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Microsoft PowerPoint - VIVARTIA Presentation September 2006

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Microsoft PowerPoint - VIVARTIA Presentation September 2006 Powered By Docstoc
					The largest food company in Greece, with a significant scale in the European market




            Presentation to Investors, 1st Annual Greek Road Show
                       September 20th & 21st, in London



                                                                              1
                                           Vivartia after the merger


 Becomes a stronger company with

                                     1st in the food sector in Greece
                                     35th food company in Europe
       Market cap >€800mio           9/10 households in Greece consume
         Sales>€930mio               Vivartia’s products
                                     99% of consumers know Vivartia’s
                                     brands and products
                                     94% weighted distribution of retail
                                     outlets
                                   Vivartia has 27 production facilities, is
                                     present in 29 countries and employs
                                     13.000 people


*2006 estimates                                                            2
                          Vivartia reaches 1bio consumers
                                 & 598,000 points of sales
                                in 29 countries worldwide




Production &         Commercial only   Exports
Commercial           Czech Republic    Albania      Malta
Bulgaria   Romania
                     Germany           Austria      Serbia & Montenegro
Cyprus     Russia
                     Hungary           Belarus      Slovenia
Egypt                Italy             Canada       Spain
Greece               Slovakia          Croatia      U.K.
Mexico               Ukraine           FYROM        U.S.A.
Poland                                 Kazakhstan
Portugal                               Lebanon



                                                                          3
                                                  Vision-Mission-Strategy

Vision
We want our brands to be the consumer’s
first choice in the markets we operate



Mission
To create and manage brands that bring                    Increase in
health, nutritional value and pleasure into              shareholders’
human life                                                   value



Strategy
Our strategy is based on the use of our leading
brands to deliver distinctive products and
services based on value, quality and
innovation                                                               4
                                Leadership-Management structure
  Vivartia, will be managed by a 9-member Board of Directors, as of September 1st
2006 until June 30th 2009 inclusive, and will be as follow:

    Dimitris Daskalopoulos               Chairman, executive member
    Spyridon Theodoropoulos              CEO, executive member

    Panayiotis Kanellopoulos,            Vice Chairman, non-executive member
    Konstantinos Apostolidis,            non-executive member
    Apostolos Tamvakakis                 non-executive member
    Ulysses Kyriakopoulos                independent non-executive member
    Eleftherios Antonakopoulos           independent non-executive member
    Vassilios Fourlis                    independent non-executive member
    Marilena Mamidaki                    independent non-executive membe
  Vivartia’s BOD decided the formation of an Executive Board and of the
following BOD Committees:
      -Audit Committee
      -Remuneration Committee
      -Succession Committee (nomination of Candidates & principles of
       corporate governance)                                                    5
                                                      Shareholding structure
                                                                100%


                                                 23,5%

                                                               58,5%     Free Float

                                  35%


                   5,6%
                                                                44%
                                                                         Strategic
                                                               41,5%     investors
    35,9%


   Major        Other           Institutional                 Vivartia
                                                Free Float
shareholders*   strategic**     Investors
                investors


•*Daskalopoulos (26,8%), Theodoropoulos (4,8%), Olayan Group (4,3%)
•** Main shareholders’ family members
                                                                                      6
                          Vivartia’s operational targets & strategy

  The creation of an integrated, well functioning organization of 4 business
divisions, focused on value creation
         Operational targets                              Strategy


                                           Product innovation
  Sustain profitable growth and
capture synergies                          Geographical expansion

 Focus on the organic growth of core         Snacks: International market
businesses                                   Other products: Selective markets
  Seek leadership in all the markets we     Identify and explore opportunities for
operate                                   profitable expansion of core businesses
                                          (M&As, Start-ups)
                                            Seek differentiation opportunities aiming at
                                          minimizing business risks and take advantage
 Expand in the broader food sector        of profitable sectors

                                                                                     7
                                                   Vivartia’s business divisions
                             Dairy & Beverages Division
* Sales 2006 (E)                     (€381mio)
                                    FRESH MILK
                              HIGH PASTEURIZED MILK
                                 CHOCOLATE MILK
                                     YOGURTS
                                     DESSERTS
                                   MILK CREAM
                                   FRESH JUICES
                                 CHEESE & BUTTER
     Catering Services &
    Entertainment Division                                Bakery & Pastry Division
          (€154mio)                                                   I
                                                                 (€327mio)
      QUICK SERVICE
       RESTAURANTS
       COFFEE BARS
                                 €936mio*                      CROISSANTS
                                                             BAKERY SNACKS
         CATERING                                                CAKES
                                                              POTATO CHIPS
                                                             CONFECTIONARY


