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Fortenova Group Half-Year 2021 Results Presented to the DR Holders

31.08.2021.

Fortenova Group, now reporting with Mercator consolidated from 1st May 2021, and also benefiting from improved trading condition vs H1/2020, recorded a consolidated revenue from continuing operations increase of 35 per cent. In addition, H1/2021 adjusted consolidated EBITDA was 14 per cent higher, and the Group recorded a net profit in the amount of HRK 318 million vs a loss in H1/2020. At the end of H1/2021 the Group also had more than HRK 1,8 billion of cash on its accounts so maintaining its strong liquidity position. These were the key highlights of Fortenova Group’s half-year results presentation to its depositary receipt holders.

 

“With consolidated revenues from continuing operations of HRK 12 billion, adjusted consolidated EBITDA of HRK 1.1 billion and HRK 318 million of net profit we can proudly say that behind us is the best first half of the year ever, not only in terms of performance, but also in terms of several major projects having been closed, which have placed the Group on track in terms of strengthening its profitability. First and foremost of these is business integration of Mercator and its consolidation into our financial statements from 1 May 2021. Given the excellent tourist season, the Group is continuing to trade strongly in Q3, and this along with the synergies that we are achieving in Retail, and the expected closing of the Frozen Food Business Group sale to Nomad Foods will mean that the Fortenova Group’s financial position will continue to improve” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, commenting on the results achieved in H1/2021.

 

When it comes to non-consolidated results of the core businesses pertaining to 21 companies in the Retail, Food and Agriculture divisions of Fortenova Group, the total generated net sales revenue increased by 2.4 per cent, EBITDA grew by 12.5 per cent, while EBIT was as much as 39.5 per cent higher compared to the same period last year, when Mercator is included on a like for like basis.

In terms of the respective divisions, Food division generated the best improvement in results compared to last year, with a 12.5 per cent higher net sales revenues, 23.6 per cent higher EBITDA and 40.1 per cent higher EBIT in the first half of the year, following the impact of COVID-19 on H1/2020 results and the launch of several innovative products on the market in 2021.

 

The Retail division saw revenue growth of 1.2 per cent, EBITDA grew 10.9 per cent and EBIT grew 65.9 per cent, with Mercator included on a like for like basis. These improvements are a result of synergies, improved general trading as well as the wholesale segment in Konzum experiencing a strong recovery, following the relaxation of COVID-19 measures and the opening of HORECA channels.

Due to the major decrease in pork selling prices vs H1/2020, the Agriculture division incurred a decline in revenue of 12.5 per cent, which resulted in an EBITDA decline of HRK 19 million and EBIT decline of HRK 21 million.

 

“In H1/2021 Fortenova Group was very focused on in-market execution, delivering planned improvements to the business, and completing a number of key projects. This focus on delivery is clearly shown with improved operating performance, the divestment of the Frozen Food Business Group fully on track, Mercator debt being refinanced alongside 89.73% of its shares transferred to Fortenova Group and its integration into the Retail Division proceeding very successfully, as well as several non-core business divestment transactions being completed, enabling further focus on the core divisions. Overall, this has been a very positive H1 for the Group.” – said James Pearson, Fortenova Group’s Executive Director of Finance.

Fortenova Group presents 2020 results, assessing them as good

30.04.2021.

In 2020 Fortenova Group performed well despite the adverse effect of the COVID-19 pandemic, which impacted April – December of 2020 business operations. The COVID-19 impact was particularly felt in Croatia given the size of tourism in the country. The Group maintained or even increased its market shares in a number of key product categories, realized several key strategic projects and due to the implemented preventive measures, alleviated the impact of the crisis and increased its cash liquidity by HRK ~350 million, to an amount of HRK 2 billion at year end.

Those were the basic features of the 2020 operations highlighted in the presentation of the 2020 results held for Fortenova Group’s DR holders.

Fortenova Group’s total consolidated revenue from continuing operations for the year amounted to HRK 21 billion, while the total consolidated adjusted EBITDA amounted to HRK 1.3 billion.

Compared to the 2019 pro forma consolidated results of Fortenova Group, net of the results of the discontinued operations Kompas Ljubljana, Kompas Porec and the entire Kompas network for both periods, Fortenova Group’s total consolidated revenue was 11.7 per cent lower, while on the thus adjusted basis consolidated EBITDA was 30.1 per cent lower. The announced 2020 results are net of Mercator, which will be integrated into Fortenova Group in 2021.

“The COVID-19 pandemic left a trail on everything, including the operating results of our companies. It had the strongest negative effect on those companies that are closely related to the tourist industry and the HORECA channel. Also, the markets where the tourist season has a strong impact on the GDP, such as Croatia and Montenegro, were hit more severely. Serbia, for example, has not felt the consequences of the weak tourist season, but the market was faced with all the other consequences of the pandemic. Nevertheless, our companies successfully met and even outperformed their 2020 plans, which had been corrected last year in view of the pandemic and envisaged lower results than those in 2019” – said Fabris Peruško, Chief Executive Officer of Fortenova Group and Member of the Board of Directors, commenting on the 2020 results.

Comparing the non-consolidated results of core businesses including 16 companies in the retail, food and agriculture divisions of Fortenova Group with their 2019 performance, the 2020 non-consolidated total revenues in the amount of HRK 23 billion were six per cent lower, while EBITDA in the amount of HRK 1,6 billion was 16.8 per cent lower.

The pandemic had the strongest negative effect on the operations of the Food Division companies that are directly linked to the HORECA channel and the consumption during the tourist season, as well as the Retail and Wholesale Division. Consequently, both their non-consolidated revenues and EBITDA were lower than in the year before. Non-consolidated total revenue of the Food Division was nine per cent lower than in 2019, while the non-consolidated revenue of Retail decreased by five per cent. The non-consolidated revenue of the Agriculture Division was only one per cent lower compared to 2019.

