Beruflich Dokumente
Kultur Dokumente
o f
Y o u r
B u s i n e s s
E x c l u s i v e l y
d i s t r i b u t e d
b y
Romania, 2011
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Contents
1. Macroeconomic Scenario 2. Analysis of Investment Attractiveness - Attractiveness Indicators - Driving Forces of Attractiveness - Risk-Profitability Maps 3. Concentration in the Sector 4. Analysis of Financial Ratios - Distributions of Financials - General Indicators - Profitability Ratios - Liquidity Ratios - Financial Cycles - Financial Leverage Ratios - Production Factors - Costs - Structure of Current Assets - DuPonts Pyramid 5. Companies from the Sector - Top Players from the Sector - Listed Companies from the Sector - Mergers and Acquisitions 6. Key Concepts - Definitions of Indices - Definitions of Selected Concepts
Page
-4 -5 - 5 - 5 - 7 -9 - 10 - 10 - 11 - 14 - 16 - 18 - 19 - 21 - 24 - 26 - 28 - 29 - 29 - 30 - 31 - 32 - 32 - 34
! This report has been compiled to the best of the authors knowledge, using information originating from verified sources. The authors of the report take no responsibility for the consequences of any decisions and actions taken as a result of the use of this report. This report refers to the Romanian economy.
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-2-
EconTrends for Romania is the unique tool for analyzing various Romanian industries. It contains description of macroeconomic environment, analysis of investment attractiveness, detailed analysis of revenue as well as in-depth analysis of a wide scope of financial ratios. The report covers not the full sector but only its major part, since it is build on the bottom-up aggregated financial data from C reditinfo Romania and C C IR (C hamber of C ommerce and Industry). The Short-Term Investment Attractiveness Ranking developed for Romania under the EconTrends methodology is based on the so called Profitability Index, that shows forecasted dynamics of EBIT. It serves as a proxy for dynamics of dirty cash flows in enterprises from a given industry. Fundamental components of the Profitability Index like net sales and EBIT margin, are forecasted using econometric models. The behavior over time of all these categories is illustrated using appropriate pictograms in the Map of Forces. Profitability of a given industry is evaluated on the basis of average forecasted dynamics of EBIT in two following years. Every industry has a granted profitability mark that ranges from 1 up to 5, which reflects its profitability versus other industries. Higher mark indicates higher profitability. Risk of an industry in turn is measured by the standard deviation of forecasted Profitability Index. Every industry has also an assigned risk mark that ranges from 1 up to 5, which reflects its risk versus other industries. Higher mark means here lower risk. Each industry is at the end characterized by the following two parameters its profitability and risk. They are used for evaluation of the short term investment attractiveness, that reflects preferences of investors seeking to maximize their rates of return and to minimize the risk they face. The final Short-Term Investment Attractiveness Ranking of an analyzed industry explains its relative attractiveness comparing to other sectors. The lower a position within the ranking the higher is attractiveness of an industry. C hanges in this position replicate either changes in profitability or in risk. Additionally like in the case of profitability and risk measurement the final attractiveness is graded from 1 to 5, where the highest grade means the highest attractiveness. Lower grade means worse investment-weather conditions, so either lower profitability or higher risk. The Short-Term Investment Attractiveness Ranking is presented according to the structure of the North American Industry C lassification System (NAIC S). However the used system of industry classification is not fully compatible with the Romanian C lassification of Activities due to Romanian statistics - specific factors.
