Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
MARFIN INVESTMENT GROUP FINANCIAL RESULTS: Q1 2014 Containment of operating losses: EBITDA from business operations at €2.8m loss vs. €6.6m loss last year Consolidated Q1 2014 revenues of €257.3m vs €263.3m a year ago, amid a seasonally soft quarter, challenging market conditions and the impact to HYGEIA Group (€3.4m charge) related to the legal obligation to implement the automatic claw back and rebate mechanisms in the healthcare sector. Excluding this impact, consolidated revenues declined 1% y-o-y, matching the annual real GDP contraction (-1.1%) in Greece in Q1 2014. Note that the first quarter is seasonally less important, hence it is not indicative of full-year trends. EBITDA from business operations 1 at €2.8m loss, vs €6.6m loss a year ago. Containment of losses is attributed to ongoing gross profit margin expansion, efficiency improvements as well as cost containment effectiveness. The curtailment of operating losses is primarily associated to better results from VIVARTIA, ATTICA and HYGEIA (excluding aforesaid impact). Reported consolidated EBITDA at €9.1m loss, adversely impacted by the aforesaid charge to HYGEIA Group, vs. €10.0m loss a year ago. Consolidated net loss, after tax and minorities, of €51.7m, compared to a relevant bottom-line loss of €104.3m in Q1 2013. Note that Q1 2013 bottom- line results included a one-off €35m charge related to deferred taxes. Net Asset Value (NAV) at €978m (vs. €967m on 31.12.2013 and €1,240m on 31.03.2013), translating to a NAV per share of €1.27 (vs. €1.26 on 31.12.2013 and €1.61 on 31.03.2013). Cash balances, including restricted cash, of €141m at consolidated and €63m at parent company level. Consolidated gross debt declined by €29m vs 31.12.2013. The strategic agreement with Piraeus Bank marks a new development stage for our Group. Holding a portfolio of leading companies in the Food & Beverages, Passenger shipping, Healthcare and IT sectors, MIG will seek to play a vital role in the upcoming sector consolidation, for the benefit of its shareholders and the Greek economy overall.
1 EBITDA from business operations is defined as Group reported EBITDA excluding holding companies and non-recurring items
1 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
KEY EVENTS AND HIGHLIGHTS OF Q1 2014:
VIVARTIA Q1 2013 Q1 2014 Sales €126.4m €129.8m FMCG €91.9m €99.7m Food Services (FSE) €35.6m €31.3m EBITDA €(6.7)m €(2.8)m FMCG €(2.7)m €0.8m Food Services (FSE) €(4.0)m €(3.6)m Net Income after minorities €(31.4)m €(15.3)m
A strong start for the year, with sales increasing 3% y-o-y and revenue growth registered in two out of the three business segments (Dairy +8% y-o-y and Frozen +11% y-o-y). Group EBITDA improved by c€4m y-o-y, reflecting the operating leverage benefits.
Dairy: Vivartia Dairy sales increased 8% y-o-y, despite 5% annual revenue decline in the Greek Dairy market, resulting in significant market share gains (26.5% in Q1-14 vs. 25.5% in Q1-13 in the total Dairy market). Innovative product launches in value accretive segments (premium milk and yogurt) during 2013 and improvements to the existing portfolio mix have been the most important winning factors.
Frozen Vegetables & Dough: reported 11% annual sales growth vs. 1% y-o-y decline for the total Greek market. The division strengthened its market leadership (market share in frozen vegetables at 64.2% in Q1-14 vs. 63% in Q1-13 and in frozen dough at 23.9% in Q1-14 vs. 23.1% in Q1-13). This validated the effectiveness of the strategy of increasing brand awareness and penetration (especially in frozen vegetables) as well as price competitiveness.
Food Services (FSE - Goody’s Group and Everest Group): reported revenues declined 12% y-o-y, on account of the protracted recession in Greece (resulting to lower consumption). Nevertheless, FSE like-for-like revenues, after excluding discontinued POS, increased 1% y-o-y. Similarly, the Travel related business (airport, vessels and national road motorist service stations) registered 6% like-for-like (after excluding discontinued POS) annual revenue growth. Moreover, the continued cost cutting efforts, the significant EBITDA margin improvement of all FSE brands, the improved performance at Goody’s Burger House (the new concept of Goody’s currently being rolled out) and the addition of the international POS supported the containment of losses at the EBITDA level. Note that as of 1 August 2013, the VAT rate has been reduced back to 13% (from 23%), which appears to have an initial positive effect on consumption.