The non-consolidated EBITDA of Food was 12.5 per cent lower compared to the 2019 performance, while in Retail the drop amounted to 6.5 per cent. Due to the negative impact of the major drop in pig prices in Q4/2020, the drop in cattle prices and lower yields of agricultural crops, EBITDA in Agriculture was lower by 56.8 per cent compared to the year before.

Nevertheless, both Dijamant and Frikom also performed strongly as they not only gained share but benefitted from increased consumption in Serbia with COVID-19 restrictions limiting travel from the country. Also, despite the lack of tourists, Konzum was on a like-for-like basis able to keep its 2020 retail sales above 2019 by 0,3 per cent, as it performed well in manging its supply chain and benefited from its store format and on-line offer.

“As Konzum generates around 40 per cent of its total revenues and around 70 per cent of its annual EBITDA in the four months from June to September, the results achieved in 2020 are excellent, indeed. Looking at the entire Fortenova Group, the overall negative effect of the pandemic and non-cash foreign exchange losses could unfortunately not be compensated, but given the projects that we have initiated, we expect a performance improvement already in 2021. A refinancing of Fortenova Group’s debt at more favourable conditions is planned to take place in the period of the next two years and will additionally strengthen the company’s financial position” said James Pearson, Fortenova Group’s Executive Director for Finance.

 “We are satisfied with the 2020 operating performance due to, among other things, the implementation of a number of measures intended to alleviate the negative effects of the pandemic, as well as additional improvements achieved in our business operations and cost control. In spite of the crisis caused by the pandemic, by exerting exceptional efforts and with increased costs related to the health preservation of our people and to securing an uninterrupted supply chain for the market under the conditions of the crisis, we were able to realize several development projects, too. Last year we acquired the assets of Meggle’s Osijek-based dairy plant and have now recently launched the new Kravica Kraljica dairy brand. Furthermore, Jamnica’s investments in development resulted in the launch of the new product Botanica last year, and of Barts - the first alcoholic sparkling water in Croatia – this year, which is now building distribution. Further new product launches, upgrades and improvements will be appearing from our other food businesses as we go through this year and complete the development work done in 2020.

Looking ahead, two major projects that will positively affect our results in 2021, are the divestment of the Frozen Food Business and the integration of Mercator. We are also hoping that this year’s tourist season will be better than last year’s, ahead of a full tourist season returning in 2022. What cannot be seen directly in these results, is the engagement of all our employees in making the business run smoothly under the crisis circumstances and in meeting all plans set. I would like to sincerely thank all Fortenova Group employees for that, as it really made an impact.

Through 2020 and already in 2021 Fortenova management team has delivered on a number of key projects specifically managing the impact of COVID-19, completing the transfer of Mercator and fixing its capital structure through the sale of the Frozen business, which puts the Group into a fundamentally stronger position going forward.” – Fabris Peruško said.

Mercator shares transferred from Agrokor to Fortenova Group

23.04.2021.

Today 69.57 per cent of shares of Poslovni sistem Mercator have been transferred from Agrokor d.d. to Fortenova Group, whereby Mercator has become an integral part of the Retail Division of Fortenova Group, which now owns 88.1 per cent of Mercator shares. The transfer of Mercator shares was simultaneous with the refinancing by Fortenova Group of the debt that Mercator had with 55 banks, in the total amount of EUR 385 million. In cooperation with its creditors, HPS Partners and VTB, Fortenova Group has secured the required funds to entirely replace Mercator’s aforementioned debt and thus ensured seamless transfer of ownership of Mercator from a bankrupt to a stable company with a consolidated ownership and creditor structure. As of today, Fortenova Group’s retail network consists of around two and a half thousand Mercator and Konzum points of sale with a total of 39 thousand employees working on five markets in the region, with a population of almost 20 million people. 

Agrokor had acquired Mercator shares in 2014, but until today Mercator was not operationally integrated into the business of its owner. “As of today Fortenova Group is proud owner of Mercator, decided in the intention to be the best owner that Mercator has ever had. This is a new beginning that opens up a number of new possibilities for all of us. Fortenova Group’s new, optimized capital structure provides for stability and the ability for strong investments in our companies going forward to drive their future growth. With Mercator within Fortenova Group we are consolidating the region’s largest retail network, increasing the stability of the supply chain, jobs and tax revenues of the countries in which we operate as well as opening new opportunities and continuing to support the growth of local suppliers” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors. Peruško pointed out that following the integration of Mercator and the divestment of the Frozen Food Business, with over 50 thousand employees Fortenova Group will be the region’s largest employer, generating approximately EUR 5 billion in revenue, operating profits of more than EUR 270 million and planning for this year, in spite of the continued pandemic, to realize more than EUR 125 million of capital expenditures.

"Today’s closing of the additional financing to enable the Mercator transfer is fully in line with our strategic financial plans. We have made great progress over the last few weeks in delivering on our plans not only with this refinance arrangement but also with the Frozen divestment, other non-core sales and with a very strong Q1 business performance. At the heart of this has been a multinational, multi-location team that has been completing a really large amount of work and they deserve huge credit for all that has been achieved" – commented James Pearson, Fortenova Group’s Chief Financial Officer.

