ATLANTIC GRUPA Financial results in 1H09

1
ATLANTIC GRUPAFinancial results in
1H09 Double-digit growth despite unfavourable
macroeconomic milieu August, 2009
2
CONTENT

• Key business developments in 1H09
• Financial results in 1H09
• FY09 Guidance

CONSUMER HEALTHCARE
3
Key business developments in 1H09

• Launch of Cedevita GO!
• Beginning of February in Croatia
• In the period February May in the region
• Cedevita GO! lemon launched during June-July in
  Croatia and region-wise
• Sales of HRK25m in the period from the
  distribution start
• Value market share on the fragmented on-the-go
  Croatian market in the period April-May of 3.3
  and 4.0 in the period June-July
• Focused distribution product portfolio balancing
• Ferrero program in Slovenia (distribution start
  August 09)
• Karolina assortment (biscuits and salted snack)
• Nestle brand NESCAFE in the HoReCa channel

4
Key business developments in 1H09

• Innovative product line in the Sports and
  Functional Food division
• Launch of endurance line Active Multipower
• Consumer base expansion (outside gyms and
  fitness centres)
• Cooperation with the cycling equipment
  manufacturer Shimano
• Drug wholesale business within the Pharma
  division
• Differentiated strategic focus on VMS, OTC and
  other products with distribution organised
  through the pharmacy channel primarily through
  exclusive distribution deals
• Focus on market niche in the drug wholesale
  business
• Additional focus on trade marketing services
• Achieving vertical integration Production
  (Dietpharm) Distribution (Fidifarm) Retail
  (Farmacia)

5
Key business developments in 1H09

• Continuous expansion of the pharmacy chain
  Farmacia
• Launching 5 specialised stores
• Launching 3 pharmacies on the back of the last
  year acquired pharmacy licences
• During summer - acquisition of 12 new pharmacy
  units (7 pharmacies and 5 specialised stores)
  within the company Livia Ltd. with sales of ca.
  HRK50m
• Following the consolidation of acquired
  pharmacies, Farmacia counts altogether 52
  pharmacies and specialised stores
• Planned opening of 2 pharmacies and 1
  specialised store by the end of 2009

6
Key business developments in 1H09

• Dividend payout for 2008 of HRK 7.0 per share
  (25 payout ratio)
• Management board expansion ? nomination of the
  Vice President for the Consumer HealthCare
  division

7
Overview of 1H09 financial results

• Sales advanced to 1,061.1 million kuna
• 11.5 yoy based on reported figures
• EBIT surged to 76.9 million kuna
• 28.6 yoy based on reported figures
• 12.1 - yoy growth excluding the one-off (gain
  of HRK9.9m on purchase of minority interest in
  Cedevita from the German development bank DEG) to
  67.1 million kuna
• Net profit after minorities rose to 41.6 million
  kuna
• 49.8 yoy based on reported figures
• 14.2 - yoy growth ex. the one-off to 31.7
  million kuna

8
Overview of one-offs during 2009

• Purchase of minority interest in Cedevita from
  the German development bank DEG
• Non-recurring gain of 9.9 million kuna
• Atlantic Grupas ownership interest in Cedevita
  increased to 81 from 51
• Purchase of minority interest came as a result
  of the call option exercise
• Sale of Neva location and subsequent transfer to
  Rakitje location
• Expected positive net gain of ca. 45 million
  kuna
• Expected positive cash flow of ca. 30 million
  kuna
• Impact on Atlantic Grupas business results in
  2H09

9
Consolidated income statement for 1H09
(unaudited)

• Double-digit growth rates
• Sales 12
• EBITDA 21
• EBIT 29
• Net profit 50

10
Normalized consolidated income statement for 1H09
(unaudited)

• Strong growth rates ex. the one-off
• Sales 12
• EBITDA 8
• EBIT 12
• Net profit 14

