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Atlantic Grupa Company of Added Value

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The leading European company in the sports nutrition MULTIPOWER ... Personal care products: Plidenta toothpaste, Rosal lip balm. Growth drivers ... – PowerPoint PPT presentation

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Title: Atlantic Grupa Company of Added Value


1
Atlantic GrupaCompany of Added Value
Opatija, September 2009
2
CONTENT
  • General overview of Atlantic Grupa
  • Overview of the 1H09 and FY08 financial figures
  • Divisional overview
  • FY09 Guidance
  • Cedevita GO!

3
VERTICALLY 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
4
VERTICALLY 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
5
European 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
6
SALES GROWTH 1993-2009e
7
GEOGRAPHICAL PRESENCES
  • Companies and representative offices across
    Europe
  • Presence on 30 markets

8
OVERVIEW 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

9
SALES 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

10
PROFITABILITY 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
11
FINANCIAL 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
12
OVERVIEW 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

13
DISTRIBUTION 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

14
CONSUMER 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!

15
SPORTS 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

16
PHARMA 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)
17
FY09 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
18
FY09 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

19
CEDEVITA 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

20
ATLANTIC 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

21
CONTACTS
  • 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

22
Q A Thank you for your attention!
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