Siegfried Ganshorn, Fortenova Group’s Executive Director of Retail, called the transfer of Mercator to Fortenova Group “one of the most important days in the history of Mercator, Konzum and Fortenova Group”. “To be where we are today would not have been possible without our people, the professional management, the support and help of our suppliers and all other partners and stakeholders that we trust. Our joint efforts will enable us to utilize our full potential to the benefit of our customers” – Ganshorn said. As the crucial parts of Fortenova Group’s retail development strategy he singled out the operational excellence, the clear differentiation against competitors, the continuous improvement of the business’s position and increase in market share, the flexibility of microlocations and the true multichannel experience. “The foundation and the key factor that will enable us to realize that is the developed digital transformation strategy, due to which our significant investments will be into digital development and e-commerce, intended to drive growth in all countries” – Ganshorn concluded.

“Mercator today is not only a retailer, but much more. It is a platform connecting employees, customers and suppliers, that has successfully developed numerous new sales concepts. The employees’ knowledge, efforts, experience, abilities and sense of belonging are the creators of Mercator’s success. Being a company that cooperates with over three thousand suppliers and realizes purchases worth EUR 1.2 billion a year from local and regional partners, this merger provides a great business opportunity for the long-term development of their brands” – said Tomislav Cizmic, President of the Management Board of Mercator. In his words, along with the continued accelerated digitalization and the development of digital multichannel platforms, Mercator’s priorities in consolidating Fortenova Group’s retail are the strengthening of the store network and the development of a modern logistics infrastructure.

“Over the last two years since the Settlement Plan implementation and the successful financial restructuring of the overleveraged Agrokor, Fortenova Group was able to achieve a high operational performance, as reflected in increased operating profits by around EUR 100 million in the period from 2017 to 2019, as well as in a cash flow improvement of almost EUR 100 million during 2020, in spite of the negative effects of the COVID-19 pandemic on the operations. Fortenova Group has also strengthened its capital structure and improved its financial position, with the leverage ratio reduced from seven to around four times, as expected to be achieved by the end of this year. Hence, after a long period of uncertainty, today Fortenova Group is a financially stable company that is beyond any doubt capable of growth and that will, with its development strategy and by realizing its priorities, also preserve existing and open new jobs. I therefore wish all our colleagues from Mercator a warm welcome to the large community of Fortenova Group’s hard working and talented employees. I also look forward to continuing the cooperation with our key partners, small and large, local and global suppliers and to our common further growth” – concluded Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors.

18.53 percent of Mercator shares transferred to Fortenova group

31.03.2021.

On Tuesday, 30th March 2021, the process of transferring the shares of Poslovni sistem Mercator to Fortenova Group has started. The shares held by Sberbank in Poslovni sistem Mercator were swapped for shares in Fortenova Group and thus 18.53 percent of Mercator shares were transferred to Fortenova Group.

“Yesterday’s commencement of the Mercator share transfer to Fortenova Group  and the divestment of the Frozen Food Business Area concluded on Monday are part of Fortenova Group’s portfolio optimization intended to strengthen and consolidate the capital structure and key areas in which Fortenova Group is market leader. Once the Mercator share transfer to Fortenova Group is completed, together with Mercator Fortenova Group will be the indisputable regional market leader in retail, with significant capacity for investments and further growth” – said Fabris Peruško commenting on the commencement of the Mercator share transfer procedure.

Peruško also pointed out that in the year of the pandemic Fortenova Group companies have been key in securing the provision of supplies for customers on the markets of their operation, also due to thousands of large and small, local and international suppliers that Fortenova Group companies have had long-standing and stable business relations with.

“The forthcoming integration of Mercator with Fortenova Group’s retail is a great opportunity for all key suppliers” – Peruško emphasized, adding on the report of the Slovenian Extraordinary Commissioner at Mercator published on Wednesday which has confirmed full compliance of Mercator’s operations with the Slovenian Lex Mercator. The Report points out that Mercator has offered its strategic suppliers in Slovenia to sign long-term cooperation agreements, signed by all those who have found their business interest in such agreements.

Fortenova Group Signs Sales Agreement with Nomad Foods for Divestiture of its Frozen Food Business

29.03.2021.

Fortenova Group d.d. and Nomad Foods Limited have signed a Sale and Purchase Agreement (SPA) for the Frozen Food Business Group (FFBG) consisting of Ledo plus d.o.o., Ledo Citluk d.o.o. and Frikom d.o.o. alongside several smaller affiliated companies.

The value of the transaction is EUR 615 million, on a debt-free, cash-free basis, with completion planned for Q3 2021. Upon completion, Nomad Foods will become the owner of FFBG which comprises a leading European frozen food portfolio of iconic local brands with strong consumer awareness in Croatia, Serbia, Bosnia & Herzegovina and several other countries in South East Europe (SEE). With more than half a century of tradition, the FFBG is the largest producer and distributors of ice cream and frozen foods in its respective markets. 

“This is a transformational transaction for Fortenova Group with all the funds to be used to deleverage the Group and deliver a Fortenova Group that is, after many years, financially strong and able to fully invest in all its businesses”, said James Pearson, Fortenova Group’s Chief Financial Officer. 

 “Our Frozen Food Business Group is the market leader in the region where we operate, and I am glad that we have achieved our main goal in its sales process. The goal was, over and above maximizing value, to conclude this transaction with a strategic partner who will make the maximum contribution to further the development of FFBG and recognize the full value and potential of this business and its people”, said Fabris Peruško, Fortenova Group’s Chief Executive Officer and member of the Board of Directors. “With completion of this transaction we will fulfil a key prerequisite for the capital structure optimization that will enable strong investment in our businesses and drive their future growth. I am very thankful to all people in the Frozen Food Group and in the Fortenova Group who have worked very hard over the past six months to make this happen. Knowing that our Frozen Food is going to be in very good hands, we are looking forward to cooperating with Nomad Foods as an important future business partner in this region”, concluded Peruško.

