SPEEDY (0SP BU) COMPANY OVERVIEW 16-Feb-15 Speedy (0SP BU) Share Data Price (BGN) 33.99 Price (EUR) 17.38 52 weeks Price Change 50.40% 52 weeks Price Range 11.25 - 17.38 Market Cap (BGN) 181,370,640 Market Cap (EUR) 92,733,336 Shares outstanding 5,336,000 DPS 1.00 Dividend yield 2.94% EPS 0.90 Sales per share 7.35 Book value per share 3.73 FCF per share 0.29 P/E 19.39 P/S 2.36 P/B 4.66 EV/Sales 2.53 EV/EBITDA 13.72 ROA 17.60% ROE 35.68% Current Ratio 1.32 Total Debt Ratio 0.25 Interest Coverage 14.07 Assets Turnover 1.44 Source: Company data, Sofia International Securities Equity Research Shareholder Structure Valeri Mektupchiyan 66.42% Free float 33.58% Source: Company data, Sofia International Securities Equity Research Speedy is the leading provider of courier services in Bulgaria. Founded in 1998, currently it accounts for 24% of the postal services market, and for 30% of the non-universal postal services. For the last three years the biggest 5 operators accounted for 67% of the market on which operate 56 firms. In 2013 the market amounted to BGN 258m with BGN 209m due to courier services. Speedy consistently grows at a faster pace than its competition and continues to expand its market share. Speedy serves more than 700 thousand people and carries out 12 million shipments per year. Its auto park consists of more than 750 vehicles. It operates through 6 regional centers and 242 offices, out of which 152 are leased through its program Speedy Parcel Shop. The company employs 901 people. In 2014 Speedy acquired a Romanian shipping agent which it fully integrated with its activities, and offered clients the same shipping rates for shipments to Romania as within Bulgaria. This helped the growth in international shipments and pallets to outpace the domestic one; international business accounts for 9.1% or sales as of 2014. More than 80% of revenues are contracted with long-term agreements as the company works mainly with corporate clients. This segment enjoys less competition and is dominated by Speedy. The company is not dependent on large customers as its biggest client accounts for about 2.5% of its revenues. The company restructured its main activity in order to optimize its cost structure and transferred part of logistics to third parties, allowing it to rent its available vehicles. This led to decreased spending for fuels in 2014 and to higher external services costs. Currently about 80% of the couriers' force are subcontractors. Speedy operates fully through leasing of its vehicles and has low level of bank debt. In the end of the year Speedy concluded its capital increase in which it raised BGN 20.45m which were used to purchase one Romanian and one Bulgarian shipping companies. They were bought from the French GeoPost in exchange for 25% of Speedy's capital as a strategic investor. GeoPost has the option to acquire the majority stake in 2020. Speedy also gained access to its land network in Europe. Speedy is public since Q4'2012 and has distributed dividends ever since. Dividend yields were 16.95% in 2012 and 5.54% in 2013 (using average prices for that year). Selected Financials EUR '000 Revenues Share Price of Speedy (0SP BU) Revenues YoY EBIT 36 BGN 34 2011 2012 2013 FY FY FY 2014 FY 24,320.6 27,802.5 33,608.7 39,226.8 n/a 7.32% 10.68% 8.55% 2,816.2 4,161.4 5,195.7 4,761.1 EBIT Margin 5.92% 7.65% 7.90% 6.21% Net Income 2,799.8 3,825.5 4,418.1 4,782.1 32 Net Margin 5.89% 7.04% 6.72% 6.23% 30 PP&E 2,628.6 4,153.2 7,454.6 9,784.1 28 Trade Receivables 5,757.1 6,133.5 5,980.1 9,201.2 26 Inventories 223.9 284.3 309.3 246.4 24 Total assets 10,529.0 13,494.0 18,580.3 35,776.6 22 Equity 3,735.5 