FINEST - HALL FACTORY

Quick Pitch

FinEst-Hall Factory is expanding production and wants to raise up to 400,000 euros from Fundwise investors. The capital will be invested in the equipment and working capital.

The company's total investments are 2.7 million euros, of which 2.2 million euros are invested in equipment and 0.5 million euros in working capital. The lease will cover 1.3 million euros (48.6%) of the investments, 1.0 million euros (36.7%) will be financed by MES (decision made), and 0.4 million euros (14.7%) will be raised from Fundwise investors.

FinEst-Hall Factory OÜ is the largest manufacturer and installer of PVC halls in Estonia. The company has been operating for ten years and today employs 27 people. The production is located on rented premises, about 30 kilometers from Tallinn in Kohila Parish, Pahkla village. The leasable area is 1861m2, including an office of around 150m2. A 712-square-meter PVC coating production building is located 10 km away. The primary production makes up almost 75% of the turnover, installation about 10%, the plasma cutting machine for sale nearly 10% and other services 5% (transport, metal scrap). In 2019, the Estonian market accounted for 60% of turnover and Finland for 40%.

Last year, the company's sales revenue amounted to 4.6 million euros, a 77.3% increase compared with previous revenue. Operating profit before depreciation (EBITDA) amounted to 0.24 million euros, accounting for 5.4% of net sales. Last year's net profit was 0.12 million euros. The average number of employees for the year was 25. At the end of 2019, loan liabilities amounted to 0.45 million euros and equity to 0.32 million euros. Considering the size of debt liabilities and EBITDA, the company's debt burden is rather modest, and the risk of over-borrowing is low.

The largest customers in Estonia are sellers of grain and wood pellets, such as Baltic Agro and PK Terminal.

Steel Express Haldus OÜ (owner 100% Jaanus Laane) forms a group with the subsidiaries FinEst-Hall Factory OÜ (participation 100%; production of PVC halls) and FinEst-Hall Baltic OÜ (100%; sales of halls). In addition, Steel Express Haldus OÜ owns the existing production real estate in Rapla County, which is leased to FinEst-Hall Factory OÜ for the production of PVC halls based on a lease agreement. All equipment, tools, and stocks necessary for production are located in the balance sheet of FinEst-Hall Factory OÜ.

Problem & Solution

Problem:

Insufficient warehouse and production space for companies to increase business volume and inventories;
construction high cost and long lead time for warehouse and production premises.

Solution:

PVC hall with fast delivery and a clear price advantage;
PVC hall offers an opportunity to use the existing production area more efficiently, transferring materials, finished and semi-finished products from the production area to the warehouse area created with the PVC hall.

Product/Service Details

PVC hall consists of a construction made of galvanized steel profiles covered with a PVC cover. Galvanizing provides protection for all steel parts against corrosion in a normal environment for decades. PVC covers are produced from practically maintenance-free PVC fabric purchased from the best German and Finnish factories. All covers required for hall projects are made in-house from the purchased fabric.

The use of PVC halls is extensive: storage areas, production areas, storage facilities (pellets, grain), and various maintenance areas. The factory-made metal structures are delivered for installation on the site. The modules are formed on-site, i.e. the so-called interconnected arches are attached to the platforms with steel piles rammed into the ground. Depending on the installation method, all halls can be later moved or relocated. Also, existing halls can be easily expanded.

In addition to PVC halls, the company offers awnings and PVC tunnels if necessary. Awnings can be used as an additional and flexible space for storing goods/products, either on the side/end of an existing building or elsewhere in the territory. The PVC tunnel is a quick and easy way to interconnect different buildings.

The widths of PVC halls reaches between 10-50 meters, and the halls usable floor area from 60m2 - 6000m2. To this date, the company has installed over 180 halls, with a total volume of approx. 200,000 m2.

