METALAC - AII Data Processing

SINTEZA INVEST GROUP
Blvd Mihajla Pupina 115v, Block A3/7
11 070 Belgrade
www.sinteza.net & www.sinteza.net/en
info@sinteza.net
+381 (0)11 2099 500
2012
Analyst: Milos Bijanic
Tel: +381 (0)11 2099 574
Email: milos.bijanic@sinteza.net
METALAC
Export lifted the sales

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
Company overview
Metalac was founded in 1959 and was
based in Gornji Milanovac, 110 km to
the south of Belgrade. Metalac Holding
started 2008 with four production and
seven trading companies, and chain of
55 specialized shops of household items
throughout Serbia, plus 33 local shops
in the province of Gornji Milanovac.
Today, Metalac represents one of the
largest regional produced of enamel,
non-stick and stainless steel cookware,
stainless steel sinks, various types of
water heaters, carton packing material
and granmatrix composite plates. It has
the dominant position in domestic
market, while total market covers 25
counties including USA and Australia.
The company employs 1550 people.
Metalac is a share company organized
as a holding with 14 subsidiaries - four
of them are production companies, five
operates as local trading companies
while other five operating abroad.
Five productions companies are based at the same place as headquarters, in the city of Gornji Milanovac:
Metalac Posudje for production of cookware, Metalac Inko doo for production of kitchen sinks and gran
matrix composite plates, Metalac Bojler doo for production of water heaters and Metalac Print doo for
production of carton packing material and transfers for cookware decoration.
The domestic trading companies within the holding give shape to one of the strongest trading chains in
Serbia for sale of cookware and compatible items: Metalac Market as a retailer manages 55 specialized
shops throughout Serbia; Metalac Trade is a major wholesale of imported household items; Novi Sadbased
Metalac Metalurgija places products of Metalac and widest range of household items on the market
of Vojvodina; Metalac Proleter is major supplier of citizens in the province of Gornji Milanovac through 50
points of sale; Metpor acts as agent of different foreign companies and trades with home textile products.
All five companies abroad deal with various ranges of Metalac products. The biggest share is from Metrot
which operates in Russia for ten years. Promo-Metal from Zagreb covers the market in Croatia, while in
Montenegro products are sold through Metalac Market Podgorica. The market of the USA is supplied by
Metalac Group USA located in Milwaukee. The newest one is Metalac Ukrajina, opened to aim Ukraine and
nearby markets.
Metalac Group – Subsidiaries
No. Company Headquarter
1 Metalac Posudje
2 Metalac Inko
3 Metalac Bojler
4 Metalac Print
Gornji Milanovac,
Serbia
Gornji Milanovac,
Serbia
Gornji Milanovac,
Serbia
Gornji Milanovac,
Serbia
General Information
Company Name Metalac AD
Country of Domicile Serbia
Home City Gornji Milanovac
Sector Manufacturing
Security Type Ordinary Shares
ISIN RSMETAE71629
CFI Code ESVUFR
Primary Stock Exchange The Belgrade Stock Exchange
Stock Exchange Ticker MTLC
Bloomberg Ticker MTLC:SG Equity
Stock Exchange Segment Standard listing
Trading Method Continuous
Market-maker None
Benchmark Belex15 Index
Number of Shares 1,020,000
Market Float 71.6%
Auditor Ekirevizija
Web www.metalac.com
Fiscal Year January 1 - December 31
Source: Sinteza Research
Ownership
share
Activity
100.0% Production of cookware
100.0%
Production of kitchen sinks and gran matrix composite
plates
100.0% Production of water heaters
100.0% Production of carton packing material
SINTEZA INVEST GROUP | MTLC 2012 2

