Podravka d.d. — Interim / Quarterly Report 2019

Jul 23, 2019

Koprivnica, 23 July 2019

PODRAVKA INC. BUSINESS RESULTS FOR 1-6 2019 PERIOD

Content:

• General information
• Management report on the achieved business results of Podravka Inc. for the 1-6 2019 period
• Unaudited, unconsolidated financial reports for the 1-6 2019 period
• 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.

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

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

Management Board members as at 30 June 2019

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

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

Koprivnica, 23 July 2019

MANAGEMENT REPORT ON THE ACHIEVED BUSINESS RESULTS OF PODRAVKA INC. FOR THE 1-6 2019 PERIOD

Key business highlights of the 1-6 2019 period

In the 1-6 2019 period, Podravka Inc. recorded operating income of HRK 1,053.5 million, which is 9.6% higher than in the same period of the previous year. The growth in sales revenues came on the back of stronger selling and marketing activities, demand for newly launched products and expansion of distribution of certain categories. Total operating expenses are 10.7% higher, primarily due to higher sales realised and higher staff costs as a consequence of the planned improvement of employees' material rights. Higher sales realised and a better sales mix resulted in positive HRK 100.4 million of operating profit, which is at the same level as in the comparative period.

In 1-6 2019, finance income of HRK 24.5 million was recorded, with HRK 8.9 million of finance costs, while the effective tax rate was 15.8%. Profit for the period in 1-6 2019 amounted to HRK 97.7 million.

As at 30 June 2019, total assets of Podravka Inc. amount to HRK 3,069.8 million, 2.5% higher than at the end of 2018. The significant increase on the assets side was in line items Trade receivables and Receivables from undertakings within the group following higher realisation of sales to related companies in line with the sales growth, but also Inventories of trade goods and Tangible assets. These items are partly reduced by the decrease in the position Cash at bank. On the equity and liabilities side, the most significant increase was recorded in the line item Liabilities arising from the share in the result and Reserves from profit, while a significant decrease was recorded by the position Liabilities to banks and other financial institutions.

Cash flow from operating activities in 1-6 2019 amounted to positive HRK 44.2 million, as a consequence of operations and movements in the working capital. Cash flow from investing activities at the same time amounted to negative HRK 16.7 million, primarily due to cash used for the purchase of non-current tangible and intangible assets. In the same period, cash flow from financing activities amounted to negative HRK 69.6 million due to the repayment of a portion of borrowings. In total, in 1-6 2019 cash and cash equivalents at bank and in hand decreased by HRK 42.1 million, and consequently the amount of cash and cash equivalents as at 30 June 2019 was HRK 26.0 million.

UNAUDITED, UNCONSOLIDATED FINANCIAL REPORTS FOR THE 1-6 2019 PERIOD

MANAGEMENT BOARD

Annex 1
	ISSUER'S GENERAL DATA
Reporting period:	01.01.2019.	to 30.06.2019.
Year:	2019
Quarter:	2
	Quarterly financial statements
Registration number (MB): 03454088		Issuer's home Member HR
		State code:
Entity's registration 010006549 number (MBS):
Personal identification 18928523252 number (OIB):		549300TMC6BYESPQ7W85 LEI:
Institution 1627 code:
Name of the issuer: PODRAVKA prehrambena industrija d.d., KOPRIVNICA
48000 Postcode and town:		KOPRIVNICA
Street and house number: ANTE STARČEVIĆA 32
E-mail address: podravka@podravka.hr
Web address: www.podravka.com
Number of employees 3348 (end of the reporting
Consolidated report: KN	(KN-not consolidated/KD-consolidated)	KN KD
Audited: RN	(RN-not audited/RD-audited)	RN RD
Names of subsidiaries (according to IFRS):		Registered office: MB:
		Yes
No Bookkeeping firm:	(Yes/No)	No
Contact person: Artner Kukec Julijana		(name of the bookkeeping firm)
Telephone: 048 653 055	(only name and surname of the contact person)
E-mail address: Julijana.ArtnerKukec@podravka.hr
Audit firm:
(name of the audit firm) Certified auditor:

STATEMENT OF PROFIT OR LOSS

for the period 01.01.2019. to 30.06.2019.

in HRK

Submitter: PODRAVKA prehrambena industrija d.d., KOPRIVNICA

Item		ADP	Same period of the previous year		Current period
		code	Cumulative		Quarter	Cumulative	Quarter
1		2	3		4	5	6
PODRAVKA Inc., Koprivnica, Ante Starčevića 32, The Commercial Court in Bjelovar, CRN: 010006549, PIN: 18928523252, Privredna banka Zagreb P.L.C., Zagreb, Radnička cesta 50, IBAN: HR94 2340 0091 1000 9852 6, share capital: HRK 1,566,400,660.00, paid in full, total number of shares issued: 7,120,003, nominal share value: HRK 220.00, President of the Supervisory Board: Ž. Vukina, President of the Management Board: M. Pucar, members of the Management Board: D. Doko, H. Kolarić, Lj. Šapina, M. Đerek

