Atlantic Grupa
Company of Added Value
Belgrade, May 2009
1
CONTENT

General overview of Atlantic Grupa

Overview of the FY08 financial figures

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, Wigley,
Duracell, Johnson & Johnson)
FY08 sales
EUR280m (+20% yoy)
Employees
1,670
Markets
Expected FY09 sales
30
EUR290m
3
VERTICALLY INTEGRATED COMPANY IN THE CONSUMER HEALTHCARE BUSINESS
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
38% of sales
24% of sales
24% of sales
14% of sales
SYNERGIES
4
DEVELOPMENT CYCLE
5
GEOGRAPHICAL PRESENCES – Companies and Representative Offices across Europe
 Presence on
30 markets
6
SALES GROWTH 1993-2008
300
278
In EURm
247
250
CAGR 1993-2008:
+35.2%
201
200
150
150
86
100
92
104
64
50
3
6
13
19
29
35
36
41
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
CROATIAN COMPANY
REGIONAL COMPANY
EUROPEAN COMPANY
7
SHAREHOLDER STRUCTURE
 Stable ownership structure
Shareholder structure on March 31, 2009
52,72% E. Tedeschi
7,76% L. Tedeschi Fiorio
6,96% DEG
31,01% Free float
1,74% Management
0,28% Treasury shares
8
ATLANTIC GRUPA AND THE CAPITAL MARKETS
 Stable ownership structure
 All domestic pension funds among top 10 shareholders
 East Capital - the leading asset manager specialising in Eastern Europe
 Road show in 2008 in the US
 East Capital award for the Discovery of the Year in 2008
 Pace of the ATGR-R-A share decline slower than the drop pace in the local benchmark Crobex
9
OVERVIEW OF THE FY08 FINANCIAL FIGURES
In HRKm
2008
2007
2008/2007
Revenues
2.024,5
1.699,1
19,1%
Sales
2.002,9
1.670,0
19,9%
 Strong business results
 In line with the management
guidance
 Double-digit growth rates:
 Sales +20%
 EBITDA +28%
EBITDA
EBITDA margin
EBIT
EBIT margin
Net profit after MI
169,3
132,3
27,9%
8,45%
7,92%
129,4
95,1
36,0%
6,46%
5,70%
+77bps
68,6
46,4
47,9%
+53 bps
 EBIT +36%
 Net profit
+48%
 Acquisition of pharmacies
contributed to the top-line
growth with +13% - HRK221m
 Strong organic growth:
 Sales +6%
 EBIT +19%
10
SALES PROFILE
Geographic sales profile in FY08
63,1% Croatia
11,6% Germany
4,9% Serbia
2,5% Slovenia
3,3% BiH
2,1% UK
2,2% Italy
10,1% Other
FY08
44,2% Own brands
37,7% Principal brands
7,1% Private label
11,0% Farmacia
11
PROFITABILITY
EBITDA
Organic growth
180
169,3
 EBIT
 EBITDA
 Net profit
+27.9%
160
(in HRKm)
8,5%
+ 18.5%
+ 14.2%
+ 23.7%
132,3
140
Strong focus and commitment to:
120
 Cost optimisation
 Business process improvements
 Exploring synergies among divisions
7,9%
100
80
2008
2007
NET PROFIT
EBIT
80
140
120
129,4
70
+36.0%
6,5%
110
100
95,1
90
5,7%
(in HRKm)
(in HRKm)
130
60
68,6
+47.9%
3,4%
46,4
50
2,8%
40
30
80
2008
2007
2008
2007
12
DISTRIBUTION DIVISION
 The leading regional distributer of FMCGs with top global and regional brands in their categories
38% of sales
Sales growth drivers
Sales (HRKm)
800
760
752,8
+11.9%
720
672,5
680
640
600
FY08
 New distribution deals
focus on diversification of distribution portfolio
 Growth across all distribution channels
 retail
 HoReCa
 Extensive know-how
 key account management
 category management
 trade marketing
FY07
Profitability growth drivers
24
 Economies of scale
 lower marginal costs in distribution
 Developed network of distribution centres in the SEE
 Bargaining power
 Exploring brand synergies
EBIT (HRKm)
25
23,7
+12.0%
23
22
21,2
21
20
19
FY08
FY07
13
CONSUMER HEALTHCARE DIVISION
 Integrates R&D, manufacturing, packaging, marketing and sales of:
24% of sales
 Cedevita vitamin instant drinks → No1 producer in the SEE region
 Personal care products: Plidenta toothpaste, Rosal lip balm
Growth drivers
Sales (HRKm)
500
487,5
 Strength of the Cedevita brand
 Atlantic’s best selling brand
 New distribution channel – HoReCa (hotels, restaurants,
cafes)
 Markets with high consumption potential: Serbia, Slovenia
+4.3%
480
467,5
460
 Cedevita entering new distribution channel
 Consumption on the GO → Cedevita GO!
440
FY08
FY07
65
63,2
EBIT (HRKm)
+14.5%
60
55,2
55
50
FY08
14
FY07
SPORTS AND FUNCTIONAL FOOD DIVISION
 Integrates R&D, manufacturing, packaging, marketing
24% of sales
 Key brand: Multipower for sports and functional nutrition
Sales (HRKm)
500
480,4
480
+1.8%
Growth drivers
471,7
460
440
420
400
FY08
FY07
 Strength of the Multipower brand
 Atlantic’s second best selling brand
 The leading market position in Germany, Norway, Sweden,
