On 9th January 2020, Agrokor received the second instance judgment of the Commercial Court of Belgrade dismissing Agrokor’s appeal and confirming the first instance judgment of 8th March 2019, ordering Agrokor to pay to the plaintiff Banca Intesa ad, Belgrade, the amount of EUR 15.2m plus interest and to settle the costs of the litigation procedure. Pursuant to the first instance judgment, that has now become final and non-appealable, Banca Intesa Belgrade can try to institute enforcement proceedings over the assets of Agrokor in Serbia.
Agrokor shall continue to fight by legal means given that Banka Intesa Beograd already recovered has already happened its entire claim in question in accordance with Agrokor’s creditors’ Settlement Plan by having received equity and debt securities, in particular depositary receipts in the nominal amount of EUR 1.34m and convertible bonds in the nominal amount of EUR 5.4m, whereby it has become co-owner of Fortenova Group holding a 0.5 per cent share.
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With the end of November Fortenova Group has completed the launch of a new educational cycle in all three programmes of the DRIVE Beyond Excellence project, designed to improve the knowledge and skills of its employees in the long term.
Only a fortnight after 98 students of the first generation successfully completed their education, another generation of Accelerate programme students have started their work today. It comprises 73 students from 17 operating companies and Fortenova grupa d.d. Their education focuses on acquiring a number of new competencies and knowledge in various operational areas, and the programme has been developed with Selectio Group, Croatia’s leading HR consultancy company.
Through nine modules the students will gain insight into knowledge from the areas of finance, supply chain management, sales, customer relations or comprehensive project management, with particular focus on strengthening team leadership skills, recognizing specific traits in team members and encouraging their creativity, agility and inclination to thinking outside the box.
The education is intended to strengthen the students’ managerial skills, as well as to drive the transfer of acquired knowledge, thus strengthening the overall level of employee competence and efficiency and contributing to the atmosphere of togetherness, collaboration and sharing fostered by Fortenova Group in its working environments.
“I believe that we are all proud to end the year with new beginnings in our internal education programmes, featuring an impressive number of students in both generations. In the context of everything else that we have done at the company in parallel, we can truly be content with our overall achievements. Not only have we improved our financial strength, as confirmed by our operating results from quarter to quarter, but in parallel we have also developed internal processes and a systematic support to our key resource, which has brought us to the point that today we have a respectable talent pool and teams that can cope with even the most challenging tasks”, said Fabris Peruško, Fortenova Group’s CEO on the occasion of the Accelerate programme kick-off.
“Two generations of group programmes for the development of our employees’ skills as part of the DRIVE Beyond Excellence project have involved more than 450 employees from all our companies. The first generations have successfully completed their education, and the feedback from the students in all three programmes regarding the content quality and overall concept is truly excellent. This is why we are very happy with the development of the DRIVE Beyond Excellence project and the benefits that it has brought in strengthening the Group’s overall human potential and the work environment in general” – said Gordana Fabris, Fortenova Group’s Director of Human Resources.
Fortenova Group presented its detailed results for I-IX/2022 to the DR Holders, having confirmed the continuing excellent operating trends in all of its core businesses. As opposed to the preliminary results for the first three quarters that Fortenova Group had presented last week, this presentation featured the same key performance indicators in more detail, as shown in this presentation. The factors with the greatest positive impact on the growth of all of the Group’s performance indicators were the excellent tourist season, significant operational improvements, as well as inflation.
In I-IX/2022 Fortenova Group has thus generated total consolidated revenues from continuing operations of HRK 30.3billion or EUR 4 billion, which is an increase of 38 percent in a year-on-year comparison. Net of the effects of the Mercator integration, total revenues from continuing operations were 15 percent higher compared to the same period of 2021.
At the same time the consolidated adjusted EBITDA of the period has grown 22 percent against last year’s and amounted to HRK 2.1 billion or EUR 275 million. In spite of the high cost of debt and the increased costs of energy and labour, in the first nine months of 2022 Fortenova Group generated profits from continuing operations in the amount of HRK 534 million, which is an improvement of HRK 918 million against last year’s loss of HRK 384 million.
At the end of September Fortenova Group had a cash position of almost HRK 2 billion on its accounts. In parallel, it has continued to reduce its leverage and brought the net debt to adjusted EBITDA, according to the definition of its creditors, down to 3.58 times at the end of the period, thus having halved it from 7.2 times which was the leverage ratio at the point of Fortenova Group’s incorporation.