11
Business segments
12
1H09 Sales dynamics

• Growth of 11.5 yoy based on reported figures
• Key growth drivers
• (i) growth on regional markets
• (ii) new distribution deals
• (iii) launch of Cedevita GO!
• (iv) opening of new specialised stores and
  pharmacies

13
Sales by geographic zone
14
Sales on the key markets - Croatia

• Growth of 12.1 yoy despite
• (i) 1Q09 GDP decline by 6.7
• (ii) private consumption slump by 9.9
• Key growth drivers
• (i) new distribution categories
• (ii) launch of Cedevita GO!
• (iii) opening of new specialised stores and
  pharmacies

15
Sales on the key markets Germany, UK and Italy

• Germany
• 1.8 in CER terms
• Despite 1Q09 GDP contraction
• UK
• -7.7 in CER terms
• Suspension of sale to one of key accounts during
  contract renegotiation
• (successfully completed in May)
• Italy
• 2.4 in CER terms
• In spite of significantly deteriorated economic
  environment

16
Sales on the key markets Serbia, Slovenia and
BiH

• Serbia
• 39.2 in CER terms
• Growth drivers
• (i) launch of Cedevita GO!
• (ii) growth of the HoReCa channel
• (iii) new principals
• Slovenia
• 19.2 in CER terms
• Growth drivers
• (i) Cedevita GO!
• (ii) growth of the HoReCa channel
• (iii) sales increase from external brands
• Upside potential in 2H09 amidst the
• commencement of the Ferrero program
• distribution

17
Sales by product type
Own brands 3.5 amid (i) launch of Cedevita
GO! (ii) growth of brands in the Sports and
Functional food division (iii) growth of
Multivitas assortment Principal brands 26.1
due to new distribution groups (e.g.
Karolinas assortment)
Private label -3.1 reflecting the continuation
of trend from 2008 related to decrease in private
label sales with below average profitability Farm
acia 12.4 due to (i) opening of new
specialised stores and pharmacies (ii) growth of
existing pharmacies
18
Sales profile by division
Distribution 15.5 amidst (i) new
distribution deals (e.g. Karolina) (ii) Cedevita
GO! Upside potential from Ferrero program
in Slovenia in 1H09 Consumer HealthCare 7.8
due to (i) launch of Cedevita GO! (ii)
Multivitas sales increase on the Russian
market Sports and Functional Food 3.4 Key
growth driver Russia, Austria and
Sweden Pharma 9.3 due to (i) launch of new
specialised stores and pharmacies (ii) growth in
existing pharmacies (iii) 12.4 higher sales in
the pharmacy chain Farmacia
19
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
20
Normalized division operating profitability
Distribution 32.2 amidst last years
optimisation activities (e.g. distribution-logisti
cs processes, central warehouse in
Jankomir) Consumer HealthCare 38.5 due
to operating processes improvements (transfer
of production of pressed candies and granules,
outsourcing of tea production) More efficient
production of Neva on new location Sports and
Functional Food 21.2 due to (i) reorganisation
activities (ii) sale reduction of private label
categories Pharma -69.7 amid (i) launch of
drug wholesale business (infrastructure
investments, restructuring of Dietpharms sales
organisation) (ii) investments in newly opened
specialised stores
21
Financial indicators
Focus on (i) maintenance of stable cash flow
from operating activities (ii) exploitation of
available hedging instruments (the long-term
financial debt cost fixed below 5) (iii)
maintenance of favourable debt structure with the
majority maturing in 2011 (iv) allocation of
available ca. HRK200m in cash to new acquisitions
and capex financing
22
Consolidated statement of financial position
(unaudited)
23
Consolidated cash flow statement (unaudited)
Focus on maintenance of stable cash flow from
operating activities
24
FY09 Guidance
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
25
FY09 Guidance

• 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 companys
  long-term growth
• Screening potential acquisition in times of
  lowered acquisition valuation premiums
• In segments that strategically fit the companys
  further development

26
Q A Thank you for attention