ATLANTIC GRUPA Company of Added Value

Transcription

1 ATLANTIC GRUPA Company of Added Value Erste Group CEE and Turkey Conference, 16 January 2014, London

2 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN 2012 AND 9M 2013 STRATEGIC GUIDANCE 2

3 ONE OF THE LARGEST FOOD AND BEVERAGES COMPANIES IN THE REGION Business Fast Moving Consumer Goods Headquarters Zagreb, Croatia (Europe) Foundation 1991 No of employees 4,247 FY12 sales EUR 657 millions Key Markets CEE region, Western Europe, Russia presence on over 40 markets Production locations 14 production locations in Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Macedonia and Germany Key business segments: Key brands: The leading coffee producer in the region GRAND KAFA, BARCAFFE Prominent European company in the sports nutrition MULTIPOWER Among the leading soft drinks producers in the region CEDEVITA, COCKTA, DONAT Mg Among the leading confectionary & snacks producers in the region SMOKI, NAJLEPŠE ŽELJE, BANANICA Among the leading savoury spreads producers in the region ARGETA Producer of the No1 Croatian brand in the VMS segment DIETPHARM The leading private pharmacy chain in Croatia FARMACIA The leading FMCG distributer in the SEE region International Brands (Ferrero, Wrigley...) The region includes: Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia and Kosovo; Reporting currency HRK, all figures translated at EUR/HRK FX rate of 7.5 3

4 DISTRIBUTION DISTRIBUTION & PRODUCTION VERTICAL INTEGRATION DEVELOPMENT CYCLE: EXTENSIVE M&A TRACK RECORD European company National company Cooperation Johnson & Johnson Cooperation Duracell Distribution center Rijeka Distribution center Osijek Distribution center Split Cooperation Wrigley Regional company Acquisition of Melem Atlantic Slovenia Atlantic Macedonia Acquisition of Neva Acquisition of CEDEVITA Atlantic Serbia Representative office B&H / Acquisition of Kalničke vode Bionatura Acquisition of DROGA KOLINSKA Acquisition of pharmacies Farmacia IPO Acquisition of Fidifarm & Multivita Representative office Moscow Acquisition of Haleko & Power Gym: MULTIPOWER Sales, EURm CAGR : +40.2% * *: Pro-forma consolidated with Droga Kolinska 4

5 ATLANTIC GRUPA S BUSINESS MODEL TODAY SBU SBU SBU SBU SBU SBU COFFEE BEVERAGES SPORTS AND FUNCTIONAL FOOD PHARMA AND PERSONAL CARE SAVOURY SPREADS SNACKS SDU SDU SDU SDU RUSSIAN MARKET Croatia Slovenia, Serbia and Macedonia HoReCa Hotels, Restaurants, Cafes International Markets All markets outside the region*, Russia and CIS Baby food, All products in Russia and CIS Reorganization in 2012 with an aim to manage business segments and distribution markets in a more efficient manner The new business organisation includes six Strategic Business Units (SBU), four Strategic Distribution Units (SDU) and Russian market *The region includes: Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Montenegro and Macedonia 5

6 Distribution Sports and functional food Baby food Snacks Pharma Savoury spreads Personal care Coffee Beverages PRODUCT/DISTRIBUTION PORTFOLIO OVERVIEW Turkish Coffee Espresso coffee Instant coffee Carbonated soft drinks Vitamin instant drinks Functional waters Waters Tea and Functional tea Meat spreads Fish spreads Sandwiches Body care Face care Lip care Tooth care Savoury snacks Chocolate tablets Wafers & Biscuits Bars Food supplements OTC products Pharmacy chain Sports food Weight management range Energy range Body building range Baby cereals Milk formula Tea Water Biscuits Own brands International brands 6

7 ATLANTIC GRUPA S GREATEST ASSETS Croatia Serbia Slovenia Bosnia and Herzegovina Macedonia Germany Italy United Kingdom Austria Switzerland Ukraine Brands with key market positions - among the top 3 in their category based on latest available data. Market position ranking based on volume (items) market share. Data source: Nielsen Retail Panel, PharMIS and company data 7

