Presentation:III QUARTER of 2011
FINANCIAL RESULTS
Warsaw, November 2011
I. PKM Duda: General information
II. III quarter of 2011: Financial resultsII. III quarter of 2011: Financial results
III. Implemenation of Duda 2012 Programme
2
� One of the biggest companies in Poland operating in the meat sector
� The capital group consisting of approximately 30 companies whichactivities are as follows:
� slaughtering, dissection and distribution of meat (pork, beef, game)and processed meat,
� breeding pigs,
� cultivating cereal and other plants,
I. PKM Duda – general information
� cultivating cereal and other plants,
� producing processed meat,
� The country leader in the segment of distribution and slaughtering of redmeat,
� One of the most modern production plant in Poland
Revenue: 1 587 mln zł
Profile: food industry
Employing: approx. 1 800 people
3
CG PKM Duda structure
4
II. III quarter of 2011: Financial results
5
Consolidated financial results
Consolidated income from sales
390444
+14%
IIIQ 2010 IIIQ 2011
Export income
(in millions of PLN)
6684
+28%
IIIQ 2010 IIIQ 2011
Income (in millions of PLN)
Consolidated income from sales
PKM Duda between 2004 and IIIQ 2011 (in millions of PLN)
6
134128133
174
216
180
234239231
265261
284289
327341
369
318
343
382
419
386
446
369374
334337
390394
343
406
444
+14%
Consolidated financial results
Working capital net (in thousands of PLN)
51 476
65 393
Current liquidity ratio
1,151,15+13,9mln zł
7
According to the strategy, the company focused on improving the situation regarding liquidity and strenghtening of the working capital.
IIIQ 2010 IIIQ 2011 IIIQ 2010 IIIQ2011
Consolidated financial results
Total debt ratio
58,3%
57,9%
IIIQ 2010 IIIQ 2011
-0,4 pkt %
Net Debt/ EBITDA
IIIQ 2010
IIIQ 2011
2,6
8
The Group is consequently reducing its debt, especially the interest debt. This will result in creating the basis for the stable financing of the current business activities and further development of the Group. These actions show in the balance, where the positions regarding debts are being reduced. This fact is also confirmed in the level of
the total debt indicator (reduction by 0,4 % p.) and a stable level of the net debt indicator/ EBITDA for the last 12 months (Q3 2010 the indicator was negative due to the loss on the operating level)
IIIQ 2010 IIIQ 2011 IIIQ 2011
(- 1,3)
Consolidated financial results
Interest debet
454 873
344 461323 285
264 249 263 309 265 436300 000
400 000
500 000
9
264 249 263 309 265 436237 430
0
100 000
200 000
300 000
30.06.2009 31.12.2009 30.06.2010 31.12.2010 31.03.2011 30.06.2011 30.09.2011
Consolidated financial results
Net results (in millions of PLN)
7,4
8,8
IIIQ 2010 IIIQ 2011
+20%
EBITDA (in millions of PLN) EBIT (in millions of PLN)
22,8
20,7
IIIQ 2010 IIIQ 2011
13,513,2
IIIQ 2010 IIIQ2011
-2%
-9%
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PKM Duda and Production Segment
Pork:
� High prices of raw material – for the first time in history
the prices did not decrease in September
� very low pig supply – july – july: reduction by 9%;
� lower number of pregnant sows – july – july: reduction by 14,6%
Market conditions in 3 Q 2011Prices of pork livestock [PLN/kg]
3
3,5
4
4,5
5
5,5
1 5 9 13 17 21 25 29 33 37 41 45 49 532011 2010
11
� poor summer resulting in low demand for pork meat
� decreasing slaughter margins – withholding slaughter by plants
� increasing import of ready pork elements (in the first eight months of
the year + 7% - source MRiRW)
� improvement of the results of the production site in Grąbkowo:
revenues by 19% / slaughter by o 19% / purchase of livestock on the
home market by 30%
2011 2010
Average prices of livestock purchase (IIIQ 2010 and
2011)
8,7
6,07,4
12,7
9,010,2
+46,0% +50,0%
+37,8%
0,0
2,0
4,0
6,08,0
10,0
12,0
14,0
Bulls Cows Heifers
-10%
0%
10%
20%30%
40%
50%
60%
Źródło własne
PKM Duda and production segment
Beef
� historic record prices of slaughter cattle
� margin decrease
�necessity to redirect orientation to the EU markets as the
main export direction in relation to the declaration of
Market conditions in 3 Q 2011
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Źródło własne
opening the Turkish market for live cattle import
�returning to Spanish market, entering Portugese market
� slaughter increase for 3Q by 8 %
Game meat
� maintaining large demand on German market
� good exchange rates
�positive perspectives for future periods
+19%
561,6470,3
I-IIIQ 2010 I-IIIQ 2011
Revenues (in millions of PLN)
PKM Duda and production segment
EBITDA (millions of PLN) EBIT (millions of PLN)
19,3
I-IIIQ 2010 I-IIIQ 2011
11,5
I-IIIQ 2010 I-IIIQ 2011
- 16%
9,2
13
+24%
23,1