Cost optimisation: Vivartia remains focused and committed on a major, company-wide, cost optimisation effort, which has already yielded savings of €22m per annum (€77m cumulative savings since 2010). These include organizational (synergies and economies
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Investor Release 23 May 2014
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 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).
Sector consolidation: in April 2014 DELTA signed a preliminary agreement to acquire a 43% stake in MEVGAL from the Papadakis-Chatzitheodorou families. The transaction consideration amounts to €4.5m, which will be paid following the repayment of an obligation worth €3.8m by MEVGAL to DELTA and the repayment of a convertible bond loan that is expected to be provided by the lending banks to MEVGAL as part of the company’s financial restructuring plan. With this transaction DELTA will increase its stake in MEVGAL to 57.8%. MEVGAL is a 64-year old dairy company based in Northern Greece, commanding market shares of 6.3% in the total milk market and 5.7% in the total dairy & drinks market in Greece (FY2013). MEVGAL is the leading dairy company in Northern Greece with market share that exceeds 20% in this region.
Internationalisation initiatives: to address the challenging market conditions in Greece, Vivartia has embarked on a plan to expand its geographical reach: FMCG: construction of the MENA JV (JV was signed in September 2012 with Exeed Industries, the industrial arm of National Holding) dairy, juice and tea processing plant is underway, while it is expected to be operational in Q2 2015. As of 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): international presence has been established through the signing of master franchise agreements in targeted countries (Ukraine, Belarus, Kazakhstan, Albania, Montenegro, FYROM, Kosovo). In Q1 2014, 3 new POS commenced operations (1 in Belarus and 2 in FYROM). For the remainder of 2014, the expansion plan targets the roll-out of 13 additional POS in 7 different countries. 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 are produced in Greece and distributed by Granarolo’s network. Exports of the relevant products commenced in April 2014.
3 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
ATTICA GROUP Q1 2013 Q1 2014 Sales €41.0m €41.1m EBITDA €(7.9)m €(7.2)m Net Income after minorities €(19.3)m €(16.6)m
st The 1 quarter is the weakest in terms of traffic volumes due to seasonality; hence it is not indicative of full-year trends.
In Q1 2014, group revenues remained virtually unchanged y-o-y. As regards traffic volumes: Domestic market routes: +21.6% y-o-y in passengers, +22.9% in private vehicles and +11.5% in freight units, in 16% more sailings vs Q1 2013. Adriatic Sea routes: -9.9% y-o-y in passengers, -19.3% in private vehicles and -17.9%, in freight units, in 1% less sailings vs Q1 2013 (routes Patra-Igoumenitsa-Ancona and Patra-Igoumenitsa-Bari). The total Adriatic Sea market (data derived from the Greek Port Authorities): +9.7% in passengers, -2.5% in private vehicles and +1.6% y-o-y in freight units, in 8% more sailings vs Q1 2013.
Operating EBITDA losses were efficiently contained, on account of operating leverage and improved efficiency: lower fuel costs as well as ongoing cost rationalisation efficient fleet management (journey time and frequency of service on certain routes adjusted for the level of demand)
In April 2014, Attica announced that it is in advanced discussions/negotiations with its lending banks as well as with Fortress Credit Corp. These discussions have not yet been concluded, while any potential agreement is subject to the approval of the lending banks. These discussions involve, among other proposed corporate actions, assessment for the issuance of a convertible bond, the amount of which, the time of issuance and generally the timeframe for the finalisation of any potential agreement cannot yet be determined.
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.
