Title: Atlantic Grupa Company of Added Value
1Atlantic GrupaCompany of Added Value
Opatija, September 2009
2CONTENT
- General overview of Atlantic Grupa
- Overview of the 1H09 and FY08 financial figures
- Divisional overview
- FY09 Guidance
- Cedevita GO!
3VERTICALLY INTEGRATED COMPANY IN CONSUMER
HEALTHCARE BUSINESS
- Key brands
- The leading European company in the sports
nutrition MULTIPOWER - Leader in the vitamin instant drinks in the SEE
region CEDEVITA - Producer of the No1 Croatian brands in the VMS
and the OTC DIETPHARM - The largest private pharmacy chain in
Croatia FARMACIA - The leading FMCG distributer in the SEE
region Distinguished International Brands
(Ferrero, Wrigley, Duracell, Johnson
Johnson)
Business Card of Atlantic Grupa
4VERTICALLY INTEGRATED COMPANY IN THE CONSUMER
HEALTHCARE BUSINESS
- Vertically integrated organization
- Production CHC division, SFF division VMS/OTC
production - Distribution
- Retail Pharmacy chain
- This business model enables
- Exploring synergies among divisions
- Running vertically integrated
- organization
FMCG DISTRIBUTION
CONSUMER HEALTHCARE
Distribution Division
Sports and Functional Food Division
Consumer Health Care Division
Pharma Division
VMS OTC Pharmacy chain 14 of sales
Own brands Principal brands 37 of sales
Vitamin drinks and teas Cosmetics and personal
care 25 of sales
Sports and functional food 24 of sales
SYNERGIES
5European company
DEVELOPMENT CYCLE
Acquisition of pharmacies Farmacia IPO Viicki
komerc (Macedonia) Multivita (Serbia) Fidifarm
(Croatia) Representative office Moscow Power Gym
(affiliated company in UK) Haleko Italy
(affiliated company in Italy) Haleko
2008 2007 2007 2007 2007 2006 2005 2005
- Development based on
- Carefully thought diversification strategy in
the Consumer HealthCare segment - Extensive MA track record
- Foray into the selected industry niches
Regional company
2004 2004 2003 2003 2001 2001 2001
Melem Atlantic Ljubljana Atlantic
Skopje Neva Cedevita Atlantic Beograd Representati
ve office Sarajevo
Croatian company
Cooperation Johnson Johnson Cooperation
Duracell Distribution centre Rijeka Distribution
centre Osijek Distribution centre
Split Cooperation Wrigley
1999 1996 1994 1994 1992 1991
6SALES GROWTH 1993-2009e
7GEOGRAPHICAL PRESENCES
- Companies and representative offices across
Europe - Presence on 30 markets
8OVERVIEW OF THE 1H09 FINANCIAL FIGURES
- Double-digit growth despite unfavourable
macroeconomic milieu - Strong growth rates ex. one-offs
- Sales 11.5 yoy
- EBITDA 8.3 yoy
- EBIT 12.1 yoy
- Net profit 14.2 yoy
- The one-off gain of HRK9.9m refers to purchase
of minority interest in Cedevita from the German
development bank DEG
9SALES PROFILE
- The dominant market Croatia
- Growth of 12.1 yoy despite GDP and private
consumption drop - Growth amidst new distribution deals, launch
of Cedevita GO!, opening of new specialised
stores/pharmacies - Serbia the strongest growth driver
- Growth of 39.2 in CER terms
- Growth drivers Cedevita GO!, growth of the
HoReCa channel - The key West European markets
- Growth in CER terms in spite of deteriorated
economic environment
- Own brands up 3.5 yoy
- Reflecting the launch of Cedevita GO!
- Principal brands up 26.1 yoy
- Private label down 3.1 yoy
- Farmacia up 12.4 yoy
-
10PROFITABILITY DYNAMICS
Optimisation of business operations
EBITDA
Cost savings
EBITDA 8.3 Ex. one-off
EBIT 12.1 gain Net profit 9.8
EBIT
NET PROFIT
11FINANCIAL INDICATORS in 1H09
- Key highlights
- Very stable balance sheet
- Liquidity maintenance
- Strong current ratio
- Maintenance of stable cash flow from operating
activities - Available ca. HRK200m in cash for new
acquisitions and capex financing
- Key highlights
- Strong interest coverage
- Favourable gearing ratio
- Exploitation of available IR hedging instruments
- (the long-term financial debt cost fixed below
5) - No refinancing requirement - favourable debt
structure with the majority maturing in 2011
Management pays special focus on these given
generally arguably unfavourable financing
environment
12OVERVIEW OF THE FY08 FINANCIAL FIGURES
- Strong organic growth
- Sales 6 yoy
- EBIT 19 yoy
- EBITDA 14 yoy
- Net profit 24 yoy
- Acquisition of pharmacies contributed to the
top-line growth with 13 - HRK221m - Geographical profile
- The dominant market Croatia up 28.1
- The largest organic growth driver Serbia up
21.7 yoy - Growth in CER terms on all key West European
markets
13DISTRIBUTION DIVISION
- The leading regional distributer of FMCGs with
top global and regional brands
37 of sales
- Sales growth drivers
- Continuously adding new distribution deals
- focus on diversification of distribution
portfolio - to control sales volatility risk
- Growth across all distribution channels
- retail
- HoReCa
- Extensive know-how
- New distribution deals as growth drivers in
FY09 - Biscuits and salted snacks under Karolina brand
- Ferrero program in Slovenia
- Nestles NESCAFE assortment in the HoReCa
channel
- Profitability growth drivers
- EBIT up 32.3 yoy in 1H09 and 12.0 yoy in FY08
- Economies of scale
- lower marginal costs in distribution
- Developed network of distribution centres in the
SEE - central warehouse in Jankomir
- Bargaining power
- Exploring brand synergies
14CONSUMER HEALTHCARE DIVISION
25 of sales
- Integrates RD, manufacturing, packaging,
marketing and sales of - Cedevita vitamin instant drinks ? No1 producer
in the SEE region - Personal care products Plidenta toothpaste,
Rosal lip balm
- Growth drivers
- Strength of the Cedevita brand
- Atlantics best selling brand
- New distribution channel HoReCa
- Markets with high consumption potential Serbia,
Slovenia
- Profitability growth drivers
- Best-margin division
- Cedevita in new distribution channel
- Cedevita GO!
