Parvez M Chowdhury

(880) 174 167 4023; parvez@bracepl.com

ACI Limited

Rating: SECTOR PERFORM

Target Price: BDT 675

January 2010
Company Summary
52-week Price Range (BDT)
Current Price
12-month Target Price
Dividend Yield
Total Return
Number of Shares MM
Market Cap BDT MM

370 - 548.8
509.7
675
2%
17%
19.4
9,890.2

BDT MM
Revenue
Ops Income
Net Income

2008A
2009E
2010E
10,341.4 11,050.6 13,632.4
947.5 1,001.0 1,239.2
932.9
784.7
465.4

Margins

2008A

2009E

2010E

30%
9%

29%
9%

29%
9%

9%

7%

3%

Growth
Revenue Growth
Operating Income Growth
Net Income Growth

2008A
80%
55%
156%

2009E
7%
6%
-16%

2010E
23%
24%
-41%

Per Share
EPS
Dividend
Book Value/Share

2008A
48.08
10.00
144.92

2009E
40.44
10.00
175.36

2010E
23.98
10.00
189.34

2008A
2009E
-1,514.2
578.4
-1,212.1 -1,500.0
-161.7
-194.0

2010E
1,114.9
-679.5
-194.0

Gross Margin
Operating Margin
Net Margin

Cashflow BDT MM
Operating
Capex
Dividend
Valuation
P/E
P/B
ROE

2008A
10.6x
3.5x
33%

Miscellaneous BDT MM
Total Debt
Cash
Debt/Equity

2008A
4,944.8
233.8
176%

2009E
12.6x
2.9x
23%
2009E
5,259.9
-566.8
155%

2010E
21.3x
2.7x
13%
2010E
5,729.5
144.3
156%

ACI Limited is one of the largest and most recognized pharmaceuticals

manufacturing companies in Bangladesh. Maintaining the legacy of its
predecessor company British ICI, ACI has good manufacturing practices
and technical leadership in its flagship pharmaceuticals business.
However, the company has expanded its business beyond
pharmaceuticals encompassing agro-chemical, animal health, agromachinery, consumer brands and retail chains. Since the company has
been expanding its business horizon rather aggressively for the last few
years, ACI has found itself in a cash crunch, which ultimately led the
company to resort to a fair bit of leverage. Despite cash constraint, ACI is
one of the more consistent dividend paying companies in the local
market.
We initiate our coverage of ACI Limited with a Sector Perform
rating and a 12-month target price of BDT 675. Our
recommendation considers the superior revenue generating ability
of pharma business and the growth potential of ACIs agro-chemical
business
whose merits are somewhat counteracted by the
expansion into consumer brands and retail chain business. Our
price target is based on a P/E ratio of 18x expected 2011 EPS of BDT
39.44 and 3.0x expected 2011 book value of BDT 222.03. We believe
that despite its upside potential, significant risk remains because of
ACIs over-leverage and over-extension. Our target price is
predicated upon ACI being able to improve its cash position by
issuance of zero-coupon bonds, improvement of the retail business
or outright divestment, and making sizable profit on its consumer
item (salt, flour) businesses.
Table 1: Performance Snapshot

