Podravka d.d. — Interim / Quarterly Report 2018

Apr 25, 2018

Koprivnica, 25 April 2018

PODRAVKA INC.

UNCONSOLIDATED FINANCIAL REPORT

FOR 1 - 3 2018 PERIOD

Content:

• General information
• Management report on the achieved business results of Podravka Inc. for the period 1 - 3 2018
• Unconsolidated financial reports for the period 1 - 3 2018
• Statement from executives responsible for preparing financial statements
• Contact

General information

Podravka prehrambena industrija Inc., Koprivnica, is incorporated in the Republic of Croatia. Today it is included in leading companies in industry operating in the area of South-Eastern, Central and Eastern Europe. The principal activity of the Company comprises production of a wide range of foodstuffs and non-alcoholic beverages.

The Company is headquartered in Koprivnica, Croatia, Ante Starčevića 32.

The Company's shares are listed on the official market of the Zagreb Stock Exchange.

Management Board members as at 31 March 2018

• President Marin Pucar
• Member Ljiljana Šapina
• Member Davor Doko
• Member Hrvoje Kolarić
• Member Marko Đerek

The unconsolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").

Koprivnica, 25 April 2018

MANAGEMENT REPORT ON THE ACHIEVED BUSINESS RESULTS OF PODRAVKA INC. FOR THE PERIOD 1 - 3 2018

Key business highlights of 1 - 3 2018

In 1-3 2018, Podravka Inc. recorded sales revenues of HRK 452.8 million, which is 13.5% higher than in the same period of the previous year. Growth of sales revenues came on the back of higher sales and marketing activities. Total operating expenses at the same time grew 2.6%, mostly due to higher sales, which resulted in HRK 54.7 million of operating profit. Operating profit in comparable period amounted to HRK 13.5 million.

In 1-3 2018 finance income of HRK 13.6 million were recorded, with HRK 14.8 million of finance costs, while the effective tax rate was 18.4%. Profit for the period 1-3 2018 amounted to HRK 43.7 million.

As at 31 March 2018, total assets of Podravka Inc. amount to HRK 2,984.4 million, 3.3% lower compared to the end of 2017. The most significant decrease on the assets side was in line item cash at bank and in cashier and in line item receivables from related parties. On the equity and liabilities side, the most significant decrease was recorded in line item accounts payable.

Cash flow from operating activities in 1-3 2018 amounted to negative HRK 23.1 million, as a consequence of operations and movements in working capital. Cash flow from investing activities at the same time amounted to negative HRK 14.4 million, primarily due to cash used for the purchase on non-current tangible and intangible assets. In the same period, cash flow from financing activities amounted to negative HRK 60.9 million due to the repayment of borrowings. In total, in 1-3 2018 cash and cash equivalents decreased by HRK 98.4 million, and consequently the amount of cash and cash equivalents as at 31 March 2018 was HRK 33.6 million.

UNCONSOLIDATED FINANCIAL REPORTS FOR THE PERIOD 1 - 3 2018

Appendix 1 Reporting period:			1.1.2018.		31.03.2018.
			Quarterly financial report of entrepreneur - TFI-POD
Registration number (MB)		03454088
Identification number of subject (MBS)		010006549
Personal identification number (OIB)		18928523252
			Issueer company: PODRAVKA prehrambena industrija d.d., KOPRIVNICA
Postal code and place		48000		KOPRIVNICA
Street and number ANTE STARCEVICA 32
E-mail address: podrawka@podrawka.hr
Internet adress: www.podravka.com
Code and name of comunatown]	201	KOPRIVNICA
Code and county name	6	KOPRIVNIČKO-KRIŽEVAČKA			Number of employees	3088
Consolidated statement	NO				(at quarter end) NKD/NWC code:	1039
Subsidiaries subject to consolidation (according to IFRS):			Headquarters		Registration number:
Book keeping service: Contact person: Artner Kukec Julijana
Phone number: 048 653 055		(authorised person for representation)			Fascimile: 048 220 562
		E-mail address: Julijana ArtnerKukec@podravka.hr
Surname and name Pucar Marin
		(authorised person for representation)
Disclosure documents: 1. Financial statements (balance sheet, profit and loss account, cash flow statement, statement of changes in shareholders' equity and notes to the financial statements) 2. Interim management Report 3. Statement of responsible persons for preparation of financial statements
		MP			(signed by flut/forised person for representation)
			AMBENA INDUSTR
			PRIVN

