Download asbis strategy

The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
Warsaw, October 10, 2007
ASBISC ENTERPRISES PLC PUBLISHED ITS OFFERING PROSPECTUS
ASBISC Enterprises Plc (ASBIS), one of the leading distributors of IT products in Central and Eastern
Europe, the Baltic States, the former Soviet Union, the Middle East and North Africa published its
offering prospectus. Based on the Maximum Price the company plans to raise approximately PLN 82,9
mln to implement its development strategy. The offering, will also involve a partial sell down by some
of the existing shareholders, and the overall offer value might amount up to PLN 234 mln.

The Offer comprises in aggregate 21,205,144 Offer Shares, representing 7,500,000 New
Shares to be issued and offered by the Company and 10,939,256 Sale Shares to be offered
by the Selling Shareholders. The key Selling Shareholders are MAIZURI Enterprises Ltd. and
Alfa Ventures S.A. and KS Holdings Limited. The shares will be offered to Polish and foreign
institutional investors, as well as to Polish retail investors.
In addition, KS Holdings Limited has granted the Global Coordinator an Over-allotment Option
covering up to an additional 2,765,888 Offer Shares, representing up to 15 per cent. of the
base aggregate number of the Offer Shares, to cover over-allotments, if any, made in
connection with the Offer and to cover short positions resulting from stabilisation transactions
at the WSE (greenshoe).

The Offer Shares are divided into two tranches:
-
the Retail Tranche of 2,650,000 Offer Shares, intended for Retail Investors;
-
the Institutional Tranche containing all the remaining 18,555,144 Offer Shares, including
up to 2,765,888 Sale Shares, offered under the Over-allotment Option and intended for
Institutional Investors.

Depending on the demand, shares may be shifted between tranches.

The book-building process for Polish and international institutional investors will take place
between 10 October and 18 October (until 18.00 Warsaw time) and will be handled by ING.

The period in which retail investors may file subscriptions which will commence on 10
October 2007 and will end on 18 October 2007, at 17.00 (Warsaw time). Subscriptions might
be filed Customer Service Desks of ING Securities S.A., Order Placement Points operated by
1
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
DM Polonia Net S.A. and BM Nordea Bank, Customer Service Desks of DM BZWBK and
Order Placement Points of Biuro Maklerskie Banku BPH S.A.

The Maximum Price per share is PLN 11.05.
The indicative Price Range for the Offer has been set at PLN 7,50 (USD 2,8) to PLN 9,20
(USD 3,4) per share.

The Offer Price will be determined by the Company and the Selling Shareholders upon the
recommendation of the Managers after the termination of the Subscription Period not later
than on 19 October 2007 taking into account the results of book-building amongst the
institutional investors.

Allotment will occur promptly following the Subscription Period, not later than on 19 October
2007, subject to acceleration or extension of the timetable for the offer at the discretion of the
Company and the Selling Shareholders.

The principal use of the proceeds from new shares issued by ASBIS is to invest in the
further development of the Group's own brands of IT equipment - Prestigio and Canyon,
enabling the Group to take advantage of early payment discounts offered by certain suppliers
and expanding the range of branded end-user products offered by the Company.

The Offer Shares are expected to be listed on the Warsaw Stock Exchange around 30
October 2007.

The Company’s advisors during the IPO process are: ING (Global Manager of the Offer), ING
Securities, Dewey & LeBoeuf, Deloitte and Touche .
.
ASBIS STRATEGY
The Group’s strategy is aimed at expanding business and boosting profitability, to be achieved by
enhancing the operating efficiency of computer component distribution and by increasing sales under
private labels. The Group intends to meet these objectives through:

increasing sales and market share in the EMEA region;

expanding into new emerging markets;

developing its private label business;

continuing to focus on leveraging its size and distribution capacity to secure better commercial
terms and to optimise its product mix; and