Sales

2006

2007

2008

2009E

2010E

2011E

4,237.9

5,756.8

10,341.4

11,050.6

13,632.4

16,139.4

27%

36%

80%

7%

23%

18%

MM BDT

452.6

609.7

947.5

1,001.0

1,239.2

1,639.1

33%

35%

55%

6%

24%

32%

MM BDT

139.7

364.2

932.9

784.7

465.4

774.8

3%

161%

156%

-16%

-41%

66%

MM BDT

YoY Growth
Operating Income
Operating Margin
Net Income

1200000

YoY Growth

500

1000000

Net Margin

400

800000

Dividend/Share

BDT

300

600000

Total Debt

200

400000

Total Assets

100

200000

600

12-month Price Performance

3%

6%

9%

7%

3%

5%

6.00

8.50

10.00

10.00

10.00

10.00

MM BDT

1,776.0

3,024.0

4,944.8

5,259.9

5,729.5

5,029.5

MM BDT

3,716.3

5,911.9

9,409.3

10,392.9

11,435.8

11,533.0

Debt/Asset

61%

64%

66%

63%

63%

56%

Debt/Equity

146%

168%

176%

155%

156%

117%

Source: Company Annual Reports

Volume

Close

ACI Limited
(DSE, CSE: ACI)
Business
Advanced Chemical Industries Limited (ACI) is a leading and fast growing pharmaceutical industry
in Bangladesh which was incorporated when ICI Plc of UK had sold their pharmaceutical business
in 1992. At that time the name of the Company was changed to ACI Limited. ACI inherited the rich
ICI culture of product quality, customer service and social responsibility and continues to nurture.
ACI is the first company in Bangladesh to obtain certification of ISO 9001 Quality Management
System in 1995. ACI is also the first Company in Bangladesh to get certification of ISO 14001
Environmental Management System in 2000.
In what was primarily a Pharmaceutical business in 1992 with a turnover of Tk.80 million with
stagnant growth, the new management brought about fundamental changes in policies and has in
the year 2005 grown to over Tk. 3413.05 million in turnover through diversified business interest
including personal care products, food products, animal health, agrochemicals and seeds in
addition to gaining a strong position in Pharmaceuticals.
ACI represents principals like AstraZeneca, UCB, Searle and Fujisawa in Pharmaceuticals business;
Colgate-Palmolive, Heinz & Dabur in Consumer Products sector; Syngenta in Agrochemicals;
Ranbaxy, Dabur, Wockhardt, Sanofi and Invesa in Animal Health sector.
Industry
One of the fastest growing sectors with an annual average growth rate of 14-16%, Bangladeshs
pharmaceutical industry contributes to almost 1.3% of GDP. The market size was around BDT 39.0
billion in 2007. Local companies and MNCs together meet 95% of the countrys drug demand but
the local manufacturers dominate the industry; they enjoy approximately 87% of market share,
while multinationals hold a 13% share. Another notable feature of this sector is the concentration
of sales among a very small number of top companies. The top 15 players or 6% of the
manufacturers control around 73% of the market share.
Given the country's lack of spending power, the pharmaceutical market remains tiny in
comparison with the population size. Pharmaceutical spending is amongst the lowest in the world
in per capita terms. Healthcare expenditures consist of only 3.4% of GDP. However, the increased
awareness of healthcare and the governments increased expenditure in this sector is causing the
demand to increase in this sector.
Growth and margins
ACI has been enjoying formidable growth in sales with a 4-year CAGR of 33%. Operating profit
growth also remains respectable. Net profit growth, however, is not so impressive. ACI witnessed
a large jump in net profit growth in the last
Table 2 and 3: Growth and Margin
couple of years (161% in 2007 and 156% in
2008). These abnormal growths were a direct
2006 2007 2008 2009 2010 2011
Sales growth
27%
36%
80%
7%
23%
18% result of profit from sale of shares and
Operating profit growth
33%
35%
55%
6%
24%
32% investments. Since these extra-ordinary items
Net profit growth
3% 161% 156% -16% -41%
66% are unlikely to be recurring in the future, we
estimate the net profit growth will become
2006 2007 2008 2009 2010 2011 negative for 2009 and 2010 which already look
Gross Margin
35%
35%
30%
29%
29%
29% to be a testing period for the company. The
Operating Margin
11%
11%
9%
9%
9%
10% profit growth rates took a hit as the company
Net Margin
3%
6%
9%
7%
3%
5% expanded aggressively to consumer brands and
retail business. However, we expect the profit
Source: Company Annual Reports and BRAC EPL Estimates

