Presentation on theme: "BBI Capital NFI SA Warsaw 2008. Warning of risk This presentation was prepared according to the best knowledge of BBI Capital NFI SA. We will do our best."— Presentation transcript:
BBI Capital NFI SA Warsaw 2008
Warning of risk This presentation was prepared according to the best knowledge of BBI Capital NFI SA. We will do our best to ensure that the data we present reflects the market situation of the entities in question as accurately as possible. However, we are not responsible for the reliability of the data presented in this presentation or for its being up to date, nor is BBI Capital NFI SA responsible for investment decisions made on the basis of the information included in this presentation. Transactions involving investment instruments are by their nature speculative and may result in losses or profits that exceed the initial capital invested. None of the information included in this presentation, either individually or as a whole, should be treated as recommendation, instruction, promise or obligation indicating that by using it the investor will make a profit or reduce its losses. This presentation is not an offer within the meaning of the Polish Civil Code and other relevant provisions of law.
3 Table of contents BB Investment Group, BBI Capital NFIs strategy, BBI Capital NFIs investment portfolio, Effects of exiting investments, Summary, Long-term strategy, Near-term plans,
4 BB Investment Group
5 BB Investment is: A private investment company with business roots going back to Investments are sector-based and involve the use of specialised investment vehicles: BBI Development NFI – development fund, BBI Capital NFI – modern technology, innovative business models, BBI Zeneris NFI – renewable energy sources, An active medium and long-term investor combining entrepreneurship with financial market expertise, Expert knowledge and practical experience in developing the value of the companies in the group, Over the past few years we have developed a number of companies, from small, specialised companies to large, highly developed stock market companies such as AMS, Emax, and Tell, In financial terms, BBI has assets in the amount of PLN 600 million, while the market value of the companies managed by the BBI Group exceeds PLN 2 billion.
BBI Development NFI Listed od WSE BBI Development NFI Listed od WSE Tell SA Listed od WSE Tell SA Listed od WSE I&B System Listed od WSE Cafe News Sp. z o.o. Listed od WSE BBI Seed Fund Sp. z o.o. BB Investment Sp. z o.o. Cartridge World CEE Sp. z o.o. Awbud kostka SA Hardex SA Listed od WSE Hardex SA Listed od WSE Orzeł Biały SA Listed od WSE Kopa Haus SA Listed od WSE Kopa Haus SA Listed od WSE ELZAB SA Listed od WSE ELZAB SA Listed od WSE -10 projects, -Luxury apartment buildings in the centre of Warsaw, -Unique designs, apartments in holiday resorts, m2 of usable area -Biomass energy, -Watr power engineering, -Biogas technology, -Energy from waste, -Wind power Kansas Semiconductors Telecommedia Sp. z o.o. Geoclima Sp. z o.o. Dominium SA Magna Polonia NFI SA Listed od WSE Magna Polonia NFI SA Listed od WSE Duda-Bis Sp. z o.o. Mobilna Telefonia Internetowa SA Mobilna Telefonia Internetowa SA Awbud budownictwo SA BBI Zeneris NFI Fundusz notowany na GPW BBI Zeneris NFI Fundusz notowany na GPW BBI Capital NFI Listed on WSE BBI Capital NFI Listed on WSE 6 IZNS SA Aton HT SA
7 BBI Capital NFIs Strategy
8 BBI Capital NFIs strategy A strong investor (BBI Group) with a precisely defined ownership approach, Decision-making within the BBI Group associated with VC/PE as well as the development and building up of companies has been transferred to BBI Capital NFI, Investment portfolio with a VC/PE profile in a broad sense, Consistent opportunity fund investment strategy, Increasing significance in the VC/PE investment fund market, Confidence of institutional investors evidenced by investments in the Companys securities by Unicredit and Black Rock, Market value: approximately PLN 300 million, Taking advantage of a tax exemption, Using the benefits of being a listed company.