8 GEOGRAPHIC PRESENCE AND MACROECONOMIC ENVIRONMENT Sales by countries Russia and CIS 5.0% Western Europe** 7.3% Other regional markets* 6.4% Bosnia and Herzegovina 7.6% Slovenia + production facility in Germany Croatia Other markets 8.9% Bosnia and Herzegovina Slovenia 13.2% Croatia 26.6% Serbia 24.9% Overview of production facilities Serbia Macedonia Croatia f 2014f GDP (yoy) (2.3%) 0.0% (2.0%) (0.7%) 0.5% Unemployment 11.8% 13.5% 15.9% 16.9% 16.7% CPI (yoy) 1.1% 2.2% 3.4% 2.6% 1.8% EUR/HRK Serbia f 2014f GDP (yoy) 1.0% 1.6% (1.7%) 1.7% 1.5% Unemployment 19.2% 23.0% 23.9% 24.0% 24.0% CPI (yoy) 6.1% 11.1% 7.3% 8.2% 4.9% EUR/RSD Slovenia f 2014f GDP (yoy) 1.3% 0.7% (2.5%) (2.7%) (1.0%) Unemployment 7.3% 8.2% 8.9% 11.1% 11.6% CPI (yoy) 2.1% 2.1% 2.8% 2.1% 1.9% EUR/USD Germany f 2014f GDP (yoy) 4.0% 3.3% 0.7% 0.5% 1.7% Unemployment 7.1% 5.9% 5.5% 5.4% 5.3% CPI (yoy) 1.2% 2.5% 2.1% 1.7% 1.7% EUR/USD Russia f 2014f GDP (yoy) 4.5% 4.3% 3.4% 1.9% 3.0% Unemployment 8.2% 6.5% 6.0% 5.4% 5.9% CPI (yoy) 6.9% 8.4% 6.6% 5.5% 5.0% EUR/RUB Sales by countries in 2012; *Other regional markets: Macedonia, Montenegro, Kosovo; **Western Europe: Germany, United Kingdom, Italy; Macro data source: European Commission, European Economic Forecast, Autumn 2013; for FX rates - National Bank of Serbia, UniCredit CEE 4Q13, Hypo Alpe-Adria SEE Quarterly December 2013, RBA CEE Strategy 4Q13 8

9 SALES PROFILE AND BUSINESS ENVIRONMENT Sales by segments Baby food 3% Beverages 14% Savoury spreads 9% Principal brands 16% Sports and Functional Food 14% Top 5 factors influencing F&B industry Collaboration in innovation Between ingredient and packaging firms and industry Ethics at eye level Environmental stewardship, animal welfare and fair play for workers are among conditions of production that consumers now expect Rising food prices Sweet and salted snacks 12% Coffee 22% Pharma & Personal care 10% Smaller grain stockpiles, a growing population, increased demand for animal protein and a changing climate disrupt supply/demand balance Food taxes and subsidies Balance taxes on less healthy foods with subsidies for healthy ones Sales by brands Simple ingredients Principal brands 15.9% Key retail trends Own brands 72.0% Private label 6.0% Shoppers hungry for value Online, digital and multi-channel Farmacia 6.1% Redefinition of private label Making the most of events Focus on the store environment Sales by segments and brands in 2012; Business environment source: IGD Retail Analysis 9

10 FINANCIAL OVERVIEW: (EURm) FY10 FY10 pro-forma FY11 FY12 CAGR FY10 pro-forma - FY12 FY12/FY11 Revenues % 4.4% Sales % 4.3% EBITDA % 8.0% EBIT % 13.6% Net profit (5.4%) 60.1% EBITDA margin 8.9% 11.7% 10.9% 11.3% -33bp +39bp EBIT margin 6.5% 6.1% 7.4% 8.1% +198bp +66bp Net profit margin 3.8% 2.8% 1.5% 2.3% -50bp +79bp Net debt Total assets Equity Gearing ratio* 63.2% 63.2% 62.3% 61.7% Growth in challenging macro milieu thanks to innovation Balance sheet as of YE10 reflected consolidation of Droga Kolinska, but P&L accounts were not consolidated in FY10 (consolidation started as of 01/01/2011), thus pro-forma shown P&L figures normalized; *Gearing ratio calculated as Net debt/(total equity+net debt) 10

