Company pany of Added ed Value ue th 201 New York, rk, Apri ril - - PowerPoint PPT Presentation

Company pany of Added ed Value ue

New York, rk, Apri ril l 6th

th 201

016

PRODUCTION DISTRIBUTION

= = Leading regional manufacturer and distributor of FMCG brands

+

19

— production facilities

in 6 countries

18

— distribution centres

5370

— employees on 12 markets

40

— product presence

• n over 40 markets
• Among the leading food and

beverage companies in the SEE region

• Founded in 1991
• Listed on the Zagreb

eb Stock

• ck Exch

change since 2007

• MCap (3/24/2016): EUR 353m

353m

• FY15 sales

es: EUR 711m

• FY15 EBITDA: EUR 75m

3

DEVELOPMENT OF ATLANTIC GRUPA

1 6 12 12 17 17 27 27 33 33 36 36 41 41 61 61 80 80 89 89 100 100 143 143 183 183 220 220 264 264 289 289 299 299 594 594 622 622 649 649 665 665 673 673 711 711

10 100 20 200 30 300 40 400 50 500 60 600 70 700 19 1993 93 19 1994 94 19 1995 95 19 1996 96 19 1997 97 19 1998 98 19 1999 99 20 2000 00 20 2001 01 20 2002 02 20 2003 03 20 2004 04 20 2005 05 20 2006 06 20 2007 07 20 2008 08 20 2009 09 20 2010 10 20 2010* 10* 20 2011 11 20 2012 12 20 2013 13 20 2014 14 20 2015 15

Sales es in EURm Rm

CAGR 1993 1993-2015: 2015: +31.2%

HISTO TORICA RICAL DEVE VELOPMENT OPMENT: : TRAC ACK RECO CORD RD IN VALUE LUE CREAT EATION ION

5

2010*: Pro-forma consolidated with Droga Kolinska

2005 2005-2015  2015: New energy ergy bars factory

• ry

 2010: Acqu quisi sition

• n of DROGA

A KOLI LINSK NSKA  Seve vera ral small-si size acquisi sitions

• ns

 2007: IPO  2005: Acqu quisi sition

• n of MULT

LTIPOWER 2000 2000-2004  Region egional expansi sion

• n

 2001: Acqu quisition

• n of CEDEVI

VITA 1990’s  Distri ribu bution

• n centres

res acros

• ss

s Croa roatia  Vari riou

• us

s distri ribu bution

• n coop
• pera

ration

• ns

DIST STRI RIBUTION DIST STRI RIBUTION N & PROD ODUCTION VERT RTICAL L INTEGRAT ATION

European an company any National ional company any Regio iona nal l compan any

MULTI TIPOWER CEDEVI VITA TA DROGA A KOLINSK NSKA

4,206

ATLANTIC GRUPA’S TRANSFORMATIONAL ACQUISITIONS

Cedevit ita a (2001) Multip ipowe wer Haleko eko (2005) Droga ga Kolins inska (2010)

Capability to successfully execute spin-off and turnaround and provide the acquired products with new markets and distribution channels Capability to successfully execute cross-border transactions in developed markets and entering new distribution channels (sport channel) Capability for successfully acquiring larger companies, utilizing leveraged structures and integrating complex businesses

6 CAGR 6.2%

59 101 20 40 60 80 100 120 2006 2015

Total revenues, EURm

4,000 8,000 12,000 2001 2015

Sales volume (tonnes), 2001 and 2015

Vitamin instant drink On the GO HoReCa 70 75 333 221 4.7 3.0

2005 2010 2015 2020

0.0 2.0 4.0 6.0 200 400 2010 2015

Atlantic Grupa - 2010 and 2015

EBITDA Net debt Net debt/EBITDA

10,208

CAGR 6.5%

RECENT CENT BUSINE NESS DEVE VELOPMENT OPMENT

7

New ener ergy gy bars factor ctory in in Nova va Gradiška  In-housing energy bars production (Nova Gradiška, Croatia) from outsourced production in Germany  Project with the total value of EUR 13 million, the largest individual investment in Atlantic Grupa’s history  Created 50 new jobs (160 planned in total)  Expected positive impact on the improvement in operating profitability of the SBU SFF, tax benefits and incentives expected over the project duration Acqu quisition tion of

• f Foodland d.o.o.

