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Haikui Seafood AG Management Presentation
April/May 2012
IMPORTANT NOTICE
2
This presentation was prepared by Haikui Seafood AG solely for use at the management presentation held in connection with the contemplated offering of shares of
Haikui Seafood AG. It is furnished to you solely for your information, should not be treated as giving investment advice and may not be copied, distributed or otherwise
made available to any other person by any recipient. The contemplated offering and the information disclosed in this presentation should be kept confidential until
publicity disclosed by Haikui Seafood AG.
The selected facts and information contained in this presentation are as up to date as is reasonably possible and are subject to revision in the future. Neither Haikui
Seafood AG nor any of its directors, officers, employees or advisors nor any other person make any representation or warranty, express or implied, as to the accuracy
or completeness of the information contained in this presentation or shall have any liability whatsoever for losses howsoever arising, directly or indirectly, from any use
of this presentation.
This presentation may contain forward-looking statements, which involve risks, uncertainties and assumptions that could cause actual results or events to differ
materially from those expressed or implied by the forward-looking statements. These forward-looking statements reflect Haikui Seafood AG’s current expectations and
projections about future events and may be identified by words such as “expectation” or “target” or “forecast” and similar expressions, or by their context. These forward
looking statements are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ
materially from those described in these forward-looking statements. No obligation is assumed to update any forward-looking statements.
The following information does not constitute either an offer for the sale or the solicitation for making an offer for the purchase or the subscription of shares in Haikui
Seafood AG, but serves exclusively information purposes. Any potential future offering of shares will only be conducted on the basis of a securities prospectus to be
approved by the German Financial Supervisory Authority (BaFin). Potential investors should base their investment decision solely on such securities prospectus.
The following information may only be distributed in other jurisdictions in compliance with the respective local regulations and persons who come into possession of this
information have to inform themselves about the local regulations and have to obey them.
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
3
CONTENTS
1/ INTRODUCTION:
Management Team
4
• Founder and majority shareholder (56.6%), third generation in the seafood business
• Responsible for overall management and corporate development
• More than 20 years of management experience in the seafood industry
• Vice Chairman of the All-China Federation of Industry & Commerce – Aquatic Industry
• Joined as Deputy General Manager in 1997
• Responsible for corporate administration and operations
• Executive Member of the Dongshan County Chamber of Commerce
• More than 15 years of general management experience in the seafood industry
Mr CHEN Zhenkui // Executive Chairman/ CEO (52)
Mr HUANG Zhenping // Executive Director/ COO (48)
• Joined Haikui in 2007
• Responsible for financial reporting, treasury, compliance and investor relations
• More than 15 years experience in finance, banking and general management in international organisations (Shanghai
TREFFERT Special Coatings, Standard Chartered Bank, DBS Bank)
• Member of the Association of Chartered Certified Accountants (ACCA)
• Native English & Chinese speaker
Mr Alan GEY // Executive Director/ CFO (40)
Source: Company information
Well respected and committed team with long-standing industry expertise …
5
• German national
• Chairman of the Board of the Seafood Information Centre in Hamburg
• Former Managing Director and shareholder of Pickenpack – Hussmann & Hahn Seafood GmbH
• Former Member of the Executive Board of FROSTA AG
• Former Deputy Chairman of the Federal Association of the Fish Producing Industry in Germany
• Singapore national, native Chinese and English speaker
• Managing Partner of Zana Capital, a private equity fund management company, managing two of Haikui’s shareholders –
Mega Bond International and Everswift Holdings
• More than 15 years of experience in business management and operations, as well as the implementation and management
of joint ventures and direct investments
• German national
• Current Chairman of the Supervisory Board of Joyou AG, a Chinese designer, producer and distributor of faucets and other
sanitary ware products, listed in the Prime Standard of the Frankfurt Stock Exchange (IPO 2010)
• Former Member of the Management and Supervisory boards of Friedrich Grohe AG
Dr Klaus VIETEN // Chairman of the Supervisory Board
Dr Rainer SIMON // Deputy Chairman of the Supervisory Board
Mr Hock Eng CHAN // Member of the Supervisory Board
1/ INTRODUCTION:
Supervisory Board
… and strong dedication to corporate governance
Source: Company information
Major seafood processor in China with excellent access to raw material and established distributors worldwide
1/ INTRODUCTION:
Haikui at a Glance
6
• Seafood processor with a total portfolio of more than
100 frozen and canned seafood products
• Founded: 1993