In comparison to the non-consolidated results at the end of Q3 2021, the 18 companies from the Group’s core businesses – Retail and Wholesale, Food and Agriculture – realized 12 percent more total revenue, while the non-consolidated EBITDA of the core businesses grew by 11 percent.
Retail and Wholesale thus realized 9 percent higher revenue and 9 percent more EBITDA. When it comes to revenue, that growth was supported by numerous activities of the company related to price optimisation and network expansion, and partly also the high inflation, while the focus on store optimisation, synergies and energy saving measures resulted in higher EBITDA. The wholesale segment owes its 18 percent better result primarily to the recovery of the HoReCa channel. Among Fortenova Group’s retail companies, the best results were generated by Konzum Croatia, Mercator B&H and Mercator Serbia, which recorded revenue increases of more than 10 percent. In general, inflation also had the largest adverse effect on the results in retail, having increased the prices of products and services as well as labour costs.
The Food Division companies, on the other hand, were under strong pressure of higher logistics costs through the growth of fuel and raw material prices. Nevertheless, Fortenova Group’s Food Division overall generated as much as 24 percent more revenue, driven by both higher sales and inflation, with all of the companies having recorded double-digit revenue growth compared to the same period last year. A higher growth of EBITDA was neutralized by the aforementioned higher raw material prices, input cost inflation and salary increases and amounted to 2 percent compared to 1‑9/2021.
Revenues in the Agriculture Division grew 7 percent, primarily accounted for by pig breeding, cattle breeding and milk production, while EBITDA grew by 60 percent, mostly due to the growth of agricultural commodity prices and the strong control of operating costs.
Holders of Depositary Receipts issued by Fortenova Group STAK Stichting, a foundation (stichting) incorporated under the laws of the Netherlands, on 28th November 2022 held a General Assembly meeting which was expectedly found to lack quorum, with the next Assembly to be held at the end of the week starting 5th December 2022.
Given that the company SBK Art LLC’s access to the voting is still blocked (SBK; legal entity holding Sberbank’s stake in Fortenova Group and representative of 42.5 percent of votes in the Assembly), without those votes it is expectedly not possible to achieve the quorum prescribed by the company’s Articles of Association. When a certain item on the agenda does not get the required majority of votes on two consecutive meetings of the Assembly, the Articles of Association set forth that at the third meeting such decision can be adopted with 75 percent of valid votes cast in favour of the decision, regardless of the number of votes represented in the voting.
The only items on the agenda of today’s DR Holders’ Meeting were related to the appointment of auditors for Fortenova Group TopCo B.V. and Fortenova grupa d.d., and it is expected that the next Assembly with the same agenda will not have the required quorum, either. This is why the adoption of the decision about the appointment of the auditors is expected to take place during December, at the third session of the same Assembly.
By way of reminder, the lawyers of the company Fortenova Group STAK Stichting have agreed with the proposal made by the lawyers of SBK Art LLC’s – the legal entity holding Sberbank’s stake in Fortenova Group – to only vote on the appointment of the auditors at this General Assembly meeting, given that SBK Art is undergoing the Know Your Customer (KYC) procedures in the Netherlands.
Fortenova Group STAK Stiching has, in a reply to a letter sent by SBK, stated that in view of the unclear factual circumstances relating to the purported sale and transfer of the SBK’s shares by Sberbank of Russia to a private individual, it should not take account of or otherwise recognize SBK’s voting or voting rights. Accordingly, SBK continues to be blocked from access to the voting.
Representatives of SBK had not registered for participation at today’s Depositary Receipt Holders’ Meeting nor have they attended the meeting.
By way of clarification with regards to inaccurate information published in some media, Fortenova Group herewith notes that no hearing has been held before any court in the Netherlands that would have preceded this Assembly.
The holders of depositary receipts issued by Fortenova Group STAK Stichting, a foundation (stichting) incorporated under the laws of the Netherlands have been called to a meeting that will take place on November 28th, 2022 with two items on the agenda:
1. Approval of the appointment of PricewaterhouseCoopers Accountants N.V. as the independent registered public accounting firm to audit the Dutch statutory accounts for the financial year ending on 31 December 2022 of Fortenova Group TopCo B.V.
2. Appointment of PricewaterhouseCoopers d.o.o. and Mazars Cinotti Audit d.o.o. as the independent registered public accounting firms to jointly audit the Croatian statutory accounts for the financial year ending on 31 December 2022 of Fortenova grupa d.d.
