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Company of Added Value
2016
PRODUCTION
DISTRIBUTION
= Leading regional
manufacturer and
distributor of FMCG brands
+
19— production facilities
in 6 countries18— distribution
centres 5400— employees on
12 markets40— product presence
on over 40 markets
Among the leading food and
beverage companies in the SEE
region
Founded in 1991
Listed on the Zagreb Stock Exchange
since 2007
MCap (07/10/2016): EUR 391m
FY15 sales: EUR 711m
FY15 EBITDA: EUR 75m
3
DEVELOPMENT OF
ATLANTIC GRUPA
1 6 12 17 27 33 36 4161
80 89 100143
183220
264289 299
594622
649 665 673711
0
100
200
300
400
500
600
700
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2010* 2011 2012 2013 2014 2015
Sales in EURm
CAGR 1993-2015:
+31.2%
HISTORICAL DEVELOPMENT: TRACK RECORD IN VALUE CREATION 5
2010*: Pro-forma consolidated with Droga Kolinska
2005-2015
2015: New energy bars factory
2010: Acquisition of DROGA
KOLINSKA
Several small-size acquisitions
2007: IPO
2005: Acquisition of MULTIPOWER
2000-2004
Regional expansion
2001: Acquisition of CEDEVITA
1990’s
Distribution centres across Croatia
Various distribution cooperations
DIS
TR
IBU
TIO
N
DIS
TR
IBU
TIO
N &
PR
OD
UC
TIO
N
VE
RTIC
AL
INTE
GR
ATIO
N
European company
National companyRegional company
MULTIPOWER
CEDEVITA
DROGA
KOLINSKA
4,206
Cedevita (2001) Multipower Haleko (2005) Droga Kolinska (2010)
Capability to successfully execute spin-offand turnaround and provide the acquired
products with new markets and distributionchannels
Capability to successfully executecross-border transactions in
developed markets and entering newdistribution channels (sport channel)
Capability for successfully acquiringlarger companies, utilizing leveraged
structures and integrating complexbusinesses
CAGR 6.2%
59
101
0
20
40
60
80
100
120
2006 2015
Total revenues, EURm
0
4,000
8,000
12,000
2001 2015
Sales volume (tonnes), 2001 and
2015
Vitamin instant drink On the GO HoReCa
70 75
333
221
4.7
3.0
2005 2010 2015 2020
0.0
2.0
4.0
6.0
0
200
400
2010 2015
Atlantic Grupa - 2010 and 2015
EBITDA Net debt Net debt/EBITDA
10,208CAGR 6.5%
6ATLANTIC GRUPA’S TRANSFORMATIONAL ACQUISITIONS
RECENT BUSINESS DEVELOPMENT 7
New energy bars factory in Nova Gradiška
In-housing energy bars production (Nova Gradiška, Croatia)
from outsourced production in Germany
Project with the total value of EUR 13 million, the largest
individual investment in Atlantic Grupa’s history
Created 50 new jobs (160 planned in total)
Expected positive impact on the improvement in operating
profitability of the SBU SFF, tax benefits and incentives
expected over the project duration
Acquisition of Foodland d.o.o.