AOP Nem code × 12 . OPERATING REVENUE (112+113) 111 1. Sales revenue 112 2. Other operating revenues 113 II. OPERATING EXPENSES (115+116+120+124+125+126+129+130) 114 1. Changes in value of work in progress and finished products 115 2. Material costs (117 to 119) 116 a) Raw material and material costs. 117 b) Costs of goods sold 118 c) Other external costs. 119 3. Staff costs (121 to 123) 120 a) Net salaries and wages 121 b) Cost for taxes and contributions from salaries 122 c) Contributions on gross solaries. 123 4. Depreciation 124 5. Other costs 125 6. Impairment (127+128) 126 a) Impainment of long-term assets (financial assets excluded) 127 b) Impairment of short - term assets (financial assets excluded) 128 /. Provisions 129 8. Other operating costs 130 III. FINANCIAL INCOME (132 to 136) 131 1. Interest income, foreign exchange gains, dividends and similar income from related parties 132 2. Interest income, foreign exchange gains, dividends and similar income from non - related parties and 133 other entities. 3. Share in income from affiliated entrepreneurs and participating interests 134 4. Unrealized gains (income) from financial assets 135 5. Other financial income 136 IV. FINANCIAL EXPENSES (138 do 141) 137 1. Interest expenses, foreign exchange losses, dividends and similar expenses from related parties 138 2. Interest expenses, foreign exchange losses, dividends and similar expenses from non - related parties 139 and other entities 3. Unrealized losses (expenses) on financial assets 140 4. Other financial expenses 141 INCOME FROM INVESTMENT - SHARE IN PROFIT OF ASSOCIATED ENTREPRENEURS v. 142 LOSS FROM INVESTMENT - SHARE IN LOSS OF ASSOCIATED ENTREPRENEURS vı. 143 VII. EXTRAORDINARY - OTHER INCOME 144 VIII. EXTRAORDINARY - OTHER EXPENSES 145 IX. TOTAL INCOME (111+131+142+144) 146 X. TOTAL EXPENSES (114+137+143+145) 147 XI. PROFIT OR LOSS BEFORE TAXATION (146-147) 148 1. Profit before taxation (146-147) 149 2. Loss before taxation (147-146) 150 XII, PROFIT TAX 151 XIII, PROFIT OR LOSS FOR THE PERIOD (148-151) 152 1. Profit for the poriod (149-151) 153 2. Loss for the period (151-148) 154 APPENDIX to P&L account (to be filled in by entrepreneur that prepares consolidated financial report) XIV. PROFIT OR LOSS FOR THE PERIOD 1. Attributed to equity holders of parent company 155 156 2. Attributed to minority interest	Last Year Cumulative: 18 412 771 122 399.075.468 53 745 634 399.312.665 116.617 260.621.177 174,436 926 53.431.311 32,750,940 86 273 811 53.860.353 19 842 305 12.571.183 25.026.096 21.017.864 -224.897 -224.897 8/0.084 4.728.913 13.675.564 6.157,762	Cuarterly GC. 412.771.122 318, 025.488 13745.634 309 312 665 116.617 200 621 177 174 438 976 53,431,311 32,750,940 86.273.811 53,860,353 10.042.305 12.571.153 25.029.006 21.017.864 $-224,893$	Current year Curnolative × 464 292 075 452.622.986 11.469.089 409 597 440 3 953 764 201421.068 185.613.305 64.743.136 31.114.627 82.887,068 52.152.872 18.795.899 11.938.327	Quarterly ť. 464,262,075 452 622 986 11.465 059 409.597.440 3 993 784 281.471 068 185 613.305 84.743.536 31.114.627 82,887,098 52.152.872 18.795.899
				11:538.327
			22.097.258	22.097.258
			13.935.435	13.938.435
			$-351.288$	$-351.288$
			$-1.418$	$-1.418$
		$-224.897$	-349.870	-349.870
		31/0 1/64
		4.708.913	5 561 105	5.561.105
		13 675 564	13.595.171	13 595, 171
		6,157,762	7.111.876	7,111,876
	7.013.374	1013374	6.170.205	5.170.205
	504.428	504.428	313,000	313.090
	16.562.029	16.562.029	14.769.708	14,769,708
	8.371.005	8.371.005	10.414.426	10.414.426
	7.272.751	7.272.751	4.355,282	4 365 282
	915-273	918.273	ø	o
				ō
		ö		D
			ō	ņ
				ō
	426.446.686	426.646.696	477,887,246	477, 857, 246
	415.874.694	415.874.604	424,367,148	424.357.148
	10.571.992	10.571.992	53,520,098	53.520.008
	10.571.002	10.571.902	53 520.098	53 520 098
			o
	1.983.472	1,983,472	9,845.706	9.845.706
	8.588.520	8.588.520	43.674.392	43.674.392
	8,588,520	8.588.520	43.674.392	43.674.392
	o	õ	o
	$\Omega$
	$\circ$
STATEMENT OF OTHER COMPREHENSIVE INCOME (IFRS)		# 538 520
I. PROFIT OR LOSS FOR THE PERIOD (+ 152) 157 II. OTHER COMPREHENSIVE INCOME / LOSS BEFORE TAX (159 do 165) 158	8.588.520		43.674.392	43.674.392
1. Exchange differences on translation of foreign operations 159				D
2. Movements in revaluation reserves of long - term tangible and intangible assets 160				Ð
3. Profit or loss from reevaluation of financial assets available for sale 161				B
4. Gains or losses on efficient cash flow hodging 162				$\ddot{\mathbf{0}}$
5. Gains or losses on efficient hedge of a net investment in foreign countries 163			a	$\theta$
6. Share in other comprehensive income / loss of associated companies 164		ö.		o)
7. Actuarial gains / losses on defined benefit plans. 165		ö	Ŭ	Đ)
III. TAX ON OTHER COMPREHENSIVE INCOME FOR THE PERIOD 166		ö	D.	허
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (158-166) 167			Ö.
V. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (157+167) 168		8 588 520	43,674,302	43.674.392
APPENDIX to Statement of other comprenhensive income (to be filled in by entrepreneur that prepares consolidated financial report) VI. COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD
1. Attributed to equity holders of parent company 169	6 568 520		D)
2. Attributed to minority interest 170	$\mathbf{0}$