Fortenova Group STAK Stichting lawyers have agreed with the proposal made by SBK Art LLC (SBK; legal entity holding Sberbank’s stake in Fortenova Group) lawyers to postpone other originally planned agenda items until the next General Assembly meeting, while SBK Art is undergoing the Know Your Customer (KYC) procedures in the Netherlands.
Fortenova Group STAK Stiching has, in a reply to a letter sent by SBK, stated that in view of the unclear factual circumstances relating to the purported sale and transfer of the SBK’s shares by Sberbank of Russia to a private individual, it should not take account of or otherwise recognize SBK’s voting or voting rights. Accordingly, SBK will continue to be blocked from access to the voting.
As part of the DRIVE Beyond Exellence programme of improving the knowledge and skills of its employees, Fortenova Group has together with the COTRUGLI Business School started another education cycle through the Navigate Programme.
The second generation of students comprises 22 employees from 14 operating companies and Fortenova grupa d.d., most of them from the Food and Retail Divisions. Over 14 months of the education designed for Fortenova Group’s managers they will primarily strengthen their leadership skills, and working on a concrete operational project under the supervision of Fortenova Group’s Executive Directors they will consider improvements in their respective companies and acquire new, practical organisational knowledge. All of that will additionally affect the mobilization of their teams and organisations, as well as the realization of goals within Fortenova Group’s strategy.
„The systematic consolidation of Fortenova Group’s operations has been accompanied by the systematic support to the development of our key resource – our talents. That approach has reaped significant results because apart from having become one of the most desirable employers in the region in only four years of operations, we have also developed three own tailor-made education programmes with more than 250 of our employees having attended them in the first generation. Over the course of this month another nearly 200 collegues from across the Group shall start with new education cycles and hence over a period of two years almost 400 employees will undergo the internal education. Already the first generations have confirmed that investing in the expansion of knowledge and the personal growth and development of our talents also means that the Group’s potential in realizing its business objectives gets stronger. I am sure that the the contribution of the second generation of students in all DRIVE Beyond Excellence programmes will be equally strong and visible”, said Fabris Peruško, Fortenova Group’s CEO and Member of the Board of Directors, on the occasion of kicking off the second cycle of the Navigate programme.
„We are exceptionally pleased to be Fortenova Group’s education partner already for the second year and to continue contributing to the improvement of the professional competencies of Group employees through the “Drive Beyond Excellence – Navigate” programme, all with a view to achieving the set strategic goals, as well as to the not less important personal development.
As the leading business school in Southeast Europe we have always pointed out the importance of lifelong education and look forward to making our contribution to the personal, civic, social and business perspectives. I am convinced that the attendees of the programme will be important links in the development of their organisation and contribute to the competitiveness of the Croatian economy by personal example”, said Zoran Đorđević, Partner and Academic Director at the COTRUGLI Business School.
While detailed operating results for the period 1-9/2022 will be disclosed by Fortenova Group next week, preliminary results have shown that the Group has within the first nine months of 2022 generated total consolidated revenue of slightly more than HRK 30 billion or EUR 4 billion, which is a 38 percent increase in comparison to its performance in the same period of 2021.
Net of the Mercator integration effects, total revenue from continuing operations has grown by 15 percent in a year-on-year comparison, primarily thanks to the good tourist season, significant operational improvements and partly also due to inflation.
At the same time consolidated adjusted EBITDA of the period grew by 20 percent against last year’s and amounted to more than HRK 2 billion or EUR 265 million. In spite of the high cost of debt and increased cost of energy and labour, over the period 1-9/2022 Fortenova Group also generated profits from continuing operations.
At the end of September Fortenova Group had a cash position of almost HRK 2 billion on its accounts. At the same time it continued with the deleveraging process and achieved a net debt to adjusted operating profits ratio at the end of the period of 3.6 times, thus having halved the leverage ratio that had amounted to 7.2 times at the time of Fortenova Group’s incorporation.
A fortnight after Russia’s Sberbank, with a 42.5 percent stake Fortenova Group’s largest single co-owner, had disclosed to have sold the company that formally holds its beneficial ownership in Fortenova Group to a natural person, an investor from the United Arab Emirates, Fortenova Group received confirmation that the alleged new owner has not even contacted the Dutch registrar of ownership, UK-based Kroll, to change the data on the ultimate owner.
