ATLANTIC GRUPA Company of Added Value Erste Group Investor - PowerPoint PPT Presentation

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

CONTENT OVERVIEW OF ATLANTIC GRUPA FINANCIAL OVERVIEW IN H1 2014 FINANCIAL OVERVIEW IN 2013 STRATEGIC GUIDANCE 2

ONE OF THE LARGEST FOOD AND BEVERAGES COMPANIES IN THE SEE REGION Business FY13 sales  Fast Moving Consumer Goods  EUR 674 millions Headquarters Key Markets  Zagreb, Croatia (Europe)  SEE region, Western Europe, Russia  presence on over 40 markets Foundation  1991 Production locations  14 production locations in Croatia, Slovenia, Bosnia and No of employees Herzegovina, Serbia, Macedonia and Germany  4,228 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 SMOKI, NAJLEPŠE ŽELJE , BANANICA  Among the leading confectionary & snacks producers in the region  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, 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 7.5. 3

DEVELOPMENT CYCLE: EXTENSIVE M&A TRACK RECORD European company Regional company National company DISTRIBUTION & PRODUCTION Acquisition of Kalničke vode Bionatura 2010 Acquisition of Melem VERTICAL INTEGRATION 2004 Acquisition of DROGA KOLINSKA 2010 Cooperation Johnson & Johnson 1999 Atlantic Slovenia 2004 Acquisition of pharmacies – Farmacia 2008/9 DISTRIBUTION Cooperation Duracell 1996 Atlantic Macedonia 2003 IPO 2007 Distribution center Rijeka 1994 Acquisition of Neva 2003 Acquisition of Fidifarm & Multivita 2007 Distribution center Osijek 1994 Acquisition of CEDEVITA 2001 Representative office Moscow 2006 Distribution center Split 1992 Atlantic Serbia 2001 Acquisition of Haleko & Power Gym: Cooperation Wrigley 2005 1991 Representative office B&H MULTIPOWER 2001 Sales in EURm 674 657 700 630 602 CAGR 1993-2013: 600 +38.0% 500 400 302 293 267 300 223 186 200 145 102 90 81 61 100 42 36 33 27 17 12 6 1 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2010* 2011 2012 2013 2010*: Pro-forma consolidated with Droga Kolinska. 4

ATLANTIC GRUPA’S BUSINESS MODEL TODAY SBU SBU SBU SBU SBU SBU BU COFFEE BEVERAGES SPORTS AND PHARMA SAVOURY SNACKS BABY FOOD FUNCTIONAL AND SPREADS FOOD PERSONAL CARE SDU SDU SDU SDU SDU DU DU Serbia HoReCa Croatia International CIS Slovenia Macedonia Hotels, Markets* Restaurants, Cafes  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

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% Emil Zoran Stanković Neven Vranković Mladen Veber Tedeschi, DEG, 8.5% Senior Group Vice President Group Vice President Group Vice President 50.2% Business Operations Finance Corporate Affairs Lada Strategic Management Council Tedeschi Fiorio, 5.8% Deals with vital strategic and operational corporate issues. Consists of: Board Members, Vice Presidents and General Managers of each SBU Others, Management and SDU, Senior Executive Director for Regional KAM and Sales Croatia, the 8.0% 1.1% Secretary General, Executive Directors of Corporate Controlling, IT, Central Purchasing and Human Resources, and the Head of the Investment Committee. Supervisory board Supervisory Board Lada Peter Franz Vedrana Siniša Jelušić Zdenko Tedeschi Elam Josef Aleksandar Adrović Petrović Håkansson Flosbach Pekeč Kašić Fiorio Nomination and Corporate Audit Committee Remuneration Governance President Vice President Member Member Member Member Member of the of the of the of the of the of the of the Committee Committee Supervisory Supervisory Supervisory Supervisory Supervisory Supervisory Supervisory Board Board Board Board Board Board Board 6

