Increasing Ukrainian Agricultural M&A Investments

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Increase in ag investments through M&A
Bohdan Chomiak, UkrAgroConsult
Global Trends
Global Trends
1.3%
3.4%
2.2%
2.9%
2.5%
GLOBAL M&A SECTOR
BREAKDOWN YTD
Value
12.7%
Industrials & Chemicals
8.1%
9.1%
Financial Services
TMT
Consumer
Business Services
11.9%
Energy, Mining & Utitlities
Pharma, Miedical & Biotech
Leisure
29.2%
8.8%
8.0%
Construction
Transportation
Real Estate
Agriculture
SOURCE: MERRILL CORPORATION
Global Trends
GLOBAL M&A SECTOR
BREAKDOWN YTD 2012
Volume
1.0%
3.4%
3.1%2.1%
21.2%
3.6%
Industrials & Chemicals
7.2%
Financial Services
TMT
Consumer
9.3%
8.5%
Business Services
Energy, Mining & Utitlities
Pharma, Miedical & Biotech
Leisure
Construction
11.2%
15.5%
Transportation
Real Estate
13.7%
Agriculture
SOURCE: MERRILL CORPORATION
Global Trends
Ernst & Young Q3 2012 update indicates that total deals had fallen to 165 and value fell to $24 Billion
Global Trends
Global Trends
DEAL VALUE $B
180
160
140
120
100
DEAL VALUE $B
80
Linear (DEAL VALUE $B)
60
40
20
0
1Q
2Q
3Q
2008
4Q
1Q
2Q
3Q
2009
4Q
1Q
2Q
3Q
2010
4Q
1Q
2Q
3Q
2011
4Q
1Q
2Q
3Q
SOURCE: DEALLOGIC
2012
Euro-Denominated Corporate IG Volume: This chart shows the number of deals and the
volume in USD billions for Euro-denominated corporate IG bonds from the 1st quarter of
2008 up to and including the 3rd quarter of 2012.
Ukraine – The Dark Side
Overnight Cost of Money
%
31.10.2012
O/N
1W
2W
1M
Month over Month Change in Reserves
$BN
Buy
Sell
35
46
36.75
47.5
37 48.25
35.25
43
SOURCE: NBU
SOURCE: NBU
Commercial Bank Performance
01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.10.2012
Return on assets,
1.5
1.03
-4.38
-1.45
-0.76
0.34
%
Return on equity,
12.67
8.51
-32.52
-10.19
-5.27
2.32
%
Credit growth %
71%
74%
0%
1%
9%
1%
SOURCE: NBU
Ukraine – Goes with the Force
Agriculture – Grows
Economy - Crawls
1990=100 percent
Ukraine GDP 1990 = 100%
90.0%
120
80.0%
100
70.0%
% Growth
80
60.0%
60
50.0%
40
20
0
Ukraine GDP
40.0%
30.0%
1991
2005
2008
2009
2010
2011
Total
86,8
63,5
71,3
70
68,9
82,6
Crop Production
83,3
78,7
93,7
89,3
85,6
111,6
Animal Production 90,5
47,4
47,6
49,6
51,2
51,9
SOURCE: STATE STATISTICS COMMITTEE
20.0%
10.0%
0.0%
1991
2005
2008
2009
SOURCE: STATE STATISTICS COMMITTEE
2010
Ukraine – Key Growth Drivers
Proit, Loss (-) Million UAH
25000
20000
19926
15000
12750
10000
5000
0
Proit, Loss (-)
7120
5462.1
1253.2
-121.4
2000 2005 2008 2009 2010 2011
-5000
● Equity Offerings to June 2011 - $1.5 billion
● Debt – Corporate Bonds and Borrowings - $3.5 billion
THE PRIMARY DRIVER IS PROFIT
Ukraine – Use of Funds
Ukraine – Investment Impact
Growth of labor productivity
1990 = 100%
TOTAL
CROP PRODUCTION
ANIMAL PRODUCTION
Ukraine – Investment Impact
Creation of Global Competitors
Hatchery
Farms for Young
Laying Hens
Farms Laying
Hens
Retail Chains
Branded Points of Sale
Wholesale
Export
Breeder Farm
Feed Mill
Egg
Processing
Plant
Direct Sales
Export
Grain Storage
Facility
Sunflower Seed
Crushing
Quality Cold Pressed
Oil (B2B)
Heating Fuel
Ukraine – Two Jeddai Knights
MERGER
MASTER
ACQUISTION
MASTER
Ukraine - Merger and Acquisition Opportunity
Pork Sector
Kyiv – 20% of
Ukraine’s Total
Consumption
No dominant
player
Ukraine – Merger and Acquisition or
COOPERATION
Small- and midsized
farmers can gain access
to modern and efficient
agricultural machinery,
EU know-how ,
infrastructure (including
storage and port facilities)
and better margins by
simply Co-operating.
5-STEP
STRATEGY
5.Leading
international
agro company
Absolute leader producer
of agricultural
commodities in Ukraine
and CIS
4. II consolidation stage to boost
total land bank up to 500-1,000
th. ha.
(small farms and leading farms
[<25 th. ha. & >75 th. ha.])
3. Invest into logistical capability
(Elevators, Port facility etc)
2. I consolidation stage - up to 300 th. ha.
(mid sized farms [25-75 th. ha. each])
1. Create and lead first agricultural Co-op
Source:
Lapersa vision
UkrAgroConsult offers:
Crop forecasts, agricultural markets, pricing
S&D of grains and oilseeds in the Black Sea Region and worldwide
Export/ import statistics
Agricultural market researches (cereals, oilseeds, meat, sugar, elevators, seeds, logistics, etc.)
Daily and weekly newsletters for agricultural professionals
Analysis of trends in capitalization of Ukrainian agricultural holdings
Investment and consulting services
Office 5, Timoshenko Str. 29- V, 04205, Kyiv, Ukraine
Tel/Fax: +380 44 451 46 34 (multi-channel)
[email protected]
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