4,761.1 6,920.8 19,887.2 Non-Current Debt 1,065.5 1,758.3 3,709.9 6,627.4 Current Debt 1,134.0 1,226.6 1,474.6 2,459.8 Trade Payables 4,594.0 5,665.1 6,387.6 5,531.7 Source: Bloomberg, Sofia International Securities Equity Research Jan-15 Dec-14 Nov-14 Oct-14 Sep-14 Aug-14 Jul-14 Jun-14 May-14 Apr-14 Mar-14 Feb-14 20 Source: Company data, Sofia International Securities Equity Research Sofia International Securities -1- Sales by shipments in Q4'14 Income statement 2011 2012 2013 FY FY FY FY Revenues 24,320.6 27,802.5 33,608.7 39,226.8 Expenses -39,307.0 -43,730.0 -52,429.0 -62,573.0 4,223.3 5,443.7 6,802.2 7,233.8 -1,407.1 -1,282.3 -1,606.5 -2,472.6 2,816.2 4,161.4 5,195.7 4,761.1 297.1 96.6 -257.2 552.2 -162.1 -199.4 -428.0 -338.5 3,113.3 4,258.0 4,938.6 5,313.3 -313.4 -432.6 -520.5 -531.2 2,799.8 3,825.5 4,418.1 4,782.1 EUR '000 International shipments 9% Others 6% EBITDA Depreciation EBIT Net financial result t/o interest expense EBT Domestic shipments 85% Taxes Net Income (before minorities) Minorities Net Income Source: Company data, Sofia International Securities Equity Research Sales vs. EBIT Margin % 14.97 15.46 12.14 2012 2013 Revenues 18 16 14 12 10 8 6 4 2 0 0.0 0.0 0.0 3,825.5 4,418.1 4,782.1 9,784.1 2,628.6 4,153.2 7,454.6 Intangibles 173.3 193.3 310.9 193.3 Other Non-Current Assets 559.9 571.1 567.0 13,587.1 3,361.7 4,917.6 8,332.5 23,564.4 223.9 284.3 309.3 246.4 5,757.1 6,133.5 5,980.1 9,201.2 Cash & Cash Equivalents 962.3 2,003.8 3,687.9 2,566.2 Other Current Assets 223.9 154.9 270.5 198.4 7,167.3 8,576.4 10,247.8 12,212.2 10,529.0 13,494.0 18,580.3 35,776.6 Equity 3,735.5 4,761.1 6,920.8 19,887.2 Non-Current Debt 1,065.5 1,758.3 3,709.9 6,627.4 0.0 0.0 0.0 0.0 Non-Current Liabilities 1,065.5 1,758.3 3,709.9 6,627.4 Trade Payables 4,594.0 5,665.1 6,387.6 5,531.7 Current Debt 1,134.0 1,226.6 1,474.6 2,459.8 0.0 82.8 87.4 1,270.6 5,728.0 6,974.5 7,949.6 9,262.1 10,529.0 13,494.0 18,580.3 35,776.6 Cashflow from Operations 3,155.2 4,296.4 5,667.7 5,623.7 Cashflow from Investments -300.6 -235.2 -796.1 -14,025.2 -1,218.9 Non-Current Assets Inventories Trade Receivables Current Assets Total Assets 2014 EBIT Margin (RS) Source: Company data, Sofia International Securities Equity Research Other Non-Current Liabilities ROE (DuPont Decomposition) 3.2 2.8 2.4 2.0 1.6 1.2 0.8 0.4 0.0 0.0 2,799.8 Balance sheet PP&E EUR m 45 40 35 11.58 30 25 20 15 10 5 0 2011 2014 x % 100 Other Current Liabilities 80 60 Current Liabilities Total Equity and Liabilites 40 Cash Flow Statement 20 0 2011 2012 2013 2014 t/o Capex ROE (RS) Net Profit Margin (RS) Cashflow from Financing Assets Turnover Financial Leverage Net Cash Source: Company data, Sofia International Securities Equity Research -300.6 -235.2 -796.1 -2,722.1 -3,019.7 -3,184.3 7,285.4 132.4 1,041.5 1,687.3 -1,116.2 Source: Company data, Sofia International Securities Equity Research Sofia International Securities Nikolay Dimov Martin Georgiev Equity Research Equity Analyst Executive Director +359 2 937 98 74 +359 2 937 98 66 dimov@sis.bg martin.georgiev@sis.bg Tel: +359 2 988 63 40 Fax: +359 2 937 98 77 E-mail: info@sis.bg; ndimov@bloomberg.net Sofia International Securities -2- Disclaimers and Required Disclosures The research and the recommendations in this report have been prepared and reviewed by: Nikolay Dimov Equity Analyst dimov@sis.bg Martin Georgiev Executive Director martin.georgiev@sis.bg The individuals responsible for the preparation of this report certify that they have not received nor will receive compensation in exchange for expressing specific views or recommendations in this report. 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