manufacturing and services · 17/07/2019 · manufacturing and services team overview m&s...
TRANSCRIPT
Manufacturing and Services July 2019
OFFICIAL USE
• Introduction to EBRD
• Working with EBRD in the corporate sector :
Manufacturing and Services (M&S)
• M&S recent projects
Table of Contents
OFFICIAL USE
Introduction to EBRD
Content
OFFICIAL USE
Where we invest
EBRD’s increasing footprint
OFFICIAL USE
5
EBRD
Institutional overview
EU 28
Countries*
63%
EBRD
region
excluding
EU
8%
Others
11%
USA
10%
Japan
9%
* Includes European Union (EU) and European Investment Bank
(EIB) each at 3%. Among other EU countries: France, Germany,
Italy, and the UK each holds 8.6%
An international financial institution supporting the development of sustainable well-functioning market economies
Established
1991 Owned by
68 countries from five continents, as well as the European Union and the
European Investment Bank. These shareholders have each
made a capital contribution, which forms our core funding.
Capital base
€30 billion
Maintains
Triple-A rating from all three main rating agencies
(S&P, Moody’s and Fitch)
OFFICIAL USE
EBRD institutional outline EBRD shareholding structure
1 Egypt 1,148
2 Turkey 1,001
3 Greece 846
4 Poland 556
5 Ukraine 543
6 Kazakhstan 472
7 Romania 443
8 Uzbekistan 397
9 Serbia 396
10 Belarus 360
Infra
29%
Corporate
25%
Energy
24%
FI
22%
Infrastructure 29%
(Transport, Municipal Infrastructure)
Corporate 25%
(Agribusiness, M&S, P&T, ICT)
Energy 24%
(Power & Energy, Natural Resources)
Financial Institutions 22%
(Banks, Leasing, Insurance, Other)
6
Since 1991, EBRD invested over €130 billion
in 5,325 projects as at yearend 2018
EBRD
Banking overview
EBRD top 10 investee
countries in 2018 (€ million)
Sector
2018 Highlight
€9.5 billion
395 projects
73% of projects in private sector
Debt: 83%
Equity: 9%
Guarantee: 8%
SEE
19%
EEC
18%
Turkey
16%
SEMED
15%
CEB
14%
CA
10%
Russia
5%
Cyprus &
Greece
4%
South-Eastern Europe 19%
Eastern Europe & Caucasus 18%
Turkey 16%
S.E. Mediterranean 15%
Central Europe & Baltics 14%
Central Asia 10%
Russia 5%
Cyprus & Greece 4%
Region
EBRD portfolio as at yearend 2018: €43.3 billion
7.5 7.7 8.2 8.5 7.9
0.9 1.3 0.7 0.4 0.8 0.5
0.4 0.4 0.7 0.8
95 103
112 121
131
-
20
40
60
80
100
120
140
-
2
4
6
8
10
12
14
2014 2015 2016 2017 2018
Ne
t cu
mu
lati
ve
bu
sin
ess
inve
stm
en
t (€
billio
n)
An
nu
al b
usin
ess in
ve
stm
en
t
(€ b
illio
n)
Debt Equity Guarantee NCBI
OFFICIAL USE
7
EBRD
Green Economic Transition (GET)
EBRD GET approach aims to increase the financing of projects that advance
the transition to an environmentally sustainable and low-carbon economy
GET-qualifying principles and criteria
Principle Criteria
Granularity
Only clearly defined environmental
project activities or components that
can be disaggregated from non-
environmental activities, as far as
reasonably possible, qualify for GET.
