Marfin Investment : MIG Investor Release Q1 2016

Microsoft Word - MIG Investor Release Q1 2016.docx

FINANCIAL RESULTS: Q1 2016

Consolidated EBITDA from business operations1increased 60.2% to €26.5m vs. €16.5m in Q1 2015

Group consolidated EBITDA (including holding companies) increased 75.6% to €23.4m vs. €13.3m in Q1 2015

• Consolidated Q1 2016 revenues amounted to €245m, recording a marginal decline of €1.2m, or -0.5% vs. Q1 2015. The marginal reduction is attributed to the prolonged economic recession in Greece, as the GDP in Q1 2016 declined by -1.3% vs. Q1 2015, as well as to the ongoing challenging economic and market conditions in the majority of the business sectors.

• Consolidated EBITDA from business operations1increased 60.2% to €26.5m vs

  €16.5m in Q1 2015. The increase is primarily attributed to the marked profitability improvement of subsidiaries ATTICA, VIVARTIA and HYGEIA.

• Group consolidated EBITDA (including holding companies) increased 75.6% to

  €23.4m vs. €13.3m in Q1 2015.

• Group consolidated EBITDA margin almost doubled to 9.6% vs. 5.4% in Q1 2015. The widening margin is attributed to efficiency improvements as well as cost containment effectiveness.

• In May 2016, the Company issued a new common bond loan amounting to

  €150m, which EUROBANK ERGASIAS undertook to cover, to refinance an equivalent amount of an existing debt facility. The refinancing agreement provides for the long-term restructuring of the said debt, by extending the maturity by 3 years (October 2019). With this agreement, the Company completed the long-term restructuring of the entirety of its outstanding common bond loans, achieving the extension of the maturity horizon.

  1 Consolidated EBITDA from business operations is defined as Group EBITDA excluding holding

  companies and non-recurring items

  Summary of key financials
  GROUP (consolidated in €m)	Q1 2015	Q1 2016
  Sales	246.2	245.0
  EBITDA business operations(1)	16.5	26.5
  % margin	6.7%	10.8%
  EBITDA(2)	13.3	23.4
  % margin	5.4%	9.6%

• EBITDA from business operations = Group consolidated EBITDA excluding holding companies and non-recurring items

• Group consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

• KEY EVENTS AND HIGHLIGHTS: Q1 2016

  ATTICA GROUP

  Q1 2015 Q1 2016

  Sales €39.6m €43.8m

  EBITDA €2.3m €5.7m

  • The key highlights of Q1 2016 performance are:

  • revenue growth of 11% vs. Q1 2015, driven by 16% more sailings (predominantly in the domestic market routes), and

  • the doubling of operating profitability (EBITDA) to €5.7m profit vs. €2.3m in Q1 2015.

  • Key contributing factors to the marked operating profitability improvement: higher number of sailings as well as the fuel savings per sailing, on account of the declining fuel oil prices. Notably in Q1 2016, the fuel cost per metric tonne, expressed in € terms (excluding hedging), declined 39% y-o-y.

  • Note that the passenger shipping industry is highly seasonal, with the highest traffic observed between July-September and the lowest between November-February.

  • As regards Attica's traffic volumes (data derived from the Greek Port Authorities and Attica estimates; change vs Q1 2015):

    ./ Domestic market routes (Cyclades, Dodecanese, North Aegean, Crete):

    • passengers: +26%

    • private vehicles: +33%

    • freight units: +34%

    • sailings: +21% (one vessel more as of end-April 2015)

      ./ Adriatic Sea routes (Patra-Igoumenitsa-Ancona and Patra-Igoumenitsa-Bari):

    • passengers: -14%

    • private vehicles: +4%

    • freight units: -5%

    • sailings: +2% (one vessel less in Q1 2016)

  • In May 2016, Attica repaid €27.4m borrowing obligations, taking advantage of the company's high liquidity, which consequently resulted to the reduction of the company's financial expenses.

  • Attica's management assesses plans for further turnover growth including alternative fleet deployment combinations, as well as, development of new routes in Greece and abroad.

