Transcript Presentation to Client Name

ASBISC Enterprises PLC
Investors Group meeting
Siarhei Kostevitch, CEO
Marios Christou, CFO
April 2008
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 semiannual 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
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Introduction to ASBIS
• Leading IT distributor across EMEA markets
• particularly strong in the FSU (nearly 50% of sales), the Czech Republic, Slovakia, Romania
and Poland
• 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 and IT component portfolio, distributed on a ‘one-stop-shop’ basis
• CPUs, HDDs, other components, laptops, peripherals, and accessories
• Increasing share of private label, high-margin products and accessories marketed under
Prestigio and Canyon brands
• Distribution network physically present in 23 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
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Milestones
1992-1994
1995
1996-2000
•
Established in
Minsk, Belarus
•
ASBIS incorporated
in Cyprus
•
Distribution
agreement with
Seagate
•
Headquarters moved
to Limassol, Cyprus
•
2001-2002
•
Aggressive
expansion across
the CEE region
•
•
Distribution
agreement with
Intel
•
•
Distribution hub in
Amsterdam
Development of
•
Canyon and Prestigio
private labels
•
Launch of the
IT4Profit platform,
•
Listing on AIM in
October 2006
Distribution
agreement with
AMD
•
Revenues in
excess of
US$1bn
•
Listing on the
WSE
•
Distribution
agreements with
Toshiba and Dell
1,397.7
1,008.8
930.4
679.7
755.7
539.5
379.3
285.8
2000
2001
2002
2003
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2004
2005
2006-2008
Launch of mobile
PC strategy
US$10m private
placement of shares
to institutional
investors
1,600
1,400
1,200
1,000
800
600
400
200
0
2003-2005
2006
2007
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2007 highlights
• Revenues up 39% to US$ 1,397 million
• Gross profit up by 43% to US$ 68 million. Gross profit margin up to 4.9%
• EBITDA up by 54% to US$ 28 million and EBITDA margin up to 2%
• Net profit increased by 69% to US$ 19 million
• Earnings per share of US$ 0.38, up 92% over 2006
• Private brands total revenues increased by 34% to 103 million
• Listing on the WSE on 30 October 2007
• Delisting from AIM
• Asbis appointed Toshiba distributor in Saudi Arabia
• Asbis appointed Dell distributor in Russia, Bulgaria, and Middle East
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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
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
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Operations
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Sales overview
Primary business lines
• Sales and distribution of
- IT components supplied by Intel, AMD, Seagate, Hitachi, etc.
- Private labels (Prestigio, Canyon) manufactured by leading ODM/OEM in the Far East
- Software (Microsoft) and end-user products (Toshiba, Dell)
Value drivers
• Economies of scale due to continuing process automation
• Organic growth in high growth markets
- underlying increase in PC penetration
- in-depth understanding of the local markets
• New product lines
• Increasing market share
Own label products – Canyon and Prestigio
• Increasing share of sales: from 5.8% in 2005 to 7.4% in 2007
• Higher margin brand products
- utilising existing distribution network
- leveraging on the strong components business
- innovative, aspirational products
• Technical support provided locally
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Distribution network
• Four distribution centres in Prague,
Amsterdam, Helsinki & Dubai
• 31 local warehouses in 19 additional
countries
• JIT stock replenishment system
• 331-strong Sales & Marketing team
across all countries of operations
• Local technical support
Helsinki
Tallinn
Moscow
Ballinloough
Vilnlus
Amsterdam
Minsk
Warsaw
Kiev
Kosice
Budapest
Ljubljana
Zagreb
Belgrade
Bucharest
Sofia
Prague
Bratislava
Alma-Aty
