Fortenova Group’s 2021 total consolidated revenue from continuing operations amounted to HRK 31.4 billion, with consolidated adjusted EBITDA in the amount of HRK 1,955 million and a net profit of HRK 523 million after the gain on the sale of the Frozen Group. The Group closed the year with HRK 1,872 million in cash on its accounts.
These results equate to a growth of consolidated revenue from continuing operations of 65 percent and adjusted consolidated EBITDA growth of 52 percent vs 2020. The main driver of the consolidated results performance is due to Mercator Poslovni Sistemi, being consolidated into Fortenova Group’s results as of May 1st, 2021.
Compared to the 2020 year-end results, the 18 companies from the Group’s core business, excluding the Frozen segment that has been sold and including full year of Mercator Group companies, recorded on a like-for-like basis a revenue growth of 5 percent, an increase in EBITDA of 20 percent, and an increase in EBIT of 64 percent.
These positive growth trends have continued in 2022 and in Q1 2022 our 18 companies from the Group’s core business realized on a like-for-like basis higher net sales revenues by 6 percent, higher EBITDA by 2 percent and higher EBIT by 6 percent, compared to Q1 last year.
„We had very strong performance last year and in the beginning of this year with the key achievements being Mercator’s refinance, transfer and integration along with immediate delivery of planned synergies, closing of Frozen segment sale and resulting deleveraging in Q3 ‘21 as well as significant operational improvements and a good summer season. As a result, our net profit of HRK 523 million shows an improvement of HRK 1.8 billion compared to 2020 and our cash position remains very strong, with HRK 1.9 billion at the end of 2021.
We can look back at a really excellent year, in terms of the results and strengthened capital and financial structure that have set the foundations for continued growth. All activities that we have pursued were aimed at increasing our value as well as Fortenova Group’s overall corporate and social responsibility, in the sense of impact we have on the economies across the region as this region’s largest employer.
I am especially proud of the fact that everything that we have done has also resulted in meeting one of our most important goals – raising the investment strength of Fortenova Group, which is now in the position to pursue a regional investment cycle worth over EUR 130 million in ‘22. All our investments are focused on more sustainable and more efficient operations, so that they can further build on their leading positions. I would also like to emphasize that in addition to all of that, in 2021 we have set very ambitious ESG objectives and have prepared our first Sustainability Report, which will be published in the coming days” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, summarizing the key features of the 2021 operations.
James Pearson, Fortenova Group’s Chief Financial Officer, said that “We continue to deliver on our planned financial strengthening and simplification of the Group. Through the transactions dealing with Mercator, Frozen Group as well a number of non-core and real estate sales we reduced debt in 2021 by HRK 4.4 billion which led to an underlying leverage ratio of 4.3x at year end. This is a significant decrease from the 6.8x leverage ratio we had at the beginning of the year and demonstrates the great step we have taken.
The results are also a testament to ability and great resilience of the Group’s employees. Despite covid, earthquakes, supply chain pressure, inflation etc they continue to deliver whether improving customer service, improving existing offers or developing new ones all of which is all leading to the reported results.” – Pearson said.
Fortenova Group, now reporting with Mercator consolidated from 1st May 2021, and also benefiting from improved trading condition vs H1/2020, recorded a consolidated revenue from continuing operations increase of 35 per cent. In addition, H1/2021 adjusted consolidated EBITDA was 14 per cent higher, and the Group recorded a net profit in the amount of HRK 318 million vs a loss in H1/2020. At the end of H1/2021 the Group also had more than HRK 1,8 billion of cash on its accounts so maintaining its strong liquidity position. These were the key highlights of Fortenova Group’s half-year results presentation to its depositary receipt holders.
“With consolidated revenues from continuing operations of HRK 12 billion, adjusted consolidated EBITDA of HRK 1.1 billion and HRK 318 million of net profit we can proudly say that behind us is the best first half of the year ever, not only in terms of performance, but also in terms of several major projects having been closed, which have placed the Group on track in terms of strengthening its profitability. First and foremost of these is business integration of Mercator and its consolidation into our financial statements from 1 May 2021. Given the excellent tourist season, the Group is continuing to trade strongly in Q3, and this along with the synergies that we are achieving in Retail, and the expected closing of the Frozen Food Business Group sale to Nomad Foods will mean that the Fortenova Group’s financial position will continue to improve” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, commenting on the results achieved in H1/2021.
When it comes to non-consolidated results of the core businesses pertaining to 21 companies in the Retail, Food and Agriculture divisions of Fortenova Group, the total generated net sales revenue increased by 2.4 per cent, EBITDA grew by 12.5 per cent, while EBIT was as much as 39.5 per cent higher compared to the same period last year, when Mercator is included on a like for like basis.
In terms of the respective divisions, Food division generated the best improvement in results compared to last year, with a 12.5 per cent higher net sales revenues, 23.6 per cent higher EBITDA and 40.1 per cent higher EBIT in the first half of the year, following the impact of COVID-19 on H1/2020 results and the launch of several innovative products on the market in 2021.
The Retail division saw revenue growth of 1.2 per cent, EBITDA grew 10.9 per cent and EBIT grew 65.9 per cent, with Mercator included on a like for like basis. These improvements are a result of synergies, improved general trading as well as the wholesale segment in Konzum experiencing a strong recovery, following the relaxation of COVID-19 measures and the opening of HORECA channels.
Due to the major decrease in pork selling prices vs H1/2020, the Agriculture division incurred a decline in revenue of 12.5 per cent, which resulted in an EBITDA decline of HRK 19 million and EBIT decline of HRK 21 million.
“In H1/2021 Fortenova Group was very focused on in-market execution, delivering planned improvements to the business, and completing a number of key projects. This focus on delivery is clearly shown with improved operating performance, the divestment of the Frozen Food Business Group fully on track, Mercator debt being refinanced alongside 89.73% of its shares transferred to Fortenova Group and its integration into the Retail Division proceeding very successfully, as well as several non-core business divestment transactions being completed, enabling further focus on the core divisions. Overall, this has been a very positive H1 for the Group.” – said James Pearson, Fortenova Group’s Executive Director of Finance.