11 GUIDANCE DELIVERY IN 2012 AND GUIDANCE TRACK RECORD Sales (EURm) % % 93% 103% % 104% EBIT (EURm) % Reported Guidance 102% 99% Reported Guidance 104% % % 95% 104% % 104% EBITDA (EURm) % % 100% 98% % 104% Reported Guidance 102% 98% Atlantic Grupa listed on the Zagreb Stock Exchange on 19th of November 2007 Since 2008 Atlantic Grupa publishes guidance for the following financial year and delivers it 11

12 STABLE MANAGEMENT TEAM AND OWNERSHIP STRUCTURE Management Ownership structure on 31/12/2013 Emil Tedeschi President of the Management Board Pension funds 18.1% EBRD 8.5% Mladen Veber Senior Group Vice President Business Operations Zoran Stanković Group Vice President Finance Neven Vranković Group Vice President Corporate Affairs Emil Tedeschi 50.2% DEG 8.5% Strategic Management Council Deals with vital strategic and operational corporate issues. Consists of: Board Members, Vice Presidents and General Managers of each SBU and SDU, Senior Executive Director for Regional KAM and Sales Croatia, the Secretary General, Executive Directors of Corporate Controlling, IT, Central Purchasing and Human Resources, and the Head of the Investment Committee. Supervisory board Other 7.7% Lada Tedeschi Fiorio 5.8% Management 1.2% Zdenko Adrović Lada Tedeschi Fiorio Siniša Petrović Željko Perić Franz Josef Flosbach Aleksandar Pekeč Vedrana Jelušić Kašić Supervisory Board President of the Supervisory Board Vice President of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Audit Committee Nomination and Remuneration Committee Corporate Governance Committee 12

13 ATLANTIC GRUPA S VALUATION AND SHARE PRICE DEVELOPMENT Valuation 9M Last price in reporting period (EUR) Market capitalization* (EURm) points 6,000 5,000 ATGR-R-A vs CROBEX CROBEX ATGR-R-A EUR 150 Average daily turnover (EUR) 33, , , EV (EURm) ,000 EV/TTM EBITDA** , EV/TTM EBIT** EV/TTM sales** TTM EPS** (EUR) , P/E** In 2013 Atlantic Grupa s stock was the 8th largest stock based on market capitalization on the Zagreb Stock Exchange Performance*** ATGR-R-A (47.6%) 46.8% 18.2% (37.7%) 9.6% 31.3% Atlantic Grupa is a member of blue-chip index Crobex10 CROBEX (67.1%) 14.6% 5.5% (18.3%) (0.1%) 3.1% *Last price in reporting period times number of issued shares; **Normalized; ***Performance calculated as last price/points in a year compared with the first price/points in a year 13

14 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN 2012 AND 9M 2013 STRATEGIC GUIDANCE 14

15 KEY DEVELOPMENTS 9M Implementation of new commercial terms and conditions in the Croatian market within the distribution segment Further integration of information technologies Regional data centre in Zagreb implemented New technologies in distribution business in Croatia implemented New organization structure and Management Board Second integration phase of Droga Kolinska and Atlantic Grupa Consolidation of production plants Consolidation of information technology Refinancing Preparation for the new energy bars factory in Nova Gradiška Production expected to start in Q Capex of EUR 16m Transfer of production from outsourced producer to in-house production 15

16 REFINANCING Timing Refinancing structure November 2012 Refinancing amount EUR 307m Reasoning for refinancing EBRD arranged loan EUR 232m EBRD EUR 60m Raiffeisen Bank, Unicredit Bank, Sberbank, Erste Bank EUR 172m IFC EUR 50m Bilateral loan EUR 75m Raiffeisenbank Austria Zagreb, Zagrebačka banka EUR 25m More favourable loan conditions Average interest rate of 4.71% at the time of refinancing Prolonged maturity Purpose Revolving facility 8% Other 89% EBRD 17% Commercial banks 56% Balance sheet restructuring EUR 272m Energy efficiency improvement EUR 10m Energy efficiency 3% IFC 16% Working capital financing EUR 25m 16

