Holde Agri Invest S.a Class A · BVB:HAI
Holde Agri Invest S.a Class A — Investor Presentation (May 2020)
37 slides from Holde Agri Invest S.a Class A's investor presentation, May 2020
Slide 1: Investor Presentation - 3rd equity financing round
INVESTOR PRESENTATION 3rd equity financing round May 2020 © Holde Agri Invest SA
Slide 2: Romanian Agri Industry: Opportunities
ROMANIAN AGRI INDUSTRY: OPPORTUNITIES Land consolidation opportunities LARGE SIZE / SMALL PLOTS Vast optimization potential & synergies 1 2 3 Lower acquisition prices for farms 4 Wide access to export markets For detailed information, please consult Appendix no. 1.
Slide 3: Holde Agri Invest Business Model
HOLDE AGRI INVEST BUSINESS MODEL Capital deployment Farm turnaround (operations) • Acquisition of performing assets • Land consolidation and farm 7 years and distressed farms integration (opportunistically) • Operational synergies • Capital structure management • Improved efficiency/ scale effects •
Slide 4: Holde Today
HOLDE TODAY Already underwent two Holde boasts over 7,000ha of The company has an effective successful financing rounds – arable land and two main organizational structure Series A during which farms – in Rosiorii de Vede implemented. The company raised €5 million vicinity (approx. 3,500ha) and mana
Slide 5: Overview of Main Assets
OVERVIEW OF MAIN ASSETS Rosiorii Farm Agromixt Farm Equipment and Machinery • Surface: 3,500 hectares (150ha owned), another • Surface: 3,500 hectares (370ha owned), intention • Machineries acquisitions in each farm are done 2,500ha will be added by Q4 2020. to expand to 5-6,000ha for maximum effici
Slide 6: Holde's Development Timeline
HOLDE’S DEVELOPMENT TIMELINE • Laying down foundations for the project • Establishing Holde Agri Invest SA and Holde Agri • Acquisition of Agromixt Farm • Preparation of the initial business plan and Management SRL • Increasing acreage to 8.000ha strategy • Attracting the first investors • Listing o
Slide 7: Business Plan Estimates
BUSINESS PLAN ESTIMATES Split of land – owned vs. leased (ha, %) Expected revenues and profitability (million RON, EBIT %) EBIT margin 34.3% 34.1% 31.7% 33.1% 32.5% 32.6% Directly owned 24,095 24,095 24,095 24,095 24,095 Revenue 10% 27.9% 11% 12% 13% 14% Leased 21.1% 151.9 156.3 156.3 156.3 156.3 14
Slide 8: Key Indicators Evolution
KEY INDICATORS EVOLUTION Average 2020-201 Average 2025 – 2026 EBIT/ ha 1,235 lei 2,180 lei Return of Capital Employed (excluding land appreciation) 4.1% 8.0% Return of Equity 4.8% 10.8% Debt/Equity ratio 0.96 0.78 Ordinary Dividend Yield* 8.5%** 9-11% * Assuming a rate of distribution of 100% ** Yea
Slide 9: Team
TEAM EXECUTIVES Liviu Zăgan Board Member and CEO Alexandru Covrig Matei Georgescu Board Member and CFO Development Director Architect, founding partner of CUMULUS Architecture, a leading design firm in Alex is a finance expert with 25 years Arhitect by education, Matei Romania. Liviu has 10+ years e
Slide 10: Corporate Governance & Organization
CORPORATE GOVERNANCE & ORGANIZATION General Shareholders Assembly Internal Audit Advisory Board Holde Agri Management Board Daniela Nemoianu Dan Manolescu Pierre Cammaert CEO • The day-to-day business is ensured by the Executive Team, which consists of local and international professionals, organize
Slide 11: Balanced Reward Mechanism
BALANCED REWARD MECHANISM SHAREHOLDERS MANAGEMENT TEAM • Annual “stock dividends’ distributed through • Fixed yearly fee of 53K EUR, plus additional 20K issuance of free shares, in order to keep the capital EUR for each 2,000ha module; for development in the company; • Variable performance fee (% of
Slide 12: Future Valuation Based on Two Scenarios
FUTURE VALUATION BASED ON TWO SCENARIOS Base Case Scenario Optimistic Case Scenario Hypothesis: • Valuation was done based on the DCF (discounted cash flow) method. Pre-exit bonus: Pre-exit bonus: • Terminal value aggregates management Equity value: 82mn lei Equity value: 123mn lei estimates on asse
Slide 13: Investment in Holde: Opportunities & Risks
