finding more “nuggets” in unexploited claims – connecting ...finding more “nuggets” in...

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International Management and Executive Search Consultants

allocate

Presentation at the Ecosummit 2014 Berlin, 04. June, 2014

Finding more “Nuggets” in Unexploited Claims – Connecting with the South East European

VC and Startup Scene - Dr. Jörg Fabri, CEO allocate International -

2 140604_Ecosummit 2014_Berlin Realizing VC and Startup opportunities in SEE © allocate 2014

Inhalt

Key aspects regarding the VC and startup situation in SEE/ TR

allocate’s approach to realize successful investments and opportunities in SEE/ TR


Financial investors activity in Europe (amount in bn €, no. of companies)

After the financial crisis VC investments in Europe are still only at half the size compared to the time before 2008

Should VC investors and Startups just wait for better times or is it required to modify the approach and look out for new growth options?

Source: EVCA/ PEREP, allocate


Incremental amounts raised during the year (€ bn)

It seems that the low investment intensity in Europe will not improve quickly since new raised funds are low and dominated by buyouts

What are the roots causes for this reluctance? Is Europe generally regarded as not sufficiently prospectus with regard to growth and stability?



Venture Capital – Investments as % of GDP (2013)

Within Europe there is a large deviation regarding the application of VC investments – North-West much more developed than South-East

The situation in South East Europe could be characterized as a problem, but why not taking this simply as a great opportunity to exploit unexploited potential?

Source: Thomson Reuters, EVCA/ PEREP, allocate


Annual investments of Financial Investors in the CEE region (2007-2012), in mn €

Strong deviation also within Eastern Europe – the investment activity in some CE countries is still very low and instable

Exploitation of opportunities for VCs and Startups in Eastern Europe requires a consistent regional and strategic approach – and just opportunistic actions



CEE Venture Capital investments by stage, 2007-2012, in mn €

Whilst the general VC investment activity in SEE has not yet recovered from the drop in 2008 specific investments in Startups seem to emerge

Considering specific features of the SEE markets – focus on Startups rather than on later stage ventures



CEE Venture Capital Investments by stage, 2007-2012 (nr. of companies)

Whilst the total volume of South East European VC investments is low the number of companies is even above the 2008 all time high

Smaller investments seem to be more attractive in the SEE market environment Source: EVCA/ PEREP, allocate


CEE Venture Capital Investments by Sector, 2007-2012, (in mn €)

VC investments in South East Europe are favouring IT, Communication and the Energy sector

The VC investments and Startup activities reflect specific features of the SEE region: good education, low labour costs and improvement needs and opportunities in the energy sector



Venture Capital – Fundraising geographical breakdown(2013,(2012), Source of funds

The fundraising for South East Europe VC investments has to happen within Western Europe – largely utilizing EU framework conditions

Understanding the EU as one home market place for VC and Startups – facilitating more cross border activities rather than taking a too local view



Innovation attitude of EU countries

VC and Startup actvity is much needed in SEE: within the EU RO and BG are the countries with the lowest innovation pace

The economic crisis 2009/ 2010 was a real break point in the positive development regarding innovation in RO and BG – this needs to be turned around quickly

Source: EU Innovation Scoreboard 2014


Venture Capital in Turkey

As also being part of SEE Turkey is nevertheless a special topic – with its size, its growth and its specific cultural and business environment

All attractiveness indicators for Venture Capital investments in Turkey are constantly improving – some are already ranking in the first Quartile of the international comparison

Sourc: IESE


Venture Capital in Turkey

With one exception Turkey ranks better than the Eastern European average with regard to VC performance drivers

Why sticking to the classical or mature VC markets whilst other opportunities maintain unexplored?

Sourc: IESE


Inhalt

Key aspects regarding the VC and startup situation in SEE/ TR

allocate’s approach to realize successful investments and opportunities in SEE/ TR


Overview allocate’s scope of activities

allocate’s scope combines the investors’ perspective with the ones of companies and Startups – acting as an entrepreneurial partner

•  Creating opportunities •  Funding /financing •  Formation of

consortia •  Programme

Management (BOOT)

•  Search of targets /buyers

•  Due diligence •  Valuation •  Post Acquisition

Management

•  Corporate Strategy •  Operational

excellence •  P&L value

improvements •  Interims-

Management

•  HR –Strategy •  Search •  Management Audits •  Compensation

Commitment for long-term entrepreneurial partnership alongside with leading edge service orientation

