sjpt - 1h 2012

7/31/2019 SJPT - 1H 2012

1/10

SINTEZA INVEST GROUPBlvd Mihajla Pupina 115v, Block A3/711 070 Belgradewww.sinteza.net & www.sinteza.net/[email protected] +381 (0)11 2099 500

Analyst: Milos BijanicTel: +381 (0)11 2099 574

Email: [email protected]

MEMBER OF VICTORIA GROUP

SOJAPROTEIN

1H 2012

7/31/2019 SJPT - 1H 2012

2/10

September 28, 2012

Sojaprotein - Serbia - Manufacturing

Quarterly update

SINTEZA INVEST GROUP | SJPT, 1H 2012 2

Company Overview

Sojaprotein (SJPT) is a member of Victoria Group (a leading agricultural company in the region) and

represents the biggest regional and one of the most important soybean processor in south and east

Europe. It produces crude soya oil, soybean meal and varying range of products within the pool of human

food ingredients. The soybean used as an input is of the highest non-genetically modified (NON-GMOquality certified by Swiss-based SGS Agency) quality which gives the company outstanding competitive

advantage in the market.

From 150,000-160,000 ha under soybean corns in Serbia, 100,000 ha is for Sojaprotein's production

needs. Total company capacity is 300,000 tons per year of soybeans. 51% of total sales are exported to

foreign markets (EU, CEFTA, Russia, Belarus, Ukraine, Middle East, Turkey). Total number of employees

at the end of June this year was 412 compared to 394 at the end of 2011.

General Information

Company Name Sojaprotein PLC

Country of Domicile Serbia

Home City BecejSector Manufacturing Industry

Security Type Ordinary Shares

ISIN RSSOJAE21837

CFI Code ESVUFR

Primary Stock Exchange The Belgrade Stock Exchange

Stock Exchange Ticker SJPT

Bloomberg Ticker SJPT:SG Equity

Stock Exchange Segment Prime market

Trading Method Continuous

Market-maker Sinteza Invest Group Ltd

Benchmark Belex15 Index

Number of Shares 14,895,524

Market Float 37.06%

Beta () n/a

Auditor Deloitte d.o.o.

Fiscal Year January 1 - December 31

Strengths/Opportunities Weakness/Threats

- focus on the added-value investment projects;-prevailing position in the soybean market,- increased transparency in the operating activities,- listed in the Prime market of the BSE,-EBRD in the shareholding structure (through majority

shareholder Victoria Group),-cutting edge technology and state-of-the art equipment

for the processing system,-non-GMO raw material base seen as the companys

competitive advantage,- listing of the parent company Victoria Group.

- possible slowdown of the investment cycles due tothe crisis;

- sales drop during the change in production structure;- possible threats to NON-GMO products export due tothe interests of some big GMO players in the market.

7/31/2019 SJPT - 1H 2012

3/10

September 28, 2012


Quarterly update


Shareholding Structure

Sojaprotein as a part of Victoria Group (VG) which is a

regional leader in agribusiness has one of the better diversified

shareholding structure. VG holds 63% of Sojaprotein while the

rest of37% makes a solid market floatof the company.

Business Performance

Production

In first six months of 2012 total of 106,879 tons of soybean were processed (annual supply in 2011 was

230,000 tons) which is 0.5% less than in 1H 2011, but total quantity produced was 0.15% higher and

amounted to 100,290 tons. Processed soybean is distributed to 3 main business lines:

1. Soybean meal used for animals - the production fell by 10.1% due to the lower demand indomestic market.

2. Crude Soy Oil - rise by 3.4% due to the better quality of raw materials and higher efficiency.3. Human Food Ingredients solid increase by 23% due to the higher demand of products: BIG

(Flour and Grits jump by 27.5% y-o-y), TSP (20%) and Lecithin (11%).

