the israel business conference, december 20 10
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PO LAND of Opportunities Polish P rivati s ation Programme. The Israel Business Conference, December 20 10. Poland in a snapshot. Location: Central Europe Capital: Warsaw Population: 38.1 million Currency: złoty (PLN) Member of the European Union since 2004 - PowerPoint PPT PresentationTRANSCRIPT
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The Israel Business Conference, December 2010
POLAND of Opportunities
Polish Privatisation Programme
POLAND of Opportunities
Polish Privatisation Programme
Location: Central EuropeCapital: WarsawPopulation: 38.1 millionCurrency: złoty (PLN)Member of the European Union
since 2004
Size: 8th largest economy in the EU, 21st largest economy globally(c,d)
GDP growth (Q3 of 2010): 4.2 % (a)
Unemployment rate (Q3 of 2010): 11.5 % (a)
Inflation rate (Q3 of 2010): 2.2 (a) FDI inflow (Jan.-Sept. 2010): EUR
5.3 bn (b) 2
Poland in a snapshot
Source: (a) Polish Central Statistical Office(b) National Bank of Poland
(c) Eurostat(b) IMF
GDP growth in Q3 2010 in selected EU countries (a) (c)
September 2009 3
During the crisis year 2009 Poland was the only country in EU to
avoid recession
Poland – attractive direction for investors
In the City of London Corporation “2010 World Financial Centers” ranking, in the category ‘regional financial centre’ Warsaw ranked higher than cities such as Moscow, Budapest and Athens.
WSE ranks 1st in the CEE region in terms of the number of listed foreign issuers (28).
Warsaw is the sole city in the region which was listed in the TOP 20 most favourable locations for investors (U.N. World Investment Prospectus Survey 2010.12); it also ranked 2nd in the 2009 European Cities Monitor (Cushman&Wakefield) ranking.
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Media about Polish Privatisation (1)
• ‘The country has become the EU’s largest building site, thanks in large part to the €67 bn in structural funds flowing into Poland during the 2007-2013 budget cyckle. The signs of activity are visible everywhere, from the south-easten border with Ukraine, site of the future A4 highway linking the region to Germany, to the outskirts of Warsaw, where a new bridge is being thrown across the Vistula River’
Financial Times, Buoyant future hangs in the balance, November 2010
• ‘Last year, Poland’s decision to cut its income – tax rate, and the resultant economic stimulus, helped it become the only European Union country to dodge recession. But it also sowed the seeds of a ballonooning deficit.’
The Wall Street Journal, Poland’s Treasury seeks to Rebrand Warsaw,
October 2010
September 2009 5
• ‘Die Aktienverkäufe in Warschau und die weiter steigende Kurse waren nur möglich , weil in Polen ein Aktienfieber unter den Privatanleger augebrochen ist und gleichzeitig internationale Anleger das Land entdeckt haben. Dies geschah, nachdem Polen im Jahr 2009 ein einziges Land in Europa ein nennenswertes Wirtschaftswachstum von 1,7 Prozent aufweisen konnte. Analysten erwarten auch für das kommende Jahr eine Fortsetzung mit Wachstumsraten von möglicherweise mehr als 4 Prozent’’
Frankfurter Allgemeine Zeitung ,Polen sieht sich als
China Europas, November 2010
• ‘Poland has been one of the bright spot in European ECM in 2010, with the country seemingly able to withstand to volatile secondary markets that have let to many deals being cancelled across the rest of EMEA’
International Financing Review, Poland pays up,
November 2010
Media about Polish Privatisation (2)
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Upcoming events in Poland – the chance of success
► Accelerates spending and investment decisions
► Huge spending plans until 2012:9 (expressways, highways,trains)for roads EUR 30 bn(b) for rail EUR 7.5 bn(c)
► Increased currency stability
► Balanced guarantee-based package worth EUR 22.7 bn
► EUR 67 bn(a) up to 2013
Source: a) National Cohesion Strategy, p. 116b) Ministry of Infrastructure – the Programme for National Roads Construction 2008-2012c) Ministry of Infrastructure – Master Plan for the Polish Rail Transport until 2030 – Scenario 3 (optimistic)
PLN/EUR: PLN 4.02 as of 2nd December, 2010
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Privatisation Plan for the years 2008-2011 Unique investment opportunities
Privatisation Plan – key facts
The Privatisation Plan for 2008-2011 fulfills Prime Minister Donald Tusk’s November 2007 inaugural commitment to increase the pace of privatisation
Prepared by Minister of Treasury Aleksander Grad, the 4-year privatisation acceleration program was adopted by the Council of Ministers on April 22, 2008
One of the most ambitious privatisation plans in the world:
