presentation results of 2011 -...

Presentation:Results of 2011

Warsaw, March 2012

I. General information about PKM Duda.

II. The results of 2011.

III. Implementation of the Duda 2012 Programme.

2

one of the largest companies in the meat sector,

holding company consisting of nearly 30 companies operating mainlywithin:

slaughtering, cutting and distribution of meat (pork, beef, venison)and cured meats,

breeding herd,

cultivation of cereals and other plant products,

production of meat,

national leader in the distribution segment and the slaughter of red

meat,

one of the most modern production facilities in Europe.

Revenue: PLN 1 670 million

Profile: food industry

Employees: 1 750 people

I. General information about PKM Duda.

3

CG PKM Duda structure

4

II. Results of 2011

5

Consolidated financial results

Income (in millions of PLN)

Consolidated income from salesPKM Duda between 2004 and IIIQ 2011 (in millions of PLN)

1 4551 670

+15%

2010 2011

Export income(in millions of PLN)

218226

+4%

2010 2011

6

+21%

Belarus; 31%

Turkey; 3%Russia; 9%

Italy; 3%Germany;

8%

Korea; 2%

The Netherland

s 7%

Lithuania; 6%

other countries;

31%

The structure of export revenues regarding the clients country

2010 2011

Belarus; 26%

Turkey; 12%

Russia; 10%

Italy; 8%

Germany; 8%

Korea; 6%

The Netherland

s; 5%

Lithuana; 5%

other countreis;

19%


7

According to the strategy, the company focused on improving the situationregarding liquidity and strenghtening of the working capital.

Working capital net (in millions of PLN)

62,4

70,3

2010 2011

Current liquidity ratio

1,0

1,15

2010 2011

+7,9mln zł

+15%


8

The Group consistently reduces its debt, especially the interest debt.This will enable stable funding to continue current operations towards the

development of the Group.

These actions are shown in the balance sheet. The debt figures have been reduced.It is alsovisible in the overall level of debt ratio (which went down by 6 % p.)

and a stable ratio of the net/ EBITDA debt.

Total debt ratio

60,3%

54,3%

2010 2011

-6 pkt %

Net Debt/ EBITDA

2010 2011

2,82,9

-3%


9

454 873

344 461323 285

264 249 263 309 265 436237 430 232 082

0

100 000

200 000

300 000

400 000

500 000

30.06.2009 31.12.2009 30.06.2010 31.12.2010 31.03.2011 30.06.2011 30.09.2011 31.12.2011

Interest debet


EBITDA (in millions of PLN)

EBIT (w mln zł)

Net results (in millions of PLN)

91,2

83,5

2010 2011

56,854,4

2010 2011

-4%

31,3

39,3

2010 2011

-8%

10

+25%

* Net result attributed to shareholders of the parent company

PKM Duda and Production Segment

Pork:

"dioxin scandal"

high raw material prices

low supply of pigs - November-November

reduction of 11.7% (CSO) and sows by 15.3% (CSO);

poor summer resulting in low demand for meat

deterioration of the financial results in the meat industry

optimization of purchasing meat by the plants

changes in shopping preferences - parts instead of half carcasses and

medium quality meat instead of premium meat

increasing import of ready pork parts – in the first eight months of the year it

increased by 7% (source: MARD);

decreasing slaughter margins

increase in productionin Grąbkowo plant - revenue by 28% and slaughter by18%

changes in pig purchasing - resulting in an increase in average carcass weights,

keeping up with the market, enhancing competitive groups based on the quality

Market conditions in 2011

11

3

3,5

4

4,5

5

5,5

6

1 3 5 7 9 11131517192123252729313335373941434547495153

Prices of pork livestock [PLN/kg]

2011 2010 Tydzieo


Beef:

record prices of cattle slaughter

focusing sales on the Turkish market

slight increase in slaughterings

Venison:

continuing strong demand for the German market

good exchange rates

12


8,9

5,2 5,8

11,5

6,86,3

29,4% 29,9%

9,5%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Bulls Cows Heifers

Average prices of livestock purchase

(2010 i 2011)

