FINANCIAL RESULTS IN 2018 (UNAUDITED) YEAR OF RECORDS FOR ATLANTIC - PowerPoint PPT Presentation

FINANCIAL RESULTS IN 2018 (UNAUDITED) YEAR OF RECORDS FOR ATLANTIC GRUPA Zagreb, 28th February 2019

CONTENT 1. KEY DEVELOPMENTS IN 2018 2. FINANCIAL RESULTS IN 2018 3. GUIDANCE FOR 2019 2

KEY DEVELOPMENTS IN 2018 HISTORICALLY THE ORGANIC GROWTH HIGHEST SALES ON OF SALES AND ALL REGIONAL PROFITABILITY MARKETS LOWEST NET HISTORICALLY THE HISTORICALLY THE DEBT/EBITDA OF 1.5x HIGHEST AMOUNT OF HIGHEST MARKET SINCE DROGA CASH GENERATED CAPITALIZATION of THROUGH OPERATIONS KOLINSKA HRK 3.868m of HRK 634m ACQUISITION CONFIRMING CONTINUED LISTING ON „PRIME” SETTLEMENT DISINVESTMENT OF AGREEMENT WITH NON-CORE MARKET OF ZSE AGROKOR GROUP SEGMENTS 3

ORGANIC GROWTH OF SALES AND PROFITABILITY ORGANIC SALES NORMALISED GROWTH EBITDA + 4.2% + 9.3% HRK 5.256m HRK 566m 4

RECORD PERFORMANCE ON CAPITAL MARKET RECORD MARKET CAPITALIZATION ▪ of HRK 3.868m LISTING ON the PRIME MARKET of 1.200 ZSE ▪ ZSE AWARD for THE HIGHEST 1.000 PRICE INCREASE in 2018 +35% YoY 800 ▪ FIRST AWARD for INVESTOR 600 RELATIONS at the Conference of Zagreb Stock Exchange and Fund 400 industry ▪ Increase of AVERAGE DAILY 200 TURNOVER in 2018 for 23% YoY 5

LOWER NET DEBT AND STRONG CASH FLOW LOWEST NET DEBT/EBITDA SINCE HISTORICALLY THE HIGHEST AMOUNT DROGA KOLINSKA ACQUISITION OF CASH GENERATED THROUGH OPERATIONS 700 4.8 4.7 634 622 616 4.2 600 600 3.5 555 3.2 3.2 3.0 505 2.3 500 428 1.5 382 400 300 2010* 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 6 * Pro-forma konsolidirano

SUCCESS OF OWN BRANDS # 1 Bosnia and Herzegovina Slovenia Austria Switzerland Montenegro Since August 2018 CROATIA 7

SUCESS OF OWN BRANDS Barcaffe B’n’E HoReCa sales Espresso +47% yoy +19% yoy +13% yoy 110th birthday 80th birthday 10th birthday +25% yoy in +9% yoy +6% yoy Russia 8

NEW EXTERNAL PRINCIPALS 9

DISINVESTMENT OF NON-CORE SEGMENTS Atlantic Grupa sold NEVA to renowned Croatian cosmetics manufacturer – MAGDIS Production site in Rakitje and product potrfolio with 52 employees Neva’s Atlantic Grupa remains distributor of portfolio Sales of HRK 60m EBITDA of HRK 4.4m Negative effect of one-off item (gain from sale reduced by the provision for legal claim): HRK 19.7m 10

CONTENT 1. KEY DEVELOPMENTS IN 2018 2. FINANCIAL RESULTS IN 2018 3. GUIDANCE FOR 2019 11

RESULTS IN LINE WITH EXPECTATIONS 2018A/2018E: 99.2 2018A/2018E: 102.8 2018A/2018E: 103.1 2018A/2017A: 100.3 2018A/2017A: 109.3 2018A/2017A: 113.1 2018A 2018A 700 2018E 566 2018E 550 5.300 517 5.256 5.238 2017A 2017A 600 5.400 386 500 375 5.200 342 400 5.000 300 4.800 200 100 4.600 0 4.400 EBITDA EBIT SALES * Normalized data 12

ORGANIC SALES GROWTH OF +4.2% HRKm 2018 2017 2018 / 2017 COMMENTS SBU Coffee 1.124 1.086 3.5% ▪ SBU Coffee: growth in all key markets and SBU Beverages 711 661 7.5% key categories. SBU (Sweet and Salted) Snacks 688 666 3.3% ▪ SBU Beverages: growth of the brands SBU Pharma and Personal Care 648 687 (5.7%) Cedevita, Donat Mg, Cockta and bottled SBU Savoury Spreads 639 569 12.4% waters. ▪ SBU (Sweet and Salted) Snacks: growth in SBU Sports and Functional Food 134 401 (66.6%) Serbia, B&H, Montenegro and Slovenia. From which private label production 0,3 193,9 (99.8%) ▪ SBU PPC: a decrease in due to baby food. SDU Croatia 1.265 1.126 12.4% Excluding baby food, sales growth +2.2%. SDU Serbia 1.253 1.191 5.3% ▪ SBU Savoury Spreads: growth of Argeta in SDU Slovenia 908 872 4.1% all regional markets, Western European markets and the USA. Global distribution network 371 399 (7.0%) ▪ SBU SFF: disinvestment of private label management production Other segments* 333 311 7.1% ▪ SDU and DU: growth in all key markets, Reconciliation** (2.818) (2.730) n/a except Russia, Germany and Switzerland Sales 5.256 5.238 0.3% Comparative period has been adjusted to reflect current period reporting. * Other segments include BU Gourmet, DU Macedonia and DU Austria 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 13 operating segments. ** Line item “Reconciliation” relates to the sale of own brands which is included in the appropriate SBU and BU and in SDUs , SDRs and DUs through which the products were distributed.