 Production of high-quality products under own brands Granny’s Secret et and Amfi mfissa ssa  Own production facility in Igroš, southern Serbia  Sales of EUR 6 million in 2015  Inter ernation

• nal expa

pansi sion

• n pote

tenti tial  Granny’ Secret with its palette of supreme quality products prepared in a traditional way meets both strategic goals: expanding the current brand portfolio with international potential and internationalization  Region gional expansion  Using the strength

• f

AG’s distribution network and infrastructure to increase distribution reach of brand Granny’s Secret across the region

ATLANTIC GRUPA TODAY

MANA NAGE GEMENT MENT TEAM AM AND D OWNERS ERSHI HIP STRU RUCT CTUR URE

Neven Vranković Vice President Corporate Affairs

Emil Tedeschi Founder / President of the Management Board

9 Free Free fl floa

• at:

38 38.0% (according to the Zagreb Stock Exchange, free float does not include: treasury shares, shares in sole

• wnership over 5%, unless

they are owned by pension funds)

Manag ageme ement nt Board Ownership hip struc ucture e as of March 28 28th

th 201

2015 ATLANTIC C GRUPA - THE BEST MANAGED COMPANY IN 2015

1st in CROATIA 2nd in the CEE region 1st in the FOOD & BEVERAGE sector in the CEE

Mladen Veber Senior Vice President Business Operations Zoran Stanković Vice President Finance Emil Tedeschi 50.2% Lada Tedeschi Fiorio 5.8% EBRD 6.0% Management 1.1% Croatian pension funds 25.7% Others 11.2%

• 11%

31% 34% 7%

• 38%

18% 48%

• 47%
• 3%
• 3%

3% 0%

• 18%

5% 16%

• 67%
• 1%

1% 2%

• 1%
• 15%

10%

• 80%
• 40%

0% 40% 2015 2014 2013 2012 2011 2010 2009 2008

ATGR-R-A Crobex Crobex10

PERFOR ORMA MANC NCE E ON CROA OATIA TIAN N CAPITA ITAL MARKE RKET

10

Avera rage ge price e / volume e of Atlanti tic Grupa pa's shar are Perfor

• rma

mance e on capit ital market et

Valuation

• n

2015 2015 2014 Last price e in report rting g peri riod

• d

832.9 940.0 Market capitalization

• n* (in HRK

K million

• ns)

s) 2,777.1 3,134.2 Avera erage ge daily turnove

• ver

r (in HRK K thousa sands) s) 380.1 299.5 EV (in HRK K millions

• ns)

4,457.7 5,064.3 EV/EB EBIT ITDA 7.9 8.5 EV/EBIT 11.0 11.5 EV/sa sales es 0.8 1.0 EPS S (in HRK HRK) 72.7 60.0 P/E P/E 11.5 15.7 *Closing price multiplied by the total number of shares

Average daily turnover

• n

ZSE increased by 27% in 2015 Stable shareholder structure DEG sold its’ ownership share Free float of 38%

1,000 2,000 3,000 4,000 5,000 6,000 600 700 800 900 1,000 1,100 1,200 Average price HRK Units

11

PORTF TFOL OLIO IO OVER ERVIE VIEW

11

BRAND NDS STRUCTU UCTURING NG

12

INTERNATIONAL

REGIONAL

LOCAL

DISTRIBUTION

STRENGTH OF DISTRIBUTION

• Developed network with 18

distribution centers

• Direct access on over 60,000 sales

points in SEE

• Over 1,000 delivery vehicles

BRAN ANDS DS STRU RUCTU TURING NG DISTR TRIBUT IBUTION ION

15

DISTRIBUTION ZONE WEST ZONE EAST

Leading Distributor of Multinational Brands Atlantic Grupa is one of leading distributors of high-quality top FMCG brands (both own and principal) in SEE

Portion

• f

brands within portfolio (in addition to own brands): Portion

• f

brands within portfolio (in addition to own brands): Portion of brands within portfolio (in addition to own brands):

