Podravka Group. European Midcap Event. 3 4 March 2008, Frankfurt. Podravka Group. Investor Relations

Transcription

1 European Midcap Event 3 4, Frankfurt

2 Content Overview Sales Business results Costs/ Expenses Information for shareholders Restructuring strategy

3 Overview

4 , the overview One of the largest branded food companies in the region - large brand portfolio - international Superbrands Podravka in Croatia - the largest food company - the second pharmaceutical company per MS Production facilities - mostly in Croatia (food, beverages and drugs) - Czech Republic, Poland (food) BRAND PORTFOLIO Strong distribution network - covering key emerging markets - distribution agreements with Unilever, Hainz & Deit Current processes in Podravka - complexity management (portfolio optimization) - restructuring

5 Strategic Business Areas Food and beverages Pharmaceuticals Strategic Business Area Podravka Food Beverages Commercial goods * Pharmaceuticals Business Area Vegeta food seasoning Podravka dishes (soups, fruits, vegetables, ready-made meals, frozen food) Studenaspring water Studenaccarbonated water Unilever SMS Deit Generic drugs -RX -OTC Product group Baby food, Sweets & Snack Lero Kraš Meat products & canned fish Other soft drinks * third parties goods

6 Business activities new Management Board - spin-off operative unfunctional assets - spin-off non-basic activities - complexity management - new products development - higher investments in marketing - continued restructuring process - discontinued distribution of Nestlé products for the markets of B&H, Macedonia and Serbia - organic growth of Podravka brands - investment in new Baby Food plant - acquisition of Eva brand - continued new products development - continued complexity of management - new Supervisory Board - restructuring of subsidiary Danica LLC - production in new Baby Food plant - brand development - Čokolino - organic growth of Podravka brands - acquisition of Warzywko, Perfecta and Lero brands - growth through acquisition - decrease of Nestlé products sales - new middle management on foreign markets

7 Brand Acquisitions 2006 / 2007 Eva (Croatia, 2006) Warzywko & Perfecta (Poland, 2007) Lero (Croatia, 2007) one of the most accepted canned fish brand in Croatia and SouthEast Europe (GfK research) among top brands for recognizability, use and popularity in sardines category in the markets od Croatia and SouthEast Europe (GfK research) category with high growth potential and expanding the range with new products since 2007 the sales of products under Eva brand is shown within Podravka brands Warzywko- Polish brand for universal and special food seasoning and bouillons Perfecta- universal food seasoning brand sold in Russia, Ukraine and Romania acquiring Warzywko Podravka will strengthen its leader position on the Polish market of food seasonings acquiring Warzywko Podravka enters medium price segment on the Polish market and expands consumer base and profiles with acquiring Lero Podravka expands its existing product assortment to category of juices, nectars, syrups and other non-alcoholic beverages packed in modern and technologically advanced packaging introducing Lero into its existing sales structure, Podravka will accomplish costs synergy in sales and distribution acquiring Lero Podravka also took over contractual obligations on service production for third parties: Cockta, Orangina and other brands in non-alcoholic beverages category

8 Intensive development of the new products with high GM Vegeta pikant Vegeta liquid stock Lino baby food with prebiotic Čokolino cereales Čokolino spread

9 Sales

10 sales Sales growth on domestic and foreign markets 2002 Jan-Sep 2007 HRK mn 3,218 3,295 3,441 +1% 3,467 2, e -2% 2,526 1,470 1,526 1,612 1,586 1,226 1,066 1,521 1,748 1,769 1,829 +3% 1,881 1, Jan-Sep 2007 foreign markets domestic market

11 sales Jan-Sep 2007 sales revenue HRK 2.5 bn sales structure per SBA sales decrease of 2% compared with the same period previous year 17% sales decrease of Nestlé products on foreign markets (-83%) Podravka brands sales increase on domestic (8%) and foreign markets (6%) SBA Food&Beverages SBA Pharmaceuticals 83% -2% +0% ORGANIC GROWTH 6% Total -2%

12 Sales structure per markets Jan-Sep 2007 sales structure per markets Food & Beverage sales structure per markets 8% 4% 15% 6% 4% Croatia 53% 13% SouthEast Europe Central Europe 20% 19% 58% Western Europe, overseas countries and Orient Eastern Europe Pharmaceuticals sales structure per markets 3% 9% 12% SEE: B&H, Serbia, Slovenia,Macedonia, Montenegro, Kosovo, Albania CE: Czech Republic, Poland, Slovakia, Hungary WE, OC& the Orient: Germany, USA, Australia, Austria, Benelux, Scandinavia, Canada, France, UK, Switzerland, Turkey and others EE: Russia, Pribaltic, Romania, Ukraina and others 76%

13 sales growth per markets HRK mn , ,459.7 Jan-Sep 2006 Jan-Sep Croatia SouthEast Europe Central Europe Western Europe, overseas countries, -Podravka brands +8% Orient -Commer. goods +1% -Pharmaceuticals -2% -Podravka brands +13% (Serbia +33%) -Commerc. goods -84% -Podravka brands +6% -Comm. goods -59% -Comm. goods -21% Eastern Europe -Pharmaceuticals +43% (Russia +41% )

14 Business results -under restructuring process

15 Business results through the time of restructuring in millions of HRK Results without restructuring costs Reporting results / /05 Sales 3, , % 3, , % Gross profit 1, , % 1, , % EBITDA % % EBIT % % Net profit % % Gross margin % bp bp EBITDA margin % bp bp EBIT margin % bp bp Net margin % bp bp