4 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
HYGEIA GROUP Q1 2013 Q1 2014 Sales (pre-claw back & rebate) €61.6m €60.9m Claw back & rebate €0.0m €(3.4)m Sales (post claw back & rebate) €61.6m €57.5m EBITDA €9.5m €6.5m EBITDA (recurring) €9.5m €9.9m Net Income after minorities €0.3m €(0.6)m
Q1 2014 operating performance has been adversely impacted by €3.4m charge to sales and EBITDA related to the legal obligation to implement the automatic claw back and rebate mechanisms in the healthcare sector (Ministry of Health decisions as stipulated in Article 100 of Greek Law 4172/2013). Excluding this charge, the like-for-like annual revenue decline stood at 1%, in-line with the 1.1% y-o-y real GDP contraction in Greece in Q1 2014. Similarly, the like-for-like annual EBITDA increase stood at 5%, with the relevant EBITDA margin expanding to 17.2% vs 15.4% a year ago.
In May 2014, Hygeia announced the issuance of a €42m bond loan for its subsidiary maternity hospital Mitera (5-year maturity), aimed at refinancing an existing obligation. Consequently, the equivalent amount of debt was reclassified from short-term to long- term liabilities. With this issue, Hygeia Group successfully completed the refinancing of the largest part of its outstanding debt obligations.
SINGULARLOGIC Q1 2013 Q1 2014 Sales €12.1m €9.8m EBITDA €0.4m €(0.3)m Net Income after minorities €(1.5)m €(1.7)m
st The 1 quarter is seasonally less important, hence it is not indicative of full-year trends.
Revenues (down 19% y-o-y) were adversely impacted by the prolonged challenging market conditions, namely declining IT spending, particularly among SMEs and protracted delays in public sector projects.
During 2013, SingularLogic undertook 150 IT projects for the private sector. Customers included, among others, OTE, Vodafone Albania, Forthnet, FirstData, Coral, Elpedison Energy, ABB, Eurodrip
In January 2014, SingularLogic undertook the contractual obligation to roll out a custody project for Equity Bank, one of Kenya’s largest banks.
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Investor Release 23 May 2014
In May 2014, SingularLogic was assigned the collection, processing and broadcasting of the municipal (325 municipalities) & regional (13 regions) as well as the European Parliament (EP) elections in Greece. The company has been the country’s incumbent elections manager since 1981.
FLIGHT AMBULANCE INTERNATIONAL (FAI) Q1 2013 Q1 2014 Sales €19.1m €19.6m EBITDA €3.7m €2.7m Net Income after minorities €0.8m €0.6m
Despite 22% y-o-y healthy increase in gross profit (a combination of 3% annual revenue growth and COGS containment), Q1 2014 reported EBITDA was adversely impacted (down 28% y-o-y) by €1.2m negative fair value adjustment of properties.
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” at Nuremberg International Airport (EDDN) commenced operations. The total usable space of 9,000m2 (including 600m 2 of workshops) represents one of the largest FBOs in the German General Aviation sector.
SUNCE BLUESUN Q1 2013 Q1 2014 Sales €0.3m €0.1m EBITDA €(2.3)m €(2.2)m Net Income after minorities €(3.3)m €(3.3)m
In Q1 2014, Sunce’s hotels remained closed for the entire period. Each year the hotels are scheduled to commence operations as of end-April.
ROBNE KUCE BEOGRAD (RKB) Q1 2013 Q1 2014 Sales €0.8m €1.1m EBITDA €(0.5)m €(0.1)m Net Income after minorities €(4.0)m €(4.5)m
2 On 31.03.2014, RKB’s total leased area was approximately 59,000m vs. approximately 56,800m2 on 31.12.2013.
On 31.03.2014, RKB had leased 28% of its total portfolio vs. 27% on 31.12.2013.
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Investor Release 23 May 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.
In May 2014, RKB’s outstanding €301m loan was sold from Bank of Cyprus to Piraeus Bank. MIG is currently negotiating with Piraeus Bank the restructuring of the loan.
MIG REAL ESTATE Q1 2013 Q1 2014 Sales €1.0m €0.9m EBITDA €0.8m €0.6m Net Income after minorities €0.6m €0.6m
The company’s total investment property value (acquisition cost of the property excluding transaction expenses) amounts to €59m (latest valuation as of 31.12.2013) with a total gross leasable area of approximately 28,077m2 (the company holds full ownership over its 36 properties).
The appraised value of the portfolio amounts to €46m (latest valuation as of 31.12.2013 by the Institute of Independent Actuaries, according to the Greek Law 2778/1999 and Law 4141/2013).
