INVESTMENT OPPORTUNITY PRESENTATION€¦ · Turnover thousand RUR 2 949 298 thousand USD 97 104 Net...
Transcript of INVESTMENT OPPORTUNITY PRESENTATION€¦ · Turnover thousand RUR 2 949 298 thousand USD 97 104 Net...
INVESTMENT OPPORTUNITY
PRESENTATION
ОАО «ГАЗМАШ» (OJSC GAZMASH)
September 2013 www.gasmash.ru
ГАЗМАШ
About the company
OJSC Gazprom is considering attraction of the
strategic investor for the purchase of 99.99% of shares
of OJSC Gazmash
OJSC Gazmash is the leading Russian
manufacturer of the domestic kitchen stoves,
controlling 25% of the Russian market. It also
manufactures the accessories for gas appliances. The primary objective of OJSC Gazmash is
producing the products which meet consumers demands in
terms of the quality, design and price.
OJSC Gazmash was founded in 1992 and used the
gas appliances production assets previously owned by the
gas group Gazprom.
As of today, OJSC Gazmash consists of the
headquarters in Moscow and three production facilities – in
Chaikovskiy, Votkinsk and Balakirevo (Vladimir region).
Furthermore, OJSC Gazmash is the sole shareholder of
Kanevskoy Gas Equipment Plant Ltd. (Krasnodar
Territory). It also holds the majority (84.6%) of the shares
of Volgogazapparat, Ltd. (Volgograd).
The headquarters of the Company are located in Moscow.
ГАЗМАШ
Economic indicators
Key financial indicators of OJSC Gazmash, 2012
Production output – domestic stoves
(Company Gazmash) thousand pc. 568
Turnover thousand RUR 2 949 298
thousand USD 97 104
Net assets thousand RUR 2 840 978
thousand USD 93 537
Net liabilities thousand RUR -207 066
thousand USD -6 818
EBITDA thousand RUR 120 913,7
thousand USD 3 981
Net profit thousand RUR 48 317
thousand USD 1 591
Source: Company data
ГАЗМАШ
Economic indicators
Source: Company data
Key indicators of solvency and financial stability of OJSC
Gazmash for 2012
The Company is characterized by high solvency and liquidity. Current assets of the
Company are in line with the absolute financial stability, i.e. they are secured by their own capital
sources. The liquidity ratios considerably exceed the standard indicators. The share of the most
liquid assets – immediately available funds and their equivalents – is 12.8% of the total assets of
the Company.
INDICATORS Standards At the
beginning
of 2012
At the end
of 2012
Current liquidity ratio >2 8.6 11.8
Instant liquidity ratio >=1 5.8 7.6
Functioning capital maneuverability ratio 0.5-0.2 0.4 0.4
Equity-assets ratio (financial independence) >=0.4 0.94 0.95
Current assets coverage ratio >=0.1 0.88 0.91
ГАЗМАШ
Position of OJSC Gazmash in the domestic gas and electric appliances market
OJSC Gazmash and its branches promote the following production
lines in the market:
Brand Production line Price range
gas stoves, electric stoves, dual-fuel freestanding
stoves average, above
average
built-in appliances, cooktops and ovens below average,
average
countertop stoves economy
gas grills economy
air purifiers economy
gas stoves, electric stoves, combined electric and
gas fixed stoves economy
Hearth gas stove economy
countertop stoves economy
gas and electric freestanding stoves economy
countertop stoves economy
Очаг single-burner gas stove economy
mobile homes economy
Source: Company data
More than 90% of the products belong to the domestic kitchen category.
OJSC Gazmash has been successfully expanding its production line. Currently, the Company is negotiating a
contract for the OEM production of the kitchen purifiers of the Darina brand.
ГАЗМАШ
Position of OJSC Gazmash in the domestic gas and electric appliances market
OJSC Gazmash and its subsidiaries manufacture
about 55% of the total number of the locally produced
domestic stoves
Type
Total output of the
domestic freestanding
stoves in the Russian
Federation
Participation share of Gazmash
Group, as compared to the local
manufacturers of the domestic stoves
thousand pc. thousand pc. %
Gas stoves 549,00 438,20 80%
Electric stoves 379,50 74,04 19,5%
Total 928,50 512,24 55%
Source: Company data, except for the countertop stoves and built-in appliances.