offers flexible, various privatisation procedures adapted to specific company characteristics
envisages privatisation of 802 state companies from over 30 business sectors and producing revenues of PLN 37 bn (USD 13.1 bn*). At the moment revenues have reached PLN 33.5 bn
(USD 11.7 bn*)
PLN/USD : average yearly exchange rate for 2008: PLN 2.41 and for 2009: PLN 3.12. For 2010 exchange rate set at PLN 2.97* Calculation based on average exchange rate for 2008,2009 & 2010
What:
When:
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Privatisation Plan – key facts
bn (USD 13.1 bn*). At the moment revenues have reached PLN 33.5 bn (USD 11.7 bn*)
Privatisation in figures (2010 YTD): 398 projects are being carried out 361 projects have been completed so far privatisation revenues in 2010 PLN 26 bn (USD 8.75 bn)
PLN/USD : average yearly exchange rate for 2008: PLN 2.41 and for 2009: PLN 3.12. For 2010 exchange rate set at PLN 2.97* Calculation based on average exchange rate for 2008,2009 & 2010
Status:
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Significant decrease of government presence in the economy (The government‘s aim is to reach the level of 10% of public sector contribution to
Polish economy) Result:
1989 2000 2008
19.8%25.8%
> 75%
Public sector contribution to Polish GDP (a)
1010
Privatisation plan - sector opportunities
Privatisation is being implemented in accordance with the government’s plans and strategies for each sector
Investment opportunities extend to a variety of companies:
selected for privatisation from over 30 sectors
located throughout the country
with different shareholding structures
Wide variety of companies
Power/Energy Chemicals
Machines
Transport Sea Transport/Ports
FoodsAnimal and Plant
Husbandry
Furniture Mining - Coal
Commerce Telecommunications
ShipbuildingElectronics Electrical
Engineering
Freight and Forwarding
Rock Based Raw Materials
Construction and Materials
DistilleriesAgriculture Agricultural
Products
Timber and PaperClothing and
Clothing MaterialsPrinting and Publishing
Health Resorts Tourism Pharmaceuticals
Service Companies Enterprise Agencies Others
Financial Mining -Lignite
Metallurgy Defense
Petroleum
Metals
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Privatisation revenues
Privatisation revenues are allocated to
1991-1996 1997-2006 2007-to date
*According to Commercialisation and Privatisation Act PLN/USD: PLN 3.07 as of 2nd December, 2010
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Privatisation model - Trade sale
Trade sale – overview
Addressed to trade investors as well as financial investors
the bulk of privatisation projects concern the following industries transport (53), machines (34), construction (24), food-procesing (24) and chemicals (10)
most companies are intended for privatisation in the central part of Poland (15), and in the Silesia region (9)
since November 2007, most privatisation projects have been implemented through negotiations (29 projects), public auction (24), public tender (22)
public auction is the fastest privatisation procedure
13 PLN/USD: PLN 3.07 as of 2 nd December, 2010
Publicly announced offer
Public tender
Negotiations undertaken on the basis of a public
invitation
Admission of the bid submitted by an entity
announcing the call
Publicly announced auction
Trade sale: privatisation procedures
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Trade investors taking part in Privatisation Plan
Between April 2008 and October 2010 investors from
13 countries acquired shares in 30 companies for
the total amount of over PLN 2 billion
ESP 1 transaction worth USD 0.52 million
GER 6 transactions totalling USD 13.8 million
FRA 2 transactions totallingUSD 56.5 milion
GBR 2 transactions totalling USD 14.9 million
AUT 3 transactions worth USD 31.7 million
CYP 2 transactions totallingUSD 2.9 million
FIN 1 transaction worthUSD 0.02 million
NED 4 transactions totalling USD 146.7 million
LUX 3 transactions totalling USD 1.0 million
SWE 4 transactionstotalling USD 0.42 billion
HUN 1 transaction totalling (USD 28.4 million)
USA: 3 transactions totalling USD 0.06 million)
CAN:: 1 transaction worth USD 6.5 million
Source: a) Ministry of Treasury, transactions completed between 22 April 2008 and 31 August 2010 (excluding transactions concluded in the capital markets)
PLN/USD: PLN 3.07 as of 2 nd December, 2010
ISR: 6 transactions worth (USD 25.7 million)
Pharmaceutics
Examples of trade sale transactions (1)
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PGE Zespół Elektrociepłowni Bydgoszcz (power plant)Transaction worth: PLN 959 013, 36 (USD 312 382.08)*PGE Elektrociepłownia Gorzów (power plant)Transaction worth: PLN 10 585 157, 37 (USD 3 447 933.99)*
Energy
Sold to a main shareholder PGE S.A.
