"Lambumiz," a leader in the production of non-aseptic packaging for dairy products in Russia, has announced its intention to enter the capital market through an IPO on the Moscow Exchange. In recent years, the company has demonstrated dynamic growth and is now looking to expand its business by filling the gap left by the exit of the international giant Tetra Pak. For investors, this IPO represents an opportunity to invest in a company poised to significantly strengthen its position in the packaging market amidst ongoing supply chain instability. This article will delve into Lambumiz's strategy, financial results, funding plans, and assess future prospects.
Main Business Activities
Location and Production Facilities:
Lambumiz is based in one of Moscow's industrial parks, occupying a 2.5-hectare site that includes production and warehouse facilities totaling over 20,000 square meters. This plant manufactures packaging materials for dairy products and is the largest producer of non-aseptic packaging in the country. The company's products are in demand by over 200 dairy factories, with an annual production capacity exceeding 350 million packaging units.
Product Range and Unique Offerings:
The product lineup primarily consists of Gable Top packages—cardboard boxes with a triangular lid familiar to milk consumers—and Roll Top flexible packaging, which resembles the Tetra Top product. Roll Top is a unique offering from Lambumiz, first introduced in Russia in 2022. Prior to this, similar packaging was imported, and the company became the first in the country to master its production.
Market Share and Growth Opportunities:
Currently, Lambumiz controls 35% of the non-aseptic packaging market in Russia. This segment focuses on short-term product storage, in contrast to aseptic packaging capable of maintaining a longer shelf life. In light of Tetra Pak's departure, the company plans to capture a share of the aseptic packaging market for dairy products and juices, which continues to be actively imported.
Plans to Capture the Aseptic Packaging Market
Until 2022, Tetra Pak occupied nearly 100% of the aseptic packaging market in Russia. Following its exit, manufacturers were forced to seek new solutions, leading to a significant portion of packaging needs being met through imports, which drove up product prices. By 2024, Russian companies accounted for only 12% of the market, while imports constituted over a third, and the remaining positions were still held by Tetra Pak.
Lambumiz intends to capture up to 10% of this market by 2028, which appears to be an ambitious yet attainable goal given the high demand for such materials among producers. The company plans to significantly expand its capacity to meet the demand for aseptic packaging and reduce the Russian market's dependence on imported supplies.
IPO Objectives and Investment Attraction
To realize its ambitious expansion plans, Lambumiz aims to attract at least 1.2 billion rubles. Of this amount, 800 million rubles will be allocated for constructing a new workshop covering over 14,000 square meters within the current complex, while the remaining 400 million rubles will go toward purchasing equipment for the production of aseptic packaging. The project is expected to be completed by 2027, which will allow the company to increase production volumes and market share.
Financial Results and Growth Indicators
Since 2021, the company has experienced rapid growth. Revenue has more than doubled—from 1.1 billion rubles to 2.6 billion rubles. Net profit has also shown high growth rates, reaching 391 million rubles as of mid-2024. The EBITDA figure for the first half of 2024 increased by 78.3%, totaling 215 million rubles.
Lambumiz reports a high gross profit margin (30.5%), EBITDA (20.2%), and net profit (14.1%) over the last 12 months. In the coming years, the company plans to sustain revenue and profit growth at levels of 22-25% per annum, which seems optimistic considering the current market conditions and capacity expansion plans.
Dividend Policy
According to its dividend policy, Lambumiz may distribute between 10% and 100% of net profit according to RAS as dividends, with the size of the payout determined by several factors, including investment needs. The company has a net debt of only 5 million rubles, indicating financial stability and minimal debt obligations, which is important for consistent dividend payments.
IPO Terms
- Additional Share Issuance: Shares are sold through a capital increase, allowing the company to attract capital without current shareholders selling their stakes.
- Placement Volume: Up to 1 billion rubles with a projected free float of 10-12%.
- Stabilization: Measures are in place to support the share price at placement levels, along with a market maker.
- IPO Price Range: from 425 to 460 rubles per share, corresponding to a capitalization range of 8.018 billion rubles to 8.678 billion rubles, approximately three times the company's revenue.
Applications for participation in the IPO will be accepted until October 29, with trading commencing on the Moscow Exchange on October 30, starting under the ticker LBMZ.
Lambumiz's Prospects in the Market
The Lambumiz IPO presents investors with an opportunity to participate in a unique project in the packaging market, which is becoming increasingly attractive in light of the exit of foreign companies. The company has shown high growth rates and has a clear development plan for the coming years, while shareholders demonstrate a commitment to long-term growth by opting not to sell their stakes at the IPO stage. The main challenge for the company lies in executing its ambitious plans to capture market share in aseptic packaging and successfully completing investments in new capacities.
My Opinion on the Lambumiz IPO
The Lambumiz IPO has caught my attention as an investor and entrepreneur. In my opinion, the company has chosen an opportune moment to enter the capital market; the Russian packaging market, following Tetra Pak's exit, is facing a shortage, and domestic producers have a unique opportunity to fill the void. Lambumiz aims not only to solidify its position but to become a leading player in the aseptic packaging sector, which is an ambitious goal.
What stands out to me is that Lambumiz is not just responding to market demand but is also investing in development: the expansion of production capacities and the introduction of new types of packaging demonstrate the company's foresight. It is also telling that current shareholders do not plan to sell their stakes—this is always a positive sign for investors, indicating confidence in the company's future growth.
Of course, it is important to consider the risks. Developing production, especially in the context of current economic uncertainty, is always a complex task. The success of the IPO will depend on how effectively Lambumiz can execute its stated plans and maintain the projected growth rates. However, if the company is able to achieve its goals, this project could become one of the brightest stories on the Russian stock market.
I see this IPO as a real opportunity for long-term growth and consider Lambumiz to be an interesting option for those willing to invest in the manufacturing sector under current conditions.
Disclaimer: This opinion reflects the personal viewpoint of Sergey Tereshkin, founder of Open Oil Market, and does not constitute an investment recommendation. Before making any investment decisions, it is advisable to consult with a financial advisor and consider individual goals and acceptable risk levels.