                                 Frozen Foods Division
                                        (€74mio)

                                FROZEN VEGETABLES
                                  FROZEN DOUGH
                                   READY MEALS
                                   FRESH SALADS
                                                                                     8
                                        Vivartia’s Sales 2006 breakdown


                 Per division                   Per geographical region


                                                                  Greece
                Frozen Foods
                                                                   70%
                    8%           Dairy &
  Catering
                                Beverages
 Services &
                                  41%
Entertainment
    16%

                                               Inter-
                                              national
                 Bakery &                       30%
                  Pastry
                   35%

                                                                           9
                  Vivartia’s EBITDA 2006 Breakdown



                  Frozen Foods
                      10%

                                                Dairy & Beverages
                                                      37%




Bakery & Pastry
     35%


                                 Catering Services &
                                   Entertainm  ent
                                        18%




                                                                    10
                               Vivartia’s Profit margins increasing
                                          EBITDA Margin
                                                VIVARTIA
                                         2005*               2006
        Dairy & Beverages                13,2%             14,2%

        Bakery & Pastry                  15,1%             15,4%

Catering Service & Entertainment         16,4%             16,4%

          Frozen Foods                   19,8%             19,9%

             TOTAL                       14,9%              15,4%

*Excludes the other operating income from the DANONE transaction
                                                                    11
        Vivartia’s Operational strengths in Greece & Cyprus
                                                    Bakery         Catering Services &
                       Dairy & Beverages                                                   Frozen Foods
                                                    & Pastry         Entertainment


                       #1: White Milk: 26%       #1: Croissants: 62%
                                                 #1: Bake Rolls: 96%
                       #1: Fresh Milk: 40%

                     #1: Chocolate Milk: 57%                                             #1: Vegetables:80%
  Leading                                                              #1 G+F: 46,5%
market Shares                                                                              #1: Dough:30%
                    #3: High Pasteurized : 22%

                    #2:Yogurts- Desserts: 28%

                      #1: Fresh Juices: 58%

  Market size                                           245                  635               160
                            1,200
  (in mio €)

  Distribution                                        35,000
                           65,000                                           255*              10,000
   Network
(points of sales)

   Production                                            3                    3                 3
                               7
    Facilities
                                                                                                       12
*G: 183 (Greece 177, Cyprus 5, Bulgaria 1), F: 72 (Greece 69, Cyprus 3)
                                      Strong international presence
                        ar       es
                       M ket Shar 2005 in value
           0%    20%      40%     60%      80%     100%        120%

Bulgaria                                          85%

Romania                                        79%

 Poland                                                99%

Hungary                                          78%

 Russia                                     74%


Egypt**                                63%


Portugal                        46%


  >€483mio market size
   >488,000 points of sales
  11 production facilities (Bulgaria 3, Romania 2, Poland 1,
 Portugal 1, Egypt 2, Russia 1, Mexico 1)
                                                                      13
                                         Dairy & Beverages Market in Greece

              White milk market~€760mio                           Yogurt market~€270mio

     Vivartia: 22%

                                                                          Market Shares 2005 in value
   High                     Vivartia in the whole
               UHT 2%
Pasteurized                    market:30,3%                 60%
 milk 21%                                                                     41,4%
                               Fresh milk
                                  53%                       40%      28,0%

                                            Vivartia: 40%                                 10,7%       9,4%
  Condensed                                                 20%
  Milk 24%                             Major competitors
                                       Friesland: 23,4%,
   Vivartia: 21%                                            0%
                                                                    lta        ge          l           u
                                       Fage: 8,8%                            Fa          ga          no
                                                                  De                   ev          ou
                                                                                      M           N
                                       Mevgal: 7,5 %


Source: Nielsen, Company’s estimates

                                                                                                           14
                           Dairy & Beverages-Growth strategy

                                 -Condensed milk-”Vlachas”,Functional
   Product innovation
                                 milk-”Daily “, Desserts-”Milky", Infant
     New segments                nutrition


                                 -Acquisition of Nestle Hellas's Vlachas
 Lead consolidation play
                                 business in Greece
in the Greek milk market
                                 -Agreement to acquire 21% of Mevgal (3rd
                                 dairy company in Greece



                                  -Leading consolidation in the Cypriot dairy
                                  market through acquisition of Christies
  Penetrate/Expand in             Dairies Ltd, no. 2 player in Cyprus
 International markets            -Exploit Delta’s strong brand equity in
                                  Balkan countries (Bulgaria and Romania)
        Exports                   -Leverage off Chipita’s worldwide
                                  distribution network with larger range of
                                  Vivartia’s products

