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BBI Capital NFI SA

BBI Capital NFI SA. Warsaw 2008. Warning of risk.

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BBI Capital NFI SA

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  1. BBI Capital NFI SA Warsaw2008

  2. Warning of risk Thispresentation was preparedaccording to thebestknowledge of BBI Capital NFI SA. We will do ourbestto ensurethatthe data we presentreflectsthe market situation of theentitiesinquestion as accuratelyas possible. However, we are not responsible for thereliability of the data presentedinthispresentationorfor itsbeingup to date, nor is BBI Capital NFI SA responsible for investment decisionsmade on thebasisof theinformationincludedinthispresentation. Transactionsinvolving investment instruments are by theirnaturespeculative and mayresultinlossesorprofitsthatexceedtheinitial capital invested. None of theinformationincludedinthispresentation, eitherindividuallyor as a whole, should be treatedas recommendation, instruction, promiseorobligationindicatingthat by usingittheinvestor will make a profit orreduceitslosses. Thispresentationis not an offerwithinthemeaning of thePolishCivilCode and otherrelevantprovisions of law.

  3. Table of contents • BB Investment Group, • BBI Capital NFI’s strategy, • BBI Capital NFI’s investment portfolio, • Effects of exiting investments, • Summary, • Long-term strategy, • Near-term plans, 3

  4. BB Investment Group 4

  5. BB Investment Group • BB Investment is: • A private investment company with business roots going back to 1988. Investments are sector-based and involvetheuse of specialised investment vehicles: • BBI Development NFI – development fund, • BBI Capital NFI – modern technology, innovative business models, • BBI Zeneris NFI –renewable energy sources, • An active medium and long-term investor combining entrepreneurship with financial market expertise, • Expert knowledge and practical experience in developing the value of thecompaniesinthe group, • Over the past few years we have developed a number of companies, from small, specialised companies to large, highly developed stock market companiessuch as AMS, Emax, and Tell, • In financial terms, BBI hasassetsintheamount of PLN 600 million, whilethemarket value of thecompanies managed by the BBI Group exceedsPLN 2 billion. 5

  6. BB Investment Sp. z o.o. BBI Capital NFI Listed on WSE BBI Development NFI Listed od WSE • 10 projects, • Luxuryapartmentbuildingsinthecentre of Warsaw, • Uniquedesigns, apartmentsinholidayresorts, • 250.000 m2 of usablearea Magna Polonia NFI SA Listed od WSE ELZAB SA Listed od WSE Tell SA Listed od WSE Hardex SA Listed od WSE I&B SystemListed od WSE Orzeł Biały SA Listed od WSE BBI Seed Fund Sp. z o.o. Kopa Haus SA Listed od WSE Duda-Bis Sp. z o.o. BBI Zeneris NFI Fundusznotowanyna GPW IZNS SA Aton HT SA Dominium SA Telecommedia Sp. z o.o. CartridgeWorld CEESp. z o.o. Awbud budownictwo SA • Biomass energy, • Watr power engineering, • Biogas technology, • Energy from waste, • Wind power Kansas Semiconductors MobilnaTelefonia InternetowaSA Awbud kostka SA Cafe News Sp. z o.o.Listed od WSE Geoclima Sp. z o.o.

  7. BBI Capital NFI’s Strategy

  8. BBI Capital NFI’s strategy • Astronginvestor (BBI Group) with a preciselydefinedownershipapproach, • Decision-making within the BBI Group associated with VC/PE as well as the development and buildingup of companies hasbeentransferred to BBI Capital NFI, • Investment portfolio with a VC/PE profile in a broad sense, • Consistent“opportunity fund” investment strategy, • IncreasingsignificanceintheVC/PE investment fund market, • Confidence of institutionalinvestorsevidenced by investmentsintheCompany’s securities by Unicredit and Black Rock, • Market value: approximately PLN 300 million, • Taking advantage of a tax exemption, • Usingthebenefits of being a listed company. 8

  9. Business Model BBI Capital NFI Listed FundPrivate Equity Investment Vehicle • Business approach • Active owner and combination of competenciesand business experience + knowledge of financial markets, • Focus on the most important sector in Poland – small and medium-sized enterprises, • Extraordinary returns on invested capital, • Limited competitionintheFund’smainoperatingarea. • Financial product • Listed company – full transparencyand compliance with corporate governance provisions, • Provision of the necessary amount of capital and assurance of financial liquidity, • Investorshaveeasyaccessto a complementary portfolio of interesting Polish companies.

