With the publication of its audited Consolidated Financial Statements and the Sustainability Report for 2023, Fortenova Group has rounded off a very intensive first half of the year. In particular, after last week’s announcement of a very successful implementation of its ownership transformation and the fact that it no longer has any sanctioned shareholders in its ownership structure, as well as of the decision on having selected Podravka as its partner to continue the process of divesting the agriculture business, in the Financial Statements and the Sustainability Report the Group has now presented its last year’s business operations to the public in detail.

The audited Consolidated Financial Statements disclose the key financial indicators, while the Sustainability Report features a comprehensive overview of the Group’s and its operating companies’ operations in 2023, focusing on the activities in seven key sustainability topics.

When it comes to the financial indicators for 2023, according to the audited consolidated results the Group generated total consolidated revenues of more than EUR 5.8 billion. Adjusted consolidated operating profits were lower than in the year before and amounted to EUR 251 million. The net debt at the end of 2023 was EUR 970 million, while the net debt to adjusted operating profits ratio was 3.86 times. In a year-on-year comparison, all of the Group’s business divisions recorded higher total revenues, while having generated lower operating profits.

“Reflecting on last year’s financial results, it is important to note that, regardless of the specific circumstances that we found ourselves in, which we extensively addressed in the previous days, the Group has accomplished the most important goals planned, particularly having in mind the impact that global economic developments have had on our operations. As expected, the reduced operating profits as compared to the previous year were primarily due to the high increase in costs, particularly of energy and raw materials, and the increase in employee benefits. Nevertheless, despite the growth of our financing costs, the total net debt to adjusted profits ratio is on a satisfactory level” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, commenting on the 2023 financial indicators.

When it comes to the third consecutive Sustainability Report, it contains information about the businesses of 39 operating companies and Fortenova grupa d.d. and indicates key strides made in the area of sustainability in 2023, as confirmed by two awards received by the Group in the previous period. The first one is the Gold Award and the “Regional ESG Leader” acknowledgement for overall ESG achievements, awarded in the competition of large companies from the territory of Central and Southeast Europe by the International Economic Forum “Perspektive” and the company “Promo global”, while the Group received the “Hrvoje Požar” annual award in the category of a realized rational energy management project for the implementation of a comprehensive energy efficiency project. The achievement of energy efficiency is one of the priorities that the Group has intensively been working towards since 2022, when it started to establish the processes of determining all emission sources in its own operating process and the entire supply chain. Following an integral calculation of the carbon footprint from all established sources, studies were prepared in collaboration with the Hrvoje Požar Institute for each of the Group’s 40 companies engaged in different business activities, aimed at reducing their carbon footprint, as well as the pertaining documentation for the implementation of measures for its reduction in the period between 2025 and 2030. At the same time, the plans on reducing the carbon footprint at Group level started to be implemented already over the course of 2023 by initiating projects intended to increase the share of renewable energy sources in the overall consumption, define summer and winter store temperatures, reduce lighting outside the working hours to a security minimum, install LED lighting and close the refrigerated display cabinets in the stores, install higher capacity compressors and economizers on the boilers in specific companies and modernize the vehicles. Thereby, savings of 5 percent were made at Group level in the overall energy consumption.

Another important step was the increase in employee investments, which is particularly important given the total number of workers employed by the Group across the region and the risk arising from labour shortages. Since 2019 the labour costs have thus increased at Group level by almost EUR 200 million, with the Group continuing to invest in the growth of total employee benefits (salaries, performance-related remuneration and various bonuses/rewards), where it has been recognized in the broader environment for actively advocating the search for new and the relaxation of existing models of substituting the insufficient number of the working population in the countries of the region.

Another thing the Group companies have in common is the initiative related to the reduction of food waste, where Konzum HR has for the sixth consecutive year been recognized as the largest food donor in Croatia, while at the same time four Group companies – Fortenova grupa d.d., Konzum HR, Zvijezda HR and PIK Vrbovec HR – have, upon initiative of the Ministry of Agriculture, acceded to the Voluntary Agreement on the Prevention and Reduction of Food Waste, “Together against food waste”.

Furthermore, given that it has defined the diversity of representation at all levels, along with achieving gender equality, as one of its ESG goals, over the course of 2023 the Group adopted the Diversity, Equity and Inclusion Policy, with action plans prepared for the implementation of the Policy in 2024.

“The package of information where we have presented in detail everything that we did in 2023 is yet another proof of our dedication to responsible business operations, and in that light our strides regarding sustainability topics should be viewed as well. This, of course, also applies to a number of activities that we have undertaken over the course of last year, related to securing the stability and safety of our operations, particularly when it comes to the financial aspect, but also with regard to different external challenges and abrupt changes to the conditions in which our business operations took place”, Peruško concluded, commenting on the key elements of the Group’s Sustainability Report.

The 2023 Sustainability Report is available at the following link: https://fortenova.hr/wp-content/uploads/2024/07/Fortenova-Group-Sustainability-report-2023.pdf