General Assembly June 15 th, 2016

Transcription

1 General Assembly June 15 th, 2016

2 1

3 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 2

4 Croatia is the biggest loser of current recession. Long-term forecast shows the slowest recovery in wider CEE region. Annual Growth Rate (CAGR*) of real GDP Realized CAGR* % Forecast CAGR* % Poland 3.0% Poland 3.6% Slovakia 1.2% Romania 3.4% Bulgaria 0.1% Slovakia 3.3% Romania -0.1% Serbia 2.9% Hungary -0.1% Hungary 2.2% Serbia -0.2% Bulgaria 2.1% Slovenia -1.2% Slovenia 1.9% Croatia -2.2% Croatia 1.7% Average 0.1% Average 2.2% *CAGR (Compound Annual Growth Rate) Source: IMF 3

5 Expected growth rates are not sufficient to stop the further growth of public debt Public debt % of GDP Sustainable debt boundary (Maastricht) Public debt General government deficit (consolidated) = -3.2% GDP Source: Limun.hr, Quarterly analyses, January

6 which has a negative impact on investors trust and employment, and is an obstacle for further macroeconomic stabilization Country risk evaluation CDS* 400 Circle size represents the size of public debt Romania Croatia 200 Poland 150 Hungary Czech Republic Slovakia Latvia Lithuania 0 AA- A A- BBB- BB+ BB BB- S&P rating * CDS credit default swap Source : Bloomberg, Eurostat 5

7 People do not have confidence in the key Croatian institutions Public trust in key government institutions of Croatia average grade* Grades from 0 no trust at all to 10 absolute trust Armed Forces President Police Forces Judiciary Parliament Government Political parties Source : Bloomberg, Eurostat 6

8 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 7

9 What makes Adris different, why are we successful despite such environment? Traditionally strong affiliation to the company Open-mindedness to new knowledge and international business experiences Passion for winning 8

10 We completed the business transformation of Adris Organization Adris group Sold to BAT in may for 505 mm EUR Transaction concluded on 30/09/ ADRIS GROUP Investments and real estate ABILIA Tobacco Tourism Healthy food Insurance (since 2014.) TDR ADRIA RESORTS CROMARIS CROATIA OSIGURANJE ADISTA MAISTRA ISTRAGRAFIKA HRVATSKI DUHANI Retail INOVINE OPRESA 9

11 Today Adris has three long-term sustainable businesses Tourism Healthy food Insurance 10

12 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 11

13 Tourism in Croatia in the long-term achieves above-average growth rates. Maistra generates more than 90 percent of income on foreign markets. Tourism spending * Average annual growth, in % Revenues* on foreign markets % of income Maistra d.d. Average = % 92% 94% Croatia Turkey Greece Portugal France Spain Italy * a share of revenue from foreign tourists in accommodation revenues Source : WTTC, McKinsey 12

14 Croatia is perceptually turning into a premium destination. Maistra shows a steady growth in the highest segment. Movement of average spending per trip in Eur Annual growth % Turkey Spain Croatia Greece Morocco France Israel Italy Tourism expenditure in (EURm) Premium destinations UAE High segment income (4*& 5*) - hotels % share of hotel income 74% 75% 82% -2 Egypt Average spending per trip EUR; Source : Euromonitor, McKinsey 13

15 Maistra is in line with the trend of sales through direct channels whose share is now +33 p.p. higher than in Change of sales structure in favor of direct channels is increasing the average price. Sale structure by channel Sales by channel, Maistra % share of accommodation income Indirect channel 66% 50% 42% 38% 33% +33 p.p. Direct channel 34% 50% 58% 62% 67% Average room rate - hotels ( in Hrk) CAGR* + 8% *CAGR = Compound Annual Growth Rate 14

16 In, the prices were increased by seven percent, and overnight stays by three percent... Operating indicators Overnight stays in % +3% Average price per night In Hrk +7% +5% 2,951 2,968 3,

17 which lead to double-digit growth of revenues and operating profit. Net profit shows a slight increase due to high one-off costs. Financial indicators Revenues and profitability in mm Hrk (% margin) Net profit In mm Hrk Revenue % % % +3% EBIT (margin) 161 (23%) 159 (21%) 202 (24%) * 16

18 Hilton Dubrovnik proved to be a successful acquisition in line with the investment policy aimed to the highest hotel segment HILTON operating indicators Occupancy in % Revenue and profitability In mm Hrk (% margin) +3 p.p. +2 p.p % % EBIT (margin) 7.1 (13%) 7.5 (13%) 13.0 (22%) Occupancy In 000 units Net profit