4. Other Products 1 * y-o-y growth by 168% was the highest of all products type, but itsparticipation in total production is still low 3%. and at the end of 1H12 this class participated

Realization

In 1H 2012 sales amounted to RSD 5.4bn which is a solid 12.1% increase y-o-y (sales volume in the

same period totaled to 91,932 tons, 5.7% up y-o-y - about 8.4k tons less than produced. The result was

mainly due to HFI products which participated with 26.4% in total sales and recorded near 30% sales

jump y-o-y, because two product lines with the highest participation TSP (13.5%) and BIG (11.4%) had

great jump in sales - 35.5% and 28.3% respectively. Other products class saw highest jump amongst all

classes but its participation is still very low in total revenues, only 0.7% at the end of 1H 2012.

1 Includes SojaVita, Husk, oily residue, Sopro PTG / SH and services

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Soya Oil Soybean Meal Other Products Human FoodIngredients

tons

1H 2011

1H 2012

Victoria

Group

63.04%

FreeFloat

36.96%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

BIG TSP MIX Lecithin

tons

1H 2011

1H 2012

7/31/2019 SJPT - 1H 2012

4/10

September 28, 2012


Quarterly update


Important thing is that total exports in 1H 2012 recorded rise both in quantity and value which is in

accordance with the strategy of Sojaprotein. Volume of goods exported advanced by 11% y-o-y

participating at the end of 1H 2012 with 37% in total sales volume (around 2 p.p. higher than in the

same period of 2011). The rise has even more value knowing that all the increase came from the growth

in HFI products which have higher profitable margins than other product lines. Observed by value,

exports recorded even higher growth, soaring near 19% to RSD 2.75bn compared to 1H 2011, making

more than a half (51%) of the total revenues (48% in 1H 2011). EU is still the most important foreign

market with 84.7% of all exports.

BIG12%

TSP

10%MIX

0%

Lecithin

1%

Soya Oil

20%

Soybean

Meal55%

OtherProducts

2%

Quantity Breakdown

BIG11%

TSP

14%MIX

0%Lecithin

1%

Soya Oil

35%

SoybeanMeal

38%

OtherProducts

1%

Sales Breakdown

0

10,000

20,000

30,000

40,000

50,000

60,000

Soya Oil Soybean Meal Other Products Human Food

Ingredients

tons Quantity sold per products: 1H 2012/1H2011

1H 2011

1H 2012

0

2,000

4,000

6,000

8,000

10,000

12,000


tons

1H 2011

1H 2012

-400

100

600

1,100

1,600

2,100

Soya Oil Soybean Meal Other Products Human FoodIngredients

m RSD Sales per products: 1H 2012/ 1H2011

1H 2011

1H 2012

0100200300400500600700800


m RSD

1H 2011

1H 2012

7/31/2019 SJPT - 1H 2012

5/10

September 28, 2012


Quarterly update


Financial Performance

In first six months this year total operating revenues recorded very good increase of 18% to RSD 7.6bn

y-o-y (near RSD 2bn was generated from sales with related parties almost 100% growth) but the rise

in operating expenses (due to the higher input prices as a result of a drought) pushed down EBITDA by7%. Higher depreciation and amortization costs because of the investments in fixed assets (new plant

and equipment) made EBIT to fall by 9%. Moreover, huge FX losses of more than RSD 400m made net

income to plunge 62% y-o-y.