AOP Last year (net) Item code (net) ž 3 × ASSETS A) RECEIVABLES FOR SUBSCRIBED BUT NOT PAID-IN CAPITAL 001 Ö 002 1.911.584.109 1.894.571.743 B) LONG-TERM ASSETS (003+010+020+029+033) 003 92.249.491 89.037.491 I. INTANGIBLE ASSETS (004 to 009) 004 Ō 1. Assets development 005 78.772.190 2. Concessions, patents, licences fees, trade and service marks, software and other rights 83.189.290 006 Ō 3. Goodwill 007 4. Prepayments for purchase of intangible assets Ü 008 9.060.201 10.265.301 5. Intangible assets in preparation 009 6. Other intangible assets Ō 827.301.621 010 011 45.420.448 1. Land 455.299.171 2. Buildings 012 3. Plant and equipment 013 264.671.519 21.605.771 4. Tools, facility inventory and transport assets 014 5. Biological assets 015 0 016 6. Prepayments for tangible assets 288.564 39.300.078 7. Tangible assets in progress 017 8. Other tangible assets 716.070 018 9. Investments in buildings 019 $\Omega$ III, LONG-TERM FINANCIAL ASSETS (021 to 028) 020 959.515.702 946.700.274 1. Investments (shares) with related parties 021 946.700.274 2. Loans given to related parties 022 2.562.560 0.219.984 3. Participating interest (shares) 023 1,225.020 1,225.020 4. Loans to entrepreneurs in whom the entity holds participating interests 024 0 $\Omega$ 5. Investments in securities 025 o Ū 2.361.874 6. Loans, deposits and similar assets 026 2.370.424 027 7. Other long - term financial assets o O Ō 028 Ò 8. Investments accounted by equity method 029 Ō O IV. RECEIVABLES (030 to 032) $\overline{0}$ Ŭ 030 1.Receivables from related parties 031 0 Ŭ. 2. Receivables from based on trade loans 3. Other receivables 032 0 033 V. DEFERRED TAX ASSETS 32.517.295 32.449.177 C) SHORT TERM ASSETS (035+043+050+058) 034 1.171.669.710 1.085.734.977 035 I. INVENTORIES (036 to 042) 479.169.008 485.376.529 1. Raw-material and supplies 036 117.037.484 037 2. Work in progress 44.313.087 038 3. Finished goods 140.886.458 039 43.379.267 4. Merchandise 040 5. Prepayments for inventories ٥I 041 133.552.712 6. Long - term assets held for sales 042 Ö. 7. Biological assets 467.705.229 043 288.498.889 1. Receivables from related parties 044 177.755.132 2. Accounts receivable 045 046 Ü. 3. Receivables from participating parties 645.019 613.890 4. Receivables from employees and members of related parties 047 674.630 537.276 048 5. Receivables from government and other institutions 049 131.559 109.413 6. Other receivables III. SHORT TERM FINANCIAL ASSETS (051 to 057) 050 92.781.798 105 240 350 051 1. Shares (stocks) in related parties Ö 91.432.811 102.518.147 052 2. Loans given to related parties 053 3. Participating interests (shares) 0 0 4. Loans to entrepreneurs in whom the entity holds participating interests 054 210.000 5. Investments in securities 055 1.840.000 056 627.489 560.952 6. Loans, deposits, etc. 511.498 7. Other financial assets 057 321.251 058 132.013.675 33.588,969 IV. CASH AT BANK AND IN CASHIER 059 3.640.252 D) PREPAID EXPENSES AND ACCRUED REVENUE 4.064.069 3.086.894.071 060 2.984.370.789 E) TOTAL ASSETS (001+002+034+059) 061 1.047.050.826 1.104.308.909 F) OFF-BALANCE RECORDS	Obligator: Podravka prehrambena industrija d.d., Koprivnica
			Current year
			o
			0
			O
			Ű.
	II. TANGIBLE ASSETS (011 to 019)		820.235.347
			45.420.448
			448.119.825
			256.567.994
			20.688.318
			8.244.924
			40,481,687
			712.151
			952.849.728
			128.868.888
			34.313.004
			146.534.539
			41.307.386
			800.000
			133.552.712
	II. RECEIVABLES (044 to 049)		461.529.129
			254.344.040
			205.924.510
			$\Omega$