ACI Limited
(DSE, CSE: ACI)
growth to return to positive from 2011 when these segments start to produce profit themselves.
ACIs margins have been consistent and we expect them to remain similar for a while.
Outlook for 2009
From its recently published 3Q09 report, 2009 does not seem to be a very good year for ACI.
Although consolidated revenue increased by 15% from BDT 7,378.9mn in 3Q08 to 8,466.4mn in
3Q09, gross profit increased by only 9% from BDT 2,261.7mn to 2,468.5mn. Net profit increased
from BDT 256.0mn in 3Q08 to 437.4mn in 3Q09. However, if extraordinary income of BDT
512.8mn from sale of share is removed, profit before taxes becomes close to zero for the first three
quarters of 2009. It appears that ACI is achieving its sales growth mostly from high volume low
margin retail business lines. The company is rapidly growing its food, salt, flour and logistics
business by committing management resources and large amount of capital. Although these are
only the beginning years for these businesses with initial high capital outlays and operating
expenses, the low gross margins do not foretell of very high profits in the future.
Higher leverage and worsening cash situation
ACI continued increasing its leverage through 2008 and the first nine months of 2009. Current
total debt is over BDT 4.5 billion, which is about 50% higher than that in end-2007. Current debt
to equity ratio is about 150%. Increase in debt, especially short-term debt occurred mainly
because of higher working capital requirements. Since year-end 2007, ACIs non-cash working
capital increased by 80% by the end of 2008 and by 140% by the end of 3Q09. Most of this
increase in working capital has been financed by short-term debt. Since the end of 2007, bank
overdraft and short-term bank loan increased by 70%. ACI plans to increase the number of retail
stores from 12 at the beginning of this year to 125 by 2010. This would require further increase in
working capital. Higher short-term debt has significantly increased ACIs financing costs. ACI paid
BDT 220.5mn in financing cost for all of 2007. Financing costs during the nine months in 2009 is
close to BDT 450.0mn. It appears as if ACI is borrowing short-term debt only to meet its interest
expense. Currently ACI is in a negative cash position of BDT 3.5 billion (excluding long-term debt),
compared to -4.0 billion in end 2008. A welcome respite in cash crunch came from the divestment
of ACI Formulations shares. Since ACI separately listed ACI Formulations in 2008, it has sold 35%
of the total shares for a total of BDT 1,350 million. It may prove desirable if not necessary for ACI
to divest from some other businesses, especially unrelated retail businesses that need to be
decoupled from the pharma and chemicals businesses.
A still attractive company, but needs clear direction
ACIs Pharma business is still growing at a steady pace and is very profitable. Compared to an
industry average of about 45%, ACI pharma achieved a gross margin of over 50% last year and
56% YTD 2009. It is investing heavily in novelty drugs such as anti-cancer, respiratory drugs and
metered dose inhalers. In a market with strong pharmaceuticals manufacturers and almost no
local producer of raw materials, ACI has a heads up through its investment in novel drug delivery
systems (NDDS).
In the separate but related business of agrichemicals, ACI has correctly identified the need for
producing and marketing high value-adding agro-supplies such as pesticides and nutrients. With a
growing population, limited land and increasing demand for high-value food, demand for agroinput will continue to grow. The gross margins from this business segment is similar to
pharmaceuticals.
ACIs justification for expanding into the retail consumer market is not too convincing. Although it
is a fact that huge inefficiency remains in this market, ACI is not the best placed company to take

ACI Limited
(DSE, CSE: ACI)
advantage of this inefficiency. Already there are a number of contenders for the high-end and
organized grocery market. It is a far-fetched plan that ACI would source the supplies for its chainstores from the farmers that use its agro-nutrients. There is a likelihood that ACI would be able to
get this business off the ground and break-even in the next couple of years, but it would not be as
profitable as that of the core pharma and chemicals business. We believe that despite the
challenges, ACI is a potentially good investment. In Bangladesh, there are not many professional
management teams that investors can bet on. ACI has the legacy of a multinational management
culture, a sound product line in pharma and chemicals, and a vision about improvement in
demographics and in commercial farming. We believe with the offering of the zero-coupon bonds,
ACI has taken the right step towards improving its business fundamentals. Before any new
investment in ACI, it needs to be seen how well they execute the retail consumer item business.
Improving cash position - ACI 20% Convertible Zero Coupon Bonds
ACI has finalized the pricing of its convertible zero-coupon bonds. A total of 1.3 million of bonds
would be offered (60% private placement, 40% public offer) at a face value of BDT 1,000 each, for
a face value of BDT 1.34 billion and an issue value of BDT 1.0 billion. The bonds will mature in five
years with an implied interest rate of 10.5%. Five bonds in a lot will have five different maturity
dates at the end of each year and one bond from a lot will mature at the end of each year. At
maturity of each respective bond, repayment will be made with 80% in cash and 20% in ordinary
common shares. The conversion price at each maturity date would be 110% of the book value at
the date of the last audited financial statement.
The zero-coupon bond goes a long way to finance fixed capital needs, repay some of the shortterm debt and plug working capital needs. The implied interest rate (10.5%) is fairly low
compared to what ACI has been paying (in excess of 14%). All these come at a price which is
dilution of shares. However, Total dilution over a period of five years is less than 5%. This is a
good deal for ACI.
With such cash constraints, ACI is better advised to stop cash dividend and retain cash instead.
That does not seem likely because of a large family holding and for the likely effect on stock prices.
Outlook for various business segments
Pharmaceuticals:
Pharmaceuticals still constitutes the largest (24% of revenue) and most profitable business
segment for ACI Limited. ACI achieved over 30% growth in the pharma segment in the last four
years and lifted itself to 6th in ranking by revenue among pharma manufacturers in the country,
compared to 9th position in 2007. During this time of growth, ACI maintained and improved its
profitability. Compared to an average of 45% for the listed pharmaceutical companies, ACI
managed over 48% gross margin in the last four years. ACI has a wide range of pharma products
that includes legacy ACI brands as well as products from global manufacturers such as xx and xx.
The company has a wide range of products in antibiotics, gastro-intestinal and cardiovascular
classes as well as vitamin and mineral supplements and respiratory products. ACI has launched 43
new products and has been adding new respiratory and anesthetic products. The company plans
to derive further growth from novelty products such as metered dose inhalers (MDI). The new
MDI product line was launched in late 2009. The company also produces novel drug delivery
systems (NDDS) which it uses for its own consumption as well as sells to other manufacturers.
Although export sales increased over 70%, this is still a small source of sales and does not
significantly impact total revenue. We expect the pharma division to continue its growth and
profitability. Because of its expansion programs and introduction of new lines and products, we