17 PERFORMANCE BY SBUs AND SDUs IN 2012 (EURm) /2011 SBU Beverages % SBU Coffee % SBU (Sweet and Salted) Snacks % SBU Savoury Spreads % SBU Sports and Functional Food % SBU Pharma and Personal Care % SDU Croatia (1.3%) SDU Slovenia, Serbia, Macedonia % Other segments* % (EURm) 2012 SBU Beverages 14.1 SBU Coffee 18.8 SBU (Sweet and Salted) Snacks 12.8 SBU Savoury Spreads 14.7 SBU Sports and Functional Food 0.6 SBU Pharma and Personal Care 6.7 SDU Croatia (0.6) SDU Slovenia, Serbia, Macedonia 10.0 Other segments* (24.5) Reconciliation** (298.4) (285.3) n/a Sales % Group EBIT 52.7 * Other segments include SDU HoReCa, Russian market and non-allocable business activities (headquarters and support functions in Serbia, Slovenia and Macedonia) which are excluded from the reportable operating segments. For the time being, SDU International Markets will not be separated, but its sales and profitability will be presented within SBU to which they relate. For the time being, the Russian market will include only the baby food product range sales under the Bebi brand. ** Line item Reconciliation relates to the sale of own brands which is included in the appropriate SBU and in SDUs through which the products were distributed. 17

18 NET PROFIT IN 2012 (EURm) Net income Normalized net income 9 Net profit grew despite net foreign exchange losses in the amount of EUR 8.5 million, which were primarily a result of a significant change in the exchange rate between RSD and EUR. The stated foreign exchange differences are solely a consequence of applying the accounting policy according to which non-financial assets are recorded at historical cost in the local currency, without revaluation, while financial liabilities are translated to their EUR value The growth in net profit was also influenced by a significant decrease in the effective tax rate due to recognising deferred tax asset on the basis of tax losses carried forward that will be used in the following periods (EUR000) 2012 % of sales 2011 % of sales 2012/2011 EBIT 52, % 44, % 18.0% Interest expenses 34, % 29, % 16.4% FX (gains)/losses - net 8, % 4, % 83.5% EBT 9, % 10, % (6.7%) Current tax 3, % 3, % 10.2% Deferred tax (2,468) (0.4%) % n/a Net income 8, % 7, % 20.4% Minority interest 1, % 1, % 31.3% Net income II 7, % 6, % 18.5% 18

19 FINANCIAL INDICATORS IN 2012 (EURm) Equity and liabilities structure as at 31 December 2012 Net debt Total assets Equity Current ratio Gearing ratio 61.7% 62.3% Net debt/ebitda* Interest coverage ratio* Capex Cash flow from operating activities Other liabilities 6.6% Trade and other payables 15.4% Bond 2.2% Short term financial debt 6.8% Capital and reserves 28.4% Long term financial debt 40.5% Key capital expenditures in 2012: The construction of the Cockta bottling plant in Apatovac Investment in IT SAP licence for Slovenia, purchase of HRIS system (human resources information system) Investments related to transferring the production of Multipower beverages to Rogaška Slatina Investment in modernisation of equipment the wafers packaging machine in Soko Štark, equipping the bottling plant of Palanački Kiseljak, purchase of equipment for the production of coffee, automation of line for coffee in Izola Purchase of espresso machines for the HoReCa channel *Normalized 19

20 FINANCIAL OVERVIEW IN 9M 2013 Key highlights (EURm) 9M M M 2013 / 9M 2012 Revenues % Sales % EBITDA % EBIT % Net profit % EBITDA margin 12.9% 12.3% +55 bp EBIT margin 10.1% 9.2% +89 bp Net profit margin 5.3% 2.3% +302 bp The most significant growth in sales was recorded by the SBU Sports and Functional Food, Other segments, primarily in the Russian market, and the SBU Snacks, which mitigated the decline in sales of the SBU Savoury Spreads and the SDU Croatia EBITDA growth was influenced by further cost optimisation, positive trends in some production materials and despite the negative impact of the temporarily suspended distribution of own and principal brands in March this year in the Croatian market which resulted in lower sales with equal fixed expenses The improved operating profitability, in addition to impacts above the EBITDA level, was also impacted by lower depreciation and amortization as a result of a more efficient management of the existing resources and accordingly the reduced need for new investments P&L figures normalized 20