Obligator: Podravka prehrambena industrija d.d., Koprivnica
Item	AOP code	Last year (net)	Current year (net)
1	$\overline{2}$	3	Ă
LIABILITIES AND CAPITAL $\alpha$
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	2.122.571.492	2.166.245.884
I. SUBSCRIBED CAPITAL	063	1.566.400.660	1.566.400.660
II. CAPITAL RESERVES	064	182.267.472	182.267.472
III.RESERVES FROM PROFIT (066+067-068+069+070)	065	284,908.054	284.908.054
1. Reserves prescribed by low	066	26.625.605	26.625.605
2. Reserves for treasury shares	067	147.604.502	147.604.502
3. Treasury stocks and shares (deduction)	068	60.502.679	60.502.679
4. Statutory reserves	069	0
5. Other reserves	070	171.180.626	171,180.626
IV. REVALUATION RESERVES	071	0
V. RETAINED EARNINGS OR ACCUMULATED LOSS (073-074)	072	2.558.087	88,995,306
1. Retained earnings	073	2.558.087	88,995,306
2. Accumulated loss	074	0	0
VI. PROFIT/LOSS FOR THE CURRENT YEAR (076-077)	075	86.437.219	43.674.392
1. Profit for the current year	076	86.437.219	43.674.392
2. Loss for the current year	077	0	0
IX. MINORITY INTERESTS	078	Ō
B) PROVISIONS (080 to 082)	079	35.214.202	34.544.339
1. Provisions for pensions, severance pay, and similar liabilities	080	18.653.066	18.653.066
2. Reserves for tax liabilities	081	Ō
3. Other reserves	082	16.561.136	15.891.273
C) LONG - TERM LIABILITIES (084 to 092)	083	337.601.623	296.957.791
1. Liabilities to related parties	084	ũ
2. Liabilities for loans, deposits etc.	085	Ō
3. Liabilities to banks and other financial institutions	086	337.601.623	296.957.791
4. Liabilities for received prepayments	087	Ŭ	Ŭ
5. Accounts payable	088	Ō	Ō
6. Liabilities arising from debt securities	089	Ö	o
7. Liabilities to entrepreneurs in whom the entity holds participating interests	090	Ŭ	Ŭ
8. Other long-term liabilities	091	Ō	ō
9. Deferred tax liability	092	0
D) SHORT - TERM LIABILITIES (094 to 105)	093	551.895.109	435.763,696
1. Liabilities to related parties	094	51.446.509	43.063.458
2. Liabilities for loans, deposits etc.	095	393.087	571.377
3. Liabilities to banks and other financial institutions	096	182.542.931	159.719.372
4. Liabilities for received prepayments	097	$\theta$
5. Accounts payable	098	276.375.655	177.902.116
6. Liabilities arising from debt securities	099	0	0
7. Liabilities to entrepreneurs in whom the entity holds participating interests	100	0	0
8. Liabilities to employees	101	32.411.496	27.713.060
9. Liabilities for taxes, contributions and similar fees	102	6.604.378	24.637.263
10. Liabilities to share - holders	103	1.493.324	1.489.064
11. Liabilities for long-term assets held for sale	104	0
12. Other short - term liabilities	105	627.729	667.986
E) DEFFERED SETTLEMENTS OF CHARGES AND INCOME DEFERRED TO FUTURE PERIOD	106	39.611.645	50.859.079
F) TOTAL - CAPITAL AND LIABILITIES (062+079+083+093+106)	107	3.086.894.071	2.984.370.789
G) OFF-BALANCE RECORDS	108	1.047.050.826	1.104.308.909
APPENDIX to balance sheet(to be filled in by entrepreneur that prepares consolidated annual financial report)
CAPITAL AND RESERVES
1. Attributed to equity holders of parent company	109	0	$\mathbf{0}$
2. Attributed to minority interest	110	0	0