Volume of pig slaughtering in Grąbkowo (in
thousands)
760637
I-IIIQ 2010 I-IIIQ 2011
PKM Duda i segment produkcyjny
19%
I-IIIQ 2010 I-IIIQ 2011
14
Purchase of pigs by PKM DUD in the domestic market
in 2010 and 2009 (in thousands)
Purchase of pigs by PKM DUD in the domestic market
in IIIQ 2011 and 2010 (in thousands)
211 938 276 596
IIIQ 2011
64 658
100 000
200 000
IIIQ 2010
624 713 726 875
102 162600 000
700 000
2009 2010
+30%
+16%
szt.
szt.
Plant Segment
+ 42%
37,7
26,5
I-IIIQ 2010 I-IIIQ 2011
Revenues (PLN
million)� maintaining good situation in agriculture
� high prices of cereal and rape (high world demand for ‘energy plants’)
� direct and supplementary payments
� positive results from the segment restructurization
� Sales of AGRO-HOP and Wizental according to plan
Market conditions in 3 Q 2011
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EBITDA (PLN
million)
7,7
3,4
I-IIIQ 2010 I-IIIQ 2011
+126%
EBIT (PLN million)
6,7
I-IIIQ 2010 I-IIIQ 2011
+260%
1,9
Animal agriculture segment
Market conditions in 3 Q 2011
� according to forecasts, fodder price decrease (fattening by
approx. 10%, for piglets 3%) influenced lowering production
costs in the segment
� maximum exploiting own-source pig supply – ongoing
modernization improves own-farm power in 2012
� PKM Duda – technological avant garde!
improving results of test production activities supporting
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improving results of test production activities supporting
better quality - confirming first positive results (meat quality,
fodder exploiting) as a result of the so-called
pharmacological castration – increase in sales of KF piglets;
significant improvement of animal welfare
2%
53,552,5
I-IIIQ 2010 I-IIIQ 2011
Revenues (in
millions of PLN)
Animal farming segment
EBITDA (millions of PLN) EBIT (millions of PLN)
10,014,5
I-IIIQ 2010 I-IIIQ 2011
4,4
IIIQ 2010 IIIQ 2011
-31% - 59%10,8
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Market conditions in the first quarter of 2011
Trade segment
� further changes in the consumption structure – less processed meat, more fresh meat, mainly poultry
� intensifying actions leading to consolidation of retail stores into shopping networks
� „shrinking” market – closing down stores, deterioration of financial situation of customers
� reversing the trend of quantity sales accompanied by
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� reversing the trend of quantity sales accompanied by decrease in consumption of processed meat and red meat, the records on sales show the increase
� development of HoReCa
� dynamic increase in revenue
� developing territorial range
� new prestigeous clients
� diversifying product portfolio
� intensifying sales through vthe new channel: TELEMARKETING
Service segment
+7%
700,9653,7
Revenues (millions of PLN)
I-IIIQ2011I-IIIQ 2010
25,2
30,8
EBITDA (millions of PLN)
17,5
23,3
EBIT (millions of PLN)
-18% -25%
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I-IIIQ 2011I-IIIQ 2010 I-III 2011I-IIIQ 2010
Distribution and service segment
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Revenue from customers structure according to the segments (I-IIIQ 2011)
Wyniki segmentów GK PKM Duda
Contribution of segments to operating revenue
(I-IIIQ 2011)
Contribution of segments to EBITDA (I-IIIQ2011)
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Część 3Realizacja Programu Duda 2012Part 3Implementation of Duda 2012 Programme
Duda 2012 Programme Results
12,5 m
2,6 m
9,8 mln
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PRO effects have been bringing increaling benefits amounting to PLN 23,3 m which is 28% of thegeneral budget declared for 2010-2014 (PLN 80 m)
PRO effects have been bringing increaling benefits amounting to PLN 23,3 m which is 28% of thegeneral budget declared for 2010-2014 (PLN 80 m)
Realization 3Q2011 Budget 2011
Realization
1-3Q
ActivitiesArea
� Optimization of purchasing processes across the Group and the launch of
tendering procedures for the following categories of purchase in accordance with
the timetable:- maintenance of production department - automobile parts and other materials associated with the maintenance of
vehicle fleet
Duda 2012 Programme:Initiatives to be implemented in 2011
Building purchase
organization
Current activities
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� Accepting concept of central warehouse for the plant in Grąbkowo, the main
advantages: central storage / reducing storage costs and greater liquidity of
materials � Maintenance / reduction of employment
� Reducing the cost of maintaining personnel
� Gradual increase in outsourcing workers.
