Tomislav Jukić, Agrokor: Опыт Konzum Retail Business Russia & CIS 2014, September 25-26, Moscow

1. 25. September 2014.
How to Grow and
Increase Market Share
in an Economy which
is experiencing
Recession?
The Agrokor Way
Tomislav Jukić

2. A Beautiful Place…
…But Challenging for Doing Business

3. Still, some succeed…

4. Entering new
businesses
 Water&Beverages
(Jamnica)
 Edible oils&Margarines
(Zvijezda)
 Retailing&Wholesale
(Konzum)
 Ice cream&Frozen food
(Ledo)
Starting regional expansion
(B&H)
 Ice cream&Frozen food (Ledo Čitluk)
 Water&Beverages (Sarajevski
kiseljak)
Entering Serbian market
 Ice cream&Frozen food
(Frikom)
Further expansion
Serbia
 Retailing&Wholesale (IDEA)
 Edible oils&Margarines
(Dijamant)
Croatia
 Agriculture (Belje)
 Meat (PIK Vrbovec)
Further food retail
business expansion
in Primary markets1)
Entering EU market (Hungary)
 Ice cream&Frozen food (Baldauf)
 Water&Beverages (Fonyódi)
Food retail expansion in B&H
 Retail&Wholesale (Konzum B&H)
Capital structure
strengthening
EBRD 8.33% equity stake
Focus on efficiency,
core businesses
and capital
optimization
1976 ’93-’94 2000 2003 2004 2005 2006 ’07-’08 2009’95-’001989 ’10-’14
Ivica Todorić registers
Agrokor as a joint
stock company
Ivica Todorić
Founded Agrokor
as a flower
cultivation and
trading company
Consolidation and
strenghtening of the
balance sheet
Integration of acquired businesses and
focus on organic growth
 Audited accounts
 Public rating
1) Primary markets include Croatia, Serbia and Bosnia and Herzegovina
4
A Glimpse into History…

5. RETAILING
AND
WHOLESALE
556,313 sqm12,000 sqmSelling area
CAGR2013Unikonzum 1994
1,068
Croatia #1
Serbia #3
B&H #1
23,935
€174 mn
€3.1 bn
150No. of stores
Market position
1,800
–
€0.03 bn 28%
No. of employees
EBITDA
Total sales
Sales per employee €130,574€14,000 9.3x
5
… With Proven Expertise in Value Creation…

6. 1,013
1,197
1,614
2,428
2,824
2,873
3,151
3,303
3,491
3,917
4,365
4,374
4,736
6,025
9,044
- 2,500 5,000 7,500 10,000
Auchan
Reál
Ahold
SPAR
Carrefour
Mercator
Agrokor Retail
CBA
Delhaize Group
Metro Group
Tesco
Rewe Group
COOP Euro
Agrokor Retail
+ Mercator
Schwarz Group
________________________________________________
Source: Planet Retail.
Note: Includes food retail formats market shares and total banner sales for grocery retailers.
(1) Based on estimated banner sales owned or operated by the group including VAT, franchised operations and partly owned stores / chains, with the exception of Mercator and
Agrokor Retail which are as reported. SEE defined as Albania, B&H, Bulgaria, Croatia, Czech Republic, Greece, Hungary, Macedonia, Montenegro, Romania, Serbia, Slovakia,
Slovenia.
2012 Sales in SEE(1)
(€m)
Agrokor Retail
and Mercator
Romania
Bulgaria
Macedonia
Hungary
Slovakia
Czech Republic
#2
#1
#1
#1
#1
Greece
Company Market Share
Mercator 25.2%
SPAR (Austria) 12.1%
TUS Trgovine 9.2%
Aldi 6.5%
Schwarz Group 5.2%
Slovenia
Company Market Share
Agrokor + Mercator 34.8%
Agrokor 29.0%
Schwarz Group 9.7%
Mercator 5.8%
Plodine 4.9%
SPAR (Austria) 3.8%
Croatia
Company Market Share
Delhaize Group 15.1%
Agrokor + Mercator 13.4%
Mercator 8.0%
Agrokor 5.4%
Metro Group 3.1%
ITM (Intermarché) 1.0%
Serbia
Company Market Share
Mercator 12.9%
Delhaize Group 6.9%
Lukoil 0.2%
Montenegro
Company Market Share
Agrokor + Mercator 14.2%
Bingo 8.2%
Agrokor 7.7%
Mercator 6.5%
Delhaize Group 4.3%
ITM (Intermarché) 3.1%
TUS Trgovine 1.4%
Bosnia & Herzegovina
…And a View to the Future

7. • Centralized delivery from own warehouses
• EDI with partners
• Automated invoice matching and ordering of goods
Operational
Efficiency
Integrated
Business
Understanding
local specifics
Innovative
services
Understanding
Customers
• ‘From the Field To the Table’
• Own agricultural and meat (frozen products, oil, water,…) production
• Highest quality, recognized and awarded brands
• Total of 25,000 – 40,000 SKUs in three countries in the Primary Markets
• Two private label brands comprising over 3,000 products
• Local sourcing, particularly of produce
• Training center
• Billing service that enables customers to pay utility bills in Konzum stores
• Self check-out, self-scan, mobile app and 24/7 store services
• Cash withdrawals, Lottery and event tickets
• Multiplus mobile (MVNO)
• Konzum Benz petrol stations next to prime store locations
• Loyalty card program in Croatia comprising of more than 1.1 mn customers
• COALITION LOYALTY launched in Sept ’10 in Croatia and in May ‘13 in Serbia
• Customer Centric Retailing – segmenting customers based on purchasing
• power and adjusting store offering accordingly
7
Key Levers of Success

8. Understanding Customers

10. 10
 Leadership position throughout the region
 Strong portfolio and expansion of portfolio
 Leadership position in Croatia and Bosnia and Herzegovina
 Strengthened presence in Serbia through acquisition of Mivela
 Leading carbonated and water brands
 Leadership position throughout the region
 Launched a portfolio of healthy oil and margarine products to
adjust/set the changing market trends
 Own sourcing – control of raw materials and input prices
 Leadership position in Croatia with growing market share
 Strategic goal: traceability of all fresh meat products (“from field to table”)
 DLG awards and implementation of OHSAS 18001:2007
 Largest Croatian agricultural company controlling over 75,000ha of fertile
land in Croatia and over 160,000ha in total
 Main activities include livestock breeding, crop husbandry and wine
production
Edible Oils and
Margarines
Water and
Beverages
Fresh and
Processed Meat
Agriculture
Ice Cream and
Frozen Food
Product Key characteristics Key companies/brands
We hold market shares of over 50% in most of these segments and have delivered double digit growth over the last 7-10 years
Integrated Business

11. Innovative services

12. Thank You!