ACI Limited
(DSE, CSE: ACI)
estimate the pharma segment to grow at a rate of 25% over the near-term. We also expect this
segment to maintain a high gross margin.
Consumer brands:
ACIs consumer brand segment (18% of revenue) has performed as a high volume profitable
business in the past. This was mainly because of its commanding market share and excellent name
recognition in some of its household hygiene and cleaning products. ACIs aerosol insect spray has
remained a ubiquitous household product for the last 30 years without any competition. The
Savlon brand is universally recognized as a potent antiseptic liquid. Savlon liquid and antiseptic
crme do not face any material competition in the antiseptic product market. Both aerosol spray
and Savlon command over 70% of the market share in their respective markets. ACI has
complemented such brand names with other personal hygiene and household cleaning product.
The consumer brand segment has achieved over 25% sales growth over the last four years, albeit
with a thin gross margin of about 23%. We expect these levels to continue in growth and margin
for the consumer brands.
Agribusiness and Animal health:
Animal health is a part of ACIs agribusiness division, part of which has been divested with the
listing of ACI Formulations. This segment constitutes about 20% of the total revenue. While the
seeds, fertilizer and cropex are high-volume low-margin businesses, certain parts of the business
such as animal health generate a healthy gross margin (about 40%). This segment gives the
company an exposure to the ever-expanding and rapidly commercializing agriculture sector in
Bangladesh, especially in dairy, poultry and aquaculture industries. As a low-income country,
Bangladesh still has a low per capita protein intake. Traditionally, protein needs of the country
have largely been met by homestead-based livestock farming and natural sources such as riverfish, as well as vegetable protein. However, with a growing middle class, demand for animal
protein is growing rapidly. ACI produces feed for dairy, poultry and aqua farming as well as
manufactures vaccines. The growth potential for this business is huge as commercial farmers get
used to standard feed and vaccines. However, the industry itself is on weak grounds as farmers
cope with a number of adverse business conditions such as the outbreak of the avian-flu. The seed
and fertilizer businesses are also affected by the governments agro-input distribution policies,
which change based on macroeconomic conditions and election cycles. Consequently, we expect
ACIs agribusiness to continue to grow at an uneven pace.
ACI Food, ACI Salt and ACI Pure Flour:
These are ACIs high volume low margin businesses that were launched in the last two years. They
constitute about 20% of the revenue but less than 10% of the gross profit. Through these three
segments, ACI serves the retail food market in spices, other food-ingredients, salt and flour. The
retail food market in the country is highly fragmented where many different processors, especially
no-name small companies operate. As there is no clear volume or quality leadership in this
market, it is possible that one or more brands will eventually dominate this market. However, that
is a long-time quest for somebody else and it is not clear why a specialist pharmaceuticals and
chemical products company that is completely inexperienced in retail food products decided to
pursue this market. While ACI boasts of high growth and brand name recognition, these
businesses did little to the bottom line except padding up revenue and making an aggregate loss of
about BDT 100Mn in 2008.