Kroll confirmed to Fortenova Group that to date they have not received any request to initiate the procedure of registering the change of ultimate owner.
Should such request be received, in order to accept any change Kroll must establish beyond doubt that the sanctions in effect in the European Union and the United Kingdom have not been breached in any way whatsoever. Should the sanctions have been breached by the sale-purchase, Kroll will not be able to acknowledge the exercise of rights from ownership shares thus acquired.
Any breach of sanctions also entails criminal liability for all citizens of EU member states and the United Kingdom who may have taken part therein and the company would like to use this opportunity to once again point out that Fortenova Group has had nothing to do with the transaction pursued by Sberbank.
As at 17th November 2022 Sberbank’s share in Fortenova Group is still in the ultimate ownership of Sberbank as it has been so far, which means that due to the sanctions this share does not bear the rights arising from ownership – including for example the exercise of voting rights.
Commenting on this fact, Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, pointed out: “The fact that Sberbank is still its largest single owner shall continue to affect Fortenova Group’s day-to-day operations as it has done so far, where due to the Russian co-ownership we occasionally have to argue and document that we as company are not subject to sanctions, which does take some time and energy, but we have been and shall continue to be able to manage that. The most important thing, apart from the fact that we do not have a new co-owner, is that nothing has changed in our everyday operations. Behind us there is an excellent tourist season and ahead of us the operationally intensive holiday season for which we are very well prepared, we operate in an orderly and successful manner and I expect, provided that we all continue to be equally committed to our work, that we will achieve all the goals set this year.”
This information is intended, in the light of a number of media publications ( Jutarnji list 4 Nov 2022 , Vecernji list 4 Nov 2022 , Jutarnji list 5 Nov 2022 , Vecernji list 8 Nov 2022 , Jutarnji list 9 Nov 2022 , Express 11 Nov 2022 , Jutarnji list 12 Nov 2022 ) over the last two weeks, to inform all stakeholders as accurately as possible of the ownership structure of Fortenova Group.
As at 2nd November 2022 Russia’s Sberbank and the natural person Saif Alketbi, citizen of the United Arab Emirates, claimed in separate, though timely coordinated media releases, that the aforementioned citizen of the UAE had acquired the 43.5 percent ownership stake in Fortenova Group by having purchased the company SBK Art LLC from Sberbank.
Fortenova Group immediately reacted to those announcements with the following information:
“Fortenova Group has no official knowledge whatsoever about the sale of Sberbank’s share. Sberbank’s assets are under sanctions and any sale-purchase requires special approvals to be obtained from the authorities in charge of implementing the sanctions. The first potential buyer of Sberbank’s share, Hungary-based Indotek, was not able to obtain those approvals. In the second attempt, i.e. the divestment to the pension funds, the approvals were obtained, but the representatives of German Allianz in the Supervisory Board of the AZ Fund stopped the sale-purchase. To Fortenova Group’s knowledge no further approvals for sale have been obtained and hence we do not see how a valid sale-purchase could have happened. Also, following the one performed by the pension funds, no other due diligence exercise has been performed. In case that the sanctions should have been avoided, this would constitute a criminal offence and the company has not taken part in it”.
More detailed clarifications of the developments related to Sberbank’s share in Fortenova Group were offered by Fabris Peruško, Fortenova Group’s CEO and Member of the BoD, in his interviews for Večernji list and HRT’s (Croatian TV) News.
As there was imprecise and inaccurate information published in some of the media commentaries, we herewith disclose a more detailed explanation of Fortenova Group’s ownership structure:
When it comes to the Russian banks, as the public is already aware, during the process of restructuring Agrokor through the Extraordinary Administration Procedure and the creditor’s Settlement Plan debts to creditors that were suppliers were mostly fully repaid during the EA Procedure itself. Financial institutions that had financed Agrokor until 2017 under the former owner have not recovered any cash, but their claims were rather swapped to ownership shares. The Russian bank Sberbank was Agrokor’s largest creditor, with the debt to that Bank prior to the opening of the Extraordinary Administration Procedure having amounted to EUR 1.1 billion. Hence, in pursuance of the Settlement Plan, Sberbank has also become Fortenova Group’s largest single owner.