• Processing plants: Dongshan, Fujian province, China
Haikui Seafood
• Access to diversified supplier base (both aquaculture and
capture fishing)
• Close co-operation with suppliers based on framework
agreements
• Cold storage capacity of approx. 15,000 tonnes
Procurement
• Primary and secondary processing of seafood
• All steps from inspection of new raw material to quick-
freezing, packaging and warehousing of finished products
• Annual processing capacity of 28,543 tonnes (Output)
• Compliance with international food quality standards
Business
• Diversified customer base, incl. 86 overseas and 21
domestic distributors
• Core markets served are Europe, USA, Asia and China
• Top seafood exporter in Fujian province since 2008 with
more than 10 years of solid export track record
Distribution
Summary overview Key figures
€m 2009 2010 2011
Revenue 94.5 126.2 152.1
% growth 60.9% 33.5% 20.5%
EBITDA 20.5 27.1 35.4
% margin 21.7% 21.5% 23.3%
Net profit 18.0 23.3 28.3
% margin 19.1% 18.5% 18.6%
Avg. permanent employees 366 430 605
Avg. temporary contract workers 1,438 1,475 1,589
Avg. total employees incl. temporary
contract workers 1,804 1,905 2,194
Source: Company information
Seafood which has undergone cleaning, cutting,
scaling, seasoning, drying and/ or cooking
before packing into cans and heat sterilisation
Seafood which has undergone cleaning, cutting,
scaling, seasoning, drying, grilling and/ or cooking
before quick-freezing
7
Frozen Seafood
(88% of revenue 2011: €133.7m)
Canned Seafood
(12% of revenue 2011: €18.4m)
• Shelled crab meat
• Cut crab
• Whole crab
• Crab cake
• Stuffed crab
• Pasteurised crab
• Shelled prawn meat
• Partially-shelled prawn
• Whole prawn
• Dried prawn
• Prawn ball
• Breaded prawn
• Shrimp rolls
• Sliced fish meat
• Fish fillet
• Fish paste
• Fish balls
• Fish noodle
• Fish cake
• Breaded fish fillet
• Dried fish meat
• Whole fish
• Grilled eel
• Dried cuttlefish/ squid
• Cuttlefish balls
• Seafood rolls
• Breaded squid rings
• Sliced octopus/ squid
• Squid fillet
• Whole octopus/ squid
• Breaded oyster
• Mussel, oyster, scallop
and clam meat
• Tuna meat (in vegetable oil, tomato sauce or brined)
• Mackerel (in vegetable oil or tomato sauce)
• Sardines (in vegetable oil or tomato sauce)
• Spicy snapper
• Canned eel
• Canned abalone
1/ INTRODUCTION:
Product Portfolio
Broad and well-diversified product portfolio with more than 100 high quality seafood products
Source: Company information
Crab
Prawn
Fish
Others
Fish & Others
88%12%
8
1/ INTRODUCTION:
Key Investment Highlights
Haikui presents a compelling equity story ... netting value from a sea of opportunities
Well positioned to exploit growth opportunities in China and globally
Strong domestic and international reputation as a high quality manufacturer
Strategic location in Dongshan with diversified access to high quality raw materials
Multi-species product offering and strong domestic and international distribution base
Committed management team with long-standing industry expertise
Track record of high growth, profitability and cash generation
Highly flexible organisation with efficient processing capabilities
Abundance of qualified local workforce at low cost in combination with low fluctuation
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
9
CONTENTS
89.5
91.4
93.2
95.1
98.499.5
101.4
103.4
105.8
108.2
109.8
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20071.3
1.4
1.8
2.1
2.1
2.2
2.4
2.5
2.7
2.9
5.5
6.0
7.4
7.7
35.4
Egypt
Italy
Spain
Thailand
France
Vietnam
Bangladesh
Korea
Russia
Philippines
Indonesia
India
United States
Japan
China
2/ MARKET AND COMPETITION:
Global Seafood Consumption
10
Global seafood consumption 1997-2007 Total seafood consumption by country in 2007
CAGR 2.1%
(in m tonnes) (in m tonnes)
Steadily growing global seafood consumption
Source: FAO, FAOSTAT
0
10
20
30
40
50
60
70
80
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
Japan
China
North America
Europe
Asia
World
South America
26.5
35.9
2007 2020e
16.7
17.1
2007 2020e
11
Source: FAO, FAOSTAT, International Food Policy Research Institute (IFPRI)
1 FAO’s consumption statistics based on a “disappearance model” using supply quantities: Captures + Aquaculture + Imports - Exports + ∆ Stocks - Non food uses
2 According to China’s National Statistics Bureau (NSB), seafood consumption per capita in China amounted to 9.3kg in 2007 (9.7kg in 2009)
Seafood consumption by region 1961-20071 Seafood consumption forecast
(in kg/capita)
Δ = +2%
Δ = +35%
World
China
2/ MARKET AND COMPETITION:
Global Per Capita Seafood Consumption
2007
26.5
24.0
18.3
8.9
20.6
60.8
16.7
(in kg/capita)
2
Growth to continue globally – expected to be particularly strong in China
Rapid growth of income
and urbanisation in
China from the early
1980s to late 1990s
21,781
31,838
27,359
15,581
23,898 24,292 22,944
17,71319,946
17,064 16,56619,109
Fujian Shanghai Zhejiang Hainan Guangdong Tianjin Jiangsu Liaoning Shandong Guangxi Hubei Nationwideaverage
Disposible income value 2010 (RMB/capita)
1000
818
714
670 658
444422
364
322293
267
327
Seafood product expenditure 2010 (RMB/capita)
2/ MARKET AND COMPETITION:
Seafood Expenditure by Province in China
Top provinces and municipalities in terms of expenditure value per capita on seafood products in 2010
12
Source: USDA Foreign Agricultural Services
Disposable income rank
7 1 3 21 5 4 6 9 8 12 16
Per capita seafood consumption is highest in coastal regions and areas with high
disposable income – Fujian is the #1 province in terms of per capita seafood expenditure