21 SALES RESULTS IN 9M 2013 (EURm) 9M M M 2013/ 9M 2012 SBU Beverages (2.4%) SBU Coffee % SBU (Sweet and Salted) Snacks % SBU Savoury Spreads (5.7%) SBU Sports and Functional Food % SBU Pharma and Personal Care % SDU Croatia (9.0%) SDU Slovenia, Serbia, Macedonia % Other segments* % Reconciliation* (216.5) (216.2) 0.1% Sales % Sales by segments Baby food 3.9% Principal brands 14.8% Beverages 13.8% Savoury spreads 9.0% Sweet and salted snacks 11.7% Coffee 20.9% Sports and Functional Food 16.3% Pharma & Personal care 9.5% Sales by countries Other markets 6.6% Russia and CIS 5.6% Croatia 25.4% Sales by brands Principal brands 14.8% Key European markets*** 12.2% Other regional markets** 6.3% Serbia 23.6% Own brands 72.4% Private label 6.7% Farmacia 6.1% Bosnia and Herzegovina 7.5% Slovenia 12.9% *Please refer to slide 17; **Other regional markets: Macedonia, Montenegro, Kosovo; ***Key European markets: Germany, United Kingdom, Italy, Switzerland, Austria, Sweden, Spain 21

22 NET PROFIT IN 9M 2013 (EURm) Net income Normalized net income 11 The increase in net profit, in addition to impacts above the EBIT level, was impacted by a significant decrease in interest expense due to a successful refinancing of longterm borrowings completed at the end of Also, the growth in net profit was impacted by the decrease in the effective tax rate as a consequence of tax optimisation measures taken and a more favourable movement in foreign exchange rates, which decreased the previous year s net foreign exchange losses arisen primarily from the depreciation of the Serbian dinar. 0 9M M2012 (EUR000) 9M 2013 % of sales 9M 2012 % of sales 9M 2013/ 9M 2012 EBIT 50, % 44, % 13.0% Interest expenses 16, % 23, % (29.5%) FX (gains)/losses - net 1, % 6, % (81.6%) EBT 32, % 14, % 122.5% Current tax 4, % 3, % 20.1% Deferred tax 2, % % 852.7% Net income 26, % 11, % 139.2% Minority interest % 1, % (58.9%) Net income II 25, % 9, % 171.6% 22

23 FINANCIAL INDICATORS IN 9M 2013 (EURm) 9M Equity and liabilities structure as at 30 September 2013 Net debt Total assets Total Equity Current ratio Gearing ratio 55.9% 61.7% Net debt/ebitda* M M 2012 Interest coverage ratio** Capital expenditure Cash flow from operating activities Other liabilities 6.1% Trade and other payables 14.6% Bond 2.2% Short term borrowings 7.6% Total Equity 32.3% Long term borrowings 37.1% Key capital expenditures in 9M 2013: Automation of the line for coffee in Izola and purchase of espresso and Coffee 2 Go machines Investment in the flips packaging machine in Soko Štark and in the line for packaging multi-packs of Donat Mg Investments related to the HRIS system (human resources information system) Investments related to the project of developing, implementing and relocating the regional data centre in Zagreb Refurbishment of pharmacies and specialised stores Investment in the equipment for the production of the Donat Mg new bottle Investment in the equipment for the production of pellets in the Strategic Business Unit Snacks *Normalized EBITDA, 12M trailing EBITDA in 9M 2013; **Normalized 23

24 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN 2012 AND 9M 2013 STRATEGIC GUIDANCE 24

25 ATLANTIC GRUPA S STRATEGIC MANAGEMENT GUIDANCE FOR 2013 Strategic management guidance Focus on organic business growth through active brand management with a special emphasis on strengthening the position of brands in international markets; strengthening the regional character of distribution business and further development of the HoReCa segment Focus on further business rationalisation and cost management through the CORE program and optimisation of operating processes on all operating levels, aimed to improve operating efficiency Regular settlement of existing financial liabilities with an active management of debt and finance costs Prudent liquidity management (EURm) 2013 Guidance (normalized) 2012 Normalized 2013/2012 Sales % EBITDA % EBIT % Interest expense (14.1%) 25

26 CONTACT Atlantic Grupa d.d. Miramarska Zagreb Croatia Tel ir@atlanticgrupa.com 26