Istanbul
Algiers
Tunis
Limassol
Casablanca
Cairo
Hong Kong
Hong Kong
Dubai
Distribution centers
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Financial results
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Results improvements
Key historical data (US$m)
Margins (%)
5%
1,397.7
4,9%
4,7%
1,400
4,1%
1,200
4%
1,008.8
1,000
930.4
67,9
%
US$m
3%
800
60
2%
47,7
1,5%
38,4
40
20
14,312,6
8,4
17,9
16,1
11,1
27,6
25,7
18,7
1,8%
1,6%
2,0%
1,8%
1,4%
1,3%
1,1%
0,9%
1%
0%
2005
Revenues
Gross profit
2006
EBITDA
2007
EBIT
2005
Net profit
Gross margin
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2006
EBITDA margin
2007
EBIT margin
Net margin
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Revenue by markets
Revenues by country – 2007
Geography of operations – Revenues growth rate by country (2007)
100%
28.5%
33.0%
80%
66%
60%
53%
48%
41%
4.0%
15.9%
4.3%
4.8%
43%
44%
40%
25%
9.5%
25%
20%
Russia
Ukraine
Slovakia
Poland
0%
Romania
UAE
Other
r
he
Ot
n
sta
kh
a
z
Ka
Over 60% of the total sales in 2007 generated by top 5 countries
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rai
Uk
ne
kia
va
o
l
S
n ia
ma
o
R
d
l an
Po
ia
ss
Ru
E
UA
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Revenue by products
Revenue breakdown by value (2007)
Products – Three year CAGR in revenue by product (2005-2007)
107%
100%
Other 23.5%
CPU 28.8%
80%
74%
60%
51%
RAM 4.5%
28%
29%
Servers
Flash memory
20%
26%
21%
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Laptops
Software
Accessories and
multimedia
8%
Mainboards and
VGA
0%
PC desktops
HDD 19.0%
Software 11.3%
27%
CPUs
40%
Hdd
Mainboards & VGA
cards 4.6%
Laptops 8.3%
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Private brands revenues and profit contribution
Private brands revenue (2005-2007)
Private brands gross profit contribution (2005-2007)
102,937
120,000.00
14,000
100,000.00
12,000
10,000
76,466
80,000.00
60,000.00
11,655
7,478
8,000
53,580
6,000
40,000.00
4,012
4,000
20,000.00
2,000
0.00
0
2005
2006
2007
2005
Private brands revenue growth (2007)
2006
Gross profit growth (2005-2007)
120,000
14,000
102,937
US$m
11,655
12,000
100,000
80,000
2007
10,000
76,466
7,478
8,000
60,000
6,000
4,012
40,000
4,000
20,000
2,000
0
0
2006
2007
2005
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2006
2007
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2007 cash flow
50
45
40
7
1
8
35
17
30
29
25
20
15
13
1
10
5
0
Opening cash
position
Net cash flow from
operations
Issue of shares
Proceeds from
loans
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Dividend
Capex
Closing cash
position
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Future perspective
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Market overview
•
Number of PCs worldwide expected to almost double before it reaches
saturation
•
Strong position of local PC manufacturers in the emerging markets
•
IT products increasingly affordable with shortening life cycles
•
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$21.7bn in 2010
PC penetration level (June 2006)
Rest of Europe
Russia
Poland
Hungary
Czech Republic
Greece
Spain
Germany
UK
US
10.4
12.3
15.7
17.1
22.6
23.5
27
46.4
58.2
79.4
0
20
25
19.4
15.2
11.4
10
5
3.4%
3%
2%
2.3%
1.6%
1%
0
0%
2005
Source: IDC
3.8%
4%
17.2
13.7
100
5%
% of GDP
US$bn
15
80
IT spending as a percentage of GDP by region (2005)
21.6
20
60
PCs/100 head of population
Source: Gartner
CEE growth market by value of PCs shipments (US$bn)
40
2006
2007
2008
2009
2010
FSU
Source: IDC
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CEE
US
UK
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Forthcoming plans
• Expected further significant growth in the Middle East:
- Acquisition of a warehouse in Dubai (in Jebel Ali free trade zone) to provide support to this
developing region
- Likely establishment of a new subsidiary of ASBIS in the Kingdom of Saudi Arabia –
following Toshiba’s selection of ASBIS as its major distribution partner in the country.