Analysed sector:
Class
There are no subclasses in analysed class. Dairy Product Manufacturing
-3-
Macroeconomic Scenario
Period Nominal GDP Growth Real GDP Growth Inflation (C PI) Inflation (PPI) USD/RON exchange rate
Datasource: ISI, EMIS, CEIC
120
100
-> expected fall of GDP nominal growth in 2013 -> expected slight fall of GDP real growth in 2013 -> expected slight fall of C PI inflation in 2013 -> expected slight fall of PPI inflation in 2013 -> expected weakening of USD/RON exchange rate in 2013
Growth
80
60
40
20
Period
Inflation (CPI)
114 112 110
108
Growth
Period
Inflation (PPI)
125
Growth
Period
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Forecast
Forecast
Forecast
-4-
0 0 1 1 1 1 1 1 1 1
0 1 5
Current Attractiveness
Profitability
5 4 3 2 1
0 0 0 0 1 1 1 1 1 1
0 1 5
Forecasted Attractiveness
4 3 2 1
Forecasted Attractiveness
Current Attractiveness
5 4
5 4
expected fall of attractiveness in the sector -> expected fall of profitability -> expected stabilisation of risk (expected stabilisation in risk mark shown on the chart)
Risk
Profitability
3 2 1
Risk
3 2 1
a e
Symbol's colour
Dynamics of profit Positive impact on profits dynamics Negative impact on profits dynamics Neutral impact on profits dynamics
a d
a d
Symbols sign
Positive dynamics of "driving force" Negative dynamics of "driving force" Close to zero dynamics of "driving force"
Symbols orientation
Rise of dynamics comparing to previous year Fall of dynamics comparing to previous year Stabilisation of dynamics comparing to previous year
Forecast
20%
expected rise in dynamics of net revenue in 2012 expected rise in dynamics of net revenue in 2013
20%
15%
15%
5% 0% -5%
10%
10%
5%
0%
-5%
-25%
-30%
-10%
Period
Net revenue per company - Y/Y dynamics Profitability index - Y/Y dynamics
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-5-
Forecast
20% 15%
expected rise in dynamics of EBIT margin in 2012 expected rise in dynamics of EBIT margin in 2013
5% -5% 0% -5% -10% -10% -15% -15% -20% -25% -20% -30%
Period
EBIT Margin - Y/Y dynamics Profitability index - Y/Y dynamics
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0%
10%
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Risk-Profitability Maps
Risk - Profitability Map (current situation)
4.5
4.0
3.5 3.0
2.5
Profitability
risk - profitability map (current situation)in previous year the sector was efficient in sense of risk minimation and profitability maximation
2.0
1.5
1.0 0.5
0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
-0.5
-1.0
Risk
All sectors Most efficient sectors
0.1
0.1
0.1
Profitability
0.1
0.0
0.0
0.0
0.0
0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Risk
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2.0
1.5
Profitability
1.0
0.5
-0.5
Risk
All sectors Most efficient sectors
0.0
0.0
Profitability
0.0
0.0
-0.1
-0.1
-0.1
Risk
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90%
80%
70%
60%
50%
40%
30%
20%
Lorenz Curve
10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0% 100%
Market power concentration measured by HerfindahlHirschman Index was weak in 2011 Net sales of top five companies in the sector reached the market share of 46.27% in 2011
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-9-
Average value for the sector in 2010 0 206 1.30% 3.85% -57.92% 5.23% -73.72% 3.32% -106.21% 0.31% 1.72% -0.11% -0.44% -0.13% 17.49% 69.90% 82.27% 58.66% 9.32% 46.73% -42 66 33 142 53.69% 30.55% 16.40% 63.51% 4.84 29 191.99 9.74% 129.24 9.57% 47.99% 118.99% 196.91% 17.54 7.66% 2.08% 16.19% 48.83% 0.60% 2011 0
II
III
IV
General Indicators
