Atlantic Grupa - Maja Barac

ATLANTIC GRUPA
Company of Added Value
Maja Barać Adrinek, Head of Investor Relations and Business Development
East Capital Summit, Belgrade 04 June 2014
CONTENT
BUSINESS OVERVIEW
FINANCIAL OVERVIEW
STRATEGIC GUIDANCE
2
ATLANTIC GRUPA TODAY
Business card
FY13 sales
 Among the leading food and beverage companies in the SEE
 EUR 674 millions
region
FY13 EBITDA
Making business
 EUR 79 millions
 Companies in 11 countries and products in over 40 markets
No of employees
 Key markets: SEE, Western Europe, Russia
 4,228
 17 production facilities
Listed on the Zagreb Stock Exchange
Foundation
 1991
 Since 2007
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 centres across Croatia
 Various distribution cooperations
VERTICAL
INTEGRATION
DISTRIBUTION &
PRODUCTION
1990’s
DISTRIBUTION
2005-2013
2000-2004
 Regional expansion
 2001: Acquisition of CEDEVITA
 2010: Acquisition of DROGA
KOLINSKA
 Several small-size acquisitions
 2007: IPO
 2005: Acquisition of MULTIPOWER
Sales in EURm
700
CAGR 1993-2012:
+38.0%
600
602
630
657
674
500
400
267
300
186
200
293
302
223
145
100
1
6
12
17
27
33
36
42
61
81
90
102
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
Distribution
Coffee
Beverages
Savoury
Spreads
Personal
Care
Snacks
Pharma
Sports and
Functional
Food
Baby Food
PORTFOLIO OVERVIEW
5
ATLANTIC GRUPA’S BUSINESS MODEL TODAY
SBU
SBU
SBU
SBU
SBU
SBU
BU
COFFEE
BEVERAGES
SPORTS AND
FUNCTIONAL
FOOD
PHARMA
AND
PERSONAL
CARE
SAVOURY
SNACKS
BABY FOOD
SPREADS
SDU
SDU
SDU
SDU
SDU
DU
DU
Croatia
Serbia
HoReCa
Hotels,
Restaurants,
Cafes
International
CIS
Slovenia
Macedonia
Markets*
*International markets: markets outside the region (Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Macedonia and Montenegro), Russia and CIS.
6
SALES AND PRODUCTION PROFILE
Sales by segments
Sales by countries
Other markets
6.4%
Russia and CIS
5.9%
Beverages 12.9%
Croatia
24.8%
Key European
markets**
11.7%
Serbia
24.1%
Other regional
markets*
6.3%
Slovenia
13.6%
Bosnia and
Herzegovina
7.2%
Overview of production facilities
Baby food
4.2%
Principal brands
15.0%
Sports and
Functional
Food
15.5%
Savoury
spreads
9.1%
Sweet and
salted snacks
12.2%
Coffee
21.5%
Sales by brands
Slovenia
Croatia
Bosnia and
Herzegovina
Serbia
Own brands
72.5%
Pharma &
Personal
care 9.7%
Principal
brands
15.0%
Private label
6.4%
Farmacia
6.1%
+ production facility
in Germany
Macedonia
Sales profile in 2013; *Other regional markets: Macedonia, Montenegro, Kosovo; **Key European markets: Germany, UK, Italy, Switzerland, Austria, Sweden, Spain
7
STABLE MANAGEMENT TEAM AND OWNERSHIP STRUCTURE
Management
Ownership structure on 31/03/2014
Emil Tedeschi
Pension funds
18.2%
President of the
Management Board
EBRD
8.5%
Mladen Veber
Zoran Stanković
Neven Vranković
Senior Group Vice President
Business Operations
Group Vice President
Finance
Group Vice President
Corporate Affairs
Strategic Management Council
Emil
Tedeschi
50.2%
DEG
8.5%
Deals with vital strategic and operational corporate issues.
Lada Tedeschi Fiorio
5.8%
Consists of: Board Members, Vice Presidents and General Managers of each SBU
and SDU, Senior Executive Director for Regional KAM and Sales Croatia, the
Secretary General, Executive Directors of Corporate Controlling, IT, Central
Purchasing and Human Resources, and the Head of the Investment Committee.