INVESTMENT IN HOLDE: OPPORTUNITIES & RISKS OPPORTUNITIES R I S K S & T H E I R M A N AG E M E N T • Vast unexploited potential of the agri-industry in • Adverse weather factors Romania. Measures: irrigation investments, diversification of crops, insurance for extreme conditions, natural hedge (price
Slide 14: Contact
CONTACT Iulian Cîrciumaru President of the Board iulian@v7capital.ro Liviu Zăgan +40 743110 101 CEO Holde Agri Invest SA liviu.zagan@holde.eu +40 722 374 318 Eugen Voicu Certinvest Management Solutions eugen.voicu@certinvest.ro +40 722 214 333 www.holde.eu
Slide 15: Appendix
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Slide 16: Snapshot of EU agricultural land productivity benchmark
Snapshot of EU agricultural land productivity benchmark 450 Netherlands 400 Romania holds an enormous development Low fragmentation 350 High productivity potential, as it lags the rest of the EU when 300 considering the productivity of agricultural Output per farm (thousand EUR) Denmark land, with h
Slide 17: Almost half of Ro farms are smaller than 5ha
Share of arable land, by farm size (% of total, for each category, 2018) 12.1 13.0 5.1 3.8 6.5 2.0 25.0 18,1% > 100 ha 27,3% 26,6% Almost half of Ro 35,3% farms are smaller than 9,8% 50 - 100 ha 2,6% 2,2% 51,3% 5ha, and despite a 62,1% 30 - 50 ha 10 - 30 ha 9,0% 13,5% 10,9% trend of consolidation 16
Slide 18: Romanian agriculture land is still significantly more fragmented
Romanian agriculture land is still significantly more fragmented 12.1 13.0 5.1 3.8 6.5 2.0 25.0 18.1% > 100 ha 27.3% 26.6% 35.3% 9.8% 51.3% 50 - 100 ha 2.6% 30 - 50 ha 2.2% 62.1% 13.5% 10.9% 10 - 30 ha 9.0% 78.8% 16.7% 7.7% 5 - 10 ha 11.1% 8.1% 16.3% 30.8% 10.0% 2 - 5 ha 19.7% 4.8% 5.2% 3.9% 9.8% 15
Slide 19: Price of arable land in 2019
Price of arable land in 2019 (thousand EUR per hectare ) Although the price of Romanian 70.3 arable land rose fast in past years, it is still significantly lower than EU averages and many neighboring 42.6 countries 35.1 27.5 23.2 21.2 18.5 17.7 13.0 12.8 10.3 8.8 8.4 7.6 6.2 6.0 5.0 4.9 4.6 3.9 3.9
Slide 20: The price of land in Romania is in line with nearby EU countries
The price of land in Romania is in line with those of nearby EU countries and lower than Central and Western Europe EUR per Price of arable hectare land in 2019 (thousand EUR per hectare ) Finland Comments 8.4 Sweden • The price for arable and usable agricultural land vary across 8.8 Estonia Europe,
Slide 21: Price of renting arable land in 2019
Price of renting arable land in 2019 (thousand EUR per hectare, per year) There is a wider range for rent 1.90 prices for agricultural land in Europe, with Romania lower than most neighboring counties 1.53 0.47 0.44 0.40 0.38 0.33 0.31 0.26 0.26 0.19 0.17 0.16 0.14 0.13 0.12 0.11 0.09 0.08 0.07 0.07
Slide 22: Rental prices in Ro remain lower than most of the EU
Rental prices in Ro remain lower than most of the EU, but this can change based on upcoming agricultural developments EUR per hectare Rent Price of arable land in 2019 Comments (thousand EUR per Norway hectare) 38 • The prices for renting arable land vary significantly Sweden Estonia b e t w e e n c
Slide 23: Sizable differences in the price of usable land in Romania
There are sizable differences in the price of usable land in Romania, with the highest expected in Banat and Baragan Arable land price per hectare (thousand EUR per ha) EUR per hectare Botosani Maramures 3.5 - 7 Satu Mare Suceava 2.5 - 5 3.5 - 5 4-7 Iasi Bihor Salaj 2.5 - 5 Bistrita Nasaud 2.5 - 5 B
Slide 24: Producer sales prices increased steadily in Romania
Producer sales prices increased steadily in Romania compared to the EU averages and faster than most EU countries Price index for agricultural crop output(2015 = 100) 150 Poland 145 Comments 140 • The price index for agricultural output is calculated 135 based on the sales price of producers, and it
Slide 25: Producer prices for cereals resumed growth in Romania
Producer prices for cereals resumed growth in recent years in Romania, closing to EU averages Price index for cereals (2015 = 100) Price index for industrial crops (2015 = 100) 115 115 Poland 110 110 Hungary EU avg. 105 105 Czech Rep. Romania Czech Rep. Austria 100 Poland 100 EU avg. Bulgaria Hungar
Slide 26: Sharp rise in prices for vegetables and fruits