enhancing operating efficiency and automated processes, including its on-line sales channels.
2
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
Increasing sales and market share in the EMEA region
As confirmed by independent market reports produced by Gartner, computer penetration in the
markets in which the Group operates is still significantly lower than in more developed Western
European markets. As a result, demand for computer products in these markets is growing rapidly
and the Company expects it to continue to grow at a high rate in the foreseeable future. The Group will
continue to focus on increasing its revenue and market share in these growing markets and believes
that it is in an advantageous position to do so, due to its relationships with leading international
suppliers, extended distribution network and strong local presence.
Expansion into new emerging markets
In recent years, the Group has entered a number of new emerging IT markets in North Africa.
Although revenues derived from these markets still represent a relatively low share of the Group's total
revenues, this share is increasing, as these markets continue to grow and as the Group continues to
expand to other emerging and growing markets including in Africa and Central Asia (in particular
countries such as Libya, Kenya, as well as Moldova, Azerbaijan, Georgia and Armenia). The Group
expects that its long experience of successfully competing in emerging, high-growth markets,
combined with the geographic proximity of its headquarters to these markets, will help it strengthen its
market position and increase its revenues.
Development of private label business
The Group's private label (branded) product lines, Canyon and Prestigio, are manufactured by leading
OEM producers in the Far East (i.e., Korea, Taiwan, and China), often based on designs developed by
the Group, selected on the basis of their quality and potential for achieving high profit margins in the
Group’s markets. The Group markets and sells these products under its own brands, successfully
competing with products of comparable quality marketed under international brands. The Group
believes that increasing sales of private label products as part of its total revenues will have a positive
impact on its overall profitability, as these products return a higher profit margin, compared to
international suppliers’ products distributed by the Group. As a result, the Group aims to continue
expanding the range of its private label products and strengthening their promotion in its markets.
Continuing to focus on leveraging its size and distribution capacity to achieve better
commercial terms and to optimize its product mix
The Group's local presence in a number of markets in which it operates and the size and breadth of its
operations, combined with its centralized procurement system for negotiating with suppliers, help
increase the Group's purchasing power and strengthen its ability to negotiate and achieve more
beneficial terms in its distribution agreements, including achieving agreements with respect to the
distribution of products offering higher profit margins.
3
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
Enhancing operating efficiency and automated processes, including its on-line sales channels
The Group continues to focus on improving operating efficiency and enhancing its automated
processes, with a view to reducing operating expenses and increasing its profit margins, mainly
through enhancing its own on-line, end-to-end supply chain management system, which operates over
its IT4Profit platform. This automated system covers a wide range of Group activities, from purchasing
processes with key suppliers, to intercompany transactions, order processing and business data
exchange with customers, as well as automated B2C (business-to-customer) connection with e-shops
of resellers. Approximately half of the Group's revenues were derived from on-line transactions with
customers in 2006, and the Group aims to increase this percentage.
USE OF PROCEEDS FROM THE OFFER
Based on the Maximum Price, the Company may raise up to approximately PLN 82.9 million
(approximately U.S1. $29.6 million). The net proceeds from the sale of the New Shares, after paying
commissions, fees and expenses associated with the preparation of the Offer and the sale of New
Shares, will be used (in the order of priority) for the purposes of:
Purpose of use of proceeds
Further developing the Group’s own brands of IT equipment - Prestigio and
Canyon
up to PLN 39.1 mln
Enabling the Group to take advantage of early payment discounts offered
by some of the Group’s key suppliers
up to PLN 21.8 mln
Expansion of the range of branded end-user products offered by the
Company, including necessary working capital requirements in this respect
Completion of a purchase of a building in Slovakia, serving as a
headquarters of a local subsidiary

Amount
do 15.4 mln zł
Up to PLN 2 mln
Further developing the Group’s own brands of IT equipment - Prestigio and Canyon - by
investing in their marketing, design, sourcing and quality control – up to approximately PLN 39.1
million (approximately U.S.$ 14.0 million). Marketing of the Prestigio and Canyon brands will aim
at increasing customer and product awareness which will be achieved via various marketing
activities such as advertising, publishing of promotional materials, product presentations and other
marketing activities. The Group expects to gain significant strategic and commercial advantages
from the development of its own brands and is committed to supporting growth of both Canyon
and Prestigio brands;

Enabling the Group to take advantage of early payment discounts offered by some of the
Group’s key suppliers, such as Seagate Technologies and Hitachi Global Storage, thus
1
at the exchange rate of PLN 2.7989 for U.S. $1, as published by the National Bank of Poland on 29 June 2007
4
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
enhancing its bottom line performance – up to approximately PLN 21.8 million (approximately
U.S.$ 7.8 million);

Expansion of the range of branded end-user products offered by the Company, including
necessary working capital requirements in this respect – up to approximately PLN 15.4 million
(approximately U.S.$ 5.5 million). In recent years, the Group introduced A- Brand notebooks (such
as Toshiba) to its distribution network out of which it expects large amounts of sales and more
need for working capital;

