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Invalda INVL Investor Presentation 2012
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Investor Presentation
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Invalida
The results of AB Invalida group for 2011
Vilnius, April 30, 2012
What is AB Invalda?
Invalda
- AB Invalda is one of the largest Lithuanian investment companies whose primary objective is to steadily increase the investor equity value
AB Invalda actively manages its investments, exercising control or significant influence over target businesses.
More about businesses managed by AB Invalda can be found in the slides No. 25-33 and on www.invalda.lt
- AB Invalda started its activity in 1991
Its shares have been traded on the NASDAQ OMX Vilnius exchange since 1995.
More about shares of AB Invalda can be found in the slides No. 9-10.
Invalda
Management principles
AB Invalda follows these principles:
- Competitiveness and independence
Each business of the Group must be competitive and self-sustainable, have professional management teams capable of forming business strategy and implementing ambitious objectives.
- Risk segregation
AB Invalda does not grant guarantees or assume any obligations in respect of individual businesses, and individual businesses do not assume any obligations in respect of each other.
- Diversification
The company diversifies its investment in order to avoid any excessive risk concentration in homogeneous business sectors.
- Transparency
AB Invalda discloses information in adherence to the principle that market participants must get equivalent information at the same time, except for such cases where the publication of the information is not possible because of the obligations assumed in respect of third parties, and/or the disclosure may adversely affect the businesses' ability to compete.
- Avoidance of conflicts of interest
Managers of the Group companies do not participate in competing activities.
Investment philosophy
Invalda
- AB Invalda is a company driven by shareholder value creation
AB Invalda seeks to acquire competitive businesses that, with additional capital or management resources, may successfully be developed organically, consolidate fragmented markets or otherwise increase value.
AB Invalda invests into undervalued assets that, when restructured, may facilitate significant value increase.
AB Invalda does not avoid complex business transactions and opportunities. Such approach is supported by our belief that the efforts will lead to good results.
- Long-term prospects
With a view to maximize the investment value, AB Invalda normally pursues long-term investment horizon.
AB Invalda offers businesses for sale only when they are properly prepared for sale and become attractive to potential buyers, or having received any proposal matching future prospects of the businesses.
- A synergy of different competences may potentially increase the investment
Invalda
AB Invalda group activity sectors
Shareholder structure
Invalid
Votes owned as of 31-12-2011
Shareholder structure
Invalida
Votes for the announcement day of this audited result presentation
Management
Invalda
Vytautas Bucas - Chairman of the Board
Vytautas Bucas is a member of ACCA (Association of Chartered Certified Accountants, UK) since 2002. After graduation from his studies at Vilnius University for a period he worked at the audit company Arthur Andersen where he started as an auditor's assistant and then grew to the position of the Chief auditor. Later on, in SEB Bank he was managing the Finance and IT departments, was holding the position of the Deputy President, and was a Member of the Board of the Bank. For the past five years he was a member of the Board at companies which are operating in the finance and real estate sector, also the pharmaceuticals company AB Sanitas. Currently he is a member of the Boards of UAB Inreal Pastatu Prieziura, UAB BAIP Group and UAB Litagra, Chairman of the Board of AB Vilniaus Baldai, UAB Invaldos Nekilnojamojo Turto Fondas and AB Invalda which he joined in 2006.
Dalius Kaziunas - President (since January 2, 2012), Member of the Board
Dalius Kaziunas holds a Master's degree in economics from Vilnius University. Dalius Kaziunas has worked at the financial brokerage company AB Finasta for more than 10 years and he has been its General Manager for six years. He was a General Manager and Chairman of the Board of the AB bank Finasta in 2008-2009. Dalius Kaziunas has been working as an advisor for AB Invalda for the past two years and is a Member of its Board as well as a Member of the Boards of AB Vilniaus Baldai, UAB Inreal Pastatu Prieziura, UAB Litagra, and UAB BAIP Group.
