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Investor Release 1 April 2014
MARFIN INVESTMENT GROUP FINANCIAL RESULTS: FULL YEAR 2013 Significant profitability improvement: EBITDA from business operations at €62.0m vs. €29.1m in FY2012 Consolidated FY2013 revenues of €1,189.0m vs €1,264.4m a year ago, due to the prolonged challenging economic and market conditions and the exceptional impact to Hygeia Group (€28m charge booked in Q4 2013) related to the legal obligation to implement the automatic claw back and rebate mechanisms in the healthcare sector. Excluding this exceptional impact, consolidated revenues declined 3.7% y-o-y, matching the annual real GDP contraction in Greece. EBITDA from business operations 1 at €62.0m, 113% improvement vs. €29.1m in FY2012, attributed to widening gross profit margins, cost containment effectiveness and improved efficiency. The profitability improvement is primarily associated to better results from ATTICA, VIVARTIA and FAI. Reported consolidated EBITDA turns profitable at €8.6m, vs. €50.9m loss a year ago, reflecting the substantial profitability improvement of business operations, despite the significant €28m impact to Hygeia Group EBITDA related to the aforesaid government policy decisions in the healthcare sector. Consolidated net loss, after tax and minorities, of €203.3m, adversely impacted by one-off deferred taxes (€35m), negative revaluation of investment property (€10.8m vs €43.2m a year ago) and impairment charges (€47.5m vs. €1,091m in FY2012). The relevant bottom-line loss in FY2012 stood at €1,298.0m. Net Asset Value (NAV) at €967m (vs. €1,297m on 31.12.2012), translating to a NAV per share of €1.26 (vs. €1.68 on 31.12.2012). Cash balances, including restricted cash, of €209m at consolidated and €112m at parent company level. Consolidated gross debt declined by €64m vs 31.12.2012. Group receivables from the Greek state at €65m on 31.12.2013 vs. €126m on 31.12.2012. The successful completion of the sale of Olympic Air to Aegean Airlines, in late October 2013, resulted to a €42m capital gain (booked in Q4 2013
1 EBITDA from business operations is defined as Group reported EBITDA excluding holding companies and non-recurring items
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Investor Release 1 April 2014
Consolidated Financial Statements). Management priority is to actively rebalance the group’s investment portfolio, aimed at deleveraging KEY EVENTS AND HIGHLIGHTS OF FY2013:
VIVARTIA 2012 2013 Sales €610.5m €582.9m FMCG €417.4m €410.8m Food Services (FSE) €199.4m €177.1m EBITDA €5.9m €14.0m FMCG €4.9m €9.7m Food Services (FSE) €0.6m €4.2m Net Income after minorities €(101.1)m €(98.9)m
Dairy: despite 10% y-o-y revenue decline in the total Dairy & Drinks market, Vivartia Dairy sales contracted 3% y-o-y, resulting in market share gains (23.9% in 2013 vs. 22.4% in FY2012 in the total Dairy & Drinks market). Important new product launches in value accretive segments (premium milk and yogurt) and improvements to the existing portfolio mix have been the most important winning factors.
Frozen Vegetables & Dough: the division reported 5% annual sales growth vs. -1% y-o-y decline for the total Greek market. The division further strengthened its market leadership (market share in frozen vegetables at 64.1% in FY2013 vs. 61.0% in FY2012 and in frozen dough at 24.8% in FY2013 vs. 22.5% in FY2012). This validated the effectiveness of the strategy of increasing brand awareness and penetration as well as price competitiveness, attracting new users and gaining market share.
Food Services (FSE - Goody’s Group and Everest Group): the combination of the protracted recession in Greece (resulting to lower consumption) and the high VAT rate of 23% up until the end of July 2013, has adversely impacted performance (revenues down 11% y-o-y). As of 1 August 2013, the VAT rate has been reduced back to 13%, which appears to have an initial positive effect on consumption. Importantly, FSE’s travel related business (airport, vessels and national road motorist service stations) has been positively affected by the improved summer tourism, posting sales growth of 4% y-o-y. The travel business is largely responsible for the substantial annual improvement to the Food Services EBITDA (at €4.2m vs €0.6m a year ago).
Cost optimisation: Vivartia remains focused and committed on a major, company-wide, cost optimisation effort, which has already yielded cumulative savings of €73m since 2010. These include organizational (synergies and economies of scale through the operational merger of business units, e.g. merger of Goody’s and Everest administrative functions) as well as operational savings (production cost, pack materials, energy costs
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Investor Release 1 April 2014
etc.). The ongoing cost rationalisation is expected to generate more tangible benefits in the coming quarters (annualised effect of the above and new planned interventions).