Others
7.6%
Management
1.2%
Supervisory board
Supervisory
Board
Zdenko
Adrović
Lada
Tedeschi
Fiorio
Siniša
Petrović
Željko
Perić
Franz
Josef
Flosbach
Aleksandar
Pekeč
Vedrana
Jelušić
Kašić
President
of the
Supervisory
Board
Vice President
of the
Supervisory
Board
Member
of the
Supervisory
Board
Member
of the
Supervisory
Board
Member
of the
Supervisory
Board
Member
of the
Supervisory
Board
Member
of the
Supervisory
Board
Audit Committee
Nomination and
Remuneration
Committee
Corporate
Governance
Committee
8
CONTENT
BUSINESS OVERVIEW
FINANCIAL OVERVIEW
STRATEGIC GUIDANCE
9
FINANCIAL OVERVIEW: 2010 – 2013
(EURm)
FY10
FY10 pro-forma
FY11
FY12
FY13
CAGR FY10
pro-forma - FY13
FY13/FY12
Revenues
306
609
637
665
679
3.7%
2.2%
Sales
302
602
630
657
674
3.8%
2.5%
EBITDA
27
70
69
74
79
3.9%
5.8%
EBIT
20
37
47
53
57
15.5%
6.4%
Net profit
11
17
9
15
27
16.6%
76.9%
EBITDA margin
8.9%
11.7%
10.9%
11.3%
11.7%
+3bp
+37bp
EBIT margin
6.5%
6.1%
7.4%
8.1%
8.4%
+229bp
+31bp
Net profit margin
3.8%
2.8%
1.5%
2.3%
3.9%
+116bp
+166bp
Net debt
333
333
333
314
275
Total assets
701
701
714
687
678
Equity
194
194
202
195
223
63.2%
63.2%
62.3%
61.7%
55.2%
Net debt/EBITDA
4.7
4.7
4.8
4.2
3.5
Cash Flow from
Operating activities
14
n/a
22
39
56
Gearing ratio*
Balance sheet as of YE10 reflected
consolidation of Droga Kolinska, but P&L
accounts were not consolidated in FY10
(consolidation started as of 01/01/2011).
In 2014, the classification of contracted
marketing expenses has changed from
“Marketing and selling expenses” to
decrease in “Sales revenues”, and
classification of support for contracted
marketing expenses has changed from
decrease in “Marketing and selling
expenses” to decrease in “Cost of
merchandise sold”. This reclassification
decreases above presented sales by
HRK 44.9 million in 2013 and HRK 40.9
million in 2012.
P&L figures normalized; *Gearing ratio calculated as Net debt/(Total equity+Net debt).
10
0
0
0
0
GUIDANCE TRACK RECORD
800
Sales (EURm)
4.930 4.964
700
600
500
400
300
0
Guidance
98%
99%
102%
93%
4.000
103%
98%
102%
101%
60
99%
50 4.000
100%
40
3.000
98%
101%
30 3.000
20
2.000
10 2.000
102%
104%
0
1.000
2008
60
4.930 4.964
Guidance
70 5.000
200
100
Reported
EBITDA (EURm)99%
90 6.000
80
5.000
559 550
2009
2010
99%0(EURm)
EBIT
4.930 4.964
2011
Reported
Sales
399
2012
Guidance
EBITDA
50
EBIT
104%
102%
104%
0
3852013
101%
97%
1.000
2008
559 550
2009
2010
2011
399
2012 385
2013
0
Sales
EBITDA
EBIT
 Atlantic Grupa listed on the Zagreb Stock Exchange on
19th of November 2007.
40
30
104%
99%
 Since 2008 Atlantic Grupa publishes guidance for the
95%
following financial year and delivers it.
20
10
0
0
Reported
99%
6.000
102%
104%
0
2008
559 550
2009
2010
399 2011
385
2012
2013
11
PERFORMANCE BY STRATEGIC BUSINESS AND STRATEGIC DISTRIBUTION UNITS IN 2013
EURm
2013
2012
2013/2012
SBU Beverages
87
90
(3.0%)
SBU Coffee
145
145
(0.3%)
SBU (Sweet and Salted) Snacks
82
80
2.8%
SBU Savoury Spreads
61
62
(1.0%)
SBU Sports and Functional Food
104
91
14.9%
SBU Pharma and Personal Care
67
64
5.1%
SDU Croatia
108
117
(8.0%)
SDU Slovenia, Serbia, Macedonia
258
257
0.4%
Other segments*
56
50
13.5%
Reconciliation**
(296)
(298)
(0.8%)
674
657
2.5%
Sales
EURm
2013
2012
2013/2012
SBU Beverages
16
18
(10.8%)
SBU Coffee
32
21
52.3%
SBU (Sweet and Salted) Snacks
15
15
(3.0%)
SBU Savoury Spreads
16
16
0.4%
SBU Sports and Functional Food
3
2
57.5%
SBU Pharma and Personal Care
6
8
(16.3%)
SDU Croatia
2
2
20.8%
SDU Slovenia, Serbia, Macedonia
11
11
(2.3%)
Other segments*
(23)
(19)
22.3%
Group EBITDA
79
74
5.8%
* Sales and profitability shown according to AG’s business model valid in 2012 and 2013. 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. SDU
International Markets’ sales and profitability is presented within SBU to which they relate. The Russian market includes 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 which the products were distributed.
*** Sales correspond to figures in 2013 Audit Report. In 2014, the classification of contracted marketing expenses has changed from “Marketing and selling expenses”
to decrease in “Sales revenues”, and classification of support for contracted marketing expenses has changed from decrease in “Marketing and selling expenses” to
decrease in “Cost of merchandise sold”. This reclassification decreases above presented sales by HRK 44.9 million in 2013 and HRK 40.9 million in 2012.