FX EURRSD 84.95 93.95 103.04 101.95 101.93 110.82

Statement of Earnings (m RSD) 2008 2009 2010 2011 1H 2011 1H 2012

Operating Revenues 19,197 16,441 14,513 12,189 6,584 7,608

Sales 19,122 16,138 14,586 11,834 6,117 7,203

Growth - -16% -10% -19% - 18%

Change in Inventories 75 303 -73 355 467 405

Operating Expenses 17,255 14,925 12,794 10,981 5,837 6,926

COGS 10,304 6,172 3,979 1,818 1,158 1,643

Cost of Materials 6,055 7,808 7,846 7,915 4,095 4,607

Other Operating Expenses 896 945 969 1,248 584 676

EBITDA 2,090 1,666 1,867 1,399 839 782

Growth - -20% 12% -25% - -7%

EBIT 1,942 1,516 1,719 1,208 747 682

Growth - -22% 13% -30% - -9%

Other Non-Operating Items -1,534 -1,028 -927 -65 -78 -428

Net Income 408 488 792 1,143 669 254

Growth - 20% 62% 44% - -62%

PROFITABILITY - Margins 2008 2009 2010 2011 1H 2011 1H 2012

EBITDA Margin 10.9% 10.3% 12.8% 11.8% 13.7% 10.9%

EBIT Margin 10.2% 9.4% 11.8% 10.2% 12.2% 9.5%

Profit Margin 2.1% 3.0% 5.4% 9.7% 10.9% 3.5%

0

5,000

10,000

15,000

20,000

25,000

2008 2009 2010 2011 1H 2011 1H 2012

m RSD

Sales and EBITDA

Sales EBITDA

0%

2%

4%

6%

8%

10%

12%

14%

16%

2008 2009 2010 2011 1H 2011 1H 2012

%

Margins

EBITDA Margin EBIT Margin Profit Margin

7/31/2019 SJPT - 1H 2012

6/10

September 28, 2012


Quarterly update


PROFITABILITY - Returns 2008 2009 2010 2011 1H 2011 1H 2012

Operating Return on Assets 9.9% 7.6% 9.2% 7.0% 10.5% 6.7%

Return on Assets (ROA) 2.1% 2.4% 4.2% 6.7% 9.5% 4.3%

Return on Equity (ROE) 5.9% 6.0% 8.1% 10.7% 14.0% 6.5%

Return on Capital (ROTC) 11.1% 8.5% 10.5% 7.8% 11.1% 7.1%

The increase of 38% in long-lived assets was a result of the earlier mentioned investments in new factory

and equipment (PP&E advanced 44%). Most of it the Company finances through long term borrowings

and thats why this position almost doubled (89%) on a y-o-y basis while compared to the end of 2011

the increase was 51%. On the other side, the encouraging was decrease of short-term liabilities which

plunged 20%. Although the long term liabilities made huge increase, own sources of finance participate

with 64% (2 p.p. fall over 2011) and therefore Sojaprotein has strong long-term financial stability and

lower long-term operating and financial risk.

FX EURRSD 88.60 95.89 105.50 104.64 102.46 115.82

Balance Sheet (m RSD) 2008 2009 2010 2011 1H 2011 1H 2012

Assets 19,572 20,373 17,072 17,294 15,816 18,115

Long-lived Assets 4,285 4,599 5,050 7,987 6,056 8,361

PP&E 3,584 3,728 4,184 7,117 5,189 7,490

Other Long-lived Assets 701 871 866 870 867 872

Current Assets 15,287 15,774 12,022 9,307 9,760 9,753

Inventories 6,858 8,261 5,727 4,744 2,554 4,835

Receivables 7,496 5,913 4,563 3,777 4,394 3,969

Cash and Cash Equivalents 493 88 221 524 256 259

Deferred Tax Assets 0 0 0 0 0 0

Equity 6,885 9,341 10,096 11,260 10,764 11,514

Liabilities 12,534 10,900 6,840 5,899 4,916 6,465

Long-term Borrowings 5,106 4,155 1,791 2,896 2,311 4,366

Other Long-term Liabilities 47 45 45 50 45 50

Short-term Liabilities 7,381 6,700 5,004 2,953 2,560 2,049

Short-term Borrowings 5,494 4,732 2,559 2,346 1,920 1,520

Accounts Payable 1,767 1,901 2,381 522 512 459

Other Short-term Liabilities 120 67 64 85 128 70

Deferred Tax Liabilities 154 132 136 136 136 136

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 1H 2011 1H 2012

% Source Structure

Equity Long-term Borrowings Short-term Borrowings

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2008 2009 2010 2011 1H 2011 1H 2012