N umber of c ompanies Y /Y dynamic s of net revenue per c ompany [% ] Y /Y dynamic s of total operating c os t per c ompany [% ] Y /Y dynamic s of operating profit per c ompany [% ] Y /Y dynamic s of operating profit per profit- making c ompany [% ] Y /Y dynamic s of gros s profit per c ompany [% ] Y /Y dynamic s of gros s profit per profit- making c ompany [% ] Y /Y dynamic s of net profit per c ompany [% ] Y /Y dynamic s of net profit per profit- making c ompany [% ]
232 -8.48% -6.86% -100.94% -25.14% -199.52% -24.15% 872.46% -19.60% 0.10% -1.07% -5.42% -1.39% 13.15% 62.07% 68.01% 48.09% 8.00% 38.36% -69 65 34 167 53.92% 25.58% 13.79% 68.67% 6.78 59 289.99 8.93% 152.48 8.93% 49.97% 116.48% 188.95% 25.99 7.02% 1.91% 15.44% 49.96% 0.51% 38.29% 13.98% 0.21% 10.95% -147 25 23 56 0.00% -8.78% 0.00% 42.09% 5.0 10 75.79 4.90% 39.41 6.41% 40.44% 24.83% 47.07% 9.63 3.65% 1.08% 3.98% 31.06% 0.19% 75.17% 33.49% 1.36% 27.44% -33 40 39 105 0.00% 13.37% 5.09% 60.06% 11.7 18 114.10 8.42% 72.36 9.01% 61.08% 57.46% 104.09% 11.56 6.64% 1.83% 5.97% 55.52% 0.38% 116.07% 60.82% 4.75% 50.05% 9 58 58 173 35.08% 28.11% 22.70% 74.52% 18.4 28 147.40 11.71% 115.76 12.29% 73.83% 102.56% 177.60% 13.61 9.20% 2.49% 8.51% 69.84% 0.58% 198.62% 125.42% 17.75% 108.98% 49 109 114 358 169.07% 51.12% 54.20% 96.74% 39.0 67 206.52 15.26% 184.15 15.62% 83.79% 161.29% 341.82% 19.10 11.91% 3.23% 13.05% 82.32% 1.05% -17.67% -16.25% -85.54% -49.22% -93.91% -75.35% -95.18% -73.68% -13.56% -13.80% 0.00% -9.06% 12.70% -4.47% -0.21% -33.31% -22.85% -51.78% -47.29% -37.23% -24.05% 0.99% 0.08% 1.34% 0.02% 15.96% 7.39% 10.39% 1.95% 7.34% -0.92% -4.34% 13.67% 14.34% 3.41% 0.76% 8.06% 0.47% 18.14% 23.05% 23.29% 73.28% 72.72% 103.71% 105.08% 114.75% 171.26% 6.05% 3.21% 24.35% 3.51% 31.93%
Profitability Ratios
O perating Sales M argin [% ] N et Sales M argin [% ] Return on E quity [% ] Return on A s s ets [% ] E ffec tive tax rate [% ] Share of profit- making c ompanies [% ]
Liquidity Ratios
C urrent ratio [% ] Q uic k ratio [% ] Super quic k ratio [% ] Rec eivables to liabilities ratio [% ]
Financial Cycles
D ays of c overage for C as h & E quivalent [days ] D ays of c overage for rec eivables [days ] D ays of c overage for inventories [days ] D ays of c overage for s hort term liabilities [days ]
Production Factors
A verage employment per c ompany [pers on] L abour produc tivity [thou. RO N /pers on] L abour c os t as the s hare in total operating c os ts [% ] Fixed as s ets per employee [thou. RO N /pers on] L abour intens ity of produc tion [% ] M aterial & energy intens ity of produc tion [% ] T otal as s ets turnover [% ] Fixed as s ets produc tivity [% ] L abour c os t per employee [thou. RO N /pers on]
Costs
Share of wages in total operating c os ts [% ] Share of s oc ial c ontributions in total operating c os ts [% ] Share of external s ervic es in total operating c os t [% ] Share of material & energy us ed in total operating c os ts [% ] Share of taxes & fees in total operating c os ts [% ]
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-10-
General Indicators
Number of companies
P eriod Value Y /Y inc reas e 2008 200 0 2009 194 -6 2010 206 12 2011 232 26
rise of number of companies covered by database in 2011 comparing to the value in 2010
[thou RON]
fall of Y/Y dynamics of operating profit per company in 2011 comparing to the value in 2010
700 600
-20%
-40%
-60%
-80%
-100%
-120%
Period
Operating profit per company [thou RON] Y/Y dynamics of operating profit per company [%]
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800
0%
[thou RON]
-11-
fall of Y/Y dynamics of operating profit per company in 2011 comparing to the value in 2010
5% 0% -5%
800
600
-10% -15%
-20%
400
200
-25% 0 -30%
Period
Operating profit per profit-making company [thou RON]
[thou RON]
fall of Y/Y dynamics of operating profit per profit-making company in 2011 comparing to the value in 2010
1 200
50%
1 000
0%
[thou RON]