Production of high-quality products under own brands Granny’s
Secret and Amfissa
Own production facility in Igroš, southern Serbia
Sales of EUR 6 million in 2015
International expansion potential
Granny’ Secret with its palette of supreme quality products
prepared in a traditional way meets both strategic goals:
expanding the current brand portfolio with international
potential and internationalization
Regional expansion
Using the strength of AG’s distribution network and
infrastructure to increase distribution reach of brand Granny’s
Secret across the region
ATLANTIC GRUPA
TODAY
9
PORTFOLIO OVERVIEW 9
BRANDS STRUCTURING
Top 10 Slovenia Top 10 Croatia Top 10 Serbia Top 10 B&H Top 10 Macedonia
1 Barcaffe Jana Plazma Argeta Argeta
2 Milka Cedevita Smoki Milka Milka
3 Radenska Vegeta Milka Coca Cola Stobi flips
4 Coca Cola Jamnica Coca Cola Cedevita Vegeta
5 Argeta Coca Cola Knjaz Miloš Violeta Coca Cola
6 Alpsko mleko Milka Moja kravica jogurti Smoki Orbit
7 Cocta Gavrilović pašteta Dijamant ulje Jaffa cakes Bitolski jogurti
8 Fructal Franck kava Začin C Vegeta Pelisterka
9 Cedevita Dukat jogurti Fairy Orbit Nescafe
10 Perutnina Ptuj meso Nivea Orbit Nivea Pepsi
Source: Valicon survey 2016
10
Market shareBarcaffe/
Grand kafaArgeta Smoki Cedevita
Value share 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014
Croatia 13.2% 13.3% 10.4% 25.0% 23.1% 17.3% 18.2% 18.2% 17.2% 78.5% - 79.1%
Serbia 52.3% 52.0% 51.3% 23.2% 20.4% 19.3% 54.9% 57.4% 56.7% 73.7% 73.0% 72.2%
Slovenia 77.3% 75.9% 76.3% - 41.0% 41.8% 46.2% 41.6% 43.0% 86.0% - 80.9%
B&H 26.2% - - - 50.3% 50.1% 36.1% 39.1% 39.1% 80.9% 77.4% 79.3%
Source: Nielsen Retail Panel for food and non-food categories
BRANDS STRUCTURING
INTERNATIONAL
REGIONAL
LOCAL
11
DISTRIBUTION
STRENGTH OF
DISTRIBUTION Developed network with 18
distribution centers
Direct access on over 60,000 sales
points in SEE
Over 1,000 delivery vehicles
13DISTRIBUTION
DISTRIBUTION
DISTRIBUTION
ZONE WEST ZONE EAST
Leading Distributor of Multinational
Brands
Atlantic Grupa is one of leading
distributors of high-quality top FMCG
brands (both own and principal) in SEE
14
Portion of brands within
portfolio (in addition to own
brands):
Portion of brands within portfolio (in
addition to own brands):
Portion of brands within portfolio
(in addition to own brands):
CROATIA
Established: 1991
Headquarter: Zagreb
Distribution centres: 4 (Zagreb,
Rijeka, Osijek, Split)
Vehicles: 225
Warehouse space: 21,000 pal
Distribution coverage increased in
HoReCa („Barcaffe-on-the go” at gas
stations)
Portion of brands within portfolio (in
addition to own brands):
SERBIA
Headquarter Belgrade
4 Distribution centres (Novi Sad,
Belgrade, Čačak, Niš)
260 vehicles
13.920 m2 warehouse space
HoReCa channel - growth of
installed espresso machines
SLOVENIA
Headquarter Ljubljana
1 Distribution centre
Logistics: BTC
Distribution coverage
increased in HoReCa
(„Barcaffe-on-the go” at gas
stations)
MACEDONIA
Headquarter Skopje
1 Distribution centre
95 vehicles
Storage: 2,580 m2
HoReCa channel –
continuously
strengthening
STRATEGIC DISTRIBUTION UNITS – ZONE EAST 15
The key Atlantic Grupa’s brands for the distribution
in Baltic & CIS are:
SDR CIS & BALTIC
Russia and neighbouring countries (region of the Commonwealth of
Independent States, CIS) are becoming increasingly important for
the business development of Atlantic Grupa
This distribution unit is responsible for the distribution of all brands
that have the potential to achieve above average growth in the
market
