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Investor Release 2 September 2013
MARFIN INVESTMENT GROUP FINANCIAL RESULTS: FIRST HALF 2013
MIG achieves operating EBITDA profitability from recurring business operations (€11.1m vs. €1.6m losses in H1 2012)
Consolidated H1 2013 revenues of €581.3m, 3.6% annual reduction, amid ongoing adverse economic and market conditions. Consolidated Q2 2013 revenues of €313.2m, vs. €323.3m in Q2 2012, implying a deceleration to the annual rate of revenue decline on a quarterly basis.
H1 2013 EBITDA from recurring business operations 1 of €11.1m, a significant improvement vs. €1.6m loss in H1 2012, attributed to market share gains, expanding gross profit margins, cost containment effectiveness and improved efficiency. Reported group EBITDA of €4.0m, vs. €7.6m loss in H1 2012.
Consolidated net loss, after tax and minorities, of €139.7m, adversely impacted by one-off deferred taxes (€35m) and discontinued operations’ losses (€22.8m), vs. €960.5m losses in H1 2012.
H1 2013 Net Asset Value (NAV) of €1.23bn (vs. €1.30bn in FY2012), translating to a NAV per share of €1.59 (vs. €1.68 in FY2012).
Cash balances, including restricted cash, of €177m at group and €100m at parent company level. Group receivables from the Greek state at €130m in H1 2013 vs. €146m in FY2012.
Continuous dynamic asset rebalancing, aimed at deleveraging, yields the desired results, as consolidated gross debt declined by €61m vs. FY2012.
Convertible Bond Loan (CBL) issue (29.07.2013) was covered by a total amount of €215m, of which €211.9m originated from the tender for exchange of bonds issued by the Company on 19.03.2010 and €3.1m represents new capital from the exercise of pre-emption rights. Bonds commenced trading on ATHEX as of 16 August 2013.
1 EBITDA from recurring business operations is defined as Group reported EBITDA excluding holding companies and non-recurring items
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KEY EVENTS AND HIGHLIGHTS OF H1 2013:
VIVARTIA H1 2012 H1 2013 Sales €300.2m €280.0m EBITDA €(0.5)m €(3.1)m Net Income after minorities €(31.8)m €(43.7)m
Dairy: the division significantly outperformed the market thanks to important new product launches in value accretive segments (premium milk and yogurt). Despite an annual revenue reduction of 9% in the total Dairy & Drinks market, revenues in Vivartia’s Dairy division declined 4% y-o-y, resulting in market share gains (market share in the overall Dairy & Drinks market at 24.0% in June 2013 vs. 22.4% in December 2012).
Frozen Vegetables & Dough: Vivartia’s Frozen Foods division reported flat sales growth y-o-y compared to 3% y-o-y decline in the total market. This resulted in market share gains (market share in frozen vegetables at 62.1% in June 2013 vs. 61.0% in December 2012 and at 23.9% in June 2013 vs. 21.6% in December 2013 in frozen dough), while it also validated the effectiveness of the strategy of improving price competitiveness in recruiting new users and increasing share of requirements with consumers.
Food Services (FSE - Goody’s Group and Everest Group): performance continued to be adversely impacted (14% annual revenue decline) by the combination of the protracted recession in Greece (resulting to lower consumption) and the high VAT rate of 23%, which had a clear negative effect to profitability as the relevant rate increase from 13% had been absorbed by the business. As of 1 August 2013 and until the end of the year, the VAT rate has been reduced back to 13% (vs. 23% previously), which is expected to have a positive effect on consumption and profitability. Importantly, FSE’s travel related business (airport, vessels and national road motorists service stations) has been positively affected by the improved summer tourism, posting sales growth of +6% y-o-y.
Vivartia remains focused and committed on a major, company-wide, cost containment effort, which has, so far, yielded cumulative savings in excess of €52m on a run-rate. 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, raw and 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).
Bottom-line results have been burdened by €22.9m one-off deferred taxes, due to the increase in the corporate tax rate in Greece (from 20% to 26% as of 1 January 2013).
To address the worsening market conditions in Greece, Vivartia has proceeded to the internationalisation of its operations. Two such major initiatives involve:
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Investor Release 2 September 2013
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 strategic aim is to become a significant regional player and the market leader in UAE. The JV will also focus on the set up of a dairy, juice and tea processing plant in the UAE with planned start of production in H2 2014. In the beginning of 2013, the JV started its operation through the exportation 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: establish international presence through the signing of master franchise agreements in order to set up a network in the Ukraine, Belarus, Kazakhstan, Albania and other Balkan countries (Montenegro, FYROM). The opening of the first 2 stores in Belarus is expected in mid-September, while another 2 stores are planned to commence operations by the end of 2013.