BBI Capital NFI Listed Fund Private Equity Investment Vehicle Financial product Listed company – full transparency and compliance with corporate governance provisions, Provision of the necessary amount of capital and assurance of financial liquidity, Investors have easy access to a complementary portfolio of interesting Polish companies. Business approach Active owner and combination of competencies and business experience + knowledge of financial markets, Focus on the most important sector in Poland – small and medium-sized enterprises, Extraordinary returns on invested capital, Limited competition in the Funds main operating area. Business Model
InvestmentDevelopmentExit Our business model consists of 3 steps: Investment and Development of the Company including the improvement of the financial result and active work on the operational development and long-term positioning of the Company in its market, and finally Exit Investment Company with extraordinary growth potential, Entrepreneurial approach, Extraordinary rate of return on equity with an acceptable level of risk, Use of local knowledge to introduce business models. Development Active and responsible owner, Long-term development as a basis for carrying out investments, Combining BBI Groups business experience with analytical skills in the investment process in order to build the Companys credibility as an element of a holding company. Exit IPO (main market or NewConnect), Sale to an industry investor, Other.
11 BBI Capital NFIs operating area market type insurance companies venture capital businesses developing or diversifying theircore business business angels investment project phase portfolio investment private market public market open pension funds investment fund companies asset management seed financingstart-upfirst-stage financingexpansion-stage BBI Capital NFIs area of operations private equity funds
Types of transactions 1.Buy-out/restructuring – company takeover transactions effected by buying out shares from shareholders on the public market or outside it and then freeing up value in the Company and carrying out restructuring measures. Examples: ZEG, Elzab, Pepees, I&B System + MediaService 2.Development capital for SMEs – providing development capital for small and medium-sized businesses to allow them to realise their growth and development strategy or investment programme; exit usually through the public market or by sale to a strategic investor. Examples: IZNS, Tell, Orzeł Biały, Hardex, Kopa Haus, Awbud 1 and 2, Bomi, Geoclima 3.Early stage – investments in start-ups in the early stages of their development involved in technological projects. Investment in such companies is concentrated in the subsidiary BBI Seed Fund. Examples: MTI, CartridgeWorld CEE, Cafe News, Kansas Semiconductors, Aton HT
13 BBI Capital NFIs Portfolio buy-out and restructuring projects
14 Elzab SA According to ELZABs strategy for , as approved by its Supervisory Board, the Company will create a strong, profitable capital group concentrating on providing comprehensive solutions for the broadly defined retail market. The groups competencies and product range will include software, implementation, consulting and maintenance services, and specialised equipment for the retail sector, HoReCa, petrol stations and doctors surgeries and hospitals. ELZABs expanded product range will be implemented by the Companys powerful existing network of dealers and distributors. The strategy assumes that expanding ELZABs product range to include software and services, entering new, lucrative sectors, and optimising the Companys financing structure will lead to the value of its shares being doubled by the end of Purchase value of 474,706 shares = PLN 20.98m Value of BBIs block (as at 29 March) = PLN 24.6m
I&B System / Media Service The Shareholders Meeting of I&B System unanimously adopted a resolution to issue 61 million R series shares at PLN 0.98 per share, in exchange for 100% of the shares in Media Service. The management boards of both companies are working on an integrated strategy that was provisionally established before the takeover process. It has been agreed that the main lines of business will be GPS technology and integration and consulting services. The company will also offer management support systems and solutions for intelligent buildings. Media Service has been operating on the GPS technology market forthree years. The Company has introduced navigation devices underits own brand, SmartGPS, sales of which will reach approximately70,000 units in The Company has also begun to build itsown distribution and retail outlet network, and has signed an agreement to set up outlets in 25 Makro Cash and Carry stores. Block held by BBI Capital NFI: 11.36% (14,200,987 shares)
NFI Magna Polonia SA The Company is terminating its operations as a National Investment Fund. It was purchased as an investment vehicle for subsequent portfolio investments of BBI Capital NFI. Block held by BBI Capital NFI A total of 26.61% (3,417,171 shares)
17 IZNS SA Iławskie Zakłady Napraw Samochodów: Three areas of business operations: 1. Vehicle repairs as well as repairs of truck and bus engines, including major overhauls of combustion engines, 2. Production of spare parts for trucks, buses and agricultural machines, 3. Production of vehicle registration plates. IZNS SA was transformed into a joint stock company in It possesses an ISO 9002:1994 compliant Quality Assurance System and operates in accordance with ISO 9001:2000 and ISO/TS 16949:2002 requirements.