Ro saw a sharp rise in prices for vegetables and fruits, due to a higher quality production and focus on high value products Price index for vegetables (2015 = 100) Price index for fruits (2015 = 100) 155 155 Romania 150 150 145 145 140 140 135 Poland 135 Romania 130 Hungary 130 125 125 Austria 120
Slide 27: Romania's agricultural labor productivity increased faster than EU averages
Romania’s agricultural labor productivity increased faster than EU averages, but still behind some CEE countries Agricultural labour productivity index (2010 = 100) 240 Bulgaria 240 EU avg. 230 230 220 220 Romania 210 210 200 200 190 190 Slovakia 180 180 Hungary 170 170 160 Romania 160 153 Czech Rep
Slide 28: Romania is rich in Chernozem soil
Romania is rich in Chernozem, one of the highest quality soils in the EU, and most arable soil is high in key nutrients The soil map of Europe, illustrative Legend: Source: European Commission, JRC
Slide 29: The use of fertilizers in Romania increased
The use of fertilizers in Romania increased in recent years, and an optimal approach can boost crop yield significantly Fertilizers use per selected country (k per ha, 2017) Evolution of use of fertilizers per hectare in Romania (kg per ha) Netherlands 141 +4.0% Czech Rep. 134 Germany 110 30 30 33 2
Slide 30: Lower rates of takeover of arable lands in Romania
As opposed to most of Europe, Romania recoded lower rates of takeover of arable lands for other economic activities Percentage decline of arable land due to land take by economic or infrastructure development activities last decade Comments < 0.05 0.05 – 0.10 • Most countries in Western Europe see a
Slide 31: Romanian crop outputs remain significantly lower than the EU
Average output per hectare (EUR, 2018) Netherlands 12.853 Malta 8.814 Belgium 5.935 Cyprus 5.510 Compared to most of the EU, Italy Denmark 4.103 3.849 Romanian crop outputs remain Germany 2.946 significantly lower. Despite an Luxembourg 2.794 Slovenia 2.373 increase in industrial and large- Austria
Slide 32: Romania's potential for organic agriculture
Romania has a high potential for using its land for organic agriculture, and has started to close the gap to EU averages Share of organic share in total land used in agriculture (%, 2018) Evolution of Romanian organic agricultural land compared to EU averages (index, 2012 = 100) %, 2018 140 EU avg.
Slide 33: CEE countries hold almost half of EU subsidy beneficiaries
CEE countries hold almost half of the number of subsidy beneficiaries in the EU, but only a quarter of the total value Subsidies by number of beneficiaries (2018) Subsidies by value (2018) Bulgaria Croatia Bulgaria Croatia Czech Rep. Hungary 12,9% Czech Rep. Hungary 7,9% 0.5% 2.0% Romania 1.0% Roman
Slide 34: More than half of subsidies in Romania went on direct aid
More than half of subsidies in Romania went on direct aid, despite the average value being 3 times smaller than EU levels Value of subsidies for selected EU countries and EU-28 average (bn. EUR, 2018) Average subsidy per beneficiary, per country (mil. EUR, 2018) 3.0 2.1 1.2 4.6 0.5 1.8 1.2 Market 1.
Slide 35: Most subsidies in Romania went in small aid packages
Number of beneficiaries by value of aid (totals in thousand beneficiaries, %) 844.3 233.3 67.3 1,347.2 100.8 173.6 29.7 0.6% 2,1% 1.9% 0.2% 0.2% 2,8% > 50k EUR 4.6% 3,6% 2.5% 2,2% 4,3% 10.1% 10k - 50k EUR 5,0% 7,9% 10,0% 12,7% 5k - 10k EUR 13,6% 9,6% 2k - 5k EUR 9,4% 8,6% 18,4% Most subsidies in 18,
Slide 36: Romania's advantage with Constanta Port for cereal exports
Romania has an important advantage in the global market with the positioning and growing capacity of Constanta Port Regional exports of cereals (mil. tonnes, 2018) Romania’s cereals exports (mil. tonnes, 2018) 12.0 12.0 1.3 Barley (11.2%) Hungary 5,960 Romania 5.8 (48.3%) Intra-EU 11,981 Port of Con
Slide 37: Revenue & Cost Structure
REVENUE & COST STRCUTURE Hypotheses: • Total operated land evolution: from 7,865ha (year 1) to 24,095ha (year 10) • Stable crop plan • Total acquisitions and investments: 449,646,771 RON • Total capital raised: 93,151,900 RON • Annual land acquisitions at advantageous prices • Structure of owned to