2010

2011

zmiana % r/r

+24%

806,6649,4

2010 2011

Revenues (in millions of PLN)

EBITDA (millions of PLN)

EBIT (millions of PLN)

25,2

2010 2011

12,0

2010 2011

+ 9%

6,7


13

+78%

23,2

Volume of pig slaughtering in Grąbkowo (in thousands)

1 031878

2010 2011


14

Purchase of pigs by PKM DUD in the domestic market in 2010 and 2009 (in thousands)

726 934 853 956

127 022

600 000

700 000

2010 2011

+17%

szt.

+18%

82,084,086,088,090,092,0

The average WBC weight (kg)

2010 2011

54,0

55,0

56,0

57,0

58,0

Average meat content (w %)

2010 2011

Plant Segment

15

- 1%

33,834,1

2010 2011

Revenues (PLN million)

EBITDA (PLN million)

9,58,0

2010 2011

+19%

EBIT (PLN million)

8,3

2010 2011

+37%

6,1

very good agricultural market conditions

high prices of cereal and rape

additional and supportive funds

good results in restructuring the segment

planned disinvestments: sales of AGROHOP/ Wizental companies


Animal agriculture segment


maximum use of hog supply from own livestock

PKM Duda - a technological avant-garde!

better results in the production of test work

results in actions taken to obtainbetter the quality - the first

results are confirmed to be positive (quality of meat,

consumption of feed) as a result of the so-called

"pharmacological castration", growth in the sales of piglets, a

significant improvement in animal well-being

16

2%71,3

70,1

2010 2011


EBITDA (millions of PLN


14,319,3

2010 2011

9,9

2010 2011

-26% - 25%

13,1

Animal agriculture segment

17

18


Trade segment

further change in the structure of consumption - decreasein cured meats, increase in fresh meat, especially poultry

intensification of activities in order to consolidate stores into network of retail shopping

"shrinkage" of the market – closing down shops, deterioration in consumers paying

reversal of the decline in sales volume, withdecrease in consumption of meat and red meat; salesgrowth in these product categories

development of HoReCa

dynamic revenue growth

territorial development

portfolio diversification

intensification of telemarketing sales channel

Trade segment

19

0 zł

1 000 000 zł

2 000 000 zł

3 000 000 zł

4 000 000 zł

5 000 000 zł

6 000 000 zł

Dynamics of the HORECA sales department

2010 2011

37,23% 43,5%

69,6%73,9%

50,6%

66,7%

55,6%

91,9%

69,6%69,5%

44,6%

71,9%

Trade segment

+9%

970,2893,7


35,341,7

EBITDA (millions of PLN)

25,131,9


-15% -21%

20

20112010

20112010 20112010

Trade segment

21

Contribution of segments to EBITDA Contribution of segments to operating revenue

Revenue from customers structure according to the segments

Segment results for the PKM DUDA Capital Group

22

1,8%

51,6%

3,8%

42,9%

Plant agriculture segment Trade segmentAnimal farming segment PKM Duda and production segment

15,0%

45,4%

17,8%

21,8%

Part 3 Implementation of Duda 2012 Programme

Results of Duda 2012

Programme

24

The effect of the PRO Programme in 2011 are based on increasing efficiency in the following areas: purchase, employment, production, distribution and integration.

14,6

12,5

0

2

4

6

8

10

12

14

16

Wykonanie 2011 Budżet 2011

Implemented benefits in 2011equalling 14.6 million represent 18% of the Duda 2012 Programme.

ActivitiesArea

25

Optimization of procurement processes across the Group and the launch of tendering procedures for another category of purchase in accordance with the schedule

Support of procurement processes through modern IT tools which effectively purchasing utilities (electricity, fuel) and external services.

Implementation of the central structure of purchasing for the segment of distribution in the purchase of goods

Continuous steps towards the purchasing organizations providing services for both Capital Group and thesubsidiaries

Customisation of purchasing policy according to the market demand - reducing raw material costs.