Approximately 70% of products sold within this unit relate to brand
Bebi, while the remaining portfolio includes Donat Mg, Multivita,
Argeta, Multipower
STRATEGIC DISTRIBUTION UNIT ZONE WEST
Atlantic Grupa’s goal is to continue to increase the presence in
international markets
The market entry strategy in international markets is based on:
Local market structures operating directly with the leading
retail chains
Cooperating with long-standing distribution partners in
order to optimise the availability of products to consumers
The key Atlantic Grupa’s brands for the distribution in
international markets are:
STRATEGIC DISTRIBUTION REGION AND UNIT – SDR CIS & BALTIC AND ZONE WEST 16
SALES PROFILE
GEOGRAPHIC PRESENCE AND MACROECONOMIC ENVIRONMENT
SEE region:
Structural
reforms and
deleveraging
underway
Internal
devaluation
caused by
long
recession
increased
competitiven
ess of local
production
Regional
economic
recovery in
2015
Outside of
Russia,
CIS and
Serbia
currencies
remain
stable
Atlantic Grupa’s revenue
streams diversified with new
acquisitions:
Multipower (2005): exposure
to Western Europe
Droga Kolinska (2010):
regional diversification and
greater exposure to Russia
and CIS
Strategy going forth: to reduce
dependancy on the SEE region
with growth coming from
Western Europe and Russia/CIS
Key TakeawaysGDP change, const. prices 2011 2012 2013 2014 2015 2016F
Croatia -0.3 -2.2 -1.1 -0.4 1.7 1.9
Serbia 1.4 -1.0 2.6 -1.8 0.7 1.8
Slovenia 0.6 -2.7 -1.1 3.0 2.9 1.9
Germany 3.7 0.6 0.4 1.6 1.5 1.5
Russia 4.3 3.4 1.3 0.6 -3.8 -1.9
Unemployment rate 2011 2012 2013 2014 2015 2016F
Croatia 13.3 15.2 17.0 17.1 16.9 16.4
Serbia 23.6 24.6 23.0 19.7 18.5 18.7
Slovenia 8.2 8.9 10.1 9.7 9.1 7.8
Germany 5.9 5.4 5.2 5.0 5.0 4.6
Russia 6.5 5.5 5.5 5.2 5.8 6.5
CPI (avg) 2011 2012 2013 2014 2015 2016F
Croatia 2.3 3.4 2.2 -0.2 -0.5 0.4
Serbia 11.1 7.3 7.7 2.1 1.4 1.7
Slovenia 1.8 2.6 1.8 0.2 -0.5 0.1
Germany 2.5 2.1 1.6 0.8 0.1 0.5
Russia 8.4 5.1 6.8 7.8 15.5 8.4
International Monetary Fund, World Economic Outlook Database, April 2016
Croatia
26.1%
Serbia
23.2%Slovenia
15.8%
Bosna and
Herzegovina
7.1%
Other regional markets
6.0%
Key European
markets
11.2%
Russia
and CIS
4.4%
Other
markets
6.2%
Sales 2015 (EUR 711m) Sales 2010 (EUR 302m)
Croatia
55.2%
Serbia
5.7%
Slovenia
7.6%
Other regional markets
5.6%
Germany, UK, Italy
14.9%
Russia
and EE
1.8%
Other
markets
9.2%
18
Key market considerations
Stable demand growth despite stagnation in overallconsumption
Rise in private label (convergence towards EU levels)
Demand for differentiated and innovative products Retail consolidation Reduced availability of shelf space
Strong competition from both local and regional FMCGplayers as well as large FMCG multinationals
Atlantic Grupa’s strengths
Well diversified product portfolio – less revenue volatilityand higher bargaining power
Constant product and marketing innovations (Cedevita on
the go, Black’n’Easy etc.) Strong regional distribution network – better access to shelf
and HoReCa space
Even though key market categories were stagnating orfalling in volume in 2015, AG’s market shares are growing
AG BRANDS WITH SALES OVER EUR 15m in 2015
Principal
brands
19.7%
Coffee
20.1%
Beverages
12.3%
Snacks
11.7%
Savoury
Spreads
10.0%
Pharma and
Personal Care
9.1%
Sporst
and
Functiona
l Food
14.2%
Baby
Food
2.9%
Sales by segments 2015
(EUR 711m)
Sales by brands 2015
(EUR 711m)
Own brands
65.3%
Principal
brands
19.7%
Private
label
8.8%
Farmacia
6.2%
19SALES PROFILE AND BUSINESS ENVIRONMENT
594
622
649658
673
711
520
540