CROATIA

 Established: 1991  Headquarter: Zagreb  Distribution centres: 4 (Zagreb, Rijeka, Osijek, Split)  Vehicles: 225  Warehouse space: 21,000 pal  Distribution coverage increased in HoReCa („Barcaffe-on-the go” at gas stations) Portion of brands within portfolio (in addition to own brands):

SERBIA

 Headquarter Belgrade  4 Distribution centres (Novi Sad, Belgrade, Čačak, Niš)  260 vehicles  13.920 m2 warehouse space  HoReCa channel - growth of installed espresso machines

SLOVENIA

 Headquarter Ljubljana  1 Distribution centre  Logistics: BTC  Distribution coverage increased in HoReCa („Barcaffe-on-the go” at gas stations)

MACEDONIA

 Headquarter Skopje  1 Distribution centre  95 vehicles  Storage: 2,580 m2  HoReCa channel – continuously strengthening

STRA RATE TEGIC GIC DISTR TRIBUT IBUTION ION UNITS ITS – ZONE NE EAST

16

The key Atlantic Grupa’s brands for the distribution in CIS are:

SDU CIS

 Russia and neighbouring countries (region of the Commonwealth of Independent States, CIS) are becoming increasingly important for the business development of Atlantic Grupa  This distribution unit is responsible for the distribution of all brands that have the potential to achieve above average growth in the market  Approximately 70% of products sold within this unit relate to brand Bebi, while the remaining portfolio includes Donat Mg, Multivita, Argeta, Multipower

STRATEGIC C DISTRIBU BUTIO TION UNIT ZONE WEST

 At Atlantic Grupa’s goa

• al is

is to to cont

• ntinue to

to increa rease se the prese sence nce in in intern ernationa

• nal mark

rkets  The marke rket entry ry strategy gy in in intern ernation

• nal marke

rkets is is based sed on

• n:

 Local market structures operating directly with the leading retail chains  Cooperating with long-standing distribution partners in

• rder to optimise the availability of products to consumers

The key Atlantic Grupa’s brands for the distribution in international markets are:

STRA RATE TEGIC GIC DISTR TRIBUT IBUTION ION UNITS ITS – SDU U CIS AND ZONE NE WEST

17

SALES PROFILE

GEOGR GRAP APHI HIC PRESENC ESENCE AND MACR CROEC OECONO ONOMIC MIC ENVIRO VIRONM NMENT ENT

 SEE region: Structural reforms and deleveraging underway  Internal devaluation caused by long recession increased competitiven ess of local production  Regional economic recovery in 2015  Outside of Russia, CIS and Serbia currencies remain stable  Atlantic Grupa’s re revenue st stre reams dive versi rsified with th new acquisi sitio tions:  Multipower (2005): exposure to Western Europe  Droga Kolinska (2010): regional diversification and greater exposure to Russia and CIS  Strategy going forth: to re reduce ce depe pendancy cy on

• n th

the SE SEE re region

• n

with growth coming from Western Europe and Russia/CIS

Key Takea eawa ways ys

19

GDP change, const.

• st. prices

2011 2011 2012 2012 2013 2013 2014 2014 2015F 2015F 2016F 2016F Croatia

• 0.3
• 2.2
• 1.1
• 0.4

0.8 1.0 Serbia 1.4

• 1.0

2.6

• 1.8

0.5 1.5 Slovenia 0.6

• 2.7
• 1.1

3.0 2.3 1.8 Germany 3.7 0.6 0.4 1.6 1.5 1.6 Russia 4.3 3.4 1.3 0.6

• 3.8
• 0.6

Unemp mploy

• ymen

ment rate 2011 2011 2012 2012 2013 2013 2014 2014 2015F 2015F 2016F 2016F Croatia 13.3 15.2 17.0 17.1 16.6 16.1 Serbia 23.6 24.6 23.0 19.7 20.6 21.8 Slovenia 8.2 8.9 10.1 9.7 8.7 8.1 Germany 5.9 5.4 5.2 5.0 4.7 4.7 Russia 6.5 5.5 5.5 5.2 6.0 6.5 CPI (avg) 2011 2011 2012 2012 2013 2013 2014 2014 2015F 2015F 2016F 2016F Croatia 2.3 3.4 2.2

