Transcript Presentation to Client Name
ASBISC Enterprises PLC Press conference
August 13th 2008
Siarhei Kostevitch, CEO Marios Christou, CFO Costas Tziamalis, IR
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Important notice
This presentation contains forward looking statements. Actual results may differ materially from the anticipated results as a consequence of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which ASBISc operates, and other risks detailed in our semi annual and annual reports. For the most recent description of the risk factors please see Risk Factors section in the prospectus.
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Company and market overview Page 2 IBD\ING\War O\P\X20070976.9
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Introduction to ASBIS
• Leading IT distributor across EMEA markets • particularly strong in the FSU (above 40% of sales) and Central Eastern Europe (34% of Sales) • Established in 1990 in Minsk, headquartered in Limassol (Cyprus) since 1995 • First choice distribution partner for global industry suppliers • Top ranking (1 to 3 place), preferred regional distribution partner for Intel, AMD, Seagate, Samsung, Microsoft • Wide product of IT component portfolio, distributed on a ‘one-stop-shop’ basis • Already strong in A branded laptops, PCs and servers • Increasing share of private label, high-margin products and accessories marketed under Prestigio and Canyon brands • Distribution network physically present in 25 countries • We reach 20,000 customers in 70 countries owing to unique B2B on-line solution applied to over 50% of sales value • Experienced management and strong operational and financial controls Page 3
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Milestones
1992-1994 1995 1996-2000 2001-2002 2003-2005 2006-2008
• Established in Minsk, Belarus • Distribution agreement with Seagate • Distribution hub in Amsterdam • ASBIS incorporated in Cyprus • Headquarters moved to Limassol, Cyprus • Aggressive expansion across the CEE region • Distribution agreement with Intel
1,600 1,400 1,200 1,000 800 600 400 200 0 285.8
379.3
539.5
679.7
755.7
• Development of Canyon and Prestigio private labels • Launch of mobile PC strategy • Launch of the IT4Profit platform, • Distribution agreement with AMD • US$10m private placement of shares to institutional investors
1,397.7
930.4
1,008.8
504.1
704.8
2000 2001 2002 2003 2004 2005 2006 2007 2007 H1 2008 H1
Page 4 • Listing on AIM in October 2006 • Revenues in excess of US$1bn • Listing on the WSE • Distribution agreements with Toshiba and Dell
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Competitive strengths
Broad geographic coverage in CEE combined with local presence
• Group has strong local presence in a number of countries, unlike most of international competitors • Reduced shipping and revenue collection costs and consistent marketing approach • Growing and secure business due to market differentiation
Experienced management team combined with local expertise
• Key managers have been with the Group for several years • Regional operations managed by local experienced managers with an in-depth understanding of the local markets
Critical mass
• Revenues of US$1.4bn in 2007 with sales in c.70 countries and operating facilities in 23 countries • Authorised distributor status achieved thanks to the size and scope of operations, leading to tangible commercial benefits
Price and stock rotation protection granted by suppliers
• Beneficial contract terms providing protection from declining prices and/or slow moving inventory • Main local competitors tend to buy in the open market
One-stop-shop
• Complete solutions to producers and integrators of server, mobile and desktop segments Page 5
Operations Page 6 IBD\ING\War O\P\X20070976.9
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Sales overview
Primary business lines Sales and distribution of:
1)IT components* 2)Private labels (Canyon, Prestigio) 3)Software (Microsoft) 4)End-user products (Dell, Toshiba) * IT components are supplied by leading world vendors as Intel,AMD, Seagate, Hitachi, etc.
