slovenia and croatia investor day, ljubljana, 10 december 2019 · croatia 29.9% serbia 23.1%...
TRANSCRIPT
Slovenia and Croatia
Investor Day, Ljubljana, 10 December 2019
Atlantic Grupa
Today
Atlantic Grupa is one of the
leading food and beverages
companies in the SEE
region with the renowned
regional brands that are,
alongside the product range
of external partners,
supported by own
distribution system in the
region
2
16— production facilities
in 5 countries18— distribution
centres 5500— employees on
12 markets40— product presence
on over 40 markets
▪ Leading distributor of
multinational brands
▪ Founded in 1991
▪ FY18 sales: EUR 701m
▪ FY18 EBITDA*: EUR 75m
▪ MCap (06.12.2019) : EUR 578m
*Normalized
** FX rate EUR/HRK of 7.5 is used for all data and periods to
exclude effects of exchange rate changes 3
Slovenia
Austria
Croatia
BiHMacedonia
Serbia
Russia
Management Board Ownership structure
Emil Tedeschi
Founder & President of the Management Board
Zoran StankovićVice President Finance
Neven VrankovićVice President Corporate Affairs
ATLANTIC GRUPA AS THE BEST MANAGED COMPANY IN 2015
1st in CROATIA
2nd in the CEE region
1st in the FOOD & BEVERAGE sector in the CEE
4
Srećko NakićVice President Distribution
Lada Tedeschi FiorioVice President Strategy, business development and growth
Enzo SmrekarVice President Savoury spreads, Donatand internationalization
50,2%
32,9%
10,2%
5,8% 0,9%
Emil Tedeschi
Pension funds
Others
Lada Tedeschi Fiorio
Management
1 6 12 17 27 33 36 4161
81 90 102145
186223
267293 302
602630
657 674 682721
681 698 701
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 2016 2017 2018
Sales in EURm
CAGR 1993-2018:
+28.4%
2005-2018
❖2010: Acquisition of DROGA KOLINSKA
❖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
RT
ICA
L
INT
EG
RA
TIO
N
National company Regional company
GROWTH BASED ON INNOVATIONS AND M&AEuropean company
CEDEVITA
MULTIPOWER
DROGA KOLINSKA
2010*: Pro-forma consolidated with Droga Kolinska5
11,7% 10,9% 11,3% 11,8% 11,7%
10,5%
9,3%
9,9%10,8%
6,1%
7,4%8,1% 8,5% 8,6%
7,5%
6,0%6,5%
7,4%
2,8%
1,5%2,3%
4,0% 4,2% 4,5%
3,2%4,0%
5,0%
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 2016 2017 2018
Margin overview
EBITDA margin (normalized) EBIT margin (normalized) Net profit margin (normalized)
6
HISTORICAL DEVELOPMENTS OF KEY INDICATORS
Normalised: excluding one off items.
602
630
657667
682
721
681698
701
540
560
580
600
620
640
660
680
700
720
740
Pro forma cons 20102011 2012 2013 2014 2015 2016 2017 2018
Sales, EUR millions
4,7 4,8
4,2
3,53,2
3,03,2
2,3
1,5
0,0
1,0
2,0
3,0
4,0
5,0
6,0
Pro forma
cons
2010
2011 2012 2013 2014 2015 2016 2017 2018
Net debt/EBITDA
11,3%
4,7%
7,6%
12,7% 12,4%13,1%
8,2%
12,9%
10,5%
11,8%
9,4%10,4%
11,7%12,7% 12,5%
9,8%
12,9%12,0%
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 2016 2017 2018
ROaE, ROCE
ROaE ROCE
❖ Stable shareholder structure
❖ In October 2019, historically
highest level of market
capitalization
PERFORMANCE ON CROATIAN CAPITAL MARKET
7
Valuation 30 June 2019 2018 2017
Last price in reporting period 161,3 154,7 114,9
Market capitalization* (in EUR millions) 537,9 515,7 383,2
Average daily turnover (in EUR thousands) 44,5 58,2 47,5
EV (in EUR millions) 631,8 631,3 541,8
EV/EBITDA** 7,4 8,4 7,9
EV/EBIT** 11,4 12,2 11,9
EV/sales 0,9 0,9 0,8
EPS (in HRK)** 85,5 78,4 63,2
P/E** 14,2 14,8 13,6
*Closing price multiplied by the total number of shares
**Normalised data
-20,0%
-10,0%
0,0%
10,0%
20,0%
30,0%
40,0%
2015 2016 2017 2018 29.11.2019
%
ATGR
CROBEX
CROBEX 10
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TOP-NOTCH BRAND PORTFOLIO