2/ MARKET AND COMPETITION:
Key Market Drivers
13
Source: FAO, FAOSTAT, International Monetary Fund, China’s National Statistics Bureau (NSB), USDA Foreign Agricultural Services, Company information, Euromonitor
Sustained market trends driving growth of processed seafood demand
Rising affluence in China
Rising urbanisation in China
Preference for processed seafood in inland provinces
Growth of processed seafood consumption
in China
Rising health awareness globally
Growth of fresh and processed seafood consumption
globally and in China
• High nutritional balance of seafood
• Excellent source of affordable high-quality animal protein
• Dynamic economic growth, now driven by rising domestic demand
• Rapid increase in disposable income
• Rise of the middle class
• Scarcity of fresh seafood, due to geographic isolation and under-developed distribution systems
• Longer shelf life of processed seafood
• Hectic urban lifestyle leads to shift in preference from fresh to processed, ready-to-eat seafood
• Higher importance of retail formats, e.g. supermarkets or hypermarkets
East China Sea
Major player in a very fragmented Chinese seafood processing industry
Source: Company information, USDA Foreign Agricultural Services
14
2/ MARKET AND COMPETITION:
Seafood Processing Industry in China
China –
the world’s #1 seafood
processor
Very fragmented
industry landscape
• Industry benefits from
- huge and growing domestic seafood production
- low labour costs
• 9,762 processing facilities with a capacity of 23.9m tonnes (2010)
• Trend towards industry consolidation
• Out of 10m tonnes of frozen processed seafood products in 2010,
Haikui captured a share of approximately 0.2%
Regional industry
concentration
• Seafood processing hubs in major seafood production regions
• 67% of processing facilities concentrated in Zhejiang, Shandong,
Fujian and Guangdong provinces (2010)
• Major seafood re-processing industries are based in Shandong and
Liaoning provinces
Increasing barriers
to entry
• High (working) capital requirements
• Stricter food quality and safety control
• Long due diligence procedures by distributors
• Access to sufficient supply of raw material
Haikui’s competitive
positioning
• Top seafood exporting company in Fujian province since 2008
• Largest seafood processor in Fujian province in 2011 (in terms of
sales and export statistics)
• Top 10 seafood company in China
• Main competitors from Fujian, Guangdong and Zhejiang provinces
Guangdong
Zhejiang
Fujian
Shandong
Processing
trade hub
South China Sea
Yellow Sea
Liaoning
15
Haikui’s share of PRC retail sales1
Source: Company information, Euromonitor
1 Market definition: Domestic retail sales of frozen processed and canned/ preserved seafood
(including processed, packaged and branded seafood products with additional ingredients)
(calculation based on RMB value terms)
2.9%
4.9% 4.8%5.2%
2008 2009 2010 2011
2/ MARKET AND COMPETITION:
Market Share Analysis
Haikui captures a higher share in a growing market
(in RMB m) CAGR 9.3%
Sales of processed seafood1 in PRC: Value 2006-2016e
CAGR 9.3%
5.370 5.845 6.484 6.868 7.4478.379
9.16010.008
10.92511.936
13.058
2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e 2016e
Haikui’s positioning in the (domestic) PRC market
• Key market drivers result in strongly growing consumption of
processed seafood in China
• Consequently, Haikui has put more effort into strengthening its
own Haikui brand and addressing demand in the PRC
• As a result, Haikui has significantly increased its share in the PRC
consumer market for processed seafood from 2.9% in 2008 to
5.2% in 2011
Active in Revenue
2011
(€m)
EBIT
2011
(€m) Main products
Regional focus
Production Processing Domestic Export
Dalian Zhangzidao Fishery 326.6 68.8 Frozen and ready-to-eat (scallop, squid, prawn),
sea urchin, sea cucumber, conch
Shandong Oriental Ocean Sci-Tech 83.8 9.8 Dried and fresh shrimp, instant scallop, squid, hoki chop,
sea cucumber, fish seedlings, larval rearing
Ningbo Jinri Food (Ningbo Today
Food)
n.a. n.a. Tuna, oysters, mackerel, sardines, fresh vegetables,
frozen fruits, meat, poultry, pet food
Dongshan Rongfeng Food n.a. n.a. Crab, surimi, shrimp, tilapia, salmon, clam, pollock,
grouper
Dong Xing Aquatic Product
Processing (Taiwan Chii Chwan
Group)
n.a. n.a. Prepared food (tuna and shrimp spring roll, cuttlefish ball
and filet), frozen seafood (tuna, moonfish, swordfish),
canned seafood (tuna and mackerel), snack food (squid,
eel, cuttlefish)
Longhai Gelin Seafoods
(Fujian Gelin Food Industry Group)
n.a. n.a. Canned seafood (crab, oyster, eel and clam meat),
frozen seafood (skate, sand borer, cod, tilapia, squid,
shrimp), frozen & dried fruits & vegetables
Dongshan County Dongya Aquatic
Product
n.a. n.a. Fresh and frozen packaged fish
Zhanjiang Guolian Aquatic Products 145.6 2.2 Shrimp, fish, squid
Guangdong Hengxing Group n.a. n.a. Frozen roasted eel, frozen eel, smoked eel
Source: Company websites, Capital IQ; calculated on basis of average exchange rates
1 LTM figures as of 30 September 2011
2 LTM figures as of 30 September 2010
16
2/ MARKET AND COMPETITION:
Selected Competitors
Competitive edge over its main competitors due to multi-species strategy
Guangdong
Zhejiang
Fujian
Shandong
Liaoning
17
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
CONTENTS
3/ CORPORATE PROFILE:
Haikui’s Strengths within the Value Chain
18
Distribution Supply of
raw materials Processing
Highly flexible, low-cost
organisational structure 4.
