Sygnity Sa · GPW:SGN
Sygnity Sa — ComputerLand — KBC conference, London, March 9, 2007
29 slides from Sygnity Sa's conference presentation, Mar 9, 2007
Slide 1: Merger Presentation
Merger Presentation KBC conference, London, March 9, 2007
Slide 2: Disclaimer
Disclaimer The present study has been prepared only for information purposes. It does not constitute an advertisement or offer for securities in public trading. It uses sources of information that ComputerLand S.A. and Emax S.A. have acknowledged as reliable and exact, however it is not represented
Slide 3: Polish IT market
Polish IT market • 2006 another banner year, with IT spending in Poland jumping by > 14% to PLN 6.5 billion • IT market expected to continue to grow at double digit rate through 2010 • IT market benefiting from the migration of manufacturing into Eastern Europe • Privatization and the new regulatory
Slide 4: Polish IT market growth compared with trends in Western Europe
Polish IT market growth compared with trends in Western Europe Software and IT services market growth in Software and IT services market growth in Western Europe 2005-2010E (Billion EUR) Poland 2005-2010E (Billion EUR) 250 3,5 CAGR 3 CAGR 200 5.8% 2,5 12.8 150 2 % 100 1,5 1 50 0,5 0 0 2005 2010 2005
Slide 5: IT Software and services market volume and CAGR 2006/2010
IT Software and services market volume and CAGR 2006/2010 (in MEuro) 8000 30% 7000 25% 6000 20% 5000 4000 15% 3000 10% 2000 5% 1000 0 0% Czech Republic Hungary Slovakia Poland Romania Russia 2006 2010 CAGR06/10 Page 5
Slide 6: Largest IT companies listed on the WSE
Largest IT companies listed on the WSE 2006 consolidated results /unaudited/: PLN m sales EBIT net profit market share1 Prokom Software 1.689,4 151,9 88,0 19,0% Asseco Poland /+Softbank/2 832,0 95,2 95,9 9,8% ComputerLand 773,4 14,8 2,9 9,1% Comarch 491,7 46,1 53,0 5,8% Emax Group 439,9 11,8 5,6 5,2
Slide 7: Polish IT consolidation – reasons and current processes
Polish IT consolidation – reasons and current processes 2 500 Top IT services and software companies in Poland by revenues (PLN m) 2 000 1 500 2 175 1 000 1 688 513 492 1 218 1 215 500 351 852 832 605 0 Source: Teleinfo 500/Rzeczpospolita 05.10.2006 for non-public companies; IVQ 2006 consolidated re
Slide 8: ComputerLand snapshot
ComputerLand snapshot • Key references H1 H • Banking: ComputerLand (PLN m) 2006 22006 2006 – National Bank of Poland Revenues 332,7 440,7 773,4 – BPH BANK (HVB - UniCredito) – BZ WBK (AIB) EBIT -9,8 24,6 14,9 – Kredyt Bank (KBC) Net profit -14,3 17,2 2,9 • Power sector, industry and trade: – ENEA –
Slide 9: Emax snapshot
Emax snapshot • Key references Emax (PLN m) 2006 • Banking: – PKO BP SA Revenues 439,9 – GE Money Bank SA – Raiffeisen Bank EBIT 11,9 • Power sector, industry and trade: Net profit 5,4 – Polish Power Grid – KGHM SA – Panopa Logistic • Telecom: – TP SA (FT) Sales structure by key sectors in 2006 Powe
Slide 10: Reasons to merge
Reasons to merge • Two of the largest “independent” domestic IT services companies with long histories of complex and successful projects • Both companies put strong emphasis on sector expertise as a key success factor • Significantly complementary market offer (in particular in the energy, banking
Slide 11: New value to clients and stronger market position
New value to clients and stronger market position Offer Clients • ENEA • Billing • Polish Power Grid • Systems for energy • Vattenfall Power sector, • Power grid • Energa industry and trade trade and metering • Energia Pro information system • BOT • Enion • NBP • PKO BP • Transaction systems • Banki
Slide 12: Merger Plan
Merger Plan 26th of May 2006 Announcement of the merger intention 27th of July 2006 Approval from antitrust regulator 11th of September ComputerLand reaches 33% of votes in Emax (12,1% in equity) 2006 20th of September ComputerLand reaches 65% of votes in Emax (36% in equity) 2006 Achieved 24th of O
Slide 13: Post-merger strategy
Post-merger strategy • Sector focus accompanied by extensive industry knowledge and expertise • Long-term client relationship based on the delivery of full scope of services – from consultancy through implementation to outsourcing • Focus on in-house software solutions complemented by universal pack
Slide 14: Strategy realised in particular sectors
Strategy realised in particular sectors (values in M PLN) Banking Telecom – Strong client base in s – Sales to the FT group Poland (KSP. NPT, – Know-how in Convergence) centralised systems – Growing revenues – Extensive product offer 300M 120M from mobile operators – Foreign sales – EU and Eastern m
Slide 15: Clear management goals
Clear management goals Achievement of operating profitability of 8%+ in 2008 by: • Maintaining revenues at stable level • Consolidating own solutions in sales structure • Maintaining the speed of restructuring processes Page 15