COMPANIES BEHIND TOP RANKED BRANDS IN ADRIA REGION:
SLO
CRO
SRB
B&H
MAC
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
ADRIA
REGION
Source: Valicon brand strength survey 2016
9
TOP-NOTCH BRAND PORTFOLIO
Source: Valicon brand strength survey 2016
Top 10 - Region
1Coca Cola
2Milka
3
4Vegeta
5
6
7Orbit
8
9Nivea
10Jana
Top 5 - Slovenia Top 5 - Croatia Top 5 - Serbia Top 5 - B&H Top 5 - Macedonia
Jana Plazma
Coca Cola Coca Cola Coca Cola Coca Cola Bitolski
Milka Coca Cola
Fructal Vegeta Moja kravica Colgate
Jamnica Milka Chipsy Stobi Flips
10
ATLANTIC GRUPA DISTRIBUTION
STRENGTH OF DISTRIBUTION
▪ The leading distributors of high-quality top FMCG brands
(both own and principal) in SEE
▪ Developed network with 18 distribution centers
▪ Direct access on over 60,000 sales points
▪ Over 1,000 delivery vehicles
▪ Developing distribution in Austria
11
12
Year of records
Savoury spread Argeta became number one in Europe
Settlement of Agrokor Grupa creditors voted in favour
New distribution contracts (Beiersdorf, Mars, Hipp and Red Bull)
Sale of Neva
Atlantic Grupa the first issuer on the ZSE prime market
Last portion of Sports and Functional foods divested
Record high dividend and highest market capitalization
New logistics and distribution centre in Croatia
New Management Board for new growth
Sale of Dietpharm
KEY BUSINESS DEVELOPMENTS
13Normalised data.
RESULTS IN LINE WITH EXPECTATIONS
All data in EUR millions.
2018A/2018E: 99.2
2018A/2017A: 100.3
2018A/2018E: 102.8
2018A/2017A: 109.3
2018A/2018E: 103.1
2018A/2017A: 113.1
0
200
400
600
800
1.000
Sales
701 707 698
2018A
2018E
2017A
0
20
40
60
80
100
EBITDA EBIT
75
52
73
50
69
46
2018A
2018E
2017A
❖ SBU Coffee: growth in all key markets and key categories.
❖ SBU (Sweet and Salted) Snacks: growth in Serbia, B&H, Montenegro and
Slovenia.
❖ SBU Beverages: growth of the brands Cedevita, Donat Mg, Cockta and
bottled waters.
❖ SBU PPC: decrease due to baby food. Excluding baby food, sales growth
+2.2%.
❖ SBU Savoury Spreads: growth of Argeta in all regional markets, Western
European markets and the USA.
❖ SBU SFF: disinvestment of private label production
❖ SDU and DU: growth in all key markets, except Russia, Germany and
Switzerland
Comparative period has been adjusted to reflect current period reporting.*Other segments include DU Austria, DU Macedonia, BU Gourmet and business activities not allocated to business and distribution units (headquarters and support functions in Serbia, Slovenia, Bosnia and Herzegovinaand 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, DUs and GDAM through which the products were distributed.
14
SALES BY SBU&SDU IN 2018(EUR 000) 2018 2017 2018/2017
SBU Coffee 149,8 144,8 3,5%
SBU (Sweet and Salted) Snacks91,7 88,8 3,3%
SBU Beverages94,8 88,2 7,5%
SBU Pharma and Personal Care86,4 91,6 (5,7%)
SBU Savoury Spreads85,2 75,8 12,4%
SBU Sports and Functional Food17,8 53,4 (66,6%)
From which private label production0,0 25,9 (99,8%)
SDU Serbia167,1 158,7 5,3%
SDU Croatia168,7 150,1 12,4%
DU Slovenia121,1 116,3 4,1%
Global distribution network
management49,4 53,2 (7,0%)
Other segments*44,4 41,5 7,1%
Reconciliation**(375,7) (363,9) n/a
Sales700,7 698,4 0,3%
Comparative period has been adjusted to reflect current period reporting.*Other segments include DU Austria, DU Macedonia and business activities not allocated to business and distribution units (headquarters and support functions in Serbia, Slovenia, Bosnia and Herzegovina 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, DUs and GDAM through which the products were distributed.