Value drivers Own label products Organic growth Economies of scale
due to continuing automation process
Natural hedge
and high financial security due to operations on many markets
Operations
on markets with growth potential higher than Western Europe: 1) Lower level of IT penetration 2) In-depth understanding of local markets 3) Working for choice no. 1 position 4) Increasing market share
Two own brands:
Canyon and Prestigio 1) Innovative, aspirational products manufactured by leading ODM/OEM in the Far East 2) Utilising existing distribution network worldwide 3) Technical support provided locally 4) Increasing share of sales from 5.8% in 2005 to 7.4 % in 2007 5) Higher margins 6) Leveraging on the strong components business Page 7
Distribution network
• Four distribution centres in Prague, Amsterdam, Helsinki & Dubai • 33 local warehouses in 25 countries • JIT stock replenishment system • 331-strong Sales & Marketing team across all countries of operations • Local technical support
Helsinki Tallinn Riga Ballinloough Vilnlus Minsk Amsterdam Warsaw Prague Kiev Bratislava Kosice Budapest Ljubljana Zagreb Belgrade Bucharest Sofia Sarajevo Istanbul Moscow Algiers Tunis Limassol Casablanca Cairo Dubai
Distribution centers Page 8 IBD\ING\War O\P\X20070976.9
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Alma-Aty
Financial results Page 9 IBD\ING\War O\P\X20070976.9
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Key historical data
Key historical data (US$m)
1,400 1,200 1,000 930.4
800 60 38,4 40 20 12,6 8,4 1,008.8
47,7 17,9 16,1 11,1 1,397.7
67,9 27,6 25,7 18,7
Margins (%)
5% 4% 4,1% 3% 2% 1% 1,5% 1,4% 0,9% 4,7% 1,8% 1,6% 1,1% 4,9% 2,0% 1,8% 1,3% Revenues 2005 Gross profit 2006 EBITDA EBIT 2007 Net profit 0% 2005 Gross margin 2006 EBITDA margin EBIT margin 2007 Net margin Page 10
Financial results for H1 2008
H1 2008 Highlights 1) Revenues increased by 30.5%
to U.S.$ 704,805 from U.S.$ 540,056 in H1 2007.
Revenues and net profit in H1 2008 2) Gross profit increased by 74.1%
to U.S.$ 41,388 from U.S.$ 23,779 H1 2007.
3) Gross profit margin increased to 5.9%
compared to 4.4% in H1 2007.
4) EBITDA increased by 125.5%
to U.S.$ 14,784 from U.S.$ 6,557 in H1 2007.
5) EBITDA margin was 2.1%
compared to 1.2% in H1 2007.
6) Net profit
after taxation
increased by 130.7%
to U.S.$ 7,308 from U.S.$ 3,168 in H1 2007.
7) Earnings per share almost doubled
to U.S. $ 0,1311 from U.S. $ 0,0660 in H1 2007.
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Revenue breakdown
Revenue breakdown (%) by regions 2008 H1 and 2007 H1 Revenue breakdown by product lines 2008 H1 and 2007 H1 Revenue breakdown by regions 2008 Q2 and 2007 Q2 Revenue breakdown by product lines 2008 Q2 and 2007 Q2
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Revenue breakdown
Revenue breakdown (%) by countries H1 2008 and H1 2007 Revenue breakdown (%) by countries Q2 2008 and Q2 2007
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Future perspective Page 14 IBD\ING\War O\P\X20070976.9
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Market overview
• • • • • • Per capita PC penetration in emerging markets will double by 2012 (Gartner) Strong growth of mobile PC penetration booth in Western market and in emerging markets (i.e. According to Gartner: 2003 WE household PC penetration was 42.3%, in 2011 it is expected to reach 88.1%) Faster IT sector growth in the emerging markets underpinned by higher economic growth historically lower IT spending as a percentage of GDP lower level of PC ownership expansion of internet usage CEE IT distribution sector projected to grow at 14.0% CAGR (by volume) and 13.6% (by value) to reach 24.7 million PCs per annum, worth US$21.7bn in 2010 Local presence important for the emerging markets IT products increasingly affordable with shortening life cycles
CEE growth market by value of PCs shipments (US$bn)
25 20 15 10 5 0 11.4
Source: IDC
2005 13.7
2006 15.2
2007 17.2
2008 19.4
2009 21.6
2010
Source: Gartner Source: Gartner
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Market overview
Emerging markets in EMEA Shift to mobility
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EMEA IT Spending
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Source: Microsoft
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Forthcoming plans
•
Expected further significant growth in the Middle East:
- likely establishment of a new subsidiary of ASBIS in the Kingdom of Saudi Arabia – following Toshiba’s selection of ASBIS as its major distribution partner in the country. - utilising newly estabilshed operations in Turkey and acquisited warehouse in UAE in order to build stronger presence in the region •
Continue to utilize Russian market strong growth, prepare for changes
•
Acquire positive results from investment in Latvia and Bosnia & Hertzegovina
•
Improvement of operational efficiency
– beginning of construction of a warehouse and office space in Kosice, Slovakia as the Bratislava based office and warehouse succeed.