Gazprom Group has been holding the strongest position in the economy
price range. The participation share of the Company in terms of the
freestanding gas stoves production, as compared to other local
manufacturers, is up to 80%.
The Holding Company Gazmash has been maintaining the stable and
strong position in this sector for decades, regardless of the increasing
competition.
ГАЗМАШ
Market potential
The estimated capacity of the Russian market is about 2.5-3 million pc.
The share of the Russian companies in the market is 41%. The share of the foreign
companies is 59%. The participation share of OJSC Gazmash is 25% of the total
stove market.
The capacity of the given market is expected to exceed 4.07 million pc. by 2020. It
is related to the anticipated commissioning of more than 770 million m2 of
residential properties, increasing number of the replaced stoves resulting from the
post-crisis demand recovery. Moreover, the demand for the Russian products in
CIS and other neighboring countries (Kazakhstan, Ukraine, Kirgizia, Mongolia,
etc.) is on the rise.
The structure of the Russian domestic freestanding stoves market in 2012
ГАЗМАШ
Market potential
The principal competitors are the products of the
following brands: Gefest (Belarus), Hansa (Poland), Greta
(Ukraine), Indesit (Italy), Electronicsdeluxe (Russia,
Penza).
The pace of the import growth has slowed down due
to the ongoing fall of the RUR against EURO and USD,
while EURO and USD experienced a rise by 6.2% and
7.7%, correspondingly, as compared with the beginning of
the year. It resulted in rising cost of the imported products.
According to the expert opinion, the national average
increase of the prices for the imported products constitutes
10%, causing the replacement of the imported products with
the domestic ones.
Furthermore, the slow growth of the actual
household income and the reduced consumer lending
figures, which dropped from 35% in 2011 down to 20% in
2012, also affected the dynamics of the market
development.
Consequently, the demand leans towards the
cheaper Russian products featuring the same quality as
the imported ones, i.e. the products offered by OJSC
Gazmash.
ГАЗМАШ
Marketing
channels
The products of OJSC Gazmash are available virtually in all the regions of the Russian Federation: Central Region, Ural, Volga Region, North of Russia. The market of the Far East region is being actively explored.
The products are sold through the following networks: 1. Stores and dealers. Numerous contracts with the largest retail networks of the electronics and domestic appliances in Russia are being negotiated. Thus, the contract with M.Video, the federal hypermarket network, has been signed. During the last 8 months, the large retail networks purchased 26.9% of the products of the Company , as compared with 20.4% in 2012. 2. Nationwide programs
Gazmash has been actively cooperating with the government agencies in various constituent regions of the Russian Federation, including Moscow and St. Petersburg, within the framework of the nationwide Gasification Program. The Company also participates in the social programs assisting the low-income population groups (WWII veterans, elderly and underprivileged individuals) in replacement of the gas equipment. More than 55,000 stoves were supplied in 2012 under the social programs. 3. Construction organizations. Construction organizations purchase the stoves meeting their specifications and price expectations for the newly built residential and commercial properties intended for further commissioning (sale).
ГАЗМАШ
Production activity: General information
The production facilities of the Company for
manufacture of the stoves are located in those regions
of the Russian Federation which are characterized by
the high sales potential and well-developed
infrastructures facilitating the timely delivery of the
products.
1. Krasnodar Territory – 5.3 million people 2. Perm Territory – 2.6 million people
3. Volgograd Oblast – 2.6 million people
ГАЗМАШ
Production activity: General information
For the last 20 years OJSC Gazmash has been continually
improving the quality of its products. The company has cooperation agreement with REMSO Group
(Belgium) since 1995, using their enameling materials for the stoves (frit,
primer).
Within the framework of continuous improvement of the quality of its
products, OJSC Gazmash concluded a long-term contract in 2000 with FERRO
Group of Companies (USA) for the supply of the enameling materials.
In 2005, OJSC Gazmash signed agreement on cooperation with the
leading international suppliers and entered in a contract with Mondragon
Corporation (Spain) for the supply of the state-of-the-art accessories for the
electric, induction and gas stoves.
