Milkiland: Strong 2010 Performance for Future Growth
Milkiland N.V. has published its consolidated annual report for the year 2010. The Group had a strong 2010 in financial terms and advanced in implementing its strategy of becoming an internationally recognised dairy company with leading positions in the CIS.
Key highlights of 2010
· Financial performance: Revenue grew 29% to EUR 258.5 million. EBITDA 37% up, EBITDA margin improved to 17.1% in 2010. A record net profit of EUR 22 million (2.7 times increase compared to 2009)
· Financial position: Balance sheet strengthened with total debt reduced by 14%, net debt decreased by 51%. Net Debt/EBITDA ratio improved from 2.66 to 0.95. Working capital grew more than 4 times from EUR 11.0 million to EUR 47.7 million
· Net cash by the year end increased more than 5 times and reached EUR 37.8 million
· Milkiland’s flagship brand Dobryana became international by gaining its positions in Russia
· The Group gained Ukrainian cheese exporter No. 1 position
· Milkiland N.V. became a public company after a successful IPO at the Warsaw Stock Exchange
· Consolidated 94% of shares in the Group’s key Russian asset, Ostankino Dairy Combine
Milkiland’s solid earnings performance was driven by a streamlined product and brand mix and a favourable price situation. The Group discontinued production of approximately 20% of the least profitable stock-keeping units and focused on products with higher margins. As a result, revenue grew 29% to EUR 258.5 million and EBITDA advanced 37% to EUR 44.3 million with EBITDA margin widening to 17.1%.
After the repayment of the most expensive loans, Milkiland’s finance expense decreased by 9% to EUR 12.9 million. As a result of positive developments in operation efficiency and finance cost cutting, the Group’s profit before tax grew 2.8 times to EUR 21.8 million. The Group’s net profit for the year grew 169% to record EUR 22.0 million. Net profit margin in 2010 more than doubled and reached 8.5%.
The key 2010 event for Milkiland was fulfilling of its strategic goal to become a public company. The IPO of the Group’s holding company Milkiland N.V. at Warsaw Stock Exchange was accomplished on December 6, 2010, resulting in 22.4% of the Company’sshares being placed among Polish and European investors, with net proceeds of EUR 49.3 million to the Group. These funds are used to bring the business to a new level of market power and operational excellence.
Milkiland’s strategic goal is to become an internationally recognized CIS dairy company with clear market leadership in cheese segment and a strong position in whole milk products. To support the growth and ensure quality offering, the Group aims to develop in-house raw milk production. For this purpose, Milkiland increased its land bank to 15,700 hectares.
Over the next five years, the Group targets to organically increase its volume sales by no less than 40% in fresh dairy, and by at least 30% in cheese. The value growth will be more significant, as Milkiland plans to advance more in the segments of higher value added.
Milkiland anticipates that in 2011 its marketing efforts will contribute to volume and value expansion in the segments of cheese and whole milk products. The Group’s management plans to continue organic growth in 2011. The Group also closely watches acquisitions, as the fragmented diary industry structure offers a number of opportunities, both in Russia and Ukraine.
Comment by Anatoliy Yurkevich, Chairman of the Board of Directors, Milkiland N.V.
“We have made a very good progress in implementing our strategy of becoming an internationally recognized industry leader. The new set of tasks for Milkiland in 2011 includes expansion of our market share in core markets, investments into brand equity, and vertical integration into raw milk production. We also pursue M&A opportunities to further boost our growth”.
About Milkiland N.V.
Milkiland is a TOP-5 diversified dairy producer operating in Russia and Ukraine, offering a wide range of dairy products such as fresh dairy, cheese and butter, to satisfy consumers in their everyday needs for healthy and tasty foods.
In Russia, the company produces fresh dairy products at Moscow-based OJSC “Ostankino Milk Combine” and sells under Dobryana and Ostankinskaya brands. Also, Dobryana Ukrainian cheese is sold in most of Russian regions. In Ukraine, the company operates 10 plants and offers wide range of fresh dairy, cheese and butter under Dobryana and Kolyada brands. Milkiland exports dairy products from Ukraine to over 30 countries.
Shares of Milkiland N.V. has been listed on the Warsaw Stock Exchange since December, 6, 2010.
For additional information please contact:
IR Officer, Milkiland N.V., tel. + 380 67 327 9838 mob.