    VIVARTIA

    Q1 2015 Q1 2016

    Sales €138.4m €133.2m

    FMCG (Dairy & Frozen) €108.3m €105.6m

    Food Services (FSE) €31.4m €29.4m

    EBITDA €5.1m €8.3m

    FMCG (Dairy & Frozen) €7.8m €10.2m

    Food Services (FSE) €(2.5)m €(1.8)m

  • The key feature of Group Q1 2016 performance is the significant EBITDA improvement (63% increase) to €8.3m profit vs. €5.1m in Q1 2015, attributed to efficiency improvements and ongoing efforts to rationalise costs and

  • Dairy: highlights of Q1 2016 performance:

  • significant operating profitability (EBITDA) improvement (49% increase to €4.0m profit vs €2.7m in Q1 2015), thanks to structural efficiency improvements, lower raw material costs as well as innovative product launches in value accretive segments (e.g. cereal bars, yogurt with oat)

  • strengthening of market position in Greece (DELTA remains the undisputed leader in the Greek total milk market with 27.3% share in Q1 2016), despite adverse market conditions in the Greek Dairy market (total market revenue declined 6.9% vs. Q1 2015 and white milk market declined 10.1% vs. Q1 2015),

  • strengthening of yogurt exports in Italy (Granarolo partnership), resulting in 7.1% market share (or 15.5% market share in the super markets where the products are listed) as of 31.03.2016, almost two years since launch (April 2014).

  • Frozen Foods: highlights of Q1 2016 performance:

  • revenue growth of 1% vs. Q1 2015, outperforming a declining relevant market, -15% and -9.5% for the frozen vegetables and frozen dough total markets in Greece respectively. The revenue growth was predominantly driven by increasing exports,

  • operating profitability improvement (EBITDA reached €6.2m, a 21% increase vs. Q1 2015) and

  • strengthening of market position in Greece, since the division remained the undisputed leader in the frozen vegetables market (62.8% market share in Q1 2016) as well as the leader among branded products in the frozen dough market (26.7% market share in Q1 2016), which validates the effectiveness of the strategy of increasing brand awareness and penetration (especially in frozen vegetables).

  • 27 May 2016

  • Food Services (FSE): The key highlight of Q1 2016 performance is the containment of losses at the operating profitability level (EBITDA amounted to €1.8m loss vs. €2.5m loss in Q1 2015). This has been attributed to ongoing cost cutting efforts, network and product portfolio rationalisation as well as the improved performance of the travel- related business. Note that the operating profitability improvement has been achieved in the context of deteriorating market conditions, due to the prolonged recession in Greece, which have burdened the division's revenues (7% decline vs. Q1 2015). As mentioned before, revenues of the travel related business (airport, vessels and national road motorist service stations) increased 3% vs. Q1 2015.

    HYGEIA GROUP

    Q1 2015 Q1 2016

    Sales €56.7m €59.0m

    EBITDA €6.7m €10.4m

  • Key features of Q1 2016 performance:

  • revenue growth of 4% to €59m, despite challenging market conditions on account of the recent tax and social security reforms as well as the overall economic recession, and

  • marked EBITDA improvement (+56% vs. Q1 2015) to €10.4m, attributed to ongoing efficiency improvements (group EBITDA margin widened by c590bps to 17.7%).

  • Sales and EBITDA have been adversely impacted by the legal obligation to implement the automatic claw back and rebate mechanisms in the healthcare sector (imposed by law in July 2013, effective retroactively as of 01.01.2013 until 31.12.2018). The relevant charge in Q1 2016 is €4.6m vs. €3.2m in Q1 2015. Since the introduction of the claw back and rebate mechanisms (01.01.2013), the aggregate impact to Hygeia's consolidated sales and EBITDA has reached €68m.

    SINGULARLOGIC

    Q1 2015 Q1 2016

    Sales €12.0m €9.8m

    EBITDA €1.9m €1.4m

  • Key features of Q1 2016 performance:

  • underlying revenues (excluding revenues related to the Parliamentary Elections in January 2015) increased 1% vs. Q1 2015, despite deteriorating market conditions,

  • like-for-like EBITDA (excluding the Elections-related project in Q1 2015) improved substantially (€1.4m vs. €0.5m in Q1 2015), attributed to further efficiency gains, cost containment, as well as to ongoing revenue mix improvements towards proprietary rather than 3rdparty solutions. The improvement is also evident in the significant EBITDA margin expansion (the like-for-like change amounted to c900bps vs. Q1 2015, with the margin reaching 14%).

  • Note that this performance has been achieved amidst unprecedented, adverse market conditions, on account of the imposition of capital control measures and the banking holiday in July 2015, which have caused severe disruptions to the IT sector, by means of