ATLANTIC GRUPA Company of Added Value

Transcription

1 ATLANTIC GRUPA Company of Added Value Erste Group Investor Conference, Stegersbach September 2014

2 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN H FINANCIAL OVERVIEW IN 2013 STRATEGIC GUIDANCE 2

3 ONE OF THE LARGEST FOOD AND BEVERAGES COMPANIES IN THE SEE REGION Business Fast Moving Consumer Goods Headquarters Zagreb, Croatia (Europe) Foundation 1991 No of employees 4,228 FY13 sales EUR 674 millions Key Markets SEE 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: The leading coffee producer in the region Prominent European company in the sports nutrition Among the leading soft drinks producers in the region Among the leading confectionary & snacks producers in the region Among the leading savoury spreads producers in the region Producer of the No1 Croatian brand in the VMS segment The leading private pharmacy chain in Croatia Key brands: GRAND KAFA, BARCAFFE MULTIPOWER CEDEVITA, COCKTA, DONAT Mg SMOKI, NAJLEPŠE ŽELJE, BANANICA ARGETA DIETPHARM FARMACIA The leading FMCG distributer in the SEE region International Brands (Ferrero, Wrigley, Unilever,...) The region includes: Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia and Kosovo. Reporting currency HRK, all figures in the presentation translated at EUR/HRK FX rate of

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 in EURm CAGR : +38.0% * *: Pro-forma consolidated with Droga Kolinska. 4

5 ATLANTIC GRUPA S BUSINESS MODEL TODAY SBU SBU SBU SBU SBU SBU BU COFFEE BEVERAGES SPORTS AND FUNCTIONAL FOOD PHARMA AND PERSONAL CARE SAVOURY SPREADS SNACKS BABY FOOD SDU SDU SDU SDU SDU DU DU Croatia Serbia HoReCa Hotels, Restaurants, Cafes International Markets* CIS Slovenia Macedonia From 2014 the company's business operations are organized in six Strategic Business Units (SBU), one Business Unit (BU), five Strategic Distribution Units (SDU) and two Distribution Units (DU), allowing the company to manage its production and distribution operations more effectively *International markets: markets outside the region (Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Macedonia and Montenegro), Russia and CIS. 5

6 STABLE MANAGEMENT TEAM AND OWNERSHIP STRUCTURE Management Ownership structure on 30/09/2014 Emil Tedeschi President of the Management Board Pension funds, 17.9% EBRD, 8.5% Mladen Veber Senior Group Vice President Business Operations Strategic Management Council Supervisory board Zoran Stanković Group Vice President Finance Deals with vital strategic and operational corporate issues. Neven Vranković Group Vice President Corporate Affairs 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. Emil Tedeschi, 50.2% Others, 8.0% DEG, 8.5% Lada Tedeschi Fiorio, 5.8% Management 1.1% Supervisory Board Lada Peter Franz Vedrana Zdenko Tedeschi Siniša Elam Josef Aleksandar Jelušić Adrović Fiorio Petrović Håkansson Flosbach Pekeč Kašić President Vice President Member Member Member Member Member of the of the of the of the of the of the of the Supervisory Supervisory Supervisory Supervisory Supervisory Supervisory Supervisory Board Board Board Board Board Board Board Audit Committee Nomination and Remuneration Committee Corporate Governance Committee 6

7 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 7

8 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. 8

9 GEOGRAPHIC PRESENCE AND MACROECONOMIC ENVIRONMENT Sales by countries Other markets Croatia f 2014f 2015f 6.4% GDP 0.0% (2.0%) (0.7%) 0.5% 1.2% Russia and CIS 5.9% Unemployment 13.5% 15.9% 17.6% 17.6% 17.2% Croatia 24.8% CPI 2.2% 3.4% 2.3% 1.3% 1.5% Key European EUR/HRK markets** 11.7% Serbia f 2014f 2015f Slovenia Other regional markets* 6.3% Bosnia and Herzegovina 7.2% Croatia Bosnia and Herzegovina Slovenia 13.6% Serbia 24.1% Overview of production facilities Serbia GDP 1.6% (1.5%) 2.1% 1.3% 2.2% Unemployment 23.0% 23.9% 22.1% 22.3% 21.4% CPI 11.1% 7.3% 7.9% 4.3% 5.0% EUR/RSD Slovenia f 2014f 2015f GDP 0.7% (2.5%) (1.6%) (0.1%) 1.3% Unemployment 8.2% 8.9% 10.2% 10.8% 10.7% CPI 2.1% 2.8% 1.9% 0.8% 1.3% EUR/USD Germany f 2014f 2015f GDP 3.3% 0.7% 0.4% 1.8% 2.0% Unemployment 5.9% 5.5% 5.3% 5.2% 5.1% CPI 2.5% 2.1% 1.6% 1.4% 1.4% EUR/USD production facility in Germany Macedonia Russia f 2014f 2015f GDP 4.3% 3.4% 1.3% 2.3% 2.7% Unemployment 6.6% 5.5% 5.5% 5.9% 6.2% CPI 8.4% 5.1% 6.8% 5.9% 5.0% EUR/RUB Sales by countries in 2013; *Other regional markets: Macedonia, Montenegro, Kosovo; **Key European markets: Germany, UK, Italy, Switzerland, Austria, Sweden, Spain; Macro data source: European Commission, European Economic Forecast, Winter 2014; for FX rates - National Bank of Serbia, UniCredit CEE 4Q14, HAAB SEE Outlook June 2014, RBA CEE Strategy 4Q14. 9