                                                                           15
                                                    Bakery & Pastry Market in Greece
        Sweet Dough (Pastry +Cakes): €115mio                                 Salty Snacks: €130mio
         Sweet Dough 2005 (in value) Break down Vivartia in the whole     Salty Snacks 2005 (in value) breakdown
        Cakes 20,6%                                market: 51,8%
                                                                                              Vivartia: >96%
                                       Croissants
                                                                         Bake Rolls
                                         59,7%
                                                                           8,4%
                                                                                                       Chips
                                                                                                       59,5%
                                             Major competitors in
                                              the whole market
                                                                    Extruded
Rest Dough*                                    FERRERO: 11%
                                                                     32,1%
   19,7%                                       TOTTIS: 10,6%,
                                               ELBISCO: 5,7 %
                Vivartia in the pastry
                 market** : 63,7%
                                                                        Vivartia’s holds:
                                                                         14,5% of the whole market of salty snacks
*(Tsoureki single+family, struddels)
                                                                         >96% of the bake rolls , controlling the
** (croissants+ rest dough)                                             whole segment
Source: Nielsen, Company’s estimates
                                                                                                            16
                         Bakery & Pastry-Growth Strategy
                                -Pita Bakes
  Product innovation            -Paximadia (traditional Greek
                                rusks)


                                -J/V in Nigeria for the production and
                                distribution of croissants
Geographical expansion          -Development of Russia
                                -Explore new markets such as Saudi
                                Arabia, India, China (through
                                exports)



                                -Supply Pan-European retail
Exploit growth of PL            network (such as Lidl , Aldi,
                                Carrefour, Tesco)


                                                                     17
                                              Catering Services & Entertainment Market
                                                                              in Greece

 Total Food Services Market~€1,7bio                         Total Coffee Services Market~€720mio

                     Share of consumer visits in 2005
                                                                     Share of consumer visits in 2005
                                    Goody's
                 Taverns 10,6%       15,3%                             Flocafe 9,8%
   Unbranded Pizza                             Branded                                         Branded
        8,0%                                  Competitors                                     Competitors
                                                15,5%                                           17,6%


  Unbranded
Sandwich 17,4%
                                                               Unbranded
                                    Souvlaki 33,2%            coffee stores
                                                                 72,6%
Source: Prisma, Options, Survey 2005
Market shares in the Branded Food Services Market:           Market shares in the Branded Coffee Services Market
  Goody’s: 49,7%                                              Flocafe: 35,7%

  Mc Donald's: 5,1%                                           Grigoris: 18,4%
                                                              Everest: 13,3%                                18
                                     Catering Services & Entertainment-
                                                       Growth Strategy
                                            -New differentiated products e.g. “Mediterranean
  Increase in System                        menu”
 Sales (ticket count &                      -Exploitation of the triangle «food, drinks,
    ticket average)                         desserts» e.g. increase the offer of “combo meals”
                                            -Penetrate day-part and deploy new services
Growth of System Sales (2001-2005)
                                            (business delivery, entertainment corners)
Goody’s: +4,7% CAGR, Flocafe: +19,7% CAGR   - Deploy nutritional & quality campaign

   Optimization of                          -Goody’s stores: Restructuring, renovation
      network
                                            -Flocafe stores: Network development

  Strengthen H/C in                         -New co-operations (wholesalers, ships, airports
                                            hotels, clinics)
 food wholesales and
    H.O.R.E.C.A                             -New Channels
                                            -Exports

Exploit new concept                         - Snacking concept, “Me Gusto”-operation of 2
                                            pilot stores in 2007

                                                                                           19
                                                   Frozen Foods Market in Greece

           Frozen vegetables~€69mio                                   Frozen dough~€88mio

                                                                       Market Shares 2005 in value
              Market Shares 2005 in value

          Other sm all
          players<5%                                   40%       30,0%
              8%
                                                                            21,1%                 23,2%
                                       Uncle Stathis
                                          80%
ROB 12%                                                20%
                                                                                    11,4% 14,3%


                                                       0%         i
                                                                 m         is    lfa             rs
                                                               Zi        ak             O
                                                                                         B
                                                                                               he
                                                           isi         an       A      R     O
                                                                                              t
                                                         hr           K
Source: IRI                                             C




                                                                                                      20
                          Frozen Foods-Growth Strategy


                              -Development of shelf products
                              “tomato products”
New products categories       -Frozen Pasta with vegetables (“Mix
                              &Cook”)



                              -Investment in Bulgaria for lower
                              cost
  Expand SE activity
                              -Exports in Romania & Serbia
                              -Creation of one distribution
                              network with Chipita in Bulgaria




