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Atlantic Grupa Company of Added Value

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  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 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

  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 • 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

  14. 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!

  15. 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

  16. 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)

  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 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

  19. 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

  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@atlantic.hr • Zoran Stankovic, CFO • zoran.stankovic@atlantic.hr • Maja Barac, Head of Investor Relations • maja.barac@atlantic.hr • +385 1 24 13 908

  22. Q & A Thank you for your attention!