Croatia and Serbia
 Markets with the highest growth: Russia, Sweden, Spain
 New trends toward healthier lifestyle
Successfully completed restructuring
 the highest EBIT growth among divisions
20
18,4
EBIT (HRKm)
+81.0%
16
12
10,1
8
FY08
15
FY07
PHARMA DIVISION
R&D, manufacturing, packaging, marketing and sales of VMS and OTC
 Key brand in the VMS and OTC - Dietpharm
14% of sales
 The largest private pharmacy chain in Croatia - Atlantic Farmacia
300
282,2
Growth drivers
Sales (HRKm)
 Acquisition of pharmacies/launch of specialised stores
 new distribution channel for the Group
 synergies across the Group’s distribution portfolio
250
+383.6%
200
 Strategic focus on increasing participation of nonprescription drugs
 New product launches in the VMS and the OTC segment
150
100
58,4
50
FY08
Dietpharm VMS and OTC
 Pharmacy business – margin-accretive for Atlantic
FY07
Market share
Rang in
in Croatia
category
22%
1
EBIT (HRKm)
24
23,4
+154.9%
20
16
32 Pharmacies and 5
specialized stores
5.5%
12
9,2
8
FY08
16
FY07
KEY PERFORMANCE INDICATORS
(In HRK '000)
2008
2007
Turnover
Sales
EBITDA
EBITDA margin
EBIT
EBIT margin
Net income
2.024.459
2.002.926
169.306
8,45%
129.400
6,46%
68.629
1.699.103
1.670.045
132.330
7,92%
95.118
5,70%
46.405
Net debt
Total assets
Equity
Interest coverage ratio
Current ratio
Gearing ratio
CAPEX
291.192
1.655.766
710.976
6,69
1,76
40,96%
58.700
90.492
1.464.426
651.529
5,59
1,83
13,89%
54.349
Market capitalization *
1.138.668
2.166.210
EV
1.479.060
2.302.671
EV/EBITDA
8,74
17,40
EV/EBIT
11,43
24,21
EV/sales
0,74
1,38
EPS
27,84
21,96
P/E *
16,56
39,94
* Calculated based on shaer price of HRK 461.00 as at 31 December 2008 and HRK 877.01 as at 31 December 2007
17
FY09 GUIDANCE
In HRKm
2008
2009 Plan
2009/2008
Revenues
2.024,5
2.166
7,0%
Sales
2.002,9
2.143
7,0%
EBITDA
169,3
194
14,3%
EBIT
129,4
147
13,4%
18
FY09 GUIDANCE
 Even though Atlantic Grupa operates in stable industry, the management is well aware of challenges
created by the economic and financing environments
 Strict focus on: (i) Liquidity maintenance
(ii) Cost management
(iii) Business processes improvements
(iii) Implementation of new projects
19
FY09 GUIDANCE
 New programs set to create opportunities even in challenging
economic times:
 Consumer Healthcare division
 Launch of Cedevita GO! – Cedevita in the new distribution channel
 Distribution division
 New distribution agreements signed at the end of 2008/beginning of
2009:
 Distribution of Karolina products – estimated annual turnover of
HRK125m
 Distribution of the Ferrero program in Slovenia – estimated annual
turnover of EUR16m
 Nestle’s NESCAFE assortment in the HoReCa channel – estimated
annual turnover of HRK15m
20
FY09 GUIDANCE
 New programs set to create opportunities even in challenging economic
times:
 Pharma division
 5 new pharmacies from the previously acquired licenses
 1 specialised store within the scope of strategic cooperation with
Agrokor
 Sports and Functional Food division
Redesign of Multipower
 Regulatory approvals for the Multipower product line in Russia
 Launching new ENDURANCE product line for cycling and jogging
 Taking Multipower outside of gyms and fitness centres
21
FY09 GUIDANCE
 No refinancing requirements, with only minor portion maturing in 2009
 Favourable gearing ratio of 29.1% in FY08
 Screening potential acquisition targets that would secure value-creative IRR
 Atlantic Grupa has substantial know-how and experience in due diligence and acquisition activities
 EUR20m from DEG at disposal
 Targeting:
(i) Pharmacies in Croatia and the region
(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
22
Cedevita BRAND
Cedevita has the strongest household presence and is the second favourite Soft drink
brand in Croatia.
Favourite*
brand
(%)
Have in*
household
(%)
Jamnica
33
Coca-ColaTM
Jana
Cedevita
28
9
44
Volume in 2007
(In MM liters)
8
178
20
92
3
61
13
55
Source: Canadean 2007 industry report; Centum istrazivanja: Croatia AFB Study Ferbuary 2009, *Total sample, Open end question
23
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
Macedonia, BiH)
distribution
(Croatia,
Serbia,
Slovenia,
 Favourable impact on the Group’s profit margins
24
Contacts
 Lada Tedeschi Fiorio, Vice President for the 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
25
Q&A
Thank you for your attention!
26