EFTA00611514.pdf

STRICTLY PRIVATE AND CONFIDENTIAL Preliminary information document ILAPAK Contents Important Note 2 Finance sought 2 Return to investors 2 Background to ILAPAK 2 Group structure 3 Executive Board 4 Need for financing 4 Financial overview 5 Prepared by: GGL Date prepared: 22 July 2011 Page 1 EFTA00611514 STRICTLY PRIVATE AND CONFIDENTIAL Important Note The information contained in this information document is preliminary only, has not been audited and is not intended for any other use than providing some background to the ILAPAK Group. A more detailed document with supporting audited financial statement figures, and forecast financial data will be available from 29th July 2011. Finance sought The ILAPAK Group is seeking Euro 8m in the form of non-voting preference shares, a corporate bond or similar. ILAPAK is looking to arrange this cash injection within the next 4-6 weeks to ease the pressure on suppliers and return our main factory to full operational efficiency following period in which the suppliers have found their own working capital stretched beyond normal operating levels. Return to investors ILAPAK is a strong stable business with an excellent underlying cashflow profile from spare parts and services, as well as a strongly cash positive cycle for machinery sales (90% of cash received before delivery). ILAPAK is looking to return regular interest and capital payment over a period of 8 years with an interest rate that is consistent with the current market. ILAPAK is prepared to pay a reasonable market based premium on the interest rate to an investor capable of agreeing a package in the timescale proposed. With a forecast EBIT of 4-5% on Euro 100m in 2011 and revenues that have returned close to their pre- crisis levels, and ILAPAK's brand within both the Food and non-food industries remaining strong. The ILAPAK Group order book is at record levels and order-taking continues to remain high each month. Background to ILAPAK • A Swiss group and a leading brand packaging machinery group across the world • Established over 40 years ago, family owned, professionally managed business • Major blue-chip customers include: Unilever, M, Masterfoods, Northern Foods, Kraft, etc • Turnover Euro 100m for 2011, with a 3-6 month lead-time on most product • Expected 2011 EBIT 4-5%, with significant EBIT growth forecast increasing to 8-10% in 2012, 2013 and onwards. Prepared by: GGL Date prepared: 22 July 2011 Page 2 EFTA00611515 STRICTLY PRIVATE AND CONFIDENTIAL • Approximately 40% growth since crisis of 2009, to return to pre-crisis levels of turnover • New products launched at Interpack 2011 in May 2011, are being adopted by customers already • Food customers 80% Non-food customers 20% • 12 sales, service and part subsidiaries around the world • 5 production facilities totaling about 20,000 square meters of covered space, each a centre of excellence: - Lugano, Switzerland - Arezzo, Italy - Lang Fang, China - Rogers, Arkansas, USA - Charlotte, North Carolina, USA Group structure GROUP LEGAL ENTITIES' STRUCTURE (AS OF JUNE 15TH 2011) Tran•WOrldPitli•ONIO 11010184. IV MINA Sp. eoo. MPS O14•n10. Ills* —Is OS IPS",INNI be elielt NOD OA 110•110•1•111 ISINstielliast @floe a% •••••• (taelo1 Was Son.o. nu* Nal. 0.0••• 00••••••1 —Pala •••E ...yarn) Padre.Malay LS assts. Daigle 1.644.sileas Poo.* SIGon B. NYP P.M Ind IN Vorni..▪▪...▪ ••••••• Prepared by: GGL Date prepared: 22 July 2011 Page 3 EFTA00611516 STRICTLY PRIVATE AND CONFIDENTIAL Executive Board Members of the Board of Executive Management Name Lu-oaraa &art.!. Michaul Dann S019,0 P.t4}a, G-a<o-no Orland] Member nce 1991 199$ 7007 7008 Naonality IT GB CH IT Educatea and Unneroty degree University6pin Degree in Downey degree proasuonal in mechanical in mechanical mechanical es economics end background weameang and enginerning and engineering MBA MBA MBA Board haxtion PrealleaUCLO Commercial Manufactueng CIO Director Director Mate. for the as as Yes No Int 3 yews Business None None Non* None atheist** Mandate No No No No agreement worth Gareth NV Functions in 1.1•Teer of the None None President of institutional Board 04 Italian Italian Associaton associations Associatton of Corporate of Packaging Treasurers Mainers Manufacturen Need for financing The ILAPAK Group successfully manoeuvred it way through the start of the 2008/2009 financial crisis, with revenues dropping approximately 35% year on year. The ILAPAK Group board took decisive action in compensating for this dramatic fall in revenues with a substantial cost cutting programme which allowed the Group to break-even in 2010. Following 2009 ILAPAK's financial resources were stretched, and with the cash inflow cycle to the factories loaded towards the end of the year, ILAPAK's suppliers are typically increasingly stretched toward the third quarter of every year. The Group's treasury team has been carefully managing the cashflows of the business throughout this recent period, however in the last couple of months a temporary unexpected production issue caused deliveries from one of ILAPAK's factories to slow for a two month period. This in turn has meant ILAPAK's credit with suppliers has increased and the suppliers are now finding it difficult to maintain their working capital needs as their own credit facilities have shrunk in the current financial climate. The financing ILAPAK is seeking will allow the Group to avoid the risk of disruption to production output due to supplier shortages, and return to a healthy level of cashflow in 2011 and beyond. Prepared by: GGL Date prepared: 22 July 2011 Page 4 EFTA00611517 STRICTLY PRIVATE AND CONFIDENTIAL Financial overview Group turnover 2005-2011 on. 80.000 70.000 ,s -''**•%,.4%,.,.............. ..• 0.." 0u.050 000 10 000 ''Jy.sie yet: 30.000 —it Sirvice: 10 000 10 000 2005 20)6 2007 2003 2000 2313 2012 A more detailed financial overview will be available from 29th July 2011 Prepared by: GGL Date prepared: 22 July 2011 Page 5 EFTA00611518