m RSD Asset Structure

Long-lived Assets Current Assets

7/31/2019 SJPT - 1H 2012

7/10

September 28, 2012


Quarterly update


LIQUIDITY 2008 2009 2010 2011 1H 2011 1H 2012

Current Ratio 2.07 2.35 2.40 3.15 3.81 4.76

Quick Ratio 1.14 1.12 1.26 1.55 2.81 2.40

Cash Ratio 0.07 0.01 0.04 0.18 0.10 0.13

SOLVENCY 2008 2009 2010 2011 1H 2011 1H 2012

Debt-to-Equity 1.54 0.95 0.43 0.47 0.39 0.51

Debt-to-Capital 0.61 0.49 0.30 0.32 0.28 0.34

Debt-to-Assets 0.54 0.44 0.25 0.30 0.27 0.32

Financial Leverage 2.84 2.18 1.69 1.54 1.47 1.57

Trading

The company paid out stock dividends in its history by converting retained earnings into stated capital.

The reason has been the aim of the major shareholder to make the capital base of Sojaprotein firm andstable. While on the road of new investment cycles, Sojaprotein does not plan to pay out cash dividends.

MAIN STOCK VALUES 2008 2009 2010 2011 1H 2011 1H 2012 26-Sep-12

Price 562 687 562 565 984 527 437

Face Value N/A N/A N/A N/A N/A N/A N/A

Book Value per Share (BVPS) 462 627 678 756 723 773 773

Basic Earnings per Share (EPS)* 27.4 32.8 53.2 76.7 101.4 48.9 48.9

Dividend per Share (DVPS) 0.0 0.0 0.0 0.0 0.0 - -

Dividend Yield 0.0% 0.0% 0.0% 0.0% 0.0% - -

*calculated on total outstanding (not weighted average) number of ordinary shares

MAIN VALUATION INDICATORS 2008 2009 2010 2011 1H 2011 1H 2012 26-Sep-12

Price-to-Earnings 20.52 20.97 10.57 7.36 9.71 10.78 8.94

Price-to-EBITDA 4.01 6.14 4.48 6.02 7.77 5.85 4.85

Price-to-Book 1.22 1.10 0.83 0.75 1.36 0.68 0.57

Price-to-Sales 0.44 0.63 0.57 0.71 1.05 0.61 0.50

Market Cap (in m RSD) 8,371 10,233 8,371 8,416 14,657 7,850 6,509

Enterprise Value (m RSD) 18,478 19,032 12,500 13,134 18,632 13,477 12,136

Enterprise Value-to-EBITDA 8.84 11.42 6.70 9.39 9.88 10.05 9.05

Enterprise Value-to-EBIT 9.52 12.55 7.27 10.87 11.23 11.78 10.61

INFORMATION ON STOCK PRICE 26-Sep-12

Last Price 437

All-Time-High 6,699

All-Time-Low 180

52-Week-Change -25.0%

1M -11.7%

YTD -22.7%

INFORMATION ON TRADING (m RSD) 26-Sep-12

Last Trading Value 48,507

5-Day-Trading Value 2,510,755



YTD Average 3,817,049

Last Trading Volume 111

5-Day-Trading Volume 5,752

30-Day-Trading Volume 48,213

90-Day-Trading Volume 809,771YTD Average 7,211

7/31/2019 SJPT - 1H 2012

8/10

September 28, 2012


Quarterly update


Growth Plans and Projections

Last year Sojaprotein began the investment worth EUR 26.2m for the production of traditional soya

protein concentrates (higher phase of soybean processing) total capacity of 70,000 t/y. The production of

this new product replacing the production of soybean meal started in the second half of this year and is

supposed to generate revenues worth EUR 57m at full rate of utilization, which is expected to be next

year. The operational efficiency will more than doubled the EBITDA margin, from current 11% to 24%.

Additionally, Sojaprotein starts the new investment cycle next year for the production of functional soya

protein concentrates which are expected to generate annual revenues of EUR 25m after full utilization

that is expected in 2014 (one year after the investment has been completed). The utilization rate in the

first year is estimated to be 50%. The investment is worth EUR 29.7m and represents the second stage

after which the Company will be fully vertically integrated.