  10. Business Model Our business model consists of 3 steps: Investment andDevelopment of the Company including the improvement of the financial result and active work on the operational development and long-term positioning of the Companyin its market, and finallyExit Investment Development Exit • Exit • IPO (main market or NewConnect), • Sale to an industry investor, • Other. • Development • Active and responsible owner, • Long-term development as a basis for carrying out investments, • Combining BBI Group’sbusiness experience with analytical skills in the investment process in order to buildtheCompany’s credibilityas an element of a holding company. • Investment • Company with extraordinary growth potential, • Entrepreneurial approach, • Extraordinary rate of return on equity with an acceptable level of risk, • Use of local knowledge to introduce business models.

  11. BBI Capital NFI’s operating area open pension funds investment fund companies asset management public market insurance companies private equity funds BBI Capital NFI’sarea of operations market type venture capital private market businesses developing or diversifying their core business business angels seed financing start-up first-stage financing expansion-stage portfolio investment investment project phase 11

  12. Types of transactions • Buy-out/restructuring– company takeovertransactionseffectedby buying out sharesfromshareholders on the public market oroutsideit and thenfreeingupvalueinthe Company and carrying out restructuringmeasures. Examples: ZEG, Elzab, Pepees, I&B System + MediaService • Development capital for SMEs– providing development capital for small and medium-sizedbusinesses to allowthem to realisetheir growth and development strategyor investment programme; exitusuallythroughthe public market or by sale to a strategicinvestor. Examples: IZNS, Tell, Orzeł Biały, Hardex, Kopa Haus, Awbud 1 and 2, Bomi, Geoclima • Earlystage– investmentsinstart-upsintheearlystages of their development involvedintechnologicalprojects. Investment insuchcompaniesisconcentratedinthesubsidiary BBI Seed Fund. Examples: MTI, CartridgeWorld CEE, Cafe News, Kansas Semiconductors, Aton HT

  13. BBI Capital NFI’sPortfoliobuy-out and restructuringprojects 13

  14. Elzab SA According to ELZAB’sstrategy for 2008-2010, as approved by itsSupervisoryBoard, the Company will create a strong, profitable capital group concentratingon providingcomprehensivesolutions for thebroadlydefinedretail market. Thegroup’scompetencies and productrange will include software, implementation, consulting and maintenance services, and specialisedequipment for theretailsector, HoReCa, petrolstations and doctor’ssurgeries and hospitals. ELZAB’sexpandedproductrange will be implemented by theCompany’spowerfulexistingnetworkof dealers and distributors. ThestrategyassumesthatexpandingELZAB’sproductrange to include software and services, enteringnew, lucrativesectors, and optimisingtheCompany’sfinancingstructure will lead to thevalue of itssharesbeingdoubled by theend of 2009. Purchase value of 474,706 shares = PLN 20.98m Valueof BBI’sblock (as at 29 March) = PLN 24.6m www.elzab.com.pl 14

  15. I&B System / Media Service I&B System / Media Service TheShareholdersMeeting of I&B System unanimouslyadopted a resolution to issue 61 million R seriessharesat PLN 0.98 per share, inexchange for 100% of thesharesin Media Service. The management boards of bothcompaniesareworking on an integratedstrategythat was provisionallyestablishedbeforethetakeoverprocess. Ithasbeenagreedthatthemain lines of business will be GPS technology and integration and consulting services. The company will alsooffer management support systems and solutions for intelligentbuildings. Media Service hasbeenoperating on the GPS technology market forthreeyears. The Company hasintroducednavigation devices underitsownbrand, SmartGPS, sales of which will reach approximately70,000 unitsin 2008. The Company hasalsobegun to builditsowndistribution and retailoutletnetwork, and hassigned an agreement to set upoutletsin 25 Makro Cash and Carry stores. Block held by BBI Capital NFI: 11.36% (14,200,987 shares) www.ibsystem.pl

  16. NFI Magna Polonia SA NFI Magna Polonia SA The Company isterminatingits operations as a National Investment Fund. It was purchased as an investment vehicle for subsequent portfolio investments of BBI Capital NFI. Block held by BBI Capital NFI A total of 26.61% (3,417,171 shares) www.magnapolonia.com.pl