                                                                    21
Synergies-Forecasts for 2006-2008




                                    22
                                     Assumptions on Projections



Delta’s sales CAGR (‘05-’08) is 6%, including Vlachas’ sales (half a year in 06,
full year 07 onwards)

Chipita’s sales CAGR (‘05-’08) is 10%

Delta’s and Chipita’s EBITDA CAGR (‘05-’08) is 8% and 12% respectively

WC remains constant as % of sales

CAPEX does not exceed 4% of sales

Dividend payout ratio 45%




                                                                               23
                              Quantification of synergies


         Synergies in EBITDA 2007& 2008 (in mio €)


Gross Profit
                                                     9 - 11

Media buying, Distribution, Logistics &
General expenses                                     11- 13

Effect of sales on EBITDA                            2-3

TOTAL                                                22- 27


Synergies in 2006 will offset costs of merger



                                                              24
                                                Sourcing – Distribution-POS
                         Sourcing                 Distribution             POS
               -Exclusive cooperation with
                                                 •Representatives
Dairy products Greek farmers and own farm                           -Super markets
               in Komotini                       •Distributors
& juices                                                            -Small POS, e.g. Kiosks
                 - Imports for juices            Chilled network
                 Main resources: milk and
                 juices

                 -Exclusive cooperation with
                 Greek farmers                  -Distributors
                 -Sourcing from facilities in                       -Super markets
Frozen Foods                                    Frozen network
                 Bulgaria
                 Main resources: fresh
                 vegetables, flour

                 -Local companies & imports     -Representatives
 Snacks                                                             -Super markets
                 Main resources: flour, praline, -Distributors      -Small POS, e.g. Kiosks
                 chocolate                       Dry network
                                                                                      25
                 Forecasts* for 2006-2008 including synergies

  (In mio €)               Pro-forma     2006          2007                  CAGR
                          2005 (**)                                 2008      (%)


Sales                        881         936           1.011        1.092    8%


EBITDA                       132         144           166          188     14,3%

EBITDA %                     14,9%       15,4%         16,4%        17,2%

Free Cash Flow                41          72             87         99      17,3%
ROIC                          6,1%       7,0%           8,7%        10,4%

Net Debt/EBITDA               2,7         2,3           1,8         1,4

EPS                           0,48        0,54          0,76        0,95    32,6%

* Excludes M&A projects
**Excludes the other operating income from the DANONE transaction
                                                                                    26
                              COMPARATIVE VALUATION

                                                                     EV/EBITDA
                         P/E 06-07    P/S 06-07     P/BV 06-07
                                                                        06-07


VIVARTIA                21,6 – 15,4   0,83 – 0,77      1,5 – 1,4       8,4 – 7,1


INDUSTRY AVERAGE          18,6-16,9   1,79 – 1,69      3,1 – 2,8       11,0 – 10,1

Premium%/ (Discount%)   16,1 – (8,8) (53,6) – (54,4) (51,6) – (50)   (23,6) – (29,7)

 Source: JCF, Company’s estimates




                                                                                   27
                     Vivartia’s potential                         Vivartia 2006-on
   Capital source                                                         GROWTH
                                          Delta 2005
                                                                  •Companies with improved
                                        RESTRUCTURING             earnings growth
Free Cash                              •Improving returns on      •Ability to generate cash
  Flow                                 capital and operational
                                                                  • Higher returns on capital
                                       performance
                                                                  •Sustainable competitive
                                       •Corporate restructuring
                                                                  advantages
                                       • Appropriate financial
              Delta 2004               structure
                                       •Merger decision
               SUM of the Parts
            Holding structure led to
            discount vs NAV,
            despite improved
            operational performance.




                                                                         Free Cash Flow
                                                                            multiples
                    5-10x                      8-15x                   12-25x
                                                                                                28
Every day we take care of the people who
                  consume our products




