Podravka Group Business Results

2006

Odnosi s investitorima March 2007

Overview of key events

Investor relations Podravka Group Business Results March 2007 Overview of key events 2006

For the second year in a row proclaimed the Supreme Court of New members to the č strongest brand according to accepts revision Koprivni ka tiskarnica Supervisory Board č Prizma research in litigation with sold to Grafi ar (SLO, CRO, SRB, B&H) Avena d.o.o.

Distribution contract with Corporate bond Merge of Podravka Eva brand purchase Nestlé discontinued in kuna issued companies in for some markets worth HRK 375 mln

Podravka becomes IBLF member Vegeta Baby food factory Total investment Superbrand Russia construction started HRK 182 mln Sustainable development report issued according to Podravka GRI guidelines Superbrand Slovakia

Investor relations Podravka Group Business Results March 2007 Organic growth of SBA Food & Beverages

Croatia South-East Central Western Europe, Eastern Europe Europe Overseas countries Europe & the Orient

+10% +7% +7% +5% +4% +4%

-9% -13%

Podravka’s brands

Commercial goods -25% -28%

Investor relations Podravka Group Business Results March 2007 New products in 2006

Čokolino cereals launched in February 2006

Čokolino spread launched in September 2006

Lino baby food with prebiotic launched in July 2006

Investor relations Podravka Group Business Results March 2007 New products in 2006

Vegeta piqant launched in September 2006

New Vegeta Liquid Stock launched to the Australian market in May 2006

- Food realized 34% sales increase - Food market share on the Australian market increase from 22% up to 29%

Investor relations Podravka Group Business Results March 2007 New products and new product design in 2006

Podravka

The new design of Podravka Soups in September 2006

Ready-to-serve meals

Ready- to- serve meals launched in February 2006

Investor relations Podravka Group Business Results March 2007 New products in 2006

Jams, ready- made sauces & chopped tomatoes

Frozen products and Vegetables

Investor relations Podravka Group Business Results New pharmaceutical products in 2006 March 2007

Investor relations Podravka Group Business Results March 2007 Eva- icon of a walrus in Podravka’s product portfolio

Sardines Tuna Podravka purchases EVA brand from Adria, Zadar

one of the most accepted brands of tinned fish in Croatia and Southeast Europe (GfK research)

among top brands for recognizability, use, popularity in sardines category in the markets of Croatia and South East Europe (GfK research)

listing of new products in the first quarter of 2007

a category with big potential of expanding assortment of new products

Investor relations Podravka Group Business Results March 2007 Warzywko & Perfecta Warzywko

Podravka and Kamis submitted to Polish Agency for the protection of market competition a request to approve the purchase of Warzywko and Perfecta brands

Warzywko – Polish brand for universal and special food seasoning and bouillons

Perfecta – universal food seasonings brand sold in Russia, Ukraine, Romaina

Purchasing Warzywko Podravka will strengthen its leader position on Polish market of food seasonings

Purchasing Warzywko Podravka enters “medium price” segment on Polish market and expands consumer base and profiles Perfecta

Investor relations Podravka Group Business Results March 2007 Investments outlook 2006

at the stage of test production Investment the most important - Baby Food & Cream Spread HRK 182.3 mln investments by - Sweets & Snacks products group: - Meat & meat products

HRK 166.3 mln invested in SBA Food & Beverage +34%

HRK 16.0 mln invested in SBA Pharmaceuticals

Investor relations Podravka Group Business Results March 2007

Podravka Group Sales

Investor relations Podravka Group Business Results March 2007 Sales structure of the Podravka Group 2006

Sales growth on domestic and foreign markets 2002-2006 Sales structure according to SBA mln HRK mln HRK 3,467 3,441 3,218 3,295 2,852.0 2,747 83%

1,612 1,586 1,470 1,526 1,226

17% 605.1 1,748 1,769 1,829 1,881 1,521 06/05 Food & Beverages +1%

2002 2003 2004 2005 2006 Pharmaceuticals -1% Domestic Foreign market market Total Total +1%

5.5% 6.7% 6.0% CAGR Note: SBA Services account for 0,3% of total sales

Investor relations Podravka Group Business Results March 2007 SBA Food & Beverages

-1% Vegeta- Food Seasoning 2006 +5% Meat & meat products

+7% Baby Food, Sweets & Snack 23% 23% 25% 23% +4% Fruit & Vegetables

+4% Podravka Dishes 4% 4% 11% 6% 12% +1% Beverages 5% 2005 5% 10% -9% 5% 8% Rice & Legumes 8% 10% 9% +16% 9% Other -3% Commercial Goods Total growth Total sales