•  Retainer / Fixed component

•  Success Fee

•  Fixed fees •  Success fee

(where applicable)

•  Success fees •  Cost coverage/

small retainer

•  Success fees •  Cost coverage/

small retainer •  Own investment1

1 Limited investment by allocate if requested

Project development/ Investments

Transactions/ (M&A) deals

Management Consulting

Executive Search/ HR Consulting


Holistic approach for business development

Successful Investors and Startups have to consider all resources and functions – focus on technology alone is not sufficient

allocate can act as a driving force for formation of new companies and reinvention of existing companies

Capacities

Capital

HR

Materials/ Energy

Resources

Com

preh

ensi

ve

stra

tegi

c ap

proa

ch

Start

Objectives

Strategy „Where and how to compete?“

Processes „How to operate?“

Structure „How to manage?“

Benefit

Business units

Business model

Steering/ systems Organization

Vision

Operational processes

Support processes

•  Development of strategic targets •  Definition of corporate objectives •  Timeline and milestones

•  Objectives by org. unit •  Measures for key accounts •  Cost & market opportunities •  Efficiency targets

•  Key processes •  KPIs

•  Leadership •  Communication •  Incentives


The Smart & Sustainable approach

allocate’s focus on megatrends supports the identification of smart & sustainable future business models and promising new ventures

1 Bit, Atoms, Neurons, Genes Source: DSW,OECD, Monitor, WWF, allocate research

Future solution have to be…

„Green“ = sustainable

Megatrends

Urbanisation/ Demography/

Developing countries

BANG1 Technologies

Social and Value Changes

Energy/ Climate Change

•  Monetization of women´s work

•  Different ways of social interaction

•  Anytime Anywhere Communication

•  Human Enhancement

•  Increased pressure on productivity

•  Western values loose influence

•  Entities outside governmental structures rise in importance and impact

•  Efficient energy use, phase-out of carbon based sources

„Smart“ = profitable

Implication on strategy and resource allocation – more „smart & sustainable“ type of innovations required –


Example: Positioning of electronic equipment manufacturers XXX relative to competitors (simplified)

The innovation radar gives early signals to develop the business model of companies towards more competitiveness

Key trends (innovation radar) Positioning

Markets

Technology

BU 4

C 2

Electronic Measurement

Life Science

C 3

C 4 C 4

Degree of specialization

General Purpose

Solutions

Radio

C 7 C 7 C 8 C 8

Comp. 1 (C 1)

Chemical Analysis …

BU 2 BU 1

Dedicated products

Services

Chromography

Spectroscopy ….

BU 3 wireless

XXX

XXX

XXX

XXX

Combination of know how (market and technology) to position along the dimensions specialization, market coverage and control of technology


•  Basic principles of successful business models

•  Development customer base ( Efficiency vs. “conventional”)

•  Dynamics linked markets e.g. Heating/cooling equipment, smartphones, app provider,…

•  Mobile applications

•  Segmentation strategies to accelerate penetration of target markets

•  Role of distributors

•  Role of retail, wholesale

•  etc.

Technology Lab Market Lab Society Lab

•  Trends to facilitate adaptation of efficiency solutions

•  Price readiness depending on personal values e.g.. CO2 reduction

•  Willingness to generate power in-house

•  Implementation barriers like computer skills, smartphone usage

•  Demographic effects on purchase power of key market segments

•  Regulation /subsidies

•  …

•  IT driven: all-in-one solutions, anytime-anywhere solutions, operating systems, communication standards, equipment, proprietary vs. open solutions, Steering/ Integration

•  Heat driven e.g.. fuel cells, heating pumps , sterling motors

•  Power driven e.g. Demand Response, renewables

•  Traffic driven: e-mobility, hydrogen, infrastructure…

•  etc.

Transfer of successful approaches of highly innovative industries and countries to SEE industries and companies

How to find the “nuggets”: „Labs“ help to link the product development of companies with important market trends Technology, Market- und Society Trends – in principle-


Success factor incubator

allocate provides access to SEE Incubators and Startups: platforms and professional support are critical to the success of new ventures

Creating the best possible environment for VC investments in SEE and for Startups focusing on business opportunities in SEE

•  Project ideas / small ventures need a “incubator” before they can face the strict KPI’s of the organization

•  Ideas receive resources only by having a a clear and dedicated charter, by being well anchored in the organization and by going through a strict auditing and monitoring process