560
580
600
620
640
660
680
700
720
Pro forma
cons 2010
2011 2012 2013 2014 2015
Sales, EUR millions
11.8% 11.1% 11.5% 12.0% 11.8%
10.5%
6.2%7.5%
8.2% 8.6% 8.7%7.5%
2.8%1.5%
2.3%
4.0% 4.2% 4.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Pro formacons 2010
2011 2012 2013 2014 2015
Margin overview
EBITDA margin EBIT margin Net profit/loss margin
4.7 4.8
4.2
3.53.2
3.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Pro forma
cons 2010
2011 2012 2013 2014 2015
Net debt/EBITDA
11.3%
4.7%
7.6%
12.7% 12.4% 13.1%
11.8%
9.4%10.4%
11.7%12.7% 12.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Pro forma
cons
2010
2011 2012 2013 2014 2015
ROaE, ROCE
ROaE ROCE
20HISTORICAL DEVELOPMENT OF KEY FINANCIAL INDICATORS
Neven VrankovićVice President Corporate Affairs
Emil Tedeschi
Founder / President of the Management Board
Free float: 38.0%
(according to the Zagreb
Stock Exchange, free float
does not include: treasury
shares, shares in sole
ownership over 5%, unless
they are owned by pension
funds)
Management Board Ownership structure as of October 5th 2016
ATLANTIC GRUPA - THE BEST
MANAGED COMPANY IN 2015
1st in CROATIA
2nd in the CEE region
1st in the FOOD & BEVERAGE
sector in the CEE
Mladen Veber
Senior Vice President Business Operations
Zoran StankovićVice President Finance
Emil
Tedeschi
50.2%
Lada
Tedeschi
Fiorio
5.8%
EBRD
2.0%
Management
1.2%
Croatian pension funds
30.1%
Others
10.7%
21EXPERIENCED MANAGEMENT TEAM AND STABLE OWNERSHIP STRUCTURE
22PERFORMANCE ON CROATIAN CAPITAL MARKET
6%
-11%
31% 34%
7%
-38%
18%
48%
-47%
18%
-3% -3%
3% 0%
-18%
5%
16%
-67%
19%
-1%
1%2%
-1%
-15%
10%
-80%
-40%
0%
40%
07.10.2016. 2015 2014 2013 2012 2011 2010 2009 2008
Performance on capital market ATGR-R-A Crobex Crobex10
Valuation 30.06.2016.** 30.06.2015.** 31.12.2015.
Last price in reporting period 811.6 890.0 832.9
Market capitalization* (in HRK millions) 2,706.1 2,967.5 2,777.1
Average daily turnover (in HRK thousands) 985.7 1,400.6 895.9
EV (in HRK millions) 4,484.2 4,795.0 4,457.7
EV/EBITDA 8.2 8.3 7.9
EV/EBIT 11.5 11.5 11.0
EV/sales 0.8 0.9 0.8
EPS (in HRK) 69.7 63.8 72.7
P/E 11.6 14.0 11.5
*Closing price multiplied by the total number of shares
**Data on LTM basis
FINANCIAL OVERVIEW
FINANCIAL OVERVIEW 2015 (1/2)
ROaCE is calculated as EBIT/(Average (Total Equity+LT debt-Cash))
Highlights from 2015 results:
Sales growth in all regional markets (Croatia, Serbia, Slovenia,
Bosnia and Herzegovina and Macedonia), due both own brands and
principal sales growth, which confirmed the position of Atlantic Grupa
as a leading distributor in the region.
Decline in sales in Russia and CIS markets primarily due to
strong rouble depreciation and political instability in Ukraine.
EBITDA lower by 5.0% due to restructuring costs in the Sports
and functional food segment, the consolidation of the acquired
company Foodland, the decrease of sales and pressure on profit
margins in CIS countries, the investments in setting up the
distribution companies in Germany and Austria, and the increase in
costs of some of the main raw materials.
Continued deleveraging: net debt repayment amounted to EUR
32.9m with net debt/EBITDA of 3.0 as at 31 December 2015.
In 2015 Atlantic Grupa finished the construction of new energy
bar factory in Nova Gradiška with the total value of the investment of
EUR 13m.
The regional business environment was marked with Agrokor’s
acquisition of Mercator, which resulted in entrance of the entire
portfolio of Atlantic Grupa (including Argeta and Barcaffe) in
Konzum’s stores.
