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Atlantic Grupa Company of Added Value Opatija, September 2009 CONTENT General overview of Atlantic Grupa Overview of the 1H 0 9 and FY08 financial figures Divisional overview FY09 Guidance Cedevita GO! VERTICALLY INTEGRATED COMPANY IN CONSUMER HEALTHCARE BUSINESS Key brands:

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Atlantic Grupa Company of Added Value

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Atlantic GrupaCompany of Added Value

Opatija, September 2009


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CONTENT

  • General overview of Atlantic Grupa

  • Overview of the 1H09 and FY08 financial figures

  • Divisional overview

  • FY09 Guidance

  • Cedevita GO!


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VERTICALLY INTEGRATED COMPANY IN CONSUMER HEALTHCARE BUSINESS

Key brands:

  • The leading European company in the sports nutritionMULTIPOWER

  • Leader in the vitamin instant drinks in the SEE regionCEDEVITA

  • Producer of the No1 Croatian brands in the VMS and the OTCDIETPHARM

  • The largest private pharmacy chain in CroatiaFARMACIA

  • The leading FMCG distributer in the SEE regionDistinguished InternationalBrands (Ferrero, Wrigley, Duracell, Johnson & Johnson)

Business Card of Atlantic Grupa


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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


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European company

DEVELOPMENT CYCLE

Acquisition of pharmacies – Farmacia

IPO

Višički 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 M&A 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

Representative 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



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GEOGRAPHICAL PRESENCES

  • Companies and representative offices across Europe

  • Presence on 30 markets


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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


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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


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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


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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


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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


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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

    • Nestle’s 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


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CONSUMER HEALTHCARE DIVISION

25% of

sales

  • Integrates R&D, manufacturing, packaging, marketing and sales of:

    • Cedevita vitamin instant drinks→ No1 producer in the SEE region

    • Personal care products: Plidentatoothpaste, Rosal lip balm

Growth drivers

  • Strength of the Cedevita brand

    • Atlantic’s 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!


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SPORTS AND FUNCTIONAL FOOD DIVISION

24% of

sales

  • Integrates R&D, manufacturing, packaging, marketing

  • Key brand: Multipower for sports and functional nutrition

Growth drivers

  • Strength of the Multipower brand

    • Atlantic’s 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


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PHARMA DIVISION

  • R&D, 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)


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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


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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 company’s long-term growth

    • Liquidity maintenance

    • Business process improvements

  • Screening potential acquisition in times of lowered acquisition valuation premiums

    • In segments that strategically fit the company’s 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


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CEDEVITA GO!

  • New distribution channel for Cedevita – consumption on the go

  • Cedevita covers all consumption channels

  • Exploring synergies potential among divisions:

    • R&D, production and packaging integrated in the Consumer Healthcare division

    • Own distribution infrastructure

    • Synergies opportunities in the Sports and Functional Food division’s 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 Group’s profit margins


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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


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CONTACTS

  • Lada Tedeschi Fiorio, Vice President for Business Development

  • lada.tedeschi.fiorio@atlantic.hr

  • Zoran Stankovic, CFO

  • zoran.stankovic@atlantic.hr

  • Maja Barac, Head of Investor Relations

  • maja.barac@atlantic.hr

  • +385 1 24 13 908


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Q & A

Thank you for your attention!


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