The investments of OJSC Gazmash are spent mainly on the expansion of the production potential of the plant. The Company signed a contract with Sipama (Italy) and purchased the advanced equipment for the production of the stoves with standard dimensions 60x60cm intended for the Southern Federal District of the Russian Federation where the stoves of the given dimensions are in high demand.
The high quality of the products is supported by the following:
- maintaining the market position;
- use of IQNet, the global certification mark;
- right to use ACCREDIA, the certified quality management mark;
- ISO 9001 certificate; - processing OEM orders at the facilities.
ГАЗМАШ
Production activity: Facility specific information
Chaikovskiy Gas Equipment Plant, which is the branch of OJSC Gazmash, is the only domestic stoves manufacturer
in Russia that has been constructed after Perestroika without attracting foreign investments.
The facility is equipped with the modern production equipment of the leading European brands (Binelli Italy, GEMA
Switzerland, and Brandt France). It produces a wide range of domestic gas, dual fuel (combined) and electric stoves under a popular
Darina brand, which is one of the leading brands in terms of sales.
On January 23, 2013 officials of IQNet, the international certification network (Bern, Switzerland) presented Chaikovskiy
Gas Equipment Plant with the quality management certificates confirming that the quality management system implemented at the
facility complies with the requirements of ISO 9001:2008 and GOST ISO 9001-2008, as applied to the design, production and
servicing of the gas, electric and combined stoves, as well as various models of the built-in kitchen appliances of the Darina brand.
Chaikovskiy branch of OJSC Gazmash manufactures domestic freestanding stoves (gas (19 models), electric (10 models),
combined and electric gas (8 models)), built-in electric broilers, cooktops, countertop gas grills and convectors. The facility features
the extensive production line with a wide price range from the cheapest models to the models with the price above average. The most
expensive model is the electric stove with glass-ceramic surface D ЕС 141 609 W. The sale price of the given model varies within
the above-mentioned average price range.
All the products manufactured by Chaikovskiy branch of OJSC Gazmash meet the requirements of a contemporary
Russian consumer, they have all the functional features and a modern design.
Furthermore, the facility manufactures the accessories and materials for domestic stoves, such as gas burners, table grids, powder
enamels, etc.
ГАЗМАШ
Production activity: Facility specific information
Kanevskoy Gas Equipment Plant became a branch of OJSC Gazmash in 2007. It was reequipped within
the framework of the investment program (2009-2012) and manufactures a wide range of stoves of economy class
under the Flama brand. New production facilities (Nordson Deutschland GmbH) used for the treatment of the metal
surface and enamel coating of the components were commissioned in 2013. The warranty period for Flama domestic
stoves has been increased up to 5 years as a result of the improved quality of the products.
Kanevskoy Gas Equipment Plant Ltd. manufactures domestic freestanding stoves under the Flama brand
(gas (15 models), electric (4 models) and gas-electric (5 models), floor (2) and table (2) models of the stoves, as well
as single-burner gas stoves (Ochag brand). Kanevskoy Gas Equipment Plant Ltd. has been manufacturing the gas and
electric stoves since 2012, meeting the requirements of the construction agencies. The given type of stoves has a
simplified design and minimal functionality. The price range of Flama stoves is low and lowest plus. The possibility
of moving up to the next price range is being reviewed at the moment.
ГАЗМАШ
Production activity: Facility specific information
Volgogazapparat Ltd. has been a branch of OJSC Gazmash since 1993. Close attention to the quality and
expansion of the product range, reliability and service life of the products made such brands as Lada and Lada-Lux the
most popular trademarks in the lowest price range.
Volgogazapparat Ltd. specializes in production of the domestic gas and electric stoves of economy class
manufactured under the Lada brand .
The products manufactured by Volgogazapparat Ltd. meet the demand of people with low-income and
construction companies.
