bears logistic center

BEARS LOGISTIC CENTERBEARS LOGISTIC CENTER

Kyiv 2007

ProjectProject««Building of network of specialized logistic centers Building of network of specialized logistic centers

for agricultural products storagefor agricultural products storage»»

Bears Food Ingredients ConcernBears Food Ingredients ConcernOrganizational structureOrganizational structure

President

Food Ingredientsbusiness

Commercial propertydivision

Commercial property divisionCommercial property division Organizational structureOrganizational structure

Director

Bears CenterLtd

PAPBSLtd

Bears Logistic CenterOJSC

Activity SpheresActivity Spheres• Building of industrial properties

• Managing industrial property (Cherkassy)

• Support function for main food ingredients

business

• Bears-Logistic is looking currently for

strategic partner (preferably international)

for common logistic project development

Bears-Logistic-Center

Strategy of project developmentStrategy of project development

Bears LogisticCenter

Ltd

Bears Logistic Cherkassy

Ltd

Bears Logistic Brovary

Ltd

Bears LogisticRovno

Ltd

Bears Logistic Zhitomir

Ltd

Bears Logistic Borispol

Ltd

Bears Logistic Odessa

Ltd

- Bears Logistic Center is planning to create a network of logistic centers Bears Logistic Center is planning to create a network of logistic centers - The first logistic distributive center in Kalinovka village (Brovarskoy district) with the - The first logistic distributive center in Kalinovka village (Brovarskoy district) with the total area for first stage of 7 000 sq meters will be launched in the fourth quarter 2007total area for first stage of 7 000 sq meters will be launched in the fourth quarter 2007- During the following four years we plan to place in operation about 6 500 sq meters of - During the following four years we plan to place in operation about 6 500 sq meters of warehouses per year in Zhytomyr, Boryspol and other directions warehouses per year in Zhytomyr, Boryspol and other directions - The total area of the centers will be 33 000 sq meters with investment amounting to - The total area of the centers will be 33 000 sq meters with investment amounting to $26 m during the next five years.$26 m during the next five years.

Strategy of project developmentStrategy of project development

Strategy of project developmentStrategy of project developmentProject calendar for 2007 – 2011

2008

2008

2009

2009

2010

2010

2011

2011

2007

2007 Putting office and storage facilities

complex into operation В-class5500,0 sq.mCherkassy

Construction of warehouse complexА-class

3500,0 sq.mBears Logistic Zhitomir Ltd


3500,0 sq.mBears Logistic Borispol Ltd




3500,0 sq.mBears Logistic Rovno Ltd


3000,0 sq.mBears Logistic Brovary Ltd




3500,0 sq.mBears Logistic Odessa Ltd





MarketingMarketingProportion of storage facilities

of A, B, C, D classes

MarketingMarketingTotal volume of storage facilities available

(A, B-class), sq. m

120000 160000225000

40500040 000

65000

180000

168000

0

100000

200000

300000

400000

500000

600000

Existing volume New offers

2005 2006 2007 2008

Technological descriptionTechnological description Compliance with the Compliance with the

requirements to A-class requirements to A-class warehouseswarehouses

Technological descriptionTechnological description Location in close proximity to main Location in close proximity to main

highwayshighways;; One-stored building, ceiling height 10 One-stored building, ceiling height 10

m and morem and more;; Concrete floors with anti-dust Concrete floors with anti-dust

surface;surface; Floor loading - Floor loading - 5,05,0 tones tones/1/1 sq sq..mm Column gridColumn grid– 12х18– 12х18 m m;;

Technological descriptionTechnological description Availability of office space.Availability of office space. No less than No less than 50% 50% warehousing areas warehousing areas

have special storage conditions for have special storage conditions for agricultural products.agricultural products.

Professional operator at agricultural Professional operator at agricultural wholesale marketwholesale market..

Company specialized in commercial Company specialized in commercial property managementproperty management..

