Business results of the Podravka Group for 2002

At today’s meeting, the Supervisory Board of Podravka approved the revised financial reports on the business operations of the Podravka Group in 2002.

The Podravka Group operated successfully in 2002, achieving the growth and development goals as outlined in its strategy. Growth was achieved by increasing own sales (organic growth), through strategic partnerships (Nestle), and through the acquisitions of food companies in the region (Ital-Ice in Croatia, Lagris in the Czech Republic and the Republic of Slovakia). It is also significant that Podravka’s meat processing industry, Danica, achieved positive business results, in spite of severe circumstances (cattle disease).

The Podravka Group realised total revenue to the amount of HRK 2,929.9 million, representing an increase of 10% compared to 2001.
Revenues from sales in 2002 amounted to HRK 2,746.8 million and are 8% higher than those in the previous year. A growth of 8% was achieved on the Croatian market over the previous year, with sales reaching HRK 1,520.8 million, while foreign sales were 9% higher than in 2001, amounting to HRK 1,226.0 million.

In 2002, the Podravka Group recorded an operating profit of HRK 160.6 million, marking a 36% growth over the previous year. Net profits amounted to HRK 108.5 million, giving a 75% increase over the net profits made in 2001.

The highest individual growth in sales was achieved in the beverages segment – Studenac and Studena brands – with 39% higher sales than the previous year. This growth in sales is far above the growth as a whole in the market of bottled water in Croatia. Growth in sales was also recorded in other segments, such as Lino Kviki and Dolcela, which grew by 3% over 2001. Podravka Dishes (Soups, Semi-cooked meals…) also recorded a 3% growth, mill and bakery products achieved a 28% growth, and Podravka’s meat processing industry recorded a 4% growth over the previous year. Growth has also been achieved in the fruit and vegetables programme (4%), pharmaceuticals and cosmetics (1%), while the sales of Vegeta experienced a 2% decline in comparison with the previous year. The growth in sales of commercial goods (87%) is due to the sales of Nestle products, as well as goods produced by Kraš, Adria and Heinz.

The markets of the Czech Republic, Slovakia and Hungary recorded a 30% growth over 2001, which is partly the result of acquisitions – Lagris in the Czech Republic and Slovakia. On the Croatian market, a growth in sales of 8% was recorded, while on the markets of Southeast Europe, sales grew by 20%. A 16% growth in sales was recorded on the markets of Eastern Europe, while in Poland, Romania and the Baltic States sales were 13% lower. On the markets of Western Europe and overseas counties, sales dropped slightly (1%) in comparison to the previous year.

In 2002, Podravka’s meat processing industry, Danica, had positive business results, and the position of Podravka on the markets of Southeast Europe was strengthened by the partnership with Nestle, the largest food company in the world. By buying Lagris, Podravka expanded its range of products on the markets of the Czech Republic and Slovakia, and it can be expected that Lagris products will also soon be present on other markets covered by Podravka. By issuing commercial notes to the value of 150 million, Podravka lowered the costs of financing business activities. The construction of a new factory for Podravka Dishes has begun, which will allow for the reduction of production costs, as well as for an expansion in the product range.