ГАЗМАШ
Production activity: Facility specific information
Votkinsk branch of OJSC Gazmash was opened in 2007. It is located at the site of the Votkinsk Gas Equipment Plant. The plant
has been manufacturing low-budget gas stoves since 2007. The facility is equipped with the locally manufactured machinery. The
products manufactured by the Votkinsk branch in partnership with Chaikovskiy branch are represented exclusively by the models of the
gas stoves within the lower price range of the Darina production line .
Mobile homes (trailers) of 7 different types (air-conditioned hostel, site office, bath house with sauna, etc.) are also manufactured at this
facility.
Mobile home layout Hostel with 8 beds (length 9m, width 2.5m)
Design – north style (on the frame/chassis/sledge)
ГАЗМАШ
Production activity: Facility specific information
Balakirevo branch of OJSC Gazmash was opened in 1993 at the production facilities of Balakirevo mechanical plant which is
one of the largest military and industrial complexes. It became a leading manufacturer of the accessories for the domestic gas appliances
in Russia and CIS: gas valves, thermostatic gas valves, automated gas valves, flame control devices, gas burner nozzles, magnetic valves,
thermal couples and bellows. The facility features the equipment of the following brands: SIT, OPI, Merloni Progetti (Italy), Raspe &
Paschen (Germany).
Balakirevo branch of OJSC Gazmash has been consistently working on upgrading the quality of its products.
For this purpose it has been using, among others:
−the modern pipe provers (ATEQ, France);
−3D modules for controlling the geometrical parameters of the gas valve components (Zeiss, Germany);
−multipurpose testing machine for determining the strength and deformation properties of the supplied brass mill products,
which ensures the consistent quality of the produced stove accessories.
ГАЗМАШ
Investment potential
- available cash assets (more than 200 million RUR);
- vacant production premises (45.4 thousand m2 intended to be used for the assembly of the
gas and electric stoves and as the finished products warehouse);
- available backup energy (4 700 thousand kWh) and gas (3 217 thousand m3)
consumption;
The assets of OJSC Gazmash have very high potential for
development.
- vacant land plots (industrial) available for the expansion of the production facilities (3.1 ha);
ГАЗМАШ
Staff
Over the last 10-15 years there have been significant changes in the target
market of the products manufactured by OJSC Gazmash. The market has become more
competitive with increased investment capacities. During the times of economic crisis, a
number of Russian plants went bust or found themselves on the verge of bankruptcy,
including Omsk Gas Equipment Plant, OJSC Kazan Gas Equipment Plant, JSC Lysvensk
Metallurgical Plant. Meanwhile, more than 45 years of experience in the domestic gas
appliances manufacturing, highly qualified management and a professionally recruited
team enable Gazmash to:
- maintain its position in the gas stoves market in unstable economic conditions;
- develop the alternative sales channels;
- reduce the operating costs and increase the overall performance due to the anti-
recessional policy timely developed and implemented at OJSC Gazmash.
Amidst the critical shortage of the highly skilled human resources, OJSC
Gazmash managed to keep its staff.
In 2012, the average staff number was 2,214 employees (75% of the staff are
involved in the production). The staffing level of the company at the end of 2012 was
90% (against the background of staff shortage in the industrial sector of the Russian
Federation).
OJSC Gazmash implements the Human Resources Management Policy
according to the plan of actions. The occupation training, couching, continuing education,
versatility and career development training of the staff employed at the branches and
subsidiaries are organized at the premises of vocational schools.
The plant has its own engineering department, engaged in design of new products,
responding promptly to the consumer demand and introducing new products in the market
on a regular basis.
ГАЗМАШ
Development of OJSC Gazmash
Investment activity of the Company
OJSC Gazmash has been implementing a medium-term investment program in order to
ensure:
•complete modernization of existing facilities;
•design of a contemporary stove of a new generation with the potential development of
the model range;
•enhanced quality of the valves.
Within the framework of the medium-term investment program, OJSC Gazmash is planning technical re-
equipment of stamping and welding facilities with the state-of-the-art automated machinery, the development of
the new facilities for the production of the hardened glass and packaging, expanded polystyrene and “stretch
hood” products, implementation of the new assembly line and mechanical treatment equipment for the
production of gas valves with automatic flame control of the new design. Re-equipping of facilities will reduce
the labor intensity and will increase the quality of the products.