Costs of production materials increased by 10.9% in 2015,
primarily as a result of the increase in prices of raw coffee (14% to
29% higher average coffee prices comparing to 2014). By continuous
hedging, in 2015 Atlantic Grupa reduced the effects of higher prices
of raw coffee.
EURm 2012 2013 2014 20152015/
2014
Revenues 665 663 680 717 5.5%
Sales 657 658 673 711 5.6%
EBITDA 74 78 79 75 (5.0%)
EBIT 53 56 58 53 (8.3%)
Net profit 15 26 28 32 13.6%
EBITDA margin 11.3% 11.8% 11.7% 10.5% -117 bp
EBIT margin 8.1% 8.5% 8.6% 7.5% -114 bp
Net profit margin 2.3% 4.0% 4.2% 4.5% +32 bp
ROaA 2.1% 3.9% 4.1% 4.6% +47 bp
ROaE 7.6% 12.7% 12.4% 13.1% +66 bp
ROaCE 10.4% 11.7% 12.7% 12.5% -26 bp
24
FCF: CFO before interest paid increased by CFI
Equity and liabilities structure
December 31st 2015
64 67
50 57
9.9%10.2%
7.4%8.5%
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
2012 2013 2014 2015
FCF* (EURm), FCF/Sales ratio
FCF (EURm) FCF/SALES
(in EUR millions) 2012 2013 2014 2015
Net debt 310 271 254 221
Total assets 678 669 694 697
Total Equity 192 220 231 256
Current ratio 1.8 1.8 1.5 1.3
Gearing ratio 61.7% 55.2% 52.3% 46.3%
Net debt/EBITDA 4.2 3.5 3.2 3.0
Interest coverage ratio 2.6 3.7 4.7 5.5
Capital expenditure 10 13 25 15
Cash flow from operating activities 39 55 59 62
Dividend payment for the year - 4.0 4.6 5.3
Other
liabilities
5.9%
Capital
and
reserves
36.3%
Trade and other
payables
19.5%
Bond
2.1%
Short term
borrowings
12.3%
Long term
borrowings
23.9%
2-5 years
52.0%
1-2
years
48.0%
Debt repayment schedule
December 31st 2015
25FINANCIAL OVERVIEW 2015 (2/2)
PERFORMANCE BY SBUs AND SDUs IN 2015
* Other segments include SDU HoReCa, SDU CIS, BU Baby Food, DU Macedonia and business activities not allocated to business and distributionunits (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 whichthe products were distributed.
Sales (in EUR 000) 2015 2014 2015/2014
SBU Beverages 87,641 85,176 4.3%
SBU Coffee 142,753 136,891 5.7%
SBU (Sweet and Salted)
Snacks83,099 81,923 2.8%
SBU Savoury Spreads 70,820 62,851 14.2%
SBU Sports and Functional
Food101,109 103,877 (1.4%)
SBU Pharma and Personal
Care67,055 65,779 3.3%
SDU Croatia 123,462 112,567 11.1%
SDU Serbia 154,618 144,420 8.5%
SDU International markets 77,620 77,657 1.3%
DU Slovenia 100,246 96,732 5.0%
Other segments* 102,639 109,401 (4.9%)
Reconciliation** (399,838) (394,823) n/a
Sales 711,225 682,450 5.6%
EBITDA (in EUR millions) 2015 2014 2015/2014
SBU Beverages 20.6 16.7 23.4%
SBU Coffee 27.8 29.7 (6.4%)
SBU (Sweet and Salted)
Snacks12.9 13.0 (0.6%)
SBU Savoury Spreads 13.1 13.9 (6.0%)
SBU Sports and Functional
Food(1.5) 2.1 (171.1%)
SBU Pharma and Personal
Care5.6 6.4 (12.7%)
SDU Croatia 3.1 2.0 48.9%
SDU Serbia 4.2 3.7 11.9%
SDU International markets 0.6 1.9 (71.1%)
DU Slovenia 5.5 4.8 15.7%
Other segments* (17.2) (15.8) 8.9%
Group EBITDA 74.6 78.6 (5.0%)
26
KEY BUSINESS DEVELOPMENTS IN 2015
Performance in 2015 line with guidance despite challenging macroeconomic conditions
Significant decrease of financial debt and increase of cash flow from operating activities
Development of own brands and opening of new pharma locations
Integration of Foodland and production start in Nova Gradiška bars factory
Risk management and consolidation of IT solutions
Reorganization of the distribution business
Restructuring and reorganization of Sports and Functional food and sale of the tea
business
27
