Podravka Group Business Results for 2008

The highest organic growth recorded in the last nine years

• The sales of Podravka brands totalled 2,456.7 million HRK and is 206.1 million HRK higher recording a sales growth of 9%, which is the highest growth of Podravka brands in past nine years. The 9% growth of Podravka brands was realised on both the Croatian and foreign markets
• The total sales of the Podravka Group in 2008 amounted 3,660.0 million HRK which is a 7% increase compared to the year before
• The Strategic Business Area (SBA) Food and beverages achieved a 4% sales growth, while the SBA Pharmaceuticals grew 19%
• The operating profit increased by 66.2 million HRK and amounted 158.5 million HRK
• The net profit of the Podravka Group was 44.6 million HRK representing a significant growth compared to the year 2007
• Total capital investments were 403 million HRK

In the year 2008, the Podravka Group achieved sales revenue in the amount of 3,660.0 million HRK, which is a 228,2 million HRK higher revenue than the year before. The net profit of the Podravka Group in 2008 totalled 44.6 million HRK which is a significant growth compared to the year 2007 when a profit of 18.3 million HRK was recorded.

Sales of the SBA Food and beverages totalled 2,924.5 million HRK which is a 4% growth compared to the year before, resulting from increased sales of the following product groups: Podravka dishes (11%), Meat products and canned fish (13%) and Beverages (19%).

The SBA Pharmaceuticals achieved sales revenue in the amount of 729 million HRK which is a 19% growth compared to the year 2007.

Sales growth of the SBA Pharmaceuticals on the market of Croatia was 5% generated by the growth of both prescription (3%) and non-prescription drugs (6%) sales. According to the ATC classification the most significant sales growth on the market of Croatia in the prescription drug product group was achieved by drugs for infection system treatment (23%), while OTC drugs recorded the most significant increase (10%) in the non-prescription group. The SBA Pharmaceuticals achieved a 62% growth on foreign markets, mostly contributed by the sales growth on the market of Bosnia and Herzegovina (275%). Growth on the market of Bosnia and Herzegovina resulted from the sales of Farmavita but a 9% organic growth is also evident.

All product groups within the Podravka brands recorded a sales growth compared to the year 2007.

The sales growth of the Podravka dishes product group of 11% resulted from 9% higher sales on the domestic market and 12% higher sales on foreign markets. The most significant growth of Podravka dishes on foreign markets was recorded on the market of Central Europe in the amount of 18%, having the highest contribution from the Czech market - 17% based on the growth of Rice and legumes by 18%.

Apart from the market of Central Europe a strong sales growth was recorded on the market of South-East Europe (11%), mostly contributed by the markets of Serbia (20%) and Bosnia and Herzegovina (8%).

The product group Food seasoning achieved a sales growth of 4% mainly from the sales growth on both the Croatian market (3%) and foreign markets (4%).

Sales growth on foreign markets is primarily accounted for by the sales growth of the Warzywko brand on the Polish market (88%), which is Podravka's most significant market in the Food seasoning product group.

The Meat products and canned fish product group achieved a sales growth of 13% generated by the sales growth on both the Croatian (8%) and foreign markets (24%). The total growth of this product group results from a strong sales growth of canned fish of 29%, but also a significant 7% increase of the sales of meat products. Podravka's canned fish brand - Eva achieved a sales growth of 16% on the Croatian market, while on foreign markets the growth was 35%. Foreign markets that recorded a significant growth of Eva canned fish are Bosnia and Herzegovina (32%), Slovenia (94%), Montenegro (37%) and Serbia (12%).

The sales growth of the Baby food, sweets and snack product group of 7% was accounted for by a sales growth on both the domestic market (7%) and foreign markets (7%). The sales growth on foreign markets is based on the sales growth on the markets of Bosnia and Herzegovina (15%) and Serbia (8%). The highest growth within the Baby food, sweets and snack product group was recorded by baby food (9%), sweets (5%) and cereals (21%).

The highest relative sales growth in the year 2008 was achieved in the product group Beverages in the amount of 19% based on the sales of the Lero brand. The Beverages product group achieved sales growth in the amount of 19% on the domestic market, while the sales growth on the market of Bosnia and Herzegovina was 22% based on strong sales of the Studena ice tea category.

Investments of the Podravka Group in 2008 totalled 403 million HRK of which 137.4 million HRK were invested in capital investments and investment maintenance and the remaining part was invested in the purchase of brands and acquisition of allied companies.

Download

• Podravka Group Business Results for 2008.
• Notice of Supervisory Board of Podravka Inc. Meeting