12
FINANCIAL OVERVIEW IN Q1 2014
Key highlights (EURm)
Revenues
Q1 2014
151
Q1 2013
146
Q1 2014/
Q1 2013
3.7%
Sales
150
144
4.1%
EBITDA
16
15
6.9%
EBIT
11
10
13.4%
Net profit
4
4
6.6%
EBITDA margin
10.6%
10.4%
+28 bp
EBIT margin
7.6%
7.0%
+63 bp
Net profit margin
2.9%
2.8%
+7 bp
EURm
Q1 2014
Q1 2013*
Q1 2014/
Q1 2013
SBU Beverages
17
17
1.8%
SBU Coffee
28
30
(5.8%)
SBU (Sweet and Salted) Snacks
18
19
(7.4%)
SBU Savoury Spreads
12
12
(4.3%)
SBU Sports and Functional Food
28
26
5.9%
SBU Pharma and Personal Care
16
15
7.1%
SDU Croatia
22
19
18.2%
SDU Serbia
31
33
(6.9%)
SDU International markets
9
10
(5.2%)
DU Slovenia
20
16
24.3%
Other segments**
24
24
(0.8%)
Reconciliation***
(75)
(77)
(3.0%)
Sales
150
144
4.1%
* Other segments include SDU HoReCa, SDU CIS, BU Baby Food, DU Macedonia 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 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 which the products were distributed.
*** In 2014 the classification of contracted marketing expenses has changed from “Marketing and selling expenses” to decrease in “Sales revenues”, and classification of support for
contracted marketing expenses has changed from decrease in “Marketing and selling expenses” to decrease in “Cost of merchandise sold”. In accordance with these changes, sales
revenue (referring to sales from distribution company Atlantic Trade Zagreb) for segment information for the three month period ended 31 March 2013 has also been restated, but no
restatement has been made for sales revenue referring to SBU Savoury Spreads on markets outside the region and BU Baby Food due to immateriality.
13
PERFORMANCE ON CROATIAN CAPITAL MARKET
Performance on capital market
ATGR-R-A
48%
40%
Crobex
Points
6,000
CROBEX
150
ATGR-R-A
Crobex10
34%
EUR
ATGR-R-A vs CROBEX
5,000
18%
3% 2%
7% 0%
0%
5%
10%
16%
4,000
100
-1%
3,000
-15%
-18%
-40%
-38%
2,000
50
-47%
-67%
-80%
2013
2012
2011
2010
2009
1,000
2008
0
27/05/2014
31/12/2013
Last price (in EUR)
111
96
Market capitalization* (EUR millions)
371
319
Valuation
2013
2012
Last price in reporting period
96
71
Market capitalization* (EUR millions)
319
238
Average daily turnover (EUR thousands)
32
27
EV (EUR millions)
601
558
EV/EBITDA**
7.6
7.5
EV/EBIT**
10.6
10.5
EV/sales**
0.9
0.8
* Closing price multiplied by the total number of shares
EPS** (in EUR)
58
30
** Normalized in 2012
P/E**
1.6
2.3
0
 The Atlantic Grupa’s share significantly outperformed the growth
of Crobex and Crobex10 and ended 2013 at EUR 96, which was
a 34.0% growth within a year.
 With the average market capitalisation of EUR 290 millions,
Atlantic Grupa took the fifth place among the components of the
CROBEX10 stock index in 2013.
14
CONTENT
BUSINESS OVERVIEW
FINANCIAL OVERVIEW
STRATEGIC GUIDANCE
15
STRATEGIC GUIDANCE FOR 2014
 Focus on organic business growth through active brand management with a special emphasis on strengthening
the position of regional brands (Cockta, Cedevita, Smoki, Grand Kafa, Barcaffe, Bananica, Štark) and brands with
international potential (Multipower, Argeta, Donat Mg, Bebi, Cedevita GO!);
 Strengthening the regional character of distribution through the extension of the principals’ brands portfolio;
STRATEGIC
MANAGEMENT
GUIDANCE
 Active development of the regional HoReCa segment with a portfolio that covers '24/7 consumer needs' and other
sale channels (Online, Etno channel);
 Rationalisation of operations, 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; and
 Prudent liquidity management and further deleveraging.
EURm
Sales
2014 Guidance
2013
2014/2013
725
674
7.7%
EBITDA
83
79
4.9%
EBIT
61
57
8.3%
Interest expense
19
21
(12.1%)
 Sales: 3% sales growth at the organic level and sales from the distribution of the Unilever product range of HRK 240 million.
 Capital expenditure at HRK 216 million, 46% of which relates to the investment in the new factory of energy bars in Nova Gradiška.
 The expected effective tax rate in 2014 should be at the 2013 level.
16
ATLANTIC GRUPA
Company of Added Value
Maja Barać Adrinek, Head of Investor Relations and Business Development
East Capital Summit, Belgrade 04 June 2014