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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: - PowerPoint PPT Presentation
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11
Atlantic Grupa
Company of Added Value
Opatija, September 2009
22
CONTENT
General overview of Atlantic Grupa
Overview of the 1H09 and FY08 financial figures
Divisional overview
FY09 Guidance
Cedevita GO!
33
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)
VERTICALLY INTEGRATED COMPANY IN CONSUMER HEALTHCARE BUSINESS
Headquarter Market position in Croatia
Zagreb, Croatia
1
Employees
(as of June 30, 2009)
1,847
MarketsRepresentative offices
30
9
FY08 salesExpected FY09 sales
EUR278m (+20% yoy)
EUR290m
Business Card of Atlantic Grupa
44
VERTICALLY INTEGRATED COMPANY IN THE CONSUMER HEALTHCARE BUSINESS
FMCG DISTRIBUTION CONSUMER HEALTHCARE
Distribution Division Consumer Health Care
Division
Sports and Functional
Food Division
Pharma Division
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
VMS
OTC
Pharmacy chain
14% of sales
This business model enables:
Exploring synergies among divisions
Running vertically integrated
organization
Vertically integrated organization:
Production: CHC division, SFF division; VMS/OTC production
Distribution
Retail: Pharmacy chain
SYNERGIES
55
DEVELOPMENT CYCLE
Development based on:
Carefully thought diversification strategy in the Consumer HealthCare segment
Extensive M&A track record
Foray into the selected industry niches
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
European company
2008
2007
2007
2007
2007
2006
2005
2005
Melem
Atlantic Ljubljana
Atlantic Skopje
Neva
Cedevita
Atlantic Beograd
Representative office Sarajevo
Regional company
2004
2004
2003
2003
2001
2001
2001
Cooperation Johnson & Johnson
Cooperation Duracell
Distribution centre Rijeka
Distribution centre Osijek
Distribution centre Split
Cooperation Wrigley
Croatian company
1999
1996
1994
1994
1992
1991
66
SALES GROWTH 1993-2009e
3 6 13 1929 35 36 41
64
86 92104
150
201
247
290278
0
50
100
150
200
250
300
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E
In EURm
CAGR 1993-2009e: +33.1%
CROATIAN COMPANY REGIONAL COMPANY EUROPEAN COMPANY
77
GEOGRAPHICAL PRESENCES
Companies and representative offices across Europe
Presence on 30 markets
88
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
In HRKm 1H09 1H08 1H09/1H08
Revenues 1,075.6 961.6 11.9%
Sales 1,061.1 951.4 11.5%
EBITDA 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. one-offs
87.2 80.5 8.3%
EBIT ex. one-offs 67.1 59.8 12.1%
Net profit ex. one-offs
31.7 27.7 14.2%
99
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
Geographic sales profile in 1H09
61.9% Croatia 11.6% Germany 5.3% Serbia
2.9% Slovenia 3.8% BiH 1.8% UK
2.2% Italy 10.6% Other
1H09
44.7% Own brands 37.7% Principal brands
6.5% Private label 11.2% Farmacia
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
1010
EBITDA
EBIT NET PROFIT
Optimisation of business operations
Cost savings
EBITDA +8.3% Ex. one-off EBIT +12.1% gainNet profit +9.8%
97.0
87.280.5
60
70
80
90
100
110
1H09 1H08
(in H
RK
m)
EBITDA
EBITDA ex. non-recurring gain
9.1%
8.5%
8.2%
76.9
67.1
59.8
40
50
60
70
80
90
1H09 1H08
(in H
RK
m)
EBIT
EBIT ex. non-recurring gain
7.3%
6.3%
6.3%
48.1
38.2 34.8
20
30
40
50
60
1H09 1H08
(in H
RK
m)
Net profit
Net profit ex. non-recurring gain
4.5%
3.7%3.6%
PROFITABILITY DYNAMICS
1111
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
*Ex. non-recurring gain
28.127.5Operating cash flow
34.447.9Capex
32.4%29.4%Gearing ratio
1.41.6Current ratio
6.16.0Interest coverage ratio*
620.9712.9Equity
1,485.71,746.5Total assets
297.1296.4Net debt
1H081H09in HRKm
*Ex. non-recurring gain
28.127.5Operating cash flow
34.447.9Capex
32.4%29.4%Gearing ratio
1.41.6Current ratio
6.16.0Interest coverage ratio*
620.9712.9Equity
1,485.71,746.5Total assets
297.1296.4Net debt
1H081H09in HRKm
1212
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
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 129.4 95.1 36.0%
EBIT margin 6.46% 5.70% +77 bps
Net profit 68.6 46.4 47.9%
1313
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
Sales (HRKm)
616.2
533.5
400
460
520
580
640
700
1H09 1H08
+15.5%
1414
CONSUMER HEALTHCARE DIVISION25% 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
Strength of the Cedevita brand Atlantic’s best selling brand
New distribution channel – HoReCa
Markets with high consumption potential: Serbia, Slovenia
Sales (HRKm)
262.3
243.2
200
220
240
260
280
1H09 1H08
+7.8%
Profitability growth drivers
Best-margin division
Cedevita in new distribution channel Cedevita GO!
EBIT (HRKm)
44.9
32.4
25
30
35
40
45
50
1H09 1H08
+38.5%
1515
SPORTS AND FUNCTIONAL FOOD DIVISION
Integrates R&D, manufacturing, packaging, marketing
Key brand: Multipower for sports and functional nutrition
24% of
sales
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
Sales (HRKm)
247.2
239.0
200
220
240
260
1H09 1H08
+3.4%
1616
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)
Sales (HRKm)
150.8
137.9
120
130
140
150
160
1H09 1H08
+9.3%
Distribution (Wholesaler Fidifarm)
Retail (Farmacia)
1717
Guidance:
(i) reflects organic development
(ii) does not include one-off positive effects from the 1Q09 and expected positive net effect of approximately HRK45m fromthe sale of Neva location and the subsequent transfer to Rakitje location
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%
FY09 GUIDANCE DURING UNFAVOURABLE MACROECONOMIC SETUP
1818
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
FY09 GUIDANCE DURING UNFAVOURABLE MACROECONOMIC SETUP
1919
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
CEDEVITA GO!
2020
ATLANTIC GRUPA ON THE CAPITAL MARKET
Shareholder structure on September 09, 2009
52.57% E. Tedeschi
7.73% L. Tedeschi Fiorio
7.14% DEG
30.47% Free float
1.93% Management
0.16% Treasury shares
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
ATGR-R-A vs. Crobex
0
1,500
3,000
4,500
6,000
Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09
-
200
400
600
800
1,000
Crobex ATGR-R-A
* Calculated based on figures ex. one-off
24.79P/E
29.45EPS (HRK)
1.02EV/sales
15.58EV/EBIT
12.10EV/EBITDA
2,128,995EV (HRK 000)
629,981Av. daily turnover (HRK)
1,802,973MCap (HRK 000)
730.0PPS (as of 17/09/09)
12-month TrailingShare info & valuation
* Calculated based on figures ex. one-off
24.79P/E
29.45EPS (HRK)
1.02EV/sales
15.58EV/EBIT
12.10EV/EBITDA
2,128,995EV (HRK 000)
629,981Av. daily turnover (HRK)
1,802,973MCap (HRK 000)
730.0PPS (as of 17/09/09)
12-month TrailingShare info & valuation
2121
CONTACTS
Lada Tedeschi Fiorio, Vice President for Business Development
Zoran Stankovic, CFO
Maja Barac, Head of Investor Relations
+385 1 24 13 908
2222
Q & A
Thank you for your attention!