Technological descriptionTechnological description Security system;Security system; Autonomous heat and water supply Autonomous heat and water supply

systems;systems; Backup power supply;Backup power supply; Automatic fire alarm and fire fighting Automatic fire alarm and fire fighting

systems;systems; Air conditioning and ventilation systems;Air conditioning and ventilation systems; No less than 1 dock per 500 sq. m of No less than 1 dock per 500 sq. m of

storage space. storage space.

Technological descriptionTechnological description Office and storage facilities complex in Office and storage facilities complex in

operation (Cherkassy)operation (Cherkassy)

Income and salesIncome and salesProject calendar for 2007 – 2011

2008

2008

2009

2009

2010

2010

2011

2011

2007

2007 Putting office and storage facilities

complex into operation В-class5500,0 sq.mCherkassy








3500,0 sq.mBears Logistic Rovno Ltd











Selling a part of warehouse А-class








Income and salesIncome and sales Sales revenue forecastSales revenue forecast

Item, USD 2007 2008 2009 2010 2011

Sales Revenue (managing company) 303 000 469 500 469 500 489 975 489 975

Rent (warehouses) 480 000 1 008 000 1 512 000 2 116 800

Rent (offices) 768 000 806 400 806 400 846 720

Revenue from warehouses disposals 3 500 000 3 500 000 3 500 000 3 500 000

Warehousing services (own warehouses) 120 000 252 000 378 000 529 200

Warehousing maintenance (for disposed warehouses) 18 000 75 600 178 605 333 396

Total Revenues, USD 303 000 5 355 500 6 111 500 6 864 980 7 816 091

Financial indicators, 000 USDFinancial indicators, 000 USD From From 2007 2007 to to 2011 2011 Revenue is constantly increase fromRevenue is constantly increase from 0,3 0,3 MUSD up to MUSD up to 7,8 7,8 MUSDMUSD. . Project show profit already starting from second year. In Y2008 Net Profit will be equal to Project show profit already starting from second year. In Y2008 Net Profit will be equal to 1,7 1,7 MUSD and in MUSD and in

2011 2011 will increase up to will increase up to 2,9 2,9 MUSDMUSD. . GPM during whole period is on very height level GPM during whole period is on very height level 58-65% - 58-65% - this is significant benefits for this project and this is significant benefits for this project and

underline the height investment attraction for this projectunderline the height investment attraction for this project EBITDAEBITDA indicator is constantly increase from 2.9MUSD in Y2008 up to 4.8 MUSD in Y2011indicator is constantly increase from 2.9MUSD in Y2008 up to 4.8 MUSD in Y2011 NOPAT will increase from 2MUSD inNOPAT will increase from 2MUSD in 2008 2008 up to 3.2 MUSD inup to 3.2 MUSD in 2011 2011

Capital investments and recurrenceCapital investments and recurrence At the end of Y200At the end of Y2006 6 the total fixed assets cost was equal to the total fixed assets cost was equal to 4,6 4,6 MUSD from MUSD from

which 3.5MUSD was share capital and 1.1MUSD – long term financingwhich 3.5MUSD was share capital and 1.1MUSD – long term financing Total investment forecast for 2007-2011 makes up 14.6 MUSD.Total investment forecast for 2007-2011 makes up 14.6 MUSD. The expected investments into fixed assets till the end of 2011 make up 13.5 The expected investments into fixed assets till the end of 2011 make up 13.5

MUSD. The rest 1.1 MUSD will be used as investment into WCMUSD. The rest 1.1 MUSD will be used as investment into WC The structure of capital: in 207 will consist from 5.8 MUSD of share capital and The structure of capital: in 207 will consist from 5.8 MUSD of share capital and

1.8 MUSD of long-term credits. in 2011 we expect to have 12.1 MUSD of share 1.8 MUSD of long-term credits. in 2011 we expect to have 12.1 MUSD of share capital and 2.5 MUSD of long-term credits.capital and 2.5 MUSD of long-term credits.