FY2013 bottom-line results were burdened by €11.6m one-off deferred taxes, due to the increase in the corporate tax rate in Greece (from 20% to 26% as of 1 January 2013).
Internationalisation initiatives: to address the challenging market conditions in Greece, Vivartia has embarked on a plan to expand its geographical reach: FMCG: in September 2012, Vivartia signed a Joint Venture (JV) agreement with Exeed Industries, the industrial arm of National Holding, for an exclusive cooperation on the food and agriculture sector in the UAE, GCC and MENA region, with a geographical scope that encompasses in excess of 330m consumers. The JV has commenced construction of the dairy, juice and tea processing plant in the UAE, which will be operational in the beginning of 2015. Since August 2013, the JV has started the importation of current Vivartia products (frozen vegetables and dough) along with new products specifically designed and formulated to the Middle East regional market’s needs. Food Services (FSE): establish international presence through the signing of master franchise agreements in order to set up POS in the Ukraine, Belarus, Kazakhstan, Albania and other Balkan countries (Montenegro, FYROM). The expansion plan targets the roll-out of 14 POS in 6 countries within 2014. Exports: Vivartia signed in January 2014 a strategic partnership agreement with Granarolo, Italy’s largest dairy producer, for the exclusive distribution of authentic Greek yoghurt and cheese products in Italy and France. The products will be produced in Greece and distributed by Granarolo’s network.
ATTICA GROUP 2012 2013 Sales €256.0m €260.2m EBITDA €9.4m €27.1m Net Income after minorities €(54.0)m €(10.1)m
In FY2013, group revenues increased c2% y-o-y, thanks to higher traffic volumes: Domestic market routes: +5% y-o-y in passengers, +2% in private vehicles and +4% in freight units, following the deployment of one additional vessel in the domestic market (in July 2012 Blue Star Patmos sailed on her first maiden voyage in the North Aegean). Adriatic Sea routes: +11% y-o-y in passengers, +9% in private vehicles, yet freight units dropped -1%. Attica’s traffic volume growth outpaced that of the total Adriatic Sea market: +5% in passengers, +5% in private vehicles and flat y-o-y in freight units (data derived from Greek Port Authorities).
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Investor Release 1 April 2014
Attica managed once again to maintain, and even strengthen in certain routes, its leading market position in both the domestic market and the Adriatic Sea.
Significant EBITDA improvement (€27.1m vs. €9.4m in FY2012), driven by operating leverage and improved efficiency: lower fuel costs (fuel cost per metric tonne, expressed in € terms, declined c10% y- o-y) as well as ongoing cost rationalisation (SG&A declined 4% y-o-y) efficient fleet management (journey time and frequency of service on certain routes adjusted for the level of demand)
Attica reported positive EBIT (€2m profit vs. €17.7m loss in FY2012) for the first time since 2009.
In April 2013, Attica concluded the sale of the Ro-Pax vessel Superfast VI to Genting Group for €54m in cash. Following the vessel disposal, Attica reduced its debt obligations by repaying c€50m to its lenders, including the full repayment of the loan related to the disposed vessel as well as partial repayment of other loans.
In April 2013, Blue Star Patmos (the youngest passenger ferry in operation in the Mediterranean Sea) received the best ferry award in the International Shipping Awards event organized in Rotterdam by ShipPax magazine.
In May 2013, Attica renewed its joint service agreement with ANEK Lines (originally signed in May 2011) until May 2017, related to the employment of vessels of the two companies in the international route Patras-Igoumenitsa-Ancona and the domestic route Piraeus-Heraklion, Crete.
Attica continuously assesses a series of actions for further cost containment and working capital management, aimed at strengthening its liquidity. Additionally, Attica examines plans for deployment in new routes and evaluates alternative fleet deployment combinations.
HYGEIA GROUP 2012 2013 Sales €237.9m €203.7m EBITDA €13.6m €(6.2)m EBITDA (recurring) €15.4m €21.8m Impairments €(114.0)m €0.0m Net Income after minorities €(110.5)m €(38.1)m
FY2013 operating performance has been adversely impacted by: €28m impact to sales and EBITDA related to the legal obligation to implement the automatic claw back and rebate mechanisms in the healthcare sector (Ministry of
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Investor Release 1 April 2014
Health decisions as stipulated in Article 100 of Greek Law 4172/2013). Excluding this charge, group EBITDA registered 42% y-o-y increase (€21.8m vs €15.4m in FY2012). Challenging market conditions due to protracted Greek recession (excluding the aforesaid exceptional charge, the like-for-like annual revenue decline stood at 2.6%, better than the 3.9% y-o-y real GDP contraction in Greece).