Darius Sulnis - Member of the Board
Darius Sulnis took his Master's degree in accounting and audit at Vilnius University. He has managed the financial brokerage firm AB Finasta for eight years and a real estate company UAB Inreal valdymas for four years. Furthermore, Darius Sulnis had been a member of Boards and Supervisory Boards of several Polish, Latvian and Lithuanian companies. Currently Darius Sulnis is a Member of the Board of the investment company AB Invalda where he was a president until 2012. He is also a Member of the Boards of AB Vilniaus Baldai, UAB Invaldos Nekilnojamojo Turto Fondas and UAB Litagra.
The shares of AB Invalda
Invalda
| Total number of | 51 659 758 (shares) |
|---|---|
| Nominal (par) value | 1 litas |
| ISIN | LT0000102279 |
| Name | IVL1L |
| Exchange | NASDAQ OMX |
| Vilnius | |
| List | BALTIC MAIN LIST |
On March 30, 2012 the conversion face value of 32.44 million litas convertible bonds resulted the increase of share capital of Invalda AB by 5.898.182 litas from 51 659 758 litas to 57.557.940 litas 5 898 182 ordinary registered shares of 1 litas par value was issued.
| 2011 | 2010 | |
|---|---|---|
| Share price, € : | ||
| - open | 2.000 | 0.533 |
| - highest | 2.650 | 2.546 |
| - lowest | 1.733 | 0.521 |
| Vast | ||
| Volume traded, € | 1.943 | 1.989 |
| million | 10.14 | 8.24 |
Capitalization, m EUR
Trading in shares
Invalid
OMXV index is an all-share index consisting of all the shares listed on the Main and Secondary lists of the NASDAQ OMX Vilnius with exception of the shares of the companies where a single shareholder controls more than 90% of the outstanding shares. Dow Jones Stoxx EU Enlarged TMI index covers approximately 95% of the free float market capitalization of the New Europe countries, including Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia.
Invalida
Financial results
Key events of 2011
(1)
Invalda
Investments, divestments and other events
(1)
- AB Tiltra Group and Trakcja Polska, S.A. merger transaction was completed with value of 679.5 million litas (PLN 777.5 million);
- AB Invalda and other shareholders sold AB Sanitas to a Canadian company Valeant Pharmaceuticals International, Inc., for the price of 1.260 million litas (€365 million) in which 26.5 percent was owned by AB Invalda;
- AB Invalda paid down all liabilities to credit institutions;
- AB Invalda group company acquired a 36.9 percent stake in an agricultural company UAB Litagra for the price of 38.6 million litas (€11.2 million);
- UAB BAIP group acquired 100 percent stake in a Norwegian company Norway Registers Development, AS which owns 70.7 percent shares of UAB NRD in Lithuania.
- UAB Inreal pastatu prieziura acquired 100 percent stake in a facility management company UAB Jurita which manages residential buildings in Vilnius' Justiniskes residential area.
12
Key events of 2011
(2)
Invalda
Investments, divestments and other events
- AB Invalda group company acquired 100 percent stake in UAB Lauko Gelininkystes Bandymu Stotis.
- AB Invalda held 20 million litas (€5.79 million) certificate of deposit in AB bank Snoras. Due to the bank bankruptcy, a provision equal to 100 percent of the invested amount was formed.
- AB Invalda signed a contract for the sale of a 29.5 percent stake of metal processing company AB Umega.
- AB Invalda increased the stake in yarn spinning company AB Vernitas from 11.7 percent to more than 20 percent.
- AB Invalda was further increasing investments in agricultural land portfolio.
Key events of 2011
(3)
Invalda
A merger of Trakcja Polska, S.A. and AB Tiltra Group completed in April
AB Invalda sold a 44.8 percent stake in AB Tiltra Group and a 43.4 percent stake in AB Kauno Tiltai for 274.5 million litas (PLN 314.1 million)*.
AB Invalda in turn obtained: a) a 12.5 percent stake in Trakcja Polska, S.A. for the price of 115.6 million litas (PLN 132.3 million), b) Trakcja Polska, S.A. bonds for the price of almost 104.7 million litas (PLN 119.8 million), c) 54 million litas (PLN 62 million) in cash*.