PLN/USD: PLN 3.07 as of 2nd December, 2010
Polfa PabianiceSold to Zakład Farmaceutyczny Adamed Pharma (Polish pharmaceutical company)
Real Estate
Future opportunities in sectors:Health
Resorts
ChemicalsMachines
Road transport
Examples of trade sale transations (2)
September 2009 16
Road transport
PKS- passenger transportation companies6 transactions totalling: PLN 77 million (USD 25 million)*Sold to Israeli trade investor- Mobilis (subsidiary of Egged)
Egged, the leading public transport operator in Israel, established in January 1933, when four public transport companies were merged into on. Egged provides about 55% of public transport services throughout the country.
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Privatisation model – Capital market
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PLN/USD: PLN 3.07 as of 2nd December, 2010
Date CompanyDeal type
SectorSize USD m
Apr 2010
PZU IPO Insurance 2,628
Nov 2004
PKO BP IPO Banking 2,476
Oct 2009
PGE IPO Energy 1,944
Jun 2010
Tauron IPO Energy 1,372
Nov 2010
PZU ABB Insurance 1,336
Oct 2010
PGE ABB Energy 1,297
Sep 2005
PGNiG IPO Oil & Gas 874
Nov 1999
PKN Orlen IPO Oil & Gas 801
Largest privatisations in Poland conducted through WSE(a)
* since November 2007 till December 2010
Transactions on capital markets – overview
Rights issue
Note: Blue colour shading indicates privatisation processes concluded over the last two years.
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IPO of the leading thermal
coal miner ($166m).
Reopening of IPO market in
Europe
IPO of a leading energy
group ($830m), despite
challenging market
conditions
IPO of the largest Polish energy group
( $2.1bn). Ranked as the largest IPO in
Europe for 2009.
Rights issue of PKO BP, the
largest Polish bank by assets
($1.6bn).Opening of rights issue market for financial
institutions in Poland
Nov-08 Jun-09 Nov-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Aug-10 Oct-10 Nov-10
ABB of the leading
global copper producer:
10% of MoT shares
($723m)
Offered to US investors
Completion of
privatisation through sale of 46.7%
shares through ABB
($395m)
Sale of 10% of shares of
leading oil&gas
company through ABB
on WSE ($142m)
ABB of a 42% stake sold by the MoT and
state bank BGK
($119m)
IPO of Poland’s leading insurance
company ($2.7bn ). The largest IPO in Europe since
2007. Largest ever IPO in CEE
region
Second stage of privatisation.
Sale of 16.05% MoT shares on
the WSE through Fully Marketed Offer ($379m )
A 51.6% stake of the second largest utility company in Poland was
floated on the WSE on
30 June ($1.3 bn)
The remaining stake in TP S.A.,
a telecommunicati
ons company was sold on the
WSE on 5 August 2010
($292m*)
*PLN/USD: PLN 2.83 as of 19 October, 2010
Sale of 10% of shares (almost $1.4 bn). The biggest ABB
transaction in the history of
capital markets in Poland
IPO of the Warsaw Stock
Exchange – leading
European stock exchange. First
listing- Nov. 9th. ($424 million)
Key transactions on capital markets
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Privatisation - future opportunities on capital market
PZU – insurance Poland's largest insurance group; leading company
providing life and non-life insurance. The Company
was floated on the Warsaw Stock Exchange in May
2010. It was the 2nd largest IPO in Europe in 2010 YTD
PKO BP Bank the leader of the Polish banking
sector. In addition to its core banking activity
PKO BP offers specialised services, i.a. various financial
products, leasing funds, investment
fund units, electronic payment services – it was listed on the
WSE in 2004
BGZ Bank one of the leading banks on the Polish market, providing
services for the agriculture/farming and food processing sector, as well as for inhabitants of rural areas and small towns. IPO of the
company is planned for 2011-2012
DIPSERVICE, TON AGRO – real estate
lease of properties from companies’ portfolio, lease of
office space in the Warsaw area; The companies also acquire
properties and prepare them for commercial investment
purposes.. It is expected that the new real estate holding,
comprising i.a. these companies will make a debut on the WSE in
2011
LOTOS- petroleum concern
activity in the field of crude oil extraction and
processing as well as distribution and sale of
wide range of petroleum products.