Moreover, FY2013 group bottom-line profitability has been adversely impacted by the following non-recurring items: €2.5m one-off deferred taxes, due to the increase in the corporate tax rate in Greece (from 20% to 26% as of 1 January 2013. €4.2m losses from discontinued operations (related to the disposal of Evangelismos hospital in Cyprus.
In March 2013, Hygeia completed the sale of its 65.76% stake in Achillion Hospital in Cyprus to an associate physician. The transaction improved the group’s liquidity and financial position by €11m.
In late April 2013, Hygeia completed the sale of its 97.32% stake in Evangelismos hospital in Paphos, Cyprus to associate physicians. The transaction improved Hygeia’s liquidity and financial position by €3.8m.
In January 2014, Hygeia completed the refinancing of a €42m bond loan for its subsidiary maternity hospital Mitera (5-year maturity). With this issue, Hygeia Group successfully completed the refinancing of all of its outstanding debt obligations.
SINGULARLOGIC 2012 2013 Sales €55.9m €51.3m EBITDA €(15.3)m €2.7m EBITDA (recurring) €0.4m €2.7m Net Income after minorities €(43.5)m €(7.1)m
Revenues (down 8% y-o-y) were adversely impacted by the prolonged challenging market conditions (declining IT spending, particularly among SMEs and protracted delays in public sector projects) as well as the absence of last year’s one-off revenues related to the two general elections in Greece. Excluding last year’s non-recurring items, sales grew 6% y-o-y in FY2013 (outpacing -3.9% annual GDP contraction in Greece).
Ongoing transformational management initiatives (among others, thorough operational restructuring, cost cutting, product offering rationalisation, new product launches and a more focused sales approach) resulted in substantial EBITDA improvement (€2.7m vs. €0.4m last year, after excluding €15.7m provisions in FY2012).
In April 2013, SingularLogic completed successfully the recertification of all of its core operations according to ISO9001 and ISO14001 by Bureau Veritas Certification. The
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Investor Release 1 April 2014
company has been ISO14001 certified for operating in an environmentally responsible manner since 2011.
In June 2013, SingularLogic completed a new IT project for the Hellenic Telecommunications Organization (ΟΤΕ) involving the development of a central Internet portal ( www.ote.gr ).
In September 2013, SingularLogic was awarded a €1.1m project from the Athens Chamber of Commerce and Industry (ACCI) for the “Development of an Integrated Information System and Deployment of digital activities”, aimed at enabling Greek SMEs to become more competitive and boost entrepreneurship in the Attica region.
In January 2014, SingularLogic undertook the contractual obligation to roll out a custody project for Equity Bank, one of Kenya’s largest banks
FLIGHT AMBULANCE INTERNATIONAL (FAI) 2012 2013 Sales €66.4m €73.5m EBITDA €11.2m €11.4m EBITDA (recurring) €8.9m €11.4m Net Income after minorities €3.1m €3.3m
The group delivered another strong set of results, registering revenue growth of 11% y- o-y, accompanied by c28% annual EBITDA growth (on a recurring basis after excluding last year’s one-off asset sales), driven by efficiency improvements.
Approximately 40% of revenues come from medical transfers (8 dedicated ambulance jets), 30% from VIP-Transport Services, 20% from public services for NGO´s in crisis areas and the remaining from the aircraft leasing and MRO division.
In November 2012, FAI was awarded “Air Ambulance Provider of the Year 2012” by the International Travel Insurance Journal (ITIJ). This is a major recognition of the company’s quality focus and its forward looking overall business concept.
In December 2012, FAI decided to invest an additional €5m for the expansion of its existing FBO Facility “Hangar 7” by 3,000m 2, including 600m 2 of workshops, at Nuremberg International Airport (EDDN). The expansion brings the total usable space to 9,000 m2.
In May 2013, FAI selected Al Bateen Executive Airport, the only dedicated business airport in the Middle East and Northern Africa region operated by Abu Dhabi Airports Company (ADAC), as the preferred hub in the Middle East for its Air-Ambulance Specialist and VVIP-Jet operator business. As part of the agreement, two fully dedicated air-ambulance jets will be permanently available at Al Bateen Executive Airport, served by German medical teams.
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Investor Release 1 April 2014
In September 2013, FAI was accredited by International Assistance Group (IAG, a worldwide assistance alliance) with Preferred Provider status. FAI became the third air ambulance operator to acquire the Preferred Provider status in Europe.
