukraine poised for market growth and market growth led by consolidation trend consolidation across cheese and the CIS whole milk products Our aim is to become a clear C
Slide 20: Investment programme
Investment programme EUR m Capacity expansion by 7 kt p.a. from 40 kt Cheese 14 Ongoing modernisation, upgrade and maintenance Whole milk Fundamental modernization of the Ostankino dairy plant 20 products Modernization and upgrade of Ukrainian whole milk operations Raw milk Expansion of dairy farmin
Slide 21: Financial performance
Financial performance
Slide 22: Revenues
Revenues Geographic revenues (2007 - 2010) Product revenues (2007 - 2010) 300 2010 2010 270 258 250 36 20 200 200 13 97 165 127 150 87 53 100 24 141 50 107 100 87 0 2007 2008 2009 2010 Cheese & butter WMP Ingredients & other Source: Company IFRS accounts Source: Company IFRS accounts Financial perfo
Slide 23: Solid profitability
Solid profitability COS and Expenses (2008 - 2010) Adjusted EBITDA (2007 - 2010) 248 213 175 Source: Company IFRS accounts Source: Company IFRS accounts Note: Adjusted EBITDA excludes effects of non-recurring expenditure from operating segments such as restructuring costs, legal expenses, non-curren
Slide 24: Improving leverage
Improving leverage 31 31 31 Debt breakdown EUR ‘000 Dec 08 Dec 09 Dec 10 as at 31 December 2010 Total debt 99,122 92,935 79,836 Cash and equivalents 3,181 6,676 37,757 Net debt 95,941 86,259 42,079 Key ratios Net debt / Equity 3.3 1.7 0.3 Net debt / Adj. EBITDA 3.2 2.7 0.95 Adj. EBITDA / Interest 2.
Slide 25: Leading dairy player in the CIS
Leading dairy player in the CIS Experienced & committed Leading player in the CIS management team Consistent financial Balanced business performance model Strong brand portfolio Secure raw milk supplies Investment highlights 25
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