The deadline for submitting written
replies expires on 4 February 2011
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Warsaw as a regional Financial Center of Central – Eastern Europe
Warsaw
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Warsaw - Regional Financial Centre
(a) Based on FT Global 500(b) 2009 European Cities Monitor report by Cushman & Wakefield (c) OECD Factbook 2009(d) National Bank of Poland(e) Ministry of Economy & PAIiIZ forecasts
Warsaw is Poland’s business capital and one of the largest and most important urban centers in Central and Eastern Europe
As stated in 2010 World Financial Centers ranking prepared by City of London Corporation, Warsaw has surpassed cities like Moscow, Budapest and Athens as a regional financial centre
Moscow 35
Warsaw 36
Paris 27
London 25
Bucharest 30
Viewed as regional safe haven Poland maintained high level of FDI inflow, which in 2009 amounted to EUR 8.4bn(d), the highest in CEE. In H2 2010, the inflow of FDIs exceeded EUR 5.3bn(d). It is forecasted that the FDI inflow in the whole of 2010 will exceed EUR 10bn(e).
Number of new companies to establish their presence in the cities within the next five years (b)
Foreign direct investment (FDI) for the period of 1998-2007 (in USD billion*) (c)
PLN/USD: PLN 3.07 as of 2 nd December, 2010
Owing among others to the privatisation activities of the Ministry of Treasury, the Warsaw Stock Exchange is doing well, and therefore the largest global financial institutions cannot afford not to have a local office in Warsaw. J.P. Morgan, HSBC, BNP Paribas, Credit Suisse, UBS, Deutsche Bank, Master Card, Citigroup, Nomura, ING, Merrill Lynch, Goldman Sachs, and Morgan Stanley.
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Foreign companies & foreign investors at Warsaw Stock Exchange
( a) Investors in stock exchange turnover H1 2010 - presentation
Warsaw Stock Exchange lists many companies from the CEE region, such as: Kernel (Ukraine's largest vertically integrated agro-industrial company) New World Resources (producer of coal, the largest hard coal mining
company in the Czech Republic) Astarta Holding (an agro-industrial holding and one of the leaders of the
Ukrainian sugar sector) CEZ (leader on the Central and Southeastern European electricity market) Asseco Slovakia (co-founder of international Asseco Group, the fifth
largest IT Group in Europe)
31 3043 36 47
34 3739
3733
35 3318 27 20
2006 2007 2008 2009 H1 2010
Foreign Institutional Individual
Fore
ign
com
pan
ies
Fore
ign
investo
rs
Break-down of equity turnover at WSE (in %)(a)
Currently WSE has 28 domestic & 20 foreign Exchange Members including Credit Suisse, Goldman Sachs, HSBC Bank, J.P Morgan, Merrill Lynch, Societe Generale, UBS, Citigroup, Deutsche Bank(a)
Poland becomes increasingly important for the foreign financial institutions as evidenced, among others, by the following initiatives:
In May 2010 Credit Suisse re-opened its brokerage office in Warsaw
Goldman Sachs plans to open its office in Warsaw in the second half of 2010 following the motion approval by FSA (Financial Services Authority)
Citigroup opened an investment banking office in May 2010
In May 2010 UBS announced plans to strengthen its presence in Poland by expanding investment banking operations
Morgan Stanley announced plans to open an office in Warsaw by the end of 2010 once regulatory approvals are secured. On 12 August 2010 Morgan Stanley became the latest member of the WSE
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WSE is attractive for the world’s top tier international financial institutions
(a) WSE internet portal, 28 September 2010
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Global investment banks present in Warsaw:
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Investor Relations & Contact information
Ministry of Treasury of the Republic of PolandTel. (+48 22) 695 90 01Tel. (+48 22) 695 90 02Fax (+48 22) 629 98 38
E-mail: [email protected]
This presentation contains only introductory information which does not constitute any invitation or offer to sell, invest
or trade, nor does it constitute any invitation to place any offer to purchase, invest or trade the securities. The information presented herein is up to date as on 8December 2010.
This presentation can be distributed only as a complete document. The Ministry of Treasury of the Republic of Poland does not recommend services of any organisation using this document as part of their informational
and advertising activities.
Investor Relationswebsite
Investor Relations Centre
www.msp.gov.pl/en