Track record in expanding
capacity and product range 5.
High quality standards 6.
Priority access to raw
materials and stringent
quality control
2.
Strategic location in
Dongshan 1.
Diversified sourcing and
sufficient storage capacity 3.
Flexible and efficient organisation, well adapted to the prevailing market environment
Strong diversification 7.
Well recognised “Haikui”
brand 9.
“One-stop-shop” 8.
Un
iqu
e S
ellin
g P
oin
t
Covered by Haikui
Guangdong
Shandong
Fujian
South China Sea
East China Sea
Yellow Sea
Dongshan Island
Source: Company information, FAO, USDA Foreign Agricultural Services 2011
Taiwan
Top seafood producing provinces in China (2010)
19
Jiangsu
Zhejiang Hubei
Guangxi
Liaoning Top 8 seafood producing provinces
Haikui’s main procurement areas
3/ CORPORATE PROFILE:
Strategic Location
Strategic location in Dongshan with excellent access to sustainable sources of high quality raw materials
Strategic advantages – current
Strategic advantages – future potential
Development of the Dongshan National Seafood Economic
Zone (“DNSEZ”) and international marine port
DistributionSupply of
raw materialsProcessing
• Access to a variety of species due to location between East
and South China Seas
• High water quality, no heavy industries nearby
• Stable, cost-competitive and sustainable supply due to
ready access to both capture fishing and aquaculture
• Abundance of local skilled workers at relatively low costs, no
dependency on migrant workers
• No competing industries for local workforce
• Well-positioned to benefit from improving relations between the
PRC and Taiwan due to proximity to Taiwan
• Access to more abundant and new species from coastal and
international waters will reduce impact from fishing restrictions
and supply side seasonality
• Further improvement of logistics infrastructure
1.
14.6% 13.6% 11.0%
8.9% 8.6% 8.0% 6.2% 5.1%
24.1%
20
3/ CORPORATE PROFILE:
Procurement
DistributionSupply of
raw materialsProcessing
Source: Company information
1 In Fujian province, restrictions on the trawling net fishing method are imposed from 15 May to 31 July.
From 1 May to 30 June, fishing restrictions apply to the stationary fishing method
Supply-side seasonality and price volatility mitigated through diversified sourcing, framework agreements and sufficient cold storage facilities
• Framework supply agreements with
61 suppliers
• Total advance payments to suppliers as a
percentage of total purchase made in the
previous year is approx. 10% 15,000
8,000
15,000
2009 2010 2011
• Diversified sourcing mix in terms of
no. of suppliers, regions and type of
sourcing
• Protection against potential diseases
of species due to multi-species
offering
Capture fishing
59.3%
Aquaculture farms
40.7%
Supplier structure
• Raw materials sourced from 84 suppliers
during 2011
• Mainly from Fujian and Guangdong
provinces
• Both capture fishing and aquaculture
Breakdown of revenues by type
of source in 2011
• Priority access
• Up to 5% discount to market price
• Quality control through supervision of
farms
• Long-term relationships
• Sufficient cold storage capacity
• Potential for price arbitrage
Framework supply agreements Cold storage capacity
2./3.
21
• Majority of seafood products manufactured in-house
• Processing mostly manual, resulting in higher recovery
rates and quality of finished products compared to
machine processed seafood
• Total processing capacity of 28,543 tonnes p.a. (Output)
• Cold storage capacity of 15,000 tonnes p.a.
Crab processing line Prawn processing line
Fish processing line
Quality control
Canning line
Packing
Comments
3/ CORPORATE PROFILE:
Processing Capabilities
Business seasonality accomodated by flexible and efficient processing capabilities at low cost
Processing overview
DistributionSupply of
raw materialsProcessing
Efficient processing capabilities
• Large number of qualified temporary contract workers
(1,589 in 2011)
• Abundant access to skilled local workers at low cost, no
competing industries
• Haikui is considered an attractive and reliable employer
• No dependency on migrant workers that might move to other
regions in China
Highly flexible organisation at low cost
Source: Company information
4.