ГАЗМАШ
Development of OJSC Gazmash
The Company has been implementing the investment program using its own assets.
In 2013, the amount of investment in the Company was 5.7 million USD.
From 2010 until June 2013, the percent defective allowable was 0.21%, meanwhile the standardized value was
2.5%. For instance, in January 2011 the percent defective allowable at Chaikovskiy Gas Equipment Plant was 0.274%,
dropping down to 0.104% in June 2013.
Over the last several years OJSC participated in the development of the federal standards harmonized with the
international and European standards and ensuring the compliance with the requirements of the regulations of the Custom
Union “On Safety of the Gaseous Fuel Appliances”.
The performance characteristics of the products manufactured by the Company ensure trouble free
operation of the gas appliances under extreme climatic temperature differentials, fluctuating gas pressure and
voltage.
ГАЗМАШ
Development of OJSC Gazmash
Russian domestic appliances market remains prospective for manufacturers. The
companies offering more attractive or commercially viable products win the competitive struggle.
Flexible demand and promising market growth guarantee the stable growth of sales for the next
few years.
OJSC Gazmash has been designing and assimilating the new products in order to increase
the marketability and stability of its products under the post-crisis conditions and to maintain its
position in the Russian market of domestic gas and electric stoves.
In order to expand the assortment matrix, the Company intends to introduce new products
with the glass ceramic surface, induction stoves and stainless steel stoves of unique design (glass
panoramic façade, mirror glass of the oven door) in a variety of styles (country, high-tech,
modern) with improved functional features (recessed lighted switches, electronic timer with
clock, grill, broiling rack, convection, electrical ignition of the burners and gas control feature).
New products of the Darina brand introduced in 2013
Innovative activity ГАЗМАШ
Development of OJSC Gazmash
The Company organized a number of marketing and promotional
activities in order to maintain the brand recognition, including PR
(press tours for the journalists to the factories, tours for the target and
potential clients, and sponsorship of socially significant events), ATL
(primarily sponsorship of culinary and design TV programs to
promote the brand recognition) and BTL (joint advertisement
campaigns with partners; direct marketing; internet communications
aimed at upgrading the information on the internet; increasing the
information volume using the current newsworthy opportunities in the
blogosphere and social networks; advertisement in women’s
magazines with the conceptual serial publications on safety and
energy efficiency of the stove). The Company has its own website
www.gasmash.ru featuring the description of the full range of
products.
The well-known writer D. Dontsova, having the image of a culinary
expert and who is positively perceived by the target group of the products
consumers, has been actively involved in promotion of the products
manufactured by OJSC Gazmash since 2011. Within the framework of
partnership with D. Dontsova, the Company published a special gift edition
of the recipe book entitled The Secrets of Cooking with Darina. Also the
Company participates in very popular consumer shows and publishes the
articles in target and image mass media.
Marketing support
ГАЗМАШ
Development of OJSC Gazmash
In order to ensure the effective development of the assortment
matrix, the Company has been segmenting its trademarks according
to the price niches, depending on their target positioning.
It allows for the expansion of the range of influence and
increases the marginality of the Company operating in almost every
price niche without interference and competitiveness.
- Products of the Darina brand are usually attributed to the
below average price range.
- The products of the Flama brand are attributed to the low
price niche intended to follow the strategy of maintaining the price
leadership in the market.
- The products of the Lada brand are supposed to be entered
exclusively in the construction market since they meet
specifications and price expectations in terms of municipal and
commercial residential properties requiring installation of gas
stoves.
ГАЗМАШ
Social responsibility of OJSC Gazmash
Being a socially responsibly company, Gazmash organizes charity events on a
regular basis. One of the most significant events was the Miracle Fair organized for children
sick with cancer in medical care at Kaluga regional hospital offering treatment to thousands
of children from various regions of the Russian Federation. OJSC Gazmash gave children
sick with cancer several hours of joy including competitions, master classes, shows and
gifts. The campaign was supported by D. Dontsova and widely covered by the mass media.
The Company made a donation for the purposes of purchasing modern medical
equipment urgently needed for the treatment of young patients with such a diagnosis.
ГАЗМАШ