ATTICA GROUP H1 2012 H1 2013 Sales €102.7m €106.7m EBITDA €(10.8)m €(0.9)m Net Income after minorities €(29.9)m €(21.1)m
In H1 2013, group revenues increased 4% y-o-y, thanks to higher traffic volumes in the domestic market (+12% y-o-y in passengers and +7% y-o-y in private vehicles and freight units), following the deployment of one additional vessel in the domestic market (in July 2012 Blue Star Patmos, the youngest passenger ferry in operation globally, sailed on her first maiden voyage in the North Aegean).
At the EBITDA level, the group was virtually break-even, a substantial improvement compared to H1 2012 (€9.8m improvement y-o-y), on account of efficient fleet management (journey time and frequency of service on certain routes adjusted for the level of demand), ongoing cost rationalisation (SG&A declined 11% y-o-y) as well as lower fuel costs (fuel cost per metric tonne, expressed in € terms, declined 8% y-o-y).
In H1 2013, Attica continued to register market share gains in both the domestic and the Adriatic Sea market, hence maintaining its leading position in both markets. In the Cyclades (calling from the port of Piraeus) the group attained c50% market share across all traffic categories, over 90% in the Dodecanese and c40% in the North Aegean. In the Adriatic Sea (Bari and Ancona) Attica commanded market share of 37% in passengers, 37% in freight units and 30% in private vehicles.
In early 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
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Investor Release 2 September 2013
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 globally) received the best ferry award in the International Shipping Awards event organized in Rotterdam by ShipPax magazine. Blue Star Patmos received two awards: one for her exceptional design and one for her outstanding interior concept.
In May 2013, Attica renewed its joint service agreement with ANEK Lines (originally signed in May 2011) for another 4 years (until 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 is in the final stage of negotiations with lender banks to restructure existing debt facilities. Note that the group has maintained its debt leverage below 50% of fleet book value throughout the past 5 years, whilst completing its fleet renewal programme.
HYGEIA GROUP H1 2012 H1 2013 Sales €123.3m €121.5m EBITDA €11.0m €15.5m Net Income after minorities €(4.4)m €(3.5)m
Operating under a rather challenging environment (1.4% annual revenue decline), Hygeia Group delivered another strong set of financial results, registering a substantial operating EBITDA improvement (+41% y-o-y). The improvement stemmed from continuous cost optimisation (cost of goods sold and SG&A declined 6% and 8% y-o-y respectively), cooperation with EOPYY (newly-established National Organization for Healthcare launched in the beginning of 2012) and renewal of agreements with major insurance companies.
Group bottom-line results were adversely impacted by (a) €2.5m deferred taxes, due to the increase in the corporate tax rate (from 20% to 26% as of 1 January 2013) and (b) losses from discontinued operations of €4.3m (related to the two hospitals in Cyprus).
In H1 2013, Hygeia Hospital Tirana delivered an annual increase in sales of 23%, backed by an increase of 16% y-o-y in inpatients and 23% y-o-y in outpatients. At the EBITDA level, the hospital is approaching break-even levels, after two full years in operation.
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. The hospital was built in 2004 in a 7,000 sqm facility located in Limassol with 90 licensed beds (70 active), 8 operating theatres, 3 delivery rooms and 1 Intensive Care Unit.
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Investor Release 2 September 2013
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. The hospital has 71 licensed beds (42 active), 8 operating theaters and 3 delivery rooms. With this transaction, Hygeia has disengaged completely from Cyprus, while group deposits in financial institutions in Cyprus did not exceed €100,000.
In H1 2013, Hygeia renewed its certification under the internationally recognized Joint Commission International (JCI) Healthcare Standard. Hygeia remains the first and only hospital in Greece holding this high distinction that assures the quality and the security of its healthcare services.
SINGULARLOGIC (MIG Technology) H1 2012 H1 2013 Sales €28.6m €25.6m EBITDA €0.9m €0.9m Net Income after minorities €(3.0)m €(2.9)m
Despite challenging market conditions (declining IT spending and delays in public sector projects) and the absence of last year’s revenues related to the two general elections in Greece, SingularLogic delivered a solid set of results (flat y-o-y EBITDA). This is attributed to transformational management initiatives (including, among others, thorough operational restructuring, cost cutting, product offering rationalisation, new product launches and a more focused sales approach), which are aimed at cushioning the daunting economic conditions in Greece and laying the groundwork for a sustainable recovery in 2013.
