Presentation Essay

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Global Research - Saudi Arabia Investment Update Market Data Bloomberg Code: Reuters Code: CMP (20th Mar 2010): O/S (mn): Market Cap (SRmn): Market Cap (US$mn): P/E 2010e (x): P/Bv 2010e (x): Almarai Company (Almarai) ALMARAI AB 2280.SE SR181.7 115 20,901.2 5.573.7 14.2 3.4 • Concentric diversification leading to expansion of target market & product lines. • Strategic alliances to expand geographical network. • Operational synergies to improve margins. Hold Target Price SR 185.9 Price Performance 1-Yr High / Low (SR): 182.0 / 141.5 Average Volume: 141,761 Market Data Absolute Relative 1m 5.0% -0.8% 3m 12.5% 3.2% 12m 22.0% -32.2% Price Index Performance 7,000 6,500 6,000 5,500 5,500 4,500 4,000 190.00 180.00 170.00 160.00 150.00 140.00 130.00 120.00 Acquisition & infant food segment - Expanding production line & target market Almarai Company (Almarai) recently completed Hail Agriculture Development Company (HADCO) takeover, which will diversify its current production line from dairy to poultry products and enable it to serve the exiting target market with poultry products. Based on the given information, the company is expected to make an investment of SR2.0bn in HADCO during 2011-12 to increase its chicken handling and processing capacity and improve its existing distribution network. In addition, the expected completion of infant food segment during 1H2011 will not only expand the target market but also help the company to place itself in a better way to capture the benefits of a rising regional population. Marketing strategy - Improving operational synergies The company has a competitive edge over the other players in the local market with the ability to place its products in an effective manner through the retail outlets of Savola i.e. ‘Hyper Panda’. The acquisition of HADCO will

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