Podravka Group business results for 2006

In 2006 Podravka realized total sales revenues amounting to HRK 3,467.5 million. In spite of the partial discontinuation of distribution of Nestle products for the markets of Serbia and complete discontinuation for markets of Bosnia&Herzegovina and Macedonia, total sales revenues of Podravka Group are higher than the year before, which is mostly attributed to organic growth. The highest growth was marked in the market of Serbia (24%). Average annual sales growth from 2002 to 2006 in foreign markets is 6.7%, and 5.5% in Croatian market, which makes an average yearly growth of 6% in the observed period.

Net profit for 2006, without restructuring costs, is HRK 106.2 mil., which is 52% increase compared to 2005.

In the sales structure SBA Food&beverages participate with 83% while SBA Pharmaceuticals carries 17%.

Looking at markets, 54% of total revenues of Podravka Group is realized in Croatian market, still the most significant market for Podravka, while the remaining 46% is realized in foreign markets. Share of individual markets in the total sales revenue is the highest for the market of South-East Europe (22.5%), followed by market of Central Europe (12.5%), Western Europe, overseas countries and the Orient (6.4%) and market of Eastern Europe (4.4%). Worth mentioning is the highest growth in the market of Eastern Europe, and it was 12%.

Per product groups the highest growth of 7% marks the group "Children’s food, sweets and snack". Sales growth was also marked in the category Meat and meat products (5%), Podravka dishes (4%), Fruit and vegetables (4%) and Beverages (1%), while the category Food seasonings remained at last year’s level. 3% drop was also marked in the Commercial goods category, due to a partial discontinuation of a distribution contract for Nestle products.

New products launched in 2006 were Čokolino MAXI and Čokolino Crunch cereals, Čokolino chocolate cream spread, Vegeta liquid stock for Australian market, Lino baby food with prebiotic, Podravka tortilla chips and other.

Last year’s activities particularly worth mentioning is the purchase of EVA – tinned fish brand, where Podravka for the first time decided to purchase only one brand, not the entire company. Restructuring process for non-basic activities, rationalization of internal processes in sales, distribution, marketing, production and administrative functions also continued. In the last year Podravka won Superbrand title in Slovakia, while Vegeta brand won that same title for the second time in a row for Russian market.