22
2,520 2,520 2,520 2,520 2,520 2,520
1,008 1,008 1,008 1,008 1,008 1,0081,440 1,440 1,440 1,440 1,440 1,440
13,200 13,200 13,200 13,200 13,200
839
5,035 5,035 5,035 5,035 5,035
445
5,340 5,340
8,200
2007 2008 2009 2010 2011 Current
Newly acquired
assets (2010)
Canning machinery
Quick freezing
rooms
Quick freezing plate
machinery
Crab quick freezing
plate machinery
Quick freezing roller
machinery
Completion of new
quick-freezing room
in October 2007
New canning
production line
Σ 14,007 Σ 23,203 Σ 23,203 Σ 23,648
Development of pro-rata processing capacity 2007-today
New processing factory
for grilled and frozen
seafood products
(Output in
tonnes) Σ 28,543
3/ CORPORATE PROFILE:
Capacity Expansion
Continuous expansion of processing capacities and product portfolio to meet growing demand
DistributionSupply of
raw materialsProcessing
Source: Company information
5.
Σ 28,543
3/ CORPORATE PROFILE:
Quality Control System
23
Internal quality control system International certificates and accreditations
HACCP verification certificate (US)
- Allows products to be exported to the US
- Awarded since 10/2000
EU Registered Exporter of Seafood Products (EU)
- Allows products to be exported to the EU
- Awarded since 06/2005
ISO 22000:2005 Certification
- Demonstrates quality of food safety management
- Awarded since 10/2010
Halal Certificate (Islamic countries)
- Allows products to be consumed by Muslims
- Awarded since 10/2009
Stringent control procedures to comply with high international quality standards
Incoming
In-process
Final
DistributionSupply of
raw materialsProcessing
Compliance with international food quality, safety and hygiene
standards allows export to overseas regions (reviewed on a
regular basis)
Strict quality control procedures to safeguard high quality of end
products and compliance with relevant standards
Source: Company information
6.
31.9%68.1%
24
Top 3 customers 2009-2011
(in % of total revenues)
3/ CORPORATE PROFILE:
Customer Network of Distributors
15.4%
23.4%22.6%18.3%
20.7%
13.2%
10.7%
11.7%
11.2%
2009 2010 2011
Top 3 customer
Top 1 customer
Top 2 customer
Σ 49.2%
Σ 54.8%
“One-stop-shop” with multi-species product range for a diversified network of distributors
DistributionSupply of
raw materialsProcessing
Long-standing relationships with key distributors
No “real” dependency on any particular distributor, as sales can
easily be shifted between distributors
High flexibility to easily shift sales between global regions and to
react to changing economic conditions
Haikui’s distribution channels (2011)
“One-stop-shop” for distributors due to multi-species product
range
Source: Company information
1 Also includes 0.1% of direct sales to local corporates
2 Orders made by Buying Agents, but Haikui then delivers goods and invoices directly to international distributors; Buying Agent receives commission from the international distributors
• Sales mostly white label and free
on board (FOB)
• Main markets: Taiwan, US and
Europe
• Sales under both white label and
“Haikui” brand
• Main distributors primarily based
in Fujian province
• Retail customers: e.g. Carrefour,
Tesco, Trust-Mart (Haoyouduo),
NHD-Mart (Xinhuadu)
Sales via Buying
Agents2
86 Overseas
distributors
Local overseas customers
21 Domestic distributors
Local PRC customers
PRC Overseas
1
Local distributors, supermarkets, restaurants, hotels, etc.
7./8.
Σ 43.2%
19,055
22,719
129,397
75,489
99,268
26,951
2009 2010 2011
Third party brand Haikui brand
Revenue breakdown by product brand 2009-2011 (in T€)
25
Haikui was awarded
“China Famous
Brand” status in 2009
Participation in major
national and
international industry
exhibitions and
conferences to secure
new orders and/ or
expand Haikui’s
distribution network (e.g.
European Seafood
Exposition in Brussels,
International Boston
Seafood Show, China
Fishery and Seafood
Expo Exhibition)
CAGR 9.2%
CAGR 30.9%
3/ CORPORATE PROFILE:
Branding
Well-established “Haikui” brand to leverage on and further penetrate domestic market
DistributionSupply of
raw materialsProcessing
Source: Company information
9.