15SPORTS AND FUNCTIONAL FOOD DIVISION
24 of sales
- Integrates RD, manufacturing, packaging,
marketing - Key brand Multipower for sports and functional
nutrition
- Growth drivers
- Strength of the Multipower brand
- Atlantics second best selling brand
- The leading market position in Germany, Norway,
Sweden, - Markets with the highest growth Russia, Sweden,
Spain - Successfully completed restructuring
- the highest EBIT growth of 81.0 yoy among
divisions in FY08 - EBIT up 21.2 yoy in 1H08
- Innovative product line
- Launch of endurance line Active Multipower
- Consumer base expansion (outside gyms and
fitness centres) - Cooperation with the cycling equipment
manufacturer Shimano
16PHARMA DIVISION
- RD, manufacturing, packaging, marketing and
sales of VMS and OTC - Key brand in the VMS and OTC segment -
Dietpharm - The largest private pharmacy chain in Croatia -
Atlantic Farmacia
14 of sales
- Growth drivers
- Acquisition of pharmacies/launch of specialised
stores - new distribution channel
- Focus on non-prescription drugs in pharmacies
- New product launches in the VMS and the OTC
segment - Launch of drug wholesale business
- Differentiated strategic focus on VMS and OTC
through exclusive distribution deals - Vertical integration within division
- Production (Dietpharm)
Distribution (Wholesaler Fidifarm)
Retail (Farmacia)
17FY09 GUIDANCE DURING UNFAVOURABLE MACROECONOMIC
SETUP
Guidance (i) reflects organic development (ii)
does not include one-off positive effects from
the 1Q09 and expected positive net effect of
approximately HRK45m from the sale of Neva
location and the subsequent transfer to Rakitje
location
18FY09 GUIDANCE DURING UNFAVOURABLE MACROECONOMIC
SETUP
- Strategic focus of Atlantic Grupa during
negative economic developments on - Creation of new opportunities for the organic
growth and growth via acquisition - Cost efficiency
- Financial stability enabling flexibility for
initiatives development for the companys
long-term growth - Liquidity maintenance
- Business process improvements
- Screening potential acquisition in times of
lowered acquisition valuation premiums - In segments that strategically fit the companys
further development - (i) Pharmacies in Croatia
- (ii) Companies, brands and market shares in the
food supplements segment in the EU market (CEE,
Germany, Scandinavia) - (iii) Companies, brands and market shares in
the sports nutrition in the EU market - (iv) Distribution companies with higher margin
distribution portfolio
19CEDEVITA GO!
- New distribution channel for Cedevita
consumption on the go - Cedevita covers all consumption channels
- Exploring synergies potential among divisions
- RD, production and packaging integrated in the
Consumer Healthcare division - Own distribution infrastructure
- Synergies opportunities in the Sports and
Functional Food divisions portfolio - Development project worth of HRK75m
- Payback period of 5-6 years
- The value-creating IRR
- Region-wise distribution
- (Croatia, Serbia, Slovenia, Macedonia, BiH)
- Favourable impact on the Groups profit margins
20ATLANTIC GRUPA ON THE CAPITAL MARKET
- Performance (with PPS of HRK 730 as of
17/09/2009) - ATGR-R-A 52.1 ytd
- CROBEX 26.2 ytd
- Outperformance resulting from
- Strong ownership structure
- Strong business fundamentals
- All domestic mandatory pension funds in top 10
shareholders accounting for 46.74 of free float
21CONTACTS
- Lada Tedeschi Fiorio, Vice President for
Business Development - lada.tedeschi.fiorio_at_atlantic.hr
- Zoran Stankovic, CFO
- zoran.stankovic_at_atlantic.hr
- Maja Barac, Head of Investor Relations
- maja.barac_at_atlantic.hr
- 385 1 24 13 908
22Q A Thank you for your attention!