ATLANTIC GRUPA Financial results in 2013 (audited) Business growth - PowerPoint PPT Presentation

ATLANTIC GRUPA Financial results in 2013 (audited) Business growth in line with guidance Zagreb – 24th February 2014

CONTENT KEY DEVELOPMENTS IN 2013 PERFORMANCE ON CAPITAL MARKET IN 2013 FINANCIAL RESULTS IN 2013 GUIDANCE FOR 2014 APPENDIX 2

KEY BUSINESS DEVELOPMENTS IN 2013  Performance in line with guidance in unfavourable macroeconomic situation  Substantial deleveraging and growth of cash flow from operating activities  Takeover of distribution of Unilever portfolio in Croatia and Slovenia  Own and principal brands and opening of new pharma locations  Preparation for the new energy bars factory in Nova Gradiška  Continued integration of information technologies  Risk management 3

KEY BUSINESS DEVELOPMENTS (I): OWN AND PRINCIPAL BRANDS UNILEVER  Globally famous brands Knorr, Hellman's, Axe, Rexona, Brut, Signal, Coccolino, Domestos, Cif and many others  Distribution start: beginning of 2014  Distribution in Croatia and Slovenia  Annual turnover: HRK 240 million (51% Croatia, 49% Slovenia)  Confirms status of the leading distributor in the region SDU CROATIA  At the beginning of 2014 taking over the distribution of Ilirija brands  Portfolio: cosmetic products, household products and a product line for the footwear and leather products care (Subrina, Green line, Čisto , Biokill … ) SDU SLOVENIA, SERBIA, MACEDONIA  Slovenia: distribution of principals Stock and BIC  Serbia: distribution of principals Klas, Schwartau and brand Gorki list  Macedonia: distribution of principal Bakers 4

KEY BUSINESS DEVELOPMENTS (II): OWN AND PRINCIPAL BRANDS SBU COFFEE  Assortment extension of Grand kafa (B&H, Serbia and Macedonia) in instant category  Assortment extension of Barcaffe in B&H in Turkish coffee category SBU BEVERAGES  Launch of Cockta Chinotto on regional markets (retail and HoReCa)  Cedevite GO! Kids on regional markets  New taste Cedevita elder-lemon in HoReCa (Croatia, Slovenia, B&H)  New packaging design of Donat Mg SBU SAVOURY SPREADS  Argeta entered Spain  Growth on all international markets SBU SNACKS  16 new products, 9 of which are fully new recipes  New sub-brand Flipster in the pellet product category SBU PHARMA AND PERSONAL CARE  9 new products of Dietpharm brand  6 new products in the Neva assortments (Melem Pharma Akut, ROSAL Lip Balm (INK)REDIBLE COLORS, etc.)  3 new pharmacies and 6 new specialised stores 5

KEY BUSINESS DEVELOPMENTS (III): OWN AND PRINCIPAL BRANDS Savoury Beverages  Research of the Valicon agency: Argeta, Cedevita, Cockta Market share Flips (Smoki) spreads Chocolate (Cockta) (Argeta) and Smoki are among top 10 brands in the region Value share 2013 2012 2013 2012 2013 2012 2013 2012  Argeta is in the 4th place Croatia 11.9% 8.9%  Cedevita improved by three places and is in the 5th place  Cockta is in the 6th place Serbia 56.7% 55.0% 8.5% 7.9%  Smoki improved by eight positions and is in the 9th place Slovenia 42.7% 39.5% 41.4% 40.8%  The strength of brands was calculated on the basis of B&H 37.7% 32.0% 11.6% 10.7% their recognisability, experience and use. Macedonia 10.2% 9.8%  Smoki became the number one brand in the flips category Austria 26.4% 25.6% in the Croatian market Source: AC Nielsen 1 Milka 2 Coca-Cola 3 Vegeta 4 Argeta 5 Cedevita 6 Cockta 7 Orbit 8 Nivea Creme 9 Smoki 10 Fructal 6

KEY BUSINESS DEVELOPMENT (IV): OTHER NEW ENERGY BARS FACTORY IN NOVA GRADIŠKA  Transferring the production from the contractual producer to own plant  Project with the total value of HRK 120 million  Beginning of the factory construction: April 2014  First products from the new lines in the market: 1Q 2015 CONTINUED INTEGRATION OF INFORMATION TECHNOLOGIES  Project of implementing a regional data centre in Zagreb was finalised - consolidation of all server and network infrastructure required for the operation of IT services for the territories of Croatia and Slovenia  New system for vehicle surveillance, fleet management and optimisation of delivery routes in logistics for the distribution company Atlantic Trade Zagreb - the same solution to be implemented in the distribution company Atlantic Brands in Serbia 7