BBI Capital NFIs Portfolio development capital projects
19 Tell SA Tell S.A. A network of 280 GSM phone outlets operating under the Orange, Plus GSM, Play, Era GSM brands. Tell S.A. is the largest sales outlet chain in Poland offering different mobile phones and network services. Tells operations focus on selling telephones and the telcommunications services of the different network to individual clients and institutions. Tells offer also includes mobile phone accessories. The Company is listed on the Warsaw Stock Exchange. Block held by BBI Capital NFI (as at 28 March 2008): 23.02% of the share capital, 33.13% of the votes at the Shareholders Meeting. Market value of the block (as at 28 March 2008) = PLN 24.7m Raifeissen recommendation (February 2008): buy up to PLN 126
20 Orzeł Biały SA Orzeł Biały S.A. (Bytom) recycles used lead-acid batteries. The main product of recycling is antimonial lead. The Company also reclaims polypropylene from battery cases and sulphuric acid from the electrolyte. The polypropylene separated from the other components is processed into fully usable granulate. Purchase price of 25,500 shares at PLN 162 = PLN 4.17m (after the split: 204,000 shares) Block held by BBI Capital NFI ( ): PLN 4.35m
21 Hardex SA HARDEX S.A. (previously Zakłady Płyt Pilśniowych S.A.) in Krosno Odrzańskie. The largest manufacturer of hardboard in Poland. Two lines with a capacity of up to 80,000 tonnes of hardboard per year. The Companys core activity is the production of wet-formed hardboard: regular and varnished, mono-colour and wood structure. Domestic sales amount to approximately 50% of overall sales and are mainly directed at woodwork and furniture manufacturers. Block held by BBI Capital NFI 60%, 620,271 shares (for PLN 14.51m) Stock market debut: 3 April 2008 (per PLN 99)
22 Kopa Haus SA Since 2004, Kopa Haus has been building frame construction houses in the turn-key system for three large developers in Poland, the Netherlands, Sweden and the UK. In Poland, the market for prefabricate houses is still a novelty, but frame construction is very popular in Scandinavian countries, which has allowed the Company to successfully enter the Dutch, Swedish and British markets. A single order may be for up to 250 homes. The buyer of the block of B series shares was Roompot (the ABN Amro Group), which plans to enter the Polish market on that basis. Pre-IPO investment Block held by BBI Capital NFI: 13.01% (for PLN 10,050,000) IPO expected: 2008
23 Awbud Concrete Bricks AWBUD Concrete Bricks is now one of the leading manufacturers of block and concrete trim elements in southern Poland. Its offering also includes technical consulting, design services, transport and logistics services, and services involving the installation of the products it sells. The Company sells more than 1,000,000 m 2 of blocks per annum. It has its own laboratory, which systematically tests the finished products and all the raw materials used to manufacture them. The products manufactured meet all the requirements of Polish and European standards. The Company has implemented a Quality Assurance System compliant with the ISO 9001:2000 standard and an SAP management system. Block held by BBI Capital NFI Awbud Concrete Bircks: 19.23% of shares (for PLN 6m) IPO expected: 2008
Awbud Construction AWBUD Construction is an industrial and general construction company. It executes construction projects as a general contractor or on a turn-key basis, specialising in reinforced concrete work, turn-key construction of production halls and warehouse and retail spaces, and general contracting in projects for the pharmaceutical and environmental protection sectors, as well as public utility buildings (swimming pools, gyms). AWBUD Construction has 17 years of experience and has completed more than 400 general and industrial construction contracts. With a workforce numbering approximately 200, the Company is managed according to the EN ISO 9001:2000 standard using an SAP management system. Block held by BBI Capital NFI: Awbud Construction: 19.23% of the shares (at PLN 6m)