• Final stage of establishing of a company in Turkey – the Turkish market expected to
significantly contribute to ASBIS further growth towards the end of this year and in the years to
come.
• Improvement of operational efficiency – beginning of construction of a warehouse and office
space in Bratislava, Slovakia.
• Good perspectives for laptops market growth expected to have a positive impact on ASBIS
operations, thanks to contracts signed with Toshiba and Dell in the fourth quarter 2007.
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Further information
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Investor Relations ASBIS Group
Constantinos Tziamalis
tel: +357 25857152
fax: +357 25857181
mail: [email protected]
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Appendices
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Historical Profit & Loss statement
[US$]’000s
Revenue
2007
2006
2005
2004
1,397,349
1,008,795
930,389
755,720
Cost of sales
(1,329,409)
(961,102)
(892,020)
(728,774)
Gross profit
67,939
47,693
38,369
26,946
4.9%
4.7%
4.1%
3.6%
(42,203)
(31,609)
(26,065)
(21,762)
Amortisation of goodwill
-
-
(14)
(64)
Profit from operations
25,737
16,084
12,291
5,120
Other operating income
114
383
359
253
25,851
16,467
12,649
5,372
1.9%
1.6%
1.4%
0.7%
27,636
17,927
14,349
7,084
2.0%
1.8%
1.5%
0.9%
(4,442)
21,409
(3,708)
(3,332)
(2,282)
12,759
9,318
3,091
1.5%
1.3%
1.0%
0.4%
(2,723)
(1,689)
(939)
(842)
Effective tax rate (%)
12.7%
13.2%
10.1%
27.2%
PAT
18,686
11,070
8,378
2,249
1.3%
1.1%
0.9%
0.3%
Gross profit margin (%)
Selling and administrative expenses
EBIT
EBIT margin (%)
EBITDA
EBITDA margin (%)
Financial expenses, net
PBT
PBT margin (%)
Taxation expense
PAT margin (%)
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
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2007
2006
2005
2004
Assets
365,672
236,152
207,073
169,502
Current assets
Inventories
Trade receivables
Other current assets
Cash and equivalents
348,367
88,279
209,741
5,150
45,197
227,622
46,178
148,790
4,726
27,928
198,876
58,702
110,971
4,020
25,106
160,993
46,426
84,442
4,256
25,868
Non-current assets
PPE
Intangible assets
Investments
Goodwill
17,304
16,190
1,014
100
-
8,530
7,162
1,268
100
-
8,197
6,664
1,443
90
-
8,509
6,754
1,652
90
14
Liabilities and equity
365,672
236,152
207,073
169,502
Liabilities
269,971
175,999
156,113
126,220
Current liabilities
Trade payables
Current taxation
Bank overdrafts and short-term loans
Other current liabilities
267,636
181,850
314
40,768
44,704
175,214
117,453
278
34,377
23,105
155,212
114,276
20,315
20,620
125,097
86,754
159
19,131
19,053
2,335
786
901
1,124
95,700
11,100
23,518
61,082
60,153
9,600
8,138
42,415
50,960
9,600
8,138
33,222
43,233
9,600
8,138
25,495
Non-current liabilities
Equity
Share capital
Share premium
Reserves
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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Shareholder Structure
Name
KS Holdings Ltd
Number of shares % of share capital
Number of Votes % of votes
25,676,361
46.26%
25,676,361
46.26%
Maizuri Enterprises Ltd
4,800,000
8.65%
4,800,000
8.65%
Alpha Ventures S.A.
3,200,000
5.76%
3,200,000
5.76%
Sangita Enterprises
Ltd
Free float*
2,800,000
5.05%
2,800,000
5.05%
19,023,639
34.28%
19,023,639
34.28%
Total
55,500,000
100.00%
55,500,000
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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