10 SALES PROFILE AND BUSINESS ENVIRONMENT Sales by segments Beverages 12.9% Baby food 4.2% Principal brands 15.0% Top 5 factors influencing F&B industry Collaboration in innovation Savoury spreads 9.1% Sports and Functional Food 15.5% 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 Sweet and salted snacks 12.2% Coffee 21.5% Pharma & Personal care 9.7% Rising food prices 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 Principal brands 15.0% Simple ingredients Key retail trends Own brands 72.5% Private label 6.4% Farmacia 6.1% Shoppers hungry for value Online, digital and multi-channel Redefinition of private label Making the most of events Focus on the store environment Sales by segments and brands in 2013; Business environment source: IGD Retail Analysis. 10

11 FINANCIAL OVERVIEW: (EURm) FY10 FY10 pro-forma FY11 FY12 FY13 CAGR FY10 pro-forma - FY13 FY13/FY12 Revenues % 2.2% Sales % 2.5% EBITDA % 5.8% EBIT % 6.4% Net profit % 76.9% EBITDA margin 8.9% 11.7% 10.9% 11.3% 11.7% +3bp +37bp EBIT margin 6.5% 6.1% 7.4% 8.1% 8.4% +229bp +31bp Net profit margin 3.8% 2.8% 1.5% 2.3% 3.9% +116bp +166bp Net debt Total assets Equity Gearing ratio* 63.2% 63.2% 62.3% 61.7% 55.2% Net debt/ebitda Cash Flow from operating activities 14 n/a P&L figures normalized; *Gearing ratio calculated as Net debt/(total equity+net debt); ** For FY10 calculated on pro-forma level. 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). In 2014, the classification of contracted marketing expenses has changed from Marketing and selling expenses to decrease in Sales revenues, and classification of support for contracted marketing expenses has changed from decrease in Marketing and selling expenses to decrease in Cost of merchandise sold. This reclassification decreases above presented sales by EUR 6 million in 2013 and EUR 5.5 million in

12 GUIDANCE TRACK RECORD Sales (EURm) 99% Reported Guidance % 98% % % 103% 99% EBIT (HRKm) % 104% % Reported % Sales EBITDA EBIT 97% Guidance 101% EBITDA (HRKm) 99% Reported Guidance % % 98% % 101% 100% % 104% Atlantic Grupa listed on the Zagreb Stock Exchange on 19th of November % 99% 95% Since 2008 Atlantic Grupa publishes guidance for the following financial year and delivers it % %

13 Points EUR PERFORMANCE ON CROATIAN CAPITAL MARKET Performance on capital market ATGR-R-A Crobex Crobex10 48% 43% 40% 34% 18% 16% 8% 10% 2% 7% 1% 5% 9% 2% 0% 0% -15% -18% -40% -38% -47% 6,000 5,000 4,000 3,000 2,000 1,000 ATGR-R-A vs CROBEX CROBEX ATGR-R-A % -67% 9M /09/ /12/2013 Last price Market capitalization* (in EUR millions) Valuation 1H2014 Last price (30/09/2014) Market capitalization* (in EUR millions) Average daily turnover (in EUR thousands) 46.3 EV (in EUR millions) ** EV/EBITDA** 9.2 EV/EBIT** 12.6 EV/sales** 1.1 EPS (in EUR) 8.5 P/E** 16.2 The Atlantic Grupa s share significantly outperformed the growth of Crobex and Crobex10 and ended at 30 September 2014 at EUR 137.3, which was a 58,5% growth within a year. * Closing price multiplied by the total number of shares ** EV and price multiples are calculated with the last price at 30 September 2014 and for the TTM 1H 2014 period *** Performance on capital market: percentage obtained as difference between closing price at 31 December of current year and closing price at 31 December of previous year as well as closing price at 30/9/2014 and closing price at 31 December