+1% HRK 2,852.0 mln Organic growth 2%

Investor relations Podravka Group Business Results March 2007 SBA Pharmaceuticals

-9% Blood& Blood Forming Organs, Hearth& 2006 Cardiovascular System 4% 1% +2% Musculoskeletal & Nervous System 5% 6% 4% 3% 1% +17% Dermatologicals 7% 38% 9% 9% -3% General Anti-infectives & Antiparasitic Medicines 41%

-10% Respiratory, Digestive & Genitourinary System 13% 2005 15% +12% Dietetic & Natural Products 22% +29% OTC 22%

-25% Other

Total growth Total sales

-1% HRK 605.1 mln

Investor relations Podravka Group Business Results March 2007 Sales structure per markets Sales structure of SBA Food & Beverages per markets

4% Sales structure per markets 8%

15% 4,4% Croatia 6,4% 48%

12,5% South-East Europe 25%

Central Europe 54,2% Sales structure of SBA Pharmaceuticals per markets 7% Western Europe, 3% 22,5% Overseas countries & the Orient 12% Eastern Europe

78%

Investor relations Podravka Group Business Results March 2007 Croatian market

Market characteristics Sales per SBA Sales growth per SBA Food & Beverages

Total sales: HRK 1,880.8 mln Vegeta- Food Seasonings +2% Food & Beverages organic growth: +4% 25% Podravka dishes +4%

Merge of sales operative divisions within Meat and Meat products SBA Food&beverages +4%

Baby Food, Desserts & +7% Costs rationalization and more quality Snack processing of points of sale 75% Fruit & Vegetables +3%

“hard discounters” entry starts the final Rice & Legumes -30% stage of retail market consolidation Food & Beverages +5% Beverages 0% Pharmaceuticals -3% Key accounts share in total sales is growing Other +5% Total +3%

Profitability retained through rationalizing costs and positioning through sales policy organic growth

Eva brand purchase +4%

Investor relations Podravka Group Business Results March 2007 South-East Europe market

Market characteristics Sales per countries change

10% B&H -9.6% Total sales: HRK 778.7 mln 11% 36% Serbia 7.4% Food & Beverages organic growth: +7% 8.3% Serbia: Nestle products distribution in 21% small stores discontinued Macedonia -12.0%

22% B&H/Macedonia: complete discontinuation Other 8.2% of Nestle products distribution Sales per SBA Total SE Europe -1.3% 9% Commercial goods: sales drop -13%

Serbia: organic growth +24% Food & Beverages -0.5%

Pharmaceuticals -8.6%

91%

Investor relations Podravka Group Business Results March 2007 Central Europe market

Market characteristics Sales per countries change

Total sales: HRK 434.8 mln 11% Czech Rep. -9.7%

Food & Beverages organic growth: +4% 39% Poland -9.2% 20% Profitability improvement Slovakia 1.7%

Focus on profitable product groups -9.4% 30% Czech market : private labels production discontinued in Rice and legumes product group Sales per SBA Total CE -7.4%

Czech market : service production for 5% Kraft foods discontinued

Food & Beverages -8.3% /Slovakia : production rationalization-Lagris Pharmaceuticals 16.6% Poland: dependant companies merge 95% Slovakia: Podravka Superbrand

Investor relations Podravka Group Business Results Western Europe, Overseas countries & the Orient March 2007

Market characteristics Sales per countries change Germany 5.1% Total sales: HRK 221.9 mln 21%

36% USA -1.0% Food & Beverages organic growth: +7%

Australia 14.4% 17% Germany: entry into Lidl chain Austria 1.3% 10% Australia: Vegeta liquid stock launched 16% Other -3.7% Australia: Vegeta growth +34% Sales per SBA Total WE, Overseas countries & the Orient 1.7%

Food & Beverages 2.0%

100% Pharmeceuticals -76.2%

Investor relations Podravka Group Business Results March 2007 Eastern Europe

Market characteristics change Sales per countries

16.0% Total sales: HRK 151.3 mln 6% Russia 10% Pribaltic -11.5% Food & Beverages organic growth: +5% 10% Romania 15.8% Pharmaceuticals: growth generator Other 11.5% 74% Russia: 16% sales growth Total EE 12.1% Sales per SBA Romania: new organization