AB Invalda, which currently owns 12.5 percent of Trakcja – Tiltra, S.A. shares, remains as a financial investor.
Due to the reason that AB Tiltra Group did not achieve the planned results that were agreed in the merger contract, AB Tiltra Group share price attributable to AB Invalda was reduced by 40.2 LTL million (PLN 52.1 million) in December 2011. The maximum reduction could have amounted up to 46.7 million litas (PLN 60.6 million)*.
AB Invalda standalone profit from the transaction was 157.6 million litas (€45.6 million), consolidated – 110.5 million litas (€32 million).
*the exchange rate on agreement date
TRAKCJA TILTRA
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Key events of 2011
(4)
Invalda
- The sale of AB Sanitas shares to Valeant Pharmaceuticals International, Inc. was completed on August 19, 2011
AB Invalda sold 26.5 percent stake in AB Sanitas, for which Valeant Pharmaceuticals International, Inc. paid 286.7 million litas (€83 million) or 34.74 litas (€10.06) per share.
AB Invalda additionally received 28.9 million litas (€8.37 million), taking into account share price adjustment mechanism set out in the agreement signed on October 24th, 2008, (regarding the sale of 20.3 percent of the shares in AB Sanitas).
Net gain in the consolidated financial statements of AB Invalda and standalone financial statements of AB Invalda is 185.9 million litas (€53.8 million) and 204.5 million litas (€59.2 million) respectively.
This is one of the most successful deals during AB Invalda history which added a lot of value to other financial investors, small shareholders and to AB Sanitas management.
SANITAS
GROUP
Key events of 2011
(5)
Invalda
- The agreement regarding investments in UAB Litagra was signed
AB Invalda acquired 36.9 percent stake in UAB Litagra shares for the price of 38.6 million litas (€11.2 million). 37.1 million litas (€10.7 million) were invested into the new share issue of UAB Litagra in December of 2011.
The enterprise value of UAB Litagra has been estimated at about 200 million litas (€57.9 million) before the new share issue.
UAB Litagra turnover grew 7.7 percent to 338.5 million litas (€98.0 million) in 2011.
The activities of UAB Litagra group companies include the primary crop and livestock (milk) production, grain processing and agricultural services. The group companies sell plant protection products, fertilizers, seeds, compound feed, feed supplements, veterinary products, grain trading, providing grain and other raw materials drying, cleaning, handling and storage services.
LITAGRA
16
Key events of 2011
(6)
Invalda
- Investments into a certificate of deposit in AB bank Snoras
AB Invalda acquired a 20 million litas (€5.8 million) certificate of deposit in AB bank Snoras.
AB bank Snoras was declared bankrupt in December 2011.
After considering the possibilities of investment recovery, AB Invalda formed a provision equal to 100 percent for the invested amount.
Key events of 2011
(7)
Invald
- UAB BAIP group acquired a Norwegian company
UAB BAIP group acquired a 100 percent stake in Norwegian company Norway Registers Development, AS for the price of 4.14 million litas (€1.2 million). Norway Registers Development, AS owns 70.73 percent shares of UAB NRD in Lithuania.
In 2011 Norway Registers Development, AS group consolidated revenues totaled 7.6 million litas (€2.2 million), net profit (after minority interest) was – 386.7 thousand litas (€112 thousand).
The acquired company specializes in the programming of register systems including legislation development, project implementation and support.
NRD
18
Key events of 2011
(8)
Invalda
Other events
AB Invalda paid down all financial liabilities to credit institutions.
A facility management company UAB Jurita that manages residential buildings in Vilnius' Justiniskes residential area was acquired for the price of 2.5 million litas (€0.7 million) from Vilnius City Municipality.
AB Invalda group acquired 51 percent of UAB Lauko Gelininkystes Bandymu Stotis shares from the State Property Fund for the price of 911 thousand litas (€263.8 thousand). Later on, the stake was increased up to 100 percent. Main activities of the company are ornamental plants' nursery, perennial and annual flower cultivation and trade.
In December 2011 AB Invalda signed a contract for the sale of 29.5 percent shares of the metal processing company AB Umega.