NEW ORGANIZATION STRUCTURE IN 2014  Taking into account the company’s significant step towards the CIS markets in accordance with the strategic focus of the internationalisation of operations, the company nominated the CIS market its new SDU.  Taking into account the importance and the size of the Serbian market (the second largest Grupa’s individual market in the Atlantic portfolio), management decided to promote the Serbian market into a SDU. 8

CONTENT KEY DEVELOPMENTS IN 2013 PERFORMANCE ON CAPITAL MARKET IN 2013 FINANCIAL RESULTS IN 2013 GUIDANCE FOR 2014 APPENDIX 9

PERFORMANCE ON CROATIAN CAPITAL MARKET Performance on capital market Ownership structure on 31/12/2013 ATGR-R-A German Management development Tedeschi Crobex 48% 1.2% bank - DEG Fiorio Lada 8.5% 5.8% Crobex10 40% 34% Other 7.7% PBZ CO 16% 18% 10% OPF EBRD 7% 5% 0% AZ OPF 3% 7.5% 2% 8.5% 23.5% 0% Raiffeisen -1% VPF 7.9% -15% Pension funds -18% Erste Plavi 18.2% Raiffeisen -40% Tedeschi Emil OPF OPF -38% 50.2% 6.3% 53.4% -47% Other pension -67% funds -80% 1.4% 2013 2012 2011 2010 2009 2008 Valuation 2013 2012  The Atlantic Grupa’s share significantly outperformed the growth of Crobex and Crobex10 and ended 2013 Last price in reporting period 718.0 536.0 at HRK 718.00, which is a 34.0% growth within a year. Market capitalization* (in HRK millions) 2,394.0 1,787.2  With the average market capitalisation of HRK Average daily turnover (in HRK thousands) 237.8 201.0 2,178.7 million, Atlantic Grupa takes the fifth place EV (in HRK millions) 4,504.7 4,187.5 among the components of the CROBEX10 stock index. EV/EBITDA** 7.6 7.5  On 21/02/2014 closing price of 780.01 HRK, up EV/EBIT** 10.6 10.5 +8.6% in 2014. EV/sales** 0.9 0.8 * Closing price multiplied by the total number of shares EPS** (in HRK) 58.5 30.5 ** Normalized in 2012 P/E** 12.3 17.6 10

CONTENT KEY DEVELOPMENTS IN 2013 PERFORMANCE ON CAPITAL MARKET IN 2013 FINANCIAL RESULTS IN 2013 GUIDANCE FOR 2014 APPENDIX 11

RESULTS IN LINE WITH GUIDANCE (in HRKm) 2013A/2013E: 98.5 2013A/2013E: 101.0 2013A/2013E: 101.1 2013A/2012A: 102.5 2013A/2012A: 105.8 2013A/2012A: 106.4 2013A 2013A 5,130 591 700 585 2013E 2013E 559 5,051 5,200 2012A 2012A 600 4,930 425 420 500 399 5,000 400 4,800 300 200 4,600 100 4,400 0 Sales EBITDA EBIT  2012 normalized 12

SALES BY STRATEGIC BUSINESS UNITS AND STRATEGIC DISTRIBUTION UNITS  SBU Beverages: temporarily suspended distribution (HRK 000) 2013 2012 2013/2012 in Croatia in 1Q 2013 due to negotiations related to the implementation of new commercial terms and SBU Beverages 651,991 671,934 (3.0%) generally unfavourable developments in the beverages segment in the regional markets. SBU Coffee 1,087,157 1,090,672 (0.3%)  SBU Coffee: decline due to Serbia (unfavourable market developments in the Turkish coffee SBU (Sweet and Salted) Snacks 617,494 600,473 2.8% category) largely annulled by Slovenia, B&H and SBU Savoury Spreads 458,843 463,664 (1.0%) Croatia.  SBU Snacks: sales growth in Serbia, Macedonia SBU Sports and Functional Food 780,992 679,971 14.9% and Croatia; strongest growth in flips, chocolate and biscuits’ categories. SBU Pharma and Personal Care 505,954 481,328 5.1%  SBU Savoury Spreads: weak Argeta performance in B&H, Kosovo and Serbia. SDU Croatia 806,721 876,829 (8.0%)  SBU Sports and Functional Food: strongest growth SDU Slovenia, Serbia, Macedonia 1,938,605 1,930,387 0.4% driven by private label and all own brands.  SBU Pharma and personal care: growth of Multivita Other segments* 423,659 373,152 13.5% in Russia, Dietpharm and new pharma locations.  SDU Croatia: (i) temporarily suspended distribution, Reconciliation** (2,220,129) (2,237,969) (0.8%) (ii) lower sales in beverages segment, (iii) termination of the distribution of certain principal Sales 5,051,287 4,930,441 2.5% brands. * 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 whi ch the products were distributed. 13