• 0.2
• 0.4

1.1 Serbia 11.1 7.3 7.7 2.1 1.6 3.4 Slovenia 1.8 2.6 1.8 0.2

• 0.4

0.7 Germany 2.5 2.1 1.6 0.8 0.2 1.2 Russia 8.4 5.1 6.8 7.8 15.8 8.6 International Monetary Fund, World Economic Outlook Database, October 2015

Croatia 26.1% Serbia 23.2% Slovenia 15.8% Bosna and Herzegovina 7.1% Other regional markets 6.0% Key European markets 11.2% Russia and CIS 4.4% Other markets 6.2%

Sales es 2015 15 (EUR 711m) m) Sales es 201 2010 0 (EUR 302 302m)

Croatia 55.2% Serbia 5.7% Slovenia 7.6% Other regional markets 5.6% Germany, UK, Italy 14.9% Russia and EE 1.8% Other markets 9.2%

SALE LES PROFIL ILE E AND D BUSINES INESS ENVIRO VIRONM NMENT ENT

Key Key market et consi sidera erati tion

• ns

 Stable demand growth despite stagnation in

• verall

consumption  Rise in private label (convergence towards EU levels)  Demand for differentiated and innovative products  Retail consolidation  Reduced availability of shelf space  Strong competition from both local and regional FMCG players as well as large FMCG multinationals

20

Atlanti tic Grupa pa’s stren ength gths  Well diversified product portfolio – less revenue volatility and higher bargaining power  Constant product and marketing innovations (Cedevita on the go, Black’N’Easy etc.)  Strong regional distribution network – better access to shelf and HoReCa space  Even Even though key ey ma market et ca catego tegorie ies wer were sta stagn gnati ting or

• r falling

ing in in volume in in 2015 15, AG’s market et shares es were growin

• wing

AG BRANDS WITH SALES OVER EUR 15m in 2015 2015

Principal brands 19.7% Coffee 20.1% Beverages 12.3% Snacks 11.7% Savoury Spreads 10.0% Pharma and Personal Care 9.1% Sporst and Functiona l Food 14.2% Baby Food 2.9%

Sales es by segments ments 2015 15 (EUR R 711m) 1m) Sales es by brands 2015 15 (EUR R 711m) 1m)

Own brands 65.3% Principal brands 19.7% Private label 8.8% Farmacia 6.2%

HISTO TORICA RICAL DEVE VELOPMENT OPMENT OF KEY EY FINAN ANCIA CIAL L INDICA ICATO TORS

21

594 594 622 622 649 649 658 658 673 673 711 711 520 540 560 580 600 620 640 660 680 700 720 Pro forma co cons s 201 2010 20 2011 11 20 2012 12 20 2013 13 20 2014 14 20 2015 15

Sales, EUR milli lions

• ns

11.8% 11.1% 11.5% 12.0% 11.8% 10.5% 6.2% 7.5% 8.2% 8.6% 8.7% 7.5% 2.8% 1.5% 2.3% 4.0% 4.2% 4.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Pro ro f forma ma cons ns 2 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015

Margin in overview ew

EBI BITD TDA A margin EBI BIT T margin Ne Net t pro rofit/ t/loss

• ss margin

4.7 4.8 4.8 4.2 3.5 3.2 3.0

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Pro ro form rma co cons s 20 2010 20 2011 11 20 2012 12 2013 20 2014 14 20 2015 15

Net debt/EBIT BITDA

11.3% 4.7% 7.6% 12.7% 12.4% 13.1% 11.8% 9.4% 10.4% 11.7% 12.7% 12.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Pro ro fo form rma cons

• ns

2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015

ROaE, ROCE

RO ROaE RO ROCE

FINANCIAL OVERVIEW

FINAN ANCIAL CIAL OVERV ERVIE IEW 2015 (1/2)

ROaCE is calculated as EBIT/(Average (Total Equity+LT debt-Cash))