-100% 400
200
-150%
-200%
-200
-250%
Period
Gross profit per company [thou RON] Y/Y dynamics of gross profit per company [%]
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-12-
1 400
[thou RON]
1 000
800
600
Period
Gross profit per profit-making company [thou RON]
1 000
800
600%
[thou RON]
600
400
400%
200
200%
0 0%
-200
-400
-200%
Period
Net profit per company [thou RON] Y/Y dynamics of net profit per company [%]
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800%
-13-
1 000 40%
800
20%
600 0%
400 -20%
200
-40%
Period
Net profit per profit-making company [thou RON] Y/Y dynamics of net profit per profit-making company [%]
Profitability Ratios
Share of profit-making companies [%]
P eriod Value [%] Y /Y inc reas e [% ] 2008 77.00% -8 .0 0 % 2009 67.53% -9 .4 7 % 2010 69.90% 2 .3 8 % 2011 62.07% -7 .8 3 %
fall of share of profitmaking companies in 2011 comparing to the value in 2010
Period
Share of profit-making companies [%]
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1 200
60%
[thou RON]
-14-
1% 0%
Period
5% 4% 3% 2% 1% 0% -1% -2%
Period
Period
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-15-
Period
8% 6% 4% 2% 0%
Period
Liquidity Ratios
Current ratio [%]
P eriod Value [%] Y /Y inc reas e [% ] 2008 109.14% -2 6 .1 5 % 2009 95.10% -1 4 .0 4 % 2010 82.27% -1 2 .8 3 % 2011 68.01% -1 4 .2 6 %
fall of current ratio in 2011 comparing to the value in 2010
Period
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Period
6% 4% 2% 0%
Period
Period
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Financial Cycles
Days of coverage for Cash & Equivalent [days]
P eriod Value [days] Y /Y inc reas e [days ] 2008 -3 -1 8 2009 -17 -1 4 2010 -42 -2 5 2011 -69 -2 7
fall of days of coverage for cash & equivalent in 2011 comparing to the value in 2010
Period
fall of days of coverage for receivables in 2011 comparing to the value in 2010
20 10 0
Period
rise of days of coverage for inventories in 2011 comparing to the value in 2010
34 34 33 33 32 32
Period
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rise of days of coverage for short term liabilities in 2011 comparing to the value in 2010
Period
Period
fall of equity to total assets ratio in 2011 comparing to the value in 2010
Period
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-19-
fall of long-term liabilities to total liabilities ratio in 2011 comparing to the value in 2010
Period
Period
Period
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Production Factors
Average employment per company [person]
P eriod Value [person] Y /Y dynamic s [% ] 2008 71 -0 .0 3 % 2009 72 0 .5 7 % 2010 29 -5 8 .9 1 % 2011 59 1 0 1 .7 4 %
rise of average employment per company in 2011 comparing to the value in 2010
120%
80% 60%
[person]
50 40 30 20 10 0
100%
100
50
50%
[thou RON/person]
fall of labour cost as the share in total operating costs in 2011 comparing to the value in 2010
8%
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rise of fixed assets per employee in 2011 comparing to the value in 2010
[thou RON/person]
Period
rise of material & energy intensity of production in 2011 comparing to the value in 2010
Period
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Period
200%
150%
100%
50%
0%
Period
rise of labour cost per employee in 2011 comparing to the value in 2010
-30%
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[thou RON/person]
-23-
Costs
Share of wages in total operating costs [%]
P eriod Value [%] Y /Y inc reas e [% ] 2008 7.50% 0 .0 5 % 2009 7.96% 0 .4 6 % 2010 7.66% -0 .2 9 % 2011 7.02% -0 .6 4 %
fall of share of wages in total operating costs in 2011 comparing to the value in 2010
Period
fall of share of social contributions in total operating costs in 2011 comparing to the value in 2010