  17. IZNS SA IławskieZakładyNaprawSamochodów: Three areas of business operations: Vehicle repairs as well as repairs of truck and bus engines, including major overhauls of combustion engines, 2. Production of spare parts for trucks, buses and agricultural machines, 3. Production of vehicle registration plates. IZNS SA was transformed into a joint stock company in 1994. It possesses an ISO 9002:1994 compliant Quality Assurance System and operates in accordance with ISO 9001:2000 and ISO/TS 16949:2002 requirements. www.izns.pl

  18. BBI Capital NFI’s Portfolio development capital projects

  19. Tell SA Tell S.A. A network of 280 GSM phone outlets operating under the Orange, Plus GSM, Play, Era GSM brands. Tell S.A. isthelargestsalesoutletchainin Poland offeringdifferent mobile phones and network services. Tell’s operations focus on sellingtelephones and thetelcommunications services of thedifferentnetwork to individualclients and institutions. Tell’sofferalsoincludes mobile phoneaccessories. TheCompany islisted on the Warsaw Stock Exchange. Block held by BBI Capital NFI (as at 28 March 2008): 23.02% of the share capital, 33.13% of the votes at the Shareholders Meeting. Market value of theblock (as at 28 March 2008) = PLN 24.7m Raifeissenrecommendation (February 2008): “buy up to PLN 126” www.tell.pl

  20. OrzełBiały SA OrzełBiały S.A. (Bytom) recycles used lead-acid batteries.The main product of recycling is antimonial lead. The Company also reclaims polypropylene from battery cases and sulphuric acid from the electrolyte. The polypropylene separated from the other components is processed into fully usable granulate. Purchase price of 25,500 shares at PLN 162 = PLN 4.17m (after the split: 204,000 shares) Block held by BBI Capital NFI (28.03.2008): PLN 4.35m www.orzel-bialy.com.pl

  21. Hardex SA HARDEX S.A. (previously ZakładyPłytPilśniowych S.A.) in KrosnoOdrzańskie. The largest manufacturer of hardboard in Poland. Two lines with a capacity of up to 80,000 tonnes of hardboard per year. The Company’s core activity is the production of wet-formed hardboard: regular and varnished, mono-colour and wood structure.Domestic sales amount to approximately 50% of overall sales and are mainly directed at woodwork and furniture manufacturers. Block held by BBI Capital NFI 60%, 620,271 shares (for PLN 14.51m) Stock market debut: 3 April 2008 (per PLN 99) www.hardex.pl

  22. Kopa Haus SA Kopa Haus SA Since 2004,KopaHaushas been building frame construction houses in the turn-key system for three large developers in Poland, the Netherlands, Sweden and the UK. In Poland, the market for prefabricate houses is still a novelty, but frame construction is very popular in Scandinavian countries, which has allowed the Company to successfully enter the Dutch, Swedish and British markets. A single order may be for up to 250 homes. Thebuyer of theblock of B seriesshares was Roompot(the ABN Amro Group), whichplans to enter thePolish market on thatbasis. Pre-IPO investment Block held by BBI Capital NFI: 13.01%(for PLN 10,050,000) IPO expected: 2008 www.kopahaus-barlinek.pl

  23. AwbudConcreteBricks AWBUD ConcreteBricksisnow one of theleadingmanufacturers of block and concrete trim elements in southern Poland. Itsofferingalsoincludestechnical consulting, design services, transport and logistics services, and services involvingtheinstallation of the products itsells. The Company sellsmorethan 1,000,000 m2 of blocks per annum. Ithasitsownlaboratory, whichsystematicallyteststhefinished products and alltheraw materials used to manufacturethem. The products manufacturedmeetalltherequirements of Polish and Europeanstandards. The Company hasimplemented a QualityAssurance System compliantwiththe ISO 9001:2000 standard and an SAP management system. Block held by BBI Capital NFI AwbudConcreteBircks: 19.23% of shares (for PLN 6m) IPO expected: 2008 www.awbud.pl

  24. Awbud Construction AWBUD Constructionis an industrial and general construction company. Itexecutes construction projects as a general contractoror on a turn-keybasis, specialising in reinforced concrete work, turn-key construction of production halls and warehouse and retail spaces, and general contracting in projects for the pharmaceutical and environmental protection sectors, as well as public utility buildings (swimming pools, gyms). AWBUD Construction has 17 years of experience and hascompletedmore than 400 general and industrial construction contracts. With a workforcenumberingapproximately 200, the Company is managed according tothe EN ISO 9001:2000 standard usingan SAP management system. Block held by BBI Capital NFI: Awbud Construction: 19.23% of theshares(at PLN 6m) www.awbud.pl

