bucket man
Post on 05-Apr-2018
224 Views
Preview:
TRANSCRIPT
-
8/2/2019 Bucket Man
1/19
BUCKETMAN PROJECT
-
8/2/2019 Bucket Man
2/19
AGENDA
Introduction of business and company
Investment strategy
Pricing, Execution and Risk
-
8/2/2019 Bucket Man
3/19
I. INTRODUCTIONOFBUCKETMAN
Add: Huynh Van Luy, Thu Dau Mot, Binh Duong
Ownership: Foreign investment from 2004
Total employees: 36 at current (of which 3 expats)
Major Customer: IKEA Total factory: 3000-5000m2
Current capacity: 40% (2011)
CEO: Mr. Nicklas Karsson
Industry: Steel processing
-
8/2/2019 Bucket Man
4/19
BUCKETMANBUSINESS
Main Technologies: Tube semi automated bending (X1); Punching (x1), ,
Resistant welding, TIG Welding, Robot welding
Powder Coated
Finished goods: supporting to product lines asstorage, Metal furniture in Carbon steel, combinematerial with textile & wood. Interior furniture
Raw materials: Sheet: Local (Posco)/ Tube: King
Star, Minh Huu Li % of production: Carbon steel tube (50%), sheet
(35%), wire (15%en, 190 Tube
Quality (IKEA): SQA, IWAY (95%)
Distribution: Export (90%) and local
-
8/2/2019 Bucket Man
5/19
-
8/2/2019 Bucket Man
6/19
LEGAL DOCUMENTS
Bucketman has adequate necessary documentssupporting to legal issues such asestablishment/business register, ownership,taxation, real property, fixed assets, employment,
insurance
-
8/2/2019 Bucket Man
7/19
BUCKETMANFINANCIALPOSITION
BALANCE SHEET at 30 Sep 2011Current Asset 9.124.230.448 Liabilities 16.077.364.364
Cash 517.334.795 Trade Payables 9.391.582.814
Trade receivables 4.420.103.285 Due to Nick 6.685.781.550
Inventories 2.420.967.758
Other currentassets
1.765.824.610
Long-term Assets 4.094.432.321 Equity -2.858.701.595
Fixed assets 3.924.555.393 Owned Capital 1.643.827.398
Other long termassets
169.876.928 Acc Loss -4.502.528.993
TOTAL 13.218.662.769 13.218.662.769
-
8/2/2019 Bucket Man
8/19
BUCKETMANFINANCIALPOSITION
Assets Revaluation at 30 Sep 2011
Cash 517 517
Trade receivables 4.420 3.492 (receivable fromcustomer)
Inventories 2.421 2.421
Other currentassets
1.766 VAT input, advances to suppliers, receivables from State, couldnot convert into cash
Fixed assets 3.925 3.527 NBV at 30 Sep 2011
TOTAL 9.957
Unit: Mil VND
Due to we have not obtained the Financial reports of Bucketman at the latest date then theabove analysis is for purpose of general evaluation of financial position of Bucketman.The revaluation is based on the assumption that: Liquidity of these assets is absolute(recoverable ratio = 100%).
-
8/2/2019 Bucket Man
9/19
BUCKETMANFINANCIALPOSITION
Liabilities Revaluation at 30 Sep 2011Trade Payables 9.391 9.391 Of which Short-term loan and Payables to
suppliers and advance from customer:8.931 (95%)
Due to Nick 6.686 6.686 Mr.Nick made this loan to the company forbuying cars and being used as workingcapital in many years.
