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Hedging Highlights
Monbat group aims to triple the EBITDA in 5 years horizon reaching 75m EUR. This envisaged extensive growth will be driven by two concurrent paths, namely:
- Organic growth of the current business model by focusing on both market expansion and introducing a ‘hybrid go-to market’ approach, enabling production assembly activities in territories outside Bulgaria. This path will bring the group EBITDA to the level of 42m EUR, representing a 68% increase, which is close to the growth pace that Monbat exercised in the last five years
- Enforcing strategic projects, which drives both the scaling up of the existing business model as well as bringing completely new sources of margin - niche diversification in recycling and focused diversification in high power lithium-ion batteries. This path will inevitably bring sizable part of the indented overall growth
The intended strategic projects represent the foreseen EBITDA upside. Once, a strategic project is completely operationalised, it will be presented as part of the budget of the core business activities, e.g – this applies for the strategic acquisition of a recycling plant in Italy and its respective synergy benefits are already integrated in the overall budget of Monbat Group.
2017-2022 Five Years growth pace
| CORE BUSINESS - ORGANIC GROWTH | Measure | 2017* | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|---|
| Volumes | |||||||
| Batteries | Pcs | 2,549,914 | 2,922,684 | 3,332,640 | 3,715,894 | 3,868,175 | 3,950,000 |
| Lead & Alloy | MT | 46,562 | 48,888 | 58,215 | 60,129 | 60,527 | 60,736 |
| Economics & Ratios | |||||||
| Consolidated Revenue | EUR '000 | 166,477 | 167,000 | 198,213 | 218,329 | 224,672 | 227,478 |
| Consolidated Gross Profit | EUR '000 | 45,193 | 43,113 | 52,587 | 57,899 | 59,580 | 60,421 |
| Consolidated Gross Profit % | % | 27% | 26% | 27% | 27% | 27% | 27% |
| Consolidated EBITDA - organic business | EUR '000 | 23,400 | 27,098 | 35,586 | 40,090 | 41,419 | 42,048 |
| Incorporated EBITDA effect from the integration of Recycling Italy | EUR '000 | 4,000 | 6,500 | 6,500 | 6,500 | 6,500 | |
| Consolidated EBITDA % | % | 14% | 16% | 18% | 18% | 18% | 18% |
| EBITDA Organic growth rate | % | 16% | 31% | 13% | 3% | 2% |
| STRATEGIC PROJECTS | Measure | 2017* | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|---|
| Scale through acquisition | EUR '000 | 5,300 | 13,200 | 13,400 | 17,000 | 20,000 | |
| Niche diversification in recycling | EUR '000 | 2,000 | 3,400 | 3,700 | 4,200 | 5,000 | |
| Focused diversification in lithium-ion batteries | EUR '000 | -1,500 | 0 | 2,400 | 5,000 | 8,000 | |
| Strategic projects EBITDA | EUR '000 | 5,800 | 16,600 | 16,600 | 26,200 | 33,000 |
| PLANS | Measure | 2017* | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|---|
| MONBAT GROUP "BASE" PLAN | EUR '000 | 25,598 | 35,586 | 42,490 | 46,419 | 50,048 | |
| MONBAT "BEST CAN DO" PLAN | EUR '000 | 32,898 | 52,186 | 59,590 | 67,619 | 75,048 | |
| EBITDA accumulated growth pace | % | 41% | 71% | 21% | 20% | 18% |
*(un-audited)
Performance DriversThe core business budget is build on the following lead drivers, namely:
- LME 2 100;
- Recovering of the volume levels of 2016 during 2018 and re-gaining the volume growth from 2019 onwards. The 2018 volume growth in comparison with 2017 represents 15% planned growth;
- It is envisaged that L&A sells to third parties during 2018 will range between 10 and 15% to the overall planned production volumes;
- It is expected that the synergy benefits of the integrated recycling plant in Italy will bring incremental EBITDA increase;
- It is expected that EAS batteries will decrease the amount of group support for their operational expenses to 1.5m EUR by re-gaining some of the legacy business as well as achieving early commercialization of the new product range, which will be introduced to the market in Q4 2018.
Attached
2017-2022 Five Years growth pacexlsx21.14KB
26/11/2017