AB Invalda group increased stake in yarn spinning company AB Vernitas from 11.7 percent up to more than 20 percent.
A company UAB Inreal GEO which provides land geodetic measurement services was established.
19
Invalda
Significant events since the end of the last financial year
The notification from the bondholders to covert 32.44 million litas (€ 9.4 million) par value bonds into Invalda AB shares was received on March 28, 2012.
After the conversion, Invalda AB share capital was increased by 5.898.182 litas (€ 1.708.231,60) from 51 659 758 litas (€ 14.961.700,07) to 57.557.940 litas (€ 16.669.931,60). 5 898 182 ordinary registered shares of 1 litas (€ 0.29) par value were issued. The conversion price of new shares issue of 5.898.182 (€ 1.708.231,60) litas is 5.5 litas (€ 1.59) per share.
Invalda AB issued convertible 25 million litas (€ 7.2 million) par value bonds on December 1, 2008. These bonds were acquired by RB Finansai UAB. Another convertible 7.44 million litas (€ 2.2 million) par value bonds issue was issued on January 30, 2010; it was sold to DIM Investment UAB. The annual interest rate for both bond issues was 9.9 percent, maturity date – July 2, 2012 (in case the bonds are not converted at earlier date).
After the conversion RB Finansai UAB received 7.9 percent and DIM Investment UAB - 2.35 percent of Invalda AB shares.
On March 30th, 2012 new Articles of Association of Invalda AB were registered.
Activity results of AB Invalda
Invalda
| Consolidated | Parent company | |||
|---|---|---|---|---|
| million litas | 2011 | 2010 | 2011 | 2010 |
| Assets | 646.4 | 597.3 | 399.0 | 307.0 |
| Equity | 415.3 | 200.1 | 360.7 | 85.9 |
| Liabilities | 231.1 | 397.2 | 38.3 | 221.1 |
| Profit (loss) for the period | 216.5 | 52.5 | 274.9 | (10.5) |
| Attributable to equity holders of the parent company | 209.0 | 42.5 | 274.9 | (10.5) |
detailed on slide 22
Invalda
Equity and liabilities
| A8 Invalda, million litas | 2011 | 2010 |
|---|---|---|
| Equity | 360.7 | 85.9 |
| Liabilities to financial institutions | 0.0 | 138.7 |
| of which are long term | 0.0 | 94.3 |
| Liabilities to group companies | 0.4 | 46.6 |
| Bonds | 34.1 | 32.4 |
| Other liabilities | 3.8 | 3.0 |
| Total liabilities | 38.3 | 221.1 |
| Total equity and liabilities | 399.0 | 307.0 |
Invalda
AB Invalda assets (book value)
| Asset | Book value
December 31, 2011,
million litas | Description |
| --- | --- | --- |
| Furniture manufacturing | 13.9 | 72.14 percent stake of AB Vilniaus Baldai, the share value on December 31, 2011 in NASDAQ OMX Vilnius is 99.7 million litas (€28.9 million) |
| Real estate | 142.8 | Investments into the real estate and loans granted to the sector companies |
| Facility management | 7.4 | 100 percent stake in UAB Inreal Pastatu Prieziura, UAB Priemiestis and UAB Jurita; loans granted to the sector companies |
| Agricultural | 39.4 | Investments into UAB Litagra shares |
| Information technology infrastructure sector | 11.4 | 80 percent stake in UAB BAIP Group and loans granted |
| Rail and road construction | 15.5 | 12.5 percent stake in Trakcja – Tiltra, S.A. |
| Other investments | 42.9 | Investments into AB Umega, AB Vernitas shares and other assets |
| Deferred income tax assets | 19.9 | Deferred income tax assets |
| Cash, deposits, short-term loans and investments | 105.8 | Cash, deposits, other financial investments |
| Total assets | 399.0 | |
Results
Invalida
- Impact to the profit (loss) statement of AB Invalida due to group sectors and financial investments