SALES BY SEGMENTS 2018 2017 Principal brands 22.2% Principal brands 25.2% 1% 1% Coffee 20.8% Coffee 21.4% 12% 3% 8% 22% Beverages 12.6% 25% Beverages 13.5% 12% 12% Sweet and salted Sweet and salted snacks snacks 12.7% 13.1% 11% Savoury spreads 10.9% Savoury spreads 12.1% 13% 21% 21% 13% Pharma & Personal Pharma & Personal care 13% care 12.5% 11.5% 12% Sports and Functional Sports and Functional Food Food 7.7% 2.5% Gourmet 0.6% Gourmet 0.7% 14

SALES BY MARKETS 2018 2017 Croatia 33.0% Croatia 29.9% Serbia 24.3% Serbia 23.1% 3% 2% 4%4% 5% Slovenia 16.7% Slovenia 17.3% 7% 8% 33% 30% Bosnia and Herzegovina Bosnia and Herzegovina 6% 8% 7.8% 8.0% 8% Other regional markets* Other regional markets* 6.4% 6.7% 17% Key European markets** Key European markets** 17% 8.1% 5.2% 23% 24% Russia and CIS 4.4% Russia and CIS 3.4% Other markets 3.6% Other markets 2.1% * Macedonia, Montenegro, Kosovo 15 ** Germany, Switzerland, Austria, Sweden

HISTORICALLY HIGHEST SALES ON REGIONAL MARKETS +10.8% +5.4% +4.1% +2.9% +5.1% 1.736 1.566 1.800 1.275 2018 2017 1.210 1.400 909 (in HRKm) 873 1.000 422 410 352 335 600 200 Croatia Serbia Slovenia Bosnia and Other regional Herzegovina markets* ▪ Croatia: sales growth (i) the pharmacy chain Farmacia, (ii) Cedevita, Kala, Cockta, Argeta and Barcaffe, & (iii) most of external principals. ▪ Serbia: sales growth of key brands from coffee, sweet and salted, beverages, savoury spreads and gourmet segments. ▪ Slovenia: sales growth (i) Cockta, Cedevita and Donat Mg, Argeta and Barcaffe, and (ii) external principals. ▪ B&H: sales growth (i) Argeta, (ii) Cockta and Cedevita & (iii) Barcaffe espresso coffee. ▪ Other regional markets: sales growth in Macedonia and Montenegro, while sales decreased in Kosovo. 16

SALES PROFILE BY MARKETS 2018 2017 -35.2% -22.3% -42.9% 425 600 275 (in HRKm) 229 400 178 190 109 200 0 Key European Russia and Commonwealth Other markets markets* of Independent States ▪ Key European markets* (Germany, United Kingdom, Italy, Switzerland, Austria, Sweden, Spain): a decrease in sales in most markets in the sports and functional food segment. If we exclude this decrease, other markets recorded growth of +19.5%. ▪ Russia and CIS: a decrease in sales primarily caused by the decrease in baby food and sports and functional food sales, partly compensated by the increase in sales of Donat Mg and Argeta. If we exclude this decrease, Russia and CIS grew slightly. ▪ Other markets: a significant decrease in sales of the sports and functional food segment. If we exclude this decrease, other markets recorded a +6.0% growth. 17

SALES PROFILE BY CATEGORIES 2018 2017 4% Own brands 66.9% Own brands 66.6% 8% 0% 7% Principal brands 25.2% Principal brands 22.1% 22% 25% Farmacia 7.9% Farmacia 7.4% 67% 67% Private label 0.1% Private label 3.8% ▪ Own brands: +0.7% due to: Argeta, Cedevita, Donat Mg, Cockta, Barcaffe, Grand, Bonito, Najlepš e želj e, Smoki, Bananica and Prima sticks. Decrease in sales of brands in sports and functional food and baby food, if excluding the decrease, sales growth +4.4%. ▪ Principal brands: +14.3% based on the growth of existing principals and adding new principals. ▪ Private label: -97.6% following the private label production disinvestment of sports and functional food segment and disinvestment of Neva. ▪ Farmacia: +6.2% due to increase in sales of existing Farmacia locations and newly opened specialized store (in 2018 Farmacia consists of 85 locations). 18

PROFITABILITY DYNAMICS +13.1% -11.6% +23.8% -6.2% +9.3% -9.8% 800 582 566 2018 2017 546 517 600 406 386 367 342 276 262 400 244 211 200 0 EBITDA Normalised EBITDA EBIT Normalised EBIT Net profit Normalised Net profit ▪ Higher EBITDA is mainly impacted by higher sales in most business units, lower costs of production materials and lower operating costs, despite the higher COGS and MEX. ▪ Significantly lower interest expense due to lower foreign exchange gains. ▪ Normalised net profit increased following the increase in EBIT and lower tax expense. 19