19 Maistra will invest more than 1.6 billion Hrk* by 2019, with objective of positioning in the growing premium segment Capacity structure Operating results Hotels, Share od Capacity 4 i 5* Sales revenue In mm Hrk +7%** 1, % % % 17% ** 2018 Net profit *Key investments (1.6 billion Hrk): Park hotel, Katarina hotel, camp Veštar, Valdaliso hotel, Amarin zone ** CAGR = Compound Annual Growth Rate 18

20 Continued positive trends in 2016, retaining the level of overnight stays with an increase in average prices by six percent. Operating indicators Hotels & Resorts Booking* in mm Hrk +8% Overnight stays in ,4% Average price per night In Hrk +6% PR PR2016. * 8. of June

21 lead to growth in revenues and operating profit, and a strong growth in net profit despite high one-off costs Financial indicators Revenues and profitability in mm Hrk (% margin) Net profit In mm Hrk Revenues % % EBIT (margin) 202 (24%) 212 (25%) F2016 F

22 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 21

23 Growing global demand for fish is primarily met by fish farming production Total fresh fish production In mm tons 200 CAGR* +3% CAGR* % Farming Caught Sour: FAO, The State of World Fisheries and Aquaculture, 2010; World Bank, Agnew et al (2009), Estimating the Worldwide Extent of Illegal Fishing ; McKinsey & Company * CAGR = Compound Annual Growth Rate 22

24 in which the production of seabream and seabass represents the fastest-growing segment Most important cultures in Europe (farming) 2011 Market share, % Salmon Production volume Mussels 15 Trout Oysters 10 5 Carp Seabream/Seabass Source: FAO; McKinsey & Company Growth rate, % 23

25 The proximity of Italian market, largest European market for seabream and seabass, is a big competitive advantage with high growth potential Proximity of Italian market and CE market Delivery in hours Revenues on foreign markets % in revenue share, Cromaris >12 h h h N & E Europe Production 0.1 Import 21.5 Italy Production Import % 71% 77% Source : APROMAR, McKinsey 24

26 Continuous investments in brand awareness and product portfolio, made Cromaris recognizable as premium product in comparison to benchmark groups on the Italian market Average fresh fish price in Italian market Price, seabass /kg Price, seabream /kg +20% +25% BM* Cromaris BM* Cromaris *Benchmark group average price on market including Cromaris which raises average prices, 2016 Source: Kontali Analyse 25

27 Cromaris continues double-digit growth in quantity and prices Performance indicators Sales quantities In 000 tons +17% Average price Hrk/kg +10% +49% +10%

28 thus driving strong sales revenue and net profit growth Financial indicators Profitability In mm Hrk (% margin) +26% 362 Net profit In mm Hrk +5x +44% x Revenues EBIT (margin) 1 (0%) 18 (6%) 24 (7%) *

29 Cromaris is on a steady path to achieve the planned 10,000 tons production by Sales In tons 10,004 Growth Cromaris has achieved 6x sales increase in period 2009, and is at the moment among eight biggest seabream and seabass producers in Europe. 6,573 7,003 By 2016 more than 630 mm Hrk has been invested into new capacities and vertical integration ensuring prerequisites for growth and higher production efficacy 1,102 Economies of scale together with brand development are the core of sustainability and profitability of Cromaris Goal is to achieve production of 10,000 tons by

30 Operating results in the first half of the year... Operating performance indicators I-V 2016 Sales quantities In tons +20% Average price Hrk/kg +7% Sales revenues In mm Hrk +29% 2,187 2,

31 confirm positive trends in growth of all performance indicators Operating performance indicators Sales quantities In tons +14% Average price Hrk/kg +4% 6,573 7, F2016 F

32 and ensure strong growth of revenue and net profit in 2016 Financial indicators Business profitability In mm Hrk (% margin) +16% 420 Net profit In mm Hrk +2,5 x Revenues ,3 6,5 EBIT (margin) 24 (7%) 33 (8%) F2016 F

33 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 32

34 Unconsolidated and poorly arranged Croatian market, both from ownership and business viewpoint, offers significant growth potential, even in comparison with Central European markets Insurance markets in EU 2014 Gross premium %GDP 8 7,4x Europe DE 6 SI AT 4 3,5x 2 HR BG PL HU SK CZ RO Source: Insurance Europe Premium per capita EUR 33

35 Croatia osiguranje stabilized its market share after a long-term period of negative trends, resulting in growth of premium Performance indicators Market share CO+CZO % 38.4 * GWP CO Group In mm Hrk, * +3.5% ,131 2,868 2, * acquisition 30/4/

