Atlantic Grupa
Company of Added Value
Opatija, September 2009
1
CONTENT

General overview of Atlantic Grupa

Overview of the 1H09 and FY08 financial figures

Divisional overview

FY09 Guidance

Cedevita GO!
2
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
Headquarter
Market position in Croatia
Employees
Zagreb, Croatia
1
1,847
(as of June 30, 2009)
Markets
Representative offices
FY08 sales
Expected FY09 sales
30
9
EUR278m (+20% yoy)
EUR290m
3
VERTICALLY INTEGRATED COMPANY IN THE CONSUMER HEALTHCARE BUSINESS
Vertically integrated organization:
This business model enables:
 Exploring synergies among divisions
 Production: CHC division, SFF
division; VMS/OTC production
 Running vertically integrated
 Distribution
organization
 Retail: Pharmacy chain
FMCG DISTRIBUTION
Distribution Division
CONSUMER HEALTHCARE
Consumer Health Care
Sports and Functional
Division
Food Division
Pharma Division
VMS
Own brands
Vitamin drinks and teas
Principal brands
Cosmetics and personal
Sports and functional food
OTC
Pharmacy chain
care
37% of sales
25% of sales
24% of sales
14% of sales
SYNERGIES
4
European company
DEVELOPMENT CYCLE
2008
Acquisition of pharmacies – Farmacia
Development based on:
2007
IPO
 Carefully thought diversification strategy
in the Consumer HealthCare segment
2007
2007
2007
 Extensive M&A track record
 Foray into the selected industry niches
Višički komerc (Macedonia)
Multivita (Serbia)
Fidifarm (Croatia)
Representative office Moscow
2006
Power Gym (affiliated company in UK)
2005
Haleko Italy (affiliated company in Italy)
2005
Haleko
Regional company
2004
2004
Melem
Atlantic Ljubljana
2003
Atlantic Skopje
2003
Neva
2001
Cedevita
2001
Atlantic Beograd
2001
Representative office Sarajevo
Croatian company
1999
Cooperation Johnson & Johnson
1996
Cooperation Duracell
1994
Distribution centre Rijeka
1994
Distribution centre Osijek
1992
Distribution centre Split
1991
Cooperation Wrigley
5
SALES GROWTH 1993-2009e
290
300
278
In EURm
247
250
CAGR 1993-2009e:
+33.1%
201
200
150
150
100
86
92
2002
2003
104
64
50
3
6
1993
1994
13
19
29
35
36
41
1997
1998
1999
2000
0
1995
1996
CROATIAN COMPANY
2001
REGIONAL COMPANY
2004
2005
2006
2007
2008 2009E
EUROPEAN COMPANY
6
GEOGRAPHICAL PRESENCES
 Companies and
representative offices
across Europe
Presence on 30 markets
7
OVERVIEW OF THE 1H09 FINANCIAL FIGURES
In HRKm
1H09
1H08
1H09/1H08
Revenues
1,075.6
961.6
11.9%
Sales
EBITDA
1,061.1
951.4
11.5%
97.0
80.5
20.6%
EBIT
76.9
59.8
28.6%
Net profit after MI
41.6
27.7
49.8%
EBITDA ex. oneoffs
87.2
80.5
8.3%
EBIT ex. one-offs
67.1
59.8
12.1%
Net profit ex. oneoffs
31.7
27.7
14.2%
 Double-digit growth despite
unfavourable macroeconomic
milieu
 Strong growth rates ex. oneoffs:
 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
Geographic sales profile in 1H09
* 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
61.9% Croatia
2.9% Slovenia
2.2% Italy
11.6% Germany
3.8% BiH
10.6% Other
5.3% Serbia
1.8% UK
 The key West European markets
* Growth in CER terms in spite of deteriorated economic environment
1H09
 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
44.7% Own brands
6.5% Private label
37.7% Principal brands
11.2% Farmacia
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PROFITABILITY DYNAMICS
Optimisation of business operations
EBITDA
110
100
EBITDA
97.0
Cost savings
(in HRKm)
EBITDA ex. non-recurring gain
87.2
90
80.5
9.1%
80
8.2%
EBITDA
EBIT
Net profit
8.5%
70
+8.3%
+12.1%
+9.8%
Ex. one-off
gain
60
1H09
1H08
EBIT
NET PROFIT
90
60
EBIT
67.1
70
59.8
7.3%
60
Net profit
EBIT ex. non-recurring gain
6.3%
6.3%
50
40
(in HRKm)
(in HRKm)
80
76.9
50
48.1
40
4.5%
30
Net profit ex. non-recurring gain
38.2
34.8
3.6%
3.7%
20
1H09
1H08
1H09
1H08
10
FINANCIAL INDICATORS in 1H09
Key highlights:
in HRKm
1H09
1H08
Net debt
296.4
297.1
1,746.5
1,485.7
712.9
620.9
Interest coverage ratio*
6.0
6.1
Current ratio
1.6
1.4
Gearing ratio
29.4%
32.4%
Capex
47.9
34.4
Operating cash flow
27.5
28.1
Total assets
Equity
 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
*Ex. non-recurring gain
Key highlights:

Strong interest coverage

Favourable gearing ratio

Exploitation of available IR hedging instruments
(the long-term financial debt cost fixed below 5%)

Management pays
special focus on these
given generally
arguably unfavourable
financing environment
No refinancing requirement - favourable debt structure with the majority
maturing in 2011
11
OVERVIEW OF THE FY08 FINANCIAL FIGURES
In HRKm
FY08
FY07
FY08/FY07
Revenues
2,024.5
1,699.1
19.1%
Sales
2,002.9
1,670.0
19.9%
EBITDA
169.3
132.3
27.9%
EBITDA margin
8.45%
7.92%
+53 bps
EBIT
EBIT margin
Net profit
129.4
95.1
6.46%
5.70%
68.6
46.4
36.0%
+77 bps
 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
47.9%
12
DISTRIBUTION DIVISION
 The leading regional distributer of FMCGs with top global and regional brands
640
Sales growth drivers
Sales (HRKm)
700
616.2
37% of
sales
 Continuously adding new distribution deals
 focus on diversification of distribution portfolio
 to control sales volatility risk
+15.5%
580
533.5
 Growth across all distribution channels
 retail
 HoReCa
520
460
400
1H09
1H08
 Extensive know-how
 New distribution deals as growth drivers in FY09:
Profitability growth drivers
 EBIT up 32.3% yoy in 1H09 and 12.0% yoy in FY08
 Economies of scale
 lower marginal costs in distribution
 Biscuits and salted snacks under Karolina brand
 Ferrero program in Slovenia
 Nestle’s NESCAFE assortment in the HoReCa
channel
 Developed network of distribution centres in the SEE
 central warehouse in Jankomir
 Bargaining power
 Exploring brand synergies
13
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: Plidenta toothpaste, Rosal lip balm
Growth drivers
Sales (HRKm)
280
262.3
260
 Strength of the Cedevita brand
 Atlantic’s best selling brand
+7.8%
 New distribution channel – HoReCa
243.2
240
 Markets with high consumption potential: Serbia,
Slovenia
220
200
EBIT (HRKm)
50
1H09
1H08
44.9
45
Profitability growth drivers
 Best-margin division
 Cedevita in new distribution channel
 Cedevita GO!
+38.5%
40
35
32.4
30
25
1H09
1H08
14
SPORTS AND FUNCTIONAL FOOD DIVISION
 Integrates R&D, manufacturing, packaging, marketing
24% of
 Key brand: Multipower for sports and functional nutrition
sales
Growth drivers
Sales (HRKm)
260
247.2
 Strength of the Multipower brand
 Atlantic’s second best selling brand
+3.4%
239.0
240
 The leading market position in Germany, Norway, Sweden,
 Markets with the highest growth: Russia, Sweden, Spain
220
200
1H09
1H08
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
15
PHARMA DIVISION
 R&D, manufacturing, packaging, marketing and sales of VMS and OTC
14% of sales
 Key brand in the VMS and OTC segment - Dietpharm
 The largest private pharmacy chain in Croatia - Atlantic Farmacia
Growth drivers
Sales (HRKm)
160
 Acquisition of pharmacies/launch of specialised stores
 new distribution channel
150.8
150
+9.3%
137.9
140
 Focus on non-prescription drugs in pharmacies
 New product launches in the VMS and the OTC segment
130
 Launch of drug wholesale business
120
1H09
1H08
 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
In HRKm
2009 Plan
2008
2009/2008
Revenues
2,166
2,024.5
7.0%
Sales
2,143
2,002.9
7.0%
EBITDA
194
169.3
14.3%
EBIT
147
129.4
13.4%
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
18
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
Consumer Healthcare division
integrated
in
the
 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
19
ATLANTIC GRUPA ON THE CAPITAL MARKET
ATGR-R-A vs. Crobex
6,000
1,000
Crobex
ATGR-R-A
800
4,500
 Performance (with PPS of HRK 730 as of 17/09/2009):
 ATGR-R-A
+52.1% ytd
 CROBEX
+26.2% ytd
600
 Outperformance resulting from:
3,000
400
1,500
200
0
Nov-07
Feb-08
May-08
Aug-08
Share info & valuation
Nov-08
Feb-09
May-09
12-month Trailing
PPS (as of 17/09/09)
730.0
MCap (HRK 000)
1,802,973
Av. daily turnover (HRK)
EV (HRK 000)
629,981
2,128,995
Aug-09
 Strong ownership structure
 Strong business fundamentals
 All domestic mandatory pension funds in top 10
shareholders accounting for 46.74% of free float
Shareholder structure on September 09, 2009
52.57% E. Tedeschi
7.73% L. Tedeschi Fiorio
7.14% DEG
EV/EBITDA
12.10
EV/EBIT
15.58
EV/sales
1.02
1.93% Management
EPS (HRK)
29.45
0.16% Treasury shares
P/E
24.79
30.47% Free float
* Calculated based on figures ex. one-off
20
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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