ACI Limited
(DSE, CSE: ACI)
ACI Logistics:
ACI logistics is another of the companys new and highly ambitious but unrelated businesses. ACI
logistics is in the business of owning and operating neighborhood retail stores. It would be
competing with two other successful local retail chains in the urban areas, namely Agora and
Nandon, each with about 30 stores. These chains are targeted at affluent urban centers and are
limited to the two major cities in the country. Although the concept is new in the country, these
two and other smaller chains have gained a foothold as suppliers of standard, higher quality
grocery and other food products at a clean environment and fixed price. However, the target
market of high middle class consumers is small with a limited growth. ACI states that it has a
separate clientele in mind for its chain Swapno, namely the middle class who aspires for the
same services but are not willing to pay high prices. Consequently, Swapno has targeted less
affluent neighborhoods with low-rent smaller stores. ACI management correctly points out that in
the grocery market, there exists a huge supply chain inefficiency. There is a large gap between the
price received by the grower and the price paid by the end-buyer. Also, significant improvements
can be made by standardizing the farming, contracting, procurement and transportation practices.
While that part is true, ACIs plans to capture the retail grocery market is surprisingly unrealistic.
It initially planned to open up to 125 stores by 2010 from a base of 12 in 2008. It lined up a
syndicated loan of BDT 125.0mn to finance the fixed cost for the stores. However, the challenges of
such rapid growth such as logistics, working capital financing and management of individual
stores caught up and the company has trimmed its growth to a total of 60 stores in the first year.
Initially, the toughest challenge appears to be financing the initial fixed cost of opening the stores
as well as meeting the huge working capital requirement of stoking the stores.
ACI Motors and other segments:
ACI motors is in the business of sales and distribution of agro-machinery and light commercial
vehicles, mostly Indian brands. This is another way for ACI to take an exposure in the commercial
farming industry. With a very low capital intensity in the agricultural sector in Bangladesh and a
demand to quickly increase productivity, this business is expected to grow in the future. However,
until recently this segment has proved to be another high-volume low-margin business for ACI.
Until the associated spare parts, service and other high value-added products are added, this
business would continue to remain low-margin.

ACI Limited
(DSE, CSE: ACI)
Valuation
We made several assumptions to determine a fair value for ACI

ACI completes the convertible zero-coupon bond transaction by early 2010

Gross margin for the pharma and agro-chemicals segment remain high and then levels off to
the industry average in the longer terms

Gross margin for the consumer and retail segments stabilize at the 20% level

Selling, general and operating costs accelerates because of expansion of the consumer and
retail items during the initial years; expense growth rate slows down in the later years when
the retail businesses mature

ACI pays off its short term debts first and maintains a D/E ratio of about 30%.

Table 4, 5 and 6: Valuation

Discounted FCF

2008

Operating Cash

2009

2010

2011

2012

2013

2014

2015

578,368,698 1,114,949,068 1,231,726,511 1,410,844,831 1,690,114,889 1,788,059,630 1,967,010,983

Capital Expendture
Change in Debt

-1,500,000,000

-679,457,053

315,090,975

469,599,385

-606,540,327

905,091,401

-467,678,231

-424,931,576

-451,216,003

-479,126,271

-700,000,000 -1,070,816,761 -1,200,000,000

-200,000,000

-200,000,000

64,048,280

-400,178,280
-60,150,210

65,183,313 1,136,843,627 1,287,884,712

Net Terminal Value

21,037,902,697

Terminal Value

23,396,572,260

Terminal Debt

2,358,669,563

Net free cash flow

Discount Rate
Terminal Growth Rate

-606,540,327

905,091,401

15.0%
9.00%

64,048,280
NPV
NPV/Share

-60,150,210

65,183,313

1,136,843,627 22,325,787,409

11,050,450,933
569.49

Source: BRAC EPL Estimates

Other Pharmaceuticals
Square Pharmaceuticals
Beximco Pharmaceuticals
Renata
Reckitt Benckiser
GlaxoSmithKline
Average
ACI

Price 2008 EPS

2938.25
125.25
164.71
3.61
9970.25
303.37
1252.31
35.05
640.21
11.87
428.81

18.16

P/E
23.46
45.63
32.86
35.73
53.94
38.32

BVPS
659.32
69.14
438.37
92.46
75.72

P/B
4.46
2.38
22.74
13.54
8.45
10.32

23.62

144.92

2.96

ACI valuation
2011 estimates
Multiple
Target price

EPS
39.41
18.0
709.40

BVPS
222.03
3.0
666.08

Source: BRAC EPL Estimates

We believe 2009 and 2010 will continue to be transition years for ACI and would not reflect its
real earnings potential. Based on 2011 earnings and book value, and a 18x P/E and 3.0x P/B, we
derive a target price of BDT 675 in 2011. With an average 2.0% dividend yield, this price target
would provide a 17% total return in 12 months.