36 Croatia Osigurnje follows the european trend of growth in the personal insurance segment Focus on personal* insurance which show high growth potential Average premium structure** in % Premium structure, CO in % *** 100% 100% Other 29% 32% 50% 48% Other 78% 78% 71% Personal insurance 71% 68% 50% 52% Personal insurance 22% 22% 29% Europe Germany Austria Slovenia Source : Insurance Europe * Personal insurance life and health insurance ** data for 2014 ***acquisition on 30/4/

37 Combined ratio has been decreased by 13 percentage points and company generated 110 million HRK of net profit Performance indicators Combined ratio* %, CO Group ** Net profit In mm Hrk ** p.p * Only non-life insurance ** acquisition 30/4/

38 A series of strategic initiatives have been launched to ensure strengthening of the leading position in the Croatian market Investments Growth Recovery Restructuring (structure of employees) 110 New products Operational exellence IT upgrades HR organization development Full client orientation Inflow from new products Complete business digitalization Growing regional player Sustainable, profitable business Process optimization (centralization) Business revitalization 2014 * BUDGET 2018* * net profit for CO group Note: achieved planned net profit for 37

39 In conditions of overall market decline, CO maintains stable business level and a leading market position Gross written premium I-V 2016 Overall market In mm Hrk Non-life In mm Hrk Life In mm Hrk Market 4, % 4,059 2, % 2,775 1, % 1,284 CO group (share %) Market position CO 1,372 (33.5%) 1. 1,377 (33.9%) ,098 (39.7%) 1,097 (39.5%) (20.6%) 280 (21.8%)

40 and achieves growth of all the most important indicators compared to Total revenues* In mm Hrk, CO Group +3% Combined ratio** %, CO Group -4% Net profit In mm Hrk, CO Group +54% 3,129 3, F2016 F2016 F2016 * Revenues from core business gross premium for insurers and operating revenue for non-insurers, consolidated ** Only for non-life insurance 39

41 Content Macroeconomic environment Adris transformation Business segments Tourism Healthy food Insurance Shareholders view 40

42 After completing the portfolio restructuring process Adris kept stable profits Consolidated financial indicators - Adris grupa Total revenue In mm Hrk +18% Net profit In mm Hrk -16% +21% +74% 5,485 6, , After minority interests In mm Hrk * Capital gain from sale of tobacco business not included transaction effect is 1,041 mm Hrk 41

43 which follows the trend of further growth in 2016 Consolidated financial business indicators - Adris grupa Net profit In mm Hrk +19% After minority interest In mm Hrk * 370 F * Capital gain from sale of tobacco business not included transaction effect is 1,041 mm Hrk 46

44 Adris will invest up to 4 billion HRK in tourism, healthy food production and insurance regionalization by Investments provide a strong support for business plans execution. Investment structure for period In mm Hrk (% of total investment) 3,923 (100%) 1,950 (50%) 371 (11%) 1,602 (39%) Tourism Healthy food Insurance Total 43

45 Growth, expansion and sustainability have been Groups priorities, despite that the dividend yield is above 5-year average for Croatia Dividend yield In % 5.0% 5.9% 3.4% ADRS-R-A ADRS-P-A CROBEX * CROBEX - official index of Zagreb Stock Exchange Source : ZSE 44

46 Proposed dividend is 15 Hrk per share. In the next three years dividend will be at least 15 Hrk per share. Dividend * Hrk/share Extraordinary dividend 40 Regular dividend * regular dividend for the past financial year 45

47 In period from 1994 to, the average annual return per share has been around 28 percent TSR - Total Shareholders Return* (%) Adris P-A +27.6% Adris R-A +28.4% * Total yield per share, which includes share price growth and dividend in given period (1994 ). Price for is calculated as an average of daily prices from 1/1/ to 31/12/. 46

48 Adris has successfully mastered managing new businesses and keeps achieving higher returns on investments than industry benchmarks Internal Return Rate* (average achieved annual value growth) Maistra d.d. IRR % Cromaris d.d. IRR % +2.4 p.p p.p. 11.9% 11.2% 13.6% 11.2% Maistra d.d. Cost of equity* Cromaris Cost of equity* *indicator for industry 47

49 Enterprise value increase of our businesses, and an active dividend policy and share buy-back program will ensure high return rates for shareholders in the future Main drivers of value growth for shareholders Current company market value Growth in value of businesses Dividend policy Share repurchase policy Shareholder value 48

50 Adris has sustainable and expanding businesses along with the vision for further growth, expansion and value creation for shareholders Sustainable and expanding business Adris has chosen business segments and industries that have stable growth rates and demand over the long term; the industries are not highly concentrated or globalized Current results Results in all three businesses segments show stable growth trends of all key performance indicators Further increase of shareholder value Concept of growth and viability in all businesses in the next three years is supported by investment cycle worth four billion HRK stable dividend and active share buy back program 49

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