2 In February 2014, the expanded by 3,000m FBO Facility “Hangar 7” commenced operations. The total usable space of 9,000m2 represents one of the largest FBOs in the German General Aviation sector.
SUNCE BLUESUN 2012 2013 Sales €35.8m €36.3m EBITDA €9.8m €10.4m Net Income after minorities €3.1m €2.5m
In FY2013, Sunce’s number of guests remained practically unchanged (c111,000 guests), while the average length of stay stood at 6.3 days vs. 6.4 days in FY2012.
In 2013, Sunce’s market share in Split and Dalmatia (based on total number of overnights in hotels and apartment hotels) stood at 6.0% (vs. 6.4% in 2012). Sunce’s market share in hotel-only overnights in Croatia stood at 4.2% (vs. 4.4% in 2012)
As of 1 July 2013, Croatia became the 28th member state of the European Union. That said tourist demand is expected to be enhanced as new airline routes have been launched from countries in Scandinavia, the United Kingdom and Russia. Moreover, in January 2013 the Croatian government adopted a new strategy on tourism development, which envisages new investments worth €7bn as well as a €6bn increase in tourist spending (to €14.3bn) until 2020, aimed at establishing Croatia among the world’s top- 20 tourist destinations.
ROBNE KUCE BEOGRAD (RKB) 2012 2013 Sales €3.1m €3.8m EBITDA €(5.6)m €(3.5)m Net Income after minorities €(21.2)m €(20.4)m
2 At the end of December 2013, RKB’s total leased area was approximately 56,800m vs. approximately 34,300m2 last year (65% y-o-y increase). As of 31 December 2013, RKB had leased 27% of its total portfolio vs. 16% on 31.12.2012.
2 In FY2013 an additional area of approximately 22,400m was leased vs. approximately 9,800m2 last year. The significant increase in leased space is attributed to the addition of both local and international tenants. RKB aims to diversify its tenant mix, targeting a more balanced portfolio.
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Investor Release 1 April 2014
RKB’s strategic goal going forward is to fully utilize its prime locations in order to further enrich and improve its tenant mix by approaching and adding well-known (anchor) international retailers.
MIG REAL ESTATE 2012 2013 Sales €4.5m €3.9m EBITDA €(9.3)m €0.7m Net Income after minorities €(9.9)m €0.1m
The company’s total investment property value (acquisition cost of the property excluding transaction expenses) in FY2013 amounted to €59m with a total gross leasable area of approximately 28,200m2 (the company holds full ownership over its 36 properties). The appraised value of the portfolio amounted to €46m (latest valuation as of 31.12.2013 by the Institute of Independent Actuaries, according to the Greek Law 2778/1999).
In FY2013, the gross rental yield of the entire property portfolio (36 properties) stood at 7.6% (vs. 8.3% in FY2012).
In January 2013, MIG Real Estate purchased 2 independent office buildings at a prime location in the centre of Athens for a total cash consideration of €5.2m. The buildings are currently leased to high-profile tenants.
In June 2013, the company completed a €5.2m rights offering, through the equivalent capitalisation of liabilities related to the purchase of the aforesaid properties (issue of 1,734,000 new shares at a subscription price of €3 per share, equal to the nominal value). MIG’s stake in the company currently stands at 34.96% vs. 39.87% previously.
The Greek government has recently introduced a more favourable legislation for real- estate companies (REIC) operating in Greece, making them one of the most attractive investment vehicles in the European commercial and residential real-estate market.