PRODUCT/DISTRIBUTION PORTFOLIO OVERVIEW Carbonated soft drinks Beverages Turkish Coffee Vitamin instant drinks Coffee Espresso coffee Functional waters Instant coffee Waters Tea and Functional tea Personal care Body care Savoury spreads Meat spreads Face care Fish spreads Lip care Sandwiches Tooth care Savoury snacks Pharma Snacks Food supplements Chocolate tablets OTC products Wafers & Biscuits Pharmacy chain Bars functional food Baby cereals Sports and Baby food Sports food Milk formula Weight management range Tea Energy range Water Body building range Biscuits Distribution Own brands International brands 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. 8

GEOGRAPHIC PRESENCE AND MACROECONOMIC ENVIRONMENT Sales by countries Croatia 2011 2012 2013f 2014f 2015f Other markets 6.4% GDP 0.0% (2.0%) (0.7%) 0.5% 1.2% Russia and CIS Unemployment 13.5% 15.9% 17.6% 17.6% 17.2% 5.9% Croatia CPI 2.2% 3.4% 2.3% 1.3% 1.5% 24.8% EUR/HRK 7.43 7.52 7.57 7.63 7.64 Key European markets** Serbia 2011 2012 2013f 2014f 2015f 11.7% GDP 1.6% (1.5%) 2.1% 1.3% 2.2% Unemployment 23.0% 23.9% 22.1% 22.3% 21.4% Serbia Other regional CPI 11.1% 7.3% 7.9% 4.3% 5.0% 24.1% markets* EUR/RSD 101.97 113.09 113.11 117.09 120.90 6.3% Slovenia Bosnia and Slovenia 2011 2012 2013f 2014f 2015f 13.6% Herzegovina GDP 0.7% (2.5%) (1.6%) (0.1%) 1.3% 7.2% Unemployment 8.2% 8.9% 10.2% 10.8% 10.7% Overview of production facilities CPI 2.1% 2.8% 1.9% 0.8% 1.3% Slovenia EUR/USD 1.39 1.29 1.33 1.36 1.27 Croatia Germany 2011 2012 2013f 2014f 2015f GDP 3.3% 0.7% 0.4% 1.8% 2.0% Bosnia and Unemployment 5.9% 5.5% 5.3% 5.2% 5.1% Herzegovina CPI 2.5% 2.1% 1.6% 1.4% 1.4% Serbia EUR/USD 1.39 1.29 1.33 1.36 1.27 Russia 2011 2012 2013f 2014f 2015f GDP 4.3% 3.4% 1.3% 2.3% 2.7% Unemployment 6.6% 5.5% 5.5% 5.9% 6.2% + production facility Macedonia CPI 8.4% 5.1% 6.8% 5.9% 5.0% in Germany EUR/RUB 40.89 40.07 42.36 48.21 49.85 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

SALES PROFILE AND BUSINESS ENVIRONMENT Sales by segments Principal brands Top 5 factors influencing F&B industry Baby food 15.0% Beverages 12.9% 4.2%  Collaboration in innovation  Between ingredient and packaging firms and industry Sports and Savoury Functional  Ethics at eye level spreads Food 9.1%  Environmental stewardship, animal welfare and fair play for workers 15.5% are among conditions of production that consumers now expect  Rising food prices Sweet and  Smaller grain stockpiles, a growing population, increased demand for salted snacks Coffee Pharma & animal protein and a changing climate disrupt supply/demand balance 12.2% Personal 21.5%  Food taxes and subsidies care 9.7%  Balance taxes on less healthy foods with subsidies for healthy ones Sales by brands Principal  Simple ingredients brands 15.0% Key retail trends  Shoppers hungry for value Private label Own brands 6.4%  Online, digital and multi-channel 72.5%  Redefinition of private label Farmacia  Making the most of events 6.1%  Focus on the store environment Sales by segments and brands in 2013; Business environment source: www.confectionerynews.com, http://uk.synergytaste.com, www.beveragedaily.com, IGD Retail Analysis. 10