  25. Geoclima Sp. z o.o Geoclima GeoclimabeganoperatinginDecember 1997, initially as a privately-owned company and later as a limited liability company. Initially, itscore business was themanufacture of air-conditioning, ventilation and industrial refrigeration systems. Havingconcludeddistributionagreements, the Company isnowshiftingitsmainfocus to the sale and distribution of refrigeration, air-conditioning, and heating and ventilationequipment, as wellas support services. Block held by BBI Capital NFI: 28.8% of the equity (for PLN 6.97m) www.geoclima.com.pl

  26. Dominium SA Dominium S.A. Dominium beganoperatingin 1993, fromits first premisesat ul. Złota in Warsaw. Now, in 2008, ithas a chain of 52 Pizza Dominium restaurants allover Poland, as well as one in Romania (and twofurther restaurants in Ireland and Ukraine), which form thelargest catering chainbased on Polish capital. The Company isintheprocess of creating a newstrategyleadingup to an IPO. Block held by BBI Capital NFI: 12.5% of the equity (for PLN 5m), since 4 April 2008 www.pizzadominium.pl

  27. Duda-Bis Sp. z o.o. Duda-Bis Sp. z o.o. One of thelargestmeatprocessorsin Poland (unrelated to PKM Duda). The Company owns a modern slaughterhousein Jędrzejów, a meatprocessing plant, a distributioncentrein Poznań, and a chain of own and franchise stores. Ithasstableannualsales of around PLN 500m. The Company plans to enter the Warsaw Stock Exchange in 2009 throughtheintermediary of DM Millenium. Block held by BBI Capital NFI: A total of 19.05% of theshares for PLN 20m www.duda.pl

  28. BBI Capital NFI’s portfolio earlystageprojects

  29. CartridgeWorld CEE Sp. z o.o. CartridgeWorld Sp. z o.o. CartridgeWorldwas founded in Australia in 1997. It is theworld leader in the regeneration of cartridges for ink-jet and laser printers. It has over 1,550 stores in 42 countries. In Poland, since October 2007, CartridgeWorld (CEE) Sp. z o.o. hasbeenthe Main Franchisee for Poland, Czech Republic, Ukraine, Slovakia, Hungary and Belarus. There are plans to open stores in most Polish cities with a population of over 100,000. The stores will be both franchise operations and under direct ownership by the Company. Block held by BBI Capital NFI: 70% (forPLN 2.62m) www.cartridgeworld.pl 29

  30. MobilnaTelefoniaInternetowa MobilnaTelefoniaInternetowa S.A. The first VOIP operator in Poland offering free/inexpensive mobile telephone services based on UMTS, 3G and WiFi broadband internet access, using smart phones. The first such implementation in Europe, in partnership with Cicero Networksand NetGear, and the first solution allowing free roaming between GSM (3G) and WiFi networks.Start-up investment - capital provision at an early stage, combined with consulting and advice in developing the company. Othermainshareholders: thefounders and creators of theproject Pre-IPO investment: Block held by BBI Capital NFI: 70% (for PLN 2.52m) www.lovo.pl

  31. Cafe News Cafe NewsSp. z o.o. The first news aggregator in Poland. This is a free programme that groups the best sources of information and allows their management. It represents a new quality in access to breaking news. Cafe News has an Internet monitoring function that allows for individual definition of keywords and buzzwords. Block held by BBI Capital NFI: 35% for PLN 2m Start-up type investment – early-stage capital entry together with advisory services and help in developing thecompany. Other main shareholders: four natural persons (thefounders and creators of the project). The Company isintheprocess of entering NewConnect. Itplans to obtain PLN 3-5m www.cafenews.pl

  32. Kansas Semiconductors Kansas Semiconductors A technological investment. Out of the capital earned, the Company commenced the constructioninthe USA of a high-pressure reactor forproducing aluminum nitride on an industrial scale. Aluminum nitride is used in optoelectronics and applied electronics (the new generation of UV lasers). This means it can be used in lighting systems, mass memories,telecommunications and imaging (thelatest LCD screens). Block held by BBI Capital NFI: 42% of the equity (for USD 0.5m ) 32