Business model

At present, both in Estonia and Finland, all products are sold directly to the end consumer (B2B). The installation and subsequent maintenance of the halls are also performed independently by the FinEst-Hall Factory. Metal constructions and PVC covers for production and individual projects are produced in-house. Galvanizing of structures and accessories (doors, fans, Etc.) are purchased. Local resellers/partners are planned to be used to enter new markets, including Sweden, Norway, Denmark, and Russia.

Market

The market volume of PVC halls in the target markets (Estonia, Finland, Sweden, Norway, and Denmark) is estimated at 285 million euros. In Estonia, the market volume reaches approximately 15 million euros, of which FinEst-Hall Factory has a market share of almost 20%. In Finland, the market share is about 2.5%. Determining the exact size is somewhat complicated, as the metal structure required for the halls is also produced by companies not directly involved in the production of the halls.

Traction & Accomplishments

FinEst-Hall Factory OÜ has achieved a strong market leader position in Estonia and created stable supply chains in the Finnish market.
From 2018 to 2019, the company's total business volume grew by an average of 60% per year.
In the fourth quarter of 2018, FinEst-Hall Factory started to produce their own PCV covers (till then, the company was buying in this service from outside).

How We’re Different

FinEst-Hall Factory OÜ is the largest provider of complete solutions in the field of PVC halls in Estonia.
More than ten years of experience.
Experience in managing large-scale cross-border projects.
We are striving and motivated for future developments.
We strongly believe in competitive/fair pay and profit-based performance pay, that creates a motivated and stable team.
Strong portfolio of well-known and long-term clientele.

Uses of Funds & Timeline

The company's goal is to double the current business volumes over the next five years and reach a sales revenue of 10 million euros by 2024. To achieve this goal, the company needs investments in both technology and working capital.

We also need more production space than before. A lease agreement has been signed for the new production space, and the move to the new building will take place at the end of the first quarter of 2021. The new building has twice as much production space as before, thus enabling a significant improvement in the current production efficiency, bringing together the processes that have been previously divided between two separate buildings.

The company's investment needs in the period 2020-2024 are 2.7 million euros, including 2.2 million euros in equipment and 0.5 million euros in working capital. 3D tube laser has the largest share of devices, accounting for almost 50% of the total machinery investment. The aim of the investments is to improve the speed of existing processes significantly. Thereby reducing the cost of the product, the need for additional personnel, and improving the quality of the products. The result is faster delivery, more stable quality, and a competitive price. During the forecast period, the need for working capital is estimated at 9% of sales revenue.

Investment schedule:

1. 2020: EUR 0.117 million;

2. 2021: EUR 1.45 million (including 3D tube laser in the amount of EUR 1.13 million);

3. 2022: EUR 0.3 million;

4. 2023: EUR 0.06 million;

5. 2024: EUR 0.25 million.

Obligations to Investors, Profit Distribution

The company offers its investors the opportunity to receive a share of the dividend income and increase the value of the acquired share over time. In the period 2020-2022, the company will make the investments necessary for the growth shown in the forecasts, and in this period, no dividends will be paid to investors. The earned profit will be refinanced to achieve strategic goals. The first dividend payments will be made in 2023 (for the year 2022). The company promises to pay at least 30% of pre-tax profits as dividends.

Strategically, however, the company aims to list its shares on the Nasdaq Baltic First North market to increase its visibility and transparency, providing investors with more liquidity through the possibility to trade shares and make the shares available to a large number of potential investors.

Until listing on the First North secondary market, investors will be provided with a secondary market through the Ignium digital exchange solution.

Risks and Mitigation

Name
Risk
Mitigation

COVID-19	Pro-longered lead time for cross-border installations	hedging by contracts
COVID-19	Declining demand	hedging entering new markets

Company name: FinEst-Hall Factory OÜ
Company's registration code: 12003860
Company's address: Töökoja, Pahkla küla, Kohila vald 79742, Estonia
Company's phone no.: +3725066284
Company's e-mail: jaanus.laane@finest-hall.com
Homepage | Facebook

Fundwise's e-mail: info@fundwise.me

Investment amount

200 000 - 400 000 €

Equity offered

7,34 % to 13,68 %

Equity offered per investor

250 € to 200 000 €

Current share capital

10100 €

Company current valuation

2 525 000 €

Share capital after campaign

10 900 - 11 700 €

Company valuation after campaign

2 725 000 - 2 925 000 €

1 € nominal share price

250 €

TEAM

Jaanus Laane

Founder - CEO

The soul of a team who is a great motivator and leader. He has a third eye on his neck that helps him make the right decisions daily. He has no issue transporting metal constructions by truck or helping out with installing one of our PVC halls.