Highl hlight ghts s from

• m 2015 resu

sults: s:  Sales growth in all regional markets (Croatia, Serbia, Slovenia, Bosnia and Herzegovina and Macedonia), due both own brands and principal sales growth, which confirmed the position of Atlantic Grupa as a leading distributor in the region.  Decline in sales in Russia and CIS markets primarily due to strong rouble depreciation and political instability in Ukraine.  EBITDA lower by 5.0% due to restructuring costs in the Sports and functional food segment, the consolidation of the acquired company Foodland, the decrease of sales and pressure on profit margins in CIS countries, the investments in setting up the distribution companies in Germany and Austria, and the increase in costs of some of the main raw materials.  Continued deleveraging: net debt repayment amounted to EUR 32.9m with net debt/EBITDA of 3.0 as at 31 December 2015.  In 2015 Atlantic Grupa finished the construction of new energy bar factory in Nova Gradiška with the total value of the investment of EUR 13m.  The regional business environment was marked with Agrokor’s acquisition of Mercator, which resulted in entrance of the entire portfolio of Atlantic Grupa (including Argeta and Barcaffe) in Konzum’s stores.  Costs of production materials increased by 10.9% in 2015, primarily as a result of the increase in prices of raw coffee (14% to 29% higher average coffee prices comparing to 2014). By continuous hedging, in 2015 Atlantic Grupa reduced the effects of higher prices

• f raw coffee.

23

EURm 2012 2013 13 2014 14 2015 15 2015/ 15/ 2014 14 Revenues 665 663 680 717 5.5% Sales 657 658 673 711 5.6% EBITDA 74 78 79 75 (5.0%) EBIT 53 56 58 53 (8.3%) Net profit 15 26 28 32 13.6% EBITDA margin 11.3% 11.8% 11.7% 10.5%

• 117 bp

EBIT margin 8.1% 8.5% 8.6% 7.5%

• 114 bp

Net profit margin 2.3% 4.0% 4.2% 4.5% +32 bp ROaA 2.1% 3.9% 4.1% 4.6% +47 bp ROaE 7.6% 12.7% 12.4% 13.1% +66 bp ROaCE 10.4% 11.7% 12.7% 12.5%

• 26 bp

FINAN ANCIAL CIAL OVERV ERVIE IEW 2015 (2/2 /2)

24

FCF: CFO before interest paid increased by CFI

Equit ity and liabiliti ties es structu cture December 31st

st 2015

15

64 67 50 57

9.9% 10.2% 2% 7.4% 8.5%

0% 2% 4% 6% 8% 10% 12% 20 40 60 80

2012 2013 2014 2015

FCF* (EURm) m), FCF/S /Sales es ratio io

FCF (EURm) FCF/SALES

(in EUR millions

• ns)

2012 12 2013 13 2014 14 2015 15 Net debt 310 271 254 221 Total tal asse ssets ts 678 669 694 697 Tota tal Equit ity 192 220 231 256 Current ratio 1.8 1.8 1.5 1.3 Gearing ratio 61.7% 55.2% 52.3% 46.3% Net debt/EBITDA 4.2 3.5 3.2 3.0 Interest coverage ratio 2.6 3.7 4.7 5.5 Capital expenditure 10 13 25 15 Cash flow from operating activities 39 55 59 62 Dividend payment for the year

• 4.0

4.6 5.3

Other liabilities 5.9% Capital and reserves 36.3% Trade and other payables 19.5% Bond 2.1% Short term borrowings 12.3% Long term borrowings 23.9% 2-5 years 52.0% 1-2 years 48.0%

Debt repayme yment sched edule December 31st

st 2015

15

PERFOR ORMA MANC NCE E BY SBUs s AND SDUs Us IN 201 2015

25

* Other segments include SDU HoReCa, SDU CIS, BU Baby Food, DU Macedonia and business activities not allocated to business and distribution units (headquarters and support functions in Serbia, Slovenia and Macedonia) which are excluded from the reportable operating segments. ** Line item “Reconciliation” relates to the sale of own brands which is included in the appropriate SBU and BU and in SDUs and DUs through which the products were distributed.

