annual report...CONTENTS IHB at a glance Management Export map 2005 in figures Financial highlights...
Transcript of annual report...CONTENTS IHB at a glance Management Export map 2005 in figures Financial highlights...
annual report2005
annual report2005
CONTENTSIHB at a glance Management Export map 2005 in figures Financial highlights 2005 in pictures
IHB Operating review CEO’s Letter Management report Operating results for 2005 of IHB of IHB companies Liquidity Capital resources Significant events after the annual accounting completion Important scientific research and developments Foreseen development of the company Changes in the price of the company’s shares Data on the trade of the company’s bonds
IHB Financial Statements Independent Auditor’s Report Consolidated Financial Statements Significant accounting policies Notes to the consolidated financial statement
IHB Governance Corporate Governance report Investor Relations Director’s report Corporate Social Responsibility report IHB team
IHB Portfolio presentation
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IHB is a public limited company mana-ging investment portfolio of compa-nies from different industries. IHB aims to possess controlling interest over 51%, which gives the opportu-nity to determine the strategy and to achieve the strategic management of the companies from its portfolio. In partnership with other investors, IHB invests in projects in which it can have significant influence - up to 50%.
IHB pursues a permanent optimiza-tion of the investment portfolio. As at 2006 the investments are mainly in maritime business - shipbuilding, ship repair, port activities, classifica-tion and certification, machine build-ing and river cruises.
IHB is one of the first public limited companies and one of the first listed companies on the official market of Bulgarian Stock Exchange - Sofia.
The beginning The company was established in September 1996 as a privatization fund with the objective of participation in the mass privatization process in Bulgaria during 1996 - 1997. In February 1998, Privatization Fund Bulgaria PLC was reorganized as a Holding Company in accordance with the Law of Commerce and was renamed as Industrial Holding Bulgaria PLC /IHB/.
The activitiesIHB’s main activities are acquisition, evaluation and sales of equity in companies, management of companies in its portfolio, financing its subsidiaries.
The capital andshareholdersIHB is the fifth privatization fund in terms of size of issued capital in investment bonds and number of shareholders among 81 privatization funds licensed in Bul-garia. The founding capital was BGN 2 654 985 and the founders were 110 000 shareholders.After several capital raisings, as at June 30, 2006 the issued capital of IHB is BGN 21 003 235, distributed in 21 003 235 ordinary voting shares with BGN 1 nominal value. As at June 2006, IHB has over 64 000 natural and 100 legal persons, pos-sessing respectively 39 % and 61 % from the voting shares. Foreign investors own 47 % from the voting shares. As at June 2006 IHB is №1 in market capitalization among the former privatization funds.
The visionIHB is the biggest industrial holding in Bulgaria. IHB continuously supports its sub-sidiaries to become best performers in their business activities and encourages its employees to improve their individual skills. Due to its prosperous subsidiaries, IHB generates high shareholder value. It is therefore attractive for investors and reflects the sound image of a solid and sustainable company.
IHB AT A GLANCE
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IHB at a glance
Supervisory Board (SB)
DZH AD - ChairmanDZH AD is a family company with main activities investments in real estates and securities. The com-pany is the second one out of the biggest shareholders in IHB.In the SB, DZH AD is repre-sented by1. Ambassador Dr. Elena
Kirtcheva (56) was elected as representative in SB in 2006.She has great administrative and managerial experience in state institutions, government and non-government organizations, academic and teaching experi-ence in low and economic fields,
big experience in diplomacy – ex-ambassador of Bulgaria in Switzerland, Lichtenstein, Finland and Austria. Awarded with the Grand Decoration of Honour in Gold with Sash for Services to the Republic of Austria. She was member of the First democratic Parlament of Republic of Bulgaria and member of commissions and parlament delegations of Republic of Bulgaria in European Council and Organization for Se-curity and Cooperation in Europe /OSCE/. She graduated law in Sofia University Kliment Ohridski. PhD in Law.Founder, Member of the Board and Secretary General of Vienna Economic Forum.
