Investment Teaser.

Company production for

Power Generation Sector, Metal Processing

Agenda

MARKET OVERVIEW

KEY INVESTMENT

CONSIDERATIONS

COMPANY PROFILE

KEY FINANCIALS

COMPANY PERFORMANCE

TRANSACTION STRUCTURE

PRINCIPLES OF TRANSACTION

Page 1

Market overview

The market offers high growth for suppliers

of components for the energy sector
because there is constant growth in
consumption of electricity and Polish
power plants are old.

Age structure of power plants in Poland

All energy companies in Poland are interested in investing in

refurbishment of existing capacity, together with creation of new
plants.
The current slowdown eases urgency but not the long-term need
for the Polish energy sector.
A huge injection of capital expenditures is needed (estimated at 3
billion annually between 2009 and 2030)
Power Plants over 40 years old without New Investments

<5 yrs
5-10 yrs

6%
7%

10-15 yrs

5%

15-20yrs 5%

20-25
years

44% >30
years

89%
71%

16%
39%

17%

25-30 years
Source: Frost & Sullivan, PGE

18%
2000

2010

2020

2030

Source: Prof. Krzysztof mijewski

Page 2

Key Investment Considerations

Dynamic growth and high profitability reflecting mastery in advanced and ultra-precise metal processing, extremely high levels of technical competence, reliability and project management skills
Investment in new advanced production capacities, own engineering and technology resources
and a strong basis for further sales growth exceeding PLN 100m in 3-4 years
Well established cooperation with major global players on the relevant markets

High growth potential within the sector

Highly skilled, educated and experienced staff

The Company is one of the leading suppliers on the Polish market of precise components for energy
and oil and the gas industry
Supply of products for both domestic (80% sales) and international markets (20% sales)

Page 3

Company Profile
The Company was established by a private individual in 2005. The founder acquired a production facility (machines and
equipment) and employed former employees of a divested non-core production department of a global corporation (GC). The
goal was to invest in the production facility in order to develop the organization; to provide products and services for GC that
outsourced the department but simultaneously gained new clients in order to reduce dependency on GC.
Over six years of activity, the Company has established itself as a reliable supplier of a wide range of components for steam
turbines such as: diaphragms, turbine valves and their components, servomotors, piping (live & reheat steam and oil supply),
satellite coated elements, sealing rings, sealing strips, coupling elements. The Company specializes in delivering complete sets
for repairs and overhauling turbines up to 400 MW, including hulls (casted and welded) repairs and revitalization, rotor repairs
etc. A minor part of its production consists in specialist steel constructions such as rotor racks, foundation plates or frames for
gas compressors.
Such production is categorized by the following: single unit production, specialist materials which are difficult to process,
highest quality requirements and short delivery times. All works are performed under stringent quality control supervision and
all products are non-destructively tested by internal specialists and a certified laboratory.

Page 4

Company Profile
The Company has production capacity in machining, heat treatment, manual welding, robotized welding, abrasive water
jet cutting, sand blasting, chamber painting, precise assembly, non-destructive testing. The Company has access to
production capacities of very wide parameters (machining, heat treatment, metal forming) given its location in a large
industrial zone which is also occupied by companies occupied in similar business.
The Company has defined its strategic goals: moderate growth in its current business (year to year up to 5%) and
specialization in two or three products primarily for export sales which should contribute an additional 10-15% to growth
rates as of 2012. In order to secure production capacities for further development the Company has completed an
investment project of c.a. PLN 16m in new machines and factory facilities.

The Company is perfectly suited to supply the power industry sector due to the following:
Skilled employees with 20-30 years of experience in production
Constant cooperation with the best engineers in metal processing for the power industry
Know-how in: engineering, production planning, quality requirements etc.
Excellent contacts within the power industry sector and an excellent financial standing

Page 5

Key financials
Key historical financials and financial projections (in PLN000)
2008

2009

2010

2011

2012

2013

Revenue

48.042

38.987

62.009

56.229

79.183

80.927

EBITDA

7.067

5.350

14.411

10.219

11.300

10.423

EBIT

7.185

4.818

13.895

9.382

8.946

8.201

Net Profit

5.723

4.047

13.747

9.455

8.344

8.201

15.097

16.117

27.413

41.843

52.782

52.350

7.973

12.020

19.698

17.434

18.215

20.266

Total Assets
Equity

Page 6

Company performance
Revenue
EBIT
Margin

80 927

79 183
22%
62 009
56 229 17%

15%
48 042
38 987 12%

11%
10%

13 895
The Company has a very solid
performance track record with:
dynamic growth
solid profitability
ability to finance important
investment expenditure

7 185

2008

9 382

8 946

4 818

2009

2010

2011

2012

8 201

2013

Page 7

Transaction structure
Sale of majority stake of shares with
the call option to purchase remaining
shares, with operations managed by
the current owner within the period of
3 years after conclusion of the first
shares sale agreement (optional)

Page 8

Principles of the transaction

SSW law firm is advising the Vendor on the sale of the

shares. It is also assigned to select potential Purchasers.
The brochure provides interested parties with initial
information regarding the opportunity. This brochure shall
not constitute an offer within the meaning of Art. 66 et seq
of the Polish Civil Code. Once should you require further
information concerning the investment, please request a
draft of Non Disclosure Undertaking document.
For further information please contact:

Piotr Spaczyski
Partner
Attorney at Law
Law Firm Spaczyski,
Szczepaniak i Wsplnicy S.K.A.
Rondo ONZ 1, 00-124 Warsaw
tel. +48 22 544 87 00
mobile: +48 602 250 491
piotr.spaczynski@ssw.pl

Page 9

Contact

Warsaw Office

Poznan Office

Rondo ONZ
12th floor
00-124 Warszawa
tel. + 48 22 544 87 00
fax + 48 22 544 87 01
warszawa@ssw.pl

ul. Mielyskiego 14
7th floor, Okrglak
61-725 Pozna
tel. + 48 61 625 16 00
fax + 48 61 625 16 01
poznan@ssw.pl

Page 10