28% Russia: entry into Magnit- second largest commercial chain in Russia Food & Beverages 2.0%

Pharmaceuticals 49.2%

72%

Investor relations Podravka Group Business Results March 2007

Financial indicators

Investor relations Podravka Group Business Results March 2007 Restructuring process in 2006

Management Board decides to continue the restructuring process for non-basic 2006 Results without restructuring costs parts of the company 2006 Reported results

HRK mln Koprivni čka tiskarnica d.o.o. spin-off 373.3 +45.8

327.5 Merge of companies in Poland

New Collective agreement signed 172.0 +45.8

126.2 106.2 +45.8 Severance payments 60.4

Internal reallocation of employees with EBITDA EBIT NET PROFIT the purpose of reducing seasonal/casual employment

Investor relations Podravka Group Business Results March 2007 Podravka Group business results without the restructuring costs impact

Podravka Group Results without the Reported result restructuring costs impact

2006 2005 06/05 2006 2005 06/05

Sales 3,467.5 3,441.4 1% 3,467.5 3,441.4 1%

Gross profit 1,351.2 1,336.9 1% 1,351.2 1,336.9 1%

EBITDA 373.3 315.9 18% 327.5 308.5 6%

EBIT 172.0 92.9 85% 126.2 85.5 48%

Net profit 106.2 70.0 52% 60.4 62.6 -4%

Gross margin % 39.0 38.8 12 bp 39.0 38.8 12 bp

EBITDA margin % 10.8 9.2 159 bp 9.4 9.0 48 bp

EBIT margin % 5.0 2.7 226 bp 3.6 2.5 116 bp

Net margin % 3.1 2.0 103 bp 1.7 1.8 -8 bp

Investor relations Podravka Group Business Results March 2007 Business results per SBA

SBA Food & Beverage Pharmaceuticals

2006 2005 06/05 2006 2005 06/05

Sales 2,852.0 2,820.0 1% 605.1 612.0 -1%

Gross profit 1,008.5 985.3 2% 342.7 359.5 -5%

EBITDA 143.0 187.0 -24% 169.8 118.2 44%

EBIT -14.0 8.5 -265% 125.5 76.4 64%

Net profit -40.6 10.6 -483% 100.7 51.4 96%

Gross margin % 35.4 34.9 50 bp 56.6 58.7 -210 bp

EBITDA margin% 5.0 6.6 -160 bp 28.1 19.3 880 bp

EBIT margin % -0.5 0.3 -80 bp 20.7 12.5 820 bp

Net margin % -1.4 0.4 -180 bp 16.6 8.4 820 bp

Investor relations Podravka Group Business Results March 2007 Podravka Group Balance sheet (summary)

31/12/ 31/12 PODRAVKA GROUP 2006 2005 HRK MLN 31/12/2006 31/12/2005

D/E 56.2% 43.4% Cash 126.1 126.2 Net debt 856.1 706.8 Inventory 564.5 569.1 Senior net Debt/EBITDA 2.6 2.3

Total Current Assets 1,943.1 1,619.5 Interest coverage 2.6 2.2

Total Assets 3,700.5 3,412.8

Quick ratio 1.0 1.1

Long term debt 525.3 515.4 Current ratio 1.4 1.7 Cash ratio 0.1 0.2 Short term debt 456.9 317.6

Shareholders’ Equity 1,746.7 1,921.2

ROE 3.5% 3.3% Total Liabilities 3,700.5 3,412.8 ROA 1.6% 1.8%

Investor relations Podravka Group Business Results March 2007 Podravka Group indebtedness movement

Indebtedness movement and debt structure 2002 - 2006 100% Debt structure 31/12/2006 122.9 130.9 229.5 285.5 479.5 148.8 29.1 % 186.8 STD 159.2 171.4 157.0 Current part of LTD 17.4 % 684.5 515.3 496.1 525.3 501.5 LTD 53.5 %

2002 2003 2004 2005 2006 HRK mln 884.8 1,138.0 956.3 833.0 982.2

indebtedness in relation to +18% 31/12/2005

Investor relations Podravka Group Business Results March 2007 Debt refinancing

PODR-O-072A Debt refinancing changes currency exposure to received credits “existing bond”

Issued: 20/02/2004 Maturity: 5 years Amount: EUR 27 mln 100% Yield: 5.00% Debt structure by 158.0 99.6% of the “existing bond” 177.8 currency 31/12/2006 06/05 issued bougth off