2. Mrs. Snejana Hristova (56) joined the management team in 2003 when she was elected member of the Managing Board. In July 2003 she was elected independent member of the SB. She has rich experience in the insurance sector and business administration of commercial companies. She graduated Insurance in the Economic Academy D.A. Tzenov in Svishtov. MSc in Economics.3. Mr. Konstantin Zografov (49) joined the SB in September 1999. He has rich experience in business administration in the Ministry of Defense and General Staff of Bulgarian Army, Organiza-tion for Security and Cooperation
in Europe, commercial compa-nies and international non-profit organizations. He graduated National Military University Vassil Levski in Veliko Tarnovo, with civil major eastern languages, Staff College G.S. Rakovski in Sofia and Defense and Security policy strategic course in the GCSP, Geneva, Switzerland. Mr. Zografov is Associated Director of AFCEA International and Regional Vice President of AFCEA International for Mediter-ranean and Black Sea region.
Managing Board (MB)
4. Mr. Bojidar Danev (67) - Chair-
man has been member of the
IHB has a two-tier management system - Managing Board and Supervisory Board
Management
Management
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Managing Board and its Chair-man since IHB’s establishment. Mr. Danev has a great experi-ence in business administration of commercial companies and non-government organizations. He graduated the Technical University, Sofia and has a PhD specialization in Germany. MSc in Engineering, PhD in Econom-ics and Senior Research Assist-ant - second degree. Mr. Danev is Chairman of the Managing Board and Executive Chairman of the Bulgarian Industrial As-sociation. 5. Mrs. Daneta Zheleva (38)
- Chief Executive Officer joined the management team of IHB in September 1999 as a repre-
sentative of Dia Expert EOOD - member of the SB. In July 2003 Mrs. Zheleva was elected mem-ber of MB and CEO. She has a 10 year experience as a lawyer in the Sofia Bar Association. She graduated law in Sofia University Kliment Ohridski. MLL in Law.Mrs. Zheleva is a deputy chair-person of the Managing Board of the Bulgarian Industrial Capital Association and of the Bulgarian Private Ports Association.6. Mr. Anguel Katzarov (64)
- Chief Executive Officer joined the management team in July 2002. In July 2003 he was elected CEO of IHB. He has great experience in business administration in the Ministry
of Defense and General Staff of Bulgarian Army, as well as in commercial companies.He graduated National Military University Vassil Levski in Veliko Tarnovo, with civil major mechani-cal engineering, Staff College Frunze in Moscow and General Staff College in Moscow. MSc in Engineering and Lt. General /ret./.7. Mr. Borislav Gavrilov (30) joined the management team of IHB in July 2003. He has been working in IHB, Elprom ZEM and Alcomet before that. He has experience in business adminis-tration of commercial companies. He graduated economics in Hull University, Great Britain. Economist.
8. Ambassador Boyko Noev
(52) joined the management team in March 2003. He has rich experience in administration in government institutions - he has been member and deputy-head of the Bulgarian delegations to the CSCE and CFE Vienna nego-tiations and head of the Euro-pean Organizations Department, Ambassador to NATO, Belgium and Luxembourg, Minister of Defense in Bulgaria. He gradu-ated International Relations in Moscow Institute for International Relations. Ambassador Boyko Noev is Director of European Program at the Center for Study of Democracy.
Management
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EXPORT MAP
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Sofia
Troyan
Shumen Varna
BourgasSlivenNova Zagora
Rousse
Location mapBulgaria
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Export map
EXPORT MAP LEGEND
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Region Countries
Europe Albania, Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Iceland, Republic of Lithuania, Macedonia, Malta, The Netherlands, Norway, Turkey, Poland, Portugal, Romania, Russia, Serbia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom
Central America St. Vincent
North America Canada, Mexico, USA
Latin and South Argentina, Brazil, Republic of Chile, Colombia, Ecuador, Peru, VenezuelaAmerica
Middle East Jordan, Israel, Iran, Iraq, Lebanon, Syria