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 introduced in April 2013 a more favourable legislation for REICs operating in Greece, making them one of the most attractive investment vehicles in the European commercial and residential real-estate market (exempt from capital gains, transaction and dividend tax).
7 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
INCOME STATEMENT (in €m) THE GROUP 31/03/2013 31/03/2014 (Restated) Sales before Rebate and Claw-back 260.7 263.3 Rebate and Claw-back -3.4 0.0 Sales 257.3 263.3 Cost of sales -222.2 -229.9 Gross profit 35.1 33.4 Administrative expenses -27.0 -28.3 Distribution expenses -42.0 -43.0 Other operating income & expenses 3.8 5.2 Profit / (loss) before taxes, financing and investment activities -30.1 -32.6 Other financial results -0.1 -0.6 Financial expenses -25.4 -26.3 Financial income 0.8 1.7 Income from dividends 0.0 0.0 Share in net result of companies accounted for by the equity method -0.8 -1.2 Profit/(loss) before income tax -55.5 -59.2 Income tax 0.7 -34.1 Profit/(loss) after tax for the period from continuing operations -54.8 -93.2 Net profit/(loss) from discontinued operations -1.4 -22.4 Profit/(loss) for the period -56.2 -115.6
Attributable to: Owners of the parent company -51.7 -104.3 Owners of the parent from continuing operations -50.4 -83.6 Owners of the parent from discontinued operations -1.4 -20.7 Non-controlling interests -4.5 -11.3 Non-controlling interests from continuing operations -4.5 -9.6 Non-controlling interests from discontinued operations 0.0 -1.7
EBITDA from continuing operations -9.1 -10.0
INCOME STATEMENT (in €m) ΤΗΕ COMPANY
31/03/2014 31/03/2013 Profit/(Loss) from investments in subsidiaries & Ιnvestment Portfolio 0.0 0.3 Profit/(Loss) from financial assets at fair value through profit or loss 0.0 0.9 Other income 0.0 0.0 Total operating income 0.0 1.2 Fees and other expenses to third parties -0.6 -0.5 Wages, salaries and social security costs -1.2 -1.3 Depreciation -0.1 -0.1 Other operating expenses -1.1 -1.5 Total operating expenses -3.1 -3.5 Income from cash and cash equivalent 0.8 1.2 Interest and similar expenses -5.7 -6.6 Profit/(loss) before tax -7.9 -7.6 Income tax 0.0 0.0 Profit/(loss) after tax for the period -7.9 -7.6
8 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 2014
STATEMENT OF FINANCIAL POSITION (in €m) THE GROUP 31/12/2013 31/03/2014 (Restated) Tangible & Intangible assets 1,841.1 1,861.1 Goodwill 317.8 317.8 Investments in associates 80.2 81.1 Investment portfolio 8.0 8.0 Property investments 326.7 326.8 Trading & financial instruments through P&L 7.1 7.2 Cash, cash equivalents and restricted cash 140.8 206.6 Other current & non-current assets 500.1 474.9 Assets held for sale 0.0 0.0 Total assets 3,221.7 3,283.6
Shareholders equity 542.9 595.5 Non-controlling interests 123.1 127.3 Total equity 666.0 722.8 Long term borrowings 462.7 481.9 Short term borrowings 1,365.3 1,374.9 Other current & non-current liabilities 727.7 704.0 Liabilities related to Assets held for sale 0.0 0.0 Total liabilities 2,555.7 2,560.8 Total equity & liabilities 3,221.7 3,283.6
THE COMPANY
31/03/2014 31/12/2013 Tangible & Intangible assets 2.1 2.2 Investment in subsidiaries 1,360.5 1,328.5 Investments in associates 9.1 8.1 Investment portfolio 0.0 0.0 Trading & financial instruments through P&L 7.0 7.1 Cash, cash equivalents and restricted cash 63.0 111.9 Other current & non-current assets 70.6 65.1 Total assets 1,512.2 1,522.8
Shareholders equity 977.8 967.3 Total equity 977.8 967.3 Long term borrowings 212.3 231.9 Short term borrowings 284.6 265.0 Other current & non-current liabilities 37.5 58.6 Total liabilities 534.4 555.5 Total equity & liabilities 1,512.2 1,522.8
9 Investor Relations [email protected] www.marfininvestmentgroup.com
Investor Release 23 May 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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