ACI Limited
(DSE, CSE: ACI)

Table 7: Income Statement

Revenue

2006

2007

2008

2009E

2010E

2011E

4,237.9

5,756.8

10,341.4

11,050.6

13,632.4

16,139.4

Cost of sales

2,770.6

3,749.1

7,289.4

7,839.5

9,734.9

11,433.8

Gross profit

1,467.2

2,007.7

3,052.0

3,211.2

3,897.5

4,705.6

Admisnistrative expenses

119.0

171.1

321.8

331.5

409.0

484.2

Distribution expenses

193.3

252.4

277.1

331.5

409.0

484.2

Selling expenses

702.2

974.5

1,505.7

1,547.1

1,840.4

2,098.1

Operating profit

452.6

609.7

947.5

1,001.0

1,239.2

1,639.1

56.1

83.2

68.1

63.5

67.7

70.6

508.7

692.9

1,015.6

1,064.5

1,306.9

1,709.7
0.0

Other income
Result From opeating activities
Profit from sale of shares

0.0

86.2

639.3

512.8

0.0

37.0

3.8

0.9

0.0

0.0

0.0

EBIT

471.7

775.3

1,654.0

1,577.3

1,306.9

1,709.7

Financing cost

163.7

220.5

523.8

642.8

631.2

584.7

308.0

554.7

1,130.2

934.5

675.7

1,125.0

Share of Profit equity accounted investees

Provision for contribution to WPPF

17.7

28.6

35.5

46.7

33.8

56.3

290.4

526.1

1,094.6

887.8

641.9

1,068.8

Current tax expense

165.6

177.6

194.6

103.1

176.5

293.9

Deferred tax income

14.9

15.7

32.8

0.0

0.0

0.0

139.7

364.2

932.9

784.7

465.4

774.8

7.20

18.77

48.08

40.44

23.98

39.41

2006

2007

2008

2009E

2010E

2011E

Net Income

784.7

465.4

774.8

Add back non cash expense

274.3

339.7

374.1

Change in working capital

-480.6

309.8

82.7

1,114.9

1,231.7

Profit before tax

Income tax expenses:

Profit after tax

Earning per share (adjusted for current number)
Source: Company Annual Reports and BRAC EPL Estimates

Table 8: Cash Flow Statement

Operating Activity

Cash Flow from operations

76.4

-412.0

-1,514.2

578.4

-1,500.0

-679.5

-467.7

-123.8

-709.0

-194.9

-1,500.0

-679.5

-467.7

315.1

469.6

-700.0

0.0

0.0

53.4

-194.0

-194.0

-194.0

275.6

-840.6

Investing Activity
Capital Expenditure
Cash Flow from Investing
Financing Acitivity
Change in Debt
Newly issued shares
Dividend Paid
Cash flow from Financing

154.6

Net cash
Beginning Balance
Cash Balance
Operating cash flow per share
Source: Company Annual Reports and BRAC EPL Estimates

1,008.1

965.0

121.1

107.2

-112.9

-744.2

-800.6

711.1

-76.6

983.7

1,090.9

978.0

233.8

-566.8

144.3

1,090.9

978.0

233.8

-566.8

144.3

67.7

3.94

-21.23

-78.04

29.81

57.46

63.48

ACI Limited
(DSE, CSE: ACI)