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
5 Metalac Market
6 Metalac Trade
Gornji Milanovac,
Serbia
Gornji Milanovac,
Serbia
100.0% Retailer with 55 specialized shops
100.0% Wholesale of imported household items
7 Metalac Metalurgija Novi Sad, Serbia 82.4% Trade of household items in Vojvodina
8 Metalac Proleter
Gornji Milanovac,
Serbia
64.6% Retailer with 50 specialized shops
9 Metpor Belgrade, Serbia 100.0% Trade of home textile products
10 Metrot Moscow, Russia 100.0% Covers the market in Russia
11 Promo-Metal Zagreb, Croatia 100.0% Covers the market in Croatia
12
Metalac Market
Podgorica
Podgorica,
Montenegro
100.0% Covers the market in Montenegro
13 Metalac Group USA Milwaukee 50.0% Covers the markets abroad
14 Metalac Ukrajina Kiev 100.0% Covers the market in Ukraine
Source: Sinteza Research, Metalac
Metalac has integrated Quality Management System ISO 9001 and Environmental Protection Management
System ISO 14001 certified by TÜV. The subsidiaries Metalac Cookware, Metalac Inko, Metalac Print and
Metalac Bojler also obtained QMS/EMS certificates. Metalac won number of important awards. Some of
mots important are: Oscar for Quality for business excellence in 2007; Award of the Serbian Chamber of
Commerce 2006 for contribution to Serbian industry; Best Trade Marks in Serbia for 2004, 2005 and
2006; 2005 Gold Medal for Quality; 2005 Award for Design Development and Application…
Metalac employs about 1550 people, while half of them working in Metalac Cookware. Production of
cookware still represents core business with 40% of total income. The market now covers 25 countries.
There are 10 product lines:
Enamel cookware. Metalac has 50-year long experience in producing enamel
cookware. There are 9 product types of this line, while total offer includes more than
500 items.
Non-stick Cookware. Metalac have been producing non-stick cookware for 12
years now. Non-stick coating is applied over enameled steel or aluminum.
Stainless Steel Cookware. This products are made of high quality steel coming
from the best known world producers. The company has been producing stainless
steel cookware for 10 years now. It is reliable for healthy cooking without grease
and with great energy savings.
Premium - m*. This line perfectly combines aesthetics, quality and functionality of
the product. It poses original and unique design (Karim Rashid) and exceptional
characteristics of material.
EcoTava Crystal. This is the aluminum cookware with unique non-stick enamel which
combines the best features of enamel and non-stick components. 90% of coating is
enamel which gives higher scratch and heat resistance. It is very healthy in contact with
food and developed to respect the environment.
SINTEZA INVEST GROUP | MTLC 2012 3

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
SWOT & PEST
SWOT Analysis
Sinks. Metalac Inko produces stainless steel and enameled sinks from high quality steel
for 15 years, and is currently the only producer of sinks in Serbia. Metalac making single
and double bowl, inserted and mounted sinks, made from polished or relief stainless
steel and from composite materials – xGranit.
Granmatrix. It is a composite material – a blend of polyester/acrylic alloys and fillers.
Filler is a structural material which gives solidity, electrical and thermal resistance.
Granmatrix is stain-resistant, easy to clean and completely renewable. It sustains
thermo-formable quality, offering you wide variety of creative possibilities.
Water Heaters. Metalac Bojler produces accumulation water heaters from 30 to 120
liters, with enameled or stainless steel tank, and small capacity water heaters of 5 and
10 liters, for low and high installation. 50 years of experience in enameling and 30 years
of experience in production of water heater tanks insure the quality of company’s
products, which is proved by the longest warranty period in domestic market – 15 years
for stainless steel tank and 11 years for enameled tank. The products are provided with
safety device and we offer technical service for our customers in over 40 centers in
Serbia, Montenegro and Bosnia and Herzegovina.
Packing Material. Metalac also produces transport and luxurious cardboard packing
materials. Stable quality, on-time delivery, possibility to produce larger boxes (B0
format), and qualified graphic designers are the main advantages embedded in the
Metalac’s offer of products in this field.
SunChef. The products in this line cook every kind of food with the power of the sun all
year around. Reaches temperature up to 400 °F / 205 °C with portable dimension.
Strengths Weakness
- large spectar of quality products
- rise in export
- leader with strong retail net in the Serbian market
- diversified markets
- brand on domestic market
- very good geographical location – centre of the Balkans,
- management in shareholding structure
- listed on standard listing
- solid level of transparency and corporate governance
- solid dividend
Opportunities Threats
- growing export to world markets
- products with renewable energy
- prime listing
Sinteza Research
- exposure to currency risk
- sensitivity on technical changes
- undeveloped stock market
- not quite impressive efficiency
- product substitution
- unpredictable FX
- decline in the standard of living
- slow economic growth
- increase of competitions
SINTEZA INVEST GROUP | MTLC 2012 4