| million litas | 2011 | 2010 |
|---|---|---|
| Furniture manufacturing | 19.3 | 20.1 |
| Real estate | (17.8) | 0.6 |
| Change in share price of Trakcja-Tiltra, S.A. | (76.6) | - |
| Information technology infrastructure sector | (0.7) | (0.5) |
| Facilities management | 1.03 | 0.4 |
| Road construction (segment sold) | 110.5 | 11.4 |
| Pharmaceuticals (segment sold) | 187.5 | 14.1 |
| Other companies | (14.2) | (3.6) |
| Total | 209.0 | 42.5 |
(1)
VILNIUS
FURNITURE
ANNO 1882
Invalids
Furniture manufacturing
| million litas | 2011 | 2010 | Change | Change, % |
|---|---|---|---|---|
| Sales | 238.4 | 197.2 | 41.2 | 21 |
| EBITDA | 36.1 | 38.2 | (2.1) | (0.05) |
| Net profit | 26.8 | 27.9 | (1.1) | (0.04) |
| Capitalization | 138.2 | 127.5 | 10.7 | 8 |
| Number of employees | 507 | 453 | 54 | 12 |
- Shares of AB Vilniaus Baldai are listed on NASDAQ OMX Vilnius stock exchange
More information about company's activities and results are provided on www.vilniausbaldai.lt
Furniture manufacturing
(2)
VILNIUS FURNITURE ANNO 1883
Invalda
Trends
An increase of sales offset the decline in margins on the rising prices of raw materials.
The amount of 15.5 million litas (€4.5 million) was allocated for dividends in 2011, which is 4 litas (€1.20) per share.
Strong sales growth is not expected in 2012, but the trends are more favourable in raw materials market than in 2011.
The goal of AB Vilniaus Baldai is to improve manufacturing processes, increase productivity and remain one of the most competitive companies in the furniture manufacturing sector.
Furniture manufacturing sector of AB Invalda group
Real estate sector
(1)
in real estate
Invalida
| million litas | 2011 | 2010 | Change | Change, % |
|---|---|---|---|---|
| Value of real estate | 255.4 | 247.8 | 7.6 | 3 |
| Commercial real estate | 155.6 | 175.8 | (20.2) | (11) |
| Real estate for development | 57.1 | 50.7 | 6.4 | 13 |
| Residential real estate | 7.9 | 5.5 | 2.4 | 44 |
| Agricultural land | 34.8 | 15.8 | 19.0 | 120 |
| Shareholders’ equity (incl. loans from AB Invalida) | 131.9 | 116.7 | 15.2 | 13 |
| Loans from credit institutions | 121.8 | 142.5 | (20.7) | (15) |
| Rental income | 16.7 | 18.4 | (1.7) | (9) |
| from this owned by clients | 5.0 | 5.2 | (0.2) | (4) |
| Change of the real estate value | (15.6) | 1.2 | (14.4) | - |
| Companies’ sales result, allowance and other non-monetary items | 1.5 | 4.2 | (2.7) | (64) |
| Result of the real estate sector | (17.9) | 2.9 | (15) | - |
| Number of employees | 67 | 51 | 16 | 31 |
| --- | --- | --- | --- | --- |
27
Real estate sector
(2)
in real estate
Invalida
Trends
Real estate sector companies of AB Invalda operate under INREAL brand.
Revaluation of investment property led to the 15.6 million litas (€4.5 million) loss of the sector.
Increased investments into agricultural land portfolio from 15.8 million litas (€4.6 million) to 34.8 million litas (€10.1 million). AB Invalda manages 4.7 thousand hectares of agricultural land.
Disposals of real estate during the year totaled 2.5 million litas (€0.7 million), new investments into real estate were 19.2 million litas (€5.5 million).
Rental income decreased due to the termination of the lease contract with the key tenant AB TEO LT in an office building in Palangos street in Vilnius.
Real estate sector of AB Invalda group
Facility management sector
(1)
nreal
Sector's results
From the first quarter of 2011 facility management sector is recognized as a separate sector in the financial statements of AB Invalda.