15
SALES BY SBU&SDU IN H1 2019
(EUR 000)H1 2019 H1 2018
H1 2019/
H1 2018
SBU Coffee 71,0 70,8 0,3%
SBU Beverages 50,3 48,6 3,5%
SBU Savoury Spreads 46,5 42,4 9,7%
SBU (Sweet and Salted) Snacks 42,5 43,7 (2,7%)
SBU Pharma and Personal Care 41,7 41,7 (0,2%)
SBU Sports and Functional Food 3,7 8,7 (57,3%)
SDU Croatia 84,3 75,4 11,8%
SDU Serbia 78,5 78,3 0,2%
SDU Slovenia 59,3 56,6 4,8%
Global distribution network
management 24,5 25,7 (4,6%)
Other segments* 22,1 18,8 17,4%
Reconciliation** -181,2 -179,0 n/a
Sales 343,2 331,7 3,5%
❖ SBU Coffee: growth of roast and ground coffee, espresso and instant
Turkish coffee Black’n’Easy.
❖ SBU Beverages: growth of the brands Cedevita, Cockta and bottled
waters.
❖ SBU Savoury Spreads: growth of Argeta in all regional markets, Germany
and Austria.
❖ SBU (Sweet and Salted) Snacks: decrease due chips category and
absence of sales in Kosovo.
❖ SBU PPC: decrease due to baby food. Excluding baby food, sales growth
+5.3%.
❖ SBU SFF: totally divested in April 2019.
❖ SDU and DU: growth in all key markets.
16
SALES BY MARKETS AND SEGMENTS
* Macedonia, Montenegro, Kosovo
** Germany, Switzerland, Austria, Sweden
2018 2017
33%
24%
17%
8%
7%
5%
3%2% Croatia 33.0%
Serbia 24.3%
Slovenia 17.3%
Bosnia and Herzegovina 8.0%
Other regional markets* 6.7%
Key European markets** 5.2%
Russia and CIS 3.4%
Other markets 2.1%
30%
23%17%
8%
6%
8%
4%4%
Croatia 29.9%
Serbia 23.1%
Slovenia 16.7%
Bosnia and Herzegovina 7.8%
Other regional markets* 6.4%
Key European markets** 8.1%
Russia and CIS 4.4%
Other markets 3.6%
25%
21%
13%
13%
12%
12%3%
1%
Principal brands 25.2%
Coffee 21.4%
Beverages 13.5%
Sweet and salted snacks 13.1%
Savoury spreads 12.1%
Pharma & Personal care 11.5%
Sports and Functional Food 2.5%
Gourmet 0.7%
22%
21%
12%
13%
11%
12%
8%
1%Principal brands 22.2%
Coffee 20.8%
Beverages 12.6%
Sweet and salted snacks 12.7%
Savoury spreads 10.9%
Pharma & Personal care 12.5%
Sports and Functional Food 7.7%
Gourmet 0.6%
• Coffee, Beverages, Sweet and Salted, Savoury spreads: increase in sales and higher gross profit margin, despite higher marketing investments
• Pharma and Personal Care: increase inprofitability of Farmacia, but decrease of baby food brand Bebi and Multivita in Russia
• Sports and Functional Food: in restructuring process
• Distribution: increase in sales with optimum cost management
• Other segments: including one-off items that are main reason for negative movement.
17
OPERATING RESULTS OF SBU&SDU IN 2018(EUR million) 2018 2017 2018/ 2017
SBU Coffee 34,6 28,0 23,6%
SBU (Sweet and Salted) Snacks 17,5 16,0 9,4%
SBU Beverages 22,7 21,6 5,5%
SBU Pharma and Personal Care 6,0 9,1 (34,1%)
SBU Savoury Spreads 19,6 17,5 12,1%
SBU Sports and Functional Food (8,6) (7,8) (9,2%)
SDU Serbia 4,1 3,7 12,1%
SDU Croatia 4,1 3,7 11,3%
DU Slovenia 7,0 6,5 6,9%
Global Distribution Network Management 2,0 1,6 22,6%
Other segments* (36,3) (22,2) (63,8%)
Group EBITDA 72,8 77,6 (6,2%)
*Other segments include BU Gourmet, DU Macedonia, 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 operating segments.
• Coffee: lower prices of raw coffee and favorable FX
• Beverages, Savoury spreads: increase in sales and higher gross profit margin, despite higher marketing investments
• Snacks: lower sales and higher marketing investments
• Pharma and Personal Care: higher sales of Farmacia and Dietpharm
• Distribution: increase in sales with optimum cost management
• Other segments: higher profitability of DU Austria and one-off items are main reason for positive movement.
18
OPERATING RESULTS OF SBU&SDU IN H1 2019
*Other segments include DU Macedonia, 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 operating segments.