Completion of the transaction is subject to regulatory approvals in the applicable markets as well as Fortenova Group’s shareholders’ approval. Fortenova Group’s Board of Directors, consisting also from representatives of majority shareholders, has unanimously supported signing of the SPA with Nomad Foods.

Fortenova Group was advised on this transaction by Akin Gump Strauss Hauer & Feld LLP, Bogdanovic, Dolicki & Partners Law Firm, Citigroup Global Markets Europe AG, Isailovic & Partners Law Firm, KPMG Croatia, Maric & Co Law Firm and VTB Bank (Europe) SE.

Fortenova Group shareholders adopt all proposed decisons at the Assembly – there are no more obstacles for the transfer of Mercator to Fortenova Group

12.03.2021.

At the Meeting of Holders of Depositary Receipts issued by Fortenova Group STAK Stichting, held today in the Netherlands, the shareholders have voted in favour of all the decisions proposed, among others those regarding the consolidation of Fortenova Group’s operations related to the transfer of shares of Poslovni sistem Mercator from Agrokor to Fortenova Group. Thus Fortenova Group has received approval to extend the existing financial arrangement with HPS Partners and VTB Bank by the amount of not more than EUR 390 million, to be used as a loan from Fortenova Group to Mercator intended to refinance Mercator’s bank debt.

The shareholders have also adopted the decision to swap the shares held by Sberbank in Mercator for Fortenova Group shares, whereby the 18.53 per cent of Mercator shares owned by Sberbank shall be transferred to Fortenova Group. At the same time, with this swap Sberbank’s share in Fortenova Group’s ownership rises to 44 per cent.

Given that on 5th March 2021 the Competition Protection Commission of the Republic of Serbia approved the intention of Fortenova Group to acquire control over the company Poslovni sistem Mercator d.d., Ljubljana on the market of the Republic of Serbia, all the remaining key prerequisites for the soon to be effected transfer of shares of Poslovni sistem Mercator to Fortenova Group have been met.

„I would like to thank the shareholders who have recognized the importance of the proposed decisions for the future of Fortenova Group and with their votes provided support for the realization of plans intended to strengthen our operations and affirm our position as the largest employer in South and Southeast Europe. With this shareholder decisions and last week’s approval of the Serbian regulator there are no formal obstacles any more for Mercator to become part of Fortenova Group by the end of this month. There work ahead of us now is related to closing arrangements and contracts to put the decisions of the Assembly into practice. In the previous period we have prepared the detailed steps that will now be operationalized and whereby we shall, as already announced on several occasions, proceed with consolidating the company on several levels – in intragroup ownership, Group crediting and last but not least in retail across the region.  We will thus finally be able to start using all the synergic benefits and strengthen our positions in retail on all markets. The transfer of Mercator is also the conclusion of all remaining obligations from the creditors’ Settlement Plan, marking, to my personal satisfaction, the successful closing of the Extraordinary Administration Procedure at Agrokor after exactly four years” – said Fabris Peruško, Member of the Board of Directors and CEO of Fortenova Group.

Regarding other important decisions adopted at the Assembly, the shareholders approved the appointment of Roman Goltsov, Daniel Gusev and Damir Spudic as non-executive members of Fortenova Group’s Board of Directors.

Roman Goltsov is currently Senior Managing Director, Head of the Structured Finance division within the Corporate Lending Department of Sberbank. In this role he directly leads execution teams for various complex restructuring, project finance and acquisition finance transactions. Along with the financial expertise, he is also an expert in oil and gas operations, having spent much of his career on projects in this sector around the world.

Daniel Gusev is managing partner in Gauss Ventures, a European-US Venture Capital firm. He is a seasoned entrepreneur in financial services innovations, having lead product development projects in fintech startup firms and worked as consultant and head of numerous design-driven projects in financial institutions.

Damir Spudic is Member of the Management Board and CFO of Energia naturalis (ENNA) and CFO at ENNA Group, responsible for planning, implementing, managing and running all finance activities. He is also Member of the Supervisory Board of Pevex d.d. and Luka Ploce d.d. and participated in the financial stabilization and successful restructuring of Petrokemija d.d. He joined ENNA Group in 2012.

With the appointment of the new Members to the Board of Directors, the resignation of Miodrag Borojevic from the position as Non-Executive Member of the Board of Directors has become effective and hence his obligations in other governing bodies of individual Fortenova Group operating companies have ceased as well.

Fortenova Group has gained approval for the concentration with Mercator in the Republic of Serbia

05.03.2021.

On 5 March 2021, the Commission for Protection of Competition of the Republic of Serbia approved the intention of Fortenova Group to acquire control over the company Poslovni sistem Mercator d.d., Ljubljana also on the Serbian market.

With this decision of the Serbian Commission, Fortenova Group has fully met the regulatory prerequisites of obtaining approval for the concentration with Mercator from the competent national regulatory authorities for the protection of market competition in all required territories - Serbia, Bosnia and Herzegovina, Montenegro and Northern Macedonia. At the same time, with the concentration approval issued by the European Commission, this prerequisite has been met for the entire EU territory.

“With this decision another formal obstacle has been removed for the realization of Mercator’s transfer to Fortenova Group. We expect the transfer of shares from Agrokor to Fortenova Group to happen by the end of March 2021 which will enable us to start consolidate and further develop our regional retail network” – said Fabris Peruško, Chief Executive Officer of Fortenova Group, commenting on the decision of the Serbian Commission.

Fortenova Group shareholders to vote on important decisions related to Mercator transfer to Fortenova Group at forthcoming Assembly

04.03.2021.

