04/30/2012 CORPORATE

Business activities according to expectations

Business activities according to expectations with continuation of growth.

In the first quarter of 2012, Atlantic Grupa reported sales of HRK 1.05 billion, 7.9 % higher compared to the same period last year. The operating profit before interest, taxes and amortization (EBITDA) increased by 44.4 % reaching a figure of HRK 134.2 million, while the net loss after minority interests, under significant influence of negative exchange rate differences, recorded HRK 6.3 million. Double digit growth rates of strategic business units: Coffee, Snacks, Pharma and Personal Care and Savoury Spreads considerably influenced the sales growth of Atlantic Grupa in the first quarter of 2012.

The first quarter was marked by the reorganisation of business activities after the successful integration of Droga Kolinska within the Atlantic Grupa system. The company implemented a new organisational structure based on six strategic business units (Coffee, Snacks, Savoury Spreads, Beverages, Pharma and Personal Care and Sports and Functional Food), along with four Strategic distribution units (Croatia, Slovenia-Serbia-Macedonia, HoReCa, International markets) and the Russian market. In the course of the reorganisation, the Management Board was reduced to four members and the Strategic management council, whose members are responsible for business and distribution areas, as well as the corporative support function were established.

"We are exceptionally proud to have repeatedly registered growth in sales income and we remain on track to achieve the figures forecasted for the year 2012. Considerable growth of operating income is a proof of success of the integration activities carried out last year and it also confirms profitability of those investments. In order to achieve further business growth in the very challenging macro-economic environment, which we expect to continue throughout the entire year 2012, the Management Board and the employees are further focusing on the organic growth of business through innovations in the production categories, active brand management, cost optimisation and by meeting financial obligations", commented the President of the Management Board, Mr Emil Tedeschi.

According to the forecasts, the second phase of the production consolidation within Atlantic Grupa continued during the first quarter and manufacturing of Multipower beverages was moved from the contractual manufacturer to our own premises in Rogaška Slatina. The Management continues with the evaluations of cost-effectiveness of transferring the remaining service production to our own plants. New brands of spring and mineral water were launched on the Croatian market (Kala and Kalnička) which will substitute the former brands Unique and Kapljica in the water segment.

Croatia remains the biggest single market of Atlantic Grupa with 26.3 percent market share, followed by Serbia with 24,9 percent, Slovenia with 12 percent, Bosnia & Herzegovina with 8 percent, the remaining regional markets with 5.8 percent, while the West European markets account for 9.1 percent of total sales. The Russian and Eastern European markets with the share of 4.3 percent in total sales record the highest growth of 33.2 percent. The remaining markets account for 9.6 percent in total sales.

Atlantic Grupa's own brands account for 71.8 percent of company sales, external brands from distribution portfolio account for 14.7 percent, sales of the pharmacy chain Farmacia account for 7.3 percent, while Atlantic Grupa's private label sales targeting big business systems in Croatia and abroad account for 6.3 percent of sales.