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
PEST Analysis
Factor
Influence Weight
-5 do 5 1-5
world markets 4 5 20
products with renewable energy 2 4 8
prime listing 1 1 1
product substitution 1 4 4
unpredictable FX -1 1 -1
decline in the standard of living -3 2 -6
slow economic growth -4 3 -12
increase of competitions. -1 3 -3
Total score - - 11
Sinteza Research
Score
Total current score for the Company’s outer factors is 11, which means that the outlook is positive and
there are more favorable than negative possibilities for growth in next 12 months. From current
perspective, the maximum or the highest possible score on these factors is 70, which indicates that
although there is a positive trend, it is not so high and there is a lot of space for growth in next years.
This is also showing that Metalac is using only 16% of its all current potential or that it can grow by near
7x higher pace than now if all outer factors will be at their maximum favorable level from the company’s
angle (this is not necessary related to the share price).
On the opposite side, the lowest grade is -45, which indicates that there is still plenty of risk for future
development. This means if all negative factors reach their maximum, Metalac can see a significant fall in
business operations. Still, this level is quite lower compared to maximum growth grade, so it can be
concluded that the rise is worth risk.
In order to achieve the maximum growth and use its full potential, the Company needs to continue to
operate as it was until now (as management also removed many weakness and threats until now) and as
predictions for this year are better compared to previous, we are sure that Metalac will follow existing
positive trend. In support of this, management is already focusing on the most important factors for
future development: products that use renewable energy and expansion on many foreign markets, in
Europe and abroad.
Financial Performance
Metalac saw an increase in sales during 2012 primarily due to export jump and higher market share.
Export increase mostly because of the sales in Russian market, which had the largest share in export in
all foreign markets. Sales surged by 22% which is higher growth than 2-year average of 17%, and lifted
the EBIT by 30%. The company is planning to see the rise by 5% in 2013 in euros.
On the balance sheet account, inventories rose solid 22% and participate for nearly one third of total
assets, but similar scenario was seen during last 3 years. The average participation during that period of
this position was 26%. Similar to inventories, receivables also saw rising trend but its stake stayed at one
fifth compared to total assets. Almost the same level of participation receivables had in sales. On the
other side of the balance sheet, long term borrowings jumped 5x, but theirs stake in total source of
assets stood at 9% at the end of 2012, which is quite tolerably. Short term borrowings fell for a third in
2012, while accounts payable soared nearly the same, which should be a good exchange.
Operating cash flow increased thanks to higher sales, and payments in advance, but, net inflow was
negative mostly due to investing activities as Metalac invested in further expansion on foreign markets,
as well as in production and retail.
SINTEZA INVEST GROUP | MTLC 2012 5

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
ØFX EURRSD 103.04 101.95 113.04
Statement of Earnings (m RSD) 2010
Operating Revenues 4,559 100% 5,167 100% 6,326 100%
Sales 4,571 100% 5,108 99% 6,257 99%
Growth - - 12% - 22% -
Change in Inventories -12 0% 59 1% 69 1%
Operating Expenses 3,959 87% 4,586 89% 5,571 88%
Growth - - 16% - 21% -
COGS 1,153 25% 1,413 27% 1,725 27%
Growth - - 23% - 22% -
Cost of Materials 1,281 28% 1,464 28% 1,726 27%
Growth - - 14% - 18% -
Salaries 940 21% 1,075 21% 1,320 21%
Growth - - 14% 0% 23% -
Depreciation and Amortization 211 5% 200 4% 236 4%
Other Operating Expenses 374 8% 434 8% 566 9%
EBITDA 811 18% 781 15% 991 16%
Growth - - -4% - 27% -
EBIT 600 13% 581 11% 755 12%
Growth - - -3% - 30% -
Financial revenues/expenses 1 0% 7 0% 56 1%
Com.
Size
2011
Com.
Size
2012
Gross Interest Expenses 48 1% 67 1% n/a n/a
FX Gains (Losses) 39 1% 9 0% n/a n/a
Other Non-Operating Revenues 94 2% 68 1% 44 1%
Other Non-Operating Expenses 197 4% 133 3% 209 3%
Net Income 465 10% 502 10% 585 9%
Growth - - 8% - 17% -
Source: Sinteza Research, Metalac
m RSD
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Sales and EBITDA
2010 2011 2012
Sales EBITDA Net Income
%
19%
17%
15%
13%
11%
9%
7%
5%
Margins
2010 2011 2012
EBITDA Margin EBIT Margin
Profit Margin
Com.
Size
SINTEZA INVEST GROUP | MTLC 2012 6