Sales es (in EUR 000) 0)

2015 2015 2014 2015/2014 SBU Bevera verage ges 87,641 85,176 4.3% SBU Coff ffee 142,753 136,891 5.7% SBU (Swee eet and Salted) Snacks 83,099 81,923 2.8% SBU Savour

• ury

y Spre reads ds 70,820 62,851 14.2% SBU Sport

• rts and Functiona
• nal

Food

• d

101,109 103,877 (1.4%) SBU Pharma and Perso sonal Care re 67,055 65,779 3.3% SDU Croa

• atia

123,462 112,567 11.1% SDU Serbi rbia 154,618 144,420 8.5% SDU Intern ernation

• nal mark

rket ets 77,620 77,657 1.3% DU Sloven

• venia

100,246 96,732 5.0% Other her segm gments* 102,639 109,401 (4.9%) Reconc

• nciliation
• n**

** (399,838) (394,823) n/a Sales es 711,225 682,450 5.6%

EBITDA A (in EUR million

• ns)

s)

2015 2015 2014 2015/2014 SBU Bevera erage ges 20.6 16.7 23.4% SBU Coffe ffee 27.8 29.7 (6.4%) SBU (Swee eet and Salted) Snacks 12.9 13.0 (0.6%) SBU Savour

• ury

y Spre reads ds 13.1 13.9 (6.0%) SBU Sport

• rts and Function
• nal

Food

• d

(1.5) 2.1 (171.1%) SBU Pharma and Perso sonal Care re 5.6 6.4 (12.7%) SDU Croa

• atia

3.1 2.0 48.9% SDU Serbi rbia 4.2 3.7 11.9% SDU Intern ernation

• nal mark

rket ets 0.6 1.9 (71.1%) DU Sloven

• venia

5.5 4.8 15.7% Other her segm gments* s* (17.2) (15.8) 8.9% Group

• up EBITDA

74.6 78.6 (5. 5.0%)

STRATEGIC GUIDANCE

GUIDANCE NCE TRACK K RECORD

27

 Atlantic Grupa listed on the Zagreb Stock Exchange on 19th of November 2007 Since 2008 Atlantic Grupa publishes guidance for the following financial year and delivers it

100 200 300 400 500 600 700 800 2008 2009 2010 2011 2012 2013 2014 2015

Sales (EURm)

99% 103% 99% 98% 98% 102% 102% 93%

Reported Guidance

10 20 30 40 50 60 70 80 90 2008 2009 2010 2011 2012 2013 2014 2015

EBITDA DA (EURm)

100% 101% 98% 102% 101% 96% 100% 98%

Reported Guidance

10 20 30 40 50 60 70 2008 2009 2010 2011 2012 2013 2014 2015

EBIT (EURm)

104% 95% 99% 104% 101% 96% 100% 97%

Reported Guidance

STRA RATE TEGIC GIC GUIDA DANC NCE FOR 2016

28

Strate ategi gic managemen ent t guidan ance e

 Focus on: (i) stronger internationalisation of brands with international potential (Multipower, Argeta, Donat Mg, Bebi, Cedevita, Granny’s Secret), (ii) strengthening the position of regional brands (Cockta, Cedevita, Smoki, Grand Kafa, Barcaffe, Najlepše želje, Chipsos), (iii) active development of the regional HoReCa portfolio, and (iv) further restructuring of the business unit sports and functional food.  Special efforts will be placed into listing and positioning of own brands into retail channel in Germany and Austria and on marketing activities on those markets.  The management of Atlantic Grupa in 2016 expects lower average prices of raw coffee in the global commodity markets and an unfavourable effect of the EURUSD exchange rate that management plans to largely annul by active hedging, continuous cost management and business processes optimisation.  Additional pressures on operations arise from discontinuation of cooperation with the biggest private brand buyer in Sports and functional food (with whom was in 2015 realized 350 HRK millions annual sales), continuation of crisis in Russia and Ukraine and further depreciation of rouble.

In 2016, we expect capital expenditure in the amount of around EUR 20 million. The expected effective tax rate in 2016 should be at the level of the statutory tax rate for Croatia.

(in EUR million

• ns)

s) 2016 16 Guidance ce 2015 2016/2015 Sales es 711 711 711 (0.1%) EBITDA 63 63 75 (16.3%) EBIT 41 41 53 (23.3%) Inte terest est expense se 13 13 14 (5.4%)

BUSINESS INESS RISK MANA NAGEM GEMENT NT

29

Risk sk Descr cripti ption

• n

Effects ts / Manageme ment Macr cro

• outl

tlook

• ok in key countri

tries es

 Key SEE markets have been in recession for

several years with personal consumption under the influence of poor situation in the labour markets and deleveraging