At the Depositary Receipt Holders’ Meeting of Fortenova Group, convened for Friday, 12th March 2021, the shareholders will vote on several decisions important for the business consolidation of Fortenova Group, the largest private employer in Croatia and several countries of the region and one of the largest private companies of South and Southeast Europe. The key decisions to be made by the shareholders are related to the transfer of shares of Poslovni sistem Mercator from Agrokor to Fortenova Group and if adopted, these decisions will provide Fortenova Group with the approval to extend the existing financial arrangement with HPS Partners and VTB Bank by the amount of up to EUR 390 million, to be used as a loan from Fortenova Group to Mercator for the purpose of refinancing Mercator’s bank debt.

The shareholders will also decide on swapping the shares held in Mercator by Sberbank for shares in Fortenova Group. Should the share swap be approved, 18.53% of Mercator shares owned by Sberbank will be transferred to Fortenova Group. At the same time, with that swap Sberbank’s ownership share in Fortenova Group would increase to 44 per cent. With the adoption and realization of these decisions and upon receiving regulatory approval for the concentration of Mercator and Fortenova Group on the market of Serbia, all key prerequisites pending for the soon to be realized transfer of shares of Poslovni sistem Mercator to Fortenova Group would be met.

Besides the decisions related to Mercator, the shareholders will also decide on strengthening Fortenova Group’s Board of Directors which, provided the proposal is accepted and adopted, will comprise three new non-executive members – Roman Goltsov, Daniel Gusev and Damir Spudic, experts with extensive international experience whose qualities, knowledge and professional expertise could significantly contribute to the achievement of Fortenova Group’s business goals. At the same time, with the vote on the appointment of new BoD Members, the resignation of Mr. Miodrag Borojevic from his position as Non-Executive Member of the BoD shall become effective.

"We would like to thank Mr. Borojevic for his contribution to the work of the Board of Directors over the last two years and wish him success in his further professional career" - said Maksim Poletaev, Chairman of Fortenova Group's Board of Directors. With the adoption of the decision on the appointment of new members Mr. Borojevic shall cease to be Member of the BoD and his obligations in the governing bodies of individual Group companies shall cease therewith as well.

“The Assembly ahead of us is very important, as the shareholders will vote on decisions important for our operations in various aspects. First of all, by adopting the proposed decisions related to Mercator the last remaining elements of the Settlement Plan among Agrokor’s creditors shall be met. I am personally particularly pleased that this will formally close all obligations arising from the Settlement Plan, exactly three years after I accepted the challenge of running the Extraordinary Administration Procedure of Agrokor under complex circumstances. With the adoption and delivery of the Assembly’s decisions the ownership within the Group will be consolidated, the new financing will consolidate the credit position as well and therewith we will meet all prerequisites for the consolidation of our retail operations across the region and the strengthening of our position in that industry. Provided that the shareholders adopt the proposed decisions next Friday, I believe that the transfer of Mercator shares will be closed by the end of the month”, said Fabris Peruško, Member of the Board of Directors and Chief Executive Officer of Fortenova Group.

Fortenova Group concluded the sale of Kompas Group to Springwater Capital

01.03.2021.

Fortenova Group has formally completed the sale of Kompas Group to Springwater Capital after fulfilling all regulatory and administrative conditions.

The Kompas Group is the leading travel company in the region with presence in fifteen countries. Kompas is also one of the oldest and largest tour operators in the Adriatic region. Headquartered in Slovenia and Croatia and founded in 1951, Kompas is the leading tour operator in the region, integrated with a network of DMCs in the main European cities focused on escorted tours and Adriatic cruises wholesaling. The company is also involved in retail and online travel agency (OTA), Meetings, Incentives, Conference and Events (MICE) and Business Travel Centre (BTC) segments.

Fortenova Group moves forward with the Frozen Food Business Group divestment in exclusive negotiations with Nomad Foods

11.01.2021.

After completing due diligence process for the sale of the companies Ledo plus d.o.o., Ledo d.o.o. Citluk and Frikom d.o.o., forming together with several smaller affiliated companies the Frozen Food Business Group, Fortenova Group d.d. (www.fortenova.hr) have decided to move forward to the next phase by entering into exclusive negotiations with Nomad Foods (www.nomadfoods.com). 

“Nomad Foods is a company with outstanding investment and operational track record that has a clear focus on frozen foods segment in Europe. There is of course still a lot of work to do and a number of conditions that need to be fulfilled before coming to a final agreement, but we fully expect to be able to do this”, said James Pearson, Fortenova Group’s Chief Financial Officer

“Multi-party due diligence process for the Frozen Food Business Group has been brought to a successful completion by our acceptance to continue negotiations exclusively with Nomad Foods, who have so far proved to be an extremely strong potential partner for our Frozen Food Business Group. Fortenova Group’s ultimate goal, over and above maximizing value, remains to be the conclusion of a transaction with a strategic partner who will make the maximum contribution to the further development of the Frozen Food Business Group and recognize the full value and potential of this business and its people”, said Fabris Peruško, Fortenova Group’s Chief Executive Officer and member of the Board of Directors. “This transaction is part of the process of the capital structure optimization that will enable the further development of the Fortenova Group. I expect the next phase of the Frozen Food Business Group sale process to be completed by the end of Q1 this year through the signing of a Sale and Purchase Agreement. If so, the transaction could be completed post receipt of regulatory approvals, as early as Summer 2021. We will continue to keep our people and the market informed of further developments in a timely manner”, concluded Peruško.

Fortenova grupa d.d. agrees acquisition of stake in the company A.N.P. Energija d.o.o. and sells stake in KHA četiri

30.11.2020.

Fortenova grupa d.d. entered into a definitive agreement with KHA cetiri d.o.o., a Croatia-based hotel development company, to sell its 25% stake in KHA cetiri to that company. In a separate transaction, Fortenova grupa d.d. agreed to acquire a 26% stake in A.N.P. Energija, held by the open venture capital investment fund with private placement – Prosperus FGS, thus gaining a controlling stake in the firm A.N.P. Energija.