26
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
CONTENTS
27
Source: Company information
GEOGRAPHICAL EXPANSION
PRODUCT EXPANSION
4/ STRATEGY:
Strategic Cornerstones
Expansion of
processing
capacity
1
Expansion of
supply base
2
Expansion of
product
development
initiatives
3
Domestic PRC market
1
Overseas markets
2
I. II.
Growth strategy with strong focus on capacity expansion
Source: Company information
Chongqing
Flagship store set-up and operation:
• Set up and operated by local distributors
• Common Haikui design applied to each store
(uniform branding) to promote corporate identity
• Haikui pays for rent and renovation (incl. buying
cold storage facilities/refrigerators)
• Operator pays for labour and running costs; Buys
and sells “Haikui” branded products in the store
Sichuan
Fuzhou
Shanghai
Beijing
Dongshan Island
Taiwan
28
Overseas market Domestic PRC market
Growth in Taiwan
Further penetration of Europe and USA
• Leverage first mover advantage
in doing business with Taiwan
and further exploit
- close proximity
- lower processing costs
- better relationship between
PRC and Taiwan
• Benefit from growing global
demand
• Strengthen Haikui’s high-quality
reputation
• Leverage international export
accreditations
2 1
4/ STRATEGY:
I. Geographical Expansion
Global approach with stronger penetration of domestic market
Vorlage, bitte nicht löschen
Expansion of distribution network
6 branded flagship stores within the next 3 years
-Focus is on generating brand awareness
-Centres of main cities of target regions
-Average size of a flagship store: 30-50 sqm
Appointment of exclusive regional distributors
-Regional distributors with track record
-Focus is to distribute “Haikui” branded products
-Greater focus on inland parts
• Proven concept in the industry and in China
• Build brand and protect/ improve margins
• Expand distribution network and regional
footprint throughout China
• Intensify collaboration with distributors on
an exclusive basis
1
2
Source: Company information
GEOGRAPHICAL
EXPANSION
I.
Guangdong
Henan
Gui Zhou Xiamen
Yunnan
29
Expansion of supply base Expansion of processing capacity 2 1
4/ STRATEGY:
II. Product Expansion
Vorlage, bitte nicht löschen
Expansion of product
development initiatives 3
Strengthen existing supply relationships
• Increase order volumes
• Deepen co-operation with
aquaculture farms
Access new suppliers
• Additional framework agreements
• DNSEZ roll-out
• New international suppliers
• New R&D equipment
• Recruitment of highly skilled R&D
personnel
• Research activities with external
researchers
• Adding capacity
Upgrade of existing facilities
• Improve efficiencies
• Increase overall output
New construction
Capacity expansion to participate in rising demand
Expand sales through doubling of processing capacity within the next three years
• Build new factory within the next 3
years
• Replacement
• Increased automation
Source: Company information
PRODUCT
EXPANSION
II.
30
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
CONTENTS
31
5/ FINANCIAL PERFORMANCE:
Key Performance Indicators
Strongly growing and highly profitable business
Revenue (€m) Gross profit (€m)
152.1
94.5
126.2
2009 2010 2011
EBITDA (€m) Net profit (€m)
+ 33.5%
+ 20.5%
18.0
19.1%
18.5% 18.6%
2009 2010 2011
Net profit Margin
CAGR 26.8%
Source: Company information
28.3
Tax rate 10% 11% 12% 25%
2012ff
23.4
86.2114.3 133.7
8.3
11.918.4
2009 2010 2011
Frozen seafood Canned seafood
32
Revenue by product (€m)
+33%
+ 43%
+ 55%
+ 17%
5/ FINANCIAL PERFORMANCE:
Revenue Breakdown
Revenue by type of raw seafood (€m)
18.4 27.256.7
41.354.7
36.014.2
24.643.7
20.7
19.8
15.7
2009 2010 2011
Crab Prawn Fish Others
+ 73%
-4%
- 21%
+ 78%
+48%
+ 32%
-34%
+ 108%
Revenue by product brand (€m)
75.599.3
129.419.1
27.0
22.7
2009 2010 2011
Third party brands Haikui brand
+ 31%
+ 41%
-16%
+ 30%
Revenue breakdown by region (%)
Balanced product mix and geographic diversification to counterbalance fluctuating demand
Source: Company information
33
• No default in debtor payments in 2009-2011
• Other (non-)current assets mainly consist of
advances to suppliers made in the context of
supply framework agreements
Comments
(FYE 31 December, in T€)
5/ FINANCIAL PERFORMANCE:
Balance Sheet
Quarterly revenue development
26.3%
33.4%
17.9%18.5%
17.1%
22.4%20.6%
17.8%