• f

households

 Non-cyclical key categories

• Planned reducing dependancy on the SEE

region with expansion in the Western European markets (acqusitions) and CIS and Russia (organic growth)

Retail consoli solidati tion

• n and private

label Globa bal compe peti titi tion

• n

Currency cy and commod modit ity y risk

 Continous retail consolidation is underway,

most significantly Agrokor – Mercator combination which puts pressure on the local FMCG producers

 Atlantic is one of the largest regional producer

with the largest portfolio of “essential” brands

• Increase
• f

bargaining power with new principals/own brands portfolio expansion (e.g. Unilever distribution contract)

 Larger global competitors have lower cost

production, globally established brands and bigger marketing firepower and in the future will focus more on Eastern Europe

 Atlantic’s

brands are household names comanding much larger brand awareness

• Tactical acquisitions aimed at niche products

with premium positioning

 Volatile currencies (RUB and RSD) present

large risks to Atlantic and its EUR based investors

 Substantial commodity risks with key raw

materials (coffee, sugar)

 Atlantic ultilises available risk management

tools (forward contracts for commodities), but for some risks (RUB, RSD) hedging is too expensive

STRA RATE TEGY GY

30

HIGHLIGHTS

 With continuous deleveraging and Net debt/EBITDA at the 3.0x level, the company is set for new acquisitions  Key aim: reduce dependancy in the SEE region and strengthen foothold on the WESTERN EUROPEAN markets (Germany, Austria, Switzerland, UK, Italy, Sweden, Spain, France)

TARGETS

 WESTER ERN EUROPE (primarily): 1. Branded business within the FMCG industry 2. Distributor with wide-spread distribution network (aim: finding distribution channel for

• wn brands with international potential)

 REGION: 1. Branded business with premium products that have international potential 2. Regional companies that will further strenghten market position in the regional categories (e.g. coffee, snacks)

HIGHLIGHTS

 Active brand management with emphasis on: 1. Strengthening the position of regional brands and constant innovation 2. 2. Incre creasing pl place cement

• f
• f

br brands with th inter ternatio tional pote

• tentia

tial

• n
• n

th the inter ternation

• nal

markets ts  Strengthening the regional distribution through extension

• f the principals’ brands portfolio

 Active development of the regional HoReCa segment with a portfolio that covers '24/7 consumer needs' and

• ther sale channels (online, etno channel)

 Cost management and optimisation of business processes

• n

all

• perating

levels aimed at improving operating efficiency  Active monitoring of trends and hedging the price

• f raw coffee and other raw materials

 Regular settlement of existing financial liabilities with an active management of debt and financial expenses  Prudent liquidity management and deleveraging

M&A FOCUS ORGANIC FOCUS

SUMMARY RY SHORT RT-TER ERM: M:

• M&A financing
• Investments

required for international expansion LONG-TERM ERM:

• Multi

tination

• nal

compa pany y with STRONG PROFITABLE E GROWTH and at least st 1/3 of sales es coming g from Inte ternati tion

• nal

markets ets

BUSINESS UNITS

SBU COFFEE

SBU U COFFEE EE

STRENGTH OF TRADITION

• Barcaffè - over 45 years of tradition

in Slovenia

• 8 out of 10 Slovenians drink Barcaffè
• Grand kafa - over 15 years brand

No.1 in Serbia

33

SBU U COFFEE FEE

34

20.1 %

— share in sales

EUR 143m

— sales in 2015

• No. 1 in Turkish

ish coffee in Serbia, Slov

• venia,

ia, B&H and Mace cedon

• nia

SBU SAVOURY SPREADS

ARGETA & MONTANA

delicious meal for all

• ccasions
• Manufacturer of high quality food

brands – Argeta savoury spreads, and Montana sandwiches with extended freshness SBU U SAVOUR URY SPREA EADS

36

SBU U SAVOU VOURY RY SPREAD EADS

37

10.0 %

— share in sales

EUR 71m

— sales in 2015

• No. 1

SPREADS BiH│ Slovenia │ Austria│Macedonia

• No. 2

SPREADS Switzerland│Serbia│Croatia 6th strongest FMCG brand in the region. Sold in 33 countries.