A.N.P. Energija d.o.o. is the sole owner of Energija Gradec d.o.o., a company which operates five bio-fuel power plants in Slavonia and Central Croatia with installed capacity of 9.8MW, using biomass supplied by Fortenova Group’s agricultural companies to produce electricity from biogas.

These two transactions will allow Fortenova Group to exit this non-core hotel project and unlock significant value for Fortenova Group’s Agriculture segment by consolidating the Energija Gradec biogas power generation business.

“This provides another step forward in Fortenova Group’s strategy of divesting non core businesses and focusing on its core retail, food and agri divisions. With the consolidated holding in these bio fuel plants, Fortenova is not only investing in direct financial improvements but is also continuing to develop a more environmentally sustainable agri business model for the future.” – said James Pearson, Chief Financial Officer of Fortenova Group.

Springwater Capital to acquire Fortenova Group's Kompas network

11.11.2020.

Fortenova Group and Springwater Capital (“SWC”) signed an agreement on the sale and purchase of Kompas d.d. Ljubljana and Kompas d.o.o. Porec.

The Kompas network is one of the oldest and largest tour operators organising individual and group travel in the Adria region, and the region’s largest destination management company. In 2019, more than a million travellers used the wide range of the Kompas network’s tourist services, having realized over six million overnight stays.

SWC has a deep investment expertise in the tourism sector with investments in Spain, Portugal and Belgium: this includes Spain’s fourth largest company in the travel sector, as well as the largest travel agency network in Portugal.

“With this transaction Fortenova Group will largely complete the process of exiting its tourist investments that accounted for a significant part of our non-core business, which we have been successfully disposing of throughout the course of this year. We are very pleased to have found an excellent strategic partner for the Kompas network’s portfolio and employees, that has a very strong expertise and knowledge of tourist operations, and who will be looking to further invest and grow the business. As such I believe this transaction will have significant positive benefits to the existing business and employees who, on behalf of the Fortenova Board and Executive Directors, I would like to thank for all their hardwork and dedication in what has been an extremely challenging year in the tourism sector.

For Fortenova, as already communicated, exiting non-core investments enables us to focus on strengthening all the parameters of our core businesses – retail, food and agriculture, and streamline our organisational and management structures” – said James Pearson, Fortenova Group’s Chief Financial Officer.

The transaction will be formally closed following the approval of the concentration of SWC and Kompas by the Slovenian Market Competition Agency.

Fortenova Group to move forward with the Frozen Food Business Group divestment

02.11.2020.

After receiving a number of non-binding offers for the acquisition of the companies Ledo plus, Ledo Citluk and Frikom, forming together with several smaller affiliated companies the Frozen Food Business Group, Fortenova Group have decided to move forward to the next phase of the sales process by inviting a select number of bidders to start due diligence.

“The market test has confirmed that there is strong international interest among potential investors in our Frozen Food business. The qualified non-binding offers come from companies with outstanding investment and operational track record. We are glad that we will be entering due diligence process with some extremely strong potential partners”, said James Pearson, Fortenova Group’s Chief Financial Officer

“Our ultimate goal, over and above maximising value, remains to be selection of a strategic partner who will make the maximum contribution to the further development of the Frozen Food Business Group. Even though we are entering the due diligence phase now, completion of the process still depends on finding the partner who will recognize the full value and potential of this business and its people”, said Fabris Peruško, Fortenova Group’s Chief Executive Officer and member of the Board of Directors. “In order to proactively achieve our targeted capital structure via deleveraging the company, Fortenova Group is ready to dispose of only one segment of the core business, which potentially would be the Frozen Food Business Group. I expect the due diligence process to be completed by the end of this year and we will continue to keep our people and the market informed of further developments in a timely manner”, concluded Peruško.”

Fortenova Group and Meggle reach agreement on the purchase of Osijek dairy’s property and production line

28.10.2020.

Belje plus, part of the Fortenova Group, and MEGGLE Croatia reached and signed an agreement on the purchase of the assets of the MEGGLE dairy in Osijek. By purchasing MEGGLE’s property and production line – with the intention to commence own production as of 1st January 2021 -  Belje will preserve the long-standing tradition of milk production in that part of Slavonia.

With the start of the production in Osijek Belje will purchase a certain quantity of milk from MEGGLE’s present contractors, while the need for employees is still under review, with around 100 people expected to be employed.

Fortenova Group already accounts for around 10 per cent of the total milk quantity produced in Croatia, which is around 5 per cent of the local needs. Most of the milk produced at Belje is used for the production of ABC cheese, with its annual production currently at the level of 3,700 tonnes, while plans have been developed for the significant expansion of its portfolio.

“We are happy with the agreement reached and with having closed the sale of MEGGLE’s assets in Osijek, as well as with Belje’s decision to produce on that location following our withdrawal. After having made the final decision on closing down our production in Croatia, the MEGGLE Group has exerted maximum efforts to find a buyer for the assets in order for as many of our employees as possible to have new employment after 31st December and for our contractors not to have any standstill in the purchase of milk. Until the end of the year MEGGLE shall continue to restructure its operations, in accordance with the agreement reached with the trade unions, while meeting all the assumed obligations in time and in full”, said Marjan Vucak, President of the Management Board of MEGGLE Croatia.

“The MEGGLE Group is aware of how important it is to preserve the milk production in Osijek, which is why we had delayed our decision for as long as this was possible and we are glad that with the new owner it will be continued after all. Over all these years Meggle has been a socially sensitive and responsible employer and a reliable business partner. Having reached this agreement with Fortenova Group confirms that we have continued to behave that way in this restructuring process, too, and we shall keep operating according to the same principles going forward”, said Matthias Oettel, CEO of the MEGGLE Group.