30.6% 28.8%
30.3%
36.3%
2009 2010 2011
Q1 Q2 Q3 Q4
(as % of total yearly revenue; based on RMB figures)
Solid capital structure, mainly affected by working capital requirements
Balance sheet
2009 2010 2011
ASSETS 57,330 88,449 124,916
Non-current assets 7,997 20,258 18,003
Thereof: Other non-current assets 1,841 3,056 1,067
Current assets
Thereof: Cash and cash equivalents
49,333
14,918
68,191
14,951
106,913
25,587
Thereof: Inventories 13,648 15,317 23,892
Thereof: Trade receivables 18,287 32,916 47,572
Thereof: Other current assets 945 1,806 7,493
EQUITY AND LIABILITIES 57,330 88,449 124,916
Equity 50,431 80,282 116,272
Loans and borrowings 3,768 4,206 2,283
Current liabilities 3,131 3,961 6,361
Thereof: Trade payables 630 1,486 1,535
Net working capital 32,250 48,553 77,422
Net working capital as % of total revenue 34.1% 38.5% 50.9%
Net cash 11,150 10,745 23,304
Source: Company information
34
Cash flow used in investing activities 2009-2011 (in T€) Cash flow from operating activities 2009-2011 (in T€)
5/ FINANCIAL PERFORMANCE:
Cash Flow and Capital Expenditure
Acquisition of new
processing factory
for grilled and frozen
seafood products
(c. EUR 10.3m)
High cash generation, capex driven by capacity expansions
Source: Company information
35
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
CONTENTS
6/ OFFERING:
Facts & Figures
36
Issuer Name Haikui Seafood AG
Class of shares No par value ordinary bearer shares
Total number of shares (pre-IPO) 10,000,000 shares
ISIN / WKN / ticker symbol DE000A1JH3F9 / A1JH3F / H8K
Trading marketplaces Xetra; Frankfurt Stock Exchange
Market segment Regulated Market, Prime Standard (IFRS)
Joint Lead Managers and Joint Bookrunners BankM – biw AG, Pareto Securities AS
Coverage BankM – biw AG, Pareto Securities AS
Selling agents Cortal Consors, DAB bank, flatex, ING-DiBa, S-Broker, ViTrade
Total number of shares (post-IPO) Up to 11,500,000 shares
Offering Up to 1,500,000 no par value ordinary bearer shares from a capital increase
Additionally up to 225,000 shares from existing shareholders (Greenshoe option)
Offering price EUR 10.00 – EUR 13.00
Offering period 24 April – 10 May 2012
International Roadshow 24 April – 10 May 2012
First day of trading 15 May 2012 (expected)
Lock-up 12 months (hard and soft lock-up)
Designated sponsor BankM – biw AG
6/ OFFERING:
Shareholder Structure
37
Shareholder Number of shares Shares in %
Haida Holdings Pte. Ltd. 5.656.588 56,57%
Mega Bond International Limited 3.542.918 35,43%
Palm Cove International Limited 300.247 3,00%
Praise Ocean International Limited 300.247 3,00%
Everswift Holdings Limited 180.000 1,80%
Alan Gey 20.000 0,20%
Mr. She Dongpeng 0 0,00%
Free Float 0 0,00%
Total 10.000.000 100%
Shareholder Number of shares Shares in %
Haida Holdings Pte. Ltd. 5.356.588 46,58%
Mega Bond International Ltd. 3.335.496 29,00%
Palm Cove International Ltd. 282.669 2,46%
Praise Ocean International Ltd. 300.247 2,61%
Everswift Holdings Ltd. 180.000 1,57%
Alan Gey 20.000 0,17%
Mr. She Dongpeng 300.000 2,61%
Free Float 1.725.000 15,00%
Total 11.500.000 100%
38
6/ OFFERING::
Use of Net IPO Proceeds
Source: Company information
General working capital
25% - 45%
Partial financing of new factory construction
55% - 75%
39
1/ INTRODUCTION
2/ MARKET AND COMPETITION
3/ CORPORATE PROFILE
4/ STRATEGY
5/ FINANCIAL PERFORMANCE
6/ OFFERING
APPENDIX
CONTENTS
40
APPENDIX 1:
Why Listing in Germany?
Source: Company information
Fast listing process in Germany versus long lead time and high regulatory uncertainty related to a listing in China 1.
Access to long-term oriented and sophisticated European institutional investors with strong expertise and interest in
emerging markets and the food sector 2.
High transparency and corporate governance requirements in Germany reinforcing high quality and safety
standards as well as professionalism of Haikui 3.
Prestige and credibility of a German listing vis-à-vis customers, suppliers, government and banks in China due to
Germany’s strong reputation in China 4.
Higher public and media visibility of Chinese IPOs in Germany 5.
41
Corporate structure Current shareholder structure (pre-IPO)
Haikui Seafood AG
Hamburg/ Germany
(founded in 02/2011)
100%
100%
Fujian Dongshan Haikui Aquatic Products
Group Co. Ltd.
Dongshan/ PRC
(founded in 10/1993)
China Haikui Pte Ltd.