Martin Ivanov

Sales Director

Martin loves sales; some say he can sell one hall faster than a baker a loaf of bread. A man with long-term sales experience who should do sales training for money as an additional hobby.

Don Eric Laane

Sales Engineer

He is acquiring a bachelor's degree in entrepreneurship and business administration from the Estonian Business School and is personally involved in expanding to Denmark. Knows the product through and out, as he has been present and assembling almost all installations. A motorsport veteran who has ridden a motorbike from an early age.

Ranno Rannamäe

Sales Engineer

A good salesman. A bachelor's degree in building construction and sales experience from the United States in his back pocket, not to mention the recognition of the thesis from the Concrete Association. Under his leadership, we will move to the Swedish and Norwegian markets.

Dmitri Voronin

Plasma Cutting Sales Manager

Under his leadership and supervision, the details are cut on the plasma welding bench and forwarded to the clients. Dmitri keeps everybody in a happy mood, and if you had some difficulties with the Russian language, he would be the first one to help you out with explaining how to write or say something.

Jaan Toomingas

Production Manager of Steel Structures

Without him, production would stop. Very helpful and knows to delegate the tasks between the production team members. His team will only say good things about him. A manager whom to see angry is as rare as to run into a lynx in the woods. In his free time, he loves to participate in every cycling marathon there is.

Kristjan Tarkmees

Installation manager

He knows every hall project by heart, just give him a hint or show a picture and he'll be able to talk about specifics about that project for hours. No matter what happens on the building site, Kristjan always finds a solution. His hobby is welding, and he has done all of the required certificates as our current employees on the production side just for his own personal development.

Harry Õunpuu

PVC production manager

PVC welding master. Thanks to his long experience with PVC coatings, he can distinguish between any type of PVC fabric possible, even during sleep. Like Jaan, his favorite hobby is to attend every existing cycling marathon.

Priidik Väljaots

Designer - Quality Manager

A designer who has graduated from the Faculty of Mechanics, who, in addition to designing our halls, puts a quality label on all our halls. Should something break down in the office or production, Priidik is already working on it! He participates in international student formula competitions in his free time, where the machines are developed and built.

Alo Juhtma

Civil Engineer

An engineer who joined the team from Tallinn University of Technology. It is under his watchful eye that our new production building is completed. If there is not enough nerve-tickling at work, it is only worth telling Alo about extreme sports, and Alo there right away.

Kristiine Valtri

Accountant

Our treasurer who oversees our liquidity and bank account. In addition, she is digitalizing the company. If someone in the office has a question about bookkeeping or economics, it is certain to ask Kristiine. The Excel spreadsheets she creates are not just Excel spreadsheets, they are advanced sheets that help company's daily life. She is a fan of formula 1 and loves to walk in the fresh air, discovering abandoned places and buildings.

Leidi-Liisa Laane

Marketing Specialist

Keeps our web and social media accounts fresh. Meanwhile makes sure that everybody around the world will get to know about FinEst-Hall Factory OÜ. She is currently studying in Denmark and acquiring a specialty in multimedia design. As a nomad, she is still working at FinEst Hall Factory and applies her newly learned knowledge in practice. She loves to read books and enjoys the beautiful landscapes that the earth has to offer

Tiit Kirsipuu

Purchasing Manager

An important link, without whom we could not even talk about production. He knows exactly how to find and get all of the raw material to our facilities in time. One of his side hobbies is project design.

Imre Noorkikas

Chief Financial Officer

Financial management services are provided by CFO Advisor.