August 2010
August 2010
Presentation
Presentation
Performance
I.
General Information on PKM Duda
II.
Performance in the 1st Half of 2010
III.
Implementation of PKM Duda Strategy
General Information on PKM Duda
Performance in the 1st Half
of 2010.
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
PKM Duda Capital Group
Performance in the 1st Half of 2010
Performance in the 1st Half
of 2010.
Revenue (in PLN mln.)
Six-month consolidated sale revenue of
PKM Duda in the period 2004 – the 1st half of 2010 (in PLN mln.)
Consolidated Revenue of PKM Duda
832 672 -19% Source: PKM Duda 661 +26% I 1 H 2009 1 H 2010 1 H 2008 2 6 2 3 0 7 3 9 6 4 7 3 4 9 6 5 2 6 5 4 5 6 1 6 7 1 0 8 0 1 8 3 2 7 4 3 6 7 2
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
PKM Duda Consolidated Financial
Performance
EBITDA (in PLN mln)
Source: PKM Duda
EBIT (in PLN mln) Net performance(in PLN
mln)
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
30.2 48.9 +62% 44.2 -32% 11.8 31.6 +168% 28.1 -58% -84.3 17.7 13.8 1 H 2009 1 H 2010 1 H 2008 1 H 2008 1 H 2009 1 H 2010 1 H 2008 1 H 2009 1 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
Slight decline in slaughtering
New participants on the market (particularly
intense competition on the market of livestock
purchasing)
Restructuring of Hunter Wild activities
Wielkość uboju trzody chlewnej w zakładzie w Grąbkowie w tys. sztuk
* Cena skupu
PKM Duda and Manufacturing
Segment
-4% 426 444 1 H 2009 1H 2010 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5Prices of pork semi-carcass of R class in PLN per kg*
- 20% 245 306 1H 2009 1 H 2010 External revenue (in PLN mln) + 85% 16.1 8.7 1 H 2009 1 H 2010 EBITDA (in PLN mln) 7.3 - 0.7 I H 2009 1 H 2010 EBIT (in PLN mln)
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
Agricultural Plant
Segment
- 50% 5.6 11.3 I H 2009 I H 2010 External revenue (PLN mln) 2.4 - 2.6 I H 2009 I H 2010 EBITDA (PLN mln) 1.3 - 3.5 I H 2009 I H 2010 EBIT (PLN mln)Rye purchase prices Wheat prizes
Forecast
Wheat in total in purchase,
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
Source:ARR, June 2010
Agricultural Animal
Segment
- 67% 1.2 3.7 1 H 2009 1 H 2010 External revenue (PLN mln) 8.6 8.8 1 H 2009 1 H 2010 EBITDA (PLN mln) 6.2 6.6 1 H 2009 1 H 2010 EBIT (PLN mln) - 1% - 7% ForecastFocus 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
• • Gdynia Gdańsk Rzeszów Szczecin Zielona Góra Wrocław Łódź Operation markets
Potential operation markets
Distribution and Service Segment
Grąbkowo Gorzów Wlkp. Poznań Wałbrzych Katowice Kraków Białystok Olsztyn Ciechanowiec Maków Warszawa Siedlce
Makton Group area of activity
Gniezno - 18% 420 511 1 H 2009 1 H 2010 External revenue (PLN mln) 21.8 15.4 1 H 2009 1 H 2010 EBITDA (PLN mln) 16.9 9.2 1 H 2009 1 H 2010 EBIT (PLN mln) + 42% + 83%
Performance of GK PKM Duda S.A. Segments
Segment contribution to EBITDA Segment contribution to operational profit
External customer revenue structure by segments
0,8%
62,5%
0,2% 36,5%
Segment rolny roślinny Segment handlowy Segment rolny zwierzęcy PKM Duda i segment produkcyjny
44,6%
17,7% 32,8%
5,0%
Segment rolny roślinny Segment handlowy
Segment rolny zwierzęcy PKM Duda i segment produkcyjny
4,2%
53,2% 19,5%
23,1%
Segment rolny roślinny Segment handlowy Segment rolny zwierzęcy
PKM Duda i segment produkcyjny
Cash Flow Analysis
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.
27.2
Cash as on 31.12.2009
35.6
Net cash flow from operational activities
-0.16
PLN mln
Net cash flow from investment activitties
Net cash flow from financial activities -32.1 30.5 Cash as on 30.06.2010 17.5 Cash as on31.12.2008 36.2
Net cash flow from operational activities
-5.7
Net cash flow from investment activities
Net cash flow from financial activities -131 34.8 Cash as om 30.06.2009 2 0 1 0 2 0 0 9
Part 3
ING Bank Śląski; 11,7% Kredyt Bank; 11,5% PKO BP; 7,2% Bank Handlowy; 6,6% Rodzina Duda; 10,8% Pozostali; 52,2%
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
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
17
Wyniki I półrocza 2010.
Duda 2012 Program in Figures
Duda 2012 Program (PRO) has been in progress for 11 months, its initiation took place in October 2009.
20 IBC consultants were hired to support the implementation of the project work.
20 IBC consultants were hired to support the implementation of the project work.
7 initiatives concerning the majority of functional areas of the organization (including Purchasing, Strategy, Finances
, Transportation, Logistics and HR) were implemented
7 initiatives concerning the majority of functional areas of the organization (including Purchasing, Strategy, Finances
, Transportation, Logistics and HR) were implemented
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
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
PMO office monitors the implementation of over 40 internal initiatives – the implementation of recommendations and concepts created within the
respective projects of the Program
PMO office monitors the implementation of over 40 internal initiatives – the implementation of recommendations and concepts created within the
respective projects of the Program
An operational budget for over 100 value centres in almost 20 companies and segments of the Group was
prepared
An operational budget for over 100 value centres in almost 20 companies and segments of the Group was
prepared
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.
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.
4 intiatives, concerning the following areas: Manufacturing, Sales, Distribution and IT Systems are
currently being implemented
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
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
The program requires managing changes and communication within GK, participants of the capital
market and a few thousand contractors.
The program requires managing changes and communication within GK, participants of the capital
market and a few thousand contractors.
Totally successful migration of customers from a closed wholesale warehouse (Taśmowa in Warsaw) to other
venues
Totally successful migration of customers from a closed wholesale warehouse (Taśmowa in Warsaw) to other
venues
Wyniki I półrocza 2010.
The Results of
Duda 2012 Program (1/3)
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
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)
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
The Capital Group
Startegy
Tasks completed
Creating a
purchase
organization
The optimization
of transportation
Field
Wyniki I półrocza 2010.
The Results of
Duda 2012 Program (2/3)
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.
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
Cost and margin
estimate
Optimization of
the working
capital
management
Integration of
distribution
Tasks completed
Obszar
Preparation of a target business model and organizational structure of the distribution
segment
Merger of CM Makton and PSF Detal companies
The Results of
Duda 2012 Program (3/3)
Implementation of MBO system in PKM Duda
Implementation of the incentive scheme in PKM Duda commercial department Initiating the improvement programme
Preparation of operational, budgets, unit budgets of companies and a
consolidated budget of PKM Duda
Incentive schemes
Budget
Tasks completed
Obszar
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
2010 - założenia budżetowe Osiągnięte w I poł. 2010 5,4 mln zł 8,0 mln zł
Wyniki I półrocza 2010.
The Results of
Duda 2012 Program
We maintain the value of savings to be implemented in the period 2010 – 2014 in the minimum amount of PLN 80 mln
The financial results of Duda 2012 Program [ PLN mln]
67.5%
Progress
PLN 8.0 mln
PLN 5.4 mln
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.