Due to the crisis in Ukraine, i.e. the conflict regarding Crimea, which already existed at the time when the Settlement Plan among Agrokor’s creditors was closed, it was restricted by the statutory document of Foretnova Group’ Dutch ownership structure for co-owners under (at that time still only sectoral) sanctions to not be able to hold 50 percent of ownership or more. The mechanism applied has existed in the Netherlands for a number of years and makes sure that the Russian systemic banks cannot exceed an ownership share of 50 percent in companies, neither when issuing new nor when transferring existing instruments. This is why, at the time when Sberbank was assuming additional Fortenova Group instruments in exchange for Mercator shares, for the amount that would have meant that the 50 percent threshold has been exceeded, instruments held by Sberbank were transferred to a special escrow account in the name of a specialized private share issue management service provider (also an independent company of the UK based Kroll), and Sberbank cannot dispose of them at any point in time. These shares, if they were to be released from the escrow, would represent some 0.9 percent of votes. All shares exceeding 50 percent were transferred to a special account in 2021 as part of the overall share swap transaction and are still on that account, bearing no ownership and governance rights.
The second largest shareholder is a group of Croatian investors, led by Open Pass, who together hold some 28 percent, while the remaining around 22 percent of the company is owned by an array of institutional and private investors.
The first generation of 90 students from 17 Fortenova Group companies received their degrees on 15th November at the Konzum Academy for the successful completion of the Accelerate Programme. The degree-awarding ceremony marked the end of their one-and-a-half-year long journey of developing and improving their professional competencies and strengthening their managerial skills.
The Accelerate Programme is one of two group programmes in Fortenova Group’s DRIVE Beyond Excellence project that offers students the possibility to acquire new knowledge in the areas of finance, supply chain management, sales, customer relations or comprehensive project management through eight modules.
Given that the students that qualified for the programme were recognized for their development and career advancement potential through assuming more responsible managerial positions at Fortenova Group and its operating companies, particular emphasis was placed on strengthening their skills in team leading and recognizing specific traits in team members and on encouraging their creativity, agility and inclination to thinking outside the box.
Investment in the professional development and realization of potentials of its employees contributes to the overall business success of the Group, which has developed the Accelerate Programme with Selectio Group.
Congratulations to all our colleagues from Konzum, Tisak, Konzum BH, Mercator Slovenia, Mercator Serbia, Mercator BH, Mercator Montenegro, PIK Vrbovec, Jamnica, Sarajevski kiseljak, Roto dinamic, Zvijezda, Dijamant, Belje, Vupik, mStart and Fortenova grupa d.d.!
With its Ruling dated 19th July 2022 the Commercial Court of Zagreb has established that with the legally effective amalgamation of 46 non-viable companies to the debtor Agrokor d.d. as transferee the Settlement Plan of Agrokor’s creditors shall be considered implemented and the Extraordinary Administration Procedure over the debtor Agrokor d.d. closed. One of the world’s major restructuring-through-bankruptcy proceedings, recognized as such on an international level, has thus been successfully completed, after having gained legal legitimacy in the European Union, United Kingdom, the USA and Switzerland. During the Extraordinary Administration Procedure the overindebted Agrokor, although in bankruptcy, continued its business with all operations and full employment having been preserved in the process. At that point the system employed over 50,000 people in SE Europe and its failure, due to its impact on thousands of associated companies, would have had severe negative consequences on the economies of Croatia and all countries of the region.
The Extraordinary Administration Procedure in Agrokor had commenced on 10th April 2017 and comprised a total of 77 Agrokor subsidiaries. The company’s total debt at that point amounted to HRK 56 billion, with a debt to operating profits ratio of around 30 times and only six kunas on its accounts. Within only a year’s time the Extraordinary Commissioner Fabris Peruško and his team normalized the operations and completed negotiations on the creditors’ settlement, and the Settlement Plan was adopted with over 80 percent of the creditors’ votes in July 2018 and declared final and non-appealable in October 2018.
The most important result of the Extraordinary Administration Procedure, besides the accomplished settlement and preserved business operations, was the fact that during the Procedure itself the debts to a total of 2400 micro and small suppliers were settled in full, while other creditors’ recoveries amounted to 60 percent on average. All payments to suppliers and the overall costs of stabilizing the collapsed operations were settled from Agrokor’s operations and assets, without spending any Croatian tax payers’ money. At the same time, the Extraordinary Administration Procedure received international legal protection and with the TMA Award the international financial industry declared it to be one of the world’s best restructuring processes in 2018.
