Revenue Growth in all Segments of the System that has Become Fortenova Group as of 1 April 2019
Apr 12, 2019
Since 10 April 2017 the Extraordinary Administration of Agrokor has prepared and published 24 monthly reports outlining the economic and financial situation within the Agrokor Group and reporting on the realization of operating activities and overall operations of Agrokor d.d. and its 16 operating companies in three business segments: Retail and Wholesale, Food and Agriculture. This report pertains to the period from 11 March to 1 April 2019, given that as of that date the Fortenova Group has become operational.
Revenues and EBITDA exceeding the budget are the main feature of Agrokor Group operations, with actual revenues of HRK 3.1bn and EBITDA of HRK 71m or HRK 50m higher than planned. All business segments have recorded revenue growth.
The Retail and Wholesale segment generated HRK 1.8bn in revenue, outperforming the budget by 1.3 per cent. Revenue growth combined with higher relative gross margin and lower costs resulted in EBITDA and EBITDA margin exceeding budgeted values.
Along with higher-than-planned revenues, the Food segment saw an increase in EBITDA of 22.7 per cent. Operating profit performance was better than planned as a result of improved operating efficiency, cost control implementation and higher sales revenues. The quality mix of sales and marketing activities and improved operating efficiency had a positive effect on the Frozen Food and Edible Oil segments, generating higher-than-planned EBITDA. The Meat and Drinks segments had slightly lower-than-planned EBITDA. Both cumulative EBITDA and sales revenues in the Food segment were better than planned for the first two months of the year.
EBITDA in the Agriculture segment grew by as much as 41.4 per cent, while revenue increased by 25.1 per cent. Revenue growth was accounted for by higher revenues in sales of cereal and oil crops, fattening cattle, ABC cream cheese and in the animal feed segment, while EBITDA generation exceeded budget due to higher sales revenue, operating cost control and synergic savings made in raw material and production material costs.
The most significant event of the reporting period is the Fortenova Group having become operational as a result of the successful implementation of the Settlement between Agrokor's creditors that comprised a financial and ownership restructuring plan for the company that found itself on the verge of bankrupcy two years ago due to the inability to meet its liabilities. By applying the Act on Extraordinary Administration Proceedings in Companies of Systemic Importance for the Republic of Croatia, the Extraordinary Administration Procedure over Agrokor was opened on 10 April 2017. Over the course of the Procedure the operations of all companies within the system, as well as those of their suppliers and business partners, were stabilized and improved.
Following successful negotiations, the creditors were able to close a Settlement Plan which has become final and non-appealable in October 2018 and hence as of 1 April 2019 the business unit was transferred from Agrokor to Fortenova Group. The weekend preceeding that date saw the successful implementation of a number of extremely demanding activities at the operating companies that enabled those companies to continue their regular business, some of them under new names, within the scope and under the ownership of the new Group.
The new parent company Fortenova Group has commenced its work on the market featuring a new visual identity (www.fortenovagrupa.hr). While the name Fortenova Group stands for the new strength that the company wants to channel into building new, healthier relations to provide new value to its employees, shareholders and customers, as well as all other stakeholders, the Group's colors and logo suggest the key elements of that new strength.
At the same time, on 1 April 2019 a Depositary Receipt Holders' Meeting was held in Amsterdam with Holders of 168,300,328 Receipts issued by Fortenova Group STAK Stichting attending, representing 63.76 per cent of the total number of issued Depositary Receipts with voting rights. All decisions were adopted with a vast majority of votes attending, including those on appointing the members of the Fortenova Group Board of Directors.
The Board of Directors elected Maksim Poletaev as President and Miodrag Borojević as Deputy President of the Board of Directors, while Daniel Boehi, Paul Foley, Julian Michael Simmonds, Sergei Volk and Kelly Griffith are Non-Executive Members of the Board of Directors. Fabris Peruško is Executive Member of the Board of Directors. Executive Directors of the Fortenova Group were elected as well, with Fabris Peruško as Chief Executive Officer (CEO), Irena Weber as Deputy CEO and Chief Operating Officer (COO) and Vladimir Bošnjak as Chief Financial Officer (CFO).