The suggested strategy will ensure the increase of payback on the invested The suggested strategy will ensure the increase of payback on the invested capital from capital from -0,5% -0,5% in 2007 to 22% in 2011.in 2007 to 22% in 2011.

Cash FlowCash Flow Positive Cash Flow are generated already started from Y Positive Cash Flow are generated already started from Y

20092009 Payback period fro investors with 2.8 MUSD investments will be Payback period fro investors with 2.8 MUSD investments will be

less then three yearsless then three years

Market valueMarket value The calculation of the Group’s market value is based on the Company strategy and discounted cash-flow. The calculation of the Group’s market value is based on the Company strategy and discounted cash-flow.

At the same time the company’s value is calculated based on EBITDA (starting from 2008) indicator with At the same time the company’s value is calculated based on EBITDA (starting from 2008) indicator with the estimation of averaged market value. By the end of 2007 the company’s market value will amount to the estimation of averaged market value. By the end of 2007 the company’s market value will amount to circa 7,5 MUSD USD and will continued grow up to 2circa 7,5 MUSD USD and will continued grow up to 244 MUSD till Y2011. MUSD till Y2011.

Calculation discounting rate – 12% (in compliance with the interest rate of loan capital).Calculation discounting rate – 12% (in compliance with the interest rate of loan capital). The market value will grow owing to the increasing trust of the market to the Group’s long-term strategy. The market value will grow owing to the increasing trust of the market to the Group’s long-term strategy.

By the end of 2011 the OJSC Bears-Logistic-Center Equity market value will make over 17.3 MUSD.By the end of 2011 the OJSC Bears-Logistic-Center Equity market value will make over 17.3 MUSD. There is possibility to revaluate FA taking into account assumption of premises price increase. At the end of There is possibility to revaluate FA taking into account assumption of premises price increase. At the end of

Y2011 even using current sales price the total FA value will be equal to circa 31 MUSD.Y2011 even using current sales price the total FA value will be equal to circa 31 MUSD. Thus will give us aThus will give us added value from Real Estate MV over 11 MUSD.dded value from Real Estate MV over 11 MUSD.

Project risksProject risks Lack or reduction of demandLack or reduction of demand.. Commercial risksCommercial risks.. Strategic risksStrategic risks.. Political risksPolitical risks.. Risks connected to goods supplyRisks connected to goods supply..

Shareholder benefitsShareholder benefits The Group’s financial indicators allow paying dividends The Group’s financial indicators allow paying dividends

at a level of 30% starting from Y2009 at a level of 30% starting from Y2009 Value added for the Group’s shareholders will equal to Value added for the Group’s shareholders will equal to

26.4 MUSD and will consist out of26.4 MUSD and will consist out of::• dividendsdividends – 1,7 – 1,7 MUSD MUSD;;• the increase of shares’ market valuethe increase of shares’ market value– 14,9– 14,9 MUSD MUSD;;• Added value from Real Estate MVAdded value from Real Estate MV – 9,8 – 9,8 MUSD MUSD..

Proposal for InvestorProposal for Investor and his and his benefitsbenefits

Investor entering schemeInvestor entering scheme.. We propose next scheme for investor entering:We propose next scheme for investor entering:Sales of 40% of OJSC Bears-Logistic-Center shares to investor in 3-rd Sales of 40% of OJSC Bears-Logistic-Center shares to investor in 3-rd quarter 2007 for amount equal to 2.8 MUSDquarter 2007 for amount equal to 2.8 MUSD by statutory fund increasingby statutory fund increasing

Managing Company OJSC Bears-Logistic-

Center100% - 7,0MUSD

Bears Logistic Zhitomir Ltd.

Bears Logistic Brovary Ltd.

Project Ownership Structure Scheme Y 2007.

Bears Logistic Boryspil Ltd.

Shareholder60% - 4,2MUSD

Investor40% - 2,8MUSD


Company Market Value in YCompany Market Value in Y 2011. 2011.