Singapore
(founded in 12/2006)
Group operating company
• Funds managed by Zana Capital are shareholders of
Mega Bond and Everswift which hold a total share of
37.2% in Haikui Seafood AG
• Mega Bond as a strategic partner is invested since 2007
APPENDIX 1:
Corporate Group Structure
Source: Company information
Haida Holdings
(CEO): 56.6%
Mega Bond: 35.4%
Everswift Holdings: 1.8%
Mr Alan GEY (CFO): 0.2% Praise Ocean (COO): 3.0%
Palm Cove: 3.0%
42
APPENDIX 2: FINANCIAL STATEMENTS
Consolidated P&L 2009 – 2011
Source: Company information
China Haikui Pte Ltd - Consolidated income statement(FYE 31 December)
Audited Audited Audited
In T€ 2009 2010 2011
Revenue 94,544 126,219 152,116
Cost of sales (72,524) (96,360) (114,203)
Gross profit 22,020 29,859 37,913
Other income 497 617 285
Distribution cost (778) (983) (1,596)
Administrative expenses (1,773) (1,696) (2,582)
Other operating expenses (44) (41) (48)
Profit from operations 19,922 27,756 33,972
Finance (expenses) / income, net 219 (1,342) (1,613)
Profit before income tax 20,141 26,414 32,359
Income tax (2,126) (3,057) (4,026)
Profit for the year 18,015 23,357 28,333
Other comprehensive income / (expenses) of the year:
Exchange differences on foreign currency translation (1,486) 6,494 7,658
Total comprehensive income for the year 16,529 29,851 35,991
Profit for the year attributable to
- owners of the parent 18,015 23,357 28,333
Total comprehensive income for the year attributable to
- owners of the parent 16,529 29,851 35,991
43
APPENDIX 2: FINANCIAL STATEMENTS
Consolidated B/S 2009 – 2011
Source: Company information
(FYE 31 December)
In T€ Audited Audited Audited Audited Audited Audited
2009 2010 2011 2009 2010 2011
Assets Equity and liabilities
Non-current assets Equity
Intangible assets 798 2,208 2,298 Share capital 7,870 7,870 7,870
Property, plant and equipment 5,358 14,755 14,371 Statutory reserves 5,830 5,830 5,830
Deferred tax asset - 239 267 Capital reserve 388 388 388
Other non-current assets 1,841 3,056 1,067 Other reserves 2,835 2,835 2,835
Total non-current assets 7,997 20,258 18,003 Currency translation reserve 1,106 7,600 15,258
Retained earnings 32,402 55,759 84,091
Total equity 50,431 80,282 116,272
Non-current liabilities
Financial liabilities 3,768 4,206 2,283
Current assets Current liabilities
Inventories 13,648 15,317 23,892 Income tax liabilities 817 1,141 1,508
Trade and other receivables 19,822 36,117 49,941 Financial liabilities 328 283 2,183
Cash and cash equivalents 14,918 14,951 25,587 Trade payables 630 1,486 1,535
Other current assets 945 1,806 7,493 Other current liabilities 1,356 1,051 1,135
Total current assets 49,333 68,191 106,913 Total current liabilities 3,131 3,961 6,361
Total liabilities 6,899 8,167 8,644
Total assets 57,330 88,449 124,916 Total equity and liabilities 57,330 88,449 124,916
China Haikui Pte Ltd - Consolidated balance sheet
44
APPENDIX 2: FINANCIAL STATEMENTS
Consolidated CFS 2009 – 2011
Source: Company information
(FYE 31 December)
In T€ Audited Audited Audited Audited Audited Audited
2009 2010 2011 2009 2010 2011
Operating activities Investing activities
Profit before income tax 20,141 26,414 32,359 Cash outflow s for other non-current assets (1,898) (929) (1,111)
Adjustments for non-cash expenses / (income) Acquisition of assets under IFRS 3 - (10,305) -
Amortisation of intangible assets 20 28 38 Cash outflow s for property, plant and equipment (138) (445) (258)
Depreciation of property, plant and equipment 536 665 1,413 Interest income received 52 74 95
Interest expense 60 103 14 Cash outflows from investing activities (1,984) (11,605) (1,274)
Interest income (52) (74) (95)
Other non-cash expenses / (income) (172) 376 464 Financing activities
Changes in working capital Cash outflow s for bank loans and other borrow ings (299) (656) (267)
Inventories (3,823) (41) (7,021) Dividend paid (1,687) (926) -
Trade and other receivables (9,106) (13,590) (10,697) Interest paid (52) (103) (14)
Other current assets 136 (591) (2,215) Other cash proceeds / (outf low s) (3) - -
Trade payables 650 762 (36) Cash outflows from financing activities (2,041) (1,685) (281)
Other current liabilities 176 336 28
Income taxes paid (1,285) (2,838) (3,765)
Cash flows from operating activities 7,281 11,550 10,487 Net increase/(decrease) in cash & cash equivalents 3,256 (1,740) 10,636
Cash & cash equivalents at the beginning of the year 11,937 14,918 14,951
Effects from currency translation (275) 1,773 1,704
Cash & cash equivalents at the end of the year 14,918 14,951 25,587
China Haikui Pte Ltd - Consolidated cash flow statement
APPENDIX 3: INTERNAL QUALITY CONTROL SYSTEM
Quality Control Measures
45
Internal quality control system Measures
- Withdrawal from and analysis of water samples in the
aquaculture farms
- Provender sample in the aquaculture farms
- Visual controls
- Odour controls
- Radioactivity controls
- Measurement of temperature
- Laboratory test particularly with regard to heavy
metals (eg: lead and mercury)
- Hygiene controls of the employees and the production lines
- Flavour controls
- Packaging controls
Stringent control procedures to comply with high international quality standards
Incoming
In-process
Final
Strict quality control procedures to safeguard high quality of end
products and compliance with relevant standards
Source: Company information
The employees in the quality control procedures have a
profound expert knowledge
Thank you