KEY BUSINESS DEVELOPMENTS IN 2016
Maturing bond successfully refinanced
Strategic guidance as announced on February 28th 2016
New distribution companies established in Germany and Austria
Continuation of the restructuring of the SBU Sports and Functional Food, termination of
cooperation with the major buyer of private label
Further consolidation of IT by SAP business solutions implementation
2828
Long term debt refinanced (prolonged maturity and lower interest rates)
FINANCIAL INDICATORS IN 2016
(in HRK millions) H1 2016 H1 2015 H1 2016/H1 2015
Sales 2,456.6 2,540.1 (3.3%)
EBITDA 259.8 280.4 (7.4%)
EBIT 192.2 207.9 (7.5%)
Net profit/(loss) 133.7 143.9 (7.1%)
Profitability margins
EBITDA margin 10.6% 11.0% -47 bp
EBIT margin 7.8% 8.2% -36 bp
Net profit margin 5.4% 5.7% -22 bp
29
(in HRK millions) H1 2016 2015
Net debt 1,775.3 1,678.1
Total assets 5,366.5 5,294.6
Total Equity 1,977.0 1,945.3
Current ratio 1.4 1.3
Gearing ratio 47.3% 46.3%
Net debt/EBITDA 3.2 3.0
H1 2016 H1 2015
Interest coverage ratio 6.0 5.1
Capital expenditure 48.0 32.8
Cash flow from operating activities (115.2) 155.9
Capital and reserves 36.8%
Long term borrowings 23.0%
Short term borrowings 12.7%
Bond 3.7%
Trade and other payables18.6%
STRATEGIC GUIDANCE
GUIDANCE TRACK RECORD
Atlantic Grupa listed on the Zagreb Stock
Exchange on November 19th 2007
From 2008 Atlantic Grupa publishes
guidance for the following financial year
and delivers it
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012 2013 2014 2015
Sales (EURm)
99%103%
99%98% 98% 102%
102%
93%
0
1.000
2.000
3.000
4.000
5.000
6.000
Sales EBITDA EBIT
4.930
559399
4.964
550385
Reported Guidance99%
102%104%
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013 2014 2015
EBITDA (EURm)
100%101%98%
102%101% 96% 100%
98%
0
1.000
2.000
3.000
4.000
5.000
6.000
Sales EBITDA EBIT
4.930
559399
4.964
550385
Reported Guidance99%
102%104%
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 2014 2015
EBIT (EURm)
104%95%99%
104%101%
96%
100%
97%
0
1.000
2.000
3.000
4.000
5.000
6.000
Sales EBITDA EBIT
4.930
559399
4.964
550385
Reported Guidance99%
102%104%
31
STRATEGIC GUIDANCE FOR 2016
Strategic
management
guidance
Focus on: (i) stronger internationalisation of brands with international potential (Multipower, Argeta,
Donat Mg, Bebi, Cedevita, Granny’s Secret), (ii) strengthening the position of regional brands (Cockta,
Cedevita, Smoki, Grand Kafa, Barcaffe, Najlepše želje, Chipsos), (iii) active development of the
regional HoReCa portfolio, and (iv) further restructuring of the business unit sports and functional
food.
Special efforts will be placed into listing and positioning of own brands into retail channel in Germany
and Austria and on marketing activities on those markets.
The management of Atlantic Grupa in 2016 expects lower average prices of raw coffee in the global
commodity markets and an unfavourable effect of the EURUSD exchange rate that management plans
to largely annul by active hedging, continuous cost management and business processes optimisation.
Additional pressures on operations arise from discontinuation of cooperation with the biggest private
brand buyer in Sports and functional food (with whom was in 2015 realized 350 HRK millions annual
sales), continuation of crisis in Russia and Ukraine and further depreciation of rouble.
In 2016, we expect capital expenditure in the amount of around EUR 20 million.