Completion of a purchase of a building in Slovakia, serving as a headquarters of a local
subsidiary – up to approximately PLN 2.0 million (approximately U.S$ 0.7 million). The property
(Tuchovske Pole) is situated in the Bratislava Vajnory area, close to the International Airport of
Bratislava. The area of 9,128 sq.m will be used for building offices and a warehouse which will
substitute for the Company’s current facilities.
The Company is planning to use net proceeds of the subscription for the New Shares for the purposes
specified above within 12 months from the Closing Date. Pending application of any excess funds the
Company will invest them in short-term, investment-grade and interest bearing or zero-coupon
securities or bank deposits.
In order to optimize benefits from the money raised, the Company intends to start using the net
proceeds from the sale of new shares for the purposes listed above immediately after the Offering is
completed.
SHAREHOLDING STRUCTURE BEFORE AND AFTER THE OFFER
Current major shareholders of the Company are KS Holdings, (53.49%), and financial investors –
MAIZURI Enterprises Ltd. (10%), and Alpha Ventures (6.67%). The remaining shares are mainly
owned by the Company’s management and employees. After the offer, the free float of the Company
is expected to be 38.2%.
5
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
TIMETABLE OF THE OFFER
October 10 - 18 2007
Book-building Period (until 18.00 Warsaw time)
October 10-18, 2007
Subscription for retail investors (until 17.00
Warsaw time)
No later than October 19, 2007
October 24, 2007
around October 30, 2006
Allotment and Pricing Date
Settlement and Payment Date
Planned Listing Date
FINANCIAL PERFORMANCE OF ASBIS
After first six months of 2007 Group’s revenues increased to USD 540 million, from USD 426 million in
the same period of previous year (26.7% increase). Net profit increased to USD 3.2 million from USD
2.5 million (27.4% increase).
In 2006, revenues posted by the Group rose to USD 1,009 million, from USD 930 million (up 8.4%
YoY) and USD 756 million (up 23.1% YoY) in 2005 and 2004, respectively. In the same period, net
profit generated by the Group (after tax and before minorities and listing expenses write-off) was also
on the rise and in 2006 reached USD 11.1 million, relative to net profit of USD 8.4 million in 2005 and
USD 2.2 million in 2004, the figures representing the increase of 32.1% and 272.5%, respectively. The
table below presents key financial date of ASBIS Group in the first half of 2007, and years 2006, 2005,
2006.
(in thousand USD)
1H 2007
Not audited
data
1H 2006
Not audited
data
2006
Audited data
2005
Audited data
2004
Audited data
540 055
426 368
1 008
930 389
755 719
Operating profit
5 644
4 431
16 083
12 290
5 119
Net profit
3 168
2 486
11 070
8 378
2 249
Sales revenue
6
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
For additional information please contact:
Magda Kołodziejczyk, M+G
Ph: (22) 625 71 40, 0501 16 88 07
e-mail: [email protected]
Costas Tziamalis, ASBISc Enterprises Plc.
ph : 00357 25 857000
e-mail : [email protected]
David Newton, Seymour Pierce Ltd
Tel : 0044 20 7107 8336
e-mail: [email protected]
For more information, visit also the company's website at www.asbis.com
ASBIS is one of the leading distributors of IT products in Central and Eastern Europe, the
Baltic States, the former Soviet Union, the Middle East and North Africa. The Company is
incorporated in Cyprus and its shares are already listed on the AIM market in London.
The ASBIS Group combines broad geographical reach with a wide range of products
distributed on a "one-stop-shop" basis. Additionally, the Company distributes its private
labels, Canyon and Prestigio. As at December 31st 2006, ASBIS provided its services to over
14 thousand customers in approximately 70 countries.
Group is a strong and reliable partner for leading international suppliers of IT components,
including Intel, AMD, Seagate, Samsung, Microsoft, Hitachi and Toshiba.
The revenues of ASBIS in the H1 2007 amounted to USD 540m, which represented 26.7%
growth in comparison to H1 2006. The company recorded USD 3.2m of net profit, 27.4%
increase in comparison to the same period in 2006.
In 2006 ASBIS’ revenues exceeded USD 1.0bn, whilst net profit was USD 11.1m.
The major shareholders of the Company are KS Holdings, (53.49%), and financial investors –
MAIZURI Enterprises Ltd. (10%), and Alpha Ventures (6.67%). The remaining shares are mainly
owned by the Company’s management and employees.
All capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Prospectus of ASBIS approved by the Financial Supervision
Authority.
This material is of a promotional nature only. The only legally binding document containing information
on ASBISc Enterprises Plc (the “Company”) and on the public offering of shares in the Company is the
Prospectus. The Prospectus is available on the websites of: Giełda Papierów Wartościowych w
Warszawie (www.gpw.pl), the Issuer (www.asbis.com) and ING Securities S.A. (www.ingsecurities.pl),
hardcopies of the Prospectus are available at Customer Service Desks of ING Securities S.A., Order
7
The information contained herein shall not be distributed in the United States, Canada, Australia or Japan
Placement Points operated by DM Polonia Net S.A. and BM Nordea Bank, Customer Service Desks of
DM BZWBK and Order Placement Points of Biuro Maklerskie Banku BPH S.A.
These materials are not an offer of securities for sale in the United States. The securities may not be
offered or sold in the United States absent registration or an exemption from registration under the
U.S. Securities Act of 1933, as amended.
This communication is directed only at persons who (i) are outside the United Kingdom or (ii) are
investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the "Order") or (iii) are high net worth entities falling within Article
49(2)(a) to (d) of the Order or (iv) such other persons to whom it may lawfully be communicated (all
such persons together being referred to as ''Relevant Persons''). This communication must not be
acted on or relied on by persons who are not Relevant Persons.
Any statements contained in this announcement which are not historical facts are forward-looking
statements which express the beliefs, opinions and expectations of the Company and are subject to
various risks and uncertainties that could cause actual results to differ materially from such
expectations. The factors that could affect the Company's future financial results are discussed more
fully in the Company's prospectus in relation to its offer of shares. The Company assumes no
obligation to update information in this announcement.
8