(HRK million) H1 2019H1 2019 w/o
IFRS 16H1 2018
H1 2019 w/o
IFRS 16/H1
2018
SBU Coffee 16,9 16,8 15,2 10,0%
SBU Beverages 13,3 13,2 12,2 7,9%
SBU (Sweet and Salted) Snacks 8,2 8,1 9,4 (13,7%)
SBU Pharma and Personal Care 3,5 2,3 2,1 10,5%
SBU Savoury Spreads 10,9 10,8 9,7 11,4%
SBU Sports and Functional Food (1,0) (1,0) (3,2) 67,4%
SDU Serbia 2,3 1,2 1,5 (23,7%)
SDU Croatia 4,5 2,9 2,4 21,0%
DU Slovenia 3,6 3,1 2,7 14,1%
Global Distribution Network
Management0,9 0,9 1,4 (33,9%)
Other segments* (9,9) (10,9) (13,9) 21,7%
Group EBITDA 53,1 47,3 39,5 19,6%
❖ Focus on further deleveraging
❖ Net debt vs normalised EBITDA ratio fell from 1.5 at the end of 2018 to 1.2 at the end of first half 2019.
❖ Interest coverage ratio increased.
❖ The stability of operations is best reflected in the increase in cash flow from operating activities.
19
FINANCIAL INDICATORS
45%
14%
9%
4%
22%
6%
Capital and reserves 45.0%
Long term borrowings 13.8%
Short term borrowings 9.4%
Bond 3.6%
Trade and other payables 22.1%
Other liabilities 6.1%
(in HRK millions) 30.6.2019 31.12.2018
Net debt 699,4 862,9
Total assets 5.148,6 4.935,3
Total Equity 2.497,2 2.398,4
Current ratio 1,36 1,44
Gearing ratio 21,9% 26,5%
Net debt/EBITDA TTM 1,2 1,5
(in HRK millions) H1 2019 H1 2018
Interest coverage ratio 27,3 10,8
Capital expenditure 110,8 99,7
Cash flow from operating activities 212,7 124,6LTM: Last 12 months
* Balance sheet items and financial indicators were for practicality and comparability reasons calculated without the application of IFRS 16
Leases. The impact of IFRS 16 Leases on financial indicators will be presented at the end of 2019.
20
GUIDANCE TRACK RECORD
❖ Atlantic Grupa listed on the Zagreb Stock
Exchange on November 19th 2007
❖Since 2008 Atlantic Grupa publishes guidance
for the following financial year and delivers it
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
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Sales (EURm)
93% 99%103%
99%98% 98%
102%
102%
99% 99%100%
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
EBITDA (EURm)
100%101%98%
102%101%
96%
100%98%
100%99%
103%
0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
EBIT (EURm)
104%95%99%
104% 101%96%
100%
97%99%
99%103%
21
STRATEGIC GUIDANCE FOR 2019
*Normalised
**Guidance for 2019 is comparable to 2018 data and it does not apply new IFRS 16.
EURm 2019 Guidance 2018* 2019/2018
Sales 707 701 0,8%
EBITDA 84 75 11,3%
EBIT 59 52 15,3%
Interest expense
(loans and bond)4 5 (21,1%)
STRATEGIC MANAGEMENT GUIDANCE
▪ Focus on: (i) strengthening the position of prominent regional brands, (ii) internationalisation of certain brands, (iii)
development of distribution operations by strengthening the existing and acquiring new principals, and (iv) further
disinvestment of non-core business operations that do not have a significant growth potential.
▪ Expecting lower average prices of raw coffee on the global commodity markets, which will be partly negatively affected by
the EUR/USD exchange rate.
▪ Expecting capital investments of approximately EUR 31m.
▪ Effect of non-core disinvestments as well as potential acquisitions are not included in the stated expectations.
22
BUSINESS UNITS
23
SBU COFFEE 21.4 % — share in sales
EUR 150m— sales in 2018
24
SBU BEVERAGES 13.5 % — share in sales
EUR 95m — sales in 2018
25
SBU SNACKS 13.1 % — share in sales
EUR 92m— sales in 2018
26
SBU SAVOURY SPREADS12.1 % — share in sales
EUR 85m— sales in 2018
27
SBU PHARMA AND PERSONAL CARE11.5 % — share in sales
EUR 86m— sales in 2018
Atlantic Grupa d.d.
Miramarska 23
10000 Zagreb, HR
T +385 1 2413 900
http://www.atlantic.hr/en/
28