“Fortenova Group has continuously worked on further improving the value and strengthening the portfolio of its brands. In order to utilise all potentials of ABC fresh cream cheese, which is one of the strongest regional brands and one of our strongest export products, Belje needs additional production capacities and MEGGLE’s withdrawal enabled us to secure them within short time. With the Osijek plant we have secured the prerequisites for the development of new products, made of local raw material, of premium quality and higher added value. With this move we shall continue to work on the preservation and further growth of the local agricultural production, which along with saving existing and opening new jobs is of great significance for Slavonia and the broader community. Fortenova Group views its operations in the long term and we are currently preparing the company for operations in the period following the crisis in order to have as strong as possible a lever for growth once the recovery starts, with this transaction to be entirely financed from our operations” – said Fabris Peruško, Chief Executive Officer of Fortenova Group.

“The acquisition of Meggle’s assets and the development of new products can be an additional encouragement to increase the quantities of milk produced and for small producers to invest in dairy cow farms in Croatia. This would certainly have a positive effect on the change of trends, after this year the long-lasting decline in milk quantities produced in Croatia has finally been stopped. The dairy industry is one of the major focus areas of the 2020-2025 strategy in Fortenova Group’s Agriculture Division, and the Belje food industry will be the platform on which the development in that segment will gain momentum” – says Andrej Dean, President of the Management Board of Belje.

The transaction will be carried out once all the required regulatory approvals are in place.

Fortenova Group has received a number of non-binding offers for the Frozen Food Business Group

22.09.2020.

Fortenova Group has received a number of non-binding offers for the acquisition of the companies Ledo plus, Ledo Citluk and Frikom, forming together with several smaller affiliated companies the Frozen Food Business Group, which operates within Fortenova Group’s Food Division.

“Over the last few years, and again in recent weeks, there has been occasional comment and discussion in regards to offers being made for various Fortenova Group’s assets. Whilst this interest reflects the strength of our business, brands and management it obviously creates uncertainty and concern for our employees. We will therefore aim to quickly review the offers received and decide whether to move forward with one or more of them. Our aim is for this decision to be taken by mid-October, which will then be communicated first to our employees and then announced to the public. Our ultimate goal, subject to achieving a satisfactory price, is to select a strategic partner who will make the maximum contribution to the further development of the Frozen Food Business Group and completion of the process depends on finding such partner”, said Fabris Peruško, Fortenova Group’s Chief Executive Officer and member of the Board of Directors.

 “With our clear strategy to financially strengthen the company in mind, a sale of the Frozen Food Business Group, if concluded, would result in a reduction of debt that would transform the financial position of the overall Fortenova Group. This would then allow full investment in the remaining businesses to drive their future growth. The Executive Directors and the Board will review the offers received and will quickly take a decision on how to move forward”, said James Pearson, Fortenova Group’s Chief Financial Officer.

“To proactively achieve our targeted capital structure via deleveraging the company, we are ready to dispose of only one segment of the core business which potentially with these offers would be the Frozen Food Business Group. Beyond this, the divestment of our non-core operations in order to focus on the core business will be continued”, concluded Fabris Peruško, Fortenova Group’s Chief Executive Officer and member of the Board of Directors.

European Commission clears concentration of Fortenova Group and Poslovni sistemi Mercator

22.09.2020.

The European Commission has cleared the intention of concentration whereby Fortenova Group acquires control over Poslovni sistemi Mercator, Ljubljana.

For the territories of Serbia, Bosnia and Herzegovina, Montenegro and North Macedonia the concentration was filed with the competent local market competition regulators and all national authorities except for the Competition Commission of the Republic of Serbia have now approved the concentration.  

“We are pleased with the decision of the European Commission to approve the transfer of Mercator from Agrokor to Fortenova Group has been given. We expect that the approval from the Serbian Commission will follow shortly. This has paved the way for the transfer of Mercator to be realized by the end of this year and for Fortenova Group’s retail as of 2021 to start acting on the market as a common, regional group, whose operations are in the interest of all stakeholders – from employees through suppliers and shareholders to the entire economic environment, both in the national states and regionwide” – said Fabris Peruško, Chief Executive Officer of Fortenova Group commenting on the EC decision.

“A strong owner will enable Mercator's further growth and development, and support Mercator's strategic projects, including the 130-million-euro investment into a new logistics centre in Ljubljana,” added Tomislav Cizmic, President of the Management Board of Mercator.

Changes in the Board of Directors of Fortenova Group

14.07.2020.

Fortenova Group’s DR Holders have today at the General Assembly meeting voted in favor of changes in the Group’s Board of Directors by adopting the resolution to approve the acceptance of resignations of two of its members – Mr. Alexander Torbakhov and Mr. Paul Foley.

Mr. Torbakhov’s resignation has been prompted by the fact that he has been appointed the CEO of a major Russian telecommunications company VimpelCom.

Mr. Foley has decided to focus cooperation with Fortenova Group fully on its retail operations through the roles of a member of Supervisory Boards of Mercator in Slovenia and Konzum plus in Croatia, that he already holds. Mr. Foley is also expected to become the Chairman of the Supervisory Board of Konzum, thus putting to best use his lifelong experience in the retail industry.

Changes in the Board of Directors of Fortenova Group d.d.

19.09.2019.