  33. Aton HT SA Aton HT S.A. ATON HT S.A. has been in business sinceAugust 2005. It was founded in order to implement MTT technology on an industrial scale in the field of utilising hazardous waste. MTT – Microwave Thermal Treatment – of which ATON HT is the legal owner, is an innovation in waste utilisation. A testing facility for carrying out tests on theutilisation of asbestosis to be built on the basis of MTT technology. The Company debuted on NewConnect on 29 February 2008, at PLN 3.50 per share. Terms of thetransaction: Purchase: 500,000 shares on 3 January 2008 at PLN 1 = PLN 0.5m www.aton.com.pl 33

  34. Effects of Exiting Investments 34

  35. PEPEES SA • The PEPEES S.A. capital group consists of: • Przedsiębiorstwo Przemysłu Spożywczego PEPEES S.A., • Zakłady Przemysłu Ziemniaczanego LUBLIN Sp. z o.o. • PEPEES S.A. is leader in the manufacture of potato starch, with a 25% share of the Polish market. • ZPZ Lublin specialises in the manufacture of potato granules and starch syrups. • In early 2007, the Łomża brewery was sold to FAXE forPLN 124m. • A call to repurchase the company’s own shares for the purpose of redemption, for a price of PLN 2.70 vs. the market price of PLN 1.80, ended on 20November. • Terms of thetransaction: • Purchase: 4.3%, 40,000 shares (for PLN 4m) Exit: via the market, at an average PLN 207 (PLN 8.33m), • ROE: 107% (PLN 4.31m)www.pepees.pl 35

  36. ZEG SA ZakładElektronikiGórniczej "ZEG" S.A., listed on the Warsaw Stock Exchange, is a reputable producer of industrial automation equipment, measurement and inspection instrumentation, and signalling and communications apparatus, built to withstand explosions and intended for industry and mining applications. Terms of thetransaction: Purchase: 65%, 749,433 shares at PLN 30 (PLN 22.483m). Sale (to Kopex): at PLN 44 (PLN32.977m). ROE: 46% over a four-month period 132% over ayear www.zeg.pl

  37. PPH BOMI SA PPH BOMI Owner of a network of eighteen supermarkets operating in seven Polish cities. BBI Capital NFI is one of the financial investors introduced prior to the public offer that is being organised by IDM SA(pre-IPO). Terms of thetransaction: Purchase of 683,000 shares at PLN 6.5= PLN 4.5m Exit: (at PLN 27) = PLN 18.441m, ROE: 410% overseven months www.bomi.pl * Approximate data

  38. Summary

  39. 2008 – building the Fund’s value • Implementation of a management incentive system, • Commercialisation of projects in the pipeline, • Stable and long-term growth in the value of the Fund, • Taking a leading position on the active capital investment market, • Issue of shares in December2007: • 4.24m shares at PLN 7.20 for a total of PLN 30.5m (Unicredit), • New Supervisory Board member: Jan Modrzejewski (Unicredit), • Open bond issue programme up to a maximum of PLN 100m.

  40. Strategic development directions • BBI Capital NFI SA means: • A combination of an active VC/PE investor and an experienced entrepreneur, • Actively seeking new investment projects and new market niches, • More than six new projects annually, • Maximising the ROI is the chief consideration in project selection, • ROE no less than 30% p.a., • Ensuring an appropriate level of security.

  41. BBI Seed Fund • BBI Seed Fund is a venture capital fund specialising in investments in start-up companies developing technological projects, • BBI Seed Fund started its operations in December 2007, having obtained financial support from KrajowyFunduszKapitałowy (a joint stock company established by Bank GospodarstwaKrajowego for the purpose of distributing EU Structural Fundmoney intended to support venture capital funds), • Fund capitalisation PLN 60m, including a 50% share of BBI Capital NFI SA (a private investor) and a 50% share of KFK (KrajowyFunduszKapitałowy – a public investor), • Guaranteed protection for BBI Capital NFI SA as a private investor by way of apriority right for withdrawing funds from closedfund investments. 41

  42. BBI Capital NFI S.A. BBI Capital NFI SA Warsaw Corporate Centerul. E. Plater 2800-688 Warszawatel. +48 22 630 33 99fax. +48 22 630 33 70Marcin MizgalskiPR Managertel. +48 609 84 84 84e-mail: marcin.mizgalski@bbicapital.plskype: marcin_mizgalski 42

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