BALANCE SHEET balance as at 30.06.2019.

		in HRK
Submitter: PODRAVKA prehrambena industrija d.d., KOPRIVNICA

PODRAVKA Inc., Koprivnica, Ante Starčevića 32, The Commercial Court in Bjelovar, CRN: 010006549, PIN: 18928523252, Privredna banka Zagreb P.L.C., Zagreb, Radnička cesta 50, IBAN: HR94 2340 0091 1000 9852 6, share capital: HRK 1,566,400,660.00, paid in full, total number of shares issued: 7,120,003, nominal share value: HRK 220.00, President of the Supervisory Board: Ž. Vukina, President of the Management Board: M. Pucar, members of the Management Board: D. Doko, H. Kolarić, Lj. Šapina, M. Đerek

STATEMENT OF CASH FLOWS - indirect method for the period 01.01.2019. to 30.06.2019.

		in HRK
Submitter: PODRAVKA prehrambena industrija d.d., KOPRIVNICA

PODRAVKA Inc., Koprivnica, Ante Starčevića 32, The Commercial Court in Bjelovar, CRN: 010006549, PIN: 18928523252, Privredna banka Zagreb P.L.C., Zagreb, Radnička cesta 50, IBAN: HR94 2340 0091 1000 9852 6, share capital: HRK 1,566,400,660.00, paid in full, total number of shares issued: 7,120,003, nominal share value: HRK 220.00, President of the Supervisory Board: Ž. Vukina, President of the Management Board: M. Pucar, members of the Management Board: D. Doko, H. Kolarić, Lj. Šapina, M. Đerek

MANAGEMENT BOARD
STATEMENT OF CHANGES IN EQUITY
for the period from 1.1.2019 t o 30.6.2019														in HRK

PODRAVKA Inc., Koprivnica, Ante Starčevića 32, The Commercial Court in Bjelovar, CRN: 010006549, PIN: 18928523252, Privredna banka Zagreb P.L.C., Zagreb, Radnička cesta 50, IBAN: HR94 2340 0091 1000 9852 6, share capital: HRK 1,566,400,660.00, paid in full, total number of shares issued: 7,120,003, nominal share value: HRK 220.00, President of the Supervisory Board: Ž. Vukina, President of the Management Board: M. Pucar, members of the Management Board: D. Doko, H. Kolarić, Lj. Šapina, M. Đerek

	ADP code	Attributable to owners of the parent
Item		Initial (subscribed) capital	Capital reserves Legal reserves		Reserves for treasury shares	Treasury shares and holdings (deductible item)		Statutory reserves Other reserves	Revaluation reserves	Fair value of financial assets available for sale	Cash flow hedge - effective portion	Hedge of a net investment in a foreign operation - effective portion	Retained profit / loss brought forward	Profit/loss for the business year	Total attributable to owners of the parent	Minority (non controlling) interest	Total capital and reserves
1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16 (3 to 6 - 7 + 8 to 15)	17	18 (16+17)

PODRAVKA Inc., Koprivnica, Ante Starčevića 32, The Commercial Court in Bjelovar, CRN: 010006549, PIN: 18928523252, Privredna banka Zagreb P.L.C., Zagreb, Radnička cesta 50, IBAN: HR94 2340 0091 1000 9852 6, share capital: HRK 1,566,400,660.00, paid in full, total number of shares issued: 7,120,003, nominal share value: HRK 220.00, President of the Supervisory Board: Ž. Vukina, President of the Management Board: M. Pucar, members of the Management Board: D. Doko, H. Kolarić, Lj. Šapina, M. Đerek

Notes to the financial statements:

From 1 January 2019 Podravka Inc. applies IFRS 16 Leases. According to new standard, Podravka Inc. recognises right-of-use assets based on cost method, and leases liability in amount of present value of minimum future lease payments. Exceptions from this recognition is applied for short term leases and leases of low value asset. Right-of-use asset is depreciated by the end of asset's useful life, and lease liabilities are measured at the effective interest rate method. In the statement of financial position, right-of-use assets are included within tangible asset and lease liabilities are reported within long term and short-term liabilities. As at 30 June 2019 value of Podravka Inc. right-of-use asset amounts to HRK 37.7 mil. and lease liabilities amounts to HRK 38.1 mil.

STATEMENT FROM EXECUTIVES RESPONSIBLE FOR PREPARING FINANCIAL STATEMENTS

Koprivnica, 23 July 2019

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