The expected effective tax rate in 2016 should be at the level of the statutory tax rate for Croatia.
(in EUR millions) 2016 Guidance 2015 2016/2015
Sales 711 711 (0.1%)
EBITDA 63 75 (16.3%)
EBIT 41 53 (23.3%)
Interest expense 13 14 (5.4%)
32
BUSINESS RISK MANAGEMENT
Risk Description Effects / Management
Macro outlook in key countries
Key SEE markets have been in recession forseveral years with personal consumptionunder the influence of poor situation in thelabour markets and deleveraging ofhouseholds
Non-cyclical key categories
Planned reducing dependancy on the SEEregion with expansion in the WesternEuropean markets (acqusitions) and CIS andRussia (organic growth)
Retail consolidation and private
label
Global competition
Currency and commodity
risk
Continous retail consolidation is underway,most significantly Agrokor – Mercatorcombination which puts pressure on the localFMCG producers
Atlantic is one of the largest regional producerwith the largest portfolio of “essential” brands
Increase of bargaining power with newprincipals/own brands portfolio expansion(e.g. Unilever distribution contract)
Larger global competitors have lower costproduction, globally established brands andbigger marketing firepower and in the futurewill focus more on Eastern Europe
Atlantic’s brands are household namescomanding much larger brand awareness
Tactical acquisitions aimed at niche productswith premium positioning
Volatile currencies (RUB and RSD) presentlarge risks to Atlantic and its EUR basedinvestors
Substantial commodity risks with key rawmaterials (coffee, sugar)
Atlantic ultilises available risk managementtools (forward contracts for commodities), butfor some risks (RUB, RSD) hedging is tooexpensive
33
STRATEGY
HIGHLIGHTS
With continuous deleveraging and Net debt/EBITDA at the
3.0x level, the company is set for new acquisitions
Key aim: reduce dependancy in the SEE region and
strengthen foothold on the WESTERN EUROPEAN markets
(Germany, Austria, Switzerland, UK, Italy, Sweden, Spain,
France)
TARGETS
WESTERN EUROPE (primarily):
1. Branded business within the FMCG industry
2. Distributor with wide-spread distribution
network (aim: finding distribution channel for
own brands with international potential)
REGION:
1. Branded business with premium products that
have international potential
2. Regional companies that will further
strenghten market position in the regional
categories (e.g. coffee, snacks)
HIGHLIGHTS
Active brand management with emphasis on:
1. Strengthening the position of regional brands
and constant innovation
2. Increasing placement of brands with
international potential on the international
markets
Strengthening the regional distribution through extension
of the principals’ brands portfolio
Active development of the regional HoReCa segment
with a portfolio that covers '24/7 consumer needs' and
other sale channels (online, etno channel)
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
Prudent liquidity management and deleveraging
M&A
FOCUS
ORGANIC
FOCUS
SUMMARY
SHORT-TERM:
M&A financing
Investments
required for
international
expansion
LONG-TERM:
Multinational
company with
STRONG
PROFITABLE
GROWTH and
at least 1/3 of
sales coming
from
International
markets
34
BUSINESS UNITS
SBU COFFEE
SBU COFFEE
STRENGTH OF TRADITION
• Barcaffè - over 45 years of tradition
in Slovenia
• 8 out of 10 Slovenians drink Barcaffè
• Grand kafa - over 15 years brand
No.1 in Serbia
37
20.1 % — share in sales
EUR 143m— sales in 2015
No. 1 in Turkish coffee in Serbia, Slovenia, B&H and Macedonia
38SBU COFFEE
SBU SAVOURY SPREADS
ARGETA & MONTANA
delicious meal for all
occasions Manufacturer of high quality food
brands – Argeta savoury spreads,
and Montana sandwiches with
extended freshness
SBU SAVOURY SPREADS 40
10.0 % — share in sales
EUR 71m— sales in 2015
No. 1
SPREADS
BiH│ Slovenia │ Austria│Macedonia
No. 2
SPREADS
Switzerland│Serbia│Croatia
6th strongest FMCG brand in the region.
Sold in 33 countries.