SingularLogic remains focused on growing its market share in the domestic market as well as expanding its international reach and exploring potential consolidation opportunities in Greece.
In January 2013, SingularLogic was awarded a €3.3m project by the Athens Bar Association related to on-line services for lawyers, judges and citizens.
In April 2013, SingularLogic completed successfully the recertification of all of its core operations according to ISO9001 and ISO14001 by Bureau Veritas Certification. The company has been ISO14001 certified for operating in an environmentally responsible manner since 2011.
In June 2013, SingularLogic was awarded first prize in the “e-business” category at the 2013 ACCI Awards.
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).
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Investor Release 2 September 2013
FLIGHT AMBULANCE INTERNATIONAL (FAI) H1 2012 H1 2013 Sales €30.9m €38.4m EBITDA €5.3m €6.9m Net Income after minorities €0.4m €2.0m
The company delivered another strong set of results, registering revenue growth of 24% y-o-y, accompanied by a healthy 30% annual EBITDA improvement. Approximately 40% of revenues come from medical transfers, 30% from VIP-Transport Services, 20% from NGO contracts 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, owned FBO Facility “Hangar 7” at Nuremberg International Airport (EDDN) by 3,000sqm (on top of the existing 6,000sqm), including 600sqm of workshops. The facility expansion is designed to meet the upcoming demand for high quality aircraft maintenance performed by FAI´s subsidiary FAI Technik GmbH. The additional Hangar space will be operational in spring 2014.
In February 2013, FAI added one Falcon 7X and one Global Express (both under Management Contract) to its fleet, bringing the total fleet to 22 jets, the largest Learjet- fleet in Europe. FAI is recognised as the second largest operator in General Aviation in Germany.
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.
SUNCE BLUESUN H1 2012 H1 2013 Sales €9.1m €8.8m EBITDA €(1.7)m €(1.7)m Net Income after minorities €(4.0)m €(3.3)m
The first half of the year is adversely impacted by seasonality, since it represents approximately 25% of annual revenues.
In H1 2013, Sunce’s number of guests declined 6.4% y-o-y vs. H1 2012, while the average length of stay improved to 5.3 days vs. 5.2 days in H1 2012.
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Investor Release 2 September 2013
In H1 2013, Sunce’s market share in Split and Dalmatia (based on total number of overnights in hotels and apartment hotels) stood at 10% (vs. 12% in H1 2012)
Croatia has become a popular tourist destination (5.5% y-o-y increase in tourist arrivals in H1 2013), while the country became the 28th member state of the European Union on 1 July 2013. During 2013, VAT will be reduced to 10% from 25%, which is expected to boost consumer spending going forward.
Tourist demand is expected to be also 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) H1 2012 H1 2013 Sales €1.5m €1.8m EBITDA €(1.2)m €(0.9)m Net Income after minorities €(8.4)m €(8.2)m
At the end of June 2013, RKB’s total leased area was c47,000 sqm compared to c26,000 sqm in the respective period last year, representing 82% y-o-y increase. At the end of June 2013, RKB had leased 32% of its total real estate portfolio vs. c18% in H1 2012.
In H1 2013 an area of c15,000 sqm was leased vs c1,600 sqm in the respective period 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.
RKB expects that the positive momentum initiated with the management agreement signed with Confluence (early 2012), the largest real-estate management platform in Serbia, will generate further tangible benefits in the remainder of 2013, in the form of increasing even more the leasable space of the portfolio.
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. That said, the company in late 2012 and beginning 2013, added two well-known international retailers to its portfolio and is expected to add another two by the end of the year.
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Investor Release 2 September 2013
MIG REAL ESTATE H1 2012 H1 2013 Sales €2.5m €1.9m EBITDA €(5.4)m €0.5m Net Income after minorities €(5.9)m €0.2m
The company’s total investment property value (pertains to the acquisition cost of the property excluding transaction expenses) in H1 2013 amounted to €47m (the company holds full ownership over its properties) with a total gross leasable area of 28,212 sqm. The appraised value (by the Institute of Independent Actuaries in compliance with the requirements of the Law 2778/1999) of the property portfolio amounted to c€53m.
H1 2013 NAV amounted to €3.01 per share, with the current market price implying c40% discount to NAV.
H1 2013 results registered after-tax profit of €0.2m vs. €5.9m net loss in H1 2012 (last year’s results were burdened by negative fair value adjustments to the property portfolio).
In H1 2013, the rental yield of the leased portfolio (29 properties) stood at 9.3% (vs. 10.4% in FY2012) and at 8.6% (vs. 9.7% in FY2012) for the entire property portfolio (36 properties).