•
Good perspectives for laptops market growth
expected to have a positive impact on ASBIS operations, thanks to contracts signed with Toshiba and Dell in the fourth quarter 2007. Page 17
Further information Page 18 IBD\ING\War O\P\X20070976.9
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Investor Relations ASBIS Group Constantinos Tziamalis tel:
+357 25 857 188
fax:
+357 25 857 181
Daniel Kordel tel:
+357 25 857 000
mob:
+357 97 633 793
mob (PL):
+48 509 020 021
: [email protected] Page 19 IBD\ING\War O\P\X20070976.9
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Appendices
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Historical Profit & Loss statement
[US$] ’000s Revenue
Cost of sales
Gross profit
Gross profit margin (%)
Selling and administrative expenses Amortisation of goodwill
Profit from operations
Other operating income
EBIT
EBIT margin (%)
EBITDA
EBITDA margin (%)
Financial expenses, net
PBT
PBT margin (%)
Taxation expense
Effective tax rate (%)
PAT
PAT margin (%)
2007 1,397,349
(1,329,409)
67,939
4.9%
(42,203) -
25,737
114
25,851
1.9%
27,636
2.0%
(4,442)
21,409
1.5%
(2,723)
12.7%
18,686
1.3%
2006 1,008,795
(961,102)
47,693
4.7%
(31,609) -
16,084
383
16,467
1.6%
17,927
1.8%
(3,708)
12,759
1.3%
(1,689)
13.2%
11,070
1.1%
2005 930,389
(892,020)
38,369
4.1%
(26,065) (14)
12,291
359
12,649
1.4%
14,349
1.5%
(3,332)
9,318
1.0%
(939)
10.1%
8,378
0.9%
2004 755,720
(728,774)
26,946
3.6%
(21,762) (64)
5,120
253
5,372
0.7%
7,084
0.9%
(2,282)
3,091
0.4%
(842)
27.2%
2,249
0.3% Note: Data have been subject to rounding adjustments, therefore the sum of the numbers in a column may not conform exactly to the total figure given for that column
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Historical Balance Sheet statement
[US$]’000s Assets
Inventories Trade receivables Other current assets Cash and equivalents
Non-current assets
PPE Intangible assets Investments Goodwill
Liabilities and equity Current liabilities
Trade payables Current taxation Bank overdrafts and short-term loans Other current liabilities
Non-current liabilities Equity
Share capital Share premium Reserves
2007 365,672
88,279 209,741 5,150 45,197 16,190 1,014 100 -
365,672
181,850 314 40,768 44,704 11,100 23,518 61,082
2006 236,152 227,622
46,178 148,790 4,726 27,928
8,530
7,162 1,268 100 -
236,152 175,999 175,214
117,453 278 34,377 23,105
786 60,153
9,600 8,138 42,415
2005 207,073
58,702 110,971 4,020 25,106 6,664 1,443 90 -
207,073
114,276 - 20,315 20,620
901
9,600 8,138 33,222
Note: Data have been subject to rounding adjustments, therefore the sum of the numbers in a column may not conform exactly to the total figure given for that column
2004 169,502 160,993
46,426 84,442 4,256 25,868
8,509
6,754 1,652 90 14
169,502 126,220 125,097
86,754 159 19,131 19,053
1,124 43,233
9,600 8,138 25,495 Page 22 IBD\ING\War O\P\X20070976.9
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Shareholder Structure
Name
KS Holdings Ltd Maizuri Enterprises Ltd Alpha Ventures S.A.
Sangita Enterprises Ltd Free float*
Total Number of shares % of share capital Number of Votes % of votes
25,676,361 4,800,000 3,200,000 2,800,000 19,023,639
55,500,000
46.26% 8.65% 5.76% 5.05% 34.28%
100.00%
25,676,361 4,800,000 3,200,000 2,800,000 19,023,639
55,500,000
46.26% 8.65% 5.76% 5.05% 34.28%
100.00%
* Shareholders with more than 1% stake who are under a lock-up agreement until 30 October 2008 are included in the free float, as well as for all the shares stated above, approximately 15% of the free float is under the lock up agreement. Total free float as at 31 December 2007 was about 20%.
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