Table 9: Balance Sheet

2006

2007

2008

2009E

2010E

2011E

1,239.2

1,583.0

3,144.3

2,850.7

3,245.0

3,277.4

Debtors

524.4

1,051.6

1,958.5

2,310.5

2,408.4

2,456.2

Advances

300.8

482.9

576.6

1,076.6

576.6

576.6

28.9

27.6

13.0

13.0

13.0

13.0

Inventory

Inter-company receivable
Cash and bank balances

47.5

82.6

233.8

-566.8

144.3

67.7

Total current assets

2,140.8

3,227.7

5,926.1

5,684.0

6,387.2

6,390.9

PPE Net

1,393.4

1,949.9

2,975.5

4,201.2

4,540.9

4,634.4

39.4

567.5

265.0

265.0

265.0

265.0

104.7

104.7

108.3

108.3

108.3

108.3

Capital work-in-progress
Intangible assets
Investment

38.1

62.0

134.5

134.5

134.5

134.5

Total non-current assets

1,575.5

2,684.1

3,483.2

4,708.9

5,048.6

5,142.1

Total assets

3,716.3

5,911.9

9,409.3

10,392.9

11,435.8

11,533.0

Bank overdraft

166.1

314.2

1,209.6

1,200.0

1,000.0

500.0

1,178.7

1,915.0

2,870.8

3,200.0

2,870.8

2,870.8

46.2

154.8

232.9

232.9

232.9

232.9

Creditors

505.4

759.4

1,313.4

1,391.3

1,693.2

1,856.2

Other current liabilities

237.4

338.5

344.8

340.3

339.1

339.1

2,133.8

3,481.9

5,971.6

6,364.5

6,136.1

5,799.1

1,000.0

800.0
313.3

Short term bank loan

Long term bank loan- Current portion

Total current liabilities

Zero coupon bond

Long term bank loan

44.5

281.2

313.3

313.3

313.3

Other liabilities

325.6

348.6

312.4

312.4

312.4

312.4

Long term liabilities

370.1

629.8

625.7

625.7

1,625.7

1,425.7

2,503.9

4,111.7

6,597.3

6,990.3

7,761.8

7,224.8

Share capital

161.7

161.7

161.7

194.0

194.0

247.5

Share premium

250.0

250.0

250.0

250.0

250.0

250.0

Reserves

309.5

602.0

598.9

598.9

598.9

598.9

Retained earnings

411.9

693.7

1,493.3

2,051.6

2,322.9

2,903.7

1,133.1

1,707.4

2,504.0

3,094.6

3,365.9

4,000.2

79.3

92.8

308.0

308.0

308.0

308.0

3,716.3

5,911.9

9,409.3

10,392.9

11,435.8

11,533.0

62.48

92.77

144.92

175.36

189.34

222.03

Total liabilities

Total equity

Minority interest

Total equity and liabilities

Book value per share

Source: Company Annual Reports and BRAC EPL Estimates

ACI Limited
(DSE, CSE: ACI)

Table 10: Indicators

2006

2007

2008

2009

2010

2011

Sales growth

27%

36%

80%

7%

23%

18%

Operating profit growth

33%

35%

55%

6%

24%

32%

3%

161%

156%

-16%

-41%

66%

Pharma and chemicals

34%

37%

28%

34%

36%

37%

Consumer and retail

66%

63%

72%

66%

64%

63%

Gross margin

35%

35%

30%

29%

29%

29%

Operating margin

11%

11%

9%

9%

9%

10%

EBITDA Margin

14%

16%

18%

17%

12%

13%

3%

6%

9%

7%

3%

5%

0%

0%

6%

6%

6%

6%

Inventory turnover

224%

237%

232%

275%

300%

349%

Sales/assets

114%

97%

110%

106%

119%

140%

7.0

-254.2

-45.4

-680.5

251.1

591.8

100%

93%

99%

89%

104%

110%

Return on equity

12%

20%

33%

23%

13%

18%

Return on assets

4%

6%

10%

8%

4%

7%

Debt/equity

146%

168%

176%

155%

156%

117%

Debt/assets

61%

64%

66%

63%

63%

56%

Growth:

Net profit growth

Segment contribution to revenue:

Margins:

Net margin

Ratios:
Depreciation/assets

Working capital (MM BDT)

Working capital ratio

Leverage:

Per share:
EPS

7.20

18.77

48.08

40.44

23.98

39.41

CFPS

3.94

-21.23

-78.04

29.81

57.46

63.48

BVPS

62.48

92.77

144.92

175.36

189.34

222.03

P/E

59.0x

22.6x

8.8x

12.6x

21.3x

12.9x

P/B

8.2x

5.5x

3.5x

2.9x

2.7x

2.3x

Multiples:

Source: Company Annual Reports and BRAC EPL Estimates

ACI Limited
(DSE, CSE: ACI)
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