637.7

HRK 65% +259% PODR-O-115A 670.8 552.2 “new bond” EUR 26% -54% 254.9 Issued: 18/05/2006 Maturity: 5 years other 102.9 102.9 89.5 9% -13% Amount: HRK 375 mln Yield: 5.125% 2004 2005 2006

Investor relations Podravka Group Business Results March 2007

Costs

Investor relations Podravka Group Business Results March 2007 Structure of operating expenses

2005 2006 HRK 3,363.1 mln HRK 3,381.5 mln operating expenses

10.7% 10.6%

26.7% 26.8%

62.6% 62.6%

in relation to share in sales change 2005 2006

COGS +1% 61.0% -20 bp

Advertising and promotion costs S&D costs +1% 26.1% 0 bp

0% 10.4% 0 bp + 9% G&A costs Total +1% 97.5% -20 bp

Investor relations Podravka Group Business Results March 2007 Fokus on Podravka’s strongest brands

Higher investment into marketing activities

Marketing efficiency tracking

Advancement and investment into research and development

Complexity management

Stronger organic growth Better profitability

Investor relations Podravka Group Business Results March 2007 Marketing activities in 2006

Investor relations Podravka Group Business Results March 2007

Information for shareholders

Investor relations Podravka Group Business Results March 2007 Comparative indices movement in 2006

Comparative indices movement and PODR-R-A Index Basic index (02/01/2006=100) INDEX WEIGHT

170 SETX (31/12/2006) 2.8% 160 CROBEX (31/12/2006) 6.7% 150 CROEMI (31/12/2006) 12.6%

140

130

120 RECOMMENDATIONS

110 ERSTE ACCUMULATE

100 FIMA HOLD HAAB HOLD 90 HOLD Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- RBA 06 06 06 06 06 06 06 06 06 06 06 06

PODR-R-A CROBEX CROEMI SETX

Investor relations Podravka Group Business Results March 2007 Share price and turnover

HRK mln HRK 31/12/2006 300 600 Turnover Close price (HRK) 470.01 Highest 250 500 Market cap. (HRK mln) 2,547.5 Close Lowest 12 month max / min (HRK) 495 / 315.01 200 400 12 month turnover (HRK mln ) 671.8

150 300 Average daily turnover (HRK mln) 2.69

Free float (%) 73 100 200

50 100 INDICATORS

0 0 2006 2005

6 6 6 6 6 6 -0 0 -0 -0 EPS 11,2 11,7 n-06 b r- ul-0 ec-05 a e J ug ep D J F Ma Apr-06 Jun-06 A S Oct-06 Nov-06 Dec-06 May-0 P/E 41,8 27,1 BVPS 322,3 354,5 2005 2006 change P/B 1,5 0,9 WACP P/S 0,7 0,5 HRK 296.69 HRK 399.69 +35%

Investor relations Podravka Group Business Results March 2007 Shareholders structure on 31/12/2006

Top 10 shareholders 62% SHAREHOLDERS No. of shares Weight others legal and natural persons 38% FIMA GROUP d.d. 576,880 10.64%

CPF/CIPI 575,598 10.62% FIMA Group CPF 532,808 9.83% 10.6% CPF/ BANK AUSTRIA CREDIT. 465,849 8.60% Others CIPI 40.2% 10.6% KAITALNI FOND 321,804 5.94% CPF AZ MPF 209,231 3.86% 9.8%

PBZ CROATIA OSIG. MPF 205,090 3.78% Treasury share 0.4% Bank Austria RAIFFEISEN BANK MPF 172,114 3.18% Creditanst. AG 8.6% CN LTD 162,165 3.00% CN LTD Kapitalni TREASURY SHARES 19,689 0.36% 3.0% fond d.d. 5.9% OTHERS 2,178,775 40.19% Raiffeisen MPF PBZ/ AZ MPF TOTAL 5,420,003 100.00% 3.2% Croatia osig. 3.9% MPF CPF Croatian Fund 3.8% CIPI Croatian Institute for Pension Insurance MPF Mandatory Pension Fund

Investor relations Podravka Group Business Results March 2007

CONTACTS

Lidija Kljaji ć Head of the President’s Office PODRAVKA d.d. Ph: + 385 48 651 548 Fax: + 385 48 621 793 E-mail: [email protected]

Irena Kos Head of Investor Relations PODRAVKA d.d. Ph: + 385 1 489 19 13 Fax: + 385 1 489 19 99 E-mail: [email protected]

Investor relations Podravka Group Business Results