� Implementation of periodic review of results at the level of business units in
companies of the RMC Group
� The development of SAP BW for sales planned in CM Makton
� Running the BI project to build the concept of the RMC Group
Optimizing
employment costs
Development of
managerial
information system
ActivitiesArea
Costs/ margin
balance
� Reduction of production costs - optimization of the process and production costs
� Purchasing policy to be adapted to market needs - reducing raw material costs
� Portfolio optimization - maximizing the profitability of offe
� Optimization of transportation costs by optimizing routes and reducing unit costs.
� Developing new rules for sorting carcasses to the client - increasing the profitability of
Current activities
Duda 2012 Programme:Initiatives to be implemented in 2011
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� Developing new rules for sorting carcasses to the client - increasing the profitability of sales,
� Developing new rules for sorting carcasses for dissection - the increase in return on sales,
� The introduction of the principles of budgeting, sales, production and buying based on the principle of ‘just in time’ - minimizing operating costs and increase return on sales
� Developing and implementing a performance report, capacity utilization, increasing sales profitability, minimize production costs,
� Implementation of an alternative calculation rules - increase the profitability of sales,
� Developing and implementing new rules for buying pig livestock - increasing the profitability of sales,
� Development and implementation of production standards for the elements.
Duda 2012 Programme.Results - summary.
Tasks fulfilledArea
Distribution
� Improving the efficiency of purchasing goods
� Optimization of the process and the introduction of targeted telemarketing sales
� Optimization of employment in accounting and HR departments.
� HCR revenue growth of 40% Vs. IIIQ 2010
� Expanding portfolio of network clients.
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Disinvestments
� Expanding portfolio of network clients.
� Stół Polski brand revitalization - the start of the project
� Sales growth-September 2011 to January-September 2010 by 3%
� The increase in revenues for 3Q 2010 to 3Q 2011 by 7.3%
� Sales of agricultural companies Wizental Sp. z o.o. for PLN 5,5. m.
Agrohop Sp. z o.o. for the amount of EUR 3,76 m.
Legal notes
- This document on PKM Duda has been prepared by PKM Duda (the "Company").
- This document does not represent a complete or exhaustive image of the Company. This document and the
associated slides and their descriptions may contain statements that relate to the future. The forward-
looking statements are not guarantees of fulfillment of expectations of future performance and involve risks,
uncertainties and therefore the actual financial situation of the Group in the future may differ materially
from the expectations expressed or implied.
- The Company presents its own image, prepared in accordance to the best knowledge and belief, provided
that it is not possible to provide complete information. Implementation of the events referred to in this
document is subject to the satisfaction of several conditions that may occur impossible to meet. document is subject to the satisfaction of several conditions that may occur impossible to meet.
- Regarding the comprehensiveness or accuracy of the information presented in this document, no warranties
or representations shall be created. The Company is not responsible for any reason whatsoever arising from
any use of this document. This document has been prepared solely for information and publicity, and does
not constitute an offer to buy or sell or offer securities or financial instruments or to participate in any
commercial venture. This document does not constitute an offer or invitation to purchase or subscribe for
any securities in any jurisdiction, and nothing contained therein shall not constitute a basis for any
agreement, commitment or investment decision, nor should it rely on it in connection with any contract,
commitment or investment decision.
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HeadquartersPolish Meat Concern DUDA S.A. ul. Kłobucka 25, 02-699 Warsaw
tel. (+48) 22 319 94 00
www.pkmduda.pl