A meeting of holders of Depositary Receipts issued by Fortenova Group STAK Stichting, a foundation with registered seat in the Netherlands, has been convened today to be held on 30 September 2019. Depositary Receipt Holders represent the ultimate owners of Croatia-based Fortenova grupa d.d. and at the forthcoming DR Holder Meeting they will decide on the appointment of two new members to the Board of Directors of Fortenova grupa d.d. Following the recent resignation of two non-executive members of the Board of Directors, Kelly Griffith and Daniel Michael Böhi, it is proposed that at the DR Holder Meeting the shareholders would decide on the appointment of Paul Bastone and Alexander Torbakhov to the Board of Directors of Fortenova grupa d.d. for a three-year term of office. DR Holders will be able to either vote electronically as of today at 5 p.m. until 5 p.m. on Friday, 27 September 2019 or at the DR Holder Meeting itself on Monday, 30 September 2019.

Furthermore, the Workers' Council of Fortenova grupa d.d. today advised the company's Board of Directors of the appointment of Ivica Mudrinic to the Board of Directors as workers' representative. While this appoinment pursuant to the decision of the Workers' Council is effective immediately, the other two appointments mentioned above have to be adopted by the majority of votes of the Depositary Receipt Holders.

Fortenova Group Successfully Closes New Financing

06.09.2019.

On Friday, 6 September 2019 Fortenova Group issued a EUR1.157 billion bond, thereby successfully concluding the process of refinancing the Super-Priority Facility Agreement (SPFA) dated 8 June 2017. The new financing is structured as a 4-year bond in the amount of EUR 1.157 billion, with a 7.3% interest rate plus EURIBOR, with 1% floor and is led by HPS Investment Partners in cooperation with VTB Bank.

The refinancing agreement envisages the interest rate to be successively reduced as the Fortenova Group will be reducing its leverage ratio.

„By closing the new financing arrangement Fortenova Group has fully refinanced the SPFA loan and provided for its mid-term stability and long-term viability, growth and development. We would like to thank all shareholders who have recognized and supported the process that is in the interest of all stakeholders. Fortenova Group is now entering a new stage of operations focusing on profitability increase, efficiency improvements and value creation for all stakeholders“, said Fabris Peruško, CEO of Fortenova grupa d.d.

Over 80% DR Holders voted in favor of the new senior financing led by HPS Investment Partners

26.07.2019.

Holders of Depositary Receipts, issued by Fortenova Group STAK Stichting, voted today at the General Assembly held in Amsterdam with over 80% majority in favor of the new financing arrangement of Fortenova Group, with the purpose to refinance its current Super-Priority Facility Agreement dated June 8th, 2017. The new financing is structured as a 4-year bond in the amount of up to 1.2 billion euro, with a 7.3% interest rate plus EURIBOR with a 1% floor, and it will be led by HPS Investment Partners. The closing of the refinancing process will be finalized by the end of August.

“The General Assembly vote proved that the majority of our shareholders recognized the importance of this new financing for Fortenova Group in terms of securing our mid-term financial stability as well as long-term sustainability, growth and development. I am thankful to our shareholders for supporting the decision of the Fortenova Group's management. I would also like to thank all our stakeholders that were involved in achieving this critical milestone in the refinancing process. Fortenova Group is now focused on closing the transaction after which we will enter a new stage of our business operations that will be focused on increasing profitability, improving performance and creating additional value to all stakeholders.” said Fabris Peruško, CEO of Fortenova Group d.d.

Notice to Noteholders re New Instruments

08.04.2019.

To the attention of noteholders in respect of the (a) EUR 325 million 9.125% New York law governed senior notes due to mature in 2020 (ISINs: XS0836495183 / XS0836495696) (the "EUR2020"), (b) USD 300 million 8.875% New York law governed senior notes due to mature in 2020 (ISINs: USX0027KAG32 / US00855UAB52, CUSIPs: X0027KAG3 / 00855UAB5) (the "USD2020") and (c) EUR 300 million 9.875% New York law governed senior notes due to mature in 2019 (ISINs: XS0776111188 / XS0776110966) (the "EUR2019") issued by Agrokor d.d. (the "Notes" and the holders thereof being "Noteholders").

Under the Settlement Plan , BNY Mellon was entitled to receive the New Instruments issued for the Notes and to appoint Noteholders as its designees to receive their respective portion of New Instruments on its behalf (see Cl. 18.3.1 of the Settlement Plan). BNY Mellon designated (a) in relation to 1,904,277 Strips allocated to BNY Mellon in respect of the EUR2020 and USD2020 Notes, and in relation to 1,126,698 Strips allocated to BNY Mellon in respect to the EUR2019 Notes, certain entities to receive such distributions on account of its Assigned Claim and (b) in relation to the remainder, each Noteholder to receive such distributions, pro rata based on each Noteholder’s holding of Notes (“Designation”). For further details, please refer to the notice from BNY Mellon on 2 April 2019 (Trustees Notice).

Initial meeting of holders of depositary receipts of Fortenova Group was held

02.04.2019.

The meeting of holders of depositary receipts of Fortenova Group STAK Stichting , a foundation (stichting), incorporated under the laws of the Netherlands, with its corporate seat in Amsterdam, the Netherlands, was held on 1 April 2019 in Amsterdam.

The holders of 168,300,328 depositary receipts were present or represented at Initial DR Holder Meeting, representing 63.76% of the aggregate number of issued and outstanding Depositary Receipts with voting rights. The agenda of the meeting consisted of the appointment of the members of the board of directors of Fortenova grupa d.d., the remuneration of members of the board of directors of Fortenova, appointment and remuneration of the managing directors of Aisle Dutch HoldCo B.V. and the Company and granting of the title of managing directors and acquisition by the Company from Agram Invest d.d. of certain shares in Agrolaguna d.d. and Ċ½itnjak d.d.

All proposals were accepted with high majority of present votes of the Initial DR Holder Meeting.