No. 1
SPREADS
BiH│ Slovenia │ Austria│Macedonia
No. 2
SPREADS
Switzerland│Serbia│Croatia
41SBU SAVOURY SPREADS
BU GOURMET
GRANNY’S SECRET
Produced at the base of Mount
Kopaonik, protected ecological
area
Hand picked fruits and
vegetables specially treated at
very low temperatures in order to
preserve all the nutrients
BU GOURMET 43
Products for true
connoisseurs
100% natural, finest grown
and wild fruits and
vegetables without
preservatives, artificial
colors or aromas
Present in over 20
markets worldwide
Categories: Ajvar (Roasted
Red Pepper Spreads), Fruit
Jams and Coulis, Fruit and
Vegetable Juices
0.8 % — share in sales
EUR 6m— sales in 2015
44BU GOURMET
SBU SNACKS
SBU SNACKS
LEADING FMCG BRANDS IN
THE REGION
27,320 tonnes of snacks produced in 2015
Flips No.1 in Serbia, B&H and Slovenia No.1 chocolate bars and wafers in
Serbia Over 1 million fans on Facebook
46
Created in 1972, the first flips produced in SEE, Smoki has become the generic word for a group of flips products.
A delightful dessert offers a wide selection of flavours and shapes.
The famous soft chocolate foam dessert, first of its kind in the SEE region, is a product with more than 75 years of tradition.
Biscuits and wafers that marked the youth of many generations.
11.7 % — share in sales
EUR 83m— sales in 2015
No. 1
SERBIA
Flips│ Chocolate bars│ Wafers
CROATIA, SLOVENIA, BiH
Flips│
No. 2
SERBIA
Chocolate tablets│Biscuits│Sticks
SBU SNACKSSBU SNACKS 47
SBU SPORTS AND FUNCTIONAL
FOOD
MULTIPOWER
Leading brand in Europe
Production, R&D and sales of sports and
functional food and healthy food
Leading brand of sports nutrition in
Europe and No. 1 in dietetic products
category in Germany
Over 38 years of tradition
SBU SPORTS AND FUNCTIONAL FOOD 49
14.2 % — share in sales
EUR 101m— sales in 2015
No. 1
Sports food in Europe.
SBU SPORTS AND FUNCTIONAL FOOD 50
SBU BEVERAGES
SALES BY CATEGORIES
52SBU BEVERAGES 53
A cola drink that was born different 60 years ago. Unique blend of 11 herbs and aroma of dog rose.
During its 40 years became synonym for thehealthy multivitamin refreshment in the region.
A natural multifunctional mineral water with a high level of magnesium and clinically proven effect.
12.3 % — share in sales
EUR 88m — sales in 2015
No. 1
Vitamin instant drink in Croatia, Slovenia and Serbia
SBU BEVERAGES 54
SBU PHARMA AND PERSONAL
CARE
HEALTH AND BEAUTY CARE
Encompasses 3 complementary activities:
I. Farmacia pharmacy chain
II. Food supplements and OTC products (Fidifarm
and Dietpharm)
III. Cosmetics (Neva)
SBU PHARMA AND PERSONAL CARE
9.1 % — share in sales
EUR 67m— sales in 2015
Croatia’s largest private chain of pharmacies and specialised shops for medicines and food supplements.
Plidenta toothpaste has maintained its leading position on the Croatian market.
An original Croatian universal cream.
Renowned Croatian brand in the cosmetics.
The leading regional producer of food supplements and vitamin products.
Pharma
Personal care
55
No. 1
CROATIA
Lip care│ Food supplements│ Dental care
SERBIA and B&H
Food supplements│
No. 2
CROATIA
Body care│
SERBIA
Lip care│
SBU PHARMA AND PERSONAL CARE 56
BU BABY FOOD
BEBI - FROM THE FIRST
DAY OF LIFE
No. 1 in category of baby
cereals in Ukraine
No. 1 in baby biscuits category
in Lithuania
BU BABY FOOD 58
2.9 % — share in sales
EUR 20m— sales in 2015
BU BABY FOOD 59
Atlantic Grupa d.d.
Miramarska 23
10000 Zagreb, HR
T +385 1 2413 145
F +385 1 2413 901