2% 2% 2% 2%
2%
2% 2% 2% 2%
Period
fall of share of external services in total operating cost in 2011 comparing to the value in 2010
Period
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rise of share of material & energy used in total operating costs in 2011 comparing to the value in 2010
10% 0%
Period
fall of share of taxes & fees in total operating costs in 2011 comparing to the value in 2010
Period
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-25-
80%
60%
40%
20%
0%
2009
2010 Period
2011
7.0% 25.2%
1.9% 15.4%
0.5%
50.0%
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80%
60%
40%
20%
0%
2009
2010 Period
2011
Inventories [%]
56.4%
Inventories [%]
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DuPonts Pyramid
Return on equity ROE = ROA * leverage ROE
2008
2009
2010
2011
11.6%
6.0%
-0.4%
-5.4%
Return on assets ROA = ROS * TAT company 2008 2009 2010 2011 ROA
*
2.63 2.48 3.27 3.91
2008
2009
2010
2011
4.4%
2.4%
-0.1%
-1.4%
Return on net sales TAT = Net revenue per company / Assets per company 2008 2009 2010 2011 TAT
Assets turnover
ROS
*
1.39 1.32 1.19 1.16
2008
2009
2010
2011
3.2%
2.0%
-0.1%
-1.1%
profit
[thou RON]
per
company
/
16 522 16 736 15 317
/
11 930 12 488 14 066 13 150
2008
2009
2010
2011
2008
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528
302
-19
-182
16 605
4 540
5 033
4 297
3 364
(*) Net profit per company or net revenue per company from a given year
(**) Value of assets per company or equity per company from the end of year
-28-
Public
com-
pany
*)
Market
Net
Y/Y
share
Revenue
dynamics
[mn RON]
of net
revenues
DANONE
14.15%
503.00
5.62%
o +
+ +
+ o
++
FrieslandCampina Romania
6.80 186.37% 65.13 190.59 617 10.44% 2.93 3.57% 2.01 1.78%
10.77%
382.72
50.04%
Albalact SA
5.77 894.03% 89.98 217.38 631 6.41% 2.42 2.65% 1.56
9.52%
338.25
29.47%
1.71%
15.30%
+
4.15% 12.31%
+ + o
o +
+ o
Napolact
9.23 -74.04% 51.56 108.57 348 17.89% 2.11 8.50%
6.26%
222.37
4.33%
2.05
Hochland Romania
8.08 -26.15% 46.59 87.00 365 17.33% 1.87
5.57%
197.95
2.72%
9.28%
2.28
4.08%
19.82%
o
2.18 10.44% 14.09%
+ o o
+ ++
++ +
Simultan SRL
13.33 45.15% 47.11 58.49 158 28.30% 1.24
3.60%
127.75
87.00%
22.80%
3.50%
124.34
3.20%
+
1.47 -0.32% 0.28 -1.15%
++ ++ ++
o ++
2.73%
97.11
31.05%
-0.47%
Covalact
-2.80 1.80% 64.44 92.00
2.54%
90.43
15.85%
371
-4.34%
1.43
-3.04%
0.98
-3.09%
++
545 11.15% 1.79 6.24% 1.18 5.30% 3.13%
++ ++ o
++ + o
Betty Ice
4.32 -11.75% 38.74
2.29%
81.53
9.56%
69.24
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6.01 81.85% 73.93 142.18 408 10.75% 2.21 5.92% 1.71 2.65% 13.80%
Average
6.09%
216.55
23.89%
+
In duPont Pyramid stock variables are not averaged over time for calculation purposes due to lack of these data
+
++ + o
+
High potential Medium potential Low potential
The data for 2010 and 2011 are from Creditinfo Romania and CCIR. Hence, the quality of presented data is strictly limited by the quality of data in Creditinfo Romania & CCIR. *) Public companies represents only these PLC that are listed on 1st and 2nd tier of BVB or Rasdaq
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Listed companies from the sector (BVB/Rasdaq; 1st and 2nd tier)
Financial Indicators (2011) Market Indicators (31/12/2012)
Average daily Effective Book Value [mn RON] RON] (y/y) ROE leverage ROA TAT ROS [thou P P/E P/BV [mn RON] %P L tax rate value Liquidity last year volume s market U L U Company'
Main indicators
Market
Market
Net
share
Revenue
Net Profit
[mn RON]
[mn RON]
Albalact SA
89.98 6.41% 2.416 2.65% 1.556 1.71% 15.30%
RASDAQ
9.81%
338.25
5.77
RASDAQ
0.94%
32.55
-2.57
Ilvas
8.02 1.25% 2.927 0.43% 1.181 0.36% 67.28%
RASDAQ
0.80%
27.71
0.10
BUCOVINA
5.40 8.06% 1.513 5.33% 2.367 2.25% 14.94%
RASDAQ
0.56%
19.33
0.44
Prodlacta
8.55 -80.44% 5.666 -14.20% 0.375 -37.82%