Slide 16: Market position: Banking & finance
Market position: Banking & finance • Market drivers Polish B&F IT market 2006E (PLN bn)1 – Major sources of demand: introduction of new banking products, Basel II, cost cutting – Changes in banking law are opening the 2,25 market to outsourcing initiatives – Integration of new banking groups – New m
Slide 17: Market position: Telecoms
Market position: Telecoms • Market drivers Polish Telecom IT market 2006E (PLN bn)1 – New Generation Network (NGN, DVB) – Strong competition – the fight for new customers 1,88 • Company expertise – Group of specialized products created on the basis of line inventory systems, a source of stable reven
Slide 18: Market position: Utilities
Market position: Utilities • Market drivers Polish Utilities IT market 2006E (PLN bn)1 – Deregulation, consolidation and privatization in the power electricity and gas distribution 1,27 • Company expertise – New version of in-house multimedia billing system – Successful implementation of a Network E
Slide 19: Market position: Public
Market position: Public • Market drivers Polish Public IT market 2006E (PLN bn)1 – Forthcoming projects financed from Schengen Funds – Border Protection (SIS II), Police, Ministry of Justice – Continued EU funding for Poland 3,01 – The development of the information society in Poland • Company exper
Slide 20: Market position: Healthcare
Market position: Healthcare • Market drivers – Annual sector IT spending ca. PLN 120 m with high growth potential – Limited competition: Spin (Prokom subsidiary), Kamsoft, Alma. – Prospective RUM (national medical service registration) system worth PLN 500-800 m. • Company expertise – ComputerLand G
Slide 21: Key areas of synergies
Key areas of synergies Revenues synergies: Cost synergies: • Intensification of sales, • Rationalisation of the range of own and in particular exploitation Dane of thew tyś PLN products offered podane strong position of the merged • Centralisation of software production companies in selected sectors
Slide 22: Assessment of synergies
Assessment of synergies in PLN 000’s 2006 2007 2008 2009 2010 Total Revenues 0 35,075 46,453 51,908 44,189 177,625 Dane podane w tyś PLN Additional margin 0 7,300 10,064 11,273 9,875 38,512 Implementation 0 (1,992) (6,644) (6,644) (6 644) (21,924) Management Board 0 (3,965) (7,811) (8,111) (8,410) (
Slide 23: Financial results of ComputerLand S.A. (excluding Emax S.A.)
Financial results of ComputerLand S.A. (excluding Emax S.A.) ComputerLand H1 2006 H2 2006 2006 2005 Change in % (in PLN M) Net revenues 332,7 440,7 773,4 858,1 -9,9% Operating -9,8 24,6 14,8 34,1 -56,6% profit Net profit -14,3 17,2 2,9 11,5 -74,7% Page 23
Slide 24: Financial results of Emax S.A.
Financial results of Emax S.A. Emax 2006 2005 Change in % (in PLN M) Net revenues 439,9 381,6 15,3% Operating 11,8 29,6 -60,1% profit Net profit 5,4 19,3 -72,1% Page 24
Slide 25: Proforma results of ComputerLand Group for 2006
Proforma results of ComputerLand Group for 2006, including the results of Emax Group for 2006, as if the acquisition had taken place on 1 January 2006 Cons. CL-Emax 2006 CL Group Emax Group 2006 exclusions Group according according to adjustments to CL Emax Group for variations Group accounting in a
Slide 26: Computerland S.A. and Emax S.A. – 2006 proforma sales by sectors
Computerland S.A. and Emax S.A. – 2006 proforma sales by sectors in PLN M General Banking & Finance 317 Banking and Business (energy, Finance GB (energy, industry, 356 26% industry, trade) trade) 29% Telecomunication 115 Public sector 393 Healthcare 31 Total proforma 1 Healthcare 3% revenues 203* Te
Slide 27: Effects of CoLorado project in 2006
Effects of CoLorado project in 2006 • Project - based organizational structure – savings PLN 4,9 mln – Change into project – based structure (8 domains and projects bureau instead of 22 competences centers); new assignments for production and implementation employees, efficiency measures, pilot impl
Slide 28: Summary – merger benefits
Summary – merger benefits • For shareholders: – Improving the general strategic position of the Company by increasing its critical mass and scope of activities – Strengthening the Company’s market position in certain sectors through cross-selling – Continued improvement of the Company’s operating ef
Slide 29: General market info
General market info ComputerLand Emax ISIN PLCMPLD00016 ISIN PLEMAX000011/CT Ticker CPL Ticker EMX RIC COMW RIC EMXX Stock market WSE Stock market WSE ComputerLand SA Emax SA Al. Jerozolimskie 180 ul. Towarowa 35 02-486 Warszawa 61-896 Poznań Poland Poland Contact person: Contact person: Joanna Wier