•  The incubator protection is available for a limited time only

Comments Activities and roles in corporate new business development

PROMOTE

SPONSOR

DEVELOP

ADVISE MANAGE


Example EU CORDIS programme

allocate can also support to exploit additional funds from EU programmes to stimulate innovation and technology transfer to SEE


Case example Prista Oil Group

Success example from SEE: Established as a Startup active in many SEE countries we support Prista Oil Group now in the Supervisory Board

Key features: •  Full range lubes, greases, waxes •  Turnover > € 150 mn •  Market share 5-55% (23 countr) •  Ca. 550 employees •  Blending & storage assets •  Distributor for Chevron/ Texaco,

Ergon and Gulf Marine in SEE

Mile stones: •  1993: Blending plant in Ruse •  2004: Assets in TR and UKR •  2007: Acquisition of Verlia (BG) •  2009: Acquisition Bogdany (HUN) •  2010: 50,1% acquis. UZ Texaco •  2012: EBRD/ ADM acquire 30% •  2014: Acquis. Chevron RO/ CZ

Key features: •  Wholesale trading of base oils •  Turnover > € 350 mn •  250.000 tons lubricant trades •  Tank storage assets

Key features: •  Different batteries & LEDs •  Turnover > € 120 mn •  Market share 5-67% (25 countr) •  Ca. 470 employees •  Recycling & production assets

Mile stones: •  1999: complete modernization

incl. battery recycling •  2006: partial IPO – 24% free float •  2007: acquisition of another

battery company •  2010: Establishment of Octa

Light LED production

Prista Oil Group B.V.


International network

allocate – our strong international network is key to develop investment opportunities in SEE ,TR and beyond

Market access and delivery capability

Middle East Europa

Bahrain

Iran

Saudi- Arabia

Oman

Iraq Lebanon

Yemen

Kuwait Jordan

Qatar

Syria

United Arab Emirates

Oslo

Stockholm

Helsinki

Dublin

London

Amsterdam Brussels Warsaw

Athena

Kiev

Minsk

Budapest

Moscow

Prague

Reykjavik


Key partner in SEE

A key partner for us is also Euroconsultants S.A. – with Greek roots but footholds in many other SEE countries

Long track record of joint business activities in GR and SEE

Jörg Fabri will be member of

Euroconsultants S.A. Executive

Board


Personal contacts to key decision makers are key to success in Turkey

Conbridge, our key partner for Turkey: one of the most influential industrial networks with allocate represented in their board

EXECUTIVE BOARD •  Cefi F. Kamhi, Chairman of the Executive Board •  Mario Diel, President & CEO •  Gazi Ercel, Chairman of the Advisory Board •  Timur George Asaniya, Co Chairman of the Advisory Board •  Halim Neyzi, Vice President •  Cerim Celikbas, Board Member •  Talmar Almagor, Board Member •  Dr. Jörg Fabri, Board Member •  Rainer Schorr, Board Member •  Tülay Diel, Board Member

Partner in Turkey


Intensity of Venture Capital activities

In Romania we closely cooperate with Quest Advisors – and arrange high calibre innovation events with key decision makers

Recognized track record with key companies in Romania – thought leadership approach


Key data of CV

Mihail Stoyanov – our partner for special items in Bulgaria, Romania & Central Asia (Uzbekisthan) – now located in Berlin and present at Eco 14

12 years professional experience “Uz Ecoprotect”LLC – Tashkent, Uzbekistan – General Manager; “Prista Oil Holding” EAD – Sofia, Bulgaria – Transformer Oils Manager for Central and Eastern Europe; “Prista Oil Romania” S.A. – Bucharest, Romania – General Manager; “Prista Oil Romania”S.A. – Bucharest, Romania – Retail Manager; “Balkan Prodexim”SRL – Constanta, Romania – Manager; Associated partner of allocate International

Strategy, Design and building of new organizations, Organisational optimisation, Operations Management

Diploma in International Economic Relations, ASE Bucharest

Master Degree in Organizational Development, SU Sofia Mihail

Stoyanov

Sector focus

Functional focus

Professional experience

Project references

Education

Energy, Chemicals, Trade, Environmental Services, Infrastructure,…

A key professional to bring Western European and SEE affairs successfully together


Contact data

OOO allocate International (Russia) Zemlyanol Val, 9., Business Center Moscow, Russia Fon: +49.211.137 233 21 Fax: +49.211.137 220 87 Mobile: +7 916 444 44 45 E-mail: [email protected] www.allocate.de

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