The future levels of companys sales are based on indiv idual projections of volume sold of each product

and forecasted sale price. The company plans to sell 40k tons of soya oil in 2012 and 37k tons of the

same product by 2015. Since it changes the production structure, Sojaprotein will produce 77.4k tons of

soybean meal in 2012 and cease the production in 2013. This year the company will start producing

traditional SPC of 32.5k tons and increase the production to 70k in 2013, 60.6k in 2014 and 54k tons in

2015. In 2014 the production of functional SPC will begin and increase to the full capacity of 15.5k tons

by 2015. The volume of the production and sale of human food ingredients shall remain at the same

levels as it was for last couple of years.

From 2012 to 2015 sales is expected to grow at the compound annual growth rate of 13.65% and

EBITDA to increase at CAGR of great 40.75% at the same time frame.

0

50

100

150

200

250

350

400

450

500

550

600

650

23-Sep-11 23-Jan-12 23-May-12 23-Sep-12

m RSDRSD

Price and Turnover

0

5,000

10,000

15,000

20,000

2012F 2013F 2014F 2015F

m RSDSales & EBITDA

Sales Revenues EBITDA

SharePrice

Belex15

Index

40

50

60

70

80

90

100

110

120

30-Dec-11 24-Mar-12 17-Jun-12 10-Sep-12

%Benchmark Comparison

12.5%

19.9%

24.0% 23.8%

10%

15%

20%

25%

30%

2012F 2013F 2014F 2015F

EBITDA Margin

7/31/2019 SJPT - 1H 2012

9/10

September 28, 2012


Quarterly update


Proforma Income Statement (m RSD) 2012F 2013F 2014F 2015F

Operating Revenues 12,400 15,416 17,159 17,960

Sales Revenues 12,091 15,174 16,594 17,749

Growth 2% 26% 9% 7%Other Operating Revenues 82 84 87 88

Change in Inventories 228 157 478 123

Operating Expenses 11,160 12,737 13,665 14,247

Cost of Sales (COGS) 0 0 0 0

Cost of Materials 9,867 11,333 12,014 12,526

Growth 25% 15% 6% 4%

EBITDA 1,520 3,032 4,005 4,239

Growth 9% 99% 32% 6%

EBIT 1,240 2,679 3,494 3,714

Growth 3% 116% 30% 6%

Net Income 682 1,923 2,609 2,800

Growth -40% 182% 36% 7%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012F 2013F 2014F 2015F

m RSDEBIT & Profit

EBIT Net Income

10.2%

17.6%

20.9% 20.8%

5.6%

12.6%

15.6% 15.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2012F 2013F 2014F 2015F

EBIT & Profit Margin

EBIT Margin Profit Margin

7/31/2019 SJPT - 1H 2012

10/10

September 28, 2012


Quarterly update


Appendix

Sources

Belex, Sojaprotein, SIG, Bloomberg.

Analyst Certification

The views expressed in this report accurately reflect the personal views of undersigned analyst about the issuer of the security. The

undersigned analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. The

recommendation has not been disclosed to anyone prior to public release.

Disclaimer

The data in this material is of the informative nature and is intended exclusively as a basis for the further reconsideration. The company

Sinteza Invest Group ad has prepared this material with all the necessary care and based on the data it received from the sources it

believes to be reliable. Sinteza Invest Group ad does not guarantee for the accuracy, promptness, completeness and correctness of the

data in this material. The information, opinions, estimates and forecasts may well be affected by subsequent changes in market

conditions. This report does not take into account the investment objective, financial situation or particular needs of any particular

investor. Investors should obtain individual financial advice based on their own particular circumstances before making an investment

decision based on the recommendations in this report. This report is disseminated and available primarily electronically to professional

investors and may not be reproduced in whole or in part, or published for any purpose. Additional information is available on request.

sjpt - 1h 2012

Documents