Company management:
- Two cofounders
- Established the company in 2004 and successfully developed it
- Production and reliable distribution channels were created from scratch
- Sales are growing rapidly
- Sales peaked, but further growth is limited by the capacity of production line
Product:
1. Spring water
2. Carbonated spring water
3. Own brand and bottling under Private Label
The benefits of spring water:
- Spring water is not chlorinated, not ozonized, it does not have various additives and supplements
- Mechanical filtration allows it to preserve its own natural properties
- Spring water is saturated with oxygen
- There is no need to boil the spring water – it is natural water
- Great taste
Various packaging - 0.5 liter, 1.5l, 6l, 19l
Competitive advantages:
- The highest source in Ukraine - a unique offer
- The height of 630 meters and 850 meters above sea level - the unique properties
- Excellent taste - customer loyalty
- Environmentally clean (from the natural conservation area) - a guarantee of water quality
- Interest of largest retailers Ukraine - existing channels
- Growing demand even in a crisis - a business model that has proved its viability
Water sales channels today
- Famous retail chains
- Vodka brand No 1
- Industrial customers and local market
Market share is approximately equal to "Bonaqua” one – produced by the global leader – The Coca-Cola company
Major market trends:
- Water consumption is gradually increasing even in a crisis
- Shrinking premium segment of imported water
- Reduction of imported water and increase of Ukrainian waters consumption
- Consumer tastes are changing in favor of ecologically clean and non-carbonated water
- Prices of water gradually increasing
- Huge opportunity of high quality water export to EU countries
- Growing demands for water quality
Efficient Company:
- There are all necessary licenses (20 years) and permits (for 7 years)
- Manufacturing gained certificates: ISO 22000, HACCP
- There are approved supplies and water flow rates - in available sources that can be developed
Needed a new bottling and packaging line (12 thousand bottles/ hour)
- Automatic and powerful line will give the following savings:
- Payroll reduction
- Reduced power consumption
- Reduced production costs per bottle
- The new powerful line will enable annual production of water grossing 240 million UAH in annual sales
Financial position, UAH
|
2014 |
|
|
Gross revenue |
49.6 Mio |
|
VAT |
8.2 Mio |
|
Net revenue |
41.3 Mio |
|
EBITDA |
13.7 Mio |
|
Net profit |
12.95 Mio |
|
Profitability |
31% |
|
Equity |
14 Mio |
|
Turnover ratio of equity |
5.5 |
Basic indicators of the project according to business plan for 5 years, UAH
|
Targets |
|
|
Required Investment |
39.5 Mio |
|
Annual gross revenue |
240 Mio |
|
Accumulated net income (5 years) |
185.5 Mio |
|
Net cash flow (5 years) |
161.2 Mio |
|
Payback period |
1.5 years |
|
Internal rate of return (IRR) |
107% |
|
EBITDA |
23% |
|
Return on equity (average for 5 years) |
27% |
|
Rate of investment (ROI) |
469% |
|
NPV |
86 Mio |
The first 100 days of the project
- Dismantling of the old and installing the new water bottling and packaging lines
- Supply to retail chains in the Ukraine
- Test delivery to the selected EU retailers (after 6 months)
Growth capitalization
- DCF model relies on the capitalization level of 96.7 Mio
- Total sales for 5 years will reach 1.2 billion Mio (240 Mio UAH per year)
- Dividends may be paid starting from the 2nd year