UAB Priemiestis and UAB Jurita results were not consolidated fully in 2010.
| million litas | 2011 | 2010 | Change | Change, % |
|---|---|---|---|---|
| Sales | 10.7 | 8.2 | 2.5 | 30 |
| EBITDA | 0.9 | 0.6 | 0.3 | 50 |
| Net profit, without extraordinary income | 0.3 | 0.4 | (0.1) | (25) |
| Net profit | 1.0 | 0.4 | 0.6 | 150 |
| Number of employees | 167 | 114 | 53 | 46 |
| --- | --- | --- | --- | --- |
Facility management sector
(2)
in real
in valida
Main events
AB Invalda group acquired 100 percent stake in facility management company UAB Jurita that manages residential buildings in the Vilnius's Justiniskes residential area for the price of 2.5 million litas (€0.7 million) from Vilnius City Municipality in August 2011.
UAB Invalda Service changed its name to UAB Inreal Pastatu Prieziura, at the same time the company joined a renewed INREAL brand. INREAL group is the first and still the only provider of a wide range of real estate and facility management services.
Facility management sector of AB Invalda group
Information technology sector
(1)
baip GRUPÉ
Invalidi
- Consolidated results of UAB BAIP Group¹
| million litas | 2011 | 2010 | Change | Change, % |
|---|---|---|---|---|
| Sales | 34.5 | 27.7 | 6.8 | 25 |
| EBITDA | 3.2 | 2.3 | 0.9 | 39 |
| Net profit before investment amortization² and cost of management options | 1.1 | 0.8 | 0.3 | 38 |
| Net profit | (0.7) | (0.6) | 0.1 | - |
| Number of employees | 121 | 67 | 54 | 81 |
Events of 2011
UAB BAIP designed and introduced a supercomputer at Vilnius University, which allows scientists to perform a new quality of multidimensional calculations.
UAB BAIP and Vilnius University organized the first forum European Grid Infrastructure in Lithuania which attracted more than 400 scientists from all over the world.
- Norway Registers Development, AS (NRD) results are consolidated from December 2011.
- Amortization of contract assets formed during UAB BAIP acquisition.
Information technology sector
(2)
baip
GRUPÉ
Invalida
UAB BAIP Group acquisitions
Shares of specialized register programming company Norway Registers Development AS together with taking over the control of UAB NRD in Lithuania were acquired for the price of 4.14 million litas (€1.2 million) plus performance related payments
Norway Registers Development, AS is involved in the development of various countries' register reforms and consulting in implementation of information systems for 15 years.
IT sector of AB Invalida Group
Rail and road infrastructure
TRAKCJA TILTRA
Invalda
- Trakcja – Tiltra, S.A. shares are listed on Warsaw Stock Exchange
AB Invalda owns 12.5% shares of Trakcja-Tiltra S.A., which are listed in Warsaw Stock Exchange.
Due to the share price decrease of Trakcja – Tiltra, S.A., AB Invalda incurred a loss of 76.6 million litas (PLN 85.6 million) during 2011 and 17.3 million litas (PLN 22.3 million) during the 4th quarter.
33
Disclaimer
Invalda
The presentation was prepared by AB Invalda. The following information was used for the preparation:
-
Consolidated and Company’s financial statements of AB Invalda for 2011.
-
Data provided here is for information purposes only.
-
The information provided here is not a recommendation or solicitation to buy or sell any securities of AB Invalda or companies related to AB Invalda.
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AB Invalda does not take responsibility for the actions any third parties made based only on information provided here.
-
Group composition charts are simplified. Shares owned including shares sold under repurchase agreements are presented. AB Invalda owns 100% in the companies if not stated otherwise.
-
AB Invalda accounts its investments into furniture manufacturing and information technology sectors at acquisition costs. Investment properties of the real estate sector are accounted at fair value. Results of agricultural land sector will be consolidated from the beginning of 2012. AB Litagra is an associated entity. Shares of the rail and road infrastructure company Trakcja -Tiltra S.A. are accounted by their price on Warsaw stock exchange.
-
Since November 22, 2010, shares of the listed companies are traded only in EUR on NASDAQ OMX Vilnius stock exchange, therefore all information related to the securities trading is provided in Euros (€).
34
Invalida
Thank you!