Item	AOP	Last year	Current year
đ ta seu	code $\mathbf{2}$	3	A
CASH FLOW FROM OPERATING ACTIVITIES
1. Profit before tax	001	10.571.992	53,520,098
2. Depreciation	002	25.029.096	22.097.258
3. Increase in short term liabilities	003	Ō
4. Decrease in short term receivables	004	12,363,661	3,910.479
5. Decrease in inventories	005	Ö
6. Other increase in cash flow	006	8.914.348	103.504
I. Total increase in cash flow from operating activities (001 to 006)	007	56.879.097	79.631.339
1. Decrease in short term liabilities	008	76.544.236	89.515.937
2. Increase in short term receivables	009	O.
3. Increase in inventories	010	17.721.324	6.207.520
4. Other decrease in cash flow	011	7.894.307	7.039.061
II. Total decrease in cash flow from operating activities (008 to 011)	012	102.159.867	102.762.518
A1) NET INCREASE IN CASH FLOW FROM OPERATING ACTIVITIES (007-012)	013	Ō
A2) NET DECREASE IN IN CASH FLOW FROM OPERATING ACTIVITIES (012-007)	014	45.280.770	23.131.179
CASH FLOW FROM INVESTING ACTIVITIES
1. Cash inflows from sales of long-term tangible and intangible assets	015	758.214	168,516
2. Cash inflows from sales of equity and debt instruments	016
3. Interests receipts	017	820.658	413.151
4. Dividend receipts	018
5. Other cash inflows from investing activities	019	7.595.811	104.343
III. Total cash inflows from investing activities (015 to 019)	020	9.174.683	686,010
1. Cash outflow for purchase of long-term tangible and intangible assets	021	22.868.642	12.013.499
2. Cash outflow for acquisition of equity and debt financial instruments	022	1.087.868	5.360
3. Other cash outflow for investing activities	023	9,272.211	3.044.083
IV. Total cash outflow for investing activities (021 do 023)	024	33,228,721	15.062.942
B1) NET INCREASE IN CASH FLOW FROM INVESTING ACTIVITIES (020-024)	025
B2) NET DECREASE IN CASH FLOW FROM INVESTING ACTIVITIES (024-020)	026	24.054.038	14.376.932
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash inflow from issuing property and debt financial instruments	027	0	$\overline{0}$
2. Proceeds from the credit principal, promissory notes, borrowings and other loans	028	9.043.634	Ò
3. Other proceeds from financial activities	029	6.945.454	$\theta$
V. Total cash inflows from financial activities (027 to 029)	030	15,989,088	ö
1. Cash outflow for repayment of credit principal and bonds	031	42.021.944	60.916.595
2. Cash outflow for dividends paid	032	Ũ	$\ddot{0}$
3. Cash outflow for financial lease	033	o	$\Omega$
4. Cash outflow for purchase of treasury shares	034	o	o
5. Other cash outflow for financial activities	035
VI. Total cash outflow for financial activities (031 to 035)	036	42.021.944	60.916.595
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (030-036)	037
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (036-030)	038	26.032.856	60.916,595
Total increase in cash flow (013 - 014 + 025 - 026 + 037 - 038)	039
Total decrease in cash flow (014 - 013 + 026 - 025 + 038 - 037)	040	95.367.664	98.424.706
Cash and cash equivalents at the beginning of the period	041	136.553.033	132.013.675
Increase of cash and cash equivalents	042	o
Decrease of cash and cash equivalents	043	95.367.664	98.424.706
Cash and cash equivalents at the end of the period	044	41.185.369	33.588.969