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Investor Release 1 April 2014
INCOME STATEMENT (amounts in Euro million) THE GROUP 31/12/2012 31/12/2013 (Restated) Sales before Rebate and Claw back 1,217.1 1,264.4 Rebate and Claw back -28.0 0.0 Sales 1,189.0 1,264.4 Cost of sales -980.8 -1,032.6 Gross profit 208.3 231.8 Administrative expenses -113.9 -119.2 Distribution expenses -185.2 -234.0 Other operating income & expenses 9.4 -31.4 Profit / (loss) before taxes, financing and investment activities -81.4 -152.8 Other financial results -52.1 -1,098.9 Financial expenses -107.6 -116.5 Financial income 8.5 16.6 Income from dividends 0.3 0.3 Share in net result of companies accounted for by the equity method 1.2 -2.5 Profit/(loss) before income tax -231.2 -1,353.9 Income tax -24.9 28.2 Profit/(loss) after tax for the period from continuing operations -256.1 -1,325.8 Net profit/(loss) from discontinued operations 21.6 -42.7 Profit/(loss) for the period -234.5 -1,368.4
Attributable to: Owners of the parent company -203.3 -1,298.0 Owners of the parent from continuing operations -227.1 -1,260.4 Owners of the parent from discontinued operations 23.8 -37.5 Non-controlling interests -31.1 -70.5 Non-controlling interests from continuing operations -29.0 -65.3 Non-controlling interests from discontinued operations -2.2 -5.1
EBITDA from continuing operations 8.6 -50.9
INCOME STATEMENT (amounts in Euro million) ΤΗΕ COMPANY 31/12/2012 31/12/2013 (Restated) Profit/(Loss) from investments in subsidiaries & Ιnvestment Portfolio -324.6 -1,239.9 Profit/(Loss) from financial assets at fair value through profit or loss -1.7 -30.9 Other income 0.0 0.0 Total operating income -326.3 -1,270.9 Fees and other expenses to third parties -3.7 -2.6 Wages, salaries and social security costs -5.0 -4.8 Depreciation -0.5 -0.7 Other operating expenses -5.4 -4.6 Total operating expenses -14.6 -12.7 Income from cash and cash equivalent 4.7 14.0 Interest and similar expenses -25.1 -32.8 Profit/(loss) before tax -361.3 -1,302.2 Income tax 6.7 0.0 Profit/(loss) after tax for the period -354.6 -1,302.2
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Investor Release 1 April 2014
STATEMENT OF FINANCIAL POSITION (amounts in Euro million) THE GROUP 31/12/2012 31/12/2013 (Restated) Tangible & Intangible assets 1,867.8 2,031.7 Goodwill 317.8 333.8 Investments in associates 64.5 63.8 Investment portfolio 8.5 26.5 Property investments 326.8 335.2 Trading & financial instruments through P&L 7.2 16.5 Cash, cash equivalents and restricted cash 208.8 216.6 Other current & non-current assets 482.7 645.5 Assets held for sale 0.0 248.6 Total assets 3,284.1 3,918.1
Total shareholders equity 595.5 913.6 Non-controlling interests 121.1 153.5 Total equity 716.5 1,067.1 Long term borrowings 481.9 522.5 Short term borrowings 1,374.9 1,398.5 Other current & non-current liabilities 710.8 703.6 Liabilities related to Assets held for sale 0.0 226.4 Total liabilities 2,567.6 2,851.1 Total equity & liabilities 3,284.1 3,918.1
THE COMPANY 31/12/2013 31/12/2012 Tangible & Intangible assets 2.2 2.7 Investment in subsidiaries 1,328.5 1,555.5 Investments in associates 8.1 7.5 Investment portfolio 0.0 9.5 Trading & financial instruments through P&L 7.1 13.6 Cash, cash equivalents and restricted cash 111.9 113.8 Other current & non-current assets 65.1 148.9 Total assets 1,522.8 1,851.6
Shareholders equity 967.3 1,297.1 Total equity 967.3 1,297.1 Long term borrowings 231.9 393.7 Short term borrowings 265.0 100.0 Other current & non-current liabilities 58.6 60.8 Total liabilities 555.5 554.5 Total equity & liabilities 1,522.8 1,851.6
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Investor Release 1 April 2014
About MIG: Marfin Investment Group Holdings S.A. is an international investment holding company based in Greece and throughout Southeast Europe (SEE). The Company believes it is uniquely positioned to take advantage of an expanding array of investment opportunities in this region; opportunities in which traditional investment vehicles lacking MIG’s regional focus, scale, expertise, and/or its investment flexibility and financial resources, may find difficult to identify and exploit. MIG in its current structure has been listed on the Athens Stock Exchange since July 2007. Its portfolio includes leading companies in sectors across the SEE region, grouped into Food & Beverages, Healthcare, IT & Telecoms, Transportation & Shipping, Real Estate, Tourism & Leisure. Included amongst its portfolio and subsidiary companies is Vivartia, a leading food and food retail business in SEE; Attica Group, a leading passenger ferry operator in the Eastern Mediterranean; Hygeia Group, a market leader in integrated private hospitals and clinics in SEE, with the leading general hospital facilities and maternity clinics in Greece; SingularLogic, the leading IT operator in Greece; Flight Ambulance International (FAI) a top-5 global fixed-wing medical evacuation company; Sunce (Bluesun) a leading hospitality and leisure group in Croatia; and Robne Kuce Beograd (RKB), owner of the largest commercial real-estate portfolio in Serbia.
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