With the cessation of Agrokor’s existence, the authorities and duties of Fabris Peruško in his capacity as Extraordinary Commissioner under Art. 12 of the Act on Extraordinary Administration Proceedings in Companies of Systemic Importance for the Republic of Croatia, i.e. his rights and obligations as the debtor’s administrative body and representation authority shall cease.
“We can rightfully be proud to have completed one of the most important economic processes ever to have taken place in Croatia, with impact on the entire region. It was a challenging and complex process; the scope of work was enormous and the deadlines short. During the very difficult settlement negotiations we had to reconcile the frequently diametrically opposed interests of the different creditors. In our attempts to reach an agreement that would be acceptable to everyone, we had to face tensions, renouncement and compromises. Finally, the high percentage of support provided by the creditors to the Settlement Plan at the hearing and everything that we have done thereafter in transforming the company towards Fortenova Group, bear witness to the fact that we have had the knowledge and the determination required to manage this complex process. The Government of the Republic of Croatia, the financial creditors, suppliers, employees, myself in the capacity as Commissioner and our entire team have exerted exceptional efforts for the Extraordinary Administration Procedure to secure viable operations for a company that had practically been bankrupt. This was the basic assumption for everything that we have done in the period of three and a half years since the incorporation of Fortenova Group, which we have brought to a point where it has five billion euros of revenue, a leverage ratio of less than 4 times and the status of one of the most desirable employers and major investor across the region. I would like to thank everyone who has made a personal constructive contribution to the Extraordinary Administration Procedure, the Government of the Republic of Croatia that had nominated me for the responsible task of the Extraordinary Commissioner and the Commercial Court of Zagreb that appointed me. I take particular pride in the fact that today, together with the team in which there are numerous colleagues who also took part in the Extraordinary Administration Procedure, I run a company that has, thanks to the positive changes, successfully overcome all the challenges that we have been faced with” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, on the occasion of closing the Extraordinary Administration Procedure and the completion of his role as Extraordinary Commissioner.
Fortenova Group and the Hrvoje Požar Energy Institute (EIHP) signed a cooperation agreement for the preparation of a carbon footprint calculation study for Fortenova grupa d.d. and its operating companies. The Agreement was signed by Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, and Dražen Jakšić, Director of the Hrvoje Požar Energy Institute.
The study to be prepared for Fortenova Group by EIHP will include a calculation of GHG emissions from Scopes 1, 2 and 3 and is intended for the Group to be able to systematically work on their reduction. Scope 1 includes direct emissions occurring at company locations due to fuel combustion in immovable and movable energy sources, production processes, use of land, changes in the use of land and forestry as well as from fugitive sources. Indirect emissions from Scope 2 occur outside of the company’s locations and are related to the purchase and consumption of electricity, heat and cooling energy. The calculation will also include other significant indirect emissions from Scope 3, related to input and output material and people flows required for the functioning of Fortenova Group’s business units.
The calculations obtained shall be the basis for defining short-term and long-term GHG emission reduction objectives and the preparation of the Strategy and Action Plan for the reduction of Fortenova Group’s carbon footprint.
It is business entities that actually constitute a major part of the solution to the problem of climate change and achieving neutrality within the deadlines envisaged by the Paris Agreement as well as the goals set in that regard by the EU, namely, to reduce GHG emissions by the year 2030 by at least 55 percent against the emissions from 1990 and for Europe to eventually become a climate-neutral continent by the year 2050.
„As the largest private employer in the SEE region we are aware of our impact on the communities in which we operate and consequently also our responsibilities when it comes to assuming the leading role in contributing to the reduction of GHG emissions; hence achieving our own carbon neutrality is the long-term goal of our sustainability strategy. This project that we have launched with EIHP is therefore not only key in calculating the current level of our carbon footprint and setting concrete objectives for its reduction, but also for establishing high sustainability standards in all our companies, regardless of the respective market on which they operate, the level of its development and the national regulations when it comes to matters of reducing the impact on climate changes” – commented Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors on the occasion of signing the agreement with the Hrvoje Požar EI.
“By providing expert support to the business sector in transforming their operations towards low-carbon, EIHP also accomplishes its own mission in contributing to the green energy transition. We are pleased that Fortenova Group has recognized us as a reliable partner in implementing its sustainability strategy and reducing GHG emissions. A detailed carbon footprint calculation, both at the level of individual operating companies and at Group level, is an important first step that will enable Fortenova Group to get to know the emissions structure and recognize those activities that contribute to the carbon footprint. The next step is the preparation of a strategy and action plan defining the measures for reducing emissions, the implementation whereof will be Fortenova Group’s significant contribution to achieving climate neutrality of the society as a whole”, said Dražen Jakšić, Director of the Hrvoje Požar EI.