Item		Last year	Current year
$\mathbf{1}$	$\overline{2}$	3	$\Delta$
1. Subscribed capital	001	1.566.400.660	1.566.400.660
2. Capital reserves	002	182.267.472	182.267.472
3. Reserves from profit	003	284.908.054	284.908.054
4. Retained earnings or accumulated loss	004	2.558.087	88.995.306
5. Profit or loss for the current year	005	86.437.219	43.674.392
6. Revaluation of long - term tangible assets	006
7. Revaluation of intangible assets	007
8. Revaluation of financial assets available for sale	008
9. Other revaluation	009
10. Total capital and reserves (AOP 001 do 009)	010	2.122.571.492	2.166.245.884
11. Currency gains and losses arising from net investement in foreign operations	011
12. Current and deferred taxes (part)	012
13. Cash flow hedging	013
14. Changes in accounting policy	014
15. Correction of significant errors in prior period	015
16. Other changes of capital	016	46.491.955	43.674.392
17. Total increase or decrease in capital (AOP 011 do 016)	017	46.491.955	43.674.392
17 a. Attributed to equity holders of parent company	018	O
17 b. Attributed to minority interest	019

Notes to the financial statements:

The accounting policy in 1-3 2018 did not change.

STATEMENT FROM EXECUTIVES RESPONSIBLE FOR PREPARING FINANCIAL STATEMENTS

Koprivnica, 25 April 2018

Contact

Podravka Inc. Ante Starčevića 32, 48 000 Koprivnica, Croatia www.podravka.hr

Investor relations e-mail: ir@podravka.hr Tel: +385 48 65 16 65