Environmental
benefits
Measurable net total environmental
benefits against a baseline
Minimum
environmental
performance
and standards
Application of sector-specific best
available techniques in EU
environmental performance and social
standards
Multiple
environmental
benefits
No double counting of financing across
multiple environmental benefits
1.5 1.5
2.0 1.9 1.9
2.9
2.1
0.4 0.5
0.5 0.5 0.5
0.6
0.6
0.4 0.4
0.5 0.4
0.6
0.5
0.6
7,621
7,339
7,666 7,465
5,021
6,308
7,120
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2012 2013 2014 2015 2016 2017 2018
CO
2 e
mis
sio
ns r
ed
ucti
on
(k
t / y
ea
r)
An
nu
al G
ET in
vestm
en
t (€
billio
n)
Sustainable Infrastructure* Financial Instituions
Corporate CO2 emissions reduction
Annual GET investment with CO2 emissions reduction
* Infrastructure & Energy
OFFICIAL USE
8
EBRD
Financing structure tailored per project
Project risk
EBRD is willing to share political and commercial risk under different financing structures
Financing instrument
EBRD invests in a broad range of instruments across the capital structure
Credit
Type Senior secured/unsecured loan;
Subordinated note;
Mezzanine
Size €1 million – €300 million
Tenor < 1 year (short term);
5 – 10 years (long term)
Interest Floating rate;
Fixed rate
Currency USD, EUR, or local currency* of CoOs
* Subject to market conditions and availability
Equity
Type Common or preferred stock
Size Non-controlling interests (up to 35%)
Criteria
Compliant with EBRD’s transition impact,
additionality and sound banking principle
Sound business model with promising
growth/export potential driven by private
consumption
Strong competitive advantage
Sustainable cash flow generation profile
OFFICIAL USE
9
EBRD
Financing structure tailored per project (cont.)
Project cycle
A project from exploration to approval typically takes 3 to 6 months, provided all necessary
information is available and depending on the complexity and length of negotiations
Project volume
Financing can vary in size from less than €1 million to more than €300 million
Project tenor
Project cycles from approval/signing to final redemption can range from 1 year, for working
capital or trade financing projects, to 10 years for long term investments
< 1 year
i.e. Letter of credit
1 – 5 years
i.e. Letter of credit, Senior secured loan, Equity
5 – 10 years
i.e. Senior unsecured loan, Subordinated note, Mezzanine, Equity
OFFICIAL USE
Working with EBRD in the corporate sector :
Manufacturing and Services (M&S)
Content
OFFICIAL USE
Manufacturing and Services
Team overview
M&S outline
EBRD M&S is the single largest investor in the pertinent sectors across Central and Eastern
Europe and the Commonwealth of Independent States
11
M&S sub-sector
Automotive Building materials
Chemicals Forestry & paper
FMCG & retail Healthcare &
pharmaceuticals
Steel & non-
ferrous industrial
metals
Miscellaneous
11
Turkey
25%
EEC
21% Central Europe
19%
SEMED
13%
SEE
11%
Russia
6%
CA
5%
Cyprus &
Greece
2%
Turkey 25%
E. Europe & Caucasus 21%
Central Europe 19%
S.E. Mediterranean 13%
S.E. Europe 11%
Russia 6%
Central Asia 5%
Cyprus & Greece 2%
Steel &
metals
26%
Chemicals
20% Forestry
13%
Automotive
13%
FMCG &
retail
9%
Healthcare
9%
Misc.
7%
Building
Materials
3%
Steel & non-ferrous industrial metals 26%
Chemicals 20%
Forestry & paper 13%
Automotive 13%
FMCG & retail 9%
Healthcare & pharmaceuticals 9%
Miscellaneous 7%
Building materials 3%
M&S portfolio as at 7 July 2019: €3.7 billion
Region Sector
718 717 721 765 772
172
62
51
3 15
6 17 6
9,602 10,386
11,159 11,943
12,736
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
-
200
400
600
800
1,000
1,200
1,400
2014 2015 2016 2017 2018
Ne
t cu
mu
lati
ve
bu
sin
ess
inve
stm
en
t (€
millio
n)
An
nu
al b
usin
ess
inve
stm
en
t (€
millio
n)
Debt Equity Guarantee NCBI
€ invested
in 2018
€ invested
in 2019
Active
portfolio
€793 million
as at yearend 2018
(signed 63 projects)
€467 million
as at 7 July 2019
(signed 29 projects)
€3,701 million
as at 7 July 2019
(265 projects)
OFFICIAL USE
12
Manufacturing and Services
Green Economic Transition (GET)
M&S aims to increase the GET share of M&S annual business investment
up to 30% by yearend 2020
242 208
227
178
320
166 167
14
4
2
2
10
35
27.6% 25.4%
23.1% 23.4%
44.1%
24.8% 26.1%
-
10%
20%
30%
40%
50%
-
50
100
150
200
250
300
350
400
450
500
2012 2013 2014 2015 2016 2017 2018
GE
T s
ha
re o
f M
&S
an
nu
al b
usin
ess in
ve
stm
en
t
M&
S a
nn
ua
l G
ET in
ve