RASDAQ
0.53%
18.19
-6.88
Lacta SA
4.98 1.26% 1.961 0.64% 1.619 0.40% 29.99%
RASDAQ
0.46%
15.83
0.06
Lactag
1.49 1.34% 9.812 0.14% 1.078 0.13% 52.70%
RASDAQ
0.46%
15.71
0.02
Vranlact
4.49 7.89% 1.496 5.28% 1.535 3.44% 12.83%
RASDAQ
0.30%
10.30
0.35
RASDAQ
0.19%
6.62
-3.24
0.459
-48.94%
Lactido
25.36 -7.12% 1.329 -5.36% 0.098 -54.89%
RASDAQ
0.10%
3.29
-1.81
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2.832 -4.16% 1.205 -14.13% 32.17%
Average
12.23 -7.50%
1.41%
48.78
-0.78
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Value of a deal [mn USD] Status of a deal Jean Valvis Lactalis Group Dec-19,2012
Transaction date
Target Company
124.71
Apr-21,2008
15.94
Apr-23,2008
Lactate Natura
9.05 (completed)
Aug-07,2007
Covalact
Prodlacta
Sole-Mizo
4.98
Oct-15,2010
Lactate Natura
SIF Oltenia SA
Lactalis Group *
4.79
Oct-16,2008
Raraul
Sep-11,2009
2.92
Sep-11,2009
Sep-09,2009
Stars Co OOD
Meggle Romania
Apr-05,2007
Parmalat Romania
Feb-24,2009
Unilever
1.73
Dec-19,2012
Albora SRL
Oct-16,2008
Raraul
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Apr-23,2008
SigmaBleyzer
Lactalis Group The last mergers refer to the transactions affecting analysed sector. The data source is ISI Dealwatch
The largest buy/sell offers refer to the transactions affecting analysed sector. The data source is ISI Dealwatch
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Key Concepts
Definitions of Indices
Definition of index
Number of companies
Number of reporting companies Net revenue ----------------------------------------Number of companies Total operating costs --------------------------------------Number of companies Operating profit - Operating loss --------------------------------------Number of companies Operating profit --------------------------------------------Number of profit-making companies Gross profit - Gross loss --------------------------------------Number of companies Gross profit --------------------------------------------Number of profit-making companies Net profit - Net loss --------------------------------------Number of companies Net profit --------------------------------------------Number of profit-making companies Operating profit - Operating loss ------------------------------------Net revenue Net profit - Net loss -----------------------------------Net revenue Net profit - Net loss -----------------------------------Equity Net profit - Net loss -----------------------------------Total assets Gross profit - (Net profit - Net loss) ------------------------------------------Gross profit Number of profit making companies --------------------------------------------Number of companies Current assets -----------------------Short-term liabilities Current assets - Inventory ------------------------------Short-term liabilities Cash & Equivalent -----------------------------------Short-term liabilities Receivables -----------------------Short-term liabilities (Receivables + Inventories - Short term liabilities) * 360 -----------------------------------------------------------------Net revenue of goods and services Receivables * 360 -----------------------------------Net revenue of goods and services Inventories * 360 -------------------------------------Net revenue of goods and services Short term liabilities * 360 -------------------------------------Net revenue of goods and services Long-term liabilities ----------------------Equity Equity -------------Total assets Long-term liabilities ----------------------Total assets Total liabilities ----------------Total assets V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V ----V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V --V V ----V
Net revenue per company [mn RON] Total operating cost per company [mn RON] (including depreciation and amortization)
