heracles group analysts’ day - 12 th april 2006. highlights 2005 financial & market overview...
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Heracles GroupHeracles GroupAnalysts’ Day - 12Analysts’ Day - 12thth April 2006 April 2006
Highlights 2005
Financial & Market Overview
Financial Performance
AgendaAgenda
Highlights 2005Highlights 2005
Domestic market decline lower than expected
Better market conditions for exports
Increased fuel prices affected operating margin
44.1 million € refunded by Greek State
Positive net tax effect of 50.3 million € from
property revaluation
Full compliance with Sarbanes Oxley Act
Acquisition of ATLAS S.A. (Aggregates)
Financial OverviewFinancial Overview
in mio € 2005 2004 variance
Turnover 609,1 588 3,59%
Operating Profit 92,6 97 -4,54%
Net Profit after Tax 158,7 96,3 64,80%
Proposed dividend 0,95 € 0,40 € 137,50%
Market OverviewMarket Overview
Historical growth due to the Olympic Games construction projects Solid future evolution driven mainly by private housing One of the highest per capita consumptions worldwide, driven by
– Significant use of concrete in the buildings
– Housing & real estate viewed as a solid investment
– Potential for summer housing / secondary housing for Northern Europeans
– Infrastructure still lagging behind European standards
M tons
7,4 7,78,2 8,6 8,9
9,4
10,511,0
10,4 10,1 10,2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Market Shares – Customer StructureMarket Shares – Customer Structure
Heracles is the market leader Ready Mix concrete producers consume two thirds of the total cement supplies
Customer Structure
Constru-ction Co
8%
Distri-butors22%
Ready Mix67%
Other3%
Market Share
Competition
48%
Heracles52%
0%
Heracles Sales BreakdownHeracles Sales Breakdown: Domestic / : Domestic / ExportsExports
Domestic sales are expected to absorb the majority of our production Exports (cement & clinker) will cover the rest of our production capacity
4,7 4,9 5,4 5,9 5,4 5,3 5,2
4,3 3,5 2,3 2,7 2,9 3,1
1
2,2
0,50,50,50,4
0,5
2000 2001 2002 2003 2004 2005 2006
Mto
ns
Domestic Cement Export Cement Export Clinker
Profit & Loss EvolutionProfit & Loss Evolutionin € thousands GROUP
2003 2004 2005
Turnover 608.204 588.001 609.081Cost of sales (443.948) (444.726) (471.749)
Gross margin 164.256 143.275 137.332
Administrative & Selling expenses (46.828) (46.236) (44.781)Other revenues/(expenses) 458 (201) 41.880Share of profits/(losses) of associates 0 26 (34)
Profit from operations 117.886 96.864 134.397
Financial revenues/(expenses) (6.222) (2.519) (310)
Net income before tax 111.664 94.345 134.087
Taxation (44.260) 1.955 24.606
Net income after tax 67.404 96.300 158.693
Cement market decreased by 3% due to the finalization of Olympic projects and the reduction of public spending
Exports volume increased by 8% thanks to higher production availability (lower domestic sales ) Domestic selling prices increased gradually by 4,8 % (1 general increase and 4 targeted increases)
Export selling prices increased by 15% thanks to better market conditions
Sales Variance Analysis 2005 vs Sales Variance Analysis 2005 vs 20042004
609.081
588.00110.351
6.074
26.414
1.057
575.000
595.000
Total turnover2004
Domesticcementvolume
variance
Export cementvolume
variance
Cement pricevariance
A&C and othersubsidiaries
variance
Total turnover2005
NPAT Variance Analysis 2005 vs 2004NPAT Variance Analysis 2005 vs 2004
96.300
158.69321.080 27.023
1.547
44.138
22.651
50.000
60.000
70.000
80.000
90.000
100.000
110.000
120.000
130.000
140.000
150.000
160.000
NPAT 2004 Salesvariance
COSvariance
SGA & οther Greek Staterefund
Taxvariance
NPAT 2005
Cost of sales adversely affected by increased prices in fuels Greek State refund 44.1 m € recorded as exceptional income Deferred tax positively affected by property revaluation for tax purposes
Fuel Prices Evolution
0
10
20
30
40
50
60
70
80
2003 2004 2005
So
lid
Fu
el
Pri
ces (
US
$ /
mt)
Steamcoal Petcoke
Balance Sheet EvolutionBalance Sheet Evolutionin € thousands GROUP
31.12.2003 31.12.2004 31.12.2005
Fixed & long-term assets 696.458 659.313 651.418
Working Capital 116.241 115.575 120.130
Net cash 0 39.244 102.462
Total 812.699 814.132 874.010
Long-term liabilities 202.692 156.874 87.406
Net debt 20.617 0 0
Shareholders' equity 589.390 657.258 786.604
Total 812.699 814.132 874.010
Ass
ets
Liabilit
ies
&
Share
hold
ers'
eq
uit
y
Bank Loans EvolutionBank Loans Evolution
60.015
37.634
33.071
24.447
13.1872.497
-9.000
1.000
11.000
21.000
31.000
41.000
51.000
61.000
Loan Balance31.12.2003
Settlement SubsidiaryDisposal
Loan Balance31.12.2004
LeveragedAcquisition
Loan Balance31.12.2005
2004 2005
Shares IndicatorsShares IndicatorsP/ E
8,33
4,486,70
FY '03 FY '04 FY '05
P/ BV
0,90
0,950,98
FY '03 FY '04 FY '05
Dividend per share
0,40 0,40
0,95
FY '03 FY '04 FY '05
Earnings per share (EPS)
0,951,35
2,23
FY '03 FY '04 FY '05
Profitability IndicatorsProfitability Indicators
11,44%14,62%14,65% 11,90%
20,17%15,38%
ROE ROIC2003 2004 2005
27,01%
11,08%
24,37%16,38%
22,55% 26,05%
Gross Margin Net Margin2003 2004 2005
Working Capital IndicatorsWorking Capital Indicators
48
76
39
52
76
49
60
81
3430
40
50
60
70
80
90
D.P.O. D.I. D.S.O.
2003 2004 2005
Cash Flow 2005Cash Flow 2005
77.461
185.811 35.352
13.405
72.780
13.187
50.000
70.000
90.000
110.000
130.000
150.000
170.000
190.000
Adjusted EBITDA Capex & Invest Working Capital Interest, Tax &Dividends
Loan Proceeds Net Increase in Cash
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