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
FX EURRSD 105.50 104.64 113.72
Balance Sheet (m RSD) 2010
Assets 5,611 100% 5,875 100% 6,613 100%
Com.
Size
2011
Com.
Size
Long-lived Assets 2,049 37% 2,077 35% 2,316 35%
2012
Growth - - 1% - 12% -
PP&E 1,988 35% 2,023 34% 1,881 28%
Other Long-lived Assets 61 1% 54 1% 436 7%
Current Assets 3,562 63% 3,798 65% 4,297 65%
Inventories 1,317 23% 1,501 26% 1,826 28%
Growth - - 14% - 22% -
Receivables 1,167 21% 1,220 21% 1,336 20%
Growth - - 5% - 10% -
Cash and Cash Equivalents 335 6% 697 12% 694 10%
Growth - - 108% - 0% -
Deferred Tax Assets 0 0% 0 0% 0 0%
Equity 3,481 62% 3,706 63% 4,028 61%
Growth - - 6% - 9% -
Liabilities 2,086 37% 2,130 36% 2,532 38%
Long-term Borrowings 394 7% 118 2% 591 9%
Growth - - -70% - 401% -
Other Long-term Liabilities 141 3% 146 2% 176 3%
Short-term Liabilities 1,552 28% 1,866 32% 1,764 27%
Growth - - 20% - -5% -
Short-term Borrowings 849 15% 972 17% 663 10%
Growth - - 14% - -32% -
Accounts Payable 494 9% 602 10% 773 12%
Growth - - 22% - 28% -
Other Short-term Liabilities 208 4% 293 5% 329 5%
Deferred Tax Liabilities 42 1% 38 1% 53 1%
Source: Sinteza Research, Metalac
m RSD
5,000
4,000
3,000
2,000
1,000
0
Asset Structure
2010 2011 2012
Long-lived Assets Current Assets
%
100%
80%
60%
40%
20%
Source Structure
Com.
Size
0%
2010 2011 2012
Equity Long-term Borrowings Short-term Borrowings
SINTEZA INVEST GROUP | MTLC 2012 7

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
ØFX EURRSD 103.04 101.95 113.04
Cash Flow Statement (m RSD) 2010
Inflows from Operating Activities 5,184 114% 5,770 112% 7,165 113%
Growth - - 11% - 24% -
Sale and Received Payments in Advance 5,009 110% 5,589 108% 6,933 110%
Growth - - 3% - 28% -
Outflows from Operating Activities 4,712 103% 5,342 103% 6,634 105%
Growth - - 13% - 24% -
Outflows to Suppliers and Payments in Advance 3,376 74% 3,896 75% 4,856 77%
Growth - - 15% - 25% -
Salaries and other Labor Costs 926 20% 1,066 21% 1,299 21%
CFO 473 10% 428 8% 530 8%
Growth - - -10% - 24% -
Inflows from Investing Activities 29 1% 476 9% 30 0%
Property Sale 1 0% 0 0% 0 0%
Outflows from Investing Activities 528 12% 208 4% 482 8%
Property Purchase 66 1% 208 4% 476 8%
CFI -499 -11% 268 5% -452 -7%
Inflows from Financing Activities 6 0% 0 0% 170 3%
Long and Short-term Loans (net inflows) 0 0% 0 0% 170 3%
Outflows from Financing Activities 272 6% 329 6% 253 4%
Long and Short-term loans and other liabilities (net
outflows)
Com.
Size
2011
Com.
Size
2012
Com.
Size
116 3% 139 3% 0 0%
CFF -266 -6% -329 -6% -82 -1%
NET INFLOWS/OUTFLOWS -292 -6% 367 7% -4 0%
Growth - - - - - -
Source: Sinteza Research, Metalac
MAIN INDICATORS 2010 2011 2012
LIQUIDITY
Current Ratio 2.30 2.03 2.44
Quick Ratio 1.45 1.23 1.40
Cash Ratio 0.22 0.37 0.39
SOLVENCY
Debt-to-Equity 0.36 0.29 0.31
Debt-to-Capital 0.26 0.23 0.24
Debt-to-Assets 0.22 0.19 0.19
Financial Leverage 1.61 1.58 1.64
PROFITABILITY
EBITDA Margin 17.7% 15.3% 15.8%
EBIT Margin 13.1% 11.4% 12.1%
Profit Margin 10.2% 9.8% 9.4%
Operating Return on Assets – ttm 21.4% 10.1% 12.1%
Return on Assets (ROA) – ttm 8.3% 8.7% 9.4%
Return on Equity (ROE) – ttm 13.4% 14.0% 15.1%
Return on Capital (ROTC) – ttm 25.4% 12.2% 15.0%
Cash Return on Assets (CFROA) – ttm 8.4% 7.5% 8.5%
SINTEZA INVEST GROUP | MTLC 2012 8

