Presentation. August 2010

Transcription

1 Presentation Performance in the 1st Half of 2010 August 2010

2 Agenda I. General Information on PKM Duda II. Performance in the 1st Half of 2010 III. Implementation of PKM Duda Strategy

3 Performance in the 1st Half of Part I General Information on PKM Duda

4 Profile of PKM Duda Company Polski Koncern Mięsny DUDA One of the biggest Polish companies operating in the meat sector, A strong capital group encompassing around 30 companies specializing mostly in meat slaughtering, cutting up and distribution (beef, pork, venison), pig farming, cultivation of corn and other plants as well as cold cut manufacturing. PKM Duda is a leader of the slaughtering and distribution sector. Manufacturing plants of Polski Koncern Mięsny DUDA are currently one of the most modern facilities of this type in Europe. Revenue: PLN 1,415 mln for the last 12 months Profile: food industry Employment: appr. 2,200 persons 4

5 PKM Duda Capital Group Structure GK PKM Duda (updated: ) 5

6 Performance in the 1st Half of Part II Performance in the 1st Half of

7 Consolidated Revenue of PKM Duda +26% Revenue (in PLN mln.) -19% Six-month consolidated sale revenue of PKM Duda in the period 2004 the 1st half of 2010 (in PLN mln.) H 2008I 1 H H 2010 Source: PKM Duda Low level of pork livestock purchase prices as well as semi-carcass and meat sale prices the main reason for the decrease in revenue Restrictions or resignations from trade with entities of high credit risk the result of reducing trade limits by insurance companies Slight decrease in slaughtering level in the parent plant in Grąbkowo Low pig polulation is maintained in Poland Increase in export share in the revenue Very active competition 7

8 PKM Duda Consolidated Financial Performance EBITDA (in PLN mln) EBIT (in PLN mln) Net performance(in PLN mln) % +62% % +168% H H H H H H H H H 2010 Source: PKM Duda Increase in the margin in the distribution segment Improvement in export margins Higher cost-effectiveness at the operational level Visible effects of DUDA 2012 Restructuring Program Vertical integration in PKM Duda to a large extent eliminates the impact which fluctuations in the raw material market exert on financial performance Further increase in the share of raw material supplies from own farms to Grąbkowo plant Decline in financial costs 8

9 PKM Duda and Manufacturing Segment External revenue (in PLN mln) EBITDA (in PLN mln) EBIT (in PLN mln) - 20% % H H H H 2010 I H H 2010 Increase in export share in revenue Substantial improvement in profitability the implementation of Duda 2012 Program Low sale prices of meat and semi-carcass * Cena skupu Prices of pork semi-carcass of R class in PLN per kg* 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 Slight decline in slaughtering New participants on the market (particularly intense competition on the market of livestock purchasing) Restructuring of Hunter Wild activities Pig Wielkość slaughtering uboju in trzody Grąbkowo chlewnej plant in w thousand zakładzie pieces w Grąbkowie w tys. sztuk -4% H H 2010

10 Agricultural Plant Segment External revenue (PLN mln) EBITDA (PLN mln) EBIT (PLN mln) - 50% I H 2009 I H 2010 I H I H 2010 I H I H 2010 Corn prices maintained in the fist half at a low level Observed rise in the prices of agricultural produce creates prospects for further improvements in the segment profitability Loss suffered by agricultural segment companies in Ukraine Necesssity to maintain a large number of companies (restrictions in the quantiity of leased land) Appointing two groups of manufacturers Wheat prizes Wheat in total in purchase, according to GUS (the Central Statistical Office) Rye purchase prices Forecast Consumer wheat on the exchange 10 Source: ARR, June 2010

11 Agricultural Animal Segment External revenue (PLN mln) EBITDA (PLN mln) EBIT (PLN mln) - 67% H H % H H % H H 2010 Further increase in the supply of raw material from own resources to Grąbkowo plant improvement in the quality and efficiency of the raw material Maintaining EBITDA level despite the fact that livestock prices were lower than in 2009 Increased use of power in poultry farms opened in 2009 Appointing a group of manufacturers Pig livestock purchase prices Forecast 11 Source: ARR, June 2010

12 Distribution and Service Segment External revenue (PLN mln) EBITDA (PLN mln) EBIT (PLN mln) % % % H H H H H H 2010 Focus on the achieved margins Resignation from providing services to unprofitable customers Further use of the synergy effect and further integration within the Makton Group Increase in supplies to the HORECA segment Optimization of product portfolio towards high margin products, including the products of Fedrus brand, offered exclusively in Makton chain Prolonged winter resulted in revenue decline in the commercial segment Increased activity of NetBrokers company, which trades meat and groceries Gorzów Wlkp. Operation markets Szczecin Zielona Góra Potential operation markets Makton Group area of activity Wrocław Gdynia Poznań Grąbkowo Wałbrzych Gdańsk Gniezno Łódź Katowice Olsztyn Maków Warszawa Kraków Rzeszów Białystok Ciechanowiec Siedlce 12

13 Performance of GK PKM Duda S.A. Segments External customer revenue structure by segments 0,8% 36,5% 62,5% 0,2% Segment rolny roślinny Segment handlowy Segment rolny zwierzęcy PKM Duda i segment produkcyjny Segment contribution to EBITDA 5,0% Segment contribution to operational profit 4,2% 32,8% 23,1% Segment rolny roślinny 44,6% 19,5% 53,2% Segment handlowy Segment rolny zwierzęcy 17,7% Segment rolny roślinny Segment handlowy PKM Duda i segment produkcyjny 13 Segment rolny zwierzęcy PKM Duda i segment produkcyjny

14 Cash Flow Analysis PLN mln Cash as on Cash as on Net cash flow from operational activities 36.2 Net cash flow from investment activitties -5.7 Net cash flow from Net cash flow from operational activities investment activities Net cash flow from financial activities -131 Net cash flow from financial activities Cash as on Cash as om In the 1st half of 2010, the Group observed positive flows from operational activities, at the same time incurring very low net investment expenditures, which allowed the payment of net debts in the amount of PLN 44 mln, and PLN 15 mln due to the interest. 14

15 15 Part 3 Implementation of PKM Duda Startegy

16 Wyniki I półroczss2010. Successful Issue of Series H Shares Breakdown of shareholders of series H shares Investors took hold of 82,468,843 of series H shares Issue price equalled PLN 1.1 The Company acquired PLN 90.7 mln Issue objectives: Supporting the working capital and restructuring activities PLN 35 mln Repurchase of some shares from the banks for redemption and repayment of the part of credit in Pekao S.A. bank PLN 55.7 mln Pozostali; 52,2% ING Bank Śląski; 11,7% Kredyt Bank; 11,5% PKO BP; 7,2% Bank Handlowy; 6,6% Rodzina Duda; 10,8% The Duda family members took hold of series H shares worth PLN 20 mln, fuflulling obligations to the banks which participated in financial restructuring of PKM Duda 16

17 Wyniki I półrocza Duda 2012 Program in Figures DUDA initiatives concerning the majority of functional areas of the organization (including Purchasing, Strategy, Finances, Transportation, Logistics and HR) were implemented An operational budget for over 100 value centres in almost 20 companies and segments of the Group was prepared Totally successful migration of customers from a closed wholesale warehouse (Taśmowa in Warsaw) to other venues PMO office monitors the implementation of over 40 internal initiatives the implementation of recommendations and concepts created within the respective projects of the Program A few hundreds of CDN XL reports and a few dozens of cross-sectional analyses were executed and conducted. Awareness and demand for management information has considerably increased in business. The program requires managing changes and communication within GK, participants of the capital market and a few thousand contractors. 4 intiatives, concerning the following areas: Manufacturing, Sales, Distribution and IT Systems are currently being implemented The implementation of 3 other projects concerning: the organizational structure of GK, group procedure policy and cntralization of the support function of FK, HR and IT More than 70 employees of PKM Duda were involed in the work as permanent mebers of project groups or as persons cooperating on a permanent basis 20 IBC consultants were hired to support the implementation of the project work. 17 Duda 2012 Program (PRO) has been in progress for 11 months, its initiation took place in October 2009.

18 Wyniki I półrocza The Results of Duda 2012 Program (1/3) Field Tasks completed The Capital Group Startegy Preparation of the Capital Group strategy, in particular: development of processing acquisitions in the distribution, development of HORECA, use of the manufacturing capacity of Grąbkowo plant Creating a purchase organization Establishing an organizational unit in PKM Duda, responsible for the central coordination of purchasing process: Central Office of Purchasing and Logistics (CBZ) Acqusition of next purchasing categories from GK PKM DUDA, pursuant to a schedule. Reduction of costs (conducted tenders, signed agreements) The optimization of transportation Preparing optimization recommendations and the development of the transportation function in GK The Implementation of CDN XL functionality, which supports the communication among Transortation, Sales, Manufacturing and Purchasing 18

19 Wyniki I półrocza The Results of Duda 2012 Program (2/3) Obszar Tasks completed Cost and margin estimate Creating the basis for supporting the ABC cost estimate and margin reporting Conducting the analysis of product profitability indicating groups and products of little or negative margin on th basis of the ABC cost estimate. Initiating the works that aim at increasing the profitability of orders. Optimization of the working capital management Realization of optimization process of the demand for working capital in the manufacturing and distribution segment Preparing a new, procedure of the receivables management and debt collection for the whole Capital Group Integration of distribution Preparation of a target business model and organizational structure of the distribution segment Merger of CM Makton and PSF Detal companies Preparation of a business specification for SAP implementation in the distribution sector 19

20 The Results of Duda 2012 Program (3/3) Obszar Incentive schemes Tasks completed Implementation of MBO system in PKM Duda Implementation of the incentive scheme in PKM Duda commercial department Initiating the improvement programme Budget Preparation of operational, budgets, unit budgets of companies and a consolidated budget of PKM Duda Sales of assets Sales of PF Express (Ukraine) Signing the framework agreement for the sales of the assets of Pieprzyk Rogatyń and Rosan Agro companies Advanced talks concerning the sales of elevators in Chróścin and Pleszew 20

21 Wyniki I półrocza The Results of Duda 2012 Program The financial results of Duda 2012 Program [ PLN mln] 8,0 mln zł PLN 8.0 mln Progress 67.5% 5,4 mln zł PLN 5.4 mln założenia budget assumptions budżetowe Achieved Osiągnięte in the w I 1st poł. half 2010 of 2010 We maintain the value of savings to be implemented in the period in the minimum amount of PLN 80 mln 21

22 Thank you for your attention Disclaimer This document concerning PKM Duda has been prepared by PKM Duda ( the Company ). This document does not present a total and comprehensive situation of the Company. This document as well as the slides related to it and their descriptions may include information which refers to the future. Statements referring to the future do not guarantee that the predictions refering to future achievements will come true, as they is the element of risk and uncertainty involved, and the actual financial situation of PKM Duda Group in the future may substantially differ from the expectations expressed or presumed in the above-mentioned statements referring to the future. The Company presents its own image, prepared in accordance with the best will of the Management Board, with the reservation that it is not possible to provide full information. The realization of the events which have been mentioned herein depends on a number of conditions, which may as well not be fufilled. No assurances or statements may be issued for comprehensive character or reliablity of the information presented herein. The Company shall not be held reponsible for any reason related to the use hereof. This document has been executed exclusively for information and promotion purposes and it shall not constitute any offer to sell or purchase or any offer aimimg at obtaining an offer or sales of any securities or financial instruments or participation in any commercial undertaking. This document shall not constitute any offer or invitation to purchase or to subscribe to any securities under any jurisdiction and no provisions hereof may be the basis for any agreement, obligation or investment decision, nor shall it be relied upon in connection to any agreement, obligation or investment decision. 22

23 Head Office Polski Koncern Mięsny DUDA S.A. ul. Kłobucka K 25, Warsaw phone no. (+48)