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 office buildings (issue of 1,734,000 new shares at a subscription price of €3 per share, equal to the nominal value). Following this capital increase, MIG’s stake in the company stands at 34.96% vs. 39.87% previously.
The Greek government has recently introduced a more favourable legislation for real- estate companies (REIT) 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 2 September 2013
INCOME STATEMENT (amounts in Euro million) THE GROUP 30/06/2012 30/06/2013 (Restated) Sales 581.3 603.3 Cost of sales -483.0 -500.6 Gross profit 98.3 102.7 Administrative expenses -57.7 -61.0 Distribution expenses -91.5 -113.0 Other operating income & expenses 10.0 14.2 Profit / (loss) before taxes, financing and investment activities -40.8 -57.1 Other financial results 0.3 -823.4 Financial expenses -53.3 -59.1 Financial income 3.3 4.2 Income from dividends 0.0 0.0
Share in net result of companies accounted for by the equity method -1.6 -4.4
Profit/(loss) before income tax -92.1 -939.8 Income tax -38.0 -2.5 Profit/(loss) after tax for the period from continuing operations -130.1 -942.3 Net profit/(loss) from discontinued operations -24.5 -32.5 Profit/(loss) for the period -154.5 -974.8
Attributable to: Owners of the parent company -139.7 -960.5 Owners of the parent from continuing operations -116.8 -928.3 Owners of the parent from discontinued operations -22.8 -32.2 Non-controlling interests -14.9 -14.3 Non-controlling interests from continuing operations -13.3 -14.0 Non-controlling interests from discontinued operations -1.6 -0.4
EBITDA from continuing operations 4.0 -7.6
INCOME STATEMENT (amounts in Euro million) ΤΗΕ COMPANY
30/06/2013 30/06/2012 Profit/(Loss) from investments in subsidiaries & Ιnvestment Portfolio -192.3 -903.2 Profit/(Loss) from financial assets at fair value through profit or loss 1.4 -11.4 Other income 0.0 0.0 Total operating income -190.9 -914.6 Fees and other expenses to third parties -1.3 -1.0 Wages, salaries and social security costs -2.6 -2.5 Depreciation -0.3 -0.3 Other operating expenses -3.0 -2.4 Total operating expenses -7.2 -6.2 Income from cash and cash equivalent 2.5 2.9 Interest and similar expenses -13.2 -16.3 Profit/(loss) before tax -208.8 -934.2 Income tax 0.0 0.0 Profit/(loss) after tax for the period -208.8 -934.2
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Investor Release 2 September 2013
STATEMENT OF FINANCIAL POSITION (amounts in Euro million) THE GROUP 31/12/2012 30/06/2013 (Restated) Tangible & Intangible assets 1,931.6 2,031.7 Goodwill 333.8 333.8 Investments in associates 62.7 63.8 Investment portfolio 16.4 26.5 Property investments 334.8 335.2 Trading & financial instruments through P&L 14.7 16.5 Cash, cash equivalents & restricted cash 177.3 216.6 Other current & non-current assets 669.3 645.5 Assets held for sale 221.5 248.6 Total assets 3,762.1 3,918.1
Total shareholders equity 774.2 913.6 Non-controlling interests 137.9 153.5 Total equity 912.1 1,067.1 Long term borrowings 589.7 522.5 Short term borrowings 1,269.8 1,398.5 Other current & non-current liabilities 780.6 703.6 Liabilities related to Assets held for sale 209.9 226.4 Total liabilities 2,850.0 2,851.1 Total equity & liabilities 3,762.1 3,918.1
THE COMPANY
30/06/2013 31/12/2012 Tangible & Intangible assets 2.4 2.7 Investment in subsidiaries 1,505.0 1,555.5 Investments in associates 6.9 7.5 Investment portfolio 0.0 9.5 Trading & financial instruments through P&L 14.6 13.6 Cash, cash equivalents & restricted cash 100.4 113.8 Other current & non-current assets 155.2 148.9 Total assets 1,784.5 1,851.6
Total shareholders equity 1,227.9 1,297.1 Total equity 1,227.9 1,297.1 Long term borrowings 393.7 393.7 Short term borrowings 100.0 100.0 Other current & non-current liabilities 62.9 60.8 Total liabilities 556.6 554.5 Total equity & liabilities 1,784.5 1,851.6
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Investor Release 2 September 2013
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 Exchange (ATHEX) 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; Flight Ambulance International (FAI) a top-5 global fixed-wing medical evacuation company; 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; 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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