02/22/2013 INVESTORS

Increase in sales revenue and profitability

In 2012, Atlantic Grupa reported an overall revenue in the amount of HRK 5 billion which is 4.8 % higher compared to 2011.

The operating profit before interest, taxes and amortization (EBITDA) increased by 14.9 % reaching a figure of HRK 575.1 million, while the net profit after minority interests increased by 18.5 % amounting to HRK 55.2 million. All Strategic Business Units recorded increase in sales revenue, while the largest increase was recorded by Coffee of 8.9%, Pharma and Personal Care of 7.8% and Savoury Spreads of 7.6%. XXX

"We are exceptionally satisfied with the results achieved in 2012, Atlantic Grupa met the announced expectations by realising organic growth in revenue and improving profitability. The period was concluded with the successful refinancing project, which we confirmed our status as a company which responsibly plans and implements its business strategy and enjoys the trust of international development institutions as well as the financial community. In 2013 employees and the Management Board of Atlantic Grupa will further pursue organic growth through active brand management, innovations, cost optimisation and risk management in order to realise the set business objectives", emphasised Emil Tedeschi, President and CEO of Atlantic Grupa.

The year 2012 was marked by the implementation of a new organisational structure based on which business operations of Atlantic Grupa were structured around 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 and International markets) and the Russian Market. During the year the second phase of Droga Kolinska’s integration into the system of Atlantic Grupa was successfully completed, focusing on the consolidation of production capacities within the system as well as on the consolidation of business IT-solutions. In line with the successful implementation of its strategy as well as its good results, in the last quarter of 2012 Atlantic Grupa refinanced existing loans, with a lower interest rate and with improved maturity. The new loan in the amount of 307 million Euro was granted by the EBRD, IFC and four commercial banks (Raiffeisen Bank, Unicredit Bank, Erste Bank and Sberbank).

During 2012 new products were launched in all business units, while the existing ones were introduced into new markets and the distribution portfolio was further expanded. New brands of spring and mineral water were launched on the Croatian market (Kala and Kalnička), while Argeta - which recorded exceptionally good results in SEE and outside the region, received the highest level of certification in food safety FSSC 22000. The product range Snacks (Štark) achieved record results, while it recorded more than a double growth in Croatia due to the distribution of the enlarged product range. The product line of Multipower Sportsfood was completely redesigned in 2012. Also, the quality of the Atlantic Grupa brands was once more confirmed by the most recent research conducted by the agency Valicon according to which Argeta, Cockta and Cedevita are in the TOP 10 brands in the region.

The Croatian market is the largest single market of Atlantic Grupa with 26.6 % market share, followed by Serbia with 24.9 %, Slovenia with 13.2 %, Bosnia & Herzegovina with 7.6 %, the remaining regional markets with 6.4 %, while the key West European markets account for 7.3 % of total sales. The Russian and CIS markets with the share of 5.0 % in total sales revenue record the highest growth of 31.4 %. The remaining markets account for 8.9 % in total sales revenue. Atlantic Grupa's own brands account for 72.0 % of company sales, external brands from distribution portfolio account for 15.9 %, sales of the pharmacy chain Farmacia account for 6.1 %, while Atlantic Grupa's private label sales targeting big business systems in Croatia and abroad account for 6.0 % of sales.