Geoclima Sp. z o.o Geoclima Geoclima began operating in December 1997, initially as a privately-owned company and later as a limited liability company. Initially, its core business was the manufacture of air-conditioning, ventilation and industrial refrigeration systems. Having concluded distribution agreements, the Company is now shifting its main focus to the sale and distribution of refrigeration, air-conditioning, and heating and ventilation equipment, as well as support services. Block held by BBI Capital NFI: 28.8% of the equity (for PLN 6.97m)
Dominium SA Dominium S.A. Dominium began operating in 1993, from its first premises at ul. Złota in Warsaw. Now, in 2008, it has a chain of 52 Pizza Dominium restaurants all over Poland, as well as one in Romania (and two further restaurants in Ireland and Ukraine), which form the largest catering chain based on Polish capital. The Company is in the process of creating a new strategy leading up to an IPO. Block held by BBI Capital NFI: 12.5% of the equity (for PLN 5m), since 4 April 2008
Duda-Bis Sp. z o.o. One of the largest meat processors in Poland (unrelated to PKM Duda). The Company owns a modern slaughterhouse in Jędrzejów, a meat processing plant, a distribution centre in Poznań, and a chain of own and franchise stores. It has stable annual sales of around PLN 500m. The Company plans to enter the Warsaw Stock Exchange in 2009 through the intermediary of DM Millenium. Block held by BBI Capital NFI: A total of 19.05% of the shares for PLN 20m
BBI Capital NFIs portfolio early stage projects
29 Cartridge World CEE Sp. z o.o. Cartridge World Sp. z o.o. Cartridge World was founded in Australia in It is the world leader in the regeneration of cartridges for ink-jet and laser printers. It has over 1,550 stores in 42 countries. In Poland, since October 2007, Cartridge World (CEE) Sp. z o.o. has been the Main Franchisee for Poland, Czech Republic, Ukraine, Slovakia, Hungary and Belarus. There are plans to open stores in most Polish cities with a population of over 100,000. The stores will be both franchise operations and under direct ownership by the Company. Block held by BBI Capital NFI: 70% (for PLN 2.62m)
30 Mobilna Telefonia Internetowa Mobilna Telefonia Internetowa S.A. The first VOIP operator in Poland offering free/inexpensive mobile telephone services based on UMTS, 3G and WiFi broadband internet access, using smart phones. The first such implementation in Europe, in partnership with Cicero Networks and NetGear, and the first solution allowing free roaming between GSM (3G) and WiFi networks. Start-up investment - capital provision at an early stage, combined with consulting and advice in developing the company. Other main shareholders: the founders and creators of the project Pre-IPO investment: Block held by BBI Capital NFI: 70% (for PLN 2.52m)
31 Cafe News Cafe News Sp. z o.o. The first news aggregator in Poland. This is a free programme that groups the best sources of information and allows their management. It represents a new quality in access to breaking news. Cafe News has an Internet monitoring function that allows for individual definition of keywords and buzzwords. Block held by BBI Capital NFI: 35% for PLN 2m Start-up type investment – early-stage capital entry together with advisory services and help in developing the company. Other main shareholders: four natural persons (the founders and creators of the project). The Company is in the process of entering NewConnect. It plans to obtain PLN 3-5m
32 Kansas Semiconductors A technological investment. Out of the capital earned, the Company commenced the construction in the USA of a high- pressure reactor for producing aluminum nitride on an industrial scale. Aluminum nitride is used in optoelectronics and applied electronics (the new generation of UV lasers). This means it can be used in lighting systems, mass memories, telecommunications and imaging (the latest LCD screens). Block held by BBI Capital NFI: 42% of the equity (for USD 0.5m )