Managing Company OJSC Bears-Logistic-

Center100% -

30,9MUSD

Bears Logistic Zhitomir Ltd.

Bears Logistic Brovary Ltd.

Project Ownership Structure Scheme Y 2011.

Bears Logistic Boryspil Ltd.

Shareholder60% - 18,5MUSD

Investor 40% - 12,4MUSD


Sales Revenue Sales Revenue 2007-20112007-2011

-259

1 7201 951

2 336

2 874

688 780934

-104

1 150

-500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2007 2008 2009 2010 2011

Total Sales Revenue

Investors benefits


Value added for the Investors will equal to Value added for the Investors will equal to 10,5610,56 MUSD and will consist out ofMUSD and will consist out of::• dividendsdividends – 0,68 – 0,68 MUSD MUSD;;• the increase of shares’ market valuethe increase of shares’ market value– – 5,965,96

MUSDMUSD;;• Added value from Real Estate MVAdded value from Real Estate MV – – 3,923,92 MUSD MUSD..

Proposal for InvestorProposal for Investor and his and his benefitsbenefits – – Construction firmConstruction firm

Within the bounds of this project the Construction Within the bounds of this project the Construction firm is offered to become a Co-investor of the firm is offered to become a Co-investor of the “Bears Logistic Center” Project.“Bears Logistic Center” Project.

The Investor is offered to become a prime The Investor is offered to become a prime contractor of construction works of all other contractor of construction works of all other posterior projectsposterior projects..

The potential Investor is offered to enter the The potential Investor is offered to enter the

Project withProject with 40% 40% by means of supplementary by means of supplementary emission at the rate of emission at the rate of 2 800 2 800 MUSDMUSD. .


Additional benefit of the shareholder – prime Additional benefit of the shareholder – prime contractor since contractor since 20072007 till till 2011 2011 will amount will amount to to 5,3 5,3 MUSDMUSD

350000 300000 300000 300000 300000

840000

720000 720000 720000 720000

0

200000

400000

600000

800000

1000000

1200000

1400000

2007 2008 2009 2010 2011

Benefits of the main worksBenefits of main contract works


In 5 years the Investor – Construction firm will collect an In 5 years the Investor – Construction firm will collect an extra income amounting to extra income amounting to 15 830 15 830 MUSDMUSD ( (includingincluding 680680 USD USD as dividends and as dividends and 55 270 270 MUSDMUSD as a profit on as a profit on implementation of building and construction worksimplementation of building and construction works).).

Development strategy for Development strategy for 20120122--20162016

Network of specialized logistic centers in whole Ukraine Network of specialized logistic centers in whole Ukraine developmentdevelopment

Project Calendar 2012 – 2016.

2013

2013

2014

2014

20152015

2016

2016

2012

2012 Construction of warehouse complex

А-class3000,0 sq.m

Bears Logistic Kharkiv Ltd


3000,0 sq.mBears Logistic Donetsk Ltd


3000,0 sq.mBears Logistic Dnepropetrovsk Ltd


3000,0 sq.mBears Logistic Odesa Ltd


3000,0 sq.mBears Logistic Lviv Ltd

Development strategy for Development strategy for 20120122--20162016

Till the end of Till the end of 2016 2016 Bears Logistic Center Bears Logistic Center plans to build minimum 30 000 sq.m of plans to build minimum 30 000 sq.m of warehouses and 3 000 sq.m of office space warehouses and 3 000 sq.m of office space in regional centers of Ukraine. in regional centers of Ukraine.

At the same time turnover will grow up At the same time turnover will grow up over 15 MUSD over the yearover 15 MUSD over the year

Company Market value will grew up till Company Market value will grew up till 2016 over 50 MUSD2016 over 50 MUSD

bears logistic center

Documents

logistic cherkassy

logistic borispolltd

logistic odessaltd

logistic centerkyiv

mbears logistic borispol

mbears logistic brovary

mbears logistic zhitomir

mbears logistic odessa