• No. 1

SPREADS BiH│ Slovenia │ Austria│Macedonia

• No. 2

SPREADS Switzerland│Serbia│Croatia

BU GOURMET

GRANNY’S SECRET

• Produced at the base of Mount

Kopaonik, protected ecological area

• Hand picked fruits and

vegetables specially treated at very low temperatures in order to preserve all the nutrients BU BU GOURM RMET ET

39

BU GOURM RMET ET

40

Products for true connoisseurs

• 100% natural, finest grown

and wild fruits and vegetables without preservatives, artificial colors or aromas

• Present in over 20 markets

worldwide

• CATEGORIES: Ajvar (Roasted

Red Pepper Spreads), Fruit Jams and Coulis, Fruit and Vegetable Juices

0.8 %

— share in sales

EUR 6m

— sales in 2015

SBU SNACKS

SBU U SNAC ACKS

LEADING FMCG BRANDS IN THE REGION

• 27,320 tonnes of snacks produced in

2015

• Flips No.1 in Serbia, B&H and Slovenia
• No.1 chocolate bars and wafers in

Serbia

• Over 1 million fans on Facebook

42

SBU U SNAC ACKS

43

Created in 1972, the first flips produced in SEE, Smoki has become the generic word for a group of flips products. A delightful dessert offers a wide selection of flavours and shapes. The famous soft chocolate foam dessert, first of its kind in the SEE region, is a product with more than 75 years of tradition. Biscuits and wafers that marked the youth of many generations.

11.7 %

— share in sales

EUR 83m

— sales in 2015

• No. 1

SERBIA Flips│ Chocolate bars│ Wafers CROATIA, SLOVENIA, BiH Flips│

• No. 2

SERBIA Chocolate tablets│Biscuits│Sticks

SBU SPORTS AND FUNCTIONAL FOOD

MULTIPOWER

Leading brand in Europe

• Production, R&D and sales of sports and

functional food and healthy food

• Leading brand of sports nutrition in

Europe and No.1 in dietetic products category in Germany

• Over 38 years of tradition

SBU U SPORTS RTS AND D FUNCTIONA CTIONAL FOOD

45

SBU U SPORT RTS AND D FUNCT CTIONA IONAL FOOD

46

14.2 %

— share in sales

EUR 101m

— sales in 2015

• No. 1

Sports food in Europe.

SBU BEVERAGES

SBU U BEVERA VERAGES GES

SALES BY CATEGORIES

48

SBU U BEVERA VERAGES GES 49

A cola drink that was born different 60 years

• ago. Unique blend of 11 herbs and aroma of

dog rose. During its 40 years became synonym for the healthy multivitamin refreshment in the region. A natural multifunctional mineral water with a high level of magnesium and clinically proven effect.

12.3 %

— share in sales

EUR 88m

— sales in 2015

• No. 1

Vitamin instant drink in Croatia, Slovenia and Serbia

SBU PHARMA AND PERSONAL CARE

HEALTH AND BEAUTY CARE

• Encompasses 3 complementary activities:

I. Farmacia pharmacy chain II. Food supplements and OTC products (Fidifarm and Dietpharm) III. Cosmetics (Neva)

SBU U PHARMA AND PERSONA NAL L CARE

9.1 %

— share in sales

EUR 67m

— sales in 2015

Croatia’s largest private chain of pharmacies and specialised shops for medicines and food supplements. Plidenta toothpaste has maintained its leading position

• n the Croatian market.

An original Croatian universal cream. Renowned Croatian brand in the cosmetics. The leading regional producer of food supplements and vitamin products.

51

Pharma ma Personal care

• No. 1

CROATIA Lip care│ Food supplements│ Dental care SERBIA and B&H Food supplements│

• No. 2

CROATIA Body care│ SERBIA Lip care│

SBU U PHARMA AND PERSONA NAL L CARE

52

BU BABY FOOD

BEBI - FROM THE FIRST DAY OF LIFE

• No.1 in category of baby

cereals in Ukraine

• No.1 in baby biscuits category

in Lithuania

BU BABY BY FOOD

54

BU BABY BY FOOD

55

2.9 %

— share in sales

EUR 20m

— sales in 2015

Atlantic Grupa d.d. Miramarska 23 10000 Zagreb, HR T +385 1 2413 145 F +385 1 2413 901 ir@atlanticgrupa.com