33 Aton HT SA Aton HT S.A. ATON HT S.A. has been in business since August It was founded in order to implement MTT technology on an industrial scale in the field of utilising hazardous waste. MTT – Microwave Thermal Treatment – of which ATON HT is the legal owner, is an innovation in waste utilisation. A testing facility for carrying out tests on the utilisation of asbestos is to be built on the basis of MTT technology. The Company debuted on NewConnect on 29 February 2008, at PLN 3.50 per share. Terms of the transaction: Purchase: 500,000 shares on 3 January 2008 at PLN 1 = PLN 0.5m
34 Effects of Exiting Investments
35 PEPEES SA The PEPEES S.A. capital group consists of: - Przedsiębiorstwo Przemysłu Spożywczego PEPEES S.A., - Zakłady Przemysłu Ziemniaczanego LUBLIN Sp. z o.o. -PEPEES S.A. is leader in the manufacture of potato starch, with a 25% share of the Polish market. -ZPZ Lublin specialises in the manufacture of potato granules and starch syrups. -In early 2007, the Łomża brewery was sold to FAXE for PLN 124m. -A call to repurchase the companys own shares for the purpose of redemption, for a price of PLN 2.70 vs. the market price of PLN 1.80, ended on 20 November. Terms of the transaction: Purchase: 4.3%, 40,000 shares (for PLN 4m) Exit: via the market, at an average PLN 207 (PLN 8.33m), ROE: 107% (PLN 4.31m)
36 ZEG SA Zakład Elektroniki Górniczej "ZEG" S.A., listed on the Warsaw Stock Exchange, is a reputable producer of industrial automation equipment, measurement and inspection instrumentation, and signalling and communications apparatus, built to withstand explosions and intended for industry and mining applications. Terms of the transaction: Purchase: 65%, 749,433 shares at PLN 30 (PLN m). Sale (to Kopex): at PLN 44 (PLN m). ROE: 46% over a four-month period 132% over a year
37 PPH BOMI SA PPH BOMI Owner of a network of eighteen supermarkets operating in seven Polish cities. BBI Capital NFI is one of the financial investors introduced prior to the public offer that is being organised by IDM SA (pre-IPO). Terms of the transaction: Purchase of 683,000 shares at PLN 6.5 = PLN 4.5m Exit: (at PLN 27) = PLN m, ROE: 410% over seven months * Approximate data
– building the Funds value Implementation of a management incentive system, Commercialisation of projects in the pipeline, Stable and long-term growth in the value of the Fund, Taking a leading position on the active capital investment market, Issue of shares in December 2007: 4.24m shares at PLN 7.20 for a total of PLN 30.5m (Unicredit), New Supervisory Board member: Jan Modrzejewski (Unicredit), Open bond issue programme up to a maximum of PLN 100m.
40 Strategic development directions BBI Capital NFI SA means: A combination of an active VC/PE investor and an experienced entrepreneur, Actively seeking new investment projects and new market niches, More than six new projects annually, Maximising the ROI is the chief consideration in project selection, ROE no less than 30% p.a., Ensuring an appropriate level of security.
41 BBI Seed Fund BBI Seed Fund is a venture capital fund specialising in investments in start-up companies developing technological projects, BBI Seed Fund started its operations in December 2007, having obtained financial support from Krajowy Fundusz Kapitałowy (a joint stock company established by Bank Gospodarstwa Krajowego for the purpose of distributing EU Structural Fund money intended to support venture capital funds), Fund capitalisation PLN 60m, including a 50% share of BBI Capital NFI SA (a private investor) and a 50% share of KFK (Krajowy Fundusz Kapitałowy – a public investor), Guaranteed protection for BBI Capital NFI SA as a private investor by way of a priority right for withdrawing funds from closed fund investments.
42 BBI Capital NFI S.A. BBI Capital NFI SA Warsaw Corporate Center ul. E. Plater Warszawa tel fax Marcin Mizgalski PR Manager tel skype: