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Potential transaction
Owners of the concern UAB „MG Baltic“ (MGB) and its associated company UAB “Mineraliniai vandenys“ (MV, the Seller) are considering possibility to sell up to 40% stake of AB "Stumbras" (Stumbras, the Company) to several or more financial investors. Today the Seller owns 94% of Stumbras shares.
An investor into Company has an opportunity to increase the value of the capital asset that gives it a higher worth than the purchase price, to receive dividends, to participate in the strong growth of Lithuania’s domestic economy and to capitalize upon the Company high quality products, strong brands, export possibilities and production capabilities as well.
Introduction
Stumbras, the largest Lithuanian producer of strong drinks, was established in 1906. Stumbras followed the highest quality standards applied on the production of vodka and traditional, classical technologies, taking over the vodka-making experience of several ages. Stumbras follows the same principles up to this day.
Stumbras retained its glory in the Soviet times as well. In autumn 2003, “Mineraliniai vandenys”, a company controlled by MG Baltic Group, won the invitation to tender for the privatization of "Stumbras". On the 27th October 2003, MV successfully took over the management of the Company. In 2005 the bioethanol plant in Silute has been spun-off, creating a share company AB “Biofuture”.
Today Stumbras surprises many countries all over the world with its unique drinks, and has been holding the leading position for already one hundred years. The power and strength of Stumbras lies in the century-old experience, preserved values and holding to fundamental principles.
All products made by "Stumbras" are in conformity with the requirements of ISO 9001:2000 (LST EN ISO 9001:2001)
Financial data and forecasts of AB Stumbras up to year 2011
Recently Stumbras has introduced forecasts of its activities to market players. The sales and profit of IQ 2007 give us an expectation that the prognoses of 2007 will be exceeded. In IQ of 2007 sales of the largest Lithuanian strong drink producer Stumbras amounted to LTL 29,16 million (VAT excluded), which is 66% more than in IQ of 2006. In IQ of 2007 Stumbras’ profit was LTL 7,19 million before taxes or 2 times more than in IQ of 2006, when profit before taxes was LTL 3,475 million.
Such financial results of the Company were determined by the establishment (in the market) of the new products launched by the Company last year and by active operations abroad.
Note: the results of 2003-2006 are shown only from the main activity, i.e. excluding results of AB “Biofuture” which was spun of in 2005.
Dividend policy
The controlling shareholder MV is going to keep the dividend payout ratio no less than 80% in 2007-2008, and no less than 30% several years after the 2008.
Expected capital gain
Stumbras’ shares are listed in OMX Vilnius stock exchange (STU1L).
Assuming that EV/S, EV/EBITDA, P/E and the number of shares will remain the same as today, the market capitalization of Stumbras should reach LTL 620-650 million in 2011. Today market capitalization of Stumbras is about LTL 320 million.
Sales and the markets
Today Stumbras is the leader in the Lithuanian market of strong alcoholic drinks. It covers about 47% of the strong drink market. Stumbras gradually reduces the part of a cheep production in its portfolio and increases the part of Premium segment which brings high added value to the Company.
Stumbras is expanding its export volume in Poland. In 2006, sales of Stumbras in Poland grew by more than 164% (figures in LTL), compared to 2005, meanwhile the Company’s strong drinks export in general – by 73%. Today Stumbras covers 0,13 % of the Poland market. Meanwhile Stumbras has ambitious plans to reach 3 % of this market in 2011. Other markets - Latvia, Estonia, USA, Israel.
Distribution
An aggressive expansion and increasing of export are based on strong distribution systems. The distribution is an advantage of Stumbras against other producers of strong alcoholic drinks.
Lithuania
The parent company of Stumbras – MINERALINIAI VANDENYS is the leading wine, spirits and tobacco distributor in Lithuania and the biggest and most modern in the Baltic countries (Lithuania, Latvia, and Estonia).
Poland
In March 2007 the Company signed the cooperation agreements with leading Polish distribution companies Zywiec Group and Alti. Zywiec group attends 13 distribution centers and almost 50 thousand points of sale. Polish wholesaler Alti has gained strong positions in Katowice and Krakow regions. At the time being, the company holds approx. 15% of national wholesale market. Since August 2006, the Company has been working with CEDC Group, another Polish distributor that attends 16 distribution centers and holds very strong positions in Poland and approx. 50% of Poland’s national wholesale market.
Estonia
Stumbras cooperates with DUNKER – the leading importer and distributor of alcoholic beverages in Estonia.
Employees
There were approximately 300 qualified employees at the beginning of 2007 in the Company.
Plans of expansion
Stumbras is looking for the possibility to expand its activities and to acquirea producer of strong alcoholic drinks in Poland or in other neighboring country. Having in mind that the Polish government announced about the privatization of alcohol producers, there aren’t any potential target at the moment.
--------------------
Information and contacts:
Renata Maksimavičienė, Investment Project Manager
r.maksimaviciene@mgbinvestment.lt
Owners of the concern UAB „MG Baltic“ (MGB) and its associated company UAB “Mineraliniai vandenys“ (MV, the Seller) are considering possibility to sell up to 40% stake of AB "Stumbras" (Stumbras, the Company) to several or more financial investors. Today the Seller owns 94% of Stumbras shares.
An investor into Company has an opportunity to increase the value of the capital asset that gives it a higher worth than the purchase price, to receive dividends, to participate in the strong growth of Lithuania’s domestic economy and to capitalize upon the Company high quality products, strong brands, export possibilities and production capabilities as well.
Introduction
Stumbras, the largest Lithuanian producer of strong drinks, was established in 1906. Stumbras followed the highest quality standards applied on the production of vodka and traditional, classical technologies, taking over the vodka-making experience of several ages. Stumbras follows the same principles up to this day.
Stumbras retained its glory in the Soviet times as well. In autumn 2003, “Mineraliniai vandenys”, a company controlled by MG Baltic Group, won the invitation to tender for the privatization of "Stumbras". On the 27th October 2003, MV successfully took over the management of the Company. In 2005 the bioethanol plant in Silute has been spun-off, creating a share company AB “Biofuture”.
Today Stumbras surprises many countries all over the world with its unique drinks, and has been holding the leading position for already one hundred years. The power and strength of Stumbras lies in the century-old experience, preserved values and holding to fundamental principles.
All products made by "Stumbras" are in conformity with the requirements of ISO 9001:2000 (LST EN ISO 9001:2001)
Financial data and forecasts of AB Stumbras up to year 2011
Recently Stumbras has introduced forecasts of its activities to market players. The sales and profit of IQ 2007 give us an expectation that the prognoses of 2007 will be exceeded. In IQ of 2007 sales of the largest Lithuanian strong drink producer Stumbras amounted to LTL 29,16 million (VAT excluded), which is 66% more than in IQ of 2006. In IQ of 2007 Stumbras’ profit was LTL 7,19 million before taxes or 2 times more than in IQ of 2006, when profit before taxes was LTL 3,475 million.
Such financial results of the Company were determined by the establishment (in the market) of the new products launched by the Company last year and by active operations abroad.
Note: the results of 2003-2006 are shown only from the main activity, i.e. excluding results of AB “Biofuture” which was spun of in 2005.
Dividend policy
The controlling shareholder MV is going to keep the dividend payout ratio no less than 80% in 2007-2008, and no less than 30% several years after the 2008.
Expected capital gain
Stumbras’ shares are listed in OMX Vilnius stock exchange (STU1L).
Assuming that EV/S, EV/EBITDA, P/E and the number of shares will remain the same as today, the market capitalization of Stumbras should reach LTL 620-650 million in 2011. Today market capitalization of Stumbras is about LTL 320 million.
Sales and the markets
Today Stumbras is the leader in the Lithuanian market of strong alcoholic drinks. It covers about 47% of the strong drink market. Stumbras gradually reduces the part of a cheep production in its portfolio and increases the part of Premium segment which brings high added value to the Company.
Stumbras is expanding its export volume in Poland. In 2006, sales of Stumbras in Poland grew by more than 164% (figures in LTL), compared to 2005, meanwhile the Company’s strong drinks export in general – by 73%. Today Stumbras covers 0,13 % of the Poland market. Meanwhile Stumbras has ambitious plans to reach 3 % of this market in 2011. Other markets - Latvia, Estonia, USA, Israel.
Distribution
An aggressive expansion and increasing of export are based on strong distribution systems. The distribution is an advantage of Stumbras against other producers of strong alcoholic drinks.
Lithuania
The parent company of Stumbras – MINERALINIAI VANDENYS is the leading wine, spirits and tobacco distributor in Lithuania and the biggest and most modern in the Baltic countries (Lithuania, Latvia, and Estonia).
Poland
In March 2007 the Company signed the cooperation agreements with leading Polish distribution companies Zywiec Group and Alti. Zywiec group attends 13 distribution centers and almost 50 thousand points of sale. Polish wholesaler Alti has gained strong positions in Katowice and Krakow regions. At the time being, the company holds approx. 15% of national wholesale market. Since August 2006, the Company has been working with CEDC Group, another Polish distributor that attends 16 distribution centers and holds very strong positions in Poland and approx. 50% of Poland’s national wholesale market.
Estonia
Stumbras cooperates with DUNKER – the leading importer and distributor of alcoholic beverages in Estonia.
Employees
There were approximately 300 qualified employees at the beginning of 2007 in the Company.
Plans of expansion
Stumbras is looking for the possibility to expand its activities and to acquirea producer of strong alcoholic drinks in Poland or in other neighboring country. Having in mind that the Polish government announced about the privatization of alcohol producers, there aren’t any potential target at the moment.
--------------------
Information and contacts:
Renata Maksimavičienė, Investment Project Manager
r.maksimaviciene@mgbinvestment.lt