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Introduction & Market Context
Atlantic Grupa, a leading consumer goods company in Southeast Europe, presented its unaudited financial results for the fiscal year 2024 on February 27, 2025, in Zagreb. The company reported strong sales growth across all markets and segments, particularly in coffee, despite facing significant commodity price pressures that impacted profitability.
The company’s stock (ATGR) closed at €44.00 prior to the presentation, trading well below its 52-week high of €55.50, reflecting market concerns about margin pressures despite the company’s revenue growth.
Executive Summary
Atlantic Grupa delivered robust sales growth of 10.9% in 2024, reaching €1,080.3 million. Excluding the impact of the Strauss Adriatic acquisition, organic growth stood at 7.7%. The company’s normalized EBITDA increased by 10.3% to €90.9 million, demonstrating operational efficiency despite challenging market conditions.
As shown in the following financial highlights:
However, the company faced significant profitability challenges at the bottom line, with net profit declining by 15.2% and normalized net profit falling by 23.4%. This decline occurred despite the positive EBITDA performance, primarily due to rising commodity prices, particularly in coffee and cocoa, as well as increased financial expenses.
Detailed Financial Analysis
The coffee segment emerged as the standout performer, with sales increasing by 24.5% to €248.8 million, now representing 23.0% of total sales compared to 20.5% in 2023. Other segments also showed positive growth, with Savoury Spreads up 9.1% to €150.3 million and Beverages increasing 9.5% to €110.6 million.
The following breakdown illustrates the sales growth across various business segments:
The company’s sales mix has evolved, with coffee gaining significant share while principal brands slightly decreased their contribution:
Geographically, Atlantic Grupa achieved growth across all markets, with Serbia showing the strongest performance at 18.3% growth to €285.1 million. Key European markets also performed well with 14.8% growth to €55.8 million, demonstrating the company’s successful international expansion.
The following chart shows sales growth across all markets:
Despite the strong sales performance, the company’s profitability metrics presented a mixed picture. While EBITDA increased by 12.0% and normalized EBITDA by 10.3%, both EBIT and net profit declined, highlighting the impact of rising costs and financial expenses.
The company’s financial position showed some concerning trends, with net debt increasing to €193.4 million from €150.7 million in 2023. The net debt to EBITDA ratio rose to 2.1 from 1.8, while the interest coverage ratio declined to 9.0 from 13.6, indicating increased financial leverage.
Strategic Initiatives and Brand Performance
Atlantic Grupa completed the acquisition and integration of Strauss Adriatic in 2024, expanding its market presence. The company was recognized as an "ESG leader" in Slovenia, Serbia, and Croatia, underscoring its commitment to sustainability.
The company’s own brands demonstrated strong performance across the portfolio. Espresso coffee led with 28% growth (18% organic), followed by R&G coffee at 25% (8% organic) and instant coffee at 17% (15% organic). Beverage brands also performed well, with Cockta up 14% and Cedevita increasing by 10%.
In the savory category, Argeta achieved 9% growth and maintained its position as the number one pate in the EU by both value and volume. The Farmacia pharmacy chain expanded to 104 locations with 9% growth.
Forward-Looking Statements
Looking ahead to 2025, Atlantic Grupa expects sales to reach approximately €1.2 billion, representing continued growth. However, the company anticipates further pressure on profitability due to rising coffee and cocoa prices. Normalized EBITDA is expected to remain at 2024 levels, suggesting margin compression as revenues grow.
Capital expenditure is projected to increase to approximately €55 million, up from €49.4 million in 2024, as the company continues to invest in modernization and automation.
The challenging outlook for profitability, despite strong sales growth, reflects the ongoing commodity price pressures facing consumer goods companies, particularly those with significant exposure to coffee and cocoa markets. Atlantic Grupa’s ability to maintain EBITDA levels while growing sales will depend on successful pricing strategies and operational efficiencies to offset these input cost pressures.
Full presentation:
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