Florian Schuhbauer presented his in-depth investment thesis on Ciech (Warsaw: CIE) at European Investing Summit 2013.
Polish government plans to sell out of 300 companies. Ciech is one of them. Government has 39% stake. This should facilitate change and operational improvements in these companies. Ciech is the #2 soda ash producer in Europe and sole producer in Poland and Romania. Soda ash is a chemical primarily used in the glass, detergent and chemicals industries. Soda ash market attractive due to high entry barriers (capex and environmental regulations), as well as its prospects for growth. No capacity expansions of competitors expected in Central Europe but likely capacity reduction by competitors in South Europe and capacity expansion in Turkey (little impact on Ciech core markets due to logistical barriers). Value creation potential due to 1) disposal of non-core activities and focus on high margin soda segment; 2) cost savings program initiated for soda segment and 3) reduction of capex (current investment program fully executed by 2016/17). CEO has strong track record of turning around chemical businesses in Poland and has built up good reputation. Trades at 6x 2014E adjusted EBITDA with significant EBITDA improvement potential.
About the instructor:
Florian Schuhbauer joined Triton Partners in 2010 following a career in top investment management and business operational positions at AVI/General Capital Group (Partner/Portfolio Manager), Deutsche Post World Net & DHL Global Mail (CFO & Executive VP), Newtron AG (Director Corporate Finance & Investor Relations) and Dresdner Bank / Dresdner Kleinwort Benson. Founded in 1997, Triton is an investment firm dedicated to investing in medium-size businesses headquartered in Northern Europe. Within this Northern European region, Triton focuses on businesses in three core sectors: Business Services, Industrials and Consumer / Health. Triton’s philosophy and vision is to pro-actively contribute to the building of better businesses for the longer term.
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