14 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN H FINANCIAL OVERVIEW IN 2013 STRATEGIC GUIDANCE 14

15 FINANCIAL OVERVIEW IN H Key highlights (EURm) H H H1 2014/H Revenues % Sales % EBITDA % EBIT % Net profit % In the first half of 2014, Atlantic Grupa recorded 2.1% higher revenue due to the growth in sales in the SBU Savoury Spreads, the SDU International Markets and the beginning of the Unilever principal distribution in the SDU Croatia and the DU Slovenia. The growth in these units compensated for the lower result of other business segments. If we exclude the effect of new and old principals and unfavourable impacts of movements in exchange rates, the sales remained at the level of the first half of % higher EBITDA as a result of : the growth in sales and active risk management related to the movements in the price of raw coffee in the global markets. In the first half of 2014, a 5.4% higher EBIT was recorded, whereby the improved operating profitability was achieved primarily due to the impacts above the EBITDA level and due to lower depreciation which is the result of a more efficient management of the existing resources, reducing the need for new investments. 22.7% higher net profit due to: EBITDA margin 12.2% 12.0% +17 bp EBIT margin 9.4% 9.1% +29 bp Net profit margin 5.8% 4.9% +98 bp The impacts above the EBIT level, Significant decrease in interest expense by 16.5% due to a successful refinancing of long-term borrowings completed at the end of 2012 and Decrease in the effective tax rate to 13% from the previous year s 20%. Nevertheless, net foreign exchange gains are significantly lower compared to the same period of the previous year, primarily due to the depreciation of the Serbian dinar. 15

16 PERFORMANCE BY STRATEGIC BUSINESS UNITS AND STRATEGIC DISTRIBUTION UNITS (EUR 000) H H1 2013*** H1 2014/ H (in EUR millions) H H H1 2014/ H SBU Beverages (4.0%) SBU Coffee (5.5%) SBU (Sweet and Salted) Snacks (4.1%) SBU Savoury Spreads % SBU Sports and Functional Food (2.8%) SBU Pharma and Personal Care (0.4%) SDU Croatia % SDU Serbia (7.1%) SDU International markets % DU Slovenia % Other segments* (0.4%) Reconciliation** (189) (192) n/p Sales % SBU Beverages % SBU Coffee % SBU (Sweet and Salted) Snacks (3.7%) SBU Savoury Spreads % SBU Sports and Functional Food (14.9%) SBU Pharma and Personal Care (12.1%) SDU Croatia % SDU Serbia (30.3%) SDU International markets (54.2%) DU Slovenia (15.4%) Other segments* (8.2) (7.5) 9.0% Group EBITDA % * Other segments include SDU HoReCa, SDU CIS, BU Baby Food, DU Macedonia and business activities not allocated to business and distribution units (headquarters and support functions in Serbia, Slovenia and Macedonia) which are excluded from the reportable operating segments. ** Line item Reconciliation relates to the sale of own brands which is included in the appropriate SBU and BU and in SDUs and DUs through which the products were distributed. *** In 2014 the classification of contracted marketing expenses has changed from Marketing and selling expenses to decrease in Sales revenues, and classification of support for contracted marketing expenses has changed from decrease in Marketing and selling expenses to decrease in Cost of merchandise sold. In accordance with these changes, sales revenue (referring to sales from distribution company Atlantic Trade Zagreb) for segment information for the six month period ended 30 June 2013 has also been restated, but no restatement has been made for sales revenue referring to SBU Savoury Spreads on markets outside the region and BU Baby Food due to immateriality. 16

17 FINANCIAL INDICATORS IN H (in EUR millions) H Net debt Total assets Total Equity Current ratio Gearing ratio 53.2% 55.2% Net debt/ebitda* Equity and liabilites structure as at 30/06/2014 Trade and other payables 16.2% Other liabilities 6.4% Capital and reserves 34.2% H H Interest coverage ratio Capital expenditure Cash flow from operating activities Bond 2.2% Short term borrowings 8.3% Long term borrowings 32.8% The company's focus on a continued deleveraging Overview of capital expenditure: SBU Coffee: purchase of espresso machines and Coffee 2 Go machines, investment in the transport system for ground coffee, SBU Snacks: investment in the line for the production of fillings, purchase of production equipment for the production of chocolate bars, SBU Sports and Functional Food: investment in the production plant for the production of bars in Nova Gradiška, SDU Croatia and SDU Slovenia: investments related to taking over the distribution of Unilever (IT, warehouses, offices). 17