16 Business results per SBA Jan-Sep 2007 in millions of HRK Food & Beverages Pharmaceuticals Jan-Sep 2007 Jan-Sep 2006 change Jan-Sep 2007 Jan-Sep 2006 change Jan-Sep 2007 Jan-Sep 2006 change Sales 2, , % 2, , % % Gross profit 1, , % % % EBITDA % % % EBIT % % % Net profit % % % Margins Gross margin % bp bp bp EBITDA margin % bp bp ,170 bp EBIT margin % bp bp ,010 bp Net margin % bp bp bp

17 Product portfolio optimization (SKU) product portfolio optimization start continuous process -SKUs with non-satisfactory turnover -SKUs with non-satisfactory profitability EFFECTS ON PROFITABILITY defining terms for keeping SKU in product portfolio optimization includes 10,000 SKU within SBA Food and Beverages 2,000 SKU discontinued optimization reduced total sales in 2006 for about HRK 15 mn Podravka brands portfolio productivity increased

18 Positive movement of Food & Beverages profitability Sales movement and profitability of Food & Beverages Sales HRK mn 300 F&B without commercial goods (monthly) Commercial goods (monthly) Gross margin F&B (quarterly) % Gross margin % Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep

19 Costs / Expenses

20 Structure of operating costs Jan-Sep 2007 HRK 2,446.4 mn 2006 HRK 3,381.5 mn OPERATING COSTS 2005 HRK 3,363.1 mn 10.9% 10.6% 10.7% 28.5% 26.8% 26.7% 60.5% 62.6% 62.6% Jan-Sep 2007 / Jan-Sep / % +1% Cost of goods sold Advertising & promotion costs +7% +1% Selling and distribution costs -3% 0% General and administrative expenses + 13% -2% +1% Total

21 Marketing activities in 2007

22 Indebtedness movement Debt structure of the Group 100% 2002 Sep 2007 in millions of HRK Debt structure 30 Sep LTD 42 % CP LTD 7 % STD 51 % Sep , , % indebtedness in relation to 31 Dec 2006

23 balance sheet in millions of HRK PODRAVKA GROUP 30 Sep Dec Dec 2005 Cash Inventories Current assets 1, , ,619.5 Total assets 3, , ,412.8 Long term debt Short term debt Shareholders equity 1, , ,921.2 Total equity and liabilities 3, , ,412.8 D/E 55.7% 56.2% 43.4% Net debt 1, Net debt/ EBITDA Interest coverage

24 Information for shareholders

25 PODR-R-A turnover and price Volume and close price Jan Feb 2008 '000 pieces HRK 25 February, Volume Close Close price (HRK) Market capital. (HRK mn) 2, M max / min (HRK) 645 / M turnover (HRK mn) M WACP Average daily turnover (HRK mn) Free float (%)

26 Shareholders structure Shareholders structure as of 22 February, 2008 Shareholder No. of shares 38% 2% 2% 2% 2% 4% 5% 11% 6% TOP % other legal and natural persons 42.6% 11% 7% 10% FIMA AMI LTD CPF/CIPI CPF BANK AUSTRIA CREDITANSTALT KAPITALNI FOND AZ MPF PBZ CROATIA OSIGURANJE MPF RBA /R5 PBZ D.D./ CUSTODY ACCOUNT ERSTE&STEIERM. BANK /CSC TREASURY ACCOUNT OTHERS CPF - Croatian Privatization Fund CIPI - Croatian Institute for Pension Insurance MPF - Mandatory Pension Fund 576, , , , , , , , , ,177 97,483 2,046,457 TOTAL 5,420,003

27 Restructuring strategy

28 Strategic restructuring 2008 PRIORITIES Profitability and Growth 1 2 competitiveness 3 strategy growth Capital use efficiency to reach by Profitable growth strategy Profitability and competitiveness growth Capital use efficiency Organic growth Production Turnover capital reduction Acquisitions Administration Asset capitalization Sales, Distribution+Logistics GOALS FOR 2011 HRK 5 bn EBIT 9% ROA 4%

29 Growth program with related projects Category focus Market focus Acquisitions 1 Food seasonings 2 Culinary* 3 Cereals** 4 Meat 5 Fish 6 Baking aids 7 Beverages 1 Keeping leading market position + trend setter in Croatia 2 Significant organic growth in SEE and EE 3 Expending product portfolio in EU 1 Category focus 2 Market focus 3 Leader positions 4 Profitability growth 5 Financial flexibility 6 Successful integration *Culinary consists of ready made meals, soups, sauces, side dishes ** Cereals- dehidrated baby food and breakfast cereals

30 Profitability program with related projects SCM Sales Marketing and sponsorship Administration and Services 1 Supply 1 Investment 1 Efficiency CRO 1 Non-basic activities 2 Logistics efficiency 2 Efficiency INT 2 Energy 3 Production and 2 Sponsorship 3 Organizing 3 Organization COGS 3 Organization support process 4 Salaries 4 Stock

31 Asset capitalization program with related projects Asset activation Portfolio management 1 Buildings 2 Land 3 Equipment Complexity management

32 Irena Kos Voditeljica Odnosa s investitorima PODRAVKA d.d. Telefon: Fax: irena.kos@podravka.hr Podravka d.d., ir@podravka.hr, ph: +385 (0)