stm
en
t (€
millio
n)
Mitigation Finance Adaptation Finance
Environment Finance GET share of M&S ABI
M&S annual GET investment
50
209
14
15
22.60%
48.40%
-
10%
20%
30%
40%
50%
-
50
100
150
200
250
1H 2018 1H 2019
GE
T s
ha
re o
f M
&S
an
nu
al b
usin
ess in
ve
stm
en
t
M&
S 1
H G
ET in
ve
stm
en
t (€
millio
n)
Mitigation Finance Environment Finance
GET share of M&S ABI
M&S first half-year GET investment
OFFICIAL USE
13
Manufacturing and Services
Clients
EBRD M&S clients include small and medium-sized enterprises and also
some of the world’s industry leaders in the covered sectors
OFFICIAL USE
M&S recent projects
Content
OFFICIAL USE
15
Kronospan
Ukraine
17 July, 2019
Project outline
Company
Geography
Sector
Kronospan
Ukraine
Wood processing
Signing date
Instrument
Amount
June 2019
Senior secured
€116 million
Kronospan group is a long-time, repeat client of EBRD in Central and Eastern Europe - the Bank has advanced c. EUR 600 million
in financing to the Group in 13 investments worth €1.5 billion in six countries. Currently Kronospan UA produces particleboard,
melamine faced particleboard and worktops. Proceeds of the Loan will be used to finance the construction of a new oriented
strand board production facility at the Borrower’s plant in western Ukraine (€75 million) and to refinance the existing EBRD loan
(€41 million), which will provide liquidity to the Borrower during the implementation of the new investments.
The Project entails significant equity FDI, while the wood-processing sector in Ukraine has witnessed only marginal FDI inflows in
recent years. Also the Project will have energy-efficiency impact including installation of a 45 MW biomass boiler, wet electrostatic
precipitator filter and replacement of an old transformer substation with a new one.
Project highlight
OFFICIAL USE
16
Pelion Pharma
Poland, Lithuania
17 July, 2019
Project outline
Company
Geography
Sector
Pelion Pharma
Poland, Lithuania
Pharmaceutical
Signing date
Instrument
Amount
May 2019
Senior unsecured
€47 million
The Project involves Korporacja Inwestycyjna Polskiej Farmacji sp. z o.o. (KIPF) to complete the operational restructuring, expand
and strengthen its international footprint (Poland and Lithuania), the holding company for Pelion, which has successfully operated
on both the wholesale and retail pharma markets in Poland since 1990. In 2018, Pelion generated revenues in excess of €2
billion, with total assets of €0.8 billion.
The EBRD loan will fund a comprehensive investment programme focused on the introduction of new types of pharma products
and solutions as well as operational restructuring and market expansion in order to improve performance of the largest
pharmaceutical distributor in Poland - Pelion S.A. - and various energy efficiency improvements.
Project highlight
OFFICIAL USE
17
Khanburgedei
Mongolia
17 July, 2019
Project outline
Company
Geography
Sector
Khanburgedei
Mongolia
Apparel retail
Signing date
Instrument
Amount
May 2019
Senior secured
€3.9 million
Established in 1991, Khanburgedei LLC is an existing client of the Bank since 2013 operating three own stores located in the
centre of Ulaanbaatar in importing and trading locally apparel, footwear and other consumer goods including accessories,
cosmetics etc. Khanburgedei is an existing client of the Bank since 2013 with outstanding EBRD exposure of c. €2 million
including 2 senior secured loans of US$1.9 million and MNT 799 million. In 2015-2017, alongside credit lending, the Bank has
strategically supported Khanburgedei via its International Advisory Programme to enhance their operational structure, human
resources management, supply chain management and marketing strategy.
The proceeds of the transaction will be directed to (i) restructuring of the existing EBRD loan and (ii) long-term loan to support the
Company’s working capital needs.
Project highlight
OFFICIAL USE
18
PSA
Morocco
17 July, 2019
Project outline
Company
Geography
Sector
PSA
Morocco
Automotive
Signing date
Instrument
Amount
April 2019
Schuldschein (promissory note)
€75 million
Peugeot S.A., a limited liability company incorporated in France, a leading European automotive manufacturer and the parent
company of the global automotive group Groupe PSA (“PSA”). The Project supports the Company’s investments in Morocco, in
particular the financing of the R&D and capital expenditure for expansion of Peugeot S.A.’s large car plant in Kenitra.