TOTAL 16.077
Equity Revaluation at 30 Sep 2011
Owned Capital 1.643 1.643
Acc Loss -4.502 (4.502)
TOTAL (2.858)
Unit: Mil VND
-
8/2/2019 Bucket Man
10/19
BUCKETMANFINANCIALPOSITION
The recoverable assets value is not enough to
cover the liabilities
Assets Liabilities
9.957 16.077
=Asset Liabilities (afterrevaluation at 30-Sep-
2011)
(6.120)mVND
The accumulated loss is extremely big whichcauses the equity is negative now -2.858mVND
-
8/2/2019 Bucket Man
11/19
INCOME STATEMENT at 30 Sep 2011
Sale 38.079.782.718
COGS - 31.034.234.287
Gross Profit 7.045.548.431
Financial Income 548.332.221
Selling and G&A
expense
-6.916.528.125
Other income -39.670.391
Earnings before tax 637.682.136
Earnings after tax 637.682.136
Unit: VND
BUCKETMANFINANCIALPOSITION
-
8/2/2019 Bucket Man
12/19
BUCKETMANFINANCIALPOSITION
Turnover total: ~2mil USD (up to Sep 2011)
Most of valued fixed assets of Bucketman are usedunder capacity. The current production only remainsat 4.000 operations/day, which generate 2mil USDas revenue now. (the designed production is 10.000opertaions/day)
~35-40% of raw materials are purchased locally,which partly causes high COGS.
Selling and G&A expense is too high, not relevantto the total no. of employee (36 persons)
The company just makes profit for 2 years so far(2010: ~500mVND and 2011: ~600mVND)
-
8/2/2019 Bucket Man
13/19
SUMMARYOF FINANCIALPOSITION
Bucketman has difficulties with working capital dueto the accumulated loss from 2006-2011 withamount >2bil VND.
Bucketman had to delay payments for somesuppliers in 2011 due to shortage of workingcapital.
Receivables only from major customer is IKEA
Capacity to generate revenue is low meanwhile thefixed cost remains high
The companys operation currently relies much on
the money lent by Mr.Nick.
-
8/2/2019 Bucket Man
14/19
SWOT ANALYSIS- BUCKETMAN
STRENGTH- Well-equipped in-house workshop- Owner: long-term business with IKEA,strong understanding of IKEAstandards, many potential customerfrom Europe.
- Know-how: SQA, IWAY (95%)
WEAKNESS- Limited product range: all made fromsteel only.- Poor administration: only the ownercan understand the technical issues andrun business stably
- Under capable machines operation- Financial difficulties due to unstableoperation and poor revenue
OPPORTUNITY- Possibility to expand production rangeas Bucketman plans to take over a
Bamboo factoryFor GIL:
-Improve production chain, optimizemargin, build up share with IKEA-Expand product range: metal, metal+mixed materials-Start up steel processing business.
THREAT- Owners sickness limits hisparticipation into business
- Pending claim at IKEA may lead todiscontinued business- Labor shortage- Downturn demand of steel industry
-
8/2/2019 Bucket Man
15/19
SWOT (CONT.)
Maxi-Maxiuse S to maximize O
Mini-miniminimize W to avoid T
-Exploit current know-how, well-equipped infrastructure, availablehuman resources to increase
efficiency in GILs traditionalbusiness.- Start up and develop business insteel and steel processing industrywith recognized standards.
-Provide administration and humanresources supports to takecontrolling stake of BKM in order
to increase production capacity,revenue.-Build up a favor supply position inCarbon Steel industry thanks toeconomic down turn
-
8/2/2019 Bucket Man
16/19
II. INVESTMENTSTRATEGY
Rationales
Based on the need and long-term strategy of GIL
Opportunity to take the controlling stake of
Bucketman
-
8/2/2019 Bucket Man
17/19
III. PRICINGANDEXECUTION
Need from GIL Need from Bucketman
In house metal workshop toimprove the upstream cost (as Giland Bucketman both have same
major customer is IKEA)
Expand business on productranges: Metal + Mixed material
A reliable and financial strengthto recover from current financialstatus and to develop business.
A management support for thefactorys operation, then the
Mr.Nick can work at his best andwith his current health status, onproduct R&D and expanding
customer networking.
Build up the trust from IKEA toimprove business.
-
8/2/2019 Bucket Man
18/19
PROPOSAL
Investor will acquire 51% of Bucketmans stakeafter the signed agreement date.
Investor will put a favor credit of 3bil VND with lowinterest at 8% in 3-4 years as working capitalserved for maintain and improve Bucketmanbusiness.
Investor will support resources i.e human,administrative process, financial management for
restructuring Bucketman.
-
8/2/2019 Bucket Man
19/19
IV. BUSINESS PLANFORBUCKETMAN
top related