The project in question will take place in several stages – from calculating emissions and presenting the results in accordance with the GHG protocol and ISO 14064-1 standards to preparing the carbon footprint management strategy, the action plan for reducing GHG emissions and analysing the conditions for achieving carbon neutrality.
In H1/2022 Fortenova Group generated HRK 18.8 billion of total revenue from continuing operations, which is 57 more than in the same period last year mainly driven by the integration of Mercator. On a like for like basis revenue grew by 14%.
At the same time the Group’s consolidated EBITDA for the first six months of the year exceeded a billion kuna which is 74% more than in the same period last year, while on a like- for-like basis the adjusted consolidated EBITDA grew by 19%.
The fastest growth of revenue was recorded by the companies from Fortenova Group’s Food Division, while the Agriculture Division saw the fastest growth of EBITDA.
Net profits of the period, after exclusion of currency exchange impacts, amounted to HRK 12 million, as against the loss of HRK 213 million after exclusion of currency exchange impacts in H1/2021. At the end of H1/2022 Fortenova Group also had HRK 1.7 billion of cash on its accounts and continuing its already long-term deleveraging trend, it closed H1/2022 with a debt to operating profit ratio moving 3,94 times.
“The strong realization in the first half of the year continues the positive trend that we recorded throughout the last year, with positive underlying business improvement accelerated by the integration of Mercator into Fortenova. This underlying growth is shown by the Group’s total revenue from continuing operations in H1/2022 has grown by 14% on a like for like basis excluding Mercator. These excellent operating results were generated in spite of the negative impacts of inflation on the increase in prices of labour, energy and raw materials and the consequently increased costs across the supply chain. The ’22 tourist season in Croatia is almost at the level of the record year 2019, which is an additional driver for our results that will show its full benefit in the third quarter of the year, which is the most important time period for us” – said Fabris Peruško, Fortenova Group’s CEO and Member of the Board of Directors, commenting on the half-year results.
“Looking further forward the expected changeover to the euro will have an additional long-term positive impact on the Group’s credit profile, as after the conversion 80 percent of our business will be generated in euros. Additionally, the currency risk for our debt will be eliminated,” – Peruško said. He also noted that the process of ownership transformation and the divestment of shares held in Fortenova Group by Sberbank continues and that over the course of H1/2022 the final prerequisites for a court ruling on closing the Extraordinary Administration Procedure in Agrokor will have been met.
James Pearson, Fortenova Group’s CFO, commented that the Group had a very positive first half of the year, having focused on market realization and achieving the planned operational improvements.
“Following the significant deleveraging achieved by Fortenova Group in 2021 by the transactions related to Mercator, the Frozen Food Business Group and a number of non-core business and property disposals, in 2022 we have continued to generate higher revenues and operating profits, which brought about a further decrease in the leverage ratio, which now amounts to 3.94 times which reflects the increasing financial strength of the Group. ” – Pearson said.
Just as Konzum, being the national retail leader, was the first retailer in Croatia to start with the dual price display, it has as well together with Tisak, Fortenova Group’s other large retail company, among the first voluntarily acceded the Code of Ethics that establishes the ways in which business entities shall proceed in the process of introducing the euro in the Republic of Croatia.
Given that Fortenova Group has approached this process in an equally transparent way through all of its business segments, the Code of Ethics will as well be acceded by the other Group companies that have a prominent direct relationship with consumers, such as Abrakadabra (A007), Roto dinamic, Multiplus card and others.
Although the document is declaratory in nature, the business entities acceding the initiative guarantee that they shall over the course of the conversion process take care for the adjustment of Croatian consumers to the introduction of the new currency to be as transparent as possible.
With Fortenova Group companies being national leaders in the retail as well as distribution and production of food, by voluntarily acceding the Code of Ethics and accepting its principles they have confirmed their commitment to the welfare of their customers, suppliers and business partners.
As of the day of acceding the Code of Ethics, Fortenova Group companies have acquired the right to use a visual identification sign – a slogan and logo guaranteeing their customers and service users the implementation of principles from that document. They will also be included in the list of business entities that will be publicly available at the website www.euro.hr.