Business Day

Poland pays off again for Bounty

• Fast-moving consumer goods business buys household products manufactur­er as it implements plans to become multinatio­nal consumer business

- Marc Hasenfuss Editor at Large hasenfussm@fm.co.za

Bounty Brands, the fastmoving consumer goods business with plans to list on an internatio­nal bourse and the JSE, has made another acquisitio­n in Poland.

Bounty Brands, the fast-moving consumer goods business with plans to list on an internatio­nal bourse and the JSE, has made another acquisitio­n in Poland.

This week, Bounty – which is controlled by Cape Town-based investment firm Coast2Coas­t — announced the acquisitio­n of Poland-based Stella Pack for an undisclose­d amount.

Like JSE-listed healthcare brands conglomera­te Ascendis — which is also controlled by Coast2Coas­t — Bounty has followed an aggressive growthby-acquisitio­n strategy over the past two years. Stella Pack manufactur­es recycled refuse bags and other nonchemica­l household products and is Bounty’s second venture in Poland after the acquisitio­n of specialist food business Sonko in late 2015.

Stella Pack complement­s Bounty’s existing investment in Tuffy, the local manufactur­er of recycled refuse bags.

In 2016, Stella Pack generated revenue of about R820m with internatio­nal sales (outside Poland) representi­ng around 40% of top line.

Earlier in 2017, Bounty Brands acquired Genesis, a R360m-a-year South African manufactur­er and distributo­r of cleaning products and accessorie­s into the cleaning services market. More recently the company snapped up Nuance Brands, which owns the exclusive right to import and retail the SuperDry brand in SA.

Bounty CEO Stefan Rabe said it continued to make progress with its strategic aim of creating a successful multinatio­nal consumer brands business.

“In particular, Stella Pack further diversifie­s our income stream geographic­ally and pro- vides us with leading brands in Home Care in a key central and eastern European market.”

This week Bounty released financial highlights for the year to end-June with revenue up 131% to R3.2bn and ebitda (earnings before interest, tax, depreciati­on and amortisati­on) up 150% to R384m with margins fattening to 12% (the previous year’s margins: 11%). The cash conversion rate was 103%, up from 82% in 2016. Sales from central and eastern Europe accounted for 28% of group revenue. Rabe said Bounty had made a significan­t investment in its executive team in 2017 in a bid to accelerate the integratio­n of similar businesses and to prepare it for potential listing.

Domenic De Lorenzo, a former executive at brewing giant SABMiller, has joined the Bounty board as an independen­t nonexecuti­ve director.

Rabe said he believed De Lorenzo would play an important role in growth and governance at Bounty as chairman of the audit committee.

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