                                      29
                          APPENDIX

-Historical Timeline
-Financial Performance of Vivartia’s divisions 2003-2005




                                                           30
                        Builds its first milk
                                                                             Historical Timeline
                                                                 Enters in the fruit
                        pasteurizing plant                       juices market
    1952                     1962                      1980          1989                       1990
                                                                                      Enters in the Athens
   Mr Aristides                          Achieves the #1st position                   Stock Exchange, by
   Daskalopoulos, founds                 in ice cream production                      raising €44mio in IPO
   Delta Dairy, a family                 and sales in Greece
   business in Athens
   producing yogurt and
   distribution milk.
                                                                  Spin offs of dairy and ice cream
                      Appoints Dimitris                           division
                      Daskalopoulos to CEO
                                                                  Creation of holding company,
                      Partners with Danone                        named Delta Holding
   1991                   1993                  1994                                     1999
  Expands in Balkans,               Enters in the frozen food      Buy out of 1. Danone’s stake in Delta
  primarily with ice                business with the              Dairy and 2. 10,5% participation of
  cream                             acquisition of froza and a     Philip Morris in GFF
                                    majority share of Barba
                                                                   Sale of treasury stocks
                                    Stathis                                                                   Sale of its 96,53% total
                    Attains
                                                                   Debt refinancing through US PP and         participation in Delta
                    majority stake
                                                                   European Syndicated loan markets           Ice Cream
                    in Goody’s
    2000
                                 2001            2004                2005                           2006
Appoints Dimitris Daskalopoulos
                                Begins 3 year strategic                          Agreement to acquire 21% of Mevgal
to Chairman
                                plan, targeting increased
                                                                                 Preliminary agreement to acquire the
Enters in the quick service     cash flows and reduced
                                                                                 Cyprian company, Christies Dairies Ltd
restaurants, through the        debt.
acquisition of 20% of Goody’s                                                    Merge by absorption of its subsidiaries,
                                                                                 Delta Dairy, General Frozen Foods, Goody’s
Partners with ARLA FOODS                                                                                                   31
                                                                                 and Chipita International, creating
Amba
                                                                                 VIVARTIA
                             Vivartia’s divisions sales trend 2003-2005
                                                                                              In mio €
                       Dairy & Beverages*
                                                                           Bakery & Confectionery**
                 339,7         359,0     367,5
                                                                                                    297,1
      400                                                                           255,4
                                                                   217,6
                                                      300


      200
                CARG: +4,0%                           200

                                                      100                         CAGR:+16,8%
                                                       0
          0                                                    2003               2004             2005
                2003         2004       2005

          Catering Services & Entertainment*                          Frozen Foods*
                140          148,4      146,2                66,9            68,6           69,1
                                                 80
    150
                                                 60
    100
                                                 40
              CARG: +2,2%                                           CARG: 1,6%
    50
                                                 20

     0                                           0
              2003         2004        2005
                                                            2003           2004          2005
*ex-Delta’s subsidiaries (Delta Dairy, Goody’s, General Frozen Foods)
                                                                                                            32
*ex-Chipita International
                 Vivartia’s divisions EBITDA Trend 2003-2005
                                                                         Bakery & Confectionery**
                          Dairy & Beverages*
             CARG:+34,5%                       65,5                                               44,8
                                                                                   35,97
     60                        44,4                        45       30,3
                 36,2
     40                                                    30
                                                                              CAGR:+21,6%
     20                                                    15
     0
            2003           2004              2005          0
                                                                  2003            2004          2005
     Catering Services & Entertainment*                             Frozen Foods*
           24,1           23,9         23,9                                              13,6
                                                           11,1            12,5

20
                                                      10

                                                                           CARG:+10,7%
 0                                                    0
          2003          2004          2005
                                              2003       2004     2005
*ex-Delta’s subsidiaries (Delta Dairy, Goody’s, General Frozen Foods)
                                                                                                         33
*ex-Chipita International
                          Vivartia’s divisions EBT Trend 2003- 2005
                   Dairy & Beverages*
                                                  In mio €                     Bakery & Confectionery**

                                         52,1                           13,6                           14,8
60                                                           15

              CAGR: +66,5%                                                               9,6
50
                                                             10
40                          24,0
             18,8
30                                                           5

20
                                                             0
10                                                                  2003            2004           2005

 0
            2003          2004          2005
     Catering Services & Entertainment*                                    Frozen Foods*
                   17,9          18,0      18,7                                                 10,6
                                                                                   9,5
     20,0
                                                                  7,2
                                                      10,0
     15,0

     10,0
                                                       5,0
                                                                         CAGR: +21,3%
      5,0             CAGR: +2,2 %
      0,0
               2003         2004          2005         0,0
                                                             2003              2004            2005
*ex-Delta’s subsidiaries (Delta Dairy, Goody’s, General Frozen Foods)
                                                                                                              34
*ex-Chipita International
We provide a home of leading food brands




                                      35
                                                                   Disclaimer


This document contains forward-looking statements that involve risks and
uncertainties. These statements usually contain words such as “believe”,
“estimate”, “expect”, and similar expressions that are used to express forward
looking statements. By their nature forward looking statements for future events
and they may not prove accurate.


Although we believe that expectations reflected in this document are
reasonable given the company’s strategy, we cannot assure you that the future
results will meet these expectations.




                                                                                   36

				
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