General indices Profitability ratios Liquidity ratios Financial cycles Financial leverage ratios
Total liabilities Operating profit coverage [years] ---------------------------------------ISIEmergingMarketsPDF ro-kpmg6 from 62.217.241.204 on 2013-08-29 09:02:34 EDT. DownloadPDF. Operating profit - Operating loss
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Definition of index
Average employment per company [person]
Number of employees -------------------------Number of companies Net revenue --------------Employment Wages + Social insurance & other contributions to employees ---------------------------------------------------------------------Total operating costs Fixed assets -----------------Employment Wages + Social insurance & other contributions to employees ---------------------------------------------------------------------Net revenue Material & energy costs ---------------------------Net revenue Net revenue -----------------Total assets Net revenue -----------------Fixed assets Wages + Social insurance & other contributions to employees ---------------------------------------------------------------------Employment Wages ------------------------Total operating costs Social insurance and other contributions to employees -------------------------------------------------------------Total operating costs External services ------------------------Total operating costs Material & energy costs ----------------------------Total operating costs Taxes & fees ------------------------Total operating costs V --V V --V V --V V --V V --V V --V V --V V --V V ----V V --V V --V V --V V --V V --V
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Forecasting models used in EconTrends have a hierarchical structure. The first layer consists of models that transmit behavior of macroeconomic variables like nominal GDP growth, increases in prices to the behaviors of financial parameters like net sales per company and EBIT margin in all analyzed economic divisions. EBIT margin should be understood as earnings before interest and taxes. The next layer of models translates the behavior of the above parameters in economic divisions into the groups within them, than into classess within groups and subclassess within classess. The econometric models that are used in respective layers have a linear structure and belong to a well known group of regression models.
Risk-profitability maps
Risk-profitability maps show the location of sectors depending on the value of profitability and risk they achieve. Sectors singled out by being encircled by a red ring are most useful efficient for investors, due to the relatively highest return at the lowest variability of profit (relatively high value of the Sharps index). On the basis of the coordinate values of efficient sectors, the preferences of investors on the market are shown by a grey dotted line visible on the graphs this is a level line of the linear function of utility for investors (Investors Utility Function). The level line shows preferences of the majority of investors with regard to achieved profitability at a given risk. Sectors, which are placed above the linear function of usefulness are preferred by investors due to the possibility of achieving a high profitability, at a particular level of risk. Sectors lying below the level line are not as attractive for investors, due to the relatively high variability in profit as against their profitability.
The forces map
The forces map shows decompositions of the profitability index into particular driving forces. The idea of the strengths map is to show the effect of particular variables on the dynamics of profit both in current and forecasted situation.