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
Cash Return on Equity (CFROE) – ttm 13.6% 11.9% 13.7%
Source: Sinteza Research, Metalac
Shareholding Structure
Metalac has one of the best diversified
structures amongst all companies listed
on the BSE. The management owns
totally of 28.4% of all outstanding
shares. From all management, only two
people have more than 5%. The first one
has 7.6% while the second has just over
5% stake in total equity. The largest
single shareholder is Erste bank custody
account with 13.9%, while solid stake
has also Raiffeisenbank and UniCredit
bank custody accounts with 7.3% and
6.3% stake respectively.
Trading
Metalac belongs to the Belex15 index basket and is listed on the standard listing, which is second ranked
market by quality. For 2012, the gross dividend is already adopted and amount RSD 140 per share. The
dividend day is GM and was held at 26 April 2013. Better than expected results as well as expected
dividend payment lifted the share price lately, but after the dividend day, the stock contracted on usual
basis – for similar percent as a dividend yield. This was more or less expected.
Metalac is now one of the most undervalued stocks and we expect it to continue its growth on a long term
as there is no major critical risk in this paper as its sales constantly growing, the debt is small and
liquidity is at quite satisfied level. Also, the company covers large number of markets and well diversified
its product and market portfolio.
MAIN STOCK INDICATORS 2010 2011 2012 10-May-13
Price 2,148 1,600 1,740 2,250
Face Value 400 400 400 400
Book Value per Share (BVPS) 3,413 3,634 3,949 3,949
Basic Earnings per Share (EPS) - ttm 455.9 492.0 574.0 574.0
Dividend per Share (DVPS) 110.0 130.0 140.0 140.0
Dividend Yield 5.1% 8.1% 8.0% 6.2%
Price-to-Earnings 4.71 3.25 3.03 3.92
Price-to-EBITDA 2.70 2.09 1.79 2.32
Price-to-Book 0.63 0.44 0.44 0.57
Price-to-Sales 0.48 0.32 0.28 0.37
Market Cap (in m RSD) 2,191 1,632 1,775 2,295
Enterprise Value (m RSD) 3,100 2,025 2,335 2,856
Enterprise Value-to-EBITDA 3.82 2.59 2.36 2.88
Enterprise Value-to-EBIT 5.17 3.49 3.09 3.78
Source: Sinteza Research
Free Float
71.6%
Management
18.1%
Related
Parties to
Management
10.3%
SINTEZA INVEST GROUP | MTLC 2012 9

May 14, 2013
Metalac - Serbia - Manufacturing
Semi-annual update
INFO ON STOCK PRICE 10-May-13
Last Price 2,250
All-Time-High 6505
All-Time-Low 140
1M Change -4%
3M Change 18%
YTD 30%
52-Week-Change 34%
Source: Sinteza Research
RSD
2,500
2,300
2,100
1,900
1,700
1,500
Appendix
Sources
Belex, Company, Sinteza Invest Group, Bloomberg.
Analyst Certification
The views expressed in this report accurately reflect the personal views of undersigned analyst about the issuer of the security. The
undersigned analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. The
recommendation has not been disclosed to anyone prior to public release.
Disclaimer
Price and Turnover
1,300
04-May-12 04-Oct-12 04-Mar-13
m RSD
30
20
10
0
INFO ON TRADING ( RSD) 10-May-13
Last Trading Value -
5-Day-Trading Value 444,750
30-Day-Trading Value 3,455,017
90-Day-Trading Value 19,558,801
YTD Average 468,899
Last Trading Volume -
5-Day-Trading Volume 195
30-Day-Trading Volume 1,487
90-Day-Trading Volume 8,769
YTD Average 230
Source: Sinteza Research
The data in this material is of the informative nature and is intended exclusively as a basis for the further reconsideration. The company
Sinteza Invest Group ad has prepared this material with all the necessary care and based on the data it received from the sources it
believes to be reliable. Sinteza Invest Group ad does not guarantee for the accuracy, promptness, completeness and correctness of the
data in this material. The information, opinions, estimates and forecasts may well be affected by subsequent changes in market
conditions. This report does not take into account the investment objective, financial situation or particular needs of any particular
investor. Investors should obtain individual financial advice based on their own particular circumstances before making an investment
decision based on the recommendations in this report. This report is disseminated and available primarily electronically to professional
investors and may not be reproduced in whole or in part, or published for any purpose. Additional information is available on request.
%
150
140
130
120
110
100
90
80
Benchmark Comparison
Share
Price
70
07-May-12 07-Oct-12 07-Mar-13
Belex15
Index
SINTEZA INVEST GROUP | MTLC 2012 10