Proceeds will be used to double production capacity at PSA’s vehicle assembly plant in Kenitra, Morocco, from 100,000 to
200,000 vehicles annually, and finance €20 million in R&D in Morocco. The plant will initially produce the new Peugeot 208 (to be
released this summer), mainly for the export market, and will also produce 200,000 engines per year (the first engine plant in
Morocco).
Project highlight
OFFICIAL USE
19
Tegeta Motors
Georgia
17 July, 2019
Project outline
Company
Geography
Sector
Tegeta Motors
Georgia
Automotive
Signing date
Instrument
Amount
April 2019
Bond
$2.8 million
Tegeta is in automotive industry supplying the full range of automotive products and services to corporate and retail customers.
EBRD maintains a longstanding relationship with Tegeta Motors since 2008 through the Bank’s Risk Sharing Facility (“RSF”) in
five RSF sub-loans with TBC Bank to finance the Company’s development needs, including consolidation of short term loans and
financing of new facilities.
The Bank’s participation in the bond issuance will also support the delivery of accredited training and work-based learning
programmes at Tegeta Academy in Batumi, which will partner with local universities as well as key international suppliers and
train up to 100 young people.
Project highlight
OFFICIAL USE
20
TeraPlast Group
Romania, Serbia, Slovakia
17 July, 2019
Project outline
Company
Geography
Sector
TeraPlast Group
Romania, Serbia, Slovakia
Building material
Signing date
Instrument
Amount
April 2019
Senior secured
€16 million
TeraPlast Group was founded in 1896 in Bistrita as a ceramic tiles manufacturing unit and has since grown to become one of the
largest players in the Romanian building materials industry. It has two main business segments: plastics and steel. Over the last
few years, the group has been expanding its operations outside of Romania and into new markets as part of their plans to boost
exports and continue to consolidate their business.
As part of the financing package, TeraPlast Group will also create a partnership with a local training institution to enhance
vocational training opportunities for young people in the regions. At least 120 young people will be trained and receive a
certification through the project. Moreover, the client is engaged to improve its Corporate Governance by adhering to a
comprehensive action plan which includes improving company’s procedures, internal regulations and transparency.
Project highlight
OFFICIAL USE
21
Rowshen
Turkmenistan
17 July, 2019
Project outline
Company
Geography
Sector
Rowshen
Turkmenistan
Footwear
Signing date
Instrument
Amount
April 2019
Senior secured
$1.1 million
Individual Enterprise Rowshen is a leading leather footwear producer registered and operating in Turkmenistan since 1991 and is
one of the two sizable shoes manufacturers present in the country. Rowshen sees promising potential for their footwear business
down the line, supported expressly by the government’s policy in promoting domestic brand producers against imports.
The proceeds will finance the expansion of its existing shoe manufacturing facilities to increase production capacity from ca.
44,000 pairs of shoes in 2018 to ca. 100,000 pairs in 2022, which involves construction of additional production and
warehousing premises and purchase of the new equipment to facilitate increased capacity. The bank has also provided strategic
support via what’s known as EU Investment Facility for Central Asia in helping the Company implement IFRS and hire an footwear
expert from Italy to enhance its footwear operation.
Project highlight
OFFICIAL USE
22
CPH Chemie + Papier Holding
Bosnia and Herzegovina
17 July, 2019
Project outline
Company
Geography
Sector
CPH Chemie + Papier Holding
Bosnia and Herzegovina
Chemicals
Signing date
Instrument
Amount
October 2018
Bond
€5.7 million
EBRD is supporting CPH Chemie + Papier Holding AG, a Swiss industrial group with EUR 400m sales pa., in its green field
investment into Bosnia and Herzegovina. The recently established subsidiary in Zvornik, BiH, manufactures synthetic zeolites,
which are granules that are used to reduce moisture and odours in polyurethane, pharma manufacturing and other industrial
uses.
The Bank participated in a CHF 100 million 5-year bond with a ticket size of CHF 6.5 million. The Bond was issued in October
2018. The transaction supports FDI inflows into a country that has received limited private sector investments in recent years, as
well as strengthening the Swiss Group’s overall competiveness in the value chain.
Project highlight
OFFICIAL USE
23
Mabion
Poland
17 July, 2019
Project outline
Company
Geography
Sector
Mabion
Poland
Biotechnology
Signing date
Instrument
Amount
August 2018
Common stock
$18 million
Mabion is at pre-commercialisation stage of Mabion CD20 - the humanized monoclonal antibody (mAbs), a new generation of
biotechnological drug that is used in treatment of blood cancer and rheumatoid arthritis (biosimilar to Roche’s Rituxan /
MabThera product) and has a global US$ 8 billion market. Pre-commercialisation literally means the Company has never had
revenues and this is a very new type of investment for the Bank.