Maintenance / reduction of employment by means of continuous rationalization of number of employees and outsourcing a number of support functions, optimization of support.

Reduced personal costs.

Implementing a new system of training aimed at improving the efficiency of managers of the Capital Group

constant work to improve internal controls and management information systemthrough the implementation of standardized procedures for decision making within the group and creating a company focused on segments of similar profile and management model.

development in the system of management of sales in CM Makton

Duda 2012 Programme:Initiatives to be implemented in 2011

Building purchaseorganization

Optimizingemployment costs

Development of managerial

information system

Summary

ActivitiesArea

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Costs/ marginbalance

• Reduction of production costs - optimization of process and production costs.

• Optimizing product portfolio to maximizing account costs and marginsfor the the profitability of the offer

• Optimization of transport costs through better use of tools for planning of routes ofproduction and distribution and optimum utilization of available fleet, both internal and external.

• Developing new regulations for sorting carcasses for the client – increase in the profitability of sales.

• Developing new regulations for sorting carcasses for cutting - increase in the sales profitability

• Introduction of the principles of budgeting, sales, production and purchasing based on the principle of ‘just in time’ - minimization of operating costs and increase in sales profitability

• Developing and implementing a performance report, capacity utilization, growthreturn on sales, minimizing production costs.

• Implementing the principles of calculating the alternative - an increase in sales

• Developing and implementing new regulations for buying pork livestock - increase in sales profitability.

• Developing and implemening production standards for the elements w.bone/ boneless

Summary.

Duda 2012 Programme:Initiatives to be implemented in 2011

Duda 2012 Programme results. Summary

Tasks fulfilledArea

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Distribution:

Divestments:

• Process optimization and the introduction of targeted telemarketing sales

• Establishment of a specialized structure for optimization of distribution outside the core business (indirect) and goods (meat, meat, poultry).

• Optimizing employment in several departments (accounting, human resources, IT).

• Revenue growth in HoReCa 2011 Vs. 2010 by 62%.

• Expanding the portfolio of network clients

• Revitalisation of „Stół Polski” brand – the beginning of the project.

Sales of agricultural companies Wizental Sp. z o.o. for PLN 5.5 million and Agrohop Sp. z o.o. for theamount of PLN 3.76 million.

Sales of agricultural land belonging to the Bioenergy Sp. z o.o. for the amount of PLN 5 million.

Signing a preliminary agreement to sell 157 acres of land belonging to Agronet Sp. z o.o. for the amount of PLN 3.46 million.

Real estate sales in Poznao, Gnieźnieoska Street for the amount of PLN 850 thousand

Negotiations with potential investors for property located in Warsaw, Taśmowa 27 street

Summary

Legal notes

- This document on PKM Duda has been prepared by PKM Duda (the "Company").

- This document does not represent a complete or exhaustive image of the Company. This document and the associated slides

and their descriptions may contain statements that relate to the future. The forward-looking statements are not guarantees of

fulfillment of expectations of future performance and involve risks, uncertainties and therefore the actual financial situation of

the Group in the future may differ materially from the expectations expressed or implied.

- The Company presents its own image, prepared in accordance to the best knowledge and belief, provided that it is not possible

to provide complete information. Implementation of the events referred to in this document is subject to the satisfaction of

several conditions that may occur impossible to meet.

- Regarding the comprehensiveness or accuracy of the information presented in this document, no warranties or representations

shall be created. The Company is not responsible for any reason whatsoever arising from any use of this document. This

document has been prepared solely for information and publicity, and does not constitute an offer to buy or sell or offer

securities or financial instruments or to participate in any commercial venture. This document does not constitute an offer or

invitation to purchase or subscribe for any securities in any jurisdiction, and nothing contained therein shall not constitute a

basis for any agreement, commitment or investment decision, nor should it rely on it in connection with any contract,

commitment or investment decision.

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HeadquartersPolish Meat Concern DUDA S.A.

ul. Kłobucka 25, 02-699 Warszawatel. (+48) 22 319 94 00

www.pkmduda.pl

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