Concentration measures Several concentration measures are used to examine the degree of the market power concentration within the analyzed sectors. The are Herfindahl-Hirschman Index (known HHI), is apower measure of the size Several concentration measures used to examine the degree of as the market concentration of firms in relationship to the industry and an indicator of the amount of competition among them. It is within the analyzed sectors. defined as the sum of the squares of the market shares of each individual firm: ie the average market Herfindahl-Hirschman Index share, weighted by market share. As such, it can range from 0 to 10,000 moving from a very large amount of very small firms to (known a single producer. Decreases in the Herfindahl to index The Herfindahl-Hirschman Index as monopolistic HHI), is a measure of the size of firms in relationship the generally indicate a loss of powerof and an increase in competition, whereas imply industry and an indicator ofmarket the amount competition among them. It is defined increases as the sum of the the opposite. inof turn, isindividual a graph showing theaverage proportion of the distribution assumed by squares ofThe the Lorenz market curve shares each firm: ie the market share, weighted by market the bottom % market It 10,000 is used moving to represent shares distribution, it shows share. As such, it can share range values. from 0 to from amarket very large amount of very where small firms to a for themonopolistic bottom x% of companies in the sector, percentage of the indicate market share have. single producer. Decreases in the what Herfindahl index y% generally a lossthey of market The percentage of companies is plotted on the x-axis, the percentage of market share on the y-axis. power and an increase in competition, whereas increases imply the opposite. It is considered it to be a measure of inequality of the market shares within the given sector. The Gini coefficient is a measure of statistical dispersion in the market shares defined as the field between the Lorenz Curve diagonal and the Lorentz curve. It is defined as a ratio with values between 0 and 1. A low Gini The Lorenz indicates curve in turn, a graph showing the proportion of Gini the distribution theunequal bottom coefficient moreisequal market shares, while a high coefficient assumed indicates by more % market share values. It is used to represent market shares distribution, where it shows the distribution. 0 corresponds to perfect equality (all companies having exactly the same market for share) bottom x% of companies in the sector, what percentage y% of the market share they have. The and 1 corresponds to perfect inequality (where one monopolist has all the market share, while percentage of has companies is plotted on the x-axis, the percentage of market share on the y-axis. It is everyone else zero share in the market). considered it to be a measure of inequality of the market shares within the given sector.
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Gini coefficient
The Gini coefficient is a measure of statistical dispersion in the market shares defined as the field between the diagonal and the Lorentz curve. It is defined as a ratio with values between 0 and 1. A low Gini coefficient indicates more equal market shares, while a high Gini coefficient indicates more unequal distribution. 0 corresponds to perfect equality (all companies having exactly the same market share) and 1 corresponds to perfect inequality (where one monopolist has all the market share, while everyone else has zero share in the market).
Y/Y Increase, Y/Y Dynamics
Y/Y Increase, Y/Y Dynamics. Increases are calculated as absolute differences with respect to the preceding year (Y/Y). Dynamics are calculated as relative [%] differences with respect to the preceding year (Y/Y). Forecasts Forecasts presented in EconTrends for Romania relate to a period of two years ahead in relation to the end of the time period for which statistical data are available.
Distributions of Financials
Distributions of Financials present critical values of the distributions of various financials in the analyzed sector. The presented critical values represent quartiles of the empirical distribution i.e. they are calculated for 20%, 40%, 60% and 80% of the total population of companies from the given sector. These distributions make possible easy comparison of an analyzed company to other companies in the sector, looking at it from various financial angles.
DuPont Pyramid
DuPont Pyramid is a very useful tool to decompose Return on Equity (ROA) into various ratios like: Return on Assets (ROA), Return on Sales (ROS) and Total Assets Turnover (TAT). It enables easy drawing of conclusions about the efficiency of an analyzed company in various areas of its activity.
Market multiples (P/E, P/BV)
Market multiples (P/E, P/BV) - are widely used for the valuation purposes. Price to Earnings (P/E) is calculated by dividing closury company's capitalisation in the year after analysed year by the earnings (net profits) from the last year. For the calculation of Price to Book Value (P/BV) the ending year book value is taken.
Betas and Required Rates of Return
Betas and Required Rates of Return - are calculated for listed companies under CAPM model.
L
U
Cov R i , R M Var R M
- Leveraged Beta,
L
1 1 D E
Ri R f RM R f
R i
Ri
R M - 5Y expected rate of return of the stock market index (BET), R f - risk-free rate of return (of 12-month average Bucharest Interbank Bid Rate), D - debt to equity ratio, E
- effective tax rate.
- required (by investors) rate of return from investments in the shares of an analysed company; i.e. the expected rate of return when the market stays in equilibrium under CAPM assumptions, M - 5Y rate of return of a stock market index (BET),
Liquidity
Liquidity (of public company) - ranked accordingly to the averaged daily shares' turnover from the last year
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