Africa Algeria, Cameroon, Egypt, Ethiopia, Kingdom of Morocco, Senegal Republic of South Africa, Sudan, Tunisia
Asia Armenia, China, India, Indonesia, Kuwait, Malaysia, Thailand, United Arab Emirates, Uzbekistan, Vietnam
Export
Industry Symbols Products/services Companies
Maritime Shipbuilding Bulyard Shipbuilding Industry ADBusiness Ship repair Dockyard Port - Bourgas AD, Bulyard Shipbuilding Industry AD Port activities Odesos PBM AD, Dockyard Port - Bourgas AD
Classification Bulgarian Register of Shipping AD and Certification
Machine- Metal - cutting ZMM Bulgaria Holding AD, ZMM Sliven PLCbuilding machines Mashstroy PLC, ZMM Nova Zagora PLC
Electric machines Elprom ZEM PLC
Foundry Leiarmach AD
River River cruises Dunav Tours AD, Tourist Company Dunav AD, cruises Dunav Tours Hotels AD
Furniture Furniture production Avgusta Mebel ADproduction
Our business
2005 IN FIGURES2005 in figures
Consolidated assets growth 2005 to 2004
Consolidated net profit growth 2005 to 2004
Shared price rise for 2005
290%
60%
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Consolidated revenue growth 2005 to 2004
FINANCIAL HIGHLIGHTSFinancial highlights
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Operating revenue /in thousands of BGN/
100 000
90 000
80 000
70 000
60 000
50 000
40 000
30 000
20 000
10 000
0
46 70149 531
92 130
Change from previous year: -29% 6% 86%
2003 2004 2005
EBITDA /in thousands of BGN/
30 000
20 000
10 000
0
5 4508 034
30 151
Change from previous year: 31% 47% 275%
2003 2004 2005
Total assets /in thousands of BGN/
200 000
180 000
160 000
140 000
120 000
100 000
80 000
60 000
40 000
20 000
0
63 86877 991
155 766
Change from previous year: -13% 22% 100%
2003 2004 2005
Net assets /in thousands of BGN/
100 000
90 000
80 000
70 000
60 000
50 000
40 000
30 000
20 000
10 000
0
39 27947 317
82 059
Change from previous year: 10% 20% 73%
2003 2004 2005
Net profit /in thousands of BGN/
30 000
20 000
10 000
03 501
7 662
29 898
Change from previous year: 17% 119% 290%
2003 2004 2005
Earnings per share /in thousands of BGN/
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
0.17 0.36
1.42
Change from previous year: 19% 112% 295%
2003 2004 2005
Profit margin /%/
50
45
40
35
30
25
20
15
10
5
0
7.88
15.92
42.65
2003 2004 2005
ROE /return on equity /%/
50
45
40
35
30
25
20
15
10
5
0
8.91
16.19
36.43
2003 2004 2005
Financial highlights
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ROA /return on assets /%/
25
20
15
10
5
0
5.48
9.82
19.19
2003 2004 2005
ROIC /return on invested capital /%/
50
45
40
35
30
25
20
15
10
5
0
9.55
16.64
41.37
2003 2004 2005
P/E /price/earnings ratio/
10
9
8
7
6
5
4
3
2
1
0
2.34
6.20
2.54
2003 2004 2005
03.1.
2005
12.1.
2005
21.1.
2005
01.2.
2005
10.2.
2005
21.2.
2005
02.3.
2005
14.3.
2005
23.3.
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01.4.
2005
12.4.
2005
21.4.
2005
03.5.
2005
13.5.
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26.5.
2005
03.6.
2005
14.6.
2005
23.6.
2005
04.7.
2005
13.7.
2005
22.7.
2005
02.8.
2005
11.8.
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22.8.
2005
31.8.
2005
12.9.
2005
20.9.
2005
03.10
.2005
12.10
.2005
21.10
.2005
01.11
.2005
10.11
.2005
21.11
.2005
30.11
.2005
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09.12
2005
.
20.12
2005
Comparison of IHB share price grouth to indexes SOFIX and BG40 grouth 2005
BG40SOFIXIHLBL
The indicated data are as at December 31 of the relevant year and are in accordance with the consolidated an-nual financial reports audited by KPMG for the period, drawn out in accordance with the International Accounting Standards /IAS/.
1 BGN = EUR 0.51
The indicated data are from Bulgarian Stock Exchange - Sofia.IHLBL - IHB shares code of Bulgarian Stock Exchange - Sofia.
Grouth
Withdrawal from thereal estates sector
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2005 IN PICTURES
IHB acquired control over Bulyard AD, respectively Bulyard Shipbuilding Industry AD
IHB invested in port activities
Bulyard Shipbuilding Industry resumed its activity on building new vessels
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IHB was awarded for Company withBest Corporate Governance for 2005
Director of 2005 in IHB Group -Mr. Ivan Karaatanasov, CEOBulgarian Register of Shipping
The winners in team ranking IHB Sport Autumn 2005 -Mashstroy team - cup-winners for 3rd year in row
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