18 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN H FINANCIAL OVERVIEW IN 2013 STRATEGIC GUIDANCE 18

19 PERFORMANCE BY STRATEGIC BUSINESS UNITS AND STRATEGIC DISTRIBUTION UNITS EUR millions /2012 (EUR millions) /2012 SBU Beverages (3.0%) SBU Coffee (0.3%) SBU (Sweet and Salted) Snacks % SBU Savoury Spreads (1.0%) SBU Sports and Functional Food % SBU Pharma and Personal Care ,1% SDU Croatia (8.0%) SDU Slovenia, Serbia, Macedonia % Other segments* % Reconciliation** (296) (298) (0.8%) Sales % SBU Beverages (10.8%) SBU Coffee % SBU (Sweet and Salted) Snacks (3.0%) SBU Savoury Spreads % SBU Sports and Functional Food % SBU Pharma and Personal Care (16.3%) SDU Croatia % SDU Slovenia, Serbia, Macedonia (2.3%) Other segments* (23.2) (18.9) 22.3% Group EBITDA % * Sales and profitability shown according to AG s business model valid in 2012 and 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. SDU International Markets sales and profitability is presented within SBU to which they relate. The Russian market includes 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. *** Sales correspond to figures shown in 2013 Audit Report. In 2014, the classification of contracted marketing expenses has changed from Marketing and selling expenses to decrease in Sales revenues, and classification of support for contracted marketing expenses has changed from decrease in Marketing and selling expenses to decrease in Cost of merchandise sold. This reclassification decreases above presented sales by EUR 6 million in 2013 and EUR 5.5 million in

20 NET PROFIT IN 2013 EURm Net profit Normalized Net profit times higher net profit due to: Significant decrease in interest expense amid successful refinancing of long-term borrowings completed at the end of More favourable movements in foreign exchange rates, which decreased the previous year s net foreign exchange losses arisen primarily due to the depreciation of the Serbian dinar. Negative impact had the significant increase in effective tax rate to 21% from the previous year s 6% due to the last year recognised deferred tax asset based on the expected utilisation of tax losses. (in EUR 000) 2013 % of sales 2012* % of sales 2013/2012 EBIT 56, % 53, % 6.4% Interest expenses, net (21,235) (3.2%) (28,716) (4.4%) (26.1%) Net FX differences (1,627) (0.2%) (8,525) (1.3%) (80.9%) EBT 33, % 15, % 111.1% Current tax (5,698) (0.8%) (3,463) (0.5%) 64.5% Deferred tax (1,523) (0.2%) 2, % n/a Net income 26, % 14, % 76.9% Minority interest (550) (0.1%) (1,451) (0.2%) (62.1%) Net income II 25, % 13, % 91.8% *Normalized 20

21 FINANCIAL INDICATORS IN 2013 (in EUR millions) Equity and liabilities structure as at 31/12/2013 Net debt Total assets Total Equity Current ratio Gearing ratio 55.2% 61.7% Net debt/ebitda* Interest coverage ratio* Capital expenditure Cash flow from operating activities Other liabilities 6.2% Trade and other payables 14.5% Bond 2.3% Short term borrowings 7.6% Capital and reserves 32.9% Long term borrowings 36.5% The company's focus on a continued deleveraging Overview of capital expenditure: SBU Coffee: automation of the line for coffee and purchase of espresso and Coffee 2 Go machines, SBU Snacks: investment in the flips packaging machine, investment in the equipment for the production of pellets and purchase of line for the production of fillings, SBU Beverages: investment in the line for packaging multi-packs of Donat Mg, investment in the equipment for the production of the Donat Mg new bottle, purchase of automated line for packaging Cedevita granules, SBU Pharma and Personal care: refurbishment of pharmacies and specialised stores and Other: investments related to the HRIS system (human resources information system) and the project of developing, implementing and relocating the regional data centre in Zagreb. * Normalized in

22 CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN H FINANCIAL OVERVIEW IN 2013 STRATEGIC GUIDANCE 22

23 STRATEGIC GUIDANCE FOR 2014 Focus on organic business growth through active brand management with a special emphasis on strengthening the position of regional brands (Cockta, Cedevita, Smoki, Grand Kafa, Barcaffe, Bananica, Štark) and brands with international potential (Multipower, Argeta, Donat Mg, Bebi, Cedevita GO!); Strengthening the regional character of distribution through the extension of the principals brands portfolio; Strategic management guidance Active development of the regional HoReCa segment with a portfolio that covers '24/7 consumer needs' and other sale channels (Online, Etno channel); Rationalisation of operations, cost management and optimisation of business processes on all operating levels aimed at improving operating efficiency; Active monitoring of trends and hedging the price of raw coffee and other raw materials; Regular settlement of existing financial liabilities with an active management of debt and financial expenses; and Prudent liquidity management and further deleveraging. (in EUR millions) 2014 Guidance /2013 Sales % EBITDA % EBIT % Interest expense (12.1%) Sales: 3% sales growth at the organic level and sales from the distribution of the Unilever product range of EUR 32 million. Capital expenditure at EUR 29 million, 46% of which relates to the investment in the new factory of energy bars in Nova Gradiška. The expected effective tax rate in 2014 should be at the 2013 level. 23

24 CONTACT Atlantic Grupa d.d. Miramarska Zagreb Croatia Tel , ir@atlanticgrupa.com 24