The EBRD’s investment is a part of the US$ 50 million private placement which also attracted the Polish Development Fund (PFR)
and selected US investors specialised in the bio-tech industry. The proceeds will be used to finance expansion of the production
facility and commercialisation of Mabion CD20.
Project highlight
OFFICIAL USE
24
VMG Industry
Belarus
17 July, 2019
Project outline
Company
Geography
Sector
VMG Industry
Belarus
Wood processing
Signing date
Instrument
Amount
July 2018
Senior secured
€50 million
VMG Industry is an integrated wood processing complex (particleboard plant, furniture plant and layer-glued product plant)
located in Mogilev, Belarus. The Loan will support the Borrower’s capacity expansion programme at its furniture manufacturing
facilities and will enable VMG Industry to increase its production capacity for the export market, mainly supplying the IKEA retail
network.
VMG Industry is a Belarusian subsidiary of Lithuania’s VMG Group, one of the largest wood processing companies in the Baltic
region and a major furniture supplier to IKEA. Following the project completion, the production volumes of furniture will increase
two-fold from current 5.3 million m2 to 10.6 million m2.
Project highlight
OFFICIAL USE
25
Arcelik
Turkey
17 July, 2019
Project outline
Company
Geography
Sector
Arcelik
Turkey
Consumer electronics
Signing date
Instrument
Amount
July 2018
Senior unsecured
€150 million
Established in 1955, Arcelik is Turkey’s leading household appliance manufacturer engaged in the production and marketing of
durable consumer goods, consumer electronics, small home appliances and kitchen accessories. The Company’s global
operational network consists of 20 production facilities in eight countries and marketing and sales organisations in 33 countries,
with 30,000 employees.
The project is expected to improve the Company’s resource and energy efficiency via (i) introduction of new products with better
energy and resource consumption performance, (ii) modernization of production processes, and (iii) construction of an LEED
certified R&D technology centre. The new and large-scale R&D centre will enable Arcelik to increase its innovation activities in
cooperation with local educational institutions, contributing to the innovation ecosystem in the country.
Project highlight
OFFICIAL USE
26
Sarantis
Greece, Ukraine
17 July, 2019
Project outline
Company
Geography
Sector
Sarantis
Greece, Ukraine
Household care products
Signing date
Instrument
Amount
May 2018
Senior unsecured
€25 million
Sarantis S.A. is a new Greek client for the Bank active in the production and distribution of speciality chemicals (Household Care
products, Personal Care and Cosmetics) in Greece, where it is headquartered, and across Europe where it operates. Sarantis is
listed on Athens Stock Exchange with market capitalisation of over €500 million and is part of FTSE Europe Small Cap Index (and
it is also the first Greek company to be added in the MSCI World Small Cap Index in November 2017).
The EBRD’s loan finances (i)Sarantis’ acquisition of Ergopack LLC, an Ukraine's producer and distributor of Household Care
products and existing EBRD client, (ii) modernisation capex at Ergopack and (iii) working capital at Ergopack.
Project highlight
OFFICIAL USE
EBRD M&S
Contacts
Frédéric Lucenet
Director, Head of M&S
Tel: +44 20 7338 6079
E-mail: [email protected]
Milton Stefani
Regional Head
Egypt, Greece, Jordan,
Lebanon, West Bank and Gaza
Tel: +44 20 7338 8349
E-mail: [email protected]
Florence Bachelard-Bakal
Regional Head
Belarus, Ukraine
Tel: +44 20 7338 7014
E-mail: [email protected]
Almaz Toigonbaev
Regional Head
Russia, Caucasus, Kazakhstan,
Kyrgyzstan, Turkmenistan, Mongolia
Tel: +44 20 7338 7736
E-mail: [email protected]
Hande Islak
Regional Head
Turkey
Tel: +90 21 2386 1118
E-mail: [email protected]
Patryk Borzecki
Regional Head
Central, Eastern and South-
Eastern Europe
Tel: +48 22 520 5803
E-mail: [email protected]
Adil Chikhi
Regional Head
Morocco, Tunisia
Tel: +212 52 264 9163
E-mail: [email protected]
OFFICIAL USE